Nuance Communications, Inc. v. Abbyy Software House et al

Filing 698

ORDER by Judge Jeffrey S. White denying 614 ABBYY's Motion for Summary Judgment; denying 681 Lexmark's Motion for Summary Judgment; and granting in part and denying in part 616 Nuance's Motion for Sanctions. (jswlc2, COURT STAFF) (Filed on 5/22/2013)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 NUANCE COMMUNICATIONS INC, 10 Plaintiff, 11 For the Northern District of California United States District Court 9 12 13 14 No. C 08-02912 JSW v. ABBYY SOFTWARE HOUSE, et al., ORDER RE MOTIONS Defendants. / 15 Now before the Court are: (1) the motion for summary judgment filed by defendants 16 ABBYY USA Software House, Inc., ABBYY Software, Ltd., and ABBYY Production LLC 17 (collectively “ABBYY”); (2) the motion for summary judgment on the ’161 Patent filed by 18 defendant Lexmark International, Inc. (“Lexmark”): and (3) the motion for attorneys’ fees and 19 costs as part of discovery sanctions filed by plaintiff Nuance Communications, Inc. (“Nuance”). 20 The Court finds that these matters are appropriate for disposition without oral argument and it is 21 hereby deemed submitted. See Civ. L.R. 7-1(b). Accordingly, the hearing set for May 24, 2013 22 is HEREBY VACATED. Having carefully reviewed the parties’ papers, considered their 23 arguments and the relevant legal authority, the Court hereby DENIES ABBYY’s motion for 24 summary judgment; DENIES Lexmark’s motion for summary judgment; and GRANTS IN 25 PART and DENIES IN PART Nuance’s motion for sanctions. 26 The Court shall address facts from the record as necessary in the remainder of this order. 27 28 1 2 ANALYSIS A. 3 Legal Standard on Motion for Summary Judgment. A principal purpose of the summary judgment procedure is to identify and dispose of Summary judgment is proper when the “pleadings, depositions, answers to interrogatories, and 6 admissions on file, together with the affidavits, if any, show that there is no genuine issue as to 7 any material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. 8 Civ. P. 56(c). “In considering a motion for summary judgment, the court may not weigh the 9 evidence or make credibility determinations, and is required to draw all inferences in a light 10 most favorable to the non-moving party.” Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 11 For the Northern District of California factually unsupported claims. Celotex Corp. v. Cattrett, 477 U.S. 317, 323-24 (1986). 5 United States District Court 4 1997). 12 The party moving for summary judgment bears the initial burden of identifying those 13 portions of the pleadings, discovery, and affidavits that demonstrate the absence of a genuine 14 issue of material fact. Celotex, 477 U.S. at 323. An issue of fact is “genuine” only if there is 15 sufficient evidence for a reasonable fact finder to find for the non-moving party. Anderson v. 16 Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). A fact is “material” if it may affect the 17 outcome of the case. Id. at 248. If the party moving for summary judgment does not have the 18 ultimate burden of persuasion at trial, that party must produce evidence which either negates an 19 essential element of the non-moving party’s claims or that party must show that the non-moving 20 party does not have enough evidence of an essential element to carry its ultimate burden of 21 persuasion at trial. Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 22 2000). Once the moving party meets its initial burden, the non-moving party must go beyond 23 the pleadings and, by its own evidence, “set forth specific facts showing that there is a genuine 24 issue for trial.” Fed. R. Civ. P. 56(e). 25 In order to make this showing, the non-moving party must “identify with reasonable 26 particularity the evidence that precludes summary judgment.” Keenan v. Allan, 91 F.3d 1275, 27 1279 (9th Cir. 1996). In addition, the party seeking to establish a genuine issue of material fact 28 must take care adequately to point a court to the evidence precluding summary judgment 2 1 because a court is “‘not required to comb the record to find some reason to deny a motion for 2 summary judgment.’” Carmen v. San Francisco Unified School Dist., 237 F.3d 1026, 1029 (9th 3 Cir. 2001) (quoting Forsberg v. Pacific Northwest Bell Telephone Co., 840 F.2d 1409, 1418 4 (9th Cir. 1988)). If the non-moving party fails to point to evidence precluding summary 5 judgment, the moving party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 323. 6 B. Motions for Summary Judgment. 7 1. 