ABT Systems, LLC et al v. Emerson Climate Technologies, Inc. et al
MEMORANDUM AND ORDER IT IS HEREBY ORDERED that ABT's motion for summary judgment is granted on the question of whether the Accused Products infringe the Rudd Patents, but denied on the question of when Emerson became aware of the Rudd Patents. (Doc. No. 255.) IT IS FURTHER ORDERED that Emerson's motion for summary judgment is DENIED. (Doc. No. 272.) Signed by District Judge Audrey G. Fleissig on 1/16/2013. (NCL)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
ABT SYSTEMS, LLC; and the UNIVERSITY
OF CENTRAL FLORIDA BOARD OF
TRUSTEES on behalf of the UNIVERSITY
OF CENTRAL FLORIDA,
EMERSON ELECTRIC CO.,
Case No. 4:11CV00374 AGF
MEMORANDUM AND ORDER
This patent infringement action is before the Court on the parties’ cross motions for
summary judgment (Doc. No. 255 and Doc. No. 272). For the reasons set forth below,
Plaintiffs’ motion shall be granted in part and denied in part, and Defendant’s motion shall
be denied in its entirety.
Plaintiffs ABT Systems, Inc., and the University of Florida Board of Trustees (jointly
referred to as “ABT”) contend in their second amended complaint (Doc. No. 76) that
thermostats manufactured and/or sold by Defendant Emerson Electric Co. (“Emerson”) and
introduced into the market in 2006, infringe two patents that ABT owns: U.S. Patent No.
5,547,017 (“the ’017 Patent”), entitled “Air Distribution Fan Recycling Control,” and U.S.
Patent No. 6,431,268 B1 (“the ’268 Patent”), entitled “Air Distribution Fan and Outside Air
Damper Recycling Control,” issued in 1996 and 2002, respectively. The two patents are
referred to herein as “the Rudd Patents,” after Armin Rudd, the named inventor who is now
serving as an expert technical consultant for ABT.
By way of counterclaim (Doc. No. 93), Emerson seeks a declaratory judgment that
none of the thermostats it manufactures or sells infringe any valid and enforceable claim of
the patents; that the claims of the patents are invalid; and that the claims of the patents are
unenforceable because, among other things, during the patenting process, ABT withheld
information from the United States Patent and Trademark Office regarding the scope and
content of prior art.
The Rudd Patents generally claim an air conditioning control that causes a fan to
cycle on and off to circulate air when there is no call for heating or cooling, where the
periodic fan operation begins after a set pause from when the system stops heating or
cooling. According to ABT, this successfully addressed the issue of indoor air stagnation
and resulting discomfort during periods of no heating or cooling. ABT states that “[i]n
systems prior to the Rudd Patents, typically the fan was deactivated when temperature
and/or humidity reached the desired, preselected level; [or] sometimes the fan would
continue running for a short period of time after deactivation,” but the fan could not be set to
go on at a predetermined time after the system had been deactivated.
The Court held a Markman hearing to determine the construction of the single claim
term at issue, “recycle control.” On March 2, 2012, the Court issued its Markman Order
rejecting Emerson’s position that a thermostat and a recycle control were separate and
distinct components and should not be considered one and the same, and adopting ABT’s
position that “recycle control” meant “[a] control that exists in addition to, or integrated
into, a thermostat or humidistat for turning a fan on and off.” (Doc. No. 220.)
As more fully set forth below, ABT now argues that it is entitled to summary
judgment on its claim that Emerson induces infringement of Claims 1-6 of the ’017 Patent
and Claims 1-2, 4-7, and 9 of the ’268 Patent1 by selling nine models of Emerson
thermostats (“the Accused Products”)2 to customers who have the thermostats installed in
their air conditioning systems by a contractor in a necessarily infringing manner, as
instructed and intended by Emerson. Emerson argues that it is entitled to summary
judgment because the Rudd Patents are invalid in that they were anticipated by prior art, and
they constitute combinations of known prior art that would have been obviously apparent to
a person of ordinary skill in the art. Emerson also argues that it cannot be liable for willful
infringement because it did not know of the Rudd Patents prior to this lawsuit and because
its invalidity defense is objectively reasonable. Each side argues that the opposing side’s
motion should be denied because material factual issues remain to be resolved.
