Opinion
Case No. 1:97-CV-690
July 13, 2000
OPINION ON DEFENDANT'S RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW
Now before the Court is defendant Jefferson Smurfit Corporation's ("JSC") renewed motion for judgment as a matter of law, or in the alternative, for a new trial, filed September 8, 1999. Trial in this matter was conducted during the period of July 20, 1999 through August 18, 1999. The jury determined that defendant had infringed claims 11 and 21 of United States Patent No. 4,966,280 ("the '280 patent"), and assessed $1,136,904 in damages at a reasonable royalty of nine (9) percent.
In accordance with the verdict, the Court entered judgment in Bradford's favor on August 20, 1999. Bradford subsequently moved to amend the judgment order to include a permanent injunction and prejudgment interest, relief that is addressed in a separate opinion issued of even date. In their pleadings addressing that motion, the parties also raised the issue of the apparently inconsistent verdict, an issue that the Court addresses in this memorandum opinion. For the reasons set forth below, defendant's renewed motion for judgment as a matter of law will be denied, because the Court finds that the jury's verdict finds substantial support from the evidence adduced at trial. Furthermore, defendant's motion for new trial will also be denied, as the jury's verdict does not run counter to the clear weight of the evidence.
I. LEGAL STANDARD
A motion for judgment as a matter of law challenges the legal sufficiency of the evidentiary support for the jury's verdict. The Court may grant the motion only if the verdict is shown not to be supported by substantial evidence. See Baxter Healthcare Corp. v Spectramed, Inc., 49 F.3d 1575, 1582 (Fed. Cir. 1995). The verdict is supported by substantial evidence if reasonable jurors, viewing the evidence as a whole, could have found the facts needed to support the verdict in light of the applicable law. Id. In evaluating the record, the Court must view the evidence in the light most favorable to the non-moving party, Bradford, and draw all reasonable inferences in its favor . See Applied Medical Resources Corp. v. United States Surgical Corp., 147 F.3d 1374, 1376-77 (Fed. Cir. 1998). Furthermore, the Court may not second guess the jury's role in evaluating the credibility of witnesses or substitute its judgment for that of the jury's in resolving conflicting questions of fact. Id.
The inquiry for the grant of a new trial under Fed.R.Civ.P. 59 is governed by a different standard. The Court may grant a new trial "for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States." Fed.R.Civ.P. 59. The decision to grant or deny a motion for a new trial is committed to the sound discretion of the trial court. See Litton Systems, Tnc. v. Honeywell, Inc., 87 F.3d 1559, 1576 (Fed. Cir. 1996) judgment vacated on other grounds, 117 S.Ct. 1040 (1997).
II. JSC'S FAILURE TO MAKE RULE 50(b) MOTION
At the outset, Bradford contends JSC failed to make a motion for judgment as a matter of law as to obviousness, anticipation and the infringement of claim 21 of the '280 patent. Accordingly, citing Jackson v. City of Cookeville, 31 F.3d 1354, 1358 (6th Cir. 1994), Bradford argues JSC is precluded from raising these issues in its renewed motion for judgment as a matter of law.
JSC replies by noting that motions pursuant to Fed.R.Civ.P. 50 are ordinarily made by the party carrying the burden of proof on an issue. Inasmuch as it would be highly unusual for a party who bears the burden of proof at trial to make a Rule 50 motion, JSC argues, its failure to do so should not preclude the Court's consideration of the instant motion. JSC does not deny, however, that it failed to make a Rule 50 motion with regard to infringement of claim 21 — an issue where the burden of proof rested with Bradford.
The Court is aware that the application of Rule 50(b) should not be a mere mechanical exercise. The Sixth Circuit has held that the timeliness of a Rule 50 motion should be examined "in the light of the accomplishment of its particular purpose as well as in the general context of securing a fair trial for all concerned in the quest for justice ." Riverview Investments, Inc. v. Ottawa Community Improvement Corp., 899 F.2d 474, 477 (6th Cir. 1989). In Riverview Investments, however, the appellees made the Rule 50 motion both at the end of the appellants' case-in-chief and at the end of their own case-in-chief, but neglected to do so after calling a rebuttal witness. Id. Judge Kennedy, writing for a unanimous panel, held that the rebuttal testimony "was brief and of little consequence to the outcome of the trial," and thus should not bar the appellees from renewing their motion under Rule 50. Id. at 478.
