LARRY R. HICKS, District Judge.
This order is amending and re-issuing certain vacated orders pursuant to the court's February 23, 2017 vacate order. ECF No. 691.
In brief, after an appeal following a jury trial on the issues of copyright infringement, the Federal Circuit issued an order on September 23, 2016, finding that the court's claim construction of the term "plugstrip" as used in the patents-in-suit was erroneous and thus reversed and remanded the action back to this court. Server Tech., Inc. v. Am. Power Conversion Corp., 657 Fed. Appx. 1030, 1033-34 (Fed. Cir. 2016). Upon receiving the Federal Circuit's decision, the court ordered the parties to file a joint status report addressing the impact of the Federal Circuit's decision on this action. ECF No. 689. Thereafter, the parties filed a joint status report in accordance with the court's order. ECF No. 690.
On February 23, 2017, the court issued its order vacating all orders found by the court to have relied upon or applied the court's construction of "plugstrip" in violation of the Federal Circuit's recent construction. However, as part of that order, the court noted that several of the vacated orders addressed additional claims or issues not impacted by the Federal Circuit's decision. For those orders, the court stated that it would issue amended orders establishing which portions of these orders have been vacated pursuant to the Federal Circuit's decision and which portions of the orders remain valid and binding in this litigation. This order constitutes the court's order amending and re-issuing portions of those vacated orders.
The following orders have been amended and shall be re-issued by the court: (1) the court's order addressing defendant American Power Conversion Corp.'s ("APC") motion for summary judgment (ECF No. 381);
Additionally, the court has amended and shall re-issue the jury verdict (ECF No. 590) in this action in accordance with the Federal Circuit's order and the parties' agreement as set forth in the joint status report.
IT IS THEREFORE ORDERED that the clerk of court shall re-issue the amended order addressing defendant's motion for summary judgement (ECF No. 381) attached as Exhibit 1 to this order.
IT IS FURTHER ORDERED that the clerk of court shall re-issue the amended order addressing plaintiff's motion for a permanent injunction (ECF No. 651) attached as Exhibit 2 to this order.
IT IS FURTHER ORDERED that the clerk of court shall re-issue the amended order entering an ongoing royalty (ECF No. 663) attached as Exhibit 3 to this order.
IT IS FURTHER ORDERED that the clerk of court shall re-issue the amended jury verdict in this action (ECF No. 590) attached as Exhibit 4 to this order.
IT IS FURTHER ORDERED that the parties shall, within twenty (20) days after entry of this order, prepare an appropriate order setting forth the damages to be awarded to plaintiff as it relates to defendant's AP8900 series of products in accordance with this order and submit the same for signature.
IT IS SO ORDERED.
Before the court is defendant American Power Conversion Corp.'s ("APC") motion for summary judgment on the issues of anticipation, obviousness, and non-infringement. Doc. #287.
Plaintiff STI manufactures intelligent power distribution devices. STI brought the underlying patent infringement action against defendant APC alleging that APC's product designs infringe three of its patents: United States Patents numbers 7,043,543 ("the '543 patent"),
Like STI, APC manufacturers intelligent power distribution devices. APC denies that its products infringe STI's patents and has raised three defenses: (1) anticipation under 35 U.S.C. § 102; (2) obviousness under 35 U.S.C. § 103; and (3) non-infringement.
On April 13, 2010, the court issued a Markman order construing various disputed terms of the patents in suit. Doc. #163. Thereafter, APC filed the present motion for summary judgment. Doc. #287. On February 23, 2012, the court heard argument on the motion.
STI's patents in suit ('543, '771, and '461 patents) describe and relate to intelligent power distribution devices, also referred to as "intelligent plugstrips" or "PDUs." Like an ordinary electrical plugstrip used in a home or office, intelligent plugstrips are primarily intended to distribute power from a wall outlet through an input power cord to a number of power outlets. But unlike ordinary plugstrips, intelligent plugstrips are intended for large scale applications such as commercial data centers and include several enhanced features. These enhanced features enable a user to locally or remotely control and monitor the power supply to connected appliances such as computers, servers, routers, and other electronic equipment through various internal relay controls.
Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, affidavits or declarations, stipulations, admissions, and other materials in the record show that "there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ. P. 56(a). In assessing a motion for summary judgment, the evidence, together with all inferences that can reasonably be drawn therefrom, must be read in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); County of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001).
The moving party bears the initial burden of informing the court of the basis for its motion, along with evidence showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On those issues for which it bears the burden of proof, the moving party must make a showing that is "sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party." Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986); see also Idema v. Dreamworks, Inc., 162 F.Supp.2d 1129, 1141 (C.D. Cal. 2001).
To successfully rebut a motion for summary judgment, the non-moving party must point to facts supported by the record which demonstrate a genuine issue of material fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736 (9th Cir. 2000). A "material fact" is a fact "that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, summary judgment is not appropriate. See v. Durang, 711 F.2d 141, 143 (9th Cir. 1983). A dispute regarding a material fact is considered genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Liberty Lobby, 477 U.S. at 248. The mere existence of a scintilla of evidence in support of the party's position is insufficient to establish a genuine dispute; there must be evidence on which a jury could reasonably find for the party. See id. at 252.
In its motion, APC seeks an order from the court (1) that asserted claims 1, 2, 3, and 6 of the '543 patent are invalid as anticipated under 35 U.S.C. § 102; (2) that asserted claims 15, 16, and 17 of both the '543 patent and the '771 patent are invalid as obvious under 35 U.S.C. § 103; and (3) that accused APC product designs, the AP7900 and AP8900, do not infringe asserted claims 1, 3, and 8 of the '461 patent. Doc. #287. The court shall address each argument below.
APC argues that claims 1, 2, 3, and 6 of the '543 patent are invalid as anticipated based on two pieces of prior art, the MasterSwitch VM ("MSVM") manufactured by APC and the RPC-21 manufactured by non-party BayTech. Doc. #287.
In opposition, STI argues that the '543 patent is not anticipated because neither identified prior art design (1) contains a "current-related information display" in "current-related information-determining communication," or (2) is a "plugstrip" as that term is used and understood in the patent. Doc. #301.
An issued patent is presumed valid by statute. 35 U.S.C. § 282. However, a patent may be held invalid as a matter of law if it is anticipated. 35 U.S.C. § 102. A patent is anticipated if a single reference, either printed publication or prior use, published more than one year before the date of the patent application, discloses, expressly or inherently, every limitation of the claim such that a person of ordinary skill in the art could practice the invention without experimentation. 35 U.S.C. § 102(b); see also Advanced Display Systems, Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir. 2000).
The anticipating reference must describe the patented features "with sufficient clarity and detail" such that a person of ordinary skill in the field would recognize the existence of the patent features in the reference. Crown Operations Int'l v. Solutia, Inc., 289 F.3d 1367, 1375 (Fed. Cir. 2002). Moreover, "all of the elements and limitations of the claim must be shown in a single prior reference, arranged as in the claim." Karsten Mfg. Corp. v. Cleveland Golf Co., 242 F.3d 1376, 1383 (Fed. Cir. 2001).
A person of ordinary skill in the art is a person presumed to think "along the line of conventional wisdom in the art and is not one who undertakes to innovate, whether by patient, and often expensive, systematic research or by extraordinary insights." Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d 448, 454 (Fed. Cir. 1985). For purposes of this motion, the parties agree that a person of ordinary skill in the art is one who would have an electrical or computer engineering degree (or the equivalent industry experience) and at least one to three years of experience designing power distribution devices.
APC identifies two pieces of prior art anticipating the '543 patent: the RPC-21
STI concedes that the RPC-21 and MSVM are prior art references for the purpose of the court's anticipation analysis. Further, the parties do not distinguish between the MSVM and the RPC-21 in addressing APC's motion. Therefore, for the sake of simplicity, the court will analyze APC's anticipation arguments using the MSVM design.
Independent claim 1 of the '543 patent discloses:
An electrical power distribution plugstrip connectable to one or more electrical loads in a vertical electrical equipment rack, the electrical power distribution plugstrip comprising in combination:
Doc. #288, Exhibit 1, '543 patent, Col. 10:57-11:19. Claim 2 is a dependent claim of claim 1 and discloses:
Doc. #288, Exhibit 1, '543 patent, Col. 11:20-24. Claim 3 is a dependent claim of both claims 1 and 2 and discloses:
Doc. #288, Exhibit 1, '543 patent, Col. 11:25-31. Finally, claim 6 is a dependent claim of claim 1 and discloses:
Doc. #288, Exhibit 1, '543 patent, Col. 11:45-48.
The plain language of claim 1 requires a power distribution plugstrip with the following limitations: (a) a vertical strip enclosure; (b) a power input; (c) a number of outlets; (d) remotely controllable relays associated with the outlets; (e) a current-related information display; and (f) a current reporting system. See Doc. #288, Exhibit 1, '543 patent, Col. 10:57-11:19.
In its motion for summary judgment, APC argues that the MSVM includes all these limitations. See Doc. #287. STI concedes that the MSVM meets limitations (a) through (d) of claim 1 but argues that the MSVM does not contain (1) a "current-related information display . . . in current-related information-determining communication" as required by limitation (e); and (2) a network device contained within the vertical strip enclosure as required by limitation (f). See Doc. #301. The court shall address each argument below.
In substance, limitation (e) requires that the device contain a display that conveys current-related information. See Doc. #288, Exhibit 1, '543 patent, claim 1(e). During the claim construction process, the court did not construe the phrase "current-related information-determining communication" because the parties agreed that "current-related information-determining communication" meant "communication in which current is measured." See Doc. #94, STI's Opening Claim Construction Brief, p.45-46; Doc. #122, APC's Response, p.39.
STI now argues that because "current-related information-determining communication" means "communication in which current is measured," limitation (f) requires that the same measured current information be communicated to the display. STI's interpretation requires a numerical value that is then transmitted and displayed, which, it argues, can only be accomplished through a digital display. Thus, at its core, STI's interpretation of limitation (e) requires a digital display. As the MSVM used an LED display which did not, and could not, display a numerical value, STI argues that it cannot anticipate the '543 patent.
