Nelson v. Adams Usa, Inc. Et Al.

529 U.S. 460 (2000)

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Nature of the Case

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Facts

Ohio Cellular Products Corporation (P) held two patents relating to the method of manufacturing a foamed padding used in athletic equipment. In 1994, P sued Adams (D) for infringement. D maintains that the patents had been anticipated by prior art and were, therefore, invalid under 35 U. S. C. §102(b). The District Court ruled in Adams' favor and dismissed the infringement complaint. D moved for attorney fees and costs. The District Court granted the motion on the ground that Nelson, who was at all relevant times president and sole shareholder of P, had deceitfully withheld the prior art from the United States Patent and Trademark Office. This behavior, the District Court concluded, constituted inequitable conduct chargeable to P. D was awarded costs and fees in the amount of $178,888.51 against P. D, fearing it would not collect, moved to amend its pleading to add Nelson, personally, as a party from whom fees could be collected. D reasoned that Nelson was the flesh-and-blood party behind P. The motion was granted. D's motion sought more than permission to amend the pleading. It sought to amend the judgment, subjecting Nelson to liability as soon as he was made a party. The motion contended that an amendment to the judgment was 'necessary to prevent manifest injustice,' but it did not explain why Nelson, once joined as a party, should not be permitted to state his side of that argument. The Court of Appeals for the Federal Circuit affirmed the amended judgment against Nelson. The Federal Circuit based that conclusion on Nelson's failure to show that 'anything different or additional would have been done' to stave off the judgment had Nelson been a party, in his individual capacity, from the outset of the litigation. This appeal resulted.