By Memorandum and Order dated December 26, 2012, the Court denied
ABT’s motion to amend its final infringement contentions to include dependent claims 3
and 8 of the ’268 Patent. (Doc. No. 332.)
The Accused Products are manufactured and/or sold through Emerson’s
ARGUMENTS AND EVIDENCE OF THE PARTIES
ABT argues that when the Accused Products are installed and operated, as
specifically directed and intended by Emerson, they infringe the asserted claims of the Rudd
Patents. Emerson asserts that this violates 35 U.S.C. § 271(b), which provides that a party
who “actively induces infringement of a patent shall be liable as an infringer.” In support of
its argument, ABT has submitted literature by Emerson related to the Accused Products,
such as installation manuals and consumer and trade brochures that relate to the Accused
Products, and other evidence, including deposition testimony.
In its memorandum in support of its motion, ABT compares the asserted claims of the
Rudd Patents with the Emerson literature to show how each claim is infringed once the
Accused Products are installed in an air conditioning system. ABT has also submitted Mr.
Rudd’s expert report in which he explains how the manuals instruct installers to
interconnect the Accused Products with components of an air conditioning system, such as a
circulating fan and ducts, leading to infringing use by the customer with respect to all the
relevant claims of the Rudd Patents. (Doc. No. 326-1.) ABT points to Emerson’s
admissions that admitted that Emerson made multiple sales of the Accused Products and that
the Accused Products were installed in homes and buildings in the relevant time period of
this case. ABT also presented the deposition testimony of a representative of a distributor of
Emerson thermostats, who testified that he had installed a representative Accused Product to
function in an air conditioning system with a circulating fan and ducts, following the
directions in Emerson’s installation manuals (Doc. No. 316-1), and the deposition testimony
of Emerson’s manager of intellectual property that the accused thermostats were meant to
function in a central air conditioning system with ducts and fans (Doc. No. 211-3).
Emerson counters that it cannot be liable for direct infringement because it does not
sell the accused thermostats “as part of any air conditioning system, and Emerson has no
knowledge of or control over the components of any system in which the accused
thermostats are installed.” Emerson argues that “it is inappropriate for plaintiffs to tag
Emerson with liability for inducing infringement merely because it sold these thermostats to
various distributors, who may have installed the thermostats at issue.” (Doc. No. 304 at 4.)
According to Emerson, because the accused thermostats do not themselves contain elements
such as a fan, a heat pump, or ducts, which are elements of the asserted claims of the Rudd
Patents, Emerson cannot be liable for direct infringement.
Recognizing that proving a claim of inducing infringement requires ABT to prove
that Emerson had a culpable state of mind, ABT also submits the following three pieces of
evidence in support of its argument that Emerson had knowledge of the Rudd Patents “well
prior to this lawsuit:”
(1) A letter dated February 6, 1995, from Mr. Rudd to John Sartain, the then Product
Manager of Emerson’s White-Rodgers Division, referencing a discussion the two men had
had at a trade show in Chicago a week earlier, about Mr. Rudd’s then pending patent for the
fan recycling control. (Doc. No. 296-4.)
(2) A journal entry by Mr. Rudd dated February 19, 1996, that he spoke that day (at a
trade show in Atlanta) with Mr. Sartain, Mr. Sartain’s “boss” and Bart Toth, an electrical
engineer at Emerson.3 The entry states, “send John copy of patent”; that Carl Meuller, the
chief electronics engineer at White-Rodgers, would be there the next day; and that “they
may be interested in working with me.” (Doc. No. 297-1 at 3.)
(3) A letter dated September 12, 1996, from Mr. Rudd to Mr. Sartain referencing
their discussion of February 19, 1996, and a discussion Mr. Rudd had with Mr. Meuller the
next day. Mr. Rudd wrote that Mr. Meuller had shown interest and wanted to communicate
again after the patent issued, which Mr. Rudd wrote had now “finally issued.” (Doc. No.
