Hafco Foundry and Machine Co. v. Gms Mine Repair ( 2020 )

Case: 18-1904 Document: 49 Page: 1 Filed: 03/16/2020
United States Court of Appeals
for the Federal Circuit
______________________
HAFCO FOUNDRY AND MACHINE COMPANY,
INCORPORATED,
Plaintiff-Appellee
v.
GMS MINE REPAIR AND MAINTENANCE, INC.,
Defendant-Appellant
______________________
2018-1904
______________________
Appeal from the United States District Court for the
Southern District of West Virginia in No. 1:15-cv-16143,
Senior Judge David A. Faber.
______________________
Decided: March 16, 2020
______________________
ANDREW G. FUSCO, Bowles Rice, LLP, Morgantown,
WV, argued for plaintiff-appellee. Also represented by
JEFFREY A. RAY.
JAMES R. LAWRENCE, III, Michael Best & Friedrich, Ra-
leigh, NC, argued for defendant-appellant. Also repre-
sented by ANTHONY J. BILLER.
______________________
Before NEWMAN, CHEN, and STOLL, Circuit Judges.
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2 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR
Opinion of the court filed PER CURIAM.
Opinion concurring in part, dissenting in part filed by
Circuit Judge NEWMAN.
PER CURIAM.
Hafco Foundry and Machine Company, Inc. (“Hafco”) is
the owner of United States Design Patent No. D681,684
(“the ’684 patent”), issued on May 7, 2013 for a “Rock Dust
Blower.” This device is used to distribute rock dust in areas
such as coal mines, where rock dust is applied to the mine’s
interior surfaces, to control the explosive hazards of coal
dust. Hafco developed and manufactured this device, and
in April 2014 contracted with Pioneer Conveyer LLC, an
affiliate of GMS Mine Repair and Maintenance, Inc. (to-
gether “GMS”), whereby GMS would serve as distributor of
Hafco’s rock dust blower for sale to mining customers. In
May 2015 Hafco terminated this arrangement, stating that
performance was poor. GMS then produced a rock dust
blower for sale to mining customers.
Hafco sued GMS for infringement of the ’684 patent.
Trial was to a jury. GMS filed a pre-trial motion for patent
invalidity, and the district court found that GMS had not
presented any evidence that might establish invalidity.
The jury then found GMS liable for willful infringement,
and awarded damages of $123,650. The district court en-
tered judgment on the verdict.
Both parties filed post-trial motions. On Hafco’s mo-
tion the court entered a permanent injunction against in-
fringement. On GMS’ motion the district court remitted
the damages award to zero, as not in accordance with the
law of patent damages. The court offered a new trial on
damages, and stayed the new trial pending this appeal. 1
1Hafco Foundry & Mach. Co. v. GMS Mine Repair
& Maint., Inc., Civ. No. 1:15-16143, 2018 WL 1582728, at
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HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR 3
GMS raises two issues on appeal: whether it is entitled to
judgment as a matter of law on the issue of infringement;
and, in the alternative, whether it is entitled to a new trial
on the issue of infringement due to errors of law in the jury
instruction. Hafco did not cross appeal on any issue relat-
ing to damages.
We affirm the judgment of infringement and the dis-
trict court’s denial of GMS’ request for a new trial, the only
two issues raised by GMS on appeal. We remand to the
district court for further proceedings consistent with this
opinion, including any proceedings necessary for a final
judgment on damages.
Standards of Review
We review the denial of a motion for judgment as a
matter of law (“JMOL”) under the law of the regional
circuit where the appeal from the district court would
normally lie. Orion IP, LLC v. Hyundai Motor Am., 605
F.3d 967, 973 (Fed. Cir. 2010). In the Fourth Circuit, the
district court’s ruling on a motion for JMOL receives
plenary review. Anderson v. G.D.C., Inc., 281 F.3d 452, 457
(4th Cir. 2002). The “decision to grant or deny a new trial
is within the sound discretion of the district court, and we
respect that determination absent an abuse of discretion.”
Cline v. Wal-Mart Stores, Inc., 144 F.3d 294, 301 (4th Cir.
1998).
On review of the jury’s factual findings, the evidence is
viewed in the light most favorable to the jury’s verdict.
