Clearwater Systems Corp. v. Evapco, Inc. , 394 F. App'x 699 ( 2010 )

NOTE: This disposition is non-precedential.
United States Court of Appeals
for the Federal Circuit
__________________________
CLEARWATER SYSTEMS CORP.,
Plaintiff-Appellant,
v.
EVAPCO, INC. AND JOHN W. LANE,
Defendants-Appellees,
AND
BULLOCK, LOGAN & ASSOCIATES, INC.,
Defendants-Appellees,
__________________________
2009-1284
__________________________
Appeal from the United States District Court for the
District of Connecticut in Case No. 3:05-CV-507, Judge
Stefan R. Underhill.
__________________________
Decided: August 30, 2010
___________________________
PAUL GRANDINETTI, Levy & Grandinetti, of Washing-
ton, DC, argued for plaintiff-appellant.
ALEXANDER J. HADJIS, Morrison & Foerster LLP, of
Washington, DC, argued for defendants-appellees
CLEARWATER SYSTEMS v. EVAPCO 2
Evapdo, Inc. and John W. Lane. With him on the brief
were BRIAN R. MATSUI, and MATTHEW J. VLISSIDES.
__________________________
Before GAJARSA, MAYER, and CLEVENGER, Circuit Judges.
GAJARSA, Circuit Judge.
This is a patent infringement case that commenced as
a trade secret dispute between two competitors in the
non-chemical water treatment business. Clearwater
Systems Corporation (“Clearwater”) brought an action in
the U.S. District Court for the District of Connecticut
(“district court”) against Evapco, Inc. (“Evapco”), as well
as John W. Lane, a former Clearwater employee who was
hired by Evapco, and Bullock, Logan & Associates (“Bul-
lock”), a marketing consultant that provided marketing
services for Clearwater and Evapco. Clearwater sought
injunctive relief for alleged theft of trade secrets and
other state business law torts. The district court con-
cluded that Clearwater’s allegedly misappropriated
information were not trade secrets under the Connecticut
Uniform Trade Secrets Act and denied Clearwater’s
request for a permanent injunction. Clearwater Sys.
Corp. v. Evapco, Inc., No. 3:05-CV-507, 2005 WL 3543717,
at *14 (D. Conn. July 26, 2005).
Prior to the resolution of the trade secrets claim,
Evapco counterclaimed for a declaratory judgment that its
“Pulse-Pure” product did not infringe two of Clearwater’s
patents, U.S. Patent No. 6,063,267 (“’267 patent”), disclos-
ing an apparatus for non-chemical water treatment, and
U.S. Patent No. 6,641,739 (“’739 patent”), disclosing a
method of non-chemical water treatment. Evapco also
counterclaimed for a declaration of invalidity and/or
unenforceability of the ’267 and ’739 patents. In response,
Clearwater amended its complaint to assert a claim of
3 CLEARWATER SYSTEMS v. EVAPCO
patent infringement against Evapco, alleging that the
Pulse-Pure infringed the ’267 and ’739 patents.
The parties subsequently submitted cross-motions for
summary judgment of literal infringement of the ’267
patent and invalidity of the ’267 and ’739 patents. Af-
ter hearing arguments relating to the motions, the district
court ruled that the ’267 patent is not invalid for anticipa-
tion, but concluded that the ’739 patent is invalid because
it is inherently anticipated by the ’267 patent. Clearwater
Sys., Corp. v. Evapco, Inc., 596 F. Supp. 2d 291, 313
(D. Conn. 2009). Furthermore, the district court ruled
that the Pulse-Pure does not literally infringe the ’267
patent and sua sponte ruled that the Pulse-Pure does not
infringe the ’267 patent under the doctrine of equivalents.
Id. at 302, 308. For the reasons discussed below, we
vacate and remand for proceedings consistent with this
opinion.
