                       NOTE: This disposition is nonprecedential.


 United States Court of Appeals for the Federal Circuit
                                    2007-1460, -1486

                    BRADY CONSTRUCTION INNOVATIONS, INC.,

                                                        Plaintiff-Appellant,

                                            v.

                                 PERFECT WALL, INC.
                                 and METAL-LITE, INC.,

                                                        Defendants-Cross Appellants,

                                           and

                                     STEELER, INC.,

                                                        Defendant-Appellee,

                                           and

                               SCAFCO CORPORATION,

                                                        Defendant-Appellee.


        R. Joseph Trojan, Trojan Law Offices, of Beverly Hills, California, argued for
plaintiff-appellant.

      Ronald P. Oines, Rutan & Tucker, LLP, of Costa Mesa, California, argued for
defendants-cross appellants. With him on the brief was Treg A. Julander.

     Delbert J. Barnard, Barnard Intellectual Property Law, Inc., of Seattle,
Washington, argued for defendant-appellee Steeler, Inc.

      Breton A. Bocchieri, Thelen Reid Brown Raysman & Steiner LLP, of Los
Angeles, California, argued for defendant-appellee Scafco Corporation.

Appealed from: United States District Court for the Central District of California

Chief Judge Alicemarie H. Stotler
                       NOTE: This disposition is nonprecedential.


 United States Court of Appeals for the Federal Circuit
                                    2007-1460, -1486

                    BRADY CONSTRUCTION INNOVATIONS, INC.,

                                                               Plaintiff-Appellant,
                                             v.


                     PERFECT WALL, INC. and METAL-LITE, INC.,

                                                               Defendants-Cross
                                                               Appellants,

                                            and


                                     STEELER, INC.,

                                                               Defendant-Appellee,

                                            and


                               SCAFCO CORPORATION,

                                                               Defendant-Appellee.


Appeal from United States District Court for the Central District of California in case no.
07-CV-219, Judge Alicemarie H. Stotler.

                             __________________________

                               DECIDED: August 15, 2008
                             __________________________

Before MICHEL, Chief Judge, RADER and MOORE, Circuit Judges.

MICHEL, Chief Judge.
        Brady Construction Innovations, Inc. (“Brady”) appeals from the district court’s

summary judgment of invalidity, and Perfect Wall, Inc. and Metal Lite, Inc. cross-appeal

from the district court’s denial of their motion for attorneys’ fees.      Order, Brady

Construction Innovations, Inc. v. Perfect Wall, Inc., No. 07-219 (C.D. Cal. Jun. 13, 2007)

(“Summary Judgment Order”). We heard oral argument on July 7, 2008. Because we

conclude that claim 11 of U.S. Reissued Patent No. RE39,462 (“the reissue patent”), for

which Brady applied more than two years after issuance of the original patent, enlarged

the scope of the claims of that patent, we affirm the district court’s grant of summary

judgment of invalidity. We also conclude that the district court did not clearly err in

finding the case not exceptional and thus affirm its denial of the motion for attorneys’

fees.

                                            I.

        Todd Brady is the inventor of the patent at issue and the president of SlipTrack

Systems and Brady Construction Innovations, Inc. (“Brady”). 1 In 1990, Todd Brady filed

a patent application that issued as U.S. Patent No. 5,127,760 (“the ’760 patent” or

“original patent”). The ’760 patent claimed a building construction assembly that allows

a header in a wall some vertical freedom of movement relative to the studs, such that

stresses applied to the assembly do not result in wall cracks. Such a configuration is

useful when stresses vary in a wall for example through accumulation of snowfall or

from an earthquake.

        The ’760 patent describes two preferred embodiments. In the first embodiment,

the stud and the header are aligned and then a hole is drilled in the stud using a self-


        1
              Brady Construction Innovations, Inc. was formerly known as SlipTrack.
                                           2

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tapping screw. In the other embodiment, the holes in the stud are pre-existing, allowing

the stud and header to be aligned using the holes.

      The original patent application contained nine claims, with claims 1 and 6 being

independent. Original claim 1 recited:

             1.     A building construction assembly that includes a header and
      a stud wherein the header is capable of vertical movement relative to said
      stud comprising:
             a header having a web and flanges with said flanges connected to
      said web;
             at least one of said flanges having at least one vertical slot therein;
             a stud having a width less than the distance between said flanges
      of said header;
             said stud being aligned with said vertical slot; and
             an attachment means passing through said slot and through said
      hole to unit[e] said header to said stud whereby said slot permits said
      header to move vertically with respect to said stud while restricting
      horizontal movement of said header.

