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Callaway Golf Loses Jury Verdict at the Federal Circuit


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: August 14, 2009 @ 4:02 pm
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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:

a core;

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.

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is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

8 comments
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  1. Claim 1: A method of smacking someone on the face with an object.

    Claim 2: The method of claim 1, wherein the object is a napkin.

    Disregarding 101 issues for the moment, Reference X teaches a method of smacking someone on the face with a tissue. Without a doubt, claim 1 is anticipated by Reference X (no lesser case of obviousness required). Claim 2 may be said to be obvious for obvious reasons.

    That said, a dependent claim 2 is rendered obvious, while the independent claim is rendered anticipated. What is Gene saying when he stated:

    “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 also obvious.  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 also be obvious.”

  2. Gene,

    Good timing on the article as I am reading it while studying for my first civil procedure exam. I understand that, as there is a genuine issue as to material fact (Rule 56), summary judgment was not appropriate. However, I am confused as to why there was a jury trial in this case to begin with. Per Rule 38, the right to a jury trial is preserved, unless provided by Federal Statute. It is my understanding that Patent infringement matters weren’t entitled to a jury trial.

    Additionally, the test for a jury trial requires that the case would have been decided in the Court of Equity prior to the merger of the Courts of Law and Equity. As the Court of Equity handles injuctive relief and there was no jury trial, it doesn’t make sense to me that there was a jury in this trial.

    Can you tell me where I am getting confused?

    Thanks for your help,

    Scott

  3. Scott-

    There are indeed juries in patent cases. The Seventh Amendment guarantees the right to a jury trial, which can be waived and frequently is in patent matters.

    Take a look at Markman v. Westview:
    http://www.law.cornell.edu/supct/html/95-26.ZO.html

    Best of luck on your exam.

    -Gene

  4. G-

    I stand corrected. The better way to have said what I was trying to say is: “There is absolutely no way claim 5 can be obvious and claim 4 valid.”

    Correction to the article has been made and noted at the top. Thanks for your input.

    -Gene

  5. Here’s your nitpicky comments for the day, although the second one does have some followup that could be worthwhile to know for future reference.

    1) ASTM used to stand for American Society for Testing and Materials, but the organization is now called ASTM International, and the ASTM do not stand for anything.

    2) Shore Hardness is a the result of a testing procedure, so your article would be more proper to refer to it as a “hardness testing standard” and not a “hardness standard”. The latter implies that the material has to meet a certain (minumum/maximum) value or it is not acceptable. The test itself does not pass any such judgment, but merely discusses how the testing is done. It is up to the user to decide on the merit of the material after the test is done.

    In fact, most ASTM standards (and even ISO standards, SAE standards…) are standards for testing procedures and as such, they do not set speciications for what values are acceptable. I’ve seen many lawyers make this mistake, so I do think it is important to clarify this. From a science and engineering point of view, it is extremely important that everyone is following the same test procedures so that true comparisons of the results can be made.

  6. John-

    Perhaps you should contact the Federal Circuit and let them know what they got wrong in their decision.

    -Gene

  7. …but the court did get it right, Gene. Look at footnote 2. They even went into the nuances of tesing a round surface when the standard calls for a flat surface.

    John

  8. That sounds like a tough case to win. Golf ball designs are so similar to begin with.