Latest Federal Court Cases, 1/21/20
PATENT CASE OF THE WEEK
Eko Brands, LLC v. Adrian Rivera Maynez Enterprises, Inc., Appeal Nos. 2018-2215, et al. (Fed. Cir. Jan. 13, 2020)
In this appeal from the Western District of Washington, the Federal Circuit addresses issues relating to claim construction, attorney’s fee awards, and willful infringement/enhanced damages. At the district court, following Eko’s default in ITC proceedings brought by Adrian Rivera Maynez (“ARM”) wherein ARM alleged that Eko infringed two claims of ARM’s ’320 patent, Eko asserted declaratory judgment claims of invalidity and non-infringement against those same claims of the ’320 patent, which relates to an adapter that could be used with Keurig coffee machines to allow them to function with not only “K-cups,” which are larger cup-shaped filter cartridges, but also with “pods,” which are small, flattened disk-shaped filter cartridges. Eko also asserted a claim of infringement of its own ’855 patent against ARM. The ’855 patent describes a reusable filter cartridge device that does not require it to be pierced by the machine, unlike typical filter cartridge devices. After a summary judgment ruling of non-infringement of the ’320 patent and then a jury trial, the district court ultimately found the asserted claims of ARM’s ’320 patent invalid for obviousness, and awarded Eko attorney’s fees associated with the judgments of non-infringement and obviousness. In addition, after claim construction of the ’855 patent, ARM stipulated to infringement, and the jury awarded Eko compensatory damages, but did not find willful infringement. Both parties appealed.
On the ’320 patent, the Federal Circuit reviewed the district court’s claim construction, invalidity, and attorney’s fee decisions. As to claim construction, ARM asserted that the district court misconstrued the term “brewing chamber,” and under a proper construction, would not have found the ’320 patent obvious in light of the prior art Nordskog patent. The district court construed the term to mean “a compartment in which brewing occurs,” and explained that the compartment need not be sealed or fully enclosed, disagreeing with ARM’s proposed—and more narrow—construction. The Court explained that because two patents incorporated into the ’320 patent did not require a “fully sealed” aspect of the same term, and because ARM’s proposed construction would have excluded the ’320 patent’s preferred embodiment, which depicts a “lower opening” to the chamber, the district court’s construction was correct, and thus the obvious determination was not in error. The Court also held that the jury could have reasonably found that other prior art asserted disclosed the ’320 patent’s “sealing engagement” limitation and thus there was no error.
As to the award of attorney’s fees for non-infringement, ARM argued that because the district court’s construction of the term “passageway” was erroneous, Eko should not have been the prevailing party on the issue of non-infringement, and attorney’s fees, which were awarded on the basis of ARM’s unreasonable pursuit of its infringement claims, should not have been awarded. The Court disagreed, finding the district court’s construction correct, and agreeing with the district court that it was “patently obvious” that Eko’s products could not infringe on the ’320 patent since they use a steel filter to allow the brewed beverage to exit the receptacle rather than a “passageway.” As to the award for obviousness, which was awarded based on the district court’s decision that ARM’s conduct as to the issue was “exceptional,” ARM argues, based on Checkpoint Systems, Inc. v. All-Tag Security, S.A., that the district court’s denial of summary judgment on the issue conclusively established that its litigation position was reasonable. But the Court explained that Checkpoint only requires that the district court consider denial of summary judgment, not that it always give that denial decisive weight. Moreover, the Court explained that under Octane Fitness, LLC v. ICON Health & Fitness, Inc., the district court need only consider the totality of the circumstances on a case-by-case basis, and that there is no precise rule or formula for determining exceptional case. Since the district court carefully explained why it did not give its denial of summary judgment decisive weight, the Court found that it did not abuse its discretion in awarding fees.
On the ’855 patent, the Court reviewed the district court’s decisions relating to infringement, including willful infringement/enhanced damages. ARM argued that the district court erred in construing claim 8 as not requiring a “single-serve beverage brewer,” and as such, the judgment of infringement should be set aside. The Court disagreed, finding that claim 8 on its face does not require such limitation, and that the claim’s mention of a beverage brewer served as only a reference point to define the purpose and structure of the brewing device. Thus, the district court’s finding of infringement based on ARM’s brewing device was appropriate.
Finally, Eko appealed the district court’s jury instruction on willful infringement, arguing that the jury’s finding of no willfulness by ARM, and thus the district court’s denial of enhanced damages, was based on an incorrect instruction. Prior to trial, both parties and the district court agreed to use the Federal Circuit Bar Association’s (“FCBA”) model instruction for willful infringement, which included the following text:
Willfulness requires you to determine whether Eko proved that it is more likely than not that the infringement was especially worthy of punishment. You may not determine that the infringement was willful just because ARM knew of the Eko 855 patent and infringed it. Instead, willful infringement is reserved for only the most egregious behavior, …
Eko objected to the underlined phrases of that instruction on the morning that final jury instructions were to be read to the jury, arguing that the instruction invited the jury to make legal decisions as to whether damages should be enhanced rather than limiting the jury to the underlying factual finding of willfulness. The district court revised the instruction to delete the phrase “only the most,” and the jury returned a verdict of no willful infringement by ARM. The Court agreed that the underlined language, in isolation, was erroneous, since punishment by enhancement of damages is an issue for the court and not the jury—egregiousness is thus not appropriate for jury consideration. But the Court went on to explain that a party challenging jury instructions must prove that the instructions, read in their entirety, were incorrect as given. The Court found that the instruction, taken as a whole, provided reasonable clarity as to the correct test for willful infringement. First, the sentence including “reserved for egregious behavior” also clarified that willful infringement can simply be “deliberate.” Second, the latter half of the instruction provided a list of facts that the jury could properly consider, which clarified that the jury was to consider whether ARM’s infringement was intentional. And third, the Court reasoned that the deletion of the two phrases to which Eko objected would not have cured the problem that Eko identified, since the model instruction still included the phrases “malicious,” “consciously wrongful,” and “bad faith.” Thus, the instruction was not legally erroneous.
Judge Reyna dissented-in-part, arguing that the district court erred in its construction of “passageway” by re-writing the claims to include adding a negative limitation unsupported by the specification, and thus erred in granting summary judgment of non-infringement and awarding attorney’s fees.
The opinion can be found here.
ALSO THIS WEEK
BioDelivery Sciences Int’l, Inc. v. Aquestive Therapeutics, Inc., Appeal Nos. 2019-1643, et al. (Fed. Cir. Jan. 13, 2020)
The Court denied en banc review of the panel decision in this case, and designated its denial precedential. Judge Newman dissented, making essentially the same arguments she made from her dissent in the panel decision. Our coverage of the panel decision is available here.
The opinion can be found here.