Koninklijke Philips Electronics N.V. et al v. Zoll Medical Corporation

Filing 1037

Judge Nathaniel M. Gorton: ENDORSED ORDER entered. MEMORANDUM AND ORDER 1) defendants motion for summary judgment of no willful infringement (Docket No. 921) is ALLOWED;2) plaintiffs motion for summary judgment that defendant cannot col lect damages on certain foreign sales (Docket No. 929) is DENIED and3) plaintiffs motion for summary judgment Preclude defendant from collecting damages (Docket No. 935) is, with respect to damages between June 1, 2006 and November, 16, 2006, DENIED.So ordered.(Caruso, Stephanie)

United States District Court
District of Massachusetts
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Koninklijke Philips N.V. and
Philips Electronics North
America Corporation,
Plaintiffs,
v.
Zoll Medical Corporation,
Defendant.

Civil Action No.
10-11041-NMG

MEMORANDUM & ORDER
GORTON, J.
This patent case involves automated external defibrillators
(“AEDs”) and components thereof.

In June, 2010, plaintiffs

Koninklijke Philips, N.V. and Philips Electronics North America
Corporation (collectively, “plaintiffs” or “Philips”) filed suit
against defendant Zoll Medical Corporation (“defendant” or
“Zoll”) for infringement of the Philips waveform patents (the
’454, ’905, ’212 and ’978 patents), self-test patents (the ’460
and ’374 patents) and CPR instructions patent (the ’785 patent).
Zoll denied infringement and counterclaimed for infringement of
its electrode patent (the ’526 patent) and defibrillator patent
(the ’187 patent).

This Court bifurcated the liability and

damages phases of the case.

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Pending before the Court are Zoll’s motion for summary
judgment of no willful infringement and Philips’s motions for
summary judgment to preclude Zoll from collecting damages 1) on
foreign sales of a certain electrode pad product and 2) for a
particular five-month period in 2007.

For the reasons that

follow, Zoll’s motion will be allowed, Philips’s motions will be
denied.
I.

Background
In December, 2013, after a vigorously contested jury trial,

the Court submitted the issues of patent validity and
infringement to the jury.

With respect to Philips’s patents,

the jury did not address the validity of the ’212 patent, which
was not contested, but otherwise found that all of the contested
claims in the ’212, ’454, ’905 and ’460 patents were valid and
directly infringed by Zoll’s products and that all of the
disputed claims in Philips’s ’374 patent were valid and some
were directly infringed.
With respect to the Zoll patents, the jury found that the
disputed claims of the ’187 and ’526 patent were valid, all of
the claims of the ’187 patent were directly infringed and most
of the disputed claims of the ’526 patent were directly
infringed.
This Court denied both parties’ motions for judgment as a
matter of law and both parties appealed.

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In January, 2015, the Court granted Zoll’s motion to
continue the damages trial pending the appeal even though the
parties had already exchanged damages expert reports.

In July,

2016, the Federal Circuit Court of Appeals affirmed, in part,
reversed, in part, vacated, in part, and remanded the case for a
new liability trial on the contested claims in Zoll’s ’526
electrode patent.

This Court lifted the stay and scheduled the

trial on the sole remaining liability issue (relative to Zoll’s
’526 patent) and damages to commence on July 24, 2017.
Early in 2015, Zoll requested the PTO to reexamine the
validity of the claims based on the Philips’ waveform ’454, ’905
and ’212 patents.

The PTO did so and issued final rejections of

the claims with respect to the ’454 and ’212 patents.

Philips

appealed those rejections to the Patent Trial and Appeal Board
and, in September, 2016, Zoll again moved to stay the damages
trial pending the completion of the reexamination.

Zoll also

moved to set deadlines for Philips to seek leave to file any
amended or new damages expert reports.

This Court declined to

stay the case but allowed the parties to file new or amended
damages expert reports.
Pursuant to a briefing schedule set by this Court in
November, 2016, the parties filed three motions for summary
judgment (one by Zoll and two by Philips) in March, 2017.
memorandum addresses those pending motions.

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This

II.

The Parties’ Motions for Summary Judgement
A.

Legal Standard

The role of summary judgment is “to pierce the pleadings
and to assess the proof in order to see whether there is a
genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d
816, 822 (1st Cir. 1991).

