WBIP, LLC v. Kohler Co.

• Decision Date: 19 July 2016
• Docket Number: 2015-1038,2015-1044
• Citation: 829 F.3d 1317,119 U.S.P.Q.2d 1301
• Parties: WBIP, LLC, Plaintiff-Cross-Appellant, v. Kohler Co., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

829 F.3d 1317
119 U.S.P.Q.2d 1301

WBIP, LLC, Plaintiff-Cross-Appellant
v.
Kohler Co., Defendant-Appellant.

2015-1038
2015-1044

United States Court of Appeals, Federal Circuit.

Decided: July 19, 2016

David Andrew Simons, K&L Gates LLP, Boston, MA, argued for plaintiff-cross-appellant. Also represented by Andrea B. Reed; Michael E. Zeliger, Palo Alto, CA.

E. Joshua Rosenkranz, Orrick, Herrington & Sutcliffe LLP, New York, NY, argued for defendant-appellant. Also represented by Rachel Wainer Apter ; Brian Philip Goldman, San Francisco, CA; Katherine M. Kopp, T. Vann Pearce, Jr., Eric Shumsky, Washington, DC;

829 F.3d 1324

Steven M. Bauer, William David Dalsen, Safraz Ishmael, Proskauer Rose LLP, Boston, MA.

Before Moore, O'Malley, and Chen, Circuit Judges.

Moore, Circuit Judge.

Kohler Co. appeals from the United States District Court for the District of Massachusetts' denial of judgment as a matter of law that claims 1–6, 8, and 10–12 of U.S. Patent No. 7,314,044 and claims 26 and 28 of U.S. Patent No. 7,832,196 (collectively “asserted claims”) would have been obvious and lack sufficient written description and the determination that Kohler willfully infringed the asserted claims. WBIP, LLC cross-appeals the court's denial of its post-trial motion for a permanent injunction. We affirm the court's denial of judgment as a matter of law on all issues raised by Kohler and its willful infringement determination, vacate the court's denial of WBIP's motion for a permanent injunction, and remand for further consideration.

Background

Westerbeke Corporation¹ and Kohler are competitors who manufacture and sell marine generators (“gen-sets”) that are used on houseboats to create electrical power for appliances such as refrigerators and air conditioners. Gen-sets have two main parts, an engine and a generator. The exhaust from a typical engine in a gen-set, like any gasoline-powered engine, contains carbon monoxide, which can cause asphyxiation at certain concentrations. Carbon monoxide is particularly dangerous on boats, where the living quarters are confined in close proximity to the engine. Prior to the invention of the patents in suit, the exhaust pipes of prior art marine gen-sets were vented out of the boat into a safe location to reduce potential exposure to carbon monoxide. In the early 2000s, the National Institute for Occupational Safety and Health (“NIOSH”) investigated concerns about carbon-monoxide-related poisonings and deaths on houseboats. NIOSH found that, for houseboats with gen-sets that discharged exhaust around the swim platform, carbon monoxide levels in the swim area were at or above levels that are immediately dangerous to life and health.

The '044 and '196 patents, which claim priority to 2003 and have similar specifications, are directed to marine engine exhaust systems that reduce the amount of carbon monoxide released in the exhaust. See '044 patent at Abstract, 1:13–14, 1:47–58, 2:12–30. The Background sections of the patents discuss the use of chemical catalysts as “[s]ome of the most effective and cost-efficient emissions controls” and discuss that it was generally known that these catalysts work better at higher temperatures. Id. at 1:21–27. They note that most of the development work for exhaust catalysts focused on catalytic converters in automotive applications. But they explain that marine gen-sets are subject to different regulations than automotive engines, including regulations for emissions and safety. Id. at 1:27–32. One such regulation requires that exposed engine and exhaust system surface temperatures be kept low to reduce fire hazard potential. Id . at 1:32–35. The specifications explain that typical marine engines inject seawater into exhaust flows to cool exhaust gases and frequently circulate seawater through exhaust system components to keep surface temperatures low. Id . at 1:35–39.

829 F.3d 1325

Claim 1 of the '044 patent is representative of the asserted claims, and recites:

1. A marine engine comprising:

[A] an exhaust system including

[B] a catalyst cooled by a flow of coolant , [C] the catalyst arranged to intercept a flow of exhaust;

[D] a coolant injector that injects coolant into the flow of exhaust at a point downstream of the catalyst ; and

[E] a sensor arranged to sense a characteristic of the flow of exhaust; and

[F] an engine controller configured to control an air/fuel ratio of the engine as a function of the sensed exhaust flow characteristic;

[G] wherein the engine controller is also configured to govern engine speed with respect to a constant speed while maintaining the air/fuel ratio.

