PCT International Incorporated v. Holland Electronics LLC

Filing 267

ORDER that Defendant's 222 Motion for Sanctions is denied. Defendant's 223 Renewed Motion for Summary Judgment is granted in part and denied in part. Plaintiff's 260 Motion for Leave to File Non-Electronic Exhibit is d enied. ORDERED the Clerk of the Court shall return to PCT the non-electronic exhibit known as "Exhibit 26." Plaintiff's 229 Motion to Exclude is denied without prejudice. Plaintiff's 233 Motion to Exclude is denied without prejudice. Plaintiff's 237 Motion to Exclude is denied without prejudice. Signed by Senior Judge James A Teilborg on 3/2/2015.(LFIG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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PCT International Incorporated,
Plaintiff,

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ORDER

v.

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No. CV-12-01797-PHX-JAT

Holland Electronics LLC,

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Defendant.

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Pending before the Court are Defendant Holland Electronics LLC (“Holland”)’s

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Motion, and Memorandum in Support Thereof, for Sanctions for PCT International Inc.’s

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Protective Order Violation (Doc. 222); Defendant Holland Electronics, LLC’s Renewed

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Motion for Summary Judgment on Infringement, or Alternatively, Partial Summary

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Judgment on Damages and Renewed Motion to Preclude any Theory of Indirect

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Infringement for Lack of Disclosure (Doc. 223); Plaintiff’s Resubmitted Motion to

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Exclude Portions of the Expert Reports of Daniel J. Whittle, PhD (Doc. 229); Plaintiff’s

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Resubmitted Motion to Exclude the Expert Opinion of David A. Haas (Redacted) (Doc.

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233); Plaintiff’s Resubmitted Motion to Exclude the Expert Opinion of David A. Haas

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(Filed under Seal) (Doc. 237); and Plaintiff’s Motion for Leave to File Non-

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Electronically Exhibit 26 to Plaintiff’s Separate Statement of Additional Material Facts in

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Support of PCT’s Opposition to Holland’s Renewed Motion for Summary Judgment

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(Doc. 260). The Court now rules on the motions.

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I.

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Motion for Sanctions
Holland moves for sanctions against Plaintiff PCT International Incorporated

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(“PCT”) for PCT’s alleged violation of the Protective Order issued in this case. (Doc. 222

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at 4). The Court previously entered a Protective Order pursuant to Federal Rule of Civil

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Procedure (“Rule”) 26(c) that permits the parties to designate materials produced during

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discovery as “confidential” or “outside attorneys’ eyes only.” (Doc. 53). The Protective

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Order limits the parties’ ability to use and disclose these designated materials, and it

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orders that designated materials “shall not be used or disclosed for any purpose other than

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the litigation of this action.” (Id. at 2).

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PCT is involved in litigation with its former supplier EZconn Corporation in the

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United States District Court for the District of Nevada. In that litigation, PCT filed a

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document giving rise to Holland’s instant motion for sanctions. The relevant portion of

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PCT’s document is as follows:

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Plaintiffs believe that third party discovery from Holland
Electronics, LLC (“Holland”) will lead to documents that
support personal jurisdiction over eGtran. [PCT] is currently
involved in a patent infringement lawsuit against Holland in
the District of Arizona. Case No. 12-cv-01797-PHX-JAT (D.
Ariz.). During discovery in that case, Holland produced a
number of documents pursuant to a protective order that may
serve as evidence of jurisdictional facts relating to eGtran.
The Arizona Court issued an order, attached as Exhibit G to
the Harting Declaration, Dkt. No. 36, describing the
documents at a high level. The Holland documents generally
relate to:
 EZconn/eGtran’s disclosure to Holland of “the price
at which it offered to manufacture PCT’s product.”
Dkt. No. 36, Exhibit G at 4-5.
 EZconn/eGtran’s disclosure to Holland of “the
quantities and shipment dates of PCT compression
connector orders.” Id. at 5
 Communications from EZconn/eGtran comprising
“certain e-mail attachments to Holland in an e-mail
with the subject line ‘RE: PCT.’ Id.
 An email from EZconn/eGtran to Holland forwarding
“copies of communications and a financial transaction
between PCT and EZconn concerning a dispute
regarding loans made from EZconn to PCT.” Id.
 Communications from Holland to EZconn/eGtran
asking “EZconn to delete e-mails concerning PCT
after reading them because Holland was concerned
about getting sued for ‘interference.’ Id.
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Plaintiffs’ Reply Memorandum of Points and Authorities in Support of Plaintiffs’ Motion

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for Leave to Conduct Jurisdictional Discovery at 14:16-15:6, Andes Indus., Inc. et al. v.

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EZconn Corp. et al., No. 2:14-cv-00400-APG-GWF (D. Nev. Oct. 16, 2014), ECF No. 60

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(grammatical errors in original).

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Holland alleges that the bullet points in the above-quoted portion of PCT’s filing

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contain Holland’s confidential information designated pursuant to the Protective Order;

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thus, Holland claims, PCT has violated the Order. (Doc. 222 at 4). PCT responds that all

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of the details concerning the documents are direct quotations from the Court’s June 3,

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2014 Order (Doc. 198). (Doc. 241 at 3). The Court has compared the details quoted in

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PCT’s filing with its statements in its June 3, 2014 Order and they are identical. See

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(Doc. 198 at 4-5). This is not surprising, because PCT’s filing cites to the Court’s Order

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and uses quotation marks in its description of the documents.

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The Protective Order provides that “[a]ny Designated Material which becomes

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part of an official judicial proceeding . . . is public.” (Doc. 53 at 6). Furthermore, the

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Court’s orders are public documents; information contained in them is public and cannot

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be subject to any protective order. PCT did not disclose or use confidential information

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under the Protective Order when it quoted the Court’s June 3, 2014 Order. The Court will

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deny Holland’s motion.

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II.

Holland’s Motion for Summary Judgment

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Holland moves for summary judgment on the issue of infringement, alleging that

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it is not a direct infringer and there is no evidence of indirect infringement. (Doc. 223 at

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2).1 Holland also moves for partial summary judgment on damages. (Id.)

