ORDER

WILLIAM M. CONLEY, District Judge.

In response to the court's proposed closing liability instructions, the parties submitted redlined edits, briefs in support of those redlined edits, and responses to the opposing parties' submissions. Having reviewed those materials, the court issues this order describing its reasoning for adopting or rejecting the parties' proposed edits, along with the revised instructions themselves, for possible discussion at this afternoon's telephonic conference.

1. Meaning of terms: focusing

In defining the word "focusing," the court will include the previously bracketed language after the disclaimer, having concluded it is necessary to define adequately the scope of the disclaimer. The court recognizes that this language may not be as relevant given ST's position that it will not be pursuing an infringement theory based on the primary focusing region occurring at an injection site. Nonetheless, the additional language best captures the court's claims construction order, and specifically the parameters of the disclaimer. In including this additional language, the court will adopt ST's proposed modified language, finding that it accurately reflects the ways in which focusing could occur at an injection site.

2. Meaning of terms: primary focusing region

The court has opted not to change the definition of this term, including the use of the word "preceding." This definition accurately reflects its claims construction, and the use of the word preceding accurately describes the spatial relationship between the two regions or steps.

3. Prior art

The court will provide a modified version of the prior art instruction, limiting the prior art references to the five that are at issue in the obviousness challenge, rather than the longer list provided by ABS. While the court understands ST's position that this instruction is no longer needed in light of its decision not to challenge Nieuwenhuis 2003 as a prior art reference, the court has concluded that having a list of agreed upon prior art references may be helpful to the jury.

4. ABS's proposed additional sentence in anticipation and obviousness instructions

ABS proposed the addition of the following sentence at the end of the anticipation instructions: "A claim that covers a category may be anticipated by the disclosure of a single example within the scope of that category in a single item of prior art." The court opts not to provide this instruction for two reason. First, rather than clarify, the language introduces new uncertainty, especially the meaning of the term "a category" and, therefore, is more likely to confuse than provide additional guidance to the jury. Second, the thrust of ABS's concern is already addressed in the prior sentence, which instructs the jury that the anticipation defense may be met if a person skilled in the art "would be able to make and use at least one embodiment of the claimed invention without undue experimentation." (Emphasis added.) For this same reason, the court declines to add the following sentence to the instruction on obviousness: "A claim that covers a category may be obvious based on the obviousness of a single example within that category."

5. Reference to ABS I's finding of nonobviousness of '987 patent

The court also rejects an instruction about a previous determination that the asserted claims of the '987 patent are not obvious, finding that this instruction is not relevant to the jury's determination of obviousness in this case. Moreover, the court rejects ABS's argument that the jury may be confused by its task. The court will have already explained the respective invalidity challenges as part of the introductory instructions, and the verdict form clearly identifies the relevant invalidity challenge for each patent.

6. Obviousness factors

In the sentence preceding the list of factors, the court will change the word from "should" to "may," finding that this more accurately reflects the use of multi-factor lists in making a determination that is ultimately left to the jury. The court will also bracket the two factors ST challenges as irrelevant and reserves on whether the list should include those two factors until hearing the evidence at trial.

7. Extra enablement sentences

The parties both proposed an additional sentence at the end of the first paragraph of the enablement section. Because both appear relevant and consistent with case law, and when viewed together, adequately describe the two extremes of the enablement requirement (e.g., a "perfected, commercially viable embodiment" is not required, but the specification "must provide more than an invitation for further research"), the court has added both statements at the end of the enablement instruction.

8. ABS's additional enablement instruction purportedly based on Seventh Circuit's opinion

ABS seeks to add "It has already been determined that each asserted claim of the '987 patent encompasses, among other things, a photo-damage sorter that produces sexed semen at commercially usable speeds, purities, and viability levels." The court reserves on this proposed addition pending further review of the Seventh Circuit decision and argument by the parties. In addition, the court opts not to make the change from "the" to "every" finding, because it is duplicative of the "by each claim" language.