'044 patent, 7:4–17 (emphases and bracketed letters added).

Westerbeke makes a low–carbon monoxide gen-set (“Safe-CO”) that incorporates the technology of the patents in suit. It introduced the Safe-CO gen-sets at a boat show in 2004. Two Kohler employees visited Westerbeke's trailer at that show and asked how the low carbon monoxide levels were achieved. Westerbeke explained the technology to them and in particular how the Safe-CO gen-set used a catalyst and electronic fuel injection. About one year later, Kohler launched its own low–carbon monoxide gen-sets.

The '044 and '196 patents issued in 2008 and 2010, respectively. In 2011, WBIP, the assignee of the patents in suit, sued Kohler for patent infringement, asserting that Kohler's low–carbon monoxide gen-sets infringed the asserted claims. Following a six-day trial in May 2013, a jury ruled in favor of WBIP, finding that Kohler infringed all the asserted claims and that Kohler had failed to prove that any of the asserted claims were invalid either for obviousness or for lack of written description. The jury also set a reasonable royalty rate, calculated a damages award of $9,641,206, and found that WBIP had proven by clear and convincing evidence that Kohler's infringement was willful. After the jury verdict, WBIP moved for a permanent injunction. The district court denied the motion. It also denied Kohler's renewed motion for judgment as a matter of law that the asserted claims were invalid for obviousness and for lack of written description. The district court granted Kohler remittitur, reducing the damages from $9,641,206 to $3,775,418. It granted WBIP's motion for enhanced damages under 35 U.S.C. § 284. It applied the factors from Read Corp. v. Portec, Inc. , 970 F.2d 816 (Fed. Cir. 1992), and concluded it was appropriate to enhance the damages by 50%. It found the case exceptional under 35 U.S.C. § 285 on account of Kohler's willful infringement and awarded reasonable attorney fees to WBIP. It denied WBIP's motion to reconsider the denial of a permanent injunction. Kohler appeals; WBIP cross-appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

Discussion

We review a district court's denial of judgment as a matter of law under the law of the regional circuit. Marine Polymer Techs., Inc. v. HemCon, Inc. , 672 F.3d 1350, 1357 (Fed. Cir. 2012). The First Circuit reviews such denials de novo, explaining “a jury's verdict must be upheld unless the facts and inferences, viewed in the light most favorable to the verdict, point so strongly and overwhelmingly in favor of the movant that a reasonable jury could not have reached the verdict.” Id. at 1357–58 (quoting Astro-Med, Inc. v. Nihon Kohden Am., Inc. , 591 F.3d 1, 13 (1st Cir. 2009) ).

829 F.3d 1326

I. Obviousness

Obviousness is a question of law based on underlying facts. Kinetic Concepts, Inc. v. Smith & Nephew, Inc. , 688 F.3d 1342, 1360 (Fed. Cir. 2012). When reviewing a denial of judgment as a matter of law of obviousness, where there is a black box jury verdict, as is the case here, we presume the jury resolved underlying factual disputes in favor of the verdict winner and leave those presumed findings undisturbed if supported by substantial evidence. Spectralytics, Inc. v. Cordis Corp. , 649 F.3d 1336, 1342 (Fed. Cir. 2011). We then examine the legal conclusion de novo in light of those facts. Id.

Kohler argues that the district court erred in refusing to grant it judgment as a matter of law that the asserted claims would have been obvious in light of U.S. Patent No. 5,832,896 (“Phipps”) and standard elements that would have been known to an ordinarily skilled artisan.² It also argues that WBIP's objective evidence of nonobviousness cannot overcome the prima facie case and that WBIP failed to establish a nexus between the objective evidence and the merits of the claimed invention. We disagree on both points.

A. Obviousness and Motivation to Modify

Kohler argues, and WBIP does not dispute, that Phipps teaches every element of claim 1 of the '044 patent except elements [B] and [D] (identified above). And it is not disputed that these elements [B] and [D] existed in other prior art. Citing KSR, Kohler argues that because each of the elements was known in the prior art, the question is whether a skilled artisan starting with Phipps would have found it obvious to add the conventional coolant features to Phipps to produce the claimed invention. At trial, Kohler presented evidence that a skilled artisan could do so if asked. See, e.g. , J.A. 15,858 (“Basically, one of ordinary skill, if they had [Phipps'] system and they were asked to apply that to—in a marine...