Allen Engineering Corporation v. Bartell Industries, Inc. And Darragh Company

Citations: 299 F.3d 1336; 63 U.S.P.Q. 2d (BNA) 1769; 2002 U.S. App. LEXIS 15418; 2002 WL 1765989Docket: 01-1238

Court: Court of Appeals for the Federal Circuit; August 1, 2002; Federal Appellate Court

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Bartell Industries, Inc. appeals a judgment from the U.S. District Court for the Eastern District of Arkansas, which found that Bartell's riding trowel models TS-65, TS-78, and TS-881 infringed claims of U.S. Patent No. 5,108,220 assigned to Allen Engineering Corporation and awarded Allen $463,485.10 in doubled damages. The Federal Circuit vacated the judgment of infringement and the damages award due to the district court's failure to properly construe the claims and identify specific claims infringed under the doctrine of equivalents. Additionally, the appellate court vacated the determination that the patent was not invalid under 35 U.S.C. 102(b) because the district court did not apply the correct legal test regarding Allen's prior sales of the Red Rider trowel. Claims 1-4, 13, and 23 of the '220 patent were found to be indefinite, reversing the lower court's finding of validity under 35 U.S.C. 112. However, the Federal Circuit affirmed the district court's conclusion that Bartell failed to prove intent to deceive regarding Allen's non-disclosure of the Red Rider trowel during patent prosecution. The court also upheld the finding that a typographical error in patent identification labels was not material to damage calculations. The case is remanded for further proceedings consistent with this ruling. The background notes that Allen's first trowel model, the Red Rider, was introduced in 1988, followed by the Flying Frame model in 1990, while Bartell began marketing straddle-type trowels in 1988 and introduced a front-facing model in 1992, which allegedly copied Allen's design.

The application for Allen's '220 patent was submitted on July 13, 1990, and the patent was granted in 1992, with extensive amendments made during prosecution. Claim 15 describes a self-propelled, fast steering motorized riding trowel designed for finishing concrete surfaces, detailing its components: a seat for the operator, primary control lever for steering, rigid frame, motor, twin rotor system with specific blade features, gearbox for blade rotation, pivot steering box for gearbox mounting, flexible drive shaft for motor actuation, interconnecting means for the drive shaft and motor, and lever arm for gearbox tilting.

In July 1995, Allen filed a lawsuit in the Eastern District of Arkansas against Bartell for allegedly infringing several claims of the '220 patent through the manufacture and sale of its Bartell. 1 and Bartell. 2 models. The district court did not hold a Markman hearing or construe the patent claims. After a bench trial, it concluded that the Bartell. 1 model literally infringed claims 15-19 and potentially others, while the Bartell. 2 model infringed unspecified claims under the doctrine of equivalents. The court also determined that the Red Rider trowel was an incomplete experimental model, negating Bartell's argument regarding an on-sale bar, and rejected claims of inequitable conduct for not disclosing the Red Rider during prosecution. Additionally, the court dismissed Bartell's argument against damages based on erroneous patent marking on Allen's Flying Frame trowel.

The standard of review for the district court's judgment after a bench trial involves checking for legal errors and assessing factual findings for clear error. Claim construction is treated as a legal matter subject to de novo review, while factual determinations regarding the claims' application to accused products are assessed based on their evidence.

A claim's sufficiency, as defined under 35 U.S.C. 112, paragraph 2, is a legal conclusion reviewed de novo, as established in Solomon v. Kimberly-Clark Corp. Inequitable conduct is assessed at the trial court's discretion with review for abuse of that discretion, as per Kingsdown Med. Consultants, Ltd. v. Hollister Inc. The determination of whether an invention was on sale under 35 U.S.C. 102(b) is a legal question subject to plenary review, but it relies on underlying factual issues, highlighted in Brasseler, U.S.A. I, L.P. v. Stryker Sales Corp. and Weatherchem Corp. v. J.L. Clark, Inc.

In the analysis of claim construction and infringement, Allen claimed that Bartell's riding trowels infringe several specific claims. The court's precedent guides district courts through the infringement assessment process, which involves identifying, interpreting the asserted claims, and comparing them to the accused device. The initial step requires the court to construe the claims, a legal matter, referencing intrinsic evidence such as the written description, drawings, and prosecution history, as noted in Teleflex, Inc. v. Ficosa N. Am. Corp. The claim terms should be understood in their ordinary meaning unless a special definition is provided by the patentee, with the specification serving as the primary resource for interpretation. The prosecution history can also significantly influence claim meanings.

