Aero Products Intern. v. Intex Recreation Corp.

• Decision Date: 02 October 2006
• Docket Number: No. 05-1283.,05-1283.
• Citation: 466 F.3d 1000
• Parties: AERO PRODUCTS INTERNATIONAL, INC. and Robert B. Chaffee, Plaintiffs-Appellees, v. INTEX RECREATION CORP., Quality Trading, Inc., and Wal-Mart Stores, Inc., Defendants-Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

466 F.3d 1000

AERO PRODUCTS INTERNATIONAL, INC. and Robert B. Chaffee, Plaintiffs-Appellees, v. INTEX RECREATION CORP., Quality Trading, Inc., and Wal-Mart Stores, Inc., Defendants-Appellants.

No. 05-1283.

United States Court of Appeals, Federal Circuit.

October 2, 2006.

Michael P. Chu, Brinks Hofer Gilson & Lione, of Chicago, IL, argued for plaintiffs-appellees. With him on the brief were William H. Frankel, Meredith Martin Addy, Mark H. Remus, and David H. Bluestone.

Donald R. Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Washington, DC, argued for defendants-appellants. With him on the brief were Kara F. Stoll and Edward J. Naidich.

Before RADER, SCHALL, and DYK, Circuit Judges.

SCHALL, Circuit Judge.

Aero Products International, Inc. ("Aero Products") and Robert B. Chaffee (collectively "Aero") sued Intex Recreation Corp. ("Intex"), Quality Trading, Inc. ("Quality Trading"), and Wal-Mart Stores, Inc. ("Wal-Mart") (collectively "defendants") in the United States District Court for the Northern District of Illinois for infringement of U.S. Patent No. 5,367,726 ("the '726 patent") and for infringement of Aero's registered trademark "ONE TOUCH." Following a jury trial, the district court entered judgment of infringement and non-invalidity in favor of Aero with respect to the asserted claims of the '726 patent and with respect to Aero's trademark claim. Based upon that judgment, the court awarded Aero damages in the total amount of $6.9 million. See Aero Prods. Int'l, Inc. v. Intex Rec. Corp., No. 02 C 2590, 2004 U.S. Dist. LEXIS 25941 (N.D.Ill.Dec. 15, 2004) ("Order Denying New Damages Trial"). The total damages award was based on the jury's finding that Aero was entitled to recover $2.95 million as patent infringement damages, which the district court doubled based upon the jury's finding of willful infringement, Aero Prods. Int'l, Inc. v. Intex Rec. Corp., No. 02 C 2590, 2004 WL 1696749, at *5, 2004 U.S. Dist. LEXIS 13453, at *13 (N.D.Ill. July 15, 2004) ("Order Awarding Enhanced Damages"), and $1 million as trademark infringement damages. See Order Denying New Damages Trial, 2004 U.S. Dist. LEXIS 25941, at *2-3. In addition, the district court entered a permanent injunction in favor of Aero. Aero Prods. Int'l, Inc. v. Intex Rec. Corp., No. 02 C 2590, 2004 WL 2255984, 2004 U.S. Dist. LEXIS 28131 (N.D.Ill. Sept. 15, 2004); Aero Prods. Int'l, Inc. v. Intex Rec. Corp., No. 02 C 2590, 2004 WL 2091996, 2004 U.S. Dist. LEXIS 18648 (N.D.Ill. Sept. 15, 2004).

Defendants now appeal from the court's judgment. We see no error in the judgment of infringement and non-invalidity in favor of Aero. We do conclude, however, that, in the circumstances of this case, the award of both patent infringement and trademark infringement damages in favor of Aero represents an impermissible double recovery. Accordingly, we vacate the award of $1 million in trademark infringement damages in favor of Aero. We thus affirm-in-part, vacate-in-part, and remand to the district court for entry of a final judgment in favor of Aero consistent with this opinion.

BACKGROUND

I.

The invention claimed in the '726 patent "relates to inflatable support systems, which may include air mattresses, and inflation and control thereof."¹ '726 patent col.1, ll.14-16. The aspect of the invention that is the focus of this appeal is the claimed valve assembly. It is by means of the valve assembly that the air mattress is inflated and remains inflated. Id., col.3, l.68, to col.4, l.2.

Figure 3 of the '726 patent shows a cross-section of the valve assembly.

