Schwendimann v. Arkwright Advanced Coating, Inc.

• Decision Date: 30 July 2018
• Docket Number: Civil No. 11-820 (JRT/HB)
• Parties: JODI A. SCHWENDIMANN, f/k/a JODI A.DALVEY Plaintiff, v. ARKWRIGHT ADVANCED COATING, INC. Defendant. ARKWRIGHT ADVANCED COATING, INC. Counterclaim Plaintiff, v. JODI A. SCHWENDIMANN, f/k/a JODI A. DALVEY and COOLER CONCEPTS, INC. Counterclaim Defendants.
• Court: U.S. District Court — District of Minnesota

JODI A. SCHWENDIMANN,f/k/a JODI A.DALVEY Plaintiff, v. ARKWRIGHT ADVANCED COATING, INC. Defendant.

ARKWRIGHT ADVANCED COATING, INC. Counterclaim Plaintiff, v. JODI A. SCHWENDIMANN, f/k/a JODI A. DALVEYand COOLER CONCEPTS, INC. Counterclaim Defendants.

Civil No. 11-820 (JRT/HB)

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

July 30, 2018

MEMORANDUM OPINION AND ORDER

David A. Davenport, Devan V. Padmanabhan, and Michelle E. Dawson, WINTHROP & WEINSTINE, PA, 225 South Sixth Street, Suite 3500, Minneapolis, MN 55402, for Jodi A. Schwendimann and Cooler Concepts, Inc.

Katherine J. Rahlin, Kurt J. Niederluecke, and Laura L. Myers, FREDRIKSON & BYRON, PA, 200 South Sixth Street, Suite 4000, Minneapolis, MN 55402, for Arkwright Advanced Coating, Inc. Plaintiff Jodi Schwendimann brought this patent-infringement action against Arkwright Advanced Coating, Inc. ("AACI"), for infringement of a number of patents related to dark T-shirt transfer technology. AACI brought a counterclaim for infringement of U.S. Patent 6,667,093 ("the '093 Patent"), which the jury subsequently found invalid. AACI renews its Motion for Judgment as a Matter of Law on the invalidity of the '093 Patent. In the alternative, AACI moves for a new trial on this issue. The Court will deny both of AACI's motions.

BACKGROUND

AACI brought a counterclaim of patent infringement against Schwendimann and her company, Cooler Concepts, Inc., alleging infringement of the '093 Patent. (AACI's Answer to Am. Compl. ("Answer") at 12-23, June 8, 2015, Docket No. 268.) Claim 1 of the '093 Patent provides:

An ink-jet printable transfer paper for transferring an image to a fabric material, comprising a support paper having a surface coated with:

a hot-melt layer comprising a thermoplastic polymer having a melting point in the range of 60° to 180° C.,

a substantially opaque layer (a) comprising a polyurethane binder and inorganic white pigment, and

ink-receptive layer (b) comprising a polyurethane binder and organic polymeric particles.

(Decl. of Laura Myers ("Myers Decl.") ¶ 31, Nov. 20, 2017, Docket No. 746; Trial Ex. P025 ('093 Patent) at 10:54-62, Nov. 20, 2017, Docket No. 751.) Claim 11 of the '093 Patent provides:

An ink-jet printable transfer paper for transferring an image to a fabric material, comprising a support paper having a surface coated with:

a) a first layer comprising silicone,

b) a hot-melt second layer comprising a thermoplastic polymer having a melting point in the range of 60° to 180° C., said second layer overlaying the first layer,

c) a substantially opaque third layer comprising a polyurethane binder and inorganic white pigment, said third layer overlaying said second layer, and

d) an ink-receptive fourth layer comprising a polyurethane binder and organic particles, said fourth layer overlaying said third layer.

('093 Patent at 11:26-39.)

Before trial, the Court granted AACI summary judgment of infringement of the '093 Patent. (Mem. Op. & Order at 12-15, Dec. 12, 2016, Docket No. 439.) Subsequently, AACI filed motions in limine asking that the Court exclude evidence of (1) Schwendimann's '845 Application and '475 Patent, and (2) alleged copying of Schwendimann's invention by Arkwright. (Mem. Op. & Order ("MILs Order") at 12-14, Sept. 25, 2017, Docket No. 598.) The Court denied these motions. (Id.)

At the close of Schwendimann's case-in-chief, AACI moved for judgment as a matter of law that the '093 Patent is not invalid. (AACI's Mot. for J. as a Matter of L., Oct. 13, 2017, Docket No. 637.) The Court denied this motion. (Trial Tr. Vol. IX at 2043:17-22, Nov. 27, 2017, Docket No. 768.)

The Court instructed the jury that Schwendimann must prove invalidity of the '093 Patent by clear and convincing evidence. (Jury Inst. at 31, Oct. 17, 2017, Docket No. 780.) The jury returned a verdict in Schwendimann's favor and found claims 1 and 11 of the '093 Patent invalid as anticipated by (1) Schwendimann's '475 Patent in light of the '845Application and (2) Schwendimann's products. (Am. J., Nov. 14, 2017, Docket No. 705; Redacted Verdict at 3, Oct. 20, 2017, Docket No. 678.)

AACI renews its motion for judgment as a matter of law on invalidity of the '093 Patent. (Def.'s Renewed Mot. for J. as a Matter of L. on Invalidity of the '093 Patent ("Invalidity JMOL"), Docket No. 737.) In the alternative, AACI moves for a new trial on the same issue. (Id.)

