Swiss Customs - Procédure Destinataire agree; Délai de dépôt de la déclaration en douane; Suspension

Procédure Destinataire agree:

Délai de dépôt de la déclaration en douane:

Suspension:

Selon l'ordonnance sur les douanes de l'AFD (RS 631.013), le destinataire agréé (Da) doit placer les marchandises importées, présentées et déclarées sommairement au bureau de douane de contrôle sous un régime douanier ultérieur dans un délai de 30 jours.

En raison de la pandémie de Covid 19, l'administration fédérale des douanes a décidé que le délai de présentation de la déclaration en douane pour la procédure Da est suspendu du 1er avril 2020 au 30 juin 2020.

Le Da doit continuer à assurer la traçabilité du cheminement de l'envoi (fil rouge). Ce règlement ne concerne que la procédure Da. 

(Republication de l'Administration suisse des douanes - Swiss Customs Republication)

U.S. Supreme Court, CITGO Asphalt Refining Co. v. Frescati Shipping Co., Docket No. 18-565, J. Sotomayor

Maritime Law

Admiralty

Transportation Contract

Maritime Contracts

Warranty of Safety

Contractual “Safe-Berth Clause”

Safe-Port Clause

Due Diligence from Tort Law or Contractual Express Warranty of Safety?

Implied Third-Party Beneficiary of the Safe-Berth Clause

Forms:

Charter Parties

ASBATANKVOY Form

Contract Drafting

Contracts to charter a vessel are termed “charter parties”

Allision

886 F. 3d 291, affirmed (Third Circuit)

Held: The plain language of the parties’ safe-berth clause establishes a warranty of safety.

In 2004, the M/T Athos I, a 748-foot oil tanker, allided with a nine-ton anchor abandoned on the bed of the Delaware River. The anchor punctured the tanker’s hull, causing 264,000 gallons of heavy crude oil to spill into the river.

(An allision is “the contact of a vessel with a stationary object such as an anchored vessel or a pier.” Black’s Law Dictionary 94 (11th ed. 2019).)

As required by federal statute, respondents Frescati Shipping Company—the Athos I’s owner—and the United States covered the costs of cleanup. They then sought to reclaim those costs from petitioners CITGO Asphalt Refining Company and others (collectively CARCO), which had chartered the Athos I for the voyage that occasioned the oil spill. According to Frescati and the United States, CARCO had breached a contractual “safe-berth clause” obligating CARCO to select a “safe” berth that would allow the Athos I to come and go “always safely afloat.”

During the relevant period, the Athos I was the subject of a series of contracts involving three parties: Frescati, Star Tankers, and CARCO. Frescati owned the Athos I. Star Tankers, an operator of tanker vessels, contracted with Frescati to charter the Athos I for a period of time. CARCO then contracted with Star Tankers to subcharter the Athos I for the inauspicious voyage resulting in the oil spill. Pertinent here is the subcharter agreement between Star Tankers and CARCO. In admiralty, such contracts to charter a vessel are termed “charter parties.” Like many modern charter parties, the agreement between Star Tankers and CARCO was based on a standard industry form contract. It drew essentially verbatim from a widely used template known as the ASBATANKVOY form, named after the Association of Ship Brokers & Agents (USA) Inc. (ASBA) trade association that publishes it. At the core of the parties’ dispute is a clause in the charter party requiring the charterer, CARCO, to designate a safe berth at which the vessel may load and discharge cargo. This provision, a standard feature of many charter parties, is customarily known as a safe-berth clause. The safe-berth clause here provides, as relevant, that “the vessel shall load and discharge at any safe place or wharf, . . . which shall be designated and procured by the Charterer, provided the Vessel can proceed thereto, lie at, and depart therefrom always safely afloat, any lighterage being at the expense, risk and peril of the Charterer.”

The charter party separately requires CARCO to direct the Athos I to a “safe port” along the Atlantic seaboard of the United States.

The parties agree that the safe-berth clause also encompasses what is often referred to as a “safe-port clause.” The safe-port clause here provides that “the vessel . . . shall, with all convenient dispatch, proceed as ordered to Loading Port(s) named . . . , or so near thereunto as she may safely get (always afloat), . . . and being so loaded shall forthwith proceed, . . . direct to the Discharging Ports, or so near thereunto as she may safely get (always afloat), and deliver said cargo.” Addendum to Brief for Petitioners 4a. The parties do not dispute that the two clauses should be read in conjunction

Pursuant to the charter party, CARCO designated as the berth of discharge its asphalt refinery in Paulsboro, New Jersey, on the shore of the Delaware River. In November 2004, the Athos I set out on a 1,900-mile journey from Puerto Miranda, Venezuela, to Paulsboro, New Jersey, carrying a load of heavy crude oil. The vessel was in the final 900-foot stretch of its journey when an abandoned ship anchor in the Delaware River pierced two holes in the vessel’s hull. Much of the Athos I’s freight drained into the river.

(…) As owner of the Athos I, Frescati was deemed a “responsible party” for the oil spill under OPA. Frescati worked with the U. S. Coast Guard in cleanup efforts and covered the costs of the cleanup.

(…) As relevant here, both Frescati and the United States claimed that CARCO had breached the safe-berth clause by failing to designate a safe berth, and thus was at fault for the spill.

(…) We granted certiorari, 587 U. S. ___ (2019), to resolve whether the safe-berth clause at issue here merely imposes a duty of diligence, as the Fifth Circuit has held in a similar case, or establishes a warranty of safety, as the Second Circuit has held in other analogous cases.

