DocketNumber： 2011-1038, 2011-1046
Judges： Bryson, Linn, Reyna
Filed Date： 10/3/2011
Status： Precedential
Modified Date： 11/5/2024
Opinion for the court filed by Circuit Judge LINN. Dissenting opinion filed by Circuit Judge REYNA.
Following the entry of judgment of non-infringement and no invalidity in a lawsuit brought against Bunzl Processor Distribution, LLC (“Bunzl”) and Bunzl USA, Inc. (no longer a party) by Bettcher Industries, Inc. (“Bettcher”) in the Northern District of Ohio for infringement of U.S. Patent No. 7,000,325 (“'325 patent”), Bunzl appeals from a denial of its motion for entry of judgment as a matter of law of invalidity or for a new trial on invalidity. Bettcher cross-appeals from the district court’s refusal to order a new trial on infringement following the jury’s verdict of non-infringement. For the reasons discussed below, we affirm in part, vacate in part, and remand.
I. Background
A. Bettcher’s '325 Patent
Bettcher’s asserted '325 patent, entitled “Low Friction Rotary Knife,” is directed to a power operated knife used principally in the meat packing and other commercial food processing industries and containing a handle on which is supported an annular rotating blade assembly. The handle includes a motor and a gear train, and the rotating blade assembly contains an annular blade support housing attached to the handle and an annular blade rotatably carried by the housing. '325 patent col.l 11.18-28.
[[Image here]]
In use, an operator holds the handle and swipes the far end of the annular blade across a piece of meat, for .example, to shave off an unwanted layer that moves up through the open center of the annulus and falls off.
The claims of the patent are directed to the knife blade itself. The claimed blade includes an annular bearing race recessed into a side wall of the blade and dimensioned to receive a protruding annular bearing structure of the blade support housing to maintain the blade in spinning contact with the knife. Figure 9 is a cross sectional depiction of the rotary knife blade mounted within the housing and shows the interaction between the recessed bearing race and the protruding bearing structure:
[[Image here]]
The '325 patent explains:
The bearing race 66 receives the bearing structure 47 so that the blade body 50 is secured to the blade support structure by the bearing race and bearing structure engagement along bearing locations that are spaced axially apart and firmly support the blade against axial and radial shifting during use. The bearing race 66 extends into the wall 62 and is spaced axially from the blade section 52 in that the surface 64 extends between the bearing structure 47 and the blade section 52.*634 The bearing race 66 comprises a [sic] first and second bearing surfaces 70, 72 that converge proceeding toward each other. In the illustrated knife the race extends radially inwardly into the wall 62.... In the illustrated blade, the surfaces 70, 72 are frustoconical. As shown, they are joined at their radially inner ends by a short axially extending annular surface 74 that serves to minimize the race depth and does not engage the bearing structure 47.
Id. col.5 11.10-80.
Claim 1 of the '325 patent reads:
1. A rotary knife blade comprising:
a rotatable annular body defining first and second axial ends, said body disposed about a central axis; and,
an annular blade section rotatable with the annular body and projecting axially from the first axial end of said body;
said body comprised of a wall defining a radially outer surface disposed between said first and second axial ends, and an annular bearing race in said surface and extending radially into said wall, said bearing race spaced axially from said blade section and comprising a first surface that converges proceeding away from said second axial end, and a second surface that converges proceeding toward said first surface, said first and second surfaces defining first and second bearing faces spaced axially apart, wherein both of said bearing faces are frustoconical.
Id. col.9 11.15-31 (emphases added). Claim 1 is exemplary of the claims at issue, with the following variations in relevant claim terms: Claims 6 and 7 replace “bearing race” with “bearing race opening” and claim 8 replaces “bearing race” with “groove” and “bearing face” with “bearing surface.” Id. col.9 1.42-eol.lO 1.37.
B. Proceedings at the District Court
1. Bunzl’s Invalidity Allegations
i. Pre-1998 Bettcher Blades
Bunzl asserted at trial that the '325 patent was invalid as anticipated by prior art Bettcher blades that, while they contained a different bearing race configuration, included chamfered corners argued as inherently capable of being used as a bearing race. Bettcher countered that the pre-1998 blades did not anticipate the claims of the '325 patent because they lacked the frustoconical bearing faces or surfaces required by each claim of the '325 patent. The following image provides a cross sectional view of the pre-1998 Bettcher blade:
[[Image here]]
Cross-Appellant Br. 21. As the image reveals, the pre-1998 blade includes two chamfers at the intersections of the bearing race walls and the outer surface of the blade body. According to Bunzl, these chamfers inherently satisfy the frustoconical bearing face limitations because of their shape and their capability “of being in rolling or sliding contact with a support member.” Appellant Br. 39.
Bunzl’s position was prefaced by statements made during claim construction. In
At the Markman hearing in June 2009, the district court stated that the “bearing face,” “bearing surface,” and “bearing race” issues were inadequately presented in the briefs. Later, in its claim construction order in September 2009, the district court stated that “[djuring [the Mark-man] hearing, the dispute between the parties was narrowed to one disputed definition: namely, ‘frustoconical’ [and bjoth sides agree that ‘only disputed claim terms need to be construed by the Court.’” Markman Order at 1, Bettcher Indus., Inc. v. Bunzl USA, Inc. et al, No. 3:08 CV 2423 (N.D.Ohio Sept. 9, 2009), ECF No. 115. In March 2010, the court issued an Amended Case Schedule which extended through trial, and made no mention of any claim construction proceedings. This new schedule was based on a request jointly submitted by the parties.
