Green Patent Blog

After losing three in a row to hybrid technology company Paice, first by jury verdict in the district court, then in the court of appeals and then being rejected by the Supremes, the Toyota Prius has finally prevailed in a patent infringement suit.  Earlier this month, the U.S. Court of Appeals for the Federal Circuit (the court that hears appeals of patent decisions from district courts and administrative agencies) held that Toyota did not infringe a patent owned by Connecticut hybrid technology company Solomon Technologies (Solomon).

Solomon’s U.S. Patent No. 5,067,932 (’932 patent) covers a combination motor and transmission device having a continuously variable speed of rotation.  According to the patent, the invention permits a hybrid engine to operate at peak power over a greater range of rotational speed, or rpm.

As is often the case in patent litigation, claim construction (the court’s interpretation of the legal scope of a patent’s claim language) was critical here.  The disputed language was in claim 7 of the ‘932 patent, which requires an “integral combination” of a motor element and a transmission unit element and requires that one of the two elements be located “within an envelope” containing the other element.

The Federal Circuit affirmed that the “integral combination” element means the motor and transmission are directly attached without the presence of shafts, bearings or other components in between.  Because Toyota’s transaxles have rotor shafts between the motor-generators and the transmission unit, the court found they did not infringe.

The court also held that the term “within an envelope” means that one of the two elements (motor or transmission unit) is within the imaginary space defined by the rotation of the other element.  As an additional basis for non-infringement, the Federal Circuit found that Toyota’s transmission gears were outside of the imaginary space defined by the motors’ magnet assemblies.

So the Prius is off the schneid in patent litigation, and the win comes as Toyota celebrates a happy milestone - the Prius went platinum this month, with over one million sold worldwide.

Last week, the U.S. Supreme Court denied Toyota’s petition for certiorari, refusing to review a lower court’s ruling that the Prius, Lexus RX400h and Highlander SUV hybrid cars infringe a patent owned by hybrid technology company Paice LLC. (read my previous post on Toyota’s appeal)  Toyota had argued that Paice’s statements in its patent that prior technology had “substantial deficiencies” and was ”compex and difficult to manufacture” precluded infringement under the doctrine of equivalents because Toyota’s hybrid vehicles used an aspect of that prior technology.  But the appeals court ruled that language in a patent criticizing a prior invention had to be clear as to which aspect of the invention is being criticized for a court to deny that the patent scope covers the prior invention as an equivalent.   

So the decision by the U.S. Court of Appeals for the Federal Circuit will stand.  In that decision, the Federal Circuit affirmed a $4.3 million jury verdict that Toyota’s hybrid drive trains infringed U.S. Patent No. 5,343,970 as an equivalent system but vacated the district court award of a $25 per vehicle ongoing royalty.  (read my previous post on the Federal Circuit decision) Now the case will go back to the trial court to determine the amount of ongoing royalty Toyota will have to pay Paice.

As is typical, the Supreme Court did not give a reason for its decision to deny review.  But the denial means that fewer than four justices favored review of the case (if four justices vote to review, the high court grants the petition for certiorari).  I remember one of my law professors used to describe his exams as consisting of big issues, little issues and non-issues and advised students to figure out which is which and not spend any time on the non-issues.  Here, Toyota tried to dress up a non-issue as a big issue, and the Supremes wisely declined to spend any time on it.

Last month Silicon Valley electric sports car company Tesla Motors sued rival car maker Fisker Automotive for allegedly stealing Tesla’s trade secrets, including confidential design ideas for a hybrid electric sedan.  The lawsuit, filed in California state court in San Mateo County, also names as defendants Fisker Automotive’s CEO, Henrik Fisker, its COO, Bernhard Koehler, and Fisker and Koehler’s design company, Fisker Coachbuild.  (read the New York Times story here)

According to the complaint, Tesla hired Fisker Coachbuild to aid with Tesla’s “WhiteStar” project to design an electric-hybrid sports sedan.  Tesla alleges that the defendants used the trade secret and confidential information on high-performance electric-hybrid sports car technology acquired during the engagement to secretly design their own directly competing sedan, the Karma (shown above and in this Inhabitat.com piece), which Fisker recently launched.  Among other things, the complaint alleges that the defendants fraudulently concealed their intentions to make a competing vehicle, breached the parties’ service contract and violated California trade secrets law. 

Trade secrets differ from patents in that they only protect information that is kept secret and only can be enforced against those who gain access to the information by improper means, including by breaching a promise to keep the information confidential.  (see IP Watchdog’s summary of trade secrets here)

From perusing the complaint, it seems that interpretation of the contract could be a major issue in the case.  While the contract has a confidentiality clause and a provision guaranteeing that Tesla would own any resulting work product, it also states that Fisker Coachbuild was permitted to provide the same design services to other car makers while working for Tesla.  Fisker Coachbuild may argue that building a competing car for Fisker Automotive constituted providing vehicle design services to another automaker, which it had every right to do under the contract.  In the complaint, Tesla asserts that Fisker Coachbuild’s complete involvement in the design of the competing car went beyond the scope of merely providing design services. 

