Issue 150 | January 21, 2004
Ferguson Beauregard/Logic Controls, et al
v. Mega Systems LLC et al.

In Ferguson Beauregard/Logic Controls, et al v. Mega Systems LLC et al., Nos. 02-1380, -1427 (Fed. Cir. Dec. 4, 2003), the Federal Circuit reversed a district court’s claim construction, vacated the determination that a specific version of Mega’s device did not infringe the claims of the ‘991 patent, and remanded the case for further proceedings.

Further, the Court: (1) affirmed the district court’s conclusion that the president and majority owner of Mega did not induce infringement; (2) reversed the district court’s denial of Ferguson’s motion to amend the complaint to include an assertion of willful infringement; (3) affirmed the district court’s refusal to consider whether Mega engaged in inequitable conduct when it successfully revived the ’048 patent; (4) affirmed the district court’s construction of the claims of the ’376 patent; (5) vacated and remanded the damages award; and (6) affirmed the district court’s determination that Ferguson did not infringe the ’048 patent.

The patents in suit disclose control systems and related methods used in the production of petroleum products from a well, specifically, to controls and monitors for systems used for petroleum production. ) Adopting the findings of a special master, the district court concluded that version 2 of Mega’s APC 1000 device infringed the asserted claims of the ’991 patent, but version 3 of the device did not, because the values selected in the operation of the device “do[ ] not bear any relationship to ‘normal plunger performance.’” On appeal, Ferguson argued that the trial court erred in implicitly giving the term “predetermined plunger performance” the same definition as “normal plunger performance.” Following Texas Digital Systems, the court, relying on dictionary definitions and the specification, concluded the district court erred in construing the claims by (1) importing upper and lower range limitations into the claims from the patent and the prosecution history; and (2) referring to structures and features of the accused infringing device.

Based on the proper interpretation of the claims, the Federal Circuit concluded that the district court erroneously determined that a finding of infringement by the APC 1000 device was barred, because it required unwarranted limitations of normal plunger performance and predetermined plunger performance.

The Federal Circuit affirmed the district court’s determination that Bartley was not personally liable for inducing infringement of the ’376 patent, because the district court applied the correct test for determining liability for inducement, and because Ferguson submitted no evidence to show that Bartley “knew or should have known his actions would induce infringement.”

Next, the Federal Circuit reversed the district court’s dismissal of Ferguson’s willful infringement allegation based on the erroneous determination that it was not pled sufficiently under Rule 9(b). Because willfulness does not equate to fraud, “the pleading requirement for willful infringement does not rise to the stringent standard required by Rule 9(b).”

The Court then reversed the lost profits award because it was based on evidence of sales of a device embodying features in addition to those present in the infringed ’376 patent, namely, those features attributable to the ’991 patent. The Court held that it was error to distinguish the allocation of profits that would have been made “but for” the infringement of the ’376 patent with the profits that could fairly be allocated to customer demand related to the features embodying the ’991 patent.

Finally, the district court determination of noninfringement was upheld, based on its finding that, although the accused infringing Ferguson device did “on occasion” perform the step of adjusting the off-time, claims 6 and 35 of the ‘048 required that an adjustment always be made. Because Ferguson’s device did not always make a correction, as the district court found, then it never accomplished the entire method of the claimed invention.

To discuss this topic further, please feel free to contact the author Michael R. Dzwonczyk, (mdzwonczyk@sughrue.com), at Sughrue Mion, PLLC in Washinton DC., USA.

The information contained in this email is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.