Covidien LP v. Esch

United States Court of Appeals
For the First Circuit
No. 20-1515
COVIDIEN LP; COVIDIEN HOLDING INC.,
Plaintiffs, Appellants,
v.
BRADY ESCH,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]
Before
Howard, Chief Judge,
Thompson, Circuit Judge,
and Gelpí, Chief District Judge.
Mark C. Fleming, with whom Tasha J. Bahal, Adam M. Cambier,
Matthew C. Tymann, and WilmerHale LLP were on brief, for
appellants.
Lita M. Verrier, with whom Andrew L. Margulis and Ropers
Majeski, PC were on brief, for appellee.
April 8, 2021
 Of the District of Puerto Rico, sitting by designation.
GELPÍ, Chief District Judge. This appeal arises from a
contract action under Massachusetts law brought by appellants
Covidien LP and Covidien Holding Inc. (collectively, "Covidien")
against appellee Brady Esch, a former employee who assigned medical
device patent rights to a company he subsequently founded.
Following a nine-day trial, a jury found that Esch incurred in a
breach of confidential information and awarded Covidien
$794,892.24 in damages. Next, Covidien moved for a declaratory
judgment asking that Esch be required to assign to it the
inventions he made subsequently. The district court denied this
request. Before this Court is Covidien's appeal of said post-
trial ruling. Finding that the district court did not abuse its
discretion, we affirm.
I.
A. Factual Background
Brady Esch began working for Covidien, a global
healthcare company and manufacturer of medical devices and
supplies, in 2009 when Covidien acquired his former employer, VNUS
Technologies. In December 2009, Esch signed a Non-Competition,
Non-Solicitation, and Confidentiality Agreement ("Employment
Agreement"). During his employment, Esch's work focused on the
field of Endovenous ("EV") products or venous radiofrequency
("RF") ablation devices, which are used to treat superficial venous
disease, commonly known as "varicose veins." Esch spent much of
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his time at the company working with an eight-person team on a
confidential global project, Project Cattleya, aimed at developing
features for a new medical device to treat varicose veins.
In 2013 Esch, who then served as Director of Global
Strategic Marketing, was terminated and signed a Separation of
Employment Agreement and General Release ("Separation Agreement").
The same incorporated provisions from Esch's Employment Agreement.
Subsection II.A of the Employment Agreement provides
that Esch must disclose to Covidien all "Inventions" created during
his employment with the company or within one year after leaving
the company. Specifically, it reads:
You shall promptly disclose to the Company all
Inventions (as defined in Subsection II.B),
which are made or conceived by you, either
alone or with others, during the term of your
employment with the Company, whether or not
during working hours. Such Inventions directly
or indirectly relate to matters within the
scope of your duties or field of
responsibility during your employment with the
Company, or are aided by the use of the time,
materials, facilities, or information of the
Company. You will not assert any rights under
or to any Inventions as having been made or
acquired prior to being employed by the
Company unless such Inventions have been
identified to the Company in writing on a
document signed by you at the time of hire. In
addition, in order to avoid any dispute as to
the date on which Inventions were made or
conceived by you, they shall be deemed to have
been made or conceived during your employment
with the Company if you take affirmative steps
to have them reduced to practice either during
the term of your employment or within one year
after separation from employment.
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Subsection II.B of the Employment Agreement broadly defines
"Invention" to include "whether or not patentable or
copyrightable, the conception, discovery or reduction to practice
of any new idea, technology, device, method, design, trade secret,
composition of matter or any improvement thereto." Subsection
II.C of the Employment Agreement further provides that Esch:
[A]gree[s] that all Inventions that are, or
are deemed to be, made or conceived by [him]
during employment with the Company shall, to
the extent permitted by law, be the exclusive
property of the Company and [he] hereby
assign[s] to the Company [his] entire
worldwide right, title, and interest in and to
any and all such Inventions.
Additionally, Subsection I.A of the Employment Agreement provides
that Esch agrees not to disclose "to any other person or
organization, or make or permit any use of" any of Covidien's
"Confidential Information," which is defined in Subsection I.B.
Section 4(d) of the Separation Agreement, in turn,
establishes that "any provisions of [the Employment Agreement]
concerning the disclosure or ownership of inventions, methods,
processes or improvements shall continue in full force and effect
and shall not be superseded by any provision [thereof]." Section
4(d) further reiterates that Esch shall continue to abide by all
previous agreements with respect to non-disclosure of
"Confidential Information."
