The sufficiency of evidence required to support a denial of a motion for judgment as a matter of law and a motion for a new trial for infringement, willful infringement, and damages.
Background:[1]
Provisur Technologies, Inc. owns U.S. Patent Nos. 10,625,436; 10,639,812; and 7,065,936, which generally relate to food-processing machinery. The ’436 and ’812 patents relate to high-speed mechanical slicers used in food processing plants to slice and package foods, such as meats and cheeses. The ’936 patent relates to a fill and packaging apparatus for loading sliced foods into packages.
In particular, the ’936 patent describes two alternative ways to fill pockets with a shuttle conveyor: retract-to-fill and advance-to-fill. The retract-to-fill embodiment begins with the shuttle conveyor in the extended position and fills the pockets starting with the farthest from the slicer until the conveyor is fully retracted. The advanced-to-fill embodiment takes the opposite approach, beginning with the shuttle conveyor in the retracted position, filling the pockets closest to the slicer, and advancing until the conveyor is fully extended.
Provisur sued Weber, Inc. and associated entities (collectively “Weber”) for willful infringement of the ’812, ’436, and ’936 patents in the United States District Court for the Western District of Missouri. Provisur asserted that Weber’s food slicers infringe the ’812 and ’436 patents and that Weber’s SmartLoader products infringe the ’936 patent. The only claim of the ’936 patent asserted was claim 14, which covers the advance-to-fill embodiment.
After trial, a jury found Weber willfully infringed claims 9-12 and 16 of the ’436 patent; claims 1, 7, and 8 of the ’812 patent; and claim 14 of the ’936 patent. The jury awarded Provisur $3 million in damages for willful infringement of the ’936 patent and $3.7 million each, for willful infringement of the ’436 and’812 patents.
Following the verdict, Weber moved for judgment as a matter of law (JMOL) on the issues of infringement and willfulness, and also moved for a new trial on infringement, willfulness, and damages. The district court denied both motions, and Weber appealed to the Federal Circuit.
Issues:
- Did the district court err in denying Weber’s motion for judgement as a matter of law of non-infringement and no willfulness for claim 14 of the ’936 patent?
- Did the district court err in denying Weber’s motion for a new trial on infringement, willfulness, and damages?
Holding:
- Yes, the district court erred in not granting Weber’s JMOL. Reversed as to willful infringement and reversed and remanded for further proceedings as to infringement.
- Yes, the district court erred by not granting a new trial on damages. Reversed and remanded.
Reasoning:
The Federal Circuit reviewed the denial of Weber’s JMOL de novo, which is the standard for the Eighth Circuit. Provisur Technologies, Inc. v. Weber, Inc., 2023-1438, 5 (Fed. Cir. 2024) (citing Apple Inc. v. Wi-LAN Inc., 25 F.4th 960, 969 (Fed. Cir. 2022) and Penford Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 662 F.3d 497, 503 (8th Cir. 2011)). The legal standard for when a court may render judgment as a matter of law is when “there is no legally sufficient evidentiary basis for a reasonable jury to find for the nonmoving party on an issue and all of the evidence directs against a finding for the nonmoving party.” Id. at 5 (citing Jones v. TEK Indus., Inc., 319 F.3d 355, 358 (8th Cir. 2003)). Applying this legal standard, the Federal Circuit reviewed the infringement and willfulness issues in turn.
Infringement
Infringement is a question of fact that, when tried to a jury, is reviewed on appeal for substantial evidence. Id. at 6 (citing Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1309 (Fed. Cir. 2009)). Under Federal Circuit law a factual finding is supported by substantial evidence if “a reasonable jury could have found in favor of the prevailing party in light of the evidence presented at trial.” Provisur, 23-1438, at 6 (quoting Godo Kaisha IP Bridge 1 v. TCL Commc’n Tech. Holdings Ltd., 967 F.3d 1380, 1383 (Fed. Cir. 2020)).
Weber dropped its noninfringement arguments with respect to the ’812 and ’436 patents in light of an intervening decision, and the Federal Circuit affirmed the district court’s denial of JMOL for non-infringement for those patents. The Federal Circuit then addressed Weber’s only remaining argument, relating to the ’936 patent.
Weber’s main argument with regard to the district court’s denial of JMOL for noninfringement of the ’936 patent was that Provisur failed to prove the Weber SmartLoader satisfies the claimed advance-to-fill limitation. Provisur, 23-1438, at 6. The Federal Circuit held that claim 14 of the ’936 patent requires an advance-to-fill conveyor while the record indisputably showed that Weber’s SmartLoader is sold to customers as a retract-to-fill conveyor. Id. There were no pictures or videos showing the SmartLoader operating as an advance-to-fill conveyor, nor did Provisur’s expert, Dr. Keith Vorst, find any evidence showing that Weber’s customers ever use the SmartLoader to operate as an advance-to-fill conveyor. Id. at 7.
