TransWeb, LLC v. 3M Innovative Properties Co. ( 2016 )

United States Court of Appeals
for the Federal Circuit
______________________
TRANSWEB, LLC,
Plaintiff-Appellee
v.
3M INNOVATIVE PROPERTIES COMPANY,
3M COMPANY,
Defendants-Appellants
______________________
2014-1646
______________________
Appeal from the United States District Court for the
District of New Jersey in No. 2:10-CV-04413, Judge Faith
S. Hochberg.
______________________
Decided: February 10, 2016
______________________
MICHAEL ERNEST WILLIAMS, Quinn Emanuel Ur-
quhart & Sullivan, LLP, Los Angeles, CA, argued for
plaintiff-appellee. Also represented by VALERIE RODDY,
HAROLD BARZA; SANFORD IAN WEISBURST, New York, NY;
PHILIP CHARLES STERNHELL, Washington, DC.
SETH P. WAXMAN, Wilmer Cutler Pickering Hale and
Dorr LLP, Washington, DC, argued for defendants-
appellants. Also represented by THOMAS SAUNDERS,
KENNETH HUGH MERBER; MARK CHRISTOPHER FLEMING,
SARAH B. PETTY, Boston, MA.
2 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
______________________
Before WALLACH, BRYSON, and HUGHES, Circuit Judges.
HUGHES, Circuit Judge.
3M sued TransWeb for infringement of several pa-
tents. TransWeb sued for declaratory judgment of inva-
lidity and non-infringement of the patents. A jury found
the patents to be invalid based on TransWeb’s prior public
use of the patented method. In accordance with an advi-
sory verdict from the jury, the district court found the
patents unenforceable due to inequitable conduct. The
jury also found 3M to be liable for a Walker Process anti-
trust violation and that attorney fees were an appropriate
antitrust remedy. The district court awarded approxi-
mately $26 million to TransWeb, including trebled attor-
ney fees as antitrust damages. The primary issues are
whether sufficient corroborating evidence exists to sup-
port the finding of prior public use by TransWeb, and
whether the attorney fees are an appropriate basis for
damages under the antitrust laws in this context. We
hold in the affirmative on both issues. For the latter
issue, we find that TransWeb’s attorney fees appropriate-
ly flow from the unlawful aspect of 3M’s antitrust viola-
tion and thus are an antitrust injury that can properly
serve as the basis for antitrust damages. For these rea-
sons, we affirm the district court’s judgment.
I
TransWeb and 3M are both manufacturers of filters
for respirators, such as might be worn by workers in a
dirty or otherwise contaminated worksite. The filter
media at issue in this case consist of “nonwoven fibrous
webs,” which rely on a “web” of fibers rather than tradi-
tional woven material. Both TransWeb and 3M use a
process of melting pellets of a filter material, such as
polypropylene, blowing the melted material into a thin
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 3
film, and then allowing the material to cool and solidify
into the nonwoven fibrous web.
It had been known in the art for some time that a fil-
ter medium could be improved by imparting upon it an
electrical charge. In this way, the filter medium can repel
or capture particulates both by mechanical and electro-
magnetic means. A filter medium on which a semi-
permanent electrical charge has been imparted is referred
to as an “electret.”
TransWeb and 3M independently developed a tech-
nique for imparting this electret characteristic by using
plasma fluorination. Fluorination involves introducing
fluorine atoms into the chemical structure of the filter
web. Previously known techniques involved mixing
fluorine compounds into the melted filter material, but
this proved disadvantageous. Instead, TransWeb and 3M
both discovered that it would be advantageous to first
form the fibrous web and then introduce the fluorine
atoms into the chemical structure. This technique in-
volves exposing a gaseous fluorine compound to the
surface of the filter web in the presence of plasma. The
intense heat and electromagnetic energy introduced by
the plasma cause some of the chemical bonds on the
surface of the filter web to break, and the fluorine atoms
fill in those bonds to form fluorine compounds on the
surface of the filter web.
Plasma-fluorinated filter media are particularly effec-
tive in oily environments, where other types of filter
media might perform poorly or quickly degrade. The
National Institute for Occupational Safety and Health
(NIOSH) provides a rating and approval service for oily
environment respirators, categorizing them as: not
resistant to oil; resistant to oil; or oil proof. The Occupa-
tional Safety and Health Administration (OSHA) provides
regulations governing what NIOSH rating of respirators
4 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
must be used in certain types of worksites within the
United States.
The present appeal focuses largely on the events sur-
rounding a filtration industry exposition that occurred in
late April and early May of 1997. It is uncontested that
TransWeb’s founder, Kumar Ogale, attended the expo and
handed out samples of filter material. The filter material
included samples of TransWeb’s “T-Melt” products, an
identifier for the general class of melt-blown, i.e., nonwo-
ven fibrous web, media. The primary dispute is whether
Mr. Ogale handed out, more specifically, samples of the
“T-Melt P” products, which is the specific class of plasma-
fluorinated T-Melt products. Mr. Ogale testified at trial
that he did in fact hand out T-Melt P samples at the expo,
though no independent documents or testimony evidence
this fact. The parties do not contest that if Mr. Ogale
handed out T-Melt P samples at the expo, then they
would serve as prior art to the plasma fluorination tech-
nique of the claimed methods. The expo occurred more
than one year prior to the priority date of the patents
asserted in this case, so any public disclosure of plasma
fluorination at the expo would be a statutory bar to pa-
tentability, at least based on that feature.
In July of 1998, 3M filed U.S. Patent Application
09/109,497, to which both of U.S. Patents 6,397,458 and
6,808,551 claim earliest priority. 3M asserted both the
’458 and ’551 patents against TransWeb. In addition to
the plasma fluorination of nonwoven fibrous webs de-
scribed above, the patent family discloses use of “hydro-
charging,” which is a technique that uses water to impart
the electrical charge on the filter medium.