Shortly after Esch left Covidien, in February 2014, he
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incorporated Venclose Inc. ("Venclose"), a closely-held company
that would manufacture and sell a medical device to treat varicose
veins. In March 2014, Esch filed Provisional Patent Application
No. 61/970,498 ("the '498 Patent Application") which described the
design, technology, and improvement to venous RF ablation devices.
Then, in 2015, Esch and several other inventors filed Utility
Patent Application No. 14/670,338 ("the '338 Patent Application")
and a Foreign Patent Cooperation Treaty Application with the United
States Patent and Trademark Office ("USPTO"), PCT/US2015/022849
("the PCT Patent Application") (all three collectively, "Patent
Applications"). He also filed a document with the USPTO that
assigned all rights to the '338 Patent Application to Venclose.
B. Procedural Background
In November 2016, Covidien filed a five-count complaint
against Esch in the United States District Court seeking
declaratory judgment to the effect that Esch assign his rights,
title, and interest in the Patent Applications to Covidien (Count
I). Additionally, Covidien alleged that Esch breached his
obligations under the Employment and/or Separation Agreements by
failing to disclose "Inventions" (Count II), failing to abide by
an implied covenant of good faith and fair dealing (Count III),
and disclosing "Confidential Information" (Counts IV and V).
The district court issued a preliminary injunction in
favor of Covidien, enjoining Esch and his agents from making,
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developing, manufacturing, or selling products that disclose or
use any "Confidential Information" belonging to Covidien.
From May 13 to 23, 2019, the district court conducted a
jury trial as to Covidien's claims pertaining to the Employment
and Separation Agreements. Before trial commenced, both parties
submitted their proposed special verdict forms. The verdict form
ultimately tendered by the district court to the jury posed eight
questions. Questions 1 and 2 inquired the jury whether Esch
breached his confidentiality obligations to Covidien under the
Employment and Separation Agreements, respectively. If answered
in the affirmative, the jury was next asked to decide in Questions
1A and 2A, whether Covidien had proven damages resulting from said
breach.
Question 3 of the verdict form inquired the jury whether
Esch breached his obligation to disclose "Inventions" to Covidien
under the Employment Agreement. If the jury answered "Yes" to the
same, then it would proceed to answer Question 3A regarding the
existence of damages for failing to disclose "Inventions." If,
however, the jury answered "No" to Question 3, the verdict form
directed it to answer Question 4, to wit, whether Esch breached
the implied covenant of good faith and fair dealing. If Question
4 was answered affirmatively, then the jury would move to Question
4A regarding the existence of damages. Question 5 instructed the
jury to award the amount of damages, if any, to Covidien as a
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result of Esch's breach(es). Following Question 5, the verdict
form provided the following instructions:
If you answer 3A "YES", proceed to Question 6.
Otherwise, your deliberations are complete.
Assignment of "Inventions"
6. Has Covidien proved that Mr. Esch took
steps to reduce to practice any "Inventions"
in the '498 provisional patent before November
1, 2014?
Yes ______ No ______
7. Has Covidien proved that the "Inventions"
in the '498 provisional patent are found in
the '338 non-provisional patent application?
Yes ______ No ______
8. Has Covidien proved that the "Inventions"
in the '498 provisional patent are found in
the PCT patent application?
Yes ______ No ______
On May 21, 2019, during the jury charge conference, the
district court heard arguments regarding its special verdict form.
At the time, Covidien did not object to same. However, when the
district court specifically asked Covidien "Anything else?,"
Covidien indicated that "nothing else other than just for the
record to reflect that my proposed edits [to the verdict form]
would be global as far as confidential as well as damages."
Nonetheless, the following morning, before the jury charge,
Covidien filed a written objection to the special verdict form.
The motion requested several modifications to the verdict form,
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mainly, that the jury proceed to answer question 5 even if the
jury answered Questions 1 through 4 in the negative. Notably,
Covidien's motion did not request that the jury be instructed to
answer Questions 6, 7, and 8.
The district court declined the invitation and informed
the parties:
I've adopted the – mainly just ordinary
changes that have been requested by
[Covidien]. I've used the Plaintiffs' name, as
I have also used the Defendant's name.
