United States District Court, D. Delaware
MEMORANDUM OPINION AND ORDER
WILLIAM C. BRYSON, UNITED STATES CIRCUIT JUDGE.
the Court are two motions brought by plaintiff Sonos, Inc.,
that seek summary judgment on five of the affirmative
defenses asserted by defendants D&M Holdings Inc. d/b/a
The D Group, D&M Holdings U.S. Inc., and Denon
Electronics (USA), LLC (collectively, "D&M").
Specifically, Sonos moves for summary judgment on
D&M's affirmative defenses of patent exhaustion,
patent misuse, prosecution laches, intervening rights, and
two of D&M's theories of invalidity. Dkt. Nos. 289,
295. On October 30, 2017, the Court held a hearing on the
motions, at which the Court ruled on some of the issues and
took some under submission. This order addresses all of the
issues raised by the parties in the two motions. Sonos's
motions are GRANTED as to patent exhaustion, patent misuse,
prosecution laches, and invalidity; and GRANTED in part and
DENIED in part as to intervening rights.
is a manufacturer of wireless audio devices. On October 21,
2014, Sonos brought suit against D&M, a direct competitor
that had launched its own wireless audio system called
"HEOS by Denon." Sonos initially alleged that
D&M had infringed 12 of Sonos's patents. Dkt. No. 263
Â¶Â¶ 12, 15-16, 25-167. At present, Sonos is asserting eight of
those patents against D&M: U.S. Patent Nos. 7, 571, 014
("the '014 patent"), 8, 588, 949 ("the
'949 patent"), 8, 938, 312 ("the '312
patent"), 9, 042, 556 ("the '556 patent"),
9, 195, 258 ("the '258 patent"), 9, 202, 509
("the '509 patent"), 9, 213, 357 ("the
'357 patent"), and 9, 219, 959 ("the '959
patent"). See Dkt. No. 350, at 1 n.l. Those patents
cover five features offered in both Sonos's and
D&M's products. First, the synchronization patents
(the '258 and '357 patents) allow for synchronized
audio playback between two or more speakers. Second, the
group volume control patents (the '014 and '949
patents) allow for the volume of two or more speakers or
speaker groups to be adjusted simultaneously. Third, the
pairing patents (the '959 and '509 patents) allow for
two or more separate speakers to be paired to provide
multi-channel sound. Fourth, the orientation patent (the
'556 patent) shapes the audio output based on the
orientation-e.g., horizontal or vertical-of the speaker.
Finally, the autoplay patent (the '312 patent) allows a
speaker to monitor for audio signals from an external audio
source, such as the speaker's line-in input connector,
and select that source for playback when that external source
begins outputting audio signals. The two group volume control
patents and one of the synchronization patents (the '258
patent) are scheduled to be tried in a bellwether trial
beginning December 11, 2017.
moved for summary judgment on D&M's affirmative
defense of patent exhaustion. In its responsive brief,
D&M stated that it has abandoned the affirmative defense
of patent exhaustion. Dkt. No. 343, at 1 n. l. The Court
therefore grants summary judgment to Sonos on D&M's
pleaded defense of patent exhaustion.
moved for summary judgment on D&M's affirmative
defense of patent misuse. At the October 30, 2017, hearing,
D&M announced that it was not pursuing the defense of
patent misuse. The Court therefore grants summary judgment to
Sonos on D&M's pleaded defense of patent misuse.
moved for summary judgment on D&M affirmative defense of
prosecution laches. At the October 30, 2017, hearing, D&M
announced that it was not pursuing the defense of prosecution
laches. The Court therefore grants summary judgment to Sonos
on D&M's pleaded defense of prosecution laches.
asserts the affirmative defense of absolute intervening
rights as to the '949 and '959 patents, both of which
underwent reexamination. The defense of absolute intervening
rights allows a party whose products infringe a reissued or
reexamined patent to continue to use or sell specific
products that were made, purchased, or used before the
reissuance or reexamination, if the asserted claim was not in
the original patent, so long as the accused infringer began
its infringing activity before the patent was reissued or
reexamined. 35 U.S.C. § 252 (second paragraph, first
sentence); Id. § 307(b) (section 252 applicable
to reexamined claims); see also Marine Polymer Techs.,
Inc. v. HemCon, Inc., 672 F.3d 1350, 1361-62 (Fed. Cir.
2012) (en banc).
owner of a patent that survives reexamination "is only
entitled to infringement damages for the time period between
the date of issuance of the original claims and the date of
the reexamined claims if the original and the reexamined
claims are substantially identical." Convolve. Inc.
v. Compaq Comput. Corp.. 812 F.3d 1313, 1322-23 (Fed.
Cir. 2016) (quoting R & L Carriers. Inc. v. Qualcomm,
Inc.. 801 F.3d 1346, 1351 (Fed. Cir. 2015)). "[I]t
is the scope of the claim that must be identical, not that
identical words must be used." Id. (alteration
in original) (quoting Slimfold Mfg. Co. v. Kinkead
Indus., Inc., 810 F.2d 1113, 1116 (Fed. Cir. 1987)).
Amendments made during reexamination, even those made after a
rejection based on prior art, "do not necessarily compel
a conclusion that the scope of the claims has been
substantively changed." Id. Rather, "[t]o
determine whether a claim change is substantive it is
necessary to analyze the claims of the original and the
reexamined patents in light of the particular facts,
including the prior art, the prosecution history, other
claims, and any other pertinent information."
Id. (alteration in original) (quoting Laitram
Corp. v. NEC Corp., 952 F.2d 1357, 1362-63 (Fed. Cir.
