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There Should Be No Secret about Scope of Trade Secret Injunction

by | May 26, 2022 |

In the context of an interlocutory appeal, the US Court of Appeals for the Federal Circuit vacated a portion of a preliminary injunction in a case involving alleged misappropriation of trade secrets for failing to provide sufficient specificity as to what it prohibits. Carl Zeiss Meditec, Inc. v. Topcon Medical Systems, Inc. et al., Case No. 2021-1839 (Fed. Cir. May 16, 2022) (Hughes, Linn and Stoll, JJ.)

Topcon Medical filed an interlocutory appeal, seeking vacatur of a preliminary injunction granted by a district court in the Northern District of California. Topcon asserted that the injunction failed to satisfy Federal Rule of Civil Procedure 65(d) because it did not provide an adequate description of what specific acts are prohibited. Topcon argued that the injunction is ambiguous as to whether it applies to all of its platform or only to a certain module. Topcon further argued that the ambiguities are exacerbated by the district court’s misunderstanding of evidence presented from a declaration and deposition in the case and the court’s use of that evidence to draw conclusions about the misappropriation of trade secrets.

The Federal Circuit agreed with Topcon that the preliminary injunction failed to provide any notice required under Rule 65(d) as to whether—and to what extent—Topcon’s continued use of the platform and modules is outlawed. As to the basis for the injunction, the Court noted that “the district court did not address whether all [the] information [asserted in the complaint] was confidential, or whether it was acquired, used, or disclosed improperly. Second, as Topcon convincingly argues, the scope of the asserted trade secrets captured under CZMI’s argument is staggering, including unspecified software architecture, unnamed user interfaces, generically noted research, and other information simply identified as trade secrets.” The Court explained that Rule 65(d) expressly requires that the injunction order must “describe in reasonable detail—and not by referring to the complaint or other document—the act or acts restrained or required.” The Court further agreed with Topcon that the district court’s reference to declaration evidence related to data that was not the data on which the misappropriation claim was based, which “exacerbate[d] the ambiguity of the injunction and in no way support[ed] extending the injunction to cover [other parts of the accused] platform or …decoder.”

Because the grant of injunction did not identify the specific acts prohibited, the Federal Circuit vacated and remanded the injunction to the district court to clarify the scope of the injunction.



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Time Bar Dismissal Saves Patent Found Unpatentable

by | May 26, 2022 |

The US Court of Appeals for the Federal Circuit dismissed an appeal, finding it lacked appellate jurisdiction to review a Patent Trial & Appeal Board (Board) decision to vacate an institution decision of inter partes review (IPR) based in part on the Board’s time bar evaluation. Atlanta Gas Light Co. v. Bennet Regulator Guards, Inc., Case No. 21-1759, (Fed. Cir., May 13, 2022) (Lourie, Stoll, JJ.) (Newman, J. dissenting)

This is the third time this case has been before the Federal Circuit. On July 18, 2012, Bennett served Atlanta Gas with a complaint alleging infringement of its patent. The district court dismissed the complaint without prejudice. More than two and a half years after service of the complaint, Atlanta Gas filed an IPR petition. Bennett argued that Atlanta Gas’s IPR petition was time barred, but the Board disagreed, instituted review of all claims and found every claim unpatentable in a final written decision. After receiving the final decision, Bennett sought sanctions for Atlanta Gas’s failure to notify the Board of Atlanta Gas’s changed parentage. On appeal, the Federal Circuit vacated the Board’s final written decision, finding the IPR time barred under 35 U.S.C. §315(b). (Bennett Regulator Guards, Inc. v. Atlanta Gas Light Co.). The Supreme Court thereafter issued its decision in Thryv, Inc. v. Click-To-Call Tech, where it held that time bar determinations are not reviewable. On remand from the Supreme Court, the Federal Circuit affirmed the Board’s unpatentability decision, did not address the time bar decision and remanded the case back to the Board to finalize its order on sanctions (Bennett II). On remand, the Board vacated its institution decision in light of the US Patent & Trademark Office’s (PTO) changed policy on time bar evaluations and declined to award the requested sanctions. Atlanta Gas appealed.

The Federal Circuit dismissed the appeal for lack of jurisdiction. Atlanta Gas argued that the Board’s decision was a final sanctions decision that is reviewable under 28 U.S.C. § 1295(a)(4)(A) and that any portion of the Board’s determination beyond the sanctions award violated the Court’s mandate in Bennett II. Bennett countered that the Court lacked jurisdiction under 35 U.S.C. § 314(d) and the Supreme Court’s Thryv decision and that the Board’s decision was not inconsistent with the Bennett II mandate. The Court agreed, concluding that it lacked jurisdiction because the Board’s decision was based in part on its time bar evaluation and, therefore, was not purely a sanctions decision. Additionally, the Court found that the time bar determination was within the scope of the mandate, albeit mooting its determination of unpatentability.

