Defending Patent Litigation - Paul, Weiss, Rifkind, Wharton & Garrison
Defending Patent Litigation - Paul, Weiss, Rifkind, Wharton & Garrison
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<strong>Defending</strong> <strong>Patent</strong> <strong>Litigation</strong>:<br />
What Really Matters<br />
John E. Nathan<br />
Catherine Nyarady<br />
February 8, 2007<br />
A Continuing Legal Education Program
Table of Contents<br />
Tab<br />
<strong>Paul</strong> M. Janicke & LiLan Ren, Who Wins <strong>Patent</strong> Infringement Cases,<br />
34 AIPLA Q.J. 1 (2006) ............................................................................................ 1<br />
35 U.S.C. §§ 102, 282 and 283.................................................................................. 2<br />
Doroodian-Shoja U.S. <strong>Patent</strong> 5,388,331.................................................................... 3<br />
Gillette U.S. <strong>Patent</strong> 6,594,904 ................................................................................... 4<br />
Tseng v. Doroodian-Shoja, <strong>Patent</strong> Interference No. 104,482<br />
(B.P.A.I. October 16, 2001)....................................................................................... 5<br />
Hoganas v. Dresser Indus., Inc., 9 F.3d 948 (Fed. Cir. 1993) .................................. 6<br />
Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp.,<br />
383 F.3d 1337 (Fed. Cir. 2004) ................................................................................. 7<br />
In re EchoStar Comm. Corp., 448 F.3d 1294 (Fed. Cir. 2006) ................................. 8<br />
In re Seagate Technology, LLC, case no. 2006-M830<br />
(Fed. Cir. Jan. 26, 2007) ............................................................................................ 9<br />
MercExchange, L.L.C. v. eBay, Inc., 401 F.3d 1323 (Fed. Cir. 2005)...................... 10<br />
eBay Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837 (2006) .................................... 11<br />
z4 Technologies, Inc. v. Microsoft Corp., 434 F. Supp. 2d 437<br />
(E.D. Tex. 2006) ........................................................................................................ 12<br />
Finisar Corp. v. DirectTV Group, Inc., 1:05-cv-264<br />
(E.D. Tex. July 7, 2006) ............................................................................................ 13<br />
Paice LLC v. Toyota Motor Corp., 2006 U.S. Dist. LEXIS 61600<br />
(E.D. Tex. Aug. 16, 2006) ......................................................................................... 14<br />
Voda v. Cordis Corp., 2006 U.S. Dist. LEXIS 63623<br />
(W.D. Okla. Sept. 5, 2006) ........................................................................................ 15<br />
Sundance, Inc. v. DeMonte Fabricating Ltd., 2007 WL 37742<br />
(E.D. Mich. Jan. 4, 2007) ......................................................................................... 16<br />
Grain Processing Corp. v. American Maize-Products Co., 185 F.3d 1341<br />
(Fed. Cir. 1999).......................................................................................................... 17
Wafer Shave, Inc. v. Gillette Co., 857 F. Supp. 112 (D. Mass. 1993)....................... 18<br />
Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996)................................. 19<br />
Philips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) ............................................ 20<br />
Gillette Co. v. Energizer Holdings, Inc., 405 F.3d 1367 (Fed. Cir. 2005) ................ 21
<strong>Defending</strong> <strong>Patent</strong> <strong>Litigation</strong>:<br />
What Really Matters<br />
John E. Nathan<br />
Catherine Nyarady<br />
© <strong>Paul</strong>, <strong>Weiss</strong>, <strong>Rifkind</strong>, <strong>Wharton</strong> & <strong>Garrison</strong> LLP 2007
Introduction<br />
The patent landscape changed significantly with the establishment of the<br />
Court of Appeals for the Federal Circuit in 1982. Prior to 1982, the conventional wisdom<br />
was that the overwhelming majority of litigated patents were held invalid. Arguably, the<br />
Federal Circuit has increased the win rate for patentees. See <strong>Paul</strong> M. Janicke & LiLan Ren,<br />
Who Wins <strong>Patent</strong> Infringement Cases, 34 AIPLA Q.J. 1 (2006) (Tab 1).<br />
Moreover, the Federal Circuit has endorsed burdens of proof that favor the<br />
patentee. For example, while 35 U.S.C. § 282 (Tab 2) always put the burden of establishing<br />
patent invalidity on the defendant, the Federal Circuit clarified that this burden can only be<br />
met by clear and convincing evidence. American Hoist & Derrick v. Sowa, 725 F.2d 1350,<br />
1360 (Fed. Cir. 1984).<br />
Therefore, it is critical that defense strategy in patent litigation be thought out<br />
in advance and well executed. In fact, good patent defense starts well before infringement is<br />
even alleged. The following practical rules for defending a patent case cover a breadth of<br />
issues from pre-litigation strategies, such as filing defensive patent applications, to<br />
memorable and compelling presentation of the defense case to the jury.<br />
Rule #1: File <strong>Patent</strong> Applications<br />
<strong>Patent</strong>s are typically obtained to protect technology and/or generate royalties.<br />
This strategy should be expanded to include obtaining patents for defensive reasons.<br />
Having a patent that covers the allegedly infringing product allows the<br />
defendant to argue: “We are not infringing – we are using our patent.” This sends a<br />
powerful message to the jury.<br />
For example, Gillette successfully defended the use of its Mach3 “indicator<br />
strip” against allegations of infringement of Doroodian-Shoja U.S. <strong>Patent</strong> 5,388,331 (Tab 3).<br />
Gillette obtained its own patent that covered its indicator strip, U.S. <strong>Patent</strong> 6,594,904<br />
(Tab 4). In a patent interference, the Board of <strong>Patent</strong> Appeals & Interferences ruled that<br />
Gillette’s indicator strip technology was not covered by Doroodian’s patent and that each<br />
party was entitled to its own patent. Tseng v. Doroodian-Shoja, <strong>Patent</strong> Interference<br />
No. 104,482 (B.P.A.I. October 16, 2001) (Tab 5). The Doroodian-Shoja et al. v. Gillette<br />
infringement action later settled on favorable terms because Gillette had obtained its own<br />
patent on its indicator technology and could establish that it was for a different technology<br />
than the Doroodian invention.<br />
Having a defensive patent can also be relevant to the non-infringement<br />
analysis under the doctrine of equivalents. The Federal Circuit has stated that “the issuance<br />
of a patent on an accused product or process [is] relevant to the equivalence issue if that<br />
patent was issued on the basis of ‘unexpected results’ over the prior art. Understanding a<br />
finding of ‘unexpected results’ to be tantamount to a finding of nonobviousness, we<br />
conclude the issuance of [defendant’s] patent is relevant to the equivalence issue in this<br />
1
case.” Hoganas v. Dresser Indus., Inc., 9 F.3d 948, 954 n.28 (Fed. Cir. 1993) (citation<br />
omitted, emphasis added) (Tab 6).<br />
Finally, defensive patents may support infringement counterclaims and<br />
provide a platform to settle the case with a cross-license.<br />
A word of caution: one must be judicious in choosing which inventions to<br />
patent. Avoid creating unnecessary prior art. As a general rule, only file patent applications<br />
on inventions that are likely to have commercial value.<br />
Rule #2: Get Opinion<br />
The Federal Circuit has held that “no adverse inference that an opinion of<br />
counsel was or would have been unfavorable flows from an alleged infringer’s failure to<br />
obtain or produce an exculpatory opinion of counsel.” Knorr-Bremse Systeme Fuer<br />
Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1341 (Fed. Cir. 2004) (en banc)<br />
(Tab 7). In the post-Knorr-Bremse world, defendants are not required to produce a<br />
non-infringement opinion to defeat allegations of willful infringement.<br />
However, the absence of a non-infringement opinion is still a risk. The jury<br />
must take into consideration the “totality of circumstances.” See ABA Model Jury<br />
Instructions at 46 (2005). The Federal Circuit left open the issue of whether a jury “can or<br />
should be told whether or not counsel was consulted (albeit without any inference as to the<br />
nature of the advice received) as part of the totality of the circumstances relevant to the<br />
question of willful infringement.” Knorr-Bremse, 383 F.3d at 1346-47. 1 A primary<br />
consideration in determining willful infringement is whether the defendant had a good faith<br />
belief that the patent was invalid, unenforceable and/or not infringed. Id. at 1347. Having<br />
an opinion of counsel can help in this regard. 2<br />
To avoid liability for willful infringement, the opinion of counsel must<br />
provide a competent analysis of all relevant materials and, ideally, address all relevant<br />
1<br />
At least one subsequent Federal Circuit panel found no error in jury instructions<br />
where the defendant had not obtained an opinion of counsel and the “instructions merely<br />
directed the jury to consider whether [the defendant] sought a legal opinion as one factor in<br />
assessing whether, under the totality of the circumstances, infringement . . . was willful.”<br />
Engineered Prods. Co. v. Donaldson Co., Inc., 147 Fed. Appx. 979, 991 (Fed. Cir. 2005).<br />
2<br />
An opinion of counsel can also help in avoiding liability for inducement of<br />
infringement. Sitting en banc, the Federal Circuit recently clarified that inducement of<br />
infringement (under 35 U.S.C. § 271(b)) requires “evidence of culpable conduct, directed to<br />
encouraging another’s infringement, not merely that the inducer had knowledge of the direct<br />
infringer’s activities.” DSU Medical Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1306 (Fed. Cir.<br />
2006) (Tab 18). The Court affirmed a finding of no inducement where the defendant had<br />
obtained an opinion of counsel advising that its product did not infringe, and its owner<br />
testified that the company did not intend to infringe the patent-in-suit. Id. at 1307.<br />
2
issues. Id. at 1345. When obtaining an exculpatory opinion, it is also important to consider<br />
who will present the opinion to the jury and whether that person will be an effective witness.<br />
A related matter is the scope of waiver when an opinion is offered to prove<br />
non-willfulness. In In re EchoStar Comm. Corp., 448 F.3d 1294, 1299 (Fed. Cir. 2006)<br />
(Tab 8), the Court held that by choosing to rely on the advice of its in-house counsel,<br />
EchoStar “waived the attorney-client privilege with regard to any attorney-client<br />
communications relating to the same subject matter, including communications with counsel<br />
other than in-house counsel, which would include communications with [outside counsel].”<br />
However, outside counsel’s opinion work product that was not communicated to EchoStar<br />
was not discoverable. Id. at 1303. A footnote in the EchoStar opinion noted that waiver of<br />
attorney-client privilege may extend to advice given after the litigation begins. Id. at n4.<br />
The Court did not indicate whether such a waiver includes the work of trial counsel.<br />
The Federal Circuit has decided to hear a case en banc that might clarify its<br />
EchoStar ruling. In re Seagate Technology, LLC, case no. 2006-M830 (Fed. Cir.<br />
Jan. 26, 2007) (Tab 9). The Court has invited the parties to address (1) whether “a party’s<br />
assertion of the advice of counsel defense to willful infringement [should] extend waiver of<br />
the attorney-client privilege to communications with that party's trial counsel,” (2) the<br />
“effect of any such waiver on work-product immunity,” and (3) whether the Court should<br />
“reconsider the [1983] decision in Underwater Devices and the duty of care standard itself.”<br />
Id.<br />
Rule #3: Have A “Plan B”<br />
For a defendant in a patent litigation, having a “Plan B” in the form of an<br />
acceptable non-infringing alternative to the allegedly infringing product or process is an<br />
invaluable asset. First, a Plan B design-around product or process is the only sure answer<br />
when faced with the possibility of an injunction. Second, the availability of an acceptable<br />
non-infringing alternative can significantly limit the damages award.<br />
Avoid Injunction:<br />
For decades, 35 U.S.C. § 283 (Tab 2) has been interpreted to mean that<br />
permanent injunctions will issue against patent infringers as a “general rule . . . absent<br />
exceptional circumstances.” MercExchange, L.L.C. v. eBay, Inc., 401 F.3d 1323, 1339<br />
(Fed. Cir. 2005) (Tab 10). However, the Supreme Court recently changed this “general<br />
rule” and held that a permanent injunction in patent cases should be granted in accordance<br />
with traditional principles of equity, just as in other areas of the law. eBay Inc. v.<br />
MercExchange, L.L.C., 126 S. Ct. 1837, 1841 (2006) (Tab 11). Therefore, a plaintiff<br />
seeking a permanent injunction “must demonstrate: (1) that it had suffered an irreparable<br />
injury; (2) that remedies available at law, such as monetary damages, are inadequate to<br />
compensate for that injury; (3) that, considering the balance of hardships between the<br />
plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest<br />
would not be disserved by a permanent injunction.” Id. at 1839.<br />
3
Although eBay changed the general rule that essentially mandated the<br />
issuance of a permanent injunction once infringement, validity and enforceability were<br />
decided, it remains to be seen if there will be any significant reduction in the availability of<br />
permanent injunctive relief to the prevailing patent holder. Since eBay, the district courts<br />
have denied permanent injunctions in five patent cases. By contrast, there have been ten<br />
decisions where the district courts granted permanent injunctions in patent cases.<br />
The U.S. District Court in the Eastern District of Texas has denied permanent<br />
injunctions in three patent cases since eBay. In z4 Technologies, Inc. v. Microsoft Corp.,<br />
434 F. Supp. 2d 437, 438-39 (E.D. Tex. 2006) (Tab 12), the jury found willful infringement.<br />
The District Court (Judge Davis) declined to hold that a finding of infringement and validity<br />
raised a rebuttable presumption of irreparable harm and placed the burden of proving<br />
irreparable harm on the patentee. The Court denied a permanent injunction, noting that the<br />
patentee’s right to exclude alone is not sufficient to warrant injunctive relief. Id. at 444. In<br />
Finisar Corp. v. DirectTV Group, Inc., the jury found willful infringement of Finisar’s<br />
patent. See July 6, 2006 Hearing Tr. at 120 (Tab 13). Nevertheless, the District Court<br />
(Judge Clark) found no irreparable harm where the patentee never made or licensed the<br />
invention and denied a permanent injunction. Id. at 123-24; see also Finisar Corp. v.<br />
DirectTV Group, Inc., 2006 U.S. Dist. LEXIS 76380, at *4 (E.D. Tex. July 7, 2006)<br />
(Tab 13). In Paice LLC v. Toyota Motor Corp., 2006 U.S. Dist. LEXIS 61600, at *3<br />
(E.D. Tex. Aug. 16, 2006) (Tab 14), the jury found that Toyota’s hybrid cars infringed, but<br />
declined to find that infringement was willful. The District Court (Judge Folsom) denied a<br />
permanent injunction, noting that the patented invention formed only a “small component”<br />
of the accused vehicles, and that the plaintiff did not manufacture competing vehicles and<br />
was only interested in licensing its technology. Id. at *18.<br />
The U.S. District Court for the Western District of Oklahoma has also<br />
addressed the issue of a permanent injunction in a patent case since the eBay decision. In<br />
Voda v. Cordis Corp., 2006 U.S. Dist. LEXIS 63623, at *18 (W.D. Okla. Sept. 5, 2006)<br />
(Tab 15), the District Court denied a permanent injunction against Cordis after a jury found<br />
willful infringement. Here, the patentee had granted an exclusive license for the patent in<br />
suit to Scimed, a Cordis competitor who was not party to the lawsuit. The patentee relied on<br />
the alleged injury to Scimed to show irreparable harm. Id. at *18-19. The District Court<br />
was not persuaded and noted that “such harm is irrelevant because Scimed elected not to sue<br />
to enforce the patent rights. As patents have ‘the attributes of personal property,’ the person<br />
seeking a permanent injunction must demonstrate harm from infringement of those rights<br />
that is personal as well.” Id. at *19 (internal citation omitted).<br />
Finally, a permanent injunction was recently denied by a Michigan District<br />
Court. In Sundance, Inc. v. DeMonte Fabricating Ltd., 2007 WL 37742, at *2 (E.D. Mich.<br />
Jan. 4, 2007) (Tab 16), the Court denied a permanent injunction where Sundance had<br />
licensed its patent to companies that competed with DeMonte, delayed filing the lawsuit and<br />
seeking injunctive relief, and the patented invention was just one feature of the infringing<br />
product. The Court failed to find irreparable harm despite Sundance’s argument that its<br />
licensees were at a competitive disadvantage due to DeMonte’s infringing sales. Id. The<br />
Court also noted that money damages were adequate because Sundance had licensed the<br />
patent-in-suit to others and had offered to license it to DeMonte before initiating the suit. Id.<br />
4
These decisions remain in the minority. Since eBay, permanent injunctions<br />
were ordered by District Courts in the Northern District of Illinois, District of Minnesota,<br />
Eastern District of Missouri, Eastern District of New York, Northern District of Ohio,<br />
Western District of Oklahoma, Western District of Tennessee, Eastern District of Texas<br />
(twice) and Southern District of Texas.<br />
The lesson of these post-eBay decisions is clear. Permanent injunctive relief<br />
remains a real possibility. A Plan B alternative should be considered early and often.<br />
Limit Damages Award:<br />
An available non-infringing alternative (even one that is not commercially<br />
sold) can preclude lost profits damages. In Grain Processing Corp. v. American<br />
Maize-Products Co., 185 F.3d 1341, 1350-51 (Fed. Cir. 1999) (Tab 17), the Federal Circuit<br />
explained that “a fair and accurate reconstruction of the ‘but for’ market [for lost profits<br />
analysis] also must take into account, where relevant, alternative actions the infringer<br />
foreseeably would have undertaken had he not infringed. . . . The competitor in the ‘but for’<br />
marketplace is hardly likely to surrender its complete market share when faced with a patent,<br />
if it can compete in some other lawful manner.” The Court upheld denial of lost profits<br />
because the defendant showed that it could have readily turned to an available<br />
non-infringing alternative product and consumers would not have noticed any difference<br />
between the two products. Id. at 1354-56. In DSU Medical Corp. v. JMS Co., Ltd.,<br />
471 F.3d 1293, 1309 (Fed. Cir. 2006) (Tab 18), the Federal Circuit reiterated that a<br />
non-infringing substitute, even one not yet on the market, can defeat a case for lost profits.<br />
The availability of an acceptable non-infringing alternative can also limit the<br />
reasonable royalty award. In Grain Processing, the Court noted the District Court’s ruling<br />
that the defendant’s “production cost difference between infringing and non-infringing<br />
[products] effectively capped the reasonable royalty award.” 185 F.3d at 1347. Further, if<br />
the patentee “had insisted on a rate greater than [the rate reflecting the cost difference<br />
between the infringing and non-infringing products, taking into account cost fluctuations] in<br />
the hypothetical negotiations, [the infringer] instead would have chosen to invest in<br />
producing noninfringing [alternative product].” Id. Neither of these rulings was appealed.<br />
Id. at 1353 n5 (“The district court appears to have conducted a thorough royalty analysis,<br />
challenged by neither party on appeal.”).<br />
Grain Processing and DSU Medical thus reinforce the importance of<br />
having a Plan B.<br />
Rule #4: Look For Evidence In Unlikely Places<br />
Defendants typically focus more on the patentee’s evidence, especially<br />
regarding conception and reduction to practice of the patented invention. However, the<br />
defendant’s evidence can sometimes steal the show. For example, under the first to invent<br />
system in the United States, the defendant’s work can provide proof of prior invention and<br />
invalidate the patent. See 35 U.S.C. § 102(g) (Tab 2).<br />
5
Sometimes, key pieces of evidence are found not in perfectly maintained<br />
laboratory notebooks, but in rather unlikely places, lurking in a pile of papers in the trunk of<br />
someone’s car or a drawing on the back of an envelope or lunch napkin. Therefore, do not<br />
neglect to look beyond the usual sources to find the proof to make the defendant’s case.<br />
For example, in one case the corroboration of the date of conception of an<br />
important medical device came from the checkbook belonging to the inventor’s wife, who<br />
had balanced her checkbook on the inventor’s drawing. Her numbers on the drawing<br />
matched the ones in the checkbook, thereby corroborating the date on the drawing. As a<br />
result, the patent was awarded to the inventor.<br />
Rule #5: Try For Early Markman Knockout<br />
Claim construction is a matter of law to be decided exclusively by the Court.<br />
Markman v. Westview Instruments, Inc., 517 U.S. 370, 384 (1996) (Tab 19). More<br />
recently, the Federal Circuit addressed the issue of which sources the Court should rely on to<br />
interpret patent claims. Philips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc)<br />
(Tab 20). The Court held that the claims, specification, and to a lesser extent, the<br />
prosecution history should be given prime importance in claim interpretation. Id. at<br />
1314-17. Reliance on dictionaries was significantly reduced. The Court focused on the<br />
specification as the “single best guide to the meaning of a disputed term.” Id. at 1315.<br />
Interpreting claim terms to determine their meaning and scope is a key first<br />
step in determining whether the claims are invalid or infringed. It is not surprising,<br />
therefore, that resolution of claim construction issues will frequently resolve the parties’<br />
dispute. Getting a Markman ruling early in the case can be an effective strategy for early<br />
dismissal or settlement.<br />
For example, in a patent infringement litigation between Gillette and Schick<br />
over Schick’s Quattro razor, defendant Schick obtained an early Markman ruling on the<br />
meaning of a key claim term. Gillette appealed, and the Federal Circuit issued a claim<br />
construction favoring Gillette. Gillette v. Energizer Holdings, Inc., 405 F.3d 1367, 1374<br />
(Fed. Cir. 2005) (Tab 21). The parties settled the case shortly thereafter.<br />
Rule #6: Use Memorable Graphics<br />
Juries can be easily overwhelmed by all the detail and technology involved in<br />
a typical patent case. Having a few key themes in the presentation of the case will help<br />
focus the jury on the important issues and make a more lasting impression. Graphics will<br />
help the jury understand and remember those themes. Graphics should be clear and simple.<br />
Avoid too slick or over-animated graphics. Graphics rarely are permitted in the jury room<br />
during deliberations, so they must be memorable.<br />
6
AIPLA<br />
JOURNAL<br />
VOLUME NUMBER WINTER<br />
WHO WINS<br />
CASES<br />
<strong>Paul</strong><br />
LiLan<br />
INTRODUCTION<br />
Constructing<br />
Database<br />
Summary of the Observed Events<br />
<strong>Patent</strong>-Owner Winners and Accused-Infringer<br />
Winners<br />
Limitations<br />
of the<br />
II OF MULTIVARIATE REGRESSION 11<br />
Regression with <strong>Patent</strong>ee as Winner 12<br />
Corporate and Income 12<br />
Existence of Jury Verdict 14<br />
TypeofLawFirm 16<br />
Regression Infringer as Winner 17<br />
Corporate and Income 17<br />
Existence of Jury Verdict 17<br />
Type of Law Firm 18<br />
Insufficient Data on Effect of Type 18<br />
Some Weaknesses 18<br />
III AT INDIVIDUAL FACTORS 19<br />
Technology<br />
Differences<br />
Factors Related to the 21<br />
Individual<br />
<strong>Patent</strong> Owner or Corporate<br />
Owner 21<br />
19<br />
2006 <strong>Paul</strong> HIPLA Professor Institute for<br />
Intellectual Property Information Law University of Houston Law LiLan Ren<br />
J.D of Houston Center Associate Well Gotshal Manges<br />
Houston office views expressed herein are own and not those of any other<br />
entity However we are most appreciative of extensive and highly research<br />
assistance of Borland University of Houston class We are<br />
also to John Polk Wagner Rochelle and Jack<br />
Goldstein reviewing earlier valuable comments Finally we<br />
thank staff for<br />
many improvements made to the<br />
manuscript during the process
AIPLA Q.J Vol 341<br />
Foreign or U.S Plaintiffs .22<br />
Relative Strengths 25<br />
Fora Differences 28<br />
Different<br />
Jpdges<br />
Authoring 28<br />
Inclusion joining concurring and<br />
dissenting<br />
votes 30<br />
Different Feeder Courts 32<br />
The<br />
Effect of Jury<br />
Home Court Advantage 34<br />
Possible Counsel DWerences<br />
General or <strong>Patent</strong> Attorney 35<br />
Years of Experience of Lead 36<br />
lv<br />
FINAL OBSERVAnONS<br />
LIST<br />
OF TABLES<br />
Table<br />
Rates<br />
Table <strong>Patent</strong>ees Comparative of<br />
Table <strong>Patent</strong>ees of Winning on Appeal 16<br />
Table Law Firmsin Dispositive<br />
Table <strong>Patent</strong>ees Income Accused Victories<br />
Table Accused Chances on Appeal<br />
Table Financial Database 25<br />
Table Grouped Strengths Database 25<br />
Table Finance Victories<br />
10 10 Finance and Infringer Victories 26<br />
11 11 Results by Authoring 29<br />
12 12 on Judges Authoring<br />
and Combined 31<br />
13 13 High-Volume Courts 32<br />
14 14 Jury on Appeal 34<br />
15 Table 15 Type of Counsel on Appeal 35<br />
16 16 Experience Lead Counsel 37<br />
LIST<br />
OF CHARTS<br />
Chart Percentage of Dispositive<br />
Cases Won by Plaintiffsin Various<br />
Technologies 20
2006 Who Wiss <strong>Patent</strong> Infringement<br />
Cases<br />
INTRODUCTION<br />
For number of years accused patent infringers have been winning<br />
patent infringement suits at of three to one While patent owners win<br />
slightly more than the cases that proceed to trial are losing more cases<br />
overall end in summary judgments of noninfringement We<br />
investigated who the winners and losers have been and herein to assign<br />
reasons for their success or lack thereof<br />
Numerous studies recent years have focused attention on particular<br />
aspects of the United These include<br />
patent infringementlitigation<br />
articles addressing court results on the involved in patent validity1<br />
appellate handling of questions of patent claim district<br />
interpretation2<br />
results in cases in which the judgment was arrived at by trial3 and the judicial<br />
philosophy of Federal Circuit judges.4 Some research services analyze cases on<br />
an issue by-issue basis.5 No one however seems to have analyzed the results<br />
CIR<br />
See e.g John Allison Mark Lemley Empirical Evidence on the Valid dy<br />
of Litigated <strong>Patent</strong>s 26 AIPLA Q.J 185 1998 Donald Dunner et al<br />
Statistical Look at the Federal Circuits <strong>Patent</strong> Decisions 1982 1994 FED<br />
B.J 1995<br />
See Christian Chu Empirical Analysis of the Federal Circuits Claim<br />
Construction Trends BERKELEY TECH L.J 1075 2001<br />
Moore and <strong>Patent</strong> Cases An Empirical Peek<br />
Inside the Black 99 MICH REv 365 2000<br />
SeeR Polk Lee Petherbridge the Federal Circuit Succeeding An<br />
Empirical of Judicial Performance 152 PA REV 1105 116369<br />
2004 comparing the of Federal Circuit judges<br />
in cases in<br />
which there were written opinions on claim-interpretationissues The<br />
patent validity aspects of Federal Circuit voting patterns have been studied<br />
by<br />
and Lemley who report that the results defy easy categorization<br />
John Allison Mark Lemley How Federal Circuit Judges Vote<br />
iii <strong>Patent</strong><br />
27 FLA ST REv 7457462000 Their study did not<br />
Validity<br />
include 36 affirmances or decisions on issues other than validity<br />
See INST FOR INTELLECTUAL PRov INFO<br />
e.g<br />
LAW Univ OF HOUSTON LAW<br />
Cm U.S LITIGATION STATISTICS DECISIONS FOR 2003<br />
which<br />
Jeffrey Johnson et al 2003 http//www.patstats.org/2003.htmle<br />
the issues involved<br />
particular<br />
reports patent litigation results segregated<br />
Multiple decided issues given case lead to multiple in this<br />
service The service does not allow user to assemble the results from<br />
given case to see whether the patent owner prevailed on all<br />
necessary to win the case
AIPLA Vol 341<br />
terms of who ultimately wins patent litigations meaning judgment in favor<br />
of particular party at the Appeals full<br />
population of contested We undertook to fill that void analyzing<br />
the dispositive decisions of that court over the three-year period to<br />
2004 By we in which as it leaves<br />
at leastone claim of one patent<br />
is finally adjudicated to have been infringed<br />
not invalid or unenforceable6 i.e win for the patent owner or in which it has<br />
been finally determined that no claim has these<br />
win for the<br />
accused We included<br />
whether by precedential opinion nonprecedential opinion or curiam<br />
affirmance without opinion under courts Rule 36<br />
There were 262 cases Most arrived at the<br />
summary judgment We data on the factors in these<br />
dispositive cases<br />
way of<br />
Which won in the final appellate judgment<br />
Technology area involved<br />
Individual patent owner corporate patent owner<br />
Income level each party<br />
Foreign or U.S party<br />
Identity of judge opinion<br />
Identities<br />
on panel<br />
District courts of origin<br />
Home court<br />
Unenforceability can result before the<br />
States <strong>Patent</strong> and Trademark Office USPTO or from patent misuse<br />
e.g Hoffman-La Roche Promega Corp 323 1354 1372 66<br />
U.S.P.Q.2C1 BNA Fed breath duty of candor to the<br />
USPTO material misrepresentations or omissions may render patent<br />
unenforceable Braun Med Inc Abbott 124 1419 1427<br />
U.S.P.Q.2d BNA 1902-03 Fed 1997 misuse patent renders<br />
the patent unenforceable until purged<br />
Federal Circuit provides that the court may enter judgment<br />
affirmance without opinion under any of various conditions<br />
most notably<br />
that the judgment appealed was based on findings that are not clearly<br />
erroneous or was entered an of law if an opinion would<br />
no precedential<br />
Fed Cir 36
2006 Who Wiis Infringement<br />
Cases<br />
Effect of jury verdicts<br />
Lead counsel type general attomey or patent attorney<br />
Lead counsel type IF boutique or general<br />
and<br />
Years of experience of counsel<br />
We analyzed of the above individually and ran multivariate<br />
regression analysis that included of<br />
We found of all 25% 262 dispositive cases were<br />
won by the patent owner according to our definition of winning and the other<br />
75% accused This was not of surprising light previous<br />
writers conclusions about 45% of litigated patents are held invalid10 and<br />
additional showing that great majority of on the<br />
infringement issue are against the patent owner and in favor of accused<br />
Among other statistical results multivariateregression analysis tests for<br />
whether variables independently correlate to the response<br />
We use patent owner patentee and accused infringer rather than<br />
plaintiff and defendant to avoid confusion the accused infringer<br />
is plaintiff<br />
in an action for declaratory judgment of invalidity<br />
noninfringement<br />
or unenforceability<br />
Allison Lemley supra note at 205 The authors analyzed on<br />
Federal patent validity rulings during 1989-96 cases in which the<br />
court provided written opinions concluding that the court had upheld<br />
validity in 54% of cases and found invalidity in 46% Id et al<br />
studied Federal validity rulings on statutory section-by-section<br />
basis for period 1982-94 et al so pro note at 153-55 They<br />
concluded example that the court had favor of under<br />
35 U.S.C 102 and 58% of time Ed at 154-55
AIPLA Q.J Vol 341<br />
infringer.l1<br />
We then to profile the winning and losing each<br />
case looking at factors such as annual revenue of the company<br />
the number of<br />
lawyers in the law firm years of experience of the winning and losing<br />
lawyers the district in which case home state of winner and<br />
the general involved many other We deliberately<br />
omitted what<br />
many might consider most important variable legal strength of<br />
the parties respective in order to look at the factors apart from<br />
any subjective perceptions of and legal merits of the parties<br />
Put way we assumed all parties were equally favored by facts<br />
the We wanted to see what factors at work<br />
motivating parties not settle or possibly the outcomes in more<br />
subtle ways<br />
Choosing as population dispositive cases is however not<br />
without difficulties Many remanded cases contain pronouncements<br />
of Such cases tend to settle remand so that in effect<br />
practical<br />
the rulings are dispositive We make no claim that our particular<br />
cases represents the of the patent at large or even patent<br />
litigation generally On the positive side we did no sampling our<br />
population cases the is<br />
complete therefore within<br />
particular confines cannot be skewed in any way<br />
Patstats reports that most rulings on the infringement all courts at<br />
both the district Circuit were against the patent owner<br />
for at least past five years For in 2003 infringers<br />
prevailed in literal patentees in fifty-three<br />
while of were of ratio seventy-one to<br />
nineteen FOR INTELLEcTUAL supra note see also<br />
Gauri Prakash-Canjels Trends in 41 IDEA 283<br />
2001 patentees prevailed in 27%-31% of the judicially<br />
decided cases during 1995-2000 while in -95 the<br />
figure was somewhat at 39%-41% was likely<br />
result of Inc 517 U.S 370<br />
372 1463 affg 52 F.3d 967 U.S.P.Q.2d<br />
BNA 1321 Fed Cir upholding lower court finding patent claim<br />
construction was question of law within the province of the court<br />
and not triable issue of fact As be detailed herein<br />
represent steadily percentage of patent adjudications currently<br />
under 25% of<br />
prevalent mode of<br />
summary judgment
2006 Who Wins <strong>Patent</strong> Infringement<br />
Cases<br />
the<br />
Constructing<br />
Database<br />
We initially collected patent decisions in appeals<br />
the district<br />
courts<br />
and<br />
precedential non-precedential<br />
of Federal Circuit as well<br />
as those cases decided without opinion under Federal Circuit Rule We then<br />
screened out those cases that involved remands on issues involving the merits<br />
hereinafter remands as these were not dispositive<br />
and thus had no<br />
winning or losing party<br />
Most of the patent<br />
decisions of the Federal<br />
Circuit were merits remands and outside the scope<br />
of our study<br />
We retained in the decisions<br />
pool<br />
which it could be detennined<br />
from the opinion or in the case of summary affirmances from inspection of<br />
appellate file that final decision had been reached in favor of the on at<br />
least one claim of at least one patent or that final had been reached in<br />
favor of accused holding that claimwas<br />
patent<br />
not valid<br />
not infringed or not enforceable.12 We identified of<br />
population<br />
cases<br />
fitting these criteria an average of eighty-seven per year.13 We have made<br />
available online table these cases and citations.4 all<br />
Nearly these<br />
12<br />
These issues are often referred to as the merits to distinguish<br />
from<br />
ancillary questions like damages attorneys fees jurisdiction1 or venue<br />
Often one the other of merits subjects<br />
is not raised in given case<br />
meaning that the in effect conceded example defendant may<br />
elect to litigate the infringement question while not challenging validity of<br />
the claim See e.g Poly-America L.P GSE Lining Tech 383 F.3d<br />
1306 72 U.S.P.Q.2d 1685 1687 Fed 2004 litigant conceded<br />
infringement and proceeded to trial on invalidity and points Intel<br />
Corp United Intl Trade Commn F.2d 821 829 20<br />
U.S.P.Q.2C1 BNA 1168 n.13 Fed Cit 1991 litigant did not challenge<br />
validity but argued ingement<br />
Such cases would be in<br />
dispositive<br />
13<br />
We<br />
our lexicon<br />
did not consider design or plant patents but only utility patents We<br />
did not consider interferences inventorship disputes or other in<br />
the nature of patent infringement or the mirror-image declaratory judgment<br />
cases We thus did not include Federal Circuit appeals from the USPTO<br />
We did include suits against the United States<br />
originating the of Federal Claims as well as cases appealed from<br />
the International Commission These last two categories actions for<br />
compensation for use of patented subject matter or in the nature<br />
of competition the of are sufficiently<br />
like<br />
patent infringement suits to qualify treatment here<br />
14<br />
See http//www.law.uh.edu/faculty/pjanicke/database.pagehtml
AIPLA<br />
Vol<br />
dispositive rulings are affirmances 242 of reversals<br />
twenty This is because reversals usually to merits remands most<br />
numerous of dispositions of patent cases by Circuit and not<br />
dispositive cases that in our study<br />
We identified the main party and main losing party<br />
in each<br />
of the 262 cases In or multiple-defendantcases we those as<br />
the main party<br />
the one whose and case in the<br />
Federal Circuit<br />
In those cases in which the Federal Circuit was by way of<br />
summary affirmance opinion under courts we learned the<br />
nature of the issues on appeal by reviewing reports on prior of<br />
appellants brief at the prior inspections were done<br />
editors of the Patstats service In cases in which court rendered an<br />
opinion either or non-precedential we normally learned nature<br />
of the issues the disposition the courts and in few<br />
ambiguous<br />
situations<br />
inspecting<br />
briefs<br />
through<br />
Summary the Observed Events<br />
<strong>Patent</strong>-Owner<br />
Winners<br />
Winners<br />
Our question was As patent owners and accused<br />
infringers who wins dispositive<br />
Court Appeals the Federal Circuit generalized answer is the<br />
table<br />
Table Win Rates<br />
Year Dispositive<br />
It<br />
<strong>Patent</strong><br />
by<br />
Owner<br />
Won by<br />
Owner<br />
<strong>Patent</strong><br />
2002 20 28.2%<br />
2003 101 24.8%<br />
2004 90 19 21.1%<br />
All<br />
years 262 64 24.4%<br />
Since patent owner must prevail on both the and<br />
validity/enforceability<br />
fronts to win the case it should not be too surprising that<br />
patentee victories are relatively Moreover patentees usually to
2006 Who Wins Infringement<br />
Cases<br />
proceed through trial to obtain their<br />
judgments favor5 whereas accused<br />
Trial-based results therefore<br />
infringers more often by summary judgment<br />
represent only minority of cases and in which patent owners do<br />
comparatively much Trial-based results actually by<br />
small When majority.6 one counts in the larger group of summary judgment<br />
the results are<br />
dispositions<br />
strongly the other way<br />
Limitations of<br />
As mentioned to maintain our neutrality on the merits our study<br />
intentionally ignored strength or correctness of parties respective<br />
positions on the facts or the law Our results therefore need to be viewed in that<br />
context We considered to assess overall and in terms of<br />
their commercial significance rather than in terms of one valid enforceable and<br />
infringed claim but the evaluations would have heavily subjective<br />
Without substantial private financial one cannot say that if three of four<br />
patents in the were lost the case balance was lost by the as an<br />
patentee<br />
There considerable on issues relating to trials patent cases<br />
See e.g Moore supra note at 383-94 Arti Rai Trial Courts<br />
Specialized<br />
Concentrating Expertise on Fact 17 BERKELEY TECH L.J 8772002 Phillipe<br />
Signore On the Role of Juries <strong>Litigation</strong> 83 PAT<br />
TRADEMARK OFF Socv 791 2001 John Should Be ItS Trial<br />
in Court with Specialization <strong>Litigation</strong> PAT TRADEMARK OFF<br />
SoCY 791 2000 <strong>Patent</strong> litigation statistics are privately reported by<br />
LegalMetric www.legalmetric.com/judgereport<br />
which counts judgments<br />
in district court including those reached consent and those obtained<br />
default our methodology we would not either type of judgment as<br />
contested<br />
disposition<br />
16<br />
Professor looked at the slice of patent litigation represented by trials<br />
1209 cases over sixteen years<br />
She concluded patentees had an overall<br />
win rate of 58% district court trials Moore note at supra<br />
385 They had<br />
win rate before of if juries patentee initiated but 38% if<br />
the accused initiated by way of suit for declaratory<br />
judgment<br />
Id at 368 In bench trials patentees had rate of 51% at<br />
386 Table At one lime trials were the disposition<br />
method choice<br />
patent cases As shown however by Professor Moores data for 1999 Id at<br />
384 and by ours trials now account for to 4% In<br />
dispositions<br />
2004 3.6% of cases reached trial See OF Js PROGRAMS ADMIN OFFICE<br />
OF U.S STATISTICAL TABLES FOR FEDERAL JUDICIARY 2004<br />
available at http//www.uscourts.gov/judiciary2004/cn1tentsJthhhl<br />
TABLES 2004 judgmentsare much<br />
lhereinafter<br />
more common disposition tool in contested cases as found in our sample
10 AIPLA<br />
Vol 341<br />
economic matter Nor can it be said that if are not infringed<br />
one claim is result an overall win for the accused<br />
infringer That require knowledge market details<br />
design-around feasibility available license terms and host of<br />
points are not available to researchers reader therefore<br />
recognize that the can be as signal whether<br />
the side designated as winnh in fact achieved any significant<br />
advantage<br />
In we did not include cases that were finally at the<br />
trial-court level and not appealed nor did we attempt assess good<br />
settlements achieved patent owners accused<br />
recognize that of the 3000 patent infringementsuits filed each year in<br />
the United States17 most are settled Only about 650 per resolved by<br />
contested court ruling18 and great majority of those by summary<br />
judgment rather by<br />
Of approximately 500 patent appeals currently lodged per year at the<br />
Federal Circuit2 about 200 are actually decided by the judges in one of<br />
modes decision precedential opinion about in<br />
per year<br />
three<br />
STATIsTICAL 2004 supra note 16 at Table C-2 2973 patent cases filed<br />
in the district courts during 2004<br />
The federal statistical tables are inconclusive on this reporting only<br />
that 2279 patent cases disposed phrase<br />
includes many dismissals joint<br />
in settled cases closer<br />
approximation obtained observing that the volume patent appeals to<br />
the Circuit at about cases per year See STATIsTICAL<br />
TABLES 2004 supra note 16<br />
at Table the district courts<br />
in all are patent cases Allowing some<br />
judgments were to unappealed settlement by license after<br />
the district court decision we estimate about 650 contested district<br />
court patent case decisions each year<br />
10<br />
the<br />
of patent cases filed in the courts has increased<br />
about to nearly as of 2000 Prakash-Canjels Trends<br />
<strong>Patent</strong> supra note 11 at 284 number of patent trials<br />
commenced the U.S has fairly constant around to 105<br />
See e.g STATISTICAL 2004 supra note 16 at Table 100 patent trials<br />
were commenced in Sty-nine them to juries supra note<br />
at 384 eighty-six patent trials Summary judgment increasingly<br />
the tool choice patent cases<br />
20<br />
See e.g STATISTICAL TABLES supra note 16 at Table
2006<br />
Who Wins Infringement<br />
Cases 11<br />
year period the study nonprecedential opinion eighty per year or Rule<br />
per curiam affirmance without opinion twenty-five per year.21 By looking only<br />
at dispositive rulings appealed cases and the number of<br />
larger<br />
remanded cases our study intentionally selected against many patent disputes<br />
that had matured to the of an important appellate ruling arguably<br />
including some cases in which law action would be assessed<br />
patent<br />
Similarlywe did not include<br />
district court determinations on the<br />
unappealed<br />
merits even though such rulings are in judicial sense and could be<br />
dispositive<br />
commercially important<br />
Finally for statistical analysis purposes our population sometimes had<br />
only small number of cases recorded in particular category such as wins by<br />
patentees in non-pharmaceutical chemistry cases eleven over the three-year<br />
period or dispositive opinions by Judge Dyk eleven or Judge Bryson nine<br />
These categories involve sample that too small meaningful statistical<br />
comparisons or conclusions<br />
II RESULTS OF MULTIvARIATE REGRESSION ANALYSIS<br />
We built multivariate regression model using SAS statistical software<br />
to determine which have statistically significant correlation to the<br />
outcome and how these factors influence the outcome We chose the following<br />
factors to model regression home state entity corporate or<br />
individual financial strength parties nationality type of technology involved<br />
existence of jury verdict appellate decision authoring judge type of law firm<br />
involved on each side general or IP boutique type of lead attorney as patent or<br />
general lawyer<br />
and length<br />
of time being<br />
admitted to practice<br />
law for both lead<br />
attorneys Different factors might have been at play when patentees<br />
won<br />
21<br />
According to the Administrative Office of Courts the Federal Circuit<br />
currently disposes of some 355 district cases nearly all patent appeals<br />
each year by what referred to as terminations by judges STATiSTICAL<br />
TABLES 2004 supra note 16 at Table B-8 The hand-counting and individual<br />
case study that went into our database shows that only about 200 cases were<br />
disposed of the judges precedential non-precedential opinion<br />
or per curiam affirmance under Rule 36 If Administrative Office figure<br />
is correct something on the order of appeals are disposed of in some<br />
other manner than decisions by judges These other actions could include<br />
dismissals appeals on motion failure to file brief lack of appellate<br />
jurisdiction or similar grounds<br />
It also possible that number of settled<br />
cases have worked way into the Administrative Offices published<br />
figure such as cases that were dismissed by motion of and<br />
parties<br />
thus involved no serious effort on the
12 AIPLA<br />
Vol.341<br />
compared to when accused won to for we looked at the<br />
two subpopulations separately<br />
Out all the factors included in the regression model we found<br />
only are statistically to the outcome of case patentee<br />
financial strength jury and the type of law firm the winning<br />
side The type of in the patent was marginally significantP<br />
Regression <strong>Patent</strong>ee as Winner<br />
Where patentees prevailed our regression analysis patentees<br />
corporate and strength existence of jury verdict the<br />
patentees choice of are statistically significant factors relating to the<br />
ultimate result in the while the type of technology<br />
marginal correlation to results terms of which side won Statistically<br />
significant correlations not indicate causation of result<br />
The result may be caused outside of our study<br />
Although there were some interesting findings at the observed events<br />
level we found that the following factors did not have statistically<br />
correlations to dispositive case results court advantage<br />
district rendered identities of judges hearing<br />
the case and use of general lawyer vs patent as lead counsel on appeal<br />
Again may in fact important drivers particular<br />
dispositive cases or of direction of<br />
patent law in remanded<br />
cases they may have other significant effects but we did not see resultcorrelation<br />
in our population<br />
Corporate<br />
and Income<br />
We most annual revenue figures<br />
and<br />
Exchange Commission reports for companies other<br />
published business reports for held entities Where litigant company<br />
was subsidiary of larger entity we used revenue of the parent partially<br />
because was usually only figure available and partially because the<br />
parent would likely efforts and may have<br />
applied its own funds to defray<br />
litigation costs<br />
The used would not converge with<br />
numerous of technologies we chose to track
2006<br />
Who Wins <strong>Patent</strong> Infringement<br />
Cases<br />
13<br />
After collecting and recording the revenue data for the lead litigants23 on<br />
each side of each case in our dataset we divided the data into four levels Level<br />
is for those entities of lowest income $0-$l million This would almost<br />
certainly indude all individual plaintiffs24 and some corporate ones being<br />
represented by<br />
contingent4ee<br />
counsel<br />
Level for those firms with revenues over $1 million and to<br />
up<br />
$100<br />
million Such entities would find litigation very large<br />
resources Level represents companies<br />
with annual incomes<br />
drain on<br />
over $100 million<br />
and up to $1 billion Level for firms with over $1 billion in revenue Levels<br />
and<br />
are for corporations<br />
who would have more freedom in their decisions<br />
litigate rather than join the great majority of patent litigants who settle their cases<br />
by agreeing to license terms In few we were not able to find reliable<br />
income<br />
database<br />
data so the results presented<br />
of 262 cases<br />
do not quite represent<br />
the full<br />
The table below shows in part<br />
how the financial strength<br />
patentees<br />
correlated to the outcome of case The Estimate Odds Ratio shows that for<br />
example<br />
all other factors being equal the odds of level corporate patentee<br />
winning were 4.44 timesmore than an individual patentee.25<br />
As we shall see in<br />
Part III financial strength as between corporate<br />
adversaries also correlated to<br />
litigation success in the individual analysis<br />
23<br />
The lead litigant<br />
is typically<br />
the first party cited in the case name on<br />
Westlaw<br />
24<br />
Since incomes of individuals are rarely published we assumed that any<br />
in<br />
individual owner appearing our database had an income in level<br />
The odds ratio of is the best estimate for 95% certainty corporate<br />
odds are between 0.564 and 35.0 times the odds of an individual<br />
patentees<br />
The<br />
patentee<br />
range of odds ratios is reflection of high confidence<br />
limit imposed 95% and limited quantity of data available
14<br />
AIPLA Q.J Vol 341<br />
Table <strong>Patent</strong>ees Comparative Odds<br />
<strong>Patent</strong>ee<br />
Status<br />
Odds<br />
95% Confidence<br />
Limitsof<br />
Ratio<br />
Level<br />
corporate<br />
compared to individual<br />
Level corporate<br />
patentee<br />
4.44 0.564<br />
4.62 0.976 21.9<br />
compared to individual patentee<br />
Level<br />
corporate<br />
2.97<br />
compared to individual patentee<br />
Level corporate patentee<br />
9.16 2.03 41.3<br />
compared to individual patentee<br />
The is significant when alone also<br />
when considered in regression with the other factors that patentee<br />
financial strength is strong factor correlating to the outcome of case<br />
Existence<br />
Jury Verdict<br />
On average only ninety-five patent<br />
trials commence each year<br />
nationwide26 number that been nearly constant over the past fifteen<br />
years.27 Of those ninety-five per about are now jury trials<br />
26 See e.g STATISTIcAL TABLES 2004 supra note 16<br />
at Table<br />
work of the<br />
Courts published at<br />
http//www.uscourts.govllibrary.html is the most authoritative source for<br />
district court civil dispositions type of case Unfortunately it<br />
reports on trials it does not on trials<br />
27 number is significantly the 1960s In the<br />
period 1968-70 patent case filings per averaged less onethird<br />
of are and patent trials per year averaged 127 See<br />
Blonder-Tongue Labs Inc of Ill Found 402 U.S<br />
U.S.P.Q 513 The rate in those was thus 13.8%<br />
compared to about today See STATISTIcAL 2004 supra note 16 at<br />
Table
2006<br />
Who Wins <strong>Patent</strong><br />
Infringement<br />
Cases<br />
15<br />
and the remainder bench trials to district judges or As found<br />
magistrate judges.26<br />
in our study judgments in cases<br />
patent summary judgments<br />
where no<br />
verdict exists Appeals from judgments based on verdicts constitute only<br />
jury<br />
about 14% of the total patent appeals lodged and similar of cases in<br />
percentage<br />
the dispositive group<br />
All other things being equal patentee appeared in the Federal<br />
with verdict favor as appellee<br />
had<br />
times better<br />
odds to win on appeal than had in all cases regardless of victor where the<br />
judgment<br />
below involved no verdict That is mainly due to the fact that this<br />
smallsubpopulation of jury verdict cases inherently excludes summary<br />
judgments these are the relatively few cases that actually got past pretrial<br />
dispositive motions and went trial on the The subpopulation is<br />
therefore highly favorable to patentees Where there was jury verdict for the<br />
accused infringer patentees odds of winning on appeal this time as appellant<br />
were 0.404 those of patentee appealing non-jury verdict-based<br />
This reflects the fad that has more difficult getting<br />
judgment<br />
favorable<br />
result the court of appeals by overturning jury verdict<br />
dispositive<br />
than by overturning other types of judgments<br />
These results are collected in the<br />
following table<br />
2004 note 16 at Table C-4<br />
figures<br />
sixty-nine jury trials and thirty-one bench trials<br />
patent<br />
in 2004 The<br />
corresponding numbers given by Professor Moore indicate for example<br />
that in 1998 there were sixty-two jury trials out of 103 total trials<br />
41 bench trials 1992 there were fifty-two jury trials and thirty-eight<br />
bench trials See patent<br />
Moore so pro note 384 The with the<br />
at years<br />
greatest number of patent trials commenced were 1997 and each with<br />
103 trials Id
16 AWLA Vol<br />
Table <strong>Patent</strong>ees Chances of Winning on Appeal<br />
Where judgment was based<br />
Estimate<br />
95%<br />
on<br />
Jury<br />
to non-verdict<br />
patentee<br />
Jury<br />
patentee compared<br />
judgment<br />
accused<br />
Odds Ratio<br />
0.404<br />
Limitsof Odds Ratio<br />
N.A<br />
compared<br />
to all non-verdict-based<br />
judgments<br />
Calculation indefinite to small<br />
very<br />
denominator<br />
Type of Law<br />
We studied the type<br />
of firm general firm or IF boutique<br />
engaged as the lead firm one side or the difference<br />
in the outcomes The events data in that were29<br />
Table Law Firms in Cases<br />
IP Boutiques<br />
Representing<br />
won/lost<br />
17/93<br />
Representing Accused<br />
Infringers<br />
74/19<br />
General Firms 42/83<br />
General<br />
representing patentees and IF<br />
boutiques had slightly record accused<br />
multivariate regression indicates that the type of not characteristics of the<br />
particular is doing the appellate significantly to<br />
which party ultimately won We are hard to it<br />
explain should<br />
matter what kind of firm winning lawyer is affiliated with as will be<br />
seen in was statistical importance to whether winning<br />
attorney was patent lawyer or general lawyer<br />
Our regression for patentee as winner shows<br />
factors being equal patentee had of winning on appeal<br />
the patentees law firm was an IF boutique<br />
patentee used<br />
general ratio 0.3581 confidence is 95%<br />
between 0.136 and 0.945 regression model indicates that there may<br />
have been an interaction effect existence of jury verdict and<br />
29<br />
are incomplete in that we could not find on type<br />
of for every case especially on the
2006<br />
lVho <strong>Patent</strong> Infringement Cases 17<br />
the type of on the side An interaction effect means that the<br />
collective effect of two or more factors is stronger than the sum of the two factors<br />
i.e the effect is non-linear<br />
Regression with Accused Infringer<br />
as Winner<br />
Now we look at three factors seeming to contribute to the outcomes of<br />
those cases in which accused were the about threefourths<br />
of<br />
appellate<br />
total<br />
Corporate Status and Income<br />
The table below shows the relative success of accused infringers in<br />
relation to the patentees corporate status and financial strength.3 level<br />
corporate patentee over $1 billion in annual revenue has by the lowest<br />
chance of the case only the chance of an individual patentees<br />
losing<br />
Table <strong>Patent</strong>ees in Accused Infringer Victories<br />
<strong>Patent</strong>ee Income Level<br />
accused infringer wins<br />
Level corporate patentee<br />
compared to individual patentee<br />
Level corporate patentee<br />
compared to individual patentee<br />
Level corporate patentee<br />
Estimate Odds 95% Confidence<br />
Ratio Limitsof Odds<br />
0.225 0.029 1.77<br />
0.216 0.046 1.02<br />
0.336 0.0511 2.21<br />
compared to individual patentee<br />
Level corporate patentee<br />
compared to individual patentee<br />
0.109<br />
0.024 0.492<br />
Existence of Jury Verdict<br />
As we did for cases in which patentees won we now look at how the<br />
presence of jury verdict below correlated to the outcome of cases in which<br />
accused infringers won<br />
All other factors<br />
appeal<br />
being equal an accused<br />
30<br />
figures here are the reciprocals patentees winning odds given<br />
supra Table for cases in which patentees win The estimate odds ratio<br />
shows that for example all factors being equal the odds of level<br />
corporate patentee losing are 0.225 that of an individual patentee<br />
The<br />
odds of 0.225 the estimate with the range of odds going<br />
from 0.0285 to 1.77 with 95% certainty
18 AIPLA Vol 341<br />
infringer with jury verdict at trial an appellee in<br />
the Federal Circuit its chance winning on appeal was 2.48 what would<br />
have been there were verdict in the case Similarly there was jury<br />
verdict below the patentee the accused infringers of winning as<br />
appellant was only 0.027 would in no-verdict case<br />
Table Accused Chances of Winning on Appeal<br />
Judgment Below Was Based On Estimate Odds<br />
95% Confidence<br />
Ratio<br />
Limits<br />
Odds Ratio<br />
Jury verdict for patentee<br />
ppared to no verdict<br />
Jury<br />
0.027<br />
2.48 21.5<br />
infringer compared<br />
to no verdict<br />
Type<br />
of law Firm<br />
Finally our regression study for as winner shows<br />
that all being equal an accused had<br />
winning on appeal it<br />
engaged an IP firm when it used<br />
general law firm the odds ratio was 2.791 95% confidence level 1.06 to 7.38<br />
The same mystery noted type of appears here<br />
Why should accused infringers do IF boutique and patentees<br />
with general firms when in this no<br />
difference Again no is immediately apparent<br />
Insufficient Data on Effect Type<br />
As earlier area of as marginal in<br />
the multivariate regression For all the regressionwe have<br />
approximately 100 cases for patents but ten cases for<br />
non-pharmaceutical patents nineteen cases for manufacturing<br />
patents twenty-two cases for biotech patents and only one for<br />
patents The imbalance these data the regression model<br />
we had to leave the type of out in order to stabilize the regression<br />
model<br />
Some<br />
Methodology<br />
In our study we had two values each factor For example case<br />
in patentee won had patentees financial<br />
and value infringers financial strength In other words any<br />
single we had two values our regression had to account for two
2006 Who Wins <strong>Patent</strong> Infringement Cases 19<br />
inputs single in calculating response i.e the<br />
Because of the unique binary input nature of our data we had to run two<br />
regression models one for patentee wins and one for<br />
This means that all our data are based on comparing<br />
the cases in which<br />
patentees won and cases in which accused infringers won<br />
While years worth of seem plentifuL it was the minimal<br />
amount of to run meaningful regression<br />
model Another weakness with<br />
analyzing historical is that we only to the we<br />
accounted ultimate outcome Without<br />
with controlled we cannot ascertain whether factors were the<br />
definite of ultimate outcomes Indeed we have been<br />
the strength the positions with respect the facts were equal<br />
in all cases and therefore did not influence outcomes In reality assumption<br />
of course does not hold as each partys evidence arguments<br />
have different<br />
strengths under doctrinal patent and procedural these could and<br />
traditionally should factors this controlled<br />
impractical in the legal various reasons the regression model<br />
have required points and we could have tested for interaction and<br />
causation better focus model pattern<br />
in an<br />
uncontrolled regression model us to point to<br />
statistically significant factors in pool cases that are random than<br />
controlled<br />
III CLOSER AT INDIVIDUAL<br />
We now move from multivariate regression to regression<br />
studies of<br />
several individual<br />
alone i.e without regard to how other<br />
factors may interact with one under study<br />
Technology<br />
Observed as single win rates varied to some extent with<br />
main technology involved in the case Unfortunately our limited<br />
population into nine separate technologies reduced in<br />
most of to numbers are not statistically meaningful The next table
20 AIPLA Q.J Vol 341<br />
shows the results for nine fields31 from the lowest success rate the<br />
highest<br />
Chart<br />
Percentage of Disposifive Cases Won Plaintiffs in Various Technologies<br />
typical patentee had only 14% chance of winning an electrical case<br />
but 37% percent chance if the case involved biotech subject matter.32<br />
31<br />
The selection was largely arbitrary based on perceived interest<br />
among<br />
commentators and the profession Other commentators have looked at this<br />
phenomenon See e.g Dan Burk Mark Lemley Is <strong>Patent</strong> Law<br />
Technology-Specific 17 BERKELEY TECH L.J 1155 1156 2002 concluding that<br />
the patent system while technology-neutral in is technology-specific<br />
in application Amir Naini Convergent Technologies and Divergent <strong>Patent</strong><br />
Validity Doctrines Obviousness and Disclosure Analyses in Software and<br />
Biotechnology 86 TRADEMARK Orr SOCY 541 544-63 2004<br />
discussing differences in validity standards for biotechnology and software<br />
patents<br />
32<br />
Some of areas involved few dispositive cases in the period under<br />
consideration and the results are statistically weak for reason The<br />
underlying data are electrical patentee out of 28 cases electro<br />
mechanical of 31 computer processes of 23 non-pharmaceutical<br />
chemistry of 11 manufacturing methods of 18<br />
chemistry of 27 mechanical 30 100 and biotech of 19
2006 Who Wiis <strong>Patent</strong> Infringement Cases<br />
possible reasons for disparities are unclear cases for example<br />
are by far the group with one hundred cases represented<br />
The relatively success rate of 30% for those cases<br />
is of the<br />
much lower rates for<br />
One the high success rate for biotech patent<br />
owners the grounds that the cases interesting as parts of new<br />
technology and more suggestive of than older more staid<br />
technologies that might be seen as merely industrial improvements lacking any<br />
direct human Overall there was statistical correlation between<br />
the types of patents involved and<br />
party.TM<br />
Factors Related to the Parties<br />
Individual <strong>Patent</strong> Owner or Corporate<br />
Owner<br />
Individual<br />
persons were the in patentees fifty cases in the dispositive<br />
case population.35 These won under our definition six of those<br />
cases for win rate of is far lower overall patentee win rate<br />
of 24.4% and it that individual had<br />
suggests<br />
only half as good chance<br />
as corporations to win patent infringement suits Our binary logistic<br />
33 It the cases won by patentees comprise<br />
nearly half thirty out of of patentee wins the entire<br />
dispositive population<br />
Null in patent has no impact on the<br />
ultimate winner test shows P-value of which means<br />
we not reject null DAwn MooRE BAsIC<br />
PRACTICE OF STATISTIcS ed 2000 test of significance as<br />
chi-square test assesses the evidence the<br />
probability P-value less than or equal to 0.05 considered<br />
significant in the community<br />
35<br />
some both corporate and appeared We<br />
identified as lead our by signatures on the<br />
appellate It is certainly possible corporate exclusive licensees as<br />
co-plaintiffs financed and largely controlled
22<br />
AIPLA Qj Vol 341<br />
test shows that an individual patentee may have as low as 30% chance of<br />
winning compared to corporate<br />
Corporations were the patentees in 214 of the cases and prevailed in<br />
fifty-seven of them success rate of Whether the patentee is an<br />
individual or corporation is significant in correlating<br />
to the outcome<br />
of case Corporate patentees had results.37<br />
Foreign Plaintiffs or U.S Plaintiffs<br />
number of previous writers have investigated possible<br />
effects of<br />
patentee being foreign corporation when accused are<br />
U.S entities found in litigation results.38 Our<br />
confirmed what others have found As patent owners foreign companies<br />
appeared in forty-eight cases and won thirteen of for win rate of 27%<br />
slightly higher than the overall win rate for patentees<br />
As accused infringers<br />
defending against patentees claims foreign companies in<br />
eight cases and won fifty-three of them win rate again slightly<br />
than the overall win rate for the<br />
study<br />
population accused in our<br />
36<br />
binary regression comparing individual corporate<br />
with the event of patentee being the winner shows an odds ratio of 0.3<br />
95%<br />
confidence level between 0.11 0.78 means that on an<br />
indivtdual patentee claimant has of winning compared to<br />
corporate claimant This is also part of our full-population<br />
regression analysis<br />
Null hypothesis Whether patentee is an individual or corporation has<br />
no impact on the ultimate winier of the case P-value is 0.06 or 6%<br />
that individual patentee plaintiff and corporate plaintiff equal<br />
impact on the outcome of case P-value 0.06 that is<br />
slight statistically significant and should<br />
rejected<br />
38<br />
Kimberly Moore Xenophobia American 97 Rcv 1497<br />
2003 Based on twelve-year district court data set Professor Moore<br />
that entities prevailed in 56% cases in which their<br />
adversaries were domestic Id at 1509 included summary judgment<br />
decisions judges as well as bench trials She also that<br />
entities most of patent jury the adversaties were<br />
domestic Id see also Lemley supra note 225 that<br />
for reported decisions entities patents were found<br />
valid 58.5% time and entities patents 53.5%
2006 Who Wins Infringement 23<br />
Four of the winning foreign patentees were German with<br />
remainder distributed among nationalities producing one two cases.39 Of<br />
the thirty-five foreign patentees<br />
that lost cases the eight<br />
were from with four Great Britain and Switzerland three<br />
each from Germany the rest scattered among eight<br />
countries.40<br />
As successfully defending against charges of infringement<br />
foreign companies also were well represented They appeared in largest<br />
numbers from Japan successful Canada six and<br />
Sweden five plus sprinkling<br />
of others.41 defendants that<br />
cases from two and two with one<br />
each countries Of particular in regard that<br />
Japanese against charges of infringement won all of<br />
their dispositive cases in the of our study ii no Japanese companies<br />
appeared as patentees either winning or losing our population chi<br />
square test on the factor however showed that the nationality the<br />
patentee has no statistically to the outcome of the<br />
These are Great Switzerland two and one<br />
each from Taiwan France and Finland<br />
France two Israel two and one each Italy Denmark Netherlands<br />
South Taiwan Three were unidentifiable<br />
41<br />
four Great Britain four Switzerland Netherlands<br />
Norway one Spain one Taiwan one France<br />
one Eight<br />
were unidentifiable Note that we have sufficient to compare<br />
U.S corporations corporations we do not have enough<br />
points<br />
to calculate<br />
country<br />
42<br />
Great Netherlands Spain were<br />
unidentifiable<br />
regression analysis on per-country basis impractical there are<br />
insufficient data for each country Moreover because there zero losing<br />
case data Japanese multivariate regression analysis is<br />
meaningless
24 AIPLA Vol<br />
case binary regression<br />
test also shows that whether<br />
infringer is foreign or domestic does not have significant impact on the end<br />
result.45<br />
One can only as to the reasonsunderlying apparent<br />
negation<br />
the<br />
among foreign companies<br />
that not be<br />
treated equally to U.S companies patent litigation Several<br />
possibilitiescome to mind First in this study we looking only at dispositive<br />
cases i.e minority of cases that all the way through<br />
district court judgment and an appeal at the Circuit without having<br />
settled is possible foreign entities are less sanguine<br />
about of<br />
hanging in reaching with We<br />
do not have any statistics on the settlement rates specifically<br />
in patent cases That rate may<br />
well rate<br />
of about 83% the the entity is on makes difference In order<br />
to win as patentee trial is usually needed setting the stage for supposed<br />
prejudices to come to the fore By contrast for an accused<br />
winning<br />
sun-unary judgment is the most likely outcome process that is probably<br />
Before regression we used test analyze whether<br />
there is<br />
any statistical<br />
difference in outcome between U.S<br />
corporations 0.6 shows variation outcome with<br />
respect nationality of the parties is due to random chance not<br />
specific common factor The regression model confirms<br />
of the parties are not statistically in- calculating<br />
outcome<br />
Null Whether is or foreign<br />
corporation has no impact on the winner of the case binary<br />
logistic regression test shows P-value 0.7 we have<br />
no statistical basis to reject the<br />
46<br />
to the annual reports of U.S Courts<br />
there were roughly 2000 patent actions filed in the district courts during<br />
each year of period mentioned earliersome 600<br />
these cases decided in contested manner each year mostly by<br />
summary judgment leaving around 1400 that are believed to have<br />
settled or 70% of the number filed<br />
percentage of the cases<br />
appealed are also as revealed by the disparity<br />
of patent appeals 450 in per year period in and the 200<br />
or truly by action Adding the remaining 250 cases to<br />
the category generates an overall rate of 1650 out of the<br />
2000 cases initially filed or about
2006 Who Wins Infringement<br />
25<br />
prone to such emotional biases Accordingly patentees are likely to be<br />
concerned about unfairly<br />
Relative<br />
Financial<br />
Financial was assessed income categorized<br />
into four levels7<br />
as outlined earlier The results are summarized in the following two tables and<br />
discussion<br />
Table Financial Overall<br />
fl Level Level Level Level<br />
flis 68 69 68<br />
80 42 105<br />
<strong>Patent</strong> owners generally poorer than accused infringers<br />
perhaps difficult to see in table where because of the breakpoints we<br />
somewhat arbitrarily chose level firms are less numerous than level<br />
both for patent owners Ps for accused infringers AIs The wealth<br />
This<br />
population is more easily seen by<br />
income levels together as follows<br />
the two<br />
lower and two higher<br />
Table Strengths Overall<br />
Levels 1-2<br />
137<br />
Levels<br />
96<br />
AIs 147<br />
significant symmetry exists here <strong>Patent</strong>ees were largely in the two lower<br />
income levels infringers were largely in the upper two levels This<br />
means that most litigations that go all the way through judgment and<br />
appeaL patent owner was typically poorer or individual<br />
an infringement against wealthier company<br />
We will now look at win rates to see if there any correlation to wealth<br />
First cases in which patentee was the ultimate Here<br />
both sides tended to be in the wealthier categories<br />
with revenues<br />
$1 billion<br />
which is<br />
by largest would expected in light of that<br />
wealthy firms make up most of the litigant population on both sides In the far<br />
The levels are Level $0 up to $1 million level over miffion and<br />
up to $100 $100 millionand up to $1 billion level<br />
over $1
26 AIPLA Q.J 341<br />
more in accused prevailed they<br />
to be than their losing There is large of<br />
winning accused-infringer firms that revenues in excess of $1 per<br />
year.49 One would have to conclude it<br />
fairly for patent owners of<br />
whatever income to defeat entities<br />
We now look at the subpopulation of patentee victories and<br />
subpopulation of accused victories both as function of<br />
strength First we consider<br />
levels of<br />
adversaries<br />
the patentee victories versus the<br />
strength<br />
Table Finance <strong>Patent</strong>ee Victories58<br />
Equal levels 22<br />
<strong>Patent</strong>ee<br />
level stronger<br />
<strong>Patent</strong>ee<br />
or more levels stronger<br />
<strong>Patent</strong>ee weaker 12<br />
<strong>Patent</strong>ee<br />
or more levels weaker<br />
<strong>Patent</strong>ees<br />
prevailed were often of the same roughly measured<br />
financial strength as their accused-infringer adversaries Where they are not<br />
equal the financial weight is toward accused infringers<br />
Table 10<br />
and<br />
Infringer Victories51<br />
qual financial levels 62<br />
Accused level stronger 31<br />
Accused or levels stronger 55<br />
Accused level 19<br />
Accused or levels weaker 14<br />
They win by ratio significantly than 32 ratio of<br />
accused to poorer patentees in<br />
Recall that we earlier that<br />
accused-infringer companies with<br />
revenues over $1 their cases during the under<br />
study 2002-04 169 of them won<br />
SO<br />
cases for was available was less the<br />
total victories the database<br />
Again data were not available for all in the
2006 Who Infringement Cases<br />
In of accused wins we likewise see large group of<br />
cases sixty-two in which the parties were roughly evenly matched in terms of<br />
financial strength But where are mismatched accused infringers are<br />
much more often stronger eighty-six cases than twenty-nine cases<br />
Nevertheless unlike regression as single factor<br />
looked at alone were not statistically in correlating<br />
wealth to victories.52 This with from<br />
study shows that the of strength correlates to the outcome of the<br />
case<br />
non-linearly<br />
We asked whether the particular financial strength of<br />
than $1 billion in annual revenue statistically to the outcome of<br />
case To study we compiled table in which the financial strengths<br />
of both<br />
parties are figured into the ultimate outcome The P-value of the chi-square test<br />
was 0.44 indicates the pairings are likewise not statistically<br />
significant to the outcome of casesP Again this does not<br />
mean financial strength is not statistically factor rather this analysis<br />
and the that has an interaction<br />
effect with one more factors in the is only<br />
the<br />
multivariate<br />
analysis<br />
52<br />
hypothesis Relative not impact outcome of<br />
the case chi-square test shows 0.1 which means the null<br />
hypothesis may not be rejected<br />
Null hypothesis The pairing of plaintiff and defendant based on relative<br />
financial strength not impact who wins these cases P-value<br />
indicates that the null hypothesis may not be rejected
28 AIPLA qj<br />
Vol 341<br />
Fora Differences<br />
Different Appellate<br />
Authoring judges<br />
Sorting dispositive cases over the period<br />
the<br />
who<br />
authored the majority we find percentage spread victories<br />
for patent owners As the tables the spread ranges from under<br />
the pen of Judge to 0% written by Judge Bryson<br />
Both are<br />
based on very small number authored dispositive cases for<br />
Schall arid Bryson These not mean that<br />
Judge Bryson did not author any opinions favorable to owner during<br />
2002-04 may well or non-precedential merits<br />
remands in favor patentees possibly in manner that ended up resolving the<br />
case favorably to them and may have been main instigator some of the<br />
sixteen panels issued summary affirmances favor patent<br />
owners Similarly wrong to conclude on our data that<br />
Schall is more pro-patent than The data include only small<br />
of dispositive opinions bearing his name<br />
Wagner and patterns of<br />
Circuit judges cases with on claim-interpretation<br />
See generally Wagner supra note As previously<br />
patent validity aspects of Federal Circuit voting patterns have<br />
studied<br />
by and Lemley who report that results defy easy<br />
compartmentalizing See generally Allison supra note reporting<br />
easy categorization that results Their did not include<br />
Rule 36 or decisions on issues other validity
2006 Who <strong>Patent</strong> Infringement<br />
Table<br />
Results<br />
fliithorin<br />
Judge For Accused for <strong>Patent</strong>ee<br />
Mayer 33.3<br />
Michel<br />
Linn 14 30<br />
Gajarsa 20<br />
Per uriam Oncl 36 16 73 11.9<br />
Lourie 21 16<br />
Frost 11 15.4<br />
Qyk<br />
10 9.1<br />
Bryson<br />
To organize the raw event data we assigned color to the<br />
authorships grey for judges whose precedential non-precedential<br />
opinions were in favor of the patent owner significantly more often the<br />
overall average of white for judges proportion of opinions for<br />
patent owner were somewhat higher average and gray for judges<br />
whose were below average win rate of patentees We<br />
included per category in order to pick up short opinions so labeled<br />
the and to include summary affinnances 36 even though both<br />
of these categories have no single<br />
For authored opinions both precedential non<br />
precedential the judges in dark grey in the more often patent<br />
claims not invalid who so found than<br />
judges in the bands in the middle<br />
thought as moderate in the frequency which they<br />
ruled<br />
dispositively for one side or the other light grey<br />
lower band<br />
represents judicial more strict constraining patentees in the<br />
enforcement of patents In addition to Judge Lourie this four<br />
relative newcomers to the court Bryson and Prost also<br />
includes the per curiam authorship which does not identify any<br />
single as an author This group drawing its all<br />
judges the bands<br />
should have shown<br />
average results 24.4% rate for patentees The
30<br />
AIPL4 Qj Vol 341<br />
lower observed win-rate figure may signal that<br />
patents viewed as less<br />
meritorious tend more often to be adjudicated per curiam<br />
chi-square test comparing individual<br />
value of 0.1 which is not statistically significant and does not allow rejection<br />
authoring judges shows<br />
of the null that the identity of authoring judges on the court does not<br />
affect who is ultimate winner For authoring judges viewed in three color<br />
bands however the P-value of the chi-square test is and our null<br />
hypothesis that the identity of the authoring judges had no impact on the<br />
outcome of the case is In other words among the bands of<br />
opinion-authoringjudges there was at least one group that is decisions<br />
in statistically different way This confirms that the combined effect of<br />
authoring judges having similar judicial philosophies has discernible impact on<br />
the outcome<br />
of the cases.55<br />
Interestingly Rule 36 summary affirmances played substantial role<br />
accounting for eighty-nine<br />
decisions far more than the<br />
disposifive-case<br />
authoring output of any individual judge<br />
With only an 18% win rate for<br />
patentees summary affirmances were significant in the overall win<br />
rate of patent owners in court down to 24.4%<br />
Inclusion of joining concurring and<br />
votes<br />
We now consider in addition<br />
to authorships how various judges voted<br />
to join concur or dissent in cases In other words we will add how<br />
the judge viewed various cases as either author or voter and combine the two<br />
numbers<br />
Wagner Petherbridge supra note evaluated claim-interpretation<br />
opinions by the judicial philosophy involved ranging strongly holistic<br />
absence of rigid rules of to strongly procedural legal analysis<br />
proceeds by relatively fixed rules The strongest holistic judges were<br />
identified as Newman Lourie and Bryson In our study which looked at<br />
who won dispositive cases these three did not rank near each other Judge<br />
Newman was in our dark<br />
grey authoring band most often for<br />
patentee<br />
and Judges Lourie and Bryson were in our light grey authoring band most<br />
often for accused<br />
Wagner and Petherbridges procedural judges<br />
were ClevengerLinn and Dyk who in our study were in three different<br />
bands This seems to suggest that judges who seem to decide similarly in<br />
one aspect perhaps function quite in<br />
respects
2006 Who Wins <strong>Patent</strong> Infringement<br />
Table 12 Results on Judges Authoring and Voting Combined<br />
Authoring or for Accused for<br />
Votin Jud <strong>Patent</strong>ee Infrin er <strong>Patent</strong>ee<br />
Dyk 12 24<br />
Rader 16 54 22.8<br />
j sa 15 53<br />
Michel 14 51<br />
Mayer 11 45<br />
clevenger 10 45<br />
Per Curiam<br />
16 73 17.9<br />
kid 36<br />
teurle<br />
Bryson<br />
10 44<br />
57<br />
18.5<br />
9.5<br />
With the added data on how judges voted test is more<br />
reliable than Note that occupants of<br />
various bands have changed with the data P-value 0.165 shows<br />
that we not reject the hypothesis the identity of voting<br />
judge no difference to the outcome The is 0.002 however for the<br />
three of voting or authoring judges statistical<br />
difference among the groups Once again this to confirm that collectively<br />
judges may be statistically factor in the<br />
outcome<br />
of the case<br />
One may speculate<br />
of decision as being<br />
precedential non-precedential or Rule summary<br />
affirmance makes<br />
difference in the outcome statistics We saw no indication it did soin terms<br />
of types of cases however seem prone to handling<br />
by one of<br />
patentees<br />
represent 19% of the study6 yet they are underrepresented at<br />
9% at 30% in the non-<br />
56<br />
Fifty out of 262<br />
cases in the three-year period<br />
Ten out of<br />
precedential opinions
32<br />
AIPLA Vol 341<br />
precedential ones.58 Rule cases they are represented nearly proportionately<br />
to their numbers at 21%<br />
Different Feeder<br />
Courts<br />
Do in patent litigations to any extent on<br />
the district from the case arrived at the As mentioned<br />
earlier nearly all the patent cases 242 out of 262 out of<br />
the Federal Circuit in the three-year in were affirmances We<br />
may therefore put our question this way Are some districts more likely than<br />
others to produce<br />
one side or the<br />
There were only seven districts<br />
that<br />
generated ten or dispositive<br />
appellate cases each in the 2002-04 appellate results are shown in the<br />
table below in the of providers dispositive cases Recall the<br />
overall win rate for patentees in our study was 24.4 percent<br />
Table 13<br />
Feeder Courts<br />
District<br />
<strong>Patent</strong>ee<br />
Accused<br />
<strong>Patent</strong>ees<br />
on Appeal<br />
Wins on Appeal<br />
Ratio<br />
Delaware 16 27.3<br />
Cal 16 5.9<br />
Ill 13 18.8<br />
Cal 10<br />
Mass 11 8.3<br />
S.NY 10.0<br />
Totals 17 75 18.5<br />
Of these districts in Central in<br />
Delaware and slightly patent owners have better success than the<br />
Twenty-six nut o1 eighty-six<br />
cases<br />
Fourteen out of cases
2006 Who Wins Infringement<br />
Cases 33<br />
dataset average.60 This means the patentee<br />
win rate coming from smaller feeders<br />
was generally higher<br />
the rate in these<br />
large<br />
feeder districts.61<br />
The numbers cases involved are too small for meaningful<br />
statistical analysis Judging from the from entire three-year population<br />
in of results in owners best<br />
dispositive patent-busy<br />
chance of prevailing during the years in question assuming all other factors<br />
were equal appears to have been by in Eastem Northern or Southern<br />
Texas in Southern California Michigan or in Colorado.62<br />
the nondispositive results as many in overall number yet not included in<br />
our study might represent more commercially significant victories even<br />
though not fully of an infringement claim<br />
60 Null hypothesis There is no difference in the end result between cases from<br />
the six feeder courts chi-square test results P-value of 0.26 which<br />
indicates there no significant<br />
correlation between feeder courts and<br />
the end result We have however less than ideal number of cases to run<br />
stable<br />
test<br />
61<br />
We looked districts with both substantial patent output<br />
and significantly<br />
higher rates in the Federal and identified six three of<br />
which are in The District of Texas the source of nine<br />
dispositive appellate produced patentee<br />
wins and accused<br />
infringer or 33% win rate The Northern and Southern of<br />
Texas and Eastern District of each produced eight dispositive<br />
appeals<br />
for patentee and for the accused infringer for win<br />
rate of The District of Colorado supplied seven cases in the three-year<br />
period of which were for patentee and were affirmed on appeal<br />
and other three going to the accused and likewise affirmed on<br />
infringer<br />
appeal or patentee win rate of courts other than those mentioned<br />
produced fewer than seven cases destined for dispositive appeal the<br />
period our study<br />
62 The win rate in less busy districts is often higher mathematically<br />
but such cases too few number to lead to statistically meaningful<br />
finding For example dispositive-case win rate coming from<br />
Louisiana was 100% this represents only two cases over the<br />
period
34<br />
Q.l<br />
341<br />
The Effect<br />
of Jury Trials<br />
Much has written recent years on the impact of<br />
increased use of juries patent casesP We undertook to look at that parameter<br />
separately First some context is necessary<br />
As discussed jury verdicts or bench the for<br />
about of appealed district court judgments in patent cases the<br />
remainder by summary judgment<br />
and in few instances by<br />
generated as for lack of personal jurisdiction We found<br />
patentees won just over half of the cases in which there jury trials<br />
winning thirty-five out of sixty-five of<br />
cases as shown in the<br />
Table 14<br />
Cases on Appeal<br />
of appellate wins accord<br />
with<br />
jury verdict<br />
31<br />
of appellate<br />
wins by negation<br />
of jury verdict<br />
of AL<br />
wins in<br />
21<br />
with<br />
verdict<br />
It of Al appellate wins by<br />
negation of jury verdict<br />
As seen here accused won jury verdicts as well although<br />
not to<br />
the same extent as patent owners Thus in the segment of patent<br />
litigation outcomes that are based on jury findings patentees have<br />
Home Court<br />
Does<br />
do<br />
patentee<br />
litigating in home state than<br />
elsewhere If we lump corporate patentees together answer<br />
is<br />
only slightly We took as corporate home the state in which the executive<br />
offices were located <strong>Patent</strong>ees won twenty-seven of victories home<br />
courts but also lost seventy cases in their courts The win rate in<br />
63<br />
e.g Albert<br />
Elderkin<br />
The at Crossroads in to Harmonize<br />
Law Jury Trial Review 20 Q.J 49<br />
Professor Kimberly Moore has patentees win sixty-eight<br />
percent of patent jury trials supra note at 386
2006 Who <strong>Patent</strong> Infringement<br />
Cases 35<br />
home courts was 27.8% slightly than the overall dispositive-case patentee<br />
win rate of 24.4%<br />
If we look at individual patentees the story is much the same<br />
Individual patentees won four at home but lost twenty-four home<br />
win rate of just over 14% mentioned the overall win rate for<br />
individual patentees was 12% other words they do slightly<br />
at home<br />
than they do overall Statistically state for the patentee or accused<br />
infringer is not significant factor the outcome of case.65<br />
Possible Effects of Counsel Differences<br />
General Attorney or <strong>Patent</strong> Attorney<br />
Some authors speculated regarding best kind of counsel to<br />
engage for patent litigation large firm or small general firmor IP boutique.66<br />
For the dispositive-case population of our study we have concluded<br />
little correlation between odds type of The results are<br />
summarized in the table67<br />
Table<br />
Type<br />
of Le ad Counsel<br />
on Appeal<br />
Won/Lost<br />
Won<br />
LGeneral Lawyer<br />
Latent Lawyer<br />
105/104 50.2<br />
153/154 49.8<br />
These results should be viewed caution because we gathered listings<br />
for appellate counsel not for below in Markinan hearings<br />
summary judgment proceedings or trials who<br />
Many parties especially<br />
have lost below counsel for appeal The lead on the appeal<br />
may therefore be when the lead below was patent attorney or<br />
general<br />
65 Null hypothesis<br />
Whether patentee or accused infringer is in its home<br />
state has nn impact on the outcome of case P-value for patentee home<br />
state is 0.6 and for accused infringers indicating that we may not reject<br />
the null hypothesis<br />
66 See e.g<br />
From the Editor PROP TODAY June 1994 at<br />
67<br />
The numbers do not equal the database times 262 cases because<br />
there was no data for some counsel<br />
The great majority of representations<br />
however are included
36 AIPLA Q.J<br />
341<br />
vice versa.68 The here not account for in<br />
representation<br />
The table appears<br />
to indicate that registered patent as counsel<br />
have larger share total representations the<br />
general attorneys 307 to 209 the win rates for each type are nearly<br />
the same within one percentage point of each type of law<br />
engaged whether the lead attorney is patent has no statistically<br />
significant impact on the end<br />
0.6 and 0.2 for winning and<br />
attorneys<br />
respectively.69<br />
Years of<br />
Counsel<br />
We next looked at the so-called grayness factor namely long<br />
lead counsel in dispositive cases had in It is<br />
widely that<br />
more senior lawyers have chance of winning because of better<br />
appellate skills or mundane factors such as sympathy from judges of<br />
similar age How proposition is remains debatable we<br />
found both winning and companies mainly older lawyers to<br />
handle their Federal<br />
in cases that<br />
table shows these cases in which we could<br />
find such of on number losing lead<br />
and few winning why<br />
total number of winners larger<br />
than the total number not prevail our overall<br />
of 262 cases we were able to find 254 lead<br />
and<br />
lead<br />
We<br />
on district court lead<br />
found parties often at several important<br />
the district court proceedings as the eve of or just<br />
after an adverse<br />
verdict<br />
had to abandon<br />
69 Null hypothesis Whether an attorney is patent has no impact on<br />
the case Because P-values are greater than 0.05 we<br />
cannot reject our null hypothesis
2006<br />
Who Wins <strong>Patent</strong> Infringement<br />
Cases 37<br />
Table 16 of<br />
Experience<br />
Lead Counsel<br />
Year<br />
0-10 Irs<br />
Winning<br />
Losing<br />
11-15 Irs<br />
Winning<br />
Losing<br />
16-20<br />
Winning<br />
Losing<br />
21 yrs<br />
Winning<br />
Losing<br />
4/0<br />
7/5<br />
11/8<br />
49/49<br />
2003 6/3 6/6 17/18 69/65<br />
2004 2/4 10/11 12/13 61/51<br />
Es 12/7 23/22 40/39 179/165<br />
Several observations can be made The first concerns the relative dearth<br />
of young lawyers as lead counsel in these cases This would be expected in<br />
civil litigation generally especially in complex or high-stakes cases both of<br />
which are what patent appeals tend to be About two-thirds of winning<br />
lawyers had more than twenty<br />
of years experience As mentioned<br />
earlier our database of cases nearly all of which are affirmances.7<br />
Accordingly the in these cases losing<br />
were nearly all appellants The<br />
appellants task on appeal is of course much greater having to persuade the<br />
court of error committed below and chance of on is<br />
appeal inherently<br />
greater for appellants Recognizing this appellant companies likely were even<br />
more motivated appellees to choose older and more experienced lead<br />
counsel This tends to be borne out at the other end of experience spectrum<br />
In those few cases in which counsel ten or fewer years of experience<br />
twelve represented appellees and seven losing appellants<br />
The second is that the experience level of counsel at least<br />
as measured in years of practice does not correlate well with or losing<br />
Both sides tend to choose older counsel as above given case one<br />
prevails and the other does not We looked cases in which<br />
specifically<br />
experience level not fit this pattern i.e where there were significant<br />
differences in the experience years between the two sides lead To<br />
equalize the in.volved the lawyers that were compared we selected<br />
subpopulation of eighteen reversal which are harder to get which<br />
the was the appellant eight cases the successful appellants counsel had<br />
more years of experience than the appellees counseL in another eight<br />
fewer<br />
years experience and in two they were the same Furtherdata collection<br />
necessary to deal effectively with factor our database is difficult to<br />
70 Reversals occurred in only twenty out of the 262 dispositive cases in our<br />
study
38<br />
AIPLA Q.J Vol 341<br />
draw any conclusions about experience level playing in winning or losing<br />
patent litigat-ions<br />
It however that prefer grayness.7<br />
IV<br />
SOME FINAL OBSERVATIONS<br />
The often been of having pro-patent<br />
leaning.72 There is nothing our findings that would support that view<br />
<strong>Patent</strong>ees lose most of cases before court and for the most the court<br />
affirms negative of courts in dispositive cases<br />
There is no to think properly institution<br />
whatever that may mean should decide cases fifty-fifty<br />
that conclusion require independently assessing the individual merits<br />
of the case pool before the court and how various cases<br />
ought to out and comparing how court in fact<br />
The numbers cam-tot perform function The weight<br />
and the strength of arguments can and vary from case to case<br />
Moreover patent disputes are frequently charged and we<br />
have no basis for that litigants in patent cases act rationally in assessing<br />
71<br />
two sample<br />
t-test<br />
comparing the of admittance the two groups of<br />
attomeys shows P-value of 0.11 that is no statistically<br />
significant between the two seniority groups The<br />
difference practice years of the winning attomeys and the<br />
ones is between -3.201 to 0.363 years assuming 95%<br />
72<br />
Preponderance 928 2004 mentioning<br />
it is<br />
generally that the pro-patent<br />
bias tenure Allan Litmann Balance<br />
System 37 IDEA 1996-1997 view that<br />
Circuit pro-patent bias One of the scholars to earliest speculate about<br />
possible pro-patent attitudes of the Circuit was Professor Rochelle<br />
Cooper Dreyfuss See Rochelle Circuit<br />
Study Specialized Courts REV<br />
Priest some circumstances the results<br />
approach<br />
fifty-fifty<br />
See George Klein<br />
Disputes for <strong>Litigation</strong> STuD The circumstances<br />
included some that not apply to modem patent<br />
litigations<br />
that the are risk-neutral reality patent owners<br />
here the parties think in roughly the same in how<br />
money damages and injunctions accused put higher<br />
value on fear on paying damages than<br />
patentees<br />
do
2006<br />
Who Wins <strong>Patent</strong> Infringement<br />
Cases<br />
39<br />
the strength of their claims or defenses Under these real conditions<br />
conscientious judge with in<br />
strong pro-patent sympathies might<br />
view of the<br />
evidence and issues brought forward decide most cases for the accused<br />
fringer while another one with<br />
conscientious judge hypothetically<br />
philo50Phl hostility to still<br />
the patent systemsmight end for the<br />
up deciding<br />
owner in most cases Therefore not to characterize the<br />
it possible<br />
patent<br />
on the basis of percentage of decisions going one way or the other we did If<br />
have to do that however we would have to say the was either hostile to or<br />
at least suspicious<br />
of and their owners<br />
patents<br />
The reasonsbehind the wide margin of to one for decisions against<br />
are unclear the result is relatively constant during the three<br />
patent<br />
years of the study and is consistent with other scholarship in the field 74 We are<br />
inclined to believe that are too often pushing the envelope in quests<br />
Intemet service Patstats indicates that most accused<br />
both litera1<br />
infringers strongly prevailed on the infringement question<br />
and under the doctrine of equivalents during the period<br />
infringement<br />
question For 2004 accused prevailed eighty-three literal<br />
decisions and patentees<br />
in forty-four Doctrineofequivalant5<br />
infringement<br />
rulings showed higher disparity forty-six to ten See FOR<br />
HOUSTON LAW Cm PATETATS<br />
INTELLECTUAL PROP INFO LAW<br />
U.S PATENT LrrIGATION STATISTICS DECISIONS 21J04<br />
visited 2005 For 2003<br />
http//wWW.pat5tats.oI2004.hhtl<br />
favored the accused infringer by 155 to fiftythree<br />
results on literal infringement<br />
as did the results on doctrine of equivalents infringements seventy-one<br />
to nineteen See INST FOR IWrELLECTUAL PROP INFO LAW supra note<br />
Professor Moores studies on district court results in patent litigation<br />
lists<br />
win rates by district concluding patentees win 58% of the cases See<br />
Kimberly Moore Forum Shopping In <strong>Patent</strong> Cases Does Geographic Choice<br />
79 NC REV 889916-172001 Her dataset however<br />
Innovation<br />
is only for cases that<br />
Affect<br />
reached trial 1409 cases over sixteen years and hence<br />
does include the much largernumber of summary judgments entered<br />
and appealed
40 AIPLA Qj Vol 341<br />
for financial return on their investment in patents.75 They overvalue their patents<br />
and assign an unrealistic scope<br />
to the of patent claims driven<br />
perhaps by what they thought the claims ought to have said<br />
Another possible reason for the number patentee victories is that<br />
in to win judgment patent owner must only prove infringementof<br />
at least one claim the patent but must also<br />
every validity<br />
attack on that patent claimand every charge of inequitable conduct before<br />
United States <strong>Patent</strong> Office USPTO<br />
If it fails on any of these<br />
points the accused infringer wins<br />
is an increasingly<br />
uncertain at due to the of interpreting proper<br />
scope to be accorded various words of the Direct<br />
type<br />
infringement is fairly rare leaving claim scope as the central issue in most<br />
litigation today The patentee tends to assign broader meaning to the<br />
terms than it<br />
might have consciously about when patent was being<br />
drafted<br />
and prosecuted to issuance<br />
This investment<br />
is<br />
costly median cost for preparing<br />
filing patent application of minimal was $5504 with more<br />
complex applications running and $10000 on the<br />
area of technology involved and is for United AM<br />
INTELLEcTUAL PROP LAW REPORT OF THE ECONOMK SURVEY 87-89<br />
2003 For filings in the <strong>Patent</strong> Office and Japan filing<br />
and prosecution costs are involved To must be prosecution<br />
costs issue and maintenance Multinational patent coverage today<br />
costs least per invention and that is conservative See e.g<br />
William Thompson Reforming the <strong>Patent</strong> the 21st 21<br />
AIPLA 171 177 n.2 1993 the experience one company for<br />
which single patenting in ten countries costs approaching<br />
$250000 Jim Ewing Procurement Peter to Pay <strong>Paul</strong> INTELL<br />
PROP TODAY Nov 2003 at 32 how relatively simple patent<br />
filing up costing over $110000 for coverage in seven major industrial<br />
countries Mossinghoff Vivian Kuo World <strong>Patent</strong> Circa<br />
2OXX AD 80J TRADEMARK OFF 523 5241998 noting that<br />
the cost of securing maintaining comprehensive worldwide patent is<br />
within<br />
range of $750000 to $1000000<br />
76<br />
The Federal Circuit en banc the questions methodology<br />
in<br />
patent claim language See Phillips AWH 415<br />
1303 75 BNA 1321 2005 court sought to<br />
provide on the sequence and weight to be given<br />
to various<br />
traditional tools for carrying out this including patent<br />
specification its USPTO file regular language dictionaries and<br />
technical<br />
dictionaries
2006 Who Wins <strong>Patent</strong> Infringement Cases<br />
On much of prior art or literature is<br />
difficult to find sometimes made so by law Consider example<br />
to search patent applications fruitful source of pertinent<br />
prior literature Until<br />
are on file for<br />
months are held in secrecy by the cannot be seen by<br />
interested example Offers for sale are often highly secret<br />
yet any such starts one-year clock running filing not only<br />
offeror entity but by anyone else as well.Th<br />
even with diligent search<br />
attempts the most relevant prior literature hidden the patent applicant<br />
her counsel patent examiners only to appear later dredged up<br />
by highly in an infringementlawsuit By that time the<br />
patentee<br />
tells itself it has invested too much to give up and the case proceeds to<br />
negative judgment<br />
These patent owners and it is not surprising that<br />
they fail in most of their attempts conspicuous in our<br />
study is Japanese companies As patent owners they appeared no dispositive<br />
cases in our three-year As accused in<br />
and prevailed in all of them suggests level of caution on the part<br />
35 U.S.C 122 2000 part<br />
Confidentiality Except as provided in subsection applications for<br />
patents shall be kept in confidence the and Trademark Office<br />
and no information concerning the same given without authority of<br />
applicant or unless necessary to carry out the provisions an<br />
Act of or in such special circumstances as be determined<br />
may<br />
by the<br />
Publication<br />
in general<br />
Subject to paragraph each application patent shall be<br />
published in accordance determined by the<br />
promptly after expiration of period of 18 months from earliest<br />
filing is sought At the request of<br />
the<br />
such<br />
an application may be published earlier than the end of<br />
period<br />
78<br />
35 U.S.C 102 2000 provides in part person<br />
shall entitled to<br />
patent unless the invention was. sale in this country more<br />
than one prior to the of the for patent in the<br />
United<br />
States
42 Q.J<br />
Vol 341<br />
of Japanese managements about the entire field of U.S patent litigation that<br />
other entities do not share<br />
Another important factor in explainingwhy patent owners<br />
usually<br />
is the summary judgment for in<br />
recent years79 and the recognition by many courts that<br />
patent cases in particular<br />
usually present relatively fact issues to be The contents of the patent<br />
and its file and the of the prior literature affecting validity are<br />
normally known discovery efforts as the<br />
design functions of accused products or processes While<br />
few issues such as willfulness the intent prong of inequitable<br />
conduct before the and determination could<br />
these points matter only have not been invalid and if<br />
infringement has made out Usually case does not that<br />
summary judgment is granted typically in favor of the accused<br />
As set above accused infringers are usually patent<br />
owners This is<br />
perhaps to be expected as plaintiff patentees are motivated<br />
to pursue litigation or royalty-bearing<br />
from<br />
do companies<br />
than companies with less to pay Many patentees are<br />
individuals none of the accused infringers were The wealth<br />
very likely accused to prevail more effort into the<br />
case than<br />
average patent owner<br />
Foreign-owned companies achieved no less favorable than<br />
domestic companies Two possible explanations come to mind<br />
although perceptions are longstanding no firm evidence<br />
such biases exist Second entities believe is bias them<br />
and are often uncomfortable American civil<br />
and expense These factors to settle more so that the ones that<br />
proceed to dispositive judgment are carefully to be strong ones for their<br />
positions<br />
This loosening is usually to the Courts re-articulation of<br />
the in three 1986 cases Matsushita Indus Co Zenith<br />
Radio 475 U.S 574 1986 Anderson Lobby Inc<br />
U.S and Celotex Corp U.S 1986<br />
These cases emphasized<br />
trials were needed only in cases in which the<br />
pretrial indicated trier of an issue<br />
either<br />
way In all cases summary judgment<br />
full or partialwas<br />
appropriate
2006 Who Wins <strong>Patent</strong> Infringement Cases 43<br />
Home court advantage is often exaggerated and may skew case<br />
assessments of patentees as plaintiffs Plaintiffs their lawyers often believe<br />
they will an advantage being locaL to the or jury Accents<br />
colloquial figures speech names and places mentioned in testimony<br />
are thought to be helpful to local parties As set here however we found<br />
only about percentage-point improvement from 24.4% to 27.8%<br />
patentee litigating the state of its principal<br />
offices versus elsewhere<br />
that most contested judgments in patent cases in the courts are summary<br />
judgments rather following trial not much opportunity<br />
for local flavors to permeate patent cases
Page 1<br />
35 U.S.C.A. § 102<br />
Effective: November 02, 2002<br />
UNITED STATES CODE ANNOTATED<br />
TITLE 35. PATENTS<br />
PART II--PATENTABILITY OF INVENTIONS AND GRANT OF PATENTS<br />
CHAPTER 10--PATENTABILITY OF INVENTIONS<br />
§ 102. Conditions for patentability; novelty and loss of right to patent<br />
A person shall be entitled to a patent unless--<br />
(a) the invention was known or used by others in this country, or patented or described in a printed publication in<br />
this or a foreign country, before the invention thereof by the applicant for patent, or<br />
(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on<br />
sale in this country, more than one year prior to the date of the application for patent in the United States, or<br />
(c) he has abandoned the invention, or<br />
(d) the invention was first patented or caused to be patented, or was the subject of an inventor's certificate, by the<br />
applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in<br />
this country on an application for patent or inventor's certificate filed more than twelve months before the filing of<br />
the application in the United States, or<br />
(e) the invention was described in (1) an application for patent, published under section 122(b), by another filed in<br />
the United States before the invention by the applicant for patent or (2) a patent granted on an application for patent<br />
by another filed in the United States before the invention by the applicant for patent, except that an international<br />
application filed under the treaty defined in section 351(a) shall have the effects for the purposes of this subsection<br />
of an application filed in the United States only if the international application designated the United States and was<br />
published under Article 21(2) of such treaty in the English language; [FN1] or<br />
(f) he did not himself invent the subject matter sought to be patented, or<br />
(g)(1) during the course of an interference conducted under section 135 or section 291, another inventor involved<br />
therein establishes, to the extent permitted in section 104, that before such person's invention thereof the invention<br />
was made by such other inventor and not abandoned, suppressed, or concealed, or (2) before such person's invention<br />
thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or<br />
concealed it. In determining priority of invention under this subsection, there shall be considered not only the<br />
respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one<br />
who was first to conceive and last to reduce to practice, from a time prior to conception by the other.<br />
[FN1] So in original. The semicolon probably should be a comma.<br />
Current through P.L. 109-279 approved 08-17-06<br />
Copr. © 2006 Thomson/West. No. Claim to Orig. U.S. Govt. Works<br />
END OF DOCUMENT<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
Page 1<br />
35 U.S.C.A. § 282<br />
Effective: November 02, 2002<br />
UNITED STATES CODE ANNOTATED<br />
TITLE 35. PATENTS<br />
PART III--PATENTS AND PROTECTION OF PATENT RIGHTS<br />
CHAPTER 29--REMEDIES FOR INFRINGEMENT OF PATENT, AND OTHER ACTIONS<br />
§ 282. Presumption of validity; defenses<br />
A patent shall be presumed valid. Each claim of a patent (whether in independent, dependent, or multiple dependent<br />
form) shall be presumed valid independently of the validity of other claims; dependent or multiple dependent claims<br />
shall be presumed valid even though dependent upon an invalid claim. Notwithstanding the preceding sentence, if a<br />
claim to a composition of matter is held invalid and that claim was the basis of a determination of nonobviousness<br />
under section 103(b)(1), the process shall no longer be considered nonobvious solely on the basis of section<br />
103(b)(1). The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting<br />
such invalidity.<br />
The following shall be defenses in any action involving the validity or infringement of a patent and shall be pleaded:<br />
(1) Noninfringement, absence of liability for infringement or unenforceability,<br />
(2) Invalidity of the patent or any claim in suit on any ground specified in part II of this title as a condition for<br />
patentability,<br />
(3) Invalidity of the patent or any claim in suit for failure to comply with any requirement of sections 112 or 251 of<br />
this title,<br />
(4) Any other fact or act made a defense by this title.<br />
In actions involving the validity or infringement of a patent the party asserting invalidity or noninfringement shall<br />
give notice in the pleadings or otherwise in writing to the adverse party at least thirty days before the trial, of the<br />
country, number, date, and name of the patentee of any patent, the title, date, and page numbers of any publication to<br />
be relied upon as anticipation of the patent in suit or, except in actions in the United States Court of Federal Claims,<br />
as showing the state of the art, and the name and address of any person who may be relied upon as the prior inventor<br />
or as having prior knowledge of or as having previously used or offered for sale the invention of the patent in suit.<br />
In the absence of such notice proof of the said matters may not be made at the trial except on such terms as the court<br />
requires. Invalidity of the extension of a patent term or any portion thereof under section 154(b) or 156 of this title<br />
because of the material failure--<br />
(1) by the applicant for the extension, or<br />
(2) by the Director,<br />
to comply with the requirements of such section shall be a defense in any action involving the infringement of a<br />
patent during the period of the extension of its term and shall be pleaded. A due diligence determination under<br />
section 156(d)(2) is not subject to review in such an action.<br />
Current through P.L. 109-279 approved 08-17-06<br />
Copr. © 2006 Thomson/West. No. Claim to Orig. U.S. Govt. Works<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
Page 1<br />
35 U.S.C.A. § 283<br />
Effective: [See Text Amendments]<br />
UNITED STATES CODE ANNOTATED<br />
TITLE 35. PATENTS<br />
PART III--PATENTS AND PROTECTION OF PATENT RIGHTS<br />
CHAPTER 29--REMEDIES FOR INFRINGEMENT OF PATENT, AND OTHER ACTIONS<br />
§ 283. Injunction<br />
The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the<br />
principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems<br />
reasonable.<br />
Current through P.L. 109-279 approved 08-17-06<br />
Copr. © 2006 Thomson/West. No. Claim to Orig. U.S. Govt. Works<br />
END OF DOCUMENT<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
THE OPINION ENTERED TODAY IS NOT<br />
BINDING PRECEDENT OF THE BOARD<br />
Filed by: Merits Panel Paper No. 85<br />
Interference Trial Section<br />
Box Interference<br />
Washington, D.C. 20231<br />
Tel: 703-308-9797<br />
Fax: 703-305-0942<br />
UNITED STATES PATENT AND TRADEMARK OFFICE<br />
_______________<br />
BEFORE THE BOARD OF PATENT APPEALS<br />
AND INTERFERENCES<br />
_______________<br />
MINGCHIH M. TSENG<br />
Junior Party<br />
(Application 08/461,318) 1 ,<br />
v.<br />
SIAMAK DOROODIAN-SHOJA<br />
Senior Party<br />
(<strong>Patent</strong> No. 5,388,331). 2<br />
_______________<br />
<strong>Patent</strong> Interference No. 104,482<br />
_______________<br />
Before SCHAFER, LEE and TORCZON, Administrative <strong>Patent</strong> Judges.<br />
LEE, Administrative <strong>Patent</strong> Judge.<br />
MEMORANDUM OPINION AND JUDGMENT<br />
Introduction<br />
Senior party patentee Doroodian-Shoja filed (1) preliminary<br />
1<br />
Filed on June 20, 1995. Accorded the benefit of<br />
application 08/269,495, filed July 1, 1994. The real party in<br />
interest is The Gillette Company.<br />
2<br />
Based on application 08/188,244, filed January 28, 1994.<br />
The real party in interest is Arthur D. Little Enterprises, Inc.
