Taltech Ltd. v. Esquel Apparel, Inc.

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1506
TALTECH LIMITED
and TAL APPAREL LIMITED,
Plaintiffs-Appellants,
v.
ESQUEL APPAREL, INC.
and ESQUEL ENTERPRISES LIMITED,
Defendants-Appellees.
William K. West, Jr., Howrey LLP, of Washington, DC, argued for plaintiffs-
appellants. With him on the brief were Pamela S. Kane and Jim W. Ko.
Thomas H. Shunk, Baker & Hostetler LLP, of Washington, DC, argued for
defendants-appellees. With him on the brief were Gary J. Rinkerman and A. Neal
Seth.
Appealed from: United States District Court for the Western District of Washington
Senior Judge Thomas S. Zilly
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1506
TALTECH LIMITED
and TAL APPAREL LIMITED,
Plaintiffs-Appellants,
v.
ESQUEL APPAREL, INC.
and ESQUEL ENTERPRISES LIMITED,
Defendants-Appellees.
Appeal from the United States District Court for the Western District of Washington in
case no. 04-CV-974, Senior Judge Thomas S. Zilly.
______________________
DECIDED: May 22, 2008
_______________________
Before MAYER, BRYSON and GAJARSA, Circuit Judges.
PER CURIAM.
TALtech Limited and TAL Apparel Limited (“TAL”) appeal the judgment of the
Western District of Washington that TAL committed inequitable conduct in the
prosecution of U.S. Patent No. 5,568,779 (’779 Patent) and that this was an exceptional
case under 35 U.S.C. § 285 warranting the award of attorney’s fees and costs, that
claim 18 of the ’779 Patent is invalid for failure to disclose the best mode, and that
Esquel Apparel, Inc. and Esquel Enterprises Limited (“Esquel”) did not infringe claims
18, 25, and 26 of the ’779 Patent. TALtech Ltd. V. Esquel Apparel, Inc., No. 2:04-CV-
00974 (W.D. Wash. July 13, 2007). Because the district court did not determine
whether disclosed prior art was merely cumulative to withheld prior art, we vacate the
finding of inequitable conduct and exceptional case and remand. We affirm the
invalidity of claim 18, and the finding of non-infringement of claims 18, 25 and 26. Each
party will bear its own costs.
I.
John Wong invented a new seam for “wash-and-wear” dress shirts that solved
the problem of puckering when laundered. After seeing a seam employing heat-fusible
adhesive tapes on a raincoat produced by his employer, Hong-Kong-based TAL
Apparel, Wong was inspired to try a similar seam in dress shirts. He obtained various
sample adhesive tapes from Vilene and tried them in his seam. After many trials with
the various adhesives, he eventually settled on a preference for Vilene SL33 and
produced a shirt that did not pucker appreciably after a standard set of washings.
Shirts produced with this seam became successful, and on May 17, 1994, Wong filed
an application for patent protection for his invention.
After the initial filing but before its first office action, Wong filed an information
disclosure statement with the PTO, including another TAL produced raincoat seam
incorporating bonding elements and a published German application of Felix Robers
that produced a seam similar to the inspirational raincoat seam. He did not however
present the seam from this original raincoat to the PTO at any time. Additionally, he
2007-1506 2
never disclosed his then preference for Vilene SL33 as the preferred adhesive. On
October 29, 1996, the ’779 Patent issued and was later assigned to TALtech.
Esquel is a competing manufacturer, also based in Hong Kong. In 2001, aware
of the ’779 Patent, Esquel decided to produce pucker-free wash-and-wear shirts using
adhesive in the seams. It purchased adhesives from Bemis, another supplier of
adhesive tapes, and subsequently received U.S. Patent No. 7,013,818 for their seam.
On April 29, 2004, Esquel sought a declaratory judgment of non-infringement and
invalidity of the ’779 Patent in the Western District of Washington. The next day,
TALtech sued Esquel for infringement of their ’779 Patent in the Eastern District of
Texas. The two suits were consolidated in the Western District of Washington. In
response to an order to reduce the number of asserted claims, TALtech asserted claims
18, 25, and 26, and certain claims of U.S. Patent No. 5,590,615, a continuation of the
’779 Patent, not at issue in this appeal.
Claim 18 is a method claim dependent on independent claim 1 and dependent
claim 17, reciting the steps to creating the garment seam including the adhesive
bonding element, a “set” stitch, and a “top” stitch. Claim 17 adds an additional set
stitch. Claim 18 adds that step (e) must occur before step (c). Claims 25 and 26 both
depend from product claim 20, which describes the finished seam. Claim 25 adds that
the seam is a “seam of a dress shirt armhole”, while claim 26 adds the additional stitch
of claim 17.
