882 F.3d 974
10th Cir.2018Background
- Utility Associates purchased U.S. Patent No. 6,381,556 (the '556 patent) in January 2013 and sent letters to customers of competing vendors warning about potential infringement and promoting Utility's licensed systems.
- Digital Ally sought declaratory relief in 2013 (dismissed for lack of personal jurisdiction) and petitioned the PTAB for inter partes review; the PTAB (and later the Federal Circuit) found most claims of the '556 patent unpatentable, with one claim not shown unpatentable and one claim not reviewed.
- Digital Ally filed suit in June 2014 asserting nine counts against Utility, including monopolization (Count I), bad-faith assertion of patent infringement under Georgia law (Count II), and Lanham Act false advertising (Counts III–IV), among others.
- The district court granted summary judgment for Utility on all counts; Digital Ally appealed only Counts I–IV and focused its brief mainly on alleged "bad faith."
- The Tenth Circuit reviewed de novo, found Digital Ally waived or failed to brief essential elements of Counts I–IV (market definition/power for monopolization; demand/injury for Georgia bad-faith statute; falsity for Lanham Act claims), and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Count I: Monopolization under §2 — market power/relevant market | Utility’s patent acquisition and letters unlawfully maintained monopoly power | No relevant market or market power shown; conduct not exclusionary | Affirmed for Utility — Digital Ally failed to prove relevant market/market power (waived on appeal) |
| Count II: Bad-faith assertion of patent infringement (Ga. Code Ann. §10-1-771) | Letters were demands/threats and caused injury to Digital Ally | Letters were informational/promotional, not demand letters; no proof of injury | Affirmed for Utility — Digital Ally waived arguments on demand-letter and injury elements |
| Counts III–IV: Lanham Act §43(a) false advertising | Letters contained materially false/misleading statements causing confusion and injury | Statements were not false but promotional puffery and thus not actionable | Affirmed for Utility — Digital Ally conceded falsity element by inadequate briefing |
| Evidentiary exclusion of customer communications | Excluded customer communications were admissible to show injury and effect of letters | Communications were hearsay and not business records; exclusion proper | Affirmed — district court did not abuse discretion; plaintiff failed to identify specific excluded materials on appeal |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard; failure of proof on essential element entitles movant to judgment)
- SCO Grp., Inc. v. Novell, Inc., 578 F.3d 1201 (10th Cir. 2009) (issues not adequately argued on appeal are waived)
- GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381 (10th Cir. 1997) (burden and concession principles at summary judgment)
- Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 762 F.3d 1114 (10th Cir. 2014) (elements of monopolization under §2)
- World Wide Ass'n of Specialty Programs v. Pure, Inc., 450 F.3d 1132 (10th Cir. 2006) (elements of Lanham Act false advertising claim)
- Jencks v. Modern Woodmen of Am., 479 F.3d 1261 (10th Cir. 2007) (standard of appellate review for summary judgment)