Court Opinion

ID: 212081
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:34:58+00
Date Added: 2024-06-11T17:28:10.058812
License: Public Domain

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition
                   is not citable as precedent. It is a public record.

United States Court of Appeals for the Federal Circuit

                                    04-1007, -1008

                             ISCO INTERNATIONAL, INC.,

                                                      Plaintiff-Appellant,

                                           v.

                           CONDUCTUS, INC., and
                    SUPERCONDUCTOR TECHNOLOGIES, INC.,

                                                      Defendants-Cross-Appellants.

                             _______________________

                             DECIDED: February 3, 2005
                             _______________________

Before LOURIE, Circuit Judge, ARCHER, Senior Circuit Judge, and PROST, Circuit
Judge.

LOURIE, Circuit Judge.

      ISCO International, Inc. (“ISCO”) appeals from the decision of the United States

District Court for the District of Delaware: (1) denying its motion for judgment as a

matter of law (“JMOL”), thereby sustaining a jury verdict in favor of Conductus, Inc. and

Superconductor Technologies, Inc. (collectively, “the defendants”) holding the asserted

claims of ISCO’s United States Patent 6,263,215 to be invalid and not infringed; and (2)

adopting the jury’s advisory determination that the ’215 patent is unenforceable due to

inequitable conduct. ISCO Int’l, Inc. v. Conductus, Inc., 279 F. Supp. 2d 489 (D. Del.
2003) (“Decision on Appeal”). The defendants cross-appeal from the decision granting

ISCO’s motion for JMOL that it did not engage in unfair competition. Id. We affirm.

                                     BACKGROUND

      ISCO sued the defendants for allegedly infringing its ’215 patent, which is

directed to a receiver front end for a cellular base station. At controversy are claim

limitations pertaining to a set of cryogenically-cooled components—RF filters made from

high-temperature superconducting material, and low-noise amplifiers—coupled to an

automatic bypass circuit for routing signals around those components in the event of a

cooling failure. Claim 10, the only claim at issue on appeal, reads as follows:

      A receiver front end for receiving wireless signals on a plurality of
      channels, the receiver front end comprising:
           a plurality of planar filters for filtering a corresponding plurality of RF
      signals corresponding to a plurality of channels to form a corresponding
      plurality of filtered RF signals;
           a corresponding plurality of amplifiers for amplifying the plurality of
      filtered RF signals;
           a cryogenic cooler for cryogenically cooling the plurality of filters and
      amplifiers, the cryogenic cooler having a cooling member being configured
      to cool simultaneously the plurality of planar filters and the plurality of
      planar amplifiers; and
           a switched bypass circuit around the receiver front end and one or
      more sensors, wherein in a first mode when the one or more sensors
      measure acceptable operational parameters the bypass circuit is
      unswitched such that RF signals pass through the plurality of filters and
      amplifiers in the cryogenic cooler and not through the bypass circuit and in
      a second mode when the one or more sensors measure at least one
      unacceptable operational parameter the bypass circuit is switched and RF
      signals pass through the bypass circuit and not through the plurality of
      filters and amplifiers in the cryogenic cooler.

’215 patent, col. 20, ll. 41-65 (emphases added).

      The case was tried to a jury, which returned a verdict in favor of the defendants;

the asserted claims were found to be invalid for obviousness, not infringed, and

unenforceable for inequitable conduct. The jury also found in favor of the defendants on

04-1007, -1008                               2
their counterclaim that ISCO engaged in unfair competition. Arguing that the verdict

was not supported by substantial evidence, ISCO moved for JMOL and for a new trial.

The district court granted ISCO’s motion for JMOL only on the unfair competition claim,

but sustained the verdict of invalidity and noninfringement, and adopted the jury’s

advisory conclusion of unenforceability for inequitable conduct. Notwithstanding the

inequitable conduct determination, the district court did not find the case exceptional,

and accordingly denied the defendants’ motion for attorney fees under 35 U.S.C. § 285.

      On appeal, ISCO challenges the district court’s denial of JMOL on the issues of

invalidity, noninfringement, and unenforceability, while the defendants cross-appeal

from the ruling granting JMOL in overturning the jury’s verdict on unfair competition.

