Epcon Gas Systems, Inc. v. Bauer Compressors, Inc.
Oral Argument — 01/07/2004 · Case 03-1303 · 23:20
0:00
Judge Clevenger
Mr. McGlenn, when you're ready, please proceed.
0:02
I see you'd like to reserve seven minutes for rebuttal.
0:07
Epcon Gas against Bauer Compressors.
0:25
Appellant Attorney
Your Honor, we're here for a second time
0:28
and follow the court's mandate on claim construction
0:30
and the issue of infringement.
0:32
Epcon contends that the district court violated the law,
0:35
the doctor's law of the case,
0:36
and it revised the interpretation of the term substantially below
0:42
as that is used in claim two of the 455 patent
0:44
and improperly granted Bauer's motion
0:46
for summary judgment of non-infringement
0:48
where the federal circuit previously construed this term
0:51
and ruled that there was sufficient evidence
0:53
to justify a trial of this case.
0:55
In fact, following this ruling,
0:57
the court remanded the case for trial.
0:59
We never got there.
1:00
The meaning of the term substantially below
1:02
was resolved by the federal circuit in Epcon 1.
1:05
Judge Clevenger
An increase, decrease, and held constant limitation
1:08
was in essence construed after the remand
1:12
is that correct?
1:14
The term substantially below was not increase, decrease, and held constant.
1:18
Increase, decrease, and held constant.
1:20
That shows up.
1:21
That's an alternative ground for the decision, correct?
1:26
There's a fact finding that that limitation
1:28
is not met by the accused device.
1:32
Appellant Attorney
Yeah.
1:33
Well, that's an argument that was made,
1:35
but I think the evidence on the infringement side.
1:38
Judge Clevenger
Right.
1:38
I mean, it's a clear holding in the district court's opinion
1:40
that the claim requires increase, decrease,
1:44
and held constant, although the claim is or.
1:47
Exactly.
1:48
And everybody agreed that the word or means and.
1:52
Yeah, there's no dispute.
1:53
No dispute about that.
1:54
No dispute.
1:55
And the district court judge said there's no evidence of record
1:58
that that limitation is met by the accused device,
2:02
ergo no infringement.
2:03
Appellant Attorney
I think that what the court found was
2:06
that there's no evidence that the accused device operated
2:10
where the gas pressure in the mold was at all times,
2:14
6,000 to 11,000 PSI below the stored gas pressure.
2:18
Judge Linn
Well, there were two bases for the decision below,
2:24
and one related to the meaning of this substantially below limitation,
2:28
but the other was, as Judge Clevenger pointed out,
2:33
the absence of any evidence to support or to indicate
2:37
that the limitation in claim two of increase, decrease, and hold constant.
2:44
Was met.
2:45
Sure.
2:46
And in that sense, from the opinion below,
2:51
it says that even taking the evidence in the light most favorable to the plaintiffs,
2:57
none of the demonstrations meet all three requirements
3:00
that the pressure must be selectively increased, decreased,
3:04
and held constant to meet the method of claim two.
3:07
And it goes on to say the court specifically asked plaintiffs
3:10
at oral argument to point to a demonstration that had all three,
3:14
and they were unable to do so.
3:17
And here, that same argument is made by the appellee,
3:25
and you contend that, oh, no, no, no, there was plenty of evidence on that.
3:30
And as I read your brief, you allude to, I think, only one thing,
3:39
and that is the declaration of Mr. Loren,
3:44
referring to a...
3:46
To a videotape of some test, of some performance.
3:52
Appellant Attorney
No, Your Honor.
3:53
Actually, the context of the court's question
3:55
had to do with the demonstrations in Chapter 13.
3:58
When we were in the oral argument,
4:00
the question was, which one of these demonstrations
4:02
that were discussed in the epitome of Chapter 13
4:05
that disclosed this?
4:07
And my answer was maybe overly limited to that.
4:11
Judge Linn
But the decision below wasn't limited to the book.
