Court Opinion

ID: 4516623
Source: CourtListenerOpinion
Date Created: 2020-03-16 16:00:52.866176+00
Date Added: 2024-06-11T09:24:56.100227
License: Public Domain

Case: 18-1904   Document: 49     Page: 1   Filed: 03/16/2020

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

   HAFCO FOUNDRY AND MACHINE COMPANY,
             INCORPORATED,
              Plaintiff-Appellee

                            v.

   GMS MINE REPAIR AND MAINTENANCE, INC.,
              Defendant-Appellant
             ______________________

                       2018-1904
                 ______________________

    Appeal from the United States District Court for the
 Southern District of West Virginia in No. 1:15-cv-16143,
 Senior Judge David A. Faber.
                 ______________________

                 Decided: March 16, 2020
                 ______________________

    ANDREW G. FUSCO, Bowles Rice, LLP, Morgantown,
 WV, argued for plaintiff-appellee. Also represented by
 JEFFREY A. RAY.

     JAMES R. LAWRENCE, III, Michael Best & Friedrich, Ra-
 leigh, NC, argued for defendant-appellant. Also repre-
 sented by ANTHONY J. BILLER.
                 ______________________

    Before NEWMAN, CHEN, and STOLL, Circuit Judges.
Case: 18-1904      Document: 49     Page: 2   Filed: 03/16/2020

 2         HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR

            Opinion of the court filed PER CURIAM.
     Opinion concurring in part, dissenting in part filed by
                   Circuit Judge NEWMAN.
 PER CURIAM.
      Hafco Foundry and Machine Company, Inc. (“Hafco”) is
 the owner of United States Design Patent No. D681,684
 (“the ’684 patent”), issued on May 7, 2013 for a “Rock Dust
 Blower.” This device is used to distribute rock dust in areas
 such as coal mines, where rock dust is applied to the mine’s
 interior surfaces, to control the explosive hazards of coal
 dust. Hafco developed and manufactured this device, and
 in April 2014 contracted with Pioneer Conveyer LLC, an
 affiliate of GMS Mine Repair and Maintenance, Inc. (to-
 gether “GMS”), whereby GMS would serve as distributor of
 Hafco’s rock dust blower for sale to mining customers. In
 May 2015 Hafco terminated this arrangement, stating that
 performance was poor. GMS then produced a rock dust
 blower for sale to mining customers.
     Hafco sued GMS for infringement of the ’684 patent.
 Trial was to a jury. GMS filed a pre-trial motion for patent
 invalidity, and the district court found that GMS had not
 presented any evidence that might establish invalidity.
 The jury then found GMS liable for willful infringement,
 and awarded damages of $123,650. The district court en-
 tered judgment on the verdict.
     Both parties filed post-trial motions. On Hafco’s mo-
 tion the court entered a permanent injunction against in-
 fringement. On GMS’ motion the district court remitted
 the damages award to zero, as not in accordance with the
 law of patent damages. The court offered a new trial on
 damages, and stayed the new trial pending this appeal. 1

      1Hafco Foundry & Mach. Co. v. GMS Mine Repair
 & Maint., Inc., Civ. No. 1:15-16143, 2018 WL 1582728, at
Case: 18-1904     Document: 49     Page: 3    Filed: 03/16/2020

