Judges: Dyk, Prost, Moore (author) [Appealed from E.D. Mich., Senior Judge Cohn]
In Sundance, Inc. v. DeMonte Fabricating Ltd., Nos. 08-1068, -1115 (Fed. Cir. Dec. 24, 2008), the Federal Circuit held that the district court abused its discretion in permitting a patent law expert, who was not qualified as a technical expert, to testify on issues of infringement and validity. Additionally, the Court reversed the district court’s judgment that claim 1 of U.S. Patent No. 5,026,109 (“the ’109 patent”) was nonobvious, concluding as a matter of law that the claim was invalid for obviousness under 35 U.S.C. § 103.
The ’109 patent is directed to retractable segmented covering systems. In particular, claim 1 is directed to “[a] retractable segmented cover system used with a truck trailer comprising a plurality of fl exible cover sections . . . wherein a cover section can be removed from the cover system independent of the other cover sections.” Slip op. at 2.
Sundance, Inc. and Merlot Tarpaulin and Sidekit Manufacturing Company, Inc. (collectively “Sundance”) sued DeMonte Fabricating Ltd. and Quick Draw Tarpaulin Systems, Inc. (collectively “DeMonte”) for infringement of claim 1 of the ’109 patent. At trial, DeMonte presented two prior art references to the jury as a basis for a determination of obviousness. DeMonte’s patent law expert, Daniel Bliss, opined that one of ordinary skill in the art would be motivated to combine the two references. A jury concluded that claim 1 was infringed but was obvious. Following the jury’s verdict, the district court held as a matter of law that the ’109 patent was not invalid. After the Supreme Court decided KSR International Co. v. Telefl ex Inc., 127 S. Ct. 1727 (2007), DeMonte moved for reconsideration, which the district court denied. DeMonte also moved for JMOL of noninfringement, which the district court denied. DeMonte appealed both rulings. Sundance cross-appealed the district court’s denial of prejudgment interest for infringement sales made prior to the date it filed suit.
On appeal, the Federal Circuit first considered the district court’s admission of testimony from DeMonte’s patent law expert, Mr. Bliss. DeMonte submitted an expert report of Mr. Bliss, indicating that he would opine on PTO practices and procedures, claim construction, noninfringement, invalidity, and inequitable conduct. Sundance filed a motion in limine to preclude Mr. Bliss from testifying at trial, arguing that Mr. Bliss lacked appropriate technical background and was not qualified to testify about his interpretation of the law or ultimate legal conclusions. The district court denied the motion in its entirety, and at trial, Mr. Bliss testified on the issues of noninfringement and invalidity, including the factual predicates underlying obviousness as well as his conclusion that claim 1 of the ’109 patent would have been obvious.
The Federal Circuit found that the district court abused its discretion in denying Sundance’s motion in limine and that Mr. Bliss was not qualified to testify as an expert witness on the issues of infringement or validity. The Court explained that those issues are “analyzed in great part from the perspective of a person of ordinary skill in the art, and testimony explaining the technical evidence from that perspective may be of great utility to the factfinder.” Slip op. at 7. It pointed out that, despite the absence of any suggestion of relevant technical expertise, Mr. Bliss offered expert testimony on several issues that were exclusively determined from the perspective of ordinary skill in the art. Since Mr. Bliss was not “qualified as an expert by knowledge, skill, experience, training, or education” in the pertinent art, the Court failed to see how he could “assist the trier of fact to understand the evidence or to determine a fact in issue.” Id. at 8 (citing Fed. R. Evid. 702). The Court noted that admitting testimony from a person such as Mr. Bliss, with no skill in the pertinent art, “serves only to cause mischief and confuse the factfinder.” Id. at 9. The Court ruled that unless a patent lawyer is also qualified as a technical expert, his testimony on these kinds of technical issues is improper and thus inadmissible. It concluded that because Mr. Bliss was never offered as a technical expert, and in fact was not qualified as a technical expert, it was an abuse of discretion for the district court to permit him to testify as an expert on the issues of noninfringement or invalidity.
The Federal Circuit next considered the district court’s entry of JMOL overturning the jury’s verdict of obviousness. The Court noted that its holding that the testimony of Mr. Bliss should have been excluded meant that there was no expert testimony supporting a holding of obviousness. Nevertheless, the Court concluded that no such testimony was required because there were no factual issues in dispute as to obviousness. Sundance argued that the combination of the two prior art references that DeMonte relied upon did not disclose every limitation of claim 1 of the ’109 patent. The Federal Circuit disagreed, finding that the combination satisfied every limitation of claim 1 of the ’109 patent.
The Federal Circuit then turned to whether the combination would have been obvious at the time of the invention. Citing KSR, the Court noted that a combination is more likely to be obvious where it “‘simply arranges old elements with each performing the same function it had been known to perform’ and yields no more than one would expect from such an arrangement.” Id. at 16 (quoting KSR, 127 S. Ct. at 1742). The Court found that the truck cover of claim 1 of the ’109 patent was the result of precisely such an obvious combination. The Court added that the truck cover claimed in the ’109 patent represented the “mere application of a known technique to a piece of prior art ready for the improvement,” just as in KSR. Id. at 17 (quoting KSR, 127 S. Ct. at 1740). It concluded that a cover designer of ordinary skill, at the time of the invention, would have found it obvious to combine the teachings of the two prior art references at issue. Thus, the Court reversed the district court’s JMOL that claim 1 of the ’109 patent was nonobvious. Because the Court held as a matter of law that claim 1 was invalid for obviousness, it noted that it did not need to address the issues of infringement or prejudgment interest.