J.A. at 268 (emphasis added). 2

      The examiner rejected all nine claims in the original application as indefinite and

obvious. As to indefiniteness, the examiner queried, “how is the stud ‘aligned’ with the

vertical slot?” J.A. at 259. 3 In response, Brady canceled claims 6 through 9, and in

claim 1, the only remaining independent claim, Brady deleted the limitation that the stud

be “aligned with said vertical slot” and amended it to read “said stud having at least one

hole formed therein proximal to said top end.”       Brady explained: “[T]he Examiner’s

question of how the stud is aligned with the vertical slot has been answered by adding

hole 22 proximal to top end 40 of the stud as an element of the claims. The hole 22

serves as a reference point on the stud which is used to align the stud and the slot.”

      2
              Claim 6 included a limitation that an “elongated slotted passage” be
“aligned” with the stud.
       3
              The examiner also cited the “aligned” limitation of claim 6, the only other
independent claim, as having the same indefiniteness problem.
                                           3

2007-1460, -1486
J.A. at 278. In the same response, Brady also added a new independent claim 7, which

included the same limitation now in claim 1: “said stud having at least one hole formed

therein proximal to said top end.”      The examiner ultimately allowed the claims as

amended, and the ’760 patent issued in 1992.

       As issued, claim 1 of the ’760 patent recited:

               1.    A building construction assembly that includes a header and
       a stud wherein the header is capable of vertical movement relative to said
       assembly comprising:
              a header having a web and flanges with said flanges connected to
       said web;
              at least one of said flanges having at least one vertical slot therein;
              a stud having a width less than the distance between said flanges
       of said header and having a top end;
              said stud having at least one hole formed therein proximal to said
       top end;
              said top end fitting between said flanges perpendicular to said
       header positioned so that said hole is aligned with said vertical slot; and
              an attachment means passing through said slot and through said
       hole to slideably unite said header to said stud whereby said slot permits
       said header to move vertically with respect to said stud while restricting
       horizontal movement of said header.

’760 patent, col.4 ll.35-54 (emphasis added).

       SlipTrack then sued Metal Lite in the Central District of California alleging that the

’760 patent had priority over a Metal Lite patent that issued on the same day, and that

Metal Lite’s products infringed the ’760 patent. In September 2003, a jury found that the

’760 patent was entitled to priority, that Metal Lite’s products infringed the ’760 patent,

and that SlipTrack was entitled to damages.

       On appeal, this court affirmed the priority determination but vacated and

remanded the infringement determination. SlipTrack Sys., Inc. v. Metal Lite, Inc., 113

Fed. Appx. 930 (Fed. Cir. Dec. 1, 2004). Specifically, this court held that the claim

limitation “said stud having at least one hole formed therein proximal to said top end”
                                             4

2007-1460, -1486
means “that a hole must be formed in the stud prior to insertion of the stud between the

flanges so that the hole can be used to align the stud with the vertical slot before

passing the attachment means through the vertical slot and into the stud.” Id. at 938.

This court based its claim construction primarily on statements in the prosecution

history, holding that “the prosecution history of the ’760 patent reveals that the patentee

limited its invention to studs having pre-existing holes.” Id. at 937. 4 We vacated the

district court’s judgment of infringement and remanded for further proceedings

consistent with our claim construction. Id. at 938.

       On remand, the district court granted Metal Lite’s motion for summary judgment

of non-infringement because the accused products did not use studs with pre-existing

holes. SlipTrack Sys., Inc. v. Metal Lite, Inc., No. 98-20 AHS, slip op. at 8 (C.D. Cal.

June 15, 2005). Although SlipTrack initially appealed that decision, it later moved to

voluntarily dismiss its appeal.   SlipTrack Sys., Inc. v. Metal Lite, Inc., 168 Fed. Appx.

943 (Fed. Cir. Feb. 10, 2006).

       On February 5, 2005, following our claim construction decision and more than

twelve years after the original patent issued, Brady filed an application for reissue of its

’760 patent.    The reissue application included all of the original claims and one

additional claim:

              11.   A building construction assembly that includes a header and
       a stud wherein the header is capable of vertical movement relative to said
       assembly comprising:

       4
              Just before our decision construing this claim term, a different district court
in a case involving the same patent but a different defendant also concluded that the
claims of the ’760 patent require a pre-existing hole. SlipTrack Sys., Inc. v. Steeler
Metals, Inc., No. C-04-0462-PVT, slip op. at 11 (N.D. Cal. Oct. 12, 2004). This court
issued a Rule 36 affirmance of that decision. Sliptrack Sys., Inc. v. Steeler Metals, Inc.,
158 Fed. Appx. 283 (Fed. Cir. Nov. 21, 2005).
                                            5

2007-1460, -1486
               a header having a web and flanges with said flanges connected to
       said web; at least one of said flanges having at least one vertical slot
       therein;
               a stud having a width less than the distance between said flanges
       of said header and having a top end;
               said stud having at least one hole formed therein proximal to said
       top end by an attachment means passing through said slot and through
       said hole to slideably unite said header to said stud whereby said slot
       permits said header to move vertically with respect to said stud while
       restricting horizontal movement of said header;
               said top end fitting between said flanges perpendicular to said
       header positioned so that said hole is aligned with said vertical slot.

