Jamesbury Corp. v. Litton Indus. Products, Inc.

Decision Date12 March 1985
Docket NumberNo. 84-1079,84-1079
Citation225 USPQ 253,756 F.2d 1556
PartiesJAMESBURY CORP., Appellant, v. LITTON INDUSTRIAL PRODUCTS, INC., Appellee. Appeal
CourtU.S. Court of Appeals — Federal Circuit

Robert C. Miller, Oblon, Fisher, Spivak, McClelland and Maier, P.C., Arlington, Va., for appellant. With him on the brief was Arthur I. Neustadt, Arlington, Va.

Donald R. Dunner, Finnigan, Henderson, Farabow, Garrett and Dunner, Washington, D.C., for appellee; Allen M. Sokal, Finnigan, Henderson, Farabow, Garrett & Dunner, Washington, D.C., of counsel; Spencer T. Smith, Hartford, Conn., on the brief.

Before NIES, NEWMAN and BISSELL, Circuit Judges.

NIES, Circuit Judge.

I.

Jamesbury Corp., the plaintiff below, charged Litton Industrial Products with infringing claims 7 and 8 of its U.S. Patent No. 2,945,666 to Freeman entitled "Ball Valve". 1 Following a seven day jury trial, the jury returned a verdict for Litton, concluding, in answer to an interrogatory, that the asserted claims did not differ in any "significant particulars" from the prior art. 2 Under the court's instructions, this finding meant that the claims were invalid under 35 U.S.C. Sec. 102(a) 3 for lack of novelty. Jamesbury had timely objected to the jury charge on the issue of novelty and to the wording of the particular interrogatory under review, as well as to other instructions. No instructions were given with respect to obviousness of the claimed inventions, Litton having agreed that obviousness was not asserted as a ground for holding the claims invalid. Following entry of judgment, Jamesbury filed a motion under Fed.R.Civ.P. 50(b) for judgment notwithstanding the verdict, which was denied by the district court. In ruling on the motion, the district court stated:

The jury returned a verdict for the defendant in this patent infringement suit. The plaintiff has moved for judgment notwithstanding the verdict. The plaintiff is seeking judgment on all disputed issues: the validity of the patent, infringement of the patent, the amount of damages, and the defenses of laches and estoppel.

In its response to a special interrogatory, the jury made explicit its finding that the patent was invalid because of lack of novelty over the prior art. Thus the crucial issue to be resolved is whether the jury's finding of invalidity should be set aside. Judgment n.o.v. should only be granted when:

(1) there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise and conjecture, or (2) there is such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded men could not arrive at a verdict against him.

Mattivi v. South African Marine Corp., 618 F.2d 163, 168 (2d Cir.1980).

Neither of the tests for judgment n.o.v. is satisfied by the plaintiff's motion. The plaintiff alleges that the defendant has produced no evidence regarding the level of ordinary skill in the ball valve art. Although such proof is essential to support a finding of invalidity because of obviousness, see Environmental Designs v. Union Oil Co., 713 F.2d 693, 695 (Fed.Cir.1983), the plaintiff has cited no authority requiring such proof to support a finding of invalidity because of lack of novelty over the prior art. On the issue of novelty, there was ample evidence to support the jury's verdict; there was certainly not an overwhelming amount of evidence in the plaintiff's favor that reasonable and fair minded men could not arrive at a verdict against it.

For the foregoing reasons, the motion for judgment n.o.v. is denied.

In this appeal, Jamesbury argues that because of erroneous and prejudicial error in the instructions to the jury, it is entitled at least to a new trial. Jamesbury further asserts that because lack of novelty was not established and other grounds asserted for holding the claims invalid, namely, obviousness and inequitable conduct, were withdrawn or waived, the court erred in its ruling on Jamesbury's motion JNOV. We agree and, therefore, reverse the holding of invalidity of claims 7 and 8. The case is remanded for resolution of other issues.

II.

The standard of review of instructions is prejudicial legal error. Railroad Dynamics, Inc. v. A. Stucki Co., 727 F.2d 1506, 1512, 220 USPQ 929, 939 (Fed.Cir.1984).

A.

Jamesbury first attacks the following instruction which laid the foundation for the jury's deliberations:

[T]he public is a silent but nevertheless an important, an interested party in all patent litigation and it is entitled to protection against the monopolization of what is not lawfully patentable. In other words, it's not simply between Jamesbury and Litton. Other people are affected by it.