9. ST's proposed additional language in failure to comply section ST seeks to add:

('503 dkt. #1049-1 at p.15.) The court opts to provide an instruction as to the possible relevance of other purity tests, but not the availability of other tests, or whether ABS could have discovered ST's alleged failure to comply with the purity requirement earlier. This additional argument may be relevant to the jury's determinations as to whether the breach was material, ST's waiver defense, or a mitigation of damages defense, but it is less relevant to ST's alleged failure to comply, if at all, nor to the jury's determination of that question. Still, ST may present evidence and argue that ABS failed to use other available tests to challenge ST's purity results or as a basis to claim a breach of that provision of the contract sooner.

10. Waiver defense

ST challenges ABS's addition of the sentence, "If, however, the non-breaching party is only actively trying to extricate itself from the contract, while making certain that its needs are met so that it could continue in business, then you should not find waiver," arguing that the case ABS relies on for this proposition is distinguishable from the facts at issue here. While the court views this as a factual dispute for the jury — for example, whether ABS could have terminated the contract earlier given its lack of replacement technology or whether it accepted a lower quality product as a matter of convenience — the court has opted to remove this last sentence, as well as ST's two preceding sentences, finding it best to provide the jury with a simpler instruction consistent with the Texas pattern instruction, which largely leaves to the jury to weigh the specific fact pattern before it. However, nothing about this ruling, precludes the parties from the making arguments on waiver consistent with their proposed additions.

CLOSING INSTRUCTIONS

1. Introduction

Ladies and Gentlemen of the Jury:

You are about to hear closing arguments of the parties. Before these arguments, I will instruct you on the law. After closing arguments, I will provide very brief instructions governing your deliberations. After that, the case will be in your hands.

It is my job to decide what rules of law apply to the case and to explain those rules to you. It is your job to follow the rules, even if you disagree with them or don't understand the reasons for them. You must follow all of the rules; you may not follow some and ignore others.

The case will be submitted to you in the form of a special verdict consisting of 14 questions, with subparts for certain questions. [Read special verdict form.] In answering the questions, you should consider only the evidence that has been received at this trial. Do not concern yourselves with whether your answers will be favorable to one side or another, or with what the final result of this lawsuit may be.

Again, note that certain questions in the verdict are to be answered only if you answer a preceding question in a certain manner. Read the instructions before a question very carefully before you undertake to answer it. Do not answer questions needlessly.

2. Burden of Proof

When a party has the burden to prove any matter by a preponderance of the evidence, it means that you must be persuaded by the testimony and exhibits that the matter sought to be proved is more probably true than not true. When a party has the burden to prove any matter by clear and convincing evidence, it means that you must be persuaded by the testimony and exhibits that the matter sought to be proved is highly probable. This is a higher burden of proof than a "preponderance of the evidence."

On the liability questions in the special verdict, the burden of proof is on the party contending that the answer to a question should be "yes." You should base your decision on all of the evidence, regardless of which party presented it.

3. Answers Not Based on Guesswork

If, after you have discussed the testimony and all other evidence that bears upon a particular question, you find that the evidence is so uncertain or inadequate that you have to guess what the answer should be, then the party having the burden of proof as to that question has not met the required burden of proof. Your answers are not to be based on guesswork or speculation. They are to be based upon credible evidence from which you can find the existence of the facts that the party must prove in order to satisfy the burden of proof on the question under consideration.

4. Specific Instructions by Cause of Action

A. Patent

i. Overview

At the beginning of the trial, you watched a video about patents generally and the patent system. I will now give you more detailed instructions about those aspects of patent law that specifically relate to this case.

a. Person of ordinary skill

Some issues in patent cases are determined by reference to a "person of ordinary skill in the art or field of the invention." In this case, the art or field of the invention is technology related to sorting of cells using flow cytometry. It is up to you to decide the level of ordinary skill, which may differ from patent to patent. In making this decision, you should consider all the evidence, including:

b. The patent claims

As the video described at the beginning of trial, the claims of a patent are the numbered sentences at the end of the patent. The claims define the patent owner's rights under the law. That is, the claims define what the patent owner may exclude others from doing during the term of the patent.

In patent law, the requirements of a claim are often referred to as "claim elements" or "claim limitations." For example, a claim that covers the invention of a table may describe the tabletop, four legs and glue that holds the legs and the tabletop together. The tabletop, legs and glue are each a separate limitation or requirement of the claim.

