Malico, Inc v. Lsi Logic Corporation , 594 F. App'x 621 ( 2014 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
MALICO, INC.,
Plaintiff-Appellant,
v.
COOLER MASTER USA INC., AND
LSI LOGIC CORPORATION,
Defendants-Appellees.
______________________
2013-1680
______________________
Appeal from the United States District Court for the
Northern District of California in No. 3:11-cv-04537-RS,
Magistrate Judge Richard Seeborg.
______________________
Decided: November 17, 2014
______________________
JOHN WHITAKER, Whitaker Law Group, of Seattle,
Washington, argued for plaintiff-appellant. With him on
the brief was PHILIP P. MANN, Mann Law Group, of Seat-
tle, Washington.
KAREN I. BOYD, Turner Boyd LLP, of Redwood City,
California, argued for defendants-appellees. Of counsel
was HEATHER LYNN-THOMPSON POTTS.
______________________
2 MALICO, INC v. COOLER MASTER USA INC.
Before MOORE, REYNA, and CHEN, Circuit Judges.
CHEN, Circuit Judge.
Malico, Inc. (Malico) appeals from the United States
District Court for the Northern District of California’s
grant of summary judgment of obviousness as to claims 1
and 2 of its patent, U.S. Patent No. 6,476,484 (’484 pa-
tent). See Malico, Inc. v. Cooler Master USA, Inc., No.
C11-4537 RS, 2013 WL 4482503 (N.D. Cal. Aug. 20,
2013). Malico also appeals the district court’s grant of
summary judgment limiting the time period for which
Malico may recover damages. Although we agree with the
district court’s damages decision, the district court failed
to make adequate findings to support its obviousness
determination. Thus, for the reasons set forth below, we
affirm the district court’s judgment limiting damages and
vacate the judgment of invalidity.
BACKGROUND
I
Malico owns the ’484 patent, entitled “Heat Sink Dis-
sipat[e]r for Adapting to Thickness Change of a Combina-
tion of a CPU and a CPU Carrier.” Heat sink dissipaters
are used to cool electronic components by dissipating heat
generated by the component into the surrounding air.
The heat sink dissipater recited in the claims of the ’484
patent includes a heat dissipater and a retaining device
for securing the heat dissipater to an electronic compo-
nent, for example a CPU assembly.
According to the patent, prior art heat dissipaters
were built to accommodate a CPU assembly with a specif-
ic thickness. If a user later wished to incorporate a CPU
assembly having a different thickness, the user would
need to create or purchase a different retaining device to
accommodate this change in thickness. To avoid this cost,
the invention of the ’484 patent accommodates CPU
MALICO, INC v. COOLER MASTER USA INC. 3
assemblies having different thicknesses by placing pads
at particular positions on the top surface of the heat
dissipater. For one size of CPU assembly, the retaining
device directly contacts the heat dissipater’s top surface.
But for the retaining device to still engage the dissipater’s
top surface when a thinner CPU assembly is used, the
retaining device is rotated 90° to allow the device to
directly contact the pads that are positioned on the dissi-
pater’s top surface. For example, claim 1 recites:
1. A heat sink dissipater, comprising:
a retaining device having a pair of posi-
tioning columns formed on first two oppo-
site sides, a pair of retaining edges formed
on second two opposite sides, and a plural-
ity of resilient legs extending inwards
from said first or second two opposite
sides, said retaining edges each being
formed with a barb and said resilient legs
each having a bent;
a heat dissipater having a plurality of fins
formed on a top surface and a plurality of
a [sic] gaps between said fins, said resili-
ent legs failing into said gaps when said
retaining device is positioned on said heat
dissipater in a first orientation or a second
orientation orthogonal to said first orien-
tation; and
plurality of pads formed between fins on
said top surface of said heat dissipater;
wherein the bent of each resilient leg is
placed on a pad when said retaining de-
vice is positioned on said heat dissipater in
said first orientation, and each resilient leg
is placed directly on said top surface when
4 MALICO, INC v. COOLER MASTER USA INC.
said retaining device is positioned on said
heat dissipater in said second orientation.
’484 patent, 3:19–4:8 (claim 1) (emphases added).
As shown in Figure 1, the retaining device can be ori-
ented such that the “resilient legs [22] having a bent
[221]” engage the base of the heat dissipater 30, to secure
the heat dissipater to the CPU assembly 10.
Claim 1 further recites that the same retaining device
can be rotated 90°, as shown in Figure 2, such that the
legs 221 now engage the “pads” 32 located between the
fins 31 of the heat dissipater 30.