Judge Newman dissented. In her view, the sanctions order was the only issue on appeal. She also pointed out the inconsistency with the Bennett II mandate, noting the contradiction in the Federal Circuit currently mooting the unpatentability decision with the Bennett II decision finding the patent unpatentable. She explained that denial of appellate review could be seen as authorizing the Board to vacate its final decisions [...]

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Déjà vu Decision on Likelihood of Confusion

by | May 19, 2022 |

The US Court of Appeals for the Fifth Circuit affirmed a district court’s dismissal of a trademark suit that was essentially identical to a previous lawsuit that was dismissed based on a finding of lack of confusion. Springboards to Education, Inc. v. Pharr San Juan Alamo Independent School District, Case No. 21-40336 (5th Cir. May 10, 2022) (Willett, Engelhardt, Wilson, JJ.)

Springboards sells products to school districts in connection with its “Read a Million Words Campaign.” The campaign builds excitement around reading by incentivizing school children to read books through promises of induction into the Millionaire’s Reading Club and access to rewards, such as t-shirts, backpacks and fake money. Springboards’ goods may typically bear any combination of trademarks that it registered with the US Patent & Trademark Office (PTO), including “Read a Million Words,” “Million Dollar Reader,” “Millionaire Reader” and “Millionaire’s Reading Club.”

Pharr San Juan Alamo (PSJA) is a public school district in Hidalgo County, Texas. Springboards sued PSJA in 2016 in federal court, alleging trademark infringement based on the school district’s use of “millionaire”-themed reading incentive programs allegedly “using products and services bearing marks and branding identical to or confusingly similar to Springboards’ marks.” While the case was pending, the Fifth Circuit issued its decision in Springboards to Education, Inc. v. Houston Independent School District, where it found that another public school district’s summer reading program did not infringe Springboards’ trademarks. Observing the parallels between the Houston case and the PSJA case, the district court granted PSJA’s motion for summary judgment that it did not infringe any of Springboards’ trademarks. Springboards appealed.

Calling it “déjà vu all over again,” the Fifth Circuit affirmed the district court’s finding that PSJA’s use of Springboards’ marks was not likely to cause confusion. The Court explained that distinguishing between Springboards’ catalog of “millionaire”-themed goods and unaffiliated “millionaire”-themed goods that other educational entities have elected to deploy is not difficult, and unique imprints on “millionaire”-themed reading challenges are widespread in the educational field. The Court noted that as in Houston, Springboards did not allege that PSJA itself is in the business of competing with Springboards by selling its own “millionaire”-themed products to the school districts that make up Springboards’ customer base. The Court thus concluded that PSJA’s use of a million-word reaching challenge did not confuse and was not intended to confuse the sophisticated school districts that Springboards targets with its marks.

Springboards tried to distinguish the Houston case by arguing that the Houston school district had one summer reading program whereas PSJA has had several year-long reading programs and that the requirements of PSJA’s reading program are identical—and not merely similar to—Springboards’ model program. Springboards also noted that its founder worked his entire career in Hildago County (where PSJA is located) and visited schools, teachers and administrators in the district—unlike Houston, which was over 300 miles away. The Court found that these facts did not move the needle, in light of its finding that sophisticated school district customers can [...]

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Use of Negative Claim Construction is Unsound

by | May 19, 2022 |

The US Court of Appeals for the Federal Circuit vacated a district court’s noninfringement decision that was based on a negative claim construction and remanded with instructions for the district court to determine what affirmative claim construction should be adopted. Sound View Innovations, LLC v. Hulu, LLC, Case No. 21-1998 (Fed. Cir. May 11, 2022) (Prost, Mayer, Taranto, JJ.)

Sound View owns a now-expired patent directed to streaming multimedia information over public networks. Sound View asserted the patent against Hulu based on Hulu’s use of a central content server that’s connected to end users through intermediate edge servers. The asserted claim recites downloading streaming content from a buffer in a helper server to an end user while concurrently retrieving more streaming content from a content server. During claim construction, the district court construed the downloading/retrieving limitation to require using the same buffer, as opposed to two different buffers.