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
motion 1 alleging no interference-in-fact; and (2) preliminary<br />
motion 2 for judgment under 35 U.S.C. § 135(b). Junior party<br />
applicant Tseng filed (1) preliminary motion 1 to add more claims<br />
to its involved application; (2) preliminary motion 2 for<br />
judgment against Doroodian's patent claims 1-6 under 35 U.S.C.<br />
§ 112, first paragraph, for lack of an enabling disclosure; (3)<br />
preliminary motion 3 for judgment against Doroodian's patent<br />
claims 1-6 for indefiniteness under 35 U.S.C. § 112, second<br />
paragraph; (4) preliminary motion 4 for judgment against<br />
Doroodian's patent claims 1-6 under 35 U.S.C. § 112, first<br />
paragraph, for lack of written description in the specification;<br />
and (5) preliminary motion 5 for judgment against claims 1-6 of<br />
Doroodian's patent claims 1-6 as being unpatentable over prior<br />
art.<br />
Findings of Fact<br />
The following findings of fact as well as those contained in<br />
the discussion portion of this opinion are supported by a<br />
preponderance of the evidence.<br />
1. This interference was declared on January 12, 2000.<br />
2. Junior party Tseng is involved on the basis of U.S.<br />
application 08/461,318, filed June 20, 1995.<br />
3. Senior party Doroodian is involved on the basis of U.S.<br />
<strong>Patent</strong> No. 5,388,331, filed January 28, 1994.<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
4. At the time of declaration of this interference, junior<br />
party Tseng was accorded the benefit of application 08/269,495,<br />
filed July 1, 1994.<br />
5. The involved application claims of junior party Tseng<br />
are claims 113, 117-123 and 130-136, which all correspond to the<br />
count in this interference.<br />
6. The involved patent claims of senior party Doroodian<br />
are claims 1-6, which also all correspond to the count of this<br />
interference.<br />
7. Of Tseng's involved applications claims, claims 113,<br />
117, 118, 134 and 135 are each independent claims and the rest<br />
are dependent claims.<br />
8. Of Doroodian's involved patent claims, only claim 1 is<br />
an independent claim.<br />
No. 1 as:<br />
9. The count in this interference is set forth in Paper<br />
Claim 1 of Doroodian or Claim 135 of Tseng.<br />
10. Claim 1 of Doroodian reads as follows:<br />
1. In a disposable razor or razor cartridge<br />
comprising at least one blade mounted in a head or<br />
frame, said blade having a shaving edge, the<br />
improvement comprising wear indicating means for<br />
indicating the amount of wear on the shaving edge, said<br />
wear indicating means being located on the head or<br />
frame in close proximity to the shaving edge of said<br />
blade, and said wear indicating means comprising a<br />
strip of material extending generally parallel to the<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
shaving edge, said strip of material gradually wearing<br />
away as the disposable razor or razor cartridge is used<br />
in shaving, the amount of material wearing away being<br />
correlated with the amount of wear on the shaving edge<br />
to provide a visual indication of the relative wear on<br />
the blade.<br />
11. The first paragraph of the BACKGROUND OF THE INVENTION<br />
section of the specification of senior party Doroodian's involved<br />
patent states:<br />
This invention relates to disposable razors, and<br />
particularly to a visual means for readily indicating<br />
to the user the relative amount of wear that the blade<br />
of a given disposable razor has undergone.<br />
12. The fourth paragraph of the BACKGROUND OF THE INVENTION<br />
section of the specification of senior party Doroodian's involved<br />
patent states:<br />
It is believed that the typical user of a<br />
disposable razor would benefit from the inclusion of<br />
some reliable, and easily recognizable, visual<br />
indicator of the relative amount of wear that a<br />
particular disposable razor blade has undergone. With<br />
such a visual indication, it would not be necessary to<br />
determine the wear on the razor by the amount of pain<br />
or discomfort felt when the blade was used.<br />
13. Doroodian's specification describes multiple<br />
embodiments of how a visual indication may be provided on a razor<br />
cartridge which reveals the relative wear on the shaving blade<br />
over a plurality of shaving sessions, including the embodiments<br />
illustrated in Figures 3a through 3j and 4a through 6b.<br />
14. Doroodian's specification does not fully disclose how<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
the embodiments shown in its Figures 2 and 7 work or operate.<br />
15. All of the embodiments in Doroodian's specification for<br />
which there is an adequate disclosure of how they operate provide<br />
a "multiple points-in-time" indicator strip that gives a visual<br />
indication of the relative wear on the shaving blade beyond<br />
simply that the shaving cartridge or the indicator strip has<br />
reached its intended useful life.<br />
16. Junior party Tseng's application claim 135 reads:<br />
A razor cartridge comprising a blade and an [sic]<br />
inmovable skin engaging member affixed adjacent said<br />
blade, said skin engaging member located such that it<br />
contacts the skin of a user during shaving, said skin<br />
engaging member comprising two adjoining disparately<br />
colored, solid polymeric layers, said layers comprising<br />
an erodable skin engaging layer of a first color<br />
overlaying a non-skin engaging layer of a different<br />
color, wherein said skin engaging layer is adapted to<br />
erode during contact with said skin during shaving to<br />
visually expose said non-skin engaging layer over time.<br />
17. The Field of the Invention section of junior party<br />
Tseng's specification, as filed on June 20, 1995 (Tseng Exhibit<br />
2008), reads in its entirety as follows:<br />
This invention relates to an improved skin<br />
engaging member for use in razor blade cartridge<br />
assemblies and shaving systems of the wet shave type.<br />
The present invention resides broadly in providing the<br />
skin engaging cap and/or guard surfaces with<br />
configurations which reduce frictional drag of the<br />
razor across the skin. This invention also relates to<br />
a novel method of manufacturing the skin engaging<br />
member of the present invention.<br />
18. The SUMMARY OF THE INVENTION portion of Tseng's<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
specification, as filed on June 20, 1995 (Tseng Exhibit 2008),<br />
lists three objectives for Tseng's invention:<br />
An object of the present invention is to provide a<br />
skin engaging member with improved mechanical strength.<br />
Another object of the present invention is to<br />
provide a skin engaging member with improved shaving<br />
aid material release characteristics.<br />
Yet another object of the present invention is to<br />
provide a wear indicating skin engaging member.<br />
19. On page 6 of Tseng's specification as filed on June 20,<br />
1995 (Tseng Exhibit 2008), it is stated:<br />
In an embodiment of the present invention a wear<br />
indicating effect is produced when the sheath material<br />
and the core material are made of disparately colored<br />
materials (e.g. white colored sheath and blue colored<br />
core). Upon use, the sheath material over the skin<br />
engaging surface is typically worn off through use.<br />
With sufficient use, a second colored region<br />
represented by the core is exposed, thus, providing the<br />
user with [an] indication that the shaving unit and/or<br />
skin engaging surface have reached their effective<br />
life. In a preferred embodiment, the sheath material<br />
consists of polyethylene oxide/polystyrene mixture<br />
which is white in color and the core consists of nylon<br />
and/or styrene which has been colored with a FD&C #2<br />
dye. Other suitable dyes or pigments include FD&C Red<br />
No. 40, Erythrosine (FD&C Red No. 3), Brilliant Blue<br />
FCF (FD&C Blue No. 1), Indigotine (FD&C Blue No. 2),<br />
Tartozine (FD&C Yellow No. 5), Sunset Yellow FCF (FD&C<br />
Yellow No. 6) and Fast Green FCF (FD&C Green No. 3) and<br />
Titanium Dioxide. (Emphasis added).<br />
20. With respect to the language on page 6 of Tseng's<br />
specification stating that "a second colored region represented<br />
by the core is exposed," the phrase makes no distinction between<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
partial exposure and complete exposure of the core. Tseng's<br />
specification contains no reference to or explanation of any<br />
meaningful distinction between partial and complete exposure of<br />
the core. The core is exposed when any portion of it is exposed.<br />
21. Tseng's specification makes no mention of the duration<br />
of or any significance, value, or benefit, of the time period,<br />
assuming that there is any such time period, between partial<br />
exposure and full exposure of the differently colored core.<br />
Tseng's specification does not describe or disclose that a<br />
meaningful such period exists or that it has a duration longer<br />
than a single shaving session.<br />
22. Tseng's specification does not describe or disclose a<br />
"multiple points-in-time" indicator strip which provides a visual<br />
indication of the relative wear on the shaving blade from one<br />
shaving session to the next. The visual indication provided by<br />
exposure of the core reveals only that the shaving unit and/or<br />
the skin engaging layer has reached its intended useful life.<br />
Discussion<br />
A. Doroodian's preliminary<br />
motion 1 asserting that<br />
there is no interference-in-fact<br />
<strong>Patent</strong>able distinctness between the parties' claims, in<br />
either direction, is sufficient to demonstrate no interferencein-fact.<br />
As the moving party, Doroodian has the burden of proof<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
to demonstrate either (1) that none of its claims corresponding<br />
to the count would have been anticipated by or rendered obvious<br />
over any of Tseng's involved claims, or (2) that none of Tseng's<br />
claims corresponding to the count would have been anticipated by<br />
or rendered obvious over any of Doroodian's involved claims.<br />
Doroodian's preliminary motion 1 chooses to show the former, not<br />
the latter. In the Summary Of Argument portion of its<br />
preliminary motion 1, Doroodian states:<br />
The Doroodian claims [1-6] require a wear indicating<br />
means (a strip of material) having two requirements<br />
that are not taught by the involved Tseng claims or<br />
suggested by the subject matter of the involved Tseng<br />
application and claims: (1) gradually wearing away<br />
during use, due to abrasion with the skin of the user,<br />
where the amount of material wearing away is correlated<br />
with the amount of wear on the shaving edge of the<br />
blade; and (2) as the material wears away, the user is<br />
provided with a visual indication of the relative wear<br />
on the blade. These patentable features recited by the<br />
involved Doroodian '331 patent Claims 1-6 are neither<br />
claimed by the Tseng claims nor disclosed nor rendered<br />
obvious by the subject matter of the Tseng application.<br />
To connect the argument to its claims, Doroodian at page 17 of<br />
its preliminary motion 1, in lines 5-12, states:<br />
The "wear indicating means" limitation found in<br />
independent Claim 1 and dependent Claims 2-6 of the<br />
Doroodian '331 patent, can be subdivided into at least<br />
two (2) separate elements:<br />
(1) a material which is primarily worn away gradually<br />
via abrasion and friction where the amount of<br />
material gradually abrading or wearing away is<br />
correlated with the wear on the shaving edge; and<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
(2) the amount of material gradually abrading or<br />
wearing away provides a visual indication of the<br />
relative wear on the blade to the user. (Emphasis<br />
in original).<br />
Doroodian argues that the two claim elements identified<br />
above 3 neither expressly nor inherently form a part of the<br />
subject matter of the involved Tseng claims and thus the subject<br />
matter of the involved Tseng claims does not anticipate the<br />
subject matter of the involved Doroodian '331 claims. According<br />
to Doroodian, these two claim elements also render Doroodian's<br />
claims 1-6 nonobvious over any one of Tseng's involved claim.<br />
We are only partially persuaded by Doroodian's argument. In<br />
our view, only the second of the two elements identified above is<br />
not taught by the involved claims of Tseng. That difference<br />
alone, however, is sufficient to support the conclusion that none<br />
of Doroodian's involved claims is anticipated by or would have<br />
been rendered obvious over any of Tseng's involved claims.<br />
We first discuss why Doroodian's assertion is incorrect that<br />
none of Tseng's involved claims satisfies the first of the two<br />
above-identified claim elements, i.e., that the material is worn<br />
3<br />
Tseng correctly notes that the word "primarily" nowhere<br />
appears in any of Doroodian's claims 1-6 in connection with the<br />
material of the wear indicating means being worn away by abrasion<br />
or friction. However, the mischaracterization is without harm<br />
because if a material is representable as being worn away by<br />
abrasion or friction it reasonably would or should be "primarily"<br />
worn away by abrasion or friction.<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
away gradually by abrasion and friction and the amount of<br />
material gradually abrading or wearing away is correlated with<br />
the wear on the shaving edge. Thereafter, we will discuss why<br />
Doroodian's assertion is correct that none of Tseng's involved<br />
claims satisfies the second of the two above-identified claim<br />
elements about providing a visual indication on the relative wear<br />
of the blade.<br />
Our interference-in-fact discussion will not include Tseng's<br />
independent claim 134, because as we will explain later that<br />
claim is unpatentable under 35 U.S.C. § 112, first paragraph. In<br />
the analysis of Doroodian's assertion of no interference-in-fact,<br />
we need not discuss any claim of Tseng which is unpatentable.<br />
We reject Doroodian's argument that because party Tseng had<br />
previously argued to the examiner prior to declaration of this<br />
interference that its claimed invention is patentably distinct<br />
from the claims in Doroodian's involved patent, Tseng cannot now<br />
credibly argue otherwise. Tseng's argument to the primary<br />
examiner was unsuccessful and was also directed to claims<br />
different from those now involved in the interference. Tseng is<br />
not restricted to a position it had previously unsuccessfully<br />
taken before a primary examiner, even if the argument is directed<br />
to the same claims. Tseng has obtained no apparent benefit from<br />
its previous argument, which would render unfair the taking of a<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
different position now.<br />
Each of Tseng's independent claims 113, 117, 118 and 135<br />
recites a skin engaging member which includes an erodible skin<br />
engaging layer of a first color overlaying a non-skin engaging<br />
layer of a different color. Each of claims 113, 117, 118 and 135<br />
further recites that the skin engaging layer erodes or is adapted<br />
to erode during contact with skin during shaving to visually<br />
expose the non-skin engaging layer.<br />
We find that according to Tseng's disclosure all described<br />
erosion of the skin engaging layer "during contact" with the<br />
shaver's skin and "during shaving" are gradual and are through<br />
abrasion and friction. We further find that Tseng's disclosure<br />
does not contemplate, recognize, or refer to any erosion through<br />
ordinary use of the shaving cartridge during contact with skin<br />
and during shaving that is not gradual or that is not due to<br />
abrasion or friction. For instance, the shaving aid constituting<br />
Tseng's skin engaging layer is for providing shaving assistance<br />
through "multiple" shaves and the Tseng specification does not<br />
allude to any possible use for a sudden release of all shaving<br />
aid in one stroke of the razor or a single shaving session. In<br />
light of these findings concerning Tseng's specification, we find<br />
that the erosion claimed by Tseng is implicitly gradual.<br />
Notwithstanding that Tseng's disclosed skin engaging layer<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
comprises between 70% to 100% of a water soluble shaving aid, the<br />
erosion "during contact" with skin and "during shaving," as<br />
described in Tseng's disclosure is via abrasion and friction with<br />
skin. Even though Tseng's disclosed skin engaging layer is<br />
mostly, if not entirely, water soluble and is designed to<br />
dissolve or leech away during use, it is not worn away from the<br />
razor cartridge until the razor cartridge is applied in physical<br />
contact with the skin of the shaver and stroked over the area<br />
being shaved. Water solubility of the shaving aid facilitates<br />
the material's being worn off the skin engaging layer during<br />
contact with skin, and does not change the fact that abrasion and<br />
friction are responsible for wearing the material off the skin<br />
engaging layer. Merely dissolving material in water is not<br />
ordinarily considered wear on the material. Even dissolved<br />
portions of the material need to be removed, and that is done by<br />
abrasion and friction with skin during shaving. Tseng's<br />
disclosure neither refers to nor acknowledges the existence of<br />
any way to cause erosion of shaving aid material during skin<br />
contact and during shaving that would not be due to abrasion and<br />
friction with skin. Furthermore, if the material eroded away<br />
without having contacted the skin, it would not constitute a<br />
shaving aid - Tseng's disclosed intended use for the material.<br />
In light of our findings concerning Tseng's disclosure, we<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
conclude that the gradual wearing down of Tseng's skin engaging<br />
layer during contact with skin and during shaving, as is<br />
specified in Tseng's claims 113, 117, 118 and 135, is indeed by<br />
abrasion and friction.<br />
As for whether the material gradually abrading or wearing<br />
away is correlated to the wear on the shaving edge, we find that<br />
that is an inescapable and necessary result which always follows<br />
from practicing the invention described in Tseng's disclosure.<br />
Tseng's specification recognizes that the shaving blade wears<br />
down and has only a limited life. See Tseng specification at<br />
page 5, lines 21-22. We find that during the ordinary and<br />
intended use of Tseng's disclosed invention, the wearing down of<br />
the skin engaging layer or shaving aid "during contact" with skin<br />
and "during shaving" is always associated with shaving action on<br />
the shaving blade.<br />
While it is true that a cartridge may be placed in a pot of<br />
warm water and in sufficient time the soluble portions of the<br />
skin engaging layer can dissolve entirely without the shaving<br />
blade ever being used or worn. But based on Tseng's<br />
specification, such an event falls clearly outside of the<br />
intended and ordinary use of the disclosed razor cartridge. We<br />
find that for Tseng's disclosed invention, any time the razor<br />
cartridge is used in actual shaving, erosion of the skin engaging<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
layer during skin contact and during shaving accompanies some<br />
wear on the shaving blade, without exception. Note that Tseng's<br />
claims 113, 117, 118 and 135 refers to erosion of the skin<br />
engaging layer "during contact" with skin and "during shaving."<br />
See also lines 12-15 of column 3 of Doroodian's specification,<br />
which states: "The strip should be so located that it is<br />
virtually constantly in contact with the skin and hair or beard<br />
during the shaving stroke."<br />
Doroodian's claims require "correlation" to blade wear only<br />
generally. No particular relationship is specified in the<br />
claims. Also, no special meaning is defined in Doroodian's<br />
specification for the term "correlate," which according to<br />
Merriam Webster's Collegiate Dictionary, Tenth Edition, 1999, has<br />
the following general meaning as a verb:<br />
2: to bear reciprocal or mutual relations: correspondvt<br />
1 a: to establish a mutual or reciprocal relation<br />
between b: to<br />
show correlation or a causal relationship between 2: to<br />
present or set forth so as to show relationship . . . .<br />
The only paragraph in the portion of Doroodian's<br />
specification entitled "DETAILED DESCRIPTION OF THE PREFERRED<br />
EMBODIMENT" which uses the word "correlate" is this (column 5,<br />
lines 22-30):<br />
An advantage of the subject invention is that the<br />
amount of wear undergone by strip itself is related to<br />
the "toughness" of the skin and hair being shaved <br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
i.e., as stated above, "tough" hair will cause the<br />
indicator strip to wear away more rapidly than "soft"<br />
hair. Thus the amount of wear on the strip correlates<br />
well with the amount of wear on the blade. (Emphasis<br />
added.)<br />
What the above-quoted passage from Doroodian's specification<br />
indicates is that two elements are well correlated if simply that<br />
more of one means more of the other. This broad meaning of the<br />
term "correlate" is not disputed by Doroodian's counsel during<br />
oral argument on May 23, 2001, who responded to questions from<br />
the panel on what "correlate" means by stating that no particular<br />
relationship is necessary and that so long as both elements move<br />
in the same direction there is correlation.<br />
In light of the recitation in Tseng's claims 113, 117, 118<br />
and 135 that the skin engaging layer erodes during contact with<br />
skin and during shaving, we find that it is inherent that during<br />
ordinary and intended use of Tseng's claimed razor cartridge more<br />
erosion on the skin engaging layer means more wear of the shaving<br />
edge or blade. As skin contact erodes the skin engaging layer,<br />
the cutting action of the blade on hair wears down the shaving<br />
blade. Our finding of inherency is supported by the following<br />
cross-examination testimony of Doroodian's technical witness<br />
Anthony R. Booth (Tseng Exhibit 2089, page 527):<br />
Q. Is the amount of material that leaches and<br />
erodes away from the outer layer 72 [Tseng's cartridge]<br />
correlated with wear on the edges of the blade 60 and<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
62<br />
[Doroodian's counsel]:<br />
Objection.<br />
A. When used in a normal shaving manner I would<br />
expect that to be true.<br />
* * *<br />
Q. [exchange between counsel] Does the outer<br />
layer 72 wear away each time the cartridge is used in<br />
shaving<br />
[Doroodian's counsel]:<br />
Objection.<br />
A. When the cartridge is used in a normal manner<br />
I would assume that to be true, yes.<br />
Q. You don't have any doubt about that, do you<br />
A. Not if it was used in a normal manner, no.<br />
* * *<br />
Q. Does the amount of blade wear on the edges of<br />
blade 60 and 62 of the cartridge shown in Figure 3<br />
[Tseng's application] increase in the aggregate as the<br />
cartridge is repeatedly used<br />
[Doroodian's counsel]: May I have the question<br />
back, please<br />
[Record read.]<br />
[Doroodian's counsel]: Objection.<br />
A. My understanding is that the blades would<br />
wear each time they are shaved.<br />
We conclude that the feature that the amount of material<br />
gradually abrading or wearing away is correlated with the wear on<br />
the shaving edge is inherently a part of Tseng's claims 113, 117,<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
118 and 135.<br />
The question now remaining is this: In the invention of<br />
Tseng's independent claims 113, 117, 118, 135, and claims<br />
dependent thereon, does the amount of material worn from the skin<br />
engaging layer provide a visual indication of the wear on the<br />
shaving edge or blade In that regard, Doroodian's independent<br />
claim 1 recites: "wear indicating means for indicating the<br />
amount of wear on the shaving edge" and "the amount of material<br />
wearing away being correlated with the amount of wear on the<br />
shaving edge to provide a visual indication of the relative wear<br />
on the blade" (Emphasis added). Doroodian's claim 1 recites a<br />
means-plus-function clause under 35 U.S.C. § 112, sixth<br />
paragraph, i.e., "wear indicating means for indicating the amount<br />
of wear on the shaving edge."<br />
According to Doroodian, its claimed wear indicating means<br />
requires a "multiple points-in-time" indicator "where the amount<br />
of strip material wearing away is correlated with the amount of<br />
wear on the shaving edge to provide a visual indication of the<br />
relative wear on the blade beginning when the cartridge is first<br />
used, and continuing with each shave until the user decides,<br />
based upon prior experience, the indicator strip (and hence the<br />
cartridge) has worn to a level that will result in shaving<br />
discomfort if used further." Doroodian distinguishes such a<br />
- 17 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
"multiple points-in-time" indicator from a "single point-in-time"<br />
indicator which gives only a single indication that a skin<br />
engaging layer including a shaving aid is essentially all eroded<br />
away from usage. Doroodian asserts that Tseng's involved claims<br />
require a "single point-in-time" indicator while Doroodian's<br />
claims require a "multiple points-in-time" indicator.<br />
Doroodian's argument is persuasive, except that we regard<br />
the period in which a visual indication must be provided to be<br />
from the time when the razor unit is new to a time when the blade<br />
has reached its intended useful life for shaving. Doroodian's<br />
reference to "shaving discomfort" and an actual user's prior<br />
experience is too subjective to be meaningful. We further<br />
clarify that the term "multiple points-in-time" as used herein<br />
means a substantially continuous spectrum on a shaving session by<br />
shaving session basis whereby each shaving session brings about<br />
an erosion and an observable change in the visual indication.<br />
For reasons discussed below, we regard Doroodian's claims as<br />
requiring a "multiple points-in-time" indicator and Tseng's<br />
claims as requiring a "single point-in-time indicator."<br />
As noted above, Doroodian's claims 1 recites a means-plusfunction<br />
clause the stated function of which is "for indicating<br />
the amount of wear on the shaving edge." The context of claim 1<br />
in its entirety, as written, is not any particular fixed moment<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
in time. Rather, it is expressly recited that the wear<br />
indicating means has a strip of material "gradually wearing away<br />
as the disposable razor or razor cartridge is used in shaving."<br />
In such an actively or continuously changing environment, the<br />
reference to "for indicating the amount of wear on the shaving<br />
edge" does not reasonably mean an indication at a particular<br />
moment in time. Rather, it means at whatever time, i.e., the<br />
time of observation of the visual indication. The last phrase in<br />
claim 1 supports our view, in reciting: "the amount of material<br />
wearing away being correlated with the amount of wear on the<br />
shaving edge to provide a visual indication of the relative wear<br />
on the blade." The phrase ties the amount of material "wearing<br />
away" to "relative wear" on the shaving blade, and that reflects<br />
appreciation for an actively or continuously changing environment<br />
and a visual indication on a progressive basis.<br />
In an amendment filed June 22, 1994 (Paper 4a in the file of<br />
Doroodian's involved patent) 4 , wherein the language "for<br />
indicating the amount of wear on the blade edge" was added to the<br />
means plus function clause, Doroodian specifically distinguished<br />
its claimed invention from the prior art by arguing with respect<br />
to the prior art that there is "no suggestion that the strip is<br />
4<br />
We herein designate that paper as a part of the official<br />
record we have considered for purposes of this decision.<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
worn away in such a way as to provide a visual indication of<br />
progressive blade wear" (Emphasis in original). Thus, by its own<br />
representation to the U.S. <strong>Patent</strong> and Trademark Office during<br />
examination of its involved patent, Doroodian has clarified and<br />
limited the visual indication provided by its wear indicating<br />
means to the "progressive" variety. Visual indication of<br />
progressive blade wear unmistakably corresponds to Doroodian's<br />
assertion of a "multiple points-in-time" and not a "single pointin-time"<br />
indicator.<br />
Doroodian's specification supports our view, insofar as<br />
disclosed embodiments and 35 U.S.C. § 112, sixth paragraph, are<br />
concerned. Per 35 U.S.C. § 112, sixth paragraph, the claimed<br />
wear indicating means covers only corresponding embodiments<br />
disclosed in the specification and equivalents thereof. All of<br />
Doroodian's disclosed embodiments which have been described in<br />
sufficient detail are of the progressive or "multiple points-intime"<br />
type. See, for instance, the embodiments illustrated in<br />
Figures 3a-3j, 4a-4b, 5a-5b, and 6a-6b.<br />
Tseng argues that Doroodian's specification discloses other<br />
preferred embodiments which are of the "single point-in-time"<br />
indicator type, for instance, Doroodian's Figures 2 and 7. But<br />
those embodiments have not been described in sufficient detail<br />
for one with ordinary skill in the art to know how they operate<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
to provide the visual indication. To say that they illustrate a<br />
"single point-in-time" indicator strip more reflects wishful<br />
thinking on the part of Tseng than it does corresponding<br />
description in the specification. In our view, the embodiments<br />
of Doroodian's Figures 2 and 7 are not sufficiently described to<br />
constitute a corresponding embodiment for the wear indicating<br />
means of Doroodian's claim 1, within the context of 35 U.S.C.<br />
§ 112, sixth paragraph. The claimed means-plus-function clause<br />
cannot be defined on the basis of embodiments whose operation are<br />
not sufficiently described to be reasonably understood.<br />
Doroodian's Figure 2 possibly illustrates the shaving head<br />
after a top layer of wear indicating means has been eroded away<br />
completely to reveal the indicia "DISPOSE" on the shaving head.<br />
It also possibly illustrates the indicia on the lower layer of a<br />
two-layer wear indicating means after the top layer has been<br />
eroded away completely. Which is it A structure according to<br />
either possibility is similar to another embodiment in<br />
Doroodian's disclosure (see column 3, lines 24-31) wherein the<br />
wear indicating means is in a single color that contrasts with<br />
the color of the razor head, whereby the color of the razor head<br />
is revealed after the wear indicating layer has been eroded away.<br />
Doroodian's Figure 7 illustrates an embodiment with a twolayer<br />
wear indicating means in which both layers have the same<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
longitudinal cross-section (see column 3, lines 42-43) but<br />
contrasting colors. In column 3, lines 42-47, the Doroodian<br />
specification states:<br />
The two layers may have the same longitudinal crosssections<br />
(as, for example, in FIG. 7) or may have<br />
different longitudinal cross-sections to create<br />
different visual patterns for example as shown in<br />
FIG. 3a, where the upper layer tapers from a thin edge<br />
at one end of the strip to a wide edge at the other.<br />
(Emphasis added).<br />
Doroodian's argument that Figure 7 in Doroodian's specification<br />
does not illustrate an embodiment of the wear indicator means<br />
claimed in the patent is rejected. Whatever else may be<br />
illustrated via Figure 7, the Figure unquestionably reveals an<br />
embodiment wherein the two layers of the wear indicator means<br />
have the same longitudinal cross section. While Dr. Booth<br />
testified that he does not view Figure 7 as an embodiment, we<br />
have not been directed to any testimony of Dr. Booth in which he<br />
accounted for the above-quoted language in Doroodian's<br />
specification.<br />
The embodiments noted in the two immediately preceding<br />
paragraphs, including the Figure 2 and Figure 7 embodiments,<br />
share a common deficiency in completeness. For these<br />
embodiments, the Doroodian specification does not describe what<br />
the visual indication looks like before the upper layer of the<br />
two-layer indicating means is completely worn away or before the<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
single layer of contrasting color with the shaving head is<br />
completely worn away. What we have is simply a snap-shot in time<br />
when what we need for a full understanding is a more complete<br />
description of the changes, if any, in visual appearance leading<br />
up to the time of complete erosion of the upper layer, as the<br />
blade is being progressively worn. It is at least plausible that<br />
more and more of the contrasting color or other indicia below<br />
will become visible as a user goes through each shaving session<br />
even though no portion of the lower layer or the shaving head is<br />
physically exposed or uncovered. Whether that is the case is<br />
uncertain. Note further that Dr. Anthony R. Booth testified that<br />
the Figure 2 embodiment is only partially disclosed in<br />
Doroodian's specification. (Booth Tr, 354). It is simply<br />
uncertain how these embodiments work.<br />
Doroodian's specification is far from being a model of<br />
clarity. Many parts of it are outright confusing. In column 3,<br />
lines 6-8, a "wear indicating strip" is defined; but in line 16,<br />
it apparently became a "wear indicating means." No explanation<br />
is provided for this transformation and it should be noted that<br />
under 35 U.S.C. § 112, sixth paragraph, the legal residence of a<br />
means-plus-function clause is only in a claim.<br />
In the brief description of the drawings, Figure 7 is<br />
described as follows: "Figure 7 comprises a diagram illustrating<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
the formula for determining the coefficient of wear for a given<br />
set of shaving parameters." With regard to Figure 7, the<br />
specification in column 4, lines 48-52 states that "%³X is the<br />
change in thickness X resulting from stroking the razor blade<br />
over the skin for a distance L" and that "L is the distance that<br />
the blade is stroked along the skin in a given [single] shaving<br />
session." But Figure 7 also evidently shows %³X to be the entire<br />
thickness of the skin engaging layer A which should last multiple<br />
shaving sessions, for instance an average of four sessions<br />
according to column 5, lines 8-9. Clearly, %³X cannot be both.<br />
states:<br />
In column 3, lines 31-37, the Doroodian specification<br />
In a preferred embodiment, two layers of material<br />
are used to comprise the wear indicating means, so<br />
that, as the uppermost layer is worn away, the color of<br />
the next layer becomes visible. As a further<br />
alternative, a word such as "DISPOSE", or other words<br />
or indicia (such as diagonal stripes or a row of<br />
stars), could be made to appear as the upper layer is<br />
worn away.<br />
But the disclosure immediately preceding the above-quoted text<br />
does not define a general invention which encompasses the abovedescribed<br />
preferred embodiment. Specifically, in column 3, lines<br />
24-30, the specification states:<br />
By making the wear indicating means in a color that<br />
contrasts with the color of the razor head 14, the<br />
relative wear on the strip will be evident because the<br />
strip will be worn away, and the head will become<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
visible. For example, a white strip on a blue razor<br />
head will gradually be worn away to reveal the blue<br />
color underneath.<br />
The above-quoted text does not set forth an invention for which<br />
two layers having contrasting colors would constitute an<br />
embodiment of the wear indicating means. At most, it is an<br />
alternative embodiment which has not been referred to as<br />
"preferred." Furthermore, assuming that it is an alternative<br />
embodiment, it is just as incomplete as are the Figure 2 and<br />
Figure 7 embodiments discussed above. It is uncertain just what<br />
the visual indication reveals before the wear indicating means is<br />
completely worn, beginning when the razor unit is new and unused.<br />
In column 3, lines 38-41, Doroodian's specification states:<br />
In this preferred two layer embodiment, two basic<br />
methods of construction are contemplated. In the first<br />
method, the two layers are constructed from either the<br />
same or different material, but are of contrasting<br />
colors. . . . [Emphasis added.]<br />
No second method is thereafter described, however, even as the<br />
specification commences, beginning in column 3, line 59, to set<br />
forth an alternative embodiment to the two layer preferred<br />
embodiment.<br />
In column 3, lines 59-64, Doroodian's specification states:<br />
In another alternative embodiment, the indicator<br />
means may consist of a single strip of material, but<br />
colored or dyed by known methods, so as to creat[e]<br />
distinguishable zones. As the upper portion or zone of<br />
the strip (of one color) is abraded away, the<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
contrastingly colored lower zone becomes visible.<br />
The above-quoted description suggests that the two layers<br />
included in the earlier described embodiment do not constitute a<br />
single strip of material. But the two-layered preferred<br />
embodiment described earlier in the specification does appear to<br />
be an implementation of the wear indicating strip first defined<br />
in column 3, lines 6-8. Moreover, as for just how the<br />
contrastingly colored lower layer or zone becomes visible as the<br />
upper layer or zone is abraded away, without abrasion of the<br />
lower layer or zone mixed in with the upper layer or zone,<br />
Doroodian's specification does not say.<br />
In this sea of confusion one particular point stands out<br />
with remarkable clarity - that there is not a single instance in<br />
Doroodian's specification where it discusses or appreciates the<br />
benefit of knowing that the shaving blade is completely worn,<br />
separate and apart from the benefit of knowing on a continuous<br />
basis how much the blade has worn through each shaving session.<br />
On the basis of Doroodian's specification, we cannot find that<br />
there is any "single point-in-time" embodiment, not even with<br />
respect to Doroodian's Figures 2 and 7 which, as we discussed<br />
above, lack detailed explanations as to how they work. We are<br />
not free to add embodiments to Doroodian's disclosure. Nor are<br />
we free to add material to render complete an otherwise<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
incompletely disclosed embodiment.<br />
Note further that Doroodian's specification refers to the<br />
embodiments of Figure 7, Figures 3a through 3j, and Figures 4<br />
through 6, all in the same vein. See column 3, lines 42-57.<br />
There is not the slightest inkling that a major difference may<br />
exist between these embodiments, e.g., that Figure 7's embodiment<br />
would only give a visual indication at a single point in time,<br />
when the blade is completely worn.<br />
With regard to a two layered embodiment, evidently including<br />
that of Figure 7 because this preferred embodiment can have<br />
either the same or different cross-section, Doroodian's<br />
specification states (column 3, lines 32-34):<br />
"[a]s the uppermost layer is worn away, the color of<br />
the next layer becomes visible. (Emphasis added.)<br />
Further with regard to this preferred two layered embodiment,<br />
which can have either the same or different cross-section,<br />
Doroodian's specification states (column 3, lines 47-51):<br />
As the two layers wear away through abrasion and/or<br />
shear stress against the skin and hair, more and more<br />
of the contrasting colored lower layer is disclosed<br />
[reference to the illustrations of Figure 3].<br />
For all of the foregoing reasons, we do not find that<br />
Doroodian's specification discloses any "single point-in-time"<br />
embodiment which gives only an on/off visual indication as to<br />
whether the shaving blade is completely worn. Furthermore, even<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
if it does, Doroodian through its own representation to the U.S.<br />
<strong>Patent</strong> and Trademark Office during prosecution of the application<br />
maturing into its involved patent has limited or narrowed its<br />
claims to cover only "progressive" indication as discussed above.<br />
Because Doroodian's specification does not disclose a<br />
"single point-in-time" embodiment, the claimed wear indicating<br />
means under 35 U.S.C. § 112, sixth paragraph, cannot be construed<br />
as though a "single point-in-time" embodiment is a corresponding<br />
embodiment in the specification. Furthermore, because "multiple<br />
points-in-time" embodiments are not equivalent to a "single<br />
point-in-time" embodiment 5 , it is our determination that<br />
Doroodian's involved claims are limited to "multiple points-intime"<br />
embodiments and do not cover "single point-in-time"<br />
embodiments.<br />
We recognize that Doroodian's technical witness, Dr. Anthony<br />
R. Booth, on cross-examination by Tseng, indicated that<br />
Doroodian's claim 1 covers Doroodian's Figure 7 embodiment.<br />
However, Tseng pointed to no testimony of Dr. Booth to the effect<br />
that one with ordinary skill in the art would understand<br />
Doroodian's Figure 7 embodiment as not providing a substantially<br />
continuous indicator but only an on/off indicator. Moreover, if<br />
5<br />
Neither party asserts that there is such an equivalence.<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
it is Dr. Booth's view that claim 1 is sufficiently broad to<br />
cover both on/off and substantially continuous embodiments, the<br />
issue is a question of law and thus Dr. Booth's conclusion on the<br />
ultimate legal issue carries no weight. In any event, Tseng has<br />
not directed our attention to the underlying basis or rationale<br />
for Dr. Booth's conclusion that Doroodian's claim 1 covers the<br />
Figure 7 embodiment. For all of these reasons, Dr. Booth's<br />
testimony does not change our view as to what is covered by<br />
Doroodian's claims.<br />
Tseng asserts that Doroodian's exclusive licensee and real<br />
party in interest, Arthur D. Little Enterprises ("ADLE"), in or<br />
about November 1996, provided Tseng's real party in interest<br />
("Gillette Company") with a document entitled "Razor Gauge TM Wear<br />
Indicator Technology for Razor Blades, Licensing Opportunity<br />
presented to: The Gillette Company, October 1996." Tseng notes<br />
page 6 of that document which describes how the technology works,<br />
in part, as follows:<br />
%Ï Strip of material (integral with or separate from<br />
comfort strip) that changes physical properties<br />
(preferrably appearance) as a function of wear/use.<br />
%Ï Could be designed as an off/on device or a continuously<br />
changing indicia to let users judge for themselves when<br />
it is time to discard product (equivalent to the Oral-B<br />
Toothbrush Indicator).<br />
Tseng further points out that the document on page 10 illustrates<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
both the On/Off method and the Progressive method. On the basis<br />
of the foregoing, Tseng argues that ADLE contended that the<br />
Doroodian involved patent claims cover both the on/off and the<br />
progressive visual indication. The argument is without merit,<br />
because page 11 of the same document identifies more than<br />
Doroodian's involved patent as the source of proprietary coverage<br />
for the technology being marketed in the document. Moreover, on<br />
page 11 of the document where Doroodian's involved patent is<br />
mentioned, the language states: "Broad U.S. <strong>Patent</strong> claims<br />
covering change of physical properties as the blade is used US<br />
<strong>Patent</strong> # 5,388,331." (Emphasis added). The bolded text suggests<br />
a progressive rather than an on/off mechanism insofar as<br />
Doroodian's involved patent is concerned. Also, it appears that<br />
an in-house counsel for the Gillette Company (Tseng's real party<br />
in interest), Mr. Stephan P. Williams, has acknowledged that the<br />
licensing document can include technology not covered by<br />
Doroodian's involved patent. Williams Tr. 158-59.<br />
Tseng also asserts that in 1999 Doroodian had made<br />
statements to the Australian <strong>Patent</strong> Office to the effect that<br />
Doroodian's claimed invention provided both a single point-intime<br />
and a multiple points-in-time blade wear indicator, citing<br />
to Tseng Exhibit 2090. We have reviewed Tseng's Exhibit 2090 in<br />
detail and do not find the purported representation to the<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
Australian <strong>Patent</strong> Office. The exhibit appears to be a<br />
communication from Doroodian's legal representative to the<br />
Australian <strong>Patent</strong> Office. In a pertinent part thereof quoted by<br />
Tseng, the communication states: "One of the advantages of the<br />
invention in each of its forms is the ability to construct the<br />
wear indicator so it will indicate wear after a predetermined<br />
amount of or number of uses." This language does not necessarily<br />
indicate that prior to reaching the predetermined number of uses<br />
there would not be any visual indications of wear.<br />
In any event, Tseng has not established that the disclosure<br />
of the Australian patent application it refers to is the same as<br />
the disclosure of Doroodian's involved patent or that the claims<br />
in the Australian patent application are the same as Doroodian's<br />
involved claims in this interference. Tseng has not satisfied us<br />
that oranges are being compared with oranges and apples to<br />
apples. Moreover, as we discussed above, in its remarks to the<br />
examiner during prosecution of Doroodian's involved patent in the<br />
U.S. <strong>Patent</strong> and Trademark Office, Doroodian in no uncertain terms<br />
represented that its claimed invention is directed to providing a<br />
visual indication of "progressive blade wear." We credit that<br />
representation to the U.S. <strong>Patent</strong> and Trademark Office more than<br />
we do any contrary statement to the Australian <strong>Patent</strong> Office.<br />
Even assuming (1) that the Australian patent disclosure is<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
the same as the disclosure of Doroodian's involved patent, (2)<br />
that the Australian patent application claims were the same as<br />
Doroodian's involved claims, and (3) further that Doroodian had<br />
represented to the Australian <strong>Patent</strong> Office that its claims cover<br />
both "single point-in-time" and "multiple points-in-time"<br />
embodiments, that does not counter-balance or overcome the<br />
reasons we discussed herein for concluding that Doroodian's<br />
claims are directed to an invention providing substantially<br />
continuous or progressive visual indications of blade wear. 6<br />
Finally, Tseng argues that by reading the "multiple pointsin-time"<br />
feature into Doroodian's claim 1, we would be including<br />
into claim 1 a feature expressly added or recited in a dependent<br />
claim and that would be an indication that claim 1 should not be<br />
so construed. The argument is misplaced and thus rejected. The<br />
dependent claims are each directed to a particular embodiment,<br />
whereas claim 1 including the "multiple points-in-time" feature<br />
is broad enough to cover all disclosed "multiple points-in-time"<br />
embodiments and equivalents thereof. Tseng has not directed our<br />
attention to any dependent claim which duplicatively recites what<br />
Doroodian contends is required by its independent claim 1.<br />
6<br />
Note, for instance, that the patent laws may not be the<br />
same, especially with regard to means-plus-function clauses under<br />
35 U.S.C. § 112, sixth paragraph.<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
Now we turn to what Tseng's claims require with regard to a<br />
visual indication. In pertinent part, Tseng's independent claim<br />
113 recites: "wherein said skin engaging layer is adapted to<br />
erode during contact with said skin during shaving to visually<br />
expose said non-skin engaging layer" (Emphasis added). In<br />
pertinent part, Tseng's independent claim 117 recites: "wherein<br />
said skin engaging member is constructed such that said skin<br />
engaging layer erodes during contact with said skin during<br />
shaving to visually expose said non-skin engaging layer"<br />
(Emphasis added). In pertinent part, Tseng's independent claim<br />
118 recites: "wherein said skin engaging layer is adapted to<br />
erode during contact with said skin during shaving to visually<br />
expose said non-skin engaging layer" (Emphasis added). In<br />
pertinent part, Tseng's independent claim 135 recites: "wherein<br />
said skin engaging layer is adapted to erode during contact with<br />
said skin during shaving to visually expose said non-skin<br />
engaging layer over time" (Emphasis added).<br />
None of the above-quoted portions of Tseng's claims can<br />
reasonably be regarded as requiring a progressive visual<br />
indication or a "multiple points-in-time" visual indication,<br />
especially the language of claim 135 which includes the words<br />
"over time." When something is said to be exposed "over time,"<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
it means the item is not exposed immediately but only after a<br />
period of time. Tseng's specification has not coined a different<br />
definition for the term. Even assuming, without deciding, that<br />
the emphasized quoted portions of Tseng's claims 113, 117, 118<br />
and 135 are broad enough to cover progressive visual indication<br />
or "multiple points-in-time" visual indication, that still does<br />
not mean these claims anticipate, in the sense of 35 U.S.C.<br />
§ 102, Doroodian's involved claims insofar as the "multiple<br />
points-in-time" feature of Doroodian's claims are concerned.<br />
None of Tseng's claims depending from claims 113, 117, 118<br />
and 135 add any recitation which makes up for the shortfall of<br />
independent claims 113, 117, 118 and 135 for anticipating the<br />
"multiple points-in-time" feature of Doroodian's claims.<br />
Accordingly, we find that none of Tseng's involved claims 113,<br />
117-123, 130-133 and 135-136 anticipates any one of Doroodian's<br />
involved claims 1-6.<br />
Doroodian represents that it would not have been obvious to<br />
one with ordinary skill in the art to arrive at Doroodian's<br />
claims including the "multiple points-in-time" feature, starting<br />
from Tseng's involved claims. We agree.<br />
We find that the level of ordinary skill in the art of<br />
disposable razor blades is generally reflected by the technology<br />
described in these items of prior art: U.S. <strong>Patent</strong> Nos.<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
5,113,585; 4,982,767; 4,562,644; 4,170,821; 3,879,844;<br />
and 2,703,451. The testimony of Dr. Anthony R. Booth,<br />
Doroodian's technical witness, that "I consider a person of<br />
ordinary skill in the art to be a scientifically trained or<br />
technically trained individual who has worked in the industry for<br />
ten (10) years and has experience designing razor products,<br />
developing razor products, testing razor products and<br />
manufacturing razor products" is too general and vague to be<br />
meaningful. Tseng's position that Doroodian's definition<br />
overstates the ordinary skill in the art is also not helpful.<br />
According to Doroodian, Tseng's involved claims can only be<br />
construed as requiring an all or nothing, or "single point-intime"<br />
visual indication because that is the only notion disclosed<br />
in Tseng's specification. We agree. An application claim can<br />
properly be construed according to its broadest reasonable<br />
interpretation but that interpretation must be consistent with<br />
the specification. Tseng's specification does not describe any<br />
"multiple points-in-time" mechanism that gives a progressive<br />
visual indication. Tseng's specification does not reveal even<br />
that a progressive indication is anything of value or desirable.<br />
The only reference to any kind of indication being provided is a<br />
lone sentence in the SUMMARY OF THE INVENTION section which<br />
reads: "Yet another object of the present invention is to<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
provide a wear indicating skin engaging member," and the<br />
following paragraph appearing on page 6 of the Tseng<br />
specification as filed (Tseng Exhibit 2008):<br />
In an embodiment of the present invention a wear<br />
indicating effect is produced when the sheath material<br />
and the core material are made of disparately colored<br />
materials (e.g. white colored sheath and blue colored<br />
core). Upon use, the sheath material over the skin<br />
engaging surface is typically worn off through use.<br />
With sufficient use, a second colored region<br />
represented by the core is exposed, thus, providing the<br />
user with [an] indication that the shaving unit and/or<br />
skin engaging surface have reached their effective<br />
life. In a preferred embodiment, the sheath material<br />
consists of polyethylene oxide/polystyrene mixture<br />
which is white in color and the core consists of nylon<br />
and/or styrene which has been colored with a FD&C #2<br />
dye. Other suitable dyes or pigments include FD&C Red<br />
No. 40, Erythrosine (FD&C Red No. 3), Brilliant Blue<br />
FCF (FD&C Blue No. 1), Indigotine (FD&C Blue No. 2),<br />
Tartozine (FD&C Yellow No. 5), Sunset Yellow FCF (FD&C<br />
Yellow No. 6) and Fast Green FCF (FD&C Green No. 3) and<br />
Titanium Dioxide. (Emphasis added)<br />
Thus, the purpose of the indication is to reveal that the shaving<br />
unit and/or the skin engaging surface have reached their<br />
effective life. The indication is not intended to come on when<br />
the shaving unit is relatively new or just beginning to be used.<br />
It is only after "sufficient use" that the second colored region<br />
becomes exposed to give a visual indication.<br />
Consequently, the recitations in Tseng's independent claims<br />
113, 117, 118 and 135 to the effect that the skin-engaging layer<br />
erodes to visually expose the non skin-engaging layer cannot be<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
so broadly interpreted as covering either the case of "multiple<br />
points-in-time" progressive visual indication or single point-intime"<br />
visual indication. Rather, we conclude that such<br />
recitation in these claims limit the coverage to only "single<br />
point-in-time" visual indication at a particular time.<br />
According to Tseng, Figures 3-6 in its specification<br />
illustrates "multiple points-in-time" wear indicator strips that<br />
would provide a progressive visual indication of the wear on the<br />
blade. In support of that argument, (1) Tseng presents a drawing<br />
produced in its opposition at page 5 that supposedly illustrates<br />
how the wear indicator strip shown in Tseng's Figure 5 gives a<br />
progressive visual indication, and (2) Tseng presents recent test<br />
results on indicator strips made in 1993 by Philip Sweeney, an<br />
employee of the Gillette Co., under the direction of Mingchih M.<br />
Tseng. According to Tseng, the actual samples correspond to what<br />
is described in the specification as Example 13 7 and tests<br />
thereon "confirm" the illustrations or depictions on page 5 of<br />
the opposition with regard to Tseng's wear indicating strip. We<br />
will discuss these efforts, in turn. However, neither<br />
7<br />
Tseng states (Opp. At 6): "Example 13 was inadvertently<br />
identified as 'Example 12' in the application as filed (TE 2008<br />
at 9). That typographical error was corrected during prosecution<br />
(TE 2067 at 7)." Note that it is "Example 12" on page 9 of<br />
Tseng's specification which should be identified as "Example 13."<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
demonstration is persuasive in establishing Tseng's argument.<br />
Tseng's demonstration presented via a drawing on page 5 of<br />
its opposition is without merit.<br />
First, it can be seen from the illustration on page 5 of<br />
Tseng's opposition that even according to Tseng's illustration,<br />
in going from "Before Use" to "After Some Use" in the second<br />
column of the four-column table, there has been no change in<br />
visual indication. Thus, even though the blade has been<br />
partially worn, there is no visual indication to that effect.<br />
That alone seriously undermines Tseng's assertion that the<br />
illustrated embodiment provides progressive indication of<br />
relative blade wear.<br />
Secondly, when the lower layer of a contrasting color has<br />
been exposed, as is shown in the picture corresponding to "After<br />
Further Use" and in the second column, Tseng's specification as<br />
quoted above provides that the shaving unit and/or the skin<br />
engaging surface have reached their intended effective life.<br />
Tseng's specification makes no distinction between partial<br />
exposure and complete exposure of the differently colored core.<br />
Thus, either partial or complete exposure of the core gives a<br />
visual indication that the shaving unit and/or the skin engaging<br />
surface has reached its intended useful life.<br />
Whether it is the shaving unit or the skin engaging surface<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
that has reached its intended effective life, the result is the<br />
same. We cannot assume that a shaving unit will continue to be<br />
used when its "skin engaging surface" has reached its intended<br />
useful life. Tseng's specification does not state anything to<br />
the effect that the shaving unit will continue to be used for<br />
shaving after the shaving unit and/or the skin engaging surface<br />
thereof have reached their intended useful life.<br />
Tseng contends that because the conjunctive-disjunctive<br />
"and/or" is used in the phrase at issue, it is not necessarily<br />
true that when the core is exposed the shaving unit has reached<br />
its intended useful life. The argument is wanting because Tseng<br />
does not explain any meaningful difference, in the context of<br />
Tseng's specification, between the shaving unit's reaching its<br />
intended useful life and the skin engaging surface's reaching its<br />
intended useful life. Tseng has pointed to nothing in its<br />
specification which describes how a user would determine whether<br />
it is one and not the other, or how the user's response or<br />
subsequent action upon detecting the visual indication would vary<br />
depending on whether it is one and not the other. In this light,<br />
the end of intended useful life of the shaving unit and of the<br />
skin engaging surface are equivalents and there is no apparent<br />
reason to continue using the shaving unit once the core of<br />
contrasting color has been exposed.<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
We recognize that Tseng's specification at page 5 discloses<br />
that the core can be made of a blend of non-water soluble plastic<br />
resin and water-soluble resin and that polyethylene oxide is an<br />
example of one such water-soluble resin. Tseng points out that<br />
polyethylene oxide, according to its specification at page 4, is<br />
an example of a suitable shaving aid material included in the<br />
sheath or skin engaging layer. But that is not sufficient basis<br />
to find that according to Tseng's specification despite<br />
exhaustion of the sheath or skin engaging layer the shaving unit<br />
would continue to be used after exposure of the core.<br />
There is no statement anywhere in Tseng's specification to<br />
the effect that the shaving unit would continue to be used after<br />
exposure of the core. Also, there are a number of indications in<br />
Tseng's specification that the polyethylene oxide used to build<br />
the core is not included as a shaving aid. Note that only the<br />
polyethylene oxide in the skin engaging layer is ever referred to<br />
as "shaving aid," and that of all the different functions Tseng's<br />
specification identifies and describes for the core, none<br />
contemplates the core itself as providing a skin engaging surface<br />
for use in further shaving when the covering sheath has been<br />
eroded away.<br />
Consequently, the illustration corresponding to the "After<br />
Additional Use" label on page 5 of the opposition is something<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
that will not be reached during normal and intended use of the<br />
shaving unit, insofar as Tseng's invention is concerned.<br />
Tseng's specification also makes no mention of the duration<br />
of or any significance, value, or benefit, of the time period,<br />
assuming that there is any such meaningful time period, between<br />
initial partial exposure and full exposure of the core. Tseng's<br />
specification does not describe or disclose that anything<br />
meaningful occurs in such a period or that it has a duration<br />
longer than a single shaving session. This is consistent with<br />
our finding that either partial or full exposure of the core<br />
gives a visual indication that the shaving unit or the skin<br />
engaging surface has reached its intended useful life.<br />
Alternatively, even if we regard the end of the intended<br />
useful life of the shaving unit and of the skin engaging layer as<br />
non-equivalents, and also assume that the shaving unit would<br />
continue to be used despite exposure of the underlying core,<br />
there still can be no progressive or "multiple points-in-time"<br />
visual indication as is argued by Tseng with respect to its<br />
specification. If the skin engaging layer has reached its<br />
intended useful life, then it can no longer be relied upon or<br />
expected to provide a visual indication after further use of the<br />
shaving unit. Tseng's argument improperly relies on the skin<br />
engaging layer to provide a progressive or ongoing visual<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
indication even after the skin engaging layer has reached its<br />
intended useful life.<br />
Furthermore, patent drawings are not usually made to scale<br />
and are not production drawings or blue-prints for manufacturing.<br />
Insofar as Tseng's Figures 3-6 are concerned, no one knows just<br />
how curved the core 70 is in the vicinity of its junction with<br />
the skin engaging layer 74. Indeed, even a plain observation of<br />
Figure 3-6 reveals different curvatures from one to the next,<br />
albeit all of them show only a very slight curvature. On the<br />
basis of such ambiguous evidence, there is no credible basis for<br />
Tseng to conclude that there is progressive indication beginning<br />
from when the core is first exposed to when the core is<br />
completely exposed. For instance, all of that exposure can occur<br />
in a single shaving session through multiple strokes within that<br />
session, in which case there really would be no progressive<br />
indication from shaving session to shaving session.<br />
We have reviewed the second declaration of Edwin L. Thomas<br />
(Exhibit 2115), submitted by Tseng to support its opposition to<br />
Doroodian's motion. It does not account for the above-noted<br />
deficiencies of Tseng's argument. Mr. Thomas' depiction on page<br />
6 of Exhibit 2115 (same as the drawing on page 5 of Tseng's<br />
opposition) of what happens when Tseng's razor unit is continued<br />
to be used after exposure of the core depends on continued usage<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
of the razor unit after exposure of the core. Yet, on crossexamination,<br />
he acknowledges that according to the disclosure in<br />
Tseng's specification, the "after additional use" category in the<br />
depiction is something that is never reached. (Thomas Transcript<br />
at 1014). Mr. Thomas further explains, with respect to exposure<br />
of the differently colored core (Transcript at 1140):<br />
A. You're reaching the time in which maybe during<br />
that after that shave is over or before the next one<br />
starts you want to change blades.<br />
The question is not whether details can be independently proposed<br />
for various parts in Tseng's drawings such that one can justify<br />
continued use of the shaving unit after exposure of the core, but<br />
what Tseng's specification says or does not say in that regard.<br />
Tseng's demonstration based on recent test results of<br />
indicator strips made in 1993 and which allegedly correspond to<br />
Example 13 in Tseng's specification are also not persuasive, in<br />
several respects, with regard to Tseng's argument that its<br />
specification discloses "multiple points-in-time" or progressive<br />
visual indication of the relative wear on the shaving blade.<br />
First, the actual samples are not commensurate in scope with<br />
either Tseng's claims or the particulars described in the<br />
specification for Example 13. Example 13 does not specify how<br />
thick the skin-engaging layer should be over the core. Depending<br />
on how thick it is, the different color of the core will become<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
exposed or start to become exposed at different times. Whether<br />
there is a progressive or "multiple points-in-time" visual<br />
indication depends on the thickness of the skin-engaging layer.<br />
Also, the curvature of the core beneath the skin-engaging-layer<br />
is not specified in Tseng's Example 13. Whatever is the<br />
curvature used in the actual samples, it directly affects the<br />
manner in which the color below becomes revealed and yet is<br />
without underlying basis in Example 13 of the specification.<br />
Therefore, even if the photographs of Tseng's Exhibits 2063,<br />
2064A, and 2092-2099 show what Tseng states they show, the<br />
showing is not commensurate in scope with what is described in<br />
the specification as Example 13. Thus, the test results of<br />
actual samples produced in 1993 do not support Tseng's argument<br />
as to what its specification discloses.<br />
Secondly, the photographs reflecting the test results do not<br />
show changes through each successive shaving session. For<br />
instance, in all of the photographs of Tseng's Exhibits 2063,<br />
2064A, and 2092-2099, each one depicting usage of a different<br />
shaving cartridge, there is no meaningful change in color<br />
contrast until after at least two shaving sessions. For two<br />
cartridges, (Tseng Exhibit 2064A and 2095), there is no<br />
discernable color contrast between the skin-engaging layer and<br />
the core or non-skin-engaging layer until after three shaving<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
sessions. For three cartridges (Tseng Exhibits 2063, 2093 and<br />
2097), there is no discernable color contrast until after four<br />
shaving sessions. Collectively, the results do not reasonably<br />
show that there is a progressive visual indication, even on<br />
average, as the cartridges advance from one shaving session to<br />
the next beginning from when each shaving cartridge is new, which<br />
is required for satisfying the "multiple points-in-time" visual<br />
indication feature of Doroodian's claims.<br />
The photographs of Tseng's Exhibits 2063, 2064A, and 2092-<br />
2099 do not support the testimony of Michael J. Kwiecien (Tseng<br />
Exhibit 2110, 12) to the effect that more and more of the<br />
underlying blue layer is exposed as each shaving cartridge is<br />
used, when observation begins from when each cartridge is unused.<br />
Finally, as is the case with our discussion of Tseng's<br />
illustration on page 5 of its opposition, the testing of the<br />
actual samples includes photographs taken even after the bluecolored<br />
non-skin-engaging layer or core has been exposed. As has<br />
already been explained, there is no basis in Tseng's<br />
specification for continuing use of the shaving cartridge when<br />
the differently colored core has been exposed, i.e., when the<br />
shaving cartridge and/or the skin-engaging layer have reached<br />
their intended useful life.<br />
In any event, apart from the above-discussed problems, the<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
photographs presented in Tseng's Exhibits 2064A and 2096-2099<br />
have questionable value. As is pointed out by Doroodian, the<br />
succession of photographs contained in each exhibit are not<br />
illustrating the same portion of the shaving cartridge from shave<br />
to shave. On cross-examination, Ms. Linda Galfetti, a technician<br />
employed by The Gillette Co. who took the photographs in Tseng's<br />
Exhibits 2064A and 2096-2099 (Galfetti declaration 3-6),<br />
testified that within each exhibit the successive photographs are<br />
images taken of "random" portions of the shaving cartridge and<br />
thus the pictures do not show the same area of the shaving<br />
cartridge from shave to shave. (Galfetti Transcript at 36).<br />
Such evidence is intrinsically suspect and cannot firmly indicate<br />
the before-and-after changes in appearance or color contrast in<br />
the wear indicating strip. Note also that without counting the<br />
photographs in Tseng's Exhibits 2064A and 2096-2099, and<br />
directing our attention only to the photographs in Tseng's<br />
Exhibits 2063 and 2092-2095, Exhibit 2094 apparently shows no<br />
change until after two shaving sessions, Exhibits 2092 and 2095<br />
apparently show no change until after three shaving sessions, and<br />
Exhibits 2063 and 2093 apparently show no change until after four<br />
shaving sessions.<br />
We are not persuaded by Doroodian's argument pointing out<br />
the length of time the actual samples have been placed in storage<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
after their production in 1993 and noting that Tseng easily could<br />
have made fresh samples. We are also not persuaded by<br />
Doroodian's argument noting the lack of sample degradation<br />
analysis. Doroodian has not presented credible evidence that<br />
Tseng's samples made in 1993 reasonably would have already<br />
reached a point of degradation that makes testing unreliable. We<br />
are also not persuaded by Doroodian's argument that the testing<br />
protocol was not adequately documented by Tseng. The cartridges<br />
were photographed before and after use in each shaving session.<br />
Doroodian has not explained what deficiency exists in the testing<br />
protocol. Michael J. Kwiecien testified that he developed a<br />
shave test protocol and the particulars of that protocol are<br />
noted in Paragraph Nos. 9-11 of his declaration. We are not also<br />
persuaded that records must be kept of each testing user's<br />
preparation habits, shaving routine, or perception of shaving<br />
quality. Each user has his own idiosyncracies that are not<br />
expected to coincide with those of other users. Although the<br />
possibility always exists that a party might have hand-picked or<br />
specially selected participants which shaved only in a particular<br />
way that would skew the test results in favor of a certain<br />
conclusion, there is not a scintilla of evidence that this<br />
occurred despite cross-examination by Tseng of pertinent<br />
witnesses. Accordingly, we do not regard this as a realistic<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
possibility such that the shaving habits of each participant must<br />
be documented and/or corroborated to have value.<br />
For all of the foregoing reasons, we reject Tseng's<br />
assertion that its Figures 3-6 are embodiments having a "multiple<br />
points-in-time" indicator strip that provides progressive visual<br />
indication of blade wear. As we stated above, Tseng's<br />
independent claims 113, 117, 118 and 135, and claims dependent<br />
thereon are limited to a "single point-in-time" indicator strip.<br />
Doroodian asserts that the evidence of record does not<br />
support a conclusion that Tseng's claims, if limited to "single<br />
point-in-time" indicator strips, would render obvious party<br />
Doroodian's claims if they are construed so as to require<br />
"multiple points-in-time" indicator strips. On this record, the<br />
assertion is sufficient to make out at least a prima facie case<br />
of nonobviousness. In that regard, party Tseng does not contend<br />
that its claims, if limited to "single point-in-time" indicator<br />
strips, would render obvious party Doroodian's claims if they are<br />
construed so as to require "multiple points-in-time" indicator<br />
strips. We also have no reason to make that conclusion here.<br />
For all of the foregoing reasons, Doroodian's preliminary<br />
motion 1 alleging no interference-in-fact is GRANTED.<br />
B. Tseng's Claim 134 is unpatentable<br />
Party Tseng's claim 134 reads as follows:<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
In a disposable razor or razor cartridge comprising at<br />
least one blade mounted in a head or frame, said blade<br />
having a shaving edge, the improvement comprising<br />
indicating means for providing a visual indication of<br />
the relative amount of use of the razor or cartridge,<br />
said indicating means being located on the head or<br />
frame in proximity to the shaving edge of said blade so<br />
as to contact the skin during use, and comprising a<br />
strip of material having a first layer of a first color<br />
and a second layer of a color contrasting with said<br />
first color, wherein said layers are arranged so that<br />
said strip of material changes in appearance as the<br />
disposable razor or razor cartridge is used in shaving.<br />
(Emphasis added).<br />
In its preliminary motion alleging no interference-in-fact,<br />
Doroodian would have us construe Tseng's claim 134 as being<br />
similarly limited to the "single point-in-time" visual indication<br />
feature that characterizes Tseng's other claims. In our view,<br />
however, the recitations of claim 134 is so inconsistent with the<br />
notion of a "single-point-in time" visual indication that the<br />
claim cannot be reasonably construed that way. Note especially<br />
the bolded text of claim 134 quoted above.<br />
On our own initiative, and done only to provide support for<br />
our finding of no interference-in-fact, we conclude that Tseng's<br />
claim 134 is unpatentable under 35 U.S.C. § 112, second<br />
paragraph, for indefiniteness, and alternatively, under 35 U.S.C.<br />
§ 112, first paragraph, for lack of written description in the<br />
specification.<br />
Claim 134 initially recites an "indicating means for<br />
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Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
providing a visual indication of the relative amount of use of<br />
the razor or cartridge." Per 35 U.S.C. § 112, sixth paragraph,<br />
the indicating means covers only those corresponding embodiments<br />
described in the specification and equivalents thereof. The only<br />
visual indication described in Tseng's specification as filed is<br />
the exposure of a different or contrasting color on the core<br />
underneath the sheath or skin-engaging layer. Note page 6, lines<br />
14-17 of the Tseng specification as filed, which states:<br />
Upon use, the sheath material over the skin engaging<br />
surface is typically worn off through use. With<br />
sufficient use, a second colored region represented by<br />
the core is exposed, thus, providing the user with [an]<br />
indication that the shaving unit and/or skin engaging<br />
surface have reached their effective life.<br />
No other kind of visual indication is referred to or discussed<br />
anywhere in Tseng's specification as filed. Yet, claim 134<br />
further recites broadly that the indicating means comprises a<br />
strip of material which changes in appearance as the disposable<br />
razor or razor cartridge is used in shaving. This language<br />
broadens out the visual indication to cover not just exposure of<br />
a different color beneath and equivalents thereof but any<br />
perceived change in appearance, e.g., size, shape, texture,<br />
regularity, consistency, uniformity, opaqueness, transparency,<br />
etc. Thus, the claim is internally inconsistent and that alone<br />
renders the claim indefinite under 35 U.S.C. § 112, second<br />
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Interference No. 104,482<br />
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paragraph, for failing to particularly point out and distinctly<br />
claim that which the inventor regards as the invention.<br />
Alternatively, even if we ignore the internal inconsistency<br />
and assume that the claim is not limited to the disclosed manner<br />
of visual indication by exposure of a different color of an<br />
initially covered layer, the claim is nonetheless indefinite<br />
because we find that no objectively determinable standard has<br />
been set forth in Tseng's specification for deciding when the<br />
appearance of the strip of material has changed in terms of<br />
overall "appearance" as is broadly recited in the claim. Claim<br />
134 itself also does not set forth an objective standard.<br />
Change in "appearance" as that term is broadly and loosely<br />
used is a matter of degree. No physical object has absolutely<br />
the same identical appearance at two different times. For<br />
instance, dust may have collected on an object in between the<br />
times of observation, or condensation may have developed on its<br />
surface. When would differences sufficiently amount to a "change<br />
in appearance" Based on Tseng's specification and for the<br />
myriad of possible appearance factors mentioned above, that would<br />
not be known to one with ordinary skill in the art.<br />
Notwithstanding its problems under 35 U.S.C. § 112, second<br />
paragraph, claim 134 is also unpatentable under 35 U.S.C. § 112,<br />
first paragraph, for lack of written description in the<br />
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Interference No. 104,482<br />
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specification as filed. Claim 134 is not an original claim<br />
presented when Tseng's involved application was filed.<br />
Therefore, its own text cannot be regarded as a part of the<br />
original specification of Tseng. In no uncertain terms, claim<br />
134 recites that the strip of material having the two layers of<br />
contrasting colors changes in appearance as the disposable razor<br />
or razor cartridge is used in shaving.<br />
In our discussion of whether there is interference-in-fact,<br />
we have already explained why Tseng's specification as filed does<br />
not provide a written description for any "multiple points-intime"<br />
embodiment that gives a progressive visual indication from<br />
one shaving session to the next. The very same analysis is<br />
applicable to explain why Tseng's specification as filed does not<br />
provide written description for the feature specifying that the<br />
indicator strip changes in appearance of the indicator strip as<br />
the disposable razor or razor cartridge is used in shaving.<br />
Furthermore, the case of lack of written description in the<br />
specification is much stronger here, in the context of Tseng's<br />
claim 134 which goes beyond visual indications from one shaving<br />
session to the next by specifying that the change in appearance<br />
is "as the disposable razor or razor cartridge is used in<br />
shaving." That means from one shaving stroke to the next, even<br />
within the same shaving session, there would be a visual<br />
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indication of some sort. Tseng's disclosure on page 6 of its<br />
specification states that with sufficient use, the second colored<br />
region of a disparate color is exposed does not provide a<br />
description for the specific requirement set forth in Tseng's<br />
claim 134. As has been discussed above in connection with<br />
Doroodian's no interference-in-fact motion, Tseng's Figures 3-6<br />
do not disclose any "multiple points-in-time" embodiment that<br />
gives a progressive visual indication even from shave to shave.<br />
They also do not give a progressive visual indication from stroke<br />
to stroke. As for the testing results submitted by Tseng with<br />
respect to its Example 13, the photographs of Tseng's Exhibits<br />
2063, 2064A and 2092-2099 illustrate only images taken at the<br />
beginning of each successive shaving session. They do not reveal<br />
the state of the indicator strip from shaving stroke to shaving<br />
stroke.<br />
For the foregoing reasons, Tseng's claim 134 is unpatentable<br />
under 35 U.S.C. § 112, first and/or second paragraphs.<br />
Ordinarily, prior to a sua sponte holding of unpatentability<br />
we would ask the parties to address the pertinent issues. Such<br />
an invitation is unnecessary here, because the parties have<br />
already fully briefed the issue of whether Tseng's specification<br />
provides written description for a "multiple points-in-time"<br />
visual indication, in the context of Doroodian's preliminary<br />
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motion 1 alleging no interference-in-fact. To the extent that<br />
party Tseng would like an opportunity to submit arguments<br />
relating to our finding of indefiniteness under 35 U.S.C. § 112,<br />
second paragraph, it may include such arguments in any request<br />
for reconsideration to be filed within thirty (30) days of the<br />
date of this decision.<br />
There also does not appear to be any useful purpose for<br />
party Tseng to propose a substitute claim to replace claim 134,<br />
since we have concurrently found (1) that Tseng's specification<br />
does not provide written description support for "multiple<br />
points-in-time" visual indication, and (2) that Tseng's claims<br />
directed to "single point-in-time" visual indication do not<br />
interfere with Doroodian's involved claims. Therefore, we will<br />
not provide a period for Tseng to propose a substitute claim.<br />
C. Tseng's preliminary motion 1 to add<br />
claims 137 and 138 to its application<br />
Party Tseng had an opportunity to file a responsive motion<br />
under 37 CFR § 1.633(i) when Doroodian filed a preliminary motion<br />
under 37 CFR § 1.633(b) alleging no interference-in-fact. Such a<br />
responsive motion can be to redefine the interference by adding<br />
one or more claims which would interfere with Doroodian's<br />
involved claims even if it is determined that the original<br />
involved claims of Tseng do not. Here, Tseng filed no responsive<br />
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motion under 37 CFR § 1.633(i) and we have determined that there<br />
is no interference-in-fact between the originally involved claims<br />
of the parties designated as corresponding to the count at the<br />
inception of this interference. Consequently, we need not reach<br />
any preliminary motion of Tseng. However, we are willing to give<br />
the benefit of doubt to Tseng who might have thought that it need<br />
not file a responsive motion to add claims because it already had<br />
filed a preliminary motion to add claims 137 and 138 in the<br />
initial round of preliminary motions.<br />
Therefore, we will consider Tseng's preliminary motion 1 to<br />
add claims 137 and 138, but only from the perspective of a<br />
responsive motion under 37 CFR § 1.633(i), for the potential of<br />
these claims to salvage a holding of no interference-in-fact.<br />
Proposed independent claim 137 reads as follows:<br />
A razor comprising a blade member having a shaving<br />
edge, and an external skin engaging member adjacent the<br />
shaving edge of said blade member, said skin engaging<br />
member comprised of: an elongated sheath comprised of a<br />
mixture of a water soluble shaving aid and a water<br />
insoluble material, and a rigid core extending axially<br />
throughout said sheath; wherein said core and said<br />
sheath are fabricated from materials which exhibit<br />
different core and sheath colors, wherein upon use,<br />
said sheath will wear along a skin engaging surface to<br />
expose said different colored core, thus providing an<br />
indication that the skin engaging member has reached<br />
its desired life or that the razor has reached its<br />
desired life. (Emphasis added.)<br />
Proposed dependent claim 138 reads as follows:<br />
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The razor of claim 137 wherein said water soluble<br />
shaving aid is selected from the group consisting of<br />
polyethylene oxide, polyvinyl pyrrolidone,<br />
polyacrylamide, hydroxypropyl cellulose, polyvinyl<br />
imidazoline, polyhydroxyethylmethacrylate, silicone<br />
copolymers, sucrose stearate, vitamin E, panthenol,<br />
aloe, essential oils and combinations thereof and said<br />
water insoluble material is selected from the group<br />
consisting of nylon, ethylene vinyl acetate,<br />
polyethylene, polypropylene, polystyrene, polyacetal<br />
and combinations thereof.<br />
Insofar as any visual indication is concerned, the newly<br />
proposed claims, as compared to the originally involved Tseng<br />
claims 113, 117-123, 130-133 and 135, further specify that visual<br />
exposure of the different color of the core is an indication that<br />
"the skin engaging member has reached its desired life or that<br />
the razor has reached its desired life." The addition of this<br />
recitation does not help to remedy the deficiencies of the<br />
original claims for failing to anticipate or render obvious the<br />
involved Doroodian claims which require progressive or "multiple<br />
points-in-time" visual indication of relative blade wear from<br />
shaving session to shaving session. An indication that either<br />
the skin engaging member or the razor has reached its desired<br />
life is still a "single point-in-time" visual indication not<br />
meaningfully different from that specified in Tseng's claims 113,<br />
117-123, 130-133 and 135. We also have already determined that<br />
Tseng's specification does not disclose any embodiment having a<br />
"multiple points-in-time" visual indication. In that light,<br />
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Tseng's motion does not make out a prima facie basis for relief.<br />
Because proposed new claims 137 and 138 do not cure the<br />
deficiencies of the original involved claims insofar as the<br />
existence of interfering subject matter is concerned, Tseng's<br />
preliminary motion 1 to add claims 137 and 138 is dismissed.<br />
D. Tseng's other pending preliminary motions<br />
We have determined that there is no interference-in-fact,<br />
i.e., that the claims of the parties are patentable over the<br />
claims of the opponent even if the opponent is deemed to have<br />
been the prior inventor(s). Tseng has filed numerous preliminary<br />
motions seeking to have the Board hold that Doroodian's claims<br />
are unpatentable. The issue before the Board is whether Tseng's<br />
preliminary motions for judgment against Doroodian's claims<br />
should be reached on their merits when the Director, through the<br />
Board, has determined that no interference exists.<br />
While we have held Tseng's claim 134 to be unpatentable, the<br />
determination is not made pursuant to any preliminary motion for<br />
judgment filed by Doroodian, but necessitated by our analysis of<br />
whether the claims of the parties interfere. An unpatentable<br />
claim cannot serve as the basis for an interference.<br />
On page 24 of Tseng's opposition, it is stated:<br />
Since Perkins v. Kwon, 886 F.2d 325, 328, 12<br />
USPQ2d 1308, 1310 (Fed. Cir. 1989), the Federal Circuit<br />
repeatedly has held that the Board should decide issues<br />
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of patentability and priority that have been fully<br />
developed by the parties, even if the Board determines<br />
that there is no interference-in-fact. (Citations<br />
omitted) (Emphasis added).<br />
We have reviewed every case authority cited by Tseng's<br />
counsel. None of them makes the statement or representation that<br />
even if the Board finds that there is no interference-in-fact, it<br />
should nonetheless decide all issues of patentability and<br />
priority which have been fully developed by the parties. Also,<br />
none of them involves the fact situation that the Board has<br />
determined that the claims of the parties do not interfere.<br />
The issue would appear to be one of first impression.<br />
Accordingly, the parties are required to brief the issue of<br />
whether the Board should decide on the merits Tseng's preliminary<br />
motions 2-5 attacking the patentability of Doroodian's claims.<br />
Among other points, the parties must address the following:<br />
1. Are there alternative remedies for Tseng to urge the<br />
unpatentability of Doroodian's claims (e.g., reexamination,<br />
defense to a civil action alleging infringement, protest under<br />
PTO rules) and, if so, are those remedies adequate or inadequate<br />
and why<br />
2. Would consideration of the patentability of Doroodian's<br />
claims in this interference amount to an impermissible post-grant<br />
cancellation proceeding<br />
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3. How will the parties be prejudiced if the Board does<br />
not decide the patentability issues raised by Tseng<br />
4. Given that there is no interference-in-fact, would a<br />
decision on the patentability of Doroodian's claims constitute an<br />
"advisory" opinion and, if so, what justification is there for<br />
expending fee revenue to render an advisory opinion<br />
5. Would deciding Tseng's preliminary motions for judgment<br />
be consistent or inconsistent with the decision of the Court of<br />
Customs and <strong>Patent</strong> Appeals in Nitz v. Ehrenriech, 537 F.2d 539,<br />
190 USPQ 413 (CCPA 1976), vacating an award of priority where it<br />
held there was no interference-in-fact.<br />
The principal brief of each party must be filed within<br />
fourteen (14) days of the date of this communication. Each party<br />
may file a responsive brief within seven (7) days of the opposing<br />
party's principal brief.<br />
E. The Parties' Motions to Suppress Evidence<br />
Doroodian's Motions to Suppress<br />
Doroodian's Motion 1 to suppress seeks to suppress "new"<br />
evidence relied upon by Tseng in Tseng's reply briefs and the<br />
testimony of Drs. Kwiecien and Thomas based on such "new"<br />
evidence, and to deny consideration of Tseng's replies 1-5 for<br />
failure to follow procedures governing the filing of pleadings.<br />
We have, however, not reached the merits of Tseng's preliminary<br />
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motions 2-5. As for Tseng's preliminary motion 1, it does not<br />
make out a prima facie basis for relief and we have had no<br />
occasion to consider Doroodian's opposition or Tseng's reply.<br />
Accordingly, Doroodian's motion 1 to suppress is dismissed.<br />
Doroodian's Motion 2 to suppress seeks to suppress the<br />
testimony of Drs. Kwiecien (TE 2110, 12) and Thomas (Tseng<br />
Exhibit 2115, 85-86) that Tseng relied on in its Oppositions 1<br />
and 2 and Reply 1 relating to the condition and appearance of<br />
S2293-1 strips during shaving tests. Doroodian's Motion 2 to<br />
suppress also seeks to suppress (a) Tseng Exhibits 2063 and 2092-<br />
2095 (photographs of razor cartridges containing S2293-1 strips);<br />
(b) Tseng Exhibits 2064A and 2096-2099 (photographs of portions<br />
of razor cartridges containing S2293-1 strips); and (c) Tseng<br />
Exhibits 2100-2104 (actual razors with cartridges containing<br />
S2293-1 strips after the end of the shaving tests).<br />
To the extent that items sought to be suppressed are not<br />
relied on in Tseng's opposition to Doroodian's preliminary motion<br />
1, motion 2 to suppress is dismissed, because we have not reached<br />
the merits of Doroodian's preliminary motion 2 or Tseng's<br />
preliminary motions 2-5 and because Tseng's preliminary motion 1<br />
does not make out a prima facie basis for relief. Insofar as the<br />
items are relied upon in Tseng's opposition to Doroodian's<br />
preliminary motion 1, the motion to suppress is denied.<br />
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Drs. Kwiecien and Thomas testified as technical experts.<br />
Their opinions are based on the photographs taken of various<br />
razor cartridges or portions thereof. It is not necessary that<br />
either witness must have personally observed the cartridges while<br />
they were being tested, in order for them to form an opinion<br />
based on the photographs of the cartridges and portions of<br />
cartridges during the testing. Even if the photographs and the<br />
used cartridges are regarded as hearsay, it does not mean that<br />
the experts cannot have an opinion as to what they show. See<br />
Fed. R. Evid. 702. In any event, we do not regard the<br />
photographs as hearsay, because simply by themselves they do not<br />
make an assertion. They are not out-of-court statements offered<br />
to prove the truth of the matter asserted. Rather, they<br />
constitute experimental data which may be relied upon by expert<br />
witnesses in the formulation of their respective opinions. The<br />
photographs and used cartridges have been authenticated by the<br />
testimony of Linda Galfetti (Tseng Exhibit 2113). Ms. Galfetti<br />
testified about her receipt of the razor cartridges with<br />
indicator strips, the shaving test procedures, the taking of the<br />
photographs, and the transfer of the used cartridges and the<br />
photographs to Dr. Kwiecien.<br />
Doroodian's alleges that because Tseng has failed to comply<br />
with 43 of the Notice Declaring Interference which is entitled<br />
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"Reliance on scientific tests and data," Tseng's exhibits<br />
including Exhibits 2063, 2064A, and 2092-2104 relating to shave<br />
test data should be suppressed. Even without suppressing such<br />
exhibits, however, we have granted Doroodian's preliminary motion<br />
1 alleging no interference-in-fact. Accordingly, with regard to<br />
alleged non-compliance with 43 of the Notice Declaring<br />
Interference, the motion to suppress is dismissed as moot.<br />
Tseng's Motion to Suppress<br />
Tseng moves to suppress (1) Affidavits I and II and the<br />
declaration of Anthony R. Booth; (2) Doroodian Exhibit 1023, and<br />
(3) the cross-examination testimony of Tseng's witnesses Michael<br />
J. Kwiecien, Stephan P. Williams, Colin J. Clipstone, and Edwin<br />
L. Thomas.<br />
Because Doroodian's preliminary motion 1 and its reply did<br />
not rely on Affidavit II of Anthony R. Booth (Doroodian Exhibit<br />
1016), the motion is dismissed insofar as it seeks to suppress<br />
that affidavit.<br />
Tseng's opposition did not rely on the declaration of Colin<br />
J. Clipstone (Tseng Exhibit 2025). Doroodian's preliminary<br />
motion 1 and its reply did not rely on any portion of the crossexamination<br />
testimony of Colin J. Clipstone. Accordingly, the<br />
motion is dismissed insofar as it seeks to suppress the crossexamination<br />
testimony of Colin J. Clipstone.<br />
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Tseng argues that Booth's declaration is improperly<br />
duplicative of Booth's Affidavit II. The argument is rejected.<br />
The declaration and the affidavit had different contexts. As is<br />
pointed out by Doroodian, Affidavit II has to do with supporting<br />
Doroodian's prima facie case in its preliminary motion 2. The<br />
separate presentation in Booth's declaration is for rebutting<br />
Tseng's positions. While no doubt there is some overlap between<br />
the subject covered, the separation has a rational basis and<br />
appears to help in providing a better organization. At the very<br />
least it eliminates incorporation by reference or mere reference<br />
to another document which was submitted for a different purpose.<br />
Accordingly, the motion is denied insofar as it seeks to suppress<br />
the declaration of Anthony R. Booth on the basis of<br />
duplicativeness or redundancy.<br />
Tseng's motion seeks to suppress the entire crossexamination<br />
transcript of Stephan P. Williams, Colin J.<br />
Clipstone, Edwin L. Thomas, and Michael J. Kwiecien on the ground<br />
that their deposition was not taken before a notary who was<br />
authorized to take such deposition in Massachusetts. The notary,<br />
Mr. Donald R. DePew, is a notary of New York, not Massachusetts<br />
where the deposition took place. In pertinent part, 37 CFR §<br />
1.674(a) states: "(a) A deposition shall be taken before an<br />
officer authorized to administer oaths by the laws of the United<br />
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States or of the place where the examination is held."<br />
Because the cross-examination testimony of Colin J.<br />
Clipstone was not relied upon by either party in connection with<br />
Doroodian's preliminary motion 1 for no interference-in-fact,<br />
insofar as the motion to suppress is directed to the crossexamination<br />
testimony of Colin J. Clipstone is concerned, the<br />
motion is dismissed.<br />
With regard to the cross-examination testimony of Messrs.<br />
Kwiecien, Williams, and Thomas, the motion to suppress is denied.<br />
The first deposition of these witnesses taken by Mr. DePew, a New<br />
York Notary, in the state of Massachusetts occurred on August 2,<br />
2000 with the examination of Dr. Edwin L. Thomas. Dr. Michael J.<br />
Kwiecien was deposed on August 2, 2000, and Dr. Edwin L. Thomas<br />
was deposed on August 10, 11, and 23, 2000. Tseng's objection on<br />
the ground of 37 CFR § 1.674(a) was not made until September 22,<br />
2000. Tseng was aware of the qualification of Mr. DePew at least<br />
by August 16, 2000, when it retained Mr. DePew to take the crossexamination<br />
testimony of Doroodian's witness Dr. Anthony R. Booth<br />
in New York. Tseng's objection was served more than one month<br />
after Tseng had retained the services of Mr. DePew as a notary of<br />
the state of New York. We find, under these circumstances, that<br />
Tseng had either waived the issue on the respective dates of the<br />
depositions of Messrs. Kwiecien, Williams, and Thomas by not<br />
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making an objection at the time the testimony was taken, or made<br />
an untimely objection on September 22, 2000. The procedure for<br />
making an objection when an exhibit is served is not applicable<br />
to live depositions or cross-examinations where objections of<br />
this sort relating to testimony being produced live should be<br />
made at the time the testimony is taken. Tseng has offered no<br />
excuse for not inquiring into the qualification of the notary<br />
public at the commencement of each deposition.<br />
Tseng's motion seeks to suppress the affidavit and<br />
declaration testimony of Dr. Anthony R. Booth on the alleged<br />
ground that Dr. Booth's testimony contains mischaracterizations<br />
and misstatements of various items of evidence about which he has<br />
made a statement. We regard this ground of the motion to<br />
suppress as frivolous and a wasting of the time and resources of<br />
the opposing party and the Board.<br />
Mischaracterizations and misstatements, if they exist,<br />
simply go to the weight of the testimony. If in the view of<br />
Tseng the testimony of Dr. Booth contains mischaracterizations<br />
and/or misstatements, the proper action to take is to point out<br />
the alleged mischaracterizations and/or misstatements during<br />
cross-examination of Dr. Booth and either in an opposition to<br />
Doroodian's motion relying on such testimony, in a reply to<br />
Doroodian's opposition relying on such testimony, or in an<br />
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observation with respect to cross-examination subsequent to<br />
Doroodian's reply relying on such testimony. In a proper<br />
instance where a genuine need exists, Tseng may even seek<br />
permission to file a surreply to respond to a Doroodian reply<br />
relying on such testimony. Tseng's disagreement with the<br />
statements or opinions of Dr. Booth constitutes no basis to<br />
suppress the testimony of Dr. Booth. To the extent that the<br />
motion to suppress is based on Tseng's assertion that the<br />
testimony of Dr. Booth contains mischaracterizations or<br />
misstatements, the motion is denied.<br />
Tseng's motion also seeks to suppress portions of the crossexamination<br />
testimony of Michael J. Kwiecien, and Edwin L.<br />
Thomas, on the basis that Doroodian's citation to their testimony<br />
does not bring out the full story and thus mischaracterizes their<br />
testimony. This ground of suppression based on alleged<br />
incomplete citation is just as frivolous as the attempt to<br />
suppress Dr. Booth's testimony on the ground that it contains<br />
what Tseng regards as mischaracterizations or misstatements. If,<br />
in the opinion of Tseng, Doroodian's citation to transcripts of<br />
testimony does not bring out the full story, Tseng was free to<br />
identify the other parts which in its opinion should also be<br />
considered. Accordingly, insofar as the motion to suppress is<br />
based on alleged incomplete citation to the transcript of Drs.<br />
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Kwiecien and Thomas, the motion is denied.<br />
The motion to suppress further seeks to suppress the<br />
affidavits and declaration of Dr. Anthony R. Booth, on the ground<br />
that Dr. Booth quoted various passages of Doroodian's patent and<br />
then simply stated that the quoted passages constitute an<br />
accurate teaching without any explanation. The failure to<br />
explain only affects the persuasiveness or believability of the<br />
statement and does not constitute an adequate ground for<br />
suppressing Dr. Booth's testimony in that regard. Accordingly,<br />
insofar as the motion to suppress is based on this ground for<br />
suppression, the motion is denied.<br />
Tseng's motion seeks to suppress Paragraph Nos. 9 and 11-12<br />
of Booth's Affidavit I and Paragraph Nos. 9 and 11-12 of Booth's<br />
declaration on the ground that Doroodian's involved patent<br />
constitutes hearsay and those paragraphs of the testimony relies<br />
on such hearsay as proof for such testimony. Tseng's argument is<br />
misplaced. We have reviewed Paragraph Nos. 9 and 11-12 of<br />
Booth's Affidavit I and Paragraph Nos. 30, 39 and 43 of Booth's<br />
declaration but do not find them as presenting opinions on<br />
inventions, technology in general, or state of the art, whose<br />
support lies in the presumed truth of any matter asserted in<br />
Doroodian's involved patent. Rather, with regard to the<br />
specification of Doroodian's involved patent, Dr. Booth's<br />
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testimony is about what Tseng's disclosure says, describes, and<br />
teaches. The focal point is the disclosure of Doroodian's<br />
involved patent, which Dr. Booth discusses, not any separate<br />
opinion of Dr. Booth which derives support from the content of<br />
Doroodian's patent specification. Accordingly, insofar as the<br />
motion to suppress is based on alleged reliance of Booth's<br />
testimony on hearsay, the motion is denied.<br />
Tseng's motion seeks to suppress Doroodian's Exhibit 1002<br />
which is simply a clean copy of Doroodian's involved patent<br />
claims. Tseng has failed to demonstrate how Doroodian has relied<br />
on that exhibit to prove the truth of any matter asserted in the<br />
exhibit. In our view, Doroodian has simply relied on that<br />
exhibit as an indication of what the claims say. The motion to<br />
suppress Exhibit 1002 on the ground of hearsay is denied.<br />
Tseng's motion seeks to suppress Doroodian's Exhibit 1004<br />
which a copy of Doroodian's specification as filed. Tseng<br />
asserts that Doroodian has relied on the exhibit as prove of the<br />
matter asserted in the exhibit, citing to pages 3-4 and Paragraph<br />
Nos. 5-9 of Doroodian's preliminary motion 1. However, Tseng has<br />
failed to persuade us that the assertion has merit. Tseng has<br />
not explained why the truth of anything asserted in Doroodian's<br />
specification is even an issue, as compared to just what the<br />
specification says, describes, and teaches. Paragraph Nos. 5-9<br />
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of Doroodian's preliminary motion 1 is under the descriptive<br />
heading "The Involved Doroodian '331 <strong>Patent</strong> Specification and<br />
Claims," and appear to only set forth a picture of the world as<br />
seen through the eyes of Doroodian's specification and claims.<br />
Insofar as Tseng's motion seeks to suppress Exhibit 1004 as<br />
hearsay, the motion is denied.<br />
Tseng's motion seeks to suppress Doroodian's Exhibit 1018<br />
which is Doroodian's first drawing and written description of the<br />
invention of the count. Because the exhibit has not been relied<br />
on by either party in connection with any preliminary motion, the<br />
motion to suppress this exhibit is dismissed.<br />
Tseng's motion on page 10 makes the plain assertion that<br />
Doroodian's Exhibit 1024 constitutes inadmissible hearsay.<br />
However, no explanation has been provided to demonstrate the<br />
assertion. Tseng does not even inform the Board where that<br />
exhibit has been relied upon by Doroodian to prove anything.<br />
Insofar as the motion to suppress is directed to this exhibit,<br />
the motion is denied.<br />
Tseng's motion to suppress seeks to suppress the testimony<br />
of Dr. Anthony R. Booth on the ground that he is not qualified<br />
under Fed. R. Evid. 702 as an expert to give an opinion on the<br />
subject matter of the invention at issue in this interference.<br />
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We are not persuaded and thus the motion to suppress in that<br />
regard is denied.<br />
Not all persons qualified as an expert to give a technical<br />
opinion necessarily have the same background in either education<br />
or specific experience. It is also not necessary that a<br />
qualified expert must have worked on the same goals of research<br />
that produced an item with respect to which he or she would<br />
provide testimony. Fed. R. Evid. 702 is not that narrow, or else<br />
only colleagues working on the same project, having identical<br />
responsibilities, education, and employment history can qualify<br />
as an expert with respect to an issue relating to the project.<br />
Dr. Booth received a Bachelor's degree in Metallurgy in 1963<br />
and a Doctorate degree in Natural Science in 1967. His "years in<br />
the shaving industry" spans from 1970 to 1999 and involved<br />
various aspects of the industry including technical design,<br />
marketing, business management, licensing and evaluation of new<br />
technology. See Paragraph No. 3 of Booth's Affidavit I. Dr.<br />
Booth is a named inventor on at least three U.S. <strong>Patent</strong>s in the<br />
technical field of razor cartridges: U.S. <strong>Patent</strong> No. 5,692,302<br />
filed on May 22, 1995 and entitled "Razor Cartridges Comprising<br />
Wound Healing Compositions And Methods For Preparing And Using<br />
Same"; U.S. <strong>Patent</strong> No. 4,247,982 filed April 2, 1979 and entitled<br />
"Skin-flow Control Razor"; and U.S. <strong>Patent</strong> No. 4,170,821 filed<br />
- 70 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
December 2, 1977 and entitled "Razor Cartridges."<br />
We are satisfied that Dr. Booth's background passes the<br />
threshold necessary for qualifying as an expert witness under<br />
Fed. R. Evid. 702, for the subject matter of the invention<br />
involved in this interference, generally identifiable as razor<br />
cartridges comprising a wear indicating strip which gives a<br />
visual indication of the relative wear of the shaving blade. The<br />
technology is not rocket science or extremely complicated. Dr.<br />
Booth may not be among the most qualified of all experts to<br />
testify about the invention, but he nonetheless qualifies.<br />
Tseng's argument about the lack of publications authored by Dr.<br />
Booth and his lack of awareness of recent razor cartridges on the<br />
market may diminish the persuasiveness of Dr. Booth's testimony<br />
but do not disqualify him as an expert witness under Fed. R.<br />
Evid. 702, in light of Dr. Booth's other qualifications. Note<br />
especially Dr. Booth's statement that "Up until the early 1990's,<br />
I kept abreast of Schick's razor products and patents directed to<br />
razor products, as well as products and patents of competitors,<br />
as part of my ongoing assignment to assist Warner Lambert in<br />
various activities regarding the litigation concerning U.S.<br />
<strong>Patent</strong> No. 4,170,821 entitled 'Razor cartridges.'"<br />
Similarly, lack of citation to scholarly work is not a basis<br />
to suppress Dr. Booth's testimony. Dr. Booth may testify based<br />
- 71 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
on his own background and experience. We also reject Tseng's<br />
apparent position that any time the word "could" is used in Dr.<br />
Booth's testimony that testimony is by definition speculative.<br />
Whether an opinion is speculative depends on the basis for<br />
forming that opinion, and is not determined by whether the<br />
opinion is that something "could" happen.<br />
Tseng's motion to suppress seeks to suppress those portions<br />
of Dr. Anthony R. Booth's Affidavit I and declaration which<br />
simply makes legal conclusions. However, the vast majority of<br />
the portions of Dr. Booth's testimony objected to by Tseng are<br />
not legal conclusions. Tseng appears to believe, erroneously,<br />
that any factual testimony whose purpose is to support an<br />
ultimate conclusion of law constitutes an improper legal<br />
conclusion. For instance, on page 16 of Tseng's motion to<br />
suppress, it is stated:<br />
Booth's statements are not confined to technical<br />
factual issues over which Booth claims expertise.<br />
Rather, Booth's technical factual assertions are made<br />
to support ultimate conclusions of law. (Emphasis<br />
added.)<br />
While the ultimate question of claim scope is indisputably a<br />
conclusion of law, claim construction as a legal conclusion is<br />
based on numerous underlying factual inquiries, e.g., what do the<br />
claims say, what do the words mean to one with ordinary skill in<br />
the art, and what does the specification reveal, etc. Indeed,<br />
- 72 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
almost the entire exercise of claim construction is based on<br />
underlying factual inquiries until the very last step to make the<br />
ultimate conclusion of claim scope. An analogy can be drawn to<br />
the issue of obviousness. While obviousness is a question of<br />
law, it is based on four underlying factual inquiries (1) scope<br />
and content of the prior art; (2) differences between the claimed<br />
invention and the prior art; (3) level of ordinary skill in the<br />
art; and (4) secondary considerations of objective evidence of<br />
nonobviousness. The underlying factual inquiries are no less<br />
factual just because they are relied upon to make a legal<br />
determination on an ultimate issue of law.<br />
Tseng mistakenly views Dr. Booth's testimony on what the<br />
Tseng claims and the Doroodian claims say, describe, disclose, or<br />
teach as testimony on an ultimate legal conclusion. What the<br />
claims say, describe, disclose, or teach is not the end of the<br />
game insofar as the ultimate question of claim construction is<br />
concerned. For instance, because of possible application of the<br />
principles of prosecution history estoppel, claim<br />
differentiation, or an unduly narrow or inconsistent<br />
specification, a claim's scope may not be the same as what the<br />
words of the claim say or teach to one with ordinary skill in the<br />
art. While a technical expert should not testify on the ultimate<br />
legal question of claim scope, his or her testimony with regard<br />
- 73 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
to how the words of a claim or specification would be understood<br />
or what they would describe, disclose, or teach, is appropriate.<br />
To the extent that Dr. Booth gave mere conclusions on an<br />
ultimate legal question, Tseng's motion has not sufficiently<br />
identified them apart from proper testimony on underlying factual<br />
matters. In essence, Tseng's motion has lumped them all together<br />
as one. We decline to undertake the exercise on Tseng's behalf<br />
to separate out the true ultimate legal conclusions which may<br />
exist from the abundance of factual testimony by Dr. Booth. It<br />
suffices to say here only that to the extent that there is any<br />
testimony by Dr. Booth directly on the ultimate legal conclusion<br />
of claim scope or obviousness, we have given no weight to such<br />
testimony. Dr. Booth's testimony has been considered only<br />
insofar as it concerns the underlying factual issues on which<br />
claim construction or a determination of obviousness is based.<br />
Tseng's motion states that Dr. Booth impermissibly opines on the<br />
enablement and definiteness of Doroodian's claims. We have,<br />
however, not addressed the merits of Tseng's preliminary motions<br />
for judgment against Doroodian's claims.<br />
For the foregoing reasons, insofar as the motion to suppress<br />
seeks to suppress the testimony of Dr. Anthony R. Booth on the<br />
ground that they improperly contain conclusions on questions of<br />
law, the motion is denied. To the extent that there is any such<br />
- 74 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
testimony from Dr. Anthony R. Booth, however, which gives an<br />
opinion on what is purely a legal conclusion or an ultimate<br />
question of law, we have given it no weight. With or without the<br />
testimony of Dr. Anthony R. Booth, we would have made the same<br />
legal conclusions. Note also Fed. R. Evid. 704(a) which states:<br />
Except as provided in subdivision(b) [concerning the<br />
mental state of a defendant in a criminal case],<br />
testimony in the form of an opinion or inference<br />
otherwise admissible is not objectionable because it<br />
embraces an ultimate issue to be decided by the trier<br />
of fact.<br />
Conclusion<br />
Doroodian's preliminary motion 1 alleging no interferencein-fact<br />
is granted.<br />
Tseng's preliminary motion 1 to add claims is denied.<br />
Tseng's claim 134 is unpatentable under 35 U.S.C. § 112,<br />
first and/or second paragraphs.<br />
The principal brief requested in Section D of this opinion<br />
shall be filed no later than fourteen (14) days of the date of<br />
this communication, and the responsive brief within seven (7)<br />
days of the filing of the opposing party's principal brief.<br />
Notwithstanding the request in Section D for further<br />
briefing, any request for reconsideration of the decision on<br />
Doroodian's preliminary motion 1, Tseng's preliminary motion 1,<br />
and the unpatentability holding of Tseng's claim 134 must be<br />
- 75 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
filed within the applicable time period specified in 37 CFR<br />
§ 1.640(c), i.e., 14 days.<br />
RICHARD E. SCHAFER )<br />
Administrative <strong>Patent</strong> Judge )<br />
)<br />
)<br />
JAMESON LEE<br />
) BOARD OF PATENT<br />
Administrative <strong>Patent</strong> Judge ) APPEALS AND<br />
) INTERFERENCES<br />
)<br />
RICHARD TORCZON )<br />
Administrative <strong>Patent</strong> Judge )<br />
Counsel for the Junior Party: Richard A. Inz, Fish & Neave<br />
Counsel for the Senior party: Israel Blum, Morgan & Finnegan,<br />
L.L.P.<br />
- 76 -
THE OPINION ENTERED TODAY IS NOT<br />
BINDING PRECEDENT OF THE BOARD<br />
Filed by: Merits Panel Paper No. 91<br />
Interference Trial Section<br />
Box Interference<br />
Washington, D.C. 20231<br />
Tel: 703-308-9797<br />
Fax: 703-305-0942<br />
UNITED STATES PATENT AND TRADEMARK OFFICE<br />
_______________<br />
BEFORE THE BOARD OF PATENT APPEALS<br />
AND INTERFERENCES<br />
_______________<br />
MINGCHIH M. TSENG<br />
Junior Party<br />
(Application 08/461,318) 8 ,<br />
v.<br />
SIAMAK DOROODIAN-SHOJA<br />
Senior Party<br />
(<strong>Patent</strong> No. 5,388,331). 9<br />
_______________<br />
<strong>Patent</strong> Interference No. 104,482<br />
_______________<br />
Before SCHAFER, LEE and TORCZON, Administrative <strong>Patent</strong> Judges.<br />
LEE, Administrative <strong>Patent</strong> Judge.<br />
MEMORANDUM OPINION AND JUDGMENT<br />
Introduction<br />
On October 16, 2001, we issued a decision (Paper No. 85)<br />
8<br />
Filed on June 20, 1995. Accorded the benefit of<br />
application 08/269,495, filed July 1, 1994. The real party in<br />
interest is The Gillette Company.<br />
9<br />
Based on application 08/188,244, filed January 28, 1994.<br />
The real party in interest is Arthur D. Little Enterprises, Inc.
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
granting senior party Doroodian's preliminary motion 1 asserting<br />
no interference-in-fact and denying junior party Tseng's<br />
preliminary motion 1 to add more claims to its involved<br />
application. On the subject of interference-in-fact, we found<br />
that Doroodian had shown that its involved claims are patentably<br />
distinct from the involved claims of Tseng. Thus, parties<br />
Doroodian and Tseng do not claim the same patentable invention.<br />
Neither party has requested reconsideration of our<br />
decision of October 16, 2001.<br />
In our decision, we also ordered parties Doroodian and Tseng<br />
to brief the issue of whether, in light of our holding of no<br />
interference-in-fact, we should reach Tseng's preliminary motions<br />
2-5 for judgment against Doroodian's involved patent claims. The<br />
parties have each filed a principal brief and a reply brief.<br />
Findings of Fact<br />
Numbered findings 1-22 are contained in our decision of<br />
October 16, 2001. In this opinion, we begin with numbered<br />
finding 23.<br />
23. Tseng's preliminary motion 2 is for judgment against<br />
Doroodian's patent claims 1-6 under 35 U.S.C. § 112, first<br />
paragraph, for lack of an enabling disclosure.<br />
24. Tseng's preliminary motion 3 is for judgment against<br />
Doroodian's patent claims 1-6 for indefiniteness under 35 U.S.C.<br />
- 2 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
§ 112, second paragraph.<br />
25. Tseng's preliminary motion 4 is for judgment against<br />
Doroodian's patent claims 1-6 under 35 U.S.C. § 112, first<br />
paragraph, for lack of written description in the specification.<br />
26. Tseng's preliminary motion 5 for judgment against<br />
claims 1-6 of Doroodian's patent claims 1-6 as being unpatentable<br />
over prior art.<br />
27. The prior art asserted by Tseng against Doroodian for<br />
anticipation under 35 U.S.C. § 102 are: (1) U.S. <strong>Patent</strong> No.<br />
4,170,821 to Booth (against Doroodian's claim 1); (2) U.S. <strong>Patent</strong><br />
No. 4,562,644 to Hitchens (against Doroodian's claims 1-4 and 6);<br />
(3) U.S. <strong>Patent</strong> No. 5,113,585 to Rogers et al. (against<br />
Doroodian's claims 1 and 2); and (4) Sensor ® For Women cartridge<br />
(a commercial product, against Doroodian's claims 1 and 2).<br />
28. The prior art asserted by Tseng against Doroodian for<br />
obviousness under 35 U.S.C. § 103 are: (1) U.S. <strong>Patent</strong> No.<br />
3,879,844 to Griffith in view of U.S. <strong>Patent</strong> No. 2,703,451 to<br />
Hensel (against Doroodian's claims 1-6); (2) U.S. <strong>Patent</strong> No.<br />
4,170,821 to Booth in view of U.S. <strong>Patent</strong> No. 2,703,451 to Hensel<br />
(against Doroodian's claims 1-6); (3) U.S. <strong>Patent</strong> No. 4,562,644<br />
to Hitchens in view of U.S. <strong>Patent</strong> No. 2,703,451 to Hensel<br />
(against Doroodian's claims 1-6); (4) U.S. <strong>Patent</strong> No. 5,113,585<br />
to Rogers et al. in view of U.S. patent No. 2,703,451 to Hensel<br />
- 3 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
(against Doroodian's claims 1-6); and (5) Sensor ® For Women in<br />
view of U.S. <strong>Patent</strong> No. 2,703,451 to Hensel (against Doroodian's<br />
claims 1-6).<br />
29. Tseng's preliminary motion 5 is entitled: "TSENG<br />
CONTINGENT PRELIMINARY MOTION 5" and states the following:<br />
This motion only need be considered if Doroodian's<br />
anticipated motions based on no interference-in-fact<br />
and 35 U.S.C. § 135(b), as well as Tseng Preliminary<br />
Motions 2, 3 and 4 (based on invalidity under 35 U.S.C.<br />
§ 112, first and second paragraphs), are all denied.<br />
In that event, Tseng requests consideration of this<br />
motion.<br />
30. In its principal brief (Paper No. 86), party Tseng<br />
withdrew its still pending preliminary motions 2-4.<br />
31. The only preliminary motion of party Tseng which still<br />
remains pending is Tseng's contingent preliminary motion 5.<br />
Discussion<br />
Party Tseng's preliminary motion 5 is contingent on a number<br />
of circumstances including the denial of Doroodian's preliminary<br />
motion 1 asserting no interference-in-fact. In Paper No. 85,<br />
however, we granted Doroodian's preliminary motion 1 asserting no<br />
interference-in-fact. Therefore, the condition triggering<br />
consideration of Tseng's preliminary motion 5 did not occur.<br />
Accordingly, Tseng's preliminary motion 5 is hereby dismissed.<br />
The parties should note that if our holding of no<br />
- 4 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
interference-in-fact is reversed upon judicial review, then the<br />
contingencies triggering consideration of Tseng's preliminary<br />
motion 5 will have to be reassessed upon return of the case to<br />
the board subsequent to judicial review.<br />
Party Tseng has withdrawn its preliminary motions 2-4<br />
(Finding 30). Consequently, those preliminary motions are no<br />
longer before us for consideration.<br />
It is no longer necessary to decide whether, given our<br />
conclusion of no interference-in-fact, Tseng's preliminary<br />
motions 2-5 should be decided. Because any final hearing on<br />
issues decided by a 3-judge panel would be in the nature of a<br />
request for reconsideration, Charlton v. Rosenstein, No. 104,148,<br />
2000 Pat. App. Lexis 4 (Bd. Pat. App. & Int. (Trial Section)<br />
2000), and because neither party has requested reconsideration of<br />
our decision of October 16, 2001, we designate the panel decision<br />
of October 16, 2001 as final for purposes of judicial review. 10<br />
Judgment<br />
10<br />
We recognize that Doroodian had filed a preliminary<br />
motion 2 for judgment against Tseng's claims based on late<br />
claiming under 35 U.S.C. § 135(b). The basis for relief under<br />
35 U.S.C. § 135(b) is premised upon the same subject matter being<br />
claimed by both parties Doroodian and Tseng. Our decision<br />
granting Doroodian's preliminary motion 1 asserting no<br />
interference-in-fact implicitly disposed of the preliminary<br />
motion under 35 U.S.C. § 135(b). For the sake of clarity,<br />
Doroodian's preliminary motion 2 is herein dismissed.<br />
- 5 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
It is<br />
ORDERED that judgment as to the subject matter of the count<br />
is herein entered in favor of both junior party MINGCHIH M. TSENG<br />
and senior party SIAMAK DOROODIAN-SHOJA;<br />
FURTHER ORDERED that on this record, junior party MINGCHIH<br />
M. TSENG is entitled to a patent containing its application<br />
claims 113, 117-123, 130-133, 135 and 136, but not application<br />
claim 134, which correspond to the count;<br />
FURTHER ORDERED that on this record, senior party SIAMAK<br />
DOROODIAN-SHOJA is entitled to a patent containing its claims 1-6<br />
which correspond to the count;<br />
FURTHER ORDERED that if there is a settlement agreement,<br />
attention is directed to 35 U.S.C. § 135(c) and 37 CFR § 1.661;<br />
and<br />
FURTHER ORDERED that a copy of this judgment will be entered<br />
as a paper in each party's involved application or patent.<br />
RICHARD E. SCHAFER )<br />
Administrative <strong>Patent</strong> Judge )<br />
)<br />
)<br />
JAMESON LEE<br />
) BOARD OF PATENT<br />
Administrative <strong>Patent</strong> Judge ) APPEALS AND<br />
) INTERFERENCES<br />
)<br />
RICHARD TORCZON )<br />
Administrative <strong>Patent</strong> Judge )<br />
- 6 -
Interference No. 104,482<br />
Tseng v. Doroodian-Shoja<br />
Counsel for the Junior Party: Richard A. Inz, Esq., Fish & Neave.<br />
Counsel for the senior party: Israel Blum, Esq., Morgan &<br />
Finnegan, L.L.P.<br />
- 7 -
9 F.3d 948 Page 1<br />
9 F.3d 948, 28 U.S.P.Q.2d 1936<br />
(Cite as: 9 F.3d 948)<br />
Briefs and Other Related Documents<br />
United States Court of Appeals,Federal Circuit.<br />
HOGANAS AB, Plaintiff-Appellant,<br />
v.<br />
DRESSER INDUSTRIES, INC., Defendant-<br />
Appellee.<br />
No. 92-1526.<br />
Nov. 10, 1993.<br />
Rehearing Denied; Suggestion for Rehearing In<br />
Banc Declined Jan. 7, 1994.<br />
<strong>Patent</strong> holder brought action against competitor for<br />
infringement of patent for composition of materials<br />
used for monolithic refractory linings for industrial<br />
furnaces. The United States District Court for the<br />
Western District of Pennsylvania, Timothy K. Lewis,<br />
J., entered summary judgment for competitor, and<br />
patent holder appealed. The Court of Appeals,<br />
Plager, Circuit Judge, held that patent was not<br />
infringed either literally or under doctrine of<br />
equivalents.<br />
Affirmed.<br />
West Headnotes<br />
[1] Federal Courts 170B 766<br />
170B Federal Courts<br />
170BVIII Courts of Appeals<br />
170BVIII(K) Scope, Standards, and Extent<br />
170BVIII(K)1 In General<br />
170Bk763 Extent of Review Dependent<br />
on Nature of Decision Appealed from<br />
170Bk766 k. Summary Judgment.<br />
Most Cited Cases<br />
On appeal of grant of summary judgment, Court of<br />
Appeals independently reviews record to determine<br />
whether any errors of law were made or whether<br />
there are any material issues of fact that remain.<br />
[2] <strong>Patent</strong>s 291 250<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(A) What Constitutes Infringement<br />
291k249 <strong>Patent</strong>s for Compositions of<br />
Matter<br />
291k250 k. Identity in General. Most<br />
Cited Cases<br />
<strong>Patent</strong> for composition of materials used for<br />
monolithic refractory linings for industrial furnaces<br />
was not literally infringed by accused composition<br />
using vinyl chloride acetate fibers; “straw-shaped”<br />
limitation in patent imposed requirement that<br />
channel-forming elements of patented product be<br />
hollow, but acetate fibers in accused product were<br />
solid.<br />
[3] <strong>Patent</strong>s 291 165(4)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k165 Operation and Effect of Claims in<br />
General<br />
291k165(4) k. Reading Limitations or<br />
Elements Into Claims, or Disregarding Limitations or<br />
Elements. Most Cited Cases<br />
It is improper for court to add extraneous limitations<br />
to patent claim, that is, limitations added wholly apart<br />
from any need to interpret what patentee meant by<br />
particular words or phrases in claim.<br />
[4] <strong>Patent</strong>s 291 165(3)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k165 Operation and Effect of Claims in<br />
General<br />
291k165(3) k. Construction of Language<br />
of Claims in General. Most Cited Cases<br />
Although patentee can be his own lexicographer,<br />
words of claim will be given their ordinary meaning,<br />
unless it appears that inventor used them differently.<br />
[5] <strong>Patent</strong>s 291 251<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(A) What Constitutes Infringement<br />
291k249 <strong>Patent</strong>s for Compositions of<br />
Matter<br />
291k251 k. Substitution of Ingredients.<br />
Most Cited Cases<br />
<strong>Patent</strong> for composition of materials used for<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
9 F.3d 948 Page 2<br />
9 F.3d 948, 28 U.S.P.Q.2d 1936<br />
(Cite as: 9 F.3d 948)<br />
monolithic refractory linings for industrial furnaces<br />
was not infringed under doctrine of equivalents by<br />
accused composition using vinyl chloride acetate<br />
fibers; patent holder, through prosecution history<br />
estoppel, relinquished coverage of compositions<br />
employing capillary-sized fibers, and accused fiber<br />
indisputably functioned, in part, through capillary<br />
action.<br />
[6] <strong>Patent</strong>s 291 168(2.1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k168 Proceedings in <strong>Patent</strong> Office in<br />
General<br />
291k168(2) Rejection and Amendment<br />
of Claims<br />
291k168(2.1) k. In General. Most<br />
Cited Cases<br />
Essence of “prosecution history estoppel” is that<br />
patentee should not be able to obtain, through<br />
doctrine of equivalents, coverage of subject matter<br />
that was relinquished during prosecution to procure<br />
issuance of patent.<br />
[7] <strong>Patent</strong>s 291 168(2.1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k168 Proceedings in <strong>Patent</strong> Office in<br />
General<br />
291k168(2) Rejection and Amendment<br />
of Claims<br />
291k168(2.1) k. In General. Most<br />
Cited Cases<br />
For purposes of prosecution history estoppel, legal<br />
standard for determining what subject matter was<br />
relinquished is objective one, measured from vantage<br />
point of what competitor was reasonably entitled to<br />
conclude, from prosecution history, that applicant<br />
gave up to procure issuance of patent.<br />
[8] <strong>Patent</strong>s 291 324.5<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k324 Appeal<br />
291k324.5 k. Scope and Extent of<br />
Review in General. Most Cited Cases<br />
Because prosecution history estoppel is question of<br />
law, Court of Appeals is free to undertake complete<br />
and independent analysis of this issue whether patent<br />
holder relinquished certain subject matter during<br />
prosecution to procure issuance of patent.<br />
[9] <strong>Patent</strong>s 291 226.7<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(A) What Constitutes Infringement<br />
291k226.5 Substantial Identity of Subject<br />
Matter<br />
291k226.7 k. Function, Means,<br />
Operation, and Result. Most Cited Cases<br />
<strong>Patent</strong> for composition of materials used for<br />
monolithic refractory linings for industrial furnaces<br />
was not infringed by accused composition using vinyl<br />
chloride acetate fibers; patent holder failed to show<br />
that solid acetate fibers in accused product were<br />
equivalent of hollow “straw-shaped” elements of<br />
patented composition so as to satisfy<br />
function/way/result test which required patent holder<br />
to show that each limitation of claim was met by<br />
literal or equivalent element of accused product.<br />
*949 Richard Linn, Marks & Murase, Washington,<br />
DC, argued for plaintiff-appellant. Of counsel was<br />
Peter A. Dankin.<br />
Roy W. Hardin, Richards, Medlock & Andrews,<br />
Dallas, TX, argued for defendant-appellee. With<br />
him on the brief was V. Bryan Medlock, Jr. Thomas<br />
R. Felger, Baker & Botts, L.L.P., Dallas, TX,<br />
represented defendant-appellee.<br />
Before PLAGER, Circuit Judge, SMITH, Senior<br />
Circuit Judge, and CLEVENGER, Circuit Judge.<br />
PLAGER, Circuit Judge.<br />
This is a patent infringement case which comes to us<br />
by way of appellant Hoganas AB's (Hoganas) appeal<br />
of the decision of the District Court for the Western<br />
District of Pennsylvania, Civil Action No. 89-304,<br />
granting appellee Dresser Industries, Inc.'s (Dresser)<br />
motion for summary judgment of non-infringement<br />
of U.S. <strong>Patent</strong> No. 3,982,953 (the '953 patent), both<br />
literally and under the doctrine of equivalents. We<br />
affirm.<br />
I. BACKGROUND<br />
Hoganas is the owner of the '953 patent. FN1 That<br />
patent is directed to a particular composition of<br />
materials used to form monolithic refractory linings<br />
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for industrial furnaces. FN2 The composition is<br />
configured to minimize the time required for drying<br />
when such a lining is first applied to the furnace in a<br />
wet and pasty state. Attempts had been made to<br />
speed up the drying process, and thus minimize the<br />
required down-time, through the application of heat.<br />
However, these attempts were not entirely successful<br />
because, with the available compositions, there was<br />
no means of relieving the pressure that built up as the<br />
water evaporated into steam. The result was that the<br />
lining might explode during the drying process.<br />
FN1. The patent issued on September 28,<br />
1976, and thus expired on September 28,<br />
1993.<br />
FN2. Refractory linings are linings capable<br />
of withstanding high temperatures, i.e., 1000<br />
°F or more.<br />
With the claimed composition, this problem is solved<br />
through the addition of “straw-shaped, channelforming<br />
elements.” These elements function to form<br />
channels which release the steam that builds up as<br />
heat is applied in the drying process. Accordingly,<br />
they prevent the explosions that occurred with prior<br />
compositions and thus allow the drying process to<br />
progress more quickly.<br />
That patent contains 7 claims, of which claim 1 is the<br />
broadest:<br />
1. In a refractory mass of the type used for casting,<br />
ramming or stamping refractory linings and for<br />
metallurgical ladles or tapping channels and<br />
composed of 60 to 95% by weight of refractory grog<br />
and 40 to 5% by weight of binder, the improvement<br />
which comprises said mass further containing 0.05 to<br />
0.35% by weight, based on the solids content of the<br />
mass without any additive, of straw-shaped, channelforming<br />
elements equally distributed throughout the<br />
mass, whereby rapid drying of the mass is made<br />
possible.<br />
On June 6, 1988, Hoganas filed suit against Dresser<br />
in the District Court for the Central District of<br />
California (where Dresser apparently had an<br />
established place of business), alleging that a<br />
refractory composition manufactured by Dresser<br />
(bearing the “Adtech” trade name), infringed the '953<br />
patent. That action was subsequently transferred to<br />
the District Court for the Western District of<br />
Pennsylvania, the location of the specific Dresser<br />
division which manufactured the Adtech product.<br />
On April 30, 1989, Dresser filed a motion for<br />
summary judgment of non-infringement. In support<br />
of that motion, Dresser submitted relevant excerpts of<br />
the '953 prosecution history, the affidavit of Thomas<br />
R. Kleeb, one of its employees, and an excerpt from<br />
the deposition of James F. Benzel, apparently<br />
Hoganas' expert. In opposition to that motion,<br />
Hoganas submitted Mr. Benzel's affidavit.<br />
*950 On December 17, 1991, the court appointed,<br />
with the consent of the parties, a special master to<br />
decide the motion. On March 20, 1992, the special<br />
master issued a report recommending that the motion<br />
be granted. The special master focused on the<br />
“straw-shaped, channel-forming elements” limitation.<br />
He concluded it was not literally met by the<br />
corresponding element in the Adtech product, vinyl<br />
chloride acetate fibers, because these fibers “are so<br />
fine as to be barely visible by the unaided eye,” and<br />
thus “bear no resemblance to straw.” He also<br />
concluded this limitation was not met under the<br />
doctrine of equivalents because Hoganas, through<br />
prosecution history estoppel, had relinquished<br />
coverage of compositions employing “capillary-size”<br />
fibers, including the acetate fibers in the accused<br />
product. FN3<br />
FN3. According to the Benzel deposition<br />
excerpt, which is unchallenged, a capillarysized<br />
fiber is one having a diameter of 100<br />
microns or less. The Kleeb affidavit, which<br />
is also unchallenged, establishes that the<br />
acetate fibers in the Adtech product have a<br />
diameter of 15 microns. Thus, they are<br />
capillary-sized.<br />
On April 19, 1992, the district court adopted the<br />
special master's report as the opinion of the court FN4 ,<br />
and entered judgment of non-infringement. This<br />
appeal followed.<br />
FN4. Therefore, the special master's<br />
conclusions are the district court's<br />
conclusions.<br />
II. DISCUSSION<br />
A.<br />
[1] On appeal of a grant of summary judgment, we<br />
independently review the record to determine<br />
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whether any errors of law were made or whether<br />
there are any material issues of disputed fact that<br />
remain. E.g., London v. Carson Pirie Scott & Co.,<br />
946 F.2d 1534, 1537, 20 U.S.P.Q.2d 1456, 1458<br />
(Fed.Cir.1991). If neither is the case, we must<br />
affirm.<br />
B.<br />
[2] Hoganas argues that the district court erred in its<br />
literal infringement analysis. According to Hoganas,<br />
the court erroneously interpreted the “straw-shaped,<br />
channel-forming elements” limitation to mean<br />
“straw-sized.” FN5 This was error, argues Hoganas,<br />
because that limitation, when properly interpreted,<br />
does not impose any requirement as to size.<br />
FN5. It is undisputed that the acetate fibers<br />
in the accused product are much smaller<br />
than straw.<br />
[3] We agree. It is improper for a court to add<br />
“extraneous” limitations to a claim, that is,<br />
limitations added “wholly apart from any need to<br />
interpret what the patentee meant by particular words<br />
or phrases in the claim.” E.I. Du Pont de Nemours &<br />
Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1433,<br />
7 U.S.P.Q.2d 1129, 1131 (Fed.Cir.), cert. denied, 488<br />
U.S. 986, 109 S.Ct. 542, 102 L.Ed.2d 572 (1988).<br />
That appears to be what the district court did,<br />
however, by emphasizing the smallness of the fibers.<br />
The phrase “straw-shaped” unambiguously relates to<br />
shape not size. Thus, it was improper for the court<br />
to use that phrase as the vehicle for incorporating a<br />
size limitation into the claim. FN6<br />
FN6. There is no inconsistency between this<br />
conclusion and our conclusion, discussed<br />
later in this opinion, that Hoganas<br />
relinquished coverage of capillary-sized<br />
elements for purposes of assessing<br />
infringement under the doctrine of<br />
equivalents. By its very nature, the doctrine<br />
of equivalents operates outside the literal<br />
language of claims. Accordingly, through<br />
prosecution history estoppel, an applicant<br />
can be estopped from obtaining coverage of<br />
a particular range of equivalents even<br />
though the estoppel does not find expression<br />
in one of the claim terms.<br />
Nevertheless, we have concluded that any error<br />
committed by the district court in this regard is<br />
harmless. Based on our independent review of the<br />
record, we have concluded the “straw-shaped”<br />
limitation imposes the requirement that the channelforming<br />
elements be hollow. FN7 Because the acetate<br />
fibers in the Adtech product are solid, that product<br />
does not literally infringe any claim of the '953<br />
patent.<br />
FN7. We note that this is the interpretation<br />
adopted by the trial court in Hoganas, A.B.<br />
v. A.P. Green Indus., Inc., 806 F.Supp. 998<br />
at 1003, 26 U.S.P.Q.2d 1795<br />
(W.D.Ga.1992), after a full bench trial.<br />
*951 [4] Our interpretation is fully supported by the<br />
ordinary meaning of the term “straw.” FN8 Although<br />
a patentee can be his own lexicographer, as we have<br />
repeatedly said, the words of a claim “will be given<br />
their ordinary meaning, unless it appears that the<br />
inventor used them differently.” ZMI Corp. v.<br />
Cardiac Resuscitator Corp., 844 F.2d 1576, 1579, 6<br />
U.S.P.Q.2d 1557, 1560 (Fed.Cir.1988) (citing<br />
Envirotech Corp. v. Al George, Inc., 730 F.2d 753,<br />
759, 221 U.S.P.Q. 473, 477 (Fed.Cir.1984)). Based<br />
on our review of the '953 specification and<br />
prosecution history, we are not convinced the '953<br />
inventors used this term differently from its ordinary<br />
meaning. For example, the specification provides<br />
several examples of channel-forming elements, viz.,<br />
“straw or stalks of common cereals, grass, reed or<br />
similar natural materials,” FN9 or “[s]traw-shaped<br />
synthetic elements, e.g., made from paper, plastic or<br />
other organic materials,” FN10 such as “cut pieces of<br />
plastics [sic] sipper straw.” FN11 None of these<br />
examples are identified as being solid, and most if<br />
not all, are unquestionably hollow. FN12 Although<br />
the documentation does not expressly identify the<br />
hollowness characteristic as contributing to the<br />
inventive concept, it is not inconsistent with that<br />
concept either. Moreover, a significant and possibly<br />
critical contribution for this feature can be readily<br />
inferred: it permits the release of steam before the<br />
elements are burned away, and, by reducing the<br />
amount of ash which is formed as the elements burn<br />
out, it reduces the risk that the channels will become<br />
clogged.<br />
FN8. According to Webster's New World<br />
Dictionary, Third Edition, the term “straw”<br />
means “hollow stalks or stems of grain after<br />
threshing” or “a tube of waxed paper,<br />
plastic, etc., used for sucking beverages.”<br />
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(Emphasis added).<br />
FN9. Col. 1, 11. 65-66.<br />
FN10. Col. 1, 11. 66-68.<br />
FN11. Col. 3, 11. 13-14.<br />
FN12. For example, plastic “sipper” straw is<br />
unquestionably hollow.<br />
For all the foregoing reasons, we conclude one of<br />
skill in the art, the vantage point from which the<br />
proper interpretation of the claim is ultimately<br />
determined FN13 , would not have been put on notice<br />
that the term meant other than what it says. Such a<br />
one would be perfectly justified in giving the term its<br />
ordinary meaning. If Hoganas, who was responsible<br />
for drafting and prosecuting the patent, intended<br />
something different, it could have prevented this<br />
result through clearer drafting. For example, as<br />
discussed at the hearing, the phrases “cylindricallyshaped”<br />
or “rod-shaped” could have been used. It<br />
would not be appropriate for us now to interpret the<br />
claim differently just to cure a drafting error made by<br />
Hoganas. That would unduly interfere with the<br />
function of claims in putting competitors on notice of<br />
the scope of the claimed invention.<br />
C.<br />
[5] Hoganas next argues that the district court erred<br />
in its analysis of the doctrine of equivalents issue.<br />
According to Hoganas, the court erred in concluding<br />
that Hoganas, through prosecution history estoppel,<br />
had relinquished coverage of capillary-sized fibers.<br />
[6][7] The essence of prosecution history estoppel is<br />
that a patentee should not be able to obtain, through<br />
the doctrine of equivalents,*952 coverage of subject<br />
matter that was relinquished during prosecution to<br />
procure issuance of the patent. See Loctite Corp. v.<br />
Ultraseal Ltd., 781 F.2d 861, 870, 228 U.S.P.Q. 90,<br />
96 (Fed.Cir.1985). The legal standard for<br />
determining what subject matter was relinquished is<br />
an objective one, measured from the vantage point of<br />
what a competitor was reasonably entitled to<br />
conclude, from the prosecution history, that the<br />
applicant gave up to procure issuance of the patent.<br />
See Prodyne Enters., Inc. v. Julie Pomerantz, Inc.,<br />
743 F.2d 1581, 1583, 223 U.S.P.Q. 477, 478<br />
(Fed.Cir.1984); Kinzenbaw v. Deere & Co., 741 F.2d<br />
383, 389, 222 U.S.P.Q. 929, 933 (Fed.Cir.1984), cert.<br />
denied, 470 U.S. 1004, 105 S.Ct. 1357, 84 L.Ed.2d<br />
379 (1985). FN15<br />
FN13. See Smithkline Diagnostics Inc. v.<br />
Helena Lab. Corp., 859 F.2d 878, 882, 8<br />
U.S.P.Q.2d 1468, 1471 (Fed.Cir.1988).<br />
Hoganas argues that this interpretation is not<br />
supportable because the phrase “straw-shaped” refers<br />
to the general “elongated and thin” silhouette of the<br />
elements, and thus includes hollow and solid<br />
elements. We disagree. According to a dictionary<br />
definition provided by Hoganas, the term “shape”<br />
means the “external surface” of an object. Since the<br />
hollowness of straw is part of its external surface (in<br />
the sense it is exposed to the external environment<br />
and thus visible to an observer), that characteristic is<br />
part of its shape and thus included within the phrase<br />
“straw-shaped.” FN14 Thus, Hoganas' interpretation is<br />
the one that is insupportable.<br />
FN14. A hollow sphere might present a<br />
different case because its hollowness is not<br />
part of its external surface.<br />
Accordingly, we affirm the district court on the literal<br />
infringement issue.<br />
FN15. Ordinarily, the test for determining<br />
the meaning of a claim term is from the<br />
vantage point of one skilled in the art. See<br />
Smithkline Diagnostics, 859 F.2d at 882, 8<br />
U.S.P.Q.2d at 1471. This test would seem<br />
equally appropriate for determining what<br />
subject matter was relinquished in the<br />
context of prosecution history estoppel.<br />
Our precedent dealing with this specific<br />
question recites that the test is measured<br />
from the vantage point of a reasonable<br />
competitor. See, e.g., Prodyne, 743 F.2d at<br />
1583, 223 U.S.P.Q. at 478. We do not see<br />
these formulations as necessarily<br />
inconsistent-the point is the knowledge of<br />
one reasonably skilled in the art who views<br />
the question from the perspective of a<br />
competitor in the marketplace.<br />
[8] Because prosecution history estoppel is a question<br />
of law, FN16 we are free to undertake a complete and<br />
independent analysis of this issue. FN17<br />
FN16. See Loctite Corp., 781 F.2d at 870,<br />
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228 U.S.P.Q. at 96.<br />
FN17. See Trayco, Inc. v. United States, 994<br />
F.2d 832, 835 (Fed.Cir.1993).<br />
The examiner during prosecution issued an office<br />
action finally rejecting the claims for obviousness on<br />
the basis of Matheny, U.S. <strong>Patent</strong> No. 2,224,459.<br />
That patent discloses a composition for making<br />
porous, light-weight refractory insulating bricks<br />
which includes 1-50% FN18 “shredded or comminuted<br />
paper.” One purpose of the paper is to promote<br />
through capillary action FN19 uniform drying of newly<br />
formed bricks prior to firing. FN20 Another is to form<br />
channels for the release of steam caused during firing<br />
by the burn-out of other materials added to the<br />
composition used to make the bricks. FN21<br />
FN18. Matheny does not specify whether<br />
the percentages are by weight or by volume.<br />
FN19. According to the McGraw-Hill<br />
Dictionary of Scientific and Technical<br />
Terms, Second Edition, the phrase<br />
“capillarity,” which is synonymous with<br />
“capillary action,” means a phenomenon that<br />
occurs with respect to liquids : “[t]he action<br />
by which the surface of a liquid where it<br />
contacts a solid is elevated or depressed,<br />
because of the relative attraction of the<br />
molecules of the liquid for each other and<br />
for those of the solid.” This is consistent<br />
with the definition agreed to by the parties at<br />
oral argument.<br />
FN20. Col. 1, 11. 18-21.<br />
FN21. Col. 1, 11. 34-39.<br />
In a subsequent response, Hoganas, without<br />
amending the claims (except to correct a<br />
typographical error), distinguished the Matheny<br />
reference on two principal grounds. The first was<br />
that the claimed composition called for only a small<br />
amount of channel-forming elements-0.05 to 0.35%<br />
by weight-in order to avoid unnecessary porosity<br />
which could impair the strength of the resultant<br />
lining. FN22 Matheny, by contrast, argued Hoganas,<br />
called for a significantly greater amount, i.e. at least<br />
1%, of paper. The second was that, unlike the<br />
comminuted paper in Matheny, the function of the<br />
claimed channel-forming elements was not to achieve<br />
capillary action, a phenomenon which involves liquid<br />
not steam. Consequently, argued Hoganas, “the<br />
thickness of the channel-forming elements would<br />
generally be 100 or more times the thickness of a<br />
material which would provide a capillary action.” FN23<br />
The examiner subsequently allowed the claims.<br />
FN22. This is repeated in the specification.<br />
Col. 2, 11. 34-36.<br />
FN23. The full paragraph of the response in<br />
which this statement was made reads:<br />
[I]t is further clear that [Matheny] is directed<br />
to a method for producing capillary action in<br />
the material. A capillary action is<br />
completely different from the type of action<br />
obtained with the channel-forming elements<br />
of the present invention. Thus, the<br />
thickness of the channel-forming elements<br />
would generally be of a magnitude of 100 or<br />
more times the thickness of a material which<br />
would provide a capillary action.<br />
Moreover, the action of the capillary is<br />
primarily to retain liquid which is opposite<br />
from the purpose of the channels utilized in<br />
the present invention. (Emphasis added).<br />
*953 The district court focused solely on this latter<br />
distinction to conclude that Hoganas had relinquished<br />
coverage of capillary-sized fibers. We see no error<br />
in this conclusion. In our view, a reasonable<br />
competitor could have concluded, from a reading of<br />
the prosecution history, that the examiner relied on<br />
this distinction in allowing the claims, and thus, that<br />
Hoganas had given up coverage of subject matter<br />
incorporating this distinction.<br />
Hoganas argues such a conclusion ignores the rule<br />
that any estoppel created by an applicant's argument<br />
“encompasses all of [the] combined distinctions”<br />
over the cited references. See Read Corp. v. Portec,<br />
Inc., 970 F.2d 816, 824, 23 U.S.P.Q.2d 1426, 1433<br />
(Fed.Cir.1992). According to Hoganas, had the<br />
court properly applied this rule, it would have<br />
concluded that Hoganas gave up at most subject<br />
matter incorporating both of the two principal<br />
distinctions made by Hoganas over Matheny, i.e.,<br />
compositions (1) containing capillary-sized fibers (2)<br />
in percentages greater than 1%, the minimum<br />
percentage specified in Matheny. Since there is no<br />
evidence in the record of the percentage of acetate<br />
fibers that are present in the Adtech product,<br />
according to Hoganas, summary judgment on the<br />
doctrine of equivalents issue was inappropriate.<br />
We cannot agree. The distinction made by Hoganas<br />
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based on the percentage of fibers or elements added<br />
to the composition is of questionable validity in terms<br />
of distinguishing over Matheny. As noted, Matheny<br />
did not expressly indicate whether the percentages<br />
disclosed in that reference were by weight or by<br />
volume. However, in the prosecution history,<br />
Hoganas stated that these percentages were by<br />
volume. Thus, a reasonable competitor was entitled<br />
to conclude, from the '953 prosecution history, that<br />
Hoganas' characterization of Matheny was correct,<br />
and thus that the claimed percentages could<br />
substantially overlap the percentages disclosed in<br />
Matheny (for example, a percentage of 1% by volume<br />
could, depending on the circumstances, be the same<br />
as a percentage of 0.35% by weight ). Consequently,<br />
such a one would not be justified in concluding the<br />
examiner relied on this distinction in allowing the<br />
claims, or in concluding the relinquished subject<br />
matter incorporated this distinction. The rule<br />
espoused in Read has no applicability in such a case.<br />
Hoganas next argues that even if an estoppel was<br />
created on the basis of the one distinction, Hoganas<br />
only relinquished coverage of compositions having<br />
elements employing capillary action not capillarysized<br />
elements. This argument, however, is<br />
unpersuasive. As noted earlier, in its response to the<br />
examiner's rejection, Hoganas specifically mentioned<br />
capillary size and indicated that the ability to perform<br />
capillary action was determined by size. A<br />
competitor would thus have been perfectly justified<br />
in concluding that Hoganas gave up coverage of<br />
capillary-sized fibers.<br />
Moreover, considering that the accused fiber<br />
indisputably functions, in part, through capillary<br />
action FN24 , the distinction being argued by Hoganas<br />
would seem to have no significance. The accused<br />
product would still be within the class of relinquished<br />
subject matter, and thus avoid infringement under the<br />
doctrine of equivalents.<br />
FN24. At oral argument Dresser asserted,<br />
and Hoganas did not dispute, that the fiber<br />
shrinks well before the point at which water<br />
turns to steam, and thus forms capillarysized<br />
channels which help distribute the<br />
water more evenly throughout the lining.<br />
As a result, pockets of water are eliminated,<br />
and the risk of explosion is further reduced.<br />
Perhaps Hoganas' point is that the accused fiber does<br />
not operate solely or principally through capillary<br />
action. FN25 But neither does the comminuted paper in<br />
Matheny. According to that reference, the<br />
comminuted paper performs several significant<br />
functions besides distributing water through capillary<br />
action. Consequently, the subject matter that<br />
Hoganas relinquished is not limited to compositions<br />
containing fibers or elements which *954 function<br />
solely or principally through capillary action.<br />
FN25. It is undisputed that the channels<br />
formed by the accused fibers perform the<br />
additional function of releasing the steam<br />
formed as the water evaporates.<br />
For all the foregoing reasons, the district court did<br />
not err in its judgment of non-infringement under the<br />
doctrine of equivalents.<br />
D.<br />
[9] Our conclusion is fully supported through<br />
consideration of the function/way/result test set forth<br />
in Graver Tank & Mfg. Co. v. Linde Air Prods. Co.,<br />
339 U.S. 605, 608, 70 S.Ct. 854, 856, 94 L.Ed. 1097,<br />
reh'g denied, 340 U.S. 845, 71 S.Ct. 12, 95 L.Ed. 620<br />
(1950). To satisfy this test, Hoganas bore the burden<br />
of showing that each limitation of the claim is met by<br />
a literal or equivalent element in the accused product.<br />
See Corning Glass Works v. Sumitomo Elec. U.S.A.,<br />
Inc., 868 F.2d 1251, 1259, 9 U.S.P.Q.2d 1962, 1967<br />
(Fed.Cir.1989). Thus, it bore the burden of showing<br />
that the solid acetate fibers in the accused product<br />
were the equivalent of the hollow “straw-shaped”<br />
elements of the patented composition. In opposition<br />
to the summary judgment motion, Hoganas had to<br />
show that there was a genuine factual dispute on this<br />
issue requiring resolution at trial. See Anderson v.<br />
Liberty Lobby, Inc., 477 U.S. 242, 254-55, 106 S.Ct.<br />
2505, 2513-14, 91 L.Ed.2d 202 (1986).<br />
We have concluded that Hoganas did not do so.<br />
Although the acetate fibers in the Adtech product and<br />
the claimed channel-forming elements perform the<br />
same overall function-promoting the rapid drying of<br />
refractory linings by reducing the risk of explosionsthe<br />
two do so in a different way.<br />
The claimed channel-forming elements, being<br />
hollow, provide in their natural state channels for the<br />
release of steam, and during the process of drying the<br />
refractory lining, they are at least partly burned away<br />
FN26 to form channels of expanded diameter. The<br />
acetate fibers in the accused product, by contrast,<br />
function in two steps. First, they shrink well below<br />
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the temperature at which water turns to steam, and<br />
thus leave channels which distribute, through<br />
capillary action, the water more evenly throughout<br />
the lining. Second, as the temperature increases and<br />
the liquid turns to steam, the fibers melt and the<br />
channels perform the additional function of releasing<br />
the steam.<br />
FN26. Col. 2, 11. 1-3.<br />
The evidence Hoganas has submitted on this point,<br />
consisting entirely of the Benzel affidavit, is both<br />
incomplete and conclusory. As a matter of law, the<br />
accused fiber does not function in substantially the<br />
same way as the claimed “straw-shaped” element,<br />
and thus is not the equivalent of that element. A<br />
contrary conclusion would be error.<br />
In support of our conclusion, we note that the <strong>Patent</strong><br />
& Trademark Office (PTO) granted to Dresser a<br />
patent (U.S. <strong>Patent</strong> No. 4,430,439) covering the<br />
Adtech product with knowledge of the '953 patent,<br />
which is listed as art of record. FN27 Thus, the PTO<br />
must have considered the accused product to be<br />
nonobvious with respect to the patented composition.<br />
Accordingly, the issuance of that patent is relevant to<br />
the equivalence issue. FN28<br />
FN27. Although that patent is not part of the<br />
record on appeal, it was referred to at the<br />
argument, and is publicly accessible.<br />
Accordingly, we have taken judicial notice<br />
of it. See Fed.R.Evid. 201(b)(2); see also<br />
Standard Havens Prods., Inc. v. Gencor<br />
Indus., Inc., 897 F.2d 511, 514 n. 3, 13<br />
U.S.P.Q.2d 2029, 2031 n. 3 (Fed.Cir.1990)<br />
(appropriate to take judicial notice of PTO<br />
correspondence which is part of the public<br />
record).<br />
FN28. In Atlas Powder Co. v. E.I. Du Pont<br />
De Nemours & Co., 750 F.2d 1569, 1580 n.<br />
3, 224 U.S.P.Q. 409, 417 n. 3<br />
(Fed.Cir.1984), we said that the issuance of<br />
a patent on an accused product or process<br />
was relevant to the equivalence issue if that<br />
patent was issued on the basis of<br />
“unexpected results” over the prior art.<br />
Understanding a finding of “unexpected<br />
results” to be tantamount to a finding of<br />
nonobviousness, we conclude the issuance<br />
of Dresser's patent is relevant to the<br />
equivalence issue in this case.<br />
In further support of our conclusion, we note that<br />
Hoganas' invention is only a modest advance over<br />
Matheny, and thus is not entitled to pioneering status<br />
or the broad range of equivalents which normally<br />
accompanies that status. Moreover, Hoganas is not<br />
entitled to a range of equivalents which would erase<br />
“meaningful structural and functional limitations of<br />
the claim on which the public is entitled to rely in<br />
avoiding infringement.” *955Perkin-Elmer Corp. v.<br />
Westinghouse Elec. Corp., 822 F.2d 1528, 1532, 3<br />
U.S.P.Q.2d 1321, 1324 (Fed.Cir.1987). But that<br />
would be the effect of concluding that the accused<br />
product infringes under the doctrine of equivalents.<br />
As we noted earlier in this opinion, the phrase<br />
“straw-shaped” means that the claimed elements are<br />
hollow, while the accused fiber is solid. A<br />
conclusion that a solid fiber is equivalent to a hollow<br />
“straw-shaped” element would eviscerate the plain<br />
meaning of that phrase. Our conclusion on the<br />
doctrine of equivalents issue is thus fully supported.<br />
III. CONCLUSION<br />
We have considered all the remaining arguments<br />
made by the parties, and find them to be either<br />
unpersuasive or not dispositive. Therefore, we<br />
affirm the judgment of non-infringement by the<br />
district court.<br />
AFFIRMED.<br />
C.A.Fed. (Pa.),1993.<br />
Hoganas AB v. Dresser Industries, Inc.<br />
9 F.3d 948, 28 U.S.P.Q.2d 1936<br />
Briefs and Other Related Documents (Back to top)<br />
• 1993 WL 13013078 (Appellate Brief) Reply Brief<br />
for Plaintiff-Appellant Hoganas AB (Jan. 11, 1993)<br />
Original Image of this Document with Appendix<br />
(PDF)<br />
• 1992 WL 12013759 (Appellate Brief) Brief for<br />
Plaintiff-Appellant Hoganas AB (Nov. 10, 1992)<br />
Original Image of this Document with Appendix<br />
(PDF)<br />
• 1992 WL 12013760 (Appellate Brief) Brief for<br />
Defendant-Appellee Dresser Industries, Inc. (1992)<br />
Original Image of this Document (PDF)<br />
END OF DOCUMENT<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
383 F.3d 1337 Page 1<br />
383 F.3d 1337, 65 Fed. R. Evid. Serv. 365, 72 U.S.P.Q.2d 1560<br />
(Cite as: 383 F.3d 1337)<br />
Briefs and Other Related Documents<br />
