3M Innovative Properties Company and 3M Company, Plaintiffs, v. Barton Nelson, Inc., Defendant.

Civil No. 02-3591 (PAM/RLE).United States District Court, D. Minnesota.
October 24, 2004

MEMORANDUM AND ORDER
PAUL MAGNUSON, Senior District Judge

This matter is before the Court on Plaintiffs’ Motion for Summary Judgment of Nonobviousness, Defendant’s Motion to Strike, and Plaintiffs’ Motion in Limine. For the reasons that follow, the Plaintiffs’ Motions are granted and Defendant’s Motion is denied as moot.

BACKGROUND

The parties and the Court are familiar with the facts. On June 6, 2004, the Court construed the term “polymeric material” to specifically exclude paper. Thus, Barton Nelson’s “Edit Tac” product, which was made of parchment paper, did not anticipate claims 1, 2, 4 and 5 of U.S. Patent No. 4,907,825 (“`825 patent”).

In late May 2004, Barton Nelson supplemented its interrogatory response relating to its obviousness defense. In July 2004, 3M sought to prevent Barton Nelson from asserting this defense. Although the Court agreed that Barton Nelson’s supplementation was untimely, continuation of the trial date prevented any prejudice to 3M. The Court then re-opened the period for dispositive motions. 3M brought the instant Motion, and Barton Nelson now

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requests that the Court sua sponte invalidate the claims as obvious.

DISCUSSION
A. Standard of Review

Summary judgment is proper if there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The Court must view the evidence and the inferences that may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. Enter. Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir. 1996). However, as the United States Supreme Court has stated, “summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy, and inexpensive determination of every action.” Celotex Corp. v.Catrett, 477 U.S. 317, 327 (1986).

The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Enter. Bank, 92 F.3d at 747. A party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials, but must set forth specific facts in the record showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256
(1986); Krenik v. Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995).

B. Burden of Proof

Issued patents are presumed valid under 35 U.S.C. § 282. To overcome this presumption, Barton Nelson must meet the heavy burden of establishing invalidity by clear and

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convincing evidence. Eli Lilly Co. v. Barr Labs., Inc., 251 F.3d 955, 962 (Fed. Cir. 2001); Monon Corp. v. Stoughton Trailers, Inc.,239 F.3d 1253, 1257 (Fed. Cir. 2001). 3M correctly notes that in a case such as this, where the U.S. Patent and Trademark Office (“PTO”) previously considered the prior art references, the party asserting invalidity bears an even heavier burden. Metabolite Labs., Inc. v. Lab.Corp. of Am. Holdings, 370 F.3d 1354, 1368 (Fed. Cir. 2004). This heavier burden applies not only when a defendant cites a specific reference considered by the patent examiner, but also when the defendant cites prior art that is cumulative of the references considered by the patent examiner. Id.
C. 3M’s Motion for Summary Judgment

“A patent may not be obtained . . . 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. “Inventions typically are combinations of existing principles or features,” so the claimed invention must be considered “as a whole.” Ruiz v. A.B. Chance Co.,357 F.3d 1270, 1275 (Fed. Cir. 2004). This requirement prevents “hindsight reasoning” and an evaluation of an invention “part by part.”Id. Rather, Barton Nelson must demonstrate that:

[A]n artisan of ordinary skill in the art at the time of the invention, confronted by the same problems as the inventor and with no knowledge of the claimed invention, would select the various elements from the prior art and combine them in the claimed manner. In other words, the examiner or court must show some suggestion or motivation, before the invention itself, to make the new combination.

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Id.

Barton Nelson maintains that claims 1, 2, 4 and 5 of the ‘825 patent are invalid as obvious.[1] The Court previously determined that Barton Nelson’s “Edit Tac” products did not anticipate the claims of the ‘825 patent because it was composed of paper, not polymeric material. Barton Nelson now submits that other prior art references support that “it was well known in the art to fabricate sheet items using either paper or polymeric material.” (Def.’s Mem. in Opp’n at 7.) Thus, Barton Nelson contends that the “Edit Tac” product, combined with other prior art, invalidate claim 1 of the ‘825 patent as obvious.

Barton Nelson focuses on four prior art references to support its argument that sheet items could be made with either paper or polymeric material: (1) U.S. Patent No. 3,463,515 (“Thompson reference”); (2) U.S. Patent No. 4,416,392 (“`392 patent”); (3) PCT Pub. No. 85/00781 (“PCT ‘781”); and (4) U.S. Patent No. 4,735,837 (“‘837 patent”) and its German counterpart DE 3,537,433. Despite its discussion of these references, Barton Nelson fails to articulate a specific combination of these references that embodies the limitations in claim 1 of the ‘825 patent. Barton Nelson further fails to present any evidence that supports a motivation to combine these references.