To decide whether ABS and Genus infringed the claims of a patent, you must compare the accused infringing system or method, here — ABS's GSS chip and single sheath chip — with the claims of the patent at issue. It is the claims of the patent that are infringed when patent infringement occurs. The claims are also the main focus when a patent's validity is challenged. In reaching your determinations with respect to infringement and invalidity, you must consider each claim of the patent separately.

c. Meaning of terms

The first step in any patent case is to understand the meaning of the words used in the patent claims. It is my job as the judge to determine what the patent claims mean and to instruct you about that meaning. You must accept the meanings I give you and then use those meanings to decide whether or not the asserted claim of the asserted patent at issue is infringed, and whether or not the asserted claim of the patent at issue is invalid.

For purposes of your deliberations, the following terms found in the asserted claims of the '476 patent and the '309 patent mean:

For purposes of your deliberations, the following terms found in the asserted claims of the '987 patent mean:

For both patents, "comprising" or "comprises" means that the invention includes listed requirements, but is not limited to those requirements.

Except for the terms specifically defined above, the terms in the asserted patents should be given their ordinary meaning for someone skilled in the art.

d. Independent and dependent claims

Patent claims may exist in two forms, called independent claims and dependent claims. An independent claim stands on its own and does not refer to any other claim of the patent. A dependent claim refers to at least one other claim in the patent. A dependent claim includes each of the requirements of the other claim or claims to which it refers, as well as the requirements in the dependent claim itself.

For example, a hypothetical patent claim for a table may describe the tabletop, four legs, and glue to hold the legs and tabletop together. That is an example of an independent claim. In that same hypothetical patent, a dependent claim might be one that stated, "the same table in the initial claim, where the tabletop is square."

ii. Infringement

Infringement occurs if each requirement of a claim is found in the accused technology. ST contends that ABS has infringed claims 1, 11 and 15 of the '476 patent and claim 14 of the '309 patent. ABS concedes that it infringes claims 1, 2 and 7 of the '987 patent if it is valid, so you will not be asked to address infringement of that patent.

To succeed on its infringement claim, ST must prove by a preponderance of the evidence that every requirement of the claim in dispute is found in the accused technology exactly as it is in the claim of the patent. You must compare the accused technology with each and every one of the requirements of a claim to determine whether all of the requirements of that claim are met. Because ST accuses both the GSS chip and the single sheath chip, you must make this determination with respect to each chip. You may not compare the accused technology with any example described in the specification of the '476 or '309 patents. For determining infringement, the only correct comparison is between the accused technology and the language of the claim in dispute, including the meaning of any terms I have already defined for you. Therefore, you must reach your decision as to infringement based on the legal requirements for infringement, my instructions about the meaning of the claim language, and the evidence presented to you by the parties.

To determine whether ABS infringed a dependent claim, you must compare the accused technology to both the dependent claim and the independent claim or claims to which the dependent claim refers. For example, in the '476 patent, claim 11 is dependent on claim 1. As such, dependent claim 11 cannot be infringed unless claim 1 is also infringed. If you decide that an independent claim is not infringed, then there cannot be infringement of any dependent claim that refers directly or indirectly to that independent claim.

iii. Invalidity

ABS challenges the validity of claims 1, 11 and 15 of the '476 patent; claim 14 of the '309 patent; and claims 1, 2 and 7 of the '987 patent. Each of the claims is presumed to be valid. For that reason, ABS has the burden of proving invalidity by clear and convincing evidence. You must evaluate and determine separately the validity of each asserted claim of the '476 patent, '309 patent and '987 patent.

a. Prior art

In addressing some of ABS's invalidity defenses, you may need to consider what is disclosed in the "prior art." There is no dispute that the following articles and patents identified by ABS qualify as prior art under the relevant legal standards:

For the Cytonome patents, the date of invention is October 30, 2003.

b. Anticipation

A person cannot obtain a patent if someone else already has made an identical invention. Simply put, the invention must be new. An invention that is not new or novel is said to be "anticipated by the prior art." An "anticipated invention" is not entitled to patent protection. To prove anticipation, ABS must prove by clear and convincing evidence that the claimed invention is not new. Anticipation is determined on a claim-by-claim basis.

