Trueposition, Inc. v. Polaris Wireless, Inc.

TruePosition, Inc. Plaintiff, v. Polaris Wireless, Inc. Defendant.

C.A. No.12-646-RGA-MPT

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

March 3, 2015

REPORT AND RECOMMENDATION

I. Introduction

This patent infringement matter is brought by TruePosition, Inc. ("TruePosition") against Polaris Wireless, Inc. ("Polaris"). TruePosition moves under FED. R. CIV. P. 54(b) to allow an interlocatory appeal to the United States Court of Appeals for the Federal Circuit of this court's finding of invalidity of Claims 113 and 114, or alternatively, for voluntary dismissal of Claim 98 without prejudice and entry of final judgment as to Claims 113 and 114 under FED. R. CIV. P. 41(a)(2). For the reasons stated below, TruePosition's motions should be denied.

II. Background

A. Parties

TruePosition is a Delaware corporation, operating in Pennsylvania, which provides services and equipment for locating mobile devices for national security and intelligence purposes.¹ Polaris is a Delaware corporation, operating in California, andprovides similar services and equipment for determining the location of mobile devices.² TruePosition and Polaris compete for business from cellular network carriers and other customers that use equipment and software for locating mobile devices.³

TruePosition's infringement claims focus on Polaris' purported use of probes for mobile station or mobile device location without disrupting the carrier's system.⁴ TruePosition filed suit on May 23, 2012 alleging infringement by Polaris of U.S. Patent No. 7,783,299 (the "'299 Patent").⁵ On June 3, 2013, Polaris petitioned for Inter Partes Review ("IPR") with the Patent and Trademark Office ("Patent Office") of Claims 113 and 114.⁶ On July 12, 2013, Polaris moved to stay this proceeding pending the outcome of the IPR, which was denied.⁷ After conducting a Markman hearing on October 18, 2013, the court found Claims 113 and 114 invalid as indefinite in a Report and Recommendation issued on February 2, 2014.⁸ The Patent Office granted Polaris' IPR petition on November 15, 2013.⁹ Contrary to this court's ruling, the Patent Office, in granting Polaris' petition, found Claims 113 and 114 as definite.¹⁰ Thereafter, while the IPR was ongoing, TruePosition filed objections to the Report and Recommendation and moved, unopposed, to stay the proceedings pending the resolution of its objections.¹¹

On July 15, 2014, the Patent Office held an IPR hearing on the validity of Claims113 and 114 based on anticipation and obviousness under 35 U.S.C. §§ 102 and 103.¹² On August 26, 2014, the Honorable Richard G. Andrews affirmed the finding in the Report and Recommendation that the "means for detecting" steps of Claims 113 and 114 were indefinite and incapable of construction.¹³

Subsequent settlement efforts between the parties were unsuccessful.¹⁴ TruePosition thereafter informed Polaris that it would not continue to litigate only Claim 98 without Claims 113 and 114.¹⁵ Since TruePosition would likely appeal an adverse determination by the Patent Office on Claims 113 and 114, it suggested, for efficiency purposes, that the claim construction and invalidity issues from both forums be addressed together on appeal.¹⁶ Polaris rejected TruePosition's proposal and demanded dismissal with prejudice.¹⁷ On October 16, 2014, TruePosition moved to stay the proceedings on Claim 98, pending its possible appeal of Claims 113 and 114 to the Federal Circuit,¹⁸ relying on Rule 54(b) or alternatively Rule 41(a)(2).¹⁹ TruePosition also offered Polaris a covenant-not-to-sue for Claim 98, unless TruePosition prevailed on appeal.²⁰ On October 24, 2014, both parties agreed to stay the proceedings in the instant matter pending a final decision on the present motions.²¹ On November 5, 2014,the Patent Office found Claims 113 and 114 invalid as anticipated and obvious.²²

III. FED. R. CIV. P. 54(b)

A. Standard of Review

FED. R. CIV. P. 54(b) provides:

When an action presents more than one claim for relief - whether as a claim, counterclaim, crossclaim, or third-party claim . . . the court may direct entry of a final judgment as to one or more, but fewer than all, claims . . . only if the court expressly determines that there is no just reason for delay. Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims . . . does not end the action as to any of the claims . . . and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.²³

Therefore, "certification under Rule 54(b) involves a two step analysis: (1) a determination of whether a claim to be appealed is final; and (2) a determination that there is no justification for delay."²⁴

