Vita-Mix v. Basic Holding (CAFC 2008-1479, -1517) precedential

The patent at issue in this appeal is directed to a method of preventing the formation of an air pocket around the moving blades of a consumer food blender. The method involves inserting a plunger into the body of the blender. The object of the plunger is to block the air channel that creates the air pocket when ingredients are blended.

The district court conducted a Markman hearing to construe several disputed claim terms. During the hearing, the court examined the prosecution history and determined that the patentee expressly disclaimed any stirring operation that breaks up or dislodges air pockets after they have begun to form, and limited the scope of the claimed invention to positioning the plunger such that it prevents air pockets from forming. The court construed claim 1 to exclude "stirring to disperse, dislodge, or break-up an air pocket after it has begun to form." The court also construed the term "plunger" as a "device that can be inserted into a blender." Basic does not dispute that its stir stick is a plunger as that term was construed by the district court.

A flurry of motion after Markman concluded with the district court granting "Basic's summary judgment motions of no direct infringement, no inducement, no contributory infringement, and no trademark infringement. The court granted Vita-Mix's summary judgment motions of no invalidity for anticipation, obviousness, or lack of enablement. The court also granted Vita-Mix's summary judgment motions of no inequitable conduct and no laches."

And so appeal from both sides.

Vita-Mix couldn't figure out to appeal the claim construction, but the CAFC took the hint.

CAFC case law rundown on prosecution disclaimer. Any disavowal must be "clear and unmistakable."

Claim construction is an issue of law. Markman v. Westview Instruments, 517 U.S. 370 (1996). Claims are properly construed without the objective of capturing or excluding the accused device. NeoMagic Corp. v. Trident Microsystems, Inc., 287 F.3d 1062, 1074 (Fed. Cir. 2002); SRI Int'l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1118 (Fed. Cir. 1985) (en banc). A patentee may, through a clear and unmistakable disavowal in the prosecution history, surrender certain claim scope to which he would otherwise have an exclusive right by virtue of the claim language. See, e.g., Purdue Pharma L.P. v. Endo Pharms. Inc., 438 F.3d 1123, 1136 (Fed. Cir. 2006) ("Under the doctrine of prosecution disclaimer, a patentee may limit the meaning of a claim term by making a clear and unmistakable disavowal of scope during prosecution.").

The finding that Vita-Mix had disclaimed all stirring was too much for the CAFC.

We agree with Vita-Mix that the district court's finding that the patentee disclaimed all stirring appears to be inconsistent with its earlier claim construction. We further agree with Vita-Mix that the earlier claim construction is correct for all the reasons articulated by the district court in its claim construction order. To find that the patentee disclaimed all stirring, regardless of whether and how the stirring acts on air pockets, ignores the nature of the distinction between a positioning that prevents air pockets from forming and an operation that breaks up air pockets after they have begun to form.

Direct Infringement

The accused product could be used in either an infringing or non-infringing manner. The district court considered the evidence of infringement slight, and so found non-infringement. The CAFC said that district court had set the bar too high.

We find that the district court erred as a matter of law in disposing of the direct infringement claims by requiring direct evidence of infringement. The court discounted the accusations against Mr. Oldroyd and Mr. Daniels because there was no testimony or footage showing actual infringement in those cases. Such evidence, however, is not required. Direct infringement can be proven by circumstantial evidence. Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261, 1272 (Fed. Cir. 1986). Dr. Swanger's testimony, accepted as true for summary judgment purposes, establishes that the accused blenders will necessarily infringe under certain circumstances. Mr. Oldroyd's testimony and the footage to Mr. Daniels's demonstration evidence the occurrence of those circumstances described by Dr. Swanger.

The district court had struck the testimony of Vita-Mix's expert as irrelevant. Not so, said the CAFC. "[E]vidence is relevant if it may assist the trier of fact in resolving a factual dispute."

