Cummins-Allison Corp. v. Sbm Co., Ltd. , 484 F. App'x 499 ( 2012 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
CUMMINS-ALLISON CORP.,
Plaintiff-Cross-Appellant,
v.
SBM CO., LTD.
(FORMERLY KNOWN AS SHINWOO
INFORMATION & TELECOMMUNICATIONS CO.,
LTD.),
Defendant-Appellant,
and
AMRO-ASIAN TRADE, INC.,
Defendant-Appellant.
__________________________
2011-1049, -1065, -1066
__________________________
Appeals from the United States District Court for the
Eastern District of Texas in case no. 07-CV-0196, Judge
Ron Clark.
_______________________
Decided: May 25, 2012
_______________________
EDWARD L. FOOTE, Winston & Strawn, LLP, of Chi-
cago, Illinois, argued for plaintiff-cross appellant. With
CUMMINS-ALLISON CORP v. SBM CO LTD 2
him on the brief were SCOTT J. SZALA and PETER C.
MCCABE. Of counsel on the brief were STEPHEN G.
RUDISILL and DAVID C. MCKONE, Nixon Peabody, LLP, of
Chicago, Illinois. Of counsel was BRADLEY M. TAUB.
KEVIN M. O’BRIEN, Baker & McKenzie, LLP, of Wash-
ington, DC, argued for defendant-appellant SBM CO.,
LTD. With him on the brief were KEVIN J. SULLIVAN; and
W. BARTON RANKIN, of Dallas, Texas.
GRANT E. KINSEL, Perkins Coie, LLP, of Los Angeles,
California, argued for defendant-appellant, Amro-Asian
Trade, Inc. With him on the brief were MICHAEL J. SONG;
and DAN L. BAGATELL, of Phoenix, Arizona.
__________________________
Before RADER, Chief Judge, LOURIE and REYNA, Circuit
Judges.
REYNA, Circuit Judge.
Cummins-Allison Corporation (“Cummins-Allison”)
sued SBM Company, Ltd. (“SBM”) and Amro-Asian
Trade, Inc. (“Amro”) (collectively, “Defendants-
Appellants”) in the United States District Court of the
Eastern District of Texas. 1 Cummins-Allison alleged
infringement of U.S. Patent Nos. 6,459,806 (“the ‘806
Patent”), 5,966,456 (“the ‘456 Patent”), 5,909,503 (“the
1 SBM is a Korean corporation that manufactures
the accused currency denominator devices. Amro imports
SBM products into the United States, including the
accused devices, and distributes them via a group of U.S.-
based distributors. Cummins-Allison is an Illinois-based
company that manufactures the currency denominator
devices and is owner of the patents-at-issue.
3 CUMMINS-ALLISON CORP v. SBM CO LTD
‘503 Patent”), and 6,381,354 (“the ‘354 Patent”), which
relate to currency denomination and counterfeit detection.
A trial was held, and the jury concluded that the as-
serted claims of the patents-at-issue were valid and that
the claims of the ‘503 and ‘354 patents were infringed. In
response to the parties’ post-trial challenges to the ver-
dict, the district court denied their motions for the most
part but granted judgment as a matter of law (“JMOL”) as
to the invalidity of Claim 41 of the ‘456 Patent. 2 The
district court also held that Claim 55 of the ‘354 Patent
was not entitled to an earlier priority date and was inva-
lid as anticipated by the JetScan 4062.
In this appeal, the parties challenge several of the dis-
trict court’s infringement and invalidity holdings, and
Amro and SBM claim that the damages award should be
set aside. We uphold the damages award and affirm the
district court’s denial of JMOL as to the validity of the
asserted claims of the ‘806 and ‘503 patents and the
infringement of Claim 15 of the ‘503 Patent. However, we
reverse the district court’s grant of JMOL of anticipation
of Claim 55 of the ‘354 Patent because substantial evi-
dence supported the jury’s verdict. We have considered
the parties’ other arguments made on appeal and find
that they provide no basis for relief.
I.
