Sorensen v. Rally Manufacturing, Inc. et al

Filing 240

ORDER denying 151 Defendants' Motion for Summary Judgment Without Prejudice. Signed by Judge Barry Ted Moskowitz on 8/22/2011. (mtb)(jrd)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

SOUTHERN DISTRICT OF CALIFORNIA

10
11

Jens Erik Sorensen,

Case Nos. 08cv0060 BTM (CAB);
08cv0070; 08cv0305
Plaintiff,

12
v.

ORDER DENYING DEFENDANTS’
MOTION FOR SUMMARY
JUDGMENT

13
14
15

Emerson Electric Co., et al.,
Defendants.

16
Introduction
17
These consolidated cases arise out of Plaintiff Jens Erik Sorensen’s allegations of
18
infringement of United States Patent No. 4,935,184 (the “‘184 Patent”). On August 19, the
19
remaining defendants (Emerson Electric Co., Ryobi Technologies, Inc., and Rally
20
Manufacturing, Inc., collectively “Defendants”) moved for summary judgment. Defendants
21
assert that Sorensen’s cancellation of dependent Claims 2 and 4 of the ‘184 Patent during
22
reexamination proceedings substantively changed the scope of independent Claim 1,
23
resulting in absolute intervening rights for Defendants. For the reasons set forth below, the
24
Court DENIES Defendants’ motion as premature.
25
26
Facts
27
The ‘184 Patent describes a process for creating injection-molded cup-like plastic
28
objects. In December 2007 and February 2008, the Patent and Trademark Office (“PTO”)
1

08cv0060 BTM (CAB); 08cv0070, 08cv0305

1

granted two separate requests for reexamination of the ‘184 Patent.

2

The resulting

reexamination proceedings were merged in February 2008.

3

The central topic of the reexamination proceedings, as they relate to Defendants’

4

motion, is the definition of the term “laminated walls.” The first sentence of Claim 1 of the

5

‘184 Patent claims “[a] method of cyclic injection molding a thin-walled hollow, plastic product

6

having a closed end and an open end with laminated walls terminating in a rim at the open

7

end . . . .”

8

embodiments of the patented invention must contain “laminated walls.”

Claim 1 is the only independent claim in the ‘184 Patent, and thus all

9

From the outset of the reexamination proceedings, Sorensen urged that “laminated

10

walls” should be defined as “substantially coextensive layers in [a] face-to-face contacting

11

relationship that cover and spread over one another” (“the ‘layers’ definition”).

12

Examiner initially adopted this definition in the First (non-final) Agency Action (Oct. 31, 2008).

13

This definition is consistent with Figures 2A and 2B of the ‘184 Patent, which depict the

14

creation of a cup-like object whose side walls are composed of two overlapping layers of

15

plastic.

The

16

However, in the Second (non-final) Office Action (Aug. 21, 2009), the Examiner found

17

that the “layers” definition is not sufficiently broad to cover the plastic product depicted in

18

Figures 4 and 5 and (according to the Examiner) described in Claims 2 and 4. The two

19

plastic components forming the cup-like object in Figures 4 and 5 are depicted as strips

20

running lengthwise up and down the side of the cup-like object, touching each other only

21

along their respective edges. No part of Figures 4 or 5 shows the two plastic components

22

overlapping in layers (as is depicted in Figures 2A and 2B).

23

Consequently, the Examiner broadened the definition of “laminated” to include

24

edge-to-edge abutment, stating in the Second (non-final) Office Action that “for an object to

25

be ‘laminated’ it must be composed of substantially coextensive parts in [a] face-to-face

26

contacting relationship” (the “‘edges’ definition”).

27

application of the edges definition enabled dependent Claims 2 and 4 (as supposedly

28

illustrated in Figures 4 and 5) to contain “laminated walls,” and thereby to fit within the
2

According to the Examiner, the

08cv0060 BTM (CAB); 08cv0070, 08cv0305

1

limitations of independent Claim 1. The Examiner maintained the “edges” definition in the

2

Final Office Action (Jan. 8, 2011).