In June 2010, a year after the Markman hearing, Bunzl requested a jury instruction that “bearing surface” and “bearing face” should be understood to mean “surface capable of being in rolling or sliding contact with a support member.” J.A. 3285. Bunzl also requested a jury instruction that “annular bearing race,” “annular bearing race opening,” and “groove” all mean “groove.” Id. Bunzl’s requested constructions included no argument. Rather than adopt Bunzl’s proposals, the court told the jury to “give the rest of the words in the claims their ordinary meaning in the context of the patent specification and prosecution history.” Trial Tr. 1429:2-4. The court commented that “[tjhe only claim construction provided to the Court at the Markman hearing was frustoconical. There was no request for additional definitions, and I believe that request for additional definitions on the eve of or during trial is too late.” Id. 1629:3-7.
The district court also presented the jury with the following instruction:
To anticipate a claim of the '325 patent, the pre-1998 blade must contain every limitation of that particular claim. Anticipation requires that there is no difference between claims of the '325 patent and the pre-1998 Bettcher blade, as viewed by a person of ordinary skill in the art.
Trial Tr. 1434:17-23. Bunzl objected to the second sentence of the instruction because “the only prior art at issue with respect to the anticipation argument are prior art blades that were on sale by Bettcher more than a year before the effective filing date of the '325 patent,” and because the statement was “not consistent with In re Schreiber.” Id. 1624:14-19.
At trial, Bunzl’s expert, Dr. King, testified that he had created a mockup rig with a rotating blade configured like the pre1998 blades and using only the chamfers as bearing surfaces. Bettcher countered with evidence that a person of skill in the art would not consider the chamfers to be bearing faces or part of a bearing race, and contested the chamfers’ ability to function as such based on the testimony of its expert.
ii. Section 315 Estoppel
After Bettcher filed suit, and while proceedings were pending before the district court, Bunzl requested inter-partes reexamination of the '325 patent in the United States Patent and Trademark Office (“Patent Office”). In due course, the reexamination was granted and the examiner ultimately declined to adopt the grounds of rejection proposed by Bunzl and issued a Right of Appeal Notice. Bunzl appealed to the Board of Patent Appeals and Interferences (“Board”). At the time of the filing of the appeal to this court, the reexamination was pending before the Board, which has since affirmed the examiner’s conclusions affirming the validity of all claims subject to reexamination. Bunzl Processor Distrib. LLC v. Patent of Bettcher Indus., Inc., Appeal 2011-007091 (B.P.A.I. July 28, 2011).
When the examiner issued the Right of Appeal Notice, Bettcher requested that the district court exclude certain of Bunzl’s invalidity references under 35 U.S.C. § 315(c) on the ground that the examiner had already determined that they did not invalidate the claims of the '325 patent and therefore, according to Bettcher, Bunzl was estopped from asserting these references in district court. According to Bettcher, the § 315 estoppel took effect as soon as the examiner finished the reexamination and the Right of Appeal Notice was sent to the patentee. The district court agreed that the examiner had “issued a ‘final determination’ in the re-examination proceedings,” and granted Bettcher’s request to exclude the references. Bunzl included the exclusion of these references as a separate basis for its new trial motion. The district court denied Bunzl’s motion, noting that “this issue is one of first impression.” Sept. 16 Order at 1.
2. Bettcher’s Infringement Allegations
Bettcher accused Bunzl of infringement based on Bunzl’s manufacture and sale of rotary knife blades marketed as replacement blades for use in rotary knives manufactured and sold by Bettcher. Bunzl’s blades lack the frustoconical bearing faces described in the '325 patent and recited in the '325 patent claims and, instead, contain a completely rounded bearing race. According to Bettcher, once Bunzl’s blades are installed and put into use, their round bearing faces wear until they become frustoconical. Therefore, Bettcher accused Bunzl of indirect infringement based on this “wear” theory. The following image depicts the accused Bunzl blade, installed in a support housing:
Cross-Appellant Br. 13.
At trial, Bunzl called as its witness Mark Stallion (“Stallion”), a patent lawyer, from whom Bunzl allegedly received an unwritten opinion in 2007 counseling that Bettcher was unlikely to win an infringement suit based on its “wear” theory. Bunzl offered Stallion’s testimony to prove Bunzl’s state of mind for inducement and willfulness. Bettcher moved to exclude Stallion’s testimony, but the district court allowed Stallion to testify as to his 2007 opinion. At trial, Stallion testified that he had informed Bunzl that it appeared Bettcher was asserting a theory of indirect infringement and had conceded that the Bunzl blades did not infringe at the time of sale. Stallion testified that he informed Bunzl that Bettcher’s theory of indirect infringement required either an absence of substantial non-infringing use (contributory infringement) or intent to cause the infringing acts (inducement) and that, in his estimation, Bunzl lacked both. Stallion also testified that he informed Bunzl that as a matter of fact it was unlikely that the Bunzl bearing races actually wore to the claimed frustoconical shape when installed and used. Counsel for Bettcher did not object to the above quoted statements during Stallion’s direct examination except to request a side-bar, after which the judge emphasized to the jury that “[y]our role in this case is to determine whether Mr. Stallion gave competent advice and whether Bunzl could rely on it.... [OJnly the law as given to you by me should be considered by you in deciding the issues in this case.” Trial Tr. 1080-1081.
