Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`
`ESTTA Tracking number:
`
`ESTTA818384
`
`Filing date:
`
`05/03/2017
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Proceeding
`
`92061696
`
`Party
`
`Correspondence
`Address
`
`Submission
`
`Filer's Name
`
`Filer's e-mail
`
`Plaintiff
`Energy Heating LLC
`
`MATTHEW E MOERSFELDER
`DAVIS WRIGHT TREMAINE LLP
`1201 THIRD AVE, SUITE 2200
`SEATTLE, WA 98101
`UNITED STATES
`seatm@dwt.com, mmoersfelder@dwt.com, ronrutherford@dwt.com
`
`Other Motions/Papers
`
`Matthew E. Moersfelder
`
`mmoersfelder@dwt.com, rossboundy@dwt.com, ronrutherford@dwt.com,
`seatm@dwt.com
`
`Signature
`
`Date
`
`/MEM/
`
`05/03/2017
`
`Attachments
`
`Notice of Outcome of Civil Action Cancellation.pdf(732451 bytes )
`
`

`

`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`
`
`
`ENERGY HEATING LLC, an Idaho limited
`liability company,
`
`
`
`
`
`v.
`
`Petitioner,
`
`
`
`Cancellation No. 92061696
`
`Registration Serial No. 3,811,923
`
`
`
`
`HEAT ON-THE-FLY, LLC, a Louisiana limited
`liability company,
`
`
`
`
`
`
`Registrant.
`
`PETITIONER’S NOTICE OF OUTCOME OF CIVIL ACTION
`
`Petitioner Energy Heating LLC (“Petitioner”), through its undersigned counsel,
`
`Davis Wright Tremaine LLP, hereby provides notice of the outcome of the related civil action
`
`for Cancellation No. 91213483.
`
`In the prior pending civil action, Case No. 4:13-cv-10, the jury found that the phrase
`
`“Heat On-The-Fly” is generic, and the Trial Court entered judgment accordingly (see Annexes A
`
`and B). Registrant Heat On-The-Fly, LLC originally sought to appeal the finding of genericness.
`
`However, in its appeal briefing filed on April 13, 2017, Registrant announced that it had
`
`“decided not to pursue its appeal regarding” the judgment on the trademark claims. See Annex C
`
`at 31 (“Accordingly, that appellate point [concerning the trademark judgment] is withdrawn and
`
`the Court need not address it.”). There are no other pending appeals concerning the trademark
`
`judgment, and no new appeals may be filed at this time. Accordingly, Petitioner therefore
`
`respectfully submits that the Trial Court’s judgment that the phrase “heat on-the-fly” is generic is
`
`final and the Board may act accordingly. See, e.g., TMPB 510.02(b) (“A proceeding is
`
`
`
`1
`
`

`

`considered to have been finally determined when an order or ruling that ends litigation has been
`
`rendered, and no appeal has been filed, or all appeals filed have been decided and the time for
`
`any further review has expired.). In light of the final judgment that the phrase “heat on-the-fly”
`
`is generic, Petitioner respectfully requests that the Board enter judgment cancelling Registration
`
`No. Serial No. 3,811,923.
`
`
`DATED this 3rd day of May, 2017.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`
`
`
`s/Matthew E. Moersfelder
`
`By: F. Ross Boundy
`
`Matthew E. Moersfelder
`
`Attorneys for Applicant
`
`DAVIS WRIGHT TREMAINE LLP
`
`1201 Third Ave, Suite 2200
`
`Seattle, Washington 98109
`
`
`
`
`
`
`
`2
`
`

`

`CERTIFICATE OF FILING
`
` I
`
` hereby certify that PETITIONER’S NOTICE OF OUTCOME OF CIVIL ACTION is
`being filed with the Trademark Trial and Appeal Board using the ESTTA filing system of the
`U.S. Patent and Trademark Office on the below date.
`
` May 3, 2017
`
`
`
` s/Matthew E. Moersfelder
`
`
`
`
`
`Date:
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that PETITIONER’S NOTICE OF OUTCOME OF CIVIL ACTION is
`being duly served upon on Registrant’s counsel by email:
`
`Martha J. Engel, Esq.
`Winthrop & Weinstine PA
`3500 Capella Tower
`225 South Sixth Street
`Minneapolis, Minnesota 55402
`trademark@winthrop.com, mengel@winthrop.com, sbell@winthrop.com
`
`
`Date:
`
` May 3, 2017
`
`
`
` s/Matthew E. Moersfelder
`
`
`
`
`
`
`
`3
`
`

