Opinion
Consolidated Case No. 1:19-cv-01388-SLD-JEH
2023-03-31
DURASYSTEMS BARRIERS INC., Plaintiff, v. VAN-PACKER CO. & Jeremias, Inc., Defendants.
Brian N. Platt, Chad E. Nydegger, Workman Nydegger P.C., Salt Lake City, UT, Matthew V. Topic, Loevy & Loevy, Chicago, IL, for Plaintiff. Jacob Thomas Michalakes, James Andrew Shimota, Katherine Louise Allor, Nelson Moon Hua, K&L Gates LLP, Chicago, IL, for Defendants.
Brian N. Platt, Chad E. Nydegger, Workman Nydegger P.C., Salt Lake City, UT, Matthew V. Topic, Loevy & Loevy, Chicago, IL, for Plaintiff. Jacob Thomas Michalakes, James Andrew Shimota, Katherine Louise Allor, Nelson Moon Hua, K&L Gates LLP, Chicago, IL, for Defendants.
ORDER
SARA DARROW, CHIEF UNITED STATES DISTRICT JUDGE
Before the Court are Plaintiff DuraSystems Barriers Inc.'s Motion for Summary Judgment of Patent Infringement, ECF No. 63; Motion for Summary Judgment of No Invalidity, ECF No. 64; and Motion for Summary Judgment Dismissing Defendants' Inequitable Conduct Affirmative Defense, ECF No. 65. Also before the Court is Defendants Van-Packer Co. ("Van-Packer") & Jeremias, Inc.'s Motion for Summary Judgment of Noninfringement and Invalidity, ECF No. 67. Defendants moved to file certain exhibits under seal, ECF No. 68, as did Plaintiff, ECF No. 75. For the following reasons, Plaintiff's Motion for Summary Judgment of Patent Infringement is GRANTED; Plaintiff's Motion for Summary Judgment of No Invalidity is DENIED; Plaintiff's Motion for Summary Judgment Dismissing Defendants' Inequitable Conduct Affirmative Defense is GRANTED; and Defendants' Motion for Summary Judgment of Noninfringement and Invalidity is DENIED as to non-infringement, DENIED as to indefiniteness, DENIED as to written description, DENIED as to enablement, DENIED as to lost profits, and GRANTED as to convoyed sales. Both motions to seal are DENIED.
Defendants moved for leave to file excess pages in their summary judgment motion, ECF No. 62, but later moved to withdraw that motion, ECF No. 71. Defendants seek to withdraw the motion as their summary judgment motion in fact complies with the type volume limitation set out by the Local Rules. See Mot. Withdraw 1. The motion to withdraw is accordingly granted. The Clerk is directed to strike Defendants' motion for leave to file excess pages.
BACKGROUND
This is a patent dispute. Much of its procedural history and many of the underlying facts have already been recited. See Sept. 3, 2021 Order 1-5, ECF No. 45. The Court will introduce additional facts throughout its analysis; a high-level overview here will suffice.
It is undisputed that Plaintiff owns U.S. Patent No. 10,024,569 (the "'569 Patent"). See Defs.' Resp. Pl.'s Mot. Summ. J. Infringement 1-2, ECF No. 77. Inventor William Duffy is Plaintiff's president. See Defs.' Resp. Pl.'s Mot. Summ. J. Inequitable Conduct 3, ECF No. 79. The '569 Patent describes "a modular fire-rated exhaust duct assembly" containing "two or more exhaust duct modules." U.S. Patent 10,024,569 col. 2 ll. 26-28, ECF No. 32-1. The exhaust duct modules have an inner duct liner, an outer casing, and a void between them. Id. col. 2 ll. 28-31. The void is configured to "receiv[e] . . . insulation material." Id. col. 2 ll. 31-32. Most important here is that the void includes "one or more thermal spacers," which are "configured to maintain said inner duct liner and said outer casing in a spaced relationship so that said insulation material occupies said void." Id. col. 2 ll. 33-36.
Defendants sell certain exhaust duct products (the "Accused Products") that Plaintiff alleges infringe various claims of the '569 Patent (the "Asserted Claims"). See Defs.' Resp. Pl.'s Mot. Summ. J. Infringement 1-2. This litigation arises from those allegations. See First Am. Compl. ¶¶ 33-49, ECF No. 17. Both parties now seek summary judgment as to myriad aspects of this case: liability, various defenses, and certain damages.
DISCUSSION
I. Motions to Seal Exhibits
Defendants seek to file Exhibits A, G, H, and I to their motion for summary judgment under seal because those exhibits "contain information designated as confidential." Defs.' Mot. Leave File Under Seal 1. Plaintiff, meanwhile, seeks to file Exhibits Q and S to its supplemental appendix under seal because those exhibits "are excerpts of deposition transcripts designated by counsel for Defendants as HIGHLY CONFIDENTIAL-ATTORNEYS EYES ONLY and therefore fall under the protection of the parties' Stipulated Protective Order." Pl.'s Mot. Leave File Under Seal 1. Neither motion cures the deficiencies previously identified by the Court. See Sept. 3, 2021 Order 57-60 (denying the parties' "substandard" motions for leave to file certain exhibits to their respective claim construction briefs under seal, explaining that "just because . . . counsel said they are confidential does not make them so under Seventh Circuit precedent"). Claims of confidentiality must be specifically justified. See Baxter Int'l, Inc. v. Abbott Lab'ys, 297 F.3d 544, 546 (7th Cir. 2002) (outlining the requisite analysis and describing a motion that "did not analyze the applicable legal criteria or contend that any document contains a protectable trade secret or otherwise legitimately may be kept from public inspection despite its importance to the resolution of the litigation" as "[s]o perfunctory . . . that it could have been summarily rejected"); United States v. Foster, 564 F.3d 852, 854 (7th Cir. 2009) (emphasizing that "[t]he law could not be clearer" in light of Baxter International); see also Diamond Servs. Mgmt. Co. v. C&C Jewelry Mfg., Inc., Case No. 19 C 7675, 2021 WL 4258800, at *7 (N.D. Ill. May 11, 2021) ("[U]nder the common law of the Seventh Circuit, material . . . may not be sealed simply because one or more parties sought to give it confidential treatment under a protective order. Rather, a basis must exist for keeping from the public the material requested for sealing.").
The parties have been already admonished that motions to seal must be specific and "include an explanation of how the document[s] meet[ ] the legal standards for filing sealed documents," Civil LR 5.10(A)(2). Civil Local Rule 5.10(A)(4) permits the Court to, "in its discretion, order a sealed document to be made public if (1) the document is filed in disregard of legal standards, or (2) if the document is so intricately connected with a pending matter that the interests of justice are best served by doing so." The former is the case here as the parties' motions have been filed in contravention of the Local Rules and Seventh Circuit precedent. And the latter is the case here because documents such as expert reports on infringement and damages are without doubt of critical importance to this matter. See Formax, Inc. v. Alkar-Rapidpak-MP Equip., Inc., No. 11-C-298, 2014 WL 2894898, at *6 (E.D. Wis. June 26, 2014) ("Damages are a key component of any civil action, and thus the underlying evidence must be largely open to public scrutiny."); cf. City of Greenville v. Syngenta Crop Prot., LLC, 764 F.3d 695, 698 (7th Cir. 2014) ("Public access depends on whether a document influenc[ed] or underpin[ned] the judicial decision." (alterations in original) (quotation marks omitted)). For these reasons, the parties' motions to seal are DENIED. The Clerk is DIRECTED to unseal the exhibits on the docket at ECF No. 69-1, ECF No. 69-2, ECF No. 69-3, ECF No. 69-4, ECF No. 76-1, and ECF No. 76-2.
