Case Information
*2 Before D YK M OORE , and T ARANTO , Circuit Judges. D YK , Circuit Judge .
Presidio filed suit against American Technical Ceram- ics Corp. (“ATC”) for patent infringement in the District Court for the Southern District of California. After sepa- rate jury and bench trials, the district court held the asserted claims were infringed and not invalid, and granted a permanent injunction. The district court limited damages due to intervening rights.
We affirm the district court’s holdings that the claims are not indefinite and that ATC is entitled to absolute intervening rights because a substantive amendment was made during reexamination. We conclude that the evi- dence does not support an award of lost profits and, therefore, reverse the award of lost profits and remand for determination of a reasonable royalty. We conclude that the district court did not abuse its discretion in declining to award enhanced damages. We vacate the permanent injunction, and remand for further proceedings with respect to the injunction.
B ACKGROUND
Presidio’s suit against ATC, filed on September 2, 2014, alleged infringement of U.S. Patent No. 6,816,356 (“the ’356 patent”). The ’356 patent claims a multilayer capacitor design and teaches a multilayer integrated network of capacitors electrically connected in series and in parallel.
A capacitor is a passive electrical component that stores and releases energy. Generally, a capacitor com- prises two parallel metal plates separated by a non- conductive material, known as a dielectric. When a capac- itor is connected to a power source, electricity passes through the metal plates, but not through the dielectric material. This causes a positive charge to accumulate on one plate and a negative charge to accumulate on the other plate. The capacitor will then release the stored energy when the two plates are connected to a conductive path that closes the circuit. The amount of energy that a capacitor can store is called its “capacitance.”
Multiple capacitors can be combined to form a multi- layer capacitor. The claimed multilayer capacitor creates capacitance in the dielectric material between the parallel plate combinations. Moreover, when the electrodes of a multilayer capacitor are positioned in an edge-to-edge relationship, they form “fringe-effect” capacitance be- tween the external contacts. “Fringe-effect” capacitance is the energy stored in between external contacts of the multilayer capacitor.
While the district court infringement suit was pend- ing, in 2015, ATC sought an ex parte reexamination of the claims of the ’356 patent in light of new prior art. The examiner rejected the claims as anticipated and obvious. Presidio amended the claims. The Patent and Trademark Office issued a reexamination certificate for the ’356 patent. [1] Amended claim 1 of the ’356 patent, the only independent claim asserted by Presidio in this action, is as follows, with the language added during reexamination underscored:
1. 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;
a conductive first contact disposed exter- nally on the dielectric body and electrical- ly connected to the first plate; and a conductive second contact disposed ex- ternally on the dielectric body and electri- cally connected to the second plate, and the second contact being located sufficient- ly close to the first contact in an edge to edge relationship in such proximity as to form a first fringe-effect capacitance with the first contact that is capable of being determined by measurement in terms of a standard unit. U.S. Patent No. 6,816,356 C2, col. 1, ll. 23–36 (Reex- amination Certificate filed Dec. 8, 2015).
On December 22, 2015, Presidio amended its district court complaint, alleging infringement of the ’356 patent claims 1, 3, 5, 16, 18, and 19 as amended by the reexami- nation certificate. Presidio alleged that ATC’s 550 line of capacitors infringed the asserted claims.
ATC defended, as is relevant for present purposes, that the claims were indefinite; that the reexamination amendment entitled it to intervening rights, limiting damages; and that Presidio was not entitled to lost profits or enhanced damages. The district court granted ATC’s motion for summary judgment on the affirmative defense of absolute intervening rights. The district court then held a jury trial. The jury returned a verdict finding direct infringement and induced infringement of claims 1, 3, 5, 16, 18, and 19 of the ’356 patent by all of the accused products—ATC’s 550 line of capacitors. In addition, the jury found that Presidio had proven by clear and convinc- ing evidence that ATC’s infringement of the asserted claims was willful. The jury awarded Presidio $2,166,654 in lost profit damages. It did not reach Presidio’s claim for a reasonable royalty. The jury also issued an advisory verdict as to indefiniteness, finding that ATC failed to prove by clear and convincing evidence that claim 1 of the ’356 patent is indefinite. [2]
The district court thereafter rejected ATC’s contention that the asserted claims of the ‘356 patent are invalid due to indefiniteness and denied ATC’s motion that Presidio had failed as a matter of law to prove lost profits. The district court also denied Presidio’s motion for enhanced damages, determining that enhanced damages were not warranted despite a jury finding of willful infringement. The district court then entered a permanent injunction against ATC.
