Iguana, LLC v. Lanham et al

Filing 240

ORDER denying 174 Motion for Summary Judgment; finding as moot 239 Motion for Order to Show Cause. Ordered by Judge Clay D. Land on 12/05/2011. (CGC)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
VALDOSTA DIVISION
IGUANA, LLC,

*

Plaintiff,

*

vs.

*

PAUL E. LANHAM, et al.,

*

Defendants.

CASE NO. 7:08-CV-9 (CDL)

*
O R D E R

In this action, Defendant Paul E. Lanham (“Paul Lanham”)
asserts

a

patent

infringement

Iguana, LLC (“Iguana”).
rights to

U.S.

counterclaim

against

Plaintiff

Paul Lanham claims that he acquired

Reissue Patent No. 35,571 (“U.S. Re.

‘571”),

including rights to recover for infringement, and that Iguana
infringed the patent.
Iguana’s

Motion

for

Presently pending before the Court is
Summary

Judgment

as

to

Ownership

and

Enforceability of U.S. Re. ‘571 by Paul Lanham (ECF No. 174).1
As discussed below, the motion is denied.
SUMMARY JUDGMENT STANDARD
Summary judgment may be granted only “if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Civ. P.
1

56(a).

Fed. R.

In determining whether a genuine dispute of

There are several other motions pending before the Court.
motions will be addressed in a separate order.

Those

material fact exists to defeat a motion for summary judgment,
the evidence is viewed in the light most favorable to the party
opposing summary judgment, drawing all justifiable inferences in
the opposing party=s favor.
U.S. 242, 255 (1986).

Anderson v. Liberty Lobby, Inc., 477

A fact is material if it is relevant or

necessary to the outcome of the suit.

Id. at 248.

A factual

dispute is genuine if the evidence would allow a reasonable jury
to return a verdict for the nonmoving party.

Id.

DISCUSSION
The

Court

previously

denied

judgment motion filed by Iguana.
7:08-CV-09

(CDL),

[hereinafter

2010

2010
MSJ

WL

3394899

Order].

a

nearly

identical

summary

Iguana, LLC v. Lanham, No.
(M.D.
The

Ga.

Aug.

factual

23,

2010)

background

is

recounted in detail in the previous order, and the Court finds
it unnecessary to repeat it here.

The Court also declines to

revisit those issues that it previously decided in the 2010 MSJ
Order which Iguana seeks to rehash in its presently pending
motion.

The Court focuses on Iguana’s arguments related to

additional

discovery

that

was

not

available

at

the

time

of

Iguana’s prior summary judgment motion.
Iguana

contends

that

additional

discovery

revealed

that

Paul Lanham does not have a valid ownership interest in U.S. Re.
‘571.

Iguana

also

contends

that

2

newly

discovered

evidence

conclusively reveals that U.S. Re. ‘571 is unenforceable.

The

Court addresses each argument in turn.
I.

Ownership of U.S Re. ‘571
A.

Statements by Edward McLeese

Iguana contends that Paul Lanham lacks standing to enforce
U.S. Re. ‘571 because of certain statements the inventor and
patentee, Edward McLeese, made during his deposition.

According

to

agreement

Iguana,

McLeese

“expressly

repudiated”

an

transferring rights in the original patent on which U.S. Re.
‘571 is based, U.S. Patent No. 4,858,634 (“‘634 Patent”), to a
company called Natural Born Carvers.

It is undisputed that the

chain of title for the rights to the patents at issue in this
case

depends

in

part

on

the

Natural

Born

Carvers

license. 2

McLeese did testify that the document he was shown during his
deposition, which was purported to be a copy of the license from
McLeese to Natural Born Carvers, did not appear to be a true and
accurate

copy

of

that

license

based

2

on

the

signature

page.3

As discussed in the 2010 MSJ Order, the evidence viewed in the light
most favorable to Paul Lanham establishes that a company called
Springbok, Inc. had exclusive rights to the ‘634 Patent and U.S. Re.
‘571 based on a license agreement. 2010 MSJ Order, 2010 WL 3394899,
at *2.
Springbok was acquired by Natural Born Carvers, Inc., which
later changed its name to CARV Industries, Inc., then to CARV.com,
Inc. and then to Pacifictradingpost.com.
Id.
Paul Lanham acquired
Springbok from Pacifictradingpost.com and also entered into an
exclusive sublicense agreement regarding U.S. Re. ‘571. Id. at *3.
3
Iguana’s argument assumes that the documents cannot be authenticated
because Iguana presumes that one of the signatories, Randall Lanham,
will not be permitted to testify. As discussed in more detail below,
Randall Lanham’s testimony has not been excluded.

3

McLeese Dep. 229:3-234:16, ECF No. 228-3.
however,

that

he

did

Natural Born Carvers.

enter

into

a

He also testified,

licensing

agreement

with

Id. at 99:24-100:3, ECF No. 228-2; accord

id. at 68:2-9, ECF No. 228-1; see also id. at 95:20:96-5, ECF
No.

228-2

(stating

that

it

was

McLeese’s

understanding

that

Natural Born Carvers “got the whole ball of wax[, meaning] the
entire patent, its rights, or anything developed or derived from
my patents”).
fact

dispute

license

Based on this, the Court concludes that a genuine
exists

agreement

as

with

to

whether

Natural

McLeese

Born

entered

Carvers.

into

the

Accordingly,

Iguana is not entitled to summary judgment based on McLeese’s
statements

questioning

the

authenticity

of

the

license

documents.
B.

