Aronowitz, et al v. Home Diagnostics

Filing 370

ORDER adopting 363 Report and Recommendation of Magistrate Judge, denying 352 Plaintiff's Motion to Reopen Case, and entering final judgment. Signed by Judge Joan A. Lenard on 6/11/2010. (mhz)

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UNITED STATES DISTRICT COURT S O U T H E R N DISTRICT OF FLORIDA C A S E NO. 93-06999-CIV-LENARD/TURNOFF J A C K L. ARONOWITZ, P l a in tif f , v. H O M E DIAGNOSTICS, INC., Defendant. ________________________________/ O R D E R ADOPTING REPORT & RECOMMENDATION (D.E. 363) AND D E N Y I N G MOTION TO REOPEN CASE (D.E. 352) T H I S CAUSE is before the Court on the Report and Recommendation of Magistrate J u d g e William C. Turnoff ("Report," D.E. 363), issued on March 15, 2010, recommending d e n ia l of Plaintiff's Motion to Reopen Case and for Status Conference ("Motion to Reopen," D .E . 352), filed on November 25, 2009.1 Plaintiff filed objections to the Report ( " O b j e c tio n s ," D.E. 364) on March 29, 2010, to which Defendant filed a response (" R e sp o n s e ," D.E. 368) on April 6, 2010. Based upon a de novo review of the Report, the o b je c tio n s , response, the transcript of the hearing, the related pleadings, and the record, the C o u r t finds as follows. On January 4, 2010, Defendant filed its response in opposition to the Motion to Reopen, to which Plaintiff filed a reply on January 15, 2010. (See D.E. 356, 359). The Magistrate Judge held a hearing on the matter on February 19, 2010. (See D.E. 362, 367.) 1 I. B a c k gro u n d A. P r o c ed u r a l History T h e original complaint in this action was filed on November 22, 1993. Plaintiffs, T e c h n ic a l Chemicals & Products, Inc.2 and Jack Aronowitz ("Aronowitz"), alleged, inter a lia , infringement of two registered patents, U.S. Patent Nos. 4,774,192 ("192") and 4 ,8 7 7 ,5 8 0 ("580"). The matter proceeded to a bench trial before the late Judge Edward B. D a v is on September 18-22, 1995. In his Findings of Fact and Conclusions of Law (D.E. 2 0 3 ), Judge Davis determined that Defendant had not infringed the `192 patent and although D e f en d a n t's products may have fallen within the `580 patent, Plaintiff had failed to prove th a t Defendant's license to use those products was validly terminated. Judgment was entered in favor of Defendant as to all counts on September 3, 1996. (See D.E. 204.) O n appeal, the Court of Appeals for the Federal Circuit affirmed-in-part, reversed-inp a rt, vacated-in-part, and remanded the case back to Judge Davis. (See "Mandate," D.E. 2 1 2 .) The appellate court decision, issued on May 4, 1998, provided the following in s tr u c tio n s : In conclusion, the district court erred in construing the claims of the `192 and ` 5 8 0 patents, which had the effect of tainting the court's infringement analysis. T h e re f o r e , we reverse the court's finding of noninfringement of the `192 p a te n t and remand for further findings under the correct claim construction. W e affirm the court's decision that HDI's Ultra+ Blood Glucose Color Chart, w h e n coupled with HDI's Ultra+ test strips, does not infringe claim 1 of the `58 0 patent, but on a different basis than that upon which the district court Technical Chemicals & Products, Inc. is no longer a party in this case. (See D.E. 303, 304, 349 n.1.) 2 2 re lie d . We reverse the court's decision that HDI's LipoScan product does not in f rin g e claim 1 of the `580 patent, and we find infringement as a matter of la w . We reverse the court's finding that HDI did not infringe claim 8 of the ` 5 8 0 patent; we find infringement as a matter of law; and we remand for fu rth er proceedings consistent with this opinion. Finally, we vacate the court's f in d i n g s relating to the existence of licenses under the 1988 and 1990 a g r e e m e n t s and on the issue of standing and remand for further proceedings. (Id. at 24.) On May 1, 2000, Judge Davis amended his prior findings of fact and conclusions of la w . (See "Amended Findings," D.E. 246.) In his Amended Findings, Judge Davis stated th a t the parties and the Court were in "general agreement" as to the remaining issues on r e m a n d and listed those issues as: 1. 