BACKGROUND
This case concerns currency denominators, which are
used to discriminate between different currency denomi-
nations (e.g., $1 versus $5 bills) and to count the value of
a stack of currency with mixed denominations. The ‘806
2 The ‘456 Patent is not at issue in this appeal.
CUMMINS-ALLISON CORP v. SBM CO LTD 4
Patent claims a method of denominating mixed currency
bills, transporting them from an input receptacle to an
output receptacle, and reporting the total value of the
currency. The ‘503 Patent relates to authentication
sensors used in counterfeit detection. The ‘354 Patent
claims a “currency identification system [that] identifies
currency bills of different denominations of a plurality of
currency systems.” A1276.
Cummins-Allison sued SBM and Amro, alleging in-
fringement. A trial was held from September 28, 2009,
through October 7, 2009. SBM and Amro did not contest
infringement as to the asserted claims of the ‘806 and ‘456
patents but moved for JMOL of invalidity. The jury found
that Claim 15 of the ‘503 Patent was literally infringed
and Claim 55 of the ‘354 Patent was infringed under the
doctrine of equivalents (“DOE”), but that none of the
claims of any of the patents-at-issue had been willfully
infringed. The jury further concluded that none of the
asserted claims of the ‘456 and ‘806 patents were invalid
as obvious. The jury found that Claim 55 of the ‘354
Patent was not invalid as anticipated by the JetScan 4061
or JetScan 4062 and that Claim 15 of the ‘503 Patent was
not invalid for obviousness. The jury awarded Cummins-
Allison $11,898,279 million in damages plus interest and
a reasonable royalty per unit of $400.
After the trial concluded, the parties filed motions, in-
cluding motions for JMOL, challenging the verdict. In its
Revised Memorandum and Order, the district court
addressed and disposed of the various motions. Only
those motions and related holdings pertinent to the
instant appeal are discussed herein.
‘806 Patent
The district court denied Defendants-Appellants’ mo-
tions for JMOL as to the infringement of Claims 58, 85,
5 CUMMINS-ALLISON CORP v. SBM CO LTD
and 120 of the ‘806 Patent because “Defendants did not
dispute that the accused devices practice the methods
claimed in claims 58, 85, and 120.” A31. It also denied a
motion for JMOL that those claims are invalid as obvious.
‘503 Patent
Defendants-Appellants moved for JMOL that Claim
15 of the ‘503 Patent was not infringed on the grounds
that Cummins-Allison failed to present sufficient evidence
that the accused products included Claim 15’s “means for
comparing” limitation. With regard to that limitation, the
parties agreed:
This element is a means-plus-function ele-
ment to be construed under 35 U.S.C. § 112,
¶ 6.
Function: “comparing, for each type of
characteristic information, said respective
output signal to corresponding reference in-
formation associated with the one of said
plurality of sensitivity settings selected by
said means for selecting for said type of
characteristic information.”
The corresponding structure is the micro-
processor 12 executing at least one of the
algorithms described in column 12, line 41
through column 13, line 9, and column 18,
line 45, through column 19, line 67.
A32.
In denying Defendants-Appellants’ motion for JMOL,
the district court observed that under § 112, ¶6, the claim
would cover the structure and its equivalents and empha-
sized that Defendants-Appellants did not dispute that the
accused products perform the “means for comparing”
function. As the district court explained, Defendants-
CUMMINS-ALLISON CORP v. SBM CO LTD 6
Appellants agreed to the claim construction even though
it referenced a sizable portion of the specification for the
corresponding structure and only required that the
“means for comparing” function be performed by one of
the algorithms described in the agreed-upon portion. For
those reasons and others stated on the record, the district
court denied the motion. 3
‘354 Patent
Amro and SBM moved for JMOL that Claim 55 of the
‘354 Patent is not infringed by the accused products on
the ground that Cummins-Allison did not present suffi-
cient evidence from which a jury could have found that
the accused products include Claim 55’s “signal process-
ing means” limitation. The parties agreed to construe
this limitation as follows:
This element is a means-plus-function ele-
ment to be construed under 35 U.S.C. §112,
¶6.
Function: “comparing said retrieved charac-
teristic information with master characteris-
tic information associated with at least one
genuine bill; said signal processing means
generating an indication of the denomination
of said bill based on said comparison when
said retrieved characteristic information suf-
ficiently matches said master characteristic
information.”