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A.

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Summary judgment is appropriate when “the movant shows that there is no

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genuine dispute as to any material fact and the movant is entitled to judgment as a matter

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of law.” Fed. R. Civ. P. 56(a). “A party asserting that a fact cannot be or is genuinely

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disputed must support that assertion by . . . citing to particular parts of materials in the

Summary Judgment Standard

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All page number references are to PDF page numbers.
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record, including depositions, documents, electronically stored information, affidavits, or

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declarations, stipulations . . . admissions, interrogatory answers, or other materials,” or by

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“showing that materials cited do not establish the absence or presence of a genuine

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dispute, or that an adverse party cannot produce admissible evidence to support the fact.”

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Id. 56(c)(1)(A), (B). Thus, summary judgment is mandated “against a party who fails to

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make a showing sufficient to establish the existence of an element essential to that party’s

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case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v.

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Catrett, 477 U.S. 317, 322 (1986).

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Initially, the movant bears the burden of pointing out to the Court the basis for the

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motion and the elements of the causes of action upon which the non-movant will be

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unable to establish a genuine issue of material fact. Id. at 323. The burden then shifts to

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the non-movant to establish the existence of material fact. Id. The non-movant “must do

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more than simply show that there is some metaphysical doubt as to the material facts” by

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“com[ing] forward with ‘specific facts showing that there is a genuine issue for trial.’”

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Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87 (1986) (quoting

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Fed. R. Civ. P. 56(e) (1963) (amended 2010)). A dispute about a fact is “genuine” if the

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evidence is such that a reasonable jury could return a verdict for the non-moving party.

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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The non-movant’s bare

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assertions, standing alone, are insufficient to create a material issue of fact and defeat a

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motion for summary judgment. Id. at 247–48. However, in the summary judgment

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context, the Court construes all disputed facts in the light most favorable to the non-

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moving party. Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004).

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B.

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Holland argues that PCT cannot succeed on its claim against Holland for direct

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infringement of U.S. Patent 6,042,422 (filed Oct. 8, 1998) (the “‘422 Patent”) because

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claim 1 of the ‘422 Patent requires that the coaxial connector be crimped to a cable and

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Holland sells, but does not crimp, connectors. (Doc. 223 at 3-4).

Direct Infringement

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1.

Legal Standard

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A person is liable for patent infringement if, without permission of the patentee,

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that person “makes, uses, offers to sell, or sells any patented invention[] within the

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United States . . . during the term of the patent therefor.” 35 U.S.C. § 271(a). “A

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determination of patent infringement requires a two-step analysis.” Dynacore Holdings

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Corp. v. U.S. Philips Corp., 363 F.3d 1263, 1273 (Fed. Cir. 2004). First, the court must

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interpret the claims “to determine their scope and meaning”; this is a question of law for

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the court. Id. Second, the court must “then compare the properly construed claims to the

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allegedly infringing device.” Id. “To prove infringement, the patentee must show that the

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accused device meets each claim limitation, either literally or under the doctrine of

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equivalents.” Id. Although this second step is a factual question, “[a]n infringement issue

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is properly decided upon summary judgment when no reasonable jury could find that

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every limitation recited in the properly construed claim either is or is not found in the

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accused device either literally or under the doctrine of equivalents.” Gart v. Logitech,

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Inc., 254 F.3d 1334, 1339 (Fed. Cir. 2001).

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2.

Analysis

Claim 1 of the ‘422 Patent contains the following limitation:
. . . said collapsible band forming an annular rib projecting
inward toward said inner tube when said outer barrel is
axially compressed . . .
‘422 Patent col.7 ll.1-3. Holland contends that PCT’s own infringement expert admitted
that Holland’s products do not meet this limitation because as sold, the outer barrel has
not yet been axially compressed. (Doc. 223 at 3-4). Thus, according to Holland,
infringement only occurs when someone other than Holland “actually takes a Holland
connector and attaches it to a piece of coaxial cable.” (Id. at 5).
Holland’s argument fails because it misconstrues claim 1 of the ‘422 Patent. In
construing claims, the Court first looks to the ordinary and customary meaning of the
claim terms themselves. See Phillips v. AWH Corp., 415 F.3d 1303, 1312-13 (Fed. Cir.
2005). Claim 1 does not require that the collapsible band forms an annular rib and the
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outer barrel is axially compressed; it requires that the collapsible band forms an annular

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rib when the outer barrel is axially compressed. Thus, claim 1’s language is one of

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capability and not of immediate characteristics.

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In Intel Corporation v. United States International Trade Commission, 946 F.2d

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821 (Fed. Cir. 1991), the claim at issue required “programmable selection means” and

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used language relating to capability, namely “when said alternate addressing mode is

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selected.” 946 F.2d at 832. There, the Federal Circuit Court of Appeals (“Federal

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Circuit”) held that the accused device need only be capable of operating in the alternate

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addressing mode to be infringing. Id. In Finjan, Inc. v. Secure Computing Corp., 626

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F.3d 1197 (Fed. Cir. 2010), the Federal Circuit clarified that when a claim “recites

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capability and not actual operation, an accused device ‘need only be capable of operating’

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in the described mode.” 626 F.3d at 1204 (quoting Intel, 946 F.2d at 832). Here, the plain

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language of claim 1 of the ‘422 Patent specifies that the annular rib is formed when the

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outer barrel is axially compressed. A device having all of the limitations specified in

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claim 1 thus infringes if the relevant collapsible band forms an annular rib when the outer

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barrel is axially compressed; the device does not need to actually be compressed as a

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condition precedent to infringement.

