ORDER:
(1)DENYING PRESIDIO’S MOTION FOR PERMANENT INJUNCTION [Doc. No. 306];
(2) GRANTING IN PART AND DENYING IN PART PRESIDIO’S MOTION FOR POST TRIAL REMEDIES [Doc. No. 307];
(3) DENYING ATC’S MOTION FOR JMOL OR FOR A NEW TRIAL WITH RESPECT TO PRESIDIO’S FALSE MARKING BEFORE OCTOBER 24, 2008 [Doc. No. 308];
(4) GRANTING IN PART AND DENYING IN PART ATC’S MOTION FOR JMOL AND FOR A NEW TRIAL [Doc. No. 309];
(5) GRANTING IN PART AND DENYING IN PART ATC’S MOTION FOR ENTRY OF ATC’S PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW WITH RESPECT TO PRESIDIO’S FINES FOR FALSE MARKING [Doc. No. 310];
(6) DENYING ATC’S MOTION FOR ENTRY OF ATC’S PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW REGARDING INDEFINITENESS [Doc. No. 311]; and
(7) DENYING ATC’S MOTION FOR ENTRY OF ATC’S PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW REGARDING UNENFORCEABILITY OF THE '356 PATENT FOR INEQUITABLE CONDUCT [Doc. No. 312],
Currently before the Court are the parties’ post-trial motions. Having considered the parties’ arguments, and for the *1289 reasons set forth below, the Court issues the following order.
BACKGROUND
I. The Technology
In this patent infringement case, Presidio Components Inc. (“Presidio”) alleges American Technical Ceramics Corp. (“ATC”) infringed U.S. patent number 6,816, 356 (“the '356 patent”), titled “Integrated Broadband Ceramic Capacitor Array.” A capacitor is a device conventionally comprising two metal plates separated by a non-conductor of electric current. This non-conductive material is known as the “dielectric,” which is usually composed of am or ceramic.
Capacitors are passive electronic components used in cellular phones, video cassette recorders, televisions, general purpose computers, and audio amplifiers. These devices use capacitors in one of two ways: (1) to filter out undesirable ripples or spikes in a power supply, or (2) to store energy and provide charge to transistors on a printed circuit board. 1
A capacitor is charged by coupling its plates to an electrical source. Since electricity passes easily through the conductors, but not the dielectric, a positive electrical charge accumulates on one plate and a negative charge accumulates on the other plate. When charged, the capacitor stores energy that can be released by connecting the plates via an external path, permitting current to flow from one plate to the other. The electrons flow off the negatively charged plate and onto the positively charged plate, bringing the two plates to equal relative voltage. The amount of energy a capacitor stores is its “capacitance,” which depends on the orientation and spacing of the conductive plates, and the properties of the dielectric material.
Frequently, multiple capacitors are connected to form a capacitive network. One way to create a capacitive network is to build a “multilayer capacitor,” which is formed by layering multiple conductive and non-conductive materials. Each individual layer has a separate capacitance that effects the overall capacitance of the multilayer capacitor.
II. The'356 Patent
The '356 patent discloses and claims a multilayer capacitor consisting of a network of capacitors. The '356 patent has a total of thirty-four claims, but only claims 1-5, 16, and 18-19 are the asserted claims in this case. Out of those, only asserted claim 1 is an independent claim. 2 The rest of the asserted claims are dependent claims. 3 Asserted claim 1 of the '356 patent claims:
A capacitor comprising:
a substantially monolithic dielectric body;
a conductive first plate disposed within the dielectric body;
a conductive second plate disposed within the dielectric body and forming a capacitor with the first plate;
*1290 a conductive first contact disposed externally on the dielectric and electrically connected to the first plate; and
a conductive second contact disposed externally on the dielectric body and electrically connected to the second plate, and the second contact being located sufficiently close to the first contact to form a first fringe-effect capacitance with the first contact.
('356 patent, col. 12:58-13:5.) Asserted claims 2 and 4 also add one or two “insulating layerfs]” disposed between the external contacts and “inhibiting electrical conduction” between those contacts. (Id. col. 13:6-13:9,13:17-13:25.)
III. Factual Background
The application process for the '356 patent spanned over two years. On May 17, 2002, Presidio submitted a parent application to patent the technology underlying the '356 patent with the United States Patent and Trademark Office (“USPTO” or “PTO”). This parent application resulted in U.S. patent number 6,587,327 (“the '327 patent”). On April 14, 2003, Presidio submitted the base application for the '356 patent, which was. a continuation in part of the parent application. The USPTO issued the '356 patent on November 9, 2004.
During the pendency of Presidio’s patent application, ATC initiated development of the 545L series of monolithic, multilayered capacitors. In September 2002, ATC engineers first expressed interest in developing a monolithic capacitor. During development, in April 2003, ATC allegedly dissected and analyzed Presidio’s Buried Broadband Capacitors (“BB capacitors”). The BB capacitors were monolithic, multilayered capacitors developed for broadband usage. During the litigation, Presidio conceded the BB capacitors do not embody the claims of the '356 patent. Nonetheless, Presidio asserts the BB capacitors at the very least employ the “substantially monolithic dielectric body” as used in the claims of the '356 patent, and as such served as the background to the inventions ultimately claimed in the '356 patent.
In September 2003, ATC substantially completed the 545L capacitor’s design and filed a provisional patent application. In March 2004, ATC reviewed Presidio’s published patent application. The parties dispute the importance of ATC’s review. Presidio asserts ATC engineers believed the patent application covered their capacitor. ATC asserts the engineers believed the '356 patent was both invalid and inapplicable to the 545L capacitor.
In September 2004, ATC filed a non-provisional patent application for the 545L capacitor. In February 2006, the USPTO rejected the application, citing the '356 patent as prior art. Notwithstanding this rejection, ATC began selling the 545L capacitor in June 2006. In August 2006, ATC requested the USPTO reconsider the application, arguing the '356 patent does not have orientation insensitivity, which is a feature of the 545L capacitor. That same month, the USPTO reconsidered and held the '356 patent did not bar ATC’s application. On July 2007, the USPTO issued U.S. Patent No. 7,248,458 (“the '458 patent”) for the 545L capacitor.
Beginning in May 2007, Presidio began marking its BB capacitors with the '356 patent number. On October 24, 2008, Presidio admitted the BB capacitors were not covered by the '356 patent, but claims it marked the capacitors with a mistaken belief they embodied the patent. Prior to the marking, Presidio did not perform a legal analysis. Presidio continued to mark the BB capacitors with the '356 patent until some time in April 2009. 4
*1291 On May 17, 2007, Presidio filed an action in this Court against ATC, alleging infringement of the '356 patent (the “2007 action”). On June 9, 2008, the Court granted a joint motion to dismiss the 2007 action without prejudice for lack of standing.
IV. Procedural Background
Presidio filed the complaint in this case on February 21, 2008, alleging ATC is infringing claims 1-5, 16, and 18-19 (“asserted claims”) of the '356 patent by producing the 545L capacitor. [Doc. No. 1]. ATC answered on May 28, 2008, bringing numerous counterclaims against Presidio. [Doc. No. 10]. On June 20, 2008, Presidio filed an answer to ATC’s counterclaims. [Doc. No. 21],
On June 11, 2008,
On August 25, 2008,
On July 23, 2009, ATC submitted to the USPTO a replacement request for reexamination of the '356 patent. On October 20, 2009, the USPTO granted the request for reexamination, noting there were substantial new questions of patentability with respect to all of the asserted claims in light of nine prior art references identified by ATC. The reexamination proceedings are still ongoing.
The case was tried to a jury in December 2009. The jury returned a verdict *1292 finding all of the asserted claims to be valid and infringed. The jury awarded Presidio $1,048,677 in lost profits. The jury also found that Presidio has proven by clear and convincing evidence that ATC’s infringement was willful. Finally, the jury found that Presidio’s false marking of the BB capacitors prior to October 24, 2008 was not done for the purpose of deceiving the public.
The Court heard oral argument on the parties’ post-trial motions on March 12, 2010. After the motions were taken under submission, ATC filed two notices with the Court. First, ATC alerted the Court to the Federal Circuit’s recent en banc decision in Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.8d 1336 (Fed.Cir.2010) (en banc), arguing it supported ATC’s motion for judgment as a matter of law and motion for a new trial with respect to invalidity for lack of written description in the '356 patent. [Doc. No. 343]. Second, ATC notified the Court of the First Office Action by the USPTO in the reexamination proceedings, which rejected all of the asserted claims of the '356 patent based on anticipation and obviousness. [Doc. No. 346]. Presidio filed responses in opposition to both of these notices. [Doc. Nos. 345, 347].
LEGAL STANDARD
For issues not unique to patent law, such as sufficiency of the evidence on issues tried to the jury, the Court applies the law of the regional circuit in which it sits, here the Ninth Circuit.
See Duro-Last, Inc. v. Custom Seal, Inc.,
In the Ninth Circuit, a judgment as a matter of law (“JMOL”) pursuant to Federal Rule of Civil Procedure 50(a) is proper only “if the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion, and that conclusion is contrary to the jury’s verdict.”
Pavao v. Pagay,
The Court may grant a new trial pursuant to Federal Rule of Civil Procedure 59(a) only if “ ‘the verdict is contrary to the clear weight of the evidence, or is based upon evidence which is false,’ ” or if a new trial is necessary “ ‘to prevent ... a miscarriage of justice.’”
Hangarter,
*1293 DISCUSSION
I. Validity
A. Preliminary matters
As an initial matter, the Court addresses ATC’s arguments that Dr. Ewell was unqualified to render an opinion as a person of ordinary skill in the art, that he relied on his undisclosed opinion, and that in any event his testimony was legally irrelevant and could not support the verdict of no invalidity. The Court also addresses ATC’s argument that Presidio improperly referred to “insertion loss” in its closing argument.
The parties have previously agreed that “[t]he level of ordinary skill in the art of the '356 patent is medium. The ordinary artisan would hold a masters or similar degree, or the experiential equivalent thereof, in Electrical Engineering or a similar field, and would have at least two years of industry experience in designing multilayer capacitors.” (Pretrial Order, at 5 [Doc. No. 182].) ATC argues Dr. Ewell does not meet this criteria because he admitted that he has “never from scratch designed” a capacitor in his entire career. (See Trial Tr. Day 7, at 93:8-93:9.) Presidio responds that Dr. Ewell is well-qualified as an expert witness because he has more than three decades of work experience relating to capacitors, including experience relating to the review of and consultation regarding designs of multilayer capacitors. (See id. at 69:14-73:5.) Moreover, Presidio argues ATC did not object or attempt to voir dire Dr. Ewell at trial.
ATC correctly notes that one who is not qualified in the pertinent art may not testify as an expert on technical issues such as validity, anticipation, or scope of the prior art.
See Sundance, Inc. v. DeMonte Fabricating Ltd.,
*1294
Likewise, there is no merit to ATC’s argument that the Court should ignore Dr. Ewell’s testimony as legally irrelevant. ATC argues Dr. Ewell’s testimony should be excluded because: (1) he improperly injected an additional requirement limiting the Court’s construction of the term “fringe effect capacitance” from a “determinable capacitance” to a “determinable
fringe-effect
capacitance;” (2) he improperly limited “determinable capacitance” to the measurement of a
physical capacitor;
and (3) he improperly required testing of actual samples for determining whether capacitance exists. However, in light of the fact that the '356 patent discusses both parallel capacitance and fringe-effect capacitance, there was no error in referring to “determinable
fringe-effect
capacitance” when discussing the specific limitations of claim 1. Likewise, even assuming as true ATC’s allegations that Dr. Ewell limited “determinable capacitance” to the testing of actual physical samples, whether any such limitation was proper in this context was for the jury to determine, not the Court.
See Hangarter,
The Court also rejects ATC’s argument that Dr. Ewell relied on undisclosed expert opinion during his testimony. ATC argues Dr. Ewell never opined in his report on the propriety of Dr. Dougherty’s testing of the August 2000 capacitors, or that there would be only a “parallel-plate capacitor left” in the fragment after shaving. However, there is sufficient analysis in Dr. Ewell’s expert report on the impropriety of the testing done by Dr. Dougherty and why that fails to demonstrate fringe-effect capacitance. (See PI. Rebuttal Expert Report of Gary J. Ewell, at 65-78 [Doc. No. 320-8].) Dr. Ewell’s report also sufficiently covers the other issues objected to by ATC.
