The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court
(1) DENYING PRESIDIO'S MOTION FOR PERMANENT INJUNCTION [Doc. No. 306];
(2) GRANTING IN PART AND DENYING IN PART PRESIDIO'S MOTION FOR POST TRIAL REMEDIES [Doc. No. 307];
(3) DENYING ATC'S MOTION FOR JMOL OR FOR A NEW TRIAL WITH RESPECT TO PRESIDIO'S FALSE MARKING BEFORE OCTOBER 24, 2008 [Doc. No. 308];
(4) GRANTING IN PART AND DENYING IN PART ATC'S MOTION FOR JMOL AND FOR A NEW TRIAL [Doc. No. 309];
(5) GRANTING IN PART AND DENYING IN PART ATC'S MOTION FOR ENTRY OF ATC'S PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW WITH RESPECT TO PRESIDIO'S FINES FOR FALSE MARKING [Doc. No. 310];
(6) DENYING ATC'S MOTION FOR ENTRY OF ATC'S PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW REGARDING INDEFINITENESS [Doc. No. 311]; and
(7) DENYING ATC'S MOTION FOR ENTRY OF ATC'S PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW REGARDING UNENFORCEABILITY OF THE '356 PATENT FOR INEQUITABLE CONDUCT [Doc. No. 312].
Currently before the Court are the parties' post-trial motions. Having considered the parties' arguments, and for the reasons set forth below, the Court issues the following order.
In this patent infringement case, Presidio Components Inc. ("Presidio") alleges American Technical Ceramics Corp. ("ATC") infringed U.S. patent number 6,816, 356 ("the '356 patent"), titled "Integrated Broadband Ceramic Capacitor Array."A capacitor is a device conventionally comprising two metal plates separated by a non-conductor of electric current. This non-conductive material is known as the "dielectric," which is usually composed of air or ceramic.
Capacitors are passive electronic components used in cellular phones, video cassette recorders, televisions, general purpose computers, and audio amplifiers. These devices use capacitors in one of two ways: (1) to filter out undesirable ripples or spikes in a power supply, or (2) to store energy and provide charge to transistors on a printed circuit board.*fn1
A capacitor is charged by coupling its plates to an electrical source. Since electricity passes easily through the conductors, but not the dielectric, a positive electrical charge accumulates on one plate and a negative charge accumulates on the other plate. When charged, the capacitor stores energy that can be released by connecting the plates via an external path, permitting current to flow from one plate to the other. The electrons flow off the negatively charged plate and onto the positively charged plate, bringing the two plates to equal relative voltage. The amount of energy a capacitor stores is its "capacitance," which depends on the orientation and spacing of the conductive plates, and the properties of the dielectric material.
Frequently, multiple capacitors are connected to form a capacitive network. One way to create a capacitive network is to build a "multilayer capacitor," which is formed by layering multiple conductive and non-conductive materials. Each individual layer has a separate capacitance that effects the overall capacitance of the multilayer capacitor.
The '356 patent discloses and claims a multilayer capacitor consisting of a network of capacitors. The '356 patent has a total of thirty-four claims, but only claims 1-5, 16, and 18-19 are the asserted claims in this case. Out of those, only asserted claim 1 is an independent claim.*fn2 The rest of the asserted claims are dependent claims.*fn3 Asserted claim 1 of the '356 patent claims:
A capacitor comprising: a substantially monolithic dielectric body; a conductive first plate disposed within the dielectric body; a conductive second plate disposed within the dielectric body and forming a capacitor with the first plate; a conductive first contact disposed externally on the dielectric and electrically connected to the first plate; and a conductive second contact disposed externally on the dielectric body and electrically connected to the second plate, and the second contact being located sufficiently close to the first contact to form a first fringe-effect capacitance with the first contact. ('356 patent, col. 12:58-13:5.) Asserted claims 2 and 4 also add one or two "insulating layer[s]" disposed between the external contacts and "inhibiting electrical conduction" between those contacts. (Id. col. 13:6-13:9, 13:17-13:25.)
The application process for the '356 patent spanned over two years. On May 17, 2002, Presidio submitted a parent application to patent the technology underlying the '356 patent with the United States Patent and Trademark Office ("USPTO" or "PTO"). This parent application resulted in U.S. patent number 6,587,327 ("the '327 patent"). On April 14, 2003, Presidio submitted the base application for the '356 patent, which was a continuation in part of the parent application. The USPTO issued the '356 patent on November 9, 2004.
