The Central District of Illinois, in Philippi-Hagenbuch, Inc. et al. v. Western Tech. Serv. Int’l, Inc. et al., Case No. 12-1099 (Judge James E. Shadid) (September 30, 2015), partially granted Plaintiff Philippi’s cross-motion for partial summary judgment on the proper damages period finding that Philippi’s May 2004 letter to Defendant Western was sufficient to provide actual notice under § 287(a).

Philippi and Western are competitors.  They both manufacture off-highway truck bodies and water tanks used in mining.  (slip op. at 1).  Philippi sued Western for infringing two of its patents related to water tanks on March 30, 2012.  The ’091 patent issued on April 15, 2003 and the ’507 patent issued on June 15, 2010.  Western took the position that Philippi was not entitled to damages prior to March 30, 2012 because Philippi did not provide actual or constructive notice earlier than the complaint.  Philippi took the position that its May 20, 2004 letter to Western was actual notice of both patents because the letter identified the ’091 patent and the application that matured into the ’507 patent.

Philippi’s May 2004 letter to Western said:

We have recently become aware that [Western] is offering for sale water tanks that may incorporate features similar to those found in Philippi-Hagenbuch’s water tanks. With this letter we are putting you on notice that Philippi-Hagenbuch has intellectual property rights relating to its proprietary water tank design. U.S. Patent 6,547,091 (“the ‘091 patent”) relates to some of the features incorporated in Philippi-Hagenbuch’s water tanks. A copy of this ‘091 patent is enclosed for your review.

Philippi-Hagenbuch also has patent applications pending in both the U.S. and foreign countries covering additional features of its water tanks. One of these applications has been published as U.S. Patent Application Publication No. US-2003-0230585-A1. A copy of this published application is also enclosed.

Philippi-Hagenbuch intends to enforce its patent rights and any patent rights it obtains from pending U.S. and foreign patent applications. You may want to consider carefully Philippi-Hagenbuch’s patent rights in connection with your water tank products. . . .

Please note that by providing you with actual notice of the published application, Philippi-Hagenbuch gets provisional rights to obtain damages if you make, use, sell, offer for sale, or import into the United States the invention claimed in the published application. In other words, after the date that a patent issues on that application, you could be liable for your actions that occurred before that date.

It is expected that [Western] will ensure that its water tank products are clear of any infringement from the ‘091 patent and all other patents that may issue from the pending patent applications.

(slip op. at 4).

During discovery, Philippi said it did not intend the letter to be “a direct charge of infringement, because [it] didn’t have enough information to make a direct charge at that point.  Rather it was intended as more of a ‘public service’ to make [Western] aware of a patent.”  (slip op. at 7).  Nonetheless, the letter “indicated an expectation that [Western] would ensure that its water tank products were clear of any infringement of the ’901 patent and any patents that could issue from the pending application, which became the ’507 patent.”  Id.

The Court acknowledged that while “there is no specific form or content required to constitute actual notice,” the minimum requirements to be met are:

It is not controlling whether the patentee threatens suit, demands cessation of infringement, or offers a license under the patent. . . . the purpose of the actual notice requirement is met when the recipient is notified, with sufficient specificity, that the patent holder believes that the recipient of the notice may be an infringer. Thus, the actual notice requirement of § 287(a) is satisfied when the recipient is informed of the identity of the patent and the activity that is believed to be an infringement, accompanied by a proposal to abate the infringement, whether by license or otherwise.

(slip op. at 8, quoting SRI Int’l, Inc. v. Advanced Tech. Labs., Inc. et al., Inc., 127 F.3d 1462, 1469-70 (Fed. Cir. 1997)).

The Court concluded that the May 2004 identified the ’091 patent and the application that became the ’507 patent, as well as Western’s water tanks, and thus satisfied the first two requirements. (slip op. at 8).

The Court stated that the “satisfaction of the third requirement was a closer question as there is no threatened suit or offer of a license, and [Philippi’s] deposition testimony suggests that this letter was not intended to be an official accusation of infringement.”  (slip op. at 8).  Following Federal Circuit precedent, the Court noted that the letter was similar to letters found insufficient, and that the letter “conveyed a suspicion of infringement rather than a direct accusation of infringement, stopping short of the language [the Federal Circuit has] found sufficient.”  Id.

The Court held with regard to the ’091 patent:

When these facts are considered in the context of the case precedent, the Court must conclude that the letter falls closer to the line of cases finding that actual notice has been given and sufficiently conveys an objective understanding that [Western] may be infringing the ‘091 patent. Accordingly, the Court finds that the May 2004 letter was sufficient to provide actual notice with respect to the ’091 patent pursuant to § 287(a). Therefore, any damages established with respect to the ’091 patent may be recovered for a period beginning March 30, 2006.

(slip op. at 9).

The Court held with regard to the patent application that matured into the ’507 patent:

Section 154(d) of the Patent Act provides for provisional damages where infringement occurs before a patent actually issues as long as there is notice and the claims of the patent do not change substantially during prosecution. 35 U.S.C. § 154(d). The record simply does not support a conclusion that the claims in the patent application are substantially the same as the claims that ultimately issued in the ’507 patent. The Court therefore concludes that its findings with respect to actual notice for the ’091 patent do not carry over to apply to the pending application that became the ’507 patent, and the May 2004 letter was insufficient to constitute actual notice as to the ’507 patent.

(slip op. at 9-10).