Whitewater West Industries, LTD. v. Pacific Surf Designs, Inc., 3:17-cv-01118

Background

Plaintiff Whitewater West Industries (assignee of U.S. Patent No. 6,491,589) sued Pacific Surf Designs and Flow Rider for direct patent infringement of the '589 patent (nozzle/sluice cover for sheet-wave water rides).
The '589 patent had lapsed for failure to pay maintenance fees and was subsequently reinstated; defendants challenge reinstatement and allege intervening rights and unenforceability.
Defendants contend Whitewater (and related actors/counsel) failed to disclose material prior art and made false statements to the PTO; Whitewater alleges infringement by defendants' nozzle-cover assemblies (sales in the U.S. and shipments/components supplied from the U.S. for foreign assembly).
Defendants proffered Dr. James T. Carmichael as an expert on PTO practice; Whitewater moved to strike portions of his report/testimony as legal conclusions, speculative mind‑reading of examiners, and improper opinions on intent/credibility.
The Court addressed (1) Whitewater’s motion to exclude portions of Carmichael’s expert evidence, (2) Defendants’ second summary-judgment motion (inequitable conduct, intervening rights, §271(f) foreign-assembly infringement, injunction), and (3) Whitewater’s motion for summary judgment on infringement/validity/inequitable conduct.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Admissibility of Carmichael's expert report/testimony	Carmichael offers legal conclusions, speculative opinions about what PTO would have done, and improper comments on intent/credibility; exclude entirely.	Carmichael is qualified to explain PTO practice/materiality/duty of candor; his opinions are relevant and go to weight not admissibility.	Court denied exclusion in part: admitted opinions on PTO practice/materiality (Rule 702/Daubert) but excluded testimony speculating about what an examiner would have done and excluded opinions on intent/credibility.
Inequitable conduct (defendants' affirmative defense / plaintiffs' counter)	Whitewater: no intentional withholding or misstatements to PTO; movant hasn't met clear-and-convincing burden.	Defendants: withheld material prior art and made misstatements to obtain reinstatement; renders patent unenforceable.	Court denied summary judgment to both sides on inequitable conduct—issue is fact-intensive and genuine disputes remain (Therasense standard).
Intervening rights for sales during lapse	Whitewater: reinstatement valid; defendants are not entitled to intervening rights or broad equitable protection.	Defendants: patent lapse and later reinstatement entitles them to absolute/equitable intervening rights for goods made/started during lapse and to equitable protection for investments.	Denied defendants' summary judgment on intervening rights—genuine disputes exist about defendants' good-faith reliance and detrimental reliance.
Infringement under 35 U.S.C. § 271(f) (foreign assembly from U.S. components)	Whitewater: defendants shipped components (steel, foam, vinyl precombined/processed in U.S.) that were combined abroad to form infringing nozzle covers; §271(f)(1) and (2) apply.	Defendants: contend materials are staples/non-specialized and deny required intent/knowledge, or that components constitute "such components" for §271(f).	Denied defendants' summary judgment on §271(f): court found genuine disputes but concluded plaintiff presented sufficient evidence to raise triable issues as to §271(f)(1) and (2).
Literal infringement / Doctrine of Equivalents (Whitewater’s MSJ)	Whitewater: accused nozzle assemblies have nozzle, padded cover and a flexible tongue biased downward; therefore literal infringement or equivalents.	Defendants: accused flaps use hinges/rigid plates; do not literally meet "flexible tongue biased downward"; DOE evidence is conclusory.	Denied Whitewater’s summary judgment on literal infringement and DOE—disputed claim construction/factual issues remain and plaintiff’s DOE support was insufficiently particularized.
Validity (anticipation/obviousness)	Whitewater: patents and prior rides relied on by defendants were considered by PTO or PTAB and do not invalidate the '589 patent.	Defendants: prior patents and pre‑'589 rides render claims anticipated or obvious; disputes over claim construction and expert testimony create triable issues.	Denied Whitewater’s summary judgment on validity—material factual disputes (claim construction, expert conflict) prevent resolution on summary judgment.
Permanent injunction	Whitewater: seeks permanent injunction against further infringement.	Defendants: argue lack of causal nexus, consumer demand, and other equitable defenses.	Denied as premature; court previously denied preliminary injunctive relief and Whitewater still has not cured causal-nexus evidentiary defect.

Key Cases Cited

Daubert v. Merrell Dow Pharms., 509 U.S. 579 (1993) (trial court gatekeeping obligation for expert testimony under Rule 702)
Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999) (Daubert gatekeeping applies to non‑scientific expert testimony)
Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (standard for inequitable conduct: but‑for materiality and specific intent to deceive; clear‑and‑convincing burden)
Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007) (interpretation of "components" under §271(f))
Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476 (1964) (knowledge requirement for contributory infringement informing §271(f)(2) analysis)
KSR Int'l Co. v. Teleflex, Inc., 550 U.S. 398 (2007) (obviousness framework and Graham factors)
Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment burdens)
eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006) (four‑factor test for permanent injunction)
Monsanto Co. v. Bayer Bioscience N. V., 514 F.3d 1229 (Fed. Cir. 2008) (inequitable conduct elements)
Nationwide Transp. Fin. v. Cass Info. Sys., Inc., 523 F.3d 1051 (9th Cir. 2008) (expert may not give legal conclusions on ultimate issues)