During the pendency of Presidio's patent application, ATC initiated development of the 545L series of monolithic, multilayered capacitors. In September 2002, ATC engineers first expressed interest in developing a monolithic capacitor. During development, in April 2003, ATC allegedly dissected and analyzed Presidio's Buried Broadband Capacitors ("BB capacitors"). The BB capacitors were monolithic, multilayered capacitors developed for broadband usage. During the litigation, Presidio conceded the BB capacitors do not embody the claims of the '356 patent. Nonetheless, Presidio asserts the BB capacitors at the very least employ the "substantially monolithic dielectric body" as used in the claims of the '356 patent, and as such served as the background to the inventions ultimately claimed in the '356 patent.
In September 2003, ATC substantially completed the 545L capacitor's design and filed a provisional patent application. In March 2004, ATC reviewed Presidio's published patent application. The parties dispute the importance of ATC's review. Presidio asserts ATC engineers believed the patent application covered their capacitor. ATC asserts the engineers believed the '356 patent was both invalid and inapplicable to the 545L capacitor.
In September 2004, ATC filed a non-provisional patent application for the 545L capacitor. In February 2006, the USPTO rejected the application, citing the '356 patent as prior art. Notwithstanding this rejection, ATC began selling the 545L capacitor in June 2006. In August 2006, ATC requested the USPTO reconsider the application, arguing the '356 patent does not have orientation insensitivity, which is a feature of the 545L capacitor. That same month, the USPTO reconsidered and held the '356 patent did not bar ATC's application. On July 2007, the USPTO issued U.S. Patent No. 7,248,458 ("the '458 patent") for the 545L capacitor.
Beginning in May 2007, Presidio began marking its BB capacitors with the '356 patent number. On October 24, 2008, Presidio admitted the BB capacitors were not covered by the '356 patent, but claims it marked the capacitors with a mistaken belief they embodied the patent. Prior to the marking, Presidio did not perform a legal analysis. Presidio continued to mark the BB capacitors with the '356 patent until some time in April 2009.*fn4
On May 17, 2007, Presidio filed an action in this Court against ATC, alleging infringement of the '356 patent (the "2007 action"). On June 9, 2008, the Court granted a joint motion to dismiss the 2007 action without prejudice for lack of standing.
IV. Procedural Background
Presidio filed the complaint in this case on February 21, 2008, alleging ATC is infringing claims 1-5, 16, and 18-19 ("asserted claims") of the '356 patent by producing the 545L capacitor. [Doc. No. 1]. ATC answered on May 28, 2008, bringing numerous counterclaims against Presidio. [Doc. No. 10]. On June 20, 2008, Presidio filed an answer to ATC's counterclaims. [Doc. No. 21].
On June 11, 2008, the Court issued a Claim Construction Order, construing many of the disputed terms of the'356 patent. [Doc. No. 24]. Among others, the Court construed the term "a substantially monolithic dielectric body" as "a dielectric body largely but not wholly without seams from the inclusion of plates within the dielectric body." The Court construed the term "the second contact being located sufficiently close to the first contact to form a first fringe-effect capacitance with the first contact" as "an end of the first conductive contact and an end of the second conductive contact are positioned in an edge-to-edge relationship in such proximity as to form a determinable capacitance." On July 30, 2009, the Court granted ATC's Motion to Resolve a Fundamental Dispute over Claim Scope, finding "determinable capacitance" to mean "a capacity that is capable of being determined in terms of a standard unit." (Order Resolving Fund. Dispute, at 5.) In doing so, the Court rejected Presidio's interpretation that attempted to use the term "insertion loss" as a proxy for a previously rejected term "high frequency performance." (Id. at 4.)
On August 25, 2008, the Court issued an order denying ATC's summary judgment motion for a declaration of indefiniteness. [Doc. No. 32]. The parties then filed cross-motions for summary judgment. On April 30, 2009, the Court issued an order on the cross-motions for summary judgment, granting some and denying others. As relevant here, the Court granted summary judgment in favor of ATC on its counterclaim 5 with regard to false marking that occurred after October 24, 2008, and denied summary judgment for false marking that occurred before October 24, 2008. (MSJ Order, at 9-11.) In determining Presidio's potential liability for false marking, the Court adopted the "continuous act" test set forth in London v. Everet H. Dunbar Corp., 179 F. 506 (1st Cir. 1910), concluding that "each time Presidio marked a shipment, it committed a false marking offense." (MSJ Order, at 12-13.)
On July 23, 2009, ATC submitted to the USPTO a replacement request for reexamination of the '356 patent. On October 20, 2009, the USPTO granted the request for reexamination, noting there were substantial new questions of patentability with respect to all of the asserted claims in light of nine prior art references identified by ATC. The reexamination proceedings are still ongoing.
