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Briggs & Stratton Opening Brief Case: 16-2197 Document: 15 Page: 1 Filed: 09/08/2016 No. 2016-2197 ________________________________________________________ United States Court of Appeals for the Federal Circuit ________________________________________________________ EXMARK MANUFACTURING COMPANY, INC., Plaintiff-Appellee, v. BRIGGS & STRATTON POWER PRODUCTS GROUP, LLC, Defendant-Appellant. ________________________________________________________ Appeal from the United States District Court for the District of Nebraska, No. 8:10-cv-00187-JFB-TDT, Chief Judge Joseph F. Bataillon ________________________________________________________ OPENING BRIEF OF DEFENDANT-APPELLANT BRIGGS & STRATTON POWER PRODUCTS GROUP, LLC ________________________________________________________ Matthew M. Wolf Lead Counsel Marc A. Cohn ARNOLD &PORTER LLP 601 Massachusetts Ave., NW Washington, DC 20001 Telephone: (202) 942-5000 Facsimile: (202) 942-5999 September 8, 2016 Counsel for Defendant-Appellant Briggs & Stratton Power Products Group, LLC DM_US:23362604_1 Case: 16-2197 Document: 15 Page: 2 Filed: 09/08/2016 UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT EXMARK MANUFACTURING CO. v. BRIGGS & STRATTON No. 2016-2197 CERTIFICATE OF INTEREST Counsel for Defendant-Appellant Briggs & Stratton Power Products Group, LLC certifies the following: 1. The full name of every party or amicus represented by me is: Briggs & Stratton Power Products Group, LLC 2. The name of the real party in interest (if the party named in the caption is not the real party in interest) represented by me is: N/A 3. All parent corporations and any publicly held companies that own 10 percent or more of the stock of the party or amicus curiae represented by me are: Briggs & Stratton Power Products Group, LLC is a wholly-owned subsidiary of Briggs & Stratton Corporation. As of February 29, 2016, The Vanguard Group owned 10.27% of Briggs & Stratton Corporation, and as of December 31, 2015, BlackRock, Inc. owned 11.0% of Briggs & Stratton Corporation. 4. The names of all law firms and the partners or associates that appeared for the party or amicus now represented by me in the trial court or agency or are expected to appear in this court and who have not or will not enter an appearance in this court are: Amy L. DeWitt John P. Passarelli William Z. Louden Meghan M. Blinn ARNOLD &PORTER LLP KUTAK ROCK LLP 601 Massachusetts Ave., NW 1650 Farnam Street Washington, DC 20001 Omaha, NE 68102 DATED: September 8, 2016 /s/ Matthew M. Wolf Matthew M. Wolf Case: 16-2197 Document: 15 Page: 3 Filed: 09/08/2016 TABLE OF CONTENTS Page PRELIMINARY STATEMENT........................................................................................ 1 STATEMENT OF RELATED CASES ............................................................................ 3 JURISDICTIONAL STATEMENT .................................................................................. 4 STATEMENT OF THE ISSUES....................................................................................... 5 STATEMENT OF THE CASE .......................................................................................... 6 A. Exmark’s Efforts To Obtain And Enforce The ‘863 Patent..................9 1. Exmark’s Lawn Mower Business...............................................9 2. The ‘863 Patent .........................................................................10 a. The Grandparent ‘575 Application.................................10 b. The Parent ‘825 Application...........................................11 c. The ‘863 Patent...............................................................12 3. Exmark Sues Scag.....................................................................13 4. The First ‘863 Patent Reexamination .......................................16 5. Exmark Sits On Its Rights.........................................................17 B. Briggs’ Lawn Mowers With Independent Suspension .......................17 C. This Litigation Before The Stay..........................................................18 1. Briggs’ Redesign.......................................................................18 2. The District Court’s Broad Claim Construction.......................20 3. Schiller’s Ex Parte Reexamination...........................................20 D. Briggs’ Ex Parte Reexamination.........................................................21 1. Briggs’ Invalidity Arguments ...................................................21 - i - Case: 16-2197 Document: 15 Page: 4 Filed: 09/08/2016 2. The PTO’s Multiple Rejections Of Claim 1 .............................25 3. The PTAB’s Reversal Based On A Narrow Claim Construction..............................................................................27 E. This Litigation After The