Asetek Danmark A/S v. Cmi USA Inc. , 842 F.3d 1350 ( 2016 )

United States Court of Appeals
for the Federal Circuit
______________________
ASETEK DANMARK A/S,
Plaintiff-Appellee
v.
CMI USA INC., FKA COOLER MASTER USA, INC.,
COOLER MASTER CO., LTD.,
Defendants-Appellants
______________________
2016-1026, 2016-1183
______________________
Appeals from the United States District Court for the
Northern District of California in No. 3:13-cv-00457-JST,
Judge Jon S. Tigar.
______________________
Decided: December 6, 2016
______________________
ERIK R. PUKNYS, Finnegan, Henderson, Farabow,
Garrett & Dunner, LLP, Palo Alto, CA, argued for plain-
tiff-appellee. Also represented by ROBERT F. MCCAULEY,
JEFFREY DANIEL SMYTH; ARPITA BHATTACHARYYA, Boston,
MA.
KYLE DAKAI CHEN, Cooley LLP, Palo Alto, CA, argued
for defendants-appellants. Defendant-appellant CMI USA
Inc. also represented by REUBEN HO-YEN CHEN.
______________________
2 ASETEK DANMARK A/S v. CMI USA INC.
Before PROST, Chief Judge, NEWMAN, and TARANTO,
Circuit Judges.
Opinion for the court filed by Circuit Judge TARANTO.
Opinion dissenting in part filed by Chief Judge PROST.
TARANTO, Circuit Judge.
In January 2013, Asetek Danmark A/S sued two
parties—Cooler Master USA, Inc., which a month later
became CMI USA Inc.; and Cooler Master Co., Ltd., a
Taiwanese company—in the Northern District of Califor-
nia, asserting infringement of two of Asetek’s patents,
U.S. Patent Nos. 8,240,362 and 8,245,764. All of the
accused products are branded “Cooler Master.” A few
months before trial, by stipulation, Asetek dismissed with
prejudice its claims against the Taiwanese company
(hereafter “Cooler Master”). Asetek’s claims of infringe-
ment by CMI USA (hereafter “CMI”), and CMI’s invalidity
counterclaims, were tried partly to a jury and partly to
the court. Asetek prevailed and received a judgment of
infringement, and of no invalidity, plus a damages award
against CMI of $404,941, based on a 14.5% royalty rate.
The district court also entered an injunction covering the
specific “Cooler Master” products found to infringe. The
injunction runs not only against CMI but also against
Cooler Master—which was not then a party (though it
later intervened and became one) and which was not
adjudicated liable for infringement.
We affirm the district court’s rulings on infringement,
invalidity, and damages. We remand as to part of the
injunction, i.e., insofar as the injunction reaches conduct
by Cooler Master (regarding the covered products) that
goes beyond abetting a new violation by CMI. The gov-
erning standards for reaching such conduct by persons
not adjudicated liable for the underlying wrong, reflected
in Federal Rule of Civil Procedure 65(d), are highly fact-
specific. In this case, a determination of the propriety of
ASETEK DANMARK A/S v. CMI USA INC. 3
the injunction’s reach would benefit from further findings
and, if sought and needed, further record development.
I
The ’362 and ’764 patents describe and claim systems
and methods for cooling the “central processing unit
(CPU) or other processing unit of a computer system”
using cooling liquid. ’362 patent, col. 1, lines 12–14; ’764
patent, col. 1, lines 11–13. According to the patents,
which have similar specifications, liquid-cooling systems
in the prior art consisted of “many components,” which
were “coupled together,” increasing “total installation
time” and causing “leakage.” ’362 patent col. 1, lines 34–
49; ’764 patent, col. 1, lines 32–37. By contrast, the ’362
and ’764 patents describe systems that combine multiple
components—a “heat-exchanging interface,” a “reservoir,”
and a “pump”—into a single “integrate element.” ’362
patent, col. 2, lines 9–11; ’764 patent, col. 2 lines 5–6. As
recited in the asserted claims, the “reservoir” includes two
“vertically” separated chambers, referred to as the “upper
chamber” and “lower chamber,” ’362 patent, col. 18, lines
56–65, or “pump chamber” and “thermal exchange cham-
ber,” ’764 patent, col. 27, lines 49–57.
Claim 1 of the ’764 patent is representative:
1. A cooling system for a heat-generating
component, comprising:
a double-sided chassis adapted to mount a
pump configured to circulate a cooling liquid,
the pump comprising a stator and an impeller,
the impeller being positioned on the underside
of the chassis and the stator being positioned
on the upper side of the chassis and isolated
from the cooling liquid;
a reservoir adapted to pass the cooling
liquid therethrough, the reservoir including:
4 ASETEK DANMARK A/S v. CMI USA INC.
a pump chamber including the impel-
ler and formed below the chassis, the
pump chamber being defined by at least
an impeller cover having one or more pas-
sages for the cooling liquid to pass
through;
a thermal exchange chamber formed
below the pump chamber and vertically
spaced apart from the pump chamber, the
pump chamber and the thermal exchange
chamber being separate chambers that are
fluidly coupled together by the one or
more passages; and
a heat-exchanging interface, the heat-
exchanging interface forming a boundary
wall of the thermal exchange chamber,
and configured to be placed in thermal
contact with a surface of the heat-
generating component; and
a heat radiator fluidly coupled to the
reservoir and configured to dissipate heat
from the cooling liquid.
’764 patent, col. 27, lines 39–65. The asserted claims of
the ’362 patent are similar, but additionally require the
“heat-exchanging interface” to be “removably attached” or
“removably coupled” to the “reservoir.” ’362 patent, col.
20, lines 3–6; id. col. 20, lines 40–44.
“Cooler Master is a Taiwanese supplier of computer
components, including cooling devices for heat generating
components” of computers. Appellants’ Br. 24. Its prod-
ucts include the “Cooler Master”-branded Seidon 120M,
Seidon 120XL, Seidon 240M, Seidon 120V, Seidon 120V
Plus, Glacer 240L, Nepton 140XL, and Nepton 280L
liquid-cooling products at issue in this case. CMI is a U.S.
company that—as reflected in its name (“Cooler Master
ASETEK DANMARK A/S v. CMI USA INC. 5
USA, Inc.”) until February 2013, a month after this suit
began, ECF Nos. 60, 61 (May 2014 change of caption)—
collaborates with Cooler Master in designing and selling
“Cooler Master”-branded products in the United States.
J.A. 3562–63. CMI also “assists” Cooler Master “in set-
ting the manufacturer’s suggested retail price of the
accused products sold in the United States.” J.A. 3563.
The evidence, seemingly undisputed, is that, by oral
agreement, CMI was Cooler Master’s exclusive U.S.
distributor of Cooler Master products. J.A. 7848–49;
Transcript of Proceedings at 1069, 1106–07, Asetek Dan-
mark A/S v. CMI USA, Inc., 00457-JST (N.D. Cal. Dec.
10, 2014), ECF No. 243. Between 2012 and 2013, CMI
began selling specified Seidon, Glacer, and Nepton models
of “Cooler Master”-branded products in the United States.
In its January 2013 suit against CMI and Cooler Mas-
ter, Asetek asserted that they were infringing claims 14–
15 and 17–19 of the ’362 patent and claims 1–15 and 17–
18 of the ’764 patent by selling, offering to sell, and im-
porting the Seidon, Glacer, and Nepton products. 1 Dis-
covery proceeded, and infringement and invalidity
contentions were filed. By September 5, 2014, the litiga-
tion was far enough along that CMI moved for summary
judgment of invalidity. Cooler Master did not join that
motion, however, because, the day before, it and Asetek
stipulated to Cooler Master’s dismissal with prejudice—a
1 Asetek’s complaint did not identify the Seidon
120V Plus, and the jury did not specifically find that the
’362 and ’764 patents covered that product. But the
district court’s injunction identified the Seidon 120V Plus
as an infringing device because Asetek and CMI stipulat-
ed that it has the same pump head design as the Seidon
120V, which was specifically considered by the jury. On
appeal, neither CMI nor Cooler Master challenges the
inclusion of the Seidon 120V Plus in the injunction.