MALICO, INC v. COOLER MASTER USA INC. 5
Claim 2 differs from claim 1 solely by omitting the use
of “pads” and, instead, using “recesses” in the top surface
of the heat dissipater. See ’484 patent, 4:9–31 (claim 2)
(substituting “plurality of recesses” for “plurality of
pads”). To accommodate a thicker CPU assembly, the
retaining device is oriented such that the legs rest in the
recesses. Alternatively, to accommodate a thinner CPU
assembly, the retaining device is oriented in a manner
that allows the legs to rest on the top surface of the heat
dissipater, rather than in the recesses.
II
Malico makes and distributes heat sink dissipater
products embodying the claims of its ’484 patent. Rather
than mark these products with the ’484 patent number,
Malico marked its products with “Int. Pat. XXXX.” J.A.
1068.
6 MALICO, INC v. COOLER MASTER USA INC.
Cooler Master USA Inc. (Cooler Master) imported al-
legedly infringing heat sink dissipaters and sold them to
LSI Logic Corporation (LSI). LSI then incorporated the
heat sink dissipaters into the larger computer components
that LSI assembles and sells.
Malico first claimed infringement of the ’484 patent in
a letter to LSI on or before March 17, 2008. Malico later
filed an action claiming infringement of the ’484 patent
against Cooler Master on May 26, 2009, in the Western
District of Washington, which was ultimately dismissed
for lack of personal jurisdiction. In response, Malico
initiated the underlying action against Cooler Master and
LSI (collectively, Appellees), again asserting infringement
of the ’484 patent.
In the underlying action, Appellees filed a motion for
summary judgment limiting damages and a motion for
summary judgment of invalidity. 1 On damages, the
district court concluded that Malico could not recover any
damages from Cooler Master because Cooler Master
received actual notice of infringement of the ’484 patent
after the date of Cooler Master’s last sale of the accused
device. Similarly, the district court concluded that Malico
could recover damages from LSI only for the period be-
tween giving LSI actual notice on March 17, 2008, and the
date of the last allegedly infringing activity. Finally, the
district court granted Appellees’ motion for summary
judgment of invalidity, finding the two claims of the ’484
patent obvious. Malico filed a timely notice of appeal
from the district court’s summary judgment on damages
and invalidity. We have jurisdiction under 28 U.S.C.
§ 1295(a)(1).
1 Malico also filed a motion for summary judgment
of infringement, but the district court denied that motion
because Malico provided insufficient evidence to establish
infringement. Malico does not appeal that decision.
MALICO, INC v. COOLER MASTER USA INC. 7
DISCUSSION
We review the grant of summary judgment under the
law of the regional circuit. Charles Mach. Works, Inc. v.
Vermeer Mfg. Co., 723 F.3d 1376, 1378 (Fed. Cir. 2013).
The Ninth Circuit reviews the grant or denial of summary
judgment de novo. Van Asdale v. Int’l Games Tech., 577
F.3d 989, 994 (9th Cir. 2009). Summary judgment is
appropriate when “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). “When the party
moving for summary judgment would bear the burden of
proof at trial, . . . [it] has the initial burden of establishing
the absence of a genuine issue of fact on each issue mate-
rial to its case.” C.A.R. Transp. Brokerage Co. v. Darden
Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citation
omitted). If the moving party fails to meet its initial
burden, summary judgment must be denied and the court
need not consider the nonmoving party’s evidence. Ce-
lotex Corp. v. Catrett, 477 U.S. 317, 332 (1986).
I. Damages
The amount of damages that a patentee may recover
is limited to those acts of infringement that occurred after
the patentee gave the alleged infringer “notice of in-
fringement.” 35 U.S.C. § 287(a). A patentee may use
constructive notice by marking its patented article with
the patent number. Id. Where a patentee fails to mark
its patented product, however, § 287(a) requires actual
notice: “no damages shall be recovered by the patentee in
any action for infringement, except on proof that the
infringer was notified of the infringement and continued
to infringe thereafter, in which event damages may be
recovered only for infringement occurring after such
notice.” Id. (emphasis added).
Appellees moved for summary judgment limiting the
damages that Malico may recover for infringement that
occurred between the dates on which Cooler Master and
8 MALICO, INC v. COOLER MASTER USA INC.
LSI, respectively, received actual notice and when the
allegedly infringing activity ceased. 2 No party disputes
the date on which Cooler Master and LSI, respectively,
received notice of Malico’s infringement claims. LSI
received actual notice by March 17, 2008, through the
letter from Malico. Cooler Master, on the other hand, was
unaware of Malico’s infringement claims until May 26,
2009, when Malico filed its infringement lawsuit against
Cooler Master in the Western District of Washington.
