IP News

Defendant Sundstrand manufactures gas turbine engines ('APS 3200') with a surge control system that compares a flow-related static pressure differential parameter called DELPQP to a set point based on air inlet temperature and makes adjustments in response. At high air flow rates, the DELPQP can provide ambiguous signals ' known as the 'double solution problem.' The APS 3200 solves the double solution problem by blocking the control signal at high-flow conditions based in part on IGV position.

On Feb. 16, 2001, a jury found that the APS 3200 infringed claims of Honeywell's patents under the doctrine of equivalents. In a prior appeal, the Federal Circuit held en banc that 'rewriting [the] dependent claims into independent form coupled with the cancellation of the original independent claims creates a presumption of prosecution history estoppel.' On remand, the district court held that the presumption had not been rebutted because the alleged equivalent was foreseeable and the rationale for the amendment bore more than a tangential relation to the equivalent in question.

The Federal Circuit affirmed the district court's ruling, finding first that the use of IGV position to solve the double solution problem would have been foreseeable at the time of the amendments, even though it had never actually been demonstrated. The court held that foreseeability only requires that one of ordinary skill in the art would have reasonably foreseen the proposed equivalent at the pertinent time. Second, the court held that the amendment bore more than a tangential relation to the equivalent in question because Honeywell had effectively added the IGV limitations (the focus of the alleged equivalent) by canceling the independent claims during prosecution and rewriting the dependent claims in independent form.

Judge Newman issued a sharp dissent, criticizing the majority's restriction of the grounds for rebutting presumptive estoppel. She opined that the alleged equivalent was not foreseeable given that: 1) Honeywell had never described it; 2) Sundstrand's technology was itself patented; and 3) Sundstrand had previously argued that the APS 3200 did not infringe because its system made a different use of IGVs than Honeywell's, namely to solve the 'double solution' problem. Judge Newman also opined that the majority erred in finding that in narrowing a claim by adding an element, ipso facto the relation to the accused equivalent element is not tangential.

Federal Circuit Affirms ITC Final Determination of Noninfringement

In Solomon Techs., Inc. v. International Trade Commission, 2007-1391 (Fed. Cir. May 7, 2008), the Federal Circuit affirmed the ITC's final determination that respondent Toyota Motor Corporation did not infringe Solomon's U.S. Patent No. 5,067,932 (”932 patent') related to a combination motor and transmission device having two power inputs. Claim 7, the only claim at issue, required 'integral combination of a respective electric motor element and an element of said transmission unit ' ' for each of two power inputs. The administrative law judge (whose opinion was later adopted in relevant part by the ITC) construed this limitation as 'An electric motor element and a transmission unit element rigidly and directly attached without the presence of shafts, bearings or other components between the electric motor element and the transmission unit element, supportable by a single bearing.' Solomon conceded that the Toyota transaxles did not satisfy the limitation as construed because they contain rotor shafts between the motor-generators and the transmission unit, and because the rotor shafts are not supported by a single bearing, but argued that the patentee did not disclaim devices having shafts, bearings and other components between the motor and transmission elements. The construction was thus erroneous.

The court disagreed with Solomon, holding that devices that use shafts to connect the motor and transmission elements were disclaimed during prosecution. Specifically, in response to an anticipation rejection, the applicant stated that the 'prior art does not at all teach or in any way suggest the feature of the present invention as recited in claims 1 and 2 [issued claim 7]'of the 'integral' combination of each armature and respective gear element. Namely, in this prior art there are shafts and bearings ' between each respective pair of these two elements.'

Solomon argued that the claims were amended in two ways to capture the 'integral combination' feature of the invention. In claim 1, the patentee explicitly added a requirement that no shafts or bearings lie between the motor and transmission elements. However, in claim 2 [issued claim 7], the patentee added a requirement that the motor and transmission elements be 'at least to a large [extent] within an envelope containing the other.' Solomon argued that this was done to distinguish prior art with free standing motors and that therefore, the 'no shafts' limitation added to claim 1 should not be read into the 'integral combination' limitation of claim 7. The Federal Circuit disagreed, holding that that in the description of the 'within an envelope' requirement the patentee emphasized the absence of a shaft between the motor and transmission elements.