With that claim construction in hand, Hulu sought summary judgment that, in the edge servers of its content delivery networks, no single buffer hosts both the video portion downloaded to the client and the retrieved additional portion. In response, Sound View argued that a factual dispute remained about whether “caches” in the edge servers met the concurrency limitation as construed. The district court held, however, that a “cache” cannot be a “buffer,” and on that basis granted summary judgment of noninfringement. The district court also excluded Sound View’s expert testimony on reasonable royalty damages. Sound View appealed.

The Federal Circuit first reviewed construction of the downloading/retrieving limitation, which was reviewed de novo since the district court relied on only the intrinsic evidence. The Court first analyzed the claim, noting that its wording “reasonably suggests allocating a single buffer” and did not suggest additional buffers. When reviewing the specification, the Court found that it was not inconsistent with reading the claims requiring that the same buffer be used for both downloading and retrieving and observed that it disclosed an embodiment with only one buffer. The Court also reviewed the prosecution history, noting that the applicants added the limitation at issue to distinguish prior art and specifically emphasized the “concurrent[]” limitation. Thus, the Court affirmed the district court’s construction of the downloading/receiving limitation.

Turning to the noninfringement finding, the Federal Circuit rejected the district court’s finding that a “cache” was a different, distinct physical component when compared to a “buffer.” In particular, the Court took issue with this interpretation because it was a negative construction, and the district court never provided an affirmative construction to be used in the infringement analysis. The Court also found that the intrinsic evidence did not support determining that “buffers” and “caches” were mutually exclusive. The Court thus reversed and remanded for the district court to determine an affirmative construction of “buffer.”

The Federal Circuit next addressed the district court’s decision to exclude evidence from Sound View’s expert on reasonable royalty damages. First, the Court determined that the expert could not rely on a study performed in Sydney, Australia [...]

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The Halo Effect Won’t Cure Lack of Final Judgment

by | May 19, 2022 |

The US Court of Appeals for the Federal Circuit dismissed the appeal of a disappointed movant seeking prejudgment interest and a new damages trial after concluding that the district court did not enter an appealable final order despite closing the case nearly three years before the appeal was filed. Halo Electronics, Inc. v. Bel Fuse Inc., Case No. 2021-1861 (Fed. Cir. May 6, 2022) (per curiam) (nonprecedential).

The Halo v. Bel Fuse litigation has been percolating in the federal courts for over a decade, with multiple significant decisions that continue to reshape patent litigation practice (the most well-known of which restructured the legal framework for willful patent infringement and the recovery of enhanced damages).

Halo first sued Pulse for patent infringement in 2007. The jury found that Pulse willfully infringed Halo’s patents, however, the district court denied Halo’s motion for enhanced damages. On Halo’s appeal, the Supreme Court of the United States articulated a new test for enhanced damages.

While that appeal was pending in 2015, Halo moved the district court for award of prejudgment interest. The district court held that Halo was entitled to prejudgment interest at the state’s statutory rate and directed the parties to either agree to the amount owed or submit briefing that outlined proposed calculations. The parties submitted briefing but before the district court determined what calculation to use, Pulse filed a notice of appeal challenging the district court’s order stating prejudgment interest would be awarded and directing the briefing. The Federal Circuit held that the district court’s prejudgment interest order was not final “because the district court had not determined, or specified the means for determining, the amount of prejudgment interest.”

While Pulse’s appeal was pending in 2017, Halo renewed its motion in the district court for enhanced damages. The district court denied that motion and directed the clerk to enter judgment and close the case, but neither the court’s order nor the ensuing “judgment” addressed prejudgment interest. At the time, Halo did not move for relief from the September 2017 order and judgment.

Then, after nearly three years of inactivity, Halo filed a “Motion for Pre-Judgment Interest Award and Damages Trial” in the district court in July 2020. The district court denied Halo’s motion as untimely under Federal Rules of Civil Procedure 59(e) and 60(b), reasoning that “if Halo believed an issue remained unresolved, it should have brought that to the court’s attention then, not three years later,” adding, “the parties are entitled to rely on court judgments and move on with their affairs” and reopening the case “would be unfair to Pulse and contrary to the goal of finality of judgments.”

On appeal, the Federal Circuit held that the district court’s September 2017 judgment was not a final, appealable one because, “with respect to a final judgment for money damages, finality does not exist if the district court does not determine, or specify the means for determining, the amount of the judgment.” Because the district court never resolved the [...]