ABS contends that claims 1 and 15 of the '476 patent and claim 14 of the '309 patent are anticipated. To anticipate a claim, each and every element in the claim must be present in a single item of prior art arranged or combined in the same way as recited in the claim, and a person with an ordinary level of skill in the field of the invention who looked at the prior art would have been able to make and use the invention disclosed in the claim. The disclosure in the prior art does not have to be in the same words as the claim, but all of the requirements of the claim must be there, either stated or necessarily implied, so that someone of ordinary skill in the art looking at that one prior art reference would be able to make and use at least one embodiment of the claimed invention without undue experimentation. You may not combine two or more items of prior art to prove anticipation.

c. Obviousness

ABS also contends that all of the disputed claims of the '476 patent and '309 patent are invalid because they are obvious. A claimed invention is invalid as "obvious" if it would have been obvious to a person of ordinary skilled in the art of the claimed invention at the time the invention was made. Unlike anticipation, which allows consideration of only one item of prior art, obviousness may be shown by considering more than one item of prior art. Like anticipation, the party seeking to invalidate a claim must prove obviousness by clear and convincing evidence.

The following factors must be evaluated to determine whether ABS has established that plaintiff's claimed invention is obvious:

Each of these factors must be evaluated, although they may be analyzed in any order, and you must perform a separate analysis for each of the claims.

Keep in mind that the existence of each and every element of the claimed invention in the prior art does not necessarily prove obviousness. Most, if not all, inventions rely on building blocks of prior art. In considering whether a claimed invention is obvious, you may (but are not required to) find obviousness if, at the time of the claimed invention, (1) there was a reason that would have prompted a person having ordinary skill in the art to combine the known elements in the way the claimed invention does and (2) a person having ordinary skill would have had a reasonable expectation of success in doing so. In reaching this finding, you may take into account factors such as:

However, you must be careful not to determine obviousness using the benefit of hindsight. Many true inventions seem obvious after the fact. You should put yourself in the position of a person of ordinary skill in the art at the time the claimed invention was made and you should not consider what is known today or what is learned from the teaching of the patent itself.

Finally, you should consider the following factors:

As explained on the verdict form, you will be asked to consider ABS's invalidity defense with respect to each of the asserted claims of the '476 patent, independent claim 1 and dependent claims 11 and 15. If you find in ST's favor that independent claim 1 is not invalid for anticipation or obviousness, then the dependent claims necessarily are also not invalid. If, however, you find in ABS's favor that the independent claim is invalid, then you must still decide whether the dependent claims are invalid.

d. Enablement

The law requires that the "specification" section of the patent contain enough information to enable a person of ordinary skill in the field of invention to make and use the full scope of the claimed invention, without an unreasonable amount of experimentation. A patent does not have to state information that persons of ordinary skill in the field of the invention would be likely to know or could obtain without undue effort. The enablement requirement does not require that the patent disclosure enable one of ordinary skill in the art to make a perfected, commercially viable embodiment, but the patent must provide more than an invitation for further research.

ABS contends that all of the asserted claims of the '987 patent are invalid because they fail to meet this requirement. To succeed on this contention, ABS must prove by clear and convincing evidence that the specification does not enable a person of ordinary skill in the field of invention to make and use the system or method covered by each claim without an unreasonable amount of experimentation. [It has already been determined that each asserted claim of the '987 patent encompasses, among other things, a photo-damage sorter that produces sexed semen at commercially usable speeds, purities, and viability levels.] Whether the amount of experimentation is unreasonable depends on the complexity in the field of the invention and the level of expertise and knowledge of persons of ordinary skill in that field.

As explained on the verdict form, you will be asked to consider enablement with respect to each of the asserted claims of the '987 patent, independent claim 1 and dependent claims 2 and 7. If you find in ST's favor that independent claim 1 is not invalid for lack of enablement, then the dependent claims necessarily are also enabled. If, however, you find in ABS's favor that the independent claim is invalid for lack of enablement, then you must still decide whether the dependent claims are enabled.

B. Breach of Contract Counterclaim

i. Failure to Comply with Purity Requirement

ABS alleges that ST breached the parties' 2012 Agreement. To prove a breach of contract, ABS must prove by a preponderance of the evidence that during the term of the 2012 Agreement, ST failed to comply with the purity requirement of that contract by delivering straws containing a purity of less than 85% primary gender sperm.

