# United States **Court of Appeals**  **for the Federal Circuit**

______________________ ASETEK DANMARK A/S, Plaintiff

- Appellee

v.

CMI USA INC., FKA CO OLER MASTER USA, INC ., COOLER MASTER CO., LTD., Defendants

- Appellants

______________________

2016

- 1026, 2016

- 1183

______________________ Appeals from the United States District Court for the Northern District of California in No. 3:13

- cv

- 00457

- JST, Judge Jon S. Tigar.

______________________

Dec ided: December 6, 2016

______________________

E RIK R. P UKNYS , Finnegan, Henderson, Farabow, Garrett & Dunner, LLP , Palo Alto, CA, argued for plai ntiff

- appellee. Also represented by R OBERT F. M C C AULEY , J EFFREY D ANIEL S MYTH ; A RPITA B HATTACHARYYA , Boston, MA

.

K

YLE D AKAI C HEN , Cooley LLP, Palo Alto, CA, argued for defendants

- appellants. Defendant

- appellant CMI USA Inc. also represented by R EUBEN H O -Y EN C HEN

.

______________________ASETEK DANMARK A / S v. CMI USA INC

. 2

Before P ROST , Chief Judge, N EWMAN , and T ARANTO , Circuit Judges. Opinion for the court filed by Circuit Judge T ARANTO

. Opinion dissenting in part filed by Chief Judge P ROST

. T ARANTO , Circuit Judge

. In January 2013, Asetek Danmark A/S sued two parties

— Cooler Master USA, Inc.

, which a month later became CM I USA Inc. ; and Cooler Master Co., Ltd.

, a Taiwanese company

— in the Northern District of Califo rnia, asserting infringement of two of Asetek’s patents, U.S. Patent Nos. 8,240,362 and 8,245,764

. All of the accused products are branded “Cooler Master.” A few months b efor e trial, by stipulation, Asetek dismissed with prejudice its claims against the Taiwanese company (hereafter “Cooler Master”)

. Asetek’s claims of infring ement by CMI USA (hereafter “ CMI ”) , and CMI’s invalidity counterclaims, were tried partly to a jury and part l y to the court. Asetek prevailed and received a judgment of infringement, and of no invalidity, plus a damages award against CMI of $404,941

, based on a 14.5% royalty rate

. The district court also entered an injunction covering the specific “Cooler Master” products found to infringe . Th e injunction runs not only against CMI but also against Cooler Master

— which was not then a party (though it later intervened and became one) and which was not adjudicated liable for infringement.

We affirm the district court’s rulings on infringement, invalidity

, and damages

. W e remand as to part of the injunction

, i.e. , insofar as the injunction reach es conduct by Cooler Master (regarding the covered products) that goes beyond abetting a new violat ion by CMI

. The go verning standards for reaching such conduct by persons not adjudicated liable for the underlying wrong, reflected in Fed eral R ule of Civ il P rocedure 65(d), are highly fact

specific. In this case, a deter min ation of the propriety ofASETEK DANMARK A / S v. CMI USA INC

. 3

the injuncti on ’s reach would benefit from further findings and, if sought and ne eded , further record develop ment

. I

The ’362 and ’764 patents describe and claim systems and methods for cooling the “central processing unit (CPU) or other processing unit of a computer system ” using cooling liquid

. ’362 patent, col. 1, lines 12

– 14; ’764 patent, col. 1, lines 11

– 13. According to the patents, which have similar specifications, liquid

- cooling systems in the prior art consisted of “many components,” which were “co upled togeth er, ” increasing “total installation time” and causing “leakage.” ’362 patent col. 1, lines 34

– 49; ’764 patent, col. 1, lines 32

– 37. By contrast, the ’362 and ’764 patents describe systems that combine multiple components— a “ heat

- exchanging in terface,” a “ reservoir ,” and a “ pump ”—i nto a single “integrate element .” ’ 362 patent, col. 2 , line s 9

– 11 ; ’ 764 patent, col. 2 lines 5– 6. As recited in the asserted claims , the “reservoir” includes two “vertically ” separated chambers, referred to as the “upper chamber” and “lower chamber ,” ’362 patent, col. 18, lines 56

– 65, or “pump chamber” and “thermal exchange cha mber,” ’764 patent, col. 27, lines 49

– 57. Claim 1 of the ’764 patent is representative:

1. A cooling system for a heat

- generating component, comprising:

a double

- sided chassis adapted to mount a pump configured to circulate a cooling liquid, the pump comprising a stator and an impeller, the impeller being positioned on the underside of the chassis and the stator be ing positioned on the upper side of the chassis and isolated from the cooling liquid;
a reservoir adapted to pass the cooling liquid therethrough, the reservoir including :ASETEK DANMARK A / S v. CMI USA INC

. 4

a pump chamber including the impe ller and formed below the chassis, the pump chamber being defined by at least an impeller cover having one or more pa ssages for the cooling liquid to pass through; a thermal exchange chamber formed below the pump chamber and vertically spaced apart from the pump chamber, the pump chamber and the thermal ex change chamber being separate chambers that are fluidly coupled together by the one or more passages; and

a heat

- exchanging interface, the heat

exchanging interface forming a boundary wall of the thermal exchange chamber, and configured to be placed in the rmal contact with a surface of the heat

generating component; and a heat radiator fluidly coupled to the reservoir and configured to dissipate heat from the cooling liquid.
’764 patent, col. 27, lines 39

– 65. The asserted claims of the ’362 patent are similar, but additionally require the “heat

- exchanging interface” to be “removably attached” or “removably coupled” to the “reservoir.” ’362 patent, col. 20, lines 3– 6; id. col. 20, lines 40

– 44.

“ Cooler Master is a Taiwanese supplier of computer components, including cooling devices for heat generating components” of computers. Appellants’ Br. 24. Its pro ducts include the “Cooler Master”

- branded Seidon 120M, Seidon 120XL, Seidon 240M, Sei don 120V, Seidon 120V Plus, Glacer 240L, Nep ton 140XL, and Nepton 280L liquid -cooling products at issue in this case

. CMI is a U.S. company that

— as reflected in its name (“Cooler MasterASETEK DANMARK A / S v. CMI USA INC

. 5

USA, Inc.”) until February 2013, a month after this suit began

, ECF No s . 60 , 61 (May 2014 change of caption)

—
c ollaborates with Cooler Maste r in designing and selling

“ Cooler Master ”- branded products in the United States. J.A. 3562

– 63. CMI also “assists” Cooler Master “in se tting the manufacturer’s suggested retail price of the accused products sold in the United States.” J.A. 3563. The ev idence, seemingly undisputed

, is that , by oral agreement, C MI was C ooler Master ’s exclusive U.S. distributor of Cooler Master products

. J.A. 7848

– 49; Transcript of Proceedings at 1069, 1106

– 07, Asetek Da nmark A/S v. CMI USA, Inc.

, 00457

- JST (N.D. Cal. Dec. 10, 2014), ECF No. 243

. Between 2012 and 2013, CMI began selling specified Seidon, Glacer, and Nepton models of “Cooler Master ”- branded products in the United States.

