Digest of Sealant Sys. Int’l, Inc. v. TEK Global, No. 2014-1405, 2014-1428 (Fed. Cir. June 11, 2015) (non-precedential). On appeal from N.D. Cal. Before Dyk, O’Malley, and Wallach.
Procedural Posture: Each side asserted that the other infringed its patent on tire repair technology. Defendant TEK appealed the district court’s (1) denial of its motion for judgment as a matter of law (JMOL) that the ’581 patent owned by AMI is invalid and not infringed, (2) damages award based on the ’581 patent, (3) issuance of a permanent injunction based on the ’581 patent, and (4) grant of summary judgment of invalidity of TEK’s ’110 patent. Plaintiffs cross-appealed the district court’s denial of their motion for attorney fees. The Federal Circuit reversed the summary judgment of obviousness with respect to the ’110 patent and remanded for further proceedings, reversed the denial of JMOL and held the ’581 patent invalid as anticipated, vacated the corresponding damages award and permanent injunction based on infringement of the ’581 patent, and affirmed the denial of attorney fees request by the plaintiffs.
- Standing: Sealant, as neither the owner, nor the assignee or exclusive licensee of the ’581 patent, does not have standing to assert the ’581 patent because a standing deficiency cannot be cured by adding the patent title owner to the suit.
- Standing: AMI, a “sister company” of Sealant, does have standing to assert the ’581 patent in this action because it owned the ’581 patent at the time it first asserted its claim against TEK in Sealant’s previously-filed suit, regardless of when the suit was originally filed by Sealant.
- Joinder/ Waiver: TEK waived its argument as to the misjoinder of AMI when it did not oppose AMI’s joinder or assertion of the ’581 patent in Sealant’s first amended complaint, and stipulated to Sealant and AMI’s second amended complaint, again asserting the ’581 patent.
- Appellate Review/ Claim Construction: The Federal Circuit reviewed the construction de novo because the district court relied only upon intrinsic evidence in reaching its construction.
- Claim Construction: The Federal Circuit found that “cooperating with” means “directly connected to” a tire in light of the specification, which is how a PHOSITA would understand the term, reversing the district court’s construction. Even though the statements in the specification only describe the preferred embodiment, there are no other embodiments disclosed, and a PHOSITA reading the claim in the context of the specification would understand the term as such. If a broader general dictionary definition for “cooperating with” were adopted, the patent “would claim more than the patentee actually invented,” which is improper.
- Obviousness/ Scope and Content of Prior Art: The district court clearly erred in evaluating the scope and content of the prior art for the ’110 patent. Under the construction of “cooperating with” to mean “directly connected to,” the references containing an air tube not directly connected to a tire did not suffice to disclose the claimed element of an “additional hose  cooperating with the tire.” The district court erred in granting summary judgment that the asserted claims of the ’110 patent would have been obvious because it based its finding on an overbroad interpretation of the scope and content of prior art.
- Obviousness/ Motivation to Combine: The district court erred in determining that there existed a motivation to combine prior art references because its finding was based on an erroneous claim construction. And even if a skilled artisan would be motivated to combine the two references, the combination would not produce the claimed invention. The Federal Circuit reversed and remanded the issue of validity of the ’110 patent to the district court, to be considered in light of the narrowed claim construction.
- Appellate Review/ JMOL: A denial of JMOL is reviewed under the law of the regional circuit. The Ninth Circuit reviews the grants and denials of JMOL de novo.
- Anticipation: The asserted claims 27 and 42 of the ’581 patent are anticipated by a prior art publication. The Federal Circuit found no genuine issue of material fact in holding that the disclosure in a prior art reference of a hole having “depth” but without “walls” met the term in claim 27, “receptacle formed in said housing,” which was construed according to its ordinary meaning. Similarly, the same prior art reference disclosed a “reservoir” claimed in claim 42, which was construed to mean “cavity where sealant collects separate from the container.”
- Attorney Fees: The Federal Circuit affirmed the district court’s denial of plaintiffs’ request for attorney fees. Under 35 U.S.C. § 285, attorney fees may be awarded only “in exceptional cases,” and “to the prevailing party.” Because the Federal Circuit held one of the plaintiff’s ’581 patent invalid, and reversed summary judgment of invalidity with respect to the ’110 patent asserted against them, plaintiffs are no longer “prevailing parties” under § 285.
Note: Special thanks to Na Kyung Lee, a 2015 Kenyon summer law clerk.