IP Law Daily New trial warranted on damages, but not infringement of rock dust blower patent
Monday, March 16, 2020

New trial warranted on damages, but not infringement of rock dust blower patent

By Cheryl Beise, J.D.

Distributor of rock dust blowers waived invalidity argument and failed to show jury instruction errors.

A distributor of rock dust blowers used in mining operations, which was found to have infringed a competitor’s design patent, failed to demonstrate that it was entitled to a new trial on the issues of liability and patent validity, the U.S. Court of Appeals for the Federal Circuit has decided. GMS Mine Repair and Maintenance failed to show any errors in the district court’s jury instruction and waived its argument that Hafco Foundry and Machine Company’s asserted patent was invalid. The case was remanded to the district court to proceed with its stayed new trial on damages. The lower court had vacated the jury’s award of $123,650 in lost profits damages as unsupported by the evidence. Circuit Judge Pauline Newman concurred in the majority’s judgment, but disagreed with the majority’s decision to remand the case for a new damages trial. Judge Newman would accept Hafco’s proposed remittitur to $110,000, as proven lost profits damages (Hafco Foundry and Machine Co., Inc. v. GMS Mine Repair and Maintenance, Inc., March 16, 2020, per curiam).

Hafco Foundry and Machine Company, Inc., owns a patent covering the ornamental design for a "Rock Dust Blower," U.S. Design Patent No. D681,684S ("the ’684 patent"). This device is used to distribute rock dust in areas such as coal mines to control the explosive hazards of coal dust. In 2014, Hafco entered into a distribution agreement with Pioneer Conveyor, an affiliate of GMS Mine Repair and Maintenance, Inc. ("GMS"), for Pioneer Conveyor to distribute Hafco rock dust blowers—sometimes called "can dusters"—to mining customers. After the distribution agreement terminated in May 2015, GMS began selling allegedly infringing rock dust blowers to mining customers. The rock dusters at issue consisted of a 55-gallon drum with a connection on the bottom for attaching an air compressor and a discharge hose.

Hafco sued GMS for infringement of the ’684 patent. The district court denied GMS’s motion challenging patent validity on the ground that the ’684 patent did not claim a proper design because all the elements of the device were functional. After a three-day trial in May 2017, the jury found that GMS had infringed the ’694 patent and that the infringement was willful. The jury awarded damages of $123,650. In May 2017, the court entered judgment in favor of Hafco and awarded $123,650 in damages. Both parties filed post-trial motions. The court granted Hafco’s motion for a permanent injunction. The court also tossed out the jury’s damages award, finding that Hafco failed to meet its burden of proving lost profits. On GMS’s motion, the district court remitted the damages award to zero and offered a new trial on damages, which was stayed pending appeal. The court also denied Hafco’s motion for reconsideration, which sought to remit the jury’s award to an amount no less than $110,000, representing the actual amount of lost profits damages.

GMS appealed, raising two issues: whether it was entitled to judgment as a matter of law on the issue of infringement; and, in the alternative, whether it was entitled to a new trial on the issue of infringement due to errors of law in the jury instructions. Hafco did not cross appeal on any issue relating to damages.

Validity and infringement. On appeal, GMS argued for the first time that, when certain functional and prior art aspects of the ’684 patent are excluded, the design of its rock dust blower does not infringe the claimed design of the ’684 patent as a matter of law. However, because GMS never made this non-infringement argument before the district court, nor presented relevant evidence as to functionality to the jury, GMS did not preserve this argument on appeal.

Jury instructions. To challenge a jury instruction, it must be established that "(1) the district court erred; (2) the error is plain; ‘(3) the error affects substantial rights; and (4) ... the error seriously affects the fairness, integrity or public reputation of judicial proceedings.’" Objection to the presence or absence of an instruction must be timely raised during the trial proceeding, and the correct instruction offered and rejected.

GMS conceded that it did not make a proper objection to the district court’s jury instructions at trial. However, GMS stated that since the instructions were incorrect as a matter of law, GMS was entitled to a new trial. Infringement of a design patent is determined from the viewpoint of the ordinary observer, comparing the patented design with the article’s overall appearance. The jury instructions defined the ordinary observer as "a person who buys and uses the product at issue." The Federal Circuit found jury was correctly instructed that the question is how the ordinary observer would view the article as a whole.

GMS also contended that the jury should have been instructed to "familiarize yourself with each of the prior art designs that have been brought to your attention." Hafco responded that GMS did not present "even a scintilla" of prior art to the jury, nor did it submit a jury instruction on prior art. The Federal Circuit sided with GMS. "Given that there was no prior art introduced at trial, no attempt by GMS to introduce the prior art, and no proposed jury instruction on this issue, the purported exclusion of this instruction cannot be error," the appeals court said. GMS failed to show that a new trial was warranted.

The Federal Circuit accordingly affirmed the infringement judgment and the district court’s denial of GMS’ request for a new trial. The case was remanded for further proceedings, including "any proceedings necessary for a final judgment on damages."

Concurring/dissenting opinion. Circuit Judge Pauline Newman wrote separately, concurring in the court’s merits judgment, but disagreeing with the court’s decision to remand for a new trial on damages. Judge Newman opined that the Federal Circuit should resolve the matter of damages and accept Hafco’s proposed remittitur to $110,000 as the amount of lost profits damages. According to Judge Newman, remittitur to that amount was a more reasonable action than remittitur to zero, because it would implement the jury’s verdict and intent.

This case is No. 18-1904.

Attorneys: Andrew G. Fusco (Bowles Rice, LLP) for Hafco Foundry & Machine Co. Inc. James R. Lawrence, III (Michael Best & Friedrich LLP) for GMS Mine Repair and Maintenance, Inc.

Companies: Hafco Foundry & Machine Co. Inc.; GMS Mine Repair and Maintenance, Inc.

MainStory: TopStory Patent FedCirNews GCNNews

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