Old Reliable Wholesale Inc. v. Cornell Corp..
| Citation | 635 F.3d 539 |
| Decision Date | 16 March 2011 |
| Docket Number | No. 2010–1247.,2010–1247. |
| Parties | OLD RELIABLE WHOLESALE, INC., Plaintiff–Appellant,v.CORNELL CORPORATION, Defendant–Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals for the Federal Circuit |
OPINION TEXT STARTS HERE
R. Eric Gaum, Hahn Loeser & Parks, LLP, of Cleveland, OH, argued for plaintiff-appellant. With him on the brief was Shannon V. McCue.Matthew J. Schaap, Severson, Sheldon, Dougherty & Molenda, P.A., of Apple Valley, MN, argued for defendant-appellee. With him on the brief was Gary L. Huusko.Before NEWMAN, MAYER, and BRYSON, Circuit Judges.MAYER, Circuit Judge.
Old Reliable Wholesale, Inc. (“Old Reliable”) appeals a judgment of the United States District Court for the Northern District of Ohio awarding Cornell Corporation (“Cornell”) attorney fees pursuant to 35 U.S.C. § 285. See Old Reliable Wholesale, Inc. v. Cornell Corp., No. 06–CV–2389, 2010 WL 446199, 2010 U.S. Dist. LEXIS 8756 (N.D.Ohio Feb. 2, 2010) (“ Attorney Fees Decision ”). We reverse.
Old Reliable is the assignee of U.S. Patent No. 5,069,950 (the “'950 patent”), which is directed toward insulated roof board. Independent claim 1 of the '950 patent provides:
1. A composite insulated roof board structure comprising:
(a) an insulated roof board member comprising (1) a main portion of rigid coherent solid insulating material, and (2) a top portion comprising a plurality of spaced blocks above said main portion and integral therewith, said blocks defining therebetween a network of interconnected channels at the same level for horizontal venting of water vapor; and
(b) a relatively hard, dense protective top layer which is adhered to the tops of the blocks of said insulated roof board member.
'950 patent, col.7 l.25–col.8 l.7.
Cornell, a Wisconsin roof manufacturer, produces several different insulated roofing products. Its Vent–Top ThermaCal 1 (“VT–1”) consists of a bottom layer of polyisocyanurate insulation, a layer of paper felt facing bonded to the insulation, spaced blocks on top of the felt facing, and a top layer of oriented strand board (“OSB”). Its Vent–Top ThermaCal 2 (“VT–2”) consists of a bottom layer of polyisocyanurate insulation, a layer of OSB, spaced blocks on top of the layer of OSB, and an additional layer of OSB on top of the blocks.
In 2006, Old Reliable filed an infringement action against Cornell, asserting that the VT–1 product infringed claims 1, 2, 3, 6 and 7 of the '950 patent. In response, Cornell argued that the '950 patent was invalid because it was anticipated by its VT–2 product, which was sold before the critical date for the '950 patent. Cornell further asserted that the '950 patent was anticipated, or rendered obvious, by several other prior art references, including the Air–Flo insulated roofing panel manufactured by Branch River Foam Plastics, Inc. (“Branch River”).
Old Reliable, however, argued that the VT–2 did not anticipate the '950 patent because it did not teach all of the structural elements required by the asserted claims. Specifically, Old Reliable asserted that because the VT–2 contained a layer of OSB between the insulation and the spaced blocks, the blocks were not “integral” with the “main portion” of insulating material. See '950 patent, col.7 l.29–col.8 l.2 (). Old Reliable further contended that the Air–Flo product was not anticipatory prior art because it did “not disclose blocks that define interconnected channels” as required by the asserted claims and did not allow for cross-venting.
In September 2007, Cornell deposed Anthony Crookston, Jr., Old Reliable's founder and the named inventor on the '950 patent. Crookston stated that the Inventsaboard (the commercial embodiment of the '950 patent), the VT–1 (the accused product) and the VT–2 (the product alleged to anticipate) did “[e]xactly the same thing.” Cornell also produced literature indicating that the Branch River Air–Flo product had channels that could “be provided in either direction” to suit particular roofing requirements.