BACKGROUND
The ’267 patent discloses an apparatus for purifying
liquids, such as water, crude oil, metal working fluid, or
any other liquid containing undesired microorganisms
and/or dissolved solids, by treating the liquid with elec-
tromagnetic flux. ’267 patent col.1 ll.5-10. The treatment
prevents minerals in the liquid from forming scale on
internal surfaces of pipes or other equipment. Id. at col.1
ll.8–11. The treatment also reduces or eliminates any
living microorganisms contained in the liquid. Id. at col.1
ll.12–14. The treatment is intended to replace purifica-
tion by using chemicals that are added to circulated water
or other liquids. Non-chemical water treatment devices
generating electromagnetic flux were well known in the
prior art, but unlike the claimed inventions, they pro-
duced electromagnetic flux that was “weak” and of “small
effectiveness.” Id. at col.1 ll. 28–53. The claimed inven-
CLEARWATER SYSTEMS v. EVAPCO 4
tion produces a stronger electromagnetic flux thereby
achieving better and more effective operational results.
Id. at col.1 ll.54–63.
The disclosed device claims to generate a stronger
electromagnetic flux, an improvement over the prior art,
by producing successive periods of ringing flux. Id.The ringing flux is produced by alternating the electrical
power between a set of half cycles of positive voltage and
a set of half cycles of negative voltage created by switch-
ing these cycles at an optimum time. Id. at col.1 l.66–
col.2 l.16. Unlike the prior art diode devices, which
interrupt the current flow at the very end of a supply
voltage half-cycle (i.e., near zero current), the claimed
invention interrupts the current flow to the induction
coils at any point along the supply voltage waveform. Id.According to the written description, interruption of the
current flow to the induction coils when the amplitude of
the current is relatively high, as opposed to interruption
at near zero amplitude, results in a stronger electromag-
netic flux. Id. The operation of the claimed system is
shown in Figure 6 from the ’267 patent, where the gated
switch is controlled to open and stop the current from
flowing into the coils well in advance of the coil current
returning to zero. Id. at Fig. 6; see also id. at col.5 l.49–
col.6 l.9. In contrast to a prior art diode, the circuit opens
and the current is stopped shortly after the coil current
returns to zero amplitude.
5 CLEARWATER SYSTEMS v. EVAPCO
The claimed invention uses a gated component, or a
“switch,” such as a triode or other transistor, which is
activated at an optimum point to generate a more power-
ful electromagnetic flux. Id. at col.4 ll.9–55. The switch
can be selectively turned on and off to interrupt the
current flowing to the induction coils anywhere along the
supply voltage waveform. Id. Additional circuitry is
required to toggle the switch on and off at the appropriate
time. Id. The circuitry operates in conjunction with the
“switch” to conduct and then interrupt the current flow to
the coils. Id. Figure 5 in the ’267 patent shows a depic-
tion of the circuitry that operates in conjunction with the
“switch,” labeled 82 below. Id. at col.4 ll.36–42.
CLEARWATER SYSTEMS v. EVAPCO 6
In this action, Clearwater asserts infringement of a
single claim, claim 21 of the ’267 patent. The relevant
language of claim 21 is reproduced below.
An apparatus for treating flowing liquid
with electromagnetic flux and to be pow-
ered by a source of alternating current
electrical power wherein a set of half cy-
cles of positive voltage alternate with a set
of half cycles of negative voltage, said ap-
paratus comprising:
a pipe for conducting a flow of liquid, a
plurality of electrical coils surrounding
said pipe, means providing a given capaci-
tance, a switch having a first and second
terminals having open and closed condi-
tions relative to one another, connecting
means for connecting said coils, given ca-
pacitance and switch to one another and
to said power source such that during each
7 CLEARWATER SYSTEMS v. EVAPCO
half cycle of at least one of said two sets of
half cycles. . . .
Id. at col.9 l.20–col.10 l.4 (emphases added to disputed
claim terms).
In comparison to the ’267 patent, the ’739 patent dis-
closes a method for non-chemical treatment and purifica-
tion of liquids with repeated bursts of electromagnetic
flux to produce a stabilized oxidizing agent. ’739 patent
col.1 ll.8–12. The claimed method may be used for any
liquid, but is particularly suited for purifying water that
contains undesired bacteria and/or other microorganisms.
Id. at col.1 ll.12–16. The claimed method exposes liquid
to successive bursts of ringing magnetic flux for a period
sufficient to form a stabilized oxidizing agent. Id. at col. 8
ll.56–64. The stabilized oxidizing agent reacts with the
microorganisms by oxidizing components of the cell struc-
ture to either quickly kill the microorganisms or to cause
a major sub-lethal injury that reduces the microorganism
population. Id. at col.2 ll.5–10. Claims 1 through 9 of the
’739 patent require that the stabilized oxidizing agent be
produced in “a concentration sufficient to have a biocidal
effect” on the microorganisms in the liquid. Id. at col.8
ll.56–64. Representative claim 1 of the ’739 patent is
reproduced below.
