New Tek Mfg., Inc. v. Beehner

• Court: Nebraska Supreme Court
• Writing for the Court: Stephan
• Citation: New Tek Mfg., Inc. v. Beehner, 751 N.W.2d 135, 275 Neb. 951 (Neb. 2008)
• Decision Date: 27 June 2008
• Docket Number: No. S-06-783.,S-06-783.
• Parties: NEW TEK MANUFACTURING, INC., a Nebraska corporation, appellant, v. John A. BEEHNER et al., appellees.

751 N.W.2d 135

275 Neb. 951

NEW TEK MANUFACTURING, INC., a Nebraska corporation, appellant, v. John A. BEEHNER et al., appellees.

No. S-06-783.

Supreme Court of Nebraska.

June 27, 2008.

Roger P. Cox and Gregory D. Barton, Lincoln, of Harding & Shultz, P.C., L.L.O., and Roger D. Greer and Steven P. Fallon, Chicago, IL, of Greer, Burns & Crain, Ltd., for appellant.

William H. Selde, of Sodoro, Daly & Sodoro, P.C., Omaha, for appellees.

HEAVICAN, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

STEPHAN, J.

This case is before us for the second time. It is a professional negligence action in which the plaintiff's damage claim is dependent upon the resolution of a hypothetical third-party patent infringement claim. New Tek Manufacturing, Inc. (New Tek), alleged that its former attorney, the late John H. Beehner, negligently allowed its patent on a device to lapse and that it was damaged when a third party, Orthman Manufacturing, Inc., manufactured and sold a device which would have infringed upon the patent under the doctrine of equivalents had the patent remained in effect. In New Tek Mfg. v. Beehner (New Tek I),¹ we reversed a summary judgment entered in favor of Beehner's estate (the Estate) and remanded the cause to the district court for Douglas County for further proceedings, based upon our determination that the estate had not presented a prima facie case of noninfringement under the doctrine of equivalents. Following remand, the district court again entered summary judgment in favor of the estate, determining as a matter of law that the all-elements rule and prosecution history estoppel precluded the application of the doctrine of equivalents. We conclude that the district court did not err in determining that prosecution history estoppel would have barred the hypothetical patent infringement case and, therefore, affirm.

I. BACKGROUND

1. FACTS AND PROCEDURAL HISTORY

We set forth the following summary of pertinent facts and procedural history in New Tek I:

The patented device at issue in this case is a "row following guidance device for a tractor-drawn row crop implement," designed to help operators of farm equipment guide implements through a crop field without accidentally deviating from the crop row and destroying planted crops. As the patent explains, tractor-drawn farm implements may carry groundworking tools spaced as close as 4 inches apart, and a tractor operator is generally situated in a cab located several feet above and forward of the implement, so it can be difficult to view the actual engagement of the tools with the ground. In an operation such as cultivating, only a slight misalignment of the tractor with the crop row may cause the implement to uproot several rows.

The patented device was intended, generally, to be a "row following guidance device" that connects the left and right sides of the forward end of an implement to the tractor, and adjusts the length of each left and right connection so that the implement will follow a crop row independently, even if the tractor deviates from the crop row. A wheel, following the crop row, signals a steering valve upon any deviation from the alignment of the implement with the crop row, and the steering valve corrects the deviation by lengthening one of the connections between the implement and the tractor and shortening the other connection.

Eugene Schmidt invented this "row following guidance device" and assigned his rights to Sunco Systems, Inc. (Sunco). A patent application was filed with the U.S. Patent and Trademark Office (the Patent Office) on April 24, 1985, and patent No. 4,640,365 (the '365 patent) was issued on February 3, 1987. After Schmidt saw a potentially infringing device at a farm equipment show, Sunco decided to broaden the patent by filing a reissue patent application on December 14, 1987.

In 1988, while the reissue patent application was pending, Sunco's counsel retired from the practice of law and recommended that Sunco retain Beehner. In 1989, New Tek was formed to assemble farm equipment based on Sunco parts, and the rights for the '365 patent and the reissue patent application were assigned to New Tek.