3

However, after applying the “edges” definition to all instances of the phrase “laminated

4

walls,” the Examiner rejected all claims in the ‘184 Patent as anticipated by the prior art.1

5

Rather than appealing all findings contained in the Final Action, Sorensen elected (after a

6

conversation with the Examiner) to cancel Claims 2 and 4. This allowed the Examiner to

7

change the definition of “laminated walls” from the “edges” definition back to the “layers”

8

definition, and thereby to eliminate six of the nine prior art rejections contained in the final

9

action.

10

On August 19, 2011, Defendants in the present litigation moved for summary

11

judgment based on their argument that the cancellation of Claims 2 and 4 (both of which are

12

dependent on Claim 1 and are described as “embodiments” of Claim 1) substantively

13

changed the scope of Claim 1. A claim construction hearing is scheduled for Monday,

14

February 27, 2012.

15
16

Discussion

17

“The doctrine of absolute intervening rights protects an accused infringer’s right to

18

continue using, selling, or offering to sell specific products covered by reissued or

19

reexamined claims when the particular accused product had been made before the date of

20

the reissue or reexamination and the scope of the claims is substantively changed.” Marine

21

Polymer Technologies, Inc. v. HemCon, Inc., --- F.3d ---, 2011 WL 4435986, at *4 (Fed. Cir.

22

//

23

//

24

//

25

//

26
27
28

1

Most notably, the Examiner found that several claims of the ‘184 patent were
anticipated by U.S. Patent 3,178,497 (referred to in the record and by the parties as
“Moscicki”), a patent that covers injection-molded cup-like objects with cylindrical longitudinal
strips running up and down the walls of the cup.
3

08cv0060 BTM (CAB); 08cv0070, 08cv0305

1

Sept. 26, 2011) (emphasis added); see 35 U.S.C. §§ 2522 and 307(b)3. In Neupak, Inc. v.

2

Ideal Manufacturing and Sales Corp., 41 Fed. Appx. 435 (Fed. Cir. 2002), the Federal Circuit

3

explained:

4

The effect of a reexamined patent during the period before
issuance of the reexamination certificate is governed by 35
U.S.C. §§ 252 and 307(b). Under those provisions, if the
patentee makes substantive changes in the claims during
reexamination, there is an irrebuttable presumption that the
original claims were materially flawed. . . . In that setting, the
statute relieves those who may have infringed the original claims
from liability during the period before the claims are validated.

5
6
7
8
9

41 Fed. Appx. at 442, 2002 WL 1363568 at *6 (Fed. Cir. June 24, 2002) (citing Bloom

10

Engineering Co., Inc. v. North American Mfg. Co., Inc., 129 F.3d 1247, 1249 (Fed. Cir.

11

1997)). Defendants contend that Sorensen’s cancellation of Claims 2 and 4 during the

12

reexamination proceedings altered the scope of Claim 1, and therefore Defendants are

13

entitled to intervening rights with respect to products that allegedly infringed on the ‘184

14

Patent.

15

Sorensen raises a series of objections to the application of intervening rights to the

16

‘184 patent. First, he argues based on 37 C.F.R. §§ 1.116(d)(2) and 1.530(j) that the

17

Examiner could not have permitted the claim cancellations during reexamination if those

18

cancellations substantively change the scope of the remaining claims, and that this Court is

19

bound by the Examiner’s implied finding of no substantive change. Second, he suggests that

20

infringers relying on intervening rights to escape liability must show detrimental reliance on

21
2

22
23
24
25

35 U.S.C. § 252 states: “[T]he reissued patent, to the extent that its claims are
substantially identical with the original patent, shall constitute a continuation thereof and have
effect continuously from the date of the original patent. A reissued patent shall not abridge
or affect the right of any person . . . who, prior to the grant of a reissue, made . . . anything
patented by the reissued patent, to continue the use of . . . the specific thing so made, . . .
unless the making . . . of such thing infringes a valid claim of the reissued patent which was
in the original patent.”
3