By contrast, JSC failed to make a Rule 50 motion at the end of its case-in-chief, but claims that it should not have had to do so because it bore the burden of proof on the issues of obviousness and anticipation. JSC cites no authority for this proposition, however, and the Court is unpersuaded that the facts here are sufficiently analogous to those of Riverview Investments to permit JSC to raise these issues now. Crucially, JSC failed to make a Rule 50 motion on obviousness and anticipation at the end of its case-in-chief, unlike the appellees in Riverview Investments. Moreover, JSC introduced several hundred exhibits at trial, dozens of which went to the issues of obviousness and anticipation. It cannot properly be said that such evidence was either "brief," or of "little consequence." Accordingly, the Court determines JSC's failure to move for judgment as a matter of law on the issues of obviousness and anticipation at the close of its case-in-chief precludes it from raising those issues in a post-judgment motion.
Even more clear is the case of infringement of claim 21. Having failed to make a Rule 50 motion at the close of Bradford's proofs on this issue, JSC may not now raise the issue for consideration after the jury has rendered its verdict.
Despite the Court's ruling on this issue, the Court nevertheless proceeds to address the merits of JSC's renewed motion for judgment as a matter of law on grounds of obviousness, anticipation and infringement in the sections that follow.
III. OBVIOUSNESS AND ANTICIPATION BY PRIOR ART
JSC first argues claims 11 and 21 of the Bradford `280 patent are obvious as a matter of law, and are thus invalid. Defendant bases it argument upon the entire record generally, including the jury's verdict as to the invalidity of Claims 12 and 17 of the '280 patent, and concludes no legally sufficient evidentiary basis exists for the jury to have found claims 11 and 21 to be valid in light of its affirmative defense of obviousness.
Second, JSC spills much ink reiterating the exact arguments it made before the jury concerning anticipation by prior art: that the '280 patent is invalid due to anticipation by prior art including the Gutman Article (Ex. 772), the McAllister '901 patent (Ex. 744), the Youngs '790 Patent (Ex. 201) the 1985 EIA Interim Standards (Ex. 713), and the Blodgett '048 patent.
Bradford responds that JSC has not demonstrated that there was no substantial evidence to support the jury verdict finding claims 11 and 21 valid, unobvious, and not anticipated.
Considering the record under the standard of review for judgment as a matter of law, the Court finds JSC has failed to demonstrate that no substantial basis exists for the jury's verdict as to either obviousness or anticipation by prior art. Initially, a determination that a patent is invalid for obviousness is a conclusion of law based on underlying facts that must be established by clear and convincing evidence. See Panduit Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1568 (Fed. Cir. 1987). A combination of references cannot be held to render an invention obvious unless the combination would be suggested to a person of ordinary skill. See Ashland Oil, Inc. v. Delta Resins Refractories, Inc., 776 F.2d 281 (Fed. Cir. 1985). At most, JSC's proofs establish the case it made at trial — a case rejected by the jury. The jury was presented with evidence on the questions of obviousness, and it clearly weighed the evidence in light of the presumption of validity of claims 11 and 21 of the '280 patent. Accordingly, the Court finds the jury's finding that claims 11 and 21 were not obvious is supported by substantial evidence, and that JSC has failed to meet the high burden of proving obviousness by clear and convincing evidence. Furthermore, the Court concludes the jury's verdict was not against the clear weight of the evidence, and thus no new trial is warranted.
Turning to the question of anticipation by prior art, again the Court finds JSC's arguments amount to nothing more than merely restating the case it made to the jury. JSC contends that every element of claims 11 and 21 is disclosed in the prior art. Bradford vigorously disagrees, maintaining that none of the prior art JSC relies on incorporates every limitation of the claims of the '280 patent.