United States Court of Appeals,Federal Circuit.<br />
KNORR-BREMSE SYSTEME FUER<br />
NUTZFAHRZEUGE GMBH, Plaintiff-Cross<br />
Appellant,<br />
v.<br />
DANA CORPORATION, Defendant-Appellant,<br />
andHaldex Brake Products Corporation, and Haldex<br />
Brake Products AB, Defendants-Appellants.<br />
Nos. 01-1357, 01-1376, 02-1221, 02-1256.<br />
Sept. 13, 2004.<br />
Background: Owner of patent for air disk brake<br />
sued competitors for infringement. The United States<br />
District Court for the Eastern District of Virginia, T.<br />
S. Ellis, III, J., 133 F.Supp.2d 843, found willful<br />
infringement, but declined to order destruction of<br />
data related to infringing brake. Cross-appeals were<br />
taken.<br />
Holdings: The Court of Appeals, Newman, Circuit<br />
Judge, held that:<br />
(1) adverse inference that legal opinion was or would<br />
have been unfavorable should not be drawn from<br />
patent infringement defendant's invocation of<br />
attorney-client and/or work product privileges or<br />
from such defendant's failure to consult with counsel,<br />
overruling Kloster Speedsteel AB v. Crucible Inc.,<br />
793 F.2d 1565, and Fromson v. Western Litho Plate<br />
& Supply Co., 853 F.2d 1568, and<br />
(2) refusal to order destruction of data was<br />
reasonable.<br />
Vacated and remanded.<br />
Dyk, Circuit Judge, concurred in part, dissented in<br />
part, and filed opinion.<br />
West Headnotes<br />
[1] <strong>Patent</strong>s 291 319(3)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k319 Damages<br />
291k319(3) k. Right to Increase<br />
Damages Awarded. Most Cited Cases<br />
<strong>Patent</strong>s 291 325.11(3)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k325 Costs<br />
291k325.11 Disbursements in General<br />
291k325.11(2) Attorney Fees<br />
291k325.11(3) k. Award to<br />
Plaintiff. Most Cited Cases<br />
Determination of whether patent infringement was<br />
“willful,” for purpose of enhancing damages or<br />
awarding attorney fees, is made on consideration of<br />
totality of circumstances. 35 U.S.C.A. § § 284, 285.<br />
[2] <strong>Patent</strong>s 291 227<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(A) What Constitutes Infringement<br />
291k227 k. Intent or Purpose, and<br />
Knowledge. Most Cited Cases<br />
Adverse inference that legal opinion was or would<br />
have been unfavorable should not be drawn from<br />
patent infringement defendant's invocation of<br />
attorney-client or work product privileges, or from<br />
such defendant's failure to consult with counsel, for<br />
purpose of determining whether infringement was<br />
“willful.” 35 U.S.C.A. § § 284, 285.<br />
[3] <strong>Patent</strong>s 291 325.11(2.1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k325 Costs<br />
291k325.11 Disbursements in General<br />
291k325.11(2) Attorney Fees<br />
291k325.11(2.1) k. In General.<br />
Most Cited Cases<br />
Award of attorney fees in exceptional patent case is<br />
not improperly punitive, even if no actual damages<br />
are awarded. 35 U.S.C.A. § 285.<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
383 F.3d 1337 Page 2<br />
383 F.3d 1337, 65 Fed. R. Evid. Serv. 365, 72 U.S.P.Q.2d 1560<br />
(Cite as: 383 F.3d 1337)<br />
[4] <strong>Patent</strong>s 291 227<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(A) What Constitutes Infringement<br />
291k227 k. Intent or Purpose, and<br />
Knowledge. Most Cited Cases<br />
Existence of substantial defense to patent<br />
infringement is not per se sufficient to defeat liability<br />
for willful infringement. 35 U.S.C.A. § § 284, 285.<br />
[5] <strong>Patent</strong>s 291 324.56<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k324 Appeal<br />
291k324.56 k. Harmless Error. Most<br />
Cited Cases<br />
District court's refusal to require destruction of<br />
technical data that were obtained by patent<br />
infringement defendants for infringing device was<br />
not reversible error; parts of data were obtained<br />
before issuance of patent, and some data related to<br />
non-infringing aspects including design-around<br />
efforts and safety studies.<br />
<strong>Patent</strong>s 291 328(2)<br />
291 <strong>Patent</strong>s<br />
291XIII Decisions on the Validity, Construction,<br />
and Infringement of Particular <strong>Patent</strong>s<br />
291k328 <strong>Patent</strong>s Enumerated<br />
291k328(2) k. Original Utility. Most Cited<br />
Cases<br />
5,927,445. Cited.<br />
*1338 Jeffrey D. Sanok, Crowell & Moring L.L.P.,<br />
of Washington, DC, argued for plaintiff-cross<br />
appellant. With him on the brief were Michael I.<br />
Coe, Herbert I. Cantor and Karen Canaan. Of<br />
counsel were John C. Lenahan, Edward R. Murray<br />
and Clifton Elgarten.<br />
Ellen A. Efros, Rader, Fishman & Grauer, PLLC, of<br />
Washington, DC, for defendant-appellant Dana<br />
Corporation, joined in the brief of Haldex Brake<br />
Products AB, et al.<br />
Stanley H. Lieberstein, St. Onge Steward Johnston &<br />
Reens, LLC, of Stamford, CT, argued for defendantsappellants<br />
Haldex Brake Products AB and Haldex<br />
Brake Products Corporation; and defendantappellant<br />
Dana Corporation. With him on the brief<br />
for Haldex were Wesley W. Whitmyer, Jr. and<br />
Richard J. Basile. Of counsel were James P. Jeffry,<br />
Michael G. Gabriel, and David W. Aldrich.<br />
*1339 Ralph P. Albrecht, Venable LLP, of<br />
Washington, DC, for amicus curiae Bar Association<br />
of the District of Columbia-<strong>Patent</strong>, Trademark &<br />
Copyright Section. With him on the brief was Lynn<br />
E. Eccleston, The Eccleston Law Firm, of<br />
Washington, DC.<br />
Norman L. Balmer, Washington & Lee University<br />
School of Law, of Lexington, VA, for amicus curiae<br />
Lexington <strong>Patent</strong> Policy Group.<br />
Nicholas M. Cannella, Fitzpatrick, Cella, Harper &<br />
Scinto, of New York, NY, for amicus curiae New<br />
York Intellectual Property Law Association. With<br />
him on the brief was F. Christopher Mizzo. Of<br />
counsel on the brief was Melvin C. Garner, Darby &<br />
Darby P.C., of New York, NY.<br />
Donald S. Chisum, Morrison & Foerster LLP, of Palo<br />
Alto, California, for amici curiae BEA Systems, Inc.<br />
and Novell, Inc. With him on the brief was Emily A.<br />
Evans. Of counsel were Michael A. Jacobs and<br />
Alison M. Tucher, of San Francisco, CA.<br />
Donald R. Dunner, Finnegan, Henderson, Farabow,<br />
Garrett & Dunner, L.L.P., of Washington, DC, for<br />
amicus curiae American Intellectual Property Law<br />
Association. With him on the brief was Jeffrey I.D.<br />
Lewis, Patterson, Belknap, Webb & Tyler, LLP, of<br />
New York, NY. Also on the brief was David G.<br />
Conlin, Edwards & Angell, LLP, of Boston, MA.<br />
George E. Hutchinson, Executive Director, Federal<br />
Circuit Bar Association, of Washington, DC, for<br />
amicus curiae Federal Circuit Bar Association. With<br />
him on the brief was Robert L. Baechtold,<br />
Fitzpatrick, Cella, Harper & Scinto, of New York,<br />
NY.<br />
Jerold A. Jacover, Brinks Hofer Gilson & Lione, of<br />
Chicago, IL, for amicus curiae The City of Chicago.<br />
With him on the brief were Roy E. Hofer, Thomas J.<br />
Filarski, Meredith Martin Addy and Janet A. Pioli.<br />
Kelly L. Morron, Chadbourne & Parke LLP, of New<br />
York, NY, for amicus curiae The Association of the<br />
Bar of the City of New York. With him on the brief<br />
was Peter A. Sullivan, Hughes Hubbard & Reed LLP,<br />
of New York, NY.<br />
Steven L. Friedman, Dilworth Paxson LLP, of<br />
Philadelphia, PA, for amicus curiae Securities<br />
Industry Association.<br />
Ronald E. Myrick, Chair, Amicus Brief Committee,<br />
Intellectual Property Owners Association, of<br />
Washington, DC, for amicus curiae Intellectual<br />
Property Owners Association. With him on the brief<br />
were <strong>Paul</strong> H. Berghoff and Joshua R. Rich,<br />
McDonnell Boehnen Hulbert & Berghoff, of<br />
Chicago, IL. Of counsel was Herbert C. Wamsley,<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
383 F.3d 1337 Page 3<br />
383 F.3d 1337, 65 Fed. R. Evid. Serv. 365, 72 U.S.P.Q.2d 1560<br />
(Cite as: 383 F.3d 1337)<br />
Intellectual Property Owners Association, of<br />
Washington, DC.<br />
Frank E. Scherkenbach, Fish & Richardson P.C., of<br />
Boston, MA, for amicus curiae Microsoft<br />
Corporation. With him on the brief were John A.<br />
Dragseth, of Minneapolis, MN; and Jennifer K.<br />
Bush, of San Diego, CA.<br />
Steven C. Sereboff, SoCal IP Law Group, of<br />
Westlake Village, CA, for amicus curiae Conejo<br />
Valley Bar Association. With him on the brief was<br />
Karol M. Pessin.<br />
Edward R. Reines, Weil, Gotshal & Manges LLP, of<br />
Redwood Shores, CA, for amici curiae United States<br />
Council for International Business, et al. With him<br />
on the brief were Matthew D. Powers and Steven C.<br />
Carlson.<br />
Elizabeth H. Rader, Center for Internet & Society,<br />
Stanford Law School, of Stanford, CA, for amicus<br />
curiae Public <strong>Patent</strong> Foundation. With her on the<br />
brief was Daniel B. Ravicher, Executive Director,<br />
Public <strong>Patent</strong> Foundation, of New York, NY.<br />
*1340 Philip T. Petti, Fitch, Even, Tabin & Flannery,<br />
of Chicago, IL, for amicus curiae The Association of<br />
<strong>Patent</strong> Law Firms. With him on the brief was G.<br />
<strong>Paul</strong> Edgell.<br />
Mitchell G. Stockwell, Kilpatrick Stockton LLP, of<br />
Atlanta, GA, for amicus curiae Association of<br />
Corporate Counsel. With him on the brief was<br />
Cynthia B. Rothschild, of Winston-Salem, NC.<br />
Joshua D. Sarnoff, Glushko-Samuelson Intellectual<br />
Property Law Clinic, Washington College of Law,<br />
American University, of Washington, DC, for amicus<br />
curiae Public Knowledge.<br />
Brian P. Barrett, Eli Lilly and Company, of<br />
Indianapolis, IN, for amicus curiae Biotechnology<br />
Industry Organization. With him on the brief was<br />
Thomas S. Borecki, Baxter Healthcare Corporation,<br />
of Deerfield, IL.<br />
Joel W. Nomkin, Brown & Bain, P.A., of Phoenix,<br />
AZ, for amicus curiae Semiconductor Industry<br />
Association.<br />
William A. Rakoczy, Lord, Bissell & Brook LLP, of<br />
Chicago, IL, for amicus curiae Generic<br />
Pharmaceutical Association. With him on the brief<br />
was Hugh S. Balsam.<br />
L.J. Chris Martiniak, Heller Ehrman White &<br />
McAuliffe LLP, of San Francisco, CA, for amici<br />
curiae Computer Associates International, Inc., et al.<br />
Dennis W. Archer, President, American Bar<br />
Association, of Chicago, IL, for amicus curiae<br />
American Bar Association. With him on the brief<br />
were Richard P. Beem and Joseph N Welch II.<br />
L. Gene Spears, Baker Botts, L.L.P., of Houston, TX,<br />
for amicus curiae Houston Intellectual Property Law<br />
Association.<br />
John E. Peterson, <strong>Paul</strong>, Hastings, Janofsky & Walker,<br />
LLP, of San Diego, CA, for amicus curiae San Diego<br />
Intellectual Property Law Association. With him on<br />
the brief were Douglas E. Olson and Howard N.<br />
Wisnia.<br />
Before MAYER, Chief Judge, NEWMAN, LOURIE,<br />
CLEVENGER, RADER, SCHALL, BRYSON,<br />
GAJARSA, LINN, DYK, and PROST, Circuit<br />
Judges. FN* FN* MICHEL, Circuit Judge, took no part<br />
in the consideration or decision of this case.<br />
NEWMAN, Circuit Judge.<br />
Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH is<br />
the owner of United States <strong>Patent</strong> No. 5,927,445 (the<br />
445 patent) entitled “Disk Brake For Vehicles Having<br />
Insertable Actuator,” is sued on July 27, 1999. At<br />
trial to the United States District Court for the<br />
Eastern District of Virginia, the appellants Dana<br />
Corporation, Haldex Brake Products Corporation,<br />
and Haldex Brake Products AB were found liable for<br />
infringement and willful infringement. FN1 No<br />
damages were awarded, for there were no sales of the<br />
infringing brakes. Based on the finding of willful<br />
infringement the court awarded partial attorney fees<br />
under 35 U.S.C. § 285.<br />
FN1. Knorr-Bremse Systeme Fuer<br />
Nutzfahrzeuge GmbH v. Dana Corp., 133<br />
F.Supp.2d 833 (E.D.Va.2001) (partial<br />
summary judgment) (“Knorr-Bremse I ”);<br />
133 F.Supp.2d 843 (E.D.Va.2001) (findings<br />
of fact and conclusions of law) (“Knorr-<br />
Bremse II ”); Civ. A. No. 00-803-A<br />
(E.D.Va. Mar. 7, 2001) (final judgment);<br />
No. 00-803-A (E.D.Va. Apr. 9, 2001)<br />
(amended final judgment) (“Knorr-Bremse<br />
III ”).<br />
The appellants seek reversal of the finding of willful<br />
infringement, arguing that an adverse inference<br />
should not have been drawn from the withholding by<br />
Haldex of an opinion of counsel concerning the<br />
patent issues, and from the failure of Dana to obtain<br />
its own opinion of counsel. Applying*1341 our<br />
precedent, the district court inferred that the opinion<br />
of counsel withheld by Haldex was unfavorable to<br />
the defendants. After argument of the appeal we<br />
took this case en banc in order to reconsider our<br />
precedent with respect to these aspects. The parties<br />
were asked to submit additional briefing on four<br />
questions, and amicus curiae briefs were invited. FN2<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
383 F.3d 1337 Page 4<br />
383 F.3d 1337, 65 Fed. R. Evid. Serv. 365, 72 U.S.P.Q.2d 1560<br />
(Cite as: 383 F.3d 1337)<br />
Knorr-Bremse, 344 F.3d 1336 (Fed.Cir.2003) (En<br />
banc Order).<br />
FN2. Amicus curiae briefs were filed by the<br />
American Bar Association; American<br />
Intellectual Property Law Association;<br />
Association of the Bar of the City of New<br />
York; Association of Corporate Counsel;<br />
Association of <strong>Patent</strong> Law Firms; Bar<br />
Association of the District of Columbia;<br />
BEA Systems, Inc. and Novell, Inc.;<br />
Biotechnology Industry Organization; The<br />
City of Chicago; Computer Associates<br />
International, Inc. et al.; Conejo Valley Bar<br />
Association; Federal Circuit Bar<br />
Association; Generic Pharmaceutical<br />
Association; Houston Intellectual Property<br />
Law Association; Intellectual Property<br />
Owners Association; Lexington <strong>Patent</strong><br />
Policy Group; Microsoft Corporation; New<br />
York Intellectual Property Law Association;<br />
Public Knowledge; Public <strong>Patent</strong><br />
Foundation; San Diego Intellectual Property<br />
Law Association; Securities Industry<br />
Association; Semiconductor Industry<br />
Association; and the United States Council<br />
for International Business, Center for<br />
Advanced Study & Research on Intellectual<br />
Property et al.<br />
We now hold that no adverse inference that an<br />
opinion of counsel was or would have been<br />
unfavorable flows from an alleged infringer's failure<br />
to obtain or produce an exculpatory opinion of<br />
counsel. Precedent to the contrary is overruled. We<br />
therefore vacate the judgment of willful infringement<br />
and remand for re-determination, on consideration of<br />
the totality of the circumstances but without the<br />
evidentiary contribution or presumptive weight of an<br />
adverse inference that any opinion of counsel was or<br />
would have been unfavorable.<br />
BACKGROUND<br />
Knorr-Bremse, a German corporation, manufactures<br />
air disk brakes for use in heavy commercial vehicles,<br />
primarily Class 6-8 trucks known as eighteen<br />
wheelers, semis, or tractor-trailers. Knorr-Bremse<br />
states that air disk brake technology is superior to the<br />
previously dominant technology of hydraulically or<br />
pneumatically actuated drum brakes, and that air disk<br />
brakes have widely supplanted drum brakes for<br />
trucks in the European market.<br />
Dana, an American corporation, and the Swedish<br />
company Haldex Brake Products AB and its United<br />
States affiliate, agreed to collaborate to sell in the<br />
United States an air disk brake manufactured by<br />
Haldex in Sweden. The appellants imported into the<br />
United States about 100 units of a Haldex brake<br />
designated the Mark II model. Between 1997 and<br />
1999 the Mark II brake was installed in<br />
approximately eighteen trucks of Dana and various<br />
potential customers. The trucks were used in<br />
transport, and brake performance records were<br />
required to be kept and provided to Dana. Dana and<br />
Haldex advertised these brakes at trade shows and in<br />
industry media in the United States.<br />
Knorr-Bremse in December 1998 orally notified<br />
Dana of patent disputes with Haldex in Europe<br />
involving the Mark II brake, and told the appellants<br />
that patent applications were pending in the United<br />
States. On August 31, 1999 Knorr-Bremse notified<br />
Dana in writing of infringement litigation against<br />
Haldex in Europe, and that Knorr-Bremse's United<br />
States 445 patent had issued on July 27, 1999.<br />
Knorr-Bremse filed this infringement suit on May 15,<br />
2000. In September 2000 Haldex presented to the<br />
district court a modified brake design designated the<br />
Mark III, and moved for a summary declaration of<br />
non-infringement by the Mark *1342 III brake.<br />
Knorr-Bremse in turn moved for summary judgment<br />
of literal infringement by the Mark II brake, and<br />
infringement by the Mark III either literally or under<br />
the doctrine of equivalents. After a hearing in<br />
November 2000 the district court granted Knorr-<br />
Bremse's motion for summary judgment of literal<br />
infringement by the Mark II brake, and set for trial<br />
the issues with respect to the Mark III. Before and<br />
after the judgment of infringement by the Mark II,<br />
Dana and others continued to operate trucks in the<br />
United States containing the Mark II brake.<br />
Following a bench trial in January 2001, the district<br />
court found literal infringement by the Mark III<br />
brake.<br />
On the issue of willful infringement, Haldex told the<br />
court that it had consulted European and United<br />
States counsel concerning Knorr-Bremse's patents,<br />
but declined to produce any legal opinion or to<br />
disclose the advice received, asserting the attorneyclient<br />
privilege. Dana stated that it did not itself<br />
consult counsel, but relied on Haldex. Applying<br />
Federal Circuit precedent, the district court found:<br />
“It is reasonable to conclude that such opinions were<br />
unfavorable.” The court discussed the evidence for<br />
and against willful infringement and concluded that<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
383 F.3d 1337 Page 5<br />
383 F.3d 1337, 65 Fed. R. Evid. Serv. 365, 72 U.S.P.Q.2d 1560<br />
(Cite as: 383 F.3d 1337)<br />
“the totality of the circumstances compels the<br />
conclusion that defendants' use of the Mark II air disk<br />
brake, and indeed Dana's continued use of the Mark<br />
II air disk brake on various of its vehicles [after the<br />
judgment of infringement] amounts to willful<br />
infringement of the 445 patent.” Knorr-Bremse II,<br />
133 F.Supp.2d at 863. Based on the finding of<br />
willful infringement the court found that the case was<br />
“exceptional” under 35 U.S.C. § 285, and awarded<br />
Knorr-Bremse its attorney fees for the portion of the<br />
litigation that related to the Mark II brake, but not the<br />
Mark III.<br />
The appellants appeal only the issue of willfulness of<br />
the infringement and the ensuing award of attorney<br />
fees. Knorr-Bremse cross-appeals, seeking to enjoin<br />
the appellants from retaining and using the brake<br />
performance records and test data obtained through<br />
use of the Mark II brake.<br />
I<br />
WILLFUL INFRINGEMENT<br />
In discussing “willful” behavior and its<br />
consequences, the Supreme Court has observed that<br />
“[t]he word ‘willful’ is widely used in the law, and,<br />
although it has not by any means been given a<br />
perfectly consistent interpretation, it is generally<br />
understood to refer to conduct that is not merely<br />
negligent,” McLaughlin v. Richland Shoe Co., 486<br />
U.S. 128, 133, 108 S.Ct. 1677, 100 L.Ed.2d 115<br />
(1988), the Court citing conventional definitions such<br />
as “voluntary,” “deliberate,” and “intentional.” Id.<br />
The concept of “willful infringement” is not simply a<br />
conduit for enhancement of damages; it is a<br />
statement that patent infringement, like other civil<br />
wrongs, is disfavored, and intentional disregard of<br />
legal rights warrants deterrence. Remedy for willful<br />
infringement is founded on 35 U.S.C. § 284 (“the<br />
court may increase the damages up to three times the<br />
amount found or assessed”) and 35 U.S.C. § 285<br />
(“the court in exceptional cases may award<br />
reasonable attorney fees to the prevailing party”).<br />
See generally Aro Mfg. Co. v. Convertible Top<br />
Replacement Co., 377 U.S. 476, 508, 84 S.Ct. 1526,<br />
12 L.Ed.2d 457 (1964) (the patentee “could in a case<br />
of willful or bad-faith infringement recover punitive<br />
or ‘increased’ damages under the statute's trebling<br />
provision”).<br />
[1] Determination of willfulness is made on<br />
consideration of the totality of the circumstances, see<br />
*1343Gustafson, Inc. v. Intersystems Indus. Prods.,<br />
Inc., 897 F.2d 508, 510 (Fed.Cir.1990), and may<br />
include contributions of several factors, as compiled,<br />
e.g., in Rolls-Royce Ltd. v. GTE Valeron Corp., 800<br />
F.2d 1101, 1110 (Fed.Cir.1986) and Read Corp. v.<br />
Portec, Inc., 970 F.2d 816, 826-27 (Fed.Cir.1992).<br />
These contributions are evaluated and weighed by the<br />
trier of fact, for, as this court remarked in Rite-Hite<br />
Corp. v. Kelley Co., 819 F.2d 1120, 1125-26<br />
(Fed.Cir.1987), “ ‘[w]illfulness' in infringement, as in<br />
life, is not an all-or-nothing trait, but one of degree.<br />
It recognizes that infringement may range from<br />
unknowing, or accidental, to deliberate, or reckless,<br />
disregard of a patentee's legal rights.”<br />
Fundamental to determination of willful infringement<br />
is the duty to act in accordance with law.<br />
Reinforcement of this duty was a foundation of the<br />
formation of the Federal Circuit court, at a time when<br />
widespread disregard of patent rights was<br />
undermining the national innovation incentive. See<br />
Advisory Committee On Industrial Innovation Final<br />
Report, Dep't of Commerce (Sep.1979). Thus in<br />
Underwater Devices, Inc. v. Morrison-Knudsen Co.,<br />
717 F.2d 1380 (Fed.Cir.1983) the court stressed the<br />
legal obligation to respect valid patent rights. The<br />
court's opinion quoted the infringer's attorney who,<br />
without obtaining review by patent counsel of the<br />
patents at issue, advised the client to “continue to<br />
refuse to even discuss the payment of a royalty.” Id.<br />
at 1385. The attorney advised that “[c]ourts, in<br />
recent years, have-in patent infringement cases-found<br />
the patents claimed to be infringed upon invalid in<br />
approximately 80% of the cases,” and that for this<br />
reason the patentee would probably not risk filing<br />
suit. Id. On this record of flagrant disregard of<br />
presumptively valid patents without analysis, the<br />
Federal Circuit ruled that “where, as here, a potential<br />
infringer has actual notice of another's patent rights,<br />
he has an affirmative duty to exercise due care to<br />
determine whether or not he is infringing,” including<br />
“the duty to seek and obtain competent legal advice<br />
from counsel before the initiation of any possible<br />
infringing activity.” Id. at 1389-90.<br />
Underwater Devices did not raise any issue of<br />
attorney-client privilege, while applying precedent<br />
that a finding of willfulness requires the factfinder to<br />
find by clear and convincing evidence “that the<br />
infringer acted in disregard of the patent,” citing<br />
Stickle v. Heublein, Inc., 716 F.2d 1550, 1565<br />
(Fed.Cir.1983). The aspect of privilege arose in<br />
Kloster Speedsteel AB v. Crucible Inc., 793 F.2d<br />
1565 (Fed.Cir.1986), where the Federal Circuit<br />
observed that the infringer “has not even asserted that<br />
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it sought advice of counsel when notified of the<br />
allowed claims and [the patentee's] warning, or at any<br />
time before it began this litigation,” and held that the<br />
infringer's “silence on the subject, in alleged reliance<br />
on the attorney-client privilege, would warrant the<br />
conclusion that it either obtained no advice of<br />
counsel or did so and was advised that its importation<br />
and sale of the accused products would be an<br />
infringement of valid U.S. patents.” Id. at 1580.<br />
Thus arose the adverse inference, reinforced in<br />
Fromson v. Western Litho Plate & Supply Co., 853<br />
F.2d 1568 (Fed.Cir.1988), and establishing the<br />
general rule that “a court must be free to infer that<br />
either no opinion was obtained or, if an opinion were<br />
obtained, it was contrary to the infringer's desire to<br />
initiate or continue its use of the patentee's<br />
invention.” Id. at 1572-73. Throughout this<br />
evolution the focus was not on attorney-client<br />
relationships, but on disrespect for law. However,<br />
implementation of this precedent has resulted in<br />
inappropriate burdens on the attorney-client<br />
relationship.<br />
We took this case en banc to review this precedent.<br />
While judicial departure from *1344 stare decisis<br />
always requires “special justification,” Arizona v.<br />
Rumsey, 467 U.S. 203, 212, 104 S.Ct. 2305, 81<br />
L.Ed.2d 164 (1984), the “conceptual underpinnings”<br />
of this precedent, see id., have significantly<br />
diminished in force. The adverse inference that an<br />
opinion was or would have been unfavorable,<br />
flowing from the infringer's failure to obtain or<br />
produce an exculpatory opinion of counsel, is no<br />
longer warranted. Precedent authorizing such<br />
inference is overruled.<br />
We answer the four questions presented for en banc<br />
review, as follows:<br />
QUESTION 1<br />
When the attorney-client privilege and/or workproduct<br />
privilege is invoked by a defendant in an<br />
infringement suit, is it appropriate for the trier of fact<br />
to draw an adverse inference with respect to willful<br />
infringement<br />
[2] The answer is “no.” Although the duty to respect<br />
the law is undiminished, no adverse inference shall<br />
arise from invocation of the attorney-client and/or<br />
work product privilege.<br />
The Supreme Court describes the attorney-client<br />
privilege as “the oldest of the privileges for<br />
confidential communications known to common<br />
law,” and has stressed the public purpose<br />
to encourage full and frank communication between<br />
attorneys and their clients and thereby promote<br />
broader public interests in the observance of law and<br />
administration of justice. The privilege recognizes<br />
that sound legal advice or advocacy serves public<br />
ends and that such advice or advocacy depends upon<br />
the lawyer's being fully informed by the client.<br />
Upjohn Co. v. United States, 449 U.S. 383, 389, 101<br />
S.Ct. 677, 66 L.Ed.2d 584 (1981). Professor<br />
Wigmore has elaborated:The lawyer must have the<br />
whole of his client's case, or he cannot pretend to<br />
give any useful advice.... That the whole will not be<br />
told to counsel unless the privilege is confidential, is<br />
perfectly clear. A man who seeks advice, seeks it<br />
because he believes that he may do so safely; he will<br />
rarely make disclosure which may be used against<br />
him; rather than create an adverse witness in his<br />
lawyer, he will refuse all private arbitration, and take<br />
the chance of a trial.<br />
8 J. Wigmore, Evidence in Trials at Common Law §<br />
2291 at 548 (McNaughton rev.1961). See Hunt v.<br />
Blackburn, 128 U.S. 464, 470, 9 S.Ct. 125, 32 L.Ed.<br />
488 (1888) (the attorney-client privilege is designed<br />
to encourage candid exchange of information).<br />
Although this court has never suggested that opinions<br />
of counsel concerning patents are not privileged, the<br />
inference that withheld opinions are adverse to the<br />
client's actions can distort the attorney-client<br />
relationship, in derogation of the foundations of that<br />
relationship. We conclude that a special rule<br />
affecting attorney-client relationships in patent cases<br />
is not warranted. See Swidler & Berlin v. United<br />
States, 524 U.S. 399, 410, 118 S.Ct. 2081, 141<br />
L.Ed.2d 379 (1998) (ad hoc exceptions to privilege<br />
may cause “general erosion”). There should be no<br />
risk of liability in disclosures to and from counsel in<br />
patent matters; such risk can intrude upon full<br />
communication and ultimately the public interest in<br />
encouraging open and confident relationships<br />
between client and attorney. As Professor<br />
McCormick has explained, the attorney-client<br />
privilege protects “interests and relationships which<br />
... are regarded as of sufficient social importance to<br />
justify some sacrifice of availability of evidence<br />
relevant to the administration of justice.” 1<br />
McCormick on Evidence § 72, 299 (5th ed.1999).<br />
*1345 There is precedent for the drawing of adverse<br />
inferences in circumstances other than those<br />
involving attorney-client relationships; for example<br />
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when a party's refusal to testify or produce evidence<br />
in civil suits creates a presumption of an intent to<br />
withhold damaging information that is material to the<br />
litigation. FN3 However, the courts have declined to<br />
impose adverse inferences on invocation of the<br />
attorney-client privilege. See, e.g., Nabisco, Inc. v.<br />
PF Brands, Inc., 191 F.3d 208, 225-26 (2nd<br />
Cir.1999) (no adverse inference from the defendant's<br />
refusal to produce an opinion letter of counsel in a<br />
trademark dilution case), overruled on other grounds<br />
sub nom. Moseley v. Secret Catalogue, 537 U.S. 418,<br />
123 S.Ct. 1115, 155 L.Ed.2d 1 (2003); Parker v.<br />
Prudential Insurance Co., 900 F.2d 772, 775 (4th<br />
Cir.1990) (no negative inference from assertion of<br />
attorney-client privilege). We now hold that this<br />
rule applies to the same extent in patent cases as in<br />
other areas of law. A defendant may of course<br />
choose to waive the privilege and produce the advice<br />
of counsel. However, the assertion of attorney-client<br />
and/or work-product privilege and the withholding of<br />
the advice of counsel shall no longer entail an<br />
adverse inference as to the nature of the advice.<br />
FN3. For example, in Baxter v. Palmigiano,<br />
425 U.S. 308, 318, 96 S.Ct. 1551, 47<br />
L.Ed.2d 810 (1976) the Court confirmed that<br />
in civil proceedings fact finders may draw<br />
adverse inferences against a party who<br />
refuses to testify. See also, e.g.,<br />
International Chemical Workers Union v.<br />
Columbian Chemicals Co., 331 F.3d 491,<br />
497 (5th Cir.2003) (“when a subpoena is<br />
ignored, a party can draw an adverse<br />
inference”); Penalty Kick Management, Ltd.<br />
v. Coca Cola Co., 318 F.3d 1284, 1294<br />
(11th Cir.2003) (adverse inference drawn<br />
from a party's failure to preserve evidence<br />
when predicated on bad faith);<br />
MacNaughton v. United States, 888 F.2d<br />
418, 423 (6th Cir.1989) (permitting adverse<br />
inference from failure to call witnesses<br />
peculiarly within the party's power to<br />
produce).<br />
QUESTION 2<br />
When the defendant had not obtained legal advice, is<br />
it appropriate to draw an adverse inference with<br />
respect to willful infringement<br />
The answer, again, is “no.” The issue here is not of<br />
privilege, but whether there is a legal duty upon a<br />
potential infringer to consult with counsel, such that<br />
failure to do so will provide an inference or<br />
evidentiary presumption that such opinion would<br />
have been negative.<br />
Dana Corporation did not seek independent legal<br />
advice, upon notice by Knorr-Bremse of the<br />
pendency of the 445 application in the United States<br />
and of the issuance of the 445 patent, followed by<br />
the charge of infringement. In tandem with our<br />
holding that it is inappropriate to draw an adverse<br />
inference that undisclosed legal advice for which<br />
attorney-client privilege is claimed was unfavorable,<br />
we also hold that it is inappropriate to draw a similar<br />
adverse inference from failure to consult counsel.<br />
The amici curiae describe the burdens and costs of<br />
the requirement, as pressed in litigation, for early and<br />
full study by counsel of every potentially adverse<br />
patent of which the defendant had knowledge, citing<br />
cases such as Johns Hopkins Univ. v. Cellpro, Inc.,<br />
152 F.3d 1342, 1364 (Fed.Cir.1998), wherein the<br />
court held that to avoid liability for willful<br />
infringement in that case, an exculpatory opinion of<br />
counsel must fully address all potential infringement<br />
and validity issues. Although other cases have<br />
imposed less rigorous criteria, the issue has<br />
occasioned extensive satellite litigation, distorting the<br />
“conceptual underpinnings” of Underwater Devices<br />
and Kloster Speedsteel. Although there continues to<br />
be “an affirmative duty of due care to avoid<br />
infringement of the known patent rights of others,”<br />
*1346L.A. Gear Inc. v. Thom McAn Shoe Co., 988<br />
F.2d 1117, 1127 (Fed.Cir.1993), the failure to obtain<br />
an exculpatory opinion of counsel shall no longer<br />
provide an adverse inference or evidentiary<br />
presumption that such an opinion would have been<br />
unfavorable.<br />
QUESTION 3<br />
If the court concludes that the law should be changed,<br />
and the adverse inference withdrawn as applied to<br />
this case, what are the consequences for this case<br />
A<br />
The district court based its willfulness determination<br />
on several factors in addition to the adverse inference<br />
arising from the assertion of attorney-client privilege<br />
by Haldex and the failure of Dana to obtain legal<br />
advice. This court has explained that “there are no<br />
hard and fast per se rules” with respect to willfulness<br />
of infringement. Rolls-Royce, 800 F.2d at 1110.<br />
Precedent illustrates various factors, some weighing<br />
on the side of culpability and some that are mitigating<br />
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or ameliorating. See Read v. Portec, supra.<br />
The district court found, on the evidence presented,<br />
that literal infringement by the Mark II brake was<br />
reasonably clear and did not present close legal or<br />
factual questions. As for the validity of the 445<br />
patent, the court found that “given the quantity and<br />
quality of the evidence presented by defendants at<br />
trial on the issues of obviousness and indefiniteness,<br />
it cannot fairly be said that defendants, throughout<br />
the litigation, had a good faith belief that the 445<br />
patent would ultimately be found invalid on these<br />
grounds.” Knorr-Bremse II, 133 F.Supp.2d at 863.<br />
The court also found that the appellants failed to take<br />
prompt remedial action to terminate infringement<br />
after the judgment of literal infringement by the Mark<br />
II, stating that “Dana deliberately yielded to market<br />
pressures in deciding to continue using the infringing<br />
Mark II air disk brakes on test vehicles pending<br />
future receipt of replacement Mark III air disk<br />
brakes.” Id. The court also found that “although<br />
Haldex indeed developed the Mark III air disk brake<br />
in a good faith effort to design around the 445<br />
patent, Haldex nonetheless continued to use the Mark<br />
II air disk brake throughout the redesign effort,<br />
including displaying Mark II air disk brakes at<br />
various automotive conferences in the United States<br />
and distributing Mark II promotional literature to<br />
potential customers at these conferences,” id.; the<br />
court also noted that infringement was not then<br />
enjoined. Knorr-Bremse III, at 2.<br />
The district court also considered Haldex's invocation<br />
of the attorney-client privilege in order to withhold<br />
its opinions of counsel, and Dana's failure to obtain<br />
an independent legal opinion despite the warning and<br />
notice of infringement. The appellants argue that but<br />
for the adverse inference of unfavorable opinions<br />
drawn from these actions, the finding of willfulness<br />
of infringement is not supported. Knorr-Bremse<br />
responds that willful infringement is well supported<br />
by the remaining findings. Because elimination of<br />
the adverse inference as drawn by the district court is<br />
a material change in the totality of the circumstances,<br />
a fresh weighing of the evidence is required to<br />
determine whether the defendants committed willful<br />
infringement. This determination is the primary<br />
responsibility and authority of the district court. We<br />
therefore vacate the finding of willful infringement<br />
and remand for redetermination of the issue.<br />
Several amici curiae raised the question of whether<br />
the trier of fact, particularly a jury, can or should be<br />
told whether or not counsel was consulted (albeit<br />
without any *1347 inference as to the nature of the<br />
advice received) as part of the totality of the<br />
circumstances relevant to the question of willful<br />
infringement. The amici pointed to various<br />
hypothetical circumstances in which such<br />
information could be relevant, even when there was<br />
no issue of attorney-client privilege. That aspect is<br />
not raised by this case, was not before the district<br />
court, and has not been briefed on this appeal.<br />
Today we resolve only the question of whether<br />
adverse inferences of unfavorable opinions can be<br />
drawn, and hold that they can not.<br />
B<br />
[3] The appellants also argue that the award of<br />
attorney fees is a matter of punitive damages, and is<br />
therefore improper. Precedent and statute do not<br />
support this position. 35 U.S.C. § 285 provides that<br />
“the court in exceptional cases may award reasonable<br />
attorney fees to the prevailing party”; and the court<br />
has confirmed that a finding of willful infringement<br />
may qualify a case as exceptional under § 285. See,<br />
e.g., Modine Mfg. Co. v. The Allen Group, Inc., 917<br />
F.2d 538, 543 (Fed.Cir.1990). That there were not<br />
actual damages does not render the award of attorney<br />
fees punitive. Attorney fees are compensatory, and<br />
may provide a fair remedy in appropriate cases.<br />
Upon a finding of willful infringement, the award of<br />
attorney fees is within the district court's sound<br />
discretion.<br />
In view of our vacatur of the finding of willful<br />
infringement, the award of attorney fees is also<br />
vacated. On remand the award may be reconsidered,<br />
should the judgment of willful infringement be<br />
restored.<br />
QUESTION 4<br />
Should the existence of a substantial defense to<br />
infringement be sufficient to defeat liability for<br />
willful infringement even if no legal advice has been<br />
secured<br />
[4] The answer is “no.” Precedent includes this<br />
factor with others to be considered among the totality<br />
of circumstances, stressing the “theme of whether a<br />
prudent person would have sound reason to believe<br />
that the patent was not infringed or was invalid or<br />
unenforceable, and would be so held if litigated,” SRI<br />
Int'l, Inc. v. Advanced Tech. Labs. Inc., 127 F.3d<br />
1462, 1465 (Fed.Cir.1997). However, precedent<br />
also authorizes the trier of fact to accord each factor<br />
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the weight warranted by its strength in the particular<br />
case. We deem this approach preferable to<br />
abstracting any factor for per se treatment, for this<br />
greater flexibility enables the trier of fact to fit the<br />
decision to all of the circumstances. We thus decline<br />
to adopt a per se rule.<br />
II<br />
THE CROSS APPEAL<br />
[5] The district court rejected Knorr-Bremse's request<br />
for destruction of the technical data that were<br />
obtained by the appellants for the Haldex air disk<br />
brakes. The court found that much of the data were<br />
obtained before issuance of the patent, and that some<br />
of the data relate to non-infringing aspects including<br />
design-around efforts and safety studies. Knorr-<br />
Bremse III, at 2. We do not discern reversible error in<br />
the court's decision of this issue. That decision is<br />
affirmed.<br />
SUMMARY<br />
An adverse inference that a legal opinion was or<br />
would have been unfavorable shall not be drawn<br />
from invocation of the attorney-client and/or work<br />
product privileges or from failure to consult with<br />
counsel. Contrary holdings and suggestions of<br />
precedent are overruled.<br />
*1348 This case is remanded for redetermination of<br />
the issue of willful infringement and any remedy<br />
therefor.<br />
Costs<br />
Each party shall bear its costs.<br />
VACATED AND REMANDED; CROSS-APPEAL<br />
AFFIRMED<br />
DYK, Circuit Judge, concurring-in-part and<br />
dissenting-in-part.<br />
I join the majority opinion insofar as it eliminates an<br />
adverse inference (that an opinion of counsel would<br />
be unfavorable) from the infringer's failure to<br />
disclose or obtain an opinion of counsel. I do not<br />
join the majority opinion to the extent that it may be<br />
read as reaffirming that “where, as here, a potential<br />
infringer has actual notice of another's patent rights,<br />
he has an affirmative duty to exercise due care to<br />
determine whether or not he is infringing.” Maj.<br />
Op., ante, at 1343 (quoting Underwater Devices, Inc.<br />
v. Morrison-Knudsen Co., 717 F.2d 1380, 1389<br />
(Fed.Cir.1983)).<br />
There is a substantial question as to whether the due<br />
care requirement is consistent with the Supreme<br />
Court cases holding that punitive damages can only<br />
be awarded in situations where the conduct is<br />
reprehensible. See, e.g., State Farm Mut. Auto. Ins.<br />
Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155<br />
L.Ed.2d 585 (2003); BMW of N. Am., Inc. v. Gore,<br />
517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809<br />
(1996) (“Gore ”). While the majority properly<br />
refrains from addressing this constitutional issue, as it<br />
has not been briefed or argued by the parties or amici<br />
in this case, I write separately to note my view that<br />
enhancing damages for failure to comply with the<br />
due care requirement cannot be squared with those<br />
recent Supreme Court cases.<br />
I<br />
We have often recognized that enhanced damages<br />
awarded pursuant to 35 U.S.C. § 284 are a form of<br />
punitive damages. See, e.g., Sensonics, Inc. v.<br />
Aerosonic Corp., 81 F.3d 1566, 1574 (Fed.Cir.1996)<br />
(“[E]nhanced damages are punitive, not<br />
compensatory.”). FN4 Punitive damages are awarded<br />
to punish reprehensible behavior, referred to in this<br />
context as willful infringement. “Enhancement ...<br />
depends on a showing of willful infringement or<br />
other indicium of bad faith warranting punitive<br />
damages.” Id.; see also Nat'l Presto Indus., Inc. v.<br />
West Bend Co., 76 F.3d 1185, 1192 (Fed.Cir.1996)<br />
(“Liability for willfulness of infringement turns on<br />
considerations of intent, state of mind, and<br />
culpability.”); Beatrice Foods Co. v. New Eng.<br />
Printing & Lithographing Co., 923 F.2d 1576, 1579<br />
(Fed.Cir.1991) (“Under our cases, enhanced damages<br />
may be awarded only as a penalty for an infringer's<br />
increased culpability, namely willful infringement or<br />
bad faith.”).<br />
FN4. This case, of course, does not involve<br />
an award of enhanced damages, but rather<br />
an award of attorney fees based on a<br />
willfulness finding. The majority correctly<br />
rejects the contention that an award of<br />
attorney fees pursuant to 35 U.S.C. § 285 is<br />
a form of punitive damages. See Maj. Op.,<br />
ante, at 1346 - 47. While attorney fees are<br />
not punitive damages, our case law makes<br />
clear that, where attorney fees are awarded<br />
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based on a willfulness finding, the same<br />
standard for willfulness applies to both<br />
enhancement and attorney fees. See, e.g.,<br />
Golight, Inc. v. Wal-Mart Stores, Inc., 355<br />
F.3d 1327, 1340 (Fed.Cir.2004). Thus,<br />
while it might not be unconstitutional to<br />
award attorney fees on a due care theory, if<br />
we were to restrict the award of enhanced<br />
damages, an award of attorney fees on a<br />
willfulness theory would also be restricted<br />
because the same standard applies to both.<br />
There are many circumstances that may create an<br />
appropriate predicate for a finding of willful<br />
infringement, and hence punitive damages, including<br />
deliberate*1349 copying, concealing infringing<br />
activity, infringement where the infringer knows that<br />
it is infringing or where it knows it has only frivolous<br />
defenses, infringement designed to injure a<br />
competitor, etc. We have appropriately held that<br />
such activity is reprehensible and that enhanced<br />
damages may be awarded in such circumstances.<br />
See, e.g., Hoechst Celanese Corp. v. BP Chems.<br />
Ltd., 78 F.3d 1575, 1583 (Fed.Cir.1996) (“Willful<br />
infringement is ... a measure of reasonable<br />
commercial behavior in the context of the tort of<br />
patent infringement. The extent to which the<br />
infringer disregarded the property rights of the<br />
patentee, the deliberateness of the tortious acts, or<br />
other manifestations of unethical or injurious<br />
commercial conduct, may provide grounds for a<br />
finding of willful infringement and the enhancement<br />
of damages.”); L.A. Gear, Inc. v. Thom McAn Shoe<br />
Co., 988 F.2d 1117, 1127 (Fed.Cir.1993) (reversing<br />
the district court's ruling that infringement was not<br />
willful because the infringer's “deliberate copying<br />
was strong evidence of willful infringement, without<br />
any exculpatory evidence to balance the weight”);<br />
Read Corp. v. Portec, Inc., 970 F.2d 816, 827<br />
(Fed.Cir.1992) (including “[w]hether defendant<br />
attempted to conceal its misconduct” as a factor to be<br />
considered in enhancing damages); Kaufman Co. v.<br />
Lantech, Inc., 807 F.2d 970, 978-79 (Fed.Cir.1986)<br />
(affirming the district court's finding of willfulness<br />
based on the district court's findings that the infringer<br />
“faithfully copied the claimed invention, took an<br />
untenable position regarding validity of the patent,<br />
and presented a frivolous defense of noninfringement<br />
” (emphasis added)).<br />
But a potential infringer's mere failure to engage in<br />
due care is not itself reprehensible conduct. To hold<br />
that it is effectively shifts the burden of proof on the<br />
issue of willfulness from the patentee to the infringer,<br />
which must show that its infringement is not willful<br />
by showing that it exercised due care. While the<br />
duty of care is only one factor in the determination of<br />
enhanced damages, no one can seriously doubt that,<br />
both in the minds of the jurors (in determining<br />
willfulness) and in the decision of the district court<br />
(concerning enhancement), the duty of care is by far<br />
the preeminent factor in the vast majority of cases.<br />
II<br />
The duty of care requirement finds no support in the<br />
patent damages statute, the legislative history, or<br />
Supreme Court opinions. The enhancement statute<br />
merely provides that “the court may increase the<br />
damages up to three times the amount found [by the<br />
jury] or assessed [by the court].” 35 U.S.C. § 284<br />
(2000). No other mention is made of enhancement,<br />
willful infringement, or a duty of care. The present<br />
statute, which was enacted in 1952, simply<br />
“consolidates the provisions relating to damages”<br />
from the previous version of the patent law. S.Rep.<br />
No. 82-1979, at 29 (1952); H.R.Rep. No. 82-1923, at<br />
29 (1952). The previous version of the statute-in<br />
effect since 1836-provided that courts can enhance<br />
damages “according to the circumstances of the<br />
case.” FN5 Our attention*1350 has been directed to<br />
no meaningful legislative history for the current<br />
statute or the earlier statutes.<br />
FN5. The <strong>Patent</strong> Act of 1870 provided:<br />
[W]henever in any [patent infringement]<br />
action a verdict shall be rendered for the<br />
plaintiff, the court may enter judgment<br />
thereon for any sum above the amount found<br />
by the verdict as the actual damages<br />
sustained, according to the circumstances of<br />
the case, not exceeding three times the<br />
amount of such verdict, together with the<br />
costs.<br />
Ch. 230, § 59, 16 Stat. 198, 207 (1870).<br />
The <strong>Patent</strong> Act of 1836 likewise provided:<br />
[I]t shall be in the power of the court to<br />
render judgment for any sum above the<br />
amount found by such verdict as the actual<br />
damages sustained by the plaintiff, not<br />
exceeding three times the amount thereof,<br />
according to the circumstances of the case,<br />
with costs....<br />
Ch. 357, § 14, 5 Stat. 117, 123 (1836).<br />
Nor does any of the few Supreme Court cases<br />
interpreting section 284 provide any basis for a duty<br />
of care. Indeed, they appear to limit enhanced<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
383 F.3d 1337 Page 11<br />
383 F.3d 1337, 65 Fed. R. Evid. Serv. 365, 72 U.S.P.Q.2d 1560<br />
(Cite as: 383 F.3d 1337)<br />
damages to cases of “willful or bad-faith<br />
infringement,” Aro Mfg. Co. v. Convertible Top<br />
Replacement Co., 377 U.S. 476, 508, 84 S.Ct. 1526,<br />
12 L.Ed.2d 457 (1964) (stating that the patentee<br />
“could in a case of willful or bad-faith infringement<br />
recover punitive or ‘increased’ damages under the<br />
statute's trebling provision”), or “wanton or<br />
malicious” injury, Seymour v. McCormick, 57 U.S.<br />
480, 489, 16 How. 480, 14 L.Ed. 1024 (1853) (“It is<br />
true, where the injury is wanton or malicious, a jury<br />
may inflict vindictive or exemplary damages, not to<br />
recompense the plaintiff, but to punish the<br />
defendant.”). Furthermore, the entire provenance of<br />
the due care requirement is dictum in earlier regional<br />
circuit cases. See Milgo Elec. Corp. v. United Bus.<br />
Communications, Inc., 623 F.2d 645, 666 (10th Cir.),<br />
cert. denied, 449 U.S. 1066, 101 S.Ct. 794, 66<br />
L.Ed.2d 611 (1980); Coleman Co. v. Holly Mfg. Co.,<br />
269 F.2d 660, 666 (9th Cir.1959).<br />
III<br />
Whatever justification there may have been for the<br />
due care approach in the past, that doctrine has been<br />
undermined by the decisions of the Supreme Court<br />
beginning in 1996, which have limited the award of<br />
punitive damages on due process grounds. See, e.g.,<br />
State Farm, 538 U.S. at 416-18, 123 S.Ct. 1513;<br />
Gore, 517 U.S. at 568, 116 S.Ct. 1589. The<br />
Supreme Court first held in Gore that an award of<br />
punitive damages can violate the Due Process<br />
Clause, FN6 stating that “[p]erhaps the most important<br />
indicium of the reasonableness of a punitive damages<br />
award is the degree of reprehensibility of the<br />
defendant's conduct.” 517 U.S. at 575, 116 S.Ct.<br />
1589. The Court stated:<br />
FN6. The Court had previously held in<br />
Pacific Mutual Life Insurance Co. v. Haslip,<br />
499 U.S. 1, 111 S.Ct. 1032, 113 L.Ed.2d 1<br />
(1991), that punitive damage awards can<br />
violate the Due Process Clause, but the<br />
particular damage award in Haslip did not<br />
violate that clause. Id. at 18-19, 111 S.Ct.<br />
1032.<br />
There is no evidence that BMW acted in bad faith<br />
when it sought to establish the appropriate line<br />
between presumptively minor damage and damage<br />
requiring disclosure to purchasers.... In this regard, it<br />
is also significant that there is no evidence that BMW<br />
persisted in a course of conduct after it had been<br />
adjudged unlawful on even one occasion, let alone<br />
repeated occasions.<br />
Finally, the record in this case discloses no deliberate<br />
false statements, acts of affirmative misconduct, or<br />
concealment of evidence of improper motive....<br />
Id. at 579, 116 S.Ct. 1589. The Court further<br />
explained the importance of reprehensibility to an<br />
award of punitive damages in State Farm, making<br />
clear that reprehensibility is indispensable to a<br />
punitive damages award:[P]unitive damages should<br />
only be awarded if the defendant's culpability, after<br />
having paid compensatory damages, is so<br />
reprehensible as to warrant the imposition of further<br />
sanctions to achieve punishment or deterrence.<br />
Id. at 419, 123 S.Ct. 1513. Thus, even where the<br />
damages multiple is within accepted*1351 bounds,<br />
the Court has required a finding of reprehensibility as<br />
a predicate to an award of punitive damages. <strong>Patent</strong><br />
law is not an island separated from the main body of<br />
American jurisprudence. The same requirement of<br />
reprehensibility restricts an award of enhanced<br />
damages in patent cases as in other cases. When an<br />
infringer merely fails to exercise his supposed duty of<br />
care, there are “none of the circumstances ordinarily<br />
associated with egregiously improper conduct” that<br />
could be sufficiently reprehensible to warrant<br />
imposition of punitive damages, as in Gore. 517 U.S.<br />
at 580, 116 S.Ct. 1589. FN7<br />
FN7. The imposition of treble damages by a<br />
court based on a lack of due care by an<br />
infringer is unlike such an imposition for<br />
violations of the Sherman Act or for<br />
intentional use of a counterfeit mark in<br />
violation of the Lanham Act, where<br />
damages are automatically trebled pursuant<br />
to statute, based on a congressional<br />
judgment that the conduct is per se<br />
reprehensible. See 15 U.S.C. § 15(a)<br />
(2000); 15 U.S.C. § 1117(b) (2000). Here,<br />
significantly and unlike in those situations,<br />
there is no judgment by Congress that<br />
infringement is per se reprehensible conduct<br />
requiring automatic trebling.<br />
V<br />
Finally, in my view, the imposition of the due care<br />
requirement has produced nothing of benefit to the<br />
patent system. In cases where the potential infringer<br />
has been guilty of deliberate copying, concealment of<br />
infringement, or other reprehensible conduct,<br />
enhanced damages serve a useful purpose. But<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
383 F.3d 1337 Page 12<br />
383 F.3d 1337, 65 Fed. R. Evid. Serv. 365, 72 U.S.P.Q.2d 1560<br />
(Cite as: 383 F.3d 1337)<br />
where such reprehensible conduct is absent, it is<br />
unnecessary to stretch the law of punitive damages to<br />
protect the patentee because the patentee can secure a<br />
preliminary injunction once he has learned of<br />
infringement. If the patentee is unable to secure a<br />
preliminary injunction because he cannot make a<br />
clear showing of likelihood of success on the merits<br />
(the accused infringer having a substantial defense,<br />
see, e.g., Nat'l Steel Car, Ltd. v. Canadian Pac. Ry.,<br />
Ltd., 357 F.3d 1319, 1325 (Fed.Cir.2004);<br />
Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239<br />
F.3d 1343, 1350-51 (Fed.Cir.2001)), there is no<br />
reason the patentee should be able to secure punitive<br />
damages based merely on a showing of lack of “due<br />
care” by the accused infringer during the pendency of<br />
the litigation.<br />
Second, the due care requirement exists in the context<br />
of patent law that is complex, where ultimate<br />
outcomes are difficult to predict, and, as the majority<br />
holds, the existence of a substantial defense on the<br />
merits will not bar a finding of willfulness. See Maj.<br />
Op., ante, at 1357. As the amici point out, the due<br />
care requirement has fostered a reluctance to review<br />
patents for fear that the mere knowledge of a patent<br />
will lead to a finding of lack of due care, see, e.g.,<br />
Amici Curiae Br. of U.S. Council for Int'l Bus. et al.<br />
at 9 n.4; a cottage industry of window-dressing legal<br />
opinions by third party counsel designed to protect<br />
the real decision-making process between litigating<br />
counsel and the company's executives, see, e.g., id. at<br />
9; the imposition of substantial legal costs on<br />
companies seeking to introduce innovative products,<br />
see, e.g., Amicus Curiae Br. of Sec. Indus. Ass'n at<br />
9-11; and an enhanced ability of holders of dubious<br />
patents to force competitors' products off of the<br />
market through the threat of enhanced damages, see,<br />
e.g., id. at 5-6. These concerns have led amici, FN8<br />
the Federal Trade Commission working group, FN9<br />
and a committee of the *1352 National Academies,<br />
FN10<br />
to urge us to reconsider our willfulness<br />
jurisprudence.<br />
FN8. See, e.g., Br. for Amicus Curiae Am.<br />
Intellectual Prop. Law Ass'n at 6-8; Br. for<br />
Amicus Curiae N.Y. Intellectual Prop. Law<br />
Ass'n at 9-11.<br />
FN9. See, e.g., Federal Trade Comm'n, To<br />
Promote Innovation: The Proper Balance of<br />
Competition and <strong>Patent</strong> Law and Policy, ch.<br />
5, at 31 (2003), available at<br />
http://www.ftc.gov/os/2003/10/innovationrpt<br />
.pdf (“The Commission recommends that<br />
legislation be enacted requiring either actual,<br />
written notice of infringement from the<br />
patentee or deliberate copying of the<br />
patentee's invention, knowing it to be<br />
patented, as a predicate for willful<br />
infringement.”). See generally id. at 28-31.<br />
FN10. See, e.g., Comm. on Intellectual Prop.<br />
Rights in the Knowledge-Based Economy,<br />
The National Academies, A <strong>Patent</strong> System<br />
for the 21st Century 119 (Stephen A. Merrill<br />
et al. eds., 2004), available at http://<br />
www.nap.edu/html/patentsystem/<br />
0309089107.pdf (“Lacking evidence of its<br />
beneficial deterrent effect but with evidence<br />
of its perverse anti-disclosure consequences,<br />
the committee recommends elimination of<br />
the provision for enhanced damages based<br />
on a subjective finding of willful<br />
infringement.”). See generally id. at 118-<br />
20.<br />
The majority opinion here ameliorates these concerns<br />
to some very limited extent by eliminating the<br />
inference that an undisclosed or unobtained opinion<br />
of counsel was or would have been adverse. But the<br />
majority opinion does not address whether a potential<br />
infringer can satisfy the requirement of due care<br />
without securing and disclosing an opinion of<br />
counsel, or, if such an opinion is not absolutely<br />
required, whether an adverse inference can be drawn<br />
from the accused infringer's failure to obtain and<br />
disclose such an opinion. More fundamentally, the<br />
opinion does not address whether the due care<br />
requirement, whatever its parameters, is consistent<br />
with the Supreme Court's punitive damages<br />
jurisprudence.<br />
I would recognize that the due care requirement is a<br />
relic of the past and eliminate it as a factor in the<br />
willfulness and enhancement analysis.<br />
C.A.Fed. (Va.),2004.<br />
Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH<br />
v. Dana Corp.<br />
383 F.3d 1337, 65 Fed. R. Evid. Serv. 365, 72<br />
U.S.P.Q.2d 1560<br />
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Cross Appellants (Oct. 09, 2001) Original Image of<br />
this Document (PDF)<br />
• 2001 WL 34901642 (Appellate Brief) Reply Brief<br />
of Defendants-Appellants & Brief for Defendants-<br />
Cross Appellants (Oct. 9, 2001) Original Image of<br />
this Document (PDF)<br />
• 2001 WL 34378622 (Appellate Brief) Brief for<br />
Plaintiff-Cross Appellant Knorr-Bremse System Fuer<br />
Nutzfahrzeuge Gmbh (Aug. 27, 2001) Original<br />
Image of this Document (PDF)<br />
• 2001 WL 34901640 (Appellate Brief) Brief for<br />
Plaintiff-Cross Appellant Knorr-Bremse Systeme<br />
Fuer Nutzfahrzeuge Gmbh (Aug. 27, 2001) Original<br />
Image of this Document (PDF)<br />
• 2001 WL 34378621 (Appellate Brief) Opening<br />
Brief of Defendants-Appellants (Jul. 16, 2001)<br />
Original Image of this Document (PDF)<br />
• 2001 WL 34901639 (Appellate Brief) Opening<br />
Brief of Defendants-Appellants (Jul. 16, 2001)<br />
Original Image of this Document with Appendix<br />
(PDF)<br />
END OF DOCUMENT<br />
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448 F.3d 1294 Page 1<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
Briefs and Other Related Documents<br />
United States Court of Appeals,Federal Circuit.<br />
In re ECHOSTAR COMMUNICATIONS<br />
CORPORATION, Echostar DBS Corporation,<br />
Echostar Technologies Corporation, and Echosphere<br />
Limited Liability Company, and Merchant & Gould<br />
P.C., Petitioners.<br />
Misc. Nos. 803, 805.<br />
May 1, 2006.<br />
Rehearing and Rehearing En Banc Denied July 5,<br />
2006.<br />
Background: In patent infringement action in which<br />
defendant asserted defense of reliance on advice of<br />
in-house counsel, plaintiff sought production of<br />
relevant documents, including documents relating to<br />
outside counsel whose advice was not relied on. The<br />
District Court determined that defendant waived its<br />
attorney-client privilege, and that waiver extended to<br />
work-product not communicated to defendant.<br />
Defendant petitioned for writ of mandamus, and<br />
outside counsel moved to intervene and petitioned for<br />
a writ of mandamus.<br />
Holdings: The Court of Appeals, Gajarsa, Circuit<br />
Judge, held that<br />
(1) defendant waived its attorney-client privilege<br />
with regard to any attorney-client communications<br />
relating to the same subject matter, including<br />
communications with counsel other than in-house<br />
counsel, but<br />
(2) outside counsel's work product that was not<br />
communicated to defendant and did not reflect a<br />
communication, was not within the scope of<br />
defendant's waiver of work product immunity.<br />
Petitions granted in part.<br />
West Headnotes<br />
[1] Mandamus 250 26<br />
250 Mandamus<br />
250II Subjects and Purposes of Relief<br />
250II(A) Acts and Proceedings of Courts,<br />
Judges, and Judicial Officers<br />
250k26 k. Exercise of Judicial Powers and<br />
Functions in General. Most Cited Cases<br />
Mandamus 250 28<br />
250 Mandamus<br />
250II Subjects and Purposes of Relief<br />
250II(A) Acts and Proceedings of Courts,<br />
Judges, and Judicial Officers<br />
250k28 k. Matters of Discretion. Most Cited<br />
Cases<br />
Remedy of mandamus is available in extraordinary<br />
situations to correct a clear abuse of discretion or<br />
usurpation of judicial power.<br />
[2] Mandamus 250 168(2)<br />
250 Mandamus<br />
250III Jurisdiction, Proceedings, and Relief<br />
250k168 Evidence<br />
250k168(2) k. Presumptions and Burden of<br />
Proof. Most Cited Cases<br />
A party seeking a writ of mandamus bears burden of<br />
proving that it has no other means of obtaining the<br />
relief desired, and that the right to issuance of the<br />
writ is clear and indisputable.<br />
[3] Mandamus 250 32<br />
250 Mandamus<br />
250II Subjects and Purposes of Relief<br />
250II(A) Acts and Proceedings of Courts,<br />
Judges, and Judicial Officers<br />
250k32 k. Proceedings in Civil Actions in<br />
General. Most Cited Cases<br />
A writ of mandamus may be sought when the<br />
challenged order turns on questions of privilege.<br />
[4] Mandamus 250 32<br />
250 Mandamus<br />
250II Subjects and Purposes of Relief<br />
250II(A) Acts and Proceedings of Courts,<br />
Judges, and Judicial Officers<br />
250k32 k. Proceedings in Civil Actions in<br />
General. Most Cited Cases<br />
Fact that defendant in patent infringement case had<br />
complied in large part with discovery order did not<br />
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448 F.3d 1294 Page 2<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
mean that it could not challenge a part of the order in<br />
a petition for a writ of mandamus.<br />
[5] Courts 106 96(7)<br />
106 Courts<br />
106II Establishment, Organization, and Procedure<br />
106II(G) Rules of Decision<br />
106k88 Previous Decisions as Controlling<br />
or as Precedents<br />
106k96 Decisions of United States<br />
Courts as Authority in Other United States Courts<br />
106k96(7) k. Particular Questions or<br />
Subject Matter. Most Cited Cases<br />
Federal Circuit law applies when deciding whether<br />
particular written or other materials are discoverable<br />
in a patent case, if those materials relate to an issue of<br />
substantive patent law.<br />
[6] Courts 106 96(7)<br />
106 Courts<br />
106II Establishment, Organization, and Procedure<br />
106II(G) Rules of Decision<br />
106k88 Previous Decisions as Controlling<br />
or as Precedents<br />
106k96 Decisions of United States<br />
Courts as Authority in Other United States Courts<br />
106k96(7) k. Particular Questions or<br />
Subject Matter. Most Cited Cases<br />
Questions of privilege and discoverability that arise<br />
from assertion of the advice-of-counsel defense in a<br />
patent infringement case necessarily involve issues of<br />
substantive patent law, so that Federal Circuit law<br />
applies. 35 U.S.C.A. § § 284-285.<br />
[7] Witnesses 410 198(1)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k197 Communications to or Advice by<br />
Attorney or Counsel<br />
410k198 In General<br />
410k198(1) k. In General. Most Cited<br />
Cases<br />
The attorney-client privilege protects disclosure of<br />
communications between a client and his attorney.<br />
[8] Witnesses 410 219(3)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k219 Waiver of Privilege<br />
410k219(3) k. Communications to or<br />
Advice by Attorney or Counsel. Most Cited Cases<br />
Defendant which chose, in patent infringement case,<br />
to rely on the advice of in-house counsel, thus waived<br />
its attorney-client privilege with regard to any<br />
attorney-client communications relating to the same<br />
subject matter, including communications with<br />
counsel other than in-house counsel.<br />
[9] Witnesses 410 219(3)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k219 Waiver of Privilege<br />
410k219(3) k. Communications to or<br />
Advice by Attorney or Counsel. Most Cited Cases<br />
Once a party announces that it will rely on the advice<br />
of counsel defense in response to an assertion of<br />
willful patent infringement, the attorney-client<br />
privilege is waived, and the waiver applies to all<br />
other communications relating to the same subject<br />
matter.<br />
[10] Witnesses 410 219(3)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k219 Waiver of Privilege<br />
410k219(3) k. Communications to or<br />
Advice by Attorney or Counsel. Most Cited Cases<br />
The opinion formed in a patent infringement case by<br />
defendant's in-house counsel and conveyed to<br />
defendant's executives constituted a legal opinion, for<br />
purposes of determination of the scope of defendant's<br />
waiver of attorney-client privilege, even though it<br />
was not a traditional opinion of counsel.<br />
[11] Federal Courts 170B 824<br />
170B Federal Courts<br />
170BVIII Courts of Appeals<br />
170BVIII(K) Scope, Standards, and Extent<br />
170BVIII(K)4 Discretion of Lower Court<br />
170Bk824 k. Witnesses, Qualification<br />
and Examination Of. Most Cited Cases<br />
Court of Appeals reviews a district court's<br />
determination as to the scope of a waiver of attorney-<br />
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448 F.3d 1294 Page 3<br />
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(Cite as: 448 F.3d 1294)<br />
client privilege for an abuse of discretion.<br />
[12] Federal Civil Procedure 170A 1272.1<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(A) In General<br />
170Ak1272 Scope<br />
170Ak1272.1 k. In General. Most Cited<br />
Cases<br />
In general, a party may obtain discovery of any<br />
matter that (1) is not privileged and (2) is relevant to<br />
the claim or defense of any party. Fed.Rules<br />
Civ.Proc.Rule 26(b)(1), 28 U.S.C.A.<br />
[13] Witnesses 410 200<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k197 Communications to or Advice by<br />
Attorney or Counsel<br />
410k200 k. Professional Character of<br />
Employment or Transaction. Most Cited Cases<br />
Attorney-client privilege protects the confidentiality<br />
of communications between attorney and client made<br />
for the purpose of obtaining legal advice.<br />
[14] Witnesses 410 219(3)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k219 Waiver of Privilege<br />
410k219(3) k. Communications to or<br />
Advice by Attorney or Counsel. Most Cited Cases<br />
Attorney-client privilege is at the discretion of the<br />
client.<br />
[15] Witnesses 410 219(3)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k219 Waiver of Privilege<br />
410k219(3) k. Communications to or<br />
Advice by Attorney or Counsel. Most Cited Cases<br />
Client can waive the attorney-client privilege when it<br />
uses the advice to establish a defense.<br />
[16] Federal Civil Procedure 170A 1600(3)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(3) k. Work Product of<br />
Attorney. Most Cited Cases<br />
Work-product doctrine, or work-product immunity,<br />
can protect documents and tangible things prepared<br />
in anticipation of litigation that are both nonprivileged<br />
and relevant. Fed.Rules Civ.Proc.Rule<br />
26(b)(3), 28 U.S.C.A.<br />
[17] Federal Civil Procedure 170A 1600(3)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(3) k. Work Product of<br />
Attorney. Most Cited Cases<br />
Work-product doctrine is not absolute, and a party<br />
may discover certain types of work product if they<br />
have substantial need of the materials in the<br />
preparation of the party's case and are unable without<br />
undue hardship to obtain the substantial equivalent by<br />
other means. Fed.Rules Civ.Proc.Rule 26(b)(3), 28<br />
U.S.C.A.<br />
[18] Federal Civil Procedure 170A 1600(3)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(3) k. Work Product of<br />
Attorney. Most Cited Cases<br />
Rule allowing discovery of certain types of work<br />
product only allows discovery of factual or nonopinion<br />
work product and requires the court to<br />
protect against the disclosure of the mental<br />
impressions, conclusions, opinions, or legal theories<br />
of an attorney or other representative. Fed.Rules<br />
Civ.Proc.Rule 26(b)(3), 28 U.S.C.A.<br />
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448 F.3d 1294 Page 4<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
[19] Federal Civil Procedure 170A 1600(5)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(5) k. Waiver. Most Cited<br />
Cases<br />
A party may discover work product if the party<br />
waives its immunity.<br />
[20] Federal Civil Procedure 170A 1600(5)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(5) k. Waiver. Most Cited<br />
Cases<br />
Work product waiver is not a broad waiver of all<br />
work product related to the same subject matter, but<br />
only extends to factual or non-opinion work product<br />
concerning the same subject matter as the disclosed<br />
work product.<br />
[21] Federal Civil Procedure 170A 1600(5)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(5) k. Waiver. Most Cited<br />
Cases<br />
Waiver of work product opinions extends to advice<br />
and work product given after litigation began when<br />
the advice is relevant to ongoing willful<br />
infringement, so long as that ongoing infringement is<br />
at issue in the litigation.<br />
[22] <strong>Patent</strong>s 291 292.3(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k292 Discovery<br />
291k292.3 Production of Documents and<br />
Other Matters<br />
291k292.3(1) k. In General. Most<br />
Cited Cases<br />
Work-product waiver in a patent infringement case<br />
extends only so far as to inform the court of the<br />
infringer's state of mind.<br />
[23] Federal Civil Procedure 170A 1600(5)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(5) k. Waiver. Most Cited<br />
Cases<br />
Work product reflecting counsel's opinions and<br />
mental impressions, which is never communicated to<br />
the client, is not within the scope of a defendant's<br />
waiver of work-product immunity. Fed.Rules<br />
Civ.Proc.Rule 26(b)(3), 28 U.S.C.A.<br />
[24] <strong>Patent</strong>s 291 292.3(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k292 Discovery<br />
291k292.3 Production of Documents and<br />
Other Matters<br />
291k292.3(1) k. In General. Most<br />
Cited Cases<br />
When an alleged patent infringer asserts an adviceof-counsel<br />
defense regarding willful infringement, it<br />
waives its attorney-client privilege and work-product<br />
immunity for any document or opinion that embodies<br />
or discusses a communication to or from it<br />
concerning whether that patent is valid, enforceable,<br />
and infringed by the accused; waiver includes not<br />
only any letters, memorandum, conversation, or the<br />
like between the attorney and his or her client, but,<br />
when appropriate, any documents referencing a<br />
communication between attorney and client.<br />
[25] <strong>Patent</strong>s 291 292.3(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k292 Discovery<br />
291k292.3 Production of Documents and<br />
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448 F.3d 1294 Page 5<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
Other Matters<br />
291k292.3(1) k. In General. Most<br />
Cited Cases<br />
Outside counsel's work product in patent<br />
infringement case, that was not communicated to<br />
defendant and did not reflect a communication, was<br />
not within the scope of defendant's waiver of workproduct<br />
immunity based on its assertion of an adviceof-counsel<br />
defense; any relevant value of such work<br />
product was outweighed by the policies of the workproduct<br />
doctrine.<br />
*1296 Harold J. McElhinny, Rachel Krevans, Alison<br />
M. Tucher, Morrison & Foerster LLP, San Francisco,<br />
CA, Jon R. Trembath, Merchant & Gould P.C.,<br />
Denver, CO, for Petitioners.<br />
Morgan Chu, Perry M. Goldberg, Christine Byrd,<br />
Irell & Manella LLP, Los Angeles, CA, for<br />
Respondent.<br />
Before SCHALL, GAJARSA, and PROST, Circuit<br />
Judges.<br />
ORDER<br />
GAJARSA, Circuit Judge.<br />
EchoStar Communications Corporation, EchoStar<br />
DBS Corporation, EchoStar Technologies<br />
Corporation, and Echosphere Limited Liability<br />
Company (collectively “EchoStar”) petition for a writ<br />
of mandamus, in Miscellaneous Docket No. 803, to<br />
direct the United States District Court for the Eastern<br />
District of Texas, in case 2:04-CV-1, to vacate its<br />
September 26, 2005 and October 6, 2005 orders that<br />
compelled EchoStar to produce documents created by<br />
the law firm Merchant & Gould P.C. that EchoStar<br />
asserts are protected from discovery by the workproduct<br />
doctrine. Merchant & Gould moves for<br />
leave to intervene in Miscellaneous Docket No. 803<br />
and submits its own petition for a writ of mandamus,<br />
filed as Miscellaneous Docket No. 805. TiVo, Inc.<br />
opposes the petitions and responds to the motion for<br />
leave to intervene. EchoStar and Merchant & Gould<br />
reply. We grant Merchant & Gould's unopposed<br />
motion for leave to intervene*1297 in Miscellaneous<br />
Docket No. 803. The motions for leave to file the<br />
replies are also granted. To the extent set forth<br />
below, we grant the petition for mandamus.<br />
I<br />
TiVo sued EchoStar for infringement of its U.S.<br />
<strong>Patent</strong> No. 6,233,389 (“the '389 patent”). In<br />
response to the allegation of willful infringement,<br />
EchoStar asserted the defense of reliance on advice<br />
of counsel. Prior to the filing of the action, EchoStar<br />
relied on advice of in-house counsel. After the<br />
action was filed, EchoStar obtained additional legal<br />
advice from Merchant & Gould but elected not to<br />
rely on it. Presumably to explore further EchoStar's<br />
state of mind in determining that it did not infringe<br />
the patent, TiVo sought production of documents in<br />
the possession of EchoStar and Merchant & Gould.<br />
The district court held that by relying on advice of inhouse<br />
counsel EchoStar waived its attorney-client<br />
privilege and attorney work-product immunity<br />
relating to advice of any counsel regarding<br />
infringement, including Merchant & Gould. The<br />
district court indicated that the scope of the waiver<br />
included communications made either before or after<br />
the filing of the complaint and any work product,<br />
whether or not the product was communicated to<br />
EchoStar. The district court also held that EchoStar<br />
could redact information related only to trial<br />
preparation or information unrelated to infringement.<br />
EchoStar produced communications, including two<br />
infringement opinions from Merchant & Gould, but<br />
did not produce any work product related to the<br />
Merchant & Gould opinions. FN1<br />
FN1. EchoStar also provided notes and<br />
communications relating to infringement<br />
prepared by another firm.<br />
Thereafter, the parties sought clarification of the<br />
district court's order. TiVo argued that the district<br />
court should order EchoStar to produce all Merchant<br />
& Gould documents that relate to the advice-ofcounsel<br />
defense, even if EchoStar was not in<br />
possession of the documents because they were never<br />
communicated to EchoStar. EchoStar argued that it<br />
should only be required to produce documents that<br />
were provided to it by Merchant & Gould.<br />
On October 5, 2005, the district court issued an order<br />
that clarified its previous order and stated that the<br />
waiver of immunity extended to all work product of<br />
Merchant & Gould, whether or not communicated to<br />
EchoStar. The district court determined that the<br />
documents could be relevant or lead to the discovery<br />
of admissible evidence because they might contain<br />
information that was conveyed to EchoStar, even if<br />
the documents were not themselves conveyed to<br />
EchoStar. EchoStar petitions this court for a writ of<br />
mandamus with respect to the Merchant & Gould<br />
documents not provided to EchoStar, FN2 challenging<br />
the district court's rulings. Merchant & Gould<br />
moves for leave to intervene in EchoStar's petition<br />
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448 F.3d 1294 Page 6<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
and submits its own petition for a writ of mandamus.<br />
FN2. No in-house counsel documents are at<br />
issue in the petition.<br />
II<br />
[1][2][3] The remedy of mandamus is available in<br />
extraordinary situations to correct a clear abuse of<br />
discretion or usurpation of judicial power. In re<br />
Calmar, Inc., 854 F.2d 461, 464 (Fed.Cir.1988). A<br />
party seeking a writ bears the burden of proving that<br />
it has no other means of obtaining the relief desired,<br />
Mallard v. U.S. Dist. Court, 490 U.S. 296, 309, 109<br />
S.Ct. 1814, 104 L.Ed.2d 318 (1989), and that the<br />
right to issuance of the writ is “clear and<br />
indisputable,” Allied Chem. Corp. v. Daiflon, Inc.,<br />
449 U.S. 33, 35, 101 S.Ct. 188, 66 L.Ed.2d 193<br />
(1980). A writ of mandamus may be *1298 sought<br />
when the challenged order turns on questions of<br />
privilege. In re Regents of Univ. of Cal., 101 F.3d<br />
1386, 1387 (Fed.Cir.1996); In re Pioneer Hi-Bred<br />
Int'l, Inc., 238 F.3d 1370, 1374 (Fed.Cir.2001).<br />
EchoStar argues that a writ of mandamus should<br />
issue, among other reasons, because the district court<br />
erred in determining that (1) the attorney-client<br />
privilege had been waived and (2) the waiver of any<br />
privilege extended to work-product that was not<br />
communicated to EchoStar because, inter alia, the<br />
documents are not relevant to whether EchoStar had<br />
a good faith belief that it did not infringe. Merchant<br />
& Gould also argues that the district court erred in<br />
requiring the production of documents that Merchant<br />
& Gould did not provide to EchoStar because any<br />
such documents could not be relevant to whether<br />
EchoStar reasonably had a good faith belief that it did<br />
not infringe, based upon advice from counsel.<br />
In response, TiVo argues, inter alia, that (1) EchoStar<br />
is not entitled to a writ of mandamus because it has<br />
complied, in large part, with the district court orders<br />
it now challenges, (2) the attorney-client privilege<br />
was waived when EchoStar asserted a defense of<br />
reliance on advice of in-house counsel, (3) the<br />
relevance of the Merchant & Gould documents can<br />
be determined when they are offered as evidence, and<br />
(4) even though the Merchant & Gould documents<br />
may not have been provided to EchoStar, they may<br />
contain information that was otherwise conveyed to<br />
EchoStar.<br />
[4] Regarding TiVo's first argument, that EchoStar is<br />
not entitled to mandamus because it has complied in<br />
large part with the order, we do not believe it is a<br />
requirement that a party refuse to comply at all with<br />
an order, if it seeks to challenge only a part of the<br />
order. Such a rule would encourage parties not to<br />
comply with district court orders that, in large part,<br />
they do not challenge, so that they could preserve a<br />
challenge only to the portions that they believe are<br />
erroneous. EchoStar cannot undo the disclosures it<br />
has made to TiVo, but it can challenge the portions of<br />
the order that require additional disclosures.<br />
We now turn to the more substantive arguments<br />
underlying this petition.<br />
III<br />
[5][6] In this petition, we apply our own law, rather<br />
than the law of the regional circuit. This case<br />
involves the extent to which a party waives its<br />
attorney-client privilege and work-product immunity<br />
when it asserts the advice-of-counsel defense in<br />
response to a charge of willful patent infringement.<br />
“Federal Circuit law applies when deciding whether<br />
particular written or other materials are discoverable<br />
in a patent case, if those materials relate to an issue of<br />
substantive patent law.” Advanced Cardiovascular<br />
Sys. v. Medtronic, Inc., 265 F.3d 1294, 1307<br />
(Fed.Cir.2001). A remedy for willful patent<br />
infringement is specifically provided for in the <strong>Patent</strong><br />
Act, see 35 U.S.C. § § 284-285; therefore, questions<br />
of privilege and discoverability that arise from<br />
assertion of the advice-of-counsel defense necessarily<br />
involve issues of substantive patent law, see In re<br />
Spalding Sports Worldwide, Inc., 203 F.3d 800, 803-<br />
04 (Fed.Cir.2000) (applying Federal Circuit law to<br />
question of attorney-client privilege between patent<br />
attorney and patentee).<br />
A<br />
[7] EchoStar first challenges the district court's<br />
holding that EchoStar waived the attorney-client<br />
privilege when it asserted its defense in response to<br />
the charge of willful infringement. The attorneyclient<br />
privilege protects disclosure of<br />
communications between a client and his *1299<br />
attorney. United States v. Zolin, 491 U.S. 554, 562,<br />
109 S.Ct. 2619, 105 L.Ed.2d 469 (1989); Upjohn Co.<br />
v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66<br />
L.Ed.2d 584 (1981).<br />
[8][9] Once a party announces that it will rely on<br />
advice of counsel, for example, in response to an<br />
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assertion of willful infringement, the attorney-client<br />
privilege is waived. “The widely applied standard for<br />
determining the scope of a waiver of attorney-client<br />
privilege is that the waiver applies to all other<br />
communications relating to the same subject matter.”<br />
Fort James Corp. v. Solo Cup Co., 412 F.3d 1340,<br />
1349 (Fed.Cir.2005).<br />
[10] EchoStar argues that it did not assert the adviceof-counsel<br />
defense because it intended to rely only on<br />
an “in-house investigation supervised by in-house<br />
counsel.” The district court held that the opinion<br />
formed by in-house counsel and conveyed to<br />
EchoStar executives, although not a traditional<br />
opinion of counsel, constituted a legal opinion. We<br />
see no error in the district court's determination.<br />
EchoStar summarily asserts that “an internal<br />
investigation involving in-house engineers and inhouse<br />
counsel is simply a different subject matter<br />
from legal opinions commissioned at a later date<br />
from outside lawyers.” This argument is without<br />
merit. Whether counsel is employed by the client or<br />
hired by outside contract, the offered advice or<br />
opinion is advice of counsel or an opinion of counsel.<br />
Use of in-house counsel may affect the strength of<br />
the defense, but it does not affect the legal nature of<br />
the advice. See Underwater Devices, Inc. v.<br />
Morrison-Knudsen Co., 717 F.2d 1380, 1390<br />
(Fed.Cir.1983) (overruled in part on other grounds<br />
by Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH<br />
v. Dana Corp., 383 F.3d 1337 (Fed.Cir.2004) (en<br />
banc )).<br />
Thus, when EchoStar chose to rely on the advice of<br />
in-house counsel, it waived the attorney-client<br />
privilege with regard to any attorney-client<br />
communications relating to the same subject matter,<br />
including communications with counsel other than<br />
in-house counsel, which would include<br />
communications with Merchant & Gould. See Akeva<br />
LLC v. Mizuno Corp., 243 F.Supp.2d 418, 423<br />
(M.D.N.C.2003).<br />
B<br />
EchoStar next asserts that the district court's order<br />
cast too wide a net by including within the waiver's<br />
scope documents that were never communicated<br />
from Merchant & Gould (the attorney) to EchoStar<br />
(the client). The district court stated:<br />
EchoStar had the benefit of choice, as explained by<br />
the Federal Circuit in Knorr-Bremse Systeme Fuer<br />
Nutzfahrzeuge GmbH v. Dana Corp., of whether to<br />
introduce [in-house counsel's] opinion. But once<br />
EchoStar chose to introduce the opinion, it opened to<br />
inspection all related advice sought and developed<br />
regarding EchoStar's potential infringement of the<br />
'389 patent. Regardless of when the opinions or<br />
materials were transcribed or communicated to<br />
EchoStar, such information necessarily relates to the<br />
opinion being offered by [in-house counsel] and goes<br />
to show EchoStar's state of mind with respect to<br />
willful infringement. This is particularly true where,<br />
as is the case here, EchoStar's willfulness witness was<br />
privy to the substance of the willfulness opinions<br />
developed by outside counsel both pre- and postfiling....<br />
TiVo, Inc. v. EchoStar Comm. Corp., No. 2:04-CV-1,<br />
at 13 (E.D.Tex. Sept. 26, 2005) (“September Order”).<br />
Noting that district courts had ruled differently on<br />
whether the waiver of work-product protection<br />
covered documents that were not disclosed to the<br />
client, the district court discussed the *1300 reasons<br />
for requiring production of uncommunicated work<br />
product:Still, other courts have mandated production<br />
of all material regardless of whether they were<br />
disclosed, maintaining that the discovery of such<br />
information is necessary to uncover what the client<br />
was actually told by opinion counsel. See Aspex<br />
Eyewear Inc. v. E'Lite Optik Inc., 276 F.Supp.2d<br />
1084, 1092-93 (D.Nev.2003); Novartis Pharms.<br />
Corp. v. EON Labs Mfg., Inc., 206 F.R.D. 396<br />
(D.Del.2002). In Novartis, the court stated, “it is<br />
critical for the patentee to have a full opportunity to<br />
probe, not only the state of mind of the infringer, but<br />
also the mind of the infringer's lawyer upon which<br />
the infringer so firmly relied.” Id. at 399. The<br />
rationale behind this approach is that, by imposing<br />
broad waiver, the advice of counsel defense will only<br />
be invoked by “infringers who prudently and<br />
sincerely sought competent advice from competent<br />
counsel ...” and “[m]oreover, focusing on the<br />
infringer's waiver rather than state of mind may<br />
reduce the chances of legal gamesmanship creeping<br />
into the practice of rendering infringement and<br />
validity opinions.” Id. “[I]f negative information was<br />
important enough to reduce to a memorandum, there<br />
is a reasonable possibility that the information was<br />
conveyed in some form or fashion to the client.”<br />
Beneficial Franchise Co. Inc. v. Bank One N.A., 205<br />
F.R.D. 212, 218 (N.D.Ill.2001).<br />
September Order at 11-12.<br />
In a subsequent order, the district court further<br />
explained why the scope of the waiver should include<br />
work product that was not disclosed to EchoStar:<br />
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Were discovery of “uncommunicated” materials not<br />
allowed, accused infringers could easily shield<br />
themselves from any unfavorable analysis by simply<br />
requesting that their opinion counsel not send it.<br />
This would be unfair.<br />
TiVo, Inc. v. EchoStar Comm. Corp., No. 2:04-CV-1,<br />
2005 WL 3024701 at 3 (E.D.Tex. Oct. 7, 2005)<br />
(“October Order”).<br />
[11] We review the district court's determination as to<br />
the scope of the waiver for an abuse of discretion. In<br />
re Pioneer, 238 F.3d at 1373 n. 2 (“[I]t appears that<br />
virtually all the circuits review the decision of a<br />
district court [regarding waiver of privilege]<br />
underlying a petition for writ of mandamus for abuse<br />
of discretion.”). EchoStar asserts that to apply the<br />
broad scope employed by the district court to the<br />
waiver of both attorney-client privilege and workproduct<br />
doctrine was an abuse of discretion. We<br />
agree.<br />
[12][13][14][15] The attorney-client privilege and the<br />
work-product doctrine, though related, are two<br />
distinct concepts and waiver of one does not<br />
necessarily waive the other. See Carter v. Gibbs,<br />
909 F.2d 1450, 1451 (Fed.Cir.1990) (en banc ),<br />
superseded in non-relevant part, Pub.L. No. 103-424,<br />
§ 9(c), 108 Stat. 4361 (1994), as recognized in<br />
Mudge v. United States, 308 F.3d 1220, 1223<br />
(Fed.Cir.2002); see also United States v. Nobles, 422<br />
U.S. 225, 238 n. 11, 95 S.Ct. 2160, 45 L.Ed.2d 141<br />
(1975). In general, a party may obtain discovery of<br />
any matter that (1) is “not privileged” and (2) “is<br />
relevant to the claim or defense of any party.”<br />
Fed.R.Civ.P. 26(b)(1). Among other things,<br />
attorney-client communications are designated as<br />
“privileged.” See Upjohn, 449 U.S. at 389, 101 S.Ct.<br />
677; Genentech, Inc. v. Int'l Trade Comm'n, 122<br />
F.3d 1409, 1415 (Fed.Cir.1997). “The attorney-client<br />
privilege protects the confidentiality of<br />
communications between attorney and client made<br />
for the purpose of obtaining legal advice.” Id. We<br />
recognize the privilege in order to promote full and<br />
frank communication between a client and his<br />
attorney so that the client can make *1301 wellinformed<br />
legal decisions and conform his activities to<br />
the law. See Upjohn, 449 U.S. at 389, 101 S.Ct. 677;<br />
XYZ Corp. v. United States, 348 F.3d 16, 22 (1st<br />
Cir.2003). This privilege is at the discretion of the<br />
client. Knorr-Bremse, 383 F.3d at 1345; Carter, 909<br />
F.2d at 1451. The client can waive the attorneyclient<br />
privilege when, for instance, it uses the advice<br />
to establish a defense. See id. However, selective<br />
waiver of the privilege may lead to the inequitable<br />
result that the waiving party could waive its privilege<br />
for favorable advice while asserting its privilege on<br />
unfavorable advice. XYZ Corp., 348 F.3d at 24. In<br />
such a case, the party uses the attorney-client<br />
privilege as both a sword and a shield. Id.; Fort<br />
James Corp., 412 F.3d at 1349. To prevent such<br />
abuses, we recognize that when a party defends its<br />
actions by disclosing an attorney-client<br />
communication, it waives the attorney-client<br />
privilege as to all such communications regarding the<br />
same subject matter. Id.<br />
[16] In contrast to the attorney-client privilege, the<br />
work-product doctrine, or work-product immunity as<br />
it is also called, can protect “documents and tangible<br />
things” prepared in anticipation of litigation that are<br />
both non-privileged and relevant. Fed.R.Civ.P.<br />
26(b)(3). Unlike the attorney-client privilege, which<br />
protects all communication whether written or oral,<br />
work-product immunity protects documents and<br />
tangible things, such as memorandums, letters, and e-<br />
mails. See generally Judicial Watch, Inc. v. Dep't of<br />
Justice, 432 F.3d 366 (D.C.Cir.2005). We recognize<br />
work-product immunity because it promotes a fair<br />
and efficient adversarial system by protecting “the<br />
attorney's thought processes and legal<br />
recommendations” from the prying eyes of his or her<br />
opponent. Genentech, 122 F.3d at 1415 (citations<br />
omitted); accord Hickman v. Taylor, 329 U.S. 495,<br />
511-14, 67 S.Ct. 385, 91 L.Ed. 451 (1947) (“Proper<br />
preparation of a client's case demands that he<br />
assemble information, sift what he considers to be the<br />
relevant from the irrelevant facts, prepare his legal<br />
theories and plan his strategy without undue and<br />
needless interference.... Were such materials open to<br />
opposing counsel on mere demand, much of what is<br />
now put down in writing would remain unwritten....<br />
Inefficiency, unfairness and sharp practices would<br />
inevitably develop in the giving of legal advice and in<br />
the preparation of cases for trial. The effect on the<br />
legal profession would be demoralizing. And the<br />
interests of the clients and the cause of justice would<br />
be poorly served.”); see also Nobles, 422 U.S. at<br />
237; Coastal States Gas Corp. v. Dep't of Energy,<br />
617 F.2d 854, 864 (D.C.Cir.1980). Essentially, the<br />
work-product doctrine encourages attorneys to write<br />
down their thoughts and opinions with the knowledge<br />
that their opponents will not rob them of the fruits of<br />
their labor. Hickman, 329 U.S. at 511, 67 S.Ct. 385;<br />
Id. at 516, 67 S.Ct. 385 (Jackson, J. concurring )<br />
(“[A] common law trial is and always should be an<br />
adversary proceeding. Discovery was hardly<br />
intended to enable a learned profession to perform its<br />
functions either without wits or on wits borrowed<br />
from the adversary.”); United States v. Adlman, 68<br />
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F.3d 1495, 1501 (2d Cir.1995) (“The purpose of the<br />
doctrine is to establish a zone of privacy for strategic<br />
litigation planning and to prevent one party from<br />
piggybacking on the adversary's preparation.”);<br />
Coastal States, 617 F.2d at 864 (noting that the effect<br />
of no immunity would mean “less work-product<br />
would be committed to paper, which might harm the<br />
quality of trial preparation”).<br />
[17][18] Like the attorney-client privilege, however,<br />
the work-product doctrine is not absolute. See In re<br />
Martin Marietta Corp., 856 F.2d 619, 626 (4th<br />
Cir.1988). *1302 First, a party may discover certain<br />
types of work product if they have “substantial need<br />
of the materials in the preparation of the party's case<br />
and that the party is unable without undue hardship to<br />
obtain the substantial equivalent ... by other means.”<br />
Rule 26(b)(3). This rule, however, only allows<br />
discovery of “factual” or “non-opinion” work product<br />
and requires a court to “protect against the disclosure<br />
of the mental impressions, conclusions, opinions, or<br />
legal theories of an attorney or other representative.”<br />
Id.; accord United States v. Adlman, 134 F.3d 1194,<br />
1197 (2d Cir.1998); Martin Marietta Corp., 856<br />
F.2d at 626.<br />
[19][20] Second, a party may discover work product<br />
if the party waives its immunity. See id. at 622-23;<br />
Thorn EMI N. Am. v. Micron Tech., 837 F.Supp. 616,<br />
621 (D.Del.1993). However, work product waiver is<br />
not a broad waiver of all work product related to the<br />
same subject matter like the attorney-client privilege.<br />
Martin Marietta Corp., 856 F.2d at 626. Instead,<br />
work-product waiver only extends to “factual” or<br />
“non-opinion” work product concerning the same<br />
subject matter as the disclosed work product. See id.<br />
at 625 (noting that a party “impliedly waived the<br />
work-product privilege as to all non-opinion workproduct<br />
on the same subject matter as that<br />
disclosed.”) (citing Nobles, 422 U.S. at 239, 95 S.Ct.<br />
2160).<br />
We recognize that the line between “factual” work<br />
product and “opinion” work product is not always<br />
distinct, especially when, as here, an attorney's<br />
opinion may itself be “factual” work product. When<br />
faced with the distinction between where that line<br />
lies, however, a district court should balance the<br />
policies to prevent sword-and-shield litigation tactics<br />
with the policy to protect work product.<br />
[21] That being said, we recognize at least three<br />
categories of work product that are potentially<br />
relevant to the advice-of-counsel defense here. They<br />
include: (1) documents that embody a<br />
communication between the attorney and client<br />
concerning the subject matter of the case, such as a<br />
traditional opinion letter; (2) documents analyzing<br />
the law, facts, trial strategy, and so forth that reflect<br />
the attorney's mental impressions but were not given<br />
to the client; and (3) documents that discuss a<br />
communication between attorney and client<br />
concerning the subject matter of the case but are not<br />
themselves communications to or from the client.<br />
See Thorn EMI, 837 F.Supp. at 622-623. FN3 As to the<br />
first category, we already noted in section A that<br />
when a party relies on the advice-of-counsel as a<br />
defense to willful infringement the party waives its<br />
attorney-client privilege for all communications<br />
between the attorney and client, including any<br />
documentary communications such as opinion letters<br />
and memoranda. See also Akeva LLC, 243<br />
F.Supp.2d at 423. FN4 As to the other two categories,<br />
scholars have noted that our prior opinions do not<br />
clearly define*1303 the scope of the work-product<br />
waiver. FN5 As a result, the district courts that have<br />
addressed this issue are split on just how far to extend<br />
that scope. Compare Thorn EMI, 837 F.Supp. at<br />
621-623 and Steelcase, Inc. v. Haworth, Inc., 954<br />
F.Supp. 1195, 1198-99 (W.D.Mich.1997) with<br />
Mushroom Assoc. v. Monterey Mushrooms, Inc., 24<br />
U.S.P.Q.2d 1767 (N.D.Cal.1992); FMT Corp. v.<br />
Nissei ASB Co., 24 U.S.P.Q.2d 1073 (N.D.Ga.1992);<br />
and Handgards, Inc. v. Johnson & Johnson, 413<br />
F.Supp. 926 (N.D.Cal.1976). As we discuss in more<br />
detail below, we conclude that waiver extends to the<br />
third category but does not extend so far as the<br />
second.<br />
FN3. We by no means anticipate that all<br />
work product in every case will fit into one<br />
of these three categories.<br />
FN4. EchoStar contends that waiver of<br />
opinions does not extend to advice and work<br />
product given after litigation began. While<br />
this may be true when the work product is<br />
never communicated to the client, it is not<br />
the case when the advice is relevant to<br />
ongoing willful infringement, so long as that<br />
ongoing infringement is at issue in the<br />
litigation. See Akeva LLC, 243 F.Supp.2d<br />
at 423 (“[O]nce a party asserts the defense<br />
of advice of counsel, this opens to inspection<br />
the advice received during the entire course<br />
of the alleged infringement.”); see also<br />
Crystal Semiconductor Corp. v. TriTech<br />
Microelectronics Int'l, Inc., 246 F.3d 1336,<br />
1351-1353 (Fed.Cir.2001) (noting that an<br />
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infringer may continue its infringement after<br />
notification of the patent by filing suit and<br />
that the infringer has a duty of due care to<br />
avoid infringement after such notification).<br />
FN5. See David O. Taylor, Wasting<br />
Resources: Reinventing the Scope of Waiver<br />
Resulting from the Advice-of-Counsel<br />
Defense to a Charge of Willful <strong>Patent</strong><br />
Infringement, 12 Tex. Intell. Prop. L.J. 319,<br />
320-21 (2004); William F. Lee & Lawrence<br />
P. Cogswell, III, Understanding and<br />
Addressing the Unfair Dilemma Created by<br />
the Doctrine of Willful <strong>Patent</strong> Infringement,<br />
41 Hous. L.Rev. 393, 436-37 (2004).<br />
[22] By asserting the advice-of-counsel defense to a<br />
charge of willful infringement, the accused infringer<br />
and his or her attorney do not give their opponent<br />
unfettered discretion to rummage through all of their<br />
files and pillage all of their litigation strategies. See<br />
Thorn EMI, 837 F.Supp. at 621-623 (“[C]ourts<br />
generally find a [work-product] waiver only if facts<br />
relevant to a particular, narrow subject matter are at<br />
issue and have been disclosed under circumstances<br />
where it would be unfair to deny the other party an<br />
opportunity to discover other facts relevant to that<br />
subject matter.”). Work-product waiver extends<br />
only so far as to inform the court of the infringer's<br />
state of mind. Counsel's opinion is not important for<br />
its legal correctness. It is important to the inquiry<br />
whether it is “thorough enough, as combined with<br />
other factors, to instill a belief in the infringer that a<br />
court might reasonably hold the patent is invalid, not<br />
infringed, or unenforceable.” Ortho Pharm. Corp. v.<br />
Smith, 959 F.2d 936, 944 (Fed.Cir.1992). It is what<br />
the alleged infringer knew or believed, and by<br />
contradistinction not what other items counsel may<br />
have prepared but did not communicate to the client,<br />
that informs the court of an infringer's willfulness.<br />
The overarching goal of waiver in such a case is to<br />
prevent a party from using the advice he received as<br />
both a sword, by waiving privilege to favorable<br />
advice, and a shield, by asserting privilege to<br />
unfavorable advice. See Fort James Corp., 412 F.3d<br />
at 1349; Martin Marietta Corp., 856 F.2d at 626; In<br />
re Sealed Case, 676 F.2d 793, 818 (D.C.Cir.1982)<br />
(“[W]hen a party seeks greater advantage from its<br />
control over work product than the law must provide<br />
to maintain a healthy adversary system[,] then the<br />
balance of interests recognized in Hickman ...<br />
shifts.”). To the extent the work-product immunity<br />
could have such an effect, it is waived.<br />
[23] The second category of work product, which is<br />
never communicated to the client, is not discoverable.<br />
Under Rule 26(b)(3), this so-called “opinion” work<br />
product deserves the highest protection from<br />
disclosure. See Adlman, 134 F.3d at 1197. While<br />
an accused infringer may waive the immunity for<br />
work product that embodies an opinion in letters and<br />
memorandum communicated to the client, he does<br />
not waive the attorney's own analysis and debate over<br />
what advice will be given. See Ortho Pharm., 959<br />
F.2d at 944. Upon waiver of attorney-client<br />
privilege, communicative documents, such as opinion<br />
letters, become evidence of a non-privileged, relevant<br />
fact, namely what was communicated to the client,<br />
see Nobles, 422 U.S. at 239 n. 14, 95 S.Ct. 2160<br />
(“[W]here ... counsel attempts to make a testimonial<br />
use of [work-product] materials the normal rules<br />
*1304 of evidence come into play with respect to ...<br />
production of documents.”); however, counsel's<br />
legal opinions and mental impressions that were not<br />
communicated do not acquire such factual<br />
characteristics and are, therefore, not within the scope<br />
of the waiver. As the Martin Marietta Corp. court<br />
noted,<br />
There is relatively little danger that a litigant will<br />
attempt to use a pure mental impression or legal<br />
theory as a sword and as a shield in the trial of a case<br />
so as to distort the factfinding process. Thus, the<br />
protection of lawyers from the broad repercussions of<br />
subject matter waiver in this context strengthens the<br />
adversary process, and, unlike the selective<br />
disclosure of evidence, may ultimately and ideally<br />
further the search for the truth.<br />
856 F.2d at 626. Thus, if a legal opinion or mental<br />
impression was never communicated to the client,<br />
then it provides little if any assistance to the court in<br />
determining whether the accused knew it was<br />
infringing, and any relative value is outweighed by<br />
the policies supporting the work-product doctrine.<br />
The third category of work product material falls<br />
admittedly somewhere interstitially between the first<br />
and second. In some instances there may be<br />
documents in the attorney's file that reference and/or<br />
describe a communication between the attorney and<br />
client, but were not themselves actually<br />
communicated to the client. For example, if an<br />
attorney writes a memorandum or an e-mail to his<br />
associate referencing a phone call with the client, in<br />
which he indicates that he discussed the client's<br />
potential infringement, then such a memorandum is<br />
discoverable. Unlike work product that was<br />
uncommunicated, this work product references a<br />
specific communication to the client. Though it is<br />
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not a communication to the client directly nor does it<br />
contain a substantive reference to what was<br />
communicated, it will aid the parties in determining<br />
what communications were made to the client and<br />
protect against intentional or unintentional<br />
withholding of attorney-client communications from<br />
the court.<br />
Still, we must emphasize that such communications<br />
may contain work product of the second kind-legal<br />
analysis that was not communicated. In those<br />
situations, the parties should take special care to<br />
redact such information, and if necessary the district<br />
court may review such material in camera. See Rule<br />
26(b)(3); see also id. advisory committee's note<br />
(1970) (“[T]he courts will sometimes find it<br />
necessary to order disclosure of a document but with<br />
portions deleted.”); Martin Marietta Corp., 856 F.2d<br />
at 626.<br />
[24] Therefore, when an alleged infringer asserts its<br />
advice-of-counsel defense regarding willful<br />
infringement of a particular patent, it waives its<br />
immunity for any document or opinion that embodies<br />
or discusses a communication to or from it<br />
concerning whether that patent is valid, enforceable,<br />
and infringed by the accused. This waiver of both<br />
the attorney-client privilege and the work-product<br />
immunity includes not only any letters,<br />
memorandum, conversation, or the like between the<br />
attorney and his or her client, but also includes, when<br />
appropriate, any documents referencing a<br />
communication between attorney and client. FN6<br />
FN6. Merchant & Gould contends that it<br />
alone retains the right to deny a party access<br />
to work product not communicated to a<br />
client. While we do not answer this<br />
question directly; here, the client, EchoStar,<br />
holds the right to waive privilege for<br />
attorney-client communications, Carter, 909<br />
F.2d at 1451, and therefore the right to<br />
waive privilege to evidence of those<br />
communications contained in Merchant &<br />
Gould's files. As we stated before, there<br />
may be a redaction of information which<br />
reflects legal opinions and mental<br />
impressions of Merchant & Gould attorneys<br />
that were not communicated to EchoStar.<br />
Rule 26(b)(3).<br />
EchoStar's waiver because it obviously played no part<br />
in EchoStar's belief as to infringement of the '389<br />
patent. See Steelcase, 954 F.Supp. at 1198-99. It<br />
may very well be true, as TiVo suggests, that at times<br />
some parties would communicate draft opinion letters<br />
or the contents thereof to the client confidentially in<br />
order to avoid disclosing that communication during<br />
potential discovery if and when the attorney-client<br />
privilege is waived, but we cannot eviscerate the<br />
legitimate policies of the work-product doctrine and<br />
chill the principles of our adversary system as a<br />
whole on account of the possibility that, from time to<br />
time, there may be occurrences of ethical<br />
transgressions.<br />
In sum, the advice-of-counsel defense to willfulness<br />
requires the court to decide, inter alia, whether<br />
counsel's opinion was thorough enough to “instill a<br />
belief in the infringer that a court might reasonably<br />
hold the patent is invalid, not infringed, or<br />
unenforceable.” Ortho Pharm., 959 F.2d at 944. If<br />
a Merchant & Gould document was not<br />
communicated to EchoStar or if a Merchant & Gould<br />
document does not reference a communication<br />
between Merchant & Gould and EchoStar, its<br />
relevant value is outweighed by the policies of the<br />
work-product doctrine. Thus, it was an abuse of<br />
discretion for the district court to determine that the<br />
scope of the waiver of privilege extended to such<br />
documents.<br />
Accordingly,<br />
IT IS ORDERED THAT:<br />
The petitions are granted. The district court is<br />
directed to vacate its orders, to the extent noted<br />
above. TiVo is entitled to discovery of Merchant &<br />
Gould documents consistent with, and in the manner<br />
set forth in, this opinion.<br />
C.A.Fed.,2006.<br />
In re EchoStar Communications Corp.<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
Briefs and Other Related Documents (Back to top)<br />
• 06-M805 (Docket) (Oct. 25, 2005)<br />
• 06-M803 (Docket) (Oct. 11, 2005)<br />
END OF DOCUMENT<br />
*1305 [25] Here, Merchant & Gould work product<br />
that was not communicated to EchoStar or does not<br />
reflect a communication is not within the scope of<br />
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448 F.3d 1294 Page 1<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
Briefs and Other Related Documents<br />
United States Court of Appeals,Federal Circuit.<br />
In re ECHOSTAR COMMUNICATIONS<br />
CORPORATION, Echostar DBS Corporation,<br />
Echostar Technologies Corporation, and Echosphere<br />
Limited Liability Company, and Merchant & Gould<br />
P.C., Petitioners.<br />
Misc. Nos. 803, 805.<br />
May 1, 2006.<br />
Rehearing and Rehearing En Banc Denied July 5,<br />
2006.<br />
Background: In patent infringement action in which<br />
defendant asserted defense of reliance on advice of<br />
in-house counsel, plaintiff sought production of<br />
relevant documents, including documents relating to<br />
outside counsel whose advice was not relied on. The<br />
District Court determined that defendant waived its<br />
attorney-client privilege, and that waiver extended to<br />
work-product not communicated to defendant.<br />
Defendant petitioned for writ of mandamus, and<br />
outside counsel moved to intervene and petitioned for<br />
a writ of mandamus.<br />
Holdings: The Court of Appeals, Gajarsa, Circuit<br />
Judge, held that<br />
(1) defendant waived its attorney-client privilege<br />
with regard to any attorney-client communications<br />
relating to the same subject matter, including<br />
communications with counsel other than in-house<br />
counsel, but<br />
(2) outside counsel's work product that was not<br />
communicated to defendant and did not reflect a<br />
communication, was not within the scope of<br />
defendant's waiver of work product immunity.<br />
Petitions granted in part.<br />
West Headnotes<br />
[1] Mandamus 250 26<br />
250 Mandamus<br />
250II Subjects and Purposes of Relief<br />
250II(A) Acts and Proceedings of Courts,<br />
Judges, and Judicial Officers<br />
250k26 k. Exercise of Judicial Powers and<br />
Functions in General. Most Cited Cases<br />
Mandamus 250 28<br />
250 Mandamus<br />
250II Subjects and Purposes of Relief<br />
250II(A) Acts and Proceedings of Courts,<br />
Judges, and Judicial Officers<br />
250k28 k. Matters of Discretion. Most Cited<br />
Cases<br />
Remedy of mandamus is available in extraordinary<br />
situations to correct a clear abuse of discretion or<br />
usurpation of judicial power.<br />
[2] Mandamus 250 168(2)<br />
250 Mandamus<br />
250III Jurisdiction, Proceedings, and Relief<br />
250k168 Evidence<br />
250k168(2) k. Presumptions and Burden of<br />
Proof. Most Cited Cases<br />
A party seeking a writ of mandamus bears burden of<br />
proving that it has no other means of obtaining the<br />
relief desired, and that the right to issuance of the<br />
writ is clear and indisputable.<br />
[3] Mandamus 250 32<br />
250 Mandamus<br />
250II Subjects and Purposes of Relief<br />
250II(A) Acts and Proceedings of Courts,<br />
Judges, and Judicial Officers<br />
250k32 k. Proceedings in Civil Actions in<br />
General. Most Cited Cases<br />
A writ of mandamus may be sought when the<br />
challenged order turns on questions of privilege.<br />
[4] Mandamus 250 32<br />
250 Mandamus<br />
250II Subjects and Purposes of Relief<br />
250II(A) Acts and Proceedings of Courts,<br />
Judges, and Judicial Officers<br />
250k32 k. Proceedings in Civil Actions in<br />
General. Most Cited Cases<br />
Fact that defendant in patent infringement case had<br />
complied in large part with discovery order did not<br />
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448 F.3d 1294 Page 2<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
mean that it could not challenge a part of the order in<br />
a petition for a writ of mandamus.<br />
[5] Courts 106 96(7)<br />
106 Courts<br />
106II Establishment, Organization, and Procedure<br />
106II(G) Rules of Decision<br />
106k88 Previous Decisions as Controlling<br />
or as Precedents<br />
106k96 Decisions of United States<br />
Courts as Authority in Other United States Courts<br />
106k96(7) k. Particular Questions or<br />
Subject Matter. Most Cited Cases<br />
Federal Circuit law applies when deciding whether<br />
particular written or other materials are discoverable<br />
in a patent case, if those materials relate to an issue of<br />
substantive patent law.<br />
[6] Courts 106 96(7)<br />
106 Courts<br />
106II Establishment, Organization, and Procedure<br />
106II(G) Rules of Decision<br />
106k88 Previous Decisions as Controlling<br />
or as Precedents<br />
106k96 Decisions of United States<br />
Courts as Authority in Other United States Courts<br />
106k96(7) k. Particular Questions or<br />
Subject Matter. Most Cited Cases<br />
Questions of privilege and discoverability that arise<br />
from assertion of the advice-of-counsel defense in a<br />
patent infringement case necessarily involve issues of<br />
substantive patent law, so that Federal Circuit law<br />
applies. 35 U.S.C.A. § § 284-285.<br />
[7] Witnesses 410 198(1)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k197 Communications to or Advice by<br />
Attorney or Counsel<br />
410k198 In General<br />
410k198(1) k. In General. Most Cited<br />
Cases<br />
The attorney-client privilege protects disclosure of<br />
communications between a client and his attorney.<br />
[8] Witnesses 410 219(3)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k219 Waiver of Privilege<br />
410k219(3) k. Communications to or<br />
Advice by Attorney or Counsel. Most Cited Cases<br />
Defendant which chose, in patent infringement case,<br />
to rely on the advice of in-house counsel, thus waived<br />
its attorney-client privilege with regard to any<br />
attorney-client communications relating to the same<br />
subject matter, including communications with<br />
counsel other than in-house counsel.<br />
[9] Witnesses 410 219(3)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k219 Waiver of Privilege<br />
410k219(3) k. Communications to or<br />
Advice by Attorney or Counsel. Most Cited Cases<br />
Once a party announces that it will rely on the advice<br />
of counsel defense in response to an assertion of<br />
willful patent infringement, the attorney-client<br />
privilege is waived, and the waiver applies to all<br />
other communications relating to the same subject<br />
matter.<br />
[10] Witnesses 410 219(3)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k219 Waiver of Privilege<br />
410k219(3) k. Communications to or<br />
Advice by Attorney or Counsel. Most Cited Cases<br />
The opinion formed in a patent infringement case by<br />
defendant's in-house counsel and conveyed to<br />
defendant's executives constituted a legal opinion, for<br />
purposes of determination of the scope of defendant's<br />
waiver of attorney-client privilege, even though it<br />
was not a traditional opinion of counsel.<br />
[11] Federal Courts 170B 824<br />
170B Federal Courts<br />
170BVIII Courts of Appeals<br />
170BVIII(K) Scope, Standards, and Extent<br />
170BVIII(K)4 Discretion of Lower Court<br />
170Bk824 k. Witnesses, Qualification<br />
and Examination Of. Most Cited Cases<br />
Court of Appeals reviews a district court's<br />
determination as to the scope of a waiver of attorney-<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
448 F.3d 1294 Page 3<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
client privilege for an abuse of discretion.<br />
[12] Federal Civil Procedure 170A 1272.1<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(A) In General<br />
170Ak1272 Scope<br />
170Ak1272.1 k. In General. Most Cited<br />
Cases<br />
In general, a party may obtain discovery of any<br />
matter that (1) is not privileged and (2) is relevant to<br />
the claim or defense of any party. Fed.Rules<br />
Civ.Proc.Rule 26(b)(1), 28 U.S.C.A.<br />
[13] Witnesses 410 200<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k197 Communications to or Advice by<br />
Attorney or Counsel<br />
410k200 k. Professional Character of<br />
Employment or Transaction. Most Cited Cases<br />
Attorney-client privilege protects the confidentiality<br />
of communications between attorney and client made<br />
for the purpose of obtaining legal advice.<br />
[14] Witnesses 410 219(3)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k219 Waiver of Privilege<br />
410k219(3) k. Communications to or<br />
Advice by Attorney or Counsel. Most Cited Cases<br />
Attorney-client privilege is at the discretion of the<br />
client.<br />
[15] Witnesses 410 219(3)<br />
410 Witnesses<br />
410II Competency<br />
410II(D) Confidential Relations and Privileged<br />
Communications<br />
410k219 Waiver of Privilege<br />
410k219(3) k. Communications to or<br />
Advice by Attorney or Counsel. Most Cited Cases<br />
Client can waive the attorney-client privilege when it<br />
uses the advice to establish a defense.<br />
[16] Federal Civil Procedure 170A 1600(3)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(3) k. Work Product of<br />
Attorney. Most Cited Cases<br />
Work-product doctrine, or work-product immunity,<br />
can protect documents and tangible things prepared<br />
in anticipation of litigation that are both nonprivileged<br />
and relevant. Fed.Rules Civ.Proc.Rule<br />
26(b)(3), 28 U.S.C.A.<br />
[17] Federal Civil Procedure 170A 1600(3)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(3) k. Work Product of<br />
Attorney. Most Cited Cases<br />
Work-product doctrine is not absolute, and a party<br />
may discover certain types of work product if they<br />
have substantial need of the materials in the<br />
preparation of the party's case and are unable without<br />
undue hardship to obtain the substantial equivalent by<br />
other means. Fed.Rules Civ.Proc.Rule 26(b)(3), 28<br />
U.S.C.A.<br />
[18] Federal Civil Procedure 170A 1600(3)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(3) k. Work Product of<br />
Attorney. Most Cited Cases<br />
Rule allowing discovery of certain types of work<br />
product only allows discovery of factual or nonopinion<br />
work product and requires the court to<br />
protect against the disclosure of the mental<br />
impressions, conclusions, opinions, or legal theories<br />
of an attorney or other representative. Fed.Rules<br />
Civ.Proc.Rule 26(b)(3), 28 U.S.C.A.<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
448 F.3d 1294 Page 4<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
[19] Federal Civil Procedure 170A 1600(5)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(5) k. Waiver. Most Cited<br />
Cases<br />
A party may discover work product if the party<br />
waives its immunity.<br />
[20] Federal Civil Procedure 170A 1600(5)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(5) k. Waiver. Most Cited<br />
Cases<br />
Work product waiver is not a broad waiver of all<br />
work product related to the same subject matter, but<br />
only extends to factual or non-opinion work product<br />
concerning the same subject matter as the disclosed<br />
work product.<br />
[21] Federal Civil Procedure 170A 1600(5)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(5) k. Waiver. Most Cited<br />
Cases<br />
Waiver of work product opinions extends to advice<br />
and work product given after litigation began when<br />
the advice is relevant to ongoing willful<br />
infringement, so long as that ongoing infringement is<br />
at issue in the litigation.<br />
[22] <strong>Patent</strong>s 291 292.3(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k292 Discovery<br />
291k292.3 Production of Documents and<br />
Other Matters<br />
291k292.3(1) k. In General. Most<br />
Cited Cases<br />
Work-product waiver in a patent infringement case<br />
extends only so far as to inform the court of the<br />
infringer's state of mind.<br />
[23] Federal Civil Procedure 170A 1600(5)<br />
170A Federal Civil Procedure<br />
170AX Depositions and Discovery<br />
170AX(E) Discovery and Production of<br />
Documents and Other Tangible Things<br />
170AX(E)3 Particular Subject Matters<br />
170Ak1600 Privileged Matters in<br />
General<br />
170Ak1600(5) k. Waiver. Most Cited<br />
Cases<br />
Work product reflecting counsel's opinions and<br />
mental impressions, which is never communicated to<br />
the client, is not within the scope of a defendant's<br />
waiver of work-product immunity. Fed.Rules<br />
Civ.Proc.Rule 26(b)(3), 28 U.S.C.A.<br />
[24] <strong>Patent</strong>s 291 292.3(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k292 Discovery<br />
291k292.3 Production of Documents and<br />
Other Matters<br />
291k292.3(1) k. In General. Most<br />
Cited Cases<br />
When an alleged patent infringer asserts an adviceof-counsel<br />
defense regarding willful infringement, it<br />
waives its attorney-client privilege and work-product<br />
immunity for any document or opinion that embodies<br />
or discusses a communication to or from it<br />
concerning whether that patent is valid, enforceable,<br />
and infringed by the accused; waiver includes not<br />
only any letters, memorandum, conversation, or the<br />
like between the attorney and his or her client, but,<br />
when appropriate, any documents referencing a<br />
communication between attorney and client.<br />
[25] <strong>Patent</strong>s 291 292.3(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k292 Discovery<br />
291k292.3 Production of Documents and<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
448 F.3d 1294 Page 5<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
Other Matters<br />
291k292.3(1) k. In General. Most<br />
Cited Cases<br />
Outside counsel's work product in patent<br />
infringement case, that was not communicated to<br />
defendant and did not reflect a communication, was<br />
not within the scope of defendant's waiver of workproduct<br />
immunity based on its assertion of an adviceof-counsel<br />
defense; any relevant value of such work<br />
product was outweighed by the policies of the workproduct<br />
doctrine.<br />
*1296 Harold J. McElhinny, Rachel Krevans, Alison<br />
M. Tucher, Morrison & Foerster LLP, San Francisco,<br />
CA, Jon R. Trembath, Merchant & Gould P.C.,<br />
Denver, CO, for Petitioners.<br />
Morgan Chu, Perry M. Goldberg, Christine Byrd,<br />
Irell & Manella LLP, Los Angeles, CA, for<br />
Respondent.<br />
Before SCHALL, GAJARSA, and PROST, Circuit<br />
Judges.<br />
ORDER<br />
GAJARSA, Circuit Judge.<br />
EchoStar Communications Corporation, EchoStar<br />
DBS Corporation, EchoStar Technologies<br />
Corporation, and Echosphere Limited Liability<br />
Company (collectively “EchoStar”) petition for a writ<br />
of mandamus, in Miscellaneous Docket No. 803, to<br />
direct the United States District Court for the Eastern<br />
District of Texas, in case 2:04-CV-1, to vacate its<br />
September 26, 2005 and October 6, 2005 orders that<br />
compelled EchoStar to produce documents created by<br />
the law firm Merchant & Gould P.C. that EchoStar<br />
asserts are protected from discovery by the workproduct<br />
doctrine. Merchant & Gould moves for<br />
leave to intervene in Miscellaneous Docket No. 803<br />
and submits its own petition for a writ of mandamus,<br />
filed as Miscellaneous Docket No. 805. TiVo, Inc.<br />
opposes the petitions and responds to the motion for<br />
leave to intervene. EchoStar and Merchant & Gould<br />
reply. We grant Merchant & Gould's unopposed<br />
motion for leave to intervene*1297 in Miscellaneous<br />
Docket No. 803. The motions for leave to file the<br />
replies are also granted. To the extent set forth<br />
below, we grant the petition for mandamus.<br />
I<br />
TiVo sued EchoStar for infringement of its U.S.<br />
<strong>Patent</strong> No. 6,233,389 (“the '389 patent”). In<br />
response to the allegation of willful infringement,<br />
EchoStar asserted the defense of reliance on advice<br />
of counsel. Prior to the filing of the action, EchoStar<br />
relied on advice of in-house counsel. After the<br />
action was filed, EchoStar obtained additional legal<br />
advice from Merchant & Gould but elected not to<br />
rely on it. Presumably to explore further EchoStar's<br />
state of mind in determining that it did not infringe<br />
the patent, TiVo sought production of documents in<br />
the possession of EchoStar and Merchant & Gould.<br />
The district court held that by relying on advice of inhouse<br />
counsel EchoStar waived its attorney-client<br />
privilege and attorney work-product immunity<br />
relating to advice of any counsel regarding<br />
infringement, including Merchant & Gould. The<br />
district court indicated that the scope of the waiver<br />
included communications made either before or after<br />
the filing of the complaint and any work product,<br />
whether or not the product was communicated to<br />
EchoStar. The district court also held that EchoStar<br />
could redact information related only to trial<br />
preparation or information unrelated to infringement.<br />
EchoStar produced communications, including two<br />
infringement opinions from Merchant & Gould, but<br />
did not produce any work product related to the<br />
Merchant & Gould opinions. FN1<br />
FN1. EchoStar also provided notes and<br />
communications relating to infringement<br />
prepared by another firm.<br />
Thereafter, the parties sought clarification of the<br />
district court's order. TiVo argued that the district<br />
court should order EchoStar to produce all Merchant<br />
& Gould documents that relate to the advice-ofcounsel<br />
defense, even if EchoStar was not in<br />
possession of the documents because they were never<br />
communicated to EchoStar. EchoStar argued that it<br />
should only be required to produce documents that<br />
were provided to it by Merchant & Gould.<br />
On October 5, 2005, the district court issued an order<br />
that clarified its previous order and stated that the<br />
waiver of immunity extended to all work product of<br />
Merchant & Gould, whether or not communicated to<br />
EchoStar. The district court determined that the<br />
documents could be relevant or lead to the discovery<br />
of admissible evidence because they might contain<br />
information that was conveyed to EchoStar, even if<br />
the documents were not themselves conveyed to<br />
EchoStar. EchoStar petitions this court for a writ of<br />
mandamus with respect to the Merchant & Gould<br />
documents not provided to EchoStar, FN2 challenging<br />
the district court's rulings. Merchant & Gould<br />
moves for leave to intervene in EchoStar's petition<br />
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448 F.3d 1294 Page 6<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
and submits its own petition for a writ of mandamus.<br />
FN2. No in-house counsel documents are at<br />
issue in the petition.<br />
II<br />
[1][2][3] The remedy of mandamus is available in<br />
extraordinary situations to correct a clear abuse of<br />
discretion or usurpation of judicial power. In re<br />
Calmar, Inc., 854 F.2d 461, 464 (Fed.Cir.1988). A<br />
party seeking a writ bears the burden of proving that<br />
it has no other means of obtaining the relief desired,<br />
Mallard v. U.S. Dist. Court, 490 U.S. 296, 309, 109<br />
S.Ct. 1814, 104 L.Ed.2d 318 (1989), and that the<br />
right to issuance of the writ is “clear and<br />
indisputable,” Allied Chem. Corp. v. Daiflon, Inc.,<br />
449 U.S. 33, 35, 101 S.Ct. 188, 66 L.Ed.2d 193<br />
(1980). A writ of mandamus may be *1298 sought<br />
when the challenged order turns on questions of<br />
privilege. In re Regents of Univ. of Cal., 101 F.3d<br />
1386, 1387 (Fed.Cir.1996); In re Pioneer Hi-Bred<br />
Int'l, Inc., 238 F.3d 1370, 1374 (Fed.Cir.2001).<br />
EchoStar argues that a writ of mandamus should<br />
issue, among other reasons, because the district court<br />
erred in determining that (1) the attorney-client<br />
privilege had been waived and (2) the waiver of any<br />
privilege extended to work-product that was not<br />
communicated to EchoStar because, inter alia, the<br />
documents are not relevant to whether EchoStar had<br />
a good faith belief that it did not infringe. Merchant<br />
& Gould also argues that the district court erred in<br />
requiring the production of documents that Merchant<br />
& Gould did not provide to EchoStar because any<br />
such documents could not be relevant to whether<br />
EchoStar reasonably had a good faith belief that it did<br />
not infringe, based upon advice from counsel.<br />
In response, TiVo argues, inter alia, that (1) EchoStar<br />
is not entitled to a writ of mandamus because it has<br />
complied, in large part, with the district court orders<br />
it now challenges, (2) the attorney-client privilege<br />
was waived when EchoStar asserted a defense of<br />
reliance on advice of in-house counsel, (3) the<br />
relevance of the Merchant & Gould documents can<br />
be determined when they are offered as evidence, and<br />
(4) even though the Merchant & Gould documents<br />
may not have been provided to EchoStar, they may<br />
contain information that was otherwise conveyed to<br />
EchoStar.<br />
[4] Regarding TiVo's first argument, that EchoStar is<br />
not entitled to mandamus because it has complied in<br />
large part with the order, we do not believe it is a<br />
requirement that a party refuse to comply at all with<br />
an order, if it seeks to challenge only a part of the<br />
order. Such a rule would encourage parties not to<br />
comply with district court orders that, in large part,<br />
they do not challenge, so that they could preserve a<br />
challenge only to the portions that they believe are<br />
erroneous. EchoStar cannot undo the disclosures it<br />
has made to TiVo, but it can challenge the portions of<br />
the order that require additional disclosures.<br />
We now turn to the more substantive arguments<br />
underlying this petition.<br />
III<br />
[5][6] In this petition, we apply our own law, rather<br />
than the law of the regional circuit. This case<br />
involves the extent to which a party waives its<br />
attorney-client privilege and work-product immunity<br />
when it asserts the advice-of-counsel defense in<br />
response to a charge of willful patent infringement.<br />
“Federal Circuit law applies when deciding whether<br />
particular written or other materials are discoverable<br />
in a patent case, if those materials relate to an issue of<br />
substantive patent law.” Advanced Cardiovascular<br />
Sys. v. Medtronic, Inc., 265 F.3d 1294, 1307<br />
(Fed.Cir.2001). A remedy for willful patent<br />
infringement is specifically provided for in the <strong>Patent</strong><br />
Act, see 35 U.S.C. § § 284-285; therefore, questions<br />
of privilege and discoverability that arise from<br />
assertion of the advice-of-counsel defense necessarily<br />
involve issues of substantive patent law, see In re<br />
Spalding Sports Worldwide, Inc., 203 F.3d 800, 803-<br />
04 (Fed.Cir.2000) (applying Federal Circuit law to<br />
question of attorney-client privilege between patent<br />
attorney and patentee).<br />
A<br />
[7] EchoStar first challenges the district court's<br />
holding that EchoStar waived the attorney-client<br />
privilege when it asserted its defense in response to<br />
the charge of willful infringement. The attorneyclient<br />
privilege protects disclosure of<br />
communications between a client and his *1299<br />
attorney. United States v. Zolin, 491 U.S. 554, 562,<br />
109 S.Ct. 2619, 105 L.Ed.2d 469 (1989); Upjohn Co.<br />
v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66<br />
L.Ed.2d 584 (1981).<br />
[8][9] Once a party announces that it will rely on<br />
advice of counsel, for example, in response to an<br />
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assertion of willful infringement, the attorney-client<br />
privilege is waived. “The widely applied standard for<br />
determining the scope of a waiver of attorney-client<br />
privilege is that the waiver applies to all other<br />
communications relating to the same subject matter.”<br />
Fort James Corp. v. Solo Cup Co., 412 F.3d 1340,<br />
1349 (Fed.Cir.2005).<br />
[10] EchoStar argues that it did not assert the adviceof-counsel<br />
defense because it intended to rely only on<br />
an “in-house investigation supervised by in-house<br />
counsel.” The district court held that the opinion<br />
formed by in-house counsel and conveyed to<br />
EchoStar executives, although not a traditional<br />
opinion of counsel, constituted a legal opinion. We<br />
see no error in the district court's determination.<br />
EchoStar summarily asserts that “an internal<br />
investigation involving in-house engineers and inhouse<br />
counsel is simply a different subject matter<br />
from legal opinions commissioned at a later date<br />
from outside lawyers.” This argument is without<br />
merit. Whether counsel is employed by the client or<br />
hired by outside contract, the offered advice or<br />
opinion is advice of counsel or an opinion of counsel.<br />
Use of in-house counsel may affect the strength of<br />
the defense, but it does not affect the legal nature of<br />
the advice. See Underwater Devices, Inc. v.<br />
Morrison-Knudsen Co., 717 F.2d 1380, 1390<br />
(Fed.Cir.1983) (overruled in part on other grounds<br />
by Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH<br />
v. Dana Corp., 383 F.3d 1337 (Fed.Cir.2004) (en<br />
banc )).<br />
Thus, when EchoStar chose to rely on the advice of<br />
in-house counsel, it waived the attorney-client<br />
privilege with regard to any attorney-client<br />
communications relating to the same subject matter,<br />
including communications with counsel other than<br />
in-house counsel, which would include<br />
communications with Merchant & Gould. See Akeva<br />
LLC v. Mizuno Corp., 243 F.Supp.2d 418, 423<br />
(M.D.N.C.2003).<br />
B<br />
EchoStar next asserts that the district court's order<br />
cast too wide a net by including within the waiver's<br />
scope documents that were never communicated<br />
from Merchant & Gould (the attorney) to EchoStar<br />
(the client). The district court stated:<br />
EchoStar had the benefit of choice, as explained by<br />
the Federal Circuit in Knorr-Bremse Systeme Fuer<br />
Nutzfahrzeuge GmbH v. Dana Corp., of whether to<br />
introduce [in-house counsel's] opinion. But once<br />
EchoStar chose to introduce the opinion, it opened to<br />
inspection all related advice sought and developed<br />
regarding EchoStar's potential infringement of the<br />
'389 patent. Regardless of when the opinions or<br />
materials were transcribed or communicated to<br />
EchoStar, such information necessarily relates to the<br />
opinion being offered by [in-house counsel] and goes<br />
to show EchoStar's state of mind with respect to<br />
willful infringement. This is particularly true where,<br />
as is the case here, EchoStar's willfulness witness was<br />
privy to the substance of the willfulness opinions<br />
developed by outside counsel both pre- and postfiling....<br />
TiVo, Inc. v. EchoStar Comm. Corp., No. 2:04-CV-1,<br />
at 13 (E.D.Tex. Sept. 26, 2005) (“September Order”).<br />
Noting that district courts had ruled differently on<br />
whether the waiver of work-product protection<br />
covered documents that were not disclosed to the<br />
client, the district court discussed the *1300 reasons<br />
for requiring production of uncommunicated work<br />
product:Still, other courts have mandated production<br />
of all material regardless of whether they were<br />
disclosed, maintaining that the discovery of such<br />
information is necessary to uncover what the client<br />
was actually told by opinion counsel. See Aspex<br />
Eyewear Inc. v. E'Lite Optik Inc., 276 F.Supp.2d<br />
1084, 1092-93 (D.Nev.2003); Novartis Pharms.<br />
Corp. v. EON Labs Mfg., Inc., 206 F.R.D. 396<br />
(D.Del.2002). In Novartis, the court stated, “it is<br />
critical for the patentee to have a full opportunity to<br />
probe, not only the state of mind of the infringer, but<br />
also the mind of the infringer's lawyer upon which<br />
the infringer so firmly relied.” Id. at 399. The<br />
rationale behind this approach is that, by imposing<br />
broad waiver, the advice of counsel defense will only<br />
be invoked by “infringers who prudently and<br />
sincerely sought competent advice from competent<br />
counsel ...” and “[m]oreover, focusing on the<br />
infringer's waiver rather than state of mind may<br />
reduce the chances of legal gamesmanship creeping<br />
into the practice of rendering infringement and<br />
validity opinions.” Id. “[I]f negative information was<br />
important enough to reduce to a memorandum, there<br />
is a reasonable possibility that the information was<br />
conveyed in some form or fashion to the client.”<br />
Beneficial Franchise Co. Inc. v. Bank One N.A., 205<br />
F.R.D. 212, 218 (N.D.Ill.2001).<br />
September Order at 11-12.<br />
In a subsequent order, the district court further<br />
explained why the scope of the waiver should include<br />
work product that was not disclosed to EchoStar:<br />
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Were discovery of “uncommunicated” materials not<br />
allowed, accused infringers could easily shield<br />
themselves from any unfavorable analysis by simply<br />
requesting that their opinion counsel not send it.<br />
This would be unfair.<br />
TiVo, Inc. v. EchoStar Comm. Corp., No. 2:04-CV-1,<br />
2005 WL 3024701 at 3 (E.D.Tex. Oct. 7, 2005)<br />
(“October Order”).<br />
[11] We review the district court's determination as to<br />
the scope of the waiver for an abuse of discretion. In<br />
re Pioneer, 238 F.3d at 1373 n. 2 (“[I]t appears that<br />
virtually all the circuits review the decision of a<br />
district court [regarding waiver of privilege]<br />
underlying a petition for writ of mandamus for abuse<br />
of discretion.”). EchoStar asserts that to apply the<br />
broad scope employed by the district court to the<br />
waiver of both attorney-client privilege and workproduct<br />
doctrine was an abuse of discretion. We<br />
agree.<br />
[12][13][14][15] The attorney-client privilege and the<br />
work-product doctrine, though related, are two<br />
distinct concepts and waiver of one does not<br />
necessarily waive the other. See Carter v. Gibbs,<br />
909 F.2d 1450, 1451 (Fed.Cir.1990) (en banc ),<br />
superseded in non-relevant part, Pub.L. No. 103-424,<br />
§ 9(c), 108 Stat. 4361 (1994), as recognized in<br />
Mudge v. United States, 308 F.3d 1220, 1223<br />
(Fed.Cir.2002); see also United States v. Nobles, 422<br />
U.S. 225, 238 n. 11, 95 S.Ct. 2160, 45 L.Ed.2d 141<br />
(1975). In general, a party may obtain discovery of<br />
any matter that (1) is “not privileged” and (2) “is<br />
relevant to the claim or defense of any party.”<br />
Fed.R.Civ.P. 26(b)(1). Among other things,<br />
attorney-client communications are designated as<br />
“privileged.” See Upjohn, 449 U.S. at 389, 101 S.Ct.<br />
677; Genentech, Inc. v. Int'l Trade Comm'n, 122<br />
F.3d 1409, 1415 (Fed.Cir.1997). “The attorney-client<br />
privilege protects the confidentiality of<br />
communications between attorney and client made<br />
for the purpose of obtaining legal advice.” Id. We<br />
recognize the privilege in order to promote full and<br />
frank communication between a client and his<br />
attorney so that the client can make *1301 wellinformed<br />
legal decisions and conform his activities to<br />
the law. See Upjohn, 449 U.S. at 389, 101 S.Ct. 677;<br />
XYZ Corp. v. United States, 348 F.3d 16, 22 (1st<br />
Cir.2003). This privilege is at the discretion of the<br />
client. Knorr-Bremse, 383 F.3d at 1345; Carter, 909<br />
F.2d at 1451. The client can waive the attorneyclient<br />
privilege when, for instance, it uses the advice<br />
to establish a defense. See id. However, selective<br />
waiver of the privilege may lead to the inequitable<br />
result that the waiving party could waive its privilege<br />
for favorable advice while asserting its privilege on<br />
unfavorable advice. XYZ Corp., 348 F.3d at 24. In<br />
such a case, the party uses the attorney-client<br />
privilege as both a sword and a shield. Id.; Fort<br />
James Corp., 412 F.3d at 1349. To prevent such<br />
abuses, we recognize that when a party defends its<br />
actions by disclosing an attorney-client<br />
communication, it waives the attorney-client<br />
privilege as to all such communications regarding the<br />
same subject matter. Id.<br />
[16] In contrast to the attorney-client privilege, the<br />
work-product doctrine, or work-product immunity as<br />
it is also called, can protect “documents and tangible<br />
things” prepared in anticipation of litigation that are<br />
both non-privileged and relevant. Fed.R.Civ.P.<br />
26(b)(3). Unlike the attorney-client privilege, which<br />
protects all communication whether written or oral,<br />
work-product immunity protects documents and<br />
tangible things, such as memorandums, letters, and e-<br />
mails. See generally Judicial Watch, Inc. v. Dep't of<br />
Justice, 432 F.3d 366 (D.C.Cir.2005). We recognize<br />
work-product immunity because it promotes a fair<br />
and efficient adversarial system by protecting “the<br />
attorney's thought processes and legal<br />
recommendations” from the prying eyes of his or her<br />
opponent. Genentech, 122 F.3d at 1415 (citations<br />
omitted); accord Hickman v. Taylor, 329 U.S. 495,<br />
511-14, 67 S.Ct. 385, 91 L.Ed. 451 (1947) (“Proper<br />
preparation of a client's case demands that he<br />
assemble information, sift what he considers to be the<br />
relevant from the irrelevant facts, prepare his legal<br />
theories and plan his strategy without undue and<br />
needless interference.... Were such materials open to<br />
opposing counsel on mere demand, much of what is<br />
now put down in writing would remain unwritten....<br />
Inefficiency, unfairness and sharp practices would<br />
inevitably develop in the giving of legal advice and in<br />
the preparation of cases for trial. The effect on the<br />
legal profession would be demoralizing. And the<br />
interests of the clients and the cause of justice would<br />
be poorly served.”); see also Nobles, 422 U.S. at<br />
237; Coastal States Gas Corp. v. Dep't of Energy,<br />
617 F.2d 854, 864 (D.C.Cir.1980). Essentially, the<br />
work-product doctrine encourages attorneys to write<br />
down their thoughts and opinions with the knowledge<br />
that their opponents will not rob them of the fruits of<br />
their labor. Hickman, 329 U.S. at 511, 67 S.Ct. 385;<br />
Id. at 516, 67 S.Ct. 385 (Jackson, J. concurring )<br />
(“[A] common law trial is and always should be an<br />
adversary proceeding. Discovery was hardly<br />
intended to enable a learned profession to perform its<br />
functions either without wits or on wits borrowed<br />
from the adversary.”); United States v. Adlman, 68<br />
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F.3d 1495, 1501 (2d Cir.1995) (“The purpose of the<br />
doctrine is to establish a zone of privacy for strategic<br />
litigation planning and to prevent one party from<br />
piggybacking on the adversary's preparation.”);<br />
Coastal States, 617 F.2d at 864 (noting that the effect<br />
of no immunity would mean “less work-product<br />
would be committed to paper, which might harm the<br />
quality of trial preparation”).<br />
[17][18] Like the attorney-client privilege, however,<br />
the work-product doctrine is not absolute. See In re<br />
Martin Marietta Corp., 856 F.2d 619, 626 (4th<br />
Cir.1988). *1302 First, a party may discover certain<br />
types of work product if they have “substantial need<br />
of the materials in the preparation of the party's case<br />
and that the party is unable without undue hardship to<br />
obtain the substantial equivalent ... by other means.”<br />
Rule 26(b)(3). This rule, however, only allows<br />
discovery of “factual” or “non-opinion” work product<br />
and requires a court to “protect against the disclosure<br />
of the mental impressions, conclusions, opinions, or<br />
legal theories of an attorney or other representative.”<br />
Id.; accord United States v. Adlman, 134 F.3d 1194,<br />
1197 (2d Cir.1998); Martin Marietta Corp., 856<br />
F.2d at 626.<br />
[19][20] Second, a party may discover work product<br />
if the party waives its immunity. See id. at 622-23;<br />
Thorn EMI N. Am. v. Micron Tech., 837 F.Supp. 616,<br />
621 (D.Del.1993). However, work product waiver is<br />
not a broad waiver of all work product related to the<br />
same subject matter like the attorney-client privilege.<br />
Martin Marietta Corp., 856 F.2d at 626. Instead,<br />
work-product waiver only extends to “factual” or<br />
“non-opinion” work product concerning the same<br />
subject matter as the disclosed work product. See id.<br />
at 625 (noting that a party “impliedly waived the<br />
work-product privilege as to all non-opinion workproduct<br />
on the same subject matter as that<br />
disclosed.”) (citing Nobles, 422 U.S. at 239, 95 S.Ct.<br />
2160).<br />
We recognize that the line between “factual” work<br />
product and “opinion” work product is not always<br />
distinct, especially when, as here, an attorney's<br />
opinion may itself be “factual” work product. When<br />
faced with the distinction between where that line<br />
lies, however, a district court should balance the<br />
policies to prevent sword-and-shield litigation tactics<br />
with the policy to protect work product.<br />
[21] That being said, we recognize at least three<br />
categories of work product that are potentially<br />
relevant to the advice-of-counsel defense here. They<br />
include: (1) documents that embody a<br />
communication between the attorney and client<br />
concerning the subject matter of the case, such as a<br />
traditional opinion letter; (2) documents analyzing<br />
the law, facts, trial strategy, and so forth that reflect<br />
the attorney's mental impressions but were not given<br />
to the client; and (3) documents that discuss a<br />
communication between attorney and client<br />
concerning the subject matter of the case but are not<br />
themselves communications to or from the client.<br />
See Thorn EMI, 837 F.Supp. at 622-623. FN3 As to the<br />
first category, we already noted in section A that<br />
when a party relies on the advice-of-counsel as a<br />
defense to willful infringement the party waives its<br />
attorney-client privilege for all communications<br />
between the attorney and client, including any<br />
documentary communications such as opinion letters<br />
and memoranda. See also Akeva LLC, 243<br />
F.Supp.2d at 423. FN4 As to the other two categories,<br />
scholars have noted that our prior opinions do not<br />
clearly define*1303 the scope of the work-product<br />
waiver. FN5 As a result, the district courts that have<br />
addressed this issue are split on just how far to extend<br />
that scope. Compare Thorn EMI, 837 F.Supp. at<br />
621-623 and Steelcase, Inc. v. Haworth, Inc., 954<br />
F.Supp. 1195, 1198-99 (W.D.Mich.1997) with<br />
Mushroom Assoc. v. Monterey Mushrooms, Inc., 24<br />
U.S.P.Q.2d 1767 (N.D.Cal.1992); FMT Corp. v.<br />
Nissei ASB Co., 24 U.S.P.Q.2d 1073 (N.D.Ga.1992);<br />
and Handgards, Inc. v. Johnson & Johnson, 413<br />
F.Supp. 926 (N.D.Cal.1976). As we discuss in more<br />
detail below, we conclude that waiver extends to the<br />
third category but does not extend so far as the<br />
second.<br />
FN3. We by no means anticipate that all<br />
work product in every case will fit into one<br />
of these three categories.<br />
FN4. EchoStar contends that waiver of<br />
opinions does not extend to advice and work<br />
product given after litigation began. While<br />
this may be true when the work product is<br />
never communicated to the client, it is not<br />
the case when the advice is relevant to<br />
ongoing willful infringement, so long as that<br />
ongoing infringement is at issue in the<br />
litigation. See Akeva LLC, 243 F.Supp.2d<br />
at 423 (“[O]nce a party asserts the defense<br />
of advice of counsel, this opens to inspection<br />
the advice received during the entire course<br />
of the alleged infringement.”); see also<br />
Crystal Semiconductor Corp. v. TriTech<br />
Microelectronics Int'l, Inc., 246 F.3d 1336,<br />
1351-1353 (Fed.Cir.2001) (noting that an<br />
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infringer may continue its infringement after<br />
notification of the patent by filing suit and<br />
that the infringer has a duty of due care to<br />
avoid infringement after such notification).<br />
FN5. See David O. Taylor, Wasting<br />
Resources: Reinventing the Scope of Waiver<br />
Resulting from the Advice-of-Counsel<br />
Defense to a Charge of Willful <strong>Patent</strong><br />
Infringement, 12 Tex. Intell. Prop. L.J. 319,<br />
320-21 (2004); William F. Lee & Lawrence<br />
P. Cogswell, III, Understanding and<br />
Addressing the Unfair Dilemma Created by<br />
the Doctrine of Willful <strong>Patent</strong> Infringement,<br />
41 Hous. L.Rev. 393, 436-37 (2004).<br />
[22] By asserting the advice-of-counsel defense to a<br />
charge of willful infringement, the accused infringer<br />
and his or her attorney do not give their opponent<br />
unfettered discretion to rummage through all of their<br />
files and pillage all of their litigation strategies. See<br />
Thorn EMI, 837 F.Supp. at 621-623 (“[C]ourts<br />
generally find a [work-product] waiver only if facts<br />
relevant to a particular, narrow subject matter are at<br />
issue and have been disclosed under circumstances<br />
where it would be unfair to deny the other party an<br />
opportunity to discover other facts relevant to that<br />
subject matter.”). Work-product waiver extends<br />
only so far as to inform the court of the infringer's<br />
state of mind. Counsel's opinion is not important for<br />
its legal correctness. It is important to the inquiry<br />
whether it is “thorough enough, as combined with<br />
other factors, to instill a belief in the infringer that a<br />
court might reasonably hold the patent is invalid, not<br />
infringed, or unenforceable.” Ortho Pharm. Corp. v.<br />
Smith, 959 F.2d 936, 944 (Fed.Cir.1992). It is what<br />
the alleged infringer knew or believed, and by<br />
contradistinction not what other items counsel may<br />
have prepared but did not communicate to the client,<br />
that informs the court of an infringer's willfulness.<br />
The overarching goal of waiver in such a case is to<br />
prevent a party from using the advice he received as<br />
both a sword, by waiving privilege to favorable<br />
advice, and a shield, by asserting privilege to<br />
unfavorable advice. See Fort James Corp., 412 F.3d<br />
at 1349; Martin Marietta Corp., 856 F.2d at 626; In<br />
re Sealed Case, 676 F.2d 793, 818 (D.C.Cir.1982)<br />
(“[W]hen a party seeks greater advantage from its<br />
control over work product than the law must provide<br />
to maintain a healthy adversary system[,] then the<br />
balance of interests recognized in Hickman ...<br />
shifts.”). To the extent the work-product immunity<br />
could have such an effect, it is waived.<br />
[23] The second category of work product, which is<br />
never communicated to the client, is not discoverable.<br />
Under Rule 26(b)(3), this so-called “opinion” work<br />
product deserves the highest protection from<br />
disclosure. See Adlman, 134 F.3d at 1197. While<br />
an accused infringer may waive the immunity for<br />
work product that embodies an opinion in letters and<br />
memorandum communicated to the client, he does<br />
not waive the attorney's own analysis and debate over<br />
what advice will be given. See Ortho Pharm., 959<br />
F.2d at 944. Upon waiver of attorney-client<br />
privilege, communicative documents, such as opinion<br />
letters, become evidence of a non-privileged, relevant<br />
fact, namely what was communicated to the client,<br />
see Nobles, 422 U.S. at 239 n. 14, 95 S.Ct. 2160<br />
(“[W]here ... counsel attempts to make a testimonial<br />
use of [work-product] materials the normal rules<br />
*1304 of evidence come into play with respect to ...<br />
production of documents.”); however, counsel's<br />
legal opinions and mental impressions that were not<br />
communicated do not acquire such factual<br />
characteristics and are, therefore, not within the scope<br />
of the waiver. As the Martin Marietta Corp. court<br />
noted,<br />
There is relatively little danger that a litigant will<br />
attempt to use a pure mental impression or legal<br />
theory as a sword and as a shield in the trial of a case<br />
so as to distort the factfinding process. Thus, the<br />
protection of lawyers from the broad repercussions of<br />
subject matter waiver in this context strengthens the<br />
adversary process, and, unlike the selective<br />
disclosure of evidence, may ultimately and ideally<br />
further the search for the truth.<br />
856 F.2d at 626. Thus, if a legal opinion or mental<br />
impression was never communicated to the client,<br />
then it provides little if any assistance to the court in<br />
determining whether the accused knew it was<br />
infringing, and any relative value is outweighed by<br />
the policies supporting the work-product doctrine.<br />
The third category of work product material falls<br />
admittedly somewhere interstitially between the first<br />
and second. In some instances there may be<br />
documents in the attorney's file that reference and/or<br />
describe a communication between the attorney and<br />
client, but were not themselves actually<br />
communicated to the client. For example, if an<br />
attorney writes a memorandum or an e-mail to his<br />
associate referencing a phone call with the client, in<br />
which he indicates that he discussed the client's<br />
potential infringement, then such a memorandum is<br />
discoverable. Unlike work product that was<br />
uncommunicated, this work product references a<br />
specific communication to the client. Though it is<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
448 F.3d 1294 Page 11<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
(Cite as: 448 F.3d 1294)<br />
not a communication to the client directly nor does it<br />
contain a substantive reference to what was<br />
communicated, it will aid the parties in determining<br />
what communications were made to the client and<br />
protect against intentional or unintentional<br />
withholding of attorney-client communications from<br />
the court.<br />
Still, we must emphasize that such communications<br />
may contain work product of the second kind-legal<br />
analysis that was not communicated. In those<br />
situations, the parties should take special care to<br />
redact such information, and if necessary the district<br />
court may review such material in camera. See Rule<br />
26(b)(3); see also id. advisory committee's note<br />
(1970) (“[T]he courts will sometimes find it<br />
necessary to order disclosure of a document but with<br />
portions deleted.”); Martin Marietta Corp., 856 F.2d<br />
at 626.<br />
[24] Therefore, when an alleged infringer asserts its<br />
advice-of-counsel defense regarding willful<br />
infringement of a particular patent, it waives its<br />
immunity for any document or opinion that embodies<br />
or discusses a communication to or from it<br />
concerning whether that patent is valid, enforceable,<br />
and infringed by the accused. This waiver of both<br />
the attorney-client privilege and the work-product<br />
immunity includes not only any letters,<br />
memorandum, conversation, or the like between the<br />
attorney and his or her client, but also includes, when<br />
appropriate, any documents referencing a<br />
communication between attorney and client. FN6<br />
FN6. Merchant & Gould contends that it<br />
alone retains the right to deny a party access<br />
to work product not communicated to a<br />
client. While we do not answer this<br />
question directly; here, the client, EchoStar,<br />
holds the right to waive privilege for<br />
attorney-client communications, Carter, 909<br />
F.2d at 1451, and therefore the right to<br />
waive privilege to evidence of those<br />
communications contained in Merchant &<br />
Gould's files. As we stated before, there<br />
may be a redaction of information which<br />
reflects legal opinions and mental<br />
impressions of Merchant & Gould attorneys<br />
that were not communicated to EchoStar.<br />
Rule 26(b)(3).<br />
EchoStar's waiver because it obviously played no part<br />
in EchoStar's belief as to infringement of the '389<br />
patent. See Steelcase, 954 F.Supp. at 1198-99. It<br />
may very well be true, as TiVo suggests, that at times<br />
some parties would communicate draft opinion letters<br />
or the contents thereof to the client confidentially in<br />
order to avoid disclosing that communication during<br />
potential discovery if and when the attorney-client<br />
privilege is waived, but we cannot eviscerate the<br />
legitimate policies of the work-product doctrine and<br />
chill the principles of our adversary system as a<br />
whole on account of the possibility that, from time to<br />
time, there may be occurrences of ethical<br />
transgressions.<br />
In sum, the advice-of-counsel defense to willfulness<br />
requires the court to decide, inter alia, whether<br />
counsel's opinion was thorough enough to “instill a<br />
belief in the infringer that a court might reasonably<br />
hold the patent is invalid, not infringed, or<br />
unenforceable.” Ortho Pharm., 959 F.2d at 944. If<br />
a Merchant & Gould document was not<br />
communicated to EchoStar or if a Merchant & Gould<br />
document does not reference a communication<br />
between Merchant & Gould and EchoStar, its<br />
relevant value is outweighed by the policies of the<br />
work-product doctrine. Thus, it was an abuse of<br />
discretion for the district court to determine that the<br />
scope of the waiver of privilege extended to such<br />
documents.<br />
Accordingly,<br />
IT IS ORDERED THAT:<br />
The petitions are granted. The district court is<br />
directed to vacate its orders, to the extent noted<br />
above. TiVo is entitled to discovery of Merchant &<br />
Gould documents consistent with, and in the manner<br />
set forth in, this opinion.<br />
C.A.Fed.,2006.<br />
In re EchoStar Communications Corp.<br />
448 F.3d 1294, 78 U.S.P.Q.2d 1676<br />
Briefs and Other Related Documents (Back to top)<br />
• 06-M805 (Docket) (Oct. 25, 2005)<br />
• 06-M803 (Docket) (Oct. 11, 2005)<br />
END OF DOCUMENT<br />
*1305 [25] Here, Merchant & Gould work product<br />
that was not communicated to EchoStar or does not<br />
reflect a communication is not within the scope of<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
NOTE: This order is nonprecedential.<br />
United States Court of Appeals for the Federal Circuit<br />
MISCELLANEOUS DOCKET NO. 830<br />
IN RE SEAGATE TECHNOLOGY, LLC,<br />
ON PETITION FOR WRIT OF MANDAMUS<br />
Petitioner.<br />
Before MICHEL, Chief Judge, NEWMAN, MAYER, LOURIE, RADER, SCHALL,<br />
BRYSON, GAJARSA, LINN, DYK, PROST, and MOORE, Circuit Judges.<br />
PER CURIAM.<br />
O R D E R<br />
This petition for writ of mandamus, having been reviewed by the Motions Panel,<br />
was thereafter referred to the circuit judges who are in regular active service and<br />
authorized to request a poll on whether to hear this matter en banc. A poll was<br />
requested, taken, and the court has decided sua sponte that the petition is appropriate<br />
for en banc consideration,<br />
IT IS ORDERED THAT:<br />
The parties are invited to address the following questions:<br />
(1) Should a party's assertion of the advice of counsel defense to willful<br />
infringement extend waiver of the attorney-client privilege to communications<br />
with that party's trial counsel See In re EchoStar Commc'n Corp., 448 F.3d<br />
1294 (Fed. Cir. 2006).<br />
(2) What is the effect of any such waiver on work-product immunity<br />
(3) Given the impact of the statutory duty of care standard announced in<br />
Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed. Cir.
