SYNGENTA SEEDS, INC., аnd Syngenta Participations AG, Plaintiffs-Appellees, v. DELTA COTTON CO-OPERATIVE, INC., Defendant-Appellant.
No. 05-1507.
United States Court of Appeals, Federal Circuit.
July 28, 2006.
Rehearing and Rehearing En Banc Denied Sept. 25, 2006.
457 F.3d 1269
This case is analogous. In Service Ventures, the employer‘s costs of compliance changed in a manner not known in advance with certainty, by virtue of changes in the сomposition of the workforce. Nonetheless, the nominally unchanged wage determination required Service Ventures to pay out whatever total sum of benefits was necessary for it to meet its obligations thereunder. Likewise, in this case, a wage determination (here, from a CBA) required LSI to pay whatever was necessary for it to meet its obligations to its employees, in light of changes in the costs of providing them with an agreed-upon level of health care benefit.
Just as we held such changes in cost to trigger the Price Adjustment Clause in Service Ventures, we hоld them to do so here. In short, the Price Adjustment Clause is triggered by changes in an employer‘s cost of compliance with the terms of a wage determination. The fact that there has been no nominal change in the mandated benefit—i.e., that there has been no change in the level of benefit provided by the defined-benefit plan—is simply irrelevant.
Finally, we address the government‘s argument that the Price Adjustment Clause does not apply because LSI can somehow satisfy its fringe-benefit obligations by making equivalent payments directly to its employees. See, e.g.,
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For the reasons stated above, we hold that the Board erred in granting summary judgment in favor of the government, and it abused its discretion in denying summary judgment to LSI. We agree with the Board, however, that this case involves no genuine issue of material fact, and it is therefore suitable for summary judgment. Accordingly, we reverse both holdings below and grant summary judgment in favor of LSI.
REVERSED
Costs to Appellant.
Mark Murphey Henry, Henry Law Firm, of Fayetteville, Arkansas, argued for plaintiffs-appellees. With him on the brief was Nathan P. Chaney.
William H. Bode, Bode & Grenier, LLP, of Washington, DC, argued for defendant-appellant. Of counsel on the brief was Hunter J. Hanshaw, of Jonesboro, Arkansas.
Before RADER, SCHALL, and GAJARSA, Circuit Judges.
GAJARSA, Circuit Judge.
On April 28, 2005, following a jury trial, the United States District Court for the Eastern District of Arkansas entered a judgment against defendant-appellant Delta Cotton Co-Operative, Inc., awarding damages to plaintiffs-appellees Syngenta Seeds, Inc., and Syngenta Participations AG (collectively “Syngenta Seeds” or “Syngenta“) for infringement of Syngen-
BACKGROUND
Syngenta Seeds is an international agribusiness that produces, among other agricultural products, commercial crop seeds. At the heart of this litigation is a Syngenta Seeds product known as “Coker 9663“—a soft red winter wheat variety sold by Syngenta through a network of independent distributors throughout the United States. The Coker 9663 variety is certified pursuant to, and subject to the protections of, the Plant Variety Protection Act (“PVPA“), discussed in detail below. As a certified PVPA seed, Coker 9663 is sold exclusively in approved packaging that sets forth the variety name and the required PVPA marking notice, which reads “Unauthorized Propagation Prohibited” or “Unauthorized Seed Multiplication Prohibited.” Syngenta is also the holder of the federally registered trademark “COKER.”
Delta Cotton operates a grain elevator in Greene County, Arkansas. Like most grain elevator operators, Delta engagеs in at least three separate businesses. First, it acts as a broker or middleman for local farmers’ grain sales. Farmers ship grain to the facility for testing, grading, and storage. The elevator then finds buyers for the grain and takes a sales commission on the highest available price.
