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Federal Circuit reaffirms it stance on various common issues that arise in patent casesJune 2, 2006

In a recent case, the Federal Circuit heard a second appeal in the patent infringement case between Liquid Dynamics Corporation (‘LD’) and Vaughan Company (‘Vaughan’). Vaughan brought the second appeal to challenge findings of willful infringement against it as well as findings that the asserted patent was valid and not unenforceabile due to inequitable conduct.Vaughan’s appeal first alleged that LD presented insufficient direct evidence and inappropriate expert testimony to sufficiently prove all counts of infringement. First, the Court clarified that although direct evidence is preferred over circumstantial evidence, it is not unreasonable for a plaintiff to prove infringement by either direct or circumstantial evidence. It was LD’s burden to prove infringement. Although direct evidence of infringement may have made their case stronger, the use of circumstantial evidence does not make the case unsupported by ‘substantial evidence’ as a matter of law, the requirement for reversal. Vaughan also alleged there was no clear and convincing evidence to support a jury verdict of willful infringement. The Court reiterated the various factors to be applied to determine if an infringer acted in bad faith by willfully infringing to determine if increased damages should apply. These include: (1) deliberate copying of ideas or a design, (2) knowledge of another’s patent protection, (3) behavior during litigation, (4) defendant’s size and financial condition, (5) closeness of the case, (6) duration of misconduct, (7) remedial action, (8) motivation for harm, and (9) any attempts to conceal misconduct. The Court had already rejected Vauhgan’s attempt to reverse the jury finding of willful infringement, and therefore would not reverse the appeal against enhanced damages. Vaughan’s objection to the expert testimony presented at trial, claimed that it was inadmissible and unreliable scientific analysis and opinion. The Court reemphasized the Supreme Court’s analysis from Daubert v. Merrell Dow Pharmaceuticals, Inc. (1993) which requires a district court to analyze expert testimony before use in trial. The expert must only testify to scientifically valid knowledge that will assist the jury in understanding or determining a fact at issue. The Court applied the traditional four factors used in determining whether expert testimony is scientifically valid: (1) methodology can and has been tested, (2) methodology has been subject to peer review, (3) potential rate of error, and (4) general acceptance of the methodology. The Court determined that LD’s expert’s testimony was scientifically valid so that a juror could determine infringement, and any faults in his opinions could be uncovered during cross examination.Vaughan’s second allegation of error was that the patent should have been found invalid because the inventor did not disclose his ‘best mode’ and did not enable the claims. The best mode and enablement requirements are found in

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