Integrated Technology Corp. v. Rudolph Technologies, Inc. , 734 F.3d 1352 ( 2013 )

United States Court of Appeals
for the Federal Circuit
______________________
INTEGRATED TECHNOLOGY CORPORATION AND
NEVADA INTEGRATED TECHNOLOGY
CORPORATION,
Plaintiffs-Appellees,
v.
RUDOLPH TECHNOLOGIES, INC. AND MARINER
ACQUISITION COMPANY LLC,
Defendants-Appellants.
______________________
2012-1593, -1618
______________________
Appeals from the United States District Court for the
District of Arizona in No. 06-CV-2182, Chief Judge Roslyn
O. Silver.
______________________
Decided: November 4, 2013
______________________
JAY R. CAMPBELL, Renner, Otto, Boisselle & Sklar,
LLP, of Cleveland, Ohio, argued for plaintiffs-appellees.
With him on the brief were TODD R. TUCKER, JOSHUA M.
RYLAND and NICHOLAS J. GINGO.
DANIEL W. MCDONALD, Merchant & Gould P.C., of
Minneapolis, Minnesota, argued for defendants-
appellants. With him on the brief were RACHEL C.
HUGHEY and JOSEPH E. LEE. Of counsel on the brief were
CARTER G. PHILLIPS and JONATHAN F. COHN, Sidley Aus-
tin LLP, of Washington. DC.
______________________
Before RADER, Chief Judge, CLEVENGER, and MOORE,
Circuit Judges.
2 INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES,
INC.
MOORE, Circuit Judge.
Rudolph Technologies, Inc. (Rudolph) appeals from
the district court’s judgment that it infringes U.S. Patent
No. 6,118,894 (’894 patent). Rudolph challenges the
court’s denial of its motion for judgment as a matter of
law (JMOL) that prosecution history estoppel bars the
application of the doctrine of equivalents. Rudolph also
challenges the award of damages, the court’s determina-
tion that this was an exceptional case under 35 U.S.C. §
285, and that Rudolph failed to prove laches. We hold
that prosecution history estoppel precludes the applica-
tion of the doctrine of equivalents and therefore reverse
the judgment of infringement under the doctrine of equiv-
alents. We also reverse the willfulness finding predicated
on that judgment and vacate the corresponding award of
enhanced damages. 1 We affirm the award of damages for
literal infringement. We vacate the award of attorneys’
fees and costs and remand because we find that the
court’s exceptional case analysis relied in part on the
willfulness finding. Finally, we hold that the court did
not abuse its discretion in finding no laches.
BACKGROUND
This case relates to inspection equipment for probe
cards used to test chips on semiconductor wafers. Probe
cards contain structures called probes, whose tips make
contact with bonding pads located on the periphery of
each chip. The probe tips initially pierce the oxide layer
atop the conductive layer of the bonding pad. The probe
tips are subsequently moved along the pads to a second
position to create a reliable electrical contact, leaving a
“scrub mark” on the bonding pad in the process.
1 Rudolph also challenges the denial of its motion
for JMOL that claim vitiation precludes the application of
the doctrine of equivalents and that its defenses to willful
infringement were objectively reasonable. Because we
hold that prosecution history estoppel precludes the
application of the doctrine of equivalents, we need not
reach this other issue.
INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES, 3
INC.
Integrated Technology Corp. (ITC) sued Rudolph for
infringement of the ’894 patent. The ’894 patent discloses
a digital viewing system to assess whether probes have
become misaligned relative to each other by predicting the
length and location of scrub marks. ’894 patent, col. 6 ll.
1–5. The system includes a camera under a viewing
window that obtains the three-dimensional coordinates of
the probe tips in first and second states. Id. at col. 15 ll.
1–20. Asserted claim 1 of the ’894 patent is representa-
tive (emphasis added):
An integrated circuit probe card inspection system
. . . comprising: . . .
a window with a flat surface contacted by said
probe tip, said viewing system obtaining said
digital image through said window in a first
state where said probe tip is driven in contact
with said window with a first force, and in a
second state where said probe tip is driven
in contact with said window with a second
force, said second force being different from
said first force . . . .
ITC alleged that two categories of Rudolph products
infringe the asserted claims. The first includes products
in which the probe tips make physical contact with the
viewing window before, or at, the moment an image is
taken (pre-2007 products). The second includes three
products that obtain a first image when the probe tips are
approximately five microns above the viewing window
(no-touch products)—ITC alleges that this design infring-
es by equivalence.
