SUNOCO PARTNERS MARKETING v. U.S. VENTURE, INC.

Sunoco sued Venture, alleging that its operation of butane-blending systems infringed claims of four of Sunoco’s U.S. Patents. Venture counterclaimed that the asserted patents are not infringed, are invalid, and are unenforceable. After construing the claims, the district court ruled on various summary judgment motions and held a bench trial, ultimately awarding Sunoco $2 million in damages, which it trebled to $6 million. On appeal, Venture challenges the district court’s rejection of its on-sale-bar defense on the ground that the device was sold primarily for occurred primarily for experimental, rather than commercial, purposes. The CAFC notes that although the agreement allocated the cost of installation of the equipment to the seller, the buyer committed to buy butane from the seller. The fact that “butane is not the invention” is not controlling because the agreement intertwines the sale of the equipment with the butane-supply commitment.  The CAFC is also not persuaded that the “Equipment Testing” section of the agreement (which describes pre-installation testing and post-installation testing) made the sale primarily experimental, rather than commercial. Accordingly, the CAFC reverses the district court’s experimental-use determination, vacates its infringement determination, and remands for the district court to determine whether the system sold anticipated or rendered obvious the claimed invention and that it was ready for patenting. In addition: 1) the CAFC vacates the district court’s finding that Venture infringed two patents that have since been held invalid; 2) affirms the district court’s construction of two claim terms – “a vapor pressure of the butane stream” and “vapor pressure determined by a measurement taken from the butane stream”; 3) regarding the district court’s decision to enhance damages, because the district court’s enhancement “is based on clearly erroneous findings of fact,” it amounts to an abuse of discretion and the CAFC vacates and remands for the district court to reassess enhancement; and 4) the CAFC discerns no clear error in the district court’s decision to deny lost profits or its reasonable-royalty calculation, and affirms those aspects of the judgment.

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