At closing argument, counsel for Bunzl stated with regard to Stallion’s testimony that: “We called Mr. Stallion, who you heard is a patent lawyer. Patent lawyers talk about what patent lawyers talk about.... The only patent lawyer that testified in this case is Mr. Stallion, and that’s what he told you.... Mr. Stallion put it in legal for you____ He said there’s no way these immediately can wear.” Id. 1470-1475. Counsel for Bettcher did not object to counsel for Bunzl’s closing remarks regarding Stallion’s testimony.
After the close of evidence, the district court instructed the jury: ‘When considering whether Bunzl knew or should have known that the induced actions would constitute infringement ... you may consider ... whether or not Bunzl obtained the advice of a competent lawyer ... [but t]he applicable law is the law that I have given you, which may or may not be the law relied on by Bunzl’s attorney.” Id. 1431:21-1432:11.
The jury returned a verdict of non-infringement. Bettcher moved for a new trial, arguing prejudice based on Stallion’s testimony and Bunzl’s closing argument. In denying the motion, the court stated that “[t]he testimony was limited and appropriate, and presented with a cautionary instruction ... [and that] Bunzl’s closing argument, while perhaps stretching the reach of Stallion’s testimony, does not warrant reversal, as the jury was further cautioned, several times, that comments by counsel were not evidence.” Sept. 16 Order at 2.
C. The Present Appeal
Bunzl timely appealed the denial of judgment as a matter of law or a new trial
II. Discussion
A. Standard of Review
In reviewing a district court’s disposition of a motion for judgment as a matter of law or a new trial motion, this court applies the law of the regional circuit where the district court sits. Siemens Med. Solutions USA, Inc. v. Saint-Gobain Ceramics & Plastics, Inc., 637 F.3d 1269, 1277 (Fed.Cir.2011). The Sixth Circuit reviews denial of a motion for judgment as a matter of law de novo. Gemtron Corp. v. Saint-Gobain Corp., 572 F.3d 1371, 1379 (Fed.Cir.2009). In the Sixth Circuit, judgment as a matter of law is appropriate “only if, in viewing the evidence in the light most favorable to the nonmoving party, reasonable minds could come to but one conclusion, in favor of the moving party.” Imwalle v. Reliance Med. Prods., Inc., 515 F.3d 531, 543 (6th Cir.2008) (quotation omitted). “In reviewing the district court’s decision, [the court] may not weigh the evidence, pass on the credibility of witnesses, or substitute [its] judgment for that of the jury.” Id. (quotation omitted).
The Sixth Circuit reviews denial of a motion for new trial for abuse of discretion. Gemtron, 572 F.3d at 1379. Under Sixth Circuit law, “there is no abuse of discretion unless the court has a definite and firm conviction that the trial court committed a clear error of judgment.” Mich. First Credit Union v. Cumis Ins. Soc., Inc., 641 F.3d 240, 245 (6th Cir.2011) (quotation omitted). “[I]f the verdict is supported by some competent, credible evidence, a trial court will be deemed not to have abused its discretion in denying the motion.” Id. at 246 (quotation omitted).
This court reviews a district court’s decision whether to exclude evidence under the law of the regional circuit. Siemens, 637 F.3d at 1284. The Sixth Circuit reviews a district court’s decision to admit or exclude evidence for abuse of discretion. United States v. Geisen, 612 F.3d 471, 495 (6th Cir.2010). A district court abuses its discretion in this regard when it bases its decision on errors of law or clearly erroneous factual determinations. Id.
[E]ven if the lower court’s decision amounts to an abuse of discretion, it will not be disturbed on appeal if it did not result in a substantial injustice, as no error in the admission or exclusion of evidence is ground for reversal or granting a new trial unless refusal to take such action appears to the court to be inconsistent with substantial justice.
Zamlen v. City of Cleveland, 906 F.2d 209, 216 (6th Cir.1990) (quotation omitted).
The legal sufficiency of jury instructions on an issue of patent law is a question of Federal Circuit law which this court reviews de novo, ordering a new trial on that basis only when errors in the instructions as a whole clearly misled the jury. Siemens, 637 F.3d at 1278. “In reviewing jury instructions, the full trial record and the jury instructions in their entirety must be examined because instructions take on meaning from the context of what happened at trial, including how the parties tried the case and their arguments to the jury.” Therasense, Inc. v. Becton, Dickinson & Co., 593 F.3d 1325, 1331 (Fed.Cir.2010). Thus, a jury verdict generally will not be set aside, on motion for judgment as a matter of law or new trial, based on erroneous instructions unless the movant can establish that the instructions were legally erroneous and that the errors had a prejudicial effect. Id.
Statutory interpretation is a question of law that this court reviews de novo. Pequignot v. Solo Cup Co., 608 F.3d 1356, 1361 (Fed.Cir.2010).
