[author: Chris Smith]

Note: Beginning this month, IP Law Tracker will highlight significant intellectual property decisions from the U.S. Court of Appeals for the Sixth Circuit and the U.S. District Courts for the Eastern District of Michigan and Western District of Michigan.

Sixth Circuit:

Standard Governing Attorney Fee Awards In Trademark Cases Under  15 U.S.C. § 1117(a) Should Be “Consistent” with Octane Standard

Slep-Time Entertainment Corp. v. Karaoke Kandy Store, Inc., No. 13-3117, 2015 WL 1516162 (6th Cir. Apr. 6, 2015).

Slep-Time Entertainment Corporation sued Karaoke Kandy Store, Inc, for trademark infringement. After an advisory jury concluded that Slep-Time had not proven infringement, the U.S. District Court for the Northern District of Ohio entered judgment in favor of Karaoke without entering findings of fact or conclusions of law. Slep-Time filed a motion for entry of findings under Fed. R. Civ. P. 52, and promptly filed a notice of appeal. Karaoke then filed a motion for attorney fees under 15 U.S.C. § 1117(a). The district court denied the fees motion on the grounds that it was: (1)untimely, and (2) the case was not “exceptional.”

In an opinion by Circuit Judge Karen Nelson Moore, the Sixth Circuit vacated and remanded for redetermination of the fees request. First, the court ruled that the fees request was not untimely. Although it was filed 21 days after the district court’s judgment — 7 days past the 14 days permitted under Fed. R. Civ. P. 54(d)(2)(B) — Slep-Time’s post-trial motion for findings under Rule 52 tolled the 14-day period pending resolution of the motion. Miltimore Sales, Inc. v. International Rectifier, Inc., 412 F.3d 685, 687–88 (6th Cir.2005).

Moreover, the Sixth Circuit ruled that the district court likely had applied the incorrect standard to the fees request under § 1117. After the district court’s ruling, the Supreme Court decided Octane Fitness LLC v. ICON Health & Fitness, Inc., ___U.S.___, 134 S. Ct. 1749 (2014), holding that an “exceptional case” under the fees award provision in the Patent Act, 35 U.S.C. § 285, is “simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is ‘exceptional’ in the case-by-case exercise of their discretion, considering the totality of the circumstances.” Id. at 1756. The Sixth Circuit noted that because both the patent and trademark statutes contain the identical “exceptional” case language, they should be construed consistently. “The fee-shifting provisions in § 285 and § 1117(a) are identical.  . . .  And statutes using the same language should generally be interpreted consistently.” Slip op. at *4. As a result, the court remanded to the district court to “assess the applicability” of Octane and resolve the pending motions.

Eastern District Of Michigan:

DJ Levy Holds That Preamble, Cited Advantages Are Not Read To Limit Claim Scope

Welding Innovation Solutions, Inc. v. American Axle & Mfg, Inc., No. 13-cv-13131, 2015 WL 1538006 (E.D. Mich. Apr. 6, 2015).

District Judge Judith E. Levy issued a claim construction ruling for U.S. Patent No. 5,828,028, covering methods using resistance welding and “hot forging” to join two workpieces. First, the court ruled that elements recited in the preambles of two claims were not limitations, even if they provided the antecedent basis for content in the body of the claims, because the bodies were largely duplicative of the preambles and the missing antecedent references were present in the balance of the claims by implication. “While such derivation or reliance on an antecedent basis may show that the preamble is a ‘necessary component of the claimed invention … [o]n the other hand, if the body of the claim sets out the complete invention, then the language of the preamble may be superfluous.’” Slip op. at *7, quoting from Eaton Corp. v. Rockwell Intern. Corp., 323 F.3d 1332, 1339 (Fed.Cir.2003). Second, the court ruled that a feature of a disclosed embodiment would not be read as a limitation even when the applicant identified the feature as an advantage over the prior art in the specification and prosecution history.  Instead, the court ruled that “the inventor of the patent at issue did not present a clear intention to limit the claim scope by describing the invention’s preferred embodiment.” Slip op. at *11.

DJ O’Meara Rules That Employer Owns Inventions Under Agreements When Inventions Were Not Previously Reduced To Practice

Berry v. Ford Motor Co., No. 11-10569, 2015 WL 1646657 (E.D. Mich. Apr. 14, 2015).

