WCM Industries v. IPS Corporation

Court
Court of Appeals for the Federal Circuit
Full Name
WCM Industries, Inc. v. IPS Corporation
Short Name
WCM Industries v. IPS Corporation
Nickname
WCM Industries
Initiated
not set
Decided
February 5, 2018
Citation(s)
not set
Tags
infringement, willfulness, doctrine of equivalents, enhanced damages, marking, standard of review, judgment as a matter of law, evidence

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Overview

WCM Industries v. IPS Corporation presents a complex mixture of issues that stands in stark contrast to the relative simplicity of the technology involved—the bathtub drain assemblies described in U.S. Patent No. 8,302,220 [text], U.S. Patent No. 8,321,970 [text], and U.S. Patent No. 8,584,272 [text]. The Court of Appeals for the Federal Circuit considered questions relating to evidence requirements to prove infringement under the doctrine of equivalents, willful infringement in the wake of the Supreme Court's decision in Halo Electronics v. Pulse Electronics, and whether the district court made appropriate use of its discretion to award enhanced damages.

Notes

standard of review | judgment as a matter of law

Federal Circuit reviews a district court's grant or denial of judgment as a matter of law under the law of the circuit of the district court

The Court noted that it reviews the grant or denial of judgment as a matter of law under the law of the circuit of the district court. Applying the law of the Sixth Circuit here, the Court reviewed the request to reverse the district court’s judgment as a matter of law de novo.

infringement | doctrine of equivalents | evidence

Expert opinion testimony not required to prove infringement under the doctrine of equivalents, and a product-to-product comparison may be sufficient in specific circumstances

Setting aside a jury finding of infringement under the doctrine of equivalents, the district court granted IPS's motion for judgment as a matter of law that it did not infringe under the doctrine. On appeal, WCM sought reversal of the district court's judgment on grounds that the decision "rested on a misapprehension of the law."

The district court's holding rested on a lack of opinion testimony on infringement. The court had excluded WCM’s expert opinion on equivalents, and, with the lack of an expert opinion, noted that none of the evidence introduced at trial was sufficient to prove infringement under the doctrine of equivalents. According to WCM, this handling of the evidence amounted to "an improper per se rule that opinion testimony—and in particular, expert testimony—is required to establish equivalency."

On review, the Court agreed with WCM that current law has no such per se rule:

"[O]ur precedent does not require opinion testimony, and certainly does not require expert opinion testimony, for a finding of equivalence. Rather, [p]roof can be made in any form: through testimony of experts or others versed in the technology; by documents, including texts and treatises; and, of course, by the disclosures of the prior art." (citing Graver Tank & Mfg. Co. v. Linde Air Prod. Co., 339 U.S. 605, 609 (1950) (internal quotation omitted))

The Court then considered the question of whether the record includes sufficient evidence to support the jury finding that the claimed “lugs” limitation was met by equivalents. The court ultimately concluded that WCM did present sufficient evidence to support the jury finding of infringement by equivalents.

Interestingly, as part of its review of the evidence, the Court considered the question of whether testimony that compared a commercial product to an accused product, i.e., a product-to-product comparison, was proper in this circumstance. Typically, of course, infringement evidence is directed to a comparison between the asserted claims and an accused product, i.e., a claim-to-product comparison.

The Court explained that "case law does not contain a blanket prohibition against comparing the accused product to a commercial embodiment in an infringement analysis" (internal quotation and citation removed). Here, the Court reasoned that a product-to-product comparison was sufficient to establish infringement under the doctrine of equivalents because the commercial embodiment meets all claim limitations, there was only one claim limitation in dispute, the claim language was understandable, and the invention involved "straightforward mechanical technology." According to the Court, these factors work together to "mitigate any risks that might typically arise when devices are compared."

Don't expect to see a plethora of these product-to-product comparisons in litigation anytime soon, though as the Court was careful to stress that this applies "in the specific circumstances presented here." (emphasis added)

willful infringement | evidence

Applying Halo for willful infringement—specific knowledge of asserted patent not required

Review the district court's denial of judgment as a matter of law of no willfulness, the Court applies the new test for willful ingringement established by the Supreme Court decision in Halo Elecs., Inc. v. Pulse Elecs., Inc. (136 S. Ct. 1923, 1930 (2016)). Prior to Halo, the Federal Circuit's two-prong Seagate test required proof of both objective and subjective willfulness. On review here, the Court explained that, while Halo rejected the objective prong, it did not disturb the subjective prong and even "emphasized that subjective willfulness alone…can support an award of enhanced damages.” The Court also noted that Halo changed the standard of proof for willfulness, moving it from the clear-and-convincing standard of Seagate to "the less demanding preponderance of the evidence standard."

Turning to the case at hand, the Court flatly rejected an argument based simply on the lack of evidence that the infringer had knowledge of the patents in suit, explaining that there is no per se rule that the infringer have knowledge of the infringed patent. Rather, the law "looks to the totality of the circumstances presented in the case." (internal quotation omitted; citation omitted)

Looking at the evidence, the Court noted that WCM's products were marked "patent pending" and that WCM had introduced evidence of a culture of copying at IPS. As a result, the Court concluded that the patentee had provided sufficient evidence to support a jury finding that IPS committed willful infringement.

enhanced damages

Treble damages, with only a conclusory statement of the basis for the award, not received well on appeal

Reviewing the district court's decision to treble damages, the Court noted that district court's have a narrow channel of discretion (citing Halo) and that "there is no requirement that enhanced damages must follow a finding of egregious misconduct." (emphasis added) The Court noted that the district court looked to the optional Read factors, "but for many of the factors, the court’s analysis was either non-existent or incorrect."

Based on its own analysis of the Read factors, and consideration of the fact that the district court failed to provide a suitable explanation of its basis for awarding treble damages, the Court ultimately vacated the award and instructed the district court to reconsider.

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