ATC appealed, challenging the district court’s deter- mination that the claims were not indefinite, the award of lost profits, and the award of a permanent injunction. Presidio cross-appealed, challenging the district court’s determination as to absolute intervening rights and the denial of enhanced damages. We have jurisdiction under 28 U.S.C. § 1295(a)(1).
On October 21, 2016, we granted a partial stay of the injunction until March 17, 2017 with respect to ATC’s customers that purchased infringing capacitors before June 17, 2016.
D ISCUSSION I
We first address whether the claims are indefinite. 35
U.S.C. § 112 provides that “[t]he specification shall con-
clude with one or more claims particularly pointing out
and distinctly claiming the subject matter which the
applicant regards as his invention.” Indefiniteness is a
question of law that this court reviews de novo.
Teva
Pharm. USA, Inc. v. Sandoz, Inc.
, 789 F.3d 1335, 1341
(Fed. Cir. 2015). Underlying factual findings are reviewed
for clear error.
UltimatePointer, LLC v. Nintendo Co.
, 816
F.3d 816, 826 (Fed. Cir. 2016). A patent is indefinite “if its
claims, read in light of the specification delineating the
patent, and the prosecution history, fail to inform, with
reasonable certainty, those skilled in the art about the
scope of the invention.”
Nautilus
,
Inc v. Biosig Instru-
ments, Inc.
,
As noted earlier, the claims here cover multilayer ca- pacitors with a fringe-effect capacitance between external contacts that is “capable of being determined by meas- urement in terms of a standard unit.” U.S. Patent No. 6,816,356 C2, col. 1, ll. 35–36 (Reexamination Certificate filed Dec. 8, 2015).
Here, the patent discloses a method of measuring ca- pacitance called insertion loss testing. The patent specifi- cation references insertion loss testing as a method to measure the performance of capacitors. Figures 21A and 21B display insertion loss diagrams, which identify inser- tion loss testing as a method that may be used to measure performance of capacitors. ’356 patent, col. 6, ll. 10–15, col. 7, ll. 3–18. Moreover, in the prosecution history dur- ing the reexamination, Presidio amended the claims to require fringe effect capacitance capable of being deter- mined “by measurement” and explained that the effects of a capacitance according to the invention “can be shown by measurement, such as is done in the measurements of insertion loss referenced in the patent in Figs. 21A and 21B.” J.A. 2654, 2656. The method of insertion loss test- ing was well-known in the art, and there is no dispute that insertion loss testing can measure the overall per- formance of a capacitor. Indeed, ATC uses insertion loss testing itself to measure the performance of capacitors when comparing its products to Presidio’s products for purposes of determining whether Presidio lost sales to ATC. See infra Part III.
Insertion loss measures how much of a signal is lost when a capacitor is inserted into a circuit. To determine insertion loss, a network analyzer measures the ratio of the input power to the output power of the capacitor in a circuit, which indicates the efficiency with which the signal passes through the capacitor in the circuit. The measurement unit for insertion loss is decibels, and this measurement is a function of all of the capacitances, resistances, and inductances within the capacitor. Thus, the insertion loss value correlates to the overall capaci- tance of the capacitor. Although industry standards for insertion loss testing had not been published at the time the patent was filed, Presidio’s expert, Dr. Huebner, testified that insertion loss testing had been “well known for many decades” and that a person of ordinary skill could use insertion loss measurements to measure capaci- tance in terms of Farads, the standard unit of measure- ment for capacitance. J.A. 1513, 1376-80.
While it was established that insertion loss testing could be used to measure overall performance of capaci- tors, it was not well known as a method to measure the comparative contributions from different capacitances within the multilayer capacitor. Nor does the patent specification describe how to apply the insertion loss method to determine the portion of the overall capaci- tance that is attributable to the fringe-effect capacitance.