1991)). The court applies traditional claim construction
principles and pays "particular attention to the
'examiner's focus in allowing the claims' after
amendment." Id. at 1322-23 (quoting R &
L Carriers, Inc., 801 F.3d at 1351).
argues that D&M should not be allowed to rely on the
rebuttal report of its expert, Dr. Harry Bims, to support its
position on intervening rights, because D&M did not
address the issue of intervening rights prior to the filing
of that report, and thus Dr. Bims's opinions on
intervening rights were not timely disclosed. Sonos points to
the Court's scheduling order, which provided that the
party with the burden of proof on an issue was required to
file an opening expert report by February 20, 2017, long
before Dr. Bims's rebuttal expert report was filed.
See, e.g., Dkt. No. 231. The burden of proof on the
issue of intervening rights, an affirmative defense, rests on
the defendant. BIC Leisure Prods., Inc. v. Windsurfing
Int'l, Inc., 1 F.3d 1214, 1221 (Fed. Cir. 1993);
Underwater Devices, Inc. v. Morrison-Knudsen Co.,
717 F.2d 1380, 1388 (Fed. Cir. 1983). Therefore, according to
Sonos, D&M has forfeited its right to present a defense
of intervening rights.
Court disagrees. D&M pleaded the defense of intervening
rights and raised the issue of the improper broadening of the
claims of the '949 and '959 patents in the February
20, 2017, report of its expert, Dr. Jay P. Kesan, although
Dr. Kesan did not specifically tie his discussion of improper
broadening to the legal issue of intervening rights. Dkt. No.
307, Ex. A, at 42-54 (¶¶ 133-151). Sonos's
expert, Dr. Kevin C. Almeroth, stated in his expert report
that the changes made to the claims of the '949 patent
following reexamination did not substantively change the
scope of the claims of that patent. See Dkt. No.
311, Ex. E-3, at 75 (Â¶ 205). D&M was entitled to rebut
that evidence, which it did through Dr. Bims's expert
rebuttal report. Dkt. No. 309, Ex. C, at 76-80 (Â¶Â¶ 243-54).
Dr. Bims's rebuttal report also contended that the
'959 patent had been substantively changed during
reexamination in light of prior art. Id. at 82-86
(¶¶ 261-265). At the same time, another Sonos
expert, Dr. Andrew Wolfe, submitted a report stating that
neither the '949 patent nor the '959 patent was
broadened during reexamination. Dkt. No. 315, Ex. E-15, at
477-83 (¶¶ 1365-84). And Dr. Almeroth followed with
a reply report on behalf of Sonos responding to Dr.
Bims's report with respect to both patents. Dkt. No. 314,
Ex. E-12, at 22-24(¶¶ 70-76).
Dr. Kesan's report did not identify the intervening
rights defense by name, his report set forth the factual
basis for that claim, on which the parties engaged in the
subsequent expert witness reports. The issue of the change in
the scope of the claims of the '949 and '959 patents
was thus timely raised through the presentations of the
various expert witnesses, including Dr. Bims. Moreover, Sonos
was able to respond to Dr. Bims's report in Dr.
Almeroth's subsequently filed reply report. Both parties
thus had a full opportunity to address the intervening rights
issue prior to Sonos's filing its summary judgment
motion. Under these circumstances, the Court will not exclude
the evidence in Dr. Bims's rebuttal report with respect
to that issue.
is asserting claims 1 and 16 of the '949 patent. Claim 16
is a method claim that depends from claim 15. Method claims
have been held not to be subject to the defense of absolute
intervening rights. See NetAirus Techs., LLC v. Apple,
Inc., No. LA CV10-03257, 2013 WL 3089061, at *4 (CD.
Cal. May 23, 2013) ("The language in 35 U.S.C. §
252 that gives rise to absolute intervening rights
'appears not to relate to a patented process, '
because processes are only addressed in the statute's
discussion of equitable intervening rights."); Rohm
& Haas Co. v. Chem. Insecticide Corp., 171 F.Supp.
426, 432 (D. Del. 1959) (same).
it appears that the Federal Circuit has not squarely
addressed this issue, the plain language of section 252
supports drawing a distinction between process claims and
product claims with regard to absolute intervening rights.
The portion of section 252 that addresses absolute
intervening rights refers to right to use, sell, offer to
sell, etc., "the specific thing so made, purchased,
offered for sale, or used or imported unless the making
using, offering for sale or selling of such thing infringes a
valid claim of the reissued patent which was in the original
patent." By contrast, the portion of section 252 that
addresses equitable intervening rights provides that the
court may provide for "the continued manufacture, use,
offer for sale, or sale of the thing made, " purchased,
offered for sale, etc., before the grant of the reissue,
"and the court may also provide for the continued
practice of any process patented by the reissue" to the
extent the court deems equitable for the protection of
investments made or business commenced before the grant of
the reissue. See generally BIC Leisure Prods., Inc.,
1 F.3d at 1220-21 (noting the narrow statutory language
applicable to absolute intervening rights as compared to the
broader language applicable to equitable intervening
counsel for D&M points out, however, drawing a sharp line
between product claims and method claims in determining
eligibility for absolute intervening rights could result in
defeating the purpose of the statute to provide intervening
rights for particular goods made prior to the reissue or
reexamination. Thus, if particular goods were made by a
process that is separately covered by a process claim that
was also changed upon reissuance or reexamination, absolute
intervening rights would be no benefit to the accused
infringer if the patentee could assert a parallel process
claim against the process that was used to make the very same
products that were intended to be protected by absolute
intervening rights. Accordingly, in order to avoid
undermining the statutory protection for particular products
made prior to a reissuance or reexamination that entails a
change in the scope of both product and process claims, the
Court holds that ...