NOTE: This disposition is nonprecedential. 

## United States Court of Appeals for the Federal Circuit

2009-1170 SRAM CORPORATION (now known as SRAM, LLC), Plaintiff-Appellee,

v. AD-II ENGINE ERING, INC., Defendant-Appellant.

Richard B. Walsh, Jr. , Lewis, Rice & Fingersh, L.C., of St. Louis, Missouri, argued for plaintiff-appellee. Michael T. Brady , Miller & Chevalier Chartered, of Washington, DC, argued for defendant-appellant. Appealed from: United States District Court for the Northern District of Illinois Judge Robert W. GettlemanNOTE: This disposition is nonprecedential. 

## United States Court of Appeals for the Federal Circuit

2009-1170 SRAM CORPORATION (now known as SRAM, LLC), Plaintiff-Appellee,

v. AD-II ENGINEER ING, INC., Defendant-Appellant.

Appeal from the United States District Court for the Nort hern District of Illinois in consolidated cases nos. 00-CV-6675 and 01 -CV-62, Judge Robert W. Gettleman.

__________________________

DECIDED: February 26, 2010

__________________________ Before RADER, BRYSON, and LINN, Circuit Judges

. LINN, Circuit Judge

. In the judicial equivalent of the Tour de France, this bicycle gear shifter patent infringement case returns to us for the third time in what will now be its final stage. Here, AD-II Engineering, Inc. (“AD-II”) appeal s an order of the Unit ed States District Court for the Northern District of Illinois entering summary judgment of liability in favor of SRAM Corporation (“SRAM”) based on the cour t’s finding that claims 16 and 27 of SRAM’s U.S. Patent No. 4,900,291 (the “’ 291 Patent”) were not invalid and were infringed by AD-II. Because we conclude that claims 16 and 27 are anticipated as a matter of law, we reverse

.BACKGROUND A. The ’291 Patent The ’291 Patent relates to bicycle gea r-shifting systems for multi-speed bicycles. These systems generally include a shift actuat or (also known as a “shifter”) that is connected by a control cable to a deraill eur that moves a bicycle chain from one sprocket or chain wheel to another. Bicycle gear-shifting systems suffer from “play” caused by looseness or yi elding of system parts. SRAM Corp. v. AD-II Eng’g, Inc. , 465 F.3d 1351, 1353 (Fed. Cir. 2006) (“SRAM II”). This play (referred to as “cumulative lost motion”) must be eliminated before a ge ar-shifting system can shift gears. Id. A common method of removing cumulative lost moti on is “overshifting,” i.e., first moving a shift actuator “briefly beyond a destination position to take up all of the collective slack in the system and move the drive chain slight ly beyond the destination sprocket” and then “bringing the shift actuator back to its desti nation position and allowing the drive chain to move back into alignment with the destination sprocket.” Id. Overshifting is particularly desirable when “downshifting,” that is, movi ng the bicycle drive chain from a smaller chain wheel or sprocket to a larger chain w heel or sprocket. ’291 Patent col.1 ll.55-57, col.9 ll.12-14, 19-21. Prior art gear-shifting syst ems required the rider to move the shift actuator in the manner described above, which took consi derable skill, as the rider had to determine not only the desired amount of overshift but also the duration of the overshift. Id. col.1 ll.62-66. The ’291 Patent discloses detent-based ro tatable shift actuators that overcome these drawbacks by providing built-in oversh ift. The disclosed shifters eliminate the need for a rider to manually overshift a bicycle chain to remove cumu lative lost motion

2009-1170 2as the optimum amount of overshift is “programmed” into each shifter. Id. col.6 ll.14-20. This feature has been referred to throughout this litigation as “precision indexed downshifting.” SRAM II , 465 F.3d at 1354. Using precision indexed downshifting, a rider “need only move from one index position to the next to effect a positive shift independent of the cumula tive lost motion present in the system.” Id. SRAM asserts that AD-II has infringed claims 16 and 27 of the ’291 Patent. Claim 16 recites a method of shifting and reads as follows:

