United States District Court, E.D. Wisconsin
MILWAUKEE ELECTRIC TOOL CORPORATION, METCO BATTERY TECHNOLOGIES LLC, AC MACAO COMMERCIAL OFFSHORE LIMITED, and TECHTRONIC INDUSTRIES CO. LTD., Plaintiffs,
SNAP-ON INCORPORATED, Defendant.
Stadtmueller U.S. District Judge.
a patent case about lithium-ion batteries used in power
tools. Trial is scheduled to begin on Monday, October 16,
2017. The parties have filed voluminous motions in limine and
Daubert motions in anticipation of trial.
See (Docket #234, #235, #238, #241, #242, #248,
the final pretrial conference, held on October 10, 2017, the
Court indicated that it would take up each disputed issue
before selection of the jury, or when such matters arose
during trial, as appropriate. See (Docket #271). At
the parties' request, however, the Court now issues a
decision on the most pertinent of the pretrial motions in an
effort to streamline the parties' trial preparation and
perhaps aid their efforts to seek a mutually agreeable
pretrial resolution of this matter. See (Docket
#272). The Court will address each motion in turn.
Moli Evidence as Prior Art for Purposes of
102 of the Patent Act establishes certain types of prior art
that may be used in various ways to attack the validity of a
patent. Section 102(f) defines one such type of
prior art. It provides that a person is not eligible for a
patent if “he did not himself invent the subject matter
sought to be patented.” 35 U.S.C. § 102(f) (2006).
Put differently, one who derives an invention from another
cannot patent it. Price v. Symsek, 988 F.2d 1187,
1190 (Fed. Cir. 1993). In order to establish derivation, the
challenger must prove, by clear and convincing evidence,
“both prior conception of the invention by another and
communication of that conception to the patentee.”
Eaton Corp. v. Rockwell Int'l Corp., 323 F.3d
1332, 1334 (Fed. Cir. 2003); Cumberland Pharm. Inc. v.
Mylan Institutional LLC, 846 F.3d 1213, 1218 (Fed. Cir.
is the formation in the mind of the inventor of a definite
and permanent idea of the complete and operative invention,
as it is therefore to be applied in practice.”
Singh v. Brake, 317 F.3d 1334, 1340 (Fed. Cir.
2003). A conception must encompass all limitations of the
claimed invention. Id. Critically, “derivation
is not proved by showing conception and communication of an
idea different from the claimed invention even where that
idea would make the claimed idea obvious.”
Cumberland Pharm., 846 F.3d at 1219.
which is a challenge to the validity of a patent made
pursuant to Section 103, is established “if the
differences between the subject matter sought to be patented
and the prior art are such that the subject matter as a whole
would have been obvious at the time the invention was made to
a person having ordinary skill in the art to which said
subject matter pertains.” 35 U.S.C. § 103(a)
(2006). To prove obviousness, one must show that a skilled
artisan “would have found it obvious to bridge the
differences between the subject matter of the claims and the
prior art[.]” Ohio Willow Wood Co. v. Alps S.,
LLC, 735 F.3d 1333, 1343 (Fed. Cir. 2013). This entails
consideration of several factors, including “(1) the
scope and content of the prior art, (2) the differences
between the prior art and the claims at issue, (3) the level
of ordinary skill in the art, and (4) any relevant secondary
considerations, such as commercial success, long felt but
unsolved needs, and the failure of others.” Wyers
v. Master Lock Co., 616 F.3d 1231, 1237 (Fed. Cir.
2010); Graham v. John Deere Co., 383 U.S. 1, 17- 18
here, Section 103 also provides that subject matter defined
in Section 102 may be used to support an obviousness argument
although “the invention is not identically disclosed or
described as set forth in section 102.” 35 U.S.C.
§ 103(a) (2006). In other words, even if a prior art
reference fails to establish that the patent is invalid based
on an analysis of Section 102 alone, that prior art may still
be used to support a contention that the invention is obvious
under Section 103. See Net MoneyIn, Inc. v. VeriSign,
Inc., 545 F.3d 1359, 1371 (Fed. Cir. 2008) (while a
court cannot combine two prior art references to find
anticipation, they can be combined to argue obviousness);
Application of Arkney, 455 F.2d 586, 587 (C.C.P.A.
recent decision on claim construction and summary judgment,
the Court found that certain lithium-ion battery cells
manufactured by a Canadian firm, E-One Moli Energy (Canada)
Ltd. (“Moli”), were insufficient to establish a
derivation defense under Section 102(f) for Defendant Snap-On
Incorporated (“Snap-On”). Milwaukee Elec.
