Opticurrent, LLC v. Power Integrations, Inc. et al

Filing 132

Order re: 125 Motion for Reconsideration by Judge William H. Orrick. The motion for reconsideration is GRANTED and the new priority date is February 23, 1997. (jmdS, COURT STAFF) (Filed on 8/17/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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OPTICURRENT, LLC,
Plaintiff,

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United States District Court
Northern District of California

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Case No. 17-cv-03597-WHO
ORDER ON MOTION FOR
RECONSIDERATION

v.
POWER INTEGRATIONS, INC., et al.,
Defendants.

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INTRODUCTION
Plaintiff Opticurrent, LLC, (“Opticurrent”) asks that I reconsider the grant of summary

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judgment to defendant Power Integrations, Inc. (“PI”), on the issue of whether there is sufficient

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proof corroborating a reduction to practice of the asserted patent by a February 23, 1997 pre-filing

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priority date. Because there was no evidence independently corroborating a reduction to practice,

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I initially found that the relevant priority date was the filing date of January 19, 2001. However,

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Opticurrent has provided new evidence that establishes that the earlier date was appropriate, and in

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the interest of justice for the reasons stated below, its motion for reconsideration is GRANTED.

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BACKGROUND
I incorporate the background discussion in the Order Granting In Part and Denying In Part

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Motion for Summary Judgment (the “Order”). Dkt. No. 122. The ‘623 Patent was filed on

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January 19, 2001 and relates to a circuit design for transistor switches used in semiconductor

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devices to minimize electric current leakage between terminals. See Compl. ¶ 13. James

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Congdon is the sole named inventor; he claimed that he conceived of the invention on February

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23, 1997. See Gunter Decl. Ex. 2 (Dkt. No. 105-3). Congdon drew the invention schematics in a

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notebook that was signed and dated by three other individuals, the earliest being by Kenneth

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Mackillop on February 24, 1997. See Headley Decl. Ex. 6 (Dkt. No. 103-8). Opticurrent pointed

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to Congdon’s “dusty breadboard” as physical evidence of a reduction to practice of the notebook

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schematic by at least February 23, 1997. See Gunter Decl. Ex. 4 (Dkt. No. 105-5). It also

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provided a declaration from an expert, Dr. Zane, opining that as a person skilled in the art he

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believed the breadboard was consistent with the notebook schematic such that it had to exist as of

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the date of the drawing. See Opp., Zane Decl. (Dkt. No. 105-19).

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In the Order, I found that Opticurrent was not entitled to a pre-filing priority date but that it
still raised genuine issues of material fact regarding the validity and infringement issues in this

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case. To determine the priority date, I held that Opticurrent did not establish with adequate

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corroborating evidence that the breadboard was actually reduced to practice according to the

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United States District Court
Northern District of California

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signatures and dates on the notebook schematic. See Order at 9-10. Specifically, the only

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independent corroboration of the breadboard was the notebook page, which lacked authenticated

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signatures. Id. at 10 (citing Singh v. Brake, 222 F.3d 1362, 1370 (Fed. Cir. 2000) (“Indeed, a

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notebook page may well show that the inventor conceived what he wrote on the page, whereas it

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may not show that the experiments were actually performed, as required for a reduction to

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practice.”) (emphasis in original)). On that basis, the relevant priority date was the filing date,

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January 19, 2001, as opposed to the date when the invention was allegedly reduced to practice on

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February 23, 1997. Id. PI then made an argument that the patent was invalid because of the later

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priority date, but this was not dispositive to validity and I found a genuine issue of material fact on

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that issue.

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After I issued the Order, Opticurrent asked leave to file a motion for reconsideration based

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on Mackillop’s affidavit that confirmed his signature and date on the notebook schematic,

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providing the independent corroboration needed to establish the pre-filing priority date. I invited

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the parties to brief the motion for reconsideration given the potential importance of the priority

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date in this case, and I turn now to that issue.

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LEGAL STANDARD
Federal Rule of Civil Procedure 59(e) permits a district court to reconsider and amend a
previous order under certain circumstances. A motion for reconsideration is appropriate if the
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court: “(1) is presented with newly discovered evidence, (2) committed clear error or the initial

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decision was manifestly unjust, or (3) if there is an intervening change in controlling law.” Sch.

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Dist. No. 1J, Multnomah Cnty., Or. v. ACandS Inc., 5 F.3d 1255, 1263 (9th Cir. 1993); accord

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Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009);

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Kona Enterprises, Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000). “There may also be

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other, highly unusual, circumstances warranting reconsideration.” Sch. Dist. No. 1J, 5 F.3d at

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1263. Reconsideration “offers an extraordinary remedy, to be used sparingly in the interests of

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finality and conservation of judicial resources.” Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir.

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2003) (internal quotation marks omitted). Accordingly, a motion for reconsideration may not be
used to raise evidence or argument for the first time that “could reasonably have been raised

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Northern District of California

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earlier in the litigation.” Marlyn, 571 F.3d at 880 (internal quotation marks omitted); see also

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Bhatnagar v. Surrendra Overseas Ltd., 52 F.3d 1220, 1231 (3d Cir. 1995) (“[R]eargument should

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not be used as a means to argue new facts or issues that inexcusably were not presented to the

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court in the matter previously decided.”) (internal quotation marks omitted).