In order to establish that a patent claim is invalid as being anticipated by prior art under 35 U.S.C. § 102, JSC must prove anticipation by clear and convincing evidence. JSC must further establish that all the claim limitations and elements are found within a single prior art reference. See Scripps Clinic Research Foundation v. Genentech, Inc., 927 F.2d 1565, 1576 (Fed. Cir. 1991). Having reviewed the record as highlighted by the pleadings, the Court concludes JSC has again failed to meet the high threshold burden necessary to demonstrate anticipation by clear and convincing evidence. Although JSC repeatedly points out aspects of the '280 patent that were arguably presented in earlier work, in no case did "every limitation of a claim . . . identically appear in a single prior art reference." See Gechter v. Davidson, 116 F.3d 1454, 1457 (Fed. Cir. 1997). The jury's finding that the prior art exhibits urged on the Court by JSC do not serve to invalidate the '280 patent finds support in the record, and thus the Court must deny JSC's renewed motion for judgment as a matter of law on this issue. Similarly, the Court finds the evidence does not mandate a new trial.
IV. INFRINGEMENT
JSC's third argument is that its Protech SD/C product does not infringe claims 11 and 21 of the '280 patent because the '280 patent describes a three-layer product with an interior conductive layer that is "relatively rigid." JSC submits no evidentiary basis exists to support a finding that its product has such a rigid layer. Bradford cites the Court to the testimony of Mr. Jud A. Bradford and JSC's technical expert, Stanley Weitz, both of whom testified to the relative rigidity of JSC's product. JSC claims, however, that Bradford consistently distinguished the '280 patent from prior art specifically on the rigidity of the interior conductive layer, and not the overall structure. Because its product contained an extremely thin conductive layer, JSC contends it necessarily lacks rigidity necessary to infringe the '280 patent.
Again, JSC offers no new argumentation to the Court from that offered in its motion made at the close of plaintiff's proofs pursuant to Fed.R.Civ.P. 50. The Court is unpersuaded by JSC's efforts to narrow claim 11 of the '280 patent for the same reasons stated from the bench at trial. As Bradford correctly points out, nowhere in claim 21 is a limitation as to "rigidity" included. Accordingly, in light of the testimony of Mr. Bradford Weitz, and for the reasons previously articulated from the bench, the Court finds JSC's arguments on this issue are insufficient to warrant judgment as a matter of law or a new trial.
V. CONSISTENCY OF THE VERDICT
JSC's fourth ground for judgment as a matter of law or a new trial asserts that whether considered a special verdict or a general verdict with interrogatories under Fed.R.Civ.P. 49, the findings and verdict returned by the jury are inconsistent on issues of infringement and invalidity. The jury found JSC infringed claims 11 and 21 of the '280 patent, but did not infringe claims 12 and 17. The jury further found claims 11 and 21 were not invalidated by obviousness or anticipated by prior art. Conversely, the jury found claims 12 and 17 were invalidated both by obviousness and anticipation by prior art. From these apparently contradictory findings JSC reasons that the Court should grant a new trial on the issue of infringement. Alternatively, JSC seeks judgment as a matter of law that claims 11 and 21 are invalid due to anticipation and obviousness, and that the Protech SD/C did not infringe claims 11 and 21.
Bradford raises the issue of the apparent inconsistency of the jury's verdict in its motion to amend the judgment order, filed September 3, 1999. The opinion granting Bradford's motion to amend the judgment order did not address Bradford's arguments on this issue. Instead, the Court takes up the arguments made in Bradford's motion to amend the judgment order here together with JSC's arguments on the same issue.
Bradford also contends the jury's verdict is in error and should be conformed by the Court. Bradford renews its motion for judgment as a matter of law on the issue of invalidity as to claims 12 and 17 as to anticipation and obviousness. Citing Hartness Int'l Inc. v. Simplimatic Engineering Co., 819 F.2d 1100, 1108 (Fed. Cir. 1987), Bradford asserts a dependent claim cannot, as a matter of law, be found to be invalid over the prior art where the claim from which it depends is found to be valid over the prior art. In Hartness the Federal Circuit held that a finding that an independent claim was unobvious meant "a fortiori" that the dependent claim was also unobvious. Hence, because the jury found claims 11 and 21 infringed and not invalid, Bradford argues claims 12 and 17 are necessarily not invalid.