4:15
It was limited to...
4:16
It was limited to just the evidence in general.
4:18
The court says...
4:21
The court specifically asked plaintiffs at oral argument
4:23
to point to a demonstration that had all three,
4:26
and they were unable to do so.
4:27
Appellant Attorney
In the context of the oral argument,
4:29
when that came up, it had to do with the discussion of Chapter 13.
4:32
But I can tell you where the evidence is,
4:34
and we've said it in our briefs.
4:37
Judge Linn
Please, where is the evidence that shows all three?
4:41
Appellant Attorney
At Appendix 285 to 286, we have the testimony of Michael Lynch,
4:47
the page, I believe it's 64...
4:49
That's fine.
4:50
Judge Linn
Wait a second.
4:51
4.
4:52
285.
5:00
285 to 286.
5:04
Appellant Attorney
Where on 285?
5:05
286, page 64, page 10.
5:09
There's a series of...
5:10
Judge Clevenger
You mean 64, that's on 286?
5:13
Yeah, 286, yep.
5:14
Question.
5:15
Appellant Attorney
So I can use a controller, as shown,
5:17
to either inject a pressure in the bone,
5:18
and then from that point, I can increase the pressure
5:21
or decrease the pressure or hold it constant.
5:23
Michael Lynch said yes.
5:25
Judge Linn
Yes.
5:25
But let's just talk about the capabilities of the equipment.
5:28
Appellant Attorney
Then let's go to page...
5:29
Judge Linn
Let's just take this step by step.
5:34
That's not a discussion of an actual demonstration
5:39
or an act of infringement, is it?
5:42
Appellant Attorney
I think that what we're relying on, Your Honor,
5:45
is a series of evidence.
5:47
There is...
5:48
And so we're looking at a testimony of half individuals,
5:51
brochures at Appendix 329...
5:53
Judge Clevenger
Was any of that evidence...
5:55
Did you write it in your blue brief?
5:57
Appellant Attorney
Yes.
5:57
Judge Clevenger
Where, in your blue brief?
5:59
Sure, it's explained in detail...
6:01
I thought I saw it...
6:02
I thought your gray brief was the first time
6:04
you brought forth any evidence here.
6:07
Oh, um...
6:29
I saw it in your gray brief at the end, I believe.
6:34
329, excuse me.
6:36
Appellant Attorney
We reference Appendix page 329.
6:39
That is a...
6:41
It demonstrates...
6:41
Judge Clevenger
What, in your blue brief?
6:43
Appellant Attorney
Yeah.
6:44
Judge Clevenger
What, where?
6:45
Appellant Attorney
A number of things on infringement.
6:53
Judge Linn
329 is an ad.
6:55
That's a brochure.
6:57
Again, advertising the capability,
7:00
but not necessarily evidencing an act of infringement.
7:05
Appellant Attorney
Well, our point is that this is another piece of infringement,
7:10
another piece of evidence that shows that their controller
7:13
performs the method showing increasing and decreasing
7:16
and holding countermeasures.
7:16
Judge Linn
No, it shows that they may perhaps have the capability
7:20
of doing that, but the question before the district court,
7:25
and I think the question before us here is,
7:28
is there any substantial evidence to show that the method
7:32
actually was performed?
7:34
Appellant Attorney
And once again, I guess what I'm trying to do
7:36
is connect the testimony of the individuals,
7:38
their advertising, as well as information that we derive.
7:41
We videotaped the operation of the NCU controlling injection
7:45
of gas.
7:46
We did it in a mold where it was increased, decreased,
7:48
and held substantially constant.
7:50
We presented evidence in the form of not only a videotape,
7:53
but a declaration that described that operation.
7:55
Judge Linn
Who was in the videotape, and I assume that's the videotape
8:00
that you're alluding to that references the appendix
8:06
at page 1279, 1280?
8:12
The videotape, yes.
8:13
1280 is the photograph.
8:15
Right.
8:15
And I assume that's part of that video.