In its Ja nuary 2013 suit against CMI and Cooler Ma ster , Asetek asserted that they w ere infringing claims 14

– 15 and 17

– 19 of the ’362 patent and claims 1

– 15 and 17

– 18 of the ’764 patent by selling, offering to sell, and i mporting the Seid on, Glacer, and Nepton products

. 1 Di scovery proceeded, and infringement and invalidity contentions were filed. By September 5, 2014, the litig ation was far enough along that CMI moved for summary judgment of invalidity. Cooler Master did not join that motion , however, because, the day before, it and Asetek stipulated to Cooler Master’s dismissal with prejudice

— a

1 Asetek’s complaint did not identify the Seidon 120V Plus, and the jury did not specifically find that the ’362 and ’764 patents covered that product. But the district court’s injunction identified the Seidon 120V Plus as an infringing devi ce because Asetek and CMI stipula ted that it has the same pump head design as the Seidon 120V, which was specifically considered by the jury. On appeal, neither CMI nor Cooler Master challenges the inclusion of the Seidon 120V Plus in the injunction.ASETEK DANMARK A / S v. CMI USA INC

. 6

dismissal entered on September 5, 2014

. Asetek agreed to that dismissal after CMI and Cooler Master witnesses testified

, in discovery , to Cooler Master’s exclusive

distribution arrangement with CMI for the accused pro ducts in the United States

. The case went to trial a few months later, i n Dece mber 2014 . A t trial, CMI argued that the ’362 patent was not infringed , that the ’764 patent was anticipated by U.S. Patent No. 7,544,049 (Koga), and that the ’362 and ’764 patents were obvious over Koga and Korean Utility Model No. 20

- 0314041 (Ryu)

. The district court granted Asetek’s motion for judgment as a matter of law that Koga did not anticipate claim 4 of the ’764 patent

, and the jury r eturned a verdict for Asetek on the remaining issues

. The jury found that CMI infringed , directly and contributorily, the asserted claims of the ’362 patent and rejected CMI ’s Koga- based anticipation challenge to the remaining claims of the ’764 patent. Additionally, t he jury made specific findings

, related to obviousness , about the level of ordinary skill in the relevant art, the sc ope and content of the prior art, differences between the prior art and the invention s claimed by the ’362 and ’764 patents , and objective indicia of non -obviousness . For example , the jury found that the claimed liquid

- cooling systems differ from the prior art because they combine a “pump” and a “reservoir” “into a single unit” and because the “reservoir” i s a “single receptacle that i s divided into an upper cha mber and a lower ch amber.” The jury also found six obje ctive indicia of non -obviousness. The jury found Asetek entitled to a 14.5% reasonable

- royalty rate and awarded $404,941 in damages. In April 2015, the district court entered its findings of fact and conclusions of law on various matters the parties had reserved to it

. Asetek Danmark A/S v. CMI USA, Inc. , 100 F. Supp. 3d 871 (N.D. Cal. 2015)

. The court concluded that CMI failed to prove that the ’362 and ’764 patents were invalid for obviousness, lack of writtenASETEK DANMARK A / S v. CMI USA INC

. 7

descr iption, or indefiniteness

. In September 2015, the district court denied CMI’s motions for judgment as a matter of law or a new trial on infringement and damages as well as for a new trial on obviousness. Asetek Da nmark A/S v. CMI USA, Inc.

, No. 3: 13

- cv -0 0457 -JST

, 2015 WL 5568360, at * 3– 12 (N.D. Cal. Sept. 22, 2015)

. At the same time, the district court granted Asetek’s motion for an injunction against both CMI and Cooler Master , the latter not then a party

. Id. at *12– 21. After identifying the “Infringing Products” covered (specified Seiden, Nepton, and Glacer models), the injunction states : (2) CMI USA, Inc. and its subsidiaries and affil iated companies (collectively defined as “C MI” )

, as well as CMI’s successors, assigns , officers, dire ctors, agents, servants, employees, representatives and attorneys, and those persons in active concert

or participation with them who receive notice of the order are hereby immediately and permanen tly restrained and enjoined, pursuant to 35 U.S.C. § 283 and Fed. R. Civ. P. 65(d), from making, u sing, offering for sale or selling in the United S tates, or importing into the United States, or causing to be made, used, offered for sale, or sold in the United States, or imported into the United St ates, the Infringing Products. (3) Cooler Master Co., Ltd. and its subsidiaries and affiliated companies (collectively defined as “Cooler Master”), as well as Cooler Master’s su ccessors, assigns, officers, directors, agents, ser vants, employees, representatives and attorneys, and those persons in active concert or particip ation with them who receive notice of the order are hereby immediately and permanently restrained and enjoined, pursuant to 35 U.S.C. § 283 and Fed. R. Civ. P. 65(d), from making, using, o ffering for sale or selling in the United States, or impor t-ASETEK DANMARK A / S v. CMI USA INC

. 8

ing into the United States, or causing to be made, used, offered for sale, or sold in the United States, or imported into the United States, the Infringing Products. (4) Within 14 days of issuance of this order, CMI and Cooler Master shall provide written notice of this judgment and order, and the injunction o rdered herein, to: their officers, directors, agents, servants, representatives, attorneys, employees, subsidiaries and affiliates, and those persons in active concert or participation with them. CMI and Cooler Master shall take whatever means are necessary or appropriate to ensure that this order is properly complied with. (5) CMI and Cooler Master shall include a copy of this Order and the written notice in paragraph (6) below [stating that the product is affected by a permanent injunction, infringes the ’362 and ’764 patents, and “may not be sold, offered for sale,” “used,” or “imported into the United States”] along with every bill of sale for the Infringing Products and in the boxes in which the Infringing Products are shipped or sold, regardless of where they are sold, indicating that they infringe the patents

- in

suit, are subject to an injunction in the United States, and thus cannot be s old, offered for sale, imported, or used in the United States.

Id. at *20

. The injunction lasts until the ’362 and ’764 patents expire, except that either party may seek modification if either patent is finally adjudged invalid in a nother proceeding. Id. at *21

. In January 2016 , Cooler Master appealed the injun ction , paragraphs (3)

– (5) of which impose obligations on it. Cooler Master then intervened

, becoming a party a gain

, even though in similar circumstances non

- parties have been permitted to appeal. See

, e.g. , Class Plaintiffs v. CityASETEK DANMARK A / S v. CMI USA INC

. 9

of Seattle , 9 5 5 F.2d 1268, 1277 (9th Cir. 1992) ( “ a non

party who is enjoined or otherwise directly aggrieved by a judgment has standing to appeal the judgment without having intervened in the district court”). The dist rict
court subsequently denied Cooler Master’s motion to stay the injunction

. CMI and Cooler Master appeal . CMI and Cooler Ma ster present challenges to the district court’s post

- trial rulings on infringement and obviousness and to the injunction

. CMI also presents challenges to the district court’s post

- trial rulings on dam ages. We have juris diction under 28 U.S.C. § 1295(a)(1).

II

We review a denial of a motion for judgment of a ma tter of law de novo and must affirm unless “ the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion, and that

con clusion is contrary to the jury’ s verdict .” Pavao v. Pagay , 3 07 F.3d 915, 918 (9th Cir. 2002). We review a denial of a motion for new trial for abuse of discretion. Incalza v. Fendi N. Am., Inc. , 479 F.3d 1005, 1013 (9th Cir. 2007)

. We review a grant of a permanent injunction for an abuse of discre tion , with underlying legal concl usions reviewed de novo

. S.E .C. v. Goldfield Deep Mines Co. of Nev. , 758 F.2d 459

, 465 (9th Cir. 1985).

A Appellants argu e that the jury was required to find the ’362 patent not infringed as a matter of law

. Specifically, they contend that the alleged “heat exchanging interfaces” in the accused products are not “removably attached” or “removably coupled” to “reservoirs ,” as the asserted claims require. The reason, appellants say, is that removing the “heat exchanging interfaces” in the accused product s would “damage the products or othe rwise render them nonfunc tional. ” Appellants’ Br. 37

.ASETEK DANMARK A / S v. CMI USA INC

. 10

We reject appellants’ non

- infringement argument. “[W] here the parties and the district court elect to provide the jury only with the claim language itself, and do n ot provide an interpretation of the language in the light of the specification and the prosecution history,” the jury’s findings “ must be tested by the charge actually given and by giving the ordinary meaning of the language of the jury instruction ,” and t he only question is one of substa ntial evidence. Hewlett

- Packard Co. v. Mustek Sys., Inc.

