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Evolved Wireless, LLC v. Apple, Inc.

United States District Court, D. Delaware

February 21, 2019

EVOLVED WIRELESS, LLC, Plaintiff,
v.
APPLE, INC. Defendants. EVOLVED WIRELESS, LLC, Plaintiff,
v.
HTC CORPORATION and HTC AMERICA, INC., Defendants. EVOLVED WIRELESS, LLC, Plaintiff,
v.
LENOVO GROUP LTD., LENOVO UNITED STATES INC., and MOTOROLA MOBILITY, Defendants. EVOLVED WIRELESS, LLC, Plaintiff,
v.
SAMSUNG ELECTRONICS CO., LTD. and SAMSUNG ELECTRONICS AMERICA, INC. Defendants. EVOLVED WIRELESS, LLC, Plaintiff,
v.
ZTE (USA) INC., Defendant. EVOLVED WIRELESS, LLC, Plaintiff,
v.
MICROSOFT CORPORATION, MICROSOFT MOBILE OY and NOKIA INC., Defendants.

          MEMORANDUM AND ORDER

          Joseph F. Bataillon Senior United States District Judge.

         This matter is before the Court on plaintiff Evolved Wireless LLC's (“Evolved”) motion for summary judgment on the defendants' affirmative defenses and/or counterclaims, D.I. 195 in Apple, 1:15cv542[1] and on defendant Apple's and the other defendants' cross-motions for a summary judgment based on a license agreement and covenant not to sue, D.I. 194 in Apple, 1:15cv542.[2] These are actions for patent infringement pursuant to 35 U.S.C. § 101 et al. This Court has jurisdiction under 28 U.S.C. §§ 1331, 1332, 1338(a), 1367, and 2201.

         I. BACKGROUND

         In these related actions, Evolved alleges infringement of claims of United States Patent Nos. 7, 809, 373 (“the '373 patent”) and 7, 881, 236 (“the '236 Patent”) directed to LTE wireless communication systems. LTE stands for Long Term Evolution and is also commonly referred to as 4G. LTE was first released in 2008, with 3GPP's Release 8. Wireless carriers in the United States began providing LTE networks in 2010.

         The '373 Patent generally relates to methods and an apparatus for performing a handover of a mobile terminal from a source base station to a target base station. D.I. 1, Complaint, Ex. 3, '373 Patent. The '236 Patent relates to “a data transmission method and a user equipment for the same” related to a “random access” procedure between a terminal and a base station. Id., Ex. 4, '236 Patent at 3-4. Evolved asserts infringement of claims 15-21 and 23-25 of the '373 Patent and claims 1-10, and 12-13 of the '236 Patent against all defendants. The defendants deny Evolved's allegations of infringement, and allege the asserted claims of the '373 and '236 Patents are invalid, as well as assert various affirmative defenses and counterclaims, including affirmative defenses alleging license and patent exhaustion and a counterclaim for an alleged breach of Evolved's contractual FRAND obligation.

         Evolved's summary judgment motion is directed to three issues: (1) validity, (2) breach of contractual obligation to grant licenses on fair, reasonable and nondiscriminatory (“FRAND”) terms, and (3) the license, covenant not to sue and exhaustion. The defendants' motion is directed to the third issue.

         The record shows that Evolved currently owns all right, title, and interests in the '373 Patent. The named inventors on the '373 Patent are Sung Jun Park, Young Dae Lee, Sung Duck Chun, and Myung Cheul Jung. On September 7, 2006, the named inventors assigned all right, title, and interests in the '373 Patent to LG Electronics, Inc. (“LGE”). On February 7, 2014, LGE assigned all right, title, and interests in the '373 Patent to TQ Lambda, LLC. On October 27, 2014, TQ Lambda, LLC assigned all right, title, and interests in the '373 Patent to Evolved.

         LGE is a member of the European Telecommunications Standards Institute ("ETSI") and participated extensively in the Third Generation Partnership Project ("3GPP"). The 3GPP is comprised of numerous member companies who participated in the development of LTE through their membership in Organizational Partners. 3GPP's member companies participated in working groups that met several times a year. The contributions submitted by participants in a working group meeting were made publicly available prior to each meeting.

         The patentee declared that the '373 and '236 Patents are essential to the Long Term Evolution (“LTE”) wireless communications standard. Evolved contends that the '373 and '236 Patents are standard essential patents (“SEPs”) necessary to comply with the LTE wireless communications standard. The defendants contend that the '373 and '236 Patents are neither essential to the LTE wireless communications standard nor necessary for a mobile device to comply or be compatible with the LTE wireless communications standard.

