MAG Aerospace Industries, Inc. v. B/E Aerospace, Inc.

United States Court of Appeals
for the Federal Circuit
______________________
MAG AEROSPACE INDUSTRIES, INC., NKA MAG
AEROSPACE INDUSTRIES, LLC,
Plaintiff-Appellant
v.
B/E AEROSPACE, INC.,
Defendant-Cross-Appellant
______________________
2015-1370, 2015-1426
______________________
Appeals from the United States District Court for the
Central District of California in No. 2:13-cv-06089-SJO-
FFM, Judge James S. Otero.
______________________
Decided: March 23, 2016
______________________
STEVEN MOORE, Kilpatrick Townsend & Stockton
LLP, San Francisco, CA, argued for plaintiff-appellant.
Also represented by ERWIN CENA, San Diego, CA; ADAM
HOWARD CHARNES, Winston-Salem, NC; CANDICE C.
DECAIRE, ALYSON L. WOOTEN, Atlanta, GA; MATTHEW
CHRISTIAN HOLOHAN, Denver, CO; WILLIAM E. MOSLEY,
Menlo Park, CA.
ANDREI IANCU, Irell & Manella LLP, Los Angeles, CA,
argued for defendant-cross-appellant. Also represented by
2 MAG AEROSPACE INDUSTRIES, INC. v. B/E AEROSPACE, INC.
RICHARD BIRNHOLZ, MORGAN CHU, BENJAMIN HABER,
HARRY MITTLEMAN, MELISSA SEDRISH RABBANI.
______________________
Before PROST, Chief Judge, MAYER and REYNA, Circuit
Judges.
PROST, Chief Judge.
These appeals concern vacuum toilets, such as those
that are commonly found on commercial aircrafts. Plain-
tiff-Appellant MAG Aerospace Industries, LLC (“MAG”)
sued B/E Aerospace (“B/E”), alleging infringement of U.S.
Patent Nos. 6,536,054 (“’054 patent”), 6,536,055 (“’055
patent”), and 6,353,942 (“’942 patent”) in the United
States District Court for the Central District of California.
The district court granted summary judgment of nonin-
fringement on all patents, from which MAG timely ap-
peals. The district court also ruled that the doctrine of
assignor estoppel barred B/E from arguing that the as-
serted patents are invalid, and B/E cross-appeals from
that ruling. For the reasons stated below, we affirm the
district court’s rulings.
BACKGROUND
The patents-in-suit relate to the quick repair of vacu-
um toilets such as those used in commercial aircraft.
They describe technology that facilitates maintenance and
service of vacuum toilets and minimizes vehicle downtime
through the use of toilet components that are “line re-
placeable units” (“LRUs”)—single modules that are tar-
geted for easy replacement in the field. The ’054 patent
describes a vacuum toilet that includes a “waste recepta-
cle” (i.e., toilet bowl) that is “toollessly inserted into and
removed from the installed position independent of the
frame,” and thus can be easily and quickly replaced. ’054
patent col. 4 ll. 47–67. The ’055 and ’942 patents claim
the use and repair of LRUs within vacuum toilets. Specif-
ically, the ’055 patent requires two LRUs: (1) a waste
MAG AEROSPACE INDUSTRIES, INC v. B/E AEROSPACE, INC. 3
receptacle, and (2) a “valve set” that includes “at least two
of the discharge valve, rinse fluid valve, and flush control
unit.” ’055 patent col. 11 ll. 30–33. The ’942 patent,
which is the parent of the ’055 patent, discloses a modular
vacuum toilet in which the toilet bowl is supported on top
of a structural support frame by an “out-turned flange”
around the opening of the toilet bowl. ’942 patent col. 11
ll. 6–7.
MAG sued B/E, alleging direct and indirect infringe-
ment of the claims of the asserted patents. On November
21, 2013, B/E counterclaimed on the basis of nonin-
fringement and invalidity. In response to B/E’s invalidity
counterclaim, MAG asserted the affirmative defense of
assignor estoppel.