DISCUSSION

I. STANDARD OF REVIEW

A. Post-Trial Motions

While Federal Circuit law governs substantive patent law, regional circuit law governs a district court's rulings on post-trial motions for judgment as a matter of law and for a new trial. Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197, 1202 (Fed. Cir. 2010).

Under Rule 50(a)(1) of the Federal Rules of Civil Procedure, the Court may resolve an issue as a matter of law if "a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." A party may renew a motion for judgment as a matter of law after trial. Fed. R. Civ. P. 50(b). "A motion for judgment as a matter of law should be granted when all the evidence points one way and is susceptible of no reasonable inferences sustaining the position of the nonmoving party." Hunt ex rel. Hunt v. Lincoln Cty. Mem'l Hosp., 317 F.3d 891, 893 (8^th Cir. 2003) (quoting Neely v. Am.Family Mut. Ins. Co., 123 F.3d 1127, 1129 (8^th Cir. 1997)). In making this determination, the Court must

consider the evidence in the light most favorable to the prevailing party, assume that the jury resolved all conflicts of evidence in favor of that party, assume as true all facts which the prevailing party's evidence tended to prove, give the prevailing party the benefit of all favorable inferences which may reasonably be drawn from the facts, and deny the motion, if in light of the foregoing, reasonable jurors could differ as to the conclusion that could be drawn from the evidence.

Minneapolis Cmty. Dev. Agency v. Lake Calhoun Assocs., 928 F.2d 299, 301 (8^th Cir. 1991) (quoting Atlas Pile Driving Co. v. Dicon Fin. Co., 886 F.2d 986, 989 (8^th Cir. 1989)).

The Court may grant a motion for a new trial "on all or some of the issues." Fed. R. Civ. P. 59(a)(1). "A new trial is appropriate when the first trial, through a verdict against the weight of the evidence . . . or legal errors at trial, resulted in a miscarriage of justice." Gray v. Bicknell, 86 F.3d 1472, 1480 (8^th Cir. 1996). "The authority to grant a new trial is within the discretion of the district court." Id. The Court may grant a new trial where erroneous evidentiary rulings "had a substantial influence on the jury's verdict." Littleton v. McNeely, 562 F.3d 880, 888 (8^th Cir. 2009) (quoting Harris v. Chand, 506 F.3d 1135, 1139 (8^th Cir. 2007)). Furthermore, only if the jury's verdict is "so against the great weight of the evidence" that it "constitute[s] a miscarriage of justice" should a motion for a new trial be granted. Ogden v. Wax Works, Inc., 214 F.3d 999, 1010 (8^th Cir. 2000).

B. Invalidity

An issued patent is presumed valid. 35 U.S.C. § 282. The party asserting invalidity bears the burden of proving invalidity by clear and convincing evidence. Microsoft Corp. v. i4i Ltd. P'ship, 564 U.S. 91, 95 (2011).

A patent is invalid if its claims are anticipated by prior art. Three methods of anticipation are relevant in this case.

First, a patent is anticipated under 35 U.S.C. § 102(a)¹ if the claimed invention "was known or used by others in this country." "For prior art to anticipate under 35 U.S.C. § 102(a) because it is 'known,' the knowledge must be publicly accessible, and it must be sufficient to enable one with ordinary skill in the art to practice the invention." Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1301 (Fed. Cir. 2002) (citation omitted).

Second, a patent is anticipated under 35 U.S.C. § 102(b) if the claimed invention was "on sale . . . more than one year prior to the date of the application for patent." The on-sale bar applies when the claimed invention was the subject of a commercial offer for sale and was ready for patenting. Medicines Co. v. Hospira, Inc., 827 F.3d 1363, 1372-73 (Fed. Cir. 2016). A commercial offer for sale is an offer that another party could make into a binding contract by acceptance. Id. at 1378. The on-sale bar applies even when thepatentee's offer is kept secret. Woodland Tr. v. Flowertree Nursery, Inc., 148 F.3d 1368, 1370-71 (Fed. Cir. 1998); see Medicines, 827 F.3d at 1376.

Third and finally, a patent is anticipated under 35 U.S.C. § 102(e) if the claimed invention was described in "(1) an application for patent, published under section 122(b), by another filed . . . before the invention by the applicant for patent or (2) a patent granted on an application for patent by another filed . . . before the invention by the applicant for patent."

An invalidity finding requires corroboration of oral testimony:

Oral testimony by an interested party on its own will generally not suffice as "clear and convincing" evidence of invalidity. Rather, such oral testimony must be corroborated by some other evidence. The corroborating evidence can include documents and testimonial evidence. Circumstantial evidence can be sufficient. This corroboration requirement for testimony by an interested party is based on the sometimes unreliable nature of oral testimony, due to "the forgetfulness of witnesses, their liability to mistakes, their proneness to recollect things as the party calling them would have them recollect, aside from the temptation to actual perjury."

Transweb, LLC v. 3M Innovative Props. Co., 812 F.3d 1295, 1301 (Fed. Cir. 2016) (emphasis added) (quoting Lazare Kaplan Int'l v. Photoscribe Techs., 628 F.3d 1359, 1374 (Fed. Cir 2010)) (citations omitted). Whether oral testimony is sufficiently corroborated is governed by a "rule of reason," whereby "all pertinent evidence is examined in order to determine whether the inventor's story is credible." Id. (quoting Sandt Tech. v. Resco Metal & Plastics...