Dotson v. Pfizer, 558 F.3d 284, 292 (4th Cir. 2009). The
*8–12 (S.D. W. Va. Mar. 30, 2018) (“Dist. Ct. Op.”); id., 2018
WL 1733986 (S.D. W. Va. Apr. 10, 2018) (“Dist. Ct. Order”);
id., 2018 WL 1786588 (S.D. W. Va. Apr. 12, 2018)
(“Amended Order”); id., 2018 WL 3150353 (S.D. W. Va.
June 26, 2018) (“Recon. Op.”).
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4 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR
Fourth Circuit, in which this trial was held, “accord[s] the
utmost respect to jury verdicts and tread[s] gingerly in
reviewing them.” Lack v. Wal-Mart Stores, Inc., 240 F.3d
255, 259 (4th Cir. 2001); Price v. City of Charlotte, 93 F.3d
1241, 1250 (4th Cir. 1996). See United States v. Foster, 507
F.3d 233, 244 (4th Cir. 2007) (“A jury’s verdict must be
upheld on appeal if there is substantial evidence in the
record to support it.”).
I
THE ’684 PATENT
The ’684 patent claims a design for a rock dust blower,
as shown in the drawings: Figure 1 is a side view of the
device, Figure 4 is a top view of the lid, and Figure 5 is a
bottom view of the connector and stand:
GMS filed a pre-trial motion challenging patent valid-
ity on the ground that the ’684 patent is not a proper design
patent because all the elements of the device are func-
tional. GMS alternatively argued that the claim of the ’684
patent should be construed to exclude all functional
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HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR 5
elements of the claimed design. The district court denied
the motion.
In its proposed jury instructions, GMS included an in-
struction that stated “[w]here a design contains both func-
tional and non-functional elements, a design patent
protects only the non-functional aspects of the design as
shown in the patent drawings, if there are any such non-
functional aspects.” This instruction was not included in
the final jury instructions, and GMS neither objected to the
jury instructions nor presented evidence on the functional
aspects of the ’684 patent at trial.
In its post-trial motion, GMS argued that the design of
its rock dust blower is plainly dissimilar to the claimed de-
sign, that there were errors of law in the jury instructions,
and that it was unfairly prejudiced by its inability to intro-
duce evidence of invalidity at trial. The district court ruled
that substantial evidence supported the jury verdict of in-
fringement, that the jury instructions were proper, and
that it had not in fact precluded GMS from arguing inva-
lidity at trial. Specifically, the district court stated that “If
GMS wanted to argue the invalidity of the patent to the
jury, it needed to offer evidence on this point. The court
did not prohibit GMS from doing so.” Dist. Ct. Op. at 21.
GMS did not argue that the functional aspects of the
claimed design should have been excluded from the
infringement analysis, or that it was prevented from
making this argument at trial.
On appeal, GMS argues for the first time that, when
certain functional and prior art aspects of the ’684 patent
are excluded, the design of its rock dust blower does not
infringe the claimed design of the ’684 patent as a matter
of law. GMS does not challenge on appeal the district
court’s invalidity or claim construction rulings. Because
GMS never made this non-infringement argument at the
district court, nor presented relevant evidence on the
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HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR 7
Infringement - Generally
Patent law gives the owner of a valid patent the
right to exclude others from making, using, offering
to sell or selling the patented design within the
United States during the term of the patent. Any
person or business entity that has engaged in any
of those acts without the patent owner’s permission
infringes the patent. Here, Hafco alleges that
GMS’ rock dust blower infringes the ’684 design pa-
tent.
You have heard evidence about both Hafco’s com-
mercial rock dust blower and GMS’ accused rock
dust blower. However, in deciding the issue of in-
fringement, you may not compare GMS’ rock dust
blower to Hafco’s commercial rock dust blower. Ra-
ther, you must only compare GMS’ accused rock
dust blower to the ’684 design patent when making
your decision regarding infringement.
Direct Infringement
To determine infringement, you must compare the
overall appearances of GMS’ accused design to the
design claimed in the Hafco ’684 Patent. If you find
that, by a preponderance of evidence, the overall
appearance of GMS’ accused rock dust blower is
substantially the same as the overall appearance of
Hafco’s claimed design, then you must find that the
accused design infringes the Hafco ’684 design pa-
tent.