3M initially filed suit in Minnesota against TransWeb
for patent infringement. After 3M voluntarily dismissed
that suit due to an apparent personal jurisdiction issue,
TransWeb filed suit in New Jersey for declaratory judg-
ment.
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 5
The district court in New Jersey ultimately presented
the following issues to a jury: infringement of claims 31
and 57 of the ’458 patent; invalidity for obviousness of
claims 31 and 57; unenforceability of the ’458 and ’551
patents due to inequitable conduct; Walker Process anti-
trust violation based on fraudulent procurement and
subsequent assertion of the ’458 and ’551 patents; sham
litigation antitrust violation based on assertion of the ’458
and ’551 patents; entitlement to lost profits damages for
antitrust violations; and entitlement to attorney fees as
damages for antitrust violations. The jury delivered the
following verdicts: claims 31 and 57 are not infringed;
claims 31 and 57 are invalid; both patents are unenforce-
able; 3M committed a Walker Process violation but not a
sham litigation violation; and TransWeb is entitled to lost
profits and attorney fees as antitrust damages.
The district court entered judgment in accordance
with the jury verdicts. 3M moved for judgment as a
matter of law, which the district court denied. 3M ap-
peals. We have jurisdiction under 28 U.S.C. § 1295(a)(1).
II
This court reviews denial of a JMOL motion de novo,
applying the law of the regional circuit. Am. Calcar, Inc.
v. Am. Honda Motor Co., 651 F.3d 1318, 1341 (Fed. Cir.
2011). In the Third Circuit, courts assess “whether there
is evidence upon which a reasonable jury could properly
have found its verdict.” Gomez v. Allegheny Health Servs.,
71 F.3d 1079, 1083 (3d Cir. 1995). JMOL “should be
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” for the
nonmovant. Lightning Lube, Inc. v. Witco Corp., 4 F.3d
1153, 1166 (3d Cir. 1993). Underlying questions of law
are reviewed without deference. ZF Meritor, LLC v.
Eaton Corp., 696 F.3d 254, 268 (3d Cir. 2012).
6 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
On appeal, 3M challenges the district court’s judg-
ment on validity, inequitable conduct, and antitrust
liability. We address each argument in turn.
III
The jury found both claims of the ’458 patent invalid,
and the district court denied 3M’s motion for JMOL of
non-invalidity. 3M contests this judgment based on a
purported lack of corroboration of Mr. Ogale’s public use
testimony and based on alleged non-obviousness of the
claims even if there were public use of the plasma-
fluorinated material.
A
Oral testimony by an interested party on its own will
generally not suffice as “clear and convincing” evidence of
invalidity. See Lazare Kaplan Int’l v. Photoscribe Techs.,
628 F.3d 1359, 1374 (Fed. Cir. 2010); Price v. Symsek, 988
F.2d 1187, 1194 (Fed. Cir. 1993). Rather, such oral testi-
mony must be corroborated by some other evidence. See
Woodland Tr. v. Flowertree Nursery, Inc., 148 F.3d 1368,
1371 (Fed. Cir. 1998). The corroborating evidence can
include documents and testimonial evidence. See Lazare
Kaplan, 628 F.3d at 1374–75, Adenta GmbH v. OrthoArm,
Inc., 501 F.3d 1364, 1371 (Fed. Cir. 2007), Sandt Tech. v.
Resco Metal & Plastics Corp., 264 F.3d 1344, 1350–51
(Fed. Cir. 2001). Circumstantial evidence can be suffi-
cient. See Sandt, 264 F.3d at 1351; Knorr v. Pearson, 671
F.2d 1368, 1373 (C.C.P.A. 1982). This corroboration
requirement for testimony by an interested party is based
on the sometimes unreliable nature of oral testimony, due
to the “forgetfulness of witnesses, their liability to mis-
takes, their proneness to recollect things as the party
calling them would have them recollect, aside from the
temptation to actual perjury.” Lazare Kaplan, 628 F.3d at
1374 (quoting Washburn & Moen Mfg. Co. v. Beat ‘Em All
Barbed-Wire Co., 143 U.S. 275, 284 (1892)).
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 7
A “rule of reason” analysis is used to determine the
sufficiency of corroboration, under which “all pertinent
evidence is examined in order to determine whether the
inventor’s story is credible.” Sandt, 264 F.3d at 1350(quoting Price, 988 F.2d at 1195) (internal quotation
marks omitted). Importantly, this analysis “does not
require that every detail of the testimony be independent-
ly and conclusively supported” by the corroborating evi-
dence. Ohio Willow Wood Co. v. Alps South, 735 F.3d
1333, 1348 (Fed. Cir. 2013). Such a requirement would
indeed be “the antithesis of the rule of reason.” Cooper v.
Goldfarb, 154 F.3d 1321, 1331 (Fed. Cir. 1998). We have
generally been most skeptical of oral testimony that is
supported only by testimonial evidence of other interested
persons. Compare Allergan, Inc. v. Apotex Inc., 754 F.3d
952, 968 (Fed. Cir. 2014), and Lacks Indus. v. McKechnie
Vehicle Components USA, 322 F.3d 1335, 1350 (Fed. Cir.
2003), with Adenta, 501 F.3d at 1371–73, and Sandt, 264
F.3d at 1351–52. We have repeatedly noted that contem-
poraneous documentary evidence provides greater corrob-
orative value. See Medichem, S.A. v. Rolabo, S.L., 437
F.3d 1157, 1169–70 (Fed. Cir. 2006); Sandt, 264 F.3d at1350–51; Finnigan Corp. v. Int’l Trade Comm’n, 180 F.3d
1354, 1366 (Fed. Cir. 1999); Woodland Tr., 148 F.3d at
1373; Price, 988 F.2d at 1196. But there are no hard and
fast rules as to what constitutes sufficient corroboration,
and each case must be decided on its own facts. See
Sandt, 264 F.3d at 1350.