A method of making an oxidizing agent
comprising the steps of:
providing a magnetic field in the form
of successive bursts of ringing magnetic
flux; and
exposing a liquid to the bursts of mag-
netic flux for a period sufficient to form a
stabilized oxidizing agent in a concentra-
tion sufficient to have a biocidal effect on
microorganisms in the liquid.
CLEARWATER SYSTEMS v. EVAPCO 8
The accused infringing device in this action is
Evapco’s Pulse-Pure product. The Pulse-Pure is a water
treatment system for controlling bacterial growth in
recirculated water and preventing the formation of min-
eral scale. The Pulse-Pure performs the water treatment
by generating short, high-frequency bursts of electromag-
netic fields. The Pulse-Purse device consists of two dis-
tinct coil configurations. The first configuration is
referred to as the “low frequency” coils. The second
configuration is referred to as the “high frequency” coils.
The low frequency coils are comprised of four individual
coils; the two outer coils are connected and the two inner
coils are connected. Each pair of the low frequency coils is
connected to a separate diode and capacitor. The low
frequency coils use diodes to interrupt the current to its
coils during each alternating cycle. However, the high
frequency coils, comprising of two individual coils, are
powered by a source that generates a high frequency
signal to those coils. The duration of the high frequency
fields can be controlled by applying and selectively inter-
rupting the current input. The high frequency coils
generate magnetic flux lasting a longer period of time,
thus exposing the water to a higher degree of high fre-
quency flux. While the high frequency flux created by the
prior art devices lasted less than one minute per hour, the
flux generated by the Pulse-Pure high frequency coils can
be operated to continue treating the water for approxi-
mately twenty minutes per hour.
On July 1, 2008, the parties filed cross-motions for
summary judgment of non-infringement of the ’267 patent
and invalidity of the ’267 and ’739 patents. After oral
argument on the motions, the district court ruled that the
’267 patent is not invalid for anticipation by the asserted
prior art. Clearwater Sys., 596 F. Supp. 2d at 308-09.
However, the district court ruled that the method of the
9 CLEARWATER SYSTEMS v. EVAPCO
’739 patent is inherently anticipated by the disclosure of
the ’267 patent. Clearwater Sys., 596 F. Supp. 2d at 313.
The district court also ruled that the Pulse-Pure does not
meet the “power source,” “connecting means,” or “switch”
limitations and, therefore, does not literally infringe the
’267 patent. Id. at 302. Although the parties did not file
motions relating to infringement under the doctrine of
equivalents, the district court sua sponte ruled that the
Pulse-Pure does not infringe the ’267 patent under the
doctrine of equivalents. Id. at 308. Clearwater appeals
the district court’s rulings of invalidity of the ’739 patent
and non-infringement of claim 21 of the ’267 patent.
We have jurisdiction to review the district court’s final
decision pursuant to 28 U.S.C. § 1295(a).
DISCUSSION
We review the district court’s summary judgment rul-
ing de novo. Ethicon Endo-Surgery, lnc. v. U.S. Surgical
Corp., 149 F.3d 1309, 1315 (Fed. Cir. 1998). Summary
judgment is appropriate only when there are no genuine
issues of material fact and the moving party is entitled to
judgment as a matter of law. See Fed. R. Civ. P. 56(c).
This court has stated that “[i]n determining whether
there is a genuine issue of material fact, the evidence
must be viewed in the light most favorable to the party
opposing the motion, with doubts resolved in favor of the
opponent.” Ethicon, 149 F.3d at 1315. When a motion for
summary judgment is properly supported by documentary
and testimonial evidence, however, the nonmoving party
may not rest upon mere allegations or denials of his
pleadings, but rather must present significant probative
evidence to establish a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).
CLEARWATER SYSTEMS v. EVAPCO 10
I.