For example, Barton Nelson submits that the Thompson reference established that the distinction between polymeric material and paper is a “simple design alternative.” However, Barton Nelson neglects to mention that unlike the ‘825 patent, the Thompson reference

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teaches a permanent adhesive, a semi-flexible sheet, and “no suggestion that the surface of the Thompson sheet can be written on.” (Collins Aff. Ex. 7 at 3.) Barton Nelson also argues that the ‘329 patent acknowledged the functional equivalence of paper and polymeric material when it stated that “[t]he dispenser is useful for sheets of notepaper and for sheets of polymeric film.” (Id. Ex. 8 at col.2, ll. 29-30.) But, the ‘392 patent teaches polymeric sheets very different than those described by the ‘825 patent: “[t]he polymeric sheets which are referred to are useful for supporting a staple on sheets of paper . . . afford[ing] [a] means for readily releasing the staple from the sheets and retaining the staples with the polymeric tab such that they may be disposed of without picking them up individually. . . .” (Id. Ex. 8 at col. 2, ll 33-39.) Further, even though PCT ‘781 discloses repositionable adhesive flags made from materials such as polyester mylar, PCT ‘781 does not teach “that the sheet be elongate, or have its coating of repositionable pressure sensitive adhesive on a second end portion, or that it is adapted to be written on.” (Id. Ex. 7 at 4-5.) Finally, although the ‘837 patent teaches that repositionable adhesive sheets may be created from either paper or polymeric material, the sheets of the ‘837 patent are unlike the ‘825 patent because they are “described for use as `memo pad, drawing paper, notebook, voucher, price tag, label for specimen, etc.'” (Id. Ex. 7 at 6-7.) Moreover, the ‘837 patent does not describe making the sheet elongate, making an end free of adhesive on both sides, making it visually distinctive, or making the adhesive coated second end portion generally transparent. (See id. at 7.) Barton Nelson’s reliance on these references is unpersuasive and does not support its obviousness defense. Moreover, Barton Nelson fails to demonstrate a specific combination of these references as required to

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invalidate claim 1 of the ‘825 patent.

Furthermore, Barton Nelson fails to demonstrate that there was a suggestion, teaching, or motivation to combine its “Edit Tac” product with any of these prior art references at the time of the invention. “Even if all its limitations could be found in the total set of elements contained in the prior art references, a claimed invention would not be obvious without a demonstration of the existence of a motivation to combine these references at the time of the invention.” Nat’l Steel Car,Ltd. v. Can. Pac. Ry., Ltd., 357 F.3d 1319, 1337 (Fed. Cir. 2004). “[T]he best defense against the subtle but powerful attraction of a hindsight-based obviousness analysis is rigorous application of the requirement for a showing of the teaching or motivation to combine prior art references.” Ruiz v. A.B. Chance Co., 234 F.3d 654, 665 (Fed. Cir. 2000). Because Barton Nelson fails to present evidence of a motivation to combine, Barton Nelson’s obviousness defense cannot survive summary judgment. Viewing the evidence in the light most favorable to Barton Nelson, as the Court must do, Barton Nelson fails to create a genuine issue of material fact that the claims of the ‘825 patent are invalid.[2]
3M’s Motion is therefore granted.[3]

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D. Barton Nelson’s Motion to Strike

Barton Nelson seeks to strike evidence submitted by 3M pertaining to the commercial success of 3M’s polyester tab products. However, an evaluation of secondary factors such as commercial success is unnecessary because Barton Nelson fails to demonstrate both a specific combination of prior art references or a motivation to combine these references, as required to invalidate claims of the ‘825 patent as obvious. Thus, Barton Nelson’s Motion to Strike is denied as moot.

E. 3M’s Motion in Limine

On September 30, 2004, 3M filed a Motion in Limine to preclude Barton Nelson from revisiting issues already decided by the Court’s previous orders. 3M contends that the Court has already determined that Barton Nelson’s “Tac Tab” products embody every limitation in claim 1 of the ‘825 patent but nonetheless denied summary judgment on infringement because a genuine issue of material fact remained as to whether Barton Nelson conformed with the covenant not to sue. 3M thus contends that the only issue for trial is whether Barton Nelson’s products conform to the covenant not to sue. On the other hand, Barton Nelson contends that it is entitled to introduce evidence at trial that at least some of its products do not infringe the ‘825 patent. Barton Nelson maintains that because the Court denied 3M’s Motion for Infringement, the issue of infringement remains for trial.