We treat the ultimate determination of whether such
oral testimony is sufficiently corroborated as a question of
fact, which we review for clear error. See Fleming v.
Escort, Inc., 774 F.3d 1371, 1377 (Fed. Cir. 2014).
3M’s arguments against sufficiency of corroboration
can be summed up as follows: as a legal matter,
TransWeb must independently evidence all “material
facts” of the purported invalidating public use; and as a
factual matter, TransWeb provided no corroborating
8 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
evidence for one of the material facts, viz., that it was the
plasma-fluorinated material that was distributed at the
expo.
3M’s legal argument attempts to lead us to a legal
conclusion that this court has repeatedly rejected. 3M
asks us to focus on one particular detail of the oral testi-
mony and determine whether that detail is independently
evidenced. But we have repeatedly rejected an element-
wise attack on corroboration of oral testimony. See Flem-
ing, 774 F.3d at 1377; Ohio Willow Wood, 735 F.3d at
1348 (characterizing as “misplaced” an argument that a
particular claim feature in oral testimony was not sepa-
rately evidenced, and finding the argument incompatible
with the rule of reason); Lazare Kaplan, 628 F.3d at
1373–75; Adenta, 501 F.3d at 1371–73. We stated this in
clear terms most recently in Fleming:
Fleming is correct that none of the corroborating
evidence constitutes definitive proof of Orr’s ac-
count or discloses each claim limitation as writ-
ten. But the corroboration requirement has never
been so demanding. It is a flexible, rule-of-reason
demand for independent evidence that, as a
whole, makes credible the testimony of the pur-
ported prior inventor with regard to conception
and reduction to practice of the invention as
claimed.
Fleming, 774 F.3d at 1377 (citations omitted). As applied
to this case, our rule of reason analysis requires that
independent evidence, taken as a whole, makes credible
Mr. Ogale’s testimony that he distributed the plasma-
fluorinated material at the expo.
In any event, 3M’s factual argument that TransWeb
provided no corroborating evidence that it was the plas-
ma-fluorinated material that Mr. Ogale distributed at the
expo is incorrect. The correspondence with Fourth State
demonstrates that TransWeb had produced the plasma-
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 9
fluorinated material at least three months prior to the
expo. TransWeb’s own patent application, filed at the
same time as the expo, demonstrates that Mr. Ogale had
invented and was seeking patent protection for the plas-
ma-fluorinated material at least by the time of the expo.
The correspondence with Filtration Group demonstrates
that Mr. Ogale was sending out samples of the plasma-
fluorinated T-Melt product shortly after the expo. The
numerous correspondences contemporaneous with the
Filtration Group correspondence, each accompanying
samples of filter material not specifically identified as T-
Melt, show that Mr. Ogale was sending out other samples
of filter material that may have been plasma-fluorinated.
The correspondence with Gerson demonstrates that
TransWeb was offering for sale large quantities of the
plasma-fluorinated product within two months of the
expo. Considered in its totality, this body of evidence
provides abundant support for the credibility of
Mr. Ogale’s claim that he distributed the plasma-
fluorinated material at the expo. As such, we find no
clear error in the district court’s determination that
Mr. Ogale’s testimony was sufficiently corroborated.
B
3M argues that, even if TransWeb publicly used
plasma-fluorinated material at the expo, the claims are
still non-obvious. 3M’s argument rests on two conten-
tions: for claim 31, it was not obvious to use hydrocharg-
ing on a plasma-fluorinated material; and for both claims
31 and 57, objective indicia demonstrate the non-
obviousness of the claims.
3M admits that hydrocharging was well-known in the
art, at least based on U.S. Patent 5,496,507 to Anga-
djivand. But 3M notes that the Angadjivand patent
counsels against “any unnecessary treatment which might
increase [the filter material’s] electrical connectivity”
including “ultraviolet irradiation.” Angadjivand patent
10 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
col. 3 ll. 26–30. Based on the testimony of both
TransWeb’s and 3M’s expert witnesses, the filter material
is exposed to some ultraviolet radiation during plasma
fluorination. But TransWeb’s expert witness also testified
that the amount of ultraviolet radiation emitted during
plasma fluorination was minimal, refuting the notion that
the above-quoted passage of the Angadjivand patent
would have significantly discouraged a person having
ordinary skill in the art from using hydrocharging on
plasma-fluorinated material. The jury was free to credit
this testimony and conclude based on the evidence pre-
sented that claim 31 was obvious. We see no error in this
determination.
3M further contends that unexpected results and
commercial success demonstrate the non-obviousness of
the claims. For commercial success, 3M relies on a single,
confused exchange between its attorney and TransWeb’s
expert witness at trial, wherein the witness says that he
does not know about the commercial success of 3M’s
products, though maybe he said he did in the past. J.A.
2105–06. Similarly with unexpected results, 3M relies on
a single, self-serving annotation in the ’458 patent inven-
tor’s notebook and a corresponding statement at trial.
The jury heard and rejected this evidence in concluding
that the claims were obvious. None of these arguments
as to objective indicia demonstrate that the jury was
unreasonable in finding the claims obvious, so we will not
disturb that verdict.
IV
The jury reached an advisory verdict that both the
’458 and ’551 patents were unenforceable for inequitable
conduct. The district court reached the same conclusion.
3M contests this judgment on all of the required elements
of inequitable conduct.
A judgment of inequitable conduct requires clear and
convincing evidence of materiality, knowledge of material-
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 11
ity, and a deliberate decision to deceive. Therasense, Inc.
v. Becton, Dickinson & Co., 649 F.3d 1276, 1290 (Fed. Cir.
