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By W. Samuel Niece
Howrey LLP
The U.S. Court of Appeals for the Federal Circuit has addressed the interplay between California's "or equal" requirement in public contracts and the right of a patent holder to prohibit others from offering an infringing product for sale. FieldTurf International, Inc. v. Sprinturf, Inc., 2006 WL 44166 (Fed.Cir. 2006). The full text is available at www.cafc.uscourts.gov/opinions/04-1553.pdf.
Under U.S. patent law, "whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States... infringes the patent." 35 USC §271(a) [emphasis supplied].
California Public Contract Code §3400 prohibits California public entities from drafting specifications for construction projects "(1) in a manner that limits the bidding, directly or indirectly, to any one specific concern, or (2) calling for a designated material, product, thing, or service by specific brand or trade name unless the specification is followed by the words 'or equal' so that bidders may furnish any equal material, product, thing, or service."
FieldTurf held two patents on synthetic turf, U.S. 5,958,527 and U.S. 6,338,885. FieldTurf installed its patented synthetic turf in Mahany Regional Park in Roseville. Representatives of the Folsom-Cordova Unified School District saw the FieldTurf and wanted to use it on the District's new Folsom High School. The district's architect first specified "Pro series soccer synthetic grass system manufactured by FieldTurf... or approved equal." The specification then went on to include features that characterized the FieldTurf product, including the fiber denier, fiber height, fiber tufting, porous secondary backing, and infill layering system of sand and rubber.
FieldTurf's competitor, SportFields, complained to the District that the specifications effectively sole-sourced the FieldTurf product to the exclusion of SportFields' product, PerfecTurf, which did not employ a sand and rubber layered infill or have a porous secondary backing. In response, the District amended its specification, removing the reference to "FieldTurf or equal" but adding requirements that the infill include cryogenic rubber and that the sand must be "dust free, round silc sand," both of which were elements of the FieldTurf patent claims.
SportFields submitted the low bid. FieldTurf wrote to SportFields and the District, arguing that SportFields' bid was an infringing "offer to sell" under 35 USC §271. The District rejected all bids and reissued the specification, replacing the sand and rubber infill with an all-rubber infill, which was different from the sand and rubber infill of the FieldTurf patents. SportFields again was the low bidder and was awarded the contract.
FieldTurf sued SportField for patent infringement based upon the first (rejected) bid, alleging it was an offer to sell under 35 USC §271.
The trial court held that SportFields' initial bid was not an offer to sell under 35 U.S.C. §271. FieldTurf International, Inc. v. Sprinturf, Inc., 395 F.Supp.2d 929 (E.D.Cal. 2004).
SportFields' bid was not an offer to sell the FieldTurf patented product because SportFields intended to sell its PerfecTurf non-infringing product under the "or equal" provisions of California Public Contract Code §3400. The Federal Circuit affirmed.
Rather than focus exclusively on SportFields' bid, the courts looked to all the surrounding circumstances. The courts found that SportsFields' bid was not an offer to sell the FieldTurf patented product but rather SportsFields' non-infringing PerfecTurf product via a post-bid request for substitution and that SportsFields had communicated this intent to the District before submitting its bid.
The trial court cited California Public Contracts Code §3400 as an alternative basis for finding that SportsFields did not infringe, in that a court "must construe bid documents to allow submission of substitute products, and therefore, SportsFields cannot be held to have infringed FieldTurf's patent merely by assertion of a bid which incorporated FieldTurf's patented elements." The Federal Circuit, on the other hand, decided the case on strictly patent law considerations and did not reach this issue.
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For more information about the issues covered in this report, please contact W. Samuel Niece in our San Francisco office at 415-848-4979 or at nieces@howrey.com or contact your Howrey attorney. For more information about Howrey's Construction Practice Group, click here.
©2006 Howrey LLP
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