Rodime PLC v. Seagate Technology, Inc.

• Decision Date: 03 June 1999
• Docket Number: 98-1112,98-1204,Nos. 98-1076,s. 98-1076
• Citation: 50 USPQ2d 1429,174 F.3d 1294
• Parties: RODIME PLC, Plaintiff-Appellant, v. SEAGATE TECHNOLOGY, INC., Defendant-Cross Appellant. . Rehearing Denied; Suggestion for Rehearing En Banc Declined
• Court: U.S. Court of Appeals — Federal Circuit

Page 1294

174 F.3d 1294

50 U.S.P.Q.2d 1429

RODIME PLC, Plaintiff-Appellant, v. SEAGATE TECHNOLOGY, INC., Defendant-Cross Appellant.

Nos. 98-1076, 98-1112, 98-1204.

United States Court of Appeals Federal Circuit.

Rehearing Denied; Suggestion for Rehearing En Banc

Declined June 3, 1999.

April 13, 1999.

Margaret K. Pfeiffer, Sullivan & Cromwell, of Washington, DC, argued for plaintiff-appellant. With her on the brief were Thomas R. Leuba of Washington DC and Robert A. Sacks and Steven W. Thomas, of Los Angeles, California. Also of counsel on the brief were John C. Altmiller and Douglas E. Ringel, Kenyon & Kenyon, of Washington, DC.

Karl A. Limbach, Limbach & Limbach L.L.P., of San Francisco, California, argued for defendant-cross appellant. With him on the brief were Gerald T. Sekimura, Stephen M. Everett, and Maria S. Cefalu.

Before LOURIE, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and RADER, Circuit Judge.

RADER, Circuit Judge.

In this patent infringement and tort action, Rodime PLC (Rodime) asserted that Seagate Technology, Inc. (Seagate) infringes U.S. Patent No. 4,638,383 (the '383 patent). Rodime further accused Seagate of tortious interference with prospective economic advantage and unfair competition. The United States District Court for the Central District of California granted Seagate's motions for summary judgment of noninfringement and for no liability under Rodime's state law causes of action. Because the district court misconstrued the asserted claims, this court vacates the judgment of noninfringement. This court also vacates the judgment of no liability under Rodime's state law claims and remands for further proceedings due to disputed issues of fact relating to the wrongfulness of Seagate's conduct. Finally, this court affirms the district court's grant of Seagate's motion to exclude evidence of Rodime's consequential business damages as irrelevant to the calculation of a reasonable royalty.

I. The '383 Patent and Accused Device

The '383 patent, entitled "Micro Hard-Disk Drive System," involves computer hard-disk drives. Generally, the patent is directed to the miniaturization of hard drive technology from 5 1/4 inches to 3 1/2 inches, a size particularly suited for use in portable computers, and problems incident thereto. For example, the patent addresses power consumption, vibration mounting, heat dissipation, storage capacity, and compatibility of the electrical interface with existing technology. See col. 2, l. 34 to col. 3, l. 3.

Disk drives store electromagnetic data on the concentric tracks of disks. While the disks spin at high speed, small electromagnets called "transducers" or "read/write heads" move near the disk surface retrieving and recording electromagnetic information on the concentric tracks. A positioning mechanism supports the heads and moves them to the correct location for data storage or retrieval. To ensure accurate recording and retrieval, the positioning mechanism must place the head precisely and consistently at the correct storage position on a disk track.

The demand for correct positioning introduces another of the numerous problems addressed by the invention of the '383 patent. Variations in temperature can significantly affect the positioning mechanism of the disk drive. Typically, disk drives incorporate stainless steel components where strength is critical and aluminum components elsewhere to minimize overall weight. Temperature variations cause these components, constructed of different materials, to expand or contract at different rates as the disk drive heats or cools.

The different expansion rates change the locations of these parts relative to one another. For example, when the temperature of a disk drive rises during warm-up, the disk itself will expand radially outward from the hub, which causes the tracks on the disk to move in a radially outward direction. The other components of the disk drive also expand, resulting in a cumulative offset of the head from the track. Thus, this temperature-induced offset prevents the read/write head from reaching the correct position on the disk track. Without some compensation for temperature variations, the head will not find the correct track position to retrieve information.