Stay ............................................................28 1. Summary Judgment Rulings.....................................................28 a. No Obviousness Or Anticipation....................................28 b. No Indefiniteness............................................................29 c. Infringement With The Old Design................................30 2. Pretrial Rulings On Damages....................................................31 3. Pretrial Ruling On Willfulness..................................................32 4. Jury Trial...................................................................................32 5. Laches Bench Trial ...................................................................33 F. Post-Trial Rulings On Damages, Willfulness, Laches, And Enhancement .......................................................................................36 SUMMARY OF THE ARGUMENT.............................................................................. 37 ARGUMENT....................................................................................................................... 39 I. STANDARD OF REVIEW................................................................................... 39 II. THE DISTRICT COURT ERRED IN GRANTING SUMMARY JUDGMENT OF NO INVALIDITY................................................................... 41 A. The District Court Erroneously Granted Summary Judgment On Obviousness And Anticipation............................................................41 1. The District Court Improperly Gave The Ex Parte Reexamination Preclusive Effect..............................................42 2. The District Court’s Reliance On The PTAB’s Reversal Is Contradicted By Its Refusal To Adopt The PTAB’s Claim Construction ...................................................................42 - ii - Case: 16-2197 Document: 15 Page: 5 Filed: 09/08/2016 3. Genuine Factual Disputes Precluded Summary Judgment Of No Obviousness And Anticipation......................................44 B. The District Court Erred In Finding The Claims Not Indefinite ........50 III. A NEW TRIAL ON DAMAGES SHOULD BE ORDERED......................... 54 A. The District Court Erroneously Permitted Exmark To Seek A Royalty Based On The Entire Market Value Of Accused Mowers................................................................................................55 1. Apportionment Of The Royalty Base Was Required Because The Record Does Not Establish That The Patented Feature Drove Customer Demand..............................56 2. Claim “Drafting Formalities” Do Not Excuse The Requirement Of Apportionment ...............................................61 B. The District Court Erroneously Excluded Evidence Of Prior Art ......65 C. The District Court Erroneously Excluded Evidence Of Exmark’s Knowing Delay...................................................................67 IV. ON REMAND, WILLFULNESS AND LACHES SHOULD BE RECONSIDERED CONSISTENT WITH CONTROLLING LAW............. 69 A. Willfulness Should Be Retried In Compliance With Halo.................69 B. Laches Should Be Remanded For Consideration Of All Material Factors...................................................................................73 CONCLUSION.................................................................................................................... 75 - iii - Case: 16-2197 Document: 15 Page: 6 Filed: 09/08/2016 TABLE OF AUTHORITIES Page(s) Cases A.C. Aukerman Co. v. R.L. Chaides Constr., 960 F.2d 1020 (Fed. Cir. 1992) ....................................................................73, 75 Akamai Techs., Inc. v. Limelight Networks, Inc., 805 F.3d 1368 (Fed. Cir. 2015) ..........................................................................39 Akzo Nobel Coatings, Inc. v. Dow Chem. Co., 811 F.3d 1334 (Fed. Cir. 2016) ..........................................................................40 AstraZeneca AB v. Apotex Corp., 782 F.3d 1324 (Fed. Cir. 2015) ....................................................................63, 64 Atofina v. Great Lakes Chem. Corp., 441 F.3d 991 (Fed. Cir. 2006) ............................................................................41 Baker Mfg. Co. v. Whitewater Mfg. Co., 430 F.2d 1008 (7th Cir. 1970) ............................................................................74 Beauford v. ActionLink, LLC, 781 F.3d 396 (8th Cir. 2015) ..............................................................................40 Biosig Instruments, Inc. v. Nautilus, Inc., 783 F.3d 1374 (Fed. Cir. 2015) ....................................................................50, 54 BMC Software, Inc., v. ServiceNow, Inc., No. 2:14-CV-903-JRG, 2016 WL 379620 (E.D. Tex. Feb. 1, 2016).................60 CLS Bank
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