8:18
Right.
8:19
That videotape was done by EPCON, not Bauer, correct?
8:27
Appellant Attorney
It was done in key plastics using a Bauer NCU.
8:32
Judge Linn
And who did the act of molding that was videotaped?
8:39
EPCON.
8:40
EPCON.
8:41
Right.
8:42
Then in what way is that evidence of infringement by Bauer?
8:47
Appellant Attorney
Well, that piece of infringement shows that,
8:50
that is more evidence that the controller actually does perform
8:54
the method.
8:54
You have to realize that in this case...
8:56
Judge Clevenger
There doesn't seem to be any doubt that it could do it.
8:58
I mean, that's the trial judge has said that in effect.
9:02
The problem, the reason why I raised this to take you away
9:05
from the substantial limitation was that the trial judge,
9:09
to me, had made this complete independent ground
9:11
for non-infringement, had written an opinion in which he said,
9:15
there's an abundant amount of evidence in the record
9:18
that shows that the...
9:20
that the accused device could be used to infringe.
9:23
But there's no evidence at all or circumstantial evidence
9:26
of actual infringement.
9:28
So I would have expected the blue brief to come in
9:30
and have a great big section that explains to me,
9:33
chapter and verse, why there is evidence of actual act
9:37
of infringement, not capacity, capability to infringe,
9:40
but an act of infringement.
9:42
And, sir, with all due difference,
9:45
I don't see a single statement in either your blue brief
9:47
or your gray brief that points to an act of infringement.
9:50
I don't see an act of infringement beyond capacity to infringe.
9:53
Appellant Attorney
Right. And I disagree to the extent that I think that if you look
9:57
at all of the evidence and put it together,
10:00
these are all evidence that...
10:02
Judge Clevenger
It's circumstantial evidence of an act of infringement.
10:05
Right.
10:05
Your case hinges on that, doesn't it?
10:08
Yes, it does.
10:09
And do you cite us any case law about how we decide
10:13
when there is sufficient circumstantial evidence
10:17
to decide that there is an actual act of infringement?
10:20
Appellant Attorney
Much of cases, especially involving method cases,
10:24
are all based on evidence, circumstantial evidence.
10:27
Really, this goes on in large plants and there's mowing operations
10:33
and basically what you're saying is we've got to go in
10:36
and disrupt it when we get into plants and...
10:40
Judge Clevenger
The reason why I asked in the beginning whether or not
10:43
this focus on this particular limitation occurred on the remand
10:50
to record was closed after discovery was over
10:52
was I sure had the feeling that you really didn't have
10:56
an opportunity in discovery to go put somebody on the stand
11:02
and say, you know, have you ever run this?
11:05
Well, that's true, too.
11:06
Excuse me?
11:07
We didn't have that opportunity.
11:08
We did not have that opportunity.
11:10
Right. And that may well be one of those...
11:13
I mean, I don't know whether you asked for additional discovery or not,
11:15
but the case had to me the feel of it of all of a sudden
11:18
you've got this particular limitation
11:20
and you're stuck with the record that you'd put in,
11:23
which was basically capacity to infringe,
11:26
but you hadn't had a chance to go out and take somebody in the plant,
11:29
put them on the stand, swear them, and then ask them.
11:32
And that's true.
11:34
Appellant Attorney
And that was also a function of what occurred at the...
11:36
It happens in litigation all the time.
11:39
Yeah, at the market.
11:40
We did not get a chance to do any of that.
11:43
And we also had, well, different issues.
11:46
But I will say that I think that if you look at all the evidence together,
11:50
I don't think there's any doubt that this device,
11:53
and it's admitted as far as I'm concerned,
11:55
when Michael Lynch said it increases, decreases, what's the dispute?
11:58
Judge Clevenger
Shall we save some rebuttal time, Roy?
12:00
Certainly.
12:01
Thank you very much. We'll save your rebuttal time.
12:03
Mr. Arts.
12:07
Appellee Attorney
Thank you, John. May it please the court.
