Court Opinion

ID: 8963767
Source: CourtListenerOpinion
Date Created: 2022-11-27 09:55:51.17324+00
Date Added: 2024-06-11T17:10:16.609597
License: Public Domain

NIES, Circuit Judge,
dissenting in part.
I agree with parts 1, 2, and 3 of the majority’s opinion. I cannot join part 4 of the opinion, however, because the district court’s finding that Ryco did not willfully infringe Ag-Bag’s patent by sales of its redesigned machine must be upheld under the constraints of Federal Rules of Civil Procedure 52(a). There are two possible views of the evidence so that the district court’s finding that willfulness was not proved cannot be found “clearly erroneous.” Without a reversal of that finding, there is no foundation for holding that this case either is exceptional under 35 U.S.C. § 285 (1982), thereby permitting an attorney fee award, or warrants increased damages under 35 U.S.C. § 284 (1982). I would, accordingly, affirm those portions of the court’s judgment.
I
The question of whether infringement is willful is one of fact and, therefore, is subject to Rule 52(a)’s clearly erroneous standard of appellate review. See, e.g., Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1389, 219 USPQ 569, 576 (Fed.Cir.1983). That standard is defined in United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948):
A finding is “clearly erroneous” when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.
See also SSIH Equip. S.A. v. United States Int’l Trade Comm’n, 718 F.2d 365, 381, 218 USPQ 678, 692 (Fed.Cir.1983) (Nies, J., additional views). Further, the patentee has the burden to prove willfulness by clear and convincing evidence. See Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 628, 225 USPQ 634, 644 (Fed.Cir.), cert. denied, 474 U.S. 976, 106 S.Ct. 340, 88 L.Ed.2d 326 (1985). We may not, of course, merely substitute our view of the weight of the evidence. See Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573-74, 105 S.Ct. 1504, 1511-12, 84 L.Ed.2d 518 (1985) (“[T]he court of appeals may not reverse ... even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Where there are two permissible views of the evidence, the factfinder’s choice between them cannot be clearly erroneous.”). Thus, the precise *1434question is whether the district court clearly erred in ruling that the evidence that the infringers acted willfully was not clear and convincing.
The district court found Kelly Ryan’s and Ryco’s (hereinafter, collectively, Ryco’s) infringement had not been proved willful, finding instead that they “reasonably believed the ’805 patent was invalid. Moreover, they reasonably felt the modifications they made to the agricultural bag loading devices sold by Ryco did not infringe the ’805 patent, if it was valid.” A review of the entire record fails to leave one “with the definite and firm conviction” that the district court committed a mistake in those findings or in the ultimate finding that willfulness was not established.
The applicable test for determining willfulness is whether the infringer possessed a culpable intent to infringe. “[Ijnfringement may range from unknowing, or accidental, to deliberate, or reckless, disregard of a patentee’s rights.” Rite-Hite Corp. v. Kelley Co., 819 F.2d 1120, 1125-26, 2 USPQ2d 1915, 1918-19 (Fed.Cir.1987). There is no “rigorous rule” under that test; rather, all of the circumstances are considered. Id. Under all the circumstances here, the district court’s finding that Ag-Bag failed to prove willfulness with respect to all of Ryco’s infringing sales is not clearly erroneous.
II
To establish that the court’s findings are clearly erroneous, Ag-Bag’s principal argument is that Ryco knew of Ag-Bag’s patents yet failed to consult an attorney before infringing. Contrary to Ag-Bag’s view, however, that failure alone is not conclusive. See, e.g., Rolls-Royce Ltd. v. GTE Valeron Corp., 800 F.2d 1101, 1109-10, 231 USPQ 185, 191 (Fed.Cir.1986) (no per se rules in respect of willfulness and “not every failure to seek an opinion of competent counsel will mandate an ultimate finding of wilfulness”); Machinery Corp. of Am. v. Gullfiber AB, 774 F.2d 467, 472, 227 USPQ 368, 372 (Fed.Cir.1985) (same). It is, of course, a factor to be considered. Ag-Bag also asserts willfulness is shown by Ryco’s continued infringement after the validity of the patent was recognized, albeit by consent decrees, in other litigation. Ag-Bag’s other evidence is that Ryco used a trademark similar to Ag-Bag’s and that Ryco used the same manufacturing facilities as previously used to manufacture machines for Ag-Bag. In addition, Ag-Bag argues that because Ryco had sold machines which it had made for Ag-Bag, and which were in inventory when their relationship ended, the “willfulness” of that infringement taints all of Ryco’s sales.*
