SUE L. ROBINSON, District Judge.
Plaintiffs Belden Technologies, Inc. and Belden CDT (Canada) Inc. (collectively, "Belden") own several patents directed to high performance data cables and methods of making such cables, including U.S. Patent Nos. 5,424,491 ("the '491 patent"), 6,074,503 ("the '503 patent"), 7,135,641 ("the '641 patent"), 7,339,116 ("the '116 patent"), 6,570,095 ("the '095 patent"), 6,998,537 ("the '537 patent") and 7,179,999 ("the '999 patent") (collectively, "the patents in suit"). On December 2, 2009, plaintiffs dropped their claim of infringement of the '944 patent, and on December 4, 2009, the parties stipulated that certain claims of the patents in suit were infringed and others were not. (D.I. 105, 106) The court resolved the remaining issues of infringement in its memorandum opinion on summary judgment of August 18, 2010. (D.I. 218) In said opinion, the court also found that claims 4 and 7 of the '116 patent were invalid. (Id.) A trial was held from September 7-15, 2010 on the outstanding invalidity issues. The jury returned a verdict finding that claim 1 of the '503 patent, claims 1 and 2 of the '491 patent and claim 31 of the '095 patent were invalid. (D.I. 247) The jury further found that claim 19 of the '537 patent, claim 2 of the '999 patent, claim 27 of the '095 patent, and claim 13 of the '641 patent were not invalid. (Id.) Currently before the court are plaintiffs' renewed motion for JMOL of no anticipation and no obviousness or for a new trial (D.I. 254), defendants' renewed motion for JMOL of anticipation, to amend the judgment, or for a new trial (D.I. 250), and plaintiffs' motion for a permanent injunction (D.I. 251).
The court presumes familiarity with the data cable technology at issue in this case, as detailed in its prior opinion. See Belden Techs. Inc. v. Superior Essex Commc'ns LP, 733 F.Supp.2d 517, 524-533 (D.Del.2010). In summary, the high performance data cables at issue utilize twisted pair technology. Data cables designed for communication applications are generally comprised of at least two twisted pairs, with one of the pairs transmitting data and the other receiving data. ('116 patent, col. 1:16-17) An individual twisted pair typically includes two insulated conductors,
Multiple tools exist to obviate or minimize these undesirable characteristics and meet performance specifications, including cable lay techniques and various cable configurations. (Id., col. 1:30-49) The longitudinal distance between twists in a twisted pair is known as the "twist lay." ('503 patent, col. 1:28-30) In an unshielded twisted pair cable ("UTP") employing a uniform twist lay, the adjacent twisted pairs are closely aligned. (Id., col. 1:31-34) This proximity magnifies crosstalk. (Id.) Varying the twist lays among the twisted pairs of a cable increases the distance between adjacent twisted pairs and, accordingly, reduces crosstalk. (Id., col. 1:35-39)
Cables designed for voice frequency or low-speed data typically employ a twist lay of between 3.7 and 5.7 inches. ('491 patent, col. 1:7-13) By contrast, high-speed data cables require a much smaller twist lay. (Id., col. 1:18-23) The conventional low-speed data cables minimized crosstalk through use of the aforementioned variation in twist lay. (Id. at col. 1:40-43) Introducing these variations among twisted pairs characterized by smaller twist lays results in an uncontrollable nominal characteristic impedance,
Alternatively, each individual twisted pair in the cable may be surrounded by a conductive "shield," creating a shielded twisted pair cable ("STP"). The individual shields in a STP act to prevent or reduce the occurrence of NEXT and FEXT. Surrounding the plurality of twisted pairs with an overall shield, otherwise known as a screened twisted pair cable ("ScTP"), also serves to minimize crosstalk. Both configurations suffer from the potential for geometric instability,
To prevail on a renewed motion for judgment as a matter of law following a jury trial under Federal Rule of Civil Procedure 50(b), the moving party "`must show that the jury's findings, presumed or express, are not supported by substantial evidence or, if they were, that the legal conclusions implied [by] the jury's verdict cannot in law be supported by those findings.'" Pannu v. Iolab Corp., 155 F.3d 1344, 1348 (Fed.Cir.1998) (quoting Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 893 (Fed.Cir.1984)). "`Substantial' evidence is such relevant evidence from the record taken as a whole as might be acceptable by a reasonable mind as adequate to support the finding under review." Perkin-Elmer Corp., 732 F.2d at
The decision to grant or deny a new trial is within the sound discretion of the trial court and, unlike the standard for determining judgment as a matter of law, the court need not view the evidence in the light most favorable to the verdict winner. See Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S.Ct. 188, 66 L.Ed.2d 193 (1980). Federal Rule of Civil Procedure 59(a) provides, in pertinent part:
New trials are commonly granted in the following situations: (1) where the jury's verdict is against the clear weight of the evidence, and a new trial must be granted to prevent a miscarriage of justice; (2) where newly-discovered evidence surfaces that would likely alter the outcome of the trial; (3) where improper conduct by an attorney or the court unfairly influenced the verdict; or (4) where the jury's verdict was facially inconsistent. See Zarow-Smith v. N.J. Transit Rail Operations, 953 F.Supp. 581, 584 (D.N.J.1997) (citations omitted). The court, however, must proceed cautiously and not substitute its own judgment of the facts and assessment of the witnesses' credibility for the jury's independent evaluation. Nevertheless,
Lind v. Schenley Indus. Inc., 278 F.2d 79, 90-91 (3d Cir.1960).
