Opinion
11-P-444
03-21-2012
TROY INDUSTRIES, INC. v. SAMSON MANUFACTURING CORPORATION & another (No. 3).
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, Troy Industries, Inc. (Troy), appeals from a judgment dismissing its complaint for contempt against the Samson defendants; vacating a portion of a permanent injunction against Samson; and awarding Samson $84,995.07 in attorney's fees and costs in defending against certain allegations in the complaint for contempt. We affirm.
This is the third of three cases between the parties recently argued to this court which we decide separately. The first case (the underlying case), 2009-P-1571, is Samson's appeal from a judgment awarding damages to Troy for Samson's violation of a trade secrets confidentiality agreement and violation of G. L. c. 93A. The second case, 2011-P-0443, is Samson's appeal from the denial of its Mass.R.Civ.P. 60(b) motion seeking relief from judgment in the underlying case.
Background. Following the jury verdict in the underlying case in June, 2007, the trial judge found, after hearing, that injunctive relief was necessary to protect Troy from Samson taking 'unfair advantage' of its breach of the confidentiality agreement between the parties, and issued a permanent injunction on June 25, 2007. On July 18, Troy filed a complaint for contempt in the Superior Court alleging Samson was not complying with the permanent injunction. After a two-day bench trial, the judge, on December 20, 2007, vacated an amendment to the injunction previously made on July 27, and dismissed the complaint. After a separate proceeding and hearing, the judge, on January 9, 2008, allowed in part Samson's motion for attorney's fees under G. L. c. 231, § 6F. A further hearing was held to determine the amount of fees and costs to be awarded, and the judge issued an order in favor of Samson on March 11, 2008, for $84,995.07. Judgment was entered on April 3, 2008.
Troy's appeal from the judgment was not docketed in this court until March 14, 2011. Its appeal is limited to challenging the judge's findings that none of the three products sold by Samson, the DI, the K-Rail, and the Star-C, violated the terms of the amended permanent injunction.
As explained in Troy Industries, Inc. v. Samson Mfg. Corp., 76 Mass. App. Ct. 575 (2010), Troy filed a notice of appeal from the April 3, 2007, judgment on May 14. Recognizing that the notice of appeal was untimely, Troy unsuccessfully sought an extension of time in the Superior Court. After appeal, this court affirmed an order of a single justice allowing Troy to file a late notice of appeal. However, because Troy did not file a separate notice of appeal from the fee award under G. L. c. 231, § 6G, the court concluded there was no appeal from the § 6F award. See Bailey v. Shriberg, 31 Mass. App. Ct. 277, 284 (1991). Accordingly, no appeal from the fee award is before us, and Troy properly has not raised any issue on the fee award.
Troy's complaint alleged that Samson violated the permanent injunction by selling a DI AR-15 Rail Forend System (DI) and the K Rail Model 1 (K Rail). Because these products were not specifically identified in the permanent injunction, Troy successfully sought an amendment of the injunction at a hearing on July 27, 2007. Samson on October 23, 2007, moved for a clarification of the injunction asking for a declaration that it would not be in violation if it marketed a new handgrip design (Star-C). The judge denied the motion without ruling on the merits, but permitted Troy to add the Star-C to its complaint for contempt.
Discussion. Our review of the judge's decision on Troy's contempt complaint first considers the two criteria stated in the permanent injunction as determinative whether a Samson product violates the injunction: the product must be found to be 'substantially similar in design' to one of Troy's, and its 'design [must be] derived in significant part from confidential information or trade secrets provided to Samson under the Confidentiality Agreement.' We review the judge's findings, applying the clearly erroneous standard. Judge Rotenberg Educ. Center, Inc. v. Commissioner of the Dept. of Mental Retardation (No. 1), 424 Mass. 430, 452 (1997).
Troy complains that the judge cited no standard governing the modification of a permanent injunction. The argument is unavailing. Whether these three products came before the court for consideration under a modification or an amendment of the injunction is immaterial in view of the judge's amendment of the injunction essentially at the request of the parties, and without objection. Troy agrees that the judge's findings of fact in a contempt proceeding are examined under the clearly erroneous standard.
2. The DI. The judge found that this product, sold by Samson since 2005, was designed by Samson's general manager in anticipation of bidding on a United States military solicitation as well as an examination of products from two other companies. It significantly differed from Troy's MRF in that the DI was attached to the '[rifle] barrel by tension and was not free floating.' The judge found it therefore was not 'substantially similar' to Troy's MRF and was not 'derived in significant part from confidential information or trade secrets provided to Samson under the Confidentiality Agreement.'
Although the judge's findings are amply supported in the record (cited at length in Samson's brief at pages nineteen through twenty-seven), Troy argues that viewing the features of the DI which are identical with the MRF in 'totality,' the DI is substantially similar. Troy overlooks evidence that the DI did not have the free-floating feature which distinguishes the MRF, and which Troy claimed is superior to the drop-in types such as the DI.
The K-Rail. The judge first noted that this device 'does not fit the M16/AR 15 class of rifles, but rather is designed for the AK47 rifle,' and is attached to the barrel with clamps. Moreover, it was designed and manufactured by Gtech Manufacturing and is sold by Samson through an arrangement with Gtech. The judge concluded that the K-Rail is neither substantially similar to the MRF nor derived from information or trade secrets of Troy provided to Samson under the confidentiality agreement.
Troy baldly asserts that Samson was prohibited from assisting a third party in 'reverse engineering' a handguard embodying Troy's confidential information. The record evidence, however, as summarized in Samson's brief at pages twenty-seven through thirty-two, fully supports the judge's findings that the K-Rail is designed for a different rifle, is attached to the barrel with clamps and is not free-floating, and there was no evidence that Samson assisted Gtech in its design or manufacture. Troy did no work on products for the AK-47 during the time Samson was associated with Troy. In any event, Samson merely sells the K-Rail as a finished and packaged product.
The Star-C. While Samson conceded that the Star-C is substantially similar to the MRF, the judge found that Samson sought to design it 'from scratch' based on the ARMS rail system and the rail system made by Midwest Industries. Samson obtained a license from Swan Industries to use the barrel nut clamp attachment and the interrupted lug feature found in the 'ARMS 50M-CV S.I.R. [free-floating] system.' The design was not based on information received from Troy.
We acknowledge the receipt of a Mass.R.A.P. 16(l), as amended 386 Mass. 1247 (1982), letter from Samson after oral argument calling to our attention a Federal District Court decision in a case between Atlantic Research Marketing Systems, Inc. (ARMS) and Troy. ARMS was cited in Samson's brief in a note identifying ARMS as the licensor. The Federal District Court case has no other relevance in the present case.
Troy asserts that the Star-C is derived from its MRF and not third-party information, that the dimensions are identical and that the pieces are interchangeable with the MRF. Samson cites in its brief at pages thirty-two through thirty-eight the considerable evidence supporting the judge's findings. The dimensions of the Star-C are primarily based on the requirements of military specifications, and it was shown that because the two products attach to the rifle differently, they are not interchangeable.
Conclusion. Troy fails to show any error in the judge's findings, nor do we perceive any. We therefore affirm the dismissal of Troy's complaint for contempt.
Judgment dated April 3, 2008, affirmed.
By the Court (Cypher, Vuono & Rubin, JJ.),