Tec Air Inc. v. Denso Mfg.

CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit
Writing for the CourtBefore MAYER, Chief Judge, MICHEL and LOURIE; MAYER
Citation192 F.3d 1353,52 USPQ2d 1294
Decision Date30 September 1999
Parties(Fed. Cir. 1999) TEC AIR, INC., Plaintiff-Appellee, v. DENSO MANUFACTURING MICHIGAN INC. (formerly known as Nippondenso Manufacturing USA, Inc.) and DENSO CORPORATION (formerly known as Nippondenso Co., Ltd.), Defendants-Appellants. 99-1011 DECIDED:

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192 F.3d 1353 (Fed. Cir. 1999)
TEC AIR, INC., Plaintiff-Appellee,
v.
DENSO MANUFACTURING MICHIGAN INC. (formerly known as Nippondenso Manufacturing USA, Inc.) and DENSO CORPORATION (formerly known as Nippondenso Co., Ltd.), Defendants-Appellants.
99-1011
United States Court of Appeals for the Federal Circuit
DECIDED: September 30, 1999
Rehearing Denied; Suggestion for Rehearing In Banc Declined: November 8, 1999

Appealed from: United States District Court for the Northern District of Illinois Judge Blanche M. Manning

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Jerold A. Jacover, Brinks Hofer Gilson & Lione, of Chicago, Illinois, argued for plaintiff-appellee. With him on the brief were Richard A. Kaplan, Rodney A. Daniel, and Bradley G. Lane. Of counsel was James M. McCarthy.

William A. Streff, Jr., Kirkland & Ellis, of Chicago, Illinois, argued for defendants-appellants. With him on the brief was Paul R. Steadman; and Jay I. Alexander, Kirkland & Ellis, of Washington, DC. Of counsel on the brief were Kenneth J. Jurek and Rosanne J. Faraci, McDermott, Will & Emery, of Chicago, Illinois.

Before MAYER, Chief Judge, MICHEL and LOURIE, Circuit Judges.

MAYER, Chief Judge.

Denso Manufacturing Michigan, Inc. and Denso Corporation (collectively "Denso") appeal the September 24, 1998 judgment of the United States District Court for the Northern District of Illinois, No. 91-CV-4488, which was entered after the court denied Denso's motion for judgment as a matter of law, or alternatively, for a new trial on the issues of patent validity and damages. We affirm.

Background

Tec Air, Inc. ("Tec Air") owns U.S. Patent Nos. 4,047,692 and 4,107,257 ("the Swin patents"), both of which have effective filing dates of September 24, 1975. The Swin patents describe a method of and a device for making properly balanced, injected-molded fans. One way to balance a plastic fan is to use balance "pads," "lugs," or "plugs," which are deposits of plastic located in appropriate places on the fan. To create these lugs, a hollow column is formed in a steel fan mold, which fills with molten plastic during the injection-molding process. When Tec Air entered the fan molding business in 1972, like other manufacturers, it used several methods of creating these columns, such as grinding or drilling holes in mold inserts and refilling them if needed. A mold insert forms a portion of the overall fan. Tec Air also inserted replaceable brass rods into hollowed-out sections of the mold insert, which are drilled more easily because brass is a softer metal than steel (the "brass plug method"). In June 1974, Tec Air's employee, Richard Swin, Sr., conceived the method disclosed in the Swin patents--inserting adjustable screws into hollowed-out sections of the mold insert that is used to form the fan hub. These screws are accessible from the front or cavity-side of the mold.

Throughout the development of the claimed invention, Tec Air continued to market its fans and fan molds. For example, in June 1974, Tec Air offered to sell Keeprite Products ("Keeprite") injected-molded

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fans and the corresponding mold. Keeprite placed an order in July 1974 and Tec Air created drawings for the Keeprite fan. One drawing, dated August 16, 1974, shows "balance plugs" on the fan, but does not specify the method of creating them. Before September 24, 1974, Tec Air asked its mold maker, Jack Dearhammer at Mid City Tool & Die, to quote it a price for making a mold insert for the Keeprite fan. The sketch used for this price quotation did not show balance plugs, but Dearhammer ultimately made the mold insert capable of producing balance plugs by inserting adjustable screws into hollowed-out sections of the mold. In another attempt to solicit business, Tec Air sent sample fans to Howard Industries on August 14, 1974. These fans were model number 4B-60-21. On August 13, 1974, Dearhammer returned to Tec Air the mold insert used to make the 4B-60-21 fan, after he had modified it to include the patented invention's adjustable screws. Prior to sending the mold to Dearhammer, however, Tec Air accumulated thousands of the 4B-60-21 fans in its inventory, which were made by prior art balancing techniques.

In 1991, Tec Air sued Denso for infringement because it manufactured radiator and condenser assemblies that included a fan that was balanced according to the claimed method. Tec Air won the infringement phase of the trifurcated trial, which Denso does not appeal. A jury then heard the invalidity phase of the suit, in which Denso argued that the patents are invalid because Tec Air offered the invention for sale more than one year before the effective filing date and because the invention of the claims would have been obvious. The jury returned special interrogatories indicating that Tec Air neither sold nor offered the invention for sale before the critical date and that the patented invention would not have been obvious. The same jury subsequently awarded damages of $25.2 million, which corresponds to a royalty of 6.5% of the infringing sales of Denso's entire radiator and condenser assemblies, but is nevertheless less than the royalty requested by Tec Air. Denso moved for judgment as a matter of law, or alternatively, for a new trial on the validity and damages issues.