Two designs are substantially the same if, in the
eye of an ordinary observer, giving such attention
as a purchaser usually gives, the resemblance be-
tween the two designs is such as to deceive such an
observer, inducing him to purchase one supposing
it to be the other. An ordinary observer is a person
who buys and uses the product at issue. You do not
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8 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR
need, however, to find that any purchasers actually
were deceived or confused by the appearance of the
GMS rock dust blower.
In conducting this analysis, keep in mind that mi-
nor differences between the patented and accused
designs should not prevent a finding of infringe-
ment. In weighing your decision, you should con-
sider any perceived similarities or differences.
When evaluating designs, be it the claimed design,
accused design, or prior art designs, you should al-
ways focus on the overall appearance of the design,
and not individual features.
While these guidelines may be helpful to your anal-
ysis, please keep in mind that the sole test for in-
fringement is whether you believe that the overall
appearance of the accused GMS rock dust blower
design is substantially the same as the overall ap-
pearance of Hafco’s ’684 design patent. If you find
by a preponderance of the evidence that GMS’ ac-
cused rock dust blower is substantially the same as
the ’684 design patent, then you must find that the
accused GMS product infringes the Hafco ’684 de-
sign patent.
Jury instructions, J.A. 484–88. GMS states that the jury
instructions are flawed in two respects: first, that the in-
structions “incompletely and prejudicially abridg[ed] the
Gorham test,” referring to Gorham Co. v. White, 81 U.S.
511, 528 (1871). Dist. Ct. Op. at 19 (quoting GMS’ Motion
for JMOL). Second, GMS states that the jury should have
been instructed “that the hypothetical ordinary purchaser
is to view the patented and accused designs ‘in the context
of the prior art.’” GMS Br. 32.
To challenge a jury instruction, it must be established
that “(1) the district court erred; (2) the error is plain; ‘(3)
the error affects substantial rights; and (4) . . . the error
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HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR 9
seriously affects the fairness, integrity or public reputation
of judicial proceedings.’” United States ex rel. Oberg v. Pa.
Higher Educ. Assistance Agency, 912 F.3d 731, 738 (4th
Cir. 2019) (citing Gregg v. Ham, 678 F.3d 333, 338 (4th Cir.
2012)). Objection to the presence or absence of an
instruction must be timely raised during the trial
proceeding, and the correct instruction offered and
rejected. The Federal Rules of Civil Procedure provide:
Rule 51(d)(1). A party may assign as error: (A) an
error in an instruction actually given, if that party
properly objected; or (B) a failure to give an
instruction, if that party properly requested it
and—unless the court rejected the request in a
definitive ruling on the record—also properly
objected.
See Bunn v. Oldendorff Carriers GmbH & Co. KG, 723 F.3d
454, 468–69 (4th Cir. 2013) (A party “fail[s] to preserve a
challenge to the jury instructions” when it “has provided no
record of an objection to the district court”). The Rules also
provide that a court may consider a plain error in the
instructions that has not been preserved if the error affects
substantial rights. Fed. R. Civ. P. 51(d)(2).
GMS concedes that it “does not contend it made a
proper objection to the district court’s jury instructions at
trial.” GMS Br. 30. However, GMS states that since the
instructions were incorrect in law, GMS is entitled to a new
trial, citing Rule 51(d)(2). The Fourth Circuit explained in
Bunn that “[e]ven if a jury was erroneously instructed,
however, we will not set aside a resulting verdict unless the
erroneous instruction seriously prejudiced the challenging
party’s case.” Bunn, 723 F.3d at 468 (emphasis in original)
(citing Coll. Loan Corp. v. SLM Corp., 396 F.3d 588, 595
(4th Cir. 2005)).
GMS first assigns error to the jury instructions on the
“ordinary observer”:
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10 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR
1. The Ordinary Observer
Infringement of a design patent is determined from the
viewpoint of the ordinary observer, comparing the patented
design with the article’s overall appearance. Gorham, 81
U.S. at 528 (“[I]f, in the eye of an ordinary observer, giving
such attention as a purchaser usually gives, two designs
are substantially the same, if the resemblance is such as to
deceive such an observer, inducing him to purchase one
supposing it to be the other, the first one patented is
infringed by the other.”).
