Npf, Ltd. v. Smart Parts, Inc.

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition
is not citable as precedent. It is a public record.
United States Court of Appeals for the Federal Circuit
05-1273
NPF LTD.,
Plaintiff-Appellant,
v.
SMART PARTS, INC.,
Defendant-Appellee.
__________________________
DECIDED: June 27, 2006
__________________________
Before NEWMAN, DYK, and PROST, Circuit Judges.
PROST, Circuit Judge.
In the United States District Court for the Western District of Wisconsin, a jury
found in favor of Plaintiff-Appellant NPF Ltd. (“NPF”), rejecting the assertions of
Defendant-Appellee Smart Parts, Inc. (“Smart Parts”) that claims 21 and 39 of U.S.
Patent No. 6,615,814 (“the ’814 patent”) are invalid by reason of obviousness.
However, the district court found a reasonable jury could only conclude that clear and
convincing evidence established obviousness and granted judgment as a matter of law
(“JMOL”) in favor of Smart Parts. NPF Ltd. v. Smart Parts, Inc., 04-C-221-S (Feb. 23,
2005) (“JMOL Order”). Because the district court properly concluded that a reasonable
jury could only have found the claims obvious, this court affirms.
BACKGROUND
NPF is the owner of U.S Patent 6,311,682 (“the ’682 patent”) and the ’814 patent.
The ’814 patent, which is the only patent at issue in this appeal, is a continuation-in-part
of the application which issued as the ’682 patent.
The ’814 patent is directed to paintball guns. ’814 patent, col. 1, l. 10. As
described in the patent:
The game of paintball involves participants carrying guns which fire pellets
of ‘paint’ or dye which are fired from the gun and burst upon impact to
leave a mark at the point of impact.
Most paintball guns use a pneumatic system for firing the paintballs using
compressed air or other gas. More recently, such pneumatically operated
guns have begun to be electronically controlled for greater effectiveness.
Id., col. 1, ll. 11-18. The ’814 patent describes a paintball gun with control electronics
enabling the gun to be operated in different modes of firing and allowing the adjustment
of various parameters such as firing rate and number of bursts per second. Id., col. 2, ll.
8-18. The control electronics include a reprogrammable processor programmed with
software to control the gun. See id., col. 5, ll. 8-13. By putting the reprogrammable
processor in communication with a remote terminal, the control software or
programming data in the gun may be updated. Id. In addition, the progress and results
of a game or the gun’s operation or performance may be downloaded through this
communication link to the remote terminal. Id.05-1273 2
Accordingly, the ’814 patent provides for a paintball gun with a data link for
transferring data between the gun and a remote terminal. Id., col. 1, ll. 19-21. In
particular, claim 21, one of the two claims at issue in this appeal, recites:
21. A paintball gun in communication with a remote terminal, the paintball
gun comprising:
an input;
a pneumatic system coupled to the input for firing one or more paintballs;
a memory storing a first set of program instructions;
a processing unit coupled to the memory and the input, the processing
unit executing the first set of program instructions relating to pneumatic
circuit firing mechanism operation data in response to information received
from the input; and
a data communication link coupled to the processing unit, the data
communication link for receiving a second set of program instructions
relating to pneumatic circuit firing mechanism operation data, the second
set of program instructions replacing the first program instructions, the
second set of program instructions controlling the operation of the
pneumatic system.
Id., col. 7, ll. 30-47.
Claim 39, the other claim at issue, recites:
39. A paintball gun in communication with a remote terminal, the paintball
gun comprising:
an input;
a pneumatic system coupled to the input for firing one or more paintballs;
a memory storing a set of program instructions for controlling the valve
dwell time of the pneumatic system;
a processing unit coupled to the memory and the input, the processing
unit executing the set of program instructions relating to controlling the
valve dwell time of the pneumatic system.
Id., col. 8, l. 61 – col. 9, l. 4.
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NPF filed an action for patent infringement alleging that paintball guns
manufactured and sold by Smart Parts infringe claim 10 of the ’682 patent and claims
21 and 39 of the ’814 patent. Smart Parts counterclaimed on grounds of invalidity,
inequitable conduct, and tortuous interference with contract. In its November 17, 2004
order, the district court ruled on cross-motions for summary judgment. After construing
the claims, the court granted NPF’s motions that Smart Parts literally infringed all of the
asserted claims and that they were not invalid due to anticipation. NPF, Ltd. v. Smart
Parts, Inc., 04-C-221-S, slip op. at 9, 14, 20 (Nov. 17, 2004) (“Summary Judgment
Order”). However, the court found that there were genuine issues of material fact
precluding a grant of summary judgment to either party regarding invalidity due to
obviousness, inequitable conduct, and tortuous interference. Id., slip op. at 22, 25-26.
