Pandrol Usa, v. Airboss Ry. Products, Inc.
| Decision Date | 21 February 2003 |
| Docket Number | No. 02-1067.,No. 02-1355.,02-1067.,02-1355. |
| Parties | PANDROL USA, LP and Pandrol Limited, Plaintiffs-Appellees, v. AIRBOSS RAILWAY PRODUCTS, INC., Airboss of America Corp., Robert M. Magnuson, and Jose R. Mediavilla, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Federal Circuit |
Allen I. Rubenstein, Gottlieb, Rackman & Reisman, P.C., of New York, NY, argued for plaintiffs-appellees. With him on the brief was Raymond B. Churchill, Jr.
Richard R. Johnson, Shook, Hardy & Bacon, L.L.P., of Kansas City, MO, argued for defendants-appellants. Of counsel was Christopher P. Murphy, Shook, Hardy & Bacon, LLP, of Washington, DC.
Before CLEVENGER, Circuit Judge, PLAGER, Senior Circuit Judge, and DYK, Circuit Judge.
Airboss Railway Products, Inc., Airboss of America Corp., Robert M. Magnuson, and Jose R. Mediavilla (collectively, "the defendants") appeal from the judgment of the United States District Court for the Western District of Missouri. Pandrol USA, LP v. Airboss Ry. Prods., No. 99-0182 (W.D.Mo. Mar. 28, 2002).
The district court entered summary judgment of infringement of U.S. Patent No. 5,110,046 ("the '046 patent") and found that the defendants had waived their affirmative defenses and counterclaims by not raising them during briefing of cross-motions for summary judgment. We hold that the district court did not err in construing the claims; in granting summary judgment of patent infringement against all defendants; or in determining the amount of plaintiffs' lost profits. However, we also hold that the defendants did not waive their defense of patent invalidity; nor did they waive their invalidity counterclaim. We therefore vacate and remand for further proceedings.
This is the second time this case has come before us. In the first appeal, we affirmed the district court's grant of summary judgment of noninfringement of U.S. Patent No. 4,463,898 ("the '898 patent"), but vacated the grant of summary judgment of noninfringement of the '046 patent and remanded the case for further proceedings. Pandrol USA, LP v. Airboss Ry. Prods., Inc., 10 Fed.Appx. 837, 841-42 (Fed.Cir.2001) ("Pandrol I"). On remand, Pandrol USA, LP and Pandrol Ltd. ("the plaintiffs") prevailed, securing a judgment awarding damages and an injunction based on a finding of infringement of claim 3 of the '046 patent. This time around, the parties' dispute solely concerns this judgment concerning the '046 patent. Accordingly, we limit our description of the background to that patent.
The '046 patent relates to a railroad track fastening system and is directed to a rail seat assembly designed to resist erosion of the concrete rail tie by interposing an abrasion-resistant plate and a layer of adhering material between the rail pad and the rail. Figure 1 from the patent specification is reproduced below:
NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE
The patent specification describes the preferred embodiment, in part, as follows:
The improvement of this invention is to provide an abrasion plate 10 between the pad 4 and the tie 1. The plate 10 is smooth edged and incorporates recesses 11 to fit around the clamp supports or shoulder 5.
The plate 10 may be bonded by layer 12 of adhesive (epoxy resin adhesives are preferred) to the tie 1 or an HDPE closed cell foam of 1.5 mm thickness of the same size and shape as plate 10 fitted between plate 10 and tie 1.
'046 patent, col. 2, ll. 33-41.
At issue on this appeal is the district court's interpretation of the term "adhering material" in claim 3 of the patent. That term appears in claims 1 and 3. Claim 1 recites:
An abrasion resistant rail seat for securing a rail to a concrete rail tie of the type in which the rail has a flange and is secured to a concrete rail tie by elastic rail clamps and an elastomeric rail pad insulates the rail from the rail tie, the improvement comprising interposing an abrasion resistant plate between said rail pad and said rail tie, said abrasion resistant plate forming a water tight seal with said rail tie, said abrasion resistant plate being wider than said rail and extending beyond the flange of said rail, and a layer of adhering material between said abrasion resistant rail plate and said rail tie for adhering said plate to said tie, said material being the sole means for adhering said plate to said tie so that the replacement of said abrasion resistant rail plate is facilitated.
Id. at col. 2, ll. 46-60 (emphases added).
Claim 2 recites: "A rail seat as claimed in claim 1, wherein the plate is of metal approximately one millimeter thick." Id. at col. 2, ll. 61-62.