In a March 3, 2008, deposition, James Rice, Ph.D., Old Reliable's expert, acknowledged that if the Air–Flo product had been manufactured with cross-channels it would have been “identical to” the invention claimed in the ' 950 patent. Furthermore, Richard Dauphinais, a long-time Branch River employee, testified that Branch River filled an order in which it had cut cross-channels into its Air–Flo product prior to the '950 patent's critical date.
In December 2007, the district court issued a claim construction order, construing the term “integral” to mean “formed with or joined to” and the term “adhered” to mean “attached.” In March 2009, the trial court granted Cornell's motion for summary judgment of patent invalidity, concluding that the VT–2 product was anticipatory prior art. Although the court acknowledged that the VT–2 contained a layer of OSB between the insulation and the spaced blocks, it determined that the spaced blocks were nonetheless “integral” with the main portion of insulating material as required by the asserted claims. Old Reliable Wholesale, Inc. v. Cornell Corp., 609 F.Supp.2d 742, 748 (N.D.Ohio 2009) (“ Invalidity Decision ”).
The trial court also determined that the '950 patent was anticipated by the Branch River Air–Flo product. Id. at 748–49. Rejecting Old Reliable's argument that the Air–Flo product did not contain the cross-ventilation feature required by the asserted claims, and relying of the deposition testimony of Dauphinais, the district court held that an Air–Flo product with cross-ventilation was sold prior to the '950 patent's critical date. Id. at 749.
In addition, the court concluded that the '950 patent was invalid as obvious under 35 U.S.C. § 103(a). Noting that “[a]nticipation is the epitome of obviousness,” the court determined that since the VT–2 and the Air–Flo products anticipated the '950 patent, they also rendered the asserted claims obvious. Id. at 749 (citations and internal quotation marks omitted).
Old Reliable timely appealed to this court. On December 11, 2009, after briefing and oral argument, we affirmed the district court's summary judgment of patent invalidity without opinion pursuant to Fed. Cir. R. 36. See Old Reliable Wholesale, Inc. v. Cornell Corp., 355 Fed.Appx. 417 (Fed.Cir.2009).
On April 17, 2009, Cornell filed a motion in district court asking that the case be declared exceptional and that it be awarded attorney fees pursuant to 35 U.S.C. § 285. On February 2, 2010, the district court granted the motion, and awarded Cornell attorney fees and related travel and out-of-pocket expenses in the amount of $183,517.11. The court also awarded Cornell its costs of $13,111.53 pursuant to 28 U.S.C. § 1920. Attorney Fees Decision, 2010 WL 446199, at *6–7, 2010 U.S. Dist. LEXIS 8756, at *21–22.
Although it determined that the case was exceptional, the trial court held that Cornell was only entitled to recover attorney fees for the portion of the infringement litigation following the September 26, 2007, Crookston deposition. Id. at *4, 2010 U.S. Dist. LEXIS 8756, at *12. The court concluded that Old Reliable may have “had some basis” for its contention that the VT–2 product did not anticipate the '950 patent prior to this deposition. Id. at *4, 2010 U.S. Dist. LEXIS 8756, at *13. The case became exceptional, however, after Crookston “admitted in deposition that the VT–2 ... did the same thing as his invention.” Id. at *4, 2010 U.S. Dist. LEXIS 8756, at *12. After this testimony, “it was apparent that [the '950] patent was anticipated and any further action against Cornell for infringement was baseless.” Id. at *4, 2010 U.S. Dist. LEXIS 8756, at *13. In the court's view, Old Reliable's decision to maintain its infringement action following Crookston's deposition was “improper and unjustified” and “warranted a finding of an exceptional case” under 35 U.S.C. § 285. Attorney Fees Decision, 2010 WL 446199, at *4, 2010 U.S. Dist. LEXIS 8756, at *13.