 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR            3

 GMS raises two issues on appeal: whether it is entitled to
 judgment as a matter of law on the issue of infringement;
 and, in the alternative, whether it is entitled to a new trial
 on the issue of infringement due to errors of law in the jury
 instruction. Hafco did not cross appeal on any issue relat-
 ing to damages.
      We affirm the judgment of infringement and the dis-
 trict court’s denial of GMS’ request for a new trial, the only
 two issues raised by GMS on appeal. We remand to the
 district court for further proceedings consistent with this
 opinion, including any proceedings necessary for a final
 judgment on damages.
     Standards of Review
     We review the denial of a motion for judgment as a
 matter of law (“JMOL”) under the law of the regional
 circuit where the appeal from the district court would
 normally lie. Orion IP, LLC v. Hyundai Motor Am., 605
 F.3d 967, 973 (Fed. Cir. 2010). In the Fourth Circuit, the
 district court’s ruling on a motion for JMOL receives
 plenary review. Anderson v. G.D.C., Inc., 281 F.3d 452, 457
 (4th Cir. 2002). The “decision to grant or deny a new trial
 is within the sound discretion of the district court, and we
 respect that determination absent an abuse of discretion.”
 Cline v. Wal-Mart Stores, Inc., 144 F.3d 294, 301 (4th Cir.
 1998).
     On review of the jury’s factual findings, the evidence is
 viewed in the light most favorable to the jury’s verdict.
 Dotson v. Pfizer, 558 F.3d 284, 292 (4th Cir. 2009). The

 *8–12 (S.D. W. Va. Mar. 30, 2018) (“Dist. Ct. Op.”); id., 2018
 WL 1733986 (S.D. W. Va. Apr. 10, 2018) (“Dist. Ct. Order”);
 id., 2018 WL 1786588 (S.D. W. Va. Apr. 12, 2018)
 (“Amended Order”); id., 2018 WL 3150353 (S.D. W. Va.
 June 26, 2018) (“Recon. Op.”).
Case: 18-1904    Document: 49      Page: 4    Filed: 03/16/2020

 4       HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR

 Fourth Circuit, in which this trial was held, “accord[s] the
 utmost respect to jury verdicts and tread[s] gingerly in
 reviewing them.” Lack v. Wal-Mart Stores, Inc., 240 F.3d
 255, 259 (4th Cir. 2001); Price v. City of Charlotte, 93 F.3d
 1241, 1250 (4th Cir. 1996). See United States v. Foster, 507
 F.3d 233, 244 (4th Cir. 2007) (“A jury’s verdict must be
 upheld on appeal if there is substantial evidence in the
 record to support it.”).
                               I
                      THE ’684 PATENT
     The ’684 patent claims a design for a rock dust blower,
 as shown in the drawings: Figure 1 is a side view of the
 device, Figure 4 is a top view of the lid, and Figure 5 is a
 bottom view of the connector and stand:

      GMS filed a pre-trial motion challenging patent valid-
 ity on the ground that the ’684 patent is not a proper design
 patent because all the elements of the device are func-
 tional. GMS alternatively argued that the claim of the ’684
 patent should be construed to exclude all functional
Case: 18-1904      Document: 49      Page: 5     Filed: 03/16/2020

 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR               5

 elements of the claimed design. The district court denied
 the motion.
     In its proposed jury instructions, GMS included an in-
 struction that stated “[w]here a design contains both func-
 tional and non-functional elements, a design patent
 protects only the non-functional aspects of the design as
 shown in the patent drawings, if there are any such non-
 functional aspects.” This instruction was not included in
 the final jury instructions, and GMS neither objected to the
 jury instructions nor presented evidence on the functional
 aspects of the ’684 patent at trial.
      In its post-trial motion, GMS argued that the design of
 its rock dust blower is plainly dissimilar to the claimed de-
 sign, that there were errors of law in the jury instructions,
 and that it was unfairly prejudiced by its inability to intro-
 duce evidence of invalidity at trial. The district court ruled
 that substantial evidence supported the jury verdict of in-
 fringement, that the jury instructions were proper, and
 that it had not in fact precluded GMS from arguing inva-
 lidity at trial. Specifically, the district court stated that “If
 GMS wanted to argue the invalidity of the patent to the
 jury, it needed to offer evidence on this point. The court
 did not prohibit GMS from doing so.” Dist. Ct. Op. at 21.
 GMS did not argue that the functional aspects of the
 claimed design should have been excluded from the
 infringement analysis, or that it was prevented from
 making this argument at trial.
     On appeal, GMS argues for the first time that, when
 certain functional and prior art aspects of the ’684 patent
 are excluded, the design of its rock dust blower does not
 infringe the claimed design of the ’684 patent as a matter
 of law. GMS does not challenge on appeal the district
 court’s invalidity or claim construction rulings. Because
 GMS never made this non-infringement argument at the
 district court, nor presented relevant evidence on the
Case: 18-1904   Document: 49   Page: 6   Filed: 03/16/2020
Case: 18-1904   Document: 49     Page: 7    Filed: 03/16/2020

