Callaway Golf Loses Jury Verdict at the Federal Circuit
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog
Zies, Widerman & Malek
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Posted: Aug 14, 2009 @ 4:02 pm
UPDATED: 8/15/09 @ 12:41pm – See: comment 1
In November 2008, the entered a permanent injunction in favor of Callaway at the conclusion of a patent infringement lawsuit in which Acushnet’s Pro V1 ball was found to infringed several patents obtained by Callaway when it bought Top Flite. Originally, Callaway Golf Company brought suit against Acushnet Company, alleging that Acushnet had infringed various claims of four golf ball patents owned by Callaway. These four patents were referred to as “the Sullivan patents,” taking this designation from the named inventor. The four Sullivan patents in question in the litigation were U.S. Patent Nos. 6,210,293, 6,503,156, 6,506,130 and 6,595,873. At issue are claims 1, 4, and 5 of the ’293 patent, claims 1–3 of the ’156 patent, claim 5 of the ’130 patent, and claims 1 and 3 of the ’873 patent. Earlier today the United States Court of Appeals for the Federal Circuit overruled the jury verdict and various other rulings entered by the district court and remanded the case back to the District of Delaware for further consideration. See Callaway Golf Co. v. Acushnet Co. (Fed. Cir., August 14, 2009).
In reading the decision it is clear why the Federal Circuit vacated the decision of the district court, so in this regard the decision of the CAFC was not at all surprising. On another level, the decision of the CAFC is enormously surprising. The Federal District Court for the District of Delaware is widely regarded as one of the top patent courts in the country, and it is indeed rare to see a decision from this particular courthouse that is so obviously flawed. I guess we all make mistakes, and judges are human too.
The core invention in the litigation can be understood by looking at claim 1 of the ’293 patent, which states:
1. A golf ball comprising:
an inner cover layer having a Shore D hardness of 60 or more molded on said core, said inner cover layer having a thickness of 0.100 to 0.010 inches, said inner cover layer comprising a blend of two or more low acid ionomer resins containing no more than 16% by weight of an alpha, beta-unsaturated carboxylic acid; and
an outer cover layer having a Shore D hardness of 64 or less molded on said inner cover layer, said outer cover layer having a thickness of 0.010 to 0.070 inches, and said outer cover layer comprising a relatively soft polyurethane material.
Callaway’s other asserted claims vary slightly from this claim, but each claims a golf ball with a core, an ionomer resin (or ionomer blend) inner cover layer with a Shore D hardness of 60 or more, and a polyurethane outer cover layer with a Shore D hardness of 64 or less. The “Shore D hardness” refers to a hardness standard published by the American Society for Testing and Materials.
At trial Acushnet stipulated that its golf balls infringed, but contended that the asserted claims were invalid for anticipation and obviousness. After construing the claims, the district court granted summary judgment of no anticipation, meaning that the district court did not find any genuine issue of material fact or issue of law that required a trial on the question of whether the claims in the asserted patents identically defined innovations already in the prior art. This left the issue of obviousness for trial, and the jury determined that only claim 5 of the ’293 patent was invalid as a result of obviousness. Accordingly, the district court entered final judgment concluding that dependent claim 5 of the ’293 patent was invalid for obviousness, but that independent claim 4 (from which it stemmed), as well as the other seven asserted claims, were not.
Those familiar with even basic patent law understand where this is heading. There is absolutely no way claim 5 can be obvious unless claim 4 is invalid. A dependent claim by definition adds something to a claim from which it depends. Therefore, claim 4 has to be broader than claim 5 in order for claim 5 to be a valid depending claim. Thus, if claim 5 (i.e., the more specific claim) is obvious, then claim 4 (i.e., the broad claim that captures more embodiments) must be invalid either as anticipated or as a result of itself being invalid. Therefore, the district court was faced with inconsistent jury verdicts. Under Third Circuit law the preference is to try and read the verdicts consistently, but this simply was not possible. Will all claims except claim 5 being determined not invalid, but claim 5 being determined invalid, there was simply no way to salvage the jury verdict. In fact, it seems that given such disparate determinations the only thing that can be said is that the jury didn’t understand the law and it is unreasonable to rely on any part of their validity determinations.
With respect to anticipation, the issue boiled down to one reference, namely U.S. Patent No. 4,431,193 (“Nesbitt”). Although Nesbitt itself did not expressly disclose two limitations of the Sullivan claims (the use of polyurethane in the outer cover and the use of a blend of ionomer resins in the inner cover), Acushnet argued that Nesbitt contains these limitations because it incorporates U.S. Pat. No. 4,274,637 (“Molitor”) by reference. The language used for incorporation was:
Reference is made to the application Ser. No. 155,658, of Robert P. Molitor issued into U.S. Pat. No. 4,274,637 which describes a number of foamable compositions of a character which may be employed for one or both layers 14 and 16 for the golf ball of this invention.
It is undisputed that Molitor teaches that many foamable materials, including both polyurethane and ionomer-resin blends, may be used as golf ball cover materials. The district court, however, rejected Acushnet’s argument, holding that Nesbitt failed to specifically incorporate polyurethane and ionomer-resin blends from Molitor. The CAFC pointed out that it has previously held that language nearly identical to that used in Nesbitt can be sufficient to indicate that the referenced material is fully incorporated in the host document. Thus, the Court held that Nesbitt did sufficiently incorporate by reference the potential cover layer materials described in Molitor ’637, including polyurethane and ionomer resin blends.
Ultimately, the Federal Circuit concluded that Acushnet raised a genuine question of material fact concerning anticipation, meaning that it was inappropriate for the district court to dispose of the anticipation defenses without a trial on those issues. As to obviousness, the CAFC affirmed the district court’s determination that Acushnet was not entitled to judgment as a matter of law that the asserted claims are invalid for obviousness, but because the judgment on obviousness was based upon irreconcilably inconsistent jury verdicts, the obviousness judgment was vacated. Thus, the case now stands remanded to the district court for a new trial.
About the Author
Gene Quinn is a US Patent Attorney, law professor and the founder of IPWatchdog.com. He is also a principal lecturer in the top patent bar review course in the nation, which helps aspiring patent attorneys and patent agents prepare themselves to pass the patent bar exam. Gene started the widely popular intellectual property website IPWatchdog.com in 1999, and since that time the site has had many millions of unique visitors. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, USA Today, CNN Money, NPR and various other newspapers and magazines worldwide. He represents individuals, small businesses and start-up corporations. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.