Appellees produced evidence that their infringing activity
ceased in March 2009—one year after LSI received notice
and two months before Cooler Master received notice of
Malico’s infringement beliefs. Thus, the district court
concluded that Malico could not recover damages from
Cooler Master whatsoever and that Malico could recover
damages from LSI, but only for acts of infringement that
occurred between March 17, 2008, and March 2009.
On appeal, Malico disputes the district court’s deter-
mination that Appellees’ infringement ceased in March
2009. Specifically, Malico contends that the district court
failed to consider Malico’s evidence that Appellees contin-
ued infringing beyond 2009, and, as a result, erroneously
characterized Appellees’ evidence as undisputed. Malico
also argues that even though its motion to compel was
denied as untimely, the district court should have never-
theless considered the documentary evidence that Malico
attached to that motion. However, Malico fails to recog-
nize that the district court declined to consider this “evi-
dence” only after determining that the evidence attached
to Malico’s opposition to Appellees’ motion for summary
judgment limiting damages was inadmissible and that the
motion to compel was untimely.
2 No party disputes that Malico’s products were not
marked with the ’484 patent and constructive notice of
infringement therefore is not at issue.
MALICO, INC v. COOLER MASTER USA INC. 9
Malico first asserts that the evidence attached to its
opposition of Appellees’ motion demonstrated that Appel-
lees continued to sell the accused products beyond March
2009. Contrary to Malico’s assertions, the district court
did not “ignore” this evidence. Instead, the district court
excluded that evidence because Malico failed to produce
these documents during discovery. See Fed. R. Civ. P.
37(c)(1) (“If a party fails to provide information . . . as
required by Rule 26(a) or (e), the party is not allowed to
use that information or witness to supply evidence on a
motion, at a hearing, or at a trial.”).
Malico also contends that the evidence attached to its
motion to compel also showed Appellees’ continuing
infringing activity and that the district court erroneously
disregarded this evidence when ruling on Appellees’
motion for summary judgment. Malico’s motion to compel
was filed months after the close of discovery and was
denied as untimely. Moreover, if Malico intended for the
district court to consider that evidence in connection with
Malico’s opposition to Appellees’ motion for summary
judgment, it should have attached that evidence to the
opposition. Because Malico did not do so, the district
court did not abuse its discretion when it declined to
consider that evidence.
Malico has not sought review of these evidentiary rul-
ings. Consequently, there is no admissible evidence on
the record that controverts the district court’s finding that
the last infringing sales took place in March 2009. No
genuine issues of material fact remain and, thus, the
district court correctly granted Appellees’ motion for
summary judgment limiting damages.
II. Invalidity
Section 103 forbids issuance of a patent when “the dif-
ferences between the subject matter sought to be patented
and the prior art are such that the subject matter as a
whole would have been obvious at the time the invention
10 MALICO, INC v. COOLER MASTER USA INC.
was made to a person having ordinary skill in the art.” 35
U.S.C. § 103(a). Because issued patents enjoy a presump-
tion of validity, a party moving for summary judgment of
invalidity must “submit such clear and convincing evi-
dence of facts underlying invalidity that no reasonable
jury could find otherwise.” TriMed, Inc. v. Stryker Corp.,
608 F.3d 1333, 1340 (Fed. Cir. 2010) (internal quotation
marks omitted).
Obviousness is a question of law based on underlying
factual findings. Honeywell Int’l, Inc. v. United States,
609 F.3d 1292, 1297 (Fed. Cir. 2010). Any obviousness
determination requires an assessment of (1) the “level of
ordinary skill in the pertinent art,” (2) the “scope and
content of the prior art,” (3) the “differences between the
prior art and the claims at issue,” and (4) “secondary
considerations” of non-obviousness such as “commercial
success, long-felt but unsolved needs, failure of others,
etc.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406
(2007) (quoting Graham v. John Deere Co., 383 U.S. 1,
17–18 (1966)). A claimed invention may be obvious even
when the prior art does not teach each claim limitation, so
long as the record contains some reason that would cause
one of skill in the art to modify the prior art to obtain the
claimed invention. Beckson Marine, Inc. v. NFM, Inc.,
292 F.3d 718, 728 (Fed. Cir. 2002). However, although an
analysis of the teaching, suggestion, or motivation to
combine elements from different prior art references is
helpful, we must always be mindful that the obviousness
inquiry requires an “expansive and flexible approach.”
Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d
1342, 1360 (Fed. Cir. 2012) (citing KSR, 550 U.S. at 415,
419). Importantly, this Court has repeatedly explained
that district courts must consider all of the Graham
factors prior to reaching a conclusion that a patent is
invalid as obvious. See, e.g., id.MALICO, INC v. COOLER MASTER USA INC. 11
The district court found both claims of the ’484 patent
obvious in light of U.S. Patent No. 5,276,585 (Smithers).
