IP Law Daily Enhanced damages award vacated in dispute over pedestrian push button control system
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Tuesday, July 10, 2018

Enhanced damages award vacated in dispute over pedestrian push button control system

By Joseph Arshawsky, J.D.

In a dispute over technology for a two-wire push button station control system for pedestrian use at a traffic light controlled intersection, a federal district court correctly denied judgment as a matter of law of invalidity and no willful infringement, but the district court’s enhanced damages award was vacated and remanded for redetermination by the U.S. Court of Appeals for the Federal Circuit. A jury’s determination that the patent holder engaged in no invalidating public use was supported by evidence. The jury also reasonably decided that prior art did not invalidate the patent in suit and that the defendant willfully infringed the patent. However, the district court failed to explain its basis for enhancing the damages award by two-and-a-half times—close to the maximum allowable amount (Polara Engineering Inc. v. Campbell Co., July 10, 2018, Lourie, A.).

Campbell Company ("Campbell") appealed from the final judgment of the United States District Court for the Central District of California entering judgment in favor of Polara Engineering Inc. ("Polara") on its claim for infringement of claims 1–4 ("the asserted claims") of U.S. Patent 7,145,476 ("the ’476 patent") and its decision, following a jury trial, denying Campbell’s post-trial motions for judgment as a matter of law of invalidity and no willfulness, and granting Polara’s motion to enhance the damages award.

Polara is a manufacturer of accessible pedestrian signal systems ("APS") and pedestrian push buttons, produced a two-wire version of its Navigator product, which practices the ’476 patent and was first sold in September 2003. Prior to the critical date of August 5, 2003, Polara tested prototypes that satisfied the limitations of the asserted claims. A person could not determine how the device worked once it was installed merely by looking at it. In approximately 2008, Campbell developed an APS, the Advisor Advanced Accessible Pedestrian Station ("AAPS"), a two-wire APS. In 2013, Polara filed this patent infringement suit against Campbell. At the conclusion of the trial, the jury returned a special verdict finding that Campbell willfully infringed the asserted claims and that the asserted claims were not proven invalid under 35 U.S.C. §§ 102 and 103. The Federal Circuit found those findings to be sufficiently supported by the evidence but vacated the award of enhanced damages because the lower court failed to explain its reasoning for the award of nearly the maximum amount.

Public use (validity). The Federal Circuit treated the jury’s verdict of no invalidating public use "as a resolution of all genuinely disputed underlying factual issues in favor of the verdict winner." While public use more than a year before filing a patent application can invalidate the patent, "an inventor who seeks to perfect his discovery may conduct extensive testing without losing his right to obtain a patent for his invention—even if such testing occurs in the public eye." Proof of experimental use serves "as a negation of the statutory bars." The Federal Circuit agreed with Polara that "substantial evidence supports the jury’s finding of experimental use that negates application of the public use bar." Although the public use issue was close, "given this mixed factual record, we cannot say that the jury’s finding of experimental use lacked substantial evidentiary support. To the extent Campbell invites us to reweigh the evidence, we decline the invitation."

Prior art (validity). Campbell argued that the district court erred by not granting JMOL of anticipation or obviousness based on the prior art. The Federal Circuit agreed with Polara first that the district court did not commit reversible error in instructing the jury on claim construction. Polara presented substantial evidence from which the jury could have found that the prior art did not teach or suggest the "digital data signals" limitation. The fact that Campbell presented competing evidence to support its invalidity contentions did not compel a different outcome.

Enhanced damages. Campbell argued that the jury’s willfulness verdict lacked substantial evidence and the court abused its discretion in awarding enhanced damages. As a threshold matter, the Federal Circuit agreed with Polara that substantial evidence supported the jury’s finding of willful infringement. Based on the evidence adduced at trial, the jury reasonably could have found that Campbell intentionally copied the ’476 patent despite a significant known risk that its two-wire AAPS would infringe the ’476 patent. It is undisputed that Campbell was aware of the ’476 patent prior to developing its AAPS.

However, the court agreed with Campbell that the district court failed to explain the basis for the enhanced damages award, particularly where close to the maximum amount was imposed. Accordingly, the Federal Circuit vacated the amount and remanded for a redetermination with a statement of reasons.

The case is Nos. 17-1974 and 17-2033.

Attorneys: Nathaniel L. Dilger (One LLP) for Polara Engineering Inc. Christopher T. Holland (Holland Law LLP) for Campbell Co.

Companies: Polara Engineering Inc.; Campbell Co.

MainStory: TopStory Patent FedCirNews

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