After claim construction, the court applies the claims to the accused device. Literal infringement occurs only if each claim limitation is found in the accused device. If literal infringement is absent, a finding of infringement may still be possible if equivalents of those limitations exist, evaluated on a limitation-by-limitation basis to ensure that claim limitations are not entirely eliminated by the concept of equivalence.

Equivalence in patent law is established by demonstrating that an element of an accused device performs substantially the same function in substantially the same way to achieve substantially the same result as a claim limitation. A claim element is considered equivalently present if only insubstantial differences exist between the missing element and the corresponding aspect of the accused device. The district court's ruling inadequately addressed the claim limitations of the asserted '220 patent, mistakenly identifying the 'enhanced steering characteristics' attributed to the 'offset torque rod means' as the invention's essence. It is established that there is no legally recognized 'essential' element in combination patents; rather, the invention is defined by its claims. 

The court's claim construction for the 'offset torque rod means' was overly simplistic, leading to a finding of literal infringement without addressing all claim limitations. Specifically, while the 'offset torque rod means' is contained in dependent claim 18, the court found infringement of an independent claim without properly considering its limitations. Additionally, the court's conclusions regarding the Bartell #2 trowel were flawed because it did not identify any specific claim infringed, instead making a broad assertion of equivalence without the necessary claim-by-claim analysis. This lack of detailed comparison and failure to identify specific claims warrants a remand for further proceedings, as the district court's omissions and inadequate factual findings on infringement do not meet legal standards for claim construction and evaluation of equivalents.

On remand, the district court is tasked with interpreting the disputed limitations of the remaining claims in the lawsuit and comparing these interpretations to the elements of the accused Bartell trowels to assess infringement. Guidance is provided on specific issues to be addressed during this process. 

The claims in question begin with the same preamble: "a self-propelled, fast steering motorized riding trowel for finishing a concrete surface, said trowel comprising." Generally, a preamble does not limit claims, but it can be limiting if both the preamble and body define the claimed invention's subject matter. Courts assess this on a case-by-case basis, considering the entire claimed invention and its description in the specification.

The term "fast steering" is debated; Allen argues it should limit the claim, whereas Bartell contends it is merely a descriptive term. The court agrees with Bartell, determining "fast steering" lacks a specific interpretive frame of reference within the claims and does not provide vital meaning to the claim structure, thus should not be construed as a limitation.

Furthermore, under 35 U.S.C. § 112, paragraph 6, claim limitations can be expressed in means-plus-function format, which allows the specification of a function without detailing the structure. The use of "means" indicates a presumption for such clauses, which can be rebutted if the claim lacks a corresponding function or includes sufficient structure for the function specified.

To invoke 35 U.S.C. § 112, paragraph 6, a claim element must not describe a definite structure performing the specified function. A claim term has sufficient structure if it is well understood in the relevant field. Merely using the term "means" does not automatically classify a limitation as means-plus-function. In Cole, a limitation that detailed both the structure and its purpose was not deemed means-plus-function. Conversely, in Sage Products, a limitation lacking explicit structural detail was properly classified as means-plus-function. 

The independent claim in question, identified as Claim 15, contains multiple instances of "means," but many of these include too much structural detail to qualify for § 112, paragraph 6. For example, the "gearbox means" and "flexible drive shaft means" are defined with specific structures, which precludes them from being treated under § 112, paragraph 6. Other elements like "pivot steering box means" and "friction disk means" similarly recite precise structures known to those skilled in the art. Consequently, the presence of "means" in these instances does not diminish their structural clarity.

The only limitation that qualifies under § 112, paragraph 6 is "means interconnecting said drive shaft means with said motor means," which lacks specific structural description. This limitation is interpreted to cover the corresponding structure disclosed in the written description necessary for performing the recited function.

Claims 1-4, 13, and 23 of the '220 patent are deemed invalid under 35 U.S.C. 112. Specifically, claim 23 is considered indefinite due to an incomplete limitation, making it impossible to determine its scope. Claims 1-4 and 13 fail to meet the first requirement of 35 U.S.C. 112 as they do not accurately reflect what the inventor regarded as his invention. These claims assert that a pivot steering box can pivot in a plane perpendicular to a biaxial plane, contradicting the specification, which states such movement is not permitted. The argument that 'perpendicular' should be interpreted as 'parallel' is rejected, as the court does not revise claims to maintain validity. The contradiction between the claims and the specification indicates that the inventor did not consider the described configuration as his invention, resulting in the invalidation of these claims. Bartell's additional claim of invalidity under the first paragraph of 112 regarding enablement is not addressed due to the ruling under the second paragraph.