The issue of obviousness was tried to a jury which returned general verdicts
finding claim 10 of the ’682 patent invalid for obviousness, but that claims 21 and 39 of
the ’814 patent were not obvious. After the district court found no inequitable conduct or
tortuous interference with contract, the jury awarded damages for infringement.
Following the entry of judgment, Smart Parts filed a renewed motion for JMOL,
asserting that claims 21 and 39 of the ’814 patent were obvious and that NPF had
committed inequitable conduct in prosecution of the ’814 and ’682 patents. The district
court’s order granted the motion in part, finding claims 21 and 39 of the ’814 patent
invalid for obviousness as a matter of law.1 JMOL Order, slip op. at 8.
1
Although the district court also purported to grant Smart Parts’ motion for
JMOL that claim 10 of the ’682 patent was invalid, that claim had already been found
invalid by the jury. JMOL Order, slip op. at 8.
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NPF timely appealed the district court’s grant of JMOL that claims 21 and 39 of
the ’814 patent are invalid for obviousness. This court has jurisdiction under 28 U.S.C.
§ 1295(a)(1).
DISCUSSION
“The grant or denial of a motion for judgment as a matter of law is a procedural
issue not unique to patent law, reviewed under the law of the regional circuit in which
the appeal from the district court would usually lie.” Summit Tech., Inc. v. Nidek Co.,
363 F.3d 1219, 1223 (Fed. Cir. 2004). Under Seventh Circuit law, a district court's
decision granting JMOL is reviewed de novo. Harper v. Albert, 400 F.3d 1052, 1061
(7th Cir. 2005). JMOL against a party is appropriate when “a party has been fully heard
on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to
find for that party on that issue.” Fed. R. Civ. P. 50(a). As this court recently stated:
The party requesting the JMOL must show that substantial evidence did
not support the jury’s findings, where substantial evidence is such relevant
evidence from the record taken as a whole as might be accepted by a
reasonable mind as adequate to support the finding under review. This
court must also consider all the evidence before the jury and draw all
reasonable inferences in favor of the prevailing party on that issue, i.e.,
the non-movant.
Princeton Biochemicals, Inc. v. Beckman Coulter, Inc., 411 F.3d 1332, 1336 (Fed. Cir.
2005).
On appeal, NPF asserts that the district court erred in granting JMOL that claims
21 and 39 of the ’814 patent are invalid as obvious. Our obviousness analysis proceeds
in two steps: first we construe the claims at issue; we then determine whether
substantial evidence supported the jury’s verdict that claims 21 and 39 of the ’814
patent are not invalid for obviousness.
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I.
The first step in an obviousness analysis is to determine the meaning and scope
of each claim. Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1351
(Fed. Cir. 2001). “Only when a claim is properly understood can a determination be
made whether the claim . . . renders obvious the claimed invention.” Id.Here, the district court construed two disputed terms in claims 21 and 39 of the
’814 patent and instructed the jury to use these meanings in its deliberations. The term
“data communication link” in claim 21 was construed as “a link for reprogramming a
microprocessor.” The term “in communication with a remote terminal” in the preamble
of both claims was construed as being broader than the data communication link
limitation and to include both reprogramming and bi-directional data exchange. Neither
of these claim constructions has been challenged on appeal.
Additional issues regarding the scope of the claims are undisputed by the parties
but are relevant to our obviousness analysis. First, it is undisputed that the claimed
paintball gun need not contain a data communication link that is externally accessible.
Neither the express language of the claims nor the claim construction of the “data
communication link” term requires such a limitation. In addition, one inventor on the
patent, John Rice, asserted that his claims covered an accused paintball gun which has
to actually be taken apart to be able to reprogram it.
Further, it is undisputed that the “data communication link” element may be
satisfied by the pins on the microprocessor itself. Mr. Rice testified that he understood
the “data communication link” element of claim 21 of the ’814 patent to cover “a
communications port on the microprocessor that provides the ability to reprogram.”
05-1273 6
(J.A. 708.) He also understood that all reprogrammable microprocessors have such a
communications port.2 Combining the inventor’s two understandings of the scope of the
claims, it is clear that a paintball gun with the reprogrammable processor required by
the claims also inherently contains the data communication link limitation.
