IP Law Daily, PATENT—E.D. Mich.: Federal-Mogul suppliers may have infringed patent for illuminated cup-holder assembly, (Nov 4, 2014)

By Mark Engstrom, J.D.

Federal-Mogul World Wide could pursue patent infringement claims against two suppliers that allegedly infringed a Federal-Mogul patent for an “Illuminated Cup Holder Assembly,” the federal district court in Detroit has ruled (Federal-Mogul World Wide, Inc. v. NJT Enterprises, November 3, 2014, Battani, M.). Federal-Mogul could also pursue a trade secrets claim for the suppliers’ alleged misappropriation of the company’s modeling data for the cup-holder assembly.

The court denied the suppliers’ motions for summary judgment on the patent and trade secrets claims. It also denied summary judgment to Federal-Mogul on its allegation that the contested language of the asserted patent claim was satisfied.

Background

Federal-Mogul owned U.S. Patent No. 6,234,439, which described an “Illuminated Cup Holder Assembly.” In 2009, Chrysler chose Federal-Mogul to supply cup-holder assemblies for the automaker’s Jeep Grand Cherokee and Dodge Durango. The same year, Federal-Mogul and JTN (d/b/a “Mayco”) signed a Mutual Confidentiality Agreement (MCA) that governed the parties’ relationship while the cup-holder assembly was being developed.

Under the MCA, Mayco provided the base geometry for the assembly’s styling and attachment points and Federal-Mogul performed the CAD (computer-assisted design) modeling. In addition, Federal-Mogul retained ownership of any confidential information that was shared with Mayco and Mayco was prohibited from using or exploiting that information for any purpose other than the design and engineering of the cup holder.

In 2011, Mayco terminated its relationship with Federal-Mogul and announced that JVIS would become the new supplier of the illuminated cup-holder assembly. Thereafter, Mayco purchased the accused product from a Korean supplier, incorporated it into a larger assembly, and sold the larger assembly to Chrysler.

Federal-Mogul sued Mayco and JVIS-USA for patent infringement, misappropriation of trade secrets, and breach of contract. With respect to its patent infringement claims, Federal-Mogul alleged that the accused product was “virtually identical” to the illuminated cup-holder assembly that Federal-Mogul had manufactured for the defendants before their relationship had ended. The parties brought cross-motions for summary judgment.

Infringement

The defendants argued that the accused cup holder did not infringe the asserted patent claim because the accused product had no “cup holder top portion” and no “shield” that extended over the waveguide. Federal-Mogul argued that the “diffuser” was both the “shield” and the “cup holder top portion.”

Diffuser. The court noted that, in the illuminated cup holder assembly, the “waveguide” was hidden by a “glowing blue ring” of plastic—the “diffuser”—that ran along the perimeter of the cup holder. According to Federal-Mogul, the diffuser was the shield because the diffuser extended over the waveguide and was located between the waveguide and the “chrome piece.”

The documents of record did not support that argument. In its preliminary infringement contentions, for example, Federal-Mogul had asserted that: (1) “[t]he chrome piece is a shield that extends over the waveguide that directs light at the cup-receiving space as required in the … patent” and (2) “a diffuser … extends over the waveguide and is located between the waveguide and the chrome piece.”

Federal-Mogul tried to recast that language as an indication that the chrome piece and the diffuser were both shields. The court, however, was unpersuaded. The mere mention of the diffuser and its location did not establish that the diffuser was the shield, the court explained. Moreover, Federal-Mogul had admitted that a part with a diffuser—but not a chrome piece—did not infringe the asserted patent. That admission amounted to a concession that the diffuser was not the “cup holder top portion,” according to the court.

The court ruled that Federal-Mogul was not entitled to summary judgment on its assertion that the diffuser satisfied the contested language of the relevant claim because the diffuser was both the shield and the cup holder top potion.

Chrome piece. The parties agreed that the “cup holder top portion” was a portion of the cup holder assembly that was separate from the bottom portion and was “disposed over the bottom portion and the waveguide.” Federal-Mogul identified the “chrome piece” as part of the cup holder because the chrome piece was the upper-most portion of the cup-receiving space. The defendants asserted several grounds for rejecting the chrome piece as the “cup holder top potion.”

