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Nordock v. Systems - Systems Response Following Remand
Nordock v. Systems - Systems Response Following Remand
NORDOCK, INC.,
PlaintiffAppellant,
v.
DefendantCross-Appellant.
Appeals from the United States District Court for the Eastern District of
Wisconsin in Case No. 11-CV-0118, Judge Rudolph T. Randa.
Philip P. Mann
MANN LAW GROUP
1218 Third Ave, Suite 1809
Seattle, Washington 98101
(206) 436-0900
[email protected]
following:
Systems, Inc.
2. The name of the real party in interest (if the party named in the caption
Systems Inc.
subsidiaries), and affiliates that have issued shares to the public, of the party or
None
4. The name of all law firms and the partners or associates that appeared
for the party or amicus now represented by me in the trial court or agency or are
i
TABLE OF CONTENTS
Page
I. INTRODUCTION ......................................................................................... 1
ii
F. IN VIEW OF THE SUPREME COURTS REVERSAL OF
APPLE V. SAMSUNG, THIS COURTS REJECTION OF MR.
BEROS COST SAVINGS APPROACH IS, ITSELF, IN
ERROR ................................................................................................... 15
III. CONCLUSION............................................................................................ 19
CERTIFICATE OF COMPLIANCE...................................................................... 21
iii
TABLE OF AUTHORITIES
Page(s)
Cases
ABM Mktg., Inc. v. Zanasi Fratelli, S.R.L.,
353 F.3d 541 (7th Cir. 2003) ................................................................................14
King v. Harrington,
447 F.3d 531 (7th Cir. 2006) ......................................................................... 14, 15
Miksis v. Howard,
106 F.3d 754 (7th Cir. 1997) ................................................................................15
Statutes
35.U.S.C.289 ................................................................................. 2, 3, 4, 10, 13, 17
Rules
Fed. R. Civ. P. 59 ......................................................................................................14
iv
STATEMENT OF RELATED CASES
Counsel is unaware of any other appeal in or from the same civil action or
proceeding as this matter that was previously before this or any other appellate
court.
There are no other cases known to counsel pending in this or any other court
that will directly affect or be directly affected by this Courts decision in the
pending appeal.
v
I. INTRODUCTION
This case returns to The Federal Circuit following a remand from the United
States Supreme Court. On January 12, 2017, Plaintiff Appellant Nordock, Inc.
(Nordock) unilaterally filed a Statement urging that this Court summarily award
it approximately $900,000, despite the Jurys prior verdict that $46,825 is the total
compensation Nordock should receive. The Court has asked that Defendant
Appellee Systems, Inc. (Systems, Inc.) set forth its position regarding what further
action should be taken following remand. Systems, Inc., provides the following in
For reasons developed more fully below, Systems Inc, believes this Court
should affirm the holding of the District Court and bring this matter to a now long-
overdue conclusion.
Should the Court believe that any issues or questions remain that need to be
addressed, Systems, Inc., respectfully suggests that the Court (1) identify those
issues, (2) receive further briefing on them from both parties, and (3) if believed
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II. DETAILED RESPONSE
On March 26, 2013, following a six day trial, a twelve-person jury returned
its verdict that only some of the Systems accused products actually infringed
Nordocks U.S. Design Patent No. D579,754 (the 754 Patent) and that $46,835
infringement. That figure was squarely within the range that Systems damages
were found.
On November 10, 2014, the District Court denied Nordocks motion for a new
trial, holding that there was sufficient evidence at trial to support the Jurys verdict
On September 29, 2015, this Court, in Nordock, Inc., v. Systems, Inc. 803
F.3d. 1344 (Fed. Cir. 2015), vacated the District Courts decision and remanded the
case for a new trial on damages. In so deciding, this Court relied on its then recent
decision in Apple Inc. v. Samsung Elecs. Co., 786 F.3d. 983 (Fed. Cir. 2915), which
held that because, the innards of Samsungs smartphones were not sold separately
smartphone. Id. at 1002. Relying squarely on Apple v. Samsung, this Court similarly
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held that because the lip and hinge plate assembly actually claimed and shown in
the 754 Patent was not sold...separate from the leveler as a complete unit, the
relevant article of manufacture must be an entire dock leveler rather than the
On January 28, 2016, Systems, Inc., petitioned for writ of certiorari, seeking
United States Supreme Court review of this Courts decision in Nordock v. Systems.