12:13
Despite the fact that there's been no evidence of infringement,
12:17
correct me if I'm wrong, this case has been gone for five years.
12:23
Epcon had over two years of discovery,
12:27
and we've been trying to find the correct evidence that is lacking in this case.
12:31
Either the customers were, they both sell.
12:32
It's a small market. They both sell to the same customers.
12:35
And they really were.
12:36
They had two years to do it, but they never did it.
12:39
And the court, as Dr. Trunchell said,
12:41
the court had two separate reasons why it ruled in Bauer's favor.
12:46
Two separate reasons.
12:47
Judge Clevenger
Well, the increasing, decreasing, and holding gas constant limitation
12:50
didn't really pop up as a key player until the remand, did it?
12:53
Well, it's always been there.
12:54
No, it's always been there.
12:55
It's always been there, Your Honor.
12:56
I know it's always been there, but, I mean, at what stage in the game
12:58
was there the concession that or meant and?
13:02
Was that on the remand?
13:03
Appellee Attorney
Epcon's position earlier in the case was that it was any one of those.
13:06
You could have the alternative of being increase, decrease, or hold a constant.
13:11
It wasn't until they were finally pushed at the very end
13:13
that they finally admitted that or meant and.
13:16
You've taken positions that's always meant and.
13:18
It's a Jackson claim.
13:20
And so everything above improvement, comprise, and transition
13:23
has to be taken as a whole.
13:24
The only thing there which is unique in the Jackson claim
13:28
is the pressure profiling in three steps.
13:31
And if it's only two of those three or one of those three
13:33
under that Brown 3M case decided by this court a few years ago,
13:37
if an alternative is shown prior, it's anticipated.
13:40
It's invalid.
13:41
We had a separate motion on it in validity.
13:43
It's a court-held move and due to the lack of...
13:46
Judge Clevenger
So your point is that from early on, your client was taking the position
13:50
that increasing, decreasing, and holding could mean all three.
13:54
Appellee Attorney
Yes.
13:55
Judge Clevenger
And so if the other side was worried about whether or not there was infringement,
14:00
they better go get some evidence.
14:01
Appellee Attorney
Oh, yes.
14:02
I knew that.
14:02
In fact, the judge in one of the conferences that we had with the court,
14:06
the court said, you're saying this is a capability to him.
14:09
Remember that Judge Tarnow's example he gave, analogy,
14:13
he says, if I have patents on this pen and I write a statement
14:18
about revolutions, cause revolutions, then I infringe?
14:21
He says, just because this pen has the capability of doing that?
14:24
That was his analogy.
14:25
So he looked at this, and their position all along has been
14:28
this product is capable of infringing,
14:30
but they've never proved that it's actually been used in an infringing manner.
14:34
And there are two separate reasons why.
14:36
One is the fact it doesn't meet the three-step pressure profile.
14:41
That is required by this, as they admit, and the file history shows.
14:45
And the court says there's no evidence.
14:47
They admit there's no evidence.
14:48
Well, there is evidence.
14:49
Judge Prost
I mean, doesn't the manual written by Bauer employees
14:52
that's sent to its customers and debaters,
14:54
demonstrated, I mean, it's cited in the briefs at page 410,
14:59
and it shows that it's capable of meeting that limitation,
15:03
increasing, decreasing, and holding constant?
15:05
Appellee Attorney
There's no question that the Bauer product is capable
15:08
of following a three-step pressure profile.
15:10
There's no evidence that's ever been used in that manner at all
15:15
by any customer, either by Bauer in demonstrations.
15:18
And then also when you throw in the substantial equalizer factor
15:21
about the pressure differential, that's never been shown either.
15:24
There's only two prongs as to why there's no infringement here.
15:27
There's been no evidence on either one of those two key factors in that claim, too.
15:33
The substantially below factor is one that I think that they misconstrued it.
15:37
They're bringing up this law on the case issue because they misconstrued
15:40
what the district court and what this court held on the construction of substantially below.