8 ABBYY moves for summary judgment on Nuance’s trade dress claims on several bases. Trade Dress Claims. knew of the allegedly infringing trade dress on ABBYY competing products in June of 2002, 11 For the Northern District of California First, ABBYY moves on the basis of acquiescence and laches, arguing that although Nuance 10 United States District Court 9 Nuance did nothing to object or complain about it at that time. Nuance even went so far as to 12 congratulate ABBYY’s top management on the product, and only sued on the alleged 13 infringement six years later, after the products were already off the market. ABBYY also 14 moves for summary judgment on the trade dress claims on the basis that the Nuance’s design is 15 made up entirely of basic, commonplace elements, which are not inherently distinctive, and 16 which had not acquired secondary meaning in the marketplace. The Court finds the second 17 argument regarding the design elements and potential secondary meaning rife with disputed 18 issues of fact. 19 With regard to the defense of acquiescence and laches, the Court finds that ABBYY has 20 not waived the defense by virtue of having given notice in the pleadings and their targeted 21 discovery, and finds that Nuance did not suffer prejudice as a result. However, the Court finds 22 that the defenses are not persuasive on their merits at summary judgment. The e-mail sent to 23 ABBYY’s top management congratulating ABBYY on the release of their product does not 24 arise to the clear case of acquiescence found decisive in Conan Properties, Inc. v. Conans 25 Pizza, Inc., 752 F.2d 145 (5th Cir. 1985). In Conan, while visiting the defendant’s restaurant, 26 one of the creators of the Conan character took a picture with the defendant in front of his 27 restaurant and its allegedly infringing decor and inscribed the photograph with a congratulatory 28 message. Id. at 148. The court found that the defendant thereby clearly acquiesced to the use of 3 1 the character in the restaurant’s decor. Id. Here, however, the message congratulating 2 defendant on the release of their product does not refer to or picture the promotional or trade 3 dress materials. (See Declaration of Dean Tang, Ex. 5.) The Court does not find that the 4 congratulatory e-mail, as a matter of law, establishes that Nuance was both aware of and 5 acquiesced to ABBYY’s packaging, thereby entitling ABBBY to the defense of acquiescence or 6 laches. Accordingly, ABBYY’s motion for summary judgment on the trade dress claims is 7 DENIED. 8 2. 9 ABBYY also moves for summary judgment on the multiple patent claims remaining in Patent Claims. this matter. Upon careful review of the record, the expert reports, and the Court’s claim 11 For the Northern District of California United States District Court 10 construction orders, the Court finds that there remain questions of fact regarding each of the 12 patent infringement claims which preclude the Court from granting either defendant ABBYY’s 13 or Lexmark’s motions for summary judgment. Thus, the Court DENIES ABBYY’s and 14 Lexmark’s motions for summary judgment.1 15 C. Nuance’s Motion for Discovery Sanctions. 16 Nuance moves for attorneys’ fees and costs as part of discovery abuse sanctions 17 resulting from the late production of relevant documents from ABBYY. ABBYY contends that 18 the production was late as a result of their satisfaction of Nuance’s multiple other discovery 19 requests seeking massive amounts of irrelevant information. The Court does not find the delay 20 in production justified considering the scope of this case and the sheer amount of lawyering and 21 the parties’ investment of time and effort. Further, ABBYY’s late production required the 22 extension of time for discovery and Nuance’s retaking of many depositions which had been 23 completed prior to the original close of discovery. The Court finds sanctions under Federal 24 Rule of Civil Procedure 37 are justified for the expense Nuance incurred in the retaking of 25 otherwise-completed depositions once the Court re-opened discovery due to the late disclosures. 26 27 28 To the extent within defendants’ replies, they intend to move to strike Nuance’s arguments, those requests to strike are DENIED. 1 4 1 According to the undisputed record of costs and fees, the amount Nuance incurred after 2 the re-opening of discovery due to the late production was $134,613.51 ($14,544.94 in costs 3 and $120,068.57 in fees). This amount is payable by ABBYY within 30 days of this order. 4 5 CONCLUSION For the foregoing reasons, the Court DENIES ABBYY’s motion for summary judgment; 6 DENIES Lexmark’s motion for summary judgment; and GRANTS IN PART and DENIES IN 7 PART Nuance’s motion for sanctions. 8 In addition, the Court shall, by separate order, compel the parties to attend a mandatory 9 settlement conference before a Magistrate Judge to be completed by no later than July 5, 2013. Further, in the event this matter does not settle, the Court intends to consult with Special 11 For the Northern District of California United States District Court 10 Master Meredith Addy in the resolution of all pretrial filings, at the expense of the parties in 12 accordance with the terms of the Court’s order dated April 29, 2010. 13 14 IT IS SO ORDERED. 15 16 Dated: May 22, 2013 JEFFREY S. WHITE UNITED STATES DISTRICT JUDGE 17 18 19 20 21 22 23 24 25 26 27 28 5

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