296-5.) Emerson has submitted the deposition testimony of Mr. Sartain that some time after
the letters sent by Mr. Rudd, Emerson designed thermostats that would initiate the fan after
a predetermined period of time.
Emerson responds that it cannot be liable for inducing infringement because it was
not aware of the Rudd Patents until the filing of this lawsuit, and once it had knowledge of
the patents-in-suit, it did not induce any infringing acts nor knew or should have known that
selling the Accused Products would induce infringement. Emerson submits the deposition
of Mr. Toth dated November 15, 2011, attesting that he did not recall ever talking to Mr.
Rudd or ever receiving or reviewing a Rudd patent. (Doc. No. 305-1.) Emerson also refers
Mr. Toth is the named inventor of Emerson’s U.S. Patent No. 6,318,639,
entitled “Thermostat with Temporary Fan On Function,” issued on November 20, 2001.
This patent cites the Rudd ’017 Patent.
to the deposition of Mr. Sartain stating that he vaguely recalled attending the trade show in
Chicago in January 1995, but had no memory of discussing a fan recycle control with Mr.
Rudd, or of receiving Mr. Rudd’s February 6, 1995 letter, Mr. Rudd’s September 19, 1996
letter, a copy of the Rudd ’017 patent, or a copy of a nondisclosure agreement from Mr.
Rudd. He further testified that when he would receive unsolicited letters like those sent by
Mr. Rudd, it was his practice to take no action because it was not Emerson’s general
practice to license patents. (Doc. No. 275-6.)
Emerson asserts that “[t]here are no Emerson documents or testimony that connect or
corroborate Mr. Rudd’s discussions in 1995 or the 1996 letter to Sartain with the
development of the accused thermostats, the first of which was developed and sold a decade
later in 2006.” (Doc. No. 304 at 10.) Emerson adds that once it became aware of the
patents-in-suit, it had a reasonable belief that they are invalid for the reasons asserted in its
own motion for summary judgment. This belief was based, at least in part, upon an oral
opinion by Kevin Pumm, an intellectual property attorney who worked for Emerson, that
upon conducting a patent search in 2007 related to fan activation in thermostats for air
conditioning systems, he advised Emerson that he had uncovered the Vogelsang Patent, and
that Emerson “should feel free to practice a thermostat that deactivates air conditioning and
in a manner that causes operation of a fan after deactivating the thermostat to remedy
stratification.” (Doc. No. 310-7 at 11.)
In support of its own motion for summary judgment, Emerson argues that the Rudd
Patents are not valid because two prior patents “anticipated” the Rudd Patents: “the
Nakatsumo Patent” issued in 1991; and a “Honeywell Patent” for a thermostat that,
according to Emerson, was sold in the United States by August 1995.
Emerson also argues that the Rudd Patents are invalid under the doctrine of
“obviousness,” because they simply combine or rearrange prior patents. Emerson maintains
that a person of ordinary skill in the art would be motivated to combine the periodic fan of
the prior art with the prior art timer that begins with a pause or an “off time.” Emerson
points to five prior patents in support of this argument: “the Cornelius Patent,” “the
Nakatsumo Patent,” “the Vogelzang Patent,” “the Petrone Patent,” and “the Chirnside
Patent.” According to Emerson, “the periodic fan disclosed in references such as Cornelius,
Nakatsuno or Vogelzang with the pause in fan operation as described in Petrone results in
exactly what a person of ordinary skill in the art would anticipate: a fan that pauses for a set
time at the end of the call for heating or cooling before it begins its periodic operation.”
(Doc. No. 273.)
