Enplas Display Device Corporation et al v. Seoul Semiconductor Company, Ltd.

Filing 389

ADDITIONAL PRETRIAL RULINGS ON DISPUTED LEGAL ISSUES. Signed by Judge Nathanael Cousins on 3/7/2016. (lmh, COURT STAFF) (Filed on 3/7/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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ENPLAS DISPLAY DEVICE
CORPORATION, et al.,

United States District Court
Northern District of California

Plaintiffs,
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v.

Case No. 13-cv-05038 NC
ADDITIONAL PRETRIAL RULINGS
ON DISPUTED LEGAL ISSUES

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SEOUL SEMICONDUCTOR
COMPANY, LTD.,
Defendant.

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In reviewing the parties’ proposed jury instructions and verdict form, the Court

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concludes that there are additional legal rulings it must make before trial begins. The final

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jury instructions and verdict form will reflect the Court’s rulings below.

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I.

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Which Actions Must Occur Within the United States
The parties dispute whether to include instructions on which actions should occur

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within the United States, and the Court asked for further briefing on the topic. Dkt. No.

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368. The parties agree that the law is clear that the direct infringement must occur within

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the United States; however, the parties debate which actions of inducement could occur

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outside the United States.

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The Federal Circuit’s guidance in Merial Ltd. v. Cipla Ltd., 681 F.3d 1283, 1302-03

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(Fed. Cir. 2012), is instructive: “In short, where a foreign party, with the requisite

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knowledge and intent, employs extraterritorial means to actively induce acts of direct
Case No. 13-cv-05038 NC

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infringement that occur within the United States, such conduct is not categorically exempt

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from redress under § 271(b).” In DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1305-06

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(Fed. Cir. 2006) (en banc in relevant part), the Federal Circuit approved of a jury

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instruction that read: “Unlike direct infringement, which must take place in the United

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States, induced infringement does not require any activity by the indirect infringer in this

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country, so long as the direct infringement occurs here.”
The Court has found no contrary case law, and EDD does not point to a case

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suggesting such a jury instruction is improper. The Court adopts the jury instruction

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approved in DSU and will incorporate it into the final jury instructions.

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United States District Court
Northern District of California

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II.

Whether SSC Needs to Specify the Direct Infringer
In its proposed verdict form, EDD provides a section on direct infringement, which

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requires the jury to state the direct infringer. The parties debate whether SSC must identify

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a direct infringer with specificity.

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Generally, SSC bears the burden of demonstrating that EDD induced another to

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directly infringe the patent, which requires proof of direct infringement. Takeda Pharm.

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U.S.A., Inc. v. W.-Ward Pharm. Corp., 785 F.3d 625, 630-31 (Fed. Cir. 2015). The

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Supreme Court has clarified that an alleged induced infringer “cannot be liable for

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inducing infringement that never came to pass.” Limelight Networks, Inc. v. Akamai

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Techs., Inc., 134 S. Ct. 2111, 2118 (2014). Proof of direct infringement by a single actor is

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a necessary prerequisite for induced infringement liability. Id.; see also Metro-Goldwyn-

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Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 940 (2005) (“the inducement theory of

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course requires evidence of actual infringement by recipients of the device”). Thus, SSC

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must point to a particular direct infringer in establishing EDD’s liability.

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However, EDD relies on SSC’s argument in the Nichia case and the complexity of

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its supply chain to suggest that SSC could not prove direct infringement in the United

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States because EDD does not know its downstream customers. Although this is an

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argument better suited for summary judgment, the Court now provides a ruling on this

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legal issue that will be incorporated into the relevant jury instruction.
Case No. 13-cv-05038 NC

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The Court finds that while SSC must demonstrate direct infringement, and in so

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doing, must identify a direct infringer, SSC does not need to demonstrate that EDD knew

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of that particular direct infringer. “Inducement can be found where there is evidence of

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active steps taken to encourage direct infringement, which can in turn be found in

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advertising an infringing use or instructing how to engage in an infringing use.” Takeda,

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785 F.3d at 630-31 (citing Grokster, 545 U.S. at 936). The case law does not require proof

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that the induced infringer knows of the direct infringement, or intends to induce a specific

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infringer. See Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 774 (Fed. Cir. 1993) (finding that

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“[l]iability for either active inducement of infringement or contributory infringement is

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United States District Court
Northern District of California

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dependent upon the existence of direct infringement.”)(emphasis added).
Although such facts would certainly be useful in proving inducement, they are not

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required to demonstrate the requisite intent for active inducement. Rather, the case law

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provides that an individual can be liable for active inducement if they encourage direct

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infringement through an advertisement or instruction booklet. Takeda, 785 F.3d at 630-31.

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These activities are directed at a general audience of people—buyers, sellers, and users of

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the product. Thus, the inducer does not need to have the intent to induce a particular

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person or entity, but rather, can be liable for encouraging direct infringement to the wider

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public, or a class of people or entities.

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As applied to this case, SSC does not need to demonstrate that EDD knew its

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downstream users, or that EDD knew who bought and sold its lenses. Rather, SSC must

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demonstrate that (1) direct infringement occurred, and (2) that EDD took active steps to

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encourage direct infringement.

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III. Dr. Pelka’s Testimony

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The Court already ruled that Dr. Pelka may not offer expert testimony in this case,

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but deferred further explanation of how to properly apply the Court’s ruling. Dkt. No. 384.

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The parties agree that Dr. Pelka may act as a fact witness and can testify about his own

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patents. The parties disagree whether Dr. Pelka can give testimony regarding the scope of

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the claims in prior art patents to which he is not an inventor. The Court will instruct the
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jury that Dr. Pelka is not an expert witness.

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A fact witness may not opine on what a hypothetical person skilled in the art would

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know or what is disclosed by the claims of the patent. Digital Reg of Texas, LLC v. Adobe

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Sys., Inc., No. 12-cv-1971 CW, 2014 WL 4090550, at *8 (N.D. Cal. Aug. 19, 2014). In

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Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363, 1375 (Fed. Cir. 2008), the Federal

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Circuit approved of the district court’s decision to confine the inventor’s testimony to the

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actual words and content of the patent and patent application. Courts in this district have

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found that an inventor can explain how he developed the claimed invention, the process of

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obtaining the patent, research of which he was personally aware, and the authenticity, if
disputed, of documents related to the patent application. See Digital Reg, 2014 WL

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United States District Court
Northern District of California

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4090550, at *8; Synthes USA, LLC v. Spinal Kinetics, Inc., No. 09-cv-1201 RMW, 2011

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U.S. Dist. LEXIS 117281, at *3-4 (N.D. Cal. Oct. 11, 2011). The Court finds such

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guidance is appropriate and applicable in this case.

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Therefore, as applied to Dr. Pelka’s expected testimony, Dr. Pelka may testify to the

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patents that he authored. He may discuss the process of obtaining the patent, the words

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and content of the patent and patent application, and the research of what he was

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personally aware. He may not opine as to the scope of the Gleckman patent claims.

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However, he may testify as to whether he was aware of the Gleckman patent or any other

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reference, and whether he considered disclosing any particular reference (if he has

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knowledge of such facts). As to the other documents that SSC believes that EDD will ask

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Dr. Pelka to introduce, the Court expects EDD to lay a proper foundation for Dr. Pelka’s

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personal knowledge of any document he is asked to authenticate or discuss.

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IT IS SO ORDERED.

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Dated: March 7, 2016

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_____________________________________
NATHANAEL M. COUSINS
United States Magistrate Judge

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Case No. 13-cv-05038 NC

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