II. Motions for Summary Judgment
a. Legal Standard
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Summary judgment is also appropriate if the party opposing summary judgment fails to establish a genuine issue of fact on an element essential to its case and on which that party bears the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Where one party has properly moved for summary judgment, the non-moving party must respond "by identifying specific, admissible evidence showing that there is a genuine dispute of material fact for trial." Grant v. Trs. of Ind. Univ., 870 F.3d 562, 568 (7th Cir. 2017). The court's function is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial"—that is, whether "there is sufficient evidence favoring the non[-]moving party for a jury to return a verdict" in his favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Patel v. Allstate Ins. Co., 105 F.3d 365, 370 (7th Cir. 1997). The court must view the evidence "in the light most favorable to the non-moving party[ ] and draw[ ] all reasonable inferences in that party's favor." McCann v. Iroquois Mem'l Hosp., 622 F.3d 745, 752 (7th Cir. 2010) (citing Anderson, 477 U.S. at 255, 106 S.Ct. 2505).
b. Analysis
i. Infringement
Both parties have moved for summary judgment as to infringement. "A determination of infringement generally requires a two-step analysis—the court first determines the scope and meaning of the claims asserted, and then the properly construed claims are compared to the allegedly infringing device." Niazi Licensing Corp. v. St. Jude Med. S.C., Inc., 30 F.4th 1339, 1350 (Fed. Cir. 2022). "Step two, comparison of the claim to the accused device, requires a determination that every claim limitation or its equivalent be found in the accused device." In re Gabapentin Pat. Litig., 503 F.3d 1254, 1259 (Fed. Cir. 2007). "[O]n summary judgment, the issue is whether there is no genuine issue of material fact regarding infringement." Id. "Summary judgment is appropriate when it is apparent that only one conclusion as to infringement could be reached by a reasonable jury." Telemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316, 1323 (Fed. Cir. 2001).
The parties have narrowed the inquiry to a single question. As Plaintiff puts it, "[t]he issue . . . has been reduced to whether the Accused Products satisfy the 'thermal spacers thermally isolating' claim limitation because Defendants do not dispute that every other limitation of the Asserted Claims is present in the Accused Products." See Pl.'s Mot. Summ. J. Infringement 7. In Defendants' words, Plaintiff's "case depends entirely on whether [their Accused Products] include[ ] a thermal spacer." See Defs.' Mot. Summ. J. 7.
The Court previously construed "thermal spacers thermally isolating" to mean "components that maintain a space between the inner duct liner and outer casing that limit the amount of heat conducted through the components so that they do not create fail points on the inner duct liner or outer casing during fire rating testing." See Sept. 3, 2021 Order 33 (quotation marks omitted). Defendants primarily argue that their spacers do not limit heat and therefore cannot be thermal spacers. Defs.' Mot. Sum. J. at 14-17. Defendants' spacers are made of steel, id. at 15; Pl.'s Resp. Defs.' Mot. Summ. J. 17-18, and Van-Packer's infringement expert, Timothy Morse, conducted modeling demonstrating that the Accused Products' steel spacers increase the transfer of heat between the inner duct and outer casing such that portions of the outer casing become hotter when metal spacers are included. See Defs.' Mot. Summ. J. 15-17 (citing Morse Rebuttal Report 17-20, ECF No. 69-1). As a result, Defendants contend that their spacers cannot be thermal spacers as their spacers do not limit the amount of heat conducted through the components. See id. at 17 ("Because both expert witnesses agree that the . . . spacers increase the transfer of heat between the inner and outer walls, rather than limit it, the Accused Products do not include one or more thermal spacers and cannot infringe."); see also Defs.' Resp. Pl.'s Mot. Summ. J. Infringement 9-12, ECF No. 77 (advancing the same argument—that "the transfer of heat between the inner duct liner and the outer casing actually increases when [Defendants'] spacers are used" and therefore the spacers are not thermal spacers—in response to Plaintiff's Motion for Summary Judgment of Patent Infringement (emphasis omitted)).
Plaintiff responds that Defendants improperly truncate and misapply the Court's full construction. See Pl.'s Resp. Defs.' Mot. Summ. J. 32-33; see also Pl.'s Mot. Summ. J. Infringement 9-11 (advancing this argument affirmatively in support of summary judgment). That is, thermal spacers may increase the transfer of heat to certain portions of the outer casing but still "limit the amount of heat conducted through the components so that they do not create fail points on the inner duct liner or outer casing during fire rating testing." See Pl.'s Resp. Defs.' Mot. Summ. J. 32-33 (quotation marks omitted) ("Defendants' argument that their thermal spacers conduct more heat than no spacers at all is irrelevant to whether they limit the amount of heat conducted through the thermal spacers to the degree required by the claims . . . ."). The Court agrees with Plaintiff that its construction of "thermal spacers" does not require thermal spacers to decrease or fail to increase heat as compared to the absence of spacers, but rather to limit or cap the amount of heat conducted such that fire testing does not create fail points. See Sept. 3, 2021 Order 27-31; cf. id. at 27-28 (distinguishing "isolating" and "limiting" from "minimizing").
The question then becomes, do Defendants' spacers perform that function? Defendants argue their spacers do not because their spacers "are designed with holes . . . where the insulation creeps through the . . . metal spacers." See Defs.' Mot. Summ. J. 17-18. Because the "air occupying the holes is what limits heat transfer," Defendants' spacers cannot be thermal spacers because "the spacer itself must thermally isolate." See id. at 17 (emphasis altered). Defendants point to the deposition of Plaintiff's infringement and invalidity expert Tony Crimi to suggest that Crimi agrees that the "air [in the holes] . . . limits the flow of heat," not the spacers themselves. See id.
Plaintiff responds that Defendants misrepresent Crimi's opinion. See Pl.'s Resp. Defs.' Mot. Summ. J. 33-34. Crimi's expert report as to infringement and May 11, 2022 deposition testimony provide clarity as to his perspective. For example, in the former, Crimi opines that Defendants' spacers are thermal spacers because
they are configured to limit the amount of heat conducted through the components so that they do not create fail points on the inner duct liner or outer casing during fire rating testing. Specifically, the cutout portions of the spacers are designed to limit the transfer of heat through the spacer between the inner duct liner and the outer casing.See id. at 34 (quoting Crimi Report 17, ECF No. 67-12); see also Crimi May 11, 2022 Dep. 45:3-12, ECF No. 67-3 (expressing a belief that Defendants' spacer "has the holes in it . . . to reduce heat transfer"); id. at 91:8-14 (explaining that the spacers' holes "provide[ ] an outlet for radiation of heat" to be absorbed by the insulation rather than transmitted through the cavity); id. at 96:11-22 (explaining that holes in the spacer "radiat[e heat] into the cavity where the insulation is"); id. at 219:7-11 (defining the metal spacer "[a]s the entirety of that part that includes both the metal strip and the voids").
Defendants characterize the parties' dispute as "center[ing] on what is actually performing the step of limit[ing] the amount of heat." See Defs.' Resp. Pl.'s Mot. Summ. J. Infringement 13 (second alteration in original). The Court finds that the parties generally agree as to how Defendants' spacers work but dispute whether a spacer can be a thermal spacer if its design includes holes, cutout portions, voids, or perforations (the parties have used all of these terms) that facilitate thermal isolation. Cf. Pl.'s Resp. Defs.' Mot. Summ. J. 34 ("Mr. Crimi's explanation that the cutouts or 'voids' in the thermal spacers allow the thermal spacers to limit the transfer of heat by dissipating heat into 'air' of the openings is entirely consistent with the position set forth in his expert report.").
Defendants argue that the Court's claim construction makes clear a spacer cannot have holes. See Defs.' Mot. Summ. J. 17 (citing Sept. 3, 2021 Order 22). First, Defendants argue that a thermal spacer cannot contain holes because a thermal spacer must maintain the space between the inner duct liner and the outer casing and holes do not maintain space. See id. To be sure, holes without a spacer could not maintain a spaced relationship, but that a spacer is not solid does not preclude its overall ability to maintain a space between the inner duct liner and outer casing.
