Moot Court
Tom Field ---------- Spring 1998
Lumen, Inc. v. Ekology, Inc.
Rulings on Motions for Summary Judgment
District Court for the District of New Hampshire
Ira Scible, J., sitting by designation.
Plaintiff, Ekology-First, Inc. (Ekology), seeks summary judgment to the effect that patent `007 held by defendant, Lumen, Inc. (Lumen), if valid and infringed, is unenforceable. Lumen opposes of course and further takes the position that the matter is inappropriate for summary judgment. Based on a counter claim, Lumen also seeks summary judgment to the effect that patent `747, which Ekology holds, be assigned to it. Both patents cover long-life, low-energy light bulbs.
While the counter claim turns on contract, the original complaint was based on patent law. Thus, this court has jurisdiction under 28 U.S.C. § 1338. It also has § 1332 jurisdiction; the amount in controversy exceeds $75,000, and Lumen's and Ekology's places of business are in Montana and New Hampshire, respectively.
I. Basic Facts
Numerous documents have been submitted. However, material facts are not in dispute. In January 1988, Lumen engineer, Iben Smart, invented an improved light bulb. One has been continuously operated for almost ten years. Consuming 20 watts of power, it casts the light of ordinary 75 watt bulbs. Still, such bulbs burn out almost instantly below 0°F and are expensive to manufacture. Patent `007, claiming these bulbs, issued in early 1990.
Failing to get their commitment to produce `007 bulbs, Smart left Lumen. In New Hampshire, he founded Ekology to manufacture environmentally-sound products. Ekology pays good wages and its nominal stockholders (principally Smart) no dividends; Smart draws only a modest salary. In July 1989, Ekology filed for what has become patent `747, claiming bulbs that function to -40°F. Based on clever strategic alliances with electric power cooperatives, Ekology bulbs were soon glowing in many parts of New England.
However, not until the summer of 1997 did their glow catch Lumen's eye. When suit was threatened, Ekology instituted this action for declaratory relief. Lumen quickly filed its counter claim for `747 assignment based on Smart's prior employment.
II. Legal Issues and Analysis
Ekology's position is that, regardless of whether its bulbs infringe the `007 patent and Lumen might have rights in the `747 patent, Lumen should be denied relief. Noting the undeniable social need for energy conservation, Ekology quotes the Federal Circuit: "If a patentee's failure to practice a patented invention frustrates an important public need for the invention, a court need not enjoin infringement of the patent." Rite-Hite v. Kelley Co. Inc., 56 F.3d 1538, 1547 (1995).
Lumen counters with an adjacent sentence from Rite-Hite: "A patent is granted in exchange for a patentee's disclosure of an invention, not for the patentee's use of the invention." Id. (emphasis added). Based on that language, it argues that failure to market does not affect its rights to have patent `007 enforced or patent `747 assigned.
Ekology argues that Lumen kept Smart's `007 bulb under a basket to avoid undermining sales of more profitable products. Moreover, it argues that Lumen's failure to market the `007 bulb is related to having considerable surplus cash invested in electric utilities and a concomitant adversity to power conservation.
Lumen responds that this is "rubbish." It advances several reasons not to take `007 bulbs to market; these prominently include high tooling costs, exceptionally serious marketing risks and a very low potential rate of return. Regarding the last, it notes that even at Ekology's essentially non-profit prices, consumers cannot break even until bulbs have been in continuous use for five or more years -- a time-span it claims to be beyond the grasp of all but a very small percentage of consumers. Lumen also points to the potential for `007 bulbs' low temperature burn-out to harm its reputation.
Ekology rebuts by pointing to its own success. In papers severely pushing the envelope of professional propriety and liberally garnished with Dilbert cartoons, its attorney claims that Lumen could have succeeded too, were it managed by competent people not "fixated on obscene" profits. For example, he tartly observes that Lumen could have avoided possible bad will by simply cautioning consumers against use of `007 bulbs below 0°F.
And so it goes. Such bitter disagreement could give rise to triable, but almost intractable, questions concerning Lumen's motivation. Yet, they seem beside the point.
When focused on this only literally light-hearted dispute, Rite-Hite does not readily illuminate the path between its duelling canons. Yet, I believe that its "frustrates an important public need for the invention," 56 F.3d 1547, language is most compelling in this particular case. The real reasons for Lumen's failure to market, should any process be capable of making them reasonably discernible, hence become irrelevant. Lumen, for whatever reason and regardless of purity of heart of a wide assortment of people involved in its ultimate decision, has indisputably failed to meet a need. All that remains is to take judicial notice of the ever-increasing importance of that need; this I do.
III. Disposition and Relief
Having sworn to uphold its dignity, I refuse to subject this court to the potent risk of ridicule for interfering with Ekology's laudable efforts to meet compelling public needs otherwise unmet. I am singularly gratified to find Rite-Hite consistent, or at least not inconsistent, with my strong instincts.
Therefore, summary judgment is granted in favor of Ekology on its original complaint. Even if the `007 patent were valid and infringed by the `747 bulb, no relief appears warranted. Hence, I see no useful purpose served by addressing whether this is so.
Further, Lumen's counter-claim fails for essentially the same reason. It has advanced no compelling legal basis for presently disturbing the status quo. Were the `747 patent to be re-assigned, it could not be enforced until such time as Lumen were to see fit, itself, to serve the public need now admirably met by Ekology.
Finally, concerned that Ekology's counsel might perceive in this a reward for marginally appropriate behavior, I hasten to assure him otherwise.
To students: Lumen has appealed. Needless to say, Ekology has retained new counsel. You will argue in pairs of two, one person representing each party.
Field's course page
Revised 8/4/98
URL: http://www.piercelaw.edu/tfield/mtct/mtct98.htm