Finally, there is also no merit to ATC’s argument that Presidio improperly referred to “insertion loss” in its closing argument. (See Trial Tr. Day 8, at 59:18-59:24.) Contrary to ATC’s argument, Presidio did not attempt to define “fringe-effect capacitance” with the term “insertion loss” contrary to the Court’s claim construction and in limine ruling. Rather, Presidio merely indicated that “insertion loss” has been mentioned during the trial. In light of the fact that the specifications of the '356 patent extensively discuss “insertion loss,” there was no error in referring to this term. Moreover, the reference to “insertion loss” was so minute and isolated, there is no reason to believe it was even noticed by the jury, not to mention influenced its decision. Accordingly, the Court denies ATC’s objection on this ground as well.
B. Anticipation 6
ATC seeks a judgment as a matter of law that certain prior art anticipated the asserted claims of the '356 patent. Anticipation under 35 U.S.C. § 102 “re-
*1295
quires a single prior art reference which discloses each and every element of the claimed invention.”
7
Dickson Indus., Inc. v. Patent Enforcement Team, L.L.C.,
i. ATC’s argument that fringe-effect capacitance is always present
First, ATC argues there is nothing new about “fringe-effect capacitance” because, according to the laws of physics, it is always present in multilayer capacitors wherever two conductive contacts are positioned in an edge-to-edge relationship. Thus, one can always use the universally known equation of C=kA/d to measure the capacitance, no matter how small. 8 ATC contends this was even acknowledged by Dan Devoe and Dr. Ewell. 9
Despite ATC’s arguments to the contrary, there was substantial evidence before the jury to conclude that “fringe-effect capacitance” is not always present — • i.e., that it is not always determinable or “capable of being determined in terms of a standard unit” as required by the Court’s claim construction. For example, Dr. Huebner testified that in order to demonstrate whether this claim limitation is met, one could and should analyze the thickness of the external contacts, the separation distance, and the dielectric. (Trial Tr. Day 4, at 77:14-85:7.) Likewise, Dr. Ewell testified that even if fringe-effect capacitance is always present, such capacitance is not always determinable. (Trial Tr. Day 7, at 108:18-109:9.)
ii. Figueroa patent
ATC argues the capacitor described in Figure 12 of the Figueroa patent, U.S. patent number 6,483,692 (“Figueroa patent”) anticipates the asserted claims. ATC points to the “striking resemblance” of the Figure 12 of the Figueroa patent to Figure 15A of the '356 patent. According to ATC, “[i]f fringe-effect capacitance is reportedly created in the 2 mil gap of the '356 patent [132], without the thickness of contacts or any of the other parameters being disclosed, then a comparable diselo *1296 sure of a gap of 2.56 mils or less in Figueroa must also result in fringe-effect capacitance.” (Def. Motion for JMOL or New Trial, at 24.)
[[Image here]]
There was legally sufficient evidence before the jury to conclude the Figueroa patent did not anticipate all of the elements of the asserted claims. As Presidio notes, the Figueroa patent never mentions “fringe-effect capacitance” or provides the necessary information needed to conclude whether any such capacitance in Figure 12 exists and/or is determinable. ATC’s argument that fringe-effect capacitance must exist in the 2.56 mils or less gap in Figure 12, since it exists in the 2 mil gap in Figure 15A of the '356 patent, is unavailing. Viewing the evidence in favor of the verdict, the jury was free to accept Dr. Ewell’s detailed explanation as to why there was insufficient data on whether there was determinable capacitance in Figure 12. (See Trial Tr. Day 7, at 108:7-116:21.)
The cases relied upon by ATC are inapposite. First, in the part of
Constant v. Advanced Micro-Devices, Inc.,
[[Image here]]
Accordingly, there was legally sufficient evidence for the jury to conclude that the Figueroa patent does not anticipate the asserted claims of the '356 patent because it does not by itself describe each and every limitation of the asserted claim 1.
See Dickson Indus.,
Hi. Heron patent
ATC next argues the capacitor described in Figure 7 of the Heron patent, U.S. patent number 4,931,901 (“Heron patent”) anticipates the asserted claims of the '356 patent, at least as illustrated in Figure 10A of the '356 patent. Heron measured fringe-effect capacitance on actual capacitors and also used the standard *1297 capacitance formula to estimate capacitance during the design. The fringe-effect capacitance between internal electrodes 54a and 54b (and 50a and 50b) was expressly acknowledged by the Heron patent. According to ATC, this anticipates claim 1 of the '356 patent because the internal electrodes in Figure 7 are in turn connected to C-shaped plates that are “arranged on an external surface portion” of the dielectric body as required by the Court’s claim construction in this case.
[[Image here]]
Nonetheless, there was substantial evidence for the jury to find that the Heron patent does not anticipate claim 1 of the '356 patent. First, the Heron patent itself describes only fringe-effect capacitance between
internal
electrodes. There is nothing in Heron that would, by itself, teach fringe-effect capacitance between the
external
points of the C-shaped plates. Moreover, Presidio presented testimony of Dr. Ewell that the Heron patent did not teach fringe-effect capacitance between external contacts.
(See
Trial Tr. Day 7, at 89:24-90:6, 128:19-128:24, 129:8-129:13, 130:9-130:23.) Although this testimony was contradicted by Dr. Dougherty, the Court must disregard that testimony in determining whether there is “substantial evidence” supporting the jury’s verdict.
See Pavao,
[[Image here]]
iv. August 2000 capacitors
ATC next argues the capacitors from Presidio’s Lot No. 00126-18A that were sold to JDS Uniphase (“JDSU”) in August 2000 (“August 2000 capacitors”) also anticipate all of the asserted claims, except claims 2 and 4. Dr. Dougherty confirmed that fringe-effect capacitance existed in the August 2000 capacitors by using three different methods (Walker formula, C=kA/d formula, and capacitance meter). However, to test the capacitance, Dr. Dougherty admitted that he had to “polish back and cut away” almost all of the capacitor, so as to leave only the area where the fringe-effect capacitance was supposed to exist. (See Trial Tr. Day 5, at 159:3-159:22.) By doing so, Dr. Dougherty in effect shaved off almost 90% of the August 2000 capacitor. (See Trial Tr. Day 6, at 42:3-45:11.) In light of this, Presidio argues Dr. Dougherty did not really test the August 2000 capacitor itself, but rather some other new part with different structure and electrical performance. (See Trial Tr. Day 7, at 87:7-88:13.) Moreover, according to *1298 Presidio, only parallel capacitance-if any-would have remained in the August 2000 capacitor after the shaving. (See Trial Tr. Day 7, at 88:14-88:23.)
Once again, it was up to the jury to decide how much weight to give to the respective testimony by Dr. Dougherty and Dr. Ewell. By finding no anticipation by the August 2000 capacitors, the jury must have believed Dr. Ewell that Dr. Dougherty’s method of testing for capacitance in the August 2000 capacitor was improper. Or they could have credited Dr. Ewell’s testimony that only parallel capacitance-if any-would have remained in the August 2000 capacitor after shaving. In any event, Dr. Ewell’s testimony provides legally sufficient evidence to support either of those conclusions, and it is not the job of the Court to second-guess the jury on the issues of credibility of the witnesses or the weighing of the evidence.
See Hangarter,
C. Obviousness
ATC next argues the asserted claims of the '356 patent were obvious to a person of ordinary skill in the art in light of the prior art. Obviousness is a legal question, whereby the court must determine whether the subject matter of the claimed invention “would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.” 35 U.S.C. § 103(a);
see also KSR Int’l Co. v. Teleflex Inc.,
The burden at trial is on the patent challenger to show by clear and convincing evidence that “a person of ordinary skill in the art would have had reason to attempt to make the composition or device, or carry out the claimed process, and would have had a reasonable expectation of success in doing so.”
PharmaStem,
i. Was there a reason to combine the known elements in the fashion claimed by the '356 patent, and a reasonable expectation of success in doing so?
ATC argues there is no dispute that prior art teaches: (1) multilayer ce *1299 ramie capacitors having the first five elements of claim 1; (2) the additional elements of dependent claims 5, 16, 18, and 19; (3) presence of fringe-effect capacitance wherever two conductive contacts are positioned in an edge-to-edge relationship; and (4) use of insulating layers as an optional feature partially or completely covering contacts (or parts thereof) to prevent electrical sparking. Thus, wouldn’t it be obvious to combine the first five elements of the asserted claim 1 with fringe-effect capacitance between edges, knowing that the capacitance gets larger as the gap gets closer? Also, wouldn’t it be obvious that the fringe-effect capacitance, which is disclosed for internal contacts 50a and 50b of the Heron patent, would similarly apply to the external pair of C-shaped terminations based on the same edge-to-edge geometry? Wouldn’t it be obvious to bring those contacts to the surface? Wouldn’t it be obvious that if fringe-effect capacitance existed in a 1 mil gap as disclosed in the Gowen patent, 10 that it would also exist in the 2.56 mils or less gap shown in the Figueroa patent? Wouldn’t a person of ordinary skill in the art apply an insulating layer if he wanted to prevent arcing across the surface? According to ATC, knowledge and common sense, as well as market pressure — rather than innovation — would have been the motivation for these combinations.
However, the issue before the Court is much narrower than ATC makes it appear. At trial, the jury was asked only: (1) whether all of the asserted claims of the '356 patent were obvious in light of the combination of the Heron patent with the Aoyagi patent, 11 and (2) whether claims 2 and 4 were obvious in light of the combínation of the August 2000 capacitors with the Aoyagi patent. {See Verdict Form, at 3-4 [Doc. No. 298].) Seeing as the Aoyagi patent only teaches an insulating layer across the surface, 12 the combination of it with either the Heron patent or the August 2000 capacitors would not have rendered the '356 patent obvious because, as discussed above, there is sufficient evidence to support the jury finding that neither of those patents teaches a fringe-effect capacitance between the external contacts that is “capable of being determined in terms of a standard unit.” Accordingly, if neither the Heron patent nor the August 2000 capacitors by itself teaches such fringe-effect capacitance, a combination with the Aoyagi patent would not have made that any more obvious.
In any event, even if ATC’s request for a JMOL as to obviousness based on other combinations is procedurally proper, ATC has not carried its burden of demonstrating that a person of ordinary skill in the art would have had the reason to combine the known elements
and
would have had a reasonable expectation of success in doing so.
See PharmaStem,
*1300 important to identify a reason that would have prompted a person of ordinary skill in the relevant field to combine the elements in the way the claimed new invention does. This is so because inventions in most, if not all, instances rely upon building blocks long since uncovered, and claimed discoveries almost of necessity will be combinations of what, in some sense, is already known.
Id.
In the present case, ATC’s rhetorical questions notwithstanding, there was no testimony presented at trial to show any reason for combining those elements.
13
Accordingly, ATC failed to carry its burden of demonstrating obviousness by clear and convincing evidence.
See In re Dembiczak,
ii. Obviousness due to contemporaneous conception by others.
In the alternative, ATC argues obviousness is demonstrated by the fact that similar edge-to-edge design was conceived by Charles Rosier, a JDSU engineer, no later than January 15, 2001, and ATC’s engineer Richard Monsorno in August 2001. {See Def. Motion for JMOL, Exs. CL, AGN.) Presidio responds there is no evidence that Mr. Rosier conceived all of the limitations of all of the claims, and, in any event, the jury already rejected any such argument. Likewise, according to Presidio, there is no evidence that anything conceived by Dr. Monsorno was “remarkably similar to the capacitors in the '356 patent,” and, in any event, those designs were presented to the USPTO during the prosecution of the '356 patent, and the USPTO proceeded to issue the '356 patent.