The corresponding structure is “a CPU pro-
grammed to carry out the correlation algo-
3 The district court also denied Cummins-Allison’s
motion for JMOL that Claim 15 is valid as moot given the
jury’s finding of validity for the ‘503 Patent.
7 CUMMINS-ALLISON CORP v. SBM CO LTD
rithm disclosed in the specification to com-
pare the scanned signal samples, or scanned
patterns, from the unknown bills with the
stored master characteristic pattern.”
A33-34.
In denying the motion, the district court held that
there was sufficient evidence to support the jury’s conclu-
sion that the differences between the “correlation algo-
rithm” described in the specification of the ‘354 Patent
and the one performed by the accused devices are insub-
stantial and therefore, that the algorithms performed are
equivalent.
Amro and SBM also moved for JMOL that the effec-
tive priority date of Claim 55 of the ‘354 Patent was May
12, 1998 -- the filing date of the application that issued as
the ‘354 Patent. The ‘354 Patent is a continuation of
application No. 08/399,854 (“the ‘854 Application”) filed on
March 7, 1995, which issued as U.S. Patent No. 5,875,259
(“the ‘259 Patent”). The ‘354 and ‘259 patents share a
common specification and contain some identical draw-
ings. Cummins-Allison argued that Claim 55 is entitled
to the earlier priority date of March 7, 1995, based on the
filing date of the ‘854 Application. The district court
found that Claim 55 is not entitled to an earlier priority
date and granted the motion. 4
Cummins-Allison moved for JMOL that the JetScan
4062 is not prior art to Claim 55 of the ‘354 Patent, but
the district court denied the motion because the JetScan
4062 was introduced into the market in November 1994.
4 The district court denied Defendants-Appellants’
motion for JMOL that Claim 55 of the ‘354 Patent is
invalid as anticipated by the JetScan 4061.
CUMMINS-ALLISON CORP v. SBM CO LTD 8
Because the district court had already held that Claim
55’s effective priority date was its actual filing date -- May
12, 1998 -- it likewise concluded that the JetScan 4062 is
prior art because it was in public use or on sale in the
United States more than one year prior to the ‘354 Pat-
ent’s priority date.
Amro and SBM moved for JMOL that Claim 55 of the
‘354 Patent is invalid as anticipated by the JetScan 4062.
The district court granted the motion and denied Cum-
mins-Allison’s cross-motion because of its earlier rulings
that Claim 55’s effective priority date was May 12, 1998,
and that the JetScan 4062 is prior art, and because it
found that Cummins-Allison had conceded that the Jet-
Scan 4062 is within the scope of Claim 55 of the ‘354
Patent. 5
In sum, the district court denied Defendants-
Appellants’ motions for JMOL as to the ‘806 and ‘503
Patents but held that Claim 55 of the ‘354 Patent was not
entitled to an earlier priority date and was, therefore,
invalid as anticipated by the JetScan 4062. The district
court entered judgment on the verdict and the jury’s
damages award because the parties agreed that the
invalidity of the asserted claims of the ‘354 and ‘456
patents did not alter the measure of damages. Cummins-
Allison moved the Court to reconsider its holding that
Claim 55 of the ‘354 Patent was not entitled to an earlier
priority date and therefore, was invalid as anticipated,
but the district court denied the motion.
5 The district court also addressed and resolved
various motions relating to the ‘456 Patent, but those
motions are not discussed herein because the ‘456 Patent
is not before us in this appeal.
9 CUMMINS-ALLISON CORP v. SBM CO LTD
This appeal followed and presents various questions,
which we have consolidated and summarized as follows:
(i) whether the district court properly denied Defendants-
Appellants’ challenges regarding the validity of the as-
serted claims of the ‘806 and ‘503 patents; (ii) whether the
district court properly upheld the jury’s verdict relating to
the infringement of Claim 15 of the ‘503 Patent; (iii)
whether the damages award should be set aside; and (iv)
in a cross-appeal, whether the district court erred in
granting JMOL of invalidity by anticipation of Claim 55 of
the ‘354 Patent.
As illustrated above, the district court addressed a
large number of issues many of which are challenged in
this appeal. We have no reason to disagree with the
district court with respect to most of the issues on appeal
in which it applied the law correctly or reached conclu-
sions that are not subject to significant challenge. There-
fore, we focus our analysis below solely upon whether the
district court erred in granting JMOL of invalidity by
anticipation of Claim 55 of the ‘354 Patent.
