Lazare Kaplan International, Inc. v. Photoscribe Technologies, Inc .

United States Court of Appeals
for the Federal Circuit
__________________________
LAZARE KAPLAN INTERNATIONAL, INC.,
Plaintiff-Appellant,
v.
PHOTOSCRIBE TECHNOLOGIES, INC.
AND DAVID BENDERLY,
Defendants-Appellees,
AND
GEMOLOGICAL INSTITUTE OF AMERICA,
Defendant-Appellee.
__________________________
2009-1251
__________________________
Appeal from the United States District Court for the
Southern District of New York in 06-CV-4005, Senior
Judge Thomas P. Griesa.
__________________________
Decided: December 22, 2010
__________________________
LAZARE KAPLAN v. PHOTOSCRIBE TECH 2
DEANNE E. MAYNARD, Morrison & Foerster LLP, of
Washington, DC, argued for plaintiff-appellant. With her
on the brief were HAROLD J. MCELHINNY, Morrison &
Foerster LLP, of San Francisco, California, CYNTHIA
LOPEZ BEVERAGE, Morrison & Foerster LLP, of Washing-
ton, DC.
IRA J. SCHAEFER, Hogan & Lovells US LLP, of New
York, New York, argued for defendants-appellees, Photo-
scribe Technologies, Inc., et al.
JOHN ALLCOCK, DLA Piper LLP (US), of San Diego,
California, argued for defendant-appellee, Gemological
Institute of America. With him on the brief were WILLIAM
G. GOLDMAN, and STANLEY J. PANIKOWSKI.
__________________________
Before LOURIE, FRIEDMAN, and LINN, Circuit Judges.
LINN, Circuit Judge.
After jury and bench trials, the United States District
Court for the Southern District of New York entered a
final judgment against Lazare Kaplan International, Inc.
(“Lazare”) in favor of Gemological Institute of America
(“the Institute”); Photoscribe Technologies, Inc. (“Photo-
scribe”); and Photoscribe’s founder and president, David
Benderly (collectively, “the Defendants”) decreeing the
following: (1) the Defendants had not infringed the as-
serted claims of United States Patents No. 6,476,351 (“the
’351 Patent”) and No. 7,010,938 (“the ’938 Patent”) and
claim 18 of the ’351 Patent is invalid; (2) the ’351 and ’938
patents are unenforceable due to inequitable conduct; (3)
the case is exceptional under 35 U.S.C. § 285; and (4) the
Defendants are entitled to their reasonable attorneys’
3 LAZARE KAPLAN v. PHOTOSCRIBE TECH
fees. Lazare Kaplan Int’l, Inc. v. Photoscribe Techs., Inc.,
No. 06-CV-4005 (TPG) (S.D.N.Y. Jan. 22, 2009). The
district court denied Lazare’s motions for judgment as a
matter of law and for new trials, and Lazare appealed.
For the reasons discussed below, this court affirms-in-
part, vacates-in-part, and remands for further proceed-
ings consistent with this opinion.
I. BACKGROUND
Lazare is the owner of the ’351 and ’938 patents, enti-
tled “Laser Marking System” and “Microinscribed Gem-
stone,” respectively. The ’351 Patent discloses a system
that uses a fixed laser to create a series of microscopic
spots on the surface of gemstones such as diamonds.
Together these spots form a “microinscription” that is
visible with the aid of a jeweler’s loupe and can be used to
authenticate and track gemstones. In addition to a laser,
the disclosed system includes a movable “stage” that
positions a gemstone (also referred to as a “workpiece”) to
be inscribed, an optical system that focuses energy from
the laser onto the gemstone, and a computer system for
control. The system also typically includes two or more
video cameras mounted at right angles to each other that
provide images of the gemstone to a computer display
throughout the inscription process. The laser, stage, and
optical system are rigidly mounted on a common frame to
reduce the effect of vibration on the system. FIG. 9 of the
’351 Patent illustrates a preferred embodiment of the
system:
LAZARE KAPLAN v. PHOTOSCRIBE TECH 4
As is relevant here, the ’351 Patent claims a microin-
scribing system that has a “rigid frame” supporting the
laser, stage, and optical system “in fixed relation, to resist
differential movements” and to “increase immunity to
vibrational misalignments.” The patent also claims a
method of microinscribing that includes “controlling the
directing” of laser energy based on marking instructions
and imaging.
The ’938 Patent is a descendant of the ’351 Patent
that has a largely similar specification. As its title sug-
gests, the ’938 Patent claims microinscribed gemstones
that have specified characteristics. In particular, the
patent claims gemstones with laser generated spots, the
“positional accuracy” of which is “within about ±1 micron”
and the “positional repeatability” of which is “within
about 1.0 micron.” The patent also claims ranges of
depths and widths of each spot on a gemstone, the depths
being “less than about 10 microns” and widths being
either “less than about 9 microns” or “less than about 12
microns.”
5 LAZARE KAPLAN v. PHOTOSCRIBE TECH
Lazare also owns United States Patent No. 4,392,476
(referred to as “the Gresser Patent” after co-inventor
Herbert Gresser), entitled “Method and Apparatus for
Placing Identifying Indicia on the Surface of Precious
Stones Including Diamonds.” The patent, which is prior
art to both the ’351 and ’938 patents, discloses a system
for inscribing gemstones that includes a “laser beam
generation system,” an “optical system,” and a “table
system.” Gresser Patent col.2 ll.13-68. Herbert Gresser
and his company, Group II Manufacturing Ltd. (“Group
II”), developed a commercial embodiment of the disclosed
system for Lazare in the 1980’s that the parties refer to as
the “Gresser machine.” According to a contract concern-
ing the development of the Gresser machine, the machine
was to include “a rigid base to support a laser, scanner
optics, and object fixture with adequate protective covers.”
To prevent vibrations from causing errors during the
inscription process, the machine rested on a cushion of
compressed air produced by a set of pneumatic legs posi-
tioned underneath the machine. The ’351 Patent makes
passing reference to both the Gresser Patent and the
Gresser machine. Neither the ’351 Patent nor the Gresser
Patent, however, explicitly discloses that the Gresser
machine included the rigid base mentioned above.
Lazare initiated the underlying action against the De-
fendants, claiming that the Defendants infringed various
claims of both the ’351 and ’938 patents, including claims
1, 7, and 18 of the ’351 Patent and claims 1, 24, 62, and 70
of the ’938 Patent. Lazare asserted, among other things,
that Photoscribe, acting under the exclusive control of
David Benderly, manufactured infringing inscription
machines and sold them to the Institute, which in turn
used the machines to produce infringing diamonds. The
Defendants denied the allegations and argued that the
LAZARE KAPLAN v. PHOTOSCRIBE TECH 6
asserted claims are invalid and that both patents are
unenforceable due to inequitable conduct.
Before trial, the parties agreed upon the meaning of
the “positional accuracy” and “positional repeatability”
limitations, but disputed the meanings of the “controlling
the directing” and “rigid frame” limitations. After con-
struing the disputed limitations at a hearing pursuant to
Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed.
Cir. 1995) (en banc), the district court determined that
under its construction of “controlling the directing” claims
1 and 7 of the ’351 Patent were not literally infringed and
granted summary judgment of no literal infringement of
these claims in favor of the Defendants. Lazare Kaplan
Int’l, Inc. v. Photoscribe Techs., Inc., No. 06-CV-4005
(TPG), 2008 WL 355605, at *1 (S.D.N.Y. Feb. 5, 2008)
(“Summary Judgment Order”). The court, however,
permitted Lazare to argue at trial that these claims were
infringed under the doctrine of equivalents. Id.After a two-week jury trial, the jury found that the
Defendants had not infringed any of the asserted claims.
