Monday, August 17, 2009

Callaway v. Acushnet

Golf balls were at the center of this case, which went to trial on the issue of invalidity. Infringement was stipulated to, the district court granted summary judgment of no anticipation, and the jury found that all but one of the claims—a dependent claim—were not obvious. The Federal Circuit reversed the district court regarding anticipation and remanded for a new trial on obviousness because the jury’s conclusions were irreconcilably inconsistent (since a dependent claim can’t be obvious if the claim from which it depends is not.)

The Federal Circuit agreed with the district court’s construction of the one claim term at issue on appeal. Notably, it relied in part on extrinsic evidence to support this conclusion in the form of testimony regarding accepted practice in the art. (p. 11 (“Such evidence of accepted practice within the art, when not at variance with the intrinsic evidence, is relevant to the question of how a person of skill in the pertinent field would understand a term.” ) (citing Phillips)).

The district court’s exclusion of evidence of a made-for-trial golf ball that was made by combining prior art elements was not in error. The Federal Circuit agreed that such evidence “ran a substantial risk of leading the jury towards the inappropriate use of hindsight and towards unduly weighting Acushnet’s arguments concerning motivation to combine the prior art.” (p. 18.)
The district court did not abuse its discretion by not allowing evidence of an ongoing inter partes reexamination. The Federal Circuit agreed that “non-final re-examination determinations were of little relevance to the jury’s independent deliberations on the factual issues underlying the question of obviousness” but that the risk of confusion was high. (p. 19.) Although the plaintiff had stated “that multiple patent examiners had reviewed the patents” but did not reveal that the asserted claims stood rejected by other examiners in its opening statement, the defendant failed to object at that time. Countering this statement was not a sufficient reason to allow the inter partes evidence in.

On the issue of inconsistent verdicts, Third Circuit law was applied. Because “a reading of the verdicts that would solve the apparent inconsistency proves impossible and the evidence might support either of the two inconsistent verdicts,” a new trial was necessary. (p. 23.)

The anticipation issue hinged on whether material was incorporated by reference into a prior art reference. On this issue of law, the Federal Circuit disagreed with the district court’s conclusion because the reference “identifies with specificity both what material is being incorporated by reference … and where it may be found.” (p. 27.)

Finally, although model golf balls designed to demonstrate obviousness were properly excluded, the Federal Circuit stated that a model golf ball for demonstrating the teachings of a prior art reference for the purposes of anticipation could be admissible if properly authenticated.