Finally, it is undisputed that the claims encompass reprogramming a paintball
gun for any purpose. Mr. Rice testified that the reprogrammability element included
reprogramming in the factory, in the field, in a consumer’s retail shop and also by the
consumer. The ’814 patent also notes various uses of a reprogrammable processor
after sale of the gun such as transferring data between guns, displaying parameters
relating to a gun’s operation, or uploading programming data or software upgrades to
the gun. ’814 patent, col. 5, ll. 8-15. In addition, the claim language itself does not limit
the claims to reprogramming by a consumer or only after sale of a consumer device, but
encompasses all reprogramming. Most importantly, for purposes of this appeal, the
claims cover use of reprogrammable processors in paintball guns during development
of the guns.
We next apply these claim constructions in our obviousness analysis.
II.
Determining obviousness begins with the standard set out in 35 U.S.C. § 103(a):
A patent may not be obtained . . . if the differences between the subject
matter sought to be patented and the prior art are such that the subject
matter as a whole would have been obvious at the time the invention was
2
Reprogrammable processors largely perform the same tasks as single
burn microprocessors. However, single burn processors can be programmed only
once. If the set of program instructions stored on a single burn processor is defective,
that processor chip must be replaced. Reprogrammable processors, on the other hand,
can be reprogrammed to replace the instructions stored on them.
05-1273 7
made to a person having ordinary skill in the art to which said subject
matter pertains.
Obviousness of a claim under § 103(a) is a legal conclusion which depends on at least
four underlying factual determinations: (1) the scope and content of the prior art; (2) the
differences between the claimed invention and the prior art; (3) the level of ordinary skill
in the art; and (4) any relevant secondary considerations. See Graham v. John Deere
Co. of Kansas City, 383 U.S. 1, 17 (1966). When claim elements are found in more
than one prior art reference, the fact finder must determine “whether a person of
ordinary skill in the art, possessed with the understandings and knowledge reflected in
the prior art, and motivated by the general problem facing the inventor, would have
been led to make the combination recited in the claims.” In re Kahn, 441 F.3d 977, 988
(Fed. Cir. 2006). “What the prior art teaches, whether it teaches away from the claimed
invention, and whether it motivates a combination of teachings from different references
are questions of fact.” In re Fulton, 391 F.3d 1195, 1199-1200 (Fed. Cir. 2004). The
factual determinations underpinning a jury’s finding of non-obviousness are reviewed
under the substantial evidence/reasonable juror standard. Richardson-Vicks, Inc. v.
The Upjohn Co., 122 F.3d 1476, 1479 (Fed. Cir. 1997). However, this court reviews the
legal decision of obviousness without deference. Id.The district court analyzed the evidence regarding obviousness of claims 21 and
39 in both its summary judgment order and its order granting JMOL. In the summary
judgment order, the court found that the Angel V6 prior art product disclosed all
elements of these claims except for the element common to both claims that the gun be
“in communication with a remote terminal” and the element of claim 21 requiring a data
communication link for replacing program instructions. Summary Judgment Order, slip
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op. at 22. In addition, the court found that “it was known in the art to use
reprogrammable microprocessors such as those in the accused devices which
inherently include a communications port,” but that prior art paintball guns used one
time programmable processors because they were lower in cost. Id. Thus, the only fact
question left for trial was “whether in light of the prior art one of ordinary skill in the art
would have had the motivation to combine the reprogrammable microprocessor with the
prior art paintball gun.” JMOL Order, slip op. at 4. Correspondingly, the only issue after
trial in the JMOL determination was “whether a reasonable fact finder could only
conclude that clear and convincing evidence established that there was a suggestion or
motivation to one of ordinary skill in the art to make the combination.” Id., slip op. at 5.
The court found that the “evidence was overwhelming that one of ordinary skill in the art
would have known and been motivated to employ a reprogrammable microprocessor at
least in developmental paintball guns.” Id. The court explained its analysis of
obviousness:
The prior art at trial which led to the Court’s finding of obviousness
concerned teachings to use reprogrammable microprocessors in
developmental products. This prior art, coupled with the consistent
testimony of witnesses engaged in product development that they knew to
use reprogrammable microprocessors in developmental products,
including paintball guns, rendered the invention obvious.
NPF Ltd. v. Smart Parts, Inc., 04-C-221-S, slip op. at 3 (June 2, 2005) (explaining the
JMOL ruling while denying Smart Parts’ motion for a finding of an exceptional case).