The Court has also listed Questions 1, 2,
and 3 under a single heading of "Contract
Claims" rather than using the separate
headings for each. And I have deleted the word
"confidential" [in] front of the word
"inventions" in Questions 3, 6, 7 and 8. Any
comments?
Covidien responded: "Nothing further from [us], Your Honor."
After the jury charge, yet before the jury was sent to
deliberate, Covidien requested at sidebar that the district court
instruct the jury to answer Questions 6, 7, and 8 regardless of a
"Yes" or "No" answer. Esch opposed, stating that the district
court's special verdict form was "logically laid out" and
"consistent with the law." The district court did not rule on the
matter and sent the jury to deliberate.
Following one day of deliberation, the jury reached a
verdict finding that Esch breached his confidentiality obligations
to Covidien under the Employment and Separation Agreements
(Questions 1 and 2) and awarded Covidien $794,892.24 in damages
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(Questions 1A, 2A, and 5). The jury also found that Esch neither
breached his obligation to disclose "Inventions" (Question 3) to
Covidien nor his covenant of good faith and fair dealing (Question
4). Given that the jury answered "No" to Question 3, it did not
have to answer Question 3A (damages resulting of a breach to
disclose "Inventions"), which in turn instructed that Questions 6
through 8 not be answered.
Before the jury was discharged, Covidien petitioned the
district court to instruct it to resume deliberations and respond
to Questions 6, 7, and 8. Covidien argued that "[t]he duty to
disclosure and the affirmative steps to reduce inventions to
practice arise under different paragraphs of the agreement" and
that it was "a matter of the objections we filed." The district
court indicated that Covidien had the verdict form "now for a day"
and "saw the instruction that [it] gave to the jury that at Page
3, in bold, it says 'If you answer 3A yes, proceed to Question 6.
Otherwise, your deliberations are complete.'" The district court
highlighted that it did not "know what could be clearer than that."
The district court further noted that the record was preserved,
however, determined it could not inform the jury that it had
"inconsistently followed [the] verdict form when [it] followed it
to the letter."
Upon conclusion of the jury trial, Covidien moved for
declaratory judgment and other post-trial relief. Regarding
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declaratory judgment, it requested that Esch be required to assign
any "Inventions" described in the Patent Applications to Covidien.
The district court issued a Memorandum and Order denying
Covidien's request for declaratory judgment, reasoning that "[t]o
agree with Covidien's logic, the jury would have had to reach the
inconsistent conclusion that Esch's publication of Covidien's
confidential information in the '338 Patent Application was
simultaneously a breach of confidentiality and in satisfaction of
his duty to disclose Inventions to Covidien." Covidien LP v.
Esch, 427 F. Supp. 3d 152, 157 (D. Mass. 2019). The district
court, in turn, considered that "the only alleged conduct relevant
to disclosure of any potential Inventions was the publication of
the '338 Patent Application," which the jury found to be a breach
of Esch's obligation of confidentiality under the Employment
Agreement. Id. at 158. Consequently, the district court held
that "[c]ommon sense dictates that neither party anticipated that
a breach of confidentiality under the Employment Agreement would,
in turn, satisfy Esch's obligation to disclose Inventions to
Covidien." Id. For such reason, Covidien's proposed reading of
the verdict was "internally inconsistent" and the jury's
"decisive" negative answer to Question 3 could only be read as a
factual finding that no "Inventions" were made that are encompassed
under the Employment Agreement. Id.This appeal followed.
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II.
On appeal, Covidien posits that the district court's
denial of the motion for declaratory judgment was erroneous and
warrants reversal as the evidence presented at trial established
that Esch indeed took affirmative steps to reduce an "Invention"
to practice. Moreover, Covidien argues that the jury's verdict
concerning Esch's obligation to disclose "Inventions" was simply
not dispositive to the assignment thereof. Alternatively,
Covidien moves to reverse the jury's verdict that Esch did not
fail to disclose "Inventions." We analyze Covidien's arguments
in turn, detailing additional facts when necessary.
A. Post-Trial Declaratory Judgment
Covidien argues that it is entitled to a post-trial
equitable declaratory judgment, pursuant to the assignment
provisions of the Employment Agreement, since the evidence
presented at trial supports its contractual breach claim.