1983), on the issue of waiver of attorney-client privilege, should this court<br />
reconsider the decision in Underwater Devices and the duty of care standard<br />
itself<br />
This petition will be heard en banc on the basis of the new briefs addressing,<br />
inter alia, the issues set forth above. An original and thirty copies of all briefs shall be<br />
filed, and two copies served on opposing counsel. The Petitioner shall file a brief within<br />
thirty days from the date of the filing of this order. The brief from the Respondent is due<br />
thirty days thereafter; and any reply brief from the Petitioner is due ten days thereafter.<br />
Briefs shall adhere to the type-volume limitations set forth in Federal Rule of Appellate<br />
Procedure 32 and Federal Circuit Rule 32.<br />
Motions to file an amicus brief and to file a reply brief are denied as moot. The<br />
motion to vacate the temporary stay issued by this court is denied. MAYER, Circuit<br />
Judge, would grant the motion.<br />
Briefs of amici curiae will be entertained in accordance with Federal Rule of<br />
Appellate Procedure 29 and Federal Circuit Rule 29. Scheduling of oral argument, if<br />
any, will be resolved at a later date.<br />
FOR THE COURT<br />
_January 26, 2007_<br />
Date<br />
_____/s/ Jan Horbaly________<br />
Jan Horbaly<br />
Clerk<br />
cc:<br />
Brian E. Ferguson, Esq.<br />
Debra Brown Steinberg, Esq.<br />
Alison M. Tucher, Esq.<br />
U.S.D.C. SD/NY, Clerk<br />
U.S.D.C. SD/NY, Judge<br />
M.830 2
401 F.3d 1323 Page 1<br />
401 F.3d 1323, 74 U.S.P.Q.2d 1225<br />
(Cite as: 401 F.3d 1323)<br />
Briefs and Other Related Documents<br />
United States Court of Appeals,Federal Circuit.<br />
MERCEXCHANGE, L.L.C., Plaintiff-Cross<br />
Appellant,<br />
v.<br />
eBAY, INC. and Half.Com, Inc., Defendants-<br />
Appellants.<br />
Nos. 03-1600, 03-1616.<br />
March 16, 2005.<br />
Rehearing and Rehearing En Banc Denied April 26,<br />
2005.<br />
Background: Owner of patents for method of<br />
conducting on-line sales sued auction website<br />
operators for infringement. The United States District<br />
Court for the Eastern District of Virginia, Jerome B.<br />
Friedman, J., 275 F.Supp.2d 695, found that one<br />
patent was invalid but that other two were infringed.<br />
Cross-appeals were taken.<br />
Holdings: The Court of Appeals, Bryson, Circuit<br />
Judge, held that:<br />
(1) evidence supported finding that first patent was<br />
infringed;<br />
(2) evidence did not support finding that auction site<br />
operator induced product seller's infringement of first<br />
patent;<br />
(3) second patent was invalid as anticipated;<br />
(4) fact issue existed as to whether third patent was<br />
invalid; and<br />
(5) denial of permanent injunction was abuse of<br />
discretion.<br />
Affirmed in part, reversed in part, vacated in part,<br />
and remanded.<br />
See also 271 F.Supp.2d 789.<br />
West Headnotes<br />
[1] <strong>Patent</strong>s 291 101(2)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(2) k. Construction in General.<br />
Most Cited Cases<br />
“Transaction processor,” claimed in patent for<br />
method of conducting on-line sales, did not require<br />
transference of ownership of purchased good by<br />
conveyance of title; unlike prior claim which clearly<br />
called for transfer of ownership, instant claim made<br />
no reference to transfer.<br />
[2] <strong>Patent</strong>s 291 101(2)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(2) k. Construction in General.<br />
Most Cited Cases<br />
“Transfer of ownership” step, called for in patent for<br />
method of conducting on-line sales, required only<br />
modification of ownership entry in data record of<br />
good to reflect that purchasing participant was new<br />
owner of good; transfer of legal title pursuant to<br />
Uniform Commercial Code (UCC) was not required.<br />
[3] <strong>Patent</strong>s 291 314(6)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k314 Hearing<br />
291k314(6) k. Findings and<br />
Determination. Most Cited Cases<br />
District court's Markman order is explanation to<br />
parties of reasoning behind its patent claim<br />
construction; court's analysis need not also be<br />
included in its jury instructions.<br />
[4] <strong>Patent</strong>s 291 312(5)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k312 Evidence<br />
291k312(3) Weight and Sufficiency<br />
291k312(5) k. Particular <strong>Patent</strong>s.<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
401 F.3d 1323 Page 2<br />
401 F.3d 1323, 74 U.S.P.Q.2d 1225<br />
(Cite as: 401 F.3d 1323)<br />
Most Cited Cases<br />
Evidence supported finding that online auction<br />
system infringed patent for method of conducting<br />
online sales; system transferred ownership of<br />
purchased goods through modification of data<br />
records to reflect fact that payment had been made, as<br />
called for in patent.<br />
[5] <strong>Patent</strong>s 291 312(6)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k312 Evidence<br />
291k312(3) Weight and Sufficiency<br />
291k312(6) k. Particular Matters,<br />
Sufficiency as To. Most Cited Cases<br />
Evidence supported finding that online auction<br />
system was “trusted,” within meaning of patent for<br />
method of conducting online sales; system provided<br />
escrow services, conflict resolution services,<br />
insurance, payment intermediaries, authentication<br />
services, feedback forum, and policing of system.<br />
[6] <strong>Patent</strong>s 291 324.1<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k324 Appeal<br />
291k324.1 k. In General. Most Cited<br />
Cases<br />
Fact that defendant's patent invalidity arguments at<br />
trial were based solely on obviousness did not<br />
constitute waiver of right to make invalidity<br />
argument on appeal based on anticipation;<br />
anticipation was form of obviousness. 35 U.S.C.A. §<br />
§ 102, 103.<br />
[7] <strong>Patent</strong>s 291 66(1.24)<br />
291 <strong>Patent</strong>s<br />
291II <strong>Patent</strong>ability<br />
291II(D) Anticipation<br />
291k63 Prior <strong>Patent</strong>s<br />
291k66 Operation and Effect<br />
291k66(1.24) k. Process, Method, and<br />
Apparatus Claims in General. Most Cited Cases<br />
<strong>Patent</strong> for method of conducting online sales was not<br />
anticipated by prior art patent which did not call for<br />
receipt of electronic payments, for post-sale<br />
modification of data records, or for nondealerspecific<br />
identification codes. 35 U.S.C.A. § 102.<br />
[8] <strong>Patent</strong>s 291 16.14<br />
291 <strong>Patent</strong>s<br />
291II <strong>Patent</strong>ability<br />
291II(A) Invention; Obviousness<br />
291k16.14 k. Miscellaneous Inventions.<br />
Most Cited Cases<br />
<strong>Patent</strong> for method of conducting online sales was not<br />
invalid as obvious in light of prior art patent; prior<br />
patent called for different type of user identification<br />
codes, and evidence that person of skill in the art<br />
would not have been motivated to change code types.<br />
35 U.S.C.A. § 103.<br />
[9] <strong>Patent</strong>s 291 259(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(A) What Constitutes Infringement<br />
291k259 Contributory Infringement;<br />
Inducement<br />
291k259(1) k. In General. Most Cited<br />
Cases<br />
To prove intent element of claim for inducement of<br />
patent infringement, there must be evidence that<br />
alleged inducer had knowledge of infringing acts. 35<br />
U.S.C.A. § 271(b).<br />
[10] <strong>Patent</strong>s 291 312(8)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k312 Evidence<br />
291k312(3) Weight and Sufficiency<br />
291k312(8) k. Participation, Intent,<br />
and Contributory Infringement. Most Cited Cases<br />
Evidence did not support finding that operator of<br />
website for online auctions induced seller's<br />
infringement of patent for method of presenting data<br />
records of goods for sale; though operator had<br />
financial interest in seller and encouraged it to post<br />
goods for sale on website, there was no evidence that<br />
operator knew of or induced seller's use of patented<br />
method. 35 U.S.C.A. § 271(b).<br />
[11] <strong>Patent</strong>s 291 101(2)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(2) k. Construction in General.<br />
Most Cited Cases<br />
“Electronic markets” to be searched, in patent for<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
401 F.3d 1323 Page 3<br />
401 F.3d 1323, 74 U.S.P.Q.2d 1225<br />
(Cite as: 401 F.3d 1323)<br />
method of locating goods online, were trusted<br />
networks or systems where participants could buy,<br />
sell, search, or browse goods online; searched places<br />
did not have to be able to perform all four functions<br />
in order to constitute relevant “markets.”<br />
[12] <strong>Patent</strong>s 291 70<br />
291 <strong>Patent</strong>s<br />
291II <strong>Patent</strong>ability<br />
291II(D) Anticipation<br />
291k67 Prior Description in Printed<br />
Publication<br />
291k70 k. Operation and Effect. Most<br />
Cited Cases<br />
<strong>Patent</strong> for method of searching multiple electronic<br />
markets in order to locate goods online was invalid as<br />
anticipated by prior art article for searching multiple<br />
online catalogs; article disclosed each claimed<br />
limitation and was enabling. 35 U.S.C.A. § 102.<br />
[13] <strong>Patent</strong>s 291 101(3)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(3) k. Limitations in General. Most<br />
Cited Cases<br />
Requirement in patent for method of locating goods<br />
online, that “electronic markets” and “market<br />
apparatus” be used, did not exclude person-to-person<br />
systems.<br />
[14] <strong>Patent</strong>s 291 323.2(3)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k323 Final Judgment or Decree<br />
291k323.2 Summary Judgment<br />
291k323.2(3) k. Particular Cases.<br />
Most Cited Cases<br />
Issue of material fact as to whether “debiting seller's<br />
account” limitation in patent for method of<br />
conducting on-line auctions was adequately<br />
supported by written description precluded summary<br />
judgment of invalidity. 35 U.S.C.A. § 112, par. 1.<br />
[15] Federal Courts 170B 932.1<br />
170B Federal Courts<br />
170BVIII Courts of Appeals<br />
170BVIII(L) Determination and Disposition of<br />
Cause<br />
170Bk932 Reversal or Vacation of<br />
Judgment in General<br />
170Bk932.1 k. In General. Most Cited<br />
Cases<br />
Federal Courts 170B 943.1<br />
170B Federal Courts<br />
170BVIII Courts of Appeals<br />
170BVIII(L) Determination and Disposition of<br />
Cause<br />
170Bk943 Ordering New Trial or Other<br />
Proceeding<br />
170Bk943.1 k. In General. Most Cited<br />
Cases<br />
Appellate court, when vacating judgment and<br />
remanding, has jurisdiction to address issues that<br />
might arise on remand. 28 U.S.C.A. § 2106.<br />
[16] <strong>Patent</strong>s 291 101(2)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(2) k. Construction in General.<br />
Most Cited Cases<br />
“Auction,” referred to in patent for method of<br />
conducting on-line auctions, was process over trusted<br />
network, or with trusted intermediary.<br />
[17] <strong>Patent</strong>s 291 101(2)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(2) k. Construction in General.<br />
Most Cited Cases<br />
“Seller's account,” called for in patent for method of<br />
conducting on-line auctions, had to be based at least<br />
on seller's identity and financial instrument<br />
associated with seller; claim's use of comma to<br />
separate call for account from list of its requirements<br />
did not make requirements merely optional.<br />
[18] <strong>Patent</strong>s 291 165(4)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k165 Operation and Effect of Claims in<br />
General<br />
291k165(4) k. Reading Limitations or<br />
Elements Into Claims, or Disregarding Limitations or<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
401 F.3d 1323 Page 4<br />
401 F.3d 1323, 74 U.S.P.Q.2d 1225<br />
(Cite as: 401 F.3d 1323)<br />
Elements. Most Cited Cases<br />
Use of term “automated process” in preamble to<br />
patent claim for method of conducting on-line<br />
auctions did not mean that all steps in claim had to be<br />
performed automatically.<br />
[19] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
Mere fact that patent was business-method patent did<br />
not justify denial of permanent injunction following<br />
determination of validity and infringement.<br />
[20] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
Court's concern about likelihood of continuing<br />
disputes over whether patent infringer's subsequent<br />
design-around attempts also infringed patent did not<br />
justify denial of permanent injunction following<br />
determination of validity and infringement.<br />
[21] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
Prevailing patent infringement plaintiff's statements<br />
regarding its willingness to license patents did not<br />
justify denial of permanent injunction.<br />
[22] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
<strong>Patent</strong> infringement plaintiff's failure to move for<br />
preliminary injunction did not justify denial of<br />
permanent injunction following determination of<br />
validity and infringement.<br />
<strong>Patent</strong>s 291 328(2)<br />
291 <strong>Patent</strong>s<br />
291XIII Decisions on the Validity, Construction,<br />
and Infringement of Particular <strong>Patent</strong>s<br />
291k328 <strong>Patent</strong>s Enumerated<br />
291k328(2) k. Original Utility. Most Cited<br />
Cases<br />
5,664,111. Cited as Prior Art.<br />
<strong>Patent</strong>s 291 328(2)<br />
291 <strong>Patent</strong>s<br />
291XIII Decisions on the Validity, Construction,<br />
and Infringement of Particular <strong>Patent</strong>s<br />
291k328 <strong>Patent</strong>s Enumerated<br />
291k328(2) k. Original Utility. Most Cited<br />
Cases<br />
5,845,265. Valid and Infringed.<br />
<strong>Patent</strong>s 291 328(2)<br />
291 <strong>Patent</strong>s<br />
291XIII Decisions on the Validity, Construction,<br />
and Infringement of Particular <strong>Patent</strong>s<br />
291k328 <strong>Patent</strong>s Enumerated<br />
291k328(2) k. Original Utility. Most Cited<br />
Cases<br />
6,085,176. Invalid.<br />
<strong>Patent</strong>s 291 328(2)<br />
291 <strong>Patent</strong>s<br />
291XIII Decisions on the Validity, Construction,<br />
and Infringement of Particular <strong>Patent</strong>s<br />
291k328 <strong>Patent</strong>s Enumerated<br />
291k328(2) k. Original Utility. Most Cited<br />
Cases<br />
6,202,051. Cited.<br />
*1325 Scott L. Robertson, Hunton & Williams LLP,<br />
of Washington, DC, argued for plaintiff-cross<br />
appellant. With him on the brief were Jennifer A.<br />
Albert and Brian M. Buroker. Also on the brief were<br />
Gregory N. Stillman, of Norfolk, Virginia, and David<br />
M. Young, of McLean, Virginia.<br />
Jeffrey G. Randall, Skadden, Arps, Slate, Meagher &<br />
Flom LLP, of Palo Alto, California, and Donald R.<br />
Dunner, Finnegan, Henderson, Farabow, Garrett &<br />
Dunner, L.L.P., of Washington, DC, argued for<br />
defendants-appellants. On the brief were Timothy S.<br />
Teter and Lori Ploeger, Cooley Godward LLP, of<br />
Palo Alto, California. Also on the brief was Allan<br />
M. Soobert, Skadden, Arps, Slate, Meagher & Flom<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
401 F.3d 1323 Page 5<br />
401 F.3d 1323, 74 U.S.P.Q.2d 1225<br />
(Cite as: 401 F.3d 1323)<br />
LLP, of Washington, DC.<br />
Before MICHEL, FN* Chief Judge, CLEVENGER,<br />
and BRYSON, Circuit Judges.<br />
FN* <strong>Paul</strong> R. Michel assumed the position of<br />
Chief Judge on December 25, 2004.<br />
BRYSON, Circuit Judge.<br />
MercExchange, L.L.C., is the assignee of three<br />
patents, U.S. <strong>Patent</strong> Nos. 5,845,265 (“the '265<br />
patent”), 6,085,176 (“the '176 patent”), and 6,202,051<br />
(“the '051 patent”). MercExchange filed suit against<br />
eBay, Inc.; Half.com, Inc.; and ReturnBuy, Inc., in<br />
the United States District Court for the Eastern<br />
District of Virginia, alleging willful infringement of<br />
the '265 patent by all three defendants, willful<br />
infringement of the '176 patent by eBay and<br />
Half.com, and willful infringement of the '051 patent<br />
by eBay.<br />
eBay owns and operates a website on the Internet that<br />
allows buyers and sellers to search for goods and to<br />
purchase them by participating in live auctions or by<br />
buying them at a fixed price. At issue in this case is<br />
the fixed-price purchasing feature of eBay's website,<br />
which allows customers to purchase items that are<br />
listed on eBay's website for a fixed, listed price.<br />
Half.com, a wholly owned subsidiary of eBay, owns<br />
and operates an Internet website that allows users to<br />
search for goods posted on other Internet websites<br />
and to purchase those goods. At the time this action<br />
was brought, ReturnBuy owned and operated an<br />
Internet website that was hosted by the *1326 eBay<br />
website. Customers interested in purchasing goods<br />
from ReturnBuy would be directed from the<br />
ReturnBuy website to the eBay website, where items<br />
available for sale by ReturnBuy were displayed in an<br />
eBay listing.<br />
Prior to trial, ReturnBuy filed for bankruptcy and<br />
entered into a settlement agreement with<br />
MercExchange. On motions for summary judgment<br />
by the other defendants, the district court granted in<br />
part and denied in part the motions for summary<br />
judgment that the claims of the '051 patent were<br />
invalid for an inadequate written description. The<br />
remainder of the case went to trial before a jury. At<br />
the conclusion of the trial, the jury found that eBay<br />
had willfully infringed claims 8, 10-11, 13-15, 17-18,<br />
20-22, and 26 of the '265 patent and had induced<br />
ReturnBuy to infringe claims 1, 4, 7, and 23 of the<br />
'265 patent; that Half.com had willfully infringed<br />
claims 8, 10, 11, 13, 15, 17-18, 20, 22, and 26-29 of<br />
the '265 patent and claims 1, 5-6, 29, 31-32, and 34-<br />
39 of the '176 patent; and that neither the '265 patent<br />
nor the '176 patent was invalid. With respect to<br />
damages, the jury found eBay liable for $ 10.5<br />
million for infringing the '265 patent and $ 5.5<br />
million for inducing ReturnBuy to infringe the '265<br />
patent. The jury also held Half.com liable for $ 19<br />
million for infringing the '176 patent and the '265<br />
patent.<br />
Following the verdict, eBay and Half.com moved for<br />
judgment as a matter of law (“JMOL”) that the<br />
asserted claims of the '265 patent were not infringed<br />
and were invalid. In the alternative, eBay and<br />
Half.com moved for a new trial on the '265 patent.<br />
Half.com moved for JMOL that the asserted claims<br />
of the '176 patent were not infringed and were<br />
invalid. In the alternative, Half.com moved for a<br />
new trial on the '176 patent. In addition, eBay<br />
moved to set aside the $5.5 million award for<br />
inducing ReturnBuy to infringe the '265 patent. The<br />
district court denied the defendants' motions<br />
regarding infringement and validity, but granted<br />
eBay's motion to set aside the damages award for<br />
inducement of infringement. The court also denied<br />
MercExchange's motion for a permanent injunction,<br />
for enhanced damages, and for attorney fees.<br />
The defendants appeal the denial of their motions for<br />
JMOL and for a new trial on the '265 and '176<br />
patents. Because substantial evidence supports the<br />
jury's verdict regarding infringement and validity of<br />
the '265 patent, we affirm those aspects of the<br />
judgment. Because there is no substantial evidence to<br />
support the jury's verdict that eBay induced<br />
ReturnBuy to infringe the '265 patent, we reverse that<br />
aspect of the judgment. We also hold that the claims<br />
of the '176 patent are invalid for anticipation, and we<br />
therefore reverse the judgment in that regard and<br />
direct entry of judgment for Half.com on the '176<br />
patent.<br />
MercExchange cross-appeals, seeking reversal of the<br />
summary judgment of invalidity of the '051 patent<br />
and reversal of the district court's denial of a<br />
permanent injunction, enhanced damages, and<br />
attorney fees. MercExchange also cross-appeals the<br />
district court's order vacating the award of damages<br />
for inducement of infringement. Because the district<br />
court resolved a dispute of material fact on summary<br />
judgment and improperly denied a permanent<br />
injunction, we reverse the denial of the permanent<br />
injunction, vacate the summary judgment order, and<br />
remand for further proceedings. However, we hold<br />
that the district court did not abuse its discretion in<br />
denying enhanced damages and attorney fees.<br />
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I<br />
A<br />
We turn first to the district court's denial of the<br />
defendants' motion for JMOL of *1327<br />
noninfringement with respect to the '265 patent. The<br />
'265 patent pertains to a system for selling goods<br />
through an “electronic network of consignment<br />
stores.” '265 patent, col. 1, line 8. To participate in<br />
the electronic network, a consignment store must<br />
obtain a “consignment node,” which uses a computer<br />
to upload and save digital images and written<br />
information about goods to be sold over the network.<br />
A prospective buyer can electronically browse and<br />
search for goods stored in the databases of<br />
consignment nodes in the electronic network. After<br />
browsing and searching, the prospective buyer can<br />
purchase any good listed on the electronic network.<br />
Upon purchasing the good, the buyer can decide<br />
either to have the good shipped or to resell the good<br />
to another buyer over the electronic network. The<br />
patent refers to the decision to buy and resell as<br />
“speculating,” because the system does not require<br />
the buyer to take possession of the good before<br />
reselling it and thereby allows the buyer to resell at a<br />
price that does not take into consideration the delays<br />
and costs associated with delivery.<br />
The asserted claims each include a “transaction<br />
processor” that is used to complete the financial<br />
transaction accompanying the sale of a good. The<br />
transaction processor limitation of claim 8 reads as<br />
follows:<br />
a transaction processor operably connected to said<br />
wide area communication network and said storage<br />
device, said transaction processor adapted to receive<br />
a purchase request and payment means from said<br />
participant, clear said purchase request and payment<br />
means and if said payment means clears then transfer<br />
the ownership of said good for sale by modifying said<br />
data record of said good for sale to reflect the new<br />
ownership of said good for sale by said participant.<br />
The defendants contend that the district court erred in<br />
denying their motion for a JMOL of noninfringement<br />
because there was no substantial evidence from<br />
which a reasonable jury could conclude that eBay's<br />
system “transfer[red] the ownership” of a good for<br />
sale, as required by the transaction processor<br />
limitation.<br />
[1] As an initial matter, the defendants' arguments do<br />
not apply to claim 26 and dependent claims 27-29.<br />
The transaction processor limitation of claim 26 reads<br />
as follows:<br />
a transaction processor operably connected to said<br />
wide area communication network and said storage<br />
device, said transaction processor adapted to receive<br />
a purchase request and electronic payment from said<br />
participant, transfer said purchase request to said<br />
posting terminal, and verify electronic payment<br />
information from said participant and if said<br />
electronic payment verifies then notify owner of said<br />
good for sale by modifying said data record indexed<br />
to said data record for sale to reflect said purchase<br />
request of said good for sale by said participant.<br />
This claim language differs from the language of<br />
claim 8 in a significant way. While the transaction<br />
processor portion of claim 8 culminates in a step<br />
requiring the transaction processor to “transfer the<br />
ownership of said good for sale,” the transaction<br />
processor portion of claim 26 culminates in a step<br />
requiring the transaction processor to “notify [the]<br />
owner of said good for sale ....” Claim 26 nowhere<br />
requires transfer of ownership of a good and does not<br />
even contain the term “ownership” or the term<br />
“transfer.” The defendants argue that the transaction<br />
processor of claim 26 must be construed as limited to<br />
a transaction processor that transfers ownership by<br />
conveyance of title, but nothing in claim 26 supports<br />
that argument, and *1328 we reject it. Accordingly,<br />
we hold that the district court did not err in denying<br />
defendants' motion for JMOL with regard to<br />
noninfringement of claims 26-29. The remainder of<br />
our analysis is focused on the construction of claim 8<br />
and its related claims.<br />
[2] In its instructions to the jury, the district court<br />
provided the following interpretation of the “transfer<br />
the ownership” limitation:<br />
If the payment made by a participant for a good for<br />
sale clears, then the legal ownership is transferred by<br />
modifying the ownership entry in the data record of<br />
the good to reflect that the purchasing participant is<br />
the new owner of the good.<br />
The defendants do not challenge the accuracy of that<br />
instruction, but they assert that the district court erred<br />
by failing to give two additional instructions. First,<br />
they contend that because the transaction processor<br />
limitation transfers the ownership of a “good for<br />
sale,” the transaction processor must be capable of<br />
transferring legal title, and that the district court<br />
should have instructed the jury on the requirements<br />
for title transfer under the Uniform Commercial Code<br />
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(“UCC”). Second, they contend that the district<br />
court failed to include in its jury instructions a<br />
statement from the court's pretrial claim construction<br />
order (the “Markman order”) that transfer of<br />
ownership is “not limited to merely modifying the<br />
record-legal ownership must be transferred.” The<br />
defendants argue that without that statement the jury<br />
was not informed of the requirement that legal title to<br />
the good must pass to the purchaser.<br />
In its post-trial order, the district court addressed and<br />
rejected both of those arguments. The court ruled<br />
that the defendants were not entitled to an instruction<br />
on title transfer under the UCC, because the transfer<br />
of ownership limitation did not require the transfer of<br />
legal title pursuant to the UCC. With respect to the<br />
statements from the court's Markman order, the court<br />
stated that it had already provided the jury with a<br />
sufficient claim construction and was under no<br />
obligation to include additional language that it used<br />
in its claim construction opinion.<br />
We uphold the district court's interpretation of the<br />
transfer of ownership limitation and its decision not<br />
to provide the jury with additional instructions<br />
regarding that limitation. The district court's<br />
interpretation is consistent with the language of the<br />
claims and the specification of the '265 patent.<br />
Claim 8 states that a transaction processor<br />
accomplishes the “transfer [of] ownership of said<br />
good for sale by modifying said data record of said<br />
good for sale to reflect the new ownership of said<br />
good for sale by said participant.” '265 patent, col.<br />
21, II. 51-54. The specification contains similar<br />
language, stating that the consignment node<br />
“transfers legal ownership of the good by changing<br />
the ownership entry in the data record in the<br />
consignment node of the good.” Id., col. 12, II. 46-<br />
48.<br />
The claim and specification do not suggest that the<br />
modification of a data record in isolation is sufficient<br />
to transfer ownership under the patent. Rather, the<br />
specification makes clear that the modification of the<br />
data record reflects that a buyer has paid for the good<br />
and that it is the payment for the good, accompanied<br />
by the data record modification, that accomplishes<br />
the transfer of legal ownership. '265 patent, col. 19,<br />
II. 11-13.<br />
It is also important to understand that the patented<br />
system accomplishes a transfer of ownership in the<br />
context of a “trusted network,” in which the owner of<br />
the patented system “may police the network to give<br />
quality control, detect fraud and revoke the users,”<br />
id., col. 4, II. 56-57, so *1329 that the network<br />
maintains a certain “quality and performance<br />
structure,” id., col. 4, line 60, to guarantee payment<br />
and delivery of the good. The specification indicates<br />
that the “trusted network” of the invention is part of<br />
what allows ownership to pass upon modification of<br />
the data record. In light of the specification, we<br />
agree with the district court that within the context of<br />
the patent, transferring legal ownership is<br />
accomplished once the data record is modified.<br />
The defendants argue that the modification of the<br />
data record by itself is not sufficient to transfer<br />
ownership, but rather that a “legal predicate” such as<br />
the UCC must be satisfied in order for the<br />
modification of the data record to have the effect of<br />
transferring ownership. In so arguing, the<br />
defendants rely on the use of the term “legal title” in<br />
the specification. The use of that term, however,<br />
does not mean that transfer of ownership must be<br />
equated with a formal transfer of title. Rather, the<br />
specification treats the term “legal title” as<br />
synonymous with the general concept of “ownership”<br />
as used in the patent. See, e.g., '265 patent, col. 19,<br />
II. 11-13 (“[W]hen a bona fide purchase price is<br />
tendered by a participant ... or another retailer ... the<br />
legal title to a good as represented by the record will<br />
transfer to the buyer with an immediate or nearly<br />
immediate finality to the transaction.”). The use of<br />
the term “legal title” in the specification therefore<br />
does not add any legal requirements to the transfer of<br />
ownership referred to in the claims, and does not<br />
negate the statements in the specification and in the<br />
claim language that the transfer of ownership is<br />
accomplished upon the modification of the data and<br />
the clearing of payment in a trusted network.<br />
[3] We also agree with the district court that it was<br />
not necessary for the court to include excerpts from<br />
its Markman order in the jury instructions. A district<br />
court's Markman order is an explanation to the parties<br />
of the reasoning behind its claim construction. The<br />
court's analysis need not be part of the jury<br />
instructions. The defendants focus on the district<br />
court's statement in its Markman order that transfer of<br />
ownership is “not limited to merely modifying the<br />
record-legal ownership must be transferred,” and they<br />
assert that the court's failure to convey the substance<br />
of that statement prejudiced them because it left room<br />
for MercExchange to assert in its closing argument<br />
that “[t]here is no requirement that legal title in that<br />
formal sense be transferred.” The claims, however,<br />
do not require that title be transferred pursuant to any<br />
particular steps or legal formalities, and the district<br />
court's statement in its Markman order does not say<br />
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so. It was therefore not error for the court to omit<br />
the requested instruction.<br />
[4][5] In light of the district court's claim<br />
construction, we find that MercExchange introduced<br />
sufficient evidence to permit the jury to find that<br />
eBay's system infringed the '265 patent.<br />
MercExchange's expert, Dr. Alfred Weaver, testified<br />
that “eBay has to transfer ownership by modifying<br />
the data record.” He also made clear that the<br />
modification of the data record reflected the fact that<br />
payment had been made, as he stated that “when [ ]<br />
payment comes through, [eBay and Half.com] are<br />
authorized to transfer ownership by modifying [the]<br />
data record.” Moreover, while eBay asserts that its<br />
system is not “trusted,” we agree with the district<br />
court's statement in its post-trial order that there was<br />
substantial evidence from which the jury could find<br />
that eBay's system was trusted, given the evidence in<br />
the record that the system provided “escrow services,<br />
conflict resolution services, insurance, payment<br />
intermediaries, authentication*1330 services,<br />
feedback forum, and the policing of the system.”<br />
We therefore affirm the district court's denial of the<br />
defendants' motion for JMOL of noninfringement of<br />
the '265 patent.<br />
B<br />
In reviewing the defendants' motion to invalidate the<br />
'265 patent as a matter of law, the district court<br />
focused exclusively on obviousness and found that<br />
MercExchange “did indeed attack the merits of the<br />
defendants' prior art references and the failure of the<br />
defendants' witnesses to show how the prior art<br />
invalidated each of the claims of the '265 patent,<br />
despite the fact that the defendants argue otherwise.”<br />
On appeal, the defendants argue that a reasonable<br />
jury would necessarily have found the asserted claims<br />
to be invalid because they are anticipated or rendered<br />
obvious by a prior art reference, U.S. <strong>Patent</strong> No.<br />
5,664,111 (“the '111 patent”). The '111 patent<br />
pertains to a system for art dealers to sell artwork by<br />
using a network of computers. The system enables<br />
users to store and retrieve images and data pertaining<br />
to the artwork and to purchase artwork corresponding<br />
to the images.<br />
[6] As an initial matter, MercExchange argues that<br />
because the defendants' invalidity arguments were<br />
based solely on obviousness, they have waived their<br />
right to make an invalidity argument on appeal based<br />
on anticipation. We disagree. Because<br />
“anticipation is the epitome of obviousness,” Connell<br />
v. Sears, Roebuck & Co., 722 F.2d 1542, 1548<br />
(Fed.Cir.1983), the defendants' obviousness<br />
arguments preserved their right to argue invalidity<br />
based on anticipation, Johns Hopkins Univ. v.<br />
CellPro, Inc., 152 F.3d 1342, 1357 n. 21<br />
(Fed.Cir.1998).<br />
[7] On the merits, the defendants argue that the '111<br />
patent anticipates all of the asserted claims of the '265<br />
patent and that MercExchange's expert, Dr. Weaver,<br />
failed to distinguish the system of the '111 patent<br />
from the system of the '265 patent. First, they assert<br />
that Dr. Weaver conceded on cross-examination that<br />
the '111 patent discloses the same transaction<br />
processor that is claimed in the '265 patent, because<br />
he admitted that the <strong>Patent</strong> and Trademark Office<br />
(“PTO”) found that the '111 patent discloses a<br />
transaction processor and he did not contest the<br />
PTO's finding on that issue. However, while Dr.<br />
Weaver agreed that the PTO “would understand that<br />
[the '111 patent] discloses, among other things,<br />
transferring an ownership interest in an item,” that<br />
testimony does not contradict his testimony that<br />
nothing in the '111 patent described a modification of<br />
the data record subsequent to payment verification.<br />
Thus, Dr. Weaver did not concede that the '111 patent<br />
disclosed the same transaction processor that is<br />
claimed in the '265 patent.<br />
The defendants fail to address another distinction<br />
regarding the transaction processor limitation. In the<br />
'265 patent, a transaction processor is designed to<br />
receive payments by “entering a credit card number<br />
and expiration date or other forms of electronic<br />
payment.” '265 patent, col. 5, II. 6-8. The system<br />
claimed by the '111 patent, however, does not receive<br />
payments electronically. Rather, the system<br />
“requests that the buying dealer wire transfer funds to<br />
pay for the purchased work.” '111 patent, col. 14, II.<br />
62-64. Instead of being able to complete a<br />
transaction on the electronic network, a buyer using<br />
the invention of the '111 patent must temporarily<br />
leave the system to make a payment before the<br />
transaction can be completed.<br />
The defendants also contend that Dr. Weaver failed<br />
to distinguish the '265 patent from the '111 patent<br />
with regard to the posting terminal apparatus<br />
limitation and *1331 in particular the use of an<br />
identification code to prevent certain dealers from<br />
logging on to the system. The defendants argue that<br />
Dr. Weaver conceded that the '111 patent discloses<br />
the same identification code as the '265 patent. They<br />
cite Dr. Weaver's testimony on cross-examination, in<br />
which he stated that the system claimed by the '111<br />
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patent “used the terminal identification code to limit<br />
the access of certain dealers to certain pieces of art.”<br />
Dr. Weaver stated on redirect examination, however,<br />
that the identification code used in the '111 system is<br />
not the same as the identification code used for<br />
terminal authorization in the posting terminal<br />
apparatus claimed in the '265 patent: “All that's<br />
happening in [the '111 patent] is that a person is<br />
identifying himself with a code. And in my mind<br />
that's not at all consistent with the way the Court<br />
defined the posting terminal apparatus code,” i.e., as<br />
a code that “identifies the hardware and/or software<br />
of the posting terminal apparatus.” From that<br />
testimony, a reasonable jury could infer that while the<br />
identification code in the '111 patent is directed to<br />
preventing access by a specific dealer, the<br />
identification code in the '265 patent is not dealerspecific,<br />
but serves instead to screen out terminal<br />
apparatuses that lack particular technical<br />
requirements. The evidence thus provided a<br />
sufficient basis for the jury to conclude that the '111<br />
patent did not anticipate the asserted claims of the<br />
'265 patent.<br />
[8] We also reject the defendants' argument that the<br />
'111 patent renders the asserted claims of the '265<br />
patent obvious. Dr. Weaver testified that the<br />
patented invention differs from the '111 patent in<br />
both structure and method and that a person of<br />
ordinary skill in the art would not be motivated to<br />
modify the system covered by the '111 patent to<br />
create the system claimed in the '265 patent. For<br />
example, with regard to the posting terminal<br />
apparatus of the '265 patent, Dr. Weaver testified that<br />
one of ordinary skill in the art would not be<br />
motivated “to change or modify the dealer ID code in<br />
[the '111 patent system] to conform to the user ID<br />
protocols of the '265 patent's posting terminal<br />
apparatus,” as the two are “dramatically different<br />
operations” that are used for different purposes. In<br />
light of Dr. Weaver's testimony, we agree with the<br />
district court that there was substantial evidence to<br />
support the jury's finding of nonobviousness.<br />
C<br />
The defendants contend that they are entitled to<br />
JMOL on the theory that eBay was not shown to have<br />
induced ReturnBuy to infringe four of the claims of<br />
the '265 patent. Claim 1 is representative of three of<br />
the asserted claims-claims 1, 4, and 7. It provides:<br />
1. A system for presenting a data record of a good<br />
for sale to a market for goods, said market for goods<br />
having an interface to a wide area communication<br />
network for presenting and offering goods for sale to<br />
a purchaser, a payment clearing means for processing<br />
a purchase request from said purchaser, a database<br />
means for storing and tracking said data record of<br />
said good for sale, a communications means for<br />
communicating with said system to accept said data<br />
record of said good and a payment means for<br />
transferring funds to a user of said system, said<br />
system comprising:<br />
a digital image means for creating a digital image of<br />
a good for sale;<br />
a user interface for receiving textual information<br />
from a user;<br />
a bar code scanner;<br />
a bar code printer;<br />
a storage device;<br />
a communications means for communicating with the<br />
market; and<br />
*1332 a computer locally connected to said digital<br />
image means, said user interface, said bar code<br />
scanner, said bar code printer, said storage device<br />
digital image of said good for sale from said digital<br />
image means, generate a data record of said good for<br />
sale, incorporate said digital image of said good for<br />
sale into said data record, receive a textual<br />
description of said good for sale from said user<br />
interface, store said data record on said storage<br />
device, transfer said data record to the market for<br />
goods via said communications means and receive a<br />
tracking number for said good for sale from the<br />
market for goods via said communications means,<br />
store said tracking number from the market for goods<br />
in said data record on said storage device and printing<br />
a bar code from said tracking number on said bar<br />
code printer.<br />
The only other asserted claim, claim 23, differs from<br />
claim 1 in that claim 23 recites a “digital camera for<br />
creating an image,” instead of a “digital image means<br />
for creating a digital image,” and it recites a “printer<br />
for printing said digital image of said good for sale.”<br />
[9] According to 35 U.S.C. § 271(b), “whoever<br />
actively induces infringement of a patent shall be<br />
liable as an infringer.” We have construed that<br />
statute to require proof of intent, although there is a<br />
“lack of clarity concerning whether the required<br />
intent must be merely to induce the specific acts [of<br />
infringement] or additionally to cause an<br />
infringement.” Insituform Techs., Inc. v. CAT<br />
Contracting, Inc., 385 F.3d 1360, 1378<br />
(Fed.Cir.2004), citing Manville Sales Corp. v.<br />
Paramount Sys., Inc., 917 F.2d 544, 553<br />
(Fed.Cir.1990), and Hewlett-Packard Co. v. Bausch<br />
& Lomb, Inc., 909 F.2d 1464, 1469 (Fed.Cir.1990).<br />
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Nevertheless, a patentee must be able to demonstrate<br />
at least that the alleged inducer had knowledge of the<br />
infringing acts in order to demonstrate either level of<br />
intent.<br />
[10] MercExchange asserts that the evidence was<br />
sufficient for the jury to find that eBay had induced<br />
infringement based on the testimony of ReturnBuy's<br />
former CEO and its former CTO. MercExchange<br />
points to testimony that eBay had invested $2 million<br />
in ReturnBuy and had an “observer” on ReturnBuy's<br />
board of directors; that eBay granted ReturnBuy the<br />
right to post goods in volume on the eBay system;<br />
that eBay was the “primary venue” for ReturnBuy's<br />
sales; and that eBay supplied engineers to work with<br />
ReturnBuy to facilitate the posting of goods for sale<br />
through eBay. That evidence, however, does not<br />
establish that eBay induced ReturnBuy to infringe the<br />
asserted claims.<br />
First, the testimony regarding eBay's investment in<br />
ReturnBuy's business and its presence on<br />
ReturnBuy's board of directors does not demonstrate<br />
an intent to induce infringement, or even show that<br />
eBay had knowledge of any acts of infringement by<br />
ReturnBuy. Rather, investment and board presence<br />
merely indicate that there was a business relationship<br />
between the two companies and that eBay had a<br />
financial interest in ReturnBuy's business.<br />
Other testimony presented by ReturnBuy's CEO and<br />
its CTO demonstrates, at best, that eBay encouraged<br />
ReturnBuy to post goods for sale on eBay's website.<br />
Posting goods for sale, however, is relevant to only<br />
one limitation of the claims, i.e., “a communications<br />
means for communicating with the market.” There<br />
is no testimony or other record evidence that eBay<br />
intended to induce ReturnBuy to incorporate the<br />
other limitations of the asserted claims. For<br />
example, claim 1 requires the use of a bar code<br />
scanner and a bar code printer. The specification<br />
explains and the record shows that the bar *1333<br />
code scanner and printer are used for tracking goods.<br />
There is nothing in the record to show that eBay had<br />
any intention to induce ReturnBuy to use bar code<br />
scanners and printers to keep track of its inventory.<br />
Likewise, claim 23 contains limitations requiring the<br />
use of a digital camera and printer, but there is<br />
nothing in the record to demonstrate that eBay<br />
intended to induce ReturnBuy to use those devices to<br />
create the digital image used for posting. While<br />
eBay required ReturnBuy to provide a digital image<br />
and an accompanying data record for the goods that<br />
ReturnBuy wanted to sell on its website, nothing in<br />
the record shows that eBay induced ReturnBuy to use<br />
a digital camera or a printer to create either the digital<br />
image or the accompanying data record, since digital<br />
images may be created by other means, such as by<br />
scanning developed photographs. Therefore, the<br />
evidence is insufficient to demonstrate that eBay<br />
intended to induce ReturnBuy to infringe claim 23.<br />
Accordingly, we reverse the portion of the judgment<br />
holding eBay liable for inducing ReturnBuy to<br />
infringe the '265 patent. In light of our disposition of<br />
that issue, it is unnecessary for us to address<br />
MercExchange's argument that the district court erred<br />
when it vacated the jury's award of damages on the<br />
inducement claim as duplicative.<br />
II<br />
We turn next to issues pertaining to the '176 patent.<br />
Each of the asserted claims of the '176 patent recites<br />
a method for searching “a plurality of electronic<br />
markets” to locate an item. That method uses a<br />
network of computers to accomplish each search.<br />
One computer receives and processes a search<br />
request from a participant and transmits that request<br />
to other computers through a software search agent.<br />
After search results are obtained, they are sent back<br />
to the participant's computer.<br />
Following trial, the district court denied Half.com's<br />
motion for JMOL that the '176 patent was not<br />
infringed and is invalid. We reverse that ruling.<br />
Because we base our reversal on invalidity, we need<br />
not reach the issue of infringement.<br />
A<br />
[11] Half.com's invalidity argument turns on the<br />
construction of the claim term “electronic market.”<br />
At trial, the district court instructed the jury that the<br />
term electronic market means a “trusted network or<br />
system where participants can buy, sell, search or<br />
browse goods online.” Half.com asserts that the<br />
district court's construction of electronic market<br />
requires that each of the searched websites be capable<br />
of performing four functions: buying, selling,<br />
searching, and browsing. As the basis for its<br />
interpretation of the district court's construction of<br />
that term, Half.com relies heavily on the use of the<br />
word “and” to connect the four functions in a<br />
statement from the district court's Markman order, in<br />
which the court said, “Based on the inventor's clear<br />
intent to allow users to buy, sell, search and browse<br />
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for items in the electronic market, the court finds that<br />
the completion of a transaction between buyer and<br />
seller is not required.”<br />
In its post-trial order, the district court rejected<br />
Half.com's interpretation of the court's claim<br />
construction. The court stated that “[t]here was<br />
nothing in [the] claim construction that required the<br />
electronic market to do all four functions cited.”<br />
We agree with the district court that the patent does<br />
not require the electronic market to perform all four<br />
functions. The '176 patent is designed in part to<br />
provide a system that allows participants to speculate,<br />
i.e., to buy an item and then promptly *1334 sell it at<br />
a higher price. That is the purpose to which<br />
Half.com alludes in contending that the patent<br />
requires the electronic market to be able to handle not<br />
only buying but also selling. The specification<br />
makes clear, however, that speculation is not the only<br />
use for the system, and that there are other purposes<br />
for the system in the context of “the two-tiered<br />
market of dealer-to-dealer and retail markets. ” '176<br />
patent, col. 16, II. 28-29. One of the main purposes<br />
of the patented system is to create a double-tiered<br />
market for goods, “where the first tier is a retail price<br />
and the second tier is a wholesale or dealer to dealer<br />
price [,] and an authorized dealer has pre-approved<br />
access to the dealer-to-dealer price and may charge<br />
and display the retail price to a local store customer.”<br />
Id., col. 1, II. 49-51. The specification provides that<br />
“[t]he price and reserve price fields may be used to<br />
structure the two-tiered market of dealer-to-dealer<br />
and retail markets.” Id., col. 16, II. 27-29. It further<br />
provides that “[a] dealer may be provided with<br />
special logon identifications and passwords to view<br />
the reserve price ... and reserve price indicator” that<br />
is not accessible to retail purchasers. Id., col. 16, II.<br />
31-33. However, if a retail dealer purchases an item,<br />
he may choose to sell to other retail dealers or to<br />
retail customers. In that situation, the retail dealer<br />
may enter a retail price and a wholesale price into the<br />
system. Id., col. 16, II. 40-41. The retail price may<br />
then be displayed to the retail customer. Id., col. 16,<br />
II. 41-42.<br />
Importantly, when a retail customer decides to<br />
participate in the system, the retail customer, after<br />
browsing and searching, has only the option of<br />
purchasing goods. The customer is not allowed to<br />
sell goods to the retail dealer. That is, while dealers<br />
are able to act as participants in the dealer-to-dealer<br />
market by buying from and selling to other dealers,<br />
customers in the retailer-to-customer market are not<br />
allowed the same freedom. The description of the<br />
retail-to-retail market discloses two types of<br />
electronic markets-those in which a participant can<br />
buy, browse, and search, and those in which a<br />
participant can sell, browse, and search. The<br />
description of the use of the invention for speculation<br />
discloses a third type of electronic market-one in<br />
which a participant can buy and sell as well as<br />
browse and search. Accordingly, we agree with the<br />
district court's definition of electronic markets as<br />
markets in which the participants, in addition to<br />
browsing and searching, may either buy or sell or do<br />
both.<br />
B<br />
[12] At trial, Half.com argued that the district court<br />
should enter a JMOL of invalidity because there was<br />
clear and convincing evidence that the asserted<br />
claims were rendered obvious in view of expert<br />
testimony and several publications, including an<br />
article by Arthur Keller. The district court rejected<br />
Half.com's argument, stating that “[w]hen the<br />
evidence on invalidity is viewed in the light most<br />
favorable to the plaintiff, the court cannot find that<br />
there was a complete absence of evidence supporting<br />
the verdict that the jury's findings could only be the<br />
result of sheer surmise and conjecture.”<br />
On appeal, Half.com again contends that the asserted<br />
claims of the '176 patent were anticipated or obvious<br />
in light of the prior art. In response, MercExchange<br />
first asserts that Half.com waived its right to make<br />
any argument on appeal based on anticipation<br />
because it failed to do so at trial. As we noted<br />
earlier, however, making an invalidity argument<br />
based on obviousness preserves the right to argue<br />
anticipation on appeal. Because Half.com argued<br />
invalidity based on obviousness at trial, it has<br />
preserved its right to make an argument regarding<br />
anticipation on appeal.<br />
*1335 On the merits, we agree with Half.com that no<br />
reasonable jury could have found the asserted claims<br />
of the '176 patent to be valid. The Keller article<br />
discloses each of the limitations of the asserted<br />
claims, and the article is enabling. The article<br />
describes a system to conduct a “cross-search of<br />
multiple catalogs” by using a network of computers<br />
hosting online catalogs. The article recognizes the<br />
problem of an online buyer's having to search<br />
multiple online catalogs, and it solves that problem<br />
by presenting a system for searching multiple online<br />
catalogs using search agents.<br />
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In addition to disclosing each of the limitations of the<br />
asserted claims, the Keller article enables a person of<br />
ordinary skill to practice its system by disclosing the<br />
communication language of the search agents, i.e.,<br />
KQML and KIF ontologies. It also provides a flow<br />
chart that describes how the system operates,<br />
including how the user interfaces with the system,<br />
i.e., by using HTML/HTTP protocols, and how a<br />
search agent retrieves product data, i.e., by using<br />
SQL. Contrary to MercExchange's assertion, the<br />
Keller article that describes how to make the system<br />
is not a mere laundry list of factors.<br />
MercExchange argues that the Keller article fails to<br />
disclose all the limitations of the '176 patent because<br />
it fails to disclose a method for searching “electronic<br />
markets” but instead searches for “catalogs.”<br />
MercExchange asserts that, unlike the electronic<br />
market claimed in the '176 patent, a catalog<br />
guarantees a participant the right to browse and<br />
search, but does not guarantee the ability either to<br />
buy or to sell a particular good. However, the Keller<br />
article clearly describes a system that searches<br />
catalogs that are serviced by what the article calls<br />
“vendors,” who offer products for sale.<br />
Accordingly, the Keller article contemplates a system<br />
in which a participant is able to search, browse, and<br />
buy. Because a participant is able to buy goods in<br />
the market, that is sufficient to satisfy the “buy or<br />
sell” requirement of the asserted claims. In sum, we<br />
conclude that the Keller article discloses each<br />
limitation of the asserted claims of the '176 patent,<br />
and for that reason we hold that those claims are<br />
anticipated.<br />
III<br />
The defendants contend that they are entitled to a<br />
new trial because the district court erred in<br />
instructing the jury on the definition of several terms<br />
used in the '265 patent. With respect to the term<br />
“transaction processor,” the defendants repeat the<br />
same argument they made in addressing the district<br />
court's denial of their motion for JMOL of<br />
noninfringement and invalidity, i.e., that they were<br />
prejudiced because the instruction on that term<br />
differed from the court's Markman order. As we<br />
have explained, we agree with the district court's jury<br />
instruction on that claim term, and the court was not<br />
required to instruct the jury in strict conformity with<br />
the language of its pretrial Markman order.<br />
[13] With regard to the terms “electronic markets”<br />
and “market apparatus,” the defendants assert that the<br />
district court erred by failing to give jury instructions<br />
that those terms do not encompass “person-toperson”<br />
systems, but instead include only trusted<br />
networks that could transfer ownership. The<br />
defendants contend that the district court should have<br />
instructed the jury that electronic markets do not<br />
include “person-to-person” contacts. If it had done<br />
so, they argue, no reasonable jury could have found<br />
that eBay infringes, because eBay uses a “person-toperson”<br />
system.<br />
The defendants' contention that the '265 patent<br />
prohibits buyers and sellers from having direct<br />
contact finds no support in *1336 the '265 patent.<br />
The court was therefore correct not to include that<br />
interpretation in the jury instructions. Moreover, to<br />
the extent that the defendants contend that the district<br />
court's Markman order embraced their theory that the<br />
patent excluded person-to-person systems, they are<br />
incorrect. In its Markman order, the district court<br />
stated that “the patent teaches away from person-toperson<br />
auctions, favoring a system with a trusted<br />
intermediary.” However, the court never defined<br />
what a “person-to-person” system entails. Rather, it<br />
merely determined that an electronic market must be<br />
a “trusted network or system,” which is the correct<br />
interpretation.<br />
IV<br />
In its cross-appeal, MercExchange contests the<br />
summary judgment of invalidity as to the asserted<br />
claims of the '051 patent, and it asserts that the<br />
district court erred in construing certain terms used in<br />
that patent. MercExchange also challenges the<br />
district court's post-trial order denying<br />
MercExchange's request for a permanent injunction,<br />
enhanced damages, and attorney fees, and reducing<br />
the amount of the damages award by eliminating the<br />
$5.5 million in damages for eBay's inducement to<br />
infringe.<br />
A<br />
[14] Prior to trial, the defendants asserted that the<br />
claims of the '051 patent were invalid because the<br />
written description is inadequate to support either<br />
“establish[ing] a seller's account” or “debiting [or<br />
charging] a seller's account” for a fee. Claim 12<br />
contains both terms and is representative of the<br />
independent claims at issue with regard to the '051<br />
patent:<br />
A computer-implemented method for facilitating<br />
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Internet-based auctions, the method comprising:<br />
Requiring a seller to establish a seller's account, the<br />
seller's account being based at least on the seller's<br />
identity and a financial instrument associated with the<br />
seller;<br />
Initiating an Internet-based auction for an item<br />
offered by the seller; and<br />
Debiting the seller's account for a fee amount<br />
corresponding to a result of the auction.<br />
The district court concluded, on summary judgment,<br />
that the reference to “establish[ing] a seller's account”<br />
was adequately supported by the written description,<br />
but that the process of “debiting the seller's account<br />
for a fee” was not. The court therefore held the<br />
asserted claims of the '051 patent invalid.<br />
The district court construed the term “debiting a<br />
seller's account” to mean “record[ing] a debt (or<br />
charge) against a person's name or account.” The<br />
court held that the written description of the patent<br />
provided support for recording a credit to a seller's<br />
account, but not for recording a debit against the<br />
seller's account. In so ruling, the court relied heavily<br />
on a statement from the written description that<br />
“[a]fter the transaction clears the charge ..., the<br />
consignment node credits the consignment node<br />
user's commission account ... to extract the<br />
consignment node transaction fee.” '051 patent, col.<br />
12, II. 52-55. The court interpreted that statement as<br />
describing a process in which the consignment node<br />
takes the proceeds of a sale from the buyer, takes a<br />
commission or fee, credits the seller's account with<br />
the balance, and transfers that amount to the seller.<br />
Because the seller never owes money to the node, the<br />
court concluded that debiting never occurs in the<br />
disclosed process.<br />
MercExchange argues that the joint declaration of its<br />
experts created a genuine issue of material fact as to<br />
the adequacy of the written description. The<br />
declaration explained that a person of ordinary skill<br />
in *1337 the art would understand the process of<br />
extracting a fee or commission, as described in the<br />
written description, to involve “debiting a seller's<br />
account.” We agree. The written description refers<br />
to the seller's agreement to allow the consignment<br />
node user to extract a consignment fee or commission<br />
following the sale. See '051 patent, col. 4, II. 30-34;<br />
col. 5, II. 37-39. It also refers to the consignment<br />
node user's creating a credit or deposit account for the<br />
participant and crediting the consignment node user's<br />
commission account to extract the commission. See<br />
id., col. 12, II. 44-46, 52-55. According to<br />
MercExchange's experts, a person of ordinary skill in<br />
the art would understand that creating a credit, as<br />
described in the specification, would require creating<br />
a corresponding debit against the proceeds due to the<br />
seller. Hence, MercExchange provided evidence<br />
that the specification would be understood by a<br />
person of skill in the art to describe a process that<br />
includes debiting the seller's account.<br />
We thus conclude that MercExchange introduced<br />
sufficient evidence that the '051 patent was not<br />
invalid for lack of written description to create a<br />
genuine issue of material fact on that issue.<br />
Accordingly, we vacate that aspect of the judgment<br />
and remand for further proceedings.<br />
B<br />
[15] In connection with its challenge to the court's<br />
order invalidating the '051 patent, MercExchange<br />
argues that the district court made three errors in<br />
construing the claims of that patent. As an initial<br />
matter, the defendants assert that this court lacks<br />
jurisdiction to hear MercExchange's appeal regarding<br />
those errors because the construction of those terms<br />
was not relevant to the final judgment. Specifically,<br />
the defendants argue that this court should address<br />
only claim construction issues pertaining to the term<br />
“debiting,” because that term was the sole basis for<br />
the district court's summary judgment determination.<br />
Because we are vacating and remanding with respect<br />
to the '051 patent, we have jurisdiction to address<br />
issues that may arise on remand, as part of our<br />
statutory authority to “require such further<br />
proceedings to be had as may be just under the<br />
circumstances.” 28 U.S.C. § 2106. It is likely that<br />
the district court will be required to deal not only<br />
with the application of the term “debiting,” but also<br />
with the application of other terms used in the '051<br />
claims. Accordingly, we elect to address<br />
MercExchange's challenges to other claim<br />
construction issues at this juncture.<br />
[16] First, MercExchange challenges the construction<br />
of the term “auction,” asserting that the district court<br />
erred in construing the term as “a process over a<br />
trusted network, or with a trusted intermediary.”<br />
MercExchange argues that the district court should<br />
not have required a “trusted” element. We disagree.<br />
The district court's construction is supported by the<br />
language of the specification, which states that the<br />
purpose of the patented system is “to provide a<br />
trusted network of consignment nodes that act as<br />
brokers to provide a means to electronically present a<br />
used good or collectable to an electronic market.”<br />
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(Cite as: 401 F.3d 1323)<br />
'051 patent, col. 2, II. 12-14.<br />
[17] Second, MercExchange challenges the district<br />
court's construction of the following claim limitation,<br />
which appears in claims 10 and 12:<br />
Requiring a seller to establish a seller's account, the<br />
seller's account being based at least on the seller's<br />
identity and a financial instrument associated with the<br />
seller.<br />
In its Markman order, the district court ruled that “a<br />
seller's account must be established based at least on<br />
the seller's identity and a financial instrument<br />
associated with the seller.” MercExchange *1338<br />
disagrees with the district court's construction on the<br />
ground that the comma between the words “account”<br />
and “the” in the claim makes the “identity” and<br />
“financial instrument” features optional. If the<br />
patentee had intended the two to be mandatory,<br />
MercExchange argues, the limitation would not have<br />
used a comma and would have read: “requiring the<br />
seller to establish a seller's account based at least on<br />
the seller's identity and a financial instrument<br />
associated with the seller.”<br />
MercExchange's textual argument is unconvincing.<br />
The claim states that a seller must establish “a seller's<br />
account,” and then, after the comma, the word<br />
“seller's account” is used a second time and is<br />
directly preceded by the article “the.” The use of the<br />
definite article indicates that the second use of the<br />
term “seller's account” refers to the term directly<br />
preceding the comma. We uphold the district court's<br />
construction.<br />
[18] Finally, MercExchange asserts that the district<br />
court erred in construing the preamble phrases<br />
“automated method, performed by a computer-based<br />
auction system,” and “computer-implemented<br />
method of conducting Internet-based auctions” in<br />
various claims of the '051 patent. The district court<br />
held that those phrases do not require that all steps<br />
following the preamble be performed by an<br />
automated process, as argued by MercExchange.<br />
Rather, only the steps that are claimed to occur<br />
automatically are required to be performed in that<br />
manner. MercExchange contends that the court's<br />
interpretation is inconsistent with the portion of the<br />
specification entitled “Computer Implementation,”<br />
which provides different operating systems and<br />
platforms for use in a preferred embodiment of the<br />
invention. '051 patent, col. 7, line 59 through col. 8,<br />
line 9. That portion of the specification does not<br />
support MercExchange's argument, however.<br />
Various limitations of the relevant claims require<br />
actions by participants and cannot be “automatically<br />
performed via an automated process.” For example,<br />
as the district court stated in its Markman order,<br />
claim 1 contains a limitation requiring that the<br />
computer system “receiv [e] bids on the item from<br />
participants.” That step requires that participants<br />
enter their bids manually and cannot occur<br />
automatically. Likewise, one step of claim 12<br />
requires that a seller “establish a seller's account.”<br />
That step also requires that a seller manually enter<br />
relevant information into the system. Accordingly,<br />
the district court was correct in holding that not all<br />
steps had to be performed by way of an automated<br />
process.<br />
C<br />
MercExchange challenges the district court's refusal<br />
to enter a permanent injunction. Because the “right<br />
to exclude recognized in a patent is but the essence of<br />
the concept of property,” the general rule is that a<br />
permanent injunction will issue once infringement<br />
and validity have been adjudged. Richardson v.<br />
Suzuki Motor Co., 868 F.2d 1226, 1246-47<br />
(Fed.Cir.1989). To be sure, “courts have in rare<br />
instances exercised their discretion to deny injunctive<br />
relief in order to protect the public interest.” Rite-<br />
Hite Corp. v. Kelley, Inc., 56 F.3d 1538, 1547<br />
(Fed.Cir.1995); see Roche Prods., Inc. v. Bolar<br />
Pharm. Co., 733 F.2d 858, 865-66 (Fed.Cir.1984)<br />
(“standards of the public interest, not the<br />
requirements of private litigation, measure the<br />
propriety and need for injunctive relief”). Thus, we<br />
have stated that a court may decline to enter an<br />
injunction when “a patentee's failure to practice the<br />
patented invention frustrates an important public<br />
need for the invention,” such as the need to use an<br />
invention to protect public health. Rite-Hite Corp.,<br />
56 F.3d at 1547.<br />
*1339 [19] In this case, the district court did not<br />
provide any persuasive reason to believe this case is<br />
sufficiently exceptional to justify the denial of a<br />
permanent injunction. In its post-trial order, the<br />
district court stated that the public interest favors<br />
denial of a permanent injunction in view of “a<br />
growing concern over the issuance of businessmethod<br />
patents, which forced the PTO to implement<br />
a second level review policy and cause legislation to<br />
be introduced in Congress to eliminate the<br />
presumption of validity for such patents.” A general<br />
concern regarding business-method patents, however,<br />
is not the type of important public need that justifies<br />
the unusual step of denying injunctive relief.<br />
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Another reason the court gave for denying a<br />
permanent injunction was that the litigation in this<br />
case had been contentious and that if a permanent<br />
injunction were granted, the defendants would<br />
attempt to design around it. That strategy, in turn,<br />
would result in “contempt hearing after contempt<br />
hearing requiring the court to essentially conduct<br />
separate infringement trials to determine if the<br />
changes to the defendants' systems violates the<br />
injunction” and in “extraordinary costs to the parties,<br />
as well as considerable judicial resources.”<br />
[20] The court's concern about the likelihood of<br />
continuing disputes over whether the defendants'<br />
subsequent actions would violate MercExchange's<br />
rights is not a sufficient basis for denying a<br />
permanent injunction. A continuing dispute of that<br />
sort is not unusual in a patent case, and even absent<br />
an injunction, such a dispute would be likely to<br />
continue in the form of successive infringement<br />
actions if the patentee believed the defendants'<br />
conduct continued to violate its rights.<br />
[21] The trial court also noted that MercExchange<br />
had made public statements regarding its willingness<br />
to license its patents, and the court justified its denial<br />
of a permanent injunction based in part on those<br />
statements. The fact that MercExchange may have<br />
expressed willingness to license its patents should<br />
not, however, deprive it of the right to an injunction<br />
to which it would otherwise be entitled. Injunctions<br />
are not reserved for patentees who intend to practice<br />
their patents, as opposed to those who choose to<br />
license. The statutory right to exclude is equally<br />
available to both groups, and the right to an adequate<br />
remedy to enforce that right should be equally<br />
available to both as well. If the injunction gives the<br />
patentee additional leverage in licensing, that is a<br />
natural consequence of the right to exclude and not<br />
an inappropriate reward to a party that does not<br />
intend to compete in the marketplace with potential<br />
infringers.<br />
[22] Finally, we do not agree with the court that<br />
MercExchange's failure to move for a preliminary<br />
injunction militates against its right to a permanent<br />
injunction. A preliminary injunction is extraordinary<br />
relief that is available only on a special showing of<br />
need for relief pendente lite; a preliminary injunction<br />
and a permanent injunction “are distinct forms of<br />
equitable relief that have different prerequisites and<br />
serve entirely different purposes.” Lermer Germany<br />
GmbH v. Lermer Corp., 94 F.3d 1575, 1577<br />
(Fed.Cir.1996). We therefore see no reason to<br />
depart from the general rule that courts will issue<br />
permanent injunctions against patent infringement<br />
absent exceptional circumstances. Accordingly, we<br />
reverse the district court's denial of MercExchange's<br />
motion for a permanent injunction.<br />
D<br />
MercExchange argues that the district court abused<br />
its discretion by refusing to enhance damages and<br />
award attorney fees. MercExchange asserts that the<br />
district *1340 court erred in its analysis of the factors<br />
set forth in Read Corp. v. Portec, Inc., 970 F.2d 816,<br />
826-27 (Fed.Cir.1992). The defendants respond that<br />
the district court properly considered each of the<br />
Read factors. We agree with the defendants. In<br />
determining that MercExchange was not entitled to<br />
enhanced damages, the district court carefully<br />
analyzed each of the Read factors and based its<br />
conclusions on the jury's factual findings and<br />
evidence in the record. In analyzing those factors,<br />
the court did not abuse its discretion.<br />
The court also addressed the relevant factors that bear<br />
on whether to award attorney fees, including “the<br />
degree of culpability of the infringer,” “the closeness<br />
of the question,” and “litigation behavior.” Superior<br />
Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358,<br />
1378 (Fed.Cir.2001), quoting Nat'l Presto Indus., Inc.<br />
v. W. Bend Co., 76 F.3d 1185, 1197 (Fed.Cir.1996).<br />
Again, the court did not abuse its discretion in<br />
applying those factors in the factual context of this<br />
case. We therefore affirm the portion of the<br />
judgment denying an award of enhanced damages or<br />
attorney fees.<br />
Each party shall bear its own costs for this appeal.<br />
AFFIRMED IN PART, REVERSED IN PART,<br />
VACATED IN PART, and REMANDED.<br />
C.A.Fed. (Va.),2005.<br />
MercExchange, LLC v. eBay, Inc.<br />
401 F.3d 1323, 74 U.S.P.Q.2d 1225<br />
Briefs and Other Related Documents (Back to top)<br />
• 03-1616 (Docket) (Sep. 08, 2003)<br />
• 03-1600 (Docket) (Aug. 25, 2003)<br />
END OF DOCUMENT<br />
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(Cite as: 126 S.Ct. 1837)<br />
Briefs and Other Related Documents<br />
Supreme Court of the United States<br />
EBAY INC. et al., Petitioners,<br />
v.<br />
MERCEXCHANGE, L.L.C.<br />
No. 05-130.<br />
Argued March 29, 2006.<br />
Decided May 15, 2006.<br />
Background: Owner of patent for method of<br />
conducting on-line sales sued auction website<br />
operators for infringement. The United States District<br />
Court for the Eastern District of Virginia, Jerome B.<br />
Friedman, J., 275 F.Supp.2d 695, entered judgment<br />
on jury's finding that patent was valid and had been<br />
infringed, and awarded damages, but denied<br />
permanent injunctive relief sought by owner. The<br />
United States Court of Appeals for the Federal<br />
Circuit, 401 F.3d 1323, reversed in part, finding that<br />
District Court had abused its discretion by denying<br />
permanent injunction. Certiorari was granted.<br />
Holdings: The United States Supreme Court, Justice<br />
Thomas, held that:<br />
(1) generally applicable four-factor test for<br />
permanent injunctive relief applies to disputes arising<br />
under <strong>Patent</strong> Act, and<br />
(2) in successful patent infringement action, patent<br />
holder's willingness to license its patents and lack of<br />
commercial activity in practicing patents do not<br />
preclude permanent injunction.<br />
Vacated and remanded.<br />
The Chief Justice filed a concurring opinion joined<br />
by Justices Scalia and Ginsburg.<br />
Justice Kennedy filed a concurring opinion joined by<br />
Justices Stevens, Souter, and Breyer.<br />
[1] Injunction 212 9<br />
West Headnotes<br />
212 Injunction<br />
212I Nature and Grounds in General<br />
212I(B) Grounds of Relief<br />
212k9 k. Nature and Existence of Right<br />
Requiring Protection. Most Cited Cases<br />
Plaintiff seeking permanent injunction must<br />
demonstrate that: (1) it has suffered irreparable<br />
injury; (2) remedies available at law, such as<br />
monetary damages, are inadequate to compensate for<br />
that injury; (3) considering balance of hardships<br />
between plaintiff and defendant, remedy in equity is<br />
warranted; and (4) public interest would not be<br />
disserved by permanent injunction.<br />
[2] Federal Courts 170B 814.1<br />
170B Federal Courts<br />
170BVIII Courts of Appeals<br />
170BVIII(K) Scope, Standards, and Extent<br />
170BVIII(K)4 Discretion of Lower Court<br />
170Bk814 Injunction<br />
170Bk814.1 k. In General. Most<br />
Cited Cases<br />
District court's decision to grant or deny permanent<br />
injunctive relief is act of equitable discretion<br />
reviewable for abuse of discretion.<br />
[3] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
General equitable principles governing grant of<br />
permanent injunction, and consequent four-factor test<br />
for such relief, i.e. irreparable injury, inadequacy of<br />
remedies at law, balance of hardships favoring party<br />
seeking injunction, and public interest, apply in<br />
context of disputes arising under <strong>Patent</strong> Act; fact that<br />
Act confers upon patent holder right to exclude<br />
others does not render permanent injunction<br />
appropriate any time infringement and validity have<br />
been adjudged. 35 U.S.C.A. § § 154(a)(1), 261, 283.<br />
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126 S.Ct. 1837, 78 U.S.P.Q.2d 1577, 2006 Daily Journal D.A.R. 5756, 74 USLW 4248, 06 Cal. Daily Op. Serv.<br />
3935, 19 Fla. L. Weekly Fed. S 197, 164 L.Ed.2d 641<br />
(Cite as: 126 S.Ct. 1837)<br />
[4] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
In successful patent infringement action, patent<br />
holder's willingness to license its patents, and lack of<br />
commercial activity in practicing patents, do not, by<br />
themselves, establish that holder would not suffer<br />
irreparable harm if permanent injunction against<br />
infringing party did not issue; thus, those facts by<br />
themselves do not preclude injunctive relief. 35<br />
U.S.C.A. § 1 et seq.<br />
*1837 Syllabus FN*<br />
FN* The syllabus constitutes no part of the<br />
opinion of the Court but has been prepared<br />
by the Reporter of Decisions for the<br />
convenience of the reader. See United<br />
States v. Detroit Timber & Lumber Co., 200<br />
U.S. 321, 337, 26 S.Ct. 282, 50 L.Ed. 499.<br />
Petitioners operate popular Internet Web sites that<br />
allow private sellers to list *1838 goods they wish to<br />
sell. Respondent sought to license its business<br />
method patent to petitioners, but no agreement was<br />
reached. In respondent's subsequent patent<br />
infringement suit, a jury found that its patent was<br />
valid, that petitioners had infringed the patent, and<br />
that damages were appropriate. However, the<br />
District Court denied respondent's motion for<br />
permanent injunctive relief. In reversing, the<br />
Federal Circuit applied its “general rule that courts<br />
will issue permanent injunctions against patent<br />
infringement absent exceptional circumstances.” 401<br />
F.3d 1323, 1339.<br />
Held: The traditional four-factor test applied by<br />
courts of equity when considering whether to award<br />
permanent injunctive relief to a prevailing plaintiff<br />
applies to disputes arising under the <strong>Patent</strong> Act. That<br />
test requires a plaintiff to demonstrate: (1) that it has<br />
suffered an irreparable injury; (2) that remedies<br />
available at law are inadequate to compensate for that<br />
injury; (3) that considering the balance of hardships<br />
between the plaintiff and defendant, a remedy in<br />
equity is warranted; and (4) that the public interest<br />
would not be disserved by a permanent injunction.<br />
The decision to grant or deny such relief is an act of<br />
equitable discretion by the district court, reviewable<br />
on appeal for abuse of discretion. These principles<br />
apply with equal force to <strong>Patent</strong> Act disputes. “[A]<br />
major departure from the long tradition of equity<br />
practice should not be lightly implied.” Weinberger<br />
v. Romero-Barcelo, 456 U.S. 305, 320, 102 S.Ct.<br />
1798, 72 L.Ed.2d 91. Nothing in the Act indicates<br />
such a departure. Pp. 1838 - 1841.<br />
401 F.3d 1323, vacated and remanded.<br />
THOMAS, J., delivered the opinion for a unanimous<br />
Court. ROBERTS, C.J., filed a concurring opinion,<br />
in which SCALIA and GINSBURG, JJ., joined.<br />
KENNEDY, J., filed a concurring opinion, in which<br />
STEVENS, SOUTER, and BREYER, JJ., joined.<br />
Jeffrey P. Minear for the United States as amicus<br />
curiae, by special leave of the Court, supporting the<br />
respondent.<br />
Jeffrey G. Randall, Skadden, Arps, Slate, Meagher &<br />
Flom LLP, Palo Alto, California, Allan M. Soobert,<br />
Skadden, Arps, Slate, Meagher & Flom LLP,<br />
Washington, D.C., Carter G. Phillips, Counsel of<br />
Record, Richard D. Bernstein, Virginia Seitz Sidley<br />
Austin LLP, Washington, D.C., Jay Monahan eBay<br />
Inc., San Jose, California, for Petitioners.<br />
Scott L. Robertson, Gregory N. Stillman, Jennifer A.<br />
Albert, David M. Young, Brian M. Buroker, Hunton<br />
& Williams LLP, Washington, DC, Seth P. Waxman,<br />
Counsel of Record, William G. McElwain, <strong>Paul</strong> R.Q.<br />
Wolfson, John M. Golden, Shirley Cassin<br />
Woodward, Wilmer Cutler Pickering Hale and Door<br />
LLP, Washington, DC, for respondent.For U.S.<br />
Supreme Court briefs, see:2006 WL 927236<br />
(Pet.Brief)2006 WL 622506 (Resp.Brief)2006 WL<br />
690255 (Reply.Brief)<br />
Justice THOMAS delivered the opinion of the Court.<br />
Ordinarily, a federal court considering whether to<br />
award permanent injunctive relief to a prevailing<br />
plaintiff applies the four-factor test historically<br />
employed by courts of equity. Petitioners eBay Inc.<br />
and Half.com, Inc., argue that this traditional test<br />
applies to disputes arising under *1839 the <strong>Patent</strong><br />
Act. We agree and, accordingly, vacate the judgment<br />
of the Court of Appeals.<br />
I<br />
Petitioner eBay operates a popular Internet Web site<br />
that allows private sellers to list goods they wish to<br />
sell, either through an auction or at a fixed price.<br />
Petitioner Half.com, now a wholly owned subsidiary<br />
of eBay, operates a similar Web site. Respondent<br />
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126 S.Ct. 1837, 78 U.S.P.Q.2d 1577, 2006 Daily Journal D.A.R. 5756, 74 USLW 4248, 06 Cal. Daily Op. Serv.<br />
3935, 19 Fla. L. Weekly Fed. S 197, 164 L.Ed.2d 641<br />
(Cite as: 126 S.Ct. 1837)<br />
MercExchange, L.L.C., holds a number of patents,<br />
including a business method patent for an electronic<br />
market designed to facilitate the sale of goods<br />
between private individuals by establishing a central<br />
authority to promote trust among participants. See<br />
U.S. <strong>Patent</strong> No. 5,845,265. MercExchange sought to<br />
license its patent to eBay and Half.com, as it had<br />
previously done with other companies, but the parties<br />
failed to reach an agreement. MercExchange<br />
subsequently filed a patent infringement suit against<br />
eBay and Half.com in the United States District<br />
Court for the Eastern District of Virginia. A jury<br />
found that MercExchange's patent was valid, that<br />
eBay and Half.com had infringed that patent, and that<br />
an award of damages was appropriate. FN1<br />
FN1. EBay and Half.com continue to<br />
challenge the validity of MercExchange's<br />
patent in proceedings pending before the<br />
United States <strong>Patent</strong> and Trademark Office.<br />
Following the jury verdict, the District Court denied<br />
MercExchange's motion for permanent injunctive<br />
relief. 275 F.Supp.2d 695 (2003). The Court of<br />
Appeals for the Federal Circuit reversed, applying its<br />
“general rule that courts will issue permanent<br />
injunctions against patent infringement absent<br />
exceptional circumstances.” 401 F.3d 1323, 1339<br />
(2005). We granted certiorari to determine the<br />
appropriateness of this general rule. 546 U.S. ----,<br />
126 S.Ct. 733, 163 L.Ed.2d 567 (2005).<br />
II<br />
[1][2] According to well-established principles of<br />
equity, a plaintiff seeking a permanent injunction<br />
must satisfy a four-factor test before a court may<br />
grant such relief. A plaintiff must demonstrate: (1)<br />
that it has suffered an irreparable injury; (2) that<br />
remedies available at law, such as monetary damages,<br />
are inadequate to compensate for that injury; (3) that,<br />
considering the balance of hardships between the<br />
plaintiff and defendant, a remedy in equity is<br />
warranted; and (4) that the public interest would not<br />
be disserved by a permanent injunction. See, e.g.,<br />
Weinberger v. Romero-Barcelo, 456 U.S. 305, 311-<br />
313, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982); Amoco<br />
Production Co. v. Gambell, 480 U.S. 531, 542, 107<br />
S.Ct. 1396, 94 L.Ed.2d 542 (1987). The decision to<br />
grant or deny permanent injunctive relief is an act of<br />
equitable discretion by the district court, reviewable<br />
on appeal for abuse of discretion. See, e.g., Romero-<br />
Barcelo, 456 U.S., at 320, 102 S.Ct. 1798.<br />
[3] These familiar principles apply with equal force<br />
to disputes arising under the <strong>Patent</strong> Act. As this Court<br />
has long recognized, “a major departure from the<br />
long tradition of equity practice should not be lightly<br />
implied.” Ibid.; see also Amoco, supra, at 542, 107<br />
S.Ct. 1396. Nothing in the <strong>Patent</strong> Act indicates that<br />
Congress intended such a departure. To the<br />
contrary, the <strong>Patent</strong> Act expressly provides that<br />
injunctions “may” issue “in accordance with the<br />
principles of equity.” 35 U.S.C. § 283. FN2<br />
FN2. Section 283 provides that “[t]he<br />
several courts having jurisdiction of cases<br />
under this title may grant injunctions in<br />
accordance with the principles of equity to<br />
prevent the violation of any right secured by<br />
patent, on such terms as the court deems<br />
reasonable.”<br />
*1840 To be sure, the <strong>Patent</strong> Act also declares that<br />
“patents shall have the attributes of personal<br />
property,” § 261, including “the right to exclude<br />
others from making, using, offering for sale, or<br />
selling the invention,” § 154(a)(1). According to<br />
the Court of Appeals, this statutory right to exclude<br />
alone justifies its general rule in favor of permanent<br />
injunctive relief. 401 F.3d, at 1338. But the creation<br />
of a right is distinct from the provision of remedies<br />
for violations of that right. Indeed, the <strong>Patent</strong> Act<br />
itself indicates that patents shall have the attributes of<br />
personal property “[s]ubject to the provisions of this<br />
title,” 35 U.S.C. § 261, including, presumably, the<br />
provision that injunctive relief “may” issue only “in<br />
accordance with the principles of equity,” § 283.<br />
This approach is consistent with our treatment of<br />
injunctions under the Copyright Act. Like a patent<br />
owner, a copyright holder possesses “the right to<br />
exclude others from using his property.” Fox Film<br />
Corp. v. Doyal, 286 U.S. 123, 127, 52 S.Ct. 546, 76<br />
L.Ed. 1010 (1932); see also id., at 127-128, 52 S.Ct.<br />
546 (“A copyright, like a patent, is at once the<br />
equivalent given by the public for benefits bestowed<br />
by the genius and meditations and skill of<br />
individuals, and the incentive to further efforts for the<br />
same important objects” (internal quotation marks<br />
omitted)). Like the <strong>Patent</strong> Act, the Copyright Act<br />
provides that courts “may” grant injunctive relief “on<br />
such terms as it may deem reasonable to prevent or<br />
restrain infringement of a copyright.” 17 U.S.C. §<br />
502(a). And as in our decision today, this Court has<br />
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(Cite as: 126 S.Ct. 1837)<br />
consistently rejected invitations to replace traditional<br />
equitable considerations with a rule that an injunction<br />
automatically follows a determination that a<br />
copyright has been infringed. See, e.g., New York<br />
Times Co. v. Tasini, 533 U.S. 483, 505, 121 S.Ct.<br />
2381, 150 L.Ed.2d 500 (2001) (citing Campbell v.<br />
Acuff-Rose Music, Inc., 510 U.S. 569, 578, n. 10, 114<br />
S.Ct. 1164, 127 L.Ed.2d 500 (1994)); Dun v.<br />
Lumbermen's Credit Assn., 209 U.S. 20, 23-24, 28<br />
S.Ct. 335, 52 L.Ed. 663 (1908).<br />
[4] Neither the District Court nor the Court of<br />
Appeals below fairly applied these traditional<br />
equitable principles in deciding respondent's motion<br />
for a permanent injunction. Although the District<br />
Court recited the traditional four-factor test, 275<br />
F.Supp.2d, at 711, it appeared to adopt certain<br />
expansive principles suggesting that injunctive relief<br />
could not issue in a broad swath of cases. Most<br />
notably, it concluded that a “plaintiff's willingness to<br />
license its patents” and “its lack of commercial<br />
activity in practicing the patents” would be sufficient<br />
to establish that the patent holder would not suffer<br />
irreparable harm if an injunction did not issue. Id., at<br />
712. But traditional equitable principles do not<br />
permit such broad classifications. For example,<br />
some patent holders, such as university researchers or<br />
self-made inventors, might reasonably prefer to<br />
license their patents, rather than undertake efforts to<br />
secure the financing necessary to bring their works to<br />
market themselves. Such patent holders may be able<br />
to satisfy the traditional four-factor test, and we see<br />
no basis for categorically denying them the<br />
opportunity to do so. To the extent that the District<br />
Court adopted such a categorical rule, then, its<br />
analysis cannot be squared with the principles of<br />
equity adopted by Congress. The court's categorical<br />
rule is also in tension with Continental Paper Bag<br />
Co. v. Eastern Paper Bag Co., 210 U.S. 405, 422-<br />
430, 28 S.Ct. 748, 52 L.Ed. 1122 (1908), which<br />
rejected the contention that a court of equity has no<br />
jurisdiction to grant injunctive relief to a *1841<br />
patent holder who has unreasonably declined to use<br />
the patent.<br />
In reversing the District Court, the Court of Appeals<br />
departed in the opposite direction from the fourfactor<br />
test. The court articulated a “general rule,”<br />
unique to patent disputes, “that a permanent<br />
injunction will issue once infringement and validity<br />
have been adjudged.” 401 F.3d, at 1338. The court<br />
further indicated that injunctions should be denied<br />
only in the “unusual” case, under “exceptional<br />
circumstances” and “ ‘in rare instances ... to protect<br />
the public interest.’ ” Id., at 1338-1339. Just as the<br />
District Court erred in its categorical denial of<br />
injunctive relief, the Court of Appeals erred in its<br />
categorical grant of such relief. Cf. Roche Products<br />
v. Bolar Pharmaceutical Co., 733 F.2d 858, 865<br />
(C.A.Fed.1984) (recognizing the “considerable<br />
discretion” district courts have “in determining<br />
whether the facts of a situation require it to issue an<br />
injunction”).<br />
Because we conclude that neither court below<br />
correctly applied the traditional four-factor<br />
framework that governs the award of injunctive<br />
relief, we vacate the judgment of the Court of<br />
Appeals, so that the District Court may apply that<br />
framework in the first instance. In doing so, we take<br />
no position on whether permanent injunctive relief<br />
should or should not issue in this particular case, or<br />
indeed in any number of other disputes arising under<br />
the <strong>Patent</strong> Act. We hold only that the decision<br />
whether to grant or deny injunctive relief rests within<br />
the equitable discretion of the district courts, and that<br />
such discretion must be exercised consistent with<br />
traditional principles of equity, in patent disputes no<br />
less than in other cases governed by such standards.<br />
Accordingly, we vacate the judgment of the Court of<br />
Appeals, and remand for further proceedings<br />
consistent with this opinion.<br />
It is so ordered.<br />
Chief Justice ROBERTS, with whom Justice<br />
SCALIA and Justice GINSBURG join, concurring.<br />
I agree with the Court's holding that “the decision<br />
whether to grant or deny injunctive relief rests within<br />
the equitable discretion of the district courts, and that<br />
such discretion must be exercised consistent with<br />
traditional principles of equity, in patent disputes no<br />
less than in other cases governed by such standards,”<br />
ante, at 1841, and I join the opinion of the Court.<br />
That opinion rightly rests on the proposition that “a<br />
major departure from the long tradition of equity<br />
practice should not be lightly implied.” Weinberger<br />
v. Romero-Barcelo, 456 U.S. 305, 320, 102 S.Ct.<br />
1798, 72 L.Ed.2d 91 (1982); see ante, at 1839.<br />
From at least the early 19th century, courts have<br />
granted injunctive relief upon a finding of<br />
infringement in the vast majority of patent cases.<br />
This “long tradition of equity practice” is not<br />
surprising, given the difficulty of protecting a right to<br />
exclude through monetary remedies that allow an<br />
infringer to use an invention against the patentee's<br />
wishes-a difficulty that often implicates the first two<br />
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126 S.Ct. 1837, 78 U.S.P.Q.2d 1577, 2006 Daily Journal D.A.R. 5756, 74 USLW 4248, 06 Cal. Daily Op. Serv.<br />
3935, 19 Fla. L. Weekly Fed. S 197, 164 L.Ed.2d 641<br />
(Cite as: 126 S.Ct. 1837)<br />
factors of the traditional four-factor test. This<br />
historical practice, as the Court holds, does not entitle<br />
a patentee to a permanent injunction or justify a<br />
general rule that such injunctions should issue. The<br />
Federal Circuit itself so recognized in Roche<br />
Products, Inc. v. Bolar Pharmaceutical Co., 733 F.2d<br />
858, 865-867 (1984). At the same time, there is a<br />
difference between exercising equitable discretion<br />
pursuant to the established four-factor test and<br />
writing on an entirely clean slate. “Discretion is not<br />
whim, and limiting discretion according to legal<br />
standards helps promote the basic *1842 principle of<br />
justice that like cases should be decided alike.”<br />
Martin v. Franklin Capital Corp., 546 U.S. ----, ----,<br />
126 S.Ct. 704, 710, 163 L.Ed.2d 547 (2005). When<br />
it comes to discerning and applying those standards,<br />
in this area as others, “a page of history is worth a<br />
volume of logic.” New York Trust Co. v. Eisner, 256<br />
U.S. 345, 349, 41 S.Ct. 506, 65 L.Ed. 963 (1921)<br />
(opinion for the Court by Holmes, J.).<br />
Justice KENNEDY, with whom Justice STEVENS,<br />
Justice SOUTER, and Justice BREYER join,<br />
concurring.<br />
The Court is correct, in my view, to hold that courts<br />
should apply the well-established, four-factor testwithout<br />
resort to categorical rules-in deciding<br />
whether to grant injunctive relief in patent cases.<br />
THE CHIEF JUSTICE is also correct that history<br />
may be instructive in applying this test. Ante, at<br />
1841 - 1842 (concurring opinion). The traditional<br />
practice of issuing injunctions against patent<br />
infringers, however, does not seem to rest on “the<br />
difficulty of protecting a right to exclude through<br />
monetary remedies that allow an infringer to use an<br />
invention against the patentee's wishes.” Ante, at<br />
1841 (ROBERTS, C.J., concurring). Both the terms<br />
of the <strong>Patent</strong> Act and the traditional view of<br />
injunctive relief accept that the existence of a right to<br />
exclude does not dictate the remedy for a violation of<br />
that right. Ante, at 1839 - 1840 (opinion of the<br />
Court). To the extent earlier cases establish a pattern<br />
of granting an injunction against patent infringers<br />
almost as a matter of course, this pattern simply<br />
illustrates the result of the four-factor test in the<br />
contexts then prevalent. The lesson of the historical<br />
practice, therefore, is most helpful and instructive<br />
when the circumstances of a case bear substantial<br />
parallels to litigation the courts have confronted<br />
before.<br />
In cases now arising trial courts should bear in mind<br />
that in many instances the nature of the patent being<br />
enforced and the economic function of the patent<br />
holder present considerations quite unlike earlier<br />
cases. An industry has developed in which firms use<br />
patents not as a basis for producing and selling goods<br />
but, instead, primarily for obtaining licensing fees.<br />
See FTC, To Promote Innovation: The Proper<br />
Balance of Competition and <strong>Patent</strong> Law and Policy,<br />
ch. 3, pp. 38-39 (Oct.2003), available at<br />
http://www.ftc.gov/os/2003/ 10/innovationrpt.pdf (as<br />
visited May 11, 2006, and available in Clerk of<br />
Court's case file). For these firms, an injunction, and<br />
the potentially serious sanctions arising from its<br />
violation, can be employed as a bargaining tool to<br />
charge exorbitant fees to companies that seek to buy<br />
licenses to practice the patent. See ibid. When the<br />
patented invention is but a small component of the<br />
product the companies seek to produce and the threat<br />
of an injunction is employed simply for undue<br />
leverage in negotiations, legal damages may well be<br />
sufficient to compensate for the infringement and an<br />
injunction may not serve the public interest. In<br />
addition injunctive relief may have different<br />
consequences for the burgeoning number of patents<br />
over business methods, which were not of much<br />
economic and legal significance in earlier times.<br />
The potential vagueness and suspect validity of some<br />
of these patents may affect the calculus under the<br />
four-factor test.<br />
The equitable discretion over injunctions, granted by<br />
the <strong>Patent</strong> Act, is well suited to allow courts to adapt<br />
to the rapid technological and legal developments in<br />
the patent system. For these reasons it should be<br />
recognized that district courts must determine<br />
whether past practice fits the circumstances of the<br />
cases before *1843 them. With these observations, I<br />
join the opinion of the Court.<br />
U.S.,2006.<br />
eBay Inc. v. MercExchange, L.L.C.<br />
126 S.Ct. 1837, 78 U.S.P.Q.2d 1577, 2006 Daily<br />
Journal D.A.R. 5756, 74 USLW 4248, 06 Cal. Daily<br />
Op. Serv. 3935, 19 Fla. L. Weekly Fed. S 197, 164<br />
L.Ed.2d 641<br />
Briefs and Other Related Documents (Back to top)<br />
• 2006 WL 1785363 (Appellate Brief) Brief Amici<br />
Curiae of 52 Intellectual Property Professors in<br />
Support of Petitioners (Jun. 26, 2006) Original Image<br />
of this Document (PDF)<br />
• 2006 WL 927236 (Appellate Brief) Brief of<br />
Petitioners (Mar. 29, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 690255 (Appellate Brief) Reply Brief<br />
(Mar. 17, 2006) Original Image of this Document<br />
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126 S.Ct. 1837 Page 6<br />
126 S.Ct. 1837, 78 U.S.P.Q.2d 1577, 2006 Daily Journal D.A.R. 5756, 74 USLW 4248, 06 Cal. Daily Op. Serv.<br />
3935, 19 Fla. L. Weekly Fed. S 197, 164 L.Ed.2d 641<br />
(Cite as: 126 S.Ct. 1837)<br />
(PDF)<br />
• 2006 WL 615158 (Appellate Brief) Brief for<br />
General Electric Company, 3M Company, The<br />
Procter & Gamble Company, E.I. Du Pont De<br />
Nemours and Company, and Johnson & Johnson as<br />
Amici Curiae Suggesting Affirmance (Mar. 10, 2006)<br />
Original Image of this Document (PDF)<br />
• 2006 WL 622120 (Appellate Brief) Brief for the<br />
United States as Amicus Curiae Supporting<br />
Respondent (Mar. 10, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 622122 (Appellate Brief) Brief of Amicus<br />
Curiae Pharmaceutical Research and Manufacturing<br />
of America in Support of Respondent (Mar. 10,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 622506 (Appellate Brief) Brief for<br />
Respondent (Mar. 10, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 639161 (Appellate Brief) Brief Amici<br />
Curiae of Martin Cooper, Raymond Damadian, Leroy<br />
Hood, Nathan Myhrvold, Robert Rines, Burt Rutan,<br />
James West, 14 Other Investors, and Intellectual<br />
Ventures in Support of Respondent (Mar. 10, 2006)<br />
Original Image of this Document (PDF)<br />
• 2006 WL 639162 (Appellate Brief) Brief of<br />
Biotechnology Industry Organization as Amici<br />
Curiae in Support of Respondent (Mar. 10, 2006)<br />
Original Image of this Document (PDF)<br />
• 2006 WL 639163 (Appellate Brief) Brief of<br />
Rembrandt IP Management, LLC as Amicus Curiae<br />
in Support of Respondent (Mar. 10, 2006) Original<br />
Image of this Document (PDF)<br />
• 2006 WL 639164 (Appellate Brief) Brief of Various<br />
Law & Economics Professors as Amici Curiae in<br />
Support of Respondent (Mar. 10, 2006) Original<br />
Image of this Document (PDF)<br />
• 2006 WL 639165 (Appellate Brief) Brief of<br />
Wisconsin Alumni Research Foundation, American<br />
Council on Education, Association of University<br />
Technology Managers, Board of Trustees of the<br />
University of Illinois, California Institute of<br />
Technology, NDSU Research Foundation, Regents of<br />
the University of California, Research Corporation<br />
Technologies, Texas A&M University System's<br />
Office of Technology Commercialization, University<br />
of Virginia <strong>Patent</strong> Foundation and Washington<br />
Research Foundation as Amici Curiae in Support of<br />
Respondent%t (Mar. 10, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 639166 (Appellate Brief) Brief For<br />
Amicus Curiae Steven M. Hoffberg Supporting<br />
Respondent (Mar. 10, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 639167 (Appellate Brief) Brief of the<br />
American Bar Association as Amicus Curiae<br />
Supporting Respondent (Mar. 10, 2006) Original<br />
Image of this Document (PDF)<br />
• 2006 WL 639168 (Appellate Brief) Brief of the<br />
Association of American Universities and the<br />
National Association of State Universities and Land-<br />
Grant Colleges as Amici Curiae in Support of<br />
Respondent (Mar. 10, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 639169 (Appellate Brief) Brief for<br />
Technology <strong>Patent</strong>s & Licensing, Inc., Expanse<br />
Networks, Inc., And Charles A. Eldering As Amici<br />
Curiae Supporting Respondent (Mar. 10, 2006)<br />
Original Image of this Document (PDF)<br />
• 2006 WL 639170 (Appellate Brief) Brief of Amici<br />
Curiae to Qualcomm Incorporated and Tessera, Inc.<br />
in Support of Respondent (Mar. 10, 2006) Original<br />
Image of this Document (PDF)<br />
• 2006 WL 622121 (Appellate Brief) Brief of the<br />
United Inventors Association and Technology<br />
Licensing Corporation As Amici Curiae In Support<br />
Of MercExchange, L.L.C., on the Merits (Mar. 9,<br />
2006)<br />
• 2006 WL 207729 (Appellate Brief) Brief for<br />
Amicus Curiae Bar Association of the District of<br />
Columbia - <strong>Patent</strong>, Trademark & Copyright Section<br />
in Support of Neither Party (Jan. 26, 2006) Original<br />
Image of this Document (PDF)<br />
• 2006 WL 207730 (Appellate Brief) Brief of<br />
Business Software Alliance, Software and<br />
Information Industry Association, Information<br />
Technology Industry Council, and Information<br />
Technology Association of America as Amici Curiae<br />
in Support of Petitioners (Jan. 26, 2006) Original<br />
Image of this Document (PDF)<br />
• 2006 WL 218966 (Appellate Brief) Amicus Curiae<br />
Brief of Teva Pharmaceuticals USA, Inc. in Support<br />
of Neither Party (Jan. 26, 2006) Original Image of<br />
this Document (PDF)<br />
• 2006 WL 218967 (Appellate Brief) Brief of<br />
American Innovators' Alliance as Amicus Curiae in<br />
Support of Petitioners (Jan. 26, 2006) Original Image<br />
of this Document (PDF)<br />
• 2006 WL 218988 (Appellate Brief) Brief of Amicus<br />
Curiae Yahoo! Inc. in Support of Petitioner (Jan. 26,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 235005 (Appellate Brief) Brief of Amicus<br />
Curiae Nokia Corporation in Support of Petitioners<br />
(Jan. 26, 2006) Original Image of this Document<br />
(PDF)<br />
• 2006 WL 235006 (Appellate Brief) Brief of<br />
International Business Machines Corporation as<br />
Amicus Curiae in Support of Neither Party (Jan. 26,<br />
2006) Original Image of this Document (PDF)<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
126 S.Ct. 1837 Page 7<br />
126 S.Ct. 1837, 78 U.S.P.Q.2d 1577, 2006 Daily Journal D.A.R. 5756, 74 USLW 4248, 06 Cal. Daily Op. Serv.<br />
3935, 19 Fla. L. Weekly Fed. S 197, 164 L.Ed.2d 641<br />
(Cite as: 126 S.Ct. 1837)<br />
• 2006 WL 235007 (Appellate Brief) Brief of<br />
Research in Motion, Ltd. as Amicus Curiae in<br />
Support of Petitioners (Jan. 26, 2006) Original Image<br />
of this Document (PDF)<br />
• 2006 WL 235008 (Appellate Brief) Brief of<br />
Electronic Frontier Foundation, Public <strong>Patent</strong><br />
Foundation, American Association of Law Libraries,<br />
American Library Association and Special Libraries<br />
Association as Amici Curiae in Support of Petitioners<br />
(Jan. 26, 2006) Original Image of this Document<br />
(PDF)<br />
• 2006 WL 235009 (Appellate Brief) Brief for the<br />
Association of the Bar of the City of New York as<br />
Amicus Curiae in Support of Petitioners (Jan. 26,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 235010 (Appellate Brief) Brief of Time<br />
Warner Inc., Amazon.com, Inc., Chevron Corp.,<br />
Cisco Systems, Inc., Google Inc., IAC/Interactive<br />
Corp., Infineon Technologies AG, Shell Oil<br />
Company, Visa U.S.A., Inc., and Xerox Corporation<br />
as Amici Curiae in Support of Petitioners (Jan. 26,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 235011 (Appellate Brief) Brief for<br />
Amicus Curiae Computer & Communications<br />
Industry Association in Support of Petitioners (Jan.<br />
26, 2006) Original Image of this Document (PDF)<br />
• 2006 WL 236066 (Appellate Brief) Brief of Amici<br />
Curiae Securities Industry Association, the Financial<br />
Services Roundtable, Bond Market Association, and<br />
Futures Industry Association in Support of<br />
Petitioners (Jan. 26, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 236430 (Joint Appendix) JOINT<br />
APPENDIX, VOL. I (Jan. 26, 2006)<br />
• 2006 WL 236431 (Joint Appendix) JOINT<br />
APPENDIX, VOL. III (Jan. 26, 2006)<br />
• 2006 WL 236770 (Joint Appendix) JOINT<br />
APPENDIX, VOL. II (Jan. 26, 2006)<br />
• 2006 WL 226066 (Appellate Brief) Amicus Brief of<br />
Malla Pollack and Other Legal Scholars Supporting<br />
eBay Inc., et al. (Jan. 25, 2006) Original Image of<br />
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• 2006 WL 236068 (Appellate Brief) Brief of Law<br />
Professors as Amicus Curiae in Support of<br />
Respondent (Jan. 24, 2006)<br />
• 2006 WL 148639 (Appellate Brief) Brief of<br />
American Intellectual Property Law Association and<br />
Federal Circuit Bar Association as Amici Curiae in<br />
Support of Neither Party (Jan. 17, 2006) Original<br />
Image of this Document (PDF)<br />
• 2005 WL 2600844 (Appellate Petition, Motion and<br />
Filing) Reply Brief of Petitioner (Oct. 11, 2005)<br />
• 2005 WL 2381065 (Appellate Petition, Motion and<br />
Filing) Amicus Curiae Brief of the Business Software<br />
Alliance, Software & Information Industry<br />
Association, Information Technology Industry<br />
Council, and Information Technology Association of<br />
America in Support of Petitioner (Sep. 26, 2005)<br />
• 2005 WL 2381066 (Appellate Petition, Motion and<br />
Filing) Brief Amicus Curiae of Computer &<br />
Communications Industry Association in Support of<br />
Petitioners (Sep. 26, 2005)<br />
• 2005 WL 2381067 (Appellate Petition, Motion and<br />
Filing) Brief Amicus Curiae of Electronic Frontier<br />
Foundation in Support of Petitioners (Sep. 26, 2005)<br />
• 2005 WL 2381070 (Appellate Petition, Motion and<br />
Filing) Brief Amici Curiae of 35 Intellectual Property<br />
Professors in Support of the Petition for Certiorari<br />
(Sep. 26, 2005)<br />
• 2005 WL 2396812 (Appellate Petition, Motion and<br />
Filing) Brief in Opposition (Sep. 26, 2005)<br />
• 2005 WL 2381068 (Appellate Petition, Motion and<br />
Filing) Brief of Amici Curiae Qualcomm<br />
Incorporated, Tessera, Inc. and Biogen Idec Inc. in<br />
Support of Respondent (Sep. 23, 2005)<br />
• 2005 WL 2381069 (Appellate Petition, Motion and<br />
Filing) Brief of America Online, Inc., Applied<br />
Materials, Inc., Chevron Corporation, Cisco Systems,<br />
Inc., Google Inc., Shell Oil Company, and Visa<br />
U.S.A. Inc. as Amici Curiae in Support of Petitioner<br />
(Sep. 22, 2005)<br />
• 05-130 (Docket) (Jul. 27, 2005)<br />
• 2005 WL 1801263 (Appellate Petition, Motion and<br />
Filing) Petition for a Writ of Certiorari (Jul. 25, 2005)<br />
END OF DOCUMENT<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
434 F.Supp.2d 437 Page 1<br />
434 F.Supp.2d 437<br />
(Cite as: 434 F.Supp.2d 437)<br />
Briefs and Other Related Documents<br />
United States District Court,E.D. Texas,Tyler<br />
Division.<br />
z4 TECHNOLOGIES, INC., Plaintiff<br />
v.<br />
MICROSOFT CORPORATION, and Autodesk, Inc.,<br />
Defendants.<br />
No. 6:06-CV-142.<br />
June 14, 2006.<br />
Background: <strong>Patent</strong>ee brought infringement action<br />
against software manufacturer, alleging that<br />
manufacturer's products infringed its patented<br />
software activation technology. After jury returned<br />
verdict in its favor, patentee moved for permanent<br />
injunction.<br />
Holdings: The District Court, Davis, J., held that:<br />
(1) patentee failed to show that it would suffer<br />
irreparable harm by continuing infringement;<br />
(2) monetary damages for future infringement was<br />
adequate remedy at law;<br />
(3) harm that manufacturer would suffer if it were<br />
enjoined from selling software products that<br />
contained infringing technology and required to<br />
deactivate its product activation servers outweighed<br />
hardships that patentee would suffer in absence of<br />
injunction; and<br />
(4) negative effects on public weighed against<br />
permanent injunctive relief.<br />
Motion denied.<br />
[1] <strong>Patent</strong>s 291 317<br />
West Headnotes<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
When considering whether to award permanent<br />
injunctive relief to a prevailing plaintiff in a patent<br />
infringement dispute, courts should apply the<br />
traditional four-factor test used by courts of equity.<br />
[2] Injunction 212 9<br />
212 Injunction<br />
212I Nature and Grounds in General<br />
212I(B) Grounds of Relief<br />
212k9 k. Nature and Existence of Right<br />
Requiring Protection. Most Cited Cases<br />
To be entitled to permanent injunctive relief, a<br />
prevailing plaintiff must demonstrate: (1) that it has<br />
suffered an irreparable injury; (2) that remedies<br />
available at law, such as monetary damages, are<br />
inadequate to compensate for that injury; (3) that,<br />
considering the balance of hardships between the<br />
plaintiff and defendant, a remedy in equity is<br />
warranted; and (4) that the public interest would not<br />
be disserved by a permanent injunction.<br />
[3] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
Finding that patents were valid and infringed did not<br />
raise a presumption of irreparable harm necessary for<br />
permanent injunctive relief.<br />
[4] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
<strong>Patent</strong>ee failed to show that it would suffer<br />
irreparable harm by continuing infringement of its<br />
software activation technology, as required to support<br />
permanent injunction; there was no reason that a<br />
potential consumer or licensee of the patentee's<br />
technology would have been dissuaded from<br />
purchasing or licensing its product activation<br />
technology for use in its own software due to the<br />
presence of infringing technology in infringer's<br />
software, and continued infringement did not inhibit<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
434 F.Supp.2d 437 Page 2<br />
434 F.Supp.2d 437<br />
(Cite as: 434 F.Supp.2d 437)<br />
patentee's ability to market, sell, or license its<br />
patented technology.<br />
[5] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
Violation of the right to exclude does not inevitably<br />
lead to the conclusion that a patent holder cannot be<br />
adequately compensated by remedies at law such as<br />
monetary damages without first applying the<br />
principles of equity.<br />
[6] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
Monetary damages for future infringement of<br />
software activation patents was adequate remedy at<br />
law, in determining whether patentee was entitled to<br />
permanent injunctive relief; infringement did not<br />
exclude patentee from selling or licensing its product<br />
to any sector of the market or threaten its brand name<br />
recognition or good will in any way, and infringing<br />
product activation component of infringer's software<br />
was unrelated to the core functionality for which the<br />
software was purchased by consumers.<br />
[7] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
Harm that software manufacturer would suffer if it<br />
were enjoined from selling software products that<br />
contained infringing product activation technology<br />
and required to deactivate its product activation<br />
servers outweighed hardships that patentee would<br />
suffer in absence of injunction, in determining if<br />
patentee was entitled to permanent injunctive relief in<br />
connection with infringement of its software<br />
activation patents; redesigning its software products<br />
to remove product activation component would have<br />
created a significant hardship on manufacturer, and<br />
turning off activation servers would have flooded<br />
market with pirated software.<br />
[8] <strong>Patent</strong>s 291 317<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k317 k. Permanent Injunction. Most<br />
Cited Cases<br />
Negative effects on public weighed against<br />
permanent injunctive relief after it was determined<br />
that software manufacturer's products infringed<br />
patentee's software activation patents; redesign and<br />
re-release manufacturer's products could potentially<br />
disrupt their distribution and have an effect on the<br />
public due to the public's enormous reliance on those<br />
products, and deactivation of manufacturer's<br />
activation servers could result in increase in pirated<br />
versions of the software.<br />
<strong>Patent</strong>s 291 328(2)<br />
291 <strong>Patent</strong>s<br />
291XIII Decisions on the Validity, Construction,<br />
and Infringement of Particular <strong>Patent</strong>s<br />
291k328 <strong>Patent</strong>s Enumerated<br />
291k328(2) k. Original Utility. Most Cited<br />
Cases<br />
6,044,471, 6,785,825. Cited.<br />
*438 Elton Joe Kendall, Provost Umphrey, Dallas,<br />
TX, Thomas John Ward, Jr., Law Office of T. John<br />
Ward Jr., PC, Longview, TX, Ernie L. Brooks, Frank<br />
A. Angileri, John S. Leroy, John E. Nemazi, Robert<br />
C.J. Tuttle, Thomas A. Lewry, Brooks & Kushman<br />
PC, Southfield, MI, for Plaintiff.<br />
Isabella Fu, Katherine Ford Horvath, Microsoft<br />
Corporation, Redmond, WA, John Marcus<br />
Bustamante, Fish & Richardson, Austin, TX, John A.<br />
Dragseth, Fish & Richardson, Minneapolis, MN,<br />
John E. Gartman, Matthew C. Bernstein, Seth M.<br />
Sproul, Fish & Richardson, San Diego, CA, Jennifer<br />
Parker Ainsworth, Wilson, Sheehy, Knowles,<br />
Robertson & Cornelius PC, Allen Franklin Gardner,<br />
Michael Edwin Jones, Cindy Marie Allen, Potter<br />
Minton PC, Tyler, TX, for Defendants.<br />
MEMORANDUM OPINION AND ORDER<br />
DAVIS, District Judge.<br />
Before the Court is Plaintiff z4 Technologies, Inc.'s<br />
(“z4”) Motion and Brief for Entry of Permanent<br />
Injunction (Docket No. 333). For the reasons<br />
discussed below, z4's motion is DENIED.<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
434 F.Supp.2d 437 Page 3<br />
434 F.Supp.2d 437<br />
(Cite as: 434 F.Supp.2d 437)<br />
BACKGROUND<br />
z4 brought suit against Microsoft Corporation<br />
(“Microsoft”) and Autodesk (“Autodesk”), Inc.<br />
alleging infringement of U.S. <strong>Patent</strong> Nos. 6,044,471<br />
(“the 471 patent”) and 6,785,825 (“the 825 patent”).<br />
The patents disclose methods for limiting the<br />
unauthorized use of computer software, referred to as<br />
product activation. The case was tried to a jury on<br />
April 10 through April 19, 2006. At trial, z4<br />
asserted one claim of the 471 patent and two claims<br />
of the 825 patent. The jury found that Microsoft<br />
and Autodesk infringed all three claims and that<br />
Microsoft's infringement was willful. The jury also<br />
found that neither Microsoft nor Autodesk proved by<br />
clear and convincing evidence that any of the listed<br />
claims of the patents in the lawsuit were invalid.<br />
The jury awarded *439 $115 million in damages<br />
against Microsoft and $18 million against Autodesk.<br />
Specifically, the jury found that Microsoft's Office<br />
and Windows software products infringed the<br />
asserted claims of the two patents-in-suit. z4 asks the<br />
Court to enjoin Microsoft from making, using,<br />
selling, offering for sale, and/or importing its current<br />
software products that use product activation, i.e.<br />
Windows XP products since 2001 and Office<br />
products since 2000. z4's motion proposes that the<br />
Court order Microsoft to deactivate the servers that<br />
control product activation for Microsoft's infringing<br />
products and to re-design its Windows and Office<br />
software products to eliminate the infringing<br />
technology. Microsoft will release the next<br />
generation of its Windows and Office software-<br />
Windows Vista (2007) and Office (2007)-in January<br />