(…) Because we find it plain from the language of the safe-berth clause that CARCO warranted the safety of the berth it designated, we affirm the judgment of the Third Circuit.

Maritime contracts “must be construed like any other contracts: by their terms and consistent with the intent of the parties.” Norfolk Southern R. Co. v. James N. Kirby, Pty Ltd., 543 U. S. 14, 31 (2004); see also 2 T. Schoenbaum, Admiralty & Maritime Law §11:2, p. 7 (6th ed. 2018) (“Federal maritime law includes general principles of contract law”). “‘Where the words of a contract in writing are clear and unambiguous, its meaning is to be ascertained in accordance with its plainly expressed intent.’” M&G Polymers USA, LLC v. Tackett, 574 U. S. 427, 435 (2015) (quoting 11 R. Lord, Williston on Contracts §30:6, p. 108 (4th ed.2012) (Williston)). In such circumstances, the parties’ intent “can be determined from the face of the agreement” and “the language that they used to memorialize that agreement.” 11 Williston §30:6, at 97–98, 112–113. But “when a written contract is ambiguous, its meaning is a question of fact, requiring a determination of the intent of the parties in entering the contract”; that may involve examining “relevant extrinsic evidence of the parties’ intent and the meaning of the words that they used.” Id., §30:7, at 116–119, 124.

Our analysis starts and ends with the language of the safe-berth clause. That clause provides, as relevant, that the charterer “shall . . . designate and procure” a “safe place or wharf,” “provided [that] the Vessel can proceed thereto, lie at, and depart therefrom always safely afloat.” Addendum to Brief for Petitioners 8a. As even CARCO acknowledges, the clause plainly imposes on the charterer at least some “duty to select a ‘safe’ berth.” Brief for Petitioners 21. Given the unqualified language of the safe-berth clause, it is similarly plain that this acknowledged duty is absolute. The clause requires the charterer to designate a “safe” berth: That means a berth “free from harm or risk.” Webster’s Collegiate Dictionary 1030 (10th ed. 1994); see also New Oxford American Dictionary 1500 (E. Jewell & F. Abate eds. 2001) (“safe” means “protected from or not exposed to danger or risk”). And the berth must allow the vessel to come and go “always” safely afloat: That means afloat “at all times” and “in any event.” Webster’s Collegiate Dictionary, at 35; see also New Oxford American Dictionary, at 47 (“always” means “at all times; on all occasions”). Selecting a berth that does not satisfy those conditions constitutes a breach. The safe-berth clause, in other words, binds the charterer to a warranty of safety.

No matter that the safe-berth clause does not expressly invoke the term “warranty.” It is well settled as a matter of maritime contracts that “statements of fact contained in a charter party agreement relating to some material matter are called warranties,” regardless of the label ascribed in the charter party. 22 Williston §58.11, at 40–41 (2017); see also Davison v. Von Lingen, 113 U. S. 40, 49–50 (1885) (a stipulation going to “substantive” and “material” parts of a charter party forms “a warranty”); Behn v. Burness, 3 B. & S. 751, 122 Eng. Rep. 281 (K. B. 1863) (“With respect to statements in a [charter party] descriptive of . . . some material incident . . . , if the descriptive statement was intended to be a substantive part of the [charter party], it is to be regarded as a warranty”). What matters, then, is that the safe-berth clause contains a statement of material fact regarding the condition of the berth selected by the charterer.

(…) As a general rule, due diligence and fault-based concepts of tort liability have no place in the contract analysis required here. Under elemental precepts of contract law, an obligor is “liable in damages for breach of contract even if he is without fault.” Restatement (Second) of Contracts, p. 309 (1979) (Restatement (Second)). To put that default contract-law principle in tort-law terms, “Contract liability is strict liability.” Ibid. (emphasis added); see also 23 Williston §63:8, at 499 (2018) (“Liability for a breach of contract is, prima facie, strict liability”). What CARCO thus protests is the straightforward application of contract liability to a breach of contract.

Although contract law generally does not, by its own force, limit liability based on tort concepts of fault, parties are of course free to contract for such limitations. See Restatement (Second), at 309 (obligor who wishes to avoid strict liability for breach may “limit his obligation by agreement”). Here, however, the safe-berth clause is clear that the parties contracted for no such thing.

(…) It also bears mention that many other industry form charter par-ties—not selected by CARCO and Star Tankers—explicitly limit the liability that may flow from a charterer’s selection of a berth. See, e.g., 2E J. Force & L. Lambert, Benedict on Admiralty, ch. XXVII, §27–567 (rev. 7th ed. 2019) (INTERTANKVOY form specifies that “charterers shall exercise due diligence to ascertain that any places to which they order the vessel are safe for the vessel and that she will lie there always afloat”).

(…) The parties also dispute whether the prevailing industry usage of safe-berth clauses supports reading the safe-berth clause here as a warranty or as a promise of due diligence. Because the express language of the safe-berth clause is susceptible to only one meaning, we need not address these arguments.