The jury also found that the Defendants had proven by
clear and convincing evidence that claim 18 of the ’351
Patent is invalid. In a subsequent bench trial on inequi-
table conduct, the district court concluded that Lazare
had committed inequitable conduct with respect to the
’351 Patent by failing to adequately disclose the structure
of the Gresser machine to the United States Patent and
Trademark Office (“PTO”). The court found that Lazare
had also engaged in inequitable conduct with respect to
the ’938 Patent because Lazare did not submit to the PTO
a declaration Lazare created that demonstrated that the
Gresser machine could produce inscriptions with line
widths and depths falling within the ranges recited in the
claims. Based on its inequitable conduct findings, the
7 LAZARE KAPLAN v. PHOTOSCRIBE TECH
court held that the case was exceptional under 35 U.S.C.
§ 285 and awarded the Defendants over $6 million in
attorneys’ fees. Lazare made separate motions for judg-
ment as a matter of law and for new trials, which the
district court denied. Lazare Kaplan Int’l, Inc. v. Photo-
scribe Techs., Inc., No. 06-CV-4005 (TPG), 2009 WL
1383655 (S.D.N.Y. May 18, 2009). Lazare timely ap-
pealed, and we have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(1).
II. DISCUSSION
On appeal, Lazare challenges the denial of its post-
trial motions on a number of grounds. Lazare first con-
tends that the district court incorrectly construed the
“controlling the directing” limitation in claims 1 and 7 of
the ’351 Patent, arguing that under the correct construc-
tion of the limitation the accused devices infringe these
claims. Next, Lazare asserts that the district court pro-
vided the jury with flawed instructions regarding the
construction of the “rigid frame” element in claim 18 of
the ’351 Patent and that ample evidence supported in-
fringement. Lazare also contends that testimony assert-
ing that claim 18 is invalid was not sufficiently
corroborated. Regarding claims 1 and 24 of the ’938
Patent, Lazare argues that the district court failed to
construe the recited “positional accuracy” limitation and
that under the correct construction of the limitation no
reasonable jury could have found that these claims were
not infringed. Lazare makes a similar assertion with
respect to claims 62 and 70 of the ’938 Patent, contending
that no reasonable jury could have found that these
claims are not infringed because uncontroverted evidence
showed that the recited “positional repeatability” limita-
tion is satisfied. Finally, Lazare argues that the court
improperly concluded that the ’351 and ’938 patents are
LAZARE KAPLAN v. PHOTOSCRIBE TECH 8
unenforceable due to inequitable conduct and exacerbated
this error by determining that the case was exceptional
and awarding the Defendants their attorneys’ fees. We
address each of these contentions in turn.
Because the denial of a motion for judgment as a mat-
ter of law or for a new trial is a procedural issue not
unique to patent law, this court reviews such denials
under the law of the regional circuit where the appeal
from the district court would normally lie, in this case, the
Second Circuit. Riverwood Int’l Corp. v. R.A. Jones & Co.,
Inc., 324 F.3d 1346, 1352 (Fed. Cir. 2003). The Second
Circuit reviews for abuse of discretion the denial of a
motion for new trial. SEC v. DiBella, 587 F.3d 553, 563
(2d Cir. 2009). “A motion for a new trial ordinarily should
not be granted unless the trial court is convinced that the
jury has reached a seriously erroneous result or that the
verdict is a miscarriage of justice.” Armstrong v. Brook-
dale Univ. Hosp. & Med. Ctr., 425 F.3d 126, 133 (2d Cir.
2005). The Second Circuit reviews de novo the denial of a
motion for judgment as a matter of law, “applying the
same standards that guided the district court's considera-
tion of the issue.” Nimely v. City of New York, 414 F.3d
381, 391 (2d Cir. 2005). The Second Circuit will grant a
motion for judgment as a matter of law “only if ‘a reason-
able jury would not have a legally sufficient evidentiary
basis to find for the [non-movant] on that issue.’” Cam-
eron v. City of New York, 598 F.3d 50, 59 (2d Cir. 2010)
(alteration in original) (citation omitted).
A. “Controlling the Directing”
Claim 1 of the ’351 Patent recites a method of micro-
inscribing a gemstone involving controlling the directing
of focused laser energy based on marking instructions and
imaging:
9 LAZARE KAPLAN v. PHOTOSCRIBE TECH
1. A method of microinscribing a gemstone with
laser energy from a pulse laser energy source, fo-
cused by an optical system on the workpiece, com-
prising the steps of: mounting a gemstone in a
mounting system; directing the focused laser en-
ergy onto a desired portion of the gemstone; imag-
ing the gemstone from at least one vantage point;
receiving marking instructions as at least one in-
put; and controlling the directing of the focused la-
ser energy based on the marking instructions and
the imaging, to selectively generate a marking on
the gemstone based on the instructions.
’351 Patent col.26 ll.53-65 (emphasis added). Claim 7 of
the ’351 Patent is a corresponding system claim that
includes a similar limitation. See id. col.27 ll.17-35. The
district court construed “controlling the directing” to
mean “controlling is based on the marking instructions
generated by the operator of the machine, and automatic
feedback derived from optical images of the gemstone
during the laser burn process.” Summary Judgment
Order at *1. The court found that this construction
followed from the plain meaning of the limitation and
concluded that two passages from the specification of the
’351 Patent support this construction. First, the court
noted that the specification discloses using optical feed-
back “to adjust workpiece positioning as well as inscrip-
tion speed, number, intensity and/or rate of pulses at a
given location, as well as to verify progress of the marking
process.” ’351 Patent col.3 ll.1-6. The court observed that
this description “does not talk about those operations
being done by a human operator” and interpreted the
description as “plainly talk[ing] about some adjustment
being accomplished as a result of the image and that
image being conveyed to the computer.” Markman Hr’g
Tr. vol. 3, 413, Oct. 25, 2007. Second, the court found that
LAZARE KAPLAN v. PHOTOSCRIBE TECH 10
the following description of a portion of the laser energy
microinscribing system reinforced the court’s construc-
tion: “input for receiving marking instructions; a proces-
sor for controlling said directing means based on said
marking instructions and information received from said
imaging system.” ’351 Patent col.13 ll.56-59.
Lazare argues that the district court erroneously
construed “controlling the directing . . . based on . . . the
imaging” to require automatic feedback derived from
optical images of a gemstone during the laser burn proc-
ess. Lazare asserts that the claims do not specify what
“control[s] the directing . . . based on . . . the imaging” or
when this type of control occurs. Lazare contends that
the specification makes clear that “controlling the direct-
ing . . . based on . . . the imaging” encompasses control
based on both automated and manual feedback that
occurs either before or during the laser burn process.
Lazare believes that under the proper construction of the
claim it is entitled to judgment as a matter of law that the
accused devices infringe claim 1 of the ’351 Patent.
Alternatively, Lazare requests a new trial on both literal
infringement and infringement under the doctrine of
equivalents.
In response, the Defendants contend that as a matter
of common sense and grammar “controlling the directing .
. . to selectively generate a marking on the gemstone”
necessarily occurs during the laser burn process. Because
the claimed “controlling” must occur during this process,
the Defendants assert that “controlling the directing . . .
based on . . . the imaging” must be construed to require
automated feedback based on an image during the laser
burn process, as they contend that only automated control
is possible while the laser is marking a gemstone. The
Defendants argue that this construction is consistent with
the specification and that statements made during prose-
cution of the ’351 Patent also suggest that the disputed
11 LAZARE KAPLAN v. PHOTOSCRIBE TECH
limitation should be limited to automatic control during
the laser burn process. This court agrees with Lazare.
