Opinion ID: 210109
Heading Depth: 3
Heading Rank: 1

Heading: Convoyed Sales

Text: A convoyed sale refers to the relationship between the sale of a patented product and a functionally associated nonpatented product. A patentee may recover lost profits on unpatented components sold with a patented item, a convoyed sale, if both the patented and unpatented products together were considered to be components of a single assembly or parts of a complete machine, or they together constituted a functional unit. Rite-Hite Corp. v. Kelley Co. Inc., 56 F.3d 1538, 1550 (Fed. Cir.1998). Our precedent has not extended liability to include items that have essentially no functional relationship to the patented invention and that may have been sold with an infringing device only as a matter of convenience or business advantage. Id. Damages on these items would exceed that which suitably compensates for the infringement. Id. A functional relationship does not exist when independently operating patented and unpatented products are purchased as a package solely because of customer demand. The fact that customers prefer that passenger seats and tie-down wheelchair restraint systems come from a single supplier for ease of purchase, repair, and uniform design and appearance, does not compel the conclusion that the seats and tie-down system are analogous to components of a single assembly or . . . parts of a complete machine. Here, the trial court granted USSC's motion to set aside the verdict for convoyed sales because the record evidence, viewed in the light most favorable to American Seating, was insufficient as a matter of law for the jury to find that the patented tie-down system and unpatented passenger seats were part of a single functional unit. The evidence demonstrated that (1) neither flip-up nor fixed passenger seats are covered by the claims of the '038 patent; (2) the tie-down operates independently of the passenger seats; and (3) bus buyers do not require that passenger seats and tie-downs be purchased from the same company. Tie-downs and passenger seats were usually but not always purchased by bus manufacturers from the same company; package sales were for reasons of convenience and one-stop shopping, not because of an absolute requirement that the two items function together. Although the specification refers to a preferred embodiment in which the tie-down of the invention is located adjacent chairs that fold against the side of the bus, U.S. Patent No. 5,888,038 col. 1, ll.60-61 (filed Aug. 4, 1997), the claims make no mention of the passenger seats and the references to the adjacent chairs do not indicate any functional relation between the seats and the wheelchair tie-downs. Cf. Juicy Whip, Inc. v. Orange Bang, Inc., 382 F.3d 1367, 1372 (Fed.Cir.2004) (noting that the non-patented syrup was central to the visual appearance of the patented dispenser and therefore could be included in the lost profits analysis). A bus utilizing American Seating's tie-down restraint system and outfitted, by USSC's passenger seats would be equally as functional as a bus furnished with only American Seating products. The evidence shows that passenger seats command a market value and serve a useful purpose independent of the patented product. Cf. Rite-Hite, 56 F.3d at 1550 (citing Paper Converting Mach. Co. v. Magna-Graphics Corp., 745 F.2d 11 (Fed.Cir.1984) (indicating that lost profit damages are properly granted for collateral products that have no useful purpose or market value independent of the patented product)). Because it is clear that no interrelated or functional relationship inheres between the seats and the tie-down restraint system on a passenger bus, the district court was correct that the jury had no basis to conclude that lost profits on collateral sales of passenger seats were due American Seating.