The testimony pointed to by ATC is insufficient to establish by clear and convincing evidence that the asserted claims of the '356 patent are rendered obvious by the Rosier and Monsorno drawings. There was extensive testimony by Alan Devoe that raised doubts as to any “contemporaneous conception” by Charles Rosier and whether he invented anything related to the '356 patent. (See, e.g., Trial Tr. Day 3, at 182:9-185:22; Trial Tr. Day 4, at 3:21-9:1, 15:18-20:19, 25:20-26:5; 32:20-33:3.) As for the Monsorno drawing, ATC fails to point to any testimony at trial that discussed whether it rendered obvious all of the asserted claims. Rather, the only testimony concerned the drawing’s alleged “single-piece” construction. (See Trial Tr. Day 5, at 49:19-50:12.) Finally, the only testimony about “fringe-effect capacitance” concerned the Monsorno patent from 1996 14 and not the Monsor *1301 no drawing from August 22, 2001, depicted in ATC’s Exhibit CL. (See Trial Tr. Day 5, at 47:3-48:22.) There is no dispute that the Monsorno patent was disclosed to the USPTO during the prosecution of the '356 patent. (See '356 patent, at 1 (listing the Monsorno '926 patent among the “References Cited”).) Accordingly, the Rosier and Monsorno drawings are insufficient to establish obviousness. 15
D. Reexamination proceedings
The conclusion that ATC has failed to prove anticipation and obviousness by clear and convincing evidence is not affected by the USPTO’s recent reexamination proceedings. As previously noted, on July 23, 2009, ATC submitted a replacement Request for Reexamination of the '356 patent. On October 20, 2009, the USPTO granted the request, noting there were substantial new questions of patentability with respect to the asserted claims in light of nine prior art references identified by ATC. Then, on March 23, 2009, the USP-TO issued a First Office Action on the merits, rejecting all of the asserted claims on the grounds of anticipation and obviousness. However, just like its name implies, the First Office Action is only a
preliminary
determination by the USPTO — it is not a “final” action, and the examiner could still change his decision or completely reverse it before issuing the final action.
See
37 C.F.R. §§ 1.112, 1.550;
accord Heinl v. Godici,
E. Enablement
ATC next argues the asserted claims are invalid due to lack of enablement. The enablement requirement is set forth in Section 112, which provides that the patent’s specification shall describe “the manner and process of making and using [the invention], in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use [the invention].” 35 U.S.C. § 112. “The enablement requirement is satisfied when one skilled in the art, after reading the specification, could practice the claimed invention without undue experimentation.”
AK Steel Corp. v. Sollac & Ugine,
i “Substantially monolithic”
First, ATC argues there is no definition of the phrase “substantially monolithic” provided in the specifications of the '356 patent, the term was never heard of or applied before by any of the technical experts in this case, and even if a dielectric body can be “monolithic,” there can be no degrees of “monolithicness.” ATC argues it would take great time, cost, and effort to determine what the '356 patent means by “substantially monolithic,” especially in light of the medium level of skill, and the fact that the '356 patent does not disclose a working example or that Presidio never produced a single capacitor practicing the asserted claims. Thus, according to ATC, undue experimentation would be required, making the asserted claims invalid.
See AK Steel,
ATC, however, cannot show by clear and convincing evidence that the phrase “substantially monolithic” is not sufficiently enabled, let alone that the jury verdict is “ ‘against the great weight of the evidence.’ ”
See Hangarter,
ATC’s objection on the ground that the '356 patent does not mention anything about reliability or durability misses the mark. Section 112 does not require the patent to define each and every word used-for if it did, then every patent would have to be “written as a comprehensive tutorial and treatise for the generalist, instead of a concise statement for persons in the field.”
See Verve, LLC v. Crane Cams, Inc.,
Finally, the use of the word “substantially” does not make the phrase “substantially monolithic” less enabling. As Presidio notes, the use of the claim term “substantially” has repeatedly been held to be proper, and definite.
See, e.g., Kinzenbaw v. Case LLC,
ii. “Sufficiently close ... to form a first fringe-effect capacitance”
Second, ATC argues the '356 patent lacks enabling information with respect to the phrase: “sufficiently close ... to form a first fringe-effect capacitance” because the patent does not disclose the thickness of the contacts, the voltage rating, the dielectric, or the dielectric constant. According to ATC, due to lack of this information, a person of ordinary skill in the art would not be able to tell whether any given capacitor fell within the scope of the asserted claims. Moreover, ATC argues that Presidio’s failure to build a single capacitor practicing the asserted claims, as well as the four years it took ATC to develop its allegedly infringing 545L capacitor, demonstrate that this element cannot be practiced without undue experimentation.
Although ATC raises some good arguments, they are' nonetheless insufficient to demonstrate that the jury’s verdict was “ ‘against the great weight of the evidence.’ ”
See Hangarter,
ATC’s insistence that Presidio cannot “have its cake and eat it too” by requiring specific details from the prior art references and then ignoring those details when it comes to the '356 patent is misplaced. As Dr. Ewell explained on cross-examination, the details were not necessary for the '356 patent because it
expressly claimed
that a fringe-effect capacitance was there.
(See
Trial Tr. Day 7, at 114:3-115:14.) On the other hand, the details were necessary to confirm whether that fringe-effect capacitance was also formed in the allegedly anticipating prior art because those references did
not
expressly claim fringe-effect capacitance between external contacts.
(See id.)
Accordingly, the jury was entitled to credit this testimony, and ATC has failed to demonstrate that the jury’s decision was “ ‘against the great weight of the evidence.’ ”
See Hangarter,
Finally, as was discussed with regard to the term “substantially,” the use of the term “sufficiently close” does not make the whole claim term less enabling. Just like the terms “about” or “substantially,” the term “sufficiently close” appears to be a descriptive term that can be used in patent claims to “avoid a strict numerical boundary to the specified parameter.”
See Ecolab,
Hi Conclusion
Accordingly, ATC has not shown by clear and convincing evidence that the use of the phrases “substantially monolithic” and “sufficiently close ... to form a first fringe-effect capacitance” made the '356 patent invalid due to lack of enablement. ATC has not shown that the jury’s verdict in this regard was against the great weight of the evidence.
*1305 F. Written description
Section 112 also requires that the patent’s specification contain a “written description of the invention.” 35 U.S.C. § 112. This requirement is independent of the enablement requirement, and is necessary “ ‘so that one skilled in the art can recognize what is claimed.’ ”
Univ. of Rochester v. G.D. Searle & Co., Inc.,
As the Federal Circuit sitting
en banc
recently stated, “the hallmark of written description is disclosure.”
Ariad,
In the present case, there is substantial evidence to support the jury’s verdict finding no lack of written description. As already noted, the '356 patent has a very detailed background section listing specific examples of known capacitors and explaining the industry’s knowledge of their design and application, including detailed technical information. The '356 patent also provides a very detailed description of the invention, accompanied by twenty-three separate figures, that describes how the conductive contacts can be extended to the exterior, how that would affect the overall insertion loss and frequency performance of the capacitor, and what effect it would have on the overall capacitance.
(See
'356 patent, col. 6:19-12:57.) The claims that follow focus on these innovations by claiming the method of extending conductive contacts to the exterior and positioning them in such proximity to each other so as to form fringe-effect capacitance.
(See
'356 patent, col. 12:58-16:32.) Thus, unlike
Ariad,
upon which ATC relies, the scope of the claims
*1306
in the '356 patent does not “overreach the scope of the inventor’s contribution to the field of art as described in the patent specification.”
See
Finally, ATC’s focus on “functional language” in the context of the written description requirement is misplaced.
16
ATC asserts the Federal Circuit in
Ariad
held that “a vague functional description and an invitation for further research does not constitute written disclosure.”
See id.
at 1356. However, the
Ariad
court in other places indicated that functional language and prophetic examples
can
in certain circumstances satisfy the written description requirement.
17
See, e.g., id.
at 1350 (“We have also held that functional claim language can meet the written description requirement when the art has established a correlation between structure and function.” (citation omitted));
id.
at 1357 (“Prophetic examples are routinely used in the chemical arts, and they certainly can be sufficient to satisfy the written description requirement.”). Moreover, the statement quoted by ATC was made in a context where the only evidence supporting written description was the
ex post facto
testimony of an expert that a specific inhibitor existed during the relevant time period and “that one of ordinary skill
could through experimentation”
isolate the necessary inhibitor.
See id.
at 1356 (emphasis added). In contrast, the detailed description section in the present case and the accompanying figures provide sufficient “correlation” between the structure and function to satisfy the written description requirement.
See id.
at 1350. Accordingly, ATC failed to show by clear and convincing evidence that the jury’s verdict finding no lack of written description was “ ‘against the great weight of the evidence.’ ”
18
See Hangarter,
G. Indefiniteness
The Court previously denied ATC’s motion for summary judgment of indefiniteness.
[See
Doc. No. 32], ATC now renews its argument, stating that the Court should find the asserted claims in
*1307
definite as a matter of law. Whether the claims are indefinite is a legal issue for the court, and not the jury.
Biomedino, LLC v. Waters Tech. Corp.,
If a claim is insolubly ambiguous, and no narrowing construction can properly be adopted, we have held the claim indefinite. If the meaning of the claim is discernible, even though the task may be formidable and the conclusion may be one over which reasonable persons will disagree, we have held the claim sufficiently clear to avoid invalidity on indefiniteness grounds.
Id. (citations omitted). “By finding claims indefinite only if reasonable efforts at claim construction prove futile, we accord respect to the statutory presumption of patent validity, and we protect the inventive contribution of patentees, even when the drafting of their patents has been less than ideal.” Id. (internal citation omitted).
i. ATC’s motion is procedurally proper.
As an initial matter, the Court rejects Presidio’s argument that ATC’s motion is procedurally improper. Presidio argues the current motion is untimely and improper because: (1) the Court previously deferred judgment on the issue of indefiniteness when it adopted ATC’s construction of the disputed claim terms; (2) the Court subsequently denied ATC’s motion for summary judgment on the issue of indefiniteness; and (3) after the close of all the evidence, the Court denied ATC’s Rule 50(a) motion on the issue of indefiniteness. However, Rule 50(b) provides that where the court does not grant a motion under Rule 50(a), which was the case here, “the court is considered to have submitted the action to the jury subject to the court’s later deciding the legal questions raised by the motion.” Fed. R. Civ. P. 50(b) (emphasis added). Accordingly, ATC’s current motion on the issue of indefiniteness-which is a question of law — is properly before the Court.
ii. ATC has not met its burden of showing by clear and convincing evidence that the challenged claim terms are indefinite as a matter of laiv.
ATC argues the claim terms “substantially monolithic” and “sufficiently close ... to form a first fringe-effect capacitance” are indefinite. First, ATC argues the '356 patent does not disclose a workable, objective test for measuring either of those terms. Second, ATC argues the tests proposed by Presidio would cause the same capacitor to be “sometimes infringing and sometimes not” depending on how the capacitor is used and tested. Third, ATC argues the patent fails to differentiate itself from the prior art identified in Figure 2A. Fourth, ATC argues the claim “sufficiently close ... to form a first fringe-effect capacitance” is indefinite because the patent in effect uses “functional language” to define the alleged point of novelty.
*1308 a. “Substantially monolithic”
To the extent ATC’s first ground of indefiniteness raises the same arguments as with respect to enablement and written description, those arguments are rejected for the same reasons as set forth above. Specifically, as already noted, the use of the claim term “substantially” has repeatedly been held to be proper and definite.
See, e.g., Kinzenbaw,
ATC next argues Dr. Ewell’s “fracture test” does not cure the indefiniteness of the claim term, but rather confuses it even further. “The scope of claim language cannot depend solely on the unrestrained, subjective opinion of a particular individual purportedly practicing the invention.”
Datamize, LLC v. Plumtree Software, Inc.,
However, contrary to ATC’s arguments, a claim term is not indefinite just because
*1309
it was “intended to cover the use of the invention with various types of [end products].”
See Orthokinetics, Inc. v. Safety Travel Chairs, Inc.,
b. “Sufficiently close ... to form a first fringe-effect capacitance”
Similarly, to the extent ATC’s first ground of indefiniteness raises the same arguments as with respect to enablement and written description, those arguments are rejected for the same reasons as set forth above. Specifically, the use of the term “sufficiently close” does not make the whole claim term less definite. Just like the terms “about” or “substantially,” the term “sufficiently close” appears to be a descriptive term used in patent claims to “avoid a strict numerical boundary to the specified parameter.”