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DISCUSSION

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Opticurrent’s motion for reconsideration pertains only to the prior Order’s finding that the

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pre-filing priority date was not established with independent corroborating evidence. The motion

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is based on Mackillop’s affidavit, which Opticurrent argues presents a material difference in facts

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than those before the court in the prior Order. See Reply at 3 (“The affidavit of Mr. Mackillop is

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clearly a material difference in fact than what was presented to the Court.”). The argument is

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well-taken, and reconsideration is appropriate.

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1. Mackillop’s Affidavit
Mackillop’s affidavit states that he witnessed the notebook schematic on February 24,

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1997, signed and dated the document, and saw a working prototype of the physical breadboard;

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essentially filling the gap in corroborative evidence missing during the motion for summary

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judgment. See Mackillop Affidavit ¶¶4-5 (Dkt. No. 125-1). The affidavit independently

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corroborates the actual reduction to practice of the ‘623 Patent invention, and supports a different

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outcome than the Order’s priority date finding.
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A basic principle of reconsideration is that this motion may not be used to present evidence

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or argument for the first time that “could reasonably have been raised earlier in the litigation.”

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Marlyn, 571 F.3d at 880. PI challenges Opticurrent’s reasonable diligence to bring this evidence

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sooner. It argues that Opticurrent was served invalidity contentions in 2016, placing the invention

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priority date at issue long before the summary judgment order. See Opp. Ex. C at 5. Opticurrent

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does not meaningfully dispute that the priority date was at issue, but in its own briefing contends

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that “Mackillop’s testimony is further evidence to establish the priority date of the invention

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which Plaintiff has set forth since May 2017.” Reply at 2. But the fact that the priority date was

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an issue early on, or that Mackillop was known at the time, does not necessarily show

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United States District Court
Northern District of California

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Opticurrent’s failure to raise it earlier without reasonable diligence.
Opticurrent previously presented evidence regarding a pre-filing priority date, which it

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adamantly argued was sufficient: the notebook schematic; the breadboard itself; and the

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declaration of a person skilled in the art, Dr. Zane, opining that the breadboard existed at the same

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time as the schematic because of the matching pin layouts and assignments. It did not obtain

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Mackillop’s affidavit at the time because it believed it was not necessary. That is seldom a good

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strategy; obviously, it should have gotten it sooner. But I do not doubt that it had a good faith

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belief that its evidence was sufficient without it.

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I originally thought that whether Opticurrent had provided sufficient information for the

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earlier priority date was a close call. Adding the Mackillop affidavit to that evidence undeniably

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corroborates the pre-filing priority date, and it would be unjust not to consider it. The Mackillop

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affidavit presents new facts establishing the independent corroboration of the ‘623 Patent’s

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invention by February 23, 1997. Reconsidering the priority date issue with this new evidence does

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not improperly advance a materially different argument that was unknown to PI at the time of the

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prior Order, and in the interests of justice I grant the motion and find the earlier priority date.

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2. Prejudice
PI raises prejudice concerns if the new evidence is considered. It argues that if the new

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priority date is found, it will need to reopen discovery and will suffer significant additional

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expenses. Specifically, it asserts that it will need to send out new document subpoenas, depose
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Mackillop, depose Congdon for a third time, file a second summary judgment motion, file new

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expert reports, and set a new trial date and schedule. Opticurrent responds that there is no need for

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new discovery because PI has been aware of their priority date position and legal theory in this

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case for some time.

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In light of the new affidavit, which I consider for the limited purpose of establishing

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corroboration of the pre-filing date, at the moment I see no need to reopen discovery or to change

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the trial schedule. While the Order analyzed, and rejected, the pre-filing priority date, it

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nonetheless found that there was a genuine issue of material fact regarding invalidity of the ‘623

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Patent. See Order at 11-12. A second motion for summary judgment does not seem warranted.
Nor is it obvious why a third deposition of Congdon is necessary; the parties were aware of

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Northern District of California

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Mackillop because his name was on Congdon’s notebook schematic, and PI had ample

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opportunity to depose Congdon about the signatories and develop a defense regarding the priority

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date issue.

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However, Opticurrent should have produced the Mackillop affidavit with the original

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motion papers. PI may take Mackillop’s deposition, which should occur on or before September

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7, 2018. The cost of the transcript, court reporter’s fee, travel (if required) and two hours of the

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PI’s lawyer’s time who is taking the deposition shall be paid by Opticurrent. The deposition is

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limited to 7 hours. If PI asserts after the deposition that the case schedule needs to be adjusted or

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that it should be entitled to file a second motion for summary judgment or some other motion, the

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parties should meet and confer and file a Joint Case Management Statement by September 18,

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2018 that explains their positions. A Case Management Conference will be held on September 25,

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2018 at 2:00 p.m. In addition, if PI asserts that Opticurrent’s representations with respect to the

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priority date are false, it should raise that in the Joint Statement.

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CONCLUSION
Reconsideration of a summary judgment order is an “extraordinary remedy,” but it is a

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remedy that is appropriate here to avoid an unjust outcome on the factual question of the correct

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priority date. Carroll, 342 F.3d at 945. Accordingly, the motion for reconsideration is

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GRANTED and the new relevant priority date is February 23, 1997. The parties shall proceed
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with Mackillop’s deposition as described above and raise any related issues at the Case

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Management Conference on September 25, 2018.

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IT IS SO ORDERED.
Dated: August 17, 2018

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William H. Orrick
United States District Judge

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United States District Court
Northern District of California

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