Addressing claim construction and injunction issues, the US Court of Appeals for the Federal Circuit affirmed the district court's decision that the defendant's LED technology infringed plaintiff's patent, and that the district court did not err in finding a lack of irreparable harm. Nichia Corp. v. Everlight Americas, Inc., Case Nos. 16-1585; -1618 (Fed. Cir., Apr. 28, 2017) (Stoll, J).
The case involved three patents covering the design and manufacturing of LEDs. LEDs are often manufactured in continuous sheets and then "singulated" into individual diodes, a process that can damage the LEDs. The patents claim specific configurations of LEDs that allow for more efficient singulation with fewer damaged LEDs.
With respect to the first patent, Everlight argued that the district court erroneously construed the terms "leads" and "planar." Regarding leads, the parties agreed that they were an electrically conductive part of the LED, but Everlight contended that the leads had to connect to a structure outside the LED. The district court disagreed, noting that the figures in the patent showed the leads connecting internally. The district court also disagreed with Everlight's contention that "planar" was intended to mean flat, rather than merely two objects in the same plane, again citing intrinsic evidence. The Federal Circuit agreed with the district court on both issues.
As for the other two patents, Everlight argued that it did not infringe because the patents required an electrode "partially disposed" in the bottom surface of the LED recess. According to Everlight, the district court wrongly defined the "bottom" of the recess, arguing that the recess is the flat, lowest plane on the LED. The Federal Circuit disagreed, explaining that Everlight's electrodes protruded through the bottom or the recess and that the recess need not be flat.
Everlight also challenged the district court's decisions finding the patents not obvious. Again, the Federal Circuit affirmed the district court ruling. Although Everlight put forward prior art related to semiconductor and other general electronics manufacturing, the Court concluded this art inapposite based on the complexity of LED technology and the unique design considerations present in optoelectronics.
The Federal Circuit next turned to the patent owner's cross-appeal regarding the district court's denial of a permanent injunction. The district court denied the injunction based on a lack of meaningful competition between the parties and a lack of irreparable harm. The Federal Circuit affirmed both findings. Regarding meaningful competition, the Court found that although both parties sold LEDs, one sold to distributors and the other directly to customers, placing them in different markets. The Court also upheld the finding of no irreparable harm based on the patent owner's licensing practices. Specifically, because the patent owner had licensed the technology to other parties, there were already other low-cost competitors, so there would be no irreparable harm from introducing another into the market.
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