Finding that material not explicitly contained in the single, prior art document may still be considered for purposes of anticipation if incorporated by reference into the document, the U.S. Court of Appeals for the Federal Circuit, reversed and remanded a district court’s summary judgment that patents were not invalid for anticipation. Callaway Golf Company v. Acushnet Company, Case No. 09-1076 (Fed. Cir., Aug. 14, 2009) (Dyk, J.).

Callaway sued Acushnet asserting infringement of several patents directed to multi-layer polyurethane-covered golf balls by some of Acushnet’s Titleist brand golf balls. Acushnet stipulated to infringement under the district court’s claim construction—which was subsequently upheld by the Federal Circuit—leaving Acushnet with defenses of anticipation and obviousness.

Acushnet asserted anticipation based on a single prior art patent (Nesbitt) which expressly taught all but two limitations of the asserted claims. Acushnet argued, however, that these two limitations were in fact present in Nesbitt because they were incorporated by reference from a second prior art patent (Molitor). According to Acushnet, when properly viewed as a single reference, Nesbitt/Molitor anticipates the patents-in-suit as a matter of law. The district court granted summary judgment of no anticipation holding that while the relevant passage specifically incorporated the ionomer resins disclosed in Molitor, it did not indicate with sufficient specificity that it was incorporating Molitor’s teaching of polyurethane. The Federal Circuit reversed. The Court re-affirmed that material not explicitly contained in a single document may still be considered for purposes of anticipation if incorporated by reference, provided that the document “identify with particularity what specific material it incorporates and clearly indicate where that material is found.” The Federal Circuit stated that the relevant passage of Nesbitt “incorporates the entire list of foamable compounds disclosed by Molitor,” which includes polyurethane and ionomer resins. The Court saw “no basis to differentiate between incorporation of the ionomeric resins disclosed in [Molitor] and the other compositions in the list.” The specificity requirement apparently did not require individually naming each incorporated foamable compound, but instead permitted incorporating groups of teachings so long as those groups were identified with specificity.

Acushnet also contended that all asserted claims were obvious. The jury returned a verdict that one dependent claim was obvious, but that the independent claim from which it depended was not obvious. The district court recognized that this rendered the verdict inconsistent, but held the inconsistency harmless because Acushnet had infringed other claims that were found valid without inconsistency. The Federal Circuit agreed that the jury verdict was inconsistent because a “broader independent claim cannot be nonobvious where a dependent claim stemming from that independent claim is” obvious. Applying U.S. Court of Appeals for the Third Circuit law, the Court held that the inconsistency was not harmless and ordered a new trial. Instead, “where a reading of the verdicts that would solve the apparent inconsistency proves impossible […] the appropriate remedy is ordinarily, not simply to accept one verdict and dismiss the other, but to order an entirely new trial.”