Lee v. Mike's Novelties , 543 F. App'x 1010 ( 2013 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
JAKE LEE,
Plaintiff-Appellee,
v.
MIKE’S NOVELTIES, INC. (doing business as Mike’s
Worldwide Imports) AND MANISCH CHANDER (also
known as Mike Chander, Manisch Chandra, and
Mike Chandra),
Defendants-Appellants.
______________________
2013-1049
______________________
Appeal from the United States District Court for the
Central District of California in No. 10-CV-2225, Judge
John A. Kronstadt.
______________________
Decided: November 21, 2013
______________________
ANTHONY H. HANDAL, Handal & Morofsky, LLC, of
Fairfield, Connecticut, argued for plaintiff-appellee.
LOUIS F. TERAN, SLC Law Group, of Pasadena, Cali-
fornia, argued for defendants-appellants.
______________________
2 LEE v. MIKE'S NOVELTIES
Before DYK, MOORE, and WALLACH, Circuit Judges.
DYK, Circuit Judge
Defendants Mike’s Novelties, Inc., d.b.a. Mike’s
Worldwide Imports and Manisch Chander (collectively
“MWI”) appeal a judgment of the United States District
Court for the Central District of California. The district
court entered a judgment in favor of plaintiff Jake Lee
(“Lee”) after a jury found that MWI willfully infringed the
asserted claims of U.S. Patent No. 6,418,936 (“the ’936
patent”), rejected claims of invalidity, and awarded
$40,000 in lost profits. Based on the willfulness finding,
the district court awarded Lee enhanced damages of
$70,000 under 35 U.S.C § 284. The court also awarded
attorney’s fees of $231,025 after making an exceptional
case finding under 35 U.S.C. § 285 based on willful in-
fringement and litigation misconduct. MWI appeals on
multiple grounds, alleging, inter alia, that the district
court erred in construing the asserted claims, and that
the evidence was not sufficient to support the jury verdict
of infringement. MWI also challenges the finding of
willful infringement and the awards of enhanced damages
and attorney fees.
We agree with the district court’s claim construction
and affirm the finding of infringement and no invalidity.
However, we reverse the finding of willfulness because
the defendant’s non-infringement arguments were not
objectively unreasonable. We accordingly reverse the
award of enhanced damages. Because the district court’s
exceptional case finding relied on both the willfulness
finding and a finding of litigation misconduct, we remand
the case to the district court to determine whether the
litigation misconduct considered alone would support an
exceptional case finding and award of attorney fees.
LEE v. MIKE'S NOVELTIES 3
BACKGROUND
The invention claimed in Lee’s ’936 patent is a metal
tobacco pipe designed to resemble a Colt Six Shooter
pistol. Figure 1 of the ’936 patent, depicting the preferred
embodiment of the claimed invention, is reproduced
below. JA 89.
The topmost part is a cylindrical brass turret, labeled 51,
with multiple magazines for housing tobacco. ’936 patent
col. 1 ll. 7-11. The turret can be rotated so that the user
can smoke tobacco held in any of the magazines. The
turret sits on top of the manifold, labeled 20, which is
made of a lighter material, such as aluminum. For smoke
to pass from the magazines of the turret to the user, the
magazines must stay aligned with openings in the mani-
fold, which is connected to the hollow stem, shown by
label 12. At the end of the stem is the mouthpiece, labeled
16. Although the turret can be rotated, it remains sta-
tionary relative to the manifold because it “is made of
material heavier than that of the manifold.” ’936 patent
col. 2 ll. 11-12. The weight differential thus ensures
consistent alignment between turret and manifold so that
smoke can pass through the stem when the user inhales.
The ’936 patent includes two independent claims,
claim 1 and claim 11, which use similar language to
4 LEE v. MIKE'S NOVELTIES
describe the functional significance of the weight differen-
tial between the turret and manifold. The pertinent
portion of independent claim 1 recites
A metal tobacco pipe in its assembly comprising
a manifold . . .
a stem . . .
a turret having a plurality of magazines rotatably
mounted on said manifold . . .