The case was tried to a jury in December 2009. The jury returned a verdict finding all of the asserted claims to be valid and infringed. The jury awarded Presidio $1,048,677 in lost profits. The jury also found that Presidio has proven by clear and convincing evidence that ATC's infringement was willful. Finally, the jury found that Presidio's false marking of the BB capacitors prior to October 24, 2008 was not done for the purpose of deceiving the public.
The Court heard oral argument on the parties' post-trial motions on March 12, 2010. After the motions were taken under submission, ATC filed two notices with the Court. First, ATC alerted the Court to the Federal Circuit's recent en banc decision in Ariad Pharms., Inc. v. Eli Lilly & Co., - F.3d -, 2010 WL 1007369 (Fed. Cir. Mar. 22, 2010) (en banc), arguing it supported ATC's motion for judgment as a matter of law and motion for a new trial with respect to invalidity for lack of written description in the '356 patent. [Doc. No. 343]. Second, ATC notified the Court of the First Office Action by the USPTO in the reexamination proceedings, which rejected all of the asserted claims of the '356 patent based on anticipation and obviousness. [Doc. No. 346]. Presidio filed responses in opposition to both of these notices. [Doc. Nos. 345, 347].
For issues not unique to patent law, such as sufficiency of the evidence on issues tried to the jury, the Court applies the law of the regional circuit in which it sits, here the Ninth Circuit. See Duro-Last, Inc. v. Custom Seal, Inc., 321 F.3d 1098, 1106 (Fed. Cir. 2003) (citations omitted). Otherwise, for all substantive issues of patent law, the Court applies the law of the Court of Appeals for the Federal Circuit. See id. (citations omitted).
In the Ninth Circuit, a judgment as a matter of law ("JMOL") pursuant to Federal Rule of Civil Procedure 50(a) is proper only "if the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion, and that conclusion is contrary to the jury's verdict." Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir. 2002) (citation omitted). Phrased otherwise, a JMOL should be granted only if "'there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue'" and the verdict reached by the jury is "'against the great weight of the evidence.'" Hangarter v. Provident Life & Acc. Ins. Co., 373 F.3d 998, 1005 (9th Cir. 2004) (citations omitted). "'Although the court should review the record as a whole, it must disregard evidence favorable to the moving party that the jury is not required to believe, and may not substitute its view of the evidence for that of the jury.'" Payao, 307 F.3d at 918 (citation omitted). Thus, the Court must keep in mind that "credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge." Hangarter, 373 F.3d at 1005 (internal quotation marks and citations omitted).
The Court may grant a new trial pursuant to Federal Rule of Civil Procedure 59(a) only if "'the verdict is contrary to the clear weight of the evidence, or is based upon evidence which is false,'" or if a new trial is necessary "'to prevent . . . a miscarriage of justice.'" Hangarter, 373 F.3d at 1005 (citation omitted). The Court "has the duty to weigh the evidence as the court saw it, and to set aside the verdict of the jury, even though supported by substantial evidence, where, in the court's conscientious opinion, the verdict is contrary to the clear weight of the evidence." Moski v. M.J. Cable, Inc., 481 F.3d 724, 729 (9th Cir. 2007) (internal quotation marks and citations omitted).
As an initial matter, the Court addresses ATC's arguments that Dr. Ewell was unqualified to render an opinion as a person of ordinary skill in the art, that he relied on his undisclosed opinion, and that in any event his testimony was legally irrelevant and could not support the verdict of no invalidity.
The Court also addresses ATC's argument that Presidio improperly referred to "insertion loss" in its closing argument.
The parties have previously agreed that "[t]he level of ordinary skill in the art of the '356 patent is medium. The ordinary artisan would hold a masters or similar degree, or the experiential equivalent thereof, in Electrical Engineering or a similar field, and would have at least two years of industry experience in designing multilayer capacitors." (Pretrial Order, at 5 [Doc. No. 182].) ATC argues Dr. Ewell does not meet this criteria because he admitted that he has "never from scratch designed" a capacitor in his entire career. (See Trial Tr. Day 7, at 93:8-93:9.) Presidio responds that Dr. Ewell is well-qualified as an expert witness because he has more than three decades of work experience relating to capacitors, including experience relating to the review of and consultation regarding designsof multilayer capacitors. (See id. at 69:14-73:5.) Moreover, Presidio argues ATC did not object or attempt to voir dire Dr. Ewell at trial.
