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Exclusion of Prior Art Is Appropriate If an Explanation of Why the Prior Art Is Invalidating Is Not Provided in Response to an Interrogatory Requesting the Same

August 28, 2012
Cooley, Daniel C.

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Last Month at the Federal Circuit - September 2012

Judges: Linn (author), Dyk, Reyna

[Appealed from: S.D. Fla., Judge Hurley]

In Woods v. DeAngelo Marine Exhaust, Inc., No. 10-1478 (Fed. Cir. Aug. 28, 2012), the Federal Circuit affirmed an evidentiary ruling excluding prior art, a denial of a motion for sanctions, and a denial of a motion for JMOL as to the invalidity and infringement of U.S. Patent Nos. 5,740,670 (“the ’670 patent”) and 6,035,633 (“the ’633 patent”).

The technology-at-issue involved water jacketed marine exhaust systems. The patents-in-suit disclose an apparatus where the tail end of the outer liner and the tail end of the inner liner both taper. This tapering configuration reduces turbulence and directs cooling water into the exhaust stream to more efficiently cool the exhaust.

Woodrow Woods filed U.S. Patent Application No. 08/419,097 (“the ’097 application”), claiming a water jacketed exhaust system. Woods then filed U.S. Patent Application No. 08/580,548 (“the ’548 application”) as a CIP of the ’097 application and with broader claims than the ’097 application.

The examiner rejected the ’097 application as anticipated by U.S. Patent Nos. 5,212,949 (“Shiozawa”) and 799,013 (“Moffitt”). Woods did not respond to the rejection, allowing the ’097 application to go abandoned while continuing to prosecute the ’548 application, which issued as the ’670 patent.

Before the ’548 application issued as the ’670 patent, Woods filed CIP Application No. 08/990,821 (“the ’821 application”). The examiner rejected the ’821 application as anticipated by U.S. Patent No. 4,977,741 (“Lulloff”). Woods amended the claims and argued that Lulloff did not anticipate the claims as amended. The examiner allowed the claims, and the ’821 application issued as the ’633 patent. Woods licensed both patents to Marine Exhaust Systems, Inc. (“MES”).

Members of the industry informed MES that DeAngelo Marine Exhaust, Inc. (“DeAngelo”) was selling exhaust systems that were believed to infringe the Woods patents. MES wrote a letter to DeAngelo and later photographed an allegedly infringing DeAngelo device. After reviewing these photographs, MES and Woods filed suit.

Woods’s suit alleged that DeAngelo infringed one or more claims of the ’670 patent and the ’633 patent. DeAngelo responded that it did not infringe the patents and that the claims were invalid. During discovery, MES sent DeAngelo an interrogatory requesting DeAngelo’s prior art and the reasons why the prior art anticipated the claims or rendered them obvious. The day before discovery closed, DeAngelo located engineering drawings that allegedly predated the patents and forwarded the drawings to MES with a letter stating that “[t]hese documents arguably may anticipate the Woods invention(s), or may be relied upon as showing the state of the art in the early 1990’s.” Slip op. at 5 (citation omitted). DeAngelo inquired if MES had an objection to DeAngelo’s use of the drawings. MES did not object at that time.

At the beginning of trial, MES moved to strike DeAngelo’s engineering drawings because DeAngelo had failed to adequately supplement their interrogatory responses with information about the drawings. The district court found a violation of Fed. R. Civ. P. 26(e) and excluded the drawings. The jury found both patents valid and infringed. DeAngelo renewed motions for JMOL on validity and infringement, which the district court denied. The district court also denied DeAngelo’s motion for sanctions against Woods and MES. DeAngelo appealed each of these issues.

On appeal, the Federal Circuit held that MES had not committed waiver when MES did not initially object to DeAngelo’s disclosure of the drawings. The Court then held that Rule 26(e) was violated even though DeAngelo timely produced the drawings. The Court reasoned that the interrogatory in question did more than require the identification of documents—it requested that DeAngelo “identify why such prior art anticipates such claims or renders them obvious.” Id. at 15 (citation omitted). The Court noted that, “[i]n order for MES to have an opportunity to meaningfully challenge DeAngelo’s reliance on the drawings as prior art . . . , it would have needed to know what features of the drawings DeAngelo contended rendered MES’s patents obvious on a claim-by-claim basis.” Id. at 15-16. The Court held that the district court was “well within its discretion in excluding the drawings under Federal Rule of Civil Procedure
37(c).” Id. at 16.

Regarding noninfringement, the Court noted that testimony regarding the “hose bead” and the “tapered surface” ultimately resulting from the hose bead was a legally sufficient basis on which the jury could have found infringement. Significantly, DeAngelo had admitted that all of its products contained a hose bead.

Finally, DeAngelo alleged that MES and Woods filed this lawsuit without conducting an adequate presuit investigation of DeAngelo’s products. The Court held that the record was “replete with evidence supporting the district court’s conclusion that MES conducted a sufficient pre-filing investigation including photographing and studying photographs of DeAngelo’s accused products.” Id. at 27. MES had also directly requested from DeAngelo information about DeAngelo’s allegedly infringing devices. The Court noted that this was not a case where MES sued without seeking access to examine allegedly infringing devices. The Court held that the district court did not abuse its discretion in declining to sanction MES.

Thus, the Court affirmed the district court’s rulings.