Nos.

2014-1762, -1795

United States Court of Appeals

for the Federal Circuit
NORDOCK, INC.,
Plaintiff-Appellant,
v.
SYSTEMS, INC.,
Defendant-Appellee.

Appeals from the United States District Court for the Eastern District of
Wisconsin in Case No. 11-CV-118, Judge Rudolph T Randa.

STATEMENT OF PLAINTIFF-APPELLANT NORDOCK INC.

IN SUPPORT OF CONTINUED PANEL REVIEW
JEFFREYS. SOKOL
SOKOL LAW OFFICE
828 N. Broadway, Suite 400
Milwaukee, WI 53202
Telephone: (414) 2 72-7200
Facsimile: (414 272-7204
Counsel for Plaintiff-Appellant

January 12, 2017

CERTIFICATE OF INTEREST

Counsel for Plaintiff-Appellant, Nordock, Inc., certifies the following:

1. The full name of every party represented by me is:
NORDOCK, INC.
2. The name of the real party in interest represented by me is:
NONE
3. All parent corporations and any publicly held companies that own 10
percent or more of the stock of the parties represented by me are:
NONE
4. The names of all law firms and the partners or associates that appeared
for the parties now represented by me in the trial court or are expected to
appear in this court are:
SOKOL LAW OFFICE
JEFFREY S. SOKOL
O'NEIL, CANNON, HOLLMAN, DEJONG AND LAING, S.C.
GREGORY W. LYONS

Is/ JeffreyS. Sokol

JeffreyS. Sokol
Counsel for Appellant

January 12, 2017

(i)

TABLE OF CONTENTS

Page
CERTIFICATE OF INTEREST ............................................................. .i
TABLE OF AUTHORITIES ............................................................... .iii
STATEMENT OF RELATED CASES .................................................... v
INTRODUCTION .............................................................................. !
BACKGROUND ............................................................................... 3
A. District Court Proceedings ....................................................... 3
B. Prior Proceedings Before This Court ........................................... 7
C. Supreme Court Proceedings ..................................................... 8
ARGUMENT .................................................................................... 9
I.

THIS COURT SHOULD RETAIN THE CASE, REINSTATE ITS

PRIOR RULINGS, AND FIND THAT SYSTEMS FAILED TO
DEVELOP OR PRESERVE THAT THE ARTICLE OF
MANUFACTURE IS ANYTHING OTHER THAN THE ENTIRE
DOCK LEVELER .................................................................... 9
A. It Was Undisputed During Discovery And At Trial That The
Relevant "Article OfManufacture" Was The Infringing
Dock Leveler In Its Entirety .................................................... 9
B. Systems Waived Its Right To Challenge That Its Total Profits
For Its Infringing Dock Levelers Is Based On Less Than The
Entire Leveler ..................................................................... 11

II.

THIS COURT MAY REINSTATE ITS PRIOR RULINGS AND

REMAND THE CASE TO THE DISTRICT COURT FOR A
DETERMINATION OF DAMAGES WITH A FINDING THAT
SYSTEMS FAILED TO DEVELOP OR PRESERVE THAT THE
ARTICLE OF MANUFACTURE IS SOMETHING OTHER THAN
THE ENTIRE DOCK LEVELER WITHOUT ADDITIONAL
BRIEFINGORARGUMENT ................................................ 14

CONCLUSION ............................................................................. 15
ADDENDUM
CERTIFICATE OF SERVICE
(ii)

TABLE OF AUTHORITIES
CASES

Page(s)

City of Springfield v. Kibbe,

480 u.s. 257 (1987) ....................................................................... 13
Gong v. Hirsch,
913 F.2d 1269 (7th Cir. 1990) ............................................................ 14
Nordock, Inc., v. Systems, Inc.,
No. 11-cv-118, 2012 WL 4760784 (E.D. Wis. Oct. 5, 2012) .......................... 3
Nordock, Inc. v. Systems, Inc.,
No. 11-cv-118, 2014 WL 3786277 (E.D. Wis. July 31, 2014) ......................... ?
Nordock, Inc. v. Systems, Inc.,
803 F.3d 1344 (Fed. Cir. 2015) ...................................... ...............passim
Samsung Electronics Co. v. Apple Inc.,
137 S. Ct. 429 (2016) .................................................................................... v, 1, 2, 8
Sanchez v. City of Chicago,
700 F.3d 919 (7th Cir. 2012) .............................................................. 13
Sulzer Textil A. G. v. Picanol N V.,
358 F.3d 1356 (Fed. Cir. 2004) ........................................................... 12
United States v. Perez,
612 F.3d 879 (7th Cir. 2010) ............................................................. 13
Williams v. Boles,
841 F.2d 181 (7th Cir. 1988) ............................................................. 14

OTHER AUTHORITIES
Fed. Cir. Internal Operating Procedure 15.3 ............................................................. 1
Petition for Writ of Certiorari, Samsung Electronics Co. v. Apple Inc.,
No. 15-777 (U.S.), 2015 WL 10013702 (Dec. 14, 2015) ........................................ v
Statement ofPlaintiff-Appellee Apple Inc. in Support of Continued
Panel Review, Apple Inc. v. Samsung Electronics Co., Nos. 14-335,
15-1029 (Fed. Cir. Dec. 27, 2016), ECF No. 224 ......................................... 1

STATUTES
35 U.S.C. 289 .................................................................. .........passim
(iii)

DOCKETED CASES

Systems, Inc. v. Nordock, Inc., No. 15-978 (U.S.):

Petition for Writ of Certiorari (Jan. 28, 2016) ............................................. v
Order (Dec. 12, 2016) ..................................................... ..passim

Nordock, Inc. v Systems, Inc., No. 11-cv-118 (E.D. Wis.):

Defendant Systems, Inc. Pretrial Report (Feb. 19, 2013), ECF
No. 138 ................................................................................................... 2, 4
Defendants' Proposed Jury Instructions (Feb. 19, 2013), ECF
No. 139 ....................................................................... 2, 4, 12
Defendant Systems, Inc.'s Proposed Verdict Form (Mar. 9, 2013),
ECF No. 158 ................................................................. 2, 4, 12
Model Design Patent Jury Instructions (Mar. 9, 2013), ECF No. 159 ... 2, 4, 12
Jury Instructions (Mar. 25, 2013), ECF No. 166 ............................. 2, 5, 11
Transcript of Excerpt of Jury Trial Proceedings (Mar. 21, 2013),
ECF No. 178 ....................................................................... 10
Plaintiffs Motion to Amend the Judgment Regarding 289 Damages,
Or In The Alternative, for a New Trial on Damages (Apr. 23, 2013),
ECF No. 180 ........................................................................ 7
Memorandum in Support of Plaintiffs Motion to Amend the
Judgment Regarding 289 Damages, Or In The Alternative,
for a New Trial on Damages (Apr. 23, 2013), ECF No. 181 ................ 7
Transcript of Instruction Conference & Plaintiffs Closing
Argument (Mar. 25, 2013), ECF No. 227 ............... ................. passim
Transcript ofDefense Counsel Closing Argument (Mar. 25, 2013),
ECF No. 228 ..................................................................... 3, 6
Transcript of Jury Trial- Volume 6- Page 1200 (Mar. 25, 2013),
ECF No. 233 ......................................................................... 3

(iv)

STATEMENT OF RELATED CASES

The prior panel opinion in this case is reported at Nordock, Inc. v. Systems,

Inc., 803 F.3d 1344 (Fed. Cir. 2015) (O'Malley, J., joined by Reyna & Chen, JJ.).
The Court held that the district court erred in denying Nordock's motion for a new
trial to assess damages pursuant to 35 U.S.C. 289, vacated the jury's damages
award and remanded for a new trial on damages. The Court affirmed the district
court's decisions denying Systems' motion for judgment as a matter of law
("JMOL") as to the validity of Nordock's U.S. Patent No. D579,754 (the 'D754
Patent) and its Rule 59(e) motion with respect to infringement of Systems'6 Yz foot
LHP and LHD dock levelers. Systems filed a petition for writ of certiorari raising
the same "article of manufacture" issue raised by Samsung in its earlier filed
petition for writ of certiorari. Systems' petition is attached to this filing. The
Supreme Court granted Samsung's petition, but held Systems' petition until after
its December 6, 2016 decision, in Samsung Electronics Co. v. Apple, Inc., 137 S.
Ct. 429 (2016).0n December 12, 2016, the Supreme Court issued a decision
granting Systems' petition, vacating this Court's subject decision and remanding
the case for further proceedings in light of Samsung Electronics Co. v. Apple, Inc.
A copy of the Supreme Court's order ("GVR Order") is attached to this filing.