The court has reviewed the documents and pleadings on file in this matter and finds that, contrary to STI's arguments, (1) limitation (e) does not require a digital display, and (2) the MSVM contains a "current-related information display . . . in current-related information-determining communication." First, STI's interpretation of limitation (e) is in direct contradiction to the court's claim construction order. In that order, the court found that STI's interpretation of "current-related information display" to mean a digital display that conveyed a numerical current value was contrary to the plain claim language and specification of the '543 patent. See Doc. #163, p. 21-22 ("STI's interpretation is contrary to the terms plain meaning and usage" and "would improperly limit the claim language based on the specification.").
Second, STI's attempt to salvage its argument by relying on the word "determining" in the claim phrase is equally unavailing. Both claims 1 and 15 of the '543 patent require a display in "current-related information-determining communication," but while claim 1 discloses a display, claim 15 specifically discloses a digital display confirming that the "determining" language is not determinative for claim construction. STI's attempt to limit claim 1 to require a digital display would render the specific "digital display" language in claim 15 meaningless. See e.g., AllVoice Computing PLC v. Nuance Commc'ns, Inc., 504 F.3d 1236, 1247 (Fed. Cir. 2007) ("[C]laim differentiation takes on relevance in the context of a claim construction that would render additional, or different, language in another independent claim superfluous.").
Finally, the court finds that the MSVM's LED display does, in fact, display determined current information. The crux of STI's argument is that the only kind of current information that can be determined is a numerical value. However, information other than a numerical value can be "determined." For example, one can determine whether something is hot or cold, without measuring a precise value of temperature. Similarly, a PDU device can determine that current is high or low, or above or below a certain threshold, and this determined information can then be communicated to an LED display.
Here, it is undisputed that the MSVM's LED determines and communicates a condition: when the PDU is operating in a normal current condition under a pre-programmed threshold value the LED displays a solid green indicator; when the PDU's current draw is approaching an overload condition the LED displays a flashing green indicator; and when the current level has passed the overload condition the LED displays a solid red indicator. See Doc. #310, Exhibit 6, Bors Depo., p.47:13-18. Hence, the MSVM measures the level of input current, determines whether the measured input current is above or below a threshold level, and communicates this information to the LED. Based on this function, the court finds that the MSVM displays determined current-related information, and therefore, meets limitation (e) of the '543 patent.
STI also argues that the MSVM does not anticipate claim 1 of the '543 patent because it is not a "plugstrip" as that term is used and understood in the '543 patent. STI contends that claim 1 of the '543 patent discloses a single piece vertical plugstrip that houses all identified parts including the "current-related information reporting system" disclosed in limitation (f). Because it is undisputed that the MSVM is a two-piece device that has a separate network component for remote communication, STI argues it is not a "plugstrip." The court agrees.
Claim 1 discloses "[a]n electrical power distribution plugstrip . . . comprising in combination . . . (F) a current-related information reporting system associated with said vertical strip enclosure . . . ." Doc. #288, Exhibit 1, '543 patent, claim 1. The claim term "comprises" is presumed to mean "includes as a part of. See Crystal Semiconductor Corp. v. TriTech Microelecs. Int'l, Inc., 246 F.3d 1336, 1348 (Fed. Cir. 2001) ("The transition `comprising' creates a presumption that the recited elements are a part of the [claimed] device. . . ."). Thus, the use of the word "comprising" in claim 1 requires that all the limitations of the claim, including the current reporting system, are contained within the plugstrip.
In opposition, APC argues that limitation (f) only requires that the current-related information reporting system be "associated with" the vertical strip enclosure. APC contends that the use of the phrase "associated with" means that the reporting system need not reside in the plugstrip. However, the term "associated with" must be understood in the context of the entire patent. The '543 patent as a whole makes it clear that the "plugstrip" is a one-piece, fully integrated device. First, the patent is entitled "Vertical-Mount Electrical Power Distribution Plugstrip." Second, the summary of the invention refers repeatedly to the invention as a "power distribution plugstrip." Third, the specification describes the device as a fully integrated plugstrip. See Doc. #288, Exhibit 1, '543 patent, Col. 10:17-18 ("All of PDU is preferably fully integrated within power distribution plugstrip. . . ."). Finally, the design of the plugstrip shown in Figure 1 displays a one-piece plugstrip that houses all the design features, including the reporting system. See Doc. #288, Exhibit 1, '543 patent, Figure 1. Therefore, the court finds that claim 1 discloses a fully integrated plugstrip that contains the current-related information reporting system.
Because the reporting system of the MSVM is an external system connected to the plugstrip by a cable, it is not contained within the plugstrip. As such, the MSVM does not meet limitation (f). Therefore, the MSVM does not contain every limitation of claim 1 and cannot anticipate claim 1 as a matter of law. See Karsten Mfg. Corp., 242 F.3d at 1383 ("[A]ll of the elements and limitations of the claim must be shown in a single prior reference, arranged as in the claim."). Accordingly, the court shall deny APC's motion for summary judgment on the issue of anticipation.
Claims 2, 3, and 6 of the '543 patent are dependent claims of claim 1. Because the court finds that claim 1 is not anticipated by the MSVM as addressed above, these dependent claims are also not anticipated.
In its motion for summary judgment, APC argues that asserted claims 15, 16, and 17 of both the '543 patent and '771 patent are invalid as obvious under 35 U.S.C. § 103. Specifically, APC argues that a person of ordinary skill in the art would have combined APC's prior art PDU, the MSVM, with APC's identified prior art digital displays, United States patents no. 5,650,771
In opposition, STI argues that summary judgment is not appropriate because: (1) combining the MSVM with the digital displays disclosed in the Lee and Liu patents does not encompass the design disclosed in independent claim 15; (2) there is a disputed issue of material fact as to whether one skilled in the art would have had a reason to combine the prior art references; and (3) there is sufficient evidence of secondary considerations to support a finding of non-obviousness on summary judgment. See Doc. #301.
The court has reviewed the documents and pleadings on file in this matter, as well as the arguments and submissions by counsel at the February 23, 2012 hearing, and finds that there are disputed issues of fact as discussed below precluding summary judgment that claims 15, 16, and 17 of the '543 and '771 patents are invalid as obvious under 35 U.S.C. § 103. Accordingly, the court shall deny APC's motion for summary judgment on this issue.
Under the Patent Act, a patent may be deemed invalid as a matter of law "if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." 35 U.S.C. § 103(a).
A patented invention is obvious if a person of ordinary skill in the art would have had a reason to combine the particular elements or technologies in the way the claimed new invention does. KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007). The mere fact that prior references could be combined to reach the patented design does not render the resultant combination obvious absent a reason to combine the references in such a manner. In re Mills, 916 F.2d 680, 682 (Fed. Cir. 1990). This "apparent reason" can be shown by identifying some teaching, suggestion or motivation in the prior art to combine or modify the prior art in the manner identified in the claims. KRS, 550 U.S. at 418-19. However, an invention is not obvious "where vague prior art does not guide an inventor toward a particular solution." Bayer Schering Pharma AG v. Barr Labs., Inc., 575 F.3d 1341, 1347 (Fed. Cir. 2009). For purposes of summary judgment, the evidence must support particular findings "as to the reason the skilled artisan, with no knowledge of the claimed invention, would have selected these components for combination in the manner claimed." In re Kotzab, 217 F.3d 1365, 1371 (Fed. Cir. 2000).
Although the ultimate determination of obviousness under § 103 is a question of law, it is based on several underlying factual findings, including (1) the scope and content of the prior art; (2) the level of ordinary skill in the pertinent art; (3) the differences between the claimed invention and the prior art; and (4) evidence of secondary factors, such as commercial success, long-felt need, and the failure of others. Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966). A defendant proffering the affirmative defense of obviousness bears the burden to prove the patent is obvious by clear and convincing evidence. Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 962 (Fed. Cir. 2001); see also, Finnigan Corp. v. Int'l Trade Comm'n, 180 F.3d 1354, 1365 (Fed. Cir. 1999).
For purposes of the present motion, the parties agree that the MSVM, Lee patent, and Liu patent are prior art references to STI's '543 and '771 patents. The parties further agree that both the Lee and Liu patents disclose a digital display to measure and display current on a power regulating device.
As stated above, the parties agree that a person of ordinary skill in the art is one who would have an electrical or computer engineering degree (or the equivalent industry experience) and at least one to three years of experience designing power distribution devices.
Independent claim 15 — and thereby dependent claims 16 and 17 — contains the same limitations identified in claim 1 of the '543 patent except claim 15 also requires a digital current information display. Specifically, claim 15 discloses:
Doc. #288, Exhibit 1, '543 patent, Col. 12:21-50. Claim 16 is a dependent claim of claim 15 and discloses:
Doc. #288, Exhibit 1, '543 patent, Col. 12:51-54. Claim 17 is also a dependent claim of both claims 15 and 16 and discloses:
Doc. #288, Exhibit 1, '543 patent, Col. 12:55-62.
Claims 15-17 of the '771 patent are virtually identical to those of the '543 patent, except that the '771 patent claims are broader in nature in that they are not limited to a "vertical" device. See Doc. #288, Exhibit 47, '771 patent, Col. 12:19-57. Because the claims of the '771 patent are broader than those of the '543 patent, a finding that the '543 patent claims are not obvious necessarily means that those of the '771 patent are likewise not obvious. Thus, for purposes of this motion, the court analyzes obviousness with respect to the claims of the '543 patent only.
In order for a patented design to be obvious as a matter of law, the combination of all prior art references must include all the limitations of the patented design. See KRS, 550 U.S. at 418-419. As addressed in the previous section on anticipation, the court has found that the MSVM does not contain all the limitations of claim 1 of the '543 patent because the MSVM does not contain a current-related information reporting system contained within the vertical plugstrip enclosure. That finding carries over to the court's analysis of obviousness. Thus, for claim 15 of the '543 patent to be obvious, that additional limitation, along with the disclosure of a digital display, must be found in the Lee and Liu patents. Reviewing the Lee and Liu patents, the court finds that neither reference meets the "plugstrip" limitation of claim 1, and thus does not meet the same limitation of claim 15. Because the Lee and Liu patents do not disclose this limitation, combining these references with the MSVM does not reach the patented design of claim 15 of the '543 patent. Therefore, the patented design cannot be held invalid as obvious as a matter of law. Accordingly, the court shall deny APC's motion as to this issue. Nevertheless, the Court will consider the obviousness question in light of the remaining Graham factors.
