CVI/Beta Ventures, Inc. v. Tura LP

• Citation: 112 F.3d 1146,42 USPQ2d 1577
• Decision Date: 01 May 1997
• Docket Number: No. 96-1167,96-1167
• Parties: CVI/BETA VENTURES, INC., Plaintiff-Appellee, Marchon Eyewear, Inc., Marcolin USA, Inc., and Rothandberg, Inc., Plaintiffs-Appellees, v. TURA LP and Brodart Co., Defendants-Appellants, and Arthur Brody, Defendant, and Bracken Opticians, Defendant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1146

112 F.3d 1146

42 U.S.P.Q.2d 1577

CVI/BETA VENTURES, INC., Plaintiff-Appellee, Marchon Eyewear, Inc., Marcolin USA, Inc., and Rothandberg, Inc., Plaintiffs-Appellees, v. TURA LP and Brodart Co., Defendants-Appellants, and Arthur Brody, Defendant,

and

Bracken Opticians, Defendant.

No. 96-1167.

United States Court of Appeals,

Federal Circuit.

May 1, 1997.

James J. Maune, Brumbaugh, Graves, Donohue & Raymond, New York City, argued, for plaintiff-appellee CVI/BETA Ventures, Inc. Of counsel was David T. Cunningham.

Edgar H. Haug, Curtis, Morris & Safford, P.C., New York City, argued, for plaintiffs-appellees Marchon Eyewear, Inc., Marcolin U.S.A., Inc. and Rothandberg, Inc. Of counsel on the brief were John R. Lane, Daniel G. Brown, and Yvonne K. Tran. Also on the brief was Robert J. Mathias, Piper & Marbury, L.L.P., Baltimore, MD.

Donald R. Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., Washington, DC, argued, for defendants-appellants. With him on the brief was Darrel C. Karl.

Before MICHEL, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and SCHALL, Circuit Judge.

SCHALL, Circuit Judge.

This is an appeal from a final judgment of the United States District Court for the Eastern District of New York in a patent infringement suit. CVI/Beta Ventures v. Tura LP, 905 F.Supp. 1171 (E.D.N.Y.1995). CVI/Beta Ventures, Inc. (CVI) is the assignee of United States Patent Nos. 4,772,112 (the '112 patent) and 4,896,955 (the '955 patent). The patents relate to flexible eyeglass frames. Marchon Eyewear, Inc. (Marchon) is the exclusive licensee under the patents. Marcolin USA, Inc. (Marcolin) and Rothandberg, Inc. (Rothandberg) are corporations which are affiliated with Marchon. We refer to CVI, Marchon, Marcolin, and Rothandberg collectively as "CVI/Marchon." Tura LP and Brodart Co. (collectively, "Tura") supply eyeglass frames to eyeglass retailers and distributors.

CVI and Marchon sued Tura in the United States District Court for the Eastern District of Virginia, alleging that various Tura frame models infringed the '112 and '955 patents. After the case was transferred to the Eastern District of New York, Marcolin and Rothandberg were joined as plaintiffs. In its answer, in addition to denying infringement, Tura asserted counterclaims under the antitrust laws and a counterclaim for patent misuse under 35 U.S.C. § 271(d). Tura also sought a declaratory judgment of patent invalidity. Following a jury trial, claims 1-3, 5, and 6 of each patent were found to be not invalid and to be infringed by Tura LP, while Brodart Co. was found liable for inducing infringement. CVI/Beta Ventures, 905 F.Supp. at 1175. The jury further found that CVI was entitled to a reasonable royalty of 6%, and that Marchon, Marcolin, and Rothandberg collectively were entitled to lost profits and price erosion damages. Id. at 1204. In view of its verdict, the jury did not reach any of Tura's counterclaims.

Following the denial of Tura's renewed motion for a judgment of non-infringement as a matter of law (JMOL), judgment was entered in favor of CVI against Tura in the total amount of $819,208, plus prejudgment interest and attorneys fees, and in favor of Marchon, Marcolin, and Rothandberg against Tura in the total amount of $12,585,093, plus prejudgment interest. Id. In addition, Tura was enjoined from further infringement. ¹ Id.

Tura now appeals the final judgment of the district court. It argues that the court erred We conclude that the district court did err in its claim construction. We also conclude that, when the claims are properly construed, because of CVI/Marchon's failure of proof, Tura is entitled to a judgment of noninfringement as a matter of law. Accordingly, we (i) reverse the judgment of infringement, (ii) vacate the award of damages and the injunction entered against Tura, and (iii) remand the case to the district court for entry of judgment of noninfringement in favor of Tura and for further proceedings in connection with Tura's counterclaims. In view of our decision, we do not reach the jury instruction issue or the issue of Marcolin and Rothandberg's standing.

in its claim construction in deciding the renewed JMOL motion and that it erroneously instructed the jury to presume that one of the limitations of claim 5 of the patents was found in certain of Tura's accused frames. It also argues that Marcolin and Rothandberg were improperly joined as plaintiffs because they lack standing. ²

BACKGROUND

I.

