Docket Nos. 2016-2599
NEWMAN, HUGHES, STOLL
Nov. 19, 2018
Brief summary: DC findings of no anticipation affirmed; damages award vacated (e.g., “damages calculated by applying a royalty rate to sales of non-accused lenses cannot support a jury’s verdict on damages”).
Summary: Enplas appealed DC finding that claim 20 of SSC’s US 6,007,209 and the claims of SSC’s US 6,473,554 directed to methods of backlighting display panels are not anticipated, denial of JMOL of no induced infringement and “that the jury’s damages award is excessive and not supported by the trial evidence.” The ‘209 and ‘554 patent claims approach backlighting by two different methods (‘209: “directing light rays emitted by plural light sources mounted on [the] internal bottom wall” of the display housing; ‘554: using “an illumination coupler”). Enplas and SSC “collaborated to manufacture lenses for SSC’s light bars, which are covered by SSC’s” patents, and “SSC presented testimony that…SSC employees informed Enplas that the end product…would be covered by SSC’s patents” and that SSC “understood that it would have an exclusive relationship with Enplas for sales of the lenses.” SSC later determined that “Enplas had provided the lenses to SSC competitors” and that the end products infringed the ‘209 and ‘554 patents, and sent Enplas a letter alleging induced and contributory infringement. Enplas then moved for a declaratory judgment (DJ) that the patents were invalid and not infringed. The DC denied Enplas’s motion for summary judgment (SJ) that ‘209 claim 20 was anticipated, and then held a jury trial regarding anticipation of the ‘554 patent and the infringement issues. The jury found the ‘554 claims were not anticipated and “awarded $4 million in damages for a one-time freedom-to-operate payment for the ‘554 patent and $70,000 for the ‘209 patent”, and the DC denied Enplas’s post-trial motions regarding the same. The FC panel agreed with the DC’s finding of no anticipation of ‘209 claim 20 because Enplas’s expert testimony “[a]t most…suggests that Gleckman could have been modified” to meet the claim limitations which “is not enough…for anticipation” (In re Smith, FC 2017 (anticipation “only if each and every element is found within a single prior art reference, arranged as claimed”); In re Chudik, FC 2017). The FC panel also explained that the parties presented “conflicting expert testimony”, that “the jury is permitted to make credibility determinations” (MobileMedia, FC 2015), and that it therefore found the finding of no anticipation to be supported by substantial evidence. Enplas argued the DC’s finding of induced infringement because SSC did not show “that it had specific intent to induced infringement in the” US. The FC panel found that the jury’s finding was supported by substantial evidence (35 USC 271(b) (“Whoever actively induces infringement of a patent shall be liable as an infringer.”) (DSU Med., FC 2006 (“specific intent and action to induce infringement must be proven”); Merial, FC 2012) since Enplas did not dispute it knew of that the product it sold to SSC were covered by the patents, and evidence “that it had a 50% worldwide market share” meaning it was likely some of the lenses would end up in the US, “manufactured lenses specifically for SSC’s light bars, but then sold them to others”, and provided instructions to users (Microsoft, FC 2014 (“evidence of the required mental state”). The FC panel acknowledged that “mere knowledge of a possible infringement is not enough” (DSU) but also wrote “that the evidence in this case, while not overwhelming, provides at least circumstantial evidence” (Water Techs., FC 1988; Lucent, FC 2009). The $4 million damages award for infringement of the ‘554 patent was vacated, however, because “damages calculated by applying a royalty rate to sales of non-accused lenses cannot support a jury’s verdict on damages” (FN3 explains that, although it does not apply here, “patentees may sometimes recover damages for ‘convoyed sales’, where an unpatented product is sold with the patented product…‘analogous to components of a single assembly’ (Rite-Hite, FC 1995)). Judge Newman dissented from the FC panel’s damages award decision, arguing that the jury’s verdict is supported by substantial evidence.