March 28, 2008
Agrizap's 5,949,636 claims an electrocution rat killer. As CAFC Judge Moore rhapsodized:
When the hapless pest makes contact with a high voltage electrode and a reference electrode, its body creates a leakage current that completes an electric circuit and triggers a generator. The generator then produces a voltage and current of sufficiently high magnitude to send the pest towards its demise.
Over the '636 product Rat Zapper, pest control distributor Woodstream and Agrizap dramatized a theatre of irony: Woodstream played the rat, and sent the patent pest to its demise.
Agrizap v. Woodstream (CAFC 2007-1145, -1421)
Woodstream approached Agrizap about marketing Rat Zapper. They negotiated, under a mutual confidentiality agreement, from April to September 2000.
In July 2000, Woodstream surreptitiously inquired with Chinese manufacturers about making the product. Agrizap found out the next month. Woodstream ignored repeated inquires from Agrizap about respecting the confidentiality agreement.
At trial, Woodstream admitted that its vice president had not actually read the confidentiality agreement. An internal Woodstream document produced at that time revealed: "We are going through Agrizap in the short term to give Woodstream access to the technology."
But the two came to agreement, with Agrizap providing Woodstream with product for distribution through Home Depot, Ace Hardware, and Lowe's.
Agrizap agreed not to compete with Woodstream in these venues. Accordingly, from 2000-2003, Agrizap delivered 11,100 units of the Rat Zappers with the Victor label to Woodstream for a total of $226,000.
Then Woodstream came out with its products: Electronic Mouse Trap (EMT) in 2003, and Electronic Rat Trap (ERT) in 2004.
Agrizap felt aggrieved.
Agrizap claims that Woodstream purposely withheld information that it was using the Rat Zapper technology to develop its ERT. Further, Agrizap asserts that, had it known Woodstream's intentions to enter the market with a competing product, it would not have agreed to a distribution arrangement with Woodstream. Agrizap claims that, as a result of its reliance on Woodstream's statements, it suffered damages. But for Woodstream's misrepresentation, Agrizap would not have given Woodstream exclusive access to certain large retailers in the market, i.e., Home Depot and Ace Hardware, which allowed Woodstream to establish itself in those markets years earlier than it could have otherwise.
Agrizap successfully sued Woodstream for fraud and patent infringement, garnering a jury award to $1.3 million on fraudulent misrepresentation, and $1.4 million for infringement.
Under Pennsylvania law, the elements of a fraudulent misrepresentation claim are: (1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance. Gibbs v. Ernst, 647 A.2d 882, 889 (Pa. 1994). Woodstream has failed to persuade us that anything less than sufficient evidence supports the jury verdict.
The award amount was considered to have been "not unreasonable."
An award of damages is not precluded simply because of some uncertainty as to the precise amount of damages incurred. Id. at 1257. Woodstream, as the wrongdoer, bears the risk of that uncertainty.
On appealing the obviousness of '636, the CAFC traipses just a bit from its standard Cyborg de novo Gestapo shtick, not even mentioning Cyborg.
We review the underpinning facts of a jury verdict of nonobviousness for substantial evidence, according due deference to the jury, as always, in its role as the factfinder. See Structural Rubber Prods. Co. v. Park Rubber Co., 749 F.2d 707, 719 (Fed. Cir. 1984). Our review of the facts, regardless of whether they are explicit or implicit within the verdict, is bound by this high level of deference. See LNP Eng'g Plastics, Inc. v. Miller Waste Mills, Inc., 275 F.3d 1347, 1353 (Fed. Cir. 2001). Thus, even when the jury is given an essentially black box verdict form--that is, a form that merely asks the jury to answer "yes" or "no" as to whether a claim is obvious, such as was done in this case3--we presume all factual disputes were resolved in favor of the verdict. See Jurgens v. McKasy, 927 F.2d 1552, 1557 (Fed. Cir. 1991).
However, as the ultimate conclusion of obviousness is a question of law, it remains our duty as the appellate court to ensure that the law has been correctly applied to the facts. Structural Rubber Prods., 749 F.2d at 719. In other words, we review de novo the conclusion on obviousness. Though we are fully cognizant of the hindsight bias that often plagues determinations of obviousness, Graham v. John Deere Co., 383 U.S. 1, 36 (1966), we are also mindful that "[t]he combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results," KSR Int'l Co. v. Teleflex Inc., 127 S. Ct. 1727, 1739 (2007).
Woodstream put up the exact same art that the examiner had allowed the patent over. But that was before Obzilla started living in the spare bedroom, chewing up patents like peanut brittle.
Certainly, the PTO's rejection in light of this identical prior art is by no means dispositive of the issues that need to be resolved to determine the validity of the asserted claims. The PTO was never presented with the objective evidence of nonobviousness, including the commercial success of the Rat Zapper, copying by Woodstream, and a long felt need in the market for electronic rat traps, which was presented to the jury. Even when we presume the jury found that the objective evidence of nonobviousness favored Agrizap, this evidence is insufficient to overcome the overwhelming strength of Woodstream's prima facie case of obviousness.
This is a textbook case of when the asserted claims involve a combination of familiar elements according to known methods that does no more than yield predictable results. KSR, 127 S. Ct. at 1739.
The type of switch used in the prior art was different, but it went to solving the same problem.
In this case, the objective evidence of nonobviousness simply cannot overcome such a strong prima facie case of obviousness. Similarly, in Leapfrog Enterprises, Inc. v. Fisher-Price, Inc. we held that the objective considerations of nonobviousness presented in that case, including substantial evidence of commercial success, praise, and long-felt need, were inadequate to overcome a strong showing of primary considerations that rendered the claims at issue invalid. 485 F.3d 1157, 1162 (Fed. Cir. 2007).
Woodstream committed fraud over a dead patent: a rat zapping a rat zapper patent.
Posted by Patent Hawk at March 28, 2008 4:13 PM | Prior Art
Previously, I argued, along with my mentor, that the mere selection of elements ... with no new function or unpredictable result is an obvious use of common sense, and thus not patentable. Hal Milton & Patrick Anderson, The KSR Standard for Obviousness, 89 JPTOS 615, 630 (2007). Is this the beginning of an addendum to that standard, adding that applicants in this position will have trouble overcoming obviousness rejections with secondary considerations?
Posted by: Reading at March 30, 2008 6:54 PM
So much for a better "rat trap." May be Justice Breyer would be willing to offer up his "raccoon invention" for review by Judge Moore for obviousness under 35 USC 103.
Posted by: EG at April 1, 2008 4:27 AM