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Right to Jury Trial Not Guaranteed

July 16, 2001

Decision icon Decision

Last Month at the Federal Circuit - August 2001

Judges: Linn (author), Lourie, and Bryson

In Tegal Corp. v. Tokyo Electron America, Inc., No. 00-1009 (Fed. Cir. July 16, 2001), the Federal Circuit affirmed a district court’s decision that Tokyo Electron America, Inc. (“TEA”) had no right to a jury trial because the Plaintiff, Tegal Corporation (“Tegal”), sought only injunctive relief and TEA had asserted no counterclaims, only affirmative defenses. The Court also affirmed that the asserted claims were not obvious and were infringed by TEA and that Tegal had not engaged in inequitable conduct. In its ruling, the Court also vacated the district court’s grant of an injunction, its finding of willfulness, and related award of attorney fees and remanded the case for further proceedings on anticipation.

Tegal asserted reexamined U.S. Patent No. 4,464,223 (“the ‘223 patent”) against TEA. The ‘223 patent is directed to plasma reactors used in the fabrication of semiconductor devices. Tegal initially sought both injunctive and monetary relief and requested a jury trial on the issues. Shortly before the trial’s commencement, however, Tegal dropped its claim for damages, requested only injunctive relief, and withdrew its jury trial request. The district court granted Tegal’s request and subsequently denied TEA’s motion for reconsideration of the order. After the bench trial, the district court concluded that Tegal was entitled to a permanent injunction and attorney fees based on TEA’s willful infringement of the ‘223 patent.

On appeal, TEA claimed that the district court had improperly denied it the right to a jury trial because (1) it had an independent right to a jury trial; (2) the district court had improperly focused only on the nature of the remedy—injunctive relief—as opposed to the nature of the action; and (3) the district court had violated Fed. R. Civ. P. 38(d) and 39(a). TEA also challenged the district court’s finding that the asserted claims were valid and enforceable and that it had committed willful infringement. TEA also took issue with the district court’s grant of the injunction.

The Federal Circuit noted that it was a matter of first impression as to whether a defendant, asserting only affirmative defenses and no counterclaims, had a right to a jury trial when the only remedy sought by the plaintiff-patentee was an injunction. After considering both the Supreme Court’s and its own precedent, the Federal Circuit concluded that since an injunction is a purely equitable remedy, a jury trial, when requested, is required only in cases seeking damages and not in cases calling for only injunctive relief.

Before turning to TEA’s affirmative invalidity defenses, the Court found that the district court’s construction of the term “electrode” had been too broad because it did not fully consider statements in the prosecution history that excluded the term “spiked electrode” from the scope of claims. The Court also construed “plasma” as a charged collection of particles generated by the high and/or low frequency electric fields established between the electrodes and excluding arc or spike discharges, such as would emanate from a spiked electrode.

Against these constructions, the Court concluded that the district court had made an erroneous evaluation of TEA’s anticipatory reference, Itakura, but chose to remand the case for further construction on the issue because the district court had made no findings regarding certain disputed limitations of claims 1 and 7. The Court also concluded that the district court had not committed reversible error when it determined that the ’223 patent was not invalid for obviousness over a Nippon Telegraph and Telephone Corporation (“NTT”) reference, finding that TEA had failed to prove that it was obvious to make its suggested alterations and that secondary indicators of nonobviousness favored Tegal.

The Federal Circuit also let stand the lower court’s ruling against inequitable conduct because even though Tegal had discovered the NTT reference through the prosecution of a Japanese counterpart application and had failed to report it during the reexamination of the ‘223 patent, TEA had failed to establish the NTT reference as noncumulative and, therefore, material.

The Federal Circuit also held that the district court had not erred in its determination that TEA had infringed claims 1 and 7 of the ‘223 patent. But, since it vacated the determination of anticipation, the Court concluded that a willfulness ruling was premature. The Court also cautioned the lower court that an award of attorney fees is only appropriate under 35 U.S.C. § 285 when damages are sought, not when equitable relief is requested. Finally, the Court vacated the injunction in view of its decision to vacate and remand the determination that the ’223 patent is not invalid.