15:46
Substantially below, the court said, means the pressure differential was 6,000 to 11,000 psi.
15:51
That was clear in the first opinion by the district court,
15:54
and then the second time by the district court, he went back and said,
15:57
I'm going to reiterate what I said the first time is that the pressure differential of 6,000 to 11,000
16:02
is what substantially below means, and therefore, since there's no evidence of that,
16:06
matter of fact, the Bauer products cannot even be used in situations where the pressure differential is 6,000 to 11,000.
16:13
They're incapable of operating.
16:15
So really, to answer your question, can the Bauer products really meet the terms of the claim,
16:20
they cannot because they cannot meet this pressure differential of 6,000 to 11,000.
16:24
They're only built to accommodate pressure differentials of, I mean, 5,000 to 6,000 total at a pressure.
16:32
So anything above that would destroy the machine.
16:34
So you can't use it on that basis, and the court didn't use that also as a second ground for saying,
16:39
first, there's no evidence that 6,000 to 11,000 difference has ever been used,
16:43
and secondly, the Bauer products...
16:45
Judge Clevenger
Nobody practices within the scope of the claim.
16:48
Appellee Attorney
No.
16:49
No, in fact...
16:50
Haddon is useless.
16:52
It's one of those things, that's right.
16:53
The way that the claim was generated or issued in the patent office, that's correct.
17:00
Well, under the specification, there was a system shown which met the terms of that claim,
17:06
in which the storage pressure was 12,000, and then they injected it at 6,000, 3,000, 1,000.
17:12
So the system's shown the patent.
17:13
Maybe it was never built, but maybe people are not using it.
17:16
That's correct.
17:17
The patent is a paper patent in that sense.
17:19
And that's also embedded.
17:21
It says if anybody...
17:23
Since nobody uses 6,000 to 11,000, there can't be any infringement.
17:26
Judge Linn
Why should 6,000 to 11,000 be imputed to the claim as a limitation?
17:33
Appellee Attorney
Well, that's what the district court found based on the file history,
17:37
the claim construction, and the people skilled in the art.
17:39
That's John Hutton, the only person skilled in the art to testify.
17:42
And there's an earlier case by this court, the John Hopkins University case versus CellPro,
17:46
in which a similar claim was talked about substantially to three.
17:50
And based on what the district court found,
17:52
the district court said that this court affirmed that the health and fantasy free
17:56
would mean 10% or less based on a table of specifications
18:00
and testimony of persons who are skilled in the art.
18:03
That's exactly what the district court did here.
18:05
Judge Linn
Why isn't that the classic importation of a limitation from the specification into the claim?
18:13
Appellee Attorney
Because it was added to the claim in order to overcome the prior art.
18:17
It was added during prosecution.
18:19
Therefore, they're stuck with it.
18:20
They're limited to it.
18:21
Judge Linn
The $6,000 to $11,000 was added during prosecution?
18:27
Appellee Attorney
No, the limitation substantially below was added during prosecution
18:31
in order to distinguish over prior art, which had some differences.
18:36
Judge Linn
Certainly, but the limitation substantially below in its broadest context
18:43
doesn't come with the $6,000 to $11,000 numerical constraint.
18:49
Appellee Attorney
When you interpret this particular patent,
18:52
that is the only range of pressure differential which can hold this patent valid.
18:58
They have nothing with respect to pressure differentials less than $6,000.
19:02
So therefore, the patent would be invalid if you try to interpret anything less.
19:07
But since it was added during prosecution,
19:09
they have to be limited to something.
19:10
And the only limitation in the specification,
19:14
the only way you can reasonably interpret that,
19:16
is this pressure differential of $6,000 to $11,000.
19:19
The court said, and that's what everyone's relying upon,
19:22
they wouldn't attach specific values to these pressures.
19:25
It wouldn't have to be $12,000 storage pressure and $3,000 injection pressure.
19:31
And that's the language that they're misconstruing.