of 2007, and both products plan to eliminate the<br />
infringing product activation technology.<br />
APPLICABLE LAW<br />
[1][2] When considering whether to award permanent<br />
injunctive relief to a prevailing plaintiff in a patent<br />
infringement dispute, courts should apply the<br />
traditional four-factor test used by courts of equity.<br />
See eBay, Inc. v. MercExchange, LLC, --- U.S. ----, --<br />
--, 126 S.Ct. 1837, 1839, 164 L.Ed.2d 641 (2006).<br />
The prevailing plaintiff must demonstrate: “(1) that<br />
it has suffered an irreparable injury; (2) that<br />
remedies available at law, such as monetary damages,<br />
are inadequate to compensate for that injury; (3) that,<br />
considering the balance of hardships between the<br />
plaintiff and defendant, a remedy in equity is<br />
warranted; and (4) that the public interest would not<br />
be disserved by a permanent injunction.” Id. The<br />
Court held “the decision whether to grant or deny<br />
injunctive relief rests within the equitable discretion<br />
of the district courts, and that such discretion must be<br />
exercised consistent with traditional principles of<br />
equity, in patent disputes no less than in other cases<br />
governed by such standards.” Id. at 1841.<br />
ANALYSIS<br />
Irreparable Harm Suffered by z4<br />
[3] z4 contends that a finding of infringement and<br />
validity raises a rebuttable presumption of irreparable<br />
harm. z4 argues this presumption applies to the<br />
irreparable harm element of the test laid out by the<br />
Supreme Court in eBay for two reasons. First, z4<br />
argues that the presumption arises because the<br />
Supreme Court cited Amoco Production Co. v.<br />
Village of Gambell, Alaska, 480 U.S. 531, 542, 107<br />
S.Ct. 1396, 94 L.Ed.2d 542 (1987) in its eBay<br />
decision. z4 suggests that the Supreme Court's citing<br />
of Amoco Production is significant because in that<br />
case the Supreme Court indicated that the standard<br />
for a preliminary injunction is essentially the same as<br />
that for a permanent injunction. z4 then concludes<br />
that because the Federal Circuit has held that a strong<br />
showing of infringement and validity raises a<br />
presumption of irreparable harm in the context of a<br />
preliminary injunction, such a presumption must<br />
apply to permanent injunctions.<br />
Next, z4 contends that the Supreme Court's<br />
comparison of patent injunctions to copyright<br />
injunctions in the eBay decision supports the<br />
application of a presumption of irreparable harm. z4<br />
first concludes that the Federal Circuit derived its<br />
presumption of irreparable harm in preliminary<br />
injunction cases from the copyright law based on<br />
language from a footnote in Smith International Inc.<br />
v. Hughes Tool Co., that states, “this is the rule in<br />
copyright cases.” See 718 F.2d 1573, 1581 n. 7<br />
(Fed.Cir.1983). z4 then contends that this mention of<br />
copyright law by the Federal Circuit leads to the<br />
application of a rebuttable presumption with regard to<br />
permanent injunctions because the Supreme *440<br />
Court draws a parallel between the copyright act and<br />
the patent act in eBay.<br />
z4's arguments for the application of a presumption<br />
of irreparable harm are creative, but z4 cannot cite to<br />
any Supreme Court or Federal Circuit case that<br />
requires the application of a rebuttable presumption<br />
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of irreparable harm with regard to a permanent<br />
injunction. In Amoco Production, the Supreme<br />
Court stated that applying a presumption of<br />
irreparable harm in the context of an injunction “is<br />
contrary to traditional equitable principles.” See<br />
Amoco Prod. Co., 480 U.S. at 545, 107 S.Ct. 1396.<br />
Furthermore, in eBay, the Supreme Court indicated<br />
that an injunction may only issue “in accordance with<br />
the principles of equity” under both the patent and the<br />
copyright acts but does not in any way imply that a<br />
rebuttable presumption of irreparable harm should<br />
apply to permanent injunctions under either act. See<br />
eBay, 126 S.Ct. at 1840. Rather, the Supreme Court<br />
stated, “[A] plaintiff seeking a permanent injunction<br />
must satisfy a four-factor test before a court may<br />
grant such relief. A plaintiff must demonstrate: (1)<br />
that it has suffered an irreparable injury....” Id. at<br />
1839. This language does not imply a presumption,<br />
but places the burden of proving irreparable injury on<br />
the plaintiff. Moreover, in eBay, the Supreme Court<br />
warned against the application of categorical rules<br />
when applying the traditional principles of equity.<br />
See id. at 1840-41. z4's suggestion, that the right to<br />
exclude creates a presumption of irreparable harm, is<br />
not in line with the Supreme Court's holding, which<br />
mandates that courts balance the traditional principles<br />
of equity when considering the remedy of a<br />
permanent injunction in patent cases. Accordingly,<br />
the Court does not apply a presumption of irreparable<br />
harm.<br />
[4] z4 argues that it will suffer irreparable harm if<br />
Microsoft is not enjoined from infringing the patentsin-suit.<br />
z4 contends that it made tremendous efforts to<br />
commercialize its invention prior to the suit and that<br />
its failure to succeed was partly due to Microsoft's<br />
infringement. z4 implies that it was, and will<br />
continue to be, irreparably harmed by Microsoft's<br />
infringement because there is no way to calculate the<br />
economic success z4 might have enjoyed but for<br />
Microsoft's infringement.<br />
There is no logical reason that a potential consumer<br />
or licensee of z4's technology would have been<br />
dissuaded from purchasing or licensing z4's product<br />
activation technology for use in its own software due<br />
to Microsoft's infringement. Similarly, Microsoft's<br />
continued infringement does not inhibit z4's ability to<br />
market, sell, or license its patented technology to<br />
other entities in the market. Microsoft does not<br />
produce product activation software that it then<br />
individually sells, distributes, or licenses to other<br />
software manufacturers or consumers. If it did, then<br />
z4 might suffer irreparable harm in that Microsoft<br />
would be excluding z4 from selling or licensing its<br />
technology to those software manufacturers or<br />
consumers. However, Microsoft only uses the<br />
infringing technology as a small component of its<br />
own software, and it is not likely that any consumer<br />
of Microsoft's Windows or Office software purchases<br />
these products for their product activation<br />
functionality.<br />
In the absence of a permanent injunction against<br />
Microsoft, z4 will not suffer lost profits, the loss of<br />
brand name recognition or the loss of market share<br />
because of Microsoft's continued sale of the<br />
infringing products. These are the type of injuries<br />
that are often incalculable and irreparable. The only<br />
entity z4 is possibly prevented from marketing,<br />
selling or licensing its technology to absent an<br />
injunction is Microsoft. As discussed in the next<br />
*441 section, z4 can be compensated for any harm it<br />
suffers in the way of future infringement at the hands<br />
of Microsoft by calculating a reasonable royalty for<br />
Microsoft's continued use of the product activation<br />
technology. Accordingly, z4 has not demonstrated<br />
that it will suffer irreparable harm absent a permanent<br />
injunction.<br />
Adequacy of Remedies Available at Law<br />
[5][6] z4 argues that monetary damages for future<br />
infringement are not an adequate remedy because<br />
they cannot compensate z4 for the loss of its right to<br />
exclude Microsoft from making, using, offering for<br />
sale, or selling its invention in the absence of an<br />
injunction. z4's argument implies that a violation of<br />
the right to exclude under the patent act can never be<br />
remedied through money and that because any future<br />
infringement by Microsoft would violate z4's right to<br />
exclude such a violation could also not be remedied<br />
through monetary damages. However, in eBay, the<br />
Supreme Court indicated that the right to exclude<br />
alone is not sufficient to support a finding of<br />
injunctive relief and that such relief “ ‘may’ issue<br />
only ‘in accordance with the principles of equity’ ”<br />
under § 283 of the patent act. See eBay, 126 S.Ct. at<br />
1840. Accordingly, a violation of the right to<br />
exclude does not inevitably lead to the conclusion<br />
that a patent holder cannot be adequately<br />
compensated by remedies at law such as monetary<br />
damages without first applying the principles of<br />
equity.<br />
The violation of a patent owner's right to exclude can<br />
present a situation where monetary damages cannot<br />
adequately compensate the patent holder for that<br />
injury. For example, when an infringer saturates the<br />
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market for a patented invention with an infringing<br />
product or damages the patent holder's good will or<br />
brand name recognition by selling infringing<br />
products that infringer violates the patent holder's<br />
exclusionary right in a manner that cannot be<br />
compensated through monetary damages. This is<br />
because it is impossible to determine the portions of<br />
the market the patent owner would have secured but<br />
for the infringer or how much damage was done to<br />
the patent owner's brand recognition or good will due<br />
to the infringement. However, this is not the<br />
scenario in the present case. Microsoft's use of z4's<br />
intellectual property does not exclude z4 from selling<br />
or licensing its product to any sector of the market or<br />
threaten z4's brand name recognition or good will in<br />
any way. z4 is only excluded from selling or<br />
licensing its technology to Microsoft. Accordingly,<br />
z4 is not excluded from the use of its intellectual<br />
property in a way that cannot be calculated with<br />
reasonable certainty in the form of monetary<br />
damages, just as the past damages for infringement<br />
were calculated at trial.<br />
In his concurrence, Justice Kennedy instructed courts<br />
to be cognizant of the nature of the patent being<br />
enforced and the economic function of the patent<br />
holder when applying the equitable factors. Id. at<br />
1842 (Kennedy, J., concurring). Justice Kennedy<br />
specifically mentioned the situation where a<br />
“patented invention is but a small component of the<br />
product the companies seek to produce” and states<br />
that in such a situation, “legal damages may well be<br />
sufficient to compensate for the infringement and an<br />
injunction may not serve the public interest.” Id.<br />
(Kennedy, J., concurring). Here, product activation<br />
is a very small component of the Microsoft Windows<br />
and Office software products that the jury found to<br />
infringe z4's patents. The infringing product<br />
activation component of the software is in no way<br />
related to the core functionality for which the<br />
software is purchased by consumers. Accordingly,<br />
Justice Kennedy's comments support the conclusion<br />
that monetary damages would be sufficient to<br />
compensate z4 for any future infringement by<br />
Microsoft.<br />
*442 Microsoft indicated that it is phasing out all<br />
infringing products beginning with the release of its<br />
2007 versions of Windows and Office in January of<br />
2007. Microsoft calculates that it will then require<br />
two to three years after the release of these new<br />
products for all infringing products to be phased out<br />
of its product line. FN1 Calculating the appropriate<br />
royalty rate for any future infringement based on the<br />
sale of the older Microsoft products should not be too<br />
indefinite or difficult. Such future damages will not<br />
be based on injuries that are difficult to measure such<br />
as the loss of market share or damage to brand name<br />
recognition and good will, but will be based on a<br />
reasonable royalty for each of the infringing products<br />
sold by Microsoft. This calculation can be made<br />
based on the same reasonable royalty calculation<br />
used by the jury at trial and by referring to<br />
Microsoft's internal records showing the number of<br />
sales for the infringing copies of software during the<br />
time period. Furthermore, it is not a legitimate<br />
concern that Microsoft would be unable to pay<br />
damages incurred by z4 through any future<br />
infringement.<br />
FN1. Microsoft informed the Court that<br />
although it is releasing new non-infringing<br />
versions of its Windows and Office software<br />
in January 2007, the older infringing<br />
versions will not be completely phased out<br />
of the market for several years because<br />
many older computer systems in the<br />
marketplace will not be able to support the<br />
newer products for that period of time.<br />
For the reasons stated above, z4 has not demonstrated<br />
that monetary damages are insufficient to compensate<br />
it for any future infringement by Microsoft.<br />
The Balance of Hardships<br />
[7] z4's proposed permanent injunction includes two<br />
components. The first component involves<br />
enjoining Microsoft from making or selling its<br />
Windows and Office software products, after a<br />
reasonable time has been provided to allow Microsoft<br />
to redesign the products without the infringing<br />
product activation technology. The second<br />
component involves Microsoft immediately “turning<br />
off” or deactivating its current product activation<br />
servers and leaving them “off” until such time as<br />
Microsoft can restart them without infringing the<br />
patents-in-suit. The Court will consider the<br />
hardships related to these two components in turn.<br />
Microsoft argues that the resources, time, and<br />
expense required to redesign its Windows and Office<br />
software products would create a significant hardship<br />
on Microsoft. Redesigning Microsoft Windows and<br />
Office software products, even to remove a small<br />
component such as product activation, is undoubtably<br />
an enormous task. Microsoft argues that such an<br />
undertaking would require enormous resources and<br />
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(Cite as: 434 F.Supp.2d 437)<br />
expense. Microsoft submitted the declarations of<br />
Alexandra B. Rector, a Business Manager of<br />
Microsoft Office Sustaining Engineering, and Laura<br />
Joseph, a Program Manager on the Windows Release<br />
Management Team, as evidence of the hardship<br />
Microsoft would suffer if a permanent injunction<br />
requiring a redesign of the Office and Windows<br />
software products were granted. The declarations<br />
indicate that Microsoft would have to re-release its<br />
current versions of Office, with 450 separate<br />
variations in thirty-seven different languages, and<br />
Windows, with 600 separate variations in over forty<br />
languages. Microsoft contends that both products<br />
would have to be re-engineered, tested, repackaged,<br />
and then placed into the appropriate distribution<br />
channels. According to Microsoft, such an<br />
undertaking would require excessive resources and<br />
be exceedingly expensive. Furthermore, Microsoft<br />
claims that the scheduled release of its 2007<br />
Windows and Office products would likely be<br />
delayed if resources were *443 pulled from its<br />
development team to work on the re-release of the<br />
previous infringing Office and Windows products.<br />
Similarly, Microsoft argues that the repercussions of<br />
“turning off” its product activation system are<br />
incalculable, particularly in the likely event that the<br />
public became aware of the fact that the activation<br />
servers were deactivated. Microsoft argues that in<br />
such an event the market would be flooded with<br />
pirated software resulting in incalculable losses.<br />
Microsoft contends that without the deactivation<br />
servers it has no way of deactivating software that<br />
has been pirated and installed on multiple computers.<br />
Furthermore, Microsoft contends that when the<br />
product activation servers are “restarted” it would<br />
have no way of determining which copies of the<br />
programs installed over that period of time were<br />
legitimate legal copies of the product and which were<br />
illegal pirated versions. Microsoft claims this would<br />
inhibit it from servicing the legitimate copies with<br />
product updates and patches.<br />
z4 argues that it will suffer hardship because<br />
Microsoft will be using its intellectual property. As<br />
discussed above, Microsoft's use of z4's intellectual<br />
property is not to the exclusion of z4 in any major<br />
sense and, to the extent it is, can be remedied in the<br />
form of monetary damages. z4 argues that Microsoft<br />
is merely presenting an unlikely and purely<br />
hypothetical chain of events that would not in fact<br />
occur if its proposed injunction were granted.<br />
Although the arguments presented by Microsoft may<br />
be hypothetical, the scenarios Microsoft describes are<br />
not out of the realm of possibility and are in some<br />
instances quite likely. Importantly, the potential<br />
hardships Microsoft could suffer if the injunction<br />
were granted outweigh any limited and reparable<br />
hardships that z4 would suffer in the absence of an<br />
injunction.<br />
The Public Interest<br />
[8] Microsoft's Windows and Office software<br />
products are likely the most popular software<br />
products in the world. The vast majority of<br />
computers sold, whether to individuals, businesses,<br />
governments, or educational institutions, run on the<br />
Microsoft Windows operating system and employ the<br />
Microsoft Office suite of software.<br />
Microsoft argues that the redesign of its Windows<br />
and Office products would undoubtedly effect certain<br />
sectors of the public. Microsoft suggests that<br />
smaller computer manufacturers (called system<br />
builders), retail sellers, and the consumers of both<br />
would be effected if z4's proposed injunction were<br />
granted.<br />
Microsoft contends that the system builders would be<br />
harmed because of the time, testing, and expense<br />
required for these manufacturers to integrate a new<br />
release or re-release of Windows and Office products<br />
to be used with their computer systems. Although it<br />
is likely that changes to Windows or Office would<br />
not be significant enough to have as dramatic of an<br />
effect on the system builders as Microsoft proposes,<br />
such a re-release of the Microsoft products would<br />
likely create a burden for these manufacturers.<br />
Furthermore, Microsoft contends that a redesign of<br />
its products could result in the products being taken<br />
off the market for a short period of time. Microsoft<br />
urges that such an absence from the market, even if<br />
for only a week, would have a detrimental effect on<br />
the retail sellers of its products as well as the retail<br />
consumers.<br />
It is impossible to determine the actual effect that the<br />
implementation of such a re-design might have on the<br />
availability of Microsoft's products and the<br />
accessibility of those products to the public.<br />
However, it is likely that any minor disruption to the<br />
distribution of the products in question *444 could<br />
occur and would have an effect on the public due to<br />
the public's undisputed and enormous reliance on<br />
these products.<br />
Microsoft also proposes a host of repercussions to the<br />
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(Cite as: 434 F.Supp.2d 437)<br />
public resulting from the deactivation of the<br />
activation servers. Microsoft contends that, in the<br />
event the servers were deactivated, the market would<br />
be flooded with illegal, pirated copies of Windows<br />
and Office software, leaving unsuspecting customers<br />
with no way of determining the genuineness of their<br />
software. Microsoft argues that these unsuspecting<br />
purchasers of pirated software would be very<br />
susceptible to contracting computer viruses and other<br />
security breaches to their computer systems by<br />
installing pirated software. Furthermore, Microsoft<br />
contends that because it would be impossible for<br />
Microsoft to determine genuine versions from pirated<br />
versions once the system was reactivated, some<br />
legitimate users of Microsoft software might be<br />
unable to download product patches and updates.<br />
Again, although it is impossible to determine the<br />
actual events that would follow the deactivation of<br />
Microsoft's product activation servers, it is likely that<br />
the market would see an increase in pirated versions<br />
of the software. As a result, unsuspecting public<br />
consumers would undoubtably suffer some negative<br />
consequences.<br />
Under both aspects of z4's proposed permanent<br />
injunction, there is a risk that certain sectors of the<br />
public might suffer some negative effects. However,<br />
the Court is unaware of any negative effects that<br />
might befall the public in the absence of an<br />
injunction. Although these negative effects are<br />
somewhat speculative, such potential negative effects<br />
on the public weigh, even if only slightly, against<br />
granting an injunction. Accordingly, the public<br />
interest is likely to be disserved if a permanent<br />
injunction were entered against Microsoft.<br />
CONCLUSION<br />
z4 has not demonstrated that it will suffer irreparable<br />
harm in the absence of a permanent injunction. Any<br />
harm z4 might suffer can be adequately remedied<br />
through the recovery of monetary damages. The<br />
balance of the hardships, although speculative,<br />
weighs in favor of Microsoft. And certain sectors of<br />
the public could suffer some negative effects if the<br />
Court were to grant z4's proposed permanent<br />
injunction. Accordingly, a permanent injunction<br />
should not issue, and z4's motion is DENIED.<br />
In light of denying z4's proposed permanent<br />
injunction, an efficient method for z4's recovery of<br />
future monetary damages post-verdict is needed.<br />
The Court crafts such a remedy by severing z4's<br />
continuing causes of action for monetary damages<br />
due to Microsoft's continuing post-verdict<br />
infringement of z4's patents. Therefore, the Court<br />
SEVERS z4's causes of action for post-verdict<br />
infringement under cause number 6:06cv258 and<br />
ORDERS z4 to file an appropriate complaint within<br />
ten days of the issuance of this Memorandum<br />
Opinion and Order. The Court ORDERS Microsoft<br />
to file an answer to z4's complaint within the normal<br />
time allotted under the Federal Rules of Civil<br />
Procedure. Furthermore, the Court ORDERS<br />
Microsoft to file quarterly reports in the new action<br />
beginning on July 1, 2006 indicating the number of<br />
units sold with regard to all Microsoft products found<br />
to infringe z4's patents in this case. This will<br />
preserve z4's rights to future monetary damages in an<br />
efficient manner, while relieving Microsoft of the<br />
hardship and expense that would be occasioned by<br />
the issuance of a permanent injunction. This case<br />
will proceed*445 on to entry of final judgment and<br />
whatever resolution may follow.<br />
E.D.Tex.,2006.<br />
z4 Technologies, Inc. v. Microsoft Corp.<br />
434 F.Supp.2d 437<br />
Briefs and Other Related Documents (Back to top)<br />
• 2006 WL 2068051 (Trial Motion, Memorandum<br />
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• 2006 WL 2068047 (Trial Motion, Memorandum<br />
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• 2006 WL 2068048 (Trial Motion, Memorandum<br />
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© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
434 F.Supp.2d 437 Page 8<br />
434 F.Supp.2d 437<br />
(Cite as: 434 F.Supp.2d 437)<br />
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• 2006 WL 2068050 (Trial Motion, Memorandum<br />
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• 2006 WL 2068043 (Trial Motion, Memorandum<br />
and Affidavit) Autodesk's and Microsoft's Amended<br />
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• 2006 WL 2068044 (Trial Motion, Memorandum<br />
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(May 16, 2006) Original Image of this Document<br />
(PDF)<br />
• 2006 WL 2068036 (Trial Motion, Memorandum<br />
and Affidavit) Microsoft's and Autodesk's Opposition<br />
to z4's Motion and Brief in Support for Prejudgment<br />
Interest (May 11, 2006) Original Image of this<br />
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• 2006 WL 2068037 (Trial Motion, Memorandum<br />
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• 2006 WL 2068038 (Trial Motion, Memorandum<br />
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Products, and Willfulness (May 11, 2006) Original<br />
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• 2006 WL 2068039 (Trial Motion, Memorandum<br />
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Microsoft's Motion for Judgment as a Matter of Law<br />
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• 2006 WL 2068040 (Trial Motion, Memorandum<br />
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• 2006 WL 2068041 (Trial Motion, Memorandum<br />
and Affidavit) Microsoft's and Autodesk's Opposition<br />
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• 2006 WL 2068042 (Trial Motion, Memorandum<br />
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• 2006 WL 1288485 (Trial Motion, Memorandum<br />
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• 2006 WL 1288488 (Trial Motion, Memorandum<br />
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• 2006 WL 1288511 (Trial Motion, Memorandum<br />
and Affidavit) Microsoft's Motion for Judgment as a<br />
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Products, and Willfulness (May 1, 2006) Original<br />
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• 2006 WL 1288512 (Trial Motion, Memorandum<br />
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• 2006 WL 2068033 (Trial Motion, Memorandum<br />
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• 2006 WL 2068034 (Trial Motion, Memorandum<br />
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• 2006 WL 2068035 (Trial Motion, Memorandum<br />
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• 2006 WL 1294615 () Transcript of Trial (Apr. 18,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 1294621 () Transcript of Trial (Apr. 18,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 1294625 () Transcript of Trial (Apr. 18,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 1294630 () Transcript of Trial (Apr. 18,<br />
2006) Original Image of this Document (PDF)<br />
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2006) Original Image of this Document (PDF)<br />
• 2006 WL 1071247 (Trial Motion, Memorandum<br />
and Affidavit) Motion in Limine No. 14: Regarding<br />
z4's Untimely April 2006 ""DRM'' License Discovery<br />
(Apr. 15, 2006) Original Image of this Document<br />
(PDF)<br />
• 2006 WL 1294610 () Transcript of Trial (Apr. 12,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 1294618 () Transcript of Trial (Apr. 12,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 1294627 () Transcript of Trial (Apr. 12,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 1294634 () Transcript of Trial (Apr. 12,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 2068032 (Trial Motion, Memorandum<br />
and Affidavit) z4's Motion and Brief in Support to<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
434 F.Supp.2d 437 Page 9<br />
434 F.Supp.2d 437<br />
(Cite as: 434 F.Supp.2d 437)<br />
Exclude Testimony Relating to Brazilian Publisher<br />
98 Registration Data (Apr. 12, 2006) Original Image<br />
of this Document (PDF)<br />
• 2006 WL 2068031 (Trial Motion, Memorandum<br />
and Affidavit) z4's Motion in Limine to Exclude<br />
""Derivation'' Evidence That Violates This Court's<br />
Bifurcation Order (Apr. 10, 2006) Original Image of<br />
this Document (PDF)<br />
• 2006 WL 2068030 (Trial Motion, Memorandum<br />
and Affidavit) Defendant Microsoft Corporation's<br />
Motion in Limine No. 13 Relating to the Testimony<br />
of Microsoft's Corporate Representative (Apr. 9,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 2068029 (Trial Motion, Memorandum<br />
and Affidavit) Defendants' Opposition to z4<br />
Technologies' Motion in Limine to Exclude<br />
Disparaging Characterizations of z4, David Colvin<br />
and the Asserted <strong>Patent</strong> (Mar. 22, 2006) Original<br />
Image of this Document (PDF)<br />
• 2006 WL 1071244 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc.'s<br />
Motion in Limine and Brief in Support Regarding<br />
Documents from the <strong>Patent</strong> Attorney's File for the<br />
'825 <strong>Patent</strong> (Mar. 20, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 1071246 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc.'s<br />
Motion in Limine and Brief in Support Regarding<br />
Defendants' Allegations of Spoliation (Mar. 20,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 2068025 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc.'s<br />
Motion in Limine and Brief in Support From the<br />
Hearing of the Jury the Engagement Terms of<br />
Plaintiff's Counsel (Mar. 20, 2006) Original Image of<br />
this Document (PDF)<br />
• 2006 WL 2068026 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc.'s<br />
Motion in Limine and Brief in Support to Exclude<br />
Microsoft Employees from Testifying on Topics 3-8<br />
of z4's Rule 30(b)(6) Deposition Notice of Defendant<br />
Microsoft Corporation (Mar. 20, 2006) Original<br />
Image of this Document (PDF)<br />
• 2006 WL 2068027 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc.'s<br />
Motion in Limine and Brief in Support to Exclude<br />
Disparaging Characterizations of z4, David Colvin<br />
and the Asserted <strong>Patent</strong>s (Mar. 20, 2006) Original<br />
Image of this Document (PDF)<br />
• 2006 WL 2068028 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc.'s<br />
Motion in Limine and Brief in Support Regarding<br />
Admissibility of Conception and Development<br />
Documents (Mar. 20, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 1068564 () Declaration of David S.<br />
Colvin in Support of z4's Motion for Partial<br />
Summary Judgment on Inequitable Conduct (Mar. 3,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 1071241 (Trial Motion, Memorandum<br />
and Affidavit) z4's Reply Brief on Its Motion to<br />
Exclude the Testimony of Albert B. Kimball, Jr.<br />
(Mar. 3, 2006) Original Image of this Document<br />
(PDF)<br />
• 2006 WL 1071243 (Trial Motion, Memorandum<br />
and Affidavit) Z4's Reply in Support of Its Motion<br />
for Partial Summary Judgment Regarding Inequitable<br />
Conduct (Mar. 3, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 1071239 (Trial Motion, Memorandum<br />
and Affidavit) z4's Motion for Partial Summary<br />
Judgment on Inequitable Conduct (Jan. 20, 2006)<br />
Original Image of this Document (PDF)<br />
• 2006 WL 1071240 (Trial Motion, Memorandum<br />
and Affidavit) z4's Motion and Brief to Exclude the<br />
Testimony of Albert B. Kimball, Jr. (Jan. 20, 2006)<br />
Original Image of this Document (PDF)<br />
• 2006 WL 2068023 (Trial Motion, Memorandum<br />
and Affidavit) Reply to Second Amended<br />
Counterclaims of Autodesk, Inc. (Jan. 6, 2006)<br />
Original Image of this Document (PDF)<br />
• 2006 WL 2068024 (Trial Motion, Memorandum<br />
and Affidavit) Reply to Second Amended<br />
Counterclaims of Microsoft Corporation (Jan. 6,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 2066676 () Preliminary Expert Report of<br />
Walter Bratic (2006) Original Image of this<br />
Document (PDF)<br />
• 2005 WL 4428918 (Trial Motion, Memorandum<br />
and Affidavit) Defendant Microsoft Corporation's<br />
Sur-Reply to Plaintiff's Fed. R. Civ. P. 37(d) Motion<br />
and Brief for Sanctions for Failure to Produce Rule<br />
30(b)(6) Witnesses (Oct. 7, 2005) Original Image of<br />
this Document (PDF)<br />
• 2005 WL 4427571 () Expert Report of Aviel David<br />
Rubin Re Validity of z4 Technologies, Inc. <strong>Patent</strong>s<br />
(Oct. 6, 2005) Original Image of this Document<br />
(PDF)<br />
• 2005 WL 3970643 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc.'s Brief<br />
in Opposition to Defendant Autodesk, Inc.'s Motion<br />
for Protective Order (Aug. 29, 2005) Original Image<br />
of this Document (PDF)<br />
• 2005 WL 3970658 (Trial Motion, Memorandum<br />
and Affidavit) Defendant Autodesk, Inc.'s Opposed<br />
Motion for Protective Order (Aug. 22, 2005) Original<br />
Image of this Document (PDF)<br />
• 2005 WL 3970657 (Trial Pleading) Defendants'<br />
Sur-Reply to z4's Reply Claim Construction Brief<br />
(Aug. 2, 2005) Original Image of this Document<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
434 F.Supp.2d 437 Page 10<br />
434 F.Supp.2d 437<br />
(Cite as: 434 F.Supp.2d 437)<br />
(PDF)<br />
• 2005 WL 3970656 (Trial Pleading) Plaintiff's<br />
Corrected Reply Brief on Claim Construction (Jul.<br />
27, 2005) Original Image of this Document (PDF)<br />
• 2005 WL 3970655 (Trial Pleading) Plaintiff's Reply<br />
Brief on Claim Construction (Jul. 26, 2005) Original<br />
Image of this Document (PDF)<br />
• 2005 WL 4428924 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc.'s Sur-<br />
Reply Brief in Opposition to Defendants' Motion to<br />
Supplement Joint Preliminary Invalidity Contentions<br />
(Jul. 7, 2005) Original Image of this Document<br />
(PDF)<br />
• 2005 WL 3970654 (Trial Pleading) Plaintiff z4<br />
Technologies, Inc.'s Opening Brief on Claim<br />
Construction (Jul. 5, 2005) Original Image of this<br />
Document (PDF)<br />
• 2005 WL 4428923 (Trial Motion, Memorandum<br />
and Affidavit) Defendant Microsoft Corporation's<br />
and Autodesk, Inc.'s Reply to z4'S Opposition to<br />
Motion to Supplement Joint Preliminary Invalidity<br />
Contentions (Jul. 5, 2005) Original Image of this<br />
Document (PDF)<br />
• 2005 WL 4428922 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc.'s Brief<br />
in Opposition to Defendants' Motion to Supplement<br />
Joint Preliminary Invalidity Contentions (Jun. 23,<br />
2005) Original Image of this Document (PDF)<br />
• 2005 WL 3970653 (Trial Motion, Memorandum<br />
and Affidavit) Defendants Microsoft Corporation's<br />
and Autodesk, Inc.'s Surreply in Support of their<br />
Opposition to Z4 Technologies, Inc.'s Rule 37<br />
Motion to Compel (Jun. 17, 2005) Original Image of<br />
this Document (PDF)<br />
• 2005 WL 3970652 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc.'s Reply<br />
Brief on Its Rule 37 Motion to Compel Defendants<br />
Microsoft Corporation and Autodesk, Inc. to Comply<br />
with Rule 33(d) and Rule 34(b) in Production of<br />
Documents (Jun. 10, 2005) Original Image of this<br />
Document (PDF)<br />
• 2005 WL 3970651 (Trial Motion, Memorandum<br />
and Affidavit) Defendant Microsoft Corporation's<br />
and Autodesk, Inc.'s Reply in Support of Their<br />
Motion to Compel Continuation of the Deposition of<br />
David Colvin and the Production of Documents (Jun.<br />
9, 2005) Original Image of this Document (PDF)<br />
• 2005 WL 3970577 () Declaration of David S.<br />
Colvin in Support of Plaintiff's Opposition to<br />
Defendants' Motion to Compel Continuation of the<br />
Deposition of David Colvin and Production of<br />
Documents (Jun. 3, 2005) Original Image of this<br />
Document (PDF)<br />
• 2005 WL 3970650 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc's Brief<br />
in Opposition to Defendants' Motion to Compel<br />
Continuation of the Deposition of David Colvin and<br />
the Production of Documents (Jun. 3, 2005) Original<br />
Image of this Document (PDF)<br />
• 2005 WL 3970649 (Trial Motion, Memorandum<br />
and Affidavit) Defendants Microsoft Corporation and<br />
Autodesk, Inc.'s Opposed Motion to Compel<br />
Continuation of the Deposition of David Colvin and<br />
the Production of Documents (May 19, 2005)<br />
Original Image of this Document (PDF)<br />
• 2005 WL 3970648 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff z4 Technologies, Inc's Rule<br />
37 Motion to Compel Defendants Microsoft<br />
Corporation and Autodesk, Inc. to Comply with Rule<br />
33(d) and Rule 34(b) in Production of Documents<br />
and Brief in Support (May 17, 2005) Original Image<br />
of this Document (PDF)<br />
• 2005 WL 3970646 (Trial Pleading) Reply to<br />
Amended Counterclaims of Autodesk, Inc. (Apr. 25,<br />
2005) Original Image of this Document (PDF)<br />
• 2005 WL 3970647 (Trial Pleading) Reply to<br />
Amended Counterclaims of Microsoft Corporation<br />
(Apr. 25, 2005) Original Image of this Document<br />
(PDF)<br />
• 2005 WL 3970642 (Trial Pleading) Defendant<br />
Microsoft Corporation's First Amended Answer and<br />
Counterclaims (Apr. 11, 2005) Original Image of this<br />
Document (PDF)<br />
• 2005 WL 3970644 (Trial Pleading) Defendant<br />
Microsoft Corporation's First Amended Answer and<br />
Counterclaims (Apr. 11, 2005) Original Image of this<br />
Document (PDF)<br />
• 2005 WL 3970645 (Trial Pleading) Defendant<br />
Autodesk, Inc.'s First Amended Answer and<br />
Counterclaims (Apr. 11, 2005) Original Image of this<br />
Document (PDF)<br />
• 2005 WL 4428921 (Trial Motion, Memorandum<br />
and Affidavit) Reply to z4 Technologies, Inc.'s Brief<br />
in Opposition to Microsoft Corporation and<br />
Autodesk, Inc.'s Opposed Motion to Modify the<br />
Protective Order (Mar. 21, 2005) Original Image of<br />
this Document (PDF)<br />
• 2005 WL 4428920 (Trial Motion, Memorandum<br />
and Affidavit) z4 Technologies, Inc.'s Brief in<br />
Opposition to Microsoft Corporation and Autodesk,<br />
Inc.'s Opposed Motion to Modify the Protective<br />
Order (Mar. 11, 2005) Original Image of this<br />
Document (PDF)<br />
• 2005 WL 4428919 (Trial Motion, Memorandum<br />
and Affidavit) Microsoft Corporation and Autodesk,<br />
Inc.'s Opposed motion to Modify The Protective<br />
Order (Mar. 1, 2005) Original Image of this<br />
Document (PDF)<br />
• 2004 WL 3770563 (Trial Pleading) Defendant<br />
Microsoft Corporation's Answer and Counterclaims<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
434 F.Supp.2d 437 Page 11<br />
434 F.Supp.2d 437<br />
(Cite as: 434 F.Supp.2d 437)<br />
(Nov. 16, 2004) Original Image of this Document<br />
(PDF)<br />
• 2004 WL 3770564 (Trial Pleading) Defendant<br />
Autodesk, Inc.'s Answer and Counterclaims (Nov.<br />
16, 2004) Original Image of this Document (PDF)<br />
• 2004 WL 4443232 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiff's Original Complaint for<br />
<strong>Patent</strong> Infringement (Sep. 22, 2004) Original Image<br />
of this Document (PDF)<br />
• 2004 WL 4443235 (Trial Pleading) Plaintiff's<br />
Original Complaint for <strong>Patent</strong> Infringement (Sep. 22,<br />
2004) Original Image of this Document (PDF)<br />
• 6:06cv00142 (Docket) (Sep. 22, 2004)<br />
END OF DOCUMENT<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
Page 1<br />
FINISAR CORP., Plaintiff, v. THE DIRECTV GROUP, INC., ET AL., Defendants.<br />
Civil Action No. 1:05-CV-264<br />
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF<br />
TEXAS, BEAUMONT DIVISION<br />
2006 U.S. Dist. LEXIS 76380<br />
July 7, 2006, Filed<br />
SUBSEQUENT HISTORY: Costs and fees proceeding<br />
at Finisar Corp. v. DirecTV Group, 2006 U.S. Dist.<br />
LEXIS 71138 (E.D. Tex., Aug. 3, 2006)<br />
PRIOR HISTORY: Finisar Corp. v. DirecTV Group,<br />
Inc., 2006 U.S. Dist. LEXIS 25268 (E.D. Tex., May 2,<br />
2006)<br />
COUNSEL: [*1] For Finisar Corporation, A Delaware<br />
Corporation, Plaintiff: Lawrence Louis Germer, LEAD<br />
ATTORNEY, Germer Bersen & Gertz, Beaumont, TX;<br />
C J Veverka, David R Todd, David R Wright, Eric L<br />
Maschoff, Kirk R Harris, Larry R Laycock, Mark W<br />
Ford,R Parrish Freeman, Workman Nydegger & Seeley,<br />
Salt Lake City, UT; H. Craig Hall, Law Office of H.<br />
Craig Hall, Jr., West Valley, UT.<br />
For DirecTV Group INC The, A Delaware Corporation,<br />
Defendant: J Thad Heartfield, LEAD ATTORNEY, Law<br />
Offices of J. Thad Heartfield, Beaumont, TX; Maria K<br />
Nelson, LEAD ATTORNEY,Charles A Kertell, Giam M<br />
Nguyen, Kevin G McBride, Marsha E Mullin, Steven J<br />
Corr, Victor George Savikas, Jones Day -California, Los<br />
Angeles, CA; Gregory A Castanias, Jones Day Reavis &<br />
Pogue, Washington, DC;Louis Touton, Yolanda Orozco,<br />
Jones Day- Los Angeles, Los Angeles, CA; Michael J<br />
Newton, Jones Day, Dallas, TX; Patrick Connell<br />
McGinnis, Pat McGinnis, Attorney at Law, Beaumont,<br />
TX.<br />
For DirecTV Holdings LLC, A Delaware Limited Liability<br />
Company, DirecTV Enterprises LLC, A Delaware<br />
Limited Liability Company, DirectTV Operations LLC,<br />
A California Corporation, Defendants: J Thad Heartfield,<br />
LEAD ATTORNEY, Law Offices of J. Thad Heartfield,<br />
[*2] Beaumont, TX; Giam M Nguyen, Kevin G<br />
McBride, Marsha E Mullin, Steven J Corr, Victor<br />
George Savikas, Jones Day -California, Los Angeles,<br />
CA; Gregory A Castanias, Jones Day Reavis & Pogue,<br />
Washington, DC; Louis Touton, Yolanda Orozco, Jones<br />
Day- Los Angeles, Los Angeles, CA; Michael J Newton,<br />
Jones Day, Dallas, TX; Patrick Connell McGinnis, Pat<br />
McGinnis, Attorney at Law, Beaumont, TX.<br />
For Hughes Network Systems Inc, A Delaware Corporation,<br />
Defendant:J Thad Heartfield, LEAD ATTORNEY,<br />
Law Offices of J. Thad Heartfield, Beaumont, TX; Giam<br />
M Nguyen, Kevin G McBride, Marsha E Mullin, Steven<br />
J Corr, Victor George Savikas, Jones Day -California,<br />
Los Angeles, CA; Louis Touton, Jones Day- Los Angeles,<br />
Los Angeles, CA;Michael J Newton, Jones Day,<br />
Dallas, TX; Patrick Connell McGinnis, Pat McGinnis,<br />
Attorney at Law, Beaumont, TX.<br />
For DirecTV Inc, A California Corporation, Defendant:<br />
Allan W Janes, LEAD ATTORNEY, Jones Day - Irvine,<br />
Irvine, CA; J Thad Heartfield, LEAD ATTORNEY, Law<br />
Offices of J. Thad Heartfield, Beaumont, TX; Giam M<br />
Nguyen, Kevin G McBride, Marsha E Mullin, Steven J<br />
Corr, Victor George Savikas, Jones Day -California, Los<br />
Angeles, CA; Gregory A Castanias, Jones Day Reavis<br />
[*3] & Pogue, Washington, DC; Louis Touton, Yolanda<br />
Orozco, Jones Day- Los Angeles, Los Angeles, CA; Michael<br />
J Newton, Jones Day, Dallas, TX; Patrick Connell<br />
McGinnis, Pat McGinnis, Attorney at Law, Beaumont,<br />
TX.<br />
For Hughes Network Systems Inc, A Delaware Corporation,<br />
DirecTV Inc, A California Corporation, DirecTV<br />
Group Inc The, A Delaware Corporation, DirecTV Holdings<br />
LLC, A Delaware Limited Liability Company,<br />
DirecTV Enterprises LLC, A Delaware Limited Liability<br />
Company, DirecTV Operations LLC, A California Corporation,<br />
Counter Claimants: J Thad Heartfield, LEAD<br />
ATTORNEY, Law Offices of J. Thad Heartfield, Beaumont,<br />
TX; Marsha E Mullin, Victor George Savikas,<br />
Jones Day -California, Los Angeles, CA; Michael J<br />
Newton, Jones Day, Dallas, TX.<br />
Finisar Corporation, A Delaware Corporation, Counter<br />
Defendant: H. Craig Hall, Law Office of H. Craig Hall,<br />
Jr., West Valley, UT.
2006 U.S. Dist. LEXIS 76380, *<br />
Page 2<br />
JUDGES: JUDGE RON CLARK.<br />
OPINION BY: RON CLARK<br />
OPINION:<br />
FINAL JUDGMENT<br />
Pursuant to Rule 58 of the Federal Rules of Civil<br />
Procedure and in accordance with the jury verdict delivered<br />
on June 23, 2006 and the Court's oral findings and<br />
conclusions entered on the record July 6, 2006, the [*4]<br />
Court hereby enters judgment for Plaintiff Finisar Corp.<br />
and against Defendants The DirecTV Group, Inc.,<br />
DirecTV Holdings, LLC, DirecTV Enterprises, LLC,<br />
DirecTV Operations, LLC, DirecTV, Inc., and Hughes<br />
Network Systems, Inc. for infringement of U.S. <strong>Patent</strong><br />
No. 5,404,505, claims 16, 17, 22, 24, 26, 39, and 44. IT<br />
IS THEREFORE ORDERED that Plaintiff Finisar<br />
Corp. shall have and recover from Defendants The<br />
DirecTV Group, Inc., DirecTV Holdings, LLC, DirecTV<br />
Enterprises, LLC, DirecTV Operations, LLC, DirecTV,<br />
Inc., and Hughes Network Systems, Inc., jointly and severally,<br />
the total sum of $ 103,920,250.25, plus prejudgment<br />
interest at the agreed rate of 6%, calculated as<br />
stated on the record at the July 6, 2006 hearing, on the<br />
damages found by the jury, said prejudgment interest<br />
totaling $ 13,359,276.00, together with post judgment<br />
interest on the entire sum calculated pursuant to 28<br />
U.S.C. § 1961.<br />
For the reasons stated at the July 6, 2006 hearing,<br />
the Court denied Plaintiff's motion for injunctive relief<br />
and granted a compulsory license. Defendants are hereby<br />
ORDERED, for the remaining life of the ' 505 patent, to<br />
pay Plaintiff an ongoing royalty [*5] of $ 1.60 per Integrated<br />
Receiver Decoder, commonly referred to as a set<br />
top box, activated by or on behalf of or for any of the<br />
named Defendants or their present or future affiliates or<br />
subsidiaries after June 16, 2006. Royalties shall be paid<br />
quarterly accompanied by a statement in accordance with<br />
the provisions of paragraph 3.8 of the MPEG-2 <strong>Patent</strong><br />
Portfolio License, dated February 22, 2001, granted to<br />
Hughes Network Systems, Inc. Payments shall begin<br />
three months after the date of signing of this judgment<br />
and shall be made quarterly thereafter. Payments not<br />
made within 14 days of the date due shall accrue interest<br />
at the rate of 10%, compounded monthly. Finisar shall<br />
have the right to request audits in accordance with the<br />
provisions of paragraph 3.9 of said MPEG-2 <strong>Patent</strong> Portfolio<br />
License. It is anticipated that, as sophisticated entities<br />
with experience in licensing agreements, the parties<br />
may wish to agree to more comprehensive or convenient<br />
terms. The parties shall promptly notify the court of any<br />
such agreement. The court maintains jurisdiction to enforce<br />
this portion of the Final Judgment.<br />
Costs are taxed against Defendants The DirecTV<br />
Group, Inc., DirecTV Holdings, LLC, [*6] DirecTV<br />
Enterprises, LLC, DirecTV Operations, LLC, DirecTV,<br />
Inc., and Hughes Network Systems, Inc. jointly and severally.<br />
All relief not specifically granted herein is denied.<br />
All pending motions not previously ruled on are denied.<br />
This is a Final Judgment and is appealable.
Page 1<br />
LEXSEE 2006 US DIST. LEXIS 61600<br />
PAICE LLC, Plaintiff, v. TOYOTA MOTOR CORP., et al., Defendants.<br />
2:04-CV-211-DF<br />
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF<br />
TEXAS, MARSHALL DIVISION<br />
2006 U.S. Dist. LEXIS 61600<br />
August 16, 2006, Decided<br />
August 16, 2006, Filed<br />
SUBSEQUENT HISTORY: Motion for new trial denied<br />
by Paice LLC v. Toyota Motor Corp., 2006 U.S.<br />
Dist. LEXIS 61598 (E.D. Tex., Aug. 16, 2006)<br />
COUNSEL: [*1] For Paice LLP, Plaintiff: Samuel<br />
Franklin Baxter, Attorney at Law, Marshall, TX; Ahmed<br />
J Davis, Ruffin B Cordell, Fish & Richardson PC -<br />
Washington DC, Washington, DC; Robert E Hillman,<br />
Fish & Richardson PC, Bostan, MA.<br />
For Toyota Motors Corp, a Japanese Corporation, Toyota<br />
Motor North America Inc, Toyota Motor Sales USA Inc,<br />
Defendants: Fred Grasso, Jeffrey Gerchick, Thomas R<br />
Makin, George E Badenoch, Kenyon &Kenyon DC,<br />
Washington DC; Nicholas H Patton, Patton & Tidwell,<br />
Texarkana, TX; John Flock, T Cy Walker, Kenyon &<br />
Kenyon - New York, New York, NY; Justin Kurt Truelove,<br />
Patton & Tidwell, Texarkana, TX.<br />
For Toyota Motor North America Inc, Toyota Motor<br />
Sales USA Inc, Toyota Motors Corp, a Japanese Corporation,<br />
Counter Claimants: Fred Grasso, Jeffrey Gerchick,<br />
Thomas R Makin, Kenyon &Kenyon DC, Washington<br />
DC; Justin Kurt Truelove, Patton & Tidwell, Texarkana,<br />
TX.<br />
JUDGES: DAVID FOLSOM, UNITED STATES<br />
DISTRICT JUDGE.<br />
OPINION BY: DAVID FOLSOM<br />
OPINION:<br />
ORDER<br />
Before the Court is Plaintiff Paice LLC's ("Paice")<br />
Motion for Entry of an Injunction. Dkt. No. 207. Also<br />
before the Court is Defendants' Combined (1) Opposition<br />
to Paice LLC's Motion for Entry of an Injunction and (2)<br />
In the [*2] Alternative, Motion for a Stay of Any Injunction<br />
Entered and Plaintiff's Combined Response to Toyota's<br />
Motion for Stay and Reply in Support of Its Motion<br />
for Injunction. Dkt. Nos. 212 and 219, respectively. On<br />
April 25, 2006 the Court heard the parties on these motions.<br />
Subsequent to the hearing, the parties submitted<br />
letter briefing to the Court. 6/23/06 Letter from G. Badenoch,<br />
6/30/06 Letter from R. Cordell, and 7/13/06 Letter<br />
from G. Badenoch. Having considered the motions, all<br />
other relevant briefing, and the applicable law, the Court<br />
finds that Plaintiff's Motion for Injunction should be<br />
DENIED.<br />
I. BACKGROUND<br />
In this patent infringement action, Plaintiff claimed<br />
three of Defendants' hybrid vehicles infringe three of<br />
Plaintiff's patents, U.S. <strong>Patent</strong> Nos. 5,343,970 ("the '970<br />
patent"), 6,209,672 ("the '672 patent"), and 6,554,088<br />
("the '088 patent") (collectively, the "patents-in-suit"). n1<br />
Plaintiff alleged that nine claims among three patents<br />
were literally infringed by Defendants' accused vehicles<br />
and that ten claims were infringed under the doctrine of<br />
equivalents. Plaintiff also argued that Defendants' alleged<br />
infringement was willful.<br />
[*3]<br />
n1 A detailed explanation of each of the asserted<br />
patents and the underlying technology can<br />
be found in the Court's Claim Construction Order.<br />
Dkt. No. 91. The present Order assumes familiarity<br />
with the patents-in-suit.<br />
In December 2005, the case was tried to a jury. The<br />
jury found that Defendants' accused vehicles infringed<br />
claims 11 and 39 of the '970 patent under the doctrine of<br />
equivalents, but found no further infringement. The jury
2006 U.S. Dist. LEXIS 61600, *<br />
Page 2<br />
did not find Defendants' infringement was willful. Plaintiff<br />
now moves for entry of a permanent injunction.<br />
II. LEGAL PRINCIPLES<br />
Recently the Supreme Court revisited the propriety<br />
of issuing permanent injunctions as a matter of course<br />
after a finding of infringement in patent cases. eBay Inc.<br />
v. MercExchange, L.L.C., 126 S. Ct. 1837, 1839-1841,<br />
164 L. Ed. 2d 641 (U.S. 2006) (hereinafter "eBay"). Observing<br />
the existence of a "'general rule,' unique to patent<br />
disputes" that mandated the issuance of a permanent injunction<br />
once infringement and validity were decided,<br />
the Supreme Court explored the origins of this general<br />
rule and compared it to other instances in which courts<br />
are faced with deciding whether or not to issue equitable<br />
relief. Id. The Supreme Court determined that equitable<br />
relief is not mandatory in patent cases, but instead should<br />
be decided in accordance with traditional equitable considerations.<br />
Id.<br />
To this end, a plaintiff seeking [*4] a permanent injunction<br />
must satisfy a four-factor test before a court may<br />
grant such relief:<br />
A plaintiff must demonstrate: (1) that it<br />
has suffered an irreparable injury; (2) that<br />
remedies available at law, such as monetary<br />
damages, are inadequate to compensate<br />
for that injury; (3) that, considering<br />
the balance of hardships between the<br />
plaintiff and defendant, a remedy in equity<br />
is warranted; and (4) that the public<br />
interest would not be disserved by a permanent<br />
injunction.<br />
Id. Further, the Supreme Court held that:<br />
[T]he decision whether to grant or deny<br />
injunctive relief rests within the equitable<br />
discretion of the district courts, and that<br />
such discretion must be exercised consistent<br />
with traditional principles of equity,<br />
in patent disputes no less than in other<br />
cases governed by such standards.<br />
Id. It is clear that the Supreme Court by its decision did<br />
not intend to part with long-standing decisions in equity.<br />
As noted by Chief Justice Roberts, "there is a difference<br />
between exercising equitable discretion pursuant to the<br />
established four-factor test and writing on an entirely<br />
clean slate." Id. at 1841 (Roberts, C.J. concurring). [*5]<br />
And, as Justice Kennedy notes in his concurrence, "the<br />
existence of a right to exclude does not dictate the remedy<br />
for a violation of that right," which aligns equitable<br />
decisions in patent cases with other cases. Id. at 1842<br />
(Kennedy, J. concurring).<br />
III. THE PARTIES' POSITIONS<br />
Plaintiff, seeking entry of a permanent injunction,<br />
principally argued that it is entitled to an injunction pursuant<br />
to 35 U.S.C. § 283 because the Defendants are<br />
adjudged infringers of its valid patent claims. Dkt. No.<br />
207 at 2. Plaintiff additionally argued that no exceptional<br />
circumstances exist for which an injunction should be<br />
denied. Id. Defendants responded in opposition to Plaintiff's<br />
motion but spent the majority of their pre-hearing<br />
brief arguing that any injunction that issues should be<br />
stayed pending the outcome of an appeal or the issuance<br />
of a decision in eBay. Dkt. No. 212. Less than a month<br />
after the hearing, the eBay opinion issued.<br />
Following the traditional four-factor test for equitable<br />
relief, Defendants argue no injunction should issue as<br />
Plaintiff cannot meet its burden of demonstrating each of<br />
the factors, let alone any of the [*6] factors. Dkt. No.<br />
222. According to Defendants, Plaintiff failed to demonstrate<br />
irreparable harm. Id. at 3. Defendants argue that,<br />
following from the Supreme Court's decision, irreparable<br />
harm cannot be presumed. Further, citing a decision in z4<br />
Technologies, Inc. v. Microsoft Corporation, Defendants<br />
argue that the inability to license Plaintiff's patents to<br />
others without an injunction in hand is not a viable reason<br />
for issuing an injunction. Dkt. No. 222 at 3, citing z4<br />
Technologies, Inc. v. Microsoft Corp., 434 F. Supp. 2d<br />
437 (E.D. Tex. 2006). Defendants also point to evidence<br />
demonstrating that there are reasons unrelated to Defendants'<br />
conduct that explain why Plaintiff's efforts to license<br />
its patents have been refused. Id. citing evidence at<br />
Dkt. No. 212, 5-6. Defendants argue there is no evidence<br />
supporting Plaintiff's contention that Defendants' sales of<br />
the accused vehicles have resulted in the harm Plaintiff<br />
alleges as Plaintiff does not sell vehicles. Dkt. No. 222 at<br />
3-4.<br />
Defendants argue that monetary damages are sufficient<br />
to compensate Plaintiff. Because Plaintiff does not<br />
manufacture competing vehicles, but rather is geared<br />
toward licensing [*7] its technology, Defendants argue<br />
that there is "no question" that monetary damages are<br />
sufficient. Dkt. No. 222 at 4. Defendants further argue<br />
that the claims found to be infringed make up only a<br />
"small component" of the overall accused vehicles. Id.<br />
The two claims found to be infringed by<br />
equivalents are not to the entirety of the<br />
hybrid transmission, let alone the entire
2006 U.S. Dist. LEXIS 61600, *<br />
Page 3<br />
car. For there to be an entire working vehicle<br />
that meets [Defendants'] standards,<br />
there are many tens of thousands of separate<br />
parts that make up the various essential<br />
parts of the car . . . Any contribution<br />
of [Plaintiff's] technology to the accused<br />
vehicles is relatively minor when compared<br />
to the value of the overall vehicles<br />
sought to be enjoined. . . .<br />
Dkt. No. 222 at 4. Defendants further cite the jury's reasonable<br />
royalty verdict as demonstrative of the relatively<br />
small contribution of that Plaintiff's invention to the accused<br />
vehicles as a whole:<br />
Id.<br />
Any contribution of [Plaintiff's] technology<br />
to the accused vehicles is relatively<br />
minor when compared to the value of the<br />
overall vehicle sought to be enjoined, as<br />
confirmed by the jury's verdict awarding<br />
reasonable royalty damages [*8] of only<br />
$ 25 per vehicle -- or 1/8th of one percent<br />
of the $ 20,000 price of a Prius and even<br />
less of a percentage of the price of the<br />
Highlander ($ 33,000) and the RX400h ($<br />
42,000).<br />
Defendants argue that the third and fourth factors<br />
weigh against issuing a permanent injunction. According<br />
to Defendants, implementation of an injunction would<br />
cause substantial economic injury to it, its dealers, and its<br />
suppliers. An injunction would also severely damages its<br />
"reputation as the industry leader in bringing hybrid and<br />
other vehicles to market," argue Defendants. Id. at 4.<br />
And, Defendants argue, significant time and money have<br />
been invested in designing the accused devices while a<br />
redesign would be "extraordinarily expensive and a great<br />
hardship." Id. Defendants argue that there is "no discernable<br />
hardship" to Plaintiff in the absence of an injunction<br />
because Plaintiff seeks only licensing fees for the use of<br />
its patents. Id. Defendants also argue that an injunction<br />
would be contrary to the public interest as hybrid vehicles<br />
play an important role in "reducing harmful automobile<br />
emissions and American reliance on foreign oil." Id.<br />
Lastly, Defendants remind [*9] the Court that, although<br />
accused, the jury did not find that Defendants'<br />
infringement was willful. Nor were they found to literally<br />
infringe Plaintiff's patents -- only two often asserted<br />
claims from one of three patents were found infringed<br />
under the doctrine of equivalents. Defendants argue that<br />
these facts should also be considered in determining<br />
whether an injunction should issue. Dkt. No. 222 at 4-5.<br />
In response, Plaintiff argues that, even under the traditional<br />
four-factor test for equitable relief, they are entitled<br />
to a permanent injunction. Plaintiff argues it has<br />
proved it will suffer irreparable harm because, unless<br />
Defendants are enjoined from selling the infringing vehicles,<br />
it cannot succeed in its efforts to license its technology.<br />
Dkt. No. 223 at 2. Plaintiff argues that Defendants'<br />
infringement has had a "devastating effect" on its business<br />
resulting in great harm. Dkt. No. 207 at 6. During<br />
the hearing on this motion, Plaintiff's counsel related that<br />
Plaintiff was recently "sidelined" as potential parties to a<br />
joint venture chose to put the deal on hold while they<br />
await the outcome of this motion. 4/25/06 Hr. Tr. at 99.<br />
Plaintiff also cites testimony from Dr. Severinsky, [*10]<br />
the inventor of the '970 patent and Paice employee, that<br />
potential licensees have refused to license Plaintiff's patents<br />
pending the outcome of this case. Id. at 2-3. Plaintiff<br />
argues that even if potential licensees refused licenses in<br />
the past for reasons unrelated to the current lawsuit, they<br />
are today refusing to license as they await the outcome of<br />
this suit. Id. at 3. Thus, Plaintiff argues, it is suffering<br />
harm from what amounts to a de facto stop work injunction.<br />
4/25/06 Hr. Tr. at 106.<br />
Addressing the second factor, Plaintiff argues that<br />
although it does not manufacture products utilizing the<br />
patented invention, this alone does not end the inquiry as<br />
to whether there is an adequate remedy at law for Defendants'<br />
infringement. Dkt. No. 223 at 3. Instead, Plaintiff<br />
argues, because it suffers irreparable harm, there is no<br />
adequate remedy at law. According to Plaintiff, without<br />
an injunction, Plaintiff will continue to loose licensing<br />
opportunities to other potential licensees. Dkt. No. 223 at<br />
3. Further, regarding the relative import of the infringed<br />
claims to the accused vehicles, Plaintiff argues that the<br />
infringed claims "cover . . . the heart of what the Prius<br />
[*11] is all about." 4/25/06 Hr. Tr. at 105; see also Dkt.<br />
No. 223 at 4.<br />
Plaintiff argues that the balance of hardships tips in<br />
favor of an injunction. According to Plaintiff, the infringing<br />
products that would be enjoined can be sold in other<br />
parts of the world. Further, Plaintiff argues, the infringing<br />
vehicles account for less than 2% of Defendants'<br />
worldwide revenue. Id.; see also 4/25/06 Hr. Tr. at 108.<br />
On the other hand, without an injunction, Plaintiff argues<br />
that it faces extinction. Dkt. No. 223 at 4.<br />
Regarding the public interest, Plaintiff argues the<br />
that public interest in strong patent rights is better served<br />
by enforcing those rights through an injunction, particularly<br />
where a small company's patents are infringed.<br />
4/25/06 Hr. Tr. at 111; Dkt. No. 223 at 5. Plaintiff also<br />
argues that enjoining sales of the accused vehicles would
2006 U.S. Dist. LEXIS 61600, *<br />
Page 4<br />
not leave the public without options -- in fact, there are<br />
other hybrid alternatives on the market as well as vehicles<br />
that are more fuel efficient than the accused vehicles.<br />
4/25/06 Hr. Tr. at 110.<br />
IV. DISCUSSION<br />
Following the traditional four-factor test for equitable<br />
relief, the Court concludes that no injunction is warranted<br />
[*12] in this case. n2<br />
n2 As Plaintiff's motion for an injunction is<br />
denied, Defendant's cross-motion for a stay is<br />
moot and will not be addressed herein.<br />
Plaintiff fails to establish that it will be irreparably<br />
harmed absent an injunction. The eBay decision demonstrates<br />
that no presumption of irreparable harm should<br />
automatically follow from a finding of infringement. See,<br />
e.g., 126 S. Ct. at 1840; see also 6:06-CV-142, Docket<br />
No. 394, at 4. Plaintiff argues that, because no injunction<br />
has issued, it has been unsuccessful in its efforts to license<br />
its technology. Plaintiff's evidence, however, does<br />
not prove that the current litigation or the absence of an<br />
injunction have resulted in its inability to successfully<br />
license its technology.<br />
Dr. Severinsky's testimony, cited by Plaintiff, addressed<br />
only his belief as to why potential licensees were<br />
reluctant to take licensees. Plaintiff's counsel's statements<br />
that the company was "sidelined" pending the outcome<br />
of this litigation are not evidence. [*13] There is evidence<br />
in the record, however, that potential licensees<br />
may have declined business deals because of Plaintiff's<br />
misrepresentations and improper business tactics. See<br />
12/7/05 PM Trial Tr. at 46:25-49:1; DTX 745.<br />
Irreparable harm lies only where injury cannot be<br />
undone by monetary damages. See Deerfield Med. Ctr. v.<br />
City of Deerfield Beach, 661 F.2d 328, 338 (5th Cir.<br />
1981). Plaintiff's losses from Defendant's sales of infringing<br />
products can be remedied via monetary damages<br />
in accordance with the reasonable royalty set by the jury.<br />
As for Plaintiff's allegations of irreparable harm in the<br />
form of a failed licensing program, Plaintiff has not<br />
demonstrated Defendants' infringement is to blame for<br />
this failure. As the evidence demonstrates, there were<br />
other reasons Plaintiff may not have succeeded in licensing<br />
its technology.<br />
Additionally, Plaintiff has not demonstrated that<br />
monetary relief will not aid its licensing efforts. As is<br />
discussed below, the entry of a judgment for monetary<br />
relief in conjunction with the jury's infringement and<br />
validity findings will affirm Plaintiff's patent rights, as<br />
would the issuance of an injunction. Although potential<br />
[*14] licensees will likely consider the outcome of this<br />
case in their licensing decisions, Plaintiff has not been<br />
prevented from continuing its licensing efforts. It is<br />
should also be noted that because Plaintiff does not compete<br />
for market share with the accused vehicles, concerns<br />
regarding loss of brand name recognition and market<br />
share similarly are not implicated.<br />
For these reasons, Plaintiff has not demonstrated that<br />
it will suffer irreparable harm in the absence of an injunction.<br />
Second, Plaintiff has not demonstrated that monetary<br />
damages are inadequate. According to Plaintiff,<br />
monetary damages paid by Defendants will not prevent<br />
further lost opportunities to license its technology to potential<br />
licensees. Plaintiff further argues that the infringed<br />
claims form the "heart" of the accused products.<br />
Infringing one's right to exclude alone, however, is insufficient<br />
to warrant injunctive relief. 126 S.Ct. at 1840.<br />
Plaintiff does not demonstrate why other potential licensees<br />
would be less likely to take a license if this case<br />
ends with monetary damages instead of equitable relief.<br />
n3 In either case, the Plaintiff's patent rights are vindicated.<br />
The appropriateness of an [*15] injunction is determined<br />
after considering the traditional four factors<br />
addressed here.<br />
n3 The Court notes that monetary relief<br />
could result in lower licensing rates than Plaintiff<br />
would desire. The Court also recognizes that, if<br />
an injunction were to issue, Plaintiff would have<br />
a more impressive bargaining tool. This consideration,<br />
however, doe not replace the four-factor<br />
test that must be satisfied for equitable relief.<br />
Further, the Court disagrees with Plaintiff regarding<br />
the import of the two claims found infringed to the accused<br />
vehicles as a whole. The infringed claims relate to<br />
the hybrid transmissions of the accused vehicles, but<br />
form only a small aspect of the overall vehicles. The<br />
jury's damages award also indicates that the infringed<br />
claims constitute a very small part of the value of the<br />
overall vehicles. The jury, based on the entire record,<br />
determined an appropriate reasonable royalty rate that<br />
can be easily calculated on future sales of the accused<br />
devices thereby removing uncertainty from future [*16]<br />
damages calculations.<br />
It is also of note that Plaintiff, throughout post-trial<br />
motions, has extended Defendants an offer to license its<br />
technology. 4/25/06 Hr. Tr. at 108. This offer further<br />
demonstrates the adequacy of monetary relief from<br />
Plaintiff's point of view. Thus, the Court finds that Plaintiff<br />
has not demonstrated monetary damages are an in-
2006 U.S. Dist. LEXIS 61600, *<br />
Page 5<br />
adequate remedy to compensate for Defendants' infringement.<br />
Third, the Court finds that the hardships balance<br />
against enjoining Defendants. Plaintiff again argues that<br />
this factor tips in its favor because it faces extinction<br />
absent an injunction while Defendants will experience<br />
only minor economic losses. This ignores the reality that<br />
two of the accused vehicles were introduced to the market<br />
during the 2006 model year and enjoining their sales<br />
will likely interrupt not only Defendants' business but<br />
that of related businesses, such as dealers and suppliers.<br />
The burgeoning hybrid market could also be stifled as<br />
the research and expense of bringing its product line to<br />
market would be frustrated. And the Court finds that<br />
enjoining Defendants will damage their reputation. Defendants<br />
face significant hardships if enjoined. Plaintiff's<br />
argument [*17] that it may go out of business unless<br />
Defendants are enjoined is again premised upon their<br />
contention that only injunctive relief will lead to a successful<br />
licensing program. As discussed above, the Court<br />
does not agree with this contention. Thus, the balance of<br />
hardships tips decidedly in favor of Defendants.<br />
Lastly, the Court concludes that the public interest<br />
does not weigh heavily in either party's favor. As Plaintiff<br />
argues, there is a long recognized public interest in<br />
enforcing patent rights. The grant of injunctive relief for<br />
such enforcement, as the eBay case directs, should be<br />
determined using the traditional four-factor test. Relief in<br />
non-injunctive form also serves this public interest. Insofar<br />
as Defendants argue that an injunction would be contrary<br />
to the public interest in reducing dependence of<br />
foreign oil, the Court finds this argument unavailing.<br />
Defendants' hybrid vehicles are not the only hybrid alternatives<br />
on the market, and there has been no evidence<br />
demonstrating the demand for hybrid vehicles could not<br />
be met by such alternatives. Thus, Defendants have not<br />
demonstrated that enjoining the sale of their hybrid vehicles<br />
will disserve the public interest. [*18]<br />
Having found that Plaintiff has failed to demonstrate<br />
that injunctive relief is warranted under any of the four<br />
relevant factors, the Court will deny Plaintiff's request.<br />
V. CONCLUSION<br />
For all the above reasons, Plaintiff's Motion for Entry<br />
of an Injunction, Dkt. No. 207, is hereby DENIED<br />
and Defendants' Motion for a Stay of Any Injunction<br />
Entered, Dkt. No. 212, is DENIED as moot.<br />
SIGNED this 16th day of August, 2006.<br />
DAVID FOLSOM<br />
UNITED STATES DISTRICT JUDGE<br />
FINAL JUDGMENT<br />
Pursuant to Rule 58 of the Federal Rules of Civil<br />
Procedure and in accordance with the jury verdict delivered<br />
on December 20, 2005 and with the Court's contemporaneously<br />
filed Orders regarding Plaintiff's Motion<br />
for Judgment as a Matter of Law or, in the Alternative,<br />
for a New Trial (Dkt. No. 209), Plaintiff's Motion for<br />
Entry of an Injunction (Dkt. No. 207), and Defendants'<br />
Motion for Judgment as a Matter of Law or in the Alternative,<br />
for a New Trial (Dkt. No. 208), the Court thereby<br />
enters judgment for Plaintiff Paice LLP and against Toyota<br />
Motor Corp., a Japanese Corporation, Toyota Motor<br />
North America Inc., and Toyota Motor [*19] Sales<br />
USA, Inc. (collectively "Defendants") for infringement<br />
of U.S. <strong>Patent</strong> No. 5,343,970 ("the '970 patent"), claims<br />
11 and 39. IT IS THEREFORE ORDERED THAT<br />
Plaintiff shall have and recover from Defendants, jointly<br />
and severally, the total sum of $ 4,269,950.00, together<br />
with pre-judgment interest calculated at the prime rate,<br />
compounded annually, together with post-judgment interest<br />
on the entire sum calculated pursuant to 28 U.S.C.<br />
§ 1961. The parties shall meet and confer in an attempt<br />
to reach agreement as to the calculation of pre-judgment<br />
interest at the prime rate and, within 14 days of the entry<br />
of this order, shall jointly submit such calculation to the<br />
Court. This Court retains jurisdiction to award Plaintiff<br />
amounts for pre-judgment interest.<br />
For the reasons stated in this Court's contemporaneously<br />
filed order, Plaintiff's motion for injunctive relief<br />
was denied. Defendants are hereby ORDERED, for the<br />
remaining life of the '970 patent, to pay Plaintiff an ongoing<br />
royalty of $ 25.00 per infringing Prius II, Toyota<br />
Highlander, or Lexus RX400H (the "infringing vehicles").<br />
Royalties shall be paid quarterly and shall be accompanied<br />
by an [*20] accounting of the sales of infringing<br />
vehicles. Payments shall begin three months<br />
after the date of signing of this judgment and shall be<br />
made quarterly thereafter. The first payment shall include<br />
royalties for all infringing vehicles sold that were<br />
not accounted for in the jury's verdict. Payments not<br />
made within 14 days of the due date shall accrue interest<br />
at the rate of 10%, compounded monthly. Plaintiff shall<br />
have the right to request audits. It is anticipated that the<br />
parties may wish to agree to more comprehensive or<br />
convenient terms. The parties shall promptly notify the<br />
Court of any such agreement. The Court maintains jurisdiction<br />
to enforce this portion of the Final Judgment.<br />
All relief not specifically granted herein is denied.<br />
All pending motions not previously ruled on are denied.<br />
This is a Final Judgment and is appealable.<br />
SIGNED this 16th day of August, 2006.<br />
DAVID FOLSOM<br />
UNITED STATES DISTRICT JUDGE
Page 1<br />
LEXSEE 2006 U.S. DIST. LEXIS 63623<br />
JAN K. VODA, M.D., Plaintiff and Counterclaim Defendant, v. CORDIS<br />
CORPORATION, Defendant and Counterclaim Plaintiff.<br />
No. CIV-03-1512-L<br />
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF<br />
OKLAHOMA<br />
2006 U.S. Dist. LEXIS 63623<br />
September 5, 2006, Decided<br />
PRIOR HISTORY: Voda v. Cordis Corp., 2006 U.S.<br />
Dist. LEXIS 37961 (W.D. Okla., June 8, 2006)<br />
LexisNexis(R) Headnotes<br />
Civil Procedure > Remedies > Judgment Interest > Prejudgment<br />
Interest<br />
<strong>Patent</strong> Law > Remedies > Collateral Assessments ><br />
Prejudgment Interest<br />
[HN1] Prejudgment interest should ordinarily be<br />
awarded in patent infringement actions. In the typical<br />
case an award of prejudgment interest is necessary to<br />
ensure that the patent owner is placed in as good a position<br />
as he would have been in had the infringer entered<br />
into a reasonable royalty agreement. An award of interest<br />
from the time that the royalty payments would have been<br />
received merely serves to make the patent owner whole,<br />
since his damages consist not only of the value of the<br />
royalty payments but also of the forgone use of the<br />
money between the time of infringement and the date of<br />
the judgment.<br />
Civil Procedure > Remedies > Judgment Interest > Prejudgment<br />
Interest<br />
[HN2] The rate of interest and whether to compound it<br />
are matters for the court's discretion.<br />
Civil Procedure > Remedies > Judgment Interest > Prejudgment<br />
Interest<br />
[HN3] The purpose of prejudgment interest is to make<br />
the plaintiff whole by compensating him for the loss of<br />
use of the money owed him.<br />
<strong>Patent</strong> Law > Remedies > Collateral Assessments ><br />
Increased Damages<br />
[HN4] The <strong>Patent</strong> Act permits the court to award enhanced<br />
damages of up to three times the amount found or<br />
assessed. 35 U.S.C.S. § 284. Whether to award such<br />
damages is two-step process. First, the fact-finder must<br />
determine whether an infringer is guilty of conduct upon<br />
which increased damages may be based. If so, the court<br />
then determines, exercising its sound discretion, whether,<br />
and to what extent, to increase the damages award given<br />
the totality of the circumstances. A jury's determination<br />
that the defendant's infringement was willful satisfies the<br />
first requirement. A finding that infringement was willful<br />
does not, however, mandate an award of enhanced damages.<br />
Whether to increase damages, and to what extent,<br />
is left to the sound discretion of the court.<br />
<strong>Patent</strong> Law > Remedies > Collateral Assessments ><br />
Increased Damages<br />
[HN5] Courts consider several factors when determining<br />
whether an infringer has acted in bad faith and whether<br />
damages should be increased. They include (1) whether<br />
the infringer deliberately copied the ideas or design of<br />
another; (2) whether the infringer, when he knew of the<br />
other's patent protection, investigated the scope of the<br />
patent and formed a good-faith belief that it was invalid<br />
or that it was not infringed; (3) the infringer's behavior as<br />
a party to the litigation; (4) the defendant's size and financial<br />
condition; (5) closeness of the case; (6) duration<br />
of the defendant's misconduct; (7) remedial action by the<br />
defendant; (8) the defendant's motivation for harm; and<br />
(9) whether the defendant attempted to conceal its misconduct.<br />
<strong>Patent</strong> Law > Remedies > Collateral Assessments ><br />
Increased Damages
2006 U.S. Dist. LEXIS 63623, *<br />
Page 2<br />
[HN6] In the patent context, a court may not disregard<br />
the jury's willfulness finding and the findings implicit<br />
therein.<br />
<strong>Patent</strong> Law > Remedies > Collateral Assessments ><br />
Attorney Fees<br />
<strong>Patent</strong> Law > Remedies > Collateral Assessments ><br />
Increased Damages<br />
[HN7] 35 U.S.C.S. § 285 provides the court in exceptional<br />
cases may award reasonable attorney fees to the<br />
prevailing party. 35 U.S.C.S. § 285. As with enhanced<br />
damages, the decision to award attorney's fees involves<br />
two steps. First, the court must determine whether the<br />
action constitutes an exceptional case. As a general rule,<br />
attorneys fees under § 285 may be justified by any valid<br />
basis for awarding increased damages under 35 U.S.C.S.<br />
§ 284.<br />
<strong>Patent</strong> Law > Remedies > Collateral Assessments ><br />
Attorney Fees<br />
[HN8] In the context of 35 U.S.C.S. § 285, a case may<br />
be deemed exceptional when there has been some material<br />
inappropriate conduct related to the matter in litigation,<br />
such as willful infringement.<br />
Civil Procedure > Remedies > Injunctions > Elements<br />
> General Overview<br />
<strong>Patent</strong> Law > Remedies > Equitable Relief > Injunctions<br />
[HN9] The <strong>Patent</strong> Act permits the court to grant injunctions<br />
in accordance with principles of equity to prevent<br />
the violation of any right secured by patent, on such<br />
terms as the court deems reasonable. 35 U.S.C.S. § 283.<br />
The United States Supreme Court recently has confirmed<br />
that permanent injunctions in patent cases should not<br />
automatically follow a finding of infringement; rather,<br />
requests for permanent injunctions in such cases are governed<br />
by the same four-factor test that applies to injunctive<br />
relief in general. According to well-established principles<br />
of equity, a plaintiff seeking a permanent injunction<br />
must satisfy a four-factor test before a court may<br />
grant such relief. A plaintiff must demonstrate (1) that it<br />
has suffered an irreparable injury; (2) that remedies<br />
available at law, such as monetary damages, are inadequate<br />
to compensate for that injury; (3) that, considering<br />
the balance of hardships between the plaintiff and defendant,<br />
a remedy in equity is warranted; and (4) that the<br />
public interest would not be disserved by a permanent<br />
injunction.<br />
<strong>Patent</strong> Law > Remedies > Equitable Relief > Injunctions<br />
[HN10] In the patent context, the United States Supreme<br />
Court clearly has held the right to exclude does not,<br />
standing alone, justify a general rule in favor of injunctive<br />
relief.<br />
<strong>Patent</strong> Law > Remedies > Equitable Relief > Injunctions<br />
[HN11] As patents have the attributes of personal property,<br />
the person seeking a permanent injunction must<br />
demonstrate harm from infringement of those rights that<br />
is personal as well.<br />
COUNSEL: [*1] For Jan Voda, MD, Plaintiff: Aleta<br />
Angelina Mills, Jonathan Keith Waldrop, Mitchell G<br />
Stockwell, Kilpatrick Stockton LLP, Atlanta, GA.; John<br />
A Kenney, Spencer F Smith, McAfee & Taft, Oklahoma<br />
City, OK.<br />
For Cordis Corporation, Defendant: Adam R Steinert,<br />
Diane C Ragosa, John M DiMatteo, Kelsey I Nix, Willkie<br />
Farr & Gallagher LLP, New York, NY.; Amanda<br />
Leigh Maxfield, Clyde A Muchmore, Crowe & Dunlevy-<br />
OKC, Oklahoma City, OK.<br />
For Cordis Corporation, Counter Claimant: Adam R<br />
Steinert, Kelsey I Nix, Willkie Farr & Gallagher LLP,<br />
New York, NY.; Amanda Leigh Maxfield, Crowe &<br />
Dunlevy-OKC, Oklahoma City, OK.<br />
For Jan Voda, MD, Counter Defendant: John A Kenney,<br />
Spencer F Smith, McAfee & Taft, Oklahoma City, OK.;<br />
Mitchell G Stockwell, Jonathan Keith Waldrop,<br />
Kilpatrick Stockton LLP, Atlanta, GA.<br />
JUDGES: TIM LEONARD, United States District<br />
Judge.<br />
OPINION BY: TIM LEONARD<br />
OPINION:<br />
ORDER<br />
This action concerns three patents that were issued<br />
by the United States <strong>Patent</strong> and Trademark Office to<br />
plaintiff, Dr. Jan K. Voda. All of the patents concern an<br />
angioplasty guide catheter. <strong>Patent</strong> No. 5,445,625 ("the<br />
'625 patent") reflects the catheter "in a relaxed state prior<br />
to insertion in the cardiovascular [*2] system." The two<br />
remaining patents (the '213 and the '195 patents) cover<br />
plaintiff's inventive technique for using the catheter to<br />
perform angioplasty. In addition to method claims, the<br />
'195 patent also includes claims that focus on the catheter
2006 U.S. Dist. LEXIS 63623, *<br />
Page 3<br />
as it appears in the aorta. Plaintiff filed this action on<br />
October 30, 2003, seeking damages for alleged infringement<br />
of the three patents by defendant, Cordis Corporation.<br />
Beginning May 15, 2006, the case was tried to a<br />
jury, which returned a verdict in favor of plaintiff on<br />
May 25, 2006. The jury specifically held defendant infringed<br />
each of the patents in suit and that claims 1, 2,<br />
and 3 of the '213 patent were not invalid due to anticipation<br />
or obviousness. n1 Verdict Form at 1-7. The jury<br />
determined that plaintiff was entitled to a reasonable<br />
royalty of 7.5% of defendant's gross sales of the infringing<br />
catheters. Id. at 8. In addition, the jury found defendant's<br />
infringement was willful. Id. at 3.<br />
n1 At the conclusion of the trial, defendant<br />
conceded it was no longer seeking a declaration<br />
as to the validity of the '625 patent, the '195 patent,<br />
or claims 4 and 5 of the '213 patent ("the apparatus<br />
claims"). The court thus granted judgment<br />
as a matter of law in favor of plaintiff on<br />
that portion of defendant's counterclaim.<br />
[*3]<br />
Although the parties were able to stipulate to the<br />
amount of compensatory damages based on the jury's<br />
verdict, n2 they were unable to agree on whether plaintiff<br />
should be awarded prejudgment interest and, if so, the<br />
rate of interest. Likewise, the parties dispute whether<br />
plaintiff is entitled to enhanced damages based on the<br />
jury's willfulness finding. In addition, the court must<br />
decide whether plaintiff is entitled to injunctive relief<br />
and attorney's fees.<br />
n2 Joint Stipulation Regarding Compensatory<br />
Damages (Doc. No. 341).<br />
Prejudgment Interest<br />
As a general rule, [HN1] prejudgment interest<br />
should ordinarily be awarded in patent infringement actions.<br />
General Motors Corp. v. Devex Corp., 461 U.S.<br />
648, 655, 103 S. Ct. 2058, 76 L. Ed. 2d 211 (1983).<br />
In the typical case an award of prejudgment<br />
interest is necessary to ensure that<br />
the patent owner is placed in as good a<br />
position as he would have been in had the<br />
infringer entered into a reasonable royalty<br />
agreement. An award of interest from the<br />
time that the royalty payments [*4]<br />
would have been received merely serves<br />
to make the patent owner whole, since his<br />
damages consist not only of the value of<br />
the royalty payments but also of the forgone<br />
use of the money between the time<br />
of infringement and the date of the judgment.<br />
Id. at 655-56 (footnote omitted). Although defendant<br />
recognizes this general rule, it argues prejudgment interest<br />
should be denied "[d]ue to Dr. Voda's eight-year delay<br />
in bringing suit, and the resultant prejudice". Cordis'<br />
Opposition to Dr. Voda' Motions for (1) a Permanent<br />
Injunction, (2) Enhanced Damages and (3) Prejudgment<br />
Interest at 19 (Doc. No. 362). In support of this contention,<br />
defendant identifies the same economic and evidentiary<br />
prejudice the court found to be insufficient to support<br />
its laches defense. n3 The court likewise finds the<br />
prejudice identified by defendant insufficient to warrant<br />
deviating from the general rule regarding prejudgment<br />
interest. Plaintiff's request for prejudgment interest is<br />
therefore granted.<br />
[*5]<br />
n3 Cordis' Post-Trial Brief Regarding Injunctive<br />
Relief, Enhanced Damages and Prejudgment<br />
Interest at 23. See also Order at 4-5 (Doc. No.<br />
339).<br />
[HN2] The rate of interest and whether to compound<br />
it are matters for the court's discretion. Bio-Rad Laboratories,<br />
Inc. v. Nicolet Instrument Corp., 807 F.2d 964,<br />
969 (Fed. Ci. 1986), cert. denied, 482 U.S. 915, 107 S.<br />
Ct. 3187, 96 L. Ed. 2d 675 (1987). Plaintiff contends the<br />
appropriate rate is the prime rate plus two percent, compounded<br />
annually. In contrast, defendant proposes using<br />
the three-month or one-year United States Treasury Bill<br />
rate. See Declaration of Kathleen M. Kedrowski at P 5,<br />
Exhibit 30 to Declaration of Kelsey I. Nix in Support of<br />
Cordis' Opposition to Dr. Voda's Motions (Doc. No.<br />
359). Defendant argues this rate "is the proper rate . . .<br />
because the damage award is not subject to any investment<br />
risk during the waiting period." Id. Defendant's<br />
argument is based on a misapprehension of the economic<br />
policy for prejudgment interest. It is not, as defendant<br />
argues, to compensate plaintiff for the risk of default by<br />
defendant; rather, [HN3] the purpose of prejudgment<br />
interest is to make plaintiff whole by compensating him<br />
for the loss of use of the money owed him. Bio-Rad<br />
Laboratories, Inc., 807 F.2d at 969. The court finds that<br />
neither rate suggested by [*6] the parties fulfills this<br />
purpose; plaintiff's suggested rate is too high and defendant's<br />
too low. The court concludes the appropriate rate
2006 U.S. Dist. LEXIS 63623, *<br />
Page 4<br />
is the prime rate, compounded annually. This results in a<br />
total prejudgment interest award of $ 489,375. n4<br />
n4 This represents the total prejudgment interest<br />
for the '213 patent for the period July 4,<br />
2000 through May 15, 2006. The court's calculation<br />
of the yearly totals for the '213 patent are:<br />
2000 -0; 2001 - $ 19,388.29; 2002 - $ 35,865.66;<br />
2003 - $ 55,085.63; 2004 - $ 89,068.63; 2005 -$<br />
176,334.73; 2006 - $ 113,631.94. The total prejudgment<br />
interest for the '625 patent is $<br />
185,323.91 (2002 - 0; 2003 - $ 11,988.58; 2004 -<br />
$ 32,459.54; 2005 - $ 82,440.35; 2006 - $<br />
58,435.44). The total prejudgment interest for the<br />
'195 patent is $ 80,477.98 (2003 - 0; 2004 - $<br />
3,302.96; 2005 -$ 39,844.47; 2006 - $<br />
37,330.55).<br />
Enhanced Damages<br />
[HN4] The <strong>Patent</strong> Act permits the court to award<br />
enhanced damages of "up to three times the amount<br />
found or assessed." 35 U.S.C. § 284 [*7] . Whether to<br />
award such damages is two-step process. "First, the factfinder<br />
must determine whether an infringer is guilty of<br />
conduct upon which increased damages may be based. If<br />
so, the court then determines, exercising its sound discretion,<br />
whether, and to what extent, to increase the damages<br />
award given the totality of the circumstances." Jurgens<br />
v. CBK, Ltd., 80 F.3d 1566, 1570 (Fed. Cir. 1996).<br />
The jury's determination that defendant's infringement<br />
was willful satisfies the first requirement. A finding that<br />
infringement was willful does not, however, mandate an<br />
award of enhanced damages. Id. at 1573. Whether to<br />
increase damages, and to what extent, is left to the sound<br />
discretion of the court. In exercising that discretion, the<br />
court is guided by the factors enunciated by the Federal<br />
Circuit in Read Corp. v. Portec, Inc., 970 F.2d 816<br />
(Fed. Cir. 1992).<br />
[HN5] Courts consider several factors<br />
when determining whether an infringer<br />
has acted in bad faith and whether damages<br />
should be increased. They include:<br />
"(1) whether the infringer deliberately<br />
copied the ideas or design of another; (2)<br />
whether the infringer, when he knew of<br />
the [*8] other's patent protection, investigated<br />
the scope of the patent and formed a<br />
good-faith belief that it was invalid or that<br />
it was not infringed; . . . (3) the infringer's<br />
behavior as a party to the litigation;" (4)<br />
"defendant's size and financial condition;"<br />
(5) "closeness of the case;" (6) "duration<br />
of defendant's misconduct;" (7) "remedial<br />
action by the defendant;" (8) "defendant's<br />
motivation for harm;" and (9) "whether<br />
defendant attempted to conceal its misconduct."<br />
Liquid Dynamics Corp. v. Vaughan Co., Inc., 449 F.3d<br />
1209, 1225 (Fed. Cir. 2006) (quoting Read Corp., 970<br />
F.2d at 826-27).<br />
Based on the totality of the circumstances, the court<br />
concludes plaintiff's damages should be increased, but<br />
not trebled. In reaching this conclusion, the court finds<br />
factors 1, 2, 4, and 7 weigh in favor of increasing damages.<br />
First, plaintiff presented evidence that defendant<br />
consciously copied his design and ideas. Although defendant<br />
vigorously disputed this notion, a finding of conscious<br />
copying is inherent in the jury's finding of willfulness.<br />
At trial the jury was specifically instructed:<br />
Other factors you may consider in determining<br />
wilfulness [*9] are whether, in<br />
designing the product accused of infringement,<br />
Cordis copies the disclosures<br />
of Dr. Voda's patents, or whether Cordis<br />
instead tried to "design around" the patents<br />
by designing a product that Cordis<br />
believed did not infringe the patent<br />
claims. Evidence of copying a patent is<br />
evidence of willful infringement. On the<br />
other hand, evidence that Cordis attempted<br />
to avoid infringement by designing<br />
around the patent claims, even if that<br />
attempt was unsuccessful, is evidence that<br />
the infringement was not willful.<br />
Court's Instructions to the Jury at 47 (Doc. No. 335).<br />
Also implicit in this finding is a rejection of defendant's<br />
argument that it attempted to design around plaintiff's<br />
claims. Thus, the court finds defendant did not take any<br />
remedial actions; moreover, defendant has indicated it<br />
will continue to produce and market the infringing devices<br />
without change even after the jury verdict. n5<br />
Likewise, in making its willfulness finding, the jury rejected<br />
defendant's advice of counsel defense. At trial,<br />
defendant presented evidence that it sought and obtained<br />
opinion letters from both in-house and outside counsel<br />
with respect to the patents-in-suit. Plaintiff countered<br />
[*10] this evidence by questioning the timing of the requests,<br />
the thoroughness of the information defendant<br />
provided to counsel, and the independence of counsel.<br />
The jury was then instructed:
2006 U.S. Dist. LEXIS 63623, *<br />
Page 5<br />
In evaluating Cordis' reliance on the advice<br />
of a lawyer, you should consider<br />
when Cordis obtained the advice, the<br />
quality of the information Cordis provided<br />
to the lawyer, the competence of the lawyer's<br />
opinion, and whether Cordis relied<br />
upon the advice. Advice is competent if it<br />
was based upon a reasonable examination<br />
of the facts and law relating to validity,<br />
enforceability and/or infringement issues,<br />
consistent with the standards and practices<br />
generally followed by competent lawyers.<br />
Id. Defendant's lengthy post-trial argument that it did in<br />
fact rely on competent legal advice is misplaced, as it<br />
asks the court to reweigh an issue decided by the jury.<br />
The court, however, does not have discretion to do so at<br />
this time; [HN6] it may not disregard the jury's willfulness<br />
finding and the findings implicit therein. See Jurgens,<br />
80 F.3d at 1572. Finally, the fact that defendant is<br />
"a large company with extensive financial means" n6 is<br />
another factor that justifies increasing [*11] the damages<br />
award.<br />
n5 See Exhibit PX400 to Consolidated Appendix<br />
in Support of Dr. Voda's (1) Brief in Support<br />
of Plaintiff's Motion for Enhanced Damages<br />
(2) Brief in Support of Plaintiff's Request for<br />
Permanent Injunction (3) Brief in Support of<br />
Plaintiff's Request for Prejudgment Interest.<br />
n6 Metabolite Laboratories, Inc. v. Laboratory<br />
Corp. of America Holdings, 370 F.3d 1354,<br />
1371 (Fed. Cir. 2004).<br />
On the other hand, the other Read factors are either<br />
neutral or do not support an award of enhanced damages.<br />
For example, factor 6, the duration of defendant's misconduct,<br />
cuts both ways. Although defendant has been<br />
manufacturing infringing devices for years, plaintiff also<br />
waited years to challenge defendant's infringement.<br />
While the court found plaintiff's delay was not sufficient<br />
to establish laches or to prevent plaintiff from receiving<br />
prejudgment interest, it is a factor the court considers in<br />
determining the amount any enhancement. Factor 5 also<br />
is neutral. Although the jury's [*12] relatively quick<br />
deliberation might indicate the issues that remained for<br />
decision were not close, other issues -- including literal<br />
infringement -- were decided adversely to plaintiff prior<br />
to trial. Contrary to plaintiff's assertions, factors 3, 8, and<br />
9 do not support enhancement. The court finds there is<br />
no evidence of litigation misconduct by defendant, nor<br />
has plaintiff demonstrated any intent by defendant to<br />
harm him. Hyperbole in marketing documents does not<br />
indicate intent to harm; moreover, any harm would have<br />
been directed at plaintiff's licensee, Scimed, not plaintiff.<br />
Also, there is no evidence defendant sought to conceal its<br />
activities. These factors, however, do not outweigh defendant's<br />
conscious copying, lack of good-faith belief<br />
that it was not infringing, and failure to take remedial<br />
action.<br />
Based on the totality of the circumstances, the court<br />
finds trebling plaintiff's damages is not warranted. The<br />
court, however, exercises its discretion to double the<br />
infringement damages. Plaintiff is thus awarded compensatory<br />
damages of $ 3,803,094 through May 15, 2006, n7<br />
together with prejudgment interest in the amount of $<br />
489,375, and enhanced damages of $ 3,803,094, for<br />
[*13] a total award of $ 8,095,563.<br />
n7 See Joint Stipulation Regarding Compensatory<br />
Damages at 1.<br />
Attorney's Fees<br />
[HN7] Section 285 provides the court "in exceptional<br />
cases may award reasonable attorney fees to the<br />
prevailing party." 35 U.S.C. § 285. As with enhanced<br />
damages, the decision to award attorney's fees involves<br />
two steps. Cybor Corp. v. FAS Techs., Inc., 138 F.3d<br />
1448, 1460 (Fed. Cir. 1998). First, the court must determine<br />
whether the action constitutes an exceptional case.<br />
"As a general rule, attorneys fees under section 285 may<br />
be justified by any valid basis for awarding increased<br />
damages under section 284." Jurgens, 80 F.3d at 1573<br />
n.4. Based on the analysis enunciated above, the court<br />
finds this is an exceptional case warranting an award of<br />
attorney's fees. Specifically, the jury's implicit findings<br />
that defendant consciously copied plaintiff's design and<br />
did not have a good faith belief as to infringement and<br />
validity provide the requisite [*14] degree of bad faith<br />
necessary to support finding this case exceptional. n8<br />
n8 [HN8] "A case may be deemed exceptional<br />
when there has been some material inappropriate<br />
conduct related to the matter in litigation,<br />
such as willful infringement . . . ." Brooks<br />
Furniture Mfg., Inc. v. Dutailier Intern., Inc., 393<br />
F.3d 1378, 1381 (Fed. Cir. 2005).<br />
Having concluded the case is exceptional, the court<br />
also determines that an award of fees is appropriate. Defendant<br />
does not dispute the hours expended by plain-
2006 U.S. Dist. LEXIS 63623, *<br />
Page 6<br />
tiff's attorneys or the reasonableness of the rates charged<br />
by plaintiff's attorneys. Defendant does, however, ask the<br />
court to impose two limits on any fee award. First, it<br />
argues plaintiff's contingent fee contract with his attorneys<br />
"sets the maximum amount the court can award."<br />
Cordis' Opposition to Voda's Motion for Attorneys' Fees<br />
at 15 (Doc. No. 380). Second, it contends local attorney<br />
billing rates should be used to calculate the lodestar figure.<br />
Id. at 17-18.<br />
Defendant's first argument is not [*15] only without<br />
merit, given the court's award of enhanced damages, it is<br />
moot. n9 The cases cited by defendant in support of this<br />
contention are inapposite as they concern fees sought<br />
pursuant to Florida's fee-shifting statute. The court also<br />
rejects defendant's second argument. Although local<br />
hourly rates should be used to calculate fees in the normal<br />
case, patent litigation is a specialized practice with a<br />
national bar. Defendant does not contest that "the rates<br />
usually charged by Voda's national counsel may be reasonable<br />
for the Atlanta market". Cordis' Opposition to<br />
Voda's Motion for Attorneys' Fees at 17. The court's independent<br />
examination of those rates confirms they are<br />
objectively reasonable for the national patent bar. Therefore,<br />
the court calculates the lodestar figure by multiplying<br />
the rates normally charged by plaintiff's Atlanta and<br />
Oklahoma City attorneys by the hours expended. This<br />
results in an attorney's fee award of $ 2,133,086.25. n10<br />
The court finds no reason to increase this award based on<br />
any of the factors enunciated in Hensley v. Eckerhart,<br />
461 U.S. 424, 433-34, 103 S. Ct. 1933, 76 L. Ed. 2d 40<br />
(1983). As defendant does not contest plaintiff's request<br />
for litigation expenses, [*16] the court awards plaintiff<br />
litigation expenses of $ 68,053.21, making the total fee<br />
award $ 2,201,139.46.<br />
n9 In response to Cordis' Motion to Compel<br />
Dr. Voda to Produce his Contingency Fee<br />
Agreement (Doc. No. 367), plaintiff provided a<br />
copy of the contingency fee contract for the court<br />
to review in camera. The court denied defendant's<br />
motion to compel, finding the contract was<br />
not relevant since defendant did not challenge the<br />
reasonableness of either the rates charged by<br />
plaintiff's attorneys or the hours expended. Order<br />
at 2 (Doc. No. 377). Nonetheless, in the interest<br />
of full disclosure, the court notes plaintiff's contingent<br />
fee contract provided plaintiff would pay<br />
45 percent of the recovery received after trial or<br />
after the filing of a notice of appeal. Forty-five<br />
percent of the damages awarded by the court, including<br />
prejudgment interest, equals $<br />
3,643,003.35, a sum that is significantly larger<br />
than the amount sought by plaintiff in his Motion<br />
for Attorneys' Fees.<br />
n10 Plaintiff's motion sought an award of $<br />
2,133,086.20. The supporting documentation,<br />
however, reflects a fee request of $ 2,133,086.25<br />
($ 1,708,842.25 + $ 424,244.00). Exhibits PX<br />
427 and PX 428 to Supplemental Appendix to Dr.<br />
Voda's (1) Brief in Support of Plaintiff's Motion<br />
for Enhanced Damages (2) Brief in Support of<br />
Plaintiff's Request for Permanent Injunction (3)<br />
Brief in Support of Plaintiff's Request for Prejudgment<br />
Interest (4) Plaintiff's Motion for Attorneys'<br />
Fees (Doc. No. 366).<br />
[*17]<br />
Injunctive Relief<br />
Plaintiff requests a permanent injunction barring defendant,<br />
"its officers, agents servants, directors, employees<br />
and all those in active concert or participation with<br />
them . . . from infringing, inducing the infringement of,<br />
and contributorily infringing any one or more claims" of<br />
the patents-in-suit. Attachment to Brief in Support of<br />
Plaintiff's Request for Permanent Injunction at 1 (Doc.<br />
No. 350). [HN9] The <strong>Patent</strong> Act permits the court to<br />
"grant injunctions in accordance with principles of equity<br />
to prevent the violation of any right secured by patent, on<br />
such terms as the court deems reasonable." 35 U.S.C. §<br />
283. The United States Supreme Court recently confirmed<br />
that permanent injunctions in patent cases should<br />
not automatically follow a finding of infringement;<br />
rather, requests for permanent injunctions in such cases<br />
are governed by the same four-factor test that applies to<br />
injunctive relief in general. eBay Inc. v. MercExchange,<br />
L.L.C., 126 S. Ct. 1837, 1839-40, 164 L. Ed. 2d 641<br />
(2006).<br />
Id. at 1839.<br />
According to well-established principles<br />
of equity, a plaintiff seeking a permanent<br />
injunction must satisfy a four-factor test<br />
before a court may [*18] grant such relief.<br />
A plaintiff must demonstrate: (1) that<br />
it has suffered an irreparable injury; (2)<br />
that remedies available at law, such as<br />
monetary damages, are inadequate to<br />
compensate for that injury; (3) that, considering<br />
the balance of hardships between<br />
the plaintiff and defendant, a remedy in<br />
equity is warranted; and (4) that the public<br />
interest would not be disserved by a permanent<br />
injunction.
2006 U.S. Dist. LEXIS 63623, *<br />
Page 7<br />
As plaintiff has failed to demonstrate either irreparable<br />
injury or that monetary damages are inadequate, the<br />
court denies his request for a permanent injunction. n11<br />
Plaintiff argues irreparable harm is presumed whenever<br />
validity and continuing infringement have been established.<br />
Brief in Support of Plaintiff's Request for Permanent<br />
Injunction at 5 (Doc. No. 350). This argument,<br />
however, runs afoul of the court's reasoning in eBay<br />
where [HN10] the Court clearly held the right to exclude<br />
does not, standing alone, justify a general rule in favor of<br />
injunctive relief. eBay Inc., 126 S. Ct. at 1840. Moreover,<br />
other than the presumption of irreparable harm,<br />
plaintiff identifies no harm to himself; rather, he relies on<br />
alleged harm to a [*19] non-party, Scimed. n12 See<br />
Brief in Support of Plaintiff's Request for Permanent<br />
Injunction at 6-12. The court concurs with defendant that<br />
such harm is irrelevant because Scimed elected not to sue<br />
to enforce the patent rights. [HN11] As patents have "the<br />
attributes of personal property" n13, the person seeking a<br />
permanent injunction must demonstrate harm from infringement<br />
of those rights that is personal as well.<br />
n11 The court therefore need not address defendant's<br />
assertions that plaintiff did not timely<br />
seek injunctive relief or that the relief requested<br />
is not sufficiently limited or specific to comply<br />
with Fed. R. Civ. P. 65(d).<br />
n12 Cordis' Motion to Strike the Lundeen<br />
Declaration and Dr. Voda's Arguments Relying<br />
on that Declaration in his Post-trial Brief (Doc.<br />
No. 363) is denied. In accordance with defendant's<br />
request, the court reserved the issue of injunctive<br />
relief until after the jury returned its verdict.<br />
Order at 3 (Doc. No. 311). Plaintiff's posttrial<br />
submission of the Lundeen Declaration is in<br />
accord with that ruling.<br />
n13 eBay Inc., 126 S. Ct. at 1840.<br />
[*20]<br />
The court also finds plaintiff has not established that<br />
monetary damages are inadequate to compensate him.<br />
Plaintiff argues he granted Scimed an exclusive license<br />
to his patented inventions and defendant's continuing<br />
infringement will damage his relationship with Scimed.<br />
This argument, however, is simply the other side of the<br />
right-to-exclude coin and is not sufficient to justify<br />
granting injunctive relief. Plaintiff's request for a permanent<br />
injunction is therefore denied.<br />
Post-Verdict Infringement<br />
As the court has declined to issue a permanent injunction<br />
and defendant has indicated it will continue to<br />
infringe the patents-in-suit, the court must fashion a remedy<br />
for the continuing harm to plaintiff. Plaintiff suggests<br />
severing his action for monetary damages for postverdict<br />
infringement. In addition, plaintiff asks the court<br />
to order defendant to file quarterly reports of sales and to<br />
establish an interest-bearing escrow account into which<br />
defendant would pay the royalty rate assessed by the<br />
jury. The court sees no reason for severance of a cause of<br />
action for the post-verdict damages as there would be no<br />
issues for decision except simple mathematical calculations<br />
based on [*21] defendant's sales. The court therefore<br />
denies plaintiff's motion for severance. The court,<br />
however, concludes that quarterly reporting by defendant<br />
is reasonable. The reports shall be filed beginning September<br />
15, 2006 and every three months thereafter until<br />
final resolution of this action. Defendant may file the<br />
reports under seal without seeking leave of court to do<br />
so. Given defendant's size and financial stability, the<br />
court will not order defendant to pay the royalty funds<br />
into an interest-bearing escrow account. Defendant is<br />
cautioned, however, that absent establishment of an escrow<br />
account, prejudgment interest will accrue on any<br />
post-verdict infringement damages.<br />
Conclusion<br />
In sum, plaintiff's requests for prejudgment interest<br />
and enhanced damages are GRANTED to the extent<br />
noted above. Plaintiff's request for a permanent injunction<br />
is DENIED. Plaintiff's Motion for Entry of Judgment,<br />
Severance of Continuing Causes of Action for<br />
Post-Verdict Infringement, and Establishment of Reporting<br />
and Escrow Requirement (Doc. No. 353) is<br />
GRANTED in part and DENIED in part. Cordis' Motion<br />
to Strike the Lundeen Declaration and Dr. Voda's Arguments<br />
Relying on that Declaration in his [*22] Post-trial<br />
Briefs (Doc. No. 363) is DENIED. Plaintiff's Motion for<br />
Attorneys' Fees (Doc. No. 365) is GRANTED. Judgment<br />
in accordance with this Order, the parties' stipulation,<br />
and the jury's verdict will issue according.<br />
It is so ordered this 5th day of September, 2006.<br />
TIM LEONARD<br />
United States District Judge
Slip Copy Page 1<br />
Slip Copy, 2007 WL 37742 (E.D.Mich.)<br />
(Cite as: Slip Copy)<br />
Briefs and Other Related Documents<br />
Sundance, Inc. v. DeMonte Fabricating<br />
Ltd.E.D.Mich.,2007.Only the Westlaw citation is<br />
currently available.<br />
United States District Court,E.D. Michigan,Southern<br />
Division.<br />
SUNDANCE, INC. and Merlot Tarpaulin and Sidekit<br />
Manufacturing Co., Inc., Plaintiffs,<br />
v.<br />
DeMONTE FABRICATING LTD. and Quick Draw<br />
Tarpaulin Systems, Inc., Defendants.<br />
No. 02-73543.<br />
Jan. 4, 2007.<br />
John A. Monocello, III, Thomas E. Wettach, Cohen<br />
& Grigsby, Pittsburgh, PA, Kevin J. Heinl, Robert C.<br />
Brandenburg, Brooks & Kushman, Southfield, MI,<br />
for Plaintiffs.<br />
Donald C. Darnell, Nik Lulgjuraj, Darnell &<br />
Lulgjuraj, Chelsea, MI, Irving M. Weiner, Joseph P.<br />
Carrier, Carrier, Blackman, Novi, MI, for<br />
Defendants.<br />
MEMORANDUM AND ORDER DENYING<br />
PLAINTIFFS' MOTION FOR PERMANENT<br />
INJUNCTION FN1<br />
FN1. The Court originally scheduled this<br />
matter for hearing. Upon review of the<br />
parties' papers, however, the Court finds that<br />
oral argument is not necessary. See E.D.<br />
Mich. LR 7.1(e)(2).AVERN COHN, United<br />
States District Judge.<br />
I. Introduction<br />
*1 This is a patent case. Plaintiffs Sundance, Inc. and<br />
Merlot Tarpaulin and Sidekit Manufacturing<br />
Company, Inc. (collectively, Sundance), holder of<br />
U.S. <strong>Patent</strong> No. 5,026,109 (the 109 patent) covering<br />
a Segmented Cover System, sued DeMonte<br />
Fabricating, Ltd. and Quick Draw Tarpaulin Systems<br />
Inc. (collectively, DeMonte) for infringement of the<br />
109 patent.<br />
The case was tried to a jury. The jury found the<br />
patent invalid and infringed. The Court set aside the<br />
jury's verdict on invalidity. Before the Court is<br />
Sundance's Motion for Permanent Injunction. For the<br />
reasons that follow, the motion is DENIED.<br />
II. Background<br />
The background of the patent and the case is well<br />
known to the parties and will not be repeated. See<br />
Decision on Claim Construction, filed November 18,<br />
2003, Joint Pretrial Statement, filed April 4, 2006,<br />
Memorandum and Order Granting Plaintiffs' Motion<br />
for Judgment as a Matter of Law or For a New Trial,<br />
filed September 20, 2006.<br />
Background facts relevant to the instant motion<br />
follow.<br />
The 109 patent issued in 1991. Also in 1991,<br />
DeMonte began manufacturing and marketing rolling<br />
tarp systems for use on flatbed trailers which used a<br />
one-piece tarp. In 1993, DeMonte switched to a<br />
segmented tarp systems. In 1997, DeMonte began<br />
manufacturing and marketing the Quick Draw<br />
system.<br />
In 2001, Sundance filed suit against DeMonte<br />
claiming that the Quick Draw system infringes the<br />
109 patent.<br />
Sundance seeks a permanent injunction against<br />
DeMonte which prevents it, and all persons in active<br />
concert with it, from:<br />
1. making, using, selling, offering for sale, and/or<br />
importing retractable segmented cover systems used<br />
with a truck trailer, defined as: (1) the Quick Draw<br />
system found infringing by the jury in Verdict<br />
Question 1; and/or (2) insubstantially different<br />
retractable segmented cover systems used with a<br />
truck trailer; or<br />
2. otherwise infringing, inducing infringement of, or<br />
contributorily infringing U.S. <strong>Patent</strong> No. 5,026,109.<br />
The 109 patent expires in three years.<br />
Sundance has licensed the 109 patent to companies<br />
that compete with DeMonte.<br />
III. Analysis<br />
© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.
Slip Copy Page 2<br />
Slip Copy, 2007 WL 37742 (E.D.Mich.)<br />
(Cite as: Slip Copy)<br />
A. Legal Standard<br />
The Supreme Court recently made clear that when<br />
considering whether to award permanent injunctive<br />
relief to a prevailing plaintiff in a patent infringement<br />
dispute, courts should apply the traditional fourfactor<br />
test used by courts of equity. See eBay, Inc. v.<br />
MercExchange, LLC, --- U.S. ----, ----, 126 S.Ct.<br />
1837, 1839, 164 L.Ed.2d 641 (2006). The prevailing<br />
plaintiff must demonstrate: “(1) that it has suffered an<br />
irreparable injury; (2) that remedies available at law,<br />
such as monetary damages, are inadequate to<br />
compensate for that injury; (3) that, considering the<br />
balance of hardships between the plaintiff and<br />
defendant, a remedy in equity is warranted; and (4)<br />
that the public interest would not be disserved by a<br />
permanent injunction.” Id. The Supreme Court held<br />
“the decision whether to grant or deny injunctive<br />
relief rests within the equitable discretion of the<br />
district courts, and that such discretion must be<br />
exercised consistent with traditional principles of<br />
equity, in patent disputes no less than in other cases<br />
governed by such standards.” Id. at 1841. For a<br />
further discussion of eBay, see Wendy R. Stein, The<br />
Supreme Court eBay Decision: Eliminating Special<br />
Rules in <strong>Patent</strong> Cases, 13 Intell. Prop. Today 18<br />
(Oct.2006).<br />
B. Application<br />
1. Irreparable harm<br />
*2 Sundance says that it will suffer irreparable harm<br />
in the absence of issuance of an injunction because<br />
DeMonte competes with Sundance's licensees who<br />
have been placed at a competitive disadvantage due<br />
to DeMonte's infringing sales. Essentially, Sundance<br />
says that the nature of the marketplace for tarp<br />
systems for trucks is such that an injunction is<br />
required. This argument is not persuasive. Not only<br />
did Sundance delay in filing suit and seeking<br />
injunctive relief, the market for tarp systems contains<br />
many other competitors and non-segmented cover<br />
systems have a larger percentage over segmented<br />
systems. Moreover, as DeMonte points out, the<br />
segmented cover is but one feature of its Quick Draw<br />
system. Thus, it cannot be said that Sundance's<br />
licensees are losing sales to DeMonte expressly<br />
because of its infringement of the segmented cover. It<br />
is possible that lost sales are due to a desire for other<br />
features of the Quick Draw system or are sales lost to<br />
other competitors in the marketplace. Sundance<br />
simply cannot tie alleged lost sales to the nature of<br />
DeMonte's infringement. FN2<br />
FN2. The question of DeMonte's<br />
infringement is still open. First, damages<br />
have yet to be determined and are the<br />
subject of another trial and cross motions for<br />
partial summary judgment on the issue of<br />
laches Second, DeMonte has filed a motion<br />
for judgment as a matter of law seeking to<br />
set aside the jury's verdict. Although<br />
Sundance has yet to file a response, it<br />
appears that the motion is not without its<br />
difficulties.<br />
2. Adequacy of Remedies Available at Law<br />
Sundance says that money damages are not adequate<br />
again because of the nature of the competition<br />
between DeMonte and Sundance's licensees. This<br />
fact does not establish an inadequate remedy at law.<br />
Indeed, Sundance licenses the 109 patent to others,<br />
and offered to license it to DeMonte prior to filing<br />
suit against it, thus demonstrating that money<br />
damages are adequate. Their conduct against<br />
DeMonte and others (Aero) indicates an interest only<br />
in obtaining money damages against accused<br />
infringers.<br />
3. Balance of Hardships<br />
Sundance says that the hardships weigh in its favor<br />
because it has endured a trial and protracted<br />
reexamination proceedings and now has a verdict in<br />
their favor. DeMonte, however, says that it will suffer<br />
hardship if an injunction is entered, which would<br />
affect it ability to compete with other tarp<br />
manufacturers and could force it out of business.<br />
Under these circumstances, the balance of harms<br />
favors DeMonte.<br />
4. Public Interest<br />
Although the public has an interest in redressing<br />
infringement, due to the fact that a injunction would<br />
harm third parties (DeMonte's employees and<br />
customers) and given the nature of the marketplace,<br />
this factor does not weigh in Sundance's favor.<br />
SO ORDERED.<br />
© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.
Slip Copy Page 3<br />
Slip Copy, 2007 WL 37742 (E.D.Mich.)<br />
(Cite as: Slip Copy)<br />
E.D.Mich.,2007.<br />
Sundance, Inc. v. DeMonte Fabricating Ltd.<br />
Slip Copy, 2007 WL 37742 (E.D.Mich.)<br />
Briefs and Other Related Documents (Back to top)<br />
• 2006 WL 2032803 (Trial Motion, Memorandum<br />
and Affidavit) Defendants' Motion for Partial<br />
Summary Judgment (Jun. 30, 2006) Original Image<br />
of this Document (PDF)<br />
• 2006 WL 1733271 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiffs' Objections to Order Staying<br />
Proceedings (May 9, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 1355649 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiffs' reply in support of their<br />
motion in limine for an order to preclude testimony at<br />
trial by defendants' designated expert, attorney daniel<br />
h. Bliss (Apr. 14, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 1355650 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiffs' Brief in Response<br />
Defendants' Motion Regarding what Examples of<br />
their Products the Parties Can Bring to a View in this<br />
Matter (Apr. 14, 2006) Original Image of this<br />
Document (PDF)<br />
• 2006 WL 1327920 (Trial Motion, Memorandum<br />
and Affidavit) Defendant's Response to Plaintiffs'<br />
Motion in Limine for an Order to Preclude<br />
Testimony at Trial by Dennis Pedder, PTO Examiner<br />
(Apr. 10, 2006) Original Image of this Document<br />
(PDF)<br />
• 2006 WL 1355645 (Trial Motion, Memorandum<br />
and Affidavit) Defendants' Brief in Reply in<br />
Opposition to Plaintiffs' Motion in Limine to<br />
Preclude Reference to Inequitable Conduct Claims in<br />
the Presence of the Jury (Apr. 10, 2006) Original<br />
Image of this Document (PDF)<br />
• 2006 WL 1355646 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiffs' Response to Defendants'<br />
Motion for Partial Summary Judgment (Apr. 10,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 1355647 (Trial Motion, Memorandum<br />
and Affidavit) Defendants' Reply in Opposition to<br />
Plaintiffs' Brief in Support of Plaintiffs' Motion in<br />
Limine re Testimony at Trial by Humphrey Mosley<br />
(Apr. 10, 2006) Original Image of this Document<br />
(PDF)<br />
• 2006 WL 1355648 (Trial Motion, Memorandum<br />
and Affidavit) Defendant's Response to Plaintiff's<br />
Motion in Limine for an Order to Preclude<br />
Testimony at Trial by Defendant's Designated Expert.<br />
Attorney Daniel H. Bliss (Apr. 10, 2006) Original<br />
Image of this Document (PDF)<br />
• 2006 WL 1035533 (Trial Motion, Memorandum<br />
and Affidavit) Brief in Support of Plaintiffs' Motion<br />
in Limine to Preclude Reference to Inequitable<br />
Conduct Claims in the Presence of the Jury (Mar. 28,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 1035534 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiffs' Motion in Limine re<br />
Testimony at Trial of Market Share or Power (Mar.<br />
28, 2006) Original Image of this Document (PDF)<br />
• 2006 WL 1035535 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiffs' Motion in Limine re<br />
Testimony at Trial by Humphrey Mosley (Mar. 28,<br />
2006) Original Image of this Document (PDF)<br />
• 2006 WL 1035536 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiffs' Motion in Limine for an<br />
Order to Preclude Testimony at Trial by Defendants'<br />
Designated Expert, Attorney Daniel H. Bliss (Mar.<br />
28, 2006) Original Image of this Document (PDF)<br />
• 2006 WL 1035537 (Trial Motion, Memorandum<br />
and Affidavit) Plaintiffs' Motion in Limine for an<br />
Order to Preclude Testimony at Trial by Dennis<br />
Pedder, PTO Examiner (Mar. 28, 2006) Original<br />
Image of this Document (PDF)<br />
• 2:02cv73543 (Docket) (Sep. 4, 2002)<br />
END OF DOCUMENT<br />
© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.
