United States Court of Appeals for the Federal Circuit
2007-1288, -1321
ZENITH ELECTRONICS CORPORATION,
Plaintiff-Appellant,
v.
PDI COMMUNICATION SYSTEMS, INC.,
Defendant-Cross Appellant.
Robert E. Browne, Neal Gerber & Eisenberg LLP, of Chicago, Illinois, argued for
plaintiff-appellant. With him on the brief were Michael A. Carrillo, Thomas C.
McDonough, William J. Lenz, and Hillary A. Mann.
Gregory F. Ahrens, Wood, Herron & Evans, L.L.P, of Cincinnati, Ohio, argued for
defendant-appellee. With him on the brief was John P. Davis.
Appealed from: United States District Court for the Northern District of Illinois
Senior Judge William T. Hart
United States Court of Appeals for the Federal Circuit
2007-1288, -1321
ZENITH ELECTRONICS CORPORATION,
Plaintiff-Appellant,
v.
PDI COMMUNICATION SYSTEMS, INC.,
Defendant-Cross Appellant.
Appeal from the United States District Court for the Northern District of Illinois in case
no. 04-CV-4796, Senior Judge William T. Hart.
_________________________
DECIDED: April 16, 2008
_________________________
Before NEWMAN, LOURIE, and SCHALL, Circuit Judges.
SCHALL, Circuit Judge.
This is a patent infringement case. Two patents are at issue: United States
Patent No. 5,495,301 (the “’301 patent”) and United States Patent No. 5,502,513 (the
“’513 patent”). Both patents are owned by Zenith Electronics Corporation (“Zenith”).
The ’301 and ’513 patents generally relate to televisions and wired remote control
devices used in hospital rooms.
Zenith appeals from the final judgment of the United States District Court for the
Northern District of Illinois in favor of PDI Communications Systems, Inc. (“PDI”) in
Zenith’s suit against PDI for infringement of the ’301 and ’513 patents. The district court
entered judgment in favor of PDI after granting summary judgment of (1) invalidity of
claim 1 of the ’301 patent and claim 1 of the ’513 patent by reason of anticipation; (2)
noninfringement of the ’301 patent; and (3) noninfringement of claim 1 of the ’513
patent. Zenith Elecs. Corp. v. PDI Commc’n Sys., Inc., No. 04-C-4796, slip op. at 1
(N.D. Ill. Mar. 21, 2007) (“Order Entering Judgment”); Zenith Elecs. Corp. v. PDI
Commc’n Sys., Inc., No. 04-C-4796, slip op. at 39–40 (N.D. Ill. Jan. 18, 2007)
(“Summary Judgment Order”). For its part, PDI cross-appeals the district court’s (1)
dismissal without prejudice of PDI’s counterclaim of inequitable conduct with respect to
the ’301 patent and claim 1 of the ’513 patent and (2) dismissal with prejudice of PDI’s
counterclaim of inequitable conduct with respect to claims 2–8 of the ’513 patent. Order
Entering Judgment at 2; Summary Judgment Order at 39–40. PDI also cross-appeals
the district court’s denial of its motion for costs. Zenith Elecs. Corp. v. PDI Commc’n
Sys., Inc., No. 04-C-4796 (N.D. Ill. Mar. 28, 2007).
For the reasons set forth below, we affirm the district court’s (1) grant of
summary judgment of invalidity of claim 1 of the ’301 patent; (2) grant of summary
judgment of noninfringement of the ’301 patent; and (3) dismissal with prejudice of PDI’s
counterclaim of inequitable conduct with respect to claims 2–8 of the ’513 patent.
However, we vacate the district court’s (1) grant of summary judgment of invalidity of
claim 1 of the ’513 patent; (2) grant of summary judgment of noninfringement of claim 1
of the ’513 patent; (3) dismissal without prejudice of PDI’s counterclaim of inequitable
conduct with respect to the ’301 patent and claim 1 of the ’513 patent; and (4) denial of
PDI’s motion for costs. As far as these matters are concerned, we remand the case to
2007-1288, -1321 2
the district court for further proceedings. In sum, we affirm-in-part, vacate-in-part, and
remand.
BACKGROUND
I.
Due to various safety and business considerations, wireless remote control
devices are not used to control televisions in hospital rooms. First, the electrostatic
discharge associated with wireless remote controls cannot be risked near supplies of
oxygen. Second, the signals transmitted by wireless remote controls are susceptible to
interference from fluorescent lights. Finally, there are increased costs associated with
battery replacement and lost wireless remote controls. For these reasons, hospital
televisions are typically controlled using hardwired remote control devices placed near
the patient. These devices also include internal speakers by which television audio is
delivered to the patient and, thus, are interchangeably referred to as “pillow speakers.”
By the late 1980s, pillow speakers were generally connected to televisions in
hospital rooms via three wires. Over these three wires (1) power was supplied to the
pillow speaker, (2) audio signals were transmitted to the pillow speaker, and (3) control
signals were transmitted to the television. However, control functionality was limited
due to the fact that existing systems utilized analog control signals. The invention of the
patents-in-suit enabled the transmission of encoded digital control signals from the
pillow speaker to the television receiver over the existing three-wire interfaces installed
in hospital rooms. Advantageously, the improved digital pillow speakers—like their
analog precursors—continued to receive power from the television and did not require
2007-1288, -1321 3
an internal source of power (i.e., a battery). Claim 1, which is representative of the
method claims of the ’301 patent, provides:
1. A method of operating a television receiver wired to a remote housing
including a speaker and a multi function control signal encoder
comprising:
supplying operating power to said multi function control signal
encoder from the television receiver over first and second wires;
supplying audio signals to said speaker from said television
receiver over said first wire and a third wire; and
supplying encoded control signals from said multi function encoder
to said television receiver over said first and second wires.
Claim 1 of the ‘513 patent, which is representative of the method claims of that patent,
provides:
1. A method of controlling a television receiver in response to a key
closure or data pulses received from a remote location over a pair of
wires, the key closure having a substantially longer duration than the data
pulses, comprising:
receiving said key closure and said data pulses;
decoding said data pulses with a microprocessor programmed to
ignore said key closure;
detecting said key closure with a timing circuit; and
operating key closure identification circuitry in response to said
timing circuit.
II.
By 1997, three companies—Curbell Electronics (“Curbell”), MedTek, Inc.
(“MedTek”), and Crest Electronics (“Crest”)—manufactured and distributed digital pillow
speakers pursuant to licenses of the ’301 patent obtained from Zenith. The pillow
speakers were specifically designed to operate Zenith televisions using Zenith control
codes.
2007-1288, -1321 4
In 2003, PDI began marketing a new 20-inch LCD television (model no.
