Dana Corp. v. American Axle & Manufacturing, Inc., 01-1008.

• Citation: 279 F.3d 1372
• Decision Date: 12 February 2002
• Docket Number: No. 01-1008.,01-1008.
• Parties: DANA CORPORATION, Plaintiff-Appellant, v. AMERICAN AXLE & MANUFACTURING, INC., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

279 F.3d 1372

DANA CORPORATION, Plaintiff-Appellant, v. AMERICAN AXLE & MANUFACTURING, INC., Defendant-Appellee.

No. 01-1008.

United States Court of Appeals, Federal Circuit.

February 12, 2002.

R. Terrance Rader, Rader, Fishman & Grauer PLLC, of Bloomfield Hills, Michigan, argued for plaintiff-appellant. With him on the brief were Glenn E. Forbis, and Kristin L. Murphy.

Richard P. Vitek, Myers Bigel Sibley & Sajovec, P.A., of Raleigh, North Carolina, argued for defendant-appellee. With him on the brief was D. Randal Ayers. Of counsel was George D. Moustakas, Harness, Dickey & Pierce, of Troy, Michigan.

Before LOURIE, CLEVENGER, and GAJARSA, Circuit Judges.

LOURIE, Circuit Judge.

Dana Corporation appeals from the decision of the United States District Court for the Eastern District of Michigan granting American Axle & Manufacturing, Inc.'s ("AAM's") motion for summary judgment that U.S. Patents 5,643,093 and 5,637,042 are invalid under the public use and on-sale bars of 35 U.S.C. § 102(b). Dana Corp. v. Am. Axle & Mfg., Inc., No. 98-74521, slip op. at 11 (E.D.Mich. Sept. 1, 2000) ("Dana"). Because the district court erred in failing to construe the claims, apply them to the asserted prior invalidating acts, and evaluate whether there were genuine issues of material fact concerning the relationship between the alleged public use and sales and the properly construed claims, we vacate.

BACKGROUND

Dana is the assignee of the '093 and '042 patents, which are directed to swaged vehicle driveshafts with a diameter reducing portion "having a substantially uniform wall thickness." The '093 patent application was filed on October 19, 1995, and therefore has a critical date of October 19, 1994. Claim 1 of the '093 patent is as follows:

1. A drive line assembly comprising:

a driveshaft tube formed from a metallic material and including a homogeneous diameter reducing portion having a substantially uniform wall thickness. ....

'093 patent, col. 6, ll. 24-8 (emphasis added). Dependent claim 2 is directed to a driveshaft tube formed from an aluminum alloy. Id. at col. 6, ll. 47-8. Dependent claim 6 further modifies the drive line assembly of claim 1 as follows: "wherein said first diameter is about five inches and said second diameter is about four inches." Id. at col. 6, ll. 57-9.

The '042 patent application was filed on March 21, 1995 and therefore has a critical date of March 21, 1994. Claim 1 of that patent is as follows:

1. A drive line assembly comprising:

a driveshaft tube formed from a metallic material and having a substantially uniform wall thickness, said driveshaft tube terminating in an axially extending cylindrical end portion....

'042 patent, col. 4, ll. 63-7 (emphasis added). Independent claim 11 of the '042 patent is also directed to a driveline assembly "having a substantially uniform wall thickness." Id. at col. 6, ll. 1-3. Each of those independent claims is further modified by dependent claims directed to a driveshaft tube formed from an aluminum alloy, id. at col. 5, ll. 22-3 and col. 6, ll. 33-4, and a driveline assembly "wherein said first diameter is about five inches and said second diameter is about four inches," id. at col. 5, ll. 42-4 and col. 6, ll. 43-5.

Dana as well as AAM's predecessor, the Saginaw Division of General Motors, developed driveshafts prior to the critical dates. The designs of those driveshafts and their alleged public use and sales are in dispute. In particular, the parties dispute whether those designs were "butted," i.e., whether they had a thickened end tube.