Secondary sources: T. Schoenbaum, Admiralty & Maritime Law §11:2, p. 7 (6th ed. 2018); J. Force & L. Lambert, Benedict on Admiralty, ch. XXVII, §27–567 (rev. 7th ed. 2019)

(U.S. Supreme Court, March 30, 2020, CITGO Asphalt Refining Co. v. Frescati Shipping Co., Docket No. 18-565, J. Sotomayor)

Supreme Court of Kentucky, Paul Mostert v. The Mostert Group, LLC, Docket No. 2017-SC-000600-DG

Source Code
Software
Contract Interpretation
Source Code not Included in the Term Software
Contract Drafting
Internet Law
Kentucky Law

Security Agreement
Security Interest
Collateral
Fiduciary Duty (No Fiduciary Duty is Owed Here)


(…) Despite these documents, Mostert and TMG disagreed as to which property constituted the collateral under the Security Agreement and the relationship between the parties deteriorated. More specifically, TMG claimed entitlement to immediate possession of the source code under the Contribution Agreement while Mostert claimed that he had a security interest in the source code which the Security Agreement allowed him to perfect by possession.


The primary issue in this case turns on construction of the Contribution Agreement and the Security Agreement, both executed by the parties on October 31, 2003. Mostert argues that the “software,” identified as collateral in the Security Agreement includes the source code, and therefore the Security Agreement allowed him to retain possession of the source code until the Note was paid in full. TMG counters that the source code was not included as collateral under the Security Agreement, and that Mostert breached the Contribution Agreement by failing to deliver the source code immediately upon execution of that agreement and receipt of his TMG stock. Before turning to the language of the relevant agreements, we acknowledge the general principles of contract construction which guide disposition of this matter.


(…) As this Court has stated, “the fact that one party may have intended different results . . . is insufficient to construe a contract at variance with its plain and unambiguous terms.” Abney v. Nationwide Mut. Ins. Co., 215 S.W. 3d 699, 703 (Ky. 2006).


(…) We turn to the documents executed by Mostert and TMG. Two contracts, the Contribution Agreement and the Security Agreement, reflect the parties’ agreement with respect to entitlement to and possession of the source code at the center of their dispute.

The Contribution Agreement provides for the transfer of assets from Mostert to TMG in exchange for the agreed-upon compensation. That agreement begins with the following “Recitals”:

Whereas, [Mostert] has created certain computer software and other technology and intellectual property for the analysis of horses for racing and breeding purposes, including but not limited to the EquiTrax Technology, a technology for capture and analysis of digital streaming images of racehorses in full gallop, and [Mostert] has been using all of such property in the operation of a business under the assumed names of “The Mostert Group” and “Equimost” (the “Business”);

Whereas, [Mostert] now desires to operate the Business through a Kentucky limited liability company and has formed [TMG] for that purpose; and

Whereas, [Mostert], who collectively owns 100% of the Business, desires to contribute to [TMG] any and all right, title and interest that it may have in any Assets (as defined herein), including without limitation all assets of [Mostert] used or intended to be used in the Business, in exchange for 200 Units in [TMG] and a Promissory Note from [TMG] in the form attached hereto as Exhibit A (the “Note”), all on the terms and subject to the conditions contained herein.

In the “Agreement” section, paragraph 2, the Contribution Agreement states:

Effective as of the date hereof, [Mostert] hereby contributes, transfers, assigns, conveys and delivers to [TMG] all of such [Mostert’s] right, title and interest in and to all of the assets, properties and rights primarily used or employed, or intended by [Mostert] to be primarily used or employed, in connection with the Business (the “Assets”), consisting of those assets listed on Schedule 2A attached hereto.

The referenced Schedule 2A, entitled “Partial List of Contributed Assets,” identifies in paragraph 2.1 the following assets to be transferred and delivered by Mostert to TMG : “all of [Mostert’s] ownership or leasehold rights, as the case may be, in computer and telecommunication equipment, software programs, source codes, object codes, information systems . . . ,” etc. (emphasis added). In paragraph 3 of Schedule 2A, additional assets to be transferred and delivered are identified including “any and all rights of [Mostert] to the following software and other property, and any corresponding patents, trademarks and copyrights: a) Equitrax System . . . .” Thus, pursuant to the aforequoted paragraph 2 of the Contribution Agreement, Mostert agreed to “contribute, transfer, assign, convey and deliver” the identified assets to TMG, effective as of October 31, 2003, the execution date of the Contribution Agreement.

The $500,000 Note issued by TMG to Mostert that same date was secured “as described in that certain Security Agreement of even date herewith by and between the Payee [Mostert] and the Maker [TMG].” The Security Agreement grants Mostert a security interest in specified collateral. It states in relevant part:

This Security Agreement is made as collateral security for the payment and performance of all the following obligations:

$500,000.00 Term Promissory Note. [TMG’s] payment of that certain Term Promissory Note payable to [Mostert] dated effective as of the date hereof in the original principal amount of $500,000.00 (the “Note”) . . . .

The Security Agreement identifies the covered collateral on Schedules A and B. As relevant to the parties’ dispute, Schedule B, lists “any and all rights of [Mostert] to the following ‘Software,’ and any corresponding patents, trademarks and copyrights . . . . ” (emphasis added). Schedule B, a one and one-half page single-spaced document, then continues with a list of the specific “Software,” which includes the EquiTrax System, Palm Profit, Compute 2000 and other named software. Finally, pertinent to our review, Paragraph 4(b)(i) of the Security Agreement provides:

TMG shall have possession of the Collateral, except where expressly otherwise provided in this Security Agreement or where [Mostert] chooses to perfect its security interest by possession.


Faced with two contracts executed by the parties simultaneously, we look to the language employed in those contracts.