“P20LCD”) for use in the healthcare industry. PDI designed the P20LCD television for
compatibility with digital pillow speakers that used Zenith control codes—i.e., the digital
pillow speakers manufactured by Curbell, MedTek, and Crest. On July 21, 2004, Zenith
filed a complaint against PDI in the United States District Court for the Northern District
of Illinois, alleging infringement of claims 1–4 of the ’301 patent 1 and claims 1–8 of the
’513 patent. Zenith maintained that PDI directly infringes by testing and operating its
P20LCD televisions with pillow speakers and that PDI indirectly infringes by supplying
P20LCD televisions and encouraging its customers to operate the televisions using
pillow speakers. In addition to pursuing affirmative defenses, PDI counterclaimed for a
declaration that the ’301 and ’513 patents are invalid due to anticipation, unenforceable
because of inequitable conduct, and not infringed by the P20LCD.
III.
After the close of discovery, both parties filed motions for summary judgment.
Zenith moved for summary judgment that (1) claim 1 of the ’301 patent and claim 1 of
the ’513 patent are infringed and that (2) Zenith did not commit inequitable conduct
during prosecution of the ’301 and ’513 patents. Zenith asserted that there was no
genuine issue of material fact that the P20LCD television, when used in combination
with a digital pillow speaker, performs every step of claim 1 of the ’301 patent and claim
1 of the ’513 patent. Zenith also urged that, under the evidence presented, PDI could
not possibly meet its burden of establishing inequitable conduct.
1
Claims 1–4 of the ’301 patent relate to the method of operating a
television with a pillow speaker. Claims 5–11 of the ’301 patent are directed to a “pillow
speaker remote control.” Claims 5–11 of the ’301 patent are not at issue in this case.
Summary Judgment Order at 35 n.9.
2007-1288, -1321 5
PDI cross-moved for summary judgment that (1) claim 1 of the ’301 patent and
claim 1 of the ’513 patent are invalid due to anticipation and that (2) claims 1–4 of the
’301 patent are not infringed. With respect to validity, PDI argued that there was no
genuine issue of material fact that claim 1 of the ’301 patent and claim 1 of the ’513
patent were anticipated by the public use of a television (model no. “J20525”)
manufactured by Radio Corporation of America (“RCA”) in combination with a digital
pillow speaker (model no. “205-E”) manufactured by Curbell prior to December 27,
1993—the critical date corresponding to both patents. PDI also argued that, under the
undisputed facts, the implied license and exhaustion defenses precluded Zenith’s
claims that the use of pillow speakers manufactured by Curbell, MedTek, and Crest—in
conjunction with P20LCD televisions—infringes the ’301 patent.
Subsequently, Zenith moved to disqualify PDI’s technical expert, Willliam
Mengel, and to strike the April 6, 2006, declaration of Mr. Mengel used by PDI to
support its summary judgment motion. Zenith complained that Mr. Mengel’s deposition
testimony, expert reports, and declaration contained certain factual errors and incorrect
statements of law. Zenith further argued that Mr. Mengel’s declaration added new
testimony, improperly supplementing his prior reports in an untimely manner.
The district court issued its Summary Judgment Order on January 18, 2007. The
court denied—at least for purposes of summary judgment—Zenith’s motion to disqualify
Mr. Mengel as a technical expert and to strike his declaration. Summary Judgment
Order at 20. On the issue of validity, the court held that PDI was entitled to summary
judgment that claim 1 of the ’301 patent and claim 1 of the ’513 patent were anticipated
by the public use of the J20525/205-E combination prior to the critical date. Id. at 8–18.
2007-1288, -1321 6
On infringement, the court cited our decision in LG Electronics, Inc. v. Bizcom
Electronics, Inc., 453 F.3d 1364 (Fed. Cir. 2006), for the proposition that the doctrine of
exhaustion does not apply to method claims, and thus, the court concluded that PDI
could not establish an exhaustion defense with respect to the asserted method claims
(claims 1–4 of the ‘301 patent). Summary Judgment Order at 24–26. Nevertheless, the
court held that PDI was entitled to summary judgment of noninfringement of the ’301
patent due to the existence of an implied license. The implied license, the court
determined, was based upon the express licenses between Zenith and the pillow
speaker manufacturers. Id. at 26–36. Finally, the court dismissed with prejudice PDI’s
counterclaim that claims 2–8 of the ’513 patent are unenforceable due to inequitable
conduct, finding that PDI had made no attempt to demonstrate the materiality of conduct
during prosecution with respect to the limitations of those claims. Id. at 36–37. The
court dismissed without prejudice PDI’s counterclaim of inequitable conduct with respect
to the ’301 patent and claim 1 of the ’513 patent as moot in light of its rulings on validity
and infringement. 2 Id. at 37.
DISCUSSION
We have jurisdiction over Zenith’s appeal pursuant to 28 U.S.C. § 1295(a)(1).
“We review the grant of summary judgment de novo, drawing all reasonable inferences
in favor of the non-moving party.” Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313,
1323 (Fed. Cir. 2002) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).
Summary judgment is only appropriate if there are no genuine issues of material fact
2
The district court’s summary judgment rulings on validity, infringement,
and inequitable conduct left in place Zenith’s claims that PDI infringed claims 2–8 of the
’513 patent. Subsequently, Zenith agreed to the dismissal without prejudice of its
claims of infringement of those claims.
2007-1288, -1321 7
and the movant is entitled to judgment as a matter of law. SRI Int’l v. Matsushita Elec.
Corp., 775 F.2d 1107, 1116 (Fed. Cir. 1985) (en banc).
Zenith appeals various aspects of the district court’s Summary Judgment Order.
We address each of Zenith’s contentions in turn, beginning with those relating to the
’301 patent.
I.
A.
Zenith first argues that the district court erred in granting summary judgment that
claim 1 of the ’301 patent is invalid as anticipated by the public use of the RCA J20525
television in combination with the Curbell 205-E digital pillow speaker prior to the
patent’s critical date. As a preliminary matter, Zenith contends that the district court
erred in construing the term “operating power” that appears in claim 1, and that the
J20525/205-E combination did not meet the “operating power” limitation as properly
construed.
Claim 1 requires that the invention’s multi-function control signal encoder—the
integrated circuit within the pillow speaker responsible for encoding and transmitting the
digital control signals—receive “operating power” from the television receiver. The
district court concluded that the J20525/205-E combination satisfied the plain meaning
of the “operating power” limitation because “[t]he source of all the power being supplied
to the 205E was the J20525.” Summary Judgment Order at 11.
On appeal, Zenith argues that the district court misconstrued the term “operating
power.” Zenith contends that the RCA J20525 television was incapable of supplying
“operating power” to the Curbell 205-E pillow speaker. That is because the J20525
2007-1288, -1321 8
television could supply a maximum of 0.48 milliamperes (mA) of current, while the
encoder chip in the 205-E pillow speaker required at least 5 mA to operate. According
to Zenith, Curbell surmounted this obstacle by incorporating into the design of the 205-E
a large capacitor—essentially a storage tank that slowly accumulated electrical charge
received from the television and that, in turn, provided the charge to the encoder chip as
required. Zenith thus maintains that, while the J20525 television may have supplied
“power” to the 205-E pillow speaker, it did not provide “operating power.” Instead, Zenith
argues that “operating power” was supplied by the pillow speaker’s capacitor, which
functioned like a battery.
