Amsted Industries Incorporated v. Buckeye Steel Castings Company
24 F.3d 178 (1994)
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Rule of Law:
To satisfy the actual notice requirement of 35 U.S.C. § 287(a) and recover pre-litigation damages for patent infringement, a patentee must provide the infringer with an affirmative communication of a specific charge of infringement by a specific accused product or device. A general communication to the industry about a patent's existence and an intent to enforce it is insufficient.
Facts:
- Amsted Industries Incorporated (Amsted) owned U.S. Patent 3,664,269 for a railroad car underframe structure.
- Amsted sold a key component, a center plate, to rail car builders who then assembled the full patented combination. These assembled products were not marked as patented.
- Buckeye Steel Castings Company (Buckeye), a competitor, was aware of the '269 patent since at least 1976.
- After numerous unsuccessful attempts to design a non-infringing alternative and after being denied a license, Buckeye decided to copy Amsted's center plate.
- Buckeye's counsel advised that copying the center plate would likely result in infringement of the '269 patent.
- On January 10, 1986, Amsted sent a letter to Buckeye and other companies in the industry, stating it had acquired the '269 patent and expected the industry to respect its rights, advising them to refrain from supplying parts that would infringe.
- On January 27, 1989, Amsted sent a second letter specifically to Buckeye, stating that Buckeye's center plate infringed the '269 patent and demanding that Buckeye 'cease and desist'.
Procedural Posture:
- Amsted Industries Incorporated sued Buckeye Steel Castings Company in the U.S. District Court for the Northern District of Illinois for willful patent infringement.
- A jury found Buckeye willfully infringed Amsted's patent and awarded Amsted $1,497,232 in lost profits.
- The district court denied Buckeye's motion for judgment as a matter of law (JMOL) on willfulness, finding the jury's verdict was supported by the evidence.
- The district court ruled that Amsted's damages were limited under 35 U.S.C. § 287(a) to the period after notice was given, and upheld the jury's finding that the January 10, 1986 letter constituted effective notice.
- The district court granted Amsted’s motion for enhanced damages, trebling the award, and also awarded attorney fees.
- Buckeye appealed the findings of willful infringement, enhanced damages, attorney fees, and the 1986 notice date to the U.S. Court of Appeals for the Federal Circuit. Amsted cross-appealed the ruling that its damages were limited by § 287(a) at all.
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Issue:
Does a letter sent to the industry at large, which identifies a patent and states the patentee's general intent to enforce its rights, constitute 'notice of the infringement' to a specific party under 35 U.S.C. § 287(a), thereby allowing the patentee to recover damages from that date?
Opinions:
Majority - Lourie, Circuit Judge.
No, a general letter to the industry does not constitute sufficient notice of infringement under 35 U.S.C. § 287(a). The statute requires notice of 'the infringement,' which means an affirmative act by the patentee communicating a specific charge of infringement by a specific accused product or device. Citing the Supreme Court's decision in Dunlap v. Schofield, the court held that the focus must be on the action of the patentee, not the knowledge or understanding of the infringer. It is irrelevant whether the defendant already knew of the patent or was aware of its own infringing activities. The 1986 letter was merely informational and did not accuse Buckeye of infringing with a specific product. Therefore, it was not legally sufficient notice. The 1989 letter, which made a specific charge against Buckeye's product, was the first communication that met the statutory standard for actual notice.
Analysis:
This decision solidifies the standard for actual notice under patent law, creating a bright-line rule that benefits accused infringers by requiring patentees to be direct and specific. It clarifies that a patentee who fails to mark their product cannot rely on an infringer's subjective knowledge or on vague, industry-wide warnings to start the clock for damages. To recover damages prior to filing a lawsuit, the patentee must make an explicit accusation against a specific product, thus removing ambiguity and potentially promoting earlier resolution of disputes. This precedent forces patentees to be more confrontational in their enforcement communications if they wish to preserve their right to full pre-litigation damages.
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