Loral Fairchild v. Matsushita Electrical

• Decision Date: 21 September 2001
• Docket Number: No. 00-1487,00-1487
• Citation: 60 USPQ2d 1361,266 F.3d 1358
• Parties: (Fed. Cir. 2001) LORAL FAIRCHILD CORPORATION, Plaintiff-Appellant, v. MATSUSHITA ELECTRICAL INDUSTRIAL COMPANY, LTD., MATSUSHITA ELECTRIC CORPORATION OF AMERICA, CANON U.S.A., INC., CANON, INC., FAIRCHILD SEMICONDUCTOR CORPORATION, FUJI PHOTO FILM CO., LTD., FUJI PHOTO FILM U.S.A., INC., GOLD STAR ELECTRONIC INTERNATIONAL, GOLDSTAR CO., LTD., HITACHI HOME ELECTRONICS (AMERICA), INC., HITACHI, LTD., KOKOS COLOR TV, INC., MITSUBISHI ELECTRIC CORP., MITSUBISHI ELECTRIC SALES AMERICA, INC., NATIONAL SEMICONDUCTOR CORPORATION, NIPPON ELECTRIC COMPANY, LTD., and SAMSUNG ELECTRONICS AMERICA, INC., Defendants, and TOSHIBA CORPORATION, TOSHIBA AMERICA, INC., TOSHIBA AMERICA CONSUMER PRODUCTS, INC., TOSHIBA AMERICA ELECTRONIC COMPONENTS, INC., and TOSHIBA AMERICA INFORMATION SYSTEMS, INC., Defendants-Appellees, and NEC CORPORATION, NEC AMERICA, INC., and NEC TECHNOLOGIES, INC., Defendants-Appellees
• Court: U.S. Court of Appeals — Federal Circuit

Page 1358

266 F.3d 1358 (Fed. Cir. 2001)

LORAL FAIRCHILD CORPORATION, Plaintiff-Appellant, v. MATSUSHITA ELECTRICAL INDUSTRIAL COMPANY, LTD., MATSUSHITA ELECTRIC CORPORATION OF AMERICA, CANON U.S.A., INC., CANON, INC., FAIRCHILD SEMICONDUCTOR CORPORATION, FUJI PHOTO FILM CO., LTD., FUJI PHOTO FILM U.S.A., INC., GOLD STAR ELECTRONIC INTERNATIONAL, GOLDSTAR CO., LTD., HITACHI HOME ELECTRONICS (AMERICA), INC., HITACHI, LTD., KOKOS COLOR TV, INC., MITSUBISHI ELECTRIC CORP., MITSUBISHI ELECTRIC SALES AMERICA, INC., NATIONAL SEMICONDUCTOR CORPORATION, NIPPON ELECTRIC COMPANY, LTD., and SAMSUNG ELECTRONICS AMERICA, INC., Defendants, and TOSHIBA CORPORATION, TOSHIBA AMERICA, INC., TOSHIBA AMERICA CONSUMER PRODUCTS, INC., TOSHIBA AMERICA ELECTRONIC COMPONENTS, INC., and TOSHIBA AMERICA INFORMATION SYSTEMS, INC., Defendants-Appellees,

and

NEC CORPORATION, NEC AMERICA, INC., and NEC TECHNOLOGIES, INC., Defendants-Appellees.

No. 00-1487

United States Court of Appeals for the Federal Circuit

September 21, 2001

Rehearing Denied Oct. 17, 2001

Appealed from: United States District Court for the Eastern District of New York. Circuit Judge Randall R. Rader (Sitting by designation)

James H. Wallace, Jr., Wiley, Rein & Fielding, of Washington, DC, argued for plaintiff-appellant. With him on the brief were John B. Wyss and Gregory R. Lyons.

Arthur I. Neustadt, Oblon, Spivak, McClelland Maier & Neustadt, P.C., of Arlington, Virginia, argued for defendants-appellees, Toshiba Corporation, et al. With him on the brief were Richard D. Kelly and Carl E. Schlier.

John M. Calimafde, Hopgood, Calimafde, Judlowe & Mondolino, LLP, of New York, New York, argued for defendants-appellees NEC Corporation, et al.

Before MAYER, Chief Judge, NEWMAN, and MICHEL, Circuit Judges.

MICHEL, Circuit Judge.

This appeal requires our determination of whether the patentee submitted sufficient evidence to preclude summary judgment of invalidity for obviousness over an article published prior to the filing date of the patent application. Oral argument was heard on July 12, 2001. Because we hold that the patentee raised a genuine issue as to whether its reduction to practice preceded the publication of the article, we reverse the grant of summary judgment and remand for further proceedings.

BACKGROUND

In 1991, Loral sued numerous Japanese electronics manufacturers, and their U.S. distributors, for infringement of claim 1 of its United States Patent No. 3,931,674 (the '674 patent), which claims a process for manufacturing a charge-coupled device ("CCD"). A CCD is an important component in electronic cameras that produces an electrical signal representing the image that is focused upon it. This signal can then be processed and displayed on a video monitor. In August 1995, the district court severed and stayed Loral's claims against the non-manufacturing defendants, leaving six manufacturing defendants: Sony, Sanyo, Toshiba, Hitachi, NEC, and OKI. The court ordered separate trials for each.

Sony was the first and only defendant to go to trial. Over the course of five weeks in 1996, Loral and Sony tried the issues of validity and infringement to a jury. On February 14, 1996, the jury returned a verdict finding that Sony did not prove invalidity of the asserted claims, and that Loral had proven infringement under the doctrine of equivalents. Sony then moved for judgment as a matter of law ("JMOL") or, alternatively, for a new trial.