Instead, Provisur’s theory of infringement relied on establishing that Weber’s SmartLoader could be reprogrammed to operate as an advance-to-fill conveyer. Provisur relied on testimony from its expert Dr. Vorst as evidence to support this theory. Dr. Vorst testified that someone could configure the SmartLoader as an advance-to-fill conveyer through the SmartLoader’s human machine interface (HMI) by creating a new program and adjusting parameters of the conveyor. Id. at 7-8.
The Federal Circuit acknowledged that “[a]n accused device may be found to infringe if it is reasonably capable of satisfying claim limitations.” Provisur, 23-1438, at 8 (quoting Hilgraeve Corp. v. Symantec Corp., 265 F.3d 1336, 1343 (Fed. Cir. 2001)). However, the court also noted that “a device does not infringe simply because it is possible to alter it in a way that would satisfy all the limitations of a patent claim.” Id. (quoting High Tech Med. Instrumentation, Inc. v. New Image Indus., Inc., 49 F.3d 1551, 1555 (Fed. Cir. 1995)). Instead, an accused device “meet[s] the capability standard if it is readily configurable to infringe.” Id. To support this proposition the Federal Circuit cited to two previous cases holding that accused devices infringed where the user only had to activate the functions that were already present. Id. (citing Fantasy Sports Props., Inc. v. Sportsline.com, Inc., 287 F.3d 1108, 1118 (Fed. Cir. 2002)); Finjan, Inc. v. Secure Comput. Corp.,626 F.3d 1197, 1205 (Fed. Cir. 2010)).
The Federal Circuit held that Provisur proffered no evidence that Weber’s customers could readily activate the alleged advance-to-fill functionality. While Dr. Vorst testified about configuring the SmartLoader through the HMI, Dr. Vorst had access to screens that Weber’s customers do not. Id. at 8. Weber’s experts testified that customers only have access to one of the HMI screens, and that most of the HMI screens are available only to Weber’s service technicians. In other words, the record showed Weber’s customers did not have access to the screens necessary to reconfigure the SmartLoader as an advance-to-fill conveyer.
The Federal Circuit distinguished this case from Fantasy Sports and Finjan because this case did not involve a scenario “where customers can simply activate the infringing configuration.” Provisur, 23-1438, at 9. Rather, the only way for the SmartLoader to infringe claim 14, i.e., operate as an advance-to-fill conveyer, would be for Weber’s technicians to modify it to do so. Additionally, even with access to the full array of HMI screens, Dr. Vorst testified only that the SmartLoader could have been reconfigured as an advance-to-fill conveyer, not that he was able to reconfigure it as such. As a result, the Federal Circuit held that Dr. Vorst’s testimony was not substantial evidence demonstrating Weber’s SmartLoader infringes. Thus, the Federal Circuit reversed the district court’s denial of Weber’s JMOL for noninfringement and remanded for further proceedings.
Willfulness
Next, the Federal Circuit addressed the denial of JMOL for willful infringement, which is also a question of fact reviewed for substantial evidence. Provisur, 23-1438, at 10 (citing Polara Eng’g Inc v. Campbell Co., 894 F.3d 1339,1353 (Fed. Cir. 2018)). For establishing willfulness, “a patentee must show that the accused infringer had a specific intent to infringe at the time of the challenged conduct.” Id. at 10 (quoting BASF Plant Sci., LP v. Commonwealth Sci. and Indus. Rsch. Org., 28 F.4th 1247, 1274 (Fed. Cir. 2022)).
Weber’s argument was that the district court erred in admitting testimony in violation of 35 U.S.C. § 298, and the remaining evidence was insufficient to support the jury’s finding of willful infringement. Section 298 prohibits a party from using the accused infringer’s failure to obtain the advice of counsel as an element of proof that the accused infringer willfully infringed. Provisur, 23-1438,at 11.
Before trial, the district court granted Weber’s motion to exclude under Section 298 testimony from one of Provisur’s experts asserting Weber’s infringement was willful based in part on Weber’s failure to present the evidence of advice of counsel. However, at trial the same expert testified about Weber’s failure to consult a third party to evaluate the allegedly infringed products, specifically that Weber did not provide any evidence that it conducted a freedom to operate analysis. According to the same expert, this analysis is “typically reviewed by a qualifying attorney.” Provisur, 23-1438,at 11. The expert also referenced other potential legal services Weber allegedly failed to seek.
The Federal Circuit rejected Provisur’s argument that the expert’s testimony was about industry standards for intellectual property management. Instead, the Federal Circuit held the expert’s testimony violated Section 298 because it did not differentiate between legal and non-legal services with regard to consulting a third party. The Federal Circuit viewed the testimony as Provisur attempting to “substitute advice from a third party for advice of counsel,” as a way of circumventing Section 298. Provisur, 23-1438,at 11-12.
