In a decision that highlights the importance of knowing how and when to make objections in order to preserve issues for appeal, the U.S. Court of Appeals for the Federal Circuit upheld a district court’s judgment of no infringement pointing to the various objections the patentee failed to make in the proceedings that came back to haunt it on appeal. Serio-US Industries, Inc., v. Plastic Recovery Technologies Corp., Case Nos. 05-1106, -1143, -1306 (Fed. Cir. Aug. 10, 2006) (Rader, J.).
Serio-US Industries, the owner and exclusive licensee of patents directed to automatic locks for dumpsters, filed suit against Plastic Recovery Technologies (PRT), alleging infringement. PRT counter-claimed against Serio-US for tortious interference, unfair competition and certain Lanham Act violations. Following the verdict, the trial court granted PRT’s motion for judgment of law of non-infringement. The trial court, however, denied PRT’s motion for judgment as a matter of law (JMOL) on its counterclaims and its motion for attorney fees. Serio-US appealed and PRT cross-appealed.
Notably, Serio-US did not appeal the judgment of non-infringement entered by the trial court. Rather, on appeal, Serio-US asserted that the lower court improperly admitted evidence during the jury trial. Serio-US further asserted that the jury instructions contained claim construction errors. When claim construction requires review of jury instructions, failure to object to those instructions before the jury retires can limit appellate reversal to situations in which plain error has occurred, affecting substantial rights and resulting in a miscarriage of justice. After considering the jury charge, the Federal Circuit found "no plain error or miscarriage of justice."
Notwithstanding the fact that it did not file a motion for JMOL or a new trial, Serio-US sought a remand, arguing that certain "evidentiary rulings led to a flawed claim construction." Without a Rule 50 or 59 motion, a court will only vacate and remand if prejudicial legal error is found. The Federal Circuit rejected Serio-US’s argument, finding that the "trial court gave appropriate reliance to the intrinsic evidence on the meaning of the patent" and only consulted expert testimony to, inter alia, "provide background on the technology at issue."
The Federal Circuit applied the law of the regional circuit in reviewing the denial of PRT’s JMOL of its counterclaims and its motion for attorney fees under patent code section 285, which provides for attorney fees when a case is "exceptional." The Court said, "[a]bsent misconduct in the litigation or in securing the patent, a trial court may only sanction the patentee if both the litigation is brought in subjective bad faith and the litigation is objectively baseless." The Federal Circuit concluded the court did not abuse its discretion in denying attorney fees. Serio-US relied on the opinion of its patent counsel in initiating the action and attempted to communicate with PRT before filing suit.
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