The Contribution Agreement, lists “software programs” and “source codes” (followed in the next paragraph by a reference to “software” and a listing of specific programs) as distinct properties that Mostert was obligated to contribute to TMG. By contrast, the Security Agreement only identifies certain named “software” as collateral securing TMG’s performance pursuant to the Note; no mention is made of “source code.” Much of Mostert’s argument centers on his assertion that it is generally understood that “source code” is encompassed within the broader term “software,” and therefore, any reference to “software” in the Security Agreement would necessarily include the source code. In short, he maintains that the term “software” always includes the source code, so it follows that he retained a right to possess the source code to perfect his security interest. In support of this argument, Mostert references dictionary definitions of “software,” the Code of Federal Regulations and federal caselaw. Resort to secondary sources, however, is not appropriate if we can interpret the parties’ intent from the language they employed. North Fork Collieries, 322 S.W.3d at 105; Ky. Shakespeare Festival, 490 S.W.3d at 694. Resolution of this case hinges on interpretation of the language used in the Contribution Agreement and the accompanying Security Agreement, making external definitions offered by Mostert immaterial.


Here, the parties specifically listed source code, object code and software as distinct items in the Contribution Agreement. Schedule 2A paragraph 2.1, as discussed above, specifically states that assets contributed by Mostert to TMG include “all of [Mostert’s] ownership or leasehold rights, as the case may be, in computer and telecommunications equipment, software programs, source codes, object codes, information systems,” etc. (emphasis added). In the subsequent full paragraph, paragraph 3, additional assets to be contributed are listed and they include “any and all rights of [Mostert] to the following software and other property, and any corresponding patents, trademarks and copyrights: a) EquiTrax System . . .” (emphasis added). A plain reading of the documents thus reveals that the parties recognized and intended a difference between the broader term “software” and the more specific “source code.” Applying this reasoning to the Security Agreement leads to the conclusion that Mostert did not have a security interest in the source code and thus was not entitled to possess it, i.e., he had no right to perfect a security interest in property not covered by the Security Agreement. This conclusion is premised on the simple fact that the source code carefully delineated in the Contribution Agreement is not mentioned in the Security Agreement. To read the broader term “software” to encompass the source code would require us to ignore how the parties themselves used terms in the documents they executed.


Moreover, it is clear that the parties never intended the Security Agreement to mirror the Contribution Agreement such that Mostert retained a security interest in every single item he was obligated to contribute, transfer, assign, convey and deliver. The Security Agreement identifies the following software as collateral: EquiTrax, PalmProphet, Compute2000, Old Landscape, New Landscape, MareMatch, NetMatch, StalMatch, the Mostert Business System, and various databases. By contrast, Schedule 2A of the Contribution Agreement lists the contributed assets as including “software programs, source codes, object codes . . .” and in a separate paragraph further down lists “the following software,” which includes all the software listed above, as well as other property. Thus, several additional assets beyond the source code at the center of this litigation are listed in the Contribution Agreement but omitted from the list of collateral in the Security Agreement. This demonstrates that the parties did not intend for the Security Agreement to mirror the Contribution Agreement or, stated differently, TMG did not grant Mostert a security interest in all of the items he was obligated to transfer under the Contribution Agreement, the source code being but one example.


Based on the plain language of both agreements, Mostert agreed to transfer the source code, and by refusing to relinquish possession he breached the Contribution Agreement. Another “fundamental principle in the law of contracts” is that “before one may obtain the benefits the contract confers upon him, he himself must perform the obligation which is imposed upon him.” West Ky. Coal Co. v. Nourse, 320 S.W.2d 311, 314 (Ky. 1959).


In Dalton, 293 S.W.2d at 476, the court noted that when one party refused to perform under a written contract, the other party “had the right to treat this action as a breach, to abandon the contract, and to depart from further performance on his own part and finally demand damages.” That is exactly the procedure TMG employed.


(…) No fiduciary duty is owed by either party to the other in this case but the parties did have contractual obligations as discussed.


(…) We note that both parties raise issues regarding the classification of “software” under Article 9 of Kentucky’s Uniform Commercial Code and whether possession is a valid method of perfection. Given our resolution of this case, we do not reach that issue.



(Supreme Court of Kentucky, March 26, 2020, Paul Mostert v. The Mostert Group, LLC, Docket No. 2017-SC-000600-DG, to be Published)

Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019

Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19)

Republication – SBA Website, March 14, 2020

https://www.sba.gov/page/guidance-businesses-employers-plan-respond-coronavirus-disease-2019-covid-19?utm_medium=email&utm_source=govdelivery

Health and government officials are working together to maintain the safety, security, and health of the American people. Small businesses are encouraged to do their part to keep their employees, customers, and themselves healthy.

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Content

·       Economic Injury Disaster Loan Program

·       Guidance for Businesses and Employers

·       SBA Products and Resources

·       Government Contracting

·       Local Assistance

Exporting Assistance

SBA provides export loans to help small businesses achieve sales through exports and can help these businesses respond to opportunities and challenges associated with trade, such as COVID-19. The loans are available to U.S. small businesses that export directly overseas, or those that export indirectly by selling to a customer that then exports their products.

o   Export Express loan program allows access to capital quickly for businesses that need financing up to $500,000. Businesses can apply for a line of credit or term note prior to finalizing an export sale or while pursuing opportunities overseas, such as identifying a new overseas customer should an export sale be lost due to COVID-19.

o   Export Working Capital program enables small businesses to fulfill export orders and finance international sales by providing revolving lines of credit or transaction-based financing of up to $5 million. Businesses could use a loan to obtain or retain overseas customers by offering attractive payment terms.

o   International Trade loan program helps small businesses engaged in international trade to retool or expand to better compete and react to changing business conditions. It can also help exporting firms to expand their sales to new markets or to re-shore operations back to the U.S.

