Powell v. Home Depot U.S.A., Inc.

• Decision Date: 10 February 2012
• Docket Number: Nos. 2010–1409,2010–1416.,s. 2010–1409
• Citation: 100 U.S.P.Q.2d 1742,663 F.3d 1221
• Parties: Michael S. POWELL, Plaintiff–Cross Appellant, v. The HOME DEPOT U.S.A., INC., Defendant–Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

100 U.S.P.Q.2d 1742

663 F.3d 1221

Michael S. POWELL, Plaintiff–Cross Appellant,

v.The HOME DEPOT U.S.A., INC., Defendant–Appellant.

Nos. 2010–1409

2010–1416.

United States Court of Appeals, Federal Circuit.

Nov. 14, 2011.Rehearing En Banc Denied Feb. 10, 2012.

Donald R. Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, of Washington, DC, argued for plaintiff-cross appellant. With him on the brief were Kara F. Stoll and James F. Sherwood. Of counsel on the brief was Alexander D. Brown, Tripp Scott, P.A., of Fort Lauderdale, FL.

George M. Sirilla, Pillsbury Winthrop Shaw Pittman, LLP, of McLean, VA, argued for defendant-appellant. With him on the brief were Bryan P. Collins, Jack S. Barufka and Sarah R. Greene. Of counsel on the brief were Bart A. Starr and Jonathan N. Zerger, of Shook, Hardy & Bacon, LLP, of Kansas City, MO; and Edward A. Moss and Eileen Tilghman Moss, of Miami, FL.

Before LINN, DYK, and PROST, Circuit Judges.

Opinion for the court filed by Circuit Judge PROST. Opinion concurring-in-part and dissenting-in-part filed by Circuit Judge DYK.

PROST, Circuit Judge.

This is a patent infringement case involving radial arm saw (or “radial saw”) guard safety technology. Mr. Michael S. Powell brought suit against Home Depot, alleging that it infringed his patent, U.S. Patent No. 7,044,039 (“'039 patent”), covering radial arm saw guards that are installed in every Home Depot store location throughout the United States. Following a fourteen-day trial, the jury determined that Home Depot literally and willfully infringed Mr. Powell's patent. After the jury trial, the district court held a bench trial on the issue of unenforceability. It concluded that Mr. Powell had not committed inequitable conduct and declined to hold the patent unenforceable. Based on Home Depot's willful infringement, the district court awarded enhanced damages. Based on the district court's finding of litigation misconduct and vexatious and bad faith litigation, it also awarded attorney fees.

On appeal, Home Depot challenges the district court's denial of its renewed motion for judgment as a matter of law (“JMOL”) on the issues of infringement, willfulness, and damages. It also challenges the district court's claim construction, inequitable conduct, and attorney fees determinations.

Mr. Powell conditionally cross appeals on the issue of enhanced damages seeking additional enhanced damages if, for example, the compensatory damage award were reduced.

The jury's verdict of willful infringement and damages determination are supported by substantial evidence. We affirm the district court, having detected no reversible error in its denial of judgment as a matter of law in favor of Home Depot on the issues of infringement, willfulness, and damages. Further, we affirm the district court's conclusions as to claim construction, inequitable conduct, and attorney fees.

Background

Home Depot is one of the largest, most profitable home improvement retailers in the United States. For many years, Mr. Powell had a business relationship with Home Depot as its point-of-contact for the installation and repair of radial arm saws. Home Depot uses radial arm saws in its stores to cut the raw lumber it sells down to a smaller size, based on a customer's preference.

In 2002 and 2003, Home Depot took note of an alarming trend. Its employees were suffering injuries including lacerations and finger amputations caused while operating in-store radial arm saws to cut lumber for customers. Top corporate officers, including the CEO, learned of the employee injuries and directed Home Depot's safety personnel to either fix the radial saws to prevent injuries or remove them from all stores.

Home Depot studied the repercussions of removing the radial saws from its stores and ceasing to offer its customers the option to have lumber cut into smaller pieces. It concluded that the benefits of keeping the radial saws outweighed the risks and chose to find a solution to employee injuries, rather than remove them from its stores. Employee injury claims had already cost the company nearly $800,000, but its competitors still offered lumber cutting services and it feared the loss of its customers that utilized the service at Home Depot. Further, it risked losing the “considerable sales” in lumber and other departments that sell goods related to lumber purchases. J.A. 19000. Seeking a solution to the problem, it turned to Mr. Powell.

