TransWeb, LLC v. 3M Innovative Props. Co.

• Decision Date: 10 February 2016
• Docket Number: No. 2014–1646.,2014–1646.
• Citation: 812 F.3d 1295
• Parties: TRANSWEB, LLC, Plaintiff–Appellee v. 3M INNOVATIVE PROPERTIES COMPANY, 3M Company, Defendants–Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

812 F.3d 1295

TRANSWEB, LLC, Plaintiff–Appellee

v.3M INNOVATIVE PROPERTIES COMPANY, 3M Company, Defendants–Appellants.

No. 2014–1646.

United States Court of Appeals, Federal Circuit.

Feb. 10, 2016.

Michael Ernest Williams, Quinn Emanuel Urquhart & Sullivan, LLP, Los Angeles, CA, argued for plaintiff-appellee. Also represented by Valerie Roddy, Harold Barza ; Sanford Ian Weisburst, New York, NY; Philip Charles Sternhell, Washington, DC.

Seth P. Waxman, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, argued for defendants-appellants. Also represented by Thomas Saunders, Kenneth Hugh Merber; Mark Christopher Fleming, Sarah B. Petty, Boston, MA.

Before WALLACH, BRYSON, and HUGHES, Circuit Judges.

HUGHES, Circuit Judge.

3M sued TransWeb for infringement of several patents. TransWeb sued for declaratory judgment of invalidity and non-infringement of the patents. A jury found the patents to be invalid based on TransWeb's prior public use of the patented method. In accordance with an advisory verdict from the jury, the district court found the patents unenforceable due to inequitable conduct. The jury also found 3M to be liable for a Walker Process antitrust violation and that attorney fees were an appropriate antitrust remedy. The district court awarded approximately $26 million to TransWeb, including trebled attorney fees as antitrust damages. The primary issues are whether sufficient corroborating evidence exists to support the finding of prior public use by TransWeb, and whether the attorney fees are an appropriate basis for damages under the antitrust laws in this context. We hold in the affirmative on both issues. For the latter issue, we find that TransWeb's attorney fees appropriately flow from the unlawful aspect of 3M's antitrust violation and thus are an antitrust injury that can properly serve as the basis for antitrust damages. For these reasons, we affirm the district court's judgment.

I

TransWeb and 3M are both manufacturers of filters for respirators, such as might be worn by workers in a dirty or otherwise contaminated worksite. The filter media at issue in this case consist of "nonwoven fibrous webs," which rely on a "web" of fibers rather than traditional woven material. Both TransWeb and 3M use a process of melting pellets of a filter material, such as polypropylene, blowing the melted material into a thin film, and then allowing the material to cool and solidify into the nonwoven fibrous web.

It had been known in the art for some time that a filter medium could be improved by imparting upon it an electrical charge. In this way, the filter medium can repel or capture particulates both by mechanical and electromagnetic means. A filter medium on which a semipermanent electrical charge has been imparted is referred to as an "electret."

TransWeb and 3M independently developed a technique for imparting this electret characteristic by using plasma fluorination. Fluorination involves introducing fluorine atoms into the chemical structure of the filter web. Previously known techniques involved mixing fluorine compounds into the melted filter material, but this proved disadvantageous. Instead, TransWeb and 3M both discovered that it would be advantageous to first form the fibrous web and then introduce the fluorine atoms into the chemical structure. This technique involves exposing a gaseous fluorine compound to the surface of the filter web in the presence of plasma. The intense heat and electromagnetic energy introduced by the plasma cause some of the chemical bonds on the surface of the filter web to break, and the fluorine atoms fill in those bonds to form fluorine compounds on the surface of the filter web.

Plasma-fluorinated filter media are particularly effective in oily environments, where other types of filter media might perform poorly or quickly degrade. The National Institute for Occupational Safety and Health (NIOSH) provides a rating and approval service for oily environment respirators, categorizing them as: not resistant to oil; resistant to oil; or oil proof. The Occupational Safety and Health Administration (OSHA) provides regulations governing what NIOSH rating of respirators must be used in certain types of worksites within the United States.