The burden is on the moving party to

show, through the pleadings, discovery and affidavits, “that
there is no genuine dispute as to any material fact and that the
movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a).

A fact is material if it “might affect the outcome of

the suit under the governing law.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986).

A genuine issue of material

fact exists where the evidence with respect to the material fact
in dispute “is such that a reasonable jury could return a
verdict for the nonmoving party.” Id.
Once the moving party has satisfied its burden, the burden
shifts to the non-moving party to set forth specific facts
showing that there is a genuine, triable issue. Celotex Corp. v.
Catrett, 477 U.S. 317, 324 (1986).

The Court must view the

entire record in the light most favorable to the non-moving
party and indulge all reasonable inferences in that party=s
favor. O’Connor v. Steeves, 994 F.2d 905, 907 (1st Cir. 1993).
Summary judgment is appropriate if, after viewing the record in
the non-moving party’s favor, the Court determines that no

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genuine issue of material fact exists and that the moving party
is entitled to judgment as a matter of law.
B.

Application
1.

Defendant’s Motion for Summary Judgment of No
Willful Infringement

Defendant Zoll moves for summary judgment that it did not
willfully infringe claim 51 of United States Patent
No. 5,607,454 (“the ’454 patent”) and claims 4 and 8 of United
States Patent No. 5,749,905 (“the ’905 patent”).
a.

Factual background

Philips is the owner of several patents-in-suit, including
the ’454 patent and the’905 patent.

On or about November 17,

2008, Philips first contacted Zoll about potential infringement
of at least some of those patents.1

Litigation ensued and on

December 19, 2013, a jury found, inter alia, Zoll not liable for
contributory infringement or induced infringement of claim 51 of
the ’454 patent and claims 4 and 8 of the ’905 patent.
Philips appealed the jury’s verdict with respect to its
finding of no contributory infringement.

The Federal Circuit

Court of Appeals affirmed that finding in an opinion dated
July 28, 2016. See generally Koninklike Philips N.V. v. Zoll
Med. Corp., 656 Fed. App’x 504 (Fed. Cir. 2016).

1

The parties dispute whether Philips specifically mentioned the
’454 patent and the ’905 patent in that letter.
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b.

Legal analysis

The United States Supreme Court recently held that in order
to be liable for willful infringement, pursuant to 35 U.S.C.
§ 284, the infringing conduct must be “willful, wanton,
malicious, [in] bad-faith, deliberate, consciously wrongful [or]
flagrant.” Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct.
1923, 1932 (2016).
According to defendant, a favorable jury verdict with
respect to plaintiffs’ claims for induced and contributory
infringement, combined with the affirmation of that verdict and
determination by the Federal Circuit Court of Appeals (“Federal
Circuit”) that its conduct was “reasonable,” see Koninklike
Philips, 656 Fed. App’x at 523, precludes any possibility that
their conduct is “willful, wanton [or] malicious”.
Plaintiffs generally respond that the standards for willful
infringement under 35 U.S.C. § 284 and those of contributory and
induced infringement are different and, therefore, the issue
should be decided by the jury.
Although the Court recognizes that in most instances, the
question of willfulness is for the jury, Bard Peripheral
Vascular, Inc. v. W.L. Gore & Assocs., 682 F.3d 1003, 1006 (Fed.
Cir. 2012), here it is bound by the finding of the Federal
Circuit that defendant’s belief that its conduct was noninfringing was reasonable. United States v. Rivera-Martinez, 931

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F.2d 148, 150 (1st Cir. 1991) (“[T]he decision of the appellate
court establishes the law of the case and it must be followed by
the trial court on remand.”).
Plaintiffs’ attempt to distinguish the jury findings and
the Federal Circuit holding from the willfulness standard is
unpersuasive.

They maintain that the standard for willfulness

considers the subjective belief of the defendant, see Halo
Elecs., 136 S. Ct. at 1933, whereas the Federal Circuit only
made only an objective determination as to whether defendant’s
conduct was reasonable.
In affirming the jury’s verdict, however, the Federal
Circuit concluded
that [although] Zoll’s claim construction argument
against the jury’s direct infringement verdict . . .
was incorrect, [its] argument was based on a reasonable
interpretation of the claims in light of the
specification and the prosecution history. . . . [T]his
belief in non-infringement was reasonable . . . .
Koninklike Philips N.V., 656 Fed. App’x at 523 (emphasis added)
(citation omitted).