The Declaratory Judgment Act "has been understood to
confer on federal courts unique and substantial discretion in
deciding whether to declare the rights of litigants." Wilton v.
Seven Falls Co., 515 U.S. 277, 286 (1995). A declaratory judgment
requires a trial court to make factual and legal distinctions "upon
a circumspect sense of its fitness informed by the teachings and
experience concerning the functions and extent of federal judicial
power." Id. at 287 (quoting Pub. Serv. Comm'n. of Utah v. Wycoff
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Co., Inc., 344 U.S. 237, 243 (1952)); see also MedImmune, Inc. v.
Genentech, Inc., 549 U.S. 118, 136 (2007). Thus, if
"considerations of practicality and wise judicial administration"
advise against it, a trial court may choose, in its discretion,
not to grant a declaratory judgment. Wilton, 515 U.S. at 288.
Our review of a district court's granting or withholding
declaratory judgment "is conducted under a standard slightly more
rigorous than abuse of discretion." Nat'l. R.R. Passenger Corp.
v. Providence and Worcester R.R. Corp., 798 F.2d 8, 10 (1st Cir.
1986).1 We have described this standard as a "middle ground,"
"independent" or "substantial deference" approach which is "more
rigorous than abuse of discretion, but less open-ended than de
novo review." Ernst & Young v. Depositors Econ. Prot. Corp., 45
F.3d 530, 534 (1st Cir. 1995)("We have captured a middle ground,
expressing our preference for a standard of independent review
when passing upon a trial court's discretionary decision to eschew
declaratory relief."); Fuller Co. v. Ramon I. Gil, Inc., 782 F.2d
1 We have used different terms to describe the appropriate
standard of review for denial of a declaratory judgment action.
Compare Hartford Fire Ins. Co. v. Rhode Island Pub. Transit Auth.,
233 F.3d 127, 130 (1st Cir. 2000) (applying a simple "abuse of
discretion" standard), with Díaz-Fonseca v. Puerto Rico, 451 F.3d
13, 39 (1st Cir. 2006) (applying a "slightly more rigorous" than
abuse of discretion standard)(quoting Natl. R.R. Passenger Corp.,
798 F.2d at 10). See also Rossi v. Gemma, 489 F.3d 26, 38 n.21
(1st Cir. 2007) (explaining our apparent inconsistency in post-
Wilton cases). Under either approach, nonetheless, we reach the
same result herein.
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306, 309 (1st Cir. 1986)("[I]ts determination is still entitled to
substantial deference.").
Our standard of review "requires attentively digest[ing]
the facts and the district court's stated reasons." El Día, Inc.
v. Hernández Colón, 963 F.2d 488, 492 (1st Cir. 1992); Am. Home
Assurance Co. v. Insular Underwriters Corp., 494 F.2d 317, 320
(1st Cir. 1974) ("This scope of review necessarily entails
consideration of the reasons underlying dismissal.").
Particularly, if we determine that "a different result should have
been reached, then we will reverse or modify the judgment below."
El Día, Inc., 963 F.2d at 492. Nonetheless, if "the decisional
scales tip in favor of the district court's solution, or if the
scales are in equipoise, then the judgment will stand." Id."Bluntly put, we cede some deference to the trier, especially as
to findings of fact, but we will not hesitate to act upon our
independent judgment if it appears that a mistake has been
made." Id.In this case, there are two unique procedural aspects
that add layers to our review. First, the declaratory judgment
sought by Covidien is equitable in nature. A basic tenant of
equity jurisprudence "is the ability to assess all relevant facts
and circumstances and tailor appropriate relief on a case by case
basis." Id. at 497 (quoting Rosario-Torres v. Hernández-Colón,
889 F.2d 314, 321 (1st Cir. 1989)). "Simply because
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an equitable remedy may be available does not necessarily mean
that it must automatically issue." Id. Second, and most
important, the precise form of declaratory relief sought follows
three years of litigation concluded by a nine-day jury trial.
Covidien requests that we evaluate and weigh in all evidence
submitted before the jury as to the matter. We decline to take
this path, which goes beyond the scope of our "slightly more
rigorous than abuse of discretion" standard of review and would
amount to a de novo review of the jury verdict itself.
