United States District Court, D. Delaware
Michael J. Flynn, Esq., Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE; Donald E. Reid, Esq., Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE; Pierre R. Yanney, Esq. (argued), Stroock & Stroock & Lavan LLP, New York, NY; Stephen E. Underwood, Esq., Stroock & Stroock & Lavan LLP, New York, NY, Attorneys for the Plaintiff.
James M. Lennon, Esq., Young, Conaway, Stargatt & Taylor LLP, Wilmington, DE; David E. Schmit, Esq. (argued), Frost Brown & Todd LLC, Cincinnati, Ohio, Attorneys for the Defendant.
RICHARD G. ANDREWS, District Judge.
Currently pending before the Court are various post-trial motions. Inventio AG moves the Court for judgment as a matter of law ("JMOL") or for a new trial on a litany of issues. (DJ. 583 & 584). ThyssenKrupp Elevator Corporation responded with three motions of its own: a motion for renewed judgment as a matter of law (D.I. 580), a motion for declaratory judgment of non-infringement (D.I. 581), and a motion to find one of the asserted patents in this case invalid for inequitable conduct and to declare the case "exceptional" under 35 U.S.C. § 285. (D.I. 582). For the reasons outlined below, Inventio's motion for JMOL is granted with respect to inventorship. The remainder of the motion is denied. The Court partly grants ThyssenKrupp's motion for a declaratory judgment of non-infringement and otherwise denies ThyssenKrupp's motions.
Both parties in this case are major players, or related to major players, in the elevator industry. The technology at issue relates to the phased modernization of conventional elevator systems in existing buildings. Two types of elevator systems are relevant for purposes of this lawsuit. The first is a conventional elevator system, in which the rider calls the elevator using the up or down buttons at the floor terminal and selects the destination floor once inside. The second is a destination dispatch system, in which the rider selects the desired floor at the floor terminal, or swipes an identification badge, and then the elevator system groups riders traveling to nearby floors into the same elevator. In this system, there are no buttons to select a floor inside the elevator car. By updating the technology in accordance with the patents' teaching, elevators can be converted from a conventional system to a destination dispatch system without forcing the complete shutdown of the elevator bank and the accompanying loss of working elevator capacity.
On November 21, 2008, Plaintiff Inventio AG filed this patent infringement action against ThyssenKrupp Elevator Americas Corp., ThyssenKrupp Elevator Corp., and ThyssenKrupp Elevator Manufacturing, Inc. (D.I. 1). The Court eventually granted summary judgment for the first and third defendants on all claims (D.I. 529), and thus the only defendant that went to trial was ThyssenKrupp Elevator Corp. ("Defendant"). Inventio accused three of ThyssenKrupp's elevator overlay modernization installations of infringing U.S. Patent Nos. 6, 935, 465 ("the '465 patent") and 6, 892, 861 ("the '861 patent"). (D.I. 397 at 5). The Court issued a lengthy claim construction opinion on June 15, 2010. (D.I. 135). The Court soon thereafter granted summary judgment to all defendants. (D.I. 163). The decision was reversed on appeal. (D.I. 179). After remand, on August 27, 2012, the case was reassigned to me. This Court construed two disputed patent terms on March 3, 2013 (D.I. 297) and revised several earlier constructions on January 14, 2014. (D.I. 525).
The case then progressed to the summary judgment stage. ThyssenKrupp filed motions for summary judgment of invalidity and non-infringement of both patents. (D.I. 394 & 396). Inventio responded with a motion for partial summary judgment of no invalidity for indefiniteness, written description, and best mode. (D.I. 413). The Court denied ThyssenKrupp's motion for summary judgment on invalidity, and granted in part Inventio's partial summary judgment motion with respect to indefiniteness and written description. (D.I. 504; D.I. 503 at p. 12). No part of ThyssenKrupp's motion for summary judgment of non-infringement was granted. (D.I. 539).
The Court held a five-day jury trial beginning on February 24, 2014 (D.I. 566, 567, 568, 569 & 570), at the conclusion of which the jury returned a verdict largely in favor of ThyssenKrupp. (D.I. 565). The jury concluded that ThyssenKrupp infringed claims 1-3 of the '465 patent, but that those claims were invalid as obvious and for failing to name the correct inventors.( Id. ). With respect to the '861 patent, the jury found that claims 1 and 3 were not infringed and were invalid as obvious, for failing to disclose the best mode, and for failing to name the correct inventors. ( Id. ). The jury also determined that the appropriate amount of reasonable royalty damages to compensate Inventio for the infringement was $40, 320, and that "Schroeder" was the inventor who was not named. ( Id. ).