Esquel’s accused seam employs two adhesive tape components, each of which
is formed into a U-shape with one component affixed around the armhole edge of a
sleeve, and the other component affixed around the armhole edge of the shirt body
2007-1506 3
panels. The folding of a portion of a sleeve occurs prior to the placing of the body panel
adjacent to the sleeve, thereby positioning the U-shaped tape along the seam. In the
resulting seam, the U-shaped adhesive comes between the two garment components
being mated, with the lower surface of the bonding element directly contacting the upper
surface of the body panel occurring at the time the tape is sewn to the armhole edge of
the body panel.
The district court construed thirteen terms of the patents-in-suit, and in summary
judgment found claims 25 and 26 not literally infringed, and claim 25 not infringed under
the doctrine of equivalents. The court then held a bench trial and on March 9, 2007,
entered findings of fact and conclusions of law finding the ’779 Patent neither
anticipated nor obvious in view of the prior art. However, the court found that claim 18
was invalid because Wong had not disclosed the best mode in the use of Vilene SL33.
And it found that Wong had committed inequitable conduct during the prosecution of the
’779 Patent for failing to disclose the inspirational raincoat seam, and that the case was
exceptional under 35 U.S.C. § 285 in part because of the inequitable conduct. It
awarded attorneys fees to Esquel. Finally, the court concluded that Esquel’s seams did
not infringe claim 18.
II.
To support a finding of inequitable conduct, there must be clear and convincing
evidence that the applicant made an affirmative misrepresentation of material fact, failed
to disclose material information, or submitted false material information, intending to
deceive the PTO. Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363 (Fed. Cir.
2007). Information is material if there is a substantial likelihood that a reasonable
2007-1506 4
examiner would have considered the information important in deciding whether to allow
the application to issue as a patent. Honeywell Int’l Inc. v. Universal Avionics Sys.
Corp., 488 F.3d 982, 1000 (Fed. Cir. 2007).
In this case, the district court found TAL liable for inequitable conduct because
inventor John Wong had not disclosed the raincoat seam that inspired his invention to
the PTO. However, an inventor is not required to disclose the object or article that
inspired his invention, only material that a reasonable examiner would have considered
important. If the material is cumulative to other disclosed material, as a matter of law,
the inventor is not obligated to disclose it. TAL argues that the undisclosed raincoat
seam was merely cumulative to the German application of Robers, which was disclosed
in the initial filing. Esquel argues that this argument was not raised below. Because
TAL raised the issue in both its pretrial motion for summary judgment and in the
proposed findings of fact and conclusions of law, this issue was preserved for appeal. If
the undisclosed raincoat seam was merely cumulative to Robers, then no inequitable
conduct lies in its nondisclosure.
Esquel also argues that TAL has misled this court by not presenting the entire
sequence of Robers’ method to compare against the sequence as described by the ’779
Patent. It argues that when the entire sequence is compared, it is clear that the Robers
sequence is a distinctly different method from the method of the ’779 Patent. Be that as
it may, the similarity of the two methods is a matter of fact which we can not discern
from the record. Therefore, we vacate the determination of inequitable conduct and
remand the case to the district court to determine whether Robers was, as TAL
suggests, merely cumulative to the undisclosed raincoat seam, thus negating
2007-1506 5
inequitable conduct. We also vacate the order of attorney fees under 35 U.S.C. § 285because the district court based its conclusion that this was an exceptional case at least
in part upon its finding of inequitable conduct.
III.
The district court found claim 18 invalid because the inventor failed to satisfy the
best mode requirement of 35 U.S.C. § 112 by not disclosing in the specification the
preferred use of Vilene SL33 as the adhesive when he knew it at the time of filing. We
have set out a two-pronged test for determining whether an inventor has met the best
mode requirement. “First, the factfinder must determine whether, at the time of filing the
application, the inventor possessed a best mode for practicing the invention.” Eli Lilly
and Co. v. Barr Labs., Inc., 251 F.3d 955, 963 (Fed. Cir. 2001) (citing Chemcast Corp.
v. Arco Indus. Corp., 913 F.2d 923, 927-28 (Fed. Cir. 1990)). This involves a subjective
inquiry whereby the factfinder focuses on the inventor’s state of mind at the time of
filing. Id. “Second, if the inventor possessed a best mode, the factfinder must
determine whether the written description disclosed the best mode such that one
reasonably skilled in the art could practice it.” Id. This involves an objective inquiry
focused on the scope of the claimed invention and the level of skill in the art. Id.Because whether an inventor has met the best mode requirement is a matter of
fact, we review the decision of the district court for clear error. The district court
examined the inventor and found that at the time of filing, he believed that the bonding
element formed an integral part of the present invention. The court also found that after
experimenting with other adhesives, he settled on using Vilene SL33, and contemplated
only using Vilene SL33 as the bonding element. It found that this was the compound he
2007-1506 6
had determined worked best at the time of his application because it was the only
compound he contemplated using in his invention. TAL argues that there is no best
mode, and that the invention requires simply “a quantity of adhesive sufficient to flow
over the garment surfaces as described” and that various commercially available fusible
adhesives will work. However, because the inventor experimented with many
adhesives but settled on a preference for one, we find no clear error in the district
court’s determination that the inventor possessed a best mode at the time of filing.
