Abt Systems, LLC v. Emerson Electric Co.

797 F.3d 1350, 116 U.S.P.Q. 2d (BNA) 1322, 2015 U.S. App. LEXIS 14513, 2015 WL 4924160
CourtCourt of Appeals for the Federal Circuit
DecidedAugust 19, 2015
Docket2014-1618, 2014-1700
StatusPublished
Cited by10 cases

This text of 797 F.3d 1350 (Abt Systems, LLC v. Emerson Electric Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Abt Systems, LLC v. Emerson Electric Co., 797 F.3d 1350, 116 U.S.P.Q. 2d (BNA) 1322, 2015 U.S. App. LEXIS 14513, 2015 WL 4924160 (Fed. Cir. 2015).

Opinion

SCHALL, Circuit Judge.

This is a patent case. The University of Central Florida (“University”) is the as-signee of -U.S. Patent No. 5,547,017 (“the '017 patent”), titled “Air Distribution Fan Recycling Control.” The patent is licensed to ABT Systems, LLC (“ABT”). ABT and the University sued Emerson Electric Co. (“Emerson”) and three other defendants in the United States District Court for the Northern District of Illinois for infringement of claims 1-5 of the '017 patent. Eventually, the case was transferred to the United States District Court for the Eastern District of Missouri and proceeded to trial before a jury against Emerson alone after its three co-defendants settled. Following trial, the jury found the asserted claims not invalid by reason of obviousness and infringed by Emerson’s “Big Blue” thermostats. Based on a royalty rate of $2.25 per unit, the jury awarded damages in the amount of $311,379 on sales of 138,-891 thermostats. ABT Sys., LLC v. Emerson Elec. Co., No. 4:11-cv-00374-AGF, 2013 WL 5567713, at *2 (E.D.Mo. Oct. 9, 2013).

ABT appeals three rulings of the district court relating to damages. It contends these rulings were erroneous and impacted its damages award. For its part, Emerson cross-appeals the district court’s denial of its motion for judgment as a matter of law (“JMOL”) that claims 1-5 of the '017 patent are invalid by reason of obviousness. See id. at *3.

For the reasons set forth below, we hold that the district court erred in denying Emerson’s motion for JMOL of invalidity. We therefore reverse the judgment of non-invalidity, vacate the judgment of infringement, and remand the case to the district court for dismissal of the complaint. In view of this disposition, it is not necessary for us to address ABT’s appeal, which is rendered moot.

Background

I.

Annin Rudd is the sole inventor named on the '017 patent. He assigned the patent to the University, his employer at the time of the invention. The University then licensed the patent to ABT. The technology involved in the '017 patent relates to heating, ventilation, and air conditioning (“HVAC”) systems.

The '017 patent explains that prior art thermostats for forced-air HVAC systems typically have two modes of operation for the system fan. The first is for operating the fan only when there is a call for heating or cooling from the thermostat. This is necessary in order to distribute air from *1353 the heating or cooling elements to the space to be conditioned. Often, this is referred to as a thermostat’s “auto” mode. The patent also explains that some prior art thermostats include settings for continuous system fan operation (i.e., “constant fan mode”), causing the fan to run irrespective of a call for heating or cooling.

The '017 patent claims an apparatus for running an HVAC system fan intermittently during periods when there is no call for heating or cooling. In particular, the '017 patent claims a forced central air system with a “recycle control” for periodic fan operation when the system is not heating or cooling. The periodic fan operation begins “a preselected time period” after the fan stops at the end of a heating or cooling cycle, or after the termination of “constant fan mode” operation. Claim 1 is the only independent claim at issue. It reads as follows:

1. A fan recycling control apparatus for a central air conditioning (CAC) system comprising: a circulating fan;
a central air conditioning system with ducts to distribute cooled and heated conditioned air throughout a building; a thermostat for activating and deactivating both the central air conditioning system and the circulating fan; said activating causing a continuous fan operation, said deactivating causing no fan operation, said thermostat further having a selectable constant fan mode, and
a recycle control for periodically activating and deactivating only the circulating fan after a preselected time period, since the central air conditioning system has been deactivated, or the circulating fan has been deactivated from the selectable constant fan mode.

’017 patent claim 1 (emphases added). Dependent claims 2-5 set forth limitations directed to specific types of HVAC system heating and cooling modes. They also set forth limitations relating to various types of heat sources for the system.

The specification of the '017 patent touts the benefits of running the fan periodically after a preselected time from heating or cooling deactivation based on fan “recycle control.” Those benefits include reduced air stagnation, dilution of point sources of indoor air pollution, and improved air cleaning. At the same time, periodic “recycle control” is said to reduce energy consumption in comparison to the “constant fan mode” operation of prior art thermostats.

II.

Emerson manufactures various products, including thermostats for use in HVAC systems. One of Emerson’s products is the Big Blue thermostat, so named because of its blue user interface screen. In 2009, ABT and the University sued Emerson for patent infringement, alleging that the so-called Comfort Circulating Fan Feature (“CFF”) of the Big Blue thermostat infringed claims 1-5 of the '017 patent. As noted, following trial, the jury found the asserted claims not invalid as obvious and infringed and awarded ABT damages.

At trial, in support of its invalidity defense, Emerson relied primarily on four prior art references in the field of HVAC systems and thermostats. Specifically, it argued that the asserted claims of the '017 patent would have been obvious in view of U.S. Patent No. 2,013,136, to Frank Cornelius (“Cornelius”); U.S. Patent No. 4,838,-482, to John Vogelzang (“Vogelzang”); U.S. Patent No. 2,953,908, to Dan Petrone et al. (“Petrone”); and/or U.S. Patent No. 5,020,332, to Eiji Nakatsuno et al. (“Na-katsuno”). After the jury found the '017 *1354 patent not invalid and infringed, Emerson filed a motion for JMOL to set aside the verdict.

The district court denied Emerson’s motion. A BT Sys., 2013 WL 5567713, at *1, *3. The court reasoned that “[t]he jury could have reasonably found, based upon the evidence, that the prior art relied upon by Defendant did not disclose ‘periodic’ fan operation that was dependent upon the deactivation of the heating or cooling function of the system, and further that was adaptable to modern air conditioning systems.” Id. at *3. The court stated: “The jury could have also found from the evidence that there was a long-felt need for a periodic fan recycle control as disclosed in the Rudd Patent.” Id. The court continued that it could not “say as a matter of law that the claimed invention is not more than the predictable use of prior art elements according to their established functions.” Id. (internal quotation marks omitted). Emerson timely cross-appealed the district court’s denial of its motion. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

DISCUSSION

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797 F.3d 1350, 116 U.S.P.Q. 2d (BNA) 1322, 2015 U.S. App. LEXIS 14513, 2015 WL 4924160, Counsel Stack Legal Research, https://law.counselstack.com/opinion/abt-systems-llc-v-emerson-electric-co-cafc-2015.