B. Anticipation Based on Bettcher Prior Art
Bunzl argues that the district court erred by refusing to enter judgment of invalidity as a matter of law, and, alternatively, by refusing to grant a new trial on the issue of anticipation by the pre1998 Bettcher blades. We disagree and address each argument in turn.
1. Judgment as a Matter of Law
Bunzl argues that the chamfers are inherently capable of serving as bearing faces, that no evidence contradicts this basic capability, and that no other claim limitation is in dispute as to the pre-1998 Bettcher blades. According to Bunzl, it is irrelevant whether anyone ever actually used the chamfers as bearing faces of a bearing race, just as it is irrelevant whether a person of skill in the art ever would have appreciated this alleged capability. According to Bunzl, the only thing the claim requires of the “bearing face” is that it be capable of bearing, without any restrictions on quality or duration, any actual useful functionality, or any structural properties that would have been recognizable to a person of ordinary skill in the art. Bunzl asserts that its expert’s mockup left no factual issue for the jury to decide and, by definition, no evidence sufficient to support the jury’s verdict.
Bettcher counters that the engineering drawings, which were the sole evidence of the actual pre-1998 Bettcher blades, made it clear that the feature Bunzl relies upon is a set of chamfers whose purpose was “to provide clearance and avoid contact with a mating part—the precise opposite of Bunzl’s theory that the chamfers were inherently bearing surfaces.” Cross-Appellant Br. 29. According to Bettcher, all witnesses agreed that the actual engineering specification established that the disputed features were chamfers. Moreover, the witnesses disagreed about whether the chamfers would be able to serve as bearing faces. Bettcher argues that inherent anticipation requires that the chamfers always necessarily function as bearing faces.
In each asserted claim of the '325 patent, the bearing faces must be part of the bearing race or groove. Whether or not the chamfers of the pre-1998 blades could be capable of serving as bearing faces in some hypothetical circumstances, the jury had more than sufficient evidence to support a finding that the chamfers found in the pre-1998 Bettcher blade were not part of the bearing race within the meaning of that term in the '325 patent.
While Bunzl struggles to characterize this as a case of “inherency,” it is nothing of the sort. Inherency can be established when “prior art necessarily functions in accordance with, or includes, the claimed limitations.” In re Cruciferous Sprout Litig., 301 F.3d 1343, 1349 (Fed.Cir.2002). “Inherency, however, may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient.” In re Oelrich, 666 F.2d 578, 581 (CCPA 1981).
Ultimately, the prior art at issue in this case shows what it shows, and the jury was free to draw whatever conclusions manifested themselves from the evidence presented. The evidence showed that the chamfers were designed to remove the sharp corners and not to interact with each other to collectively perform any function, let alone the function of a bearing race. And the undisputed fact is that no one ever used the chamfers to bear anything prior to the critical date of the '325 patent. The speculative notion that by happenstance the chamfers might, under hypothetical circumstances, be capable of operating as a bearing race is an insufficient basis to mandate overturning the jury’s verdict. For these reasons, Bunzl was not entitled to judgment as a matter of law.
2. New Trial on Anticipation by the Bettcher Blades
Bunzl argues in the alternative that it is entitled to a new trial on the issue of invalidity because of the district court’s refusal to adopt its proposed construction of “bearing face” and “bearing surface” and because the district court instructed the jury that anticipation requires that there be no difference between the prior art and the claimed invention as viewed by one of ordinary skill in the art. Again, we disagree, and address each argument in turn.
i. Claim Construction
According to Bunzl, it asked the district court to construe “bearing face” and “bearing surface” to mean “surface capable of being in rolling or sliding contact with a support member.” Bunzl argues that if “the jury had been so instructed, it might have understood that a surface constitutes a bearing surface if it has certain capabilities, regardless of whether the surface had ever been used or intended to be used to perform such capabilities.” Appellant Br. 39 (emphasis added). Bunzl argues that not construing these terms violated O2 Micro International Ltd. v. Beyond Innovation Technology Co., 521 F.3d 1351 (Fed.Cir.2008). According to Bunzl, “[i]f the term ... had been properly construed ... then it would have been undisputed that the chamfered surfaces constitute bearing surfaces and Bettcher’s pre-1998 blades are anticipatory prior art.” Appellant Br. 41. Bettcher counters that Bunzl abandoned this issue and that substantial evidence supported the verdict with or without the proposed constructions.
Bunzl’s argument lacks merit. As described above, Bunzl had ample opportunity to seek construction of the “bearing face” limitation. Here, the parties agreed to a schedule of disclosures. The district court issued a Markman order premised on the express belief that there were no other claim construction disputes. Bunzl said nothing. And then, a year after the Markman hearing, after submitting a new joint schedule that contained nothing about claim construction, Bunzl asked for a new
ii. Jury Instructions
As stated above, the district court instructed the jury that:
To anticipate a claim of the '325 patent, the pre-1998 blade must contain every limitation of that particular claim. Anticipation requires that there is no difference between claims of the '325 patent and the pre-1998 Bettcher blade, as viewed by a person of ordinary skill in the art.
