On March 31, U.S. District Judge Gregory H. Woods (S.D.N.Y.) ruled on various summary judgment motions of Plaintiffs Au New Haven, LLC and Trelleborg Coated Systems US, Inc. (together, “Plaintiffs”) and Defendant YKK Corporation and its affiliates (together, “YKK”). Judge Wood’s decision relied on U.S. Magistrate Judge Sarah Netburn’s (S.D.N.Y.) March 19, 2019 ruling on the parties’ motions to exclude each other’s expert witnesses.

Plaintiffs’ predecessor invented a water-resistant zipper claimed in U.S. Patent No. 6,105,214 (the “‘214 Patent”), and granted an exclusive license to YKK to manufacture the zippers on a large scale. The licensing agreement excluded zippers for the “high end outerwear,” “marine,” “luggage (excluding sports and cosmetic bags),” and “military” markets. Plaintiffs sued YKK in May 2014, alleging that YKK was selling the patented zippers into those excluded markets, thereby infringing the ‘214 Patent and breaching the parties’ licensing agreement. YKK asserted several defenses, including invalidity, non-infringement, and that the licensing agreement does not prohibit sales into the excluded markets.

Expert Testimony

The court denied Plaintiffs’ motion to exclude testimony from YKK’s industry expert, finding that “decades of experience in the outerwear apparel industry” qualified him to testify on industry understandings of the terms “high end outerwear” and “luggage.” Likewise, Plaintiffs’ industry expert testimony passed muster because it did “not present the kind of ‘junk science’ problem that Daubert is meant to address.” Plaintiffs’ industry expert’s experience in the field qualified him to offer his opinion, and any flaws in his proposed definition of the terms would go to weight not admissibility. The court also ruled that Plaintiffs’ industry expert could testify to the lack of non-infringing alternatives in the industry, so long as his testimony was cabined to his personal knowledge of what the industry recognized to be a legal and functioning alternative.

As to YKK’s technical expert’s invalidity report, the court largely denied Plaintiffs’ motion to exclude, finding that he had reliably applied scientific methods. The court ruled, however, that those portions of his report summarizing domestic and foreign patent law should be stricken, as well as those portions offering testimony as to ultimate issues of invalidity. The technical expert could, for example, testify that the ‘214 Patent “does not disclose sufficient information to permit a person of ordinary skill in the art to make the claimed water resistant zipper without undue experimentation,” but not that the ‘214 Patent is invalid for failing to satisfy the enablement requirement. As to YKK’s technical expert’s non-infringement report, the court excluded various portions, including: patent drawings that were not drawn to size, because their prejudicial value outweighed any probative value; marketing materials regarding the water resistance of the zippers, because they were hearsay and not an ultimate basis of his report; and testimony regarding a lack of intent to infringe, because it was not based on any technical expertise.

As to YKK’s damages expert, the court excluded those portions that contained inadmissible legal instruction as to the appropriateness of lost profits damages, as well as calculations based on unreliable data. Finally, the court ruled that although Plaintiffs’ foreign law expert may not testify before the jury, her report would be admissible for summary judgment.

Summary Judgment

Two weeks later, Judge Woods granted summary judgment to YKK on Plaintiffs’ breach of contract claim. The court agreed with YKK’s construction of the contract—while the license gave YKK permission to sell into non-excluded markets, it contained no prohibition on sale into excluded markets. Applying New York law, the court found the licensing agreement was unambiguous: the grant of the license included an “except for” clause, which the court found was unambiguously part of the definition of the scope of permitted use, and not a covenant not to compete in the excluded markets. In the court’s view, for the contract to contain such a covenant not to compete in the excluded markets, the clause would have to, at minimum, require some action by the licensee. Passive acceptance of the license by the licensee did not suffice. The court explained that Plaintiffs’ remedy for sale into the excluded markets would have to come from patent law, rather than through a breach of contract claim.

As to YKK’s invalidity defenses, the court granted summary judgment to Plaintiffs on two of YKK’s asserted bases for invalidity—anticipation and inventorship—but found genuine disputes of material fact as to four other bases of invalidity asserted by YKK: enablement, written description, definiteness, and obviousness.

As to enablement, the court agreed with YKK that the ‘214 Patent omits certain manufacturing parameters, finding that although the patent specified two possible manufacturing methods, it did not “specify the temperature, speed, or pressure to be used during lamination, and it does not identify a specific material to be used as stringer-tape.” According to YKK’s technical expert, without those parameters, someone skilled in the relevant art would have to engage in lengthy and costly experimentation to replicate the claimed zipper. Plaintiffs argued that one of the inventor’s earlier patents disclosed the missing parameters. Judge Woods explained that because “the Patent Act allows for some experimentation so long as it is not undue,” how much and the reasonableness of any required experimentation would have to be resolved at trial.

The court granted Plaintiffs’ motion as to YKK’s invalidity argument based on the existence of an undisclosed joint inventor of the ‘214 Patent, in part because the alleged co-inventor had disavowed such a claim. Judge Woods explained that testimony that the disclosed inventor received a “prototype” of a coated, reverse coil zipper before applying for the ‘214 Patent was insufficient to raise an issue of triable fact because there was evidence that such a zipper was merely then-current state of the art.

Further, the court denied Plaintiffs’ motion as to written description, holding that YKK’s technical expert’s opinion that the ‘214 Patent did not permit a person of ordinary skill in the art to conclude that it controlled the claimed subject matter was sufficient to create a triable issue of fact as to whether the ‘214 Patent’s written description was impermissibly indefinite. The court also denied the parties’ cross motions for summary judgment on obviousness, ruling that the factfinder would ultimately weigh the parties’ competing evidence.

YKK argued that the term “water resistant” did not provide reasonable clarity, rendering the ‘214 Patent’s claims indefinite. In its Markman order, the court construed the term to mean “a water resistant layer on said second surfaces,” which YKK’s technical expert opined was indefinite because there was no industry-wide standard for claiming “water resistance.” Plaintiffs, however, offered evidence showing that the degree of water resistance is not what defines the ‘214 Patent, and that industry members had no difficulty assessing the scope of the patent’s claims. The court denied summary judgment based on this competing evidence.

The court also rejected YKK’s argument that the on-sale bar applied. Although Plaintiffs’ predecessor invoiced a customer for certain zipper prototypes more than one year before the effective filing date of the ‘214 Patent, the court explained that the undisputed evidence showed that that sale was “primarily for experimentation rather than commercial gain,” and so was not invalidating under § 102(b).

Case: Au New Haven, LLC et al. v. YKK Corp. et al., No. 1:15-CV-3411 (S.D.N.Y).