Schwendimann v. Arkwright Advanced Coating, Inc.

Background

Jodi A. Schwendimann brought a patent-infringement action against Arkwright Advanced Coating, Inc. (“AACI”) involving patents related to dark T-shirt transfer technology. AACI counterclaimed against Schwendimann and Cooler Concepts, Inc. for infringement of U.S. Patent No. 6,667,093, referred to as the ’093 Patent.

Before trial, the court granted AACI summary judgment on infringement of the ’093 Patent. The case then went to a jury on invalidity. The jury found claims 1 and 11 of the ’093 Patent invalid because they were anticipated by Schwendimann’s ’475 Patent in light of the ’845 Application and by Schwendimann’s products. “Anticipation” means that an earlier invention or disclosure contained all elements of the later patent claim.

AACI renewed its motion for judgment as a matter of law under Federal Rule of Civil Procedure 50, arguing that the evidence could not support the jury’s invalidity finding. In the alternative, AACI sought a new trial under Rule 59, arguing that the court improperly admitted evidence concerning the ’475 Patent and copying.

Judgment as a Matter of Law

The court viewed the evidence in the light most favorable to Schwendimann, the party that prevailed before the jury. It explained that a renewed judgment-as-a-matter-of-law motion should be granted only when the evidence permits no reasonable basis for the jury’s conclusion.

The court focused on whether Schwendimann’s mid-1990s dark T-shirt transfer product satisfied the relevant elements of claims 1 and 11, including an ink-receptive layer and a white layer containing polyurethane. Testimony from Schwendimann, Bill Nasser, and Mike Galatowitsch described the product’s development and composition. Because those witnesses were interested parties for purposes of proving an earlier invention, their testimony required corroboration.

The court found that ACT’s formula book provided sufficient corroboration. In particular, a 1996 sample showed a white layer containing polyurethane and titanium dioxide, and an ink-receptive layer containing polyurethane. Applying the required “rule of reason,” which considers all relevant evidence when evaluating whether testimony is credible, the court concluded that a reasonable jury could find by clear and convincing evidence that the 1996 product satisfied all elements of the ’093 Patent claims.

The court also found sufficient evidence that the product was sold or offered for sale at least one year before April 19, 2001. Testimony and an August 1999 contact report supported a finding that ACT marketed and sold the product to Wyndstone around August 9, 1999. The court separately concluded that a reasonable jury could find the product publicly known before April 19, 2001, because Schwendimann provided samples to potential customers and there was no evidence that she tried to keep the invention secret.

Because the mid-1990s product provided an independent basis for the jury’s anticipation finding, the court did not decide whether the ’475 Patent or the ’875 Application also anticipated the ’093 Patent. The court therefore denied AACI’s renewed motion for judgment as a matter of law on invalidity.

Motion for a New Trial

The court rejected AACI’s argument that evidence concerning the ’475 Patent should have been excluded. It concluded that the patent was relevant prior-art evidence and that its usefulness was not substantially outweighed by unfair prejudice, confusion, or the risk of misleading the jury. The court also stated that, even if admitting the evidence had been erroneous, the error would not have caused a miscarriage of justice because the jury independently found the ’093 Patent invalid based on Schwendimann’s mid-1990s invention.

The court also rejected AACI’s argument that copying evidence improperly influenced the jury’s invalidity decision. The evidence was relevant to willful infringement and non-obviousness, and the court found that the invalidity finding concerning Schwendimann’s earlier invention was supported by substantial evidence. The court specifically did not decide whether the copying evidence should have been excluded under Federal Rule of Civil Procedure 37(c)(1); it stated that issue would be addressed in another order concerning willful infringement.

Disposition

Judge John R. Tunheim denied AACI’s renewed motion for judgment as a matter of law or, alternatively, a new trial on invalidity of the ’093 Patent. The order did not alter the jury’s finding that claims 1 and 11 of the ’093 Patent were invalid.