Windsurfing International, Inc. v. Fred Ostermann GmbH

668 F. Supp. 812, 4 U.S.P.Q. 2d (BNA) 1429, 1987 U.S. Dist. LEXIS 7672
CourtDistrict Court, S.D. New York
DecidedAugust 21, 1987
Docket81 Civ. 254 (MEL), 83 Civ. 1691 (MEL), 83 Civ. 3774 (MEL)
StatusPublished
Cited by6 cases

This text of 668 F. Supp. 812 (Windsurfing International, Inc. v. Fred Ostermann GmbH) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Windsurfing International, Inc. v. Fred Ostermann GmbH, 668 F. Supp. 812, 4 U.S.P.Q. 2d (BNA) 1429, 1987 U.S. Dist. LEXIS 7672 (S.D.N.Y. 1987).

Opinion

LASKER, District Judge.

In the liability phase of this patent suit involving windsurfing boards, all of the claims of Windsurfing International Inc.’s U.S. Patent Re. 31,167 (“WSI reissue patent”) were found to be valid. BIC Leisure Products, Inc. (“BIC Leisure”) 1 was found to have infringed the WSI reissue patent, 2 see Windsurfing International, Inc. v. Fred Ostermann GMBH, 613 F.Supp. 933 (S.D.N.Y.1985) (‘‘Windsurfing I”), aff'd in relevant part, rev’d in part, vacated in part and remanded sub nom Windsurfing International, Inc. v. AMF, Inc., 782 F.2d 995 (Fed.Cir.), cert. denied, — U.S. -, 106 S.Ct. 3275, 91 L.Ed.2d 565 (1986), 3 and was subsequently enjoined from any further infringement of the patent. 4 WSI now seeks enhanced damages and attorney fees from Bic under 35 U.S.C. §§ 284-285 (1982). After a three-day trial on these damage issues, during which six witnesses testified and numerous documents were received, it is determined that WSI has not established that BIC Leisure’s infringement of the WSI reissue patent was willful, and, accordingly, neither enhanced damages nor attorney fees are awarded to WSI.

Enhanced Damages

35 U.S.C. § 284 (1982) provides that in a patent action “the court may increase ... damages up to three times the amount found or assessed.” Enhancement of damages under § 284 must be premised on a finding of either willful infringement or bad faith. Yarway Corp. v. Eur-Control USA, Inc., 775 F.2d 268, 277 (Fed.Cir.1985). Here, WSI — which does not allege bad faith — has the burden of proof to show by clear and convincing evidence willful infringement on BIC Leisure’s part. See Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 628 (Fed.Cir.), cert. dismissed, 474 U.S. 976, 106 S.Ct. 340, 88 L.Ed.2d 326 (1985).

A determination of willful infringement depends on the totality of the circumstances. Important factors to be considered include 1) whether the infringer, when he knew of the other’s patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed; 2) whether the infringer deliberately copied the ideas or design of another; and 3) the infringer’s behavior as a party to the litigation. See Bott v. Four Star Corp., 807 F.2d 1567, 1572 (Fed.Cir.1986).

1. BIC Leisure’s Good Faith Belief on the Invalidity of the WSI Reissue Patent

Where a potential infringer has actual notice of another’s patent rights, he has an affirmative duty to exercise due care to determine whether or not he is infringing. Bott, 807 F.2d at 1572; Underwater Devices Inc. v. Morrison-Knudsen Co., 717 *814 F.2d 1380, 1389 (Fed.Cir.1983). To meet this duty, the potential infringer must investigate the scope of the patent and form a good-faith belief that it is invalid or that it is not infringed. Bott, 807 F.2d at 1572. Here, it is clear that BIC Leisure did have notice of WSI’s patent rights, and hence it must be determined whether BIC Leisure had a good-faith belief that the WSI patent was invalid.

1) BIC Leisure’s Notice of WSI’s Patent Rights

The BIC businesses first entered the sailboard market in the late 1970s when Tabur Marine, S.A. (“Tabur Marine”), a French corporation then owned by Marcel Bich, founder of Societe Bic, began to manufacture sailboards. 5 Around the same time, Dufour, Inc. (“Dufour”), a Delaware corporation owned by Tabur Marine, 6 began to sell in the United States the Tabur Marine sailboards made in France. In addition, Tabur Marine Ltd. (“Tabur UK”), a British corporation, sold Tabur Marine sailboards in Britain. 7 BIC Leisure was incorporated in November, 1981, and, when Dufour was dissolved in March, 1982, BIC Leisure assumed Dufoúr’s sailboard business and continued to sell Tabur Marine sailboards in the United States. 8

There is no question that BIC Leisure had actual notice of WSI's United States patent when it began selling sailboards in 1981. 9 Bruno Bich, Chief Executive Officer of BIC Corporation and President of BIC Leisure, testified that he became aware of “a question of a patent” owned by WSI in the United States around 1979-1980. 10 In September 1979, WSI sued Ta-bur UK in Britain for infringement of WSI’s British sailboard patent. 11 In January 1981, WSI sued Tabur Marine and Dufour in the United States for infringement of WSI’s original United States patent. 12

2) Basis for BIC Leisure’s Belief that the WSI Reissue Patent was Invalid

Four witnesses testified as to BIC Leisure’s belief that the WSI reissue patent was invalid and the basis for that belief: 1) William H. Meserole, a patent attorney who participated in the challenges to the WSI patent before the Patent and Trademark Office (“PTO”); 2). Charles G.C.N. Livsey, a British chartered patent agent who was involved in the successful challenge to WSI’s British patent; 3) Bruno Bich, Chief Executive Officer of BIC Corporation and President of BIC Leisure; and 4) Alan Lip-son, Corporate Counsel of BIC Corporation and Corporate Secretary of BIC Leisure. Based on the testimony of these witnesses and the documentary evidence presented, the following facts were established concerning the basis for WSI's belief that the WSI patent was invalid.

In early 1981, Dufour, BIC Leisure’s predecessor corporation, retained William Meserole, a.patent attorney, with regard to matters concerning the WSI reissue application. When BIC Leisure was incorporated in 1981, Meserole continued to work with BIC Leisure on the WSI reissue pro *815 ceedings through 1982. 13

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668 F. Supp. 812, 4 U.S.P.Q. 2d (BNA) 1429, 1987 U.S. Dist. LEXIS 7672, Counsel Stack Legal Research, https://law.counselstack.com/opinion/windsurfing-international-inc-v-fred-ostermann-gmbh-nysd-1987.