See Ecolab,
ATC next argues Dr. Ewell’s proposed “test” for whether a fringe-effect capacitance is “determinable” compounds rather than clarifies the ambiguity. As previously noted, “[t]he scope of claim language cannot depend solely on the unrestrained, subjective opinion of a particular individual purportedly practicing the invention.”
Datamize,
ATC has also failed to show by clear and convincing evidence that the '356 patent fails to differentiate itself from the prior art identified in Figure 2A. “[Wjhether the patent expressly or at least clearly differentiates itself from specific prior art ... is an important consideration in the definiteness inquiry because in attempting to define a claim term, a person of ordinary skill is likely to conclude that the definition does not encompass that which is expressly distinguished as prior art.”
Halliburton,
*1311 [[Image here]]
Finally, ATC’s “functional language” argument fares no better. Particular scrutiny is required where a claim is defined “ ‘by what it does rather than what it is.’ ”
Halliburton,
[[Image here]]
Hi. Conclusion
Accordingly, ATC has failed to show by clear and convincing evidence that the phrases “substantially monolithic” and “sufficiently close ... to form a first fringe-effect capacitance” are indefinite as a matter of law.
H. Inequitable conduct
Finally, ATC argues the '356 patent is unenforceable due to inequitable conduct. “ ‘A patent may be rendered unenforceable for inequitable conduct if an applicant, with intent to mislead or deceive the examiner, fails to disclose material information or submits materially false information to the PTO during prosecution.’”
McKesson Info. Solutions, Inc. v. Bridge Med., Inc.,
The “materiality” of information withheld during prosecution is judged by the “reasonable examiner” standard,
*1312
which embraces “ ‘any information that a reasonable examiner would substantially likely consider important in deciding whether to allow an application to issue as a patent.’ ”
McKesson,
As for the “intent” element of the offense, it is “ ‘in the main proven by inferences drawn from facts, with the collection of inferences permitting a confident judgment that deceit has occurred.’ ”
Id.
(citation omitted). “ ‘However, inequitable conduct requires not intent to withhold, but rather intent to deceive. Intent to deceive cannot be inferred simply from the decision to withhold information where the reasons given for the withholding are plausible.’ ”
Id.
(citation omitted). “In addition, ‘a finding that particular conduct amounts to “gross negligence” does not of itself justify an inference of intent to deceive; the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive.’ ”
Id.
(citing
Kingsdown Med. Consultants, Ltd. v. Hollister Inc.,
Determination of inequitable conduct is a two-step process. The party asserting inequitable conduct must first prove a threshold level of “materiality” and “intent” by clear and convincing evidence.
McKesson,
i Alleged “point of novelty’’
The Court first addresses ATC’s continued insistence that the “point of novelty” of the '356 patent was the “fringe-effect capacitance” between the capacitor contacts. Contrary to ATC’s arguments, in allowing the asserted claim 1, the patent examiner stated:
The prior art does not teach or fairly suggest (taken in combination with the other claimed features) a capacitor comprising a conductive second contact disposed externally on the dielectric body and electrically connected to the second plate, and the second contact being located sufficiently close to the first contact to form a first fringe-effect capacitance with the first contact ....
(See Pl. Opp. to Def. Findings & Conclusions on Inequitable Conduct, Ex. C.) The plain meaning of the above sentence is that the patent examiner considered the combination of all of the limitations of claim 1 to be the point of novelty, not just *1313 the “fringe-effect capacitance.” Moreover, as Section 1302.14 of the USPTO’s Manual of Patent Examining Procedures submitted by ATC provides, “[t]he statement [of allowance] is not intended to necessarily state all the reasons for allowance or all the details why claims are allowed and should not be written so specifically or impliedly state that all the reasons for allowance are set forth.” (Def. Reply, Ex. 2 [Doc. No. 331-2].) Indeed, it would have been improper for the examiner to unilaterally limit claim 1 to just “fringe-effect capacitance.” See id. (“Where specific reasons are recorded by the examiner, care must be taken to ensure that statements of reasons for allowance (or indication of allowable subject matter) are accurate, precise, and do not place unwarranted interpretations, whether broad or narrow, upon the claims.”).
Accordingly, the Court rejects ATC’s erroneous interpretation of the examiner’s reasons for allowance of claim 1 as well as ATC’s arguments that rely upon that interpretation. 22
ii. The Devoe 'JpSO patent
The first reference relied upon by ATC in support of its inequitable conduct charge is the Devoe patent, U.S. patent number 5,367,430 (“Devoe '430 patent”). The Devoe '430 patent is titled “Monolithic Multiple Capacitor,” and describes that “it is impossible to eliminate all stray capacitance between pairs of electrical conductors in a monolithic ceramic capacitor” and that “[i]t is a further object of the present invention to provide a monolithic multiple capacitor in which stray capacitance between pairs of terminals is used to form useful circuit elements.” 23 (See Def. Findings & Conclusions on Inequitable Conduct, Ex. ABS, col. 2:68-3:2, 3:30-3:33 [Doc. No. 312-4].)
In granting the reexamination of the '356 patent, the USPTO noted that “a reasonable Examiner would consider [the Devoe '430 patent] important in making a decision as to the patentability of claim 1 of the '356 patent.”
24
(Id.,
Ex. AKI_0022.) This preliminary determination by the USPTO, while not relevant to the issue of patent validity, is surely probative of
materiality. See McKesson,
Nonetheless, ATC did not meet its burden of showing intent to deceive by clear and convincing evidence. First, ATC argues that necessary intent can be drawn from the materiality of the '430 patent combined with the fact that Alan Devoe allegedly thought in June 2001 that the capacitors made for JDSU were covered by the '430 patent.
(See
Def. Findings & Conclusions on Inequitable Conduct, Ex. PM.) However, “the fact that information later found material was not disclosed cannot, by itself, satisfy the deceptive intent element of inequitable conduct.”
Star Scientific,
More importantly, the Devoes testified at trial that they believed the '430 patent was not relevant to the asserted claims of the '356 patent. For example, Daniel Devoe testified that the '430 patent was a “totally different kind of animal” because it dealt with a hearing-aid circuit device intended to operate at a range of a few cycles to 10,000 cycles, while the '356 patent was aimed at the much higher range of up to 40 billion cycles.
(See, e.g.,
Trial Tr. Day 2, at 29:13-29:23; 55:24-56:10, 56:24-57:8, 57:20-57:24.) Likewise, Alan Devoe testified that by the time the patent application was finally drafted, the Devoes did not believe the '430 patent was relevant.
(See, e.g.,
Trial Tr. Day 3, at 176:15-177:1.) While the inference of intent to deceive may properly be drawn from indirect and circumstantial evidence, it “must not only be based on sufficient evidence and be reasonable in light of that evidence, but it must also be the
single most reasonable inference
able to be drawn from the evidence to meet the clear and convincing standard.”
Star Scientific,
in. The Devoe 'US patent
The next reference relied upon by ATC is the Devoe patent, U.S. patent number 6,366,443 (“Devoe '443 patent”). The Devoe '443 patent deals with a “ceramic chip capacitor of conventional volume and external form having increased capacitance from use of closely-spaced interior conductive planes reliably connecting to positionally-tolerant exterior pads through multiple redundant vias.” (See Def. Findings & Conclusions on Inequitable Conduct, Ex. ABT.) Among other things, the Devoe '443 patent discloses the aforementioned C=kA/d formula for measuring capacitance between parallel plates. 27 (See id,., col. 4:48-4:53.)
ATC’s sole argument that the Devoe '443 patent was material is that it discloses “fringe-effect capacitance,” which is the alleged “point of novelty” of the '356 patent. However, as noted above, the Court rejects ATC’s insistence that the “fringe-effect capacitance”
by itself
is the point of novelty.
(See supra
Part I.H.L) Nonetheless, even if not a “point of novelty,” a prior reference with a potential fringe-effect capacitance would likely be material to a reasonable examiner.
See, e.g., Hoffmann-La Roche, Inc. v. Promega Corp.,
*1316 [[Image here]]
Moreover, there was likely knowledge, at least on behalf of Daniel Devoe, that the '443 patent was relevant so as to give rise to an inference of intent. There was inconsistent testimony at trial regarding potential relevance of the '443 patent. On the one hand, Alan Devoe testified that the Devoe '443 patent was not relevant because it was not intended for “broadband” use, the resulting capacitors were “not surface mountable,” and the external vias were merely used for beneficial purposes without really recognizing the “novelty of the invention” that would later crystalize.
(See
Trial Tr. Day 3, at 178:6-178:21.) Likewise, Daniel Devoe testified that the Devoe '443 patent was “a different kind of animal” because although it also uses a high-frequency capacitor, “it is disconnected from the broadband part that we’re arguing about.”
(See
Trial Tr. Day 2, at 60:6-60:15.) On the other hand, Daniel Devoe also testified that the structure of Figure 2b above resembles the structure claimed in the '356 patent.
(See id.
at 32:4-33:12.) Indeed, Daniel Devoe testified that the '443 patent discloses how to arrange “two connections on the top” and then bring them “close together” to achieve a “better frequency performance.”
(See id.
61:17-62:3.) At the very least, this presents a close case where Daniel Devoe recognized that the structure of the '443 patent was similar to what is claimed in the '356 patent, and yet decided not to disclose it because he believed it not to be relevant. If that is the case, he had the duty to disclose it to the examiner, and let the examiner determine whether or not the reference was material.
See Critikon, Inc. v. Becton Dickinson Vascular Access, Inc.,
iv. The Trinh '851 patent
The next reference put forth by ATC is the Trinh '854 patent, which is titled “Fringe-Field N on-Overlapping-Electrodes Discoidal Feed-Through Ceramic Filter Capacitor with High Breakdown Voltage.” (See Def. Findings & Conclusions on Inequitable Conduct, Ex. AAG.) The Trinh '854 patent teaches that “[f|ringe-effect capacitance is always present” between exterior metal terminations of opposite polarity. (Id., col. 9:49-9:52.) It also teaches that when the voltage is small, that fringe-effect capacitance is “negligible” in comparison to the overall capacitance, and is “disregarded.” (Id., col. 9:52-9:56.) On the other hand, in a high voltage multi-layer ceramic capacitor, the '854 patent teaches that “the fringe capacitance commences to be a sizable, measurable, portion of the total capacitance.” (Id., col. 9:56-9:59.)
As with the Devoe '430 patent, the USP-TO’s grant of reexamination noted that “a
*1317
reasonable Examiner would consider [the Trinh '854 patent] important in making a decision as to the patentability of claim 1 of the '356 patent.” (Def. Findings & Conclusions on Inequitable Conduct, Ex. AKI — 0015.) Accordingly, even though it might not be relevant to patent validity, this demonstrates the Trinh '854 patent would likely be material to a reasonable examiner.
See McKesson,
Nonetheless, ATC cannot show the threshold level of intent by clear and convincing evidence. First, as already noted, there is very little basis to ATC’s argument that the words “conflict-existing patent” found in Daniel Devoe’s notebook referred to any conflict due to the Trinh '854 patent, or were even related to the '356 patent application.
(See, e.g.,
Trial Tr. Day 2, at 23:5-24:4, 29:1-30:3, 34:15-34:19.) Moreover, the mere fact that there is fringe-effect capacitance disclosed between
internal
plates in the '854 patent does not mean it was or should have been recognized as material to what is claimed in the '356 patent. On the contrary, the Devoes and their patent attorney testified that they believed the '854 patent not to be relevant to the '356 application, in part because it was designed to deal with reliability of voltage breakdown and because it would not make sense to use that invention with the high frequencies at which the BB capacitor and the 545L capacitor operate.
(See, e.g., id.
at 51:5-53:3; Trial Tr. Day 3, at 70:12-70:18.) In light of this testimony, the Court cannot conclude that the only inference that can be drawn is that there must have been an intent to deceive the USPTO when the patent applications were filed.
