Brady Construction Innovations, Inc. v. Perfect Wall, Inc. , 290 F. App'x 358 ( 2008 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1460, -1486
BRADY CONSTRUCTION INNOVATIONS, INC.,
Plaintiff-Appellant,
v.
PERFECT WALL, INC.
and METAL-LITE, INC.,
Defendants-Cross Appellants,
and
STEELER, INC.,
Defendant-Appellee,
and
SCAFCO CORPORATION,
Defendant-Appellee.
R. Joseph Trojan, Trojan Law Offices, of Beverly Hills, California, argued for
plaintiff-appellant.
Ronald P. Oines, Rutan & Tucker, LLP, of Costa Mesa, California, argued for
defendants-cross appellants. With him on the brief was Treg A. Julander.
Delbert J. Barnard, Barnard Intellectual Property Law, Inc., of Seattle,
Washington, argued for defendant-appellee Steeler, Inc.
Breton A. Bocchieri, Thelen Reid Brown Raysman & Steiner LLP, of Los
Angeles, California, argued for defendant-appellee Scafco Corporation.
Appealed from: United States District Court for the Central District of California
Chief Judge Alicemarie H. Stotler
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1460, -1486
BRADY CONSTRUCTION INNOVATIONS, INC.,
Plaintiff-Appellant,
v.
PERFECT WALL, INC. and METAL-LITE, INC.,
Defendants-Cross
Appellants,
and
STEELER, INC.,
Defendant-Appellee,
and
SCAFCO CORPORATION,
Defendant-Appellee.
Appeal from United States District Court for the Central District of California in case no.
07-CV-219, Judge Alicemarie H. Stotler.
__________________________
DECIDED: August 15, 2008
__________________________
Before MICHEL, Chief Judge, RADER and MOORE, Circuit Judges.
MICHEL, Chief Judge.
Brady Construction Innovations, Inc. (“Brady”) appeals from the district court’s
summary judgment of invalidity, and Perfect Wall, Inc. and Metal Lite, Inc. cross-appeal
from the district court’s denial of their motion for attorneys’ fees. Order, Brady
Construction Innovations, Inc. v. Perfect Wall, Inc., No. 07-219 (C.D. Cal. Jun. 13, 2007)
(“Summary Judgment Order”). We heard oral argument on July 7, 2008. Because we
conclude that claim 11 of U.S. Reissued Patent No. RE39,462 (“the reissue patent”), for
which Brady applied more than two years after issuance of the original patent, enlarged
the scope of the claims of that patent, we affirm the district court’s grant of summary
judgment of invalidity. We also conclude that the district court did not clearly err in
finding the case not exceptional and thus affirm its denial of the motion for attorneys’
fees.
I.
Todd Brady is the inventor of the patent at issue and the president of SlipTrack
Systems and Brady Construction Innovations, Inc. (“Brady”). 1 In 1990, Todd Brady filed
a patent application that issued as U.S. Patent No. 5,127,760 (“the ’760 patent” or
“original patent”). The ’760 patent claimed a building construction assembly that allows
a header in a wall some vertical freedom of movement relative to the studs, such that
stresses applied to the assembly do not result in wall cracks. Such a configuration is
useful when stresses vary in a wall for example through accumulation of snowfall or
from an earthquake.
The ’760 patent describes two preferred embodiments. In the first embodiment,
the stud and the header are aligned and then a hole is drilled in the stud using a self-
1
Brady Construction Innovations, Inc. was formerly known as SlipTrack.
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tapping screw. In the other embodiment, the holes in the stud are pre-existing, allowing
the stud and header to be aligned using the holes.
The original patent application contained nine claims, with claims 1 and 6 being
independent. Original claim 1 recited:
1. A building construction assembly that includes a header and
a stud wherein the header is capable of vertical movement relative to said
stud comprising:
a header having a web and flanges with said flanges connected to
said web;
at least one of said flanges having at least one vertical slot therein;
a stud having a width less than the distance between said flanges
of said header;
said stud being aligned with said vertical slot; and
an attachment means passing through said slot and through said
hole to unit[e] said header to said stud whereby said slot permits said
header to move vertically with respect to said stud while restricting
horizontal movement of said header.
J.A. at 268 (emphasis added). 2
The examiner rejected all nine claims in the original application as indefinite and
obvious. As to indefiniteness, the examiner queried, “how is the stud ‘aligned’ with the
vertical slot?” J.A. at 259. 3 In response, Brady canceled claims 6 through 9, and in
claim 1, the only remaining independent claim, Brady deleted the limitation that the stud
be “aligned with said vertical slot” and amended it to read “said stud having at least one
hole formed therein proximal to said top end.” Brady explained: “[T]he Examiner’s
question of how the stud is aligned with the vertical slot has been answered by adding
hole 22 proximal to top end 40 of the stud as an element of the claims. The hole 22
serves as a reference point on the stud which is used to align the stud and the slot.”
