Seiko Epson Corporation et al v. E-Babylon, Inc. et al
Filing
317
ORDER: The Court DENIES the Motion 179 for Partial Summary Judgment of Unenforceability of U.S. Patent Nos. 6,502,917 ('917 Patent) and 6,550,902 ('902 Patent) for Inequitable Conduct filed by Defendants Ninestar Technology Compan y, Ltd.; Ninestar Technology Co. Ltd; and Dataproducts USA, LLC, and GRANTS the Cross-Motion 204 for Partial Summary Judgment of No Inequitable Conduct or Walker Process Fraud filed by Plaintiffs Seiko Epson Corporation; Epson America, Inc.; and Epson Portland, Inc. Signed on 11/10/2011 by Judge Anna J. Brown. See 13 page Opinion and Order for full text. (bb)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
SEIKO EPSON CORPORATION,
a Japan corporation; EPSON
AMERICA, INC., a California
corporation; and EPSON
PORTLAND, INC., an Oregon
corporation,
Plaintiffs,
v.
E-BABYLON, INC., a California
corporation, LINKYO CORP.,
a California corporation;
CARTRIDGES ARE US, INC., a
Michigan corporation; and
PRINTPAL, INC, an Oreogn
coorporation;
Defendants.
1 - OPINION AND ORDER
3:07-CV-896-BR
OPINION AND ORDER
DAVID W. AXELROD
DEVON ZASTROW NEWMAN
Schwabe, Williamson & Wyatt, P.C.
Pacwest Center
1211 S.W. Fifth Ave, Suite 1900
Portland, OR 97204
(503) 222-9981
HAROLD A. BARZA
J.D. HORTON
JAMES STEIN
JOSEPH M. PAUNOVICH
RYAN S. GOLDSTEIN
TIGRAN GULEDJIAN
VALERIE RODDY
JUSTIN BROWNSTONE
LANCE YANG
RACHAEL MCCRACKEN
Quinn Emanuel Urquhart Oliver & Hedges, LLP
865 South Figueroa Street, 10th Floor
Los Angeles, CA 90017-2543
(213) 624-7707
Attorneys for Plaintiffs Seiko Epson Corporation;
Epson America, Inc.; and Epson Portland, Inc.
LEI MEI
Mei & Mark LLP
1050 Connecticut Ave. N.W., 10th Floor
Washington D.C. 20036
(202) 256-1008
SETH H. ROW
Parsons Farnell & Grein LLP
1030 S.W. Morrison St
Portland, OR 97205
(503) 222-1812
ELIZABETH H. RADER
YITAI HU
Alston & Bird LLP
275 Middlesex Road, Ste 150
Menlo Park, CA 94025
(650) 838-2000
Attorneys for Defendants Ninestar Technology
Co. Ltd (formerly Ninestar Image Co. Ltd.);
Ninestar Technology Company, Ltd.; and
Dataproducts USA, LLC
2 - OPINION AND ORDER
BROWN, Judge.
This matter comes before the Court on the Motion (#179) for
Partial Summary Judgment of Unenforceability of U.S. Patent Nos.
6,502,917 (‘917 Patent) and 6,550,902 (‘902 Patent) for
Inequitable Conduct filed by Defendants Ninestar Technology
Company, Ltd.; Ninestar Technology Co. Ltd; and Dataproducts USA,
LLC (collectively referred to as Ninestar) and the Cross-Motion
(#204) for Partial Summary Judgment of No Inequitable Conduct or
Walker Process Fraud filed by Plaintiffs Seiko Epson Corporation;
Epson America, Inc.; and Epson Portland, Inc. (collectively
referred to as Epson).1
For the following reasons, the Court DENIES Ninestar’s
Motion and GRANTS Epson’s Cross-Motion.
STANDARDS
I.
Summary Judgment.
Summary judgment is appropriate when “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”
Washington Mut. Ins. v. United
States, 636 F.3d 1207, 1216 (9th Cir. 2011).
See also Fed. R.
Civ. P. 56(a).
1
Identical Motions and Cross-Motions are pending in related
cases 06-CV-236-BR, 06-CV-477-BR, 08-CV-452-BR, and 09-CV-477-BR.
3 - OPINION AND ORDER
The moving party must show the absence of a dispute as to a
material fact.
Rivera v. Philip Morris, Inc., 395 F.3d 1142,
1146 (9th Cir. 2005).
In response to a properly supported motion
for summary judgment, the nonmoving party must go beyond the
pleadings and show there is a genuine dispute as to a material
fact for trial.
Id.
A dispute as to a material fact is genuine "if the evidence
is such that a reasonable jury could return a verdict for the
nonmoving party."
Villiarimo v. Aloha Island Air, Inc., 281 F.3d
1054, 1061 (9th Cir. 2002)(quoting Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986)).
The court must draw all
reasonable inferences in favor of the nonmoving party.
v. Verity, Inc., 606 F.3d 584, 587 (9th Cir. 2010).
Sluimer
"Summary
judgment cannot be granted where contrary inferences may be drawn
from the evidence as to material issues."
Easter v. Am. W. Fin.,
381 F.3d 948, 957 (9th Cir. 2004)(citing Sherman Oaks Med. Arts
Ctr., Ltd. v. Carpenters Local Union No. 1936, 680 F.2d 594, 598
(9th Cir. 1982)).
A “mere disagreement or bald assertion” that a genuine
dispute as to a material fact exists “will not preclude the grant
of summary judgment.”
Deering v. Lassen Cmty. Coll. Dist., No.
2:07-CV-1521-JAM-DAD, 2011 WL 202797, at *2 (E.D. Cal., Jan. 20,
2011)(citing Harper v. Wallingford, 877 F.2d 728, 731 (9th Cir.