The '112 patent was issued on September 20, 1988. The '955 patent was issued on January 30, 1990, as a continuation-in-part of the application that resulted in the '112 patent. The named inventors on the two patents are Robert B. Zider and John F. Krumme. On May 21, 1991, a reexamination certificate was issued for the '955 patent, confirming the patentability of all of the claims of the patent. It is stated in each of the patents that the purpose of the invention is "to provide eyeglass frames which (1) are highly resistant to permanent deformation, or 'kinking,' over the full range of ambient temperatures, or (2) are sufficiently resistant to deformation and are readily restorable to the undeformed shape by heating ...." '112, col. 2, lines 21-26; '955, col. 2, lines 21-26.

The eyeglass frames invented by Zider and Krumme are fabricated from a "nickel-titanium based shape-memory alloy." A shape-memory alloy is an alloy which exhibits the ability to return to its original shape after being deformed. In other words, the alloy "remembers" its original shape and seeks to return to that shape after a deforming force is removed.

The prior art discussed shape-memory alloys as potentially useful in eyeglass frames. There was, however, an obstacle to effective use of such alloys in frames. The obstacle lay in the fact that the shape-memory characteristics of the alloys only exhibited themselves over a narrow temperature range. As stated in the '955 patent, that range was "too narrow to be of service to eyeglass frames which must function in winter days as cold as -20? C. and in hot sunny days with possible temperatures over 40? C." ³ '955, col. 2, lines 8-10. Zider and Krumme overcame this obstacle by inventing eyeglass frames fabricated from a nickel-titanium based shape-memory alloy that had been modified by work-hardening (hammering, pressing, or stretching the alloy) or by a combination of work-hardening and heat treatment. '112, col. 2, lines 29-51; '955, col. 2, lines 21-55. As a result, Zider and Krumme's eyeglass frames have the ability to resist deformation over an ambient temperature range of -20? C. to +40? C.

Both the '112 and the '955 patents have eight claims, two of which (numbers 1 and 5) are independent. The claims of the patents are substantially similar. Claims 1 and 5 of the '955 patent are illustrative:

1. An eyeglass frame having at least a portion thereof fabricated from nickel-titanium based shape-memory alloy, said portion being in the work-hardened pseudoelastic metallurgical state, said portion having been subjected to work-hardening and having a low effective elastic modulus giving a soft, springy feel, said portion having greater than 3% elasticity over a temperature range from -20? C. to +40? C.

* * * * * *

5. An eyeglass frame having at least a portion thereof fabricated from nickel-titanium '955, col. 13, line 33--col. 14, line 5, col. 14, lines 16-24.

based shape-memory alloy, said portion being in the work-hardened and heat-treated condition, said portion having been subjected to at least 30% work-hardening followed by a heat-treatment at a temperature not exceeding 400? C. for not less than one hour and having a minimum of 3% heat-recoverable shape-memory, a yield strength greater than 30,000 psi and at least 3% elasticity.

Claim 1 of the '112 patent differs from claim 1 of the '955 patent in that (i) it does not contain the word "pseudoelastic," (ii) it specifies "at least 30%" work-hardening, and (iii) it refers to "4%" elasticity. ' 112, col. 12, lines 14-22. The only difference between claim 5 of the '112 patent and claim 5 of the '955 patent is that the former calls for "20%" work-hardening. '112, col. 12, lines 33-41. In both patents, dependent claims 2-4 and 6-8 relate to eyeglass temples, bridges, and nosepads. As will be seen, the claim construction issue in this case centers on the 3% and 4% elasticity limitations.

As used in the patents, the term "pseudoelastic" refers to the ability of a shape-memory alloy to return to its original shape after deformation, within a narrow ambient temperature range. Thus, in claim 1, the inventors claim eyeglass frames fabricated from nickel-titanium based alloys which have "pseudoelastic" shape-memory characteristics but which have been work-hardened so that they resist permanent deformation to the extent indicated ("greater than 3% elasticity") over a useful ambient temperature range. The eyeglass frames claimed in claim 5 of the patents also are fabricated from nickel-titanium based shape-memory alloys which have been work-hardened. In addition, however, the alloys have undergone heat-treatment. Heat-treatment increases the ability of the alloys to resist permanent deformation by imparting to them the quality of "heat-recoverable shape-memory." A component made from an alloy which exhibits "heat-recoverable shape-memory," if stressed by a deforming force at a temperature below the alloy's transformation temperature, ⁴ may exhibit some amount of residual strain when the stress on it is released. This strain is recovered, however, and the component returns to its original shape, when the component is warmed above the alloy's transformation temperature. Thus, the eyeglass frames of claim 5 exhibit the ability to resist permanent deformation to the extent of "3% heat-recoverable shape-memory" and "at least 3% elasticity" over a useful ambient temperature range.

II.

CVI and Marchon brought their action against Tura...