Kearns v. Chrysler Corp., s. 93-1450

• Citation: 31 USPQ2d 1746,32 F.3d 1541
• Decision Date: 11 August 1994
• Docket Number: 93-1470,Nos. 93-1450,s. 93-1450
• Parties: Robert W. KEARNS, Plaintiff/Cross-Appellant, v. CHRYSLER CORPORATION, Defendant/Appellant, and American Motors Corporation, Defendant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1541

32 F.3d 1541

31 U.S.P.Q.2d 1746

Robert W. KEARNS, Plaintiff/Cross-Appellant, v. CHRYSLER CORPORATION, Defendant/Appellant, and American Motors Corporation, Defendant.

Nos. 93-1450, 93-1470.

United States Court of Appeals,

Federal Circuit.

Aug. 11, 1994.

Rehearing Denied; Suggestion for Rehearing In Banc Declined

Sept. 28, 1994.

Robert W. Kearns, pro se.

Robert P. Taylor, Pillsbury, Madison & Sutro, Washington, DC, argued for defendant/appellant. With him on the brief was Lawrence F. Scinto, Fitzpatrick, Cella, Harper & Scinto, New York City. Of counsel were Deanne C. Siemer and Michael A. Conley.

William D. Durkee, Arnold, White & Durkee, Houston, TX, was on the brief for amicus curiae, Arnold, White & Durkee. Of counsel were William B. Allison and James G. Munisteri, Sewell & Riggs, Houston, TX.

Richard L. Aitken and Andrew C. Aitken, Lane, Aitken & McCann, Washington, DC, were on the brief for amicus curiae, Houston Inventors Ass'n.

Before LOURIE, RADER, and SCHALL, Circuit Judges.

LOURIE, Circuit Judge.

Chrysler Corporation and Robert W. Kearns appeal and cross-appeal, respectively, from the final judgment of the United States District Court for the Eastern District of Michigan awarding Kearns $18,740,465.43. The judgment was entered on jury verdicts that three patents owned by Kearns were infringed by Chrysler. Kearns v. Chrysler Corp., Civil No. 82-70748 (E.D.Mich. Oct. 30, 1992). The court denied Chrysler's motion for judgment as a matter of law or in the alternative for a new trial. Kearns v. Chrysler Corp., Civil No. 82-70748 (E.D.Mich. June 3, 1993). We affirm the judgment in all respects.

BACKGROUND

In 1982, Kearns filed an action against Chrysler alleging infringement of U.S. Patents 3,351,836, 3,564,374, 3,602,790, and 3,581,178, all relating to electronic intermittent windshield wipers (IWWs) for use in automotive vehicles. At the time the suit was filed, Kearns had three similar suits pending against other automobile manufacturers and distributors involving the same patents, Kearns v. Ford Motor Co., Civil Action No. 78-70740 (E.D.Mich.); Kearns v. Wood Motors, Inc., Civil Action No. 78-70642 (E.D.Mich.); SWF-Spezialfabrik fur Autozubehor Gustav Rav GmbH v. Kearns, Civil Action No. 79-74451 (E.D.Mich.). ¹

On October 22, 1982, proceedings in the Chrysler action were stayed pending resolution of the earlier filed suits. The stay was instituted pursuant to Chrysler's stipulation that it would be "bound by the judgment as to the validity of ... U.S. patent Nos. 3,351,836, 3,564,374, 3,581,178, and 3,602,790" in either Ford, Wood Motors, or SWF, whichever was the last to be adjudicated. The stipulation expressly provided, however, that Chrysler would "not be bound by any consent judgment."

In 1989, shortly before the Ford case went to trial, Chrysler renewed its stipulation regarding the issues of invalidity and unenforceability. Subject to continuation of the court-ordered stay, Chrysler agreed to be "bound by the judgment (excluding a consent judgment) in the Kearns v. Ford case, C.A. 78-70740 as to the validity and enforceability of the patents involved in that action that are also involved in this action. Those patents included United States Patent Nos. 3,351,836, 3,564,374, 3,581,178, and 3,602,790." That stipulation was subsequently entered by the court on February 15, 1990.

1. The Ford Litigation

The liability phase of the Ford case commenced on January 3, 1990. On January 29, 1990, the jury returned a unanimous verdict for Kearns, finding that Ford had not proved by clear and convincing evidence that claim 16 of the '836 patent, claim 6 of the '374 patent, claim 14 of the '790 patent, and claim 6 of the '178 patent were invalid or unenforceable. On March 9, 1990, the district court entered partial judgment that the specified claims were valid, enforceable, and infringed by Ford. That partial judgment was eventually "made final" upon entry of the court's final judgment on November 14, 1990.