6 ASETEK DANMARK A/S v. CMI USA INC.
dismissal entered on September 5, 2014. Asetek agreed to
that dismissal after CMI and Cooler Master witnesses
testified, in discovery, to Cooler Master’s exclusive-
distribution arrangement with CMI for the accused prod-
ucts in the United States.
The case went to trial a few months later, in Decem-
ber 2014. At trial, CMI argued that the ’362 patent was
not infringed, that the ’764 patent was anticipated by U.S.
Patent No. 7,544,049 (Koga), and that the ’362 and ’764
patents were obvious over Koga and Korean Utility Model
No. XX-XXXXXXX (Ryu). The district court granted Asetek’s
motion for judgment as a matter of law that Koga did not
anticipate claim 4 of the ’764 patent, and the jury re-
turned a verdict for Asetek on the remaining issues. The
jury found that CMI infringed, directly and contributorily,
the asserted claims of the ’362 patent and rejected CMI’s
Koga-based anticipation challenge to the remaining
claims of the ’764 patent. Additionally, the jury made
specific findings, related to obviousness, about the level of
ordinary skill in the relevant art, the scope and content of
the prior art, differences between the prior art and the
inventions claimed by the ’362 and ’764 patents, and
objective indicia of non-obviousness. For example, the
jury found that the claimed liquid-cooling systems differ
from the prior art because they combine a “pump” and a
“reservoir” “into a single unit” and because the “reservoir”
is a “single receptacle that is divided into an upper cham-
ber and a lower chamber.” The jury also found six objec-
tive indicia of non-obviousness. The jury found Asetek
entitled to a 14.5% reasonable-royalty rate and awarded
$404,941 in damages.
In April 2015, the district court entered its findings of
fact and conclusions of law on various matters the parties
had reserved to it. Asetek Danmark A/S v. CMI USA,
Inc., 100 F. Supp. 3d 871 (N.D. Cal. 2015). The court
concluded that CMI failed to prove that the ’362 and ’764
patents were invalid for obviousness, lack of written
ASETEK DANMARK A/S v. CMI USA INC. 7
description, or indefiniteness. In September 2015, the
district court denied CMI’s motions for judgment as a
matter of law or a new trial on infringement and damages
as well as for a new trial on obviousness. Asetek Dan-
mark A/S v. CMI USA, Inc., No. 3:13-cv-00457-JST, 2015
WL 5568360, at *3–12 (N.D. Cal. Sept. 22, 2015).
At the same time, the district court granted Asetek’s
motion for an injunction against both CMI and Cooler
Master, the latter not then a party. Id. at *12–21. After
identifying the “Infringing Products” covered (specified
Seiden, Nepton, and Glacer models), the injunction states:
(2) CMI USA, Inc. and its subsidiaries and affili-
ated companies (collectively defined as “CMI”), as
well as CMI’s successors, assigns, officers, direc-
tors, agents, servants, employees, representatives
and attorneys, and those persons in active concert
or participation with them who receive notice of
the order are hereby immediately and permanent-
ly restrained and enjoined, pursuant to 35 U.S.C.
§ 283 and Fed. R. Civ. P. 65(d), from making, us-
ing, offering for sale or selling in the United
States, or importing into the United States, or
causing to be made, used, offered for sale, or sold
in the United States, or imported into the United
States, the Infringing Products.
(3) Cooler Master Co., Ltd. and its subsidiaries
and affiliated companies (collectively defined as
“Cooler Master”), as well as Cooler Master’s suc-
cessors, assigns, officers, directors, agents, serv-
ants, employees, representatives and attorneys,
and those persons in active concert or participa-
tion with them who receive notice of the order are
hereby immediately and permanently restrained
and enjoined, pursuant to 35 U.S.C. § 283 and
Fed. R. Civ. P. 65(d), from making, using, offering
for sale or selling in the United States, or import-
8 ASETEK DANMARK A/S v. CMI USA INC.
ing into the United States, or causing to be made,
used, offered for sale, or sold in the United States,
or imported into the United States, the Infringing
Products.
(4) Within 14 days of issuance of this order, CMI
and Cooler Master shall provide written notice of
this judgment and order, and the injunction or-
dered herein, to: their officers, directors, agents,
servants, representatives, attorneys, employees,
subsidiaries and affiliates, and those persons in
active concert or participation with them. CMI
and Cooler Master shall take whatever means are
necessary or appropriate to ensure that this order
is properly complied with.
(5) CMI and Cooler Master shall include a copy of
this Order and the written notice in paragraph (6)
below [stating that the product is affected by a
permanent injunction, infringes the ’362 and ’764
patents, and “may not be sold, offered for sale,”
“used,” or “imported into the United States”] along
with every bill of sale for the Infringing Products
and in the boxes in which the Infringing Products
are shipped or sold, regardless of where they are
sold, indicating that they infringe the patents-in-
suit, are subject to an injunction in the United
States, and thus cannot be sold, offered for sale,
imported, or used in the United States.
Id. at *20. The injunction lasts until the ’362 and ’764
patents expire, except that either party may seek modifi-
cation if either patent is finally adjudged invalid in an-
other proceeding. Id. at *21.
In January 2016, Cooler Master appealed the injunc-
tion, paragraphs (3)–(5) of which impose obligations on it.
Cooler Master then intervened, becoming a party again,
even though in similar circumstances non-parties have
been permitted to appeal. See, e.g., Class Plaintiffs v. City
ASETEK DANMARK A/S v. CMI USA INC. 9
of Seattle, 955 F.2d 1268, 1277 (9th Cir. 1992) (“a non-
party who is enjoined or otherwise directly aggrieved by a
judgment has standing to appeal the judgment without
having intervened in the district court”). The district
court subsequently denied Cooler Master’s motion to stay
the injunction.
CMI and Cooler Master appeal. CMI and Cooler Mas-
ter present challenges to the district court’s post-trial
rulings on infringement and obviousness and to the
injunction. CMI also presents challenges to the district
court’s post-trial rulings on damages. We have jurisdic-
tion under 28 U.S.C. § 1295(a)(1).
II
We review a denial of a motion for judgment of a mat-
ter of law de novo and must affirm unless “the evidence,
construed in the light most favorable to the nonmoving
party, permits only one reasonable conclusion, and that
conclusion is contrary to the jury’s verdict.” Pavao v.
Pagay, 307 F.3d 915, 918 (9th Cir. 2002). We review a
denial of a motion for new trial for abuse of discretion.
Incalza v. Fendi N. Am., Inc., 479 F.3d 1005, 1013 (9th
Cir. 2007). We review a grant of a permanent injunction
for an abuse of discretion, with underlying legal conclu-
sions reviewed de novo. S.E.C. v. Goldfield Deep Mines
Co. of Nev., 758 F.2d 459, 465 (9th Cir. 1985).
A
Appellants argue that the jury was required to find
the ’362 patent not infringed as a matter of law. Specifi-
cally, they contend that the alleged “heat exchanging
interfaces” in the accused products are not “removably
attached” or “removably coupled” to “reservoirs,” as the
asserted claims require. The reason, appellants say, is
that removing the “heat exchanging interfaces” in the
accused products would “damage the products or other-
wise render them nonfunctional.” Appellants’ Br. 37.
10 ASETEK DANMARK A/S v. CMI USA INC.
We reject appellants’ non-infringement argument.
