Kroy v. Safeway – guidance on patentable subject matter, noninfringement, anticipation, invalidity, and court costs

Originally published by Michael C. Smith.

One of my hobbies is ship modeling. Well, it’s more of an interest really, since I haven’t actually finished one in 22 years (I am hung up on getting the air group finished for a May 1942 USS Lexington (CV-2) in 1/700 scale, and don’t even ask about the scratchbuilt battleship Texas that I haven’t worked on since 1992.  Something about practicing law, I suspect…).

But every so often I drift over to my favorite online ship modeling website to click on the “What’s New” link to see what the latest kits and books are, and see if there is something useful.  For example, the last time I was on the site, they had new custom gun barrels for a 1/350 scale New York (BB-34) class battleship.   Well now that’s something I might need one of these days.  Or hey, there’s a new 1/700 scale West Virginia battleship with photoetch cage masts – now that’s cool.  That sort of thing.

Kroy v. Safeway,  2:12cv0800-WCB is sort of the federal civil procedural equivalent of that website.   Every so often I check the recent filings in the case just to see what issue the court has written on recently. As readers will recall, this was a patent infringement case in which the Court granted defendants Safeway, Inc.’s motion for summary judgment of invalidity as to all of the asserted claims on multiple grounds and entered final judgment back in May of this year.

Anticipation & Obviousness

The court’s May 29, 2015 order granting summary judgment of invalidity provides the functional equivalent of a set of 1/700 scale resin and photo-etch twin .38 gun mounts (with blast bags, of course), which is model–speak for saying that the Court’s analysis of anticipation and obviousness, including extensive riffs on commercial success and secondary considerations for you invalidity fanboys, are valuable in that they can be applied in many cases, in much the same way that custom-cast 5″ twin turrets are going to be of broad interest to ship modelers.  Why?  Because virtually every warship in the WW II U.S. Navy from Gearing–class destroyers up through cruisers, battleships and war–built carriers used them.  (The San Diego-class light cruisers took it to an extreme, carrying eight turrets as their main armament, just in case you’re interested).   It doesn’t matter what you’re building – you’re going to slap at least a few of these on, so having a drawer in your spares box for them is a wise move.

In this case, Judge Bryson writes that “clear and convincing evidence shows that the asserted claims of the ’830 patent were anticipated by DeLapa and obvious in light of DeLapa alone and the combination of DeLapa and Scroggie, and that no reasonable finder of fact could conclude otherwise. That showing is sufficiently strong that Kroy’s evidence as to the commercial success of marketing programs based on concepts found in the Kroy patent does not support Kroy’s contention that the commercial success of those programs is attributable to novel ideas disclosed for the first time in the ’830 patent.”

An order like this that provides a roadmap for an analysis which concludes that claims have been shown by clear and convincing evidence to be invalid in such a way that there is no need to refer the issue to a jury for resolution of any disputed factual issues is of use to patent practitioners. Who will probably use it far more often than I – regrettably – would use such finely crafted pieces of modeling art.  (And I build pre-war carriers anyway, and they used either open-mount 5″ .38s, or 5″ .25s and the kit versions of the latter are just fine).

Patentable Subject Matter

Next up on May 29 was another summary judgment ruling invalidating the asserted claims for lack of patentable subject matter under 35 U.S.C. 101.

This is more like a new line of camouflage paints because it covers everything. Judge Bryson’s analysis of 101 and the subsequent caselaw – which is not the first time he’s done this in an Eastern District case – is must-read material for patent litigators, as it provides state-of-the-art analysis of this now almost-perennial issue.

Noninfringement

The Court denied the motion for summary judgment of noninfringement, which is about like a new model of the battleship Missouri.  You’ve seen it before, and it’s not all that surprising, but it’s always interesting to see how the manufacturer handled that weird section behind the aft smokestack.  Because you know, sometimes that gets screwed up.

Court Costs

For some reason, prevailing parties always ask for court costs under Federal Rule of Civil Procedure 54(d), and while it isn’t uncommon for parties to reach agreement on the amount of court costs, when they do not, courts need to resolve issues regarding which costs are recoverable.

Now, unfortunately (or fortunately, if you happen to be wearing a robe), court costs are a rarer breed as disputes in federal court go. Since a huge number of cases are resolved by settlement, the issue of court costs just doesn’t come up in the vast majority of cases.  Accordingly, court costs disputes can be analogized more to single 5″ .38 caliber mounts, which were only used by U. S. Navy destroyers up through the Fletcher class.  (There will be a test on this later). Accordingly, good orders on court costs, while interesting, are not as broadly useful, since not nearly as many litigants have to look at court costs issues as, say anticipation and obviousness arguments.