APC argues that a person of ordinary skill in the art would have combined the identified prior art references in order to solve the known problem of how to alert a user about a possible current overload condition. See Doc. #287. APC contends that during the relevant time period, those skilled in the art were aware of the problem of excessive current levels in a PDU and knew that adding a display showing current output could alert the end user that he was approaching a current overload condition.
It is undisputed that both an LED and a digital display were known design options to those in the art as a way to alert an end user of a possible current overload condition.However, the relevant question before the court is not whether a digital display was a known option to alert an end-user to a current overload condition as APC contends, but whether one skilled in the art would have had a reason to use a digital display as a design alternative to an LED. See In re Kotzab, 217 F.3d at 1371 (holding that for a patent to be obvious, a person of ordinary skill must have had a reason to use a particular component over another). As the problem of alerting an end-user to a current overload condition was already addressed in the market by the use of an LED, for the digital display to be obvious, a person of ordinary skill must have had a reason, articulated by clear and convincing evidence, to use the digital display in lieu of an LED.
Here, viewing the evidence in the light most favorable to STI, the court finds that there was no reason a person of ordinary skill would have combined a digital display into a vertical plugstrip solely to alert an end-user of a current overload condition. The evidence before the court establishes that an LED worked better than a digital display for alerting an end-user to a current overload condition. See Doc. #310, Exhibit 14, Rohr Depo., p.296:8-297:7 (testifying that a digital display was too "complex" and that an LED was the "best solution" to providing an end-user with a visual display). In particular, Alex North, the lead engineer at BayTech testified that he believed a display was "worthless" because an LED indicator provided technicians with all of the information required. Doc. #310, Exhibit 12, North Depo., p.72:10-73:13; p. 146:17-147:7. Further, the evidence establishes that a digital display was more costly than an LED display to add to a vertical plugstrip and lead to additional unnecessary "complications" in product design. Doc. #310, Exhibit 14, Rohr Depo., p.296:8-297:7.
Finally, the evidence establishes that there were no design incentives to incorporate a digital display into a PDU. APC's expert Douglas Bors, in his export report, stated that there was no need for a digital display because users had acceptable alternative means, including the use of manufacturers' "name plate" data, to determine appropriate equipment use. Doc. #314, Exhibit 1, Bors Expert Report, § 247. Thus, designers during that time thought the inclusion of a digital display was unnecessary. Based on the foregoing, the court concludes that there is no clear and convincing evidence establishing any reason for a person of ordinary skill to include a digital display in a PDU.
Before a court can make a finding of obviousness, and thereby hold a patent invalid, a court must determine whether there are any "secondary considerations" supporting a finding of nonobviousness. KSR Int'l Co. v. Teleflex, Inc., 550 U.S. 398, 405 (2007). This is because "[s]econdary considerations `may often establish that an invention appearing to have been obvious in light of the prior art was not.'" Crocs, Inc. v. ITC, 598 F.3d 1294, 1310 (Fed. Cir. 2010) (quoting Stratoflex, Inc. v. Areoquip Corp., 713 F.2d 1530, 1538 (Fed. Cir. 1983)). Further, "[s]secondary considerations `can be the most probative evidence of non-obviousness in the record, and enables the . . . court to avert the trap of hindsight.'" Id. (quoting Custom Accessories, Inc. v. Jeffrey-Allan Indus., Inc., 807 F.2d 955, 960 (Fed. Cir. 1986)); see also, Gambro Lundia AB v. Baxter Healthcare Corp., 110 F.3d 1573, 1579 (Fed. Cir. 1997) (citing Stratoflex, Inc., 713 F.2d at 1538 ("[O]bjective indicia may often be the most probative and cogent evidence [of non-obviousness] in the record.").
Secondary considerations relevant to an obviousness determination include: commercial success; skepticism in the field; copying by others; meeting a long felt, but unsolved need; and failure by others. See e.g., KRS, 550 U.S. at 405 (commercial success and long felt need); Metabolite Labs. Inc. v. Lab. Corp. of Am. Holdings, 370 F.3d 1354, 1368 (Fed. Cir. 2004) (initial skepticism); Akami Techs., Inc. v. Cable & Wireless Servs., Inc., 344 F.3d 1186, 1196 (Fed. Cir. 2003) (copying); Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., 617 F.3d 1296, 1304-05 (Fed. Cir. 2010) (affirming non-obviousness based on commercial success, copying by others).
In further support of its opposition, STI argues that substantial evidence of secondary considerations establish that adding a digital display to a vertical plugstrip was not obvious. See Doc. #301. In particular, STI focuses on (1) the commercial success of its digital display PDUs; (2) subsequent copying by others, including APC; and (3) a long felt, but unsolved need of knowing the exact measured current value. As addressed below, the court finds that STI's evidence of secondary considerations supports the court's finding that claims 15-17 of the '543 and '771 patents are not obvious.
Initially, STI argues that the commercial success of its digital display PDUs establishes the products' novelty and non-obviousness.
Taken in the light most favorable to STI, the evidence indicates that STI's digital display PDUs have been commercially successful. First, the combined sales revenue for STI's PDUs containing a digital display have grown significantly over the last several years since their introduction in 2003. Doc. #13, Exhibit 41, Ewing Decl., ¶ 14, 17-18. Second, STI's products have carved out a large market share of the total intelligent PDU market. Id. at ¶ 21-22 (quoting Frost & Sullivan Award for Product Line Strategy through Competitive Growth Strategy Report).
Further, the evidence supports STI's contention that its commercial success is related directly to the use of a digital display in its PDUs. Id. at ¶ 21 (quoting Frost & Sullivan Award for Product Line Strategy through Competitive Growth Strategy Report) ("Server Technology, Inc. was the first company to bring input current monitoring (ICM) to the market with digital display indicators built into the Sentry enclosures to report the true RMS input.").
STI also contends that its design of a digital display has now become the industry standard in vertical PDUs, further establishing the patented design's novelty and non-obviousness.
Viewing the evidence in the light most favorable to STI, the court finds that STI's digital display has now become the industry standard. See Doc. #311, Exhibit 1, Mares Decl., ¶ 23 ("[V]ertical PDUs having a local display remote reporting, and switchable output design characteristics have become a de facto standard in the industry."). Testimony of representatives from both APC and BayTech confirms this fact. APC's designer, Joe Kramer, testified that he was "not aware of a single competing product" available today without the local current display. Doc. #310, Exhibit 9, Kramer Depo., p. 171:5-172:17. Further, BayTech's lead engineer Alex North testified that having a digital display is standard, and that BayTech "would be at a competitive disadvantage" if it did not have a digital current display. Doc. #310, Exhibit 12, North Depo., p.239:22-240:4; p.303:8-17.
Finally, STI argues that its digital display solved the problem of allowing an end-user to maximize the capacity of each individual PDU which was a desired outcome. It is undisputed that prior art intelligent PDUs did not provide an end-user with a measured value of how much current was being drawn by the equipment connected to the PDU. It is further undisputed that end-users wishing to maximize PDU efficiency by connecting the maximum amount of equipment into each PDU would have to add pieces individually to see when a current overload condition was being approached. STI argues that its digital display allowed an end-user to locally determine how much current was being used and therefore maximize the total draw of the PDU without overloading the plugstrip and causing the connected equipment to fail.
STI argues that at the time it was necessary for end-users to know, particularly in large data centers, how much equipment could be connected to an individual PDU to maximize efficiency and save space. Data center technicians using conventional methods without readily visible digital displays would risk making significant and costly errors in determining power consumption and in building data centers. LED displays did not provide this information and discouraged users from adding additional equipment to the racks, whereas digital displays showed exactly how much current was being used. The digital display end user knew how much more current he could draw, and how many more pieces of equipment could be added before reaching an overload condition. The ability to monitor current levels locally allowed users to observe the amount of remaining capacity, and determine actual power consumption of the various network devices and storage equipment.
In short, reviewing the evidence in the light most favorable to STI, it appears that only STI solved the problem arising from the lack of a digital display: that technicians needed detailed information concerning the amount of current drawn by a PDU displayed directly on the PDU. It appears that STI alone discovered that a current-related information display could be used to maximize rack capacity.
In its motion for summary judgment, APC argues that its accused product designs, the AP7900 and AP8900, do not infringe claims 1, 3, and 8 of the '461 patent because these designs do not: (1) include a current sensor in communication with a communication bus; (2) display "power-related information;" (3) monitor or display parameters at the "output" level; or (4) include more than one intelligent power section.
In opposition, STI argues that there are disputed issues of material fact concerning the accused designs that preclude summary judgment on the issue of non-infringement.
A district court analyzes a patent infringement claim in two steps. First, the court construes the claims as a matter of law, then the court applies the properly construed claims to the accused invention. K-2 Corp. v. Salomon S.A., 191 F.3d 1356, 1362 (Fed. Cir.1999); EMI Group N. America, Inc. v. Intel Corp., 157 F.3d 887, 891 (Fed. Cir. 1998). Infringement can occur either literally or under the doctrine of equivalents. Kahn v. Gen'l Motors Corp., 135 F.3d 1472, 147-78 (Fed. Cir. 1998). Literal infringement occurs when every limitation set forth in a patent claim is found in an accused product. Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1535 (Fed. Cir. 1991). The smallest deviation from the literal claim language precludes infringement. Telemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316, 1330 (Fed. Cir. 2001).
Under the doctrine of equivalents, infringement "requires a showing that the difference between the claimed invention and the accused product [is] insubstantial." Sumbo v. Eastman Outdoors, Inc., 508 F.3d 1358, 1364 (Fed. Cir. 2007) (citing Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608 (1950)). This is accomplished by demonstrating on a limitation by limitation basis that the accused product performs substantially the same function in substantially the same way and with substantially the same result as each limitation of the patented product. Id.