PDI responds that the district court’s construction of “operating power” was
correct. According to PDI, the J20525 television necessarily supplied “operating power”
to the 205-E pillow speaker because it was undisputed that the J20525 television was
the only source of power for the 205-E pillow speaker. Any power supplied to the pillow
speaker by the capacitor was first supplied to the capacitor by the television. Thus, PDI
contends, the “power” used to “operate” the 205-E pillow speaker was supplied by the
J20525 television—exactly as claim 1 requires.
We agree with the district court and PDI. Nothing in the patent’s claims or written
description suggests a departure from the disputed term’s ordinary meaning: an amount
of power that is sufficient to enable the operation of the multi-function control signal
encoder. Nor has Zenith pointed to anything contrary in the patent’s prosecution
history. Like the district court, we can find no requirement “that the operating power
must come directly from the television or in full and continuous strength from the
television.” Id. at 11.
2007-1288, -1321 9
Zenith points out a portion of the specification that states: “A current source is
defined through resistor 40 and must be sufficient to accommodate the worst case
scenario of power requirements of encoder 12.” ’301 patent col.4 ll.7–9. We note,
however, that resistor 40 is a component of the pillow speaker, not the television
receiver. Id. Fig. 1A. Thus, the statement at column 4, lines 7–9 does not signify that
the television receiver must directly and continuously supply enough current to meet the
encoder’s maximum power requirements. Indeed, the specification expressly teaches
that a capacitor in the pillow speaker supplements to some degree the current received
from the television receiver during periods of peak power draw. Id. col.4 ll.19–23. We
therefore agree with the district court’s conclusion that the J20525/205-E combination
anticipated the “operating power” limitation recited in claim 1 of the ’301 patent.
B.
Next, Zenith argues that, even if the J20525 television provided “operating
power” to the 205-E pillow speaker, PDI did not otherwise meet its burden of proving the
elements of public use on summary judgment. Specifically, Zenith contends that PDI
was not entitled to summary judgment that claim 1 of the ’301 patent is invalid because
PDI did not provide clear and convincing evidence (1) that the J20525 television and
205-E pillow speaker were used together prior to the critical date, (2) that the alleged
use of the J20525/205-E was a public use, and (3) that the alleged use of the
J20525/205-E was enabling. According to PDI, summary judgment of invalidity was
proper because there was no genuine issue of material fact with respect to those
issues.
2007-1288, -1321 10
“A person shall be entitled to a patent unless . . . the invention was . . . in public
use or on sale in this country, more than one year prior to the date of the application for
patent in the United States.” 35 U.S.C. § 102(b) (2000). Determining whether a patent
claim is invalid for prior public use under section 102(b) requires comparing the claim to
the alleged public use. “Section 102(b) may bar patentability by anticipation if the
device used in public includes every limitation of the later claimed invention . . . .”
Netscape Commc’ns Corp. v. Konrad, 295 F.3d 1315, 1321 (Fed. Cir. 2002) (citations
omitted). Contrary to Zenith’s arguments, however, we note that the public use itself
need not be enabling. See In re Epstein, 32 F.3d 1559, 1568 (Fed. Cir. 1994) (“Beyond
this ‘in public use or on sale’ finding, there is no requirement for an enablement-type
inquiry.”). Rather, we must simply determine whether the public use related to a device
that embodied the invention. See J.A. LaPorte, Inc. v. Norfolk Dredging Co., 787 F.2d
1577, 1583 (Fed. Cir. 1986) (“[O]ur precedent holds that the question is not whether the
sale, even a third party sale, ‘discloses’ the invention at the time of the sale, but whether
the sale relates to a device that embodies the invention.” (emphasis in original)).
Anticipation is a question of fact. Gen. Elec. Co. v. Nintendo Co., Ltd., 179 F.3d
1350, 1353 (Fed. Cir. 1999). Anticipation may be resolved on summary judgment if
there is no genuine issue of material fact. Trintec Indus., Inc. v. Top-U.S.A. Corp., 295
F.3d 1292, 1294 (Fed. Cir. 2002). In reviewing summary judgment of invalidity for
anticipation, we determine de novo whether the evidence in the record raises a genuine
issue of material fact. Telemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316,
1327 (Fed. Cir. 2001). Summary judgment is proper if no reasonable jury could find that
the patent is not anticipated. Id. Upon review of the record before us, we agree with
2007-1288, -1321 11
the district court’s determination that there is no disputed issue of material fact; we
further conclude that no reasonable juror could find claim 1 of the ’301 patent not
anticipated by the public use of the J20525/205-E combination prior to the critical date.
First, we conclude that there is no genuine issue of material fact with respect to
whether the J20525 television and 205-E pillow speaker were publicly used together
prior to the critical date. PDI’s expert, William Mengel, was employed at RCA
(and its successor company) from 1964 until his retirement in 2003. 3 From 1981 to
1992, he was responsible for defining the features and attributes, and coordinating the
design and engineering, of RCA’s commercial healthcare televisions—including the
J20525 television. Mr. Mengel stated that the J20525 television was first introduced into
the market in 1989. According to Mr. Mengel, Curbell developed the 205-E pillow
speaker, based upon technical information that he provided, specifically for use with the
J20525 television. Finally, Mr. Mengel stated that the 205-E pillow speaker was
3
We do not think that the district court abused its discretion in denying
Zenith’s motion to exclude Mr. Mengel as a technical expert and to strike his
declaration. The district court noted Zenith’s concerns with respect to Mr. Mengel’s
testimony, but stated:
On summary judgment, this court will not give credence to the legal aspect
of mixed conclusions of fact and law that are based on incorrect legal
standards. The court, however, can do that on a fact-by-fact basis as
necessary without the wholesale throwing out of all of Mengel’s
testimony. . . . Moreover, there is no reason to throw out Mengel’s
testimony about technical matters. Unless his technical testimony is
improperly conclusive or shown to be inconsistent with the underlying
evidence, it will be accepted.
Summary Judgment Opinion at 20. With respect to Mr. Mengel’s technical
qualifications, the court noted that he is a senior member of the Institute of Electrical
and Electronics Engineers, and that he had worked in the electronics industry for 39
years. Id. at 19 n.4. The court thus found no basis for disqualifying Mr. Mengel as a
technical expert. Id. at 19–20. We do not think that the district court’s actions with
respect to Mr. Mengel’s expert reports, declaration, and deposition testimony constitute
an abuse of discretion.
2007-1288, -1321 12
developed prior to 1991, and was on sale and being publicly used together with the
J20525 television well before the December 27, 1993 critical date.