 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR          7

    Infringement - Generally
    Patent law gives the owner of a valid patent the
    right to exclude others from making, using, offering
    to sell or selling the patented design within the
    United States during the term of the patent. Any
    person or business entity that has engaged in any
    of those acts without the patent owner’s permission
    infringes the patent. Here, Hafco alleges that
    GMS’ rock dust blower infringes the ’684 design pa-
    tent.
    You have heard evidence about both Hafco’s com-
    mercial rock dust blower and GMS’ accused rock
    dust blower. However, in deciding the issue of in-
    fringement, you may not compare GMS’ rock dust
    blower to Hafco’s commercial rock dust blower. Ra-
    ther, you must only compare GMS’ accused rock
    dust blower to the ’684 design patent when making
    your decision regarding infringement.
    Direct Infringement
    To determine infringement, you must compare the
    overall appearances of GMS’ accused design to the
    design claimed in the Hafco ’684 Patent. If you find
    that, by a preponderance of evidence, the overall
    appearance of GMS’ accused rock dust blower is
    substantially the same as the overall appearance of
    Hafco’s claimed design, then you must find that the
    accused design infringes the Hafco ’684 design pa-
    tent.
    Two designs are substantially the same if, in the
    eye of an ordinary observer, giving such attention
    as a purchaser usually gives, the resemblance be-
    tween the two designs is such as to deceive such an
    observer, inducing him to purchase one supposing
    it to be the other. An ordinary observer is a person
    who buys and uses the product at issue. You do not
Case: 18-1904     Document: 49      Page: 8     Filed: 03/16/2020

 8        HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR

     need, however, to find that any purchasers actually
     were deceived or confused by the appearance of the
     GMS rock dust blower.
     In conducting this analysis, keep in mind that mi-
     nor differences between the patented and accused
     designs should not prevent a finding of infringe-
     ment. In weighing your decision, you should con-
     sider any perceived similarities or differences.
     When evaluating designs, be it the claimed design,
     accused design, or prior art designs, you should al-
     ways focus on the overall appearance of the design,
     and not individual features.
     While these guidelines may be helpful to your anal-
     ysis, please keep in mind that the sole test for in-
     fringement is whether you believe that the overall
     appearance of the accused GMS rock dust blower
     design is substantially the same as the overall ap-
     pearance of Hafco’s ’684 design patent. If you find
     by a preponderance of the evidence that GMS’ ac-
     cused rock dust blower is substantially the same as
     the ’684 design patent, then you must find that the
     accused GMS product infringes the Hafco ’684 de-
     sign patent.
 Jury instructions, J.A. 484–88. GMS states that the jury
 instructions are flawed in two respects: first, that the in-
 structions “incompletely and prejudicially abridg[ed] the
 Gorham test,” referring to Gorham Co. v. White, 81 U.S.
 511, 528 (1871). Dist. Ct. Op. at 19 (quoting GMS’ Motion
 for JMOL). Second, GMS states that the jury should have
 been instructed “that the hypothetical ordinary purchaser
 is to view the patented and accused designs ‘in the context
 of the prior art.’” GMS Br. 32.
     To challenge a jury instruction, it must be established
 that “(1) the district court erred; (2) the error is plain; ‘(3)
 the error affects substantial rights; and (4) . . . the error
Case: 18-1904     Document: 49     Page: 9    Filed: 03/16/2020