2011) (en banc). Except in cases of egregious misconduct,
the materiality must reach the level of but-for materiality,
meaning that “the PTO would not have allowed a claim
had it been aware of the undisclosed prior art.” Id. at
1291–92. Intent to deceive may be found only if specific
intent to deceive is “the single most reasonable inference
able to be drawn from the evidence.” Id. at 1290. If more
than one reasonable inference is possible, “intent to
deceive cannot be found.” Id. at 1290–91. A court “may
infer intent from indirect and circumstantial evidence”
because “direct evidence of deceptive intent is rare.” Id.
at 1290.
This court reviews the district court’s ultimate deter-
mination of inequitable conduct for abuse of discretion
and underlying factual determinations for clear error.
Star Scientific v. R.J. Reynolds Tobacco, 537 F.3d 1357,
1365 (Fed. Cir. 2008).
A
The expo samples present a definitional case of but-
for materiality. During prosecution of the ’497 applica-
tion, the examiner initially allowed all claims. When 3M
notified the examiner of one of the TransWeb samples
that it had on hand, the examiner rejected all claims as
obvious over that disclosure and the Angadjivand patent.
Only when 3M clarified its dubious assertion that the
TransWeb samples were only received after signing of a
confidentiality agreement and thus were not prior art did
the examiner allow the claims. Because the examiner
would not have allowed the claims had the TransWeb
samples been properly disclosed as prior art, the
TransWeb samples are but-for material.
12 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
B
The district court concluded based on a detailed re-
view of the record that Marvin Jones, an inventor for the
asserted patents, and Karl Hanson, an in-house attorney
at 3M, both acted with specific intent to deceive the
patent office as to the TransWeb materials. The jury
unanimously reached the same conclusion. While it is not
necessary for us to recount the entire treatment of the
factual record performed so thoroughly by the district
court, see TransWeb, LLC v. 3M Innovative Properties Co.,
16 F. Supp. 3d 385, 398–407 (D.N.J. 2014), we note a few
particular details that demonstrate that the district court
did not clearly err in finding a specific intent to deceive on
the part of Mr. Jones and Mr. Hanson.
The record makes abundantly clear that 3M generally
and Mr. Jones particularly were very much aware of the
samples TransWeb was distributing at the expo. A week
prior to the expo, a group of six 3M employees was party
to a lengthy email coordinating 3M’s efforts to gather
information from TransWeb at the expo. The email
identified two employees as the “point people” in gather-
ing information from TransWeb. J.A. 6860. The other
parties to the email and their subordinates were to chan-
nel any questions through the point people. One of the
point people had already met with TransWeb and re-
ceived “quite a bit of information and non-production
samples.” Id. The email also included an article from
Nonwovens Industry briefly mentioning TransWeb’s T-
Melt products. One of the parties to the email was
Mr. Jones’s supervisor, and she forwarded the email to
Mr. Jones on the day that the expo began. Mr. Jones
attended the expo. While he professed at trial to have no
recollection of visiting the TransWeb booth, the district
court found his testimony “simply not credible” and noted
that “his demeanor was one of a witness trying to distance
himself from any knowledge of TransWeb’s presence and
activities at the Expo.” TransWeb, 16 F. Supp. 3d at 399.
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 13
Mr. Jones’s supervisor again sent him an email within a
month after the expo detailing the information and sam-
ples received from TransWeb by the point people. This
email noted that TransWeb’s production operations were
up and running, that it was sending samples to potential
clients, that 3M already had a small sample, and that 3M
was expecting a larger sample soon thereafter.
Further evidence shows that Mr. Jones knew not only
that TransWeb distributed material at the expo, but that
it was plasma-fluorinated material. Within a year of the
expo, Mr. Jones was told directly by an employee of
Racal—an independent filtration company at the time of
the expo that was acquired by 3M in the following year—
that TransWeb had been producing plasma-fluorinated
material and that TransWeb had provided samples of
such to Racal. The district court noted that the 3M em-
ployees seemed to proceed with a newfound earnest in
preparing their own patent application and supporting
lab notebooks around this same time. The Racal employ-
ee eventually sent the samples received from TransWeb to
Mr. Jones, identifying them as being plasma-fluorinated.
Around the same time, another 3M employee forwarded
the original expo planning email to Mr. Jones and
Mr. Hanson, noting that it did not explicitly indicate
plasma fluorination. The district court found that this
email indicated a follow-up to some sort of oral conversa-
tion between Mr. Jones, Mr. Hanson, and the other 3M
employee regarding what TransWeb was distributing at
the time of the expo. Another 3M employee later request-
ed samples of the plasma-fluorinated material from
TransWeb on behalf of Mr. Jones and Mr. Hanson, noting
that some of the products had been mentioned in the pre-
expo Nonwovens Industry publication.
The district court found that Mr. Hanson undertook
an intentional scheme to paper over the potentially prior
art nature of the Racal-received samples. The Racal
employees received the plasma-fluorinated samples from
14 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
TransWeb at latest one month after the expo. Therefore,
these samples were highly relevant to what TransWeb
distributed at the expo. The record casts great doubt on
whether Racal had received the samples before or after
execution of a confidentiality agreement, thereby poten-
tially rendering them public disclosures and prior art to
the ’497 application. At around the same time that 3M
was requesting further samples from TransWeb and
learning of the potential prior art nature of the Racal
samples, Mr. Hanson sent a confusing letter to Mr. Ogale
purporting to clarify some issues as to the confidentially
agreements between TransWeb and 3M and between
TransWeb and Racal. Mr. Hanson had never had any
communication with TransWeb, and the district court
concluded that the only possible purpose for the letter was
to get an admission from Mr. Ogale that the Racal-
received samples were covered by a confidentiality
agreement, even though this point was itself dubious.
Mr. Hanson subsequently did submit this letter to the
patent office as definitive proof that the TransWeb sam-
ples were not prior art to the ’497 application.
The district court noted other circumstantial evidence
suggesting a specific intent by 3M employees to hide the
prior art nature of the TransWeb products. The district
court noted that only after Mr. Hanson met with the
Racal employee did that employee type meeting notes
from his original meeting with Mr. Ogale after the expo.