On October 16, 2008, the United States Patent and Trademark Office (“PTO”) granted Cornell's request for ex parte reexamination of the 1 950 patent. After reviewing numerous prior art references, including the VT–2 and the Air–Flo, the PTO concluded that “[n]one of the prior art discloses nor renders obvious the combination of features” disclosed in the ' 950 patent.
Soon thereafter, however, the PTO withdrew the notice of intent to issue an ex parte reexamination certificate for the '950 patent. In withdrawing the notice, the PTO stated that “the claims of [the '950 patent] are invalid” and noted that this court had affirmed the district court's invalidity determination.
On March 2, 2010, Old Reliable filed a timely notice of appeal of the district court's judgment awarding Cornell attorney fees under section 285. This court has jurisdiction pursuant to 28 U.S.C. § 1295(a)(1). When reviewing a section “285 exceptional case determination, we review the district court's underlying factual findings for clear error and its legal conclusions without deference.” Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1026 (Fed.Cir.2008).
A district court is vested with authority to award attorney fees to a prevailing party in patent litigation if it determines that the case is “exceptional.” 35 U.S.C. § 285. While the discretion granted to a trial court under section 285 is broad, it is not unbridled. See Wedgetail, Ltd. v. Huddleston Deluxe, Inc., 576 F.3d 1302, 1304 (Fed.Cir.2009)...
To continue reading
Request your trial
-
Westerngeco L.L.C. v. Ion Geophysical Corp.
...success on the merits.” Id. at 1006, 1008;iLOR, LLC v. Google, Inc., 631 F.3d 1372, 1378 (Fed.Cir.2011); Old Reliable Wholesale, Inc. v. Cornell Corp., 635 F.3d 539, 544 (Fed.Cir.2011). ION claims that it was not unreasonable for it to rely on its belief that there was no infringement becau......
-
Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc.
...sanctioned party is (1) objectively unreasonable, and (2) asserted in subjective bad faith. See, e.g., Old Reliable Wholesale, Inc. v. Cornell Corp., 635 F.3d 539, 543–44 (Fed.Cir.2011); iLOR, LLC v. Google, Inc., 631 F.3d 1372, 1377 (Fed.Cir.2011); Seagate, 497 F.3d at 1370–71;Brooks Furni......
-
Metso Minerals, Inc. v. Powerscreen Int'l Distribution Ltd.
...or unprofessional conduct by a party or his attorneys during the course of adjudicative proceedings.” Old Reliable Wholesale, Inc. v. Cornell Corp., 635 F.3d 539, 549 (Fed.Cir.2011). “Typically, ‘litigation misconduct’ refers to bringing vexatious or unjustified suits, discovery abuses, fai......
-
Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc.
...objectively baseless, we need not reach the question of whether Allcare acted in subjective bad faith. See Old Reliable Wholesale, Inc. v. Cornell Corp., 635 F.3d 539, 547 n. 4 (“When making a section 285 fee award, subjective considerations of bad faith are irrelevant if the challenged cla......
-
Chapter §20.06 Attorney Fees in Exceptional Cases
...case finding, including . . . engaging in vexatious or unjustified litigation."). See also Old Reliable Wholesale, Inc. v. Cornell Corp., 635 F.3d 539, 549 (Fed. Cir. 2011) (footnote omitted), explaining that [w]here a party engages in litigation misconduct, fees can be awarded pursuant to ......
-
Administrating Patent Litigation
...Lee, supra note 282, at 9-17 (discussing patent cases' burdens on the judiciary). 428. See Old Reliable Wholesale, Inc. v. Cornell Corp., 635 F.3d 539, 548 (Fed. Cir. 2011); Kumar, supra note 14, at 536-37 (discussing the ITC's expertise in patent disputes). 429. 635 F.3d at 548. 430. Id. (......
-
Chapter §20.09 Costs
...Civ. P. 54(d)(1), and affirming award of approximately $83,000 in costs).[1183] See, e.g., Old Reliable Wholesale, Inc. v. Cornell Corp., 635 F.3d 539, 542 (Fed. Cir. 2011) (noting that district court, in addition to awarding attorney fees, "also awarded Cornell [accused infringer and chall......