We begin with the district court’s summary judgment
ruling that the ’739 patent is invalid. In moving for
summary judgment, Evapco argued that the ’739 patent
claims methods that are inherently anticipated by several
prior art references. The alleged anticipatory references
are the ’267 patent, several prior art devices that practice
the ’267 patent, and an article published by Dr. Dennis
Opheim, one of the inventors of the ’739 patent. 1 The
district court ruled that both the dependent and inde-
pendent claims of the ’739 patent are inherently antici-
pated by the ’267 patent. Clearwater Sys., 596 F. Supp.
2d at 313. The district court relied on the written descrip-
tion of the ’739 patent, which contains a description of the
invention of the ’267 patent and compared that descrip-
tion to the claims of the ’739 patent. Specifically, the
district court concluded that “[t]he text of the ’739
[p]atent specification makes clear that inherent in the
’267 [p]atent, when practiced, is the method and results
claimed in the ’739 [p]atent.” Id. (alterations added). The
district court did not address either the prior art devices
or Dr. Opheim’s article in its ruling.
On appeal, Clearwater argues that the district court
conducted an erroneous inherent anticipation analysis by
failing to properly compare the ’739 patent with the
asserted prior art. We agree. An anticipation analysis
“requires that a prior art reference disclose every limita-
tion of the claimed invention, either explicitly or inher-
ently.” Liebel-Flarsheim Co. v. Medrad, Inc., 481 F.3d
1 Dr. Opheim’s article is entitled “The Effect of
Pulse-Power Technology on the Microbial Content and
Biofilm Formation in Evaporative Cooling Towers” and
was presented at the May 2000 Annual General Meeting
of the American Society of Microbiology.
11 CLEARWATER SYSTEMS v. EVAPCO
1371, 1381 (Fed. Cir. 2007). Thus, a proper anticipation
analysis requires a comparison of the claims of the alleg-
edly invalid patent to the disclosure of the prior art.
In this case, the district court performed an erroneous
anticipation analysis. Specifically, the district court erred
in comparing the claim language of the ’739 patent with
the description of the ’267 patent contained in the written
description of the ’739 patent. This comparison is errone-
ously premised; the correct comparison is the actual claim
language in both patents, not how the later patent de-
scribes the earlier patent. In other words, the district
court erroneously found the ’739 patent was anticipated
by its own written description. Thus, we remand for a
proper claim-by-claim analysis between the allegedly
anticipated claims and the prior art reference.
The district court also erred in ruling that the dependent
claims of the ’739 patent are inherently anticipated by the
’267 patent. The district court invalidated the dependent
claims in a single footnote, stating:
Because the dependent claims of the ’739
patent are narrower than the independent
claims on which they depend, they cannot
be valid if the independent claims - claims
1, 10 and 16 - are invalid. Accordingly,
this discussion is limited to the independ-
ent claims of the ’739 patent.
Clearwater Sys., 596 F. Supp. 2d at 310 n.5 (emphasis
added). This is clear error. The law is premised on the
basis that “each claim of a patent is ‘presumed valid
independently of . . . the other claims’ and ‘dependent . . .
claims shall be presumed valid even though dependent
upon an invalid claim.’” Apple Computer, Inc. v. Articu-
late Sys., Inc., 234 F.3d 14, 24 (Fed. Cir. 2000) (citing
35 U.S.C. § 282). The district court failed to independ-
CLEARWATER SYSTEMS v. EVAPCO 12
ently analyze the dependent claims to determine whether
they are anticipated by the ’267 patent. Accordingly, we
vacate the judgment of inherent anticipation for all claims
of the ’739 patent and remand for proceedings consistent
with this opinion.
II.
Next, we review the district court’s summary judg-
ment ruling of non-infringement. The district court
concluded that the Pulse-Pure does not literally infringe
the ’267 patent as a matter of law. Specifically, the
district court concluded that there were no issues of
material fact relating to literal infringement of the follow-
ing three claim terms in the ’267 patent: (1) “said power
source,” (2) “connecting means,” and (3) “switch.” Clear-
water Sys., 596 F. Supp. 2d at 302-06. For the reasons
discussed below, the district court erred in granting
summary judgment of non-infringement.
Clearwater asserted infringement of claim 21 of the
’267 patent. The relevant claim language of claim 21 is
reproduced below.
