Altair Engineering v. LEDdynamics (CAFC 2010-1118) precedential

At the Markman hearing, LEDdynamics argued that the proper construction for "closely-spaced" was: "[N]ot spaced-apart, such that adjacent LEDs are sufficiently close that another LED cannot fit in the space therebetween." J.A. 114. Altair, conversely, suggested that the correct construction was: "[M]ultiple LEDs arranged inside of a bulb portion where the number and spacing of the LEDs is such that, when lighted, the LEDs produce an illumination level and effect which adequately performs as a fluorescent light tube substitute." J.A. 103. The district court adopted LEDdynamics construction, finding that it was supported by the figures in the specification and prosecution history and would prevent the claim from being invalidated as indefinite.

After the Markman proceedings, LEDdynamics moved for summary judgment of non-infringement. Throughout its Markman briefing, Altair had characterized the accused product as containing 36 LEDs. Under the district court's claim construction, these 36 LEDs were "spacedapart, such that adjacent LEDs are sufficiently close that another LED cannot fit in the space therebetween." Thus, treating the accused product as consisting of 36 LEDs, it did not infringe. In opposing the motion, Altair for the first time relied on its assertion that the 36 LEDs in the accused product were "actually packages of six LEDs arranged very close to one another" and that the product, therefore, had 216 LEDs which were "closely-spaced."¹ J.A. 128. Altair also moved to amend its infringement contentions to add new claims of the '761 patent that it believed were infringed.

¹ Altair did tell the court during the Markman hearing that it had "discovered that the [LEDs used in the accused product] are actually six small LED chips wired together." J.A. 744.

The district court found Altair was judicially estopped from arguing that the accused product contained 216 closely-spaced LEDs because (1) its "new argument . . . is clearly at odds with its consistent position during the Markman proceedings," (2) "this Court adopted Altair's definition of LEDs in the accused device," and (3) "[c]hanging the definition of LED now . . . would prejudice LED dynamics." Altair Eng'g, Inc. v. LEDdynamics, Inc., No. 07-CV-13150, slip op. at 5-7 (E.D. Mich. March 24, 2009). The district court also denied Altair's motion to add additional claims, finding that Altair lacked good cause to amend infringement contentions made in response to the court's scheduling order (an issue not raised on appeal). To allow for a final judgment to be entered so the case could be appealed, LEDdynamics withdrew its invalidity counterclaims.

On to appeal.

Claim Construction

The lesson here: don't use a pivotal claim term that has scant spec support without spelling out the meaning within the claim itself, or risk having the lights go out on assertion.

With respect to claim construction, the parties agree that the text of the specification does not define or even use the phrase "closely-spaced" and that the phrase has no accepted meaning in the relevant art. Altair asserts that the district court erred by relying on the figures in the specification to arrive at its definition of "closely-spaced," and that its proposed claim construction is consistent with the purpose of the invention, which was "to provide a light tube . . . which overcome[s] the shortcomings of conventional fluorescent lighting systems" (i.e., a substitute for conventional fluorescent tube lighting). See '761 Patent, col. 1, ll. 30-32. However, as the district court noted, the term "closely-spaced" appears to refer to spatial separation, not to the functionality of the invention. While we agree that the figures in the specification in and of themselves do not define "closely-spaced," the prosecution history makes clear that the district court's construction is correct.

In this case, the prosecutor shot out the lights during prosecution. The prosecutor had added "closely-spaced" to get around prior art (Schmitt).

When adding the closely-spaced limitation to its claim, Altair argued to the examiner that "Schmitt does not teach or suggest a plurality of closely-spaced [LEDs] extending between the opposite ends of the bulb portion, which is shown by example in Applicants' Figures 1 and 2. A critical feature of Schmitt is the existence of spaced-apart light sources . . . ." J.A. 296 (emphases added). Here, not only did Altair admit that the limitation was added to distinguish the claim from "spaced apart" light sources, but it also relied explicitly (and heavily) on the figures to explain what it meant by "closely-spaced."

Which raises the question of why Altair's lawyers didn't see that coming.

Despite Altair's claims to the contrary, other aspects of the prosecution history also support the district court's construction.

While the examiner's interpretation can be pertinent, the applicant's own interpretation has far more significance. See, e.g., Springs Window Fashions LP v. Novo Indus., LP, 323 F.3d 989, 995 (Fed. Cir. 2003) (focusing on applicant's statements distinguishing prior art during prosecution despite the fact that examiner may not have relied on those statements and, instead, had a different reason for allowance); Spectrum Int'l, Inc. v. Sterilite Corp., 164 F.3d 1372, 1378-79 (Fed. Cir. 1998) (noting that "explicit arguments made [by the applicant] during prosecution" are significant and that "by distinguishing the claimed invention over the prior art, an applicant is indicating what the claims do not cover").

Judicial Estoppel

With respect to judicial estoppel, Altair argues that the issue of the nature of the accused product was never contested, and it never prevailed on the definition of LED. Under these circumstances, it asserts that it cannot be estopped from changing its characterization of the accused product. We agree. In New Hampshire v. Maine, 532 U.S. 742, 750-51 (2001), the Supreme Court described three factors used to determine whether judicial estoppel should apply:

First, a party's later position must be clearly inconsistent with its earlier position. Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled. . . . A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.

Id. (internal citations and quotations omitted). The Court explained that judicial estoppel "prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase." Id. at 749 (quoting Pegram v. Herdrich, 530 U.S. 211, 227 n.8 (2000)). Here, Altair did not prevail in any phase of the case. In fact, Altair lost its argument on claim construction. The district court rejected Altair's proposed construction and accepted the one proposed by LEDdynamics. Whether the accused product contained 36 or 216 LEDs was never even a contested issue. Indeed, at oral argument, LEDdynamics conceded that Altair "did not prevail on anything substantive." Oral Arg. at 16:04- 16:07, available at http://www.cafc.uscourts.gov/oralargument-recordings/2010-1118/all. Therefore, application of judicial estoppel was improper.

Altair's new evidence regarding the grouping of LEDs in the accused product raises a substantial issue of material fact.

We thus affirm the district court's claim construction of the term "closely-spaced" but reverse the district court's summary judgment of non-infringement.

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