Second, the elevator also makes outright purchases of local farmers’ harvested crops, including wheat. Purchased crops are stored in bins that are sorted by commodity, such that wheat is stored separately from corn, corn from soybeans, and so on. The facility receives and stores approximately 50,000 bushels of wheat per year. Although the facility receives wheat from many sources, all wheat received is placed in the same storage bin. As a sideline of its grain-storage business, Delta Cotton sells bags of stored wheat as “feed wheat,” intended not to be propagated as crops but to be fed to farm animals. Feed wheat is sold in 50-pound bags that are generally labeled “Delta Co-Op feed.”
Finally, Delta Cotton also operates as a retailer of protected variety seed, in which capacity it sells—among many other varieties—Syngenta‘s protected Coker 9663 seed.
At issue in this case is the sale by Delta Cotton of three 60-pound bags labeled “feed wheat” that allegedly contained protected Coker 9663 seed. In 2001, a man hired by Syngenta Seeds’ law firm entered Delta Cotton‘s facility and asked whether Delta had “any wheat I can plant for deer plots.” The store provided him with three bags for $3.50 each. The bags were labeled “Delta Cotton Co-Operative” and “Feed Wheat.” Order at 3; J.A. at 2880. The bags were then provided to Dr. Brent Turnipseed, an agronomist, for identification testing. Dr. Turnipseed testified that analysis indicated that the specimen provided to him, and alleged to have been drawn from those bags, contained 90% protected Coker 9663 seed.
On September 16, 2002, Syngenta Seeds filed suit against Delta Cotton in the East-
On appeal, Delta Cotton raises a host of challenges to the trial court‘s denial of its post-triаl motions. First, it asserts that Syngenta “failed to present any credible evidence on the threshold element of infringement” under the PVPA and the Lanham Act: “that the wheat bagged and sold by Defendant was the Coker 9663 Protected Variety.” Second, it asserts that because “uncontested evidence showed that the identified sales were made ... for feed purposes and not for propagation,” Syngenta Seeds could not have established the element of scienter, which Delta Cotton asserts is required for a finding of PVPA infringement. Third, it alleges that the trial court abused its discretion by excluding evidence of Delta Cotton‘s lack of knowledge of the source of the wheat, preventing Delta Cotton “from establishing a defense to damages under § 2567” of the PVPA. Fourth, it alleges that Syngenta failed to present evidence sufficient to state a cause of action under the Lanham Act. Finally, it claims that the damages awarded to Syngenta were duplicative and “grossly exceeded the damages permitted for infringement” under both the PVPA and the Lanham Act.
STANDARD OF REVIEW
In reviewing a trial court‘s denial of a motion for judgment as a matter of law1 in Lanham Act cases, this court applies the law of the relevant regional circuit—here, the Eighth. See, e.g., Thompson v. Haynes, 305 F.3d 1369, 1374 (Fed. Cir. 2002). In the patent context—to which the PVPA claims raised here are analogous—we have reviewed such denials using both regional circuit law and our own law. Compare NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1324 (Fed. Cir. 2005), cert. denied, 126 S. Ct. 1174, 163 L. Ed. 2d 1141 (2006) (applying regional circuit law), with Honeywell Int‘l, Inc. v. Hamilton Sundstrand Corp., 370 F.3d 1131, 1139 (Fed. Cir. 2004) (en banc) (applying Federal Circuit law). This inconsistency is insignificant in this case, because the standards applied by this court and by the Eighth Circuit are essentially similar. Both circuits review a district court‘s denial of a motion for judgment as a matter of law following a jury vеrdict de novo, drawing all reasonable inferences in favor of the non-moving party and assuming that the jury resolved all factual conflicts in that party‘s favor. See, e.g., Honeywell Int‘l, Inc., 370 F.3d at 1139 (stating that this court reviews denial of a motion for judgment as a matter of law without deference, viewing all evidence
DISCUSSION
I. Waiver and Scope of Appellate Review
At the close of Syngenta‘s case, Delta Cotton moved for a directed verdict on the grounds that Syngenta had failed to carry its burden of proof on both PVPA infringement and Lanham Act infringement. The trial court denied that motion from the bench. Following entry of the jury‘s verdict, Delta Cotton filed motions for new trial, judgment notwithstanding the verdict, and order of remittitur, all of which the district court denied in its order of July 5, 2005.