An apparatus for treating flowing liquid
with electromagnetic flux and to be pow-
ered by a source of alternating current
electrical power wherein a set of half cy-
cles of positive voltage alternate with a set
of half cycles of negative voltage, said ap-
paratus comprising:
a pipe . . ., a plurality of electrical coils
. . ., a means for providing capacitance. . . ,
a switch . . ., [and] connecting means for
connecting said coils, given capacitance
and switch to one another and to said
power source such that during each half
13 CLEARWATER SYSTEMS v. EVAPCO
cycle of at least one of said two sets of half
cycles . . . .
’267 patent col.9 l.20–col.10 l.4 (emphases added to dis-
puted claim terms).
On appeal, Clearwater argues that the district court
erred in its claim construction when it improperly im-
ported unclaimed functions into the disputed claim limi-
tations. We agree. The district court determined that the
“power source” in the body of claim 21 referred to the
same power source as in the preamble of the claim; i.e.,
the “powered by a source” limitation. Clearwater Sys.,
596 F. Supp. 2d at 301. Based on the preamble language,
the district court concluded that claim 21 required that
the “power source” directly power the entire apparatus.
Id. Clearwater argued that the “power source” could
mean any type of power source anywhere in the appara-
tus—including a power source found within the apparatus
that powers only a portion of the apparatus, such as the
coils. The district court rejected this claim interpretation
and concluded that “said power source” must power the
entire apparatus. Clearwater Sys., 596 F. Supp. 2d at 301.
This ruling is erroneous because it imported an extrane-
ous limitation into the claim.
While the district court was correct that the preamble
is limiting because it is necessary to provide context to the
claim, see Pitney Bowes, Inc. v. Hewlett-Packard Co., 182
F.3d 1298, 1305 (Fed. Cir. 1999), it was incorrect in
concluding that the “power source” must power the entire
apparatus. There is no limiting language in the claims,
written description, or prosecution history requiring that
the “power source” power the entire apparatus. Accord-
ingly, the district court improperly imported an extrane-
ous limitation into the claim. E.I. du Pont de Nemours &
Co. v. Philips Petroleum, 849 F.2d 1430, 1433 (Fed. Cir.
CLEARWATER SYSTEMS v. EVAPCO 14
1998); Comark Commc’ns, Inc. v. Harris Corp., 156 F.3d
1182, 1186 (Fed. Cir. 1998).
Clearwater’s expert, Dr. Horenstein, explained that
the “apparatus” of the preamble can refer to either the
high or low frequency circuits alone and that the “power
source” may power either of these components:
I do not believe that the requisite antece-
dent power source described in Claim 21
must be derived from a wall socket. This
opinion stems, in part, from the fact that
the “apparatus” claimed can be under-
stood to refer to the high-frequency circuit
alone, or the low-frequency circuit alone,
considered as separate entities. Nothing
in the patent precludes this understand-
ing. . . .
We agree. The term “apparatus” may be understood as
the high frequency circuit, and there is evidence on the
record creating a material issue of fact regarding its
power source. The Pulse-Pure contains an integrated
circuit, the L293B, which is the power source for the high
frequency coils, which is in turn powered by a 60 Hz
alternating current. This evidence creates a genuine
issue of material fact regarding the “power source” limita-
tion. Thus, the district court improperly granted sum-
mary judgment based on the “power source” limitation.
Next, we review the district court’s non-infringement
ruling based on the term “connecting means.” The district
court construed the term “connecting means” as follows:
means for connecting (1) electrical coils
(surrounding a pipe for conducting a flow
of liquid), (2) capacitance, and (3) a switch
to each other, and to (4) a source of alter-
15 CLEARWATER SYSTEMS v. EVAPCO
nating electrical power (wherein a set of
half cycles of positive voltage alternate
with a set of half cycles of negative volt-
age), in a manner that performs the func-
tions described following each use of ‘such
that’ in column 10 of the ’267 patent.
In its summary judgment ruling, the district court ex-
plained that the term “said power source” of the “connect-
ing means” requires that the current flow from “said
power source” to the coils during every positive or every
negative half cycle of an alternating current cycle. The
district court found that Clearwater failed to introduce
evidence creating an issue of fact regarding whether the
power source in the Pulse-Pure produces a current every
positive or every negative half cycle. Clearwater Sys.,
596 F. Supp. 2d at 301-02. The district court explained:
Clearwater cites to its expert’s report,
which identifies the Pulse-Pure’s signal
generator (the L293B) as a switch and in-
dicates that the L293B produces current
that flows during at least each 16.7 micro-
second half period of the L293B current
cycle. Clearwater’s argument fails be-
cause the L293B does not meet the limita-
tion of the power source that claim 21
describes . . . .The claimed power source
cannot be infringed, by the L293B signal
generator chip, which (even if it otherwise
meets the limitations of claim 21) does not
power the entire Pulse-Pure device.