2. W h e th e r the Plaintiffs have standing to bring suit on the `192 and `580 p a t e n ts . W h e th e r Defendant's Ultra+ test strip membranes contain a porosity g ra d ie n t after chemical conditioning, thereby infringing Claim 11 of the `1 9 2 patent. W h e th e r the porosity gradient limitation of Claim 11 is met under the d o c tr in e of equivalents. If the Court finds infringement of Claim 11 of the `192 patent, the C o u rt must decide whether Defendant's product also infringes d e p e n d en t Claims 14 and 15 and whether Defendant is protected from a n infringement claim by virtue of its licensing agreements. W h e th e r the `580 patent was covered by Defendant's licensing a g re e m e n ts . If so, the Court must determine whether Defendant b r e a c h e d the agreements and the proper remedy for any such breaches. I f the `580 patent was not covered by the agreements, the Court must d e ter m in e damages for Defendant's infringement of the `580 patent. 3. 4. [ 5 .] ( I d . at 2.) As to the first issue, Judge Davis determined that both plaintiffs possessed s ta n d in g . As to the second issue, he determined Claim 11's porosity gradient limitation was n o t met and there was no infringement of the `192 patent. As to the third issue, the Court 3 d e te rm in e d Plaintiffs had failed to prove infringement. Regarding the fourth issue, Judge D a v is found there could be no infringement of Claims 14 and 15 of the `192 patent given his p rio r findings. Judge Davis did not address the remaining issue phrased in terms of, " [ w ]h e th e r the `580 patent was covered by Defendant's licensing agreements. If so, the C o u rt must determine whether Defendant breached the agreements and the proper remedy f o r any such breaches. If the `580 patent was not covered by the agreements, the Court must d e te rm in e damages for Defendant's infringement of the `580 patent." On May 15, 2000, Plaintiffs requested the Court make additional findings with regard to the remaining issue. (See D.E. 247.) On May 19, 2000, Judge Davis granted that request a n d advised the parties he would render additional findings on issues related to the `580 p a te n t. (See D.E. 248.) However, prior to making any findings, Judge Davis retired and the ca se was reassigned to the undersigned on June 16, 2000. (See D.E. 249.) Upon reassignment, the Court referred several matters, including disposition of the re m a in in g issue, to Magistrate Judge Simonton. On February 17, 2006, approximately six ye a rs after reassignment to the undersigned and with little forward activity,3 Magistrate Judge S im o n to n issued an Order to Reconstruct the Record ("Order to Reconstruct," D.E. 349) and After the case was reassigned, the record reflects substantial periods of inactivity and delay. On at least two occasions, the Court issued orders directing Plaintiff to show cause why the case should not be dismissed for lack of prosecution. (See D.E. 269 (ordering Plaintiff to show cause why the case should not be dismissed for lack of prosecution for failure to notify the Court regarding substitution of counsel); D.E. 301 (ordering Plaintiff to show cause why the case should not be dismissed for lack of prosecution as no pleadings or motions had been filed between February 6, 2003, and September 10, 2003).) 3 4 m a d e the following findings: T h e parties agree, and the undersigned concurs, that the only issues which re m a in for this Court concern the `580 patent, which were briefed by the p a rtie s prior to the retirement of Judge Davis. The resolution of these issues is complicated by the fact that this Court did not hear the testimony presented a t trial, and therefore is not in a position to judge the credibility of witnesses if any additional findings required under the terms of the remand require c re d ib ility determinations. Therefore, it is necessary to determine whether the f a c tu a l findings expressly made by Judge Davis, as amended, combined with a n y undisputed facts in the record, are sufficient to resolve the issues re m a in in g under the terms of the remand from the Federal Circuit. To make th is determination, it is necessary to evaluate each issue, examine the original f in d in g s made by Judge Davis, examine the extent to which those findings w e re altered by the Federal Circuit, and then examine the amended findings by Ju d g e Davis to determine whether the factual questions have been resolved. If n o t, the evidence in the record needs to be examined to determine whether the u n d is p u te d evidence is sufficient to