Post-Halo, courts have dismissed

willfulness infringement claims where, as here, the defendant
has had “reasonable arguments as to why its conduct was noninfringing.” Move, Inc. v. Real Estate All. Ltd., 221 F. Supp.
3d 1149, 1173 (C.D. Cal. 2016) (appeal pending); see also Trs.
of Bos. Univ. v. Everlight Elecs. Co., 212 F. Supp. 3d 254, 25657 (D. Mass. 2016) (appeal pending).

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Finally, plaintiffs contend that defendant knew about its
infringing activities long before 2009, the year in which
defendant responded that it believed that it was not infringing.
Such knowledge of infringement does not, however, rise to a
level of willfulness. Cf. Trs. Of Bos. Univ., 212 F. Supp. At
257 (quoting Halo Elecs., 36 S. Ct. at 1936 (Breyer, J.,
concurring)).

Plaintiffs have not met their burden to show that

defendant’s conduct was so malicious that a finding of willful
infringement is warranted in this case. See Andrea, LLC v.
Barnes & Noble, Inc., No. 13 Civ. 4137, 2017 WL 44954 (S.D.N.Y.
Jan. 3, 2017) (noting that the burden of proof is not on the
defendant and concluding that plaintiff has not shown that the
defendant’s actions were “subjectively willful”).
Accordingly, the Court will allow defendant’s motion for
summary judgment with respect to plaintiffs’ claims for willful
infringement of claim 51 of the ’454 patent and claims 4 and 8
of the ’905 patent.
2.

Plaintiffs’ Motion for Summary Judgment that
Defendant Cannot Collect Damages on Certain
Foreign Sales

Plaintiffs move for summary judgment on the question of
damages with respect to foreign sales of a certain M3713A
electrode pad.

They aver that the product is not manufactured

or sold anywhere in the United States and, thus, damages are not
recoverable. See 35 U.S.C. § 271(a).

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Defendant responds that

there is at least a genuine issue of material fact as to whether
the electrode pads are manufactured and/or sold by Philips in
the United States.
a.

Factual background

Philips sells and ships various electrode products
individually and as replacement electrodes for use in its
defibrillators.

A third-party, Katecho, has contracted with

Philips to manufacture electrode pads, including one identified
as model number M3713A which is the subject of this motion.
b.

Legal analysis

The parties generally dispute whether Philips “makes” or
“sells” the M3713A electrode pads in the United States such that
it is subject to a claim for damages for infringing a Zoll
patent, see 35 U.S.C. § 271(a), even though the M3713A
electrodes are physically manufactured by Katecho.
Pursuant to 35 U.S.C. § 271(a), a company that,
without authority makes, uses, offers to sell, or
sells any patented invention, within the United States
or imports into the United States any patented
invention during the term of the patent therefor,
infringes the patent.
Courts have interpreted this provision to preclude a
patentee from receiving compensation for an infringer’s “foreign
exploitation of a patented invention.” Power Integrations, Inc.
v. Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348, 1371
(Fed. Cir. 2013).

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Here, Philips relies upon an affidavit submitted by David
Nuttal, its
Controller for Emergency Care and Resuscitation and
Hospital Respiratory Care in Patient Care and
Measurement Systems,
to show that the subject electrode pad is manufactured by
Katecho and then shipped to a Philips corporate affiliate in
Germany for resale outside of the United States.

Furthermore,

according to Philips, no contracts are entered into by any of
the Philips entities in the United States.
Defendant counters with statements by representatives from
Philips that certain electrodes are, in fact, sold within the
United States.

Although those statements do not refer to the

M3713A electrode pads specifically, viewing the record in a
light most favorable to defendant, as the Court must do, the
Court finds that there is at least a genuine issue of material
fact as to whether that electrode pad model is sold within the
United States.

Therefore, plaintiffs’ motion for summary

judgment will be denied.
3.

Plaintiffs’ Motion for Summary Judgment to
Preclude Defendant from Collecting Damages

Finally, plaintiffs move for summary judgment to preclude
recovery of damages for its infringement of U.S. Patent No.
5,330,526 (“the ’526 patent”) before November 16, 2007.

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Defendant concedes that it will not seek damages for
infringement before June 1, 2007, and therefore is not entitled
to such damages.