Our "middle ground" independent approach warrants
"digesting" the procedural facts of this case and assessing the
district court's reasoning for denying a post-trial equitable
declaratory judgment. First, we must consider whether the special
verdict form and the jury instructions were adequate and whether
the trial court's decision not to modify these constitutes a
reversible error. Second, we must determine whether the district
court's factual inference that no "Inventions" were made under the
terms of the Employment Agreement is permissible and internally
consistent with the jury's verdict.
B. Verdict Form and Jury Instructions
Covidien adduces that, contrary to the district court's
rationale for denying the declaratory judgment, the jury's verdict
concerning Esch's obligation to disclose "Inventions" was not
dispositive to the assignment provisions. Such proposition is
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premised on the district court's refusal to instruct the jury, at
the charge conference as well as following deliberation, to answer
Questions 6 through 8, regardless of a "Yes" or "No" answer to
Question 3 (whether Esch breached his obligation to disclose
"Inventions"). Covidien contends that if such instruction had
been provided, we would specifically know the jury's position as
to whether Esch took affirmative steps to reduce an "Invention" to
practice.
"A verdict form must be reasonably capable of an
interpretation that would allow the jury to address all factual
issues essential to the judgment." Sánchez-López v. Fuentes-
Pujols, 375 F.3d 121, 134 (1st Cir. 2004) (quoting Sheek v. Asia
Badger, Inc., 235 F.3d 687, 699 (1st Cir. 2000)). "To determine
whether the issues were fairly presented to the jury, we examine
the [district] court's instructions and the wording of the verdict
form as a whole." Id.; see also Santos v. Posadas de Puerto Rico
Associates, Inc., 452 F.3d 59, 65 (1st Cir. 2006) ("[I]nstructions,
coupled with a minimalist set of verdict forms, hardly can be
considered misleading.").
A jury instruction error is reviewed de novo "if
properly preserved, [and will be] revers[ed] only if the rejected
instruction was substantively correct, essential to an important
issue in the case, and not substantially covered in the charge
given." Rodríguez v. Señor Frog's de la Isla, Inc., 642 F.3d 28,
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36 (1st Cir. 2011) (internal citations omitted). Pursuant to Fed.
R. Civ. P. 51(c)(2), generally, an objection is properly preserved
if made before the trial court charges the jury. Booker v. Mass.
Dept. of Pub. Health, 612 F.3d 34, 40–41 (1st Cir. 2010). We
conclude that Covidien preserved the underlying issue for
appellate review and, thus now turn to the special verdict form
itself and the instructions given to the jury.
The structure of the special verdict form gave the jury
"a simple, easily understood outlet through which to express its
conclusions" by answering "Yes" or "No" to each proposed question.
Santos, 452 F.3d at 65. It also logically identified each of Esch's
obligations regarding the Employment or Separation Agreements,
respectively. In fact, the special verdict form's final version
is nearly identical to the proposed verdict form Covidien initially
submitted. The verdict form plainly included in Questions 1, 2
and 3 language allusive to the terms of the Employment and
Separation Agreements. The inclusion of this language reasonably
directed the jury to the applicable sections of the contracts for
them to address "all factual issues essential to the judgment."
Sánchez-López, 375 F.3d at 134.
We next scrutinize the structure of the special verdict
form as to Questions 6, 7, and 8. Considered "as a whole,"
Questions 6, 7, and 8 are consistent with the applicable law in
these specific causes of actions. Section II of the Employment
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Agreement titled "Inventions" describes in three paragraphs Esch's
contractual obligation regarding the disclosure and assignment of
all "Inventions," while also defining the latter term. Paragraph
A contains both Esch's disclosure and assignment obligations.
Paragraph A specifically provides that Esch "shall promptly
disclose to the Company all Inventions" and it also establishes
that he "will not assert any rights under or to any Inventions,"
where he "made or conceived" such "Inventions" "during the term of
[his] employment with the Company." Paragraph A goes on to deem
any "Inventions" for which Esch took "affirmative steps to have
them reduced into practice" within a year of his separation from
Covidien as having been made or conceived by him during his
employment there. In Paragraph C, the assignment obligation is
restated and expanded by language to the effect that Esch "hereby
assign[s] to the Company [his] entire worldwide right, title, and
interest in and to any and all such Inventions." Given that
Section II of the Employment Agreement contains any and all
obligations relating to "Inventions" and assignment, there was no
need for the jury to answer Questions 6,7, and 8 if it found that
Esch did not breach his obligation to disclose "Inventions,"
because the jury could have decided whether there were "Inventions"
when deliberating the disclosure issue. The special verdict form
was reasonable and logically redacted and explicitly indicated
that Question 3 must be answered "under the terms of the Employment
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Agreement." This unmistakably directed the jury to consider and
weigh the evidence presented during trial according to the terms
of the entire Employment Agreement, including both the disclosure
and assignment obligations detailed in Section II.
