Litecubes, LLC v. Northern Light Products, Inc.

• Citation: 523 F.3d 1353
• Decision Date: 28 April 2008
• Docket Number: No. 2006-1646.,2006-1646.
• Parties: LITECUBES, LLC, and Carl R. Vanderschuit, Plaintiffs-Appellees, v. NORTHERN LIGHT PRODUCTS, INC. (doing business as GlowProducts.com), Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

523 F.3d 1353

LITECUBES, LLC, and Carl R. Vanderschuit, Plaintiffs-Appellees, v. NORTHERN LIGHT PRODUCTS, INC. (doing business as GlowProducts.com), Defendant-Appellant.

No. 2006-1646.

United States Court of Appeals, Federal Circuit.

April 28, 2008.

Rudolph A. Telscher, Jr., Harness, Dickey & Pierce, P.L.C., of St. Louis, MO, argued for plaintiffs-appellees. With him on the brief were Matthew L. Cutler and Kara R. Yancey.

F. Ross Boundy, Davis Wright Tremaine LLP, of Seattle, WA, argued for defendant-appellant. With him on the brief was Robert J. Carlson, Christensen O'Connor Johnson Kindness PLLC, of Seattle, WA. Of counsel on the brief was Kevin P. Anderson, Wiley Rein LLP, of Washington, DC. Of counsel was Julian D. Forman, Davis Wright Tremaine LLP, of Seatte, WA.

Before NEWMAN, Circuit Judge, ARCHER, Senior Circuit Judge, and GAJARSA, Circuit Judge.

GAJARSA, Circuit Judge.

This patent and copyright case requires that we clarify the often-confused boundary between elements of a federal claim, which must be established before relief can be granted, and the requirements for establishing subject matter jurisdiction. Plaintiffs-Appellees Litecubes, LLC and Carl R. Vandershuit (collectively "Litecubes"), brought an action in the U.S. District Court for the Eastern District of Missouri alleging patent and copyright infringement by Defendant-Appellant Northern Lights Products, Inc., doing business as GlowProducts.com ("GlowProducts"). The district court entered a judgment against GlowProducts after a jury verdict of copyright and patent infringement. Subsequently, GlowProducts filed a motion to dismiss the case for lack of subject matter jurisdiction on the grounds that it did not sell the allegedly infringing products within the United States, nor import the products into the United States. The district court denied the motion on the grounds that GlowProducts did import the goods into the United States.

GlowProducts appeals the denial of its motion to dismiss for lack of subject matter jurisdiction. We affirm the district court's denial of the motion to dismiss, but do so on different grounds. The district court erred in treating the issue of whether the goods had been imported into the United States as an issue impacting its subject matter jurisdiction. A plaintiff must prove that allegedly infringing activity took place in the United States to prevail on claims of patent or copyright infringement, but as with any other element of the claims, failure to do so does not divest the federal courts of subject matter jurisdiction over the action.

We also affirm the district court's denial of GlowProducts' motion for a judgment as a matter of law. Substantial evidence supports the jury's finding of infringement.

We have jurisdiction to hear the appeal pursuant to 28 U.S.C. 1295(a)(1).

I.

A.

Vanderschuit is the owner and founder of Litecubes, and the inventor and owner of U.S. Patent No. 6,416,198 (the "'198 patent"). The '198 patent discloses an illuminatable novelty item that can be placed in beverages, i.e., a lighted artificial "ice cube." Litecubes is the licensee of the '198 patent and the owner of a registered copyright on the Litecube (the "Litecube Copyright").

Litecubes asserted three independent claims from the '198 patent, claims 1, 16, and 31. Claim 1 claims:

An illuminatable beverage accessory device comprising:

a. at least one light source;

b. at least one power source switchably connected to said light source;

c. a cartridge having a light-source chamber to contain said light source, a power-source chamber below said light-source chamber, and two wire lead channels on the cartridge underside and in communication with said light-source chamber d. a lid under said cartridge, said lid having a lid chamber mating with said power-source chamber to thereby contain said power-source therein and further having a power-switching means for powering said at least one light source into and from an on-light mode into and from an off-light mode;

e. a housing covering said cartridge and said lid such that a cavity is defined therein and a water-tight integrity is maintained within said housing; and

f. a filler within said cavity, said filler adapted to retain heat when said device is heated.