The jury instructions define the ordinary observer as
“a person who buys and uses the product at issue.” J.A.
485. GMS made no objection to this definition. Although
GMS now argues that “GMS’ rights were substantially
affected by the district court’s failure to include a complete
description of the ordinary purchaser,” GMS Br. 33, we are
not directed to any request for such instruction or any
explanation of the purported flaw.
GMS also states that the jury should have been
instructed that “small differences between the
accused and the claimed design” will avoid
infringement. GMS Br. 32–33. Such an instruc-
tion was not requested at the trial. Nor would it
have been correct, for the patented and accused
designs need not be identical in order for design
patent infringement to be found. Braun Inc. v.
Dynamics Corp. of Am., 975 F.2d 815, 820 (Fed.
Cir. 1992). The controlling inquiry is how the
ordinary observer would perceive the article.
OddzOn Prods., Inc. v. Just Toys, Inc., 122 F.3d
1396, 1405 (Fed. Cir. 1997); see also Contessa Food
Prods., Inc. v. Conagra, Inc., 282 F.3d 1370, 1377
(Fed. Cir. 2002) abrogated on other grounds
by Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d
665 (Fed. Cir. 2008) (competing designs can be
substantially similar despite minor differences).
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HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR 11
The jury was correctly instructed that the question is
how the ordinary oberver would view the article as a whole.
See Ethicon Endo-Surgery, Inc. v. Covidien, Inc., 796 F.3d
1312, 1335 (Fed. Cir. 2015) (“Differences [between the
claimed design and accused design] must be evaluated in
the context of the claimed design as a whole, and not in the
context of separate elements in isolation.”); Amini
Innovation Corp. v. Anthony Cal., Inc., 439 F.3d 1365, 1372
(Fed. Cir. 2006) (an element-by-element comparison,
without consideration of the ordinary observer inquiry to
the overall design, is procedural error). GMS has failed to
establish that there was any error in the jury instructions
on the “ordinary observer,” much less plain error
warranting a new trial.
2. Differences From the Prior Art
GMS states that the jury should have been instructed
to “familiarize yourself with each of the prior art designs
that have been brought to your attention,” citing the IPO
Model Design Patent Jury Instructions at 25 (2010). GMS
Br. 35–36. Hafco responds that GMS presented “not . . .
even a scintilla” of prior art to the jury. Hafco Br. 3. GMS
does not state otherwise, arguing only that a 55-gallon
drum is a standard size.
Although GMS states that “[a] properly instructed jury
would have been drawn to the same things an ordinary ob-
server would be drawn to—namely the ‘aspects of the
claimed design that differ from the prior art,’” GMS Br. 18
(citing Egyptian Goddess, 543 F.3d at 676), the record
shows no presentation of prior art, and Hafco states that
GMS “never submitted a jury instruction regarding same.”
Hafco Br. 3. GMS does not state otherwise.
Given that there was no prior art introduced at trial,
no attempt by GMS to introduce the prior art, and no
proposed jury instruction on this issue, the purported
exclusion of this instruction cannot be error. Accordingly,
GMS has not demonstrated that a new trial is warranted.
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12 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR
CONCLUSION
The district court’s judgment is affirmed.
AFFIRMED AND REMANDED
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United States Court of Appeals
for the Federal Circuit
______________________
HAFCO FOUNDRY AND MACHINE COMPANY,
INCORPORATED,
Plaintiff-Appellee
v.
GMS MINE REPAIR AND MAINTENANCE, INC.,
Defendant-Appellant
______________________
2018-1904
______________________
Appeal from the United States District Court for the
Southern District of West Virginia in No. 1:15-cv-16143,
Senior Judge David A. Faber.
______________________
NEWMAN, Circuit Judge, concurring in part, dissenting in
part.
I concur in the court’s decision. I write separately be-
cause I would resolve the matter of damages, for when the
facts are not disputed the jury’s application of incorrect law
is subject to correction by the court, particularly when such
correction implements the jury’s intent. I would accept
Hafco’s proposed remittitur to $110,000, on undisputed ap-
plication of the correct law.