Id. at 301. However, Clearwater introduced evidence
creating a genuine dispute of material fact, based on Dr.
Horenstein’s testimony as to whether the L293B produces
a current that flows through the coils during at least a
CLEARWATER SYSTEMS v. EVAPCO 16
portion of said half cycle, as required by claim 21. The
district court improperly dismissed Dr. Horenstein’s
testimony based on its erroneous finding that the L293B
cannot be the “power source” because it does not power
the entire device. As explained above, the patent does not
require the “power source” to power the entire device.
Accordingly, the district court improperly granted sum-
mary judgment of non-infringement based on the “con-
necting means” limitation.
Next, we turn to the district court’s non-infringement
ruling based on the claim term “switch.” The district
court construed the term “switch” according to the parties’
stipulated construction, which is reproduced below.
An electrical component that includes a
control terminal and at least two addi-
tional terminals that pass current through
the component. Current is either permit-
ted to flow or prevented from flowing
through the additional terminals when
different voltage levels are applied to the
control terminal.
The district court concluded that the low-frequency
coils have no “connecting means” because there are no
structures in the circuit connected to a “switch” that meet
the functional limitations of claim 21. Clearwater Sys.,
596 F. Supp. 2d at 306. However, the district court erred
in finding that the Pulse-Pure does not contain a “switch”
limitation as a matter of law because the record contains
material issues of fact regarding whether the Pulse-Pure
contains a “switch.”
The district court found that there are no structural
components in the Pulse-Pure that “when connected,
enable a switch to open and close, controlling and inter-
rupting the flow of current to the device and creating
17 CLEARWATER SYSTEMS v. EVAPCO
ringing magnetic flux . . . .” Id. As support for its conclu-
sion, the district court cited to a statement from Clearwa-
ter that the Pulse-Pure employs diodes to interrupt
current to the coils, believing that this fact rules out the
use of a “switch.” Id. (citing Clearwater Rule 56(e)(2)
statement at ¶ 70). However, the use of diodes in the
Pulse-Pure does not exclude the possibility of an addi-
tional component functioning as a “switch” somewhere
else in the circuit. Clearwater introduced evidence relat-
ing to several components in the circuit—the K3 switch,
the ULN2003AN, and the L293B integrated circuit—that
function as a “switch” under the district court’s construc-
tion. For instance, Dr. Horenstein explained that the
Pulse-Pure contains the L293B component that functions
as a “switch”:
The Pulse-Pure contains another switch as
defined by Evapco’s proposed construction.
This switch is located inside the SGS-
Thompson L293B integrated circuit (IC) . .
. . This component is used to drive current
through coils #5 and #6 via connection
points X4-2 and X4-1. The L293B IC is
one chip in a family of push-pull channel
drivers used as power switches . . . . This
driver meets the definition of a switch as
proposed by Evapco.
In light of this evidence creating a genuine issue of mate-
rial fact regarding the “switch” limitation, the district
court erred in granting summary judgment. Thus, we
vacate the non-infringement ruling and remand to the
district court.
Finally, we review the district court’s sua sponte rul-
ing of non-infringement under the doctrine of equivalents.
The district court concluded that the Pulse-Pure does not
CLEARWATER SYSTEMS v. EVAPCO 18
infringe claim 21 of the ’267 patent, finding that the
accused device does not perform “substantially the same
functions as those claimed in claim 21.” Clearwater Sys.,
596 F. Supp. 2d at 308. The district court based its ruling
on its erroneous finding that the Pulse-Pure’s L293B
component cannot satisfy the power source limitation
because it does not power the entire device. Id.As explained above, this finding regarding the power
source limitation is error. Thus, we also vacate the dis-
trict court’s ruling of non-infringement under the doctrine
of equivalents and remand.
CONCLUSION
For the foregoing reasons, we vacate and remand for
proceedings consistent with this opinion.
VACATED and REMANDED