Aevoe Corp. v. Ae Tech Co.

• Decision Date: 17 December 2013
• Docket Number: No. 2012–1422.,2012–1422.
• Citation: 727 F.3d 1375
• Parties: AEVOE CORP., Plaintiff–Appellee, v. AE TECH CO., LTD., S & F CORPORATION (doing business as SF Planet Company and SF Planet Corporation), And Greatshield, Inc., Defendants–Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

727 F.3d 1375

AEVOE CORP., Plaintiff–Appellee,

v.AE TECH CO., LTD., S & F CORPORATION (doing business as SF Planet Company and SF Planet Corporation), And Greatshield, Inc., Defendants–Appellants.

No. 2012–1422.

United States Court of Appeals,Federal Circuit.

Aug. 29, 2013.

Rehearing En Banc Denied Dec. 17, 2013.

David Spencer Bloch, Winston & Strawn LLP, of San Francisco, CA and Steffen N. Johnson, of Washington, DC, argued for plaintiff-appellee. With them on the brief were Jennifer A. Golinveaux, K. Joon Oh and Elisabeth A. Derby, of San Francisco, CA.

Lynn J. Alstadt, Buchanan Ingersoll & Rooney PC, of Pittsburgh, PA, argued for defendants-appellants. With him on the brief was Steven D. Czajkowski.

Before RADER, Chief Judge, LOURIE, and O'MALLEY, Circuit Judges.

O'MALLEY, Circuit Judge.

AE Tech Co., Ltd. (“AE Tech”), S & F Corporation, and GreatShield, Inc. ¹ appeal the district court's preliminary injunction granted in favor of Aevoe Corporation (“Aevoe”) barring particular products from the market. The district court originally granted the injunction in January 2012. AE Tech did not appeal from that order. In May 2012, the district court concluded that the Appellants had violated the injunction with an alleged redesign. At that time, the court altered certain language in the injunction. Appellants now argue that the court modified the injunction in May 2012 and that their appeal from that modification is timely. Because the district court merely clarified the scope of the original injunction in its May 2012 order, we find there was no modification that substantially changed the legal relationship between the parties. Based on this finding, we dismiss this appeal for lack of jurisdiction.

I. Background

Aevoe is the assignee of U.S. Patent No. 8,044,942 (“the '942 patent”), which is directed to a touch screen protector for electronic devices. The ' 942 patent generally discloses a touch screen protector for use on hand-held electronic devices that can be easily attached and removed without trapping air bubbles or dust. '942 patent, col. 1, ll. 10–55. The claimed touch screen protector includes a plastic film and a spacer. Id., col. 8, ll. 28–48. The spacer surrounds the thin plastic film and is sized to fit the particular device. The spacer must be thick enough to ensure that the plastic film does not make direct contact with the hand-held device screen, but thin enough such that a user can still easily make contact with the touch screen when pressing down on the film. Id. The spacer also includes an adhesive to allow the protector to be attached to and removed from the device. Id. A preferred embodiment is depicted in the '942 patent:

IMAGE

Id., Fig. 1C. The '942 patent has one independent claim and fourteen (14) dependent claims. Claim 1 is the sole independent claim:

1. A touch screen protector for a hand held electronic device having a front face that includes a touch screen portion and an outer perimeter comprising:

a plastic film having front and back sides, an outer perimeter that corresponds to that of the device, and a transparent window that corresponds in size to the touch screen portion; and

a spacer provided along the outer perimeter of the plastic film continuously surrounding the transparent window, having a thickness sufficient to space the plastic film near but not in contact with the touch screen portion, and an exposed adhesive for removably mounting the protector upon the outer perimeter of the front face to form an enclosed air space between the transparent window of the plastic film, the spacer and the touch screen portion of the device;

wherein the window can be pressed against the touch screen portion for operation of the electronic device while preventing direct contact of a user's fingers with the touch screen portion and without producing visible interference patterns during use.

Id., col. 8, ll. 28–48.

On December 7, 2011, Aevoe sued AE Tech in the District Court for the Northern District of California, alleging that AE Tech's touch screen products, including its APlus Shield Anti–Glare product, infringed the '942 patent. See Aevoe Corp. v. AE Tech Co., 5:11–cv–6164, ECF No. 1 (N.D.Cal. Dec. 7, 2011).² Before AE Tech responded to the California action, Aevoe learned that AE Tech was marketing the allegedly infringing touch screen products in Las Vegas at the Consumer Electronics Show. Aevoe subsequently filed a separate suit in the District Court for the District of Nevada, alleging that AE Tech was infringing the ' 942 patent. See Aevoe Corp. v. AE Tech. Co., 2:12–cv–53, ECF No. 1 (D.Nev. Jan. 1, 2012). There, Aevoe requested a temporary restraining order, which the district court granted, barring AE Tech from selling its ACase and APlus Shield Anti–Glare products. See Aevoe Corp., ECF No. 8 (D.Nev. Jan. 12, 2012). The court also ordered that AE Tech show cause why a preliminary injunction should not issue. Id. Despite receiving notice of the restraining and show cause orders, AE Tech did not answer the complaint, respond, or appear.

