Modine Mfg. Co. v. Allen Group, Inc., s. 90-1204

• Decision Date: 22 October 1990
• Docket Number: 90-1210,Nos. 90-1204,s. 90-1204
• Citation: 16 USPQ2d 1622,917 F.2d 538
• Parties: MODINE MANUFACTURING COMPANY, Plaintiff/Cross-Appellant, v. The ALLEN GROUP, INC., d/b/a The G & O Manufacturing Company, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 538

917 F.2d 538

16 U.S.P.Q.2d 1622

MODINE MANUFACTURING COMPANY, Plaintiff/Cross-Appellant, v. The ALLEN GROUP, INC., d/b/a The G & O Manufacturing Company, Defendant-Appellant.

Nos. 90-1204, 90-1210.

United States Court of Appeals Federal Circuit.

Oct. 22, 1990.

Rehearing Denied Dec. 17, 1990.

Richard J. Hoskins, Schiff Hardin & Waite, Chicago, Ill., argued, for plaintiff/cross-appellant. With him on the brief were Susan R. Lichenstein, Susan S. Gouinlock and John A. Hedges. Also on the brief were George M. Schwab, Townsend & Townsend, San Francisco, Cal., and John C. Wood, Jeffrey L. Clark and Lee F. Grossman, Wood, Phillips, Mason, Recktenwald & Van Santen, Chicago, Ill.

Chesney Douglas Floyd, Pillsbury, Madison & Sutro, San Francisco, Cal., argued, for defendant-appellant. With him on the brief were Allan N. Littman, John M. Grenfell and John O. Horsley. Also on the brief were Paul H. Hellar, Michael J. Lennon and Thomas F. Hickey, Kenyon & Kenyon, New York City.

Before MARKEY and MICHEL Circuit Judges, and MILLER, Senior Circuit Judge.

MICHEL, Circuit Judge.

This case involves consolidated appeals concerning a January 19, 1990 final judgment of the United States District Court for the Northern District of California, No. C-85-6946, entered in response to jury verdicts that The Allen Group, Inc. had willfully infringed Modine Manufacturing Company's U.S. Patent No. 4,529,034 (for a heat exchanger used in vehicle radiators), and that the patent was not invalid or unenforceable. Modine Manufacturing Co. v. Allen Group, Inc., 14 USPQ2d 1210, 1989 WL 205782 (N.D.Cal.1989) (denial of post-trial motions of both parties). Allen appeals the district court's refusal to overturn the jury's verdicts. Modine cross-appeals the denial of its motions for enhanced damages and attorney fees. We affirm the rulings contested in both appeals.

BACKGROUND

Modine commenced this action in September, 1985 alleging that Allen's sales of the "Ultra-Fused" radiator infringed Modine's U.S. Patent No. 4,529,034, which claimed a vehicle radiator having certain construction of welded tube-to-header joints. Allen counterclaimed for a declaration of patent invalidity and unenforceability, unfair competition, and violation of the Sherman Act. In the spring of 1989 the case was tried to a jury, which returned special verdicts finding that Allen had failed to prove by clear and convincing evidence that the patent was invalid, or that it was unenforceable for inequitable conduct. The jury also found that Modine had proven by clear and convincing evidence that Allen's infringement had been willful, and in a separate damages phase, returned a verdict of $55,634,153 in favor of Modine.

Allen moved for judgment notwithstanding the verdict and for a new trial, and Modine moved for increased damages, for attorney fees and for prejudgment interest. The district court denied Allen's motion for JNOV, but held the damage award excessive and ordered a new trial on damages unless Modine accepted a remittitur to $14,000,000. Modine, 14 USPQ2d at 1221. The court awarded prejudgment interest to Modine, but denied its motions for enhanced damages and for attorney fees. Id. at 1217, 1222. Modine accepted the remittitur, and the court entered final judgment on January 19, 1990.

The district court had jurisdiction to hear the complaint under 28 U.S.C. Sec. 1338 (1988), and we have jurisdiction to hear both appeals pursuant to 28 U.S.C. Sec. 1295(a)(1) (1988).

DISCUSSION

I

Allen argues that the jury erred in finding Modine's patent not to be invalid under 35 U.S.C. Sec. 103 because at the time Our review of a denial of JNOV is limited to whether the jury's factual determinations were supported by substantial evidence and, if they were, whether "those findings cannot support the legal conclusions which necessarily were drawn by the jury in forming its verdict." Verdegaal Bros., Inc. v. Union Oil Co., 814 F.2d 628, 631, 2 USPQ2d 1051, 1052 (Fed.Cir.), cert. denied, 484 U.S. 827, 108 S.Ct. 95, 98 L.Ed.2d 56 (1987). See Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 893, 221 USPQ 669, 673 (Fed.Cir.), cert. denied, 469 U.S. 857, 105 S.Ct. 187, 83 L.Ed.2d 120 (1984). Here, while considerable prior art existed at the time Modine's invention was made, reasonable jurors could conclude that the differences between the prior art and the claimed invention were significant enough to render the invention nonobvious to one of ordinary skill in the art. Moreover, considerable objective evidence of nonobviousness, in the form of long-felt but unmet need and resulting commercial success, was presented in this case. We can therefore only conclude that the jury's implied findings relating to obviousness were supported by substantial evidence. See Newell Companies, Inc. v. Kenney Mfg. Co., 864 F.2d 757, 765, 9 USPQ2d 1417, 1423 (Fed.Cir.1988) (In ruling on a motion for JNOV, "[j]udges must accept the factual findings, presumed from a favorable jury verdict, which are supported under the substantial evidence/reasonable juror standard.").

