Digest of Sukumar v. Nautilus, Inc., No. 2014-1205 (Fed. Cir. May 4, 2015) (precedential). On appeal from the Western District of Virginia. Before Prost, Newman, and Reyna.
Procedural Posture: Plaintiff appealed district court’s grant of summary judgment that (1) plaintiff had not suffered “competitive injury” required to prevail on federal false patent marking claims, and (2) defendant was not liable under state unfair competition laws. CAFC affirmed.
- False marking: Potential competitors of someone who falsely marks a product may suffer “competitive injury”—a standing requirement in private false-marking suits—within the meaning of 35 U.S.C. § 292(b). However, in order to have suffered “competitive injury,” the potential competitor must have attempted to enter the market, an attempt comprising “(1) intent to enter the market with a reasonable possibility of success, and (2) an action to enter the market.” Evidence tending to show that the plaintiff had a subjective intent to enter the market was insufficient in this case because objective evidence contradicted it, except as to actions taken during the litigation. Additionally, the only “action” taken by the plaintiff was to buy 100 of defendant’s machines (which he allegedly intended to modify); he did not, e.g., develop a business plan, attempt to design a prototype, hire any employees, gain engineering knowledge, or investigate developing manufacturing capacity.
- Unfair competition: Notwithstanding some language in the district court’s opinion, the district court correctly applied the legal standards for causation in unfair competition claims: “immediate cause” under California law and “but-for cause” under Washington law. Evidence overwhelmingly showed that plaintiff’s failure to enter market was caused by factors other than the defendant’s false marking.