On the other side of the scale, the district court’s disposition of, and this court’s holding on, Ryco’s validity challenges in themselves support a finding that Ryco could reasonably believe the ’805 and ’810 patents were invalid. The district court held the ’810 patent, claiming an improved brake mechanism, was invalid as obvious under 35 U.S.C. § 103 (1982). That portion of the court’s judgment was not appealed. Although the district court upheld the validity of the ’805 patent against Ryco’s challenge, this court reverses with respect to claims 32-35, finding those claims invalid as obvious. Moreover, the close nature of the obviousness challenge to the remaining ’805 claims required both courts to perform a thorough analysis; it supports the reasonableness of Ryco’s belief that the ’805 patent was invalid.
Turning to infringement, the district court found that Ag-Bag failed to prove Ryco’s redesigned machines literally infringed the ’805 patent. Nevertheless, it found infringement under the doctrine of equivalents, and this court affirms that judgment. The infringement question under the doctrine was reasonably contested and far from being a foregone conclusion.
Ryco’s litigation conduct is another factor to weigh in determining whether Ryco’s infringement was willful. Bott v. *1435Four Star Corp., 807 F.2d 1567, 1572, 1 USPQ2d 1210, 1213 (Fed.Cir.1986). It was Ryco that initiated this action by requesting a declaratory judgment invalidating Ag-Bag’s patents. Although that fact alone is insufficient to show a reasonable belief of a right to continue allegedly infringing acts, Kaufman Co. v. Lantech, Inc., 807 F.2d 970, 979, 1 USPQ2d 1202, 1209 (Fed.Cir.1986) (“mere fact [alleged in-fringer] brought suit is not evidence that there was such a reasonable basis” for belief), it is a factor. In addition, Ryco’s counsel did provide an opinion before Ryco brought suit. Moreover, Ryco has not resorted to meritless defenses or dilatory tactics in litigating before the district court or this court. Such conduct further supports the finding that Ryco acted in good faith. See, e.g., Bott, 807 F.2d at 1572, 1 USPQ2d at 1213; Yarway Corp. v. Eur-Control USA, Inc., 775 F.2d 268, 277, 227 USPQ 352, 358 (Fed.Cir.1985); accord Lam, Inc. v. Johns-Manville Corp., 668 F.2d 462, 474-75, 213 USPQ 1061, 1071 (10th Cir.), cert. denied, 456 U.S. 1007, 102 S.Ct. 2298, 73 L.Ed.2d 1302 (1982).
Another circumstance to consider is whether Ryco deliberately copied Ag-Bag’s patented device. Bott, 807 F.2d at 1572, 1 USPQ2d at 1213. As Ag-Bag acknowledges, Ryco “undertook to change the design which [Ryco] had previously made for Ag-Bag to something else.” That attempt to “design around” the ’805 patent included a series of design alterations in which Ryco (1) separated the teeth on the rotor shaft axially and arranged them helically, (2) angled the projections on the feeder bar, (3) flattened the stripper bars to avoid a convex shape, (4) attached the disc brake to the same shaft as the cable drums, and (5) provided an auger, instead of a feeder bar with projections, on its two-wheeled device. This court has stated that the incentive to design around a patent is a positive result of the patent system:
One of the benefits of a patent system is its so called “negative incentive” to “design around” a competitor’s products, even when they are patented, thus bringing a steady flow of innovations to the marketplace. It should not be discouraged by punitive damage awards except in cases where conduct is so obnoxious as clearly to call for them.
State Indus., Inc. v. A.O. Smith Corp., 751 F.2d 1226, 1236, 224 USPQ 418, 424 (Fed.Cir.1985) (quoted in Yarway, 775 F.2d at 277, 227 USPQ at 359). Ryco’s nonfrivo-lous attempt to avoid infringement by changed design undermines Ag-Bag’s charge of “deliberate copying.”
In sum, given the evidence on both sides of the willfulness issue, the district court’s finding of no willful infringement cannot be held clearly erroneous under the standard of Anderson and United States Gypsum Co. The evidence of willfulness is not so overwhelmingly in Ag-Bag’s favor that only one conclusion can be reached. Accordingly, I would affirm those portions of the district court’s judgment denying Ag-Bag increased damages and attorney fees.

 It must be noted that. Ag-Bag did not obtain damages for the inventory sales and did not appeal that decision, apparently because they were insignificant. Thus, on appeal, Ag-Bag seeks only damages for Ryco’s later sales of redesigned machines.