ATC correctly notes that one who is not qualified in the pertinent art may not testify as an expert on technical issues such as validity, anticipation, or scope of the prior art. See Sundance, Inc. v. DeMonte Fabricating Ltd., 550 F.3d 1356, 1364 (Fed. Cir. 2008). However, the Court retains considerable discretion in allowing testimony if the expert witness has "sufficient relevant technical expertise." See SEB S.A. v. Montgomery Ward & Co., Inc., 594 F.3d 1360, 1373 (Fed. Cir. 2010). In the present case, although Dr. Ewell does not meet the requirement agreed to by the parties that a person qualified in the art "would have at least two years of industry equivalent in designing multilayer capacitors," Dr. Ewell clearly has "sufficient relevant technical experience." See id. Dr. Ewell testified that he has been working in the field of electronic components, of which the primary component has been multilayer ceramic capacitors, for over thirty years, including ten years at the Hughes Aircraft Company and twenty-five years at the Aerospace Corporation. (Trial Tr. Day 7, at 69:16-70:7.) As part of his job, Dr. Ewell served on the technical audit team which evaluated manufactured multilayer capacitors, "along with the designs used to produce the parts and the testing given them to ensure that they were adequately reliable." (See id. at 70:23-71:3.) Accordingly, Dr. Ewell is more than qualified to render an opinion in the pertinent art of designing multilayer ceramic capacitors. Moreover, Presidio correctly points out that ATC did not object or attempt to voir dire Dr. Ewell at trial.*fn5 For the foregoing reasons, the Court deniesATC's objections to Dr. Ewell's testimony.
Likewise, there is no merit to ATC's argument that the Court should ignore Dr. Ewell's testimony as legally irrelevant. ATC argues Dr. Ewell's testimony should be excluded because: (1) he improperly injected an additional requirement limiting the Court's construction of the term "fringe effect capacitance" from a "determinable capacitance" to a "determinable fringe-effect capacitance;" (2) he improperly limited "determinable capacitance" to the measurement of a physical capacitor; and (3) he improperly required testing of actual samples for determining whether capacitance exists. However, in light of the fact that the '356 patent discusses both parallel capacitance and fringe-effect capacitance, there was no error in referring to "determinable fringe-effect capacitance" when discussing the specific limitations of claim 1. Likewise, even assuming as true ATC's allegations that Dr. Ewell limited "determinable capacitance" to the testing of actual physical samples, whether any such limitation was proper in this context was for the jury to determine, not the Court. See Hangarter, 373 F.3d at 1005 (noting that at the JMOL stage, the credibility determinations, weighing of the evidence, and drawing of legitimate inferences is the province of the jury, not the judge). Nothing prevented ATC from cross-examining Dr. Ewell as to his allegedly idiosyncratic views, and indeed ATC did so extensively. (See, e.g., Trial Tr. Day 7, at 94:18-98:15, 108:7-112:17, 113:17-116:21.)
The Court also rejects ATC's argument that Dr. Ewell relied on undisclosed expert opinion during his testimony. ATC argues Dr. Ewell never opined in his report on the propriety of Dr. Dougherty's testing of the August 2000 capacitors, or that there would be only a "parallel-plate capacitor left" in the fragment after shaving. However, there is sufficient analysis in Dr. Ewell's expert report on the impropriety of the testing done by Dr. Dougherty and why that fails to demonstrate fringe-effect capacitance. (See Pl. Rebuttal Expert Report of Gary J. Ewell, at 65-78 [Doc. No. 320-8].) Dr. Ewell's report also sufficiently covers the other issues objected to by ATC.
Finally, there is also no merit to ATC's argument that Presidio improperly referred to "insertion loss" in its closing argument. (See Trial Tr. Day 8, at 59:18-59:24.) Contrary to ATC's argument, Presidio did not attempt to define "fringe-effect capacitance" with the term "insertion loss" contrary to the Court's claim construction and in limine ruling. Rather, Presidio merely indicated that "insertion loss" has been mentioned during the trial. In light of the fact that the specifications of the '356 patent extensively discuss "insertion loss," there was no error in referring to this term. Moreover, the reference to "insertion loss" was so minute and isolated, there is no reason to believe it was even noticed by the jury, not to mention influenced its decision. Accordingly, the Court deniesATC's objection on this ground as well.