However, at trial, Presidio presented expert testimony by Dr. Huebner that a person of skill in the art would know how to measure fringe-effect capacitance by using insertion loss measurements to measure the overall capacitance, by then removing the dielectric material between the multilayer plates, and by then taking inser- tion loss measurements to determine the remaining capacitance. Without the dielectric material, the remain- ing capacitance would necessarily be attributable to the fringe-effect capacitance. Thus, Dr. Huebner testified that a person skilled in the art could measure the impact of fringe-effect capacitance on performance of the capacitor. He also testified that a person skilled in the art would then be able to determine the capacitance in terms of the standard unit of Farads.
Under our post-
Nautilus
cases, a claim is not indefi-
nite if a person of skill in the art would know how to
utilize a standard measurement method, such as insertion
loss, to make the necessary measurement. A patent need
not explicitly include information that is already well
known in the art.
Nautilus
, 134 S. Ct. at 2127;
see also Dow Chem. Co. v. Nova Chem. Corp.
,
Nonetheless, ATC argues that Dr. Huebner’s method- ology is not an established methodology because insertion loss testing had not previously been applied to measure fringe-effect capacitance, the patent itself provided no guidance as to how to make the measurement, and Dr. Huebner made subjective judgments in developing the test methodology for that purpose. In other words, ATC contends that Dr. Huebner developed a new test method- ology rather than using an established test methodology or one for which the patent provided necessary guidance, and that the claims are therefore indefinite.
Even assuming that ATC is correct that an entirely new method could in some circumstances render the claims indefinite, this is not such a situation. Here, as we earlier noted, the insertion loss testing method was well established and referenced in the patent. Although the specific steps performed by Dr. Huebner had not been published in any industry publications or peer-reviewed articles, the general approach of making modifications to a capacitor to isolate the impact of discrete capacitances was within the knowledge of someone skilled in the art. Based on this record, the district court could properly conclude that such measurement was within the skill of a skilled artisan based on an established method.
Here, the claims do not require that fringe-effect ca-
pacitance exist at any particular level; they only require
that it be capable of measurement in terms of a standard
unit. To be sure, even where the claims require a particu-
lar test result, there may be (and often are) disputes
between the parties as to the proper application of the
test methodology in the circumstances of an individual
case. But those disputes are disputes about whether there
is infringement, not disputes about whether the patent
claims are indefinite. Here, the general approach was
sufficiently well established in the art and referenced in
the patent to render the claims not indefinite. The claims
do not rely on the “unpredictable vagaries of any one
person’s opinion.”
Interval Licensing LLC v. AOL, Inc.
,
766 F.3d 1364, 1371 (Fed. Cir. 2014) (quoting
Datamize,
LLC v. Plumtree Software, Inc.
,
II
Next, we address the issue of intervening rights. Pre- sidio cross-appeals the district court’s grant of summary judgment of absolute intervening rights to ATC, which barred damages for the period before December 8, 2015, the date that the reexamination certificate issued. [3]
An owner of a patent that survives reexamination is
not entitled to infringement damages for the time period
between the date of issuance of the original claims and
the date of issuance of the reexamined claims if the origi-
nal and amended claims are not “substantially identical.”
35 U.S.C. §§ 252, 307(b). In other words, if an amendment
during reexamination makes a substantive change to an
original claim, the patentee is only entitled to infringe-
ment damages for the changed claim for the period follow-
ing issuance of the reexamination certificate.
R+L Carri-
ers, Inc. v. Qualcomm, Inc.
,
Presidio amended claims of the ’356 patent during an ex parte reexamination. As noted earlier, Presidio added the following underlined language to claim 1:
the second contact being located sufficiently close
to the first contact in an edge to edge relationship
in such proximity as to form a first fringe-effect
capacitance with the first contact that is capable
of being determined by measurement in terms of a
standard unit.
The district court found that these amendments sub-
stantially changed the claim scope and, therefore, ATC
was entitled to the defense of absolute intervening rights.
In making this determination, the district court compared
the scope of the original claims as construed by the dis-
trict court in a prior lawsuit between the parties,
Presidio
I
, with the interpretation of the claims as amended in the
reexamination.
Presidio Components, Inc. v. Am. Tech.
