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Patentee Must Show Prima Facie Infringement for Each Accused Product Before Burden Shifts to Accused Infringer to Offer Contrary Evidence

December 14, 2006

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Last Month at the Federal Circuit - January 2007

Judges: Mayer, Clevenger, Bryson (author) 

[Appealed from: E.D. Mich., Judge O’Meara]

In L&W, Inc. v. Shertech, Inc., Nos. 06-1065, -1097 (Fed. Cir. Dec. 14, 2006), the Federal Circuit vacated and remanded a SJ ruling of infringement of claim 7 of U.S. Patent No. 5,670,264 (“the ’264 patent”), but affirmed a jury verdict finding claim 7 valid and claim 10 invalid.

L&W, Inc. (“L&W”) sued Shertech, Inc. and Steven W. Sheridan (collectively “Shertech”) seeking a DJ that its line of automotive heat shields did not infringe “The specification often supplies the critical context to construe the claim language.” Slip op. at 7.

Shertech’s ’264 patent and that the ’264 patent was invalid and unenforceable. Following cross-motions for SJ, the district court entered SJ of infringement. A jury found all of the asserted claims invalid with the exception of claim 7. The district court denied L&W’s motions for a new trial or JMOL regarding claim 7, denied Shertech’s motions for a new trial or JMOL regarding claim 10, and entered judgment of infringement against L&W.

The manufacturing steps L&W uses in producing its heat shields include stacking thin metal sheets, crimping or hemming the edges of the sheets to hold them together, pressing dimples or embossments into the stack of metal sheets, and pressing the stack into its final form. The district court held that the metal layers that make up the heat shields covered by claim 7 required “standoffs” and that this term means “a projection that either separates or has the potential to separate.” Neither party disputed this construction.

On appeal, Shertech argued that L&W’s acknowledged infringement of the “standoffs” limitation in a patent application that L&W filed, which according to Shertech, discloses a multilayer heat shield that would form air gaps between the embossed metal layers at an elevated temperature. While the Court acknowledged that the application stated that undulations will cause the metal layers of some embossed heat shields to separate at elevated temperatures, it held that L&W did not admit that their accused heat shields contained similar undulations or operated at the same elevated temperatures as those referred to in the application.

Further, the Court found that general statements about heat-shield structure and performance made by Shertech’s expert lacked the specificity necessary to establish that the metal layers of L&W’s accused heat shields have separations sufficient to satisfy the “standoffs” limitations. Moreover, the Court questioned the significance of an experiment performed by Shertech’s expert because of the differences between the experimental design and L&W’s accused heat shields.

In addition, Shertech’s expert analyzed only one of the sixteen L&W accused heat shields and stated that the device he analyzed was typical of all sixteen. Shertech argued that it was L&W’s obligation to refute the assumption that the analyzed device was typical of all sixteen if it genuinely believed there were relevant distinctions among the accused devices. The Court disagreed, holding that Shertech could not assume that all of L&W’s products were like the one analyzed and then shift the burden to L&W to prove the contrary. Instead, “[w]hen a patentee with the burden of proof seeks summary judgment of infringement, it must make a prima facie showing of infringement as to each accused device before the burden shifts to the accused infringer to offer contrary evidence.” Slip op. at 9. Accordingly, the Court vacated and remanded the SJ of infringement of claim 7.

L&W also appealed the validity verdict of claim 7 and Shertech cross-appealed the invalidity verdict of claim10. In particular, both parties argued that it was inconsistent for the jury to find independent claim 7 valid while finding claim 10, which depends from claim 7, invalid. While L&W asserted that claims 7 and 10 should both be found invalid, Shertech asserted that both should be held valid. The Court, however, concluded that both parties waived their objections to the inconsistency because neither party objected before the jury was discharged or immediately thereafter. In so finding, the Federal Circuit applied the Sixth Circuit’s procedural law and policy whereby “a party waives its objection to inconsistency in a jury’s verdict if the party had an adequate opportunity to object but failed to do so.” Id. at 11.

The Federal Circuit also stated that the Sixth Circuit would likely reject that a “plain error” exception applies to the waiver rule to avoid “misuse of procedural rules to obtain a new trial when inconsistencies are most efficiently resolved by the original jury.” Id. at 12. The Court explained that the rule promotes judicial efficiency in allowing the original jury to resolve the inconsistency and that each party had an adequate opportunity to object. The Court also reasoned that lawyers should be aware of the possibility that use of Fed. R. Civ. P. 49 for specific factual findings from the jury could result in inconsistent responses. The Court noted the verdict in this case was simple, the inconsistency should have been obvious, and the parties could have objected before the court discharged the jury or immediately thereafter.