(v)

INTRODUCTION

This case is being remanded from the Supreme Court. This Court may
require additional statements or briefs, remand the case to the trial court, or take
any other action consistent with the GVR Order of the Supreme Court. Fed. Cir.
lOP 15.3. Nordock respectfully requests that the panel retain the case and reinstate
its prior decisions: a) finding that the district court erred in denying Nordock's
motion for a new trial to assess damages pursuant to 35 U.S.C. 289, b) vacating
the jury's damages award and remanding for a new trial on damages, and c)
affirming its denial of Systems' motion for JMOL as to validity of Nordock's
'D754 Patent and denying Systems' Rule 59(e) motion regarding the infringement
of Systems'6 Yz foot dock levelers. In addition, as Systems did not preserve or
develop at trial its assertion that the "article of manufacture" is something other
than the entire dock leveler, Nordock requests that the Court find that the "article
of manufacture" is the entire dock leveler.
Apple provided this Court with a Statement on December 27, 2016
discussing the proceedings and findings of the Supreme Court in Samsung

Electronics Co. v. Apple, Inc. Statement of Plaintiff-Appellee Apple Inc. in

Support of Continued Panel Review, Apple Inc. v. Samsung Electronics Co., Nos.
14-335, 15-1029 (Fed. Cir. Dec. 27, 2016), ECF No. 224. In summary, the
Supreme Court decided only a single, narrow question relating to the damages
available for design patent infringement: "[W]hether, in the case of a multicomponent product, the relevant 'article of manufacture' [under 35 U.S.C. 289]
must always be the end product sold to the consumer or whether it can also be a
component of that product." Samsung Electronics Co. v. Apple Inc., 137 S. Ct. 429,
434 (2016). The Supreme Court held that "the term 'article of manufacture' is
broad enough to encompass both a product sold to a consumer as well as a

component of that product." I d. at 435. Because the Supreme Court construed this
Court's opinion in that case as holding that the "article of manufacture" in 289 is
invariably the entire "end product sold to a consumer," Id. at 436, the Supreme
Court reversed this Court's judgment and remanded the case for further
proceedings.
The Supreme Court's GVR Order regarding Systems' petition made no
determination concerning the identity of the article of manufacture in this case. Nor
did the Supreme Court rule that Systems had properly raised or supported a factual
claim that the article of manufacture in this litigation was anything other than
Systems' entire dock leveler.
At trial, Systems did not develop or preserve its present assertion that the
"article of manufacture" is something other than the entire dock leveler. Nordock
respectfully submits that this Court may and should reinstate its finding that the
article of manufacture at issue in this case is the dock leveler, as no contrary
position was ever asserted by Systems in the district court. Nordock, Inc. v.

Systems, Inc.,803 F.3d 1344, 1354 (Fed. Cir. 2015). Systems never developed or
preserved its present assertion that the "article of manufacture" was something less
than the entire leveler at trial, and there was no basis on which the jury could have
awarded infringer's profits on anything other than Systems' entire dock levelers.
Systems' expert report did not present any calculation of infringer's profits on any
leveler component. J.A. 6536-6657 and 6680-6717. Systems never requested a jury
instruction or verdict question to determine the article of manufacture. Dist. Ct.
Dkt. 138, 139, 158, 159 and 227. The district court's jury instructions do not
discuss and the verdict form does not ask the jury to determine the "article of
manufacture." Jury Instructions, Nordock, Inc. v. Sys., Inc., No. 2: 11-cv-118 (E.D.
Wis. Mar. 25, 2013), ECF No. 166 [hereinafter Jury Instructions]; see also J.A.
4500-50 and 5402-05. Systems' counsel never uttered the words "article" or
2

"manufacture" let alone the term "article of manufacture," and never identified any
leveler component as the "article of manufacture" during his closing arguments.
He simply argued apportionment by asserting the "patent" was "[n]ot [the] entire
dock leveler." Dist. Ct. Dkt. 228, particularly pp.15-16; see see J.A. 6108 and
6122-23. At the conclusion of the trial, Systems made no motion regarding any
need to determine the article of manufacture. Dist. Ct. Dkt. 233. Accordingly, there
is no basis for reaching any conclusion other than that the article of manufacture is
a dock leveler.
BACKGROUND

A. District Court Proceedings

Nordock sued Systems in 2011, after Systems refused to stop selling a
variety of dock levelers that mimicked Nordock's patented design for the front end
of its dock levelers. Pursuant to 289, Nordock sought damages in the amount of
Systems' "total profit" on its infringing articles of manufacture. Throughout the
litigation, Nordock took the position that damages should be calculated based on
Systems' entire infringing dock levelers. On Nordock's motion, the district court
ordered Systems to disclose financial and profit information for its LHP and LHD
"dock levelers." Nordock, Inc., v. Sys., Inc., No. 11-cv-118, 2012 WL 4760784, at

*12 (E.D. Wis. Oct. 5, 2012) (emphasis added), J.A. 2325. Nordock's damages
expert, Dr. Stan Smith, produced a report in which he calculated Systems' profits
on the sale of its entire infringing LHP and LHD levelers to be $912,20 1. J .A.
6360-75, see J.A. 6373. 1
At every stage of the case, Systems correctly assumed the entire dock leveler
was the relevant article of manufacture. During discovery, Systems never

Systems' hydraulic LHP and LHD levelers are essentially the same, but have
different identifying labels on them. (J.A. 5557-58).
1

contended that the "article of manufacture" under 289 was anything other than its
entire infringing levelers. Neither Systems nor its damages expert asserted that the
relevant article of manufacture for purposes of the 289 remedy was anything
other than Systems' entire leveler. Systems' damages expert, Richard Bero,
produced a report in which he calculated Systems' average profit on its infringing
levelers, as a whole, to be $433 per leveler. J.A. 6552, 6593 and 6595. Mr. Bero's
report calculated Systems' profits based only on the entire levelers, not on any
leveler components or combination of components. In calculating Systems' profits
on the accused levelers, Mr. Bero "[a]ssume[d] that Systems has infringed the '754
patent based on its sales of certain dock levelers that contain a particular lip and
hinge plate design." J.A. 6542 (emphasis added). Systems did not request the
district court to find that the "article of manufacture" was anything other than the
entire dock leveler, or restrict discovery to the components forming the front end
of its dock levelers.
Just before trial, Systems submitted its pretrial statement identifying
disputed issues. Dist. Ct. Dkt. 138. None of the items listed by Systems for the
court or jury to determine related to the identity of the infringing article of
manufacture to which the patented design was applied. See generally id. At no time
leading up to trial did Systems suggest that the court or jury should determine what
the article of manufacture was, nor did Systems disclose a damages theory under
289 that calculated damages based on anything other than the infringing levelers,
in their entirety. Systems proposed no jury instruction or verdict question to
determine the article of manufacture. Dist. Ct. Dkt. 139, 158 and 159; see also J.A.
3754, 3823, 4159-64, 4165 and 4210.
During trial, Dr. Smith testified to the same "gross revenue" methodology
delineated in his report to find that Systems' profits under 289 were $912,201 for
the sale of 1,514 infringing levelers. J.A. 6009, 6363 and 6373. Mr. Bero did not
4

rely on his report, but instead gave a slide show presentation advancing a "cost
savings" methodology to assert that Systems' profit on its sale of 1,457 levelers
containing the patented design were minimal. J.A. 6684 and the bottom of 6713.
Toward the end of the trial, the district court held a jury instruction and
verdict conference. Dist. Ct. Dkt. 227. The district court's instructions do not
provide any instruction to determine the article of manufacture under 289. Dist.
Ct. Dkt. 166, Jury Instructions; see also J.A. 4500-50. The instruction for
determining Systems' profit reads in pertinent part as follows:
In this case, Nordock seeks Systems' profits from sales of products
alleged to infringe the '754 Design Patent. If you find infringement,
and do not find the '7 54 Design Patent is invalid, you are to award
Nordock Systems' total profit attributable to the infringement.
Systems' "total profit" means the entire profit on the sale of the article
to which the patented design is applied, or with which it is used and
not just the portion of profit attributable to the design or ornamental
aspects of the patent. ...
Nordock is entitled to all profit earned by Systems that is attributable
to the infringement. Profit is determined by deducting certain
expenses from gross revenue. Gross revenue is all of Systems'
receipts from using the design in the sale of the infringing products.
Nordock has the burden of proving Systems' gross revenue by a
preponderance of the evidence.
Jury Instructions at 41 (emphasis added); see also J.A. 4540. Systems consented to
the 289 instruction provided by the district court, and did not request an
instruction to determine the article of manufacture. Dist. Ct. Dkt. 227, and see
particularly J.A. 6084-86.