Trial Tr. 1434:17-23. In that instruction, Bunzl objects to the phrases “as viewed by a person of ordinary skill in the art” and “no difference.” This court addresses each in turn.
a. “as viewed by a person of ordinary skill in the art”
Bunzl argues that the district court’s instruction to the jury that prior art must be understood “as viewed by one of ordinary skill in the art” is contrary to this court’s inherency precedent and potentially misled the jury by excluding the possibility of an unappreciated inherent feature. Bunzl relies on In re Cruciferous Sprout Litigation, 301 F.3d at 1349 (“Inherency is not necessarily coterminous with knowledge of those of ordinary skill in the art ... [who] may not recognize the inherent characteristics or functioning of the prior art.” (quotation omitted)), In re Schreiber, 128 F.3d 1473 (Fed.Cir.1997), and other cases, to support its view. According to Bunzl, the perspective of a person of ordinary skill in the art is irrelevant to inherency. Bunzl states that the jury instruction meant that “the jury could not have found anticipation of the claims unless it was also persuaded that before the critical date ... a person of ordinary skill in the art had understood that the pre1998 blades could have so functioned.” Appellant Br. 37 (emphasis added).
Bettcher counters by citing Scripps Clinic & Research Foundation v. Genentech, Inc., 927 F.2d 1565, 1576 (Fed.Cir.1991) overruled in part on other grounds by Abbott Labs. v. Sandoz, Inc., 566 F.3d 1282, 1293 (Fed.Cir.2009) (anticipation requires there to be “no difference between the claimed invention and the reference disclosure as viewed by a person of ordinary skill in the art.” (emphasis added)), and other cases, to support the jury instruction. Bettcher also argues that Bunzl’s own jury instruction included the same language, and that Bunzl thus effectively admitted that the instruction was correct.
As this court has previously explained:
[a] jury verdict will be set aside, based on erroneous jury instructions, if the party seeking to set aside the verdict can establish that those instructions were legally erroneous, and that the errors had prejudicial effect. More specifically, a party seeking to alter a judgment based on erroneous jury instructions must establish that (1) it made a proper and timely objection to the jury instructions, (2) those instructions were legally erroneous, (3) the errors had prejudicial effect, and (4) it requested alternative instructions that would have remedied the error. Prejudicial legal error exists when it appears to the court [that the error is] inconsis*642 tent with substantial justice. However, when the error in a jury instruction could not have changed the result, the erroneous instruction is harmless.... [A] reversal ... is not available to an appellant who merely establishes error in instructions.... Where the procedural error was ‘harmless,’ ie., where the evidence in support of the verdict was so overwhelming that the same verdict would necessarily be reached absent the error, or the error was cured by an instruction, a new trial would be mere waste and affirmance of the judgment is required.
NTP, 418 F.3d at 1311-12 (quotations omitted).
Bunzl has failed to establish that the jury instruction was wrong or that it suffered any prejudice. As noted above in connection with Bunzl’s bid for judgment as a matter of law, the evidence in this case was such that a reasonable jury could have found that the chamfers in the Bettcher blades were not bearing faces of a bearing race as viewed from any perspective, be that a lay person’s, an expert’s, or an ordinarily skilled artisan’s. Bunzl’s only argument that the jury instruction was even remotely problematic, to say nothing of erroneous, rests entirely on the premise that this is a case of inherent anticipation. For the reasons already explained above, it is not.
Bunzl has not shown that the language from Scripps caused any confusion when applied by the jury to the facts of this case. Therefore, Bunzl has not satisfied the four part test elaborated in NTP, 418 F.3d at 1311-12, to disturb a judgment based on an erroneous jury instruction. Moreover, Bunzl has not mustered any evidence sufficient to overcome the substantial deference due a trial court in ruling on motions for new trial. “[I]f the verdict is supported by some competent, credible evidence, a trial court will be deemed not to have abused its discretion in denying the motion.” Mich. First Credit Union, 641 F.3d at 246 (quotation omitted). The district court did not abuse its discretion in denying Bunzl’s motion on this ground.
b. “no difference”
Bunzl also argues that the district court erred by instructing the jury that anticipation required that there be “no difference” between the prior art and the claimed invention. Bunzl argues that “the jury instruction may have mislead [sic] the jury into believing that the presence of additional features in the pre-1998 Bettcher blade would preclude a finding of anticipation.” Appellant Reply Br. 16.
Bunzl’s concern with the “no difference” language is apparently based on the fear that the jury might have mistakenly thought that some extraneous feature of the prior art negated anticipation. No such extraneous feature appears to have been at issue in this case. So no showing of prejudice is possible. Bunzl’s remaining arguments regarding the court’s jury instructions have been considered and are not persuasive.
We hold that Bunzl is not entitled to a new trial regarding invalidity based on the pre-1998 Bettcher blades.
C. Estoppel Under 35 U.S.C. § 315
Bunzl contends that the district court wrongly interpreted 35 U.S.C. § 315 in holding that its estoppel provision applied at the conclusion of examination when the examiner issued the Right of Appeal Notice. Bunzl seeks a new trial on obviousness on this basis. As discussed below, this court agrees with Bunzl that the estoppel provision of § 315 is triggered not when examination is completed but
Inter-partes reexamination proceedings are codified at 35 U.S.C. §§ 311-318. Section 315, entitled “Appeal,” provides:
(a) Patent owner. — The patent owner involved in an inter partes reexamination proceeding under this chapter—
(1) may appeal under the provisions of section 134 [ie., to the Board] and may appeal under the provisions of sections 141 through 144 [ie., to the Federal Circuit], with respect to any decision adverse to the patentability of any original or proposed amended or new claim of the patent; and
(2) may be a party to any appeal taken by a third-party requester under subsection (b).