Importantly, Mr. Mengel’s statements are corroborated by testimony from other
witnesses, documentary evidence, and Zenith’s own admissions. See Finnigan Corp. v.
Int’l Trade Comm’n, 180 F.3d 1354, 1367–70 (Fed. Cir. 1999) (requiring corroboration of
witness’s testimony that his prior public use of the claimed invention was anticipatory).
Two Curbell employees closely involved in the development of the 205-E pillow
speaker, Michael Chimiak and Wesley Wakefield, confirmed that it was introduced to
the market prior to December 27, 1993. 4 In addition, the record contains a product
literature sheet describing features of the Curbell 205-E pillow speaker and stating that
it controls RCA J20525 televisions. Based upon the Curbell address printed on the
sheet, Douglas Rockwood, 5 Curbell’s General Manager, testified that it must have dated
from 1992 or earlier. Further, in its motion for summary judgment before the district
court, Zenith itself stated that “[d]iscovery has shown that at the time of the invention—
early 1994—the ‘RCA system’ using the Curbell 205E pillow speaker without batteries
had been recalled from the market.” Zenith also stated that “the super capacitor was
removed from the 205E and replaced by batteries in about 1992, less than one year
after it was introduced.”
4
Zenith complains that Mr. Chimiak and Mr. Wakefield had great difficulty
recalling the dates in dispute. However, Mr. Wakefield testified that he was “quite
certain” that a capacitor version of the pillow speaker existed as a product when he
became a master technician in late 1991/early 1992. Mr. Chimiak’s testimony, though
somewhat more equivocal, confirms that general timeframe.
5
Zenith itself characterizes Mr. Wakefield and Mr. Rockwood as
“disinterested” witnesses.
2007-1288, -1321 13
Although Zenith contests much of PDI’s evidence of public use, we find that
Zenith’s arguments do not establish a genuine issue of material fact on that issue.
Specifically, Zenith cites a 1998 Curbell product manual, which stated that “the RCA
Model J20531BL [which was introduced long after the J20525] is the only set capable of
powering the Digital Pillow Speaker [without the need for batteries].” However, Mr.
Rockwood testified that the Digital Pillow Speaker referred to in the 1998 Curbell
product manual was a separate pillow speaker (model “DPS”) that was introduced after
the 205-E in 1995. With respect to the product literature sheet, Zenith complains that
Mr. Rockwood was unable to state with certainty whether the sheet described the
capacitor version of the 205-E pillow speaker or Curbell’s subsequently developed
battery-powered version. Even so, the product literature sheet and Mr. Rockwood’s
testimony support the conclusion that the capacitor version of the 205-E pillow
speaker—a precursor to the battery version—was available for use with the J20525
television at least as early as 1992. We thus conclude that there was no genuine issue
of material fact with respect to whether the Curbell 205-E pillow speaker was used
publicly with the RCA J20525 television prior to the critical date of the ’301 patent.
Next we must consider whether the J20525/205-E combination anticipates each
limitation of claim 1 of the ’301 patent. We conclude that it does. Claim 1 requires the
steps of (1) supplying operating power to the pillow speaker’s encoder, (2) supplying
audio signals to the pillow speaker, and (3) supplying encoded control signals to the
television receiver. 6 Based on his review of schematics and testing that he performed,
6
The operating power and encoded control signals must be supplied over
“first and second wires.” ’301 patent claim 1. The audio signals must be supplied over
a “first wire and a third wire.” Id.
2007-1288, -1321 14
Mr. Mengel stated—in his first expert report and subsequent declaration—that the
J20525/205-E performed each of these three steps. Mr. Wakefield stated the same in
his deposition testimony.
Accompanying its cross-motion for summary judgment of invalidity, PDI
submitted a “Statement of Material Facts as to which PDI contends there is no genuine
issue,” which was required by Local Rule 56.1(a)(3) (“Rule 56.1 Statement”). 7 Citing
Mr. Mengel’s declaration, PDI alleged in paragraphs 18–20 that the J20525 television
supplied operating power to the 205-E pillow speaker over a first and second wire (¶
18), that the J20525 television supplied audio signals to an internal speaker in the
205-E pillow speaker via a first and third wire (¶ 19), and that the encoder in the 205-E
pillow speaker supplied encoded control signals to the J20525 television over the first
and second wires (¶ 20). PDI summarized in paragraph 21: “The RCA J20525
television and the Curbell 205-E pillow speaker performed each step of claim 1 of the
’301 patent.”
With respect to paragraphs 19 and 20, Zenith’s only objections were that PDI did
not reference a specific time period. That is, Zenith only objected to paragraphs 19 and
20 inasmuch as Zenith disputed the fact that the J20525 television and 205-E pillow
speaker were used together prior to the critical date. Because—as discussed above—
the district court correctly concluded that there was no genuine issue of material fact
with respect to whether the J20525 television and 205-E pillow speaker were used in
7
Local Rule 56.1(a)(3) provides: “With each motion for summary judgment
filed pursuant to Fed.R.Civ.P. 56 the moving party shall serve and file . . . a statement of
material facts as to which the moving party contends there is no genuine issue and that
entitle the moving party to a judgment as a matter of law . . . .” Available at
http://www.ilnd.uscourts.gov/home/LocalRules.aspx?rtab=localrule (last accessed
March 10, 2008).
2007-1288, -1321 15
combination prior to the critical date, the district court was justified in deeming the
allegations in paragraphs 19 and 20 established. 8 That is, the district court properly
considered it undisputed that the J20525 television supplied audio signals to the 205-E
pillow speaker, and that the 205-E pillow speaker supplied encoded control signals to
the J20525 television. Summary Judgment Order at 12–13.
With respect to paragraph 18, Zenith did complain that PDI had not met its
burden of proving that the J20525 television supplied “operating power” to the 205-E
pillow speaker. However, the focus of Zenith’s objection—as evidenced by its
accompanying memorandum—was that PDI had incorrectly construed the “operating
power” limitation. It explained: “While Zenith concedes that the RCA television receiver
may supply some amount of ‘power’ to the pillow speaker, it is not capable, on its own,
of supplying enough power to operate the encoder and therefore cannot possibly be
considered ‘operating power.’ If it was enough, then the function of the super capacitor
would be rendered moot. Indeed, the only ‘operating power’ that is ever supplied to the
encoder in the 205-E pillow speaker is supplied by this super capacitor, not the
television receiver . . . .”
As explained above, we disagree with Zenith’s construction of “operating power.”
Power that originates at the television and that is sufficient to enable the operation of
the encoder is “operating power” according to claim 1, though it may be temporarily
stored in a capacitor. Zenith concedes that all power temporarily stored in the capacitor
of the 205-E pillow speaker is ultimately supplied by the J20525 television; indeed, it
8
Pursuant to Local Rule 56.1(b)(3)(C), “[a]ll material facts set forth in the
statement required of the moving party will be deemed to be admitted unless
controverted by the statement of the opposing party.”