APC's AP7900 and AP8900 product designs are for intelligent PDUs. The AP7900 product design has been sold since 2003 and the AP8900 product design since 2010. Both designs include a power input, a number of relay controlled outlets, a display, and the ability to remotely monitor and control the devices over a network. But the AP7900 and AP8900 product designs differ with respect to which electric parameters the devices measure and display. The AP7900 design measures and displays information solely about current. Doc. #293, Exhibit 45, Horenstein Decl., Exhibit 2 at 16-17. The AP8900 design measures and displays both current and power. Id.
Independent claim 1 of the '461 patent discloses:
Doc. #288, Exhibit 2, '461 patent, Col. 21:44-22:17. Claim 3 is a dependent claim of claim 1 and discloses:
Doc. #288, Exhibit 2, '461 patent, Col. 22:24-29. Finally, independent claim 8 discloses:
Doc. #288, Exhibit 2, '461 patent, Col. 22:53-23:16.
In its motion, APC argues that its AP7900 and AP8900 product designs do not literally infringe claim 1 of the '461 patent because these designs do not have a "current determining section" in communication with a "communications bus." See Doc. #287. APC also argues that the AP7900 design does not literally infringe claim 1 because it does not display power-related information. The court shall address both arguments below.
The plain language of limitation (i) of claim 1 requires a current determining section in communication with a communications bus. Doc. #288, Exhibit 2, '461 patent, Col. 22:15-17. APC argues that its accused designs do not have a current determining section that is in communication with a communications bus because STI, in its final infringement contentions, identified the current determining section as only the "load sensors" or "load sensing toroids"
In opposition, STI argues that the accused designs include a "current determining section" in communication with a "communications bus" because the current determining section is more than just the current sensing toroids. STI argues that the current determining section also comprises the signal conditioner, the analog-to-digital converter, and the microprocessor; all of which are housed on the PCB board with the current sensing toroids. STI argues that there is evidence that the PCB board and its components are in communications with the communications bus, and therefore, APC's accused designs literally infringe claim 1.
In reviewing STI's arguments in opposition, the court finds that STI effectively seeks to amend its final infringement contentions to add these additional components. The Patent Rules allow a plaintiff to modify its infringement theory upon a showing of "good cause." N.D. Cal. Patent Local R. 3-7 (2001); cf. D. Nev. Patent Local R. 16.1-12 (2011).
Here, the court finds that there is no good cause to allow STI to amend its final infringement contentions concerning limitation (i) to include the additional components in the PCB board. First, STI has waited over four years to identify these components as part of the infringing design even though STI knew all of these components were on the PCB board at the time it filed its final infringement contentions. Second, expert discovery has already concluded in this action. Allowing amendment would require also allowing expanded expert discovery and increased litigation costs. Finally, the new components were only identified in response to APC's motion for summary judgment after STI conceded that the current sensing toroids alone were not in communication with a communications bus and thus, did not infringe claim 1. Therefore, the court finds there is no good cause to allow STI to amend its final infringement contentions concerning claim 1 of the '461 patent. As such, the court finds that, as addressed above, APC's AP7900 and AP8900 product designs do not literally infringe claim 1 of the '461 patent.
APC also argues that its AP7900 design does not literally infringe limitation (i) of claim 1 because it does not display "power-related information." The court agrees. It is undisputed that the AP7900 design displays only current-related information. In the court's claim construction order, the court found that current and power are distinct concepts and that current alone is insufficient to determine power. Specifically, the court construed the terms "power information" from the '543 patent and "power-related information" from the '461 patent to mean "information necessary to quantify or describe power, rather than current alone." Doc. #163, p. 25. A current only display, as in the AP7900 design, does not meet this limitation. Accordingly, based on the court's claim construction of these terms, the court holds that the AP7900 design does not infringe claim 1 of the '461 patent.
In opposition, STI argues that the court's construction of "power information" and "power-related information" should be reconsidered. STI contends that the court's construction rendered the term "related" in "power-related information" superfluous. In STI's opinion, once the court construed the term "power information" narrowly, it became necessary to differentiate between the meaning of "power information" and "power-related information." Construing the two phrases identically discounts the word "related." STI concludes that the construction of the term "power-related information" should be revised to mean: "information related to power, namely, at least one of power, voltage or current."
The court disagrees and finds that reconsideration of the court's claim construction order is not warranted. First, during claim construction proceedings, STI offered the same argument that "power information" and "power-related information" are broad enough to include the concept of current. However, the court rejected that argument. See Doc. #163, p. 25 ("Permitting current information to satisfy the power information limitation" in STI's claims "would eliminate the distinction suggested by the plain language of the claims.").
Second, in support of its request for reconsideration, STI now asserts that "power information" and "power-related information" must necessarily have a different scope because the word "related" only appears in one of the terms. This position is entirely inconsistent with STI's position during claim construction. There, STI proposed the same construction for both of these terms, and presented the same analysis treating the terms as identical in scope. See Doc. #163, p. 25, fn. 9. Further, STI's reliance on the word "related" as a basis to expand the scope of "power-related information" would again eliminate the distinction between power and current suggested by STI's patent claims. As noted above, some of STI's claims require "current" or "current-related" information, and other claims specifically require "power" or "power-related" information. This language clearly suggests a difference between current and power, whether the claim language at issue is "power" information or "power-related" information, and thus, the term "related" is not determinative of the claims.
In light of the above, the court declines to reconsider its earlier claim construction of the terms "power information" and "power-related information." Therefore, the court finds that the AP7900 design also does not infringe claim 1 of the '461 patent because it does not display "power-related information."
In its motion, APC argues that its designs do not literally infringe claim 8 of the '461 patent. Specifically, APC argues that its designs: (1) contain a display of input, rather than output, current; and (2) do not contain "intelligent power sections." The court shall address each argument below.
Limitation (f) of claim 8 discloses in relevant part: "a current display mounted in association with the power strip housing in current-determining communication with at least one among the plurality of power outputs." Doc. #288, Exhibit 2, '461 patent, Col. 23:13-16. Based on the plain language limitation (f) requires that the display communicates with at least one power output. It is undisputed that APC's accused designs do not communicate with any power output, and instead only display total input current. Accordingly, the court finds that the accused products do not literally infringe claim 8 because they do not have a current display "in current-determining communication with at least one among the plurality of power outputs the output."
In opposition, STI argues that even though the accused designs do not literally infringe limitation (f), the accused designs infringe under the doctrine of equivalents. See Doc. #301. The equivalent at issue here is whether a display in current determining communication with the power input is equivalent to communication with at least one of the power outputs.
The function of limitation (f) is to display the amount of current flowing to the connected devices. There is evidence that the APC designs display total aggregate current being used by the PDU. See Doc. #310, Exhibit 3; Doc. #309, Exhibit 9. That is the same function served by limitation (f). There is also evidence before the court that APC's designs serve that function in substantially the same way as described in claim 8. See Doc. #320, Exhibit 15, Aucoin Decl., ¶ 45. Even though APC's designs measure aggregate input current, that measured value, minus some negligible draw from internal parts, is equal to the aggregate output current flowing to the connected devices. Id. at ¶¶ 41-43. Thus, the result of both designs is that a user has a measured value of all current flowing to the connected devices. Id. at ¶¶ 40-41.
Applying the doctrine of equivalents to this claim, and viewing the evidence in the light most favorable to STI, the court finds that there is a genuine issue of material fact concerning whether the APC accused products infringe limitation (f). Accordingly, the court shall deny APC's motion for summary judgment as to this issue.
When the '461 patent issued, limitation (e) and (f) required a design that included "intelligent power sections." See Doc. #288, Exhibit 2, '461 patent, Claim 8(e) and (f). The court construed "intelligent power section" to require a microcontroller and associated outlet/relays combinations. See Doc. #163. It is undisputed that APC's designs only contain a single microcontroller and therefore, do not include "intelligent power sections" as required by limitations (e) and (f). Thus, the court finds that the AP7900 and AP8900 designs do not literally infringe claim 8 of the '461 patent.
In opposition, STI argues that a certificate of correction, issued by the patent office on April 10, 2007, revised limitations (e) and (f) to require only a single "intelligent power section." The Federal Circuit has held that the issuance of a certificate of correction applies only to causes of action that accrue after the certificate issues. Southwest Software, Inc. v. Harlequin Inc., 226 F.3d 1280, 1294 (Fed. Cir. 2000) ("for causes arising after the PTO issues a certificate of correction, the certificate of correction is to be treated as part of the original patent-i.e., as if the certificate had been issued along with the original patent."). But, "each act of infringement gives rise to a separate cause of action." E.I. du Pont de Nemours & Co. v. MacDermid Printing Solutions, L.L.C., 525 F.3d 1353, 1362 (Fed. Cir. 2008). Thus, STI seeks to revise its final infringement contentions regarding claim 8 to refer to the revised language in the certificate of correction issued on the '461 patent.
The court has reviewed the documents and pleadings on file in this matter and finds that there is not good cause to allow STI to amend its final infringement contentions to include the revised language of claim 8. The court notes that STI was obligated to amend its pleadings to assert the '461 patent as corrected or in some way alert APC and the Court that it was proceeding under the patent as corrected as soon as the certificate of correction was issued. See LG Elecs., Inc. v. Quanta Comp., Inc., 566 F.Supp. 910, 912-13 (W.D. Wis. 2008) ("any certificate of correction [patentee] received from the patent office would not be effective for the purpose of enforcement unless it filed a new lawsuit or amended its complaint"). In LG Electronics, the court refused to allow a patentee to raise a corrected version of the patent in light of the fact that the plaintiff waited three months after it had received a Certificate of Correction and raised the corrected version of the patent three days before the deadline for filing summary judgment motions.
