Accent Packaging, Inc. v. Leggett & Platt, Inc.: Reminders on Claim Construction, Discovery Matters

In Accent Packaging, Inc. v. Leggett & Platt, Inc., the Federal Circuit affirmed in part and reversed in part the district court’s grant of summary judgment of non-infringement.  Accent is the assignee of U.S. Patents 7,373,877 (the '877 patent) and 7,412,992 (the '992 patent).  The patents are drawn to a wire tier device useful for baling and handling recyclables and solid waste to facilitate better handling.  Accent sued Leggett for patent infringement and violation of the Missouri Trade Secret Act.  Leggett filed a motion to dismiss the trade secret claim for failure to state a claim and the claim was dismissed.  During discovery, Accent’s expert inspected Leggett’s allegedly infringing device.  Leggett produced a redacted copy of its own patent application that Leggett argued covered its device, engineering drawings, marketing and promotional materials related to the device, and an operating manual for the device.  Accent filed a motion seeking additional discovery, including:  (1) information related to an alleged sale of Leggett’s device.; (2) a deposition pursuant to FRCP 30(b)(6) to address infringement and claim construction; and (3) production of the redacted parts of the previously produced patent application.  The district court denied the motion for additional discovery and both parties filed motions for summary judgment.  The district court denied Accent’s motion for summary judgment of infringement and granted Leggett’s motion for summary judgment of non-infringement.  Subsequently, Accent appealed to the Federal Circuit.  The Federal Circuit opinion provides three reminders:

Reminder #1:  Claim construction should allow the claim to cover the preferred embodiments

The '877 Patent

The district court granted summary judgment of non-infringement of the '877 patent largely based on its claim construction of the terms “each” and “a respective one.”  The court construed the terms to require four elongated operator bodies, with every operator body coupled only to one gripper, knotter, cutting element or cover.  On appeal, Accent argued that the pertinent claim language did not require that each elongated operator body be coupled to one and only one of those articulated elements.  The Federal Circuit overruled the district court’s claim construction of the terms “each” and “a respective one” stating the construction essentially excluded a preferred embodiment from the scope of the claims, as a preferred embodiment showed “two elongated operator bodies . . . operably coupled to both the knotter and the cover.”  In supporting this holding, the Federal Circuit quoted its previous holding in the 2004 case, On-Line Technologies, Inc. v. Bodenseewerk Perkin-Elmer GmbH stating, “We have held that ‘a claim interpretation that excludes a preferred embodiment from the scope of the claim is rarely, if ever, correct.’”  386 F.3d 1133, 1138 (Fed. Cir. 2004). 

The '992 Patent

Accent appealed the district court’s claim construction of the term “of at least about ninety degrees.”  The asserted claims of the '992 patent require, “a mount for [the] cover permitting the cover to be pivoted away from said knotter to a knotter access position remote from said wire-maintaining position and through a pivot arc of at least about 90?.”  Accent argued that Leggett’s device would pivot through the required ninety degrees if it weren’t for its SafeLatchTM stop.  The district court held that this was “a distinction without a difference, noting “[t]he SafeLatchTM stop is in fact part of the . . . device.”  Accent also argued that the device infringed the '992 patent because the SafeLatchTM stop can be easily removed, which permits the cover to pivot at least ninety degrees.  The Federal Circuit found this argument unpersuasive, again citing its own precedent:  “[A] device does not infringe simply because it is possible to alter it in a way that would satisfy all the limitations of a patent claim.” High Tech Med. Instrumentation v. New Image Indus., Inc., 49 F.3d 1551, 1555 (Fed. Cir. 1995).  In light of this reasoning, the Federal Circuit affirmed the district court’s summary judgment of non-infringement of the '992 patent.

Reminder #2:  Plausibility in pleading also applies to discovery motions

As noted above, Accent’s motion for additional discovery was denied by the district court.  Accent appealed this ruling and the Federal Circuit affirmed the district court’s ruling.  The Federal Circuit stated that Accent’s problem was “that it never ‘set forth a plausible basis for believing that specified facts . . . probably exist.’”  Slip op. at 10 (quoting Raby v. Livingston, 600 F.3d 552, 561 (5th Cir. 2010).  The Federal Circuit found it important that Accent had received “extensive information” regarding Leggett’s allegedly infringing device through production, and Accent’s counsel and expert had thoroughly inspected the device.  Despite all this evidence, “Accent failed to set forth a plausible basis for believing that additional discovery” was necessary.  Moreover, the evidence already present suggested the facts were opposite Accent’s argument.  Thus, the Federal Circuit affirmed the district court’s denial of Accent’s motion for additional discovery.

Reminder #3:  Sufficient factual material to render plausibility is required for all claims

Accent appealed the district court’s dismissal of the trade secret claim arguing that the court ruled on the motion before Accent even had a chance to respond in writing to the motion to dismiss.  Accent’s trade secret misappropriation claim was based on the argument that the specifications and tolerances of its commercial device constituted trade secrets.  Accent argued that Leggett misappropriated those secrets by copying Accent’s commercial device delivered to one of Accent’s customers.  However, the Federal Circuit found it important that Accent’s own complaint acknowledged that its commercial device was sold in the regular stream of commerce.  Thus, the device was not subject to reasonable efforts to maintain its secrecy.  In affirming the district court’s grant of summary judgment for Leggett, the Federal Circuit relied on Twombly and Iqbal, holding that the “complaint fails to state a claim to relief that is plausible on its face.”

