Am. Technical Ceramics Corp. v. Presidio Components, Inc.

414 F.Supp.3d 304

AMERICAN TECHNICAL CERAMICS CORP. and AVX Corporation, Plaintiffs,

v.PRESIDIO COMPONENTS, INC., Defendant.

14-CV-6544(KAM)(GRB)

United States District Court, E.D. New York.

Signed October 16, 2019

Brad Michael Scheller, Peter Francis Snell, Timur E. Slonim, Vincent M. Ferraro, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., New York, NY, Harold Stewart Laidlaw, Harold Laidlaw, Flushing, NY, Heather Repicky, Ronald E. Cahill, Nutter McClennen & Fish, LLP, Boston, MA, for Plaintiffs.

Brett Schatz, Charles H. Brown, Gregory Ahrens, Wood, Herron & Evans, L.L.P., Cincinnati, OH, Jeremy D. Richardson, Freeborn & Peters LLP, New York, NY, for Defendant.

MEMORANDUM & ORDER

MATSUMOTO, United States District Judge:

Plaintiffs American Technical Ceramics Corporation ("ATC") and AVX Corporation (collectively, "plaintiffs") commenced this action on November 6, 2014, against defendant Presidio Components, Inc. ("Presidio" or "defendant"), alleging infringement by Presidio of the following ATC patents: United States Patent No. 6,144,547 ("the '547 Patent"), United States Patent No. 6,337,791 ("the '791 Patent," and together with the '547 Patent, the "patents-in-suit"), and United States Patent No. 6,992,879 ("the '879 Patent"). (ECF No. 1, Compl.) Plaintiffs seek a determination that Presidio willfully infringed the patents-in-suit, and injunctive relief prohibiting Presidio from engaging in further infringement.¹ Plaintiffs also seek damages from the alleged infringement, including attorneys' fees and costs.

After inter partes review ("IPR"), two claim construction hearings pursuant to Markman v. Westview Instruments, Inc. , 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996), and cross-motions for summary judgment, the parties proceeded to trial. The court held a two-week trial in which plaintiffs tried to a jury their allegations that defendant infringed the patents-in-suit, and that it infringed the '791 Patent willfully. (See Minute Entries dated 6/10/2019 to 6/21/2019.) At trial, defendant presented evidence related to two defenses it now asserts for decision by the court: (1) that the '547 Patent was invalid because the claim term "negligibly over a top surface" was indefinite; and (2) that plaintiff had waived its right to sue for infringement of the '791 Patent. (See ECF No. 157, Prop. Jt. Pretrial Order 4.) Presently before the court is the parties' post-trial briefing on defendant's asserted invalidity defense and equitable defense of waiver. (See ECF No. 206-1, Def. Mem.; ECF No. 207, Pls.' Opp. ("Opp."); ECF No. 208, Def. Reply ("Reply").)

For the reasons discussed below, the court finds that defendant has failed to prove by clear and convincing evidence that the claim term "negligibly over a top surface" rendered the '547 Patent invalid for indefiniteness, or that plaintiff ATC had waived its right to sue under the '791 Patent.

BACKGROUND

The court assumes familiarity with the procedural and factual history of this case, as set forth most recently in the court's pre-trial Memorandum and Order deciding the parties' respective expert evidentiary issues pursuant to Daubert v. Merrell Dow Pharm., Inc. , 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), (ECF No. 179, Mem. & Order on Daubert Mots. ("Daubert Order")), and the court's Memorandum and Order deciding the parties' respective motions in limine , (ECF No. 181, MIL Order).

After a two-week trial, the jury found that Presidio had not established by clear and convincing evidence that the '791 Patent was invalid as anticipated, as obvious, or as indefinite. (See ECF No. 201, Jury Verdict 6.) The jury also found that Presidio had not established by clear and convincing evidence that the '547 Patent was invalid as anticipated or obvious, or that the claim term "substantially L-shaped terminations" was indefinite. (Id. at 7-8.) The jury, however, found by clear and convincing evidence that the claim term "negligibly over a top surface of said device body" is indefinite. (Id. at 8.) The parties dispute whether this finding by the jury is a general verdict and what weight the court should give the verdict. (See DM 2; Opp. 4; Reply 2.) Presidio characterizes the verdict as a "general verdict" without explaining the effect, while plaintiffs argue the verdict is merely advisory and should be afforded no weight.

The jury also returned a verdict for plaintiffs as to infringement, finding all the accused products infringed either the '547 Patent or the '791 Patent. (Jury Verdict 3-4.) The jury found, however, that Presidio did not willfully infringe the '791 Patent. (Id. at 5.) Finally, in determining damages for Presidio's infringement of the patents-in-suit, the jury found plaintiffs were not entitled to an award of lost profits as to either of the patents-in-suit, but that plaintiffs were entitled to a reasonable royalty as to both patents, awarding $58,334.75 as to the '547 Patent, and $680,647.00 as to the '791 Patent. (Id. at 9.)