, 340 F.3d 1314 , 13 2 1 (Fed. Cir. 2003)

. That rule applies here, because the parties did not request a construction of the claim terms “removably attached” or “ removably coupled

, ” and they did not object to the district court’s jury instructions

. Applying the ordinary meaning, then, we conclude th at substantial evidence supports th e fin ding of infringement

. The jury was entitled to find that the “heat exchan ging interfaces” in the accused products were “removably attached” or “removably cou pled .” Asetek’s expert, Dr. Tilton, narrated videos about the Seidon 120M, Seidon 120V, Glacer 240L, and Nepton 140XL products and testified that the “ heat exchanging interfa ces” in those products could be removed by unscrewing the triangle

head safety screws that secured them. Dr. Tilton e xplained that he had removed the screws in each of the accused devices using commercially available screwdri vers

. CMI’s expert, Dr. Carma n, agreed that the “heat exchanging interfaces” could be removed, but testified that they were not “removably attached” or “removably coupled” because the screws were not intended to be removed. The jury could reasonably reject Dr. Carman’s opinion about wh ether unscrewing was intended, or his opinion about whether unscrewing was needed to meet the “removably attached” or “removably coupled” r equirements, or both.
Likewise, the jury could reasonably find the requir ements met even though removing the “heat exchangingASETEK DANMARK A / S v. CMI USA INC

. 11

interfaces” from the accused products would cause coolant to leak . T here is nothing unreasonable about finding a component “removably attached” if it can be detached in such a way that the device would function again if the

c omponent were reattached. And contrary to appellants’ contention, the patent specification here does not require functionality upon detachment with no further steps: the cited passage describes an embodiment in which, if the “heat exchanging interface” i s “ excluded ” from the embo diment , “sealing” must be provided to prevent “cooling liquid” from “leaking” from the “reservoir.” ’362 patent, col. 8, lines 66

– 67, and col. 9, lines 13

– 19. Dorel Juvenile Group, Inc. v. Graco Children’s Pro ducts , Inc. , 429 F.3d 1043 (Fed. Cir. 2005), which interpre ted superficially similar claim terms, does not establish

non

- infringement here

. In Dorel

, which involved a patent on a child’s car seat, the asserted claims recited a “base,” which was “removably attached” and “ removably secured”
to a “seat .” Id. at 1044

– 45. We upheld a claim constru ction, relying on the specification for context, that “remo vably attached” in that case implied that the “seat” and “base” were “ affixed together in a manner that conte mplates that the seat may be removed from the base such that the seat remains functional .” Id

. at 1045. The present case involves no claim construction, but instead claim application, and the context is quite differ ent
, e.g. , there is no requirement here that each component was meant to function separately (unlike the seat in Dorel).

B Appellants argu e that the subject matter of the a sserted claims of the ’764 patent would have been obvious over Koga and Ryu

. Specifically, they argue that , as a matter of law, Koga’s “sucking channel” is a “thermal exchange chamber” (a requirement of all asserted claims of the ’764 patent) because the “sucking channel” “e xchanges some heat .” Appellants’ Br. 45. The districtASETEK DANMARK A / S v. CMI USA INC

. 12

court found that Koga did not teach this claim elemen t, a factual component of the obviousness analysis

. Asetek

, 100 F. Supp. 3d at 886

– 88. That finding is not clear error

. Specifically, t he fact t hat Koga’s “sucking channel” e xchanges some heat

, no matter how minimal and inevit able, does not entail that it is properly considered a “ther mal e xchange chamber .” 2 No ordinary meaning or claim construction requires appellants’ conclusion that Koga’s “sucking channel” is a “thermal exchange chamber” simply because it exchanges some heat. No meaning of the claim phrase precludes its limitation only to devices with certain device

- defining characteristics such as purpose and principal use, exclu ding other structures that occasionally or in minor ways produce the same result

— any more than a bedside plug

in radio mus t be considered a room radiator because it unavoida bly gives off some heat

. As the district court noted, accepting appellants’ conclusion courts draining any meaning from “thermal exchange” in the “thermal exchange chamber” phrase. Asetek , 2015 WL 5568360, at *10. Under appellants’ theory, any chamber would seem to count as a “thermal exchange chamber” because, as Dr. Tilton testified, “[h]eat transfer will always happen between any two bodies that are at .

. . different temper atures.” Transcript of Proceedings at 1558, Asetek Da nmark A/S v. CMI USA, Inc. , No. 3:13

- cv

- 00457

- JST (N.D. Cal. Dec. 16, 2014) (“Dec. 16 Tr.”) , ECF No. 215

. That

2 Asetek argues that a substantial

- evidence stan dard applies, because the jury implicitly found that Koga’s “sucking chamber” was not a “thermal exchange chamber” in rejecting anticipation. We need not scrutinize the jury verdict or otherwise address that c ontention. Any diffe rence between “clear error” and “substantial evidence” makes no difference to our conclusion about Koga and the claim element at issue.ASETEK DANMARK A / S v. CMI USA INC

. 13

would appear true even for an insulated chamber , because imperfections in the insulation would result in some heat transfer. It was proper to reject appellants’ theory.
Moreover, s ufficient evidence support s the district court’s finding that a person of ordinary skill in the art would not consider Koga’s “sucking channel” to be a “thermal exchange chamber .” Dr. Tilton testified that the purpose of Koga’s “ sucking channel ” was to deliver fluid to Koga’s “pump room,” not to transfer heat ; that any heat transferred by the “sucking channel” would be incons equential because of its small surface area and the high rate of flow through it ; and that Koga positively teaches away from placing the “sucking channel” on top of, and in thermal contact with, Koga’s “heat generating comp onent, ” as the ’764 patent requires. Transcript of Procee dings at 1417

– 18, Asetek

, 3 :13 -cv- 00457

- JST (N.D. Cal. Dec. 15, 2014), ECF No. 21 3

. Dr. Carman, CMI’s expert, testified that heat exchange was not the purpose of Koga’s

“ sucking channel .” Dec. 16 Tr

. at 1645

. On the evidence, the district court could reasonably find that Koga’s “suc ki ng channel” was not a “thermal exchange chamber.”

This is a claim

- specific finding about what characterize s some devices as a “thermal exchange chamber” and Koga’s “sucking channel” not having those characteristics. As a result, appellants are wrong in suggesting that the finding is contrary to various precedents. Those prec edents all involve situations where a reference or device does come within a claim term

. See Abbott Labs

. v. Sandoz, Inc.

, 566 F.3d 1282, 1299 (Fed. Cir. 2009) (where a claim term covers an accused product or process, there is infringement even if de minimis); Embrex

, Inc. v. Se rvice Eng ’g Corp. , 216 F.3d 1343, 1349 (Fed. Cir. 2000) (same) ; Verdegaal Bros., Inc. v. Union Oil Co. of Cal. , 814 F.2d 628, 630, 632 (Fed. Cir. 1987) (claim element of

“ making a concentrated liquid fertilizer by reacting sulfuric acid and urea ” taught by reference requiring theASETEK DANMARK A / S v. CMI USA INC

. 14

sulfuric acid to be “ added slowly ”)

. That is enough to distinguish those precedents from this case.

C We also reject CMI’s challenge to the damages award

. CMI argues that , in calculating the 14.5% royalty award, Asetek’s damages expert, Dr. Mody, improperly relied on Asetek’s per

- unit profit margin under its licensing agre ement with another company, Corsair. According to CMI, Dr. Mody’s approach circumvented the requirement

, applicable when lost

- profits damages are sought, that a patent owner prove that it would have made the infrin ger’s sales “but for” the infringement

— a requirement not applicable to reasonable

- royalty damages

. See BIC Le isure Prods., Inc. v. Windsurfing Int’ l, Inc.