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Hit the Brakes: Experimental Use, Enhanced Damages Determinations Require Redo

by | May 12, 2022 |

The US Court of Appeals for the Federal Circuit reversed and remanded a district court decision regarding experimental use under 35 U.S.C. § 102(b) and the application of enhanced damages based on an allegedly flawed noninfringement and invalidity opinion. Sunoco Partners Mktg. & Terminals L.P. v. U.S. Venture, Inc., Case Nos. 20-1640; -1641. (Fed. Cir. Apr. 29, 2022) (Prost, Reyna, Stoll, JJ.)

Sunoco sued Venture for infringement of four patents related to blending butane into gasoline. Venture argued that certain patent claims were invalid because they were subject to the on-sale bar of 35 U.S.C. § 102(b). The district court found that the sale at issue was primarily for experimentation and that the on-sale bar did not apply. Venture also argued that certain claim terms required measuring the actual vapor pressure of the butane and gasoline, but the district court rejected this argument. The district court found infringement and awarded Sunoco $2 million in damages, which it trebled to $6 million after finding that Venture lacked a good faith belief of invalidity or noninfringement because the legal opinion Venture relied upon was flawed. Venture appealed.

On appeal, Venture challenged numerous issues, including the district court’s rejection of its on-sale bar defense, construction of two claim terms and decision to enhance damages.

The Federal Circuit first addressed the district court’s finding that the on-sale bar did not apply to certain claims of two of the asserted patents. Reviewing de novo, the Court applied the Supreme Court’s 2019 Helsinn v. Teva decision, which requires that the on-sale bar applies if the invention was the subject of a commercial sale and  ready for patenting. Analyzing the first prong, the Court looked to the contract language of the sale at issue. The inventor’s company offered to sell and install its butane blending technology at a customer’s fuel terminal more than one year before filing the patent application. The terms of the agreement required that the customer commit to purchasing at least 500,000 barrels of butane as consideration for the installation of the fuel mixing system. The Court noted that this agreement expressly described the transaction as a “sale” and did not reference any experimental purpose.

The Federal Circuit was not swayed by the lower court’s view that the contract did not require the customer to pay for the system directly, finding that a commitment to buy product in the future constituted a sale. The Court also gave little weight to the preinstallation testing terms of the agreement, finding that those tests were not experiments, but rather tests to confirm that the equipment was operating as contractually promised. Additional contract terms further cemented the Court’s view that this transaction was a sale, including language that the technology had already been “developed” and that title to the equipment transferred to the customer. The Court concluded that the sale of the system to the customer was not primarily for experimentation. The Court reversed the district court’s experimental-use determination and vacated its infringement determination, directing [...]

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Ninth Circuit Once Again Preserves Competitor’s Data-Scraping Rights

by | May 12, 2022 |

On remand from the Supreme Court of the United States, the US Court of Appeals for the Ninth Circuit reaffirmed its own 2019 opinion that preliminarily enjoined a professional networking platform from denying a data analytics company access to publicly available profiles. HiQ Labs, Inc. v. LinkedIn Corporation, Case No. 17-16783, (9th Cir., Apr. 18, 2022) (Wallace, Berzon, Berg (sitting by designation) JJ.).

Previously, the Supreme Court had granted certiorari in this case, but subsequently vacated the judgment and remanded back to the Ninth Circuit for further consideration in view of its  2021 decision in Van Buren v. United States. In Van Buren, the Supreme Court attempted to clarify the reach of the Computer Fraud and Abuse Act of 1986 (CFAA), holding that authorized computer access for arguably improper purposes likely does not constitute a violation of the CFAA. On remand, the Ninth Circuit concluded that Van Buren reinforced its determination that hiQ had raised “serious questions” about whether LinkedIn may invoke the CFAA to preempt hiQ’s claim of tortious interference.

HiQ is a data company that sells “people analytics” focused on predictive employee data. HiQ’s data is largely obtained by scraping public LinkedIn profiles with automated bots. In 2017, LinkedIn sent a demand letter to hiQ asserting that hiQ’s scraping activity was in violation of the CFAA, the Digital Millennium Copyright Act (DMCA), the California penal code and common law. HiQ immediately filed suit seeking injunctive relief and a declaratory judgment that LinkedIn could not lawfully invoke the asserted claims. Granting hiQ’s motion for the preliminary injunction, the district court ordered LinkedIn to remove, and to refrain from implementing, any technical barriers to hiQ’s access to the LinkedIn public profiles.

The Ninth Circuit stated that a plaintiff seeking a preliminary injunction must establish the following:

  • It is likely to succeed on the merits.
  • It is likely to suffer irreparable harm absent the injunction.
  • The balance of equities tips in its favor.
  • The injunction is in the public interest.