The standard for obtaining relief under Rule 59(e) is difficult to meet. The purpose of a motion for reconsideration is to "correct manifest errors of law or fact or to present newly discovered evidence." Max's Seafood Cafe, By Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir.1999) (citing Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir.1985)). Therefore, a court should exercise its discretion to alter or amend its judgment only if the movant demonstrates one of the following: (1) a change in the controlling law; (2) a need to correct a clear error of law or fact or to prevent manifest injustice; or (3) availability of new evidence not available when the judgment was granted. See id.
Plaintiffs argue that the jury erred by finding claims 1 and 2 of the '491 patent
In its claim construction order of August 24, 2010, 2010 WL 3328333, the court construed the "telecommunications cable" term in the preamble of the '491 patent to be a cable that is "[c]able capable of transmitting high frequency data." (D.I. 215 at 4) While the court did not specifically identify what it considered to be "high frequencies," it did note that its construction of the term comported with the patent specification's statement that one of the goals of the patent was to rectify problems with "telecommunications cable[s] ... designed to operate at high frequencies, perhaps up to 100 megabytes." (Id.)
The cable claimed by the '442 patent is an analog voice cable from the 1950's that operated in the range of "large kilohertz" to "maybe little megahertz." (D.I. 303 at 668:9) At the time of its invention, the cable claimed in the '442 patent was considered "high speed," though it was not "high speed" relative to the effective date of the '491 patent. (D.I. 255 at 8) Plaintiffs reason that, because the cable found in the '442 patent was not "high speed" as defined during the time of invention of the '491 patent, it cannot render the '491 patent obvious as it does not disclose one of the '491 patent's limitations. (Id. at 7-11)
Plaintiffs misunderstand the obviousness requirements of § 103. Not every limitation of a claimed invention need be found in the prior art in order for said invention to be obvious. The Graham factors direct the fact finder to look to the scope and content of the prior art, the differences between the invention and the prior art, and the level of skill of one of skill in the art. KSR Intern. Co. v. Teleflex, Inc., 550 U.S. 398, 406, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007), While it may be easier to prove obviousness if each limitation of the claimed invention is found in the prior art, the level of skill of one of ordinary skill in the art can, at times, fill in the gap when limitations of the claimed invention are not specifically found in the prior art. Purdue Pharma Prods. L.P. v. Par Pharm., Inc., 642 F.Supp.2d 329, 373 (D.Del.2009).
Substantial evidence supports the jury's verdict. The inventors of the '442 patent sought to rectify a problem with modern high speed telecommunications cables. Given the iterative nature of engineering, it only stands to reason that a person of ordinary skill in the art would look to see how other, earlier inventors solved analogous problems in the high speed cables of the time. The jury heard testimony from defendant's expert, Dr. Mark Baxter ("Baxter"), that the disclosure in the '442 patent would have been germane to the problem that the inventors of the '491 patent were trying to solve. (D.I. 302 at 428: 15-429:17) (A person of ordinary skill in the art would be motivated to combine the teaching of the '442 patent with the '210 patent "because it's addressing the same problem. I mean, in fact, as the twists get tighter, you would certainly have motivation to apply these teachings to equalize the characteristics.") While the jury also heard conflicting testimony from plaintiffs' expert, it was up to the jury to determine the experts' credibility and weigh the evidence appropriately.
It was undisputed that the '442 patent did not disclose the 2" twist lay as required by the '491 patent, and that the 2" twist lay limitation came from the '210 patent. (D.I. 255 at 5-6) Plaintiffs argue that there would have been no apparent reason "for adding the relatively short twist lays from the '210 patent to the '442 prior art cable that was designed for use with much longer twist lays." (D.I. 255 at 6)
Once again, substantial evidence supports the jury's verdict. Baxter testified that the '210 and '442 patents both "address[] the same problem." (D.I. 302 at 419:7-13) In fact, `[t]he '210 patent is specific about telecommunications cables with short twists and the advantages you get.... By the mid 90's it was well known in the art to use short twists." (Id. 302 at 428:7-14) The '491 patent itself cites the '210 patent for the proposition that "the use of small twist lays for twisted connector pairs in a particular cable provides the surprising result that electromagnetic interference is reduced to commercially acceptable levels even though the cable is unshielded, to provide minimization in crosstalk." ('491 patent, col. 1:27-32)
Furthermore, the jury heard testimony that a person of ordinary skill in the art would have a reasonable expectation of success in combining the '210 patent and the '442 patent. When asked whether a person of ordinary skill of the art in the early 1990's would have known how to combine the teachings of the '442 patent with the shorter twist lays disclosed in the '210 patent, Baxter responded that "[i]t would have been quite obvious because ... the twist lays are aimed at [solving] cross talk, and you put those in and then you do the different insulation thickness to get the impedances right, so it would have been a very obvious combination." (D.I. 302 at 429:22-430:1) Therefore, the jury's verdict is supported by substantial evidence.
