Bio-Rad Laboratories, Inc. v. Nicolet Instrument Corp.

• Decision Date: 12 July 1984
• Docket Number: BIO-RAD,No. 83-829,83-829
• Citation: 739 F.2d 604,222 USPQ 654
• Parties: LABORATORIES, INC., a Delaware Corporation, Plaintiff-Appellee, Cross- Appellant, v. NICOLET INSTRUMENT CORPORATION, a Wisconsin Corporation, Defendant-Appellant, Cross-Appellee. Appeal/83-864.
• Court: U.S. Court of Appeals — Federal Circuit

Page 604

739 F.2d 604

222 U.S.P.Q. 654

BIO-RAD LABORATORIES, INC., a Delaware Corporation Plaintiff-Appellee, Cross- Appellant, v. NICOLET INSTRUMENT CORPORATION, a Wisconsin Corporation Defendant-Appellant, Cross-Appellee.

Appeal No. 83-829/83-864.

United States Court of Appeals Federal Circuit.

July 12, 1984.

Harold C. Hohback, San Francisco, Cal., argued for appellant. With him on the brief were William J. Egan, III, and William A. Cammett, San Francisco, Cal.

Robert J. Sherman and David A. Allgeyer, Minneapolis, Minn., were on the brief for appellant.

Roger L. Cook, San Francisco, Cal., argued for appellee. With him on the brief were J. Georg Seka, David N. Slone and John W. Schlicker, San Francisco, Cal., of counsel.

Before FRIEDMAN, Circuit Judge, NICHOLS, Senior Circuit Judge, and BALDWIN, Circuit Judge.

BALDWIN, Circuit Judge.

This is an appeal from an unpublished decision of the United States District Court for the Northern District of California holding claims 1-7 of U.S. Patent No. 3,319,515 (hereinafter '515 patent or Flournoy patent) for an "Interferometric Optical Phase Discrimination Apparatus" valid and infringed. Judgment was entered on a jury verdict rendered after fourty-four days of trial. We vacate the District Court's denial of prejudgment interest and remand for an award of prejudgment interest or a determination that some reason exists for denying prejudgment interest. In all other respects, the judgment is affirmed.

The Parties

Bio-Rad Laboratories, Inc. (Bio-Rad) is a Delaware corporation with its principal office in Richmond, California. Between 1978 and 1979, Bio-Rad acquired two divisions, Digilab, Inc. (Digilab) and Block Engineering, Inc. (Block Engineering). Digilab was formed as a subsidiary of Block Engineering in 1969 to produce and sell instruments that rapidly measure the crystalline surface layer on semiconductors, known as the epitaxial layer. Since 1970, Digilab has manufactured and sold an epitaxial measuring instrument known as the FTG-12 under an exclusive license from E.I. du Pont de Nemours and Company (du Pont), owner of the '515 patent. When Bio-Rad acquired Block Engineering and Digilab, it also acquired the exclusive license under the '515 patent which included the right to enforce the patent against infringers. The name Bio-Rad will be used throughout this opinion to refer to the conduct of Digilab, and Block Engineering, as well as the conduct of Bio-Rad.

Nicolet Instrument Corporation (Nicolet) is a Wisconsin corporation engaged in the production and sale of electronic instruments. In 1979, Nicolet began selling an epitaxial thickness measuring instrument known as the MX-ECO.

Procedural Background

In 1981, Bio-Rad sued Nicolet for willful infringement of the '515 patent by Nicolet's production and sale of the MX-ECO measuring instrument. Nicolet counterclaimed for a declaratory judgment that the '515 patent is invalid and not infringed, and for alleged violations of the antitrust laws.

Both Bio-Rad and Nicolet demanded a jury trial and agreed to submit the case to the jury on general verdicts without special interrogatories. The jury declared all seven claims of the '515 patent valid and infringed, but not willfully infringed. The jury also concluded that Bio-Rad did not violate sections 1 or 2 of the Sherman Antitrust Act. The jury awarded Bio-Rad $3,078,000 in money damages for the infringement.

Nicolet moved for judgment notwithstanding the verdict (JNOV) and, in the alternative, for a new trial. Nicolet also moved to deny enforcement of the '515 patent for misuse. The district court denied all three motions and denied Bio-Rad's separate request for prejudgment interest. The trial judge entered judgment on the jury verdicts without comment and permanently enjoined Nicolet from infringing the '515 patent in any way, including by the production, use or sale of the MX-ECO epitaxial thickness gauge. Interest was awarded from the date judgment was entered.

