Green Edge Ent v. Rubber Mulch Etc LLC

Filing 557

MEMORANDUM AND ORDER; IT IS HEREBY ORDERED that, pursuant to 28 U.S.C. § 1292(b) and the agreement by the parties, this Court's March 15, 2011 Order granting International Mulch and Michael Miller's Motion in Limine (ECF No. 482 ) is certified for interlocutory appeal. There are no pending matters requiring a stay in this case. Signed by Magistrate Judge Terry I. Adelman on 08/09/2011; (DJO)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
GREEN EDGE ENTERPRISES, LLC,

)
)
Plaintiff,
)
)
v.
)
)
RUBBER MULCH ETC. LLC, et al.,
)
)
Defendants/Counterclaim Plaintiffs, )
)
v.
)
)
GREEN EDGE ENTERPRISES, LLC,
)
INTERNATIONAL MULCH COMPANY,
)
and MICHAEL MILLER, et al.,
)
)
Counterclaim Defendants.
)

No. 4:02CV566 TIA

MEMORANDUM AND ORDER
This matter is before the Court on Rubber Resources’ Proposed Order regarding certifying
for appeal the disputes pertaining to Rubber Resources’ Lanham Act claim. The parties consented
to the jurisdiction of the undersigned pursuant to 28 U.S.C. § 636(c).
Background
The procedural history in this case spans nearly a decade. On April 19, 2002, Plaintiff Green
Edge Enterprises, L.L.C. filed a Complaint in federal court against Rubber Mulch Etc. Green Edge
filed an Amended Complaint on January 10, 2005, joining Rubber Resources, Ltd., LLLC and
Groundscape Technologies, LLC as defendants.1 The First Amended Complaint alleged infringement
of U.S. Patent Number 5,910,514 (‘514) by Rubber Resources. On April 4, 2005, Rubber Resources
1

Rubber Mulch Etc. and Groundscape Technologies, LLC are no longer defendants in
this action. Thus, Rubber Resources, Ltd., LLLC remains the only defendant pertinent to this
case.

filed a Counterclaim against Green Edge and the ‘514 patentees, Lee Greenberg and Judy Smith.
Rubber Resources requested declaratory judgment of noninfringement of the ‘514 patent and of
invalidity and/or unenforceability of the ‘514 patent. In addition, the Counterclaim alleged Unfair
Competition in violation of 15 U.S.C. § 1125, known as the Lanham Act. Rubber Resources then
filed a First Amended Counterclaim on July 5, 2005, adding International Mulch Company and
Michael Miller as Counterclaim Defendants.
On March 25, 2008, the Court granted Rubber Resources’ motion for summary judgment,
invalidating the patent on the grounds that Green Edge failed to disclose the best mode and dismissing
Green Edge’s First Amended Complaint.

After disposition of the remaining claims, the parties

appealed to the Federal Circuit Court of Appeals. On September 7, 2010, the Federal Circuit Court
of Appeals affirmed in part, reversed in part, and remanded the case to this Court. Green Edge
Enter., LLC v. Rubber Mulch Etc., LLC, 620 F.3d 1287 (Fed. Cir. 2010).
On remand, the Court set the case for trial on the only remaining claims: Green Edge’s
infringement claim; Rubber Resources’ invalidity claim2; and Rubber Resources claim of unfair
competition under the Lanham Act. Prior to trial, the Court issued several Orders on Motions in
Limine filed by the parties, including an Order on March 15, 2011, excluding evidence relating to
International Mulch and Green Edge’s patent enforcement activities and evidence relating to

2

The Court granted International Mulch and Michael Miller’s Motion to Realign Parties
on November 26, 2008, which allowed those Counterclaim Defendants to realign with Rubber
Resources on Count II of the Defendants’ First Amended Counterclaim and argue the invalidity of
the ‘514 patent. (Memorandum and Order of 11/26/08, ECF No. 293) On September 7, 2010,
the Federal Circuit Court of Appeals found that “International Mulch may assert non-waived
arguments for the invalidity of the ‘514 patent on remand, as it is permissibly aligned with Rubber
Mulch and Rubber Resources.” Green Edge Enter., LLC v. Rubber Mulch Etc., LLC, 620 F.3d
1287, 1295 n. 3 (Fed. Cir. 2010).
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inequitable conduct on behalf of International Mulch or Green Edge in regard to Rubber Resources’
Lanham Act claim. (Order of 3/15/11, ECF No. 482) However, the Court did allow Rubber
Resources to submit a Proffer of Evidence that it would have presented at trial had the Court not
excluded such evidence. Rubber Resources filed said proffer on March 20, 2011. (ECF No. 484)
On April 7, 2011, the case finally went to trial. On Day 4 of the trial, the parties advised the
Court that they had reached an agreement to bifurcate the trial and sever the Lanham Act claim to
allow Rubber Resources to appeal the Court’s ruling on the Motion in Limine. (Transcript of
Proceedings on April 12, 2011, ECF No. 496, 4:9-7:21) Thus, Rubber Resources did not present
the unfair competition claim under the Lanham Act to the jury. On April 15, 2011, the jury reached
a verdict, finding that Rubber Resources willfully infringed all of the claims of the ‘514 patent.3 The
jury also determined that the ‘514 patent was invalid due to anticipation by prior art and obviousness.
(Jury Verdict Form, ECF No. 512)
On April 18, 2011, Rubber Resources submitted a proposed Order of Bifurcation and
Interlocutory Decision to certify for appeal the Court’s evidentiary rulings pertaining to the unfair
competition claim. Shortly thereafter, International Mulch and Michael Miller filed an opposition to
the proposed order, arguing that the proposed order fails to comply with the requirements for
certification and that the Court should instead enter final judgment as a matter of law. On April 27,
2011, Rubber Resources filed its Response, asserting that the parties stipulated to certifying the
evidentiary rulings for appeal, and the Court should hold the parties to this agreement. Since April,
the parties have filed additional responses pertaining to the issue of interlocutory appeal, as well as