This court reviews the district court’s claim construc-
tion de novo. Cybor Corp. v. Fas Techs., Inc., 138 F.3d
1448, 1456 (Fed. Cir. 1998) (en banc). Claim language is
generally given its “ordinary and customary meaning,”
that is, “the meaning that the [language] would have to a
person of ordinary skill in the art in question at the time
of the invention.” Phillips v. AWH Corp., 415 F.3d 1303,
1312-13 (Fed. Cir. 2005) (en banc). When determining the
meaning of disputed claim language, courts consider
“those sources available to the public that show what a
person of skill in the art would have understood [the]
disputed claim language to mean.” Id. at 1314 (quoting
Innova/Pure Water, Inc. v. Safari Water Filtration Sys.,
Inc., 381 F.3d 1111, 1116 (Fed. Cir. 2004)). Such sources
include “the words of the claims themselves, the remain-
der of the specification, the prosecution history, and
extrinsic evidence concerning relevant scientific princi-
ples, the meaning of technical terms, and the state of the
art.” Id. (quoting Innova, 381 F.3d at 1116). Because the
parties do not rely on extrinsic evidence, we confine our
analysis to the claims, the specification, and the prosecu-
tion history.
1. The Claim Language
This court begins with the claims, as they usually give
“substantial guidance as to the meaning of particular
claim terms.” Id. (citing Vitronics Corp. v. Conceptronic,
Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996)). Contrary to the
Defendants’ contentions, the language of the claims does
not compel the construction of “controlling the directing”
adopted by the district court. The claims are silent re-
garding when the imaging that the “controlling the direct-
ing” is in part based upon takes place or who or what
LAZARE KAPLAN v. PHOTOSCRIBE TECH 12
generates this imaging. In particular, we note that noth-
ing in the claims expressly precludes manually “imaging”
before the laser burn process begins and then using the
imaging to control the laser as it marks a gemstone.
2. The Specification
This court turns next to the specification. “Claims
must be read in view of the specification[] of which they
are a part.” Markman, 52 F.3d at 979. The specification
“is always highly relevant to the claim construction
analysis. Usually, it is dispositive; it is the single best
guide to the meaning of a disputed term.” Phillips, 415
F.3d at 1315 (quoting Vitronics, 90 F.3d at 1582). Here,
the specification indicates that “controlling the directing .
. . based on . . . the imaging” includes control based on
both automated and manual feedback derived from opti-
cal images of a gemstone, either before or during the laser
burn process. Throughout the patent, the term “imaging”
is used in connection with an optical feedback process in
which either a computer or a user can set up and manipu-
late an inscription. For example, the summary of the
invention section of the specification describes an “optical
feedback imaging system, e.g., the video camera,” ’351
Patent col.4 ll.39-40, and discloses that “optical feedback
of the process is possible through one or more video cam-
eras,” id. col.2 ll.61-62. The specification explains that
the optical feedback “may be used to adjust workpiece
positioning as well as inscription speed, number, intensity
and/or rate of pulses at a given location, as well as to
verify progress of the marking process.” Id. col.3 ll.1-6.
The district court correctly observed that this sentence
“does not talk about those operations being done by a
human operator,” but neither does the sentence foreclose
a role for a human in the optical feedback process. But
the next paragraph in the specification explicitly contem-
13 LAZARE KAPLAN v. PHOTOSCRIBE TECH
plates such a role: “[t]he optical feedback system also
allows the operator to design an inscription, locate the
inscription on the workpiece, verify the marking process
and archive or store an image of the workpiece and
formed markings.” Id. col.3 ll.14-17. Within the same
section, the specification discloses that where a single
pass of the laser is sufficient to inscribe a gemstone “an
automated optical feedback system may reliably control
operation.” Id. col.5 ll.57-60. The specification goes on to
explain, however, that when multiple passes are neces-
sary “user control may be desirable, and such control is
possible through use of the video cameras which are
directed at the workpiece, which display a real time image
on a computer monitor.” Id. col.5 l.67 – col.6 l.4.
The detailed description section of the specification
further illuminates the meaning of “controlling the direct-
ing . . . based on . . . the imaging.” In the portion of the
text entitled “Mode of Operation,” the specification states
that data concerning the profile of a gemstone is “used to
keep the focal point of the laser output on the surface of
the girdle at all times.” Id. col.17 ll.28-30 (element num-
bers removed). The specification discloses that such data
“may be automatically extracted from the images, or a
manual entry step employed to outline the profile and/or
girdle boundaries.” Id. col.17 ll.30-33. The specification
indicates that the manual entry step may involve a user
marking a girdle profile “[i]n [a] horizontal camera screen
. . . using a mouse input device to mark the critical di-
mensions.” Id. col.17 ll.26-28. The specification also
makes clear that the manual entry step is performed
before the marking process begins: “When these proce-
dures are complete a so-called G-code file is generated
containing all inscription data. This file is transferred to
the positioning stage controller for performance of the
actual inscription.” Id. col.17 ll.36-38. Similarly, the
specification later discloses that a “complete inscription . .
LAZARE KAPLAN v. PHOTOSCRIBE TECH 14
. is projected on an image from a vertically oriented
camera of the girdle providing the user with the ability to
interactively change length of inscription, height of char-
acters remove and align the whole inscription.” Id. col.20
ll.52-56. The specification again notes that the “girdle
area may be outlined by the user with a mouse or auto-
matically determined by image analysis in the computer
system. The operator can thus observe the inscription
before making; observe the marking process itself, and
then observe the result and decide if the inscription is
complete or not.” Id. col.20 ll.56-62 (element numbers
removed).
Considered together, these statements make evident
that one of ordinary skill in the art at the time of the
invention would have understood the term “controlling
the directing . . . based on . . . the imaging” to include
control based on either automated or manual feedback
derived from optical images of a gemstone, before or
during the laser burn process.
3. Prosecution History
Nothing in the prosecution history of the ’351 Patent
suggests a narrower meaning of the “controlling the
directing” limitation. The Defendants contend that
several statements made in response to the rejection of
what is now claim 1 of the ’351 Patent by the PTO show
that Lazare considered the “controlling the directing”
limitation as requiring automatic computer control. One
of the statements is contained in an interview summary
issued by the PTO stating that Lazare “[a]greed that none
of the references . . . disclose the feedback of using imag-
ing of the workpiece during the marking process.” In a
subsequent response, Lazare stated the “controlling”
limitation “requires analysis of the image” and that
“[n]one of the prior art references discloses using the
15 LAZARE KAPLAN v. PHOTOSCRIBE TECH
imaging as a basis for controlling the inscription process.”
This court fails to see how either of these statements
support the narrow construction of “controlling the direct-
ing . . . based on . . . the imaging” asserted by the Defen-
dants. In light of the description of the inscription process
in the specification of the ’351 Patent, this court under-
stands the reference to “using imaging of the workpiece
during the marking process” to include not only using an
image during the laser burn process, but also the prepara-
tory steps of, for instance, using an image to position an
inscription and generate a profile of a gemstone. The
statements that the “controlling” limitation “requires
analysis of the image” and that “[n]one of the prior art
references disclose[] using the imaging as a basis for
controlling the inscription process” are consistent with
this understanding of the specification. To the extent that
the Defendants contend that these statements amount to
a disclaimer of subject matter, these statements fall short
of the clear and unmistakable disavowal necessary for the
doctrine of prosecution disclaimer to apply. See Omega
Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1325-26 (Fed.
Cir. 2003) (“[F]or prosecution disclaimer to attach, our
precedent requires that the alleged disavowing actions or
statements made during prosecution be both clear and
unmistakable.”).
Based on the foregoing, this court concludes that the
district court erred by limiting “controlling the directing .
