Federal Evidence Review

Trial judge did not err in granting judgment as a matter of law (JMOL) to a defendant accused of infringing plaintiff's patent, even if the court based that judgment on admission of excludable hearsay, because "the Federal Rules of Evidence do not generally apply when the judge is acting as a fact-finder because a judge can presumably exclude improper inferences," in Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607 F.3d 817 (Fed. Cir. June 11, 2010) (Nos. 2009-1102, 2009-1118)

A mistaken or incorrect admission of evidence under the Federal Rules of Evidence seems rarely a cause for reversal of a proceeding in which the trial judge acts as the finder of fact. This proposition was recently noted by the Federal Circuit in assessing the appeal of a plaintiff who claimed to be the inventor of a "magnetic snap fastener commonly used in women's handbags." Advanced Magnetic Closures, Inc., 607 F.3d at 822. The trial court declined to enforce the claimed patent, finding it to have been procured by inequitable conduct.

In the case, plaintiff Advanced Magnetic Closures (“AMC”) sued Rome Fastener Corp., and other entities (collectively called “Romag”) for allegedly infringing AMC's patent by offering a magnetic snap fastener "with rivet holes that increase magnetic attraction," (the “′773 patent”). After the plaintiff finished presenting its case in chief at trial that it possessed a patent and that it had been infringed, the trial judge granted the defendant's motion for judgment as a matter of law (JMOL). The trial judge found that the plaintiff was guilty of inequitable conduct. According to the trial judge, the evidence showed that the plaintiff knew that he was not the inventor of the claimed invention and took steps at trial to "hide" this from the court. The court employed the doctrine that where a claimed inventor deliberately conceals a true inventor's involvement in his patent application, this results in inequitable conduct which makes the patent unenforceable. Accordingly, the trial court granted judgment for the defendant and assessed attorney's fees and costs against the plaintiff. Advanced Magnetic Closures, Inc., 607 F.3d at 826. The plaintiff appealed.

The Federal Circuit affirmed, accepting the trial judge's finding that the president of the plaintiff company (Bauer) that owned the patent "intended to deceive the Patent and Trademark Office (PTO) by claiming that he invented" the fastener. In addition, the trial judge's conclusion that the [plaintiff's] "president was not the true inventor," supported this result, along with evidence that the plaintiff was not able to explain his invention during a deposition and that he provided difficult-to-follow explanations of the experiments he performed in conceiving of the invention. Even the multiple sketches the plaintiff presented of his invention, he later had to admit that the sketches were “reconstructed.”Advanced Magnetic Closures, Inc., 607 F.3d at 830.

In upholding the trial judge, the circuit noted a difficulty. One basis for challenging the trial court's findings was the plaintiff's claim that "the district court erred in placing weight on (the alleged inventor) Mr. Riceman's testimony for the defendant. The witness was involved in the development of the invention and he claimed to have invented it. In a dispute with the defendant the witness had earlier worked out an agreement providing the plaintiff the right to claim inventorship, rather than the witness. The plaintiff alleged that the Riceman statements were hearsay and that the court never entered them into evidence. Advanced Magnetic Closures, Inc., 607 F.3d at 831.

On appeal, the circuit rejected the argument that admission of inadmissible hearsay evidence is ground for relief:

[T]he court never admitted the hearsay testimony into evidence and because Mr. Riceman's testimony is unreliable. As for admitting the testimony as evidence, AMC fails to recognize that in the Second Circuit, as in other federal courts of appeals, the Federal Rules of Evidence do not generally apply when the judge is acting as a fact-finder because a judge can presumably exclude improper inferences.

Advanced Magnetic Closures, Inc., 607 F.3d at 831 (citing Bic Corp. v. Far E. Source Corp., 23 Fed.Appx. 36, 39 (2d Cir. 2001) (“[T]he admission of evidence in a bench trial is rarely ground for reversal, for the trial judge is presumed to be able to exclude improper inferences from his or her own decisional analysis.”); 11 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2885, at 454-55 (2d ed. 1995) (“In nonjury cases the district court can commit reversible error by excluding evidence but it is almost impossible for it to do so by admitting evidence. The appellate court will disregard the inadmissible evidence and hold that its admission was harmless if there was competent evidence to sustain the findings of the court.”)).

Other circuits have reached similar results in reviewing evidentiary errors in the bench trial context. Consider for example:

• Tampa Bay Shipbuilding & Repair Co. v. Cedar Shipping Co., Ltd., 320 F.3d 1213, 1216 (11th Cir. 2003) (trial judge's evidentiary rulings given greater deference 'during a bench trial because it is presumed that the district judge will rely only upon properly admitted and relevant evidence.'))
• Schultz v. Butcher, 24 F.3d 626, 631- 32 (4th Cir. 1994) ("For a bench trial, we are confident that the district court can hear relevant evidence, weigh its probative value and reject any improper inferences.")