The jury verdict relating to the '095 patent presents an interesting dilemma. Both parties argue that they should be granted a JMOL for essentially the same reason: an inconsistent jury verdict. At issue is the fact that the jury found claim 27 of the '095 patent to be valid and claim 31 to be invalid. The parties both agree that only one limitation in dispute during trial was shared by the two claims: the "twisted about a common central axis" limitation. (D.I. 262 at 14; D.I. 252 at 28; D.I. 255 at 12) In claim 27, the limitation reads, "wherein the configurable dielectric pair separator is arranged to provide a sufficient spacing between the first twisted pair of insulated conductors and the second twisted pair of insulated conductors are
The Federal Circuit reviews inconsistent verdicts under regional circuit law. Callaway Golf Co. v. Acushnet, 576 F.3d 1331, 1343 (Fed.Cir.2009). The Third Circuit has identified four approaches that a district court may take when facing an inconsistent verdict:
Acumed LLC v. Advanced Surgical Servs. Inc., 561 F.3d 199, 217-18 (3d Cir.2009) (citations omitted). An inconsistent verdict can be allowed to stand in "circumstances [] where the verdict appears to be the result of compromise as opposed to jury confusion." Montgomery County v. Microvote Corp., 320 F.3d 440, 451 n. 5 (3d Cir.2003).
The jury found claim 27 to be not anticipated by German Patent No DE 297 19 866 A1 ("the '866 patent"). The jury found claim 31 to be obvious in view of the '866 patent and United States Patent No, 5,670,748 ("the '748 patent"). The '866 patent formed the primary reference, and contained all of the required limitations of claim 31 except for the "foamed polymer." (D.I. 302 at 476:7-481:7) These seemingly inconsistent verdicts can be reconciled when viewed in light of the evidence presented.
At trial, Baxter testified that page six of the '866 patent reveals the "twisted about a common axis" limitation of claims 27 and 31. Specifically, this page reads in relevant part:
(D.I. 262 at 15) (emphasis added)
Concentrating on the "longitudinal reshaping of conductor pairs" language, Baxter demonstrated with a rope model that this longitudinal reshaping involved twisting sets of twisted pairs over each other and around a central axis in such a way that, if one were to slice the cable at various points, the twisted pairs would be in different positions in relationship to each other along the length of the cable. (D.I. 302 at 450:14-451:10) Hence, the cable was "longitudinally reshaped" instead of longitudinally homogeneous. (Id.) Baxter further clarified what the '866 patent meant by "longitudinal reshaping" when he discussed "cable common axis" in the '999 patent,
(D.I. 303 at 543:4-12, 541:21-542:8)
In addition to Baxter's testimony about the disclosure of the '866 patent, substantial testimony was admitted, over plaintiffs' objections, as to the knowledge of one of ordinary skill in the art regarding twisting
Although this explanation solves the inconsistent verdict dilemma, it raises another. Despite their contentions to the contrary, defendants presented an obviousness defense at trial based on the knowledge of one of skill in the art,
The jury found that claim 27 of the '095 patent is not anticipated by Japanese Patent Hei5(1993)-20645 ("the '645 patent"). Once again, the only limitation in dispute is the "twisted about a common central axis" limitation. (D.I. 255 at 32) Defendants argue that the '645 patent discloses said limitation, and that the reason the jury did not find that the '095 patent was anticipated was because plaintiffs improperly argued that the '095 patent required a "helical twist," a limitation not found within the claim. (D.I. 252 at 34)
Regardless of whether the jury believed that claim 27 of the '095 patent required a helical twist, their verdict is supported by substantial evidence. Plaintiffs' expert, Dr. Mark Horenstein ("Horenstein"), testified that the '645 patent instructs users to start with a sheet of plastic or polymer, to take the twisted pairs of conductors and fuse them to said polymer, then roll the sheet up like a "jelly roll." (D.I. 305 at 1133:24-1134:7) He disagreed that this operation of rolling was the same as twisting, as he felt that twisting would create a structure more akin to a licorice stick, i.e., a helical structure. (Id. at 1135:10-14) Using a physical model, Horenstein demonstrated how twisting the '645 patent would destroy the conductor arrangement since, as they are twisted, they would pull off the polymer. (Id. at 1136:13-18) Furthermore, after twisting, "the wires are no longer straight and parallel with the access of the structure." (Id. at 1136:19-21) Even Baxter admitted that the conductors in the '645 patent were parallel to the center axis of the cable and "not twisted themselves about the axis." (D.I. 303 at 663:12-17)
The jury found claim 1 of the '503 patent invalid as anticipated by U.S. Patent No. 4,385,485 ("the '485 patent"). The only limitation that plaintiffs argue is not disclosed by clear and convincing evidence is the "prevents twisting motion of the core" limitation. (D.I. 262 at 19) The parties did not ask for this limitation to be construed by the court and, as such, the jury was instructed to use the ordinary meaning of the words. (D.I. 241 at 17-18)
Substantial evidence support's the jury's verdict that claim 1 of the '503 patent is invalid as anticipated by the '485 patent. At trial, Baxter first opined that in the '503 patent, the reason that the first die prevented twisting of the core was that it aligned the transmission media with the surface features of the core. (D.I. 302 at 354:5-355:7) Baxter then used an animated demonstrative to show that the '485 patent also prevented twisting of the core relative to the transmission media via its first die. (Id. at 376:3-15) Further supporting the jury's verdict and Baxter's explanation, plaintiffs' expert, Mr. Thomas Blackburn ("Blackburn"), admitted on cross examination that the main reason to prevent back twisting in the '503 patent was to preserve the profile of the transmission media and the core. (D.I. 305 at 1062:12-18, 1064:14-1065:8, 1065:18-24)