“[W]here the parties and the district court elect to provide
the jury only with the claim language itself, and do not
provide an interpretation of the language in the light of
the specification and the prosecution history,” the jury’s
findings “must be tested by the charge actually given and
by giving the ordinary meaning of the language of the
jury instruction,” and the only question is one of substan-
tial evidence. Hewlett-Packard Co. v. Mustek Sys., Inc.,
340 F.3d 1314, 1321 (Fed. Cir. 2003). That rule applies
here, because the parties did not request a construction of
the claim terms “removably attached” or “removably
coupled,” and they did not object to the district court’s
jury instructions. Applying the ordinary meaning, then,
we conclude that substantial evidence supports the find-
ing of infringement.
The jury was entitled to find that the “heat exchang-
ing interfaces” in the accused products were “removably
attached” or “removably coupled.” Asetek’s expert, Dr.
Tilton, narrated videos about the Seidon 120M, Seidon
120V, Glacer 240L, and Nepton 140XL products and
testified that the “heat exchanging interfaces” in those
products could be removed by unscrewing the triangle-
head safety screws that secured them. Dr. Tilton ex-
plained that he had removed the screws in each of the
accused devices using commercially available screwdriv-
ers. CMI’s expert, Dr. Carman, agreed that the “heat
exchanging interfaces” could be removed, but testified
that they were not “removably attached” or “removably
coupled” because the screws were not intended to be
removed. The jury could reasonably reject Dr. Carman’s
opinion about whether unscrewing was intended, or his
opinion about whether unscrewing was needed to meet
the “removably attached” or “removably coupled” re-
quirements, or both.
Likewise, the jury could reasonably find the require-
ments met even though removing the “heat exchanging
ASETEK DANMARK A/S v. CMI USA INC. 11
interfaces” from the accused products would cause coolant
to leak. There is nothing unreasonable about finding a
component “removably attached” if it can be detached in
such a way that the device would function again if the
component were reattached. And contrary to appellants’
contention, the patent specification here does not require
functionality upon detachment with no further steps: the
cited passage describes an embodiment in which, if the
“heat exchanging interface” is “excluded” from the embod-
iment, “sealing” must be provided to prevent “cooling
liquid” from “leaking” from the “reservoir.” ’362 patent,
col. 8, lines 66–67, and col. 9, lines 13–19.
Dorel Juvenile Group, Inc. v. Graco Children’s Prod-
ucts, Inc., 429 F.3d 1043 (Fed. Cir. 2005), which interpret-
ed superficially similar claim terms, does not establish
non-infringement here. In Dorel, which involved a patent
on a child’s car seat, the asserted claims recited a “base,”
which was “removably attached” and “removably secured”
to a “seat.” Id. at 1044–45. We upheld a claim construc-
tion, relying on the specification for context, that “remov-
ably attached” in that case implied that the “seat” and
“base” were “affixed together in a manner that contem-
plates that the seat may be removed from the base such
that the seat remains functional.” Id. at 1045. The
present case involves no claim construction, but instead
claim application, and the context is quite different, e.g.,
there is no requirement here that each component was
meant to function separately (unlike the seat in Dorel).
B
Appellants argue that the subject matter of the as-
serted claims of the ’764 patent would have been obvious
over Koga and Ryu. Specifically, they argue that, as a
matter of law, Koga’s “sucking channel” is a “thermal
exchange chamber” (a requirement of all asserted claims
of the ’764 patent) because the “sucking channel” “ex-
changes some heat.” Appellants’ Br. 45. The district
12 ASETEK DANMARK A/S v. CMI USA INC.
court found that Koga did not teach this claim element, a
factual component of the obviousness analysis. Asetek,
100 F. Supp. 3d at 886–88. That finding is not clear error.
Specifically, the fact that Koga’s “sucking channel” ex-
changes some heat, no matter how minimal and inevita-
ble, does not entail that it is properly considered a
“thermal exchange chamber.” 2
No ordinary meaning or claim construction requires
appellants’ conclusion that Koga’s “sucking channel” is a
“thermal exchange chamber” simply because it exchanges
some heat. No meaning of the claim phrase precludes its
limitation only to devices with certain device-defining
characteristics such as purpose and principal use, exclud-
ing other structures that occasionally or in minor ways
produce the same result—any more than a bedside plug-
in radio must be considered a room radiator because it
unavoidably gives off some heat. As the district court
noted, accepting appellants’ conclusion courts draining
any meaning from “thermal exchange” in the “thermal
exchange chamber” phrase. Asetek, 2015 WL 5568360, at
*10. Under appellants’ theory, any chamber would seem
to count as a “thermal exchange chamber” because, as Dr.
Tilton testified, “[h]eat transfer will always happen
between any two bodies that are at . . . different tempera-
tures.” Transcript of Proceedings at 1558, Asetek Dan-
mark A/S v. CMI USA, Inc., No. 3:13-cv-00457-JST (N.D.
Cal. Dec. 16, 2014) (“Dec. 16 Tr.”), ECF No. 215. That
2 Asetek argues that a substantial-evidence stand-
ard applies, because the jury implicitly found that Koga’s
“sucking chamber” was not a “thermal exchange chamber”
in rejecting anticipation. We need not scrutinize the jury
verdict or otherwise address that contention. Any differ-
ence between “clear error” and “substantial evidence”
makes no difference to our conclusion about Koga and the
claim element at issue.
ASETEK DANMARK A/S v. CMI USA INC. 13
would appear true even for an insulated chamber, because
imperfections in the insulation would result in some heat
transfer. It was proper to reject appellants’ theory.
Moreover, sufficient evidence supports the district
court’s finding that a person of ordinary skill in the art
would not consider Koga’s “sucking channel” to be a
“thermal exchange chamber.” Dr. Tilton testified that the
purpose of Koga’s “sucking channel” was to deliver fluid to
Koga’s “pump room,” not to transfer heat; that any heat
transferred by the “sucking channel” would be inconse-
quential because of its small surface area and the high
rate of flow through it; and that Koga positively teaches
away from placing the “sucking channel” on top of, and in
thermal contact with, Koga’s “heat generating compo-
nent,” as the ’764 patent requires. Transcript of Proceed-
ings at 1417–18, Asetek, 3:13-cv-00457-JST (N.D. Cal.
Dec. 15, 2014), ECF No. 213. Dr. Carman, CMI’s expert,
testified that heat exchange was not the purpose of Koga’s
“sucking channel.” Dec. 16 Tr. at 1645. On the evidence,
the district court could reasonably find that Koga’s “suck-
ing channel” was not a “thermal exchange chamber.”
This is a claim-specific finding about what character-
izes some devices as a “thermal exchange chamber” and
Koga’s “sucking channel” not having those characteristics.
As a result, appellants are wrong in suggesting that the
finding is contrary to various precedents. Those prece-
dents all involve situations where a reference or device
does come within a claim term. See Abbott Labs. v.
Sandoz, Inc., 566 F.3d 1282, 1299 (Fed. Cir. 2009) (where
a claim term covers an accused product or process, there
is infringement even if de minimis); Embrex, Inc. v. Ser-
vice Eng’g Corp., 216 F.3d 1343, 1349 (Fed. Cir. 2000)
(same); Verdegaal Bros., Inc. v. Union Oil Co. of Cal., 814
F.2d 628, 630, 632 (Fed. Cir. 1987) (claim element of
“making a concentrated liquid fertilizer by reacting sulfu-
ric acid and urea” taught by reference requiring the
14 ASETEK DANMARK A/S v. CMI USA INC.
sulfuric acid to be “added slowly”). That is enough to
distinguish those precedents from this case.
C
We also reject CMI’s challenge to the damages award.
CMI argues that, in calculating the 14.5% royalty award,
Asetek’s damages expert, Dr. Mody, improperly relied on
Asetek’s per-unit profit margin under its licensing agree-
ment with another company, Corsair. According to CMI,
Dr. Mody’s approach circumvented the requirement,
applicable when lost-profits damages are sought, that a
patent owner prove that it would have made the infring-
er’s sales “but for” the infringement—a requirement not
applicable to reasonable-royalty damages. See BIC Lei-
sure Prods., Inc. v. Windsurfing Int’l, Inc., 1 F.3d 1214,
1218 (Fed. Cir. 1993); Panduit Corp. v. Stahlin Bros.
