Bait, Switch, and Retrial: Federal Circuit Rebukes Trial Arguments that Reneged on Prior Representations
In Magēmā Technology LLC v. Phillips 66, Appeal No. 24-1342, the Federal Circuit held that a district court abused its discretion by permitting a defendant to argue to a jury that actual testing was required to show infringement, after the same party successfully opposed a motion to compel by representing such testing was not necessary.
Magēmā sued Phillips for infringement of its patent directed to a low-sulfur heavy marine fuel oil (“HMFO”)—a fuel used in large, ocean-going cargo ships. The asserted claims required that, before a process called hydroprocessing, the HMFO must have a flashpoint of at least 140°F. During discovery, Magēmā moved to compel Phillips to produce actual flashpoint testing data. However, Phillips successfully opposed the motion to compel, arguing that actual testing would be too dangerous and representing that Magēmā could instead rely on a generally accepted formula to estimate the flashpoint temperature. But on the eve of trial, Magēmā learned that Phillips, contrary to its representations, planned to argue that actual testing was required and that formula estimates were insufficient to prove infringement. Magēmā objected to Phillips presenting its actual-testing theory at trial, but the district court overruled the objection. At trial, Phillips repeatedly argued that actual testing was required to demonstrate the flashpoint limitation. The jury returned a noninfringement verdict. Magēmā then moved for a new trial, which the district court denied. Although the district court acknowledged Phillips’ actual-testing argument was “improper and prejudicial,” the district court found it was harmless error because the jury could have found noninfringement based on other claim limitations.
On appeal, Magēmā argued that the district court abused its discretion in denying the motion for new trial. The Federal Circuit agreed that Phillip’s actual-testing argument was both improper and prejudicial, but did not agree that it was harmless error. The Federal Circuit found that Phillips “sandbagged Magēmā right before trial with a bait-and-switch” by reneging on its prior representations that actual testing was not required and that formula estimates were sufficient. Further, the Federal Circuit determined that the error was not harmless because the case was submitted to the jury on a general verdict and the Federal Circuit could not determine whether the jury based its verdict on the improper actual-testing argument or on a different issue. Thus, the Federal Circuit reversed the district court’s denial of the motion for new trial and remanded for a new trial.
Expert Testimony Fails to Support Jury’s Infringement Verdict
In Finesse Wireless LLC v. AT&T Mobility LLC, Appeal No. 24-1039 the Federal Circuit held that unclear and internally inconsistent expert testimony was not substantial evidence that supported a jury’s infringement verdict.
Finesse sued AT&T alleging AT&T’s use of Nokia radios infringed two of Finesse’s patents: the ’134 patent and the ’775 patent. Nokia intervened. A jury found all asserted claims in Finesse’s patents were valid and infringed, and awarded damages. AT&T and Nokia moved for judgement as a matter of law (JMOL) of noninfringement, JMOL on damages, and a new trial. The district court denied those motions. AT&T and Nokia appealed.
The Federal Circuit reversed. It held that the jury’s infringement verdict was not supported by substantial evidence. With respect to the ’134 patent, the Federal Circuit found Finesse’s expert testimony was unclear and contradictory as to whether the accused radios’ receiver sampled both “signals of interest” and “interference generating signals.” With respect to the ’775 patent, the Federal Circuit held that no reasonable jury could have found the accused radios perform seven multiplications, as claimed, when a document Finesse’s expert relied on showed only three multiplications. The Federal Circuit reversed the denial of JMOL of noninfringement and vacated the damages award.
Cooperation with Restriction Requirement May Result in Disavowal of Claim Scope
In Focus Products Group International, LLC v. Kartri Sales Co., Inc., Appeal No. 23-1446, the Federal Circuit held that repeatedly acquiescing to an examiner’s restriction requirement and characterization of the claims without objection may result in disavowal of claim scope.
Focus Products Group sued Marquis Mills and Kartri Sales for infringement of patents relating to hookless shower curtains that used rings to receive the shower rod, among other trademark and trade dress claims. The district court granted summary judgment that Marquis’ and Kartri’s accused products—shower curtains having incorporated rings with flat upper edges—infringed the patents.
On appeal, Marquis argued, among many other issues, that the district court erred because Focus disavowed shower curtains incorporating rings with a flat upper edge during prosecution. The Federal Circuit agreed. As originally filed, the patents’ parent application contained claims covering different embodiments of shower curtain rings—e.g., rings with a projection, extension or finger, and rings with a flat upper edge, among others. The examiner characterized the claims as directed to patentably distinct species and issued a restriction requirement. Focus elected rings with an offset slit and/or new finger configurations and added new claims directed to that species, including a claim that recited a ring with a “flat upper edge.” However, the examiner identified the “flat upper edge” claim as drawn to a non-elected species and determined that claim was withdrawn from consideration. Focus did not dispute the examiner’s withdrawal of that claim and continued to prosecute the non-withdrawn claims. In a Notice of Allowance, the examiner gave Focus a final chance to challenge the withdrawal of the “flat upper edge” claim, but Focus did not do so. The Federal Circuit held that by cooperating with the examiner’s repeated demands to exclude rings with a flat upper edge, in keeping with the original restriction requirement, Focus made it clear that it accepted the narrowed claim scope for the patents. Further, because there was no dispute that Marquis’ accused products included flat upper edges, the Federal Circuit reversed the summary judgment of infringement.
Notably, although both Marquis’ and Kartri’s accused products had flat-topped rings, the Federal Circuit only reversed the infringement finding as to Marquis. The two appellants originally filed separate, noncompliant briefs that incorporated arguments from one brief to the other. Kartri’s brief focused on the trademark and trade dress issues while Marquis’ brief focused on the patent issues. After the Federal Circuit struck the noncompliant briefs, Kartri and Marquis refiled their briefs with incorporation-by-reference statements deleted. After closely reviewing the refiled briefs, the Federal Circuit held that Kartri waived its patent non-infringement arguments, as its one-page treatment on the patent issues was too conclusory.
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