Ceramics Corp.
,
Presidio argues that the scope of its claims did not change during reexamination because its stated goal in amending the claims was to adopt the district court’s construction in Presidio I. During reexamination, Presidio stated it was making the amendment “to incorporate and make explicit the interpretation of the independent claims that was established in [the Presidio I ] litigation.” J.A. 128. However, the patentee’s intent in making the amendment is not determinative or controlling in deter- mining claim scope. Slimfold Mfg. Co. v. Kinkead Indus., Inc. , 810 F.2d 1113, 1116 (Fed. Cir. 1987). As we have explained, “[u]nder the statute and our prior case law, it is irrelevant why an amended claim is narrowed during reexamination, or even whether the patentee intended to narrow the claim in a particular way.” R+L Carriers , 801 F.3d at 1350 (emphasis in original).
Instead, the relevant inquiry is whether the scope of
the amended claims is actually identical to the scope of
the original claims based on normal claim construction
analysis, articulated in our en banc
Phillips
decision.
See
Phillips v. AWH Corp.
,
Presidio I was an infringement suit against ATC for the ’356 patent, filed on February 21, 2008. In Presidio I , Chief Judge Gonzalez construed the claims to require fringe-effect capacitance “that is capable of being deter- mined in terms of a standard unit.” J.A. 5243. In this respect, the original and amended claims are the same, as both require fringe-effect capacitance that is capable of being determined in terms of a standard unit. But in other respects, the Presidio I construction and the amend- ed claims are materially different. This is so because under the claim construction of the original claims, fringe- effect capacitance could be determined by theoretical calculations that are insufficient under the amended claims.
During the Presidio I trial, Dr. Huebner’s testimony that ATC’s products infringed used a purely theoretical calculation of fringe-effect capacitance. Dr. Huebner took measurements of dimensions and used a formula, C=kA/d, [4] to determine capacitance rather than measuring capacitance with actual instruments, as done in insertion loss testing. Chief Judge Gonzalez affirmed the jury finding of infringement based on this purely theoretical measurement, noting that Dr. Huebner:
measured a determinable fringe-effect capacitance in the 545L capacitor by using the C=kA/d formu- la and inputting the actual thickness of the exter- nal contact, the actual separation distance, and a lower and upper boundary for what the dielectric constant might be. Accordingly, there was suffi- cient 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.
J.A. 5303. Therefore, the district court concluded that the scope of the original claims included fringe-effect capaci- tance measured through purely theoretical measure- ments. [5]
The amended claims have a different scope. During the reexamination, the examiner rejected the original claims in light of a prior art reference that disclosed a capacitor arrangement where the fringe-effect capacitance of the arrangement could be determined using C=kA/d— the same theoretical calculation method used by Presid- io’s expert in Presidio I to opine on infringement. Presidio then amended the claims to overcome this rejection. The amendment added the words “by measurement.” When Presidio submitted the proposed amendments, it stated that the amended claim language excludes determina- tions of fringe-effect capacitance that “rel[y] entirely upon theoretical calculation” and argued that the rejections should be withdrawn because the prior art disclosed only an arrangement where fringe-effect capacitance could be determined “by way of theoretical computations” and not actual measurement. J.A. 128, 137. The patentee ex- plained that “determinable” includes “only what is practi- cally measurable, not merely what is theoretical or simulated.” J.A. 2659. Based on this explanation, the amended claims were allowed. Whether viewed as a disclaimer or as evidence relevant to the proper claim construction, it is clear that the amended claims exclude capacitors with fringe-effect capacitance that could be determined purely through theoretical calculation.
Therefore, there was a substantive change in claim scope. Under the scope of the original claims, theoretical calculations are sufficient to satisfy the claim limitations. Under the amendment claims, they are not. Based on this substantive change in claim scope, the district court properly granted the affirmative defense of absolute intervening rights.
III
The third issue is whether the district court correctly awarded lost profits. The district court held that the jury verdict awarding lost profits was supported by substantial evidence and denied judgment as a matter of law. The question is whether Presidio established its right to recover lost profits for its sales of the BB capacitors, which Presidio claimed were adversely affected by the sale of ATC’s infringing 550 line of capacitors.