II.
DISCUSSION
A. Standard of Review
The Court has jurisdiction under 28 U.S.C. §
1295(a)(1). In reviewing the grant or denial of a motion
for JMOL, we apply the standards of the regional circuit,
here, the Fifth Circuit. See Therasense, Inc. v. Becton,
Dickinson, & Co., 593 F.3d 1325, 1330 (Fed. Cir. 2010).
Under Fifth Circuit law, the grant of JMOL is reviewed de
novo. Orion IP, LLC v. Hyundai Motor Am., 605 F.3d 967,
973 (Fed. Cir. 2010). JMOL should be granted “if, after
considering all the evidence in the light [favorable to] and
with all reasonable inferences most favorable to the party
CUMMINS-ALLISON CORP v. SBM CO LTD 10
opposed to the motion, the facts and inferences point so
strongly and overwhelmingly in favor of one party that
the court concludes that reasonable jurors could not
arrive at a contrary verdict.” Western Union Co. v. Mon-
eygram Payment Sys., Inc., 626 F.3d 1361, 1367 (Fed. Cir.
2010).
JMOL is appropriate when “a party has been fully
heard on an issue during a jury trial and the court finds
that a reasonable jury would not have a legally sufficient
evidentiary basis to find for the party on that issue.” Fed.
R. Civ. P. 50(a)(1). “In determining whether a reasonable
jury would have a legally sufficient evidentiary basis for
the facts as found, we must presume that the jury re-
solved all factual disputes in favor of the prevailing party,
and we must leave those findings undisturbed so long as
substantial evidence supports them.” Cordis Corp. v.
Boston Sci. Corp., 658 F.3d 1347, 1358 (Fed. Cir. 2011).
Anticipation under 35 U.S.C. § 102 is a question of
fact, and a jury determination of anticipation is reviewed
for substantial evidence. ClearValue, Inc. v. Pearl River
Polymers, Inc., 668 F.3d 1340, 1343 (Fed. Cir. 2012); 3M
v. Chemque, Inc., 303 F.3d 1294, 1301 (Fed. Cir. 2002).
Substantial evidence, however, requires more than a mere
scintilla; rather, it is such relevant evidence as a reason-
able mind might accept as adequate to support a conclu-
sion. In re Kotzab, 217 F.3d 1365, 1369 (Fed. Cir. 2000)
(citation omitted). The court must review the record as a
whole, but the mere fact that it may be possible to draw
two inconsistent conclusions from the record does not lead
to the conclusion that substantial evidence does not
support the jury’s determination. Id.
B. Analysis
Defendants-Appellants argue that the effective prior-
ity date of Claim 55 of the ‘354 Patent was May 12, 1998 –
11 CUMMINS-ALLISON CORP v. SBM CO LTD
the filing date of the ‘354 Patent Application. Cummins-
Allison contends that Claim 55 is entitled to a priority
date of March 7, 1995 -- the filing date of the ‘854 Applica-
tion of which the ‘354 Patent is a continuation. An inven-
tion is invalid as anticipated if it “was in public use or on
sale in the United States more than one year prior to the
date of the patent application.” 35 U.S.C. § 102(b). The
JetScan 4062 was on sale in the United States as of
November 1994. Therefore, if the ‘354 Patent is entitled
to the March 1995 priority date, then Claim 55 cannot be
invalid as anticipated by the JetScan 4062. 35 U.S.C. §
102(b). The district court granted Defendants-Appellants’
motion for JMOL because it found that Claim 55 had a
priority date of May 12, 1998, and that, therefore, it was
anticipated by the JetScan 4062.
A claim is entitled to priority from the filing date of an
earlier filed application, but only if the earlier filed appli-
cation describes the subject matter of the claim as re-
quired by § 112. 35 U.S.C. § 120. Section 112 requires a
patent specification to contain a “written description of
the invention and the manner and process of making and
using it, in such full, clear, concise, and exact terms as to
enable any person skilled in the art to which it pertains,
or with which it is most nearly connected, to make and
use the same.” 35 U.S.C. § 112. Thus, if the later filed
application’s claims are not set forth in the earlier filed
application with the specificity that § 112 requires, the
later filed application cannot claim the earlier filing date
for those claims. 35 U.S.C. § 120.