The district court granted summary judgment of lit-
eral infringement as to the pre-2007 products. The par-
ties proceeded to trial on three issues: (1) whether
Rudolph’s literal infringement with the pre-2007 products
was willful; (2) whether the no-touch products met the “in
a first state where said probe tip is driven in contact with
said window with a first force” limitation of the asserted
claims; and (3) damages.
The jury returned a verdict of no willfulness as to the
pre-2007 products and awarded ITC lost profits of nearly
$7.7 million. The jury found willful infringement under
4 INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES,
INC.
the doctrine of equivalents by the no-touch products and
awarded lost profits of nearly $7.8 million.
Following the verdict, the court denied Rudolph’s mo-
tion for JMOL that prosecution history estoppel bars the
application of the doctrine of equivalents. The court
determined that Rudolph did not prove laches. The court
trebled damages for willful infringement. The court also
determined that the case was exceptional and awarded
ITC attorneys’ fees and costs. Rudolph appeals. We have
jurisdiction under 28 U.S.C. § 1295(a)(1).
ANALYSIS
We review the denial of a motion for JMOL under the
law of the regional circuit. Summit Tech., Inc. v. Nidek
Co., 363 F.3d 1219, 1223 (Fed. Cir. 2004). The Ninth
Circuit reviews the denial of JMOL de novo. Hangarter v.
Provident Life & Accident Ins. Co., 373 F.3d 998, 1005
(9th Cir. 2004). In the Ninth Circuit, JMOL is appropri-
ate after a jury trial “when a party has been fully heard
on an issue and there is no legally sufficient evidentiary
basis for a reasonable jury to find for that party on that
issue.” Id. (internal quotation marks omitted).
I. Infringement Under the Doctrine of Equivalents
A. Applicable Law
Prosecution history estoppel prevents a patentee from
recapturing through the doctrine of equivalents the
subject matter that the applicant surrendered during
prosecution. Festo Corp. v. Shoketsu Kinzoku Kogyo
Kabushiki Co., 535 U.S. 722, 734 (2002). It presumptively
applies when the applicant made a narrowing claim
amendment related to patentability. Id. at 736–37.
A patentee bears the burden to rebut the presumptive
application of prosecution history estoppel by establishing
one of three exceptions by a preponderance of the evi-
dence. First, “[t]he equivalent may have been unforesee-
able at the time of the application.” Id. at 740. Second,
“the rationale underlying the amendment may bear no
more than a tangential relation to the equivalent in
question.” Id. Third, “there may be some other reason
suggesting that the patentee could not reasonably be
expected to have described the [equivalent].” Id. at 740–
INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES, 5
INC.
41. Whether a patentee has rebutted the presumption is
a question of law that we review de novo. Chimie v. PPG
Indus. Inc., 402 F.3d 1371, 1376 (Fed. Cir. 2005).
B. Application of Prosecution History Estoppel
As originally filed, claim 1 recited in relevant part on-
ly “a window with a flat surface contacted by said probe
tip.” The Examiner rejected the original claim as indefi-
nite under 35 U.S.C. § 112, paragraph 2, and anticipated
under § 102(b) by U.S. Patent No. 4,757,256 (Sato). J.A.
10637, 10640. ITC responded by amending the claim to
also recite “in a first state where said probe tip is driven
in contact with said window with a first force.” J.A.
10648–49, 10653–56.
The district court concluded that prosecution history
estoppel does not preclude a finding of infringement by
equivalence. It determined that the original and issued
claims “both required contact between the plate and the
probe tip,” and therefore held that ITC did not make a
narrowing amendment. Integrated Tech. Corp. v. Ru-
dolph Techs., Inc., No. 2:06-cv-2182, ECF No. 546, slip op.
at 5 (D. Ariz. July 23, 2012).
Rudolph argues that the court erred as a matter of
law by concluding that the amendment was not narrow-
ing. It contends that the equivalent was literally within
the scope of the original claim. Rudolph argues that the
amendment narrowed the scope of the claim by reciting
that the probe tip must be “driven in contact with said
window” in both recited states. It argues that prosecution
history estoppel presumptively applies because the nar-
rowing amendment was in response to patentability
rejections.
Rudolph also argues that ITC cannot satisfy its bur-
den to rebut the presumption of prosecution history
estoppel. First, Rudolph argues that the equivalent bears
a direct—as opposed to tangential—relationship to the
amendment. It contends that, even if ITC did not need to
distinguish the prior art on the basis of whether the probe
tip and window are in physical contact, it chose to do so.
