Bernhardt, L.L.C. v. Collezione Europa Usa, Inc., 04-1024.

• Citation: 386 F.3d 1371
• Decision Date: 20 October 2004
• Docket Number: No. 04-1024.,04-1024.
• Parties: BERNHARDT, L.L.C., Plaintiff-Appellant, v. COLLEZIONE EUROPA USA, INC., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

386 F.3d 1371

BERNHARDT, L.L.C., Plaintiff-Appellant, v. COLLEZIONE EUROPA USA, INC., Defendant-Appellee.

No. 04-1024.

United States Court of Appeals, Federal Circuit.

DECIDED: October 20, 2004.

Rehearing and Rehearing En Banc Denied December 6, 2004.

Appeal from the United States District Court for the Middle District of North Carolina, Frank W. Bullock, Jr., J.

COPYRIGHT MATERIAL OMITTED

Stephen Robinson, Robinson & Lawing, LLP, of Winston-Salem, North Carolina, and Kevin L. Miller, argued for plaintiff-appellant. With him on the brief were Norwood Robinson and Michael L. Robinson.

Nicholas Mesiti, Heslin Rothenberg Farley & Mesiti P.C., of Albany, New York, argued for defendant-appellee. With him on the brief was Brett M. Hutton. Of counsel on the brief was Peter J. Juran, Blanco Tackabery Combs & Matamoros, P.A., of Winston-Salem, North Carolina.

Before MAYER, Chief Judge, MICHEL, and LINN, Circuit Judges.

LINN, Circuit Judge.

Bernhardt L.L.C. ("Bernhardt") appeals from a final judgment of the United States District Court for the Middle District of North Carolina ("district court") in favor of Collezione Europa USA, Inc. ("Collezione"), that the six design patents-in-suit were not infringed and that four of the design patents-in-suit were invalid for prior public use under 35 U.S.C. § 102(b). Bernhardt L.L.C. v. Collezione Europa USA, Inc., 280 F.Supp.2d 485 (M.D.N.C.2003). Because the district court did not fully apply the proper tests for invalidity and infringement, we vacate and remand for further proceedings.

I. BACKGROUND

A. The Parties

Bernhardt is the intellectual property licensing unit of Bernhardt Furniture Co., a furniture manufacturer. Id. at 487. Bernhardt owns the six design patents at issue in this case: D438,727 ("the '727 patent"); D439,763 ("the '763 patent"); D439,770 ("the '770 patent"); D441,560 ("the '560 patent"); D441,975 ("the '975 patent"); D441,980 ("the '980 patent") (collectively, "the patents-in-suit"). Id. The validity of four of these patents, specifically the '980, '770, '975, and '560 patents ("the Pre-Market patents"), is disputed. Id. Bernhardt filed applications leading to the issuance of the design patents-in-suit between July and October 2000. Id. at 488. The following figures depict two representative furniture designs patented by Bernhardt:

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

'727 patent, Fig. 1 (buffet); '975 patent, Fig. 1 (end chair). Bernhardt Furniture Co., as a licensee of the six patents-in-suit, sells furniture embodying the patented designs in its Coronado Collection. Bernhardt, 280 F.Supp.2d at 489.

Collezione is a New Jersey corporation which imports and sells furniture, generally at a lower price than many other firms in the furniture industry. Id. at 487.

B. Market and Pre-Market

Bernhardt participates in the International Home Furnishing Market ("Market"), held in October and April of each year in North Carolina. Id. at 488. A month before the Market event, Bernhardt organizes and conducts what it terms a "Pre-Market" exhibition ("Pre-Market") at which it showcases its new designs to its key customers and to representatives from an industry newspaper. Id. Bernhardt uses its Pre-Market exhibition to demonstrate the concepts of the furniture collections under development, to gauge customer reaction, and to increase customer demand at Market. Id. at 489.

Each of Bernhardt's furniture designs is assigned a six-digit "stock keeping unit" ("SKU") number, which stays with a design from early in the design process through all subsequent re-designs. Id. In preparation for Pre-Market, Bernhardt generates a document listing the SKUs of the furniture it would like to exhibit at Pre-Market ("the Pre-Market Wish List"). Id. at 489-90.

Bernhardt also prepares and maintains an invitation list of the customers and other persons invited to Pre-Market. Id. at 488. To be admitted to Pre-Market, an attendee must show identification, which is checked in the lobby of the exhibition building. Id. at 489. The attendee is then escorted by security personnel to the entrance of the showroom, where identification is again checked. Id. Bernhardt sales representatives then meet the attendee and escort him or her around the showroom. Id. Attendees are not allowed to take pictures or to take anything into the showroom. Id. Attendees are not required to sign a confidentiality agreement restricting disclosure of the designs they see at Pre-Market. Id.