For purposes of this appeal, New Tek's allegations of Beehner's duties, and breach thereof, are not at issue. New Tek alleged that Beehner was responsible for pursuing the reissue patent application and maintaining the '365 patent, in part by ensuring that the maintenance fees for the '365 patent were filed. However, Beehner did not diligently prosecute the reissue patent application, nor did he pay the maintenance fees for the '365 patent, which became due in August 1990. Beehner revived the reissue patent application pursuant to a petition filed on December 18, 1990, but did not take action with respect to the '365 maintenance fee before the end of the maintenance fee grace period, which expired on February 3, 1991. Although this resulted in the expiration of the '365 patent and rendered the reissue patent application defective, Beehner continued prosecution of the reissue patent application. Eventually, New Tek lost patience with Beehner's prosecution of the reissue patent application and retained new counsel.

The reissue patent application was eventually allowed, and reissue patent No. 34,080 (the '080 patent) was issued on September 29, 1992. However, the '080 patent was defective because of the expiration of the '365 patent, of which New Tek was still unaware. On November 16, 1994, New Tek's counsel submitted the maintenance fee for the '080 patent to the Patent Office but, on December 19, was informed that the maintenance fee would not be accepted because the '080 patent had expired due to the failure to timely pay the maintenance fee for the '365 patent.

Ultimately, the Patent Office accepted New Tek's petition for late payment of the '365 maintenance fee, and the '365 patent was revived. However, New Tek lost the benefit of the expanded scope of the '080 patent — specifically, claim 22 of the '080 patent, which was not contained in the '365 patent, and will be explained in more detail below. Furthermore, the revival of the '365 patent did not afford New Tek protection from infringing uses that began between the expiration of the patent and the acceptance of the late maintenance fee.² ...

New Tek filed suit against Beehner and his law office in the district court on December 12, 1995, alleging professional negligence. Beehner died during the pendency of the suit, and [the El state was substituted.... After proceedings unrelated to the issues presented in this appeal, the district court held a "Markman hearing" pursuant to Markman v. Westview Instruments, Inc.³ ... and entered an order construing the '080 patent for purposes of this litigation.

The [Estate] then filed a motion for summary judgment, which the court sustained. The parties had narrowed their inquiry to a particular device made by Orthman Manufacturing, Inc. (the Orthman device). The court determined as a matter of law that the Orthman device would not have been found to infringe on the '080 patent.... New Tek's claim was dismissed to the extent that it relied on allegations of hypothetical third-party infringement on the '080 patent, and New Tek voluntarily dismissed its remaining claims so that it could proceed with this appeal on the issue of infringement.⁴

2. NEW TEK I

In New Tek I, we first rejected the Estate's contention that we lacked subject matter jurisdiction. We concluded that the case did not arise under federal patent law within the meaning of 28 U.S.C. § 1338(a) (2000), but, rather, was a professional negligence action arising entirely under state law. We noted that "the precise question is not whether Orthman Manufacturing infringed on the '080 patent," but, rather, "whether, absent Beehner's negligence, New Tek would have been successful in an infringement action against Orthman."⁵

Next, we rejected New Tek's contention that the district court erred in holding a "Markman hearing," pursuant to Markman v. Westview Instruments, Inc.,⁶ for the purpose of construing the patent. We concluded that it was "well established that claim construction is a question of law for a court to decide."⁷ We also determined that the district court did not err in construing element 4, claim 22, of patent No. 34,080 (the '080 patent) as a means-plus-function element. And, we rejected New Tek's argument that the patent had intrinsic value recoverable even in the absence of damages resulting from the loss of a potential infringement action.

We then addressed the dispositive issue of whether the district court erred in concluding as a matter of law that New Tek could not establish infringement under the doctrine of equivalents, which doctrine prevents a copyist from evading patent claims with insubstantial changes.⁸ We stated that "[t]he doctrine of equivalents does not require a one-to-one correspondence of components"⁹ and that "[t]he vantage point of one of ordinary skill in the relevant art provides the perspective for assessing the substantiality of the differences between the claimed invention and the accused device."¹⁰ We noted that the district court had

determined that a substantial difference existed and that the Orthman device did not infringe on claim 22. The court noted that claim 22 specifically described a "pivotal connection" between each hydraulic cylinder in element 4 and the elongated member and respective lever. The Orthman device, on the other hand, employs a single hydraulic cylinder, directly mounted on the elongated member without employing a pivotal connection. The court did not address whether the single hydraulic cylinder of the Orthman device was equivalent to the two hydraulic cylinders recited in claim 22 of the '080 patent; rather, the court concluded that the difference between a pivotal connection and direct mount to the end of the hydraulic cylinder on the elongated member was...