3

The jury did not find that Rubber Resources infringed Claim 3, as that Claim was not
listed on the verdict form.
3

raised new issues unrelated to the present certification question.4
Discussion
Rubber Resources requests that this Court certify for appeal the grant of International Mulch’s
Motion in Limine, which excluded evidence relating to International Mulch and Green Edge’s patent
enforcement activities. In that Order, the Court followed Federal Circuit law and found that the
enforcement activities were not objectively baseless, thus requiring the exclusion of such evidence.
The Order did not preclude Rubber Resources from presenting evidence of marketplace statements
that International Mulch and Green Edge were the sole non-infringing sources of synthetic rubber
mulch or from submitting proof that the ‘514 patent was invalid, not enforceable, or not infringed.
(Order of 3/15/11, ECF No. 482) This evidentiary ruling was later buttressed by Rubber Resources’
Proffer of Evidence, which focused on the subjective baselessness of the enforcement activities and
ignored the good faith patent enforcement activities in this Court which included findings by both the
undersigned and the Federal Circuit Court of Appeals that material issues of fact precluded a finding
that the ‘514 patent was invalid as a matter of law. See Green Edge, 620 F.3d at 1297-98 (agreeing
with the district court that genuine issues of material fact precluded summary judgment on the basis
of anticipation, prior sales, and obviousness).
While the Court allowed the parties to bifurcate the trial and agree to take up the matter in
the Court of Appeals, the undersigned is concerned by the fact that its evidentiary ruling is not a final
judgment. In addition, 28 U.S.C. § 1292(b) provides for certification for interlocutory appeal only
4

Rubber Resources most recently filed a Response to Supplemental Memorandum
Regarding Entry of Judgment on July 25, 2011. (ECF No. 551) The Court then ordered
International Mulch and Michael Miller to file a response, which they filed on August 3, 2011.
(ECF No. 554) The majority of that response is devoted to issues that are not the subject of this
Memorandum and Order.
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when “such order involves a controlling question of law as to which there is substantial ground for
difference of opinion.” International Mulch argues that the law is clear that a party cannot use
evidence of good-faith patent enforcement to support a claim for unfair competition. However,
Rubber Resources argued then, and continues to argue now, that the evidence did not demonstrate
good faith enforcement, such that the Court should have allowed evidence of the patent enforcement
history.
Further, review of the transcript demonstrates that Rubber Resources did request that this
Court “bifurcate out the Lanham Act issues at this point and certify the evidentiary issues for appeal”,
and the other parties agreed with the conditions set forth by Rubber Resources’ counsel. (Transcript
of Proceedings on April 12, 2011, ECF No. 496, 4:9-7:21). While the agreement did not specify the
actual procedure or provision to accomplish the certification of appeal, the undersigned finds that the
term “certify” implies that the parties would utilize 28 U.S.C. § 1292(b).5
The Court finds that the issues related to Rubber Resources’ evidence pertaining to the
Lanham Act claim involves controlling issues of law in this case and that there is substantial ground
for difference of opinion. Additionally, an interlocutory appeal may materially advance the ultimate
termination of this case. Based on the above discussion, and in accordance with the agreement
reached by the parties, the Court will certify for interlocutory appeal its Order of March 15, 2011,
granting International Mulch and Michael Miller’s Motion in Limine and excluding evidence related
to patent enforcement activities by Green Edge and International Mulch.
Accordingly,
5

The undersigned also notes that according to Federal Circuit law, “a ruling on a motion
in limine is appealable only as an interlocutory appeal pursuant to 28 U.S.C. § 1292(b).” UltraPrecision Mfg. v. Ford Motor Co., 338 F.3d 1353, 1358 (Fed. Cir. 2003).
5

IT IS HEREBY ORDERED that, pursuant to 28 U.S.C. § 1292(b) and the agreement by
the parties, this Court’s March 15, 2011 Order granting International Mulch and Michael Miller’s
Motion in Limine (ECF No. 482) is certified for interlocutory appeal. There are no pending matters
requiring a stay in this case.

/s/ Terry I. Adelman
UNITED STATES MAGISTRATE JUDGE
Dated this 9th day of August, 2011.

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