26
27
28

35 U.S.C. § 307(b) states: “Any proposed amended or new claim determined to be
patentable and incorporated into a patent following a reexamination proceeding will have the
same effect as that specified in section 252 of this title for reissued patents on the right of any
person who made, purchased, or used within the United States, or imported into the United
States, anything patented by such proposed amended or new claim, or who made substantial
preparation for the same, prior to issuance of [the] certificate [issued when the time for
appeal of the reexamination has expired or any appeal proceeding has terminated.]”
4

08cv0060 BTM (CAB); 08cv0070, 08cv0305

1

an aspect of the original claims that was subsequently changed. Third, he contends that

2

intervening rights apply only where there has been a textual amendment to the claim at

3

issue. Lastly, Sorensen asks in the alternative that the Court wait until after the upcoming

4

claim construction proceedings before ruling on Defendants’ motion. The Court addresses

5

each of these arguments in turn.

6
7

A.

37 C.F.R. §§ 1.116(d)(2) and 1.530(j)

8

As a threshold issue, Sorensen argues that it is impossible, as a matter of law, for the

9

cancellations of Claims 2 and 4 to substantively change the scope of other claims. Sorensen

10
11
12

first relies on 37 C.F.R. § 1.116(d)(2), which states:
[A]n amendment made after a final rejection or other final action
(§ 1.113) in an ex parte reexamination filed under § 1.510 . . .
may not cancel claims where such cancellation affects the scope
of any other pending claim in the reexamination proceeding[.]

13
14

“Final actions,” as defined in § 1.113, include Final Office Actions. Sorensen filed his

15

amendment canceling Claims 2 and 4 in June 2010, several months after the examiner

16

issued its Final Office Action on January 8, 2010. Thus, Sorensen argues that “[t]he

17

Examiner . . . thereby acknowledged that the cancellations did not affect the scope of other

18

pending claims.” (Pl. Opp. Mem. at 5.) Sorensen’s only case citation supporting this

19

conclusion states merely that “government officials are presumed to have ‘properly

20

discharged their official duties.’” (Pl. Opp. Mem. at 5 (citing In re Portola Packaging, Inc., 110

21

F.3d 786, 790 (Fed. Cir. 1997)).)

22

Even assuming that Sorensen is correct, and the Court can presume that the

23

Examiner necessarily determined that the cancellation of Claims 2 and 4 would not affect the

24

scope of the other pending claims, Sorensen nowhere explains why such a determination

25

by the Examiner would be binding on this Court. To the contrary, Sorensen concedes

26

elsewhere in his brief that “[a] court is not bound by the PTO’s interpretation of patent claims

27

and must make its own independent determination on the legal question of claim

28

construction.” (Pl. Opp. Mem. at 16 (citing SRAM Corp. v. AD-II Eng'g, Inc., 465 F.3d
5

08cv0060 BTM (CAB); 08cv0070, 08cv0305

1

1351, 1359 (Fed. Cir. 2006)).) Sorensen argues instead that the Examiner’s presumed

2

determination of no substantive change is immune from challenge because Defendants, as

3

third parties to the reexamination proceedings, lack standing. But while Defendants cannot

4

bring a direct challenge against the PTO, they are certainly permitted to challenge relevant

5

PTO determinations in litigation against the patent holder. Syntex (U.S.A.) Inc. v. U.S.T.P.O.,

6

882 F.2d 1570, 1576 (Fed. Cir. 1989) (“[A] potential infringer may not sue the PTO seeking

7

retraction of a patent issued to another by reason of its improper allowance by the PTO. A

8

remedy must await confrontation with the patent owner. The same is true with respect to a

9

reissued patent.”).

10

Second, Sorensen argues based on 37 CFR § 1.530(j) that where, as here, the patent

11

expires during the reexamination proceedings, claim cancellations are the only permissible

12

amendments to the patent. Section 1.530(j) states:

13
14

No amendment may be proposed for entry in an expired patent.
Moreover, no amendment, other than the cancellation of claims,
will be incorporated into the patent by a certificate issued after
the expiration of the patent.

15
16

Sorensen concludes, based on the application of this regulation, that the Examiner

17

necessarily found that the cancellation of dependent Claims 2 and 4 did not have the effect

18

of amending the other claims.