Second Circuit 'Chews on' Dispute over Bazooka Gum

In The Topps Company, Inc. v. Cadbury Stani S.A.I.C., f/k/a Productos Stani Sociedad Anonima Industrial y Commercial, the Second Circuit reversed the district court's summary judgment ruling that defendant Stani, plaintiff Topps' former licensee of rights in the Bazooka gum trademark and formula, had the right to continue using the Bazooka formula following expiration of the parties' licensing agreements. Between 1956 and 1996, Topps licensed Stani to make and sell Bazooka gum using its proprietary formula in several South American countries. In 1999, Topps brought suit against Stani, alleging that Stani continued to use the formula after expiration of the license agreements. However, the district court granted Stani's motion for summary judgment that it was entitled to continue using Topps' formulas. The district court relied in part on two agreements between the parties entered contemporaneously in 1980. The first was a license agreement (expiring by its own terms in 1996) pursuant to which Topps granted Stani the right to make and sell Bazooka (using its formula) until 1996. The second was an escrow agreement, pursuant to which Topps transferred legal title to the Bazooka trademark registration in Argentina to a holding company wholly-owned by Stani's parent corporation. The district court reasoned that if Stani had not been given the right to continue using Topps formulas after April 1996, then the 1980 escrow agreement would amount to nothing more than a transfer of the Topps trademarks 'in gross,' which would violate trademark law and could not have been intended by the parties.

The Second Circuit disagreed for several reasons. First, the court held that the district court incorrectly assumed that trademark law prohibited assignments 'in gross,' reasoning that while true under U.S. law, the escrow agreement dealt with Argentinian trademarks and implicated Argentinian law, under which the effect of a trademark assignment 'in gross' was unclear. The court further held that even if assignments 'in gross' were proscribed under Argentinian trademark law, the district court erred in assuming that the transfer required a concomitant transfer of Topps' formulas to avoid qualifying as such an assignment. The court reasoned that the goodwill requirement in U.S. law required only that the assignee's product be 'substantially similar' and Stani had admitted that a substantially similar product could be produced without using the Topps formulas. Finally, the Second Circuit held the district court erred in assuming that the parties would try to avoid an assignment in gross in negotiating the escrow agreement, noting that businesses frequently take such a risk, and that at the time of the escrow agreement there was a trend toward relaxed requirements related to assignments in gross.

Federal Circuit Narrows Grounds for Rebutting Presumption of Prosecution History Estoppel

In Honeywell Int'l, Inc. v. Hamilton Sundstrand Corp., 2006-1602 (Fed. Cir. April 18, 2008), the Federal Circuit held that Honeywell did not rebut the presumption of prosecution history estoppel arising from its rewriting of dependent claims into independent form coupled with the cancellation of the original independent claims during prosecution.

The asserted claims related to a system (and method for utilizing the same) for controlling unwanted airflow surges through aircraft gas turbine engines. Prior art systems provided wide safety margins by drawing more air than required into the engine's compressor, but were inefficient. Honeywell's patent relates to the use of inlet guide valves ('IGVs'), which operate like Venetian blinds to regulate the air drawn into the compressor. The invention compares actual airflow to a 'set point,' which represents the desired flow conditions and makes adjustments accordingly. The set point in Honeywell's invention is a function of the position of the IGVs. During prosecution, Honeywell cancelled three independent claims in response to an obviousness rejection and rewrote claims depending from the same into independent form. The rewritten dependent claims each contained additional limitations related to IGVs and their position that were not present in the original cancelled independent claims.

Defendant Sundstrand manufactures gas turbine engines ('APS 3200') with a surge control system that compares a flow-related static pressure differential parameter called DELPQP to a set point based on air inlet temperature and makes adjustments in response. At high air flow rates, the DELPQP can provide ambiguous signals ' known as the 'double solution problem.' The APS 3200 solves the double solution problem by blocking the control signal at high-flow conditions based in part on IGV position.

On Feb. 16, 2001, a jury found that the APS 3200 infringed claims of Honeywell's patents under the doctrine of equivalents. In a prior appeal, the Federal Circuit held en banc that 'rewriting [the] dependent claims into independent form coupled with the cancellation of the original independent claims creates a presumption of prosecution history estoppel.' On remand, the district court held that the presumption had not been rebutted because the alleged equivalent was foreseeable and the rationale for the amendment bore more than a tangential relation to the equivalent in question.

The Federal Circuit affirmed the district court's ruling, finding first that the use of IGV position to solve the double solution problem would have been foreseeable at the time of the amendments, even though it had never actually been demonstrated. The court held that foreseeability only requires that one of ordinary skill in the art would have reasonably foreseen the proposed equivalent at the pertinent time. Second, the court held that the amendment bore more than a tangential relation to the equivalent in question because Honeywell had effectively added the IGV limitations (the focus of the alleged equivalent) by canceling the independent claims during prosecution and rewriting the dependent claims in independent form.

Judge Newman issued a sharp dissent, criticizing the majority's restriction of the grounds for rebutting presumptive estoppel. She opined that the alleged equivalent was not foreseeable given that: 1) Honeywell had never described it; 2) Sundstrand's technology was itself patented; and 3) Sundstrand had previously argued that the APS 3200 did not infringe because its system made a different use of IGVs than Honeywell's, namely to solve the 'double solution' problem. Judge Newman also opined that the majority erred in finding that in narrowing a claim by adding an element, ipso facto the relation to the accused equivalent element is not tangential.