. . based on . . . the imaging” to automatic feedback de-
rived from optical images of the gemstone during the laser
burn process. We therefore vacate the grant of summary
judgment of no literal infringement and the jury verdict of
no infringement under the doctrine of equivalents, as both
are based on this erroneous construction. Although
Lazare argues that it is entitled to judgment as a matter
of law based on the record before us, prudence counsels
that we remand this portion of the judgment for further
LAZARE KAPLAN v. PHOTOSCRIBE TECH 16
proceedings, as we cannot determine with any certainty
that the accused machines infringe the asserted claims
under this new construction. See Praxair, Inc. v. ATMI,
Inc., 543 F.3d 1306, 1324 (Fed. Cir. 2008) (“Because we
have adopted a new claim construction on appeal, and
this is not a case in which it is clear from the record that
the accused device does or does not infringe, a remand is
warranted for a determination of infringement under the
correct claim construction.”).
B. “Rigid Frame”
1. Jury Instructions
Claim 18 of the ’351 Patent recites a “laser energy mi-
croinscribing system” that includes a “rigid frame”:
18. A laser energy microinscribing system for
gemstones, said system comprising: a laser energy
source; a cut gemstone mounting system, allowing
optical access to a mounted gemstone; an optical
system for focusing laser energy from the laser
energy source onto a cut gemstone; a displaceable
stage, having a control input, for moving said
gemstone mounting system with respect to said
optical system so that said focused laser energy is
presented to desired positions on said gemstone;
an imaging system for viewing the gemstone from
at least one vantage point; and a rigid frame sup-
porting said laser, said optical system and said
stage in fixed relation, to resist differential move-
ments of said laser, said optical system and said
stage and increase immunity to vibrational mis-
alignments.
17 LAZARE KAPLAN v. PHOTOSCRIBE TECH
’351 Patent col.28 ll.27-43 (emphasis added). Lazare
argued during the Markman hearing that the “rigid
frame” element should be accorded its plain meaning,
urging that the element “should be accepted for exactly
what is says,” and the district court adopted this con-
struction of the claim. At trial, Lazare asked the district
court to read eighteen pages of proposed instructions to
the jury, which included sections that addressed the
construction of the “rigid frame” element and the stan-
dard for demonstrating infringement. The court declined,
choosing instead to read its own instructions to the jury.
As part of those instructions, the district court explained
to the jury that the jury was to determine whether the
accused machines “infringed claim 18 of the ’351 Patent in
respect to the element dealing with a rigid frame” and
then read the “rigid frame” limitation as recited in the
claim to the jury. Jury Charge vol. 10, 1554, Mar. 7,
2008. The court also read aloud dictionary definitions of
the words “rigid” and “frame” and explained that together
the words “mean[] . . . [a] rigid structure, a structure
[that] is not pliant, not flexible, a structure [that] is stiff,
unyielding, firm . . . .” Id. at 1556. The court informed
the jury that the “definition is of interest and if you want
to call for a dictionary during your deliberations, you can
call for one.” Id. at 1555. The court later reiterated this
invitation, stating that “you can get the dictionary on your
own and you may find some other part of the definition
that is helpful.” Id. at 1556. Neither party claims that
the jury asked for, or was given, a dictionary during its
deliberations.
During a subsequent recess, Lazare requested that
the court read the definition of “rigid frame” that the
court had adopted during the Markman hearing. The
court refused, explaining that it already had done so: “I
gave the ruling on the Markman . . . because of the lan-
LAZARE KAPLAN v. PHOTOSCRIBE TECH 18
guage of the claim. . . . I read the language of the claim [to
the jury]. I don’t have to go back to that.” Id. at 1575.
When the court provided the parties an opportunity to
object and suggest curative instructions, Lazare objected
to the “rigid frame” instruction on the grounds that the
court improperly focused on the words “rigid’ and “frame”
and read dictionary definitions of these words to the jury.
The court, apparently concerned that its jury instruction
might be erroneous, informed Lazare that to correct the
instruction the court would “be glad to read anything you
want me to read or direct [the jury’s] attention [to]” and
was “willing to do whatever you would like to have me
do.” Id. at 1585-86. In response, Lazare told the court it
“would be satisfied certainly if you just read the next
sentence [from the ’351 Patent] to the jury”: “[D]ue to
[the] compact size of the system and relatively small
components, the frame may have sufficient rigidity to
provide isolation from vibrational effects.” Id. at 1595.
Lazare later reassured the court that reading the sen-
tence would address its concerns with the instruction,
stating that it would “be satisfied with a simple reading of
that sentence to the jury.” Id. at 1596. The court complied
with Lazare’s request, and Lazare raised no further
objection.
Lazare now contends that it is entitled to a new trial
because the district court abdicated its responsibility to
definitively construe the “rigid frame” element when the
court refused to read its construction of the element to the
jury and instead suggested that the jury could rely on a
dictionary to interpret the element. Lazare also asserts
that the court misled the jury by focusing on the words
“rigid” and “frame” and reading dictionary definitions of
those words to the jury. Lazare argues that it was unnec-
essary to object to the curative instruction given by the
district court because the court had already made clear
that objecting further would have been pointless by
19 LAZARE KAPLAN v. PHOTOSCRIBE TECH
refusing Lazare’s requests to read the proposed jury
instructions and the court’s construction of the “rigid
frame” element to the jury.
The Defendants disagree and contend that Lazare
waived these arguments by failing to object to the cura-
tive instruction. The Defendants assert that even if we
conclude that Lazare did not waive these arguments,
there is no reason to disturb the jury verdict because the
instruction at issue is consistent with the court’s con-
struction of the “rigid frame” element and, moreover,
Lazare has not established that it suffered any prejudice
as a result of the instruction.
This court agrees with the Defendants. Under Rule
51 of the Federal Rules of Civil Procedure, a party must
timely object to a jury instruction “on the record, stating
distinctly the matter objected to and the grounds for the
objection.” If a party fails to preserve its objection to a
jury instruction, a court may nonetheless “consider a
plain error in the instructions . . . if the error affects
substantial rights.” Fed. R. Civ. P. 51(d)(2).
We look to regional circuit law to determine whether a
party has satisfied the requirements of Rule 51. Ad-
vanced Display Sys., Inc. v. Kent State Univ., 212 F.3d
1272, 1282 (Fed. Cir. 2000) (“Because objection to a jury
instruction involves a procedural matter that is not
intimately related to this court’s exclusive jurisdiction, we
look to the regional circuit law to ascertain the require-
ments necessary to comply with [Rule 51].” (citation
omitted)). The Second Circuit generally requires a liti-
gant to object to a jury instruction in the manner set forth
in Rule 51; however, the Second Circuit will excuse a
failure to properly object to a jury instruction when the
litigant has “previously made its position clear to the trial
judge and any further attempt to change the judge’s mind
would have been futile.” Thornley v. Penton Publ’g, Inc.,
104 F.3d 26, 30 (2d Cir. 1997), abrogated on other grounds
LAZARE KAPLAN v. PHOTOSCRIBE TECH 20
by Slattery v. Swiss Reinsurance Am. Corp., 248 F.3d 87(2d Cir. 2001). Barring such an excuse, when a litigant
has failed to object to a jury instruction, the Second
Circuit reviews the instruction for “fundamental error.”
DiBella, 587 F.3d at 569 (explaining that the “Court may
review jury instructions and verdict sheets for fundamen-
tal error even when a litigant has not complied with the
Fed. R. Civ. P. 51 objection requirements” (citation omit-
ted)); see also SEB S.A. v. Montgomery Ward & Co., 594
F.3d 1360, 1375 (Fed. Cir. 2010) (applying the Second
Circuit’s fundamental error standard to jury instructions
concerning patent law). For an error to be fundamental,
it must be “so serious and flagrant that it goes to the very
integrity of the trial.” DiBella, 587 F.3d at 569 (citation
omitted).