Those typed notes contained additional information
regarding patents that had not been in the original hand-
written notes. The district court noted that Mr. Hanson
waited several years between learning of the potential
TransWeb prior art and informing the patent office. In
fact, Mr. Hanson did not disclose the TransWeb material
to the patent office until after negotiations for 3M to
purchase TransWeb had broken down. Further,
Mr. Hanson waited until the last possible moment, when
a notice of allowance had already been mailed, to submit
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 15
the TransWeb material in a request for continued prose-
cution. The district court found Mr. Hanson’s testimony
at trial attempting to explain this delay wholly incredible.
Based on these factual findings, the district court con-
cluded that the only reasonable inference that explains
the actions of Mr. Hanson and Mr. Jones is that they
strategically delayed in disclosing the TransWeb prior art
and then intentionally made an inaccurate disclosure of
that material. We can find no clear error in this conclu-
sion, particularly as the district court’s findings are based
in large degree on its determinations that Mr. Jones and
Mr. Hanson were not credible during relevant parts of
their testimony. See In re Rosuvastatin Calcium Patent
Litig., 703 F.3d 511, 521 (Fed. Cir. 2012) (“‘This court may
not reassess, and indeed is incapable of reassessing,
witness credibility and motive issues on review.’” (quoting
LNP Eng’g Plastics, Inc. v. Miller Waste Mills, Inc., 274
F.3d 1347, 1361 (Fed. Cir. 2001)).
Finding no clear error in the district court’s determi-
nations on both materiality and specific intent, and
finding no other improprieties in the district court’s
analysis, we see no abuse of discretion in the district
court’s ultimate conclusion of unenforceability for inequi-
table conduct.
V
The jury found that 3M committed a Walker Process
antitrust violation, and awarded TransWeb damages of
lost profits and attorney fees. The district court denied
3M’s motion for JMOL. 3M contests this judgment based
on several purported flaws in market definitions for the
antitrust claim and based on the theory that TransWeb’s
attorney fees are not appropriate antitrust damages for
the Walker Process violation.
In Walker Process, the Supreme Court held that a
plaintiff could bring an action under § 2 of the Sherman
16 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
Act based on the alleged maintenance and enforcement of
a fraudulently-obtained patent. See Walker Process
Equip. v. Food Mach. & Chem. Corp., 382 U.S. 172, 173–
74 (1965). In order to prevail on a Walker Process claim,
the antitrust-plaintiff must show two things: first, that
the antitrust-defendant obtained the patent by knowing
and willful fraud on the patent office and maintained and
enforced the patent with knowledge of the fraudulent
procurement; and second, all the other elements neces-
sary to establish a Sherman Act monopolization claim.
See Ritz Camera & Image v. SanDisk Corp., 700 F.3d 503,
506 (Fed. Cir. 2012).
TransWeb’s monopolization claim arises under § 2 of
the Sherman Act as an “attempt to monopolize.” 15
U.S.C. § 2 (2012). The “other elements” necessary to
establish an attempted monopolization claim are: “(1)
that the defendant has engaged in predatory or anticom-
petitive conduct with (2) a specific intent to monopolize
and (3) a dangerous probability of achieving monopoly
power.” Spectrum Sports, Inc. v. McQuillan, 506 U.S.
447, 456 (1993). In determining the dangerous probabil-
ity of achieving monopoly power for element (3), the
courts look at “the relevant market and the defendant’s
ability to lessen or destroy competition in that market.”
Id.In this case, 3M does not contest that TransWeb’s in-
equitable conduct showing, if affirmed, along with 3M’s
bringing of the infringement suit proves the first Walker
Process requirement, as well as elements (1) and (2) of the
second Walker Process requirement. We have previously
explained that Walker Process liability requires a higher,
more specific showing of “knowing and willful fraud” than
the more inclusive inequitable conduct doctrine. No-
belpharma AB v. Implant Innovations, 141 F.3d 1059,
1069 (Fed. Cir. 1998); see also Dippin’ Dots, Inc. v. Mosey,
476 F.3d 1337, 1346–48 (Fed. Cir. 2007). After The-
rasense, the showing required for proving inequitable
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 17
conduct and the showing required for proving the fraud
component of Walker Process liability may be nearly
identical. See, e.g., Gideon Mark & T. Leigh Anenson,
Inequitable Conduct and Walker Process Claims After
Therasense and the America Invents Act, 16 U. PA. J. BUS.
L. 361, 402 n.258 (2014). Regardless, because 3M does
not challenge the sufficiency of the evidence supporting
the jury’s Walker Process fraud finding beyond challeng-
ing the inequitable conduct finding, we will accept as
admitted that TransWeb sufficiently demonstrated the
Walker Process fraud component.
Instead, 3M challenges whether the district court
properly defined the relevant market for determining
dangerous probability of monopoly power in element (3),
and whether the award of TransWeb’s attorney fees is
appropriate even if the Walker Process case were proven.
A
The relevant market is defined by both a product
market and a geographic market. See Brown Shoe Co. v.
United States, 370 U.S. 294, 324 (1962). This court ap-
plies the law of the regional circuit as to market defini-
tion. See Nobelpharma, 141 F.3d at 1068. Under Third
Circuit law, the definition of both the product and geo-
graphic boundaries of the relevant market is a question of
fact. See Gordon v. Lewistown Hosp., 423 F.3d 184, 212
(3d Cir. 2005); Weiss v. York Hosp., 745 F.2d 786, 825 (3d
Cir. 1984).
TransWeb defined two distinct markets: an “up-
stream” market for “fluorinated polymeric material” and a
“downstream” market for NIOSH-certified respirators in
the United States. 3M challenges the scope of the rele-
vant products for the former and the geographic scope for
the latter.