Defendants also argue that the holes cannot be considered part of the spacer in light of the claim language. Per Defendants, the '569 Patent "distinctly claims the void separately." See id. at 18 (emphasis added). The '569 Patent does make clear that the duct modules contain a void between the inner duct liner and outer casing. See id. at 17-18. But Defendants' argument relies too heavily on the word "void" and offers too little in the way of analysis of the actual claim language. Perforations in the spacer are not themselves a "void . . . between at least at least a portion of space between said inner duct liner and said outer casing," id. at 17 (emphasis and quotation marks omitted).
To review, a "thermal spacer thermally isolating" is a component that "maintain[s] a space between the inner duct liner and outer casing that limit[s] the amount of heat conducted through the components so that they do not create fail points on the inner duct liner or outer casing during fire rating testing," Sept. 3, 2021 Order 33. The Court concludes that spacers with perforations or holes maintain a spaced relationship and limit the amount of heat conducted through the components so that they do not create fail points. This conclusion compels the Court to grant summary judgment as to infringement in Plaintiff's favor. Thus, Plaintiff's Motion for Summary Judgment of Patent Infringement is GRANTED and Defendants' Motion for Summary Judgment of Noninfringement and Invalidity is DENIED as to non-infringement.
A final point: Defendants argue in their response to Plaintiff's Motion for Summary Judgment of Patent Infringement that Plaintiff "argues for an infringement read that renders its claims invalid." See Defs.' Resp. Pl.'s Mot. Summ. J. Infringement 16 (emphasis omitted). Defendants therefore ask the Court to "find that the Asserted Claims are indefinite." See id. at 17. However, the indefiniteness arguments raised in Defendants' response do not match the indefiniteness arguments raised in Defendants' own summary judgment motion. Compare id. at 16-17 with Defs.' Mot. Summ. J. 23. Most confusingly, Defendants' motion suggests Defendants intend to only incorporate certain arguments by reference, see Defs.' Mot. Summ. J. 23-24 (noting that Defendants "fully briefed" the indefiniteness of "compressible insulation material" at claim construction but not addressing Defendants' prior briefing with regard to the indefiniteness of "fire-rated" and failing entirely to address the indefiniteness of "specified fire rating"), but Defendants' response suggests otherwise, see Defs.' Resp. Pl.'s Mot. Summ. J. Infringement 16 ("During claim construction briefing, Defendants explained how the terms 'fire-rated' and 'specified fire rating' . . . are indefinite."). This muddies the record, is arguably an end run around the summary judgment rules (because the claim construction briefs did not apply those rules or engage with the summary judgment standard), and ignores the Court's explicit instruction for Defendants to "reassert their indefiniteness arguments" at summary judgment, Sept. 3, 2021 Order 16 (emphasis added)—that is, to assert their arguments again in light of any new evidence to refine the issues before the Court and promote clarity in the record. The Court will endeavor in the forthcoming invalidity analysis to address all relevant arguments that appear to have been raised by either party; however, any holes reflect the briefing.
ii. Invalidity
"[A]n alleged infringer may assert the invalidity of the patent—that is, he may attempt to prove that the patent never should have issued in the first place." Microsoft Corp. v. I4I Ltd. P'ship, 564 U.S. 91, 96, 131 S.Ct. 2238, 180 L.Ed.2d 131 (2011). Because "[p]atents are presumed to be valid," Procter & Gamble Co. v. Teva Pharms. USA, Inc., 566 F.3d 989, 994 (Fed. Cir. 2009), invalidity must be "prove[n] . . . with clear and convincing evidence," Impax Lab'ys, Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008). "[A] judgment of invalidity necessarily moots the issue of infringement." TypeRight Keyboard Corp. v. Microsoft Corp., 374 F.3d 1151, 1157 (Fed. Cir. 2004); see also Commil USA, LLC v. Cisco Sys., Inc., 575 U.S. 632, 648, 135 S.Ct. 1920, 191 L.Ed.2d 883 (2015) (Scalia, J., dissenting) ("It follows, as night the day, that only valid patents can be infringed. To talk of infringing an invalid patent is to talk non-sense.").
Defendants raise four invalidity defenses: (1) obviousness, Def.'s Sec. Corrected Final Unenforceability & Invalidity Contentions 10-11, ECF No. 66-16; (2) lack of enablement, id. at 13; (3) lack of written description, id. at 14; and (4) indefiniteness, id. at 14. Defendants seek summary judgment as to lack of enablement, lack of written description, and indefiniteness. See Def.'s Mot. Summ. J. 18-24. Plaintiff, meanwhile, seeks summary judgment as to Defendants' obviousness defense. See generally Pl.'s Mot. Summ. J. No Invalidity.
1. Indefiniteness
A patent specification must "particularly point[ ] out and distinctly claim[ ]" its subject matter. 35 U.S.C. § 112(b). "[A] patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention." Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898, 901, 134 S.Ct. 2120, 189 L.Ed.2d 37 (2014). The key question regarding indefiniteness is "whether the claims, not particular claim terms," meet the Nautilus indefiniteness standard. Cox Commc'ns, Inc. v. Sprint Commc'n Co., 838 F.3d 1224, 1231-32 (Fed. Cir. 2016) (quotation marks and citations omitted). Nevertheless, the Federal Circuit has recognized that "the common practice of training questions of indefiniteness on individual claim terms is a helpful tool. Indeed, if a person of ordinary skill in the art cannot discern the scope of a claim with reasonable certainty, it may be because one or several claim terms cannot be reliably construed." Id. at 1232.
At claim construction, Defendants argued the indefiniteness of the terms "fire-rated," "specified fire rating," and "compressible insulation material." Def.'s Opening Claim Const. Brief 6, ECF No. 31. The Court deferred construction of those terms so that indefiniteness and claim construction could "be assessed together on a full discovery record" and instructed Defendants to "reassert their indefiniteness arguments" at summary judgment. See Sept. 3, 2021 Order 15-16. Defendants now argue the terms "fire-rated," "compressible insulation material," and "thermal spacer" are indefinite. Def.'s Mot. Summ. J. Id. at 23-24. The Court considers each claim term in turn to determine whether it is indefinite.
a. "Fire-Rated"
The Court must first determine whether the term "fire-rated" can be construed. See Sept. 3, 2021 Order 16. The ground rules of claim construction have already been established, see id. at 5-9, as has the identity and background of a person of ordinary skill in the art (sometimes called a "POSITA," among other permutations), see id. at 16-17.
At claim construction, the parties agreed that
a POSITA would have a technical certification as a sheet metal worker or sheet metal mechanic, which is typically a five-year certification, or with equivalent work experience in the field of fire-rated duct systems. Further, he or she may also have a bachelor's degree in mechanical engineering or [a] related field, and . . . experience could replace formal training, such that a person with five or more years of experience working in the exhaust duct field would have appropriate training to be a POS[IT]A.Sept. 3, 2021 Order 17 (alterations in original) (quotation marks and citations omitted).
The term "fire-rated" appears in a similar manner throughout the Asserted Claims. Claim 6, for example, claims in relevant part a "modular fire-rated exhaust duct assembly." '569 Patent col. 9 l. 27 (emphasis added). The term also appears elsewhere throughout the specification. For instance, the specification explains that "ventilation or exhaust ducts for flammable or hazardous materials cannot be configured with fire dampers, so the duct itself must be fire-rated." Id. col. 1 ll. 27-29 (emphasis added). The specification continues:
To be classified as a fire-rated duct, an exhaust duct must be capable of preventing the release of flammable materials from inside the duct and/or combustible materials adjacent the exterior of the exhaust duct from catching fire if a fire exists on the other side of the duct. In other words, a fire-rated duct must be capable of minimizing the transfer of heat through or across the duct walls.Id. col. 1 ll. 30-36 (emphasis added).