Bradford renews its motion for judgment as a matter of law in its motion to amend the judgment order, filed September 3, 1999. The Court addresses the argument here, however, along with JSC's renewed motion for judgment as a matter of law.
Bradford further states that there is no evidence upon which the jury could have determined that claims 12 and 17 were not infringed by JSC. Bradford submits its proofs established that the conductive layer in JSC's Protech SD/C included high carbon content paperboard (contemplated by claim 12) and also included antistatic, low carbon content paperboard exterior layers (contemplated by claim 17), and points to the testimony of Mr. Bradford and Mr. Weitz for further support.
Under Fed.R.Civ.P. 49(b), the Court may, as here, require a jury to return a general verdict accompanied by answers to written interrogatories upon one or more issues of fact, the decision of which is necessary to the verdict. "It is well-settled that if, after answers to special interrogatories are read, a party does not object to the discharge of the jury or raise any issue with respect to the jury's responses, that party should be deemed to have waived any objection as to inconsistency, ambiguity, or lack of clarity in the answers." See Tennessee Consolidated Coal Co. v. United Mine Workers, 416 F.2d 1192, 1200 (6th Cir. 1969), cert. denied, 397 U.S. 964 (1970). See also Mitchell v. Halden, No. 92-5465, 1994 U.S. App. LEXIS 5640 at *10 (6th Cir. Mar. 24, 1994) (per curiam) ; Central On Line Data Systems, Inc. v. Filenet Corp., No. 95-1016, 1996 WL 483031 at *11 (6th Cir. Aug. 23, 1996) ( citing Lockard v. Missouri Pac. R.R. Co., 894 F.2d 299, 304 (8th Cir.), cert. denied, 498 U.S. 847 (1990)); W hite v. Celotex Corp., 878 F.2d 144, 146 (4th Cir.), cert. denied, 493 U.S. 964 (1989) ("The purpose of the rule is to allow the original jury to eliminate any inconsistencies without the need to present the evidence to a new jury. This prevents a dissatisfied party from misusing procedural rules and obtaining a new trial for an asserted inconsistent verdict." (citation omitted)).
Rule 49(b) further states, "When the answers are consistent with each other but one or more is inconsistent with the general verdict, judgment may be entered pursuant to Rule 58 in accordance with the answers, notwithstanding the general verdict, or the court may return the jury for further consideration of its answers and verdict or may order a new trial." Even were the jury's findings that claims 12 and 17 were not infringed and were also invalid viewed to be inconsistent with the general verdict in favor of Bradford, the Court would nevertheless enter judgment for Bradford as provided by Rule 49 (b) and as amended by this court's Order of even date amending the judgment order.
After the jury returned its verdict and after the verdict was published by the courtroom deputy, the parties were afforded an opportunity to object to the verdict. Neither did so. The Court also inquired whether the parties had anything else to bring before the Court at that time. Again, neither party raised the issue of an inconsistent verdict. Significantly, both parties agree that the perceived inconsistency in the verdict is obvious and apparent. Nevertheless, the parties remained silent once the verdict was published and when queried by the Court immediately thereafter. Absent an objection made before the discharge of the jury, the Court concludes both parties have waived their right to raise any objection to any apparent inconsistency in the verdict in accordance with the well-settled law cited above. Accordingly, Bradford's motion for judgment as a matter of law, or in the alternative for a new trial on claims 12 and 17 will be denied, and JSC's motion for judgment as a matter of law, or alternatively a new trial on these issues will likewise be denied.
