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Intellectual Ventures I, LLC v. Canon Inc.

United States District Court, D. Delaware

May 18, 2015

INTELLECTUAL VENTURES I, LLC and INTELLECTUAL VENTURES II, LLC, Plaintiffs,
v.
CANON INC. and CANON U.S.A., INC., Defendants

For Plaintiffs: John M. Desmarais, Esquire, Alan S. Kellman, Esquire, Justin P.D. Wilcox, Esquire, John C. Spaccarotella, Esquire, Jason Berrebi, Esquire, Paul A. Bondor, Esquire, Jonas R. McDavit, Esquire, Tamir Packin, Esquire, Jeffery Seddon, Esquire, and Edward B. Terchunian, Esquire of Desmarais LLP, Of Counsel, Brian E. Farnan, Esquire, Michael J. Farnan, Esquire, and Rosemary Jean Piergiovanni, Esquire of Farnan, LLP, Wilmington, Delaware.

For Defendants: Nicholas M. Cannella, Esquire, Michael P. Sandonato, Esquire, Michael P. McGraw, Esquire, Dillon J. Murphy, Esquire, and Peter D. Shapiro, Esquire of Fitzpatrick, Cella, Harper & Scinto, Of Counsel, Jack B. Blumenfeld, Esquire and Julia Heaney, Esquire of Morris, Nichols, Arsht & Tunnell LLP, Wilmington, Delaware.

MEMORANDUM OPINION

Sue L. Robinson, District Judge.

I. INTRODUCTION

On September 9, 2011, plaintiffs Intellectual Ventures I, LLC (" IV I" ) and Intellectual Ventures II, LLC (" IV II" ) (collectively " IV" ) filed suit in this district against defendants Canon Inc., Canon U.S.A., Inc. (collectively " Canon" ), Olympus Corporation, Olympus Corporation of the Americas, Olympus America Inc., and Olympus Imaging America Inc. (collectively " Olympus" ), alleging infringement of nine patents: U.S. Patent Nos. 5,754,348 (" the '348 patent" ), 6,121,960 (" the '960 patent" ), 6,221,686 (" the '686 patent" ), 6,023,081 (" the '081 patent" ), 6,979,587 (" the '587 patent" ), 5,844,264 (" the '264 patent" ), 6,181,836 (" the '836 patent" ), 6,412,953 (" the '953 patent" ), and 7,733,368 (" the '368 patent" ). (D.I. 1) All claims and counterclaims asserted between IV and Olympus were dismissed with prejudice on December 11, 2012. (D.I. 78) IV voluntarily withdrew its claims as to the '836 and '368 patents (D.I. 81), and filed a second amended complaint against Canon on January 7, 2013 adding U.S. Patent No. 7,365,298 (" the '298 patent" ) (D.I. 89). Six patents (" the patents-in-suit" ) remain asserted in the present case.

On October 30, 2013, IV filed a motion for summary judgment of infringement and nonobviousness (D.I. 163), and Canon filed a motion for summary judgment of noninfringement (D.I. 168) and invalidity (D.I. 167). In a memorandum opinion and order dated April 10, 2014, the court resolved several summary judgment motions, granting, inter alia, IV's motion for summary judgment of infringement of claims 14 and 16 of the '686 patent and denying in part Canon's motion for summary judgment of non-infringement of claim 3 of the '081 patent.[1] (D.I. 252; D.I. 253) A five-day jury trial was held on April 28 -- May 2, 2014 on infringement and validity of claim 3 of the '081 patent, and validity of claims 14 and 16 of the '686 patent (" trial 1" ). On May 2, 2014, the jury returned a verdict that claim 3 of the '081 patent was valid and infringed and that claims 14 and 16 of the '686 patent were valid. A second six-day jury trial was held on May 5 - 12, 2014 on the infringement and validity of claims 1-3 of the '348 patent and claims 19 and 20 of the '960 patent (" trial 2" ). On May 12, 2014, the jury returned a verdict that claims 1-3 of the '348 patent and claims 19 and 20 of the '960 patent were valid but not infringed. Presently before the court are the following motions: (1) Canon's motion for judgment as a matter of law (" JMOL" ) regarding the '081 and '686 patents or, in the alternative, for a new trial (D.I. 312); (2) Canon's motion for JMOL regarding the '348 and '960 patents or, in the alternative, for a new trial (D.I. 315); and (3) IV's motion for JMOL regarding the '960 and '348 patents or, in the alternative, for a new trial (D.I. 319). The court has jurisdiction pursuant to 28 U.S.C. § 1338.