the invention was made, the subject matter as a whole would have been obvious to a person of ordinary skill in the art. Although obviousness is a question of law, Panduit Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1568, 1 USPQ2d 1593, 1597 (Fed.Cir.), cert. denied, 481 U.S. 1052, 107 S.Ct. 2187, 95 L.Ed.2d 843 (1987), it is based upon underlying factual inquiries which are issues for the trier of fact. See Loctite Corp. v. Ultraseal Ltd., 781 F.2d 861, 872, 228 USPQ 90, 97 (Fed.Cir.1985). These factual issues are: (1) the scope and content of the prior art, (2) the differences between the most pertinent prior art and the claimed invention, (3) the level of ordinary skill in the art, and (4) the objective evidence of secondary considerations of nonobviousness. Id. at 872, 228 USPQ at 97.

Nor, given those findings, was its conclusion on obviousness incorrect, even on de novo review. Id. at 764, 9 USPQ2d at 1423. Accordingly, we hold that Allen has failed to demonstrate error as a matter of law in the district court's ruling that a reasonable jury could conclude that the patent was not proven invalid by clear and convincing evidence.

Allen also contends that the trial court erred in determining that Modine's patent was not unenforceable for inequitable conduct in the prosecution of the patent application. The ultimate question of whether inequitable conduct occurred is equitable in nature, committed to the discretion of the trial court, and will not be overturned by this court unless it is clear that the determination is based upon a jury's findings of fact that are unsupported by substantial evidence or "a misapplication or misinterpretation of applicable law or that the ruling evidences a clear error of judgment on the part of the district court." Kingsdown Medical Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876, 9 USPQ2d 1384, 1392 (Fed.Cir.1988) (in banc), cert. denied, --- U.S. ----, 109 S.Ct. 2068, 104 L.Ed.2d 633 (1989) (quoting PPG Indus. v. Celanese Polymer Specialties Co., 840 F.2d 1565, 1572, 6 USPQ2d 1010, 1016 (Fed.Cir.1988) (Bissell, J., additional views) (discussing Seattle Box Co. v. Industrial Crating & Packing Inc., 756 F.2d 1574, 1581, 225 USPQ 357, 363 (Fed.Cir.1985))). Establishing inequitable conduct for submitting false information, or for failing to disclose information to the Patent and Trademark Office (PTO) during the prosecution of the patent application requires proof by clear and convincing evidence of two facts: that the information was material and that the patentee acted with intent to deceive. Kingsdown, 863 F.2d at 872, 9 USPQ2d at 1389.

In this case Modine was accused of failing to disclose to the PTO information as to its own prior art research in radiator design and of concealing the fact that the Allen further argues that the jury instructions constituted reversible error, first, because they submitted the issue of inequitable conduct to the jury, and second, because they contained an incorrect legal test for determining whether inequitable conduct had occurred (gross negligence is not enough for intent to deceive). Allen, however, failed to object at trial to these instructions, ¹ and "[n]o party may assign as error the giving or the failure to give an instruction unless that party objects thereto before the jury retires to consider its verdict." Fed.R.Civ.P. 51 (emphasis added). Allen contends that an objection to the instructions was unnecessary since it had made clear in prior communications to the court its position that inequitable conduct was not a jury issue. It cites Brown v. Avemco Inv. Corp., 603 F.2d 1367 (9th Cir.1979) and Martinelli v. City of Beaumont, 820 F.2d 1491 (9th Cir.1987), for the proposition that a formal objection is not necessary when the trial court has been made aware of a party's position. Brown and Martinelli, however, are inapposite.

named inventor, Mr. Saperstein, actually had the help of unnamed co-inventors. At trial, Modine presented evidence tending to show that any failure to disclose was inadvertent, and that in any case the inventor would have had no motive to intentionally lie about inventorship because the company would own any patent that might (and did) issue. Moreover, the persons accused of inequitable conduct actually testified as witnesses, and the jury's assessment of their character and credibility is entitled to great deference. Allen has failed to demonstrate that the determination that it failed to prove inequitable conduct was an abuse of discretion.

In Brown and Martinelli, both parties had submitted contradictory proposed jury instructions and the trial judge had explicitly rejected one over the other. The Ninth Circuit held that in such a situation an objection to an instruction was not necessary under Rule 51 because the trial court had been made aware of the losing party's verbatim position as set forth in...