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Examiner’s Remarks Do Not Negate Effect of Applicant’s Disclaimer

February 13, 2003

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Last Month at the Federal Circuit - March 2003

Judges: Bryson (author), Mayer, and Gajarsa

In Springs Window Fashions LP v. Novo Industries, L.P., No. 02-1309 (Fed. Cir. Feb. 13, 2003), the Federal Circuit affirmed a district court’s SJ of noninfringement and SJ dismissing counterclaims of tortious interference and disparagement.

The patent-in-suit, U.S. Patent No. 6,178,857 (“the ‘857 patent”), relates to a method of trimming window blinds. The patent was assigned to Shade-O-Matic, Ltd. (“Shade-O-Matic”), who licensed it to Springs Window Fashions LP (“Springs Window”). Because windows vary in size, a retail store may either order custom-sized blinds from a factory or order stock sizes of blinds and then cut them to the appropriate size when the blinds are purchased. The asserted claims recite a method of trimming the width of venetian blinds having a head rail, a plurality of slats, and a bottom rail using, inter alia, “cutting means including a first cutter for cutting said head rail and a separate second cutter for cutting at least said slats.”

Springs Window filed suit against Novo Industries, L.P. (“Novo”), asserting that Novo infringed claims 1, 2, 8, and 10 of the ‘857 patent. In Novo’s device, a single plate with multiple blades cuts the head rail, bottom rail, and slats. The plate has a series of openings for the rails and slats, and has blades that correspond to the openings. When the plate is moved, the blades cut the rails and slats.

In the district court, Novo moved for SJ, arguing that its device did not employ “separate” cutters within the meaning of the asserted claims. Springs Window countered that the term “separate” did not require the cutters to be independently movable, but onlyrequires that the machine have distinct cutting edges. The district court agreed with Novo, construing the term “separate” to mean capable of independent movement.

The Federal Circuit confirmed the district court’s construction, relying on the prosecution history of the ‘857 patent. During prosecution, the Examiner had rejected the claims based on a patent issued to Pluber having three blades mounted on one sliding support plate. The Pluber configuration is similar to the accused configuration. In response, the applicant amended the claims, distinguished Pluber, and argued that Pluber was not prior art because it postdated the grandparent application. The applicant argued that Pluber does not provide two separate cutters and shows only one movement arm that has to move all three cutting blades.

In the second Office Action, the Examiner maintained the rejections based on Pluber. The Examiner rejected the applicant’s contention that Pluber lacked two separate cutters, noting that each of Pluber’s cutters is separably mounted to the plate and separately cuts a portion of the blinds. In response to that action, the applicant argued that Pluber was not a prior art reference and adhered to its argument distinguishing its invention from Pluber. The Examiner then issued a Notice of Allowance without further comment.

Springs Window conceded that the applicant had amended the claims to include the word “separate” to distinguish the invention from Pluber. The Federal Circuit found that, in distinguishing Pluber, the applicant had disclaimed a single plate with multiple blades or cutting edges on that single plate.

Springs Window argued that the Examiner did not agree that the amended claims distinguished over Pluber and, therefore, that the claims should not be limited based on the applicant’s argument that they did. The Federal Circuit found that although it was not clear why the Examiner allowed the claims, the Examiner’s remarks did not negate the effect of the applicant’s disclaimer. The Federal Circuit stated that a reasonable competitor, reviewing the amendments and statements made by the applicant to distinguish the invention from Pluber, would conclude that the claimed invention did not cover a device like that disclosed in Pluber.

With respect to the counterclaims of tortious interference and disparagement, Novo alleged that Springs Window made wrongful accusations of infringement against Novo to Novo’s prospective and current customers and that Springs Window was either aware of, or acted with reckless disregard for, the noninfringement or unenforceability of the ‘857 patent.

During the SJ proceedings, Novo had requested a continuance and discovery pursuant to Fed. R. Civ. P. 56(f) to pursue deposition testimony on the counterclaims. The Federal Circuit found that the district court did not abuse its discretion in denying Novo’s Rule 56(f) request because Novo had failed to pursue its counterclaims diligently and there was no reason to believe any pending discovery would reveal evidence of Springs Window’s bad faith.

As to the merits of the grant of SJ with respect to tortious interference and disparagement, the Federal Circuit found that the evidence negated, rather than supported, badfaith enforcement of the patent. Novo’s evidence of alleged bad-faith enforcement included a June 2001 opinion letter procured by Springs Window that supported Springs Window’s claim that Novo infringed the ‘857 patent claims and a license agreement between Shade-O-Matic and Novo.

With respect to the opinion letter, the Federal Circuit agreed with the district court, which found that all evidence indicated that Springs Window believed their proposed interpretation was correct and that Novo was infringing. With respect to the license agreement, the Federal Circuit disagreed with Novo’s argument that Springs Window should have known that the ‘857 patent might be covered by the license agreement when it communicated with the customers. The Federal Circuit stated that the ‘857 patent appears to claim a method that applies to horizontal, and not vertical, blinds, while the license agreement appears to limit itself to the cutting of vertical blinds.