Consequently, the only viable dispute is

whether defendant is entitled to recover damages for
infringement of the ’526 patent between June 1, 2007 and
November 16, 2007.
a.

Factual background

Defendant Zoll is the owner of the ’526 patent.

Zoll,

including its wholly-owned subsidiary, Bio-Detek, sells at least
37 different electrode products that embody at least one claim
of the ’526 patent.

There appears to be no communication of any

kind between the parties about the ’526 patent before November
16, 2007.
Although it is disputed whether or not Zoll “marked” (i.e.,
added the word “patent” and the patent number) its electrode
product lines prior to that date, Zoll seeks damages for
infringement for the period June 1, 2007 through November 16,
2007.

Zoll apparently marked either 65% or 73% of its electrode

products that practice the ’526 patent in that timeframe.
b.

Legal analysis

Pursuant to 35 U.S.C. § 287(a), a patentee may not recover
damages unless it has “notified” the infringer of its conduct
and the infringer continues its unlawful activities.

Such

notice can be “actual” or “constructive”. Funai Elec. Co. v.

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Daewood Elecs. Corp., 616 F.3d 1357, 1372, 1373 (Fed. Cir.
2010).

The parties apparently do not dispute that defendant did

not provide actual notice to plaintiff of its infringing
activities.

Thus, the Court must determine whether defendant

provided constructive notice.
A patentee can provide constructive notice by “marking” its
patented product with the word “patent” (or its abbreviation
“pat.”) and the number of the patent. See 35 U.S.C. § 287(a).
To be in compliance with the statute, the patentee must “mark
substantially all of its patented products”. Am. Med. Sys., Inc.
v. Med. Eng’g Corp., 6 F.3d 1523, 1538 (Fed. Cir. 1993).
Here, plaintiffs contend that between June 1, 2007 and
November 16, 2007, defendant marked approximately 65% of the
products embodying the’526 patent which is purportedly not
“substantially all” of the products.

Defendant responds that it

marked 73% of the products but, in any case, whether it complied
with the requirements of § 287(a) is a question of fact for the
jury.

The Court agrees with defendant.
First, there is a genuine dispute as to whether defendant

marked 65% or 73% of its products.
Second, the Federal Circuit Court of Appeals has explained
that “compliance with the marking statute, 35 U.S.C. § 287(a),
is a question of fact.” Gart v. Logitech, Inc., 254 F.3d 1334,
1339 (Fed. Cir. 2001).

Summary judgment is thus appropriate

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only if “no reasonable factfinder could find compliance”. McAfee
Enters., Inc. v. Ashley Entm’t Copr., No. 16-cv-2618, 2016 WL
4063169, at *6 (N.D. Ill. July 29, 2016).
Although neither 65% nor 73% is a particularly high
percentage, the Court cannot determine, as a matter of law, that
no reasonable jury could find that defendant marked
“substantially all” of its patented products.
Plaintiff directs the Court to Universal Electronics, Inc.
v. Universal Remote Control, Inc., in which the court allowed
summary judgment because the patentee marked “only” 77-78% of
its patented products. 34 F. Supp. 3d 1061, 1097 (citing
Hazeltine Corp. v. Radio Corp. of Am., 20 F. Supp. 668, 673
(S.D.N.Y. 1937)).

This Court is not convinced, however, because

there the court relied upon a case that the Federal Circuit has
determined is no longer good law. See Am. Med. Sys., 6 F.3d at
1534-37 (explaining that Hazeltine relied upon a predecessor to
§ 287(a) and thus, is no longer persuasive authority).
Accordingly, plaintiffs’ motion for summary judgment, with
respect to damages between June 1, 2007 and November, 16, 2007
will be denied.

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ORDER
For the foregoing reasons:
1)

defendant’s motion for summary judgment of no willful
infringement (Docket No. 921) is ALLOWED;

2)

plaintiffs’ motion for summary judgment that defendant
cannot collect damages on certain foreign sales
(Docket No. 929) is DENIED and

3)

plaintiffs’ motion for summary judgment Preclude
defendant from collecting damages (Docket No. 935) is,
with respect to damages between June 1, 2006 and
November, 16, 2006, DENIED.

So ordered.
/s/ Nathaniel M. Gorton
d
Nathaniel M. Gorton
United States District Judge
Dated June 26, 2017

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