Plaintiffs argue that the two cabling methods work differently and, therefore, the '485 patent cannot anticipate the '503 patent. (D.I. 255 at 23) In the '485 patent, the whole machine is rotated to impart a twist while the cable itself is held stationary. (Id.) In the '503 patent, the machine is held stationary, and the cable is rotated to impart a twist. (Id.) However, the jury could have reasonably found that this is a distinction without a difference, as both systems contain a die that prevents the twist of the core from propagating back along its length to the point where the core is being aligned with the constituent
The jury also found claim 1 of the '503 patent invalid as obvious in view of Japanese Patent No. Sho56(198)-7307 ("the '307 patent"), combined with the knowledge of one of ordinary skill in the art. The only limitation that is not disclosed by the '307 patent is the "prevents twisting motion of the core" limitation, and the jury found that this limitation would have been obvious to one of ordinary skill in the art. (D.I. 262 at 19) Plaintiffs argue that the jury's finding is erroneous. (Id.)
Once again, substantial evidence supports the jury's verdict. Baxter testified that the '307 patent contained a plus shaped core, and that the cable is twisted to close it. (D.I. 302 at 395:24-396:9, 398:6-24) He then opined that a person of ordinary skill in the art would understand that it was necessary to prevent the twisting of the core at some point, else the transmission media would not stay aligned with the core. (Id. at 400:1-22,401:8-402:3) Furthermore, die 9 of the '307 patent would be the most effective place to attempt to eliminate back twisting as it is the place where the components of the cable are being assembled. (Id. at 402:14-25) Blackburn reiterated Baxter's opinion that the need to prevent twisting of the core would be known to one of skill in the art, and that die 9 of the '307 patent would be a possible place to prevent said twist. (D.I. 305 at 1075:9-20, 1076:10-24)
The jury heard expert testimony that the '307 patent disclosed every limitation of claim 1 except the limitation pertaining to preventing twisting of the core.
Plaintiffs argue that the court erred in refusing to allow evidence of the U.S. Patent and Trademark Office's ("PTO") reexamination of the '503 patent and, therefore, should grant its motion for a new trial on the validity of the '503 patent. (D.I. 255 at 44) In said reexamination, the PTO reviewed both the '485 and '307 prior art patents, and found the '503 patent to be valid over them. (Id. at 26-27)
"All relevant evidence is admissible, except as otherwise provided ..." Fed.R.Evid.402. "Relevant evidence means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Fed. R.Evid. 401. Rule 401's basic standard of relevance is a liberal one. Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 587, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). The trial judge is obligated to act as a "gatekeeper" and has broad discretion to balance the probative value of the evidence against its potential prejudicial harm. See Magnivision, Inc. v. Bonneau Co., 115 F.3d 956, 961 (Fed.Cir.1997)
During a teleconference with the parties, the court issued an oral ruling, excluding evidence of the reexamination of the '503 patent on the basis that it was not relevant and would likely cause confusion among the jury. (D.I. 262 at 25) Plaintiffs argue that the court should have admitted evidence of this reexamination because, unlike other reexaminations that the court has refused to allow into trial, the reexamination here was "final" despite the fact that the PTO had only issued a Notice of Intent to Issue Reexamination Certificate ("NIRC"). (D.I. 255 at 45)
Even if a NIRC is considered "final" by the PTO, and no further action can be taken by the examiner (a contention that defendants dispute), the court did not err by excluding evidence of the reexamination. While the reexamination involved the two invalidating patents at issue, they were presented to the examiner in a very different context than during trial; to wit, the reexamination was ex parte instead of inter partes, and defendants were unable to advance to the examiner the arguments that they made in court, including testimony as to the knowledge and level of skill of one of ordinary skill in the art. Admitting evidence about the '503 patent's reexamination, the outcome of which is not binding on the court, would have only served to confuse the jury and was ultimately far more prejudicial than probative.
Defendants argue that the jury erred by failing to find that claim 19 of the '537 patent is rendered obvious by the combination of the '866 patent and the '748 patent. (D.I. 252 at 7) The only claim limitations in dispute are the "unshielded cable" and a "separator [that] includes a foamed polymer" limitations. (Id. at 7-8)
The jury's verdict is supported by substantial evidence. Defendants' only argument that the combination of the '866 and '748 patent discloses an unshielded cable is Baxter's testimony that the '866 patent does not require an overall shield and that the only shielding in the '866 patent is on the pair separators. (D.I. 302 at 498:4-15) Replacing the separators with a foamed polymer would necessarily remove the shielding, making an unshielded cable. (Id.)
