Penn International Industries, Incorporated, Plaintiff-Appellant/cross v. New World Manufacturing, Inc., Defendants-Appellees/cross

This case involves a patent infringement action brought by Penn International Industries, Inc. [“Penn”] against New World Manufacturing, Inc., and its principals, Jerry and Rebecca Moore [“New World”]. On appeal, Penn challenges the district court’s holding that its patent for an air frame waterbed is invalid because the subject matter was obvious under 35 U.S.C. § 103 . On cross-appeal, New World alleges that the district court abused its discretion in denying attorneys’ fees to it. We affirm the district court on both issues.

I.

The patent in issue, U.S. Patent 3,778,852 [“Penn patent”], is for a waterbed made up of an inner chamber of water framed by an outer chamber of air. The waterbed consists of a seamless top sheet, a seamless bottom sheet, a continuous outer side wall, and a continuous inner wall, both slightly curved at the corners, all made of polyvinyl chloride. The inner wall is formed by an inner sheeting sealed to the top and bottom sheets at a point inward from their edges. This inner wall and the top and bottom sheets form the inner chamber. The top and bottom sheets, however, extend beyond this inner wall to the' outer wall and are sealed to the outer wall to…