...
whereby any one of said magazines . . . provides
for inhalation of tobacco smoke through . . .
said stem wherein said turret is of heavier
weight than the weight of said manifold, such
that said turret remains in a stationary [posi
tion] upon said manifold in any particular
relative rotation between said turret and said
manifold.
’936 patent col. 6 ll. 53-56. 1
1 In full, claim 1 reads:
1. A metal tobacco pipe in its assembly comprising
a manifold having a body formation forming a
port and a chamber communicating with said
port and a recess in the body formation of said
port,
a stem having a bore through which tobacco
smoke is inhaled, said stem communicating
with said chamber,
a turret having a plurality of magazines rotatably
mounted on said manifold, each of said maga-
zines communicable and aligned with said port
and chamber by rotation of said turret to said
manifold,
LEE v. MIKE'S NOVELTIES 5
Independent claim 11 is limited to an improvement in
a metal tobacco pipe with a “turret being of a heavier
weight than that of the manifold so that both turret and
manifold remain stationary relative to one another . . . .”
’936 patent col. 7 ll. 34-37. 2 Both independent claims use
means for filtering tobacco smoke from tobacco in
an aligned one of said magazines to said port
and chamber seated in said recess,
means co-extensive in and between said turret
and manifold forming a cavity, and
means joining together said turret and manifold
disposed in the cavity,
said joining means comprising
a member having a first bearing surface
formed therein,
a second bearing surface formed in said turret
abutting said first bearing surface,
whereby the abutment between said first and
second bearing surfaces provides a non-
binding relationship between said turret and
manifold, and
means below said first bearing surface for fas-
tening said turret to said manifold,
whereby any one of said magazines aligned to said
port and chamber upon rotation of turret to
manifold provides for inhalation of tobacco
smoke through said bore of said stem wherein
said turret is of heavier weight than the
weight of said manifold, such that said turret
remains in a stationary upon said manifold in
any particular relative rotation between said
turret and said manifold.
’936 patent col. 6 ll. 22-56.
2 In full, claim 11 reads:
11. In a metal tobacco pipe having a hollow
stem communicating with a manifold that in-
6 LEE v. MIKE'S NOVELTIES
the transitional term “comprising.” ’936 patent, col. 6 l. 22
& col. 7 l. 35.
Lee determined that MWI was infringing the claims
of the ’936 patent by offering to sell similar Six Shooter-
style pipes with rotatable turrets. Lee sued MWI for
infringement on March 26, 2010, in the United States
District Court for the Central District of California,
alleging, inter alia, that the defendants “used, offered for
sale and sold tobacco pipes that infringe the [’]936 patent
in California and nationwide.” JA 167. One of the accused
pipes had a ball and spring assembly, which exerts addi-
tional pressure against the turret, but the other did not.
MWI proposed a claim construction requiring the turret to
be “maintained in a stationary position relative to the
manifold only by the frictional forces between the turret
and manifold and not by a spring, pin, and/or any other
mechanical interference.” JA 233 (emphases added). The
district court rejected that construction. Instead, both at
the Markman hearing and at trial, the claims were con-
strued as written. The jury was instructed that the as-
serted claims should be “construed as [they are] written
and readily apparent to a person with ordinary skill in
cludes a chamber for communicating with one of a
plurality in a turret of magazines containing to-
bacco for smoking, the turret fastened to and ro-
tatably mounted on said manifold,
the improvement comprising
the turret being of a heavier weight than
that of the manifold so that both turret
and manifold remain stationary relative
to one another after relative rotation be-
tween them has taken place to communi-
cate one of the magazines with the
manifold’s chamber.
’936 patent col. 7 ll. 29-40.
LEE v. MIKE'S NOVELTIES 7
the art by the application of widely accepted meanings of
commonly understood words.” JA 54.
The jury concluded that the accused devices infringed
claims of the ’936 patent and that MWI’s infringement
was willful. The jury also found the asserted claims not
invalid for enablement, best mode, obviousness, or public
use. The court awarded enhanced damages based on the
jury’s finding of willful infringement. The court also
awarded attorney fees after determining that the case
was exceptional in light of MWI’s willful infringement and
litigation misconduct, consisting of bad faith settlement
offers, bad faith conduct during discovery, and threats to
report Lee’s counsel to state bar associations. MWI ap-
pealed. We have jurisdiction pursuant to 28 U.S.C. §
1295(a)(1).