18 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
i
The relevant product market consists of all products
that are “reasonably interchangeable by consumers for
the same purposes.” United States v. E. I. du Pont de
Nemours & Co., 351 U.S. 377, 395 (1956); see also Queen
City Pizza v. Domino’s Pizza, 124 F.3d 430, 436 (3d Cir.
1997). “Reasonable interchangeability” may be deter-
mined by looking at price, use, and qualities of the prod-
ucts. See E.I. du Pont de Nemours, 351 U.S. at 404; Tunis
Bros. Co. v. Ford Motor Co., 952 F.2d 715, 722 (3d Cir.
1991).
3M argues that the district court erred in limiting the
upstream market to fluorinated products. In particular,
3M argues that non-fluorinated filter media, such as
fiberglass and pleated material, are interchangeable with
fluorinated media, and that TransWeb’s expert admitted
as much.
While 3M points to evidence supporting a conclusion
that fluorinated material does not form a distinct market,
this does not undermine the sufficiency of the evidence
supporting the jury’s conclusion to the contrary. Evidence
demonstrated that: fluorinated material has a lower
pressure drop while maintaining high filtration, as com-
pared to other filter media; fluorinated material has a
longer service life than other filter media; and customers
would pay more for respirators with the fluorinated
media. Taken together, this evidence provides a sufficient
basis on which a reasonable jury could conclude that the
price, use, and qualities of fluorinated material render it a
distinct market from other filter media.
ii
“The relevant geographic market is the area in which
a potential buyer may rationally look for the goods or
services he or she seeks.” Tunis Bros., 952 F.2d at 726
(quoting Pa. Dental Ass’n v. Med. Serv. Ass’n of Pa., 745
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 19
F.2d 248, 260 (3d Cir. 1984)). “Consequently, the geo-
graphic market is not comprised of the region in which
the seller attempts to sell its product, but rather is com-
prised of the area where his customers would look to buy
such a product.” Id. at 726.
3M argues that the district court erred in limiting the
downstream market for NIOSH-certified respirators to
the United States. In particular, 3M argues that buyers
look to overseas companies to purchase NIOSH-certified
respirators, and that TransWeb’s expert testimony on the
relevant geographic market was without basis.
3M’s argument is based primarily on an artificial dis-
tinction. By repeatedly pointing to the potential for
buyers to purchase NIOSH-certified respirators from
foreign manufacturers, 3M implies that the “United
States” market only includes respirators manufactured in
the United States. But TransWeb’s expert clarified that
sales of NIOSH-certified respirators in the United States
by foreign manufacturers were already included in his
calculations for the “United States” geographic market.
See J.A. 2299. As such, the flaw proffered by 3M in the
definition of the geographic market is not present.
Beyond this artificial distinction, there is also no lack
of evidence to support the jury’s verdict. The district
court noted that the NIOSH certifications are relevant to
companies operating in the United States, as the United
States OSHA promulgates regulations regarding the use
of NIOSH-certified respirators by employees. As such, the
jury could have reasonably concluded that NIOSH certifi-
cation is most relevant to buyers in the United States,
given that OSHA’s regulations are limited to the United
States. Evidence also demonstrated that 3M itself re-
viewed sales in the United States market distinct from
other markets. Finally, while 3M notes that TransWeb’s
expert did not perform any “calculations” to determine
that the United States is the relevant geographic market,
20 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
his testimony was still based on expert opinion on which
the jury was entitled to rely. Therefore, there was a
sufficient basis on which a reasonable jury could conclude
that the United States was the relevant geographic mar-
ket for the NIOSH-certified respirators.
B
3M’s final challenge is to the district court’s award of
attorney fees as antitrust damages.
Section 4 of the Clayton Act provides that “any person
who shall be injured in his business or property by reason
of anything forbidden in the antitrust laws . . . shall
recover threefold the damages by him sustained, and the
cost of suit, including a reasonable attorney’s fee.” 15
U.S.C. § 15(a) (2012). The jury concluded that TransWeb
was entitled to its lost profits and attorney fees in recom-
pense for 3M’s antitrust violation. The jury found 3M
liable for approximately $34,000 in lost profits, which the
district court awarded to TransWeb as the trebled amount
of approximately $103,000. After review by a special
master, the district court concluded that TransWeb in-
curred approximately $3.2 million in attorney fees prose-
cuting the antitrust claim and approximately $7.7 million
defending the infringement suit. The district court
awarded the $3.2 million on a one-for-one basis as “cost of
suit” fees. The district court awarded the $7.7 million
trebled to approximately $23 million as damages. 3M
does not appeal the lost profits or cost of suit fees.
3M argues that the district court erred in awarding
the $23 million of attorney-fees damages, because
TransWeb failed to show any link between those attorney
fees and an impact on competition. 3M argues that those
attorney fees had no effect on competition because they
did not force TransWeb out of the market or otherwise
affect prices in the market. On this basis, 3M argues that
those attorney fees are not an antitrust injury and thus
cannot be a proper basis for antitrust damages.
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 21
Section 4 of the Clayton Act does not provide recom-
pense for any injury causally linked to a violation of the
antitrust laws, but rather only for antitrust injury. See
Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334
(1990); Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429
U.S. 477, 489 (1977). TransWeb’s injury-in-fact of $7.7
million must be “attributable to an anti-competitive
aspect of the practice under scrutiny” in order to qualify
as an antitrust injury. Atl. Richfield, 495 U.S. at 334.
Stated another way, TransWeb’s injury-in-fact must
“stem[] from a competition-reducing aspect or effect of the
defendant’s behavior,” not from competition-increasing or
competition-neutral aspects. Id. at 344.
3M’s argument focuses on the fact that the harmful
effect on competition proven by TransWeb at trial never
actually came about. TransWeb proved at trial that
increased prices for fluorinated filter media and respira-
tors would have resulted had 3M succeeded in its suit.
However, because TransWeb prevailed, these effects
never materialized.