Here, STI's actions are even more egregious in that it failed to raise its corrected claim at any point during the four years of this litigation, and did so only in response to APC's motion for summary judgment. Indeed, at no point in this litigation did STI seek to amend its complaint to add the altered '461 patent to the list of STI patents asserted against APC even though STI filed an amended complaint after having the certificate of correction issued. See Doc. #185. Rather, in litigating this case between 2007 and 2011, STI consistently asserted only the original claim 8 and completely ignored the revised claim 8. For example, STI relied on the original claim 8 in its pleadings (Doc. ##21, 185), its claim construction documents (Doc. #94, Exhibit C, original '461 patent), its preliminary and final infringement contentions (Doc. #284, App. 48 at "Exhibit C," p. 5-7; Doc #290, Ex. 32 at "Exhibit C," p. 10-11), and even in the exhibits that STI presented to the court in support of its own motion for summary judgment (Doc. #281, App. 16, original '461 patent).
Thus, the court finds that STI relied on the original claim 8 throughout this litigation. There is no good cause to allow STI to amend its contentions after more than four years of litigation. To allow STI to raise the revised claim 8 in this litigation at this stage, and solely in response to a motion for summary judgment, would be fundamentally unfair and prejudicial to APC. Thus, the court holds that STI is precluded from relying on the corrected claim 8 language in this litigation and the court shall deny STI's request to amend its final infringement contentions to add in the revised claim 8 language.
Because it is undisputed that APC's accused designs do not have "intelligent power sections," APC is entitled to summary judgment that the AP7900 and AP8900 designs do not literally infringe limitations (e) and (f) of claim 8 of the '461 patent. Accordingly, the court shall grant APC's motion for summary judgment on this issue.
In conclusion, the court finds: (1) that asserted claims 1, 2, 3, and 6 of the '543 patent are not invalid as anticipated under 35 U.S.C. § 102; (2) that asserted claims 15, 16, and 17 of both the '543 patent and the '771 patent are not invalid as obvious under 35 U.S.C. § 103; (3) that the AP7900 and AP8900 designs do not literally infringe claims 1 and 3 of the '461 patent; and [2] (4) that the AP7900 and AP8900 designs do not literally infringe claim 8 of the '461 patent.
IT IS THEREFORE ORDERED that defendant's motion for summary judgment (Doc. #287) is addressed in accordance with this AMENDED and RE-ISSUED ORDER.
IT IS SO ORDERED.
Before the court are plaintiff Server Technology, Inc.'s ("STI") motion for a permanent injunction (Doc. #618
Also before the court is defendant APC's motion for judgment as a matter of law, or in the alternative, motion for a new trial. Doc. #626. STI filed an opposition (Doc. #635) to which APC replied (Doc. #638).[
This action has an extensive factual and procedural history. In brief, plaintiff STI manufactures intelligent power distribution units ("PDUs"). In 2006, STI brought the underlying patent infringement action against defendant APC alleging that APC's AP7900 and AP8900 series of products infringed two of STI's patents: United States Patents numbers 7,043,543 ("the '543 patent"), and 7,702,771 ("the '771 patent). Doc. #1.
Like STI, APC manufacturers intelligent PDUs. APC denied that its AP7900 and AP8900 products infringed STI's patents and raised two affirmative defenses. First, APC alleged that STI's '543 and '771 patents were invalid as obvious under 35 U.S.C. § 103. Second, APC alleged that STI engaged in inequitable conduct before the Patent Office during the prosecution of both patents.
Between May 12 and May 27, 2014, a jury trial was held on the issues of infringement and invalidity. On May 29, 2014, the jury returned a verdict finding that APC's AP7900 and AP8900 products infringed claim 15 of both the '543 and '771 patents. Doc. #590. The jury also made an advisory finding that STI's '543 and '771 patents were not invalid as obvious. Id. As part of this advisory finding, the jury made several factual findings concerning secondary considerations of non-obviousness. Id.[
From May 28 through May 30, 2014, following the jury trial, the court conducted a bench trial on APC's inequitable conduct claim. On August 8, 2014, after additional post-trial briefing the court entered final findings of fact and conclusions of law on APC's inequitable conduct claim. Doc. #613. In that order, the court found that neither STI CEO Carrol Ewing ("Mr. Ewing") nor STI patent prosecution Attorney Robert Ryan ("Attorney Ryan") engaged in inequitable conduct before the Patent Office during the prosecution of the '543 and '771 patents. Id. The same day, the court issued a separate order finding that the '543 and '771 patents were not invalid as obvious under 35 U.S.C. § 103. Doc. #615.[
After entry of final judgment, the parties filed the present post-trial motions.
An electrical power distribution plugstrip connectable to one or more electrical loads in a vertical electrical equipment rack, the electrical power distribution plugstrip comprising in combination:
An electrical power distribution plugstrip connectable to one or more electrical loads in an electrical rack, the electrical power distribution device comprising in combination:
In its first post-trial motion, STI moves for entry of a permanent injunction prohibiting APC from selling the AP7900 and AP8900 products, as well as any other PDU that is "not colorably different" from the AP7900 and AP8900 products. See Doc. #618. In the alternative, if an injunction is not issued, STI seeks an order from the court ordering a compulsory license and establishing an ongoing royalty rate of 15% — or three times the 5% reasonable royalty rate established by the jury — for any future sales of APC's AP7900 and AP8900 products. Id.
A permanent injunction is an "extraordinary remedy that may only be awarded upon a clear showing that [the moving party] is entitled to such relief." Id. (citing Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (per curiam)). A patent holder seeking a permanent injunction after a finding of infringement must satisfy a four-factor test: (1) irreparable harm; (2) inadequacy of monetary damages; (3) the balance of hardships is in the patent holder's favor; and (4) that the public interest would not be disserved by a permanent injunction. eBay, Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006). As addressed below, the court finds that STI is not entitled to the extraordinary remedy of a permanent injunction in this action.
As part of an irreparable injury analysis, courts regularly examine three main considerations: (1) direct competition between the parties; (2) the patentee's loss of market share due to the infringement; and (3) loss of goodwill by the patentee. See, e.g., Presidio Components Inc. v. Am. Tech. Ceramics Corp., 702 F.3d 1351, 1362 (Fed. Cir. 2012) (stating that direct competition in the same market strongly supports the potential for irreparable harm absent an injunction); i4i Ltd. P'ship v. Microsoft Corp., 598 F.3d 831, 861 (Fed. Cir. 2010) (finding that harm to a patentee's market share, revenues, and brand recognition is relevant for determining whether the patentee has suffered an irreparable injury); Celsis in Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 930 (Fed. Cir. 2012) (holding that loss of goodwill, damage to reputation, and loss of business opportunities are all valid grounds for finding irreparable harm).
The court has reviewed the documents and pleadings on file in this matter and finds that STI has established that continued infringement by APC will cause harm to STI's business. First, it is undisputed that STI and APC compete directly in the limited rack-mounted PDU market. In fact, at trial, both STI's and APC's witnesses acknowledged that both companies are direct competitors and have the largest market share of the rack-mounted PDU market. See Doc. #599, Pat Johnson Trial Testimony, p.1462:5-23, 1501:11-23; Doc. #602, Julie Davis Trial Testimony, p.2301:11-17. Second, as APC and STI directly competed for the same limited sales in the market, continued infringement by APC will cause STI to lose customers and market share to APC as APC sells its infringing PDUs at a lower price than STI's patented products.
However, while there is no question that STI and APC compete to sell PDUs in the market, STI has competed in this market despite APC's infringement throughout the eight-years of this litigation. During that time STI has maintained a competitive edge in the market, holding the second largest market share next to APC. Thus, the court finds that although STI has established irreparable harm, this factor does not weigh heavily in the court's permanent injunction analysis.
In order to establish that an injunction is warranted, a plaintiff must show that monetary damages alone are inadequate to compensate plaintiff for any continued infringement by the infringer. See eBay, 547 U.S. at 391. In its motion, STI argues that monetary damages alone are inadequate to compensate it for the losses suffered by APC because certain damages like lost market share and customer goodwill are not quantifiable. The court disagrees.
Although STI has suffered a loss of market share, brand recognition, and customer goodwill as a result of APC's infringement, the court finds that monetary damages are sufficient compensation for these losses. STI, as part of its overall business strategy, has continuously licensed the patents-in-suit to competitors. For example, the evidence at trial established that STI licensed its patents to three competitors: Chatsworth Products, Inc.; Leviton Manufacturing Co.; and Western Telematic, Inc. Although these competitors have considerably less market presence than APC, STI's willingness to licenses its products, particularly as part of litigation settlements, shows that monetary damages are sufficient and adequate to compensate STI for infringement of its patents.
Further, throughout this trial, STI continuously focused on APC's lack of a license and repeatedly stated that APC could have received a license to keep manufacturing and selling the AP7900 and AP8900 products. See, e.g., STI's Opening Statement, Trial Transcript, p. 79 ("[APC] could have chosen to license the technology and use it the honest way, but, instead, it chose to infringe."); p. 108 ("[APC] could have licensed the technology. [STI] has licensed to three other competitors to use this technology. APC could have signed a license. They chose not to. They chose to go ahead and infringe."); STI's Closing Statement, Trial Transcript, p. 2794-2795 ("When the '543 patent issues in 2006, competitors in this market had a choice. They could either take a license from STI, as many have, or they could stop selling their product. . . . [APC] could have taken a license. They didn't."). This repeated reference to APC licensing the patents-in-suit does not support a finding that monetary damages are inadequate to compensate STI for APC's infringement. Rather, this evidence shows that monetary damages were adequate compensation to STI. Finally, the court notes that STI never sought an injunction during the pendency of this litigation. STI never asked for a preliminary injunction, nor did it request an injunction as part of its requested remedies in its amended complaint. Based on these considerations, the court finds that monetary damages are adequate to compensate STI for APC's infringement which weighs heavily against granting an injunction.
The court finds that the balance of hardships in this action is a neutral factor. Absent an injunction, STI has established that it will suffer ongoing hardship by having to compete against its own patented invention in a limited market. However, evidence at trial has established that STI successfully competed in the marketplace against APC, despite APC's sales of the infringing products. Further, to the extent that there is any continued infringement, the availability of a higher reasonable royalty rate or other monetary damages weighs against a finding that STI would experience substantial hardship absent an injunction.
"[T]he touchstone of the public interest factor is whether an injunction, both in scope and effect, strikes a workable balance between protecting the patentee's rights and protecting the public from the injunction's adverse effects." i4i, 598 F.3d at 863.
