The Federal Circuit has thrown out a jury's finding that lighting manufacturer Opti-Luxx owed $23,000 for infringing a Canadian competitor's two patents covering illuminated school bus signs.

In a precedential decision Thursday, a three-judge panel of the appellate court reversed the lower court's judgment that Opti-Luxx infringed a utility patent, and it vacated the finding that it infringed a separate design patent.

The Federal Circuit concluded that the design patent verdict was based on an incorrect claim construction of the word "transparency," so it vacated that part of the holding and remanded it for further proceedings under the correct construction.

The panel said that "while the district court may consider extrinsic evidence, such as the testimony of an expert witness, any testimony that is 'at odds with … the written record of the patent,' should be afforded no weight."

It also said that on remand, the lower court would have "to determine whether such an art-specific meaning of the term has been established such that the jury should be instructed as to such a meaning."

"But in this respect, we caution that 'conclusory' testimony by experts unsupported by reliable extrinsic material — such as special-purpose dictionaries or other objective evidence — is insufficient," the panel said.

As for the utility patent, the jury found infringement under the doctrine of equivalents, which allows for a finding of infringement even if patent claims aren't literally infringed. But the Federal Circuit reversed the judgment, saying no reasonable jury could have reached that conclusion.

The utility patent requires that the sign can be customized without removing it, but Opti-Luxx's product can't do that, the appellate court said.

"The patent indicates that the claimed invention can 'removably receive the sign' so that the signs can be exchanged, customized, or serviced without removing the entire installation," the panel said. "Smartrend's expert witness … conceded that the accused product is 'not capable of doing that.'"

About two years ago, a jury in the U.S. District Court for the Western District of Michigan found that Opti-Luxx willfully infringed both patents, and awarded Smartrend Manufacturing Group $23,308 in damages.

Smartrend first sued Opti-Luxx in November 2021 after notifying its competitor of the alleged infringement and its loss of customers. Smartrend said it alerted Opti-Luxx to the issue in February 2021, writing to the company to inform it of then-pending patent applications covering the illuminated signs.

Gaëtan Gerville-Réache, an attorney for Opti-Luxx, said in a statement to Law360 on Thursday that he was happy with the appellate court's decision.

"The Federal Circuit's opinion above all instructs district courts that they should not accept the conclusory opinions of experts simply because they are qualified experts, either at the claim construction phase or at trial," he said. "Expert opinions need to be closely examined to confirm they are based on actual evidence and do not contradict the patent or law, such as the test for the doctrine of equivalents."

Counsel for Smartrend did not immediately respond to requests for comment Thursday.

The patents-in-suit are U.S. Design Patent No. D932,930 and U.S. Patent No. 11,348,491.

U.S. Circuit Judges Timothy B. Dyk, Richard Linn and Leonard P. Stark sat on the panel for the Federal Circuit.

Smartrend is represented by Thomas W. Cunningham, John P. Rondini and Dustin R. Zak of Brooks Kushman PC.

Opti-Luxx is represented by Gaëtan Gerville-Réache, Vito A. Ciaravino and Douglas A. Dozeman of Warner Norcross + Judd LLP.

The case is Smartrend Manufacturing Group Inc. v. Opti-Luxx Inc., case number 24-1616, in the U.S. Court of Appeals for the Federal Circuit.