McNamee Hosea Partner John Lynch Prevails in Precedent Setting Patent Case
Daily Record, The (Baltimore), Dec 3, 2009 by Caryn Tamber
A businessman who designed an aluminum rail cannot sue his "just- in-time" supplier for conversion after it sold the rails to a competitor, the state's second-highest court has held.
The Court of Special Appeals affirmed the dismissal of James Burger's claims against the supplier, E-J Enterprises Inc.
Burger, who owns Brass Metal Products Inc., could not establish conversion because he failed to show a property interest in the designs, which had never been patented.
That's because the designs were entirely generic, said lawyer John P. Lynch, who argued the case for E-J Enterprises.
"There was never anything unique, therefore never anything protectable," Lynch said.
The appellate court rejected Burger's argument that mere "custom and usage" can sustain a conversion claim.
Conversion occurs when someone treats another's property as his own. Proving it requires establishing an interest in the relevant property.
"We agree with the trial court that Brass Metal did not obtain a property interest in the shapes and designs by custom and usage," Judge Kathryn Grill Graeff wrote Monday for a three-judge panel. "Brass Metal cites no case holding that custom and usage in an industry can create property rights that give rise to a conversion claim."
According to the opinion, Brass Metal and E-J Enterprises had an agreement whereby E-J bought Burger-designed railings straight from aluminum mills, stored them and sold them to Brass Metal as needed.
In 2006, E-J sold Burger-designed railings to a company called Parthenon Installations, which was owned by a Brass Metal salesman. Parthenon provided installation services for Brass Metal's clients.
Burger then discovered that Parthenon had set up a manufacturing operation using his designs.
Burger sued, alleging conversion, interference with contracts, injurious falsehood and constructive fraud, among other counts.
At a jury trial in 2008, Burger acknowledged that he never patented his railing designs because it was "very easy" to design them.
At the close of the plaintiff's case, Howard County Circuit Judge Cathy H. Serrette granted E-J's motions for judgment on all counts.
In rejecting Burger's "custom and usage" argument, the Court of Special Appeals held that Burger had not proven that it is industry custom that the person who creates a die has a property right in shapes created from that die.
The court also rejected Brass Metal's other appellate arguments, including Burger's claim that Serrette should have let him use the term "trade secret" in front of the jury.
"By conceding that it did not 'need to use' the term 'trade secret,' and that using the term was 'not important,' Brass Metal abandoned its claims regarding use of the ... term, and it is not preserved for appellate review," Graeff wrote.
Additionally, Burger had not asserted a cause of action for misappropriation of trade secrets, so it was proper for the judge to bar the term, Graeff wrote.
The case stands for the proposition that only certain creations are worthy of legal protection, E-J lawyer Lynch said.
"The reason it's a published case is, the court sees that there needs to be clarification that you don't have rights in everything you create unless there is something special about the creation itself," said Lynch, of McNamee, Hosea, Jernigan, Kim, Greenan & Lynch P.A. of Greenbelt and Annapolis. "If so, you need to do something to protect it."
Columbia lawyer Robert G. Landolt, who argued the case for Brass Metal, did not return calls for comment.
WHAT THE COURT HELD
Case: Brass Metal Products Inc. v. E-J Enterprises et al., CSA No. 1580, Sept. Term 2008. Reported. Opinion by Graeff, J. Filed Nov. 30, 2009.
Issue: Did the circuit court err in (1) granting a defense motion for judgment on conversion, (2) precluding appellant from using the term "trade secret," or (3) finding that the Maryland Uniform Trade Secret Act preempted a common law claim for misappropriation of trade secrets?
Holding: No; affirmed. Property rights sufficient to support a conversion claim cannot be established by custom and usage.
Counsel: Robert G Landolt for appellant; John P. Lynch for appellee.