To solve this problem, the '383 patent teaches a thermal compensation scheme. Thermal compensation accounts for different expansion and contraction rates of a disk drive's components. In the embodiment disclosed in the patent, the thermal compensation system is built into the "positioning mechanism" -- the mechanism responsible for moving the heads between tracks. Specifically, the patent prescribes constructing the positioning mechanism from appropriate materials "to automatically compensate for any mispositioning between the transducer and a track caused by thermal effects." In addition to using stainless steel and aluminum, some of the components of the positioning mechanism use a third class of materials, such as an aluminum/bronze alloy, for its thermal expansion characteristics. The components of the positioning mechanism expand by controlled amounts, causing a corrective movement of the transducer to position it at the right location within a track.

Each of the asserted independent claims (3, 5, and 8) recites a "positioning means," the interpretation of which is central to this case. In claim 3, this element reads:

positioning means for moving said transducer means between the concentrically adjacent tracks on said micro hard-disk, said positioning means including:

two support arms each supporting one of said read/write heads with each read/write head being mounted at one end of its respective support arm;

a pivot shaft having an axis located on one side of said support arms and spaced away from said support arms;

a positioning arm to which the other ends of said support arms are attached, said positioning arm having one end thereof coupled to said pivot shaft;

a bearing assembly supporting said pivot shaft for rotational movement thereby enabling said positioning arm to be pivoted about the axis of said pivot shaft;

a stepper motor having an output drive shaft;

means for operating said stepper motor in step increments; and

a tensioned steel band coupling said drive shaft of said stepper motor to the other end of said positioning arm, said band being arranged in a pulley arrangement whereby rotational movement of said stepper motor causes pivoting of said positioning arm about said pivot shaft for moving said support arms and the read/write heads in incremental steps with each increment causing said read/write heads to move from one track to the next adjacent track on said micro hard-disk.

Claims 5 and 8 recite an almost identical "positioning means" to each other, but somewhat different from that of claim 3:

positioning means for moving said first and second transducer means between the concentrically adjacent tracks on said micro hard-disks, said positioning means including a positioning arm disposed within the sealed housing, a pivot shaft coupled to one end of said positioning arm and supporting said positioning arm for rotational movement relative to said micro hard-disks, four support arms, each supporting one of said heads at one end and each connected to said positioning arm at its other end, a stepper motor having a shaft extending into said sealed housing and means for operating said stepper motor in step increments, each increment causing said read/write heads to move from one track to the next adjacent track on said micro hard-disks....

Rodime accuses Seagate's ST157 hard drive of infringing the '383 patent. The parties do not dispute that Seagate's drive incorporates some of the thermal compensation mechanisms disclosed in the '383 patent. Specifically, Seagate's drives use materials with favorable thermal compensation properties in their positioning mechanisms. Seagate's ST157 also relies, however, on a "thermal pin" which works in conjunction with the selection of materials to provide thermal compensation. This pin within Seagate's positioning mechanism has a precise amount of stiffness. When temperature rises and the disk components begin to expand, this expansion stresses the thermal pin causing it to bend. The bending of the pin causes a corrective movement of the head to maintain it at the proper position in the track.

Rodime's State Law Claims

The '383 patent arose out of Rodime's efforts in the early 1980's to develop a smaller hard drive than the 5 1/4 inch drives then in use. Rodime succeeded in developing a 3 1/2 inch drive, the RO350, which formed the basis for the specification common to the '383 patent and its parent. By the time the '383 patent issued in 1987, other manufacturers had begun producing 3 1/2 inch drives. Rodime initially met resistance in its efforts to license these manufacturers. Several lawsuits quickly arose in which the manufacturers challenged the validity of the '383 patent. In response, Rodime filed for reexamination so that the United States Patent and Trademark Office (PTO) could determine if the claimed subject matter was patentable over newly discovered prior art. Rodime became aware of this new prior art during its licensing negotiations and lawsuits. After amending its claims, Rodime secured a Reexamination Certificate on November 29, 1988.

Rodime then renewed its licensing efforts, this time meeting with some success. Having already granted several licenses, Rodime began negotiations with Quantum Corporation and Western Digital Corporation. Seagate, upon learning of these negotiations, contacted both companies to dissuade them from taking licenses from Rodime. In the fall of 1991, Quantum, Western Digital, and Seagate met to discuss the '383 patent and Rodime's licensing offers. Seagate told both companies that if they were sued by Rodime, Seagate would support them by filing a declaratory judgment action. Shortly thereafter, Quantum and Western Digital...