Reissue patent, col.6 ll.6-27 (emphasis added).       In prosecuting the reissue, Brady

alerted the PTO to the fact that two courts, including this court, had construed claim 1 of

the ’760 patent to cover only one of the disclosed embodiments in the patent and made

clear that claim 11 was being added in reissue to claim the preferred embodiment that

had been excluded by our claim construction. But Brady argued that claim 11 was

narrower in scope than original claim 1 because claim 11 requires the additional

limitation that the hole be made by a self-tapping screw.       Metal Lite protested the

reissue application before the PTO, although the examiner may not have considered the

protest since it was never included as part of the reissue file wrapper. The examiner

allowed claim 11 stating: “[N]ewly presented claim 11 includes all of the limitations of

previously allowed claim 1 with the additional limitation ‘by’ [] which further narrows the

scope to a specific embodiment of the invention wherein the ‘at least one hole’ is formed

by the ‘attachment means’ [].” J.A. at 153.

       In June 2006, after receiving the Notice of Allowability as to the reissue

application, Brady issued an “Industry Announcement,” which stated that it would

receive “a new patent for [its] SLP-TRK Brand slotted track product.”                 The

announcement also stated:
                                              6

2007-1460, -1486
        Previously, the Court of Appeals had limited the original slotted track
        patent in a way that Brady never intended. This new patent removes the
        limitation recently imposed by the Court of Appeals. From this date
        forward, anyone who manufactures and sells [any style of] slotted track
        will infringe Brady’s new patent regardless of how the slotted track is
        installed.

J.A. at 438 (emphasis in original). The patent reissued on January 9, 2007.

        The same day, Brady sued a number of companies including Perfect Wall, Inc.,

Metal Lite, Inc., Steeler, and SCAFCO (collectively “defendants”), alleging that certain

“slotted track products” infringed the claims of the reissue patent. Defendants moved

for summary judgment of invalidity as to the reissue patent. The district court issued a

tentative ruling on June 11, 2007, tentatively granting defendants’ motion for summary

judgment of invalidity because the reissue violated Section 251’s prohibition on

broadening reissues more than two years after the original patent issued, denying Metal

Lite’s motion on the alternative ground that the reissue violated the recapture rule, and

denying Metal Lite’s motion for attorney’s fees. Following a hearing on the motions, the

district court granted the motion for summary judgment of invalidity on June 13, 2007.

The district court concluded that claim 11 “includes within its scope a user who places a

stud without a pre-existing hole between the flanges of the header and then creates the

hole through the stud with a self-tapping screw.”       Summary Judgment Order at 7.

Because reissue claim 11 broadened the scope of the original patent and Brady filed his

reapplication more than two years after the original patent issued, the district court held

reissue claim 11 invalid. The district court also denied Metal Lite’s motion for attorney’s

fees.




                                            7

2007-1460, -1486
                                            II.

       We review a district court’s grant of summary judgment de novo. Ethicon Endo-

Surgery, Inc. v. U.S. Surgical Corp., 149 F.3d 1309, 1315 (Fed. Cir. 1998). At summary

judgment, all ambiguous facts and inferences must be construed in the light most

favorable to the non-movant. Id. Summary judgment is only appropriate if no genuine

issues of material fact exist and the movant is entitled to judgment as a matter of law.

Id.

       A.     Reissue Validity

       Under 35 U.S.C. § 251, a patentee can seek reissue of his patent when he

“through error without any deceptive intention . . . claim[ed] more or less than he had a

right to claim in the patent.” If the patentee seeks reissue more that two years from the

grant of the original patent, however, the reissued patent cannot “enlarg[e] the scope of

the claims of the original patent.” Id. 5

       “Whether the claims of a reissue patent violate 35 U.S.C. § 251, and thus are

invalid, is a question of law, which we review de novo.” N. Am. Container, Inc. v.

Plastipak Packaging, Inc., 415 F.3d 1335, 1349 (Fed. Cir. 2005). In this case, we

conclude that Brady’s reissue claim 11, the only asserted claim, enlarged the scope of

the claims of the original patent. Since Brady applied for reissue more than two years

       5
              Metal Lite argues, as an alternative ground for affirmance, that Brady’s
reissue patent violated the recapture rule. The recapture rule, however, bars certain
reissues within the first two years after the original patent issued if the patentee
voluntarily surrendered claim scope during the original prosecution. E.g., N. Am.
Container, Inc. v. Plastipak Packaging, Inc., 415 F.3d 1335, 1340, 1349 (Fed. Cir.
2005); Ball Corp. v. United States, 729 F.2d 1429, 1433, 1436 (Fed. Cir. 1984). In this
case, Brady did not apply for reissue until well after the two-year period had expired,
making the recapture rule inapplicable. Thus, we need only determine whether the
reissue violates the proscription in Section 251 that reissues outside the two-year period
may not “enlarge[e] the scope of the claims of the original patent.”
                                             8

2007-1460, -1486
after issuance of the original patent, the reissue violated Section 251, and we affirm the

district court’s grant of summary judgment of invalidity.