Prosecution history estoppel must be considered by the district court on remand regarding the infringement of claims of the '220 patent under the doctrine of equivalents. This doctrine prevents a patentee from claiming equivalents for subject matter that was surrendered during the patent application process. Estoppel can arise from amendments that narrow claim scope to comply with the Patent Act, creating a rebuttable presumption that the patentee has surrendered certain equivalents. The extent of this estoppel is determined by reasonable inferences drawn from the amendments. However, a patentee may still assert equivalents that were unforeseeable at the time of the amendment or have only a peripheral relation to the reasons for the amendment. Additionally, if there are other reasons indicating that the patentee could not have reasonably described the substitute, the doctrine of equivalents remains applicable.

The burden lies with the patentee to demonstrate that the amendment does not surrender the specific equivalent in question. Arguments made during prosecution can also lead to estoppel, particularly if they suggest relinquishing claim construction. It is noted that multiple amendments were made during the prosecution of the '220 patent, and the district court must assess whether these amendments and arguments create prosecution history estoppel affecting the doctrine of equivalents.

Furthermore, confusion exists in the district court regarding the impact of alleged copying of Allen's trowels on the infringement issue. During a comparison of various trowels, including Allen's and Bartell's, the court inquired about the uniqueness of Allen's machine and where it may have been copied in Bartell's design.

Allen's counsel misrepresented Supreme Court precedent in post-trial submissions, particularly regarding the significance of copying in infringement cases. Defendants claimed that Bartell's copying was irrelevant, contradicting the holding in *Graham v. John Deere Co.*, which indicates that copying might relate to non-obviousness rather than infringement. The court clarified that while copying could be relevant to the determination of obviousness, it bears no weight on whether a patent is infringed, emphasizing that infringement assessments compare accused devices to patent claims, not to the patentee's products. 

In addressing allegations of inequitable conduct, Bartell contended that Allen failed to disclose its prior Red Rider model to the Patent and Trademark Office (PTO). To succeed in this claim, Bartell must establish that Allen intentionally withheld material information to deceive the PTO, which requires clear and convincing evidence. The district court found no abuse of discretion in its ruling that Allen did not engage in inequitable conduct, as Bartell lacked direct evidence of intent to deceive. Bartell's assertion of Allen's gross negligence in withholding information was deemed insufficient to establish the necessary intent, as established in prior case law, which states that gross negligence alone does not imply intent to deceive.

Bartell contends that the nondisclosure of the Red Rider model indicates an intent to deceive, claiming its materiality justifies this inference. However, materiality alone does not imply intent, which is required for establishing inequitable conduct, as highlighted in Allen Organ Co. v. Kimball Int'l, Inc. The evidence provided is insufficient to demonstrate deceptive intent, and the district court's determination of no inequitable conduct by Allen is upheld.

Regarding the on-sale bar under 35 U.S.C. § 102(b), Bartell asserts that sales of the Red Rider prior to the July 13, 1990 application date invalidate the '220 patent. Bartell argues these sales were commercial, as customers were not notified of the experimental nature of the model, and links the Red Rider's features to the '220 patent claims. In contrast, Allen disputes this claim, arguing that the Red Rider lacked critical features of the '220 patent and was primarily sold for experimentation, as indicated by customer representations and trade-in guarantees that suggested it was an experimental machine.

To establish an on-sale bar, Bartell must prove that the Red Rider either fully anticipated the claimed invention or made it obvious in light of prior art, based on the standards set in relevant case law. This requires Bartell to demonstrate, with clear and convincing evidence, that before the critical date of July 13, 1989, the Red Rider was commercially offered for sale and was ready for patenting. This assessment involves traditional contract law principles to evaluate whether a commercial offer occurred.

The excerpt outlines factors considered in determining whether a transaction is primarily for experimentation, as referenced in Group One, Ltd. v. Hallmark Cards, Inc. This includes assessing public testing necessity, the inventor's control over the experiment, the nature of the invention, test duration, payment, secrecy obligations, record-keeping, who conducted the experiment, commercial exploitation during testing, and the nature of contacts with potential customers. 

The second prong of the Pfaff test can be met by showing either reduction to practice or sufficiently detailed drawings or descriptions before the critical date. The on-sale bar is assessed on a claim-by-claim basis, meaning some patent claims may be barred while others are not. The determination of whether a sold device embodies a claimed invention is a primary step in the on-sale bar analysis, although proving that a device was sold for experimentation can negate the statutory bar.