Here, the court finds that the public interest would be harmed by an injunction. The entry of an injunction would require APC to remove all AP7900 and AP8900 products, as well as any products not colorably different from the infringing products, from the limited rack-mounted PDU market. As APC's products are a significantly cheaper alternative for customers building data centers, by roughly $200 per unit, entering an injunction against APC would ultimately hurt consumers and the public. Especially when there is an alternative to an injunction that would allow APC to maintain selling its products to the public. Therefore, the court finds that an injunction would not be in the public's interest. Accordingly, the court shall deny STI's motion for a permanent injunction.
Because the court finds that an injunction is not warranted in this action, the court must now examine STI's alternative request for a compulsory license for the patents-in-suit at an ongoing [5%] 15% royalty rate on all sales of APC's AP7900 and AP8900 products from the date of judgment. See Doc. #618.
The court has reviewed the documents and pleadings on file in this matter and finds that a compulsory license at a [5%] 15% royalty rate is an appropriate remedy in this action. First, the court notes that absent a compulsory license, STI will continue to suffer harm from the sale of the AP7900 and AP8900 products. Second, a [5%] 15% royalty rate, or three times the jury's 5% reasonable royalty rate, on post-judgment sales is reasonable in this action. Because there is an inherent and fundamental difference between pre-verdict infringement — where the question of patent validity and infringement are questionable — and post-verdict infringement — where those questions have been answered affirmatively — the calculus for determining an appropriate or reasonable royalty rate changes. Amado v. Microsoft Corp., 517 F.3d 1353, 1361-62 (Fed. Cir. 2008). In order to avoid incentivizing defendants to fight each patent infringement action for as long as possible to obtain the maximum benefit of infringement, an ongoing post-verdict royalty may appropriately be higher than the jury's pre-verdict reasonable royalty. Id. Here, a [5%] 15% royalty rate would still leave APC with a reasonable profit on sales as well as an incentive to sell products under the license — especially as the evidence in this action established that APC had sales in excess of $215 million from 2006-2013 on the infringing products. Further, a [5%] 15% royalty rate would more equitably compensate STI for any lost sales, customer goodwill, and lost market share. Therefore, the court shall grant STI's motion and set a compulsory license of the patents-in-suit with an ongoing royalty rate of [5%] 15% from the date of judgment.
In its second post-trial motion, STI moves for an order awarding supplemental damages against APC for sales of the infringing AP7900 and AP8900 products after December 31, 2013, through the date of judgment, and for prejudgment interest on the damages award at the Prime Interest rate. See Doc. #619. Both issues are addressed below.
The jury verdict against APC established a 5% royalty rate on APC's sales of infringing products from December 18, 2006, through December 31, 2013. However, at the time of trial, APC had not yet produced records for sales after December 31, 2013, through the date of judgment. To compensate STI fully for APC's infringement, STI argues that the court should award supplemental damages for all infringing sales of APC's AP7900 and AP8900 product lines from January 1, 2014, through the date of judgment, August 8, 2014, at the 5% reasonable royalty rate found by the jury. See Hynix Semiconductor Inc. v. Rambus Inc., 609 F.Supp.2d 951, 964-65 (N.D. Cal. 2009) (holding that in calculating damages through the date of judgment, a court applies the reasonable royalty rate found by the jury). The court agrees and notes that APC does not oppose an award of supplemental damages from January 1, 2014, through the date of judgment. Therefore, the court shall grant STI's motion as to this issue.
Section 284 of the Patent Act governs the award of prejudgment interest in patent infringement cases and states that: "[u]pon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement . . . together with interest and costs as fixed by the court." 35 U.S.C. § 284. The purpose behind prejudgment interest is "to compensate for the loss of use of money due as damages from the time the claim accrues until judgment is entered." Barnard v. Theobald, 721 F.3d 1069, 1078 (9th Cir. 2013).
In its motion, STI seeks prejudgment interest at the Prime interest rate on both the jury's damages award and any supplemental damage award by the court. See Doc. #619. STI argues that using the Prime rate to calculate prejudgment interest is reasonable in this action because the Prime rate is sufficient to cover inflation over the lengthy infringement and litigation period. The court agrees.
In contrast to the Prime rate, the court finds that APC's proposed Treasury Bill rate would not cover inflation over the infringing period. Moreover, in the context of patent infringement, the Treasury Bill rate is often inappropriate, as its lower rate of return has the potential to result in a windfall profit for the infringer. Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 2009 WL 920300, at *2 (D. Ariz. 2009). Therefore, the court shall grant STI's motion and apply prejudgment interest at the Prime Interest rate.
Under Rule 50(b), after the court enters judgment, a party may file a renewed motion for judgment as a matter of law. Rule 50 provides that judgment as a matter of law is appropriate if "a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." FED. R. CIV. P. 50(a)(1). Under Rule 50, the court reviews whether "substantial evidence" supports the jury verdict. See Hagen v. City of Eugene, 736 F.3d 1251, 1256 (9th Cir. 2013). A verdict is not supported by substantial evidence "when the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion, which is contrary to the jury's verdict." Id. In other words, Rule 50 "allows the trial court to remove cases or issues from the jury's consideration when the facts are sufficiently clear that the law requires a particular result." Weisgram v. Marley Co., 528 U.S. 440, 448 (2000).
In its renewed motion for judgment as a matter of law, APC raises five challenges to the jury verdict. First, APC argues that there is insufficient evidence to support the jury's finding that the AP7900 products literally infringe claim 15 of the '543 and '771 patents. Second, APC argues that it was clear error for the court to allow STI to proceed on, and for the jury to consider, a doctrine of equivalents infringement theory related to the AP7900 products. Third, APC argues that there is insufficient evidence to support the jury's finding that both the AP7900 and AP8900 products literally infringe claim 15 of the '543 and '771 patents. Fourth, APC argues that the jury verdict on the issue of obviousness is contrary to law. Finally, APC argues that the court's inequitable conduct findings are not supported by the evidence. Each separate challenge is addressed below.
In its motion, APC contends that claim 15 of both the '543 and '771 patents require a device that includes a current reporting system in "power information determining communication with at least one among said power input and said plurality of power outputs." See Claim 15(f), '543 Patent; Claim 15(f), '771 Patent. At summary judgment, the court construed "power-related information" to mean "information necessary to quantify or describe power, rather than current alone." Doc. #163, p. 25. Thus, for literal infringement APC argues that the AP7900 product must display information necessary to quantify power. APC argues that because the AP7900 products only measure current and do not have any power-sensing capabilities, the products do not literally infringe claim 15 of the '543 and '771 patents. Thus, the jury verdict is not supported by the evidence submitted at trial.
APC's argument is premised on an erroneous characterization of the court's interpretation of "power information." In contrast to APC's position, "power information" is not limited to the measurement, quantification or reporting of power. Rather, the court has interpreted "power information" to mean information sufficient to quantify and/or describe power. Because the AP7900 products communicate information sufficient to describe power, the jury verdict of literal infringement was supported by substantial evidence. For example, Dr. Michael Aucoin ("Dr. Aucoin") testified that the vertical AP7900 products (1) report current information, including the quantity of current flowing at an outlet, and (2) communicate and report voltage information by reporting whether voltage is present at the outlet. See Doc. #596, Dr. Aucoin Trial Testimony, p.620-23. Although Dr. Aucoin testified that the AP7900 products do not "directly report a quantity of power like the [AP]8900 does," he testified that power information could still be determined by the AP7900 products simply by knowing whether voltage was present at the outlets. Doc. #596, Dr. Aucoin Trial Testimony, p. 624. Dr. Aucoin testified that by knowing the voltage present at the outlet, which is a known constant depending on the type of outlet, a person can perform simple math to determine the power present in each outlet and the total power of the PDU. Multiplying known voltage by the measured current necessarily provides information sufficient to quantify or describe power, supporting the jury's verdict of literal infringement. APC's own product development documentation acknowledges that users of the AP7900 products were determining power information by performing exactly the same calculations described in Dr. Aucoin's testimony. Therefore, the court finds that there was sufficient evidence at trial to support the jury verdict that the AP7900 products literally infringe claim 15 of both the '543 and '771 patents.
In its second challenge to the jury verdict, APC argues that it is entitled to judgment as a matter of law that the AP7900 products do not satisfy the "power information" limitation under a doctrine of equivalents infringement theory.First, APC argues that STI's doctrine of equivalent claim should have been barred due to prosecution history estoppel and thus, it was improper for the court to allow STI to proceed with this infringement theory. Specifically, APC argues that because the term "power information" was added to claim 15 by amendment during patent prosecution, the question of whether the AP7900 products could infringe the asserted claims under the doctrine of equivalents was not properly before the jury. See Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 535 U.S. 722, 733-34 (2002).
Here, the court finds that prosecution history estoppel does not bar the doctrine of equivalents infringement theory in this case because the narrowing of the claim to include the term "power information" was peripheral, or not directly relevant, to the alleged equivalent. Nowhere in the patent history did the examiner or the inventors make a distinction between a current reporting system that was in current-related information determining communication, as opposed to a current reporting system that was in power information determining communication. The distinction between current-related information and power information had no bearing whatsoever on the amendment. Thus, the amendment of claim 15 bears no more than a tangential relation to STI's assertion of the doctrine of equivalents in this case. As such, STI did not surrender its equivalence argument that the communication of current information, where the voltage is known to be constant, is substantially equivalent to the communication of power information. Therefore, the issue of whether the AP7900 product infringed under the doctrine of equivalents was properly before the jury in this action.
APC also argues that the jury's finding that the current-reporting feature of the AP7900 products satisfies the "power information" limitation of claim 15 of the '543 and '771 patents under a doctrine of equivalents infringement theory would entirely vitiate the court's construction of "power information" which was defined as "information necessary to quantify or describe power, rather than current alone." See Doc. #163. APC argues STI's doctrine of equivalents theory erased the important distinction between current and power and should have been precluded. See Warner-Jenkinson Co., Inc. v. Hilton-Davis Chemical Co., 520 U.S. 17, 39 n.8 (1997) (stating that when a theory of equivalence entirely vitiates a particular claim element, partial or complete judgment should be rendered by the court.). Warner-Jenkinson Co., Inc. v. Hilton-Davis Chemical Co., 520 U.S. 17, 39 n.8 (1997).