II. BACKGROUND

A. The Parties

IV I and II are limited liability companies organized and existing under the laws of the State of Delaware, with their principal place of business in Bellevue, Washington. (D.I. 1 at ¶ ¶ 1-2) IV I owns the '348 patent. ( Id. ¶ ¶ 15) IV II owns the '081, '960, '686, '587, and '298 patents. ( Id. at ¶ ¶ 19, 21, 25, 29; D.I. 89 at ¶ ¶ 21)

Canon Inc. is a corporation organized and existing under the laws of Japan, with its principal place of business in Tokyo, Japan. ( Id. at ¶ 3) Canon U.S.A., Inc. is a corporation organized and existing under the laws of New York, with its principal place of business in Lake Success, New York. ( Id. at ¶ 4) It makes, manufactures, and/or sells the accused products. ( Id. at ¶ 19)

B. The Technology

The '081, '686, '348 and '960 patents relate to a variety of technologies regarding the manufacture and use of digital cameras. The '081 and '686 patents relate to methods for making and configurations of semiconductor image sensors. The '348 patent relates to digital image magnification, and the '960 patent relates to displaying data on touch screens. The court discusses each patent in more detail infra.

III. STANDARDS

A. Renewed Motion for Judgment as a Matter of Law

To prevail on a renewed motion for judgment as a matter of law following a jury trial, the moving party " 'must show that the jury's findings, presumed or express, are not supported by substantial evidence or, if they were, that the legal conclusions implied [by] the jury's verdict cannot in law be supported by those findings.'" Pannu v. Iolab Corp., 155 F.3d 1344, 1348 (Fed. Cir. 1998) (quoting Perkin--Elmer Corp. v. Computervision Corp., 732 F.2d 888, 893 (Fed. Cir. 1984)). " 'Substantial' evidence is such relevant evidence from the record taken as a whole as might be acceptable by a reasonable mind as adequate to support the finding under review." Perkin --Elmer Corp., 732 F.2d at 893. In assessing the sufficiency of the evidence, the court must give the non-moving party, " as [the] verdict winner, the benefit of all logical inferences that could be drawn from the evidence presented, resolve all conflicts in the evidence in his favor, and in general, view the record in the light most favorable to him." Williamson v. Consol. Rail Corp., 926 F.2d 1344, 1348 (3d Cir. 1991); Perkin-Elmer Corp., 732 F.2d at 893. The court may not determine the credibility of the witnesses nor " substitute its choice for that of the jury between conflicting elements of the evidence." Perkin --Elmer Corp., 732 F.2d at 893. In sum, the court must determine whether the evidence reasonably supports the jury's verdict. See Dawn Equip. Co. v. Kentucky Farms Inc., 140 F.3d 1009, 1014 (Fed. Cir. 1998).

B. Motion for a New Trial

Federal Rule of Civil Procedure 59(a) provides, in pertinent part:

A new trial may be granted to all or any of the parties and on all or part of the issues in an action in which there has been a trial by jury, for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States.

Fed. R. Civ. P. 59(a). The decision to grant or deny a new trial is within the sound discretion of the trial court and, unlike the standard for determining judgment as a matter of law, the court need not view the evidence in the light most favorable to the verdict winner. See Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S.Ct. 188, 66 L.Ed.2d 193 (1980); Olefins Trading, Inc. v. Han Yang Chem. Corp., 9 F.3d 282 (3d Cir. 1993); LifeScan Inc. v. Home Diagnostics, Inc., 103 F.Supp.2d 345, 350 (D. Del. 2000) (citations omitted); see also 9A Wright & Miller, Federal Practice and Procedure § 2531 (2d ed. 1994) (" On a motion for new trial the court may consider the credibility of witnesses and the weight of the evidence." ). Among the most common reasons for granting a new trial are: (1) the jury's verdict is against the clear weight of the evidence, and a new trial must be granted to prevent a miscarriage of justice; (2) newly-discovered evidence exists that would likely alter the outcome of the trial; (3) improper conduct by an attorney or the court unfairly influenced the verdict; or (4) the jury's verdict was facially inconsistent. See Zarow--Smith v. N.J. Transit Rail Operations, 953 F.Supp. 581, 584-85 (D.N.J.1997) (citations omitted). The court must proceed cautiously, mindful that it should not simply substitute its own judgment of the facts and the credibility of the witnesses for those of the jury. Rather, the court should grant a new trial on the basis that the verdict was against the weight of the evidence only where a miscarriage of justice would result if the verdict were to stand. See Williamson, 926 F.2d at 1352; EEOC v. Del. Dep't of Health & Soc. Servs., 865 F.2d 1408, 1413 (3d Cir. 1989).