The district court focused on the experimental nature of the Red Rider, determining it was an experimental prototype subject to constant modifications. It concluded that public use under section 102(b) does not commence the one-year period until the invention is no longer experimental. The court found that any issues faced by users were addressed by repairs or replacements, and adequate research could not occur in a factory setting. However, the court ultimately erred by concluding that sales of the Red Rider did not trigger an on-sale bar solely due to its experimental status.

The court determined that the Red Rider was an unfinished experimental prototype, given that Allen's customers received repair or replacement guarantees and that testing was necessary on job sites. However, these findings alone do not establish whether the Red Rider's sales constituted a commercial offer under the Pfaff test. The key factor in distinguishing commercial sales from experimental ones is not the overall development status of the invention but rather the specific purpose of the sale. If the sale primarily served experimental needs rather than commercial exploitation, it does not trigger an on-sale bar. This principle affirms that a sale can be exempt from the section 102(b) bar if its primary purpose is experimentation. The determination of whether a sale is for experimentation hinges on whether it was not incidental to the primary goal of experimentation, assessed through an objective evaluation of the surrounding facts. Once an invention is fully realized, the experimental use exception no longer applies. The court must revisit the initial findings regarding the sales of the Red Rider to evaluate if they were commercial and not merely incidental to experimentation, guided by established factors in prior cases. The previous ruling on the absence of an on-sale bar was vacated, necessitating further investigation into the circumstances of the sales.

The assessment of the inventor's control over experiments includes evaluating the duration of the test period, record-keeping practices, the individuals conducting the experiments, the extent of commercial exploitation during testing, systematic testing procedures, and ongoing monitoring by the inventor. Testing intended to determine the suitability of the Red Rider for specific customers does not qualify for the experimental use exception. The court must examine the relationship between Allen and its customers, focusing on whether payments indicate a commercial transaction, any secrecy obligations, and the nature of customer interactions. Testimony from Allen's president about market intentions and lack of communication regarding experimental use undermines claims of an experimental relationship. Typical commercial sales features, such as trade-in guarantees, are inadequate to establish this relationship.

Should the district court find that some Red Rider sales were commercial rather than experimental, it must evaluate: 1) if the Red Rider embodies the invention described in any claims of the '220 patent or would render those claims obvious, and 2) if the "ready for patenting" criterion was met at the time of sale. The court needs to interpret the claims of the '220 patent and establish connections between the Red Rider's elements and those claims, irrespective of whether the Red Rider is deemed a fast-steering trowel, as the claim's preamble is not limiting. The initial performance of the product does not affect this assessment, and modifications to non-claimed features do not negate the possibility of an on-sale bar.

Experiments concerning non-claimed features of an invention are excluded from certain legal considerations. Bartell contends that a typographical error on the sticker of Allen's Flying Frame trowel failed to provide adequate public notice under 35 U.S.C. § 287(a) regarding its patent status. Bartell references SRI International, Inc. v. Advanced Technical Laboratories, Inc., but the typo—specifically a misplaced semicolon—did not impede the public's ability to discern the correct patent number, as those interested could easily identify it. Thus, the claim that there was a failure to mark is unfounded, and Bartell did not dispute that the trowels were properly labeled. Consequently, the district court's ruling that the sticker constituted effective notice under 35 U.S.C. § 287(a) is affirmed.

Additionally, both parties' counsels demonstrated a strong commitment to advocacy, though at times excessively so, neglecting their duty as officers of the court. Judge Bennett emphasizes that zealous advocacy must be balanced with the obligation to promote justice and adhere to court rules. Counsel are expected to continually assess their positions in light of evolving litigation and relevant case law. In this case, there were instances where counsel obscured crucial legal issues instead of clarifying them, contributing to the prolonged nature of the proceedings. Specific distractions included debates over the classification of the Red Rider as a "fast-steering" trowel and irrelevant claims regarding Bartell's alleged copying of the Flying Frame.

Serious misstatements of applicable law were identified, including a mischaracterization of the holding in Graham v. John Deere and the erroneous reference to a Fifth Circuit "synergism" test for patentability, which was abrogated in this Circuit by Stratoflex, Inc. v. Aeroquip Corp. The record demonstrates significant obfuscation and mischaracterization by counsel. It is expected that counsel will improve their performance on remand and assist the court effectively in future proceedings. The decision is affirmed in part, reversed in part, vacated in part, and remanded. Additionally, while the district court noted specific Bartell trowel model numbers linked to infringement of the '220 patent, there is confusion regarding the model designations "Bartell. 1" and "Bartell. 2," which should be clarified on remand.