Engineered Products Co. v. Donaldson Co., Inc.

330 F.Supp.2d 1013

ENGINEERED PRODUCTS CO., Plaintiff, v. DONALDSON COMPANY, INC., Defendant.

No. C 98-2106 MWB.

United States District Court, N.D. Iowa, Eastern Division.

August 12, 2004.

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Cyrus A. Morton, Oppenheimer, Wolff & Donnelly, Minneapolis, MN, for Plaintiff.

Craig J. Lervick, Edward M. Laine, Oppenheimer, Wolff & Donnelly, Minneapolis, MN, Richard S. Fry, Shuttleworth & Ingersoll, Cedar Rapids, IA, for Plaintiff and Counter Defendant.

Annamarie A. Daley, Christopher A. Seidl, Christopher J. Sorenson, Robins, Kaplan, Miller, Ciresi, Minneapolis, MN, Stephen J. Holtman, Simmons, Perrine, Albright, Ellwood, Cedar Rapids, IA, for Defendant and Counter Claimant.

MEMORANDUM OPINION AND ORDER REGARDING EQUITABLE DEFENSES AND POST-TRIAL MOTIONS

BENNETT, Chief Judge.

TABLE OF CONTENTS

I. INTRODUCTION ................................................................... 1018
     A. Factual Background .......................................................... 1018
     B. Trial And Post-Trial Proceedings ............................................ 1020
 II. LEGAL ANALYSIS ................................................................. 1022
     A. Donaldson's Equitable Defenses .............................................. 1022
        1. Double patenting ......................................................... 1022
        2. Estoppel and laches ...................................................... 1023

a. Estoppel .............................................................. 1023
                i. Arguments of the parties ......................................... 1023
               ii. Applicable standards ............................................. 1024
              iii. Analysis ......................................................... 1025
           b. Laches ................................................................ 1027
                i. Applicable standards ............................................. 1027
               ii. Arguments of the parties ......................................... 1028
              iii. Analysis ......................................................... 1028
     B. Donaldson's Post-trial Motions .............................................. 1029
        1. Standards for judgment as a matter of law ................................ 1029
        2. Standards for new trial .................................................. 1030
        3. Issues on which Donaldson seeks either judgment as a matter of
law or a new trial ...................................................... 1030
           a. Erroneous claim construction .......................................... 1030
                i. Arguments of the parties ......................................... 1030
               ii. Analysis ......................................................... 1031
           b. Renewed motion for judgment as a matter of law ........................ 1031
                i. Insufficient evidence of infringement ............................ 1031
               ii. Insufficient evidence of "lost profits" and "price erosion." ..... 1033
              iii. Insufficient evidence of "willfulness." .......................... 1034
        4. Additional grounds on which Donaldson seeks a new trial .................. 1035
           a. Errors in instructions ................................................ 1035
                i. "Literal infringement" instruction ............................... 1035
               ii. "Experimental use" instruction ................................... 1036
              iii. "Doctrine of equivalents" instructions ........................... 1037
           b. Verdict form on segregation of lost profits ........................... 1037
           c. Jury's confusion over infringement under the doctrine of
equivalents .......................................................... 1038
                i. Arguments of the parties ......................................... 1038
               ii. Underlying circumstances ......................................... 1038
              iii. Analysis ......................................................... 1039
           d. Court's comments to Donaldson's damages expert ........................ 1041
                i. The circumstances ................................................ 1041
               ii. Arguments of the parties ......................................... 1042
              iii. Analysis ......................................................... 1042
           e. Use of Federal Judicial Center videotape .............................. 1042
     C. EPC's Post-trial Motions .................................................... 1043
        1. Renewed motion for judgment of infringement .............................. 1043
        2. Motion for enhanced damages .............................................. 1044
           a. Arguments of the parties .............................................. 1044
           b. Applicable standards .................................................. 1044
           c. Analysis .............................................................. 1045
                i. Step one ......................................................... 1045
               ii. Step two ......................................................... 1045
        3. Motion for entry of judgment and pre- and post-judgment interest ......... 1046
           a. Arguments of the parties .............................................. 1046
           b. Entry of judgment ..................................................... 1047
           c. Prejudgment interest .................................................. 1047
           d. Post-judgment interest ................................................ 1047
III. CONCLUSION ..................................................................... 1048

