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Masimo Corporation v. Philips Electronics North America Corporation

United States District Court, Third Circuit

June 14, 2013

MASIMO CORPORATION, Plaintiff,
v.
PHILIPS ELECTRONICS NORTH AMERICA CORPORATION and PHILIPS MEDIZEN SYSTEME BOBLINGEN GmbH, Defendant.

MEMORANDUM ORDER

MARY PAT THYNGE, Magistrate Judge.

I. INTRODUCTION

In February 2009, Masimo Corporation ("Masimo") filed suit alleging Philips Electronics North America Corporation and Philips Medizin Böblingen GmbH (collectively, "Philips") infringed various patents dealing with pulse oximetry.[1] Philips responded raising patents against Masimo involving the same technology. Previously, the court addressed the parties motions for summary judgment on liability and on experts. Philips now moves for summary judgment on two issues: (1) willful infringement, [2] and (2) lost profits damages.[3]

II. LEGAL STANDARDS

A. Summary Judgment

"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."[4] Summary judgment is appropriate "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."[5] The moving party bears the burden of demonstrating the absence of a genuine issue of material fact, [6] by citing to "particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials, "[7] or by "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact."[8] If the moving party has carried its burden, the nonmovant must "come forward with specific facts showing that there is a genuine issue for trial."[9] "[A]ll reasonable inferences, " will be drawn by the court "in favor of the nonmoving party, and it may not make credibility determinations or weight the evidence."[10]

The non-moving party must, "do more than simply show that there is some metaphysical doubt as to the material fact" to defeat a motion for summary judgment.[11] However, the "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment;" a factual dispute is genuine only where "the evidence is such that a reasonable jury could return a verdict for the non-moving party."[12] Additionally, "[i]f the evidence is merely colorable, or is not significantly probative, summary judgment may be granted."[13] Thus, the "mere existence of a scintilla of evidence" in support of the non-moving party's position is insufficient to defeat a motion for summary judgment; there must be "evidence on which the jury could reasonably find" for the non-moving party.[14]

III. ANALYSIS

A. Wilfulness

The Federal Circuit has set forth a two-prong test for establishing willful infringement.[15] The objective' first prong requires the patentee to show, "by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent."[16] Once the first prong is satisfied, the plaintiff must satisfy the subjective' second prong, "that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer."[17] The plaintiff must prove the objective prong "by clear and convincing evidence as a predicate to the jury's consideration of the subjective prong."[18] Because consideration of the subjective second prong occurs only if the plaintiff proves the objective prong, "[s]hould the court determine that the infringer's reliance on a defense was not objectively reckless, it cannot send the question of willfulness to the jury."[19] When considering the objective first prong, the Federal Circuit has stated, "the answer to whether an accused infringer's reliance on a particular issue or defense is reasonable is a question for the court when the resolution of that particular issue or defense is a matter of law."[20]

Masimo contends summary judgment is inappropriate because Philips' defenses constitute questions of fact, or mixed questions of law and fact, which should be sent to a jury.[21] Circumstances may arise when an alleged infringer's defense to willful infringement present separate issues of fact and law. Despite such mixed questions, the Federal Circuit has determined, "[w]e believe that the court is in the best position for making the determination of reasonableness. This court therefore holds that the objective determination of recklessness, even though predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law."[22] The Federal Circuit provided further clarification, stating that,

[w]hen a defense or noninfringement theory asserted by an infringer is purely legal (e.g., claim construction), the objective recklessness of such a theory is a purely legal question to be determined by the judge. [...] When the objective prong turns on a fact question [...] or on legal questions dependent on the underlying facts, as related, for example, to questions of obviousness, the judge remains the final arbiter of whether the defense was reasonable.[23]

While a judge "may" permit a jury to determine underlying facts when considering the first objective prong of Seagate, this approach is not mandatory because, "the ultimate legal question of whether a reasonable person would have considered there to be a high likelihood of infringement of ...


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