The denial of attorney fees is not being appealed. We have jurisdiction pursuant to 28

U.S.C. § 1295(a)(1).

                                    DISCUSSION

      On appeal from a judgment denying a motion for JMOL following a jury trial, an

appellant “must show that the jury’s findings, presumed or express, are not supported

by substantial evidence or, if they were, that the legal conclusion(s) implied from the

jury’s verdict cannot in law be supported by those findings.” Perkin-Elmer Corp. v.

Computervision Corp., 732 F.2d 888, 893 (Fed. Cir. 1984). Accordingly, fact findings

reviewed under the substantial evidence standard require affirmance unless it can be

shown that no reasonable juror could have reached such a result. See id. Substantial

evidence is “such relevant evidence as a reasonable mind might accept as adequate to

support a conclusion.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). Given

the highly deferential nature of the substantial evidence standard and because the

04-1007, -1008                             3
issues are “highly fact-specific and evidence-oriented,” this case provides yet another

illustration of “the difficulty appellants face in attempting to persuade a court to reverse a

jury verdict involving questions of fact.” In re Hayes Microcomputer Prods., Inc. Patent

Litig., 982 F.2d 1527, 1532 (Fed. Cir. 1992).

A.     Invalidity

       ISCO attacks the verdict of invalidity primarily on two grounds: (1) that the jury

was not entitled to consider the ARPA report1 as prior art; and (2) that the jury could not

have reasonably reached its conclusion of obviousness based on the evidence

presented at trial. We address each of these contentions in turn.

       1.     The ARPA Report as Prior Art

       As a threshold matter, ISCO accuses the district court of having erred in denying

its motion for JMOL by allegedly imposing on ISCO the burden of proving that the ARPA

report was not prior art. While unfortunate, any mischaracterization of the burden of

proof in an opinion, by itself, does not warrant reversal. See Stratoflex, Inc. v. Aeroquip

Corp., 713 F.2d 1530, 1540 (Fed. Cir. 1983) (“We sit to review judgments, not

opinions.”). “[I]f the district court failed to properly place the burden of proof, this court

will do so.” Union Carbide Corp. v. Am. Can Co., 724 F.2d 1567, 1573 (Fed. Cir. 1984).

In order to prevail, the appellant must therefore show that “the result, as opposed to the

reasoning, is erroneous as a matter of law.” Id. at 1573-74.

       Claiming a conception date no later than December 1994, ISCO insists that the

ARPA report, which was first publicly presented in February 1995, was not prior art. In

       1
             Advanced Research Projects Agency (“ARPA”), “HTSC Dual Use
Applications Survey–Final Report: HTS Filter Applications: Cellular Telephone Base
Station Equipment,” presented Feb. 7, 1995. (J.A. 5142-5235).

04-1007, -1008                                4
support of this contention, ISCO refers to various drafts of a December 1994 proposal,

entitled “Cryo-REACHTM Base Station Prototype,” that were prepared by ISCO’s

predecessor and which allegedly disclosed the device of claim 10.

       We agree with the trial court that the ARPA report was prior art because the

December 1994 drafts did not evidence a conception of the claimed invention.

“Conception is the formation in the mind of the inventor, of a definite and permanent

idea of the complete and operative invention, as it is hereafter to be applied in practice.”

Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376 (Fed. Cir. 1986)

(internal quotation marks omitted) (emphases added). The record reflects that ISCO’s

predecessor did not have a “definite and permanent idea” of the “complete” invention

defined in claim 10 at a time antedating the ARPA report. Specifically, the December

1994 drafts indicate that ISCO’s predecessor did not recognize or appreciate the

automatic bypass circuit as being part of the invention then conceived. “It is well-settled

that conception . . . cannot be established nunc pro tunc.                There must be

contemporaneous recognition and appreciation of the invention represented by the

[claims].” Breen v. Henshaw, 472 F.2d 1398, 1401 (CCPA 1973). Because ISCO’s

predecessor failed to appreciate certain inventive features at the time of the alleged

conception, ISCO cannot rely on a later recognition of those features to retroactively

cure an incomplete conception.

