AMO Dev. v. Alcon Vision LLC

AMO DEVELOPMENT, LLC, AMO MANUFACTURING USA, LLC and AMO SALES AND SERVICE, INC., Plaintiffs, v. ALCON VISION, LLC, ALCON LABORATORIES, INC. and ALCON RESEARCH, LLC Defendants.

Civil Action No. 20-842-CFC

United States District Court, D. Delaware

December 6, 2022

Jack B. Blumenfeld, Anthony D. Raucci, Brian P. Egan, MORRIS NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware Michael A. Morin, Matthew J. Moore, Rachel W. Cohen, Sarang V. Damle, Holly K. Victorson, Carolyn M. Homer, Susan Y Tull, LATHAM & WATKINS LLP, Washington, DC; Roger J Chin, Allison Harms, Joseph R. Wetzel, LATHAM & WATKINS LLP, San Francisco, California; S. Giri Pathmanaban, LATHAM & WATKINS LLP, Menlo Park, California; P. Anthony Sammi, Rachel R. Blitzer, LATHAM & WATKINS LLP, New York, New York; Aaron Macris, LATHAM & WATKINS LLP, Boston, Massachusetts Counsel for Plaintiffs

John W. Shaw, Nathan R. Hoeschen, Andrew Russell, Karen E. Keller, David Fry, SHAW KELLER LLP, Wilmington, Delaware; Jeanne M. Heffernan, James J. Lomeo, Ryan J. Melde, KIRKLAND & ELLIS LLP, Austin, Texas; Gregg F. LoCascio, Sean M. McEldowney, Noah S. Frank, Kelly Tripathi, Elizabeth Hedges, Mary E. Miller, Nicholas Teleky, KIRKLAND & ELLIS LLP, Washington, DC; Joshua L. Simmons, KIRKLAND & ELLIS LLP, NeW York, New York; Caroline Lourgos, KIRKLAND & ELLIS LLP, Chicago, Illinois; Kristen P.L. Reichenbach, KIRKLAND & ELLIS LLP, San Francisco, California Counsel for Defendants

MEMORANDUM OPINION

CLOM F. CONNOLLY CHIEF JUDGE

Plaintiffs AMO Development, LLC, AMO Manufacturing USA, LLC, and AMO Sales and Service, Inc. (collectively, J&J) have sued Defendants Alcon Vision, LLC, Alcon Laboratories, Inc., and Alcon Research, LLC (collectively, Alcon) for patent and copyright infringement. Pending before me is Alcon's Motion for Summary Judgment (No. 1) That the Copyright Act Bars Monetary Relief for Infringing Acts Occurring More Than Three Years Before J&J Filed Suit. D.I. 355. Alcon seeks by its motion a declaratory judgment that J&J is “barred from recovering monetary relief for acts that occurred before September 28,2017.” D.I. 355-1 at 2.

I. BACKGROUND

J&J manufactures the 1FS® Laser, a laser system used for eye surgery that employs copyrighted computer software. Alcon markets the LenSx® Laser System (LenSx), a laser-assisted cataract surgery system.

In 2014, J&J obtained a LenSx device and inspected the object code installed on that device. “Object code is machine readable, binary code, represented on paper as a series of ones and zeroes.” Atari Games Corp. v. Nintendo of Am. Inc., 975 F.2d 832, 836 n.l (Fed. Cir. 1992). It is distinguished from but related to source code, which is “the text of a software program written in a human-readable programming language.” Blueport Co., LLC v. United States, 533 F.3d 1374, 1377 n.l (Fed. Cir. 2008) (citation omitted). “Once written, source code is compiled into machine-readable object code that runs on a computer.” Id. (citation omitted). “Software programmers usually provide users with only the object code in order to prevent users from modifying the program.” Id. (citation omitted).

In June 2020, J&J initiated this case with the filing of a complaint in which it alleged that the LenSx infringes numerous patents owned by J&J. D.I. 1. On September 28,2020, J&J filed the First Amended Complaint and alleged for the first time that LenSx's software “incorporate[s] one or more protected elements of the copyrighted iFS® Laser computer programs.” D.I. 16¶¶99, 101, 103-04. In paragraph 98 of its First Amended Complaint, J&J alleged:

Alcon unlawfully used and is continuing to use J&J['s]... copyrighted computer programs (or copyrightable elements thereof) as part of the software that operates the LenSx. The installed version of the LenSx software (at least as of Version 2.20.02) exhibits an overwhelming number of telltale signs of copying of J&J['s]... copyrighted computer programs, including but not limited to the following:

a. The LenSx® file system mirrors the file structure of an iFS® Laser, with file folders with identical names ....

b. The LenSx® includes a number of on-screen instructions identical to those on an iFS® Laser, right down to the punctuation and nonstandard capitalization....