 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR            9

 seriously affects the fairness, integrity or public reputation
 of judicial proceedings.’” United States ex rel. Oberg v. Pa.
 Higher Educ. Assistance Agency, 912 F.3d 731, 738 (4th
 Cir. 2019) (citing Gregg v. Ham, 678 F.3d 333, 338 (4th Cir.
 2012)). Objection to the presence or absence of an
 instruction must be timely raised during the trial
 proceeding, and the correct instruction offered and
 rejected. The Federal Rules of Civil Procedure provide:
     Rule 51(d)(1). A party may assign as error: (A) an
     error in an instruction actually given, if that party
     properly objected; or (B) a failure to give an
     instruction, if that party properly requested it
     and—unless the court rejected the request in a
     definitive ruling on the record—also properly
     objected.
 See Bunn v. Oldendorff Carriers GmbH & Co. KG, 723 F.3d
 454, 468–69 (4th Cir. 2013) (A party “fail[s] to preserve a
 challenge to the jury instructions” when it “has provided no
 record of an objection to the district court”). The Rules also
 provide that a court may consider a plain error in the
 instructions that has not been preserved if the error affects
 substantial rights. Fed. R. Civ. P. 51(d)(2).
      GMS concedes that it “does not contend it made a
 proper objection to the district court’s jury instructions at
 trial.” GMS Br. 30. However, GMS states that since the
 instructions were incorrect in law, GMS is entitled to a new
 trial, citing Rule 51(d)(2). The Fourth Circuit explained in
 Bunn that “[e]ven if a jury was erroneously instructed,
 however, we will not set aside a resulting verdict unless the
 erroneous instruction seriously prejudiced the challenging
 party’s case.” Bunn, 723 F.3d at 468 (emphasis in original)
 (citing Coll. Loan Corp. v. SLM Corp., 396 F.3d 588, 595
 (4th Cir. 2005)).
     GMS first assigns error to the jury instructions on the
 “ordinary observer”:
Case: 18-1904    Document: 49      Page: 10    Filed: 03/16/2020

 10       HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR

                 1. The Ordinary Observer
     Infringement of a design patent is determined from the
 viewpoint of the ordinary observer, comparing the patented
 design with the article’s overall appearance. Gorham, 81
 U.S. at 528 (“[I]f, in the eye of an ordinary observer, giving
 such attention as a purchaser usually gives, two designs
 are substantially the same, if the resemblance is such as to
 deceive such an observer, inducing him to purchase one
 supposing it to be the other, the first one patented is
 infringed by the other.”).
     The jury instructions define the ordinary observer as
 “a person who buys and uses the product at issue.” J.A.
 485. GMS made no objection to this definition. Although
 GMS now argues that “GMS’ rights were substantially
 affected by the district court’s failure to include a complete
 description of the ordinary purchaser,” GMS Br. 33, we are
 not directed to any request for such instruction or any
 explanation of the purported flaw.
      GMS also states that the jury should have been
      instructed that “small differences between the
      accused and the claimed design” will avoid
      infringement. GMS Br. 32–33. Such an instruc-
      tion was not requested at the trial. Nor would it
      have been correct, for the patented and accused
      designs need not be identical in order for design
      patent infringement to be found. Braun Inc. v.
      Dynamics Corp. of Am., 975 F.2d 815, 820 (Fed.
      Cir. 1992). The controlling inquiry is how the
      ordinary observer would perceive the article.
      OddzOn Prods., Inc. v. Just Toys, Inc., 122 F.3d
      1396, 1405 (Fed. Cir. 1997); see also Contessa Food
      Prods., Inc. v. Conagra, Inc., 282 F.3d 1370, 1377
      (Fed. Cir. 2002) abrogated on other grounds
      by Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d
      665 (Fed. Cir. 2008) (competing designs can be
      substantially similar despite minor differences).
Case: 18-1904    Document: 49     Page: 11    Filed: 03/16/2020

