M2M Solutions LLC v. Motorola Solutions, Inc.

M2M SOLUTIONS LLC, Plaintiff, v. MOTOROLA SOLUTIONS, INC., TELIT COMMUNICATIONS PLC,and TELIT WIRELESS SOLUTIONS INC., Defendants.

Civil Action No. 12-33-RGA

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

January 6, 2016

MEMORANDUM OPINION

Richard D. Kirk, Esq., Stephen B. Brauerman, Esq., Vanessa R. Tiradentes, Esq., Sara E. Bussiere, Esq., BAYARD, P.A., Wilmington, DE; Marc N. Henschke, Esq. (argued), Jeffrey N. Costakos, Esq., Jason J. Keener, Esq. (argued), Jeffrey J. Mikrut, Esq., Kadie Jelenchik, Esq., Matthew J. Shin, Esq., FOLEY & LARDNER LLP, Boston, MA.

Attorneys for Plaintiff M2M Solutions LLC.

Jack B. Blumenfeld, Esq., Rodger D. Smith II, Esq., MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, DE; David Loewenstein, Esq. (argued), Clyde A. Shuman, Esq., Guy Yonay, Esq. (argued), Keren Livneh, Esq. (argued), PEARL COHEN ZEDEK LATZER, New York, NY.

Attorneys for Defendants Telit Communications PLC and Telit Wireless Solutions Inc.

ANDREWS, U.S. DISTRICT JUDGE:

Before the Court are various Motions for Summary Judgment filed by Defendants Telit Communications PLC ("PLC") and Telit Wireless Solutions Inc. ("Telit U.S.") (collectively, "Defendants"). Defendants bring three separate motions, all of which the Court will consider here: Motion for Summary Judgment Related to Damages (D.I. 165), Motion for Summary Judgment of Invalidity (D.I. 171), and Motion for Summary Judgment of Non-Infringement (D.I. 175). The motions are fully briefed. (D.I. 166, 172, 177, 196, 198, 202, 226, 228, 230). The Court heard oral argument on October 30, 2015. (D.I. 245). For the reasons that follow, the Court will deny Defendants' Motion for Summary Judgment of Invalidity (D.I. 171) and Motion for Summary Judgment of Non-Infringement (D.I. 175) in their entirety, but will grant Defendants' Motion for Summary Judgment Related to Damages (D.I. 165) in its entirety.

I. BACKGROUND

On January 13, 2012, Plaintiff M2M Solutions LLC ("Plaintiff") filed five patent infringement actions asserting infringement of U.S. Patent Nos. 8,094,010 ("'010 patent") and 7,583,197 ("'197 patent"). (D.I. 1). The Court held a Markman hearing, after which it invalidated the '197 patent and construed several claim terms in the '010 patent. (D.I. 94). In this action, the Court granted a stipulation as to Defendant Motorola Solutions, Inc., for entry of final judgment of invalidity and non-infringement of the '197 patent, which reserved Plaintiff's right to appeal. (D.I. 158). Accordingly, the present motions relate solely to Plaintiff's remaining claims against the Telit Defendants for infringement of the '010 patent.

The '010 patent, broadly speaking, relates to mobile communications technology. ('010 patent, col. 2, ll. 56-57). It discloses "a programmable wireless communications apparatus" that "serves to address [] diverse communication requirements" and allows for "remote datamonitoring." (Id. col. 1, ll. 22-23; id. col. 7, ll. 24-30). Plaintiff asserts that Defendants indirectly infringe numerous dependent claims of the '010 patent.¹ Plaintiff dropped its direct infringement contentions and now only asserts contributory infringement and induced infringement. (D.I. 198 at 7-8). The asserted apparatus claims all depend from either unasserted independent Claim 1 or Claim 52. Defendants' non-infringement contentions revolve exclusively around these two independent claims. Claim 1 of the '010 patent reads as follows:

1. A programmable communicator device comprising:

a wireless communications circuit for communicating through an antenna over a communications network;

an identity module for storing a unique identifier that is unique to the programmable cornmunicator device;

a processing module for authenticating an at least one transmission sent from a programming transmitter and received by the programmable communicator device, the at least one transmission including a coded number and at least one telephone number or Internet Protocol (IP) address corresponding to an at least one monitoring device, wherein the processing module authenticates the at least one transmission by determining if the at least one transmission contains the coded number, the processing module authenticating the at least one transmission if the transmission includes the coded number;

a memory module for storing the at least one telephone number or IP address from the authenticated transmission as one of one or more permitted callers if the processing module authenticates the at least one transmission by determining that the at least one transmission includes the coded number; and

wherein the at least one transmission from a programming transmitter comprises a Short Message Service (SMS) data message, or a General Packet Radio Service (GPRS) or other packet switched data message.