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For these reasons, Holland’s interpretation of claim 1 is contrary to the ordinary

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and customary meaning of the claim’s terms. Although Holland cites the testimony of

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PCT’s infringement expert, Dr. Dickens, as evidence supporting Holland’s interpretation

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of claim 1, “unsupported assertions by experts as to the definition of a claim term are not

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useful to a court.” Phillips, 415 F.3d at 1318. In particular, expert testimony should be

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discounted when expert testimony is “clearly at odds with the claim construction

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mandated by the claims themselves.” Id. Thus, although Holland quotes Dr. Dickens as

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stating that Holland’s connectors would infringe “when you’ve crimped it,” (Doc. 223 at

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4), the Court finds Dr. Dickens’ testimony uncompelling.2

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The Court will address Dr. Dickens’ subsequent modification of his testimony in
its discussion of indirect infringement, infra.
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Moreover, although Holland argues that its motion for summary judgment is not

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based upon claim construction but rather “upon Dr. Dickens’ admission that, as a factual

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matter, the accused products as sold by Holland do not meet all the limitations of claim

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1,” (Doc. 256 at 8), Holland does not contend that its connectors do not form annular ribs

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when the outer barrel is axially compressed. Rather, Holland’s arguments involve the

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interpretation of the claim language; in particular, Holland is arguing the meaning of

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“when.” This is an issue of claim construction, which is a matter of law for the Court.

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Thus, because the Court concludes that claim 1 of the ‘422 Patent recites capability and

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not actual operation, Holland’s arguments fail.3 Accordingly, Holland has not established

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that it is not a direct infringer.4

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C.

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Holland makes two arguments with respect to the issue of indirect infringement.

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First, Holland asserts that PCT failed to disclose a theory of indirect infringement and the

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Court should preclude any indirect infringement claim because of this failure to disclose.

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(Doc. 223 at 5). Second, Holland asserts that PCT cannot show all of the elements of an

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indirect infringement claim. (Id. at 7).

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Indirect Infringement

1.

Failure to Disclose

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Holland argues that PCT failed to timely disclose any theory of indirect

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infringement and therefore the Court should bar PCT from raising this theory. (Doc. 223

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at 5).

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a.

Background

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PCT’s Complaint alleges that “Holland has infringed and continues to infringe –

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directly, contributorily, and/or by active inducement the ‘422 Patent by making, using,

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This includes Holland’s arguments raised in its discussion of indirect
infringement relating to connectors not crimped prior to the expiration of the ‘422 Patent.
See (Doc. 223 at 8:26-9:9).
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Therefore, the Court need not address PCT’s other arguments concerning
Holland’s direct infringement as well as PCT’s alternative arguments that Holland failed
to timely disclose its non-infringement arguments, at least as far as direct infringement is
concerned.
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offering to sell, selling, and/or importing the Accused Products within the United States.”

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(Doc. 1 ¶ 13). During discovery, Holland served PCT with an interrogatory asking PCT

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to “[s]et forth in full and complete detail all information, and identify all facts and

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circumstances” upon which PCT based this allegation and also for PCT to “identify all

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witnesses having knowledge of and all documents supporting or relating to” PCT’s

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allegations and contentions. (Doc. 224-21 at 3). PCT responded with references to its

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analysis and claim charts concerning Holland’s allegedly infringing connector models, a

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list of connector models, and also references to PCT’s answers to other interrogatories as

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having additional responsive information. On the explicit subject of indirect

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infringement, PCT responded: “In addition, Holland has failed to produce regularly

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maintained financial documents demonstrating the customers to whom Holland sold

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specific quantities of infringing products necessary for PCT to assess its claims for

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indirect infringement. Thus, PCT reserves its right to supplement its answer to this

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Interrogatory once Holland has produced all responsive documents to PCT’s discovery

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requests.” (Id. at 4).

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PCT later supplemented its response to this interrogatory, stating that the

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depositions of Holland’s witnesses (including exhibits) as well as Dr. Dickens’ expert

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and rebuttal reports (including exhibits) were additional responsive evidence. (Doc. 243-8

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at 12). PCT did not further supplement its response. (Doc. 243 at 16). PCT stated in its

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statement of the case in the parties’ Joint Proposed Case Management Plan that PCT

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violated “35 U.S.C. § 271(a)-(c).” (Doc. 27 at 2). Subsections (b) and (c) of 35 U.S.C. §

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271 concern liability for indirect infringement.

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b.

Analysis

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Holland argues that under Rule 37(c)(1), PCT cannot pursue an indirect

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infringement theory because PCT has failed to “fully” disclose this theory. (Doc. 223 at

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6). Rule 37(c)(1) provides, in relevant part, that “[i]f a party fails to provide information

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or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that

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information or witness to supply evidence on a motion, at a hearing, or at a trial . . . .”

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Fed. R. Civ. P. 37(c)(1). Although a theory of liability may fail if Rule 37(c)(1) bars all

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supporting evidence for that theory, the rule itself concerns the exclusion of only

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untimely disclosed evidence. Because Holland seeks to preclude a legal theory, Holland’s

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argument is more appropriately addressed under the Rule 12(b)(6) standard for failure to

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state a claim. But because PCT’s complaint placed Holland on fair notice that PCT

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claims Holland is liable for indirect infringement, see Bell Atl. Corp. v. Twombly, 550

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U.S. 544, 555 (2007), PCT pleaded a claim for indirect infringement (both concerning

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inducement and contributory infringement).5

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2.

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Indirect Infringement Claims
a.

Prerequisite of Direct Infringement

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Holland argues PCT cannot show Holland’s liability for indirect infringement

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because PCT cannot show the necessary prerequisite of direct infringement. (Doc. 223 at

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7). Indirect infringement requires an underlying direct infringement, Glenayre Elecs., Inc.

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v. Jackson, 443 F.3d 851, 858 (Fed. Cir. 2006), and the patentee must “either point to

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specific instances of direct infringement or show that the accused device necessarily

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infringes the patent in suit,” ACCO Brands, Inc. v. ABA Locks Mfrs. Co., 501 F.3d 1303,

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1313 (Fed. Cir. 2007).