 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR         11

     The jury was correctly instructed that the question is
 how the ordinary oberver would view the article as a whole.
 See Ethicon Endo-Surgery, Inc. v. Covidien, Inc., 796 F.3d
 1312, 1335 (Fed. Cir. 2015) (“Differences [between the
 claimed design and accused design] must be evaluated in
 the context of the claimed design as a whole, and not in the
 context of separate elements in isolation.”); Amini
 Innovation Corp. v. Anthony Cal., Inc., 439 F.3d 1365, 1372
 (Fed. Cir. 2006) (an element-by-element comparison,
 without consideration of the ordinary observer inquiry to
 the overall design, is procedural error). GMS has failed to
 establish that there was any error in the jury instructions
 on the “ordinary observer,” much less plain error
 warranting a new trial.
           2. Differences From the Prior Art
     GMS states that the jury should have been instructed
 to “familiarize yourself with each of the prior art designs
 that have been brought to your attention,” citing the IPO
 Model Design Patent Jury Instructions at 25 (2010). GMS
 Br. 35–36. Hafco responds that GMS presented “not . . .
 even a scintilla” of prior art to the jury. Hafco Br. 3. GMS
 does not state otherwise, arguing only that a 55-gallon
 drum is a standard size.
      Although GMS states that “[a] properly instructed jury
 would have been drawn to the same things an ordinary ob-
 server would be drawn to—namely the ‘aspects of the
 claimed design that differ from the prior art,’” GMS Br. 18
 (citing Egyptian Goddess, 543 F.3d at 676), the record
 shows no presentation of prior art, and Hafco states that
 GMS “never submitted a jury instruction regarding same.”
 Hafco Br. 3. GMS does not state otherwise.
     Given that there was no prior art introduced at trial,
 no attempt by GMS to introduce the prior art, and no
 proposed jury instruction on this issue, the purported
 exclusion of this instruction cannot be error. Accordingly,
 GMS has not demonstrated that a new trial is warranted.
Case: 18-1904     Document: 49    Page: 12    Filed: 03/16/2020

 12       HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR

                         CONCLUSION
      The district court’s judgment is affirmed.
                AFFIRMED AND REMANDED
Case: 18-1904    Document: 49      Page: 13    Filed: 03/16/2020

    United States Court of Appeals
        for the Federal Circuit
                   ______________________

    HAFCO FOUNDRY AND MACHINE COMPANY,
              INCORPORATED,
               Plaintiff-Appellee

                              v.

   GMS MINE REPAIR AND MAINTENANCE, INC.,
              Defendant-Appellant
             ______________________

                         2018-1904
                   ______________________

    Appeal from the United States District Court for the
 Southern District of West Virginia in No. 1:15-cv-16143,
 Senior Judge David A. Faber.
                 ______________________

 NEWMAN, Circuit Judge, concurring in part, dissenting in
 part.
      I concur in the court’s decision. I write separately be-
 cause I would resolve the matter of damages, for when the
 facts are not disputed the jury’s application of incorrect law
 is subject to correction by the court, particularly when such
 correction implements the jury’s intent. I would accept
 Hafco’s proposed remittitur to $110,000, on undisputed ap-
 plication of the correct law.
     The measure of damages
   The jury awarded damages of $123,650, measured by
 GMS’s infringing sales. Hafco’s lost profits were $110,000.
Case: 18-1904    Document: 49      Page: 14    Filed: 03/16/2020