16. In a bicycle derailleur gear shifting system having a rear derailleur shifting mechanism, a shift actuator rotatably mounted on a bicycle handlebar generally coaxially of the handl ebar, said shift actuator being mounted on and engaged over an outsi de of the handlebar inboard of a fixed handgrip on an end of the handlebar, and control cable means operatively connecting said actuator to said shifting mechanism, a method of performing down-shifting events fr om a relatively smaller origin freewheel sprocket to a relatively larger destination freewheel sprocket, which comprises: first [moving] rotating said shift actuator a sufficient amount to take up substantially all of the cumulative lo st motion in said derailleur mechanism and said cable means; and then [moving] rotating said shift actuator a further amount [to] so as to move the bicycle chain at least subs tantially the distance between the centers of said origin and destination sprockets. ’291 Patent Reexamination Ce rtificate col.4 l.66-col.5 l.17 (issued Apr. 25, 2000) (brackets indicate text deleted through amendm ent; italics indicate text added through amendment). Claim 27, whic h depends from claim 16, adds the limitation “operating said shift actuator to perform a series of indexed downshifts”:

27. A method as set forth in claim 16 further comprising operating said shift actuator to perform a series of indexed downshifts in each of which the chain of the derailleur mechanism is shifted from a relatively smaller

2009-1170 3orgin [sic] freewheel sprocket to a relative ly larger destination freewheel sprocket, said method co mprising for each downsh ift in said series: first rotating the shift actuator a sufficient distance to take up substantially all of the cumulative lost motion in said derailleur mechanism and said cable means; and then rotating said shift actuator a furt her amount so as to move the bicycle chain at least substantially the dist ance between the center s of said orgin [sic] and destination sprockets. Id. col.7 l.3-col.8 l.7. B. Procedural History In SRAM II, we construed claim 16 and c oncluded that neitherstep in that twostep method claim recites “precision indexed downshifting.” Indeed, we observed that claim 16 does not recite indexing at all. We made clear that “[c]laim 16 only recites a method of shifting wherein first, all of the cumulative lost motion is taken up and second, the bicycle chain moves between destination fr eewheel sprockets. All claim 16 requires is a method that takes up lost motion in a bicycle shifting mech anism and then moves the derailleur of that mechani sm from one sprocket to another. Claim 16 does not recite that lost motion is taken up by a manual overshift and backshift motion or by an index shift actuator causing a built -in overshift and precise down shift between defined index positions ( e.g. , by ‘precision indexed downshifting’).” SRAM II , 465 F.3d at 1358. At bottom, we held that “the claim covers no more than the recited method of taking up lost motion and effecting a shift.” Id. at 1359. We then remanded the case to the district
court. Following that remand, AD-II moved for summary judgment of invalidity of claim 16, arguing that U.S. Patent No. 4,260,171 issued to Edwin Foster (the “Foster reference”) and Japanese Unex amined Patent Applicat ion No. 58-191682 (the

2009-1170 4“Japanese reference”) each antici pate the claim. SRAM moved for summary judgment of infringement of claim 27. The district court denied both parties’ moti ons. As for the invalidity of claim 16, the court found that neither the Foster reference nor the Japanese reference addresses taking up cumulative lost motion and that AD- II had failed to show that the problem of taking up cumulative lost motion is inherent to all derailleur systems. SRAM Corp. v. AD-II Eng’g, Inc. , No. 00-CV-6675, slip op. at 1-2 (N.D . Ill. Aug. 2, 2007). The district court also concluded that summary ju dgment of infringement of claim 27 was inappropriate because the parties disputed whether AD-II’s shifters perform indexed downshifts. Id. at 2-3. The district court then ordered the parties to submit additional briefing addressing whether t he court should grant summary judgment of infringement of claim 16 in favor of SRAM. Id. at 3. As part of its briefing, AD-II submitt ed an affidavit from Eric Mu, manager of research and development at AD-II. Mu declared that for a rider to downshift a bicycle using an AD-II shifter, the ridermust first rotate the shifte r to an overshift position and then rotate the shifter back to its normal posi tion. After reviewing this affidavit and the parties’ submissions, the cour t ordered an in-court demonstrat ion of both SRAM’s and AD-II’s shifters. According to the cour t, the demonstration prov ed that a rider can downshift a bicycle by rotati ng an AD-II shifter in only one direction, despite Mu’s affidavit stating the contrary. The district court subsequently ent ered an amended order granting SRAM summary judgment of infringement of claim 16. The district court f ound that “[c]laim 16 indicates in express language that cumulative lost motion must be taken up by rotating

