Toyota Wins Summary Judgment in Hybrid Patent Litigation

This case comes to light courtesy of the Docket Report daily e-mail newsletter.

On Tuesday, January 26, 2010, the United States Federal District Court for the Middle District of Florida, per Magistrate Pizzo, granted summary judgment against Solomon Technologies, Inc. and in favor of Toyota Motor Corporation relating to claims of infringement relative to U.S. Patent No. 5,067,932. The case already had an interesting history prior to this stage, having been pursued unsuccessfully by Solomon through the United States International Trade Commission and up to the United States Court of Appeals for the Federal Circuit. In fact, soon after initiating this action for damages and injunctive relief, Solomon lodged a complaint with the ITC pursuant to 337 of the Tariff Act of 1930, 19 U.S.C. § 1337(a)(1)(B), alleging that Toyota and its affiliates imported and sold hybrids that infringed its ‘932 patent. At the joint request of Solomon and Toyota, the Middle District of Florida stayed the federal court litigation pursuant to 28 U.S.C. § 1659(a) so that the administrative proceedings could run their course. After an extensive investigation, the ITC’s ruling against Solomon as to infringement, and an unsuccessful appeal to the Federal Circuit, Solomon renewed its claim of infringement with the Middle District. The Magistrate summarized the dispute by noting that the same parties were arguing about whether the same hybrid vehicles infringed the same claim in the same patent as they argued previously before both the ITC and the Federal Circuit.

In summary, Solomon abandoned its unsuccessful approach before the ITC and Federal Circuit as to the means-plus-function limitation of independent claim 7 and sought to advance the opposite argument, namely that independent claim 7 did not invoke means plus function treatment. Needless to say, Magistrate Pizzo was less than enthused about allowing the case to proceed.

Toyota opposed the new logic proposed by Solomon and argued that the Federal Circuit’s decision on infringement controls, and moved for summary judgment. After considering the arguments, Magistrate Pizzo found that Solomon was estopped from taking a contrary position to its administrative stance and there was no reason to deviate from the Federal Circuit’s holding relating to the same patent, same claims and same parties. Thus, Toyota’s motion for summary judgment was granted.

Both the ITC and Federal Circuit’s findings of non-infringement centered around three main limitations found in independent claim 7, specifically, “integral combination,” “within an envelope,” and “power conversion means.” The first two did not require discussion or consideration by the district court because Solomon simply disagreed with the Federal Circuit’s rulings on these terms, an argument found to be unavailing by the Magistrate. As to the third, Solomon and Toyota stipulated at the ITC that the term, “power conversion means” should be considered to invoke “means-plus-function” treatment.  The ITC and the Federal Circuit found that several claim limitations (“power conversion means,” “integral combination,” and “envelope”) are absent from the accused Toyota hybrids.  Solomon, however, then decided to approach “power conversion means” as not being a proper means-plus-function limitation.

The parties did not dispute the notion that a district court may consider as persuasive an ITC’s decision but that it does not otherwise bind, estop, or preclude the court from addressing patent-related issues.   As you can probably imagine, the parties did dispute the relative weight the district court should assign to the Federal Circuit’s decision on appeal from the ITC.  Toyota argued that the Federal Circuit’s opinion acts as stare decisis in this proceeding and warrants summary judgment in its favor.  Solomon, on the other hand, asserted that the Federal Circuit’s decision and factual findings are not binding and it could raise issues not previously presented to the ITC or Federal Circuit.  The Magistrate did not find Solomon’s arguments persuasive, particularly since the determinative issues presented to the ITC and the Federal Circuit were essentially the same as those presented to the district court.

After quoting language from the Federal Circuit’s decision in Texas Instruments, Inc. v. Cypress Semiconductor Corp., which related to the deference deserving by subsequent panels and tribunals addressing patent issues already decided, Magistrate Pizzo explained that he did not find “powerful incentive” to deviate from the Federal Circuit’s prior decision relative to the interpretation of the claim in question. Ultimately, summary judgment was granted in favor of Toyota.

So why would Solomon seek to proceed with a dispute where the same parties argued about the same claims being infringed by the same vehicles? It is impossible to know for sure, but the decision of the district court does note that Solomon has new attorneys and that these new attorneys were not the ones representing Solomon before the ITC. While that doesn’t explain with certainty why the case proceeded, it would not be unheard of for a party who thinks they lost because of errors committed by their previous attorneys to press forward. While legal malpractice can be difficult to prove because you must prove both that malpractice was committed and that had the malpractice not been committed there would be a different result, it could be viewed as wise to press forward and force the district court to rule that they would not consider new arguments at this time, them essentially being waived earlier.

I am not saying that Solomon is going to go after their previous attorneys, and I am certainly not saying that the previous attorneys committed malpractice. What I am observing is that as a strategy to set up a legal malpractice claim you really need to do whatever you can to fix whatever has gone wrong. By doing that an argument is removed in defense later, said argument being that it could have been fixed but you chose not to try and fix it so we will never know. With a ruling saying that the patent litigation is over on summary judgment as a result of not being able to make new claims that type of defense would be limited at best, perhaps even non-existent.

Of course, I am probably over thinking here and a more logical explanation could be that Solomon simply didn’t want to accept defeat. They would hardly be the first patent owner and/or client to continue to fight long after fighting made any sense. But whatever the reason for continuing to pursue Toyota, it would seem that the case is now over, or at least the fat lady is warming up. I can’t imagine the Federal Circuit reversing this decision after they have already construed the claim based on a stipulation of the parties.