FROM: Nicole DeBone
DATE: December 14, 2007
RE: Paice LLC v. Toyota Motor Corp., 2007 U.S. App. LEXIS 24357 (Fed Cir. October 18, 2007)
Lexis: 2007 U.S. App. LEXIS 24357
FACTS: Paice owned a patent (970 patent) on a hybrid electric vehicle with a drive train that employs a microprocessor and a controllable torque transfer unit (CTTU) to accept torque input from the internal combustion engine (ICE) and the electric motor. Paice combines these torques using lockable bevel gears. Toyota Motor Corporation sells three hybrid vehicles (Prius II, Highlander, and Lexus RX 400h) with a drive train similar to that of Paice that combines the torque input from the ICE and an electric motor. Toyota combines these torques with a planetary gear unit. Paice sued for Toyota infringement and requested damages and an injunction.
PROCEDURAL HISTORY: Eastern District Court of Texas found that Toyota infringed claims 11 and 39 of 970 patent owned by Paice under a doctrine of equivalents theory. The District Court provided the following claim construction for CTTU: “multi-input device or component that is controlled to transfer variable amounts of torque.†The jury reached a finding of no literal infringement after the testimony of Toyota’s expert that “because the combination of the fractional (72%) ICE torque with the MG2 torque in the accused device does not occur until after the fractional ICE torque is output from the planetary gear unit to the ring gear, there is no single “device or component†in Toyota's design that can be characterized as “multi-input.†District Court permitted Toyota to continue practicing the invention, but ordered Toyota to pay a set royalty to Paice for each car sold during the life of the patent. Toyota appealed to the Federal Circuit. Paice cross appealed the finding of no literal infringement and the denial of injunctive relief.
HOLDING: The Federal Circuit affirms the District Court’s holding that Toyota infringed the Paice patent under a doctrine of equivalence theory, but did not literally infringe. The Federal Circuit remanded the question of whether the $25 ongoing royalty rate was reasonable.
CRITICAL ANALYSIS:
The Court rejects Toyota’s first claim that the testimony of Paice’s expert only covered literal infringement, and did not fully prove infringement under a doctrine of equivalence theory. A patentee must provide particularized testimony and a linking argument with respect to the function, way, result test when such evidence is presenting to support a finding of infringement under the doctrine of equivalents. The particularized testimony requirement does not require the expert to re-start his testimony when transitioning to a doctrine of equivalents analysis. Experts are permitted to incorporate earlier testimony in order to avoid duplication. Even though Paice’s expert did not implicitly incorporate earlier testimony, the court will not find that every word he said from the time he took the stand until the moment he transitioned into doctrine of equivalents related only to literal infringement. The court found that Paice’s expert linked his testimony of how the invention worked to the function/way/result test by demonstrating the operation of the invention to the jury and shortly thereafter provided a function/way/result analysis of the unit.
The court also rejects Toyota’s second claim that Paice is precluded from applying the doctrine of equivalents to the accused product because patent 970 criticizes the Berman/TRW design. The Berman/TRW patent describes a hybrid drive train that employs a ICE, a traction motor, and a generator coupled to a planetary gear unit. Unlike the accused product, the Berman/TRW device requires a human operator to select the mode of operation (slower or higher speed). Paice and the accused product employ a microprocessor to select the most appropriate mode of operation. The Paice patent pointed out the disadvantage of the human operated selector, and that the Berman/TRW gear train from complex and difficult to manufacture economically. It was not obvious from the Paice patent which part of the Berman/TRW gear train was complex, therefore is not precluded from applying the doctrine of equivalents analysis.
The Court was unable to determine whether the district court abused its discretion in awarding the $25 royalty rate because the District Court provided no reasoning to support the selection. The Court notes that where a permanent injunction has been denied, an ongoing royalty may be imposed where “necessary†to effectuate a remedy. However, the royalty should not be granted as a matter of course. The District Court may permit the parties to work out a reasonable royalty rate by themselves, and if the parties are unable to come to an agreement the District Court may set the rate.