`

`ANNEX A
`ANNEXA
`
`
`
`
`
`

`

`Case 4:13-cv-00010-RRE-ARS Document 616 Filed 01/14/16 Page 1 of 3
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NORTH DAKOTA
`
`Energy Heating, LLC, an Idaho lim ited
`liability com pany; Rocky Mountain Oilfield
`Services, LLC, an Idaho lim ited liability
`com pany,
`
`Plaintiff/ Counterclaim Defendants,
`
`vs.
`
`Civil Case No. 4:13-cv-10
`
`Heat On-The-Fly, LLC, a Louisiana lim ited
`liability com pany, and Super Heaters
`North Dakota, a North Dakota lim ited
`liability com pany,
`
` ORD ER FOR J U D GMEN T ON
`J U RY’S S P ECIAL VERD ICT
`
`Defendants,
`
`and
`
`Heat On-The-Fly, LLC, a Louisiana lim ited
`liability com pany,
`
`Counterclaim ant.
`
`Heat On-The-Fly, LLC, a Louisiana lim ited
`liability com pany,
`
`Third-Party Plaintiff/ Counterclaim
`Defendant,
`
`vs.
`
`Marathon Oil Corporation,
`
`Third-Party Defendant/
`Counterclaim ant.
`
`IN TROD U CTION AN D S U MMARY
`
`A jury trial was held in this action August 18 through Septem ber 4, 20 15. The jury
`
`was asked to decide several issues. First, the jury was asked to decide whether the Heat-
`
`

`

`Case 4:13-cv-00010-RRE-ARS Document 616 Filed 01/14/16 Page 2 of 3
`
`On-The-Fly copyright was enforceable. Secondly, the jury was asked to decide whether the
`
`Defendants, Heat On-The-Fly, LLC, and Super Heaters North Dakota (collectively “HOTF”)
`
`m ade representations that they held a valid, enforceable patent and, if so, whether the
`
`representations were m ade in bad faith. If the jury found bad faith, they were then asked
`
`to decide state tort law claim s of deceit, tortious interference with contract, an d tortious
`
`interference with a business relationship.
`
`The jury returned a verdict on a special verdict form 1 in which it found the following:
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`To the greater weight of the evidence, the m ark “Heat On-The-Fly” is generic.
`
`To the greater weight of the evidence, HOTF m ade representations to
`
`Triangle Oil that it had a valid patent.
`
`By clear and convincing evidence, the claim s were m ade in bad faith.
`
`That Energy Heating2 had a contract with Triangle Oil.
`
`That HOTF unlawfully interfered with Energy Heating’s contract with
`
`Triangle Oil.
`
`6.
`
`That Energy Heating had a prospective business relationship with Triangle
`
`Oil.
`
`7.
`
`That HOTF unlawfully interfered with the prospective business relationship
`
`with Triangle Oil.3
`
`1 Doc. # 573.
`
`2 At trial, the jury was told to refer to Plaintiffs, Energy Heating, LLC, and Rocky Mountain
`Oilfield Services, LLC, as “Energy Heating” collectively. Sim ilarly, the collective “HOTF” was used to refer
`to Defendants, Heat On-The-Fly, LLC, and Super Heaters North Dakota.
`
`3 The jury found that HOTF knowingly engaged in unlawful sales and advertising practices, which
`served as the underlying tort to support the tort of interference with business relationships under North
`Dakota law.
`
`2
`
`

`

`Case 4:13-cv-00010-RRE-ARS Document 616 Filed 01/14/16 Page 3 of 3
`
`8 .
`
`The jury awarded dam ages of $ 750 ,0 0 0 .
`
`The jury found specifically that the tort of deceit was not proven by clear and
`
`convincing evidence. In a “SPECIAL INTERROGATORY TO VERDICT FORM”,4 the jury
`
`declined to award interest at the prejudgm ent rate of up to 6 percent.
`
`ORD ER FOR J U D GMEN T
`
`In accordance with the jury verdict, the court m akes the following ORD ERS :
`
`1.
`
`The tra d e m a rk for “Heat On-The-Fly” is IN VALID and unenforceable as
`
`it is a generic term .
`
`2.
`
`3.
`
`The claim for the tort of D e ce it is D ISMIS S ED W ITH P REJ U D ICE.
`
`D AMAGES in the am ount of $ 750 ,0 0 0 are AW ARD ED for the intentional
`
`tortious conduct of HOTF.
`
`4.
`
`The court D ECLIN ES to order prejudgm ent interest.
`
`IT IS S O ORD ERED .
`
`LET J U D GMEN T B E EN TERED ACCORD IN GLY
`
`Dated this 14th day of J anuary, 20 16.
`
`/ s/ R alph R . Erickson
`Ralph R. Erickson, Chief J udge
`United States District Court
`
`4 Doc. # 575.
`
`3
`
`

