ABT/University of Central Florida lose patent case at the CAFC
The case involves a patent assigned to the University of Central Florida and licensed
This is a patent case. The University of Central Florida
(“University”) is the assignee of U.S. Patent No.
5,547,017 (“the ’017 patent”), titled “Air Distribution Fan
Recycling Control.” The patent is licensed to ABT Systems,
LLC (“ABT”). ABT and the University sued Emerson
Electric Co. (“Emerson”) and three other defendants
in the United States District Court for the Northern
District of Illinois for infringement of claims 1–5 of the
’017 patent. Eventually, the case was transferred to the
United States District Court for the Eastern District of
Missouri and proceeded to trial before a jury against
Emerson alone after its three co-defendants settled.
Following trial, the jury found the asserted claims not
invalid by reason of obviousness and infringed by Emerson’s
“Big Blue” thermostats. Based on a royalty rate of
$2.25 per unit, the jury awarded damages in the amount
of $311,379 on sales of 138,891 thermostats. ABT Sys.,
LLC v. Emerson Elec. Co., No. 4:11-cv-00374-AGF, 2013
WL 5567713, at *2 (E.D. Mo. Oct. 9, 2013).
The outcome was adverse to the University of Central Florida:
For the reasons set forth below, we hold that the district
court erred in denying Emerson’s motion for JMOL of
invalidity. We therefore reverse the judgment of noninvalidity,
vacate the judgment of infringement, and
remand the case to the district court for dismissal of the
complaint. In view of this disposition, it is not necessary
for us to address ABT’s appeal, which is rendered moot.
As to legal standards:
The standard for reviewing the grant or denial of
JMOL is not unique to patent law; the law of the regional
circuit therefore applies. Finisar Corp. v. DirecTV Grp.,
Inc., 523 F.3d 1323, 1328 (Fed. Cir. 2008). The Eighth
Circuit has instructed that decisions on motions for JMOL
are to be reviewed de novo, using the same standard that
the trial court applied. Penford Corp. v. Nat’l Union Fire
Ins. Co., 662 F.3d 497, 503 (8th Cir. 2011). JMOL against
a party on an issue is appropriate if “the court finds that a
reasonable jury would not have a legally sufficient evidentiary
basis to find for the party on that issue.” Fed. R.
Civ. P. 50(a). In deciding a JMOL motion, “all reasonable
inferences [are to be drawn] in favor of the nonmoving
party without making credibility assessments or weighing
the evidence.” Penford, 662 F.3d at 503 (quoting Phillips
v. Collings, 256 F.3d 843, 847 (8th Cir. 2001)).
Emerson invoked KSR:
Citing KSR International Co. v. Teleflex Inc., 550 U.S.
398, 416–17 (2007), Emerson argues that claims 1–5 of
the ’017 patent would have been obvious because they
represent a “combination of familiar elements according
to known methods” that does no more than “yield predictable
results.” As it did in the district court, Emerson
focuses on the “recycle control” limitation in the last
paragraph of claim 1, since the parties agree that the
other limitations of claim 1, as well as the added limitations
of claims 2–5, were known in the prior art. In that
regard, Emerson contends that Mr. Rudd admitted at
trial that the motivation for “recycle control,” as well as
the means for implementing “recycle control,” were known
in the art. Emerson states that Mr. Rudd admitted that a
pause immediately following the end of a cooling cycle is
necessary to prevent moisture from blowing back into the
system. Emerson also states that Mr. Rudd conceded that
having a fan run periodically after the end of a cooling
cycle would necessarily save energy when compared to
running a fan continuously in a “constant fan mode.”
As to details of arguments:
Rather than mounting a strong challenge to the merits
of Emerson’s theory of obviousness based on the disclosures
of the prior art references, ABT takes the position
that Emerson’s argument is flawed because the references
upon which it relies are either non-enabled or teach away.
ABT first contends that Nakatsuno and Cornelius are
non-enabling and, therefore, cannot be fully factored into
the obviousness analysis.