resolve the remaining issues without the n e e d for credibility determinations. *** T h e chambers of the undersigned Magistrate Judge has been attempting to lo c a te the complete record in this case since the date of the order of reference. H o w e v e r, neither the Clerk of this Court nor of the appellate court have been a b le to locate substantial portions of the record. The undersigned notes that o n e of the missing items, Docket Entry 211, is the transcript of the last day of the trial which was held before Judge Davis on September 22, 1995. In a d d itio n , both parties refer to certain of the missing items in their respective m e m o ra n d a concerning their positions on the entry of final judgment. T h e re f o re , the parties are directed to reconstruct the record with respect to the f o llo w in g missing items , or to file proposals regarding the resolution of this c a se in the absence of those materials: Docket Entries 33 through 34; Docket E n try 19; Docket Entry 23; Docket Entries 31 through 197; Docket Entry 202; a n d Docket Entry 211, as well as the trial exhibits. Based upon the above re v ie w of the record, it is hereby ORDERED that the parties shall confer with re sp e c t to the above items and either reconstruct the record, or file proposals r e g a rd i n g the resolution of this case in the absence of those materials. (D .E . 349 at 5-6.) On February 21, 2006, the Court administratively closed this case and in s tru c te d the Parties that, "[o]nce the record has been reconstructed or once the Parties have 5 stip u late d as to how this action may proceed without the documents identified in Magistrate Ju d g e Simonton's February 17, 2006, Order, either Party may file a motion to reopen this ca se." ("Order Administratively Closing Case," D.E. 350.) The record reflects that there w a s no activity between February 21, 2006, when the case was closed, and November 25, 2 0 0 9 , when Plaintiff filed his Motion to Reopen, a span of over three years and nine months.4 B. R e p o r t and Objections T h e Report recommends that Plaintiff's Motion to Reopen be denied and final ju d g m e n t entered consistent with the Magistrate Judge's findings, the prior findings of M a g is tra te Judge Simonton, the prior findings of Judge Davis, and the record in its present s ta te . (Report at 8-9.) First, the Report notes that Plaintiff's Motion to Reopen could have b e e n denied by default for failure to file a memorandum of law in compliance with Local R u le 7.1. (Id. at 4.) Nonetheless, addressing the motion on the merits, the Magistrate Judge f o u n d that after four years of inactivity the case should not be reopened.5 The Report finds th a t while the Order Administratively Closing Case did not specify a deadline, "[a]t a m in im u m , the parties were under an obligation to update the Court as to their progress or lack th e re o f " and "[n]o such updates took place." (Id. at 7.) The Magistrate Judge specifically f o u n d that no viable excuse existed for the significant delay in this case and "[c]onducting Docket entry No. 351 constitutes a transcript from an unrelated case, erroneously filed in this case and subsequently corrected by the Clerk. (See D.E. 351, 369.) The Magistrate Judge appears to have been referring to the fact that no activity had taken place in this case in the approximately four years since the case was administratively closed (aside from that relating to the instant Motion to Reopen). 6 5 4 a trial after four (4) years of inactivity and an administrative closure, coupled with the p ro c e d u ra l posture and lack of record evidence herein, will no doubt prejudice all parties in v o lv e d ." (Id. at 8.) Thus, the Magistrate Judge recommends denial of Plaintiff's Motion to Reopen. Next, recognizing "that the Mandate from the appellate court remains partially u n re so lv e d ," the Magistrate Judge found that final judgment should be entered consistent w ith prior findings and the record in its present state. (Id. at 8-9.) P la in tif f objects to the Report on the grounds that (1) pursuant to the mandate of the a p p e lla te court this Court must determine the remaining issue on the merits and (2) the M a g is tra te Judge improperly applied the doctrine of "laches" to this case. First, Plaintiff c o n te n d s the Court must fulfill the mandate of the Federal Circuit and address the