84 F.4th 979
Fed. Cir.2023Background
- Cyntec owns U.S. Pat. Nos. 8,922,312 and 9,481,037 directed to molded chokes and a manufacturing method using a mixture of two magnetic powders (one larger/harder, one smaller/softer) to form an integral magnetic body at a temperature below the insulating wire encapsulant's melting point.
- Claim 1 of the ’312 patent contains a disputed "wherein by means of the first hardness difference..." limitation regarding how hardness differences contribute to the reduced formation temperature.
- Cyntec sued Chilisin for willful infringement. The district court construed the "by means of" phrase broadly (hardness need only "have an impact"), denied Chilisin’s Daubert challenge to Cyntec’s damages expert, and—before the jury finished—granted JMOL that the asserted claims were not invalid as obvious.
- The jury later found infringement, willfulness, and awarded Cyntec lost profits and reasonable royalties; the district court enhanced damages, yielding a multimillion-dollar award.
- On appeal the Federal Circuit: affirmed infringement, reversed the district court’s JMOL ruling of nonobviousness (vacating that JMOL), and reversed the denial of Chilisin’s Daubert motion (vacating the lost-profits award), and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Obviousness (JMOL granted by district court) | Cyntec: Shafer+Nakamura do not support obviousness; evidence insufficient under clear-and-convincing standard | Chilisin: prior art (Shafer as modified by Nakamura) teaches size/hardness, and a skilled artisan would be motivated to combine | Reversed: JMOL of nonobviousness was improper because factual disputes (scope of prior art, motivation to combine, differences) should have been decided by jury; remanded |
| Construction of "by means of" limitation | Cyntec: plain meaning supports a broad reading; hardness need only contribute | Chilisin: term requires that hardness be the primary or "but for" cause of reduced formation temperature | Affirmed: claim language and specification do not limit "by means of" to sole/primary cause; district court instruction that hardness must "have an impact" was correct |
| Sufficiency of evidence of infringement under that construction | Cyntec: expert testimony and experimental data showed hardness differences directly impacted formation temperature of accused chokes | Chilisin: evidence did not demonstrate that the powders in accused products affected formation temperature as claimed | Affirmed: substantial evidence (expert testimony and business testimony) supported the jury’s infringement verdict |
| Admissibility of damages expert (importation calculations) and lost-profits award | Cyntec: expert used company SEC filings and third-party data to estimate U.S. importation rates and apply Chilisin’s non-U.S. sales to U.S. imports | Chilisin: expert assumed all reported revenues represented products containing the accused chokes and assumed imported products contained accused chokes—speculative and unreliable | Reversed and vacated lost-profits award: district court abused discretion admitting expert’s importation calculations because they relied on unreliable, overly broad assumptions; damages vacated and remanded |
Key Cases Cited
- Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966) (sets out the Graham factual framework for obviousness)
- Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034 (Fed. Cir. 2016) (JMOL review standard and necessity to resolve Graham factors before obviousness conclusion)
- MobileMedia Ideas LLC v. Apple Inc., 780 F.3d 1159 (Fed. Cir. 2015) (obviousness as a legal conclusion supported by underlying facts)
- Elbit Sys. of Am., LLC v. Thales Visionix, Inc., 881 F.3d 1354 (Fed. Cir. 2018) (listing Graham factors including objective indicia)
- Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 711 F.3d 1348 (Fed. Cir. 2013) (excluding unreliable damages testimony that rests on speculative leaps)
- Niazi Licensing Corp. v. St. Jude Medical S.C., Inc., 30 F.4th 1339 (Fed. Cir. 2022) (damages expert must account for noninfringing uses and properly apportion smallest salable unit)
- Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993) (trial court gatekeeping role for scientific expert reliability)
- Gen. Elec. Co. v. Joiner, 522 U.S. 136 (1997) (appellate deference to trial judge’s gatekeeping but review for abuse of discretion)
- Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009) (substantial-evidence standard for jury findings on infringement)