The Federal Circuit found that while the remainder of the expert testimony was admissible, it was insufficient as a matter of law to establish willfulness. At most, the remaining testimony showed Weber had knowledge of the asserted patents. But the issue was whether Weber knew of its alleged infringement. The Federal Circuit reiterated that “knowledge of the asserted patent and evidence of infringement[] [are] necessary but not sufficient, for a finding of willfulness.” Provisur, 23-1438,at 12 (quoting Bayer Healthcare LLC v. Baxalta Inc., 989 F.3d 964, 988 (Fed. Cir. 2021)). Because there was no evidence Weber knew of its alleged infringement, the Federal Circuit held the district court erred in not granting Weber’s JMOL for no willful infringement. Thus, the Federal Circuit reversed.
Damages
Lastly, the Federal Circuit reviewed the damages award, applying Eighth Circuit law. The Eighth Circuit reviews a denial of a motion for a new trial on damages for abuse of discretion. Provisur, 23-1438, at 13 (citing Exmark Mfg. Co. Inc. v. Briggs & Stratton Power Prods. Grp., LLC, 879 F.3d 1332, 1347 (Fed. Cir. 2018)). Evidentiary rulings, including the admissibility of damages expert evidence, are also reviewed for abuse of discretion. Id. at 13 (citing Barrett v. Rhodia, Inc.. 606 F.3d 975, 980 (8th Cir. 2010)). A district court abuses its discretion when its decision is based on clearly erroneous findings of fact, is based on erroneous interpretations of the law, or is clearly unreasonable, arbitrary or fanciful. Id. at 13 (quoting Whiteserve, LLC v. Comput. Packages, Inc., 694 F.3d 10, 26 (Fed. Cir. 2012)).
The jury awarded Provisur about $10.5 million in the form of a reasonable royalty. The allegedly infringing features were contained in respective larger components, and the components were part of an entire multicomponent slicing line. The damages verdict rested on Provisur’s reliance on the entire market value rule. Weber argued the district court erred by permitting Provisur to use this rule.
The Federal Circuit held that an awarded reasonable royalty must be “attributable to the infringing features.” Provisur, 23-1438, at 14 (quoting Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 904 F.3d 965, 977 (Fed. Cir. 2018)). That is, royalties must be apportioned between infringing and noninfringing features of the accused product. Id. Furthermore, the apportionment analysis generally requires determining a royalty base that a royalty rate is applied to. Id. For multicomponent products accused of infringement, the royalty base is often based on the smallest salable patent-practicing unit. Id. at 14 (citing LaserDynamics, Inc. v. Quanta Comput., Inc., 904 F.3d 965, 977 (Fed. Cir. 2018)). When using “an entire multi-component product” as the base, the patentee is required to prove the patented feature is the basis for customer demand for the product. Id.
The Federal Circuit held Provisur’s use of the entire market value rule was impermissible because Provisur did not present evidence sufficient to demonstrate the patented features drove customer demand for the entire slicing line. The Federal Circuit found Provisur’s expert’s testimony, that the patented features drive the demand or substantially create the value of Weber’s accused products, conclusory and lacking supporting evidence.
In particular, Provisur’s expert testified that various features on the slicing machines were considered conventional, and the patented features were unique selling points. However, his testimony did not clarify or explain why these alleged “conventional” features do not provide any value or drive customer demand. Additionally, there was not sufficient evidence proffered by Provisur to show that other features of the slicing line do not cause customers to purchase the accused products. Neither were any market studies or customer surveys conducted to determine whether the demand for Weber’s slicing lines was driven by the patented features. The Federal Circuit made clear that there is “no one type of evidence needed to show the patented features drove customer demand,” but the problem here was that there was no evidence showing this. As a result, the district court erred in not granting a new trial on damages. Thus, the Federal Circuit reversed the district court’s denial of a new trial on damages.
Conclusion
The Federal Circuit affirmed the district court’s denial of Weber’s motion for JMOL of non-infringement of the ’436 and ’812 patents and reversed the denial as to the ’936 patent. The Federal Circuit distinguished this case from those in which customers activate an infringing feature, and Provisur’s proffered evidence was insufficient to show any of Weber’s customers actually infringed by modifying the slicers or that the customers even would have been able to do so. The Federal Circuit reversed the district court’s denial of JMOL on willful infringement because Provisur’s proffered evidence only showed that Weber knew of the asserted patents. Instead, to survive a JMOL on willful infringement a party must show based on the evidence that the accused infringer not just knew of the asserted patents, but that it knew of its alleged infringement. The Federal Circuit reversed the district court’s denial of a new trial on damages because Provisur was unable to proffer sufficient evidence to show that the patented features provided unique value or drove customer demand, as is required for invoking the entire market value damages rule. The Federal Circuit remanded the case for further proceedings on infringement and damages consistent with its decision.
FOOTNOTES
[1] Provisur Technologies, Inc. v. Weber, Inc., 2023-1438 (Fed. Cir. 2024)