Docket No. 2016-1026, -1183
PROST, REYNA, HUGHES
December 6, 2016
Update (April 3, 2017): DC rulings on infringement (yes), invalidity (no), and damages affirmed. Remanded “insofar as the injunction reaches conduct by Cooler Master (regarding the covered products) that goes beyond abetting a new violation by CMI” since “a determination of the propriety of the injunction’s reach would benefit from further findings and, if sought and needed, further record development” (“The governing standards for reaching such conduct by persons not adjudicated liable for the underlying wrong, reflected in [FRCP] 65(d), are highly fact-specific.”)
Brief Summary: DC judgment of infringement, no invalidity and damages affirmed; injunction as it relates to supplier Cool Master remanded but maintained in place.
Summary: Asetek obtained a judgment of infringement of its US 8,240,362 and 8,245,764 (and no invalidity for obviousness, lack of written description or indefiniteness) related to “systems and methods for cooling the ‘central processing unit (CPU) or other processing unit of a computer system” and damages (14.5% reasonable-royalty rate) against CMI USA, and an injunction against CMI and the Taiwanese supplier Cooler Master. CMI and Cooler Master appealed the DC infringement and obviousness holdings, and CMI challenged the damages rulings. The FC panel “reject[ed] the appellants’ non-infringement argument”, “[a]pplying the ordinary meaning” because they did not provide the jury “an interpretation of the language in light of the specification and prosecution history” (Hewlett-Packard, FC 2003) (“The jury was entitled to find that the ‘heat exchanging interfaces’ in the accused products were ‘removably attached’ or ‘removably coupled’” and “could reasonably find the requirements met even though removing the ‘heat exchanging interfaces’ from the accused products would cause coolant to leak. There is nothing unreasonable about finding a component ‘removably attached’ if it can be detached in such as way that the device would function again if the component were reattached” (distinguishing this case from Dorel Juvenile, FC 2005). The FC panel also disagreed with the appellants’ obviousness arguments since “[n]o ordinary meaning or claim construction requires appellants’ conclusion” and “sufficient evidence supports the [DC’s] finding that a person of ordinary skill in the art would not consider Koga’s ‘sucking channel’ to be a ‘thermal exchange chamber.’” CMI’s challenge of the damages award was also rejected as it argued Asetek’s damages expert was not required to “prove that it would have made the infring[ing] sales ‘but for’ the infringement” as this is “a requirement not applicable to reasonable-royalty damages” (BIC Leisure Prods., FC 1993). In addition, the FC panel wrote, “CMI identifies no legal principle about predominance” of profits “as a factor in the reasonable royalty calculation” and therefore did not show error by the DC. And it found that “substantial evidence supports the jury’s finding that a hypothetical negotiation between Asetek and CMI would have resulted in a 14.5% reasonable royalty rate”. Both parties challenged the injunction because Cool Master was previously dismissed from the case and “the injunction is too broad in scope insofar as [it] reaches Cool Master’s conduct…other than conduct that abets a new violation by CMI, the only party adjudicated liable for infringement.” The first argument was rejected because the dismissed “claim” and that of the injunction were not the same; as such, claim preclusion does not apply (Dow Chems., FC 2015). It agreed the second argument may have merit and remanded it for reconsideration (“an injunction may not ‘make punishable the conduct of persons who act independently and whose rights have not been adjudged” (Regal Knightwear, US 1945); “the non-liable party ‘must either abet the [liable party], or must be legally identifiable with him” (Additive Controls “I”, FC 1996), or “the non-liable person is a successor of the liable person” (Golden State, US 1973)), but kept the injunction in place. Judge Prost’s dissent argued the “the portions of the injunction that improperly reach Cooler Master…in its own capacity” should be vacated.