`

`ANNEX B
`ANNEXB
`
`
`
`
`
`

`

`Case 4:13-cv-00010-RRE-ARS Document 678 Filed 03/16/16 Page 1 of 1
`
`Local AO 450 (rev. 5/10)
`
`United States District Court
`District of North Dakota
`
`Energy Heating, LLC, an Idaho limited liability company;
`Rocky Mountain Oilfield Services, LLC, an Idaho limited
`liability company,
`
`Plaintiff/Counterclaim Defendants,
`
`vs.
`Heat On-The-Fly, LLC, a Louisiana limited liability company,
`and Super Heaters North Dakota, a North Dakota limited
`liability company,
`
`Defendants,
`
`and
`Heat On-The-Fly, LLC, a Louisiana limited liability company,
`Counterclaimant.
`Heat On-The-Fly, LLC, a Louisiana limited liability company,
`Third-Party Plaintiff/Counterclaim
`
`Defendant,
`vs.
`Marathon Oil Corporation,
`Third-Party Defendant/ Counterclaimant.
`
`SECOND AMENDED
`JUDGMENT IN A CIVIL CASE
`
`Case No.
`
`4:13-cv-10
`
`Jury Verdict. This action came before the Court for a trial by jury. The issues have been tried and the jury has rendered its
`verdict.
`
`Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or heard and a decision has
`been rendered.
`
`Decision on Motion. This action came before the Court on motion. The issues have been considered and a decision rendered.
`
`✔ ✔
`
`Stipulation. This action came before the court on motion of the parties. The issues have been resolved.
`
`Dismissal. This action was voluntarily dismissed by Plaintiff pursuant to Fed. R. Civ. P. 41(a)(1)(ii).
`
`IT IS ORDERED AND ADJUDGED:
`
`Pursuant to the Order filed at Docket # 616:
`1. The trademark for “Heat On-The-Fly” is INVALID and unenforceable as it is a generic term.
`2. The claim for the tort of Deceit is DISMISSED WITH PREJUDICE.
`3. DAMAGES in the amount of $750,000 are AWARDED for the intentional tortious conduct of HOTF.
`4. The court DECLINES to order prejudgment interest.
`
`Pursuant to the Order filed at Docket # 619:
`HOTF’s inequitable conduct renders the ‘993 Patent unenforceable. Energy Heating and Marathon’s claims for Declaratory Judgment on the
`issue of Inequitable Conduct are GRANTED.
`
`Pursuant to the Order filed at Docket #677:
`Plaintiffs motion for exemplary damages is DENIED. Plaintiff's motion for an award of attorney fees and non-taxable costs is DENIED.
`Plaintiff's motion for taxable costs is GRANTED in the amount of $67,085.77. Marathon's motion for costs is GRANTED in the amount of
`$47,563.48. Marathon's motion to fins this case exceptional and to award attorneys' fees and non-taxable costs is DENIED.
`
`March 16, 2016
`Date: __________________ ROBERT J. ANSLEY, CLERK OF COURT
`
`/s/ Ashley Sanders, Deputy Clerk
`by:________________________________
`
`

`

`
`
`
`ANNEX C
`ANNEXC
`
`
`
`
`
`

`

`
`
`
`
`Case: 16-1559 Document: 83 Page: 1 Filed: 04/13/2017
`
`NO. 16-1559 (Lead), -1893, -1894
`
`In the United States Court of Appeals
`for the Federal Circuit
`
`ENERGY HEATING, LLC, an Idaho limited liability company, ROCKY
`MOUNTAIN OILFIELD SERVICES, LLC., an Idaho limited liability
`company,
`
`Plaintiffs-Cross-Appellants
`
`MARATHON OIL COMPANY, MARATHON OIL CORPORATION,
`
` Third Party Defendants-Cross Appellants
`
`v.
`
`HEAT ON-THE-FLY, LLC, a Louisiana limited liability company, SUPERHEATERS
`NORTH DAKOTA, LLC, a North Dakota limited liability company,
`
`
`
` Defendants-Appellants
`
`On Appeal From The United States District court
`For The District of North Dakota
`No. 4:13-cv-00010
`
`APPELLANTS’ RESPONSE AND REPLY BRIEF
`
`Gregory L. Porter
`State Bar No. 24002784
`gregporter@andrewskurth.com
`Lloyd L. Davis
`State Bar No. 24080852
`leedavis@andrewskurth.com
`ANDREWS KURTH KENYON LLP
`600 Travis Street, Suite 4200
`Houston, Texas 77002
`Telephone: (713) 220-4200
`
`Scott A. Brister
`State Bar No. 00000024
`sbrister@andrewskurth.com
`ANDREWS KURTH KENYON LLP
`111 Congress, Suite 1700
`Austin, Texas 78701
`Telephone: (512) 320-9200
`
`
`ATTORNEYS FOR APPELLANTS
`
`
`
`
`
`