Similarly, the district court's verdict form does not provide a question asking
the jury to determine the article of manufacture. J.A. 5402-05. In fact, Question 1,
provided below, lists the LHP and LHD levelers as the accused products:

VERDICT

1. Did Systems inftinge the '754 Design Patent as to any of the following products:

!d. Systems consented to Question 1 of the verdict form, and did not request that

the form include a question for determining that the article of manufacture was
something other than the entire leveler. Dist. Ct. Dkt. 227, see particularly pp. 1922.
The parties then gave closing arguments. Dist. Ct. Dkt. 228. Systems'
counsel never uttered the words "article" or "manufacture" let alone the term
"article of manufacture," and never asked the jury for a finding that the article of
manufacture was something other than the entire dock levelers. He simply stated
the patent design was only for a portion of the entire leveler. Dist. Ct. Dkt. 228; see
also J.A. 6108 and 6122-23.

As shown above, in response to Verdict Question No. 1, the jury found that
Systems' LHP and LHD levelers were infringing products. J.A. 5402. Responsive
to Verdict Question No. 4, the jury found a reasonable royalty to be $46,825, but
found Systems' profits to be $0. J.A. 5404. The district court entered judgment in

Nordock's favor including $46,825in damages for Systems' design patent

infringement. See J.A. 5401-02.
Nordock's post-trial motion and supporting memorandum asserted that, inter
alia, the jury's finding that Systems' profits were $0 was against the manifest

weight of the evidence. Dist. Ct. Dkt. 180 and 181; see also J.A. 5575-89. The
district court rejected that assertion based on Mr. Bero's cost savings methodology
for determining Systems total profits on the infringing levelers and based on an
assertion that a burden of proof instruction obviated the need for a determination of
Systems' profits under 289. Nordock, Inc. v. Sys., Inc., No. 11-cv-118, 2014 WL
3786277, at *4 (E.D. Wis. July 31, 2014); see also J.A. 5-8.
In short, Systems never developed or preserved the issue of determining that
the article of manufacture was anything other than the entire dock leveler. Indeed,
it consented to use the entire dock leveler as the article of manufacture at every
tum in the litigation.
B. Prior Proceedings Before This Court

Nordock appealed, and this Court unanimously reversed and remanded the
case back to the district court for a proper determination of damages. The Court
found that the manifest weight of the credible evidence did not support a verdict
finding that Systems' profits on the sale of at least 1, 457 infringing LHP and LHD
levelers were $0, and rejected Systems' "apportionment" argument as contrary to
289. Nordock, 803 F.3d at 1354-55. The Court found the district court's jury
instruction proper, id. at 1357, but that Mr. Bero's cost saving methodology to
determine Systems' profits was "improper." Id. at 1355. The Court stated that there
were "several problems" with this cost saving methodology, including that it
conflicted with the jury instruction requiring a determination of the gross revenue
of the infringing product as a starting point, and that total profits are based on the

article of manufacture to which the design patent is applied - not just a portion of
the article of manufacture. !d. at 1354. This Court noted that:
Systems' "article of manufacture" arguments also fail in light of the
district court's 289 jury instruction, which correctly stated that
"Systems' 'total profit' means the entire profit on the sale of the
article to which the patented design is applied, or with which it is used
and not just the portion of profit attributable to the design or
ornamental aspects of the patent." Jury Instructions at 41.
!d. Given Systems' failure to develop or preserve the issue regarding the article of

manufacture, this remains the correct conclusion for this Court to reach, and
remams entirely consistent with the Supreme Court's decision in Samsung v.
Apple.
The Court also found that the record revealed that "both the district court
and the jury were confused with respect to the interplay between 284 and 289,"
and stated that "[t]o the extent the district court believed the jury could simply
choose between awarding damages under 284 or 289, it is incorrect." !d. at
1357. Thus, the Court remanded the case to the district court for a determination of
damages. The Court stated that "[o]n remand, the court will have an opportunity to
revisit and restructure its jury instructions on damages consistent with this opinion
so as to provide the jury with a clear and appropriate understanding of its
obligation to determine Systems' profits pursuant to 289." !d.
C. Supreme Court Proceedings

As stated above, the Supreme Court granted Systems' petition for certiorari
and remanded the case to this Court for further proceedings in light of Samsung
Electronics Co. v. Apple, Inc., 137 S. Ct. 429 (2016). GVR Order. Yet, in
Samsung, the Supreme Court declined to "set out a test for identifying the relevant
article of manufacture." 137 S. Ct. at 436. Moreover, the Supreme Court's GVR
Order in the present case did not address whether Systems had preserved the
8

argument that the relevant article of manufacture m this case 1s only some
components of the infringing levelers.
ARGUMENT
I.

THIS COURT SHOULD RETAIN THE CASE, REINSTATE ITS

PRIOR RULINGS, AND FIND THAT SYSTEMS FAILED TO
DEVELOP OR PRESERVE THAT THE ARTICLE OF
MANUFACTURE IS ANYTHING OTHER THAN THE
ENTIRE DOCK LEVELER
This Court should retain jurisdiction, reinstate it prior rulings, and resolve

the issue relating to the article of manufacture. This Court can and should find that
Systems failed to develop or preserve its present assertion that the "article of
manufacture" for this case is something other than the entire leveler. This will
avoid a need to set forth a test for identifying the relevant article of manufacture in
this case, and allow the Court to do so in a case in which the issue has been
developed and preserved.
A. It Was Undisputed During Discovery And At Trial That The
Relevant "Article Of Manufacture" Was The Infringing Dock
Leveler In Its Entirety

Throughout this case, Nordock has sought damages under 289 based on
Systems' profits from its infringing levelers. See supra, pp. 2-7. Both before and
during trial, Nordock's damages expert calculated Systems' "total profit" under
289 based on the entire leveler. See supra, p. 3. Thus, Systems was plainly aware
of Nordock's contention that the entire leveler was the relevant article of
manufacture.
During discovery, Systems did not contend that the article of manufacture
was anything other than its entire infringing levelers. Systems' damages expert,
Mr. Bero, calculated Systems' profits using only the entire leveler, not any
component of the levelers, as the article of manufacture. See supra, p. 4. In his

expert report, Mr. Bero calculated Systems' profit to be $433 per LHP and LHD
leveler. J.A. 6552, 6593 and 6595.
At trial, Systems presented no witness to testify that the article of
manufacture was limited to any particular leveler components, and it made no such
argument to the jury. Systems' counsel never mentioned the phrase "article of
manufacture" to the jury. The term is glaringly absent from his closing arguments.
In fact, Systems' vice president of sales and marketing testified that the levelers are
sold as a "unit," such as a hydraulic unit, air unit, mechanical unit or competing
unit. J.A. 5854, 5897, 5899, 5905, 5914 and 5920. Systems' counsel even referred
to its levelers as "units" at trial. J.A. 5889 and 5892. Systems' brochures plainly
show the entire leveler. J.A. 6193-94 and 6200-01. The earliest and only time
Systems attempted to assert that the article of manufacture was something other
than the entire leveler came toward the end of Mr. Bero' s slide show presentation
during his improper "cost savings" methodology asserting Systems had minimal
profits. 2 This Court properly categorized Mr. Bero' s "cost savings" methodology
as "improper," discounted the district court's reliance on it as error, and stated that
"[t]his testimony confused and misled both the district court and the jury."