Claim 3 recites: "A rail seat as claimed in claim 2, wherein said adhering material is a closed cell foam pad of one to two millimetres [sic] in thickness and of similar shape to said plate." Id. at col. 2,ll. 63-66 (emphasis added).
The plaintiffs filed their first amended complaint in this action on May 7, 1999, alleging that plaintiff Pandrol Ltd. was the owner of all right, title and interest in the '046 patent, and that plaintiff Pandrol USA, LP was the exclusive licensee under the patent. The plaintiffs alleged that defendant Airboss Railway Products, Inc. directly infringed the patent. The plaintiffs also alleged that defendants Airboss of America Corp. and Robert M. Magnuson ("Magnuson") and Jose R. Mediavilla ("Mediavilla") induced infringement. Airboss of America Corp. was the parent company of Airboss Railway Products, Inc. Magnuson was the President of Airboss Railway Products, Inc., and Mediavilla was the Vice President. The accused device was Airboss's three-piece railroad track fastening system.
On May 17, 1999, the defendants filed answers to the complaint. In addition to denying infringement and inducement of infringement, the defendants raised affirmative defenses, including patent invalidity. The defendants also filed counterclaims for a declaratory judgment that the '046 patent was invalid. In presenting their counterclaims, the defendants alleged:
Pandrol UK [Pandrol Ltd.] claims to be the owner of the '046 and '898 patents and, on information and belief, is in fact the owner thereof and/or has the right to control enforcement of the '046 and '898 patents.... Pandrol U.S. is exclusively licensed or otherwise authorized by Pandrol UK under the '046 and '898 patents to make and sell products in the United States.
(Defs.' Answer & Countercls. at ¶¶ 66-67; Def. Airboss of Am. Corp.'s Answer & Countercls. at ¶¶ 66-67.) In the same answers, however, the defendants claimed that they were "without sufficient knowledge or information to form a belief as to the truth of the [plaintiffs'] averments [of patent ownership] and therefore deny them." (Defs.' Answer & Countercls at ¶¶ 14-15; Def. Airboss of Am. Corp.'s Answer & Countercls. at ¶¶ 14-15.)
On October 18, 1999, the district court issued an order construing the '046 patent. The court construed the recited "adhering material" in claims 1 and 3 of the patent to be "a layer of adhesive, such as a glue or epoxy, that bonds the plate to the tie." Pandrol USA, LP v. Airboss Ry. Prods., Inc., No. 99-0182, slip op. at 5 (W.D.Mo. Oct. 18, 1999). On December 3, 1999, based on this claim construction, the district court granted the defendants' motion for summary judgment of noninfringement of the '046 patent.
On December 9, 1999, pursuant to a stipulation by both parties, the district court ordered "that the defendants' counterclaims are dismissed without prejudice and that defendants will be allowed to assert all said counterclaims in the event this matter is remanded for further consideration." Pandrol USA, LP v. Airboss Ry. Prods., Inc., No. 99-0182, order of Dec. 9, 1999 (W.D.Mo. Dec. 9, 1999).
The plaintiffs appealed to this court. On March 21, 2001, we vacated the district court's determination of noninfringement of the '046 patent and remanded. Pandrol I, at 842-43.
We held that the district court had erroneously interpreted the "adhering material" recitation of claims 1 and 3 to require "a layer of adhesive, such as a glue or epoxy, which bonds the plate to the tie." Id. at 840. We reasoned that Id. at 840. We pointed out that the second preferred embodiment referred to "an HDPE closed cell foam," which does not adhere by bonding, and that "a construction that would cause a preferred embodiment to fall outside of the scope of the patent claims is strongly disfavored." Id. at 842. We also determined that the district court's narrow construction of "adhering material" was inconsistent with the language of claim 3, which indicated that a closed cell foam pad was an adhering material. We therefore vacated the district court's judgment of noninfringement of the '046 patent and remanded the case for further proceedings. Id. at 842.
On remand, on July 23, 2001, the individual and corporate defendants filed a motion for summary judgment of noninfringement. The defendants argued that the "adhering material" limitation required that the adhering material actually bind the rail plate to the rail tie. They urged that because "the Airboss product has nothing that acts to stick or hold the abrasion plate to the rail tie by suction, grasping or fusion or anything else, and there are no nails or spikes used," the accused product did not meet the "adhering material" limitation and the defendants were entitled to summary judgment of noninfringement as a matter of law. (Suggestions of Defs. In Support of Their Mot. for Summ. J. of July 23, 2001, at 4.) The defendants did not raise their affirmative defenses or counterclaims of invalidity in this motion. Nor did the defendants contest the plaintiffs'...
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