`

`Case: 16-1559 Document: 83 Page: 2 Filed: 04/13/2017
`
`
`
`CERTIFICATE OF INTEREST
`
`The full name of every party or amicus represented by me is:
`
`
`
`
`
`
`Heat On-The-Fly, LLC
`Super Heaters North Dakota, LLC
`
`Not applicable
`
`for
`to Federal Circuit Rule 47.4, Counsel
`Pursuant
`
`Appellants/Cross-Appellees Heat On-The-Fly, LLC and Super
`Heaters North Dakota, LLC certifies the following:
`
`1.
`
`
`
`
`The name of the real party in interest (if the party is named in
`2.
`the caption is not the real party in interest) represented by me is:
`
`
`
`3. All parent corporations and any publicly held companies that
`own 10 percent or more of the stock of the party or amicus curiae
`represented by me are:
`
`
`Phoenix Consolidated Oilfield Services, LLC
`
`
`Phoenix Services, LLC
`
`
`Quantum Energy Partners
`
`The names of all law firms and the partners or associates that
`4.
`appeared for the party or amicus now represented by me in the trial
`court or agency or are expected to appear in this case are:
`
`Law Firm
`
`Andrews Kurth Kenyon LLP
`111 Congress, Suite 1700
`Austin, TX 78701
`(512) 320-9200
`(512) 320-9292 (Fax)
`
`Andrews Kurth Kenyon LLP
`
`Partners and Associates
`
`Scott A. Brister
`
`
`
`
`
`Gregory L. Porter
`
`
`
`i
`
`

`

`Case: 16-1559 Document: 83 Page: 3 Filed: 04/13/2017
`
`
`
`Law Firm
`
`600 Travis, Suite 4200
`Houston, TX 77002
`(713) 220-4125
`(713) 238-7240 (Fax)
`
`Winthrop & Weinstine, PA
`225 South 6th Street, Suite 3500
`Minneapolis, MN 55402
`(612) 604-6489
`(612) 604-6800 (Fax)
`
`
`King, Krebs & Jurgens, PLLC
`201 St. Charles Avenue
`Suite 4500
`New Orleans, LA 70170
`(504) 582-3800
`(504) 582-1233 (Fax)
`
`Dorsey & Whitney LLP
`50 South 6th St.
`Suite 1500
`Minneapolis, MN 55402-1498
`(612) 340-2600
`
`
`Brudvik Law Office, P.C.
`35 North 4th Street
`Suite 201
`Fargo, ND 57102
`(701) 532-1008
`
`
`
`
`
`
`Partners and Associates
`
`Lloyd L. Davis
`
`
`
`Ryan J. Schildkraut
`Britta S. Loftus
`Devan Padmanabhan
`Gerald H. Sullivan, Jr.
`Michelle Dawson
`Paul J. Robbennolt
`
`Henry A. King
`Len R. Brignac
`
`
`J. Thomas Vitt
`Mariah Reynolds
`Sarah A. Herman
`
`
`Ross A. Nilson
`
`
`
`
`
`ii
`
`

`

`Case: 16-1559 Document: 83 Page: 4 Filed: 04/13/2017
`
`
`
`Law Firm
`
`
`
`
`
`
`
`
`Partners and Associates
`
`
`
`By: /s/ Scott A. Brister
` Scott A. Brister
`
`Counsel for Appellants/Cross-
`Appellees Heat On-The-Fly LLC and
`Super Heaters North Dakota LLC
`
`
`
`
`iii
`
`