2009-1170 5the shift actuator in one dire ction with the shift being effect ed by further rotation in the same direction.” SRAM Corp. v. AD-II Eng’g, Inc. , No. 00-CV-6675, slip op. at 5 (N.D. Ill. filed June 24, 2008). Be cause the in-court demonstrati on established that a rider could perform the recited method steps by rotating an AD-II shi fter in one direction, the court found that AD-II’s shi fters infringed claim 16. Id. at 4-5. The district court then granted SRAM ’s motion for summary judgment of infringement of claim 27 and denied AD-II’s countermotion for summary judgment of invalidity of claims 16 and 27. SRAM Corp. v. AD-II Eng’g, Inc. , No. 00-CV-6675 (N.D. Ill. Sept. 29, 2008) The cour t entered final summary judgment of liability in favor of SRAM on December 16, 2008, SRAM Corp. v. AD-II Eng’g, Inc. , No. 00-CV-6675 (N.D. Ill. Dec. 16, 2008), and AD-II filed a timely appea l. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (2006). On appeal, AD-II argues that the distri ct court erroneously concluded that the Japanese reference does not anticipate claims 16 and 27. Because we agree that the claims are anticipated by t he Japanese reference, we do not address the other issues raised by AD-II. DISCUSSION A. Standards of Review We review a district court’s gr ant of summary judgment de novo. Revolution Eyewear, Inc. v. Aspex Eyewear, Inc. , 563 F.3d 1358, 1365 (Fed. Cir. 2009). Summary judgment is appropriate when t here is no genuine issue as to any material fact and the moving party is entitled to judgment as a matte r of law. Fed. R. Civ. P. 56(c). When determining whether a gen uine issue of material fact exis ts, we view the evidence in the

2009-1170 6light most favorable to the nonmoving part y and resolve all doubt s in its favor. Eli Lilly & Co. v. Barr Labs., Inc. , 251 F.3d 955, 962-63 (Fed. Cir. 200 1). Although anticipation is a question of fact, we may decide it on summ ary judgment if there is no genuine dispute of material fact. Leggett & Platt, Inc. v. VUTEk, Inc. , 537 F.3d 1349, 1352 (Fed. Cir. 2008). B. Anticipation The Japanese reference relates to gea r-shifting mechanisms for bicycles. As described in an English translati on of the reference, these mechanisms include “a gear ratio switching unit; for example, a unit comp rised of a multi-speed planetary gear . . . a chain shifter for shifting the drive chain to each of these gears . . . [and] an operating apparatus and coupling members for coupling this to the gear ratio switching unit.” J.A. 4571. These gear-shifters “allow the rider to shift the gear ratio by gripping and rotating the operating member during operation.” Id. The reference discloses arranging “the operating member . . . in its standard axial orientation at a location on the mounting unit far from the end of the handleba r axially when the mounting unit is mounted on the end section of the handlebar.” Id. 4572. “As a result, the rider’s hand can grip the handlebar part between the end of the handlebar and the operating mem ber axially.” Id. According to AD-II, SRAM has conceded that the Japanese reference discloses all of the structural details recited in claim 16. AD-II contends that the reference inherently discloses the method limitations, as t he undisputed eviden ce shows that all rotary gear shifters must perform the claimed method to shift gears. AD-II also contends that the Japanese reference discl oses the limitation added by claim 27.