2
Claim 6 included a limitation that an “elongated slotted passage” be
“aligned” with the stud.
3
The examiner also cited the “aligned” limitation of claim 6, the only other
independent claim, as having the same indefiniteness problem.
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J.A. at 278. In the same response, Brady also added a new independent claim 7, which
included the same limitation now in claim 1: “said stud having at least one hole formed
therein proximal to said top end.” The examiner ultimately allowed the claims as
amended, and the ’760 patent issued in 1992.
As issued, claim 1 of the ’760 patent recited:
1. A building construction assembly that includes a header and
a stud wherein the header is capable of vertical movement relative to said
assembly comprising:
a header having a web and flanges with said flanges connected to
said web;
at least one of said flanges having at least one vertical slot therein;
a stud having a width less than the distance between said flanges
of said header and having a top end;
said stud having at least one hole formed therein proximal to said
top end;
said top end fitting between said flanges perpendicular to said
header positioned so that said hole is aligned with said vertical slot; and
an attachment means passing through said slot and through said
hole to slideably unite said header to said stud whereby said slot permits
said header to move vertically with respect to said stud while restricting
horizontal movement of said header.
’760 patent, col.4 ll.35-54 (emphasis added).
SlipTrack then sued Metal Lite in the Central District of California alleging that the
’760 patent had priority over a Metal Lite patent that issued on the same day, and that
Metal Lite’s products infringed the ’760 patent. In September 2003, a jury found that the
’760 patent was entitled to priority, that Metal Lite’s products infringed the ’760 patent,
and that SlipTrack was entitled to damages.
On appeal, this court affirmed the priority determination but vacated and
remanded the infringement determination. SlipTrack Sys., Inc. v. Metal Lite, Inc., 113
Fed. Appx. 930 (Fed. Cir. Dec. 1, 2004). Specifically, this court held that the claim
limitation “said stud having at least one hole formed therein proximal to said top end”
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means “that a hole must be formed in the stud prior to insertion of the stud between the
flanges so that the hole can be used to align the stud with the vertical slot before
passing the attachment means through the vertical slot and into the stud.” Id. at 938.
This court based its claim construction primarily on statements in the prosecution
history, holding that “the prosecution history of the ’760 patent reveals that the patentee
limited its invention to studs having pre-existing holes.” Id. at 937. 4 We vacated the
district court’s judgment of infringement and remanded for further proceedings
consistent with our claim construction. Id. at 938.
On remand, the district court granted Metal Lite’s motion for summary judgment
of non-infringement because the accused products did not use studs with pre-existing
holes. SlipTrack Sys., Inc. v. Metal Lite, Inc., No. 98-20 AHS, slip op. at 8 (C.D. Cal.
June 15, 2005). Although SlipTrack initially appealed that decision, it later moved to
voluntarily dismiss its appeal. SlipTrack Sys., Inc. v. Metal Lite, Inc., 168 Fed. Appx.
943 (Fed. Cir. Feb. 10, 2006).
On February 5, 2005, following our claim construction decision and more than
twelve years after the original patent issued, Brady filed an application for reissue of its
’760 patent. The reissue application included all of the original claims and one
additional claim:
11. A building construction assembly that includes a header and
a stud wherein the header is capable of vertical movement relative to said
assembly comprising:
4
Just before our decision construing this claim term, a different district court
in a case involving the same patent but a different defendant also concluded that the
claims of the ’760 patent require a pre-existing hole. SlipTrack Sys., Inc. v. Steeler
Metals, Inc., No. C-04-0462-PVT, slip op. at 11 (N.D. Cal. Oct. 12, 2004). This court
issued a Rule 36 affirmance of that decision. Sliptrack Sys., Inc. v. Steeler Metals, Inc.,
158 Fed. Appx. 283 (Fed. Cir. Nov. 21, 2005).
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a header having a web and flanges with said flanges connected to
said web; at least one of said flanges having at least one vertical slot
therein;
a stud having a width less than the distance between said flanges
of said header and having a top end;
said stud having at least one hole formed therein proximal to said
top end by an attachment means passing through said slot and through
said hole to slideably unite said header to said stud whereby said slot
permits said header to move vertically with respect to said stud while
restricting horizontal movement of said header;
said top end fitting between said flanges perpendicular to said
header positioned so that said hole is aligned with said vertical slot.