On July 24, 2014, the district court issued a Markman
order construing several terms of the asserted patents.
Relevant here, from the ’054 patent, the district court
construed the term “toollessly” to mean “without the use
of any tools.” J.A. 38. From the ’055 patent, the district
court construed the term “line replaceable unit” to mean
“a single module targeted for easy replacement in the
field.” J.A. 41. Finally, from the ’942 patent, the district
court construed “an out-turned flange supported by the
top of the support structure” to mean an “outside rim or
edge turned away from the sidewall, transferring loads to
the top of the support structure.” J.A. 34.
On December 8, 2014, B/E moved for summary judg-
ment of noninfringement, and MAG moved for summary
judgment of no invalidity on the basis of assignor estop-
pel. On January 23, 2015, the district court granted B/E’s
motion for summary judgment of noninfringement. The
district court also granted MAG’s motion for summary
judgment of no invalidity due to assignor estoppel.
Both parties timely appeal. We have jurisdiction un-
der 28 U.S.C. § 1295(a)(1).
4 MAG AEROSPACE INDUSTRIES, INC. v. B/E AEROSPACE, INC.
DISCUSSION
We review a district court’s grant of summary judg-
ment under the law of the regional circuit, which here is
the Ninth Circuit. Memorylink Corp. v. Motorola Sols.,
Inc., 773 F.3d 1266, 1270 (Fed. Cir. 2014). The Ninth
Circuit reviews the grant of summary judgment de novo.
Greater Yellowstone Coal. v. Lewis, 628 F.3d 1143, 1148
(9th Cir. 2010). We review a district court’s ruling of
assignor estoppel for abuse of discretion. Pandrol USA,
LP v. Airboss Ry. Prods., Inc., 424 F.3d 1161, 1165
(Fed. Cir. 2005).
MAG argues that the district court erred in granting
summary judgment of noninfringement of the asserted
patents. B/E argues that the district court erred in ruling
that it was barred from asserting invalidity under the
doctrine of assignor estoppel. We address each of these
arguments in turn.
I. SUMMARY JUDGMENT OF NONINFRINGEMENT
The district court granted B/E’s motion for summary
judgment of noninfringement of the ’054, ’055, and ’942
patents, holding that (1) the toilet bowls in B/E’s toilets
cannot be “toollessly” replaced; (2) the “valve set” in B/E’s
vacuum toilets is not an LRU; and (3) B/E’s toilet bowl
does not include an “out-turned flange supported by the
top of the support structure.” For the reasons discussed
below, we affirm the district court’s rulings.
A. The ’054 Patent
MAG argues that the district court erred in ruling on
summary judgment that B/E’s toilet bowl cannot be
replaced “toollessly” as required by the ’054 patent. MAG
points to B/E’s technical documents and the testimony of
B/E’s former Director of Sales and Marketing, Paul
Neary, which it says show that B/E’s toilet bowls can be
replaced either manually or with the use of a coin. For
example, B/E’s documents state, “The toilet is designed to
MAG AEROSPACE INDUSTRIES, INC v. B/E AEROSPACE, INC. 5
be dis-assembled, assembled, maintained, and serviced
without tools.” J.A. 3110 (emphasis added). MAG points
out that, in fact, twenty-nine of B/E’s technical documents
provided to customers make that assertion. Moreover,
MAG relies on Mr. Neary’s testimony that he “definitely”
informed B/E’s customers that the toilet bowl is designed
to be replaced and serviced without tools. J.A. 3083.
Thus, MAG contends that there is a genuine issue of
material fact as to whether B/E’s toilet bowls meet the
“toollessly” replaceable limitation of the ’054 patent.
MAG is incorrect. There is no dispute that B/E’s toilet
bowl is attached to its frame with two screw fasteners.