19

This argument suffers from the same defect as Sorensen’s § 1.116(d)(2) argument:

20

Even if the Court can presume the Examiner must have determined that the cancellations

21

did not amend the ‘184 Patent in any other way, Sorensen has failed to show why such a

22

determination would be binding on this Court. Additionally, § 1.530(j) speaks of amendments

23

to patents, not amendments to specific claims. The plain language of this provision bars

24

textual amendments other than claim cancellations, not secondary effects caused by

25

permissible cancellations.

26

Thus, neither § 1.116(d)(2) nor § 1.530(j) bind this Court to implied, necessary findings

27

by the Examiner that the cancellations of Claims 2 and 4 did not substantively change the

28

scope of Claim 1.
6

08cv0060 BTM (CAB); 08cv0070, 08cv0305

1

B.

Suggested Reliance Requirement

2

Sorensen’s opposition brief mentions detrimental reliance in passing, stating: “[T]he

3

court in Slimfold found . . . that the accused infringer ‘did not demonstrate that it relied to its

4

detriment on any aspect of the original claims that was changed by reissue.’” (Pl. Opp. Mem.

5

at 14 (citing Slimfold Mfg. Co. v. Kinkead Indus., Inc., 810 F.2d 1113, 1117 (Fed. Cir. 1987)).)

6

However, there is no detrimental reliance requirement for infringement defendants claiming

7

absolute intervening rights, and Sorensen’s reliance on Slimfold is misplaced.

8

First, the cases listed on pages 8 and 9 of Sorensen’s opposition brief are alleged by

9

Sorensen to include “every instance where the Federal Circuit has applied the provisions of

10

§ 252 to a reexamined patent claim,” and none of these cases so much as mentions a

11

reliance requirement for intervening rights. Second, there is nothing in the language of either

12

§ 307(b) or § 252 referring to a reliance requirement. Rather, § 252 is phrased in terms of

13

rights belonging to the would-be infringer that are limited only where a post-reexamination

14

(or reissued) patent is identical to the original patent. Thus, in Engineered Data Products,

15

Inc. v. GBS Corp., 506 F. Supp. 2d 461, 468 (D. Colo. 2007), the court reasoned that

16

Slimfold “cannot be read to impose [a detrimental reliance] requirement in light of the

17

statutory language and subsequent precedent defining ‘absolute’ intervening rights . . . .”

18

Thus, Sorensen fails to establish a detrimental reliance requirement under either § 307(b)

19

or § 252.

20
21

C.

Application of Intervening Rights to Claims Not Textually Amended

22

By its plain language, 35 U.S.C. § 307(b) applies only to “proposed amended or new

23

claims.” However, Defendants’ two primary cases, University of Virginia Patent Foundation

24

v. General Electric Co., 755 F. Supp. 2d 709 (W.D.Va. 2010) and Marine Polymer

25

Technologies, Inc. v. HemCon, Inc., --- F.3d ---, 2011 WL 4435986 (Fed. Cir. Sept. 26, 2011),

26

both hold that § 307(b) can apply to an independent patent claim that has not been textually

27

amended where cancellations of other claims in that patent substantively changed the scope

28

of the independent claim. This proposition is consistent with the policy rationale
for absolute intervening rights.

See Bloom Engineering Co., Inc. v. North American
08cv0060 BTM (CAB); 08cv0070, 08cv0305
7

1

Manufacturing. Co., Inc., 129 F.3d 1247, 1249 (Fed. Cir. 1997) (“Sections 307 and 252 shield

2

those who deem an adversely held patent to be invalid; if the patentee later cures the

3

infirmity by reissue or reexamination, the making of substantive changes in the claims is

4

treated as an irrebuttable presumption that the original claims were materially flawed. Thus

5

the statute relieves those who may have infringed the original claims from liability during the

6

period before the claims are validated.”).

