The Federal Circuit today tossed the work of a jury on grounds that the losing parties never raised before their appeal. "Plain error", the panel held.
The plaintiff, WordTech Systems, alleged that Integrated Network Systems, and two men who worked at INS, infringed patents relating to robo-copying compact disks. At trial, the district court asked the jurors to find whether the men directly infringed the patents, induced infringement, and contributed to infringement. All the jurors answered the questions "yes" as to each. The district court accepted the verdict and entered judgment on it.
A panel of the Federal Circuit reversed, holding that the district court made plain errors in how it instructed the jury and in the way it posed the infringement questions. Because of the plainness of the mistakes, the court ruled, the fact that the defendants didn't point them out — and likely didn't see them, despite their manifestness — didn't matter.
Let's take a quick look at the first two of the glaring gaffes.
Direct infringement. The INS workers urged that INS's "corporate veil" barred liability on their part. WordTech answered that INS had forfeited its corporate status and that, regardless, the men's acts made them direct infringers, corporate veil or no. The men replied that INS filed papers that "revived" its corporate status.
The panel decided that the failure to instruct the jury on INS's "corporate status" made the "yes" answers on direct infringement beside the point. That seems plausible if some evidence showed that INS had a corporate veil that needed piercing. The court notes only that INS "fil[ed] appropriate paperwork" to "revive" its veil under Nevada law. WordTech Systems, Inc. v. Integrated Network Solutions, Inc., No. 09-1454, slip op. at 8 (Fed. Cir. June 16, 2010). But, as Blawgletter reads the Silver State's statute, INS's act of filing papers revived nothing unless the Secretary of State granted the corporate zombie new life. We can glean no sign of such official revivification.
Inducement of infringement. The court noted that "inducement was not raised in the Final Pretrial Order, in the jury instructions, or in the closing arguments." Id. at 13. But Jury Instruction No. 15 — which we got from the district court's docket on PACER — says that WordTech claimed the men "actively induced" infringement "by others." Doesn't that count?
The panel also pointed out that the jury question asked if INS's devices — and not the men — infringed the patents. Noting that "a device cannot induce infringement", the court deemed the question "nonsensical". But didn't the jurors know, when they checked "yes" by each man's name, that they were finding the men, and not the devices, guilty of inducing infringement?
Likely we've misunderstood some fine points of law. Please feel free to set us straight.