Reissue patent, col.6 ll.6-27 (emphasis added). In prosecuting the reissue, Brady
alerted the PTO to the fact that two courts, including this court, had construed claim 1 of
the ’760 patent to cover only one of the disclosed embodiments in the patent and made
clear that claim 11 was being added in reissue to claim the preferred embodiment that
had been excluded by our claim construction. But Brady argued that claim 11 was
narrower in scope than original claim 1 because claim 11 requires the additional
limitation that the hole be made by a self-tapping screw. Metal Lite protested the
reissue application before the PTO, although the examiner may not have considered the
protest since it was never included as part of the reissue file wrapper. The examiner
allowed claim 11 stating: “[N]ewly presented claim 11 includes all of the limitations of
previously allowed claim 1 with the additional limitation ‘by’ [] which further narrows the
scope to a specific embodiment of the invention wherein the ‘at least one hole’ is formed
by the ‘attachment means’ [].” J.A. at 153.
In June 2006, after receiving the Notice of Allowability as to the reissue
application, Brady issued an “Industry Announcement,” which stated that it would
receive “a new patent for [its] SLP-TRK Brand slotted track product.” The
announcement also stated:
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Previously, the Court of Appeals had limited the original slotted track
patent in a way that Brady never intended. This new patent removes the
limitation recently imposed by the Court of Appeals. From this date
forward, anyone who manufactures and sells [any style of] slotted track
will infringe Brady’s new patent regardless of how the slotted track is
installed.
J.A. at 438 (emphasis in original). The patent reissued on January 9, 2007.
The same day, Brady sued a number of companies including Perfect Wall, Inc.,
Metal Lite, Inc., Steeler, and SCAFCO (collectively “defendants”), alleging that certain
“slotted track products” infringed the claims of the reissue patent. Defendants moved
for summary judgment of invalidity as to the reissue patent. The district court issued a
tentative ruling on June 11, 2007, tentatively granting defendants’ motion for summary
judgment of invalidity because the reissue violated Section 251’s prohibition on
broadening reissues more than two years after the original patent issued, denying Metal
Lite’s motion on the alternative ground that the reissue violated the recapture rule, and
denying Metal Lite’s motion for attorney’s fees. Following a hearing on the motions, the
district court granted the motion for summary judgment of invalidity on June 13, 2007.
The district court concluded that claim 11 “includes within its scope a user who places a
stud without a pre-existing hole between the flanges of the header and then creates the
hole through the stud with a self-tapping screw.” Summary Judgment Order at 7.
Because reissue claim 11 broadened the scope of the original patent and Brady filed his
reapplication more than two years after the original patent issued, the district court held
reissue claim 11 invalid. The district court also denied Metal Lite’s motion for attorney’s
fees.
7
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II.
We review a district court’s grant of summary judgment de novo. Ethicon Endo-
Surgery, Inc. v. U.S. Surgical Corp., 149 F.3d 1309, 1315 (Fed. Cir. 1998). At summary
judgment, all ambiguous facts and inferences must be construed in the light most
favorable to the non-movant. Id. Summary judgment is only appropriate if no genuine
issues of material fact exist and the movant is entitled to judgment as a matter of law.
Id.A. Reissue Validity
Under 35 U.S.C. § 251, a patentee can seek reissue of his patent when he
“through error without any deceptive intention . . . claim[ed] more or less than he had a
right to claim in the patent.” If the patentee seeks reissue more that two years from the
grant of the original patent, however, the reissued patent cannot “enlarg[e] the scope of
the claims of the original patent.” Id. 5
“Whether the claims of a reissue patent violate 35 U.S.C. § 251, and thus are
invalid, is a question of law, which we review de novo.” N. Am. Container, Inc. v.
Plastipak Packaging, Inc., 415 F.3d 1335, 1349 (Fed. Cir. 2005). In this case, we
conclude that Brady’s reissue claim 11, the only asserted claim, enlarged the scope of
the claims of the original patent. Since Brady applied for reissue more than two years
5
Metal Lite argues, as an alternative ground for affirmance, that Brady’s
reissue patent violated the recapture rule. The recapture rule, however, bars certain
reissues within the first two years after the original patent issued if the patentee
voluntarily surrendered claim scope during the original prosecution. E.g., N. Am.
Container, Inc. v. Plastipak Packaging, Inc., 415 F.3d 1335, 1340, 1349 (Fed. Cir.