Fibre Works, Inc., 575 F.2d 1152, 1156 (6th Cir. 1978).
Additionally, CMI argues that the royalty award is not
supported by substantial evidence because the Asetek-
Corsair license included a maximum royalty rate of 7%.
We reject both arguments.
35 U.S.C. § 284 guarantees to a patent holder damages
“adequate to compensate for the infringement, but in no
event less than a reasonable royalty.” A patent owner,
having prevailed on liability, may receive a reasonable
royalty or lost profits, but not both for the same infringing
units. See SmithKline Diagnostics, Inc. v. Helena Labs.
Corp., 926 F.2d 1161, 1164 (Fed. Cir. 1991). There is no
dispute here about the propriety of using the common
hypothetical-negotiation approach to calculating a rea-
sonable royalty, under which the finder of fact “attempts
to ascertain the royalty upon which the parties would
have agreed had they successfully negotiated an agree-
ment just before infringement began.” Lucent Techs., Inc.
v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009).
The amount of damages presents a fact question, re-
viewed for substantial evidence in a jury-tried case, and
ASETEK DANMARK A/S v. CMI USA INC. 15
the underlying methodology is reviewed for an abuse of
discretion, including consistency with governing legal
principles. See Aqua Shield v. Inter Pool Cover Team, 774
F.3d 766, 770 (Fed. Cir. 2014); Micro Chem., Inc. v. Lex-
tron, Inc., 317 F.3d 1387, 1394 (Fed. Cir. 2003).
To the extent that Dr. Mody’s analysis referred to
Asetek’s per-unit profit on its cooling units, CMI’s legal
objection lacks merit. As we have recognized, a patent
owner participating in a hypothetical negotiation would
consider the profits on sales it might lose as a result of
granting a license. Rite-Hite Corp. v. Kelley Co., 56 F.3d
1538, 1554–55 (Fed. Cir. 1995) (en banc). 3 The fact that a
royalty calculation relies in part on the patent owner’s
per-unit profits does “not make it an unreasonable
award.” Id. at 1555. We have explained that a patent
owner would be “unlikely” to be “interested in” accepting
a royalty rate lower than its profit margin on the patented
products. See Mitutoyo Corp. v. Cent. Purchasing, LLC,
499 F.3d 1284, 1292 (Fed. Cir. 2007) (stating that the
patent owner would be “unlikely [to] have been interested
in less than a 29.2% [reasonable-royalty] rate,” equal to
the patent owner’s profit margin). Negotiating for a per-
unit payment equal to its per-unit profit can be a logical
approach for a patent owner that is uncertain of how
many sales might be lost by granting the license at issue
or is just using its own experience to place a value on the
right to use the technology at issue.
3 We have also explained that a patent owner in a
hypothetical negotiation would rationally consider not
only its own potential losses from licensing but those of
parent, sister, or similarly related companies. See Union
Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co.,
425 F.3d 1366, 1378 (Fed. Cir. 2005), overruled on another
issue, Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 576
F.3d 1348 (Fed. Cir. 2009) (en banc in part).
16 ASETEK DANMARK A/S v. CMI USA INC.
In its Reply Brief, CMI acknowledges “that profits may
be considered as a factor in the reasonable royalty calcu-
lation,” but it argues error in the damages verdict on the
ground that this factor “predominated and virtually
subsumed Asetek’s entire damages case.” Reply Br. 24.
But CMI identifies no legal principle about predominance
that would somehow bar a damages analysis that takes
reasonable account of all the evidence relevant to the
hypothetical negotiation—as Dr. Mody’s analysis did. As
Dr. Mody testified, she adjusted her hypothetical-
negotiation model to account for numerous considerations
other than Asetek’s per-unit profits, including “the nature
and the scope of the license” at issue, Transcript of Pro-
ceedings at 866, Asetek, No. 3:13-cv-00457-JST (N.D. Cal.
Dec. 9, 2014) (“Dec. 9 Tr.”), ECF No. 242; see id. at 855,
Asetek’s “established policy and marketing program,” id.
at 867, the “commercial relationship” between Asetek and
CMI, id. at 855, and the extent to which CMI’s profits
under the license would “be attributable to the patented
invention,” id. CMI has not shown that the resulting
damages verdict rests on a legally improper methodology.
Nor has CMI shown, as it suggests, that the use of
Asetek’s per-unit profit in the royalty analysis makes lost-
profits damages no longer worth pursuing by patent
owners. There are obvious reasons for some patent own-
ers to pursue lost profits. In some circumstances, e.g.,
where the patent owner is a strong economic monopolist,
proof of lost sales caused by the infringement and the
profits on those lost sales (as well as loss of profits from
sales made at prices lowered by the infringement) may be
less uncertain than proof of a reasonable royalty under
the standards applicable to the latter. And a lost-profit
award can be higher. A hypothetical-negotiation analysis
for a royalty considers not only the patent owner’s inter-
ests, but also the other side of the negotiation table under
the particular conditions of the hypothetical negotiation.
See Aqua Shield, 774 F.3d at 770–72 & n.1. A lost-profits
ASETEK DANMARK A/S v. CMI USA INC. 17
analysis is different, because as a general matter, the
patent owner is entitled to be made whole, upon proper
proof, for its loss of profits caused by the infringement,
without discounting for the rational interests limiting
willingness to pay on the infringer’s side. Not surprising-
ly, a leading commentary observes that “[l]ost profits
damages frequently bring the patent owner much more
than royalty awards” and are sought “in nearly every case
in which the patent owner manufactures or sells some-
thing that could reasonably be interpreted as competing
with an infringer’s product.” John Skenyon, Christopher
Marchese & John Land, Patent Damages Law and Prac-
tice § 2:1, at 64 (2015 ed.) (footnote omitted).
Finally, substantial evidence supports the jury’s find-
ing that a hypothetical negotiation between Asetek and
CMI would have resulted in a 14.5% reasonable royalty
rate, even though one portion of the Corsair license in-
cluded a maximum royalty rate of 7%. First, as Dr. Mody
testified, the Corsair license included an effective royalty
rate of between 10% and 19% based on two components:
(1) the actual royalty rate of between 2% and 7% and (2)
the minimum-purchase requirement. Using that range,
Dr. Mody concluded that Asetek and CMI would have
agreed to a royalty rate of about 16%. Second, Dr. Mody
testified that Asetek would have sought a higher royalty
rate from CMI than from Corsair because Asetek would
have treated CMI as a “competitor,” rather than a valued
“customer” (like Corsair). See Dec. 9 Tr. at 855, 858, 868–
71. Although CMI’s general manager, Mr. Chen, testified
that Asetek was willing to license its products to CMI and
Cooler Master, that assumption, even if credited, hardly
means that Asetek would have treated them the same as
Corsair. We conclude that the jury’s adoption of a 14.5%
royalty rate must be affirmed.
18 ASETEK DANMARK A/S v. CMI USA INC.
D
Cooler Master and CMI together challenge the injunc-
tion on two grounds. See Appellants’ Br. 6 (injunction
challenge presented for both appellants). First, they
argue that Cooler Master’s September 2014 dismissal
from the case with prejudice precluded the district court
from subjecting Cooler Master to the injunction’s obliga-
tions. Second, they argue that the injunction is too broad
in scope insofar as the injunction reaches Cooler Master’s
conduct (sale, importation, etc., involving the identified
“Cooler Master”-branded products) other than conduct
that abets a new violation by CMI, the only party adjudi-
cated liable for infringement.