The court has reviewed the documents and pleadings on file in this matter as well as the evidence submitted at trial and finds that STI's doctrine of equivalents theory in this case does not vitiate the court's construction of power information because the court's claim construction left open the issue of equivalents when the voltage is known to be constant. See Doc. #163, Claim Construction Order, p. 25 n. 10 ("Whether a current measurement alone can qualify as "power information" where the voltage is known to be constant, as STI argues, raises a question under the doctrine of equivalents that is not properly before the court at the present time."). At no point did STI argue that communicating current information alone constituted the communication of power information. Instead, Dr. Aucoin testified that it is the communication of current information when voltage is known to be constant that lead to him to conclude that APC infringed under the doctrine of equivalents. The evidence at trial established that the voltage level in the data centers was both constant and known, thereby allowing for an easy computation of power information. The communication of the amount of measured current coupled with the evidence of the known voltage levels falls well within the insubstantial difference allowed under a doctrine of equivalents infringement theory. Therefore, the court finds that STI's doctrine of equivalents theory did not vitiate the "power information" limitation.
In its third challenge, APC argues that the jury finding that both the AP7900 and AP8900 products literally infringe claim 15 of the '543 and '771 patents is unsupported by the evidence at trial because claim 15 requires a display on "another area" of the plugstrip adjacent to the outputs. The court disagrees.
At trial, STI presented sufficient evidence to support the jury's finding that both the AP7900 and AP8900 products literally infringe the `another area' element of claim 15. For example, Dr. Aucoin testified that the vertical AP8900 products had a digital current information display that was in `an other area' of the enclosure from the power outputs or outlets. See Doc. #596, Dr. Aucoin Trial Testimony, p.604-06, 715-17. His analysis for the AP7900 products was the same. Id. at 617. Dr. Aucoin based his conclusions on the fact that the AP7900 and AP8900 products both have multiple groups, or pluralities, of outlets and that each group constituted its own area. He opined that the display in each product was in a different area adjacent to each separate group of outlets. Id. at 612, 715-16. APC's witness Daniel Rohr agreed, testifying directly that the digital display in the AP7900 products is in another area from the outlets. Doc. #601, Daniel Rohr Trial Testimony, p. 198. Therefore, the court finds that there was sufficient evidence to support the jury verdict of literal infringement for both the AP7900 and AP8900 products.
In its fourth challenge, APC argues that based on the evidence presented at trial, STI's '543 and '771 patent claims are obvious as a matter of law, and therefore, the jury verdict is not supported by substantial evidence. Specifically, APC argues that there was no dispute that all of the limitations of the asserted claims were known in the prior art. As such, the dispute between the parties was only whether one of ordinary skill in the art at the time of the invention would have had any motivation to combine the prior art in the same manner declared in STI's patents. APC argues that the evidence at trial established that the longstanding problem of current overloads in electronic devices would have provided a strong reason for one of ordinary skill to use a digital display in a PDU, and thus, STI's patents were obvious as a matter of law.
Initially, the court notes that the jury only rendered an advisory finding on the issue of obviousness as obviousness is solely an issue for the court to decide as a matter of law based on the evidence submitted at trial. See KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 427 (2007) (holding that obviousness under 35 U.S.C. § 103 is a question of law based on underlying factual inquiries). Thus, it was ultimately the court's decision whether the patents were obvious and APC's argument that the jury verdict is not supported by substantial evidence is irrelevant in this matter.
Additionally, the court finds that its ultimate determination that the patents-in-suit were not obvious is supported by substantial evidence. After the jury trial, the court rendered a final order on the issue of obviousness separate from the jury's advisory finding. See Doc. #615. In that order, the court found that "[a]fter reviewing all of the evidence submitted in this action . . . neither STI's '543 patent nor '771 patent would have been obvious to a person of ordinary skill in the field at the time of the invention. In particular, the court finds that the weight of the evidence, consistent with the jury's verdict and [APC's] clear and convincing evidence burden, does not allow for a finding of obviousness." Id. The court has reviewed the evidence at trial and finds that the evidence was sufficient to support the court's order that the '543 and '771 patents were not invalid as obvious.
A plaintiff's inequitable conduct during the patent application process "is an equitable defense to patent infringement that, if proved, bars enforcement of a patent." Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1285 (9th Cir. 2011). To establish the affirmative defense of inequitable conduct in a patent infringement action, an accused infringer must show that (1) an individual associated with the prosecution of the patent application at issue made affirmative misrepresentations of fact, failed to disclose material information, or submitted false material information; and (2) the individual acted with the specific intent to deceive the Patent and Trademark Office ("PTO"). Therasense, Inc., 649 F.3d at 1289; Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365 (Fed. Cir. 2008).
In its motion, APC argues that the court's inequitable conduct findings are not supported by substantial evidence. Specifically, APC argues that there is no reasonable inference from the evidence presented at trial other than that Mr. Ewing, along with Attorney Richard Main ("Attorney Main") and Attorney Ryan, intended to deceive the Patent Office by making misrepresentations about the state of the prior art during prosecution of the '543 and '771 patents.
Initially, APC argues that the court erred by making no findings regarding the inequitable conduct of STI's initial patent attorney, Attorney Main. However, APC did not accuse Attorney Main of inequitable conduct until just a few days before trial on May 5, 2014, when APC filed its proposed findings of fact and conclusions of law on the inequitable conduct claim. The court appropriately struck the claim against Attorney Main and no further findings were necessary.
APC also argues that the court failed to address its allegations that Mr. Ewing and Attorney Ryan made repeated misrepresentations to the Patent Office. Nor did the court make any findings regarding the materiality of prior art to the '543 patent. Rather, the court only addressed Mr. Ewing's failure to disclose prior art to the Patent Office. Finally, APC argues that the court's limited findings on materiality and intent are not supported by the law of the evidence submitted at trial. The court disagrees.
The evidence submitted at the bench trial does not support APC's contentions that Attorney Ryan and Mr. Ewing made any misrepresentations to the patent examiner. APC asserts that the court did not make any findings regarding Ryan's misrepresentations. However, the court specifically found that Ryan "responded fairly, reasonably and truthfully to the examiner's request." See Doc. #613. This finding necessarily means that Ryan did not make any misrepresentations before the Patent Office. Similarly, the court finds that general materiality findings were unnecessary in this action because the court found that Mr. Ewing and Attorney Ryan did not have the specific intent to deceive the Patent Office during the prosecution of the '543 patent. Thus, the court was not required to make additional findings on materiality as that issue is irrelevant absent a finding of specific intent to deceive. Further, the evidence submitted at trial supports the court's findings that Mr. Ewing and Attorney Ryan did not intend to deceive the PTO. The overwhelming weight of evidence conclusively establishes that the specific intent to deceive the PTO is not "the single most reasonable inference able to be drawn from the evidence." Doc. #613. Instead, a more plausible inference is that Mr. Ewing—having already provided the MSVM user manual, RPC-21 comparison chart, and other material to his attorney — reasonably relied on his attorney to decide what had to be disclosed to the PTO. Thus, there is utterly no evidence that either Mr. Ewing or Attorney Ryan made a deliberate decision to withhold any prior art from the patent office. Therefore, the court finds that there was substantial evidence to support its inequitable conduct findings and shall deny APC's motion for judgment as a matter of law.
Under Rule 59, the court may grant a motion for a new trial after a jury trial for any reason for which a new trial has previously been granted in federal court. FED. R. CIV. P. 59(a)(1)(A). These reasons include (1) correcting manifest errors of law or fact; (2) newly discovered evidence; (3) to prevent manifest injustice; and (4) an intervening change in controlling or governing law. See Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011).
As an alternative argument to its renewed motion for judgment as a matter of law, APC argues that it is entitled to a new trial on both the infringement and invalidity issues because the court committed several highly prejudicial errors at trial including: (1) improperly stating the law concerning the issue of obviousness in Jury Instruction No. 22; (2) presenting the jury with an inappropriate verdict form; (3) improperly applying the clear and convincing evidence burden of proof in Jury Instruction No. 18; (4) improperly defining the term "plugstrip" in Jury Instruction No. 10; (5) excluding evidence about the BayTech RPC-7, a relevant piece of prior art; (6) excluding the patent file history; (7) excluding evidence of the '543 patent re-examination; and (8) failing to instruct the jury of the term "power." See Doc. #626. Each issue is addressed below.
In its motion for a new trial, APC argues that the court presented an incorrect and prejudicial instruction on the issue of obviousness to the jury. APC argues that Jury Instruction No. 22,
The court disagrees and finds that Jury Instruction No. 22 correctly states the legal test for obviousness. The language to which APC objects is taken directly from KSR and has been cited repeatedly by the Federal Circuit and district courts. See KSR, 550 U.S. at 424 ("The proper question to have asked was whether a . . . designer of ordinary skill . . . would have seen a benefit to" combining the elements). Thus, the court did not err by including this language in the instruction.
In its second argument, APC contends that the verdict form presented the jury with a distorted view of the test for obviousness that unfairly favored STI. Specifically, APC argues that the verdict form included special interrogatories on secondary considerations that favored STI's non-obviousness arguments, yet excluded interrogatories regarding the primary Graham inquiries of obviousness. See Graham v. John Deere Co., 383 U.S. 1 (1966). APC argues that this verdict form improperly focused the jury's consideration of obviousness on `secondary considerations' of nonobviousness and unfairly primed the jury for a finding of nonobviousness. Given STI's heavy reliance on secondary considerations at trial, this error severely prejudiced APC.