See Star Scientific,
v. The Seaman '88f patent
The last patent relied upon by ATC is the Seaman patent, U.S. patent number 4,661,884 (“Seaman '884 patent”). The Seaman '884 patent was filed by Harry V. Seaman of ATC on March 10, 1986, and is titled “Miniature, Multiple Layer, Side Mounting High Frequency Blocking Capacitor.” (See Def. Findings & Conclusions on Inequitable Conduct, Ex. ABU.) The '884 patent was one of the patents cited by the Devoes in their '430 patent. Notably, the Devoe '430 patent acknowledged that the '884 patent “teaches a single capacitor in which external conductive terminals are brought out to be soldered to a circuit board.” (Id., Ex. ABS, col. 1:66— 2:1.)
Although it is a close question, the Court believes the Seaman '884 patent would have been material to a reasonable examiner. While it is unclear whether the '884 patent discloses fringe-effect capacitance as claimed in the '356 patent, the Devoes’ own patent (the '430 patent) acknowledges that the '884 patent teaches about bringing out conductive terminals to the outside of the capacitor, which is an integral part of the '356 patent’s claim limitations. Accordingly, there is a substantial likelihood that a reasonable examiner would have considered the Seaman '884 patent material to the application.
See Hoffmannr-La Roche,
Nonetheless, ATC has not shown the necessary level of intent by clear and convincing evidence. ATC argues there was intent to deceive because the '884 patent was cited in the '430 patent, the Devoes were apparently “concerned” about it, and Daniel Devoe admitted the '884 patent dis
*1318
closes fringe-effect capacitance between the contacts. However, as Daniel Devoe testified, the reason the '884 patent was cited in the '430 patent and the reason the Devoes were “concerned” with it was the little groove in the '884 patent that was somewhat similar to the grooves being cut in the '430 patent.
(See
Trial Tr. Day 2, at 58:4-58:25.) None of that is applicable to the '356 patent. Likewise, it is unclear whether the '884 patent discloses fringe-effect capacitance as claimed in the '356 patent.
(See id.
at 59:11-59:22.) Accordingly, the Court cannot say with confidence that ATC has proven by clear and convincing evidence that there was intent to deceive.
See McKesson,
vi August 2000 capacitors
ATC also argues the Devoes should have disclosed the sale of the August 2000 capacitors to the USPTO. First, ATC argues that the August 2000 capacitors were material because they anticipate most of the asserted claims as determined by Dr. Dougherty. However, even without deference to the jury’s verdict on this issue, it is unclear whether the August 2000 capacitors anticipate the '356 patent.
(See, e.g.,
Trial Tr. Day 6, at 42:3-45:11; Trial Tr. Day 7, at 87:7-88:23.) Moreover, there was testimony that the August 2000 capacitors were merely “generic” capacitors that Presidio makes in large quantities for a number of customers.
(See
Trial Tr. Day 2, at 63:10-63:18, 64:10-65:2.) In addition, there was testimony that the August 2000 capacitors
were
disclosed to the USPTO through prior art and figures identified as prior art, in particular Figure 2A.
(See id.
at 64:18-64:22; Trial Tr. Day 7, at 151:10-152:22, 156:25-157:1.) It is well-established that information or a reference is not material if it is merely cumulative to other information or references considered by the examiner.
McKesson,
vii The inventorship dispute
ATC next argues that there was inequitable conduct due to Presidio’s failure to disclose the existence of an inventorship dispute with regard to Chuck Rosier. Misinformation about inventorship can be the basis for a claim of inequitable conduct.
See, e.g., PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc.,
Furthermore, even if material, ATC cannot show by clear and convincing evidence the threshold level of intent. Relying on piecemeal portions of the exhibits, ATC argues the Devoes knew of the potential inventorship dispute and therefore should have disclosed it.
{See
Def. Findings &
*1319
Conclusions on Inequitable Conduct, Exs. PI, PL, UK, UL.) However, the most that can be concluded from these exhibits is that
at me point
there was talk between the parties about a joint cooperation or ownership agreement, but it was then rejected by Presidio as being unfair.
(See, e.g.,
Trial Tr. Day 4, at 3:21-9:1, 25:20-30:5.) Accordingly, because ATC has failed to show by clear and convincing evidence that the Devoes believed there was any inventorship dispute at the time the patent application was filed, the Court finds there was no intent to deceive.
See McKesson,
viii. Alleged misrepresentations in the specifications
Finally, ATC argues inequitable conduct charge is supported by the misrepresentations in the specifications of the '356 patent. Use of past tense or prophetic examples to describe an experiment, when that experiment was never actually performed as described, may be a misrepresentation actionable as inequitable conduct.
See, e.g., Hoffmann-La Roche,
The Court finds that the misrepresentations, if any, in the specifications of the '356 patent would not have been considered material by a reasonable examiner. With respect to the past tense language used, the instances in this case are significantly different from the charged conduct in
Hoffmann
on which ATC relies. In
Hoffmann,
each step of the disputed Example VI, over more than two columns of the patent, was described in the same fashion, using the past tense.
*1320 [[Image here]]
Similarly, it is very unlikely that a reasonable examiner would have considered the use of past tense in the following sentence, which describes Figure 15A, material: “While the fringe effect capacitances 127, 129 may be relatively small compared to other overlapping parallel plate capacitances 75 within the capacitor 120, the fringe effect capacitances 127, 129
have been found
to effect the high frequency performance of the capacitor 120.”
{See
'356 patent, col. 10:3-10:8 (italics added).) Presidio argues that in this context, the phrase “have been found” refers more to a technical theory of operation of the capacitor shown, rather than to any alleged experiments. This is a reasonable inference that the Court is entitled to credit.
See Star Scientific,
Finally, even if these alleged misrepresentations were material, there has been no showing of intent to deceive the USPTO. Contrary to
Hoffmann,
[[Image here]]
ix. Conclusion
Having considered the materiality and intent associated with each one of the grounds relied upon by ATC, the Court must next determine whether the '356 patent as a whole should be declared unenforceable. As previously stated, with respect to each asserted ground, ATC must first prove a threshold level of “materiality” and “intent” by clear and convincing evidence.
See McKesson,
In the present case, the Court concludes that on balance the equities do not make the Devoes’ conduct before the USPTO “egregious enough to warrant holding the entire patent unenforceable.”
See Star Scientific,
II. Infringement
A. Sufficiency of the evidence supporting the jury’s verdict of infringement
ATC also moves for a JMOL on the issue of infringement. Because the Court previously granted ATC summary judgment on the issue of infringement under the doctrine of equivalents and on induced and contributory infringement,
(see
MSJ Order, at 17-18 [Doc. No. 165]), the only issue submitted to the jury was that of literal infringement. Literal infringement first requires the court to interpret the claims to determine their scope and meaning.
Dynacore Holdings Corp. v. U.S. Philips Corp.,
First, ATC argues there was no sufficient evidence to demonstrate that the 545L capacitor had a “substantially monolithic dielectric body” as required by the '356 patent, which the Court defined as “a dielectric body largely but not wholly without seams from the inclusion of plates within the dielectric body.” ATC argues that Dr. Huebner allegedly admitted “there are no seams” in the 545L capacitor. (See Trial Tr. Day 4, at 112:24-113:14.) However, taking Dr. Huebner’s testimony as a whole, he was only indicating that the word “seams” is not used by persons skilled in the art and that the word “substantially” is necessary only because no capacitor can be 100% monolithic. (See, e.g., id. at 100:18-101:8, 102:19-103:5, 105:17-105:23, 112:18-112:23.) Moreover, assuming the word “seam” referred to a boundary between a plate and the dielectric, as contended by ATC, Dr. Huebner *1322 testified there would be 140 seams in the 545L capacitor, and therefore it would be “substantially, but not wholly, without seams.” 29 (See id. at 116:18-117:17.) Likewise, assuming the word “seams” referred to defects and/or porosity, Dr. Huebner agreed there were seams in the 545L capacitor, and therefore it was once again “substantially, but not wholly, without seams.” 30 (See id. at 128:23-132:20.) Finally, Dr. Huebner testified that despite his view on the appropriateness of the word “seams,” he faithfully applied the Court’s claim construction. Accordingly, there was sufficient evidence for the jury to credit Dr. Huebner’s opinion and to find that the 545L capacitor was “substantially monolithic.” 31
Second, ATC argues there was no sufficient evidence to demonstrate that the 545L capacitor had a “fringe-effect capacitance,” which the Court initially defined as “a determinable capacitance” and then further defined as “a capacity that is capable of being determined in terms of a standard unit.” Presidio, however, points to Dr. Huebner’s detailed dissection and analysis of the 545L capacitor in arguing that he did conclude there was fringe-effect capacitance that was “determinable.” (See Trial Tr. Day 4, at 56:1-67:5, 75:15-85:7.) The Court agrees. Notably, Dr. Huebner testified that he took detailed micrographs of the 545L capacitor, and that he also measured a determinable fringe-effect capacitance in the 545L capacitor by using the C=kA/d formula and inputting the actual thickness of the external contact, the actual separation distance, and a lower and upper boundary for what the dielectric constant might be. (See id. at 120:24-121:24.) Accordingly, there was sufficient evidence for the jury to credit Dr. Huebner’s opinion and to find that the 545L capacitor had a “fringe-effect capacitance” between the external contacts.
For the foregoing reasons, and because ATC makes no objections with respect to any other claim terms, the Court finds there was sufficient evidence for the jury to conclude that Presidio demonstrated by preponderance of the evidence that the 545L capacitor infringes all of the asserted claims of the '356 patent.
*1323 B. Willfulness
ATC next challenges the jury’s finding of -willful infringement. To demonstrate willful infringement, a patentee must show at least “objective recklessness,” which is a two-part process:
[First], a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. The state of mind of the accused infringer is not relevant to this objective inquiry. If this threshold objective standard is satisfied, the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.
In re Seagate Tech., LLC,
In the present case, even if ATC “acted despite an objectively high likelihood that its actions constituted infringement of a valid patent,” Presidio failed to show by clear and convincing evidence that ATC did so with the necessary subjective intent.
See Seagate,
i. Alleged “affirmative duty of due care”
Presidio’s first argument is that ATC had a duty to investigate and determine whether it had a good faith belief to market the 545L capacitors in light of the '356 patent. However, Presidio relies solely on
pre-Seagate
case law in support of this proposition. Prior to
Seagate,
a potential infringer who had actual notice of another’s patent rights had “an affirmative duty to exercise due care to determine whether or not he is infringing.”
See Underwater Devices Inc. v. Morrison-Knudsen Co.,
*1324 ii. Alleged copying
Likewise, there is little merit to Presidio’s argument that willfulness is demonstrated by ATC’s copying of Presidio’s
unpatented
BB capacitors. Evidence of copying may be relevant to
Seagate’s
second prong, “as it may show what the accused infringer knew or should have known about the likelihood of its infringement.”
DePuy Spine, Inc. v. Medtronic Sofamor Danke, Inc.,
Hi. Failure to obtain opinion of counsel
Finally, ATC’s failure to present an opinion of a patent attorney — while a relevant factor — is not clear and convincing evidence of willfulness. Contrary to ATC’s objections, the failure to obtain an opinion of counsel
is
a relevant factor post
Seagate.
In
Seagate,
the Federal Circuit noted that over the years, its case law has erroneously established that accused infringer’s failure to obtain an opinion of counsel gave rise to an “adverse inference” as to willfulness of infringement.
Case law post-Seagate is split as to whether lack of opinion of counsel is still a valid factor that can be considered by the jury in determining willfulness of infringement. Many courts seem to have concluded that, while there is no longer any “adverse inference” from the failure to obtain opinion of counsel, it is still a factor to be *1325 considered in the “totality of the circumstances” approach. 33 A number of courts, however, have interpreted Seagate differently, concluding that lack of opinion of counsel cannot be considered by the jury at all. 34 Having considered the issue, the Court agrees with what appears to be the majority view post-Seapaie that lack of opinion of counsel, while not giving rise to an adverse inference, is still a factor that the jury can consider when applying the “totality of the circumstances” approach with respect to willfulness of infringement.