The court also found that no other evidence could negate the conclusion that it was
obvious to combine a reprogrammable processor with a paintball gun in developing the
guns. Id., slip op. at 6-8.
05-1273 9
NPF argues that the district court erred in granting JMOL because substantial
evidence supported a jury finding of non-obviousness. First, NPF argues that Smart
Parts did not prove a motivation to combine a reprogrammable processor with a
paintball gun. Second, it points to its evidence of secondary considerations and argues
that the jury could have relied on this evidence to find non-obviousness. Discussing
each of these arguments in turn, we find that the district court properly granted JMOL.
A.
We first discuss whether a reasonable fact finder could only conclude that clear
and convincing evidence established that there was a motivation to one of ordinary skill
in the art to make the claimed combination. Before reaching this issue, we must first
determine the understandings and knowledge reflected in the prior art. We agree with
the district court that the prior art before the jury showed that reprogrammable
processors were known for use in the development of products containing
microprocessors. Specifically, a treatise entered into evidence for the jury’s
consideration stated:
Most engineering projects use [reprogrammable microprocessors] for their
development phase. These erasable and reprogrammable memories will
allow a part to be reused instead of thrown away. When the part goes into
production, the EPROM parts can be replaced with one-time
programmable (OTP) devices . . . . [T]he OTP parts are cheaper than the
EPROM parts to manufacture thus reducing product costs.
(J.A. 45.) This prior art shows the knowledge of those who did product development
using microprocessors. Such persons skilled in the art used reprogrammable
processors during development because the instructions stored on the processors may
undergo many changes before the instructions are finalized. If a one-time
programmable processor is used, it must be discarded if it has a problem or must be
05-1273 10
changed. By using a reprogrammable processor, the same processor can
accommodate many revisions of software until the developers determine the final
software version for customer sale. When the developers finalize the software for the
processors, they put the software on lower cost one-time programmable processors for
consumer sale. This use of reprogrammable processors was therefore well-known at
the time of the patents in suit. We agree with the district court that the issue is whether
a person of ordinary skill in the development of paintball guns at the time of the
invention would have been motivated to use a reprogrammable processor in this way
during development.
NPF provides several arguments as to why Smart Parts did not prove a
motivation to combine. First, NPF argues that Smart Parts’ expert did not provide any
evidence on this issue. Smart Parts’ expert stated: “It’s my opinion that by the end of
1997 certainly microcontrollers could have been designed into paintball guns or were
described in paintball gun prior art references. Also microprocessors that could have
been designed into paintball guns could be reprogrammed either remotely or externally
to update their program instructions.” (J.A. 541.) We agree with NPF that such
testimony is irrelevant to the motivation to combine analysis. What “could have been”
merely employs hindsight to determine whether the claimed invention was technically
feasible at the time of the invention. Such testimony does not address the central
question in the motivation to combine inquiry—“whether a person of ordinary skill in the
art . . . would have been led to make the combination recited in the claims.” Kahn, 44
F.3d at 988 (emphasis added). Merely knowing, years later, that someone could have
successfully made the combination does not aid in determining whether at the time of
05-1273 11
the invention, one of skill in the art would have been motivated to do so. NPF is
therefore correct that Smart Parts’ expert did not provide the requisite evidence of
motivation to combine.
However, the district court did not rely on Smart Parts’ expert’s testimony in
concluding that a reasonable jury could only have found there was a motivation to
combine. Rather, the court relied on the evidence that actual electronics designers
used reprogrammable processors in paintball guns during product development before
the priority date to conclude there was a motivation to make that combination. JMOL
Order, slip op. at 6-7. Therefore, on appeal, NPF next argues that evidence that certain
developers used reprogrammable processors during paintball gun development could
not properly serve as the basis for a finding of motivation to combine because the use
was not sufficiently public to constitute prior art. But NPF’s argument addresses the
wrong issue. Although these uses may not have constituted prior art, they nevertheless
can be evidence of a motivation to combine. See Kahn, 441 F.3d at 987-88. Evidence
that those of ordinary skill in the art in fact combined the prior art teachings as claimed
is certainly evidence that they were motivated to do so. Such evidence shows the
knowledge of the skilled artisan at the time of the invention, which can provide the basis
for a motivation to combine. See id. at 989. Evidence that multiple developers of
microprocessors for paintball guns used reprogrammable processors shows that it was
within the knowledge of one of ordinary skill in the art to use reprogrammable
processors during development.
