Bettcher Industries, Inc. v. Bunzl USA, Inc., and Bunzl Processor Distribution, LLC

Estoppel under 35 U.S.C. § 315 only applies after all appeal rights have been exhausted; inherency argument of infringement is only applicable where prior art necessarily functions as the challenged patent.

Bunzl Processor Distribution, LLC (“Bunzl”) appealed from the district court decision denying entry of judgment as a matter of law for invalidity or for a new trial on invalidity or obviousness for Bettcher Industries, Inc.’s (“Bettcher”) U.S. Patent No. 7,000,325. Bettcher cross-appealed the district court’s denial of a new trial on infringement. The Court of Appeals affirmed all appeals with the exception of vacating the district court’s ruling on Bunzl’s request for a new trial due to obviousness. The Court of Appeals ruled that this was not a case of inherency (the prior art did not necessarily function in accordance with the claimed limitations) and therefore Bunzl’s arguments of judgment as a matter of law and new trial for invalidity based on a previous design made by Bettcher were not valid. Bettcher’s cross-appeal was denied since the court found the challenged testimony was not improperly allowed and that Bettcher could not establish intent or the absence of a substantial non-infringing use by Bunzl’s product. The district court’s ruling denying a new trial on obviousness was vacated when the Court of Appeals found that references excluded by the district were not estopped from appeal by 35 U.S.C. § 315 as the district court had ruled. The Court of Appeals stated estoppel applied under 315 only after all appeal rights were exhausted and in this case not all of Bunzl’s appeal rights were exhausted. The case was REMANDED to the district court for the decision of Bunzl’s obviousness challenge.