Inventio now seeks judgment as a matter of law on obviousness, inventorship, best mode as to the '861 patent, infringement as to the '861 patent, and relief as to the damages award. (D.I. 583; D.I. 584 at pp. 1-4). In the alternative, Inventio moves the Court for a new trial under Federal Rule of Civil Procedure 59(a)(1), except as to the infringement issue. (D.I. 583; D.I. 584 at pp. 37-40; D.I. 590 at pp. 29-31). ThyssenKrupp responded with a JMOL motion for non-infringement of the '465 patent (D.I. 580) and a motion for declaratory judgment of non-infringement for all asserted claims. (D.I. 581). In addition, ThyssenKrupp seeks a finding that the '861 patent is unenforceable due to inequitable conduct and a declaration that this case is "exceptional" under 35 U.S.C. § 285. (D.I. 582). Each of these issues will be addressed in tum.
A. Judgment as a Matter of Law
Judgment as a matter of law is appropriate if "the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for [a] party" on an issue. FED. R. CIV. P. 50(a)(1). "Entry of judgment as a matter of law is a sparingly' invoked remedy, granted only if, viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find liability.'" Marra v. Phila. Hous. Auth., 497 F.3d 286, 300 (3d Cir. 2007) (citation omitted).
"To prevail on a renewed motion for JMOL following a jury trial, a party must show that the jury's findings, presumed or express, are not supported by substantial evidence or, if they were, that the legal conclusion(s) implied [by] the jury's verdict cannot in law be supported by those findings." Pannu v. Iolab Corp., 155 F.3d 1344, 1348 (Fed. Cir. 1998) (alterations in original) (internal quotation marks omitted). "Substantial' evidence is such relevant evidence from the record taken as a whole as might be accepted by a reasonable mind as adequate to support the finding under review." Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 893 (Fed. Cir. 1984).
In assessing the sufficiency of the evidence, the Court must give the non-moving party, "as [the] verdict winner, the benefit of all logical inferences that could be drawn from the evidence presented, resolve all conflicts in the evidence in his favor and, in general, view the record in the light most favorable to him." Williamson v. Consol. Rail Corp., 926 F.2d 1344, 1348 (3d Cir. 1991). The Court may "not determine the credibility of the witnesses [nor] substitute its choice for that of the jury between conflicting elements in the evidence." Perkin-Elmer Corp., 732 F.2d at 893. Rather, the Court must determine whether the evidence supports the jury's verdict. See Dawn Equip. Co. v. Ky. Farms Inc., 140 F.3d 1009, 1014 (Fed. Cir. 1998); Gomez v. Allegheny Health Servs. Inc., 71 F.3d 1079, 1083 (3d Cir. 1995) (describing standard as "whether there is evidence upon which a reasonable jury could properly have found its verdict"); 9B CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2524 (3d ed. 2008) ("The question is not whether there is literally no evidence supporting the party against whom the motion is directed but whether there is evidence upon which the jury might reasonably find a verdict for that party.").
Where the moving party bears the burden of proof, the Third Circuit applies a different standard. This standard "requires the judge to test the body of evidence not for its insufficiency to support a finding, but rather for its overwhelming effect.'" Fireman's Fund Ins. Co. v. Videfreeze Corp., 540 F.2d 1171, 1177 (3d Cir. 1976) (quoting Mihalchak v. Am. Dredging Co., 266 F.2d 875, 877 (3d Cir. 1959)). The Court "must be able to say not only that there is sufficient evidence to support the finding, even though other evidence could support as well a contrary finding, but additionally that there is insufficient evidence for permitting any different finding.'" Fireman's Fund Ins. Co., 540 F.2d at 1171 (quoting Mihalchak, 266 F.2d at 877).
B. Motion for a New Trial
Federal Rule of Civil Procedure 59(a)(1)(A) provides, in pertinent part: "The court may, on motion, grant a new trial on all or some of the issues-and to any party-... after a jury trial, for any reason for which a new trial has heretofore been granted in an action at law in federal court...." Among the most common reasons for granting a new trial are: (1) the jury's verdict is against the clear weight of the evidence, and a new trial must be granted to prevent a miscarriage of justice; (2) newly discovered evidence exists that would likely alter the outcome of the trial; (3) improper conduct by an attorney or the court unfairly influenced the verdict; or (4) the jury's verdict was facially inconsistent. See Zarow-Smith v. New Jersey Transit Rail Operations, Inc., 953 F.Supp. 581, 584-85 (D.N.J. 1997).
The decision to grant or deny a new trial is committed to the sound discretion of the district court. See Allied Chem. Corp. v. Daiflan, Inc., 449 U.S. 33, 36 (1980); Olefins Trading, Inc. v. Han Yang Chem. Corp., 9 F.3d 282, 289 (3d Cir.1993) (reviewing district court's grant or denial of new trial motion under the "abuse of discretion" standard). Although the standard for granting a new trial is less rigorous than the standard for granting judgment as a matter of law-in that the Court need not view the evidence in the light most favorable to the verdict winner-a new trial should only be granted where "a miscarriage of justice would result if the verdict were to stand, " the verdict "cries out to be overturned, " or where the verdict "shocks [the] conscience." Williamson, 926 F.2d at 1352-53.