ABT responds that the Cornelius, Nakatsuno, and Vogelzang Patents each fails to
disclose periodic fan operation as disclosed in the Rudd Patents. For example, ABT asserts
that the Nakatsuno Patent’s “single activation of the fan between two cooling operations is
very different from the periodic activation and deactivation of the fan recited in the Rudd
Patent claims.” (Doc. No. 308 at 6.) Emerson also asserts that Emerson’s evidence that the
relevant Honeywell thermostat was publically available by August 1995 is “inconclusive and
unreliable.” Id. at 7. Emerson challenges the credibility of ABT’s witnesses on this matter,
and presents its own evidence that it maintains “tends to show” that the Honeywell
thermostat in question was not prior art.
ABT points to “secondary considerations,” such as the failure of others to
successfully address, prior to the Rudd Patents, the problem of air stagnation, as evidence
that the Rudd Patents were not obvious.
Summary Judgment Standard
In a patent case, “[a]fter the claims at issue have reasonably been construed, a district
court may grant summary judgment ‘when it is shown that the infringement issue can be
reasonably decided only in favor of the movant, when all reasonable factual inferences are
drawn in favor of the non-movant.’” Kraft Foods, Inc. v. Int’l Trading Co., 203 F.3d 1362,
1366 (Fed. Cir. 2000) (quoting Voice Techs. Group, Inc. v. VMC Sys., Inc., 164 F.3d 605,
612 (Fed. Cir. 1999)). Summary judgment is appropriate if no genuine issues of material
fact exist, such that the moving party is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(a); OSRAM Sylvania, Inc. v. Am. Induction Techs., Inc., 701 F.3d 698, 704 (Fed. Cir.
ABT’s Motion for Summary Judgment
“Infringement analysis involves two steps. First, the claim scope is determined
without regard to the accused device. . . . Second, the properly construed claim is compared
with the accused device to determine whether all of the claim limitations are present either
literally or by equivalent. This second step is a question of fact.” Optical
Disc Corp. v. Del Mar Avionics, 208 F.3d 1324, 1333-34 (Fed. Cir. 2000) (citations
A device that does not literally infringe a claim may nonetheless infringe
under the doctrine of equivalents if every element in the claim is literally or
equivalently present in the accused device. One way that a patentee may
prove that a particular claim element is met under the doctrine of equivalents
is by showing that the accused product performs substantially the same
function in substantially the same way with substantially the same result as
claimed in the patent.
Energy Transp. Grp., Inc. v. William Demant Holding A/S, 697 F.3d 1342, 1352-53 (Fed.
Cir. 2012) (citations omitted).
As noted above, the Patent Act provides that a party who “actively induces
infringement of a patent shall be liable as an infringer.” 35 U.S.C. § 271(b). Inducing
infringement under § 271(b) requires that a plaintiff establish evidence of culpable conduct
directed toward encouraging another’s direct infringement. DSU Med. Corp. v. JMS Co.,
Ltd., 471 F.3d 1293, 1305 (Fed. Cir. 2006). “Unlike direct infringement, induced
infringement is not a strict liability tort; it requires that the accused inducer act with
knowledge that the induced acts constitute patent infringement.” Akamai Techs., Inc. v.
Limelight Networks, Inc., 692 F.3d 1301, 1308 (Fed. Cir. 2012) (en banc).
Inducement requires a showing that the alleged inducer knew of the patent,
knowingly induced the infringing acts, and possessed a specific intent to
encourage another’s infringement of the patent. Intent can be shown by
circumstantial evidence, but the mere knowledge of possible infringement will
Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1328 (Fed. Cir. 2009) (citation
[I]nducement does not require that the induced party be an agent of the
inducer or be acting under the inducer’s direction or control to such an extent
that the act of the induced party can be attributed to the inducer as a direct
infringer. It is enough that the inducer causes, urges, encourages, or aids the
infringing conduct and that the induced conduct is carried out.
Akamai Techs, Inc., 692 F.3d at 1308 (citation omitted). There can be no induced
infringement without direct infringement by a third party or parties. Id. (“That principle,
that there can be no indirect infringement without direct infringement, is well settled.”).
Lastly, the patent owner bears the burden of proving infringement. Dynacore Holdings
Corp. v. U.S. Philips Corp., 363 F.3d 1263, 1273 (Fed. Cir. 2004).
