Court Opinion

ID: 8208347
Source: CourtListenerOpinion
Date Created: 2022-09-22 15:01:02.67762+00
Date Added: 2024-06-11T16:41:31.419871
License: Public Domain

Case: 21-2159     Document: 47    Page: 1   Filed: 09/22/2022

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                   ______________________

                   CAP EXPORT, LLC,
        Plaintiff/Counterclaim Defendant-Appellee

                  ABRAHAM AMOUYAL,
                Third-Party Defendant-Appellee

                      4MODA CORP.,
                    Third-Party Defendant
                             v.

                    ZINUS, INC.,
 Defendant/Third Party Plaintiff/Counterclaimant-Appel-
                         lant

         DOES, 1 THROUGH 10, INCLUSIVE,
                     Defendant
               ______________________

                         2021-2159
                   ______________________

    Appeal from the United States District Court for the
 Central District of California in No. 2:16-cv-00371-JWH-
 MRW, Judge John W. Holcomb.
                  ______________________

                 Decided: September 22, 2022
                   ______________________
Case: 21-2159     Document: 47     Page: 2    Filed: 09/22/2022

 2                               CAP EXPORT, LLC   v. ZINUS, INC.

     DAVID BEITCHMAN, Beitchman & Zekian, PC, Encino,
 CA, argued for Cap Export, LLC, Abraham Amouyal. Also
 represented by MILORD A. KESHISHIAN, Milord & Associ-
 ates, PC, Los Angeles, CA.

     MATTHEW WOLF, Arnold & Porter Kaye Scholer LLP,
 Washington, DC, argued for Zinus, Inc. Also represented
 by JIN-SUK PARK; RYAN M. NISHIMOTO, Los Angeles, CA.
                 ______________________

     Before DYK, TARANTO, and STOLL, Circuit Judges.
 STOLL, Circuit Judge.
     This case comes to us on appeal for a third time. Zinus,
 Inc. appeals the United States District Court for the Cen-
 tral District of California’s summary judgment of invalidity
 under the on-sale bar, 35 U.S.C. § 102(a)(1), (b)(1). Be-
 cause there are material factual disputes regarding
 whether the on-sale product anticipates the asserted
 claims of U.S. Patent No. 8,931,123, we vacate the district
 court’s summary judgment and remand.
                         BACKGROUND
      Zinus is the current assignee of the ’123 patent, which
 is directed to “[a]n assemblable mattress support [that] can
 be shipped with all of its components compactly packed
 into the headboard.” ’123 patent, Abstract. Claim 1 is rep-
 resentative:
     1. A mattress support comprising:
     a longitudinal bar with a first connector and a sec-
     ond connector;
     a headboard with a compartment and a third con-
     nector; and
     a footboard with a fourth connector, wherein the
     first connector is adapted to attach to the third con-
     nector, wherein the second connector is adapted to
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 CAP EXPORT, LLC   v. ZINUS, INC.                            3

     attach to the fourth connector, wherein legs are at-
     tached to a bottom side of the footboard, wherein
     the longitudinal bar and the footboard fit inside the
     compartment of the headboard, wherein the first
     connector is directly connected to the third con-
     nector, and the second connector is directly con-
     nected to the fourth connector in an assembled
     state of the mattress support, wherein the first con-
     nector is not connected to the third connector, and
     the second connector is not connected to the fourth
     connector in a compact state of the mattress sup-
     port, and wherein the longitudinal bar and the
     footboard are contained inside the compartment in
     the compact state of the mattress support.
 Id. at col. 6 ll. 21–40 (emphasis added to highlight the dis-
 puted limitation on appeal).
     The protracted history of this case goes back to at least
 2016, when Cap Export, LLC filed a declaratory judgment
 action against Zinus, alleging that the ’123 patent claims
 are invalid and not infringed. Zinus counterclaimed, alleg-
 ing (among various state law counterclaims) that Cap Ex-
 port infringed the ’123 patent claims.
     After two appeals to this court and multiple remands
 to the district court, Cap Export filed a motion for summary
 judgment of invalidity under the on-sale bar. Cap Export’s
 invalidity theory is based on the sale of a particular bed-in-
 a-box product—the “Mersin” bed—sold by third party
 Woody Furniture to Zinus’s then-president Colin Lawrie
 before the ’123 patent’s critical date. Although disputed at
 the district court, Zinus does not dispute on appeal that
 this sale was a commercial sale or that the bed was ready
 for patenting. Instead, the crux of the parties’ dispute be-
 fore the district court, as relevant on appeal, was whether
 the assembly instructions that accompanied the Mersin
 bed sold to Mr. Lawrie, which on their face indicate that
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 4                               CAP EXPORT, LLC   v. ZINUS, INC.