But still, destroyers do have to be built, and similarly opinions addressing common issues on court costs are worth reviewing and filing away, especially for younger lawyers, who are likely going to be the ones tasked with coming up with what the costs were and why they should or should not be recoverable.

In his initial order on August 13, Judge Bryson granted in part Safeway’s proposed motion for entry of bill of costs, finding that the technical tutorial was not “necessarily obtained for use in the case” under 28 U.S.C. 1920(4). But, (and this is where this gets even more interesting, so wake up) Judge Bryson fleets up from 5′ single mounts to 40mm quad mounted Bofors when he wades into the issue of when trial graphics are recoverable.  (Just about everything up to and including shore-based restroom facilities in the WW II U.S. Navy had at least one quad Bofors, and if they could sponson a second out over the side they did.  For example, in the photo at left the carrier Ticonderoga has five hanging off its starboard side alone, plus two on the bow, three on the island, and five more on the port side and stern that you can’t see).

Now you may think that I am exaggerating somewhat in my enthusiasm for a damn fine antiaircraft weapon.  It is true that the U.S. Navy was so pleased with the weapon when it got samples in 1940 that it began manufacturing pirated versions before licensing the weapon from Bofors the next year.  (I haven’t been able to find out what the royalty rate was, but I can tell you that the damages base would have been 60,000 units and the infringement was willful as hell).

But there are three reasons why I think the issue is worth Bofors-ish attention.  First, this is an issue that I have frequently had come up in cases, so it is good to have some combat–loaded briefing, as it were, on the issue. Second, these expenses can be substantial – in some cases it is not unusual for trial graphics to be over half of the claimed costs – so the issue is one that can justify attention by sidecar trial counsel. But the third and principal reason that the issue becomes as important as it does is that Judge Bryson’s opinion indicates that this issue may now come up before a trial or settlement, so while an actual request for recovery of the expense as a taxable cost may still be relatively rare, the issue of whether they should be potentially will become much more common.

As litigants that go to trial regularly know (or, let’s be honest, their associates knew – this is not what first-chairs think about on a regular basis) prior to reading Judge Bryson’s opinion, the appellate authority on the issue of if, when, and how trial graphics are recoverable under 1920(4) is convoluted and not often dusted off, and requires translating newfangled graphics back into their prehistoric equivalent, known as “exhibits” and then dealing – typically long after the fact – with an inconvenient requirement which may or may not have survived recent case law, requiring pretrial authorization before the incurring of costs which might later be taxed against the opposing party.  Uh, oh – you didn’t know about that, did you?

In the end, Judge Bryson denied the request for trial graphics for two reasons. First, he found that Kroy had no prior notice of, nor any reason to anticipate, such expenses. “In the Court’s view,” he wrote, “it is unfair to require Kroy to bear these unanticipated costs that have resulted from Safeway’s unilateral acts.” He noted that Safeway had incurred substantial expenses in producing trial demonstratives to explain the technology that was neither complex nor sophisticated, and those expenses only came to light in its final bill of costs. Second, the Court concluded that Safeway could not recover expenses related to the trial graphics for the additional reason that it had not demonstrated that the graphics were “necessarily obtained for use in the case.” 29 U.S.C. § 1920(4).

Costs for Deposition Transcripts

The August 13 order then cruises through multiple issues regarding fees for deposition transcripts, and considers what expenses are incidental and/or recoverable. The conclusion was that in this case, where summary judgment was granted before any videotaped depositions were ever shown at trial, the additional cost for videotaping the depositions was not recoverable.

What do I analogize this to?  Portholes.  It’s just not worth the time or effort.

Copy Costs

The Court made some headway on this issue, but sent the parties back to meet and confer further on the issue after Safeway marshaled its evidence in support of the copies (the lion’s share was for the defending law firm’s copy charges).

In a subsequent order which came out this morning, Judge Bryson went through the now-categorized copy costs (I hate to think what assembling that submission cost – remember that you’re paying patent lawyers to fight over dime-ish a page charges) and set out which were recoverable.  But he drew the line at going back and figuring out what those charges amounted to, and I do as well.

Did I mention portholes?

Hearing Transcripts

People actually fight about this?  It cost way more to brief the subject than the requested amount of $1,364.10 for all the transcripts combined.  Which Judge Bryson awarded.

Anyway, an interesting series of cases with a pretty deep dive into some issues of interest to civil practitioners.  Shame we won’t have equally useful analyses of pre- and postjudgment interest, don’t you think?

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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