and on December 6, 2016 (1) reversed this Courts holding in Apple and (2)
remanded that case for further consideration. Samsung Electronics Co. v. Apple,
On December 12, 2016 the Supreme Court granted Systems petition for
certiorari, vacated this Courts decision in Nordock v. Systems, and remanded the
case for further proceedings in light of its decision in Samsung v. Apple; a decision
a larger product is sold separately is not the appropriate test for defining the
article of manufacture. In so doing, the Supreme Court clarified that this Court
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erred in its Apple v. Samsung decision and, by extension, in this case as well. Indeed,
the Supreme Court, expressly referencing the instant case, directly stated that
whether a structure is separately sold is not the proper standard. In the words of the
Supreme Court:
given the Supreme Courts clarification, a simple inspection of the subject design
article of manufacture here. This Court can, and should, hold that the article of
manufacture is a lip and hinge plate, not an entire dock leveler. This reality is
4
1. The 754 Patent Itself Defines The Article Of Manufacture
The sole patent at issue in this case, namely U.S. Patent No. D579,754, makes
clear that the article of manufacture is a lip and hinge plate not an entire dock
Significantly, the 754 Patent itself is entitled, Lip and Hinge Plate For A
Dock Leveler. If something other than the lip and hinge plate was intended as
the article of manufacture to which the design was applied, the inventor could simply
More importantly, nowhere in the 754 patent is an entire dock leveler ever
shown. Indeed, each and every figure contained in the 754 Patent shows only the
lip and hinge plate and never an entire dock leveler. (By contrast, two of the design
patents in Apple were simply entitled Electronic Device and arguably showed an
entire smartphone. Neither had the specificity or express narrowness of the 754
A simple examination of the figures in the 754 Patent reveals two clear
things: First, an entire dock leveler is never shown in any of the figures. Figure 1 of
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the 754 Patent, which is illustrative of all the figures in the 754 Patent, is
reproduced here:
This figure clearly shows only the lip and hinge plate to which the
entire dock leveler. Furthermore, the small portion of the dock leveler that is
depicted is shown in dotted or broken lines. That is not a matter of mere stylization
but instead has significant legal meaning. As expressly stated in the 754 Patent
itself:
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The deck and deck frame shown in broken lines in FIGS. 1 and
3-7, the drive brackets shown in FIGS. 1-5, the drive bar opening
shown in FIGS. 1-3, and the assist spring mounting bracket
shown in FIG. 1 represent environmental structure in order to
show the claim in a condition of use and form no part of the
claimed design.
through operation of law, makes clear that the article of manufacture to which the
claimed design is applied is the lip and hinge plate assembly and not the entire dock
leveler.
Given these facts and the Supreme Courts ruling, no reasonable jury can
conclude that the article of manufacture to which the ornamental design is applied is
other than the lip and hinge shown in solid lines in the 754 Patent. As a matter of
law, this Court can, and should, hold that the article of manufacture to which the
754 Patent applies is the lip and hinge plate, not the entire dock leveler.
may prove either its own lost profits, or a reasonable royalty for the design patent.
Nordock is not entitled to recover both compensatory damages and Systems profits
on the same sale. (Appx4538)(emphasis supplied). Under the plain language of this
instruction, the jury had the option of awarding either (1) compensatory damages
7
(defined as Nordocks lost profits or a reasonable royalty) or (2) Systems' profits,
but not both, depending on what Nordock was able to prove. Nordock, as Plaintiff,
The record is clear that at no time did Nordock attempt to prove what Systems
profits were on the lip and hinge plate that are the actual subject of the 754 Patent.
Indeed, at trial Nordocks damages expert, Dr. Stan V. Smith, confirmed that he had
never even seen or read the 754 Patent, much less considered what it actually
covers:
A. Yes.
Q. Is that Nordocks patent on its lug hinge lug and hinge plate
design?
A. This is the first time I've seen this, so why don't you tell me what it
is? (Appx6027-6028)(emphasis supplied).
Days later, during rebuttal cross-examination, Dr. Smith confirmed before the
Q. Thank you. Dr. Smith. Do you recall when Mr. Whitaker cross-
examined you on Wednesday and showed you Plaintiff's Exhibit
8
18? That's the patent in suit?
*** [Evasive answers and colloquy with the Court omitted] ***
A. Yes.
Q. Asked if you had seen this before. You said, quote, this is the
first I've seen it. And that was Wednesday of last week.
A. Correct.
made no attempt to consider profits on what the '754 Design Patent actually covered
Q. The jury has seen this many times. We all know what it covers.
Your answer is that you did not calculate profits, System'
profits, on what is actually covered by this patent. That's your
testimony?
what is actually covered by the 754 Patent, there is little surprise that the Jury
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2. Unlike Nordock, Systems Expert Provided Proof That
Systems Profits Under 289 Would Be Less Than $15 Per
Unit
Unlike Dr. Smith, Systems damages expert, Mr. Bero, painstakingly analyzed
the actual design patent at issue, the relevant financial records and testified at trial
that Systems profits on the hinge and lip plate actually shown and claimed in the
During his direct examination, Mr. Bero properly noted that the '754 Design
Patent includes a single claim reading, The ornamental design of a lip and hinge
plate for a dock leveler, as shown and described. (Appx60). Indeed, during cross-
Q. Now, is this case about a lug? Is this a design patent case for a
lug?