On appeal, no one disputes that Massachusetts law
governs the terms of the Employment and Separation Agreements
dispute. Covidien LP v. Esch, 378 F. Supp. 3d 119 (D. Mass. May
6, 2019). As a matter of law, the sections of the Employment and
Separation Agreements applicable to the issue before us are
unambiguous. Balles v. Babcock Power Inc., 70 N.E.3d 905, 911
(Mass. 2017); Seaco Ins. Co. v. Barbosa, 761 N.E.2d 946, 951 (Mass.
2002); see also Edmonds v. U.S., 642 F.2d 877, 881 (1st Cir. 1981).
It is, hence, the courts' prerogative to determine their proper
interpretation. A.L. Prime Energy Consultant, Inc. v.
Massachusetts Bay Transportation Auth., 95 N.E.3d 547, 553 (Mass.
2018); see also Nadherny v. Roseland Prop. Co., Inc., 390 F.3d 44,
48–49 (1st Cir. 2004).
During its charge to the jury, the district court
sufficiently addressed the Employment and Separation Agreements
under applicable Massachusetts law. The definition of
"Inventions" and the assignment provisions were particularly
explained. The district court specifically instructed the jury
that: "An invention is reduced to practice when it has been tested
sufficiently to show that it will work for its intended purpose or
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when it is fully described in a patent application filed within
the United States Patent and Trademark Office." Such explanation
mirrors that of the Employment Agreement terms and references any
finding about affirmatively reducing to practice an "Invention" to
the descriptions detailed in the Patent Applications. Similarly,
the district court instructed the jury that information revealed
in the Patent Applications could be considered a confidentiality
breach, according to the Employment and Separation Agreements.
These instructions were not objected to by Covidien.
We hold that the objection preserved by Covidien
requesting the jury to answer Questions 6, 7, and 8 regardless of
the response to Question 3, was neither "substantively correct"
nor "essential to an important issue" and was an instruction
"substantially covered in the charge." Rodríguez, 642 F.3d at 36;
Sheek, 235 F.3d at 698. Hence, the special verdict form and the
district court's rejection of Covidien's proposed instruction do
not amount to a reversible error.
C. Inconsistent Verdict
In its Memorandum and Order denying declaratory relief,
Covidien LP, 427 F. Supp. 3d at 158, the district court explained
that the only conduct relevant to disclosing any potential
"Inventions" was the publication of the '338 Patent Application.
The district court determined that the publication of the '338
Patent Application amounted, in the jury's eyes, to a breach of
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Esch's confidentiality obligation under the Employment Agreement.
Id. The district court further reasoned that it would be
inconsistent for the jury to find that publishing the '338 Patent
Application was "simultaneously" a breach of confidentiality and
a satisfaction of Esch's obligation to disclose "Inventions" to
Covidien. Id. Thus, the verdict can only be consistently
interpreted as determinative that Esch's compliance with his duty
to disclose any potential "Invention" implies that no "Inventions"
were made under the Employment Agreement's term. If there were
no "Inventions," then there was no need to answer Questions 6, 7,
and 8 because an "Invention," as contractually defined, had to be
made for Esch to assign it to Covidien.
"Where there is a view of the case that makes the jury's
answers to special interrogatories consistent, they must be
resolved that way. For a search for one possible view of the case
which will make the jury's finding inconsistent results in a
collision with the Seventh Amendment." Atlantic & Gulf
Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355, 364 (1962).
Moreover, "it is the duty of the courts to attempt to harmonize
the answers [to special interrogatories], if it is possible under
a fair reading of them." Gallick v. Baltimore & Ohio R. Co., 372
U.S. 108, 119 (1963); see also Santiago-Negrón v. Castro-Dávila,
865 F.2d 431, 443 (1st Cir. 1989) ("[W]e must determine . . .
whether the first answers [to special interrogatories] can be made
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consistent under any view of the case.").
