After district court ruling, Dane had two issues with claim construction that didn't go its way, one having to do with the definition of a "brake controller", and the other related to "locking means". The CAFC sorted it out (05-1056).

The district court had properly locked onto "locking means". As to the brake controller, the district court improperly read into the construction a limitation that wasn't there.

One of ordinary skill in the art would appreciate that “dynamic braking” describes generally a form of braking in which the current in the armature is reversed to create a negative torque and thereby brake the motor. It does not call for the direction of the physical rotation of the armature to change. Indeed, there is nothing in the patent’s claim language or written description to suggest that the controller itself must directly command the motor to physically rotate in the opposite direction.

Dane is correct in its identification that “the physical rotation of the motor and the force that drives the motor—the torque—are distinct phenomena that may operate in opposite directions at the same time.” As explained above, the claim limitation does not require the controller to command the motor to physically rotate in the opposite direction.

Given the arguably ambiguous language of the district court’s claim construction, the parties also dispute whether the court did in fact read a physical rotation limitation into its claim construction. The imposition of such a limitation is evident by the court’s infringement analysis.

Thus Dane dodged the bullet of entirely losing the case

The more interesting part of the ruling was assignor estoppel.

In its cross appeal, Ameritek asserts that the district court erred in finding Ameritek was precluded from challenging the validity of the ‘379 and ‘694 patents under the doctrine of assignor estoppel. “Assignor estoppel is an equitable doctrine that prevents one who has assigned the rights to a patent (or patent application) from later contending that what was assigned is a nullity.” Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220, 1224 (Fed. Cir. 1988). “Thus, an assignor and parties in privity with the assignor are estopped or barred from asserting invalidity defenses.” Pandrol USA, LP v. Airboss Ry. Prods., Inc., No. 04-1069, 2005 WL 2264918, at *5 (Fed. Cir. 2005) (citing Diamond Scientific, 848 F.2d at 1224). Mere employment is insufficient to establish privity. However, a company may be in privity with an assignor if the company avails itself of the assignor’s knowledge and assistance to conduct the infringement. Intel Corp. v U.S. Int’l Trade Comm’n, 946 F.2d 821, 839 (Fed. Cir. 1991).

There is no dispute that 1) Stephan Dominguez (“Dominguez”) was an inventor of the claimed subject matter; 2) Dominguez assigned the ‘379 and ‘694 patents to Dane; 3) Ameritek was formed to compete directly with Dane; and 4) Dominguez joined Ameritek as its sole employee within two months of its inception. Additionally, Dominguez was hired specifically to design and develop a cart retriever machine to compete with Dane. His direct involvement in Ameritek led to the alleged infringement, as Ameritek clearly availed itself of his knowledge and assistance to conduct the alleged infringement. Accordingly, we cannot say the district court abused its discretion in finding that Ameritek was estopped from challenging the validity of the ‘379 and ‘694 patents.

Ameritek argues that the doctrine of assignor estoppel should not be applied here for equitable purposes. Its premise lies in the argument that Dane should not be permitted to hide behind the doctrine of assignor estoppel when it, through its president Dan Johnson, engaged in inequitable conduct during the prosecution of the ‘379 and ‘694 patents after the invention had been assigned. Ameritek contends that under these facts, there is no unfairness in holding Dane accountable and application of assignor estoppel is unwarranted.

This argument is not properly before us for review. Ameritek did not plead unenforceability in its counterclaims; rather, it pled invalidity based on 35 U.S.C. §§ 102, 103. Ameritek did seek leave to amend its pleadings to add a counterclaim for unenforceability; however, the district court did not rule on this motion and the motion became moot in view of the judgment before us on review. Accordingly, we do not reach the issue of whether this case warrants formulation and application of an exception to the doctrine of assignor estoppel.

So, because Ameritek didn't timely plead unenforceability, we miss the soap opera of hearing about "Dirty" Dan Johnson and his "inequitable conduct during the prosecution of the ‘379 and ‘694 patents after the invention had been assigned". But the case was remanded for further proceedings, so stay tuned for the next episode.