This one factor, however, is insufficient to demonstrate by clear and convincing evidence that ATC’s infringement was willful — i.e., that the objectively-defined risk “was either known or so obvious that it should have been known” to ATC.
See Seagate,
iv. Conclusion
For the foregoing reasons, the jury’s finding that Presidio demonstrated willful infringement by clear and convincing evidence is not supported by substantial evidence. Accordingly, because the jury’s verdict on this issue was “ ‘against the great weight of the evidence,’ ” the Court GRANTS ATC’s motion for JMOL on the issue of willfulness.
See Hangarter,
III. Damages
ATC next moves for a JMOL on the issue of damages. [Doc. No. 309]. Presidio opposes ATC’s motion, [Doc. No. 320], and separately moves for: (1) supplemental damages for ATC’s continued infringe *1326 ment; (2) enhanced damages due to ATC’s willful infringement; (3) pre-judgment and post-judgment interest; (4) recovery of costs; and (5) attorney’s fees. [Doc. No. 307]. With respect to recovery of damages, Section 284 provides:
Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.
35 U.S.C. § 284. With regard to attorney’s fees, Section 285 provides that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. § 285.
A. Sufficiency of the evidence supporting the jury’s award of damages
At trial, Presidio advanced a lost-profits theory under the four-factor
Panduit
test, which requires a showing of: “(1) demand for the patented product, (2) absence of acceptable noninfringing substitutes, (3) manufacturing and marketing capability to exploit the demand, and (4) the amount of profit that would have been made.”
DePuy Spine,
i. Demand for the patented product
ATC first argues the award of lost profits was improper because the BB capacitors do not practice the '356 patent, and the '356 patent itself cannot qualify as the patented
product.
The first
Panduit
factor, however, is not limited to just patented products, but rather asks whether demand existed for a product that is “covered by the patent in suit” or that “directly competes with the infringing device.”
See DePuy Spine,
In the present ease, substantial evidence supported the jury’s finding that demand existed for the BB capacitors, which compete with the 545L capacitors. 35 For example, Mr. Newman testified about the “head-to-head” competition of these two products, as well as his conclusion that it was essentially a two-competitor market. (Trial Tr. Day 4, at 155:20-156:13, 162:17-162:23,194:19-197:1,199:5-201:21.) He indicated that he was aware that the BB capacitors were not covered by the '356 patent. (Id. at 156:14-157:6.) According to Mr. Newman, demand existed for the BB capacitors during the relevant time, primarily due to their “one-piece design.” (Id. at 157:10-157:20, 158:14-162:23.) Other evidence at trial supported Mr. Newman’s testimony that both customers and manufacturers were looking for more relia *1327 bility provided by a one-piece design. 36 (See, e.g., PL Opp. to Def. Motion for JMOL, Ex. G.) Likewise, other evidence supported Mr. Newman’s testimony that both ATC and its customers were dissatisfied with the 540L capacitor’s two-piece design, and that the sales of the 540L capacitors were already declining when ATC started to produce the 545L capacitors. (See, e.g., Trial Tr. Day 2, at 140:3-140:17; Trial Tr. Day 3, at 116:18.)
ATC argues it was improper to consider the BB capacitors because they and the 545L capacitors serve different markets.
See BIC Leisure Prods., Inc. v. Windsurfing Int’l, Inc.,
ii. Absence of acceptable noninfringing substitutes
ATC next argues that in the hypothetical “but for” market, the consumers would have chosen the noninfringing 540L capacitors over the BB capacitors due to: (1) better insertion loss of the 540L capacitors (0.5 dB at 40 GHz) versus the BB capacitors (0.9 dB at 40 GHz); and (2) standard industry size of the 540L capacitors (0402) versus non-standard size of the BB capacitors (0502). Moreover, according to ATC, consumers looking for lower insertion loss could have also resorted to purchasing DLI’s Opti-Caps, or ATC’s 520L or 530L capacitors. Consumers looking for a one-piece design could have resorted to purchasing ATC’s one-piece Monsorno 500S capacitors.
However, the “[m]ere existence of a competing device does not make that device an acceptable substitute.”
TWM Mfg. Co. v. Dura Corp.,
Finally, “[a] patentee need not negate every possibility that the purchaser might not have purchased a product other than its own, absent the infringement.”
Rite-Kite,
Hi. Calculating lost profits
ATC next alleges a number of errors committed by Mr. Newman in calculating Presidio’s lost profits: (1) he did not account for the impact on the sales of BB capacitors caused by the recession; (2) he should have reduced the final amount by 10-20% to reflect the sales of the 545L capacitors that were made to ATC’s largest customer, Richardson Electronics, with which ATC has an exclusive agreement; (3) lost profits should be reduced to account for any 540L capacitors that would have been sold in the hypothetical “but for” market at the 2006 manufacturing capacity level of 100,000; (4) it was improper to exclude large customers, rather than large shipments, from the calculations; and (5) based on Presidio’s own financial statements, the miscellaneous incremental costs would have accounted for 10% as opposed to Mr. Newman’s arbitrary selection of 3%.
The Court rejects all of these objections because there was sufficient evidence presented to the jury to support its lost profits verdict. For example, with respect to Richardson Electronics, although it is txnxe that it buys exclusively from ATC, Mr. Newman testified that the focus should be on the customers that are buying the capacitox’s from Richardson. (See Trial Tr. Day 4, at 201:22-202:15.) Accordingly, there was evidence for the jury to conclude that with 545L capacitors unavailable, those customers could have purchased dix-ectly from Presidio rather from ATC through Richardson. (See id.) Likewise, as was already noted, it was for the jury to decide whether customers in the hypothetical “but for” market would have purchased any additional 540L capacitors. As for excluding largest customers, instead of largest shipments, ATC’s own expert testified that this was not necessarily improper. (See Trial Tr. Day 6, at 121:6-121:18.) Finally, the jury was px’esented with two different ways to adjust for miscellaneous *1329 costs, and therefore could reasonably choose to apply Presidio’s proposed selection of 3% instead of ATC’s selection of 10%.
For the foregoing reasons, substantial evidence in the record supports both the application of the first two Panduit factors and the overall amount of damages awarded. Accordingly, the Court DENIES ATC’s motion for JMOL with respect to the jury’s verdict on lost profits.
B. Supplemental damages
Presidio moves unopposed for supplemental damages in light of ATC’s continued infringement. Under Section 284, a finding of infringement requires the Court to award damages that are “adequate to compensate” the plaintiff. 35 U.S.C. § 284. “ ‘[Supplemental damages are calculated consistent with the damages awarded in the jury verdict.’ ”
Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc.,
No. CV-03-0597-PHX-MHM,
C. Enhanced damages
In light of the jury’s finding of willful infringement, Presidio also moves for enhancement of damages. Upon a finding of infringement, Section 284 requires the court to award “damages adequate to compensate for the infringement.” 35 U.S.C. § 284. The same section also gives the court discretion to “increase the damages up to three times the amount found or assessed.”
Id.
However, for the damages award to be increased, the fact-finder must first determine “whether an infringer is guilty of conduct upon which increased damages may be based,” such as an act of willful infringement or bad faith.
Jurgens v. CBK, Ltd.,
In the present case, in light of the JMOL on the issue of willfulness, the Court finds that Presidio is not entitled to enhanced damages. Prior to
Seagate,
the Federal Circuit has explicitly held that “ ‘enhancement of damages
must be
premised on willful infringement or bad faith.’ ”
See Beatrice Foods Co. v. New England Printing & Lithographing Co.,
D. Pre-judgment interest
Presidio moves for award of prejudgment interest. Section 284 allows the Court to award prejudgment interest “where necessary to afford the plaintiff full compensation for the infringement.”
Gen. Motors Corp. v. Devex Corp.,
As an initial matter, the Court rejects ATC’s argument of “undue delay.” According to ATC, pre-judgment interest is inappropriate because despite knowing that ATC began selling its 545L capacitors in June 2006, Presidio did not bring the suit until May 17, 2007, and even when it did bring the suit, Presidio did not have standing to enforce the '356 patent until May 8, 2008. ATC, however, fails to point to any evidence showing that Presidio knew of ATC’s sales as soon as they commenced. Presidio also argues persuasively that its position has always been that it was appropriately named as the plaintiff in this matter from the beginning, and that ATC has not demonstrated otherwise. Accordingly, ATC has failed to demonstrate any “undue delay.”
Likewise, the Court rejects ATC’s argument that the interest should be awarded at the prime rate of 5.9%, rather than the statutory rate of 7%. ATC alleges that “courts routinely award prejudgment interest at the prime rate, which approximates the actual interest cost of borrowing money for businesses much better than the inflexible statutory rate requested by Presidio,” but fails to cite any support for that proposition.
(See
Def. Opp. to PI. Motion for Post-Trial Remedies, at 16-17.) On the contrary, California courts have found that a simple interest rate of 7% is usually appropriate to fully compensate the plaintiff for the infringement.
37
See, e.g., In re Hayes Microcomputer Prod., Inc. Patent Litig.,
Accordingly, the Court awards Presidio pre-judgment interest in the amount of simple interest at seven percent accruing from the date of first infringement, which in this case is June 2006.
E. Post-judgment interest
The parties agree that pursuant to 28 U.S.C. § 1961, “[[Interest shall be allowed
*1331
on any money judgment in a civil case recovered in a district court.” Post-judgement interest is “calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System.” 28 U.S.C. § 1961;
accord Wordtech Sys., Inc. v. Integrated Network Solutions, Inc.,
No. 2:04-cv-01971-MCEEFB,
F. Attorney’s fees
Presidio also argues it is entitled to attorney’s fees pursuant to Section 295, which provides that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. § 285. A determination whether to award attorney fees is a two-step process.
Forest Labs., Inc. v. Abbott Labs.,
None of the above factors are present here. As the Court already concluded, there was no willful infringement. Likewise, although “[l]itigation misconduct and unprofessional behavior are relevant to the award of attorney fees, and may suffice to make a case exceptional under § 285,”
Sensonics,
G. Recovery of costs
A successful plaintiff in a patent action may be entitled to recovery of its costs. See 35 U.S.C. § 284; Fed. R. Civ. P. 54(d); Civ. L.R. 54.1. ATC does not oppose Presidio’s recovery of costs, although it does challenge the propriety of some of the items for which Presidio seeks recovery. Accordingly, the Court GRANTS Presidio award of its costs, subject to a later determination of propriety of any specific item of recovery.
IV. False marking
A. Intent to deceive prior to October U, 2008
ATC separately moves for a JMOL with respect to the jury’s finding that Presidio did not have the “intent to deceive” the public with its false marking prior to October 24, 2008. “Intent to deceive is a state of mind arising when a party acts with sufficient knowledge that what it is saying is not so and consequently that the recipient of its saying will be misled into thinking that the statement is true.”
Clontech Labs., Inc. v. Invitrogen Corp.,
Intent to deceive, while subjective in nature, is established in law by objective criteria. Thus, “objective standards” control and “the fact of misrepresentation coupled with proof that the party making it had knowledge of its falsity is enough to warrant drawing the inference that there was a fraudulent intent.” Thus, under such circumstances, the mere assertion by a party that it did not intend to deceive will not suffice to escape statutory liability. Such an assertion, standing alone, is worthless as proof of no intent to deceive where there is knowledge of falsehood. But in order to establish knowledge of falsity the plaintiff must show by a preponderance of the evidence that the party accused of false marking did not have a reasonable belief that the articles were properly marked (i.e., covered by a patent). Absent such proof of lack of reasonable belief, no liability under the statute ensues.
Id. at 1352-53 (internal citations omitted).
ATC argues that because the Devoes formed no belief as to whether they were properly marking the BB capacitors, there is no way the jury could have found the Devoes had a “reasonable belief’ that BB capacitors were properly marked. See id. ATC, however, fails to recognize that as a party alleging false marking, it has the burden of establishing “knowledge of falsity” by preponderance of the evidence. See id. ATC can satisfy its burden by affirmatively demonstrating “lack of reasonable belief.” See id. (emphasis added). Notably, and fatal to ATC’s motion, Presidio did not have to show anything, much less that it did have a “reasonable belief,” unless ATC first met its burden.