ATC seeks a judgment as a matter of law that certain prior art anticipated the asserted claims of the '356 patent. Anticipation under 35 U.S.C. § 102 "requires a single prior art reference which discloses each and every element of the claimed invention."*fn7 Dickson Indus., Inc. v. Patent Enforcement Team, L.L.C., 333 Fed. App'x 514, 517 (Fed. Cir. 2009) (citing Akzo N.V. v. U.S. Int'l Trade Comm'n, 808 F.2d 1471, 1479 (Fed. Cir. 1986)). Anticipation is an affirmative defense, which the defendant must demonstrate by clear and convincing evidence. i4i Ltd. Partnership v. Microsoft Corp., - F.3d -, 2010 WL 801705, at **9-10 (Fed. Cir. 2010) (citations omitted). In an anticipation analysis, what a prior art reference discloses is a factual determination that the Court will not overturn unless it was not supported by substantial evidence. Dickson Indus., 333 Fed. App'x at 517-18.
i. ATC's Argument that Fringe-Effect Capacitance is Always Present
First, ATC argues there is nothing new about "fringe-effect capacitance" because, according to the laws of physics, it is always present in multilayer capacitors wherever two conductive contacts are positioned in an edge-to-edge relationship. Thus, one can always use the universally known equation of C=kA/d to measure the capacitance, no matter how small.*fn8 ATC contends this was even acknowledged by Dan Devoe and Dr. Ewell.*fn9
Despite ATC's arguments to the contrary, there was substantial evidence before the jury to conclude that "fringe-effect capacitance" is not always present--i.e., that it is not always determinable or "capable of being determined in terms of a standard unit" as required by the Court's claim construction. For example, Dr. Huebner testified that in order to demonstrate whether this claim limitation is met, one could and should analyze the thickness of the external contacts, the separation distance, and the dielectric. (Trial Tr. Day 4, at 77:14-85:7.) Likewise, Dr. Ewell testified that even if fringe-effect capacitance is always present, such capacitance is not always determinable. (Trial Tr. Day 7, at 108:18-109:9.)
ATC argues the capacitor described in Figure 12 of the Figueroa patent, U.S. patent number 6,483,692 ("Figueroa patent") anticipates the asserted claims. ATC points to the "striking resemblance" of the Figure 12 of the Figueroa patent to Figure 15A of the '356 patent. According to ATC, "[i]f fringe-effect capacitance is reportedly created in the 2 mil gap of the '356 patent , without the thickness of contacts or any of the other parameters being disclosed, then a comparable disclosure of a gap of 2.56 mils or less in Figueroa must also result in fringe-effect capacitance." (Def. Motion for JMOL or New Trial, at 24.)
There was legally sufficient evidence before the jury to conclude the Figueroa patent did not anticipate all of the elements of the asserted claims. As Presidio notes, the Figueroa patent never mentions "fringe-effect capacitance" or provides the necessary information needed to conclude whether any such capacitance in Figure 12 exists and/or is determinable. ATC's argument that fringe-effect capacitance must exist in the 2.56 mils or less gap in Figure 12, since it exists in the 2 mil gap in Figure 15A of the '356 patent, is unavailing. Viewing the evidence in favor of the verdict, the jury was free to accept Dr. Ewell's detailed explanation as to why there was insufficient data on whether there was determinable capacitance in Figure 12. (See Trial Tr. Day 7, at 108:7-116:21.)
The cases relied upon by ATC are inapposite. First, in the part of Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560, 1569 (Fed. Cir. 1988), cited by ATC, the Federal Circuit only decided whether a prior reference was enabling. Answering this question in the affirmative, the court noted that the disclosure in the prior art was "at least at the same level of technical detail as the disclosure in the [patent-in-suit]." Id. Similarly, in the part of SRI Int'l, Inc. v. Internet Sec. Sys., Inc., 511 F.3d 1186, 1193-94 (Fed. Cir. 2008), cited by ATC, the court was only concerned with whether a particular reference qualified as a "prior art." In the present case, there has been no suggestion that the Figueroa patent is not enabling or that it does not qualify as prior art. Rather, the issue here is whether the Figueroa patent anticipates the asserted claims of the '356 patent because it teaches or describes "fringe-effect capacitance." See id. at 1192 ("'A patent claim is anticipated only if each and every element as set forth in the claim is found, either expressly or inherently described, in a single prior art reference.'" (citation omitted)). As already noted, the Figueroa patent nowhere mentions the "fringe-effect capacitance," nor does it provide the necessary information needed to conclude whether any such capacitance in Figure 12 exists and/or is determinable.
Accordingly, there was legally sufficient evidence for the jury to conclude that the Figueroa patent does not anticipate the asserted claims of the '356 patent because it does not by itself describe each and every limitation of the asserted claim 1. See Dickson Indus., 333 Fed. App'x at 517.