19:33
They're saying, therefore, the District Court and the Court of Appeals
19:37
didn't find that the $6,000 to $11,000 pressure differential
19:40
was the meaning of substantially below.
19:43
They did.
19:44
The District Court reiterated that.
19:45
If you read the language of both the District Court and this Court in the first appeal,
19:50
that is where the law of the case.
19:52
Substantially below means the pressure differential of $6,000 to $11,000
19:55
based on all the evidence in the testimony, people, skill, and the art
19:58
to interpret that patent.
20:00
So really, they're stuck with that.
20:01
The District Court was stuck with that interpretation, too,
20:06
and reiterated it.
20:07
So in terms of substantially below,
20:09
not only can the power products not be used in that manner,
20:13
but there's no evidence they've ever had been used in that manner.
20:16
There's no evidence strapped with evidence.
20:18
So the Court ruled a grand summary judgment on that basis,
20:21
as well as the fact there's no evidence of infringement
20:24
on the three-step pressure profile as well.
20:27
This case, in all in all, has been going on for almost six years now.
20:31
They've never had any evidence.
20:32
The case has brought us speculation and rumor to begin with.
20:35
We pointed that out in the brief.
20:37
They've never put depositions on any of the customers.
20:40
They've never had declarations or anything.
20:41
When they had two years of discovery to do that,
20:43
they've never proved any infringement whatsoever
20:46
on either three-step or substantially below.
20:50
I mean, it's time to put this case
20:52
to bed and let the parties go on
20:53
and compete in the marketplace with each other.
20:55
Thank you.
20:56
I'll read your argument.
20:58
Judge Clevenger
Three minutes and change.
21:07
Appellant Attorney
Quickly, the brochure, for example, at 329,
21:11
showing the pressure profile is an offer to sell.
21:15
The offer to sell triggers the statute.
21:21
Wait, wait, wait.
21:22
Judge Clevenger
And was that argument made to the District Court?
21:27
Appellant Attorney
The argument that was made was all this is evidence of, yes,
21:30
This is the first time I've heard an offer to sell argument.
21:34
Well, it was made in the context when we define infringement.
21:38
Infringement is defined when someone without authority makes,
21:42
used, offered to sell, sells or reports the thing patented.
21:46
We put in all our evidence.
21:48
And I'm willing to respond to your question about the level of evidence.
21:53
And we're looking at this spectrum of information from testimony to brochures.
21:57
Judge Clevenger
I mean, I didn't see this argument in your brief.
22:00
No one asked me.
22:01
Appellant Attorney
I'm really responding to your question.
22:03
I'm not responding to anything.
22:04
Judge Clevenger
Well, I mean, this is bootstrap.
22:07
This is suspenders at the last minute, right?
22:10
I mean, I've never seen this spin on page A329 before.
22:15
Appellant Attorney
I'm responding to your question.
22:16
Your question was is what was the, you know,
22:19
how is there a question in the context of capable to infringe?
22:23
And what, you know, what is the evidence there?
22:25
And I'm saying that, look, the triggers the statute.
22:28
We've got infringement.
22:29
This is the evidence.
22:29
This is the evidence that we've got.
22:30
I think that we do have evidence of direct infringement.
22:33
I understand that there may be a disagreement.
22:34
That's my position, and I made that comment.
22:37
On the issue about substantially below, I respectfully disagree with my opposing counsel.
22:44
I think it's clear from the record that the district court expressly found that substantially below
22:49
was not quantified in this court and affirmed them.
22:52
As far as pressure differentials being important in the claim,
22:55
for example, the figures clearly show that the pressures in the mold
22:58
are not more than one-half of the stored gas pressure at all times.
23:03
And according to their claim interpretation,
23:07
then the claims would not be described, would not describe any of the drawings
23:12
that we have .
23:14
That's all I have.
23:15
Judge Clevenger
Thank you very much.
23:16
Thanks to both sides for your argument.
23:17
The case is now submitted for decision.