IV. DISCUSSION

A. Standards

1. Infringement

A patent is infringed when a person " without authority makes, uses or sells any patented invention, within the United States . . . during the term of the patent." 35 U.S.C. § 271(a). To prove direct infringement, the patentee must establish, by a preponderance of the evidence, that one or more claims of the patent read on the accused device literally or under the doctrine of equivalents. See Advanced Cardiovascular Sys., Inc. v. Scimed Life Sys., Inc., 261 F.3d 1329, 1336 (Fed. Cir. 2001). A two-step analysis is employed in making an infringement determination. See Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995). First, the court must construe the asserted claims to ascertain their meaning and scope. See id. Construction of the claims is a question of law subject to de novo review. See Cybor Corp. v. FAS Techs., 138 F.3d 1448, 1454 (Fed. Cir. 1998). The trier of fact must then compare the properly construed claims with the accused infringing product. See Markman, 52 F.3d at 976. This second step is a question of fact. See Bai v. L& L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998).

" Direct infringement requires a party to perform each and every step or element of a claimed method or product." Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1320 (Fed. Cir. 2009) (internal quotation marks omitted). " If any claim limitation is absent from the accused device, there is no literal infringement as a matter of law." Bayer AG v. Elan Pharm. Research Corp., 212 F.3d 1241, 1247 (Fed. Cir. 2000). If an accused product does not infringe an independent claim, it also does not infringe any claim depending thereon. See Wahpeton Canvas Co. v. Frontier, Inc., 870 F.2d 1546, 1553 (Fed. Cir. 1989). However, " [o]ne may infringe an independent claim and not infringe a claim dependent on that claim." Monsanto Co. v. Syngenta Seeds, Inc., 503 F.3d 1352, 1359 (Fed. Cir. 2007) (quoting Wahpeton Canvas, 870 F.2d at 1552) (internal quotations omitted). The patent owner has the burden of proving infringement and must meet its burden by a preponderance of the evidence. See SmithKline Diagnostics, Inc. v. Helena Lab. Corp., 859 F.2d 878, 889 (Fed. Cir. 1988) (citations omitted).

To establish indirect infringement, a patent owner has available two theories: active inducement of infringement and contributory infringement. See 35 U.S.C. § 271(b) & (c). To establish active inducement of infringement, a patent owner must show that an accused infringer " knew or should have known [their] actions would induce actual infringements." DSU Med. Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1306 (Fed. Cir. 2006). To establish contributory infringement, a patent owner must show that an accused infringer sells " a component of a patented machine ... knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use." Golden Blount, Inc. v. Robert H. Peterson Co., 365 F.3d 1054, 1061 (Fed. Cir. 2004) (quoting 35 U.S.C. § 271(c)). Liability under either theory, however, depends on the patent owner having first shown direct infringement. Joy Technologies, Inc. v. Flakt, Inc., 6 F.3d 770, 774 (Fed. Cir. 1993).

2. Invalidity

a. Anticipation

Under 35 U.S.C. § 102(e),

a person shall be entitled to a patent unless an application for patent, published under section 122(b), by another filed in the United States before the invention by the applicant for patent ... or a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent.

A claim is anticipated only if each and every limitation as set forth in the claim is found, either expressly or inherently described, in a single prior art reference. Verdegaal Bros., Inc. v. Union Oil Co., 814 F.2d 628, 631 (Fed. Cir. 1987). A single prior art reference may expressly anticipate a claim where the reference explicitly discloses each and every claim limitation. However, the prior art need not be ipsissimis verbis (i.e., use identical words as those recited in the claims) to be expressly anticipating. Structural Rubber Prods. Co. v. Park Rubber Co., 749 F.2d 707, 716 (Fed. Cir. 1984). A single prior art reference also may anticipate a claim where one of ordinary skill in the art would have understood each and every claim limitation to have been disclosed inherently in the reference. Cont'l Can Co. USA Inc. v. Monsanto Co., 948 F.2d 1264, 1268 (Fed. Cir. 1991). The Federal Circuit has explained that an inherent limitation is one that is necessarily present and not one that may be established by probabilities or possibilities. Id. That is, " the mere fact that a certain thing may result from a given set of circumstances is not sufficient." Id. The Federal Circuit also has observed that " inherency operates to anticipate entire inventions as well as single limitations within an invention." Schering Corp. v. Geneva Pharms. Inc., 339 F.3d 1373, 1380 (Fed. Cir. 2003). Moreover, recognition of an inherent limitation by a person of ordinary skill in the art before the critical date is not required to establish inherent anticipation. Id. at 1377.

