Krippelz v. Ford Motor Co., No. 98 C 2361.

• Decision Date: 18 November 2009
• Docket Number: No. 98 C 2361.
• Citation: 670 F.Supp.2d 806
• Parties: Jacob KRIPPELZ, Sr., Plaintiff, v. FORD MOTOR COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Illinois

670 F.Supp.2d 806

Jacob KRIPPELZ, Sr., Plaintiff, v. FORD MOTOR COMPANY, Defendant.

No. 98 C 2361.

United States District Court, N.D. Illinois, Eastern Division.

November 18, 2009.

COPYRIGHT MATERIAL OMITTED

James D. Ryndak, Catherine Lee Gemrich, Eric H. Weimers, Mark K. Suri, Ryndak & Suri, LLP, Adam K. Mortara, Hamilton H. Hill, Mark Edward Ferguson, Martha M. Pacold, Bartlit, Beck, Herman, Palenchar & Scott, LLP, David L. Schwartz, Wallenstein Wagner & Rockey, Ltd., Chicago, IL, for Plaintiff.

Alfred M. Swanson, Jr., Greene & Letts, Edward L. Foote, Peter Charles McCabe, III, Winston & Strawn, LLP, Chicago, IL, Daniel M. Stock, Frank A. Angileri, John S. Le Roy, Seth E. Rodack, Thomas A. Lewry, Brooks and Kushman, PC, Southfield, MI, for Defendant.

AMENDED MEMORANDUM OPINION AND ORDER

JAMES B. ZAGEL, District Judge.

I. INTRODUCTION

The issue of willful infringement is, by agreement, to be tried before me in one or two phases. First, I must find whether there is willful infringement. Second, if and only if, I find willful infringement, I must go on to consider what damages should be awarded to Plaintiff. My decision as to liability for willful infringement follows.

II. FINDINGS OF FACT AND OBSERVATIONS UPON THE FACTS¹

What I must decide here is whether Ford Motor Company's infringement of the patent of Jacob Krippelz, Sr. was willful. The current law of willful infringement is found in the en banc case of In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) (overruling precedent that established a principle of willful conduct which was closely akin to a negligence rule, since it imposed upon an infringer a duty of due care to avoid infringement, and defining a new standard):

[T]o establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. The state of mind of the accused infringer is not relevant to this objective inquiry. If this threshold objective standard is satisfied, the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.

497 F.3d at 1371 (citation omitted). The Federal Circuit left it to future cases to develop the ways in which the standard should be applied. Some opinions refer to the question to be determined after the objective risk threshold is crossed as the subjective aspect of the test. I tend to think of it as the state of mind issue since, in law, state of mind includes both actual states of mind (knowing) and inferred states of mind (should have known means known). Under the Seagate standard, both "knowing" and "should have known" are legally culpable states of mind.

Claims of willful infringement are governed by time and circumstance at each stage of the defendant's infringement. The first stage customarily begins when the inventor sends the alleged infringer some form of notice of his, her or its invention, either as part of a cease-and-desist demand or an offer to sell one or all of the owner's patent rights. The second stage usually begins at a point soon after the lawsuit is filed. Other stages may commence after a decision on re-examination, particular rulings by the court or the return of a verdict of infringement. In this case, I use the stages suggested by Plaintiff; they seem reasonable as dividing lines in this case.

A. Period 1

Period 1 includes the time before the suit was filed in April 1998 and ends in late March 1999 when parties secured an agreed order concerning discovery, and a reexamination of the patent was sought. The significant facts I find with respect to this period (and all following periods) are these:

1. Krippelz sent a copy of his '903 patent to Ford soon after it issued in 1991.²

2. Ford truthfully told Krippelz, at one time, that it was not interested in the invention.³

3. Ford's puddle lamp supplier, Donnelly, had possession of the '903 patent in mid-1993 before it sold a puddle lamp mirror housing to Ford years later.

4. The Donnelly '659 patent, which Ford had and examined, refers to the Krippelz patent.

5. Ford did not (a) investigate the '903 patent to determine possible infringement or invalidity during this period or (b) possess the '903 prosecution history prior to this litigation.

6. During this period Ford possessed no potentially invalidating prior art that it ever asserted here.

7. Ford's specification (and one supplier's drawings) depicted light illuminating an area on the ground next to the vehicle, rather than illuminating the vehicle's door.