Dana sued AAM for infringement of claims 1-7 of the '093 patent and claims 1-19 of the '042 patent; AAM moved for summary judgment of invalidity based on Saginaw's and Dana's activities before the critical dates. The district court granted AAM's motion, stating that "the only claim at issue is whether the diameter of the reducing portion of the swaged ends has a `substantially uniform wall thickness.'" Dana at 9. It determined that Saginaw's metal matrix composite ("MMC") driveshaft was offered for sale on February 7, 1992, in public use no later than 1993, and that General Motors officially awarded the business to Saginaw on September 30 1993. Id. at 7-8. The court found that each of those activities occurred before the critical dates of both patents and therefore served as a basis for invalidating all of the claims under § 102(b). Id. at 8-10. The court also concluded that Dana's own activities constituted an on-sale bar, finding that Douglas Breese, Dana's employee, disclosed and offered a driveshaft for sale to General Motors on July 30, 1993, and that Breese's orders for tubing dated September 23, 1993, showed "a swaged end that is not butted." Id. at 10-11. Accordingly, the court granted AAM's motion for summary judgment of invalidity of all of the claims of the '093 and '042 patents. Id. at 11. Dana appealed; we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

DISCUSSION

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). We review a district court's grant of a motion for summary judgment de novo. Ethicon Endo-Surgery, Inc. v. United States Surgical Corp., 149 F.3d 1309, 1315, 47 USPQ2d 1272, 1275 (Fed.Cir.1998).

A patent is presumed to be valid, 35 U.S.C. § 282, and this presumption can only be overcome by clear and convincing evidence of facts to the contrary. Whether a patent is invalid for a public use or sale is a question of law based on underlying facts. Intel Corp. v. Int'l Trade Comm'n, 946 F.2d 821, 829, 20 USPQ2d 1161, 1169 (Fed.Cir.1991).

On appeal, Dana argues that the district court erred by not independently construing the claim limitations before invalidating all of the claims on the grounds of the alleged public use and sales. Although acknowledging that it never proposed any construction of the claim limitations other than "substantially uniform wall thickness," Dana states that it was never given an opportunity to do so in the hearing for summary judgment on invalidity. Dana also asserts that genuine issues of material fact exist as to whether the claim limitations are met by the products giving rise to the alleged bars.

AAM responds that the district court properly performed its duty to construe the claims by adopting Dana's proposed construction of the only disputed limitation, "substantially uniform wall thickness." AAM also asserts that Dana waived its right to assert additional differences between the products and the claimed invention by not raising them to the district court. In any event, AAM sets forth in its brief on appeal the alleged claim-by-claim correspondence of the invention with the subjects of the alleged bars.

We agree with Dana that the court erred in invalidating all of the claims without evaluating whether the subjects of the alleged bars met the limitations of those claims. Under 35 U.S.C. § 102(b) (1994), in relevant part, "A person shall be entitled to a patent unless ... the invention was in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States...." When the asserted basis of invalidity is a public use or on-sale bar, the court should determine "whether the subject of the barring activity met each of the limitations of the claim, and thus was an embodiment of the claimed invention." Scaltech Inc. v. Retec/Tetra L.L.C., 178 F.3d 1378, 1383, 51 USPQ2d 1055, 1058 (Fed.Cir.1999).

In this case, the district court stated that "[t]he limitation at issue in independent claim 1 of [the '093 patent] and independent claims 1 and 11 of [the '042 patent] deals with the `substantially uniform wall thickness' of a driveshaft tube as it reduces in diameter from larger to smaller." Dana at 2. Although it never explicitly construed that limitation, it determined that Breese's prototype constituted an on-sale bar because it appeared to have a "swaged end that is not butted." Id. at 11. Thus, the court appears to have adopted Dana's proffered construction of that limitation as meaning a driveshaft tube with a swaged end that is not butted, i.e., not artificially thickened, but then held against Dana under its own proposed claim construction. Interestingly, AAM urged the court to adopt Dana's claim construction for purposes of the invalidity analysis. However, adoption by the court of a patentee's claim construction does not constitute a concession of the correctness of the court's application of those claims to the alleged...