Federal Circuit Upholds $13.6 Million Jury Verdict Of Willful Infringement After Affirming The District Court's Correction Of Claims

• Published date: 08 August 2022
• Subject Matter: Intellectual Property, Patent
• Law Firm: Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
• Author: Ms Soniya Shah, Ji-Hye (Christina) Yang, Melanie Magdun, Yuchen Han, Stacy Lewis and Thomas Irving

Holding:

In Pavo Solutions LLC v. Kingston Technology Co., No. 21-1834 (Fed. Cir. June 3, 2022), the Court of Appeals for the Federal Circuit ("Federal Circuit") affirmed a jury verdict in the Central District of California awarding $7.5 million in compensatory damages, enhanced by 50 percent, for willful infringement.

Background:

The patent at issue (U.S. Patent No. 6,926,544 ("the '544 patent")) describes a USB flash memory apparatus with a cover that protects the USB port from damage and foreign substances, as shown in Fig. 2.

The '544 patent purported to solve prior-art issues associated with detachable USB covers because they were often lost or loosened, causing damage to the USB port. The '544 patent describes a cover that is "not completely separated from a main body so that loss of the cover is prevented." '544 patent Abstract. The "flash memory main body" contains a case with a "hinge protuberance." Id. at col. 3 ll. 11-14. The open sides in the cover would allow the flash memory main body to be covered but not separated, thus solving the issues of loss or damage. Independent claim 1 of the '544 patent, however, recited "the hinge protuberance on the case for pivoting the case with respect to the flash memory main body[.]" Id. at Claim 1 (emphasis added).

Pavo Solutions sued Kingston for infringement of the '544 patent. Pavo Solutions argued that the infringement was willful because Kingston continued with its USB device sales despite notice of infringement in 2012. Kingston then challenged the '544 patent at the Patent Trial and Appeal Board ("Board"). The Board upheld many of the challenged claims and found several others were unpatentable for obviousness.

During claim construction, the district court found that the phrase "pivoting the case with respect to the flash memory main body," had a clerical error and corrected the claim language by replacing the word "case" with the word "cover." Pavo Sols., LLC v. Kingston Tech. Co., Case No. SACV 14-1352, 2018 WL 5099486, at *4 (C.D. Cal. Sept. 10, 2018) ("Claim Construction Order"). The district court determined that the error was "evident from the face of the patent" because the case was part of the main body and therefore would not be able to pivot. Id. Furthermore, "[t]he correction was not subject to reasonable debate . . . because Kingston's proposed alternative construction'replacing 'flash memory main body' with 'cover' so that the claim reads 'pivoting the case with respect to the cover''resulted in the same claim scope." Id. at *3...