       That ISCO’s contentions effectively amount to an argument for nunc pro tunc

conception is apparent upon reviewing a December 14, 1994 draft marked “Plaintiff Trial

Exhibit: PTX-362” (J.A. 1725-1729), which declares:

       The REACHTM receiver proposed herein is unique in that it involves:

04-1007, -1008                               5
              (1) fully integrated thin film superconducting components,
              (2) ferroelectrically-tuned filter and receiver components,
              (3) integrated, GaAs cryo-amplifiers,
              (4) low noise oscillator, mixer, downconverter,
              (5) frequency-hopping capability, and
              (6) compact cryo-packaging.

PTX-362 at 3 (J.A. 1726) (emphases added).           Whereas the filters, amplifiers, and

cryogenic cooler required by claim 10 are duly listed as “unique” features, the automatic

bypass circuit is conspicuously absent. Rather, that feature is listed elsewhere:

       The [Technology Reinvestment Program] proposal will be to build and test
       the 2 GHz “cold front end” components, integrate the components into
       complete sub-system [sic], add lightning protection and automatic bypass
       circuitry as needed to meet PCS service provider requirements, perform
       the system integration, address manufacturing issues, and design system
       control hardware/software.

Id. at 4 (J.A. 1727) (emphasis added). Here, the drafter of the proposal apparently did

not view the automatic bypass circuit to be an essential component, as it was to be

added only “as needed,” just like “lightning protection.” The lack of appreciation for the

bypass feature as an inventive element is further revealed where, in a list of “product

engineering issues” to be resolved, the entry specifically describing the bypass—i.e.,

“(5) bypass circuitry that automatically routes signal flow around the REACHTM receiver

if either the electronics or the compressor fails”—is crossed out in its entirety and is

replaced with an entry for “24 V power supply circuitry” in subsequent drafts, such as

the one dated December 19, 1994 marked “Plaintiff Trial Exhibit: PTX-299.” Compare

PTX-362 at 4-5 (J.A. 1727-28) with PTX-299 at 10-11 (J.A. 1542-43). Given that the

most detailed—albeit short—description of the automatic bypass circuit could not

survive an editorial revision, that feature can hardly be considered part of a “definite and

permanent” conception of the invention of claim 10.

04-1007, -1008                               6
       In subsequent drafts of the December 1994 proposal, the most substantive

description of the automatic bypass circuit that remains is the previously-noted cursory

mention that a bypass can be added “as needed,” but that provides an insufficient basis

for extrapolating therefrom the detailed limitations in claim 10 pertaining to the specific

operational modes of the bypass, its sensors, and the signal path. See Singh v. Brake,

317 F.3d 1334, 1340 (Fed. Cir. 2002) (“A conception must encompass all limitations of

the claimed invention . . .”).

       In short, the deletion of details pertaining to, and the cursory mention of, the

automatic bypass circuit in the draft proposals are inconsistent with the argument that

the conception to be proven by those drafts included that element as an inventive

feature. Substantial evidence thus supports the jury’s implicit finding, see Perkin-Elmer

Corp., 732 F.2d at 893 (noting that “the law presumes the existence of findings

necessary to support the verdict the jury reached”), that the December 1994 draft

proposals fail to establish the conception date for claim 10, such that the ARPA report

was prior art.

       2.        Obviousness

       Even if the ARPA report was prior art, ISCO contends that it is not an invalidating

reference that could have supported the jury’s finding of obviousness because the

record allegedly lacks evidence of a motivation to modify its teachings to obtain the

device of claim 10. For similar reasons, ISCO disputes the evidentiary significance of

another prior art reference presented at trial, the Robertson article,2 which it deems to

       2
              Mark A. Robertson, “Two applications of HTS technology on an airborne
platform,” in Proceedings of the International Society for Optical Engineering (SPIE):
High-Tc Microwave Superconductors and Applications, Jan. 1994. (J.A. 5257-5264).

04-1007, -1008                              7
be non-analogous art that was not entitled to consideration by the jury in its

obviousness inquiry.    We disagree; the record shows that the jury could have

reasonably considered these references to be invalidating prior art.