To recover lost profits, the patentee bears the burden of proof to show a “reasonable probability that, ‘but for’ infringement, it would have made the sales that were made by the infringer.” Crystal Seminconductor Corp. v. TriTech Microelecs. Int’l, Inc. , 246 F.3d 1336, 1353 (Fed. Cir. 2001); BIC Leisure Prods, Inc. v. Windsurfing, Int’l, Inc. , 1 F.3d 1214, 1218 (Fed. Cir. 1993). “But-for” causa- tion can be proven using the test given in Panduit Corp. v. Stahlin Bros. Fibre Works, Inc. , 575 F.2d 1156 (6th Cir. 1978). See Versata Software, Inc. v. SAP Am., Inc. , 717 F.3d 1255, 1264 (Fed. Cir. 2013). The four-factor Panduit test requires the patentee to show: (1) demand for the patented product; (2) an absence of acceptable, non- infringing substitutes; (3) manufacturing and marketing capability to exploit the demand; and (4) the amount of profit that would have been made. Panduit , 575 F.2d at 1156. Presidio did not and does not seek to establish an entitlement to lost profits other than through the Panduit framework.
We review the denial of judgment as a matter of law
de novo, and we uphold the jury verdict if supported by
substantial evidence.
Callicrate v. Wadsworth Mfg., Inc.
,
427 F.3d 1361, 1366 (Fed. Cir. 2005). A patentee can
recover lost profits even if its product does not practice
the claimed invention, where the product directly com-
petes with the infringing device.
Presidio Components v.
Am. Tech. Ceramics
,
ATC argues that the district court erred by finding that substantial evidence supported that Presidio had satisfied the second prong of Panduit analysis—the absence of an acceptable, non-infringing alternative. To prove the absence of acceptable, non-infringing alterna- tives, the patentee may prove either that the potential alternative was not acceptable to potential customers or was not available at the time. Grain-Processing Corp. v. Am. Maize-Prod. Co. , 185 F.3d 1341, 1353–55 (Fed. Cir. 1999).
At the time of infringement, ATC sold two types of ca- pacitors: the 550 series capacitors, which were found to infringe, and the 560L capacitor, which was never accused of infringement. The district court found that sufficient evidence supported the jury’s finding that the 560L capac- itor was not an acceptable and available substitute.
As to the “acceptable substitute” question, the district court stated that “ATC’s own witness testified that the 560 capacitors are not as good as the 550 capacitors,” and concluded that “the 560L [capacitor] was not an accepta- ble, noninfringing alternative.” J.A. 82. On appeal, Presid- io argues that “the 560L product did not perform as well as the infringing 550 capacitor.” Presidio Br. 56-57.
The district court’s analysis and Presidio’s argument were flawed. The correct inquiry under Panduit is wheth- er a non-infringing alternative would be acceptable com- pared to the patent owner’s product, not whether it is a substitute for the infringing product. “The ‘but for’ inquiry therefore requires a reconstruction of the market, as it would have developed absent the infringing product, to determine what [sales] the patentee ‘would . . . have made.’” Grain Processing , 185 F.3d at 1350. The district court erred by relying on evidence about sales of the 560L capacitor in competition with the currently infringing product, rather than comparing the 560L capacitor to Presidio’s BB capacitor in a hypothetical market without the infringing 550 capacitor. There was not substantial evidence in the record upon which a jury could conclude that the 560L was not an acceptable, noninfringing alter- native for Presidio’s BB capacitors. Undisputed evidence showed that the 560L capacitor was less expensive than Presidio’s BB capacitor and also had lower insertion loss for at least some frequencies, which indicates better performance.
On the question of availability, the district court de- termined that sufficient evidence supported the finding that the 560L capacitor was not an available substitute because unlike the infringing 550 capacitors, ATC sold the 560L capacitor only to a single customer and did not list it on its website. An alternative does not need to be on the market to be available. Grain Processing , 185 F.3d at 1356. But here, the alternative was on the market. The undisputed evidence shows ATC sold 88,000 560L capaci- tors to the customer. The fact that ATC only sold the 560L capacitor to a single customer does not establish that it was unavailable. Moreover, the fact that the 560L capaci- tor was not widely advertised when sold in a market with the 550 capacitor does not show a lack of availability. In a hypothetical market including the 550 capacitors, ATC may have chosen not to advertise the 560L capacitor. However,
[w]ithout the infringing product, a rational would- be infringer is likely to offer an acceptable, nonin- fringing alternative, if available, to compete with the patent owner rather than leave the market al- together. The competitor in the “but for” market- place is hardly likely to surrender its complete market share when faced with a patent, if it can compete in some other lawful manner.