When considering apparent inconsistent verdicts, we note
that other Circuits have required, on Seventh Amendment grounds,
that district courts sitting in equity follow necessary factual
implications in jury verdicts and that any findings not necessarily
implied by, but nonetheless consistent with, the verdict is left
to the trial judge. See, e.g., Teutscher v. Woodson, 835 F.3d
936, 944 (9th Cir. 2016) ("[I]n a case where legal claims are tried
by a jury and equitable claims are tried by a judge, and those
claims are based on the same facts, the trial judge must follow
the jury's implicit or explicit factual determinations in deciding
the equitable claims." (internal quotations marks, citation, and
alteration omitted)); Miles v. Indiana, 387 F.3d 591, 599-600 (7th
Cir. 2004) (similar); Bartee v. Michelin N. Am., Inc., 374 F.3d
906, 912-13 (10th Cir. 2004) (similar).
Covidien relies on this logic and advances that the
district court erred because the jury technically could have found
that Esch both violated the confidentiality provision by
publishing the Patent Applications and satisfied his duty to
disclose any "Inventions" that were described therein by doing the
same. In other words, Covidien argues that the district court was
not bound by the verdict and had discretion to makes its own
factual finding since the jury's decision does not necessarily
reflect a determination that Esch did not make an "Invention."
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We disagree. The jury's verdict did necessitate a
finding that there were no "Inventions" and was not simply a
plausible inference among various that the district court could
have drawn. The district court was required to attempt to
reconcile apparent inconsistencies in the jury verdict. See
Thomas & Betts Corp. v. New Albertson's, Inc., 915 F.3d 36, 59
(1st Cir. 2019). See also Gallick, 372 U.S. at 119 ("[W]e must
attempt to reconcile the jury's findings, by exegesis if
necessary"). Covidien has not made, and has therefore waived, any
argument that the district court arrived at an erroneous conclusion
that it was legally impossible for Esch to fulfill his duty of
disclosure by violating his duty of confidentiality. See Rivera-
Díaz v. Humana Ins. of Puerto Rico, Inc., 748 F.3d 387, 391 (1st
Cir. 2014) ("[A]bsent the most extraordinary circumstances, legal
theories not raised squarely in the lower court cannot be broached
for the first time on appeal.") (quoting Teamsters Union, Local
No. 59 v. Superline Transp. Co., 953 F.2d 17, 21 (1st Cir. 1992)).
Likewise, Covidien contests the district court's
reasoning that the '338 Patent Application was the only disclosure
that the jury could have found. However, public disclosure by way
of the '338 Patent Application was the only hypothetical
alternative jury finding on disclosure that Covidien raised in its
memorandum of law before the district court. Since Covidien
"makes no argument . . . that any error here constituted plain
- 22 -
error," it also waived said argument. Thomas & Betts, 915 F.3d
at 58 (citing U.S. v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990)).
Finally, the potential jury verdict inconsistency we are
asked to determine is not between two irreconcilable jury findings.
Rather, it is one between a jury finding of breach of
confidentiality and the district court's inference about the
jury's finding — a satisfaction of the disclosure obligation —
that tacitly found no "Inventions" were made. Although Covidien
has presented an alternate reading to the jury's findings, this
also does not entail that "a different result should have been
reached." El Día, Inc., 963 F.2d at 492.
The district court's inference was not only permissible
but also necessary and consistent with the jury's findings as to
the confidentiality and disclosure obligations contained in the
Employment and Separation Agreements. As previously discussed,
the jury instructions meticulously tied together the concepts of
breach of confidentiality and duty to disclose "Inventions" under
the Employment and Separation Agreements vis-à-vis the submissions
and information detailed in the Patent Applications. In this
regard, we confer considerable discretion and deference to the
district court's explanation and common-sense approach and
reasoning. "[T]he scales are in equipoise" or of little weight,
and the ruling must stand. Id.- 23 -
Conclusion
The district court found that the jury's decision not to
answer Questions 6, 7, and 8 was "decisive" to its ruling. We
hold that the district court did not abuse its discretion in
denying Appellants' post-trial declaratory judgment request.
For the foregoing reasons, we affirm the district
court's judgment entered on December 13, 2019.
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