, 1 F.3d 1214, 1218 (Fed. Cir. 1993) ; Panduit Corp. v. Stahlin Bros. Fibre Works, Inc. , 575 F.2d 1152, 1156 (6th Cir. 1978)

. Additionally, CMI argues that the royalty award is not supported by substantial evidence because the AsetekCorsair license included a maximum royalty rate of 7%. We reject both arguments. 35 U.S.C. § 284 guarantees to a patent holder damages “adequate to compensate for the infringement, but in no event less than a reasonable royalty.” A patent owner
, having prevailed on liability, may receive a reasonable royalty or lost profits, but not both for the same infringing units

. See SmithKline Diagnostics, Inc. v. Helena Labs. Corp. , 926 F.2d 1161, 1164 (Fed. Cir. 1991). There is no dispute here about the propriety of using t he common hypothetical

- negotiation approach to calculating a re asonable royalty , under which the finder of fact “ attempts to ascertain the royalty upon which the parties would have agreed had they successfully negotiated an agre ement just before infringement began .” Lucent Techs., Inc. v. Gateway, Inc. , 580 F.3d 1301, 1324 (Fed. Cir. 2009). The amount of damages presents a fact question, r eviewed for substantial evidence in a jury

- tried case , andASETEK DANMARK A / S v. CMI USA INC

. 15

the underlyi ng methodology is reviewed for an abuse of discretion , including consistency with governing legal principles

. See Aqua Shield v. Inter Pool Cover Team

, 774 F.3d 766, 770 (Fed. Cir. 2014); Micro Chem., Inc. v. Le xtron, Inc. , 317 F.3d 1387, 1394 (Fed. Cir. 2003).

To the extent that Dr. Mody ’s analysis referred to Asetek’s per

- unit profit on its cooling units, CMI’s legal objection lacks merit. As we have recognized

, a patent

owner participating in a hypothetical negotiation would consider the profits on sales it might lose as a result of granting a license

. Rite

- Hite Corp. v. Kelley Co.

, 56 F.3d 1538 , 1554

– 55 (Fed. Cir. 1995) (en banc)

. 3 The fact that a royalty calculation relies in part on the patent owner’s

per

- unit profits does “not make i t an unreasonable award.” Id. at 1555. We have explained that a patent owner would be “ unlikely ” to be “interested in” accept ing a royalty rate lower than its profit margin on the patented products. See Mitutoyo Corp. v. Cent. Purchasing, LLC

, 499 F.3d 1284 , 1292 (Fed. Cir. 2007) ( stating that the patent owner would be “unlikely [ to ] have been interested in less than a 29.2% [reasonable

- royalty] rate,” equal to the patent owner’s profit margin). Negotiating for a per

unit payment equal to its per

- unit profit can be a logical approach for a patent owner that is uncertain of how
many sales might be lost by granting the license at issue

or is just using its own experience to place a value on the right to use the technology at issue

.

3 We have also explained that a patent owner in a hypothetical negotiation would rationally consider not only its own potential losses from licensing but those of parent, sister, or similarly related companies. See Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co.

, 425 F.3d 1366, 1378 (Fed. Cir. 2005), overruled on another issue

, Cardiac Pacemakers, Inc. v. St. Jude Med., Inc. , 576 F.3d 1348 (Fed. Cir. 2009) (en banc in part).ASETEK DANMARK A / S v. CMI USA INC

. 16

In its Reply Brief, CM I acknowledges “that profits may be considered as a factor in the reasonable royalty calc ulation,” but it argues error in the damages verdict on the ground that this factor “predominated and virtually subsumed Asetek’s entire damages case.” Reply Br. 24. But CMI identifies no legal principle about predominance that would somehow bar a damages analysis that t akes reasonable account of all the evidence relevant to the hypothetical negotiation

— as Dr. Mody’s analysis did. As Dr. Mody testified, she adjusted her hypothetical

negotiation model to account for numerous considerations other than Asetek’s per

- unit profits, including “the nature and the scope of the license” at issue

, Transcript of Pr oceedings at 866, Asetek , No. 3:13

- cv

- 00457

- JST (N.D. Cal. Dec. 9, 2014) (“ Dec. 9 Tr

. ”) , ECF No. 242 ; see id. at 855
, Asetek’s “established policy and marketing program ,” id. at 867
, the “commercial relationship” between Asetek and CMI

, id. at 855
, and the extent to which CMI’s profits under the license would “be attributable to the patented invention ,” id

. CMI has not shown that the resulting damages verdict rests on a legally improper methodology.

Nor has CMI shown , as it suggests, that the use o f Asetek’s per

- unit profit in the royalty analysis makes lost

profits damages no longer worth pursuing by patent owners. There are obvious reasons for some patent ow ners to pursue lost profits. In some circumstances, e.g. , where the patent owner is a str ong economic monopolist, proof of lost sales caused by the infringement and the profits on those lost sales (as well as loss of profits from sales made at prices lowered by the infringement) may be less uncertain than proof of a reasonable royalty under th e standards applicable to the latter. And a lost

- profit award can be higher. A hypothetical

- negotiation analysis for a royalty considers not only the patent owner’s inte rests , but also the other side of the negotiation table under the particular conditions of the hypothetical negotiation. See Aqua Shield , 774 F.3d at 770

– 72 & n.1. A lost

- profitsASETEK DANMARK A / S v. CMI USA INC

. 17

analysis is different , because a s a general matter, the patent owner is entitled to be made whole , upon proper proof, for its los s of profits caused by the infringement

, without discount ing for the rational interests limiting willingness to pay on the infringer’s side

. Not surprisin gly, a leading commentary observes that “[l]ost profits damages frequently bring the patent owner much more than royalty awards” and are sought “in nearly every case in which the patent owner manufactures or sells som ething that could reasonably be interpreted as competing with an infringer’s product.” John Skenyon , Christopher Marchese & John Land, Patent Damages Law and Pra ctice § 2:1
, at 64 (2015 ed.) (footnote omitted)

. Finally, substantial evidence supports the jury’s fin ding that a hypothetical negotiation between Asetek and CMI would have resulted in a 14.5% reasonable royalty
rate , even though one portion of the Corsair license i ncluded a maximum royalty rate of 7%

. First, as Dr. Mody testified, the Corsair license included an effective royalty rate of between 10% and 19% based on two components: (1) the actual royalty rate of between 2% and 7 % and (2) the minimum

- purchase requirement. Using th at range, Dr. Mody concluded that Asetek and CMI would have agreed to a royalty rate of about 16%. Second, Dr. Mody testified that Asetek would have sought a higher royalty
rate from CMI than from Corsa ir because Asetek would have treated CMI as a “competitor,” rather than a valued “customer” (like Corsair). See Dec. 9 Tr

. at 855
, 858, 868

– 71

. Although CMI’s general manager

, Mr. Chen, testified that Asetek was willing to license its pr oducts to CMI and Cooler Master

, that assumption, even if credited, hardly means that Asetek would have treated them the same as Corsair. We conclude that the jury’s adoption of a 14.5% royalty rate must be affirmed.ASETEK DANMARK A / S v. CMI USA INC

. 18

D

Cooler Master and CMI together challenge the injun ction on two grounds. See Appellants’ Br. 6 (injunction challenge presented for both appellants ). First, they argue that Cooler Master’s September 2014 dismissal from the case with prejudice precluded the district court from subjecting Cooler Master to th e injunction ’s oblig ations. Second, they argue that the i njunction is too broad in scope insofar as the injunction reaches Cooler Master’s conduct ( sale, importation, etc., involving the identified “Cooler Master ”- brand ed products ) other than conduct that abets a new violation by CMI, the only party adjud icated liable for infringement.
The latter argument invokes the standards that define the limited circumstances in which injunctive oblig ations may be imposed on persons who have not been adjudicated liabl e for the wrong for which the injunction is a remedy

. It is worth noting the limited scope of the argument appellants have made on appeal in this r egard

