Opinion
Civ. File No. 02-4862 (PAM/RLE).
November 29, 2004
MEMORANDUM AND ORDER
This matter is before the Court on Defendant Bou-Matic, LLC's ("Bou-Matic") Motions for Post Judgment Relief. For the reasons that follow, the Motions are granted in part and denied in part.
The parties and the Court are familiar with the facts. The Court has declared Bou-Matic the owner of 41 product name marks and Plaintiff AL Laboratories, Inc. ("AL") the licensee of these 41 marks. The Court has ordered AL to pay a 3% license fee to Bou-Matic for use of those marks. Bou-Matic now seeks post-judgment relief pursuant to Federal Rules of Civil Procedure 52, 59 and 60(b).
DISCUSSION
Federal Rule of Civil Procedure 60(b) permits the Court to grant relief from a final judgment or order. In this Motion, Bou-Matic contends that several "housekeeping" matters need to be addressed by the Court. Specifically, Bou-Matic contends that (1) AL's tortious interference claim should be dismissed; (2) Bou-Matic is entitled to an accounting beginning on November 25, 2002; and (3) the final judgment should be amended to include the parties' August 2004 stipulation.
On March 10, 2004, the Court denied AL's motion for a permanent injunction on its tortious interference claim. Because AL only sought injunctive relief for this claim in its Complaint, that Order disposed of this claim. Count Five of the Second Amended Complaint is thus dismissed.
On September 9, 2004, the parties submitted a joint stipulation to amend the August 2, 2004, Order. The sales figures supplied by AL, which the Court relied on in that order, were understated and did not accurately reflect the amount due to Bou-Matic. Thus, the Court amended the judgment accordingly. Despite Bou-Matic's argument to the contrary, this amendment sufficiently modified the judgment of the Court. For clarification, the final judgment awards Bou-Matic $240,929.47, which constitutes 3% of $8,030,982.29, AL's sales from November 25, 2002, to May 31, 2004.
Finally, Bou-Matic submits that it is entitled to an accounting of AL's sales from November 25, 2002. In the August 2, 2004, Order, the Court permitted Bou-Matic "to make a monthly accounting of the payment of royalties within 30 days of each calendar month until AL completely phases out its use of the Bou-Matic product names, or at the latest through July 2005." (Aug. 2, 2004, Order at 12.) The Court took this language directly from Bou-Matic's proposed findings of fact. (See Clerk Doc. No. 154 at 5 (AL "shall make monthly accountings of sales to Bou-Matic and payments of royalties within 30 days of the end of each calendar month through July of 2005").) Now, Bou-Matic asks the Court to clarify the Order to require that AL make an accounting from November 25, 2002.
Bou-Matic claims that because AL erroneously calculated its sales figures between November 25, 2002, and May 31, 2004, Bou-Matic is entitled to an accounting to confirm that it is receiving the royalties that it is entitled to. The Court disagrees. AL provided sales figures for the period between November 25, 2002, and May 31, 2004. When AL discovered that these figures were inaccurate, it amended these figures to reflect this error. AL is bound to comply with the Court's Order and absent evidence to the contrary, is still in compliance. Thus, an accounting is unnecessary. The Court has granted Bou-Matic's requests consistent with its presentations to the Court, and therefore will not amend the August 2, 2004, Order on this point.
B. Fed.R.Civ.P. 52 and 59
Bou-Matic has also filed a motion for a new trial and/or amended findings of fact, conclusions of law, and judgment pursuant to Federal Rules of Civil Procedure 52 and 59. Rules 52 and 59 are designed for limited purposes, and motions under these rules are not intended to relitigate matters already decided by the Court. Instead, these motions are designed to correct manifest errors of fact or law. Bou-Matic seeks to revisit, for the fourth time, the Court's November 4, 2003, Order. It also claims that both the August 2, 2004, Order, and the September 21, 2004, Order, are erroneous.
Bou-Matic claims that the Court erroneously dismissed its counterclaims in the November 4, 2003, Order, without making a formal finding of fact. However, Federal Rule of Civil Procedure 56 does not require a district court to make formalized findings of fact when ruling on motions for summary judgment. See Robert Johnson Grain Co. v. Chem. Interchange Co., 541 F.2d 207, 210 (8th Cir. 1976). The Court has already denied requests for leave to file motions for reconsideration on these counterclaims. Although Bou-Matic does not seek to relitigate these claims, but rather seeks a clarification, the Court is nonetheless unpersuaded that findings of fact are now required.