And the record evidence showed that to release the screws
and remove the bowl, some kind of tool is necessary. In
fact, MAG presented no evidence that the screw fasteners
could be turned using only one’s hands (e.g., using a
fingernail). Indeed, B/E points out that every fact witness
who was asked testified that a tool, such as a coin or a
screwdriver, is necessary to release the screws. The B/E
documents on which MAG relies do not create a genuine
issue of material fact on this point. Instead, as the dis-
trict court properly determined, those promotional and
non-technical documents were simply “using a definition
of ‘tools’ that excludes coins.” J.A. 16. The unrebutted
evidence shows that the reference to “without tools” was a
typographical error. Moreover, MAG’s reliance on an out-
of-context snippet of Mr. Neary’s testimony is unpersua-
sive. When Mr. Neary was asked more directly about
whether the toilet bowl could be removed manually, he
clearly stated that a tool (like a coin) is required.
The question then remains whether a coin is a tool.
In its Markman order, the district court construed “tool-
lessly” to mean “without the use of any tools.” J.A. 39, 41.
The district court made clear that even unconventional
tools would be considered tools in the context of the ’054
patent, stating that “the claims and specification never
describe the types of tools that could or could not be used
6 MAG AEROSPACE INDUSTRIES, INC. v. B/E AEROSPACE, INC.
to remove or install the toilet, nor does the patent make
any reference to mechanics.” J.A. 39. Importantly, as
B/E points out, MAG does not challenge the district
court’s claim construction. Although MAG devotes a
paragraph under its standard of review section to claim
construction, MAG does not clearly advocate for review of
the construction of “toollessly.” MAG instead argues that
the district court never fully resolved the question of
whether a coin qualifies as a tool within the meaning of
the ’054 patent and that a genuine issue of material fact
remains.
MAG is again incorrect. As MAG has framed the is-
sue, the question is not whether the district court proper-
ly determined that “toollessly” means “without the use of
any tools,” but instead is whether that construction leaves
open the question of whether a coin is a tool. It is clear
based on the back and forth at the claim construction
hearing that the district court did fully resolve that
question. The district court specifically rejected MAG’s
proposed construction that “toollessly” means “without
the use of conventional mechanics’ tools” and instead
stated that the specification clearly indicates that the
invention of the patent is that no tools of any kind are
necessary. Thus, the district court previously determined
that a coin is a tool and, because MAG is not challenging
the construction itself, the district court did not err in
granting summary judgment of noninfringement.
B. The ’055 Patent
MAG next argues that the district court erred in
granting summary judgment of noninfringement of the
’055 patent on the basis that the “valve set” in the accused
B/E toilets is not an LRU. MAG points to B/E technical
documents that it contends show that B/E designed its
“valve set” to address the problem of complicated valve
replacement by making the valve set easy to remove from
the toilet. MAG also notes that a B/E video further con-
MAG AEROSPACE INDUSTRIES, INC v. B/E AEROSPACE, INC. 7
firms that the valve set consisting of the discharge valve
and the flush control unit is designed to be easily removed
and replaced. Thus, MAG contends that summary judg-
ment was inappropriate.
The district court previously construed LRU to be “a
single module targeted for easy replacement in the field.”
J.A. 41. MAG says that the “discharge valve” and the
“flush control unit” comprise the valve set in B/E’s toilets.
The question is thus whether the discharge valve and the
flush control unit together act as a “single module target-
ed for easy replacement in the field.” J.A. 41. In support
of its position, MAG only identifies the B/E video; but, as
the district court noted, that video does not clearly identi-
fy the flush control unit. In contrast, B/E presented
significant evidence that the discharge valve and the
flush control unit are removed separately, with the flush
control unit being removed before the discharge valve.
