Arctic Cat Inc. v. Bombardier Recreational Products Inc.
876 F.3d 1350
| Fed. Cir. | 2017Background
- Arctic Cat holds U.S. Pat. Nos. 6,568,969 and 6,793,545, which claim a thrust-steering system for personal watercraft (PWC) that automatically reapplies thrust when the steering is turned to preserve steerability (e.g., off‑throttle assisted steering).
- Arctic Cat sued Bombardier Recreational Products, Inc. (BRP) for infringement based on BRP’s OTAS system in Sea‑Doo PWCs; a jury found the asserted claims valid, awarded a $102.54 per‑unit royalty (effective Oct. 16, 2008), and found BRP’s infringement willful.
- The district court trebled damages under 35 U.S.C. § 284 and awarded Arctic Cat an ongoing post‑judgment per‑unit royalty of $205.08; BRP moved (and was denied) for judgment as a matter of law and to exclude certain expert evidence.
- BRP argued obviousness based principally on combining a 1997 Challenger jet‑boat throttle‑reapplication system with existing PWCs and cited SAE reports and other industry materials as motivating combination; Arctic Cat presented evidence of industry praise, long‑felt need, and reasons not to combine.
- A dispute arose under 35 U.S.C. § 287(a) over marking: Arctic Cat granted Honda a fully‑paid license that expressly absolved Honda of any marking obligation; BRP identified 14 unmarked Honda Aquatrax models it contends practice the patents.
- The Federal Circuit affirmed the denial of JMOL on obviousness, damages (reasonable and ongoing royalty), and willfulness/enhanced damages; it vacated and remanded the JMOL denial on marking because the district court placed the burden incorrectly on BRP rather than on the patentee once BRP met a low initial production burden.
Issues
| Issue | Arctic Cat's Argument | BRP's Argument | Held |
|---|---|---|---|
| Obviousness of asserted claims | Claims are nonobvious; objective indicia (industry praise, long‑felt need) and reasons in prior art counsel against combination | Challenger + PWC would have motivated a skilled artisan to combine; SAE reports and market pressure made solution predictable (KSR) | Jury verdict of nonobviousness supported by substantial evidence; JMOL denied and affirmed (consideration of Graham factors and objective indicia) |
| Marking under 35 U.S.C. § 287(a) | Arctic Cat contends it complied / Honda license excused marking; district court treated BRP as bearing burden | BRP identified 14 unmarked Honda models that may practice the patents and argued Arctic Cat failed to prove marking compliance | Vacated and remanded: court held alleged infringer bears an initial burden of production to identify accused unmarked products; once met, patentee must prove those products do not practice the patents; district court erred in placing full burden on BRP |
| Jury royalty and admissibility of damages expert | Royalty supported by Arctic Cat’s experts who benchmarked BRP’s later iBR system as comparable; testimony admitted | Expert relied on iBR (later tech) and comparability insufficient; Daubert exclusion and JMOL requested | District court did not abuse discretion admitting expert; jury award of $102.54 per unit is supported by substantial evidence; affirmed |
| Ongoing royalty & enhanced damages (willfulness / trebling) | Ongoing higher royalty justified by Georgia‑Pacific factors post‑judgment; willfulness proven by BRP’s knowledge and conduct | Ongoing royalty improperly awards profit; jury instruction and willfulness standard erroneous; trebling abused | Ongoing royalty ($205.08) and trebling affirmed; jury willfulness finding supported by substantial evidence and instruction consistent with Halo and Federal Circuit precedent |
Key Cases Cited
- KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (framework for obviousness and guidance against rigid combination rules)
- Graham v. John Deere Co., 383 U.S. 1 (1966) (establishes Graham factors for obviousness inquiry)
- WBIP, LLC v. Kohler Co., 829 F.3d 1317 (Fed. Cir. 2016) (review standard for jury‑decided obviousness and presumption of resolved facts)
- Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034 (Fed. Cir. 2016) (en banc) (treats Graham factors and objective indicia as factual determinations requiring substantial evidence)
- Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016) (standard for enhanced damages under § 284)
- Maxwell v. J. Baker, Inc., 86 F.3d 1098 (Fed. Cir. 1996) (patentee bears burden to prove marking compliance; reasonableness inquiry for licensee marking)
- Dunlap v. Schofield, 152 U.S. 244 (1894) (early articulation of marking statute principles)
- Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009) (standard of review for damages findings)