In contrast, Horenstein opined that there would have been no motivation to replace the '866 patent's metal foil shield with the foamed polymer material from the '748 patent. (D.I. 305 at 1123:2-10) The claimed invention of the '866 patent is that of a shielded cable and does not make any reference to non-shielded cables. (Id. at 1123:2-8) Galen Gareis, one of plaintiffs' cable designers, testified that a person of ordinary skill in the art would not look to shielded cable designs for guidance when building an unshielded high speed data cable because of the way the foil shielding alters the cable's ground plane. (Id. at 941:12-943:5) Furthermore, Horenstein testified that the '748 patent's foam polymer is a flame retardant insulation and jacketing material made via an extrusion process wherein the foam is melted into the cable and does not form a separator. (Id. at 1122:6-22) Even Baxter agreed on cross-examination that neither the '866 patent nor the '748 patent "actually show [a separator] formed of a foamed polymer." (D.I. 303 at 665:25-666:5)
The jurors heard from both parties' experts and, ultimately, it was their job to decide which one was more credible. Here, the jury found that claim 19 of the '537 patent was not obvious in view of the '866 and '748 patents, a finding that is supported by substantial evidence.
Defendants argue that the jury erred by failing to find that claim 2 of the
Once again, the jury's verdict is supported by substantial evidence. Defendants contend that the "cabled about a common axis" limitation of the '999 patent is, for the purposes of validity, the same as the "twisted about a common axis" limitation from the '095 patent. (D.I. 252 at 12-14) Defendants then reiterate their argument that, because the jury found claim 31 of the '095 patent obvious, the '866 patent discloses this claim limitation and the jury should have found this patent obvious as well. (Id.) However, as discussed supra, substantial evidence supports the jury's finding that the '866 patent does not disclose the "twisted about a common axis limitation" and, therefore, by implication, it does not disclose the "cabled about a common axis" limitation. By finding claim 2 of the '999 patent to be valid, just like claim 27 of the '095 patent, the jury's verdict is more consistent, rather than less.
Furthermore, the jury had substantial evidence from which to find that the combination of the '866 patent and the '683 patent did not disclose an "unshielded" cable. As discussed supra, it is uncontested that the '866 patent only discloses shielded cables. Defendants cite figure 15 of the '683 patent in support of their contention that the '683 patent discloses an unshielded cable as it "discloses an all plastic tape material as a separator." (D.I. 252 at 15-16; D.I. 303 at 545:21-23) Plaintiffs counter with testimony from Horenstein that figure 15 is, in fact, a shielded cable. In his opinion,
(D.I. 306 at 1182:19-25) Ultimately, Baxter admitted that the purpose of the '683 patent was to disclose and claim shielded cables even though the shielded cables might contain unshielded components. (D.I. 303 at 606:17-607:2) This was especially evident given that every one of the embodiments of the '683 patent is an "overall shielded" cable. (Id. at 607:3-5)
Defendants argue that the jury erred by failing to find that claim 13 of the '641 patent is rendered obvious by the combination of U.S. Patent No. 5,796,046 (the '046 patent) and the U.S. Patent No. 6, 150,612 ("the '612 patent"). (D.I. 252 at 17) The only claim limitation in dispute in this regard is the "wherein the jacket comprises a plurality of protrusions extending away from an inner circumferential surface of the jacket, and wherein the plurality of protrusions provide an air gap between the plurality of twisted pairs of insulated conductors and the inner circumferential surface of the jacket." (Id.) Neither the "protrusions extending away" nor the "inner circumferential surface of the jacket" limitations were construed by the court,
During trial, defendants made out a prima facie case of obviousness that plaintiffs failed to rebut. Baxter explained that the '046 patent discloses a cable jacket with a plurality of sharply angled protrusions projecting inward from the inner circumferential surface of the cable jacket. (D.I. 303 at 565:21-568:8) These triangular protrusions, like the rectangular ones in the '641 patent, serve to keep the pairs away from the jacket, (Id. 568:9-23) According to Baxter, there is no substantive difference between the two types of protrusions. (Id.)
Plaintiffs failed to rebut defendants' showing that the '046 patent discloses a plurality of protrusions extending away from an inner circumferential surface of the jacket that creates an air gap between the conductors and the jacket. In attempting to do so, Horenstein opined that there is no "inner surface" disclosed in the '046 patent because the striations are uninterrupted as they encircle the inner elements of the cable.
It is undisputed that the ridged jacket is designed to address some form of crosstalk, be it internal (between the twisted pairs), or external (between sets of cables). Plaintiffs argue that the '046 patent and the '612 patent both address internal crosstalk and, therefore, a person of ordinary skill in the art would have no reason to combine them because they would be cumulative. Defendants disagree, reasoning that the '046 patent addresses external crosstalk, and the '612 patent internal crosstalk, thereby providing a motivation to combine.
