unjust enrichment claim preempted once patent claim fails

Medisim Ltd. v. BestMed LLC, 959 F. Supp. 2d 396 (S.D.N.Y. 2013)

Previous opinions in this case between thermometer competitors, mostly addressing trademark issues now out of the case (I skipped the patent parts).  After a jury trial, the jury awarded Medisim $1.2 million for willful patent infringement, $2.29 million for unjust enrichment, and found that BestMed infringed the copyright in Medisim’s instructions for use. The court invalidated the patent for anticipation, and also reversed the unjust enrichment award, but granted equitable relief on the copyright claim.

Unjust enrichment: this claim survived originally because the Lanham Act didn’t preempt state law claims of unjust enrichment, but the claim was “vaguely pleaded, and fell in the interstices of its claims for patent infringement, copyright infringement, unfair competition (state and federal), false advertising (state and federal), and Deceptive Acts and Practices.”  Most of these other claims were dismissed on summary judgment, and the claim for copyright damages was dismissed before the case was submitted to the jury.  The jury was charged with deciding whether “BestMed has been unjustly enriched by obtaining profits from the sale of its thermometers”; it found against Medisim on the state unfair competition claim, which overlapped significantly with the unjust enrichment claim.

Given all this, there wasn’t record evidence to support the award of damages, especially since some of BestMed’s sales occurred during an agreement between the parties, waiving a claim for unjust enrichment.  In light of the patent’s invalidity and the verdict of no unfair competition, an unjust enrichment claim couldn’t arise out of sales of the accused products after the parties’ agreement expired. “Now that Medisim’s attempt to gain a monopoly through the patent law has proved unavailing, it cannot argue that it should nevertheless receive the same protection through the state law of unjust enrichment. A quasi-contract granting Medisim patent-like protection over its invalidated patent would usurp the federal patent law, and for this reason, the jury’s verdict on unjust enrichment must be overturned.”

Plus, even if the patent were valid, the damages would have to go, “because there was no evidence to support a finding that BestMed received an incremental benefit over that compensable by the patent laws.”  Medisim didn’t present evidence of a difference, but argued that BestMed obtained an incremental benefit by misappropriating goodwill and confidential knowhow, but it didn’t have any evidence of that post-agreement.

However, Medisim was entitled to an injunction for disposal of BestMed’s copyright-infringing indstructions.  Under 17 USC § 503(b), a court may order destruction or disposition of infringing copies. Since Medisim lacked a legal remedy for its copyright claim, equitable relief was its sole remedy; BestMed didn’t contest Medisim’s right to equitable relief.