First, the defendants argued that the chrome piece could not be the top piece because it was physically attached to the shifting console. The court disagreed. In the court’s view, the chrome piece was separate from the bottom portion and was “disposed over the bottom portion and the waveguide.”

The court also rejected the defendants’ second assertion: that the placement of the diffuser between the chrome piece and the waveguide meant that the diffuser was not “disposed over the bottom portion and the waveguide.” According to the court, the language of the relevant claim did not require that the top portion be disposed directly over the waveguide with nothing in between.

Finally, the court was not persuaded by the defendants’ argument that, as a matter of law, the chrome part could not be the cup holder top portion and the shield because the shield had to be separate from, and in addition to, the top portion; otherwise, the shield limitation would be superfluous.

The language of the asserted claim did not require that the shield extend immediately over the waveguide, the court explained; it merely required that the shield extend over the waveguide “whereby the waveguide distributes the light at the cup holder.” Nor did the claim require that the shield reach over the entire waveguide to act as a protective structure.

In light of those facts and findings, the court decided that the defendants were not entitled to summary judgment of non-infringement.

Validity, Enforceability

The defendants argued that the cup-holder patent was invalid as anticipated because the claimed subject matter was “in public use” or “on sale” in the U.S. more than one year before the filing date of the patent. In the alternative, the defendants argued that the patent was unenforceable due to inequitable conduct by Federal-Mogul.

On-sale bar. The court acknowledged that some evidence suggested that the on-sale bar might be applicable in this case. Nevertheless, the record did not support the conclusion that a genuine dispute of material fact did not exist.

The defendants relied on the testimony of a joint inventor of the cup-holder patent. The inventor testified that Federal-Mogul had presented “waveguide-illuminated cup holders” to potential customers in the “mid-1990s,” before the critical date for §102 prior art (December 8, 1998). More specifically, the inventor testified that Federal-Mogul’s “DLS Cup Holder” was shown to the “Big Three” automakers in 1996 or 1997.

The defendants further argued that the inventor had conceded that the asserted patent claim covered the DLS Cup Holder, which practiced every limitation of that claim. The inventor’s testimony could not, however, be characterized as “clear and convincing.” According to the court, his testimony was “vague as to exactly when and to whom” the inventor had made presentations. Moreover, the general rule in patent cases required the corroboration of any oral testimony that asserted the invalidity of a patent. The defendants, however, did not provide any corroborating evidence.

For those reasons, the court denied the defendants’ motion for summary judgment based on the on-sale bar.

Inequitable conduct. To prevail on a claim of inequitable conduct, a defendant had to show, by clear and convincing evidence, that the patentee had acted with a specific intent to deceive the U.S. Patent and Trademark Office (PTO). Consequently, the defendant had to show that the applicant knew of the prior reference, knew it was material, and made a deliberate decision to withhold it.

In this case, the defendants argued that: (1) the inventors knew that the DLS cup holder was material to the patentability of the asserted and (2) had that fact been disclosed to the patent examiner, the illuminating cup-holder patent would not have been issued.

Both of the inventors of the cup-holder patent had signed a declaration that acknowledged their review of the application’s contents, including the underlying claims, and their duty to disclose information that was material to the examination of their application, the court observed. However, neither inventor disclosed the DLS cup holder to the PTO.

For that reason, the court concluded that “inferences favorable to Defendants” could arise from that record evidence. Nevertheless, the court could not characterize the record evidence as “clear and convincing” as a matter of law. Summary judgment was therefore denied with respect to the defendants’ assertions of inequitable conduct.

Trade Secrets Claim

Because genuine disputes of material fact remained with respect to Federal-Mogul’s claim for trade secrets misappropriation, summary judgment was denied on that claim.

The case is No. 11-15480.

Attorneys: Charles W. Duncan (Honigman, Miller, Schwartz and Cohn, LLP) for Federal-Mogul Corp. and Federal-Mogul World Wide, Inc. Christopher C. Smith (Brooks Kushman, PC) for NJT Enterprises and JVIS-USA, LLC.

Companies: Federal-Mogul World Wide, Inc.; Federal-Mogul Corp.; NJT Enterprises; JVIS-USA LLC

Cases: Patent TradeSecrets MichiganNews