Bradford notes it moved for judgment as a matter of law at the end of JSC's case arguing JSC had failed to prove that the claims at issue were invalid under § 102 (anticipation) or § 103 (obviousness). Bradford further notes it moved to amend the judgment order on September 3, 1999, seeking to resolve the apparent inconsistency by a finding that claims 12 and 17 were infringed and not invalid based on the jury's finding that claims 11 and 21 were infringed and not invalid. These two motions, Bradford submits, renders their motion for judgment as a matter of law on claims 12 and 17 timely. The authorities cited by the Court are clear, however: absent an objection before the discharge of the jury, an objection based on an apparent inconsistency is waived.
VI. Prior Evidentiary Rulings
JSC next asserts several grounds of error concerning prior evidentiary rulings made by the Court. In particular, JSC claims the Court erred by (1) interpreting the '280 patent's claims as disclosing a product which can be made of more than three layers; (2) construing the asserted claims of the '280 patent as only requiring electrical contact and not direct physical contact; (3) excluding evidence that Bradford's technical expert tested samples which were not JSC's product; (4) excluding certain proposed testimony and test results of defendants' technical exert, Stanley Weitz;(5) excluding the proffered testimony of defendants' patent expert witness, John McGarry, on the issue of claims analysis, obviousness and anticipation; (6) failing to submit separate questions to the jury on the issue of infringement with respect to different constructions of the Protech SD/C; and (7) failing to submit the March, 1983 product manufactured by JSC's predecessor as a prior art reference on the issue of anticipation.Bradford responds by first noting these argument presents no new factual or legal information to the Court. Bradford further observes the above issues were fully briefed previously, and the Court's rulings on these issues are contained in the record.
In making evidentiary rulings in this patent case the Court applied the law of the Sixth Circuit, unless the evidentiary issue was unique to patent litigation and thus would benefit from national uniformity . See ATD Corp. v. Lydall, Inc., 159 F.3d 534, 548 (Fed. Cir. 1998); Biodex Corp. v. Loredan Biomedical, Inc., 946 F.2d 850, 856 1252, 1256 (Fed. Cir. 1991). In addition, Fed.R.Civ.P. 61 states, "No error in either the admission or the exclusion of evidence . . . is ground for granting a new trial or for setting aside a verdict . . . unless refusal to take such action appears to the court inconsistent with substantial justice." Hence, the Court examines whether its prior rulings led to harmful error or the denial of substantial justice. See ATD Corp., 159 F.3d at 548.
Given JSC's persistence in repeatedly seeking reconsideration on the above issues, the Court has carefully examined each instance complained of by JSC. The Court discerns no errors of law made in any of its rulings based on the authorities cited in JSC's pleadings. Furthermore, even were error to have been committed, JSC has failed to establish any colorable claim of denial of substantial justice resulting from each ruling claimed as error. The Court unqualifiedly stands by its prior rulings, and finds the rationale for each and every decision is amply set forth in the record.
VII. Jury's Calculation of Damages
JSC next asserts the jury improperly calculated the damage award based on the reasonable royalty rate and the percentage of literal infringement. JSC claims plaintiff's evidence demonstrates that, at most, only 62% of the Protech SD/C manufactured by JSC literally infringed the '280 patent. JSC then divides the jury's damage award ($1,136,904) by the reasonable royalty rate the jury determined to be appropriate (9%), to arrive at what it contends was the jury's royalty base of $12,632,266. Noting that this derived figure compares closely with the sales from the Smurfit converting/container division ($12,627,670), JSC argues the jury improperly calculated its damage award based on the entire sales of the converting/container division, rather than discounting the sales by the 62% of the literally infringing Protech SD/C product.
Bradford responds that although JSC's conclusions flows from its assumed premises, those assumptions boil down to mere speculation as to what sales figures the jury actually included to determine a royalty base. The verdict form itself only required the jury to set forth the reasonable royalty rate and the total damage award.
Bradford notes in response that 35 U.S.C. § 284 provides a claimant shall be awarded "damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer." Even assuming the royalty base calculated by JSC ($12,632,266) is accurate, Bradford observes that applying the 9% royalty rate to 62% (the infringing percentage testified to by Stephen Fowler, Bradford's expert) results in an award of $704,880. Thus, Bradford asserts, nothing precludes the jury from adding to that amount an additional amount or amounts for an up-front licensing fee and/or to elevate the damage award above the baseline of a reasonable royalty, so as to compensate Bradford adequately for the infringement.
