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Wi-Lan Inc. v. Sharp Electronics Corp.

United States District Court, D. Delaware

February 19, 2019

WI-LAN INC., Plaintiff,
v.
SHARP ELECTRONICS CORPORATION, Defendant. WI-LAN INC., Plaintiff,
v.
VIZIO, INC., Defendant.

         UNSEALED ON FEBRUARY 19, 2019

          Brian E. Farnan and Michael J. Farnan, FARNAN LLP, Wilmington, DE Monte M. Bond, Jeffrey R. Bragalone, Patrick J. Conroy, Terry Saad, and James R. Perkins, BRAGALONE CONROY P.C., Dallas, TX Attorneys for Wi-Lan Inc.

          Jack B. Blumenfeld and Stephen J. Kraftschik, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, DE Gianni Cutri and Joel Merkin, KIRKLAND & ELLIS LLP, Chicago, IL Michael W. De Vries, KIRKLAND & ELLIS LLP, Los Angeles, CA Adam R. Alper and James Beard, KIRKLAND & ELLIS LLP, San Francisco, CA Jared Barcenas, KIRKLAND & ELLIS LLP, New York, NY Attorneys for Sharp Electronics Corporation.

          Pilar Gabrielle Kraman, YOUNG, CONAWAY, STARGATT & TAYLOR, LLP, Wilmington, DE, Rex Hwang, Stanley M. Gibson, and Jessica Newman, JEFFER MANGELS BUTLER & MITCHELL LLP, Los Angeles, CA, Attorneys for Vizio, Inc.

          MEMORANDUM OPINION

          STARK, U.S. DISTRICT JUDGE.

         Pending before the Court are Plaintiff Wi-LAN Inc.'s ("Plaintiff) Motions for Summary Judgment of Infringement (C.A. No. 15-379 D.I. 406; C.A. No. 15-788 D.I. 334), Defendants Sharp Electronics Corporation and Vizio, Inc.'s (collectively, "Defendants") Motions to Preclude the Expert Opinions of Craig K. Tanner (C.A. No. 15-379 D.I. 408; C.A. No. 15-788 D.I. 329), Defendants' Motions to Preclude the Analysis of Rebecca Reed-Arthurs (C.A. No. 15-379 D.I. 410; C.A. No. 15-788 D.I. 330), Defendants' Motions to Preclude the Expert Opinions of Ionut Mirel (C.A. No. 15-379 D.I. 411; C.A. No. 15-788 D.I. 331), Defendants' Motions to Preclude the Expert Opinions of David A. Kennedy (C.A. No. 15-379 D.I. 412; C.A. No. 15-788 D.I. 332), Plaintiffs Motions for Partial Summary Judgment of No. Invalidity (C.A. No. 15-379 D.I. 414; C.A. No. 15-788 D.I. 339), Defendants' Motions for Summary Judgment of Non-Infringement (C.A. No. 15-379 D.I. 416; C.A. No. 15-788 D.I. 337), and Plaintiffs Motions to Preclude the Infringement and Validity Expert Reports of Clifford Reader (C.A. No. 15-379 D.I. 419; C.A. No. 15-788 D.I. 344). The Court heard arguments on these motions on December 19, 2018 and took all motions under advisement. (See D.I. 471 ("Tr.")) The Court has also considered the parties' supplemental briefs and letters responding to the Court's post-hearing questions (C.A. No. 15-379 D.I. 470; C.A. No. 15-788 D.I. 399). (See C.A. No. 15-379 D.I. 472, 473, 474, 475, 481, 482; C.A. No. 15-788 D.I. 401, 402, 403, 404, 410, 411)[1]

         I. BACKGROUND

         While this was initially a three-patent case, only one patent remains asserted in this action: U.S. Patent No. 6, 359, 654 (the '"654 patent"). Plaintiff alleges that Defendants each infringe claims 1, 4, and 9 of the '654 patent, which are methods of displaying interlaced video data on non-interlaced monitors. The claimed methods require four steps: "capturing" two fields into buffers, "scaling" the fields, "adjusting" one of the fields, and "displaying" the two fields sequentially on a non-interlaced monitor. ('654 patent, els. 1, 4, 9)

         II. LEGAL STANDARDS Under Rule 56(a) of the Federal Rules of Civil Procedure, "[t]he 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." The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986). An assertion that a fact cannot be - or, alternatively, is - genuinely disputed must be supported either 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," 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." Fed.R.Civ.P. 56(c)(1)(A) & (B). If the moving party has carried its burden, the nonmovant must then "come forward with specific facts showing that there is a genuine issue for trial." Matsushita, 475 U.S. at 587 (internal quotation marks omitted). The Court will "draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).