This analysis required the Ninth Circuit to focus only on whether hiQ had raised serious questions on the merits of the factual and legal issues presented. The Ninth Circuit’s re-examination of these factors was nearly identical to its 2019 holding.

Starting with irreparable harm, the Ninth Circuit found that the survival of hiQ’s business was threatened since it depends on being able to access public LinkedIn member profiles. The Court also agreed, once again, with the district court’s determination that the balance of the equities tipped in hiQ’s favor. The Court found that the privacy interests of individuals who have opted to maintain a public LinkedIn profile did not outweigh hiQ’s interests in continuing its business. On this factor, the Court noted that “little evidence” suggested that LinkedIn users who choose to make their profiles public actually maintain an expectation of privacy with respect to publicly posted information. The Court also noted that LinkedIn does not own its users’ data, since users retain [...]

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Robotic Skepticism May Not Trump Motivation to Combine

by | May 12, 2022 |

The US Court of Appeals for the Federal Circuit vacated and remanded a Patent Trial & Appeal Board (Board) decision finding the challenged claims patentable because the Board impermissibly rested its motivation-to-combine analysis on evidence of general skepticism in the field of invention. Auris Health, Inc. v. Intuitive Surgical Operations, Case No. 21-1732 (Fed. Cir. Apr. 29, 2022) (Dyk, Prost, JJ.) (Reyna, J., dissenting).

Intuitive owns a patent that describes an improvement over earlier robotic surgery systems that allows surgeons to remotely manipulate surgical tools using a controller. The patent focuses on solving the problem of swapping surgical tools by implementing a pulley system that allows tools to be swapped in and out more quickly. Auris petitioned for inter partes review (IPR) of the patent, arguing that a combination of two references disclosed every limitation of the challenged claims. Auris further argued that a skilled artisan would be motivated to combine the references to decrease the number of assistants needed during surgery. While the Board agreed that the combination of the two references disclosed every limitation of the challenged claims, it found that a person of ordinary skill in the art would not be motivated to combine the references because of general skepticism from surgeons “about performing robotic surgery in the first place.” Auris appealed.

The Federal Circuit began by explaining that the motivation-to-combine inquiry asks whether a skilled artisan “not only could have made but would have been motivated to make the combinations . . . of prior art to arrive at the claimed invention.” The Court also explained that as to the “‘would have’ question, ‘any need or problem known in the field of endeavor at the time of invention and addressed by the patent can provide a reason for combining the elements in the manner claimed.’”

The Federal Circuit concluded that generic industry skepticism about robotic surgery cannot, on its own, preclude a finding of a motivation to combine. The Court explained that although industry skepticism can play a role as a secondary consideration in an obviousness finding, such evidence must be specific to the invention and not simply the field as a whole. The Court concluded that the Board’s motivation-to-combine determination was based almost exclusively on evidence of general skepticism. Thus, the Court vacated the decision and remanded the case, directing the Board to examine the evidence using the correct obviousness criteria.

Judge Reyna issued a dissenting opinion in which he disagreed as to whether  the Federal Circuit should implement a rule that general skepticism cannot  support a finding of no motivation to combine. Judge Reyna expressed concern that the majority opinion could be understood to create an inflexible, rigid rule that the Board cannot consider evidence of skepticism toward the invention , including whether that skepticism would have dissuaded a skilled artisan from making the proposed combination. Judge Reyna also argued that notwithstanding the majority opinion, the Board did not rely solely on general skepticism, but rather provided additional explanation as to why the “no [...]

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The Perils of Falling in Love

by | May 12, 2022 |

The US Court of Appeals for the Second Circuit affirmed the dismissal of a lawsuit that sought a declaratory judgment on the basis that a notice of termination of copyright assignment under 17 U.S.C. § 203 did not validly terminate a 1983 grant of rights in the copyright. Valentina M. Peretti Acuti, et al. v. Authentic Brands Group, LLC, et al., Case No. 21-2174 (2d Cir. May 4, 2022) (Livingston, C.J.; Lynch, Lohier, JJ.)

Hugo Peretti co-wrote “Can’t Help Falling in Love,” a ballad popularized by Elvis Presley in 1961, and registered the composition with the US Copyright Office the same year. In 1983, Peretti, his wife and his daughters transferred their contingent rights and interest in the renewal term of the copyright to Julian and Jean Aberbach, predecessors-in-interest to Authentic Brands. Under the Copyright Act of 1976 (1976 Act), the renewal rights would not vest until the original term of the copyright expired in 1989 (28 years after the copyright was registered, under the Copyright Act of 1909, which applied to the initial term of the copyright because of its registration in 1961). Peretti died in 1986, before the renewal rights vested. His family registered the renewal of the copyright in 1989.

