Egenera, Inc. v. Cisco Sys., Inc.

547 F.Supp.3d 112

EGENERA, INC.

v.CISCO SYSTEMS, INC.

CIVIL ACTION NO. 16-11613-RGS

United States District Court, D. Massachusetts.

Filed June 23, 2021

Andrew T. Dufresne, Pro Hac Vice, Perkins Coie LLP, Madison, WI, Avery R. Williams, Pro Hac Vice, Christopher T. Bovenkamp, Pro Hac Vice, Michael McKool, Jr., Pro Hac Vice, McKool Smith, P.C., Dallas, TX, Dan L. Bagatell, Pro Hac Vice, Perkins Coie LLP, Hanover, NH, James E. Quigley, Pro Hac Vice, John B. Campbell, Pro Hac Vice, Kathy H. Li, Pro Hac Vice, Kevin L. Burgess, Pro Hac Vice, McKool Smith, P.C., Austin, TX, Martin E. Gilmore, Pro Hac Vice, Perkins Coie LLP, New York, NY, David L. Evans, Steven M. Veenema, Murphy & King, PC, Boston, MA, Michael J. Miguel, McKool Smith, Los Angeles, CA, for Egenera, Inc.

Brian Leary, Pro Hac Vice, Carson Olsheski, Pro Hac Vice, Elizabeth Weyl, Pro Hac Vice, John M. Desmarais, Pro Hac Vice, Jonas R. McDavit, Pro Hac Vice, Lindsay E. Miller, Pro Hac Vice, Michael R. Rhodes, Pro Hac Vice, Paul A. Bondor, Pro Hac Vice, C. Robert Harrits, Pro Hac Vice, Ryan T. Lawson, Pro Hac Vice, Tamir Packin, Pro Hac Vice, William Findlay, Pro Hac Vice, Desmarais LLP, New York, NY, Peter C. Magic, Pro Hac Vice, Desmarais LLP, San Francisco, CA, John W. Moran, LeClairRyan, P.C., Kevin G. Kenneally, Freeman Mathis & Gary, LLP, Patrick E. McDonough, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC, Boston, MA, for Cisco Systems, Inc.

MEMORANDUM AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT AND TO EXCLUDE EXPERT TESTIMONY

STEARNS, D.J.

Plaintiff Egenera, Inc., accuses defendant Cisco Systems, Inc., of infringing United States Patent No. 7,231,430 (the ’430 patent). The case having returned to this court from the Court of Appeals for the Federal Circuit, the parties now cross move for a second round of summary judgment. Each side also seeks to exclude the testimony of their competing expert witnesses.

PROCEDURAL HISTORY

Egenera filed its Complaint for patent infringement in August of 2016.¹ In April of 2017, Cisco petitioned the PTAB to institute an IPR of the ’430 patent. While the petition was pending, Egenera withdrew Peter Schulter as a named co-inventor of the patent. See Egenera, Inc. v. Cisco Sys., Inc. , 379 F. Supp. 3d 110, 113-114 ¶¶ 10-18 (D. Mass. 2019) (Inventorship Rulings). In February of 2018, the court construed the disputed claim terms and concluded, inter alia , that the "logic to modify" term was means-plus-function embodying a tripartite structure of "virtual LAN server 335, virtual LAN proxy 340, and physical LAN driver 345." See Egenera, Inc. v. Cisco Sys., Inc. , 2018 WL 717342, at *4-7 (D. Mass. Feb. 5, 2018) (CC Order).²

After the close of discovery, Cisco moved, inter alia , to invalidate the patent on grounds of the allegedly improper withdrawal of Schulter as a named inventor. In Cisco's view, Schulter had "contribute[d] to the conception of the claimed invention" as the originator of the tripartite structure. Eli Lilly & Co. v. Aradigm Corp. , 376 F.3d 1352, 1359 (Fed. Cir. 2004). The court agreed with Cisco that judicial estoppel barred Egenera from a tactical restoration of Schulter as an inventor, see Egenera, Inc. v. Cisco Sys., Inc. , 348 F. Supp. 3d 99, 101-102 (D. Mass. 2018), but concluded that sufficient disputes of fact remained to preclude an award of summary judgment, see id. at 108. Following a three-day bench trial, the court made detailed findings determining that Schulter had conceived the tripartite structure and was therefore a true inventor of the ’430 patent. Thus, his elimination as an inventor invalidated the patent. Inventorship Rulings at 128-129 ¶¶ 83-84.

Egenera appealed. The Court of Appeals for the Federal Circuit held that Egenera's dropping of Schulter from the roster of inventors was a correctable error, and that judicial estoppel did not apply in the circumstances of the case. See Egenera, Inc. v. Cisco Sys., Inc. , 972 F.3d 1367, 1376-1381 (Fed. Cir. 2020) (CAFC Opinion). The Court, on the other hand, affirmed this court's means-plus-function construction of the "logic to modify" term. See id. at 1372-1376.

