Opinion ID: 779170
Heading Depth: 2
Heading Rank: 1

Heading: Inducement and Infringement

Text: 29 Although the issue of the infringement of claim 9 only comes to us as a conditional cross-appeal, it is a predicate to the question of inducement of claim 9, which has been directly appealed. See Epcon Gas Sys., Inc. v. Bauer Compressors, Inc., 279 F.3d 1022, 1033, 61 USPQ2d 1470, 1478 (Fed.Cir.2002) ([T]here can be no inducement of infringement without direct infringement by some party.). Therefore, we must first decide the issue of infringement.
30 In their brief, the defendants argue that the jury's unchallenged finding that claim 1 was not infringed is dispositive of any infringement-related issues for dependent claim 9. The defendants argue that because 3M has not appealed the jury's finding that claim 1 was not infringed, the noninfringement of claim 1 is final and undisputed for purposes of this appeal. Moreover, the defendants argue that it is a well-settled rule that dependent claims cannot be found to be infringed unless the claims from which they depend have been found to be infringed. As a result of this, the judgment that claim 9 has been infringed by the defendants cannot, as a matter of law, be sustained and must be reversed, according to the defendants. 1 31 We hold that the defendants are judicially estopped from asserting that the jury verdicts are inconsistent. In this case, the defendants assert that the verdicts are inconsistent, and therefore we cannot rely on the finding of infringement of claim 9 because this court has repeatedly held that it is axiomatic that dependent claims cannot be found infringed unless the claims from which they depend have been found to be infringed[.] Wahpeton, 870 F.2d at 1553, 10 USPQ2d at 1208; accord Jeneric/Pentron, 205 F.3d at 1383, 54 USPQ2d at 1090. The defendants, therefore, in arguing that claim 9 cannot be infringed because of the unchallenged finding that claim 1 is not infringed, are relying on the inconsistency in jury verdicts. However, not only did the defendants not raise this inconsistency before the district court, they expressly argued against a finding of inconsistency. 32 3M argues that as a result of the defendants' position before the trial court that the verdicts were not irreconcilable, the defendants are now estopped from asserting that they are inconsistent and are now estopped from asserting that we should not rely on the jury verdict for claim 9. In response, the defendants contend that the language in footnote 2 of the Opposition indicates that they admitted to the trial court that there was an inconsistency, and therefore they are not now changing their position. 33 Whether judicial estoppel applies is a matter of regional circuit law. Wang Labs., Inc. v. Applied Computer Sciences, Inc., 958 F.2d 355, 358, 22 USPQ2d 1055, 1058 (Fed.Cir.1992). In this case the law of the Fifth Circuit applies. Recently, in In re Coastal Plains, Inc., the Fifth Circuit articulated the theory behind judicial estoppel. 179 F.3d 197 (5th Cir.1999). The purpose of the doctrine is to `protect the integrity of the judicial process', by `prevent[ing] parties from playing fast and loose with the courts to suit the exigencies of self interest'. Id. at 205 (citing Brandon v. Interfirst Corp., 858 F.2d 266, 268 (5th Cir.1988)). The Supreme Court, in New Hampshire v. Maine, recently explained that several factors inform the decision of whether to apply the estoppel doctrine in a particular case. 532 U.S. 742, 750-51, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001). The Court recited a flexible, non-exhaustive list: 34 First, a party's later position must be clearly inconsistent with its earlier position.... Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled, ... Absent success in a prior proceeding, a party's later inconsistent position introduces no risk of inconsistent court determinations,... and thus poses little threat to judicial integrity.... A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.... 35 Id. (citations omitted). 36 In this case the position the defendants presented to the district court is in direct conflict with the position they are taking before this court. Reading the defendants' Opposition it is clear that their primary argument was that the verdict was consistent. It was only in the alternative that the defendants admitted some inconsistency. Moreover, they stated in the conclusion to the Opposition that [t]here is no basis for ordering a new trial or otherwise disregarding the jury's findings. To the contrary, in the present circumstances, the Seventh Amendment mandates that the jury's verdict be given effect. The defendants cannot now argue that merely because they admitted, in the alternative, to some inconsistency, they cannot be estopped from arguing such an inconsistency today. The defendants argued to the trial court that the jury verdict should not be modified. They cannot now argue that it should. The defendants seek to have it both ways: to be able to argue to the trial court that the verdicts should not be changed, and to be able to argue to this court that they are inconsistent. Adding footnote two to the Opposition is not sufficient to overcome judicial estoppel when the defendants continued to argue that the trial court should take no steps to remedy the inconsistency. 37 It is equally apparent that the district court accepted the defendants' position that the verdicts were not inconsistent. In response to 3M's motion for a new trial the court stated [t]he Court has determined that the answers made by the jury to the questions asked in the charge are not in irreconcilable conflict and that the jury's answers are supported by evidence of record. Order, slip op. at 1. 38 Therefore, we do not hesitate in concluding that the defendants are estopped from asserting before this court that the jury verdict is inconsistent. By arguing that we should ignore the jury finding of infringement of dependent claim 9 because of the jury finding of noninfringement of independent claim 1, the defendants are doing just that: arguing that the verdict is inconsistent and that we should rely on the part of it which is most beneficial to them. However, the defendants must be held to the position they argued before the district court: that the verdict is reconcilable. The district court agreed and that decision has not been appealed by 3M. The defendants cannot now take the opposite position so as to derive advantage. Therefore, we must review this case under the premise that the verdict is reconcilable and assume that claim 1 is not infringed and claim 9 is infringed.