The measure of damages
The jury awarded damages of $123,650, measured by
GMS’s infringing sales. Hafco’s lost profits were $110,000.
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2 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR
These facts were attested at the trial, and are not disputed.
The jury was correctly instructed on the law of patent dam-
ages; the instructions included:
A plaintiff in a design patent case can elect to prove
either actual damages, known as compensatory
damages, or it may elect to prove the amount of
defendant’s profits from the sale of the infringing
product as its measure of recovery. With respect to
actual damages, if you believe GMS infringed the
’684 Patent, Hafco is entitled to receive damages
adequate to compensate it for infringement
beginning on April 20, 2015 to the present. Those
damages can be in the form of lost profits or a
reasonable royalty. The term lost profits means
any and all actual reduction in business profits
Hafco suffered as the result of GMS’ infringement
of the ’684 Patent. . . .
In this case, Hafco seeks to recover lost profits
resulting from GMS’ infringement of the ’684
Patent. If you conclude that Hafco has proved that
it lost profits because of GMS’ infringement, the
lost profits you award should be the amount that
Hafco would have made on any sales that Hafco
lost because of the infringement.
J.A. 487–489. These instructions were not challenged at
trial, and are not challenged on appeal.
The district court agreed with GMS, on post-trial mo-
tion, that the $123,650 jury damages award does not “un-
der any conceivable view of the evidence” represent Hafco’s
lost profits. Hafco Foundry & Mach. Co. v. GMS Mine Re-
pair & Maint., Inc., Civ. No. 1:15 -16143, 2018 WL
1582728, at *8 (S.D. W.Va. Mar. 30, 2018) (“Dist. Ct. Op.”).
All parties agree that the correct standard is Hafco’s lost
profits. The district court remitted the damages to zero,
and offered a new trial on damages. Hafco argues that “any
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HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR 3
remittitur of the damage award should have been to an
amount no less than $110,000.00,” Hafco Br. 1–2.
Jury damages awards, unless clearly unreasonable or
based on error in the jury instructions, are not readily mod-
ified. See Fox v. Gen. Motors Corp., 247 F.3d 169, 180 (4th
Cir. 2001) (“A jury’s award of damages stands unless it is
grossly excessive or shocking to the conscience.”) (quotation
omitted). Hafco offers some theories why the jury could
have measured damages by GMS’ sales, for the jury was
not told that this evidence was irrelevant.
Hafco acknowledges that the jury instructions limited
damages to Hafco’s lost profits. The district court correctly
so observed. However, Hafco suggests that remittitur to
Hafco’s lost profits of $110,000 would be a more reasonable
action than remittitur to zero, for $110,000 reasonably im-
plements the jury’s verdict and intent. See Minks v. Polaris
Indus., Inc., 546 F.3d 1364, 1371 (Fed. Cir. 2008) (“[W]here
a portion of a verdict is for an identifiable amount that is
not permitted by law, the court may simply modify the
jury’s verdict to that extent and enter judgment for the cor-
rect amount.” (quoting Johansen v. Combustion Eng’g, Inc.,
170 F.3d 1320, 1330 (11th Cir. 1999) (citing N.Y., L.E. &
W.R. Co. v. Estill, 147 U.S. 591 (1893)))).
I would simply correct the district court’s judgment,
and remit the damages award to the undisputed amount of
$110,000. A new trial, on undisputed facts, is not needed
to serve the purposes of the jury verdict.
Post-Trial Motions
In view of this expected appeal, the district court de-
nied without prejudice Hafco’s motions for enhanced dam-
ages, attorney fees, and interest. Enhanced damages and
attorney fees now await resolution on remand. However,
Federal Rule of Appellate Procedure 37(b) requires the ap-
pellate tribunal to determine post-judgment interest. See
Tronzo v. Biomet, Inc., 318 F.3d 1378, 1381 (Fed. Cir. 2003)
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4 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR
(“[T]he responsibility and authority for [determining
whether a party to an appeal is entitled to post-judgment
interest] is assigned to the appellate tribunal.”). On the
remittitur that I recommend, this aspect would require our
attention.