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Flex-Foot, Inc. v. CRP, Inc.

Flex-Foot, Inc. v. CRP, Inc.

United States Court of Appeals for the Federal Circuit

February 2, 2001, Decided

99-1489

Opinion

 [***1636]   [*1363]  LINN, Circuit Judge.

CRP, Inc. d/b/a Springlite ("Springlite") appeals the district court's entry of judgment confirming an arbitration award, its holding that Springlite is collaterally estopped from presenting its patent invalidity defenses and counterclaim, and its entry of judgment in favor of Flex-Foot, Inc. and Van L. Phillips (collectively "Flex-Foot") for an injunction and an award of costs. See Flex-Foot, Inc. v. CRP, Inc., SACV 97-504 DOC (C.D. Cal. entered June 11, 1999). Because the district court did not err in affirming the [**2]  arbitration award or entering judgment in favor of Flex-Foot, we affirm.

BACKGROUND

This is the third litigation between Springlite and Flex-Foot regarding U.S. Patent No. 4,822,363 (the " '363 patent"). In 1989, Flex-Foot brought the first lawsuit against Springlite for infringement of the '363 patent. That action was promptly settled and dismissed by way of a settlement agreement and a corresponding license agreement in which Springlite agreed to pay a royalty on the accused Springlite device.

Springlite contends that its primary motivation in settling with Flex-Foot at that time was economic. Springlite did not have the financial resources to defend against Flex-Foot's infringement claims. Neither the settlement agreement nor the license agreement acknowledged that Springlite's device infringed the '363 patent. In addition, neither agreement barred Springlite from later challenging the validity of the '363 patent. In fact, the license expressly provided that it would expire upon judicial determination that the '363 patent was invalid.

Springlite brought a second action in 1993 (the "DJ action"), seeking a declaration that the '363 patent was invalid. The parties thereafter conducted [**3]  discovery and fully briefed a motion for summary judgment regarding Springlite's invalidity allegations. While that motion was pending, however, the parties settled the case  [*1364]  in March 1994 via another settlement agreement (the "March 1994 Settlement Agreement") and corresponding license agreement (the "March 1994 License Agreement").

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238 F.3d 1362 *; 2001 U.S. App. LEXIS 1432 **; 57 U.S.P.Q.2D (BNA) 1635 ***

FLEX-FOOT, INC. and VAN L. PHILLIPS, Plaintiffs-Appellees, v. CRP, INC. (doing business as Springlite), Defendant-Appellant.

Prior History:  [**1]  Appealed from: United States District Court for the Central District of California. Judge David O. Carter.

Disposition: AFFIRMED.

CORE TERMS

arbitration, patent, settlement agreement, district court, settlement, parties, arbitration award, infringement, challenging, license agreement, invalidity, Foster, licensee, vacate, res judicata, license, written decision, estoppel, consent decree, public policy, unenforceability, manifest, collateral estoppel, expenses, grounds

Business & Corporate Compliance, Pretrial Matters, Alternative Dispute Resolution, Judicial Review, Civil Procedure, Appeals, Standards of Review, Clearly Erroneous Review, De Novo Review, Arbitration, General Overview, International Trade Law, Dispute Resolution, International Commercial Arbitration, Arbitration, Federal Arbitration Act, Declaratory Judgments, Federal Declaratory Judgments, Patent Law, Remedies, Declaratory Judgments, Jurisdiction & Review