Krippelz v. Ford Motor Company

• Decision Date: 18 November 2009
• Docket Number: No. 98 C 2361.,98 C 2361.
• Citation: 675 F.Supp.2d 881
• Parties: Jacob KRIPPELZ, Sr., Plaintiff, v. FORD MOTOR COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Illinois

675 F.Supp.2d 881

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.

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James D. Ryndak, Catherine Lee Gemrich, Eric H. Weimers, Mark K. Suri, Ryndak & Suri LLP, Chicago, IL, 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 Kushman PC, Southfield, MI, for Defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

JAMES B. ZAGEL, District Judge.

INTRODUCTION

This case involves Defendant Ford Motor Company's "puddle lamps." Krippelz is the sole inventor and owner of U.S. Patent No. 5,017,903. (PX1, "the '903 patent.") The puddle lamps installed on many of Ford's most popular vehicles infringe claim 2 of the '903 patent. Krippelz sued Ford on April 16, 1998 for infringement of the '903 patent. (Dkt. No. 1, 4/16/98 Complaint.)

This Court granted Krippelz's motion for summary judgment of infringement of all accused models on November 21, 2008. (11/21/08 Hr'g Tr. 9:24-19:11.) The parties tried the issues of invalidity and damages to a jury. At the end of a five-day trial, the jury found the '903 patent valid and awarded Krippelz $23 million in damages.

Before the jury trial, the parties agreed to try the issue of willful patent infringement separately to the Court rather than to the jury. (Dkt. No. 395, 12/5/08 Stipulation Regarding Trial of Willful Infringement To The Court.) The parties further agreed to present the issue by way of written submissions rather than by live evidence. (Dkt. No. 418, 12/16/08 Parties' Joint Motion To Set A Briefing Schedule Regarding Willful Infringement.) The parties briefed the issue of whether Ford's infringement was willful and the Court heard oral argument on March 10, 2009.

Following are findings of fact and conclusions of law addressing Ford's liability for willful infringement. To the extent that any conclusions of law may be deemed findings of fact, or vise versa, they should be considered as such, and the labels used herein need not be controlling. See 9C Wright & Miller, Federal Practice & Procedure, § 2579 (3d ed. 2008).

These findings of fact and conclusions of law address only whether Ford's infringement was willful, and not what enhancement of damages is appropriate as a consequence of Ford's conduct. The Court will consider the amount of enhancement separately.

LEGAL STANDARD

1. Willful infringement is an issue of fact. Stryker Corp. v. Intermedics Orthopedics, Inc., 96 F.3d 1409, 1413 (Fed. Cir.1996).

2. 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), which overruled 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 defined 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).

3. Under Seagate, "proof of willful[ness] ... requires at least a showing of objective recklessness." Id.

4. The Federal Circuit left it to future cases to develop the ways in which the standard should be applied. Id. 5. Some opinions refer to the question to be determined after the objective risk threshold is crossed as the subjective aspect of the test. The Court thinks 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. Thus, if a reasonable party in Ford's position would have believed that Ford was infringing a valid patent, then Ford's infringement was willful.

6. While it is true that the law no longer imposes on a potential infringer an "affirmative duty to exercise due care to determine whether or not he is infringing," Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1389 (Fed. Cir.1983), overruled by Seagate, 497 F.3d at 1371, Seagate does not require that the Court ignore the record. To the contrary, Seagate dictates that objective recklessness be determined by reference to the record developed in the infringement proceeding. 497 F.3d at 1371 ("objectively-defined risk" is "determined by the record developed in the infringement proceeding").

7. Claims of willful infringement are governed by the circumstances 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-anddesist 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 reexamination, particular rulings by the court, or the return of a verdict of infringement.

8. To the extent that Ford offers evidence, as an infringer may be entitled to do,¹ that its heart was pure on the issue of infringement even if its head was empty, it is beyond the boundaries defined by the way this case was tried.

9. In other words, while Ford says it is defending this motion only on the basis of objective indicia (Dkt. No. 442, 2/6/09 Ford Motor Co.'s Br. Opposing Krippelz's Request For A Finding Of Willful Infringement ("Ford Br.") 7-8), and relies on the argument that certain views, positions, or courses of conduct were "objectively" reasonable, Ford's brief also includes statements directed to Ford's actual state of mind. Such argument is not entitled to any weight, as there is no evidence of what "Ford believed," or otherwise indicating the subjective state of mind of any Ford decision maker.

10. Subjective state-of-mind evidence was discussed earlier in the case, but Ford did not offer the testimony of the actual state-of-mind witness that it named in pre-trial proceedings. Indeed, Ford did not offer the testimony of any witness on this subject.

11. Ford represented to the Court that former Ford attorney Daniel Stock could explain Ford's decision to continue infringing Krippelz's patent:

And secondly, and so there is nobody who has the ties back to '98 other than Dan Stock throughout this—for this lawsuit. There is nobody who has this big picture of knowledge of what happened and why. And, ultimately, it was Dan Stock's decision to either, you know, allow people to go forward with these Puddle Lamps or tell them no, you can't do this, because we have problems. And in that sense, he made the decision. There is nobody that relied on it in any sense other than Dan says, yes, go do it, or Dan says, no, don't do it because we've got problems.

(Ex. AA To Nonrestricted Exhibits Certification,² 12/3/08 Hr'g Tr. 17:22-18:6.)

12. Ford did not offer Mr. Stock's testimony, and thus cannot ask the Court to consider "what Ford saw with its own eyes" or what "Ford believed." (See, e.g., Ford Br. 2 ("Ford continued to believe ...") 20 (what "Ford Saw With Its Own Eyes") 25 ("Ford disclosed to Krippelz several prior art references that Ford believed invalidated claim 2"), 29 n. 20 ("Ford believed that Miazzo and DuBois were enough"), 33 ("Ford did not believe that it was infringing Krippelz's patent").) Ford's arguments referring to what Ford employees and agents believed or did not believe are not evidence and therefore are given no weight.

FINDINGS OF FACT AND CONCLSIONS OF LAW

13. To organize the discussion of the voluminous evidence in a comprehensible format, the Court uses the four stages that Krippelz suggested; they seem reasonable as dividing lines in this case. They are: (1) the period from the issuance of the Krippelz patent in 1991 through Ford's first disclosure of its invalidity defenses in March 1999; (2) the period from March 1999 through the Board of Patent Appeals' confirmation of the '903 patent's claims in February 2002; (3) the period from the Board's February 2002 decision through Ford's disclosure of its trial invalidity defenses in April 2007; and (4) the period from April 2007 through the end of trial.

14. As set forth below in more detail, the Court finds that Krippelz has shown by clear and convincing evidence that Ford willfully infringed the '903 patent throughout periods 1 through 3.

15. When Ford's conduct is viewed in its totality throughout periods 1-3, the evidence clearly and convincingly demonstrates that (1) Ford, "acted despite an objectively high likelihood that its actions constituted infringement" of Krippelz's 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.

16. The Court finds that Krippelz has not shown by clear and convincing evidence that Ford willfully infringed the '903 patent in period 4.

I. Period 1: Prelitigation Through March 1999

17. Period 1 includes the time before the suit was filed in April 1998 (the time beginning with the issuance of the patent in 1991) and ends in late March 1999 when Ford...