State Contracting & Eng. v. Condotte America
| Decision Date | 07 October 2003 |
| Docket Number | No. 02-1588.,No. 02-1589.,No. 03-1008.,02-1588.,02-1589.,03-1008. |
| Citation | 346 F.3d 1057 |
| Parties | STATE CONTRACTING & ENGINEERING CORPORATION, Plaintiff-Appellant, v. CONDOTTE AMERICA, INC. (formerly known as Recchi America, Inc.), The Murphy Construction Company, The Hardaway Company, Hubbard Construction Company, Balfour Beatty Construction, Inc., Community Asphalt Corporation, And Hanson Pipe & Products Southeast, Inc. (formerly known as Joelson Concrete Pipe Company, Inc.), Defendants-Cross Appellants. |
| Court | U.S. Court of Appeals — Federal Circuit |
Richard S. Ross, of Ft. Lauderdale, Florida, argued for plaintiff-appellant. Of counsel on the brief was John H. Faro, Faro & Associates, of Miami, Florida.
Stefan V. Stein and Steven L. Brannock, Holland & Knight LLP, of Tampa, Florida, argued for defendants-cross appellants. With them on the brief was Harvey S. Kauget.
Before MICHEL, BRYSON, and DYK, Circuit Judges.
State Contracting & Engineering Corporation ("State Contracting") sued the State of Florida and a number of private contractors in the United States District Court for the Southern District of Florida, charging them with patent infringement. The State was dismissed from the case, and after an appeal to this court and a jury trial on remand, the district court entered judgment for State Contracting. Although it obtained an award of damages, State Contracting has appealed the district court's ruling that the contractors' infringement was not willful. For their part, the contractors have appealed from the judgment on a number of grounds, including State Contracting's standing to assert infringement of the two patents-in-suit, the district court's rejection of the contractors' defenses of laches and patent invalidity, and the jury's award of reasonable royalty damages. We uphold most of the district court's rulings, but reverse and remand for further proceedings on the issue of obviousness.
This action stems from work done under a contract in which State Paving Corporation ("State Paving") constructed a set of sound barrier walls for the Florida Department of Transportation ("FDOT"). Sound barrier walls serve to reduce the level of highway noise reaching surrounding neighborhoods. During the construction, State Paving submitted a Value Engineering Change Proposal ("VECP") for a new integrated column and pile design to be used to support the sound barrier walls. FDOT accepted the proposal and incorporated it into the specifications for the project. In accordance with the VECP contract, FDOT paid State Paving half of the cost savings realized from the use of the VECP in the project.
Subsequently, State Paving applied for and was issued two patents related to the subject matter of the VECP: U.S. Patent No. 5,234,288 ("the '288 patent") and U.S. Patent No. 5,429,455 ("the '455 patent"). The '288 patent contains method claims directed to the formation of an integrated column and pile for use in building structures in sandy soil. Claim 1 of the '288 patent, the only independent claim, provides:
A method of forming a ground-supported column or post, comprising the steps of providing a ground situs of suitable depth and width, filling said situs with a cementitious slurry, providing a reinforced, precast concrete member whose reinforcing bars extend out of the bottom of said member a substantial length beyond said bottom to form an exposed portion, inserting said exposed portion into said slurry until said member merges with said slurry, and permitting said slurry to harden, thus providing an integral column and pile set in the ground.
'288 patent, col. 4, ll. 2-12. Dependent claim 2 adds the limitation of using auger casting for the ground situs and slurry, while dependent claim 3 adds the use of falsework to keep the concrete member in position while the slurry hardens. Id., col. 4, ll. 13-19. According to the written description, an auger rotates to cut through the soil and create the hole. Cementitious material can then be pumped through the central channel of the auger so that when a retaining means or valve in the auger is opened, the cementitious material fills the hole. Id., col. 1, l. 61, to col. 2, l. 4.
The '455 patent contains three apparatus claims. Claim 1 is representative:
A precise reinforced concrete member containing reinforcing bars which have exposed portions extending beyond one end of the member and parallel to the longitudinal dimension of the member; the number, size and length of such exposed portions being such as to provide sufficient strength when the end of said concrete member is merged with and the bars inserted into a foundation pile of initially wet, cementitious material, which material is then allowed to set; said exposed portions being further characterized in being completely surrounded by said cementitious material; said concrete member and said pile being merged without mechanical attachment.