Nicolet appeals from the judgment entered by the District Court, and from the court's refusal to declare the '515 patent unenforceable for patent misuse. Bio-Rad cross-appeals from the lower court's denial of prejudgment interest. Although this appeal is from the judgment entered on the jury verdict, the District Court's denial of Nicolet's motions guides our analysis. Accordingly, we consider the issues raised by the parties in the following order:

I. Grounds For JNOV.

II. Grounds For New Trial.

III. Patent Misuse.

IV. Prejudgment Interest.

Standard of Review

Several cases have issued from this court describing the analysis trial judges should follow when they entertain motions for JNOV or new trial. Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1546, 220 USPQ 193, 197 (Fed.Cir.1983); Railroad Dynamics, Inc. v. A. Stucki Co., 727 F.2d 1506, 1512-13, 220 USPQ 929, 936 (Fed.Cir.1984); Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 221 USPQ 669, 672-673 (Fed.Cir.1984). That analysis need not be repeated here, but description of our appellate review process is useful.

Nicolet has urged that we review the record de novo, in part because no interrogatories were submitted to the jury and because the trial judge did not produce a written opinion discussing reasons for denying Nicolet's motions or describing the facts supporting the jury verdict. Nicolet mistakes our role. The presence of special interrogatories or a written opinion by the trial court certainly makes our task easier but the absence of these aids does not alter our standard of review. In the absence of special interrogatories we presume the existence of factual findings and legal conclusions necessary to support the verdict reached by the jury. The findings and conclusions are controlled by the court's instructions to the jury. Perkin-Elmer, 732 F.2d at 893, 221 USPQ at 673. On appeal after denial of a motion for JNOV, appellant must show either: 1) that the jury's presumed or express findings are not supported by substantial evidence or, 2) if the jury's findings were supported by substantial evidence, that the legal conclusions implied from the verdict cannot be supported by those findings. Perkin-Elmer, 732 F.2d at 893, 221 USPQ at 673. In sum, appellant must show either that reasonable jurors could not have made the presumed findings or that the conclusions necessary to the general verdict were not supported. The District Court's denial of Nicolet's Motion for a new trial is reviewed on an abuse of discretion standard. Railroad Dynamics, Inc. v. A. Stucki Co., 727 F.2d at 1512, 220 USPQ at 935. As this description of our approach demonstrates, our role as a reviewing court is circumscribed by standards that place a difficult burden on appellant.

Analysis

I. Grounds For JNOV

To overturn the District Court's denial of the Motion For JNOV, Nicolet presents several grounds for declaring the '515 patent invalid. The various grounds for invalidity will be discussed under the following lettered sections:

A. Anticipation and Obviousness.

B. Fraud.

C. Compliance With The Requirements Of 35 U.S.C. Sec. 112.

D. Infringement.

A. Anticipation and Obviousness

1. Description of the Invention

The '515 patent claims a method and apparatus for determining the thickness of a film or a surface layer on a substrate. The apparatus, known as an interferometer, may be used to measure the thin crystalline surface layer of semiconductors, known as the epitaxial layer. The claimed method is represented by claim 1 of the '515 patent, reproduced below:

1. A method for determining a physical property of a specimen on the basis of interferometic optical phase discrimination comprising, in sequence, directing analytical radiation upon said specimen along a course such that there is developed an optical phase difference between radiation emanating from a first radiation-reflective surface of said specimen and from a second radiation-reflective surface of said specimen, cyclically varying at a predetermined time rate the length of the path of travel of said radiation emanating from a given one of the pair consisting of said first radiation-reflective surface of said specimen and said second radiation-reflective surface of said specimen, with respect to the length of the path of travel of the radiation emanating from the other of said pair over a span inclusive of a zero-order peak at which there exists constructive interference between said radiation emanating from said first radiation-reflective surface of said specimen and from said second radiation-reflective surface of said specimen, measuring the elapsed time existing between the scan traverse of said zero-order peak at which there exists said constructive interference and a preselected reference point synchronized in time with the cycle of said scan traverse, said preselected reference point being originally established in location by scanning said specimen through a span inclusive of a central zero-order peak, and determining said physical property of said specimen as a function of said elapsed time.

The apparatus claims correspond to the method claims as illustrated by claim 5, reproduced below:

5. Apparatus for determining a physical property of a specimen on the basis of interferometric optical phase discrimination comprising, in combination, a source directing radiation upon said specimen of a wavelength adapted to develop an optical phase difference between radiation emanating from a first radiation-reflective surface of said specimen and from a second radiation-reflective surface of said specimen, means cyclically varying at a predetermined time rate the length of the path of travel of said radiation emanating from a given one of the pair consisting of said first radiation-reflective surface of said specimen and said second radiation-reflective surface of said specimen with respect to the length of the path of travel of the radiation emanating from the other of said...