Inline Plastics Corp. v. Lacerta Group, LLC (18-cv-11631).

Lacerta was found to have infringed an Inline patent at summary judgment, and in 2022 a jury determined that Lacerta did not infringe other asserted Inline patents.  The patents were directed to plastic food containers that included tear-off features that would serve to prevent tampering or render any actual or attempted tampering apparent.  The jury further determined that all of the asserted patents were invalid as anticipated, obvious, and/or failing to satisfy the written description requirement.  Inline subsequently appealed.

The Court did not believe that Inline was entitled to judgement as a matter of law.  Inline argued that the references on which obviousness was based were before the examiner during prosecution or were cumulative to references before the examiner, and that the references taught away from the claimed invention.  The Court noted that there is nothing preventing a successful obviousness challenge based on art that was considered during prosecution, and further noted that Inline had not detailed the “teaching away” argument beyond conclusory statements, which do not rise to the high standard of overturning a jury verdict.  The Court further found that Lacerta had sufficiently provided a motivation to combine the references, both through expert and other testimony and in the nature of the technology itself.

The Federal Circuit agreed with Inline, however, that the jury instructions on obviousness were legally flawed, and set aside the judgment of invalidity.  The instructions from the District Court on obviousness mentioned commercial success and long-felt need as objective indicia of non-obviousness, but omitted the remaining objective indicia such as industry praise, copying and licensing, all issues on which Inline adduced evidence at trial.  Inline had specifically requested instructions that referenced these indicia, which were initially included in the draft instructions, but the District Court did not ultimately read them to the jury, an omission that Inline timely objected to.  The Federal Circuit found this not to be harmless error, in part because the obviousness case as presented, while not legally insufficient, was not so strong as to necessarily overcome secondary considerations of non-obviousness.

The Court affirmed the jury’s finding of noninfringement, rejecting Inline’s argument that the district court erred in its claim constructions and improperly admitted evidence of a Lacerta patent as relevant on the issues of willfulness and damages.  On the claim construction issue, Inline argued that the construction of four of the claim terms had the practical effect of requiring the packaging to be 100% tamper-proof, which was not required by the claim language as understood by a relevant artisan.  The Federal Circuit determined that the court’s constructions fit with the ordinary meaning of the claim language, and comport with the specification’s stated purpose of deterring unauthorized tampering by making the packaging physically difficult to open.  The Court disagreed that the constructions went so far as to require complete inaccessibility.

With respect to the admission of the Lacerta patents, the Federal Circuit applied the “abuse of discretion” standard of the First Circuit and determined that there was no legal authority establishing the Lacerta patent as irrelevant to the willfulness and damages issues.  That, combined with the limiting instruction given to the jury to consider the Lacerta patent only on those issues and not on infringement made the admission of the patent acceptable.

The Court remanded for a new trial on validity (and damages on the patent on which summary judgment of infringement was granted, should those claims be found valid).  The district court had permitted Inline to withdraw without prejudice a number of asserted claims on the day before the trial concluded.  The Federal Circuit vacated this determination in light of their decision on the validity and infringement issues, but instructed the district court to provide additional consideration of whether the dismissal of those claims should be with prejudice, precluding Inline from bringing them in a later suit.