U.S. Court of Appeals for the Federal Circuit, Personalized Media Communications, LLC v. Apple, Inc., Docket No. 18-1936

Patent Interpretation

Claim Construction

Intrinsic Evidence:

-       Claims

-       Specifications

-       Prosecution History of the Patent

-       Understanding of One Skilled in the Art

Broadest Reasonable Interpretation

Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2016-00755.

Per recent regulation, the Board applies the Phillips claim construction standard to IPR petitions filed on or after November 13, 2018. See Changes to the Claim Construction Standard for Interpreting Claims in Trial Proceedings Before the Patent Trial and Appeal Board, 83 Fed. Reg. 51,340 (Oct. 11, 2018) (codified at 37 C.F.R. § 42.100(b)).

Because Apple filed its IPR petition before November 13, 2018, we apply the broadest reasonable interpretation standard.

The task of claim construction requires us to examine all the relevant sources of meaning in the patent record with great care, the better to guarantee that we determine the claim’s true meaning. Athletic Alts., 73 F.3d at 1578. “When construing claim terms, we first look to, and primarily rely on, the intrinsic evidence, including the claims themselves, the specification, and the prosecution history of the patent, which is usually dispositive.” Sunovion Pharm., Inc. v. Teva Pharm. USA, Inc., 731 F.3d 1271, 1276 (Fed. Cir. 2013) (first citing Phillips v. AWH Corp., 415 F.3d 1303, 1315 (Fed. Cir. 2005) (en banc); then citing Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996)). We consider these various sources of meaning “because the meaning of a claim term as understood by persons of skill in the art is often not immediately apparent, and because patentees frequently use terms idiosyncratically.” Phillips, 415 F.3d at 1314.

The prosecution history, in particular, “may be critical in interpreting disputed claim terms because it ‘contains the complete record of all the proceedings before the Patent and Trademark Office, including any express representations made by the applicant regarding the scope of the claims.’” Sunovion, 731 F.3d at 1276 (quoting Vitronics, 90 F.3d at 1582). Accordingly, even where “prosecution history statements do not rise to the level of unmistakable disavowal, they do inform the claim construction.” Shire Dev., LLC v. Watson Pharm., Inc., 787 F.3d 1359, 1366 (Fed. Cir. 2015). For example, an applicant’s repeated and consistent remarks during prosecution can define a claim term by demonstrating how the inventor understood the invention. Sunovion, 731 F.3d at 1277. Similarly, an applicant’s amendment accompanied by explanatory remarks can define a claim term by demonstrating what the applicant meant by the amendment. Tempo Lighting, Inc. v. Tivoli, LLC, 742 F.3d 973, 977–78 (Fed. Cir. 2014).

The broadest reasonable interpretation standard applies in this IPR proceeding. Thus, the Board’s interpretation must be reasonable in light of the specification, prosecution history, and the understanding of one skilled in the art. See Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1298 (Fed. Cir. 2015), overruled on other grounds by Aqua Prods., Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en banc). The broadest reasonable interpretation must also take into account “the context of the entire patent.” Realtime Data, LLC v. Iancu, 912 F.3d 1368, 1374 (Fed. Cir. 2019) (quoting Phillips, 415 F.3d at 1312–13); see also In re Translogic Tech., Inc., 504 F.3d 1249, 1256–58 (Fed. Cir. 2007) (applying Phillips “best practices” to claim construction under broadest reasonable interpretation standard).

(…) Embodiments described in a specification can certainly inform the meaning of a disputed claim term, but “a particular embodiment appearing in the written description may not be read into a claim when the claim language is broader than the embodiment.” Resonate Inc. v. Alteon Websystems, Inc., 338 F.3d 1360, 1364–65 (Fed. Cir. 2003) (citing Electro Med. Sys., S.A. v. Cooper Life Scis., Inc., 34 F.3d 1048 (Fed. Cir. 1994)). So too if the claim language is narrower than the embodiment.

(…) Again, even where “prosecution history statements do not rise to the level of unmistakable disavowal, they do inform the claim construction.” Shire, 787 F.3d at 1366. An applicant’s repeated and consistent remarks during prosecution can define a claim term—especially where, as here, there is “no plain or ordinary meaning to the claim term” and the specification provides no clear interpretation. Sunovion, 731 F.3d at 1276–77. Similarly, an applicant’s amendment accompanied by explanatory remarks can define a claim term where, as here, the claim language and specification fail to provide meaningful guidance. Tempo Lighting, 742 F.3d at 977–78. Thus, the Board erred by effectively requiring the prosecution history evidence to rise to the level of a disclaimer in order to inform the meaning of the disputed claim term. Assuming without deciding that PMC’s statements and amendments were inadequate to give rise to a disclaimer, we still find that the prosecution history provides persuasive evidence that informs the meaning of the disputed claim phrase and addresses an ambiguity otherwise left unresolved by the claims and specification.

(…) Accordingly, we conclude that the applicant’s repeated and consistent statements during prosecution, along with its amendment to the same effect, are decisive as to the meaning of the disputed claim term.

((…) More than 280 columns of text in the specification of the ’091 patent).