— which do es not include arguments that, in certain circumstances in other cases, persons not held liable have made and may make against being subject ed to injunctive obligations. Thus, appellants do not argue that the di strict court lacked personal jurisdiction over Cooler Ma ster

. They do not argue that Cooler Master lacked notice

or an oppo r tunity to be heard on the issues related to the injunction . N or do they argue that the injunction is improper under eBay Inc. v. MercExchange, L .L.C. , 547 U.S. 3 88 (2006) , or because Cooler Master does not sufficiently threaten to engage in the covered c onduct

. In addition, a ppellants do not argue that naming Cooler Master in the injunction is independently improper , but only that the challenged obligations imposed on Cooler Master here a re improper for reasons it could invoke if they were imposed through contempt. See Aevoe Corp. v. AE Tech Co., Ltd. , 727 F.3d 1375, 1383

– 84 (Fed. Cir. 2013) ( because S&F Defendants were privies of the orig i-ASETEK DANMARK A / S v. CMI USA INC

. 19

nally enjoined party AE Tech, and not acting ind ependently, naming them in modification of injunction merely m ade explicit what was already implicit). More over, i n challenging certain injunctive coverage of Cooler Master

, appellants do not separately challenge the la nguage reaching the “successors, assigns ,” etc. of Cooler Master if Cooler Master itself is properly covered

. And appellants do not dispute that Cooler Master is properly subject to injunctive obligations to avoid actions that would abet a new violation by CMI. See Reply Br. 26.

We address appellants’ two appellate arguments in
turn. The first argument , based on the agreed- to dismi ssal of Cooler Master shortly before trial, we reject. The second, narrow er argum ent we think warrants a remand for further proceedings

, given the fact

- specificity of the relevant standards in this delicate area

. 1 Ap pellants contend that, even if an injunction against Cooler Master would be proper had no claim ever been filed against it in this case, it cannot be enjoined because it was initially a defendant and the claims against it were dismissed with prejudice

. Ap pellants rest that contention on the premise that dismissal is an adjudication that has claim

- preclusive effect. But, while t h e premise is correct, the inference appellants urge

— that claim preclusion bars relief as to future conduct

— is not. Appellants’ ar gument assumes that the “claim” co vered by the dismissal, which concerned Cooler Master’s

pre

- dismissal conduct, is the same as a “claim” covering conduct subject to the injunction, which is Cooler Master’s future conduct

— not just post

- dismissal , but post

- trial and post

- injunction

- issuance

. It is well established, however, that the difference in timing means that the two situ ations do not involve the same “claim” for claim

- preclusion
purposes , even if all the conduct is alleged to be unlawful for the same reason. See Dow Chems. Corp. v. N OVAASETEK DANMARK A / S v. CMI USA INC

. 20

Chems. Corp. (Can.) , 803 F.3d 620, 626

– 27 (Fed. Cir. 2015); Aspex Eyewear, Inc. v. Marchon Eyewear, Inc. , 672 F.3d 1335, 1343 (Fed. Cir. 2012) ; 18 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 4409 (2d ed. 2002)

. As we have e xplained, “ a party who sues a tortfeasor is ordinarily not barred by a prior judgment from seeking relief for discrete tortious action by the same tortfeasor that occurs subs equent to the original a ction .” Aspex Eyewear , 672 F.3d at 134 2

. Th e rationale is simple: claim preclusion “ requires a party to assert all claims that the party could have asserted in the earlier lawsuit ”; and a party cannot assert claims based on “ tortious con duct” that “ had not occurred at that time

— those claims could not have been asserted and therefore are not barred

. ” Id. Appellants cite nothing to the contrary. The cited d ecisions establish only that a stipulated dismissal “genera lly constitutes a final judgment on the merits” that “precludes a party from reasserting the same c laims ” or “same cause,” Headwaters Inc. v. U.S. Forest Service , 399 F .3d 1047, 1051−52 (9th Cir. 2005); In re Marino , 181 F.3d 1142, 1144 (9th Cir. 1999), or from challenging “ acts [that] fell with in the scope of the pleadings” of the di smissed action, Esquire, Inc. v. Varga Enters., Inc.

, 185 F.2d 14, 17 ( 7 th Cir. 19 50). Th ey do not address future conduct like that covered by the injunction at issue here.

2 The fundamental principle relevant to appellants’ narrower, scope objection to the injunction here is that an injunction may not “make punishable the conduct of persons who act independently and whose rights have not been adjudged according to law.” Regal Knitwear Co. v. NLRB , 324 U.S. 9, 13 (1945) (citing Chase Nat’l Bank v. City of Norwalk , 291 U.S. 431, 436

– 37 (19 34 ) , and other decisions ). But as that formulation suggests, an injun ction may reach certain conduct by persons not held liableASETEK DANMARK A / S v. CMI USA INC

. 21

for the underlying wrong where the conduct is not u ndertaken “independent ly ” of the persons who have been held liable. Federal Rule of Civil Procedure 65(d) reflects the standards when it declares that an injunction “binds only” “the parties,” “the parties’ officers, agents, servants, employees, and attorneys,” and “other persons who are in active concert or participation” with them “who receive actual notice of [the injunction] by personal service or other wise.”
In this case, the injunction imposes two sorts of obl igations on Cooler Master

— it restricts conduct by Cooler Master that abets a new violation by CMI; and it also restricts conduct by Cooler Master that does not abet a new violation by CMI. Putting aside the dismissal

- based contention, which we have rejected, appellants object here only to the latter obligations. Those are found exp licit ly in paragraphs 3 , 4, and 5 of the injunction. And they are found implicitly in p aragraph 2 , because

, under well

established law

, that paragraph’s “active concert or pa rticipation ” coverage includes some conduct not abetting a new violation by the liable person

— such as might occur

, under certain circumstances, if a liable person (like CMI here) turned over the wrongful operations to another

person or even simply ceased operating or existing alt ogether , to be succ eeded by another

. As the parties made clear at oral argument, there is a current live dispute about the permissibility of barring Cooler Master from engaging in U.S.

- focused activities involving the infrin ging products other than through CMI , and that substa ntive dispute arises under paragraph 2 as well as paragraphs 3, 4, and 5

. Different terminology has been used for the two cat egories of enjoinable conduct by persons not held liable. Judge Learned Hand wrote, for the Second Circuit, that the non

- liabl e party “ must either abet the [liable party]

, or must be legally identified with him. ” Alemite Mfg

. Corp. v. Staff , 42 F.2d 832, 833 (2d Cir. 1930)

, quoted inASETEK DANMARK A / S v. CMI USA INC

. 22

Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc. , 96 F.3d 1390, 1395 (Fed. Cir. 1996) ( Additive Co ntrols I )

. Sometimes “privity” is used for the “legally identified” category, which covers a number of bases for binding a non

- liable person to obligations imposed on a liable person ; but whatever the labels, both categories are well est ablished in the law and recognized as within the “active concert or participation” standard of Rule 65(d)

. See Golden State Bottling Co. v. NLRB , 414 U.S. 168, 179

– 80 (1973) ; Regal Knitwear , 324 U.S. at 13

– 14 ; Merial Ltd. v. Cipla Ltd. , 681 F.3d 1283, 130 4– 05 (Fed. Cir. 2012); Aevoe , 727 F.3d at 1384 (“‘Active concert or partic ipation’ has been interpreted to include both aiders and abettors of, and privies of, an enjoined party.”); Additive Controls I , 96 F.3d at 1394

– 95 , 1397 ; Rockwell Graphic Sys., Inc. v. DEV Indus., Inc. , 91 F .3d 914, 919

– 20 (7th Cir. 1996); G. & C. Merriam Co. v. Webster Dictionary Co.