Id. at 1351. The patentee failed to establish the 560L
capacitor was not an available substitute.
In summary, Presidio failed to provide evidence that the 560L capacitor was either not an acceptable or availa- ble substitute to Presidio’s BB capacitor. We reverse the denial of judgment as a matter of law. The jury’s award of lost profits is set aside; Presidio is only entitled to receive a reasonable royalty award. Because the jury instructions and verdict form only directed the jury to consider a reasonable royalty award if Presidio had not proven it was entitled to lost profits, the jury did not return a finding about a reasonable royalty rate. Under these circumstances, a new trial is needed to determine the reasonable royalty award. [6]
IV
Next, we address the issue of enhanced damages. The
jury found that ATC willfully infringed the ’356 patent,
and the district court denied judgment as a matter of law
of no willful infringement. Despite the jury finding of
willfulness, the district court declined to award enhanced
damages. We review the determination not to award
enhanced damages for abuse of discretion.
WBIP, LLC v.
Kohler, Co.
, 829 F.3d 1317, 1339 (Fed. Cir. 2016) (citing
Halo Elecs., Inc. v. Pulse Elecs., Inc.
,
In patent infringement cases, district courts have dis-
cretion to “increase damages up to three times the
amount found or assessed.” 35 U.S.C. § 284;
Halo
, 136 S.
Ct. at 1931. Enhanced damages are generally only appro-
priate in egregious cases of misconduct, such as willful,
wanton, or malicious behavior.
Halo
, 136 S. Ct. at 1932.
But an award of enhanced damages does not necessarily
flow from a willfulness finding.
Id.; WBIP
, 829 F.3d at
1341 n.13. Discretion remains with the court to determine
whether the conduct is sufficiently egregious to warrant
enhanced damages.
WBIP
, 829 F.3d at 1341 n.13. In
determining whether enhanced damages are appropriate,
courts should consider the overall circumstances of the
case.
Halo
,
The district court here appropriately analyzed ATC’s culpability only during the period beginning when the reexamination certificate issued on December 8, 2015. The district court noted that at that point, ATC and Presidio were already involved in the present litigation, and ATC had been selling the 550 capacitors for almost six years without a finding of infringement. At that point, ATC had received the district court’s claim construction order and developed defense theories. Additionally, ATC had just succeeded in causing Presidio to narrow the scope of its claims during reexamination proceedings instituted by ATC. The district court further noted that ATC’s invalidity defense at trial was not meritless, though ultimately rejected by the jury. Therefore, the district court concluded that the present case was a “garden-variety” hard-fought patent case, rather than an egregious case of misconduct, and declined to award enhanced damages. J.A. 98-99.
Presidio argues that the district court erred as a mat- ter of law by failing to explicitly address each of the Read factors set forth in our decision in Read as relevant to an award of enhanced damages. See Read Corp. v. Portec, Inc. , 970 F.2d 816 (Fed. Cir. 1992), abrogated in part on other grounds by Markman v. Westview Instruments, Inc. , 116 S. Ct. 1384 (1996). However, the district court is not required to discuss the Read factors. When the Supreme Court articulated the current controlling test for decisions to award enhanced damages, it did not require the Read factors as part of the analysis. Halo , 136 S. Ct. at 1935; see Georgetown Rail Equip. v. Holland L.P. , 867 F.3d 1229, 1244 (Fed. Cir. 2017) (describing the Read factors as “non-exclusive”). [7] The Halo test merely requires the district court to consider the particular circumstances of the case to determine whether it is egregious. Here, the district court considered the particular circumstances of the case and determined the situation was not sufficiently egregious to warrant enhanced damages. The district court did not abuse its discretion in declining to award enhanced damages.