"On a motion for a new trial in an action tried without a jury, the court may open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct the entry of a new judgment." Fed.R.Civ.P. 59(a). The Court may grant a Rule 59 motion when "evidence has been admitted or excluded improperly, evidence has been newly discovered, or improper actions of counsel have affected the outcome of the case." Dale Selby Superette Deli v. United States Dep't of Agriculture, 838 F. Supp. 1346, 1347-48 (D. Minn. 1993) (Doty, J.). A Rule 59 motion should not be used to "introduce evidence that was available at trial but was not proffered, to relitigate old issues, to advance new theories, or to secure a rehearing on the merits." Id. at 1348 (quoting Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1219 (5th Cir. 1986)). If the moving party relies on newly discovered evidence, this evidence must be of the kind that could not have been discovered with "reasonable diligence prior to the court's initial judgment." Id. In the context of summary judgment, "a party is expected to offer its evidence in support of or in opposition to a motion for summary judgment," otherwise the party loses "the right to have the evidence considered." Id.
Bou-Matic contends that the Court erroneously: (1) declared that AL's license to use the marks survived the bankruptcy; (2) determined that the royalty rate was 3%; (3) excluded the remaining 26 marks from its declaration; (4) excluded Hypred as a party; and (5) dismissed its counterclaim for an accounting. Although the Court believes that Bou-Matic seeks to improperly relitigate issues already determined, the Court will nonetheless address these arguments in turn.
a. License
The Court is cognizant that Bou-Matic vehemently disagrees with its interpretation of the circumstances that gave rise to the license. However, this disagreement does not amount to a manifest error of law or fact. Thus, the Court will not revisit the November 4, 2003, Order, on this point.
b. Royalty
Bou-Matic also argues that the Court erred in finding that the reasonable royalty rate was 3%. Bou-Matic's arguments merely identify its disagreement with the Court's findings, and fail to demonstrate that the findings are not supported by substantial evidence. The evidence presented at trial supports the 3% royalty determination, and Bou-Matic fails to show that the Court committed a manifest error. Bou-Matic's Motion on this point is denied.
c. Remaining 26 Marks
Bou-Matic also argues that the Court's September 21, 2004, Order was erroneous. Again, the Court has dealt with this particular issue on multiple previous occasions. The Court recognizes Bou-Matic's displeasure with the dichotomy between the 41 decided marks and the remaining 26 marks. Nevertheless, the Court will not amend any order to extend its determinations to all 67 marks. However, the Court will again iterate its reasoning.
In November 2003, the Court was presented with cross-motions for summary judgment. The issue of trademark infringement was the crucial focus of these motions. The Court concluded that AL had a license to use the product name marks at issue and was not liable for infringement. As a licensee, AL could not own the marks. Rather, the Court determined that Bou-Matic was the owner.
Bou-Matic contends that, because AL had a license to use the 67 marks listed in Exhibit C to the Amendment of the Global Purchase Agreement, the Court must therefore amend its order to declare Bou-Matic the owner of all 67 marks included in Exhibit C. According to Bou-Matic, AL could not acquire a license if Bou-Matic was not the owner.
At first glance, Bou-Matic appears correct. However, the Court's declaration that AL had a license to use the marks in Exhibit C does not likewise mean that Bou-Matic owned all 67 marks. The fundamental flaw in Bou-Matic's argument is that it failed to present evidence that it owned the 26 marks at issue. A licensor cannot license more than it owns. Thus, a valid license depends on trademark ownership. Although Exhibit C lists the 67 marks that AL had a contractual license to, AL only had a valid license on the marks that Bou-Matic actually owned.
Bou-Matic purchased the assets of DEC. The Asset Acquisition Agreement did not specifically reference all 67 marks included in Exhibit C, but nonetheless acknowledged that Bou-Matic acquired ownership of the marks that DEC owned. Trademark ownership may be assigned. However, the assignor may only transfer what it actually owns. See J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 18:15 (4th ed. 2004). Common law trademark ownership is dependent on use, and in order for Bou-Matic to have acquired ownership in all 67 marks, Bou-Matic must have demonstrated that DEC had common law ownership of all 67 marks.
