ABT Systems, LLC et al v. Emerson Climate Technologies, Inc. et al

Filing 558

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Defendants renewed motion for judgment as a matter of law is DENIED. (Doc. No. 530.) re: 530 MOTION for Judgment as a Matter of Law filed by Defendant Emerson Electric Co.. Signed by District Judge Audrey G. Fleissig on 6/27/14. (JWJ)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

ABT SYSTEMS, LLC, and THE
UNIVERSITY OF CENTRAL FLORIDA
BOARD OF TRUSTEES,

)
)
)
)
)
Plaintiffs / Counterclaim Defendants, )
)
vs.
)
)
EMERSON ELECTRIC CO.,
)
)
Defendant / Counterclaim Plaintiff. )

Case No. 4:11CV00374 AGF

MEMORANDUM AND ORDER
This patent infringement action is before the Court on the renewed motion (Doc.
No. 530) of Defendant Emerson Electric Co. (“Emerson”) for judgment as a matter of law
(“JMOL”), or in the alternative, for a new trial on the issue of obviousness. For the
reasons set forth below, this motion shall be denied in its entirety.
BACKGROUND
The action was filed on November 5, 2009, by Plaintiffs, the owner of the patent at
issue, “the ’017 Patent.” In the second amended complaint, Plaintiffs claimed that by
selling certain of its thermostats, Emerson committed “direct and/or contributory
infringement, and/or induce[d] infringement, of the ’017 Patent pursuant to 35 U.S.C.
§§ 271(a)-(c).” The ’017 Patent is for an “Air Distribution Fan Recycling Control” and
generally discloses a “system for controlling the operation of the circulating fan of a closed
central air conditioning (CAC) system.” When the control is incorporated into a

thermostat that is installed in a building or home as part of a CAC system, the control can
be used to periodically activate and deactivate the fan of the system at preselected intervals
after the end of the call for cooling or heating. The accused products are eight models of
Emerson thermostats that have a “Comfort Circulating Fan” (“CCF”) feature. It was this
feature that Plaintiffs asserted infringed the ’017 Patent.
The eight-day trial commenced on February 11, 2013. Emerson’s defenses at trial
included that a combination of prior patents, one from one from 1989, one from 1935, one
from 1960, and one from 1991, rendered the ’017 Patent obvious, and therefore, invalid.
Evidence was presented that the accused thermostats permit a user to set the air
conditioning system fan to operate in different ways, including AUTO, ON, PROG, and
FAN PROG (or FAN CIRC depending on the model). AUTO runs the fan only when the
cooling or heating system is on; ON runs the fan continuously; PROG allows users to
program times during the day when the fan will run continuously; and FAN PROG
corresponds to the CCF feature. Emerson’s installation manuals for the accused
thermostats instruct the user how to program, on the thermostat’s touch screen, the
factory-enabled CCF feature “to improve indoor air quality.”
The parties stipulated that the relevant time period in this case was from November
5, 2009, to April 30, 2011, and that during this time, Emerson sold 138,391 accused
thermostats. It was undisputed that these thermostats were installed in homes or other
buildings with a CAC system. At the close of the evidence, Emerson filed a motion for
JMOL (Doc. No. 458), arguing that Plaintiffs had failed to provide sufficient evidence to
give a reasonable jury a basis to find in Plaintiffs’ favor on their claims for induced
2

infringement, willfulness on Emerson’s part, and damages; and against Emerson on its
counterclaim that the ’017 Patent was obvious and thus invalid.
By agreement of the parties, the case was submitted to the jury on an
induced-infringement theory, with the jury instructed that it would have to decide four
main issues: whether Plaintiffs proved that Emerson induced infringement of the ’017
Patent; whether Emerson proved that the Patent was invalid; what damages if any Plaintiffs
proved; and whether Plaintiffs proved that Emerson’s alleged infringement was willful.
(Doc. 464 at 7.) On the issue of infringement, the jury was instructed as follows:
“Because system claims are involved here, which are not infringed until the accused
thermostats are used, downstream, in an air conditioning system, only indirect
infringement, not direct infringement, is involved here. Indirect infringement results if
Emerson induces another to infringe the ’017 patent, as will be explained further.” Id. at
10. The next instruction more fully explained the elements of induced infringement, and
the following instruction told the jury: “You are instructed that Emerson’s accused
thermostats, when installed and operating pursuant to Emerson's instructions, directly
infringe each of the asserted claims. To find that Emerson has infringed, you must still
determine whether Emerson has induced infringement, as I just mentioned.” Id. at 13.
The jury returned its verdict the same day, finding that from November 5, 2009, to
April 30, 2011, Emerson had infringed certain claims of the ’017 Patent, and that Plaintiffs
were entitled to a royalty rate of $2.25 per infringing thermostat, for a damages of
$311,379 ($2.25 x 138,391). By special interrogatory, the jury also found that after
November 5, 2009, Emerson’s infringement was not willful.
3

