Hunting Solutions Limited Liability Company D/B/A Extreme Hunting Solutions v. William L. Knight
16-0733
| Iowa Ct. App. | Jun 21, 2017Background
- William Knight invented and patented a “Rattle Stick for Attacking Animals” intended to mimic deer sounds; he lacked resources to mass-produce it.
- Knight met Randall Ferman (CEO of Hunting Solutions, L.L.C. d/b/a Extreme Hunting Solutions (EHS)) in April 2013 to develop a manufacturable prototype; EHS paid for prototype, mold, marketing, and packaging (EHS estimates ~ $35,000 plus time value).
- During development, EHS substituted Knight’s patented “grunt tube” with a different vocalization (a snort wheeze) over Knight’s objection; EHS ordered a mold (about $27,000) before a written agreement was finalized.
- Negotiations over exclusivity failed: Knight sought a nonexclusive license; EHS sought exclusivity (and briefly discussed buying the patent); relationship dissolved and EHS sued to recover its expenditures.
- At bench trial the district court rejected EHS’s unjust enrichment claim, finding Knight had not been enriched because he had not used or profited from the product EHS developed; the court indicated EHS might have a future remedy if Knight later benefited.
- On appeal, EHS argued it conferred a valuable, marketable-product benefit (transformation from concept to producible product) and should be compensated; Knight argued EHS’s product did not practice his patent (grunt reed removed) and the mold was unusable for U.S. production, so he received no benefit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Knight was unjustly enriched by EHS’s work so as to require restitution | EHS: developed a marketable, mass-producible prototype and conferred value deserving compensation | Knight: EHS’s changes (snort wheeze) and faulty mold mean EHS conferred no benefit that advances Knight’s patented product | Court held EHS failed to prove benefit was conferred; no unjust enrichment proven |
| Proper focus for unjust enrichment valuation | EHS: value is the services/product EHS provided, not Knight’s profits | Knight: absence of benefit (and potential harm from disclosure) defeats claim regardless of services’ cost | Court focused on whether Knight received a benefit, not on EHS’s expenditures; no benefit shown |
| Appropriate remedy timing for unjust enrichment here | EHS: seeks present restitution for expenditures | Knight: restitution not warranted absent current use or enrichment by Knight | Court: restitution may be available in future if Knight later uses or profits from EHS-developed product; not appropriate now |
| Standard of review for equitable unjust enrichment claim | N/A (procedural) | N/A | Review de novo; district fact findings given weight but not binding; affirmed district court on the merits |
Key Cases Cited
- State ex rel. Palmer v. Unisys Corp., 637 N.W.2d 142 (Iowa 2001) (defines unjust enrichment elements and restitution framework)
- Iowa Waste Sys., Inc. v. Buchanan County, 617 N.W.2d 23 (Iowa Ct. App. 2000) (equitable/unjust enrichment claims reviewed de novo)
- Catipovic v. Turley, 68 F. Supp. 3d 983 (N.D. Iowa 2014) (measure of unjust enrichment damages focuses on value provided, not defendant profits)
- Olson v. Nieman’s, Ltd., 579 N.W.2d 299 (Iowa 1998) (patent claim defines scope of invention; claims must particularly point out the invention)