MVS Filewrapper® Blog: New and Useful - February 6, 2013

·         In Allergan, Inc. v. Barr Labs the Federal Circuit affirmed a decision by the District of Delaware finding that Barr Laboratories, Inc. and Sandoz Inc. had infringed a patent owned by Allergen, Inc., and finding the patent-in-suit valid.  Barr and Sandoz each filed abbreviated new drug applications (ANDA) for a generic version of the drug covered by the Allergen patent, and both ANDAs asserted that the Allergen patent was invalid or would not be infringed by the manufacture, use, or sale of the new drugs for which the applications were submitted.  Allergen sued Barr and Sandoz for infringement, and the suits were consolidated for a bench trial on invalidity and infringement.  The district court construed a single disputed claim and determined Allergen had defined the disputed term in such a way in the specification as to cover the Barr and Sandoz products.  The district court also declined to adopt the defendants’ arguments for invalidity based on obviousness.  The defendants’ obviousness case at trial relied on the testimony of an expert.  However, the district court determined that the expert’s testimony was undermined by his lack of credibility, as exposed on cross-examination.  As a result, the district court declined to review the prior art references and weigh their import absent the guidance of an expert, and therefore concluded that Barr and Sandoz had failed to prove obviousness.  The defendants appealed both the infringement and invalidity determinations, specifically asserting that the district court erred in not reviewing the prior art references and weighing their import notwithstanding the problems with the expert testimony.

      On appeal, the Federal Circuit confirmed the district court’s claim construction and infringement determination.  The Federal Circuit also confirmed the district court’s determination with respect to the expert witness and the resulting conclusions regarding invalidity and obviousness.  Specifically, the court held that the district court did not err in its decision because the case was sufficiently complex to require expert testimony in making the determination of obviousness, and “common sense and logic were not sufficiently illuminating in this case to carry Barr and Sandoz's burden of proving obviousness.”

 

 

·       In Arkema Inc. v. Honeywell International, Inc. the Federal Circuit reviewed a district court’s denial of declaratory judgment jurisdiction for a case involving two suppliers of an automotive coolant.  Arkema Inc. brought a declaratory judgment action seeking judicial determination that its plans to supply automotive coolant to car manufacturers would not infringe Honeywell’s U.S. patents.  This declaratory judgment action followed foreign litigation wherein Honeywell asserted European patents coving the same technology against Arkema.  After the litigation commenced, Honeywell obtained two additional patents, and Arkema sought to amend its complaint to include declaratory judgment on these two additional patents.  The district court denied Arkema’s motion, concluding that there was insufficient case or controversy for the court to exercise declaratory judgment jurisdiction.  The district court then certified for appeal its order denying Arkema’s motion. 

   

The Federal Circuit reversed the district court, addressing each of the district court’s rationales for declining jurisdiction in turn.  In particular, the Federal Circuit held that the district court’s reliance on Arris Grp., Inc. v. British Telecommc’ns PLC was misplaced because while acts of direct infringement by a customer are sufficient to support DJ action by a supplier, they are not necessary.  Further, the appellate court concluded that “[t]here is no requirement that Arkema identify the particular manufacturers that will purchase the [automotive coolant] or the particular automobile purchasers who will purchase the cars from the manufacturers, or the particular dates on which this will occur.”  The Federal Circuit instead concluded that the basis for Arkema’s declaratory judgment jurisdiction was formed by the foreign litigation of the same technology along with contracts entered into by Arkema with customers for the supply of the automotive coolant.  The case was remanded for reconsideration.

·         In Accent Packaging, Inc. v. Leggett & Platt, Inc. the Federal Circuit reversed a grant of summary judgment by the United States District Court for the Southern District of Texas for the alleged infringer, Leggett & Platt.  The district court granted summary judgment of non-infringement based on it construction of the terms “each” and “a respective one” within the phrase “with each of the operator bodies being operably coupled with a respective one of said gripper, knotter, cutting element and cover.”  The district court construed the terms to mean that there could only be a single function for a single “operator body,” and as a result the accused device could not infringe the claims because it used operator bodies with multiple functions.  Accent appealed the grant of summary judgment, challenging the district court’s claim construction. 

The Federal Circuit reversed the grant of summary judgment, concluding that the district court improperly construed the terms at issue.  The appellate court, conducting its own de novo claim construction, determined that the narrow construction asserted by Accent was improper because it excluded the preferred embodiment disclosed in the specification.  The court held that the preferred embodiment featured an elongated operator body that is operably coupled to one or more operator elements, and because “a claim interpretation that excludes a preferred embodiment from the scope of the claim is rarely, if ever, correct” (On-Line Techs., Inc. v. Bodenseewerk Perkin-Elmer GmbH, 386 F.3d 1133, 1138 (Fed. Cir. 2004)), the district court’s claim construction doing just that was erroneous.  Based on the Federal Circuit’s own claim construction, it remanded the case and ordered the district court to grant summary judgment of infringement to Accent.  A more in depth analysis of this case will be posted shortly.

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