'198 patent cols. 7-8 (emphasis added). Claim 16 is identical to claim 1 except that subpart (f) requires "a filler within said cavity, said filler adapted to retain cold when said device is cooled." Id. cols. 8-9. Claim 31 differs from claims 1 and 16 in that (a) it does not require a filler adapted to retain heat or cold, and (b) it requires that the power source "reciprocally translate ... from an open light-on mode to a closed light-off mode." Id. cols. 9-10.

At a Markman hearing, the district court construed the claim 1 term "a filler within said cavity, said filler adapted to retain heat when said device is heated" to mean "filler within said cavity, said filler made suitable to or fit for the specific use of retaining heat when said device is heated." Litecubes v. N. Light Prods., Inc., No. 4:04cv00485 (E.D.Mo. March 7, 2005) ("Markman Order") (emphasis added). Similarly, the district construed the relevant term in claim 16 to mean "filler within said cavity, said filler made suitable to or fit for the specific use of retaining cold when said device is cooled." Id. (emphasis added). Neither party challenges these constructions on appeal.

B.

GlowProducts is a Canadian corporation operating from its offices in Victoria, British Columbia, which acquires novelty items from Chinese manufacturers and then sells the items primarily in North America. GlowProducts does not have offices, facilities, or assets in the United States. Evidence at trial, however, established that GlowProducts sold the accused products directly to customers located in the United States and that GlowProducts would ship the products, f.o.b.,¹ from its Canadian offices to its customers in the United States.

Two types of products sold by GlowProducts are at issue, the EXA cubes and the ICM cubes (which include the "8 Mode Multi Cube" and the "3 Setting Flashing Lighted Ice Cube"). Both products are artificial ice cubes containing an L.E.D. and battery. The EXA cubes are nearly identical to the Litecube product ("the Litecube") and include a power source that can "reciprocally translate ... from an open light-on mode to a closed light-off mode," '198 patent cols. 9-10. GlowProducts does not allege any error on the merits in the jury's finding that the "EXA" cube infringed claim 31; nor does it contest the merits of the jury's finding that the EXA cube infringes the Litecube Copyright.

The ICM cubes are a different shape than the Litecube and, thus, were not alleged to have infringed the Litecube Copyright. Nor do they have a reciprocally translating power source as required by claim 31. Accordingly, at issue at trial was whether they infringe claims 1 and 16 of the '198 patent. In dispute was only whether the ICM cubes meet the limitation that the cube contain a filler adapted to retain heat or cold when the device is heated or cooled. GlowProducts concedes that the ICM cubes meet all of the remaining limitations of claims 1 and 16.

C.

Litecubes filed this action in April 2004. A five-day jury trial was held in October 2005. Midway through trial, GlowProducts raised for the first time the issue of subject matter jurisdiction, arguing that the trial court did not have jurisdiction over the claims because there was no evidence that at the time the lawsuit was brought GlowProducts had made any sales in the United States or imported products into the United States. Trial Tr. vol. III 169. GlowProducts' theory was that because its sales to United States' customers were shipped f.o.b., the sales took place in Canada and that it was the customer who imported the goods into the United States.

After the trial had concluded and the jury entered a verdict of willful infringement, GlowProducts filed a motion to dismiss for lack of subject matter jurisdiction on these grounds. Neither Litecubes nor the district court challenged GlowProducts characterization of the issue as jurisdictional. Instead Litecubes opposed the motion on the grounds that there was ample evidence that GlowProducts had sold, offered to sell, or imported the allegedly infringing products to the United States. Id. The district court agreed. The court denied GlowProducts' motion, finding evidence of infringement "sufficient to establish subject matter jurisdiction in this Court" because GlowProducts "clearly imported the accused products into the United States." Litecubes v. N. Light Prods., Inc., No. 4:04cv00485, at *3 (E.D.Mo. Aug. 25, 2006) (Memorandum and Order). The district court did not reach the issue of whether there were sales or offers to sell in the United States.² The district court also dismissed GlowProducts' motions for judgment as a matter of law ("JMOL"), concluding that substantial evidence supported the jury verdict. Id. at *12

After the district court issued a final judgment, GlowProducts appealed. In their initial briefing to this court, both parties assumed, without any analysis, that the issue of whether there was allegedly infringing activity in the United States was jurisdictional. However, because we have an independent obligation to properly determine our own jurisdiction, the panel requested that the parties be prepared to discuss at oral argument:

Whether failing to establish that an alleged infringer "makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention" is sufficient to divest the federal courts of subject matter jurisdiction over a patent infringement action, or instead whether the location of the allegedly infringing activity is a factual element of the claim which must be proven to show patent infringement but which does not affect the subject...