c. The LenSx object code files include[] over 300 references to file, function, and object names and other text that are identical to and originate in the iFS® Laser source code-far too many to be mere coincidence.

d. The object code file for the LenSx software module controlling the beam steering process (beamcontrol) references unique function names that were originally in the iFS® Laser source code .... The same object code file includes at least fifty unique data object names that were originally in the iFS® Laser source code .... That file also contains error codes and other text that are identical to, and originate in, the iFS® Laser source code ....

e. The object code file for the LenSx software module responsible for positioning the laser to the proper position (scanners) includes at least seventeen unique function names ... that [are] identical to, and originate in, the iFS® Laser source code.

f. The LenSx exhibits similar or identical behaviors to various error conditions [in the iFS® Laser]....

g. Both the iFS® Laser and LenSx systems register process names with the operating system to facilitate interprocess communication.... The LenSx contains registered process names that are identical to those in the iFS® Laser, even where the underlying process files in the LenSx do not match the corresponding process name.... This in particular is evidence that Alcon attempted to cover up the evidence of copying by changing certain names.

D.I. 16¶98.

J&J admits that by the end of 2014, it “possessed the facts underlying [its] copyright allegations as presented in the First Amended Complaint.” D.I. 372 at 80; see also D.I. 372 at 20; D.I. 421 at 2. In a letter sent to Alcon on July 14,2020, J&J stated that it “ha[d] every reason to believe that [Alcon]... copied [J&J's] proprietary source and/or object code, which [it] then incorporated into the LenSx®.” D.I. 372 at 12. J&J also stated in that letter that “[i]f Alcon believes that it is not infringing [J&J's] copyrighted computer programs, we invite Alcon to share with us all released versions of its source code from July 2017 to the present.” D.I. 372 at 12.

Four months later, in November 2020, J&J obtained through discovery in this case access to the LenSx source code. D.I. 427-1 at 199-200. On June 17, 2021, J&J filed its Second Amended Complaint, in which it added two counts of alleged infringement by Alcon of copyrighted submissions to the United States Food and Drug Administration (FDA), internal technical documentation, and the iFS® Laser operator's manual. D.I. 141 ¶¶ 456-64.

J&J also alleged in the Second Amended Complaint that its inspection of Alcon's source code “led to the discovery that Alcon had stolen electronic copies of the iFS® Laser source code, and incorporated at least 26,000 lines of that code wholesale into the LenSx computer program-including typos and dates from well before development of the LenSx began.” D.I. 141 ¶ 105.

IL LEGAL STANDARDS

A court must 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). Material facts are those “that could affect the outcome” of the proceeding. Lamont v. New Jersey, 637 F.3d 177, 181 (3d Cir. 2011). “[A] dispute about a material fact is genuine if the evidence is sufficient to permit a reasonable jury to return a verdict for the non-moving party.” Id. (internal quotation marks omitted). A non-moving party asserting that a fact is genuinely disputed must support such an assertion by: “(A) citing to particular parts of materials in the record, including depositions, documents electronically stored information, affidavits or declarations, stipulations,... admissions, interrogatory answers, or other materials; or (B) showing that the materials cited [by the opposing party] do not establish the absence ... of a genuine dispute.” Fed.R.Civ.P. 56(c)(1). The non-moving party's evidence “must amount to more than a scintilla, but may amount to less (in the evaluation of the court) than a preponderance.” Williams v. Borough of West Chester, Pa., 891 F.2d 458,460-61 (3d Cir. 1989).

III. DISCUSSION

Alcon argues that the Copyright Act has a three-year statute of limitations that bars J&J from seeking monetary relief for acts that occurred before September 28,2017-i.e., three years before J&J filed its First Amended Complaint. D.I. 356 at 4.

Section 507(b) of the Copyright Act provides that “[n]o civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued.” In William A. Graham Co. v. Haughey, 568 F.3d 425, 437 (3d Cir. 2009), the Third Circuit held that “the federal discovery rule governs the accrual of civil claims brought under the Copyright Act.” Accordingly, under Graham, a copyright claim “accrues when the plaintiff discovers, or with due diligence should have discovered, the injury that forms the basis for the claim.” Id. at 433 (internal quotation marks and citations omitted).

Alcon argues that the Supreme Court effectively overruled Graham in Petrella v. Metro-Goldwyn-Mayer Inc., 572 U.S. 663 (2014). See D.I. 456 at 1. The Court held in Petrella that the equitable doctrine of laches “cannot be invoked to preclude adjudication of a claim for damages brought within the three-year window” of § 507(b). 572 U.S. at 667. Alcon argues that certain statements made by the Court in Petrella preclude a plaintiff from using the...