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

Id., fig. 3. Describing the operation of the valve assembly shown in Figure 3, the specification states that "[i]nflation is provided to the mattress 10 by means of the inflation input 322 having exterior threads 321...." Id., col.3, l.68, to col.4, l.2. The specification further states that "[a]ir pressure at the inflation input 322 causes the downward displacement of diaphragm 34 away from its valve seat 36, thereby permitting air flow through the first cylinder 32 via the triangular passageways 37." Id., col.4, ll.8-12. After the mattress has been inflated to the desired extent "and air pressure is removed from inflation input 322, the pressure of air in the mattress 10 urges the diaphragm 34 against valve seat 36 and produces a positive seal against the exit of air from the mattress." Id., col.4, ll.14-18. Thus, the valve assembly is described as "dual," id., col.3, l.65, because it (i) controls the flow of air into the mattress and (ii) operates to keep air in the mattress once the mattress is inflated.

Figure 15 of the '726 patent shows a cross-section of an alternative embodiment of the valve assembly. Id., fig.15. It includes a coupling labeled 1541 and an inflation input labeled 1542.

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Id., fig.15 & col.9, ll.34-35. The specification states that, in this embodiment, "[a] circular coupling 1541 includes an open end that constitutes the inflation input 1542. It also has a flared end that provides the valve seat 1543 in the form of a circular lip." Id., col.9, ll.34-37. The specification further states that "[i]t can be seen that the diaphragm [1544] can be accessed by an individual directly from the inflation input 1542 and can be pushed axially into an open position." Id., col.9, ll.41-43. Figure 17 below shows a top view of the embodiment in Figure 15, with the cover assembly in a closed position. Id., fig.17. The figure shows an inflation input labeled 1542:

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

Id., fig.17. The specification explains that, as shown in Figure 17, "the inflation input 1542 may be provided with a bayonette mount or other means for affixing an inflation device." Id., col.9, ll.52-55.

Five claims of the '726 patent are at issue: claim 9 and claims 12 through 15. Claims 9 and 12 are independent claims. Independent claim 9 states:

An inflatable support system, comprising:

an inflatable body having an interior, an exterior, and inflation input for transfer of air between the interior and exterior; and

a one-way valve, disposed between the interior and the inflation input, for controlling the transfer of air, providing a substantially hermetic seal under low pressure conditions, such valve including:

a passageway having a general circular cross section and a first end in communication with the interior and a second end in communication with the inflation input;

a circular lip, disposed peripherally in the passageway and protruding radially inward, having a first surface generally facing the interior, defining a valve seat;

a flexible circular diaphragm, having an interior surface generally facing the interior and an outer surface facing away from the interior mounted for axial movement in the passageway away from and against the valve seat in respectively open and closed positions of the valve, so that an outer annular region of the outer surface of the diaphragm engages against the valve seat in the closed position; and

a generally circular coupling defining the passageway, the coupling having an open end defining the inflation input and a flared end, contiguous therewith, providing the circular lip, so that the (i) the coupling at the open end has a smaller internal diameter than at the flared end and (ii) the diaphragm can be pushed axially to open the valve by reaching into the open end of the coupling.

Id., col.10, l.47, to col.11, l.11. Independent claim 12 of the '726 patent states:

An inflatable body comprising:

an inflatable bladder having an interior and an inflation input;

a one-way valve disposed between the interior and the inflation input providing a substantially hermetic seal under low pressure conditions, such valve including:

a passageway having a generally circular cross section and a first end in communication with the interior and a second end in communication with the inflation input;

a circular lip, disposed peripherally in the passageway and protruding radially inward, having a first surface generally facing the interior, defining a valve seat;

a flexible circular diaphragm, having an inner surface generally facing the interior and an outer surface facing away from the interior, mounted for axial movement in the passageway away from and against the valve seat in the respectively open and closed positions of the valve, so that (i) the act of inflation of the bladder under low pressure is sufficient to cause axial motion of the valve into the open position to permit the large influx of air and (ii) following inflation of the bladder, air pressure created in the interior [of] the bladder by inflation thereof causes an outer annular region of the outer surface of the diaphragm to be urged into engagement against the valve seat to provide a complete hermetic seal when the valve is in the closed position; and

stiffening means for reducing flexing of the diaphragm except in its outer annular region.

Id., col.11, ll.27-59. Dependent claims 13-15 depend on independent claim 12. Id., col. 12, ll.1-9.

II.

Aero Products sells inflatable air mattresses. In 1991, Mr. Chaffee licensed his technology to Aero Products. The '726 patent number is marked on the mattress Aero Products sells, as well as on the product packaging, related documentation in the form of "sell sheets," and instructions. To help market its products, Aero Products coined the term "ONE TOUCH." Aero first used "ONE TOUCH" in November of 1991. It registered the trademark with the United States Patent and Trademark Office in June of 1994. U.S. Trademark Reg. No. 1,839,444. The mark "ONE TOUCH" appears on commercial embodiments of the invention of the '726 patent.

Intex also sells inflatable air mattresses. Intex introduced its accused air mattresses in 2000 and sold them to retailers such as Quality...