Applying Seventh Circuit law to interpret a settlement agreement, the U. S. Court of Appeals for the Federal Circuit affirmed a summary judgment ruling that introduction of a "revised design" (i.e., from a previously accused device) was not a breach of the agreement. Panduit Corp. v. HellermannTyton Cor., Case No. 05-1337 (Fed. Cir. June 12, 2006) (Linn, J.).
The patent at issue involved a "modular offset power box and communication extension" for a "multi-channel power and communication wiring and raceway system." Raceway systems are commonly used in work spaces to install power outlets and phone lines. In this case, the patent improved the prior art. The power conductors on the raceway could be quickly and easily routed into a power box and isolated from the communication channel; therefore, the device could be quickly installed.
Panduit filed suit alleging infringement, which was shortly resolved by a settlement agreement whereby HellermannTyton agreed not to make or sell "Subject Products." The agreement defined "Subject Products" as "the HellermannTyton Multi-Channel Raceway Side Electric Box (HellermannTyton Part No. MCR-SEB)" and "all products, existing now or in the future, covered by any claim of the Panduit Patent."
After HellermannTyton introduced its "revised design," Panduit filed suit for breach of the agreement, alleging the new design infringed its patent. The sole difference between the previous design and the revised design was that the "wall abutting the trunking duct in the revised design is solid with no cutaway." The district court determined as a matter of law that the accused device was not the same as the device covered by the agreement. It construed several limitations of the claims, concluded the revised design was non-infringing and granted HellermannTyton’s summary judgment motion.
The Federal Circuit, applying the law of the Seventh Circuit on interpretation of the settlement agreement as well as on summary judgment determination, interpreted the contract language as limited to HellermannTyton Part No. MCR-SEB. The Court reasoned the plain language of the contract included only the exact product and not each colorable change, modification or variation. It also dismissed Panduit’s attempt to liken the agreement to an injunction covering colorable variations of the device in suit. Because the revised design was not Part No. MCR-SEB or physically the same as that part number, the Court affirmed summary judgment that its introduction was not a breach of the settlement agreement.
As to whether the revised design was an infringement, the Federal Circuit agreed with the district court’s claim construction and relied principally on the "intrinsic evidence of record, examining the claim language itself, the written description, and the prosecution history." The Court held that several of the properly construed claim elements were not found in the revised designs and affirmed the non-infringement determination.
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