LIKELY FUTURE IMPORTANCE OR UNANSWERED Q: A patentee must provide particularized testimony and a linking argument with respect to the function, way, result test when such evidence is presenting to support a finding of infringement under the doctrine of equivalents. The particularized testimony requirement does not require the expert to re-start his testimony when transitioning to a doctrine of equivalents analysis. Experts are permitted to incorporate earlier testimony in order to avoid duplication
DATE: December 14, 2007
RE: Paice LLC v. Toyota Motor Corp., 2007 U.S. App. LEXIS 24357 (Fed Cir. October 18, 2007)
Lexis: 2007 U.S. App. LEXIS 24357
FACTS: Paice owned a patent (970 patent) on a hybrid electric vehicle with a drive train that employs a microprocessor and a controllable torque transfer unit (CTTU) to accept torque input from the internal combustion engine (ICE) and the electric motor. Paice combines these torques using lockable bevel gears. Toyota Motor Corporation sells three hybrid vehicles (Prius II, Highlander, and Lexus RX 400h) with a drive train similar to that of Paice that combines the torque input from the ICE and an electric motor. Toyota combines these torques with a planetary gear unit. Paice sued for Toyota infringement and requested damages and an injunction.
PROCEDURAL HISTORY: Eastern District Court of Texas found that Toyota infringed claims 11 and 39 of 970 patent owned by Paice under a doctrine of equivalents theory. The District Court provided the following claim construction for CTTU: “multi-input device or component that is controlled to transfer variable amounts of torque.†The jury reached a finding of no literal infringement after the testimony of Toyota’s expert that “because the combination of the fractional (72%) ICE torque with the MG2 torque in the accused device does not occur until after the fractional ICE torque is output from the planetary gear unit to the ring gear, there is no single “device or component†in Toyota's design that can be characterized as “multi-input.†District Court permitted Toyota to continue practicing the invention, but ordered Toyota to pay a set royalty to Paice for each car sold during the life of the patent. Toyota appealed to the Federal Circuit. Paice cross appealed the finding of no literal infringement and the denial of injunctive relief.
HOLDING: The Federal Circuit affirms the District Court’s holding that Toyota infringed the Paice patent under a doctrine of equivalence theory, but did not literally infringe. The Federal Circuit remanded the question of whether the $25 ongoing royalty rate was reasonable.
CRITICAL ANALYSIS:
The Court rejects Toyota’s first claim that the testimony of Paice’s expert only covered literal infringement, and did not fully prove infringement under a doctrine of equivalence theory. A patentee must provide particularized testimony and a linking argument with respect to the function, way, result test when such evidence is presenting to support a finding of infringement under the doctrine of equivalents. The particularized testimony requirement does not require the expert to re-start his testimony when transitioning to a doctrine of equivalents analysis. Experts are permitted to incorporate earlier testimony in order to avoid duplication. Even though Paice’s expert did not implicitly incorporate earlier testimony, the court will not find that every word he said from the time he took the stand until the moment he transitioned into doctrine of equivalents related only to literal infringement. The court found that Paice’s expert linked his testimony of how the invention worked to the function/way/result test by demonstrating the operation of the invention to the jury and shortly thereafter provided a function/way/result analysis of the unit.
The court also rejects Toyota’s second claim that Paice is precluded from applying the doctrine of equivalents to the accused product because patent 970 criticizes the Berman/TRW design. The Berman/TRW patent describes a hybrid drive train that employs a ICE, a traction motor, and a generator coupled to a planetary gear unit. Unlike the accused product, the Berman/TRW device requires a human operator to select the mode of operation (slower or higher speed). Paice and the accused product employ a microprocessor to select the most appropriate mode of operation. The Paice patent pointed out the disadvantage of the human operated selector, and that the Berman/TRW gear train from complex and difficult to manufacture economically. It was not obvious from the Paice patent which part of the Berman/TRW gear train was complex, therefore is not precluded from applying the doctrine of equivalents analysis.
The Court was unable to determine whether the district court abused its discretion in awarding the $25 royalty rate because the District Court provided no reasoning to support the selection. The Court notes that where a permanent injunction has been denied, an ongoing royalty may be imposed where “necessary†to effectuate a remedy. However, the royalty should not be granted as a matter of course. The District Court may permit the parties to work out a reasonable royalty rate by themselves, and if the parties are unable to come to an agreement the District Court may set the rate.
LIKELY FUTURE IMPORTANCE OR UNANSWERED Q: A patentee must provide particularized testimony and a linking argument with respect to the function, way, result test when such evidence is presenting to support a finding of infringement under the doctrine of equivalents. The particularized testimony requirement does not require the expert to re-start his testimony when transitioning to a doctrine of equivalents analysis. Experts are permitted to incorporate earlier testimony in order to avoid duplication