Orion IP v. Hyundai: Anticipation Overturns $34 Million Verdict

In Orion IP, LLC v. Hyundai Motor America, 605 F.3D 967 (Fed. Cir. 2010), the Federal Circuit overturned a $34 million verdict against Hyundai Motor America because there was insufficient evidence to support the jury’s finding of no anticipation.  On the issue of inequitable conduct, the Federal Circuit affirmed the district court’s judgment of no unenforceability.

In 2005, Hyundai Motor America and twenty other automobile manufacturers were sued in the Eastern District of Texas for infringement of U.S. Patent Nos. 5,615,342 and 5,367,627, covering a “computer-assisted parts sales method.”  All of the defendants except Hyundai settled before trial and, in 2007, a jury returned a finding of infringement by Hyundai on the ‘627 patent only.

On appeal, the Federal Circuit reversed on the grounds that asserted claim 1 of the ‘627 patent is invalid as anticipated by a promotional brochure for an electronics part catalog.  The publication entered into evidence had a “revision” date of 1991, but appeared to be a successor to an earlier publication with a 1987 copyright date that was distributed at least one year prior to the critical priority date.  The key issue on appeal was whether the system described in the brochure generated a “customer proposal” as detailed in the ‘627 patent claims.  On appeal, the Federal Circuit concluded that it did, holding that the “testimonial and documentary evidence regarding the [brochure] reference establish that [it] anticipates claim 1 of the ‘627 patent.”

The opinion in this case is significant, in part, because it relied on oral testimony to support a finding of invalidity under the clear and convincing standard.