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Holland argues that PCT has failed to identify any specific instances of direct

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infringement and there is no evidence that the accused Holland connectors necessarily

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infringe claim 1 of the ‘422 Patent. (Doc. 223 at 7-8). But PCT’s expert Dr. Dickens

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testified at his deposition that Holland’s connectors infringe even before they are crimped

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on a cable. (Doc. 243-5 at 155). Holland claims that Dr. Dickens instead “admitted that

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whether or not a connector meets the requirement of the claim that an annular rib is

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formed depends on what the third-party installer does when the connector is axially

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compressed onto a piece of coaxial cable.” (Doc. 223 at 8). Although Dr. Dickens

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initially so testified, he later changed his testimony, clarifying that he believed the

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Even if Holland could seek to preclude a theory of liability, PCT adequately
answered Holland’s interrogatories such that Holland was on notice that PCT is pursuing
indirect infringement claims in this case.
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connector had to merely be capable of forming an annular rib.6 (Doc. 243-5 at 223). Dr.

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Dickens also stated in his infringement report that each of the Holland connectors

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accused of infringement literally infringe claims 1 and 11 of the ‘422 Patent. (Doc. 243-2

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at 21). This testimony is sufficient to create an issue of fact.7

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Holland next contends that there is no evidence that its connectors “necessarily

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form an annular rib when axially compressed” because the “window” in Holland

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connectors results in a “deformation of the compression ring in a manner that does not

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form an annular rib.” (Doc. 223 at 8). But Dr. Dickens stated in his infringement report

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that each accused Holland connector has a collapsible band that forms an annular rib

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projecting inward as claim 1 of the ‘422 Patent requires.8 See (Doc. 243-2 at 54, 81, 102,

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125; Doc. 243-3 at 3, 19, 35, 50, 70, 86, 105; Doc. 243-4 at 8, 29, 46, 61). Thus, if Dr.

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Dickens testifies to these opinions at trial, a reasonable jury could conclude that

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Holland asserts that Dr. Dickens’ testimony is inadmissible because Dr. Dickens
offered at his deposition claim construction opinions not included in his expert reports.
(Doc. 256 at 10). But Dr. Dickens’ testimony concerning whether Holland’s connectors
form an annular rib when axially compressed was not an opinion regarding claim
construction; rather it was a fact opinion as to the physical characteristics of the
connectors. Thus, there is no basis for excluding this testimony.
Holland also argues that because Dr. Dickens changed his opinion during his
deposition, his later testimony is “conclusory and is insufficient to raise a genuine issue
of fact.” (Id.) Dr. Dickens’ later testimony was not conclusory; to the contrary, Dr.
Dickens thoroughly explained—in response to repeated questioning by Holland’s
counsel—why his earlier statements were inadvertently incorrect. See (Doc. 243-5 at
153-62). Although Holland criticizes Dr. Dickens’ credibility, credibility arguments are
for trial, not summary judgment.
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Thus, Holland’s contention that its connectors “may not be used in the United
States,” (Doc. 223 at 8), is without merit because claim 1 of the ‘422 Patent concerns
capability, and therefore any infringement occurs at the time of production. Whether
Holland’s connectors are ultimately crimped outside of the United States is irrelevant.
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Holland contends that the Court may not rely on Dr. Dickens’ expert report
because the report itself is inadmissible. (Doc. 256 at 10). But evidence offered in
opposition to a motion for summary judgment need not be admissible, as long as it can be
converted into an admissible form at trial. Quanta Indem. Co. v. Amberwood Dev. Inc.,
2014 WL 1246144, at *2 (D. Ariz. Mar. 26, 2014). And although Holland also contends
that Dr. Dickens’ deposition testimony contradicts his expert report, (Doc. 256 at 10),
Holland ignores Dr. Dickens’ later deposition testimony, which is consistent with his
report. Under Holland’s view, an expert witness can never modify his opinion during a
deposition because any subsequent opinions by that expert will be contradictions of the
expert’s initial sworn testimony. This is not the law.
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Holland’s connectors form an annular rib when axially compressed.

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Holland also argues there is no evidence that its connectors have the two non-

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collapsible wall portions described in claim 1 of the ‘422 Patent. (Doc. 223 at 8). Again,

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Holland’s argument fails because Dr. Dickens stated in his expert report that each

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accused Holland connector has a collapsible band extending between a first non-

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collapsible wall portion and a second non-collapsible wall portion. See (Doc. 243-2 at 43,

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70, 91, 113, 133; Doc. 243-3 at 10, 26, 42, 59, 77, 94, 116; Doc. 243-4 at 18, 37, 53).

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Although Holland offers its own expert testimony through its expert Dr. Whittle, the

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Court cannot weigh the evidence on a motion for summary judgment. Thus, although

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Holland also contends that Dr. Dickens’ opinions are unreliable because the drawings

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upon which Dr. Dickens relies “do not show the ‘window’, which has a dramatic impact

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upon how the collapsible band in the Holland connectors deforms when compressed,”

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(Doc. 223 at 8), this argument goes to the weight to be accorded to Dr. Dickens’

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testimony, and not to whether there is a genuine issue of material fact.9 More

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significantly, Holland fails to develop this argument because it does not cite any

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evidence. PCT has established the existence of a genuine issue of material fact as to

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whether Holland’s connectors have the necessary collapsible wall portions as claim 1 of

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the ‘422 Patent requires.

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b.

Inducement

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Holland’s second major argument concerning indirect infringement is PCT cannot

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show that Holland is liable for inducement to infringe. (Id.) Inducement to infringe is one

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of the two types of indirect infringement, the other being contributory infringement. See

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Dynacore, 363 F.3d at 1272. “Patent law provides that whoever actively induces

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infringement of a patent shall be liable as an infringer.” Vita-Mix Corp. v. Basic Holding,

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Inc., 581 F.3d 1317, 1328 (Fed. Cir. 2009). “Inducement requires a showing that the

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Holland argues that because Dr. Dickens did not offer any opinions on indirect
infringement, he cannot now testify about this subject. (Doc. 223 at 6). But to the extent
the Court has relied upon Dr. Dickens’ testimony in this Order, his testimony concerns
only direct infringement.
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alleged inducer knew of the patent, knowingly induced the infringing acts, and possessed

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a specific intent to encourage another’s infringement of the patent.” Id.

