Nordock, Inc. v. Systems Inc.
681 F. App'x 965
| Fed. Cir. | 2017Background
- Nordock sued Systems for design patent infringement (U.S. Patent No. D579,754) relating to a dock leveler design; a jury found infringement and awarded damages.
- The jury awarded Nordock $46,825 as a reasonable royalty and marked Systems’ profits as $0 on the verdict form.
- The interplay between 35 U.S.C. § 284 (reasonable royalties/lost profits) and § 289 (total profits for design patents) caused confusion at trial about whether the jury needed to determine Systems’ total profits on the relevant “article of manufacture.”
- The Federal Circuit initially remanded for a new damages trial, but the Supreme Court granted certiorari, vacated that judgment, and remanded in light of Samsung Electronics Co. v. Apple Inc.
- On remand to the Federal Circuit, Nordock argued the relevant article of manufacture must be the entire dock leveler; Systems argued the patent design and trial evidence identified the relevant article as the lip and hinge plate and that no new trial was needed.
- The Federal Circuit concluded the jury had not determined Systems’ total profits for the relevant article of manufacture, vacated the damages award, and remanded for a new damages trial so the parties can develop the record and the district court can clarify jury instructions on § 289.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What is the relevant "article of manufacture" under § 289? | The article is the entire dock leveler; Systems failed to preserve any alternative at trial. | The patent and trial evidence show the article is the lip and hinge plate (a component). | Vacated and remanded for the district court to consider and develop record on the article-of-manufacture question in the first instance. |
| Must the jury determine the infringer’s total profits even if plaintiff recovers a reasonable royalty under § 284? | Yes; the jury still must determine defendant’s total profits for § 289, even if only one damage type is awarded per sale. | Jury awarded a royalty and found profits $0; Systems argued no new trial necessary given trial testimony that profits were less than the proposed royalty. | Court held the jury obligation to determine § 289 profits was not satisfied; because there was no evidence Systems’ profits were $0, damages award vacated. |
| Was a new damages trial required? | Yes; because the record lacked a proper determination of System’s total profits and jury instructions were confusing. | No; trial evidence and expert testimony supported that System’s profits were below the royalty and the district court properly denied a new trial. | New trial on damages ordered so parties can litigate article-of-manufacture and profits with clearer instructions. |
| Scope of remand from Supreme Court’s Samsung decision | Remand supports reconsideration of § 289 issues and identification of article of manufacture. | Systems urged affirmance of district court without new trial, relying on trial record and patent. | Federal Circuit recalled mandate only as to § 289 damages and remanded to district court for further proceedings consistent with Samsung. |
Key Cases Cited
- Samsung Elecs. Co. v. Apple Inc., 137 S. Ct. 429 (2016) (Supreme Court clarifying § 289 two-step inquiry and holding "article of manufacture" can include components)
- Sys., Inc. v. Nordock, Inc., 137 S. Ct. 589 (2016) (Supreme Court grant of certiorari, vacatur, and remand to Federal Circuit in light of Samsung)
- Nordock, Inc. v. Systems Inc., 803 F.3d 1344 (Fed. Cir. 2015) (Federal Circuit’s earlier decision addressing § 289 issues prior to Supreme Court review)