`

`Case: 16-1559 Document: 83 Page: 5 Filed: 04/13/2017
`
`
`
`TABLE OF CONTENTS
`
`Introduction .................................................................................................... 1
`
`Argument in Response to Plaintiffs’ Cross-Appeal .................................. 2
`
`I.
`
`II.
`
`This Is Not an Exceptional Case .............................................. 2
`
`Energy Heating Never Pleaded an Unfair Sales and
`Advertising Claim ..................................................................... 5
`
`Argument in Reply on HOTF’s Appeal ...................................................... 8
`
`I.
`
`Inequitable Conduct.................................................................. 8
`
`A.
`
`B.
`
`C.
`
`continuation patents disprove
`The
`inequitable conduct. ........................................................ 8
`
`in finding
`The district court erred
`Hefley was not experimenting ..................................... 11
`
`The district court erred in excluding the
`key evidence on intent .................................................. 16
`
`II. Obviousness ............................................................................. 20
`
`III. Tortious Interference ............................................................... 23
`
`A.
`
`B.
`
`The only proof of interference was
`hearsay ............................................................................. 23
`
`The state tort is preempted by federal
`patent law ........................................................................ 25
`
`IV. Claim Construction ................................................................. 27
`
`V. Divided Infringement ............................................................. 28
`
`VI. Trademark ................................................................................ 31
`
`Conclusion and Prayer ................................................................................ 32
`
`
`
`iv
`
`

`

`Case: 16-1559 Document: 83 Page: 6 Filed: 04/13/2017
`
`
`
`CASES
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`800 Adept, Inc. v. Murex Sec., Ltd.,
`539 F.3d 1354 (Fed. Cir. 2008) .......................................................... 25, 26
`
`Akamai Techs., Inc. v. Limelight Networks, Inc.
`797 F.3d 1020 (Fed. Cir. 2015) .................................................................28
`
`Akamai Techs., Inc. v. Limelight Networks, Inc.,
`692 F.3d 1301 (Fed. Cir. 2012) (en banc) (per curiam) ................. 29, 30
`
`Amini Innovation Corp. v. Anthony Cal., Inc.,
`439 F.3d 1365 (Fed. Cir. 2006) .................................................................21
`
`Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) ...................................21
`
`Chicago Bd. Options Exch., Inc. v. Int’l Sec. Exch., LLC,
`677 F.3d 1361 (Fed. Cir. 2012) ................................................................... 5
`
`City of Elizabeth v. Pavement Co.,
`97 U.S. 126 (1877) .....................................................................................12
`
`Dow Jones & Co., Inc. v. Ablaise Ltd.,
`606 F.3d 1338 (Fed. Cir. 2010) .................................................................22
`
`Edwards v. Byrd,
`750 F.3d 728 (8th Cir. 2014) .....................................................................22
`
`Eli Lilly & Co. v. Teva Parenteral Meds., Inc.,
`845 F.3d 1357 (Fed. Cir. 2017) ................................................................... 9
`
`Enzo Biochem, Inc. v. Calgene, Inc.,
`188 F.3d 1362 (Fed. Cir. 1999) ................................................................... 4
`
`EZ Dock v. Schafer Sys., Inc.,
`276 F.3d 1347 (Fed. Cir. 2002) .................................................... 12, 14, 15
`
`
`
`v
`
`

`

`Case: 16-1559 Document: 83 Page: 7 Filed: 04/13/2017
`
`
`
`Gamma-10 Plastics, Inc. v. Am. President Lines, Ltd.,
`32 F.3d 1244 (8th Cir. 1994) ....................................................................... 6
`
`Honeywell Int’l Inc. v. Universal Avionics Sys. Corp.,
`488 F.3d 982 (Fed. Cir. 2007) ............................................................ 13, 15
`
`Jackson v. Allstate Ins. Co.,
`785 F.3d 1193 (8th Cir. 2015) ...................................................................19
`
`KSR Int’l Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) ...................................................................................21
`
`Lazare Kaplan Int’l, Inc. v. Photoscribe Tech., Inc.,
`628 F.3d 1359 (Fed. Cir. 2010) .................................................................16
`
`Mankes v. Vivid Seats Ltd.,
`822 F.3d 1302 (Fed. Cir. 2016) .......................................................... 28, 31
`
`Manville Sales Corp. v. Paramount Sys., Inc.,
`917 F.2d 544 (Fed. Cir. 1990) ...................................................................14
`
`Medgraph, Inc. v. Medtronic, Inc.,
`843 F.3d 942 (Fed. Cir. 2016) ...................................................................21
`
`Metcalf Const. Co., Inc. v. United States,
`102 Fed. Cl. 334 (2011) ............................................................................... 6
`
`Microsoft Corp. v. I4i Ltd. P’ship,
`564 U.S. 91 (2011) .....................................................................................10
`
`Move, Inc. v. Real Estate All. Ltd.,
`709 F.3d 1117 (Fed. Cir. 2013) .................................................................29
`
`Nilssen v. Osram Sylvania, Inc.,
`528 F.3d 1352 (Fed. Cir. 2008) .............................................................4, 18
`
`Octane Fitness, LLC v. ICON Health & Fitness, Inc.,
`134 S. Ct. 1749 (2014) ................................................................................. 2
`
`
`
`vi
`
`