1. Legal Standard
A claim is invalid as obvious "if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." 35 U.S.C. § 103(a). Obviousness is a question of law decided on the basis of the four Graham factors: (1) the level of ordinary skill in the art; (2) the scope and content of the prior art; (3) the differences between the prior art and the challenged claim; and (4) secondary considerations of non-obviousness. Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1360 (Fed. Cir. 2012) (citing Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17-18 (1966)).
In KSR International Co. v. Teleflex, Inc., the Supreme Court instructed courts to take an "expansive and flexible approach" to determining obviousness. 550 U.S. 398, 415 (2007). The Court emphasized, "The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results." Id. at 416. It also stated that "if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill." Id. at 417. Ultimately, "a court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions." Id.
In making this assessment, courts must consider whether there was a reason to combine the known elements in the fashion claimed by the patent at issue. Id. at 418. The reason can come from the prior art, the background knowledge of one of ordinary skill in the art, the nature of any problem or need to be addressed, market demand, or common sense. Id. at 418, 422. While motivation to combine is an issue of fact, district courts cannot accept a jury's finding that motivation is lacking when the motivation is evident in the prior art references themselves or "a matter of common sense." Wyers v. Master Lock Co., 616 F.3d 1231, 1243, 1245 (Fed. Cir. 2010). Obviousness must be proven by clear and convincing evidence. McGinley v. Franklin Sports, Inc., 262 F.3d 1339, 1349 (Fed. Cir. 2001) (citing Rockwell Int'l. Corp. v. United States, 147 F.3d 1358, 1364 (Fed. Cir. 1998)).
Inventio moves the Court for JMOL of nonobviousness. (D.I. 584 at p. 13). The Court will address the Graham factors in turn.
a. Level of the Ordinary Skill in the Art
Defendant argues that the person of ordinary skill in the art ("POSITA") would be a person "having relatively high skill level, especially familiarity with modernization elevator systems, destination-based dispatch systems, experience with temporary or transitional overlays, and an understanding of the modernization market." (D.I. 585 at p. 7, see D.I. 568 at 259-60). Plaintiff provided no argument or evidence as to the skill level and knowledge of a POSITA. The Court thus accepts Defendant's definition of a POSITA.
b. Scope and Content of the Prior Art
i. Historical Modernization
The Court finds that overlay modernization and phased modernization were known in the prior art and used for conventional to conventional modernization ( i.e., modernizing conventional elevators with new technology, but not switching to a destination dispatch system). Phased modernization involves spreading out the upgrade over time, thereby spreading out the cost. (D.I. 565 at 236). ThyssenKrupp's expert testified that phased modernization was known well before the '465 and the '861 patents were filed ( id ), and supported his opinion with prior art references. ( See DTX 17 at 9).
The Court further finds that "overlay modernization" was a common technique prior to the filing of the '465 and the '861 patents. An overlay is a circuit that allows a new group control system (such as a destination dispatch system) to communicate with existing elevator controllers by converting electrical signals. (D.I. 568 at 229-32). It acts, essentially, as a translator between the modem dispatch system and the existing elevator controls. ( Id at 232). Both Dr. Friedli, the inventor, and ThyssenKrupp's expert agreed that overlay modernization was a common technique used to update elevator control systems. (D.I. 566 at 247-48; D.I. 568 at 260-61). Furthermore, Defendant's expert testified, without contradiction, that temporary overlay for conventional to conventional modernization prior to the time of the Inventio patent "would have been something that a person of ordinary skill in the art could do, based on the fact that it had been done since 1982, as covered in all the different articles, the Fortune article and the Arora article and the Lustig article...." (D.I. 568 at 261).
Plaintiff argues that ThyssenKrupp's expert's testimony lacked credibility, as he was confusing, vague, and contradictory regarding the term "overlay." (D.I. 590 at 13). Plaintiff further claims that the expert's testimony was pure ipse dixit. ( Id. at p. 15). The Court disagrees. While the expert discussed various forms of overlay systems, as described in various pieces of prior art, the jury found his testimony persuasive, and there is no reason to doubt the jury's credibility assessment. Furthermore, the Court finds that the inventor was certainly a POSITA at the time of the invention. His description of what could be accomplished is highly persuasive. Finally, the accusation that the expert's testimony is ipse dixit simply fails, considering that the expert cited to the Fortune article, the Arora article, and the Lustig article as evidence that overlay modernization was well known at the time of the invention.
ii. 1985 Fortune Article (DTX 17)
This article discusses phased modernization and the use of overlay in the modernization. (DTX 17 at 3). The article explicitly predicts that destination dispatch will be the next form of elevator control. (DTX 17 at 1, 3-4) (describing "introduc[ing] circuits that will permit corridor call destination registration coupled with lobby sensors that will detect the number of people approaching or waiting for an elevator group"). This ...