The district court granted Sony's motion for JMOL, holding that no reasonable jury could find that Sony infringed. See Loral Fairchild Corp. v. Victor Co. of Japan, 931 F. Supp. 1014 (E.D.N.Y. 1996) (Loral II). One basis for the court's decision was that Sony's accused process could not infringe under the doctrine of equivalents because it had been disclosed in a journal article authored by Dr. Darrel Erb ("the Erb reference") and published on December 3, 1973, prior to the February 8, 1974 filing date of the application that issued as the '674 patent. Id. at 1030 (citing Wilson Sporting Goods Co. v. David Geoffrey & Assoc., 904 F.2d 677, 683-85, 14 USPQ2d 1942, 1948-49 (Fed. Cir. 1990) (patentee may not assert a range of equivalents for infringement purposes that includes the prior art)). Although the jury had returned a special verdict form indicating that it found that the Erb reference did not qualify as prior art against the '674 patent, the district court concluded that no reasonable jury could have done so. Loral II, 931 F. Supp. at 1031.

On appeal, we affirmed the grant of JMOL, but solely on the ground that Loral's allegations of infringement under the doctrine of equivalents were barred by prosecution history estoppel; our decision did not address whether the Erb reference is prior art with respect to the '674 patent. Loral Fairchild Corp. v. Victor Co. of Japan, 181 F.3d 1313, 1316 n.3, 50 USPQ2d 1865, 1876 n.3 (Fed. Cir. 1999) (Loral III). In response, Loral maintained its actions against only those of the remaining manufacturing defendants that it believed were literally infringing the '674 patent--Toshiba and NEC.

On April 10, 2000, Toshiba and NEC each moved for summary judgment that claim 1 is invalid as obvious in view of the Erb reference, which was asserted to be prior art under § 102(a). The district court held a two-day hearing on the motions. The court then issued a final judgment and an unpublished decision granting the motions, holding that there was no genuine issue as to the status of the Erb reference as prior art, and that claim 1 was obvious in light of it. Loral Fairchild Corp. v. Victor Co. of Japan, Nos. 92-0128 & 91-5056 (E.D.N.Y. June 21, 2000) (Toshiba I). Loral filed a timely notice of appeal, and we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

DISCUSSION

Summary judgment is proper only when no "reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 2510 (1986). In determining whether a genuine issue of material fact exists, the trial court must assume that the evidence presented by the non-movant is credible and draw all justifiable inferences therefrom in the non-movant's favor. Id. at 255, 106 S. Ct. at 2513. Because of the statutory presumption of patent validity, 35 U.S.C. § 282, at trial Toshiba and NEC would bear the burden of proving by clear and convincing evidence that the Erb reference was published prior to Loral's reduction to practice. Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1578, 38 USPQ2d 1288, 1291 (Fed. Cir. 1996) ("Bard must persuade the trier of fact by clear and convincing evidence that the Cook catalog was published prior to Dr. Mahurkar's invention date."). Of course, Loral would bear a burden of production to present evidence of its asserted actual reduction to practice prior to the filing date of its patent application. Id. at 1576-77, 38 USPQ2d at 1290 ("Had Dr. Mahurkar not come forward with evidence of an earlier date of invention, the Cook catalog would have been anticipatory prior art under section 102(a) because Dr. Mahurkar's invention date would have been the filing date of his patent."). Because Loral does not argue for conception plus diligence to establish a date of invention prior to the publication date of the Erb article, but only an actual reduction to practice, we address only Loral's actual reduction to practice of the invention.

The proceedings in the Sony litigation are relevant to this appeal only because Toshiba and NEC relied exclusively upon evidence submitted during the Sony trial in support of their motions for summary judgment. Loral, however, relied upon both evidence submitted during the Sony trial and new evidence to oppose the motions. Critically, the district court applied neither issue preclusion nor collateral estoppel against Loral when ruling on the motions by Toshiba and NEC. Rather, the district court permissibly regarded its earlier findings on the prior art status of the Erb reference merely as a non- preclusive starting point, allowing the parties here both to submit new evidence and rely upon evidence submitted during the Sony trial. Toshiba I, slip op. at 9. The trial court's earlier findings are not law of the case and we do not understand the court to have so treated them when it ruled upon both the old and the new evidence.

In opposition to Toshiba's and NEC's motions for summary judgment, Loral argued both that the Erb reference does not render the asserted claim obvious and that it does not constitute prior art. Loral submitted evidence that the inventor named in the '674 patent, Dr. Gilbert Amelio, conceived of the invention and actually reduced it to practice prior to the publication of the Erb reference. Dr. Amelio's conception of the invention prior to the publication of the Erb reference is not disputed. Thus, the critical question in this appeal is whether the evidence submitted by Loral was sufficient to raise a genuine issue as to whether Dr. Amelio's actual reduction to practice occurred prior to the publication of the Erb reference. If so, then the grant of summary judgment must be reversed.

I. The Evidence Relied Upon By Loral In Opposition to Summary Judgment

A. The Amelio Affidavit

Loral referred the district court to several items of evidence tending to indicate that the invention was actually reduced to practice prior to December 3, 1973. The only item not previously considered by the trial court during the Sony trial was an affidavit executed on April 14, 2000, by Dr. Amelio ("the Amelio affidavit") in which he states that the invention was reduced to practice shortly after September 14, 1973, but no later than mid-October 1973- -when Loral "had initial production-quality devices." Because Dr. Amelio was employed by one of Loral's competitors during the Sony litigation, he was not available to testify at that time. He subsequently ended that employment, and was retained by Loral for the purpose of...