      Regarding the alleged deficiencies of the ARPA report, ISCO insists that it does

not suggest the use of cryogenically-cooled amplifiers as required by claim 10, and that

it fails to teach the use of an automatic bypass circuit. However, the suggestion or

motivation to modify a reference may be derived from the knowledge of those skilled in

the art or from the nature of the problem to be solved. See Pro-Mold & Tool Co. v.

Great Lakes Plastics, Inc., 75 F.3d 1568, 1573 (Fed. Cir. 1996). Considerable evidence

was presented at trial of the knowledge of a skilled artisan in the relevant art and the

nature of the problem, from which the jury could have reasonably discerned a

motivation to modify the ARPA report to obtain the invention of claim 10.

      Specifically, the jury was presented with prior art references showing that cooled

amplifiers, automatic bypass circuitry, and their benefits were well-known in the art at

the time of invention—e.g., the Robertson article mentions the noise-reducing effect of

using cryogenically-cooled amplifiers. (J.A. 5257). The jury also heard testimony from

at least two expert witnesses who explained how a skilled artisan reading the ARPA

report would have found it obvious to modify its teachings to include cooled amplifiers

and an automatic bypass. The ARPA report itself focuses on the problem of cryocooler

reliability and suggests a switchable bypass as a possible solution. (J.A. 5232). Given

the knowledge in the art presented at trial and the nature of the problem to be solved as

articulated in the ARPA report, the jury’s conclusion that claim 10 would have been

04-1007, -1008                              8
obvious in view of the modified teachings of the ARPA report was supported by

substantial evidence.

           Turning to the Robertson article, ISCO argues that it is non-analogous art

because it is directed to military—not cellular—applications.        We find this basis for

disqualifying the Robertson article to be without merit in view of the fact that the

December 1994 draft proposals, on which ISCO has attempted to establish a

conception date for claim 10, are directed to a project for developing “front end

hardware for application to civilian wireless communications and military EW and mobile

communications systems.” See, e.g., PTX-299 at 1 (J.A. 1533) (emphases added). As

for its role in the obviousness inquiry, the Robertson article teaches all the key

limitations of the device of claim 10: the simultaneous cooling of filters and amplifiers,

and the addition of a bypass relay to safeguard the system in the event of a cooling

failure.     While ISCO disputes whether the bypass relay disclosed in the Robertson

article is necessarily automatic in operation, the jury could have reasonably concluded,

based on the context provided by the evidence presented at trial of the knowledge in the

art, that the Robertson article would have rendered claim 10 obvious, either alone or in

combination with the ARPA report.

           In sum, our review of the record under the substantial evidence standard

accorded to the jury’s conclusions provides us with no grounds for disturbing the verdict

of invalidity.

B.         Other Issues

           Because we are affirming the judgment of invalidity, the issue of infringement has

been rendered moot. Lough v. Brunswick Corp., 86 F.3d 1113, 1123 (Fed. Cir. 1996)

04-1007, -1008                                 9
(“No further public interest is served by our resolving an infringement question after a

determination that the patent is invalid.”). Nor do we reach the inequitable conduct

issue in light of the district court’s denial of the defendants’ request for attorney fees.

Cf. Buildex, Inc. v. Kason Industries, Inc., 849 F.2d 1461, 1466 (Fed. Cir. 1988)

(remanding case, after holding patent invalid, in order to allow district court to decide

whether case is exceptional for purpose of fee award). As the effect of unenforceability

on a patent held invalid is only meaningful as a basis for the award of attorney fees, the

denial of which is not herein appealed, the issue is moot.

       As for the defendants’ cross-appeal, we affirm the district court’s grant of JMOL

on the unfair competition claim for reasons set forth in its detailed opinion, in particular,

that the defendants did not prove bad faith in the enforcement of the patent. Moreover,

ISCO, as a later assignee of the patent, was not a party to the alleged inequitable

conduct.

       We have considered the parties’ other arguments and conclude that they are

either unpersuasive or unnecessary for resolution of this appeal.

                                      CONCLUSION

       For the foregoing reasons, we conclude that the district court did not reversibly

err, and accordingly affirm.

04-1007, -1008                               10