The latter argument invokes the standards that de-
fine the limited circumstances in which injunctive obliga-
tions may be imposed on persons who have not been
adjudicated liable for the wrong for which the injunction
is a remedy. It is worth noting the limited scope of the
argument appellants have made on appeal in this re-
gard—which does not include arguments that, in certain
circumstances in other cases, persons not held liable have
made and may make against being subjected to injunctive
obligations. Thus, appellants do not argue that the dis-
trict court lacked personal jurisdiction over Cooler Mas-
ter. They do not argue that Cooler Master lacked notice
or an opportunity to be heard on the issues related to the
injunction. Nor do they argue that the injunction is
improper under eBay Inc. v. MercExchange, L.L.C., 547
U.S. 388 (2006), or because Cooler Master does not suffi-
ciently threaten to engage in the covered conduct. In
addition, appellants do not argue that naming Cooler
Master in the injunction is independently improper, but
only that the challenged obligations imposed on Cooler
Master here are improper for reasons it could invoke if
they were imposed through contempt. See Aevoe Corp. v.
AE Tech Co., Ltd., 727 F.3d 1375, 1383–84 (Fed. Cir.
2013) (because S&F Defendants were privies of the origi-
ASETEK DANMARK A/S v. CMI USA INC. 19
nally enjoined party AE Tech, and not acting inde-
pendently, naming them in modification of injunction
merely made explicit what was already implicit). Moreo-
ver, in challenging certain injunctive coverage of Cooler
Master, appellants do not separately challenge the lan-
guage reaching the “successors, assigns,” etc. of Cooler
Master if Cooler Master itself is properly covered. And
appellants do not dispute that Cooler Master is properly
subject to injunctive obligations to avoid actions that
would abet a new violation by CMI. See Reply Br. 26.
We address appellants’ two appellate arguments in
turn. The first argument, based on the agreed-to dismis-
sal of Cooler Master shortly before trial, we reject. The
second, narrower argument we think warrants a remand
for further proceedings, given the fact-specificity of the
relevant standards in this delicate area.
1
Appellants contend that, even if an injunction against
Cooler Master would be proper had no claim ever been
filed against it in this case, it cannot be enjoined because
it was initially a defendant and the claims against it were
dismissed with prejudice. Appellants rest that contention
on the premise that dismissal is an adjudication that has
claim-preclusive effect. But, while the premise is correct,
the inference appellants urge—that claim preclusion bars
relief as to future conduct—is not.
Appellants’ argument assumes that the “claim” cov-
ered by the dismissal, which concerned Cooler Master’s
pre-dismissal conduct, is the same as a “claim” covering
conduct subject to the injunction, which is Cooler Master’s
future conduct—not just post-dismissal, but post-trial and
post-injunction-issuance. It is well established, however,
that the difference in timing means that the two situa-
tions do not involve the same “claim” for claim-preclusion
purposes, even if all the conduct is alleged to be unlawful
for the same reason. See Dow Chems. Corp. v. NOVA
20 ASETEK DANMARK A/S v. CMI USA INC.
Chems. Corp. (Can.), 803 F.3d 620, 626–27 (Fed. Cir.
2015); Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., 672
F.3d 1335, 1343 (Fed. Cir. 2012); 18 Charles Alan Wright,
Arthur R. Miller & Edward H. Cooper, Federal Practice
and Procedure § 4409 (2d ed. 2002). As we have ex-
plained, “a party who sues a tortfeasor is ordinarily not
barred by a prior judgment from seeking relief for discrete
tortious action by the same tortfeasor that occurs subse-
quent to the original action.” Aspex Eyewear, 672 F.3d at
1342. The rationale is simple: claim preclusion “requires
a party to assert all claims that the party could have
asserted in the earlier lawsuit”; and a party cannot assert
claims based on “tortious conduct” that “had not occurred
at that time—those claims could not have been asserted
and therefore are not barred.” Id.Appellants cite nothing to the contrary. The cited de-
cisions establish only that a stipulated dismissal “general-
ly constitutes a final judgment on the merits” that
“precludes a party from reasserting the same claims” or
“same cause,” Headwaters Inc. v. U.S. Forest Service, 399
F.3d 1047, 1051−52 (9th Cir. 2005); In re Marino, 181
F.3d 1142, 1144 (9th Cir. 1999), or from challenging “acts
[that] fell within the scope of the pleadings” of the dis-
missed action, Esquire, Inc. v. Varga Enters., Inc., 185
F.2d 14, 17 (7th Cir. 1950). They do not address future
conduct like that covered by the injunction at issue here.
2
The fundamental principle relevant to appellants’
narrower, scope objection to the injunction here is that an
injunction may not “make punishable the conduct of
persons who act independently and whose rights have not
been adjudged according to law.” Regal Knitwear Co. v.
NLRB, 324 U.S. 9, 13 (1945) (citing Chase Nat’l Bank v.
City of Norwalk, 291 U.S. 431, 436–37 (1934), and other
decisions). But as that formulation suggests, an injunc-
tion may reach certain conduct by persons not held liable
ASETEK DANMARK A/S v. CMI USA INC. 21
for the underlying wrong where the conduct is not under-
taken “independently” of the persons who have been held
liable. Federal Rule of Civil Procedure 65(d) reflects the
standards when it declares that an injunction “binds only”
“the parties,” “the parties’ officers, agents, servants,
employees, and attorneys,” and “other persons who are in
active concert or participation” with them “who receive
actual notice of [the injunction] by personal service or
otherwise.”
In this case, the injunction imposes two sorts of obli-
gations on Cooler Master—it restricts conduct by Cooler
Master that abets a new violation by CMI; and it also
restricts conduct by Cooler Master that does not abet a
new violation by CMI. Putting aside the dismissal-based
contention, which we have rejected, appellants object here
only to the latter obligations. Those are found explicitly
in paragraphs 3, 4, and 5 of the injunction. And they are
found implicitly in paragraph 2, because, under well-
established law, that paragraph’s “active concert or par-
ticipation” coverage includes some conduct not abetting a
new violation by the liable person—such as might occur,
under certain circumstances, if a liable person (like CMI
here) turned over the wrongful operations to another
person or even simply ceased operating or existing alto-
gether, to be succeeded by another. As the parties made
clear at oral argument, there is a current live dispute
about the permissibility of barring Cooler Master from
engaging in U.S.-focused activities involving the infring-
ing products other than through CMI, and that substan-
tive dispute arises under paragraph 2 as well as
paragraphs 3, 4, and 5.
Different terminology has been used for the two cate-
gories of enjoinable conduct by persons not held liable.
Judge Learned Hand wrote, for the Second Circuit, that
the non-liable party “must either abet the [liable party],
or must be legally identified with him.” Alemite Mfg.
Corp. v. Staff, 42 F.2d 832, 833 (2d Cir. 1930), quoted in
22 ASETEK DANMARK A/S v. CMI USA INC.
Additive Controls & Measurement Sys., Inc. v. Flowdata,
Inc., 96 F.3d 1390, 1395 (Fed. Cir. 1996) (Additive Con-
trols I). Sometimes “privity” is used for the “legally
identified” category, which covers a number of bases for
binding a non-liable person to obligations imposed on a
liable person; but whatever the labels, both categories are
well established in the law and recognized as within the
“active concert or participation” standard of Rule 65(d).
See Golden State Bottling Co. v. NLRB, 414 U.S. 168,
179–80 (1973); Regal Knitwear, 324 U.S. at 13–14; Merial
Ltd. v. Cipla Ltd., 681 F.3d 1283, 1304–05 (Fed. Cir.
2012); Aevoe, 727 F.3d at 1384 (“‘Active concert or partici-
pation’ has been interpreted to include both aiders and
abettors of, and privies of, an enjoined party.”); Additive
Controls I, 96 F.3d at 1394–95, 1397; Rockwell Graphic
Sys., Inc. v. DEV Indus., Inc., 91 F.3d 914, 919–20 (7th
Cir. 1996); G. & C. Merriam Co. v. Webster Dictionary Co.,
639 F.2d 29, 35 (1st Cir. 1980).
The second category, which is the only one at issue in
this appeal, is less well defined than the first. And its
implementation by the courts has reflected a fact-specific
approach and particular caution so as to protect the
strong, underlying background principle shared with the
related area of preclusion law: “‘everyone should have his
own day in court.’” Taylor v. Sturgell, 553 U.S. 880, 893
(2008) (quoting Richards v. Jefferson County, 517 U.S.