At trial, defendants demonstrated a motivation to combine the '046 and the '612 patents regardless of whether they address the same problem or different problems. Baxter opined that, if the references were considered to address the same problem, i.e., internal crosstalk, a person of ordinary skill in the art would be motivated to combine them because "it is standard practice in cable design to use multiple techniques to improve a single parameter." (D.I. 303 at 574:1-14)
Plaintiffs failed to rebut defendants' showing of a motivation to combine. William Clark, one of the inventors of the patents-in-suit, testified that jacket protrusions like those of the '046 patent serve to decrease internal crosstalk by lowering the overall dialectic constant of the cable via reduction of capacitive coupling. (D.I. 304 at 832:2-10) The presence of a cross-web separator, found in the '612 patent, also helps to reduce the cross talk. (D.I. 304 at 832:14-16) These separators are so effective that Horenstein claimed that the cross web separator of the '612 patent surpassed all known standards for internal crosstalk at the time of its invention. (D.I. 306 at 1212:25-1213:6) Because of the interrelatedness of the two technologies, Horenstein believed that there was no motivation to combine them. (Id.)
This testimony, however, fails to overcome defendants' showing of obviousness. If anything, plaintiffs' expert's opinion that the technologies are interrelated
The jury heard testimony from Baxter that, if the references were directed to two different types of crosstalk, they would have been even more obvious to combine as the '612 patent deals with internal cross talk, and the '046 patent deals with external crosstalk. (Id. at 574:15-24) "[I]n a high performance cable, you would be extremely motivated—it would, in fact, be common sense for a designer to apply both of these to design a high performance cable." (Id. at 574:25-575:3) "It's extremely simple to combine them. And when you do, you get a very predictable result. Each one of them does exactly what it did on its own, and you put them together and you get the benefits of both of them in one cable." (Id. at 575:16-23)
Under KSR, this testimony demonstrates a motivation to combine and a prima facie case of obviousness:
KSR, 550 U.S. 398 at 421, 127 S.Ct. 1727.
Horenstein's testimony regarding the lack of motivation to combine the '046 and '612 patents if they were directed to two different types of crosstalk was conclusory and provides no support for the jury's verdict. To begin, he states that neither the '046 nor '612 patent even mentions "alien" cross talk.
Horenstein's testimony fails to rebut defendants' prima facie showing of obviousness. He appears to rely on a strict pre-KSR teaching, suggestion, or motivation test when rendering his opinion and, even then, he only opines as to one of the many ways a person of skill in the art could divine a reason to combine prior art references: a teaching within the references themselves. This, however, is contrary to established law. When reviewing obviousness, the fact finder "need not seek out precise teachings directed to the challenged claim's specific subject matter, for [the fact finder] can consider the inferences and creative steps a person of ordinary skill in the art would employ." KSR, 550 U.S. at 401, 127 S.Ct. 1727. "The diversity of inventive pursuits and of modern technology counsels against confining the obviousness analysis by a formalistic conception of the words teaching, suggestion, and motivation, or by overemphasizing the importance of ... the explicit content of issued patents."
Plaintiffs argue that, even if the '046 and '612 patents disclose all of the limitations of claim 13, and a person of ordinary skill in the art would have a motivation to combine the references, secondary indicia of non-obviousness preclude a finding of obviousness. (D.I. 261 at 22) During trial, plaintiffs' corporate representative, Douglas Brenneke ("Brenneke"), testified that through 2008, plaintiffs sold about $3 million worth of products embodying claim 13 of the '641 patent. (D.I. 305 at 982:13-983:1) He further testified that the invention embodied within the '641 patent allowed plaintiffs to make a competitive product in the high performance data cable market, and that plaintiffs consider it to be "commercially successful." (Id. at 983:2-9)
Brenneke's testimony does not establish the commercial success necessary to overcome defendants' prima facie case of obviousness. First, plaintiffs cite no testimony as to whether $3 million, a small fraction of the $140 million in sales of cables with separators, is significant enough to constitute a "commercial success" in the patent validity context. Second, plaintiffs fail to show a nexus between the commercial success
Defendants established, by clear and convincing evidence, that the combination of the '046 and '612 patents disclose all of the limitations of claim 13, and that a person of ordinary skill in the art would be motivated to combine said patents regardless of whether they address the same type of crosstalk. Plaintiffs failed to rebut this showing, as the testimony of plaintiffs' experts was either conclusory or unsupported by the evidence of record. Finally, plaintiffs were unable to show that secondary indicia of non-obviousness overcame defendants' showing of invalidity because plaintiffs were unable to establish a nexus between the sales and the patented invention, or that $3 million in sales was a "commercial success."