2007-1288, -1321 16
has never maintained otherwise. Thus, we discern no genuine issue of material fact
with respect to whether the J20525/205-E combination satisfied the “operating power”
limitation of claim 1, properly construed.
No genuine issue having been raised with respect to the required factual
elements of proof, we conclude that the district court properly granted summary
judgment that claim 1 of the ’301 patent is invalid as anticipated by the public use of the
J20525 television in combination with the 205-E pillow speaker prior to the critical date.
II.
Next, we consider the district court’s grant of summary judgment that the ’301
patent is not infringed due to the existence of an implied license. The implied license
defense is typically presented “when a patentee or its licensee sells an article and the
question is whether the sale carries with it a license to engage in conduct that would
infringe the patent owner's rights.” Jacobs v. Nintendo of Am., Inc., 370 F.3d 1097,
1100 (Fed. Cir. 2004). In that setting, this court has set forth two requirements for the
grant of an implied license. Met-Coil Sys. Corp. v. Korners Unlimited, Inc., 803 F.2d
684, 686 (Fed. Cir. 1986). “First, the equipment involved must have no noninfringing
uses.” Id. (citing Bandag, Inc. v. Al Bolser’s Tire Stores, Inc., 750 F.2d 903, 924 (Fed.
Cir. 1984)). “If there is no noninfringing use, it may be reasonable to infer that there has
been ‘a relinquishment of the patent monopoly with respect to the article sold.’” Jacobs,
370 F.3d at 1100 (citing United States v. Univis Lens Co., 316 U.S. 241, 249 (1942)).
“Second, the circumstances of the sale must ‘plainly indicate that the grant of a license
should be inferred.’” Met-Coil, 803 F.2d at 686 (quoting Bandag, 750 F.2d at 925).
2007-1288, -1321 17
The district court held that purchasers of pillow speakers manufactured by
Curbell, MedTek, and Crest obtain an implied license under the ’301 patent to use the
pillow speakers in combination with any compatible television—not just Zenith
televisions. Summary Judgment Order at 27–37. The court first determined that Zenith
had failed to rebut PDI’s prima facie showing that the pillow speakers are not capable of
noninfringing uses. Id. at 29–30. Because there are no uses of the pillow speakers that
do not infringe the ’301 patent, the court reasoned that customers purchasing the pillow
speakers must obtain some form of implied license. Id. In order to determine the scope
of that implied license, the court examined the express licenses between Zenith and the
pillow speaker manufacturers. Id. at 30. Noting the lack of any binding restrictions in
the express licenses, the court concluded that “[t]he [express] license agreements can
only be construed as permitting sale of the pillow speakers for use with any compatible
television, Zenith or not. Therefore, PDI did not infringe the ’301 Patent by being
involved in the manufacture, sale, or distribution of televisions that would work with the
licensees’ pillow speakers.” Id. at 36.
On appeal, Zenith challenges both aspects of the district court’s ruling. First,
Zenith contends that the district court improperly shifted the burden onto Zenith to
establish the absence of noninfringing uses. Regardless, Zenith argues that the record
actually did reflect evidence of noninfringing uses, including use of the pillow speakers
to control non-television devices such as nurse-call systems, lighting systems, and FM
radios. PDI responds that these pillow speaker functions are not “noninfringing uses”
that would negate an implied license, but rather are “merely additional uses that
complement the otherwise infringing uses.”
2007-1288, -1321 18
Although the parties place a great deal of emphasis on whether the pillow
speakers manufactured by Curbell, MedTek, and Crest are capable of noninfringing
uses, that question is irrelevant in the context of this case. To be sure, establishing the
absence of noninfringing uses is a prerequisite in the typical implied license case, where
the question is whether a license is implied “by virtue of a sale of nonpatented
equipment used to practice a patented invention.” Met-Coil, 803 F.2d at 686 (emphasis
added). Here, however, the license is not merely implied by virtue of the sale of pillow
speakers by Curbell, MedTek, and Crest. Instead, the implied license that customers
obtain to use the pillow speakers according to the method of the ’301 patent is derived
from the express licenses between Zenith and those manufacturers.
In that regard, this case is similar to Jacobs. There, Nintendo of America, Inc.
(“Nintendo”) manufactured and sold tilt-sensitive video game controllers using
accelerometers purchased from Analog Devices, Inc. (“Analog”). Jacobs, 370 F.3d at
1098. The patent owner, Jordan Jacobs, sued Nintendo, claiming that Nintendo’s
controllers infringed his patented “Manually Held Tilt Sensitive Non-Joystick Control
Box.” Id. On appeal, we affirmed the district court’s grant of summary judgment that
Jacobs was barred from suing Nintendo for infringement of the patent based on the
existence of an implied license. Id. at 1102. We determined that Nintendo obtained an
implied license to practice Jacobs’ patent. The implied license was derived from an
express license between Jacobs and Analog that specifically authorized Analog to sell
the accelerometers for infringing uses. Id. at 1100. We concluded that “the question
whether there is any noninfringing use for Analog’s accelerometers [was] irrelevant” in
2007-1288, -1321 19
that context because “[t]he Jacobs-Analog agreement . . . specifically authorized the
sale of those accelerometers for infringing uses.” Id.
Likewise, the license agreements in this case between Zenith and the pillow
speaker manufacturers specifically authorize the sale of pillow speakers for infringing
uses. All three agreements include essentially the same grant of patent rights:
ARTICLE 1 – GRANT
1. Zenith agrees to grant and does hereby grant to LICENSEE a non-
exclusive license to make, have made, use, sell or otherwise dispose of
LICENSED APPARATUS under the LICENSED PATENT, and foreign
counterparts thereof, if any. The term LICENSED APPARATUS, as used
in this Agreement, means:
A. Any pillow speaker unit:
i.) the manufacture, use or sale of which pillow speaker
unit is covered by the LICENSED PATENT, and
ii.) which pillow speaker unit is manufactured, sold or
otherwise disposed of by LICENSEE, whether such
LICENSED APPARATUS is sold or otherwise
disposed of as a separate article of commerce or as
part of a television system.
(emphasis added). 9 The agreements further define the “INTELLECTUAL PROPERTY
LICENSED” as “U.S. patent 5,495,301.” It is clear from these express agreements that
Zenith granted the manufacturers a license to make and sell any pillow speaker unit the
use of which would otherwise infringe the ’301 patent. As was the case in Jacobs, there
is thus no reason to determine whether there are noninfringing uses for the pillow
speakers.
9
The Curbell license uses the plural term “LICENSED PATENTS” in Article
1. Like the licenses with the other two manufacturers, however, it enumerates only the
’301 patent as “INTELLECTUAL PROPERTY LICENSED.” In addition, the Curbell
license uses the term “remote control unit” in subparts i.) and ii.) instead of “pillow
speaker unit.”
