Punitive damages for infringing (but never sold) helicopter landing gear upheld on appeal

On September 24, 2013, the Federal Court of Appeal released its Reasons for Judgment in Bell Helicopter Textron Canada Limitée v. Eurocopter (2013 FCA 219). The Court of Appeal dismissed Bell’s appeal that Claim 15 of Canadian Patent No. 2,207,787 was valid and infringed by Bell’s “Legacy” landing gear. The Court also dismissed Eurocopter’s cross appeal that Claims 1 to 14 and 16 were invalid for lack of demonstrated or soundly predicted utility and that Bell’s “Production” landing gear did not infringe the 787 Patent.

Background

The 787 Patent generally relates to helicopter landing gear with improved ground resonance stability.  When translated into English, Claim 1 of the 787 Patent reads:

1. Helicopter landing gear, comprising two skids each having a longitudinal ground support surface and connected to a front cross piece and rear cross piece which are themselves attached to the structure of the helicopter by connecting devices, the rear cross piece being attached by the ends of its descending branches to the rear part of said longitudinal support surface, characterized in that each of the said skids has at the front an inclined transition zone with double curvature orienting itself transversely in relation to said longitudinal ground support surfaces, above the plane of the latter, the two transition zones together constituting, in this way, an integrated front cross piece, offset in relation to the front delimitation of the plane of contact of the longitudinal support surfaces of the skids on the ground.

Eurocopter developed the “Moustache” landing gear depicted in Figure 1 of the 787 Patent.

After studying the Moustache landing gear on a leased Eurocopter helicopter, Bell built twenty-one Legacy landing gear assemblies, twenty of which were used for various testing.  The remaining Legacy landing gear was used as a static display at a trade show. None of the twenty-one Legacy landing gears were actually sold. Following the initiation of the infringement action, Bell developed the “Production” landing gear that is sold on Bell 429 Helicopters.

Legacy Landing Gear

Production Landing Gear

Infringement -Production Landing Gear

The onus is on the patentee to show that a claim element is non-essential and thus substitutable, failing which a claim limitation is considered essential unless the claim language otherwise dictates. The Court of Appeal rejected Eurocopter’s submission that the invention should be considered, for infringement purposes, from the perspective of functional equivalence with other landing gears.

[95] However, Eurocopter’s submissions go far beyond the construction of the claims. It is also of the view that a party can be found to infringe a patent even though it omitted or changed an element that the patent itself identifies as essential. It submits that the invention should be considered and compared, for infringement purposes, from the perspective of its functional equivalence with other landing gears, such as Bell Helicopter’s Production landing gear: Eurocopter’s Memorandum at paras. 114 to 117, 123 and 129.

[96] This approach is clearly inconsistent with the teachings of Free World Trust since it fails to recognize the primacy of the language of the claims in determining the essential elements, which the Supreme Court has clearly indicated as the foundation of claims construction: Free World Trust at paras. 31, 40 and 51; see also Easton Sports Canada Inc. v. Bauer Hockey Corp., 2011 FCA 83, 92 C.P.R. (4th) 103 (“Bauer Hockey”) at paras. 51 to 53; Bridgeview Manufacturing Inc. v. 9314409 Alberta Ltd. (Central Alberta Hay Centre), 2010 FCA 188, 87 C.P.R. (4th) 195 at paras. 35-36; Canamould Extrusions Ltd. v. Driangle Inc., 2004 FCA 63, 30 C.P.R. (4th) 129 at para. 25

Anticipation

The Court of Appeal was not persuaded that the Trial Judge had committed a palpable and overriding error in concluding that certain Bell documents were not publicly available as of the claim date. In any event, the Court of Appeal conclude that multiple angles would be necessary to properly appreciate depictions of the prior art landing gear configurations, and the purported anticipatory documents did not provide such alternative views.  Since the illustrations were not conclusive and the accompanying terse text unhelpful as to the configuration of the landing gears they disclose, the Court of Appeal concluded that the Trial Judge did not commit a palpable and overriding error in his assessment of these documents.

Obviousness

The Court of appeal, citing Sanofi, held that the Trial Judge did not err when he looked to the specification in order to discern the inventive concept. Citing Apotex v. Allergan, the Court of Appeal confirmed that the utility of the invention as disclosed in the specification may be used in defining the inventive concept.  Here, the Trial Judge was correct to conclude that the inventive inventive concept was to depart from prior art solutions by disclosing a more flexible landing gear with improved ground resonance properties.