('010 patent, claim 1).

I construed the term "wireless communications circuit for communicating through an antenna" to require the inclusion of an antenna. (D.I. 94 at 15). Plaintiff, and its expert oninfringement, Dr. Ray W. Nettleton, opine that, as sold out-of-the-box, Defendants' accused modules literally meet and embody all but one of the recited claim limitations. (D.I. 198 at 7-8; D.I. 199-1 at 11-12, ¶ 29). They allege that the accused products contain pads or connectors specifically designed for connecting to an antenna. (D.I. 198 at 8; D.I. 199-1 at 15, ¶ 41). Plaintiff thus argues that in order to use the accused products at all, customers will have to connect them to an antenna, something which Defendants instruct customers to do. (D.I. 198 at 8). Accordingly, the crux of Plaintiff's infringement contentions is that "[o]nce the customers connect an accused product to an antenna, it then literally meets and embodies every limitation of M2M's asserted apparatus claims, and consequently any use of that product by the customer would constitute an act of direct infringement." (Id. (citing D.I. 199-1 at 11-12, ¶ 29)).

II. LEGAL STANDARD

"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 has the initial burden of proving the absence of a genuinely disputed material fact relative to the claims in question. Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). Material facts are those "that could affect the outcome" of the proceeding, and "a dispute about a material fact is 'genuine' if the evidence is sufficient to permit a reasonable jury to return a verdict for the nonmoving party." Lamont v. New Jersey, 637 F.3d 177, 181 (3d Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The burden on the moving party may be discharged by pointing out to the district court that there is an absence of evidence supporting the non-moving party's case. Celotex, 477 U.S. at 323.

The burden then shifts to the non-movant to demonstrate the existence of a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986);Williams v. Borough of West Chester, Pa., 891 F.2d 458, 460-61 (3d Cir. 1989). 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).

When determining whether a genuine issue of material fact exists, the court must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Scott v. Harris, 550 U.S. 372, 380 (2007); Wishkin v. Potter, 476 F.3d 180, 184 (3d Cir. 2007). A dispute is "genuine" only if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson, 477 U.S. at 247-49. If the non-moving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to judgment as a matter of law. See Celotex Corp., 477 U.S. at 322.

III. DISCUSSION

A. Motion for Summary Judgment of Non-Infringement (D.I. 175)

Defendants' non-infringement arguments can be broken down into several overarching categories. First, Defendants argue that the '010 patent does not claim functional capability but instead covers structures and method steps, and that Plaintiff failed to prove that anyone directly infringed by not showing that the product inherently contains these structures or that any of these method steps actually occurred. (D.I. 177 at 17-19). Second, Defendants argue that even if the '010 patent claims cover capability, there is no infringement because users must modify the device to enable the alleged capability. (Id. at 19). Third, Defendants make three specificarguments asserting that, even after the devices are so modified, certain technical aspects of the accused products do not meet the claim limitations of the '010 patent. (Id. at 19-21). Fourth, Defendants make several arguments relating to the standards for indirect infringement. (Id. at 21-25).

At the outset, some background on Plaintiff's specific infringement contentions is useful. Plaintiff asserts that only two specific features of the accused products allow the products to operate using infringing functionality: performing coded number authentication on 1) "incoming 'digest ATRUN SMS' message transmissions," and 2) "incoming TCP/IP transmissions received in server mode subject to default automatic authentication."² (D.I. 198 at 11-12 (citing D.I. 199-1 at 20-24, ¶¶ 55-63)). More specifically, according to Plaintiff and its expert, the accused products are capable of acting as the claimed "processing...