185 F.3d 1341 Page 1<br />
185 F.3d 1341, 51 U.S.P.Q.2d 1556<br />
(Cite as: 185 F.3d 1341)<br />
Briefs and Other Related Documents<br />
United States Court of Appeals,Federal Circuit.<br />
GRAIN PROCESSING CORPORATION, Plaintiff-<br />
Appellant,<br />
v.<br />
AMERICAN MAIZE-PRODUCTS COMPANY,<br />
Defendant-Appellee.<br />
No. 98-1081.<br />
Aug. 4, 1999.<br />
Holder of patent on waxy starch hydrolysate brought<br />
infringement claims against competitor. The United<br />
States District Court for the Northern District of<br />
Indiana, James S. Parsons, J., held some of<br />
defendant's products infringing, and appeal was<br />
taken. The Court of Appeals, 840 F.2d 902, reversed<br />
and remanded. On appeal after remand, the Court of<br />
Appeals vacated order amending injunction, 932 F.2d<br />
981, and again remanded. Following trial on<br />
damages, the District Court, Easterbrook, Circuit<br />
Judge, sitting by designation, awarded patent holder<br />
reasonable royalty, 893 F.Supp. 1386, and holder<br />
appealed. The Court of Appeals, 108 F.3d 1392,<br />
remanded for reconsideration of lost profits issue. On<br />
remand, the District Court, Easterbrook, Circuit<br />
Judge, 979 F.Supp. 1233, again held that holder was<br />
not entitled to lost profit damages and awarded<br />
royalty instead. Holder appealed. The Court of<br />
Appeals, Rader, Circuit Judge, held that: (1) fact that<br />
competitor's product, as made by noninfringing<br />
process, was not sold on the market during<br />
infringement period did not render that product<br />
unavailable, and (2) finding that such product was<br />
available and acceptable to consumers, and thus<br />
precluded award of lost profits, was not clearly<br />
erroneous.<br />
Affirmed.<br />
West Headnotes<br />
[1] <strong>Patent</strong>s 291 319(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k319 Damages<br />
291k319(1) k. In General. Most Cited<br />
Cases<br />
District court must exercise sound discretion to<br />
determine the amount of damages for patent<br />
infringement, based upon its underlying factual<br />
findings and legal conclusions.<br />
[2] <strong>Patent</strong>s 291 324.55(5)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k324 Appeal<br />
291k324.55 Questions of Fact, Verdicts,<br />
and Findings<br />
291k324.55(5) k. Issues of<br />
Infringement. Most Cited Cases<br />
Court of Appeals reviews the district court's damages<br />
decision, in a patent infringement suit, for an<br />
erroneous conclusion of law, clearly erroneous<br />
factual findings, or a clear error of judgment<br />
amounting to an abuse of discretion.<br />
[3] <strong>Patent</strong>s 291 319(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k319 Damages<br />
291k319(1) k. In General. Most Cited<br />
Cases<br />
Under statute governing award of damages for patent<br />
infringement, phrase “damages adequate to<br />
compensate” means full compensation for any<br />
damages the patent owner suffered as a result of the<br />
infringement. 35 U.S.C.A. § 284.<br />
[4] <strong>Patent</strong>s 291 318(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(1) k. In General. Most Cited<br />
Cases<br />
Under statute governing award of damages for patent<br />
infringement, full compensation includes any<br />
foreseeable lost profits the patent owner can prove.<br />
35 U.S.C.A. § 284.<br />
[5] <strong>Patent</strong>s 291 318(2)<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
185 F.3d 1341 Page 2<br />
185 F.3d 1341, 51 U.S.P.Q.2d 1556<br />
(Cite as: 185 F.3d 1341)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(2) k. Profits in Addition to<br />
Damages. Most Cited Cases<br />
To recover lost profits for patent infringement, the<br />
patent owner must show causation in fact,<br />
establishing that, but for the infringement, he would<br />
have made additional profits. 35 U.S.C.A. § 284.<br />
[6] <strong>Patent</strong>s 291 318(2)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(2) k. Profits in Addition to<br />
Damages. Most Cited Cases<br />
When basing alleged lost profits on lost sales, patent<br />
owner has an initial burden to show a reasonable<br />
probability that he would have made the asserted<br />
sales but for the infringement; once the patent owner<br />
establishes a reasonable probability of “but for”<br />
causation, the burden then shifts to the accused<br />
infringer to show that the patent owner's “but for”<br />
causation claim is unreasonable for some or all of the<br />
lost sales. 35 U.S.C.A. § 284.<br />
[7] <strong>Patent</strong>s 291 318(3)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(3) k. Measure of Profits in<br />
General. Most Cited Cases<br />
Fact that competitor's product, as made by<br />
alternative, noninfringing process, was not sold on<br />
the market during period that patent was infringed by<br />
product as it was made by infringing processes did<br />
not render product as made by noninfringing process<br />
unavailable, for purpose of patent holder's claim for<br />
lost profits. 35 U.S.C.A. § 284.<br />
[8] <strong>Patent</strong>s 291 318(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(1) k. In General. Most Cited<br />
Cases<br />
To be acceptable noninfringing substitute which<br />
precludes award of lost profits in patent infringement<br />
action, the noninfringing product or process must<br />
have been available or on the market at the time of<br />
infringement. 35 U.S.C.A. § 284.<br />
[9] <strong>Patent</strong>s 291 318(3)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(3) k. Measure of Profits in<br />
General. Most Cited Cases<br />
In reconstructing the market to determine what<br />
patentee would have made if infringement had not<br />
occurred, for purpose of claim of lost profits,<br />
patentee must project economic results that did not<br />
occur, and, to prevent the hypothetical from lapsing<br />
into pure speculation, there must be sound economic<br />
proof of the nature of the market and likely outcomes<br />
with infringement factored out of the economic<br />
picture. 35 U.S.C.A. § 284.<br />
[10] <strong>Patent</strong>s 291 318(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(1) k. In General. Most Cited<br />
Cases<br />
A fair and accurate reconstruction of the market that<br />
would have existed if no patent infringement had<br />
occurred, upon patentee's claim of lost profits, must<br />
take into account, where relevant, alternative actions<br />
the infringer foreseeably would have undertaken had<br />
he not infringed. 35 U.S.C.A. § 284.<br />
[11] <strong>Patent</strong>s 291 318(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(1) k. In General. Most Cited<br />
Cases<br />
Findings that competitor's maltodextrin product, as<br />
made by alternative, noninfringing process, was<br />
available during period of patent infringement by<br />
product as it was made by infringing processes, and<br />
that consumers would consider product made by<br />
noninfringing process an acceptable substitute, were<br />
not clearly erroneous, and thus precluded patent<br />
holder's claim for lost profits; competitor had<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
185 F.3d 1341 Page 3<br />
185 F.3d 1341, 51 U.S.P.Q.2d 1556<br />
(Cite as: 185 F.3d 1341)<br />
necessary chemical materials, equipment, know-how<br />
and experience, as well as economic incentive, to<br />
produce product made by noninfringing process<br />
during period of infringement, and consumers'<br />
demand was not affected by process used. 35<br />
U.S.C.A. § 284.<br />
[12] <strong>Patent</strong>s 291 318(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(1) k. In General. Most Cited<br />
Cases<br />
Critical time period for determining availability of a<br />
noninfringing alternative, which precludes award of<br />
lost profits for patent infringement, is the period of<br />
infringement for which the patent owner claims<br />
damages, that is, the accounting period. 35 U.S.C.A.<br />
§ 284.<br />
[13] <strong>Patent</strong>s 291 318(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(1) k. In General. Most Cited<br />
Cases<br />
A patent infringer's act of switching to a<br />
noninfringing substitute after the accounting period<br />
does not alone show availability of the noninfringing<br />
substitute during this critical time, for purpose of<br />
defeating patentee's claim for lost profits. 35<br />
U.S.C.A. § 284.<br />
[14] <strong>Patent</strong>s 291 318(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(1) k. In General. Most Cited<br />
Cases<br />
When alleged, noninfringing alternative is not on the<br />
market during accounting period for which patentee<br />
claims damages, trial court may reasonably infer that<br />
it was not available as a noninfringing substitute at<br />
that time, for purpose of patentee's claim for lost<br />
profits; accused infringer then has burden to<br />
overcome inference by showing that substitute was<br />
available during accounting period, and mere<br />
speculation or conclusory assertions will not suffice<br />
to overcome the inference. 35 U.S.C.A. § 284.<br />
[15] <strong>Patent</strong>s 291 318(1)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k318 Profits<br />
291k318(1) k. In General. Most Cited<br />
Cases<br />
Consumer demand defines the relevant market and<br />
relative substitutability among products therein, for<br />
purpose of claim that noninfringing product was<br />
available during period of patent infringement,<br />
thereby precluding award of lost profits; important<br />
factors shaping demand may include consumers'<br />
intended use for patentee's product, similarity of<br />
physical and functional attributes of patentee's<br />
product to alleged competing products, and price,<br />
and, where alleged substitute differs from patentee's<br />
product in one or more of these respects, patentee<br />
often must adduce economic data supporting its<br />
theory of the relevant market in order to show “but<br />
for” causation. 35 U.S.C.A. § 284.<br />
<strong>Patent</strong>s 291 328(2)<br />
291 <strong>Patent</strong>s<br />
291XIII Decisions on the Validity, Construction,<br />
and Infringement of Particular <strong>Patent</strong>s<br />
291k328 <strong>Patent</strong>s Enumerated<br />
291k328(2) k. Original Utility. Most Cited<br />
Cases<br />
3,849,194. Cited.<br />
*1343 Geoffrey G. Gilbert, McBride, Baker & Coles,<br />
of Chicago, Illinois, argued for plaintiff-appellant.<br />
With him on the brief was Marc L. Fogelberg.<br />
Robert L. Baechtold, Fitzpatrick, Cella, Harper &<br />
Scinto, of New York, New York, argued for<br />
defendant-appellee. With him on the brief were<br />
Nicholas N. Kallas and Dominick A. Conde.<br />
Before RADER, Circuit Judge, FRIEDMAN, Senior<br />
Circuit Judge, and BRYSON, Circuit Judge.<br />
RADER, Circuit Judge.<br />
The United States District Court for the Northern<br />
District of Indiana denied Grain Processing<br />
Corporation lost profits for American Maize-<br />
Products' infringement of U.S. <strong>Patent</strong> No. 3,849,194<br />
(the '194 patent). Grain Processing Corp. v.<br />
American Maize-Products Co., 979 F.Supp. 1233, 44<br />
USPQ2d 1782 (N.D.Ind.1997) (Grain Processing<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
185 F.3d 1341 Page 4<br />
185 F.3d 1341, 51 U.S.P.Q.2d 1556<br />
(Cite as: 185 F.3d 1341)<br />
VIII ). The district court instead awarded Grain<br />
Processing a 3% royalty on American Maize's<br />
infringing sales. Id.; see also Grain Processing<br />
Corp. v. American Maize-Products Co., 893 F.Supp.<br />
1386, 1396, 37 USPQ2d 1299, 1307 (N.D.Ind.1995)<br />
(Grain Processing VI ), rev'd, Nos. 95-1506, 95-<br />
1507, 108 F.3d 1392, 1997 WL 71726 (Fed.Cir.<br />
Feb.20, 1997) (nonprecedential) (Grain Processing<br />
VII ).<br />
The district court found that American Maize proved<br />
that a noninfringing substitute was available, though<br />
not on the market or for sale, during the period of<br />
infringement. The court found further that this<br />
substitute was acceptable to all purchasers of the<br />
infringing product and concluded that American<br />
Maize rebutted the inference of “but for” causation<br />
for Grain Processing's alleged lost sales. Upholding<br />
the district court's findings and conclusions, this court<br />
affirms.<br />
I.<br />
This appeal culminates the lengthy and complex<br />
history of this case, spanning more than eighteen<br />
years and eight prior judicial opinions, three by this<br />
court. The patent featured in this infringement suit<br />
involves maltodextrins, a versatile family of food<br />
additives made from starch. Commercial food<br />
manufacturers purchase hundreds of millions of<br />
pounds of maltodextrins annually from producers<br />
such as Grain Processing and American Maize.<br />
Maltodextrins serve well as food additives because<br />
they are bland in taste and clear in solution. They do<br />
not affect the natural taste or color of other<br />
ingredients in food products. Maltodextrins also<br />
improve the structure or behavior of food products.<br />
For instance, they inhibit crystal growth, add body,<br />
improve binding and viscosity, and preserve food<br />
properties in low temperatures. Consequently, food<br />
manufacturers use maltodextrins in a wide variety of<br />
products such as frostings, syrups, drinks, cereals,<br />
and frozen foods.<br />
Maltodextrins belong to a category of chemical<br />
products known as “starch hydrolysates.”*1344<br />
Producers make starch hydrolysates by putting starch<br />
through hydrolysis, a chemical reaction with water.<br />
Hydrolysis breaks down the starch and converts some<br />
of it to dextrose. FN1 With adjustments, this process<br />
yields more dextrose. For instance, additional<br />
enzymes, time extensions, and increases in<br />
temperature or pH enhance the reaction. After<br />
hydrolysis, the producer typically refines, spraydries,<br />
and packages the starch hydrolysate for sale in<br />
powder form.<br />
FN1. More specifically, a starch molecule is<br />
a complex carbohydrate, i.e., it is a chain of<br />
carbohydrate molecules, (C6 H10 O5) n ,<br />
where n is the number of molecules in the<br />
chain. Hydrolysis breaks the bonds<br />
between some of the C6 H10 O5 molecules<br />
and converts them to dextrose, C6 H12 O6.<br />
Maltodextrins are starch hydrolysates that have a<br />
“dextrose equivalence” of less than 20. Dextrose<br />
equivalence (D.E.) is a percentage measurement of<br />
the “reducing sugars content” of the starch<br />
hydrolysate. D.E. reflects the degree to which the<br />
hydrolysis process broke down the starch and<br />
converted it into dextrose. Converting more starch<br />
into dextrose increases the D.E. of the resulting<br />
starch hydrolysate. Hence, pure starch has a D.E. of<br />
zero, pure dextrose a D.E. of 100. The D.E. value<br />
indicates functional properties of a maltodextrin. A<br />
15 D.E. maltodextrin, for example, is slightly sweeter<br />
and more soluble than a 5 D.E. maltodextrin. On the<br />
other hand, the 5 D.E. maltodextrin has more<br />
prevalent binding, bodying, and crystal inhibiting<br />
properties.<br />
Grain Processing is the assignee of the '194 patent,<br />
“Low D.E. Starch Conversion Products,” which<br />
claims maltodextrins with particular attributes, and<br />
processes for producing them. The claimed<br />
invention represents improvements in the “heavily<br />
explored” field of starch hydrolysates. See Grain<br />
Processing Corp. v. American Maize-Products Co.,<br />
No. 81-0237, slip op. at 1 (N.D.Ind. March 16, 1987)<br />
(Grain Processing I ), rev'd, 840 F.2d 902, 5<br />
USPQ2d 1788 (Fed.Cir.1988) (Grain Processing II ).<br />
Claim 12, the sole claim on appeal, reads:<br />
12. A waxy starch hydrolysate having<br />
a dextrose equivalent value between about 5 and<br />
about 25;<br />
a descriptive ratio greater than about 2, said<br />
descriptive ratio being the quotient obtained by<br />
dividing the sum of the percentage of saccharides,<br />
dry basis, having a degree of polymerization of 1 to<br />
6, by the dextrose equivalent value;<br />
a monosaccharide content in the range of from about<br />
0.1 percent by weight, to about 2.4 percent by weight,<br />
dry basis;<br />
a dissaccharide content in the range of from about 1.3<br />
percent to about 9.7 percent, by weight, dry basis;<br />
and<br />
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being further characterized as capable of producing<br />
an aqueous solution of exceptional clarity and<br />
substantially complete lack of opaqueness when said<br />
hydrolysate is added to water.<br />
(Emphasis added.)<br />
Grain Processing has manufactured and sold a line of<br />
maltodextrins under the “Maltrin” brand name since<br />
1969. The Maltrin line includes “Maltrin M100,” a<br />
10 D.E. maltodextrin. None of the Maltrin products,<br />
including M100, fall within claim 12 because they<br />
are all made from a non-waxy starch. See Grain<br />
Processing I, No. 81-0237, slip op. at 65 (construing<br />
claim 12 to require a waxy starch, as recited in the<br />
preamble).<br />
American Maize began selling maltodextrins in 1974.<br />
It made and sold several types of maltodextrins,<br />
including “Lo-Dex 10,” a 10 D.E. waxy starch<br />
maltodextrin. American Maize sold Lo-Dex 10<br />
(called Fro-Dex 10 before 1982) during the entire<br />
time Grain Processing owned the '194 patent rights,<br />
from 1979 until the patent expired in 1991. During<br />
this time, however, *1345 American Maize used four<br />
different processes for producing Lo-Dex 10. The<br />
changes in American Maize's production processes,<br />
and the slight chemical differences in the Lo-Dex 10<br />
from each process, are central to the lost profits issue<br />
in this appeal.<br />
American Maize used a first process (Process I) from<br />
June 1974 to July 1982. In Process I, American<br />
Maize used a single enzyme (an alpha amylase) to<br />
facilitate starch hydrolysis. American Maize<br />
controlled the reaction to produce a starch<br />
hydrolysate with the desired properties, including<br />
D.E. value.<br />
Grain Processing sued American Maize for<br />
infringement on May 12, 1981, based on American<br />
Maize's Lo-Dex 10 sales as well as sales of two other<br />
maltodextrins - Lo-Dex 5 and ARD 2370. Grain<br />
Processing asserted all fourteen claims of the '194<br />
patent, including product and process claims. The<br />
district court bifurcated the infringement and<br />
damages issues for trial.<br />
In August 1982, while the suit was pending,<br />
American Maize reduced the amount of alpha<br />
amylase enzyme in its process to lower its production<br />
costs. To achieve the same end result with less<br />
enzyme, American Maize continued the reaction<br />
longer. American Maize used this process (Process<br />
II) exclusively to produce Lo-Dex 10 from August<br />
1982 to February 1988. Grain Processing asserted in<br />
its lawsuit that Process II Lo-Dex 10 also infringed<br />
the '194 patent.<br />
American Maize contended that Lo-Dex 10 (by both<br />
Processes I and II) did not infringe claim 12 of the<br />
'194 patent because it did not have a “descriptive<br />
ratio greater than about 2,” as required by the<br />
claim. FN2 Descriptive ratio (D.R.) is a function of the<br />
D.E. measurement. According to the formula in<br />
claim 12, D.R. is inversely proportional to D.E.<br />
Because different scientific tests yield slightly<br />
different D.E. measurements, the resulting D.R.<br />
values derived therefrom also vary slightly.<br />
FN2. The district court later interpreted the<br />
“about 2” limitation to require a minimum<br />
D.R. of 1.9, a finding the parties do not<br />
challenge.<br />
When Grain Processing accused American Maize of<br />
infringement, Grain Processing used the “Schoorl<br />
test” for measuring the D.E. of Lo-Dex 10.<br />
American Maize, on the other hand, used the “Lane-<br />
Eynon test,” which it believed was the “industry<br />
standard,” to measure D.E. The Schoorl test tends to<br />
yield a lower D.E. and therefore a higher D.R. than<br />
Lane-Eynon. Under the Lane-Eynon test, American<br />
Maize's measurements revealed that Lo-Dex 10 did<br />
not infringe claim 12, because all of its Lo-Dex 10<br />
samples had a D.R. of less than 1.9. Grain<br />
Processing's Schoorl tests on the same samples,<br />
however, yielded a D.R. of greater than 2.<br />
Following a bench trial, the district court held that<br />
Lo-Dex 10 did not infringe any of the claims because<br />
it did not meet the “exceptional clarity” limitation.<br />
This court reversed, holding that Lo-Dex 10 met the<br />
“exceptional clarity” limitation and therefore<br />
infringed claim 12 and its dependent claims 13-14.<br />
Grain Processing II, 840 F.2d at 911. This court's<br />
decision, like the district court's, did not resolve the<br />
discrepancy between tests for measuring D.E. value.<br />
The district court subsequently entered an injunction<br />
on October 21, 1988, prohibiting American Maize<br />
from making or selling Lo-Dex 10 or any other waxy<br />
starch hydrolysate that infringed claims 12-14.<br />
In response to the injunction, American Maize<br />
developed yet another process for producing Lo-Dex<br />
10. In this new process (Process III), American<br />
Maize used more alpha amylase, adjusted the<br />
temperature and pH, and reduced the reaction time.<br />
American Maize used Process III exclusively to<br />
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produce Lo-Dex 10 from March 1988 to April 1991.<br />
*1346 American Maize believed Process III would<br />
yield a more uniform, noninfringing output of Lo-<br />
Dex 10. See Grain Processing VI, 893 F.Supp. at<br />
1391. In fact, American Maize was “determined to<br />
avoid shipping a single bag of Lo-Dex 10 with a D.R.<br />
exceeding 1.9.” See id. Process III worked as<br />
American Maize intended. American Maize's<br />
measurements - using the Lane-Eynon test - showed<br />
that Process III Lo-Dex 10 samples all had<br />
descriptive ratios of less than 1.9 and therefore did<br />
not infringe. See id. Moreover, American Maize's<br />
customers did not discern any difference between<br />
Process III Lo-Dex 10 and Lo-Dex 10 from Processes<br />
I or II. See id.<br />
In 1990, Grain Processing tested commercial samples<br />
of American Maize's Process III Lo-Dex 10. Grain<br />
Processing again used the Schoorl test to measure<br />
D.E. Grain Processing's measurements showed that<br />
American Maize's Process III output had a D.R. value<br />
of greater than 1.9 and therefore infringed. Grain<br />
Processing filed a contempt motion in the district<br />
court.<br />
The district court initially held American Maize in<br />
contempt for continuing to sell an infringing product.<br />
Grain Processing Corp. v. American Maize-Products<br />
Co., No. 81-0237 (N.D.Ind. May 15, 1990) (Grain<br />
Processing III ), modified, No. 81-0237, (N.D.Ind.<br />
July 16, 1990) (Grain Processing IV ), rev'd, 932<br />
F.2d 981, 21 USPQ2d 1474 (Fed.Cir.1991)<br />
(nonprecedential) (Grain Processing V ). However,<br />
the district court modified the order in 1991 to allow<br />
American Maize to use any scientifically acceptable<br />
method to show noninfringement. Grain Processing<br />
IV, No. 81-0237. Because American Maize's<br />
Process III output consistently had a D.R. of less than<br />
1.9 using Lane-Eynon, the district court ruled that it<br />
did not infringe. Id. Grain Processing appealed.<br />
This court reversed in a nonprecedential opinion.<br />
Grain Processing V, 21 USPQ2d 1474. Because the<br />
prosecution history of the '194 patent indicates that<br />
the inventor used the Schoorl test to measure D.E. of<br />
his invention, this court held that the Schoorl test, not<br />
Lane-Eynon, determines the relevant values in this<br />
case. Id. at 1477.<br />
American Maize then adopted a fourth process<br />
(Process IV) for producing Lo-Dex 10. In Process<br />
IV, American Maize added a second enzyme,<br />
glucoamylase, to the reaction. Glucoamylase breaks<br />
down starch to a shorter average saccharide length.<br />
This shorter saccharide length yields a smaller D.R.<br />
without affecting D.E.<br />
From the time American Maize began experimenting<br />
with the glucoamylase-alpha amylase combination,<br />
or the “dual enzyme method,” it took only two weeks<br />
to perfect the reaction and begin mass producing Lo-<br />
Dex 10 using Process IV. See Grain Processing VI,<br />
893 F.Supp. at 1391. According to the finding of the<br />
district court, this two-week development and<br />
production time is “practically instantaneous” for<br />
large-scale production. Id. American Maize simply<br />
experimented with different combinations of<br />
glucoamylase and alpha amylase, along with pH,<br />
heat, and time of the reaction. See id. American<br />
Maize did not change any equipment, source<br />
starches, or other ingredients from Process III. See id.<br />
Glucoamylase has been commercially available and<br />
its effect in starch hydrolysis widely known since the<br />
early 1970's, before the '194 patent issued. See id.<br />
American Maize had not used Process IV to produce<br />
Lo-Dex earlier because the high cost of glucoamylase<br />
makes Process IV more expensive than the other<br />
processes. See id. at 1392.<br />
The parties agree that Process IV yielded only<br />
noninfringing Lo-Dex 10 and that consumers<br />
discerned no difference between Process IV Lo-Dex<br />
10 and Lo-Dex 10 made by Processes I-III. American<br />
Maize used Process IV exclusively to produce*1347<br />
Lo-Dex 10 from April 1991 until the '194 patent<br />
expired in November 1991, and then switched back<br />
to the cheaper Process III.<br />
The district court commenced the damages portion of<br />
the trial on July 10, 1995. Grain Processing claimed<br />
lost profits in the form of lost sales of Maltrin M100,<br />
price erosion, and American Maize's accelerated<br />
market entry after the patent expired. Grain<br />
Processing further claimed that, for any of American<br />
Maize's infringing sales not covered by a lost profits<br />
award, Grain Processing should receive a 28%<br />
royalty. After a three day bench trial, the district<br />
court denied lost profits and determined that a 3%<br />
reasonable royalty was adequate to compensate Grain<br />
Processing. Grain Processing VI, 893 F.Supp. at<br />
1392-93. The royalty applies to all of American<br />
Maize's Lo-Dex 10 sales from May 12, 1981 (when<br />
Grain Processing filed suit) FN3 to April 1991 (when<br />
American Maize converted to Process IV, thereby<br />
producing a noninfringing product).<br />
FN3. Grain Processing was not entitled to<br />
damages before this date because neither<br />
Grain Processing nor its predecessor in<br />
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interest had marked the Mor-Rex products<br />
with the patent number pursuant to 35<br />
U.S.C. § 287(a) (1994). See Grain<br />
Processing VI, 893 F.Supp. at 1393-95.<br />
The trial court determined that Grain Processing<br />
could not establish causation for lost profits, because<br />
American Maize “could have produced” a<br />
noninfringing substitute 10 D.E. maltodextrin using<br />
Process IV. Grain Processing VI, 893 F.Supp. at<br />
1391-92. “With infringing Lo-Dex 10 banned, the<br />
customers' substitute is non-infringing Lo-Dex 10.”<br />
Id. at 1392 (emphasis added). American Maize did<br />
not actually produce and sell this noninfringing<br />
substitute until April 1991, seven months before the<br />
'194 patent expired, but the district court nevertheless<br />
found that its availability “scotches [Grain<br />
Processing's] request for lost-profits damages.” Id.<br />
The district court also found that American Maize's<br />
production cost difference between infringing and<br />
noninfringing Lo-Dex 10 effectively capped the<br />
reasonable royalty award. American Maize showed<br />
that it cost only 2.3% more to make noninfringing<br />
Process IV products than it did to make infringing<br />
Process I-III products. See Grain Processing VI, 893<br />
F.Supp. at 1392. The district court also found that<br />
“buyers viewed as equivalent” the Process I-III and<br />
Process IV output: “Lo-Dex 10 made by Process IV<br />
had a lower D.R. [which is what makes it<br />
noninfringing] ... but no one argues that any customer<br />
cared a whit about the product's descriptive ratio.”<br />
Id. at 1390. The district court concluded that under<br />
these facts, American Maize, when faced with a<br />
hypothetical offer to license the '194 patent in 1974<br />
(or to renegotiate the rate in 1979, when Grain<br />
Processing acquired the patent rights and its ability to<br />
collect damages began), would not have paid more<br />
than a 3% royalty rate. The court reasoned that this<br />
rate would reflect the cost difference between<br />
Processes I-III and Process IV, while also taking into<br />
account possible cost fluctuations (due to fluctuating<br />
enzyme prices) and the elimination of American<br />
Maize's risk of producing an infringing product,<br />
despite its best efforts. Id. at 1393. The court<br />
concluded that if Grain Processing had insisted on a<br />
rate greater than 3% in the hypothetical negotiations,<br />
American Maize instead would have chosen to invest<br />
in producing noninfringing Lo-Dex 10 with Process<br />
IV. Id.<br />
Grain Processing appealed the district court's denial<br />
of lost profits, alleging that American Maize cannot<br />
escape liability for lost profits on the basis of “a<br />
noninfringing substitute that did not exist during, and<br />
was not developed until after, the period of<br />
infringement.” Grain Processing VII, 1997 WL<br />
71726, at **1. This court reversed and remanded. Id.<br />
This court observed*1348 that “[t]he [district] court<br />
denied [Grain Processing's] request for lost profits<br />
because [American Maize] developed a new process<br />
of producing Lo-Dex 10 in 1991 [after years of<br />
infringement] that did not infringe the '194 patent.”<br />
Id. This court noted, however, that the mere fact of<br />
“switching to a noninfringing product years after the<br />
period of infringement [does] not establish the<br />
presence of a noninfringing substitute during the<br />
period of infringement.” Id. at **2 (citing State<br />
Indus., Inc. v. Mor-Flo Industries, Inc., 883 F.2d<br />
1573, 1579, 12 USPQ2d 1026, 1030 (Fed.Cir.1989);<br />
Panduit Corp. v. Stahlin Brothers Fibre Works, Inc.,<br />
575 F.2d 1152, 1160-62, 197 USPQ 726, 734-35 (6th<br />
Cir.1978)). This court noted that a product or<br />
process must be “available or on the market at the<br />
time of infringement” to qualify as an acceptable<br />
non-infringing substitute. Grain Processing VII,<br />
1997 WL 71726, at **2 (emphasis added).<br />
On remand, the district court again denied Grain<br />
Processing lost profits. The district court found that<br />
Process IV was “available” throughout the period of<br />
infringement. Grain Processing VIII, 979 F.Supp. at<br />
1235. This factual finding, the district court<br />
explained, was not based merely on “the simple fact<br />
of switching [to Process IV]” but rather on several<br />
subsidiary factual findings regarding the technology<br />
of enzyme-assisted starch hydrolysis and the price<br />
and market structure for the patentee's and accused<br />
infringer's products. Id. at 1234-35. The trial court<br />
found that American Maize could obtain all of the<br />
materials needed for Process IV, including the<br />
glucoamylase enzyme, before 1979, and that the<br />
effects of the enzymes in starch hydrolysis were well<br />
known in the field by that time. Id. American Maize<br />
also had all of the necessary equipment, know-how,<br />
and experience to implement Process IV whenever it<br />
chose to do so during the time of infringement. See<br />
id. “The sole reason [American Maize did not use<br />
Process IV to produce Lo-Dex 10 prior to 1991] was<br />
economic: glucoamalyse is more expensive than the<br />
alpha amylase enzyme that [American Maize] had<br />
been using.” Id. American Maize did not make the<br />
substitution sooner because its test results using the<br />
Lane-Eynon method convinced it that it was not<br />
infringing. See id.<br />
The district court concluded that “the profit lost from<br />
infringement is the cost and market price difference<br />
attributable to using glucoamylase.” Grain<br />
Processing VIII, 979 F.Supp. at 1237. The court did<br />
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not further address the amount of damages, having<br />
already found in Grain Processing VI that the<br />
infringement did not affect the market price of Lo-<br />
Dex 10, and having figured the 2.3% cost increase<br />
into the 3% royalty award.<br />
The district court also went on to explain its denial of<br />
lost profits “from a different angle.” Grain<br />
Processing VIII, 979 F.Supp. at 1237. The district<br />
court stated that Panduit and Rite-Hite Corp. v.<br />
Kelley Co., Inc., 56 F.3d 1538, 35 USPQ2d 1065<br />
(Fed.Cir.1995) (en banc) “identify demand for the<br />
patented product as an essential element of the patent<br />
holder's lost-profits claim.” Grain Processing VIII,<br />
979 F.Supp. at 1237. The district court recognized<br />
that there was “substantial demand for D.E. 10<br />
maltodextrins.” Id. However, the district court stated<br />
the dispositive question as “whether there is<br />
economically significant demand for a product<br />
having all ... attributes [of the claim in suit],” i.e.,<br />
whether consumers demand every claimed feature.<br />
Id. The court found no such demand in this case<br />
because “[t]wo of the essential elements of the claim<br />
- that the starch be ‘waxy’ and that the ‘descriptive<br />
ratio [be] greater than about 2’ - are irrelevant to<br />
consumers.” Id. The court concluded that Grain<br />
Processing “does not have a patent on D.E. 10<br />
maltodextrins, the economically significant product,<br />
and therefore cannot recover lost profits damages on<br />
account of [American Maize's] infringement.” Id. at<br />
1238.<br />
*1349 Grain Processing appeals the district court's<br />
decision.<br />
II.<br />
[1][2] The district court must exercise sound<br />
discretion to determine the amount of damages, based<br />
upon its underlying factual findings and legal<br />
conclusions. See State Indus., 883 F.2d at 1576-77.<br />
This court reviews the district court's damages<br />
decision for “an erroneous conclusion of law, clearly<br />
erroneous factual findings, or a clear error of<br />
judgment amounting to an abuse of discretion.” Id. at<br />
1577; Rite-Hite, 56 F.3d at 1543-44.<br />
[3][4] Upon proof of infringement, Title 35, Section<br />
284 provides that “the court shall award [the patent<br />
owner] damages adequate to compensate for the<br />
infringement but in no event less than a reasonable<br />
royalty for the use made of the invention by the<br />
infringer.” 35 U.S.C. § 284 (1998). The phrase<br />
“damages adequate to compensate” means “full<br />
compensation for ‘any damages' [the patent owner]<br />
suffered as a result of the infringement.” General<br />
Motors Corp. v. Devex Corp., 461 U.S. 648, 654, 103<br />
S.Ct. 2058, 2062, 76 L.Ed.2d 211, 217 USPQ 1185,<br />
1188 (1983). Full compensation includes any<br />
foreseeable lost profits the patent owner can prove.<br />
See Rite-Hite, 56 F.3d at 1545-47.<br />
[5][6] To recover lost profits, the patent owner must<br />
show “causation in fact,” establishing that “but for”<br />
the infringement, he would have made additional<br />
profits. See King Instruments Corp. v. Perego, 65<br />
F.3d 941, 952, 36 USPQ2d 1129, 1137<br />
(Fed.Cir.1995). When basing the alleged lost profits<br />
on lost sales, the patent owner has an initial burden to<br />
show a reasonable probability that he would have<br />
made the asserted sales “but for” the infringement.<br />
See id.; Rite-Hite, 56 F.3d at 1545. Once the patent<br />
owner establishes a reasonable probability of “but<br />
for” causation, “the burden then shifts to the accused<br />
infringer to show that [the patent owner's ‘but for’<br />
causation claim] is unreasonable for some or all of<br />
the lost sales.” Id. at 1544.<br />
[7] At trial, American Maize proved that Grain<br />
Processing's lost sales assertions were unreasonable.<br />
The district court adopted Grain Processing's initial<br />
premise that, because Grain Processing and American<br />
Maize competed head-to-head as the only significant<br />
suppliers of 10 D.E. maltodextrins, consumers<br />
logically would purchase Maltrin 100 if Lo-Dex 10<br />
were not available. See Lam, Inc. v. Johns-Manville<br />
Corp., 718 F.2d 1056, 1065, 219 USPQ 670, 675<br />
(Fed.Cir.1983) (holding that the patent owner may<br />
satisfy his initial burden by inference in a twosupplier<br />
market). However, the district court found<br />
that American Maize proved that Process IV was<br />
available and that Process IV Lo-Dex 10 was an<br />
acceptable substitute for the claimed invention. In<br />
the face of this noninfringing substitute, Grain<br />
Processing could not prove lost profits. See Grain<br />
Processing VIII, 979 F.Supp. at 1234-35.<br />
[8] American Maize concedes that it did not make or<br />
sell Lo-Dex 10 from Process IV until 1991, after the<br />
period of infringement. However, an alleged<br />
substitute not “on the market” or “for sale” during the<br />
infringement can figure prominently in determining<br />
whether a patentee would have made additional<br />
profits “but for” the infringement. As this court<br />
stated in Grain Processing VII, “to be an acceptable<br />
non-infringing substitute, the product or process must<br />
have been available or on the market at the time of<br />
infringement.” Grain Processing VII, 1997 WL<br />
71726, at **2 (emphasis added). This statement is<br />
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an apt summary of this court's precedent, which<br />
permits available alternatives - including but not<br />
limited to products on the market - to preclude lost<br />
profits damages.<br />
*1350 In Aro Manufacturing, the Supreme Court<br />
stated that the statutory measure of “damages” is “the<br />
difference between [the patent owner's] pecuniary<br />
condition after the infringement, and what his<br />
condition would have been if the infringement had<br />
not occurred.” Aro Mfg. Co. v. Convertible Top<br />
Replacement Co., 377 U.S. 476, 507, 84 S.Ct. 1526,<br />
1543, 12 L.Ed.2d 457, 141 USPQ 681, 694 (1964)<br />
(plurality opinion), quoting Yale Lock Mfg. Co. v.<br />
Sargent, 117 U.S. 536, 552, 6 S.Ct. 934, 942, 29<br />
L.Ed. 954 (1886). The determinative question, the<br />
Supreme Court stated, is: “had the Infringer not<br />
infringed, what would the <strong>Patent</strong> Holder-Licensee<br />
have made” Aro, 377 U.S. at 507, 84 S.Ct. 1526<br />
(quoting Livesay Window Co. v. Livesay Indus., Inc.,<br />
251 F.2d 469, 471, 116 USPQ 167, 168 (5th<br />
Cir.1958)); see also Brooktree Corp. v. Advanced<br />
Micro Devices, Inc., 977 F.2d 1555, 1579, 24<br />
USPQ2d 1401, 1418 (Fed.Cir.1992). The “but for”<br />
inquiry therefore requires a reconstruction of the<br />
market, as it would have developed absent the<br />
infringing product, to determine what the patentee<br />
“would ... have made.” See Grain Processing VIII,<br />
979 F.Supp. at 1236.<br />
[9] Reconstructing the market, by definition a<br />
hypothetical enterprise, requires the patentee to<br />
project economic results that did not occur. To<br />
prevent the hypothetical from lapsing into pure<br />
speculation, this court requires sound economic proof<br />
of the nature of the market and likely outcomes with<br />
infringement factored out of the economic picture.<br />
See Oiness v. Walgreen Co., 88 F.3d 1025, 1029-30,<br />
39 USPQ2d 1304, 1307 (Fed.Cir.1996); Water<br />
Technologies Corp. v. Calco, Ltd., 850 F.2d 660,<br />
673, 7 USPQ2d 1097, 1107-08 (Fed.Cir.1988).<br />
Within this framework, trial courts, with this court's<br />
approval, consistently permit patentees to present<br />
market reconstruction theories showing all of the<br />
ways in which they would have been better off in the<br />
“but for world,” and accordingly to recover lost<br />
profits in a wide variety of forms. See, e.g., King<br />
Instruments, 65 F.3d at 953 (upholding award for lost<br />
sales of patentee's unpatented goods that compete<br />
with the infringing goods); Rite-Hite, 56 F.3d at<br />
1550 (holding that a patentee may recover lost profits<br />
on components that have a functional relationship<br />
with the patented invention); Brooktree Corp., 977<br />
F.2d at 1580 (upholding award for price erosion due<br />
to infringer's marketing activities); Minnesota<br />
Mining & Mfg. Co. v. Johnson & Johnson<br />
Orthopaedics, Inc., 976 F.2d 1559, 1579, 24 USPQ2d<br />
1321, 1337 (Fed.Cir.1992) (upholding award for<br />
price erosion due to infringing sales); State Indus.,<br />
883 F.2d at 1580 (upholding award of lost profits in<br />
proportion to patentee's market share of the relevant<br />
market including acceptable noninfringing<br />
substitutes); Paper Converting Mach. Corp. v.<br />
Magna-Graphics Corp., 745 F.2d 11, 22, 223 USPQ<br />
591, 599 (Fed.Cir.1984) (upholding award<br />
compensating the patentee for its decreasing marginal<br />
cost of producing the good, i.e., its increasing<br />
marginal profit, as its volume of production would<br />
have increased); Lam, 718 F.2d at 1065 (upholding<br />
lost profits award for future lost sales, and for the<br />
patentee's increased promotional expenses); BIC<br />
Leisure Products, Inc. v. Windsurfing Int'l, Inc., 687<br />
F.Supp. 134, 137-38, 9 USPQ2d 1152, 1154<br />
(S.D.N.Y.1988), rev'd in part on other grounds, 1<br />
F.3d 1214, 27 USPQ2d 1671 (Fed.Cir.1993)<br />
(permitting recovery for future depressed prices, i.e.,<br />
“projected price erosion”, and for accelerated market<br />
reentry by the infringer). In sum, courts have given<br />
patentees significant latitude to prove and recover<br />
lost profits for a wide variety of foreseeable<br />
economic effects of the infringement.<br />
[10] By the same token, a fair and accurate<br />
reconstruction of the “but for” market also must take<br />
into account, where relevant, alternative actions the<br />
infringer foreseeably would have undertaken had he<br />
*1351 not infringed. Without the infringing product,<br />
a rational would-be infringer is likely to offer an<br />
acceptable noninfringing alternative, if available, to<br />
compete with the patent owner rather than leave the<br />
market altogether. The competitor in the “but for”<br />
marketplace is hardly likely to surrender its complete<br />
market share when faced with a patent, if it can<br />
compete in some other lawful manner. Moreover,<br />
only by comparing the patented invention to its nextbest<br />
available alternative(s) - regardless of whether<br />
the alternative(s) were actually produced and sold<br />
during the infringement - can the court discern the<br />
market value of the patent owner's exclusive right,<br />
and therefore his expected profit or reward, had the<br />
infringer's activities not prevented him from taking<br />
full economic advantage of this right. Cf.<br />
Westinghouse Elec. & Mfg. Co. v. Wagner Elec. &<br />
Mfg. Co., 225 U.S. 604, 614-15, 32 S.Ct. 691, 694,<br />
56 L.Ed. 1222 (1912); Mowry v. Whitney, 81 U.S.<br />
(14 Wall.) 620, 651, 20 L.Ed. 860 (1871); King<br />
Instrument Corp. v. Otari Corp., 767 F.2d 853, 865,<br />
226 USPQ 402, 410-11 (Fed.Cir.1985). Thus, an<br />
accurate reconstruction of the hypothetical “but for”<br />
market takes into account any alternatives available<br />
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to the infringer. See Aro, 377 U.S. at 507, 84 S.Ct.<br />
1526; Yale Lock, 117 U.S. at 552-53, 6 S.Ct. 934;<br />
see also robert P. Merges, <strong>Patent</strong> Law 1080 (2d<br />
Ed.1997) (“[T]he infringer should have a chance to<br />
argue what he or she might have done in the absence<br />
of infringement. Obviously, if the defendant is not<br />
permitted to present evidence of this ilk, the analysis<br />
is quite skewed: only the patentee's ‘best case’<br />
scenario is presented, rather than a more realistic<br />
scenario.”); martin J. Adelman, <strong>Patent</strong> Perspectives<br />
§ 5.2[2] (2d Ed.1998) ( “[w]here an infringer<br />
demonstrates that it could have chosen to market a<br />
noninfringing alternative and that it would have done<br />
so had it known that it was infringing ... the sales that<br />
it made of the infringing products were not sales that<br />
the patentee would otherwise have made....”); john<br />
W. Schlicher, <strong>Patent</strong> Law: Legal and Economic<br />
Principles § 9.05[2][l] (1997) (“unless the law<br />
wishes to systematically overreward patented<br />
inventions, it is necessary to inquire about the nature<br />
and value of the product that the infringer could have<br />
made had he not infringed.”).<br />
Accordingly, this court in Slimfold Manufacturing<br />
Co. v. Kinkead Industries, Inc. held that an available<br />
technology not on the market during the infringement<br />
can constitute a noninfringing alternative. 932 F.2d<br />
1453, 18 USPQ2d 1842 (Fed.Cir.1991). In Slimfold,<br />
the patent owner (Slimfold) claimed lost profits on its<br />
bi-fold doors with a patented pivot and guide rod<br />
assembly. This court noted, however, that Slimfold<br />
did not show “that the alleged infringer [Kinkead]<br />
would not have made a substantial portion or the<br />
same number of sales had it continued with its old<br />
hardware or with the hardware utilized by any of the<br />
other companies.” Id. at 1458 (emphasis added). On<br />
the basis of this noninfringing substitute, which was<br />
not on the market at the time of infringement, this<br />
court affirmed the district court's denial of lost<br />
profits. This court determined that the record<br />
supported the district court's finding that this<br />
noninfringing “old hardware” was available to<br />
Kinkead at the time of the infringement.<br />
Specifically, Kinkead and others had used the<br />
substitute technology on other doors before the<br />
period of infringement. See id. Furthermore,<br />
consumers considered Kinkead's noninfringing<br />
alternative an acceptable substitute for the infringing<br />
doors. See id. Therefore, this court upheld the<br />
district court's award of a “small” royalty, rather than<br />
lost profits. Id. at 1458-59.<br />
Several opinions of this court have noted that<br />
“market sales” provide significant evidence of<br />
availability as a substitute. See, e.g., Minco Inc. v.<br />
Combustion Eng'g, Inc., 95 F.3d 1109, 1119, 40<br />
USPQ2d 1001, 1008 (Fed.Cir.1996); *1352Zygo<br />
Corp. v. Wyko Corp., 79 F.3d 1563, 38 USPQ2d<br />
1281 (Fed.Cir.1996); Kaufman Co. v. Lantech, Inc.,<br />
926 F.2d 1136, 17 USPQ2d 1828 (Fed.Cir.1991);<br />
State Indus., 883 F.2d at 1579; Central Soya Co. v.<br />
Geo. A. Hormel & Co., 723 F.2d 1573, 220 USPQ<br />
490 (Fed.Cir.1983). These cases illustrate that<br />
market sales of an acceptable noninfringing substitute<br />
often suffice alone to defeat a case for lost profits.<br />
Focusing exclusively on this market sales principle,<br />
these opinions did not address availability without<br />
market sales. See, e.g., Kaufman, 926 F.2d at 1142<br />
(an alleged alternative product “was not an<br />
acceptable purchase option during the infringement”)<br />
(emphasis added); Central Soya, 723 F.2d at 1579<br />
(“[t]he dispositive determination at trial ... was<br />
whether or not there was an acceptable substitute on<br />
the market.”); Panduit, 575 F.2d at 1162 (“[t]hat<br />
Stahlin's customers, no longer able to buy the<br />
patented product from Stahlin, were willing to buy<br />
something else from Stahlin, does not establish that<br />
there was on the market during the period of<br />
infringement a product which customers in general<br />
were ... ‘willing to buy in place of the infringing<br />
product.’ ”) (emphasis added). Because these<br />
previous cases addressed only market sales, they did<br />
not consider that available substitutes, though not<br />
literally on sale, can affect market behavior as in the<br />
present case.<br />
Nor does Zygo support Grain Processing's position<br />
equating availability with offers for sale. In Zygo,<br />
this court reviewed for clear error the district court's<br />
factual finding that the infringer's “SIRIS”<br />
interferometer was not an acceptable noninfringing<br />
substitute. Zygo, 79 F.3d at 1571. Like the accused<br />
infringer in the Slimfold case, the infringer in Zygo<br />
had “stopped marketing” the SIRIS when it began<br />
marketing the infringing interferometer. See id. In<br />
the words of this court, “[t]he central damages issue<br />
on appeal is whether ... Wyko's SIRIS interferometer<br />
was ... an acceptable noninfringing alternative....” Id.<br />
(emphasis added). On that “central” point, this court<br />
noted “the insufficiency of the [district] court's<br />
findings” that the SIRIS interferometer was not<br />
acceptable, and observed that “the record evidence,<br />
while sparse, suggests a contrary conclusion.” Id.<br />
Therefore, this court remanded for additional factual<br />
findings. Id. In addition to holding that the district<br />
court's decision lacked sufficient factual support, this<br />
court also opined: “[i]t is axiomatic ... that if a<br />
device is not available for purchase, a defendant<br />
cannot argue that the device is an acceptable<br />
noninfringing alternative....” Id. This statement<br />
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beyond the premises necessary to resolve the legal<br />
issues in Zygo did not alter the standards for<br />
availability applied in the earlier Slimfold case and in<br />
subsequent cases. See Gargoyles, Inc. v. United<br />
States, 113 F.3d 1572, 42 USPQ2d 1760<br />
(Fed.Cir.1997) (denying lost profits because a<br />
substitute that was not on sale was “available” to the<br />
relevant consumer, the Army); Minco, 95 F.3d at<br />
1119 (considering allegedly available substitutes that<br />
were not on sale during the infringement);<br />
Minnesota Mining & Mfg. Co., 976 F.2d at 1579<br />
(determining that the infringer had an alternative<br />
available from a supplier in Europe, but that it was<br />
not acceptable). Rather, at most it reflects a finding<br />
on the record in Zygo that availability of the<br />
substitute in that case depended on direct market<br />
sales.<br />
Grain Processing asserts that permitting the infringer<br />
to show substitute availability without market sales,<br />
thereby avoiding lost profits, undercompensates for<br />
infringement. Section 284, however, sets the floor<br />
for “damages adequate to compensate for the<br />
infringement” as “a reasonable royalty.” 35 U.S.C. §<br />
284. Thus, the statute specifically envisions a<br />
reasonable royalty as a form of adequate<br />
compensation. While “damages adequate to<br />
compensate” means “full compensation,” General<br />
Motors, 461 U.S. at 654, 103 S.Ct. 2058, “full *1353<br />
compensation” does not entitle Grain Processing to<br />
lost profits in the absence of “but for” causation.<br />
Rite-Hite, 56 F.3d at 1545. Moreover, although<br />
Grain Processing stresses that American Maize<br />
should not reap the benefit of its “choice” to infringe<br />
rather than use the more expensive Process IV, Grain<br />
Processing does not allege willful infringement and<br />
the record shows none. See, e.g., Grain Processing<br />
VI, 893 F.Supp. at 1391 (noting that American Maize<br />
eliminated the infringing product “practically<br />
instantaneous[ly”] upon becoming aware of<br />
infringement). To the extent that Grain Processing<br />
feels undercompensated, FN4 it must point out a<br />
reversible error in the district court's fact-finding,<br />
reasoning, or legal basis for denying lost profits or in<br />
its reasonable royalty determination. FN5<br />
FN4. The district court's 3% royalty rate<br />
yielded damages of approximately $2.4<br />
million; Grain Processing sought lost profits<br />
of $35 million, which with applicable<br />
interest presently implies an award<br />
approaching $100 million.<br />
FN5. The district court appears to have<br />
conducted a thorough royalty analysis,<br />
challenged by neither party on appeal. The<br />
court candidly stated that the 3% rate is its<br />
“best estimate,” an honest observation that<br />
would apply to most reasonable royalty<br />
analyses, given the difficulty of determining<br />
a hypothetical agreement between parties<br />
which did not actually agree on anything at<br />
all. The determination is perhaps more<br />
difficult when the patentee is not selling the<br />
patented product, as is the case here. See In<br />
re Mahurkar, 831 F.Supp. 1354, 1383, 28<br />
USPQ2d 1801, 1824 (N.D.Ill.1993).<br />
Nevertheless, the district court supported its<br />
royalty amount with sound economic data<br />
and with actual, observed behavior in the<br />
market. Though both parties maintained at<br />
trial that they would not have agreed to a<br />
license including 3% royalties at the time of<br />
infringement, the appropriateness of the rate<br />
is perhaps reflected in the decision of the<br />
parties to forego an appeal on this issue.<br />
III.<br />
[11] This court next turns to the district court's<br />
findings that Process IV was in fact “available” to<br />
American Maize for producing Lo-Dex 10 no later<br />
than October, 1979, and that consumers would<br />
consider Process IV Lo-Dex 10 an acceptable<br />
substitute. This court reviews these factual findings<br />
for clear error. See Gargoyles, 113 F.3d at 1573;<br />
Slimfold, 932 F.2d at 1458.<br />
[12][13][14] The critical time period for determining<br />
availability of an alternative is the period of<br />
infringement for which the patent owner claims<br />
damages, i.e., the “accounting period.” See State<br />
Indus., 883 F.2d at 1579; Panduit, 575 F.2d at 1162.<br />
Switching to a noninfringing substitute after the<br />
accounting period does not alone show availability of<br />
the noninfringing substitute during this critical time.<br />
See Panduit, 575 F.2d at 1152. When an alleged<br />
alternative is not on the market during the accounting<br />
period, a trial court may reasonably infer that it was<br />
not available as a noninfringing substitute at that<br />
time. Cf. Rite-Hite, 56 F.3d at 1545. The accused<br />
infringer then has the burden to overcome this<br />
inference by showing that the substitute was available<br />
during the accounting period. Cf. id. Mere<br />
speculation or conclusory assertions will not suffice<br />
to overcome the inference. After all, the infringer<br />
chose to produce the infringing, rather than<br />
noninfringing, product. Thus, the trial court must<br />
proceed with caution in assessing proof of the<br />
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availability of substitutes not actually sold during the<br />
period of infringement. Acceptable substitutes that<br />
the infringer proves were available during the<br />
accounting period can preclude or limit lost profits;<br />
substitutes only theoretically possible will not. See<br />
Minco, 95 F.3d at 1119.<br />
In this case, the district court did not base its finding<br />
that Process IV was available no later than October<br />
1979 on speculation or possibilities, but rather on<br />
several specific, concrete factual findings, none of<br />
which Grain Processing challenges on appeal.*1354<br />
The district court found that American Maize could<br />
readily obtain all of the materials needed for Process<br />
IV, including the glucoamylase enzyme, before 1979.<br />
The court also found that the effects of the enzymes<br />
in starch hydrolysis were well known in the field at<br />
that time. Grain Processing VI, 893 F.Supp. at 1391;<br />
Grain Processing VIII, 979 F.Supp. at 1235.<br />
Furthermore, the court found that American Maize<br />
had all of the necessary equipment, know-how, and<br />
experience to use Process IV to make Lo-Dex 10,<br />
whenever it chose to do so during the time it was<br />
instead using Processes I, II or III. Grain Processing<br />
VIII, 979 F.Supp. at 1235. American Maize “did not<br />
have to ‘invent around’ the patent,” the district court<br />
observed; “all it had to do was use a glucoamaylase<br />
enzyme in its production process.” Id.<br />
The trial court also explained that “the sole reason<br />
[American Maize did not use Process IV prior to<br />
1991] was economic: glucoamylase is more<br />
expensive than the alpha amylase enzyme American<br />
Maize had been using,” and American Maize<br />
reasonably believed it had a noninfringing product.<br />
Grain Processing VIII, 979 F.Supp. at 1235. While<br />
the high cost of a necessary material can conceivably<br />
render a substitute “unavailable,” the facts of this<br />
case show that glucoamylase was not prohibitively<br />
expensive to American Maize. The district court<br />
found that American Maize's “substantial profit<br />
margins” on Lo-Dex 10 were sufficient for it to<br />
absorb the 2.3% cost increase using glucoamylase.<br />
Id. at 1239.<br />
Moreover, the district court's unchallenged finding<br />
that there is no “economically significant demand for<br />
a product having all of the [claimed] attributes”<br />
supports its conclusion of availability. Grain<br />
Processing VIII, 979 F.Supp. at 1237. Consumers<br />
demand “low-dextrose maltodextrins of which the<br />
patented product is just one exemplar.” Id. (emphasis<br />
added). Because consumers find the “waxy” and<br />
“descriptive ratio” elements of claim 12 “irrelevant,”<br />
the prospect of an available, acceptable noninfringing<br />
substitute expands because a competitor may be able<br />
to drop or replace the “irrelevant” elements from its<br />
product. Compare Rite-Hite, 56 F.3d 1538<br />
(upholding lost profits award for patentee's vehicle<br />
restraint - not covered by the patent in suit - because<br />
the patentee could exclude alleged substitute products<br />
with another patent) with King Instrument, 72 F.3d<br />
855 (upholding only a partial award of lost profits for<br />
patentee's tape rewinder - not covered by any patent -<br />
due to the availability of alternatives acceptable to<br />
some consumers); see also Panduit, 575 F.2d at<br />
1156, 1160-61 (holding that consumer demand for<br />
the “unique advantages” of the patented invention, as<br />
opposed to substitutes lacking some elements, and<br />
the infringer's “inability to avoid infringement even if<br />
it had wanted to,” established the lack of available,<br />
acceptable noninfringing alternatives). Grain<br />
Processing cannot exclude Process IV Lo-Dex 10<br />
because it does not have a patent on 10 D.E.<br />
maltodextrins, “the economically significant product”<br />
as the district court stated, Grain Processing VIII,<br />
979 F.Supp. at 1238, but rather on a particular variety<br />
of 10 D.E. maltodextrins.<br />
This court therefore does not detect, and the parties<br />
do not suggest, clear error in the district court's<br />
factual findings on the availability of Process IV.<br />
These factual findings support the district court's<br />
conclusion that Process IV was available to American<br />
Maize for making noninfringing Lo-Dex 10, no later<br />
than October 1991. American Maize had the<br />
necessary chemical materials, the equipment, the<br />
know-how and experience, and the economic<br />
incentive to produce Lo-Dex 10 by Process IV<br />
throughout the entire accounting period.<br />
Accordingly, this court holds that the district court<br />
did not clearly err in finding that Process IV Lo-Dex<br />
10 was an available*1355 alternative throughout the<br />
accounting period.<br />
[15] Whether and to what extent American Maize's<br />
alleged alternative prevents Grain Processing from<br />
showing lost sales of Maltrin 100 depends not only<br />
on whether and when the alternative was available,<br />
but also on whether and to what extent it was<br />
acceptable as a substitute in the relevant market. See<br />
King Instruments, 65 F.3d at 952. Consumer<br />
demand defines the relevant market and relative<br />
substitutability among products therein. See BIC, 1<br />
F.3d at 1218; cf. United States v. E.I. du Pont de<br />
Nemours & Co., 351 U.S. 377, 392-95, 76 S.Ct. 994,<br />
1005-07, 100 L.Ed. 1264 (1956). Important factors<br />
shaping demand may include consumers' intended<br />
use for the patentee's product, similarity of physical<br />
and functional attributes of the patentee's product to<br />
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alleged competing products, and price. See Fonar<br />
Corp. v. General Elec. Co., 107 F.3d 1543, 1553, 41<br />
USPQ2d 1801, 1808-09 (Fed.Cir.1997); BIC, 1 F.3d<br />
at 1218. Where the alleged substitute differs from<br />
the patentee's product in one or more of these<br />
respects, the patentee often must adduce economic<br />
data supporting its theory of the relevant market in<br />
order to show “but for” causation. See BIC, 1 F.3d<br />
at 1218.<br />
In this case, the parties vigorously dispute the precise<br />
scope of the relevant market. See Grain Processing<br />
VIII, 979 F.Supp. at 1235 (stating that, contrary to<br />
Grain Processing's argument that 10 D.E.<br />
maltodextrins comprise their own market, 10 D.E.<br />
maltodextrins compete in a market with other food<br />
additives). The district court's uncontroverted<br />
factual findings, however, render this dispute moot.<br />
In the eyes of consumers, according to the district<br />
court, Process IV Lo-Dex 10 was the same product,<br />
for the same price, from the same supplier as Lo-Dex<br />
10 made by other processes. See Grain Processing<br />
VI, 893 F.Supp. at 1391-92. Process IV Lo-Dex 10<br />
was a perfect substitute for previous versions, and<br />
therefore Grain Processing's efforts to show a distinct<br />
10 D.E. maltodextrin market do not assist its lost<br />
profits case.<br />
Market evidence in the record supports the district<br />
court's uncontroverted findings and conclusions on<br />
acceptability. First, for example, American Maize's<br />
high profit margin on Lo-Dex 10 and the consumers'<br />
sensitivity to price changes support the conclusion<br />
that American Maize would not have raised the price<br />
of Process IV Lo-Dex 10 to offset the cost of<br />
glucoamylase. Further, American Maize's sales<br />
records showed no significant changes when it<br />
introduced Process IV Lo-Dex 10 at the same price as<br />
previous versions, indicating that consumers<br />
considered its important properties to be effectively<br />
identical to previous versions. Witness testimony<br />
supported this market data. Thus, this court discerns<br />
no clear error in the district court's finding that<br />
Process IV Lo-Dex 10 was an acceptable substitute in<br />
the marketplace.<br />
It follows from the district court's findings on<br />
availability and acceptability that Grain Processing's<br />
theory of “but for” causation fails. As the district<br />
court correctly noted, “[a]n [American Maize] using<br />
the dual-enzyme method between 1979 and 1991 ...<br />
would have sold the same product, for the same price,<br />
as the actual [American Maize] did ...” and<br />
consequently would have retained its Lo-Dex 10<br />
sales. Grain Processing VI, 893 F.Supp. at 1392.<br />
Grain Processing did not present any other evidence<br />
of lost profits, such as individual lost transactions as<br />
in Rite-Hite Corp. v. Kelley Co., 774 F.Supp. 1514,<br />
1525-26, 1528-29, 21 USPQ2d 1801 (E.D.Wis.1991),<br />
aff'd in part and vacated on other grounds, 56 F.3d<br />
1538. Thus, the district court properly determined<br />
that, absent infringing Lo-Dex 10, Grain Processing<br />
would have sold no more and no less Maltrin 100<br />
than it actually did.<br />
*1356 IV.<br />
In summary, this court requires reliable economic<br />
proof of the market that establishes an accurate<br />
context to project the likely results “but for” the<br />
infringement. See, e.g., Oiness, 88 F.3d 1025; BIC,<br />
1 F.3d 1214; Water Technologies, 850 F.2d 660.<br />
The availability of substitutes invariably will<br />
influence the market forces defining this “but for”<br />
marketplace, as it did in this case. Moreover, a<br />
substitute need not be openly on sale to exert this<br />
influence. Thus, with proper economic proof of<br />
availability, as American Maize provided the district<br />
court in this case, an acceptable substitute not on the<br />
market during the infringement may nonetheless<br />
become part of the lost profits calculus and therefore<br />
limit or preclude those damages.<br />
This court concludes that the district court did not err<br />
in considering an alternative not on the market during<br />
the period of infringement, nor did it clearly err in<br />
determining that the alternative was available,<br />
acceptable, and precluded any lost profits.<br />
Accordingly, the district court did not abuse its<br />
discretion in denying lost profits. This court affirms<br />
the district court's decision.<br />
COSTS<br />
Each party shall bear its own costs.<br />
AFFIRMED.<br />
C.A.Fed. (Ind.),1999.<br />
Grain Processing Corp. v. American Maize-Products<br />
Co.<br />
185 F.3d 1341, 51 U.S.P.Q.2d 1556<br />
Briefs and Other Related Documents (Back to top)<br />
• 1998 WL 34082314 (Appellate Brief) Corrected<br />
Reply Brief for Plaintiff-Appellant Grain Processing<br />
Corporation (Apr. 01, 1998)<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
185 F.3d 1341 Page 14<br />
185 F.3d 1341, 51 U.S.P.Q.2d 1556<br />
(Cite as: 185 F.3d 1341)<br />
• 1998 WL 34082552 (Appellate Brief) Principal<br />
Brief for Appellee American Maize-Products<br />
Company (Mar. 11, 1998)<br />
• 1998 WL 34084151 (Appellate Brief) Brief for<br />
Plaintiff-Appellant Grain Processing Corporation<br />
(Jan. 20, 1998) Original Image of this Document with<br />
Appendix (PDF)<br />
• 98-1081 (Docket) (Nov. 20, 1997)<br />
END OF DOCUMENT<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
471 F.3d 1293 Page 1<br />
471 F.3d 1293, 81 U.S.P.Q.2d 1238<br />
(Cite as: 471 F.3d 1293)<br />
Briefs and Other Related Documents<br />
United States Court of Appeals,<br />
Federal Circuit.<br />
DSU MEDICAL CORPORATION and<br />
MEDISYSTEMS CORPORATION, Plaintiffs-<br />
Appellants,<br />
v.<br />
JMS CO., LTD. and JMS NORTH AMERICA<br />
CORPORATION, Defendants-Cross Appellants,<br />
and<br />
ITL Corporation PTY, Ltd., Defendant-Cross<br />
Appellant.<br />
ITL Corporation PTY, Ltd., Plaintiff-Cross<br />
Appellant,<br />
v.<br />
DSU Medical Corporation, Defendant-Appellant.<br />
Nos. 04-1620, 05-1048, 04-1052.<br />
Dec. 13, 2006.<br />
Background: Owner of patents for medical needle<br />
guards sued competitors for infringement. The United<br />
States District Court for the Northern District of<br />
California, D. Lowell Jensen, Senior District Judge,<br />
entered judgment on jury verdict in favor of owner<br />
against two competitors. Competitors appealed, and<br />
patent owner cross-appealed.<br />
Holdings: The Court of Appeals, Rader, Circuit<br />
Judge, held that:<br />
(1) term "guard slidably enclosing a sliding<br />
assembly comprising a needle and a winged needle<br />
hub" required that the guard substantially contain the<br />
needle-assembly at all times;<br />
(2) word "slot" did not incorporate any thickness<br />
limitation;<br />
(3) closed-shell configuration of alleged device<br />
infringed patent;<br />
(4) the en banc Court of Appeals held that to<br />
establish inducement, owner was required to offer<br />
evidence of culpable conduct, directed to<br />
encouraging another's infringement;<br />
(5) the original Court of Appeals panel further held<br />
that jury was well within the law to conclude that<br />
competitor that manufactured alleged device did not<br />
induce importer-competitor to infringe by<br />
purposefully and culpably encouraging importer's<br />
infringement;<br />
(6) exclusion of expert testimony on lost profits<br />
damages was not an abuse of trial court's discretion;<br />
(7) substantial evidence supported jury award for<br />
lost profits due to lost sales to the infringing guard;<br />
(8) substantial evidence supported jury verdict that<br />
certain claims of patent were invalid as obvious; and<br />
(9) trial court's response to a jury question was not<br />
abuse of discretion.<br />
Affirmed.<br />
Michel, Chief Judge, and Mayer, Circuit Judge, filed<br />
a concurring opinion with regard to en banc review.<br />
West Headnotes<br />
[1] <strong>Patent</strong>s 324.5<br />
291k324.5 Most Cited Cases<br />
Court of Appeals reviews patent claim construction<br />
without deference.<br />
[2] <strong>Patent</strong>s 165(2)<br />
291k165(2) Most Cited Cases<br />
The claims of a patent define the invention to which<br />
the patentee is entitled the right to exclude.<br />
[3] <strong>Patent</strong>s 101(2)<br />
291k101(2) Most Cited Cases<br />
Term "guard slidably enclosing a sliding assembly<br />
comprising a needle and a winged needle hub" in<br />
patent for medical needle guards required that the<br />
guard substantially contain the needle-assembly at all<br />
times.<br />
[4] <strong>Patent</strong>s 101(2)<br />
291k101(2) Most Cited Cases<br />
Word "slot" in patent for medical needle guards<br />
meant an opening in the guard capable of receiving a<br />
wing that projects through the opening and having<br />
both an upper edge and a lower edge that are defined<br />
by the sidewall of the guard and did not incorporate<br />
any thickness limitation, as long as it was capable of<br />
receiving a wing.<br />
[5] <strong>Patent</strong>s 235(2)<br />
291k235(2) Most Cited Cases<br />
Closed-shell configuration of alleged device did have<br />
a slot and, thus, infringed patent for medical needle<br />
guards; as applied to alleged device, its slot was an<br />
opening in a needle guard capable of receiving a<br />
wing that projects through the opening, the slot had<br />
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471 F.3d 1293 Page 2<br />
471 F.3d 1293, 81 U.S.P.Q.2d 1238<br />
(Cite as: 471 F.3d 1293)<br />
both an upper edge and a lower edge defined by the<br />
sidewall of the guard, and was also sized relative to<br />
the wing and could accommodate the needle wing as<br />
it moved through the length of the slot.<br />
[6] Federal Courts 825.1<br />
170Bk825.1 Most Cited Cases<br />
Court of Appeals reviews a denial of a motion for a<br />
new trial after a jury trial for an abuse of discretion.<br />
[7] <strong>Patent</strong>s 323.3<br />
291k323.3 Most Cited Cases<br />
Mere inferences that units of alleged device sold in<br />
the United States were put into the infringing closedshell<br />
configuration did not warrant new trial on<br />
competitor's contributory infringement of patent for<br />
medical needle guards. 35 U.S.C.A. § 271(c).<br />
[8] <strong>Patent</strong>s 312(1.1)<br />
291k312(1.1) Most Cited Cases<br />
A patentee always has the burden to show direct<br />
infringement for each instance of indirect<br />
infringement. 35 U.S.C.A. § 271(c).<br />
[9] <strong>Patent</strong>s 259(1)<br />
291k259(1) Most Cited Cases<br />
To prevail on contributory infringement, owner of<br />
patent for medical needle guards was required to<br />
show that competitor made and sold the alleged<br />
device, that the device had no substantial noninfringing<br />
uses in its closed-shell configuration, that<br />
competitor made sales within the United States that<br />
contributed to another's direct infringement, and that<br />
competitor's associate engaged in an act of direct<br />
infringement on those sales that competitor made in<br />
the United States. 35 U.S.C.A. § 271(c).<br />
[10] <strong>Patent</strong>s 312(1.1)<br />
291k312(1.1) Most Cited Cases<br />
The plaintiff has the burden of showing that the<br />
alleged infringer's actions induced infringing acts and<br />
that he knew or should have known his actions would<br />
induce actual infringements. 35 U.S.C.A. § 271(b).<br />
[11] <strong>Patent</strong>s 259(1)<br />
291k259(1) Most Cited Cases<br />
The requirement that the alleged infringer knew or<br />
should have known his actions would induce actual<br />
infringement necessarily includes the requirement<br />
that he or she knew of the patent. 35 U.S.C.A. §<br />
271(b).<br />
[12] <strong>Patent</strong>s 324.5<br />
291k324.5 Most Cited Cases<br />
Court of Appeals reviews the legal sufficiency of jury<br />
instructions on an issue of patent law without<br />
deference to the district court.<br />
[13] Federal Courts 763.1<br />
170Bk763.1 Most Cited Cases<br />
[13] Federal Courts 908.1<br />
170Bk908.1 Most Cited Cases<br />
Court of Appeals reviews jury instructions in their<br />
entirety and only orders a new trial when errors in the<br />
instructions as a whole clearly mislead the jury.<br />
[14] <strong>Patent</strong>s 259(1)<br />
291k259(1) Most Cited Cases<br />
To establish liability for inducing infringement of a<br />
patent, a patent holder must prove that once the<br />
defendants knew of the patent, they actively and<br />
knowingly aided and abetted another's direct<br />
infringement; however, knowledge of the acts<br />
alleged to constitute infringement is not enough. 35<br />
U.S.C.A. § 271(b).<br />
[15] <strong>Patent</strong>s 259(1)<br />
291k259(1) Most Cited Cases<br />
The mere knowledge of possible infringement of a<br />
patent by others does not amount to inducement;<br />
specific intent and action to induce infringement must<br />
be proven. 35 U.S.C.A. § 271(b).<br />
[16] <strong>Patent</strong>s 312(8)<br />
291k312(8) Most Cited Cases<br />
To establish inducement, owner of patents for<br />
medical needle guards was required to offer evidence<br />
of culpable conduct, directed to encouraging<br />
another's infringement, not merely that the inducer<br />
had knowledge of the direct infringer's activities. 35<br />
U.S.C.A. § 271(b).<br />
[17] <strong>Patent</strong>s 259(1)<br />
291k259(1) Most Cited Cases<br />
If an entity offers a product with the object of<br />
promoting its use to infringe a patent, as shown by<br />
clear expression or other affirmative steps taken to<br />
foster infringement, it is then liable for the resulting<br />
acts of infringement by third parties; the inducement<br />
rule premises liability on purposeful, culpable<br />
expression and conduct. 35 U.S.C.A. § 271(b).<br />
[18] <strong>Patent</strong>s 312(8)<br />
291k312(8) Most Cited Cases<br />
Inducement requires that the alleged infringer<br />
knowingly induced infringement of a patent and<br />
possessed specific intent to encourage another's<br />
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471 F.3d 1293 Page 3<br />
471 F.3d 1293, 81 U.S.P.Q.2d 1238<br />
(Cite as: 471 F.3d 1293)<br />
infringement; accordingly, inducement requires<br />
evidence of culpable conduct, directed to<br />
encouraging another's infringement, not merely that<br />
the inducer had knowledge of the direct infringer's<br />
activities. 35 U.S.C.A. § 271(b).<br />
[19] Federal Courts 759.1<br />
170Bk759.1 Most Cited Cases<br />
[19] Federal Courts 825.1<br />
170Bk825.1 Most Cited Cases<br />
Court of Appeals reviews a denial of a motion for a<br />
new trial after a jury trial for abuse of discretion,<br />
affirming on any basis that supports the verdict.<br />
[20] <strong>Patent</strong>s 312(8)<br />
291k312(8) Most Cited Cases<br />
In light of evidence that manufacturer of alleged<br />
device contacted an Australian attorney, who<br />
concluded that device would not infringe patents for<br />
medical needle guards, that manufacturer and its<br />
importer obtained letters from American patent<br />
counsel advising that device did not infringe, and<br />
testimony of one of manufacturer's owners who had<br />
participated in design of device that manufacturer had<br />
no intent to infringe patent, jury was well within the<br />
law to conclude that manufacturer did not induce<br />
importer to infringe by purposefully and culpably<br />
encouraging importer's infringement. 35 U.S.C.A. §<br />
271(b).<br />
[21] Federal Courts 827<br />
170Bk827 Most Cited Cases<br />
Court of Appeals reviews a district court's denial of a<br />
motion for a new trial on the amount of damages for<br />
an abuse of discretion.<br />
[22] <strong>Patent</strong>s 324.55(1)<br />
291k324.55(1) Most Cited Cases<br />
Court of Appeals had no basis to speculate that the<br />
jury did not award price erosion damages as part of<br />
its lost profits or reasonable royalty analysis, in<br />
patent infringement action, where verdict form did<br />
not segregate the damages award into categories<br />
beyond lost profits and reasonable royalties, and jury<br />
had before it evidence of price erosion.<br />
[23] <strong>Patent</strong>s 215<br />
291k215 Most Cited Cases<br />
[23] <strong>Patent</strong>s 312(10)<br />
291k312(10) Most Cited Cases<br />
Substantial evidence supported jury decision to reject<br />
any contract between owner of patents for medical<br />
needle guards and licensee and its determination of<br />
date from which licensee was entitled to collect<br />
infringement damages.<br />
[24] Evidence 555.2<br />
157k555.2 Most Cited Cases<br />
Purported damage expert's failure to consider the<br />
effect of the availability of noninfringing device<br />
supported trial court's exclusion of his testimony<br />
about hypothetical contract theory in action alleging<br />
infringement of patents for medical needle guards.<br />
[25] <strong>Patent</strong>s 324.5<br />
291k324.5 Most Cited Cases<br />
Although reviewing a district court's Daubert ruling<br />
to exclude testimony for an abuse of discretion, Court<br />
of Appeals reviews eligibility for lost profits damages<br />
without deference.<br />
[26] <strong>Patent</strong>s 318(4.1)<br />
291k318(4.1) Most Cited Cases<br />
For purpose of claim of lost profits, to prevent the<br />
hypothetical from lapsing into pure speculation,<br />
Court of Appeals requires sound economic proof of<br />
the nature of the market and likely outcomes with<br />
patent infringement out of the picture; the concept of<br />
sound economic proof requires some grounding in<br />
sound economic and factual predicates.<br />
[27] Evidence 555.9<br />
157k555.9 Most Cited Cases<br />
Exclusion of expert testimony on lost profits damages<br />
was not an abuse of trial court's discretion in patent<br />
infringement action; trial court perceived that expert<br />
did not ground his "accelerated market entry" theory<br />
in sound economic principle, that expert relied too<br />
heavily on hypothesized contracts in hypothesized<br />
markets that lacked sound economic grounding, and<br />
that expert's hypothetical reconstruction of a "but for"<br />
marketplace lacked footing in economic principle.<br />
[28] Federal Courts 765<br />
170Bk765 Most Cited Cases<br />
Court of Appeals reviews a trial court's judgment as a<br />
matter of law (JMOL) rulings after a jury verdict by<br />
reapplying the district court's own standard.<br />
[29] Federal Courts 871<br />
170Bk871 Most Cited Cases<br />
Court of Appeals sustains a jury's award of damages<br />
unless the amount is grossly excessive or monstrous,<br />
clearly not supported by the evidence, or based only<br />
on speculation or guesswork.<br />
© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.
471 F.3d 1293 Page 4<br />
471 F.3d 1293, 81 U.S.P.Q.2d 1238<br />
(Cite as: 471 F.3d 1293)<br />
[30] <strong>Patent</strong>s 319(1)<br />
291k319(1) Most Cited Cases<br />
Court of Appeals will resolve any doubts about the<br />
amount of damages against the infringer of a patent.<br />
[31] <strong>Patent</strong>s 312(10)<br />
291k312(10) Most Cited Cases<br />
Substantial evidence supported the jury award to<br />
owner of patents for medical needle guards for lost<br />
profits due to lost sales to the infringing guard; even<br />
though competitor attempted to suggest that the<br />
market included numerous other noninfringing<br />
alternatives to its device, patent owner provided<br />
evidence that no other non-infringing alternatives<br />
were acceptable during the necessary time periods.<br />
[32] <strong>Patent</strong>s 36(3)<br />
291k36(3) Most Cited Cases<br />
[32] <strong>Patent</strong>s 36.1(1)<br />
291k36.1(1) Most Cited Cases<br />
Substantial evidence of prior art, together with<br />
evidence of adequate motivation to combine these<br />
references and evidence on the objective indicia of<br />
non-obviousness, supported jury verdict that certain<br />
claims of patent for medical needle guards were<br />
invalid as obvious.<br />
[33] <strong>Patent</strong>s 314(1)<br />
291k314(1) Most Cited Cases<br />
Trial court's response to a jury question, during<br />
deliberations, requesting a clarification on the<br />
hindsight jury instruction, was not abuse of its wide<br />
discretion, in patent infringement action, where trial<br />
court referred jury back to the jury instructions on<br />
invalidity, which both parties had earlier accepted.<br />
<strong>Patent</strong>s 328(2)<br />
291k328(2) Most Cited Cases<br />
3,572,334, 4,170,933, 4,840,619, 4,935,012. Cited as<br />
Prior Art.<br />
<strong>Patent</strong>s 328(2)<br />
291k328(2) Most Cited Cases<br />
5,112,311. Invalid in Part.<br />
<strong>Patent</strong>s 328(2)<br />
291k328(2) Most Cited Cases<br />
5,266,072. Cited.<br />
*1297 William J. O'Brien, Alschuler Grossman Stein<br />
& Kahan LLP, of Santa Monica, California, argued<br />
for plaintiffs-appellants. Of counsel on the brief was<br />
Alan H. Blankenheimer, Heller Ehrman White &<br />
McAuliffe LLP, of San Diego, California.<br />
Richard H. Zaitlen, Pillsbury Winthrop Shaw<br />
Pittman LLP, of Los Angeles, California, argued for<br />
defendants-cross appellants JMS Co., Ltd., et al.<br />
With him on the brief were Julian D. Forman; and<br />
Kevin T. Kramer, of Washington, DC. Of counsel<br />
were Ross R. Barton, of McLean, Virginia; and Blair<br />
M. Jacobs, Sutherland, Asbill & Brennan LLP, of<br />
Washington, DC.<br />
Marc N. Bernstein, The Bernstein Law Group, of<br />
San Francisco, California, argued for defendant-cross<br />
appellant, ITL Corporation PTY, Ltd. With him on<br />
the brief were Ronald P. Flynn and Sarah Botz.<br />
Before RADER, SCHALL, and LINN, Circuit<br />
Judges.<br />
Opinion for the court filed by Circuit Judge RADER.<br />
Concurring opinion filed by Chief Judge MICHEL,<br />
and Circuit Judge MAYER on en banc Section III B.<br />
RADER, Circuit Judge.<br />
DSU Medical Corporation (DSU) and Medisystems<br />
Corporation (MDS) (collectively DSU) sued JMS<br />
Company, Limited (JMS) and JMS North America<br />
(collectively JMS) and ITL Corporation Pty, Limited<br />
(ITL) for patent infringement, inducement to<br />
infringe, and contributory infringement of United<br />
States <strong>Patent</strong> Nos. 5,112,311 ('311) and 5,266,072<br />
('072). After a six-week jury trial produced a<br />
unanimous verdict, the United States District Court<br />
for the Northern District of California entered a final<br />
judgment finding claims 46-47, and 50-52 of the '311<br />
patent invalid as obvious. The trial court also entered<br />
a final judgment, pursuant to the unanimous verdict,<br />
of infringement against JMS and JMS North<br />
American on claims 49, 53, and 54 of the '311 patent,<br />
and of non-infringement for ITL. DSU Med. Corp. v.<br />
JMS Co., JMS N. Am. Corp., & ITL Corp. PTY, Nos.<br />
C-00-1826-DLJ, C-99-2690-DLJ, slip op. at 3-4<br />
(N.D.Cal. May 7, 2004) (Judgment ). The jury<br />
awarded total damages of $5,055,211 for<br />
infringement against JMS and JMS North America,<br />
and the trial court entered a final judgment holding<br />
both jointly and severally liable for the award.<br />
Finding no reversible error, this court affirms.<br />
I.<br />
The '311 and '072 patents claim a guarded, wingedneedle<br />
assembly. The invention reduces the risk of<br />
accidental needle-stick injuries. Needle puncture<br />
wounds can transmit blood-borne diseases such as<br />
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471 F.3d 1293 Page 5<br />
471 F.3d 1293, 81 U.S.P.Q.2d 1238<br />
(Cite as: 471 F.3d 1293)<br />
Hepatitis B and AIDS. The '311 and '072 patented<br />
inventions effectively guard standard winged-needlesets<br />
to prevent needle-stick injuries.<br />
The '311 patent claims a "slotted, locking guard for<br />
shielding a needle, and a winged needle assembly<br />
including a needle, a winged needle hub, and a<br />
slotted, locking guard." '311, col.1, l. 8-11. This<br />
invention includes both "[a] slotted guard for locking<br />
a needle in a shielded position as the needle is<br />
removed from the patient", and "a guarded winged<br />
needle assembly ... slidably mounted within the<br />
guard." Id., abstract. Figures 5-6 illustrate one<br />
embodiment of the patented invention:<br />
*1298<br />
Figure 5 is a side view of a needle, winged needle<br />
hub (3), and slotted needle guard (1). '311 patent, col.<br />
3, ll. 4-6. In this depiction, the needle (5) remains<br />
retracted within the needle guard (1). Id. Figure 6<br />
shows the same needle from above. '311 patent, col.<br />
3, ll. 7-10.<br />
Mr. David Utterberg, a co-inventor of the '311<br />
patent, owns DSU and MDS. DSU owns the '311<br />
patent; MDS has an exclusive license to make and<br />
sell the '311 invention for large-bore needles,<br />
including Arterial-Venous Fistula (AVF) sets used<br />
for dialysis and aphaeresis. MDS markets AVF<br />
needles under the brand names "MasterGuard" and<br />
"PointGuard."<br />
The alleged infringing device, made by ITL (an<br />
Australian company) sells under the name Platypus<br />
TM Needle Guard (Platypus). ITL manufactures the<br />
Platypus in Malaysia and Singapore. The Platypus<br />
needle guard is a "stand-alone" product: a small<br />
configured piece of plastic. This plastic guard<br />
structure is not attached to any other device. In other<br />
words, the Platypus does not include a needle, but<br />
only a sheathing structure. Some claims of the '311<br />
patent recite both a slotted guard and a guarded<br />
winged needle assembly. Before use, the Platypus<br />
resembles an open clamshell (open-shell<br />
configuration). During use, the halves of the clam<br />
shell close to form the needle guard (closed-shell<br />
configuration). The following illustration shows the<br />
Platypus in open-and closed-shell configuration:<br />
*1299<br />
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Transcript of Record at 18685, 18629, DSU Medical<br />
Corp. v. JMS Co., JMS North America Corp., & ITL<br />
Corp. PTY, Nos. 04-1620, 05-1048, 05-1052<br />
(Fed.Cir. Sept. 21, 2004) (Transcript ). The Platypus<br />
has an upper and a lower "jaw." When closed, the<br />
upper jaw extends around and overlaps the inner,<br />
lower jaw. During use, a medical technician closes<br />
the Platypus and locks it around tubing connected to<br />
the winged needle assembly. When the technician<br />
removes the needle from a patient, the worker slides<br />
the guard down the tube until the needle assembly's<br />
wings meet and pry the jaws apart. The wings and<br />
their attached needle assembly slide into and through<br />
the guard, forcing the jaws ever wider as the wings<br />
make their way into a notched opening at the guard's<br />
back. Ultimately the wings slide into the rear<br />
opening. At that point, the jaws close around the<br />
used needle.<br />
JMS is a large Japanese medical supply business that<br />
competes with MDS in the United States market.<br />
Beginning in June 1999, JMS purchased Platypus<br />
needle guards from ITL, entering into an agreement<br />
to distribute the Platypus worldwide (the Supply<br />
Agreement). Under the Supply Agreement, JMS<br />
bought open-shell configuration Platypus guard units<br />
from ITL in Singapore and Malaysia. JMS generally<br />
closed the Platypus guards around needle sets before<br />
distributing them to customers.<br />
DSU alleges that the Platypus infringes the '311<br />
patent. DSU also alleges that JMS and ITL<br />
contributed to and induced each other's infringement.<br />
JMS sought to sell ITL's infringing Platypus until it<br />
could produce its substitute non-infringing product,<br />
the WingEater. ITL offered to supply its infringing<br />
Platypus. DSU additionally seeks damages from<br />
JMS because it "stole" MDS's ability to renew a<br />
MasterGuard exclusive license with a former<br />
customer, Fresenius USA Manufacturing, Inc.<br />
(Fresenius).<br />
II.<br />
[1][2] On February 5, 2001, the trial court entered a<br />
claim construction order. DSU Med. Corp. v. JMS<br />
Co., JMS N. Am. Corp., & ITL Corp. PTY, Nos. C-<br />
00-1826-DLJ, C-99-2690-DLJ (N.D.Cal. Feb. 5,<br />
2001) (Claim Construction Order ). This court<br />
reviews claim construction without deference.<br />
Markman v. Westview Instruments, Inc., 52 F.3d 967<br />
(Fed.Cir.1995) (en banc), aff'd, 517 U.S. 370, 116<br />
S.Ct. 1384, 134 L.Ed.2d 577 (1996). "[T]he claims<br />
of a patent define the invention to which the *1300<br />
patentee is entitled the right to exclude." Phillips v.<br />
AWH Corp., 415 F.3d 1303, 1312 (Fed.Cir.2005)<br />
(citing Vitronics Corp. v. Conceptronic, Inc., 90 F.3d<br />
1576, 1582 (Fed.Cir.1996) ("We look to the words of<br />
the claims themselves ... to define the scope of the<br />
patented invention")). This court recently enunciated<br />
predominant claim construction principles in Phillips.<br />
415 F.3d at 1312-24.<br />
[3] The trial court construed "slidably enclosing" in<br />
claim 1 of the ' 311 patent:<br />
1. A guard slidably enclosing a sliding assembly<br />
comprising a needle and a winged needle hub ....<br />
'311 patent, col. 15, ll. 46-47 (emphasis added). The<br />
trial court concluded that this term in claim 1<br />
"requires that the guard substantially contain the<br />
needle-assembly at all times." Claim Construction<br />
Order, slip op. at 9. Because the Platypus is a "standalone<br />
guard" without a needle, the trial court granted<br />
summary judgment of non-infringement to the<br />
defendants on multiple claims. [FN1] Id., slip op. at<br />
15-19.<br />
FN1. The trial court granted a summary<br />
judgment of non-infringement on claims 1,<br />
4-9, 12, 19, 20, 22-23 of the '311 patent, and<br />
on claims 1, 6, and 7 of the '072 patent.<br />
The language and context of the claims support the<br />
trial court's construction of "slidably enclosing a<br />
sliding assembly." Again, the trial court read the<br />
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claim to require that the guard substantially contain<br />
the needle-assembly at all times. Claim Construction<br />
Order, slip op. at 9. In the first place, claim 1<br />
expressly recites the presence of a needle as part of<br />
the sliding assembly. Thus, the claimed "assembly"<br />
would not be complete without a needle. The claim<br />
also uses the term "enclosing." In the context of an<br />
invention "for locking a needle in a shielded position<br />
as the needle is removed from a patient," that<br />
language suggests constant shielding or covering of<br />
the sharp. '311 patent, col. 2, ll. 8-9. The<br />
specification reinforces that suggestion:<br />
[T]he guard is folded about its hinge position and<br />
locked ... into a generally cylindrical, folded<br />
configuration. Alternatively, the guard may be<br />
molded ... to enclose a sliding hub/needle assembly<br />
that has been positioned between the two pieces.<br />
'311 patent, col. 2, ll. 53-58. By emphasizing that<br />
the guard is locked in a protective configuration, or<br />
molded to enclose the needle assembly, the<br />
specification conveys the concept of a permanent<br />
cover for the needle. Indeed, the figures in the<br />
specification show a completely enclosed, and thus<br />
guarded, needle. Figures 15-19 also show the needle<br />
hub as permanently housed in the guard. '311 patent,<br />
figures 15-19. The trial court also methodically<br />
considered and rejected each of DSU's arguments that<br />
the term means only generally surrounding the needle<br />
and hub. Claim Construction Order, slip. op. 8-15.<br />
This court concurs in the district court's analysis.<br />
[4] The court also construed "slot," as used in claims<br />
1, 46, and 52. Claim Construction Order, slip op. at<br />
19-24. The relevant portion of claim 46 is:<br />
46. A guard for slidably enclosing a sliding<br />
assembly ... said guard comprising ...<br />
a hollow member proportioned for receiving said<br />
needle and winged needle hub, said hollow<br />
member defining at least one longitudinal slot<br />
proportioned to receive a wing of said needle hub<br />
projecting outwardly through the slot when the<br />
needle hub resides within the hollow member in<br />
sliding relation thereto, and means, associated with<br />
the hollow member, for engaging said wing *1301<br />
projecting through said slot when the needle and<br />
hub are in a slidingly retracted position in which<br />
the needle is enclosed by the hollow member for<br />
locking said needle hub and needle in said retracted<br />
position.<br />
'311 patent, col. 20, ll. 20-39 (emphases added).<br />
Claim 52 is:<br />
52. The guard of claim 46 in which said slot<br />
extends in a longitudinal direction through one end<br />
of said hollow member, to provide sliding access to<br />
said wing.<br />
'311 patent, col. 20, ll. 63-65 (emphasis added). The<br />
trial court held that the term did not require "a<br />
defined width." Claim Construction Order, slip op.<br />
at 19. Later the district court, at the request of<br />
defendants, clarified that " '[s]lot' shall mean 'an<br />
opening in the guard capable of receiving a wing that<br />
projects through the opening and having both an<br />
upper edge and a lower edge that are defined by the<br />
sidewall of the guard.' " DSU Med. Corp. v. JMS<br />
Co., JMS N. Am. Corp., & ITL Corp. PTY, Nos. C-<br />
00-1826-DLJ, C-99-2690-DLJ (N.D.Cal. Apr. 30,<br />
2001) (Construction Clarification Order I ). In claim<br />
46, because "proportioned to receive" modifies "slot,"<br />
the trial court explained that "slot" "shall mean 'sized<br />
relative to the wing so that the wing extends through<br />
the slot when the hub is within the hollow member<br />
and so said slot can accommodate the wing's<br />
movement as it translates the length of the slot.' "<br />
Id.; see also DSU Med. Corp. v. JMS Co., JMS N.<br />
Am. Corp., & ITL Corp. PTY, Nos. C-00-1826-DLJ,<br />
C-99-2690-DLJ, slip op. at 29 (N.D. Cal. Jan 16,<br />
2002) (Construction Clarification II & SJ Order ).<br />
The trial court identified the crux of the dispute over<br />
"slot" as "whether ... the slots for the wings should<br />
have defined widths closely approximating the wings'<br />
thickness." Construction Clarification Order I, slip<br />
op. at 19. If "slot" limits the size of the opening to<br />
accommodate the "minor" thickness of the '311<br />
patent's wings, the Platypus would not infringe<br />
because its jaws accommodate any thickness. Claim<br />
Construction Order, slip op. at 19. On the other<br />
hand, if "slot" contains no thickness limitation, the<br />
Platypus would infringe because it opens to receive a<br />
wing of any size. Id., at 19.<br />
The claim language recites only "slot." Thus, the<br />
claim itself does not incorporate any thickness<br />
limitation. Moreover, the specification provided no<br />
size limitation on the opening. In a tribute to its<br />
complete analysis, the trial court went beyond those<br />
primary sources to also consult the prosecution<br />
history. Phillips, 415 F.3d at 1317 (a court "should<br />
also consider the patent's prosecution history, if it is<br />
in evidence"). The record before the <strong>Patent</strong> Office<br />
shows that the patentees amended the claims of<br />
Application Serial Number 252,564, which is the<br />
application from which the '311 patent (and '072<br />
patent) derived, to avoid U.S. <strong>Patent</strong> No. 4,840,619<br />
(Hughes <strong>Patent</strong>).<br />
In amending the claims to avoid the Hughes <strong>Patent</strong>,<br />
however, the applicant did not limit the size of the<br />
slot, as argued by JMS and ITL. The amendments<br />
concerned only the orientation of the needle wings<br />
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that moved back and forth through the slot. To<br />
distinguish the Hughes <strong>Patent</strong>, the patentee did not<br />
have to, and did not actually, limit the width of the<br />
slot. Thus, the trial court correctly construed "slot"<br />
as not requiring a defined width, as long as it was<br />
capable of receiving a wing. Construction<br />
Clarification Order I, slip op. at 14.<br />
Under this claim construction, the trial court found<br />
that "as a matter of law, every reasonable jury would<br />
find that there is a slot in the [Platypus] closed-shell<br />
configuration." Construction Clarification II & SJ<br />
Order, slip op. at 29. Therefore, the trial court held<br />
that when sold in the United*1302 States in its<br />
"closed-shell" configuration, the Platypus literally<br />
infringed claims 46-47, 49, and 52-53 of '311 patent,<br />
when closed over the tubing of a needle-set. Id.<br />
[5] Viewing the evidence in the light most favorable<br />
to the nonmoving party, this court holds that the trial<br />
court correctly concluded that the closed-shell<br />
configuration of the Platypus does have a slot. As<br />
applied to the Platypus, its slot is an opening in a<br />
needle guard capable of receiving a wing that<br />
projects through the opening. Further, the slot has<br />
both an upper edge and a lower edge defined by the<br />
sidewall of the guard. The Platypus's slot is also<br />
sized relative to the wing and can accommodate the<br />
needle wing as it moves through the length of the<br />
slot. Furthermore, the Platypus contains the other<br />
limitations of claims 46-47, 49, and 52-53 of the '311<br />
patent. Therefore, in its closed-shell configuration,<br />
the Platypus does infringe claims 46-47, 49, and 52-<br />
53 of the '311 patent. This court affirms the trial<br />
court's summary judgment ruling.<br />
III.<br />
[6] The jury found that JMS North America and JMS<br />
directly and contributorily infringed, and that JMS<br />
additionally induced JMS North America to infringe.<br />
Transcript, at 453. However, the jury returned a<br />
verdict of non-infringement in favor of ITL. Id., at<br />
453-54. The jury entered a verdict finding that ITL<br />
did not engage in contributory infringement or<br />
inducement to infringe. Id., at 453. The trial court<br />
denied DSU's motion for new trial on the jury's<br />
verdict that ITL did not contributorily infringe or<br />
induce infringement. This court reviews a denial of a<br />
motion for a new trial after a jury trial for an abuse of<br />
discretion. Chiron Corp. v. Genentech, Inc., 363<br />
F.3d 1247, 1258 (Fed.Cir.2004) (citing De Saracho v.<br />
Custom Food Mach., Inc., 206 F.3d 874, 880 (9th<br />
Cir.2000)).<br />
A.<br />
On appeal, DSU argues that ITL committed<br />
contributory infringement. According to DSU, the<br />
Platypus, which ITL sold to JMS, had no substantial<br />
noninfringing use. Therefore, DSU argues, ITL<br />
committed contributory infringement as a matter of<br />
law. ITL responds that it made and sold "most<br />
Platypus guards" outside of the United States. ITL<br />
also contends that the record contains no evidence<br />
that the Platypus was used in an infringing manner in<br />
the United States.<br />
The Platypus sets that came into the United States<br />
fall within three categories:<br />
(1) JMS imported into the United States<br />
approximately 30 million Platypus guards that,<br />
prior to importation into the United States, it had<br />
already assembled into the closed-shell<br />
configuration, combined with needle sets. These<br />
units accounted for the vast majority of Platypus<br />
sales in the United States.<br />
(2) Fresenius purchased approximately 3.5 million<br />
Platypus guards, in the open-shell configuration<br />
without needle sets. ITL billed JMS for the<br />
shipments and shipped them to Fresenius in the<br />
United States at JMS's request. Fresenius<br />
ultimately decided that guards without needle sets<br />
did not meet FDA regulations, and it returned<br />
about 3 million.<br />
(3) ITL sent approximately 15,000 Platypus in the<br />
open-shell configuration to JMS in San Francisco.<br />
DSU introduced no evidence that those units were<br />
ever put into the closed-shell configuration in the<br />
United States.<br />
Additionally, the record contained evidence that<br />
when instructed to do so by JMS, ITL would ship<br />
Platypus guard units F.O.B. into the United States.<br />
The record also shows, however, that ITL only sold<br />
the Platypus in its open-shell configuration.<br />
[7][8][9] Therefore, this court must determine<br />
whether the jury's verdict is against *1303 the clear<br />
weight of the evidence. Under § 271(c):<br />
[w]hoever offers to sell or sells within the United<br />
States ... a component of a patented machine,<br />
manufacture, combination or composition ...<br />
constituting a material part of the invention,<br />
knowing the same to be especially made or<br />
especially adapted for use in an infringement of<br />
such patent, and not a staple article or commodity<br />
of commerce suitable for substantial noninfringing<br />
use, shall be liable as a contributory infringer.<br />
35 U.S.C. § 271(c) (2000) (emphases added). In<br />
discussing 35 U.S.C. § 271(c), the Supreme Court<br />
stated:<br />
One who makes and sells articles which are only<br />
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adapted to be used in a patented combination will<br />
be presumed to intend the natural consequences of<br />
his acts; he will be presumed to intend that they<br />
shall be used in the combination of the patent.<br />
Metro-Goldwyn-Mayer Studios, Inc. v. Grokster,<br />
Ltd., 545 U.S. 913, 125 S.Ct. 2764, 2777, 162<br />
L.Ed.2d 781 (2005). In addition, the patentee always<br />
has the burden to show direct infringement for each<br />
instance of indirect infringement. Dynacore<br />
Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263,<br />
1272 (Fed.Cir.2004); Joy Techs., Inc. v. Flakt, Inc., 6<br />
F.3d 770, 774 (Fed.Cir.1993) ("Liability for either<br />
active inducement of infringement or contributory<br />
infringement is dependent upon the existence of<br />
direct infringement."). Thus, to prevail on<br />
contributory infringement, DSU must have shown<br />
that ITL made and sold the Platypus, that the<br />
Platypus has no substantial non-infringing uses in its<br />
closed-shell configuration, that ITL engaged in<br />
conduct (made sales) within the United States that<br />
contributed to another's direct infringement, and that<br />
JMS engaged in an act of direct infringement on<br />
those sales that ITL made in the United States.<br />
The trial court properly applied these legal<br />
principles. The trial court determined that the record<br />
showed that ITL supplied the Platypus, that the<br />
Platypus had no substantial non-infringing uses in its<br />
closed-shell configuration, and that ITL intended to<br />
make the Platypus that resulted in the potential for<br />
contributory infringement as a product designed for<br />
use in the patented combination. DSU Med. Corp. v.<br />
JMS Co., JMS N. Am. Corp., & ITL Corp. PTY, Nos.<br />
C-00-1826-DLJ, C-99-2690-DLJ, slip op. at 1-3<br />
(N.D.Cal. Sept. 20, 2004) (Post Trial Motions' Order<br />
). In fact, even beyond the minimal intent<br />
requirement for contributory infringement, ITL acted<br />
with the knowledge of the '311 patent and knowledge<br />
that the component was especially made or adapted<br />
for use in an infringing manner. Id., slip op. at 22-24.<br />
However, the district court denied the motion for a<br />
new trial because the record does not show that "the<br />
alleged contributory act ha[d] a direct nexus to a<br />
specific act of direct infringement." Id., slip op. at<br />
25. In denying the new trial, the court stated:<br />
And while it is true that Plaintiffs introduced<br />
evidence that "ITL sold and shipped millions of<br />
'stand alone' guards directly to United States<br />
customers, including JMS [North America] and<br />
end-users like Fresenius," there was no direct<br />
evidence at trial establishing that these guards were<br />
actually closed and used as an act of direct<br />
infringement in the United States.<br />
Id., slip op. at 26.<br />
Upon review of the record, this court perceives, as<br />
well, an absence of evidence of direct infringement to<br />
which ITL contributed in the United States. Under<br />
the terms of the '311 patent, the Platypus only<br />
infringes in the closed-shell configuration. When<br />
open, the Platypus, for instance, lacks a "slot" as well<br />
as other claimed features. ITL only contributed to<br />
placing the Platypus into the closed-shell<br />
configuration *1304 in Malaysia (category 1, above);<br />
not in the United States. Section 271(c) has a<br />
territorial limitation requiring contributory acts to<br />
occur in the United States. Furthermore, this court<br />
cannot reverse a jury verdict of non-infringement on<br />
mere inferences that the Platypus guard units sold in<br />
the United States (i.e., the open-shell configuration in<br />
categories 2 and 3, above) were put into the<br />
infringing closed-shell configuration. The record<br />
does not show that the Platypus guards ITL shipped<br />
into the United States in the open-shell configuration<br />
were ever put into an infringing configuration, i.e.,<br />
closed-shell. On categories 2 and 3, above, the<br />
record contains no evidence of direct infringement,<br />
i.e., that the open-shell Platypus guards imported by<br />
ITL were sold or used in their closed-shell<br />
configuration. As a result, the trial court did not<br />
abuse its discretion in denying DSU's motion for new<br />
trial on ITL's contributory infringement.<br />
On the issue of induced infringement, DSU argues<br />
that ITL induced infringement by inducing JMS to<br />
sell the closed-shell configuration in the United<br />
States. The district court denied DSU's motion for a<br />
new trial on the ground that, although JMS directly<br />
infringed, ITL did not intend JMS to infringe.<br />
B.<br />
RESOLUTION OF CONFLICTING PRECEDENT<br />
Section III. B., only, is considered en banc.<br />
Opinion for the court filed by Circuit Judge RADER,<br />
with NEWMAN, LOURIE, SCHALL, BRYSON,<br />
GAJARSA, LINN, DYK, PROST, and MOORE,<br />
Circuit Judges, join. Concurring opinion filed by<br />
MICHEL, Chief Judge, and MAYER, Circuit Judge.<br />
[10][11] This court addresses Part III. B., of this<br />
opinion en banc. This section addresses, in the<br />
context of induced infringement, "the required intent<br />
... to induce the specific acts of [infringement] or<br />
additionally to cause an infringement." MEMC Elec.<br />
Materials, Inc. v. Mitsubishi Materials Silicon Corp.,<br />
420 F.3d 1369, 1378 n. 4 (Fed.Cir.2005) (citing<br />
MercExchange, L.L.C. v. eBay, Inc., 401 F.3d 1323,<br />
1332 (Fed.Cir.2005)). This section clarifies that<br />
intent requirement by holding en banc that, as was<br />
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stated in Manville Sales Corp. v. Paramount Systems,<br />
Inc., 917 F.2d 544, 554 (Fed.Cir.1990), "[t]he<br />
plaintiff has the burden of showing that the alleged<br />
infringer's actions induced infringing acts and that he<br />
knew or should have known his actions would induce<br />
actual infringements." The requirement that the<br />
alleged infringer knew or should have known his<br />
actions would induce actual infringement necessarily<br />
includes the requirement that he or she knew of the<br />
patent. See Golden Blount, Inc. v. Robert H.<br />
Peterson Co., 438 F.3d 1354, 1364 n. 4<br />
(Fed.Cir.2006) (citing Manville and explaining that<br />
the inducing infringement standard was satisfied<br />
"because it is undisputed that [the alleged infringer]<br />
had notice of the patent").<br />
[12][13] DSU claims the district court improperly<br />
instructed the jury on the state of mind necessary to<br />
prove inducement to infringe under 35 U.S.C. §<br />
271(b). This court reviews the legal sufficiency of<br />
jury instructions on an issue of patent law without<br />
deference to the district court. Advanced Display<br />
Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282<br />
(Fed.Cir.2000). "This Court reviews jury instructions<br />
in their entirety and 'only orders a new trial when<br />
errors in the instructions as a whole clearly mislead<br />
the jury.' " Chiron, 363 F.3d at 1258 (quoting Delta-X<br />
Corp. v. Baker Hughes Prod. Tools, Inc., 984 F.2d<br />
410, 415 (Fed.Cir.1993)).<br />
*1305 [14][15] Under section 271(b), "[w]hoever<br />
actively induces infringement of a patent shall be<br />
liable as an infringer." 35 U.S.C. § 271(b). To<br />
establish liability under section 271(b), a patent<br />
holder must prove that once the defendants knew of<br />
the patent, they "actively and knowingly aid[ed] and<br />
abett[ed] another's direct infringement." Water<br />
Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 668<br />
(Fed.Cir.1988) (emphasis in original). However,<br />
"knowledge of the acts alleged to constitute<br />
infringement" is not enough. Warner-Lambert Co. v.<br />
Apotex Corp., 316 F.3d 1348, 1363 (Fed.Cir.2003)<br />
(citation omitted). The "mere knowledge of possible<br />
infringement by others does not amount to<br />
inducement; specific intent and action to induce<br />
infringement must be proven." Id. at 1364 (citing<br />
Manville, 917 F.2d at 554).<br />
[16] DSU asked the court to instruct the jury,<br />
purportedly in accordance with Hewlett-Packard Co.<br />
v. Bausch & Lomb, Inc., 909 F.2d 1464<br />
(Fed.Cir.1990), that to induce infringement, the<br />
inducer need only intend to cause the acts of the third<br />
party that constitute direct infringement. The trial<br />
court gave the following instruction to the jury:<br />
In order to induce infringement, there must first be<br />
an act of direct infringement and proof that the<br />
defendant knowingly induced infringement with<br />
the intent to encourage the infringement. The<br />
defendant must have intended to cause the acts that<br />
constitute the direct infringement and must have<br />
known or should have known than[sic] its action<br />
would cause the direct infringement. Unlike direct<br />
infringement, which must take place within the<br />
United States, induced infringement does not<br />
require any activity by the indirect infringer in this<br />
country, as long as the direct infringement occurs<br />
here.<br />
Transcript, at 432. Thus, the court charged the jury<br />
in accordance with Manville. The statute does not<br />
define whether the purported infringer must intend to<br />
induce the infringement or whether the purported<br />
infringer must merely intend to engage in the acts<br />
that induce the infringement regardless of whether it<br />
knows it is causing another to infringe. DSU<br />
complains that the instruction is incorrect because it<br />
requires that the inducer possess specific intent to<br />
encourage another's infringement, and not merely that<br />
the inducer had knowledge of the acts alleged to<br />
constitute infringement. [FN2]<br />
FN2. In Hewlett-Packard Co. v. Bausch &<br />
Lomb, Inc., 909 F.2d 1464, 1469<br />
(Fed.Cir.1990), this court stated that<br />
"[p]roof of actual intent to cause the acts<br />
which constitute infringement is a necessary<br />
prerequisite to finding active infringement."<br />
DSU reads this statement as standing for the<br />
proposition that proof of intent to cause<br />
infringing acts is all that is required in order<br />
to establish inducement of infringement.<br />
[17] In Grokster, which was a copyright case, the<br />
Supreme Court cited with approval this court's<br />
decision in Water Technologies when it discussed<br />
inducement of infringement, stating:<br />
The rule on inducement of infringement as<br />
developed in the early cases is no different today.<br />
Evidence of "active steps ... taken to encourage<br />
direct infringement," such as advertising an<br />
infringing use or instructing how to engage in an<br />
infringing use, show an affirmative intent that the<br />
product be used to infringe, and a showing that<br />
infringement was encouraged overcomes the law's<br />
reluctance to find liability when a defendant merely<br />
sells a commercial product suitable for some lawful<br />
use.<br />
Grokster, 125 S.Ct. at 2779 (citation and footnote<br />
omitted). As a result, if an entity offers a product<br />
with the object of promoting *1306 its use to<br />
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infringe, as shown by clear expression or other<br />
affirmative steps taken to foster infringement, it is<br />
then liable for the resulting acts of infringement by<br />
third parties. Id. at 2780. "The inducement rule ...<br />
premises liability on purposeful, culpable expression<br />
and conduct ...." Id.<br />
[18] Grokster, thus, validates this court's articulation<br />
of the state of mind requirement for inducement. See<br />
Manville, 917 F.2d at 544. In Manville, this court<br />
held that the "alleged infringer must be shown ... to<br />
have knowingly induced infringement," 917 F.2d at<br />
553, not merely knowingly induced the acts that<br />
constitute direct infringement. This court explained<br />
its "knowing" requirement:<br />
It must be established that the defendant possessed<br />
specific intent to encourage another's infringement<br />
and not merely that the defendant had knowledge<br />
of the acts alleged to constitute inducement. The<br />
plaintiff has the burden of showing that the alleged<br />
infringer's actions induced infringing acts and that<br />
he knew or should have known his actions would<br />
induce actual infringements.<br />
Id. at 553. In Water Technologies, also cited with<br />
approval by the Supreme Court, 125 S.Ct. at 2779,<br />
this court clarified: "While proof of intent is<br />
necessary, direct evidence is not required; rather,<br />
circumstantial evidence may suffice." 850 F.2d at<br />
668. [FN3] Although this court stated "that proof of<br />
actual intent to cause the acts which constitute the<br />
infringement is a necessary prerequisite to finding<br />
active inducement," Hewlett-Packard, 909 F.2d at<br />
1469, Grokster has clarified that the intent<br />
requirement for inducement requires more than just<br />
intent to cause the acts that produce direct<br />
infringement. Beyond that threshold knowledge, the<br />
inducer must have an affirmative intent to cause<br />
direct infringement. In the words of a recent<br />
decision, inducement requires " 'that the alleged<br />
infringer knowingly induced infringement and<br />
possessed specific intent to encourage another's<br />
infringement.' " MEMC Elec., 420 F.3d at 1378<br />
(Fed.Cir.2005) (quoting Minn. Mining & Mfg. Co. v.<br />
Chemque, Inc., 303 F.3d 1294, 1304-05<br />
(Fed.Cir.2002)). Accordingly, inducement requires<br />
evidence of culpable conduct, directed to<br />
encouraging another's infringement, not merely that<br />
the inducer had knowledge of the direct infringer's<br />
activities. Grokster, 125 S.Ct. at 2780; Manville,<br />
917 F.2d at 553. Accordingly, the district court<br />
correctly instructed the jury in this case.<br />
FN3. See also nCube Corp. v. Seachange<br />
Int'l, Inc., 436 F.3d 1317, 1325<br />
(Fed.Cir.2006) (This court noted that "at<br />
least ... the alleged inducer had [to have]<br />
knowledge of the infringing acts," which<br />
included evidence of SeaChange's intent that<br />
its customers use the ITV systems it sold<br />
with Scientific-Atlanta equipment to<br />
perform the patented method.)<br />
C.<br />
[19] The district court denied DSU's motion for a<br />
new trial on the issue of inducement to infringe. This<br />
court reviews a denial of a motion for a new trial<br />
after a jury trial for abuse of discretion, affirming on<br />
any basis that supports the verdict. Chiron, 363 F.3d<br />
at 1258. In denying the motion for new trial, the trial<br />
court stated:<br />
Fundamental principles of law hold that it is up to<br />
the jury to make determinations of witness<br />
credibility, to decide the existence of any factual<br />
inferences, and to determine the weight to be<br />
attributed to any direct or indirect evidence.<br />
Although Plaintiffs introduced circumstantial<br />
evidence which permitted inferences of ITL's<br />
intentions, it is up to the Jury to decide whether or<br />
not to draw any inference and to consider the<br />
weight of any such evidence. Assessing *1307<br />
competing evidence is what the law asks juries to<br />
do, and the Court declines to take over this<br />
fundamental role of the Jury.<br />
Post Trial Motions Order, slip op. at 15. The jury<br />
heard evidence about the commercial transactions<br />
between ITL and JMS, including JMS's intention to<br />
sell ITL's Platypus to Fresenius until JMS could get<br />
its own WingEater approved by the Food and Drug<br />
Administration (FDA) and ready for market. The<br />
jury also heard evidence that Mr. Utterberg's lawyer<br />
informed ITL in January 1997 that the Platypus<br />
infringed the '311 patent. Additionally, the jury<br />
learned that ITL contacted an Australian attorney,<br />
who concluded that its Platypus would not infringe.<br />
JMS and ITL then also obtained letters from U.S.<br />
patent counsel advising that the Platypus did not<br />
infringe. Mr. William Mobbs, one of the owners of<br />
ITL who had participated in the design of the<br />
Platypus, testified that ITL had no intent to infringe<br />
the '311 patent. Post Trial Motions Order, slip op. at<br />
15.<br />
[20] Thus, on this record, the jury was well within<br />
the law to conclude that ITL did not induce JMS to<br />
infringe by purposefully and culpably encouraging<br />
JMS's infringement. To the contrary, the record<br />
contains evidence that ITL did not believe its<br />
Platypus infringed. Therefore, it had no intent to<br />
infringe. Accordingly, the record supports the jury's<br />
verdict based on the evidence showing a lack of the<br />
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(Cite as: 471 F.3d 1293)<br />
necessary specific intent. The trial court certainly did<br />
not abuse its discretion.<br />
IV.<br />
Based on a finding that MDS became the exclusive<br />
licensee of the '311 patent on July 17, 2001, the jury<br />
awarded MDS lost profit damages in the amount of<br />
$4,400,000. Transcript, at 455. It also awarded DSU<br />
a reasonably royalty for sales of the Platypus, at a<br />
rate of 5¢ per unit, totaling $655,211. Id. at 456.<br />
[21] DSU appeals the trial court's denial of its<br />
motion for a new trial on price erosion damages and<br />
for three additional months of lost profits damages.<br />
Post Trial Motions Order, slip op. at 67. This court<br />
reviews a district court's denial of a motion for a new<br />
trial on the amount of damages for an abuse of<br />
discretion. Micro Chem., Inc. v. Lextron, Inc., 317<br />
F.3d 1387, 1394 (Fed.Cir.2003); Unisplay, S.A. v.<br />
Am. Elec. Sign Co., 69 F.3d 512, 517 (Fed.Cir.1995).<br />
A.<br />
[22] DSU complains that it was entitled to a new<br />
trial because the jury did not award its requested<br />
price erosion damages. On these points, the verdict<br />
form does not segregate the damages award into<br />
categories beyond lost profits and reasonable<br />
royalties. However, the jury had before it evidence<br />
of price erosion. Accordingly, this court has no basis<br />
to speculate that the jury did not award price erosion<br />
damages as part of its lost profits or reasonable<br />
royalty analysis. Crystal Semiconductor Corp. v.<br />
TriTech Microelecs. Int'l, Inc., 246 F.3d 1336, 1360<br />
(Fed.Cir.2001). The trial court properly denied<br />
DSU's motion for new trial on price erosion damages.<br />
[23] DSU also complains that it deserves a new trial<br />
because the jury should have decided that MDS was<br />
an exclusive licensee on April 5, 2001. The jury<br />
entered a verdict that the date on which MDS became<br />
an exclusive licensee of DSU, and thus, the date on<br />
which it would be entitled to collect infringement<br />
damages, was July 17, 2001. The trial court allowed<br />
the jury to make this determination, instructing it that<br />
MDS became an exclusive licensee of the '311 patent<br />
sometime *1308 between April 5, 2001 and July 17,<br />
2001. Substantial evidence supports the jury's<br />
decision to reject any contract between MDS and<br />
DSU earlier than July 17, 2001. The jury was free to<br />
determine, for instance, that Mr. Utterberg's<br />
testimony on this point was simply not credible. Mr.<br />
Utterberg testified that he "shook hands with himself"<br />
on an earlier date-as president and sole owner of both<br />
contracting parties. Post Trial Motions Order, slip<br />
op. at 56-57. At other times, however, he also<br />
contradicted himself and undermined the suggestion<br />
that a contract was entered into earlier than July 17,<br />
2001. Id. at 57. Thus, the trial court did not abuse its<br />
discretion in denying a new trial on the date of the<br />
contract.<br />
B.<br />
[24] The trial court excluded testimony from DSU's<br />
expert witness, Dr. Stephen A. Degnan, on "the<br />
hypothetical existence or hypothetical terms of a<br />
contract between [MDS] and Fresenius ... [and] as to<br />
any calculation or measure of patent infringement<br />
damages based upon any sale of the WingEater<br />
needle guard." DSU Med. Corp. v. JMS Co., 296<br />
F.Supp.2d 1140, 1159 (N.D.Cal.2003) (In Limine<br />
Order ). According to DSU, JMS's infringement<br />
interfered with MDS's "decade-long" contractual<br />
relationship with Fresenius. Specifically, MDS<br />
contended that JMS used sales of the infringing<br />
Platypus guard to "steal" the contract with Fresenius,<br />
with the intent to later replace the infringing Platypus<br />
with its non-infringing WingEater. Thus, MDS<br />
sought lost profit damages, not only for the award it<br />
received from lost sales to the infringing Platypus,<br />
but also for sales it lost to the non-infringing<br />
WingEater. The trial court disallowed Dr. Degnan's<br />
testimony on this subject because "sales of acceptable<br />
noninfringing substitute products [could not] be the<br />
basis of legally compensable patent damages," and<br />
the WingEater was an acceptable noninfringing<br />
substitute for the patented products. Id.<br />
[25] Although reviewing a district court's "Daubert "<br />
ruling to exclude testimony for an abuse of<br />
discretion, this court reviews eligibility for lost<br />
profits damages without deference. Micro Chem.,<br />
317 F.3d at 1391 (decision to admit expert testimony<br />
reviewed under regional circuit law); Genentech,<br />
Inc. v. Amgen, Inc., 289 F.3d 761, 768 (Fed.Cir.2002)<br />
(Ninth Circuit reviews evidentiary rulings for abuse<br />
of discretion); Rite-Hite Corp. v. Kelley Co., 56 F.3d<br />
1538, 1544 (Fed.Cir.1995) (whether the lost profits<br />
are legally compensable is a question of law this<br />
court reviews de novo).<br />
As noted above, the trial court reasoned that MDS<br />
"cannot be awarded lost profit damages based upon<br />
any sale by the defendant of the noninfringing<br />
WingEater needle guard." In Limine Order, 296<br />
F.Supp.2d at 1156. It also reasoned that Dr. Degnan's<br />
proffered methodology, "requiring inter alia<br />
hypothesized terms in hypothesized contracts, is not<br />
grounded on established legal principle and is far too<br />
remote factually to be within the line drawn for<br />
legally compensable patent injuries." Id.<br />
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Specifically, the trial court faulted Dr. Degnan's<br />
"accelerated market entry" notion that MDS would<br />
have captured the market in advance of the<br />
introduction of the WingEater, but for the infringing<br />
sales of the Platypus. Id. at 1151.<br />
MDS, however, also argues that the foreseeability<br />
principle in Rite-Hite supports its case for lost profits<br />
on the WingEater. While it may be possible for an<br />
infringement to have a foreseeable, and therefore<br />
compensable, effect on future contracts, the trial<br />
court was correct to perceive that it could not occur<br />
when the future contract was itself for a noninfringing<br />
substitute. In *1309Grain Processing<br />
Corp. v. American Maize-Prods. Co., 185 F.3d 1341<br />
(Fed.Cir.1999), this court observed that "[m]arket<br />
sales of an acceptable noninfringing substitute often<br />
suffice alone to defeat a case for lost profits." Id. at<br />
1352. Indeed in Grain Processing, as in this case, the<br />
noninfringing substitute that defeated the claim for<br />
lost profits was not yet offered for sale in the<br />
marketplace. Id. at 1354-55. Here, Dr. Degnan<br />
admitted that the WingEater was available in October<br />
2001, and the FDA approved the WingEater for sale<br />
on June 20, 2001. Thus, Dr. Degnan's failure to<br />
consider the effect of the availability of the<br />
WingEater supports the trial court's exclusion of the<br />
hypothetical contract theory.<br />
[26][27] In addition, Grain Processing stands for<br />
another proposition as well: "To prevent the<br />
hypothetical from lapsing into pure speculation, this<br />
court requires sound economic proof of the nature of<br />
the market and likely outcomes with infringement out<br />
of the picture." 185 F.3d at 1350. Indeed, the<br />
concept of sound economic proof requires some<br />
grounding in "sound economic and factual<br />
predicates." Riles v. Shell Exploration & Prod. Co.,<br />
298 F.3d 1302, 1311 (Fed.Cir.2002). The trial court<br />
perceived that Dr. Degnan did not ground his<br />
"accelerated market entry" theory in sound economic<br />
principle. The trial court perceived that Dr. Degnan<br />
relied too heavily on hypothesized contracts in<br />
hypothesized markets that lacked sound economic<br />
grounding. While damages analysis invariably<br />
involves hypothetical reconstruction of a "but for"<br />
marketplace, that reconstruction must include some<br />
footing in economic principle, which the trial court<br />
found lacking. Thus, this court detects no abuse of<br />
discretion in the trial court's exclusion of Dr.<br />
Degnan's testimony on lost profits damages.<br />
V.<br />
[28] The trial court denied JMS's and ITL's motions<br />
for Judgment as a Matter of Law (JMOL) contesting<br />
the $4.4 million award for lack of support with<br />
substantial evidence. Post Trial Motions Order, slip<br />
op. at 55. This court reviews a trial court's JMOL<br />
rulings after a jury verdict by reapplying the district<br />
court's own standard. Applied Med. Res. Corp. v.<br />
United States Surgical Corp., 147 F.3d 1374, 1376<br />
(Fed.Cir.1998). To prevail on appeal, JMS and ITL<br />
must show that substantial evidence does not support<br />
the jury's factual findings or that the trial court erred<br />
in applying the law on JMOL motions. Perkin-Elmer<br />
Corp. v. Computervision Corp., 732 F.2d 888, 893<br />
(Fed.Cir.1984).<br />
[29][30] This court sustains a jury's award of<br />
damages "unless the amount is grossly excessive or<br />
monstrous, clearly not supported by the evidence, or<br />
based only on speculation or guesswork." Biotec<br />
Biologische Naturverpackungen GmbH & Co. v.<br />
Biocorp, Inc., 249 F.3d 1341, 1355 (Fed.Cir.2001).<br />
The jury was accorded discretion to resolve conflicts<br />
in the evidence of damages. Brooktree Corp. v.<br />
Advanced Micro Devices, Inc., 977 F.2d 1555, 1580<br />
(Fed.Cir.1992). Moreover, this court will resolve<br />
"any doubts about the amount ... against the<br />
infringer." Kalman v. Berlyn Corp., 914 F.2d 1473,<br />
1482 (Fed.Cir.1990) (quoting Ryco, Inc. v. Ag-Bag<br />
Corp., 857 F.2d 1418, 1428 (Fed.Cir.1988)).<br />
[31] In an attempt to question the jury's lost profits<br />
verdict, JMS attempts to suggest that the market<br />
included numerous other noninfringing alternatives to<br />
the Platypus. Nevertheless, the jury awarded MDS<br />
lost profits beginning April 17, 2001. JMS<br />
acknowledged that it could not bring a guarded<br />
needle to the market by that date. JMS<br />
acknowledged that, as a result of its inability to bring<br />
its own guarded needle to market by that date, MDS<br />
could *1310 tie-up customers with multi-year<br />
MasterGuard contracts. Thus, even though the FDA<br />
approved the WingEater for sale in June 2001, it<br />
could not have replaced any sales of the patented<br />
invention, according to JMS's own admission, until<br />
its first commercial sale in October 2001.<br />
Furthermore, DSU provided evidence that no other<br />
non-infringing alternatives were acceptable during<br />
the necessary time periods. Though Nipro Medical<br />
Corporation distributed a guarded needle set called<br />
the "SafeTouch," it had design flaws that led to two<br />
FDA-published recalls, and prior to recall, it had<br />
limited geographical distribution and unsatisfactory<br />
manufacturing capacity. Though Diasol Inc.<br />
distributed, in the United States, a guarded needle set<br />
called the "Shelly," an independent rating agency<br />
(Emergency Care Research Insitute) [FN4] called<br />
Diasol's "Shelly" "unacceptable." In Limine Order,<br />
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(Cite as: 471 F.3d 1293)<br />
slip op. at 16. The record also shows that the<br />
"Shelly" sold only in very small quantities, and was<br />
not available to distributors like Fresenius.<br />
FN4. Emergency Care Research Institute is<br />
a non-profit health services research agency<br />
that has been providing information and<br />
technical assistance to the healthcare<br />
community to support safe and costeffective<br />
patient care for over 30 years. It<br />
has been called the "Consumer Reports for<br />
medical devices" and the "preeminent<br />
source for healthcare risk management<br />
information and advice."<br />
Thus, substantial evidence supports the jury award<br />
for lost profits due to lost sales to the infringing<br />
Platypus guard. Further, this court does not perceive<br />
that the jury award is grossly excessive or monstrous,<br />
or based only on speculation or guesswork.<br />
VI.<br />
DSU also appeals the denial of all of its motions for<br />
new trial on various of the trial court's evidentiary<br />
rulings. Post Trial Motions' Order, slip op. at 3-4.<br />
DSU based its motions on a variety of alleged errors<br />
in admitting or excluding evidence. For instance,<br />
DSU faults the district court for admitting the<br />
testimony of Mr. Timothy Erskine on the question of<br />
obviousness of the '311 patent, for admitting<br />
evidence about the prosecution history of the related<br />
'072 patent, and for excluding evidence of ITL's<br />
patent infringement insurance from the consideration<br />
of willfulness. The Ninth Circuit reviews "decisions<br />
regarding admission of evidence for abuse of<br />
discretion," Rogers v. Raymark Indus., Inc., 922 F.2d<br />
1426, 1429 (9th Cir.1991) (citing Daily Herald Co. v.<br />
Munro, 838 F.2d 380, 388 (9th Cir.1988)). This<br />
court detects no abuse of discretion in any of these<br />
rulings.<br />
[32] DSU also asserts that the jury's verdict, finding<br />
claims 46-47 and 50- 52 obvious, is against the great<br />
weight of the evidence. However, the lengthy trial<br />
record showed that the prior art contained all<br />
elements of claims 46-47, 50-52 of the '311 patent.<br />
This record includes: the testimony of Mr. Erskine;<br />
United States <strong>Patent</strong> No. 4,935,012 (Magre patent)<br />
and United States <strong>Patent</strong> No. 3,572,334, which<br />
disclose every element of '311 patent's claims 46, and<br />
50-51; the Magre patent and United States <strong>Patent</strong><br />
No. 3,463,152, which disclose every element of '311<br />
patent's claims 46-47 and 50; the Magre patent and<br />
United States <strong>Patent</strong> No. 4,170,933, which disclose<br />
every element of claim 46; and the Magre patent and<br />
the Hughes patent, which disclose every element of<br />
claims 46-47 and 52. The record also showed<br />
evidence of adequate motivation to combine these<br />
references to reach a decision of obviousness. In<br />
addition, the jury heard adequate evidence on the<br />
objective indicia of non-obviousness. As a result,<br />
substantial evidence supports the obviousness<br />
verdict. The trial *1311 court properly denied a new<br />
trial on this basis as well.<br />
[33] DSU also appeals the trial court's response to a<br />
question from the jury during jury deliberations.<br />
During deliberations, the jury requested a<br />
clarification on the hindsight jury instruction.<br />
Transcript, at 14984-85, 15019, 15036. The trial<br />
court responded by referring the jury back to the jury<br />
instructions on invalidity. Id. at 14985, 15019. Both<br />
parties had earlier accepted those instructions. Thus,<br />
the trial court did not abuse its "wide discretion" in<br />
responding to a jury question. Arizona v. Johnson,<br />
351 F.3d 988, 994 (9th Cir.2003).<br />
VII.<br />
In conclusion, this court affirms the trial court's grant<br />
of summary judgment of non-infringement on the<br />
combination claims (combination of guard and<br />
needle assembly) and on the open-shell configuration<br />
of the stand-alone claims. This court affirms the trial<br />
court's evidentiary rulings. This court also affirms<br />
the trial court's denial of all of the post-trial motions,<br />
affirming entry of the final judgment in its entirety.<br />
COSTS<br />
Each party shall bear its own costs.<br />
AFFIRMED<br />
MICHEL, Chief Judge, and MAYER, Circuit Judge,<br />
concurring.<br />
Although we agree with the court's analysis in<br />
Section III.B, we do not consider it necessary to<br />
address this issue en banc. DSU misreads Hewlett-<br />
Packard as if we had said "proof of actual intent to<br />
cause the acts which constitute the infringement is a<br />
necessary and sufficient prerequisite to finding active<br />
inducement," but we did not. There is no actual<br />
conflict between Hewlett-Packard and Manville and,<br />
thus, no need for intervention by the full court. Such<br />
rare intervention should be reserved for real conflicts<br />
as well as cases of exceptional importance. See Fed.<br />
R.App. P. 35(a). In our opinion, the panel was free to<br />
conclude that the district court correctly rejected<br />
DSU's proffered jury instruction because,<br />
misunderstanding Hewlett-Packard, DSU did not<br />
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471 F.3d 1293 Page 15<br />
471 F.3d 1293, 81 U.S.P.Q.2d 1238<br />
(Cite as: 471 F.3d 1293)<br />
correctly state the law.<br />
Moreover, we write to make clear that we do not set<br />
forth a new standard here as to what satisfies the<br />
"knowledge of the patent" requirement in cases<br />
brought under 35 U.S.C. § 271(b). See, e.g.,<br />
Insituform Techs., Inc. v. Cat Contr. Inc., 161 F.3d<br />
688, 695 (Fed.Cir.1998) (analyzing section 271(b)<br />
liability under both actual and constructive<br />
knowledge standards). There is no dispute that ITL<br />
Corporation Pty, Ltd., had actual knowledge of<br />
United States <strong>Patent</strong> No. 5,112,311. Accordingly, the<br />
"knowledge of the patent" issue is not before us.<br />
(PDF)<br />
• 2004 WL 3768198 (Appellate Brief) Brief for<br />
Defendant-Cross Appellant (Feb. 17, 2004)Original<br />
Image of this Document (PDF)<br />
• 2004 WL 3768199 (Appellate Brief) Appellant's<br />
Brief (Jan. 5, 2004)Original Image of this Document<br />
with Appendix (PDF)<br />
• 04-1052 (Docket) (Oct. 27, 2003)<br />
END OF DOCUMENT<br />
471 F.3d 1293, 81 U.S.P.Q.2d 1238<br />
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• 2005 WL 1843100 (Appellate Brief) Appellants'<br />
Reply Brief Non-Confidential (Jun. 29,<br />
2005)Original Image of this Document (PDF)<br />
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2005)Original Image of this Document with<br />
Appendix (PDF)<br />
• 2004 WL 3551709 (Appellate Brief) Non-<br />
Confidential Brief of Appellants (Dec. 20,<br />
2004)Original Image of this Document with<br />
Appendix (PDF)<br />
• 05-1052 (Docket) (Oct. 28, 2004)<br />
• 05-1048 (Docket) (Oct. 26, 2004)<br />
• 04-1620 (Docket) (Sep. 29, 2004)<br />
• 2004 WL 3768201 (Appellate Brief) Reply Brief<br />
for Defendant-Cross Appellant (Apr. 19,<br />
2004)Original Image of this Document (PDF)<br />
• 2004 WL 3768200 (Appellate Brief) Reply Brief<br />
(Mar. 31, 2004)Original Image of this Document<br />
© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.