2009-1170 7SRAM disagrees that the Japanese reference anticipates claims 16 and 27. SRAM contends that the Japanese referenc e does not mention the problem of cumulative lost motion, much le ss offer a solution for it. SRAM also contends that ADII’s claim that all rotary gear shifters perfo rm the method steps of claim 16 is belied by AD-II’s argument that AD-II’s sh ifters do not take up cumulati ve lost motion. Regarding claim 27, SRAM argues that AD-II has presented no evi dence to support AD-II’s anticipation contentions. According to SR AM, AD-II relies solely on the unsupported arguments of AD-II’s counsel. As SRAM clarified at oral argument, SRAM also argues that the Japanese reference is not enabling and therefore cannot anticipate the asserted claims. During a reexamination of the ’291 Patent, SRAM submitted to the United States Patent and Trademark Office (“Office”) a declaration from the inventor of the Japanese reference stating that he never made a functional model of the in vention that worked with a derailleur and, to his knowledge, such a de vice was never made. SRAM also claims that during the reexamination it demonstrated to the Office that a model of the device described in the Japanese reference could not perform the method recited in claim 16. SRAM believes that this demonstration and t he inventor’s declaration prove that the Japanese reference is inoperable and therefore not enabling. For a prior art reference to anticipate a patent, it must disclose each and every limitation of the claimed invention. Schering Corp. v. Geneva Pharms., Inc. , 339 F.3d 1373, 1377 (Fed. Cir. 2003). “[A] prior art reference may anticipate without disclosing a feature of the claimed inventi on if that missing characteristic is necessarily present, or inherent, in the single ant icipating reference.” Id. However, a patent claim “cannot be

2009-1170 8anticipated by a prior art refe rence if the allegedly anticipator y disclosures cited as prior art are not enabled.” Elan Pharms., Inc. v. Mayo Fou nd. for Med. Educ. & Research , 346 F.3d 1051, 1054 (Fed. Cir. 2003). “The standard for what constitutes proper enablement of a prior art reference for pur poses of anticipation under section 102, however, differs from the enablem ent standard under section 112.” Rasmusson v. SmithKline Beecham Corp. , 413 F.3d 1318, 1325 (Fed. Cir. 2005). It is well-settled that utility or efficacy need not be demonstrated for a re ference to serve as anticipatory prior art under section 102. See In re Schoenwald , 964 F.2d 1122, 1124 (Fed. Cir. 1992); Bristol-Myers Squibb Co. v. Ben Venue Labs., Inc. , 246 F.3d 1368 (Fed. Cir. 2001). We begin our anticipation an alysis with claim 16. We agree with AD-II that the Japanese reference discloses every limitati on recited in this claim even under the construction of the claim adopted by the distri ct court. SRAM does not dispute that the Japanese reference discloses the structural deta ils recited in claim 16, and there is no genuine issue of material fact that the device disclosed in the Japanese reference must perform the method steps of claim 16 to shi ft gears as described in the reference. Although the district court hel d that claim 16 required rotati on in the same direction to take up cumulative lost motion and effect a shift, that does not provide a basis to distinguish the Japane se reference. SRAM’s expert acknowledged that a shifte r built according to the disclosure of the Japanese reference would “effect a shift.” J.A. 2921. And both parties’ experts stated that a gear shifting system must remove cumulative lo st motion before shifting
gears. See id. 2526.080 (“That’s just shifting 101. That’s how you shift a bike. Unless you perform [the method steps of claim 16], there is no shifting.”); id. 2526.086 (“[I]t