At claim construction, Defendants argued that this language was "confusing" because it "posits that, to be 'fire[-]rated,' a duct does not need to pass any test, but rather need only be 'capable of minimizing the transfer of heat through or across the duct walls.' " Defs.' Opening Claim Const. Brief 8. (quoting '569 Patent col. 1 ll. 30-37). Defendants went on to argue that many different fire rating tests exist and therefore a POSITA would not understand which test to apply. See id. at 9-11. Plaintiff proposed (and presumably still supports) the construction "rated for fire resistance with reference to its ability to withstand a standard fire resistance test," arguing that all that is required is that the duct pass a fire test. See Pl.'s Resp. Claim Const. Brief 5-10, ECF No. 36.
At summary judgment, Defendants primarily argue the term "fire-rated" is indefinite because "no fire rating standards exist for laboratory ducts." Defs.' Mot. Summ. J. 23. This argument appears to be in tension with Defendants' prior two indefiniteness arguments. Now the POSITA is not confused as to whether fire-rated refers to the capabilities of the duct. Nor is the POSITA paralyzed in the face of the entire universe of fire tests. Instead, the POSITA lacks reasonable certainty as to the scope of the claims because he seeks to apply an installation-specific test that does not exist. See id.
Although "words of a claim are generally given their ordinary and customary meaning as understood by a person of ordinary skill in the art when read in the context of the specification and prosecution history," a patentee may "set[ ] out a definition and act[ ] as his own lexicographer." Thorner v. Sony Comput. Ent. Am. LLC, 669 F.3d 1362, 1365 (Fed. Cir. 2012). At claim construction, Defendants suggested based on the specification language regarding classification that "the patentee chose to 'classify' (i.e., define) the term 'fire[-]rated,' not, as one might expect with reference to a very specific standard test, but instead with reference to a vague 'capability' of an exhaust duct." Defs.' Opening Claim Const. Brief 7-8. This argument was and remains underdeveloped. To act as a lexicographer, a patentee must "clearly set forth a definition of the disputed claim term, and clearly express an intent to define the term." GE Lighting Sols., LLC v. AgiLight, Inc., 750 F.3d 1304, 1309 (Fed. Cir. 2014) (quotation marks omitted). Given that the standard for finding lexicography is "exacting," id., the Court cannot agree that the specification language regarding classification constitutes lexicography. That the patent specification references "fire exposure tests" in several places also undermines that conclusion. See '569 Patent col. 4 ll. 46-47 (referencing techniques that "can provide mechanical strength to pass the fire exposure tests"); id. col. 6 ll. 9-16.
However, the specification does not support that an installation-specific fire test must be applied. If anything, it dispels that conclusion: If "[f]ire-rated ducts are typically found in installations such as commercial kitchens and laboratories," see '569 Patent col. 1 ll. 38-39, and the POSITA knows there is no installation-specific test for laboratories, then "fire-rated" cannot mean "rated for fire resistance with reference to its ability to withstand an installation-specific fire resistance test."
The POSITA must know, then, that the "specified fire rating" that must be provided, see id. col. 9 ll. 27-30 (claiming "a modular fire-rated exhaust duct . . . wherein said inner duct liner and said outer casing . . . hav[e] a thickness to provide a specified fire rating"), is not determined by whether the duct is in a kitchen or a laboratory; rather, it reflects the standards promulgated by nationally and internationally recognized organizations existing to determine those standards, see id. col. 4 ll. 28-31 (referring to "requirements under the UL 2221 and ASTM E2336 standards"). Thus, a fire-rated exhaust duct is simply an exhaust duct that has attained a fire rating, the determination of which is a straightforward inquiry based on whether or not the duct has been rated.
Thus, the Court concludes that fire-rated is not an indefinite claim term. The Court adopts the construction "rated for fire resistance with reference to its ability to withstand a recognized standard fire resistance test."
b. "Compressible Insulation Material"
Defendants reassert their arguments at claim construction with respect to the indefiniteness of the term "compressible insultation material." Defs.' Mot. Summ. J. 23-24. At claim construction, Defendants argued that "compressible insulation material" was indefinite because "[t]he specification of the '569 Patent does not provide a standard for measuring the scope of 'compressible' " and "[t]he claims as a whole require a non-customary, illdefined meaning" of the term. Defs.' Opening Claim Const. Brief 11-12. Plaintiff, meanwhile, proposed the construction "insulation material whose thickness changes under the weight of the inner duct." Pl.'s Resp. Claim Const. Brief 10.
The parties agree that "compressible" is a term of degree, see id. at 11 ("Plaintiff does not dispute that 'compressible' is a term of degree . . . ."), which frames the analysis. The Federal Circuit "ha[s] time and again had the occasion to consider the definiteness of claims containing descriptive words or terms of degree." Niazi Licensing Corp., 30 F.4th at 1347. "Ultimately, patent claims with descriptive words or terms of degree must provide objective boundaries for those of skill in the art in the context of the invention to be definite." Id. at 1349 (quotation marks omitted). That is, terms of degree are permissible so long as they "provide[ ] enough certainty to one of skill in the art when read in the context of the invention." Sonix Tech. Co. v. Publ'ns Int'l, Ltd., 844 F.3d 1370, 1377 (Fed. Cir. 2017) (quotation marks omitted).
"[T]he written description is key to determining whether a term of degree is indefinite." Id. at 1378. Thus, the Court begins with the language of the '569 Patent itself. Its language makes clear that the "compressible insulation material" must occupy the void between the inner duct and outer casing. '569 Patent col. 3. ll. 10-14. Indeed, in summary and according to an embodiment, "[t]he void is configured with thermal spacers to prevent the insulation from being unduly compressed or crushed." Id. col. 8 ll. 14-19 (emphasis added). Thus, the '569 Patent suggests that compressible insulation must occupy the void between the inner duct and outer casing and also be compressible enough such that the thermal spacers effectuate the prevention of undue crushing compromising the material's insulative properties.
Thus, the Court disagrees with Defendants' assertion there are no objective boundaries for "compressible" contained in the '569 Patent, see Defs.' Opening Claim Const. Brief 12, as well as Defendants' related insinuation that the importance of preventing the crushing of the insulation appears nowhere in the '569 Patent, see Defs.' Reply Claim Const. Brief 5, ECF No. 41. Defendants seem to assume that objective boundaries must be numerical or tethered to a precise measurement (such as threshold density or elasticity) in order to be objective. See Defs.' Opening Claim Const. Brief 12-13. But this focus on "numerical values" is misplaced. See Defs.' Reply Claim Const. Brief 5. "[A]bsolute or mathematical precision is not required," as the question is whether a patent "provide[s] objective boundaries for those of skill in the art." Interval Licensing LLC v. AOL, Inc., 766 F.3d 1364, 1370-71 (Fed. Cir. 2014). The specification provides this exact guidance.
Extrinsic evidence, to the extent the Court must consider it, bolsters this conclusion. Presumably in response to Defendants' argument at claim construction that pegging compressibility to the efficacy of the insulation would yield "ridiculous results" and be technically unworkable, see Defs.' Reply Claim Const. Brief 6, Plaintiff enlisted expert Mark Colton to determine whether the insulation material in Van-Packer's duct was compressible, see generally Colton Report, ECF No. 74-5. Defendants respond that "reliance on an expert report relating to the compressibility of Defendants' Accused Products is insufficient to avoid indefiniteness" because "[i]t is undisputed" Defendants use compressible insulation. See Defs.' Reply Supp. Defs.' Mot. Summ. J. 11, ECF No. 81 (emphasis omitted). But Plaintiff explained that the purpose of the report was not to prove that Defendants use compressible insulation material, but disprove Defendants' argument that it would be necessary to perform a complicated and uncertain fire test to determine if compressible insulation material qualifies as such. See Pl.'s Resp. Mot. Summ. J. 48.