2007-1288, -1321 20
Next, Zenith challenges the district court’s conclusion with respect to the scope of
the implied license. According to Zenith, the implied license obtained by customers of
Curbell, MedTek, and Crest extends only to their use of the pillow speakers in
combination with Zenith televisions. Zenith specifically urges that the parties’ mutual
intent upon entering the agreements was that they would apply only to the use of pillow
speakers with Zenith televisions. As evidence of that intent, Zenith points to (1) the fact
that the pillow speakers were designed to communicate using control codes specific to
Zenith televisions, (2) certain “whereas” recitals referencing Zenith televisions in the
preamble sections of the license agreements, and (3) statements by agents of two of
the manufacturers to the effect that they understood the license agreements as being
directed to the use of the pillow speakers with Zenith televisions. According to PDI,
however, the district court correctly determined that the implied license extends to use
of the pillow speakers in combination with any compatible television, since the granting
clause in the license agreements contains no binding restrictions.
We agree with the district court and PDI. As discussed above, the license
agreements broadly grant Curbell, MedTek, and Crest authorization to “make, have
made, use, sell or otherwise dispose of . . . any pillow speaker unit . . . the manufacture,
use or sale of which pillow speaker unit is covered by the [’301 patent].” No restrictions
are placed upon the grants. For example, the agreements could have required the
manufacturers to label each pillow speaker with a disclaimer informing purchasers that
they are only licensed to use the pillow speakers with Zenith televisions. Compare LG
Elecs., 453 F.3d at 1370 (finding a conditional sale where the license “expressly
disclaim[ed] granting a license allowing computer system manufacturers to combine
2007-1288, -1321 21
Intel’s licensed parts with other non-Intel components” and the license “required Intel to
notify its customers of the limited scope of the license”), with Anton/Bauer, Inc. v. PAG,
Ltd., 329 F.3d 1343, 1351 (Fed. Cir. 2003) (finding an unrestricted sale where “there is
no evidence that [the patentee] places express restrictions on the use of the female
plates it sells or that it requires that manufacturers to whom it sells female plates
expressly restrict the grant of a license upon sale of the finished camera product that
incorporates the plate.”).
Here, the license agreements between Zenith and the pillow speaker
manufacturers achieve a clear, broad grant of patent rights. There are no restrictions
embodied in the operative, binding provisions of the agreements. In that context, we do
not think that Zenith’s evidence of intent is limiting. Cf. Hewlett-Packard Co. v. Repeat-
O-Type Stencil Mfg. Corp., Inc., 123 F.3d 1445, 1453 (Fed. Cir. 1997) (With respect to
repair rights, finding that “a seller’s intent, unless embodied in an enforceable contract,
does not create a limitation on the right of a purchaser to use, sell, or modify a patented
product as long as a reconstruction of the patented combination is avoided. A
noncontractual intention is simply the seller’s hope or wish, rather than an enforceable
restriction.”).
In sum, we affirm the district court’s grant of summary judgment that the ’301
patent is not infringed due to the existence of an implied license. 10 We agree with the
district court that customers who purchase pillow speakers from Curbell, MedTek, and
Crest obtain an implied license to use those pillow speakers in combination with any
10
In light of our ruling in favor of PDI on its implied license defense, we do
not reach the issue of exhaustion, which was presented in PDI’s brief as “an alternative
basis for this Court to affirm the district court’s finding of no infringement by PDI of
claims 1–4 of the ’301 patent.”
2007-1288, -1321 22
compatible television—not just Zenith televisions. That implied license is derived from
the express licenses in place between Zenith and the manufacturers.
III.
We now turn to the ’513 patent. The district court granted PDI’s cross-motion for
summary judgment that claim 1 of the ’513 patent is invalid as anticipated by the public
use of the J20525 television prior to the critical date. Summary Judgment Order at 13–
21. In reaching that conclusion, the court focused solely on whether the J20525
television satisfied the “programmed to ignore” limitation of claim 1. The court stated:
“Zenith does not specifically point to any other element of Claim 1 that it contends was
not anticipated by the J20525. Therefore, this is the only element that need be
considered regarding anticipation.” Id. at 13 (citations omitted). We do not agree.
It is true that a party opposing summary judgment “must . . . set out specific facts
showing a genuine issue for trial.” Fed. R. Civ. P. 56(e)(2). However, that is only true
where the movant’s “motion for summary judgment is properly made and supported”—
i.e., where the movant has otherwise established entitlement to judgment as a matter of
law. Id. “A non-movant need not always provide affidavits or other evidence to defeat a
summary judgment motion. If, for example, the movant bears the burden and its motion
fails to satisfy that burden, the non-movant is ‘not required to come forward’ with
opposing evidence.” Saab Cars USA, Inc. v. United States, 434 F.3d 1359, 1368 (Fed.
Cir. 2006) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 160 (1970) (citing the
advisory committee’s note to Federal Rule of Civil Procedure 56(e))).
Here, PDI did not establish that it is entitled to judgment as a matter of law that
claim 1 of the ’513 patent is invalid as anticipated by the J20525 television. PDI
2007-1288, -1321 23
provided no evidence whatsoever that the J20525 television satisfies the final two
limitations of claim 1: “detecting said key closure with a timing circuit” and “operating
key closure identification circuitry in response to said timing circuit.” Instead, with
respect to those limitations, PDI merely argued that “to the extent the [allegedly
infringing] PDI P20LCD is considered to practice them, then so did the RCA J20525
television.” Mem. in Supp. of PDI’s Cross-mot. for Summ. J. of Noninfringement and
Invalidity at 24; see also Oral Arg. at 24:55–28:30, available at
http://www.cafc.uscourts.gov/oralarguments/mp3/2007-1288.mp3.
Regardless of whether PDI’s statement is correct, anticipation cannot be proved
by merely establishing that one “practices the prior art.” In Tate Access Floors, Inc. v.
Interface Architectural Resources, Inc., 279 F.3d 1357 (Fed. Cir. 2002), we explained
that the defense of noninfringement cannot be proved by comparing an accused
product to the prior art:
Our law requires patent challengers to prove invalidity by clear and
convincing evidence. Where an accused infringer is clearly practicing only
that which was in the prior art, and nothing more, and the patentee's
proffered construction reads on the accused device, meeting this burden
of proof should not prove difficult. Nevertheless, accused infringers are
not free to flout the requirement of proving invalidity by clear and
convincing evidence by asserting a “practicing prior art” defense to literal
infringement under the less stringent preponderance of the evidence
standard.
Id. at 1367. Likewise, mere proof that the prior art is identical, in all material respects, to
an allegedly infringing product cannot constitute clear and convincing evidence of
invalidity. Anticipation requires a showing that each element of the claim at issue,
properly construed, is found in a single prior art reference. “[I]t is the presence of the
prior art and its relationship to the claim language that matters for invalidity.” Id. Here,
there has been no such showing. PDI has provided no proof that the final two
2007-1288, -1321 24
limitations of claim 1 are anticipated by the J20525 television. Thus, we vacate the
district court’s grant of summary judgment that claim 1 of the ’513 patent is invalid as
anticipated by the J20525 television.