2009-1170 9would be fair to say that lost motion must be first taken up before there is any motion of the derailleur system.”). Alt hough SRAM’s expert declared that “[o]ne of ordinary skill in the art would not find inherent in JP ’682 a so lution to the problem of cumulative lost motion,” id. 3585, he admitted that cumulative lost motion would have been present in the gear shifting device described by the Ja panese reference and that the device would have removed the lost motion: While cumulative lost motion would have been present in any device constructed in accordance with the discl osure of Foster ’171 or JP ’682 and in order for such a device to shi ft gears it would have had to remove the lost motion, there is absolutely no recognition of the problem in either of these references, no attempt to solve the problem, and no suggestion of a method for compensating for cumulative lost motion in either reference. Though prior art shifters such as Fo ster ’171 and JP ’682 may have compensated for cumulative lost moti on, they did so in a clumsy and imprecise way . . . . Id. 2922. SRAM argues that th is statement merely shows that the Japanese reference might shift gears, presumably because SRAM’s expert stated that the Japanese reference “may have compensated for cumula tive lost motion.” However, when considered in context, the st atement is a clear admission th at the device described in the Japanese reference suffered from lost motion and would have necessarily removed any cumulative lost moti on before shifting gears. SRAM’s remaining arguments regarding inherency are equally unpersuasive. It is irrelevant that the Japanese reference may not have recognized the problem of cumulative lost motion or explicit ly suggested a solution for it. See Schering Corp. , 339 F.3d at 1377 (rejecting the cont ention that inherent anticipat ion requires recognition in the prior art). Nor is it relevant that AD -II argued that its shifters do not perform the recited method. What is relevant is that the Japanese reference describes shifting

2009-1170 10gears by rotating a shifter (i.e., the operating member). Here, there is no genuine issue of material fact that the rotation of t he shifter in the Japanese reference necessarily results in the removal of cumulative lost mo tion before a shift is accomplished. Because we previously determined that claim 16 does not recite prec ision indexed downshifting, this is all that is needed to anticipate the claim. We also agree with AD-II that the Japanes e reference discloses each limitation of claim 27. Claim 27 adds the li mitation “operating said shift ac tuator to perform a series of indexed downshifts.” ’291 Pa tent Reexamination Certificate col.7 ll.3-5. Contrary to SRAM’s contentions, AD-II points to specif ic teachings in the Japanese reference to support its anticipation argument. AD-II notes that the Japanese reference discloses an “operating member being adjustabl y rotatable to several specific angles centered on the axis of the mounting unit, these several spec ific angles being correlated with different gear ratios states,” J.A. 4568 (element number s omitted). AD-II also points out that the reference discloses a detent-based “stopping means for regulating the specific angle of the operating member,” id. 4570 (element numbers omitt ed), and explains that the disclosed device performs indexed downshifts because the device is used “to shift the drive chain between several gear s mounted on the drive wheel,” id. 4574. Because SRAM failed to challenge these teachings and because no other genuine issues of material fact have been raised, summary judgment of invalidit y of claim 27 is appropriate. Finally, there is no genuine i ssue of material fact that the Japanese reference is enabling in the sense required to support anticipation under section 102. The declaration provided by the inventor of the Japanese refe rence merely stated that he

2009-1170 112009-1170 12 never created a model of the shifter descr ibed in the referenc e that worked with a derailleur and that he was unaware of anyone who had. The question, however, is not whether the inventor built or could have built an oper ative model of the device, but whether the reference discloses each of the steps of the claimed method. Schering Corp. , 339 F.3d at 1380 (noting that a prior art reference may be enabling “even if [its] author or inventor did not actually make orreduce to practice [the disclosed] subject matter.” (citation omitted)). As noted above, we find no genuine issue of material fact as to the disclosure in the Japanese refer ence of each of the method steps recited in claims 16 and 27. SRAM’s contention that the demonstra tion it conducted during the reexamination procee ding proved that the shifter cannot perform the method of downshifting described in th e claims is both inapposit e and irrelevant. This demonstration simply provides evidence that the model built doe s not perform precise indexed downshifting, which is not recit ed in either claim 16 or claim 27. Because there are no genuine issues of material fact on this record that the Japanese reference discloses each and every limitation of claims 16 and 27 and contains an enabling disclosure in the sense of section 102, we hold as a matter of law that the Japanese reference anticipates claims 16 and 27. In light of our holding, we need not and do not address AD-II’ s remaining arguments. CONCLUSION The district court’s denial of AD-II’s motions for summary judgment of invalidity of claims 16 and 27 based on the Japanese reference is reversed. REVERSED