ATC next argues the capacitor described in Figure 7 of the Heron patent, U.S. patent number 4,931,901 ("Heron patent") anticipates the asserted claims of the '356 patent, at least as illustrated in Figure 10A of the '356 patent. Heron measured fringe-effect capacitance on actual capacitors and also used the standard capacitance formula to estimate capacitance during the design. The fringe-effect capacitance between internal electrodes 54a and 54b (and 50a and 50b) was expressly acknowledged by the Heron patent. According to ATC, this anticipates claim 1 of the '356 patent because the internal electrodes in Figure 7 are in turn connected to C-shaped plates that are "arranged on an external surface portion" of the dielectric body as required by the Court's claim construction in this case.
Nonetheless, there was substantial evidence for the jury to find that the Heron patent does not anticipate claim 1 of the '356 patent. First, the Heron patent itself describes only fringe-effect capacitance between internal electrodes. There is nothing in Heron that would, by itself, teach fringe-effect capacitance between the external points of the C-shaped plates. Moreover, Presidio presented testimony of Dr. Ewell that the Heron patent did not teach fringe-effect capacitance between external contacts. (See Trial Tr. Day 7, at 89:24-90:6, 128:19-128:24, 129:8-129:13, 130:9-130:23.) Although this testimony was contradicted by Dr. Dougherty, the Court must disregard that testimony in determining whether there is "substantial evidence" supporting the jury's verdict. See Pavao, 307 F.3d at 918. Accordingly, in light of Dr. Ewell's testimony, the Court finds there was substantial evidence for the jury to find that the Heron patent does not anticipate the asserted claims of the '356 patent because it does not by itself describe each and every limitation of the asserted claim 1.
iv. August 2000 Capacitors
ATC next argues the capacitors from Presidio's Lot No. 00126-18A that were sold to JDS Uniphase ("JDSU") in August 2000 ("August 2000 capacitors") also anticipate all of the asserted claims, except claims 2 and 4. Dr. Dougherty confirmed that fringe-effect capacitance existed in the August 2000 capacitors by using three different methods (Walker formula, C=kA/d formula, and capacitance meter). However, to test the capacitance, Dr. Dougherty admitted that he had to "polish back and cut away" almost all of the capacitor, so as to leave only the area where the fringe-effect capacitance was supposed to exist. (See Trial Tr. Day 5, at 159:3-159:22.) By doing so, Dr. Dougherty in effect shaved off almost 90% of the August 2000 capacitor. (See Trial Tr. Day 6, at 42:3-45:11.) In light of this, Presidio argues Dr. Dougherty did not really test the August 2000 capacitor itself, but rather some other new part with different structure and electrical performance. (See Trial Tr. Day 7, at 87:7-88:13.) Moreover, according to Presidio, only parallel capacitance--if any--would have remained in the August 2000 capacitor after the shaving. (See Trial Tr. Day 7, at 88:14-88:23.)
Once again, it was up to the jury to decide how much weight to give to the respective testimony by Dr. Dougherty and Dr. Ewell. By finding no anticipation by the August 2000 capacitors, the jury must have believed Dr. Ewell that Dr. Dougherty's method of testing for capacitance in the August 2000 capacitor was improper. Or they could have credited Dr. Ewell's testimony that only parallel capacitance--if any--would have remained in the August 2000 capacitor after shaving. In any event, Dr. Ewell's testimony provides legally sufficient evidence to support either of those conclusions, and it is not the job of the Court to second-guess the jury on the issues of credibility of the witnesses or the weighing of the evidence. See Hangarter, 373 F.3d at 1005. Accordingly, there was legally sufficient evidence for the jury to find that the August 2000 capacitors do not anticipate the asserted claims of the '356 patent. See Dickson Indus., 333 Fed. App'x at 517.
ATC next argues the asserted claims of the '356 patent were obvious to a person of ordinary skill in the art in light of the prior art. Obviousness is a legal question, whereby the court must determine whether the subject matter of the claimed invention "would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." 35 U.S.C. § 103(a); see also KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 415-16 (2007); Lucent Tech., Inc. v. Gateway, Inc., 580 F.3d 1301, 1310 (Fed. Cir. 2009). "Underpinning that legal issue are factual questions relating to the scope and content of the prior art, the differences between the prior art and the claimed invention, the level of ordinary skill in the art, and any relevant secondary considerations [of non-obviousness], such as commercial success, long-felt need, and the failure of others." PharmaStem Therapeutics, Inc. v. ViaCell, Inc., 491 F.3d 1342, 1359-60 (Fed. Cir. 2007) (citations omitted); accord Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966).