Indeed, MAG admits that B/E’s maintenance manuals do
not provide instructions for removing and replacing the
discharge valve and the flush control unit as a single
module. MAG also presented no evidence that the two
components have ever been removed at the same time by
a customer. Thus, the district court properly concluded
that there was no genuine material dispute as to whether
the discharge valve and the flush control unit operated as
a single module targeted for easy replacement. The grant
of summary judgment of noninfringement of the ’055
patent was thus correct.
C. The ’942 Patent
Finally, MAG contends that the district court erred in
granting summary judgment of noninfringement of the
’942 patent, arguing that the district court incorrectly
found that B/E’s toilets do not have the claimed “out-
turned flange.” The court previously construed “out-
turned flange supported by the top of the support struc-
ture” to mean “outside rim or edge turned away from the
8 MAG AEROSPACE INDUSTRIES, INC. v. B/E AEROSPACE, INC.
sidewall, transferring loads to the top of the support
structure.” J.A. 34. Again, MAG does not appear to be
challenging this construction, but instead argues that the
district court applied a different construction at summary
judgment and that, under the proper construction, there
is a genuine material dispute as to whether B/E’s toilets
infringe.
MAG identified two structures that it claims are out-
turned flanges on B/E’s toilet bowl: (1) a first edge located
at the base of the vertical columns on the sidewall of B/E’s
toilet bowl (called “ribs”); and (2) a second edge located
within a groove machined into these vertical columns.
Using finite element analysis, MAG’s expert testified
that the identified edges contact and transfer loads to the
top of the support structure of the B/E toilet. MAG also
relies on other B/E documents, including a computer-
aided design (“CAD”) depicting an “edge” at which load
was transferred from the bowl to the frame. MAG’s
expert thus explained that both the first and second edges
enable B/E’s toilet bowl to mate with and transfer loads to
the top of the support structure.
As the district court concluded, however, neither edge
meets the out-turned flange limitation of the ’942 patent.
The “first edge” identified by MAG is merely the bottom of
the vertical columns and not a flange. As to the CAD
drawing, there is no evidence that it represented the
actual product marketed and sold. Instead, B/E provided
evidence that its toilet contains a gap of approximately
1/8th of an inch between the vertical column and the
frame; thus, the “first edge” does not actually touch the
top of the support structure and cannot transfer load to
the top of the support structure.
As for the second edge, it is merely a slot within the
vertical columns and not an “outside rim or edge turned
away from the side wall” as required by the district
MAG AEROSPACE INDUSTRIES, INC v. B/E AEROSPACE, INC. 9
court’s claim construction. J.A. 34. Thus, the second edge
also does not meet the claimed limitation.
MAG also argues that the district court improperly
revised its construction at summary judgment by requir-
ing that the flange be a “flat horizontal piece” and that
the “top of the support structure” be limited to a horizon-
tally flat structure with uniform elevation. Those argu-
ments are without merit. The district court said nothing
about uniform elevation; instead, it merely concluded that
the edges identified by MAG did not touch the top of the
support structure. Similarly, although the district court
referenced the lack of a flat horizontal piece, the court
was not requiring that the flange be such a piece; instead,
the court properly compared the slot in the ribs (the
“second edge”) to the construction of “out-turned flange”
and found that the limitation was not met. The district
court thus did not improperly revise its constructions at
summary judgment and, instead, correctly concluded that
B/E’s toilets did not infringe the ’942 patent.
Because the district court properly determined that
there were no genuine issues of material fact as to nonin-
fringement of any of the asserted patents, we affirm the
district court’s grant of summary judgment of nonin-
fringement.
II. ASSIGNOR ESTOPPEL
In addition to granting B/E’s motion for summary
judgment of noninfringement, the district court also
granted MAG’s motion for summary judgment of no
invalidity. B/E cross-appeals from that ruling, contending
that the district court improperly applied assignor estop-
pel to bar it from asserting that the patents-in-suit are
invalid.
Assignor estoppel is an equitable remedy that prohib-
its an assignor of a patent, or one in privity with an
assignor, from attacking the validity of that patent when
10 MAG AEROSPACE INDUSTRIES, INC. v. B/E AEROSPACE, INC.
he is sued for infringement by the assignee. Diamond Sci.