Smithers generally relates to an “assembly of electronic
components” capable of “removeably [sic] securing heat
sinks in thermal communication with electronic device
packages without using tools, adhesives, loose parts or the
like.” Smithers, 1:5–9.
As shown in Figure 1, Smithers teaches a unitary mount-
ing clip 30 that secures the heat sink 10 to an electronic
device package 20. The clip secures the assembly by the
pocket 35 fitting around the corners of the device package
22 and the transverse bars 33 and 34 fitting in the chan-
nels 14 formed by the pins 12 of the heat sink 10.
In its opinion, the district court relied on the report of
Appellees’ expert, Dr. Carman, and concluded that Smith-
ers disclosed every limitation in claims 1 and 2, except the
“pads” and “recesses.” The district court determined that
12 MALICO, INC v. COOLER MASTER USA INC.
the uses of pads and recesses were either well-known
techniques or were disclosed in other prior art references
and the ’484 patent was merely an obvious improvement
over the prior art. After noting that Malico failed to
provide any technical evidence, the district court ruled
that Appellees had met their high burden to overcome the
presumption of validity and granted their motion for
summary judgment.
On appeal, Malico argues that the district court erred
by failing to perform any meaningful comparison of the
Smithers reference to the claims of the ’484 patent.
Malico also asserts that the district court erred by finding
the ’484 patent invalid without discussing any rationale
for why one of skill in the art would have made the modi-
fications to Smithers that are present in the claims of the
’484 patent. Finally, Malico contends that the district
court should have considered Malico’s evidence of second-
ary considerations.
In response, Appellees argue that the district court
correctly found that Smithers discloses each of the limita-
tions in the claims of the ’484 patent except for pads.
Notably, Appellees’ brief does not cite to the district
court’s opinion for this assertion. That is because the
district court did not make any such findings. Instead, to
support these arguments, Appellees solely cite Dr. Car-
man’s report. Throughout their argument, Appellees fail
to appreciate that the district court did not perform the
required analysis for establishing obviousness. See Plant-
ronics, Inc. v. Aliph, Inc., 724 F.3d 1343, 1354 (Fed. Cir.
2013) (“Where, as here, the necessary reasoning is absent,
we cannot simply assume that an ordinary artisan would
be awakened to modify prior art . . . .” (internal quotation
marks omitted)). The district court failed to explain how
Smithers either discloses or could be modified in an
obvious manner to meet three limitations recited in the
claims of the ’484 patent: (1) the “rotation” limitation;
(2) the “resilient legs each having a bent” limitation; and
MALICO, INC v. COOLER MASTER USA INC. 13
(3) the “pair of positioning columns” and “pair of retaining
edges” limitations. Accordingly, we vacate and remand
for the district court to make the required findings.
A. “Rotation”
Both claims of the ’484 patent recite a retaining de-
vice that can rotate such that in a first orientation the
device accommodates a CPU assembly of a certain thick-
ness and, after rotation to a second orientation, the re-
taining device accommodates a CPU assembly of a
different thickness while still engaging the dissipater’s
top surface.
Although the district court’s opinion is silent on the
subject of this “rotation” limitation, Dr. Carman opined
that “[i]n my opinion, while Smithers does not expressly
refer to a second orientation, my interpretation of the
figures, the symmetry of the structure and the location of
channel 13 in the description is that in a second orienta-
tion, the resilient legs 33 would fall into the gaps between
fins that Smithers calls channel 13.” J.A. 561. But the
district court itself made no findings comparing the
possible rotational capabilities of Smithers to the rotation
requirement recited in the claims of the ’484 patent. In
addition, even to the extent that the Smithers retaining
device is physically capable of being rotated in a way
similar to the device claimed in the ’484 patent, neither
Dr. Carman nor the district court provided any basis for
why one of skill in the art would rotate the Smithers
retaining device in this manner. For example, nothing in
Dr. Carman’s report or in the district court’s opinion
suggests that such devices had been rotated in the past to
enhance the usability of the retaining device. Even under
a flexible and expansive approach to the obviousness
inquiry, the raw ability to perform the rotation action
without any reason to do so does not establish obvious-
ness. See KSR, 550 U.S. at 418 (explaining that, although
courts need not “seek out precise teachings” on each claim
14 MALICO, INC v. COOLER MASTER USA INC.
limitation, courts must still “determine whether there
was an apparent reason to combine the known elements
in the fashion claimed by the patent at issue”). On re-
mand, the district court must make such findings and
determine whether the prior art discloses or suggests this
rotation limitation.