On remand, the district court, in addition, should consider the parties’ respective
arguments as to how the term “programmed to ignore” should be construed. On
summary judgment, the court did not construe “programmed to ignore” by way of
reference to the patent’s claims, written description, and prosecution history. Neither
did the court consider the extrinsic evidence, if any, pertinent to construing the term.
Rather, the court’s construction was “based upon Zenith’s theory of [infringement], as
well as its apparent construction of Claim 1 of the ’513 patent.” Summary Judgment
Order at 18 (emphasis added). On appeal, Zenith argues that the district court
misunderstood its actual construction of “programmed to ignore.” Zenith maintains that
the J20525 television does not meet the “programmed to ignore” limitation when that
term is properly construed according to the claim language and written description. In
response, PDI urges a different construction based upon the claim language and written
description.
Because the district court did not evaluate these claim construction arguments on
summary judgment, we decline to consider them here. See Wilson Sporting Goods Co.
v. Hillerich & Bradsby Co., 442 F.3d 1322, 1326–27 (Fed. Cir. 2006); Nazomi
Commc’ns, Inc. v. Arm Holdings, PLC, 403 F.3d 1364 (Fed. Cir. 2005). To be sure,
claim construction is a question of law that we review de novo on appeal. Cybor Corp.
v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc). Nonetheless,
“[t]his court’s review of a district court’s claim construction . . . is not an independent
2007-1288, -1321 25
analysis in the first instance.” Nazomi, 403 F.3d at 1371. “[I]n order to perform such a
review, this court must be furnished ‘sufficient findings and reasoning to permit
meaningful appellate scrutiny.’” Id. (quoting Gechter v. Davidson, 116 F.3d 1454, 1458
(Fed. Cir. 1997)). Here, we lack an adequate foundation upon which to weigh the
parties’ respective claim construction arguments. We therefore think the best course in
this case is for the district court, in the first instance, to address this claim construction
issue.
On remand, the district court should construe the “programmed to ignore”
limitation in accordance with the principles set forth in Phillips v. AWH Corp., 415 F.3d
1303 (Fed. Cir. 2005) (en banc). Next, the court should consider the extent to which
PDI has established that each limitation of claim 1 of the ’513 patent was anticipated by
the J20525 television, keeping in mind that PDI ultimately bears the burden of
establishing invalidity by clear and convincing evidence. See Tate, 279 F.3d at 1367.
IV.
Next, we consider infringement of claim 1 of the ’513 patent. At the end of its
summary judgment order, the district court stated that PDI is entitled to “a judgment
declaring that . . . it has not infringed the ’301 Patent or Claim 1 of the ’513 patent.”
Summary Judgment Order at 39–40; see also Order Entering Judgment at 1. Despite
that unequivocal language, however, it appears that the district court did not actually
conclude that claim 1 of the ’513 patent is not infringed. Nowhere in its Summary
Judgment Order did the court make findings that could form the basis for a summary
judgment of noninfringement with respect to claim 1 of the ’513 patent. The only
noninfringement arguments addressed by the district court related to PDI’s implied
2007-1288, -1321 26
license and exhaustion defenses. The district court evaluated those defenses under the
heading of “II. INFRINGEMENT OF THE ’301 PATENT CLAIMS 1–4 AFFIRMATIVE
DEFENSES.” Summary Judgment Order at 21. Further, the district court discussed
only the ’301 patent in its analysis of those defenses. After concluding that PDI had
proven the existence of an implied license, the court stated:
PDI is entitled to summary judgment dismissing, in its entirety, Zenith’s
claim that PDI infringed the ’301 Patent. PDI is also entitled to summary
judgment declaring that it did not infringe the ’301 Patent. Since
unresolved issues may remain as to claims of the ’513 Patent, no
judgment will be entered at this time.
Id. at 35 (emphasis added). Indeed, PDI did not even argue in its cross-motion for
summary judgment that the implied license defense extended to its alleged infringement
of the ’513 patent. For these reasons, we think that the district court did not, in fact,
grant summary judgment that claim 1 of the ’513 patent is not infringed. It seems more
likely that the court intended to state that Zenith’s allegation of infringement with respect
to claim 1 of the ’513 patent was dismissed in light of the court’s ruling that claim 1 is
invalid. See id. at 21 (“Since the Claim is invalid, PDI is also entitled to summary
judgment dismissing Zenith’s claim that PDI infringed Claim 1 of the ’513 Patent.”).
In any event, PDI’s implied license defense is inapplicable to infringement under
the ’513 patent for two reasons. First, the express license agreements between Zenith
and Curbell, MedTek, and Crest do not extend to the ’513 patent. As discussed above,
the agreements only authorize the manufacturers to “make, have made, use, sell or
otherwise dispose of” any pillow speaker unit “the manufacture, use or sale of which
pillow speaker unit is covered by the [’301 patent].” There is no similar grant of rights
with respect to the ’513 patent. Consequently, no implied license to practice the ’513
2007-1288, -1321 27
patent may be derived from the express license agreements between Zenith and
Curbell, MedTek, and Crest.
Nor is a license under the ‘513 patent implied by the mere purchase of pillow
speakers from those manufacturers. The ’513 patent is directed solely at the television
side of the television/pillow speaker interface. The invention claimed in the ’513 patent
enables televisions to receive and execute two types of control signals: digital control
signals (“data pulses”) and analog control signals (“key closures”). Televisions
incorporating the invention are thus compatible with both newer digital pillow
speakers—e.g., the improved pillow speakers described and claimed in the ’301
patent—and older analog pillow speakers. All of the claims of the ‘513 patent are
directed at making televisions compatible with both digital and analog pillow speakers.
With that in mind, the reason that the mere purchase of digital pillow speakers
from Curbell, MedTek, and Crest does not result in an implied license under the ’513
patent becomes apparent: those pillow speakers have non-infringing uses. Specifically,
the use of digital pillow speakers purchased from Curbell, MedTek, and Crest, in
combination with televisions that are not capable of receiving analog control signals,
would not infringe the ’513 patent, under which televisions are required to have both
digital and analog capability. The mere sale of the digital pillow speakers does not
imply a license for their use with televisions that have the additional features claimed in
the ’513 patent, as those features are unrelated to the digital pillow speakers
themselves. The digital pillow speakers are suitable for use with any television that is
capable of receiving the digital control signals that they transmit, irrespective of whether
the television is also capable of receiving analog control signals.
2007-1288, -1321 28
For these reasons, we conclude that PDI is not entitled to the implied license
defense with respect to infringement of the ’513 patent. To the extent that the district
court granted summary judgment that claim 1 of the ’513 patent is not infringed—which,
as noted, we do not think is the case—we vacate that ruling.
V.