In 2014, Peretti’s widow and his daughter Valentina served a notice on Authentic Brands to terminate the 1983 assignment under 17 U.S.C. § 203. Section 203 provides for the right to terminate a grant executed by the author at any time during a five-year period beginning at the end of 35 years from the date of execution of the grant. Authentic Brands contested the effectiveness of the termination, and Valentina filed a lawsuit seeking a declaratory judgment that the termination was properly effectuated. The district court dismissed the claim, holding that Valentina had no right to terminate the assignment because the rights to the renewal term that were transferred were those of Valentina and her mother, which had vested upon expiration of the original copyright term. The district court held that § 203 provides termination rights only to post-1978 grants executed by an author and, therefore, Peretti’s widow and daughter’s rights to the renewal were not subject to termination under that provision. Valentina appealed.

The Second Circuit began with a discussion of § 203 of the Copyright Act, which applies only to grants executed by the author on or after January 1, 1978. The Court noted that the appeal hinged on the meaning of “executed by the author.” The 1976 Act provides that execution of a transfer of a copyright is not valid unless an instrument of conveyance is in writing and signed by the owner of the rights conveyed. Thus, as the Second Circuit explained, a grant “executed by the author” is a grant that is documented in writing, is signed by the author and conveys rights owned by the author.

Turning to the Peretti 1983 assignment, the Second Circuit explained that at the time the assignment was executed, ownership of the copyright in the composition [...]

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Over My Dead Body: Defendant Can’t “Wait Until He Dies” to Pay Arbitration Award

by | May 5, 2022 |

The US Court of Appeals for the Seventh Circuit reversed the district court’s interpretation of an arbitration award, finding that the defendant could not “wait until he dies” to pay a portion of the damages award. Nano Gas Techs., Inc. v. Roe, Case Nos. 21-1809; -1822 (7th Cir. Apr. 25, 2022) (Rovner, St. Eve, Jackson-Akiwumi, JJ.)

Clifton Roe invented a nozzle that disperses gases into liquids. Roe assigned the invention to Nano Gas as part of a collaboration agreement under which Roe received 20% equity and a board seat. The agreement also provided for a salary that was subject to Nano Gas’s ability to raise capital and Roe’s success in developing the invention at Nano Gas’s facility. The parties’ relationship deteriorated after the collaboration failed to produce the desired results. Roe ultimately took the machine and related intellectual property created by another Nano Gas employee and continued developing the product on his own. Arbitration ensued.

The arbitrator concluded that Roe did not have the right to remove the machine and related intellectual property from Nano Gas’s facility. The arbitrator determined that Roe should pay Nano Gas for the financial harm it suffered but also found that Roe deserved compensation for his work on the technology. In his award, the arbitrator indicated that he had initially considered giving Roe a royalty on future profits but declined to do so because Roe was a shareholder in Nano Gas and could benefit financially from the invention’s future success. The arbitrator offset Nano Gas’s $1.5 million damages award with an award to Roe of $1 million and ordered Roe to pay the $500,000 offset “in such manner as Roe chooses.” Roe was also required to return the related intellectual property or pay Nano Gas $150,000.

Nano Gas sued to enforce the award, and the district court entered judgment for $650,000 ($500,000 for the offset and $150,000 for the intellectual property). Nano Gas then filed a turnover motion for Roe’s Nano Gas stock, valued at $117,000. Roe argued that the arbitration award protected his status as a shareholder and allowed him to pay the damages “in such manner as [he] chooses.” Roe planned to pay the award with dividends from his stock and maintained that he could “wait until he die[s]” to satisfy the debt. The district court denied Nano Gas’s turnover motion, finding that Roe was entitled to remain a shareholder and could pay both awards “in such a manner as Roe chooses.” Nano Gas filed a motion to reconsider, and the court amended its order to require Roe to either turn over the stock or identify other assets to satisfy the $150,000 award. As to the remaining $500,000, the district court found that Roe could still choose how and when to pay that portion of the award. Both parties appealed.

The Seventh Circuit first addressed Roe’s argument that the arbitration award entitled him to remain a shareholder. The Court observed that the award did not stipulate that Roe would remain a shareholder indefinitely [...]

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