APC's argument concerning the format of the verdict form is without merit. The verdict form correctly presented the obviousness issues to the jury. First, as previously addressed in APC's motion for judgment as a matter of law, the issue of whether the patent claims were obvious was a question of law for the court. Thus, whether or not the verdict form favored STI on the issue of obviousness is of no importance as it was the court, and not the jury, that made the ultimate decision to reject APC's defense that the patent claims were obvious. Further, APC's argument is erroneous because it ignores all of the jury instructions on the issue of obviousness. In the jury instructions, the jury was properly instructed that it must evaluate the four Graham factual inquiries, and the court's instructions appropriately addressed each factor in separate instructions. Given the specific direction provided by the instructions, and in light of the fact that most of the Graham factors were not disputed by the parties or at issue in this action, the verdict form correctly identified the only relevant factual issues for the jury. Therefore, the court finds that the verdict form was not prejudicial to APC.
In its third challenge, APC argues that Jury Instruction No. 18
In its fourth challenge, APC argues that the court incorrectly defined the term "plugstrip" to be a "one-piece" configuration in Jury Instruction No. 10.APC argues that the court's construction of plugstrip limiting the claimed invention to a "one-piece" configuration was clearly erroneous because that is not supported by the claim language and specification.
The court finds that it correctly defined the term plugstrip in Jury Instruction No. 10. Throughout this action, the court and the partes repeatedly referred to the the term plugstrip in the '543 patent as a "one-piece, fully integrated device." The court's definition of the term "plugstrip" is entirely consistent with the language of the claims, the specification and the prosecution history of the '543 patent. Therefore, the court did not err in its definition of plugstrip in the jury instructions.
In its fifth argument for a new trial, APC argues that the court improperly limited evidence of the BayTech RPC-7 device which APC claims was relevant to its obviousness defense.
Initially, the court notes that its exclusion of evidence relating to certain features of the BayTech RPC-7 product has been the subject of extensive briefing and two rulings. See Doc. ##505, 524. Certain evidence relating to the RPC-7 was excluded from trial because APC failed to meet the disclosure requirements of the local rules governing this case. After APC filed its motion for clarification, the court reiterated that "APC is precluded from proffering any evidence that the RPC-7 satisfies any other claim element at issue in the '543 patent" because APC failed to follow the local patent rules during prosecution of this case. See Doc. #524. Therefore, the court's limitation of the RPC-7 was proper and a new trial is not warranted on this issue.
In its sixth argument for a new trial, APC argues that the court improperly limited evidence of the file history of the '543 and '771 patents which prejudiced APC's ability to prove its affirmative defenses. Specifically, APC contends that the court excluded testimony about the patent prosecution history and precluded APC's expert from explaining what happened during the lengthy prosecution history of the patents at issue to the jury. APC argues that such testimony explaining the prosecution history was directly relevant to the jury's consideration of invalidity and obviousness.
The court disagrees and finds that it correctly limited testimony regarding the file history of the '543 patent. During trial, the court admitted the complete file history for each patent, and the court twice played for the jury the Federal Judicial Center's video entitled "The Patent Process, An Overview for Jurors," which provided a clear explanation of Patent Office practices and procedures. Further, the court provided the jury with a detailed glossary of terms relating to the prosecution of the patents, as requested by APC. Thus, sufficient evidence of the file history was presented to the jury. All the court excluded was APC's attempts to have a witness characterize the prosecution history or argue its meaning. The court properly excluded such testimony under Rule 403 of the Federal Rules of Evidence.
In its seventh challenge, APC argues that the court improperly excluded evidence of the '543 patent reexamination before the patent office.
This issue was fully briefed and addressed in connection with STI's motion in limine #1. See Doc. #431. In a thorough and well-reasoned order, the court granted STI's motion, concluding that (1) the '543 reexamination was not final and the status and holdings of the reexamination proceedings were of little relevance to the present action, (2) the prejudicial effect of informing the jury about the reexamination proceeding would far outweigh any probative value; and (3) allowing evidence of the reexamination would confuse the jury. See Doc. #505. Under relevant federal circuit precedent, the court's ruling was correct. Thus, the court properly excluded evidence of the reexamination proceedings involving the '543 patent and a new trial is not warranted on this issue.
Finally, APC argues that the court did not instruct the jury on the agreed definition of the term "power" which left the jury confused at to what that key term meant. However, the court properly defined and instructed the jury on the meaning of the term "power information" which was the relevant claim term in claim 15 of the '543 and '771 patents. At trial, APC argued that the AP7900 products were not "in power information determining communication" with at least one of the power input or power outputs as required by element 15(f) of both patents. APC did not argue that there was a dispute as to the issue of power. As such, the relevant disputed term at trial was "power information" and not "power." Because the court defined the relevant claim term in the jury instructions, a new trial is not warranted. Accordingly, the court shall deny APC's motion for a new trial.
IT IS THEREFORE ORDERED that plaintiff's motions for a permanent injunction, or in the alternative, for a compulsory license (Doc. #618) and for supplemental damages and prejudgment interest (Doc. #619), and defendant's renewed motion for judgment as a matter of law, or in the alternative, for a new trial (Doc. #626) are addressed in accordance with this AMENDED and RE-ISSUED ORDER.
IT IS SO ORDERED.
RE-ISSUED this
Following a jury trial in May 2014, certain of the AP7900 and AP8900 products sold by defendant American Power Conversion Corporation ("APC") were found to infringe claim 15 of U.S. Patent No. 7,043,543 ("the '543 patent") and claim 15 of U.S. Patent No. 7,702,771 ("the '771 patent"). On March 31, 2015, the court entered an order directing the parties to prepare an appropriate compulsory license with an ongoing [5%] 15% royalty rate on sales of certain licensed products, defined below, that are sold by APC from the date of judgment, August 8, 2014. Doc. #651. The parties submitted a proposed order with the terms set forth below.
The court hereby enters the following [amended] order:[
IT IS SO ORDERED.
DATED this
Instructions: When answering the following questions and filling out this Verdict Form, please refer to the Jury Instructions for guidance on the law applicable to the subject matter covered by each question.
WE THE JURY, in the above-entitled case, unanimously find as follows:[
Has Server Tech proven by a preponderance of the evidence that APC's AP 7900 series of products infringe Claim 15 of its '543 Patent?
XYes _______ No
If you find that Server Tech has proven by a preponderance of the evidence that APC's AP 7900 series of products infringe Claim 15 of its '543 Patent, do you find that these products literally infringe Claim 15 of the '543 Patent, infringe under the doctrine of equivalents, or both? (Check all the apply)
XLiteral Infringement
XInfringement under the Doctrine of Equivalents as to the "power information" element in Claim 15, element F(ii), in the '543 Patent, as referred to in Instruction No. 15.
Has Server Tech proven by a preponderance of the evidence that APC's AP 8900 series of products infringe Claim 15 of the '543 patent?
Has Server Tech proven by a preponderance of the evidence that APC's AP 7900 series of products infringe Claim 15 of the '543 Patent?
XYes _______ No
If you find that Server Tech has proven by a preponderance of the evidence that APC's AP 7900 series of products infringe Claim 15 of its '771 Patent, do you find that these products literally infringe Claim 15 of the '771 Patent, infringe under the doctrine of equivalents, or both? (Check all the apply)
XLiteral Infringement
XInfringement under the Doctrine of Equivalents as to the "power information" element in Claim 15, element F(ii), in the '771 Patent, as referred to in Instruction No. 15.
Has Server Tech proven by a preponderance of the evidence that APC's AP 8900 series of products infringe Claim 15 of the '543 patent?
The ultimate legal conclusion that must be reached on the obviousness question is whether APC has proven by clear and convincing evidence that the claimed invention(s), recited in Claim 15 of the '543 patent and Claim 15 of the '771 patent, would have been obvious to a person or ordinary skill in the field at the time of the invention. In order to property reach a conclusion the following questions must be answered:
Do you find that APC has proven by clear and convincing evidence that Claim 15 of the '543 Patent would have been obvious to a person of ordinary skill in the field at the time of the invention ("person of ordinary skill" being defined in Instruction No. 23 titled "Level of Ordinary Skill")?
_______ Yes XNo
Do you find that APC has proven by clear and convincing evidence that Claim 15 of the '771 patent would have been obvious to a person of ordinary skill in the field at the time of the invention ("person of ordinary skill" being defined in Instruction No. 23 titled "Level of Ordinary Skill")?
_______ Yes XNo
Do you find that Server Tech's claimed invention was commercially successful due to the merits of the claimed invention?
XYes _______ No
Do you find that there was a long felt need for a solution to the problem facing the inventors?
XYes _______ No
Do you find that APC or others copied Server Tech's claimed invention?
XYes _______ No
Do you find that Server Tech's claimed invention achieved unexpectedly superior results ever the closest prior art?
XYes _______ No
Do you find that others in the field praised Server Tech's claimed invention?
XYes _______ No
Proceed to Questions 8-11 only if you answered "yes" to at least one of Questions 1 through 4. On the other hand, if you answered "no" to all of Questions 1 through 4, then skip Questions 8-11.
Did Server Tech prove by a preponderance of the evidence that it is entitled to recover lost profits as a direct result of APC's infringement?
______ Yes
If your answer to Question 8 is "Yes," then proceed to Questions 9 through 11. If you answer to Question 8 is "No," then skip Question 9 and proceed to Questions 10 and 11.
What amount of lost profits, if any, do you award Server Tech as a result of infringement by APC?
$
For those infringing sales for which Server Tech has not proven lost damages, what amount has it proved it is entitled to as a reasonable royalty?
$10,787,634.00
If Server Tech has proven lost profits and/or reasonable royalty, what amount has it proved it is entitled to as total damages?
$ 10,787,634.00
You have now completed the Verdict Form. Have your foreperson date and sign the form below. Then, inform the court security officer that you have reached a unanimous verdict. Do not give the envelope to the bailiff. Your foreperson should retain possession of the Verdict Form until it is requested by the judge when the court reconvenes.
IT IS THEREFORE ORDERED that the vacated jury verdict dated May 29, 2014 (ECF No. 590) is AMENDED and RE-ISSUED in accordance with this Amended Verdict.
IT IS SO ORDERED.
DATED this
The Liu patent, issued in 2002, discloses a digital display power monitoring module that can be mounted into different types of power regulating devices, and measures various electrical parameters including current. See Doc. #288, Exhibit 23, Col. 1:44-46; Col. 4:47-5:2; Abstract Figure 1 and Figure 3.
