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Evans v. Building Materials Corp. of America

Arbitrability Claim “Wholly Groundless” Where Prior Agreement Had No Relationship to Patent and Trade Dress Claims

Evans v. Building Materials Corp. of America, 2017 U.S. App. LEXIS 9873 (Fed. Cir. June 5, 2017) (Reyna, Linn, TARANTO) (E.D. Va.: Lee) (2 of 5 stars)

Fed Cir affirms denial of motion to dismiss/stay pending arbitration. Applying Fourth Circuit law and the “wholly groundless” standard of Qualcomm, 466 F.3d 1366 (Fed. Cir. 2006), the district court correctly found the assertion of arbitrability by GAF (trade name of Building Materials Corp.) wholly groundless. The opinion declines to resolve whether the “wholly groundless” test is the only test to be used in review of arbitrability under Fourth Circuit law. GAF’s claims for patent infringement, trade-dress infringement, and unfair competition were completely unrelated to the arbitration agreement, as they involved completely different products and no issue “related to the performance or interpretation of the contract itself.” Op. at 7 (quoting Evans’ brief). The opinion also rejects GAF’s claim that some of Mr. Evans claims incorporated a dispute over whether GAF had breached various confidentiality obligations. And while some of Mr. Evans’ claims urged “willfulness and similar states of mind,” those states of mind related to GAF’s conduct regarding its allegedly-infringing products—not its state of mind relating to the confidentiality agreement.