793, 798 (1996)). 4 But this category, included within the
4 The Court in Taylor described recognized excep-
tions to that principle in the preclusion context, such as
where a person in the later suit sufficiently controlled the
litigant in the earlier suit, 553 U.S. at 893–95, and reject-
ed a broad “virtual representation” exception, id. at 895–
904. We do not suggest that the analysis in the preclu-
sion context is on all fours with the injunction-scope
analysis, but the two areas share some underlying princi-
ASETEK DANMARK A/S v. CMI USA INC. 23
“active concert or participation” standard, embraces at
least two types of situations of potential relevance here.
Thus, the “legally identified” category has long cov-
ered at least some situations in which the non-liable
person is a successor of the liable person in a relevant
respect. See Golden State, 414 U.S. at 180 (explaining in
the employer context that Rule 65(d)’s policy is consistent
with imposing a predecessor’s obligation on a successor
enterprise: “[A] bona fide purchaser, acquiring, with
knowledge that the wrong remains unremedied, the
employing enterprise which was the locus of the unfair
labor practice, may be considered in privity with its
predecessor for purposes of Rule 65(d). . . . The tie be-
tween the offending employer and the bona fide purchaser
of the business, supplied by a [National Labor Relations]
Board finding of a continuing business enterprise, estab-
lishes the requisite relationship of dependence” of the
successor’s conduct on the liable person.); Regal Knitwear,
324 U.S. at 14 (discussing successors and assigns and
recognizing enjoinability “in appropriate circumstances”
of “‘those to whom the business may have been trans-
ferred, whether as a means of evading the judgment or for
other reasons’” (quoting Walling v. James V. Reuter, Inc.,
321 U.S. 671, 674 (1944)). 5 This court so recognized in
Additive Controls I, explaining that certain “successor”
situations, involving evasive intent, are covered by the
ples. See Nat’l Spiritual Assembly of the Baha’is of the
U.S. Under the Hereditary Guardianship, Inc. v. Nat’l
Spiritual Assembly of the Baha’is of the U.S., Inc., 628
F.3d 837, 847–54 (7th Cir. 2010) (borrowing from Taylor
and preclusion law to resolve Rule 65(d) issue).
5 As Golden State’s “dependence” language con-
firms, where that standard is met, the non-liable person’s
conduct is not “wholly independent” of the liable person.
Golden State, 414 U.S. at 180.
24 ASETEK DANMARK A/S v. CMI USA INC.
“active concert or participation” standard of Rule 65(d).
96 F.3d at 1397; see Merial, 681 F.3d at 1304, 1305 (simi-
lar); Additive Controls & Measurement Sys., Inc. v. Flow-
data, Inc., 154 F.3d 1345, 1355 (Fed. Cir. 1998) (Additive
Controls II) (test of “substantial continuity of identity,”
originating in “labor relations context,” “has been adopted
as a general expression of the degree of closeness that
Rule 65(d) requires for a non-party successor to be subject
to the injunction”). 6
Another subcategory recognized in various cases in-
volves situations in which a party’s litigation of a case is
sufficiently controlled by another person that the latter
may be said to have had its day in court and on that
ground be subject to the injunctive obligations. The First
Circuit in G. & C. Merriam recognized that a nonparty is
“legally identified” with a liable party, and may therefore
itself be enjoined, if the nonparty “had such a key role in
the [party’s] participation in the injunction proceedings
that it can be fairly said that he has had his day in court
in relation to the validity of the injunction.” 639 F.2d at
37. We recognized the point in Additive Controls II,
6 Additive Controls I cites Kloster Speedsteel AB v.
Crucible Inc., 793 F.2d 1565, 1582–83 (Fed. Cir. 1986)
(acquirer of assets of liable person), overruled in unrelated
respect, Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH
v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2009), and New
York v. Operation Rescue National, 80 F.3d 64, 70–71 (2d
Cir. 1996) (“successors” may include organizations
through which “similarly constituted groups of individuals
move fluidly between multiple unincorporated associa-
tions that share the same basic leadership and goals”).
We note that, in Travelhost, Inc. v. Blandford, 68 F.3d
958, 961–65 (5th Cir. 1995), the Fifth Circuit rejected a
particular injunction’s coverage of an arms-length pur-
chaser of a liable person’s assets.
ASETEK DANMARK A/S v. CMI USA INC. 25
quoting G. & C. Merriam in explaining that the officer of
a corporation is legally identified with a corporation if the
officer had just such control over the corporation’s litiga-
tion. 154 F.3d at 1352. The Seventh Circuit made the
same point in National Spiritual Assembly, relating G. &
C. Merriam’s holding to the established principle that a
nonparty may be “bound by a judgment if she assumed
control over the litigation in which that judgment was
rendered.” 628 F.3d at 852 n.4 (quoting Taylor, 553 U.S.
at 895; citing Montana v. United States, 440 U.S. 147,
153–54 (1979)).
In the present case the district court specifically in-
voked the “successor” standards when it cited the above-
quoted pages of Golden State and Regal Knitwear. Asetek,
2015 WL 5568360, at *17. And in entering the injunction,
the district court relied on certain facts: “CMI is author-
ized by . . . Cooler Master to sell Cooler Master-branded
liquid-cooling devices in the United States”; “CMI and
Cooler Master have an exclusivity agreement where CMI
is Cooler Master’s exclusive U.S. distributor”; and “CMI
and Cooler Master jointly developed the infringing prod-
ucts.” Id. “Because of Cooler Master’s past history in
developing the infringing products and its contractual
relationship with CMI,” the court then concluded, “Cooler
Master is an appropriate subject of the injunction under
Rule 65(d)(2).” Id. at *18.
In drawing that conclusion, the district court relied on
this court’s decision in Aevoe. While that decision is
instructive in various ways, it involves different facts
from the present case in at least one respect. In Aevoe,
the non-liable persons (the S&F Defendants) were barred
from selling the “infringing products obtained from” the
liable person (AE Tech). 727 F.3d at 1379–80. Here,
Cooler Master is the supplier; it does not acquire the
products at issue from CMI.
26 ASETEK DANMARK A/S v. CMI USA INC.
We do not decide what ultimate legal significance that
distinction may have here. A chain of title to particular
units is just one of a number of facts of potential relevance
to the inquiry into the proper scope of the injunction here.
For example, in Merial, we upheld an injunction barring
non-party Velcera from making, using, selling, or import-
ing certain products developed, manufactured, or pack-
aged with the assistance or participation of the liable
party, Cipla, even if Cipla acted only abroad. 681 F.3d at
1289–92, 1304–05. We relied on the district court’s find-
ings that the “multilayered relationships that linked
Velcera and Cipla” were structured “to obfuscate illicit
and intentional concerted action” by those parties. Id. at
1305. Here, besides other facts, Asetek has alleged that,
while Cooler Master may not acquire its products from
CMI, CMI’s cooperation in modifying its exclusivity deal
was obtained or needed in order for Cooler Master to
engage, other than through CMI, in the U.S.-focused sales
and related activities involving the products at issue.
We do not think it advisable to resolve the issue of the
proper scope of the injunction here without a fuller pic-
ture of the facts described by the district court. Rather,
we think, further proceedings are warranted before a final
conclusion is drawn about the injunction in this case.