Defendants' only remaining argument is that dependent claim 18 invokes "insulation board." See Defs.' Reply Claim Const. Brief 6-7 (quoting '569 Patent col. 10 ll. 60-63). Defendants argue Plaintiff's construction is incompatible with claim 18 because insulation board cannot be compressed. See id. But insulation board can be compressed, even according to Defendants' expert Barry Cheek, who testified at deposition that a person of ordinary skill in the art would understand that compressible insulation is insulation that would be compressed in the absence of the spacers, that ducts may contain fiberglass insulation boards, and that "you don't want them to compress because you're negating some of that insulating capability because the air gaps [in the board] are what is your friend when it comes to insulating." See Cheek Dep. Excerpt 108:4-20, ECF No. 36-2; see also id. at 110:9-15 (responding "[y]eah, you would definitely want to have some type of spacer in there for sure" after Plaintiff's counsel asked if it was important to have spacers maintain the void when using fiberglass insulation board because "there's a risk that the fiber insulation board would become compressed").
Thus, the Court concludes that compressible insulation material is not an indefinite claim term. The Court adopts the construction "insulation material whose thickness changes under the weight of the inner duct."
c. "Thermal Spacers"
Finally, Defendants argue that the claim term "thermal spacers," which the Court already construed in conjunction with the claim term "thermally isolating," see Sept. 3, 2021 Order 32-33, is indefinite because a POSITA would need to run a fire test to know if a thermal spacer thermally isolates, see Defs.' Mot. Summ. J. 23. Defendants go on to assert that "[a] claim that recites both a system (the duct) and a method (testing that must be done to know if a spacer is a thermal spacer)" fails to "apprise one of ordinary skill in the art of its scope and is invalid as being indefinite." See id.
The Court finds no support for Defendants' argument that "thermal spacers" must be indefinite because a POSITA must run a fire test to determine if a thermal spacer thermally isolates. To the contrary, "[d]efiniteness does not require that a potential infringer be able to determine ex ante if a particular act infringes the claims." Nevro Corp. v. Bos. Sci. Corp., 955 F.3d 35, 40 (Fed. Cir. 2020).
Defendants' bare assertion that claims in the '569 Patent constitute impermissible hybrid claims is perfunctory and undeveloped and thus cannot be persuasive. That a POSITA may have to run a fire test to determine that a thermal spacer thermally isolates does not mean that any claim in the '569 Patent recites a method of use, a practice that is impermissible because it obscures "whether infringement . . . occurs when one creates a[n infringing] system, or whether infringement occurs when the user actually uses [the system in an infringing manner]." See UltimatePointer, LLC v. Nintendo Co., 816 F.3d 816, 826 (Fed. Cir. 2016) (alterations in original) (quotation marks omitted). "[A] . . . claim covering both an apparatus and a method of use of that apparatus is invalid," see IPXL Holdings, LLC v. Amazon.com, Inc., 430 F.3d 1377, 1384 (Fed. Cir. 2005), but Defendants neither identify nor analyze any claims, cf. Defs.' Mot. Summ. J. 23; Defs.' Reply Supp. Defs.' Mot. Summ. J. 10-11. "Thermal spacers" necessarily cannot fail as a claim reciting a system and a method because "thermal spacers" is not a claim. Cf. Pl.'s Resp. Defs.' Mot. Summ. J. 46 ("The claims recite a 'thermal spacer thermally isolating.' That is a structure, not a method." (emphasis added)). As a matter of law, Defendants cannot succeed on a threadbare argument that is entirely untethered from the claims of the '569 Patent and offer the Court no reason to disturb its prior conclusion as to the indefiniteness of "thermal spacers." Defendants' Motion for Summary Judgment of Noninfringement and Invalidity is therefore DENIED as to indefiniteness. The Court concludes no claims challenged by Defendants in the motion are indefinite.
2. Written Description
"The test for sufficiency of a written description is whether the disclosure clearly allow[s] persons of ordinary skill in the art to recognize that [the inventor] invented what is claimed." Crown Packaging Tech., Inc. v. Ball Metal Beverage Container Corp., 635 F.3d 1373, 1380 (Fed. Cir. 2011) (alterations in original) (quotation marks omitted); Nuvo Pharms. (Ireland) Designated Activity Co. v. Dr. Reddy's Lab'ys Inc., 923 F.3d 1368, 1376 (Fed. Cir. 2019) ("Th[e] requirement is satisfied only if the inventor convey[s] with reasonable clarity to those skilled in the art that, as of the filing date sought, he or she was in possession of the invention, and demonstrate[s] that by disclosure in the specification of the patent." (second and third alteration in original) (quotation marks omitted)). "Compliance with the written description requirement is a question of fact but is amenable to summary judgment in cases where no reasonable fact finder could return a verdict for the non-moving party." PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 1307 (Fed. Cir. 2008).
Defendants advance two arguments as to invalidity under the written description umbrella. First, Defendants argue that the written description requirement is not met because the '569 Patent "does not describe a 'fire-rated' laboratory duct." Defs.' Mot. Summ. J. 18 (capitalization altered); see also id. at 20 ("[T]he '569 Patent simply does not provide any description of a fire-rated laboratory duct."). As the Court understands it, Defendants are arguing that the '569 Patent claims "fire-rated" laboratory ducts but "that is more than what was invented and described in the patent" because no standards for laboratory ducts exist. Id. at 19.
To support this argument, Defendants point to Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co., 598 F.3d 1336 (Fed. Cir. 2010). Id. at 18. Defendants tell the Court that, in that case, the Federal Circuit "invalidated a claim directed to any vertebrate and mammalian cDNA as being unsupported by a specification that only discussed one species, namely rat cDNA." Id. (quotation marks omitted) Defendants are actually describing Regents of the University of California v. Eli Lilly & Co., 119 F.3d 1559, 1566-69 (Fed. Cir. 1997), which the Federal Circuit referenced throughout its opinion, Ariad Pharms., 598 F.3d at 1349-57. In any event, neither case appears particularly instructive absent analysis and application from Defendants. See Eli Lilly, 119 F.3d at 1568 ("[A] description of rat insulin cDNA is not a description of the broad classes of vertebrate or mammalian insulin cDNA. A written description of an invention involving a chemical genus, like a description of a chemical species, requires a precise definition . . . ." (emphasis added) (quotation marks omitted)); Ariad Pharms., 598 F.3d at 1354-55. Defendants' passing reference to Gentry Gallery, Inc. v. Berkline Corporation, 134 F.3d 1473 (Fed. Cir. 1998), Defs.' Mot. Summ. J. 20, similarly lacks explanation. See Gentry Gallery, 134 F.3d at 1478-80 (concluding that claims in a sofa patent "directed to sectional sofas in which the location of the recliner controls [wa]s not limited to the console" were invalid because "the original disclosure clearly identifie[d] the console as the only possible location for the controls" and "the scope of the right to exclude may be limited by a narrow disclosure" (emphasis added)). The experts agree that a fire-rated duct can be used in a laboratory regardless of whether that duct has a rating specific for laboratory installations, see Crimi Feb. 24, 2021 Dep. 224:21-225:5, ECF No. 67-6; Morse Dep. 99:7-15, ECF No. 74-3, and neither the construction of the term "fire-rated" nor the language of the specification compels a conclusion that the rating must be specific to the installation, see '569 Patent col. 1 ll. 38-39 ("Fire-rated ducts are typically found in installations such as commercial kitchens and laboratories.").
Defendants' second argument is more promising. Defendants argue that the '569 Patent fails the written description requirement as to "thermal spacers" and "thermally isolating." See Defs.' Mot. Summ. J. 20-21. Defendants also contend that the '569 Patent contains insufficient information regarding the thermal gasket. See id. at 21. Defendants emphasize that even Crimi agreed when asked by Defendants' counsel if he would agree that the '569 Patent describes the thermal spacer in terms of the function it performs rather what the thermal spacer is. See id. at 20.