V
Lastly, the district court issued a permanent injunc- tion, which enjoined ATC from selling any 550 capacitors. We review the district court’s grant of an injunction for abuse of discretion. eBay Inc. v. MercExchange, LLC , 547 U.S. 388, 391 (2006). A district court abuses its discretion when it makes “a clear error of judgment in weighing relevant factors or exercise[s] its discretion based upon an error of law or clearly erroneous factual findings.” In- nogenetics, N.V. v. Abbott Labs ., 512 F.3d 1363, 1379 (Fed. Cir. 2008).
A permanent injunction may be entered against an in-
fringer where the patentee can prove: (1) it has suffered
an irreparable injury; (2) legal remedies, such as money
damages, are inadequate to compensate for that injury;
(3) the balance of hardships between the plaintiff and
defendant warrants an injunction; and (4) the public
interest would not be disserved by an injunction.
eBay
,
To prove irreparable injury, a patentee must show “1)
that absent an injunction, it will suffer irreparable harm,
and 2) that a sufficiently strong casual nexus relates the
alleged harm to the alleged infringement.”
Apple Inc. v.
Samsung Elecs. Co.
,
Where irreparable injury is based on lost sales, “a
likelihood of irreparable harm cannot be shown if sales
would be lost regardless of the infringing conduct.”
Apple
Inc. v. Samsung Elecs. Co.
,
However, we do not decide whether this should be the end of the matter. The district court has discretion to determine whether other evidence could support a finding of irreparable injury. In this respect, on remand, the district court should reopen the record and consider current evidence of irreparable harm. Since March 17, 2017, the injunction against ATC from selling 550 capaci- tors has been in effect. Based on the arguments and evidence presented to this court, it appears that this injunction may have created the hypothetical market necessary to determine whether consumers would pur- chase Presidio’s BB capacitors in the absence of ATC’s 550 series capacitors. On remand, the district court should consider whether consumers have turned to non- infringing alternatives to the BB capacitor, such as the 560L capacitor, after the 550 series capacitors became unavailable or whether Presidio’s sales of the BB capaci- tor have increased because the 550 series is no longer on the market. Based on this further evidence and other relevant evidence, the district court should determine whether Presidio has established irreparable injury and the appropriateness of an injunction.
C ONCLUSION
We affirm the district court’s finding of definiteness, grant of absolute intervening rights, and denial of en- hanced damages. We reverse the award of lost profits because Presidio failed to show the absence of an accepta- ble, non-infringing substitute. On remand, the damages award should be limited to a reasonable royalty, and a new trial should be conducted as necessary to determine the reasonable royalty rate. We vacate the permanent injunction, and remand with instructions to consider the relevant evidence and to determine whether Presidio has established irreparable injury.
AFFIRMED IN PART, REVERSED IN PART, VACATED IN PART, AND REMANDED
C OSTS
No costs.
[1] The PTO previously issued a reexamination certificate for the ’ 356 patent on September 13, 2011. This reexami- nation certificate did not alter any of the claims at issue in this case.
Notes
[2] Claims 3, 5, 16, 18, and 19 of the ’ 356 patent all depend from claim 1. Thus, all claims in this suit contain the limitation from claim 1 at issue.
[3] The district court denied ATC’s motion for equitable intervening rights, which has not been appealed.
[4] In the formula C=kA/d, C is the capacitance in farads, k is the dielectric constant of the insulating material between the plates, A is the area of each of the opposed plates in square meters, and d is the separation distance between the plates.
[5] Presidio repeatedly and inaccurately states that Chief Judge Gonzalez held that the original claims did not include “theoretically calculated fringe-effect capaci- tance.” Presidio Br. 29, 37, 66, 70, 72; Presidio Reply Br. 1, 3, 7, 12. In fact, Chief Judge Gonzalez only held that the claims exclude fringe-effect capacitance that is merely “negligible.” J.A. 5334.
[6] It may be that the parties agree that 25 cents per unit is the appropriate reasonable royalty rate, rendering a new trial unnecessary. J.A. 1094, 1116, 1477–78.
[7] Moreover, even before the
Halo
decision, explicit
discussion of the
Read
factors was not mandatory.
See,
e.g., Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings
,