Bou-Matic only presented evidence that DEC had common law ownership of 41 marks. (See Bou-Matic's Mot. for Summ. J. at 14; Oct. 3, 2003, Weber Decl. Ex. A at 63-192; Ex. B at 373-77; Ex. EE.) Even in the subsequent motions for reconsideration, Bou-Matic failed to present evidence that demonstrated that DEC owned all 67 marks, and therefore that Bou-Matic acquired ownership in all 67 marks. See McCarthy, supra § 18:15 ("assignee steps into the shoes of the assignor"). Because the evidence was limited to the 41 marks, the Court's order was limited to these 41 marks.
Moreover, Bou-Matic only claimed that AL was infringing 41 of the 67 marks. The Court's Order was therefore limited accordingly.
The Court remains unpersuaded by Bou-Matic's arguments. Bou-Matic has not presented evidence that shows that DEC owned the remaining 26 marks. Without such evidence, the Court declines to hold that Bou-Matic acquired ownership to all 67 marks. Thus, Bou-Matic's Motion is again denied on this point.
The Court was further unpersuaded by Bou-Matic's August 2004 Motion, as Bou-Matic failed to point to the specific evidence that it now relies on. It is not the obligation of the Court to sift through the record to locate evidence to support the parties' arguments. See Northwestern Nat'l Ins. Co. v. Baltes, 15 F.3d 660, 662-63 (7th Cir. 1994) (Easterbrook. J.) ("District judges are not archaeologists."); United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991) (per curiam) ("Judges are not like pigs, hunting for truffles buried in briefs");Nicholas Acoustics Specialty Co. v. H M Constr. Co., Inc., 695 F.2d 839, 846-47 (5th Cir. 1983) ("Judges are not ferrets!"). However, as Bou-Matic now points out, and the Court agrees, there is evidence that indicates that AL may be using some of the remaining 26 marks. However, this revelation does not change the effect of the September 21, 2004, Order. As the Court also noted in the September 21, 2004, Order, Bou-Matic has failed to present evidence to indicate that it acquired ownership to the remaining 26 marks. This evidence was available at the time of the summary judgment motion and should have been presented then, precluding reconsideration on this basis.
d. Hypred
Bou-Matic submits that the Court erred by declining to add Hypred as a party. The Court previously entertained Bou-Matic's Motion for Joinder and denied it. Bou-Matic's argument is now availing, and Bou-Matic's Motion on this point is denied.
e. Counterclaim for Accounting
The November 3, 2003, Order, dismissed all of Bou-Matic's counterclaims. AL's motion for summary judgment pertained to all of these counterclaims, except for Bou-Matic's claim for an accounting for the period between September 2002 and November 2002. Nonetheless, the Court dismissed this accounting counterclaim, but advised the parties that such dismissal would not preclude the Court from revisiting the issue at a later time. Although the Court believed that the parties could amicably resolve this issue, the Court realizes that this issue must be resolved now. Thus, the Court requests supplemental briefing on the finite issue of Bou-Matic's counterclaim for an accounting. Specifically, this briefing should relate to both whether the counterclaim should be reinstated and the merits of the counterclaim.
CONCLUSION
Accordingly, based on all the files, record, and proceedings herein, IT IS HEREBY ORDERED that:
1. Bou-Matic's Motion for Post-Judgment Relief pursuant to Federal Rule of Civil Procedure 60(b) (Clerk Doc. No. 209) is GRANTED in part and DENIED in part;
a. The Judgment is amended as set forth in the parties stipulation (Clerk Doc. No. 201);
b. Count Five of AL's Second Amended Complaint is DISMISSED;
2. Bou-Matic's Motion for Post Judgment Relief pursuant to Federal Rules of Civil Procedure 52 and 59 (Clerk Doc. No. 211) is GRANTED in part and DENIED in part;
a. Bou-Matic's opening brief is due December 10, 2004;
b. AL's responsive brief is due December 20, 2004; and
c. Bou-Matic's reply brief is due December 27, 2004.