Tool v. Snap-On Inc., Case No. 14-CV-1296-JPS, 2017 WL
4220457, at *15-17 (E.D. Wis. Sept. 22, 2017). The Court
found that the Moli cells did not constitute a prior
conception of Plaintiffs' patented invention for two
reasons. First, the early cells were not capable of meeting
the 20 Amp Limitation. Id. at *17. Second, the
later-developed, more powerful cells were not equivalent to
battery packs, which are the subject of the
second point, key to the Court's decision was that, to
establish derivation, the complete and operative invention
must be communicated to the inventor. Id. Rendering
the patented invention obvious is not enough. Id.
Applied here, the Court determined that even assuming a
skilled artisan could extrapolate a battery pack from the
Moli cells that would be housed inside it, this would at most
render the invention obvious. Id. The cells were not
themselves the complete and operative invention.
Consequently, the Court dismissed Snap-On's derivation
Snap-On seeks to use the same Moli evidence to pursue a
different theory of invalidity: that the Moli cells rendered
the patented invention obvious under Section
Plaintiffs oppose this, arguing that the Moli evidence should
not be admitted for any purpose. Their opposition appears to
be twofold, but their arguments are not easily parsed. First,
argue Plaintiffs, because the Moli cells do not establish a
derivation defense, they do not qualify as prior art under
Section 102(f). As a result, they cannot now be leveraged in
a Section 103 obviousness claim. Second, because Milwaukee
asked Moli to prepare the cells, the cells are part of
Milwaukee's own inventive contributions. In
Plaintiffs' view, they cannot simultaneously be prior
responds that the Court did not grant summary judgment on its
obviousness challenge, only derivation. According to Snap-On,
the Moli cells qualify as Section 102(f) prior art even if
they could not sustain a derivation defense. As Snap-On reads
the Court's recent ruling, the Court only found that the
patented invention was not derived from the cells and said
nothing about whether the cells rendered the packs obvious.
light of the statutory text and structure, against the
backdrop of the relevant precedent, the Court finds
Snap-On's position more persuasive. In OddzOn
Products, Inc. v. Just Toys, Inc., 122 F.3d 1396, 1403
(Fed. Cir. 1997), the Federal Circuit explained the operation
of Section 102(f) subject matter as used in an obviousness
It means that an invention, A', that is obvious in view
of subject matter A, derived from another, is also
unpatentable. The obvious invention, A', may not be
unpatentable to the inventor of A, and it may not be
unpatentable to a third party who did not receive the
disclosure of A, but it is unpatentable to the party who did
receive the disclosure.
Id. The court also held that Section 102(f) subject
matter, although it encompasses private communications to the
inventor, can nevertheless constitute prior art for purposes
of Section 103. Id. at 1401-02. In this case,
Snap-On's theory is that Moli communicated its cells, A,
to Plaintiffs, and Plaintiffs then developed their battery
pack, A', from them.
explanation resolves the first question Plaintiffs raise
about how to define Section 102(f) prior art. Initially, the
Court rejects Plaintiffs' bald suggestion that any
non-public information cannot qualify as prior art. This is
precisely the opposite of what the Federal Circuit said in
OddzOn. Id. Admittedly, most prior art is
public information, but the Court of Appeals found that
Section 102(f) subject matter, even if “secret, ”
could be used in a Section 103 obviousness claim.
Id. Consequently, this Court will not reject any of
the Moli evidence simply because it was non-public, including
drawing distinctions between certain cells that were or were
not covered by a confidentiality agreement between Moli and
Plaintiffs. See (Docket #248-2 at 5-7).
aspect of Plaintiffs' definitional argument appears to
suggest that only complete inventions, not any communications
or information, can count as Section 102(f) prior art. Yet
this position is inconsistent with a plain reading of
OddzOn, which states the Section 102(f) covers
“subject matter, ” not only inventions.
Id. at 1403. The Court agrees with Snap-On that
whether or not Plaintiffs derived their invention from
Moli's cells, the cells and related communications and
information are of the Section-102(f) type, having been
communicated to the inventor by another in confidence.
text of Section 103(a) confirms that even if certain prior
art references fall short of invalidating a patent when
considered under the relevant subsection of Section 102, they
nevertheless can be used to make out an obviousness
challenge. Indeed, Plaintiffs' own cited case, The
Medicines Company v. Mylan Inc., 72 F.Supp.3d 387,
859-60 (N.D. Ill. 2014), rev'd on other grounds,
853 F.3d 1296 (Fed. Cir. 2017), recognized that different
standards apply “when a party is attempting to prove
invalidity by derivation under § 102(f)” as
opposed to “when a party is attempting to use the
disclosure as prior art under § 102(f) in an obviousness