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Court of Appeals Vacates Obviousness Jury Verdict

By Stephanie Weiner – Edited by Evelyn Breithaupt
Callaway Golf Co. v. Acushnet Co., 2009-1076 (Fed. Cir. Aug. 14, 2009)
Slip Opinion

On August 14, 2009, the Court of Appeals for the Federal Circuit reversed the District Court for the District of Delaware’s order of summary judgment for the plaintiff on anticipation and vacated its entry of a jury verdict that a dependent claim was invalid for obviousness, but that the independent claim from which it stemmed was non-obvious. The Federal Circuit determined that the obviousness judgment was based upon irreconcilably inconsistent jury verdicts. This case raises the controversial issue of whether juries are appropriate in patent validity cases.

IP Watchdog notes that while the Federal Circuit decision itself is not surprising, it is rare to see a decision out of the District of Delaware that is so “
obviously flawed.” The Patent Prospector examines some of the evidentiary issues raised on appeal.  The Wall Street Journal Law Blog gives some useful background of the case.

Callaway and Acushnet are golf equipment manufacturers. At issue were four of Callaway’s golf ball patents, U.S. Patent Nos. 6,210,293, 6,503,156, 6,506,130 and 6,595,873, known as the “Sullivan patents.” These specify a “dual-personality” ball — a golf ball that is capable of travelling great distances, yet does not exhibit diminished playability or durability — qualities not typically combined in one ball. Callaway sued Acushnet for patent infringement on February 9, 2006, in the United States District Court for the District of Delaware, claiming that three of Acushnet’s Titleist-brand golf balls infringed various claims of the Sullivan patents. Acushnet stipulated that its golf balls infringed, but contended that the asserted claims were invalid for anticipation and obviousness.

On the anticipation issue, Acushnet claimed that U.S. Patent No. 4,431,193 (“Nesbitt”), anticipates the Sullivan patents as a matter of law, when properly viewed as a single reference with U.S. Pat. No. 4,274,637 (“Molitor ’637”), which Acushnet contended Nesbitt incorporates. The district court granted Callaway’s cross motion for summary judgment on anticipation, concluding that Nesbitt does not incorporate Molitor ’637 by reference and that without Molitor, Nesbitt does not anticipate as a matter of law. On appeal, the Federal Circuit reversed.  Writing for a unanimous panel, Circuit Judge Dyk held that Nesbitt does incorporate Molitor ’637 by reference, concluding that Acushnet raised a genuine question of material fact concerning anticipation.

The question of obviousness was tried before a jury. Acushnet contended that the various separate elements of the Sullivan patents were all well known in the prior art — relying on Nesbitt, Molitor ’637, and three additional golf ball patents — and that one of skill in the art would have had reason to combine the prior art and would have had a reasonable expectation of success. The jury returned a verdict that dependent claim 5 of the ’293 patent was invalid for obviousness, but the remaining eight claims (including independent claim 4 of the ’293 patent) were not invalid. Although the district court agreed with Acushnet that these verdicts were irreconcilably inconsistent, it nevertheless denied Acushnet’s motion for a new trial, finding the inconsistency harmless since Acushnet stipulated that it infringed each of the patents, three of which were found valid. The district court subsequently issued a permanent injunction against Acushnet that prohibited it from selling Pro V1 products that used the patents in question.

The Federal Circuit vacated entry of the jury verdict on appeal. The court held that a broader independent claim cannot be non-obvious where a dependent claim stemming from that independent claim is invalid for obviousness; thus the verdicts with respect to claim 5 of the ’293 patent (invalid) and claim 4 of that patent (not invalid) were inconsistent. Rejecting the district court’s reasoning, the Federal Circuit determined that a new trial rather than entry of judgment was required as to claims 4 and 5 of the ’293 patent. The appeals court also lifted the injunction.  The Federal Circuit affirmed, however, the district court’s determination that Acushnet was not entitled to judgment as a matter of law on obviousness. The Federal Circuit also affirmed the district court’s claim construction as well as various evidentiary rulings.

Posted On Aug - 23 - 2009 Comments Off

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