(U.S. Court of Appeals for the Federal Circuit, March 13, 2020, Personalized Media Communications, LLC v. Apple, Inc., Docket No. 18-1936)

U.S. Court of Appeals for the Federal Circuit, Communications Test Design, Inc. v. Contec, LLC, Docket No. 2019-1672

Declaratory Judgment Action (v. Complaint for Patent Infringement)

Declaratory Judgment Act

First-to-File Rule

Anticipatory filing was made in bad faith during active licensing discussions

Equitable considerations warranted departure from the first-to-file rule

Federal Comity

Forum Non Conveniens

Communications Test Design, Inc. (“CTDI”) filed suit in the United States District Court for the Eastern District of Pennsylvania, seeking declaratory judgment that its test systems do not infringe two of Contec, LLC’s patents (“the Pennsylvania action”). Six days later, Contec sued CTDI for patent infringement in the United States District Court for the Northern District of New York (“the New York action”). Contec moved to dismiss the Pennsylvania action, arguing that CTDI’s anticipatory filing was made in bad faith during active licensing discussions. The district court granted the motion, exercising its discretion to decline jurisdiction over CTDI’s declaratory judgment action. Commc’ns Test Design, Inc. v. Contec LLC, 367 F. Supp. 3d 350, 360 (E.D. Pa. 2019). In doing so, the court found that equitable considerations warranted departure from the first-to-file rule. CTDI appeals the district court’s dismissal of the Pennsylvania action. Because we conclude that the district court did not abuse the broad discretion accorded to it—both under the Declaratory Judgment Act, 28 U.S.C. § 2201(a) and pursuant to the first-to-file rule—we affirm.

(…) In September 2017, Contec sent a letter to CTDI to determine whether CTDI’s test systems infringed any claims of the asserted patents. Over the course of the following year, the parties exchanged numerous emails and letters. In June 2018, counsel for both parties met in person, and CTDI disclosed certain information about its test systems pursuant to a confidentiality agreement.

In September 2018, Contec’s counsel sent a letter to CTDI stating that “the parties’ extrajudicial process for obtaining information about CTDI’s systems, without the full discovery obligations that would be imposed during litigation, has proved unsatisfactory.” Counsel explained that Contec had a good faith basis to believe that CTDI infringes at least one claim of the asserted patents. The letter asked CTDI to indicate, by September 19, 2018, whether it was willing to “discuss potential terms for a patent license agreement.” Contec warned that, if it did not receive such confirmation, it would sue for patent infringement. Contec attached to its letter a draft of its proposed complaint.

On September 19—Contec’s stated deadline—Jerry Parsons, CTDI’s Chairman and chief executive officer (CEO), spoke on the phone with Hari Pillai, Contec’s CEO, about a possible license for Contec’s patents. During that conversation, Pillai proposed initial terms, and the executives agreed to talk again on September 24, when Parsons would make a counterproposal. After their discussion, Pillai emailed Parsons, confirming the follow-up call and indicating that he looked forward to the counterproposal.

Later that same day, CTDI’s counsel sent an email to Contec’s counsel, confirming that “CTDI will consider potential terms as requested in your most recent letter.” Counsel reiterated that, “despite our firm position on non- infringement and without admission, in an attempt to avoid an impasse, we remain willing to consider reasonable licensing terms and so, we encourage a continued conversation between the executives.”

On September 21—two days after accepting Contec’s request to discuss licensing terms—CTDI filed a declaratory judgment action in Pennsylvania. Later that afternoon, Parsons sent an email to Pillai, confirming that CTDI would put a licensing proposal together and accepting Pillai’s suggested time for their follow-up call on September 24. Parsons made no mention of the fact that CTDI had filed its declaratory judgment complaint.

On September 24—the day the CEOs were scheduled to talk—CTDI’s counsel emailed Contec’s counsel a copy of the declaratory judgment complaint. Counsel stated that official service would be held for a period of time to allow further discussion between the executives.

CTDI ultimately served its declaratory judgment complaint on October 15, 2018.

On September 27, 2018, Contec filed its complaint for patent infringement in the Northern District of New York.

On February 15, 2019, the district court granted Contec’s motion and dismissed CTDI’s complaint. At the outset, the court noted that “neither party disputes that an actual controversy exists here.” Commc’ns Test Design, 367 F. Supp. 3d at 355. Both the Pennsylvania and New York actions involve the same parties, the same patents, the same allegedly infringing products, and the same issue: whether CTDI’s test systems infringe Contec’s patents. The court recognized that, between CTDI’s first-filed declaratory judgment action and Contec’s subsequently filed patent infringement action, CTDI’s first-filed action is preferred “unless considerations of judicial and litigant economy, and the just and effective disposition of disputes, require otherwise.” Id. at 356 (quoting Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 937 (Fed. Cir. 1993), abrogated on other grounds by Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995)).

Recognizing that the anticipatory nature of CTDI’s suit is “merely one factor in the analysis” under the first-to-file rule, the district court explained that “interference with ongoing negotiations constitutes another ‘sound reason that would make it unjust’ to exercise jurisdiction over the declaratory judgment action.” The court also considered the convenience of the parties and availability of witnesses and determined that, “on balance the Northern District of New York is a more convenient forum to resolve the dispute between the parties.” Given these considerations, the district court dismissed the Pennsylvania action in favor of Contec’s later- filed infringement action.