We do not read the antitrust injury requirement from
Atlantic Richfield, Brunswick, and similar cases to so
narrowly define the scope of antitrust injury. Those cases
dealt with situations where the antitrust-defendants’
actions, though unlawful, would not have actually re-
duced competition. See, e.g., Atl. Richfield, 495 U.S. at337–38 (rejecting attempt to recover profits lost due to an
increase in competition and reduction in prices caused by
vertical, maximum-price-fixing arrangement); Cargill,
Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 114–17 (1986)
(rejecting attempt to block merger on the theory that the
merged companies would increase competition and lower
prices); Brunswick, 429 U.S. at 487–88 (rejecting attempt
to recover lost marginal profits that were not achieved
because an acquiring company purchased a failing com-
pany, thus maintaining competition with the antitrust-
plaintiff).
22 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
In this case, however, 3M’s unlawful act was in fact
aimed at reducing competition and would have done so
had the suit been successful. 3M’s unlawful act was the
bringing of suit based on a patent known to be fraudulent-
ly obtained. What made this act unlawful under the
antitrust laws was its attempt to gain a monopoly based
on this fraudulently-obtained patent. TransWeb’s attor-
ney fees flow directly from this unlawful aspect of 3M’s
act. That is, TransWeb’s attorney fees “flow[] from that
which makes [3M’s] acts unlawful,” Brunswick, 429 U.S.
at 489, and are “attributable to [this] anti-competitive
aspect of the practice under scrutiny,” Atl. Richfield, 495
U.S. at 334. The “competition-reducing aspect,” id. at
344, of 3M’s behavior was its attempt at achieving a
monopoly by bringing the subject lawsuit. 3M’s failure to
prevail in that lawsuit does not make the resultant attor-
ney fees any less attributable to that behavior, and the
attorney fees are precisely “the type of loss that the
claimed violations would be likely to cause,” Brunswick,
429 U.S. at 489 (quoting Zenith Radio Corp. v. Hazeltine
Research, Inc., 395 U.S. 100, 125 (1969)) (internal ellipses
omitted). Therefore, TransWeb’s attorney fees are both
injury-in-fact and antitrust injury.
3M relies on Comcast Corp. v. Behrend, 133 S. Ct.
1426 (2013), as foreclosing TransWeb’s recovery of attor-
ney fees as antitrust damages. But 3M relies on Comcast
primarily to refute TransWeb’s notion that it can separate
the antitrust injury in § 4 from the injury-in-fact used for
the basis of damages in § 4. On this point we agree with
3M. Section 4 only contemplates a single injury, i.e., it
does not allow one antitrust injury and a separate injury-
in-fact that is used for the basis of damages. But this flaw
in TransWeb’s position does not undo the damages award.
TransWeb’s attorney fees are themselves both injury-in-
fact and sufficiently stemming from the competition-
reducing aspect of 3M’s behavior to qualify as antitrust
injury. The district court instructed the jury in accord-
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 23
ance with this proper interpretation of the law, and
TransWeb presented sufficient evidence for the jury to
conclude that these requirements of § 4 were met.
This conclusion is supported by the only persuasive
authority that addresses the award of attorney fees as
damages for a Walker Process violation: Kearney &
Trecker Corp. v. Cincinnati Milacron Inc., 562 F.2d 365,
(6th Cir. 1977). In Kearney, the district court found the
patentee liable under § 2 of the Sherman Act based on the
Walker Process theory of liability. See id. at 372–73. The
patentee had obtained a patent through inequitable
conduct and later sued the defendant for infringement of
that patent. See id. at 368–69, 371–72. The appeals court
held that the defendant’s attorney fees could be awarded
as § 4 damages even though “[the defendant] did not
prove direct market place damages resulting from [the
patentee’s] anticompetitive acts.” Id. at 374–75. The
court relied on the reasoning from the district court that
the patentee forced the defendant into a position of hav-
ing to choose from three alternatives: cease competition,
take a license, or defend the infringement action. See id.
at 374. The appeals court held that “one who has estab-
lished or is attempting to establish an illegal monopoly by
fraud on the Patent Office or misuse of a patent should
not be permitted to further this goal by means of an
infringement suit. When the antitrust violations are
causally connected to the infringement action it is permis-
sible to include the expenses of defending that action in
the award of damages.” Id.
While a causal connection is no longer a sufficient
connection after Brunswick, 429 U.S. at 489, decided that
same year, the core logic in Kearney is still valid: the
patentee instigated an anticompetitive suit that forced
the defendant to choose between ceasing competition,
taking a disadvantageous position in competition (taking
a license), or defending the suit. Because the injury
suffered by the antitrust-plaintiff under each choice flows
24 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
from the anticompetitive aspect of the patent owner’s
behavior, each can be recovered as antitrust damages.
3M had indicated that it would not license its patents
to TransWeb. Therefore, in response to 3M’s anticompeti-
tive infringement suit, TransWeb had only the options of
ceasing competition altogether or defending the suit. Had
TransWeb chosen the first option, evidence at trial
demonstrated that TransWeb would have been forced out
of the market and higher prices would have resulted. So,
harmful effects on competition would have resulted and
TransWeb would have undoubtedly suffered antitrust
injury. TransWeb chose the second option. This prevent-
ed the harmful impacts to consumers of the relevant
products but caused TransWeb to suffer a very real injury
of its own, the cost of defending the suit. Both the lost
profits suffered under option one and the attorney fees
suffered under option two were attributable to what made
3M’s behavior unlawful, i.e., bringing the lawsuit on a
fraudulently-obtained patent in pursuit of a monopoly.
Therefore, the injury suffered by TransWeb under either
option qualifies as antitrust injury and thus can form the
basis of damages under § 4.
