MercAsia U.S., LTD v. Jianqing Zhu

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MERCASIA USA LTD, Plaintiff, v. JIANQING ZHU, et. al, Defendants.

No. 3:17-CV-718 JD

United States District Court, N.D. Indiana, South Bend Division

February 14, 2023

OPINION AND ORDER

JON E DEGUILIO CHIEF JUDGE UNITED STATES DISTRICT COURT

This case concerns competing wine aerators. Plaintiff MercAsia alleges that Defendant 3BTech's Waerator 1.0 wine aerator infringes a patent held by MercAsia. In the past, Defendants contended that the Waerator product lacks one limitation: air ports, multiple of which must be located above the device's spout in order to literally infringe the patent in question. After claim construction and multiple years of discovery, Defendants untimely revised their contentions to state ten limitations absent from the Waerator on the eve of filing this motion for summary judgment. MercAsia objected in its response under Federal Rules of Civil Procedure 26 and 37. The Court finds summary judgment on infringement is inappropriate, as a material dispute of fact remains: whether several identified potential ports qualify as air ports. Further, as a matter of law, the Court narrows the application of doctrine of equivalents to this case, finding that air ports located below the spout cannot be the equivalent of those located above the spout. Finally, the Court holds Defendants' disclosure of nine new contentions untimely and will not consider them on summary judgment or at trial. Therefore, the Court GRANTS in part the motion for summary judgment only as to the doctrine of equivalents as discussed herein; to all other issues, the Court DENIES Defendants' motion for summary judgment.

A. Facts

The patent at issue in this case is U.S. Patent no. 7,882,986 (“the 986 Patent”), entitled “Liquid Dispenser,” issued to Yi Chung Huang and Yu-Jung Huang on February 8, 2011. The 986 Patent claims a liquid dispenser being mounted in a container having a top, a bottom and a mouth. In 2014, the 986 Patent's rights were assigned to Jingle Master International Ltd, who then granted an exclusive license to MercAsia, the plaintiff in this action. MercAsia uses the technology described in the 986 Patent in its wine aerator, dubbed the “Aervana.” Defendant 3BTech makes a similar wine aerator, the “Waerator.” MercAsia brought this suit, alleging that the Waerator 1.0 infringes Claim 1 of the 986 Patent in violation of 35 U.S.C. § 271(c) literally or by the doctrine of equivalents, and that the infringement is willful. 3BTech's CEO, Jianqing Zhu, is also a defendant in this action.^[1] While not all limitations of the claim are relevant for the purpose of this motion, it is important to know the claim requires multiple air ports and specifies that the spout of the product is below the air ports.

The parties were initially quite active, but in 2018 the action was stayed for eight months pending the outcome of Inter Partes Review. The 2019 decision found Claim 1 of the 986 Patent was not unpatentable, and the litigation resumed. The parties initially sought a trial date in spring of 2021. (DE 55 at 6.) The Court's initial scheduling order, issued November 2019, closed claim construction discovery in March 2020, with fact discovery and expert discovery closing July and October of the same year. (DE 59 at 2.)1 The parties appeared to hum along with discovery, and MercAsia submitted a set of interrogatories to Defendants on January 31, 2020, containing two interrogatories of note for the present motion. Interrogatories 2 and 3 asked Defendants to state what limitations were absent from the allegedly infringing product and how claim construction informed those contentions. Defendants first responded on February 27, 2020, and identified the lack of air ports as their lone contention. (DE 216-7 at 3.) Defendants' second responses, served March 4, 2020, also identified only air ports as the only feature at issue. Defendants did not update these responses until July 1, 2022.

Discovery continued. The parties participated in the claim construction process pursuant to Northern District of Indiana Local Patent Rule 4-1. After the parties submitted terms for construction, the Court issued its claim construction order on June 30, 2020. (DE 110.) Only two terms were defined pursuant to that order, and the parties did not seek the definition of any other terms. (See DE 79, “Joint Claim Construction Chart.”) Those terms are “shell,” which the Court found to mean “a protecting or enclosing case or cover,” and “air ports,” which the Court found to mean “an opening for the passage of air” in the context of the 986 patent. (DE 110 at 5-6.) Though the Court adopted MercAsia's definitions verbatim, at no time did Defendants formally seek rolling construction of these terms or construction of any other terms.