We also find that the district court erred as a matter of law in striking the testimony of Dr. Traylor and thereby disposing of Vita-Mix's allegations of direct infringement by Basic's customers. Dr. Traylor's testimony need not establish the ultimate question of infringement to be relevant. See Daubert v. Merrell Dow Pharms., 509 U.S. 579, 591 (1993) (holding that evidence is relevant if it may assist the trier of fact in resolving a factual dispute); Moleculon, 793 F.2d at 1272. Dr. Traylor's testimony is relevant to the question of whether users tend to insert the stir stick into the pitcher without stirring. See Fed. R. Evid. 402 (evidence is relevant if it has any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence). Dr. Swanger testified that if the stir stick was inserted into the pitcher without stirring while the blender was on, then the accused device would necessarily infringe. Dr. Traylor presented the results of a survey indicating that Dr. Swanger's proffered conditions were present at least a small percentage of the time. It is not too great an analytical leap for the jury to consider both experts' testimonies and conclude that infringement actually occurs in at least a small percentage of customer use. The limitations of Dr. Traylor's survey may impact the persuasiveness of his testimony, but they do not render the results of the survey wholly inadmissible.

Considering the combined testimonies, sufficient issues of material fact had been raised that summary judgment was inappropriate.

We find that the combination of Mr. Oldroyd's testimony and Mr. Daniels's testimony with Dr. Swanger's testimony is circumstantial evidence that creates genuine issues of material fact regarding whether employees of Basic engaged in acts of direct infringement. We also find that the combination of Dr. Traylor's and Dr. Swanger's testimonies is circumstantial evidence that creates genuine issues of material fact regarding whether and when the accused device performs the infringing method.

That aspect of the case vacated and remanded for trial.

Contributory Infringement

The CAFC finding the possibility of direct infringement opened the matter of contributory infringement.

In order to reach the question of contributory infringement, we will adopt arguendo the opinion of Vita-Mix's expert Dr. Swanger and assume that customer use of the accused device directly infringes unless the stir stick is being used to break up air pockets or is in contact with the sides of the pitcher. See Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 341 (1961) (ruling that a defendant can be held liable for contributory infringement if its customers directly infringe).

The patent laws provide that whoever sells an apparatus for use in practicing a patented method, knowing it to be "especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial non-infringing use, shall be liable as a contributory infringer." 35 U.S.C. § 271(c) (emphases added). Contributory infringement imposes liability on one who embodies in a non-staple device the heart of a patented process and supplies the device to others to complete the process and appropriate the benefit of the patented invention. See Ricoh Co. v. Quanta Computer, Inc., 550 F.3d 1325, 1337 (Fed. Cir. 2008).

District courts have found, and we agree, that non-infringing uses are substantial when they are not unusual, far-fetched, illusory, impractical, occasional, aberrant, or experimental. Cf. Hilgraeve Corp. v. Symantec Corp., 265 F.3d 1336, 1343 (Fed. Cir. 2001) (finding inducement where the accused device was capable of non-infringing modes of operation in unusual circumstances); D.O.C.C. Inc. v. Spintech Inc., 36 USPQ2d 1145, 1155 (S.D.N.Y. 1994) ("Contributory infringement liability is not meant for situations where non-infringing uses are common as opposed to farfetched, illusory, impractical or merely experimental."); Haworth Inc. v. Herman Miller Inc., 37 USPQ2d 1080, 1089 (W.D. Mich. 1994) ("The focus is not the utility or ubiquity of the infringing configuration; the focus is the utility, presence, and efficiency of the non-infringing configurations.").

Since the accused devices are undisputedly capable of non-infringing use, the question of contributory infringement turns on whether the non-infringing use is substantial.

Vita-Max hadn't argued about non-infringing use, nor had the district court addressed it, but the CAFC took it upon itself to examine the issue.

We held in Ricoh that an infringer does not evade liability by bundling an infringing device with separate and distinct components that are capable of noninfringing use. See Ricoh, 550 F.3d at 1337. Although Basic points out that Vita-Mix has waived this argument, we will consider it properly raised for purposes of deciding the question of contributory infringement.

As there was substantial non-infringing use of the accused product, contributory infringement was nixed from the mix.

[I]n light of the evidence of record with all reasonable inferences drawn in Vita-Mix's favor, no reasonable jury could find that using the stir stick to stir - where the stirring operation breaks up air pockets or touches the side of the pitcher - is an insubstantial use of the accused device. The existence of substantial non-infringing uses for the accused blenders defeats Vita-Mix's claim for contributory infringement as a matter of law. See 35 U.S.C. § 271(c). We therefore affirm the district court's grant of summary judgment of no contributory infringement.

Inducement

Moving down the food chain of infringement to inducement, Vita-Mix caused but the slightest stir.

