Fiskars, Inc. v. Hunt Mfg. Co.

• Decision Date: 15 February 2002
• Docket Number: No. 01-1193.,01-1193.
• Citation: 279 F.3d 1378
• Parties: FISKARS, INC. and Fiskars OY AB, Plaintiffs-Appellees, v. HUNT MANUFACTURING CO., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1378

279 F.3d 1378

FISKARS, INC. and Fiskars OY AB, Plaintiffs-Appellees, v. HUNT MANUFACTURING CO., Defendant-Appellant.

No. 01-1193.

United States Court of Appeals, Federal Circuit.

February 15, 2002.

Naikang Tsao, Foley & Lardner, of Madison, WI, argued for plaintiff-appellee. With him on the brief was David J. Harth, Heller Ehrman White & McAuliffe, of Madison, WI. Of counsel on the brief was Joan L. Eads, Foley & Lardner.

Joseph F. Posillico, Synnestvedt & Lechner, of Philadelphia, PA, argued for defendant appellant. With him on the brief were Mark D. Simpson and Gary A. Hecht.

Before GAJARSA, Circuit Judge, PLAGER, Senior Circuit Judge, and DYK, Circuit Judge.

PLAGER, Senior Circuit Judge.

Fiskars OY AB and Fiskars, Inc. (collectively "Fiskars") are the owner and exclusive licensee, respectively, of U.S. Patent No. 5,322,001, which is directed to a paper trimmer with a rotary blade. Fiskars filed suit against Hunt Manufacturing Co. ("Hunt") in the United States District Court for the Western District of Wisconsin, alleging that Hunt's Heavy Duty 12" Paper Trimmer infringed the Fiskars patent. A jury found Hunt liable for infringement under the doctrine of equivalents and awarded Fiskars more than $3 million in lost profits damages. Twenty-one months after the district court entered judgment, Hunt filed a motion for relief from judgment pursuant to Fed.R.Civ.P. 60(b)(5) or (6), seeking vacatur of the damages award. Hunt appeals the district court's denial of that motion. Because the district court did not abuse its discretion in denying Hunt's motion, we affirm.

BACKGROUND

After the trial court granted Hunt's motion for partial summary judgment that Hunt did not literally infringe the Fiskars patent, the issues of infringement under the doctrine of equivalents and damages were tried to a jury. The jury found that Hunt infringed several claims of the Fiskars patent under the doctrine of equivalents and awarded Fiskars more than $3 million in damages, including lost profits, lost profits due to price erosion, and projected lost profits resulting from future price erosion.

At trial, Fiskars asserted entitlement to lost profits on the theory that "but for" Hunt's infringement, Fiskars would have made additional sales of its own product, allegedly an embodiment of the claimed invention, and would have been able to charge higher prices during the period of infringement and in the future.¹ Hunt attempted to rebut Fiskars' lost profits theory by arguing that several third-party paper trimmers on the market, both rotary and guillotine trimmers, were acceptable non-infringing alternatives to Fiskars' product.² Hunt's evidence consisted primarily of expert opinion testimony that other paper trimmers were acceptable substitutes to consumers although they did not include certain features of the claimed invention. Hunt presented no sales figures or other data that might illustrate market behavior or customer demand and thereby support the opinions of Hunt's damages experts.

On post-trial motions, the trial court sustained the infringement verdict and the damages award. We affirmed the judgment of the trial court in all respects. Fiskars, Inc. v. Hunt Mfg. Co., 221 F.3d 1318, 55 USPQ2d 1569 (Fed.Cir.2000), cert. denied, 532 U.S. 972, 121 S.Ct. 1603, 149 L.Ed.2d 469 (2001).

Upon receipt of the infringement verdict, Hunt discontinued sales of the infringing trimmer and began selling instead a new rotary trimmer. Hunt alleges, and Fiskars has not disputed, that its new trimmer does not infringe, either literally or under the doctrine of equivalents, because it lacks a means for biasing the cutting blade to an inoperative position, a limitation in Fiskars' patent claims. According to Hunt, the new non-infringing rotary trimmer was designed "shortly before the trial" and was "available for shipping by the trial date." Nevertheless, Hunt did not disclose at trial that it had developed a new, non-infringing product.

On May 1, 2000, twenty-one months after entry of the trial court's judgment, and while Hunt's appeal to this court was pending, Hunt filed a motion for relief from judgment under Fed.R.Civ.P. 60(b)(5), which provides relief when "it is no longer equitable that the judgment should have prospective application," or Fed.R.Civ.P. 60(b)(6), a catchall provision providing that a final judgment may be set aside "for any other reason justifying relief from the operation of the judgment." Hunt sought vacatur of the damages award, contending that Fiskars was not entitled to lost profits damages because post-judgment sales data established that Hunt's new trimmer was a non-infringing alternative that was acceptable to consumers. Hunt argued that in accordance with this court's decision in Grain Processing Corp. v. American Maize-Products Co., 185 F.3d 1341, 51 USPQ2d 1556 (Fed.Cir. 1999), its new trimmer could be considered an available non-infringing alternative without being on the market during the period of infringement. In this case, however, direct evidence of the product's acceptability was not available until after trial when it was placed on the market. The district court denied Hunt's motion, stating that "Rule 60(b)(5) was never intended to provide an avenue for relief from an award of money damages because of developments post-dating the trial," and finding nothing extraordinary about Hunt's circumstances to bring it within the purview of Rule 60(b)(6). Fiskars, Inc. v. Hunt Mfg. Co., No. 97-C-0255-C (W.D.Wis. Jan. 2, 2001) (opinion and order).