        This court has held:

        A claim of a reissue application is broader in scope than the original
        claims if it contains within its scope any conceivable apparatus or process
        which would not have infringed the original patent. A reissue claim that is
        broader in any respect is considered to be broader than the original claims
        even though it may be narrower in other respects.

Tillotson, Ltd. v. Walbro Corp., 831 F.2d 1033, 1037 n.2 (Fed. Cir. 1987); see also In re

Freeman, 30 F.3d 1459 (Fed. Cir. 1994).

        In this case, the accused products did not infringe the claims of the original

patent as construed by this court in SlipTrack Systems, Inc. v. Metal Lite, Inc., 113 Fed.

Appx. 930 (Fed. Cir. Dec. 1, 2004), which held that the claim limitation “said stud having

at least one hole formed therein proximal to said top end” was limited to a pre-existing

hole.   Under the principles of stare decisis and the Supreme Court’s guidance in

Markman, this court follows the claim construction of prior panels absent exceptional

circumstances.    Miken Composites, L.L.C. v. Wilson Sporting Goods Co., 515 F.3d

1331, 1338 n.* (Fed. Cir. 2008) (“[T]reating interpretive issues as purely legal will

promote (though it will not guarantee) intrajurisdictional certainty through the application

of stare decisis.” (quoting Markman v. Westview Instruments, Inc., 517 U.S. 370, 391

(1996))).

        Brady does not ask that we explicitly overrule the prior panel’s construction of the

claims of the original patent, and Brady admits that products that would not infringe the

claims of the original patent do infringe reissue claim 11. This is because reissue claim

11 requires that “said stud having at least one hole formed therein proximal to said top

                                             9

2007-1460, -1486
end by an attachment means.” In other words, in reissue claim 11, the hole is not pre-

existing but is formed using a self tapping screw (the attachment means disclosed in the

specification).    Because products in which the hole is not pre-existing but instead

formed using a self-tapping screw (i.e., the accused products in this case) would not

infringe the claims of the original patent but would infringe reissue claim 11, we

conclude that reissue claim 11 enlarged the scope of the original patent. We affirm the

district court’s grant of summary judgment of invalidity as to that claim.

       B.     Attorney’s Fees

       Metal Lite and Perfect Wall (collectively “Metal Lite”) cross-appeal the district

court’s denial of their motion for attorney’s fees. In reviewing a district court’s decision

on Section 285 attorney’s fees, we review the decision as to whether the case is

exceptional for clear error, and we review the subsequent determination as to whether

fees are appropriate for abuse of discretion. Cybor Corp. v. FAS Techs., Inc., 138 F.3d

1448, 1460 (Fed. Cir. 1998) (en banc). Metal Lite argues that the district court erred in

not finding the case exceptional because Brady made misrepresentations to the PTO

during prosecution of the reissue patent, namely that claim 11 was narrower than the

original claims.     The district court determined that Brady or its counsel had not

committed inequitable conduct:

       I can tell you that based upon everything I know of this case and these
       inventions, which is probably more than I ever care to know in a lifetime,
       that the record from what I can see does not support a conclusion of
       inequitable conduct by the patentee or counsel for the patentee.

J.A. at 1793. The district court did not clearly err in concluding that Brady did not

commit inequitable conduct. In the reissue prosecution, Brady provided the PTO with

this court’s prior decision in which we limited the claims of the original patent to only
                                             10

2007-1460, -1486
those with pre-existing holes. Brady argued to the PTO that claim 11 was narrower

based on the same arguments it advances here. Nevertheless, the PTO could have

rejected those arguments, and the district court did not clearly err in finding that Brady

did not commit inequitable conduct and the case was not exceptional on that basis.

       Metal Lite also argues that the case is exceptional because Brady filed suit in

bad faith, knowing that claim 11 was invalid as a broadening reissue. While Brady’s

press release stating that the reissue patent “removes the limitation recently imposed by

the Court of Appeals” suggests that Brady may have known that its claim 11 was not

narrower, the district court was in the best position to observe Brady and its counsel

both during the prior case and this case. We see no clear error in its determination that

the present litigation was not brought in bad faith.

                                                  III.

       In sum, we affirm the district court’s summary judgment of invalidity as to reissue

claim 11 because that claim enlarged the scope of the original patent claims and Brady

applied for reissue more than two years after the original patent issued. We also affirm

the district court’s denial of attorneys’ fees.




                                                  11

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