`

`Case: 16-1559 Document: 83 Page: 8 Filed: 04/13/2017
`
`
`
`Ohio Willow Wood Co. v. Alps S., LLC,
`735 F.3d 1333 (Fed. Cir. 2013) .................................................................10
`
`Old Reliable Wholesale, Inc. v. Cornell Corp.,
`635 F.3d 539 (Fed. Cir. 2011) ...................................................................23
`
`Pequignot v. Solo Cup Co.,
`608 F.3d 1356 (Fed. Cir. 2010) .................................................................17
`
`Pfaff v. Wells Elecs., Inc.,
`525 U.S. 55 (1998) .....................................................................................15
`
`Pharmacia & Upjohn Co. v. Mylan Pharm., Inc.,
`182 F.3d 1356 (Fed. Cir. 1999) ................................................................... 4
`
`Prof’l Real Estate Inv’rs, Inc. v. Columbia Pictures Indus., Inc.,
`508 U.S. 49 (1993) .....................................................................................26
`
`Seal–Flex, Inc. v. Athletic Track & Court Constr.,
`98 F.3d 1318 (Fed. Cir. 1996) ...................................................................14
`
`Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc.,
`135 S. Ct. 831 (2015) .................................................................................27
`
`Therasense, Inc. v. Becton, Dickinson & Co.,
`649 F.3d 1276 (Fed. Cir. 2011) (en banc) ...........................................8, 16
`
`Thimjon Farms P’ship v. First Int’l Bank & Trust,
`837 N.W.2d 327--34 (N.D. 2013) .............................................. 6, 7, 23, 25
`
`TP Labs., Inc. v. Professional Positioners, Inc.,
`724 F.2d 965 (Fed. Cir. 1984) ...................................................................12
`
`U.S. Water Servs., Inc. v. Novozymes A/S,
`843 F.3d 1345 (Fed. Cir. 2016) ................................................................... 8
`
`Walt Bennett Ford, Inc. v. Goyne,
`969 F.2d 603 (8th Cir. 1992) ...................................................................6, 8
`
`
`
`vii
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`

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`Case: 16-1559 Document: 83 Page: 9 Filed: 04/13/2017
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`
`
`Wegener v. Johnson,
`527 F.3d 687 (8th Cir. 2008) .....................................................................18
`
`Wilsa, Inc. v. Syntex (U.S.A.) Inc.,
`856 F.2d 202 (Fed. Cir. 1988) ...................................................................17
`
`Woods v. DeAngelo Marine Exhaust, Inc.,
`692 F.3d 1272 (Fed. Cir. 2012) .................................................................18
`
`Young v. United Parcel Serv., Inc.,
`135 S. Ct. 1338 (2015) ...............................................................................21
`
`Statutes
`
`35 U.S.C. § 282 ...............................................................................................10
`
`35 U.S.C. § 285 ................................................................................................. 2
`
`Rules
`
`FED. R. EVID. 404(b)(1) ...................................................................................25
`
`
`
`
`
`
`viii
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`

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`Case: 16-1559 Document: 83 Page: 10 Filed: 04/13/2017
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`
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`INTRODUCTION
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`If inequitable conduct were a rule not just for patents but for briefs,
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`the response briefs here would qualify.1 They repeatedly misstate basic
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`principles like the standard of review, and ignore opinions of this Court
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`that are both recent and binding. It is hard to believe these were all honest
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`mistakes, as the correct standards and precedents were all cited in the
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`opening brief by Heat On-The-Fly (“HOTF”).
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`Yet the primary mistake in this litigation so far is the notion, shared
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`by Plaintiffs and the district court, that 61 prior uses for pay could not
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`possibly represent “experimental use” regardless of the rest of the facts.
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`But experimental use includes jobs performed to see if an invention can
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`perform its intended purpose in its intended environment. Trips to the
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`moon may already be on sale,2 but they aren’t ready for patenting until
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`they work. The district court erred in concluding otherwise.
`
`
`1 In this brief, (1) “Energy Heating” is used to refer to Energy Heating,
`LLC and Rocky Mountain Oilfield Services, LLC collectively, (2)
`“Marathon” to refer to Marathon Oil Co. and Marathon Oil Corp.
`collectively, and (3) “Plaintiffs” to refer to all of the foregoing.
`
`2 See http://money.cnn.com/2017/02/27/technology/spacex-moon-
`tourism/.
`
`
`
`1
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`

