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Keywords

settlementdamageslitigationattorneyappealwillpatent
damagesattorneyverdictmotionpatentgood faith

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Embrex, Inc. v. Service Engineering Corp., 216 F.3d 1343, 55 U.S.P.Q.2d 1161

Facts

Embrex, Inc. is the exclusive licensee of U.S. Patent No. 4,458,630, which claims methods for inoculating birds against disease by injecting vaccines into a specified region of the egg before hatching. After SEC attempted to develop a competing in ovo injection machine and conducted tests that infringed on the patent, Embrex sued SEC for patent infringement. The jury found in favor of Embrex, awarding damages and attorney fees, but the direct damages award was later challenged on appeal due to lack of substantial evidence.

Issue

Did SEC infringe on Embrex's patent, and was the damages award supported by substantial evidence?

Did SEC infringe on Embrex's patent, and was the damages award supported by substantial evidence?

Rule

Patent infringement is a question of fact, findings of which are accorded substantial deference on review. A mere offer to sell a machine that performs a patented method cannot serve as the sole basis for finding infringement of the claimed method.

Analysis

The court analyzed whether SEC's actions constituted infringement by evaluating the jury's findings and the evidence presented. The jury concluded that SEC's testing was not merely experimental but was conducted for commercial purposes, thus constituting infringement. However, the court found that the damages awarded were not supported by substantial evidence, as the only evidence of infringement was the testing, which did not demonstrate a loss of profits for Embrex.

In reaching its infringement verdict, the jury may have concluded that SEC infringed by offering to sell machines that perform the method of the '630 patent. This court addressed that precise issue in Joy Technologies Inc. v. Flakt, Inc., 6 F.3d 770, 773, 28 USPQ2d 1378, 1381 (Fed.Cir.1993). In that case, this court explained: 'The law is unequivocal that the sale of equipment to perform a process is not a sale of the process within the meaning of 271(a).'

Conclusion

The court affirmed the jury's finding of infringement but vacated the damages award due to insufficient evidence and remanded for a determination of a reasonable royalty.

This court concludes that the district court correctly construed the claims of the '630 patent. This court affirms-in-part the district court's denial of SEC's motion for JMOL on the infringement verdicts because substantial evidence supports the jury's verdict that the Davis and Rosenberger tests infringe.

Who won?

Embrex, Inc. prevailed in the case as the court upheld the jury's findings of patent infringement and entitlement to attorney fees. The court found that SEC's actions were willful and constituted a breach of the settlement agreement from prior litigation, justifying the award of attorney fees. However, the court vacated the direct damages award due to lack of substantial evidence linking SEC's actions to a quantifiable loss for Embrex.

Embrex, Inc. prevailed in the case as the court upheld the jury's findings of patent infringement and entitlement to attorney fees. The jury, in its special verdict, found that SEC acted without good faith and that Embrex deserved attorney fees and costs.

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