The present appeal focuses largely on the events surrounding a filtration industry exposition that occurred in late April and early May of 1997. It is uncontested that TransWeb's founder, Kumar Ogale, attended the expo and handed out samples of filter material. The filter material included samples of TransWeb's "T–Melt" products, an identifier for the general class of melt-blown, i.e., nonwoven fibrous web, media. The primary dispute is whether Mr. Ogale handed out, more specifically, samples of the "T–Melt P" products, which is the specific class of plasma-fluorinated T–Melt products. Mr. Ogale testified at trial that he did in fact hand out T–Melt P samples at the expo, though no independent documents or testimony evidence this fact. The parties do not contest that if Mr. Ogale handed out T–Melt P samples at the expo, then they would serve as prior art to the plasma fluorination technique of the claimed methods. The expo occurred more than one year prior to the priority date of the patents asserted in this case, so any public disclosure of plasma fluorination at the expo would be a statutory bar to patentability, at least based on that feature.

In July of 1998, 3M filed U.S. Patent Application 09/109,497, to which both of U.S. Patents 6,397,458 and 6,808,551 claim earliest priority. 3M asserted both the '458 and '551 patents against TransWeb. In addition to the plasma fluorination of nonwoven fibrous webs described above, the patent family discloses use of "hydro-charging," which is a technique that uses water to impart the electrical charge on the filter medium.

3M initially filed suit in Minnesota against TransWeb for patent infringement. After 3M voluntarily dismissed that suit due to an apparent personal jurisdiction issue, TransWeb filed suit in New Jersey for declaratory judgment.

The district court in New Jersey ultimately presented the following issues to a jury: infringement of claims 31 and 57 of the '458 patent ; invalidity for obviousness of claims 31 and 57; unenforceability of the '458 and '551 patents due to inequitable conduct; Walker Process antitrust violation based on fraudulent procurement and subsequent assertion of the '458 and ' 551 patents ; sham litigation antitrust violation based on assertion of the '458 and '551 patents ; entitlement to lost profits damages for antitrust violations; and entitlement to attorney fees as damages for antitrust violations. The jury delivered the following verdicts: claims 31 and 57 are not infringed; claims 31 and 57 are invalid; both patents are unenforceable; 3M committed a Walker Process violation but not a sham litigation violation; and TransWeb is entitled to lost profits and attorney fees as antitrust damages.

The district court entered judgment in accordance with the jury verdicts. 3M moved for judgment as a matter of law, which the district court denied. 3M appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

II

This court reviews denial of a JMOL motion de novo, applying the law of the regional circuit. Am. Calcar, Inc. v. Am. Honda Motor Co., 651 F.3d 1318, 1341 (Fed.Cir.2011). In the Third Circuit, courts assess "whether there is evidence upon which a reasonable jury could properly have found its verdict." Gomez v. Allegheny Health Servs., 71 F.3d 1079, 1083 (3d Cir.1995). JMOL "should be granted only if, viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find" for the nonmovant. Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir.1993). Underlying questions of law are reviewed without deference. ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 268 (3d Cir.2012).

On appeal, 3M challenges the district court's judgment on validity, inequitable conduct, and antitrust liability. We address each argument in turn.

III

The jury found both claims of the '458 patent invalid, and the district court denied 3M's motion for JMOL of non-invalidity. 3M contests this judgment based on a purported lack of corroboration of Mr. Ogale's public use testimony and based on alleged non-obviousness of the claims even if there were public use of the plasma-fluorinated material.

A

Oral testimony by an interested party on its own will generally not suffice as "clear and convincing" evidence of invalidity. See Lazare Kaplan Int'l v. Photoscribe Techs., 628 F.3d 1359, 1374 (Fed.Cir.2010) ; Price v. Symsek, 988 F.2d 1187, 1194 (Fed.Cir.1993). Rather, such oral testimony must be corroborated by some other evidence. See Woodland Tr. v. Flowertree Nursery, Inc., 148 F.3d 1368, 1371 (Fed.Cir.1998). The corroborating evidence can include documents and testimonial evidence. See Lazare Kaplan, 628 F.3d at 1374–75, Adenta GmbH v. OrthoArm, Inc., 501 F.3d 1364, 1371 (Fed.Cir.2007), Sandt Tech. v. Resco Metal & Plastics Corp., 264 F.3d 1344, 1350–51 (Fed.Cir.2001). Circumstantial evidence can be sufficient. See Sandt, 264 F.3d at 1351 ; Knorr v. Pearson, 671 F.2d 1368, 1373 (C.C.P.A.1982). 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." Lazare Kaplan, 628 F.3d at 1374 (quoting Washburn & Moen Mfg. Co. v. Beat 'Em All Barbed–Wire Co., 143 U.S. 275, 284, 12 S.Ct. 443, 36 L.Ed. 154 (1892) ).

A "rule of reason" analysis is used to determine the sufficiency of corroboration, under which "all pertinent evidence is examined in order to determine whether the inventor's story is credible." Sand...