'455 patent, col. 3, l. 23, to col. 4, l. 3.
On May 9, 1997, State Paving entered into an agreement to transfer the invention disclosed in the two patents to State Contracting. State Contracting then sued FDOT and several highway construction contractors for infringement of the two patents. State Contracting alleged that FDOT had improperly incorporated the VECP into subsequent requests for bids and that the contractors had then infringed the patents when they carried out the construction contracts that resulted from those bids. The district court granted the defendants' motions for summary judgment with respect to State Contracting's claims of patent infringement, holding that, when it executed the VECP contract, State Paving had granted FDOT a license that authorized FDOT and its contractors to practice the asserted patents.
On State Contracting's appeal, we affirmed the district court's ruling in favor of FDOT, but we held that the district court had erred in granting summary judgment to the private contractors on the patent infringement claims. State Contracting & Eng'g Corp. v. Florida, 258 F.3d 1329, 1340 (Fed.Cir.2001). We held that the VECP contract did not grant FDOT a license to practice the patents in future soundwall construction projects.
After the case was remanded to the district court, the contractors filed a motion to dismiss, arguing that State Contracting lacked standing to sue for patent infringement because State Paving had not validly assigned the patents to State Contracting. The district court denied that motion. In a joint pretrial stipulation, the contractors then admitted literal infringement of both of the asserted patents, subject to their affirmative defenses. At the close of the evidence at trial, the district court ruled as a matter of law that the contractors' infringement was not willful, that the asserted patent claims were not invalid, and that the contractors did not have a valid defense of laches.
The jury returned a verdict in favor of State Contracting. Although the jury declined to award lost profits, it assessed damages against four of the contractors in the form of a reasonable royalty to State Contracting. The district court denied the contractors' motion for a new trial or remittitur of the jury verdict award.
We first address the issue of standing raised by the contractors in their cross-appeal. The contractors contend that State Contracting lacked standing to seek recovery for patent infringement because it did not have the requisite interest in the patents-in-suit at the time the action was filed. According to the contractors, the May 9, 1997, contract between State Paving and State Contracting merely granted a license under the asserted patents and did not transfer ownership of the patent rights.
Section 281 of the Patent Act, 35 U.S.C. § 281, authorizes a "patentee" to bring an action for patent infringement. A patentee "includes not only the patentee to whom the patent was issued but also the successors in title to the patentee." 35 U.S.C. § 100(d). We have held that "[a] conveyance of legal title by the patentee can be made only of the entire patent, an undivided part or share of the entire patent, or all rights under the patent in a specified geographical region of the United States." Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1551 (Fed.Cir.1995) (en banc) (citing Waterman v. Mackenzie, 138 U.S. 252, 255, 11 S.Ct. 334, 34 L.Ed. 923 (1891)). Such a transfer is an assignment, vesting the assignee with both title in the patent and the right to sue infringers. Rite-Hite, 56 F.3d at 1551. In contrast, less than a complete transfer of those interests constitutes a license and generally affords the licensee no right to sue for infringement. Id. We must therefore determine whether the transfer from State Paving to State Contracting was an assignment or a license.
"To determine whether a provision in an agreement constitutes an assignment or a license, one must ascertain the intention of the parties and examine the substance of what was granted." Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 873 (Fed.Cir. 1991). A party that has been granted all substantial rights under the patent is considered the owner regardless of how the parties characterize the transaction that conveyed those rights. Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1250 (Fed.Cir. 2000). The relevant contract in this case specifies that State Paving "sells, assigns, and transfers" to State Contracting
the entire right title and interest in the inventions relating to an Integrated Column & Pile, to any component part and subassemblies thereof, and to any improvements in the foregoing Integrated Column & Pile, component part and subassemblies thereof, including, but not limited [to] subject matter disclosed in [the '288 patent and the '455 patent].
It is understood that this assignment is inclusive of all claims against third pa...
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