Plaintiffs renewed their motion for a permanent injunction (D.I. 251) under Fed. R.Civ.P. 65, requesting that "the court enjoin defendants from making, using, selling, offering for sale, or importing the infringing products, and any other products not more than colorably different therefrom." (D.I. 289 at 1) Plaintiffs further requested that the scope of the injunction encompass defendants' design-around products containing a "T-filler" separator because "they are not more than colorably different from the infringing Category 6 Tape Separator Cables." (Id. at 2) Defendants, in their opposition to plaintiffs' motion for a permanent injunction, request that: (1) if the court were to grant a permanent injunction, the injunction should not encompass the T-Filler redesign because plaintiffs have not satisfied their burden of proving the T-Filler products infringe any valid patent claim; and (2) pursuant to Fed.R.Civ.P. 62(c), the court temporarily stay an injunction to allow defendants time to move the Federal Circuit for a stay pending appeal. (D.I. 294 at 1)
In eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006) (vacating and remanding MercExchange, L.L.C. v. eBay Inc., 401 F.3d 1323, 1339 (2005)) (hereinafter "eBay"), the Supreme Court overruled the Federal Circuit's longstanding "general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances." Permanent injunctions in patent cases must be based on a case-by-case assessment of the traditional equitable factors governing injunctions. Id. at 1839. That is, to be awarded a permanent injunction, a plaintiff must demonstrate: "(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction." Id. "[T]he decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards." Id. at 1841.
The eBay Court specifically cautioned against the application of categorical rules,
Courts awarding permanent injunctions typically do so under circumstances in which the plaintiff practices its invention and is a direct market competitor.
Plaintiffs assert that defendants' infringement is causing irreparable harm because the parties are direct market competitors across all relevant market segments for infringing products.
Plaintiffs and defendants are direct competitors, but are not the only competitors in the twisted pair copper network cable market.
Plaintiffs, citing to Acumed Limited Liability Company v. Stryker Sales Corporation, 551 F.3d 1323, 1327-28 (Fed.Cir. 2008), contend that irreparable injury may be found where there are more than two competitors in the market. (D.I. 297 at 3) Acumed differs from the case at bar in that the plaintiff in Acumed previously chose to license its technology only to two specific major competitors, the jury had already found lost profits and sales, and the balance of hardships favored plaintiff, a much smaller company whose infringed product was one of its "flagship" products. Here, plaintiffs blame the structure of the market for their inability to show lost sales. (D.I. 289 at 5; D.I. 290, ex. 1 at 85-96) Furthermore, there is no indication that the Category 6 and 6A data cables are responsible for a significant portion of plaintiffs' total copper cable sales. Even if there were such indication, plaintiffs' total copper cable sales itself represents a small portion of plaintiffs' total sales. In 2009, plaintiffs had a combined $111 million in copper cable sales.
In further support of their direct competitor argument, plaintiffs use a market share data graph published by the independent research firm BSRIA, in its annual U.S. Structured Cabling Reports, to show that "[defendants'] market share has increased at a rate almost mirroring [plaintiffs'] decline" since the introduction of defendants' infringing Category 6 Tape Separator Cable in September 2002. (D.I. 289 at 9; D.I. 290, ex. 1 at 26, 186, ex. 8-9) However, Belden and Mohawk's combined share only dropped approximately 9% from approximately 24% to 15% from 2000 to 2009 and defendants' increased approximately 6% from approximately 4% to 11%. This is an insubstantial change compared to cases where irreparable harm was found using this kind of data. (D.I. 290, ex. 8; D.I. 295, ex. A at 44742); Becton Dickinson & Co. v. Tyco Healthcare Grp., LP, Civ. No. 02-1694, 2008 WL 4745882, *4 (D.Del. Oct. 29, 2008) (finding irreparable harm where plaintiff's market share dropped by approximately 40% and customers were lost since the launch of defendant's infringing product). Further, plaintiffs and defendants together only comprise 25% of the market and, as such, are not individually major market players.
As plaintiffs and defendants are not the only competitors in this multi-supplier market, defendants' infringement has not necessarily affected plaintiffs' market position. See Bosch, Ltd. Liab. Co., 748 F.Supp.2d at 408 (parties were not only market participants and, therefore, "[it was] not a clear case of a two-supplier market wherein a sale to [defendant] necessarily represent[ed] the loss of a sale to [plaintiff]."). Plaintiffs offered only thirty-nine of the approximately five to ten thousand quotes they submit yearly to indicate losses to defendants
Legal remedies are adequate to compensate plaintiffs for the infringement of their patent. Plaintiffs contend that defendants have taken from them both the recognition of being a technology innovator/first supplier of the patented technology, and an unquantifiable amount of business opportunities flowing therefrom.
