We will be discussing one Federal Circuit case and one California Supreme Court case during our weekly SoCal IP Institute meeting on Monday, December 3, 2012. Brief synopses are presented below.

Sargon Enterprises, Inc. v. Univ. of S. Cal., Case No. S191550 (Cal. Sup. Ct. November 26, 2012) (attached).

Sargon Enterprises is a small dental implant manufacturer that patented a new type of dental implant in 1991 (US Pat. No. 5,004,421).  In 1996, Sargon entered into a contract with the University of Southern California for the university to clinically test the new implant.  Then, in 1999, Sargon sued USC and faculty members of its dental school for breach of contract, claiming that but for the university’s breach, Sargon would have become a worldwide leader in the dental implant industry and made many millions of dollars a year in profit.

During trial, the court excluded expert testimony offered by Sargon relating to their generous assessment of lost profits, stating that the expert’s testimony was speculative.  A jury found that USC had breached the contract and awarded the company $433,000 in compensatory damages.  The California Court of Appeal reversed, holding that the trial court erred in excluding the expert testimony.

The Supreme Court of California reversed the Court of Appeal’s decision, stating that the trial court has a duty to act as a “gatekeeper” to exclude speculative expert testimony, and the trial court acted within its discretion when it excluded opinion testimony that Sargon would have become extraordinarily successful had the university completed the clinical testing.

Revision Military, Inc. v. Balboa Mfg. Co., Case No. 2011-1628 (Fed. Cir. November 27, 2012) (attached).

This case involves design patents D537,098 and D620,039, owned by Revision Military, which are directed toward protective eyewear for hunting and other shooting activities.  Revision sued Balboa Manufacturing for infringement and moved for a preliminary injunction to stop sales of Balboa’s goggles.  The District Court for the District of Vermont denied the motion for preliminary injunction, holding that Revision had not provided a “clear” or “substantial” likelihood of success on the merits, which is the standard for preliminary injunctions under the Second Circuit.

On appeal, the Federal Circuit stated that a preliminary injunction enjoining patent infringement involves substantive matters unique to patent law, and therefore, is governed by the law of the Federal Circuit.  Accordingly, Revision did not need to meet the Second Circuit’s heightened “clear or substantial likelihood” standard, but rather the Federal Circuit’s easier standard of whether success is more likely than not.   The case was remanded so that the lower court can decide whether Revision meets the Federal circuit’s lower standard.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, December 3, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.