We are further persuaded to our conclusion by the
multitude of regional circuit precedents finding that
attorney fees incurred defending an anticompetitive
lawsuit can form the basis for antitrust damages. See
Premier Elec. Constr. Co. v. Nat’l Elec. Contractors Ass’n,
814 F.2d 358, 371–76 (7th Cir. 1987) (permitting recovery
of attorney fees for defending anticompetitive cartel suit
even though sham litigation was not present); Rickards v.
Canine Eye Registration Found., 783 F.2d 1329, 1334–35
(9th Cir. 1986) (permitting recovery of attorney fees for
defense of sham litigation); CVD, Inc. v. Raytheon Co., 769
F.2d 842, 857–58 (1st Cir. 1985) (permitting recovery of
attorney fees for defending bad faith assertion of trade
secrets); Handgards, Inc. v. Ethicon, Inc., 743 F.2d 1282,
1295–98 (9th Cir. 1984) (permitting recovery of attorney
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 25
fees for defending bad faith prosecution of patent in-
fringement suit); Handgards, Inc. v. Ethicon, Inc., 601
F.2d 986, 996–97 (9th Cir. 1979) (same); American Infra-
Red Radiant Co. v. Lambert Indus., 360 F.2d 977, 996–97
(8th Cir. 1966) (permitting recovery of attorney fees when
a patent suit is in furtherance of an illegal monopolistic
scheme, though the suit itself may not be sham litigation);
Dairy Foods Inc. v. Dairy Maid Prods. Coop., 297 F.2d
805, 808–10 (7th Cir. 1961) (same); Clapper v. Original
Tractor Cab Co., 270 F.2d 616, 623–24 (7th Cir. 1959)
(same); Kobe, Inc. v. Dempsey Pump Co., 198 F.2d 416,
424–25 (10th Cir. 1952) (same).
3M criticizes TransWeb’s reliance on cases such as
Handgards that did not deal with Walker Process viola-
tions in particular. According to 3M, because some cases
relied on by TransWeb dealt with sham litigation, the
holdings are inapposite here. It is true that we have held
that sham litigation and Walker Process are distinct
avenues by which a party can lose Noerr-Pennington
immunity. See Nobelpharma, 141 F.3d at 1071–72. In
Nobelpharma, we noted that the Supreme Court had
declined to explain how sham litigation and Walker
Process liability relate to one another, so we declined to
merge the two doctrines. See id. (discussing Prof’l Real
Estate Inv’rs, Inc. v. Columbia Pictures Indus., Inc., 508
U.S. 49, 61 n.6 (1993) (“PRE”)). We reasoned that the
objective baselessness and subjective bad faith require-
ments for sham litigation laid out in PRE are one way
that a party can lose antitrust immunity, while the “very
specific conduct that is clearly reprehensible” and defined
in Walker Process is another way. Id. at 1071.
But that distinction does not make the regional circuit
cases dealing with sham litigation or other antitrust
violations uninformative to the present issue of damages.
While there are distinctions between the various types of
antitrust violations, the logic underlying the award of
attorney fees as antitrust damages is sufficiently similar
26 TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES
to make those holdings relevant in the Walker Process
context. In particular, it is the abuse of the legal process
by the antitrust-defendant that makes the attorney fees
incurred by the antitrust-plaintiff during that legal pro-
cess a relevant antitrust injury. See Premier Electric, 814
F.2d at 375–76 (explaining that fraud in litigation seeks
to obtain more than authorized by the political branches
and that “litigation costs incurred to combat the conse-
quences of acts exceeding the authorization granted by
the political branches could be the basis of liability”);
Handgards, 601 F.2d at 997 (“In a suit alleging antitrust
injury based upon a bad faith prosecution theory it is
obvious that the costs incurred in defense of the prior
patent infringement suit are an injury which ‘flows’ from
the antitrust wrong.”). Cf. PRE, 508 U.S. at 58 (“Indeed,
we recognized that recourse to agencies and courts should
not be condemned as sham until a reviewing court has
discerned and drawn the difficult line separating objec-
tively reasonable claims from a pattern of baseless, repet-
itive claims which leads the factfinder to conclude that
the administrative and judicial processes have been
abused.” (internal quotation marks and modifications
omitted)).
No assertion of a patent known to be fraudulently-
obtained can be a proper use of legal process. No success-
ful outcome of that litigation, regardless of how much the
patentee subjectively desires it, would save that suit from
being improper due to its tainted origin. Therefore, we
find the holdings of our sister circuits allowing attorney
fees as antitrust damages in contexts such as sham litiga-
tion and lawsuits in furtherance of a broader anticompeti-
tive scheme to be persuasive arguments in favor of
allowing TransWeb to recover its attorney fees as § 4
damages in this case.
To conclude otherwise would be contrary to the pur-
pose of the antitrust laws. The antitrust laws exist to
protect competition. See Brown Shoe, 370 U.S. at 320
TRANSWEB, LLC v. 3M INNOVATIVE PROPERTIES 27
(1962). If we were to hold that TransWeb can seek anti-
trust damages only under option one, forfeiture of compe-
tition, but not option two, defending the anticompetitive
suit, then we would be incentivizing the former over the
latter. This would amount to incentivizing TransWeb to
forfeit competition rather than continue it. This is not in
accord with the purpose of those very same antitrust laws.
Furthermore, it furthers the purpose of the antitrust
laws to encourage TransWeb to bring its antitrust suit
under option two instead of waiting to be excluded from
the market under option one. If TransWeb proceeds only
after being excluded from the market under option one,
then the injury-in-fact will no longer be borne by
TransWeb alone, but rather would be shared by all con-
sumers in the relevant markets.
For these reasons, we find that TransWeb’s attorney
fees incurred defending the infringement suit are anti-
trust injury and thus can form the basis for damages
under § 4.
VI
Based on the foregoing, we affirm the district court’s
denial of JMOL on non-invalidity and on the antitrust
counts, as well as the district court’s judgment of unen-
forceability due to inequitable conduct.
AFFIRMED