The Court finds Emerson’s argument that it cannot be liable for inducing
infringement because the Accused Products themselves do not encompass all the asserted
claims of the Rudd Patents, such as a circulating fan or ducts, to be without merit. The
Court concludes that ABT has established that installation and operation of the Accused
Products, pursuant to Emerson’s instructions, result in direct infringement of the Rudd
Patents by third parties. ABT did so by convincingly showing that the Accused Products,
when installed and in operation, meet all limitations of the relevant claim terms. (Doc. No.
256 at 9-18.)4 Cf. Advanced Software Design Corp. v. Fiserv, Inc., 641 F.3d 1368, 1376
To the extent that any of the Accused Products induce infringement of
dependent Claims 3 and 8 of the ’268 Patent, Emerson will not be held liable for such
inducement, as these claims were not part of ABT’s Final Claim Contentions. In
addition, the Court questions whether the “GAS2” scenario outlined in ABT’s argument
(Doc. No. 256 at 11) induces infringement of the relevant claims of the Rudd Patents, as
that scenario seems to activate the fan of an air conditioning system based on a
preselected temperature after the system shuts down, rather than on a preselected time. In
its response to ABT’s motion for summary judgement, Emerson did not specifically
(Fed. Cir. 2011) (remanding case to the district court to determine whether evidence that
alleged infringer sold its accused software to its customers and helped them install it was
sufficient circumstantial evidence of direct infringement by the customers to find induced
Significantly, Emerson has provided no evidence to the contrary, and has admitted
that it made multiple sales of the Accused Products and that the Accused Products were
installed in homes and buildings in the relevant time period of this case. (Doc. No. 304-1 28
& 29.) Nor has Emerson attempted to show that any one of the Accused Products, when
installed, did not directly infringe. This potentially exposes Emerson to liability, assuming
the patents are valid and enforceable. See Akamai, 692 F.3d at 1305-06 (explaining that
when claims are directed to a product or apparatus, the entity that installs the final part and
thereby completes the claimed invention is a direct infringer); Shumaker v. Gem Mfg. Co.,
311 F.2d 273, 276 (7th Cir. 1962) (holding that the defendant, who was accused of
infringing claims of a patent for a pair of wind deflectors attached to rear corner posts of
station wagon to break up vacuum formed during forward movement of vehicle, was liable
for inducing others to infringe the patents by selling others the defendant’s deflectors with
intent that the deflectors be installed in rear corner posts of station wagon in an infringing
But, one of the factual questions necessary to resolve in ABT’s favor in order to grant
challenge this scenario, but will not be precluded from doing so at trial.
ABT’s motion for summary judgement is when did Emerson become aware of the Rudd
Patents? The Court’s review of the record indicates that when taking the evidence in the
light most favorable to Emerson, the answer to this question remains in genuine dispute,
precluding the grant of summary judgment to ABT. See, e.g., RF Del., Inc. v. Pac. Keystone
Techs., Inc., 326 F.3d 1255, 1268 (Fed. Cir. 2003) (reversing the grant of summary
judgment of non-infringement where there was a genuine issues of material fact concerning
whether the defendant knew about the patents at issue).
In addition, while as discussed below, the Court rejects Emerson’s arguments for
summary judgment on its behalf on the issue of the Rudd Patents’ validity, the Court cannot
say as a matter of law that Emerson’s reasonable-belief defense to the allegation that it
induced infringement, i.e., Emerson’s reasonable belief that the Rudd Patents are invalid, is
without merit. See, e.g., DSU Med. Corp., 471 F.3d at 1307 (holding that a jury question
was presented on the issue of the defendant’s intent to induce infringement where record
contained evidence that the defendant did not believe its devise infringed).
Emerson’s Motion for Summary Judgment
Title 35 U.S.C. § 102(a) provides that “[a] person shall be entitled to a patent unless .