LEGAL STANDARD

In this patent case the court applies the law of the Federal Circuit to patent issues, and the law of its regional circuit, the Second Circuit, to non-patent issues. In re Cambridge Biotech Corp. , 186 F.3d 1356, 1368 (Fed. Cir. 1999) ; see also Coconut Grove Pads, Inc. v. Mich & Mich TGR, Inc. , 222 F. Supp. 3d 222, 250 n.6 (E.D.N.Y. 2016). Thus, questions regarding indefiniteness and waiver, for example, are governed by Federal Circuit law. The court applies the foregoing analysis to the parties' pending motions and objections.

DISCUSSION

Defendant requests the court adopt the jury's verdict that the '547 Patent's claim term "negligibly over a top surface of said device body" is indefinite. (DM 1.) Defendant also requests the court find that plaintiffs waived their rights to sue for infringement under the '791 Patent because they had actual knowledge of Presidio's alleged infringement for more than a decade. (Id. ) Plaintiffs oppose, arguing that the jury's indefiniteness verdict was merely advisory, (Opp. 1-2), that the claim term is nevertheless definite, and that plaintiffs did not possess actual knowledge of infringement of the '791 Patent as defendant argues, (id. at 21-28).

I. Invalidity

Defendant argues that the '547 Patent's claim term "negligibly over the top surface" is indefinite as evidenced by the testimony of both parties' experts and confirmed by the jury's verdict. (DM 1.) Defendant also argues at length that the jury's invalidity verdict represents a "general verdict" as "the jury was instructed to apply the law as provided by the Court" to the facts of the case. (Id. at 3 (citing Anderson Grp. LLC v. City of Saratoga Springs , 805 F.3d 34, 49 n.7 (2d Cir. 2015) ).) The jury found, defendant argues, that no reasonably certain standard existed for determining what constituted a "negligible" amount of termination material. (DM 5.) According to defendant, the trial evidence demonstrated by clear and convincing evidence that nothing in the '547 Patent informs a person of skill in the art ("POSITA") regarding the limit or scope of the claim term. (Id. )

Plaintiffs respond that the claim term's scope is defined with reasonable certainty by the '547 Patent's intrinsic record. (Opp. 1.) That is, the claim language "substantially L-shaped," the distinguished prior art and example embodiments, and the patent's prosecution history, support a finding of definiteness in light of Federal Circuit authority. Plaintiffs further argue that the jury's verdict was advisory and that Presidio's trial conduct violated the court's in limine orders and thus compromised the jury's verdict.

Whether or not the verdict is characterized as general because the jury applied the law of invalidity to the facts of the case, the court must adopt the verdict in order for it to become binding. Indeed, there can be no confusion over how the parties intended to try defendant's indefiniteness defense, and plaintiffs cite to a number of examples of representations by defendant. Most notable is defense counsel's statements at the court's Final Pretrial Conference, characterizing the jury's verdict as to indefiniteness as advisory and indicating the court's decision "would only come after the advisory verdict." (ECF No. 207-2, Pls.' Ex. 3, Pretrial Conf. Tr. 27.² ) Moreover, the parties' Joint Proposed Pretrial Order indicated Presidio's defense of indefiniteness may need to be resolved by the court. (Jt. Prop. Pretrial Order 4.) Though the jury was instructed on the law of indefiniteness, and the court affords its verdict some weight, the court must nevertheless determine for itself whether defendant met its burden by clear and convincing evidence that the claim term "negligibly over a top surface" is indefinite.

A. Legal Standard

"[A] patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention." Nautilus, Inc. v. Biosig Instruments, Inc. , 572 U.S. 898, 134 S. Ct. 2120, 2124, 189 L.Ed.2d 37 (2014). Further, patents enjoy a "presumption of validity, a presumption not to be overthrown except by clear and cogent evidence." Microsoft Corp. v. I4I Ltd. P'ship , 564 U.S. 91, 101, 131 S.Ct. 2238, 180 L.Ed.2d 131 (2011) (quoting Radio Corp. of Am. v. Radio Eng'g Labs. , 293 U.S. 1, 2, 55 S.Ct. 928, 79 L.Ed. 163 (1934) ); see also 35 U.S.C. § 282(a) (providing that a patent and each of its claims "shall be presumed valid," and "[t]he burden of establishing the invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity"). Thus, invalidity, including by reason of indefiniteness, must be proven by clear and convincing evidence. Microsoft , 564 U.S. at 95, 131 S.Ct. 2238.

The standard for definiteness affords some leeway for the "inherent limitations of language." Teva Pharms. USA, Inc. v. Sandoz, Inc. , 789 F.3d 1335, 1340–41 (Fed....