The burden at trial is on the patent challenger to show by clear and convincing evidence that "a person of ordinary skill in the art would have had reason to attempt to make the composition or device, or carry out the claimed process, and would have had a reasonable expectation of success in doing so." PharmaStem, 491 F.3d at 1360 (citations omitted). Thus, "a patent composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art." KSR, 550 U.S. at 418 (citing United States v. Adams, 383 U.S. 39 (1966)). Rather, the court must "look to interrelated teachings of multiple patents; the effects of demands known to the design community or present in the marketplace; and the background knowledge possessed by a person having ordinary skill in the art, all in order to determine whether there was an apparent reason to combine the known elements in the fashion claimed by the patent at issue." Id.
i. Was there a reason to combine the known elements in the fashion claimed by the '356 patent, and a reasonable expectation of success in doing so?
ATC argues there is no dispute that prior art teaches: (1) multilayer ceramic capacitors having the first five elements of claim 1; (2) the additional elements of dependent claims 5, 16, 18, and 19; (3) presence of fringe-effect capacitance wherever two conductive contacts are positioned in an edge-to-edge relationship; and (4) use of insulating layers as an optional feature partially or completely covering contacts (or parts thereof) to prevent electrical sparking. Thus, wouldn't it be obvious to combine the first five elements of the asserted claim 1 with fringe-effect capacitance between edges, knowing that the capacitance gets larger as the gap gets closer? Also, wouldn't it be obvious that the fringe-effect capacitance, which is disclosed for internal contacts 50a and 50b of the Heron patent, would similarly apply to the external pair of C-shaped terminations based on the same edge-to-edge geometry? Wouldn't it be obvious to bring those contacts to the surface? Wouldn't it be obvious that if fringe-effect capacitance existed in a 1 mil gap as disclosed in the Gowen patent,*fn10 that it would also exist in the 2.56 mils or less gap shown in the Figueroa patent? Wouldn't a person of ordinary skill in the art apply an insulating layer if he wanted to prevent arcing across the surface? According to ATC, knowledge and common sense, as well as market pressure--rather than innovation--would have been the motivation for these combinations.
However, the issue before the Court is much narrower than ATC makes it appear. At trial, the jury was asked only: (1) whether all of the asserted claims of the '356 patent were obvious in light of the combination of the Heron patent with the Aoyagi patent,*fn11 and (2) whether claims 2 and 4 were obvious in light of the combination of the August 2000 capacitors with the Aoyagi patent. (See Verdict Form, at 3-4 [Doc. No. 298].) Seeing as the Aoyagi patent only teaches an insulating layer across the surface,*fn12 the combination of it with either the Heron patent or the August 2000 capacitors would not have rendered the '356 patent obvious because, as discussed above, there is sufficient evidence to support the jury finding that neither of those patents teaches a fringe-effect capacitance between the externalcontacts that is "capable of being determined in terms of a standard unit." Accordingly, if neither the Heron patent nor the August 2000 capacitors by itself teaches such fringe-effect capacitance, a combination with the Aoyagi patent would not have made that any more obvious.
In any event, even if ATC's request for a JMOL as to obviousness based on other combinations is procedurally proper, ATC has not carried its burden of demonstrating that a person of ordinary skill in the art would have had the reason to combine the known elements and would have had a reasonable expectation of success in doing so. See PharmaStem, 491 F.3d at 1360. Notably, ATC does not point to any testimony at trial that would suggest anyreason to extend the fringe-effect capacitance to the external contacts in Figure 7 of the Heron patent or any motivation to bring the internal contacts to the surface. As the Supreme Court has recently stated, the fact that both of those concepts were "obvious" independently does not make their ultimate combination obvious. See KSR, 550 U.S. at 418-19. Rather, it is important to identify a reason that would have prompted a person of ordinary skill in the relevant field to combine the elements in the way the claimed new invention does.
This is so because inventions in most, if not all, instances rely upon building blocks long since uncovered, and claimed discoveries almost of necessity will be combinations of what, in some sense, is already known.