Nordock, 803 F.3d at 1354-55. Thus, the record contains no evidence of total profit
from the leveler components that Systems now claims make up the relevant article
of manufacture. That is because Mr. Bero's report only calculated Systems' total
profit on the entire levelers. See supra, p. 4 and J.A. 6552, 6593 and 6595. Systems
did not call any design expert to identify the relevant articles of manufacture for
the jury. Nor did Systems use any other witness to identify the relevant articles of
manufacture as something less than the complete leveler. In short, the record
2Even

Systems' own damages expert admitted that the article of manufacture can
be the entire leveler. Mr. Bero testified, "you can certainly interpret the article to
be the dock leveler." Dist. Ct. Dkt. 178 (emphasis added); see also J.A. 5497.
10

contains no basis on which the jury could calculate total profit under 289 on any
"article of manufacture" other than the entire leveler.
Systems was not precluded from offering a damages calculation in this case
based on the theory that the relevant article of manufacture was something less
than the entire leveler; it simply chose not to. For example, Mr. Bero could have
provided such a calculation in his expert report. He did not.
In light of the record and Systems' failure to develop any evidence from
which the jury could have calculated infringer's profits on anything other than its
entire leveler, this Court can and should find that Systems failed to develop and
preserve its present contention that the article of manufacture is anything other
than the entire leveler, that the record is clear that the article of manufacture is the
entire leveler, and remand for a proper determination of damages based on the
article of manufacture being a dock leveler.
B. Systems Waived Its Right To Challenge That Its Total Profits
For Its Infringing Dock Levelers Is Based On Less Than The
Entire Leveler
Systems' petition for certiorari challenges this Court's determination that
Systems' profits under 289 should be based on the infringing LHP/LHD levelers.
Yet, Systems' petition fails to mention that it repeatedly proposed the language in
the 289 jury instruction that it now contests, which instructs that the infringing
products- the dock levelers- are the basis for determining damages under 289
and lacks any reference to any other relevant article of manufacture. Systems' two
proposed 289 instructions as well as the district court's 289 instruction, to
which Systems consented, all properly state that"[g]ross revenue is all of Systems'
receipts from using the design in the sale of the infringing products." Jury
Instructions (emphasis added); see also J. A. 3823, 4210, 4540; see also supra, pp.
4-5. Systems' petition also fails to mention that it never requested the district court
11

submit a jury instruction to determine whether or not the "article of manufacture"

was something other than the entire leveler. Dist. Ct. Dkt. 139, 158 and 159; see
also J.A. 3754, 3823, 4159-64, 4165 and 4210.
Systems' petition does not contest that the LHP/LHD levelers are the
infringing products. Nor can it. Question 1of Systems' proposed verdict form and
the district court's verdict form explicitly list the LHP and LHD levelers as the
asserted infringing products. J.A. 4159-60 and 5402; see also supra, p.6.
Moreover, Systems was given ample opportunity to state any objection it had to
the language in Question 1. It did not. J.A. 6073, 6089-91. Systems was also given
ample opportunity to request a verdict question to determine whether or not the
"article of manufacture" was something other than the entire leveler. It did not.
Dist. Ct. Dkt. 227; see also supra, p.5.
Thus, even assuming arguendo, that the "article of manufacture" is limited
to the front end portion of the leveler, Systems' proposed jury instruction clearly
states that its total profits are to be determined using a "gross revenue"
methodology based on "all of Systems' receipts" from using the design in the sale
of the "infringing products." See supra, p.5. The instruction plainly states that
profits are based on all of Systems' receipts from the sale of the "infringing
products," and the verdict plainly lists the infringing products as the LHP and LHD
levelers.
Even if Systems had requested and the district court had given an instruction
regarding the article of manufacture (though they did not), Systems cannot show
any resulting prejudice. "Prejudicial error exists if the outcome of the case would
have been different had the correct instruction been given." Sulzer Textil A. G. v.
Picanol NV, 358 F.3d 1356, 1367 (Fed. Cir. 2004). Systems did not request and
the district court did not propose any such instruction after the close of evidence
when the court finalized the jury instructions. Systems never argued to the jury that
12

anything other than the entire leveler was the article of manufacture, and the only
credible damages evidence presented to the jury calculated total profits based on
the entire infringing levelers. See supra, pp. 4-7. Therefore, the jury could only
award the total profit on Systems' levelers as a whole, even if the jury had been
asked to decide the issue.
Systems' petition fails to mention the jury instruction conference. Dist. Ct.
Dkt. 227. The record shows that Systems never asked the district court to adopt
language stating that Systems' profits should be limited to an article of
manufacture that was only a portion of the infringing products. J.A. 6084-86.
Instead, Systems' counsel requested the following sentence for the 289
instruction: "[I]f you find infringement, Systems shall be liable to Nordock to the
extent of Systems' total profit, but not less than $250." J.A. 6084. Nordock's
counsel then referred to the model instruction. Systems' counsel responded "Fair
enough," then proposed the following sentence: "Nordock is entitled to all profit
earned by Systems that is attributable to the infringement." J.A. 6085. The district
court adopted Systems' counsel's language, and Systems' counsel consented to this
language by responding: "Yes, Your Honor." J.A. 6085. Thus, the record shows
that even at this late date Systems had ample opportunity to propose alternate
language, but instead, consented to the language submitted to the jury.
As the Supreme Court and the Seventh Circuit have repeatedly stated, a
party may not propose a jury instruction and then after the conclusion of the trial
object to that instruction. The Supreme Court has stated, "[t]here would be
considerable prudential objection to reversing a judgment because of instructions
that petitioner accepted, and indeed itself requested." City of Springfield v. Kibbe,
480 U.S. 257, 259 (1987). The Seventh Circuit has held that an appellant cannot
challenge a jury instruction that it supported, stating, "[i]n a civil case, a litigant
may not attack an instruction of which he was the proponent." Sanchez v. City of
13

Chi., 700 F.3d 919, 925 (7th Cir. 2012) (quoting Williams v. Boles, 841 F.2d 181,
184 (7th Cir. 1988)). "The right to object to jury instructions is waived if the record
illustrates that the defendant approved of the instructions at issue." United States v.

Perez, 612 F.3d 879, 883 (7th Cir. 2010). Furthermore, "[i]n civil cases, a plaintiff
who merely fails to object to a faulty instruction (much less, a plaintiff who tenders
one) must live with the effect of that instruction." Gong v. Hirsch,913 F.2d 1269,
1277 (7th Cir. 1990).
Thus, the record establishes that Systems waived any right to challenge that
the article of manufacture is anything other than the entire leveler because it was
not developed or preserved before the district court.
II.

THIS COURT MAY REINSTATE ITS PRIOR RULINGS AND

REMAND THE CASE TO THE DISTRICT COURT FOR A
DETERMINATION OF DAMAGES WITH A FINDING THAT
SYSTEMS FAILED TO DEVELOP OR PRESERVE THAT THE
ARTICLE OF MANUFACTURE IS SOMETHING OTHER THAN
THE ENTIRE DOCK LEVELER WITHOUT ADDITIONAL
BRIEFING OR ARGUMENT

Almost four years have passed since the jury's original verdict. Nordock
submits that this Court should reinstate its prior decisions: a) finding that the
district court erred in denying Nordock's motion for a new trial to assess damages
pursuant to 35 U.S.C. 289, b) vacating the jury's damages award and remanding
for a new trial on damages, and c) affirming its denial of Systems' motion for
JMOL as to validity ofNordock's 'D754 Patent and denying Systems' Rule 59(e)
motion regarding the infringement of Systems' 6

~foot

dock levelers. In addition,

as Systems did not develop or preserve at trial its assertion that the "article of
manufacture" is something other than the entire dock leveler, Nordock requests
that the Court find that the "article of manufacture" is the entire dock leveler.
Should the Court request further briefing, however, Nordock proposes the
following schedule: Nordock files an opening brief within 21 days of the Court's
14

order, Systems files a responsive brief within 21 days ofNordock's opening brief,
and Nordock files a reply brief within 14 days of Systems' brief. This schedule
would allow the Court to resolve the appeal quickly and efficiently.
CONCLUSION

For the foregoing reasons, this Court should retain the case, reinstate its
previous rulings, and based on the record of this case, rule that the "article of
manufacture" for determining Systems' total profits under 289 is the entire dock
leveler.
Dated this 12th day of January, 2017.
SOKOL LAW OFFICE
Counsel for Plaintiff, Nordock, Inc.

Is/Jeffrey S. Sokol
JeffreyS. Sokol
P.O. ADDRESS:
828 North Broadway
Milwaukee, WI 53202
414.272.7200 (telephone)

15

ADDENDUM

Supreme Court of the United States

Office of the Clerk
Washington, DC 20543-0001
December 12, 2016

Scott S. Harris
Clerk of the Court
(202) 479-3011

Mr. JeffreyS. Sokol

Sokol Law Office
828 North Broadway, Suite 400
Milwaukee, WI 53202
Re: Systems, Inc.
v. N ordock, Inc.
No. 15-978

Dear Mr. Sokol:

The Court today entered the following order in the above-entitled case:
The petition for a writ of certiorari is granted. The judgment is
vacated, and the case is remanded to the United States Court of Appeals for
the Federal Circuit for further consideration in light of Samsung Electronics
Co. v. Apple, Inc., 580 U. S. __ (2016).

The judgment or mandate of this Court will not issu~ for at l~ast
twenty-five days pursuant to Rule 45. Should a petition for rehearing be filed
timely, the judgment or mandate will be further stayed pending this Court's
action on the petition for rehearing.
Sincerely,

Scott S. Harris, Clerk

No.15IN THE

~upr.em.e

C!rnurt nf tft.e Nnit.eb ~tat.es

SYSTEMS, INC.,
Petitioner,
v.

