Opinion
No. CIV. S-02-1409 FCD KJM.
July 9, 2004
MEMORANDUM AND ORDER
This matter comes before the court on defendants/counter-complainants SportFields LLC and Orion Corporation's (collectively "SportFields") motion for entry of a declaratory judgment, per the parties' stipulation and order, filed May 21, 2004 (the "Stipulation"). (Ex. A to SportFields' Mem. of P. A., filed June 4, 2004, ¶ 4.) The Stipulation provides that a declaratory judgment shall issue under SportFields' second claim for relief, declaring that plaintiffs/counter-defendants FieldTurf International, Inc. and FieldTurf Inc.'s (collectively, "FieldTurf") actions constituted unfair competition as set forth in the court's order of March 25, 2004, which resolved the parties' cross-motions for summary judgment ("SJ Order"). The parties could not agree on an interpretation of the SJ Order, and accordingly, submit to the court herein the question of the appropriate terms of the declaratory judgment. (Id.)
Because oral argument will not be of material assistance, the court orders this matter submitted on the briefs. E.D. Cal. L.R. 78-230(h).
BACKGROUND
The underlying background facts of this case are described in detail in the SJ Order and need not be repeated here. (SJ Order at 3-9.)
The court's order of March 25, 2004 granted SportFields' cross-motion for summary judgment as to FieldTurf's complaint against it, and granted in part and denied in part SportFields' motion for summary judgment on its counter-complaint against FieldTurf. In this latter regard, the court granted summary judgment in favor of SportFields as to its claim for intentional interference with prospective economic advantage ("IIPEA") (with the amount of damages to be subject to proof at trial), but denied the motion with respect to SportFields' unfair competition claim, finding that while FieldTurf did engage in "unfair competition," within the meaning of Cal. Bus. Prof. Code § 17200, SportFields had not demonstrated its entitlement to the requested injunctive relief. (SJ Order at 18-23.) Subsequently, the parties stipulated to a judgment regarding the amount of damages on the IIPEA claim (Stipulation at ¶ 2), and agreed to have the court enter a declaratory judgment with respect to the unfair competition claim (Id. at ¶ 4), thereby resolving the remainder of this case. However, the parties could not agree on the specific terms of the declaratory judgment, and thus, agreed to submit that issue to the court.
ANALYSIS
The only issue before the court is what acts by FieldTurf were found to violate Section 17200. The parties agreed in the Stipulation that the declaratory judgment would be based on the findings in the SJ Order. Accordingly, the court bases its decision on that order alone.
As a result, the court must disregard, as beyond the scope of the parties' agreement and the court's order, a fair majority of SportFields' arguments, as they assert that SportFields is entitled to relief which is tantamount to injunctive relief — the very relief this court denied SportFields in the SJ Order. Sun Microsystems, Inc. v. Microsoft Corp., 87 F. Supp. 2d 992, 1004 (N.D. Cal. 2000) (injunctive relief under section 17203 has no application to completed wrongs absent a showing of threatened future harm or a continuing violation). The court found that because "SportFields submits no evidence that FieldTurf is continuing its unfair business conduct or that the subject conduct is likely to reoccur," SportFields' motion for summary judgment as to the unfair competition claim must be denied. (SJ Order at 23:10-17.) The instant motion is not an avenue to reargue for this relief; the court will not grant SportFields injunctive relief in the guise of declaratory relief.
For example, SportFields seeks a declaratory judgment which, in part, provides that "it is unfair business practice in violation of [§ 17200] for FieldTurf, directly or through its representatives, to: (i) persuade California public entities to include its patent claims in their bid specifications; and/or (ii) mislead California public entities as to whether its specifications permit open bidding; and/or (iii) assert enforcement of patent rights in connection with patent claims which the patent holder has caused to be included in public works specifications." (SportFields' Mem. of P. A. at 7:3-9; Reply, filed June 29, 2004, at 3-4.)
In determining the appropriate terms of a declaratory judgment under Section 17200, the court considers the SJ Order as a whole, particularly because the court's discussion of the Section 17200 claim specifically references the court's prior findings. The court stated that FieldTurf violated Section 17200 "for the same reasons as described above," thus referencing the court's prior holdings of non-infringement by SportFields and IIPEA by FieldTurf. (Id. at 23:3-7.)
These prior holdings included the following findings regarding FieldTurf's unlawful conduct, which ultimately served as the basis for concluding that FieldTurf committed "unfair competition:" (1) FieldTurf sought to have its patented elements included in the specifications (Id. at 6, 20); (2) FieldTurf misled the school district into believing that those specifications were generic and permitted open bidding (Id. at 21); (3) FieldTurf's misrepresentations caused the school district to maintain the specifications as recommended by FieldTurf, despite the school district's intention that the specifications not "eliminate any bids" (Id. at 8, 15); (4) by causing the inclusion of its patent claims in the project specifications, FieldTurf sought to eliminate bidders, including SportFields (SJ Order at 20); (5) as a result of FieldTurf's actions, SportFields submitted a bid document which included FieldTurf's patented elements (Id. at 12); and (6) FieldTurf asserted a patent infringement claim against SportFields, after it was awarded the contract, which caused the school district to re-bid the project, thereby disrupting the relationship between SportFields and the school district (Id. at 9, 19).
Thus, the court found that the combination of the inclusion of the patent claims with the misleading statements rendered FieldTurf's assertions of infringement as interference with SportFields' relationship with the school district. SportFields' contentions to the contrary, that FieldTurf's misrepresentations are irrelevant, and unavailing. The SJ Order, as well as the court's order on SportFields' motion for attorneys' fees, clearly provide that the individual actions of marketing a patented product and enforcing patent rights are not wrongful in and of themselves. Rather, more sinister conduct is required to find "unfair competition." As reiterated in the court's order granting SportFields attorneys' fees:
According to SportFields, the court found "unfair competition" on the sole basis of FieldTurf's efforts to have its patented elements in the project specifications. (Mem. of P. A. at 4.) SportFields' interpretation of the SJ Order is incorrect.
FieldTurf `literally manufactured this case through its own wilful, unfair actions[,]' . . . [including] misl[eading] the school district with respect to its intention, and legal obligation, to provide an `open bidding' process; [w]rongfully caus[ing] the project specifications to include its patented elements; and when its plan failed, in that SportFields ultimately won the bid for the project, . . . [bringing] this action based on the very same alleged infringement it created.
(Mem. Order, filed June 1, 2004, at 8:21-27.) This combination of facts supported the court's holding of unfair competition, and likewise serves as the basis for the declaratory judgment described below.
CONCLUSION
As provided for in the Stipulation, filed May 21, 2004, the court enters the following declaratory judgment pursuant to SportFields' second claim for relief for unfair competition:
In accordance with the court's memorandum and order of March 25, 2004, the court decrees and declares that FieldTurf violated California Business and Professions Code § 17200 by:
(1) inducing the Folsom-Cordova Unified School District to include its patented elements within the specifications for the bid on the synthetic turf project for Folsom High School; and
(2) misleading the Folsom-Cordova Unified School District into believing that other companies could bid directly on the project specifications without interfering with FieldTurf's proprietary rights; and
(3) intentionally interfering with the prospective business relationship between the Folsom-Cordova Unified School District and SportFields, after SportFields was awarded the project, by seeking to enforce its patent rights on patent claims it caused to be included in the project specifications.
The Clerk of the Court is directed to close this file. Judgment may be entered in accordance with the instant order, the court's order of March 25, 2004, and the Stipulation and Order, filed May 21, 2004.
IT IS SO ORDERED.