Federal Circuit Affirms ITC Final Determination of Noninfringement

In Solomon Techs., Inc. v. International Trade Commission, 2007-1391 (Fed. Cir. May 7, 2008), the Federal Circuit affirmed the ITC's final determination that respondent Toyota Motor Corporation did not infringe Solomon's U.S. Patent No. 5,067,932 (”932 patent') related to a combination motor and transmission device having two power inputs. Claim 7, the only claim at issue, required 'integral combination of a respective electric motor element and an element of said transmission unit ' ' for each of two power inputs. The administrative law judge (whose opinion was later adopted in relevant part by the ITC) construed this limitation as 'An electric motor element and a transmission unit element rigidly and directly attached without the presence of shafts, bearings or other components between the electric motor element and the transmission unit element, supportable by a single bearing.' Solomon conceded that the Toyota transaxles did not satisfy the limitation as construed because they contain rotor shafts between the motor-generators and the transmission unit, and because the rotor shafts are not supported by a single bearing, but argued that the patentee did not disclaim devices having shafts, bearings and other components between the motor and transmission elements. The construction was thus erroneous.

The court disagreed with Solomon, holding that devices that use shafts to connect the motor and transmission elements were disclaimed during prosecution. Specifically, in response to an anticipation rejection, the applicant stated that the 'prior art does not at all teach or in any way suggest the feature of the present invention as recited in claims 1 and 2 [issued claim 7]'of the 'integral' combination of each armature and respective gear element. Namely, in this prior art there are shafts and bearings ' between each respective pair of these two elements.'

Solomon argued that the claims were amended in two ways to capture the 'integral combination' feature of the invention. In claim 1, the patentee explicitly added a requirement that no shafts or bearings lie between the motor and transmission elements. However, in claim 2 [issued claim 7], the patentee added a requirement that the motor and transmission elements be 'at least to a large [extent] within an envelope containing the other.' Solomon argued that this was done to distinguish prior art with free standing motors and that therefore, the 'no shafts' limitation added to claim 1 should not be read into the 'integral combination' limitation of claim 7. The Federal Circuit disagreed, holding that that in the description of the 'within an envelope' requirement the patentee emphasized the absence of a shaft between the motor and transmission elements.

Second Circuit 'Chews on' Dispute over Bazooka Gum

In The Topps Company, Inc. v. Cadbury Stani S.A.I.C., f/k/a Productos Stani Sociedad Anonima Industrial y Commercial, the Second Circuit reversed the district court's summary judgment ruling that defendant Stani, plaintiff Topps' former licensee of rights in the Bazooka gum trademark and formula, had the right to continue using the Bazooka formula following expiration of the parties' licensing agreements. Between 1956 and 1996, Topps licensed Stani to make and sell Bazooka gum using its proprietary formula in several South American countries. In 1999, Topps brought suit against Stani, alleging that Stani continued to use the formula after expiration of the license agreements. However, the district court granted Stani's motion for summary judgment that it was entitled to continue using Topps' formulas. The district court relied in part on two agreements between the parties entered contemporaneously in 1980. The first was a license agreement (expiring by its own terms in 1996) pursuant to which Topps granted Stani the right to make and sell Bazooka (using its formula) until 1996. The second was an escrow agreement, pursuant to which Topps transferred legal title to the Bazooka trademark registration in Argentina to a holding company wholly-owned by Stani's parent corporation. The district court reasoned that if Stani had not been given the right to continue using Topps formulas after April 1996, then the 1980 escrow agreement would amount to nothing more than a transfer of the Topps trademarks 'in gross,' which would violate trademark law and could not have been intended by the parties.

The Second Circuit disagreed for several reasons. First, the court held that the district court incorrectly assumed that trademark law prohibited assignments 'in gross,' reasoning that while true under U.S. law, the escrow agreement dealt with Argentinian trademarks and implicated Argentinian law, under which the effect of a trademark assignment 'in gross' was unclear. The court further held that even if assignments 'in gross' were proscribed under Argentinian trademark law, the district court erred in assuming that the transfer required a concomitant transfer of Topps' formulas to avoid qualifying as such an assignment. The court reasoned that the goodwill requirement in U.S. law required only that the assignee's product be 'substantially similar' and Stani had admitted that a substantially similar product could be produced without using the Topps formulas. Finally, the Second Circuit held the district court erred in assuming that the parties would try to avoid an assignment in gross in negotiating the escrow agreement, noting that businesses frequently take such a risk, and that at the time of the escrow agreement there was a trend toward relaxed requirements related to assignments in gross.