Co. v. Ambico, Inc., 848 F.2d 1220, 1224 (Fed. Cir. 1988).
“Privity, like the doctrine of assignor estoppel itself, is
determined upon a balance of the equities.” Shamrock
Techs., Inc. v. Med. Sterilization, Inc., 903 F.2d 789, 793
(Fed. Cir. 1990). As we previously said in Shamrock
Technologies,
If an inventor assigns his invention to his employ-
er company A and leaves to join company B,
whether company B is in privity and thus bound
by the doctrine will depend on the equities dictat-
ed by the relationship between the inventor and
company B in light of the act of infringement. The
closer that relationship, the more the equities will
favor applying the doctrine to company B.
Id. Here, one of the inventors of the patents-in-suit, Mark
Pondelick, now works for B/E. Mr. Pondelick assigned the
patents to his former employer, who in turn assigned
them to MAG. The district court concluded that Mr.
Pondelick was in privity with B/E and thus that assignor
estoppel applies to bar B/E from attacking the validity of
the patents. The district court did not clearly err in its
determination.
The district court analyzed a number of factors identi-
fied in Shamrock Technologies to determine whether a
finding of privity was appropriate: (1) the assignor’s
leadership role at the new employer; (2) the assignor’s
ownership stake in the defendant company; (3) whether
the defendant company changed course from manufactur-
ing non-infringing goods to infringing activity after the
inventor was hired; (4) the assignor’s role in the infring-
ing activities; (5) whether the inventor was hired to start
the infringing operations; (6) whether the decision to
manufacture the infringing product was made partly by
the inventor; (7) whether the defendant company began
manufacturing the accused product shortly after hiring
MAG AEROSPACE INDUSTRIES, INC v. B/E AEROSPACE, INC. 11
the assignor; and (8) whether the inventor was in charge
of the infringing operation. B/E argues that many of
these factors support its position that assignor estoppel
should not apply. For example, B/E notes that Mr. Pon-
delick joined B/E after the decision to develop the accused
toilet was made and that there was never a plan to con-
duct infringing activities; in fact, the point of hiring Mr.
Pondelick was to avoid infringement. B/E also points out
that this case is unlike the others where privity was found
because Mr. Pondelick has a negligible financial interest
in B/E. Finally, B/E says that the district court should
not have disregarded the fact that Mr. Pondelick was
making good faith efforts to avoid infringement.
The district court acknowledged all of B/E’s argu-
ments but found on balance that assignor estoppel was
appropriate. The district court’s conclusion is not clearly
erroneous. As the district court found, many of the
Shamrock factors weigh in favor of finding privity. For
example, the district court noted that B/E used Mr. Pon-
delick’s knowledge to conduct the activities that are now
alleged to be infringing; that he was hired specifically to
develop the toilets that are accused of infringement; and
that he was the Director of Engineering for B/E during his
time as a consultant and later became Vice President and
General Manager of B/E EcoSystems, the division that
manufactured the accused toilets. Based on the extent of
Mr. Pondelick’s involvement in the alleged infringing
activity and the fact that B/E “availed itself of [Mr. Pon-
delick’s] knowledge and assistance” to conduct the alleged
infringement, Intel Corp. v. U.S. Int’l Trade Comm’n, 946
F.2d 821, 839 (Fed. Cir. 1991), we cannot say that the
district court abused its discretion in finding that assignor
estoppel applies. We therefore affirm the district court’s
ruling that B/E is barred under the doctrine of assignor
estoppel from arguing that the patents-in-suit are invalid.
12 MAG AEROSPACE INDUSTRIES, INC. v. B/E AEROSPACE, INC.
CONCLUSION
For the foregoing reasons, we affirm the district
court’s rulings.
AFFIRMED
COSTS
Each party shall bear its own costs.