Addressing the validity and infringement of two patents, the U.S. Court of Appeals for the Federal Circuit reversed a lower court judgment as a matter of law (JMOL) that the patented invention was invalid and not infringed, reinstating a jury’s $15 million damages award.  Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., Case No. 11-1555 (Fed. Cir., Nov. 15, 2012) (Moore, J.).

The two Transocean patents related to a deepwater drilling vessel having “dual-activity” technology.  The dual-activity technology permits simultaneous drilling and finishing operations by the concurrent use of two cooperating advancing stations, thereby improving operational efficiency.  The defendant, Maersk, entered into a contract with Statoil, offering for sale a deepwater drilling vessel having Transocean’s dual-activity technology.  The contract contained an option-to-modify clause pending the outcome of unrelated district court litigation involving the patents-in-suit.  Maersk modified the vessel to avoid infringement of the claims before delivering it to Statoil.

On remand from a prior Federal Circuit decision finding that Maersk had presented a prima facie case of obviousness, a jury found that Transocean’s evidence of secondary considerations of non-obviousness was sufficient to overcome the prima facie case.  The jury found that Transocean’s patents were valid and infringed by Maersk’s offer for sale, awarding $15 million in damages.  The district court then granted Maersk’s JMOL.  The district court held that Transocean’s patents were invalid, that Maersk did not infringe and that Transocean was not entitled to damages.

On appeal, the Federal Circuit began by reasserting its prior holding that Maersk presented a prima facie case of obviousness.  It then went on to explain that “[t]he establishment of a prima facie case … is not a conclusion on the ultimate issue of obviousness … [and] evidence rising out of the so-called ‘secondary considerations’ must always when present be considered en route to a determination of obviousness.”  The Court held that when evaluating such secondary considerations, the strength of the prima facie showing of non-obviousness may be examined.

The Federal Circuit recognized that it has not often found objective evidence sufficient to overcome a prima facie case of obviousness.  Here however, Transocean presented, and the jury found credible, seven distinct factors supporting non-obviousness—commercial success, industry praise, unexpected results, copying, industry skepticism, licensing and long-felt but unsolved need.  The Federal Circuit agreed, concluding that Transocean had presented substantial evidence to support the jury finding.  As such, the Court stated that Transocean established precisely the sort of case where the objective evidence establishes that an invention appearing to have been obvious in light of the prior art was not. 

Analyzing the jury finding of infringement, the Federal Circuit held that Maersk’s offer for sale of an infringing drilling rig to Statoil was an act of direct infringement and reinstated the jury’s $15 million damages award.  According to the Court, although Maersk did not, in the end, deliver an infringing rig to Statoil, it nonetheless infringed by offering a dual-activity rig for sale. 

The Federal Circuit also reversed the district court’s grant of JMOL that the asserted patent claims were not enabled and the district court’s grant of Maersk’s motion for a new trial.