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Sonos Inc. v. D&M Holdings Inc.

United States District Court, D. Delaware

November 21, 2017

SONOS, INC., Plaintiff,
v.
D&M HOLDINGS INC. d/b/a THE D GROUP, D&M HOLDINGS U.S. INC., and DENON ELECTRONICS USA, LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          WILLIAM C. BRYSON, UNITED STATES CIRCUIT JUDGE.

         On November 17, 2017, the Court held a telephonic pretrial conference to discuss the proposed joint pretrial order, the parties' motions in limine, a dispute regarding the election of prior art, and the Court's proposed trial procedures for the bellwether trial scheduled to begin on December 11, 2017. This order summarizes the Court's rulings made during that conference, and addresses the issues the Court took under submission.

         1. Regarding the parties' disputes concerning the number of prior art references that D&M is permitted to raise at trial, see Dkt. Nos. 437, 439, the Court ruled that the UPnP protocol and the “D&M System” may each be considered a single reference for purposes of the Court's limitation of three prior art references per patent. The Court made no ruling as to whether either system may be considered a single reference for purposes of invalidity under 35 U.S.C. §§ 102 or 103.

         2. Sonos will not be permitted to present a doctrine of equivalents theory of infringement at trial, as it did not include such allegations in its final infringement contentions, except in the form of a boilerplate reservation of right to assert the doctrine of equivalents at some later point. See Sycamore IP Holdings LLC v. AT&T Corp., No. 2:16-cv-588, 2017 WL 4517953, at *3 (E.D. Tex. Oct. 10, 2017) (boilerplate allegations of infringement under the doctrine of equivalents are insufficient); Comcast Cable Commc'ns, LLC v. OpenTV, Inc., No. C 16-6180, 2017 WL 2630088, at *5 (N.D. Cal. June 19, 2017) (same); Baltimore Aircoil Co. v. SPX Cooling Techs. Inc., No. CCB-13-2053, 2016 WL 4426681, at *15 (D. Md. Aug. 22, 2016) (“[P]lace-holder boilerplate language will not suffice” to preserve a doctrine of equivalents theory of infringement.); Best Med. Int'l, Inc. v. Accuray, Inc., No. 2:10-cv-1043, 2013 WL 3305478, at *2-3 (W.D. Pa. July 1, 2013) (contentions regarding the doctrine of equivalents cannot be “reserved” until the close of discovery).

         3. The Court granted in part and denied in part Sonos's motions in limine.

         a. First, Sonos argued that D&M should not be allowed to refer to its own patents and its countersuit against Sonos. The Court ruled that D&M will not be permitted to refer to its countersuit against Sonos or to any of its own patents that were not elected as prior art references unless Sonos first opens the door to any such evidence, such as by stating that D&M lacks its own technology and therefore must rely on stealing technology from Sonos. The countersuit by D&M is irrelevant to the issue of infringement of Sonos's patents, and the non-elected patents are irrelevant to the issue of infringement and are potentially confusing to the jury. The fact that D&M has patents in the same technological field is not a defense to infringement, but could mislead the jury into believing that D&M's patents give it the right to practice technology that is covered by those patents even though it is also covered by Sonos's patents.

         b. Second, Sonos argued that D&M should not be allowed to introduced arguments, testimony, or evidence relating to a prior lawsuit in which Sonos was a party, Black Hills Media, LLC v. Sonos, Inc., No. 2:14-cv-486 (C.D. Cal.). The Court ruled that evidence relating to that proceeding may be used only for impeachment of Sonos's witnesses who testified in that proceeding, under Fed.R.Evid. 613, or as substantive evidence of a testifying witness's prior sworn testimony under Fed.R.Evid. 801(d)(1).

         c. Third, Sonos argued that D&M should be precluded from introducing several categories of “evidence or suggestions of impropriety” by Sonos. Sonos first argued that D&M should not be allowed to introduce evidence of alleged improper conduct by Sonos before the Patent and Trademark Office, and that D&M should not be allowed to present evidence that Sonos had drafted its patent claims to cover D&M's existing products. D&M indicated that it did not intend to present evidence as to the first issue, so it was unnecessary for the Court to enter an order regarding that issue. As to the introduction of evidence that in some cases Sonos's patents covered D&M's existing products, the Court directed that D&M may not impute bad intent to Sonos based on those actions.

         Sonos next argued that D&M should not be allowed to present evidence that Sonos had engaged in “competitive activities” such as reverse engineering competitors' products. The Court ruled that evidence of “competitive activities” would be permitted only to the extent that Sonos opens the door by offering evidence that D&M had engaged in such activities.

         Finally, in response to Sonos's argument that evidence of any settlement negotiations or agreements between the parties be excluded under Fed.R.Evid. 408, the Court ruled that D&M could present such evidence only to the extent it became necessary to cure potentially misleading or prejudicial material introduced by Sonos.

         4. With respect to D&M's motions in limine, the Court denied one of the motions and took the other two under submission, stating that it would issue an order promptly. This is that order.

         a. During the hearing on the motions in limine, the Court denied D&M's third motion in limine, in which D&M sought to exclude evidence or argument relating to damages for infringement of U.S. Patent No. 8, 588, 149 during the period prior to the date of the reexamination certificate for that patent. D&M argued that damages for that period are not available based on its defense of absolute intervening rights under 35 U.S.C. § 252. The applicability of the defense of intervening rights was previously addressed in response to Sonos's motion for summary judgment on that issue. Dkt. No. 428, at 3-10. D&M did not file a cross-motion for summary judgment on that issue at that time.

         During the hearing, the Court ruled that D&M's motion was not properly cast as a motion in limine, but instead was seeking a dispositive ruling on a substantive issue in the case. The Court will not address D&M's argument as a motion in limine, but will rule on the issue when the matter is ripe for decision.

         b. D&M next seeks to limit Sonos's presentation of evidence regarding similarities between the non-patented features of the parties' products and similarities in other materials, such as marketing, branding, logos, and websites. To the extent Sonos seeks to introduce evidence that D&M copied Sonos's products because Sonos's products are commercial embodiments of the patents-in-suit, such evidence is admissible. Evidence of an alleged infringer's copying or reverse engineering a competitor's patented product is generally admissible on the ground that it is relevant to issues of inducement of infringement, willful infringement, or secondary considerations of obviousness. See, e.g., Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 843 F.3d 1315, 1333 (Fed. Cir. 2016) (reverse engineering of patentee's product and corporate culture of copying is relevant evidence of inducement); K-TEC, Inc. v. Vita-Mix Corp., 696 F.3d 1364, 1378 (Fed. Cir. 2012) (copying of patentee's product, including identical product numbers, is probative of willfulness); Wyers v. Master Lock Co., 616 F.3d 1231, 1246 (Fed. Cir. 2010) (evidence of direct copying to replicate a specific product is probative as to the secondary consideration of obviousness); Stryker Corp. v. Intermedics Orthopedics, Inc., 96 F.3d 1409, 1414 (Fed. Cir. 1996) (one factor in determining willfulness is “whether the infringer deliberately copied the ideas or design of another”); Digital Reg of Texas, LLC v. Adobe Sys., Inc., No. 12-cv-1971, 2014 WL 4090550, at *8 (N.D. Cal. Aug. 19, 2014) (evidence supporting an inference of copying patented features ...


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