On January 12th, the Court of Appeals for the Federal Circuit issued a precedential opinion in Exmark Manufacturing Company, Inc. v. Briggs & Stratton Power Products Group, LLC which vacated a $48 million damages award for willful patent infringement and remanded proceedings back to the district court. Along with the willfulness finding, the Federal Circuit also overturned findings of no invalidity on a patent that had already survived multiple reexaminations at the U.S. Patent and Trademark Office in a decision giving patent owners further reason to question whether the Federal Circuit may be more aligned with anti-patent viewpoints. The Federal Circuit panel on the case included Circuit Judges Evan Wallach, Raymond Chen and Kara Stoll with Stoll penning the opinion in the case.
The patent at issue in the Federal Circuit appeal is U.S. Patent No. 5987863, titled Lawn Mower Having Flow Control Baffles and Removable Mulching Baffles. Issued to Exmark in November 1999, it claims a multiblade lawn mower including a mowing deck having a plurality of cutting blades rotatably disposed therein as well as first and second flow control baffles defining a plurality of open throat portions which are positioned between adjacent cutting blades. The resulting invention provides a lawn mower with removable mulching baffles which efficiently directs grass clippings and air toward the side discharge of the mower deck, preventing grass clippings and air from being directed downwardly towards the ground, while requiring a minimum number of parts and connection points.
The appeal to the Federal Circuit follows trial proceedings in the District of Nebraska, which began back in May 2010 when Exmark filed a complaint for patent infringement against Briggs & Stratton asserting the ‘863 patent. In its complaint, Exmark alleged that Briggs & Stratton’s sale of the Snapper Pro S200X and Ferris Comfort Control DD mowers, as well as mowers utilizing Briggs’ iCD Cutting System. An amended complaint filed by Exmark in August 2010 notes that Briggs has been provided with written notice of the alleged infringement and charges that Briggs’ infringement of the ‘863 patent had been willful.
The district court’s finding of no invalidity came in a memorandum and order entered in the case in July 2015. Both Briggs and fellow defendant Schiller Grounds Care had argued that the ‘863 patent was invalid under multiple statutes including 35 U.S.C. § 102 grounds for obviousness, 35 U.S.C. § 103 grounds for obviousness and 35 U.S.C. § 112 grounds for indefiniteness. The Nebraska district court found that no reasonable jury could find the claims of the ‘863 patent invalid for anticipation or obviousness as the patent had been examined four times by the USPTO with all claims being upheld as valid, rejecting the same prior art invalidity arguments which were presented by defendants during this trial.
On the indefiniteness challenge, defendants cited to the U.S. Supreme Court’s 2014 decision in Nautilus, Inc. v. Biosig Instruments, Inc. (Nautilus II), arguing that the case changed the standards for indefiniteness, and noted that the USPTO had not been asked to consider an indefiniteness challenge to the ‘863 patent. However, the district court found that claims including terms of degree such as “substantially” or “adjacent” are not indefinite under the Nautilus II standard and could be easily understood in the context of the ‘863 patent claims.
Along with denying Briggs’ motion on indefiniteness, the Nebraska district court granted Exmark’s motion of infringement against Briggs with respect to its original designs on summary judgment in the July 2015 order. A jury verdict entered in September 2015 awarded Exmark damages in excess of $24 million along with a finding that Briggs & Stratton’s infringement had been willful with respect to its original mower deck design. Exmark’s motion on enhanced damages for willful infringement was granted in an order filed in May 2016 after the court found that Exmark had presented strong evidence of deliberate copying of the motor deck as well as evidence that Briggs’ knew of the ‘863 patent.
On appeal to the Federal Circuit, Briggs & Stratton challenged six orders coming from the district court in the case including summary judgment that claim 1 of the ‘863 patent is neither anticipated nor obvious; denial of summary judgment that claim 1 is indefinite; denial of a new trial on damages; evidentiary rulings related to damages; denial of a new trial on willfulness; and denial of Briggs’ laches defense. Although the Federal Circuit affirmed the lower court’s denial of summary judgment on indefiniteness as well as Briggs’ laches defense, the appellate court vacated the Nebraska court’s finding of willfulness, the jury’s damages award as well as the enhanced damages award, remanding those aspects of the case back to the lower court.
“We hold that a reexamination confirming patentability of a patent claim alone is not determinative of whether a genuine issue of fact precludes summary judgment of no invalidity,” the Federal Circuit’s opinion reads. Giving deference to patentability determinations in reexamination proceedings at the USPTO forecloses “challenges to patent validity in district court based on the same prior art.” This determination would seem to fly in the face of the presumption of validity given to patents which have issued from the USPTO as codified by 35 U.S.C. § 282 as the Federal Circuit seems to contemplate that validity challenges based on the same prior art might have more weight in district court than within the USPTO itself, but such a stance on patentability seems unfortunately all too familiar at a time when an Article I tribunal is rendering 90 percent of challenged patents defective outside of the Article III federal judiciary. The Federal Circuit cites to case law such as its own 2007 decision in Pfizer, Inc. v. Apotex, Inc. to conclude that “a court is never bound by an examiner’s finding in an ex parte patent application proceeding.” While the findings of the USPTO in reexamination proceedings may be considered evidence, they are not themselves dispositive, a legal viewpoint which grants additional due process to infringement defendants to the detriment of both jury trials and patent owners, at least in this case. The Federal Circuit downplayed the presumption of validity in this opinion, finding that this statutory presumption “can be overcome by the patent challenger who meets its high burden of proving the factual elements of invalidity by clear and convincing evidence.” Thus the district court erred in not determining whether a genuine issue of material fact was presented by Briggs’ anticipation or obviousness invalidity arguments.
The Federal Circuit’s opinion further noted that Briggs & Stratton was precluded from arguing the validity of the challenged claims despite a broader claim construction adopted by the district court than at the USPTO in the reexamination proceedings. Given the broader claim construction, the Federal Circuit found that a jury could find that asserted anticipating prior art references disclosed the claim requirements even if the USPTO did not find so on reexamination. “The mere fact that the asserted claims survived Briggs’ requested reexamination does not necessarily establish that it cannot meet its burden to overcome the presumption of validity under a broader claim construction,” the Federal Circuit found.