NORDOCK INC.,
Respondent.
ON PETITION FOR AWRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

JOHN WHITAKER
WHITAKER LAW GROUP
1218 Third Avenue, Suite 1809
Seattle, Washington 98101
(206) 436-8500

john@whitaker.law

PHILIP P. MANN
Counsel of Record
TIMOTHY J. BILLICK
MANN LAW GROUP
1218 Third Avenue, Suite 1809
Seattle, Washington 98101
(206) 436-0900

DAVID A. AFFELDT
AFFELDT LAW OFFICES, S.C.
8741 W. National Avenue
West Allis, WI 53227

phil@mannlawgroup.com
tim@mannlawgroup.com

414-321-4560

david.affeldt@affeldtlaw.com
Counsel for Petitioner
January 28,2016
263910
COUNSEL PRESS

(800) 274-3321 (800) 359-6859

QUESTIONS PRESENTED

In the case below, the Federal Circuit, relying on its

recent decision in Apple v. Samsung (petition for writ of
certiorari pending), set aside a jury verdict in Petitioner's
favor and held that, under 35 U.S.C. 289, design patent
damages should be based on profits attributable to an
entire apparatus rather than the actual portion of that
apparatus to which the design is applied.
The questions presented are:
1. Where a patented design is applied to only a
component of a product, should an award of infringer's
profits be limited to those profits attributable to the
component?
2. Is the Federal Circuit's interpretation and
application of 35 U.S.C. 289 inconsistent with this Court's
prior precedent?

PARTIES TO THE PROCEEDING

Petitioner is Systems, Inc., which was the defendant in

the District Court and was the Appellee/Cross-Appellant
in the Court of Appeals. 1
Respondent is Nordock, Inc., which was plaintiff in
the District Court and was the Appellant/Cross-Appellee
in the Court of Appeals.

1. The Federal Circuit caption also lists aliases for Systems,

Inc. including Poweramp, DLM, Inc., and McGuire. Those aliases
refer only to Systems, Inc. and do not identify any other party.

RULE 29.6 DISCLOSURE

Pursuant to Supreme Court Rule 29.6, Petitioner

Systems, Inc. states that it does not have a parent
corporation and that no publicly held corporation owns
10% or more of its stock.

TABLE OF CONTENTS
Page

QUESTIONS PRESENTED ...................... i

PARTIES TO THE PROCEEDING ............... ii
RULE 29.6 DISCLOSURE ....................... iii
TABLE OF CONTENTS ......................... iv
TABLE OF APPENDICES ...................... vi
TABLE OF CITED AUTHORITIES ............. vii
PETITION FOR A WRIT OF CERTIORARI. ....... 1
OPINIONS BELOW .............................. 1
BASIS FOR JURISDICTION ..................... 2
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED ..................... 2
STATEMENT OF THE CASE .................... 3
A. DISCUSSION OF THE DESIGN PATENT
DAMAGES STATUTE ..................... 3
B. THE PARTIES AND THE "DOCK
LEVELER" INDUSTRY ................... 5
C.

NORDOCK'S DESIGN PATENT ............ 6

D. PROCEDURAL HISTORY ................. 7

v
Table of Contents
Page
REASONS FOR GRANTING THE PETITION ...... 9
A. THE FEDERAL CIRCUIT' S
INTERPRETATION OF SECTION 289
ELIMINATES ANY MEANINGFUL
CAUSATION REQUIREMENT ............. 9
B. THE FEDERAL CIRCUIT'S
INTERPRETATION OF SECTION
289 TRANSFORMS IT INTO A
PUNITIVE STATUTE DEVOID OF
ANY STANDARD OF CULPABILITY ...... 10
C.

THE FEDERAL CIRCUIT'S

INTERPRETATION OF SECTION
289 IMPROPERLY AWARDS
DESIGN PATENT OWNERS
DAMAGES ON ARTICLES THAT
WERE DISCLAIMED .................... 13

D. THE FEDERAL CIRCUIT'S

ERROR IS HAVING A VERY REAL
AND ACCELERATING IMPACT
ON DESIGN PATENT LITIGATION ....... 15
E. THE PETITION SHOULD BE
GRANTED TO PROVIDE GUIDANCE
REGARDING THE PROPER
"ARTICLE OF MANUFACTURE" ......... 18
CONCLUSION ................................. 21

TABLE OF APPENDICES
Page

APPENDIX A - OPINION OF THE

UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT, FILED
SEPTEMBER 29, 2015 ........................ la
APPENDIX B - DECISION AND ORDER
OF THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT
OF WISCONSIN, FILED JULY 31, 2014 ....... 37a
APPENDIX C- STATUTORY PROVISIONS .... 56a

vn
TABLE OF CITED AUTHORITIES

Page

CASES
Apple, Inc. v. Samsung Electronics Co.,
786 F.3d 983 (Fed. Cir. 2015) .............. passim

Aro Mfg. Co. v. Convertible Top Replacement Co.,

377 u.s. 476 (1964) ......................... 10-11

Bush & Lane Piano Co. v. Becker Bros.,

222 F. 902 (2d Cir. 1915) ....................... 19

Bush & Lane Piano Co. v. Becker Bros.,

234 F. 79 (2d Cir. 1916) .......................... 9

Crawford v. Heysinger,
123 U.S. 589, 8 S. Ct. 399, 31 L. Ed. 269 (1887) .... 14

Dowling v. United States,

473 u.s. 207 (1985) ............................ 11

Fla. Prepaid Postsecondary Educ. Expense Bd.

v. Call. Sav. Bank,

527 u.s. 627 (1999) ............................ 11

General Motors Corp. v. Devex Corp.,

461

u.s. 648 (1983) ............................ 10

Goodyear Dental Vulcanite Co. v. Davis,

102 u.s. 222 (1880) ............................ 13

Cited Authorities
Page
InreBlum,
374 F.2d 904 (CCPA 1967) ....................... 7

Microsoft Corporation v. Corel Corporation,

Case 5:15-cv-05836 (CAND) .................... 16

Nike, Inc. v. Wal-Mart Stores, Inc.,

138 F.3d 1437 (Fed. Cir. 1998) ............. .4, 11, 12

Pacific Coast Marine Windshields, Ltd. v.

Malibu Boats, LLC et al.,
6:12-cv-00033 (FLMD) ........................ 15

Panduit Corp. v. Stahlin Bros. Fibre Works, Inc.,

575 F.2d 1152 (6th Cir. 1978) ..................... 3

Read Corp. v. Portee, Inc.,

970 F.2d 816 (Fed. Cir. 1992) .................... 11

ResQNet.com, Inc. v. Lansa, Inc.,

594 F.3d 860 (Fed. Cir. 2010) .................... 9

Rite-Hite Corp. v. Kelley Co.,

56 F.3d 1538 (Fed. Cir. 1995) .................... 9

Seymour v. McCormick,
57 U.S. (16 How.) 480 (1854) .................... 10

Stearns v. Tinker & Rasor,

252 F.2d 589 (9th Cir. 1957) .................... 13

Cited Authorities
Page
VirnetX, Inc. v. Cisco Sys., Inc.,
767 F.3d 1308 (Fed. Cir. 2014) ................ 19, 20

STATUTES AND OTHER AUTHORITIES

U.S. Constitution art. I, 8, cl. 8 .................... 2
28 u.s.c. 1254(1) ................................ 2
35 u.s.c. 101 ................................... 3
35 u.s.c. 171 ................................... 3
35 U.S.C. 284 ............................. passim
35 U.S.C. 289 ............................. passim
Act of Aug. 1, 1946, ch. 726, Pub. L. No. 79-587,
60 Stat. 778 ................................... 4
Act of 1887, 24 Stat. 387 ....................... 11, 12

1
PETITION FOR A WRIT OF CERTIORARI

Systems, Inc. ("Systems") petitions this Court for a

writ of certiorari to the Federal Circuit Court of Appeals
correcting the Federal Circuit's erroneous interpretation
of 35 U.S.C. 289 ("Section 289"). The instant matter
raises a nearly identical issue as that presented in Apple,
Inc. v. Samsung Electronics Co., 786 F.3d 983 (Fed. Cir.
2015), for which Samsung Electronics recently filed its own
petition for writ of certiorari. See Samsung Electronics
Co. v. Apple, Inc., Petition for Writ of Certiorari No. 15777 (currently pending).
The Federal Circuit has created an erroneous legal
standard for determining the damages that can be
awarded for infringement of a design patent. Under that
standard, damages are defined as the total profit of an
entire accused product even though the patented design
is only applied to a small, insignificant portion of that
product. The Federal Circuit's interpretation of Section
289 should be reviewed to correct an error of law that
is resulting in exorbitant and unjust damage awards in
design patent cases.
OPINIONS BELOW

The opinion of the U.S. Court Of Appeals for the

Federal Circuit is reproduced at App. 1a - App. 36a.
The U.S. District Court's order denying Respondent's
post-trial motion regarding design patent damages is
reproduced at App. 37a - App. 55a.