Just as the court was required to resolve a plethora of pre-trial motions in this patent infringement action, it must now resolve a plethora of issues following a jury verdict favorable to the plaintiff, including findings of infringement and "willful" infringement and an award of more than $5.7 million in damages. Still unresolved after the jury's verdict are the defendant's equitable defenses of obviousness-type double patenting, laches, and estoppel, which were tried to the court, and the issue of whether the court should enhance the plaintiff's damages on the basis of the jury's finding of "willfulness." Thus, in post-trial motions, the plaintiff seeks entry of judgment on the jury's verdict; rejection of the defendant's equitable defenses; and trebling of the jury's damage award for "willful" infringement by the defendant. On the other hand, in the defendant's post-trial motions and submissions, the defendant asserts that its equitable defenses require judgment in its favor; that even if its equitable defenses fail, it is nevertheless entitled to judgment as a matter of law notwithstanding the jury's verdict; and that, at the very least, it is entitled to a new trial on several grounds.

The court has already engaged in considerable analysis of most of the legal issues now raised by the parties. See Engineered Prods. Co. v. Donaldson Co., Inc., 165 F.Supp.2d 836 (N.D.Iowa 2001) (EPC I) (decision by former District Judge, now Circuit Judge, Michael Melloy, following a "Markman hearing"); Engineered Prods. Co. v. Donaldson Co., Inc., 225 F.Supp.2d 1069 (N.D.Iowa 2002) (EPC II) (ruling by the undersigned on the defendant's motion for summary judgment on defense of invalidity for obviousness-type double patenting); Engineered Prods. Co. v. Donaldson Co., Inc., 290 F.Supp.2d 974 (N.D.Iowa 2003) (EPC III) (ruling by United States Magistrate Judge Paul A. Zoss on the parties' cross-motions regarding plaintiff's counsel's alleged conflict of interest and appearance of impropriety); Engineered Prods. Co. v. Donaldson Co., Inc., 313 F.Supp.2d 951 (N.D.Iowa 2004) (EPC IV) (ruling on pre-trial motions). Therefore, with the exception of truly "new" issues, the analysis here may be quite abbreviated.

I. INTRODUCTION

A. Factual Background

The court has already described the procedural and factual context to this litigation in some detail in its decisions in EPC I, EPC II, and EPC III. Therefore, the court will not reiterate all of that background information here. Suffice it to say, for present purposes, that this patent infringement action between plaintiff Engineered Products Company (EPC) and defendant Donaldson Company (Donaldson) arises from Donaldson's creation and sale of two air filter restriction indicator devices that EPC contends infringe its U.S. Patent Number 4,445,456 (the '456 patent). EPC's '456 patent, which issued on May 1, 1984, and expired in 2001, is for a mechanical air filter restriction indicator with a lock-up feature. Such a device allows the operator of a vehicle with a combustion engine to see how much restriction is present in the engine's air filter, i.e., how dirty the air filter is, without having to operate the vehicle at the same time. The accused devices are Donaldson's Air Alert, which is also called the "original GMT-800" in this litigation, and Donaldson's Next Generation Air Alert or NG Air Alert, which is also called the "NG GMT-800" in this litigation.

As confirmed by the evidence presented at trial, the present dispute was prompted in large part by a decision of General Motors (GM) in the mid-1990s to add a progressive air filter restriction indicator to its light truck platform, the GMT-800 platform. This platform includes large passenger vehicles, such as SUVs; hence, it was expected to see enormous growth. EPC and Donaldson, the only domestic manufacturers of progressive air filter restriction indicators, competed for the contract to provide the required indicators. As part of its competition for that contract,...