Lazare acknowledges that it did not object after the
district court gave the curative instruction, and this court
is not persuaded that lodging an objection would have
been futile. This is not, as Lazare argues, a situation in
which further attempts to persuade the district court
would have been unavailing or even unwelcome. Al-
though Lazare claims that it notified the court of its
position regarding the instruction when it asked the court
to read the proposed jury instructions and the court’s
construction of the “rigid frame” element to the jury,
neither request stated the basis for Lazare’s objection to
the instruction. Once Lazare formally objected and
explained why it believed the instruction was erroneous,
the court made clear that it would not only entertain
whatever remedial measures Lazare suggested, but also
would likely adopt them, stating that it would be “glad to
read anything you want me to read or direct [the jury’s]
attention [to]” and that it was “willing to do whatever you
would like to have me do” to correct the instruction. We
can hardly imagine a clearer indication that further
suggestions or discussion would not have been futile.
21 LAZARE KAPLAN v. PHOTOSCRIBE TECH
Moreover, by proclaiming that it would be “satisfied
certainly” if the court read the curative instruction and
later stating that it would “be satisfied with a simple
reading of the [curative instruction],” Lazare led the court
to believe that reading the curative instruction would
address any concerns Lazare had with the original in-
struction. It would be fundamentally unfair to allow
Lazare to unequivocally assert in response to the court’s
offer to “do whatever you would like to have me do” that
reading the curative instruction it suggested would ad-
dress its objections and then successfully argue on appeal
that it was somehow precluded from seeking its desired
remedy.
Because Lazare failed to object after the court gave
the curative instruction and because this failure was not
excused, the only question that remains is whether the
instruction given represents fundamental error. Although
the instruction given by the district court may not have
been ideal, the instruction was not so flawed as to under-
mine the integrity of the trial. Contrary to Lazare’s
argument, the court did not leave the construction of the
“rigid frame” limitation to the jury. Rather, it informed
the jury that it was “[the court’s] duty to hold a hearing
before the trial and determine what the proper construc-
tion or interpretation of [the] patent language is.” The
district court then read its construction of the limitation—
the language of the limitation itself, supplemented by
dictionary definitions—to the jury. Lazare contends that
the court erred by resorting to a dictionary, but courts are
not barred from relying on dictionaries to define claim
terms. As we explained in Phillips, courts are free to
consult dictionaries “and may . . . rely on dictionary
definitions when construing claim terms, so long as the
dictionary definition does not contradict any definition
found in or ascertained by a reading of the patent docu-
LAZARE KAPLAN v. PHOTOSCRIBE TECH 22
ments.” 415 F.3d at 1322 (quoting Vitronics, 90 F.3d at1584 n.6). Here, after reading dictionary definitions of
the words to the jury, the court explained that the words
“mean[] . . . [a] rigid structure, a structure [that] is not
pliant, not flexible, a structure [that] is stiff, unyielding,
firm . . . .” This definition is entirely consistent with the
plain language of the “rigid frame” limitation and the
specification. Regarding the contention that the court
improperly focused on the words “rigid” and “frame”, we
note the court read the entire limitation to the jury and
instructed the jury that every part of the claim must be
considered. At bottom, this court is not convinced that
the instruction amounted to fundamental error.
2. Corroboration
To demonstrate that claim 18 of the ’351 Patent is in-
valid, the Defendants introduced at trial the testimony of
Herbert Gresser, who, as noted above, is the eponymous
co-inventor of the Gresser machine. He testified that the
machine included a laser, a fixture for a diamond, and
various optical components mounted on a “rigid base
plate” that was “rigid enough to support all these parts
without major deflections.” Relying in part on this testi-
mony, the Defendants successfully argued that claim 18 is
invalid.
Lazare essentially contends on appeal that it is enti-
tled to judgment as a matter of law that claim 18 is not
invalid because the Defendants failed to sufficiently
corroborate Gresser’s testimony, as none of the evidence
introduced by the Defendants mentions either “resist[ing]
differential movements” or “increas[ing] immunity to
vibrational misalignments” as required by claim 18. For
their part, the Defendants argue that the evidence pre-
23 LAZARE KAPLAN v. PHOTOSCRIBE TECH
sented at trial was more than sufficient to corroborate
Gresser’s testimony.
Generally, “[c]orroboration is required of any witness
whose testimony alone is asserted to invalidate a patent.”
TypeRight Keyboard Corp. v. Microsoft Corp., 374 F.3d
1151, 1159 (Fed. Cir. 2004) (citation omitted). This re-
quirement stems from the suspect nature of oral testi-
mony concerning invalidating events. As the Supreme
Court noted more than a century ago, the “unsatisfactory
character” of such testimony “aris[es] from the forgetful-
ness of witnesses, their liability to mistakes, their prone-
ness to recollect things as the party calling them would
have them recollect them, aside from the temptation to
actual perjury . . . .” The Barbed Wire Patent, 143 U.S.
275, 284 (1892). Although oral testimony asserted to
invalidate a patent must be corroborated, as we have
explained in a similar context, this court has “not im-
pose[d] an impossible standard of ‘independence’ on
corroborative evidence by requiring that every point . . .
be corroborated by evidence having a source totally inde-
pendent of the [witness].” Knorr v. Pearson, 671 F.2d
1368, 1374 (CCPA 1982). Rather, this court applies a
“rule of reason” analysis to determine whether the testi-
mony introduced has been sufficiently corroborated.
Lacks Indus., Inc. v. McKechnie Vehicle Components USA,
Inc., 322 F.3d 1335, 1349 (Fed. Cir. 2003). Under this
analysis, this court evaluates all of the pertinent evidence
“so that a sound determination of the credibility of the
[witness’s] story may be reached.” Price v. Symsek, 988
F.2d 1187, 1195 (Fed. Cir. 1993). When conducting a rule
of reason analysis, this court generally considers the
following eight factors:
(1) the relationship between the corroborating
witness and the alleged prior user,
LAZARE KAPLAN v. PHOTOSCRIBE TECH 24
(2) the time period between the event and trial,
(3) the interest of the corroborating witness in the
subject matter in suit,
(4) contradiction or impeachment of the witness’
testimony,
(5) the extent and details of the corroborating tes-
timony,
(6) the witness’ familiarity with the subject matter
of the patented invention and the prior use,
(7) probability that a prior use could occur consid-
ering the state of the art at the time,
(8) impact of the invention on the industry, and
the commercial value of its practice.
Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d
1368, 1371 (Fed. Cir. 1998).
This court is not persuaded by Lazare’s argument that
corroboration is lacking. In support of Gresser’s testi-
mony, the Defendants introduced a 1980 contract between
Gresser’s company, Group II, and Lazare, under which
Group II agreed to create what became the Gresser ma-
chine. The contract explicitly specified that the machine
would include “a rigid base to support laser, scanner
optics, and object fixture with adequate protective covers.”
The Defendants also produced a 1982 manual for the
machine that describes its operation and illustrates its
structure. This documentary evidence, created around
the time the machine was developed, provides strong
support for Gresser’s testimony. Cf. Sandt Tech., Ltd. v.