39 The arguments pertaining to claim construction arise in the context of the conditional cross-appeal but are critical to whether there was any infringement and therefore any inducement to infringe, and as such, must be reviewed. 40 The defendants assert that the district court erred in its Markman construction of the claim term effective amount. See Claim Construction, slip op. at 6. They argue that the prosecution history mandates that the term be construed to require that all of the anhydride sites be reactive and that none be neutralized. A review of the prosecution history, however, does not indicate that 3M disclaimed a construction of the phrase that allows for some of the reactive sites to be neutralized. A fair reading of the prosecution history shows that 3M was distinguishing its invention over one in which all of the sites were neutralized. 3M, therefore, argued that it is contrary to the invention to neutralize the anhydride sites. There is no indication, however, that 3M intended that all of the anhydride sites had to be reactive. As a result there is no reason to conclude that the district court erred in not including this limitation in its construction of effective amount. See id. 41 Relying on the prosecution history, the defendants further argue that the district court erred in not requiring the formation of only covalent bonds between the anhydride compound and the cross-linking agent. See id. Again, the prosecution history does not mandate such a narrow construction. 3M distinguished its claims over prior art in which the reaction was completely ionic. 3M distinguished its claims by asserting that they require covalent cross-linking. It did not, however, specify that no ionic bonding could occur. It was therefore not error for the district court not to include this additional limitation in its claim construction. See id. 42 Therefore, we decline to hold that the district court erred in its claim construction and we find no reason to overturn the jury verdict that Chemque and T&B infringed claim 9.
43 Given that we must accept that claim 9 is infringed, we must address 3M's argument that the jury's finding that Chemque did not induce infringement of claim 9 is not supported by substantial evidence. 44 Inducement to infringe is defined by 35 U.S.C. § 271(b), which states that [w]hoever actively induces infringement of a patent shall be liable as an infringer. 35 U.S.C. § 271(b) (2000). In order to succeed on a claim of inducement, the patentee must show, first that there has been direct infringement, Epcon Gas Sys., Inc. v. Bauer Compressors, Inc., 279 F.3d 1022, 1033, 61 USPQ2d 1470, 1478 (Fed.Cir.2002), and second that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another's infringement. Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 553, 16 USPQ2d 1587, 1594 (Fed.Cir. 1990). But see Hewlett-Packard Co. v. Bausch & Lomb Inc., 909 F.2d 1464, 1469, 15 USPQ2d 1525, 1529 (Fed.Cir.1990) ([P]roof of actual intent to cause the acts which constitute the infringement is a necessary prerequisite to finding active inducement.) (footnote omitted). In other words [t]he plaintiff has the burden of showing that the alleged infringer's actions induced infringing acts and that he knew or should have known his actions would induce actual infringements. Manville, 917 F.2d at 553, 16 USPQ2d at 1594. 45 Chemque confronts the inducement claim by asserting that there can be no inducement of claim 9 because there is no infringement of claim 9, the claim construction was incorrect, and there are alternative grounds for invalidity. Aside from disputing 3M's assertions of the patent's validity and infringement, Chemque does not, in its brief, argue that the other requirements for proving inducement were not met. Chemque only challenges that there was not substantial evidence of direct infringement of claim 9, relying on the finding of noninfringement of claim 1. However, we have already disposed of this issue against Chemque, upholding the jury verdict finding both Chemque and T&B liable for infringement. Chemque does not assert that the jury's finding of no inducement is supported by substantial evidence for a different reason. While it is not Chemque's burden to do so, and we must defer to the jury's finding if there is substantial evidence to support it, 3M has presented evidence to support its assertion that all of the requirements for inducement were met, and Chemque has failed to show that there is substantial evidence that any were not met. The record indicates that Chemque was aware of the 3M patents and supplied the infringing products to T&B and other customers with instructions on how they were to be used, which, when followed, would lead to infringement. Because Chemque has not provided support for the jury finding of non-inducement, we reverse the denial of JMOL that Chemque induced the infringement of claim 9.