Isco Intern., Inc. v. Conductus, Inc.

• Decision Date: 21 August 2003
• Docket Number: No. 01-487 GMS.,01-487 GMS.
• Citation: 279 F.Supp.2d 489
• Parties: ISCO INTERNATIONAL, INC., Plaintiff v. CONDUCTUS, INC., and Superconductor Technologies, Inc., Defendants.
• Court: U.S. District Court — District of Delaware

279 F.Supp.2d 489

ISCO INTERNATIONAL, INC., Plaintiff v. CONDUCTUS, INC., and Superconductor Technologies, Inc., Defendants.

No. 01-487 GMS.

United States District Court, D. Delaware.

August 21, 2003.

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Richard H. Richards, III of Richards Layton & Finger, Wilmington, Delaware, and John F. Sweeney, Mark J. Abate, and Tony V. Pezzano of Morgan & Finnegan, L.L.P., New York, New York, for Plaintiff.

Richard L. Horwtiz, and David E. Moore of Potter Anderson & Corroon LLP, Wilmington, Delaware, and Donald F. Parsons, Jr. of Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware, Chadbourne & Parke LLP, of New York, New York (Lawrence B. Goodwin, Daniel Basov, and Dennis C. Hopkins of counsel), Heller Herman White & Mcauliffe LLP Menlo Park, California (Alexander Brainerd, Michael K. Plimack, and Christian E. Mammen of counsel) for defendants.

MEMORANDUM OPINION

SLEET, District Judge.

I. INTRODUCTION

The plaintiff, ISCO International, Inc. ("ISCO"), filed the above-captioned suit against Conductus, Inc. ("Conductus") and Superconductor Technologies, Inc. ("STI") on July 17, 2001, alleging infringement of U.S. Patent No. 6,263,215 ("the '215 patent"). A thirteen-day jury trial was held between March 17 and April 2, 2003. On April 3, 2003, the jury returned a verdict finding that: (1) claims 10, 15, 16, and 17 of the '215 patent are invalid as obvious; (2) the '215 patent is unenforceable due to inequitable conduct; (3) the accused products do not infringe the patent-in-suit; (4) ISCO committed unfair competition in making certain marketplace representations about its patent; (5) STI is entitled to damages of approximately $3.8 million; and (6) Conductus is entitled to damages of $35,077.

During the course of the trial, both parties properly moved for judgment as a matter of law ("JMOL") pursuant to Federal Rule of Civil Procedure 50. The court reserved judgment on all JMOL motions. Following the jury's verdict, both parties filed post-trial motions. Presently before the court are: (1) ISCO's Renewed Motion for Judgment as a Matter of Law and for a New Trial (D.I.462); (2) the defendants' Motion for Entry of Judgment and Proposed Findings of Facts and Conclusions of Law on the Issue of Inequitable Conduct (D.I.472); (3) the defendants' Motion to Strike, in Part, the Reply Brief of ISCO in Support of its Renewed Motion for Judgment as a Matter of Law and for a New Trial, or in the Alternative to File a Surreply (D.I.508); and (4) the defendants' Motion for Attorneys' Fees and Disbursements (D.I.469). The following is the court's ruling regarding all pending post-trial motions.

II. DISCUSSION

A. ISCO's Renewed Motion for Judgment as a Matter of Law

Pursuant to Federal Rule of Civil Procedure 50, a court may rule against a party as a matter of law after the moving party is fully heard on an issue at trial, if "there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." Walter v. Holiday Inns, Inc., 985 F.2d 1232, 1238 (3d Cir. 1993) (citation omitted). If the court denies a motion for JMOL during trial, the motion may be renewed within ten days of entry of judgment in the case. FED. R. CIV. P. 50(b). To prevail on a renewed motion for JMOL following a jury trial, a party "`must show that the jury's findings, presumed or express, are not supported by substantial evidence or, if they were, that the legal conclusion(s) implied [by] the jury's verdict cannot in law be supported by those findings.'" Pannu v. Iolab Corp., 155 F.3d 1344, 1348 (Fed.Cir.1998) (quoting Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 893 (Fed. Cir.1984)). "`Substantial' evidence is such relevant evidence from the record taken as a whole as might be accepted by a reasonable mind as adequate to support the finding under review." Perkin-Elmer Corp., 732 F.2d. at 893. In assessing the sufficiency of the evidence, the court must draw all reasonable inferences from the evidence in the light most favorable to the nonmovant. Id.; Richardson-Vicks Inc. v. Upjohn Co., 122 F.3d 1476, 1479 (Fed. Cir.1997). The appropriate inquiry is whether a reasonable jury, given the facts before it, could have arrived at the conclusion it did. Dawn Equip. Co. v. Kentucky Farms, Inc., 140 F.3d 1009, 1014 (Fed.Cir. 1998). The court may not determine the credibility of the witnesses nor "substitute its choice for that of the jury between conflicting elements of the evidence." Perkin-Elmer Corp., 732 F.2d at 893.