After AE Tech failed to respond to the show cause order, the district court issued a preliminary injunction:

IT IS HEREBY ORDERED THAT AE Tech, its agents, servants, employees, confederates, attorneys, and any persons acting in concert or participation with them, or having knowledge of this Order by personal service or otherwise be, and hereby are, preliminarily enjoined from practicing, making, manufacturing, importing, offering for sale, selling, and/or otherwise using U.S. Patent No. 8,044,942, or any reproduction, counterfeit, copy, or colorable imitation of the same, and from transferring, moving, returning, destroying, or otherwise disposing of any [AE Tech touchscreen protectors that meet the '942 patent claim limitations], including but not limited to ACase APlus Shield Anti–Glare products pending a trial on the merits, AE Tech is hereby given further notice that it shall be deemed to have actual notice of the issuance and terms of this preliminary injunction and that any act by it in violation of any of the terms hereof may be considered and prosecuted as contempt of this Court.

Aevoe Corp., ECF No. 16 (D.Nev. Jan. 24, 2012). The preliminary injunction finally prompted AE Tech to respond. On February 7, 2012, AE Tech filed a motion to reconsider and vacate the preliminary injunction. See Aevoe Corp., ECF No. 25 (D.Nev. Feb. 7, 2012). AE Tech contested the grant of the preliminary injunction. Id. It argued, among other things, that Aevoe was unlikely to succeed on the merits because the '942 patent was invalid and unenforceable. Id. AE Tech also contended that the preliminary injunction was overbroad because it used trademark-related words such as “counterfeit” and “colorable imitation,” that broadened the reach of the injunction beyond the scope of the patent claims. Id.

The district court treated AE Tech's motion as a motion for reconsideration pursuant to Federal Rule of Civil Procedure 59(e). See Aevoe Corp., ECF No. 43 (D.Nev. March 7, 2012). In the Ninth Circuit, a Rule 59(e) motion may be granted if: (1) the motion is necessary to correct manifest errors of law or fact upon which the appealable order is based; (2) the moving party presents newly discovered or previously unavailable evidence; (3) the motion is necessary to prevent manifest injustice; or (4) there is an intervening change of law. See Turner v. Burlington Northern Santa Fe R. Co., 338 F.3d 1058, 1063 (9th Cir.2003) (citations omitted).

As such, the court analyzed whether it had committed clear error in its application of the criteria for determining whether to grant a preliminary injunction, i.e., likelihood of success on the merits, irreparable injury, balance of hardships, and the public interest. See Aevoe Corp., ECF No. 43 (D.Nev. March 7, 2012). The district court noted that AE Tech had waived the right to assert invalidity defenses to Aevoe's request for a preliminary injunction by not asserting them when given a full and fair opportunity to do so, and that there was no intervening change in controlling law. The court then concluded that it had not committed clear error, denied AE Tech's motion to reconsider, and refused to vacate the injunction. Id. The court, however, noted that Aevoe did not oppose AE Tech's request to remove the “counterfeit” and “colorable imitation” language from the injunction to clarify that the injunction is no broader than permitted under 35 U.S.C. § 271. Id.

After the hearing on AE Tech's motion for reconsideration, on March 5, 2012, AE Tech informed Aevoe that it had redesigned its product and was “intending” to sell the new product with the help of and through the S & F Defendants. AE Tech's redesign consisted of cutting two “channels” through the mounting adhesive of the accused devices. Aevoe was able to confirm, however, that AE Tech began selling the “redesigned” product before the March 5 notice, that AE Tech was in fact doing so through the S & F Defendants, and was doing so using the same product packaging and identification numbers used for the original allegedly infringing devices. Two days later, on March 7, 2012, the district court issued an order altering the January 24, 2012 injunction as requested by AE Tech to remove the “trademark language” (words in brackets were added by the district court):

IT IS HEREBY ORDERED THAT AE Tech, its agents, servants, employees, confederates, attorneys, and any persons [person] acting in concert or participation with them, or having knowledge of this Order by personal service or otherwise be, and hereby are, preliminarily enjoined [preliminary enjoyed (sic) ] from practicing, making, [using,] manufacturing, importing, offering for sale, selling, and/or otherwise using U.S. Patent No. 8,044,942, or any reproduction, counterfeit, copy, or colorable imitation of the same, and from transferring, moving, returning, destroying, or otherwise disposing of any [AE Tech...