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Holland claims there is no evidence showing that Holland knowingly induced

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direct infringers to commit infringing acts and that Holland possessed a specific intent to

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encourage this infringement. (Doc. 223 at 9). But Holland knew of the ‘422 Patent no

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later than May 1, 2006. (Doc. 243-10 at 82). On August 26, 2006, Holland sent an e-mail

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to its manufacturer EZconn in which Holland asked for EZconn to replace the ring of

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Holland’s SLCU-6 connector with “another one with a similar shape as the PCT outer

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shell design.” (Doc. 243-10 at 95). Holland describes this new ring as “brass and

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designed to bend inward with axial pressure.” (Id.) Holland subsequently sent a second e-

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mail to EZconn in which Holland asked EZconn to “refine the design of the metal ring”

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and told EZconn that “[w]e know that EZConn has experience with similar metal designs

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used for your other customer, PCT.” (Id. at 98). This is sufficient evidence from which a

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reasonable jury could conclude that Holland knew of the ‘422 Patent, knowingly induced

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infringing acts, and possessed a specific intent to encourage another’s infringement of the

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‘422 Patent.

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c.

Contributory Infringement

Next, Holland argues that there is no evidence of contributory infringement. (Doc.
223 at 9). 35 U.S.C. § 271(c) provides:
Whoever offers to sell or sells within the United States or
imports into the United States a component of a patented
machine, manufacture, combination or composition, or a
material or apparatus for use in practicing a patented process,
constituting a material part of the invention, knowing the
same to be especially made or especially adapted for use in an
infringement of such patent, and not a staple article or
commodity of commerce suitable for substantial
noninfringing use, shall be liable as a contributory infringer.
Thus, contributory infringement requires an act of direct infringement and that the
defendant “knew that the combination for which its components were especially made
was both patented and infringing and that [the] defendant’s components have no
substantial non-infringing uses.” Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301,
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1320 (Fed. Cir. 2009). As the Court has discussed, there is evidence from which a

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reasonable jury could conclude that Holland knew its connectors infringed the ‘422

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Patent. There is also evidence that the only purpose for Holland’s connectors is to be used

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to connect coaxial cables. (Doc. 243-9 at 22). Accordingly, there is sufficient evidence

5

from which a reasonable jury could conclude that Holland is liable for contributory

6

infringement.

7

3.

Conclusion

8

For the foregoing reasons, Holland is not entitled to summary judgment on the

9

issue of infringement. Therefore, the Court need not address PCT’s contention that

10

Holland’s non-infringement arguments were untimely disclosed.

11

D.

12

Holland moves for partial summary judgment on the issue of damages, raising two

13

arguments. First, Holland seeks to limit PCT’s claim for damages to infringement

14

occurring after April 9, 2012 because PCT failed to properly mark its products. (Doc. 223

15

at 10). Second, Holland contends that some of its sales are not within the United States

16

and therefore are not infringing sales. (Id. at 16).

17

Damages

1.

Marking

18

Holland asserts that PCT never marked its products with the ‘422 Patent number

19

and because of this, PCT is entitled to damages only from the date on which Holland

20

received actual notice of infringement. (Id. at 11).

21

a.

Background

22

PCT has never marked its individual connectors with the ‘422 Patent number.

23

(Doc. 243 at 19). PCT believes the connectors are too small to legibly mark. (Id. at 40).

24

Despite this belief, PCT has affixed a label to some of its connectors that bears the PCT

25

logo as well as the PCT part number for the connector. (Id. at 20). These labels measure 5

26

mm in height and have text 2.8 mm in height. (Id.) However, according to PCT’s vice

27

president, Brandon Wilson, it is not “reasonably practical nor feasible” to add the word

28

“patent” or “pat.” along with one or more patent numbers to PCT’s labels on its

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1

connectors because “the relevant patent information would be too diminutive in size and

2

illegible to clearly read.” (Doc. 243-12 at 2). Wilson also states that “the design and

3

function of PCT’s coaxial cable connectors effectively prevents PCT from substantially

4

increasing the size of the label.” (Id.)

5

Because PCT believes it cannot legibly mark its individual connectors with the

6

‘422 Patent number, PCT instead marks the packaging in which the connectors are sold.

7

(Id. at 22). This packaging consists of a plastic bag containing a quantity of connectors.

8

(Doc. 243-8 at 39-73). PCT has produced the engineering drawings for all relevant

9

connector packaging, and these drawings show the ‘422 Patent number. (Doc. 243 at 17,

10

22). Wilson testified at his deposition that he believes these engineering drawings reflect

11

the actual connector packaging for PCT’s products. (Doc. 243-10 at 10). PCT’s contract

12

manufacturers follow these drawings in producing PCT’s products. (Id. at 11). Moreover,

13

PCT conducted periodic audits of its manufacturers to ensure compliance with its

14

specifications, although patent marking was not explicitly the subject of investigation.

15

(Id.)

16

Wilson also declares that since 2006, “PCT has continuously and consistently

17

marked the packaging for its coaxial cable connectors covered by the ‘422 Patent with the

18

number of the ‘422 Patent – along with any other applicable patent numbers.” (Doc. 243-

19

12 at 2). Wilson also declares he is not aware of any instance in which a manufacturer

20

failed to comply with PCT’s specification for marking the ‘422 Patent number on PCT’s

21

packaging. (Id. at 3).

22

b.

Legal Standard

23

The patent marking statute, 35 U.S.C § 287, “limits recoverable damages where a

24

patentee fails to mark [its] patented products.” Power Integrations, Inc. v. Fairchild

25

Semiconductor Int’l, Inc., 711 F.3d 1348, 1378 (Fed. Cir. 2013). A patentee is “entitled to

26

damages from the time when it either began marking its products in compliance with

27

section 287(a) or when it actually notified [the infringer] of its infringement, whichever

28

was earlier.” Am. Med. Sys., Inc. v. Med. Eng’g Corp., 6 F.3d 1523, 1537 (Fed. Cir.

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1

1993).