I already have determined that the flow cytometer reanalysis is the proper method for measuring purity for the purpose of determining compliance with the 2012 Agreement. You may, however, consider the availability of and results from other testing methods to determine whether the purity tests run by ST were performed or reported properly, as well as any other evidence that makes it more or less likely that the tests run by ST were performed or reported properly. If you conclude, in light of all of the evidence, that all straws ST provided to ABS would have met the purity requirement as measured by a properly performed flow cytometer reanalysis, you may not find a failure to comply with the Agreement based on the results of other tests.

ii. Material Breach

If you find that there was a failure to comply, then you must decide whether the failure to comply was material. The circumstances to consider in determining whether a failure to comply is material include:

iii. Waiver Defense

Even if you find a material breach of the 2012 Agreement, ST contends that ABS waived any right it may have had to terminate the Agreement based on ST's material breach. It is ST's burden to demonstrate waiver by a preponderance of the evidence.

Waiver is an intentional surrender of a known right or intentional conduct inconsistent with claiming the right. A party to a contract can waive its right to terminate the contract by treating the contract as continuing despite an alleged material breach.

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WISCONSIN

We, the jury, for our special verdict, find as follows:

I. Patent Questions

A. Infringement

Question No. 1: Has ST proven a preponderance of the evidence that ABS's GSS chip infringes independent claim 1 of the '476 patent?

If you answered "Yes" to Question No. 1, please answer Question No. 2. If you answered "No" to Question No. 1, please skip Question No. 2 and proceed to Question No. 3.

Question No. 2: Has ST proven a preponderance of the evidence that ABS's GSS chip infringes any of the following dependent claims of the '476 patent?

Question No. 3: Has ST proven a preponderance of the evidence that ABS's GSS chip infringes independent claim 14 of the '309 patent?

Question No. 4: Has ST proven a preponderance of the evidence that ABS's single sheath chip infringes independent claim 1 of the '476 patent?

If you answered "Yes" to Question No. 4, please answer Question No. 5. If you answered "No" to Question No. 4, please skip Question No. 5 and proceed to Question No. 6.

Question No. 5: Has ST proven a preponderance of the evidence that ABS's single sheath chip infringes any of the following dependent claims of the '476 patent?

Question No. 6: Has ST proven a preponderance of the evidence that ABS's single sheath chip infringes independent claim 14 of the '309 patent?

B. Invalidity

Question No. 7: Has ABS proven by clear and convincing evidence that independent claim 1 of the '476 patent is invalid for anticipation or obviousness?

If you answered "Yes" to Question No. 7, please answer Question No. 8. If you answered "No" to Question No. 7, please skip Question No. 8 and proceed to Question No. 9.

Question No. 8: Has ABS proven by clear and convincing evidence that any of the following dependent claims of the '476 patent are invalid for anticipation or obviousness?

Question No. 9: Has ABS proven by clear and convincing evidence that claim 14 of the '309 patent is invalid for anticipation or obviousness?

Question No. 10: Has ABS proven by clear and convincing evidence that independent claim 1 of the '987 patent is invalid for lack of enablement?

If you answered "Yes" to Question No. 10, please answer Question No. 11. If you answered "No" to Question No. 10, please skip Question No. 11 and proceed to Question No 12. Question No. 11: Has ABS proven by clear and convincing evidence that any of the following dependent claims of the '987 patent are invalid for lack of enablement?

II. Breach of Contract Questions

Question No. 12: Has ABS proven by a preponderance of the evidence that ST failed to comply with the 85% purity requirement of the 2012 Agreement?

If you answered "Yes" to Question No. 12, please answer Question No. 13. If you answered "No" to Question No. 12, please proceed to the end of the verdict form and sign and date it.

Question No. 13: Has ABS proven by a preponderance of the evidence that ST's breach of the 2012 Agreement was material?

If you answered "Yes" to Question No. 13, please answer Question No. 14. If you answered "No" to Question No. 13, please proceed to the end of the verdict form and sign and date it.

Question No. 14: Has ST proven by a preponderance of the evidence its waiver defense?