8. Donnelly designed and made Ford's first lamp.

B. Period 2

Period 2 begins in March 1999 when Ford disclosed an invalidity defense based on the Kim patent and five other references, and ends when the '903 patent was confirmed by the Board of Patent Appeals in February 2002.

The facts I find with respect to this period (and, where relevant, all following periods) are these:

1. Ford offered, in this litigation, challenges to validity which were rejected by the Board of Patent Appeals and were not offered at trial.

2. Ford asserted that its primary defense was non-infringement.

3. Ford sought summary judgment on non-infringement but offered no claim construction to support its argument, and any well-founded argument would require construction of terms which were not addressed within Ford's motion.

4. Ford unreasonably relied upon its first non-infringement argument—that the '903 patent claim 2 cannot cover any lighting device that shines any type of light on the side of the vehicle—since the patent did not assert that no light from the device would strike the side of the vehicle.

5. Ford unreasonably relied upon its second non-infringement argument—that Krippelz had disclaimed coverage of warning lights that facilitated ingress and egress to the vehicle as to the claim at issue in this case offered a second non-infringement argument that was transparently wrong—since the disclaimer was made with respect to claims not at issue in this lawsuit.

6. Ford added new puddle lamp designs to other Ford vehicles without conducting a technical analysis of those devices to determine whether they might infringe the '903 patent in suit.

7. Krippelz could reasonably conclude that no purpose would be served by seeking a preliminary injunction.

C. Period 3

Period 3 begins with the Board of Patent Appeals decision in February 2002 and ends with Ford's disclosure of new prior art in April 2007. During this period (and, where relevant, for the final period as well) I find:

1. Ford did not disclose any new prior art on which it relied until 2007.

2. Ford did not pursue any of the prior art that occupied the Board of Patent Appeals.

3. Ford offered no viable prior art defense for five years.

4. Ford did defend on non-infringement grounds.

5. Ford offered non-infringement defenses that required a significantly different claim construction than that employed by the Board.

6. Ford offered non-infringement defenses that were objectively unreasonable.

7. (a) Delay in resolving the question of which Ford lamps were infringing was a consequence of flawed testing procedures used by Ford, and (b) during that delay new infringing devices were used on several Ford models.

D. Analysis of Periods 1-3

When viewed in its totality, Ford's conduct throughout periods 1-3 clearly and convincingly demonstrates that (1) Ford "acted despite an objectively high likelihood that its actions constituted infringement" of Krippelz' valid patent, and (2) this objectively-defined risk was so obvious that it should have been known to Ford. Seagate, 497 F.3d at 1371.

Beginning in period 1, Ford had actual knowledge of the Krippelz patent.⁴ Ford had also examined the Donnelly '659 patent, which references the Krippelz patent.⁵ Despite the fact that Ford licensed the Donnelly patent, it did not investigate the Krippelz patent or look into its prosecution history. Ford began its infringing sales in 1997 and for nearly two years after, Ford failed to produce any allegedly invalidating prior art.

During period 2, Ford sought summary judgment on non-infringement, but failed to offer claim construction to support its argument. See Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1358 (Fed.Cir. 2008) ("The first step in most infringement suits is the procedure called `claim construction,' where the scope of the claim is defined by the court."). Instead, Ford offered two insufficiently supported non-infringement arguments: (1) that claim 2 of the '903 patent cannot cover any lighting device that shines any type of light on the side of the vehicle, even though the patent did not assert that no light from the device would strike the side of the vehicle (essentially ignoring the "conical beam of light" limitation in claim 2), and (2) that Krippelz had disclaimed coverage of warning lights that facilitated ingress and egress to the vehicle, even though the disclaimer was made with respect to claims not at issue in the lawsuit. Furthermore, in 2001, Ford added new puddle lamp designs to other Ford vehicles without conducting an infringement analysis.

During period 3, Ford continued to argue non-infringement. However this time, rather than ignore claim 2's conical beam of light limitation, Ford sought a construction of this claim term that would include all of the light that leaves the disputed device. This proffered claim construction was objectively unreasonable at least in part because it required a claim-reading approach significantly different from that employed by the Board of Patent Appeals, which found that a bulb in a hood does not a beam make. Throughout this phase, Ford continued to pursue its non-infringement claim even after its proffered claim construction was rejected by both the Board of Patent Appeals and this...