Compliance with the written description requirement
is a question of fact. See Ariad Pharms., Inc. v. Eli Lilly &
Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc). To
satisfy the written description requirement, a patent’s
specification must reasonably convey to a person having
ordinary skill in the art that the inventor had possession
CUMMINS-ALLISON CORP v. SBM CO LTD 12
of the later-claimed subject matter as of the earlier filing
date. Id. While the earlier filed application need not
describe the later filed claims verbatim, a description that
merely renders the later filed invention obvious is insuffi-
cient. Id. at 1352.
In proper circumstances, drawings alone may provide
an adequate written description under § 112 if they
describe what is claimed and convey to those of skill in
the art that the patentee actually invented what is
claimed. Cooper Cameron Corp. v. Kvaerner Oilfield
Prods., 291 F.3d 1317, 1322 (Fed. Cir. 2002) (internal
citation omitted); see also Vas-Cath, Inc. v. Mahurkar, 935
F.2d 1555, 1563 (Fed. Cir. 1991). In cases involving
dimensions, the test is whether one skilled in the art
could derive the claimed dimensions from the patent’s
disclosure. Vas-Cath, 935 F.2d at 1566 (citation omitted).
Claim 55 of the ‘354 Patent was entitled to the March
1995 priority date from the filing of the application for the
‘259 Patent only if the earlier specification satisfied the
written description requirement as to Claim 55. 35
U.S.C. § 120. Here, the application that issued as the ‘354
Patent was filed on May 12, 1998, and issued as the ‘354
Patent on April 30, 2002. Cummins-Allison asserted only
Claim 55 of the ‘354 Patent, which reads in pertinent
part, with the limitations pertinent to the decisive prior-
ity issue italicized:
55. A compact currency evaluation device for
identifying the denomination of currency
bills of different denominations comprising: a
housing having a depth dimension, a width
dimension and a height dimension within
which said device is enclosed; said depth di-
mension being about 5 times the smaller
cross-sectional dimension of the smallest di-
13 CUMMINS-ALLISON CORP v. SBM CO LTD
mensioned bill to be identified by said device;
said width dimension being about 2 times the
larger cross-sectional dimension of the small-
est dimensioned bill to be identified by said
device.
A1371 (emphasis added).
The ‘354 Patent is a continuation of the ‘259 Patent
that resulted from the ‘854 Application filed on March 7,
1995. In claiming priority from March 7, 1995, Cummins-
Allison primarily relies upon Figures 1 and 19, depicted
below, which appear identical in the ‘354 Patent and the
‘259 Patent. Figure 1 depicts “a perspective view of a
currency scanning and counting machine embodying the
present invention.” A1338. Figure 19 “is an enlarged
vertical section taken approximately through the center of
the machine, but showing the various transport rolls in
side elevation.” Id.
Compare A1279 with A4977.
CUMMINS-ALLISON CORP v. SBM CO LTD 14
Compare A1299 with A4997.
Defendants-Appellants argue that Cummins-Allison
cannot claim priority from the filing date of the ‘854
Application because its written description and drawings
do not show or state that the currency evaluation device
had the specific dimensions recited in Claim 55 and the
figures are not explicitly drawn to scale.
As explained above, the JetScan 4062 was on sale in
the United States as of November 1994, and Cummins-
Allison appears to have admitted that the JetScan 4062
met all the limitations of Claim 55. Therefore, Claim 55’s
priority date is critical because if the ‘354 Patent is not
entitled to the March 1995 priority date, then the JetScan
4062 anticipated Claim 55 of the ‘354 Patent.
With regard to this priority date/anticipation
issue, the jury was instructed:
SBM and Amro can meet their burden of
proving that an earlier application fails to
satisfy the written description requirement
15 CUMMINS-ALLISON CORP v. SBM CO LTD
for a particular claim (and thus establish
that the claim is not entitled to an earlier ef-
fective filing date) by showing by clear and
convincing evidence that the entirety of the
specification of the earlier application would
clearly indicate to a person of ordinary skill
in the art that the invention described in
that application is of a narrower scope than
the invention of that particular claim.