B. “Resilient legs each having a bent”
The claims of the ’484 patent also recite “a plurality of
resilient legs extending inwards from said first or second
two opposite sides . . . and said resilient legs each having
a bent.” ’484 patent, 3:23–26. The parties stipulated to
the district court that the “bent” in the resilient leg should
be construed as “material that extends from the resilient
leg in a generally different direction.” J.A. 172.
Similar to the “rotation” limitation, the district court’s
order did not expressly find or explain why the claimed
“resilient legs . . . having a bent” are present in Smithers.
Dr. Carman stated that Smithers discloses “a plurality of
resilient legs (33 and 34) extending inward from the side”
and that these “resilient legs are curved thus defining a
bent leg and also has a bent at the intersection of resilient
legs 33/34 with edge 32.” J.A. 561. Although the district
court never expressly incorporated Dr. Carman’s opinions
as its own, even if it had, Dr. Carman’s opinions are
inconsistent with the stipulated construction of the term
“bent.” Namely, Dr. Carman’s report does not explain
how the curved beams of Smithers teach resilient legs
with a bent (“material that extends from the resilient leg
in a generally different direction”), where that bent is then
either placed on “pads,” in “recesses,” or directly on the
top surface of the heat dissipater, as claimed in the ’484
patent. Instead, Dr. Carman merely assumes that “the
curved beam is equivalent to [a] resilient leg with [a]
bent.” J.A. 606. The record lacks any analysis or findings
as to why the claimed resilient legs, each having a bent,
would have been an obvious modification over the curved
MALICO, INC v. COOLER MASTER USA INC. 15
beams in Smithers. On remand, the district court must
engage in such an analysis and articulate its reasoning
with sufficient clarity to enable our review.
C. “Pair of positioning columns” and “pair of retaining
edges”
Claims 1 and 2 recite that the retaining device has “a
pair of positioning columns formed on first two opposite
sides [and] a pair of retaining edges formed on second two
opposite sides.” ’484 patent, 3:20–22. The district court
construed “positioning columns” as “material that aligns
the retaining device and the heat dissipater, preventing
movement.” J.A. 181:15–17. Neither party requested a
construction of “retaining edges.”
As with the two limitations discussed above, the dis-
trict court’s opinion was also silent on whether Smithers
disclosed the “pair of positioning columns” and the “pair of
retaining edges” recited in the claims of the ’484 patent.
Dr. Carman, on the other hand, opined that Smithers
“has a pair of positioning columns 38 formed on a first two
opposite sides and a pair of retaining edges 36/37 formed
on second two opposite sides.” J.A. 561. Even if the
district court had adopted this opinion as its own, neither
Dr. Carman nor the district court provides any discussion
as to how the four positioning columns 38 shown in the
Smithers reference disclose the same “pair of positioning
columns formed on first two opposite sides” recited in the
claims of the ’484 patent. ’484 patent, 3:20–21 (claim 1),
4:10–11 (claim 2). Similarly, neither the district court nor
Dr. Carman explained why the eight flanges 36/37 (two on
each corner of the retaining device) could disclose the
same “pair of retaining edges formed on second two oppo-
site sides” recited in the claims of the ’484 patent. Id. at
3:21–22 (claim 1), 4:11–12 (claim 2). For these reasons,
and for reasons similar to the two limitations discussed
previously, the district court must examine the disclo-
sures of the ’484 patent, the teachings of Smithers and
16 MALICO, INC v. COOLER MASTER USA INC.
any other prior art references, and provide actual findings
comparing the prior art to the claims of the ’484 patent.
D. Secondary Considerations
Malico also argues that the district court erred in fail-
ing to consider Malico’s evidence of secondary considera-
tions of nonobviousness. True enough, evidence of
secondary considerations of nonobviousness must always,
when present, be considered in the obviousness analysis.
See In re Cyclobenzaprine, 676 F.3d 1063, 1075–76 (Fed.
Cir. 2012). However, in this case, the district court first
found that the evidence on which Malico relies was inad-
missible under Rule 37(c) of the Federal Rules of Civil
Procedure. Malico is not appealing this evidentiary
ruling. Consequently, Malico presented no admissible
evidence of secondary considerations. We see no error in
the district court’s consideration of secondary considera-
tions of nonobviousness.
CONCLUSION
For the foregoing reasons, we affirm the district
court’s judgment on damages and vacate the district
court’s judgment of invalidity. This case is remanded for
further proceedings consistent with this opinion.
AFFIRMED-IN PART, VACATED-IN-PART, AND
REMANDED
COSTS
Costs to Appellant.