Bell’s theory of obviousness, based largely on the same Bell documents that the Trial Judge properly excluded from anticipation as not being publicly available, were properly dismissed by the Trial Judge. The Court of Appeal also noted that Bell’s assertions of obviousness “lack traction and ring quite hollow” in light of the time it took Bell to study Eurocopter’s Moustache landing gear on the leased helicopter.

Utility – forward offset front piece

The Court of Appeal, citing Consolboard, confirmed that utility is measured against the promise of the patent. If the inventor makes an explicit promise of a specific result, then utility will be assessed by reference to the terms of the explicit promise. Claim 15, the only claim found by the Trial Judge to be valid and infringed, is directed to a landing gear where the front cross piece is forwardly offset from the skids. The Court of Appeal held that a patentee is not required to demonstrate the utility of all embodiments within the claim, holding:

[137] It was not necessary for Eurocopter to test every minute variant of the inclination of the integrated front cross piece which was offset forwards in order to establish utility. Indeed, the Judge found (at paras. 329 and 354 of the Reasons) that once a skilled person had chosen a design where the front cross piece is offset forwards, he would have no difficulty choosing which inclination will provide the best result, depending on the general design and weight of the structure of the
helicopter. He further found (at para. 349) that Bell had failed to show that any particular variant did not work, the evidence of its expert witnesses in this regard being “highly speculative”

Utility – rearward offset front piece

The Court of Appeal confirmed that the doctrine of sound prediction applies to mechanical inventions. In the circumstances of this case, calculations and mathematical modeling of the performance of landing gear with a backwards offset front piece amounted to a prediction and not to a demonstration of utility of the backwards offset landing gear. Since Claims 1 to 14 and 16 all encompass a rearward offset front piece, the utility of these claims must have been be based on a sound prediction. Where the factual basis for the prediction can be found is scientifically accepted laws or principles, there is no obligation on the patentee to disclose this factual basis in the specification. However, where the factual basis is reliant on data that do not form part of the common general knowledge, then “disclosure in the specification may indeed be required to support a sound prediction”. Whether the factual basis is part of the common general knowledge or must be disclosed in the specification requires a contextual analysis in each case.

In this case, once Bell had adduced evidence that Eurocopter has not demonstrated or soundly predicted the utility of the rearward offset embodiment, Eurocopter could not rely on the presumption of validity provided by subsection 43(2) of the Patent Act.  Rather, it was incumbent on Eurocopter to submit evidence to rebut Bell’s evidence of lack of demonstrated or soundly predicted utility. Having failed to adduce any such evidence, the Trial Judge was correct in holding that the utility of Claims 1-14 and 16 were not soundly predicted.

Punitive Damages

The Court of Appeal affirmed that punitive damages may be awarded for the intentional infringement of intellectual property rights and that there was no basis to exclude punitive damages from patent infringement. While punitive damages should be determined after compensatory damages have been established, in this case, given the bifurcation order and the possibility of years of appeals and cross appeals in compensatory damages, the just, most expeditious and least expensive determination favoured granting punitive damages prior to determining the quantum of compensatory damages.  Compensatory damaged are not, in this case, likely to serve the goal of punishment and deterrence. The Trial Judge’s findings that Bell’s conduct “represented a marked departure from ordinary standards of decent behavior” and that “there is clear evidence of bad faith and egregious conduct on the part of Bell” was supported by the evidence, and should be accorded great deference.  The Court of Appeal concluded:

[192] Where a person infringes a patent which it knows to be valid, appropriates the invention as its own, and markets it as its own knowing this to be untrue, punitive damages may be awarded when an accounting for profits or compensatory damages would be inadequate to achieve the objectives of retribution, deterrence and denunciation of such conduct. Indeed, such conduct departs to a marked degree from ordinary standards of decent behaviour. It must be denounced in a manner that deters similar misconduct in the future and marks the community’s collective condemnation.

[193] Taking into account all of the circumstances, and considering that Bell Helicopter has failed to convince me that the Judge committed an overriding and palpable error in assessing the evidence before him, I would not disturb the Judge’s findings concerning punitive damages.

A copy of the Court of Appeal’s Reasons for Judgment may be found here.

A copy of the Trial Judge’s Reasons for Judgment may be found here.