Statements by Paul Lanham

Iguana also contends that Paul Lanham lacks standing to
enforce U.S. Re. ‘571 because of certain statements he made
during his deposition.

Specifically, Paul Lanham testified that

he did not sign certain agreements related to U.S. Re. ‘571, and
Iguana argues that these statements establish that Paul Lanham
does not have standing to enforce U.S. Re. ‘571.

Iguana made

the same argument in support of its previous summary judgment
motion, and the Court rejected it.

As the Court previously

explained, while Paul Lanham testified that he did not sign the
agreements, he also testified that his son Randall Lanham, a

4

California attorney, had power of attorney to sign documents on
Paul

Lanham’s

agreements.

behalf

and

had

likely

signed

the

2010 MSJ Order, 2010 WL 3394899, at *6.

relevant
Therefore,

the Court concluded that a genuine fact dispute exists as to
whether Paul Lanham has standing to pursue his counterclaim for
patent infringement.
Iguana
changed

now contends that

because

deposition

in

Randall

July

the state of the evidence has

Lanham

2011.

Based

failed
on

to

this

appear

failure

for

to

his

appear,

Iguana argues, there is no competent testimony to corroborate
Paul Lanham’s statement that Randall Lanham signed the relevant
documents.

This argument is based on Iguana’s presumption that

the Court would preclude Randall Lanham from testifying in this
matter.

The Court has not, however, excluded Randall Lanham’s

testimony.

The Court previously concluded that Randall Lanham’s

failure

appear

to

at

the

deposition

was

due

to

a

“simple

scheduling dispute [that] could have been easily resolved had
counsel

for

Iguana

simply

mutually convenient time.”

rescheduled

the

deposition

to

a

Iguana, LLC v. Lanham, No. 7:08-CV-

09 (CDL), 2011 WL 5154062, at *3 (M.D. Ga. Oct. 28, 2011).

The

Court also ruled that Defendants would be permitted to depose
Randall Lanham to preserve his testimony for trial.

Id. at *4.

Therefore, the evidence on this point is the same as it was when
the Court issued the 2010 MSJ Order.

5

For the reasons set forth

in that Order, there is a genuine fact dispute as to whether
Paul Lanham has standing to pursue his counterclaim for patent
infringement.
II.

Enforceability of U.S. Re. ‘571
Iguana also contends that U.S. Re. ‘571 is unenforceable

because

insufficient

fees

were

paid

to

the

U.S.

Patent

and

Trademark Office (“PTO”) in connection with the original patent
on

which

U.S.

previously

Re.

made

‘571

the

is

based,

same

the

argument,

‘634

Patent.

contending

Iguana

that

“large

entity” fees should have been paid to the PTO in connection with
the ‘634 Patent but that only “small entity” fees were paid.
The

Court

found

that

it

was

“unclear

whether

there

was

any

sublicense of patent rights that would have made large entity
fees applicable when the U.S. Re. ‘571 issue fees or maintenance
fees were due.”
Now,
Investor
agreement

2010 MSJ Order, 2010 WL 3394899, at *5.

Iguana
License
between

points
Agreement

to

newly

that

Jumpstart,

discovered

purports

Inc.

and

to

Hasbro,

evidence:

set

out

Inc.

a

an
1995

licensing

rights in the ‘634 Patent to Hasbro (“Hasbro License”).4

Pl.’s

Mot. to File Newly Discovered Evidence Ex. 3, Inventor License
Agreement, ECF No. 225-4.

Iguana asserts that, based on the

Hasbro License, large entity fees should have been paid to the
4

Iguana previously argued that Hasbro was a licensee of the ‘634
Patent, 2010 MSJ Order, 2010 WL 3394899, at *4, but Iguana did not
have access to and could not produce evidence of that license until
recently.

6

PTO in connection with the ‘634 Patent.
only small entity fees were paid.

It is undisputed that

However, even if large entity

fees were due based on the Hasbro License, “[a]n error in fee
payment makes a patent unenforceable only where it is proven by
clear and convincing evidence that the applicant or applicant’s
counsel deliberately defrauded the PTO by intentionally paying
the small entity amount, knowing that a large entity amount was
due.”

2010 MSJ Order, 2010 WL 3394899, at *5 (citing 37 C.F.R.

§ 1.27(h)(2); Ulead Sys., Inc. v. Lex Computer & Mgmt. Corp.,
351 F.3d 1139, 1146 (Fed. Cir. 2003)).

Even with the Hasbro

License, the present record does not establish as a matter of
law that the patentee or the prosecuting attorneys acted with
intent to mislead the PTO.

Moreover, there is evidence that the

Hasbro License terminated.

E.g., McLeese Dep. 222:10-223:25,

ECF No. 228-3 (stating that patentee never received royalties
from the Hasbro deal, that Hasbro did not “perform the way it
should
against

have

performed”

Hasbro).

For

and
these

that

litigation

reasons,

and

was
for

proceeding
the

reasons

discussed in the 2010 MSJ Order, there is still a genuine fact
dispute as to the enforceability of U.S. Re. ‘571.
CONCLUSION
For

the

reasons

set

forth

above,

Iguana’s

Motion

for

Summary Judgment as to Ownership and Enforceability of U.S. Re.
‘571 by Paul Lanham (ECF No. 174) is denied.

7

Based on this

ruling, Iguana’s Request for Order to Show Cause (ECF No. 239)
is moot.

IT IS SO ORDERED, this 5th day of December, 2011.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE

8