Next, we address the issues that PDI has presented in its cross-appeal. First,
PDI cross-appeals the district court’s rulings with respect to inequitable conduct. PDI’s
inequitable conduct contentions were based upon Zenith’s failure to disclose the J20525
television to the Patent and Trademark Office (“PTO”) during prosecution of the ’301
and ’513 patents. Summary Judgment Order at 36. The district court dismissed without
prejudice PDI’s counterclaim of inequitable conduct with respect to the ’301 patent and
claim 1 of the ’513 patent as moot in light of its findings that those claims are invalid. Id.
at 37. The district court dismissed with prejudice PDI’s counterclaim of inequitable
conduct with respect to claims 2–8 of the ’513 patent, finding that PDI had failed to
argue that the J20525 television was material to those claims. Id.
On appeal, PDI asserts that its inequitable conduct counterclaim does not
become moot simply because certain claims in the ’301 and ’513 patents were found
invalid and/or not infringed. To the contrary, PDI asserts that it has an ongoing interest
in pursuing the inequitable conduct counterclaims, since (1) it will be seeking a finding
that this case is exceptional and that an award of attorneys’ fees under 35 U.S.C. § 285
is warranted and (2) it may not be entitled to the implied license defense in the future
should Zenith terminate its license agreements with Curbell, MedTek, and Crest.
Further, PDI argues that the district court erred in dismissing its inequitable conduct
2007-1288, -1321 29
counterclaim with respect to claims 2–8 of the ’513 patent. PDI contends that it did
present evidence of materiality with respect to claim 1, and it is well established that
inequitable conduct with respect to one claim of a patent renders the entire patent
unenforceable.
Zenith responds that the district court properly dismissed all of PDI’s
counterclaims for inequitable conduct. Zenith argues that our decision in Liebel-
Flarsheim Co. v. Medrad, Inc., 481 F.3d 1371 (Fed. Cir. 2007), precludes PDI from
continuing to pursue inequitable conduct with respect to claims that have been held
invalid. Further, Zenith maintains that the district court correctly dismissed inequitable
conduct with respect to claims 2–8 of the ’513 patent because PDI failed to offer any
evidence that the J20525 television was material to the prosecution of those claims.
Turning to the ’301 patent first, we affirm the district court’s determinations on
summary judgment (1) that claim 1 of the ’301 patent is invalid as anticipated and (2)
that the ’301 patent is not infringed due to the existence of an implied license. However,
we do not agree with the district court’s conclusion that those rulings moot PDI’s
counterclaim of inequitable conduct with respect to the ’301 patent. It is clear that a
finding of noninfringement does not moot a counterclaim for inequitable conduct. Fort
James Corp. v. Solo Cup Co., 412 F.3d 1340, 1348 (Fed. Cir. 2005) (“[A] counterclaim
questioning . . . enforceability of a patent raises issues beyond the initial claim for
infringement that are not disposed of by a decision of non-infringement.” (citations
omitted)). We therefore reinstate PDI’s counterclaim of inequitable conduct with respect
to the ’301 patent. On remand, PDI may challenge Zenith’s prosecution conduct with
respect to all of the claims of the ’301 patent. PDI may specifically pursue inequitable
2007-1288, -1321 30
conduct with respect to claim 1, which has been held invalid, because such a finding
would additionally render unenforceable asserted claims 2–4, which have not been held
invalid. 11
As discussed above, we vacate the district court’s determinations on summary
judgment that claim 1 of the ’513 patent is (1) invalid as anticipated and (2) not
infringed. We therefore reinstate PDI’s counterclaim of inequitable conduct with respect
to claim 1 of the ’513 patent. Nonetheless, we affirm the district court’s dismissal with
prejudice of PDI’s counterclaims of inequitable conduct with respect to claims 2–8 of the
’513 patent. PDI is correct that “when inequitable conduct occurs in relation to one
claim the entire patent is unenforceable.” Kingsdown Med. Consultants, Ltd. v. Hollister
Inc., 863 F.2d 867, 874 (Fed. Cir. 1988). However, that does not excuse PDI’s failure to
introduce evidence that the J20525 television is material to the limitations recited in
claims 2–8 of the ’513 patent. PDI remains free to pursue inequitable conduct with
respect to claim 1 of the ’513 patent, which, if established, would additionally render
claims 2–8 unenforceable. However, PDI is precluded from seeking to prove
inequitable conduct with respect to claims 2–8 themselves.
Finally, PDI cross-appeals the district court’s denial of its motion for costs. PDI
contends that the district court improperly denied its motion for costs without
explanation, contrary to Krocka v. City of Chicago, 203 F.3d 507 (7th Cir. 2000).
Further, PDI argues that it was clearly entitled to recover costs as the prevailing party
11
This case is unlike Liebel-Flarsheim, where we concluded that the
defendant Medrad’s counterclaim for inequitable conduct was moot in view of, inter alia,
our determination that all of the asserted claims were invalid. 481 F.3d at 1383. In that
setting, Medrad admitted that a ruling of unenforceability with respect to the entire
patent was not meaningful at the time. Here, asserted claims 2–4 of the ’301 patent
have not been held invalid.
2007-1288, -1321 31
because its “win may be perceived as more substantial than that of the plaintiff.” Id. On
appeal, we vacate and remand a number of the district court’s summary judgment
rulings; we are therefore in no position to opine on whether PDI should ultimately be
deemed the prevailing party for purposes of recovering costs. We agree with PDI,
however, that Seventh Circuit law requires the district court to provide some explanation
of its decision regarding costs. See id. at 518 (remanding the case to the district court
for “an explanation of the sound legal reasons supporting” its allocation of costs). PDI
may again move for costs, if appropriate, following the district court’s resolution of the
remaining issues on remand. The district court’s conclusion on that issue should be
accompanied by an explanation in accordance with Krocka.
CONCLUSION
For the foregoing reasons, we affirm the district court’s (1) grant of summary
judgment of invalidity of claim 1 of the ’301 patent; (2) grant of summary judgment of
noninfringement of the ’301 patent; and (3) dismissal with prejudice of PDI’s
counterclaim of inequitable conduct with respect to claims 2–8 of the ’513 patent.
However, we vacate the district court’s (1) grant of summary judgment of invalidity of
claim 1 of the ’513 patent; (2) grant of summary judgment of noninfringement of claim 1
of the ’513 patent; (3) dismissal without prejudice of PDI’s counterclaim of inequitable
conduct with respect to the ’301 patent and claim 1 of the ’513 patent; and (4) denial of
PDI’s motion for costs. As far as these matters are concerned, we remand the case to
the district court for further proceedings.
AFFIRMED-IN-PART, VACATED-IN-PART, and REMANDED
2007-1288, -1321 32
COSTS
No costs.
2007-1288, -1321 33
Zenith Electronics Corp. v. PDI Communication Systems, Inc.
Court: Court of Appeals for the Federal Circuit
Date filed: 2008-04-16
Citations: 522 F.3d 1348
Copy Citations