Plaintiff protests that Crimi's answer "was solicited through distraction and trickery" and "[s]uch litigation tactics should not be condoned." Pl.'s Resp. Defs.' Mot. Summ. J. 43-44. This is attorney argument and not obvious from the record. Though the Court agrees with Plaintiff that summary judgment in Defendants' favor is not appropriate as to written description, it does not find Plaintiff has shown Defendants could not prevail given the intensely factual nature of the written description inquiry and the nature of the written description here. See Nat'l Graphics, Inc. v. Brax Ltd., 151 F. Supp. 3d 903, 915 (E.D. Wis. 2015) (noting that "generic directives simply instruct[ing] the public to accomplish the patent's stated goal . . . suggest[ ] that the inventor . . . had not actually reduced [the invention] to practice" and denying summary judgment in light of conflicting expert reports); see also Crown Packaging Tech., 635 F.3d at 1384 ("Where there is a material dispute as to the credibility and weight that should be afforded to conflicting expert reports, summary judgment is usually inappropriate."). Defendants' Motion for Summary Judgment of Noninfringement and Invalidity is thus DENIED as to written description. Whether the written description requirement has been satisfied cannot be resolved at summary judgment.
3. Enablement
The enablement requirement "enforces the essential quid pro quo of the patent bargain by requiring a patentee to teach the public how to practice the full scope of the claimed invention." McRO, Inc. v. Bandai Namco Games Am. Inc., 959 F.3d 1091, 1099-1100 (Fed. Cir. 2020) (quotation marks omitted); see also Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1366 (Fed. Cir. 1997) ("Patent protection is granted in return for an enabling disclosure of an invention . . . ."). The Federal Circuit has stated that this requirement "is satisfied when one skilled in the art, after reading the specification, could practice the claimed invention without undue experimentation." Auto. Techs. Int'l., Inc. v. BMW of N. Am., Inc., 501 F.3d 1274, 1282 (Fed. Cir. 2007) (quotation marks omitted).
"[W]hether a patent satisfies the enablement requirement is a question of law based on underlying factual findings." McRO, 959 F.3d at 1096; Wyeth & Cordis Corp. v. Abbott Lab'ys, 720 F.3d 1380, 1384 (Fed. Cir. 2013) ("Enablement is a question of law based on underlying facts."). To prevail, the challenger "must show by clear and convincing evidence that a person of ordinary skill in the art would not be able to practice the claimed invention without undue experimentation." Alcon Rsch. Ltd. v. Barr Lab'ys, Inc., 745 F.3d 1180, 1188 (Fed. Cir. 2014) (quotation marks omitted). To do so, the challenger must first "put forward evidence that some experimentation is needed to practice the patented claim." Id. After the challenger makes this "threshold showing," id. at 1189, the Court then turns to the factors articulated in In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1988), to "determin[e] whether the amount of that experimentation is . . . 'undue' or sufficiently routine such that an ordinarily skilled artisan would reasonably be expected to carry it out." Alcon Rsch. Ltd., 745 F.3d at 1188. These factors include
(1) the quantity of experimentation necessary, (2) the amount of direction or guidance presented, (3) the presence or absence of working examples, (4) the nature of the invention, (5) the state of the prior art, (6) the relative skill of those in the art, (7) the predictability or unpredictability of the art, and (8) the breadth of the claims.In re Wands, 858 F.2d at 737.
Defendants contend that the '569 Patent requires undue experimentation and therefore fails the enablement requirement. See Defs.' Mot. Summ. J. 21-22. This is because, essentially, the '569 Patent does not teach how to pass a fire test and fire tests are uncertain, complex, and time-consuming. See id. Defendants assert that this is "exactly the 'starting point, the direction for further research,' that is not enabling." Id. at 22 (quoting Auto. Techs. Int'l, 501 F.3d at 1284).
Plaintiff responds that "[e]nablement is not precluded by some experimentation," Pl.'s Resp. Defs.' Mot. Summ. J. 36 (alteration in original) (quoting Wands, 858 F.2d at 736), arguing that the experimentation here is not undue because how to perform and pass a fire test is "well known in the art," id. at 37 (quotation marks omitted). The Court finds the parties' (and their experts') dispute over the extent of the experimentation required by the '569 Patent is intensely factual, with the disputed facts precluding summary judgment as to enablement in either party's favor. See Chamberlain Grp., Inc. v. Lear Corp., 756 F. Supp. 2d 938, 980 (N.D. Ill. 2010) (denying summary judgment as to enablement where parties presented conflicting expert reports). Defendants' Motion for Summary Judgment of Noninfringement and Invalidity is thus DENIED as to enablement. Whether the enablement requirement has been satisfied cannot be resolved at summary judgment.
This is not an exact quote: Rather, the Federal Circuit stated in Wands that "[e]nablement is not precluded by the necessity for some experimentation." Wands, 858 F.2d at 736 (emphasis added).
4. Obviousness
A patent is invalid for obviousness "if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains." 35 U.S.C. § 103. Obviousness "is a question of law based on underlying facts." TriMed, Inc. v. Stryker Corp., 608 F.3d 1333, 1341 (Fed. Cir. 2010); see also KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 427, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007) ("The ultimate judgment of obviousness is a legal determination."). The underlying factual inquiries include "(1) the scope and content of the prior art; (2) the differences between the claims and the prior art; (3) the level of ordinary skill in the pertinent art; and (4) any secondary considerations of non-obviousness." ZUP, LLC v. Nash Mfg., Inc., 896 F.3d 1365, 1371 (Fed. Cir. 2018) (citing Graham v. John Deere Co., 383 U.S. 1, 17-18, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966)).
Plaintiff argues all four of Defendants' obviousness defenses, each based on a different combination of prior art, fail as a matter of law. As to the Coleman Combination, Zogg Combination, and SMACNA Manual Combination, Plaintiff argues that they "do not teach 'thermal spacers thermally isolating' that 'limit the amount of heat conducted through the components.' " See Pl.'s Mot. Summ. J. No Invalidity 1. As to the Duffy Combination, Plaintiff argues it does not teach spacers. See id. at 1-2.
Defendants respond that Plaintiff focuses on only a single issue: the teachings of the prior art, which are questions of fact. See Defs.' Resp. Pl.'s Mot. Summ. J. No Invalidity 9, ECF No. 78. As a general matter, the Court agrees that a motion for summary judgment cannot get very far by ignoring the relevant inquiry. Here, Plaintiff tells the Court it must consider three Graham factors to evaluate obviousness, yet only analyzes one and does not explain why its analysis is dispositive in light of the multipronged inquiry. See Pl.'s Mot. Summ. J. Invalidity 5-18. This appears to be error, because "[a] determination of whether a patent claim is invalid as obvious under § 103 requires consideration of all four Graham factors" because "each of the Graham factors helps to inform the ultimate obviousness determination." See WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1328 (Fed. Cir. 2016); see also Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1360 (Fed. Cir. 2012) ("[T]he obviousness inquiry requires examination of all four Graham factors. Indeed, courts must consider all of the Graham factors prior to reaching a conclusion with respect to obviousness." (citation omitted)). "[T]he strength of each of the Graham factors must be weighed in every case and must be weighted en route to the final determination of obviousness or non-obviousness." WBIP, LLC, 829 F.3d at 1328. Plaintiff's art-by-art approach is too narrow. See KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 418, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007) ("[T]he analysis need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ.").