The Court finds Bradford's position persuasive. Where infringement has been shown, a patentee is entitled to "damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer." 35 U.S.C. § 284 (1988). Although this analysis requires a basis in fact, it necessarily involves an element of approximation and uncertainty. See Unisplay, S.A. v. American Elec. Sign Co., Inc., 69 F.3d 512, 517 (Fed. Cir. 1995). The Court is not sympathetic to defendant's present dissatisfaction with the outcome of its chosen trial strategy: having consented ex ante to the verdict form, the Court considers JSC's ex post complaints to be little more than sour grapes. If JSC had wanted the specific royalty base, infringing percentage, and any additional up-front licensing fees or other components of the damage award identified separately by the jury, then it was incumbent upon JSC to object to the verdict form before its submission to the jury. JSC did not do so, and absent a clearly unreasonable damages award, the Court will not intervene. See Standard Havens Prods., Inc. v. Gencor Indus. Inc., 953 F.2d 360 (Fed. Cir. 1992). Accordingly, defendant's motion for judgment as a matter of law on this issue will be denied, as the jury's verdict finds support in the record. Furthermore, defendant's motion for new trial on this issue will also be denied.
VIII. Laches
In its final ground for seeking judgment as a matter of law, JSC contends Bradford's delay in bringing suit caused prejudicial delay by increasing its prejudgment interest liability and by the deleterious effect such delay works on witnesses' recollections. Bradford responds that there was a protracted exchange of correspondence justifying the delay in bringing suit.
The Court finds that although Bradford was not as vigilant as one might expect, no basis exists for limiting the award of damages made by the jury. There is a presumption of laches if more than six years elapses from the time a claimant knew or should have known of the infringement to the time the suit was filed. See A. C. Aukerman Co. v. R.L. Chaides Constr. Co. 960 F.2d 020, 1028 (Fed. Cir. 1992). Bradford became aware of JSC's infringement on April 4, 1991, and filed suit on August 18, 1997, a period of time more than 6 years. The Federal Circuit further explained the Aukerman decision in Hemstreet v. Computer Entry Systems Corp. 972 F.2d 1290, 1293 (Fed. Cir. 1992). In Hemstreet, the Federal Circuit stated that "the presumption of laches which arises after a defendant proves a six-year delay is a `double bursting bubble' which the plaintiff punctures with the introduction of evidence sufficient to raise a genuine dispute as to either delay or prejudice." Once the bubble is burst, the defendant is put to its proof on both factors. See Hemstreet, 972 F.2d at 1293.
The Court finds Bradford's introduction of the correspondence between the parties comprising of more than 16 letters is sufficient to burst the bubble of the presumption of laches. These letters are reasonably understood as negotiations attempting to resolve the claim of infringement between the parties. Moreover, the culmination of the exchange of letters was a request for reexamination of the `280 patent, which was concluded in Bradford's favor on March 25, 1997. Accordingly, the Court finds that while Bradford's delay raised a presumption of laches, that presumption was rebutted.
IX. CONCLUSION
In conclusion, the Court unqualifiedly concludes that the jury's verdict finds substantial support in the record and is not against the clear weight of the evidence. JSC failed to make a Rule 50 motion at the end of its case-in-chief on the questions of obviousness and anticipation, precluding it from now raising those issues. Furthermore, JSC's renewed motion raises grounds for judgment as a matter of law repeatedly ruled on by the Court in favor of Bradford. The Court is not now inclined to revisit those rulings. Thus, JSC is entitled neither to judgment as a matter of law or a new trial, and an order denying its motion will issue to that effect.
ORDER DENYING RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW
In accordance with the Court's memorandum opinion of even date,
IT IS HEREBY ORDERED that defendant's renewed motion for judgment as a matter of law, or in the alternative, for new trial, is DENIED.
IT IS FURTHER ORDERED that plaintiff's renewed motion for judgment as a matter of law, or in the alternative for new trial, is DENIED.