Spectralytics, Inc. v. Cordis Corporation, Nos. 2009-1564, 2010-1004 (Fed. Cir. June 13, 2011).

This decision’s treatment of  an accused infringer’s “teaching away” and “predictable solution” arguments is of interest, as are the court’s comments in remanding for reconsideration of award of enhanced damages and attorney fees.

Spectralytics holds a patent on a machine for manufacturing a steel coronary stent in which the workpiece fixture for holding the stent is rigidly carried on the laser cutting tool to prevent cutting errors in the stent as a result of the machine’s vibrations.  At trial, the jury found the patent willfully infringed and not invalid.  Cordis appealed denial of JMOL.  Cordis specifically challenged the evidentiary support for the jury’s presumed finding that the prior art “taught away” from the claimed machine and apparent acceptance that evidence of copying and commercial success supported nonobviousness.

Cordis submitted two prior art references at trial.  One  taught attaching the workpiece fixture to the cutting tool in a non-rigid manner, and the other  taught attaching the fixture to the frame instead of the cutting tool.  Expert testimony on both sides acknowledged that Spectralytics’ machine was a departure from accepted designs.  Cordis argued, however,  the prior art must “directly warn against the claimed invention or teach that the claimed invention would not work.”  Judge Newman, writing for the panel, rejected such a cramped interpretation of what is required for a reference to lead a person in the art “in a direction divergent from the path that was taken by the applicant” (In re Gurley, 27 F.3d 551, 553 (Fed. Cir. 1994), Newman, J.).  Per the court, a reference need not foresee and warn against what the inventor did; it is enough if the reference leads away from the direction taken by the inventor.  Here, the fact that all the prior art  sought to dampen vibrations to improve accuracy could be viewed as teaching away from the inventor’s machine, which instead made the workpiece fixture and cutting tool vibrate in unison.  A reasonable jury could find this was “teaching away” that supported the jury’s verdict.

That said, Judge Newman went on to note that even if Cordis’s narrow view of “teaching away” carried the day, it still would have been insufficient to reverse:  “Nor is ‘teaching away’ an essential element of a conclusion of nonobviousness.”  Slip op. at 11.

Judge Newman rebuffed Cordis’s attempt to characterize attaching the fixture to the cutting tool as merely one of a finite number of predictable places to which the workpiece fixture could be mounted.  “That suggestion ignores the expert testimony indicating that the cutting tool was not a predictable place to mount the workpiece fixture.”  Slip op. at 11 n.2.

Cordis’ argument that Spectralytics had shown no nexus between its claimed invention and commercial success was likewise rejected.  The evidence included statements that the patented machine was the reason an improved stent was possible, and the invention, in the form of the infringing machine, was characterized by the infringers as “‘superior’ and ‘advanced technology,’ with ‘cutting capabilities and precision not attainable’ by the prior laser-cutting system.” Slip op. at 13. (And that was all testimony from Cordis’s own witnesses.)

The court remanded on the questions of enhanced damages for the willful infringement and the district court’s refusal to award attorney fees.  The district court had applied In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc) too rigorously and had used Seagate’s criteria for determining whether infringement is willful to decide whether enhanced damages were warranted.  “Recent precedent has clarified that the factors relevant to these determinations are not coextensive.” Slip op. at 23.  Instead, the factors from Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed. Cir. 1992) apply. Specifically, failure to obtain a clearance opinion may not be dispositive for willful infringement, but it is a factor to consider in whether to award enhanced damages once willfulness is established; Seagate did not change this. As to attorney fees, their award “is not mandatory when willful infringement has been found, [but] precedent establishes that the court should explain its decision not to award attorney fees.”  Slip op. at 22.  The district court had not separately analyzed whether attorney fees should be awarded.  While similar factors apply in determining awards of enhanced damages for willful infringement and of attorney fees, they “are not identical. For example, attorney misconduct or other aggravation of the litigation process may weigh heavily with respect to attorney fees, but not for enhancement of damages.”  Slip op. at 23.

Cordis also lost a challenge to the award of damages at the rate of 5-percent of the sales price.