Discovery became a bit contentious. MercAsia filed two motions to compel (DE 66 and DE 106), alleging Defendants failed to produce documents. MercAsia later moved for sanctions for these discovery failures, which were denied (DE 153.) Deadlines began to be pushed. An amended order specifically required Defendant 3BTech to produce all supplemental discovery responses no later than August 31, 2020. (DE 129 at 1.) A subsequent order kicked that deadline to September 11, 2020 (DE 131 at 1.) Another later scheduling order made final supplemental discovery responses for all parties due September 3, 2021 (DE 183 at 1.) This order was the Court's final word on scheduling; it closed fact discovery on October 18, 2021, and expert discovery on May 31, 2022. On June 2, 2022, the Court entered a text entry formally concluding the discovery period. (DE 202.) The Court then set the deadline for dispositive motions as July 5, 2022. (DE 202.)

On July 1, 2022, Defendants served MercAsia with supplemental responses alleging nine new contentions of noninfringement. On July 5, 2022, just four days later, Defendants filed the present motion for summary judgment. (DE 205.) The motion is now ripe for deciding.

B. Legal Standards

(1) Summary Judgment

The Court shall grant summary judgment if there is no genuine dispute as to any material fact, such that the movant is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477U.S. 242, 248 (1986). “Material facts” are those that “might affect the outcome of the suit” under the applicable substantive law. Id. In evaluating a motion for summary judgment, the Court must draw all inferences in the light most favorable to the nonmovant. Matsushita Elec. Indus. Co., Ltd. V. Zenith Radio Corp., 475 U.S. 574, 587 (1986). However, when the nonmovant is the party with the ultimate burden of proof at trial, the moving party's burden “may be discharged by showing-that is, pointing out to the district court -that there is an absence of evidence to support the nonmoving party's case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). “In short, summary judgment is appropriate if, on the record as a whole, a rational trier of fact could not find for the nonmoving party.” Durkin v. Equifax Check Servs., Inc., 406 F.3d 410, 415 (7th Cir. 2005).

(2) Infringement

“Infringement is a question of fact.” Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034, 1040 (Fed. Cir. 2016). For infringement, the patentee has the burden of persuasion. SIMO Holdings Inc. v. Hong Kong uCloudlink Network Tech. Ltd., 983 F.3d 1367, 1380 (Fed. Cir. 2021). To resolve the question of infringement, the Federal Circuit has established a two-step analysis. CommScope Techs. LLC v. Dali Wireless Inc., 10 F.4th 1289, 1295 (Fed. Cir. 2021). “First, the court determines the scope and meaning of the patent claims asserted, and then the properly construed claims are compared to the allegedly infringing device.” Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d 1371, 1376 (Fed. Cir. 2001). In the Northern District of Indiana, the claims are construed in a process governed by Local Patent Rule 4-1, “which is designed to clearly establish the claims at issue early in the litigation.” See Days Corp. v. Lippert Components, Inc., No. 3:17-CV-208-PPS-MGG, 2018 WL 1167217, at *1 (N.D. Ind. Mar. 6, 2018); see also N.D. Ind. L.P.R. 4-1. If the process described in L.P.R. 4-1 is followed, on summary judgment, the claims have been construed; all that remains is the legal question of infringement.

“To prove literal infringement, the patentee must show that the accused device contains each and every limitation of the asserted claims.” Ericsson, Inc. v. D-Link Systems, Inc., 773 F.3d 1201, 1215 (Fed. Cir. 2014). If any claim limitation is absent from the accused device, there is no literal infringement as a matter of law. Amgen, Inc. v. F. Hoffman-LaRoche Ltd., 580 F.3d 1340, 1374 (Fed. Cir. 2009). Under the doctrine of equivalents, “a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is equivalence between the elements of the accused product or process and the claimed elements of the patented invention.” Carnegie Mellon Univ. v. Hoffman-LaRoche Inc., 541 F.3d 1115, 1129 (Fed. Cir. 2008). However, if the accused product is missing an equivalent element to even one limitation recited in the asserted patent claim, it cannot infringe the claim under the doctrine of equivalents. AquaTex Indus., Inc. v. Techniche Solutions, 419 F.3d 1374, 1382 (Fed. Cir. 2005).

C. Discussion

The Court finds a material dispute of fact exists regarding whether the alleged ports identified by MercAsia allow for the passage of air, making them “air ports” under the claim construction order and rendering the Waerator literally infringing. The Court further finds air ports below the spout cannot be the equivalent of those above. The Court also finds Defendants will not be...