CAFC overturns jury verdict, patent obvious because prior art would yield a predictable result

Each week, we succinctly summarize the preceding week of Federal Circuit precedential patent opinions. We provide the pertinent facts, issues, and holdings. Our Review allows you to keep abreast of the Federal Circuit’s activities – important for everyone concerned with intellectual property. We welcome any feedback you may provide.

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Federal Circuit Review – Issue No. 65-02
Federal Circuit Finds “Recycle Control” Technology of HVAC Systems Obvious

ABT Systems, LLC v. Emerson Electric Co., No. 2014-1618, -1700, 2015 U.S. App. LEXIS 14513 (Fed. Cir. Aug. 19, 2015) (Before Prost, C.J.; Clevenger and Schall, J.) (Opinion for the court, Schall, J.). Click Here for a copy of the opinion.

ABT Systems, LLC and The University of Central Florida (collectively, “ABT”) sued Emerson Electric Co. (“Emerson”) for infringing claims of U.S. Patent No. 5,547,017 covering a forced central air system with a “recycle control” for periodic fan operation when the system is not heating or cooling. After trial, the jury found the asserted claims valid and infringed. Emerson filed a motion for judgment as a matter of law (“JMOL”) that the claims were invalid as obvious, which the court denied. The jury also awarded ABT $311,379 in damages. ABT appealed the district court’s rulings related to damages. Emerson cross-appealed the district court’s denial of its JMOL motion.

The issue here revolved around the “recycle control” limitation, which read as:

[A] recycle control for periodically activating and deactivating only the circulating fan after a preselected time period, since the central air conditioning system has been deactivated, or the circulating fan has been deactivated from the selectable constant fan mode.

In the prior art, the Nakatsuno and Petrone references disclosed technology “for activating a fan after a predetermined time period following the end of a heating or cooling cycle,” where the fan activation was implemented as “a single event at the end of a cooling cycle for purposes of draining cooling coils.” In addition, Vogelzang and Cornelius disclosed a timer that “could make the fan go on and off on a predetermined cycle” independent from the deactivation of the heating and cooling cycle. The references together disclosed all the claimed limitations of the ‘017 patent. The issue was, therefore, “whether a person of skill would have combined references that disclose ‘single-shot’ fan operation as a function of the time when heating or cooling cycles end with references that teach periodic fan cycles during periods of time when there is no call for heating or cooling.”

In KSR, the Supreme Court held that “when a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result.” Applying KSR, the Federal Circuit concluded that combining elements from the cited prior art “would have yielded a predictable result: the system fan would activate periodically following the end of a heating or cooling cycle” as claimed in the ‘017 patent. The Court further found motivation or rationale for combining the references in the nature of the problem addressed; the ‘017 patent and the references (Vogelzang, Cornelius and Nakatsuno) all sought “to alleviate air stagnation during periods of no heating or cooling.” Therefore, it would have been obvious for one skilled in the art “to set the timer of Vogelzang or Cornelius based on the end of a heating or cooling cycle, as disclosed in Nakatsuno (or Petrone), regardless of for how long the time interval was to be set.”

The Court rejected ABT’s arguments regarding the objective evidence of nonobviousness, namely commercial success and long felt need. ABT’s evidence of commercial success failed to relate “the nexus between periodic fan operation and the commercial success of products embodying the invention claimed.” In addition, nothing in the record suggested that the alleged success of Emerson’s product in the market was driven by any novel aspect of the claimed invention. The Court also rejected the argument that commercial success was demonstrated by the number of licenses taken under the ‘017 patent. ABT had provided no evidence demonstrating “a clear nexus” between the licenses and the invention claimed. Rejecting ABT’s long felt need argument, the Court concluded that “Vogelzang’s ‘cycle position’ option for running a system fan ‘during periods when there is no operation of the heating apparatus or cooling apparatus’ to help mix air – eliminate any serious contention that there was a long-felt need for the invention claimed in the ‘017 patent.”

In conclusion, because prior art rendered the asserted claims of the ‘017 patent obvious, the district court erred in denying Emersion’s motion for JMOL. Accordingly, the Court reversed the judgment of not invalid and vacated the judgment of infringement.