116 S.Ct. 1384 Page 1<br />
517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
Briefs and Other Related Documents<br />
Supreme Court of the United States<br />
Herbert MARKMAN and Positek, Inc., Petitioners,<br />
v.<br />
WESTVIEW INSTRUMENTS, INC. and Althon<br />
Enterprises, Inc.<br />
No. 95-26.<br />
Argued Jan. 8, 1996.<br />
Decided April 23, 1996.<br />
Holder of patent for inventory control method for use<br />
in dry cleaning business brought patent infringement<br />
action against competitor. The United States District<br />
Court for the Eastern District of Pennsylvania,<br />
Marvin Katz, J., entered judgment as matter of law<br />
for competitor, despite jury's finding of infringement.<br />
The Court of Appeals for the Federal Circuit, 52 F.3d<br />
967, affirmed, ruling that interpretation of patent's<br />
claim terms was exclusive province of court.<br />
Certiorari was granted. The Supreme Court, Justice<br />
Souter, held that: (1) patent infringement actions<br />
descended from actions at law, such that Seventh<br />
Amendment required trial by jury; (2) common-law<br />
practice at time Seventh Amendment was adopted did<br />
not require interpretation of claims, or terms of art,<br />
by jury rather than judge; and (3) construction of<br />
patent, including terms of art within claim, was<br />
exclusively within province of court, in view of<br />
existing precedent, suitability of interpretation issues<br />
for determination by judge, and importance of<br />
uniformity in treatment of given patent.<br />
Affirmed.<br />
West Headnotes<br />
[1] <strong>Patent</strong>s 291 101(1)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(1) k. In General. Most Cited Cases<br />
<strong>Patent</strong>s 291 101(4)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(4) k. Specifications and Drawings,<br />
Construction With. Most Cited Cases<br />
<strong>Patent</strong> must describe exact scope of invention and its<br />
manufacture to secure to patentee all to which<br />
patentee is entitled, and to apprise public of what is<br />
still open to them; these objectives are served by both<br />
patent specification, which describes invention in<br />
such full, clear, concise, and exact terms as to enable<br />
any person skilled in the art to make and use<br />
invention, and patent's claims, which particularly<br />
point out and distinctly claim subject matter which<br />
applicant regards as invention. 35 U.S.C.A. § 112.<br />
[2] <strong>Patent</strong>s 291 101(1)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(1) k. In General. Most Cited Cases<br />
<strong>Patent</strong> claim defines scope of patent grant, and<br />
functions to forbid not only exact copies of invention,<br />
but products that go to heart of invention yet avoid<br />
literal language of claim by making noncritical<br />
change.<br />
[3] <strong>Patent</strong>s 291 101(2)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(2) k. Construction in General.<br />
Most Cited Cases<br />
<strong>Patent</strong>s 291 226.6<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(A) What Constitutes Infringement<br />
291k226.5 Substantial Identity of Subject<br />
Matter<br />
291k226.6 k. Comparison with Claims of<br />
<strong>Patent</strong>. Most Cited Cases<br />
Victory in patent infringement suit requires finding<br />
that patent claim covers alleged infringer's product or<br />
process, which in turn necessitates determination of<br />
what words in claim mean. 35 U.S.C.A. § 271(a).<br />
[4] Jury 230 12(1)<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
116 S.Ct. 1384 Page 2<br />
517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
230 Jury<br />
230II Right to Trial by Jury<br />
230k12 Nature of Cause of Action or Issue in<br />
General<br />
230k12(1) k. In General. Most Cited Cases<br />
Jury 230 13(1)<br />
230 Jury<br />
230II Right to Trial by Jury<br />
230k13 Legal or Equitable Actions or Issues<br />
230k13(1) k. In General. Most Cited Cases<br />
Under “historical test” for determining right to jury<br />
trial under Seventh Amendment, court asks first<br />
whether it is dealing with cause of action that either<br />
was tried at law at time amendment was adopted or<br />
was at least analogous to action that was tried at law<br />
at that time; if action in question belongs in law<br />
category, court then asks whether particular trial<br />
decision must fall to jury in order to preserve<br />
substance of common-law right as it existed in 1791.<br />
U.S.C.A. Const.Amend. 7.<br />
[5] Jury 230 13(1)<br />
230 Jury<br />
230II Right to Trial by Jury<br />
230k13 Legal or Equitable Actions or Issues<br />
230k13(1) k. In General. Most Cited Cases<br />
In determining whether party is entitled to jury trial<br />
under Seventh Amendment, statutory action is first<br />
compared to 18th-century actions brought in courts of<br />
England prior to merger of courts of law and equity.<br />
U.S.C.A. Const.Amend. 7.<br />
[6] Jury 230 14(1.1)<br />
230 Jury<br />
230II Right to Trial by Jury<br />
230k14 Particular Actions and Proceedings<br />
230k14(1.1) k. <strong>Patent</strong> and Copyright Cases.<br />
Most Cited Cases<br />
<strong>Patent</strong>s 291 280<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k280 k. Nature of Remedy. Most Cited<br />
Cases<br />
Modern patent infringement action descended from<br />
infringement actions tried at law in 18th century;<br />
thus, Seventh Amendment requires that patent<br />
infringement cases today be tried to jury, as their<br />
predecessors were more than two centuries ago.<br />
U.S.C.A. Const.Amend. 7.<br />
[7] Jury 230 12(1)<br />
230 Jury<br />
230II Right to Trial by Jury<br />
230k12 Nature of Cause of Action or Issue in<br />
General<br />
230k12(1) k. In General. Most Cited Cases<br />
Whether Seventh Amendment requires that particular<br />
issue in jury trial be determined by jury depends on<br />
whether jury must shoulder this responsibility as<br />
necessary to preserve substance of common-law right<br />
of trial by jury; only those incidents which are<br />
regarded as fundamental, as inherent in and of<br />
essence of system of trial by jury, are placed beyond<br />
reach of legislature. U.S.C.A. Const.Amend. 7.<br />
[8] Jury 230 12(1)<br />
230 Jury<br />
230II Right to Trial by Jury<br />
230k12 Nature of Cause of Action or Issue in<br />
General<br />
230k12(1) k. In General. Most Cited Cases<br />
In evaluating substance of common-law right, for<br />
purpose of determining whether Seventh Amendment<br />
requires that particular issue in jury trial be<br />
determined by jury, court should use historical<br />
method, similar to characterizing suits and actions<br />
within which issue arises; where there is no exact<br />
antecedent, best hope lies in comparing modern<br />
practice to earlier ones whose allocation to court or<br />
jury is known, seeking best analogy that can be<br />
drawn between old and new. U.S.C.A.<br />
Const.Amend. 7.<br />
[9] Jury 230 14(1.1)<br />
230 Jury<br />
230II Right to Trial by Jury<br />
230k14 Particular Actions and Proceedings<br />
230k14(1.1) k. <strong>Patent</strong> and Copyright Cases.<br />
Most Cited Cases<br />
Seventh Amendment did not require that jury, rather<br />
than judge, construe claims in patent and,<br />
particularly, terms of art, as common-law practice at<br />
time Seventh Amendment was adopted did not<br />
support patentee's assertion that jury interpreted<br />
patent claims at that time; closest historical analogy<br />
was to construction of specifications for which there<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
116 S.Ct. 1384 Page 3<br />
517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
was no established jury practice, and judges, not jury,<br />
ordinarily construed written documents. U.S.C.A.<br />
Const.Amend. 7.<br />
[10] <strong>Patent</strong>s 291 101(1)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(1) k. In General. Most Cited Cases<br />
<strong>Patent</strong>s 291 165(1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k165 Operation and Effect of Claims in<br />
General<br />
291k165(1) k. In General. Most Cited<br />
Cases<br />
<strong>Patent</strong>s 291 314(5)<br />
291 <strong>Patent</strong>s<br />
291XII Infringement<br />
291XII(C) Suits in Equity<br />
291k314 Hearing<br />
291k314(5) k. Questions of Law or Fact.<br />
Most Cited Cases<br />
Construction of patent, including terms of art within<br />
claim, is exclusively within province of court, not<br />
jury, in view of existing precedent, suitability of<br />
interpretation issues for determination by judge, and<br />
importance of uniformity in treatment of given<br />
patent.<br />
[11] <strong>Patent</strong>s 291 101(2)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(2) k. Construction in General.<br />
Most Cited Cases<br />
<strong>Patent</strong> construction is special occupation, requiring,<br />
like all others, special training and practice; judge,<br />
from training and discipline, is more likely to give<br />
proper interpretation to such instruments than jury,<br />
and judge is, therefore, more likely to be right, in<br />
performing such duty, than jury can be expected to<br />
be.<br />
[12] <strong>Patent</strong>s 291 101(2)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(2) k. Construction in General.<br />
Most Cited Cases<br />
Although question of meaning of term of art in patent<br />
claim is subject of testimony requiring credibility<br />
determinations, such meaning is more properly<br />
determined by judge than jury, as any credibility<br />
determinations will be subsumed within necessarily<br />
sophisticated analysis of whole document, required<br />
by standard construction rule that term can be defined<br />
only in way that comports with instrument as whole;<br />
jury's capabilities to evaluate demeanor, to sense<br />
mainsprings of human conduct, or to reflect<br />
community standards, are much less significant than<br />
trained ability to evaluate testimony in relation to<br />
overall structure of patent.<br />
[13] <strong>Patent</strong>s 291 101(2)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(2) k. Construction in General.<br />
Most Cited Cases<br />
<strong>Patent</strong>s 291 165(1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k165 Operation and Effect of Claims in<br />
General<br />
291k165(1) k. In General. Most Cited<br />
Cases<br />
Importance of uniformity in treatment of given patent<br />
supported allocation of all issues of patent claim<br />
construction, including construction of terms of art,<br />
to court rather than jury; whereas issue preclusion<br />
could not be asserted against new and independent<br />
infringement defendants, treating interpretive issues<br />
as purely legal would promote intrajurisdictional<br />
certainty through application of stare decisis.<br />
<strong>Patent</strong>s 291 328(4)<br />
291 <strong>Patent</strong>s<br />
291XIII Decisions on the Validity, Construction,<br />
and Infringement of Particular <strong>Patent</strong>s<br />
291k328 <strong>Patent</strong>s Enumerated<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
116 S.Ct. 1384 Page 4<br />
517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
291k328(4) k. Reissue. Most Cited Cases<br />
33,054. Reissue <strong>Patent</strong> Cited.<br />
**1386 *370 Syllabus FN*<br />
FN* The syllabus constitutes no part of the<br />
opinion of the Court but has been prepared<br />
by the Reporter of Decisions for the<br />
convenience of the reader. See United<br />
States v. Detroit Lumber Co., 200 U.S. 321,<br />
337, 26 S.Ct. 282, 287, 50 L.Ed. 499.<br />
Petitioner Markman owns the patent to a system that<br />
tracks clothing through the dry-cleaning process<br />
using a keyboard and data processor to generate<br />
transaction records, including a bar code readable by<br />
optical detectors. According to the patent's claim,<br />
the portion of the patent document that defines the<br />
patentee's rights, Markman's product can “maintain<br />
an inventory total” and “detect and localize spurious<br />
additions to inventory.” The product of respondent<br />
Westview Instruments, Inc., also uses a keyboard and<br />
processor and lists dry-cleaning charges on bar-coded<br />
tickets that can be read by optical detectors. In this<br />
infringement suit, after hearing an expert witness<br />
testify about the meaning of the claim's language, the<br />
jury found that Westview's product had infringed<br />
Markman's patent. The District Court nevertheless<br />
directed a verdict for Westview on the ground that its<br />
device is unable to track “inventory” as that term is<br />
used in the claim. The Court of Appeals affirmed,<br />
holding the interpretation of claim terms to be the<br />
exclusive province of the court and the Seventh<br />
Amendment to be consistent with that conclusion.<br />
Held: The construction of a patent, including terms<br />
of art within its claim, is exclusively within the<br />
province of the court. Pp. 1389-1396.<br />
(a) The Seventh Amendment right of trial by jury is<br />
the right which existed under the English common<br />
law when the Amendment was adopted. Baltimore &<br />
Carolina Line, Inc. v. Redman, 295 U.S. 654, 657, 55<br />
S.Ct. 890, 891, 79 L.Ed. 1636. Thus, the Court asks,<br />
first, whether infringement cases either were tried at<br />
law at the time of the founding or are at least<br />
analogous to a cause of action that was. There is no<br />
dispute that infringement cases today must be tried<br />
before a jury, as their predecessors were more than<br />
two centuries ago. This conclusion raises a second<br />
question: whether the particular trial issue (here a<br />
patent claim's construction) is necessarily a jury<br />
issue. This question is answered by comparing the<br />
modern practice to historical sources. Where there is<br />
no exact antecedent in the common law, the modern<br />
practice should be compared to earlier practices<br />
whose allocation to court or jury is known, and the<br />
*371 best analogy that can be drawn between an old<br />
and the new must be sought. Pp. 1389-1390.<br />
(b) There is no direct antecedent of modern claim<br />
construction in the historical sources. The closest<br />
18th-century analogue **1387 to modern claim<br />
construction seems to have been the construction of<br />
patent specifications describing the invention. Early<br />
patent cases from England and this Court show that<br />
judges, not juries, construed specification terms. No<br />
authority from this period supports Markman's<br />
contention that even if judges were charged with<br />
construing most patent terms, the art of defining<br />
terms of art in a specification fell within the jury's<br />
province. Pp. 1390-1393.<br />
(c) Since evidence of common-law practice at the<br />
time of the framing does not entail application of the<br />
Seventh Amendment's jury guarantee to the<br />
construction of the claim document, this Court must<br />
look elsewhere to characterize this determination of<br />
meaning in order to allocate it as between judge or<br />
jury. Existing precedent, the relative interpretive<br />
skills of judges and juries, and statutory policy<br />
considerations all favor allocating construction issues<br />
to the court. As the former patent practitioner,<br />
Justice Curtis, explained, the first issue in a patent<br />
case, construing the patent, is a question of law, to be<br />
determined by the court. The second issue, whether<br />
infringement occurred, is a question of fact for a jury.<br />
Winans v. Denmead, 15 How. 330, 338, 14 L.Ed.<br />
717. Contrary to Markman's contention, Bischoff v.<br />
Wethered, 9 Wall. 812, 19 L.Ed. 829, and Tucker v.<br />
Spalding, 13 Wall. 453, 20 L.Ed. 515, neither<br />
indicate that 19th-century juries resolved the meaning<br />
of patent terms of art nor undercut Justice Curtis's<br />
authority. Functional considerations also favor<br />
having judges define patent terms of art. A judge,<br />
from his training and discipline, is more likely to give<br />
proper interpretation to highly technical patents than<br />
a jury and is in a better position to ascertain whether<br />
an expert's proposed definition fully comports with<br />
the instrument as a whole. Finally, the need for<br />
uniformity in the treatment of a given patent favors<br />
allocation of construction issues to the court. Pp.<br />
1393-1396.<br />
52 F.3d 967 (C.A.Fed.1995) , affirmed.<br />
SOUTER, J., delivered the opinion for a unanimous<br />
Court.<br />
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116 S.Ct. 1384 Page 5<br />
517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
William B. Mallen, for petitioners.<br />
*372 Frank H. Griffin, III, Media, PA, for<br />
respondents.For U.S. Supreme Court briefs, see:1995<br />
WL 668008 (Pet.Brief)1995 WL 730381<br />
(Resp.Brief)1995 WL 763711 (Reply.Brief)<br />
Justice SOUTER delivered the opinion of the Court.<br />
The question here is whether the interpretation of a<br />
so-called patent claim, the portion of the patent<br />
document that defines the scope of the patentee's<br />
rights, is a matter of law reserved entirely for the<br />
court, or subject to a Seventh Amendment guarantee<br />
that a jury will determine the meaning of any<br />
disputed term of art about which expert testimony is<br />
offered. We hold that the construction of a patent,<br />
including terms of art within its claim, is exclusively<br />
within the province of the court.<br />
*373 I<br />
[1][2] The Constitution empowers Congress “[t]o<br />
promote the Progress of Science and useful Arts, by<br />
securing for limited Times to Authors and Inventors<br />
the exclusive Right to their respective Writings and<br />
Discoveries.” Art. I, § 8, cl. 8. Congress first<br />
exercised this authority in 1790, when it provided for<br />
the issuance of “letters patent,” Act of Apr. 10, 1790,<br />
ch. 7, § 1, 1 Stat. 109, which, like their modern<br />
counterparts, granted inventors “the right to exclude<br />
others from making, using, offering for sale, selling,<br />
or importing the patented invention,” in exchange for<br />
full disclosure of an invention, H. Schwartz, <strong>Patent</strong><br />
Law and Practice 1, 33 (2d ed.1995). It has long<br />
been understood that a patent must describe the exact<br />
scope of an invention and its manufacture to “secure<br />
to [the patentee] all to which he is entitled, [and] to<br />
apprise the public of what is still open to them.”<br />
McClain v. Ortmayer, 141 U.S. 419, 424, 12 S.Ct.<br />
76, 77, 35 L.Ed. 800 (1891). Under the modern<br />
American system, these objectives are served by two<br />
distinct elements of a patent document. First, it<br />
contains a specification describing the invention “in<br />
such full, clear, concise, and exact **1388 terms as to<br />
enable any person skilled in the art ... to make and<br />
use the same.” 35 U.S.C. § 112; see also 3 E.<br />
Lipscomb, Walker on <strong>Patent</strong>s § 10:1, pp. 183-184<br />
(3d ed. 1985) (Lipscomb) (listing the requirements<br />
for a specification). Second, a patent includes one or<br />
more “claims,” which “particularly poin[t] out and<br />
distinctly clai[m] the subject matter which the<br />
applicant regards as his invention.” 35 U.S.C. § 112.<br />
“A claim covers and secures a process, a machine, a<br />
manufacture, a composition of matter, or a design,<br />
but never the function or result of either, nor the<br />
scientific explanation of their operation.” 6<br />
Lipscomb § 21:17, at 315-316. The claim<br />
“define[s] the scope of a patent grant,” 3 id., § 11:1,<br />
at 280, and functions to forbid not only exact copies<br />
of an invention, but products that go to “the heart of<br />
an invention but avoids the literal language of the<br />
claim by making a *374 noncritical change,”<br />
Schwartz, supra, at 82. FN1 In this opinion, the word<br />
“claim” is used only in this sense peculiar to patent<br />
law.<br />
FN1. Thus, for example, a claim for a<br />
ceiling fan with three blades attached to a<br />
solid rod connected to a motor would not<br />
only cover fans that take precisely this form,<br />
but would also cover a similar fan that<br />
includes some additional feature, e.g., such a<br />
fan with a cord or switch for turning it on<br />
and off, and may cover a product deviating<br />
from the core design in some noncritical<br />
way, e.g., a three-bladed ceiling fan with<br />
blades attached to a hollow rod connected to<br />
a motor. H. Schwartz, <strong>Patent</strong> Law and<br />
Practice 81-82 (2d ed.1995).<br />
[3] Characteristically, patent lawsuits charge what is<br />
known as infringement, Schwartz, supra, at 75, and<br />
rest on allegations that the defendant “without<br />
authority ma[de], use[d] or [sold the] patented<br />
invention, within the United States during the term of<br />
the patent therefor....” 35 U.S.C. § 271(a). Victory<br />
in an infringement suit requires a finding that the<br />
patent claim “covers the alleged infringer's product or<br />
process,” which in turn necessitates a determination<br />
of “what the words in the claim mean.” Schwartz,<br />
supra, at 80; see also 3 Lipscomb § 11:2, at 288-<br />
290.<br />
Petitioner in this infringement suit, Markman, owns<br />
United States Reissue <strong>Patent</strong> No. 33,054 for his<br />
“Inventory Control and Reporting System for<br />
Drycleaning Stores.” The patent describes a system<br />
that can monitor and report the status, location, and<br />
movement of clothing in a dry-cleaning<br />
establishment. The Markman system consists of a<br />
keyboard and data processor to generate written<br />
records for each transaction, including a bar code<br />
readable by optical detectors operated by employees,<br />
who log the progress of clothing through the drycleaning<br />
process. Respondent Westview's product<br />
also includes a keyboard and processor, and it lists<br />
charges for the dry-cleaning services on bar-coded<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
116 S.Ct. 1384 Page 6<br />
517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
tickets that can be read by portable optical detectors.<br />
Markman brought an infringement suit against<br />
Westview and Althon Enterprises, an operator of drycleaning<br />
establishments*375 using Westview's<br />
products (collectively, Westview). Westview<br />
responded that Markman's patent is not infringed by<br />
its system because the latter functions merely to<br />
record an inventory of receivables by tracking<br />
invoices and transaction totals, rather than to record<br />
and track an inventory of articles of clothing. Part of<br />
the dispute hinged upon the meaning of the word<br />
“inventory,” a term found in Markman's independent<br />
claim 1, which states that Markman's product can<br />
“maintain an inventory total” and “detect and localize<br />
spurious additions to inventory.” The case was tried<br />
before a jury, which heard, among others, a witness<br />
produced by Markman who testified about the<br />
meaning of the claim language.<br />
After the jury compared the patent to Westview's<br />
device, it found an infringement of Markman's<br />
independent claim 1 and dependent claim 10. FN2 The<br />
District Court nevertheless granted Westview's<br />
deferred motion for judgment as a matter of law, one<br />
of its reasons being that the term “inventory” in<br />
Markman's patent encompasses “both cash inventory<br />
and the actual physical inventory of articles of<br />
clothing.” 772 F.Supp. 1535, 1537-1538<br />
(E.D.Pa.1991). Under the trial court's construction<br />
of the patent, the production,**1389 sale, or use of a<br />
tracking system for dry cleaners would not infringe<br />
Markman's patent unless the product was capable of<br />
tracking articles of clothing throughout the cleaning<br />
process and generating reports about their status and<br />
location. Since Westview's system cannot do these<br />
things, the District Court directed a verdict on the<br />
ground that Westview's device does not have the<br />
“means to maintain an inventory total” and thus<br />
cannot “ ‘detect and localize spurious additions to<br />
inventory as well as spurious deletions therefrom,’ ”<br />
as required by claim 1. Id., at 1537.<br />
FN2. Dependent claim 10 specifies that, in<br />
the invention of claim 1, the input device is<br />
an alpha-numeric keyboard in which single<br />
keys may be used to enter the attributes of<br />
the items in question.<br />
*376 Markman appealed, arguing it was error for the<br />
District Court to substitute its construction of the<br />
disputed claim term ‘inventory’ for the construction<br />
the jury had presumably given it. The United States<br />
Court of Appeals for the Federal Circuit affirmed,<br />
holding the interpretation of claim terms to be the<br />
exclusive province of the court and the Seventh<br />
Amendment to be consistent with that conclusion. 52<br />
F.3d 967 (1995). Markman sought our review on<br />
each point, and we granted certiorari. 515 U.S. 1192,<br />
116 S.Ct. 40, 132 L.Ed.2d 921 (1995). We now<br />
affirm.<br />
II<br />
[4] The Seventh Amendment provides that “[i]n Suits<br />
at common law, where the value in controversy shall<br />
exceed twenty dollars, the right of trial by jury shall<br />
be preserved....” U.S. Const., Amdt. 7. Since Justice<br />
Story's day, United States v. Wonson, 28 F. Cas. 745,<br />
750 (No. 16,750) (CC Mass. 1812), we have<br />
understood that “[t]he right of trial by jury thus<br />
preserved is the right which existed under the English<br />
common law when the Amendment was adopted.”<br />
Baltimore & Carolina Line, Inc. v. Redman, 295 U.S.<br />
654, 657, 55 S.Ct. 890, 891, 79 L.Ed. 1636 (1935).<br />
In keeping with our longstanding adherence to this<br />
“historical test,” Wolfram, The Constitutional History<br />
of the Seventh Amendment, 57 Minn. L.Rev. 639,<br />
640-643 (1973), we ask, first, whether we are dealing<br />
with a cause of action that either was tried at law at<br />
the time of the founding or is at least analogous to<br />
one that was, see, e.g., Tull v. United States, 481 U.S.<br />
412, 417, 107 S.Ct. 1831, 1835, 95 L.Ed.2d 365<br />
(1987). If the action in question belongs in the law<br />
category, we then ask whether the particular trial<br />
decision must fall to the jury in order to preserve the<br />
substance of the common-law right as it existed in<br />
1791. See infra, at 1389-1390. FN3<br />
FN3. Our formulations of the historical test<br />
do not deal with the possibility of conflict<br />
between actual English common-law<br />
practice and American assumptions about<br />
what that practice was, or between English<br />
and American practices at the relevant time.<br />
No such complications arise in this case.<br />
*377 A<br />
[5][6] As to the first issue, going to the character of<br />
the cause of action, “[t]he form of our analysis is<br />
familiar. ‘First we compare the statutory action to<br />
18th-century actions brought in the courts of England<br />
prior to the merger of the courts of law and equity.’ ”<br />
Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42,<br />
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517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
109 S.Ct. 2782, 2790, 106 L.Ed.2d 26 (1989)<br />
(citation omitted). Equally familiar is the descent of<br />
today's patent infringement action from the<br />
infringement actions tried at law in the 18th century,<br />
and there is no dispute that infringement cases today<br />
must be tried to a jury, as their predecessors were<br />
more than two centuries ago. See, e.g., Bramah v.<br />
Hardcastle, 1 Carp. P.C. 168 (K.B.1789).<br />
B<br />
This conclusion raises the second question, whether a<br />
particular issue occurring within a jury trial (here the<br />
construction of a patent claim) is itself necessarily a<br />
jury issue, the guarantee being essential to preserve<br />
the right to a jury's resolution of the ultimate dispute.<br />
In some instances the answer to this second question<br />
may be easy because of clear historical evidence that<br />
the very subsidiary question was so regarded under<br />
the English practice of leaving the issue for a jury.<br />
But when, as here, the old practice provides no clear<br />
answer, see infra, at 1390-1391, we are forced to<br />
make a judgment about the scope of the Seventh<br />
Amendment guarantee without the benefit of any<br />
foolproof test.<br />
**1390 [7] The Court has repeatedly said that the<br />
answer to the second question “must depend on<br />
whether the jury must shoulder this responsibility as<br />
necessary to preserve the ‘substance of the commonlaw<br />
right of trial by jury.’ ” Tull v. United States,<br />
supra, at 426, 107 S.Ct., at 1840 (emphasis added)<br />
(quoting Colgrove v. Battin, 413 U.S. 149, 156, 93<br />
S.Ct. 2448, 2452, 37 L.Ed.2d 522 (1973)); see also<br />
Baltimore & Carolina Line, supra, at 657, 55 S.Ct.,<br />
at 891. “ ‘ “Only those incidents which are regarded<br />
as fundamental, as inherent in and of the essence of<br />
the system of trial by jury, are placed beyond*378<br />
the reach of the legislature.” ’ ” Tull v. United<br />
States, supra, at 426, 107 S.Ct., at 1840 (citations<br />
omitted); see also Galloway v. United States, 319<br />
U.S. 372, 392, 63 S.Ct. 1077, 1088, 87 L.Ed. 1458<br />
(1943).<br />
The “substance of the common-law right” is,<br />
however, a pretty blunt instrument for drawing<br />
distinctions. We have tried to sharpen it, to be sure,<br />
by reference to the distinction between substance and<br />
procedure. See Baltimore & Carolina Line, supra,<br />
at 657, 55 S.Ct., at 891; see also Galloway v. United<br />
States, supra, at 390-391, 63 S.Ct., at 1087-1088; Ex<br />
parte Peterson, 253 U.S. 300, 309, 40 S.Ct. 543, 546,<br />
64 L.Ed. 919 (1920); Walker v. New Mexico &<br />
Southern Pacific R. Co., 165 U.S. 593, 596, 17 S.Ct.<br />
421, 422, 41 L.Ed. 837 (1897); but see Sun Oil Co.<br />
v. Wortman, 486 U.S. 717, 727, 108 S.Ct. 2117,<br />
2124, 100 L.Ed.2d 743 (1988). We have also<br />
spoken of the line as one between issues of fact and<br />
law. See Baltimore & Carolina Line, supra, at 657,<br />
55 S.Ct., at 891; see also Ex parte Peterson, supra,<br />
at 310, 40 S.Ct., at 546; Walker v. New Mexico &<br />
Southern Pacific R. Co., supra, at 597, 17 S.Ct., at<br />
422; but see Pullman-Standard v. Swint, 456 U.S.<br />
273, 288, 102 S.Ct. 1781, 1789, 72 L.Ed.2d 66<br />
(1982).<br />
[8] But the sounder course, when available, is to<br />
classify a mongrel practice (like construing a term of<br />
art following receipt of evidence) by using the<br />
historical method, much as we do in characterizing<br />
the suits and actions within which they arise. Where<br />
there is no exact antecedent, the best hope lies in<br />
comparing the modern practice to earlier ones whose<br />
allocation to court or jury we do know, cf. Baltimore<br />
& Carolina Line, supra, at 659, 660, 55 S.Ct., at 892,<br />
893; Dimick v. Schiedt, 293 U.S. 474, 477, 482, 55<br />
S.Ct. 296, 297, 79 L.Ed. 603 (1935), seeking the best<br />
analogy we can draw between an old and the new,<br />
see Tull v. United States, supra, at 420-421, 107<br />
S.Ct., at 1836-1837 (we must search the English<br />
common law for “appropriate analogies” rather than a<br />
“precisely analogous common-law cause of action”).<br />
C<br />
[9] “Prior to 1790 nothing in the nature of a claim<br />
had appeared either in British patent practice or in<br />
that of the *379 American states,” Lutz, Evolution of<br />
the Claims of U.S. <strong>Patent</strong>s, 20 J. Pat. Off. Soc. 134<br />
(1938), and we have accordingly found no direct<br />
antecedent of modern claim construction in the<br />
historical sources. Claim practice did not achieve<br />
statutory recognition until the passage of the Act of<br />
July 4, 1836, ch. 357, § 6, 5 Stat. 119, and inclusion<br />
of a claim did not become a statutory requirement<br />
until 1870, Act of July 8, 1870, ch. 230, § 26, 16<br />
Stat. 201; see 1 A. Deller, <strong>Patent</strong> Claims § 4, p. 9<br />
(2d ed.1971). Although, as one historian has<br />
observed, as early as 1850 “judges were ... beginning<br />
to express more frequently the idea that in seeking to<br />
ascertain the invention ‘claimed’ in a patent the<br />
inquiry should be limited to interpreting the<br />
summary, or ‘claim,’ ” Lutz, supra, at 145, “[t]he<br />
idea that the claim is just as important if not more<br />
important than the description and drawings did not<br />
develop until the Act of 1870 or thereabouts.”<br />
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517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
Deller, supra, § 4, at 9.<br />
At the time relevant for Seventh Amendment<br />
analogies, in contrast, it was the specification, itself a<br />
relatively new development, H. Dutton, The <strong>Patent</strong><br />
System and Inventive Activity During the Industrial<br />
Revolution, 1750-1852, pp. 75-76 (1984), that<br />
represented the key to the patent. Thus, patent<br />
litigation in that early period was typified by socalled<br />
novelty actions, testing whether “any essential<br />
part of [the patent had been] disclosed to the public<br />
before,” Huddart v. Grimshaw, Dav. Pat. Cas. 265,<br />
298 (K.B.1803), and “enablement”**1391 cases, in<br />
which juries were asked to determine whether the<br />
specification described the invention well enough to<br />
allow members of the appropriate trade to reproduce<br />
it, see, e.g., Arkwright v. Nightingale, Dav. Pat. Cas.<br />
37, 60 (C.P. 1785).<br />
The closest 18th-century analogue of modern claim<br />
construction seems, then, to have been the<br />
construction of specifications, and as to that function<br />
the mere smattering *380 of patent cases that we<br />
have from this period FN4 shows no established jury<br />
practice sufficient to support an argument by analogy<br />
that today's construction of a claim should be a<br />
guaranteed jury issue. Few of the case reports even<br />
touch upon the proper interpretation of disputed<br />
terms in the specifications at issue, see, e.g., Bramah<br />
v. Hardcastle, 1 Carp. P.C. 168 (K.B.1789); King v.<br />
Else, 1 Carp. P.C. 103, Dav. Pat. Cas. 144<br />
(K.B.1785); Dollond's Case, 1 Carp. P.C. 28 (C.P.<br />
1758); Administrators of Calthorp v. Waymans, 3<br />
Keb. 710, 84 Eng. Rep. 966 (K.B.1676), and none<br />
demonstrates that the definition of such a term was<br />
determined by the jury. FN5 This absence of an<br />
established practice should not surprise us, given the<br />
primitive state of jury patent practice at the end of the<br />
18th century, when juries were still new to the field.<br />
Although by 1791 more than a century had passed<br />
since the enactment of the Statute of Monopolies,<br />
which provided*381 that the validity of any<br />
monopoly should be determined in accordance with<br />
the common law, patent litigation had remained<br />
within the jurisdiction of the Privy Council until 1752<br />
and hence without the option of a jury trial. E.<br />
Walterscheid, Early Evolution of the United States<br />
<strong>Patent</strong> Law: Antecedents (Part 3), 77 J. Pat. & Tm.<br />
Off. Soc. 771, 771-776 (1995). Indeed, the state of<br />
patent law in the common-law courts before 1800 led<br />
one historian to observe that “the reported cases are<br />
destitute of any decision of importance.... At the end<br />
of the eighteenth century, therefore, the Common<br />
Law Judges were left to pick up the threads of the<br />
principles of law without the aid of recent and<br />
reliable precedents.” Hulme, On the Consideration<br />
of the <strong>Patent</strong> Grant, Past and Present, 13 L.Q. Rev.<br />
313, 318 (1897). Earlier writers expressed similar<br />
discouragement at patent law's amorphous<br />
character, FN6 and, as late as the 1830's, English<br />
commentators were irked by enduring confusion in<br />
the field. See Dutton, supra, at 69-70.<br />
FN4. Before the turn of the century, “no<br />
more than twenty-two [reported] cases came<br />
before the superior courts of London.” H.<br />
Dutton, The <strong>Patent</strong> System and Inventive<br />
Activity During the Industrial Revolution,<br />
1750-1852, p. 71 (1984).<br />
FN5. Markman relies heavily upon Justice<br />
Buller's notes of Lord Mansfield's<br />
instructions in Liardet v. Johnson<br />
(K.B.1778), in 1 J. Oldham, The Mansfield<br />
Manuscripts and the Growth of English Law<br />
in the Eighteenth Century 748 (1992).<br />
Liardet was an enablement case about the<br />
invention of stucco, in which a defendant<br />
asserted that the patent was invalid because<br />
it did not fully describe the appropriate<br />
method for producing the substance. Even<br />
setting aside concerns about the accuracy of<br />
the summary of the jury instructions<br />
provided for this case from outside the<br />
established reports, see 1 Oldham, supra, at<br />
752, n. 11, it does not show that juries<br />
construed disputed terms in a patent. From<br />
its ambiguous references, e.g., 1 Oldham,<br />
supra, at 756 (“[Lord Mansfield] left to the<br />
jury 1st, on all objections made to exactness,<br />
certainty and propriety of the Specification,<br />
& whether any workman could make it by<br />
[the Specification]”), we cannot infer the<br />
existence of an established practice, cf.<br />
Galloway v. United States, 319 U.S. 372,<br />
392, 63 S.Ct. 1077, 1088, 87 L.Ed. 1458<br />
(1943) (expressing concern regarding the<br />
“uncertainty and the variety of conclusions<br />
which follows from an effort at purely<br />
historical accuracy”), especially when, as<br />
here, the inference is undermined by<br />
evidence that judges, rather than jurors,<br />
ordinarily construed written documents at<br />
the time. See infra, at 1393-1394.<br />
FN6. See, e.g., Boulton and Watt v. Bull, 2<br />
H. Bl. 463, 491, 126 Eng. Rep. 651, 665<br />
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517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
(C.P. 1795) (Eyre, C.J.) (“<strong>Patent</strong> rights are<br />
no where that I can find accurately discussed<br />
in our books”); Dutton, supra n. 4, at 70-71<br />
(quoting Abraham Weston as saying “it may<br />
with truth be said that the [Law] Books are<br />
silent on the subject [of patents] and furnish<br />
no clue to go by, in agitating the Question<br />
What is the Law of <strong>Patent</strong>s”).<br />
Markman seeks to supply what the early case reports<br />
lack in so many words by relying on decisions like<br />
Turner v. Winter, 1 T.R. 602, 99 Eng. Rep. 1274<br />
(K.B.1787), and Arkwright v. Nightingale, Dav. Pat.<br />
Cas. 37 (C.P. 1785), to argue that the 18th-century<br />
juries must have acted as definers of patent terms just<br />
to reach the verdicts we know they rendered in patent<br />
cases turning on enablement or novelty. But the<br />
conclusion simply does not follow. There is no more<br />
**1392 reason to infer that juries supplied plenary<br />
interpretation of written instruments in patent<br />
litigation than in other cases implicating the meaning<br />
of documentary terms, and we do know that in other<br />
kinds of cases during this period judges, *382 not<br />
juries, ordinarily construed written documents. FN7<br />
The probability that the judges were doing the same<br />
thing in the patent litigation of the time is confirmed<br />
by the fact that as soon as the English reports did<br />
begin to describe the construction of patent<br />
documents, they show the judges construing the<br />
terms of the specifications. See Bovill v. Moore,<br />
Dav. Pat. Cas. 361, 399, 404 (C.P. 1816) (judge<br />
submits question of novelty to the jury only after<br />
explaining some of the language and “stat[ing] in<br />
what terms the specification runs”); cf. Russell v.<br />
Cowley & Dixon, Webs. Pat. Cas. 457, 467-470<br />
(Exch.1834) (construing the terms of the<br />
specification in reviewing a verdict); Haworth v.<br />
Hardcastle, Webs. Pat. Cas. 480, 484-485 (1834)<br />
(same). This evidence is in fact buttressed by cases<br />
from this Court; when they first reveal actual<br />
practice, the practice revealed is of the judge<br />
construing the patent. See, e.g., Winans v. New York<br />
& Erie R. Co., 21 How. 88, 100, 16 L.Ed. 68 (1859);<br />
Winans v. Denmead, 15 How. 330, 338, 14 L.Ed. 717<br />
(1854); Hogg v. Emerson, 6 How. 437, 484, 12 L.Ed.<br />
505 (1848); cf. Parker v. Hulme, 18 F. Cas. 1138<br />
(No. 10,740) (CC ED Pa. 1849). These indications<br />
of our patent practice are the more impressive for<br />
being all of a piece with what we know about the<br />
analogous contemporary practice of interpreting*383<br />
terms within a land patent, where it fell to the judge,<br />
not the jury, to construe the words. FN8<br />
FN7. See, e.g., Devlin, Jury Trial of<br />
Complex Cases: English Practice at the<br />
Time of the Seventh Amendment, 80<br />
Colum. L.Rev. 43, 75 (1980); Weiner, The<br />
Civil Jury Trial and the Law-Fact<br />
Distinction, 54 Calif.L.Rev. 1867, 1932<br />
(1966). For example, one historian<br />
observed that it was generally the practice of<br />
judges in the late 18th century “to keep the<br />
construction of writings out of the jury's<br />
hands and reserve it for themselves,” a<br />
“safeguard” designed to prevent a jury from<br />
“constru[ing] or refin[ing] it at pleasure.” 9<br />
J. Wigmore, Evidence § 2461, p. 194 (J.<br />
Chadbourn rev. ed.1981) (emphasis in<br />
original; internal quotation marks omitted).<br />
The absence of any established practice<br />
supporting Markman's view is also shown<br />
by the disagreement between Justices Willis<br />
and Buller, reported in Macbeath v.<br />
Haldimand, 1 T.R. 173, 180-182, 99 Eng.<br />
Rep. 1036, 1040-1041 (K.B.1786), as to<br />
whether juries could ever construe written<br />
documents when their meaning was<br />
disputed.<br />
FN8. As we noted in Brown v. Huger, 21<br />
How. 305, 318, 16 L.Ed. 125 (1859):<br />
“With regard to the second part of this<br />
objection, that which claims for the jury the<br />
construction of the patent, we remark that<br />
the patent itself must be taken as evidence of<br />
its meaning; that, like other written<br />
instruments, it must be interpreted as a<br />
whole ... and the legal deductions drawn<br />
therefrom must be conformable with the<br />
scope and purpose of the entire document.<br />
This construction and these deductions we<br />
hold to be within the exclusive province of<br />
the court.”<br />
D<br />
Losing, then, on the contention that juries generally<br />
had interpretive responsibilities during the 18th<br />
century, Markman seeks a different anchor for<br />
analogy in the more modest contention that even if<br />
judges were charged with construing most terms in<br />
the patent, the art of defining terms of art employed<br />
in a specification fell within the province of the jury.<br />
Again, however, Markman has no authority from the<br />
period in question, but relies instead on the later case<br />
of Neilson v. Harford, Webs. Pat. Cas. 328<br />
(Exch.1841). There, an exchange between the judge<br />
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517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
and the lawyers indicated that although the<br />
construction of a patent was ordinarily for the court,<br />
id., at 349 (Alderson, B.), judges should “leav[e] the<br />
question of words of art to the jury,” id., at 350<br />
(Alderson, B.); see also id., at 370 (judgment of the<br />
court); Hill v. Evans, 4 De. G.F. & J. 288, 293-294,<br />
45 Eng. Rep. 1195, 1197 (Ch. 1862). Without,<br />
however, in any way disparaging the weight to which<br />
Baron Alderson's view is entitled, the most we can<br />
say is that an English report more than 70 years after<br />
the time that concerns us indicates an exception to<br />
what probably had been occurring earlier. FN9 In place<br />
of **1393 *384 Markman's inference that this<br />
exceptional practice existed in 1791 there is at best<br />
only a possibility that it did, and for anything more<br />
than a possibility we have found no scholarly<br />
authority.<br />
FN9. In explaining that judges generally<br />
construed all terms in a written document at<br />
the end of the 18th century, one historian<br />
observed that “[i]nterpretation by local<br />
usage for example (today the plainest case<br />
of legitimate deviation from the normal<br />
standard) was still but making its way.” 9<br />
Wigmore, Evidence § 2461, at 195; see<br />
also id., at 195, and n. 6 (providing<br />
examples of this practice). We need not in<br />
any event consider here whether our<br />
conclusion that the Seventh Amendment<br />
does not require terms of art in patent claims<br />
to be submitted to the jury supports a similar<br />
result in other types of cases.<br />
III<br />
[10] Since evidence of common-law practice at the<br />
time of the framing does not entail application of the<br />
Seventh Amendment's jury guarantee to the<br />
construction of the claim document, we must look<br />
elsewhere to characterize this determination of<br />
meaning in order to allocate it as between court or<br />
jury. We accordingly consult existing precedent FN10<br />
and consider both the relative interpretive skills of<br />
judges and juries and the statutory policies that ought<br />
to be furthered by the allocation.<br />
FN10. Because we conclude that our<br />
precedent supports classifying the question<br />
as one for the court, we need not decide<br />
either the extent to which the Seventh<br />
Amendment can be said to have crystallized<br />
a law/fact distinction, cf. Ex parte Peterson,<br />
253 U.S. 300, 310, 40 S.Ct. 543, 546, 64<br />
L.Ed. 919 (1920); Walker v. New Mexico &<br />
Southern Pacific R. Co., 165 U.S. 593, 597,<br />
17 S.Ct. 421, 422, 41 L.Ed. 837 (1897), or<br />
whether post-1791 precedent classifying an<br />
issue as one of fact would trigger the<br />
protections of the Seventh Amendment if<br />
(unlike this case) there were no more<br />
specific reason for decision.<br />
A<br />
The two elements of a simple patent case, construing<br />
the patent and determining whether infringement<br />
occurred, were characterized by the former patent<br />
practitioner, Justice Curtis. FN11 “The first is a<br />
question of law, to be determined by the court,<br />
construing the letters-patent, and the description of<br />
the invention and specification of claim annexed to<br />
them. The second is a question of fact, to be<br />
submitted to a jury.” Winans v. Denmead, supra, at<br />
338; see *385Winans v. New York & Erie R. Co.,<br />
supra, at 100; Hogg v. Emerson, supra, at 484; cf.<br />
Parker v. Hulme, supra, at 1140.<br />
FN11. See 1 A Memoir of Benjamin<br />
Robbins Curtis, L.L.D., 84 (B. Curtis ed.<br />
1879); cf. O'Reilly v. Morse, 15 How. 62,<br />
63, 14 L.Ed. 601 (1854) (noting his<br />
involvement in a patent case).<br />
In arguing for a different allocation of responsibility<br />
for the first question, Markman relies primarily on<br />
two cases, Bischoff v. Wethered, 9 Wall. 812, 19<br />
L.Ed. 829 (1870), and Tucker v. Spalding, 13 Wall.<br />
453, 20 L.Ed. 515 (1872). These are said to show<br />
that evidence of the meaning of patent terms was<br />
offered to 19th-century juries, and thus to imply that<br />
the meaning of a documentary term was a jury issue<br />
whenever it was subject to evidentiary proof. That is<br />
not what Markman's cases show, however.<br />
In order to resolve the Bischoff suit implicating the<br />
construction of rival patents, we considered “whether<br />
the court below was bound to compare the two<br />
specifications, and to instruct the jury, as a matter of<br />
law, whether the inventions therein described were,<br />
or were not, identical.” 9 Wall., at 813 (statement of<br />
the case). We said it was not bound to do that, on<br />
the ground that investing the court with so dispositive<br />
a role would improperly eliminate the jury's function<br />
in answering the ultimate question of infringement.<br />
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517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
FN12. We are also unpersuaded by<br />
On that ultimate issue, expert testimony had been<br />
admitted on “the nature of the various mechanisms or<br />
manufactures described in the different patents<br />
Tucker, supra, at 455. FN12 often becomes necessary that they should avail<br />
produced, and as to the identity or diversity between<br />
them.” Id., at 814. Although the jury's consideration<br />
of that expert testimony in resolving the question of<br />
infringement was said to impinge upon the wellestablished<br />
principle “that it is the province of the<br />
court, and not the jury, to construe the meaning of<br />
documentary evidence,” id., at 815, we decided that it<br />
petitioner's heavy reliance upon the decision<br />
of Justice Story on circuit in Washburn v.<br />
Gould, 29 F. Cas. 312 (No. 17,214) (CC<br />
Mass. 1844). Although he wrote that “[t]he<br />
jury are to judge of the meaning of words of<br />
art, and technical phrases,” id., at 325, he<br />
did so in describing the decision in Neilson<br />
was not so. We said:<br />
v. Harford, Webs. Pat. Cas. 328<br />
“[T]he specifications ... profess to describe<br />
(Exch.1841), which we discuss, supra, at<br />
mechanisms and complicated machinery, chemical<br />
compositions and other manufactured products,<br />
which have their existence in pais, outside of the<br />
1392, and, whether or not he agreed with<br />
Neilson, he stated, “[b]ut I do not proceed<br />
upon this ground.” 29 F. Cas., at 325.<br />
documents themselves; and which are commonly<br />
described by terms of the art or mystery to which *387 If the line drawn in these two opinions is a fine<br />
they respectively belong; and these *386 one, it is one that the Court has drawn repeatedly in<br />
descriptions and terms of art often require peculiar explaining the respective roles of the jury and judge<br />
knowledge and education to understand them in patent cases, FN13 and one understood by<br />
aright.... Indeed, the **1394 whole subject-matter of<br />
a patent is an embodied conception outside of the<br />
commentators writing in the aftermath of the cases<br />
Markman cites. Walker, for example, read Bischoff<br />
patent itself.... This outward embodiment of the as holding that the question of novelty is not decided<br />
terms contained in the patent is the thing invented,<br />
and is to be properly sought, like the explanation of<br />
all latent ambiguities arising from the description of<br />
external things, by evidence in pais.” Ibid.<br />
by a construction of the prior patent, “but depends<br />
rather upon the outward embodiment of the terms<br />
contained in the [prior patent]; and that such outward<br />
embodiment is to be properly sought, like the<br />
explanation of latent ambiguities arising from the<br />
description of external things, by evidence in pais.”<br />
Bischoff does not then, as Markman contends, hold<br />
that the use of expert testimony about the meaning of<br />
terms of art requires the judge to submit the question<br />
of their construction to the jury. It is instead a case<br />
A. Walker, <strong>Patent</strong> Laws § 75, p. 68 (3d ed. 1895).<br />
He also emphasized in the same treatise that matters<br />
of claim construction, even those aided by expert<br />
testimony, are questions for the court:<br />
in which the Court drew a line between issues of<br />
document interpretation and product identification,<br />
and held that expert testimony was properly<br />
presented to the jury on the latter, ultimate issue,<br />
whether the physical objects produced by the patent<br />
FN13. See, e.g., Coupe v. Royer, 155 U.S.<br />
565, 579-580, 15 S.Ct. 199, 205, 39 L.Ed.<br />
263 (1895); Silsby v. Foote, 14 How. 218,<br />
were identical. The Court did not see the decision as<br />
226, 14 L.Ed. 391 (1853); Hogg v.<br />
bearing upon the appropriate treatment of disputed<br />
terms. As the opinion emphasized, the Court's “view<br />
of the case is not intended to, and does not, trench<br />
upon the doctrine that the construction of written<br />
instruments is the province of the court alone. It is<br />
not the construction of the instrument, but the<br />
character of the thing invented, which is sought in<br />
questions of identity and diversity of inventions.” Id.,<br />
Emerson, 6 How. 437, 484, 12 L.Ed. 505<br />
(1848); cf. Brown v. Piper, 91 U.S. 37, 41,<br />
23 L.Ed. 200 (1875); Winans v. New York<br />
& Erie R. Co., 21 How. 88, 100, 16 L.Ed. 68<br />
(1859); cf. also U.S. Industrial Chemicals,<br />
Inc. v. Carbide & Carbon Chemicals Corp.,<br />
315 U.S. 668, 678, 62 S.Ct. 839, 844, 86<br />
L.Ed. 1105 (1942).<br />
at 816 (emphasis added). Tucker, the second case<br />
proffered by Markman, is to the same effect. Its “Questions of construction are questions of law for<br />
reasoning rested expressly on Bischoff, and it just as the judge, not questions of fact for the jury. As it<br />
clearly noted that in addressing the ultimate issue of<br />
mixed fact and law, it was for the court to “lay down<br />
to the jury the law which should govern them.”<br />
cannot be expected, however, that judges will always<br />
possess the requisite knowledge of the meaning of<br />
the terms of art or science used in letters patent, it<br />
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1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
themselves of the light furnished by experts relevant<br />
to the significance of such words and phrases. The<br />
judges are not, however, obliged to blindly follow<br />
such testimony.” Id., § 189, at 173 (footnotes<br />
omitted).<br />
Virtually the same description of the court's use of<br />
evidence in its interpretive role was set out in another<br />
contemporary treatise:<br />
*388 “The duty of interpreting letters-patent has<br />
been committed to the courts. A patent is a legal<br />
instrument, to be construed, like other legal<br />
instruments, according to its tenor.... Where<br />
technical terms are used, or where the qualities of<br />
substances or operations mentioned or any similar<br />
data necessary to the comprehension of the language<br />
of the patent are unknown to the judge, the testimony<br />
of **1395 witnesses may be received upon these<br />
subjects, and any other means of information be<br />
employed. But in the actual interpretation of the<br />
patent the court proceeds upon its own responsibility,<br />
as an arbiter of the law, giving to the patent its true<br />
and final character and force.” 2 W. Robinson, Law<br />
of <strong>Patent</strong>s § 732, pp. 481-483 (1890) (emphasis<br />
added; footnotes omitted).<br />
In sum, neither Bischoff nor Tucker indicates that<br />
juries resolved the meaning of terms of art in<br />
construing a patent, and neither case undercuts<br />
Justice Curtis's authority.<br />
B<br />
Where history and precedent provide no clear<br />
answers, functional considerations also play their part<br />
in the choice between judge and jury to define terms<br />
of art. We said in Miller v. Fenton, 474 U.S. 104,<br />
114, 106 S.Ct. 445, 451, 88 L.Ed.2d 405 (1985), that<br />
when an issue “falls somewhere between a pristine<br />
legal standard and a simple historical fact, the<br />
fact/law distinction at times has turned on a<br />
determination that, as a matter of the sound<br />
administration of justice, one judicial actor is better<br />
positioned than another to decide the issue in<br />
question.” So it turns out here, for judges, not juries,<br />
are the better suited to find the acquired meaning of<br />
patent terms.<br />
[11] The construction of written instruments is one of<br />
those things that judges often do and are likely to do<br />
better than jurors unburdened by training in exegesis.<br />
<strong>Patent</strong> construction in particular “is a special<br />
occupation, requiring, like all others, special training<br />
and practice. The judge, from his training and<br />
discipline, is more likely to give a proper *389<br />
interpretation to such instruments than a jury; and he<br />
is, therefore, more likely to be right, in performing<br />
such a duty, than a jury can be expected to be.”<br />
Parker v. Hulme, 18 F. Cas., at 1140. Such was the<br />
understanding nearly a century and a half ago, and<br />
there is no reason to weigh the respective strengths of<br />
judge and jury differently in relation to the modern<br />
claim; quite the contrary, for “the claims of patents<br />
have become highly technical in many respects as the<br />
result of special doctrines relating to the proper form<br />
and scope of claims that have been developed by the<br />
courts and the <strong>Patent</strong> Office.” Woodward,<br />
Definiteness and Particularity in <strong>Patent</strong> Claims, 46<br />
Mich. L.Rev. 755, 765 (1948).<br />
[12] Markman would trump these considerations with<br />
his argument that a jury should decide a question of<br />
meaning peculiar to a trade or profession simply<br />
because the question is a subject of testimony<br />
requiring credibility determinations, which are the<br />
jury's forte. It is, of course, true that credibility<br />
judgments have to be made about the experts who<br />
testify in patent cases, and in theory there could be a<br />
case in which a simple credibility judgment would<br />
suffice to choose between experts whose testimony<br />
was equally consistent with a patent's internal logic.<br />
But our own experience with document construction<br />
leaves us doubtful that trial courts will run into many<br />
cases like that. In the main, we expect, any<br />
credibility determinations will be subsumed within<br />
the necessarily sophisticated analysis of the whole<br />
document, required by the standard construction rule<br />
that a term can be defined only in a way that<br />
comports with the instrument as a whole. See Bates<br />
v. Coe, 98 U.S. 31, 38, 25 L.Ed. 68 (1878); 6<br />
Lipscomb § 21:40, at 393; 2 Robinson, supra, §<br />
734, at 484; Woodward, supra, at 765; cf. U.S.<br />
Industrial Chemicals, Inc. v. Carbide & Carbon<br />
Chemicals Corp., 315 U.S. 668, 678, 62 S.Ct. 839,<br />
844, 86 L.Ed. 1105 (1942); cf. 6 Lipscomb § 21:40,<br />
at 393. Thus, in these cases a jury's capabilities to<br />
evaluate demeanor, cf. Miller, supra, at 114, 117, 106<br />
S.Ct., at 451, 453, to sense the “mainsprings of<br />
human conduct,” Commissioner v. Duberstein, 363<br />
U.S. 278, 289, 80 S.Ct. 1190, 1198, 4 L.Ed.2d 1218<br />
(1960), or to reflect community *390 standards,<br />
United States v. McConney, 728 F.2d 1195, 1204<br />
(C.A.9 1984) (en banc), are much less significant<br />
than a trained ability to evaluate the testimony in<br />
relation to the overall structure of the patent. The<br />
decisionmaker vested with the task of construing the<br />
patent is in the better position to ascertain whether an<br />
expert's proposed definition fully comports with the<br />
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517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
specification and claims and so will preserve the<br />
patent's internal coherence. We accordingly think<br />
there is sufficient reason to treat construction of<br />
terms of art like **1396 many other responsibilities<br />
that we cede to a judge in the normal course of trial,<br />
notwithstanding its evidentiary underpinnings.<br />
C<br />
[13] Finally, we see the importance of uniformity in<br />
the treatment of a given patent as an independent<br />
reason to allocate all issues of construction to the<br />
court. As we noted in General Elec. Co. v. Wabash<br />
Appliance Corp., 304 U.S. 364, 369, 58 S.Ct. 899,<br />
902, 82 L.Ed. 1402 (1938), “[t]he limits of a patent<br />
must be known for the protection of the patentee, the<br />
encouragement of the inventive genius of others and<br />
the assurance that the subject of the patent will be<br />
dedicated ultimately to the public.” Otherwise, a<br />
“zone of uncertainty which enterprise and<br />
experimentation may enter only at the risk of<br />
infringement claims would discourage invention only<br />
a little less than unequivocal foreclosure of the field,”<br />
United Carbon Co. v. Binney & Smith Co., 317 U.S.<br />
228, 236, 63 S.Ct. 165, 170, 87 L.Ed. 232 (1942), and<br />
“[t]he public [would] be deprived of rights supposed<br />
to belong to it, without being clearly told what it is<br />
that limits these rights.” Merrill v. Yeomans, 94 U.S.<br />
568, 573, 24 L.Ed. 235 (1877). It was just for the<br />
sake of such desirable uniformity that Congress<br />
created the Court of Appeals for the Federal Circuit<br />
as an exclusive appellate court for patent cases,<br />
H.R.Rep. No. 97-312, pp. 20-23 (1981), observing<br />
that increased uniformity would “strengthen the<br />
United States patent system in such a way as to foster<br />
technological growth and industrial innovation.” Id.,<br />
at 20.<br />
*391 Uniformity would, however, be ill served by<br />
submitting issues of document construction to juries.<br />
Making them jury issues would not, to be sure,<br />
necessarily leave evidentiary questions of meaning<br />
wide open in every new court in which a patent might<br />
be litigated, for principles of issue preclusion would<br />
ordinarily foster uniformity. Cf. Blonder-Tongue<br />
Laboratories, Inc. v. University of Ill. Foundation,<br />
402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971).<br />
But whereas issue preclusion could not be asserted<br />
against new and independent infringement defendants<br />
even within a given jurisdiction, treating interpretive<br />
issues as purely legal will promote (though it will not<br />
guarantee) intrajurisdictional certainty through the<br />
application of stare decisis on those questions not yet<br />
subject to interjurisdictional uniformity under the<br />
authority of the single appeals court.<br />
* * *<br />
Accordingly, we hold that the interpretation of the<br />
word “inventory” in this case is an issue for the<br />
judge, not the jury, and affirm the decision of the<br />
Court of Appeals for the Federal Circuit.<br />
It is so ordered.<br />
U.S.Pa.,1996.<br />
Markman v. Westview Instruments, Inc.<br />
517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96<br />
Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38<br />
U.S.P.Q.2d 1461, 96 Daily Journal D.A.R. 4642<br />
Briefs and Other Related Documents (Back to top)<br />
• 1996 WL 12585 (Oral Argument) Oral Argument<br />
(Jan. 08, 1996)<br />
• 1995 WL 763711 (Appellate Brief) REPLY BRIEF<br />
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• 1995 WL 728482 (Appellate Brief) BRIEF<br />
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• 1995 WL 728493 (Appellate Brief) AMICUS<br />
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• 1995 WL 728494 (Appellate Brief) BRIEF OF<br />
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• 1995 WL 728496 (Appellate Brief) BRIEF OF<br />
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• 1995 WL 728537 (Appellate Brief) BRIEF ON<br />
BEHALF OF THE AMERICAN AUTOMOBILE<br />
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AMICUS CURIAE IN SUPPORT OF THE<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
116 S.Ct. 1384 Page 14<br />
517 U.S. 370, 116 S.Ct. 1384, 64 USLW 4263, 96 Cal. Daily Op. Serv. 2788, 134 L.Ed.2d 577, 38 U.S.P.Q.2d<br />
1461, 96 Daily Journal D.A.R. 4642<br />
(Cite as: 517 U.S. 370, 116 S.Ct. 1384)<br />
RESPONDENTS (Dec. 08, 1995)<br />
• 1995 WL 728554 (Appellate Brief) BRIEF OF<br />
MATSUSHITA ELECTRIC CORPORATION OF<br />
AMERICA AND MATSUSHITA ELECTRIC<br />
INDUSTRIAL CO., LTD. AS AMICI CURIAE IN<br />
SUPPORT OF RESPONDENTS (Dec. 08, 1995)<br />
• 1995 WL 728575 (Appellate Brief) BRIEF OF THE<br />
DALLAS-FORT WORTH INTELLECTUAL<br />
PROPERTY LAW ASSOCIATION AS AMICUS<br />
CURIAE URGING AFFIRMANCE (Dec. 08, 1995)<br />
• 1995 WL 730381 (Appellate Brief) BRIEF OF<br />
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• 1995 WL 723674 (Appellate Brief) BRIEF FOR<br />
AMICUS CURIA, JOHN T. ROBERTS<br />
SUGGESTING AFFIRMANCE OF JUDGEMENT<br />
(Dec. 07, 1995)<br />
• 1995 WL 668008 (Appellate Brief) BRIEF FOR<br />
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• 1995 WL 702813 (Appellate Brief) BRIEF FOR<br />
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ENGINEERING COMPANY AS AMICI CURIAE<br />
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• 1995 WL 17063340 (Appellate Petition, Motion<br />
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END OF DOCUMENT<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
415 F.3d 1303 Page 1<br />
415 F.3d 1303, 75 U.S.P.Q.2d 1321<br />
(Cite as: 415 F.3d 1303)<br />
Briefs and Other Related Documents<br />
United States Court of Appeals,Federal Circuit.<br />
Edward H. PHILLIPS, Plaintiff-Appellant,<br />
v.<br />
AWH CORPORATION, Hopeman Brothers, Inc.,<br />
and Lofton Corporation, Defendants-Cross<br />
Appellants.<br />
Nos. 03-1269, 03-1286.<br />
July 12, 2005.<br />
Background: Owner of patent for vandalismresistant<br />
wall panels sued former distributor for<br />
infringement. The United States District Court for the<br />
District of Colorado, Marcia S. Krieger, J., granted<br />
summary judgment for former distributor, and owner<br />
appealed. The Court of Appeals, 363 F.3d 1207,<br />
affirmed.<br />
Holding: On rehearing en banc, the Court of<br />
Appeals, Bryson, Circuit Judge, held that “baffles,”<br />
called for in asserted claim, were not limited to nonperpendicular,<br />
projectile-deflecting structures<br />
disclosed in preferred embodiment.<br />
Affirmed in part, reversed in part, dismissed in part,<br />
and remanded.<br />
Lourie, Circuit Judge, concurred in part, dissenting in<br />
part, and filed opinion in which <strong>Paul</strong>ine Newman,<br />
Circuit Judge, joined.<br />
Mayer, Circuit Judge, dissented and filed opinion in<br />
which <strong>Paul</strong>ine Newman, Circuit Judge, joined.<br />
West Headnotes<br />
[1] <strong>Patent</strong>s 291 101(8)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(8) k. Functions, Advantages or<br />
Results of Invention. Most Cited Cases<br />
Limitation in patent claim for vandalism-resistant<br />
wall, calling for “means disposed inside shell for<br />
increasing its load bearing capacity” comprising<br />
“internal steel baffles” extending inwardly from steel<br />
shell walls, recited sufficient structure to avoid<br />
means-plus-function treatment. 35 U.S.C.A. § 112,<br />
par. 6.<br />
[2] <strong>Patent</strong>s 291 165(2)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k165 Operation and Effect of Claims in<br />
General<br />
291k165(2) k. Claims as Measure of<br />
<strong>Patent</strong>ee's Rights. Most Cited Cases<br />
It is bedrock principle of patent law that claims of<br />
patent define invention to which patentee is entitled<br />
the right to exclude.<br />
[3] <strong>Patent</strong>s 291 157(1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k157 General Rules of Construction<br />
291k157(1) k. In General. Most Cited<br />
Cases<br />
<strong>Patent</strong>s 291 161<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k161 k. State of the Art. Most Cited<br />
Cases<br />
Words of patent claim are generally given their<br />
ordinary and customary meaning, i.e., meaning that<br />
term would have to person of ordinary skill in the art<br />
in question on effective filing date of patent<br />
application.<br />
[4] <strong>Patent</strong>s 291 161<br />
291 <strong>Patent</strong>s<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
415 F.3d 1303 Page 2<br />
415 F.3d 1303, 75 U.S.P.Q.2d 1321<br />
(Cite as: 415 F.3d 1303)<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k161 k. State of the Art. Most Cited<br />
Cases<br />
<strong>Patent</strong>s 291 167(1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k167 Specifications, Drawings, and<br />
Models<br />
291k167(1) k. In General. Most Cited<br />
Cases<br />
Person of ordinary skill in the art, through whose<br />
eyes patent claim is construed, is deemed to read<br />
claim term not only in context of particular claim in<br />
which disputed term appears, but in context of entire<br />
patent, including specification.<br />
[5] <strong>Patent</strong>s 291 165(5)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k165 Operation and Effect of Claims in<br />
General<br />
291k165(5) k. Construction of Particular<br />
Claims as Affected by Other Claims. Most Cited<br />
Cases<br />
Because claim terms are normally used consistently<br />
throughout patent, usage of term in one claim can<br />
often illuminate meaning of same term in other<br />
claims.<br />
[6] <strong>Patent</strong>s 291 165(5)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k165 Operation and Effect of Claims in<br />
General<br />
291k165(5) k. Construction of Particular<br />
Claims as Affected by Other Claims. Most Cited<br />
Cases<br />
Presence of dependent patent claim that adds<br />
particular limitation gives rise to presumption that<br />
limitation in question is not present in independent<br />
claim.<br />
[7] <strong>Patent</strong>s 291 101(4)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(4) k. Specifications and Drawings,<br />
Construction With. Most Cited Cases<br />
<strong>Patent</strong> claims must be read in view of specification,<br />
of which they are part.<br />
[8] <strong>Patent</strong>s 291 167(1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k167 Specifications, Drawings, and<br />
Models<br />
291k167(1) k. In General. Most Cited<br />
Cases<br />
<strong>Patent</strong> specification is always highly relevant to claim<br />
construction analysis; it is single best guide to<br />
meaning of disputed term, and is usually dispositive.<br />
[9] <strong>Patent</strong>s 291 162<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k162 k. Contemporaneous Construction<br />
of Inventor. Most Cited Cases<br />
<strong>Patent</strong>s 291 167(1.1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k167 Specifications, Drawings, and<br />
Models<br />
291k167(1.1) k. Specification as<br />
Limiting or Enlarging Claims. Most Cited Cases<br />
When patent specification reveals special definition<br />
given to claim term by patentee that differs from<br />
meaning it would otherwise possess, inventor's<br />
lexicography governs.<br />
[10] <strong>Patent</strong>s 291 167(1.1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
415 F.3d 1303 Page 3<br />
415 F.3d 1303, 75 U.S.P.Q.2d 1321<br />
(Cite as: 415 F.3d 1303)<br />
291k167 Specifications, Drawings, and<br />
Models<br />
291k167(1.1) k. Specification as<br />
Limiting or Enlarging Claims. Most Cited Cases<br />
Where patent specification reveals intentional<br />
disclaimer, or disavowal, of claim scope by inventor,<br />
such revealed intention is dispositive.<br />
[11] <strong>Patent</strong>s 291 168(1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k168 Proceedings in <strong>Patent</strong> Office in<br />
General<br />
291k168(1) k. In General. Most Cited<br />
Cases<br />
“Prosecution history” consists of complete record of<br />
proceedings before <strong>Patent</strong> and Trademark Office and<br />
includes prior art cited during examination of patent.<br />
[12] <strong>Patent</strong>s 291 168(2.1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k168 Proceedings in <strong>Patent</strong> Office in<br />
General<br />
291k168(2) Rejection and Amendment<br />
of Claims<br />
291k168(2.1) k. In General. Most<br />
Cited Cases<br />
Prosecution history can often inform meaning of<br />
patent claim language by demonstrating how inventor<br />
understood invention and whether inventor limited<br />
invention in course of prosecution, making claim<br />
scope narrower than it would otherwise be.<br />
[13] <strong>Patent</strong>s 291 159<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k159 k. Extrinsic Evidence in General.<br />
Most Cited Cases<br />
Although extrinsic evidence can shed useful light on<br />
relevant art, it is less significant than intrinsic record<br />
in determining legally operative meaning of patent<br />
claim language.<br />
[14] <strong>Patent</strong>s 291 159<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k159 k. Extrinsic Evidence in General.<br />
Most Cited Cases<br />
Dictionaries, though extrinsic evidence, are among<br />
tools that can assist patent-construing court in<br />
determining meaning of particular terminology to<br />
those of skill in the art of invention.<br />
[15] <strong>Patent</strong>s 291 159<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k159 k. Extrinsic Evidence in General.<br />
Most Cited Cases<br />
Extrinsic evidence in form of expert testimony can be<br />
useful to patent-construing court for variety of<br />
purposes, such as to provide background on<br />
technology at issue, to explain how invention works,<br />
to ensure that court's understanding of technical<br />
aspects of patent is consistent with that of person of<br />
skill in the art, or to establish that particular term in<br />
patent or prior art has particular meaning in pertinent<br />
field.<br />
[16] <strong>Patent</strong>s 291 159<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k159 k. Extrinsic Evidence in General.<br />
Most Cited Cases<br />
Conclusory, unsupported assertions by experts as to<br />
definition of patent claim term are not useful to<br />
construing court.<br />
[17] <strong>Patent</strong>s 291 159<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k159 k. Extrinsic Evidence in General.<br />
Most Cited Cases<br />
Court, when construing patent, should discount any<br />
expert testimony that is clearly at odds with claim<br />
construction mandated by claims themselves, written<br />
description, and prosecution history.<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
415 F.3d 1303 Page 4<br />
415 F.3d 1303, 75 U.S.P.Q.2d 1321<br />
(Cite as: 415 F.3d 1303)<br />
[18] <strong>Patent</strong>s 291 159<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k159 k. Extrinsic Evidence in General.<br />
Most Cited Cases<br />
Extrinsic evidence may be useful to construing court,<br />
but it is unlikely to result in reliable interpretation of<br />
patent claim scope unless considered in context of<br />
intrinsic evidence.<br />
[19] <strong>Patent</strong>s 291 159<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k159 k. Extrinsic Evidence in General.<br />
Most Cited Cases<br />
It is permissible for patent-construing court, in its<br />
sound discretion, to admit and use extrinsic evidence;<br />
such evidence can help educate court regarding field<br />
of invention and can help court determine what<br />
person of ordinary skill in the art would understand<br />
claim terms to mean.<br />
[20] <strong>Patent</strong>s 291 159<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k159 k. Extrinsic Evidence in General.<br />
Most Cited Cases<br />
Although dictionaries or comparable sources are<br />
often useful to assist in understanding commonly<br />
understood meaning of patent claim terms, construing<br />
court's focus remains on understanding how person of<br />
ordinary skill in the art would understand claim<br />
terms.<br />
[21] <strong>Patent</strong>s 291 157(1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k157 General Rules of Construction<br />
291k157(1) k. In General. Most Cited<br />
Cases<br />
There is no magic formula or catechism for<br />
conducting patent claim construction; court is not<br />
barred from considering any particular sources or<br />
required to analyze sources in any specific sequence,<br />
so long as those sources are not used to contradict<br />
claim meaning that is unambiguous in light of<br />
intrinsic evidence.<br />
[22] <strong>Patent</strong>s 291 101(3)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(3) k. Limitations in General. Most<br />
Cited Cases<br />
Internal steel “baffles,” called for in patent for<br />
vandalism-resistant wall panels, were not limited to<br />
non-perpendicular, projectile-deflecting structures<br />
disclosed in preferred embodiment; specification did<br />
not require that internal structures always be capable<br />
of performing that function.<br />
[23] <strong>Patent</strong>s 291 101(3)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(3) k. Limitations in General. Most<br />
Cited Cases<br />
Fact that patent asserts that invention achieves<br />
several objectives does not require that each claim be<br />
construed as limited to structures that are capable of<br />
achieving all those objectives.<br />
[24] <strong>Patent</strong>s 291 157(2)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(A) In General<br />
291k157 General Rules of Construction<br />
291k157(2) k. Construction to Give<br />
Validity and Effect to <strong>Patent</strong>. Most Cited Cases<br />
Application of patent construction maxim, that claims<br />
should be so construed, if possible, as to sustain their<br />
validity, is limited to cases in which court concludes,<br />
after applying all available tools of claim<br />
construction, that claim is still ambiguous.<br />
<strong>Patent</strong>s 291 328(2)<br />
291 <strong>Patent</strong>s<br />
291XIII Decisions on the Validity, Construction,<br />
and Infringement of Particular <strong>Patent</strong>s<br />
291k328 <strong>Patent</strong>s Enumerated<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
415 F.3d 1303 Page 5<br />
415 F.3d 1303, 75 U.S.P.Q.2d 1321<br />
(Cite as: 415 F.3d 1303)<br />
291k328(2) k. Original Utility. Most Cited<br />
Cases<br />
4,677,798. Construed.<br />
*1305 Carl F. Manthei, Attorney at Law, of Boulder,<br />
Colorado, argued for plaintiff-appellant.<br />
Mark W. Fischer, Faegre & Benson LLP, of Boulder,<br />
Colorado, argued for defendants-cross appellants.<br />
With him on the brief were Neal S. Cohen and Peter<br />
J. Kinsella. Of counsel on the brief were Maurice<br />
M. Klee, Law Office of Maurice M. Klee, Ph.D.,<br />
Fairfield, Connecticut, and Kenneth C. Bass, III,<br />
Sterne, Kessler, Goldstein & Fox, of Washington,<br />
DC. Of counsel was Scott E. Holwick, Faegre &<br />
Benson LLP.<br />
*1306 John M. Whealan, Solicitor, United States<br />
<strong>Patent</strong> and Trademark Office, of Alexandria,<br />
Virginia, argued for amicus curiae United States.<br />
With him on the brief were James A. Toupin, General<br />
Counsel; Cynthia C. Lynch; Linda Moncys Isacson;<br />
and Thomas W. Krause, Associate Solicitors. Of<br />
counsel on the brief were Peter D. Keisler, Assistant<br />
Attorney General; John J. Fargo, Director,<br />
Commercial <strong>Litigation</strong> Branch, and Anthony J.<br />
Steinmeyer, Attorney, Appellate Staff, Civil<br />
Division, United States Department of Justice, of<br />
Washington, DC; and William E. Kovacic, General<br />
Counsel, and Suzanne T. Michel, Chief Counsel for<br />
Intellectual Property, Federal Trade Commission, of<br />
Washington, DC.<br />
Robert L. Baechtold, Fitzpatrick, Cella, Harper &<br />
Scinto, of New York, New York, for amici curiae<br />
Novartis Pharmaceuticals Corporation, et al. With<br />
him on the brief were Nicholas N. Kallas, Stevan J.<br />
Bosses, and Brian V. Slater.<br />
<strong>Paul</strong> H. Berghoff, McDonnell Boehnen Hulbert &<br />
Berghoff LLP, of Chicago, Illinois, for amicus curiae<br />
Intellectual Property Owners Association. With him<br />
on the brief was Joshua R. Rich. Of counsel on the<br />
brief was J. Jeffery Hawley, President, Intellectual<br />
Property Owners Association, of Washington, DC.<br />
Of counsel was Herbert C. Wamsley, Intellectual<br />
Property Owners Association.<br />
Charles W. Bradley, Rader, Fishman & Grauer,<br />
PLLC, of Bloomfield Hills, Michigan, for amicus<br />
curiae Charles W. Bradley.<br />
Henry C. Bunsow, Howrey Simon Arnold & White,<br />
LLP, of San Francisco, California, for amicus curiae<br />
AD HOC Committee of <strong>Patent</strong> Owners in the<br />
Wireless Industry. With him on the brief were<br />
Robert C. Laurenson and David W. Long. Of counsel<br />
on the brief were Robert D. Yeager, Thomas J.<br />
Edgington, and Mark G. Knedeisen, Kirkpatrick &<br />
Lockhart LLP, of Pittsburgh, Pennsylvania.<br />
Alexander C. Johnson, Jr., Marger, Johnson &<br />
McCollom, P.C., of Portland, Oregon, for amicus<br />
curiae Oregon <strong>Patent</strong> Law Association.<br />
Alice A. Kipel, Steptoe & Johnson, LLP, of<br />
Washington, DC, for amicus curiae International<br />
Trade Commission Trial Lawyers Association.<br />
Stephen P. McNamara, St. Onge Steward Johnston &<br />
Reens LLC, of Stamford, Connecticut, for amicus<br />
curiae Connecticut Intellectual Property Law<br />
Association. With him on the brief was Richard J.<br />
Basile. Of counsel on the brief were William J.<br />
Sapone, Coleman Sudol Sapone, P.C., of Bridgeport,<br />
Connecticut, Michael J. Rye, Cantor Colburn LLP, of<br />
Bloomfield, Connecticut.<br />
Douglas E. Olson, <strong>Paul</strong>, Hastings, Janofsky &<br />
Walker, LLP, of San Diego, California, for amicus<br />
curiae San Diego Intellectual Property Law<br />
Association. With him on the brief were Kurt M.<br />
Kjelland, John E. Peterson, and April M. Alex. Of<br />
counsel on the brief were Ned A. Israelsen, Knobbe<br />
Martens Olson & Bear, LLP, of San Diego,<br />
California, and William L. Respess, Nanogen, Inc., of<br />
San Diego, California.<br />
John Will Ongman, Barnes & Thornburg LLP, of<br />
Washington, DC, for amicus curiae Biotechnology<br />
Industry Organization. With him on the brief was<br />
Alice O. Martin, of Chicago, Illinois. Of counsel on<br />
the brief was Stephan E. Lawton, Vice President and<br />
General Counsel, Biotechnology Industry<br />
Organization, of Washington, DC.<br />
Steve Z. Szczepanski, Kelley Drye & Warren LLP, of<br />
Chicago, Illinois, for amicus curiae Parus Holdings,<br />
Inc. With him on the brief was Mary Jo Boldingh.<br />
*1307 Frederick A. Tecce, McShea Tecce, P.C., of<br />
Philadelphia, Pennsylvania, for amici curiae McShea<br />
Tecce, P.C., et al.<br />
Michael P. Dougherty, Morgan & Finnegan, L.L.P.,<br />
of New York, New York, for amicus curiae Federal<br />
Circuit Bar Association. Of counsel on the brief was<br />
Charles F. Schill, President, Federal Circuit Bar<br />
Association, of Washington, DC.<br />
Edward D. Manzo, Cook, Alex, McFarron, Manzo,<br />
Cummings & Mehler, Ltd., of Chicago, Illinois, for<br />
amicus curiae The Intellectual Property Law<br />
Association of Chicago. Of counsel with him on the<br />
brief were Patrick G. Burns, Greer, Burns & Crain,<br />
Ltd., of Chicago, Illinois, Dean A. Monco, Wood,<br />
Phillips, Katz, Clark & Mortimer, of Chicago,<br />
Illinois, Bradford P. Lyerla, Marshall, Gerstein &<br />
Borun, of Chicago, Illinois, and Timothy J. Vezeau,<br />
Katten Muchin Zavis Rosenman, of Chicago, Illinois.<br />
Maxim H. Waldbaum, Schiff Hardin LLP, of New<br />
York, New York, for amicus curiae Federation<br />
Internationale Des Conseils En Propriete Industrielle.<br />
Of counsel on the brief was John P. Sutton, of San<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
415 F.3d 1303 Page 6<br />
415 F.3d 1303, 75 U.S.P.Q.2d 1321<br />
(Cite as: 415 F.3d 1303)<br />
Francisco, California.<br />
Michael R. Dzwonczyk, Sughrue Mion, PLLC, of<br />
Washington, DC, for amicus curiae Sughrue Mion,<br />
PLLC. With him on the brief were Frank L. Bernstein<br />
of Mountain View, California, and Brandon M.<br />
White of Washington, DC.<br />
Sharon A. Israel, Jenkens & Gilchrist, P.C., of<br />
Houston, Texas, for amicus curiae Houston<br />
Intellectual Property Law Association. Of counsel<br />
on the brief were Jeremy P. Welch, Jonathan M.<br />
Pierce, and Jeffrey L. Johnson, Conley Rose, P.C., of<br />
Houston, Texas.<br />
George C. Summerfield, Jr., Stadheim & Grear, of<br />
Chicago, Illinois, for amici curiae The Wisconsin<br />
Alumni Research Foundation, et al. With him on the<br />
brief were Joseph A. Grear and Keith A. Vogt.<br />
Bruce M. Wexler, Fitzpatrick, Cella, Harper &<br />
Scinto, of New York, New York, for amicus curiae<br />
New York Intellectual Property Law Association.<br />
With him on the brief were Matthew S. Seidner and<br />
John D. Murnane.<br />
Rick D. Nydegger, Workman Nydegger, of Salt Lake<br />
City, Utah, for amicus curiae American Intellectual<br />
Property Law Association. With him on the brief<br />
was David R. Todd. Of counsel on the brief were<br />
Denise W. DeFranco, Foley Hoag LLP, of Boston,<br />
Massachusetts, and Joseph R. Re and Joseph S.<br />
Cianfrani, Knobbe Martens Olson & Bear, of Irvine,<br />
California.<br />
Christopher Landau, Kirkland & Ellis LLP, of<br />
Washington, DC, for amicus curiae Infineon<br />
Technologies North America Corp. With him on the<br />
brief were John C. O'Quinn, of Washington, DC, and<br />
John M. Desmarais, Gregory S. Arovas, and Michael<br />
P. Stadnick, of New York, New York.<br />
Mark I. Levy, Kilpatrick Stockton, LLP, of<br />
Washington, DC, for amicus curiae Association of<br />
Corporate Counsel. With him on the brief were<br />
Anthony B. Askew and Eugene B. Joswick, of<br />
Atlanta, Georgia. Of counsel on the brief were<br />
Frederick J. Krebs and Susan Hackett of Washington,<br />
DC, Nelson A. Blish, Eastman Kodak, of Rochester,<br />
New York, John W. Hogan, Jr., Wyeth, of Madison,<br />
New Jersey, and Taraneh Maghame, Hewlett<br />
Packard, of Cupertino, California.<br />
Mark A. Lemley, Keker & VanNest, LLP, of San<br />
Francisco, California, for amici curiae Intel<br />
Corporation, et al. With him on the brief were Brian<br />
L. Ferrall and Ryan M. Kent.<br />
Erik <strong>Paul</strong> Belt, Bromberg and Sunstein LLP, of<br />
Boston, Massachusetts, for amicus curiae Boston<br />
<strong>Patent</strong> Law Association. Of *1308 counsel on the<br />
brief was Peter Corless, Edwards and Angell LLP, of<br />
Boston, Massachusetts.<br />
Susan M. Dadio, Burns, Doane, Swecker & Mathis,<br />
L.L.P., of Alexandria, Virginia, for amicus curiae Bar<br />
Association of the District of Columbia-<strong>Patent</strong>,<br />
Trademark & Copyright Section. Of counsel on the<br />
brief was Lynn E. Eccleston, The Eccleston Law<br />
Firm, of Washington, DC.<br />
W. Thomas McGough, Jr., Reed Smith LLP, of<br />
Pittsburgh, Pennsylvania, for amicus curiae Medrad,<br />
Inc. With him on the brief were Frederick H. Colen<br />
and Barry J. Coyne. Of counsel on the brief was<br />
Gregory L. Bradley, Medrad, Inc., of Indianola,<br />
Pennsylvania.<br />
Peter A. Sullivan, Hughes Hubbard & Reed LLP, of<br />
New York, New York, for amicus curiae The<br />
Association of the Bar of the City of New York. Of<br />
counsel on the brief was Catriona M. Collins, Cowan,<br />
Liebowitz & Latman, P.C., of New York, New York.<br />
Anthony R. Zeuli, Merchant & Gould P.C., of<br />
Minneapolis, Minnesota, for amicus curiae<br />
Association of <strong>Patent</strong> Law Firms. With him on the<br />
brief were Thomas J. Leach, III and Rachel Clark-<br />
Hughey. Of counsel on the brief were Scott P.<br />
McBride and Christopher R. Carroll, McAndrews,<br />
Held & Malloy Ltd., of Chicago, Illinois, and Eric R.<br />
Moran, McDonnell, Boehnen, Hulbert & Berghoff<br />
LLP, of Chicago, Illinois.<br />
Daniel B. Ravicher, Public <strong>Patent</strong> Foundation, of<br />
New York, New York, for amicus curiae Public<br />
<strong>Patent</strong> Foundation.<br />
Theodore T. Herhold, Townsend and Townsend and<br />
Crew LLP, of Palo Alto, California, for amici curiae<br />
VISA U.S.A. Inc., et al. With him on the brief were<br />
Daniel J. Furniss, Susan M. Spaeth, Madison C.<br />
Jellins, and Mark G. Sandbaken.<br />
Mark A. Goldstein, SoCal IP Law Group, of<br />
Westlake Village, California, for amicus curiae<br />
Conejo Valley Bar Association. With him on the<br />
brief were Steven C. Sereboff and Joel G. Landau.<br />
Robert J. Grey, Jr., President, American Bar<br />
Association, of Chicago, Illinois, for amicus curiae<br />
American Bar Association. With him on the brief<br />
was William L. LaFuze. Of counsel on the brief<br />
were Donald R. Dunner and Richard L. Rainey,<br />
Finnegan, Henderson, Farabow, Garrett & Dunner,<br />
L.L.P., of Washington, DC.<br />
R. Polk Wagner, University of Pennsylvania Law<br />
School, of Philadelphia, Pennsylvania, for amicus<br />
curiae <strong>Patent</strong> Law Professors R. Polk Wagner, et al.<br />
Joshua D. Sarnoff, Washington College of Law,<br />
American University, of Washington, DC, for amici<br />
curiae Consumers Union, et al.<br />
Laura M. Slenzak, Siemens Corporation, of Auburn<br />
Hills, Michigan, for amicus curiae The State Bar of<br />
Michigan, Intellectual Property Law Section, joined<br />
in the brief of the New York Intellectual Property<br />
Law Association.<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
415 F.3d 1303 Page 7<br />
415 F.3d 1303, 75 U.S.P.Q.2d 1321<br />
(Cite as: 415 F.3d 1303)<br />
Lea Hall Speed, Baker, Donelson, Bearman &<br />
Caldwell, of Memphis, Tennessee, for amicus curiae<br />
Tennessee Bar Association, joined in the brief of the<br />
New York Intellectual Property Law Association.<br />
Before MICHEL, Chief Judge, NEWMAN, MAYER,<br />
LOURIE, CLEVENGER, RADER, SCHALL,<br />
BRYSON, GAJARSA, LINN, DYK, and PROST,<br />
Circuit Judges.<br />
Opinion for the court filed by Circuit Judge<br />
BRYSON, in which Chief Judge MICHEL and<br />
Circuit Judges CLEVENGER, RADER, SCHALL,<br />
GAJARSA, LINN, DYK, and PROST join; and in<br />
which Circuit Judge LOURIE joins with respect to<br />
parts I, II, III, V, and VI; *1309 and in which Circuit<br />
Judge PAULINE NEWMAN joins with respect to<br />
parts I, II, III, and V. Opinion concurring in part and<br />
dissenting in part filed by Circuit Judge LOURIE, in<br />
which Circuit Judge PAULINE NEWMAN joins.<br />
Dissenting opinion filed by Circuit Judge MAYER,<br />
in which Circuit Judge PAULINE NEWMAN<br />
joins.BRYSON, Circuit Judge.<br />
Edward H. Phillips invented modular, steel-shell<br />
panels that can be welded together to form<br />
vandalism-resistant walls. The panels are especially<br />
useful in building prisons because they are loadbearing<br />
and impact-resistant, while also insulating<br />
against fire and noise. Mr. Phillips obtained a patent<br />
on the invention, U.S. <strong>Patent</strong> No. 4,677,798 (“the<br />
'798 patent”), and he subsequently entered into an<br />
arrangement with AWH Corporation, Hopeman<br />
Brothers, Inc., and Lofton Corporation (collectively<br />
“AWH”) to market and sell the panels. That<br />
arrangement ended in 1990. In 1991, however, Mr.<br />
Phillips received a sales brochure from AWH that<br />
suggested to him that AWH was continuing to use his<br />
trade secrets and patented technology without his<br />
consent. In a series of letters in 1991 and 1992, Mr.<br />
Phillips accused AWH of patent infringement and<br />
trade secret misappropriation. Correspondence<br />
between the parties regarding the matter ceased after<br />
that time.<br />
In February 1997, Mr. Phillips brought suit in the<br />
United States District Court for the District of<br />
Colorado charging AWH with misappropriation of<br />
trade secrets and infringement of claims 1, 21, 22, 24,<br />
25, and 26 of the '798 patent. Phillips v. AWH Corp.,<br />
No. 97-N-212 (D.Colo.). The district court<br />
dismissed the trade secret misappropriation claim as<br />
barred by Colorado's three-year statute of limitations.<br />
With regard to the patent infringement issue, the<br />
district court focused on the language of claim 1,<br />
which recites “further means disposed inside the shell<br />
for increasing its load bearing capacity comprising<br />
internal steel baffles extending inwardly from the<br />
steel shell walls.” The court interpreted that<br />
language as “a means ... for performing a specified<br />
function,” subject to 35 U.S.C. § 112, paragraph 6,<br />
which provides that such a claim “shall be construed<br />
to cover the corresponding structure, material, or acts<br />
described in the specification and equivalents<br />
thereof.” Looking to the specification of the '798<br />
patent, the court noted that “every textual reference in<br />
the Specification and its diagrams show baffle<br />
deployment at an angle other than 90 to the wall<br />
faces” and that “placement of the baffles at such<br />
angles creates an intermediate interlocking, but not<br />
solid, internal barrier.” The district court therefore<br />
ruled that, for purposes of the '798 patent, a baffle<br />
must “extend inward from the steel shell walls at an<br />
oblique or acute angle to the wall face” and must<br />
form part of an interlocking barrier in the interior of<br />
the wall module. Because Mr. Phillips could not<br />
prove infringement under that claim construction, the<br />
district court granted summary judgment of<br />
noninfringement.<br />
Mr. Phillips appealed with respect to both the trade<br />
secret and patent infringement claims. A panel of<br />
this court affirmed on both issues. Phillips v. AWH<br />
Corp., 363 F.3d 1207 (Fed.Cir.2004). As to the<br />
trade secret claim, the panel unanimously upheld the<br />
district court's ruling that the claim was barred by the<br />
applicable statute of limitations. Id. at 1215. As to<br />
the patent infringement claims, the panel was<br />
divided. The majority sustained the district court's<br />
summary judgment of noninfringement, although on<br />
different grounds. The dissenting judge would have<br />
reversed the summary judgment of noninfringement.<br />
*1310 The panel first determined that because the<br />
asserted claims of the '798 patent contain a sufficient<br />
recitation of structure, the district court erred by<br />
construing the term “baffles” to invoke the “meansplus-function”<br />
claim format authorized by section<br />
112, paragraph 6. Id. at 1212. Nonetheless, the panel<br />
concluded that the patent uses the term “baffles” in a<br />
restrictive manner. Based on the patent's written<br />
description, the panel held that the claim term<br />
“baffles” excludes structures that extend at a 90<br />
degree angle from the walls. The panel noted that<br />
the specification repeatedly refers to the ability of the<br />
claimed baffles to deflect projectiles and that it<br />
describes the baffles as being “disposed at such<br />
angles that bullets which might penetrate the outer<br />
steel panels are deflected.” '798 patent, col. 2, ll. 13-<br />
15; see also id. at col. 5, ll. 17-19 (baffles are<br />
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“disposed at angles which tend to deflect the<br />
bullets”). In addition, the panel observed that<br />
nowhere in the patent is there any disclosure of a<br />
baffle projecting from the wall at a right angle and<br />
that baffles oriented at 90 degrees to the wall were<br />
found in the prior art. Based on “the specification's<br />
explicit descriptions,” the panel concluded “that the<br />
patentee regarded his invention as panels providing<br />
impact or projectile resistance and that the baffles<br />
must be oriented at angles other than 90.” Phillips,<br />
363 F.3d at 1213. The panel added that the patent<br />
specification “is intended to support and inform the<br />
claims, and here it makes it unmistakably clear that<br />
the invention involves baffles angled at other than<br />
90.” Id. at 1214. The panel therefore upheld the<br />
district court's summary judgment of<br />
noninfringement.<br />
The dissenting judge argued that the panel had<br />
improperly limited the claims to the particular<br />
embodiment of the invention disclosed in the<br />
specification, rather than adopting the “plain<br />
meaning” of the term “baffles.” The dissenting<br />
judge noted that the parties had stipulated that<br />
“baffles” are a “means for obstructing, impeding, or<br />
checking the flow of something,” and that the panel<br />
majority had agreed that the ordinary meaning of<br />
baffles is “something for deflecting, checking, or<br />
otherwise regulating flow.” Phillips, 363 F.3d at<br />
1216-17. In the dissent's view, nothing in the<br />
specification redefined the term “baffles” or<br />
constituted a disclaimer specifically limiting the term<br />
to less than the full scope of its ordinary meaning.<br />
Instead, the dissenting judge contended, the<br />
specification “merely identifies impact resistance as<br />
one of several objectives of the invention.” Id. at<br />
1217. In sum, the dissent concluded that “there is no<br />
reason to supplement the plain meaning of the claim<br />
language with a limitation from the preferred<br />
embodiment.” Id. at 1218. Consequently, the<br />
dissenting judge argued that the court should have<br />
adopted the general purpose dictionary definition of<br />
the term baffle, i.e., “something for deflecting,<br />
checking, or otherwise regulating flow,” id., and<br />
therefore should have reversed the summary<br />
judgment of noninfringement.<br />
This court agreed to rehear the appeal en banc and<br />
vacated the judgment of the panel. Phillips v. AWH<br />
Corp., 376 F.3d 1382 (Fed.Cir.2004). We now<br />
affirm the portion of the district court's judgment<br />
addressed to the trade secret misappropriation claims.<br />
However, we reverse the portion of the court's<br />
judgment addressed to the issue of infringement.<br />
I<br />
Claim 1 of the '798 patent is representative of the<br />
asserted claims with respect to the use of the term<br />
“baffles.” It recites:<br />
Building modules adapted to fit together for<br />
construction of fire, sound and impact resistant<br />
security barriers and rooms for use in securing<br />
records and *1311 persons, comprising in<br />
combination, an outer shell ..., sealant means ... and<br />
further means disposed inside the shell for increasing<br />
its load bearing capacity comprising internal steel<br />
baffles extending inwardly from the steel shell walls.<br />
[1] As a preliminary matter, we agree with the panel<br />
that the term “baffles” is not means-plus-function<br />
language that invokes 35 U.S.C. § 112, paragraph 6.<br />
To be sure, the claim refers to “means disposed<br />
inside the shell for increasing its load bearing<br />
capacity,” a formulation that would ordinarily be<br />
regarded as invoking the means-plus-function claim<br />
format. However, the claim specifically identifies<br />
“internal steel baffles” as structure that performs the<br />
recited function of increasing the shell's load-bearing<br />
capacity. In contrast to the “load bearing means”<br />
limitation, the reference to “baffles” does not use the<br />
word “means,” and we have held that the absence of<br />
that term creates a rebuttable presumption that<br />
section 112, paragraph 6, does not apply. See<br />
Personalized Media Communications, LLC v. Int'l<br />
Trade Comm'n, 161 F.3d 696, 703-04 (Fed.Cir.1998).<br />
Means-plus-function claiming applies only to purely<br />
functional limitations that do not provide the<br />
structure that performs the recited function. See<br />
Watts v. XL Sys., Inc., 232 F.3d 877, 880-81<br />
(Fed.Cir.2000). While the baffles in the '798 patent<br />
are clearly intended to perform several functions, the<br />
term “baffles” is nonetheless structural; it is not a<br />
purely functional placeholder in which structure is<br />
filled in by the specification. See TurboCare Div. of<br />
Demag Delaval Turbomachinery Corp. v. Gen. Elec.<br />
Co., 264 F.3d 1111, 1121 (Fed.Cir.2001) (reasoning<br />
that nothing in the specification or prosecution<br />
history suggests that the patentee used the term<br />
“compressed spring” to denote any structure that is<br />
capable of performing the specified function);<br />
Greenberg v. Ethicon Endo-Surgery, Inc., 91 F.3d<br />
1580, 1583 (Fed.Cir.1996) (construing the term<br />
“detent mechanism” to refer to particular structure,<br />
even though the term has functional connotations).<br />
The claims and the specification unmistakably<br />
establish that the “steel baffles” refer to particular<br />
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physical apparatus. The claim characterizes the<br />
baffles as “extend [ing] inwardly” from the steel shell<br />
walls, which plainly implies that the baffles are<br />
structures. The specification likewise makes clear<br />
that the term “steel baffles” refers to particular<br />
internal wall structures and is not simply a general<br />
description of any structure that will perform a<br />
particular function. See, e.g., '798 patent, col. 4, ll.<br />
25-26 (“the load bearing baffles 16 are optionally<br />
used with longer panels”); id., col. 4, ll. 49-50<br />
(opposing panels are “compressed between the flange<br />
35 and the baffle 26”). Because the term “baffles” is<br />
not subject to section 112, paragraph 6, we agree with<br />
the panel that the district court erred by limiting the<br />
term to corresponding structures disclosed in the<br />
specification and their equivalents. Accordingly, we<br />
must determine the correct construction of the<br />
structural term “baffles,” as used in the '798 patent.<br />
II<br />
The first paragraph of section 112 of the <strong>Patent</strong> Act,<br />
35 U.S.C. § 112, states that the specification<br />
shall contain a written description of the invention,<br />
and of the manner and process of making and using<br />
it, in such full, clear, concise, and exact terms as to<br />
enable any person skilled in the art to which it<br />
pertains ... to make and use the same ....<br />
The second paragraph of section 112 provides that<br />
the specificationshall conclude with one or more<br />
claims particularly pointing out and distinctly *1312<br />
claiming the subject matter which the applicant<br />
regards as his invention.<br />
Those two paragraphs of section 112 frame the issue<br />
of claim interpretation for us. The second paragraph<br />
requires us to look to the language of the claims to<br />
determine what “the applicant regards as his<br />
invention.” On the other hand, the first paragraph<br />
requires that the specification describe the invention<br />
set forth in the claims. The principal question that<br />
this case presents to us is the extent to which we<br />
should resort to and rely on a patent's specification in<br />
seeking to ascertain the proper scope of its claims.<br />
This is hardly a new question. The role of the<br />
specification in claim construction has been an issue<br />
in patent law decisions in this country for nearly two<br />
centuries. We addressed the relationship between<br />
the specification and the claims at some length in our<br />
en banc opinion in Markman v. Westview<br />
Instruments, Inc., 52 F.3d 967, 979-81 (Fed.Cir.1995)<br />
(en banc), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134<br />
L.Ed.2d 577 (1996). We again summarized the<br />
applicable principles in Vitronics Corp. v.<br />
Conceptronic, Inc., 90 F.3d 1576 (Fed.Cir.1996), and<br />
more recently in Innova/Pure Water, Inc. v. Safari<br />
Water Filtration Systems, Inc., 381 F.3d 1111<br />
(Fed.Cir.2004). What we said in those cases bears<br />
restating, for the basic principles of claim<br />
construction outlined there are still applicable, and<br />
we reaffirm them today. We have also previously<br />
considered the use of dictionaries in claim<br />
construction. What we have said in that regard<br />
requires clarification.<br />
A<br />
[2] It is a “bedrock principle” of patent law that “the<br />
claims of a patent define the invention to which the<br />
patentee is entitled the right to exclude.” Innova,<br />
381 F.3d at 1115; see also Vitronics, 90 F.3d at 1582<br />
(“we look to the words of the claims themselves ... to<br />
define the scope of the patented invention”);<br />
Markman, 52 F.3d at 980 (“The written description<br />
part of the specification itself does not delimit the<br />
right to exclude. That is the function and purpose of<br />
claims.”). That principle has been recognized since<br />
at least 1836, when Congress first required that the<br />
specification include a portion in which the inventor<br />
“shall particularly specify and point out the part,<br />
improvement, or combination, which he claims as his<br />
own invention or discovery.” Act of July 4, 1836,<br />
ch. 357, § 6, 5 Stat. 117, 119. In the following<br />
years, the Supreme Court made clear that the claims<br />
are “of primary importance, in the effort to ascertain<br />
precisely what it is that is patented.” Merrill v.<br />
Yeomans, 94 U.S. 568, 570, 24 L.Ed. 235 (1876).<br />
Because the patentee is required to “define precisely<br />
what his invention is,” the Court explained, it is<br />
“unjust to the public, as well as an evasion of the law,<br />
to construe it in a manner different from the plain<br />
import of its terms.” White v. Dunbar, 119 U.S. 47,<br />
52, 7 S.Ct. 72, 30 L.Ed. 303 (1886); see also Cont'l<br />
Paper Bag Co. v. E. Paper Bag Co., 210 U.S. 405,<br />
419, 28 S.Ct. 748, 52 L.Ed. 1122 (1908) (“the claims<br />
measure the invention”); McCarty v. Lehigh Valley<br />
R.R. Co., 160 U.S. 110, 116, 16 S.Ct. 240, 40 L.Ed.<br />
358 (1895) (“if we once begin to include elements<br />
not mentioned in the claim, in order to limit such<br />
claim ..., we should never know where to stop”); Aro<br />
Mfg. Co. v. Convertible Top Replacement Co., 365<br />
U.S. 336, 339, 81 S.Ct. 599, 5 L.Ed.2d 592 (1961)<br />
(“the claims made in the patent are the sole measure<br />
of the grant”).<br />
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[3] We have frequently stated that the words of a<br />
claim “are generally given their ordinary and<br />
customary meaning.” Vitronics, 90 F.3d at 1582; see<br />
also Toro Co. v. White Consol. Indus., Inc., 199 F.3d<br />
1295, 1299 (Fed.Cir.1999); *1313Renishaw PLC v.<br />
Marposs Societa' per Azioni, 158 F.3d 1243, 1249<br />
(Fed.Cir.1998). We have made clear, moreover, that<br />
the ordinary and customary meaning of a claim term<br />
is the meaning that the term would have to a person<br />
of ordinary skill in the art in question at the time of<br />
the invention, i.e., as of the effective filing date of the<br />
patent application. See Innova, 381 F.3d at 1116 (“A<br />
court construing a patent claim seeks to accord a<br />
claim the meaning it would have to a person of<br />
ordinary skill in the art at the time of the invention.”);<br />
Home Diagnostics, Inc. v. LifeScan, Inc., 381 F.3d<br />
1352, 1358 (Fed.Cir.2004) (“customary meaning”<br />
refers to the “customary meaning in [the] art field”);<br />
Ferguson Beauregard/Logic Controls v. Mega Sys.,<br />
LLC, 350 F.3d 1327, 1338 (Fed.Cir.2003) (claim<br />
terms “are examined through the viewing glass of a<br />
person skilled in the art”); see also PC Connector<br />
Solutions LLC v. SmartDisk Corp., 406 F.3d 1359,<br />
1363 (Fed.Cir.2005) (meaning of claim “must be<br />
interpreted as of [the] effective filing date” of the<br />
patent application); Schering Corp. v. Amgen Inc.,<br />
222 F.3d 1347, 1353 (Fed.Cir.2000) (same).<br />
The inquiry into how a person of ordinary skill in the<br />
art understands a claim term provides an objective<br />
baseline from which to begin claim interpretation.<br />
See Innova, 381 F.3d at 1116. That starting point is<br />
based on the well-settled understanding that inventors<br />
are typically persons skilled in the field of the<br />
invention and that patents are addressed to and<br />
intended to be read by others of skill in the pertinent<br />
art. See Verve, LLC v. Crane Cams, Inc., 311 F.3d<br />
1116, 1119 (Fed.Cir.2002) (patent documents are<br />
meant to be “a concise statement for persons in the<br />
field”); In re Nelson, 47 C.C.P.A. 1031, 280 F.2d<br />
172, 181 (1960) (“The descriptions in patents are not<br />
addressed to the public generally, to lawyers or to<br />
judges, but, as section 112 says, to those skilled in the<br />
art to which the invention pertains or with which it is<br />
most nearly connected.”).<br />
[4] Importantly, the person of ordinary skill in the art<br />
is deemed to read the claim term not only in the<br />
context of the particular claim in which the disputed<br />
term appears, but in the context of the entire patent,<br />
including the specification. This court explained that<br />
point well in Multiform Desiccants, Inc. v. Medzam,<br />
Ltd., 133 F.3d 1473, 1477 (Fed.Cir.1998):<br />
It is the person of ordinary skill in the field of the<br />
invention through whose eyes the claims are<br />
construed. Such person is deemed to read the words<br />
used in the patent documents with an understanding<br />
of their meaning in the field, and to have knowledge<br />
of any special meaning and usage in the field. The<br />
inventor's words that are used to describe the<br />
invention-the inventor's lexicography-must be<br />
understood and interpreted by the court as they would<br />
be understood and interpreted by a person in that<br />
field of technology. Thus the court starts the<br />
decisionmaking process by reviewing the same<br />
resources as would that person, viz., the patent<br />
specification and the prosecution history.<br />
See also Medrad, Inc. v. MRI Devices Corp., 401<br />
F.3d 1313, 1319 (Fed.Cir.2005) (“We cannot look at<br />
the ordinary meaning of the term ... in a vacuum.<br />
Rather, we must look at the ordinary meaning in the<br />
context of the written description and the prosecution<br />
history.”); V-Formation, Inc. v. Benetton Group SpA,<br />
401 F.3d 1307, 1310 (Fed.Cir.2005) (intrinsic record<br />
“usually provides the technological and temporal<br />
context to enable the court to ascertain the meaning<br />
of the claim to one of ordinary skill in the art at the<br />
time of the invention”); *1314Unitherm Food Sys.,<br />
Inc. v. Swift-Eckrich, Inc., 375 F.3d 1341, 1351<br />
(Fed.Cir.2004) (proper definition is the “definition<br />
that one of ordinary skill in the art could ascertain<br />
from the intrinsic evidence in the record”).<br />
B<br />
In some cases, the ordinary meaning of claim<br />
language as understood by a person of skill in the art<br />
may be readily apparent even to lay judges, and claim<br />
construction in such cases involves little more than<br />
the application of the widely accepted meaning of<br />
commonly understood words. See Brown v. 3M, 265<br />
F.3d 1349, 1352 (Fed.Cir.2001) (holding that the<br />
claims did “not require elaborate interpretation”). In<br />
such circumstances, general purpose dictionaries may<br />
be helpful. In many cases that give rise to litigation,<br />
however, determining the ordinary and customary<br />
meaning of the claim requires examination of terms<br />
that have a particular meaning in a field of art.<br />
Because the meaning of a claim term as understood<br />
by persons of skill in the art is often not immediately<br />
apparent, and because patentees frequently use terms<br />
idiosyncratically, the court looks to “those sources<br />
available to the public that show what a person of<br />
skill in the art would have understood disputed claim<br />
language to mean.” Innova, 381 F.3d at 1116.<br />
Those sources include “the words of the claims<br />
themselves, the remainder of the specification, the<br />
prosecution history, and extrinsic evidence<br />
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concerning relevant scientific principles, the meaning<br />
of technical terms, and the state of the art.” Id.; see<br />
also Gemstar-TV Guide Int'l, Inc. v. Int'l Trade<br />
Comm'n, 383 F.3d 1352, 1364 (Fed.Cir.2004);<br />
Vitronics, 90 F.3d at 1582-83; Markman, 52 F.3d at<br />
979-80.<br />
1<br />
Quite apart from the written description and the<br />
prosecution history, the claims themselves provide<br />
substantial guidance as to the meaning of particular<br />
claim terms. See Vitronics, 90 F.3d at 1582; see<br />
also ACTV, Inc. v. Walt Disney Co., 346 F.3d 1082,<br />
1088 (Fed.Cir.2003) (“the context of the surrounding<br />
words of the claim also must be considered in<br />
determining the ordinary and customary meaning of<br />
those terms”).<br />
To begin with, the context in which a term is used in<br />
the asserted claim can be highly instructive. To take<br />
a simple example, the claim in this case refers to<br />
“steel baffles,” which strongly implies that the term<br />
“baffles” does not inherently mean objects made of<br />
steel. This court's cases provide numerous similar<br />
examples in which the use of a term within the claim<br />
provides a firm basis for construing the term. See,<br />
e.g., Mars, Inc. v. H.J. Heinz Co., 377 F.3d 1369,<br />
1374 (Fed.Cir.2004) (claim term “ingredients”<br />
construed in light of the use of the term “mixture” in<br />
the same claim phrase); Process Control Corp. v.<br />
HydReclaim Corp., 190 F.3d 1350, 1356<br />
(Fed.Cir.1999) (claim term “discharge rate”<br />
construed in light of the use of the same term in<br />
another limitation of the same claim).<br />
[5][6] Other claims of the patent in question, both<br />
asserted and unasserted, can also be valuable sources<br />
of enlightenment as to the meaning of a claim term.<br />
Vitronics, 90 F.3d at 1582. Because claim terms are<br />
normally used consistently throughout the patent, the<br />
usage of a term in one claim can often illuminate the<br />
meaning of the same term in other claims. See<br />
Rexnord Corp. v. Laitram Corp., 274 F.3d 1336,<br />
1342 (Fed.Cir.2001); CVI/Beta Ventures, Inc. v.<br />
Tura LP, 112 F.3d 1146, 1159 (Fed.Cir.1997).<br />
Differences among claims can also be a useful guide<br />
in understanding the meaning of particular claim<br />
terms. See Laitram Corp. v. Rexnord, Inc., 939 F.2d<br />
1533, 1538 (Fed.Cir.1991). For example,*1315 the<br />
presence of a dependent claim that adds a particular<br />
limitation gives rise to a presumption that the<br />
limitation in question is not present in the<br />
independent claim. See Liebel-Flarsheim Co. v.<br />
Medrad, Inc., 358 F.3d 898, 910 (Fed.Cir.2004).<br />
2<br />
[7][8] The claims, of course, do not stand alone.<br />
Rather, they are part of “a fully integrated written<br />
instrument,” Markman, 52 F.3d at 978, consisting<br />
principally of a specification that concludes with the<br />
claims. For that reason, claims “must be read in<br />
view of the specification, of which they are a part.”<br />
Id. at 979. As we stated in Vitronics, the<br />
specification “is always highly relevant to the claim<br />
construction analysis. Usually, it is dispositive; it is<br />
the single best guide to the meaning of a disputed<br />
term.” 90 F.3d at 1582.<br />
This court and its predecessors have long emphasized<br />
the importance of the specification in claim<br />
construction. In Autogiro Co. of America v. United<br />
States, 181 Ct.Cl. 55, 384 F.2d 391, 397-98 (1967),<br />
the Court of Claims characterized the specification as<br />
“a concordance for the claims,” based on the<br />
statutory requirement that the specification “describe<br />
the manner and process of making and using” the<br />
patented invention. The Court of Customs and<br />
<strong>Patent</strong> Appeals made a similar point. See In re Fout,<br />
675 F.2d 297, 300 (CCPA 1982) (“Claims must<br />
always be read in light of the specification. Here,<br />
the specification makes plain what the appellants did<br />
and did not invent ....”).<br />
Shortly after the creation of this court, Judge Rich<br />
wrote that “[t]he descriptive part of the specification<br />
aids in ascertaining the scope and meaning of the<br />
claims inasmuch as the words of the claims must be<br />
based on the description. The specification is, thus,<br />
the primary basis for construing the claims.”<br />
Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d<br />
448, 452 (Fed.Cir.1985). On numerous occasions<br />
since then, we have reaffirmed that point, stating that<br />
“[t]he best source for understanding a technical term<br />
is the specification from which it arose, informed, as<br />
needed, by the prosecution history.” Multiform<br />
Desiccants, 133 F.3d at 1478; Metabolite Labs., Inc.<br />
v. Lab. Corp. of Am. Holdings, 370 F.3d 1354, 1360<br />
(Fed.Cir.2004) (“In most cases, the best source for<br />
discerning the proper context of claim terms is the<br />
patent specification wherein the patent applicant<br />
describes the invention.”); see also, e.g., Kinik Co.<br />
v. Int'l Trade Comm'n, 362 F.3d 1359, 1365<br />
(Fed.Cir.2004) (“The words of patent claims have the<br />
meaning and scope with which they are used in the<br />
specification and the prosecution history.”); Moba,<br />
B.V. v. Diamond Automation, Inc., 325 F.3d 1306,<br />
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1315 (Fed.Cir.2003) (“[T]he best indicator of claim<br />
meaning is its usage in context as understood by one<br />
of skill in the art at the time of invention.”).<br />
That principle has a long pedigree in Supreme Court<br />
decisions as well. See Hogg v. Emerson, 47 U.S. (6<br />
How.) 437, 482, 12 L.Ed. 505 (1848) (the<br />
specification is a “component part of the patent” and<br />
“is as much to be considered with the [letters patent]<br />
in construing them, as any paper referred to in a deed<br />
or other contract”); Bates v. Coe, 98 U.S. 31, 38, 25<br />
L.Ed. 68 (1878) (“in case of doubt or ambiguity it is<br />
proper in all cases to refer back to the descriptive<br />
portions of the specification to aid in solving the<br />
doubt or in ascertaining the true intent and meaning<br />
of the language employed in the claims”); White v.<br />
Dunbar, 119 U.S. 47, 51, 7 S.Ct. 72, 30 L.Ed. 303<br />
(1886) (specification is appropriately resorted to “for<br />
the purpose of better understanding the meaning of<br />
the claim”); *1316 Schriber-Schroth Co. v.<br />
Cleveland Trust Co., 311 U.S. 211, 217, 61 S.Ct.<br />
235, 85 L.Ed. 132 (1940) (“The claims of a patent are<br />
always to be read or interpreted in light of its<br />
specifications.”); United States v. Adams, 383 U.S.<br />
39, 49, 86 S.Ct. 708, 15 L.Ed.2d 572 (1966) (“[I]t is<br />
fundamental that claims are to be construed in the<br />
light of the specifications and both are to be read with<br />
a view to ascertaining the invention.”).<br />
The importance of the specification in claim<br />
construction derives from its statutory role. The<br />
close kinship between the written description and the<br />
claims is enforced by the statutory requirement that<br />
the specification describe the claimed invention in<br />
“full, clear, concise, and exact terms.” 35 U.S.C. §<br />
112, para. 1; see Netword, LLC v. Centraal Corp.,<br />
242 F.3d 1347, 1352 (Fed.Cir.2001) (“The claims are<br />
directed to the invention that is described in the<br />
specification; they do not have meaning removed<br />
from the context from which they arose.”); see also<br />
Markman v. Westview Instruments, Inc., 517 U.S.<br />
370, 389, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996)<br />
(“[A claim] term can be defined only in a way that<br />
comports with the instrument as a whole.”). In light<br />
of the statutory directive that the inventor provide a<br />
“full” and “exact” description of the claimed<br />
invention, the specification necessarily informs the<br />
proper construction of the claims. See Merck & Co.<br />
v. Teva Pharms. USA, Inc., 347 F.3d 1367, 1371<br />
(Fed.Cir.2003) (“A fundamental rule of claim<br />
construction is that terms in a patent document are<br />
construed with the meaning with which they are<br />
presented in the patent document. Thus claims must<br />
be construed so as to be consistent with the<br />
specification, of which they are a part.”) (citations<br />
omitted). In Renishaw, this court summarized that<br />
point succinctly:<br />
Ultimately, the interpretation to be given a term can<br />
only be determined and confirmed with a full<br />
understanding of what the inventors actually invented<br />
and intended to envelop with the claim. The<br />
construction that stays true to the claim language and<br />
most naturally aligns with the patent's description of<br />
the invention will be, in the end, the correct<br />
construction.<br />
158 F.3d at 1250 (citations omitted).<br />
[9][10] Consistent with that general principle, our<br />
cases recognize that the specification may reveal a<br />
special definition given to a claim term by the<br />
patentee that differs from the meaning it would<br />
otherwise possess. In such cases, the inventor's<br />
lexicography governs. See CCS Fitness, Inc. v.<br />
Brunswick Corp., 288 F.3d 1359, 1366<br />
(Fed.Cir.2002). In other cases, the specification may<br />
reveal an intentional disclaimer, or disavowal, of<br />
claim scope by the inventor. In that instance as well,<br />
the inventor has dictated the correct claim scope, and<br />
the inventor's intention, as expressed in the<br />
specification, is regarded as dispositive. See SciMed<br />
Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc.,<br />
242 F.3d 1337, 1343-44 (Fed.Cir.2001).<br />
The pertinence of the specification to claim<br />
construction is reinforced by the manner in which a<br />
patent is issued. The <strong>Patent</strong> and Trademark Office<br />
(“PTO”) determines the scope of claims in patent<br />
applications not solely on the basis of the claim<br />
language, but upon giving claims their broadest<br />
reasonable construction “in light of the specification<br />
as it would be interpreted by one of ordinary skill in<br />
the art.” In re Am. Acad. of Sci. Tech. Ctr., 367 F.3d<br />
1359, 1364 (Fed.Cir.2004). Indeed, the rules of the<br />
PTO require that application claims must “conform to<br />
the invention as set forth in the remainder of the<br />
specification and the terms and phrases used in the<br />
claims must find clear support or antecedent basis in<br />
the description *1317 so that the meaning of the<br />
terms in the claims may be ascertainable by reference<br />
to the description.” 37 C.F.R. § 1.75(d)(1). It is<br />
therefore entirely appropriate for a court, when<br />
conducting claim construction, to rely heavily on the<br />
written description for guidance as to the meaning of<br />
the claims.<br />
3<br />
[11][12] In addition to consulting the specification,<br />
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we have held that a court “should also consider the<br />
patent's prosecution history, if it is in evidence.”<br />
Markman, 52 F.3d at 980; see also Graham v. John<br />
Deere Co., 383 U.S. 1, 33, 86 S.Ct. 684, 15 L.Ed.2d<br />
545 (1966) (“[A]n invention is construed not only in<br />
the light of the claims, but also with reference to the<br />
file wrapper or prosecution history in the <strong>Patent</strong><br />
Office.”). The prosecution history, which we have<br />
designated as part of the “intrinsic evidence,”<br />
consists of the complete record of the proceedings<br />
before the PTO and includes the prior art cited during<br />
the examination of the patent. Autogiro, 384 F.2d at<br />
399. Like the specification, the prosecution history<br />
provides evidence of how the PTO and the inventor<br />
understood the patent. See Lemelson v. Gen. Mills,<br />
Inc., 968 F.2d 1202, 1206 (Fed.Cir.1992).<br />
Furthermore, like the specification, the prosecution<br />
history was created by the patentee in attempting to<br />
explain and obtain the patent. Yet because the<br />
prosecution history represents an ongoing negotiation<br />
between the PTO and the applicant, rather than the<br />
final product of that negotiation, it often lacks the<br />
clarity of the specification and thus is less useful for<br />
claim construction purposes. See Inverness Med.<br />
Switz. GmbH v. Warner Lambert Co., 309 F.3d 1373,<br />
1380-82 (Fed.Cir.2002) (the ambiguity of the<br />
prosecution history made it less relevant to claim<br />
construction); Athletic Alternatives, Inc. v. Prince<br />
Mfg., Inc., 73 F.3d 1573, 1580 (Fed.Cir.1996) (the<br />
ambiguity of the prosecution history made it<br />
“unhelpful as an interpretive resource” for claim<br />
construction). Nonetheless, the prosecution history<br />
can often inform the meaning of the claim language<br />
by demonstrating how the inventor understood the<br />
invention and whether the inventor limited the<br />
invention in the course of prosecution, making the<br />
claim scope narrower than it would otherwise be.<br />
Vitronics, 90 F.3d at 1582-83; see also Chimie v.<br />
PPG Indus., Inc., 402 F.3d 1371, 1384<br />
(Fed.Cir.2005) ( “The purpose of consulting the<br />
prosecution history in construing a claim is to<br />
‘exclude any interpretation that was disclaimed<br />
during prosecution.’ ”), quoting ZMI Corp. v.<br />
Cardiac Resuscitator Corp., 844 F.2d 1576, 1580<br />
(Fed.Cir.1988); Southwall Techs., Inc. v. Cardinal<br />
IG Co., 54 F.3d 1570, 1576 (Fed.Cir.1995).<br />
C<br />
[13] Although we have emphasized the importance of<br />
intrinsic evidence in claim construction, we have also<br />
authorized district courts to rely on extrinsic<br />
evidence, which “consists of all evidence external to<br />
the patent and prosecution history, including expert<br />
and inventor testimony, dictionaries, and learned<br />
treatises.” Markman, 52 F.3d at 980, citing Seymour<br />
v. Osborne, 78 U.S. (11 Wall.) 516, 546, 20 L.Ed. 33<br />
(1870); see also Vitronics, 90 F.3d at 1583.<br />
However, while extrinsic evidence “can shed useful<br />
light on the relevant art,” we have explained that it is<br />
“less significant than the intrinsic record in<br />
determining ‘the legally operative meaning of claim<br />
language.’ ” C.R. Bard, Inc. v. U.S. Surgical Corp.,<br />
388 F.3d 858, 862 (Fed.Cir.2004), quoting<br />
Vanderlande Indus. Nederland BV v. Int'l Trade<br />
Comm'n, 366 F.3d 1311, 1318 (Fed.Cir.2004); see<br />
also Astrazeneca AB v. Mutual Pharm. Co., 384<br />
F.3d 1333, 1337 (Fed.Cir.2004).<br />
*1318 [14] Within the class of extrinsic evidence, the<br />
court has observed that dictionaries and treatises can<br />
be useful in claim construction. See Renishaw, 158<br />
F.3d at 1250; Rexnord, 274 F.3d at 1344. We have<br />
especially noted the help that technical dictionaries<br />
may provide to a court “to better understand the<br />
underlying technology” and the way in which one of<br />
skill in the art might use the claim terms. Vitronics,<br />
90 F.3d at 1584 n. 6. Because dictionaries, and<br />
especially technical dictionaries, endeavor to collect<br />
the accepted meanings of terms used in various fields<br />
of science and technology, those resources have been<br />
properly recognized as among the many tools that<br />
can assist the court in determining the meaning of<br />
particular terminology to those of skill in the art of<br />
the invention. See Teleflex, Inc. v. Ficosa N. Am.<br />
Corp., 299 F.3d 1313, 1325 (Fed.Cir.2002). Such<br />
evidence, we have held, may be considered if the<br />
court deems it helpful in determining “the true<br />
meaning of language used in the patent claims.”<br />
Markman, 52 F.3d at 980.<br />
[15][16][17] We have also held that extrinsic<br />
evidence in the form of expert testimony can be<br />
useful to a court for a variety of purposes, such as to<br />
provide background on the technology at issue, to<br />
explain how an invention works, to ensure that the<br />
court's understanding of the technical aspects of the<br />
patent is consistent with that of a person of skill in<br />
the art, or to establish that a particular term in the<br />
patent or the prior art has a particular meaning in the<br />
pertinent field. See Pitney Bowes, Inc. v. Hewlett-<br />
Packard Co., 182 F.3d 1298, 1308-09<br />
(Fed.Cir.1999); Key Pharms. v. Hercon Labs. Corp.,<br />
161 F.3d 709, 716 (Fed.Cir.1998). However,<br />
conclusory, unsupported assertions by experts as to<br />
the definition of a claim term are not useful to a<br />
court. Similarly, a court should discount any expert<br />
testimony “that is clearly at odds with the claim<br />
construction mandated by the claims themselves, the<br />
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written description, and the prosecution history, in<br />
other words, with the written record of the patent.”<br />
Key Pharms., 161 F.3d at 716.<br />
We have viewed extrinsic evidence in general as less<br />
reliable than the patent and its prosecution history in<br />
determining how to read claim terms, for several<br />
reasons. First, extrinsic evidence by definition is not<br />
part of the patent and does not have the<br />
specification's virtue of being created at the time of<br />
patent prosecution for the purpose of explaining the<br />
patent's scope and meaning. Second, while claims<br />
are construed as they would be understood by a<br />
hypothetical person of skill in the art, extrinsic<br />
publications may not be written by or for skilled<br />
artisans and therefore may not reflect the<br />
understanding of a skilled artisan in the field of the<br />
patent. Third, extrinsic evidence consisting of expert<br />
reports and testimony is generated at the time of and<br />
for the purpose of litigation and thus can suffer from<br />
bias that is not present in intrinsic evidence. The<br />
effect of that bias can be exacerbated if the expert is<br />
not one of skill in the relevant art or if the expert's<br />
opinion is offered in a form that is not subject to<br />
cross-examination. See Senmed, Inc. v. Richard-<br />
Allan Med. Indus., Inc., 888 F.2d 815, 819 n. 8<br />
(Fed.Cir.1989). Fourth, there is a virtually<br />
unbounded universe of potential extrinsic evidence of<br />
some marginal relevance that could be brought to<br />
bear on any claim construction question. In the<br />
course of litigation, each party will naturally choose<br />
the pieces of extrinsic evidence most favorable to its<br />
cause, leaving the court with the considerable task of<br />
filtering the useful extrinsic evidence from the fluff.<br />
See Daubert v. Merrell Dow Pharms., Inc., 509 U.S.<br />
579, 595, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)<br />
(“Expert evidence can be both powerful and quite<br />
misleading because of the difficulty in evaluating<br />
it.”). Finally, *1319 undue reliance on extrinsic<br />
evidence poses the risk that it will be used to change<br />
the meaning of claims in derogation of the<br />
“indisputable public records consisting of the claims,<br />
the specification and the prosecution history,”<br />
thereby undermining the public notice function of<br />
patents. Southwall Techs., 54 F.3d at 1578.<br />
[18][19] In sum, extrinsic evidence may be useful to<br />
the court, but it is unlikely to result in a reliable<br />
interpretation of patent claim scope unless considered<br />
in the context of the intrinsic evidence. Nonetheless,<br />
because extrinsic evidence can help educate the court<br />
regarding the field of the invention and can help the<br />
court determine what a person of ordinary skill in the<br />
art would understand claim terms to mean, it is<br />
permissible for the district court in its sound<br />
discretion to admit and use such evidence. In<br />
exercising that discretion, and in weighing all the<br />
evidence bearing on claim construction, the court<br />
should keep in mind the flaws inherent in each type<br />
of evidence and assess that evidence accordingly.<br />
III<br />
Although the principles outlined above have been<br />
articulated on numerous occasions, some of this<br />
court's cases have suggested a somewhat different<br />
approach to claim construction, in which the court<br />
has given greater emphasis to dictionary definitions<br />
of claim terms and has assigned a less prominent role<br />
to the specification and the prosecution history. The<br />
leading case in this line is Texas Digital Systems, Inc.<br />
v. Telegenix, Inc., 308 F.3d 1193 (Fed.Cir.2002).<br />
A<br />
In Texas Digital, the court noted that “dictionaries,<br />
encyclopedias and treatises are particularly useful<br />
resources to assist the court in determining the<br />
ordinary and customary meanings of claim terms.”<br />
308 F.3d at 1202. Those texts, the court explained,<br />
are “objective resources that serve as reliable sources<br />
of information on the established meanings that<br />
would have been attributed to the terms of the claims<br />
by those of skill in the art,” and they “deserve no less<br />
fealty in the context of claim construction” than in<br />
any other area of law. Id. at 1203. The court added<br />
that because words often have multiple dictionary<br />
meanings, the intrinsic record must be consulted to<br />
determine which of the different possible dictionary<br />
meanings is most consistent with the use of the term<br />
in question by the inventor. If more than one<br />
dictionary definition is consistent with the use of the<br />
words in the intrinsic record, the court stated, “the<br />
claim terms may be construed to encompass all such<br />
consistent meanings.” Id.<br />
The Texas Digital court further explained that the<br />
patent's specification and prosecution history must be<br />
consulted to determine if the patentee has used “the<br />
words [of the claim] in a manner clearly inconsistent<br />
with the ordinary meaning reflected, for example, in<br />
a dictionary definition.” 308 F.3d at 1204. The<br />
court identified two circumstances in which such an<br />
inconsistency may be found. First, the court stated,<br />
“the presumption in favor of a dictionary definition<br />
will be overcome where the patentee, acting as his or<br />
her own lexicographer, has clearly set forth an<br />
explicit definition of the term different from its<br />
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ordinary meaning.” Id. Second, “the presumption<br />
also will be rebutted if the inventor has disavowed or<br />
disclaimed scope of coverage, by using words or<br />
expressions of manifest exclusion or restriction,<br />
representing a clear disavowal of claim scope.” Id.<br />
The Texas Digital court explained that it advanced<br />
the methodology set forth in *1320 that opinion in an<br />
effort to combat what this court has termed “one of<br />
the cardinal sins of patent law-reading a limitation<br />
from the written description into the claims,” SciMed<br />
Life Sys., 242 F.3d at 1340. The court concluded<br />
that it is improper to consult “the written description<br />
and prosecution history as a threshold step in the<br />
claim construction process, before any effort is made<br />
to discern the ordinary and customary meanings<br />
attributed to the words themselves.” Texas Digital,<br />
308 F.3d at 1204. To do so, the court reasoned,<br />
“invites a violation of our precedent counseling<br />
against importing limitations into the claims.” Id.<br />
Summarizing its analysis, the Texas Digital court<br />
stated:<br />
By examining relevant dictionaries, encyclopedias,<br />
and treatises to ascertain possible meanings that<br />
would have been attributed to the words of the claims<br />
by those skilled in the art, and by further utilizing the<br />
intrinsic record to select from those possible<br />
meanings the one or ones most consistent with the<br />
use of the words by the inventor, the full breadth of<br />
the limitations intended by the inventor will be more<br />
accurately determined and the improper importation<br />
of unintended limitations from the written description<br />
into the claims will be more easily avoided.<br />
Id. at 1205.<br />
B<br />
Although the concern expressed by the court in Texas<br />
Digital was valid, the methodology it adopted placed<br />
too much reliance on extrinsic sources such as<br />
dictionaries, treatises, and encyclopedias and too<br />
little on intrinsic sources, in particular the<br />
specification and prosecution history. While the<br />
court noted that the specification must be consulted<br />
in every case, it suggested a methodology for claim<br />
interpretation in which the specification should be<br />
consulted only after a determination is made, whether<br />
based on a dictionary, treatise, or other source, as to<br />
the ordinary meaning or meanings of the claim term<br />
in dispute. Even then, recourse to the specification<br />
is limited to determining whether the specification<br />
excludes one of the meanings derived from the<br />
dictionary, whether the presumption in favor of the<br />
dictionary definition of the claim term has been<br />
overcome by “an explicit definition of the term<br />
different from its ordinary meaning,” or whether the<br />
inventor “has disavowed or disclaimed scope of<br />
coverage, by using words or expressions of manifest<br />
exclusion or restriction, representing a clear<br />
disavowal of claim scope.” 308 F.3d at 1204. In<br />
effect, the Texas Digital approach limits the role of<br />
the specification in claim construction to serving as a<br />
check on the dictionary meaning of a claim term if<br />
the specification requires the court to conclude that<br />
fewer than all the dictionary definitions apply, or if<br />
the specification contains a sufficiently specific<br />
alternative definition or disavowal. See, e.g., Texas<br />
Digital, 308 F.3d at 1202 (“unless compelled<br />
otherwise, a court will give a claim term the full<br />
range of its ordinary meaning”); Nystrom v. TREX<br />
Co., 374 F.3d 1105, 1111-13 (Fed.Cir.2004)<br />
(ascertaining the “full range” of the ordinary meaning<br />
of the term “board” through a collection of dictionary<br />
definitions, and stating that those candidate<br />
definitions should be removed from consideration<br />
only if they were “disclaimed” in the written<br />
description or prosecution history); Inverness Med.<br />
Switz., 309 F.3d at 1379 (claim should be construed<br />
to encompass multiple dictionary meanings unless<br />
“the specification or prosecution history clearly<br />
demonstrates that only one of the multiple meanings<br />
was intended”). That approach, in our view,<br />
improperly restricts the role of the specification in<br />
claim construction.<br />
Assigning such a limited role to the specification, and<br />
in particular requiring *1321 that any definition of<br />
claim language in the specification be express, is<br />
inconsistent with our rulings that the specification is<br />
“the single best guide to the meaning of a disputed<br />
term,” and that the specification “acts as a dictionary<br />
when it expressly defines terms used in the claims or<br />
when it defines terms by implication.” Vitronics, 90<br />
F.3d at 1582; Irdeto Access, Inc. v. Echostar Satellite<br />
Corp., 383 F.3d 1295, 1300 (Fed.Cir.2004) (“Even<br />
when guidance is not provided in explicit definitional<br />
format, the specification may define claim terms by<br />
implication such that the meaning may be found in or<br />
ascertained by a reading of the patent documents.”)<br />
(citations omitted); Novartis Pharms. Corp. v.<br />
Abbott Labs., 375 F.3d 1328, 1334-35 (Fed.Cir.2004)<br />
(same); Bell Atl. Network Servs., Inc. v. Covad<br />
Communications Group, Inc., 262 F.3d 1258, 1268<br />
(Fed.Cir.2001) (“[A] claim term may be clearly<br />
redefined without an explicit statement of<br />
redefinition.”).<br />
The main problem with elevating the dictionary to<br />
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such prominence is that it focuses the inquiry on the<br />
abstract meaning of words rather than on the meaning<br />
of claim terms within the context of the patent.<br />
Properly viewed, the “ordinary meaning” of a claim<br />
term is its meaning to the ordinary artisan after<br />
reading the entire patent. Yet heavy reliance on the<br />
dictionary divorced from the intrinsic evidence risks<br />
transforming the meaning of the claim term to the<br />
artisan into the meaning of the term in the abstract,<br />
out of its particular context, which is the<br />
specification. The patent system is based on the<br />
proposition that claims cover only the invented<br />
subject matter. As the Supreme Court has stated,<br />
“[i]t seems to us that nothing can be more just and<br />
fair, both to the patentee and the public, than that the<br />
former should understand, and correctly describe, just<br />
what he has invented, and for what he claims a<br />
patent.” Merrill v. Yeomans, 94 U.S. at 573-74. The<br />
use of a dictionary definition can conflict with that<br />
directive because the patent applicant did not create<br />
the dictionary to describe the invention. Thus, there<br />
may be a disconnect between the patentee's<br />
responsibility to describe and claim his invention,<br />
and the dictionary editors' objective of aggregating all<br />
possible definitions for particular words.<br />
Although the Texas Digital line of cases permit the<br />
dictionary definition to be narrowed in some<br />
circumstances even when there is not an explicit<br />
disclaimer or redefinition in the specification, too<br />
often that line of cases has been improperly relied<br />
upon to condone the adoption of a dictionary<br />
definition entirely divorced from the context of the<br />
written description. The problem is that if the<br />
district court starts with the broad dictionary<br />
definition in every case and fails to fully appreciate<br />
how the specification implicitly limits that definition,<br />
the error will systematically cause the construction of<br />
the claim to be unduly expansive. The risk of<br />
systematic overbreadth is greatly reduced if the court<br />
instead focuses at the outset on how the patentee used<br />
the claim term in the claims, specification, and<br />
prosecution history, rather than starting with a broad<br />
definition and whittling it down.<br />
Dictionaries, by their nature, provide an expansive<br />
array of definitions. General dictionaries, in<br />
particular, strive to collect all uses of particular<br />
words, from the common to the obscure. By design,<br />
general dictionaries collect the definitions of a term<br />
as used not only in a particular art field, but in many<br />
different settings. In such circumstances, it is<br />
inevitable that the multiple dictionary definitions for<br />
a term will extend beyond the “construction of the<br />
patent [that] is confirmed by the avowed<br />
understanding of the patentee, expressed by him, or<br />
on his behalf, when his application*1322 for the<br />
original patent was pending.” Goodyear Dental<br />
Vulcanite Co. v. Davis, 102 U.S. 222, 227, 26 L.Ed.<br />
149 (1880). Thus, the use of the dictionary may<br />
extend patent protection beyond what should<br />
properly be afforded by the inventor's patent. See<br />
Smith v. Snow, 294 U.S. 1, 14, 55 S.Ct. 279, 79 L.Ed.<br />
721 (1935) (“if the claim were fairly susceptible of<br />
two constructions, that should be adopted which will<br />
secure to the patentee his actual invention ”)<br />
(emphasis added). For that reason, we have stated<br />
that “a general-usage dictionary cannot overcome artspecific<br />
evidence of the meaning” of a claim term.<br />
Vanderlande Indus. Nederland, 366 F.3d at 1321;<br />
see also Renishaw, 158 F.3d at 1250, quoting<br />
Liebscher v. Boothroyd, 46 C.C.P.A. 701, 258 F.2d<br />
948, 951 (CCPA 1958) (“Indiscriminate reliance on<br />
definitions found in dictionaries can often produce<br />
absurd results.... One need not arbitrarily pick and<br />
choose from the various accepted definitions of a<br />
word to decide which meaning was intended as the<br />
word is used in a given claim. The subject matter,<br />
the context, etc., will more often than not lead to the<br />
correct conclusion.”).<br />
Even technical dictionaries or treatises, under certain<br />
circumstances, may suffer from some of these<br />
deficiencies. There is no guarantee that a term is<br />
used in the same way in a treatise as it would be by<br />
the patentee. In fact, discrepancies between the<br />
patent and treatises are apt to be common because the<br />
patent by its nature describes something novel. See<br />
Autogiro, 384 F.2d at 397 (“Often the invention is<br />
novel and words do not exist to describe it. The<br />
dictionary does not always keep abreast of the<br />
inventor. It cannot.”).<br />
Moreover, different dictionaries may contain<br />
somewhat different sets of definitions for the same<br />
words. A claim should not rise or fall based upon<br />
the preferences of a particular dictionary editor, or<br />
the court's independent decision, uninformed by the<br />
specification, to rely on one dictionary rather than<br />
another. Finally, the authors of dictionaries or<br />
treatises may simplify ideas to communicate them<br />
most effectively to the public and may thus choose a<br />
meaning that is not pertinent to the understanding of<br />
particular claim language. See generally Ellen P.<br />
Aprill, The Law of the Word: Dictionary Shopping in<br />
the Supreme Court, 30 Ariz. St. L.J. 275, 293-314<br />
(1998). The resulting definitions therefore do not<br />
necessarily reflect the inventor's goal of distinctly<br />
setting forth his invention as a person of ordinary<br />
skill in that particular art would understand it.<br />
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[20] As we have noted above, however, we do not<br />
intend to preclude the appropriate use of dictionaries.<br />
Dictionaries or comparable sources are often useful<br />
to assist in understanding the commonly understood<br />
meaning of words and have been used both by our<br />
court and the Supreme Court in claim interpretation.<br />
See Exhibit Supply Co. v. Ace <strong>Patent</strong>s Corp., 315<br />
U.S. 126, 134, 62 S.Ct. 513, 86 L.Ed. 736 (1942)<br />
(relying on dictionaries to construe the claim term<br />
“embedded”); Weber Elec. Co. v. E.H. Freeman<br />
Elec. Co., 256 U.S. 668, 678, 41 S.Ct. 600, 65 L.Ed.<br />
1162 (1921) (approving circuit court's use of<br />
dictionary definitions to define claim terms);<br />
Renishaw, 158 F.3d at 1247-53 (approving the use of<br />
dictionaries with proper respect for the role of<br />
intrinsic evidence). A dictionary definition has the<br />
value of being an unbiased source “accessible to the<br />
public in advance of litigation.” Vitronics, 90 F.3d at<br />
1585. As we said in Vitronics, judges are free to<br />
consult dictionaries and technical treatises<br />
at any time in order to better understand the<br />
underlying technology and may also rely on<br />
dictionary definitions when construing claim terms,<br />
so long as the dictionary definition does not<br />
contradict*1323 any definition found in or<br />
ascertained by a reading of the patent documents.<br />
Id. at 1584 n. 6.<br />
We also acknowledge that the purpose underlying the<br />
Texas Digital line of cases-to avoid the danger of<br />
reading limitations from the specification into the<br />
claim-is sound. Moreover, we recognize that the<br />
distinction between using the specification to<br />
interpret the meaning of a claim and importing<br />
limitations from the specification into the claim can<br />
be a difficult one to apply in practice. See Comark<br />
Communications, Inc. v. Harris Corp., 156 F.3d<br />
1182, 1186-87 (Fed.Cir.1998) (“there is sometimes a<br />
fine line between reading a claim in light of the<br />
specification, and reading a limitation into the claim<br />
from the specification”). However, the line between<br />
construing terms and importing limitations can be<br />
discerned with reasonable certainty and predictability<br />
if the court's focus remains on understanding how a<br />
person of ordinary skill in the art would understand<br />
the claim terms. For instance, although the<br />
specification often describes very specific<br />
embodiments of the invention, we have repeatedly<br />
warned against confining the claims to those<br />
embodiments. See, e.g., Nazomi Communications,<br />
Inc. v. ARM Holdings, PLC, 403 F.3d 1364, 1369<br />
(Fed.Cir.2005) (claims may embrace “different<br />
subject matter than is illustrated in the specific<br />
embodiments in the specification”); Liebel-<br />
Flarsheim, 358 F.3d at 906-08; Teleflex, 299 F.3d at<br />
1327; SRI Int'l v. Matsushita Elec. Corp. of Am., 775<br />
F.2d 1107, 1121 (Fed.Cir.1985). In particular, we<br />
have expressly rejected the contention that if a patent<br />
describes only a single embodiment, the claims of the<br />
patent must be construed as being limited to that<br />
embodiment. Gemstar-TV Guide, 383 F.3d at 1366.<br />
That is not just because section 112 of the <strong>Patent</strong> Act<br />
requires that the claims themselves set forth the limits<br />
of the patent grant, but also because persons of<br />
ordinary skill in the art rarely would confine their<br />
definitions of terms to the exact representations<br />
depicted in the embodiments.<br />
To avoid importing limitations from the specification<br />
into the claims, it is important to keep in mind that<br />
the purposes of the specification are to teach and<br />
enable those of skill in the art to make and use the<br />
invention and to provide a best mode for doing so.<br />
See Spectra-Physics, Inc. v. Coherent, Inc., 827 F.2d<br />
1524, 1533 (Fed.Cir.1987). One of the best ways to<br />
teach a person of ordinary skill in the art how to<br />
make and use the invention is to provide an example<br />
of how to practice the invention in a particular case.<br />
Much of the time, upon reading the specification in<br />
that context, it will become clear whether the<br />
patentee is setting out specific examples of the<br />
invention to accomplish those goals, or whether the<br />
patentee instead intends for the claims and the<br />
embodiments in the specification to be strictly<br />
coextensive. See SciMed Life Sys., 242 F.3d at 1341.<br />
The manner in which the patentee uses a term within<br />
the specification and claims usually will make the<br />
distinction apparent. See Snow v. Lake Shore & M.S.<br />
Ry. Co., 121 U.S. 617, 630, 7 S.Ct. 1343, 30 L.Ed.<br />
1004 (1887) (it was clear from the specification that<br />
there was “nothing in the context to indicate that the<br />
patentee contemplated any alternative” embodiment<br />
to the one presented).<br />
In the end, there will still remain some cases in which<br />
it will be hard to determine whether a person of skill<br />
in the art would understand the embodiments to<br />
define the outer limits of the claim term or merely to<br />
be exemplary in nature. While that task may present<br />
difficulties in some cases, we nonetheless believe that<br />
attempting to resolve that problem in the context of<br />
the *1324 particular patent is likely to capture the<br />
scope of the actual invention more accurately than<br />
either strictly limiting the scope of the claims to the<br />
embodiments disclosed in the specification or<br />
divorcing the claim language from the specification.<br />
[21] In Vitronics, this court grappled with the same<br />
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problem and set forth guidelines for reaching the<br />
correct claim construction and not imposing improper<br />
limitations on claims. 90 F.3d at 1582. The<br />
underlying goal of our decision in Vitronics was to<br />
increase the likelihood that a court will comprehend<br />
how a person of ordinary skill in the art would<br />
understand the claim terms. See id. at 1584. In that<br />
process, we recognized that there is no magic formula<br />
or catechism for conducting claim construction. Nor<br />
is the court barred from considering any particular<br />
sources or required to analyze sources in any specific<br />
sequence, as long as those sources are not used to<br />
contradict claim meaning that is unambiguous in light<br />
of the intrinsic evidence. See id. at 1583-84; Intel<br />
Corp. v. VIA Techs., Inc., 319 F.3d 1357, 1367<br />
(Fed.Cir.2003). For example, a judge who<br />
encounters a claim term while reading a patent might<br />
consult a general purpose or specialized dictionary to<br />
begin to understand the meaning of the term, before<br />
reviewing the remainder of the patent to determine<br />
how the patentee has used the term. The sequence of<br />
steps used by the judge in consulting various sources<br />
is not important; what matters is for the court to<br />
attach the appropriate weight to be assigned to those<br />
sources in light of the statutes and policies that<br />
inform patent law. Vitronics, 90 F.3d at 1582. In<br />
Vitronics, we did not attempt to provide a rigid<br />
algorithm for claim construction, but simply<br />
attempted to explain why, in general, certain types of<br />
evidence are more valuable than others. Today, we<br />
adhere to that approach and reaffirm the approach to<br />
claim construction outlined in that case, in Markman,<br />
and in Innova. We now turn to the application of<br />
those principles to the case at bar.<br />
IV<br />
A<br />
[22] The critical language of claim 1 of the '798<br />
patent-“further means disposed inside the shell for<br />
increasing its load bearing capacity comprising<br />
internal steel baffles extending inwardly from the<br />
steel shell walls”-imposes three clear requirements<br />
with respect to the baffles. First, the baffles must be<br />
made of steel. Second, they must be part of the loadbearing<br />
means for the wall section. Third, they must<br />
be pointed inward from the walls. Both parties,<br />
stipulating to a dictionary definition, also conceded<br />
that the term “baffles” refers to objects that check,<br />
impede, or obstruct the flow of something. The<br />
intrinsic evidence confirms that a person of skill in<br />
the art would understand that the term “baffles,” as<br />
used in the '798 patent, would have that generic<br />
meaning.<br />
The other claims of the '798 patent specify particular<br />
functions to be served by the baffles. For example,<br />
dependent claim 2 states that the baffles may be<br />
“oriented with the panel sections disposed at angles<br />
for deflecting projectiles such as bullets able to<br />
penetrate the steel plates.” The inclusion of such a<br />
specific limitation on the term “baffles” in claim 2<br />
makes it likely that the patentee did not contemplate<br />
that the term “baffles” already contained that<br />
limitation. See Dow Chem. Co. v. United States, 226<br />
F.3d 1334, 1341-42 (Fed.Cir.2000) (concluding that<br />
an independent claim should be given broader scope<br />
than a dependent claim to avoid rendering the<br />
dependent claim redundant). Independent claim 17<br />
further supports that proposition. It states that<br />
baffles are *1325 placed “projecting inwardly from<br />
the outer shell at angles tending to deflect projectiles<br />
that penetrate the outer shell.” That limitation would<br />
be unnecessary if persons of skill in the art<br />
understood that the baffles inherently served such a<br />
function. See TurboCare, 264 F.3d at 1123 (claim<br />
terms should not be read to contain a limitation<br />
“where another claim restricts the invention in<br />
exactly the [same] manner”). Dependent claim 6<br />
provides an additional requirement for the baffles,<br />
stating that “the internal baffles of both outer panel<br />
sections overlap and interlock at angles providing<br />
deflector panels extending from one end of the<br />
module to the other.” If the baffles recited in claim 1<br />
were inherently placed at specific angles, or<br />
interlocked to form an intermediate barrier, claim 6<br />
would be redundant.<br />
The specification further supports the conclusion that<br />
persons of ordinary skill in the art would understand<br />
the baffles recited in the '798 patent to be loadbearing<br />
objects that serve to check, impede, or<br />
obstruct flow. At several points, the specification<br />
discusses positioning the baffles so as to deflect<br />
projectiles. See '798 patent, col. 2, II. 13-15; id.,<br />
col. 5, II. 17-19. The patent states that one<br />
advantage of the invention over the prior art is that<br />
“[t]here have not been effective ways of dealing with<br />
these powerful impact weapons with inexpensive<br />
housing.” Id., col. 3, II. 28-30. While that<br />
statement makes clear the invention envisions baffles<br />
that serve that function, it does not imply that in order<br />
to qualify as baffles within the meaning of the claims,<br />
the internal support structures must serve the<br />
projectile-deflecting function in all the embodiments<br />
of all the claims. The specification must teach and<br />
enable all the claims, and the section of the written<br />
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description discussing the use of baffles to deflect<br />
projectiles serves that purpose for claims 2, 6, 17, and<br />
23, which specifically claim baffles that deflect<br />
projectiles. See In re Wright, 999 F.2d 1557, 1561<br />
(Fed.Cir.1993).<br />
The specification discusses several other purposes<br />
served by the baffles. For example, the baffles are<br />
described as providing structural support. The patent<br />
states that one way to increase load-bearing capacity<br />
is to use “at least in part inwardly directed steel<br />
baffles 15, 16.” '798 patent, col. 4, II. 14-15. The<br />
baffle 16 is described as a “strengthening triangular<br />
baffle.” Id., col. 4, line 37. Importantly, Figures 4<br />
and 6 do not show the baffles as part of an<br />
“intermediate interlocking, but not solid, internal<br />
barrier.” In those figures, the baffle 16 simply<br />
provides structural support for one of the walls, as<br />
depicted below:<br />
*1326<br />
Other uses for the baffles are listed in the<br />
specification as well. In Figure 7, the overlapping<br />
flanges “provide for overlapping and interlocking the<br />
baffles to produce substantially an intermediate<br />
barrier wall between the opposite [wall] faces”:<br />
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'798 patent, col. 5, II. 26-29. Those baffles thus<br />
create small compartments that can be filled with<br />
either sound and thermal insulation or rock and<br />
gravel to stop projectiles. Id., col. 5, II. 29-34. By<br />
separating the interwall area into compartments (see,<br />
e.g., compartment 55 in Figure 7), the user of the<br />
modules can choose different types of material for<br />
each compartment, so that the module can be “easily<br />
custom tailored for the specific needs of each<br />
installation.” Id., col. 5, II. 36-37. When material is<br />
placed into the wall during installation, the baffles<br />
obstruct the flow of material from one compartment<br />
to another so that this “custom tailoring” is possible.<br />
[23] The fact that the written description of the '798<br />
patent sets forth multiple *1327 objectives to be<br />
served by the baffles recited in the claims confirms<br />
that the term “baffles” should not be read restrictively<br />
to require that the baffles in each case serve all of the<br />
recited functions. We have held that “[t]he fact that<br />
a patent asserts that an invention achieves several<br />
objectives does not require that each of the claims be<br />
construed as limited to structures that are capable of<br />
achieving all of the objectives.” Liebel-Flarsheim,<br />
358 F.3d at 908; see also Resonate Inc. v. Alteon<br />
Websystems, Inc., 338 F.3d 1360, 1367<br />
(Fed.Cir.2003). Although deflecting projectiles is<br />
one of the advantages of the baffles of the '798<br />
patent, the patent does not require that the inward<br />
extending structures always be capable of performing<br />
that function. Accordingly, we conclude that a<br />
person of skill in the art would not interpret the<br />
disclosure and claims of the '798 patent to mean that<br />
a structure extending inward from one of the wall<br />
faces is a “baffle” if it is at an acute or obtuse angle,<br />
but is not a “baffle” if it is disposed at a right angle.<br />
B<br />
[24] Invoking the principle that “claims should be so<br />
construed, if possible, as to sustain their validity,”<br />
Rhine v. Casio, Inc., 183 F.3d 1342, 1345<br />
(Fed.Cir.1999), AWH argues that the term “baffles”<br />
should be given a restrictive meaning because if the<br />
term is not construed restrictively, the asserted claims<br />
would be invalid.<br />
While we have acknowledged the maxim that claims<br />
should be construed to preserve their validity, we<br />
have not applied that principle broadly, and we have<br />
certainly not endorsed a regime in which validity<br />
analysis is a regular component of claim<br />
construction. See Nazomi Communications, 403 F.3d<br />
at 1368-69. Instead, we have limited the maxim to<br />
cases in which “the court concludes, after applying<br />
all the available tools of claim construction, that the<br />
claim is still ambiguous.” Liebel-Flarsheim, 358<br />
F.3d at 911; see also Generation II Orthotics Inc. v.<br />
Med. Tech. Inc., 263 F.3d 1356, 1365 (Fed.Cir.2001)<br />
(“[C]laims can only be construed to preserve their<br />
validity where the proposed claim construction is<br />
‘practicable,’ is based on sound claim construction<br />
principles, and does not revise or ignore the explicit<br />
language of the claims.”); Elekta Instrument S.A. v.<br />
O.U.R. Scientific Int'l, Inc., 214 F.3d 1302, 1309<br />
(Fed.Cir.2000) (“having concluded that the amended<br />
claim is susceptible of only one reasonable<br />
construction, we cannot construe the claim differently<br />
from its plain meaning in order to preserve its<br />
validity”); E.I. du Pont de Nemours & Co. v. Phillips<br />
Petroleum Co., 849 F.2d 1430, 1434 (Fed.Cir.1988)<br />
(rejecting argument that limitations should be added<br />
to claims to preserve the validity of the claims). In<br />
such cases, we have looked to whether it is<br />
reasonable to infer that the PTO would not have<br />
issued an invalid patent, and that the ambiguity in the<br />
claim language should therefore be resolved in a<br />
manner that would preserve the patent's validity.<br />
That is the rationale that gave rise to the maxim in the<br />
first place. In Klein v. Russell, 86 U.S. (19 Wall.)<br />
433, 466, 22 L.Ed. 116 (1873), the owner of a<br />
reissued patent argued for a narrow construction of<br />
the patent, while the accused infringer argued for a<br />
broader construction. The Court noted that the law<br />
“required that the reissue should be for the same<br />
invention as the original patent.” Id. Because the<br />
reissue, which was granted under the predecessor to<br />
35 U.S.C. § 251, would have been improper under<br />
the broader construction, the Court “presumed the<br />
Commissioner did his duty” and did not issue an<br />
invalid patent. For that reason, among others, the<br />
Court construed the *1328 disputed claim language<br />
in a manner that “sustain[ed] the patent and the<br />
construction claimed by the patentee,” since that “can<br />
be done consistently with the language which he has<br />
employed.” Id. The applicability of the doctrine in a<br />
particular case therefore depends on the strength of<br />
the inference that the PTO would have recognized<br />
that one claim interpretation would render the claim<br />
invalid, and that the PTO would not have issued the<br />
patent assuming that to be the proper construction of<br />
the term.<br />
In this case, unlike in Klein and other cases in which<br />
the doctrine of construing claims to preserve their<br />
validity has been invoked, the claim term at issue is<br />
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not ambiguous. Thus, it can be construed without<br />
the need to consider whether one possible<br />
construction would render the claim invalid while the<br />
other would not. The doctrine of construing claims<br />
to preserve their validity, a doctrine of limited utility<br />
in any event, therefore has no applicability here.<br />
In sum, we reject AWH's arguments in favor of a<br />
restrictive definition of the term “baffles.” Because<br />
we disagree with the district court's claim<br />
construction, we reverse the summary judgment of<br />
noninfringement. In light of our decision on claim<br />
construction, it is necessary to remand the<br />
infringement claims to the district court for further<br />
proceedings.<br />
V<br />
With respect to Mr. Phillips's allegation of<br />
misappropriation of trade secrets, we agree with the<br />
panel's decision upholding the district court's ruling<br />
on that issue, in which the district court dismissed the<br />
trade secret claim on statute of limitations grounds.<br />
See Phillips, 363 F.3d at 1214-1216. Accordingly,<br />
based on the panel's disposition of that issue, we<br />
affirm the district court's dismissal of the trade secret<br />
claim. With respect to AWH's cross-appeal, we also<br />
agree with the panel's reasoning and its conclusion<br />
that the cross-appeal is improper. See id. at 1216.<br />
We therefore dismiss the cross-appeal.<br />
VI<br />
In our order granting rehearing en banc, we asked the<br />
parties to brief various questions, including the<br />
following: “Consistent with the Supreme Court's<br />
decision in Markman v. Westview Instruments, 517<br />
U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996),<br />
and our en banc decision in Cybor Corp. v. FAS<br />
Technologies, Inc., 138 F.3d 1448 (Fed.Cir.1998), is<br />
it appropriate for this court to accord any deference to<br />
any aspect of trial court claim construction rulings<br />
If so, on what aspects, in what circumstances, and to<br />
what extent” After consideration of the matter, we<br />
have decided not to address that issue at this time.<br />
We therefore leave undisturbed our prior en banc<br />
decision in Cybor.<br />
Each party shall bear its own costs for this appeal.<br />
AFFIRMED IN PART, REVERSED IN PART,<br />
DISMISSED IN PART, and REMANDED.<br />
LOURIE, Circuit Judge, concurring in part and<br />
dissenting in part, with whom PAULINE NEWMAN,<br />
Circuit Judge, joins.<br />
I fully join the portion of the court's opinion resolving<br />
the relative weights of specification and dictionaries<br />
in interpreting patent claims, in favor of the<br />
specification. I could elaborate more expansively on<br />
that topic, but Judge Bryson's opinion for the<br />
majority says it so well, there is little reason for me to<br />
repeat its truths. I also agree with the court that<br />
claims need not necessarily be limited to specific or<br />
preferred embodiments in the specification, although<br />
they are limited to what is *1329 contained in the<br />
overall disclosure of the specification.<br />
However, I do dissent from the court's decision to<br />
reverse and remand the district court's decision. The<br />
original panel decision of this court, which implicitly<br />
decided the case based on the priorities that the en<br />
banc court has now reaffirmed, interpreted the claims<br />
in light of the specification and found that the<br />
defendant did not infringe the claims. We affirmed<br />
the district court, which had arrived at a similar<br />
conclusion. The dissent from the panel decision<br />
relied on the “dictionaries first” procedure, which the<br />
court now has decided not to follow. Thus, while the<br />
claim construction issue had to be decided by the en<br />
banc court, I see no reason for the court, having<br />
reaffirmed the principle on which the district judge<br />
and the panel originally decided the case, to send it<br />
back for further review.<br />
The court premises its reverse-and-remand decision<br />
on the concept of claim differentiation and the<br />
reasoning that the contested term “baffle” need not<br />
fulfill all of the functions set out for it in the<br />
specification. Reasonable people can differ on those<br />
points. However, the court did not take this case en<br />
banc because the full court differed with the panel<br />
majority on those disputable criteria. It did so to<br />
resolve the claim construction issue, which it has now<br />
done so well. Having done so, I believe that it<br />
should simply affirm the district court's decision on<br />
the merits, consistently with that court's rationale and<br />
that of the panel that affirmed the district court,<br />
which it now adopts.<br />
I will not critique in detail particular statements the<br />
majority makes in rationalizing its reversal of the<br />
district court's decision, such as “that a person of skill<br />
in the art would not interpret the disclosure and<br />
claims of the '798 patent to mean that a structure<br />
extending inward from one of the wall faces is a<br />
‘baffle’ if it is at an acute or obtuse angle, but is not a<br />
‘baffle’ if it is disposed at a right angle,” or that “the<br />
patent does not require that the inward extending<br />
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structures always be capable of performing that<br />
function [deflecting projectiles]” in order to be<br />
considered ‘baffles'.<br />
I will simply point out that the specification contains<br />
no disclosure of baffles at right angles. Moreover, as<br />
the majority correctly states, a patent specification is<br />
intended to describe one's invention, and it is<br />
essential to read a specification in order to interpret<br />
the meaning of the claims. This specification makes<br />
clear that the “baffles” in this invention are angled.<br />
There is no reference to baffles that show them to be<br />
other than angled. The abstract refers to “bullet<br />
deflecting ... baffles.” Only angled baffles can<br />
deflect. It then mentions “internal baffles at angles<br />
for deflecting bullets.” That could not be clearer.<br />
The specification then refers several times to baffles,<br />
often to figures in the drawings, all of which are to<br />
angled baffles. A compelling point is that the only<br />
numbered references to baffles (15, 16, 26, 27, 30,<br />
and 31) all show angled baffles.<br />
The specification further states that steel panels<br />
“form the internal baffles at angles for deflecting<br />
bullets.” It states that the baffles are “disposed at<br />
such angles that bullets which might penetrate the<br />
outer steel panels are deflected.” It explains that if<br />
bullets “were to penetrate the outer steel wall, the<br />
baffles are disposed at angles which tend to deflect<br />
the bullets.” There is no specific reference in this<br />
patent to a baffle that is not angled at other than 90.<br />
While, as the majority states, the specification<br />
indicates that multiple objectives are achieved by the<br />
invention, none of the other objectives is dependent<br />
upon whether the baffles are at other than a 90 angle,<br />
whereas the constantly stated objective of *1330<br />
deflection of bullets is dependent upon such an angle.<br />
Finally, even though claim construction is a question<br />
of law, reviewable by this court without formal<br />
deference, I do believe that we ought to lean toward<br />
affirmance of a claim construction in the absence of a<br />
strong conviction of error. I do not have such a<br />
conviction in this case, after considering the district<br />
court's opinion and the patent specification.<br />
For these reasons, while I wholeheartedly join the<br />
majority opinion in its discussion and resolution of<br />
the “specification v. dictionaries” issue, I would<br />
affirm the decision below.<br />
MAYER, Circuit Judge, with whom PAULINE<br />
NEWMAN, Circuit Judge, joins, dissenting.<br />
Now more than ever I am convinced of the futility,<br />
indeed the absurdity, of this court's persistence in<br />
adhering to the falsehood that claim construction is a<br />
matter of law devoid of any factual component.<br />
Because any attempt to fashion a coherent standard<br />
under this regime is pointless, as illustrated by our<br />
many failed attempts to do so, I dissent.<br />
This court was created for the purpose of bringing<br />
consistency to the patent field. See H.R.Rep. No.<br />
312, 97th Cong., 1st Sess. 20-23 (1981). Instead, we<br />
have taken this noble mandate, to reinvigorate the<br />
patent and introduce predictability to the field, and<br />
focused inappropriate power in this court. In our<br />
quest to elevate our importance, we have, however,<br />
disregarded our role as an appellate court; the<br />
resulting mayhem has seriously undermined the<br />
legitimacy of the process, if not the integrity of the<br />
institution.<br />
In the name of uniformity, Cybor Corp. v. FAS<br />
Technologies, Inc., 138 F.3d 1448 (Fed.Cir.1998) (en<br />
banc), held that claim construction does not involve<br />
subsidiary or underlying questions of fact and that we<br />
are, therefore, unbridled by either the expertise or<br />
efforts of the district court. FN1 What we have<br />
wrought, instead, is the substitution of a black box, as<br />
it so pejoratively has been said of the jury, with the<br />
black hole of this court. Out of this void we emit<br />
“legal” pronouncements by way of “interpretive<br />
necromancy” FN2 ; these rulings resemble reality, if at<br />
all, only by chance. Regardless, and with a blind eye<br />
to the consequences, we continue to struggle under<br />
this irrational and reckless regime, trying every<br />
alternative-dictionaries first, dictionaries second,<br />
never dictionaries, etc., etc., etc.<br />
FN1. The Supreme Court did not suggest in<br />
affirming Markman v. Westview<br />
Instruments, Inc., 52 F.3d 967 (1995) (en<br />
banc), that claim construction is a purely<br />
legal question. 517 U.S. 370, 116 S.Ct.<br />
1384, 134 L.Ed.2d 577 (1996). It held only<br />
that, as a policy matter, the judge, as<br />
opposed to the jury, should determine the<br />
meaning of a patent claim. See Cybor, 138<br />
F.3d at 1464 (Mayer, C.J., dissenting)<br />
(explaining that “the [Supreme] Court chose<br />
not to accept our formulation of claim<br />
construction: as a pure question of law to be<br />
decided de novo in all cases on appeal”).<br />
FN2. See The Holmes Group, Inc. v.<br />
Vornado Air Circulation Sys., Inc., 535 U.S.<br />
826, 833, 122 S.Ct. 1889, 153 L.Ed.2d 13<br />
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(2002).<br />
Again today we vainly attempt to establish standards<br />
by which this court will interpret claims. But after<br />
proposing no fewer than seven questions, receiving<br />
more than thirty amici curiae briefs, and whipping<br />
the bar into a frenzy of expectation, we say nothing<br />
new, but merely restate what has become the practice<br />
over the last ten years-that we will decide cases<br />
according to whatever mode or method results in the<br />
outcome we desire, or at least allows us a seemingly<br />
plausible way out of the case. I am not surprised by<br />
this. *1331 Indeed, there can be no workable<br />
standards by which this court will interpret claims so<br />
long as we are blind to the factual component of the<br />
task. See Cooter & Gell v. Hartmarx Corp., 496<br />
U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359<br />
(1990) (“Fact-bound resolutions cannot be made<br />
uniform through appellate review, de novo or<br />
otherwise.” (quoting Mars Steel Corp. v. Cont'l Bank<br />
N.A., 880 F.2d 928, 936 (7th Cir.1989))). FN3<br />
FN3. The question asked but not answered<br />
by the court which might have allowed it to<br />
cure its self-inflicted wound was: “Question<br />
7. Consistent with the Supreme Court's<br />
decision in Markman v. Westview<br />
Instruments, Inc., 517 U.S. 370, 116 S.Ct.<br />
1384, 134 L.Ed.2d 577 (1996) and our en<br />
banc decision in Cybor Corp. v. FAS<br />
Technologies, Inc., 138 F.3d 1448<br />
(Fed.Cir.1998), is it appropriate for this<br />
court to accord any deference to any aspect<br />
of trial court claim construction rulings If<br />
so, on what aspects, in what circumstances,<br />
and to what extent”<br />
Federal Rule of Civil Procedure 52(a) states that<br />
“[f]indings of fact ... shall not be set aside unless<br />
clearly erroneous, and due regard shall be given to<br />
the opportunity of the trial court to judge of the<br />
credibility of witnesses.” According to the Supreme<br />
Court, this “[r]ule means what it says”-that findings<br />
of fact, even “those described as ‘ultimate facts'<br />
because they may determine the outcome of<br />
litigation,” are to be reviewed deferentially on<br />
appeal. FN4 Bose Corp. v. Consumers Union of United<br />
States, 466 U.S. 485, 498 & 501, 104 S.Ct. 1949, 80<br />
L.Ed.2d 502 (1984); see also Anderson v. Bessemer<br />
City, 470 U.S. 564, 575, 105 S.Ct. 1504, 84 L.Ed.2d<br />
518 (1985) ( “[R]eview of factual findings under the<br />
clearly-erroneous standard-with its deference to the<br />
trier of fact-is the rule, not the exception.”);<br />
Pullman-Standard v. Swint, 456 U.S. 273, 287, 102<br />
S.Ct. 1781, 72 L.Ed.2d 66 (1982) ( “Rule 52(a)<br />
broadly requires that findings of fact not be set aside<br />
unless clearly erroneous.”); United States v. United<br />
States Gypsum Co., 333 U.S. 364, 394, 68 S.Ct. 525,<br />
92 L.Ed. 746 (1948). *1332 Even those findings of<br />
fact based entirely on documentary evidence are<br />
entitled to deference. Anderson, 470 U.S. at 574,<br />
105 S.Ct. 1504 (“That [Rule 52(a) ] goes on to<br />
emphasize the special deference to be paid credibility<br />
determinations does not alter its clear command:<br />
Rule 52(a) ‘does not make exceptions or purport to<br />
exclude certain categories of factual findings from<br />
the obligation of a court of appeals to accept a district<br />
court's findings unless clearly erroneous.’ ” (quoting<br />
Pullman-Standard, 456 U.S. at 287, 102 S.Ct. 1781)).<br />
In short, we are obligated by Rule 52(a) to review the<br />
factual findings of the district court that underlie the<br />
determination of claim construction for clear error.<br />
FN4. Because some facts are so intertwined<br />
with a constitutional standard the Supreme<br />
Court has held that de novo review is<br />
appropriate. For example, whether a<br />
defendant has acted with actual malice in a<br />
defamation suit is reviewed de novo<br />
because, among other reasons, the scope of<br />
the First Amendment is shaped and applied<br />
by reference to such factual determinations.<br />
Bose, 466 U.S. at 502, 104 S.Ct. 1949<br />
(“[T]he content of the rule is not revealed<br />
simply by its literal text, but rather is given<br />
meaning through the evolutionary process of<br />
common-law adjudication.”). Similarly,<br />
whether there is reasonable suspicion to<br />
conduct an investigatory stop or probable<br />
cause to perform a search under the Fourth<br />
Amendment are reviewed without<br />
deference. Ornelas v. United States, 517<br />
U.S. 690, 696, 116 S.Ct. 1657, 134 L.Ed.2d<br />
911 (1996) (holding that the protections<br />
afforded by the Fourth Amendment are<br />
“fluid concepts that take their substantive<br />
content from the particular contexts in which<br />
the standards are being assessed”). The<br />
reasoning behind these limited exceptions<br />
surely does not apply to claim construction.<br />
While appearing from the perspective of this<br />
court's limited sphere of influence to be<br />
dreadfully important, claim construction<br />
does not implicate a constitutional value.<br />
Cf. Bose, 466 U.S. at 502, 104 S.Ct. 1949<br />
(“[T]he constitutional values protected by<br />
the rule make it imperative that judges-and<br />
in some cases judges of [the Supreme]<br />
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Court-make sure that it is correctly<br />
applied.”). This is illustrated by the fact<br />
that the outcome of a patent case, unlike a<br />
defamation or illegal search case, has little<br />
impact on how future cases are decided or<br />
on how future parties behave. Cf. id. at 501<br />
n. 17, 104 S.Ct. 1949 (“Regarding certain<br />
largely factual questions in some areas of<br />
the law, the stakes-in terms of impact on<br />
future cases and future conduct-are too great<br />
to entrust them finally to the judgment of the<br />
trier of fact.”). Even if claim construction<br />
did implicate a constitutional value, it,<br />
unlike the decisions underlying the First and<br />
Fourth Amendments, could readily be<br />
reduced, when distinguished from its factual<br />
underpinnings, to “a neat set of legal rules.”<br />
Ornelas, 517 U.S. at 695-96, 116 S.Ct. 1657<br />
(quoting Ill. v. Gates, 462 U.S. 213, 232,<br />
103 S.Ct. 2317, 76 L.Ed.2d 527 (1983)).<br />
While this court may persist in the delusion that<br />
claim construction is a purely legal determination,<br />
unaffected by underlying facts, it is plainly not the<br />
case. Claim construction is, or should be, made in<br />
context: a claim should be interpreted both from the<br />
perspective of one of ordinary skill in the art and in<br />
view of the state of the art at the time of invention.<br />
See Multiform Desiccants, Inc. v. Medzam, Ltd., 133<br />
F.3d 1473, 1477 (Fed.Cir.1998) (“It is the person of<br />
ordinary skill in the field of the invention through<br />
whose eyes the claims are construed.”). These<br />
questions, which are critical to the correct<br />
interpretation of a claim, are inherently factual.<br />
They are hotly contested by the parties, not by resort<br />
to case law as one would expect for legal issues, but<br />
based on testimony and documentary evidence. FN5<br />
During so called Markman “hearings,” which are<br />
often longer than jury trials, parties battle over<br />
experts offering conflicting evidence regarding who<br />
qualifies as one of ordinary skill in the art; the<br />
meaning of patent terms to that person; the state of<br />
the art at the time of the invention; contradictory<br />
dictionary definitions and which would be consulted<br />
by the skilled artisan; the scope of specialized terms;<br />
the problem a patent was solving; what is related or<br />
pertinent art; whether a construction was disallowed<br />
during prosecution; how one of skill in the art would<br />
understand statements during prosecution; and on<br />
and on. In order to reconcile the parties' inconsistent<br />
submissions and arrive at a sound interpretation, the<br />
district court is required to sift through and weigh<br />
volumes of evidence. While this court treats the<br />
district court as an intake clerk, whose only role is to<br />
collect, shuffle and collate evidence, the reality, as<br />
revealed by conventional practice, is far different.<br />
FN5. That most of the cases now appealed<br />
to this court are “summary judgments” is<br />
irrelevant. We have artificially renamed<br />
findings of fact as legal conclusions; the<br />
district courts have dutifully conformed to<br />
our fictional characterization, but this does<br />
not change the inherent nature of the<br />
inquiry. Of course, if the parties do not<br />
dispute the material facts, summary<br />
judgment is appropriate.<br />
Even if the procedures employed by the district court<br />
did not show that it is engaging in factfinding, the<br />
nature of the questions underlying claim construction<br />
illustrate that they are factual and should be reviewed<br />
in accordance with Rule 52(a). For each patent, for<br />
example, who qualifies as one of ordinary skill in the<br />
art will differ, just as the state of the art at the time of<br />
invention will differ. These subsidiary<br />
determinations are specific, multifarious and not<br />
susceptible to generalization; as such their resolution<br />
in one case will bear very little, if at all, on the<br />
resolution of subsequent cases. See Ornelas, 517<br />
U.S. at 703, 116 S.Ct. 1657 (“Law clarification<br />
requires generalization, and some issues lend<br />
themselves to generalization much more than<br />
others.”); Pierce v. Underwood, 487 U.S. 552, 561-<br />
62, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988) (“Many<br />
questions that arise in litigation are not<br />
amenable*1333 to regulation by rule because they<br />
involve multifarious, fleeting, special, narrow facts<br />
that utterly resist generalization.” (quoting Maurice<br />
Rosenberg, Judicial Discretion of the Trial Court,<br />
Viewed from Above, 22 Syracuse L.Rev. 635, 662<br />
(1971))); Icicle Seafoods, Inc. v. Worthington, 475<br />
U.S. 709, 714, 106 S.Ct. 1527, 89 L.Ed.2d 739<br />
(1986) (rejecting de novo review of factual questions,<br />
even when outcome determinative). That the<br />
determination of the meaning of a particular term in<br />
one patent will not necessarily bear on the<br />
interpretation of the same term in a subsequent patent<br />
illustrates this point; while the term is the same, the<br />
underlying factual context is different. It further<br />
proves that these questions (e.g., who qualifies as one<br />
of ordinary skill in the art and what was the state of<br />
the art at the time of invention, among others) are<br />
implicitly being determined in each case; because we<br />
refuse to acknowledge either their existence or<br />
importance, however, the manner of their resolution<br />
is never elucidated. Finally, that claim construction<br />
is dependent on underlying factual determinations<br />
has been verified by our experience, which shows<br />
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that reviewing these questions de novo has not<br />
clarified the law, but has instead “distort[ed] the<br />
appellate process,” causing confusion among the<br />
district courts and bar. See Cooter, 496 U.S. at 404,<br />
110 S.Ct. 2447 (quoting Pierce, 487 U.S. at 561, 108<br />
S.Ct. 2541); see also Koon v. United States, 518 U.S.<br />
81, 99, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996).<br />
Our purely de novo review of claim interpretation<br />
also cannot be reconciled with the Supreme Court's<br />
instructions regarding obviousness. While<br />
ultimately a question of law, obviousness depends on<br />
several underlying factual inquiries. Graham v. John<br />
Deere Co., 383 U.S. 1, 17, 86 S.Ct. 684, 15 L.Ed.2d<br />
545 (1966); see also Dennison Mfg. Co. v. Panduit<br />
Corp., 475 U.S. 809, 811, 106 S.Ct. 1578, 89 L.Ed.2d<br />
817 (1986) (holding that Rule 52(a) requires that the<br />
district court's subsidiary factual determinations<br />
should be reviewed for clear error); cf. Graver Tank<br />
& Mfg. Co. v. Linde Air Prods. Co., 336 U.S. 271,<br />
275, 69 S.Ct. 535, 93 L.Ed. 672 (1949) (holding that<br />
validity, while ultimately a question of law, is<br />
founded on factual determinations that are entitled to<br />
deference). “Under [section] 103, the scope and<br />
content of the prior art are to be determined;<br />
differences between the prior art and the claims at<br />
issue are to be ascertained; and the level of ordinary<br />
skill in the pertinent art resolved.” Graham, 383 U.S.<br />
at 17, 86 S.Ct. 684.<br />
To a significant degree, each of these factual<br />
inquiries is also necessary to claim construction.<br />
Before beginning claim construction, “the scope and<br />
content of the prior art [should] be determined,” id.,<br />
to establish context. The “differences between the<br />
prior art and the claims at issue [should] be<br />
ascertained,” id., to better define what the inventor<br />
holds out as the invention. And, the foundation for<br />
both the obviousness and claim construction<br />
determinations is “the level of ordinary skill in the<br />
pertinent art.” Id.; see Multiform, 133 F.3d at 1477.<br />
These underlying factual considerations receive the<br />
level of deference due under Rule 52(a) when<br />
considering obviousness, but they are scrutinized de<br />
novo in the claim construction context. As directed<br />
by the Supreme Court, however, it is especially<br />
important in the patent field, “where so much<br />
depends upon familiarity with specific scientific<br />
problems and principles not usually contained in the<br />
general storehouse of knowledge and experience,” to<br />
give deference to the district court's findings of fact.<br />
Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339<br />
U.S. 605, 609-10, 70 S.Ct. 854, 94 L.Ed. 1097<br />
(1950).<br />
*1334 While the court flails about in an attempt to<br />
solve the claim construction “conundrum,” the<br />
solution to our plight is straightforward. We simply<br />
must follow the example of every other appellate<br />
court, which, regarding the vast majority of factual<br />
questions, reviews the trial court for clear error. FN6<br />
This equilibrium did not come about as the result of<br />
chance or permissive appellate personalities, but<br />
because two centuries of experience has shown that<br />
the trial court's factfinding ability is “unchallenged.”<br />
Salve Regina Coll. v. Russell, 499 U.S. 225, 233, 111<br />
S.Ct. 1217, 113 L.Ed.2d 190 (1991); Inwood, 456<br />
U.S. at 856, 102 S.Ct. 2182 (“Determining the weight<br />
and credibility of the evidence is the special province<br />
of the trier of fact.”). Time has similarly revealed<br />
that it is more economical for the district court to find<br />
facts. Pierce, 487 U.S. at 560, 108 S.Ct. 2541<br />
(“Moreover, even where the district judge's full<br />
knowledge of the factual setting can be acquired by<br />
the appellate court, that acquisition will often come at<br />
unusual expense, requiring the court to undertake the<br />
unaccustomed task of reviewing the entire record<br />
....”).<br />
FN6. While jurisprudentially sound, the bar<br />
also supports this proposition, as evident by<br />
the many amici curiae briefs urging<br />
adherence to Rule 52(a).<br />
Therefore, not only is it more efficient for the trial<br />
court to construct the record, the trial court is better,<br />
that is, more accurate, by way of both position and<br />
practice, at finding facts than appellate judges.<br />
Anderson, 470 U.S. at 574, 105 S.Ct. 1504 (“The<br />
rationale for deference to the original finder of fact is<br />
not limited to the superiority of the trial judge's<br />
position to make determinations of credibility. The<br />
trial judge's major role is the determination of fact,<br />
and with experience on fulfilling that role comes<br />
expertise.”); Zenith Radio Corp. v. Hazeltine<br />
Research, Inc., 395 U.S. 100, 123, 89 S.Ct. 1562, 23<br />
L.Ed.2d 129 (1969). Our rejection of this<br />
fundamental premise has resulted, not surprisingly, in<br />
several serious problems, including increased<br />
litigation costs, needless consumption of judicial<br />
resources, and uncertainty, as well as diminished<br />
respect for the court and less “decisional accuracy.”<br />
Salve, 499 U.S. at 233, 111 S.Ct. 1217. We should<br />
abandon this unsound course. FN7<br />
FN7. There are some scenarios where it is<br />
difficult to weed facts from law, see<br />
Pullman-Standard, 456 U.S. at 288, 102<br />
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S.Ct. 1781, but claim construction is not one<br />
of them.<br />
If we persist in deciding the subsidiary factual<br />
components of claim construction without deference,<br />
there is no reason why litigants should be required to<br />
parade their evidence before the district courts or for<br />
district courts to waste time and resources evaluating<br />
such evidence. It is excessive to require parties, who<br />
“have already been forced to concentrate their<br />
energies and resources on persuading the trial judge<br />
that their account of the facts is the correct one,” to<br />
“persuade three more judges at the appellate level.”<br />
Anderson, 470 U.S. at 575, 105 S.Ct. 1504. If the<br />
proceedings before the district court are merely a<br />
“tryout on the road,” id. (quoting Wainwright v.<br />
Sykes, 433 U.S. 72, 90, 97 S.Ct. 2497, 53 L.Ed.2d<br />
594 (1977)), as they are under our current regimen, it<br />
is wasteful to require such proceedings at all.<br />
Instead, all patent cases could be filed in this court;<br />
we would determine whether claim construction is<br />
necessary, and, if so, the meaning of the claims.<br />
Those few cases in which claim construction is not<br />
dispositive can be remanded to the district court for<br />
trial. In this way, we would at least eliminate the<br />
time and expense of the charade currently played out<br />
before the district court.<br />
Eloquent words can mask much mischief. The<br />
court's opinion today is akin to *1335 rearranging the<br />
deck chairs on the Titanic-the orchestra is playing as<br />
if nothing is amiss, but the ship is still heading for<br />
Davey Jones' locker.<br />
C.A.Fed. (Colo.),2005.<br />
Phillips v. AWH Corp.<br />
415 F.3d 1303, 75 U.S.P.Q.2d 1321<br />
Briefs and Other Related Documents (Back to top)<br />
• 03-1286 (Docket) (Mar. 12, 2003)<br />
• 03-1269 (Docket) (Feb. 25, 2003)<br />
END OF DOCUMENT<br />
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405 F.3d 1367, 74 U.S.P.Q.2d 1586<br />
(Cite as: 405 F.3d 1367)<br />
Briefs and Other Related Documents<br />
United States Court of Appeals,Federal Circuit.<br />
The GILLETTE COMPANY, Plaintiff-Appellant,<br />
v.<br />
ENERGIZER HOLDINGS, INC., Defendant-<br />
Appellee.<br />
No. 04-1220.<br />
DECIDED: April 29, 2005.<br />
Rehearing and Rehearing En Banc Denied June 20,<br />
2005.<br />
Background: <strong>Patent</strong>ee filed a patent infringement<br />
suit asserting that the competitor's four-bladed razor<br />
infringed the claims of its patent for wet-shave safety<br />
razors with multiple blades. The United States<br />
District Court for the District of Massachusetts, Patti<br />
B. Saris, J., denied patentee's motion for a<br />
preliminary injunction, and patentee appealed.<br />
Holding: The Court of Appeals, Rader, Circuit<br />
Judge, held that claim language “comprising a group<br />
of first, second, and third blades” in patent<br />
encompassed more than only three-bladed razors.<br />
Vacated and remanded.<br />
“group of blades” as defined by the clear language of<br />
the claim, terms “first, second, and third” were terms<br />
to distinguish different elements of the claim, not<br />
terms supplying a numerical limit, and specification's<br />
reference defining the “invention” as encompassing<br />
“a plurality of blades,” eschewed any numerical limit<br />
on the number of blades.<br />
[2] <strong>Patent</strong>s 291 167(1.1)<br />
291 <strong>Patent</strong>s<br />
291IX Construction and Operation of Letters<br />
<strong>Patent</strong><br />
291IX(B) Limitation of Claims<br />
291k167 Specifications, Drawings, and<br />
Models<br />
291k167(1.1) k. Specification as<br />
Limiting or Enlarging Claims. Most Cited Cases<br />
Words or expressions of manifest exclusion or<br />
explicit disclaimers in patent specification are<br />
necessary to disavow claim scope.<br />
<strong>Patent</strong>s 291 328(2)<br />
291 <strong>Patent</strong>s<br />
291XIII Decisions on the Validity, Construction,<br />
and Infringement of Particular <strong>Patent</strong>s<br />
291k328 <strong>Patent</strong>s Enumerated<br />
291k328(2) k. Original Utility. Most Cited<br />
Cases<br />
6,212,777. Construed.<br />
Archer, Senior Circuit Judge, filed dissenting<br />
opinion.<br />
West Headnotes<br />
[1] <strong>Patent</strong>s 291 101(3)<br />
291 <strong>Patent</strong>s<br />
291IV Applications and Proceedings Thereon<br />
291k101 Claims<br />
291k101(3) k. Limitations in General. Most<br />
Cited Cases<br />
Claim language “comprising a group of first, second,<br />
and third blades” in patent for wet-shave safety<br />
razors with multiple blades encompassed more than<br />
only three-bladed razors; any subset of three blades<br />
in a blade unit meeting claim's definitions was a<br />
*1368 John E. Nathan, <strong>Paul</strong>, <strong>Weiss</strong>, <strong>Rifkind</strong>,<br />
<strong>Wharton</strong> & <strong>Garrison</strong> LLP, of New York, New York,<br />
argued for plaintiff-appellant. With him on the brief<br />
were Lewis R. Clayton, Daniel J. Leffell, Steven C.<br />
Herzog, and Kerry L. Quinn. Of counsel on the brief<br />
were William L. Patton, Jane E. Willis, Dalila A.<br />
Wendlandt, and Levina Wong, Ropes & Gray LLP,<br />
of Boston, Massachusetts.<br />
Randall G. Litton, Price, Heneveld, Cooper, Dewitt<br />
& Litton, of Grand Rapids, Michigan, argued for<br />
defendant-appellee. With him on the brief was<br />
Matthew J. Gipson. Of counsel on the brief were<br />
Richard D. Rochford, Jr. and Jason C. Kravitz, Nixon<br />
Peabody LLP, of Boston, Massachusetts, and<br />
Michael F. Orman, of Rochester, New York.<br />
Before MICHEL, Chief Judge, FN* ARCHER, Senior<br />
Circuit Judge, and RADER, Circuit Judge.<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
405 F.3d 1367 Page 2<br />
405 F.3d 1367, 74 U.S.P.Q.2d 1586<br />
(Cite as: 405 F.3d 1367)<br />
FN* <strong>Paul</strong> R. Michel assumed the position of<br />
Chief Judge on December 25, 2004.<br />
Opinion for the court filed by Circuit Judge RADER.<br />
Dissenting opinion filed by Senior Circuit Judge<br />
ARCHER.RADER, Circuit Judge.<br />
The Gillette Company (Gillette) owns U.S. <strong>Patent</strong><br />
No. 6,212,777 (issued April 10, 2001) (the '777<br />
patent) for wet-shave safety razors with multiple<br />
blades. Gillette sued Energizer Holdings, Inc.<br />
(Energizer) in the United States District Court for the<br />
District of Massachusetts alleging Energizer's<br />
QUATTRO® , a four-bladed wet-shave safety razor,<br />
infringes certain claims of the '777 patent. The<br />
district court denied Gillette's motion for a<br />
preliminary injunction because it found that the<br />
claims of the '777 patent covered only a three-bladed<br />
razor, and, consequently, Gillette did not show a<br />
reasonable likelihood of success on its claim of literal<br />
infringement by Energizer's four-bladed razor. The<br />
Gillette Co. v. Energizer Holdings, Inc., No. 03-<br />
11514-PBS, 2004 WL 3366162 (D.Mass. Jan. 15,<br />
2004). Because the district court erred in construing<br />
the claims of the '777 patent to cover only threebladed<br />
safety razors, this court vacates and remands.<br />
I.<br />
The '777 patent claims a disposable safety razor with<br />
a group of blades, each blade placed in a particular<br />
geometric position relative to the other blades of the<br />
group. Prior art razors with multiple blades shaved<br />
closer to the skin than two-bladed razors but had “a<br />
serious detrimental influence*1369 on other blade<br />
unit characteristics, most notably the drag forces<br />
experienced when the blade unit is moved over the<br />
skin, with the consequence that the overall<br />
performance of the blade unit [was] markedly inferior<br />
[compared to two-bladed razors] despite a closer<br />
shave being obtained. ” '777 patent, col. 1, II. 24-29.<br />
The inventive contributions of the '777 patent are<br />
varying progressively the exposure and spacing<br />
parameters of the blades to overcome the undesired<br />
drag forces produced by razors with multiple blades,<br />
not simply limiting the number of blades to three.<br />
“The blade exposure is defined to be the<br />
perpendicular distance or height of the blade edge<br />
measured with respect to a plane tangential to the<br />
skin contacting surfaces of the blade unit elements<br />
next in front of and next behind the edge.” Id. at col.<br />
1, II. 50-59. Specifically, the blade closest to the<br />
guard (leading blade) is positioned with a negative<br />
exposure to (i.e. recessed below) its tangential plane.<br />
Id. The blade closest to the cap (trailing blade) is<br />
positioned with a positive exposure to (i.e., extending<br />
above) its tangential plane. Id. A blade in between<br />
the leading and trailing blades is positioned with an<br />
exposure with respect to its tangential plane in<br />
between the exposures of the leading and trailing<br />
blades with respect to their respective tangential<br />
planes. Id. at col. 2, II. 28-40. The result is a<br />
generally “progressive exposure” of the blades with<br />
each of the identified blades shaving closer to the<br />
skin than the preceding blade. This blade<br />
configuration reduces the drag forces produced by the<br />
blades and equalizes the work performed by each<br />
successive blade. Id. at col. 1, II. 63-66.<br />
Additionally, the span marks the distance between<br />
successive blades. A progressive span would<br />
involve gradually increasing the spacing between the<br />
guard and the leading blade, each successive blade,<br />
and the trailing blade and the cap. See, e.g., id. at<br />
col. 2, II. 16-20. The progression of the blade span<br />
likewise reduces frictional drag, leading to a close<br />
and comfortable shave.<br />
Claim 1 of the '777 patent shows this progressive<br />
exposure innovation in shaving technology:<br />
1. A safety razor blade unit comprising a guard, a<br />
cap, and a group of first, second, and third blades<br />
with parallel sharpened edges located between the<br />
guard and cap, the first blade defining a blade edge<br />
nearest the guard having a negative exposure not less<br />
than -0.2 mm, and the third blade defining a blade<br />
edge nearest the cap having a positive exposure of<br />
not greater than +0.2 mm, said second blade defining<br />
a blade edge having an exposure not less than the<br />
exposure of the first blade and not greater than the<br />
exposure of the third blade.<br />
'777 patent, col. 4, II. 5-14.<br />
The Energizer QUATTRO® razor is the accused<br />
infringing device. The QUATTRO® employs a<br />
cartridge with a guard, a cap, and four blades. The<br />
leading blade has a negative exposure of not less than<br />
-0.2 mm; the trailing blade has a positive exposure of<br />
not greater than +0.2 mm. The QUATTRO®<br />
further has two middle blades with essentially the<br />
same exposure, which is greater than that of the<br />
leading blade and less than that of the trailing blade.<br />
In anticipation of Energizer's launch of the<br />
QUATTRO® , Gillette filed a patent infringement<br />
suit asserting that the QUATTRO® infringed the<br />
claims of the '777 patent. Shortly thereafter, Gillette<br />
moved for a preliminary injunction to enjoin<br />
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405 F.3d 1367 Page 3<br />
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(Cite as: 405 F.3d 1367)<br />
Energizer from making and selling the QUATTRO®<br />
.<br />
Following a two-day hearing, the district court denied<br />
Gillette's motion, finding that Gillette had not shown<br />
a reasonable likelihood of success on its claim of<br />
literal infringement. *1370Gillette, 2004 WL<br />
3366162, at *1. The trial court primarily based its<br />
decision on the conclusion that the terms “first,”<br />
“second,” and “third” of claim 1 limited the scope of<br />
that claim to a razor having solely three blades. Id.,<br />
slip op. at 11. Gillette now appeals, and this court<br />
has jurisdiction under 28 U.S.C. § 1292(c)(1).<br />
II<br />
The grant of a preliminary injunction under 35 U.S.C.<br />
§ 283 is within the discretion of the district court.<br />
This court reviews a preliminary injunction decision<br />
for an abuse of discretion. Novo Nordisk of N. Am.,<br />
Inc. v. Genentech, Inc., 77 F.3d 1364, 1367<br />
(Fed.Cir.1996). “An abuse of discretion may be<br />
established by showing that the court made a clear<br />
error of judgment in weighing relevant factors or<br />
exercised its discretion based upon an error of law or<br />
clearly erroneous factual findings.” Id.<br />
As the moving party, Gillette is entitled to a<br />
preliminary injunction if it shows: (1) a reasonable<br />
likelihood of success on the merits of its claims; (2)<br />
irreparable harm if an injunction is not granted; (3) a<br />
balance of hardships tipping in its favor; and (4) the<br />
injunction's favorable impact on the public interest.<br />
Reebok Int'l Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1555<br />
(Fed.Cir.1994). In order to demonstrate a likelihood<br />
of success on the merits, Gillette has to show that, in<br />
light of the presumptions and burdens that will inhere<br />
at trial on the merits, (1) Energizer likely infringes<br />
the '777 patent, and (2) the claims of the '777 patent<br />
will likely withstand Energizer's challenges to<br />
validity. Amazon.com, Inc. v. Barnesandnoble.com,<br />
Inc., 239 F.3d 1343, 1350 (Fed.Cir.2001). While<br />
Energizer raised issues of validity in opposition to<br />
Gillette's motion for a preliminary injunction, the<br />
district court held that Gillette did not demonstrate a<br />
reasonable likelihood of success on the threshold<br />
issue of literal infringement. Therefore, the trial court<br />
did not address the validity issues. Accordingly, the<br />
validity of the '777 patent is not before this court on<br />
appeal.<br />
To review Gillette's likelihood of success on its literal<br />
infringement claim, this court, as the trial court<br />
before it, must first determine the meaning and the<br />
scope of the claims on this preliminary record. See<br />
Oakley, Inc. v. Sunglass Hut Int'l, 316 F.3d 1331,<br />
1339 (Fed.Cir.2003) (“An assessment of the<br />
likelihood of infringement, like a determination of<br />
patent infringement at a later stage in litigation,<br />
requires a two-step analysis. First, the court<br />
determines the scope and meaning of the patent<br />
claims asserted. Second[ ], the properly construed<br />
claims are compared to the allegedly infringing<br />
device.”) (internal quotations, alterations, and<br />
citations omitted). “In construing claims, the<br />
analytical focus must begin and remain centered on<br />
the language of the claims themselves, for it is that<br />
language that the patentee chose to use to particularly<br />
point out and distinctly claim the subject matter<br />
which the patentee regards as his invention.”<br />
Interactive Gift Express, Inc. v. Compuserve, Inc.,<br />
256 F.3d 1323, 1331 (Fed.Cir.2001) (quoting 35<br />
U.S.C. § 112, 2); see also SRI Int'l v. Matsushita<br />
Elec. Corp., 775 F.2d 1107, 1121 n. 14<br />
(Fed.Cir.1985) (en banc ) (“Specifications teach.<br />
Claims claim.”).<br />
Claim construction requires this court to place the<br />
claim language in its proper technological and<br />
temporal context. The best tools for this enterprise<br />
are the various forms of intrinsic evidence and, when<br />
appropriate, extrinsic evidence. See Vitronics, Corp.<br />
v. Conceptronic, Inc., 90 F.3d 1576, 1582<br />
(Fed.Cir.1996). The intrinsic evidence, “i.e., the<br />
patent itself, including the claims, the specification<br />
and, if in evidence, the prosecution history ... is the<br />
most significant source of the legally operative<br />
meaning of disputed claim language.” Id. (internal<br />
citation omitted); see also *1371United States v.<br />
Adams, 383 U.S. 39, 49, 86 S.Ct. 708, 15 L.Ed.2d<br />
572 (1966) (“[I]t is fundamental that claims are to be<br />
construed in the light of the specifications and both<br />
are to be read with a view to ascertaining the<br />
invention.”); Astrazeneca v. Mutual Pharm. Co.,<br />
Inc., 384 F.3d 1333, 1336-37 (Fed.Cir.2004)<br />
(“[E]vidence intrinsic to the patent-particularly the<br />
patent's specification, including the inventors'<br />
statutorily-required written description of the<br />
invention-is the primary source for determining claim<br />
meaning.” (citing Bell Atl. Network Servs., Inc. v.<br />
Covad Communications Group, Inc., 262 F.3d 1258,<br />
1268 (Fed.Cir.2001); Vitronics, 90 F.3d at 1582)).<br />
[1] Applying this case law, this court must determine,<br />
on this preliminary record, whether the language<br />
“comprising ... a group of first, second, and third<br />
blades” in the '777 patent can encompass four-bladed<br />
safety razors (such as the QUATTRO® ) or is limited<br />
to solely three-bladed safety razors. As explained<br />
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(Cite as: 405 F.3d 1367)<br />
below, this court discerns that claim 1 uses the<br />
“open” claim terms “comprising” and “group of,” in<br />
addition to other language, to encompass subject<br />
matter beyond a razor with only three blades.<br />
Moreover, the specification's focus on blade<br />
exposures and express reference to “blade units with<br />
a plurality of blades,” '777 patent, col. 1, II. 3-6,<br />
shows as well that this invention covers razors with<br />
more than three blades.<br />
The objective of the invention of the '777 patent is to<br />
reduce drag forces in safety razors with more than<br />
two blades. See id. at col. 1, II. 24-37. The '777<br />
patent accomplishes this objective by progressively<br />
increasing the blade exposure and the blade span.<br />
Id. at col. 1, II. 37-59. Indeed, the specification<br />
specifically acknowledges that it is not the three<br />
blades themselves which solve the prior art problem<br />
of detrimental drag forces, but instead the<br />
arrangement of three blades in a particular spatial<br />
configuration, stating “the novel aspects of the<br />
present invention residing in the provision of three<br />
blades set in the blade unit set in particular<br />
dispositions with respect to each other and the guard<br />
and the cap.” Id. at col. 3, II. 16-19 (emphasis<br />
added). The written description likewise discusses<br />
these parameters with respect to the relative<br />
positioning of each of the three blades at length at<br />
column 1, line 60 through column 2, line 40. These<br />
principles of progressive blade exposure and<br />
progressive blade span could apply equally to four or<br />
five blades. Such a geometric arrangement of three,<br />
four, or even more blades will achieve a closer shave<br />
and, at the same time, minimize excess drag. It may<br />
be that a four-bladed safety razor is a less preferred<br />
embodiment. A four-bladed razor costs more to<br />
build, requires more parts, and adds more frictional<br />
drag compared to the three-bladed version.<br />
Nevertheless, a patentee typically claims broadly<br />
enough to cover less preferred embodiments as well<br />
as more preferred embodiments, precisely to block<br />
competitors from marketing less than optimal<br />
versions of the claimed invention.<br />
Indeed, the language of claim 1 of the '777 patent<br />
encompasses more than only three-bladed razors. At<br />
the outset, the open language of claim 1 embraces<br />
technology that may add features to devices<br />
otherwise within the claim definition. Moleculon<br />
Research Corp. v. CBS, Inc., 793 F.2d 1261, 1271<br />
(Fed.Cir.1986). The claim uses two terms to show<br />
this open-ended meaning. The word “comprising”<br />
transitioning from the preamble to the body signals<br />
that the entire claim is presumptively open-ended.<br />
Crystal Semiconductor Corp. v. TriTech<br />
Microelectronics Int'l, Inc., 246 F.3d 1336, 1347<br />
(Fed.Cir.2001); Innovad Inc. v. Microsoft Corp., 260<br />
F.3d 1326, 1333 (Fed.Cir.2001). Because the<br />
patentee invoked this open-ended treatment in claim<br />
1 of the '777 patent, the scope of claim 1<br />
encompasses all safety *1372 razors satisfying the<br />
elements set forth in claim 1. The addition of<br />
elements not recited in the claim cannot defeat<br />
infringement. See Crystal Semiconductor, 246 F.3d<br />
at 1348 (“[T]he transition ‘comprising’ creates a<br />
presumption that the recited elements are only a part<br />
of the device, that the claim does not exclude<br />
additional, unrecited elements. KCJ Corp. v. Kinetic<br />
Concepts, Inc., 223 F.3d 1351, 1356<br />
(Fed.Cir.2000).”).<br />
The claim element identifying the blades likewise<br />
uses another presumptively “open” claim term-<br />
“group of.” '777 patent, col. 4, I. 6. At the outset, the<br />
language “group of” does not place any limits or<br />
closed implications on the elements following this<br />
broad designation. Claim drafters often use the term<br />
“group of” to signal a Markush group. A Markush<br />
group lists specified alternatives in a patent claim,<br />
typically in the form: a member selected from the<br />
group consisting of A, B, and C. See Manual of<br />
<strong>Patent</strong> Examining Procedure § 803.2 (2004). A<br />
Markush group by its nature is closed. If an<br />
applicant tries to claim a Markush group without the<br />
word “consisting,” the PTO will insist upon the<br />
addition of this word to ensure a closed meaning.<br />
Thus, in order to “close” a Markush group, the PTO<br />
insists on the transition phrase “group consisting of.”<br />
See Abbott Labs. v. Baxter Pharm. Prods., Inc., 334<br />
F.3d 1274, 1280 (Fed.Cir.2003). Without the word<br />
“consisting” the simple phrase “group of” is<br />
presumptively open. If intending to limit the<br />
claimed invention to a three-bladed razor, the patent<br />
drafter would not have used the words “group of.”<br />
Rather, the drafter would have used the words “group<br />
consisting of,” or the simple formulation “and first,<br />
second, and third blades.” Because the drafter chose<br />
to use the open term “group of,” additional members<br />
in the element “group of ... blades” will not defeat<br />
infringement. In other words, a razor with two<br />
“second blades,” as in the QUATTRO® , will still<br />
fall within the literal language of the claim.<br />
The element at issue requires:<br />
a group of first, second, and third blades with parallel<br />
sharpened edges located between the guard and cap,<br />
the first blade defining a blade edge nearest the guard<br />
having a negative exposure not less than -0.2 mm,<br />
and the third blade defining a blade edge nearest the<br />
cap having a positive exposure of not greater than<br />
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(Cite as: 405 F.3d 1367)<br />
+0.2 mm, said second blade defining a blade edge<br />
having an exposure not less than the exposure of the<br />
first blade and not greater than the exposure of the<br />
third blade.<br />
'777 patent, col. 4, II. 5-14 (emphases added). This<br />
element clearly defines a “group of blades” as a<br />
subset of the total number of blades in the razor, and<br />
specifically identifies which blades of the razor are<br />
the “first, second, and third” blades of the subset.<br />
The first blade in the group is the blade “nearest the<br />
guard,” or leading blade. The third blade in the<br />
group is the blade “nearest the cap,” or trailing blade.<br />
The second blade is defined by its exposure, and<br />
must “hav[e] an exposure not less than the exposure<br />
of the first blade and not greater than the exposure of<br />
the third blade.” Given that the first and third blades<br />
must be the leading and trailing blades, respectively,<br />
and in light of the specification's discussion of a<br />
progressive blade exposure, the second blade must<br />
also be located between the first and third blades. See<br />
id. col. 1, I. 60-col. 2, I. 40 (discussing a progressive<br />
blade exposure from a first blade to a second and<br />
third blades). Thus, any blade in between the first<br />
and third blades and with an exposure greater than<br />
that of the first blade and less than that of the third<br />
blade is a “second” blade in the claimed subset of<br />
blades. The accused QUATTRO® device, in fact,<br />
has two “second blades” because both of *1373 the<br />
middle blades in the accused device meet the<br />
definition of the “second blade” set forth in the claim.<br />
Any subset of three blades in a blade unit meeting<br />
these definitions is a “group of blades” as defined by<br />
the clear language of the claim. This claim is not<br />
ambiguous. In fact, the patentee underscored this<br />
open-ended claim meaning by using both the openended<br />
transition phrase “comprising” for all elements<br />
of claim 1 as discussed above, and the open-ended<br />
claim term “group of” for each part of this element.<br />
The language of the claims depending from claim 1<br />
also support reading “comprising” and “group of” as<br />
open terms. Claim 2, which depends from claim 1,<br />
adds the limitation that “the span between the first<br />
blade edge and the guard is substantially smaller than<br />
a span between the edges of the first and second<br />
blades and the span between the edges of the second<br />
and third blades.” Id. at col. 4, II. 17-20 (emphases<br />
added). The patent drafter's use of “a span” between<br />
the first and second blades recognizes that more than<br />
one such span may exist. On the other hand, the<br />
drafter's use of “the span” to identify the span<br />
between the guard and first blade recognizes that<br />
only one such span is possible. FN1<br />
FN1. Dependent claims 9 and 10 use “the<br />
span” and “the exposure,” respectively, to<br />
refer to the span and exposure of the second<br />
blade. '777 patent, col. 4, II. 41-45. This<br />
definitive recitation of a single span and<br />
exposure likely limits these dependent<br />
claims to a single second blade, i.e., a threebladed<br />
embodiment of the invention.<br />
The terms “first, second, and third” are terms to<br />
distinguish different elements of the claim, not terms<br />
supplying a numerical limit. Thus, the “first,”<br />
“second,” and “third” blades need not necessarily<br />
appear in that order or necessarily limit the blade unit<br />
to only three blades. Instead, these ordinal terms<br />
designate different blades within the “unit” according<br />
to their location and elevation. The claim itself<br />
makes this distinction. The claim defines both the<br />
“first” and “third” blades in terms of their location<br />
relative to the guard and cap, respectively, and<br />
further specifies their respective elevations. The<br />
second blade is defined solely by its elevation and<br />
location between the leading and trailing blades.<br />
None of the blades in the “group” are defined by their<br />
consecutive order relative to the other blades.<br />
To make it abundantly clear that the reference to<br />
“first,” “second,” and “third” blades was not a serial<br />
or numerical limitation, the claim does not follow a<br />
consecutive order (i.e., it does not discuss the second<br />
blade after the first). The claim is thus clearly not<br />
using the ordinals-first, second, third-to show a<br />
consecutive numerical limit but only to distinguish or<br />
identify the various members of the group. The case<br />
law of this court supports this reading of the claim<br />
language “first, second, and third.” See 3M<br />
Innovative Props. Co. v. Avery Dennison Corp., 350<br />
F.3d 1365, 1371 (Fed.Cir.2003) (“use of the terms<br />
‘first’ and ‘second’ is common patent-law convention<br />
to distinguish between repeated instances of an<br />
element” and should not necessarily be interpreted to<br />
impose a serial limitation on a claim).<br />
The specification provides further support for<br />
interpreting claim 1 to encompass razors with more<br />
than three blades. The first sentence of the written<br />
description of the invention teaches that “the<br />
invention ... relates in particular to safety razors<br />
having blade units with a plurality of blades. ” '777<br />
patent, col. 1, II. 3-5 (emphasis added). This<br />
reference defines the “invention” to encompass “a<br />
plurality of blades,” thus eschewing any numerical<br />
limit on the number of blades. The written<br />
description buttresses this statement of the invention<br />
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through its use of the same *1374 open-ended “group<br />
of” language used in claim 1. Id. at col. 1, II. 37-40<br />
(“Thus, in accordance with the present invention<br />
there is provided a safety razor blade unit comprising<br />
a guard, cap and a group of three blades ....”)<br />
(emphasis added). The specification makes<br />
numerous references to a preferred embodiment of<br />
the invention with three blades, see, e.g., id. at col. 2,<br />
II. 50-53 and col. 4, II. 2-3, but that narrower<br />
embodiment does not impose a limit on the broader<br />
claim language as elucidated by the reference to “the<br />
invention” as embracing a “plurality of blades.” See<br />
Comark Communications v. Harris Corp., 156 F.3d<br />
1182, 1186 (Fed.Cir.1998) (refusing to import<br />
limitations from the specification to the claims);<br />
Sjolund v. Musland, 847 F.2d 1573, 1581<br />
(Fed.Cir.1988) (same); Texas Instruments, Inc. v.<br />
U.S. Int'l Trade Comm'n, 805 F.2d 1558, 1563<br />
(Fed.Cir.1986) (“This court has cautioned against<br />
limiting the claimed invention to preferred<br />
embodiments or specific examples in the<br />
specification.”).<br />
The prosecution of patents related to the '777 patent<br />
also supports reading claim 1 as an open claim. The<br />
defendant itself endorsed an open interpretation of<br />
“comprising” when it argued to the European <strong>Patent</strong><br />
Office (EPO) that a virtually identical claim in<br />
Gillette's European counterpart to the '777 patent<br />
would not exclude an arrangement with four or more<br />
blades. This blatant admission by this same<br />
defendant before the EPO clearly supports this court's<br />
holding that those skilled in the art would construe<br />
the claims of the '777 patent to encompass razors<br />
with more than three blades.<br />
[2] The district court adopted Energizer's argument<br />
that the numerous (approximately thirty) references<br />
to “three,” “third” and “tertiary” in the specification<br />
limit the scope of the claims. Gillette, 2004 WL<br />
3366162, at *5. However, “words or expressions of<br />
manifest exclusion” or “explicit” disclaimers in the<br />
specification are necessary to disavow claim scope.<br />
Housey Pharms., Inc. v. Astrazeneca UK Ltd., 366<br />
F.3d 1348, 1352 (Fed.Cir.2004); Liebel-Flarsheim v.<br />
Medrad, Inc., 358 F.3d 898, 906 (Fed.Cir.2004).<br />
Despite the numerous cites to three-bladed razors<br />
plucked from the written description, no statement in<br />
the patent surrenders or excludes a four-bladed razor.<br />
Neither the district court nor Energizer refers to the<br />
“manifest” or “explicit” exclusion test. This patent<br />
and its prosecution record fall far short of any kind of<br />
disclaimer or disavowal. Not only did the patentee<br />
claim the invention with two open-ended terms<br />
(“comprising” and “group of”), but the specification<br />
expressly teaches that the invention encompasses a<br />
“plurality of blades.” This court declines to import<br />
limitations to the claims from the specification absent<br />
a “manifest” or “explicit” exclusion. Id. The patentee<br />
did not disclaim razors with more than three blades at<br />
all, let alone “manifestly,” or “explicitly.” Rather<br />
the patentee opened its teachings of the invention in<br />
the specification with an express statement that the<br />
“invention” covers “blade units with a plurality of<br />
blades.” '777 patent, col. 1, II. 3-6. The applicant did<br />
not “manifestly” or “explicitly” disclaim blade units<br />
with a plurality of blades by expressly defining the<br />
invention in those exact terms. More important, the<br />
language of the claim itself, with its open transition<br />
phrases and use of ordinals to distinguish but not<br />
limit claim elements, shows that the invention<br />
embraces “a plurality of blades.”<br />
III<br />
Based on the preliminary record before this court, the<br />
district court erred in limiting the claims of the '777<br />
patent to encompass safety razors with solely three<br />
blades. Accordingly, this court vacates the district<br />
court's denial of a preliminary injunction on the<br />
grounds of Gillette's failure to show a likelihood of<br />
success on the merits of its *1375 claim. However,<br />
because the claim construction set forth in this<br />
opinion is preliminary and based upon an incomplete<br />
record, the district court will have every opportunity<br />
to review and revisit this claim construction during<br />
development of a full record. Indeed, this court<br />
recognizes the difficulty imposed on a trial court to<br />
construe claim terms based upon a preliminary<br />
“likelihood” record. See, e.g., CVI/Beta Ventures,<br />
Inc. v. Tura, LP, 112 F.3d 1146, 1160 n. 7<br />
(Fed.Cir.1997) (reversing its own earlier “likelihood”<br />
claim construction of terms that were appealed after a<br />
complete record); Bayer AG. v. Biovail Corp., 279<br />
F.3d 1340, 1349 (Fed.Cir.2002) (holding that it was<br />
premature for this court to engage in its own claim<br />
construction where the district court had not<br />
performed a comprehensive claim construction based<br />
on a complete record); Metaullics Sys. Co. v.<br />
Cooper, 100 F.3d 938 (Fed.Cir.1996) (declining to<br />
construe patent claims on appeal from a denial of a<br />
preliminary injunction).<br />
In light of the foregoing analysis, the decision of the<br />
district court is vacated and remanded for further<br />
proceedings consistent with this opinion, including<br />
analysis of Energizer's invalidity defenses raised in<br />
opposition to Gillette's motion for a preliminary<br />
injunction.<br />
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configuration. FN1<br />
COSTS<br />
Each party shall bear its own costs.<br />
VACATED and REMANDED<br />
ARCHER, Senior Circuit Judge, dissenting.<br />
Because the majority exalts form over substance in<br />
reaching its conclusion, specifically elevating<br />
claiming conventions over the clear teachings of the<br />
specification of U.S. <strong>Patent</strong> No. 6,212,777 (“the '777<br />
patent”), I dissent.<br />
I<br />
In construing a claim, we first look to the words of<br />
the claims, and these words are generally given their<br />
ordinary and customary meaning. See Vitronics<br />
Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582<br />
(Fed.Cir.1996). Our search for the proper meaning<br />
of claim terms does not stop there, however, because<br />
a patentee may choose to “use terms in a manner<br />
other than their ordinary meaning.” Id. Such a<br />
redefinition or limitation of a claim term need not be<br />
explicit. “In other words, the specification may<br />
define claim terms ‘by implication’ such that the<br />
meaning may be ‘found in or ascertained by a reading<br />
of the patent documents.’ ” Bell Atl. Network Servs.,<br />
Inc. v. Covad Communications Group, Inc., 262 F.3d<br />
1258, 1268 (Fed.Cir.2001) (quoting Vitronics, 90<br />
F.3d at 1582); see Astrazeneca v. Mutual Pharm.<br />
Co., Inc., 384 F.3d 1333, 1340 (Fed.Cir.2004)<br />
(explaining that a patent applicant need not expressly<br />
state “my invention does not include X” to indicate<br />
his exclusion of X from the scope of his patent).<br />
Thus, “the specification is always highly relevant to<br />
the claim construction analysis. Usually, it is<br />
dispositive; it is the single best guide to the meaning<br />
of a disputed term.” Vitronics, 90 F.3d at 1582<br />
(emphasis added). The majority eschews this<br />
teaching in our case law, instead focusing primarily<br />
on the ordinary and customary meaning of the claim<br />
terms.<br />
The construction of claim 1 of the '777 patent hinges<br />
on how the terms “comprising” and “group of” are<br />
construed. The majority follows claiming<br />
conventions and ascribes an open meaning to these<br />
terms. In doing this, the majority ignores the<br />
overwhelming teaching of the specification that the<br />
invention of the '777 patent is a razor limited to three<br />
blades arranged in the described claim<br />
FN1. The blade configuration refers to the<br />
described progressive and variable blade<br />
spans and blade exposures and the three<br />
blades' location relative to each other.<br />
*1376 Claim 1 reads “comprising a guard, a cap, and<br />
a group of first, second, and third blades”; it does not<br />
read “a group of blades comprising first, second, and<br />
third blades.” In this claim, the transition term<br />
“comprising” refers only to the total number of<br />
elements in the complete razor, allowing for a razor<br />
with additional elements besides the guard, the cap,<br />
and the three blade unit. See Spectrum Int'l, Inc. v.<br />
Sterilite Corp., 164 F.3d 1372, 1379 (Fed.Cir.1998);<br />
Moleculon Research Corp. v. CBS. Inc., 793 F.2d<br />
1261, 1271 (Fed.Cir.1986) (holding that a step which<br />
recites engaging “eight cube pieces as a composite<br />
cube” does not read on a step which engages more<br />
than eight cube pieces, despite the use of the<br />
transitional term “comprising”). For example, claim<br />
1 could include a safety razor with an additional<br />
guard or cap or some other element altogether.<br />
Because the transition term “ ‘[c]omprising’ is not a<br />
weasel word with which to abrogate claim<br />
limitations,” Spectrum Int'l, 164 F.3d at 1379-80, or<br />
to impermissibly expand a claim's scope, claim 1<br />
should not be construed as permitting a group with<br />
more than three blades simply because claim 1<br />
contains the open transition term “comprising” in its<br />
preamble when the entire specification points to the<br />
invention as being only a three-bladed razor with<br />
progressive blade exposure and span.<br />
The dependent claims themselves demonstrate that<br />
the blade unit of the invention contains only three<br />
blades-including a single second blade. Specifically,<br />
whenever the second blade is referred to individually,<br />
it is referred to singularly (“the edge of the second<br />
blade,” claim 6, ll. 2-3, claim 7, line 2; “the exposure<br />
of the second blade,” claim 10, line 2). Similarly,<br />
the dependent claims' use of the term “span”<br />
(singular) whenever the distance between the first<br />
and second blades and second and third blades is<br />
mentioned evidences that there can only be a single<br />
second blade: “a span between the edges of the first<br />
and second blades,” claim 5, line 2 (emphasis added);<br />
“a span between the edge of the third blade and the<br />
edge of the second blade,” claim 6, ll. 2-3 (emphasis<br />
added); “a span between the edge of the second<br />
blade and the edge of the first blade,” claim 7, ll. 2-3<br />
(emphasis added); “a span between the edges of the<br />
first and second blades and between the edges of the<br />
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second and third blades,” claim 8, ll. 2-3 (emphasis<br />
added); and “the span between edges of the second<br />
and third blades,” claim 9, line 2 (emphasis added).<br />
A blade unit including more than one second blade<br />
would contain “spans” (plural) between “the second<br />
blade” and the first or third blade-one between the<br />
first or third blade and the first second blade and one<br />
between that same first or third blade and the second<br />
blade. There simply could not be a single span<br />
between a first or third blade and two second blades.<br />
The majority states that the use of “a span” for<br />
describing the distance between the edges of the first<br />
and second blades and that between the edges of the<br />
second and third blades suggests that there can be<br />
more than one span for each. In other words, there<br />
can be a first span between the edge of the first blade<br />
and the edge of the first second blade and a second<br />
span between the edge of the first blade and the edge<br />
of the second second blade. Such an interpretation<br />
of “a span” is not consistent with the remainder of the<br />
claim language, however. Claims 5 and 8 state that<br />
this span is “substantially equal to 1.5 mm.” In a<br />
razor having two second blades as proposed by the<br />
majority, the first and second blades would have to<br />
be virtually in the same spot to satisfy this claim<br />
language (a configuration the majority does not even<br />
*1377 claim the specification supports), as the edge<br />
of each second blade would have to be substantially<br />
1.5 mm from the edge of the first blade. FN2 Thus,<br />
there can only be a single span between the edge of<br />
the first blade and the edge of the second blade and a<br />
single span between the edge of the third blade and<br />
the edge of the second blade. The majority's claim<br />
construction effectively replaces “span” with<br />
“spans”; this is not what is claimed.<br />
FN2. The same analysis applies to the<br />
distance between the edges of the third and<br />
second blades as described in claim 8.<br />
The specification similarly limits the invention to a<br />
blade unit having only three blades. The written<br />
description begins with an explanation of how twobladed<br />
safety razors have dominated the wet shaving<br />
industry. “Safety razors having blade units with two<br />
blades have in recent years been sold in very large<br />
numbers and are generally acknowledged to give a<br />
better quality shave, especially in terms of closeness,<br />
than single bladed razors.” '777 patent, col. 1, ll. 34-<br />
37. The specification then explains that a blade unit<br />
with more than two blades can provide a closer shave<br />
but notes that such a multi-bladed razor is not<br />
desirable for other reasons:<br />
Closeness of a shave obtained is only one parameter<br />
by which razor users judge the performance of a<br />
razor. Adding extra blades can have a serious<br />
detrimental influence on other blade unit<br />
characteristics, most notably the drag forces<br />
experienced when the blade unit is moved over the<br />
skin, with the consequence that the overall<br />
performance of the blade unit can be markedly<br />
inferior despite a closer shave being obtainable.<br />
Id. at col. 1, ll. 24-29. The specification then<br />
discloses that the inventors have discovered a<br />
particular blade geometry for a three-bladed razor so<br />
as to overcome the traditional shortcomings of razors<br />
having more than two blades. Specifically, the<br />
inventors found that adding a third blade positioned<br />
between the other two blades in a particular<br />
configuration improved closeness while adding only<br />
minimal drag:It has been found that with a blade unit<br />
comprising three blades, the frictional drag forces can<br />
be kept at an acceptable level while allowing an<br />
improved shaving efficiency, by setting the blades<br />
relative to each other and to guard and cap surfaces<br />
positioned in front of and behind the blade edges,<br />
according to a particular geometrical disposition.<br />
Id. at col. 1, ll. 32-37. As such, with the exception of<br />
the three-bladed razor having the claimed geometry,<br />
the specification actually discourages, or teaches<br />
away from, razors that have more than two blades.<br />
In this regard, the specification expressly cautions<br />
that “[a]dding extra blades [more than two] can have<br />
a serious detrimental influence on ... blade unit<br />
characteristics.” Id. at col. 1, ll. 25-27. The general<br />
summary or description of the invention thus<br />
describes a three-bladed razor with a certain blade<br />
configuration and criticizes other blade units having<br />
more than two blades.<br />
We have construed claims to be limited to one type<br />
of device where the written description has<br />
emphasized features of that device and criticized<br />
other similar devices. See Astrazeneca, 384 F.3d at<br />
1340 (citing SciMed Life Sys., Inc. v. Advanced<br />
Cardiovascular Sys., Inc., 242 F.3d 1337, 1340-45<br />
(Fed.Cir.2001) (construing claims to be limited to<br />
catheters with coaxial lumens where written<br />
description emphasized coaxial lumens as a feature of<br />
the invention and criticized catheters using other<br />
types of lumens)). Here, the inventors expressly<br />
state that using more than two blades in a safety razor<br />
is problematic. '777 patent, col. 1, ll. 24-31. They<br />
then *1378 explain that these problems are overcome<br />
by a three-bladed razor having blades arranged with<br />
progressive blade spans and blade exposures. Id. at<br />
col. 1, ll. 32-37. This discussion, which expressly<br />
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emphasizes certain features of the invention (a threeblade<br />
unit with the blades arranged in the described<br />
geometry) and impliedly criticizes other similar<br />
devices (blade units having more than two blades not<br />
having the same features), suggests the claims should<br />
be narrowly construed.<br />
In my view, therefore, the term “comprising” should<br />
not be read as encompassing a blade unit having<br />
more than three blades. This is made clear by the<br />
claims themselves and by the written description as<br />
described below. The traditional open claiming term<br />
“comprising” thus applies to the limitations of the<br />
razor as a whole, that is, the cap, the guard, and the<br />
blade unit and permits other elements included in the<br />
razor. However, it does not permit the expansion of<br />
the number of blades in the blade unit itself.<br />
Turning to the term “group of,” the written<br />
description makes clear that this term is not used as<br />
an open claiming term as Gillette argues. The term<br />
“group of” occurs only once in the written<br />
description when the patentee is describing the<br />
invention as a whole in the background section of the<br />
patent. The group is specifically described as three<br />
blades:<br />
Thus, in accordance with the present invention there<br />
is provided a safety razor blade unit comprising a<br />
guard, a cap and a group of three blades with parallel<br />
sharpened edges located between the guard and cap,<br />
the first blade defining the edge nearest the guard<br />
having an exposure not greater than zero, and the<br />
third blade defining the blade nearest the cap having<br />
an exposure not less than zero.<br />
'777 patent, col. 1, ll. 37-44 (emphasis added).<br />
While not referring again to the “group of” blades,<br />
the patentee consistently and frequently refers to his<br />
invention as a three-bladed safety razor. FN3 For<br />
example, when the written description speaks of the<br />
“blade unit” of the invention, FN4 the only type of<br />
blade unit identified is one having three blades:<br />
“blade unit comprising ... a group of three blades,”<br />
'777 patent, col. 1, ll. 39-40; “three-bladed blade<br />
unit,” id. at col. 1, line 54; “three bladed safety razor<br />
blade unit,” id. at col. 2, line 50; and “three blades<br />
set in the blade unit,” id. at col. 3, ll. 17-18. When<br />
explaining the basic structure of the invention, the<br />
specification discloses “the novel aspects of the<br />
present invention resid[e] in the provision of three<br />
blades set in the blade unit set in particular<br />
dispositions with respect to each other and the guard<br />
and cap.” (Id. at col. 3, ll. 16-19) (emphasis added).<br />
By stating that the unit (group) of three blades<br />
(disposed in the described manner) confers novelty to<br />
the invention disclosed in the '777 patent, the<br />
patentee clearly shows that he regards the invention<br />
to be a safety razor with a blade unit having exactly<br />
three *1379 blades with progressive exposure and<br />
span.<br />
FN3. It was represented to the district court,<br />
and noted in its opinion, that the word<br />
“three,” “third,” or “tertiary” is used in thirty<br />
different places in the mere three-columnlong<br />
specification of the '777 patent.<br />
Gillette, No. 03-11514-PBS, 2004 WL<br />
3366162, at *5. Additionally, nowhere in<br />
the specification is the possibility of a fourbladed<br />
razor even suggested. This supports<br />
a finding that the claims should be<br />
interpreted as limited to razors having only<br />
three blades. See Microsoft Corp. v. Multi-<br />
Tech Sys., Inc., 357 F.3d 1340, 1348<br />
(Fed.Cir.2004) (noting that the specification<br />
referred to transmitting data over a phone<br />
line roughly two dozen times and never<br />
suggested transmitting data through the use<br />
of a packet switched network).<br />
FN4. The patentee uses the term “blade<br />
unit” to describe the carrier of the blades of<br />
the invention. See '777 patent, col. 2, ll. 63-<br />
64 and representation thereof in Figs. 1 and<br />
2.<br />
The majority contends that a three-bladed razor is<br />
merely a preferred embodiment of the invention of<br />
the '777 patent, as opposed to the invention.<br />
However, the specification is replete with instances<br />
where the patentee described the invention as a razor<br />
having three blades with the described blade<br />
geometry. To this end, the specification states<br />
“[w]ith a three-bladed safety razor blade unit having<br />
the blades disposed as specified herein we have<br />
found an enhanced overall shaving performance in<br />
comparison to a two-bladed razor,” (id. at col. 2, ll.<br />
50-53) (emphasis added) (located immediately prior<br />
to the patentee's statement that “some specific<br />
embodiments of the invention are described below”);<br />
“it is ensured that an enhanced shaving efficiency is<br />
secured due to there being three sharpened blades,”<br />
(id. at col. 4, ll. 2-3) (emphasis added) (the final<br />
sentence of the written description which explains<br />
that “[w]ith the embodiments of the invention” this<br />
result is reached); “in accordance with the present<br />
invention there is provided a safety razor blade unit<br />
comprising a guard, a cap and a group of three<br />
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blades,” id. at col. 1, ll. 37-40 (emphasis added)<br />
(located in the background section of the patent).<br />
These statements are directed to the invention as a<br />
whole and suggest that three blades is a part of the<br />
invention, not merely a preferred embodiment. We<br />
have held that a claim term was properly construed in<br />
accordance with a limitation that was “repeatedly and<br />
consistently” described in the specification where<br />
“[t]hose statements, some of which [were] found in<br />
the ‘Summary of the Invention’ portion of the<br />
specification, [were] not limited to describing a<br />
preferred embodiment, but more broadly describe the<br />
overall inventions of [the] patent[ ].” Microsoft Corp.<br />
v. Multi-Tech Sys., Inc., 357 F.3d at 1346-48 (stating<br />
“the claims must be interpreted in light of the<br />
specification ... which repeatedly and consistently<br />
describes the local and remote systems of the claimed<br />
inventions as communicating directly over a<br />
telephone line” and holding that communications<br />
were restricted to being over a telephone line and<br />
excluded the use of a packet-switched network).<br />
Such is the case here.<br />
That a three-bladed razor is not merely a preferred<br />
embodiment of the invention of the '777 patent is<br />
further evidenced by the fact that the specification<br />
addresses only changes in the blade exposure and<br />
blade span, not the number of blades. Specifically,<br />
the '777 patent states:<br />
A steadily increasing blade exposure has been found<br />
most effective. Therefore, the value of the exposure<br />
of the secondary blade is ideally approximately half<br />
way between the exposure values for the primary and<br />
tertiary blades, and very satisfactory test results have<br />
been obtained with all three blade edges lying in a<br />
common plane. In most embodiments a secondary<br />
blade exposure substantially equal to zero will be<br />
very satisfactory. We recommend that the tertiary<br />
blade exposure be a positive value equal in<br />
magnitude to the negative exposure of the primary<br />
blade.<br />
. . . . .<br />
The span S1 of the primary blade 11 is from 0.5 to<br />
1.5 mm and is preferably substantially equal to 0.70<br />
mm. The span S2 of the secondary blade 12 and the<br />
span S3 of the tertiary blade 13 have the values in the<br />
range of 1.0 to 2.0 mm. They are shown [in FIG. 1]<br />
equal with a value substantially equal to 1.50 mm.<br />
The edge of the tertiary blade is at a distance S4<br />
substantially equal to 1.80 mm in front of the cap.<br />
Id. at col. 2, ll. 30-40, col. 3, ll. 25-32. (emphases<br />
added). Likewise, when describing “the preferred<br />
embodiment of the invention,” id. at col. 2, ll. 61-62,<br />
the specification describes the blade exposures of<br />
*1380 the primary and tertiary blades as being the<br />
variant factor, FN5 with the exposure of the primary<br />
blade being -0.04 mm and the exposure of the tertiary<br />
blade being +0.06 mm:<br />
FN5. In this embodiment the blade spans<br />
may also vary-i.e., within the same range as<br />
that describing the embodiment shown in<br />
FIG. 1 (“The spans S1, S2, S3, and S4 are<br />
the same as those mentioned above for FIG.<br />
1”). Id. at col. 3, ll. 43-44.<br />
A more favourable blade arrangement is shown in<br />
FIG. 2. The spans S1, S2, S3 and S4 are the same as<br />
those mentioned above for FIG. 1. The primary blade<br />
in this embodiment has an exposure of -0.04 mm, the<br />
exposure of the secondary blade 12 is zero, the edges<br />
of all three blades lying in a common plane P as in<br />
FIG. 1, and the exposure of the tertiary blade 13 is<br />
+0.06 mm. Thus, there is a progressive increase in<br />
blade exposure from the leading blade 11 to the<br />
trailing blade 13.<br />
Id. at col. 3, ll. 41-50 (emphases added). The<br />
consistent factor throughout these passages and the<br />
patent's drawings is the presence of three blades<br />
arranged with progressive blade exposures and blade<br />
spans. It is the value of the blade exposure and span<br />
that the inventors intended could vary, not number of<br />
blades in the configuration. Thus, a three-bladed<br />
razor is not merely a preferred embodiment of the<br />
invention; rather, it is the invention. Indeed,<br />
nowhere in the specification is the blade unit of the<br />
invention expressly described as having multiple<br />
blades in excess of three.<br />
The majority discusses at length that the claim terms<br />
“first,” “second,” and “third” do not import a<br />
sequential or finite meaning, thus allowing for two<br />
“second” blades positioned between the first and<br />
third blades, with the blades arranged having the<br />
described blade exposures and blade spans. Such a<br />
premise, however, assumes that a razor with four<br />
blades arranged with one blade configured as the<br />
claimed “first blade,” one blade configured as the<br />
claimed “third” blade, and the remaining two blades<br />
configured as the claimed “second” blade would<br />
achieve the same desirable results as a razor with<br />
only three blades (i.e., one “second blade”) arranged<br />
in the described geometry. Contrary to the<br />
majority's implication, FN6 there is absolutely no<br />
support in the specification for this assumption.<br />
Further, the inclusion of more than three blades is in<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
405 F.3d 1367 Page 11<br />
405 F.3d 1367, 74 U.S.P.Q.2d 1586<br />
(Cite as: 405 F.3d 1367)<br />
direct conflict with the specification's repeated and<br />
consistent reference to the invention as containing<br />
three blades, e.g., “the three-bladed unit of the<br />
invention,” “a three-bladed safety razor blade unit,”<br />
“three blades,” and “three sharpened blades.” FN7<br />
Finally, the text of the claim itself and the<br />
specification suggest only one second blade (i.e.,<br />
“said second blade,” id. col. 4, line 11 (emphasis<br />
added), “the secondary blade,” col. 3, lines 28, 46<br />
(emphases added)). By using “the” and the singular<br />
form of “blade,” the patentee showed his invention<br />
possessed only one second blade positioned between<br />
the blade closest to the cap and the blade closest to<br />
the guard. The patentee did not state “secondary<br />
blades,” which would be the situation if the invention<br />
included two secondary blades. Further, in the<br />
introductory section of the patent, when the patentee<br />
is defining “blade exposure,” he explains how to<br />
measure it in terms of “the three-bladed unit of the<br />
invention ...,” id. at col. 1, l. 54 (emphasis added). FN8<br />
The specification's prevalent references*1381 to a<br />
three-bladed razor and the claim's use of the singular<br />
“blade” show that there can only be one “first” blade,<br />
one “second” blade, and one “third” blade. Any<br />
other reading of the claim terms “first,” “second,”<br />
and “third” is counter to the very nature of the<br />
invention described and claimed in the '777 patent. FN9<br />
FN6. See majority op. at 1371.<br />
FN7. Indeed, given the majority's claim<br />
construction, which would allow for a<br />
second second blade, the district court on<br />
remand will now have to determine validity<br />
issues including that under 35 U.S.C. § 112<br />
1.<br />
FN8. See also supra at 1378 (quoting the<br />
'777 patent at col. 2, ll. 50-53 and col. 4, ll.<br />
2-3).<br />
FN9. The majority is correct that the use of<br />
the terms “first,” “second,” and “third” in a<br />
claim does not necessarily impart a<br />
sequential meaning to the items being<br />
claimed. However, here the balance of the<br />
language in claim 1 clearly demonstrates<br />
that the inventor intended a sequential<br />
relationship by saying that the second blade<br />
is located between the first and third blades.<br />
'777 patent, col. 4, ll. 7-11 (“[T]he first<br />
blade defining a blade edge nearest the<br />
guard ... and the third blade defining a blade<br />
edge nearest the cap.”).<br />
In sum, the patent specification 1) repeatedly and<br />
consistently teaches that the safety razor of the<br />
invention is one having three blades; 2) teaches<br />
preferred embodiments which vary the configuration<br />
of the blades but in no way changes the number of<br />
blades of the invention; and 3) discourages the use of<br />
more than two blades in a blade unit except for the<br />
three-bladed blade unit having the claimed geometry.<br />
I believe these teachings together clearly demonstrate<br />
that the inventors did not regard a blade unit with<br />
four blades arranged in the described geometry as<br />
their invention. Therefore, “comprising” and “group<br />
of” should not be construed to include a safety razor<br />
having more than three blades.<br />
The only support in the specification for the<br />
majority's position that “comprising” and “group of”<br />
should be given their conventional meaning is the<br />
following sentence: “This invention is concerned<br />
with safety razors, and relates in particular to safety<br />
razors having blade units with a plurality of blades<br />
defining parallel sharpened edges arranged to pass in<br />
turn over a skin surface being shaved.” Id. at col. 1,<br />
ll. 3-6 (emphasis added). This single, broad<br />
statement, not repeated or endorsed elsewhere in the<br />
patent's written description, cannot be read to expand<br />
the invention beyond what is explicitly described<br />
throughout the specification. In particular, it cannot<br />
rewrite the statements that the novelty of the<br />
invention “resid[es] in the provision of three blades<br />
set in the blade unit,” id. at col. 3, ll. 16-18, and that<br />
the goal of “an enhanced shaving efficiency is<br />
secured due to there being three sharpened blades,”<br />
id. at col. 4, ll. 2-3. The majority relies on this one<br />
instance of the use of the word “plurality” and<br />
conveniently ignores the repeated statements in the<br />
specification that the blade unit is composed of three<br />
blades. FN10<br />
FN10. Additionally, the fact that the terms<br />
“several blades,” “many blades,” and “extra<br />
blades” occur in the specification is<br />
irrelevant to the claim construction at issue<br />
here. These phrases are contained in a<br />
discussion of longstanding problems<br />
associated with multiple blades. As noted<br />
above, the specification states that the use of<br />
multiple blades has historically been<br />
problematic. The solution proposed in the<br />
'777 patent is the three-bladed blade unit of<br />
the invention with its three blades set in the<br />
blade unit in particular dispositions with<br />
respect to each other and the guard and the<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
405 F.3d 1367 Page 12<br />
405 F.3d 1367, 74 U.S.P.Q.2d 1586<br />
(Cite as: 405 F.3d 1367)<br />
cap.<br />
Finally, the majority's claim construction ignores the<br />
notice function of the specification. As the Supreme<br />
Court stated almost two hundred years ago, an<br />
object of the specification is, to put the public in<br />
possession of what the party claims as his own<br />
invention, so as to ascertain if he claim[s] any thing<br />
that is in common use, or is already known, and to<br />
guard against prejudice or injury from the use of an<br />
invention which the party may otherwise innocently<br />
suppose not to be patented. It is, therefore, for the<br />
purpose of warning an innocent purchaser or other<br />
person using a machine, of his infringement of the<br />
patent; *1382 and at the same time of taking from<br />
the inventor the means of practising upon the<br />
credulity or the fears of other persons, by pretending<br />
that his invention is more than what it really is, or<br />
different from its ostensible objects, that the patentee<br />
is required to distinguish his invention in his<br />
specification.<br />
Evans v. Eaton, 20 U.S. (7 Wheat.) 356, 434, 5 L.Ed.<br />
472 (1822) (emphases added). Anyone reading the<br />
'777 patent would be left with the indelible<br />
impression that the patentee had invented a threebladed,<br />
and only three-bladed, safety razor with<br />
blades having the described variable blade span and<br />
blade exposure. Only with a crystal ball could a<br />
competitor in the safety-razor industry have<br />
concluded that the '777 patent could cover a fourbladed<br />
razor.<br />
II.<br />
Certainly, claiming conventions demonstrate that<br />
claim terms such as “comprising” and “group of” are<br />
traditionally viewed as open claim terms. However,<br />
here, the specification makes abundantly clear that<br />
the invention of the '777 patent was a razor having<br />
three blades, no more, arranged in the described<br />
geometry. For this reason, I would affirm the district<br />
court's claim construction and its denial of Gillette's<br />
motion for a preliminary injunction.<br />
C.A.Fed. (Mass.),2005.<br />
Gillette Co. v. Energizer Holdings, Inc.<br />
405 F.3d 1367, 74 U.S.P.Q.2d 1586<br />
Briefs and Other Related Documents (Back to top)<br />
• 04-1220 (Docket) (Feb. 9, 2004)<br />
END OF DOCUMENT<br />
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
John E. Nathan<br />
Partner—<strong>Litigation</strong> Department, New York Office<br />
1285 Avenue of the Americas, New York, NY 10019-6064<br />
telephone 212.373.3156, facsimile 212.492.0156, email jnathan@paulweiss.com<br />
A partner in the <strong>Litigation</strong> Department and co-chair of the Intellectual Property<br />
<strong>Litigation</strong> Practice Group, John E. Nathan concentrates his practice on patent and<br />
trademark litigation. He is registered to practice before the U.S. <strong>Patent</strong> and Trademark<br />
Office.<br />
Mr. Nathan has been lead counsel in numerous patent and trademark cases for clients<br />
such as Gillette (whom he has represented for 35 years); Gillette’s subsidiaries<br />
Duracell, Braun and Oral-B; Time Warner; HBO and Johnson & Johnson. Many of his<br />
cases have involved jury trials.<br />
Cases representative of Mr. Nathan's practice include the following:<br />
Consumer Product <strong>Patent</strong> Cases<br />
• Shaving Products: Gillette v. Energizer Holdings (Schick), 405 F.3d 1367<br />
(2005) (infringement decision for Gillette; Gillette's patented "group" of three<br />
blades covers cartridges with four or five blades); counterpart litigations in the<br />
European <strong>Patent</strong> Office and Germany; Schick v. Gillette, No. 03:04-cv-00260<br />
(D. Conn.); Gillette v. Schick, No. 03 Civ. 12455 (D. Mass.); Gillette<br />
v. Sharper Image, No. 04-10898 (D. Mass.); Syndia v. Gillette, No. 01 C 2485<br />
(N.D. Ill. 2002) (jury trial); Tseng (Gillette) v. Doroodian (Arthur D. Little<br />
Enterprises), Interference No. 104,482 (2001); Wafer Shave v. Gillette, 857<br />
F.Supp. 112 (D. Mass. 1993), affirmed per curiam 26 F.3d 140 (Fed. Cir.<br />
1994) (summary judgment for Gillette on its laches and estoppel<br />
defenses); Arthur D. Little Enterprises and Doroodian v. Gillette, No. 99-399<br />
(D. Del.); Gillette v. American Safety Razor Company, No. 99-11063 (D.<br />
Mass.); Gillette v. American Safety Razor Company, No. 95-10680 (D.<br />
Mass.); Sharper Image v. Gillette, No. 98-4112 (N.D. Cal.); Gillette<br />
v. Warner-Lambert (Schick), No. 87-1567 (D. Mass.); S.C. Johnson<br />
v. Gillette, Nos. 83-2657 and 3201 (D. Mass); BIC v. Gillette, No. 76-375 (D.<br />
Del.); Gillette v. Williams, 360 F. Supp. 1171 (D. Conn. 1973)<br />
• Mascara Products: L’Oreal v. Estee Lauder, No. 04-1660 (D.N.J.) (pending)<br />
• Erasable Ink Pens: Scripto-Tokai v. Gillette, 788 F.Supp. 439 (C.D. Cal.<br />
1992), 1994-2 Trade Cases 70,821 (C.D. Cal. 1994) (jury trial)<br />
• Toothbrushes, Other Dental Products, Hair Dryers, Appliances,<br />
Antiperspirants: numerous cases for Gillette, Braun and Oral-B,<br />
including Philips v. Gillette, No. 04-859 (D. Del.); Dr. Key v. Oral-B, No.<br />
2:00-cv-288 (E.D. Tex.); Gillette v. FTS & Dawia, No. 02 CV 4176<br />
(S.D.N.Y.) and No. 01-7167 (S.D. Fla.); Gillette v. Tella-Tech, No. 02-20946
John E. Nathan<br />
(S.D. Fla.); Gillette v. Conair, No. 01-11190 (D. Mass.); Braun v. Salton, No.<br />
99 CV 11341 (D. Mass.); Braun v. Conair, No. 95-12273 (D. Mass.); Braun<br />
v. Helen of Troy, No. 96-11469 (D. Mass.); Braun v. Remington, No. 96-<br />
10080 (D. Mass.); Gillette v. Westwood Chemical, No. 96-10670 (D.<br />
Mass.); Braun v. Dr. Robinson, No. 96-12454 (D. Mass.); Gillette<br />
v. Thornton, No. 393 CV 01464 (D. Conn.)<br />
• Golf Shoe Cleats: numerous cases for Softspikes, including favorable<br />
decision of U.S. <strong>Patent</strong> and Trademark Office Board of <strong>Patent</strong> Appeals and<br />
Interferences resulting in allowance of basic patent on "spikeless" golf cleats<br />
(2001)<br />
• Feminine Products and Pregnancy Test Kits: numerous cases for Tambrands<br />
and Tampax<br />
• Non-Woven Fabrics: Du Pont v. Bloch, No. 77 Civ. 4866 (S.D.N.Y.)<br />
(represented Du Pont)<br />
Medical Device <strong>Patent</strong> Cases<br />
• Surgical Stapling: U.S. Surgical Corp. v. Hospital Products International &<br />
Alan Blackman, 701 F.Supp. 314 (D. Conn. 1988) (judgment for client USSC<br />
holding all four USSC patents in suit valid and infringed); counterpart<br />
litigations in Australia, Canada, U.K., France and Germany.<br />
• Hip Prostheses: Noiles v. Church, Interference No. 102,732 (1996) (priority<br />
of invention awarded to clients Noiles and Johnson & Johnson); Joint Medical<br />
Products v. DePuy, No. 3:95CV00576 (D. Conn.)<br />
• Knee Prostheses: Joint Medical Products v. Waldemar Link, No. 591CV778<br />
(D. Conn.); counterpart litigations in Germany.<br />
• Laser Cornea Shaping: Trokel v. L’Esperance, Interference No. 102,026<br />
Electrical <strong>Patent</strong> Cases<br />
• Hearing Aid Batteries: Rayovac v. Duracell and Gillette, No. 99-C-0272-C<br />
(W.D. Wis. 2000) (jury verdict and judgment of patent invalidity for Duracell<br />
and Gillette holding all three Rayovac patents in suit invalid)<br />
• Alkaline Batteries: Eveready v. Duracell and Gillette, No. 1:00CV0475<br />
(N.D. Ohio)<br />
2
John E. Nathan<br />
• Compact Discs: Thomson v. Time Warner, No. 94-83 (D. Del); Justice<br />
Records v. Warner Bros. Records, No. H 96-2069 (S.D. Tex.); Optical<br />
Recording v. Time Warner, No. 90-314 (D. Del); numerous CD and DVD<br />
licensing matters for Time Warner, Warner Music and Warner Home Video.<br />
• Audio Tape Cassette Technology: Duplitronics v. Time Warner, No. 1:93-<br />
cv-04652 (N.D. Ill.)<br />
• Color Correction Equipment: Corporate Communications Consultants<br />
v. HBO, No. 84 Civ. 4178 (S.D.N.Y.)<br />
• Word Processing: IBM v. Xerox, No. CA3-78-0210-G (N.D. Tex.); Bernier<br />
v. DeGeorge, Interference No. 99,564 (represented IBM in both cases)<br />
• Programmable Logic Controller System: Solaia Technology v. Gillette, No.<br />
02 C 4704 (N.D. Ill.)<br />
• Voltage Regulators: Superior Electric v. Raytheon, 306 F. Supp. 960<br />
(D.N.H. 1972)<br />
• Computers: Bunker Ramo v. IBM, No. 74 C 580 (N.D. Ill.) (represented<br />
IBM)<br />
• Stepping Motors: Superior Electric v. Sigma, No. 71 B-310 (D. Conn.);<br />
counterpart litigation in Germany<br />
• TV tuners: Sarkes Tarzian v. Mitsumi Electric and General Electric, No. 75-<br />
504-N (E.D. Va.) and No. 75-1981 (D.N.J.) (represented Mitsumi and GE)<br />
• Modems: Milgo v. Western Electric, No. 76-15-C2 (D. Kan.) (represented<br />
Western Electric)<br />
Chemical Cases<br />
• Red 40 Food Color: Warner-Jenkinson v. Allied Chemical, 567 F. 2d 184 (2<br />
Cir. 1977) (dec ision on declaratory relief); 477 F. Supp. 371 (S.D.N.Y. 1979),<br />
affirmed 633 F. 2d 208 (2 Cir. 1980) (trial and appeal sustaining client Allied<br />
Chemical’s patent)<br />
• Catalytic Cracking: Mobil v. W.R. Grace, 367 F. Supp. 207 (D. Conn. 1973);<br />
other related cases<br />
3
John E. Nathan<br />
Pharmaceutical Cases<br />
• Tetracycline: numerous cases for Bristol-Myers<br />
• Semi-Synthetic Penicillin (Ampicillin): Beecham v. Zenith Laboratories,<br />
No. 526-69 (D.N.J.) (represented Beecham)<br />
• Vitamin B12: Merck v. Chase, 273 F. Supp. 68 (D.N.J. 1967)<br />
Paper Machinery <strong>Patent</strong> Cases<br />
• Corrugated Paper Machinery: Marquip v. Fosber America and United<br />
Container Machinery, 198 F.3d 1363 (Fed. Cir. 1999) (summary judgment of<br />
non-infringement for client United Container); Mitsubishi Heavy Industries<br />
v. United Container Machinery, No. 97-C-780-C (W.D. Wis.)<br />
• Paper Stock Washers: Sulzer v. Black Clawson, No. 93 Civ. 8721<br />
(S.D.N.Y.) (represented Black Clawson)<br />
Trademark Cases<br />
• Home Box Office v. Showtime/The Movie Channel, 832 F.2d 1311 (2 Cir.<br />
1987) (HBO’s trademark rights upheld; disclaimers used by Showtime ruled<br />
insufficient)<br />
• Brune v. HBO, No. 02 Civ 5703 (S.D.N.Y.) (trial resulted in hung jury; case<br />
subsequently settled)<br />
• Shields Pictures v. Time4 Media, TTAB opposition proceedings on "Popular<br />
Science"<br />
• MasterCard International v. HBO, No. 99-4296 (S.D.N.Y.)<br />
• The Comedy Channel v. Home Box Office, No. 89-3095 (C.D. Cal.)<br />
• Duck Walk Vineyards, Inc. v. St. Helena Wine Co., Inc. d/b/a Duckhorn<br />
Vineyards, No. CV-01-4896 (E.D.N.Y.) (trademark infringement litigation<br />
involving the use of a duck image and the word "Duck" on wine labels)<br />
• Mermaid Seafoods v. Chicken of the Sea, No. 396-cv-02362 (D. Conn. 2000)<br />
(all trademark infringement claims against client Mermaid Seafoods dismissed<br />
with prejudice)<br />
4
John E. Nathan<br />
• Numerous trademark cases for Tambrands and Tampax, both in the U.S. and<br />
Germany<br />
Mr. Nathan is a member of bar associations that focus on patent and trademark<br />
litigation, including the Federal Circuit Bar Association, the New York Intellectual<br />
Property Law Association and the American Intellectual Property Law Association.<br />
He is also a member of the American Bar Association, The Association of the Bar of<br />
the City of New York and Federal Bar Council. He is listed in Euromoney Guide to<br />
the World’s Leading <strong>Patent</strong> Law Experts and Euromoney Guide to the World’s<br />
Leading Trademark Law Practitioners. He has lectured on patent law at the Columbia<br />
Graduate School of Business Administration (1996-1999) and the Columbia<br />
Department of Mechanical Engineering (1996-2002). He is a member of the Board of<br />
Advisors of The National Gallery for America’s Young Inventors.<br />
Mr. Nathan graduated from Yale Law School, where he was 18th in a class of 192. He<br />
was a member of the Yale Law Journal and was elected to the Order of the Coif. He is<br />
the author of "Novelty and Reduction to Practice: <strong>Patent</strong> Confusion," 75 Yale L.J.<br />
1194 (1966), which was awarded the 1966 prize of New York <strong>Patent</strong> Law<br />
Association.<br />
He holds a B.E. with High Honors in Mechanical Engineering (with a concentration in<br />
Electro-Mechanical Systems) from Yale University and was elected to Tau Beta Pi.<br />
5
Catherine Nyarady<br />
Partner—<strong>Litigation</strong> Department, New York Office<br />
1285 Avenue of the Americas, New York, NY 10019-6064<br />
telephone 212.373.3532, facsimile 212.492.0532, email cnyarady@paulweiss.com<br />
A partner in the <strong>Litigation</strong> Department, Catherine Nyarady specializes in patent and<br />
trademark litigation and is registered to practice in the United States <strong>Patent</strong> and<br />
Trademark Office. She has represented major corporate clients in patent litigations<br />
involving chemical catalysts, internet information storage and retrieval systems,<br />
consumer products, paper fabricating machinery, fiber optics technology, bar code and<br />
machine vision technology, semiconductor technology and medical devices.<br />
Representative <strong>Patent</strong> and Other Technology Cases<br />
• Citron Electronics Co. v. Toshiba Corp., No. 05CV10626 (S.D.N.Y.);<br />
(pending case involving DVD patent license agreement and subject patents)<br />
• L'Oreal v. Estee Lauder, No. 04-1660 (D.N.J.); (pending patent case on<br />
cosmetic products)<br />
• Gillette v. Schick, No. 03-11415 (D. Mass); (infringement decision for client<br />
Gillette; Gillette’s patented “group” of three blades covers cartridges with four<br />
or five blades)<br />
• Gillette v. Schick, No. 03-12455 (D. Mass); (patent case on female shaving<br />
products)<br />
• Schick v. Gillette, No. 304CV00260 (D. Conn.); (patent case on shaving<br />
products)<br />
• Arthur D. Little Enterprises and Doroodian v. Gillette, No. 99-11063 (D.<br />
Del.); (patent case on shaving products)<br />
• Plasma Physics Corp. v. Fujitsu et al., e.g., No. 99-8593; 00-2199; 02-3463,<br />
3473, 3475, 3484 (E.D.N.Y.); (multi-defendant litigations involving plasma<br />
enhanced chemical vapor deposition (PECVD) technology used to<br />
manufacture semiconductor chips and flat panel displays)<br />
• Symbol Technologies, Inc. et. al. v. Lemelson Medical, Education and<br />
Research Foundation, Ltd. Partnership, No. CV-S-01-701, -702, -703 (D.<br />
Nev.); (patent infringement litigation involving bar code and machine vision<br />
technology; judgment for client Symbol Technologies)<br />
• Photonetics, Inc. et al. v. New Focus, Inc., No. 01-493-SLR (D. Del.); (patent<br />
infringement litigation involving fiber optics technology)<br />
• NCR Corp. v. Netscape Communications Corp., No. 99-621-RRM (D. Del.);<br />
(patent infringement litigation involving internet method and information<br />
storage systems)
Catherine Nyarady<br />
• Rayovac Corp. v. Duracell, Inc. and The Gillette Co., No. 99-C-0272-C<br />
(W.D. Wis. 2000); (patent infringement litigation involving hearing aid<br />
batteries; jury verdict and judgment of patent invalidity for clients Duracell<br />
and Gillette holding all three Rayovac patents in suit invalid)<br />
• Marquip, Inc. v. Fosber America, Inc. et al., 198 F.3d 1363 (Fed. Cir. 1999);<br />
(patent infringement litigation involving corrugated cardboard downstackers;<br />
summary judgment of non-infringement for client United Container)<br />
• Compaq Computer Corp. v. eMachines, Inc. et al., No. H-99-2380 (S.D.<br />
Tex.); (patent infringement case involving computer technology)<br />
• Exxon v. Dow, No. M098CA107 (W.D. Tex.); (patent infringement litigation<br />
involving chemical catalysts)<br />
• Sumitomo Electric Lightwave Corp. v. Siecor Corp. et al., No. 1:96 CV 00944<br />
(M.D.N.C.); (patent litigation involving fiber optics technology)<br />
• Joint Medical Products Corp. v. DePuy, Inc. et al, No. 3:95CV00576 (D.<br />
Conn.) ; (patent litigation involving hip replacement technology)<br />
• BCP v. Engelhard, No. 95 Civ. 9219 (S.D.N.Y.); (patent infringement and<br />
trade secret theft litigation regarding air pollution technology)<br />
Representative Trademark Cases<br />
• Shields Pictures v. Time4 Media, Opposition Nos. 91160254, 91160270,<br />
91160271 (TTAB); (defended trademark opposition proceedings involving the<br />
Popular Science mark; oppositions withdrawn with prejudice following<br />
discovery)<br />
• Comedy Partners v. RTV Media Inc., No. 04 CV 00518 (S.D.N.Y.);<br />
(trademark infringement litigation involving television network name)<br />
• Brune v. Time Warner Entertainment Company, L.P. No. 02 Civ 5703<br />
(S.D.N.Y.); (defense of trademark infringement litigation; trial resulted in<br />
hung jury; case subsequently settled)<br />
• Duck Walk Vineyards, Inc. v. St. Helena Wine Co., Inc. d/b/a Duckhorn<br />
Vineyards, No. CV-01-4896 (E.D.N.Y); (trademark infringement litigation<br />
involving the use of a duck image and the word "Duck" on wine labels)<br />
• Mermaid Seafoods, Inc. v. Van Camp Seafoods Company, Inc., No. 396-cv-<br />
02362 (D. Conn. 2000); (trademark infringement case involving use of<br />
mermaid on seafood products; all trademark infringement claims against client<br />
2
Catherine Nyarady<br />
Mermaid Seafoods dismissed with prejudice following settlement during<br />
bench trial)<br />
Ms. Nyarady received her B.S. in Chemical Engineering from the Massachusetts<br />
Institute of Technology in 1993 where she was a T.J. Watson Scholar. She received<br />
her J.D. in 1996 from Cornell Law School where she was an editor of the Cornell<br />
Journal of Law and Public Policy and Chancellor of the Moot Court Board.<br />
Ms. Nyarady is a member of the Bar of New York, the United States District Courts<br />
for the Southern District and Eastern District of New York, the United States Courts<br />
of Appeals for the Second Circuit and Federal Circuit, and the United States Supreme<br />
Court. She is also a member of the Practising Law Institute's <strong>Patent</strong> Law Advisory<br />
Committee, the American Intellectual Property Law Association and The New York<br />
Intellectual Property Law Association.<br />
3