7

The facts of Marine Polymer closely resemble the case at bar. Marine Polymer

8

involved a patent for a material (a “polymer”) that accelerates hemostasis (the process that

9

causes bleeding to stop) and is useful in medical applications. 2011 WL 4435986, at *1. The

10

independent claims in that patent required the polymer to be “biocompatible,” i.e. not to

11

cause a negative biological reaction. Id. The dependent claims embodied polymers with

12

varying levels of biocompatibility, ranging from “no negative biological reactivity” to “mild

13

biological reactivity.” After a Markman hearing in 2008, the District Court adopted a narrow

14

construction of “biocompatibility,” defining it as “no detectable biological reactivity.” Id. at 2.

15

In 2009, during the pendency of the infringement action, the defendant filed an

16

application for reexamination of the patent. The examiner initially adopted a broader

17

construction of “biocompatibility” (“little or no detectable reactivity”), reasoning that the district

18

court’s narrower definition was inconsistent with the numerous dependent claims allowing

19

for mild biological reactivity. Id. at 3 (emphasis added). However, based on the broader

20

construction, the examiner issued a preliminary rejection of all claims as invalid in light of the

21

prior art. Id. Consequently, the patent holder canceled certain dependent claims during

22

reexamination proceedings in order to enable the examiner to adopt the district court’s

23

narrow definition, thereby avoiding the prior art rejections. Id.

24

Ultimately, the district court granted summary judgment of literal infringement in favor

25

of the patent holder. The Federal Circuit vacated the district court’s decision and granted

26

absolute intervening rights to the defendant, since “the scope of the claims actually and

27

substantively changed because of [the patent holder’s] arguments to the PTO[.]” Id. at *6.

28

In light of Marine Polymer, there is no doubt that defendants in patent actions can establish
intervening rights under §§ 252 and 307(b) as to patent claims that remain textually identical
08cv0060 BTM (CAB); 08cv0070, 08cv0305
8

1

to the original claim, provided that they can show a substantive change to the scope of those

2

claims occurring during reexamination.

3
4

D.

Need for Markman Hearing

5

Sorensen correctly argues that the Court’s determination of whether claim

6

cancellations during reexamination changed the scope of the ‘184 patent “is entirely

7

dependent upon the Court adopting pre- and post-reexamination constructions of the term

8

‘laminated.’” (Pl. Opp. Mem. at 17.) The process for determining whether there is a

9

substantive change between the pre- and post-reexamination versions of a patent claim

10

requires the Court to perform the same type of analysis as when resolving a typical claim

11

construction dispute.4 Sorensen contends, and the Court agrees, that full and proper claim

12

construction proceedings would greatly aid the resolution of Defendants’ absolute intervening

13

rights argument.

14

In University of Virginia, Defendants’ primary case in their moving brief, the Court held

15

full claim construction proceedings prior to resolving the intervening rights issue. That case

16

involved a patent for magnetic resonance imaging (“MRI”) machines, which use magnetic

17

fields to take multiple pictures of a patient. Independent Claim 1 of the patent described

18

steps taken by the machine to create the pictures, including: (a) creating a magnetic field;

19

(b) acquiring data; (c) allowing the magnetic field to dissipate during a “magnetization

20

recovery period”; and (d) repeating the cycle. 755 F. Supp. 2d at 712-14. The patent defined

21

the range of possible durations for the “magnetization recovery period” in other locations, and

22

several of these locations indicated a possible recovery period with a time of zero. Id. at 718-

23

19. Most notably, dependent Claim 4 claimed “[t]he method of claim 1, wherein said

24

magnetization recovery period has a time of zero.” Id. at 719.

25

//

26
4

27
28

See Laitram Corp. v. NEC Corp., I63 F.3d 1342, 1346-47 (Fed. Cir. 1998) (citing
Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc), aff’d, 517
U.S. 370 (1996)) (“This court reviews without deference the district court’s conclusion that
the reexamined claims remained identical in scope. . . . This rule flows from the general
principle that ‘the interpretation and construction of patent claims, which define the scope of
the patentee’s rights under the patent, is a matter of law, exclusively for the court.’”).
08cv0060 BTM (CAB); 08cv0070, 08cv0305
9

1

After the initiation of the lawsuit, the defendants applied for an ex parte reexamination

2

of the patent. Id. at 714-15. The examiner rejected all claims on the grounds that a

3

magnetization recovery period with a time of zero was anticipated by the prior art. The

4

plaintiff thereafter canceled Claim 4, and the examiner withdrew the objections. Id. at 715.

