Hyundai Wins Reversal|of $34M Patent Verdict

(CN) - The Federal Circuit overturned a jury's $34 million finding that Hyundai Motor Co. infringed a Texas company's patented system for computerizing the sale of car parts.

The federal appeals court in Washington, D.C., said there wasn't enough evidence to support the jury's finding that Orion IP's patented "computer-assisted parts sales method" was anticipated, or previously disclosed, by electronic parts catalogs.

Orion sued Hyundai and 20 other automakers in 2005, claiming their computer sales systems infringed its patent. Orion settled with all defendants but Hyundai, which argued that it did not infringe the patent and that the patent was invalid.

A jury awarded Orion $34 million in damages, finding that Hyundai had willfully violated the patent. The district court denied the car maker's motions for a new trial.

Hyundai appealed, arguing that evidence presented to the jury established that the patent was invalidated by the electronic parts catalogs, specifically by the 1987 Bell & Howell IDB2000 system.

The appeals court agreed, citing the testimony of a former sales manager who said that he had personally demonstrated the IDB2000 system "hundreds of times starting from late 1987" and that he "directed the after-sale installation of customized IDB2000 systems at the car dealerships."

Orion failed to rebut this testimony, according to Judge Arthur Gajarsa.

"Here, Hyundai showed by clear and convincing evidence that as of November 1988, the IDB2000 system, as taught by the Electronic Parts Catalog reference, generated proposals for customers including price and graphical information," he wrote. "Thus, the record reveals that a reasonable jury would not have a legally sufficient evidentiary basis to find that the claims at issue were not anticipated."

But the panel upheld the lower court's finding that Hyundai failed to establish "inequitable conduct," or proof that the inventor meant to deceive the U.S. Patent and Trademark Office. Hyundai had claimed Orion's patent is unenforceable based on the inventor's misrepresentations.

"Hyundai failed to establish threshold levels of either materiality or intent to deceive," Gajarsa concluded.

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