## Facts

- Donald G. Richardson developed a 1974 motorcycle rear-wheel suspension using a single shock absorber and linkage (including a bell crank and connecting rod) and obtained U.S. Patent No. 3,907,332.
- Richardson and Suzuki Motor Co., Ltd. entered an Option and License Agreement granting Suzuki a time-limited exclusive option to test the system and decide whether to take a patent license, with confidentiality and limited-use obligations covering Richardson’s proprietary technical information and improvements.
- During the option period, Richardson and a colleague developed an alternate shock mount improvement and disclosed it to Suzuki under the agreement.
- Suzuki filed patent applications in Japan and the United States covering the disclosed alternate shock mount (and an additional Suzuki modification), later associated with the “Tamaki” patents.
- Suzuki declined to exercise the license option but began producing motorcycles using linkage-type, single-shock rear suspensions that Richardson alleged infringed claim 9 of the ’332 patent and misused his confidential information.
- Richardson sued for patent infringement and asserted state-law claims including breach of contract, fraud, and trade secret misappropriation; Suzuki defended on invalidity and noninfringement and contested the state-law theories.
- After jury trials and post-trial rulings, the district court entered judgment on various verdicts, ordered a new trial on certain trade secret items (items 5 and 6), and resolved motions affecting damages, willfulness, prejudgment interest, and requested patent assignment; both sides appealed.

## Issues

1. Whether claim 9 of the ’332 patent was invalid for anticipation or obviousness.
2. Whether Suzuki’s accused motorcycles infringed claim 9 (literally or under the doctrine of equivalents).
3. Whether a “minor infringement” jury instruction improperly affected patent damages.
4. Whether Suzuki breached contractual confidentiality and limited-use obligations under the Option and License Agreement.
5. Whether particular disclosed items qualified as trade secrets and whether Suzuki misappropriated them, including whether a new trial on items 5 and 6 was proper.
6. Whether Richardson was entitled to assignment or other relief concerning Suzuki’s later-filed “Tamaki” patents allegedly derived from Richardson’s disclosures.
7. Whether the district court properly handled willful infringement, enhanced damages/exceptional case considerations, and prejudgment interest.
8. Whether the fraud and punitive-damages determinations were legally and factually supportable.

## Decision

- The Federal Circuit affirmed in part, reversed in part, vacated in part, and remanded.
- The court upheld the validity of claim 9 against anticipation and obviousness challenges.
- The court sustained infringement findings as to certain Suzuki models based on substantial evidence.
- The court held that the “minor infringement” instruction was improper because infringement is not a matter of degree, and it vacated and remanded aspects of the patent-damages determination potentially affected by that instruction.
- On trade secrets, the court affirmed parts of the verdicts but concluded the district court erred in ordering a new trial on certain trade secret items, and it directed further proceedings consistent with the correct protectability standards.
- On contract/confidentiality, the court recognized enforceable contractual protections for proprietary information and reviewed liability and scope issues, remanding where necessary to conform relief to the agreement and the evidentiary record.
- On the Tamaki patents, the court rejected a categorical assignment theory based solely on sole inventorship, analyzed derivation from disclosures and appropriate relief, and remanded portions for further determination.
- The court vacated the denial of prejudgment interest and required reconsideration under the governing compensatory standard; it also required reconsideration of willfulness-related issues.

## Legal Principles

- Anticipation requires a single prior art reference to disclose every claim limitation arranged as in the claim; absence of the claimed combination defeats anticipation.
- Obviousness may be rejected where the evidence supports that the claimed combination was not a routine variation in view of the state of the art and the factfinder reasonably credits secondary considerations and technical context.
- Patent infringement is a binary legal status; damages should not be reduced on a theory of “minor” or “insubstantial” infringement once liability is found.
- Contractual confidentiality and limited-use clauses can protect technical information disclosed in evaluation or licensing talks even when some information may not satisfy trade secret elements.
- Under California trade secret standards, protectable information must have economic value from not being generally known and must be subject to reasonable secrecy measures; disclosure under confidentiality to a prospective licensee can support protectability.
- Equitable relief concerning later-filed patents allegedly derived from confidential disclosures requires careful analysis of inventorship, contribution, and the connection between the disclosures and specific claimed subject matter.
- Prejudgment interest is generally part of full compensation in intellectual-property remedies and should be denied only for legally sufficient reasons; willfulness determinations must be addressed under the correct legal framework when the record supports submission or reconsideration.

## Conclusion

The Federal Circuit largely sustained Richardson’s core patent validity and infringement wins but rejected the “minor infringement” damages concept and required recalculation and reconsideration of damages-related matters, including prejudgment interest and willfulness; it also corrected aspects of the trade secret and contract analyses and remanded for tailored relief, including issues tied to Suzuki’s later patent filings.


Richardson v. Suzuki Motor Co., 868 F.2d 1226 (Fed. Cir. 1989)