2

Section 287(a)’s constructive notice provision permits “[p]atentees, and persons

3

making, offering for sale, or selling within the United States any patented article for or

4

under them, or importing any patented article into the United States” to “give notice to

5

the public that the same is patented, either by fixing thereon the word ‘patent’ or the

6

abbreviation ‘pat.’, together with the number of the patent . . . or when, from the

7

character of the article, this can not be done, by fixing to it, or to the package wherein one

8

or more of them is contained, a label containing a like notice.” 35 U.S.C. § 287(a). If a

9

patentee fails to mark its products according to these requirements, “no damages shall be

10

recovered by the patentee in any action for infringement, except on proof that the

11

infringer was notified of the infringement and continued to infringe thereafter, in which

12

event damages may be recovered only for infringement occurring after such notice.” Id.

13

Although section 287(a) permits a patentee to mark the package containing a

14

patented product only if the product “can not” be marked, courts have interpreted this

15

provision as requiring less than absolute physical impossibility. “Alternative marking of

16

the package may sufficiently comply with the statute when there is some reasonable

17

consideration presented for not marking the article due to physical constraints or other

18

limitations, or, for reasons that go to the very purpose of the statute, marking the article

19

itself would not provide sufficient notice to the public.” Rutherford v. Trim-Tex, Inc., 803

20

F. Supp. 158, 162 (N.D. Ill. 1992); see also Sessions v. Romadka, 145 U.S. 29, 50 (1892)

21

(a patentee may mark the packaging when it is “doubtful” whether the product can be

22

legibly marked). When marking the product “raises concerns of feasibility or

23

practicality,” marking the package may comply with the statute. Belden Techs., Inc. v.

24

Superior Essex Commc’ns LP, 733 F. Supp. 2d 517, 534 (D. Del. 2010).

25

When a product’s size requires markings on the product to be so small that they

26

may not effectively notify the public of the patent, marking the packaging is appropriate.

27

See id. Markings that require the use of a magnifying glass to be legible are insufficient

28

to satisfy section 287(a). See Trussell Mfg. Co. v. Wilson-Jones Co., 50 F.2d 1027, 1030

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1

(2d Cir. 1931). But “[w]here the patented article has markings or printing on it, other than

2

the appropriate patent marking, then the alternate form of patent markings on the package

3

is not sufficient compliance with the statute.” Rutherford, 803 F. Supp. at 163. This is

4

because when the “public finds markings or writings upon the article itself, the public

5

should be able to rely upon the fact that a patent, if it exists, should also be noted with

6

that writing.” Id.

7

Once a patentee has begun marking its products, the marking “must be

8

substantially consistent and continuous in order for the [patentee] to avail itself of the

9

constructive notice provisions” of section 287(a). Maxwell v. J. Baker, Inc., 86 F.3d

10

1098, 1111 (Fed. Cir. 1996).

11

Finally, in an action for infringement, the patentee bears the burden of proving that

12

it complied with the statutory marking requirements. Id. Although this is ordinarily a

13

question of fact, see id., a court may grant summary judgment if no reasonable jury could

14

find that a patentee complied with the marking statute, Belden, 733 F. Supp. 2d at 536.

15

c.

Analysis

16

Holland argues that PCT failed to comply with the marking requirement of section

17

287(a) because PCT cannot show that it was not feasible to mark its individual

18

connectors. (Doc. 223 at 11-12). Holland contends that PCT’s labeling of its connectors

19

with its logo and part number shows that PCT could have chosen to mark the connectors

20

but failed to do so. (Id. at 12).

21

PCT argues that it is the custom in the connector industry to mark connector

22

packaging, rather than connectors, with the relevant patent numbers and this industry

23

custom is evidence that it is not feasible for PCT to mark its connectors. (Doc. 238 at 17).

24

The Court notes that nothing in section 287(a) directs a court to inquire as to industry

25

custom, nor can a subjective belief grounded in custom override the plain language of the

26

statute. Other manufacturers’ failure to mark according to section 287(a) does not excuse

27

PCT from complying with the same requirements. See Wayne-Gossard Corp. v. Sondra,

28

Inc., 434 F. Supp. 2d 1340, 1364 (E.D. Penn. 1977). Nonetheless, industry custom may

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1

still be probative as to whether it is not feasible for PCT to mark its connectors; the fact

2

that no one marks their connectors may be evidence that it is not feasible to mark a

3

connector of similar size. But the Court is not convinced that PCT’s industry custom

4

argument, standing alone, is more than a mere scintilla of evidence upon which to resist

5

summary judgment for Holland.10 See Anderson, 477 U.S. at 252.

6

More significant evidence exists in the declaration of PCT’s vice president

7

Brandon Wilson that it is not reasonably practical or feasible for PCT to mark its

8

connectors because the resulting text would be too small to read. On this point, Holland

9

cites a number of cases in which courts found that the mere presence of other text on the

10

patentee’s product demonstrated the feasibility of marking the product. (Doc. 223 at 12).

11

But as PCT points out, each of these cases is distinguishable. Many involve products

12

where the patentee marked the product with patent-related information but omitted the

13

patent number. See John L. Rie, Inc. v. Shelly Bros., Inc., 366 F. Supp. 84, 90-91 (E.D.

14

Penn. 1973) (patentee marked product “PAT PEND.” and could have marked “PAT

15

3002204”); Creative Pioneer Prods. Corp. v. K Mart Corp., 1987 WL 54482, at *3 (S.D.

16

Tex.

17

ELCONTROL—ITALY PAT.—PAT. APPL. IN I–UK–WG–F–USA–ROC–J”). Here,

18

PCT never marked its connectors with patent-related information. Second, in the

19

remaining cases cited by Holland, the patentee failed to offer a believable reason for its

20

failure to mark. See Belden, 733 F. Supp. 2d at 532, 536 (although the patentee argued

21

the inclusion of patent markings on its cables would violate regulatory standards

22

requiring cable markings to repeat every no more than every 40 inches, the patentee’s

23

cables contained 10-14 inches of blank space and repeated their markings every 24

24

inches); Briggs & Stratton Corp. v. Kohler Co., 398 F. Supp. 2d 925, 972 (W.D. Wis.

