Judges: Lourie (author), Rader, Schall [Appealed from E.D. Tex., Judge Clark]

In Hearing Components, Inc. v. Shure Inc., Nos. 09-1364, -1365 (Fed. Cir. Apr. 1, 2010), the Federal Circuit reversed the district court’s determination that claims 1 and 2 of U.S. Patent No. 5,401,920 (“the ’920 patent”) were invalid as indefinite. The Court also reversed the district court’s grant of JMOL that “straight-nozzle” earphone products sold by Shure Inc. (“Shure”) did not infringe claims 17 and 36 of U.S. Patent No. 4,880,076 (“the ’076 patent”) and claims 1 and 13 of U.S. Patent No. 5,002,151 (“the ’151 patent”), affirmed the district court’s denial of JMOL that Shure’s “barbed-nozzle” earphone product did infringe those claims, and affirmed the district court’s holding that the ’076 and ’151 patents were not invalid or unenforceable on obviousness or laches grounds.

Shure sells earphone products, including earphones with two different nozzle designs, straight and barbed. Hearing Components, Inc. (“Hearing Components”), the owner of the patents-in-suit, accused Shure of infringing its patents with both designs. Hearing Components brought suit one day less than six years from the date it knew of Shure’s alleged infringement.

The ’920 patent is directed to a sound-transmitting device having a disposable wax guard. Asserted claim 1, from which claim 2 depends, states in the preamble that this wax guard is “readily installed and replaced by a user.” The district court found this term indefinite during claim construction, reasoning that the term “readily” was not sufficiently explained in the specification since it would be difficult or impossible to determine what test group of users would be used to measure ease of installation and replacement as well as the degree of difficulty sufficient to avoid infringement.

The related ’076 and ’151 patents are directed toward a hearing aid piece connected to a disposable foam sleeve. The asserted claims of these patents require an “attaching” or “fastening” means for connecting the ear piece to the disposable sleeve. The specifications of these patents disclose several such means, including a screw thread attachment, a ball-and-socket attachment, and a layer of adhesive.

After a trial on the merits, the jury found the asserted claims of the ’076 and ’151 patents not invalid and infringed by both Shure’s straight- and barbed-nozzle designs. Shure thereafter moved for JMOL of invalidity as well as JMOL of noninfringement. The district court denied Shure’s motion for JMOL of invalidity but granted-in-part its JMOL of infringement. Focusing on infringement under the DOE, the district court held that Shure’s straight-nozzled products did not infringe the asserted claims, reasoning that the “interference fit” utilized by Shure’s products was not equivalent to the various attachment means disclosed in the patents because there was no protuberance, snap, adhesion, or other positive attachment to keep the parts connected. The district court denied Shure’s JMOL with respect to the barbed-nozzle products, as the barbed protuberance was deemed an equivalent structure to the described attachment means.

With respect to the ’920 patent, the Federal Circuit reversed the district court’s determination. As an initial matter, the Court determined that, although the phrase “readily installed and replaced by a user” occurs in the claim preamble, it is nevertheless a claim limitation because it was relied upon to distinguish prior art and is not duplicative of other language in the claim. Slip op. at 11.

However, the Court determined that this limitation is not indefinite. The Court explained that while the claim term “readily” was a term of degree lacking “mathematical precision,” the patent’s specification nevertheless provides an adequate standard for measuring the scope of the phrase. Id. at 12-13. For example, the ’920 patent explains that the “readily installed and replaced wax guard” is “inexpensive and requires no tools for installation or removal.” The ’920 patent also provides prior art examples of hearing aids having wax guards that were difficult to remove or replace, which define the boundary of the claim by negative implication.

The Court disagreed with the concern of the district court that it would be difficult to identify the test group of users for installing or replacing the wax guard. While the ’920 patent describes age and disability as possible exacerbating factors for some users, the Court explained that the patent examples apply to all users. The Court therefore reversed the district court’s indefiniteness determination and remanded for adjudication of issues relating to the ’920 patent. Id. at 15.

With respect to the related ’076 and ’151 patents, the Federal Circuit agreed with the jury that both Shure’s straight- and barbed-nozzle products infringed the asserted claims. Reversing the district court, the Court held that the claimed attaching or fastening means do not require a protuberance, snap connection, adhesion, or any other positive connection with the duct. The Court stated that no positive male structure (such as the barb on Shure’s barbed-nozzle product) is required by the attaching or fastening means, noting that adhesive, which has no positive male structure, is one of the disclosed means of attachment. Moreover, the Court concluded that substantial evidence supported the jury verdict, as the jury heard evidence that “interference fit” was known at the time of the invention to be interchangeable with the described means of attachment. Id. at 21.

In an interesting wrinkle, Shure argued that the scope of equivalent structures covered by the claims should be limited because the inventors had prior knowledge of “interference fit” but chose not to disclose it. The Court rejected this estoppel-like argument, stating that such prior knowledge is necessarily the case with known interchangeability, which nevertheless can support a finding of equivalence. Accordingly, the Court reversed the district court’s grant of JMOL that Shure’s straight-nozzled products do not infringe, and affirmed the court’s denial of JMOL that Shure’s barbed-nozzle products infringe.

With respect to the validity of the ’076 and ’151 patents, the Federal Circuit affirmed the district court’s denial of JMOL upholding the jury’s verdict of nonobviousness. The jury heard conflicting testimony on whether the asserted prior art references contained all of the claim limitations, on motivation to combine, and on secondary considerations. Because of this, the Court concluded that substantial evidence supported the jury’s conclusion that the claimed inventions would not have been rendered obvious by the prior art.

The Court also affirmed the district court’s finding of no laches. Shure argued that Hearing Component’s delay in bringing suit prejudiced Shure because it otherwise could have established at least one more day of delay, which would have invoked the presumption of laches. Shure also argued that it suffered economic prejudice.

The Court rejected both of these arguments, agreeing with the district court that even if the presumption of laches were to apply on equity grounds, there was neither economic nor evidentiary prejudice to Shure. The Court stated that “evidentiary prejudice must consist of some separate disadvantage resulting from the delay, such as loss of records, unavailability of evidence, etc., that prevents a party from proving a separate claim or defense.” Id. at 30. In contrast, if the only missing evidence is evidence of further delay, that does not amount to a showing of evidentiary prejudice. The Court also determined that there was no economic prejudice, noting that the district court permissibly found that Shure had relied on noninfringement opinions of counsel and would not have acted differently if it had been sued earlier. Moreover, while Shure did incur increased damages because of the delay in the infringement finding, it did not prove it was unable to respond in damages to compensate for that infringement. Id. at 31.