Tuesday, January 24, 2006

ConAgra loses at Supreme Court by 7-2 vote

The U.S. Supreme Court Monday, in a 7-2 decision, said a unit of ConAgra Foods Inc. (CAG) failed to follow the correct appeal procedures when challenging an adverse patent ruling in its dispute with Unitherm Food Systems Inc.

The opinion by Justice Clarence Thomas could lead to the reinstatement of a jury verdict against the ConAgra unit for as much as $20 million. The ConAgra unit had sued Unitherm Food Systems of Bristow, Okla., alleging patent violations of meat-browning equipment and processes used to prepare precooked food products.

Justice Thomas said the company didn't properly challenge evidence used by a federal jury in reaching a verdict against Swift-Eckrich Inc., the ConAgra unit. The ruling overturns a decision by the Washington-based Federal Circuit Court of Appeals, which handles patent cases on appeal.

From the Billings Gazette:

Unitherm Food Systems of Bristow, Okla., sued ConAgra in 2001, alleging ConAgra had obtained a patent for a meat-browning system in 1999 that Unitherm had developed and tried to sell to ConAgra.

In 2000, ConAgra sent a letter to other food companies warning them not to infringe on ConAgra's patent by doing business with anyone selling a similar process.

ConAgra argued that its patent was unique, but a jury found against the Omaha-based company, saying ConAgra had violated antitrust laws and awarding $18 million in damages to Unitherm.

ConAgra appealed, arguing there was not enough evidence to show it had done anything more than try to enforce what it thought was a valid patent. In part questioning whether enough evidence had been presented to show Unitherm had suffered economic harm, the appeals court ordered a new trial.

Unitherm appealed to the Supreme Court, arguing that ConAgra failed to properly appeal the case.

The high court agreed, ruling that ConAgra was denied a motion to dismiss the case based on insufficient evidence before it was submitted to the jury, and the company should have filed a similar motion immediately after the verdict was returned. [ie, Rule 50]


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