Despite Nordock's counsel's attempts to get Mr. Bero to testify to the contrary,
Mr. Bero continued to correctly note that the article of manufacture to which the
ornamental features of the '754 design is applied is not a dock leveler, but, rather,
A. Well, you asked me multiple questions. When you say "the whole
thing," are you referring to --
10
A. It's the lip and hinge plate. The ornamental design of the lip and
hinge plate.
A. Yeah, but when you say "the whole thing" I want to make
clear we're not talking about the whole dock leveler.
(Appx5537)(emphasis supplied)
Continuing the attack, Nordock's counsel tried to trip up Mr. Bero by asking
about another, prior design patent case Mr. Bero had been involved with wherein a
On redirect, Mr. Bero was asked the obvious question Nordock's counsel was
apparently afraid to, namely, why Mr. Bero testified that profits were recoverable on
the entire drill bit in the earlier case while, in the instant case, profits on the entire
dock leveler were not. Mr. Bero answered clearly and succinctly:
Q. Okay Mr. Bero, Mr. Sokol asked you why in respect to [the drill
bit] case it was your opinion that damages should be awarded on
the entire -- profits on the entire drill bit.
A. Well, the reason was because it says in the claim, it's says "the
ornamental design for a drill bit." It's different than --so -- well,
the drill bit was sold. That's the product that was sold.
There's a picture, you can see the drill bit. It's the whole
drill bit.
11
And that's different than the case we have here where we have
-- I don't know if you can put it up there -- but an ornamental
design of a lip hinge plate and it says "for a dock leveler." I
understand it, is the lip and hinge plate. It doesn't cover an
entire dock leveler. It's just a part of the product. So that's a
big difference in those two cases.
***
Q. Are there any figures in this [754] patent that you're aware
of that show an entire dock leveler?
Again, Mr. Bero clearly and consistently testified at trial that the relevant
structure was the lip and hinge plate, not the entire dock leveler, and, unlike Dr.
Smith, actually determined what Systems profit on that structure actually was.
In answering that important question, Mr. Bero clearly testified that such
profits would be less than $15 per unit, a figure he had already calculated would
To summarize, at trial, Mr. Bero testified, and the Jury clearly heard, that,
under a reasonable royalty calculation, the appropriate damages would be $15 per
unit, and that under a Systems profits approach, properly taking into account that
12
the 754 Patent does not cover an entire dock leveler, the damages would be
profits Systems earned on the article of manufacture actually covered by the 754
Patent. Only Mr. Bero made an effort to determine such profits and testified that
such profits would be less than the $15 per unit he calculated would be the
Given the Courts clear instruction that Nordock could (if proved) recover
not both, and given that the Jury had a choice of awarding either $15 per unit as a
reasonable royalty, or less than $15 per unit as Systems profits, there is no surprise
that the Jury awarded the higher number as a reasonable royalty and properly entered
0 as a profits award.
Samsung v. Apple, it should now be clear that the District Court properly declined to
order a new trial and that the final judgment of the District Court should be affirmed.
13
Mr. Beros approach of taking into account the actual article of manufacture covered
by the 754 Patent, and not simply calculating profits on an entire dock leveler, has
now been determined to be correct. Nordock elected to ignore this issue entirely
(indeed, its expert, Dr. Smith, declined even to look at the 754 Patent) and offered
This Court reviews the denial of a Rule 59 motion for a new trial on an abuse
of discretion standard. Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 26
(Fed. Cir. 2012). In doing so, this Court applies the relevant regional circuit law, in
this case that of the Seventh Circuit. Silicon Graphics, Inc. v. ATI Techs., Inc., 607
In the Seventh Circuit, a motion for a new trial should succeed only if the
verdict is against the manifest weight of the evidence. ABM Mktg., Inc. v. Zanasi
Fratelli, S.R.L., 353 F.3d 541, 545 (7th Cir. 2003) (citing Fed. R. Civ. P. 59(a)); see
also, Aero Prods. Intl, Inc. v. Intex Recreation Corp., 466 F.3d 1000, 1016-17 (Fed.
Cir. 2006).
To satisfy this standard, Nordock must demonstrate that no rational jury could
have rendered a verdict against it. See, King v. Harrington, 447 F.3d 531, 534 (7th
Cir. 2006). When making this evaluation, the Court views the evidence in a light
most favorable to the non-movant and cannot re-weigh the evidence or make
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The Court will sustain the verdict where a reasonable basis exists to support
the jurys verdict. Id. A new trial may be granted only if the jurys verdict is against
the manifest weight of the evidence, id., or if the trial was unfair to the moving
party. Miksis v. Howard, 106 F.3d 754, 757 (7th Cir. 1997).