, 639 F.2d 29, 35 (1st Cir. 1980 ).
The second category , which is the only one at issue in this appeal, is less well defined than the first . A nd it s imp lementation by the courts has reflected a fact

- specific approach and particular caution so as to pr otect the strong, underlying background principle shared with the related area of preclusion law: “‘everyone should have his own day in court.’” Taylor v. Sturgell , 553 U.S. 880, 893 (2008) (quoting Richards v. Jefferson County , 517 U.S. 793, 79 8 (1996))

. 4 But this category, included within the

4 The Court in Taylor described recognized exce ptions to that principle in the preclusion context, such as where a person in the later suit sufficiently controlled the litigant in the earlier suit, 553 U.S. at 893

– 95, and rejec ted a broad “virtual representation” exception, id. at 895

– 904. We do not suggest that the analysis in the precl usion context is on all fours with the injunction

- scope analysis, but the two ar eas share some underlying princ i-ASETEK DANMARK A / S v. CMI USA INC

. 23

“active concert or participation” standard, embraces at least two types of situation s of potential relevance here.

Th us, th e “legally identified” category has long co vered at least some situations in which the non

- liable person is a successor of the liable person in a relevant respect

. See Golden State , 414 U.S . at 1 80 (explaining in the employer context that Rule 65 (d)’s policy is consistent with imposing a predecessor’s obligation on a successor enterprise: “[A] bona fide purchaser, acquiring, with knowledge that the wrong remains unremedied, the employing enterprise which was the locus of the unfair labor practice, may be considered in privity with its predecessor for purposes of Rule 65(d).

. . . T he tie b etween the offending employer and the bona fide purchaser of the business, supplied by a [National Labor Relations] Board finding of a continuing business enterp rise, esta blishes the requisite relationship of dependence ” of the successor’s conduct on the liable person.) ; Regal Knitwear

, 324 U.S. at 14 (discussing successors and assigns and recognizing enjoinability “ in appropriate circumstances ” of “‘those to whom the business may have been tran sferred, whether as a means of evading the judgment or for other reasons’” (quoting Walling v. James V. Reuter , Inc.

, 321 U.S. 671, 674 (1944))

. 5 This court so recognized in Additive Controls I

, explaining t hat certain “successor” situations , involving evasive intent, are covered by the

ples. See Nat’l Spiritual Assembly of the Baha ’ is of the U.S. Under the Hered itary Guardianship, Inc. v. Nat’l Spiritual Assembly of the Baha ’ is of the U.S. , Inc. , 628 F.3d 837 , 847

– 54 (7th Cir. 2010) (borrowing from Taylor and preclusion law to resolve Rule 65(d) issue).

5 As Golden State ’s “dependence” language co nfirms, where that standard is met, the non

- liable person’s conduct is not “wholly independent” of the liable person. Golden State , 414 U.S. at 180.ASETEK DANMARK A / S v. CMI USA INC

. 24

“active concert or participation ” stand ard of Rule 65(d)

. 96 F.3d at 1397 ; s ee Merial , 681 F.3d at 1304 , 1305 ( sim ilar ) ; Additive Controls & Measurement Sys., Inc. v. Flo wdata, I nc. , 154 F.3d 1345, 1355 (Fed. Cir. 1998) ( Additive Controls II ) (test of “substantial continuity of identity,” originating in “labor relations context,” “has been adopted as a general express ion of the degree of closeness that R ule 65(d) requires for a non

- party successor to be subject to the injunction”)

. 6

A nother subcategory recognized in various cases i nvolves situations in which a party’s litigation of a case is sufficiently controlled by another person that the latter may be said to have had its d ay in court and on that ground be subject to the injunctive obligations. The First Circuit in G. & C. Merriam recognized that a nonparty is “legally identified” with a liable party, and may therefore itself be enjoined, if the nonparty “had such a key rol e in the [party’s] participation in the injunction proceedings that it can be fairly said that he has had his day in court in relation to the validity of the injunction .” 639 F.2d at 37. We recognized the point in Additive Controls II

,

6 Additive Controls I cites Kloster Speedste e l AB v. Crucible Inc. , 793 F.2d 1565, 1582

– 83 (Fed. Cir. 1986) (acquirer of assets of liable person), overruled in unrelated respect, Knorr

- Bremse Systeme Fuer Nutzfahrzeuge Gmb H v. Dana Corp.

, 383 F.3d 1337 (Fed. Cir. 20 09), and New York v. Operation Rescue Nat ional , 80 F.3d 64, 70

– 71 (2d Cir. 1996) (“successors” may include organizations through which “similarly constituted groups of individuals move fluidly between multiple unincorporated associ ations that share the sam e basic leadership and goals”). We note that, in Travelhost, Inc. v. Blandford , 68 F.3d 958, 961

– 65 (5th Cir. 1995), the Fifth Circuit rejected a particular injunction’s coverage of an arms

- length pu rchaser of a liable person’s assets.ASETEK DANMARK A / S v. CMI USA INC

. 25

quoting G. & C. Merriam in explaining that the officer of a corporation is legally identified with a corporation if the officer had just such control over the corporation’s litig ation. 154 F.3d at 1352. The Seventh Circuit made the same point in National Spiritual Assembl y , relating G. & C. M erriam ’s holding to the established principle that a nonparty may be “bound by a judgment if she assumed control over the litigation in which that judgment was rendered.” 628 F.3d at 852 n.4 (quoting Taylor , 553 U.S.
at 895 ; citing Montana v. United States , 440 U.S. 147, 153

– 54 (1979)).

I n the present case the district court specifically i nvoked th e “successor” standards when it cited the above

quoted pages of Golden State and Regal Knitwear

. Asetek

, 2015 WL 5568360, at *17

. And i n entering the injunction,
t he district court relied on certain facts : “ CMI is autho rized by .

. . Cooler Master to sell Cooler Master

- branded liquid

- cooling devices in the United States” ; “CMI and Cooler Master have an exclusivity agreement where CMI is C ooler Master’s exclusive U.S. distributor”; and “CMI and Cooler Master jointly developed the infringing pro ducts .” Id. “Because of Cooler Master’s past history in developing the infringing products and its con tractual relationship with CMI ,” the court then concluded, “Cooler Master is an appropriate subject of the injunction under Rule 65(d)(2).” Id. at *18

. In drawing that conclusion, t he district court relied on this court’s decision in Aevoe . W hile that decision is instructive in various ways , it i nvolves different facts from the present case in at least one respect . In Aevoe

, the non

- liable persons (the S&F Defendants) were barred from selling the “infringing products obtained from” the liable person (AE Tech)

. 727 F.3d at 1379

– 80. Here, Cooler Master is the supplier; it does not acquir e the products at issue from CMI.ASETEK DANMARK A / S v. CMI USA INC

. 26

We do not decide what ultimate legal significance that distinction may have here. A chain of title to particular units is just one of a number of facts of potential relevance
to t he inquiry into the proper scope of the injunction here. For example, in Merial , we upheld an injunction barring

non

- party Ve l cera from making, using, selling, or impor ting certain products developed, manufactured, or pac kaged with the assistance or participation of the liable party
, Cipla, even if Cipla acted only abroad. 681 F.3d at 1289

– 92, 1304

– 05. We relied on the district court’s fin dings that the “multilayered relationships that linked Velcera and Cipla” were structured “to obfuscate illicit and intentional concerted action” by those parties

. Id. at 1305. Here

, besides other facts, Asetek has allege d that, while Cooler Master may not acquire its products from CMI, CMI’s cooperation in modifying its exclusivity dea l was obtained or needed in order for Cooler Master to engage, other than through CMI, in the U.S.

- focused sales and related activities involving the products at issue.