Mr. Powell—recognizing that removal of radial arm saws in Home Depot stores would hurt his business—set out to develop a solution to employee injuries. In July 2004, he presented a saw guard prototype to Home Depot, which then ordered eight production units for use and testing in stores. By August 2004, those production saw guard units were installed in Home Depot stores and Mr. Powell filed an application for a patent on his saw guard invention.

Unbeknownst to Mr. Powell at the time he installed his invention for in-store testing, Home Depot contacted another company, Industriaplex, to build and install saw guards for its radial arm saws. Home Depot invited Industriaplex to view Mr. Powell's invention and asked it to build nearly identical copies at a price less than the $2,000 per saw guard it paid Mr. Powell for the in-store testing units. Industriaplex agreed. Home Depot eventually ordered nearly 2,000 saw guards built by Industriaplex for approximately $1,295 per unit.

Mr. Powell continued to confer with Home Depot through the end of 2004, but could not reach an agreement to supply it with the saw guards at the price it offered to pay—$1,200 per unit, including installation. Mr. Powell's '039 patent issued on May 16, 2006, and he sued Home Depot for infringement in May 2007.

After a fourteen-day jury trial, the jury reached a unanimous verdict that Home Depot willfully and literally infringed the '039 patent. It awarded $15 million in damages. The district court enhanced damages by an additional $3 million and also awarded attorney fees totaling $2.8 million. When all the dust had settled, the final judgment against Home Depot totaled $23,950,889.13, including pre-judgment interest.

Home Depot now appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

Standard of Review

JMOL is appropriate when “a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.” Fed.R.Civ.P. 50(a)(1). This court reviews the denial of a motion for JMOL under the law of the regional circuit. Orion IP, LLC v. Hyundai Motor Am., 605 F.3d 967, 973 (Fed.Cir.2010). Under the law of the Eleventh Circuit, we must “consider all the evidence, and the inferences drawn therefrom, in the light most favorable to the nonmoving party ... [and] in this light, [whether] there was any legally sufficient basis for a reasonable jury to find in favor of the nonmoving party.” Advanced Bodycare Solutions, LLC v. Thione Int'l, Inc., 615 F.3d 1352, 1360 (11th Cir.2010) (internal citations and quotations marks omitted).

The proper construction of a patent's claims is an issue of Federal Circuit law, and we review a district court's claim construction de novo. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454–55 (Fed.Cir.1998) (en banc). To ascertain the scope and meaning of the asserted claims, we look to the words of the claims themselves, the specification, the prosecution history, and any relevant extrinsic evidence. Phillips v. AWH Corp., 415 F.3d 1303, 1315–17 (Fed.Cir.2005) (en banc).

“This court reviews a district court's determination of inequitable conduct under a two-tiered standard: we review the underlying factual determinations of materiality and intent for clear error, and we review the ultimate decision as to inequitable conduct for an abuse of discretion.” Am. Calcar, Inc. v. Am. Honda Motor Co., 651 F.3d 1318, 1334 (Fed.Cir.2011).

Willfulness is a question of fact, and our review on appeal is “limited to asking whether [the jury's] verdict is supported by substantial evidence.” i4i Ltd. P'ship v. Microsoft Corp., 598 F.3d 831, 859 (Fed.Cir.2010).

This court reviews “the jury's determination of the amount of damages, an issue of fact, for substantial evidence.” Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1310 (Fed.Cir.2009). We review an award of enhanced damages for abuse of discretion. See SRI Int'l, Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462, 1469 (Fed.Cir.1997). A district court's finding that a case is “exceptional” within the meaning of 35 U.S.C. § 285 is reviewed for clear error. Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1328 (Fed.Cir.2003). If a case is determined to be exceptional, we review the district court's decision to award attorney fees for abuse of discretion. Id.

Discussion

This appeal raises several issues: claim construction, infringement, willfulness, inequitable conduct, damages, enhanced damages, and attorney fees. We address each issue in turn.

A. Claim Construction

As part of its challenge of the district court's denial of JMOL of noninfringement, Home Depot disagrees with that court's claim construction of two terms, “dust collection structure” and “table top.” These terms appear in independent claims 1 and 4. Claim 1 is reproduced below.

1. In combination with a radial arm saw assembly comprising a table having a top and a rip fence projecting upward therefrom, a vertical column extending upwardly near the rear of the top, a radial arm extending horizontally from the top of the column, a rotary power saw suspended below the radial arm by a carriage adapted for travel along the length of radial arm, the saw including a rotating blade, a protective blade shroud, and a handle, the improvement comprising: a work surface mounted to the table top; at least one push handle in slidable engagement with said work surface for movement toward and away from said rip fence; a cutting box disposed on top of the work surface, said cutting box defining an...