(b) Third-party requester. — A third-party requester—
(1) may appeal under the provisions of section 134, and may appeal under the provisions of sections 141 through 144, with respect to any final decision favorable to the patentability of any original or proposed amended or new claim of the patent; and
(2) may, subject to subsection (c), be a party to any appeal taken by the patent owner under the provisions of section 134 or sections 141 through 144.
(c) A third-party requester whose request for an inter partes reexamination results in an order under section 313 is estopped from asserting at a later time, in any civil action arising in whole or in part under section 1338 of title 28, the invalidity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings.
When the estoppel of § 315(c) attaches is a question of first impression.
1. The Parties’ Arguments On Appeal
Bunzl argues on appeal that: (1) district court decisions support Bunzl’s interpretation of the statute; (2) the concept of “finality” means that the controversy must be at an end; (3) § 316 defines finality as the exhaustion of all appeal rights; (4) § 315 distinguishes final decisions from final determinations; (5) § 312’s definition of a determination on substantial new questions of patentability as “final and non-appealable” means that final determinations under § 315 must also be unappealable; (6) Bunzl’s view is consistent with Congress’s purpose in creating interpartes reexamination; (7) applying the estoppel as of the Right of Appeal Notice would render the statute internally inconsistent; and (8) the legislative history supports Bunzl.
Bettcher counters that: (1) related regulations prove that right of appeal notices are final determinations; (2) the “fact estoppel” provision of the 1999 act creating inter partes reexaminations and its legislative history support Bettcher; (3) § 317 demonstrates that Congress did not intend to condition estoppel on exhaustion of appeals; (4) minimizing “harassment,” a purpose in the legislative history, is only served if estoppel attaches when the reexamination becomes appealable; (5) § 315 estoppel would be superfluous if it attached after appeals to this court because this court’s decisions bind district courts; (6) Bunzl’s reliance on district court cases and law dictionaries is unavailing; and (7) Bettcher’s interpretation does not render the statute internally inconsistent.
“Our first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case. Our inquiry must cease if the statutory language is unambiguous and the statutory scheme is coherent and consistent.” Pennzoil-Quaker State Co. v. United States, 511 F.3d 1365, 1373 (Fed.Cir.2008) (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997)). “[Statutory language cannot be construed in a vacuum. It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” Davis v. Mich. Dep’t. of Treasury, 489 U.S. 803, 809,109 S.Ct. 1500, 103 L.Ed.2d 891 (1989). Section 315 does not expressly define “finally determined,” but its content and context do.
a. Section 315
The estoppel provision appears at the end of § 315, which provides appeal rights both from examiner and Board decisions. Specifically, § 315(a) provides that patent owners “may appeal under the provisions of section 134 [i.e. to the Board] and may appeal under the provisions of sections 141 through 144 [i.e. to the Federal Circuit],” as well as participate in any appeal brought by a third-party requester. And § 315(b) likewise provides that third-party requesters may appeal both to the Board and to the Federal Circuit, and may participate in appeals brought by patent owners. The estoppel provision of subsection (c) thus falls immediately following the establishment of both parties’ rights of appeal, including appeal to this court.
The placement of the estoppel provision within the inter partes reexamination statute strongly suggests that the phrase “finally determined” refers to the stage of the proceedings when the events contemplated by subsections (a) and (b) have run their course. And because subsections (a) and (b) both state that the parties may appeal decisions both to the Board and to this court, this implies that estoppel requires exhaustion of all appeal rights, including appeals to this court.
Bunzl argues that because subsections (a) and (b) refer to “final decisions,” whereas subsection (c) refers to “final determinations,” therefore the appealable “decisions” of subsections (a) and (b) do not, in and of themselves, amount to “final determinations.” We agree. While the difference in terminology is not necessarily compelling, it is nonetheless supportive of this court’s interpretation of § 315.
b. Section 316
Section 316, entitled “Certificate of patentability, unpatentability, and claim cancellation,” provides in relevant part:
(a) ... In an inter partes reexamination proceeding under this chapter, when the time for appeal has expired or any appeal proceeding has terminated, the Director shall issue and publish a certificate canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent any proposed amended or new claim determined to be patentable.
According to Bunzl, § 316 defines finality as the exhaustion of all appeal rights. This court agrees with Bunzl that § 316
Upon conclusion of the inter partes reexamination proceeding, the examiner must complete a Notice of Intent to Issue Inter Partes Reexamination Certificate (NIRC)....
The following are the only instances when issuance of NIRC action would be proper in an inter partes reexamination proceeding:
(A) There is no timely response by the patent owner to an Office action requiring a response....
(B) After a Right of Appeal Notice (RAN) where no party to the reexamination timely files a notice of appeal.
(C) After filing a notice of appeal, where all parties who filed a notice of appeal or notice of cross appeal fail to timely file an appellant brief (or fail to timely complete the brief, where the appellant brief is noted by the examiner as being incomplete).
(D) After a final decision by the Board of Patent Appeals and Interferences (Board), where there is no further timely appeal to the Court of Appeals for the Federal Circuit nor is there a timely request for rehearing by the Board.