. . the invention was known or used by others in this country, or patented or described in a
printed publication in this or a foreign country, before the invention thereof by the applicant
for patent . . . .” To prove that a claim is invalid due to anticipation, the accused infringer
must show that “each and every limitation is found either expressly or
inherently in a single prior art reference.” ArcelorMittal France v. AK Steel Corp., 700 F.3d
1314, 1322 (Fed. Cir. 2012) (citation omitted); see also Am. Calcar, Inc. v. Am. Honda
Motor Co., 651 F.3d 1318, 1341 (Fed. Cir. 2011) (“To be anticipatory, a reference must
describe, either expressly or inherently, each and every claim limitation and enable one of
skill in the art to practice an embodiment of the claimed invention without undue
“Patents are presumed to be valid and invalidity must be proven by clear and
convincing evidence.” OSRAM Sylvania, Inc., 701 F.3d at 704. “Anticipation is a question
of fact” and “[w]hat a prior art reference discloses” is also a factual question. ArcelorMittal
France, 700 F.3d at 1322, 1324; see also OSRAM Sylvania, Inc., 701 F.3d at 705-06
(reversing grant of summary judgment finding anticipation where there was a dispute of
material fact as to how a person of ordinary skill would understand the limitations in the
A claimed invention is unpatentable if the differences between it and the prior art are
such that the subject matter as a whole would have been obvious at the time the invention
was made to a person having ordinary skill in the pertinent art. 35 U.S.C. § 103(a). To
invalidate a patent claim based on obviousness, a challenger must demonstrate “by clear and
convincing evidence that a skilled artisan would have been motivated to combine the
teachings of the prior art references to achieve the claimed invention, and that the skilled
artisan would have had a reasonable expectation of success in doing so.” ActiveVideo
Networks, Inc. v. Verizon Commc’ns, Inc., 694 F.3d 1312, 1327 (Fed. Cir. 2012) (citation
omitted); see also OSRAM Sylvania, Inc., 701 F.3d at 706-07.
“The ultimate determination of whether an invention would have been obvious is a
legal conclusion based on underlying findings of fact.” C.W. Zumbiel Co. v. Kappos, ___
Fed. Cir. ___, 2012 WL 6699513, at *3 (Fed. Cir. Dec. 27, 2012). There are four
underlying factual inquiries: “the scope and content of the prior art, the differences between
the prior art and the claimed invention, the level of ordinary skill in the field of the
invention, and any relevant objective considerations.” Id.
The Supreme Court has warned that while an analysis of any teaching, suggestion, or
motivation to combine known elements is useful to an obviousness analysis, courts must
adopt a flexible approach that asks whether the claimed invention is more than the
predictable use of prior art elements according to their established functions. KSR Int’l Co.
v. Teleflex, Inc., 550 U.S. 398, 415-17 (2007). The combination of familiar elements
according to known methods is likely to be obvious when it does no more than yield
predictable results. Id. at 416.
This is not to say that a patent composed of several elements is proved obvious
merely by demonstrating that each of its elements was, independently, known in the prior
art; a court must look to,
interrelated teachings of multiple patents; the effects of demands known to the
design community or present in the marketplace; and the background
knowledge possessed by a person having ordinary skill in the art, all in order
to determine whether there was an apparent reason to combine the known
elements in the fashion claimed by the patent at issue.
Id. at 418.
Here, the Court is not prepared to say that the record mandates resolving the abovenoted factual questions in Emerson’s favor. Many material facts remain in genuine dispute.
For example, when did the Honeywell thermostat in question become publically available?
This makes summary judgment in favor of Emerson inappropriate. See, e.g., OSRAM
Sylvania, Inc., 701 F.3d at 708 (reversing grant of summary judgment finding obviousness,
where factual issues remained).
IT IS HEREBY ORDERED that ABT’s motion for summary judgment is granted
on the question of whether the Accused Products infringe the Rudd Patents, but denied on
the question of when Emerson became aware of the Rudd Patents. (Doc. No. 255.)
IT IS FURTHER ORDERED that Emerson’s motion for summary judgment is
DENIED. (Doc. No. 272.)
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 16th day of January, 2013.
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