Reaching the question of inducement also requires adopting arguendo the opinion of Vita-Mix's expert Dr. Swanger and assuming that customer use of the accused device infringes unless it is being used to break up air pockets or is in contact with the sides of the pitcher. See C.R. Bard, Inc. v. Advanced Cardiovascular Sys., Inc., 911 F.2d 670, 673 (Fed. Cir. 1990) (ruling that a defendant can be held liable for inducement of infringement if its customers directly infringe).

Patent law provides that whoever actively induces infringement of a patent shall be liable as an infringer. 35 U.S.C. § 271(b). Inducement requires a showing that the alleged inducer knew of the patent, knowingly induced the infringing acts, and possessed a specific intent to encourage another's infringement of the patent. DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1304 (Fed. Cir. 2006) (en banc in relevant part). Intent can be shown by circumstantial evidence, but the mere knowledge of possible infringement will not suffice. Id. at 1305-06.

Vita-Mix establishes that Basic knew of the patent, and argues that Basic knew of its products' potentially infringing use, but goes no further. Indeed, the record is devoid of actual evidence establishing specific intent to encourage customers to infringe the '021 patent. Vita-Mix instead points to the product instructions and the design of the device to support an inference of intent.

The original product instructions do not evidence a specific intent to encourage infringement, since they teach a stirring action which Basic could have reasonably believed was non-infringing. The amended product instructions teach an undisputedly non-infringing use, evidencing intent to discourage infringement. Thus, Basic's product instructions provide no basis on which Vita-Mix can rely to infer specific intent to encourage infringement.²

² The dissent suggests that Vita-Mix introduced enough evidence to show that following Basic's product instructions may lead to infringing uses of the device. The question is not, however, whether a user following the instructions may end up using the device in an infringing way. Rather, it is whether Basic's instructions teach an infringing use of the device such that we are willing to infer from those instructions an affirmative intent to infringe the patent. The district court correctly found that Basic's directions do not even disputably indicate such intent.

In sum, the record is devoid of direct or circumstantial evidence that Basic intends to encourage infringement by its customers, and replete with evidence to the contrary. We therefore affirm the district court's summary judgment of no inducement.

Prior Art Invalidity

The district court was too hasty to whip invalidity out of the blend.

We find that Basic has raised a genuine issue of material fact with respect to the anticipation, obviousness, and lack of enablement sufficient to defeat Vita-Mix's motion for summary judgment of no invalidity.

Inequitable Conduct

Basic's assertion of inequitable conduct was based upon the inventor's making a statement that wasn't factually accurate.

In his deposition, Mr. Barnard explained that, regardless of whether the statement is actually false, he believed the statement to be true at the time that he made it. With no other evidence in the record, the district court correctly found that Basic made no genuine showing of deceptive intent.

Laches

Basic had a kitchen-sink affirmative defense, but only stuck with laches on appeal, to no avail.

Vita-Mix filed for summary judgment on Basic's affirmative defenses, including patent misuse, waiver, laches, estoppel, and failure to mitigate. The district court granted wholesale Vita-Mix's motion on all of the defenses listed above, "for the reasons stated in Vita-Mix's motion." Of these rulings, Basic appeals the court's judgment only with respect to its laches defense.

To prove an affirmative defense of laches, a defendant must show that (1) the plaintiff delayed for an unreasonable and inexcusable amount of time in filing suit, and (2) that the defendant was prejudiced as a result of the delay. Gasser Chair Co. v. Infanti Chair Mfg. Corp., 60 F.3d 770, 773 (Fed. Cir. 1995). A rebuttable presumption of laches arises when a patentee has delayed more than six years after actual or constructive knowledge of the defendant's alleged infringing activity. A.C. Aukerman, Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1032 (Fed. Cir. 1992); 35 U.S.C. § 286.

With respect to the first laches inquiry, Basic argues that Vita-Mix's CEO was aware of Basic's accused blenders "when they first came out," and that Vita-Mix brought suit over five years after learning of the accused infringement. Such a delay does not give rise to a presumption of laches, although "[t]he length of time which may be deemed unreasonable has no fixed boundaries but rather depends on the circumstances." Aukerman, 960 F.2d at 1032.

The circumstances of the present case do not support a finding of laches.

Affirmed-in-part, vacated-in-part, and remanded.

As an aside, Vita-Max's assertion of trademark infringement was nonsense.

Another case, like so many, where lawyers on both sides argued garbage and the district court had trouble sorting it all out.