2
BASIS FOR JURISDICTION

The judgment of the Court of Appeals was entered

on September 29, 2015. On December 16, 2015, the Chief
Justice extended the time within which to file a petition
for a writ of certiorari to and including Thursday, January
28, 2016. This Court's jurisdiction is invoked under 28
u.s.c. 1254(1).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED

U.S. Constitution art. I, 8, cl. 8 provides in pertinent

part that:
The Congress shall have Power ... To promote
the Progress of Science and useful Arts, by
securing for limited Times to Authors and
Inventors the exclusive Right to their respective
Writings and Discoveries.
The additional remedy for infringement of design
patent statute is 35 U.S.C. 289, set out below in its
entirety:
Whoever during the term of a patent for a
design, without license of the owner, (1) applies
the patented design, or any colorable imitation
thereof, to any article of manufacture for the
purpose of sale, or (2) sells or exposes for sale
any article of manufacture to which such design
or colorable imitation has been applied shall
be liable to the owner to the extent of his total
profit, but not less than $250, recoverable in any

United States district court having jurisdiction

of the parties.
Nothing in this section shall prevent, lessen, or
impeach any other remedy which an owner of
an infringed patent has under the provisions
of this title, but he shall not twice recover the
profit made from the infringement.
STATEMENT OF THE CASE

The underlying action is a design patent dispute

between two competitors in the "dock leveler" industry.
A. DISCUSSION OF THE DESIGN PATENT
DAMAGES STATUTE

This Court is undoubtedly familiar with "utility

patents," which are available for "any new and useful
process, machine, manufacture, or composition of matter,
or any new and useful improvement thereof." 35 U.S.C.
101 (emphasis added). In contrast, design patents are
available for "any new, original and ornamental design
for an article of manufacture." 35 U.S.C. 171 (emphasis
added).
All patent owners - for utility and design patents
alike- may recover "damages adequate to compensate for
the infringement" under 35 U.S. C. 284 ("Section 284").
Damage awards under Section 284 today are generally
either lost profits of the patent owner or a reasonable
royalty. See Panduit Corp. v. Stahlin Bros. Fibre Works,
Inc., 575 F.2d 1152, 1157 (6th Cir. 1978) ("When actual
damages, e.g., lost profits, cannot be proved, the patent

owner is entitled to a reasonable royalty."). Historically,

damage awards of "infringer's profits" were equally
available to both design patent owners as well as utility
patent owners. See Nike, Inc. v. Wal-Mart Stores, Inc.,
138 F.3d 1437, 1441 (Fed. Cir.1998)(recounting the history
of infringer's profits in the patent context). Congress
eliminated infringer's profits as a remedy under the
precursor to Section 284 (the sole damages remedy for
utility patents) in 1946. See Act of Aug. 1, 1946, ch. 726,
Pub. L. No. 79-587, 60 Stat. 778. However, Congress
maintained infringer's profits as an additional remedy
for design patent infringement, which exists today as 35
U.S. C. 289. Section 289 today provides:
Whoever during the term of a patent for
a design, without license of the owner ...
applies the patented design ... to any article of
manufacture ... shall be liable to the owner to
the extent of his total profit, but not less than
$250 ....
Nothing in this section shall prevent, lessen, or
impeach any other remedy which an owner of
an infringed patent has under the provisions
of this title, but he shall not twice recover the
profit made from the infringement.
The statute does not define what constitutes "an
article of manufacture."
Accordingly, infringer's profits had been a component
of damages for infringement of both utility patents as well
as design patents from inception until about 1946. Today,
however, infringer's profits are available only for design
patents, and only under Section 289.

5
B. THE PARTIES AND THE "DOCK LEVELER"
INDUSTRY

Petitioner Systems, Inc. is a Wisconsin corporation

engaged in the business of building and selling so-called
"dock levelers." Respondent Nordock, Inc. ("Nordock")
is a Canadian company competing in the same industry.
A dock leveler is a large mechanical component used
to bridge the gap between a delivery truck and a loading
dock of a building. Set forth below is a representation of a
dock leveler as it would be sold or viewed in a showroom.
The device is typically installed into a sunken cavity
formed in a loading dock of a building. After a delivery
truck backs up to the loading dock, the dock leveler is
raised slightly (as illustrated above) and the lip portion
is extended. Then the entire device lowers gradually
until the lip portion engages the truck and creates a
relatively flat bridge from the loading dock into the back
of the delivery truck, thereby facilitating the loading and
unloading of the truck.

It should be appreciated that the entire dock leveler

is a large and complex device that is almost exclusively
functional in every respect. In addition, the lip portion
that extends from the front constitutes a relatively minor
component of the overall dock leveler.

C. NORDOCK'S DESIGN PATENT

Nordock, Respondent in the instant matter, has

secured several patents for its line of dock levelers. Most
of Nordock's patents are utility patents. However, Nordock
also obtained one design patent on what Nordock referred
to as its "Lip and Hinge Plate for a Dock Leveler"- U.S.
Design Patent D579,754 ("the 'D754" patent). Set out
below is a reproduction of Figure 1 of the 'D754 patent
showing a perspective view of Nordock's claimed design.

7
Only one embodiment is shown in the several figures
of the 'D754 patent. Indeed, in all the figures, everything
except the "lip and hinge plate" is shown in broken line,
which generally means it forms no part of the claimed
invention. See, e.g., In re Blum, 374 F.2d 904, 907 (CCPA
1967). In fact, N ordock expressly stated that "The
deck and deck frame shown in broken lines in FIGS. 1
and 3-7, the drive brackets shown in FIGS. 1-5, the
drive bar opening shown in FIGS. 1-3, and the assist
spring mounting bracket shown in FIG. 1 represent
environmental structure in order to show the claim in a
condition of use and form no part of the claimed design."
See 'D754 at page 1 (emphasis added). Accordingly, by
N ordock's own admission, nothing except the "lip and
hinge plate" is a part of the design, and N ordock expressly
disclaimed everything else.

D. PROCEDURAL HISTORY
In 2011, Nordock sued Systems for infringement of
its 'D754 patent in the Eastern District of Wisconsin.
See Nordock, Inc. v. Systems, Inc., Case No. 2:11-cv-118
(WIED). Nordock accused six models of Systems' dock
levelers: three "hydraulic" models and three "mechanical"
models in various sizes and configurations. After two
years of litigation, the parties conducted a jury trial in
March of 2013. At the conclusion of the trial, the jury found
that Systems' "mechanical" dock levelers did not infringe
Nordock's design patent, but that certain "hydraulic" dock
levelers did infringe.
During the trial, Systems' damages expert testified
that Systems' profits on the "front end" (the "lip and hinge
plate") of the infringing dock levelers would be no greater

than $46,825. Systems' expert testified that he calculated

profits on only the "front end" of the dock leveler because,
as shown supra, only the "front end" of the dock leveler
was claimed and Nordock itself had disclaimed everything
else.
The jury awarded $46,825 as the total amount of
money Nordock was to receive for the infringement. In
post-trial motions, Nordock asked the District Court to
enhance the jury's award to more than $600,000 because
that amount more closely represented Systems' total profit
on the entire dock leveler. The District Court denied that
motion and concluded that the evidence supported the
jury's findings. See App. 37a- App. 55a. Nordock appealed
to the Federal Circuit.
While Nordock's appeal of this matter was pending,
the Federal Circuit decided Apple, Inc. v. Samsung
Electronics Co., 786 F.3d 983 (Fed. Cir. 2015) which
involved a similar design patent damages issue. In that
decision, the Federal Circuit held that the "total profits"
of the entire accused product - regardless of how much
or little of the product embodied the claimed design - is
the appropriate measure of damages. Apple v. Samsung,
786 F.3d at 1002.
Relying on its recent Apple v. Samsung decision,
the Federal Circuit vacated the jury's findings in the
instant action and remanded the matter for a new trial
on damages. In particular, the Federal Circuit found that
the jury should have awarded Systems' total profits on the
entire dock leveler rather than only the profit attributable
to the infringement, i.e., the profits on the claimed "front
end" design. In so doing, the Federal Circuit applied