The damage phase of Ford was tried before the same jury in April, 1990. The jury, however, was unable to reach a unanimous verdict and a second trial on damages was held in July, 1990. The second jury ultimately returned a unanimous verdict in favor of Kearns, awarding $5,163,842 for the period from April 3, 1978 through 1988. On July 13, 1990, partial judgment was entered on the damage award assessed by the second jury. Although damages for the period from 1972 to April 3, 1978 remained in dispute, Ford and Kearns eventually reached a settlement as to the total amount of liability. Consequently, the partial judgment on damages was vacated and Ford withdrew its pending post-verdict motions for judgment notwithstanding the verdict or in the alternative for a new trial and waived its appellate rights.

2. The Chrysler Litigation

The Chrysler case returned to active status in early 1991. On February 20, 1991, the district court issued a pretrial order stating that the issues to be adjudicated at trial concerned "infringement, damages, and willfulness." On May 3, 1991, Chrysler filed a motion to have the pretrial order modified to add patent validity as an issue for trial. In support of its motion, Chrysler argued that the pretrial stipulations of October 15, 1982 and February 15, 1990 did not bar Chrysler from challenging the patents in suit. Chrysler claimed that because the final judgment in Ford was entered pursuant to a settlement agreement between Ford and Kearns, it was a "consent judgment" within the meaning of the stipulations.

The district court denied the motion and limited trial to the issues stated in the pretrial order. In rejecting Chrysler's argument, the district court noted that although a settlement had been reached in Ford on the issue of damages, the issue of validity was "hotly" contested by the parties at trial, resulting in a unanimous jury verdict and a final judgment in favor of Kearns. Moreover, the court found that the stipulations did not obligate Ford to pursue post-trial motions and exhaust all rights of appeal in order for the judgment in Ford to be binding on the parties in Chrysler.

By order of the court, the Chrysler action was bifurcated into separate jury trials on the issues of liability and damages. On December 10, 1991, the jury returned verdicts that Chrysler's accused IWW circuits, designated the "1977 Circuit" and the "1980 Circuit," infringed claim 12 of the '836 patent, claim 6 of the '374 patent, and claim 14 of the '790 patent. ² On June 11, 1992, the same jury returned a verdict that Chrysler's infringement was not willful and assessed a reasonable royalty of $.90 per unit for a total of 12,564,107 infringing units. ³ Pursuant to the jury's verdicts, the district court entered final judgment in favor of Kearns in the amount of $18,740,465.43, including prejudgment interest and costs. ⁴

Chrysler subsequently filed a motion for judgment as a matter of law (JMOL), asserting that the jury's findings of infringement were not supported by substantial evidence. Alternatively, Chrysler moved for a new trial, claiming that the district court improperly excluded evidence and misinstructed the jury on critical legal issues. The district court denied Chrysler's post-verdict motions. The court considered the expert testimony adduced at trial together with the documentary evidence of record to be a sufficient basis upon which the jury could have supported its findings of infringement. Further, the court determined that the exclusion of evidence

was not prejudicial to Chrysler's substantive rights and that the jury was correctly instructed on the interpretation of the claims and their application to the accused circuits.

DISCUSSION

Chrysler now appeals, asserting that the district court's judgment should be reversed as a matter of law because the underlying jury verdicts of infringement were not supported by substantial evidence, or in the alternative, that a new trial is warranted in view of the prejudicial error committed by the district court in barring Chrysler from introducing prior art evidence necessary to properly construe the claims at issue and to challenge their validity and enforceability. Kearns cross-appeals certain rulings of the court that allegedly deprived him of the total compensation to which he claims he is entitled.

New Trial

We first address the district court's denial of Chrysler's motion for a new trial. "The denial of a motion for new trial can be reversed only if the district court abused its discretion." Arachnid, Inc. v. Medalistic Marketing Corp., 972 F.2d 1300, 1301, 23 USPQ2d 1946, 1948 (Fed.Cir.1992) (citation omitted); Standard Havens Prods., Inc. v. Gencor Indus., Inc., 953 F.2d 1360, 1367, 21 USPQ2d 1321, 1326 (Fed.Cir.1991), cert. denied, --- U.S. ----, 113 S.Ct. 60, 121 L.Ed.2d 28 (1992). An abuse of discretion may be established by showing that the district court either made an error of law, a clear error of judgment, or made findings which were clearly erroneous. See Mendenhall v. Cedarapids, Inc., 5 F.3d 1557, 1569, 28 USPQ2d 1081, 1091 (Fed.Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 1540, 128 L.Ed.2d 192 (1994).

1. Invalidity and Unenforceability

In support of its contention that a new trial is required, Chrysler claims that the district court erred as a matter of law in excluding evidence allegedly showing that the patents in suit are invalid and unenforceable. Chrysler claims that the district court's decision to exclude such evidence was based on an erroneous interpretation of the pretrial stipulation of February 15, 1990, ⁵ in which Chrysler agreed to be bound by the judgment rendered in the Ford case on the issues of invalidity and unenforceability. It is Chrysler's position that the Ford judgment was in fact a consent judgment, which, under the terms of the stipulation, was not binding on Chrysler.

The proper interpretation of the parties' pretrial stipulation, like any contract,...