EXMARK MFG. CO. v. BRIGGS & STRATTON POWER PRODS. GRP., LLC, Case No. 2016-2197, January 12, 2018. Before Wallach, Chen, and Stoll.
- A summary judgment of no anticipation or obviousness cannot be based solely on the fact that a patent has survived reexamination.
- Regardless of how low the royalty rate, an expert must still apportion damages and sufficiently tie the royalty rate to the facts of the case.
- Per the Supreme Court’s decision in Halo, it is not for the district court to determine as a threshold matter whether an accused infringer’s defenses to willfulness are objectively reasonable.
Defendant-Appellant Briggs appealed several of the Nebraska district court’s orders: (1) summary judgment of no anticipation or obviousness; (2) denial of summary judgment that claim is indefinite; (3) denial of a new trial on damages; (4) certain evidentiary rulings related to damages; (5) denial of new trial on willfulness; and (6) denial of Briggs’ laches defense. CAFC vacated and remanded based on issue (1), affirmed on issues (2) and (6), and vacated the jury’s finding of willfulness, the jury’s damages award, and the District Court’s enhanced damages award based on issues (3)–(5).
- Summary Judgment: The CAFC held that a patent surviving reexamination cannot be the sole basis for a summary judgment ruling of no anticipation or obviousness. Although the reexamination proceeding operates under a lower standard of patentability and a broader claim construction, the reexamination proceeding has substantive and procedural differences with federal court proceedings. The CAFC thus concluded that a reexamination decision confirming validity does not foreclose the possibility of a jury finding otherwise in district court and does not warrant ipso facto summary judgment that a patent is not invalid.
- Reasonable Royalty: The CAFC held that Exmark’s damages expert’s opinion was inadmissible as it failed to adequately tie the expert’s proposed reasonable royalty rate to the facts of the case. Exmark’s expert explained the advantages of the accused baffle but did not link the advantages to the proffered 5% royalty rate. Exmark defended the rate arguing that the royalty rate is low and only a small fraction of profits. The CAFC rejected this argument, ruling that an expert must tie the damages rate to the facts of the case and apportion damages, no matter how small the damages rate.
- Willfulness: The CAFC held that the district court erred in precluding Briggs from presenting evidence based on a determination under In re Seagate, 497 F.3d 1360 (Fed. Cir. 2007), that Briggs’ litigation defenses were objectively unreasonable. Under Supreme Court precedent in Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016), the district court no longer determines as a threshold matter whether the accused infringer’s defenses are objectively reasonable. Accordingly, the CAFC vacated the jury’s finding of willful infringement and the court’s enhanced damages award, and remanded the issue of whether a new trial is necessary on willfulness.