(E) After the Federal Court appeal process has been completed and the case is returned to the examiner.
c. Section 317
Section 317, entitled “[ijnter partes reexamination prohibited,” limits subsequent reexaminations:
(a) Order for reexamination. — Notwithstanding any provision of this chapter, once an order for inter partes reexamination of a patent has been issued under section 313, neither the third-party requester nor its privies, may file a subsequent request for inter partes reexamination of the patent until an inter partes reexamination certificate is issued and published under section 316, unless authorized by the Director.
(b) Final decision. — Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, that the party has not sustained its burden of proving the invalidity of any patent claim in suit or if a final decision in an inter partes reexamination proceeding instituted by a third-party requester is favorable to the patentability of any original or proposed amended or new claim of the patent, then neither that party nor its privies may thereafter request an inter partes reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such civil action or inter partes reexamination proceeding, and any inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any other provision of this chapter. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the patent and Trademark Office at the time of the inter partes reexamination proceedings.
The parallel structure of subsections (a) and (b) suggests that, while subsection (a) applies during the pendency of reexamination proceedings, subsection (b) applies only when reexamination and all appeals have terminated. The relevant House and Senate records confirm that § 317(b) applies “after any appeals.” 145 Cong. Rec. 29276, 29973 (1999). And the Patent Office has interpreted § 317 consistent with this legislative history in M.P.E.P. § 2686.04 (emphases in original):
While Congress desired that the creation of an inter partes reexamination option would lead to a reduction in expensive patent litigation, it nonetheless also provided in the statute that a court validity challenge and inter partes reexamination of a patent may occur simultaneously; but once one proceeding finally ends in a manner adverse to a third party, then the issues raised (or that could have been raised) with respect to the validity of a claim in that proceeding would have estoppel effect on the same issues in the other proceeding.
The 35 U.S.C. 317(b) estoppel applies only in a situation where a final decision adverse to the requester has already been issued. If there remains any time for an appeal, or a request for reconsideration, from a court (e.g., District Court or Federal Circuit) decision, or such action has already been taken, then the decision is not final, and the estoppel does not attach.
While we believe that § 317(b) is clear, even if it were ambiguous, the Patent Office’s interpretation that § 317(b) does not apply “[i]f there remains any time for an appeal” would be entitled to deference. See Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1336 (Fed.Cir.2008) (holding that the “Patent Office had the authority under 35 U.S.C. § 2 to interpret section [of the act creating inter-partes reexamination] because that interpretation both governs the conduct of proceedings in the Patent Office, not matters of substantive patent law, and is a prospective clarification of ambiguous statutory language.”). Finally, we note that while this court agrees with Bunzl’s interpretation of § 315, we do not agree entirely with the reasoning presented by Bunzl. Specifically, we do not agree with Bunzl’s arguments premised on internal inconsistency within § 317 or inconsistency between §§ 315 and 317. In our view, neither argument withstands critical scrutiny.
d. Reexamination Proceedings
The framework of reexamination proceedings also suggests that estoppel attaches after all appeals are exhausted. During appeal, the Board can assert new grounds of rejection provided that the applicant has the opportunity to respond. See 37 C.F.R. § 41.50(b) (“A new ground of rejection pursuant to this paragraph shall not be considered final for judicial review.” (emphasis added)). And the addi
e. Related Regulations
Bettcher argues that the regulations discussing the Right of Appeal Notice establish that the phrase “final determination” in § 315 refers to the Right of Appeal Notice. Bettcher relies on 37 C.F.R. § 1.953, which states in relevant part:
The Right of Appeal Notice shall be a final action, which comprises a final rejection setting forth each ground of rejection and/or final decision favorable to patentability including each determination not to make a proposed rejection, an identification of the status of each claim, and the reasons for decisions favorable to patentability and/or the grounds of rejection for each claim.
Bettcher also relies on 37 C.F.R. § 41.61(a)(2), which states:
Upon the issuance of a Right of Appeal Notice ... the requester may appeal to the Board with respect to any final decision favorable to the patentability, including any final determination not to make a proposed rejection, of any original, proposed amended, or new claim of the patent....
Bettcher’s argument is essentially that because these regulations treat the Right of Appeal Notice as a “final action” and a “final decision,” and because the Right of Appeal Notice incorporates a “final determination not to make a proposed rejection,” therefore the phrase “finally determined” in § 315 must refer to a component of a Right of Appeal Notice. The quoted regulations in no way address the application of any estoppel. They certainly do not purport to interpret or define the statutory language of § 315. Bettcher’s argument thus rings hollow and is not persuasive.
f. Other Arguments
Bunzl also argues that the ordinary meaning of “finally determined” implies that the entirety of the controversy is at an end. As the discussion above makes clear, however, the phrase “finally determined” is not self-interpreting in the context of this statute.