Under Eighth Circuit law, a post-verdict motion for judgment as a matter of law mаy not raise issues not previously raised in a pre-verdict motion. Walsh, 332 F.3d at 1158. Here, Delta Cotton‘s pre-verdict motion raised only sufficiency of the evidence as grounds, asserting that Syngenta had failed to prove PVPA infringement and had failed to prove confusion or injury under the Lanham Act. The trial court therefore limited its consideration of Delta Cotton‘s motions to those issues, and—except with respect to Delta Cotton‘s argument under
II. PVPA Claims
A. Infringement
The PVPA provides patent protection to breeders of certain plant varieties, who may acquire “the right ... to exclude others from selling the variety, or offering it for sale, or reproducing it, or importing it, or exporting it, or using it in producing ... a hybrid or different variety therefrom” for a period of twenty years.
According to the trial court‘s order, the jury issued a verdict of infringement under
The trial court erred in its construction and application of the statute. By its terms, (a)(6) has four components: (1) dispensation of a protected variety, (2) in a propagatable form, (3) without the notice that it is a protected variety, and (4) under which it was received by the dispenser. The trial court appears to have construed (a)(6) to include only the first three elements. This court, however, has construed the fourth component of (a)(6) to permit a finding of infringement only if the dispenser—here, Delta—had notice that the seed it dispensed was a protected variety, either because it received the seed in marked form or because it had independent knowledge of the seed‘s protected status. Delta & Pine Land Co. v. Sinkers Corp., 177 F.3d 1343, 1355 (Fed. Cir. 1999). Because
The trial court‘s construction of the provision erroneоusly omits a necessary element of an infringement claim under
B. Damages
Section 2567 of the PVPA provides that an owner of a protected variety cannot recover damages for infringement if “the variety is distributed by authorization of the owner and is received by the infringer without” a label containing the words “Unauthorized Propagation Prohibited” or “Unauthorized Seed Multiplication Limited,” unless the infringer has “actual notice or knowledge that propagation is prohibited or that the variety is a protected variety.”
Delta Cotton argues that because it received the Coker 9663 seeds without notice of their protected status, it is protected against a damage award for infringement by
Section 2567 is the PVPA analogue to
Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them ... may give notice to the public
that the same is patented, either by fixing thereon the word “patent” or the abbrеviation “pat.“, together with the number of the patent.... In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice.
We therefore conclude that Delta Cotton did not waive its arguments based upon the knowledge requirements of
III. Lanham Act Claims
The Lanham Act provides the framework for trademark protection. Section 1125 of the act prohibits the use in commerce of “any false designation of origin” that “is likely to cause confusion ... as to the origin, sponsorship, or approval of ... goods.”
The jury found that Delta Cotton violated
The Supreme Court has defined “reverse passing off“—also known as “reverse palming off“—as occurring when a person “misrepresents someone else‘s goods or services as his own” and has held that it is actionable under
- that the work at issue originated with the plaintiff;
- that origin of the work was falsely designated by the defendant;
- that the false designation of origin was likely to cause consumer confusion; and
- that the plaintiff was harmed by the defendant‘s false designation of origin.
Lipton v. Nature Co., 71 F.3d 464, 473 (2d Cir. 1995). The trial court‘s Lanham Act instruction to the jury mirrored these elements of proof.
