Presidio Components, Inc. v. American Technical Ceramics Corp.
875 F.3d 1369
| Fed. Cir. | 2017Background
- Presidio sued ATC (S.D. Cal.) for infringement of U.S. Patent No. 6,816,356, which claims a multilayer capacitor with fringe-effect capacitance measurable “in terms of a standard unit.”
- During litigation ATC requested ex parte reexamination; Presidio amended claim 1 to add that the fringe-effect capacitance be "capable of being determined by measurement in terms of a standard unit." The PTO issued a reexamination certificate.
- District court jury found infringement and willful infringement of asserted claims and awarded $2,166,654 in lost profits; the district court denied enhanced damages but entered a permanent injunction. The court also granted ATC summary judgment of absolute intervening rights for the pre-reexamination period.
- On appeal, Presidio challenged intervening-rights ruling and denial of enhanced damages; ATC challenged claim definiteness, lost-profits proof, and the injunction. The Federal Circuit heard the appeals.
- The Federal Circuit affirmed claim definiteness and absolute intervening rights, reversed the lost-profits award (remanding for reasonable royalty), affirmed denial of enhanced damages, and vacated the permanent injunction for further factfinding on irreparable harm.
Issues
| Issue | Presidio's Argument | ATC's Argument | Held |
|---|---|---|---|
| Claim indefiniteness (35 U.S.C. §112) | Claim language is definite because the specification references insertion-loss testing and a skilled artisan can measure fringe-effect capacitance. | The added measurement requirement is indefinite because insertion-loss testing wasn’t a known method to measure fringe-effect capacitance and expert used novel steps. | Affirmed: claim not indefinite — insertion-loss is an established measurement method and the patent/reference enable a skilled artisan to measure fringe-effect capacitance. |
| Intervening rights (reexamination amendment) | Amendment merely adopted prior district-court construction; scope unchanged. | Amendment substantively narrowed claim by requiring measurement (excluding purely theoretical calculations), so absolute intervening rights apply pre-certificate. | Affirmed (for ATC): amendment substantively changed scope (excluded theoretical-only determinations), so absolute intervening rights bar pre-certification damages. |
| Lost profits (Panduit test) | Jury verdict on lost profits is supported by evidence that ATC’s infringing 550 line diverted sales from Presidio’s BB capacitors. | Presidio failed Panduit’s second prong: an acceptable, non-infringing alternative (ATC’s 560L) existed and was available; thus no but-for lost sales. | Reversed: insufficient evidence that 560L was unacceptable or unavailable as a non-infringing alternative; lost-profits award vacated and damages limited to reasonable royalty (remand for determination). |
| Enhanced damages & permanent injunction | Willfulness supports enhanced damages and injunction based on irreparable harm (lost sales). | Post-reexamination context, defenses were non-frivolous and conduct was not egregious; injunction and enhancement were not warranted on the existing record. | Affirmed denial of enhanced damages (no abuse of discretion). Permanent injunction vacated because lost-profits reversal undermines irreparable-harm finding; remand to reopen record on current irreparable harm and whether injunction is appropriate. |
Key Cases Cited
- Teva Pharm. USA, Inc. v. Sandoz, Inc., 789 F.3d 1335 (Fed. Cir. 2015) (standard of review for indefiniteness and subsidiary factual findings)
- Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014) (definiteness requires claims inform skilled artisans of scope with reasonable certainty)
- Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) (claim construction framework)
- R+L Carriers, Inc. v. Qualcomm, Inc., 801 F.3d 1346 (Fed. Cir. 2015) (intervening rights analysis after reexamination)
- Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1156 (6th Cir. 1978) (four-factor test for proving lost profits)
- Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016) (standard for awarding enhanced damages; discretionary and reserved for egregious misconduct)
- Ethicon Endo-Surgery, Inc. v. Covidien, Inc., 796 F.3d 1312 (Fed. Cir. 2015) (measurement method in specification can defeat indefiniteness challenge)