We do not think it advisable to resolve the issue of the proper scope of the injunction here without a fuller pi cture of the facts described by the district court . Rather, we think, further proceedings are warranted before a final conclusion is drawn about the injunction in this case. Both the delicacy of the injunctive authority at issue and the tradition of narrow fact

- dependent determinations whether to invoke it argue for deferring conclusion s until the facts about the relationship of Cooler Master and CMI , both in their businesses and in this litigation, are more fully developed and th eir legal significance more fully explored. See Parker v. Ryan , 960 F.2d 543, 546 (5th Cir. 1992) (identifying need for further inquiry and r emanding); cf. United States v. Int’l Bh d

. o f Teamsters, Chauffeurs, Warehousemen & Helpers , 964 F.2d 180, 184 (2d Cir. 1992) (“ W hether any person is bound by a jud gment always depends on the precise relationship of that person to the underlying litigation

. . . . ”)

.ASETEK DANMARK A / S v. CMI USA INC

. 27

Without prejudging ultimate material ity

, and without intending to be complete, we note some facts that either side or both sides of this case may find worth y of further development to form a full picture of whether Cooler Master may be “legally identified” with CMI for present
purposes : the nature of the exclusivity relationship between the firms ( e.g. , i ts scope
, its terminability) ; trademarks and other aspects of the two compan ies ’ relations at relevant times ; the origins of CMI and its relationship to Cooler Master ; the details of and intent behind changes in the companies’ relations , particularly since liability was found in this case ; and the companies’ relationship in the conduct of this litigation

, in which products made by Cooler Master and carrying its brand

name a re at stake, both before and after Cooler Master was dismissed. We do not decide the relevance or impl ications of such facts. Nor do we answer several related, potentially relevant questions: If Cooler Master needs CMI’s permission to itself engage in the U.S.

- focused acts at issue, would such acts be properly viewed as taken in active concert or participation with CMI? Is CMI’s inte rest in such Cooler Master acts suggested by the fact that CMI itself has joined in Cooler Master’s challenges to the injunction’s scope on appeal , challenges whose success would free Cooler Master to transf er business away from CMI ? Whether or not Cooler Master has plenary freedom to transfer its business away from CMI, was Cooler Ma ster , after leaving this case, still exercising control over CMI’s conduct of this litigation, which concerned the future of C ooler Master’s products , or did Cooler Master simply leave its products’ fate in this litigation in CMI’s hands ? Two final, related points . First, w e do not think it a ppropriate to vacate the injunction at present. We have discretion pursuant to 28 U.S.C. § 2106 . L eav ing the injunction in force for a time would preserve the status quo that has existed for a year

, appellants not havingASETEK DANMARK A / S v. CMI USA INC

. 28

sought a stay from us

. And , although we are refraining from drawing any conclusions, we are not convinced , on the p resent record, that the district court ’s injunction is so

un likely to be found improper that the status quo should be disturbed

. Accordingly, like the Fifth Circuit in Parker v. Ryan , 960 F.2d at 546, we choose to leave the injunction in place for now

, an d we remand for further proceedings to determine the proper reach of the injunction

, to be conducted in as reasonably prompt a fashion as possible.
Second, such proceedings might be unnecessary , at all or for a time, if Asetek chooses , in the meantime, to file a new injunctive infringement action against Cooler Ma ster. In such an action, Asetek might seek a preliminary injunction , relying on the judgment reached after full litigation in the present case. We do not prejudge the merits of any such reque st, or the merits of any such separate suit, including any invocation by Asetek of privity

- based issue preclusion against Cooler Master (which is not foreclosed simply by the absence of claim preclusion, New Hampshire v. Maine , 532 U.S. 742, 748 (2001))

. We note only that such a proceeding might produce rulings that postpone the need to decide

, or even moot, the delicate remedial issue that we here remand to the district court.

C ONCLUSION For the foregoing reasons, we affirm the district court’s denial of CMI’s motions for judgment as a matter of law and for new trial. We affirm the injunction except insofar as it reaches Cooler Master ’s conduct that does not abet new violations by CMI . Insofar as the injunction reaches such conduct, we remand for further consider ation in accordance with this opinion, without vacating any part of the injunction.

Costs awarded to Asetek.
AFFIRMED IN PART, REMANDED IN PART

# United States **Court of Appeals**  **for the Federal Circuit**

______________________ ASETEK DANMARK A/S, Plaintiff

- Appellee

v.

CMI USA INC., FKA CO OLER MASTER USA, INC ., COOLER MASTER CO., LTD., Defendants

- Appellants

______________________

2016

- 1026, 2016

- 1183

______________________ Appeals from the United States District Court for the Northern District of California in No. 3:13

- cv

- 00457

- JST, Judge Jon S. Tigar.

______________________

P RO ST , Chief Judge

, dissenting in part

. I respectfully dissent from the majority’s decision to remand this case to the district court for further procee dings regarding the injunction while keeping it in force. The correct course of action would be to vacate the po rtions of the injunction that improperly reach Cooler Master (who has not been found to infringe the asserted patents) in its own capacity.

The district court issued an injunction that included two key provisions. The first, Paragraph (2), enjoins certain activities of CMI

— the adjudicate d infringer in this case

— “and those persons in active concert or partic ipation ” with it. The second, Paragraph ( 3) , goes muchASETEK DANMARK A / S v. CMI USA INC

. 2

further. It enjoin s the independent activities of Cooler Master

, an entity tha t was not a party to the liability portions of the case

. 1 While Paragraph (2) is proper under Federal Rule of Civil Procedure 65(d) , Paragrap h (3) i s plainly an overreach of the district court’s authority to issue judgments only on the disputes before it

. Simila rly, portions of Paragraphs (4) and (5) that impose affirm ative obligations on Cooler Master related to the injunction

a re also improper. The majority speculates about the relationship b etween Cooler Master and CMI but provides no basis to justify the district court’s injunction against Cooler Ma ster in its own capacity

. In deed, there is none.

I Courts are not legislatures. We issue judgments only on the disputes before us that bind only the parties i nvolved. As a consequence, it is a “general principle that a

non

- party to an action may not be enjoined in that a ction.” Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc. , 96 F.3d 1390, 139 5 (Fed. Cir. 1996). For example, in Chase National Bank v. City of Norwalk , the Supreme Court vaca ted an injunction that bound “all persons to whom notice of the order of injunction should

come

. . . .” 291 U.S. 431, 436 (1934) (internal quotation marks omitted) . This, in the Court’s view, “ violate [d] established principles of equity jurisdiction and proc edure ” because it “ ma [d] e punishable as a contempt the conduct of persons who act independently and whose

1 Several months before trial, Asetek filed a volu ntary stipulation to dismiss Cooler Master with prejudice, which the district court granted. Cooler Master later intervened for the limited purpose of suspending the injunction against it.ASETEK DANMARK A / S v. CMI USA INC

. 3

rights have not been adjudged according to law .” Id . at 437. The only exception to this rule, codified in Federal Rule of Civil Procedure 65(d), is that an injunction may bind non

- part ies who are “in active concert or particip ation with” parties to the action (or the parties’ officers, agents, servants, employees, and attorneys) “who receive actual notice of [the order] by personal service or othe rwise.” This exception derives from common law principles regarding the power of courts in equity. In Alemite M an ufacturing Corp. v. Staff , another case that vacated an injunction covering a non

- party, Judge Learned Hand explained as follows:
[N] o court can make a decree which will bind any one but a party; a court of equity is as much so limited as a court of law; it cannot lawfully enjoin the world at large, no matter how broadly it words its decree. If it assumes to do so, the decree is pro tanto bru tum fulmen, and the persons enjoined are free to ignore it. It is not vested with sove reign powers to declare conduct unlawful; its juri sdiction is limited to those over whom it gets personal service, and who therefore can have their day in court. Thus, the only occasion when a pe rson not a party may be punished, is when he has helped to bring about, not merely what the decree has forbidden, because it may have gone too far, but what it has power to forbid, an act of a party. This means that the responde nt must either abet the defendant, or must be legally identified with him.
42 F.2d 832, 832