Bettcher also argues that the purpose of “minimizing harassment” is not accomplished unless the estoppel attaches when the examiner issues a Right of Appeal Notice. Indeed, according to Bettcher, the estoppel would be redundant if it only applied after all appeals because decisions of this court are binding on district courts in any event. Bettcher’s argument does not overcome the weight of evidence against Bettcher’s proposed interpretation. As discussed above, Congress intended that reexaminations and civil patent litigation could occur in parallel, and it must be assumed that Congress was aware of any potential for “harassment” when it passed this provision. And Bettcher’s view that the estoppel would be redundant if it did not apply immediately is wrong. This court’s affirmance of an examiner’s decision on reexamination does not preclude district courts from considering challenges
Finally, Bettcher looks for support from the legislative history of the uncodified “fact” estoppel of the 1999 act establishing inter-partes reexamination proceedings, published as a note to 35 U.S.C. § 315. Pub.L. 106-113, Div. B. § 1000(a)(9) [Title IV, § 4607], Nov. 29, 1999, 113 Stat. 1536, 1501A-571. The legislative history of this provision states that the “estoppel arises after a final decision in the inter partes reexamination or a final decision in any appeal of such reexamination.” 145 Cong. Rec. 29276, 29973 (1999). According to Bettcher, this statement distinguishes final decisions in reexaminations from final decisions on appeal, such that § 315(c) should be read to apply as soon as there is a final decision in a reexamination (i.e. a Right of Appeal Notice). This court is at a loss to understand how this argument helps Bettcher. Section 315 itself distinguishes final decisions from final determinations, as discussed above. But more importantly, the legislative history of the fact estoppel proves that it applies only after all appeal rights are exhausted. If anything, this suggests that the same is true of the estoppel of § 315, which applies to the ultimate issues whose determination is based on those same facts that are the subject of the “fact” estoppel. Bettcher’s argument is not persuasive.
The parties’ other arguments have been considered and are not persuasive. For the reasons discussed above, we hold that the estoppel provision of 35 U.S.C. § 315(c) applies only after all appeal rights are exhausted, including appeals to this court.
For these reasons, this court vacates the denial of Bunzl’s motion for new trial on invalidity based on references excluded under the district court’s interpretation of § 315(c) and remands so that the district court may determine in the first instance whether a new trial is warranted in the particular circumstances of this case.
D. Infringement
In its cross-appeal, Bettcher seeks a new trial on the issue of infringement. Bettcher argues that Stallion’s testimony was prejudicial because his 2007 opinion amounted to nothing more than unfounded speculation, because he testified as an expert on the ultimate legal and factual issues of infringement contravening the safeguards against incompetent expert testimony and invading the province of the court to explain the law, and because counsel for Bunzl wrongly characterized Stallion as an authority on legal and factual issues of infringement during closing argument. Bettcher also argues that this court needs to clarify the limits on the admissibility of opinion of counsel evidence in inducement cases and that the district court should not have instructed the jury to rely on such evidence.
Bunzl counters that the jury was properly instructed regarding the law of indirect infringement; that any error was harmless because Bettcher’s “wear” theory of infringement was not legally cognizable or based on sufficient evidence; that Stallion’s testimony was relevant to the accused infringer’s state of mind for inducement and willful infringement; that Stallion did not testify as an expert; and that Bunzl’s closing argument did not prejudice
To warrant disturbing the jury’s verdict, Bettcher must show that the district court abused its discretion in admitting Stallion’s testimony, Geisen, 612 F.3d at 495, and that, as a result of this abuse of discretion, Bettcher suffered substantial injustice. Zamlen, 906 F.2d at 216. On these points, Bettcher’s arguments fall short. Moreover, the fact that Bettcher did not contemporaneously object to the closing argument raises the threshold of prejudice it must establish to be entitled to a new trial. See Strickland v. Owens Corning, 142 F.3d 353, 358 (6th Cir.1998) (“[Fjailure to object at trial to closing arguments does raise the degree of prejudice which must be demonstrated in order to get a new trial on appeal.”).
This court concludes that a new trial is not warranted. The fact and general content of Stallion’s opinion was relevant and admissible, at least with respect to Bunzl’s state of mind and its bearing on indirect infringement. See, DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1307 (Fed.Cir.2006) (en banc in relevant part) (affirming denial of new trial on inducement where record evidence included opinion of counsel). And it is within the province of the jury to make credibility determinations regarding the competence of Stallion’s advice, and the reasonableness of Bunzl’s reliance thereon. See, e.g., Litecubes, LLC v. N. Light Prods., Inc., 523 F.3d 1353, 1374 (Fed.Cir.2008) (“It is not the province of an appellate court to second guess the jury’s credibility determinations or to reevaluate the weight to be given the evidence.”).
Moreover, the infringement theory that Bettcher argues it was effectively precluded from presenting to the jury carries no weight. It is undisputed that the accused blades do not infringe as sold. The record on appeal does not support the view that Bunzl’s blades ever start to infringe, let alone that they always, necessarily, or even usually wear to the allegedly infringing shape. Thus, Bettcher cannot establish either intent or the absence of a substantial non-infringing use for the accused blades. We therefore agree with the district court that Bettcher is not entitled to a new trial on the issue of infringement.
III. Conclusion
For the foregoing reasons, the denial of judgment as a matter of law or new trial on the issue of anticipation based on the pre-1998 Bettcher prior art blades is affirmed; the denial of a new trial on obviousness based on 35 U.S.C. § 315(c) is vacated; the denial of a new trial on the issue of infringement is affirmed; and the case is remanded for further proceedings consistent with this opinion.
AFFIRMED-IN-PART, VACATED-IN-PART, AND REMANDED
Costs
Each party shall bear its own costs.