"[A]n unavoidable distinction [exists] between utilizing third-party licensing to bring a concept to market and strategically utilizing a patent to excise a tax from companies already participating in the market." MercExchange, Ltd. Liab. Co. v. eBay, Inc., 500 F.Supp.2d 556, 583 n. 24 (E.D.Va.2007) ("Court ordered monetary damages are more likely to adequately compensate a patent holder in the latter scenario...."). In the present case, plaintiffs offered to license the '537 patent, the '095 patent, and the '999 patent to defendants as part of their "new licensing program." (D.I. 294 at 15; D.I. 295, ex. C 1123; ex. R) Furthermore, plaintiffs are established companies in the industry that did not need to license their patents to identified competitors to bring the concept to market. The language of a "new licensing program" suggests that plaintiffs intended to license the patents to other companies as well. (D.I. 294 at 15; D.I. 295, ex. C ¶ 23; ex. R)
Plaintiffs allege that "[defendants] damage [plaintiffs] by appearing to be an innovator" because defendants were the first to market a mid-level enhanced performance Category 6 cable by using the infringing product "forcing [plaintiffs] to be reactionary and develop a new product...." (D.I. 289 at 9; D.I. 290, ex. 2, ¶ 14) While plaintiffs' reputation as technology innovators and first suppliers of the patented technology was likely affected in this one aspect of their business, TruePosition, 568 F.Supp.2d at 532, plaintiffs' willingness to license the patents as part of a "licensing program" supports the court's conclusion that plaintiffs will not suffer irreparable harm absent an injunction. Advanced Cardiovascular Sys. v. Medtronic Vascular, Inc., 579 F.Supp.2d 554, 559 (D.Del.2008) (money damages are rarely inadequate where plaintiff is willing to forgo its exclusive right for some manner of compensation). Further, plaintiffs had a burden to provide specific reasons why defendants' infringement cannot be compensated for with a money award, which they failed to do. Praxair, 479 F.Supp.2d at 444. Similar to Praxair, plaintiffs' contention that "infringing products sales inflict compounding unquantifiable harm on plaintiffs due to the structure of the data cable market," does not explain why it may have "difficulties calculating damages going forward," or "how money damages could not adequately compensate for `lost market share'...." Id.
The parties have informed the court that all of the asserted claims, but for those disclosed in the '503 patent, have been declared invalid by the PTO. In terms of balance of hardships, the court in MercExchange, Ltd. Liab. Co. v. eBay, Inc., 500 F.Supp.2d at 585, acknowledged that a "PTO reexamination impacts the equitable calculus of the four-factor test," such that the court was unable to determine
"The public-interest factor often favors the patentee, given the public's interest in maintaining the integrity of the patent system." MercExchange, Ltd. Liab. Co., 500 F.Supp.2d at 586 (quoting Odetics, Inc. v. Storage Tech. Corp., 14 F.Supp.2d 785, 795 (E.D.Va.1998)). The court in MercExchange cautioned that, "while preserving the integrity of the patent system will always be a consideration in the public-interest analysis, it cannot be allowed to dominate such analysis lest a presumption results." Id. In finding against the entry of an injunction, the court considered "the type of patent, the impact on the market, the impact on the patent system, and any other factor that may impact the public at large" should an injunction be granted. Id.
The claims at issue pertain to twisted pair copper network cable technology and have almost all been invalidated by the PTO on reexamination. (D.I. 294 at 9-10, 15); See MercExchange, 500 F.Supp.2d at 586 (in considering whether to protect the patent holder through injunctive relief, the court found it proper to consider "repeated indications from the PTO that such patent is invalid."). When considering the prior conduct of the parties, as did the court in MercExchange within the third prong of the analysis, this court notes that plaintiffs had previously attempted to license the patents to defendants as part of their "new licensing program" indicating a willingness to forego their right to exclude. (D.I. 294 at 15; D.I. 295, ex. C ¶ 23, ex. R) However, the public would not be harmed by the issuance of a permanent injunction as this is not a matter of public health or safety, nor will an injunction have the effect of limiting the public's access to a category of products. See Mass Engineered Design, Inc. v. Ergotron, Inc., 633 F.Supp.2d 361, 394 (E.D.Tex.2009). Here, the economic impact would be minimal because, unlike in MercExchange where defendant eBay was a multibillion dollar corporation whose online marketplace has a substantial impact on the United States' economy, there are many additional competitors in the twisted pair copper network cable market from which the public can purchase the network cables and stimulate the economy. (D.I. 289 at 2-6; D.I. 294 at 2-3); MercExchange, Ltd. Liab. Co., 500 F.Supp.2d at 587. Taking all factors into account, the public interest would not be harmed should a permanent injunction be granted.
For the aforementioned reasons, plaintiffs have failed to demonstrate irreparable injury, as well as the inadequacy of money damages. Further, should an injunction issue, any hardship to plaintiffs would be outweighed by that to defendants. Plaintiffs' motion for a permanent injunction is denied.
For the foregoing reasons, the court grants in part and denies in part plaintiffs' renewed motion for JMOL (D.I. 250), denies plaintiffs' motion for a permanent injunction (D.I. 251), and grants in part and denies in part defendants' renewed motion
At Wilmington this 12th day of August, 2011, consistent with the memorandum opinion issued this same date;
IT IS ORDERED that:
1. Plaintiffs' renewed motion for JMOL or for a new trial (D.I. 254) is granted in part and denied in part, to wit: The validity of claim 31 of the '095 patent will be retried at defendants' expense.
2. Plaintiffs' motion for permanent injunction (D.I. 251) is denied.
3. Defendants' renewed motion for JMOL or for a new trial (D.I. 250) is granted in part and denied in part, to wit: Claim 13 of the '641 patent is invalid as obvious in view of the '046 and '612 patents.
4. The parties' motions for JMOL (D.I. 237, 238, 239) are denied as moot.