Resco Metal & Plastics Corp., 264 F.3d 1344, 1350-51
(Fed. Cir. 2001) (“Documentary or physical evidence that
is made contemporaneously with the inventive process
provides the most reliable proof that the inventor’s testi-
mony has been corroborated.”). Moreover, one of Lazare’s
own witnesses, Charles Rosario, Lazare’s Senior Vice
25 LAZARE KAPLAN v. PHOTOSCRIBE TECH
President of Diamond Operations, confirmed that the
Gresser machine had a base that supported a laser,
scanner optics, and an object fixture and testified that the
base “was so solid that it wouldn’t warp.” The evidence
before the district court also included an undated com-
mercial video illustrating the machine in operation and
an undated photograph of the machine annotated by
Gresser during litigation. Because the annotations were
added to the photograph during litigation, the annota-
tions are no more reliable than the oral testimony they
accompanied. See Juicy Whip, Inc. v. Orange Bang, Inc.,
292 F.3d 728, 743 (Fed. Cir. 2002). But, despite being
undated, the photograph itself and the video lend further
credence to Gresser’s testimony, as they are consistent
with his description of the machine and the other support-
ing documentary evidence presented, and Lazare has not
challenged their accuracy. Indeed, with a minor exception
irrelevant here, Rosario acknowledged that the photo-
graph and video accurately represented the Gresser
machine. After considering the factors set out in Wood-
land Trust, this court concludes that this evidence was
sufficient to corroborate Gresser’s testimony.
C. “Positional Accuracy of Placement”
Claims 1 and 24 of the ’938 Patent each recite a dia-
mond that has graphitized spots having dimensions
within specified width and depth ranges, wherein the
“positional accuracy of placement” of each spot is within
approximately ±1 micron:
1. A diamond having a microinscribed marking
comprising a plurality of laser generated graph-
itized spots on a polished surface of the diamond,
each spot having a depth of less than about 10 mi-
crons and having a width of less than about 9 mi-
LAZARE KAPLAN v. PHOTOSCRIBE TECH 26
crons, wherein a positional accuracy of placement
of each of the graphitized spots to form the mark-
ing is within about ±1 micron.
’938 Patent col.27 ll.13-19 (emphasis added).
24. A diamond having a microinscribed marking
comprising a plurality of laser generated graph-
itized spots on a brutted surface of the diamond,
each spot having a depth of less than about 10 mi-
crons and having a width of less than about 12
microns, wherein a positional accuracy of place-
ment of each of the graphitized spots to form the
marking is within about ±1 micron.
Id. col.28 ll.35-41 (emphasis added). Before trial, the
parties agreed that the “positional accuracy of placement”
limitation means that “[d]uring inscription . . . the center
of each spot is within ±1.1 microns of the desired position
of the spot on the diamond.” Joint Pre-Claim Construc-
tion Hr’g Statement 3. During trial, the Defendants
contended that to prove that a diamond satisfied the
“positional accuracy of placement” limitation, Lazare
must show that each graphitized spot on the diamond was
placed within ±1 micron of a predetermined reference
point on the diamond. Lazare, by contrast, argued that to
meet the limitation it simply needed to demonstrate that
“[w]hen you put down a spot” you can put another spot
“right next to it.” Neither party asked the court to further
construe the “positional accuracy of placement” limitation,
and the jury returned a verdict of noninfringement of both
claims.
Citing our decision in O2 Micro International Ltd. v.
Beyond Innovation Technology Co., 521 F.3d 1351, 1362
(Fed. Cir. 2008), Lazare contends that a new trial is
27 LAZARE KAPLAN v. PHOTOSCRIBE TECH
necessary because the district court erred by failing to
further construe the “positional accuracy of placement”
limitation. Lazare argues that the parties disputed the
scope of the limitation, and, despite recognizing the
nature of the dispute, the court failed to resolve the issue,
effectively leaving the jury to determine the meaning of
the limitation. Lazare also asserts that under the correct
construction of the limitation no reasonable jury could
have found that these claims are not infringed. The
Defendants contend that the court was not obligated to
further construe the limitation because Lazare did not
ask the court to revisit the parties’ agreed upon construc-
tion. Moreover, the Defendants argue that the parties did
not dispute the construction of the claim but rather the
proper test to determine infringement, which is a factual
question appropriate for the jury.
This court agrees with the Defendants that the par-
ties’ dispute concerns factual questions relating to the test
for infringement and not the legal inquiry of the appro-
priate scope of the “positional accuracy” limitation. See
Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil
Co., 425 F.3d 1366, 1377 (Fed. Cir. 2005) (“Because the
claim language does not require a particular form of
testing, this inquiry is not a claim construction question,
which this court reviews de novo. Rather, this court
reviews this inquiry as a question of fact.”), overruled on
other grounds by Cardiac Pacemakers, Inc. v. St. Jude
Med., Inc., 576 F.3d 1348 (Fed. Cir. 2009).
Even if Lazare were correct that the parties’ dis-
agreement concerned the scope of the limitation, Lazare
waived this argument by not raising it before the district
court. Although waiver is generally a procedural issue,
this court applies Federal Circuit precedent when deter-
mining whether a claim construction argument has been
LAZARE KAPLAN v. PHOTOSCRIBE TECH 28
waived. Harris Corp. v. Ericsson Inc., 417 F.3d 1241,
1250-51 (Fed. Cir. 2005). Unlike O2 Micro where the
appellant presented its claim construction argument to
the district court during a Markman hearing, Lazare first
asserted the claim construction argument it presses on
appeal in a post-trial motion. As we have repeatedly
explained, “litigants waive their right to present new
claim construction disputes if they are raised for the first
time after trial.” Broadcom Corp. v. Qualcomm Inc., 543
F.3d 683, 694 (Fed. Cir. 2008) (citation omitted).
Lazare argues that its failure to raise its claim con-
struction argument was excused because the court was
allegedly aware of the issue before the trial concluded.
Lazare primarily relies on two statements from the court
to support its contention that the court knew of the dis-
pute. First, when discussing the “positional accuracy of
placement” limitation at trial the court stated it would
“have to worry about the interpretation of the claim.”
Second, after reading the parties’ agreed upon construc-
tion of the limitation as part of its jury instruction, the
court told the jury that “I don’t think there is any more
definition that I can give you. This is in your hands.”
Neither statement, however, demonstrates that the court
was aware of the supposed dispute. The court stated that
it would “have to worry about the interpretation of the
claim” in the context of a discussion regarding the differ-
ence between “positional accuracy” and “positional re-
peatability.” There is no indication anywhere in this
discussion that the court was aware of the argument that
Lazare now raises on appeal. When the court informed
the jury that “I don’t think there is any more definition
that I can give you,” we understand the court simply to
have instructed the jury that it was up to the jury to
apply the definition of “positional accuracy” that the court
had just read, not, as Lazare argues, that the jury was
29 LAZARE KAPLAN v. PHOTOSCRIBE TECH
free to chose from what Lazare contends were the conflict-
ing constructions presented by the parties. Regardless, it
was incumbent upon Lazare to raise its claim construc-
tion argument before the district court, and, having failed
to do so, Lazare cannot now resurrect that argument on
appeal by pointing to ambiguous statements in the record.
This court also agrees with the Defendants that the
jury’s verdict was supported by substantial evidence. The
record contains ample evidence that, under the test
proposed by the Defendants, Lazare failed to demonstrate
infringement, as Lazare’s expert admitted that he never
compared each spot on the diamond to a predetermined
reference point.
D. “Positional Repeatability”
Claims 62 and 70 of the ’938 Patent each recite a dia-
mond that has graphitized spots, wherein each spot has a
“positional repeatability” within about 1.0 micron:
62. A diamond, having a microinscribed marking
comprising a plurality of laser generated graph-
itized spots on a polished surface of the diamond,
each spot having a depth of less than about 10 mi-
crons and having a width of less than about 9 mi-
crons, wherein a positional repeatability of each of
the graphitized spots in forming the marking is
within about 1.0 micron.
’938 Patent col.31 ll.4-10 (emphasis added).
