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Absent Secrecy, State Law Against Unjust Enrichment Cannot Trump Patent Rights

June 04, 2003

Decision icon Decision

Last Month at the Federal Circuit - June/July 2003

Judges: Archer (author), Michel, and Newman (dissenting)

In Waner v. Ford Motor Co., No. 02- 1184 (Fed. Cir. June 4, 2003), the Federal Circuit reversed a district court’s denial of a JMOL of noninfringement against Ford Motor Company (“Ford”) and affirmed a SJ in favor of Ford against Alan Waner’s claim of unjust enrichment.

Alan Waner owns U.S. Patent No. 5,613,710 (“the ‘710 patent”), which discloses a fender liner for dual rear-wheel trucks. In early 1995, Mr. Waner contacted Ford to inquire about their interest in his fender liner, which he originally began to sell in October 1994. Mr. Waner had sold his fender liners to several Ford dealers and set up exhibits at horse shows trying to sell them as well. After Mr. Waner filed his patent application, he again contacted Ford and met with a Ford engineer for over an hour. The Ford engineer told Waner that he would present Waner’s liner at an upcoming meeting.

Later, the Ford engineer prepared a document in which he proposed adding a liner to prevent paint-crack problems on Ford trucks, but he told Waner that the meeting had been postponed. The Ford engineer also told Waner that he could no longer discuss the matter with Waner and referred him to Ford’s attorneys. Accordingly, Waner sued Ford for usurpment of an idea/unjust enrichment and infringement of the ‘710 patent.

A jury found infringement, and the trial court denied Ford’s motion for JMOL on noninfringement. The Court had previously granted partial SJ in favor of Ford on Waner’s unjust-enrichment claim.

On appeal, the Federal Circuit reviewed the infringement finding and determined that the district court had improperly construed the term “flange” in the claims, concluding that nothing in the specification or prosecution history provided a definition different from the common dictionary definition. The Court also ruled that according to the plain language of the claim, the flange must exist prior to installation of the fender liner. Because Ford’s fender liner is a single, planar sheet prior to installation, it does not infringe.

Concerning the unjust-enrichment claim, the Federal Circuit noted that absent secrecy, state law cannot create a collateral set of rights available as an adjunct or expansion to patent rights. Thus, because Waner’s invention was in the public domain prior to the issuance of the patent, he cannot be protected by a state-law-based claim for unjust enrichment.

Judge Newman dissented on both rulings. Concerning infringement, she found the question close and chose to pay deference to the jury’s verdict. Concerning unjust enrichment, she concluded that a cause of action for unjust enrichment did not require that the thing taken be maintained as a trade secret. Moreover, she did not see this as a case of simply copying an item in the public domain. Rather, in her view, Ford was clearly enriched at the expense of Waner.