Now back before this court on remand, Egenera moves for partial summary judgment of no "unclean hands" and no anticipation, and to strike the reasonable royalty opinions of Dr. Stephen Becker.³ Cisco counter-moves for summary judgment of unclean hands; noninfringement; non-entitlement to injunctive relief and pre-suit damages for indirect or willful infringement; and to strike the infringement opinions of Dr. Mark Jones and the reasonable royalty opinions of Dr. Ryan Sullivan.

CROSS MOTIONS FOR JUDGMENT AS TO UNCLEAN HANDS

Relying on testimony elicited at the inventorship trial, Cisco accuses Egenera of unclean hands. "[A] determination of unclean hands may be reached when ‘misconduct’ of a party seeking relief ‘has immediate and necessary relation to the equity that he seeks in respect of the matter in litigation,’ i.e. , ‘for such violations of conscience as in some measure affect the equitable relations between the parties in respect of something brought before the court.’ " Gilead Scis., Inc. v. Merck & Co. , 888 F.3d 1231, 1239 (Fed. Cir. 2018), quoting Keystone Driller Co. v. Gen. Excavator Co. , 290 U.S. 240, 245, 54 S.Ct. 146, 78 L.Ed. 293 (1933). In Cisco's view, Egenera committed egregious litigation misconduct when four inventors of the ’430 patent, enlisted by Egenera as paid consultants and represented by Egenera's counsel, testified falsely at the inventorship trial that Peter Schulter was not an inventor, contradicting at times contemporaneous documents that they themselves had authored. This testimony "ha[d] immediate and necessary relation" to the litigation because Egenera was desperate to preserve the validity of the ’430 patent and its claims against Cisco.⁴

As Cisco accurately points out, the court did not credit the inventors’ testimony minimizing Schulter's role in the creation of the invention and characterized it as "post-hoc protestations" and an exercise in "historical revisionism." Inventorship Rulings at 129, ¶ 83(g). Nevertheless, the court is unable to find that Egenera's sketchy posturing of the ’430 patent ’s "Eureka moment" rose to the level of egregious misconduct that would warrant the drastic remedy of dismissal. As the Federal Circuit noted, Egenera's account of the inventorship was staked out at a time when neither party had advocated for a means-plus-function understanding of the "logic to modify" term and was thus "consistent with its preferred claim construction." CAFC Opinion at 1377. Thereafter, Egenera was locked into its position owing in part to, as it turned out, this court's erroneous application of judicial estoppel.⁵ As was the case here, inventorship "sometimes [ ] is complicated." Id. at 1376. "Ultimately, inventorship is a legal conclusion premised on underlying factual findings, and one that depends on claim construction." Id. The interplay of claim construction and inventorship in this case was settled only after "a three-day trial and [an] appeal." Id. at 1378. Against this backdrop, while the court by no means endorses Egenera's less than level downplaying of Schulter's contribution to the ’430 patent, the court also cannot, in light of the Federal Circuit's ruling, go so far as to conclude that the dictates of equity require dismissal. Accordingly, Cisco's motion for summary judgment of unclean hands will be denied, and Egenera's motion for summary judgment of unsoiled hands will be allowed.

CISCO'S MOTION FOR JUDGMENT OF NONINFRINGEMENT

Cisco contends that, in light of the evidentiary record and the court's claim construction, Egenera cannot plausibly make out a case of infringement. "To support a summary judgment of noninfringement it must be shown that, on the correct claim construction, no reasonable jury could have found infringement on the undisputed facts or when all reasonable factual inferences are drawn in favor of the patentee." Netword, LLC v. Centraal Corp. , 242 F.3d 1347, 1353 (Fed. Cir. 2001). Infringement comes in two flavors. "To establish literal infringement, all of the elements of the claim, as correctly construed, must be present in the accused system." Id. "For infringement by equivalency, all of the elements of the claimed invention or an equivalent thereof must be present in the accused system." Id. at 1354.

The ’430 patent is directed to solving problems in manually configuring, deploying, and maintaining enterprise and application servers, see ’430 patent, col. 1, ll. 21-58, and discloses "a processing platform from which virtual systems may be deployed through configuration commands," id. , col. 2, ll. 45-47.

The platform provides a large pool of processors from which a subset may be selected and configured through software commands to form a virtualized network of computers ("processing area network" or "processor clusters") that may be deployed to serve a given set of applications or customer. The virtualized processing area network (PAN) may then be used to execute customer specific applications, such as web-based server applications. The virtualization may include virtualization of local area networks (LANs) or the virtualization of I/O storage. By providing such a platform, processing resources may be deployed rapidly and easily through software via configuration commands, e.g., from an administrator, rather than through physically providing servers, cabling network and storage connections, providing power to each server and so forth.

Id. , col. 2, ll. 47-62.⁶

Egenera asserts claims 1, 3-5, and 7-8 of the ’430 patent. Claim 1 is representative.

1. A platform for automatically deploying at least one virtual processing area network, in response to software commands, said platform comprising:

a plurality of computer processors connected to an internal communication network;

at least one control node in communication with an external communication network and in communication with an external

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