 they were for the “Fusion” bed, also applied to the Mersin
 bed.
     Zinus presented testimony suggesting the Fusion bed
 instructions might have been mistakenly included in the
 Mersin bed box. Specifically, in connection with its brief
 opposing summary judgment, Zinus provided a declaration
 from its former Director of Marketing, Cyndi Hunting. As
 part of her job, Ms. Hunting stated she “was responsible for
 monitoring upholstered platform bed offerings of the com-
 petition in the market, and specifically on the Internet.”
 J.A. 9054 (Hunting Decl. ¶ 5). Based on her experience
 working in the industry, Ms. Hunting explained that “it is
 not uncommon for assembly instructions for one version of
 a bed type to be put into the shipping boxes for another
 version of the bed type,” due to “a mistake, sloppiness, or a
 failure to update/correct the assembly instructions.”
 J.A. 9060 (Hunting Decl. ¶ 27).
     There is no dispute on appeal that the product dis-
 closed in the Fusion bed assembly instructions would sat-
 isfy every element of claim 1. As shown in step 6 of the
 assembly instructions (reproduced below), a tab on a longi-
 tudinal bar 4 inserts into a bracket on the footboard (shown
 between 1 and 2). The parties dispute, however, whether
 the Mersin bed is constructed in the same way as the Fu-
 sion bed such that it satisfies every element of that claim—
 specifically, whether it has a “longitudinal bar” with a “sec-
 ond connector” that is “adapted to attach” to a “fourth con-
 nector” on the “footboard.” ’123 patent col. 6 ll. 21–40.
 Zinus presented evidence that it alleged shows that the as-
 sold Mersin bed does not include the connector shown in
 step 6 of the assembly instructions, including a photo of the
 as-sold Mersin bed taken from an inspection report. Step
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 CAP EXPORT, LLC   v. ZINUS, INC.                           5

 6 of the instructions and the photo are reproduced side-by-
 side below:
 J.A. 8424 (Fusion assembly instructions, excerpted);
 J.A. 8434 (photo of Mersin bed from inspection report, ex-
 cerpted).

     In her declaration on behalf of Zinus, Ms. Hunting dis-
 cussed the Fusion bed assembly instructions, explaining
 that “the end of the rail (4) appears to have a downward
 oriented tab” that “appears to be fashioned to engage a
 bracket” located between (1) and (2). J.A. 9059–60 (Hunt-
 ing Decl. ¶ 24). She further explained that, in contrast, the
 photograph of the Mersin bed shows “neither one of th[e]
 two structures (a tongue or a bracket)” that is shown in the
 Fusion assembly instructions. J.A. 9060 (Hunting Decl.
 ¶ 25). She continued: “What is pictured [in the photo] is
 most likely a hole. The rail does not appear to have any
 downward oriented tongue. The fabric is not bulging out-
 ward as would be the case if the wings of the bracket were
 underneath the fabric.” Id. She thus concluded that the
 Fusion bed and the as-sold Mersin bed are different.
     She wasn’t the only one to come to this conclusion.
 Mr. Jayson Lee, a member of Zinus’s research and develop-
 ment team, explained that the cost of production for the
 Mersin bed shown in the inspection report was low. He
 suggested that this was due, in part, to the design of the
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 6                               CAP EXPORT, LLC   v. ZINUS, INC.

 bed having a center support rail that is inserted into a slot
 in the footboard rather than having a center support rail
 with a connector that attaches to another connector on the
 footboard. J.A. 9068–69 (Lee Decl. ¶ 9). This design, he
 said, would result in a “lower material cost,” consistent
 with the low material cost reported on the inspection re-
 port. Id.
      Cap Export, for its part, argued that the Fusion and
 Mersin beds were one and the same and therefore that the
 Fusion assembly instructions depicted what was shown in
 the photo from the inspection report. That is, Cap Export
 argued that the instructions clarified that the Mersin bed
 did indeed have the requisite connectors on the center rail
 and the footboard, not just a hole for the rail to slide into.
 It relied principally on the testimony of third-party witness
 Agnes Tan, Woody’s marketing director. During her depo-
 sition, Ms. Tan testified that Woody’s Mersin bed has a
 PC001 factory code, and that this factory code is for
 Woody’s “bed in a box” product.             J.A. 8447 (Tan
 Dep. 17:8–14, 18:13–14). She also confirmed that “[a]ny
 time there is a PC001 as the first part of the identifying
 code, that refers to the ‘bed in a box.’”           Id. (Tan
 Dep. 19:11–15). She further testified that products with
 the PC001 factory code are “all the same constructions” but
 with different possible stitching on the headboard. Id. (Tan
 Dep. 18:18–19:10). She also testified that “Mersin” is the
 name that Jusama Group Consulting Inc. 1 calls the prod-
 uct. Because the Fusion bed assembly instructions were
 also for a “bed-in-a-box” product, Cap Export argued that
 it necessarily had a PC001 factory code and the same con-
 struction as the Mersin bed-in-a-box product, thus defeat-
 ing Zinus’s theory that the photo from the inspection report