(…) The district court dismissed CTDI’s declaratory judgment action so that Contec’s patent infringement action— filed six days later—could proceed in New York. In these circumstances, where the issue is whether a suit for declaration of patent rights should yield to a later-filed infringement suit, the trial court’s discretion is guided by the first- to-file rule, “whereby the forum of the first-filed case is favored.” Genentech, 998 F.2d at 937. “The ‘first-to-file’ rule is a doctrine of federal comity, intended to avoid conflicting decisions and promote judicial efficiency, that generally favors pursuing only the first-filed action when multiple lawsuits involving the same claims are filed in different jurisdictions.” Merial Ltd. v. Cipla Ltd., 681 F.3d 1283, 1299 (Fed. Cir. 2012) (citing Genentech, 998 F.2d at 937– 38). The filing date of an action derives from the filing of the complaint. Id. (citing Fed. R. Civ. P. 3). Under the first-to-file rule, a district court may choose to stay, transfer, or dismiss a later-filed duplicative action. Id.

(…) Here, the district court carefully considered the record of the parties’ dispute, up to and including the competing filings, and concluded that several factors warranted departure from the first-to-file rule. Specifically, the court found that: (1) CTDI filed its declaratory judgment complaint in anticipation of Contec’s patent infringement complaint; (2) CTDI’s suit interfered with ongoing negotiations between the parties and did not serve the objectives of the Declaratory Judgment Act; and (3) on balance, the Northern District of New York is a more convenient forum. As explained below, we find no abuse of discretion in the district court’s analysis.

(…) As to Contec, the district court considered that: (1) its corporate headquarters are in New York; (2) it has no witnesses, physical facilities or place of business in Pennsylvania; (3) Contec’s employee files for its current and former employees, its email server and its record databases are maintained in its New York facility; (4) three of the six inventors of the patents at issue are current residents of New York; and (5) five of the inventors, “who would serve as key witnesses,” are beyond the subpoena power of the district court. On balance, the court found that these factors favored Contec’s later-filed New York action.

(…) We find no error in the district court’s balancing of the convenience factors, which is committed to the court’s sound discretion. These factors, coupled with the district court’s findings that CTDI’s complaint interfered with ongoing negotiations and was filed in anticipation of Contec’s infringement suit, support the district court’s decision to depart from the first-to-file rule and dismiss CTDI’s complaint.

(U.S. Court of Appeals for the Federal Circuit, March 13, 2020, Communications Test Design, Inc. v. Contec, LLC, Docket No. 2019-1672, Circuit Judge O’Malley)

U.S. Court of Appeals for the Fourth Circuit, SAS Institute, Inc. v. World Programming Ltd., Docket No. 19-1290, Published

 Judgment (attack abroad on a US judgment)

Injunctions

Remedies

All Writs Act

Comity

Equity

Preclusive Effect

License Agreement

Breach (Reverse Engineering)

 

WPL turned to the English courts and engaged in a two-pronged attack on the U.S. judgment

 

 

In this appeal, we affirm the district court’s grant of two complementary injunctions issued pursuant to its All Writs Act authority. While we take the occasion to express our respect for the judicial system and judges of the United Kingdom, the district court here needed to ensure that a money judgment reached in an American court under American law—based on damages incurred in America—was not rendered meaningless. The court chose to enforce its judgment in the most measured terms, concentrating on the litigants’ U.S. conduct and collection efforts. Failing to take even these modest steps would have encouraged any foreign company and country to undermine the finality of a U.S. judgment.

 

World Programming Limited (WPL), a U.K. company, and SAS Institute, a U.S. company, are software developers that compete in the market for statistical analysis software.

 

When WPL installed the SAS software, it had clicked “Yes” to indicate it would comply with SAS’s license agreement prohibiting “reverse engineering” and allowing only “non-production” use of the software.

 

(…) Soon after SAS initiated the U.K. enforcement proceedings, it brought additional enforcement proceedings in the Central District of California. The California district court granted an order “providing for direct assignment to SAS of rights to payment from specified WPL customers located anywhere in the world, except in the United Kingdom, until [the U.S.] judgment is satisfied,” (the “assignment order”). SAS Inst., Inc. v. World Programming Ltd., No. 5:10-CV-25-FL, 2019 WL 1447472, at *2 (E.D.N.C. Mar. 18, 2019) [hereinafter SAS-2019]; see also J.A. 3135. WPL appealed the assignment order to the Ninth Circuit.

 

(…) We agreed that the U.K. litigation did not have a preclusive effect, given the “many legal and factual differences between the U.K. litigation and the present [U.S.] suit.” SAS-2017, 874 F.3d at 378-79.

 

(…) The U.K. court declined to enforce any portion of the U.S. judgment. Further, the court ordered that WPL could recover two-thirds of any amount it paid towards the U.S. judgment, corresponding to the non-compensatory portion of damages (the “U.K. clawback order”). Clawback could occur even though SAS had “not yet recovered more than the compensatory damages awarded.” J.A. 1030.

 

The week after the U.K. court issued its judgment, it entered an anti-suit injunction requiring SAS to take certain actions in the United States but forbidding others (the “U.K. injunction”). For instance, the U.K. court ordered SAS to “take all reasonable steps” to prevent entry of the turnover order in California. J.A. 1035. It forbade SAS from seeking— in the United States—an anti-anti-suit injunction or similar relief designed to protect the U.S. judgment and the California collection proceedings. The injunction threatened criminal sanctions if SAS disobeyed.

 

SAS stayed its motion to the Ninth Circuit to comply with the U.K. injunction.