         To defeat a motion for summary judgment, the nonmoving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586; see also Podobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir. 2005) (stating party opposing summary judgment "must present more than just bare assertions, conclusory allegations or suspicions to show the existence of a genuine issue") (internal quotation marks omitted). 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 nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50 (internal citations omitted); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (stating entry of summary judgment is mandated "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"). Thus, the "mere existence of a scintilla of evidence" in support of the nonmoving 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 nonmoving party. Anderson, 477 U.S. at 252.

         III. DISCUSSION

         The parties filed cross-motions for summary judgment regarding infringement of the '654 patent.[2] (See D.I. 406, 416) Plaintiffs case presents two theories of infringement against two sets of accused products. Plaintiffs first theory of infringement, asserted against a substantial majority of the accused products, is that Defendants directly infringe by selling televisions that automatically perform each step of the claimed methods. This theory of infringement is based on the Federal Circuit's decision in SiRF Technology, Inc. v. International Trade Commission, 601 F.3d 1319 (Fed. Cir. 2010). For the remaining accused products, Plaintiff asserts that Defendants directly infringe by testing those televisions in the United States in a manner that practices the claimed methods.

         Plaintiffs evidence of infringement includes (and essentially depends on) two sets of declarations from the companies that manufacture for Defendants the System-on-Chips ("SoCs") which house the accused functionality (the "SoC declarations"). Plaintiffs other principal evidence of infringement is Register Transfer Level ("RTL") source code that provides the blueprint to manufacture the hardware of the SoCs. As Plaintiff cannot prove infringement without the source code, the Court will first consider the admissibility of the source code and the SoC declarations.

         For purposes of this Opinion, the Court will assume that every limitation of the asserted claims is met by the accused products.[3] Under that assumption, it is undisputed that the accused products themselves perform every step of the asserted claims. (See, e.g., D.I. 407 at 1; D.I. 447 at 17-18)

         A. Admissibility of Source Code and SoC Declarations

         Given the nature of the alleged infringement, and Defendants' relationship to the asserted patented methods, Plaintiff has "been on notice since the very beginning of the case that [it was] going to need source code from third parties." (D.I. 182 at 25; see also D.I. 91 at 33) That is, in order to meet its burden to prove infringement, Plaintiff has known that it would need to obtain source code from MediaTek, MStar, and Sigma (the "SoC manufacturers") - those third parties manufacture the SoCs that are accused of containing the infringing functionality in this case. (See D.I. 91 at 33; D.I. 182 at 25-26) When Plaintiff approached the SoC manufacturers, they did not easily and voluntarily produce their proprietary code. For example, in April 2017, MediaTek's counsel told Plaintiffs counsel that "MediaTek Inc. is not going to voluntarily produce each version of code that has existed for 15 chips over almost 8 years." (D.I. 423 Ex. 50 at 2; see also Id. at 3 ("MediaTek Inc. does not have a single person, or even multiple people, who could state under oath that there are no 'material differences' for 15 chips over almost 8 years.")) The following month, Plaintiff sued the SoC manufacturers in this Court for patent infringement. (See D.I. 418 at 13) Shortly thereafter, Plaintiff entered into termination agreements with the SoC manufacturers which provided that the SoC manufacturers would produce source code and the lawsuits against them would be dismissed without prejudice. (See D.I. 445 at 30; D.I. 446 Exs. 16-17) Ultimately, the SoC manufacturers produced a single version of RTL source code with accompanying declarations stating that the code produced provides the implementation of the deinterlacing process for digital video data in a specified list of chips, adding that there are "no material differences"[4] between the version of code ...


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