"Not an inconsequential puff"
The decision in Frolow v. Wilson Sporting, concerning a tennis racket, is complex:
Opinion for the court filed by Circuit Judge MOORE, in which Circuit Judge CLEVENGER joins with additional views, further additional views filed by Circuit Judge MOORE, and concurring opinion filed by Circuit Judge NEWMAN.
From Judge Clevenger's "additional views":
Under the circumstances of this case, where it has been established that the 14 racket models do not satisfy the moment of inertia limitation, it may well be that the limited probative value of Frolow’s marking evidence is outweighed by the risk that Wilson would be unfairly prejudiced by its admission, or that the evidence would mislead or confuse the jury. Cf., e.g., LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 78 (Fed. Cir. 2012) (it was abuse of discretion under Rule 403 to admit a settlement agreement having proba- tive value that was “greatly outweighed by the risk of unfair prejudice, confusion of the issues, and misleading the jury.”)
From Judge Moore's "additional views" :
I write separately because I do not agree with Judge Clevenger’s claim that “Under the circumstances of this case, where it has been established that the 14 racket models do not satisfy the moment of inertia limitation, it may well be that the limited probative value of Frolow’s marking evidence is outweighed by the risk that Wilson would be unfairly prejudiced by its admission.” In this case, noninfringement was established in circumstances where the judge refused to consider some evidence of infringement—namely the marking. Mr. Frolow does not admit or concede that the accused devices do not meet the moment of inertia limitation. In fact, he introduced evidence to the contrary. There is no motion in limine in this case nor is it my job to prophesize on the outcome of a motion that has never been filed. This circuit has cautioned that “[e]vidence should be excluded until [IPBiz: sic] Rule 403 only sparingly” and that the balance under the rule “should be struck in favor of admissibility.” Blancha v. Raymark Indus., 972 F.2d 507, 516 (3d Cir. 1992). I leave the application of this law to the district court judge.
From Judge Newman's concurring opinion:
I agree that it is appropriate to remand to the district court to resolve this dispute. I write separately because the court appears to ignore, or trivialize, the power and significance of Wilson’s consistent marking of 14 racket models with Frolow’s patent number during the life of the Frolow-Wilson License Agreement. Throughout the term of the Agreement, Wilson’s position was that these marked racket models were Licensed Articles, and by so marking the rackets Wilson received the benefit of the patent. This was not an inconsequential puff—it was an announcement and admission that the rackets were Licensed Articles under the contract.
The majority opinion analogizes Wilson’s marking and payment activities to “a corporate officer admitting in a letter or at a deposition that the company’s product in- fringes a patent,” Op. at 9, yet curiously does not put these admissions in the contract context and holds that the admissions do not relieve Frolow of the obligation of proving infringement. The majority ignores that Wilson’s “admissions” were made repeatedly, over a long period of time, with commercial benefit to Wilson, and in a manner consistent with accruing royalty obligations. A trier of fact could certainly find that Wilson’s conduct was more than a trivial “extrajudicial admission,” but was direct evidence of obligations under the Agreement.
Finally, the majority’s reference to the recently amended false marking statute, 35 U.S.C. §292, is inapt. The false marking statute was a qui tam statute that provided a bounty for persons who spotted products marked with expired patents; it was amended to remedy litigation abuse. There is absolutely no relationship to the patent license and breach claims herein.
New Jersey statutes and precedent state the general rule that a party to a contract who establishes a course of performance of the contract, with no notice or objection, may be bound by that performance. Wilson’s “admissions” through marking and paying royalties on rackets are of great evidentiary weight in contract law, and place on Wilson the contract law burden of establishing that some different interpretation should now be placed on this expired contract. It is incorrect now to place on Frolow the patent-law burden of proving infringement as if there were no contract, no performance, no contrary interpretation and no reliance. Contract interpretation is a matter of contract law. Although I concur in remanding to the district court for further proceedings, I write separately to emphasize that these are proceedings under a contract that has been fully performed and whose term has fully run.