Rudolph argues that the prosecution history does not
provide a discernible tangential rationale for the amend-
ment because ITC relied on the difference between the
6 INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES,
INC.
equivalent and the amended limitation to obtain claim 1’s
allowance.
Second, Rudolph argues that the equivalent was ob-
jectively foreseeable at the time of the amendment be-
cause the original claim literally covered the equivalent.
Rudolph also contends that the equivalent was not tech-
nically unforeseeable at the time of the amendment. It
argues that the redesign of its pre-2007 product involved
a straightforward software change to regulate the place-
ment of the probe tip above the viewing window when
obtaining the image in a first state.
ITC responds that the doctrine of equivalents applies.
It argues that the court correctly held that the amend-
ment was not narrowing. ITC contends that the original
claim implied measuring the probe tip at two different
points of actual physical contact with the viewing window.
It argues that the amendment merely expressed that
implication, and relies on the specification’s reference to
the probe tip’s first position as the location where the tip
“would initially contact the video window.” ’894 patent,
col. 15 l. 4.
Even if its amendment was narrowing, ITC argues
that it rebutted any presumption that prosecution history
estoppel applies. First, it contends that the amendment
bore only a tangential relationship to the equivalent. ITC
argues that the prior art cited during prosecution failed to
disclose either taking two images of the probe tip or
taking an image of the probe tip at the point where it
would initially contact the viewing window. It contends
that the amendment therefore distinguished the prior art
solely on the basis of obtaining two images of the probe tip
at different positions. ITC thus argues that it did not
distinguish the prior art based on the invention requiring
physical contact between the probe tip and the viewing
window.
Second, ITC argues that the equivalent was objective-
ly unforeseeable at the time of the amendment. It con-
tends that Rudolph developed its own commercial no-
touch technology after considerable effort and expense. In
support, ITC argues that Rudolph obtained a patent on its
no-touch technology based on an application that was
INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES, 7
INC.
filed seven years after the amendment. It also contends
that the district court found that the specification of the
’894 patent does not disclose the no-touch equivalent, and
therefore ITC could not have originally claimed the
equivalent.
As an initial matter, we agree with Rudolph that
prosecution history estoppel presumptively applies be-
cause the amendment narrowed the scope of the original
claim in response to patentability rejections. By its plain
language, the amendment added that there must be two
different forces that drive the probe tip in contact with the
viewing window in two separate states. Accordingly, we
hold that ITC surrendered the territory between the
original and issued claims, including the equivalent.
The remaining question is whether ITC met its bur-
den of proving that an exception to prosecution history
estoppel applies. We hold that it has not, and therefore
prosecution history estoppel bars the application of the
doctrine of equivalents.
1. Tangential Relation
The tangential relation exception is “very narrow.”
Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc.,
480 F.3d 1335, 1342 (Fed. Cir. 2007). We ask “whether
the reason for the narrowing amendment was peripheral,
or not directly relevant, to the alleged equivalent.” Festo
Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 344 F.3d
1359, 1369 (Fed. Cir. 2003) (en banc). “[A]n amendment
made to avoid prior art that contains the equivalent in
question is not tangential.” Chimie, 402 F.3d at 1383
(quoting Festo, 344 F.3d at 1369). “It does not follow,
however, that equivalents not within the prior art must
be tangential to the amendment.” Id.
The tangential relation inquiry “focuses on the pa-
tentee’s objectively apparent reason for the narrowing
amendment,” which “should be discernible from the
prosecution history record.” Festo, 344 F.3d at 1369
(internal citations omitted). For example, in Felix v.
American Honda Motor Co., we rejected the patentee’s
argument that a limitation was tangential because he had
expressly relied on a second limitation to distinguish prior
art during prosecution. 562 F.3d 1167, 1184 (Fed. Cir.
8 INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES,
INC.
2009). We found that the patentee “could easily have
simply amended” the original claim to recite only the non-
tangential limitation, yet he chose to recite both. Id.
Here, a tangential rationale for the amendment is not
objectively apparent from the prosecution history. As the
Examiner observed when rejecting the original claim,
Sato discloses “a surface contacted by a probe.” J.A.
10640. It may be that ITC did not need to surrender a
lack of physical contact between the probe tip and window
in either state to overcome Sato. The dispositive fact is
that ITC chose to do so.
In response to the Examiner’s patentability rejections,
ITC explained that the invention generally included a
preferred embodiment in which “a video camera . . .
inspects the position of each probe tip as the probes are
engaged in contact with the flat surface of a window.”
J.A. 10652 (emphasis added). It also stated that, “[i]n
another embodiment, the video camera provides a digital
image of a probe contacting the surface of the window in [a
first and second state] where the probe tip is driven in
contact [with two different forces].” Id. (emphases added).
