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Sonos Inc. v. D&M Holdings Inc.

United States District Court, D. Delaware

December 7, 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.

         Before the Court is Defendants' Motion for Judgment on Absolute Intervening Rights with Respect to the '949 Patent, Dkt. No. 463. The motion is granted.

         BACKGROUND

         Defendants D&M Holdings Inc., D&M Holdings U.S. Inc., and Denon Electronics (USA), LLC (collectively, “D&M”) seek a ruling that D&M is not liable for patent infringement for specific things that D&M made, offered for sale, sold, or used before the issuance of the reexamination certification for plaintiff Sonos, Inc.'s U.S. Patent No. 8, 588, 949 (“the '949 patent”), on November 5, 2015. D&M invokes what is referred to as the “absolute intervening rights” that are provided by the first sentence of the second paragraph of section 252 of the Patent Act, 35 U.S.C. § 252. That sentence reads as follows:

A reissued patent shall not abridge or affect the right of any person or that person's successors in business who, prior to the grant of a reissue, made, purchased, offered to sell, or used within the United States, or imported into the United States, anything patented by the reissued patent, to continue the use of, to offer to sell, or to sell to others to be used, offered for sale, or sold, the specific thing so made, purchased, offered for sale, 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.

         Section 307(b) of the Patent Act, 35 U.S.C. § 307(b), provides that the protections of section 252 apply to reexamined patents as well as reissued patents.[1]

         A significant portion of Sonos's damages claim in this case pertains to D&M's alleged infringing activity that took place prior to November 5, 2015, the issuance date of the reexamination certificate for the '949 patent. D&M claims that it enjoys absolute intervening rights under section 252 for all of its activities alleged to infringe both asserted claims of the '949 patent, claims 1 and 16.

         The intervening rights issue has been raised twice before in this litigation. First, Sonos filed a motion for a summary judgment seeking a ruling from the Court that D&M could not invoke intervening rights. Dkt. No. 289. In an opinion issued on November 1, 2017, the Court denied Sonos's motion. Dkt. No. 428. Subsequently, D&M filed a motion in limine seeking a ruling from the Court that, because of intervening rights, Sonos should not be allowed to introduce evidence of infringement of the '949 patent attributable to those products that were made, used, purchased, sold, or offered for sale before November 5, 2015. Dkt. No. 438. The Court denied the motion, ruling that the request was not appropriate as a motion in limine because it sought a dispositive ruling with respect to a portion of the claimed relief in this case. Dkt. No. 453. The Court subsequently granted D&M leave to seek a dispositive ruling on that issue with full briefing. Dkt. No. 455. The parties have now briefed the issue, Dkt. Nos. 463, 472, and the Court is prepared to rule.

         DISCUSSION

         By its terms, section 252 makes clear that in order to establish entitlement to absolute intervening rights with regard to the '949 patent, D&M must show that the asserted reexamined claims of that patent were not “in the original patent.” Thus, if the claims of the reexamined patent have been changed in substance from the original claims, D&M satisfies that prerequisite for entitlement to intervening rights. D&M must then show that the statutory protection applies to its activities.

         The two asserted claims of the '949 patent are claims 1 and 16. Claim 16 depends from independent claim 15. In their original form, the claims provided as follows:

         1. A multimedia controller including a processor, the controller configured to:

provide a user interface for a player group, wherein the player group includes a plurality of players in a local area network, and wherein each layer is an independent playback device configures to playback a multimedia output form a multimedia source;
accept via the user interface an input to facilitate formation of the player group, wherein the input to facilitate formation of the player group indicates that at least two of the plurality of players in the local area network are to be included in the player group;
for each of the plurality of players within the player group, accept via the user interface an input to adjust a volume associated with the player, wherein the input to adjust the volume associated with the player causes the corresponding independent playback device to adjust its volume; and
accept via the user interface an input to adjust a volume associated with the player group, wherein the input to adjust the volume associated with the group causes the corresponding independent playback devices in the player group to adjust their volumes.

         15. A ...


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