the same erroneous interpretation of Section 289 it had

applied in the Apple v. Samsung case. App. 20a- App. 21a.
REASONS FOR GRANTING THE PETITION
This petition should be granted so that this Court can
review the Federal Circuit's erroneous interpretation of
Section 289 set out in Apple v. Samsung. The Federal
Circuit's erroneous interpretation opens the door for
exorbitant, unjust damages to be awarded for design patent
infringement, and appears to contradict over a century
of established jurisprudence. In doing so, the Federal
Circuit has created a damages model completely devoid
of the safeguards developed for damages recoverable
under Section 284, and the safeguards Congress added
to Section 289 in 1952. The Federal Circuit's erroneous
interpretation has resulted in a foot race to the courthouse
with design patent holders seeking exorbitant windfalls
that in some cases offend all notions of substantial justice.
A. THE FEDERAL CIRCUIT'S INTERPRETATION
OF SECTION 289 ELIMINATES ANY
MEANINGFUL CAUSATION REQUIREMENT
The law of patent infringement - as with tort law
in general - has always required some causal nexus
between patent infringement and damages recoverable
for that infringement. See Rite-Hite Corp. v. Kelley Co.,
56 F.3d 1538, 1545 (Fed. Cir. 1995) (en bane) (lost profits);
ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed.
Cir. 2010) (per curiam) (reasonable royalty); c.f., Bush &
Lane Piano Co. v. Becker Bros., 234 F. 79, 81-82 (2d Cir.
1916).

10
Although Section 289 today is undeniably directed
at recovering infringer's profits, nothing about that
statute suggests the measure of damages can be totally
unrelated to the injury actually suffered as a result of
the infringement. Rather, the language of Section 289
entitles the patent owner to "the profit made from the
infringement," which at least implies that some nexus
exists between the infringement and the profits as a
measure of damages.
Systems will not belabor the discussion of the law
regarding causation which has been more than adequately
set out in the co-pending petition for writ of certiorari to
this Court filed by Samsung Electronics. See, Samsung
Brief at pp. 32-35, Samsung v. Apple, Petition No. 15-777.
The Federal Circuit's misinterpretation of Section 289
eliminates the causal connection that should be present
to establish any manner of compensatory damages.
B. THE FEDERAL CIRCUIT'S INTERPRETATION
OF SECTION 289 TRANSFORMS IT INTO
A PUNITIVE STATUTE DEVOID OF ANY
STANDARD OF CULPABILITY
The Patent Act and relevant jurisprudence limit
recovery for patent infringement under 35 U.S. C. 284 to
compensatory damages, namely those actually incurred
due to the infringement. See General Motors Corp. v.
Devex Corp., 461 U.S. 648 (1983). Congress and the courts
have consistently agreed that in order to recover more
than compensatory damages for patent infringement,
some measure of willfulness on the part of the infringer
must be present. See Seymour v. McCormick, 57 U.S.
(16 How.) 480 (1854); Aro Mfg. Co. v. Convertible Top

11

Replacement Co., 377 U.S. 476, 508 (1964); Dowling v.

United States, 473 U.S. 207, 227 n.19 (1985); Fla. Prepaid
Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527
U.S. 627, 663 n.15 (1999) (Stevens, J., dissenting) (quoting
Read Corp. v. Portee, Inc., 970 F.2d 816, 826 (Fed. Cir.
1992)). In short, damages for patent infringement are
limited to compensatory or "actual" damages unless the
infringer acted with the requisite level of willful intent.
And even if the infringement is willful, the patent owner
may only recover at most three times actual damages.
See 35 U.S.C. 284.
There is no rational basis for declining to apply the
same standard for enhanced damages to Section 289 that
undeniably applies to Section 284. Indeed, the history
of Section 289 suggests exactly the opposite. More
specifically, the history of Section 289 was discussed at
length by the Federal Circuit in Nike, Inc. v. Wal-Mart
Stores, Inc., 138 F.3d 1437, 1441 (Fed. Cir. 1998). In that
case, the Federal Circuit noted that the predecessor
to Section 289 was enacted by the Act of 1887, 24 Stat.
387. Section 1 of the Act of 1887 did indeed establish
that infringer's profits were a measure of damages for
design patent infringement. Nike v. Wal-Mart, 138 F.3d
at 1441. However, as enacted in 1887, infringer's profits
were only available from an infringer "knowing that the
[design] has been so applied" to an article of manufacture.
Nike v. Wal-Mart, 138 F.3d at 1441 (quoting Section 1 of
the Act of 1887)(emphasis added). In other words, the
remedy available under what is now Section 289 was only
available for willful infringement. Under that standard,
the possibility of any damages being available under the
precursor to Section 289 aligns with the requirement
that the infringement be "knowing," exactly as it does

12
today under Section 284. In other words, to the extent
the precursor to Section 289 was intended to eliminate
apportionment from the damages calculation for design
patent infringement, it was only intended to do so in the
context of willful infringement.
The design patent damages statute was not amended
again until the Patent Act was codified under Title 35 in
1952. Nike v. Wal-Mart, 138 F.3d at 1442. When amended
in 1952, the words "knowing that the same has been so
applied" were omitted, thus transforming the damages
statute from one requiring willful conduct into an innocent
infringement scenario. In Nike, the Federal Circuit
acknowledged that there is no apparent explanation for
the deletion of the "knowing" phrase. Nike v. Wal-Mart,
138 F.3d at 1442. Nonetheless, the language was omitted
thereby eliminating any intent element from the additional
remedy for design patent damages.
Common sense suggests that to the extent the 1887
precursor to Section 289 authorized some heightened level
of damages, it was tempered by the requirement that the
infringement be "knowing" or willful. The elimination of
any intent element from the statute in 1952 compels the
conclusion that enhanced or exemplary damages should
not be available under Section 289 today.
In addition, the 1952 amendments to Section 289 also
added new language that the patent holder "shall not twice
recover the profit made from the infringement." Compare
Act of 1887, 24 Stat. 387 with 35 U.S.C. 289. This new
language would be meaningless if it were not intended as
some form of cap on the damages that could be awarded
under Section 289.

13
Taken in tandem, the two substantive amendments
made to the language of Section 289- that the "knowing"
requirement was eliminated and that the "shall not twice
recover the profit" limitation was added - indicate the
intent of Congress that damage awards under Section 289
must bear a rational relationship to the actual damages
attributable to the infringement.
In short, the evolution of Section 289leads to only one
proper conclusion: To the extent an additional remedy for
infringement of a design patent is available, care should
be taken that such a remedy is compensatory in nature
and not punitive. However, and as demonstrated below,
in the instant case and many others, damage awards
using the Federal Circuit's interpretation of Section 289
are undeniably punitive. In most cases, damages awards
drastically exceed any actual damage resulting from the
infringement. The Federal Circuit's interpretation of
Section 289 results in a mechanical award of defendant's
"total profits" regardless of whether those profits bear any
relation to the actual injury suffered by the patent holder.
C. THE FEDERAL CIRCUIT'S INTERPRETATION
OF SECTION 289 IMPROPERLY AWARDS
DESIGN PATENT OWNERS DAMAGES ON
ARTICLES THAT WERE DISCLAIMED

"It is axiomatic that only a claim of a patent can

be infringed." Stearns v. Tinker & Rasor, 252 F.2d
589, 596 (9th Cir. 1957). It is also long established that
a clear disclaimer of claim scope takes the disclaimed
subject matter outside the scope of the patent. See, e.g.,
Goodyear Dental Vulcanite Co. v. Davis, 102 U.S. 222,
227 (1880)("[W]hen a patent bears on its face a particular

14
construction, inasmuch as the specification and claim are
in the words of the patentee, it is reasonable to hold that
such a construction may be confirmed by what the patentee
said when he was making his application."); cj., Crawford
v. Heysinger, 123 U.S. 589, 602-04, 8 S.Ct. 399, 31 L.Ed.
269 (1887). Accordingly, under established law, disclaimed
subject matter cannot contribute to patent infringement.
In the instant case - as in many other design patent
cases - the Federal Circuit's interpretation of Section
289, would entitle Nordock to Systems' total profits on
its entire dock leveler even though Nordock expressly
disclaimed everything except the "front end." But by
illustrating everything in dashed lines except the lip and
hinge plate, Nordock expressly dedicated to the public
everything except the "lip and hinge plate." See, supra,
Statement of the Case, Section B. And as shown below,
the contributions of a "lip and hinge plate" to an entire
dock leveler are minimal. Below is a side-by-side view of
an entire dock leveler next to Nordock's claimed "lip and
hinge plate."