Berry, a former consultant and employee for Ford Motor Company, brought this action for correction of inventorship, breach of contract, and unjust enrichment, contesting ownership and inventorship of patents relating to the SYNC vehicle information system. In a decision by U.S. District Judge John Corbett O’Meara, the court granted Ford’s motion for summary judgment and denied Berry’s motion for partial summary judgment. The operative agreements between Ford and Berry provided that Ford was the exclusive owner of inventions made during the SYNC development project. For example, a contractor agreement incorporated a term providing that Ford owned all inventions “made, conceived, or reduced to practice” during the consulting engagement. Although Berry suggested a modification to create joint ownership, Ford did not accept the modification. The court ruled that the contract provisions governed ownership of the inventions, since Berry admitted that he had not reduced the inventions to practice until after the provisions governing ownership became effective. Although Berry argued that he had conceived the inventions before joining Ford, the court noted that, “Conception alone, without reduction to practice, is insufficient to remove the inventions from the scope of the agreements.” See Preston v. Marathon Oil Co., 684 F.3d 1276, 1285–86 (Fed.Cir.2012). In addition, the court ruled that Berry’s request for correction of inventorship failed because he failed to corroborate any inventive contribution to the claimed subject matter. “Plaintiff’s failure to support conception of any single element in any claim with corroborating evidence dooms his request for correction of inventorship[.]” Slip op. at *6.

DJ Drain Strikes Corrected Expert Report As Untimely and Prejudicial

Everlight Electronics Co. v. Nichia Corp., No. 12-11758, 2015 WL 1530831 (E.D. Mich. Apr. 6, 2015).

U.S. District Judge Gershwin A. Drain granted the plaintiff’s motion to strike a “Second Corrected Second Supplemental Analysis Chart” proposed by the defendant’s expert witness on infringement. The expert’s report incorporated a chart analyzing infringement in detail, including a complete list of accused products and asserted claims. Less than two months prior to trial, and more than eight months after the expert’s deposition, plaintiff served a supplemental corrected chart. The court granted plaintiff’s motion to strike the supplemental chart as untimely under Fed. R. Civ. P. 26(a)(2)(B) and 37(c)(1).

First, the court rejected the defendant’s contention that the new chart only contained “clerical corrections” and did not change the substance of the expert’s opinion. The court noted that the supplemental chart added allegations of infringement for new claims as to dozens of accused products. The court observed that, “The fact that the total number of accused products is unchanged does not mean there has been no substantive alteration to [the] infringement opinions.” Slip op. at *2. The court noted that the expert report was “meaningless” without the chart, because “without the Chart there is no way to identify which claims are being asserted against the nearly 800 accused products.” Id. Second, the court concluded that supplementation on the eve of trial was “extremely prejudicial” and that the defendant failed to act diligently in seeking to supplement its report, offering “no justification for the nine month delay – from May of 2014 through February of 2015 – for the correction of the known inconsistencies.” Id.

DJ Berg Allows Late Rebuttal Expert Report With Conditions To Prevent Prejudice

Innovation Ventures, LLC v. NVE, Inc., No. 08-11867, 2015 WL 1729334 (E.D. Mich. Apr. 15, 2015).

U.S. District Judge Terrence G. Berg granted the defendant’s motion for leave to file an untimely rebuttal expert report. Innovation Ventures supplemented its expert report before the April 30, 2014 stipulated deadline. The defendant, NVE, Inc., filed a motion for leave to file a responsive rebuttal report on March 1, 2015, eight months after the deadline for serving rebuttal reports and on the eve of trial. The court noted that following receipt of Innovation Ventures’ supplemental report, NVE “did not then promptly have [its expert] prepare and serve a rebuttal report, electing rather to wait until it learned the Court’s ruling on its [motion to strike Innovation Ventures’ supplemental report] and only then producing the  . . .   rebuttal report.” Nonetheless, the court noted that a full exchange of expert positions would “better allow the jury to understand and weigh the evidence, and intelligently decide the merits of the dispute between the parties in fair and balanced way.” Slip op. at *2. In addition, the court noted that unusual circumstances had forced a delay in trial: the judge having suffered a gunshot wound in an attempted home invasion immediately before the scheduled trial date. As a result, the court allowed the rebuttal report, but in order to prevent any potential prejudice from the untimely rebuttal report, ordered that NVE was barred from moving in limine to exclude trial testimony based on Innovation Ventures’ supplemental report and ordered NVE to produce its expert for a continued deposition, at its expense, prior to trial.