70. A diamond, having a microinscribed marking
comprising a plurality of laser generated graph-
itized spots on a brutted surface of the diamond,
LAZARE KAPLAN v. PHOTOSCRIBE TECH 30
each spot having a depth of less than about 10 mi-
crons and having a width of less than about 12
microns, wherein a positional repeatability of each
of the graphitized spots in forming the marking is
within about 1.0 micron.
Id. col.31 ll.34-40 (emphasis added).
Before trial, the parties agreed that “positional re-
peatability” means “[w]hen a spot in the inscription is
repeated, the center of the spot is placed within 1.1 mi-
crons from the center of the original spot.” Joint Pre-
Claim Construction Hr’g Statement 3. To prove in-
fringement of this limitation, Lazare measured the width
of certain “dual trace” inscriptions—an inscription that
results from attempting to place one inscription on top of
another—on selected diamonds. Lazare’s experts testified
that the lines that make up the measured dual trace
inscriptions were within a micron of each other. Nonethe-
less, the jury returned a verdict of non-infringement of
the claims.
Lazare argues on appeal that no reasonable jury could
have found non-infringement of these claims, as the
Defendants did not present any contrary measurements
or tests. The Defendants contend that Lazare’s expert
admitted that he never performed the measurements that
the Defendants believe are necessary to prove infringe-
ment. Moreover, the Defendants argue that even if the
test he performed was adequate, he only made represen-
tative measurements and did not measure each spot on
the diamond as required by the claim. Finally, the De-
fendants contend that Lazare’s expert admitted that
“positional repeatability” cannot be determined by meas-
uring the width of a dual trace inscription.
31 LAZARE KAPLAN v. PHOTOSCRIBE TECH
This court agrees with the Defendants. Although
Lazare’s experts testified that the lines that form the
measured dual trace inscriptions were within a micron of
each other, one of Lazare’s experts testified that “posi-
tional repeatability” cannot be determined from measur-
ing the width of a dual trace inscription. Moreover, David
Benderly testified that, based on known inaccuracies in
the allegedly infringing machines and the results of
calibration tests, the machines could not produce dia-
monds that satisfied the “positional repeatability” limita-
tion. Because the jury was free to dismiss the conflicting
testimony of Lazare’s experts and rely on Benderly’s
testimony, the court concludes that the jury verdict was
supported by substantial evidence.
E. Inequitable Conduct
To prove inequitable conduct, an accused infringer
must present clear and convincing evidence that “the
applicant (1) made an affirmative misrepresentation of
material fact, failed to disclose material information, or
submitted false material information, and (2) intended to
deceive the [PTO].” Star Scientific, Inc. v. R.J. Reynolds
Tobacco Co., 537 F.3d 1357, 1365 (Fed. Cir. 2008) (quoting
Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363
(Fed. Cir. 2007)). If a court concludes that a threshold
level of both materiality and intent to deceive has been
proven by clear and convincing evidence, the court must
then “balance the equities to determine whether the
applicant’s conduct before the [PTO] was egregious
enough to warrant holding the entire patent unenforce-
able.” Id. (citation omitted). We review the underlying
factual findings of materiality and intent to deceive for
clear error, and we review the ultimate determination of
inequitable conduct for abuse of discretion. Id. (citation
omitted).
LAZARE KAPLAN v. PHOTOSCRIBE TECH 32
1. The ’351 Patent
The district court concluded that Lazare engaged in
inequitable conduct when prosecuting the application that
matured into the ’351 Patent by failing to disclose the
structure of the Gresser machine to the PTO. The court
found that the structure of the machine was highly mate-
rial to the prosecution of the ’351 Patent because evidence
presented at trial demonstrated that the machine con-
tained a laser, optical system, and stage mounted on a
thick aluminum plate, which the court concluded was
relevant to the “rigid frame” element recited in claim 18 of
the patent. The court also observed that the PTO initially
rejected a claim that included a “rigid frame” element
during the prosecution of U.S. Patent No. 5,932,119, the
parent of the ’351 Patent. The PTO originally rejected the
claim in light of the following three patents: United States
Patent No. 5,225,650 to Babel et al. (“the Babel Patent”),
the Gresser Patent, and Japanese Patent No. 3-146285.
The PTO characterized the Babel Patent as teaching a
rigid frame supporting a laser, optical system, and work-
piece and concluded that the claim was obvious over the
combination of this disclosure, the laser inscribing ma-
chine taught by Gresser, and a camera system taught by
the Japanese patent. In response, the prosecuting attor-
neys successfully argued that neither Babel nor any of the
other cited references disclosed the claimed “rigid frame.”
The court found that this rejection demonstrated that the
PTO had “no understanding whatever about the structure
of the Gresser machine.” Moreover, the court concluded
that the rejection “posed in the most explicit terms the
issue of whether there was prior art that was material
and relevant in connection with this application to get a
patent on a rigid frame” and “demanded a disclosure of
the fact that the Gresser machine has this especially thick
33 LAZARE KAPLAN v. PHOTOSCRIBE TECH
base to which the laser, the optical system, and stage
were attached.”
Regarding specific intent, one of Lazare’s prosecuting
attorneys explained during his deposition that he did not
more fully describe the Gresser machine to the PTO in
part because he believed that the “different design strat-
egy in the machine,” e.g., the use of pneumatic legs to
provide an air cushion for the machine, demonstrated
that the machine did not have the claimed “rigid frame”
and therefore did not need to be disclosed. The district
court discounted this testimony, finding that “[t]he fact
that there were damp[ening] mechanisms at the feet [of
the machine] under no circumstances can possibly ration-
ally explain not disclosing relevant prior art.” The district
court found that Lazare intended to deceive the PTO by
not adequately disclosing the structure of the Gresser
machine because Lazare “simply had to know the issues.
They had to know particularly after the [rejection]. . . .
They had to know that there was a very, very clear duty
to disclose the arrangement of the Gresser machine . . . .”
Lazare argues that under the correct construction of
the “rigid frame” limitation, the structure of the Gresser
machine was not material to the prosecution of the ’351
Patent. Lazare contends that even under the construction
of the limitation espoused by the district court, informa-
tion about the machine was not material because that
information was cumulative. Lazare also challenges the
court’s intent finding, pointing out that the Gresser
machine is mentioned in the specification of the ’351
Patent and that Lazare discussed the Gresser machine
during prosecution. Lazare argues that the court improp-
erly inferred intent to deceive solely from the materiality
of the information and that intent to deceive was not the
LAZARE KAPLAN v. PHOTOSCRIBE TECH 34
single most reasonable inference that could be drawn
from the evidence.
The Defendants respond that irrespective of the con-
struction adopted by the court, the structure of the ma-
chine was material because the evidence presented at
trial showed that the machine had a rigid base that
supported the components recited in claim 18. Regarding
intent to deceive, the Defendants contend that the fleeting
mentions of the Gresser machine in the ’351 Patent and
during prosecution demonstrate Lazare’s intent to deceive
because, although Lazare discussed the machine, Lazare
never disclosed the relevant part of the machine to the
PTO. The Defendants also assert that the court properly
inferred intent from the circumstances surrounding the
decision to withhold from the PTO information concerning
the structure of the machine.
This court agrees with Lazare. Even assuming that
information concerning the structure of the Gresser
machine was highly material to the prosecution of the
’351 Patent, the district court clearly erred by inferring
that Lazare’s counsel intended to deceive the PTO by
withholding the information. Counsel provided an expla-
nation for not disclosing the machine, and there is noth-
ing to suggest that the decision to withhold was an
attempt to conceal. At best, the failure to disclose what
was believed to be cumulative information was a mistake
or exercise of poor judgment that does not support an
inference of intent to deceive. See Abbott Labs. v. Sandoz,
Inc., 544 F.3d 1341, 1354 (Fed. Cir. 2008) (“Mistake or
negligence, even gross negligence, does not support a
ruling of inequitable conduct.”).