5

The defendant then moved for summary judgment based on absolute intervening rights,

6

arguing that the plaintiff's cancellation of Claim 4 substantively narrowed Claim 1, and the

7

court granted the defendant’s motion.

8

To reach its conclusion, the court conducted a Markman hearing to determine the

9

range of recovery periods allowed under the pre-reexamination version of the patent.

10

Following the Markman hearing, the court construed the pre-reexamination “magnetization

11

recovery period” to cover a range of possible durations that included a time of zero. Id. at

12

718-19. The parties agreed that the post-reexamination period did not include a time of zero.

13

In its decision, the Court reached the intervening rights issue only after a lengthy claim

14

construction discussion, informed by the earlier Markman hearing.5

15

In the present case, Defendants argued at the summary judgment hearing that under

16

Marine Polymer, the mere fact that a patent holder canceled claims during reexamination in

17

order to persuade an examiner to change its construction of a key term and withdraw prior

18

art rejections suffices to establish a substantive change in the scope of the patent. The Court

19

disagrees. The Federal Circuit’s holding in Marine Polymer that the claim cancellations made

20

during reexamination “actually and substantively” changed the scope of the patent rested on

21

its finding that the PTO’s narrow post-reexamination construction of the “biocompatibility”

22
23
24
25
26
27
28

5

This Court notes that the claim construction issues related to the intervening rights
arguments in Marine Polymer and University of Virginia were more straightforward than the
issue before this Court. Both those cases involved terms in independent claims (i.e.
“biocompatibility” and “magnetization recovery period”) that necessarily included a range of
values. The dependent claims contained embodiments with different discrete values (i.e.
specific reactivity levels and specific time periods). The patent holders in those cases
canceled dependent claims to remove discrete values from the ranges contemplated in the
independent claims. By comparison, the ‘184 Patent nowhere expressly contains a definition
of the term “laminated walls,” “laminated walls” does not refer to a range of discrete values
that are listed in the patent’s dependent claims, and the argument that the pre-reexamination
definition of “laminated walls” should be the “edges” definition requires reference to
illustrations in the patent rather than relying on the patent’s plain language. In short, the
elimination of Claims 2 and 4 does not have an obvious effect on the meaning of Claim 1.
08cv0060 BTM (CAB); 08cv0070, 08cv0305
10

1

differed from the proper pre-reexamination construction of that term. 2011 WL 4435986, at

2

*6. Similarly, the court in University of Virginia did not conclude that the claim cancellations

3

alone sufficed to create intervening rights.

4

Thus, contrary to Defendants’ position, the mere fact that Sorensen canceled

5

dependent claims during the reexamination hearing in order to persuade the PTO to adopt

6

a narrow construction of “laminated walls” does not by itself substantively change the scope

7

of the independent claims of the ‘184 Patent. Rather, Marine Polymer confirms that before

8

granting absolute intervening rights to Defendants, the Court must first determine the proper

9

construction of “laminated walls” in the pre- and post-reexamination patent. Only then can

10

the Court compare its pre-reexamination construction to the post-reexamination construction

11

and determine whether any difference in the pre- and post-reexamination constructions

12

“actually and substantively” changed the scope of the patent.

13

Defendants’ invitation to construct “laminated walls” without the benefit of full claim

14

construction proceedings.

The Court declines

15
16

Conclusion

17

Based on the forgoing, the Court DENIES Defendants’ motion for summary judgment

18

without prejudice. Defendants may renew their motion after the completion of the claim

19

construction proceedings.

20
21

IT IS SO ORDERED.

22

Dated: December 22, 2011

23

HONORABLE BARRY TED MOSKOWITZ
United States District Judge

24
25
26
27
28
11

08cv0060 BTM (CAB); 08cv0070, 08cv0305