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`Case: 16-1559 Document: 83 Page: 11 Filed: 04/13/2017
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`
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`I.
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`ARGUMENT IN RESPONSE TO PLAINTIFFS’ CROSS-APPEAL
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`THIS IS NOT AN EXCEPTIONAL CASE
`A district court may award fees “in the rare case in which a party’s
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`unreasonable conduct” renders the case “exceptional.” Octane Fitness, LLC
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`v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1757 (2014); see 35 U.S.C. §
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`285. District courts exercise “equitable discretion” in deciding whether a
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`case is exceptional, considering “the totality of the circumstances” and
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`whether the case “stands out from others with respect to the substantive
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`strength of a party’s litigating position (considering both the governing law
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`and the facts of the case) or the unreasonable manner in which the case was
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`litigated.” Id. at 1756. After considering all that, the district court decided
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`this case was not exceptional, a decision well within its discretion.
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`HOTF did not start this litigation; Plaintiffs did. Appx87. After Energy
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`Heating sued HOTF, it is not exceptional that HOTF defended itself; since
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`biblical times, law sources have recognized a right to self-defense.3 The
`
`
`3 See, e.g., Genesis 9:6 (“Whoever sheds man’s blood, by man his blood
`shall be shed, for in the image of God He made man.”); Exodus 21:23–25
`(“[Y]ou shall appoint as a penalty life for life, eye for eye, tooth for tooth,
`hand for hand, foot for foot, burn for burn, wound for wound, bruise for
`bruise.”).
`
`
`
`2
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`

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`Case: 16-1559 Document: 83 Page: 12 Filed: 04/13/2017
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`
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`district court’s conclusion was based largely on this principle. See
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`Appx21533 (“Prior to the start of this lawsuit HOTF had not taken any court
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`action to enforce its rights to its patent. This patent action was initiated by
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`Energy Heating originally seeking a declaration that the patent was
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`invalid.”). Turning to specifics, the district court also found that:
`
`•
`
`•
`
`•
`
`•
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`•
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`HOTF’s “proffered defenses and
`counterclaims was not unreasonable”;
`
`its assertion of
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`its
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`HOTF’s evidence and arguments at trial “were neither specious
`nor without merit”;
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`HOTF presented “colorable good faith arguments that could
`well have supported an opposite conclusion by the finders of
`fact”;
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`HOTF “did not unreasonably and unnecessarily drag[] this
`matter on”; and
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`HOTF never “used this case to extract a nuisance-value
`settlement, or deliberately misrepresented any
`law, or
`introduced or relied on any expert testimony that did not meet
`minimal standards of reliability, nor evidence of vexatious
`litigation tactics or any pattern of litigation misconduct.”
`
`Appx21534. Given these detailed findings, Plaintiffs’ claim that the district
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`court’s analysis was “superficial” is unsupportable.
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`This is not to say the district judge was happy with the way this case
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`was litigated. The court found attorneys from both sides “did not always
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`exhibit the best, and most civil, behavior toward each other”; but he also
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`
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`3
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`

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`Case: 16-1559 Document: 83 Page: 13 Filed: 04/13/2017
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`
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`found no evidence “HOTF or its lawyers engaged in worse conduct than
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`Energy Heating or its lawyers[.]” Appx21534.
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`Plaintiffs have continued to push the envelope in this Court. They
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`claim the district court failed to find this case exceptional only because it
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`applied “the incorrect legal standard” and “improperly disregarded its
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`own findings” of inequitable conduct. EHBr at 9, 65–70. But the district
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`court expressly considered its inequitable conduct finding in its analysis:
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`“[E]ven though the evidence at trial was sufficient for the jury to find bad
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`faith by clear and convincing evidence and for the court to find inequitable
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`conduct by clear and convincing evidence, HOTF’s evidence and
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`arguments at trial were neither specious nor without merit.” Appx21534.
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`Inequitable conduct alone does not make a case exceptional, as the
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`analysis depends on the totality of the circumstances. See Nilssen v. Osram
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`Sylvania, Inc., 528 F.3d 1352, 1358 (Fed. Cir. 2008) (“[T]here is no per se rule
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`of exceptionality in cases involving inequitable conduct.”). Conduct before
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`the PTO forms part of the inequitable-conduct analysis, and inequitable
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`conduct forms part of the exceptional-case analysis. See Enzo Biochem, Inc. v.
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`Calgene, Inc., 188 F.3d 1362, 1380–81 (Fed. Cir. 1999); Pharmacia & Upjohn Co.
`
`
`
`4
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`