25

2005) (patentee did not argue it was infeasible to mark its product but instead claimed

26

section 287(a) did not apply to “system” patents); Kadant Johnson, Inc. v. D’Amico, 2012

July

10,

1987)

(patentee

marked

product

“MANUFACTURED

BY

27
28

10

For this reason, the Court need not address Holland’s contention that PCT failed
to timely disclose its industry custom evidence. (Doc. 256 at 8).
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1

WL 38319, at *5-6 (E.D. La. Jan. 9, 2012) (patentee affixed an plate to its product upon

2

which the “website address, the model number, the order number, and the temperature

3

and pressure limitations of” the product were stamped, but claimed it could not add its

4

patent number).

5

In the present case, the fact that PCT marks its connectors with its logo and the

6

product number undermines PCT’s argument. On the other hand, PCT marks its product

7

number using text measuring just 2.8 mm tall,11 hardly the “large, clear print” that

8

Holland purports it to be. Because patent marking must be legible, it is possible that

9

adding a patent number to the labels on PCT’s connectors would result in the patent

10

number being so small as to be illegible to the naked eye. Whether PCT can affix labels

11

containing a legible marking of the ‘422 Patent number to its products is an issue of fact.

12

There is sufficient evidence from which a reasonable jury could conclude that it was not

13

feasible for PCT to legibly mark its connectors with the ‘422 Patent number.

14

Holland next argues that PCT failed to mark its packaging in a “substantially

15

consistent and continuous” manner as section 287(a) requires. (Doc. 223 at 13). Holland

16

argues that PCT has not shown that its packaging was actually marked because PCT

17

produced only drawings of labels showing the ‘422 Patent number. (Id.) Holland

18

contends this is not evidence that these labels were actually affixed to packaging

19

containing PCT’s products. (Id.) Holland also argues that PCT’s audits of EZConn’s

20

manufacturing process were insufficient to demonstrate that all relevant PCT packaging

21

was marked with the ‘422 Patent number. (Id.)

22

To survive summary judgment on this point, all PCT must do is present sufficient

23

evidence from which a reasonable jury could conclude that it consistently and

24

continuously marked its packaging with the ‘422 Patent number. PCT has presented (1)

25

Wilson’s testimony that PCT marked all relevant packaging with the ‘422 Patent number;

26

(2) PCT’s engineering drawings showing the ‘422 Patent number marked on the

27
28

11

In the case of PCT’s “ERS” connectors, this text is as small as 2.4 mm. (Doc.
240 at 21).
- 18 -

1

packaging; (3) Wilson’s testimony that he, as vice president of PCT, is unaware of any

2

instance in which a contract manufacturer failed to comply with PCT’s specifications

3

requiring the marking of the ‘422 Patent number; and (4) Wilson’s testimony that PCT

4

periodically, albeit sporadically and without a formal evaluation process, audited its

5

contract manufacturers to ensure their output complied with PCT’s specifications.

6

Holland claims this evidence is insufficient because these voluntary audits were

7

not comprehensive and because Wilson did not know what procedures were in place to

8

ensure the ‘422 Patent number was consistently marked on product packaging. (Doc. 223

9

at 14). Although PCT has the burden of proving compliance with section 287(a) at trial,

10

Holland has the burden of proving it is entitled to summary judgment.12 PCT has shown

11

sufficient evidence from which a reasonable jury could conclude that it consistently and

12

continuously marked its packaging with the ‘422 Patent number. Holland’s criticisms of

13

Wilson’s testimony go to its weight, not to its admissibility, and the Court cannot weigh

14

the evidence on a motion for summary judgment. See Anderson, 477 U.S. at 249.

15

Accordingly, Holland is not entitled to summary judgment on the issue of PCT’s

16

compliance with section 287(a).13

17

2.

Foreign Sales

18

Holland argues that PCT improperly claims damages for sales of connectors

19

occurring outside of the United States. (Doc. 223 at 16). PCT’s damages expert has

20

calculated damages based, in part, on 6,165,642 units that Holland sold but did not

21

deliver within the United States (the “Foreign Sales”). (Doc. 230 at 8). PCT does not

22

contest that these Foreign Sales are not sales within the United States, but asserts Holland

23

offered, within the United States, to sell these units and this offer to sell constitutes

24

infringement. (Doc. 238 at 21).

25
12

26

Holland misstates this burden in its reply. (Doc. 256 at 14 n.6).

13

27
28

For this reason, the Court need not address Holland’s arguments concerning the
date on which PCT gave actual notice of infringement to Holland. (Doc. 223 at 15). Even
if the date of actual notice were undisputed, Holland would still not be entitled at
summary judgment to limit the period of recoverable damages because there is an issue
of fact as to constructive notice.
- 19 -

1

Section 271(a) provides that “whoever without authority . . . offers to sell . . . any

2

patented invention, within the United States . . . infringes the patent.” 35 U.S.C. § 271(a).

3

The issue is whether for purposes of section 271(a), an offer to sell made within the

4

United States for a foreign sale is an infringement. This issue was previously unsettled,

5

Semiconductor Energy Lab. Co. v. Chi Mei Optoelectronics Corp., 531 F. Supp. 2d 1084,

6

1111 (N.D. Cal. 2007), and the parties cite numerous district court opinions to support

7

their respective viewpoints. However, the Federal Circuit has very recently decided this

8

issue:

9

The case now before us involves the opposite situation, where
the negotiations occurred in the United States, but the
contemplated sale occurred outside the United States. We . . .
conclude here that [the alleged infringer] did not directly
infringe the . . . patents under the “offer to sell” provision by
offering to sell in the United States the products at issue,
because the locations of the contemplated sales were outside
the United States.

10
11
12
13
14

Halo Elecs., Inc. v. Pulse Elecs., Inc., 769 F.3d 1371, 1381 (Fed. Cir. 2014). The Federal

15

Circuit explained:

16

An offer to sell, in order to be an infringement, must be an
offer contemplating sale in the United States. Otherwise, the
presumption against extraterritoriality would be breached. If a
sale outside the United States is not an infringement of a U.S.
patent, an offer to sell, even if made in the United States,
when the sale would occur outside the United States,
similarly would not be an infringement of a U.S. patent.