remaining is s u e pertaining to the `580 patent. (Objections at 2-4.) Next, Plaintiff contends the doctrine o f "laches" should not apply. Nevertheless, Plaintiff also believes that the Magistrate Judge a p p lied the wrong standard when he failed to apply the standard generally applicable in p a ten t infringement cases. (Id. at 5.) Plaintiff also contends that he is not solely responsible f o r any delay because the trial exhibits were released to Defendant per docket entry 206 and P la in tif f attempted to reconstruct the record on his own. (Id. at 6.) Plaintiff also believes th a t nothing in the Order to Reconstruct Record provided a deadline for reconstruction or e v e n required reconstruction since the Parties could have stipulated to the record in its then c u rre n t state. (Id. at 7.) Additionally, Plaintiff contends Defendant is not materially p re ju d ic e d by the reopening of this case and he could not (and has not) abandoned the 7 d e te rm in a tio n of the remaining claim in light of the appellate court mandate. (Id. at 9-10.) F in a lly, Plaintiff states, "there is a question, given the retirement of the fact finder, whether M r. Aronowitz is entitled to a new trial on the issues pertaining to the `580 patent, as well a s whether a new trial is within the scope of the mandate." (Id. at 10-11.) In its Response, Defendant argues the Report fulfills the appellate court mandate by e n te rin g final judgment. (Response at 2-3.) Defendant also contends that while Plaintiff a tte m p ts to lay blame for the failure to construct a record, all Plaintiff has offered in terms o f efforts taken to complete reconstruction is that "he reviewed documents, conferred with c o u n se l, and contacted the Court of Appeals." (Id. at 4-5.) This despite approximately " 3 3 ,0 4 8 hours between the time his case was closed and the time when Plaintiff moved to r e - o p e n it." (Id.) With regard to the release of trial exhibits, Defendant notes that only D e f en d a n t's own exhibits were released to it in 1996. (Id. at 6.) Defendant also refutes the a rg u m e n t that it was uncooperative in reconstructing the record and asserts that a review of c o u n se l's billing records indicates no communications with Plaintiff's counsel took place in th e last four years (excluding communication regarding the Motion to Reopen). (Id. at 6 n.6.) F u r th e rm o re , Defendant attaches the affidavit of a corporate representative representing that (1 ) all of the defense witnesses at trial left the company many years ago and it is unknown w h e th e r they are alive or could be found; (2) the case concerns facts and contracts from the 1 9 8 0 s and no present employees have any personal knowledge regarding the relevant facts o r issues; (3) the product at issue has not been produced or distributed for over fifteen years; 8 (4 ) the whereabouts of the signatory on the licensing contracts at issue has been unknown for ye a r s; and (5) Defendant has been operating under a belief that Plaintiff abandoned his c la im s since there has been no activity for years. (Id. at 7-8, 15-16.) Defendant adds that re o p e n in g this case would be prejudicial as "boxes from the 1995 trial were long ago purged a n d /o r stored after Plaintiff abandoned his case, the witnesses are long gone, and the [sic] n o n e of the present employees of HDI have any knowledge of the facts or contracts that were at issue before the case was closed." (Id. at 11.) II. S t a n d a r d of Review U p o n receipt of the Report and the objections of the parties, the Court must now " m a k e a de novo determination of those portions of the report or specified proposed findings o r recommendations to which objection is made." 28 U.S.C. § 636(b)(1)(C). The Court " m a y accept, reject, or modify, in whole or in part, the findings or recommendations made b y the magistrate judge." Id. In making its determination, the district court is given d is c re tio n and "is generally free to employ the magistrate judge's findings to the extent that it sees fit." Amlong & Amlong, P.A. v. Denny's, Inc., 500 F.3d 1230, 1245 (11th Cir. 2007). III. D is c u s s io n C o u rts possess discretion in determining whether to reopen a case. See Wells v. Ortho P h a rm . Corp., 615 F. Supp. 262, 298 (D.C. Ga. 1985) (citing Zenith Radio Corp. v. Hazeltine R ese arc h , Inc., 401 U.S. 321, 331-32 (1971); United States