So I charge you that it is your duty to subject the invention defined in claims seven and eight of the Freeman patent to careful scrutiny before endorsing Jamesbury's right to the patent monopoly defined by such claims. [Emphasis added.]

Jamesbury argues that the effect of this instruction was to create a presumption of invalidity requiring Jamesbury to prove, beyond careful scrutiny, that it was entitled to maintain a monopoly, which, impliedly, was against the public interest. We agree that this instruction is legally erroneous and prejudicial.

The language that the jury must give "careful scrutiny" before "endorsing" the "patent monopoly" cannot be approved. While the language does not rise to the level of a presumption of invalidity, it does incorrectly suggest that the jury must affirmatively find the patent valid, which is never appropriate. See Envirotech Corp. v. Al George, Inc., 730 F.2d 753, 762, 221 USPQ 473, 480 (Fed.Cir.1984) ("court never 'declares' a patent valid").

Further, this court has disapproved of a challenger's characterization of a patentee by the term "monopolist", which is commonly regarded as pejorative. Union Carbide Corp. v. American Can Co., 724 F.2d 1567, 1574, 220 USPQ 584, 590 n. 4 (Fed.Cir.1984); Schenck v. Nortron Corp., 713 F.2d 782, 784, 218 USPQ 698, 699 (Fed.Cir.1983). In both of the cited cases, a bench trial was involved. Here, not only was Litton's counsel not admonished for so characterizing Jamesbury before the jury, a more serious impropriety than in a bench trial, but also the characterization found its way into the instructions. As stated in Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548, 220 USPQ 193, 198 (Fed.Cir.1983), the characterization of a patent as a "monopoly" is misdirected:

The phrase "patent monopoly" appears at various points. Under the statute, 35 U.S.C. Sec. 261, a patent is a form of property right, and the right to exclude recognized in a patent is but the essence of the concept of property. Schenck v. Nortron Corp., 713 F.2d 782, 218 USPQ 693 (Fed.Cir.1983).

Instructions which supplement the statutory body of law governing patent validity by interjecting language to the effect that the public must be "protected" against a "monopoly," a term found nowhere in the statute, are likely to be prejudicial and should be avoided.

B.

This court has repeatedly held that the facts leading to a conclusion of invalidity must be established by clear and convincing evidence. See, e.g., American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360, 220 USPQ 763, 771 (Fed.Cir.1984) and its progeny. This standard is unvarying. Therefore, Jamesbury correctly asserts that error was committed by the district court in giving the following instruction to the jury:

If you find that to be so by a preponderance of the evidence, that the Saunders British patent or other prior art disclosed substantially the same things as set forth in Freeman's claims 7 and 8 and in the same scope as here asserted for infringement purposes, then such claims 7 and 8 are void for lack of novelty. [Emphasis added.]

Litton responds that elsewhere in the instructions, the jury was instructed on the "clear and convincing" standard of proof.

The record shows that the jury was charged at the close of one day's proceedings. Prior to beginning its deliberations the next day, after discussions with counsel, the court reinstructed the jury that the defendant had the burden of proving by clear and convincing evidence that the Patent and Trademark Office (PTO) was wrong in issuing the patent. The court then went on to instruct that where certain prior art was not considered by the PTO, or if the PTO was misled with respect to what a reference meant, then the burden was merely a preponderance of the evidence. Further, the court advised that, if the patentee were guilty of fraud (despite the absence of a fraud defense in this case), the plaintiff would have to prove that its patent was valid. 4 Finally, the court summed up as follows:

There's a presumption it [patent] was valid. Can be overcome by clear and convincing proof if certain prior art was not considered. It can be overcome merely by a preponderance of the evidence if the patent examiner was misled as to the meaning of that prior art.

If we assume the transcription is correct, this additional instruction is at best confusing and continues to erroneously vary the quantum of proof depending on the circumstances in contravention of the precedent of this court. Contrary to Litton's argument, an instruction that is defective because of a misstatement of law is not cured simply by a correct statement appearing elsewhere. More is required of jury instructions than to state the law correctly somewhere in the instructions. The question, once a misstatement has been made, is whether the error was so egregious, considering the instructions as a whole, as to require the verdict to be set aside. In this case we hold that it was.

C.

Jamesbury's objections (also made to the district court) that the instructions and interrogatory No. 1, reproduced at note 2, supra, misstate the law respecting novelty were legitimate. The instruction (quoted in B above) to the effect that the claims...

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