         II. EVOLVED'S MOTION (D.I. 195) FOR SUMMARY JUDGMENT ON INVALIDITY AND BREACH OF FRAND OBLIGATIONS.

         A. Validity

         Evolved moves for summary judgment in its favor on the defendants' invalidity defenses. The defendants contend the claims of the '373 claims are invalid as anticipated and as obvious and that the claims of the '236 Patent are invalid as obvious. Evolved argues that uncontroverted evidence shows that the defendants cannot prevail on the invalidity defense. It argues that Apple cannot show by clear and convincing evidence that the claims of the ‘373 Patent are invalid. It contends that, under the Court's claim construction, the prior art relied on by the defendants does not disclose certain claims and that, by reason of priority dates of the '373 and prior art patents, certain prior art refences are not prior art. They contend the defendants' experts failed to analyze the prior art using the court's claim constructions and failed to support critical aspects of his opinion with facts. Further, they argue that the defendants have failed to offer a legally sufficient motivation to combine prior art references and cannot establish invalidity based on the combination of asserted prior art references.

         The defendants, on the other hand, argue that there are genuine issues of material fact as to those issues. They rely on the testimony of Apostolos K. Kakaes, Ph.D. (D.I. 272-1, Ex. 13) and Harry Bims, Ph.D. (D.I. 272-2, Ex. 13) to support the contention that certain references (i.e., Chinese Patent No. CN1596020A (“Hu”), U.S. Patent No. 8, 131, 295 (“Wang”) are prior art to the ‘373 Patent. They dispute the plaintiff's contentions regarding claims to the provisional filing dates of the '373 Patent and certain prior art references. They argue that Dr. Bims's testimony provides an adequate rationale for why a person of ordinary skill in the art would make the asserted combinations. They also dispute any reliance on statements in the Inter Partes Review (“IPR”) petition to the Patent Board, arguing that it has no bearing whatsoever on the viability of combinations of prior art references to show anticipation or obviousness.

         “The 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.” Fed.R.Civ.P. 56(a). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 415 U.S. 475, 586 n. 10 (1986). A party asserting 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 the purposes of the motions 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, 415 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 non-moving party must “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita, 415 U.S. at 586-87; see also Podobnik v. U.S. Postal Service, 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). Although 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 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”).

         Because a patent is presumed valid under 35 U.S.C. § 282, an invalidity defense must be proved by clear and convincing evidence. Microsoft Corp. v. i4i Ltd. P'ship, 564 U.S. 91, 95 (2011); Impax Labs., Inc. v. Aventis Pharms., Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008) (stating that defenses of obviousness and anticipation must be proven by clear and convincing evidence). A patent is invalid for anticipation under 35 U.S.C. § 102 if a single prior art reference discloses each and every limitation of the claimed invention. Allergan, Inc. v. Apotex Inc., 754 F.3d 952, 973 (Fed. Cir. 2014). Anticipation is a question of fact. Id.To establish anticipation, an alleged infringer “must show ‘that the four corners of a single, prior art document describe every element of the claimed invention, '” with the elements “arranged or combined in the same way as in the claim.” Net MoneylN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1370 (Fed. Cir. 2008). “Typically, testimony concerning anticipation must be testimony from one skilled in the art and must identify each claim element, state the witnesses' interpretation of the claim element, and explain in detail how each claim element is disclosed in the prior art reference.” Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 24 (Fed. Cir. 2012). The party challenging the validity of a patent bears “the burden of persuasion by clear and convincing evidence on all issues relating to the status of [a reference] as prior art.” Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1576 (Fed. Cir. 1996).

         “A patent is invalid for obviousness ‘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 to which said subject matter pertains.'” Allergan, Inc., 754 F.3d at 961 (quoting 35 U.S.C. § 103(a)). A patent can be obvious in light of a single reference. See Boston Sci. Scimed, Inc. v. Cordis Corp., 554 F.3d 982, 990-92 (Fed. Cir. 2009). Additionally, a party can establish obviousness by showing that “a skilled artisan would have had reason to combine the teaching of [multiple] prior art references to achieve the claimed invention, and that the skilled artisan would have had a reasonable expectation of success from doing so.” PAR Pharm., Inc. v. TWI Pharms., Inc., 773 F.3d 1186, 1193 (Fed. Cir. 2014).

         Obviousness is a legal conclusion based on underlying facts. Id.However, “‘[t]he presence or absence of a motivation to combine references in an obviousness determination is a pure question of fact.'” PAR Pharm., 773 F.3d at 1196 (quoting Alza Corp. v. Mylan Labs., Inc., 464 F.3d 1286, 1289 (Fed. Cir. 2006). Similarly, “‘[w]hat a reference teaches and whether it teaches toward or away from the claimed invention ...


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