The rule "was designed in an attempt 'to strike a balance between the undesirability of piecemeal appeals and the need for making review available at a time that best serves the needs of the parties.'"²⁵ Certification of a judgment as final under Rule 54(b), however, is the exception and not the rule to the usual course of proceedings in a district court.²⁶ Accordingly, "not all final judgments on individualclaims should be immediately appealable, even if they are in some sense separable from the remaining unresolved claims."²⁷

B. Discussion

1. Finality

For a judgment to be final, it "must be a 'judgment' in the sense that it is a decision upon a cognizable claim for relief, and it must be 'final' in the sense that it is 'an ultimate disposition of an individual claim entered in the course of a multiple claims action.'"²⁸ The decision must be "issued by the trial court which 'ends the litigation on the merits and leaves nothing for the court to do but execute the judgment . . . .'"²⁹ "'[T]he District Court cannot, in the exercise of its discretion, treat as final that which is not final within the meaning of [28 U.S.C.] § 1291.'"³⁰

TruePosition argues this court's finding of invalidity of Claims 113 and 114, based on indefiniteness, was a final disposition of these claims.³¹ TruePosition maintains sinceClaims 113 and 114 relate to a mobile-tracking location system that monitors one link, and Claim 98 pertains to a different link, the claims are independent of each other in subject-matter and requested relief.³² For example, to prove infringement, TruePosition argues Claim 98 covers a system that is "configured to monitor an A link and a GSM-MAP link,"³³ while Claims 113 and 114 require proving a "means for monitoring" an Abis link.³⁴ TruePosition notes the court's indefiniteness ruling of Claims 113 and 114 was based on the means-plus-function analysis, and such issues do not apply to Claim 98 because it does not contain a means-plus-function claim.³⁵ TruePosition further asserts any prior art defenses will involve different proofs because the claim terms differ between Claim 98 and Claims 113 and 114.³⁶

Polaris argues no final disposition resulted from the finding of invalidity of Claims 113 and 114.³⁷ Polaris asserts the complaint only sets forth a sole count, infringement of the '299 Patent.³⁸ Accordingly, because TruePosition has only raised a single cause of action, Polaris maintains this matter does not involve multiple claims, and Rule 54(b) is inapplicable.³⁹ Polaris relies on Liberty Mut. Ins. Co. v. Wetzel,⁴⁰ where the Supreme Court announced "[R]ule 54(b)(2) 'does not apply to a single claim action . . . . It is limited expressly to multiple claim actions in which one or more but less than all of themultiple claims have been finally decided and are found otherwise to be ready for appeal.'"⁴¹ Polaris notes a final disposition of a single cause of action does not occur until all asserted claims have been adjudicated, and since Claim 98 remains, TruePosition's sole claim of patent infringement is not final, regardless of the finding of invalidity of Claims 113 and 114.⁴²

TruePosition contends Polaris' argument is too formalistic, and that infringement of Claim 98 is the "same claim" with the "same legal theory" as Claims 113 and 114.⁴³ It points to 35 U.S.C. § 282(a),⁴⁴ for the proposition that each claim is considered independently of the other as a separate legal claim concerning invalidity.⁴⁵

Within the meaning of Rule 54(b), the definition of a "claim" is not clear.⁴⁶ The Third Circuit recognizes that "[t]here is not a definitive test to determine whether more than one claim is before the court,"⁴⁷ and applies the Supreme Court's guidance, noting "[w]e need not here attempt any definitive resolution of the meaning of what constitutes a claim for relief within the meaning of the rules. It is sufficient to recognize that a complaint asserting only one legal right, even if seeking multiple remedies for thealleged violation of that right, states a single claim for relief."⁴⁸ Regarding patent litigation, if not all the aspects of a claim of infringement have been decided, then the claim may not be certified pursuant to Rule 54(b).⁴⁹

Although the invalidity judgments on Claims 113 and 114 are final, they are not immediately appealable, even though they appear to be separable from the unresolved Claim 98. Both the Third Circuit and the Federal Circuit have firmly established that if aspects of a single claim of patent infringement remain and are not resolved, then that claim cannot be certified as final under Rule 54(b). TruePosition's reliance on 35 U.S.C. § 282(a), and its assertion that Claims 98, 113, and 114 should be considered independently of each other as separate claims, is misplaced because § 282 only addresses that each claim of a patent is presumed to be valid. Section 282 establishes that a finding of invalidity for one claim of the patent does not invalidate the remaining claims or the patent itself.⁵⁰ A reading of § 282(a) does not support TruePosition's argument that each claim is considered separate and distinguishable from one another in regards to finality. Here, the three asserted claims must be viewed as part of a single action for...