from the United States District Court for the Southern
District of California in No. 3:14-cv-02061-H-BGS, Judge
Marilyn L. Huff.
A. Schatz, Wood, Herron & Evans, LLP, Cincinnati, OH,
argued for plaintiff-cross-appellant. Also represented by
Gregory F. Ahrens.
E. Cahill, Nutter McClennen & Fish LLP, Boston, MA,
argued for defendant-appellant. Also represented by Heather
Burnadette Repicky; Peter F. Snell, Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., New York, NY.
Dyk, Moore, and Taranto, Circuit Judges.
filed suit against American Technical Ceramics Corp.
("ATC") for patent infringement in the District
Court for the Southern District of California. After separate
jury and bench trials, the district court held the asserted
claims were infringed and not invalid, and granted a
permanent injunction. The district court limited damages due
to intervening rights.
affirm the district court's holdings that the claims are
not indefinite and that ATC is entitled to absolute
intervening rights because a substantive amendment was made
during reexamination. We conclude that the evidence does not
support an award of lost profits and, therefore, reverse the
award of lost profits and remand for determination of a
reasonable royalty. We conclude that the district court did
not abuse its discretion in declining to award enhanced
damages. We vacate the permanent injunction, and remand for
further proceedings with respect to the injunction.
suit against ATC, filed on September 2, 2014, alleged
infringement of U.S. Patent No. 6, 816, 356 ("the
'356 patent"). The '356 patent claims a
multilayer capacitor design and teaches a multilayer
integrated network of capacitors electrically connected in
series and in parallel.
capacitor is a passive electrical component that stores and
releases energy. Generally, a capacitor comprises two
parallel metal plates separated by a non-conductive material,
known as a dielectric. When a capacitor is connected to a
power source, electricity passes through the metal plates,
but not through the dielectric material. This causes a
positive charge to accumulate on one plate and a negative
charge to accumulate on the other plate. The capacitor will
then release the stored energy when the two plates are
connected to a conductive path that closes the circuit. The
amount of energy that a capacitor can store is called its
capacitors can be combined to form a multilayer capacitor.
The claimed multilayer capacitor creates capacitance in the
dielectric material between the parallel plate combinations.
Moreover, when the electrodes of a multilayer capacitor are
positioned in an edge-to-edge relationship, they form
"fringe-effect" capacitance between the external
contacts. "Fringe-effect" capacitance is the energy
stored in between external contacts of the multilayer
the district court infringement suit was pending, in 2015,
ATC sought an ex parte reexamination of the claims
of the '356 patent in light of new prior art. The
examiner rejected the claims as anticipated and obvious.
Presidio amended the claims. The Patent and Trademark Office
issued a reexamination certificate for the '356
patent. Amended claim 1 of the '356 patent,
the only independent claim asserted by Presidio in this
action, is as follows, with the language added during
a substantially monolithic dielectric body;
a conductive first plate disposed within the dielectric body;
a conductive second plate disposed within the dielectric body
and forming a capacitor with the first plate;
a conductive first contact disposed externally on the
dielectric body and electrically connected to the first
a conductive second contact disposed externally on the
dielectric body and electrically connected to the second
plate, and the second contact being located sufficiently
close to the first contact in an edge to edge
relationship in such proximity as to form a first
fringe-effect capacitance with the first contact that is
capable of being determined by measurement in terms of a
U.S. Patent No. 6, 816, 356 C2, col. 1, ll. 23-36
(Reex-amination Certificate filed Dec. 8, 2015).
December 22, 2015, Presidio amended its district court
complaint, alleging infringement of the '356 patent
claims 1, 3, 5, 16, 18, and 19 as amended by the
reexamination certificate. Presidio alleged that ATC's
550 line of capacitors infringed the asserted claims.
defended, as is relevant for present purposes, that the
claims were indefinite; that the reexamination amendment
entitled it to intervening rights, limiting damages; and that
Presidio was not entitled to lost profits or enhanced
damages. The district court granted ATC's motion for
summary judgment on the affirmative defense of absolute
intervening rights. The district court then held a jury
trial. The jury returned a verdict finding direct
infringement and induced infringement of claims 1, 3, 5, 16,
18, and 19 of the '356 patent by all of the accused
products-ATC's 550 line of capacitors. In addition, the
jury found that Presidio had proven by clear and convincing
evidence that ATC's infringement of the asserted claims
was willful. The jury awarded Presidio $2, 166, 654 in lost
profit damages. It did not reach Presidio's claim for a
reasonable royalty. The jury also issued an advisory verdict
as to indefiniteness, finding that ATC failed to prove by
clear and convincing evidence that claim 1 of the '356
patent is indefinite.
district court thereafter rejected ATC's contention that
the asserted claims of the '356 patent are invalid due to
indefiniteness and denied ATC's motion that Presidio had
failed as a matter of law to prove lost profits. The district
court also denied Presidio's motion for enhanced damages,
determining that enhanced damages were not warranted despite
a jury finding of willful infringement. The district court
then entered a permanent injunction against ATC.
appealed, challenging the district court's determination
that the claims were not indefinite, the award of lost
profits, and the award of a permanent injunction. Presidio
cross-appealed, challenging the district court's
determination as to absolute intervening rights and the
denial of enhanced damages. We have jurisdiction under 28
U.S.C. § 1295(a)(1).
October 21, 2016, we granted a partial stay of the injunction
until March 17, 2017 with respect to ATC's customers that
purchased infringing capacitors before June 17, 2016.