35 LAZARE KAPLAN v. PHOTOSCRIBE TECH
2. The ’938 Patent
While the application that matured into the ’938 Pat-
ent was pending, Lazare obtained measurements of the
average width and depth of lines inscribed by the Gresser
machine on several diamonds. The measured depths were
all less than 10 microns and, with one exception, the
measured widths were less than 9 microns, falling within
the range of depths and widths recited in what would
become claims 1, 24, 62, and 70 of the ’938 Patent.
Charles Rosario prepared a declaration that included a
chart summarizing the measurements and provided the
declaration to the Lazare attorneys responsible for prose-
cuting the ’938 application. The attorneys decided not to
submit the declaration in the ’938 application, which by
this time the PTO had indicated was in condition for
allowance. At the inequitable conduct hearing, the attor-
neys explained that they did not submit the declaration
because they believed that the declaration was cumula-
tive in light of three patents already before the PTO that
they believed disclosed the claimed ranges of widths and
depths—the Gresser Patent and U.S. Patents No.
5,410,125 and No. 5,149,938 to Ronald Winston and Necip
Alev (collectively, “the Winston Patents”)—and did not
address the “positional repeatability” and “positional
accuracy” limitations found in the relevant claims. The
attorneys, however, filed the declaration in a pending
continuation of the ’938 application that contained similar
claims and was before the same examiner.
The district court concluded that Lazare committed
inequitable conduct by withholding the declaration from
the PTO in the ’938 application. The court found the
declaration highly material and concluded that the prose-
cuting attorneys were aware of the materiality of the
declaration and yet still decided to withhold the declara-
tion from the PTO. The court gave no weight to the
LAZARE KAPLAN v. PHOTOSCRIBE TECH 36
attorneys’ explanation for withholding the declaration,
finding that the Winston and Gresser patents “under no
circumstances anticipate or disclose what is really rele-
vant to the claims being made in the proposed ’938 Pat-
ent.” The court characterized the Gresser Patent as
disclosing a “width of anywhere from 1 to 100 microns”
and observed that the widths recited in the ’938 applica-
tion were “not something less than 100 microns as de-
scribed in [the] Gresser [Patent], it was something less
than 9 microns or 12 microns.” Similarly, the court
described the Winston Patents as teaching depths “either
plus or minus 10 microns” and noted that in the ’938
application “the depth is not specified to be somewhere
plus or minus 10 microns . . . as in the Winston patent, it
was specified to be less than about 10 microns, and no
more.” In light of these findings, the court determined
that Lazare intended to deceive the PTO by withholding
the declaration.
Lazare reasserts on appeal that the declaration was
not material because the declaration was cumulative to
the Winston Patents and the Gresser Patent. Lazare
argues that each of the Winston Patents disclose the
range of inscription depths and widths contained in the
declaration, and that the Gresser Patent teaches the
range of widths disclosed in the declaration. Lazare again
argues that the district court improperly inferred intent
to deceive from its materiality finding and asserts that
intent to deceive is not the single most reasonable infer-
ence to be drawn from the evidence.
The Defendants contend that neither the Winston
Patents nor the Gresser Patent discloses the claimed
depths or widths and, in any event, Lazare waived the
argument that the Winston Patents each disclose the
claimed widths because Lazare did not raise this argu-
ment before the district court. The Defendants argue that
even if we were to conclude otherwise, the declaration is
37 LAZARE KAPLAN v. PHOTOSCRIBE TECH
still not cumulative because the references to depths and
widths in these references are “oblique.” As further
support for their materiality contention, the Defendants
note that despite being aware of both the Winston Patents
and the Gresser Patent, the PTO twice found similar
claims in the continuation of the ’938 application antici-
pated by the declaration. The Defendants defend the
district court’s intent finding by again arguing that the
district court properly inferred intent from the prosecut-
ing attorneys’ knowledge of the materiality of the declara-
tion and the circumstances surrounding the decision to
withhold the declaration.
This court again agrees with Lazare. Here, too, even
if we assume that the declaration is highly material, the
district court committed clear error when it found that
Lazare intended to deceive the PTO by withholding the
declaration. The court rejected the attorneys’ explanation
for withholding the declaration because the court believed
that a reference that discloses a range that overlaps or
includes, but is not coextensive with, a claimed range
cannot teach the claimed range. This is simply incorrect;
a prior art reference that discloses a range that encom-
passes or overlaps a claimed range generally is sufficient
to establish a prima facie case of invalidity. See, e.g., In re
Peterson, 315 F.3d 1325, 1330 (Fed. Cir. 2003) (“We
therefore conclude that a prior art reference that discloses
a range encompassing a somewhat narrower claimed
range is sufficient to establish a prima facie case of obvi-
ousness.”); Ormco Corp. v. Align Tech., Inc., 463 F.3d
1299, 1311 (Fed. Cir. 2006) (“Where a claimed range
overlaps with a range disclosed in the prior art, there is a
presumption of obviousness.”). Although we give a court’s
credibility determinations considerable deference, a court
cannot, as was done here, “cloak the application of an
erroneous legal standard in the guise of a credibility
determination, and thereby shield it from appellate
LAZARE KAPLAN v. PHOTOSCRIBE TECH 38
review.” Andreu ex rel. v. Sec’y of Health & Human
Servs., 569 F.3d 1367, 1379 (Fed. Cir. 2009). When the
attorneys’ explanation for withholding the declaration is
considered, it is clear that intent to deceive is not the
single most reasonable inference that can be drawn from
the evidence. Therefore, the court clearly erred when it
determined that Lazare committed inequitable conduct
with respect to the ’938 Patent. See Scanner Techs. Corp.
v. ICOS Vision Sys. Corp. N.V., 528 F.3d 1365, 1376 (Fed.
Cir. 2008) (“Whenever evidence proffered to show either
materiality or intent is susceptible of multiple reasonable
inferences, a district court clearly errs in overlooking one
inference in favor of another equally reasonable infer-
ence.”).
F. Exceptional Case and Attorneys’ Fees
“Determining whether a case is exceptional and thus
whether attorney fees should be granted under 35 U.S.C.
§ 285 is a two-step process.” Enzo Biochem, Inc. v. Cal-
gene, Inc., 188 F.3d 1362, 1370 (Fed. Cir. 1999). “The
district court must first determine whether the case is
exceptional, a factual determination that we review for
clear error; if the case is found to be exceptional, the
district court must then determine whether attorney fees
should be awarded, a determination that we review for
abuse of discretion.” Id. Because the district court’s
exceptional case finding is based on its clearly erroneous
inequitable conduct ruling and its award of attorneys’ fees
in turn rests on the exceptional case finding, we vacate
both the exceptional case finding and the attorneys’ fee
award. See Research Corp. Techs. v. Microsoft Corp., 536
F.3d 1247, 1254 (Fed. Cir. 2008).
39 LAZARE KAPLAN v. PHOTOSCRIBE TECH
III. CONCLUSION
For the foregoing reasons, this court vacates the grant
of summary judgment of no literal infringement and the
verdict of non-infringement under the doctrine of equiva-
lents of claims 1 and 7 of ’351 Patent and remands for
further proceedings. We affirm the verdict of invalidity
and non-infringement of claim 18 of the ’351 Patent. We
also affirm the verdicts of non-infringement of claims 1,
24, 62, and 70 of the ’938 patent. Finally, this court
vacates the inequitable conduct findings, the exceptional
case finding, and the award of attorneys’ fees.
AFFIRMED-IN-PART, VACATED-IN-PART, AND
REMANDED
COSTS
Each party shall bear its own costs.