Id. In the present case, ATC's rhetorical questions notwithstanding, there was no testimony presented at trial to show any reason for combining those elements.*fn13 Accordingly, ATC failed to carry its burden of demonstrating obviousness by clear and convincing evidence. See In re Dembiczak, 175 F.3d 994, 999 (Fed. Cir. 1999), abrogated on other grounds by In re Gartside, 203 F.3d 1305 (Fed. Cir. 2000) ("Our case law makes clear that the best defense against the subtle but powerful attraction of a hindsight-based obviousness analysis is rigorous application of the requirement for a showing of the teaching or motivation to combine prior art references." (citations omitted)); In re Rouffet, 149 F.3d 1350, 1359 (Fed. Cir. 1998) (noting that the patent challenger must identify specifically and explain "the reasons one of ordinary skill in the art would have been motivated to select the references and to combine them to render the claimed invention obvious" (citation omitted)).
ii. Obviousness Due to Contemporaneous Conception by Others
In the alternative, ATC argues obviousness is demonstrated by the fact that similar edge-to-edge design was conceived by Charles Rosier, a JDSU engineer, no later than January 15, 2001, and ATC's engineer Richard Monsorno in August 2001. (See Def. Motion for JMOL, Exs. CL, AGN.) Presidio responds there is no evidence that Mr. Rosier conceived all of the limitations of all of the claims, and, in any event, the jury already rejected any such argument. Likewise, according to Presidio, there is no evidence that anything conceived by Dr. Monsorno was "remarkably similar to the capacitors in the '356 patent," and, in any event, those designs were presented to the USPTO during the prosecution of the '356 patent, and the USPTO proceeded to issue the '356 patent.
The testimony pointed to by ATC is insufficient to establish by clear and convincing evidence that the asserted claims of the '356 patent are rendered obvious by the Rosier and Monsorno drawings. There was extensive testimony by Alan Devoe that raised doubts as to any "contemporaneous conception" by Charles Rosier and whether he invented anything related to the '356 patent. (See, e.g., Trial Tr. Day 3, at 182:9-185:22; Trial Tr. Day 4, at 3:21-9:1, 15:18-20:19, 25:20-26:5; 32:20-33:3.) As for the Monsorno drawing, ATC fails to point to any testimony at trial that discussed whether it rendered obvious all of the asserted claims. Rather, the only testimony concerned the drawing's alleged "single-piece" construction. (See Trial Tr. Day 5, at 49:19-50:12.) Finally, the only testimony about "fringe-effect capacitance" concerned the Monsorno patent from 1996*fn14 and not the Monsorno drawing from August 22, 2001, depicted in ATC's Exhibit CL. (See Trial Tr. Day 5, at 47:3-48:22.) There is no dispute that the Monsorno patent was disclosed to the USPTO during the prosecution of the '356 patent. (See '356 patent, at 1 (listing the Monsorno '926 patent among the "References Cited").) Accordingly, the Rosier and Monsorno drawings are insufficient to establish obviousness.*fn15
D. Reexamination Proceedings
The conclusion that ATC has failed to prove anticipation and obviousness by clear and convincing evidence is not affected by the USPTO's recent reexamination proceedings. As previously noted, on July 23, 2009, ATC submitted a replacement Request for Reexamination of the '356 patent. On October 20, 2009, the USPTO granted the request, noting there were substantial new questions of patentability with respect to the asserted claims in light of nine prior art references identified by ATC. Then, on March 23, 2009, the USPTO issued a First Office Action on the merits, rejecting all of the asserted claims on the grounds of anticipation and obviousness. However, just like its name implies, the First Office Action is only a preliminary determination by the USPTO--it is not a "final" action, and the examiner could still change his decision or completely reverse it before issuing the final action. See 37 C.F.R. §§ 1.112, 1.550; accord Heinl v. Godici, 143 F. Supp. 2d 593, 598-99 (E.D. Va. 2001). Accordingly, any such determination is not persuasive evidence of anticipation or obviousness. See Medtronic, Inc. v. Catalyst Research Corp., 547 F. Supp. 401, 410 (D. Minn 1982); accord Cimcore Corp. v. Faro Techs., Inc., Civil No. 03 CV 2355-B (WMc), 2007 WL 935665, at *2 (S.D. Cal. Mar. 12, 2007) ("The office action is a first office action, not a final rejection by the USPTO. Even if it were a final rejection, until the patentee addresses the rejections with argument or claim amendments and the reexamined patent issues, the prosecution history is incomplete and estoppel has yet to be determined.").
ATC next argues the asserted claims are invalid due to lack of enablement. The enablement requirement is set forth in Section 112, which provides that the patent's specification shall describe "the manner and process of making and using [the invention], in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use [the invention]." 35 U.S.C. § 112. "The enablement requirement is satisfied when one skilled in the art, after reading the specification, could practice the claimed invention without undue experimentation." AK Steel Corp. v. Sollar & Ugine, 344 F.3d 1234, 1244 (Fed. Cir. 2003) (citation omitted). Factors to be considered in determining whether undue experimentation would be required include: "(1) the quantity of experimentation necessary, (2) the amount of direction or guidance presented, (3) the presence or absence of working examples, (4) the nature of ...