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`Case: 16-1559 Document: 83 Page: 14 Filed: 04/13/2017
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`
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`v. Mylan Pharm., Inc., 182 F.3d 1356 (Fed. Cir. 1999). But the district court
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`considered all that here, and decided this was not an exceptional case.
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`Plaintiffs are not hapless victims. Energy Heating sued before
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`receiving any threats or demands from HOTF, and ran up $3.5 million in
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`attorney fees for three partners, seven associates, three paralegals, and local
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`counsel, plus almost $200,000 in costs. Appx21186. Marathon ran up
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`another $1.7 million in fees and costs for one partner, three associates, eight
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`unspecified timekeepers, and another
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`local counsel. Appx20485–86;
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`Appx20492–94; Appx20959–21001; Appx21003. And as the district court
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`found, HOTF’s arguments “could well have supported an opposite
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`conclusion by the finders of fact.” The district court did not abuse its
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`discretion in declining to impose over $5 million in fees on HOTF for
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`getting itself sued.
`
`II. ENERGY HEATING NEVER PLEADED AN UNFAIR SALES AND
`ADVERTISING CLAIM
`The district court correctly denied attorneys’ fees and treble damages
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`for a claim Energy Heating never pleaded and was never tried by consent.
`
`Trial by consent of unpleaded claims is not unique to patent law, so
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`this Court applies the law of the regional circuit. See Chicago Bd. Options
`
`
`
`5
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`

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`Case: 16-1559 Document: 83 Page: 15 Filed: 04/13/2017
`
`
`
`Exch., Inc. v. Int’l Sec. Exch., LLC, 677 F.3d 1361, 1374 (Fed. Cir. 2012) (denial
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`of amended complaint). In the Eighth Circuit (and all others), “implied
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`consent cannot be inferred from the unchallenged introduction of evidence
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`relevant to an unpleaded defense when the evidence is also relevant to an
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`issue already in the case.” Walt Bennett Ford, Inc. v. Goyne, 969 F.2d 603, 606
`
`(8th Cir. 1992) (emphasis added).4
`
`Energy Heating never pleaded the North Dakota statute under which
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`it seeks legal fees and treble damages. Appx6228–43. It pleaded a tortious
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`interference claim, which requires proof of an “independently tortious or
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`otherwise unlawful act.” Thimjon Farms P’ship v. First Int’l Bank & Trust, 837
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`N.W.2d 327, 333--34 (N.D. 2013). One “unlawful act” asserted on the eve of
`
`trial to support tortious interference was violation of this North Dakota
`
`
`4 See also Gamma-10 Plastics, Inc. v. Am. President Lines, Ltd., 32 F.3d
`1244, 1256 (8th Cir. 1994) (“[A] district court is not required to grant a
`motion to amend on the basis of some evidence that would be relevant to
`the new claim if the same evidence was also relevant to a claim originally
`pled.” (emphasis added)); Metcalf Const. Co., Inc. v. United States, 102 Fed.
`Cl. 334, 343 (2011) (“Although the United States Court of Appeals for the
`Federal Circuit has not had an occasion to rule on the circumstances under
`which implied consent should be assumed when an issue not pled, the other
`federal appellate courts have uniformly ruled that, where evidence is
`introduced at trial to establish a properly pled issue, implied consent may not
`be assumed as to issues not pled.” (emphasis added)).
`
`
`
`6
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`

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`Case: 16-1559 Document: 83 Page: 16 Filed: 04/13/2017
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`
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`state statute. Appx16611-16615. But in every spot where Energy Heating
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`says the trial court “entered an Order” or “the parties discussed” this
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`statute, the context was its tortious interference claim. Id.; Appx56;
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`Appx16794. As the trial judge patiently explained to counsel, the evidence
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`and instruction on the North Dakota statute were admitted for the
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`“unlawful act” element of tortious interference, not for an unpleaded
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`statutory claim:
`
`Plaintiffs: The North Dakota statute, unfortunately I can’t give
`you the cite but it’s the statute on false advertising,
`does have a provision to treble damages and award
`attorney’s fees if the actions are intentional.