Of course, that defense would not win the day for Fisker Coachbuild if it did in fact disclose Tesla’s proprietary information to Fisker Automotive and used the hybrid technology to build the competing car.  So the case might ultimately come down to a comparison of Tesla’s and Fisker’s hybrid-electric technology, which would be fun for us patent and greentech observers. 

A previous post discussed a court decision upholding a jury verdict that Toyota’s Prius, Highlander SUV and LexusRX400h infringed a patent owned by Paice, a company that owns several patents relating to hybrid drive train technology.  Toyota has filed a writ of certiorari, asking the U.S. Supreme Court to take the case and reverse the lower court decisions that it is liable for patent infringement.

The key issue on appeal is whether statements in Paice’s patent criticizing previous hybrid technology - a system that Toyota now uses in its hybrid vehicles - should preclude a finding that Toyota’s use of one key aspect of the criticized technology infringes the patent as an equivalent system.  U.S. Patent No. 5,343,970 (’970 patent) is directed to a hybrid drive train that uses a microprocessor and a controllable torque transfer unit that accepts torque input from both an internal combustion engine and an electric motor.  A bevel gear assembly regulates torque input, and the Paice patent criticizes expired Berman patents that used an alternative “planetary” gear system to regulate torque input, calling them “complex” and “difficult to manufacture economically.”  Significantly, Toyota uses this planetary design in its vehicles.  A clear and unequivocal disavowal of the planetary system would prevent Paice from asserting that someone using that system infringed the ‘970 patent under the doctrine of equivalents because a patentee cannot state that particular components are not part its patent and later assert that those same components infringe the patent.

The U.S. Court of Appeals for the Federal Circuit found that Paice’s statements were not a clear disavowal of a planetary gear system because it was not obvious which portion of the Berman drive train (motors, engine, gear system or control system) was being criticized.  The court said that the patentee must have “clearly excluded” the specific subject matter that is later sought to be recaptured under the doctrine of equivalents for this type of estoppel to apply. 

In its petition to the Supreme Court, Toyota argues that this “clearly excludes” language constitutes a new, heightened standard and creates a “reverse presumption” that rewards vague patent drafting and destroys the notice function of patents.  Toyota contends that a person of ordinary skill in the art would recognize that Paice disavowed the planetary gear system.  Paice argues in its opposition brief that Toyota simply failed to meet its burden of proving that the statements in its patent clearly disclaimed the gear system component and points out that the language at issue does not mention the gear system.  Paice also disputes the contention that any new standard or presumption was created, and asserts that the Federal Circuit followed the established standard for proving a disavowal based on statements in a patent.

The odds are very slim that the Supremes will hear this case.  The Court takes only a tiny percentage of the cases it is asked to hear, and it has heard several high-profile patent cases in the last couple of years. Also as Paice pointed out in it brief, there are no inter- or intra-court disputes, academic discussions, or legislative activity on this issue. 

Utah vehicle engineering company Raser Technologies recently announced that it has entered into an agreement with international vehicle technology developer FEV in an effort to integrate Raser’s electric motor and electronic drivetrain technology with traditional internal combustion engines.  (read the article here)  The goal of the project is a plug-in hybrid electric vehicle having 100 mpg fuel economy.

Raser owns one U.S. patent and several pending patent applications relating to AC induction electric motor systems.  Such systems typically include an electric motor and a “drive” or “controller” to provide an AC waveform to drive the motor.  Many AC motors are made to run from a DC power source with the drive acting as an interface between the two types of electrical energy.  However, complex and inefficient switching devices are necessary for the drive to convert DC power to an AC waveform.   U.S. Patent No. 6,847,186 seeks to solve this problem by eliminating the need for those switching devices. 

A rotary motor has a rotating part, or rotor, and a stationary part called a stator, with an air gap between them.  In an AC system, the stator has coils supplied with AC current to produce a rotating magnetic field to power the rotor.  Raser’s patented system widens the gap between the stator and the rotor, which has the effect of increasing inductance - the ratio of magnetic flux to current (changes in current create changes in magnetic flux, which generate electromotive force).  Thus, the motor itself is transformed into an inductor.  The inductance is connected in series with a capacitor, generating alternating current between the motor and the capacitor.  The result is a resonant circuit formed by the motor (inductor) and the capacitor.  When power is applied, the circuit oscillates and produces AC waveform without the need for complex devices to convert DC to AC.