By Memorandum and Order dated October 9, 2013 (Doc. No. 514), the Court
denied Emerson’s motion for JMOL. On February 13, 2014, after resolving several
post-verdict motions, including denying Plaintiffs’ motion for a finding of willful
infringement prior to November 5, 2009 based on the fact that no infringement had been
found and no damages had been awarded for that period, the Court entered Judgment in
Plaintiffs’ favor in accordance with the jury’s verdict. Now before the Court is Emerson’s
renewed motion (Doc. No. 530) for JMOL, or in the alternative, for a new trial on the issue
of obviousness.
In support of its present motion, Emerson essentially reasserts the arguments it
raised in support of its initial motion for JMOL, with some expansion of the arguments on
the issue of obviousness. Emerson argues that it entitled to JMOL because (1) Plaintiffs
failed to provide sufficient evidence to establish the underlying direct infringement
required to support their induced infringement claim, by failing to identify a single person
or entity who had used the CFF feature of any of the 138,391 infringing thermostats during
the relevant time period; (2) Plaintiffs failed to prove that Emerson had the specific intent
to induce infringement; (3) Plaintiffs failed to prove damages by not demonstrating the
number of infringing thermostats, if any, that had been used in an infringing manner; and
(4) the claims of the ’017 Patent are obvious as a matter of law, and thus invalid. Emerson
argues that in the alternative, the Court should grant a new trial on the issue of obviousness
because the verdict is against the weight of the evidence on this issue, and the court
improperly failed to instruct the jury that the standard for obviousness changed in 2007.

4

DISCUSSION
Federal Rule of Civil Procedure 50(b) states that, when ruling on a renewed motion
for JMOL, “the court may: (1) allow judgment on the verdict, if the jury returned a verdict;
(2) order a new trial; or (3) direct the entry of judgment as a matter of law.” In patent
cases, a motion for JMOL pursuant to Rule 50(b) is reviewed under the law of the regional
circuit. Univ. of Pittsburgh of the Commonwealth Sys. of Higher Educ. v. Varian Med.
Sys., Inc., No. 2012–1575, 2014 WL 1387144, at *12 (Fed. Cir. April 10, 2014). Under
Eighth Circuit law, “[i]n the matter of a renewed JMOL, a court must affirm the jury’s
verdict unless, in viewing the evidence in the light most favorable to the prevailing party,
the court concludes that a reasonable jury could not have found for that party.” Hite v.
Vermeer Mfg. Co., 446 F.3d 858, 865 (8th Cir. 2006) (citation omitted). “Additionally,
the court considers all evidence in the record without weighing credibility, and makes
reasonable inferences and resolves conflicts in favor of the non-moving party.” Id.
Upon review of Emerson’s arguments, as well as of patent infringement decisions
issued by the United States Supreme Court and the Federal Circuit after this Court ruled on
Emerson’s initial motion for JMOL, the Court concludes that the renewed motion for
JMOL must be denied for the same reasons the Court denied the initial motions for JMOL.
On the question of whether there was sufficient evidence for the jury to find the underlying
direct infringement – the Supreme Court, in Limelight Networks, Inc. v. Akamai
Technologies, Inc., 134 S. Ct. 2111 (2014), reaffirmed the general proposition that
“liability for inducement must be predicated on direct infringement. . . . [I]nducement
liability may arise if, but only if, there is direct infringement.” Id. at 2117 (citation
5

omitted). But neither this case, nor any other recent case, undermines this Court’s
determination, as set forth in the Memorandum and Order of October 9, 2013, that here the
jury could have reasonably found that at least one consumer used an Emerson thermostat in
an infringing manner. See Toshiba Corp. v. Imation Corp., 681 F.3d 1358, 1364-65 (Fed.
Cir. 2012) (holding that there was sufficient circumstantial evidence for a jury to find
induced infringement without direct evidence of direct infringement by anyone during the
relevant time); 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 manner).
The Court concludes that a close question is presented on this matter, but that
ultimately, Emerson’s position fails, and the cases it relies upon on this point are
inapposite. For example, in ACCO Brands, Inc. v. ABA Locks Manufacturers Co., 501
F.3d 1307 (Fed. Cir. 2007), the Federal Circuit held that because the evidence at trial
showed that the accused device – a locking system for computers – could be used in a
noninfringing manner, the lack of a witness who testified to having used the accused device
in an infringing matter defeated the plaintiff’s induced infringement claim. Id. at 1313.
But in that case, unlike here, the evidence showed that the defendant did not provide
instructions describing the infringing method, a fact relied upon by the Federal Circuit.
Here, as noted above, Emerson provided instructions on how to use the CFF mode, and
6

there was no way to use that feature in a noninfringing manner. See Toshiba Corp., 681
F.3d at 1364-65 (distinguishing ACCO Brands, Inc. on this ground). Further, Plaintiffs
presented circumstantial evidence of actual infringing use.
The Court also rejects Emerson’s other reasserted arguments for the reasons
articulated by the Court in the October 9, 2013 Memorandum and Order.1
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Defendant’s renewed motion for judgment as a
matter of law is DENIED. (Doc. No. 530.)

AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 27th day of June, 2014.

Recent cases reviewed by the Court do not lead the Court to believe that any of these
prior rulings were in error.
1

7