     1  Mr. Lawrie was part-owner of Jusama (a sales rep-
 resentative for Zinus Inc. (Korea)) when Jusama purchased
 the Mersin bed from Woody.
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 CAP EXPORT, LLC   v. ZINUS, INC.                             7

 showed a hole in the footboard of the Mersin bed for the
 center support rail to slide into instead of tab and bracket
 connectors.
     The district court agreed with Cap Export. In doing so,
 it considered the Fusion assembly instructions alongside
 the photo of the as-sold Mersin bed from the inspection re-
 port, concluding that Ms. Tan’s testimony “demonstrates
 that they are the same bed-in-a-box product.” Cap Export,
 LLC. v. Zinus, Inc., 542 F. Supp. 3d 968, 981 (C.D. Cal.
 2021) (Summary Judgment Op.) (citing J.A. 8447 (Tan
 Dep. 17:8–20:21)). Using the Fusion assembly instructions
 to “explain how to connect the [Mersin bed’s] longitudinal
 bar . . . to the headboard and footboard,” the district court
 concluded that the on-sale Mersin bed satisfied every ele-
 ment of the claims, including the requisite connector on the
 longitudinal bar configured to attach to the connector on
 the footboard. See id. at 988–91. The court entered sum-
 mary judgment of invalidity on this basis. 2
     Zinus appeals. We have jurisdiction under 28 U.S.C.
 § 1295(a)(1).
                           DISCUSSION
     We review the district court’s summary judgment un-
 der the law of the regional circuit, here the Ninth Circuit.
 Pharma Tech Sols., Inc. v. LifeScan, Inc., 942 F.3d 1372,
 1379–80 (Fed. Cir. 2019). “The Ninth Circuit reviews a

     2    Cap Export also argued before the district court
 that even if Zinus was correct that the picture of the as-
 sold Fusion bed showed the longitudinal bar inserted into
 a hole in the footboard, it would still anticipate the patent
 claims, because a male-female connection mechanism
 would anticipate the disputed connector limitations. The
 district court did not address this argument in reaching its
 decision, and, accordingly, the parties did not brief it on ap-
 peal.
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 8                               CAP EXPORT, LLC   v. ZINUS, INC.

 district court’s grant of summary judgment de novo.” Id.
 at 1380 (citing Forester v. Chertoff, 500 F.3d 920, 923
 (9th Cir. 2007)). Summary judgment is only appropriate
 “if the movant shows that there is no genuine dispute as to
 any material fact and the movant is entitled to judgment
 as a matter of law.” Fed. R. Civ. P. 56(a).
     Whether a patent is invalid under the on-sale bar is a
 question of law based on underlying fact findings. Meds.
 Co. v. Hospira, Inc., 827 F.3d 1363, 1371 (Fed. Cir. 2016)
 (en banc). The on-sale bar is triggered if, before the critical
 date, the claimed invention was both (1) the subject of a
 commercial offer for sale and (2) ready for patenting. Pfaff
 v. Wells Elecs., Inc., 525 U.S. 55, 67 (1998). “The invention
 that is the subject matter of the offer for sale must satisfy
 each claim limitation of the patent,” and “it may do so in-
 herently.” Scaltech, Inc. v. Retec/Tetra, LLC, 269 F.3d
 1321, 1329 (Fed. Cir. 2001). Because anticipation is a ques-
 tion of fact, summary judgment of invalidity under the on-
 sale bar is only proper “if no reasonable jury could find that
 the patent is not anticipated” by the on-sale product. Te-
 lemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316,
 1327 (Fed. Cir. 2001).
     On appeal, Zinus argues that multiple disputed facts
 preclude summary judgment. Zinus argues, as it did be-
 low, that there is a factual dispute over whether the Fusion
 assembly instructions apply to the as-sold Mersin bed, cit-
 ing the testimony from Ms. Hunting that those instructions
 could have been placed in the Mersin box by mistake as
 well as Ms. Hunting’s interpretation of the photo from the
 inspection report. Cap Export defends the district court’s
 judgment, arguing that Ms. Tan’s testimony establishes
 that the two beds are one and the same. We agree with
 Zinus that there are genuine disputes of material fact. In-
 deed, there are factual disputes regarding whether the Fu-
 sion bed and Mersin bed are the same structurally,
 whether the Fusion instructions describe the structure of
 the as-sold Mersin bed, and what exactly the ambiguous
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 CAP EXPORT, LLC   v. ZINUS, INC.                            9