In satisfaction of the second prong, the district court found that the written
description failed to disclose the use of Vilene SL33 as the bonding element. TAL
responds that there was no evidence that the Vilene products offered better qualities
than other brands, and that the PTO prefers the use of generic names of products.
This, however, is not the proper inquiry. The district court correctly determined that the
best mode found when analyzing the first prong was not present in the written
description. TAL has not explained how the written description teaches one having
reasonable skill in the art the way to practice the best mode as found in the analysis of
the first prong – the use of Vilene SL33. There is no clear error in the district court’s
finding that the written description did not include the best mode as found in the first
prong.
IV.
Even if claim 18 were not invalid for failing to satisfy the best mode requirement,
we agree with the district court that Esquel has not infringed it. Claim 18 of the ’779
Patent is a method claim depending on claim 1, adding a requirement that step (e) of
claim 1 is performed before step (c). Generally, there is no presumption of order, and
2007-1506 7
so a claim with many steps can be infringed by an accused process performing the
claimed steps in any order. However, we will find that the claim requires an ordering of
steps when the claim language, as a matter of logic or grammar, requires that the steps
be performed in the order written, or the specification directly or implicitly requires such
a narrow construction. Altiris, Inc. v. Symantec Corp., 318 F.3d 1363, 1369-70 (Fed.
Cir. 2003) (citing Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d 1323, 1343
(Fed. Cir. 2001)). As the district court found, claim 18 is one such claim. The district
court found that steps (d) and (e) of claim 18 must be performed after step (b). These
relevant steps of claim 18 are as follows:
(b) placing a bonding element having at least a thermal adhesive
component along the seam such that a lower surface of the bonding
element abuts an upper surface of the first garment component;
...
(d) folding the first garment component over the bonding element such
that the upper surface of the first garment component is folded over and
abuts an upper surface of the bonding element;
(e) folding a portion of the second garment component such that a lower
surface of the second garment component abuts the lower surface of the
bonding element
The logic and grammar of the claim make the requirement of an order clear. We
agree with the district court that step (e) requires the presence of the bonding element
because, in order to fold a portion of the second garment component such that its lower
surface abuts the lower surface of the bonding element as required by step (e), the
bonding element must already be in place, for it is placed in step (b). We therefore
affirm the district court’s construction. The district court found that Esquel’s method
practices neither the “placing” limitation of step (b), nor the “folding” limitation of step (e).
TAL has not challenged these factual findings on appeal.
2007-1506 8
V.
TAL also asserts that the district court misconstrued claims 25 and 26, and that
this resulted in a finding of non-infringement; specifically, that the term “abuts” requires
touching and having direct contact. It argues that neither the specification nor a
dictionary definition requires touching when two objects “abut,” but that the definition of
abuts includes, but does not require, touching or direct contact. But the specification,
the drawings, and the language of claims 18, 25, and 26 compel the conclusion that in
this context “abuts” means “touching.”
In every instance of the word, “abuts” describes two surfaces that are in direct
contact with each other. The specification, drawings and claims all state that the lower
surface of the first garment component is touching the upper surface of the second
garment component with direct contact. They also all state that in the completed seam,
the bonding element is touching both the upper surface of the first garment component
and the lower surface of the second garment component with direct contact. In other
words, the bonding element abuts both the first garment component and the second
garment component. This intrinsic evidence supports the conclusion that “abuts” carries
its ordinary meaning of touching.
We reject TAL’s argument that “abuts” contemplates an intervening adhesive
between abutting elements. In support, it points to the specification which reads:
“Preferably, the bonding element 32 comprises an adhesive web which flows during
ironing onto the abutting surfaces of the garment components to create a very
strong bond between the garment components along the garment seam 12.” ’779
Patent at col. 6, ll. 1-5 (emphasis supplied by TAL.) Upon inspection, the abutting
2007-1506 9
surfaces described in the excerpt are those surfaces of the bonding element that
directly touch the upper surface of the first garment component and the lower surface of
the second garment component. They are not, as TAL suggests, the abutting lower
surface of the first garment component and upper surface of the second garment
component.
In fact, as Esquel correctly points out, the only time the patent directly describes
a garment component abutting another garment component, the two components touch
without an intervening element: “a portion of said upper surface of the second garment
component abuts a lower surface of the first garment component along the seam.” ’779
Patent at col. 8, ll. 19-24. The drawings are consistent with this language. The
adhesive is not flowing between the two garment components, leaving their direct
contact intact. We affirm the construction of the district court.
Turning to infringement, we again agree with the district court that Esquel’s seam
does not literally infringe claims 25 and 26 as construed, because Esquel places a
bonding element between the first and second garment components, thus avoiding the
abuts limitation. The Esquel seam under this construction also cannot infringe claim 25
under the doctrine of equivalents because to do so would read the abutting limitation out
of the claim. Therefore, there is no infringement.
2007-1506 10