In any event, there was substantial evidence in the present case to support the jury’s finding that the Devoes did form a reasonable belief that BB capacitors were covered by the '356 patent. For example, Dan Devoe testified that although he did not inquire as to whether the BB capacitors practiced any of the claims of the '356 patent, he believed that they did practice the '356 patent. (Trial Tr. Day 2, at 44:7- *1333 44:19.) Likewise, although Lambert Devoe initially testified that Presidio did not “form a belief or understanding whether any particular claim of the '356 patent covered the BB capacitor,” he later clarified that Presidio “thought those [marking] decisions were correct,” especially in light of a cross-sectional diagram on the front cover of the '356 patent which “looks remarkably similar” to the BB capacitors. (Trial Tr. Day 2, at 131:24-132:3; Trial Tr. Day 3, at 21:18-24:19.) Similarly, Gunter Vorlop testified at his deposition that he believed that Presidio had a patent on its BB capacitors, and that one of those patents was the '356 patent. (Vorlop Dep., at 207-08 (Jan. 6, 2009), attached to Def. Motion for JMOL on False Marking, Ex. 5.)
For the foregoing reasons, there was sufficient evidence for the jury to find that the Devoes did not understand the intricacies of the marking process at the time the false marking took place, and that they actually believed they
had
to mark their products in order to assert their patents and to protect their rights. In light of this, there was substantial evidence before the jury to find that ATC has failed to demonstrate that prior to October 24, 2008, the Devoes lacked a “reasonable belief’ that the '356 patent covered the BB capacitors.
See Clontech,
B. Amount of the fine
Section 292 provides: “Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word ‘patent’ or any word or number importing that the same is patented, for the purpose of deceiving the public ... [s]hall be fined not more than $ 500 for every such offense.” 35 U.S.C. § 292(a). This Court previously adopted the “continuous act” test set forth in
London,
At this stage of the proceedings, the Court is faced with two questions: (1) how many of the BB capacitors were “falsely marked” in violation of the statute, and (2) what should be the amount of the fine for each violation. With regard to the first question, the Court rejects ATC argument that there was a million BB capacitors shipped between October 24, 2008 and April 23, 2009. This figure is based mostly on a single statement made by Lambert Devoe on cross-examination. (See Trial Tr. Day 2, at 123:14-123:17.) Rather, the Court adopts Presidio’s figure of 483,385, which is based on Presidio’s statements of the actual number of capacitors shipped. 39 *1334 (See PI. Opp. to Def. Findings & Conclusions on False Marking, Ex. D.) However, because the document submitted by Presidio only has data starting from December 10, 2008, the Court will adjust this number proportionally to account for the capacitors sold between October 24, 2008 and December 9, 2008. By Court’s calculations, that would be 168,290 additional capacitors sold, 40 bringing the total to 651,675 units.
In this context, the Court also rejects Presidio’s proposal that the Court only assess fines for those capacitors that were shipped with a falsely marked label. As ATC correctly points out, during the relevant time, Presidio also advertised the BB capacitors in its catalog and on its website as practicing the '356 patent. (See, e.g., Trial Tr. Day 2, at 125:16-126:18; Def. Findings & Conclusions on False Marking, Exs. 12, RD, AHY_0004). Under Section 292, liability is imposed for “mark[ing] upon,” “affix[ing] to,” as well as for “usLing]” the patent in advertising. See 35 U.S.C. § 292(a). Accordingly, just because Presidio did not mark all of the shipped BB capacitors with the '356 patent does not change the fact that it violated the statute by using the '356 patent in advertising all of those BB capacitors. 41 Accordingly, the Court finds that Presidio committed 651,675 separate offenses for the 651,675 BB capacitors shipped between October 24, 2008 and April 2009.
Finally, with respect to the amount of the fine, the Court rejects the suggestions from both of the parties.
42
In determining the amount of the fine, the Court must strike an appropriate balance between enforcing the public policy embodied in the statute and not imposing a disproportionately large fine for relatively small viola
*1335
tions.
See Forest Group,
Y. Permanent injunction
Presidio next moves for a permanent injunction in light of the jury’s verdict finding the '356 patent to be valid and infringed. The decision to grant or deny injunctive relief rests within the equitable discretion of the district court, and such discretion “must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards.”
eBay, Inc. v. MercExchange, L.L.C.,
(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
Id.
at 391,
A. Irreparable injury
i Presumption of irreparable injury
In their moving papers, the parties appear to dispute whether Presidio is entitled to a presumption of irreparable injury in light of the jury’s finding that the '356 patent is valid and infringed. Presidio alleges numerous courts have granted permanent injunctions in similar circumstances, by following the Federal Circuit’s pronouncement that “[i]n matters involving patent rights, irreparable harm has been presumed when a clear showing has been made of patent validity and infringement.”
See Richardson v. Suzuki Motor Co.,
The parties also cite to conflicting post-
eBay
Federal Circuit case law on this issue. On the one hand, Presidio argues the Federal Circuit has recently indicated that “[i]t remains an open question ‘whether there remains a rebuttable presumption of
*1336
irreparable harm following
eBay.’ ” See Broadcom Corp. v. Qualcomm Inc.,
ii. No irreparable injury
The question of presumption aside, Presidio’s assertion of irreparable injury can be broken down into several distinct arguments. First, Presidio alleges that ATC and it are direct competitors who compete in the same market for some of the same customers. As previously noted, however, there was conflicting testimony at trial on whether the BB capacitors and the 545L capacitors competed for the same customers, and whether this was solely a two-competitor market. At most, Presidio has only shown that: (1)
some of
ATC’s customers for the 545L capacitors are the same as Presidio’s customers for the BB capacitors; (2) the two products are sold in
some of
the same markets; and (3) Presidio was
at times
seen as ATC’s only true competitor. In opposition, ATC has presented evidence that: (a) the BB capacitors are only competitive at the lower level of performance market (i.e., insertion loss of 0.9 dB at 40GHz) at lower prices; (b) at that level they really compete only with DLI’s Opticap and Millicap; and (c) ATC’s 545L capacitors are more superior (insertion loss of 0.3 dB at 40GHz), and ATC offers them at a higher price. In light of this testimony, the Court cannot say that Presidio has carried its burden of demonstrating that ATC and it were direct competitors.
See Adv. Cardiovascular Sys., Inc. v. Medtronic Vascular, Inc.,
Second, even if the Court accepts Presidio’s allegations of a two-competitor market, that does not automatically lead to the conclusion that there is irreparable injury. Rather, Presidio still has to provide at least some data on any specific sales or customers lost, or what its share of the market is.
See, e.g., Adv. Cardiovascular Sys.,
Third, to the extent Presidio argues that irreparable injury can be established solely on the basis of the statutory right to exclude,
see
35 U.S.C. § 154(a)(1), that argument is foreclosed by the Supreme Court’s decision in
eBay. See
Finally, Presidio’s unwillingness to license the '356 patent does not change the Court’s determination. In
eBay,
B. Adequacy of money damages
Section 283 provides that “[t]he several courts having jurisdiction of cases under this title
may
grant injunctions in accordance with the principles of equity to
prevent
the violation of any right secured by patent, on such terms as the court deems reasonable.” 35 U.S.C. § 283 (emphases
*1338
added). “Under some circumstances, awarding an ongoing royalty for patent infringement in lieu of an injunction may be appropriate.”
Paice LLC v. Toyota Motor
Corp.,
“While money damages are generally considered inadequate to compensate for the violation of a patentee’s right to exclude, [the patentee] nonetheless [has] a burden to iterate
specific reasons
why [the] infringement can not be compensated for with a money award.”
Praxair,
Many of Presidio’s arguments to the contrary are based on its assertion that injury to “tangential benefits” — such as reputation and good will — cannot be compensated with monetary damages.
See, e.g., Polymer Techs., Inc. v. Bridwell,
Finally, the Court is not persuaded by Presidio’s argument that awarding it damages instead of an injunction would essentially force Presidio to grant a license to ATC after it has made a strategic choice not to license its patent.
See 3M Innovative Props. Co. v. Avery Dennison Corp.,
Case No. 01-1781 (JRT/FLN),
C.Balance of hardships
The balance of hardships in this case tips in Presidio’s favor. On the one hand, in light of the fact that Presidio does not practice the '356 patent or has any intention to do so in the future, the only harm that it will suffer is based on the already-rejected “tangential benefits.” On the other hand, ATC asserts that an abrupt termination of the 545L capacitor product line would be detrimental to its business and to the business of its customers. However, as Presidio correctly points out, “ ‘[o]ne who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against continuing infringement destroys the business so elected.’ ”
Broadcom,
D. Public interest
The public interest factor in this case tips; in ATC’s favor. “Successful exploitation” of the patent by the infringer does not allow the infringer to avoid a permanent injunction.
See Broadcom,
E. Conclusion
Accordingly, because Presidio has failed to carry its burden in demonstrating that it will suffer an irreparable injury in the absence of an injunction or that money damages are inadequate to compensate it, and because the public interest tips in ATC’s favor, the Court DENIES Presidio’s motion for a permanent injunction.
*1340
Having declined to issue an injunction, the Court must next consider whether an imposition of an “ongoing royalty” will be appropriate. “Under some circumstances, awarding an ongoing royalty for patent infringement in lieu of an injunction may be appropriate.”
Paice,
Accordingly, the Court ORDERS that the parties submit supplemental briefing on whether the Court should allow them to negotiate their own license agreement, or whether the Court should impose a specific amount of “ongoing royalty.” Because this is Presidio’s motion, Presidio shall file the first brief no later than April 26, 2010. ATC shall file a response no later than May 10, 2010. Presidio shall file any reply no later than May 17, 2010.
CONCLUSION
To the extent ATC also seeks a new trial on the issues of validity, infringement, lost profit damages, [Doc. No. 309], and false marking before October 24, 2008, [Doc. No. 308], the Court DENIES those motions for the same reasons as set forth above. Having reviewed the parties’ arguments and the evidence adduced at trial, the Court cannot say that “ ‘the verdict is contrary to the clear weight of the evidence, or is based upon evidence which is false,’ ” or that a new trial is necessary “ ‘to prevent ... a miscarriage of justice.’ ”
See Hangarter,
For the foregoing reasons, the Court rules as follows:
(1) Presidio’s Motion for Permanent Injunction is DENIED. Presidio shall file a supplemental brief no later than April 26, 2010 on whether the Court should allow the parties to negotiate them own license agreement, or whether the Court should impose a specific amount of “ongoing royalty.” ATC shall file a response no later than May 10, 2010. Presidio shall file any reply no later than May 17, 2010.
(2) Presidio’s Motion for Post Trial Remedies is GRANTED IN PART and DENIED IN PART. Specifically, the Court DENIES Presidio’s request for enhanced damages and attorney’s fees. On the other hand, the Court GRANTS Presidio’s request for supplemental damages, and for award of pre-judgement and post-judgment interest and costs. With respect to supplemental damages, the Court ORDERS that ATC provide an accounting for any sales of 545L capacitors occurring after December 1, 2009. Such accounting shall be submitted to the Court no later than May 10, 2010. With respect to the pre-judgment interest, the Court awards Presidio pre-judgment interest in the amount of simple interest at seven percent accruing from the date of first infringement, which in this case is June 2006. The Court also awards Presidio post-judgment interest at the currently applicable rate.
(3) ATC’s Motion for JMOL or for New Trial with Respect to Presidio’s False Marking Before October 24, 2008 is DENIED.
*1341 (4) ATC’s Motion for JMOL and for New Trial is GRANTED IN PART and DENIED IN PART. Specifically, the Court GRANTS ATC’s motion with respect to willfulness of infringement. In all other respects, the Court DENIES ATC’s motion.
(5) ATC’s Motion for Entry of ATC’s Proposed Findings of Fact and Conclusions of Law with Respect to Presidio’s False Marking is GRANTED IN PART and DENIED IN PART. The Court finds that Presidio committed 651,675 separate offenses between October 24, 2008 and April 2009 for the 651,675 BB capacitors shipped during that time, and that the appropriate fine should be $0.35 per unit. Accordingly, the total amount of the fine for false marking is $228,086.25.