v. One 1972 44' Striker, B o n a n z a , 753 F.2d 867, 869 (11th Cir. 1985)). In addition, "a motion to reopen is less 9 f a v o ra b ly received after the court has rendered its decision, even if formal findings of fact a n d conclusions of law have not been made and judgment entered." Id. (citing Caracci v. B ro th e r Int'l Sewing Machine Corp. of La., 222 F. Supp. 769, 771 (E.D. La. 1963, aff'd by, 3 4 1 F.2d 377 (5th Cir. 1965)).6 T h e Court adopts the findings of the Magistrate Judge and denies Plaintiff's Motion to Reopen. First, the Magistrate Judge did not err in referencing the equitable doctrine of " la c h e s " in this case. (See Report at 7 (citing Kason v. Component Hardware Group, Inc., 1 2 0 F.3d 1199 (11th Cir. 1997)).) This case has suffered an extraordinary amount of delay. T h e Federal Circuit issued its mandate over twelve years ago. Judge Davis entered his A m e n d e d Findings as to issues 1-4 over ten years ago. Magistrate Judge Simonton ordered the Parties to reconstruct the record and this case was administratively closed over four y e a r s ago. In addition, Plaintiff has offered no viable justification for the delay. Plaintiff h a s failed to provide evidence that he made any reasonable effort to prosecute his claim after th e case was administratively closed. Even assuming Plaintiff was unable to reconstruct the re c o rd on its own and could not obtain any stipulation from Defendant, there is no excuse for w a i ti n g approximately three years and nine months to raise this issue with the Court. In a d d itio n , the Court finds that reopening this case is prejudicial to Defendant. Defendant in d ic a te s that many of its records have been purged and it is no longer able to locate any of In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981), the Eleventh Circuit adopted as binding precedent all decisions handed down by the former Fifth Circuit before October 1, 1981. 10 6 t h e witnesses or materials necessary to defend this claim. Defendant also indicates it b e lie v e d Plaintiff to have abandoned his claim after such a long period of inactivity. The re m a in in g issue also involves a product that has not been distributed or produced for over f if te e n years. Nevertheless, Plaintiff now asks for a new trial. The Court also adopts the findings of the Magistrate Judge, and those prior findings o f Judge Davis and Magistrate Judge Simonton, in fulfilling the mandate of the appellate c o u r t. As to those issues identified by Judge Davis as issues 1-4 in his Amended Findings, th e Court adopts the prior findings of Judge Davis and final judgment is appropriate as to th o s e claims. Accordingly, consistent with this Order, it is ORDERED AND ADJUDGED th a t: 1. T h e Report and Recommendations of the Magistrate Judge (D.E. 363), issued o n March 15, 2010, is ADOPTED; 2. A s this case has suffered undue and inexcusable delay that is prejudicial to D e fen d an t, Plaintiff's Motion to Reopen Case and For Status Conference (D.E. 3 5 2 ) , filed on November 25, 2009, is DENIED; 3. T h e Court adopts the findings set forth in Judge Davis's Amendments to C o u rt's August 15, 1996 Findings of Fact and Conclusions of Law (D.E. 246), is s u e d on May 1, 2000, and the findings of Magistrate Judge Simonton in her F e b ru a ry 17, 2006 Order (D.E. 349), and consistent with those findings, final ju d g m e n t is ENTERED with regard to those issues remanded to this Court by 11 th e Mandate of the United States Court of Appeals for the Federal Circuit (D .E . 212), issued on April 30, 1998; 4. B e c au s e the record reflects almost four years of inactivity, the Court finds P la in tif f has abandoned the sole remaining issue left unresolved from Judge D a v is 's amended findings, namely "[w]hether the `580 patent was covered by D e f en d a n t's licensing agreements. If so, the Court must determine whether D e f en d a n t breached the agreements and the proper remedy for any such b r e a c h e s. If the `580 patent was not covered by the agreements, the Court m u s t determine damages for Defendant's infringement of the `580 patent"; 5. T h is case shall remain CLOSED. D O N E AND ORDERED in Chambers at Miami, Florida this 11th day of June, 2010. __________________ _ _ _ _ _ _ _ _ _ _ _ ______ J O A N A. LENARD U N I T E D STATES DISTRICT JUDGE 12

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