ABS Global, Inc. v. Inguran, LLC
914 F.3d 1054
7th Cir.2019Background
- Sexing Technologies (Inguran, LLC and subsidiary XY) holds U.S. Patent No. 8,206,987 (the '987 patent) claiming a photo-damage method to sort stained sperm cells by characteristic (e.g., X vs. Y chromosome); Claim 1 is independent, Claims 2 and 7 are dependent.
- ABS Global developed a competing photo-damage sperm sorter and sued Sexing Tech (W.D. Wis., 2014) alleging antitrust violations; Sexing Tech counterclaimed for patent infringement and breach of a confidentiality agreement.
- At trial the jury found Sexing Tech had violated the Sherman Act but ABS suffered no antitrust injury requiring damages; the jury found ABS infringed the '987 patent and breached the confidentiality agreement; it found Claim 1 and Claim 7 valid but Claim 2 invalid.
- ABS moved for JMOL and a new trial; district court denied JMOL on obviousness and breach, but retained questions about inconsistency between Claim 1 (valid) and Claim 2 (invalid).
- On appeal the Seventh Circuit affirmed denial of JMOL on obviousness and breach of contract, but held the jury verdicts on enablement were irreconcilably inconsistent and ordered a new trial limited to enablement of Claims 1 and 2.
Issues
| Issue | Plaintiff's Argument (ABS) | Defendant's Argument (Sexing Tech) | Held |
|---|---|---|---|
| Obviousness of '987 patent (35 U.S.C. § 103) | Photo-damage sorting was a predictable substitution of known prior-art techniques (Keij) into sperm-sorters (Johnson), so all claims are obvious | Photo-damage had technical obstacles with sperm (viability, "leaky" kill lasers, speed/purity tradeoffs) and Durack overcame nonobvious hurdles | The court affirmed that the patent was nonobvious; JMOL on obviousness denied (patent presumed valid; factual disputes supported nonobviousness) |
| Enablement inconsistency between Claim 1 (valid) and dependent Claim 2 (invalid) | Jury verdict that Claim 2 is not enabled but Claim 1 is cannot stand; dependent claim narrower and must be enabled if independent claim is enabled; inconsistency requires new trial | Dependent Claim 2 may require additional disclosure (sort strategy) that could be lacking while Claim 1 remains enabled | Court held the verdicts irreconcilably inconsistent: dependent Claim 2 cannot be non-enabled while Claim 1 is enabled; reversed denial of new trial and remanded for retrial on enablement of Claims 1 and 2 |
| Breach of confidentiality agreement (contract interpretation under Texas law) | ABS: stolen trade secrets brought by former XY employee are not "disclosed by ST" and thus not covered by the agreement; JMOL should be granted | Sexing Tech: contract defines ST's Confidential Information broadly to include information disclosed by ST or its affiliates and information based on or derived from that information; covers information funneled by former employee | Court affirmed district court: contract language reasonably covers information conveyed by the former employee; verdict of breach stands |
| Appellate jurisdiction (whether Federal Circuit exclusive jurisdiction applies) | ABS: appeal should be in Seventh Circuit; patent counterclaims were permissive and unrelated to antitrust claim | Sexing Tech (implicitly): patent counterclaim might invoke Federal Circuit jurisdiction if compulsory | Court held patent counterclaims were permissive (not compulsory); appeal properly in Seventh Circuit |
Key Cases Cited
- KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (obviousness: predictable solutions and "obvious to try" principles)
- Graham v. John Deere Co., 383 U.S. 1 (1966) (Graham factors for obviousness)
- Microsoft Corp. v. i4i Ltd. P'ship, 564 U.S. 91 (2011) (patent-invalidity proof requires clear and convincing evidence)
- Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1988) (well-pleaded complaint rule for federal-question jurisdiction in patent cases)
- Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996) (claim-construction is a matter of law for the court)
- Dann v. Johnston, 425 U.S. 219 (1976) (early recognition of nonobviousness as prerequisite to patentability)