Even if the prior art discloses each and every limitation set forth in a claim, such disclosure will not suffice under 35 U.S.C. § 102 if it is not enabling. In re Borst, 345 F.2d 851, 855, 52 C.C.P.A. 1398, 1965 Dec. Comm'r Pat. 683 (C.C.P.A. 1965). " Long ago our predecessor court recognized that a non-enabled disclosure cannot be anticipatory (because it is not truly prior art) if that disclosure fails to 'enable one of skill in the art to reduce the disclosed invention to practice.'" Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1354 (Fed. Cir. 2003) (citations omitted). The patentee bears the burden to show that the prior art reference is not enabled and, therefore, disqualified as relevant prior art for an anticipation inquiry. Id. at 1355.

An anticipation inquiry involves two steps. First, the court must construe the claims of the patent in suit as a matter of law. Key Pharms. v. Hereon Labs. Corp., 161 F.3d 709, 714 (Fed. Cir. 1998). Second, the finder of fact must compare the construed claims against the prior art to determine whether the prior art discloses the claimed invention. Id. The burden of proof rests on the party asserting invalidity and can be met only by clear and convincing evidence. Microsoft Corp. v. i4i Ltd. P'ship, ___ U.S. ___, 131 S.Ct. 2238, 2242, 180 L.Ed.2d 131 (2011) (" We consider whether [35 U.S.C.] § 282 requires an invalidity defense to be proved by clear and convincing evidence. We hold that it does." ).

b. Obviousness

" A patent may not be obtained ... if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art." 35 U.S.C. § 103(a). Obviousness is a question of law, which depends on underlying factual inquiries.

Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented.

KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007) (quoting Graham v. John Deere Co. of Kansas City, 383 U.S. 1,17-18, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966)).

" [A] patent composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art." KSR, 550 U.S. at 418. Likewise, a defendant asserting obviousness in view of a combination of references has the burden to show that a person of ordinary skill in the relevant field had a reason to combine the elements in the manner claimed. Id. at 418-19. The Supreme Court has emphasized the need for courts to value " common sense" over " rigid preventative rules" in determining whether a motivation to combine existed. Id. at 419-20. " [A]ny need or problem known in the field of endeavor at the time of invention and addressed by the patent can provide a reason for combining the elements in the manner claimed." Id. at 420. In addition to showing that a person of ordinary skill in the art would have had reason to attempt to make the composition or device, or carry out the claimed process, a defendant must also demonstrate that " such a person would have had a reasonable expectation of success in doing so." PharmaStem Therapeutics, Inc. v. ViaCell, Inc., 491 F.3d 1342, 1360 (Fed. Cir. 2007).

A combination of prior art elements may have been " obvious to try" where there existed " a design need or market pressure to solve a problem and there [were] a finite number of identified, predictable solutions" to it, and the pursuit of the " known options within [a person of ordinary skill in the art's] technical grasp" leads to the anticipated success. Id. at 421. In this circumstance, " the fact that a combination was obvious to try might show that it was obvious under § 103." Id.

A fact finder is required to consider secondary considerations, or objective indicia of nonobviousness, before reaching an obviousness determination, as a " check against hindsight bias." See In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 676 F.3d 1063, 1079 (Fed. Cir. 2012). " Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented." Graham, 383 U.S. at 17-18.

" Because patents are presumed to be valid, see 35 U.S.C. § 282, an alleged infringer seeking to invalidate a patent on obviousness grounds must establish its obviousness by facts supported by clear and convincing evidence." Kao Corp. v. Unilever U.S., Inc., 441 F.3d 963, 968 (Fed. Cir. 2006) (citation omitted). In conjunction with this burden, the Federal Circuit has explained that,

[w]hen no prior art other than that which was considered by the PTO examiner is relied on by the attacker, he has the added burden of overcoming the deference that is due to a qualified government agency presumed to have properly done its job, which includes one or more examiners who are assumed to have some expertise in interpreting the references and to be familiar from their work with the level of skill in the art and whose duty it is to issue only valid patents.

PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 1304 (Fed. Cir. 2008) (quoting Am. Hoist & Derrick Co. v. Sowa & Sons, 725 ...


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