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In February 2004, 3M filed a motion for summary judgment that Barton Nelson’s “Tac Tab” products infringed claim 1 of the ‘825 patent. Barton Nelson’s argument against 3M’s motion was that its “Tac Tab” products did not infringe because the products were not “suitable” to be written on. The Court rejected this argument. Because Barton Nelson did not dispute 3M’s extensive analysis of Barton Nelson’s products and the embodiments of these products to the limitations of claim 1 of the ‘825 patent, the Court found that the “Tac Tab” products embody every limitation in claim 1 of the ‘825 patent. Nevertheless, the Court found that a genuine issue of material fact existed as to whether the “Tac Tab” products conformed with the covenant not to sue. The Court therefore stated:

[T]he Court refrains from determining whether Barton Nelson has infringed the ‘825 patent. A genuine issue of material fact remains on whether Barton Nelson’s polyester adhesive flags, which include the “Tac Tab” products, are within the scope of the covenant. In the event that Barton Nelson’s products conform with the covenant, then Barton Nelson cannot be liable for infringement as a matter of law. So, although the “Tac Tab” products embody every limitation in claim 1 of the ‘825 patent, the Court declines to grant 3M’s Motion for Summary Judgment.

(June 6, 2004, Order at 9.) Because it was 3M’s motion, the burden was on Barton Nelson to present a genuine issue of material fact that its “Tac Tab” products do not embody the limitations of claim 1 of the ‘825 patent. Barton Nelson disputed 3M’s Motion based on the construction of the phrase “both said end portions being adapted to be written on,” and the Court rejected this argument. If Barton Nelson disputed that its products embodied other limitations of claim 1 of the ‘825 patent, then Barton Nelson should have raised those arguments in opposition to 3M’s motion. See Celotex Corp. v. Catrett, 477 U.S. 317, 324

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(1986) (non-movant in summary judgment proceedings must “designate specific facts showing that there is a genuine issue for trial”). The Court need only address the disputed arguments of the parties, and the June 6, 2004, Order specifically addressed those disputes. Consistent with this ruling, the Court finds that Barton Nelson is precluded from presenting evidence relating to its “Tac Tab” products and infringement of claim 1 of the ‘825 patent. With respect to Barton Nelson’s “Tac Tab” products, the only issue for trial is whether these products conform to the terms of the covenant not to sue.

CONCLUSION

In order to invalidate a claim as obvious, Barton Nelson must show of a specific combination of prior art references that possesses every claim limitation. Barton Nelson must further show a specific motivation to combine the references. Barton Nelson has done neither. Barton Nelson has identified several pieces of prior art, many of which were specifically rejected by the patent examiner, that possess certain limitations present in the claims at issue. Barton Nelson does not identify a specific combination of these references that would render claim 1 of the ‘825 patent obvious, nor a motivation to combine the references. Consequently, no reasonable jury could find that Barton Nelson has rebutted the statutory presumption of validity by clear and convincing evidence.

Accordingly, based on all the files, records and proceedings herein, ITIS HEREBY ORDERED that:

1. Plaintiffs’ Motion for Summary Judgment of Nonobviousness (Clerk Doc. No. 163) is GRANTED;

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2. Defendant’s Motion to Strike (Clerk Doc. No. 187) is DENIED as moot; and
3. Plaintiffs’ Motion in Limine (Clerk Doc. No. 180) is GRANTED.

[1] Claims 2, 4 and 5 are dependent on claim 1 of the ‘825 patent.
[2] Because Barton Nelson fails to invalidate claim 1 of the ‘825 patent as obvious, dependent claims 2, 4 and 5 by definition cannot be obvious. Dependent claims further narrow the scope of their independent claim by adding additional limitations. If an independent claim possesses an element not found in the prior art, its dependent claims will by definition also possess this element. Consequently, the dependent claims cannot be obvious in view of the prior art.
[3] The Court is further persuaded by the fact that the patent examiner considered much of the same prior art and concluded that the claims at issue were not obvious. (See Collins Aff. Exs. 3-7.) Although the patent examiner initially rejected numerous claims of the ‘825 patent as obvious in light of prior art, the patent examiner subsequently allowed the claims, concluding that the claimed invention using polymeric sheets was not obvious in light of the prior art paper sheets. Thus, Barton Nelson fails to overcome the heavier burden articulated in Metabolite Labs,370 F.3d at 1368.

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