During Pre-Market, Bernhardt showcases its new designs in its showroom. The designs take the form of mock-ups, prototypes, drawings, or other furniture exemplars. Id. at 488. Comments from Pre-Market attendees concerning the displayed furniture designs are included in a summary document entitled the "Pre-Market Wrap-up." Id. at 489. Only representative pieces from a given collection are displayed at Pre-Market. Id. at 488. The designs initially presented at Pre-Market may sometimes be different from the final designs ultimately introduced at Market. Id. at 488-89.

At the September 1999 Pre-Market, Bernhardt showcased a planned line of furniture. The designs, with some modifications, were later adopted in Bernhardt's Coronado Collection introduced to the consuming public at Market. Aspects of the designs in this collection are the subject of the patents-in-suit.

C. Procedural History

On October 19, 2001, Bernhardt sued Collezione, alleging Collezione infringed Bernhardt's patented designs by offering for sale poster beds, side and end dining chairs, dining tables, buffets, and cabinets in Collezione's 2200 collection. Collezione answered, denying infringement of all of the patents-in-suit and bringing counterclaims for declaratory judgment of patent misuse, invalidity, unenforceability, and non-infringement. On July 3, 2002, the district court dismissed Collezione's counterclaims for patent misuse and unenforceability. Collezione moved for summary judgment that the four Pre-Market patents were invalid under 35 U.S.C. § 102(b) for prior public use. This motion was denied by the district court on February 25, 2003.

The district court conducted a Markman hearing and construed the patent claims. Bernhardt L.L.C. v. Collezione Europa USA, Inc., No. 1:01CV00957, 2003 WL 21254634 (M.D.N.C. May 30, 2003) ("Claim Construction Opinion"). Those initial claim constructions are not disputed. During the Markman hearing, the parties disputed, inter alia, whether a determination of the points of novelty was part of claim construction. Finding that the points of novelty issue was a question for the fact finder, the court postponed a determination of the points of novelty until trial.

A bench trial was conducted on June 30 and July 1, 2003. At trial, the parties disputed which designs were exhibited at the September 1999 Pre-Market exhibition and whether the exhibition, which admittedly took place more than one year prior to the October 2000 filing dates of Bernhardt's Pre-Market patents (the '980, '770, '975, and '560 patents), was a public use under 35 U.S.C. § 102(b). Following the trial, the district court held that the designs covered by the four Pre-Market patents had been placed in prior public use by Bernhardt at its September 1999 Pre-Market exhibition, rendering the Pre-Market patents invalid under 35 U.S.C. § 102(b). The district court also held the six patents-in-suit not infringed. Bernhardt L.L.C. v. Collezione Europa USA, Inc., 280 F.Supp.2d 485 (M.D.N.C.2003). The district court entered final judgment in favor of Collezione.

Bernhardt appeals the invalidity and non-infringement judgment. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

II. ANALYSIS

A. Standard of Review

"Whether or not an invention was on sale or in public use within the meaning of section 102(b) is a question of law that this court reviews de novo; however, factual findings underlying the trial court's conclusion are subject to the clearly erroneous standard of review." Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 549 (Fed.Cir.1990); see also Tone Bros., Inc. v. Sysco Corp., 28 F.3d 1192, 1197 n. 3 (Fed.Cir.1994). "A finding is clearly erroneous when, despite some supporting evidence, `the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'" Glaxo Group, Ltd. v. Apotex, Inc., 376 F.3d 1339, 1346 (Fed.Cir.2004) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948)).

Claim construction is a question of law we review de novo. Int'l Rectifier Corp. v. IXYS Corp., 361 F.3d 1363, 1369 (Fed.Cir.2004). Infringement is a question of fact that we review for clear error. Amgen, Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1339 (Fed.Cir.2003).

B. Invalidity

Bernhardt filed patent applications leading to the issuance of the four Pre-Market patents (the '980, '770, '975, and '560 patents) between October 10 and 13, 2000 — more than one year after the September 1999 Pre-Market exhibition at issue. See Bernhardt, 280 F.Supp.2d at 487-88. The district court concluded, after trial, that the four Pre-Market patents were invalid under 35 U.S.C. § 102(b) for prior public use at Bernhardt's September 1999 Pre-Market exhibition. Id. at 497. The dates are not contested but the parties dispute whether Collezione adduced sufficient facts at trial to meet its clear and convincing evidentiary burden as to the designs exhibited at Pre-Market and whether the exhibition was "public" within the meaning of 35 U.S.C. § 102(b).

1. The Exhibited Designs

a. Collezione's Evidentiary Showing

The parties agree that pieces of Bernhardt's Coronado Collection were displayed at the 1999 Pre-Market exhibition, but the details and extent of the designs actually displayed are contested. Id. at 494. To prove invalidity, Collezione introduced evidence to show that four SKUs for furniture pieces argued to embody designs...