Given the Supreme Courts clarification of the law, Nordock cannot meet
these strict standards. Here, based on Mr. Beros unchallenged testimony, there was
sufficient basis for the Jury to conclude that profits on the actual article of
manufacture, namely the lip and hinge plate, were less than $15 per unit. In light of
the actual evidence presented at trial, and with the Supreme Courts clear directive,
the Jurys verdict was hardly, against the manifest weight of the evidence.
Systems President, Edward McGuire, testified that, by adopting a lug and hinge
plate structure, Systems Inc. was able to reduce its manufacturing costs by
approximately $5 per unit. All else being equal, this would necessarily increase
Systems profits by precisely that amount. Mr. Bero reasonably relied on this
information in concluding that the profits directly attributable to the lug and hinge
15
plate (i.e., the article of manufacture actually shown in the 754 Patent) would be
around that amount and, in any event, less than $15 per unit.
In its prior decision, this Court held that Mr. Beros cost savings approach
understanding of the relevant article of manufacture, and failed to take into account
this Courts (now erroneous) view that, it is clear that the article of manufacture at
issue is a dock leveler. 803 F.3d. 1344, 1355. However, as is now made clear by
the Supreme Courts holding in Samsung v. Apple, it is this Court, not Mr. Bero, who
not the entire dock leveler but, rather, the lip and hinge plate actually shown and
described in the 754 Patent, Mr. Beros analysis is, in truth, on sound legal and
Systems never argued that the relevant article of manufacture was other than the
entire dock leveler, and somehow agreed that the entire dock leveler was the
appropriate structure. Given the extensive trial testimony of Mr. Bero quoted in
Section D above, how Nordock can make this claim defies explanation.
16
Mr. Bero clearly testified that, for purposes calculating Systems profits under
289, it was necessary to focus on the lip and hinge plate actually shown in the 754
Systems never uttered the magic words, article of manufacture at trial, even this is
Nor do the jury instructions support Nordocks baseless claim. None of the
jury instructions references an entire dock leveler. On the contrary, the relevant term
used in the instructions was infringing product. Throughout the trial, Systems,
and its witnesses, consistently and clearly maintained that the infringing product (if
any) was the lip and hinge plate, not an entire dock leveler. Again, Nordock plays
fast and loose with the facts to convey the entirely erroneous (indeed preposterous)
impression that Systems somehow agreed that the article of manufacture was the
Finally, Nordocks claim is belied by the fact that, in Nordocks opening brief
at the very beginning of this appeal, Nordock claimed that Systems trial counsel
17
(the undersigned) somehow violated the rules by stating in his closing argument to
the Jury that the relevant article of manufacture was the lip and hinge plate, not the
dock leveler itself. (See Nordock Opening Brief at pp. 50-51 and Appx6122-6123.)
Why Nordock would initially and formally challenge an argument that it now claims
Nordocks false claim that Systems somehow agreed what the article of
manufacture is suffers from trying to prove too much. If, as Nordock claims,
everyone agreed that an entire dock leveler is the appropriate article, and no one
argued or testified to the contrary, how is it that the Jury came up with a number
Nordock contends is inadequate? Obviously, Systems and its witnesses argued that
profits are only available as to the lip and hinge plate and the Jury agreed. Nordocks
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III. CONCLUSION
For the foregoing reasons, Systems believes that the record below, together
with the Supreme Courts decision in Samsung v. Apple, are sufficient for this Court
Should this Court determine that any particular issues remain that need to be
addressed, Systems respectfully asks that this Court identify such issues, entertain
______________________
Philip P. Mann
MANN LAW GROUP
1218 Third Ave, Suite 1809
Seattle, Washington 98101
(206) 436-0900
[email protected]
19
United States Court of Appeals
for the Federal Circuit
Nordock, Inc. v. Systems Inc., 14-1762, -1795
CERTIFICATE OF SERVICE
I, Robyn Cocho, being duly sworn according to law and being over the age
Counsel Press was retained by, Attorneys for Appellant to print this
Court using the CM/ECF System, which served via e-mail notice of such filing to
JEFFREY S. SOKOL
SOKOL LAW OFFICE
828 N. Broadway, Suite 400
Milwaukee, WI 53202
Telephone: (414) 272-7200
Facsimile: (414 272-7204
Attorney for Plaintiff-Appellant
20
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME
LIMITATION, TYPEFACE REQUIREMENTS AND TYPE STYLE
REQUIREMENTS
X The motion contains 3,998 words, excluding the parts of the motion
exempted by Federal Rule of Appellate Procedure 27(d)(2) and Fed.
Cir. R. 27(d).
______________________
Philip P. Mann
MANN LAW GROUP
Attorney for Defendant-Cross-
Appellant Systems, Inc.
21