ISCO moves for judgment as a matter of law on several grounds. It contends that there is no substantial evidence for the jury's findings that: the '215 patent claims are invalid as obvious; the patent is unenforceable because of inequitable conduct; ISCO acted in bad faith and committed unfair competition; the defendants are entitled to unfair competition damages; and the '215 patent claims are not infringed by STI's Superfilter III Product. The court will address each of these contentions in turn.

1. Obviousness

The plaintiff argues that there is no substantial evidence from which a jury could find independent claim 10 of the '215 patent obvious pursuant to 35 U.S.C. § 103. Section 103 states:

A patent may not be obtained ... if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.

35 U.S.C. § 103 (2003). Accordingly, when determining obviousness, the essential question is "whether the prior art would have suggested to one of ordinary skill in the art that this process should be carried out and would have a reasonable likelihood of success, viewed in the light of the prior art." In re Dow Chem. Co., 837 F.2d 469, 473 (Fed.Cir.1988) (citations omitted). This analysis rests on several factual inquiries: the scope and content of the prior art; differences between the prior art and the claims at issue; and the level of ordinary skill in the pertinent art. Graham v. John Deere Co., 383 U.S. 1, 17, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). Secondary considerations, such as the commercial success of the invention, long felt but unsolved needs in the art, and the failure of others to solve the problem, also may be considered. Id. at 17-18, 86 S.Ct. 684. As with all defenses of invalidity, the defendants were required to prove obviousness by clear and convincing evidence. Custom Accessories, Inc. v. Jeffrey-Allan Industries, Inc., 807 F.2d 955, 961 (Fed. Cir.1986).

At trial, the defendants presented evidence of obviousness based upon the following: (1) a report¹ produced for the Advanced Research Projects Agency ("ARPA report"); (2) an article² by Mark A. Robertson; (3) knowledge in the art regarding the elements of the invention, which a person of skill in the art would have been motivated to combine; and (4) independent development of the invention.

a. The ARPA Report

The defendants argue that the ARPA report, alone and in combination with other references, renders the claimed invention obvious. The report was prepared by the consulting firm of Booz Allen Hamilton for the Advanced Research Project Agency of the United States Department of Defense. See DX-1052 (the ARPA report). The report represents the consulting firm's investigation of "the potential application of high temperature superconducting (HTS) products in the cellular communication base station equipment market." Id. at I-1. The report discloses a cryogenically cooled cellular receiver front end, with a plurality of thin-film HTS filters, a plurality of amplifiers, and a switched bypass circuit for bypassing the HTS filters in the event of a cooler failure. Id. at III-5, IV-11, V-2; Tr. 1521:10-1522:17; 1642:25-1643:21.

1. The Report's Status as Prior Art

ISCO first objects that the ARPA report is not prior art to claim 10 of the patent-in-suit. The report was disseminated publicly on February 7, 1995. The first provisional patent application leading to the '215 patent was filed on August 9, 1995. Normally, then, the report would be considered prior art to the claimed invention. ISCO maintains, however, that the inventors of the claimed invention conceived of the invention before February 7, 1995, and exercised reasonable diligence from a date prior to February 7, 1995 through a reduction to practice of the invention. Finally, ISCO maintains, the first provisional patent application supports the subject matter of claim 10 of the '215 patent. Therefore, the plaintiff argues, no reasonable jury could have found that the ARPA report constitutes prior art for purposes of § 102(b).

To remove the report from the prior art of the claimed invention, ISCO must have shown that the inventors conceived of the claimed invention³ before the publish date of the report, or at least as much of the invention that any remaining differences between the report and the invention would be obvious to a person skilled in the art, and worked diligently thereafter to reduce the invention to practice. See 35 U.S.C. § 102(g);⁴ see also In re Spiller, 500 F.2d 1170, 1178 n. 5 (Cust. & Pat.App. 1974).

At trial, Dr. Robert Yandrofski, one of the named inventors of the claimed invention, testified that he conceived of the elements of claim 10 probably around May or June of 1994, but certainly no later than December of that year. Tr. 2527:12-25. Co-inventor Gerhard Koepf testified to the same effect. Tr. 1882:13-1884:5; 1904:15-19; 1908:2-1911:17. The plaintiff also introduced documents to attempt to corroborate a conception date of December 1994. Of these, the plaintiff particularly relies upon PTX-299,⁵ a draft project proposal dated December 19, 1994 and entitled "Cryo-REACH Base Station Prototype." The proposal details a front end hardware system for application to civilian and military wireless...