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Lack of Specificity in Preverdict JMOL Motion Proves Fatal

February 28, 2003

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Last Month at the Federal Circuit - March 2003

Judges: Plager (author), Michel, and Lourie

In Duro-Last, Inc. v. Custom Seal, Inc., No. 02-1218 (Fed. Cir. Feb. 28, 2003), the Federal Circuit reversed a postverdict JMOL that the patents-in-suit were not invalid for obviousness. The Court ruled that the patentee had waived its rights to make a postverdict motion for JMOL on the issue of obviousness because it had not been sufficiently specific in identifying that issue in its preverdict motions for JMOL based on inequitable conduct and the on-sale bar.

Duro-Last, Inc. (“Duro-Last”) brought a patent-infringement action against Custom Seal, Inc. (“Custom Seal”) for infringement of U.S. Patent Nos. 4,652,321 and 4,872,296 (“the ‘296 patent”). At the close of evidence, Duro-Last made a preverdict motion for JMOL directed to the defenses of inequitable conduct and the on-sale bar. The district court denied these motions. Duro-Last did not make a preverdict JMOL motion specifically directed to the issue of obviousness. The jury returned a verdict that the patents had both been infringed, but were invalid for obviousness.

After the district court entered judgment on the jury verdict, Duro-Last filed a motion for JMOL that the patents were not invalid for obviousness. Custom Seal objected to the motion on the ground that the issue had not been properly raised in a JMOL motion at the close of evidence, as required by Fed. R. Civ. P. 50. The district court, however, determined that obviousness was a component of the timely JMOL motions made by Duro-Last before the case was submitted to the jury. Accordingly, the district court concluded that the JMOL motion was proper and granted JMOL that Custom Seal had failed to prove obviousness of either patent. Custom Seal appealed, arguing that Duro-Last did not properly raise the obviousness issue in the preverdict JMOL motion.

Noting that a postverdict JMOL motion may not be made on grounds not raised in an earlier motion, the Federal Circuit analyzed whether Duro-Last’s preverdict JMOL motion raised the obviousness issue with enough specificity to meet the requirements of Rule 50 and to avoid a waiver. Duro-Last argued that its preverdict motions for a JMOL on the issues of on-sale bar and inequitable conduct preserved its right to make the postverdict motion on the issue of obviousness. The Federal Circuit rejected this argument because the various unenforceability and invalidity defenses that may be raised by a defendant— inequitable conduct, the several forms of anticipation and loss of right under § 102, and obviousness under § 103—each require different elements of proof.

Specifically, the Court ruled that Duro- Last’s inequitable conduct and on-sale bar JMOL motions failed to address several of the specific obviousness issues that Duro-Last raised in its postverdict Rule 50(b) motion on obviousness, including whether there was a motivation to combine the asserted prior-art references. Since its postverdict JMOL motion was not supported by the required preverdict Rule 50(a) motion on obviousness, Duro-Last had waived its right to challenge any factual findings underlying the jury’s obviousness verdict. Accordingly, in reviewing the jury’s verdict for obviousness, the Federal Circuit presumed that the jury had resolved all the underlying factual disputes in Custom Seal’s favor. Under this presumption, the Federal Circuit affirmed the jury’s obviousness verdict, finding it supported by the presumed factual findings. As such, the Federal Circuit reversed the district court’s judgment to the contrary.

The jury had also found, with an advisory verdict, that Duro-Last had failed to inform the PTO of material art during prosecution of the ’296 patent with the intent to mislead or deceive the PTO. Despite this finding, the district court concluded that the prior art was “only marginally material” and there was “little or no intent to deceive.” On this basis, the district court refused to find inequitable conduct. Giving deference to the district court’s credibility determination on the issue of intent to deceive, the Federal Circuit ruled that the district court did not abuse its discretion in finding no inequitable conduct and, therefore, affirmed the judgment.