– 33 (2d Cir. 1930). In keeping with this rationale, Rule 65(d)’s “active concert or participation” condition has been interpreted to cover two general cla sses of no n- parties: (1) aiders and abettors, and (2) those inASETEK DANMARK A / S v. CMI USA INC

. 4

privity with an enjoined party. See , e.g. , Golden State Bottling Co. v. NLRB , 414 U.S. 168, 179

– 80 (1973)

. Here

, CMI i s the adjudicate d infringer

. Accordingly, the district court had authori ty to enter an injunction against CMI and, pursuant to Rule 65(d), anyone in “active concert or participation” with CMI

. For example, the district court can prohibit a third party from acting as a conduit through which CMI could sell its infringing products to United States customers (e.g., by operating a website where CMI places its products for sale or by acting as CMI’s distributor in the United States). The court exercised this authority in Para graph (2) of the injunction , which is directed at “CMI USA, Inc. and its subsidiaries and affiliated companies (collectively defined as ‘CMI’), as well as CMI’s successors , assigns, officers, directors, agents, servants, employees, representatives and attorneys, and those persons in active concert or participation with them. ” J.A. 152 (emphasis added) . It should have stopped there.
Paragraph (3) of the injunction, however, goes much further

. It enjoins Cooler Master

— who , again, is not the adjudicated infringer

— “from making, using, offering for sale or selling in the United States, or importing into the United States .

. . the Infringing Products .” Id. Par agraphs (4) and (5) further include require ments for Cooler Master to, respectively, provide notice of the court’s judgment to persons in “active concert or participation” with it and provide written notice with every sale of an infringing product. Id. T he se restrictions and obligations in Paragraphs (3)

– (5) are outside of the district court’s authority becau se they reach independent activity by Cooler Master

. 2

2 The majority states that Cooler Master is not challenging vario us aspects of the injunction against it.ASETEK DANMARK A / S v. CMI USA INC

. 5

A court must restrict itself to “what it has power to forbid, an act of a party.” Alemite , 42 F.2d at 833. As we have recently explained, “[c]ourts have carefully disti nguished between entering an inj unction against a non

party, which is forbidden, and holding a non

- party in contempt for aiding and abetting in the violation of an injunction that has been entered against a party, which is permitted.” Additive Controls , 96 F.3d at 1395. Thus,

even a no n- party “[h]aving a relationship to an enjoined party of the sort set forth in Rule 65(d)

. . . does not justify granting injunctive relief against the non

- party in its separate capacity.” 3 Id. at 1395

– 96. “ Unless duly su mmoned to appear in a legal proceeding, ” one can “ rest assured that a judgment recovered therein will not affect his legal rights.” Chase Nat’l Bank , 291 U.S. at 441.
In this case, the district court dismissed Asetek’s all egations against Cooler Master with prejudice in Septe mber 2014. From th at point forward , the district court had the power to adjudicate but one source of potential liabi lity: CMI’s alleged infringement of the ’362 and ’764 p atents. Rule 65(d) permits the district court to enjoin Cooler Master only to the extent Cooler Master is aiding and abetting CMI’s acts of infringement or can be deemed

Majority Op. at 18

– 19 . Regardless, there is no question that Cooler Master is challenging the portions of the injunction that reach it in its own capacit y.
3 Our decision in Aevoe Corp. v. AE Tech Co.

, 727 F.3d 1375 (Fed. Cir. 2013), is consistent. Although the district court in Aevoe modified its preliminary injunction to enjoin a non

- party, we found that the modification fell within the “acting in concert” scope of the original injun ction and, thus, was consiste nt with Rule 65(d). 727 F.3d at 1379, 1384. In addition, the modifi cation occurred only after the patentee in that case had filed an amended complaint naming the non

- party. Id. at 1379

– 80.ASETEK DANMARK A / S v. CMI USA INC

. 6

its privy. There has been no adjudication that Cooler Master infringes , so there is no independent activity by Cooler Master that the district court has the power to enjoin. See Additive Controls , 96 F.3d at 1395 (holding that an injunction against entities in their separate capacity “cannot be justified as an application of Rule 65(d), since [such an injunction] does not govern [their] conduct solely as it relates to their activities in concert with an enjoined party”).
Therefore, t he p rovisions in Paragraph s (3)

– (5) of the injunction that reach Cooler Master in its own capacity must be vacated. Cooler Master should remain “entitled to contest [its] liability and the approp riateness of equit able relief in a lawsuit in which [it is] named as [a] part[y].” Id. at 1397.

II

T he majority instead remand s for further proceedings regarding the relationship between CMI and Cooler Master and keeps the problematic portions of the injun ction in place in the interim . I disagree with that decision for several additional reasons.

E ven though the majority asserts that it is not pr ejudging any facts regarding Cooler Master, it implicitly does s o . It invites continued proceedings on matters that were never put before a jury, based on evidence that w as largely submitted for the first time after trial. R eman ding this case creates additional burdens and expenses for the district court and the part ies, particularly given the majority’s request for expedited proceedings. We should not interfere with how the district court adjudicate s matters in the first instance.
Moreover, to the extent Asetek seeks recourse against Cooler Master , it should do so t hrough other procedures

. If Asetek believes Cooler Master is a privy to CMI

, or is aiding and abetting CMI’s infringing activity , Asetek c anASETEK DANMARK A / S v. CMI USA INC

. 7

pursue a contempt proceeding against Cooler Master. As discussed above , Cooler Master would be subject to co ntemp t under Paragraph (2) of the injunction for such activity ; t here is no need for Paragraph (3). And if Asetek wishes to enjoin Cooler Master from independently i nfringing its patents

, it can bring a separate su it against Cooler Mas ter for patent infringement. 4 Curio usly, notwithstanding its remand of this case to the district
court , the majority does not disagree. Indeed, it urges Asetek to pursue this alternative course.
Equally problematic is the majority’s refusal to vacate the injunction in the interim

. Aside from its implicit prejudg ment of certain facts, the majority only purports to base its refusal to vacate the injunction on the absence of an explicit request for a stay and on maintaining the status quo. But Cooler Master has asked for all that it needs : from the district court, it sought a stay of the injunction against it ; and from this court, it sought vac ature of the same

. T he status quo is no excuse to allow the injunction to remain in force either. Notably, the majority does not bless the injunction wholesale

— as it stands, the

4 The district court’s earlier dismissal of Asetek’s infringemen t claims against Cooler Master would not bar such a suit, as the post

- trial “evidence” that Asetek cites (e.g. , alleged sales to the United States through Cooler Master websites and alleged partnership with AMD) involve actions that happened after the cour t entered judgment in Asetek’s favor. See J.A. 8266

– 67, 8478

– 519 (post

- trial “evidence” submitted by Asetek, dated June 29, 2015 and August 6, 2015); s ee also Aspex Eyewear, Inc. v. Marchon Eyewear, Inc. , 672 F.3d 1335, 1342 (Fed. Cir. 2012) (“[A] party w ho sues a tortfeasor is ordinarily not barred by a prior judgment from seeking relief for discrete tortious action by the same tortfeasor that occurs subs equent to the original action. ”).ASETEK DANMARK A / S v. CMI USA INC

. 8

injunction is questionable at best. To m aintain a n injun ction while asking the district court to review it puts the cart before the horse

. T he majority ’s request for the district court to act “in as reaso nably prompt a fashion as possibl e, ” Majority Op. at 28
, does not fix the problem

. III

For the reasons above , I dissent from the majority’s decision to remand for further proceedings regarding the district court’s injunction and to keep the injunction in force in the meantime

. The proper result would be to

v acat e the injunction with respect to Cooler Master

— namely, striking Paragraph (3) and the corresponding language in Paragraphs (4) and (5). There is no need to remand for further proceedings, as t hey are neither necessary nor appropriate.