Hunt appeals the denial of its motion with respect to Rule 60(b)(6) only. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

DISCUSSION

I.

The first issue raised by the parties is whether we should apply Federal Circuit law or the law of the regional circuit in which the district court sits, here the Seventh Circuit, in our review of the district court's denial of Hunt's Rule 60(b)(6) motion. When reviewing non-patent issues, our general practice is to apply the law of the regional circuit. Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 1359, 50 USPQ2d 1672, 1675 (Fed.Cir. 1999) (en banc in relevant part). Because rulings under Rule 60(b) commonly involve procedural matters unrelated to patent law issues as such, we often defer to the law of the regional circuit in reviewing such rulings. See, e.g., Marquip, Inc. v. Fosber Am., Inc., 198 F.3d 1363, 1369-70, 53 USPQ2d 1015, 1020 (Fed.Cir.1999) (under Seventh Circuit Law, affirming denial of Rule 60(b) motion based on newly discovered evidence regarding accused device); Engel Indus., Inc. v. Lockformer Co., 166 F.3d 1379, 1384, 49 USPQ2d 1618, 1622 (Fed.Cir.1999) (under Eighth Circuit law, affirming denial of Rule 60(b)(3) motion based on allegedly fraudulent misrepresentations of fact during trial and on appeal); Amstar Corp. v. Envirotech Corp., 823 F.2d 1538, 1550, 3 USPQ2d 1412, 1421 (Fed.Cir.1987) (under Tenth Circuit law, affirming denial of Rule 60(b) motion based on newly discovered prior art); Ashland Oil, Inc. v. Delta Oil Prods. Corp., 806 F.2d 1031, 1033, 1 USPQ2d 1073, 1075 (Fed.Cir.1986) (under Seventh Circuit law, affirming denial of Rule 60(b) motion following a change of law).

Nevertheless, a procedural issue that is itself not a substantive patent law issue may be governed by Federal Circuit law if the issue "pertain[s] to patent law,... bears an essential relationship to matters committed to our exclusive control by statute, ... or clearly implicates the jurisprudential responsibilities of this court in a field within its exclusive jurisdiction." Midwest Indus., 175 F.3d at 1359, 50 USPQ2d at 1675 (internal quotation marks and citations omitted). Consequently, when a district court's Rule 60(b) ruling turns on substantive matters that pertain to patent law, we review the ruling under Federal Circuit law because "we perceive a clear need for uniformity and certainty in the way the district courts treat [the] issue." Broyhill Furniture Indus., Inc. v. Craftmaster Furniture Corp., 12 F.3d 1080, 1083, 29 USPQ2d 1283, 1285 (Fed. Cir.1993).

We agree with Hunt that Federal Circuit law should govern our review of the district court's denial of Hunt's Rule 60(b)(6) motion seeking relief under the Panduit factors. In Broyhill, we resolved as a matter of Federal Circuit law the issue whether a consent judgment enjoining infringement of a patent should be set aside pursuant to Rule 60(b) following a judicial determination in another proceeding that the patent was procured through inequitable conduct. Id. As in Broyhill, the issue before us — whether a lost profits damages award should be set aside because post-trial sales data may show the acceptability of a non-infringing alternative product — turns on a substantive area of patent law. Because resolution of this issue necessarily requires an understanding of the distinctive characteristics of patent damages law, we apply Federal Circuit law in our review. As we have not previously had occasion to consider Rule 60(b)(6) as a matter of Federal Circuit law, however, we may look to the law of other circuits, including the Seventh Circuit, that have reviewed Rule 60(b)(6) rulings. See Broyhill, 12 F.3d at 1083 n. 1, 29 USPQ2d at 1285 n. 1.

II.

We review the district court's denial of a Rule 60(b) motion to determine if the court abused its discretion. Id. at 1083, 12 F.3d 1080, 29 USPQ2d at 1285. Under the law of this circuit, an abuse of discretion exists when the trial court's decision is clearly unreasonable, arbitrary or fanciful, or is based on clearly erroneous findings of fact or erroneous conclusions of law. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1460, 46 USPQ2d 1169, 1178 (Fed.Cir.1998) (en banc); cf. Provident Sav. Bank v. Popovich, 71 F.3d 696, 698 (7th Cir.1995) ("[W]e review a district court's denial of relief under Rule 60(b) for an abuse of discretion, and we will reverse only if we conclude that no...