Both the delicacy of the injunctive authority at issue and
the tradition of narrow fact-dependent determinations
whether to invoke it argue for deferring conclusions until
the facts about the relationship of Cooler Master and
CMI, both in their businesses and in this litigation, are
more fully developed and their legal significance more
fully explored. See Parker v. Ryan, 960 F.2d 543, 546 (5th
Cir. 1992) (identifying need for further inquiry and re-
manding); cf. United States v. Int’l Bhd. of Teamsters,
Chauffeurs, Warehousemen & Helpers, 964 F.2d 180, 184
(2d Cir. 1992) (“Whether any person is bound by a judg-
ment always depends on the precise relationship of that
person to the underlying litigation . . . .”).
ASETEK DANMARK A/S v. CMI USA INC. 27
Without prejudging ultimate materiality, and without
intending to be complete, we note some facts that either
side or both sides of this case may find worthy of further
development to form a full picture of whether Cooler
Master may be “legally identified” with CMI for present
purposes: the nature of the exclusivity relationship
between the firms (e.g., its scope, its terminability);
trademarks and other aspects of the two companies’
relations at relevant times; the origins of CMI and its
relationship to Cooler Master; the details of and intent
behind changes in the companies’ relations, particularly
since liability was found in this case; and the companies’
relationship in the conduct of this litigation, in which
products made by Cooler Master and carrying its brand
name are at stake, both before and after Cooler Master
was dismissed. We do not decide the relevance or impli-
cations of such facts. Nor do we answer several related,
potentially relevant questions: If Cooler Master needs
CMI’s permission to itself engage in the U.S.-focused acts
at issue, would such acts be properly viewed as taken in
active concert or participation with CMI? Is CMI’s inter-
est in such Cooler Master acts suggested by the fact that
CMI itself has joined in Cooler Master’s challenges to the
injunction’s scope on appeal, challenges whose success
would free Cooler Master to transfer business away from
CMI? Whether or not Cooler Master has plenary freedom
to transfer its business away from CMI, was Cooler Mas-
ter, after leaving this case, still exercising control over
CMI’s conduct of this litigation, which concerned the
future of Cooler Master’s products, or did Cooler Master
simply leave its products’ fate in this litigation in CMI’s
hands?
Two final, related points. First, we do not think it ap-
propriate to vacate the injunction at present. We have
discretion pursuant to 28 U.S.C. § 2106. Leaving the
injunction in force for a time would preserve the status
quo that has existed for a year, appellants not having
28 ASETEK DANMARK A/S v. CMI USA INC.
sought a stay from us. And, although we are refraining
from drawing any conclusions, we are not convinced, on
the present record, that the district court’s injunction is so
unlikely to be found improper that the status quo should
be disturbed. Accordingly, like the Fifth Circuit in Parker
v. Ryan, 960 F.2d at 546, we choose to leave the injunction
in place for now, and we remand for further proceedings
to determine the proper reach of the injunction, to be
conducted in as reasonably prompt a fashion as possible.
Second, such proceedings might be unnecessary, at all
or for a time, if Asetek chooses, in the meantime, to file a
new injunctive infringement action against Cooler Mas-
ter. In such an action, Asetek might seek a preliminary
injunction, relying on the judgment reached after full
litigation in the present case. We do not prejudge the
merits of any such request, or the merits of any such
separate suit, including any invocation by Asetek of
privity-based issue preclusion against Cooler Master
(which is not foreclosed simply by the absence of claim
preclusion, New Hampshire v. Maine, 532 U.S. 742, 748
(2001)). We note only that such a proceeding might
produce rulings that postpone the need to decide, or even
moot, the delicate remedial issue that we here remand to
the district court.
CONCLUSION
For the foregoing reasons, we affirm the district
court’s denial of CMI’s motions for judgment as a matter
of law and for new trial. We affirm the injunction except
insofar as it reaches Cooler Master’s conduct that does not
abet new violations by CMI. Insofar as the injunction
reaches such conduct, we remand for further considera-
tion in accordance with this opinion, without vacating any
part of the injunction.
Costs awarded to Asetek.
AFFIRMED IN PART, REMANDED IN PART
United States Court of Appeals
for the Federal Circuit
______________________
ASETEK DANMARK A/S,
Plaintiff-Appellee
v.
CMI USA INC., FKA COOLER MASTER USA, INC.,
COOLER MASTER CO., LTD.,
Defendants-Appellants
______________________
2016-1026, 2016-1183
______________________
Appeals from the United States District Court for the
Northern District of California in No. 3:13-cv-00457-JST,
Judge Jon S. Tigar.
______________________
PROST, Chief Judge, dissenting in part.
I respectfully dissent from the majority’s decision to
remand this case to the district court for further proceed-
ings regarding the injunction while keeping it in force.
The correct course of action would be to vacate the por-
tions of the injunction that improperly reach Cooler
Master (who has not been found to infringe the asserted
patents) in its own capacity.
The district court issued an injunction that included
two key provisions. The first, Paragraph (2), enjoins
certain activities of CMI—the adjudicated infringer in
this case—“and those persons in active concert or partici-
pation” with it. The second, Paragraph (3), goes much
2 ASETEK DANMARK A/S v. CMI USA INC.
further. It enjoins the independent activities of Cooler
Master, an entity that was not a party to the liability
portions of the case. 1 While Paragraph (2) is proper
under Federal Rule of Civil Procedure 65(d), Paragraph
(3) is plainly an overreach of the district court’s authority
to issue judgments only on the disputes before it. Similar-
ly, portions of Paragraphs (4) and (5) that impose affirma-
tive obligations on Cooler Master related to the injunction
are also improper.
The majority speculates about the relationship be-
tween Cooler Master and CMI but provides no basis to
justify the district court’s injunction against Cooler Mas-
ter in its own capacity. Indeed, there is none.
I
Courts are not legislatures. We issue judgments only
on the disputes before us that bind only the parties in-
volved. As a consequence, it is a “general principle that a
non-party to an action may not be enjoined in that ac-
tion.” Additive Controls & Measurement Sys., Inc. v.
Flowdata, Inc., 96 F.3d 1390, 1395 (Fed. Cir. 1996). For
example, in Chase National Bank v. City of Norwalk, the
Supreme Court vacated an injunction that bound “all
persons to whom notice of the order of injunction should
come . . . .” 291 U.S. 431, 436 (1934) (internal quotation
marks omitted). This, in the Court’s view, “violate[d]
established principles of equity jurisdiction and proce-
dure” because it “ma[d]e punishable as a contempt the
conduct of persons who act independently and whose
1 Several months before trial, Asetek filed a volun-
tary stipulation to dismiss Cooler Master with prejudice,
which the district court granted. Cooler Master later
intervened for the limited purpose of suspending the
injunction against it.
ASETEK DANMARK A/S v. CMI USA INC. 3
rights have not been adjudged according to law.” Id. at
437.
The only exception to this rule, codified in Federal
Rule of Civil Procedure 65(d), is that an injunction may
bind non-parties who are “in active concert or participa-
tion with” parties to the action (or the parties’ officers,
agents, servants, employees, and attorneys) “who receive
actual notice of [the order] by personal service or other-
wise.” This exception derives from common law principles
regarding the power of courts in equity. In Alemite Manu-
facturing Corp. v. Staff, another case that vacated an
injunction covering a non-party, Judge Learned Hand
explained as follows:
[N]o court can make a decree which will bind any
one but a party; a court of equity is as much so
limited as a court of law; it cannot lawfully enjoin
the world at large, no matter how broadly it words
its decree. If it assumes to do so, the decree is pro
tanto brutum fulmen, and the persons enjoined
are free to ignore it. It is not vested with sover-
eign powers to declare conduct unlawful; its juris-
diction is limited to those over whom it gets
personal service, and who therefore can have their
day in court. Thus, the only occasion when a per-
son not a party may be punished, is when he has
helped to bring about, not merely what the decree
has forbidden, because it may have gone too far,
but what it has power to forbid, an act of a party.
This means that the respondent must either abet
the defendant, or must be legally identified with
him.