 photo of the Mersin bed depicts. Accordingly, summary
 judgment was improperly granted.
     The district court reviewed the evidence and concluded
 that no reasonable jury could find that the Fusion instruc-
 tions do not apply to the as-sold Mersin bed. To do so, how-
 ever, the court had to make factual inferences in Cap
 Export’s favor. For instance, the court inferred from
 Ms. Tan’s testimony that the PC001 factory code must ap-
 ply to the Fusion bed, demonstrating that the Fusion and
 Mersin beds are the same. Summary Judgment Op.,
 542 F. Supp. 3d at 981. While a jury could infer this con-
 clusion from Ms. Tan’s testimony, this is not the only infer-
 ence one could reasonably draw given the vague manner in
 which Ms. Tan testified. Indeed, Ms. Tan did not testify
 that the Fusion bed had a PC001 factory code; rather, this
 must be inferred from her other testimony. Such an infer-
 ence would favor the movant, Cap Export, as opposed to the
 non-movant, Zinus, which is procedurally improper on
 summary judgment. Anderson v. Liberty Lobby, Inc.,
 477 U.S. 242, 255 (1986) (at summary judgment, “the
 weighing of the evidence[] and the drawing of legitimate
 inferences from the facts are jury functions,” “[t]he evi-
 dence of the non-movant is to be believed, and all justifiable
 inferences are to be drawn in his favor”).
     The district court also ignored Ms. Hunting’s declara-
 tion, which contained factual assertions that tend to under-
 mine the court’s factual conclusion that the Fusion
 assembly instructions apply to the Mersin bed. Taking the
 record as whole, some evidence supports a conclusion that
 the Fusion assembly instructions apply to the Mersin bed
 and some detracts from that conclusion.
      Whether the Fusion assembly instructions apply to the
 Mersin bed is no doubt material to the parties’ dispute re-
 garding whether the on-sale Mersin bed in fact satisfies all
 of the claim limitations. Should a jury agree with non-mo-
 vant Zinus and find that the Fusion assembly instructions
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 10                              CAP EXPORT, LLC   v. ZINUS, INC.

 do not apply to the Mersin bed, Cap Export would be left
 with the photograph of the Mersin bed as the only evidence
 with which to prove that the on-sale Mersin bed anticipates
 the ’123 patent claims. But what exactly that photograph
 shows is also a disputed factual question for the jury to con-
 sider. Zinus put forward testimony from Ms. Hunting and
 Mr. Lee that what is depicted in the photograph is a hole
 in the footboard for the center support rail to slide into.
 That is, record evidence could support a factual conclusion
 that neither the footboard nor the center support rail has
 the claimed connectors that attach to one another.
     In sum, while Cap Export presented strong evidence
 connecting the Fusion instructions to the Mersin bed, there
 are nonetheless genuine disputes of material fact that pre-
 clude summary judgment. On remand, however, we would
 “not foreclose the district court from entertaining a motion
 for summary judgment” on a slightly more developed fac-
 tual record “that might obviate the need for a further trial.”
 Medisim Ltd. v. BestMed, LLC, 758 F.3d 1352, 1361
 (Fed. Cir. 2014) (quoting ArcelorMittal Fr. v. AK Steel
 Corp., 700 F.3d 1314, 1326 (Fed. Cir. 2012)). The factual
 disputes here relate to very targeted issues, e.g., whether
 the Fusion bed and the Mersin bed are in fact one and the
 same with respect to the features claimed in the ’123 pa-
 tent. Should Cap Export produce additional evidence,
 summary judgment might well be appropriate at that time.
                         CONCLUSION
     We have considered the parties’ remaining arguments
 and are not persuaded. For the foregoing reasons, we va-
 cate the district court’s summary judgment and remand for
 further proceedings.
                VACATED AND REMANDED
                            COSTS

 No costs.