 2       HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR

 These facts were attested at the trial, and are not disputed.
 The jury was correctly instructed on the law of patent dam-
 ages; the instructions included:
     A plaintiff in a design patent case can elect to prove
     either actual damages, known as compensatory
     damages, or it may elect to prove the amount of
     defendant’s profits from the sale of the infringing
     product as its measure of recovery. With respect to
     actual damages, if you believe GMS infringed the
     ’684 Patent, Hafco is entitled to receive damages
     adequate to compensate it for infringement
     beginning on April 20, 2015 to the present. Those
     damages can be in the form of lost profits or a
     reasonable royalty. The term lost profits means
     any and all actual reduction in business profits
     Hafco suffered as the result of GMS’ infringement
     of the ’684 Patent. . . .
     In this case, Hafco seeks to recover lost profits
     resulting from GMS’ infringement of the ’684
     Patent. If you conclude that Hafco has proved that
     it lost profits because of GMS’ infringement, the
     lost profits you award should be the amount that
     Hafco would have made on any sales that Hafco
     lost because of the infringement.
 J.A. 487–489. These instructions were not challenged at
 trial, and are not challenged on appeal.
     The district court agreed with GMS, on post-trial mo-
 tion, that the $123,650 jury damages award does not “un-
 der any conceivable view of the evidence” represent Hafco’s
 lost profits. Hafco Foundry & Mach. Co. v. GMS Mine Re-
 pair & Maint., Inc., Civ. No. 1:15 -16143, 2018 WL
 1582728, at *8 (S.D. W.Va. Mar. 30, 2018) (“Dist. Ct. Op.”).
 All parties agree that the correct standard is Hafco’s lost
 profits. The district court remitted the damages to zero,
 and offered a new trial on damages. Hafco argues that “any
Case: 18-1904    Document: 49     Page: 15    Filed: 03/16/2020

 HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR                3

 remittitur of the damage award should have been to an
 amount no less than $110,000.00,” Hafco Br. 1–2.
      Jury damages awards, unless clearly unreasonable or
 based on error in the jury instructions, are not readily mod-
 ified. See Fox v. Gen. Motors Corp., 247 F.3d 169, 180 (4th
 Cir. 2001) (“A jury’s award of damages stands unless it is
 grossly excessive or shocking to the conscience.”) (quotation
 omitted). Hafco offers some theories why the jury could
 have measured damages by GMS’ sales, for the jury was
 not told that this evidence was irrelevant.
     Hafco acknowledges that the jury instructions limited
 damages to Hafco’s lost profits. The district court correctly
 so observed. However, Hafco suggests that remittitur to
 Hafco’s lost profits of $110,000 would be a more reasonable
 action than remittitur to zero, for $110,000 reasonably im-
 plements the jury’s verdict and intent. See Minks v. Polaris
 Indus., Inc., 546 F.3d 1364, 1371 (Fed. Cir. 2008) (“[W]here
 a portion of a verdict is for an identifiable amount that is
 not permitted by law, the court may simply modify the
 jury’s verdict to that extent and enter judgment for the cor-
 rect amount.” (quoting Johansen v. Combustion Eng’g, Inc.,
 170 F.3d 1320, 1330 (11th Cir. 1999) (citing N.Y., L.E. &
 W.R. Co. v. Estill, 147 U.S. 591 (1893)))).
     I would simply correct the district court’s judgment,
 and remit the damages award to the undisputed amount of
 $110,000. A new trial, on undisputed facts, is not needed
 to serve the purposes of the jury verdict.
     Post-Trial Motions
     In view of this expected appeal, the district court de-
 nied without prejudice Hafco’s motions for enhanced dam-
 ages, attorney fees, and interest. Enhanced damages and
 attorney fees now await resolution on remand. However,
 Federal Rule of Appellate Procedure 37(b) requires the ap-
 pellate tribunal to determine post-judgment interest. See
 Tronzo v. Biomet, Inc., 318 F.3d 1378, 1381 (Fed. Cir. 2003)
Case: 18-1904   Document: 49    Page: 16    Filed: 03/16/2020

 4       HAFCO FOUNDRY AND MACHINE CO. v. GMS MINE REPAIR

 (“[T]he responsibility and authority for [determining
 whether a party to an appeal is entitled to post-judgment
 interest] is assigned to the appellate tribunal.”). On the
 remittitur that I recommend, this aspect would require our
 attention.