4 - OPINION AND ORDER
1987)).
See also Jackson v. Bank of Haw., 902 F.2d 1385, 1389
(9th Cir. 1990).
When the nonmoving party's claims are factually
implausible, that party must "come forward with more persuasive
evidence than otherwise would be necessary."
LVRC Holdings LLC
v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009)(citing Blue Ridge
Ins. Co. v. Stanewich, 142 F.3d 1145, 1149 (9th Cir. 1998)).
The substantive law governing a claim or a defense determines
whether a fact is material.
Miller v. Glenn Miller Prod., Inc.,
454 F.3d 975, 987 (9th Cir. 2006).
If the resolution of a
factual dispute would not affect the outcome of the claim, the
court may grant summary judgment.
II.
Id
Inequitable Conduct.
“Inequitable conduct is an equitable defense to patent
infringement that, if proved, bars enforcement of a patent.”
Therasense Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1285
(Fed. Cir. 2011)(en banc ).
“‘In a case involving nondisclosure
of information, clear and convincing evidence must show that the
applicant made a deliberate decision to withhold a known material
reference.’”
Id. at 1290 (emphasis in original)(citing Molins
PLC v. Textron, Inc., 48 F.3d 1172, 1181 (Fed. Cir. 1995)).
Thus, “the accused infringer must prove by clear and convincing
evidence that the applicant knew of the reference, knew that it
was material, and made a deliberate decision to withhold it.”
5 - OPINION AND ORDER
Therasense, Inc., 649 F.3d at 1290.2
A "material reference" is one that a "reasonable examiner
would consider . . . important [in considering] the patent
application."
Cir. 2007).
Cargill v. Canbra Foods, 476 F.3d 1359, 1364 (Fed.
In Therasense the court explained the materiality
requirement as follows:
The materiality required to establish
inequitable conduct is but-for materiality.
When an applicant fails to disclose prior art
to the PTO [Patent and Trademark Office],
that prior art is but-for material if the PTO
would not have allowed a claim had it been
aware of the undisclosed prior art. Hence,
in assessing the materiality of a withheld
reference, the court must determine whether
the PTO would have allowed the claim if it
had been aware of the undisclosed reference.
649 F.3d at 1291.
When deciding the question of materiality, the
court applies “the preponderance of evidence standard and gives
claims their broadest possible reasonable construction.”
Id. at
1291-92.
An “accused infringer must prove that the patentee acted
with the specific intent to deceive the PTO.”
Id. at 1290.
Although the court “may infer intent from indirect and
circumstantial evidence, [] the specific intent to deceive must
2
The Federal Circuit “tightened the standards for finding
both intent and materiality in order to redirect a doctrine that
has been overused to the detriment of the public” and has
resulted in an “absolute plague” that is “cluttering up” the
patent system and “spawning antitrust and unfair competition
[Walker Process] claims.” Id. at 1289 (internal citations
omitted).
6 - OPINION AND ORDER
be ‘the single most reasonable inference able to be drawn from
the evidence.’”
Id. (internal citations omitted).
Thus, “the
evidence “must be sufficient to require a finding of deceitful
intent in the light of all the circumstances.” Id. at 1290-91
(internal citations omitted; emphasis in original).
“Intent and materiality are separate requirements.”
1290.
Id. at
The court, therefore, “should not use a ‘sliding scale,’
where a weak showing of intent may be found sufficient based on
a strong showing of materiality, and vice versa.
Moreover, a
district court may not infer intent solely from materiality.”
Id.
Accordingly, “[p]roving that the applicant knew of a
reference, should have known of its materiality, and decided not
to submit it to the PTO does not prove specific intent to
deceive.”
Id.
Walker Process Fraud3
III.
“[E]nforcement of a patent procured by fraud on the Patent
Office may be violative of § 2 of the Sherman Act provided the
3
The Court previously stayed and bifurcated further
proceedings relating directly to antitrust issues such as the
anticompetitive aspects of Ninestar’s Walker Process Fraud
Counterclaim. Those issues would have been resolved in a later
proceeding if Ninestar had prevailed on its claims that
Plaintiffs engaged in fraudulent conduct before the United States
Patent and Trademark Office in obtaining the ‘917 and ‘902
Patents. Because, however, the Court is denying Ninestar’s
Motion for Summary Judgment and granting Epson’s Cross-Motion,
the Court’s Order (#231) staying and bifurcating this issue is
now moot.
7 - OPINION AND ORDER
other elements necessary to a § 2 case are present.”
Walker
Processing Equip., Inc. v. Food Mach. and Chem. Corp., 382 U.S.
172, 174 (1965).
To prevail on a Walker Process fraud claim,4
the claimant must prove “the patent [was] obtained through actual
fraud” on the USPTO.
Dippin’ Dots v. Mosey, 476 F.3d 1337, 1346
(Fed. Cir. 2007).
DISCUSSION
The pending cross-motions raise the question whether there
is any triable issue that Epson engaged in inequitable conduct
and/or Walker Process fraud before the United States Patent and
Trademark Office (USPTO) in 2000 when it applied for and was
granted the ‘902 Patent5 and the ‘917 Patent and in 2007 when the
USPTO reexamined those patents.
I.
Ninestar’s Motion for Partial Summary Judgment.
Ninestar seeks summary judgment that Epson’s ‘902 Patent and
‘917 Patent are unenforceable based on Epson’s inequitable
conduct and fraud in prosecuting those patents before the USPTO.
According to Ninestar, Epson failed in January 2000 to
disclose in its ‘902 Patent and ‘917 Patent applications prior
5
Epson’s application for the ‘902 Patent was filed as a
divisional application of the application that later became the
‘917 Patent. Accordingly, the Court’s discussion of and ruling
as to the ