TransWeb, LLC v. 3M Innovative Properties Company, 3M Company


Docket No. 2014-1646

DYK, TARANTO, HUGHES
February 10, 2016

Brief Summary: Findings of invalidity based on prior public use / obviousness, non-infringement, inequitable conduct, and trebeled damages for antitrust violations affirmed.

Summary: Transweb sued for DJ of invalidity and non-infringement of 3M’s patents. A jury found the patents invalid based on TransWeb’s prior public use / obviousness and the DC found the patents unenforceable due to inequitable conduct (IE). 3M appealed, including the DC award of $26 million trebeled damages award to Transweb as antitrust damages. Regarding public use, the main issue was whether TransWeb’s Mr. Ogale handed out samples of filter material that would be prior art to 3M’s claims (US 6,397,458 and 6,808,551), which was based on Mr. Ogale’s testimony. 3M argued his testimony was not properly corroborated, i.e., “one particular detail” was not, but the FC panel explained that corroborating evidence need not “constitute[] definitive proof” and it only needs to “as a whole, make[] credible the testimony of the purported inventor with regard to conception and reduction to practice of the invention as claimed” (Fleming, FC 2014). It also noted corroborating evidence such as correspondence with a potential customer and TransWeb’s “patent application, filed at the same time as the expo”. 3M argued that even if the public use is prior art, the claims would not have been obvious because the cited patent would have discouraged a person from pursuing the claimed subject matter but the jury disagreed, and the FC panel found no error in that determination. It also found the jury was not unreasonable in rejecting 3M’s evidence of unexpected results and commercial success. Regarding IE, the opinion states that “[t]he expo samples present a definitional case of but-for materiality”. The claims were initially allowed but rejected once 3M notified the Examiner of TransWeb’s expo sample. The claims were then allowed again once “3M clarified its dubious assertion that the…samples were only received after signing a confidentiality agreement and thus were not prior art”. The FC panel found no error with the jury’s finding of intent to deceive based on emails and 3M employee testimony found not to be credible. Regarding the antitrust violation (Walker Process, US 1965 (Sherman Act liability for maintenance and enforcement of a knowingly/willingly/fraudulently-obtained patent (“Walker Process liability requires a higher, more specific showing of ‘knowing and willful fraud’ than the more inclusive inequitable conduct doctrine” although “[a]fter Therasense, the showing required…may be nearly identical.”) and all other Sherman Act elements)). 3M did not challenge this factor but only whether the DC “properly defined the relevant market for determining the dangerous power of monopoly power” (the third Sherman factor). The FC panel disagreed, finding sufficient evidence supporting the jury conclusion “that fluorinated material…form[s] a distinct market…from other filter media” and 3M’s geographic arguments improperly limited the geographic market to manufacturers in the US. The award of attorney’s fees to TransWeb was also found to be proper because those “flow[] from that which makes [3M’s] act unlawful…and are ‘attributable to [this] anti-competitive aspect of the practice under scrutiny” (Brunswick, US 1977; Atl. Richfield, US 1990).

This entry was posted in Antitrust, Inequitable Conduct, Public Use, Willfullness. Bookmark the permalink.

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