(6) ATC’s Motion for Entry of ATC’s Proposed Findings of Fact and Conclusions of Law Regarding Indefiniteness is DENIED.
(7) ATC’s Motion for Entry of ATC’s Proposed Findings of Fact and Conclusions of Law Regarding Unenforceability of the '356 Patent for Inequitable Conduct is DENIED.
IT IS SO ORDERED.
Notes
. A “transistor” is essentially a switch that turns on and off to regulate the flow of current or voltage in electrical circuits.
. An "independent” claim stands and falls on its own. A "dependent” claim, on the other hand, includes all of the requirements of a particular independent claim plus additional requirements of its own. As a result, if a particular independent claim is found not to be infringed, the dependent claims corresponding to it cannot be infringed. On the other hand, if an independent claim has been infringed, a separate determination is still necessary to determine whether the additional requirements of its dependent claims have also been infringed.
.While all of the asserted dependent claims depend on claim 1, the asserted claims 4 and 5 also depend on claim 3.
. Presidio asserts the end date of false marking should be April 23, 2009, which was the *1291 date of the hearing on the parties' cross-motions for summary judgment at which Presidio's counsel represented that Presidio had, prior to that hearing, discontinued any marking utilizing the '356 patent. (See Pl. Opp. to Def. Findings & Conclusions on False Marking, at 1 & n. 2; accord Trial Tr. Apr. 23, 2009, at 29-31.) ATC does not appear to dispute this end date.
. In its reply, ATC notes it did object to Dr. Ewell's qualifications and fitness as an expert at the summary judgment stage. The Court rejected those objections at that time, noting that "[wjhile Dr. Ewell stated he does not design multi-layer capacitors in his current position, his long experience regarding capacitors, including evaluating capacitor reliability and compliance with a particular specification, qualify him to opine on how a skilled artisan would apply the claim language.” (See Order Denying Defendant's Motion for Summary Judgment of Indefiniteness, at 8 [Doc. No. 32].) To the extent ATC seeks reconsideration, the Court now reaffirms its pri- or ruling.
. ATC challenges the jury verdict of no invalidity as to all of the asserted claims 1-5, 16, and 18-19. However, as already mentioned, only claim 1 is truly independent. All of the other seven claims are dependent at least on claim 1 (and in case of claims 4-5, also on claim 3). Accordingly, in the discussion that follows, the Court will focus mostly on whether ATC has shown that claim 1 is invalid. If legally sufficient evidence is present to find that claim 1 is not invalidated, that necessarily means there is sufficient evidence to find that none of the other claims are invalidated.
. The statute provides that "A person shall be entitled to a patent unless ... the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.” 35 U.S.C. § 102(b).
. In the C=kA/d equation, "k” represents the dielectric constant of the insulating material between the plates, "A” represents the area of each of the opposed plates in square meters, "d” represents the distance between the plates, and "C” is the resulting capacitance in farads.
.ATC also argues another Presidio patent, the Trinh and Daniel Devoe patent, U.S. patent number 6,545,854 ("Trinh patent” or "the '854 patent”) unequivocally states that “fringe-effect capacitance is always present ...." (See Def. Motion for JMOL or New Trial, Ex. ABP, col. 9:49-9:50.) However, ATC takes this phrase out of context. The '854 patent goes on to state that when the voltage is small, that fringe-effect capacitance is “negligible” in comparison to the overall capacitance, and accordingly is "disregarded.” (Id. col. 9:52-9:56.) Thus, a reasonable jury could have concluded that, even if "always present,” such fringe-effect capacitance is not always determinable as required by the Court’s claim construction.
. U.S. patent number 3,304,475 ("Gowen patent”).
. U.S. patent number 5,978,205 ("Aoyagi patent”).
. See Trial Tr. Day 5, at 164:11-165:1, 176:9-178:24.
. As already noted, the only testimony offered at trial by ATC on combining known elements was Dr. Dougherty's testimony on combining the Aoyagi patent with either the Heron patent or the August 2000 capacitors. (See Trial Tr. Day 5, at 164:11-165:1, 176:9-178:24.) However, neither of those combinations would overcome the Court's prior finding that legally sufficient evidence supports the jury’s conclusion that these references do not anticipate the asserted claims because they do not teach fringe-effect capacitance between external contacts. {See supra Part I.B.iii-iv.)
. U.S. patent number 5,576,926 ("Monsorno patent”).
. ATC's claim of “contemporaneous conception” is further undermined by the jury's express finding that ATC failed to meet its burden of showing that the '356 patent does not "name all actual inventors and only the actual inventors.” (See Verdict Form, at 4 [Doc. No. 298].)
. The use of "functional language” is addressed in more detail below in the context of ATC's argument that the '356 patent is invalid due to indefiniteness. (See infra Part I.G.ii.)
. In addition, to the extent ATC argues the written description requirement is not met because Presidio never reduced the '356 patent to practice, the Federal Circuit unequivocally rejected that argument.
See Ariad,
.The Court also rejects ATC's argument that it is entitled to a new trial because the Jury Instructions only asked the jury to consider whether the inventors were in "possession of the invention” without specifying that what is required for compliance with the written description is "possession as shown in the disclosure.”
See Ariad,
. ATC's argument that none of the experts in this case have heard of the term "substantially monolithic” prior to this case misses the point. Whether or not the phrase existed is not the issue; rather, the question is whether "one skilled in the art would understand the bounds of the claim when read in light of the specification.”
See Exxon,
. In this context, the Court rejects ATC's argument that the Court cannot rely on Dr. Ewell’s testimony at trial because it constitutes extrinsic evidence that contradicts the intrinsic record.
See Phillips v. AWH Corp.,
. ATC argues Dr. Ewell's test is indefinite because the same fringe-effect capacitance would be sometimes infringing and sometimes not depending on the "sensitivity” of the capacitance meter used to measure it.
See Halliburton,
. Indeed, in its recent grant of reexamination, the USPTO identified the following as the point of novelty of the '356 patent: “a capacitor comprising a conductive second contact disposed externally on the dielectric body and electrically connected to the second plate, and the second contact being located sufficiently close to the first contact to form a first fringe-effect capacitance with the first contact.” (See Def. Findings & Conclusions on Inequitable Conduct, Ex. AKL.0008.)
. According to ATC, "stray capacitance” is another term for "fringe-effect capacitance.”
. Presidio challenges ATC's reliance on the reexamination proceedings and on Exhibit AKI, which is the USPTO's Decision Granting Ex Parte Reexamination, arguing that doing so contradicts the Court’s prior exclusion of that evidence at the motions
in limine
stage. However, contrary to Presidio’s argument, the Court only precluded the use of the reexamination proceedings before the jury, concluding that even if relevant, the grant of reexamination would likely confuse the jury.
(See
Order on PL MIL: Reexamination of the '356 Patent, at 3 [Doc. No. 252].) Moreover, the question at this stage is not whether a prior reference is relevant to patentability or validity, which were the issues addressed in the Court's ruling on Presidio's motion
in limine,
but rather whether "a reasonable examiner would substantially likely consider [it] important in deciding whether to allow an application to issue as a patent.”
See McKesson,
. ATC's continued reference to the words "conflict-existing patent” in Daniel Devoe's notebook is not persuasive. (See Def. Findings & Conclusions on Inequitable Conduct, Ex. UL.) There is nothing on tire page where those words appear to indicate whether this refers to a perceived conflict with any of the patents relied upon by ATC in its inequitable conduct charge, or whether it refers to the '356 patent at all. (See, e.g., Trial Tr. Day 2, at 23:5-24:4, 29:1-30:3, 34:15-34:19.)
. ATC relies on
Elk Corp. of Dallas v. GAF Bldg. Materials Corp.,
. The C=kA/d formula does not appear in the '356 patent.
. For the reasons discussed previously, the Court also rejects ATC’s argument that failure to indicate that there is fringe-effect capacitance in Figure 2A amounted to a misrepresentation.
. Assuming each plate has corresponding 2 seams, Dr. Huebner's testimony was consistent with the specifications in the '356 patent, which contemplate a capacitor with 30 to 100 layers, and therefore with 60 to 200 seams. (See '356 patent, col. 2:2 — 2:5.)
. There was nothing improper with Dr. Huebner defining the word "seam” as referring to a defect and/or porosity. As Presidio correctly points out, this Court never defined the word "seam.” Accordingly, both ATC and Presidio were within their right to offer at trial conflicting expert opinions defining that term. Moreover, even if the exact words "gaps,” "voids,” and "porosity” did not appear in Dr. Huebner’s report, ATC cannot show any prejudice because Dr. Huebner also testified that the 545L capacitor was "substantially, but not wholly, without seams” according to ATC's own proposed definition of the word "seam.” (See Trial Tr. Day 4, at 116:18-117:17.)
.The extent to which Dr. Huebner's testimony on cross-examination allegedly contradicted his testimony on direct was for the jury to decide.
Cf. Doan v. United States,
. Unable to point at what exactly ATC copied, Presidio alleges it was “Presidio’s idea of a one-piece, substantially monolithic construction.”
(See
PL Opp. to Motion for JMOL, at 30.) However, Mr. Mruz provided extensive testimony on how ATC came up with one-piece design for the 545L capacitors.
(See
Trial Tr. Day 5, at 49:19-50:12, 52:9-59:20.) Because Presidio has failed to point to any contrary testimony, there is no basis for Presidio’s argument that there was "egregious copying” or "sudden emergence” of an infringing product.
See Trading Tech. Int’l, Inc. v. eSpeed, Inc.,
No. 04 C 5312,
.
See, e. g., Finjan Software, Ltd. v. Secure Computing Corp.,
C.A. No. 06-369(GMS),
.
See, e.g., Spectralytics, Inc. v. Cordis Corp.,
No. 05-CV-1464 (PJS/RLE),
. ATC argues Mr. Newman's analysis was improper because it treated the '356 patent itself as the patented product, even though the '356 patent is neither a capacitor nor a product. However, a review of Mr. Newman's entire testimony demonstrates that he was actually referring to the demand for the innovations covered by the '356 patent-such as the BB capacitors' and the 545L capacitors' "one-piece design.” (See, e.g., Trial Tr. Day 5, at 157:10-157:20, 158:14-162:23.)
. For example, at trial, Presidio introduced one of ATC’s own documents that set forth five reasons for embracing ATC’s next generation ultra-broadband capacitor, the 545L. (See Pi. Opp. to Def. Motion for JMOL, Ex. G.) Among those five reasons were: (1) "[o]nepiece construction, with its inherently higher reliability” and (2) "smaller size than all counterparts (consumes less space; reduces propensity to launch surfaces modes).” (See id.)
. In California, "[i]n the absence of any legislative act to the contrary, the rate of prejudgment interest is 7 percent."
Pacific-Southern Mortgage Trust Co. v. Ins. Co. of North Am.,
. The only case the Court found that awarded attorney’s fees on somewhat similar facts was
Cargill, Inc. v. Sears Petroleum & Transport Corp.,
. ATC does not really challenge the accuracy of this figure. The only objection comes from *1334 the fact that the figure only covers the BB capacitors shipped from December 10, 2009 until April 23, 2009. As is discussed further, this omission is easily correctable by adjusting the 483,385 figure proportionally for the 47 missing days between October 24, 2009 and December 9, 2009.
. The parties appear to agree that the figure "483,385” corresponds to the time period between December 10, 2009 and April 23, 2009, which amounts to 135 days. The parties also appear to agree that the figure does not include the 47 days between October 24, 2009 and December 9, 2009. Accordingly, by dividing 483,385 units by 135 days, and then multiplying by 47 days, the Court determines that a proportional number of units sold during the earlier period amounts to 168,290.
. To be used "in advertising,” the false marking must have occurred in a medium or through a channel designed to promote the unpatented product to consumers.
See, e.g., Inventorprise, Inc. v. Target Corp.,
No. 09-CV00380,
.ATC suggests punishing Presidio with a hefty fine of $1.00 for each BB capacitor shipped, while Presidio argues the fine should be literally "a fraction of a penny” per article.
. In this regard, Presidio's reliance on
I-Flow Corp. v. Apex Med. Techs., Inc.,
No. 07cv1200 DMS (NLS),