As to the jury verdict:
Recognizing that nonobviousness was determined by a
jury, we assign due deference to the jury’s verdict.
“examine the [ultimate] legal conclusion [of nonobviousness]
de novo to see whether it is correct in light of the
presumed jury fact findings.” Id. at 1357 (quoting
Jurgens, 927 F.2d at 1557) (second alteration added). In
recreating the facts as they may have been found by the
jury, and in applying the Graham factors, “we assess the
record evidence in the light most favorable to the verdict
winner.” Richardson-Vicks, Inc. v. Upjohn Co., 122 F.3d
1476, 1479 (Fed. Cir. 1997).
In view of the undisputed facts, as well as those that
are presumed to have been resolved by the jury in ABT’s
favor, the issue of obviousness thus turns on whether, at
the time of the Rudd invention, a person of ordinary skill
would have combined elements from the several prior art
references. Specifically, the question is whether a person
of skill would have combined references that disclose
“single-shot” fan operation as a function of the time when
heating or cooling cycles end with references that teach
periodic fan cycles during periods of time when there is no
call for heating or cooling.
In KSR, the Supreme Court instructed that “when a
patent claims a structure already known in the prior art
that is altered by the mere substitution of one element for
another known in the field, the combination must do more
than yield a predictable result.” 550 U.S. at 416. The
Court stated that “[i]f a person of ordinary skill can
implement a predictable variation [of a prior art reference
with other prior art components], § 103 likely bars its
patentability.” Id. at 417. Here, the timer of Vogelzang
or Cornelius, modified by the predetermined and compressor-dependent
interval of Nakatsuno or Petrone,
would have yielded a predictable result: the system fan
would activate periodically following the end of a heating
or cooling cycle—the invention claimed in the ’017 patent.
It is well settled that, even where references do not
explicitly convey a motivation to combine, “any need or
problem known in the field of endeavor at the time of
invention and addressed by the patent can provide a
reason for combining the elements in the manner
claimed.” Id. at 420. We have made clear that “a
court . . . may find a motivation to combine prior art
references in the nature of the problem to be solved.”
Ruiz v. A.B. Chance Co., 357 F.3d 1270, 1276 (Fed. Cir.
2004). As pertinent here, “this form of motivation to
combine evidence is particularly relevant with simpler
mechanical technologies.” Id.; see also Pro-Mold & Tool
Co., Inc. v. Great Lakes Plastics, Inc., 75 F.3d 1568, 1573
(Fed. Cir. 1996).
In our view, if, at the time of the invention claimed in
the ’017 patent, a person of ordinary skill had looked at
Vogelzang, he or she would have found it nearly obvious
from that disclosure itself to set the periodic fan to run as
a function of when the heating or cooling cycle ended.
That is because the nature of the problem to be solved in
both the ’017 patent and Vogelzang (as well as Cornelius
and Nakatsuno) is to alleviate air stagnation during
periods of no heating or cooling.
Obvious as a matter of law:
In sum, even assuming that the jury correctly resolved
pertinent factual disputes in favor of ABT, the
prior art still renders the claims of the ’017 patent obvious
as a matter of law. See Boston Sci. Scimed, Inc. v. Cordis
Corp., 554 F.3d 982, 990 (Fed. Cir. 2009) (“When we
consider that, even in light of a jury’s findings of fact, the
references demonstrate an invention to have been obvious,
we may reverse its obviousness determination.”);
Richardson-Vicks, 122 F.3d at 1479 (a jury verdict “does
not mean that we are free to abdicate our role as the
ultimate decision maker on the question of obviousness.
That decision remains within our province”). Here, all of
the claimed limitations are expressly found in the cited
prior art references. At the same time, the motivation or
rationale for combining those references can be found in
the nature of the problem addressed, if not directly from
the disclosures of the references themselves. Finally,
ABT’s argument based upon secondary considerations of
nonobviousness is not supported by the record. Thus, we
hold that claims 1–5 of the ’017 patent are invalid as a
matter of law by reason of obviousness.