A1227.
The jury found that Claim 55 of the ‘354 Patent was
not anticipated by the JetScan 4062. However, the dis-
trict court disagreed and granted JMOL. Specifically, the
district court found that the ‘854 Application and ‘259
Patent do not describe or discuss the specific dimensions
in Claim 55, and the figures contained therein do not
show the dimensions. The district court stated that “pat-
ent drawings do not define the precise proportions of the
elements and may not be relied on to show particular
sizes if the specification is completely silent on the issue.”
(citing, inter alia, Hockerson-Halberstadt, Inc. v. Aria Gr.
Int'l, Inc., 222 F.3d 951, 956 (Fed. Cir. 2000)). Cummins-
Allison moved for reconsideration, and the district court
denied the motion.
We disagree with the district court’s reliance on Hock-
erson-Halberstadt. As long as a person of skill in the art
could derive the claimed dimensions from the patent’s
disclosure, there is no additional requirement that the
specification must explicitly disclose the precise propor-
tions or particular sizes. The ‘354 Patent and the ‘854
Application share a common specification and contain
several identical drawings. Claim 55 describes a “com-
pact currency evaluation device” with a depth dimension
of “about 5 times the smaller cross-sectional dimension of
CUMMINS-ALLISON CORP v. SBM CO LTD 16
the smallest dimensioned bill to be identified by said
device” and a width dimension of about 2 times the larger
cross-sectional dimension of the smallest dimensioned bill
to be identified by said device. The figures of the ‘854
Application and ‘259 Patent could be dimensioned by a
person having ordinary skill in the art based on state-
ments in the written description. Specifically, the ‘259
Patent explains that Figure 1 shows a “currency discrimi-
nation system adapted to U.S. currency,” Col. 16, lines 51-
54, 6 and the distance between the axes of the two driven
transport rolls (223 and 241) of Fig. 19 is “just short of the
length of the narrow dimension of the currency bills.” Col.
42, lines 59-66; see also col. 41, lines 35-37 (“the drive roll
223 is dimensioned so that the circumference of the
outermost portions of the grooved surfaces is greater than
the width W of a bill”); col. 56, lines 15-16 (discussing Fig.
47b and stating that the "preferred length for the linear
array scanhead is about 6-7 inches (15cm-17cm)”).
The jury found that Claim 55 was not invalid as an-
ticipated by the JetScan 4062. In reaching this decision,
the jurors had the ‘259 and ‘354 Patents, inter alia, and
other evidence before them. In reviewing a jury verdict
where the underlying facts are disputed, the court must
“presume that the jury resolved the underlying factual
disputes in favor of the verdict winner and leave those
presumed findings undisturbed if they are supported by
substantial evidence.” See Spectralytics, Inc. v. Cordis
Corp., 649 F.3d 1336, 1342 (Fed. Cir. 2011). Therefore,
here we must presume that the jury reviewed and re-
solved issues concerning the dimensions from the specifi-
cations and figures contained therein as well as
6 U.S. bills are of standard dimensions.
17 CUMMINS-ALLISON CORP v. SBM CO LTD
consideration of other pertinent evidence presented at
trial.
Because these examples of dimensions could be used
to “scale” the relevant figures and deduce dimensions
from them, the district court erred in concluding that
Claim 55 was not entitled to the March 1995 priority
date. Substantial evidence supported the jury’s determi-
nation because a person having ordinary skill in the art
could have deduced the dimensions from a review of the
language in the specification and the drawings them-
selves. Therefore, the jury verdict should have been
upheld, and we reverse. 7
III.
CONCLUSION
For the foregoing reasons, we affirm the district
court’s holdings as to the ‘806 and ‘503 patents and up-
hold the damages award. However, we reverse the dis-
trict court’s grant of JMOL as to the invalidity by
anticipation of Claim 55 of the ‘354 Patent.
AFFIRMED-IN-PART, REVERSED-IN-PART
COSTS
No costs.
7 In light of our holdings and the parties’ agreement
that the invalidity of the ‘354 and ‘456 patent claims did
not alter the measure of damages, our reversal as to the
issue on cross-appeal does not impact the damages award.