ITC expressly stated that the prior art did not “teach or
suggest such features,” without limiting which features it
meant. J.A. 10653.
To distinguish the amended claim, in particular, from
Sato, ITC stated that the claim “calls for the viewing
system to obtain a digital image of the probe tip . . . in
[first and second states in which] said probe tip is driven
in contact with said window.” J.A. 10656 (emphasis
added). ITC also told the Examiner that the aspect of the
invention at issue was “best exemplified” by Figure 6(a),
id., which discloses an embodiment where the probe tip is
in the “zero overdrive position,” ’894 patent, col. 15 ll. 5–6.
That statement, however, does not establish a tangential
rationale because “zero overdrive” still encompasses
physical contact between the probe tip and the window.
ITC again relied on contact between the probe tip and
window in responding to a subsequent rejection based on
different prior art. It stated that “[t]he claims of the
present invention are directed towards predicting . . . the
movement . . . of probe tips . . . after initial contact with
INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES, 9
INC.
the bonding pad.” J.A. 10815 (emphasis in original). ITC
reiterated that “[i]n the context of the specific language of
the claims, [the claims] each recite that the probe tip is
driven at two different forces or overdrives . . . after
contacting a window . . . .” Id. (emphasis added).
ITC’s representations convey to the public that it was
relying on physical contact to overcome the prior art. The
public is entitled to rely on those representations.
Whether ITC’s interpretation of the prosecution history is
plausible is irrelevant. It must prove by a preponderance
of the evidence that, based on the prosecution history, the
“objectively apparent reason for the narrowing amend-
ment” was only tangentially related to the equivalent.
Festo, 344 F.3d at 1369. We hold that it has not met that
burden.
2. Foreseeability
The patentee may rebut the application of prosecution
history estoppel by establishing that the equivalent would
have been objectively unforeseeable to one of ordinary
skill in the art at the time of the amendment. Festo, 344
F.3d at 1369; Honeywell Int’l, Inc. v. Hamilton
Sundstrand Corp., 523 F.3d 1304, 1313 (Fed. Cir. 2008).
Technology developed after an amendment is not neces-
sarily objectively unforeseeable. Festo, 344 F.3d at 1369.
We agree with Rudolph that ITC has not proven that
the equivalent was objectively unforeseeable. The no-
touch products obtain an image in a first state when the
probe tip is five microns above the viewing window, and
in a second state when the probe tip touches the window.
Accordingly, the no-touch products literally satisfy the
original claim’s limitation of “a window with a flat surface
contacted by said probe tip.” When the patentee “original-
ly claimed the subject matter alleged to infringe but then
narrowed the claim in response to a rejection, he may not
argue that the surrendered territory comprised unfore-
seen subject matter.” Festo, 535 U.S. at 733–34. That
principle controls in this case regardless of when Rudolph
developed its no-touch products.
Moreover, the record does not demonstrate that the
equivalent is the innovative aspect of Rudolph’s patented
10 INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES,
INC.
no-touch products. We hold that ITC did not prove that
the equivalent was objectively unforeseeable.
ITC’s argument that literal infringement by the no-
touch products is an alternative basis to affirm the judg-
ment is without merit. Substantial evidence supported
the jury’s verdict of no literal infringement by these
products. See, e.g., J.A. A9879–80, 9676, 9894–95, 9903
(testimony by Rudolph witnesses that probe tips in the
no-touch products do not physically contact the viewing
window in the first state); J.A. 14310 (product manual
stating that “[s]ystem . . . captures images at both the no
touch and overtravel positions”). We will not upset that
verdict.
* * *
We hold that ITC’s narrowing amendment during
prosecution surrendered the equivalent from the scope of
the asserted claims and that prosecution history estoppel
bars the application of the doctrine of equivalents. We
thus reverse the denial of Rudolph’s motion for JMOL
that its accused no-touch products do not infringe under
the doctrine of equivalents. Because the finding of will-
fulness was predicated on that finding of infringement, we
also reverse it and vacate the corresponding award of
treble damages.
II. Damages for Literal Infringement
The jury’s determination of the amount of damages is
an issue of fact that we review for substantial evidence.
Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1310
(Fed. Cir. 2009). We uphold the jury’s finding unless “the
amount is grossly excessive or monstrous, clearly not
supported by the evidence, or based only on speculation or
guesswork.” Id. (internal quotation omitted).