In any event, "[t]he teachings of a prior art reference are underlying factual questions in the obviousness inquiry." In re Kubin, 561 F.3d 1351, 1355 (Fed. Cir. 2009). Because those teachings are disputed here, and because Plaintiff offers no roadmap for the Court's consideration of the other Graham factors nor explains why its arguments are dispositive in light of the governing law, Plaintiff's Motion for Summary Judgment of No Invalidity is DENIED. Whether the '569 Patent is non-obvious (or obvious) cannot be resolved at summary judgment.
iii. Unenforceability
"Inequitable conduct is an equitable defense to patent infringement that, if proved, bars enforcement of a patent." Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011) (en banc). The Federal Circuit has called inequitable conduct the "atomic bomb" of patent law because "inequitable conduct regarding any single claim renders the entire patent unenforceable." Id. at 1288 (quotation marks omitted).
Inequitable conduct takes multiple forms; one occurs when the patentee withholds material information. See Baxter Int'l, Inc. v. McGaw, Inc., 149 F.3d 1321, 1327 (Fed. Cir. 1998) ("Inequitable conduct includes affirmative misrepresentations of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive."). Defendants contend Plaintiff's failure to disclose the SMACNA Manual constitutes inequitable conduct that renders the '569 Patent unenforceable. See, e.g., Defs.' Sec. Corrected Final Unenforceability & Invalidity Contentions 14-16.
Plaintiff seeks summary judgment as to inequitable conduct, arguing that Defendants cannot establish either prong of the defense, Pl.'s Mot. Summ. J. Inequitable Conduct 9; that is, Defendants cannot "establish both the materiality of the withheld reference and the applicant's intent to deceive," Belcher Pharms., LLC v. Hospira, Inc., 11 F.4th 1345, 1352 (Fed. Cir. 2021) (emphasis added) (quotation marks omitted). Defendants' response makes clear that Defendants cannot establish the second element as a matter of law.
Intent requires that "the accused infringer . . . prove by clear and convincing evidence that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it." Therasense, 649 F.3d at 1290. Crucially, "[i]ntent to deceive may be found only if specific intent to deceive is the single most reasonable inference able to be drawn from the evidence. If more than one reasonable inference is possible, intent to deceive cannot be found." TransWeb, LLC v. 3M Innovative Props. Co., 812 F.3d 1295, 1304 (Fed. Cir. 2016) (quotation marks and citations omitted).
Plaintiff argues in its motion that Defendants lack evidence demonstrating that Duffy knew of the SMACNA Manual's materiality and withheld it with deceptive intent. Pl.'s Mot. Summ. J. Inequitable Conduct 14-18. In particular, Plaintiff points to Duffy's deposition testimony that he has never read (or even "touched") a SMACNA Manual. Id. at 15 (quotation marks omitted). Plaintiff also argues that "there is no evidence that Mr. Duffy . . . knew about or had ever before seen" the relevant figures in the SMACNA Manual. Id.
Defendants respond that "[t]here is at least a genuine dispute regarding an intent to deceive." Defs.' Resp. Pl.'s Mot. Summ. J. Inequitable Conduct 28 (emphasis omitted). Defendants suggest Duffy's testimony may not be credible, see id. at 29 ("[S]uch testimony is directly at odds with Mr. Duffy's demonstrable familiarity with the SMACNA Manual . . . ."), but begin and end with the argument that it is "equally problematic" if Duffy "refused" to read the SMACNA Manual to avoid learning of its materiality and withheld it on that basis, see id. at 28-30. However, the case Defendants cite to for that proposition, id. at 2, 30, stands for the opposite conclusion, see Golden Hour Data Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367, 1378 (Fed. Cir. 2010), overruled on other grounds by Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020 (Fed. Cir. 2015) ("[I]f [the inventors] did not read the brochure (and did not do so to avoid learning of damaging information), those actions regarding the failure to disclose the information on the inside of the brochure would at most, amount to gross negligence. Gross negligence is not inequitable conduct."). As a matter of law, Defendants cannot succeed on their "heads I win, tails you lose" theory of inequitable conduct. See Therasense, 649 F.3d at 1290 ("[T]he evidence must be sufficient to require a finding of deceitful intent in the light of all the circumstances." (quotation marks omitted)). The conduct they argue is most likely to have occurred is not inequitable conduct as a matter of law. And in any event, Defendants' evidence, at best, establishes that Duffy has a cursory awareness of (not "demonstrable familiarity" with) the SMACNA Manual because some of its contents generally relate to his work. See, e.g., Defs.' Resp. Pl.'s Mot. Summ. J. Inequitable Conduct 29 (arguing that Duffy "knew of" the SMACNA Manual and was "familiar enough" with the SMACNA Manual to infer that it contains a particular teaching (quotation marks omitted)). Accordingly, Plaintiff's Motion for Summary Judgment Dismissing Defendants' Inequitable Conduct Affirmative Defense is GRANTED. Cf. Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1367 (Fed. Cir. 2008) ("If a threshold level of intent to deceive or materiality is not established by clear and convincing evidence, the district court does not have any discretion to exercise and cannot hold the patent unenforceable regardless of the relative equities or how it might balance them.").
Defendants ask pursuant to Federal Rule of Civil Procedure 56(d) for more time to obtain discovery from Plaintiff's patent prosecution counsel, a Canadian attorney. Defs.' Resp. Pl.'s Mot. Summ. J. Inequitable Conduct 30-31. Federal Rule of Civil Procedure 56(d) permits a court to deny or defer consideration of a motion for summary judgment "[i]f a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition." The Court finds that Defendants have not made such a showing: Defendants' counsel's declaration, Shimota Decl., ECF No. 80-8, and the attached exhibits show only that Defendants have had difficulty securing discovery from the Canadian attorney and that there is a possibility he could have relevant information related to a separate, entirely speculative theory of inequitable conduct. Cf. Defs.' Resp. Pl.'s Mot. Summ. J. Inequitable Conduct 30 (arguing that "testimony of prosecution counsel is ordinarily highly pertinent to a finding of inequitable conduct" because prosecution counsel also has a duty to disclose material information).
iv. Damages
Defendants finally argue that "the evidence is insufficient to support an award of lost profits or convoyed sales." Defs.' Mot. Summ. J. 24 (capitalization altered) (emphasis omitted). The Court addresses each in turn.
1. Lost Profits
A patentee may recover lost profits by establishing "(1) demand for the patented product; (2) absence of acceptable non-infringing alternatives; (3) manufacturing and marketing capability to exploit the demand; and (4) the amount of profit it would have made." Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1285 (Fed. Cir. 2017) (citing Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152, 1156 (6th Cir. 1978)). The Federal Circuit has commented that "[t]he second factor, absence of acceptable non-infringing alternatives, often proves the most difficult obstacle for patent holders." Id. at 1286. "Under this factor, if there is a non[-]infringing alternative which any given purchaser would have found acceptable and bought, then the patentee cannot obtain lost profits for that particular sale." Id.
Defendants argue that "no reasonable jury could find the absence of non-infringing alternatives" in light of the expert reports. See Defs.' Mot. Summ. J. 24-25 ("Dr. Morse[ ] provided no less than five acceptable non[-]infringing alternatives . . . . [Defendants' damages expert] Mr. Clemons[ ] similarly opined on the economic acceptability of . . . existing market solutions . . . ." (emphasis omitted) (citation omitted)). Although Plaintiff's expert John Curtis opined that "no acceptable non-infringing alternatives appear to have been available," Curtis Report 16-20, ECF No. 69-3, Defendants argue that Curtis cannot render that conclusion, see Defs.' Mot. Summ. J. 25.