DISCUSSION
I. Claim Construction
MWI first contends that the district court’s claim con-
struction was erroneous because it precluded the jury
from finding non-infringement based on the fact that the
spring and ball assembly in one of the accused devices
kept the turret stationary instead of the weight differen-
tial between the turret and the manifold. MWI argues
that it was also precluded from presenting evidence and
arguing in support of its theory of non-infringement. MWI
asserts that, under the correct claim construction, there
could be no infringement because the spring, not the
weight differential, kept the turret stationary in one of
the accused devices. Claim construction is an issue of law
reviewed de novo. Cybor Corp. v. FAS Techs., Inc., 138
F.3d 1448, 1454-55 (Fed. Cir. 1998).
The claim construction question turns on the meaning
of the weight differential limitation, which in claim 1
requires the turret to be “of heavier weight than the
8 LEE v. MIKE'S NOVELTIES
weight of said manifold, such that said turret remains in
a stationary [position] upon said manifold in any particu-
lar relative rotation between said turret and said mani-
fold.” ’935 patent col. 6 ll. 52-56. Claim 11 similarly
describes the turret as “being of a heavier weight than
that of the manifold so that both turret and manifold
remain stationary relative to one another.” ’936 patent
col. 7 ll. 36-38. At the Markman hearing, the district court
rejected MWI’s proposed construction that the “turret is
maintained in a stationary position relative to the mani-
fold only by the frictional forces between the turret and
manifold and not by a spring and/or pin.” JA 235 (em-
phases added). The district court, both at the Markman
hearing and in the final jury instruction, construed the
claim language simply “as it is written.” JA 230. We see
no error in the district court’s rejection of MWI’s proposed
construction. 3
The specification of Lee’s patent, like the claims
themselves, states that “[t]he turret is made of material
heavier than that of the manifold.” ’936 patent col. 2 ll.
10-11. The specification also explains that “[t]he heavier
weight of [the] turret maintains its position upon the less-
weighted manifold whereby the desired tobacco-filled
magazine disposed over port [in the manifold] remains
3 Lee argues that MWI waived any challenge to the
claim construction by not objecting to the construction in
connection with the jury instruction. But we have held
that raising a claim construction issue at the Markman
hearing is sufficient to preserve the objection. See, e.g.,
Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 381 F.3d
1371, 1381 (Fed. Cir. 2004) (“When the claim construction
is resolved pre-trial, and the patentee presented the same
position in the Markman proceeding as is now pressed, a
further objection to the district court’s pre-trial ruling
may indeed have been not only futile but unnecessary.”).
LEE v. MIKE'S NOVELTIES 9
stationary . . . .” ’936 patent col. 5 ll. 46-50. The claims
and specification indicate that the turret remains station-
ary relative to the manifold because of its heavier weight
relative to the manifold.
Additionally, independent claims 1 and 11 use the
transitional term “comprising.” ’936 patent col. 6 l. 22 &
col. 7 l. 34. We have established that “[i]n the patent
claim context[,] the term ‘comprising’ is well understood
to mean ‘including but not limited to.’” CIAS, Inc. v.
Alliance Gaming Corp., 504 F.3d 1356, 1360 (Fed. Cir.
2007); see also Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc.,
200 F.3d 795, 811 (Fed. Cir. 1999) (citing Stiftung v.
Renishaw PLC, 945 F.2d 1173, 1178 (Fed. Cir. 1991);
Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261,
1271 (Fed. Cir. 1986)). Because both independent claims 1
and 11 use the term “comprising,” they read on devices
that include additional features beyond those claimed.