15
Again, in the instant action, the testimony at trial
was that the total profits of the claimed "lip and hinge
plate" was only about $46,825 while the total profits on
the entire dock leveler were between $630,000 and about
$900,000. In other words, the "profit made from the
infringement" was about $46,825; yet under the Federal
Circuit's interpretation of Section 289, Systems stands
to be punished to the extent of at least thirteen times
that amount. 35 U.S.C. 289 (emphasis added). There is
no evidence that Congress intended this result when it
enacted Section 289.
The injustice of such a result is especially disturbing in
view of the safeguards that were introduced into Section
289 by Congress in 1952 as discussed above.
D. THE FEDERAL CIRCUIT'S ERROR IS HAVING
A VERY REAL AND ACCELERATING IMPACT
ON DESIGN PATENT LITIGATION
The Federal Circuit's interpretation of Section 289
damage awards has created an environment where design
patent owners are hurrying to cash in on the exorbitant
damages now made available. Neither the Apple v.
Samsung case nor the instant case are unique. Several
other recent design patent defendants are suffering from
the same injustice as both Systems and Samsung.
For example, the Pacific Coast Marine Windshields
v. Malibu Boats case illustrates how district courts have
applied the Federal Circuit's draconian interpretation
of Section 289 to reach unjust results. See, Pacific Coast
Marine Windshields, Ltd. v. Malibu Boats, LLC et al.,
6:12-cv-00033 (FLMD). In Pacific Coast, plaintiff owned

16
a design patent covering only a windshield design for a
boat, yet defendant sold only entire boats. Shown below
is a comparison of the patented design on the right with
Malibu's boat on the left:

[patented design]
Despite the obvious disparity, the district court ruled
that Pacific Coast could recover Malibu Boats' total profits
on the entire boat even though the design patent only
claims the windshield and even though Pacific Coast does
not make or sell boats.
Equally as compelling is the recently-filed case of
Microsoft Corporation v. Corel Corporation, Case 5:15cv-05836 (CAND). In that case, Microsoft sued Corel
for infringement of a number of patents, including five
utility patents and four design patents. Using the Federal
Circuit's interpretation of Section 289, infringement of any
one design patent would lead to an award of all of Corel's
profits for the entire accused product.

17
Below is a reproduction of one of Microsoft's claimed
designs, which is a graphical element used to scale the
visible size of an electronic document.
The 0'140 patent
.

.: .

And below is a reproduction of the Corel accused

product purportedly using the claimed invention of
Microsoft's design patent. 1 The portion circled in red is
the accused element.
Corel Write:
Corer Writt

J2

!Wrilel

== . =~ ;=.

tr

B1 I....,. xx ... A

1. The particular patent-in-suit was awarded the Electronic

Frontier Foundations' "Stupidest Patent of the Month" award for
December of2015. See https://www.eff.org/deeplinks/2015/12/stupidpatent-month-microsofts-design-patent-slider

18
Under the Federal Circuit's interpretation of Section
289, the damages available for infringement of the single
graphical element circled in red will be the total profits on
the entire accused product, i.e., the whole word processing
program.
The Federal Circuit's rigid analysis achieves what
can only be considered unjust results. Using the Federal
Circuit's analysis, regardless of how small or insignificant
an infringing component is, if it is attached to a larger
product, then the total profits for the entire product
must be awarded as design patent damages. Absurd
results become immediately apparent. For instance, if
a patented design is applied to a carpet, does the patent
holder recover the total profits for the building in which
the carpet is installed? As Samsung points out in its brief,
if a cup holder is attached to an eighteen-wheeled truck,
is the profit for the entire truck available to one who holds
a patent for the cup holder? These questions have never
been addressed by this Court. It is time they are.
E. THE PETITION SHOULD BE GRANTED TO
PROVIDE GUIDANCE REGARDING THE
PROPER "ARTICLE OF MANUFACTURE"

The foregoing cases, and many others, highlight

the lack of any guidance regarding what constitutes the
infringing "article of manufacture" for the purpose of
Section 289. More specifically, Section 289 authorizes
infringer's profits for any "article of manufacture" to
which the claimed design is "applied." 35 U.S.C. 289.
"Article of manufacture" is not defined in Section 289.

19
In the Apple v. Samsung case, Samsung argued that
early design patent cases, such as Bush & Lane Piano
Co. v. Becker Bros., 222 F. 902, 903 (2d Cir. 1915), compel
a narrow interpretation for "article of manufacture" as
being only the portion of the product to which the design
is actually applied. See Apple Inc. v. Samsung Elecs. Co.,
786 F.3d 983, 1002 (Fed. Cir. 2015). The Federal Circuit
addressed Samsung's argument and rejected it without
any meaningful analysis. In essence, the Federal Circuit
distinguished the cases cited by Samsung on the grounds
that they were factually different. The Federal Circuit
concluded that the "innards of Samsung's smartphones
were not sold separately from their shells as distinct
articles of manufacture to ordinary purchasers." I d.
The Federal Circuit's discussion of what constitutes
the accused "article of manufacture" appears to implicate
the "smallest salable unit" analysis that the Federal
Circuit has held applies in the computation of a reasonable
royalty. See, e.g., VirnetX, Inc. v. Cisco Sys., Inc., 767
F.3d 1308, 1326 (Fed. Cir. 2014). In VirnetX v. Cisco,
the Federal Circuit noted that "the smallest salable unit
approach was intended to produce a royalty base much
more closely tied to the claimed invention than the entire
market value of the accused products." VirnetX, 767 F. 3d
at 1327. However, the Federal Circuit then concluded that
the analysis did not stop there. The Federal Circuit ruled
that when performing the reasonable royalty analysis,
the patent holder must .first identify the "smallest salable
unit" to establish the royalty base, and then perform the
apportionment analysis. Id.
By analogy, a proper determination of damages under
Section 289 should follow a similar framework. First,

20
using the Federal Circuit's reasoning in VirnetX, the
patent owner should be required to identify exactly what
the "article of manufacture" is for infringement under
Section 289, and that "article of manufacture" should
bear a "close relation to the claimed invention." VirnetX,
767 F.3d at 1327. As noted by the Federal Circuit, that
analysis is independent of any apportionment that may
or may not be done.
As demonstrated above, the Federal Circuit's
interpretation of Section 289 is devoid of any analysis or
even recognition that the "article of manufacture" must
be identified before a profits analysis can be performed.
Only after that is done should a patent owner's entitlement
to an infringer's profits be considered.

21
CONCLUSION

Systems' petition for a writ of certiorari should be

granted. The Federal Circuit's erroneous interpretation
of Section 289 is having a significant detrimental impact
on patent litigation today, and the problem appears to
be worsening rapidly. Such an unjust result cannot have
been envisioned, or even contemplated, by Congress when
it drafted the language of Section 289. It is time for this
Court to review the Federal Circuit's rulings and correct
the error.
Dated: January 28, 2016.
JOHN WHITAKER

Respectfully submitted,
PHILIP P. MANN

WHITAKER LAW GROUP

1218 Third Avenue, Suite 1809

Seattle, Washington 98101
(206) 436-8500
john@whitaker.law
DAVID A. AFFELDT

S.C.
8741 W. National Avenue
West Allis, WI 53227
414-321-4560
david.affeldt@affeldtlaw.com
AFFELDT LAW OFFICES,

Counsel of Record
TIMOTHY J. BILLICK
MANN LAW GROUP

1218 Third Avenue, Suite 1809

Seattle, Washington 98101
(206) 436-0900
phil@mannlawgroup.com
tim@mannlawgroup.com

Counsel for Petitioner

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

)

NORDOCK, INC.
Plaintiff-Appellant,

)
)

v.

SYSTEMS, INC.

CASE NO. 14-1762

Defendant-Appellee.

CERTIFICATE OF SERVICE

I hereby certify that on January 12, 2017, I electronically filed the foregoing
Statement of Plaintiff-Appellant Nordock, Inc. in Support of Continued Panel
Review with the Clerk of the Court for the United States Court of Appeals for the
Federal Circuit by using the Court's ECF system, which will send notice of such
filing to all registered CM/ECF users.

SOKOL LAW OFFICE

Counsel for Appellant, Nordock, Inc.
Is/Jeffrey S. Sokol
JeffreyS. Sokol

P.O. ADDRESS:
828 North Broadway
Milwaukee, WI 53202
414.272.7200 (telephone)