Everlight prevails against Nichia at CAFC in LED case

Everlight brought a declaratory judgment suit against
Nichia seeking a determination of non-infringement,
invalidity, or unenforceability of U.S. Patent Nos.
5,998,925 (the ’925 patent) and 7,531,960 (the ’960 patent)
(together, the Patents-in-Suit). Nichia filed counterclaims
for infringement against Everlight.
(...)
Following the trials, Nichia moved for judgment as a matter
of law (JMOL) of validity and/or a new trial, which the
district court denied, holding that substantial evidence
supported the jury verdict of invalidity. See Everlight
Elecs. Co. v. Nichia Corp., No. 12-cv-11758, 2016 WL
8232553, at *1 (E.D. Mi. Jan. 19, 2016); J.A. 34−35 (Final
Judgment). Nichia appeals this ruling. Everlight cross
appeals the ruling of no inequitable conduct. We have
jurisdiction pursuant to 28 U.S.C. § 1295(a)(1). Because
the jury verdict is supported by substantial evidence, and
because the district court did not err in denying Everlight’s
inequitable conduct claim, we affirm on all
grounds



The technical area:


Both Patents-in-Suit are directed to the combination
of a blue light-emitting diode (LED) and a blue-to-yellow
phosphor—a chemical which absorbs one color of light and
emits another—to produce a white LED.



All elements of the claims in question were known in the art.
Of motivation to combine:


As to motivation to combine, the district court noted
that evidence was presented to the jury that (1) there was
a large market demand for white LEDs; (2) the gallium
nitride blue LED was a revolutionary breakthrough which
was necessary to the development of a white LED;
(3) testimony from both parties indicated that the invention
of the blue LED naturally led to the use of a blue-toyellow
phosphor to produce a white LED; (4) there were a
limited number of blue-to-yellow phosphors; and
(5) YAG’s properties were well-known to skilled artisans
at the time of the alleged invention. Id. at *10. Thus, the
district court found that a reasonable jury could have
concluded that the alleged invention was no more than
the “combination of familiar elements according to known
methods” to “yield predictable results.” Id. (citing KSR
Int’l Co. v. Teleflex Inc., 550 U.S. 398, 416 (2007)).



Simultaneous invention arose:


Furthermore, the court noted,
Everlight had presented substantial evidence of simultaneous
invention of the alleged invention by Osram, a
competitor of Nichia. Everlight, 2016 WL 8232553, at
*12−13 (citing Geo. M. Martin Co. v. All. Mach. Sys. Int’l
LLC, 618 F.3d 1294, 1305 (Fed. Cir. 2010)). Thus, a
reasonable jury could have found that secondary considerations
did not weigh in favor of nonobviousness.
(..,)
For example, the jury heard evidence of independent
development by Osram of a white LED “within weeks
of Nichia.” Id. at *12; see J.A. 17817−19, 20353−55.
Furthermore, the jury heard evidence undermining
whether Nichia’s evidence of commercial success and
contemporary praise were actually due to the claimed
invention and whether Nichia’s expert was unbiased. See
Everlight, 2016 WL 8232553, at *12−13; see also J.A.
18019, 21808, 22447−49 (awards and licenses that cover
products beyond the inventions in the Patents-in-Suit).



Nichia's arguments on the '925:


Nichia argues before this court that a person of ordinary
skill would not have been motivated to combine a
blue LED with a YAG phosphor because (1) the disclosure
of blue LEDs in the prior art focused on a so-called “threecolor”
solution in which multiple phosphors produced a
combination of red, green, and blue light to achieve white
light rather than the “two-color” solution of the ’925
patent (i.e. blue + yellow), Appellant’s Br. 30−33; (2) a
person of ordinary skill would not have recognized useful
properties of YAG phosphors such as moisture resistance,
id. at 30−33, 47−48; and (3) the prior art discouraged use
of YAG with a blue light source because of poor color
rendering, id. at 43−47. We disagree on all points.




The CAFC did not accept these arguments:


First, it is not necessary that the prior art teach a
two-color solution in order for the jury verdict to be supported
by substantial evidence.3 It is sufficient that the
prior art recognize that blue LEDs can be combined with
phosphors to produce varying light profiles,4 that combi
nation with a blue-to-yellow phosphor would yield white
light, and that a strong market demand existed for a
white LED. See Everlight, 2016 WL 8232553, at *9 (“[I]t
was known that blue LEDs could be combined with phosphors
to change the color of light emitted by the LED.”
(citing trial exhibits and transcript)), id. (“[I]t has been
known for over 300 years that mixing blue and yellow
light results in white light (citing trial transcript)), id. at
*10 (“[It was an] undisputed fact that there was a large
market demand for white LEDs. . . . Nichia’s expert
conceded [that] the development of a commercially viable
blue LED ‘gave everyone the inventive to move forward to
create a simple blue plus yellow LED that emits white
light.’” (quoting trial transcript))



Footnote 4 begins: We recognize that Everlight’s expert made arguably
inaccurate statements at trial regarding whether Baretz
and Tadatsu disclose a blue-to-yellow phosphor.

Of the '960 patent, The ’960 patent is directed to a similar LED/phosphor
system as the ’925 patent without the YAG phosphor
limitation. Instead, the ’960 patent teaches that the
phosphor is concentrated near the surface.

As to inequitable conduct:


Everlight argued before the district court that statements
in the ’960 patent specification submitted to the
U.S. Patent and Trademark Office (USPTO) that the
inventors achieved an LED with peak wavelengths “near
600 nm” were intentionally false. J.A. 60–61. The district
court held that Everlight had not shown but-for materiality
because it had not sufficiently questioned the inventors
to establish a record that their statements to the USPTO
were actually false. Everlight, 143 F. Supp. 3d at 658−59.
The district court additionally concluded that Everlight
had not shown specific intent to deceive the USPTO
because the single most reasonable inference to be drawn
from the evidence was that “the inventors should have
been more careful in keeping a record of this information
and documenting their findings.” Id. at 662 (emphasis in
original).
(...)
See Therasense., 649 F.3d at 1290 (“In
a case involving nondisclosure of information, clear and
convincing evidence must show that the applicant made a
deliberate decision to withhold a known material reference.”)
(emphasis in original). Because we agree that the
requisite showing of specific intent is lacking, we need not
reach the issue of but-for materiality. See id. (“To prevail
on a claim of inequitable conduct, the accused infringer
must prove that the patentee acted with the specific
intent to deceive the PTO.”).