On appeal, Delta Cotton argues that the evidence was insufficient to sustain a Lanham Act claim, alleging that Syngenta Seeds failed to adduce evidence of any of these four elements at trial. It argues, first, that Syngenta failed to satisfy the first element because it offered no evidence that Delta Cotton knew “that the seeds it had received from local farmers and was selling as animal feed included Coker 9663,” and that there was thus “no attempt by Delta to do a ‘reverse palm off of these expensive planting seeds as much cheaper animal feed.” Second, Delta argues that there was no evidence of “false designation” of the seed, because the feed bags in question lacked “any designation (false or otherwise) regarding the origin of the seeds,” and because there was no evidence that “the bags of feed sold to Mr. Robnett were intended for planting.” Third, Delta argues that the sales at issue could not have caused consumer confusion, in part because there was nо “evidence that Delta made any attempt to represent itself as the producer of the grain,” and “no testimony that any consumer was likely to be confused ... because Delta sales were for feed[,] not for seed.” Finally, Delta asserts that Syngenta could not
With regard to Delta Cotton‘s first two arguments, we note merely that there is no scienter requirement for Lanham Act infringement, and that the placement of words like “Delta Co-op Feed” on bags containing Coker 9663 wheat is sufficient to constitute false designation. With regard to the “harm” point, Syngenta Seeds points to testimony offered at trial indicating that “any sales of [Syngenta‘s] wheat genetics in a competitor‘s bag are harmful to Syngenta‘s reputation and overall business plan.” It also argues that “Delta‘s actions denied Syngenta ‘the advertising value of its name and of the goodwill that otherwise would stem from public knowledge of the true source of the satisfactory product.‘” Appellee‘s Br. at 36 (quoting Pioneer Hi-Bred Int‘l v. Holden Found. Seeds, Inc., 35 F.3d 1226, 1242 (8th Cir. 1994)).
Several courts of appeals have concluded that “the gravamen of the injury” in a reverse passing off case is thаt the “‘originator of the misidentified product is involuntarily deprived of the advertising value of its name and of the goodwill that otherwise would stem from public knowledge of the true source of the satisfactory product.‘”4 Waldman Pub. Corp. v. Landoll, Inc., 43 F.3d 775, 785 (2d Cir. 1994) (quoting Smith v. Montoro, 648 F.2d 602, 607 (9th Cir. 1981)); see also Roho, Inc. v. Marquis, 902 F.2d 356, 359 (5th Cir. 1990); Pioneer Hi-Bred, 35 F.3d at 1242. Here, the jury was instructed that in assessing Lanham Act liability and damages, it should consider four factors: reputational injury, injury to goodwill, “[t]he expense of preventing customers from being deceived,” and the “costs of future corrective advertising reasonably required to correct any public confusion caused by the infringement.” The trial court, in upholding the Lanham Act verdict, merely stated that the jury could have concluded that “Syngenta was harmed by the false designation of origin by being deprived of the advertising value of its name and the benefits that are associated with public knowledge of the true source of the product.” Order at 5.
We conclude that there was insufficient evidence to support the kind of reputational injury referred to in the cited precedents and in the jury instruction and order. A person who purchased Coker 9663 that was marked as “Delta Co-Op Feed” could nеver know that it had purchased the trademarked product, and could thus have drawn no conclusions about the merits or quality of that product. The parties have not directed this court to any record evidence of lost advertising value, the value of lost goodwill, or any similar injury. Given that these were the only kinds of harm on which the jury received instructions, we cannot conclude that the jury‘s verdict was supported by sufficient evidence.
The only conceivable injury Syngenta could incur from Delta‘s conduct would involve the propagation of thе misbranded Coker seed, creating a source of unregulated Coker wheat that would compete with properly branded Coker wheat. That injury, in turn, depends on whether or not the wheat was sold for propagation. The trial court excluded Delta Cotton‘s evidence that the wheat was sold for feed, and not for propagation. The court stated, for example, that it would not “allow evidence concerning whether Delta Cotton
In any event, Syngenta Seeds produced no evidence of any such injury at trial. Because Syngenta Seeds did not produce evidence sufficient to sustain a jury finding of injury under the Lanham Act, we conclude that Deltа Cotton‘s motion for judgment as a matter of law on the Lanham Act claim should have been granted.
CONCLUSION
For the reasons set forth in this opinion, we reverse the district court‘s denial of Delta Cotton‘s motion for judgment as a matter of law on both the PVPA and Lanham Act claims.
REVERSED
No costs.