 

(…) This court previously declined to issue an injunction impacting WPL’s United States licensing, based on an expectation that WPL would devote some portion of its revenues to satisfaction of the U.S. judgment. SAS-2017, 874 F.3d at 386-88. In a way, we cut WPL a break; the absence of an injunction was intended to help WPL earn additional revenues from U.S. operations that it could use towards the judgment. Things did not go as planned. Since the case was last before this court, WPL has tried to evade, in every way and at every turn, using any revenues for satisfaction of the U.S. judgment. This left the district court with limited options—but options it needed to exercise in order to prevent its judgment from being rendered completely hollow.

 

Despite a complicated procedural history stemming from years of litigation, the case before us is straightforward. WPL, a foreign company doing business in the United States, has attempted to evade a U.S. judgment. Instead of making a good-faith effort to pay up, WPL has repeatedly engaged in collateral attacks on the district court’s judgment by calling upon the U.K. court system. So far, its tactics have been successful. To date, WPL has only paid a small fraction of the judgment, and it is attempting to undo even that much. The district court could not allow WPL’s evasion to continue. One need look no further than the extensiveness of WPL’s attack on the U.S. judgment to see why the court’s two injunctions were necessary.

 

Although founded in the U.K., WPL is a company “doing business in America” subject to “American law in American courts.” Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909, 940 (D.C. Cir. 1984). WPL violated North Carolina law by using SAS software to create a competing product in breach of a license agreement. A jury in North Carolina set compensatory damages at $26.4 million, based solely on harm SAS incurred from lost U.S. customers and revenues. Under North Carolina law, these compensatory damages were trebled to total damages of $79.1 million.

 

After obtaining the U.S. judgment, SAS set about to collect on it—as it had every right to do. SAS commenced an enforcement action in the Central District of California and received the assignment order assigning to SAS “WPL’s right to payments from” specified non-U.K. customers “until such a time as the North Carolina judgment in the amount of $79,129,905.00 is fully satisfied.” J.A. 3135; see also SAS-2019, 2019 WL 1447472, at *2.

 

Unhappy with the pace of collections and possessing evidence to suggest that WPL instructed customers to disregard the assignment order, SAS moved for entry of the turnover order obligating WPL to deliver to SAS “all income received from customers located worldwide, except in the United Kingdom.” SAS-2019, 2019 WL 1447472, at *3. Rather than challenge SAS’s efforts in the Ninth Circuit, WPL turned to the English courts and engaged in a two-pronged attack on the U.S. judgment.

 

First, WPL attacked the U.S. judgment by requesting to claw back two-thirds of SAS’s collections—corresponding to the non-compensatory portion of damages. A U.K. court granted this relief under the PTIA, even though WPL had “not yet paid sums exceeding the value of the compensatory part of the [U.S.] judgment.” J.A. 1026-30; see also SAS-2019, 2019 WL 1447472, at *4. By seeking and receiving the U.K. clawback order, WPL fundamentally altered the U.S. judgment. Practically speaking, WPL relitigated the U.S. damage amount, lowering it by two-thirds.

 

Second, WPL sought relief designed to interfere with the California collection proceedings. Its efforts were successful. A U.K. court granted an injunction preventing SAS from pursuing normal collection efforts “in this country, the country of origin of the judgment at issue.” SAS-2019, 2019 WL 1447472, at *11. The U.K. injunction forbade SAS from pursuing entry of the turnover order. It explicitly directed SAS not to file a brief with the Ninth Circuit due that very day. It limited SAS’s ability to enforce aspects of the assignment order that WPL did not challenge. It broadly prohibited SAS from seeking an anti-anti-suit injunction or similar relief related to either the California or North Carolina proceedings. Finally, the U.K. injunction warned of criminal sanctions if SAS did not comply, a serious threat since SAS has around 637 employees in the U.K., J.A. 2715, and “none of those employees wants to go to jail,” J.A. 1257.

 

(…) The combined impact of WPL’s actions was particularly destructive. The U.K. injunction undermined SAS’s ability to enforce the U.S. judgment, while the U.K. clawback order attempted to undo SAS’s limited collection success.

 

(…) An immediate response was required, so the district court turned to the anti-clawback injunction and the U.S. expansion injunction.

 

The anti-clawback injunction provides that “no sum previously collected or to be collected by [SAS] in the United States is subject to payment to [WPL] on the basis of the [PTIA].” J.A. 1185.

 

(…) There is an irony here. Rather than the district court’s anti-clawback injunction being an affront to comity, actions by WPL have shown a lack of respect for American courts and American law. “The conflict . . . we confront today has been precipitated by the attempts of another country to insulate its own business entities from the necessity of complying with legislation of our country designed to protect this country’s domestic policies.” Laker Airways, 731 F.2d at 955. Comity is not advanced when a foreign country condones an action brought solely to interfere with a final U.S. judgment.

 

In contrast, the district court showed great respect for comity, limiting the impact of its anti-clawback injunction to sums collected in the U.S.—“monies without any nexus to any enforcement proceeding in the United Kingdom.” SAS-2019, 2019 WL 1447472, at *9. Comity does not advise against such measured relief.

 

(…) “The essence of equity jurisdiction has been the power of the Chancellor . . . to mould each decree to the necessities of the particular case.” Hecht Co. v. Bowles, 321 U.S. 321, 329 (1944).

 

 

(U.S. Court of Appeals for the Fourth Circuit, March 12, 2020, SAS Institute, Inc. v. World Programming Ltd., Docket No. 19-1290, Published)