Based on that claim language, infringement cannot be
avoided by adding another feature that contributes to the
turret’s stability if the weight differential is nevertheless
sufficient to keep the turret stationary. MWI’s proposed
construction would have limited the claims to read on
devices with turrets held stationary solely because of the
weight differential. The district court did not err in reject-
ing that construction. 4
II. Infringement
MWI next challenges the sufficiency of the evidence
supporting the jury verdict of infringement. Infringement
is a question of fact that we review for substantial evi-
dence when tried before a jury. Teleflex, Inc. v. Ficosa N.
Am. Corp., 299 F.3d 1313, 1323 (Fed. Cir. 2002). To find
4 We fail to see any impropriety in Lee’s counsel’s
stating in closing argument that “the addition of a ball
and spring does not avoid infringement.” JA 577.
10 LEE v. MIKE'S NOVELTIES
infringement, the finder of fact must compare the inven-
tion claimed in the patent with the accused device. Id.
Substantial evidence requires evidence that “a reasonable
mind might accept as adequate to support a conclusion.”
Id. at 1324 (internal quotation omitted).
Under the claim language incorporated into the jury
instructions, the patentee had to prove that the weight
differential between the turret and manifold in MWI’s
pipes, standing alone, would be sufficient to keep the
turret stationary relative to the manifold. Although Lee
did not introduce tests to make that showing, it intro-
duced sufficient evidence for the jury to conduct a factual
comparison between the claimed invention and the ac-
cused devices. During his testimony, Lee weighed one of
the accused devices, the pipe without the ball and spring,
and showed that the turret weighed 68 grams and the
manifold 55 grams, a difference of 13 grams, and testified
that the weight differential “promoted” a stationary
position. JA 457. Although the other accused pipe, which
contained a ball and spring, was not weighed, the jurors
had the opportunity to handle both pipes and compare the
relative weights of the components for themselves. They
could also place the turret on top of the manifold to de-
termine whether the weight differential created stability.
While the weight differential was not overwhelming, the
jury had adequate evidence from which to conclude that it
was sufficient to ensure stability. 5
5 MWI argues that the district court violated the
local rules in allowing Lee to assert infringement against
the pipe without the spring, but we find no abuse of
discretion in the district court’s determination that no
prejudice would result from allowing the claim of in-
fringement as to both pipes to proceed.
LEE v. MIKE'S NOVELTIES 11
MWI argues that expert testimony was required, and
points out that Lee presented no expert testimony during
trial. Although no experts testified, the technology in-
volved was easily understandable and did not require
technical expertise or specialized knowledge. Expert
testimony is not necessary in patent cases involving
technology that is “easily understandable.” Centricut, LLC
v. Esab Group, Inc., 390 F.3d 1361, 1369 (Fed. Cir. 2004)
(“[E]xpert testimony will not be necessary because the
technology will be ‘easily understandable without the
need for expert explanatory testimony.’”) (quoting Union
Carbide Corp. v. Am. Can Co., 724 F.2d 1567, 1573 (Fed.
Cir. 1984) (no expert testimony needed to explain technol-
ogy involving plastic bags)). Here, the disputed facts
pertained to: (1) the weight differential between the
turret and manifold, and (2) its sufficiency in keeping the
turret in place. No expert testimony was required to
explain how to measure the weight differential or the fact
that a heavier object would be more likely to remain
stationary. The court did not err in expecting the jury to
understand these concepts without expert testimony.
Handling the pipes allowed jurors to estimate the weight
differential in the pipe that the patentee did not weigh,
and the sufficiency of the weight differential in keeping
the turret stationary.
As to the question of the sale of the pipe without the
ball and spring, Lee’s employee testified that she ordered
the Six Shooter-style pipes from MWI, and Lee stated
that he had previously seen MWI selling a pipe without a
ball and spring. MWI’s witness testified that he did not
sell such a pipe, and only sold the accused pipe with a ball
and spring. The jury could reasonably conclude, based on
determinations about the credibility of the witnesses, that
MWI did in fact sell such a pipe. We see no reason to
overturn the jury’s implicit finding of fact that MWI did
sell the accused pipe without the ball and spring.
12 LEE v. MIKE'S NOVELTIES
While reasonable minds could have reached a differ-
ent conclusion as to the evidence of infringement, sub-
stantial evidence supported the jury verdict. We therefore
affirm the judgment of infringement.
