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Opinions of Counsel for Patentee Are Not Necessarily Relevant in Determining Whether a Case Is Exceptional

01-1043
February 01, 2002

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Last Month at the Federal Circuit - March 2002

Judges: Linn (author), Mann, and Clevenger

The Federal Circuit reversed a grant of SJ of noninfringement and affirmed the denial of a motion to declare the case exceptional pursuant to 35 U.S.C. § 285 in Epcon Gas Systems, Inc. v. Bauer Compressors, Inc., No. 01-1043 (Fed. Cir. Feb. 1, 2002).

Epcon Gas Systems, Inc. (“Epcon”) is the exclusive licensee of U.S. Patent No. 5,118,455 (“the ‘455 patent”) that is directed to a method and apparatus for providing gas assistance to a resin injectionmolding process. Epcon filed suit for infringement against Bauer Compressors, Inc. (“Bauer”), Epcon’s competitor in the injection molding accessory business. Bauer manufactured a nitrogen control unit (“NCU”) that could be used in gas-assisted injection molding. Bauer also sold equipment and gas supplies, such as bottled nitrogen and nitrogen generators/ compressors, to businesses engaging in gas-assisted injection molding. Bauer argued noninfringement of the ‘455 patent because its NCU did not have a supply of stored gas physically combined as a single unit with the NCU and it used only one valve for selective reduction of gas pressure and venting of gas at the end of the molding process. After construing the claims, the district court granted SJ of noninfringement in favor of Bauer, declined to rule on Bauer’s motion for SJ of invalidity, and denied Bauer’s motion to declare the case exceptional in order to warrant award of attorney fees.

On appeal, the Federal Circuit affirmed-in-part and reversed-in-part the district court’s construction of the disputed limitations of the claims. In doing so, the Federal Circuit ruled that the district court had erred in construing method claim 2 of the patent-in-suit as subject to 35 U.S.C. § 112, ¶ 6. The Court characterized claim 2 as a garden-variety process claim that is not in step-plus-function form.

The Federal Circuit affirmed the district court’s finding that the preambles of claims did not require the accused device/method to include a complete injection-molding system. The Court determined that the apparatus and method claims are in Jepson format, because the prosecution history indicated that the patent owner had complied with the Examiner’s statement that the claims were Jepson claims. Despite this finding, the Court stressed that the claims recited an apparatus and method for providing gas assistance to a resin injection-molding process, not for performing complete injection-molding processes, as Bauer had argued.

Because the Court found claim 2 not to be subject to § 112, ¶ 6, it determined that the district court had improperly read language from the specification into the claim by construing the phrase “prior to the venting of the gas from the mold” to require separate valves for venting and selectively reducing pressure, as disclosed.

After construing the claims, the Court found that a genuine issue of material fact existed as to whether there was direct infringement, because Epcon had offered evidence that Bauer performed demonstrations for several customers that may have included practicing the method of claim 2.

The Court also affirmed the district court’s denial of Bauer’s motion to declare the case exceptional. Bauer argued that Epcon had filed the action without investigating infringement, without receiving a favorable infringement or validity opinion from counsel, and without evidence of direct infringement, instead basing its complaint, in part, upon rumor. The Court found the issue of validity opinions to be irrelevant because the district court had made no findings concerning validity. Epcon’s failure to obtain a favorable infringement opinion prior to filing suit, though relevant, was not conclusive. In fact, because the record showed sufficient evidence to preclude SJ of noninfringement, the Court found Epcon’s failure to obtain that opinion to be of diminished significance. The Court further noted that, even assuming the licensee’s failure to perform an adequate infringement investigation prior to filing suit, this fact alone did not mandate a ruling that the case was exceptional.