2005); Ball Corp. v. United States, 729 F.2d 1429, 1433, 1436 (Fed. Cir. 1984). In this
case, Brady did not apply for reissue until well after the two-year period had expired,
making the recapture rule inapplicable. Thus, we need only determine whether the
reissue violates the proscription in Section 251 that reissues outside the two-year period
may not “enlarge[e] the scope of the claims of the original patent.”
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after issuance of the original patent, the reissue violated Section 251, and we affirm the
district court’s grant of summary judgment of invalidity.
This court has held:
A claim of a reissue application is broader in scope than the original
claims if it contains within its scope any conceivable apparatus or process
which would not have infringed the original patent. A reissue claim that is
broader in any respect is considered to be broader than the original claims
even though it may be narrower in other respects.
Tillotson, Ltd. v. Walbro Corp., 831 F.2d 1033, 1037 n.2 (Fed. Cir. 1987); see also In re
Freeman, 30 F.3d 1459 (Fed. Cir. 1994).
In this case, the accused products did not infringe the claims of the original
patent as construed by this court in SlipTrack Systems, Inc. v. Metal Lite, Inc., 113 Fed.
Appx. 930 (Fed. Cir. Dec. 1, 2004), which held that the claim limitation “said stud having
at least one hole formed therein proximal to said top end” was limited to a pre-existing
hole. Under the principles of stare decisis and the Supreme Court’s guidance in
Markman, this court follows the claim construction of prior panels absent exceptional
circumstances. Miken Composites, L.L.C. v. Wilson Sporting Goods Co., 515 F.3d
1331, 1338 n.* (Fed. Cir. 2008) (“[T]reating interpretive issues as purely legal will
promote (though it will not guarantee) intrajurisdictional certainty through the application
of stare decisis.” (quoting Markman v. Westview Instruments, Inc., 517 U.S. 370, 391
(1996))).
Brady does not ask that we explicitly overrule the prior panel’s construction of the
claims of the original patent, and Brady admits that products that would not infringe the
claims of the original patent do infringe reissue claim 11. This is because reissue claim
11 requires that “said stud having at least one hole formed therein proximal to said top
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end by an attachment means.” In other words, in reissue claim 11, the hole is not pre-
existing but is formed using a self tapping screw (the attachment means disclosed in the
specification). Because products in which the hole is not pre-existing but instead
formed using a self-tapping screw (i.e., the accused products in this case) would not
infringe the claims of the original patent but would infringe reissue claim 11, we
conclude that reissue claim 11 enlarged the scope of the original patent. We affirm the
district court’s grant of summary judgment of invalidity as to that claim.
B. Attorney’s Fees
Metal Lite and Perfect Wall (collectively “Metal Lite”) cross-appeal the district
court’s denial of their motion for attorney’s fees. In reviewing a district court’s decision
on Section 285 attorney’s fees, we review the decision as to whether the case is
exceptional for clear error, and we review the subsequent determination as to whether
fees are appropriate for abuse of discretion. Cybor Corp. v. FAS Techs., Inc., 138 F.3d
1448, 1460 (Fed. Cir. 1998) (en banc). Metal Lite argues that the district court erred in
not finding the case exceptional because Brady made misrepresentations to the PTO
during prosecution of the reissue patent, namely that claim 11 was narrower than the
original claims. The district court determined that Brady or its counsel had not
committed inequitable conduct:
I can tell you that based upon everything I know of this case and these
inventions, which is probably more than I ever care to know in a lifetime,
that the record from what I can see does not support a conclusion of
inequitable conduct by the patentee or counsel for the patentee.
J.A. at 1793. The district court did not clearly err in concluding that Brady did not
commit inequitable conduct. In the reissue prosecution, Brady provided the PTO with
this court’s prior decision in which we limited the claims of the original patent to only
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those with pre-existing holes. Brady argued to the PTO that claim 11 was narrower
based on the same arguments it advances here. Nevertheless, the PTO could have
rejected those arguments, and the district court did not clearly err in finding that Brady
did not commit inequitable conduct and the case was not exceptional on that basis.
Metal Lite also argues that the case is exceptional because Brady filed suit in
bad faith, knowing that claim 11 was invalid as a broadening reissue. While Brady’s
press release stating that the reissue patent “removes the limitation recently imposed by
the Court of Appeals” suggests that Brady may have known that its claim 11 was not
narrower, the district court was in the best position to observe Brady and its counsel
both during the prior case and this case. We see no clear error in its determination that
the present litigation was not brought in bad faith.
III.
In sum, we affirm the district court’s summary judgment of invalidity as to reissue
claim 11 because that claim enlarged the scope of the original patent claims and Brady
applied for reissue more than two years after the original patent issued. We also affirm
the district court’s denial of attorneys’ fees.
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