III. Invalidity
MWI also raises a number of arguments as to invalid-
ity, alleging that the ’936 patent does not disclose the best
mode of the patented invention or provide sufficient
information to enable those skilled in the art to make and
use the invention. It also alleges that the claimed inven-
tion was obvious in view of the prior art and in public use
more than a year before the ’936 patent’s effective date.
We find those arguments to be without merit and sustain
the jury verdicts of no invalidity on those grounds.
IV. Enhanced Damages
In the context of patent infringement, “an award of
enhanced damages requires a showing of willful infringe-
ment.” In re Seagate Tech., LLC, 497 F.3d 1360, 1368
(Fed. Cir. 2007) (emphasis added) (citing Beatrice Foods
Co. v. New Eng. Printing & Lithographing Co., 923 F.2d
1576, 1578 (Fed. Cir. 1991)); see also 35 U.S.C. § 284
(permitting courts to award up to treble damages in
enhanced damages). Although an enhanced damages
award must be predicated on willful infringement, “a
finding of willfulness does not require an award of en-
hanced damages; it merely permits it.” Seagate, 497 F.3d
at 1368.
Under Seagate, patentees must satisfy a two-pronged
test for willfulness, one prong of which is objective, and
the other prong of which is subjective. See, e.g., Bard
Peripheral Vascular, Inc., v. W.L. Gore & Assoc., Inc., 682
F.3d 1003, 1006 (Fed. Cir. 2012); Powell v. Home Depot
U.S.A., Inc., 663 F.3d 1221, 1236 (Fed. Cir. 2011). To meet
the first prong, patentees must show “by clear and con-
LEE v. MIKE'S NOVELTIES 13
vincing evidence that the infringer acted despite an
objectively high likelihood that its actions constituted
infringement of a valid patent.” Seagate, 497 F.3d at 1371.
If the patentee satisfies that test, he must satisfy the
second prong by showing that the accused infringer
subjectively knew of the “objectively-defined risk” or
should have known because the risk was so obvious. Id.
The objectiveness inquiry is a question of law reviewed de
novo. Bard, 682 F.3d at 1007.
The threshold inquiry into objective recklessness
“entails an objective assessment of potential defenses
based on the risk presented by the patent.” Id. at 1006.
When an “accused infringer relies on a reasonable defense
to a charge of infringement,” the risk of infringement is
not high enough to satisfy the objective prong of the
willfulness inquiry. Spine Solutions, Inc. v. Medtronic
Sofamor Danek USA, Inc., 620 F.3d 1305, 1319 (Fed. Cir.
2010) (defendant was not objectively reckless in relying on
“reasonable” obviousness defense). Because the objective
inquiry is a question of law, if the court decides that “the
infringer’s reliance on a defense was not objectively
reckless, it cannot send the question of willfulness to the
jury.” Powell, 663 F.3d at 1236.
Although MWI raised a number of invalidity and non-
infringement theories, we focus on the objective reasona-
bleness of its infringement defense. As the district court
explained in its summary judgment order, there was a
“genuine issue of material fact as to whether the turret
remains stationary because the turret is heavier than the
manifold” and therefore infringed the limitations of
claims 1 and 11. JA 240. MWI argued at trial that Lee
had not proven that the weight differential between the
manifold and turret of the accused pipes was enough to
keep the turret stationary, as the district court’s claim
construction required. When asked at oral argument in
this court why it was unreasonable for MWI to argue that
14 LEE v. MIKE'S NOVELTIES
the weight differential was insufficient to ensure stability,
Lee’s counsel stated, “that would be a reasonable argu-
ment.” See Oral Argument at 16:45-16:48, available at
http://www.cafc.uscourts.gov/oral-argument-
recordings/2013-1049/all. He offered no explanation why
such an argument would be objectively unreasonable
other than the fact that the jury reached the opposite
conclusion.