42 F.2d 832, 832–33 (2d Cir. 1930). In keeping with this
rationale, Rule 65(d)’s “active concert or participation”
condition has been interpreted to cover two general clas-
ses of non-parties: (1) aiders and abettors, and (2) those in
4 ASETEK DANMARK A/S v. CMI USA INC.
privity with an enjoined party. See, e.g., Golden State
Bottling Co. v. NLRB, 414 U.S. 168, 179–80 (1973).
Here, CMI is the adjudicated infringer. Accordingly,
the district court had authority to enter an injunction
against CMI and, pursuant to Rule 65(d), anyone in
“active concert or participation” with CMI. For example,
the district court can prohibit a third party from acting as
a conduit through which CMI could sell its infringing
products to United States customers (e.g., by operating a
website where CMI places its products for sale or by
acting as CMI’s distributor in the United States). The
court exercised this authority in Paragraph (2) of the
injunction, which is directed at “CMI USA, Inc. and its
subsidiaries and affiliated companies (collectively defined
as ‘CMI’), as well as CMI’s successors, assigns, officers,
directors, agents, servants, employees, representatives
and attorneys, and those persons in active concert or
participation with them.” J.A. 152 (emphasis added). It
should have stopped there.
Paragraph (3) of the injunction, however, goes much
further. It enjoins Cooler Master—who, again, is not the
adjudicated infringer—“from making, using, offering for
sale or selling in the United States, or importing into the
United States . . . the Infringing Products.” Id. Para-
graphs (4) and (5) further include requirements for Cooler
Master to, respectively, provide notice of the court’s
judgment to persons in “active concert or participation”
with it and provide written notice with every sale of an
infringing product. Id. These restrictions and obligations
in Paragraphs (3)–(5) are outside of the district court’s
authority because they reach independent activity by
Cooler Master. 2
2 The majority states that Cooler Master is not
challenging various aspects of the injunction against it.
ASETEK DANMARK A/S v. CMI USA INC. 5
A court must restrict itself to “what it has power to
forbid, an act of a party.” Alemite, 42 F.2d at 833. As we
have recently explained, “[c]ourts have carefully distin-
guished between entering an injunction against a non-
party, which is forbidden, and holding a non-party in
contempt for aiding and abetting in the violation of an
injunction that has been entered against a party, which is
permitted.” Additive Controls, 96 F.3d at 1395. Thus,
even a non-party “[h]aving a relationship to an enjoined
party of the sort set forth in Rule 65(d) . . . does not justify
granting injunctive relief against the non-party in its
separate capacity.” 3 Id. at 1395–96. “Unless duly sum-
moned to appear in a legal proceeding,” one can “rest
assured that a judgment recovered therein will not affect
his legal rights.” Chase Nat’l Bank, 291 U.S. at 441.
In this case, the district court dismissed Asetek’s alle-
gations against Cooler Master with prejudice in Septem-
ber 2014. From that point forward, the district court had
the power to adjudicate but one source of potential liabil-
ity: CMI’s alleged infringement of the ’362 and ’764 pa-
tents. Rule 65(d) permits the district court to enjoin
Cooler Master only to the extent Cooler Master is aiding
and abetting CMI’s acts of infringement or can be deemed
Majority Op. at 18–19. Regardless, there is no question
that Cooler Master is challenging the portions of the
injunction that reach it in its own capacity.
3 Our decision in Aevoe Corp. v. AE Tech Co., 727
F.3d 1375 (Fed. Cir. 2013), is consistent. Although the
district court in Aevoe modified its preliminary injunction
to enjoin a non-party, we found that the modification fell
within the “acting in concert” scope of the original injunc-
tion and, thus, was consistent with Rule 65(d). 727 F.3d
at 1379, 1384. In addition, the modification occurred only
after the patentee in that case had filed an amended
complaint naming the non-party. Id. at 1379–80.
6 ASETEK DANMARK A/S v. CMI USA INC.
its privy. There has been no adjudication that Cooler
Master infringes, so there is no independent activity by
Cooler Master that the district court has the power to
enjoin. See Additive Controls, 96 F.3d at 1395 (holding
that an injunction against entities in their separate
capacity “cannot be justified as an application of Rule
65(d), since [such an injunction] does not govern [their]
conduct solely as it relates to their activities in concert
with an enjoined party”).
Therefore, the provisions in Paragraphs (3)–(5) of the
injunction that reach Cooler Master in its own capacity
must be vacated. Cooler Master should remain “entitled
to contest [its] liability and the appropriateness of equita-
ble relief in a lawsuit in which [it is] named as [a]
part[y].” Id. at 1397.
II
The majority instead remands for further proceedings
regarding the relationship between CMI and Cooler
Master and keeps the problematic portions of the injunc-
tion in place in the interim. I disagree with that decision
for several additional reasons.
Even though the majority asserts that it is not pre-
judging any facts regarding Cooler Master, it implicitly
does so. It invites continued proceedings on matters that
were never put before a jury, based on evidence that was
largely submitted for the first time after trial. Remand-
ing this case creates additional burdens and expenses for
the district court and the parties, particularly given the
majority’s request for expedited proceedings. We should
not interfere with how the district court adjudicates
matters in the first instance.
Moreover, to the extent Asetek seeks recourse against
Cooler Master, it should do so through other procedures.
If Asetek believes Cooler Master is a privy to CMI, or is
aiding and abetting CMI’s infringing activity, Asetek can
ASETEK DANMARK A/S v. CMI USA INC. 7
pursue a contempt proceeding against Cooler Master. As
discussed above, Cooler Master would be subject to con-
tempt under Paragraph (2) of the injunction for such
activity; there is no need for Paragraph (3). And if Asetek
wishes to enjoin Cooler Master from independently in-
fringing its patents, it can bring a separate suit against
Cooler Master for patent infringement. 4 Curiously,
notwithstanding its remand of this case to the district
court, the majority does not disagree. Indeed, it urges
Asetek to pursue this alternative course.
Equally problematic is the majority’s refusal to vacate
the injunction in the interim. Aside from its implicit
prejudgment of certain facts, the majority only purports to
base its refusal to vacate the injunction on the absence of
an explicit request for a stay and on maintaining the
status quo. But Cooler Master has asked for all that it
needs: from the district court, it sought a stay of the
injunction against it; and from this court, it sought vaca-
ture of the same. The status quo is no excuse to allow the
injunction to remain in force either. Notably, the majority
does not bless the injunction wholesale—as it stands, the
4 The district court’s earlier dismissal of Asetek’s
infringement claims against Cooler Master would not bar
such a suit, as the post-trial “evidence” that Asetek cites
(e.g., alleged sales to the United States through Cooler
Master websites and alleged partnership with AMD)
involve actions that happened after the court entered
judgment in Asetek’s favor. See J.A. 8266–67, 8478–519
(post-trial “evidence” submitted by Asetek, dated June 29,
2015 and August 6, 2015); see also Aspex Eyewear, Inc. v.
Marchon Eyewear, Inc., 672 F.3d 1335, 1342 (Fed. Cir.
2012) (“[A] party who sues a tortfeasor is ordinarily not
barred by a prior judgment from seeking relief for discrete
tortious action by the same tortfeasor that occurs subse-
quent to the original action.”).
8 ASETEK DANMARK A/S v. CMI USA INC.
injunction is questionable at best. To maintain an injunc-
tion while asking the district court to review it puts the
cart before the horse. The majority’s request for the
district court to act “in as reasonably prompt a fashion as
possible,” Majority Op. at 28, does not fix the problem.
III
For the reasons above, I dissent from the majority’s
decision to remand for further proceedings regarding the
district court’s injunction and to keep the injunction in
force in the meantime. The proper result would be to
vacate the injunction with respect to Cooler Master—
namely, striking Paragraph (3) and the corresponding
language in Paragraphs (4) and (5). There is no need to
remand for further proceedings, as they are neither
necessary nor appropriate.