Even if relevant to the motivation to combine inquiry, NPF argues that the jury
could have chosen not to believe that the developers who testified actually used
05-1273 12
reprogrammable processors during their development. However, developers at Smart
Parts and at third party developer PneuVentures provided uncontradicted testimony of
their use of reprogrammable processors prior to this patent’s priority date. For example,
Michael Scott, a third-party contractor who developed electronics for a Smart Parts’
Shocker paintball gun, testified that he designed and fabricated a prototype electronics
board which “included a reprogrammable microprocessor with downloaded program
code.” (J.A. 459.) A paintball gun designer for PneuVentures, a competitor who never
introduced a commercial gun, testified that he “[a]bsolutely” used reprogrammable
processors in development guns he made in the first half of 1997. Both of these
witnesses, undisputed by NPF, clearly showed those developing electronics for paintball
guns were actually motivated to use a reprogrammable processor during development.
Further, NPF does not point to substantial evidence supporting a jury’s finding
that there was no motivation for paintball gun developers to use reprogrammable
processors during development. The inventor testified that it would “surprise” him to
learn that other paintball gun manufacturers were also using reprogrammable
processors during the development stage. Such evidence is not sufficient to support
the jury’s verdict. NPF also points to its expert’s testimony that there was no motivation
to combine reprogrammable processors with paintball guns. NPF’s expert, Dr. Turcic,
opined that the advancements in the ’814 patent were the introduction of “external
communication and reprogramming capability” to paintball guns. (J.A. 757.) He then
provided uncontradicted testimony that nothing in the prior art provided motivation for
someone to add these features to a paintball gun at the time of the patent. (Id.)
However, nowhere does Dr. Turcic’s testimony address the use of reprogrammable
05-1273 13
processors during development of a paintball gun. In addition, as previously discussed,
the claim construction does not require any external communication to a processor for
reprogramming. Therefore, Dr. Turcic’s testimony is not relevant to the issue before
us—whether there was a motivation to use reprogrammable processors during
development of a paintball gun.
The claims undisputedly cover the use of reprogrammable processors for
development of paintball guns. Developers of paintball guns were undisputedly actually
motivated to use reprogrammable processors during development. Therefore, the
district court correctly concluded that a reasonable fact finder could only conclude that a
person of ordinary skill in the art would have been motivated to combine a
reprogrammable microprocessor with a paintball gun during development.
B.
NPF argues that the jury’s verdict declining to find claims 21 and 39 obvious
could also have been based on substantial evidence NPF presented of secondary
considerations of non-obviousness. For example, NPF shows that it presented ample
testimony showing that the paintball gun industry was specifically avoiding using
reprogrammable microprocessors in paintball guns sold to consumers, therefore
teaching away from this combination. However, the evidence shows that the industry
was concerned about allowing consumers to reprogram their paintball guns, due to
safety concerns. The evidence presented by NPF therefore may have been relevant to
whether it was obvious to use the claimed invention in sale to consumers because it
suggests that the industry was teaching away from such use. However, the evidence
does not address whether the industry taught away from using reprogrammable
05-1273 14
processors during development of paintball guns and therefore is not relevant to the
obviousness analysis here.
NPF’s evidence of commercial success also could not have overcome the
conclusion that the claims at issue are obvious. NPF cannot counter the showing of
obviousness by its evidence of commercial success “unless it can show that the
commercial success of the product results from the claimed invention.” J.T. Eaton &
Co. v. Atl. Paste & Glue Co., 106 F.3d 1563, 1571 (Fed. Cir. 1997). “Furthermore, the
asserted commercial success of the product must be due to the merits of the claimed
invention beyond what was readily available in the prior art.” Id. NPF points to no
evidence indicating that the commercial success of the Smart Parts paintball guns was
due to the development aspect of the claims at issue. Therefore, NPF’s evidence of
commercial success cannot rebut the evidence of obviousness presented by Smart
Parts.
CONCLUSION
Both the evidence presented at trial and the arguments made by NPF on appeal
indicate that the jury may have been swayed to find claims 21 and 39 of the ’814 patent
non-obvious based on evidence that the use of reprogrammability features by
consumers of paintball guns was not obvious. However, the claims at issue clearly
cover the use of reprogrammable processors in developmental paintball guns. As a
reasonable jury could only have concluded that this use was obvious, the district court
properly granted JMOL that claims 21 and 39 of the ’814 patent were obvious as a
matter of law.
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