The court denied the motion for judgment as a matter of law because, although the evidence showed that Tec Air possessed mold inserts having adjustable screws before the critical date, there was evidence that Tec Air did not use these inserts to create commercial products. In addition, the court determined not only that Denso failed to establish a prima facie case of obviousness for lack of a suggestion to combine the cited references, but also that Tec Air produced sufficient objective evidence of nonobviousness. The court also held that the jury properly used the entire market value rule in measuring damages because each Denso assembly was a single functioning unit, which included the infringing fan. The court then denied Denso's motion for a new trial because the evidence was sufficient to support the invalidity verdict and the damage award was neither excessive nor the product of improper considerations. This appeal followed.

Discussion

"We review a trial court's decision on a motion for judgment as a matter of law following a jury verdict by reapplying its own standard of review. Therefore, for [Denso] to prevail on appeal it must prove that the jury's factual findings were not supported by substantial evidence or that the facts were not sufficient to support the conclusions necessarily drawn by the jury on the way to its verdict." Applied Med. Resources Corp. v. United States Surgical Corp., 147 F.3d 1374, 1376, 47 USPQ2d 1289, 1290 (Fed. Cir. 1998) (citations omitted). In evaluating whether Denso met this standard, "we must consider the evidence of record in the light most favorable to [Tec Air], drawing all reasonable inferences in its favor, without disturbing the jury's credibility

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determinations or substituting our resolutions of conflicting evidence for those of the jury." Id. at 1376-77, 47 USPQ2d at 1291. If no reasonable person could have reached a verdict for Tec Air in light of the record before the jury, Denso will prevail. See id. at 1376, 47 USPQ2d at 1291.

On-Sale Bar

"The ultimate determination that a product was placed on sale under [35 U.S.C. § 102(b) (1994)] is a question of law, based on underlying facts." Ferag AG v. Quipp Inc., 45 F.3d 1562, 1566, 33 USPQ2d 1512, 1514-15 (Fed. Cir. 1995). To prove that the Swin patents are invalid for violating the on-sale bar, Denso "must demonstrate by clear and convincing evidence that there was a definite sale or offer to sell more than one year before the application for the subject patent, and that the subject matter of the sale or offer to sell fully anticipated the claimed invention or would have rendered the claimed invention obvious by its addition to the prior art." Id. (internal quotations omitted); see also Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 119 S. Ct. 304, 311, 48 USPQ2d 1641, 1647 (1998) ("First, the product must be the subject of a commercial offer for sale."); Scaltech Inc. v. Retec/Tetra, L.L.C., 178 F.3d 1378, 1383, 51 USPQ2d 1055, 1058 (Fed. Cir. 1999) ("[T]he first determination in the § 102(b) analysis must be whether the subject of the barring activity met each of the limitations of the claim, and thus was an embodiment of the claimed invention."). If this subject matter anticipates the claimed invention or would have rendered it obvious, the invention itself must also have been "ready for patenting" at the time of the offer or sale--e.g., the invention must have been reduced to practice or embodied in "drawings or other descriptions . . . that [are] sufficiently specific to enable a person skilled in the art to practice the invention." Pfaff, 119 S. Ct. at 312, 48 USPQ2d at 1647.

Denso claims that Tec Air offered the invention for sale on June...

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    ...in the art would lead that individual to combine the relevant teachings of the references.” Tec Air, Inc. v. Denso Mfg. Mich., Inc., 192 F.3d 1353, 1359 (Fed.Cir.1999) (citation omitted). There is no suggestion to combine, however, if a reference teaches away from its combination with anoth......
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285 cases
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    • United States
    • United States District Courts. 5th Circuit. United States District Court of Eastern District Texas
    • October 9, 2012
    ...evidence.” TGIP, Inc. v. AT & T Corp., 527 F.Supp.2d 561, 577 (E.D.Tex.2007), citing Tec Air, Inc. v. Denso Mfg. Mich., Inc., 192 F.3d 1353, 1359 (Fed.Cir.1999). When a court evaluates factual findings for substantial evidence, the “inquiry is whether a reasonable jury, given the record......
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    ...the claimed invention obvious by its addition to the prior art." Id. (citation omitted); Tec Air. Inc. v. Denso Mfg. Mich. Inc., 192 F.3d 1353, 1358 (Fed.Cir.1999) (quoting Ferag AG v. Quipp Inc., 45 F.3d 1562, 1566 (Fed.Cir.1995)); LaBounty Mfg. Inc. v. United States Int'l Trade Comm'......
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    ...to market its loudspeakers based on the benefits of the patented invention. Id. Similarly, in Tec Air, Inc. v. Denso Mfg. Michigan Inc., 192 F.3d 1353, 1362 (Fed.Cir. 1999), the Court upheld an award based on the entire value of radiator and condenser assemblies, though the patents involved......
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