To be sure, it was reasonable for the jury to conclude
that the turret remained stationary relative to the mani-
fold because of the weight differential, but that does not
make the accused infringer’s defense objectively unrea-
sonable. In this case, the evidence was close, and the
critical factual determinations were left in the jury’s
hands. The verdict was supported by substantial evi-
dence, but there was countervailing evidence to support
the defendant’s theory as well. The weight differential
amounted to only 13 grams, which the jury might have
considered insufficient. Moreover, Lee only weighed one of
the two pipes and as the above discussion indicates, the
jury could have reasonably concluded that MWI did not
sell that pipe. Therefore, it was reasonable for MWI to
contest the allegation of infringement and to argue that
the plaintiff had not proven that the “weight differential
actually maintains the turret [in a] stationary [position]”
in either accused device. JA 606, ll. 4-5.
Because MWI’s defense was not objectively unreason-
able, the first prong of the Seagate test for willfulness was
not satisfied. Consequently, we reverse the finding of
willful infringement. Because enhanced damages cannot
be awarded without a finding of willfulness, we vacate the
award of enhanced damages.
V. Attorney’s Fees
Section 285 provides that a “court in exceptional cases
may award reasonable attorney fees to the prevailing
LEE v. MIKE'S NOVELTIES 15
party.” 35 U.S.C. § 285. Determining whether to award
attorney fees under § 285 requires a two-step analysis in
which the court first decides whether the prevailing party
has shown by clear and convincing evidence that the case
is “exceptional.” Forest Labs., Inc. v. Abbot Labs., 339 F.3d
1324, 1327 (Fed. Cir. 2003). If the court makes an excep-
tional case finding, it must then decide whether an award
of attorney fees is appropriate. Id. at 1328. We have
“repeatedly identified as ‘exceptional’ those cases involv-
ing ‘inequitable conduct before the [Patent Office]; litiga-
tion misconduct; vexatious, unjustified, and otherwise bad
faith litigation; a frivolous suit or willful infringement.’”
Id. at 1329 (quoting Brasseler, U.S.A. I, L.P. v. Stryker
Sales Corp., 267 F.3d 1370, 1380 (Fed. Cir. 2001)) (altera-
tion in original). We review the district court’s application
of the proper legal standard de novo, its exceptional case
finding for clear error, and its decision that attorney fees
are appropriate for abuse of discretion. See id. at 1328; see
also Cybor Corp. v. FAS Tech., Inc., 138 F.3d 1448, 1460
(Fed. Cir. 1998).
The district court relied on both the finding of jury
willful infringement and its finding of litigation miscon-
duct in determining that this case was exceptional. The
instances of litigation misconduct supporting the award of
attorney’s fees included MWI’s bad faith settlement offers,
bad faith conduct during discovery, and unacted-upon
threats to report Lee’s counsel to state bar associations.
MWI only challenges the district court’s litigation mis-
conduct finding with respect to the settlement offers. The
district court did not clearly err in finding that MWI’s
“settlement offers, combined with intimidating language,
are evidence of bad faith litigation tactics.” JA 27. Moreo-
ver, the court only described the settlement offers as
supporting an award of attorney’s fees. As to the allega-
tions of bad faith during discovery and threats to report
Lee’s counsel, the court expressly stated that these in-
16 LEE v. MIKE'S NOVELTIES
stances of misconduct were not sufficient, standing alone,
to justify an award of attorney’s fees.
Although the court described MWI’s litigation mis-
conduct as “evidenc[ing] some bad faith,” it only made an
exceptional case finding “[a]fter considering the totality of
the circumstances, including the jury’s finding of willful-
ness.” JA 28. The district court thus based its exceptional
case finding not only on findings of MWI’s litigation
misconduct, which we sustain, but also on the finding of
willful infringement, which, as discussed above, cannot
stand. As a result, it is not clear that the district court
would have considered this to be an exceptional case
warranting an award of attorney’s fees based solely on
MWI’s litigation misconduct.
Therefore, we affirm the judgment of infringement
and no invalidity, reverse the determination of willful
infringement and award of enhanced damages, and re-
mand to the district court to determine whether MWI’s
litigation misconduct is independently sufficient to make
this an exceptional case such that attorney’s fees are
warranted.
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED
Each party to bear its own costs.