17
18
19
20
21
22
23
24
25
26
27
28

Id.
PCT does not dispute that the Foreign Sales occurred outside of the United States.
(Doc. 243 at 31). As such, these sales were not infringements of the ‘422 Patent because
Holland did not offer to sell these units within the meaning of section 271(a). PCT is not
entitled to damages for the Foreign Sales.
III.

Motion for Leave to File Non-Electronic Exhibit 26
PCT has filed a motion for leave to file an exhibit in non-electronic form. (Doc.

260 at 2). Specifically, PCT seeks leave to file a CD-ROM containing a copy of a video
demonstrating a Holland connector being affixed to a coaxial cable, known to the parties
- 20 -

1

as “Exhibit 26.” (Id.) PCT contends that Holland refused to stipulate to the filing of

2

Exhibit 26 despite the fact that filing the exhibit is purely procedural and does not bear

3

upon whether the Court should substantively consider the exhibit. (Id. at 2-4).

4

Section II.M.2 of the Court’s Electronic Case Filing Administrative Policies and

5

Procedures Manual governs the procedure for filing exhibits in non-electronic form. The

6

filing of an exhibit is unrelated to the issue of whether the Court should substantively

7

consider an exhibit. The Court should not need to remind the parties that exhibits to a

8

summary judgment motion (or response to a summary judgment motion) are not admitted

9

for purposes of deciding that motion merely because they are filed.

10

Holland does not deny that it forced PCT to file a motion for leave to file Exhibit

11

26 in non-electronic form, and Holland admits that its opposition to filing Exhibit 26 in

12

non-electronic form is for substantive, not procedural, reasons. (Doc. 263 at 5). Local

13

Rule of Civil Procedure (“Local Rule”) 7.2(m)(2) provides that “[a]n objection to (and

14

any argument regarding) the admissibility of evidence offered in support of or opposition

15

to a motion must be presented in the objecting party’s responsive or reply memorandum

16

and not in a separate motion to strike or other separate filing.” Holland’s conduct in

17

forcing PCT to file a motion for leave to file Exhibit 26 and in filing a sixteen page

18

response to PCT’s motion certainly violates the spirit, if not the actual rule, of Local Rule

19

7.2(m)(2).

20

Because Holland is represented by experienced counsel, the Court can only infer

21

that Holland purposely directed its actions concerning Exhibit 26 in an effort to

22

improperly present an additional sixteen pages of evidentiary arguments to the Court that

23

would not otherwise fit in its motion or its reply. This conclusion is bolstered by

24

Holland’s inclusion of a paragraph arguing against the admission of Exhibit 26 in its

25

reply in support of its motion for summary judgment. See (Doc. 256 at 11:11-22).

26

Clearly, Holland knew the proper place to raise its substantive arguments. Instead,

27

Holland has forced PCT and the Court to devote valuable resources to what should have

28

been a routine procedural matter. This likely falls within the definition of vexatious. The

- 21 -

1

Court admonishes Holland to not repeat such behavior.

2

Because the Court has not needed to consider Exhibit 26 in ruling on any of the

3

other motions in this case, the Court will deny PCT’s motion. PCT is not precluded from

4

attempting to admit Exhibit 26 at trial, and at that time, Holland may raise any

5

substantive objections.

6

IV.

Motions to Exclude Expert Opinions

7

PCT moves to exclude the testimony of Holland’s expert witnesses David Haas

8

and Daniel Whittle. (Doc. 229; Doc. 233). These motions are motions to strike testimony,

9

prohibited under Local Rule 7.2(m)(1). Accordingly, the Court will deny these motions

10

without prejudice as procedurally improper. Because the Court has not relied on the

11

testimony of Haas or Whittle in ruling on the other pending motions, these motions to

12

exclude do not impact the Court’s analysis in the balance of this Order.

13

V.

Conclusion

14

As the date for the parties to submit motions in limine is near, the Court reminds

15

the parties that motions in limine are not an opportunity to pre-try the case, and the only

16

motions the Court is prepared to consider are those which seek to preclude statements or

17

evidence which if not precluded would “ring the bell that could not be unrung.”

18

For the foregoing reasons,

19

IT IS ORDERED that Defendant Holland Electronics LLC (“Holland”)’s Motion,

20

and Memorandum in Support Thereof, for Sanctions for PCT International Inc’s

21

Protective Order Violation (Doc. 222) is denied.

22

IT IS FURTHER ORDERED that Defendant Holland Electronics, LLC’s

23

Renewed Motion for Summary Judgment on Infringement, or Alternatively, Partial

24

Summary Judgment on Damages and Renewed Motion to Preclude any Theory of

25

Indirect Infringement for Lack of Disclosure (Doc. 223) is granted in part and denied in

26

part.

27

IT IS FURTHER ORDERED that Plaintiff’s Motion for Leave to File Non-

28

Electronically Exhibit 26 to Plaintiff’s Separate Statement of Additional Material Facts in

- 22 -

1

Support of PCT’s Opposition to Holland’s Renewed Motion for Summary Judgment

2

(Doc. 260) is denied.

3
4

IT IS FURTHER ORDERED that the Clerk of the Court shall return to PCT the
non-electronic exhibit known as “Exhibit 26” (referenced in Doc. 259).

5

IT IS FURTHER ORDERED that Plaintiff’s Resubmitted Motion to Exclude

6

Portions of the Expert Reports of Daniel J. Whittle, PhD (Doc. 229) is denied without

7

prejudice.

8
9

IT IS FURTHER ORDERED that Plaintiff’s Resubmitted Motion to Exclude the
Expert Opinion of David A. Haas (Redacted) (Doc. 233) is denied without prejudice.

10

IT IS FURTHER ORDERED that Plaintiff’s Resubmitted Motion to Exclude the

11

Expert Opinion of David A. Haas (Filed under Seal) (Doc. 237) is denied without

12

prejudice.

13

Dated this 2nd day of March, 2015.

14
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26
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