Rudolph argues that we should vacate the award of
lost profits as to the pre-2007 products held to literally
infringe. It argues that its damages expert testified at
trial that, if the no-touch products did not infringe, they
would be noninfringing alternatives. Rudolph argues that
the jury’s award of lost profits for the pre-2007 products
was based on the erroneous premise that the no-touch
products could not be noninfringing alternatives.
INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES, 11
INC.
We agree with ITC that substantial evidence support-
ed the jury’s general verdict award of lost profits for
literal infringement. ITC proffered a two-supplier theory
of lost profits that was independent of the existence of
noninfringing alternatives. J.A. 7231; see also State
Indus., Inc. v. Mor-Flo Indus., Inc., 883 F.2d 1573, 1578
(Fed. Cir. 1989) (“In the two-supplier market, it is reason-
able to assume, provided the patent owner has the manu-
facturing and marketing capabilities, that it would have
made the infringer’s sales.”). The jury could have relied
on the two-supplier theory, and accordingly we uphold the
award of lost profits for literal infringement.
III. Exceptional Case Finding Under 35 U.S.C. § 285
A district court may award reasonable attorney fees to
a prevailing party in a patent case if it determines that
the case is exceptional under § 285. MarcTec, LLC v.
Johnson & Johnson, 664 F.3d 907, 915 (Fed. Cir. 2012)
(citation omitted). The court must first determine wheth-
er the prevailing party has proved by clear and convincing
evidence that the case is exceptional, which we review for
clear error. Id. at 915–16. Next, the court must deter-
mine whether an award of fees is justified, which we
review for abuse of discretion. Id. at 916.
In finding the case exceptional, the court cited “Ru-
dolph’s conduct during this litigation and the willfulness
finding” as “ample support.” Integrated Tech. Corp., No.
06-2182, ECF No. 546, slip op. at 17. The court stated the
award of fees and costs was justified “based on the entire-
ty of the record.” Id. It explained that “Rudolph had no
serious defense to the pre-2007 infringement allegations,
refused to acknowledge that reality, and the jury deter-
mined Rudolph’s post-2007 conduct constituted willful
infringement.” Id.
Rudolph argues that we should reverse the district
court’s exceptional case finding and vacate the corre-
sponding award because they were based on the errone-
ous willfulness finding and a mischaracterization of its
litigation conduct. It argues that the district court never
held that Rudolph’s misconduct alone was sufficient to
support the award of fees and costs.
12 INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES,
INC.
ITC responds that the finding of misconduct is suffi-
cient to support the exceptional case determination. It
also argues that the award was justified in light of Ru-
dolph’s litigation misconduct, which ITC contends is an
indication that Rudolph lacked a good faith basis for its
defenses to literal infringement.
We agree with Rudolph that the court’s analysis de-
pended in part on the finding of willfulness. Indeed, the
court’s repeated references to Rudolph’s litigation conduct
“and” the willfulness finding inextricably link both to the
exceptional case determination. Accordingly, we vacate
the court’s finding of an exceptional case and the corre-
sponding award of attorneys’ fees and costs.
IV. Laches
Laches is an equitable defense for which the accused
infringer must prove that: (1) the patentee’s delay in
bringing suit was unreasonable and inexcusable, and (2)
the alleged infringer suffered material prejudice attribut-
able to the delay. A.C. Aukerman Co. v. R.L. Chaides
Constr. Co., 960 F.2d 1020, 1028 (Fed. Cir. 1992) (en
banc). We review a district court’s determination about
laches for an abuse of discretion. Id.
The district court determined that Rudolph did not
prove laches based on its finding that ITC did not unrea-
sonably delay filing suit. The court also determined that
any purported delay did not prejudice Rudolph because
the no-touch design it allegedly could have developed
earlier was nevertheless found to infringe under the
doctrine of equivalents.
Rudolph argues that we should vacate the court’s de-
termination because it focused on the prejudice prong and
gave only cursory treatment to the unreasonable delay
prong. It argues prejudice from ITC’s delay because it
contends that it could have redesigned its pre-2007 prod-
uct sooner and at lower cost had ITC filed suit sooner.
We agree with ITC that there was no clear error in
the district court’s finding of no unreasonable delay.
Therefore, Rudolph’s arguments are irrelevant, and we
affirm the determination of no laches.
INTEGRATED TECHNOLOGY CORP. v. RUDOLPH TECHNOLOGIES, 13
INC.
CONCLUSION
We have considered the remainder of the parties’ ar-
guments and do not find them persuasive.
AFFIRMED-IN-PART, REVERSED-IN-PART,
VACATED-IN-PART AND REMANDED
COSTS
No costs awarded to either party.