Federal Circuit Affirms Water Heater Infringement Ruling Based on District Court Claim Construction

On August 3, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a decision in A. O. Smith Corp. v. Bradford White Corp. which affirmed rulings from the District of Delaware that A. O. Smith’s patent covering a hot-water heater system was both infringed by Bradford White and not invalid. The appellate court ruled that the district court’s construction of a contested limitation within claim 1 was supported by the patent’s specification. Judge Timothy Dyk concurred with the majority’s ruling but argued that the majority should have based its decision to affirm claim construction on evidentiary findings made by the district court.

Delaware Bench Trial Results in Infringement, No Invalidity Rulings

The patent-at-issue in this appeal is U.S. Patent No. 8375897, Gas Water Heater. Claim 1, the only claim of the ‘897 patent, recites:

“1. A method of interfacing a natural convection vent construction with a water heater, the method comprising:

providing a water heater having a burner, a blower, and a flue;

creating products of combustion with the burner;

forcing the products of combustion into the flue under positive pressure with the blower;

interposing an exhaust plenum between the flue and the natural convection vent construction;

dropping the pressure of the products of combustion to near atmospheric pressure within the plenum;

and permitting the products of combustion to rise out of the plenum and into the natural convection vent construction substantially entirely under the influence of natural convection;

wherein the natural convection vent construction includes a draft hood, the method further comprising mixing ambient air with the products of combustion as the products of combustion flow into the draft hood.”

A.O. Smith filed suit in March 2018, alleging that Bradford White’s water heaters infringed upon the ‘897 patent. In an early claim construction hearing, the Delaware district court dismissed Bradford White’s argument that the permitting limitation, specifically the language “substantially entirely under the influence of natural convection,” was indefinite “because a relevant artisan would not understand the degree of influence that the power burner and other factors exert on the products as they enter the vent.” Rather, the district court found that the ‘897 patent’s specification, which included a reference to Category I venting as embodied in the National Fuel Gas Code, favored plaintiff A. O. Smith’s construction, “[a]t a pressure near or below atmospheric pressure and without the influence of the power burner, such that a Category I venting system can be used.” Similarly, the district court also construed “natural convection” from the permitting limitation to mean “fluid motion compatible with use of a Category I venting system.”

Following a bench trial, the Delaware district court ruled that expert testimony presented at trial established that Bradford White had directly and indirectly infringed claim 1 of the ‘897 patent as construed by the district court. The district court also dismissed Bradford White’s invalidity contentions after the bench trial. Following the adverse ruling, Bradford White appealed the district court’s construction of the term “natural convection” as well as arguments that the dropping limitation of claim 1 was anticipated by U.S. Patent No. 5228413, Multiple Boiler (“Tam”).

Under Phillips, Category I Requirement in Specification Support Claim Construction

In reviewing the district court’s construction of the claim term “natural convection,” for clear error, the Federal Circuit opinion, authored by  Judge Richard Taranto, dismissed Bradford White’s arguments that the term must be read in isolation in order to determine its ordinary meaning from dictionary definitions. The Federal Circuit noted that under Phillips v. AWH Corp. (2005), courts are to take into account the context of words surrounding the challenged claim term as well as the patent’s specification. Because “natural convection” was part of a larger claim construction already determined by the district court that was unchallenged by Bradford White, the essential context for the claim term “invites clarification from the specification” as was already determined by the district court. The ‘897 patent’s specification discloses the relationship between natural convection and atmospheric venting as well as the retrofitting capabilities of the water heater. The CAFC explained:

“A.O. Smith did not need to repeat itself to make the point clear in this short and to-the-point specification: A requirement of the claimed invention was compatibility with the installed base of Category I venting systems into which the water heater operating according to the invented method could be ‘retrofitted.’”

The Federal Circuit also rejected Bradford White’s argument that the inclusion of the Category I requirement in claim construction was harmful error requiring a new trial. Bradford White had contended that the district court’s conclusions on the permitting limitation of the ‘897 patent rendered immaterial the specification’s discussion of the “velocity” or “flow” of the heater’s combustion products. The Federal Circuit found, however, that the district court relied upon evidentiary findings, including industry standards and expert testimony, that reasonably assigned little weight to velocity and instead found that the negative pressure of combustion products leaving the plenum, along with the Category I certification of those products, proved that the permitting limitation was satisfied. The CAFC also agreed with the district court’s reasoning for not crediting Bradford White’s velocity argument given expert testimony that skilled artisans would recognize that velocity could be a product of natural convection in conjunction with variables other than the water heater’s blower.

Pressure Dropping Limitation Not Anticipated by Tam

Moving on to Bradford White’s contention that the ‘897 patent was anticipated by Tam, the Federal Circuit also agreed with the district court that Tam did not disclose the dropping limitation of the ‘897 patent. The district court construed the dropping limitation as requiring the pressure of combustion products to be positive prior to entering the plenum, which again was supported by the claim term’s ordinary meaning within the context of the patent’s specification as well as expert testimony regarding the skilled artisan’s interpretation of the term. Although Bradford White argued that this construction read out the “creep and spill” embodiment described in the ‘897 patent’s specification, the Federal Circuit found the claim language to be clear enough that the district court’s construction was proper even if it didn’t cover an embodiment outlined in the specification. Although Bradford White presented expert testimony at the district court contradicting this finding, the appellate court noted that its proffered expert did not qualify as a skilled artisan as of the ‘897 patent’s priority date and that the expert’s testimony did not justify any departure from the district court’s claim construction.

Judge Dyk: Panel Majority Incorrect to Base Ruling on Post-Trial Claim Construction

Although Circuit Judge Dyk joined the majority’s reasoning with regards to the invalidity arguments surrounding Tam, he wrote separately in a concurrence to argue that he would have affirmed the district court’s infringement findings through a path other than claim construction. While Category I compliance was necessary for satisfying the permitting step following claim construction, “[a]fter trial, the district court appeared to hold for the first time that satisfying the Category I compliance standard itself established infringement of the permitting limitation,” Judge Dyk wrote.

While the panel majority approved of the post-trial Category I construction, Judge Dyk found that the ‘897 patent’s claim language, including the dropping limitation requiring negative pressure, along with its specification did not establish that Category I compliance itself sufficiently proved the permitting limitation. Instead, Judge Dyk would have rested his infringement ruling on the district court’s evidentiary findings, including expert testimony, which led the district court to conclude that there was no significant influence from the power burner at the point of the permitting limitation. While Judge Dyk acknowledged that this factual determination created an open question, as the ‘897 patent “appears to assume that negative pressure does not preclude influence of the power burner,” that factual finding was not challenged by Bradford White on appeal.