In Charles Machine Works, Inc. v. Vermeer Manufacturing Co., No. 12-1578 (Fed. Cir. July 26, 2013), the Federal Circuit vacated-in-part and remanded the district court's grant of SJ of noninfringement of Vermeer Manufacturing Company's ("Vermeer") commercial products and noncommercial prototypes, holding that The Charles Machine Works, Inc. ("CMW") did not have sufficient notice that the prototypes were within the scope of the SJ. Additionally, with regard to Vermeer's accused commercial products, the Court affirmed the district court's SJ of no literal infringement but reversed the district court's SJ of noninfringement under the DOE and remanded.
This case concerns U.S. Patent No. 5,490,569 ("the '569 patent"), which generally relates to a two-pipe drill for boring underground holes in the horizontal direction. An inner pipe rotates the drill bit, while an outer pipe, which includes a body and casing, is used for steering. A deflection shoe included on one side of the casing creates an asymmetry about the casing's centerline axis. When the casing does not rotate, the deflection shoe causes the drill to deflect away from a straight path. When the casing rotates, however, the drill follows a straight horizontal path.
CMW alleged infringement by two types of Vermeer drills: noncommercial prototypes and commercial products, both of which include a structure called a "bent sub." CMW contended that the bent sub met the "deflection shoe" and "mounted on" limitations of the asserted claims. The district court granted Vermeer's SJ motion for noninfringement as to all accused products. CMW appealed the district court's decision.
"The term 'accused products' could in a colloquial sense arguably include all of the accused products. Here, however, the proposed rulings were expressly limited to 'COMMERCIAL' products. The internal use of 'accused products' did not expand the motion beyond its own express limits." Slip op. at 5.
The Federal Circuit vacated and remanded the district court's grant of SJ of noninfringement by Vermeer's noncommercial prototypes. In doing so, the Court focused on Vermeer's SJ motion and the statements made by both parties at the SJ motion hearing. The Court noted that Vermeer titled its own moving papers as a "MOTION FOR SUMMARY JUDGMENT THAT VERMEER'S COMMERCIAL PRODUCTS DO NOT INFRINGE" and that Vermeer's SJ motion made no substantive arguments regarding the prototypes. Slip op. at 4. The Court also noted that Vermeer's proposed rulings were expressly limited to "COMMERCIAL" products. Id. In addition, the Court observed that at the SJ hearing, Vermeer stated that its motion was limited to the commercial products and that an SJ on its motion would not end CMW's claims on three prototype units, which were never sold. In contrast, the Court noted that CMW's statements at the hearing did not indicate that the prototypes were part of SJ. The Court, therefore, concluded that CMW had insufficient notice that the SJ decision would include the accused prototypes, vacated the grant of SJ of noninfringement by the prototypes, and remanded.
With regard to literal infringement by Vermeer's commercial products, the Court noted that the parties had limited their arguments about literal infringement to the correctness of the district court's claim construction. Because the Court found no error in that claim construction, the Court affirmed the district court's grant of SJ of no literal infringement by the accused commercial products.
The Court, however, reversed the district court's grant of
SJ of noninfringement of the accused commercial products under the
DOE. In doing so, the Court focused on the CMW
expert's
function-way-result analysis and concluded that the expert's
declaration had established genuine disputes about
equivalence. Specifically, the Court noted the expert's
opinion that the bent sub on the accused products and the
deflection shoe in the claims of the '569 patent performed the
same function—that of deflecting the drill from a linear
path. The Court also noted the expert's opinion that both
structures performed the function in substantially the same way
because both had a portion disposed outside the cutting circle of
the drill bit, which reacted with the side of the bore hole and
caused the drill bit to deflect from a linear path. In
addition, the Court noted the expert's opinion that both
structures achieved the same result of deflecting the drill bit in
a direction opposite the deflection shoe. Noting that for
purposes of SJ, the Court must accept CMW's expert's
factual assertions as true, the Court held that the expert's
assertions raised genuine factual disputes material to the
function-way-result inquiries. The Court, therefore,
concluded that a reasonable jury could have found equivalence, and
held that the district court erred by making a contrary legal
determination.
Vermeer had also argued that a finding of equivalence would read the "deflection shoe" and "mounted on" limitations out of the claims and is thus barred by the doctrine of claim vitiation. The Court, however, concluded that the doctrine of claim vitiation did not bar CMW's application of the DOE.
Judges: Dyk, Mayer, Moore (author)
[Appealed from S.D. Iowa, Senior Judge Wolle]
This article previously appeared in Last Month at the Federal Circuit, August 2013
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