To make this argument, Defendants point to Webasto Thermo & Comfort North America, Inc. v. BesTop, Inc., Case No. 16-cv-13456, 2019 WL 3334563, at *5-7 (E.D. Mich. July 25, 2019). In Webasto, the district court granted a motion to exclude the defendant's damages expert's testimony regarding a hypothetical non-infringing alternative because the expert's report and deposition testimony "demonstrate[d] without question that his entire opinion . . . [wa]s 100% a regurgitation of what he was told in conversation" by an engineer. Id. at *5. Applying Federal Rules of Evidence 602, 701, and 702, the court reasoned that the expert witness had "absolutely no independent expertise or knowledge regarding the alleged alternative non-infringing design-around about which he opines and relie[d] entirely on what he was told in conversation by [the engineer], who [could not] offer any of the underlying opinions." Id. at *6. Analogizing to Webasto, Defendants argue that Curtis, an accountant, cannot rely on conversations with Plaintiff's employee Paul Wells to form his various opinions as to market alternatives. See Defs.' Mot. Summ. J. 25.
Plaintiff distinguishes Webasto, arguing that the excluded opinions here concern existing market alternatives rather than a hypothetical product. See Pl.'s Resp. Defs.' Mot. Summ. J. 51. Defendants reply that Webasto "does not recognize such a distinction," Defs.' Reply Supp. Def. Mot. Summ. J. 12 n.3, but the Webasto court had no reason to consider that scenario.
Of course, "[a] party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence" at summary judgment. Fed. R. Civ. P. 56(c)(2). But admissibility is governed by the Federal Rules of Evidence. Whether the facts at hand are similar to any other case (particularly an unreported district court case) is not the inquiry. The parties' Webasto proxy war thus has limited utility.
Given that neither Defendants' motion nor Plaintiff's response (in which Plaintiff argues that certain other expert opinions are inadmissible, see Pl.'s Resp. Defs.' Mot. Summ. J. 49-50) engages with the Federal Rules of Evidence whatsoever, the Court is convinced that the best approach is to deny summary judgment as to lost profits. If this case proceeds to trial, the parties will have the opportunity to file motions in limine as to the inadmissibility of certain evidence, including expert evidence. The parties should engage directly with the relevant rules and explain at that time if those motions have dispositive consequences. Accordingly, Defendants' Motion for Summary Judgment of Noninfringement and Invalidity is DENIED as to lost profits. This issue cannot be resolved at summary judgment.
2. Convoyed Sales
"A patentee may recover lost profits on unpatented components sold with a patented item, a convoyed sale, if both the patented and unpatented products together were considered to be components of a single assembly or parts of a complete machine, or they together constituted a functional unit." Am. Seating Co. v. USSC Grp., Inc., 514 F.3d 1262, 1268 (Fed. Cir. 2008) (quotation marks omitted). For example, in American Seating, the patented invention was a wheelchair restraint system for vehicles, and the unpatented product was passenger seats. Id. at 1265. The Federal Circuit affirmed the district court's conclusion that the restraint system and seats lacked the requisite functional relationship because, among other reasons, the products operated independently and "[t]he evidence show[ed] that passenger seats command[ed] a market value and serve[d] a useful purpose independent of the patented" restraints. Id. at 1268-69. In Juicy Whip v. Orange Bang, the Federal Circuit reversed the district court's "clearly erroneous" conclusion that a patented syrup dispenser and unpatented syrup had no functional relationship because "[t]he dispenser needs syrup and the syrup is mixed in a dispenser. Such is indeed a functional relationship." Juicy Whip, Inc. v. Orange Bang, Inc., 382 F.3d 1367, 1371-73 (Fed. Cir. 2004).
Defendants argue that Plaintiff "does not attempt the rigorous functional relationship test." Defs.' Mot. Summ. J. 26. In other words, Defendants contend that Plaintiff's unpatented products "have essentially no functional relationship to the patented invention," Am. Seating Co., 514 F.3d at 1268. But Defendants also have a more elemental grievance: That Plaintiff has not even identified the unpatented product(s) at issue. See Defs.' Mot. Summ. J. 27. Defendants cite to DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314, 1333 (Fed. Cir. 2009) to suggest that convoyed sales damages cannot be awarded "where [the] damages expert [can]not identify specifically what products he included in his lost-profits analysis." Id. at 27 (quotation marks omitted). That does not seem to be the exact holding, but Defendants' arguments are well-taken. Plaintiff has neither identified any unpatented product(s) at issue nor articulated any basis for a functional relationship.
"[The plaintiff's] damages expert could not identify specifically what products he included in his lost-profits analysis, but speculated [at trial] that [the] pull-through products [that he included in his analysis] included such things as head braces, vests, and other products not used in spinal surgeries." DePuy Spine, 567 F.3d at 1333. "Because it [wa]s undisputed that [the plaintiff's] unpatented pull-through products neither compete[d] nor function[ed] with its patented . . . [surgical screws] and were sold (i.e., 'pulled-through') only by virtue of [its] business relationship with surgeons," the Federal Circuit held that "[the plaintiff] was not legally entitled to recover lost profits on those unpatented products." Id. at 1333-34.
Plaintiff responds with Curtis's report, Pl.'s Resp. Defs.' Mot. Summ. J. 53, in which Curtis explains that Plaintiff's head of mechanical sales informed him that Plaintiff offers a variety of products relating to its patented technology and often generates additional sales because of it, Curtis Report 22. Curtis also opines that sales of Plaintiff's patented products promote sales of related duct and exhaust products because customers often request that the same manufacturer provide related products. Id. at 26. This cannot be sufficient to avoid summary judgment. Plaintiff argues that Defendants have "present[ed] no affirmative evidence to demonstrate the absence of convoyed sales," Pl.'s Resp. Defs.' Mot. Summ. J. 53, but Plaintiff misunderstands its burden, see Fed. R. Civ. P. 56(c)(1)(b). Asked by Defendants to "put up or shut up," Weaver v. Champion Petfoods USA Inc., 3 F.4th 927, 938 (7th Cir. 2021) (quotation marks omitted), Plaintiff now must put up facts from which a functional relationship between its patented technology and any accompanying unpatented product(s) could be found, see Johnson v. Cambridge Indus., Inc., 325 F.3d 892, 901 (7th Cir. 2003) ("As we have said before, summary judgment is the 'put up or shut up' moment in a lawsuit, when a party must show what evidence it has that would convince a trier of fact to accept its version of events." (quotation marks omitted)). No reasonable jury could award convoyed sales damages based on Plaintiff's thin and vague facts. Defendants' Motion for Summary Judgment of Noninfringement and Invalidity is thus GRANTED as to convoyed sales.
A similar link was rejected by the Federal Circuit in American Seating. See Am. Seating, 514 F.3d at 1268 ("The fact that customers prefer that passenger seats and tie-down wheelchair restraint systems come from a single supplier for ease of purchase, repair, and uniform design and appearance, does not compel the conclusion that the seats and tie-down system are analogous to components of a single assembly . . . ." (quotation marks omitted)).
CONCLUSION
Accordingly, Plaintiff DuraSystems Barriers Inc.'s Motion for Summary Judgment of Patent Infringement, ECF No. 63, is GRANTED; Motion for Summary Judgment of No Invalidity, ECF No. 64, is DENIED; and Motion for Summary Judgment Dismissing Defendants' Inequitable Conduct Affirmative Defense, ECF No. 65, is GRANTED. Defendants Van-Packer Co. ("Van-Packer") & Jeremias, Inc.'s Motion for Summary Judgment of Noninfringement and Invalidity, ECF No. 67, is DENIED as to non-infringement, DENIED as to indefiniteness, DENIED as to written description, DENIED as to enablement, DENIED as to lost profits, and GRANTED as to convoyed sales. Defendants' motion to seal, ECF No. 68, and Plaintiff's motion to seal, ECF No. 75, are DENIED. Defendants' motion to withdraw, ECF No. 71, is GRANTED. The Clerk is DIRECTED to strike ECF No. 62 and to unseal the exhibits on the docket at ECF No. 69-1, ECF No. 69-2, ECF No. 69-3, ECF No. 69-4, ECF No. 76-1, and ECF No. 76-2. The parties are encouraged to explore settlement and should file a status report advising the Court as to how this case will proceed within 60 days of service of this Order.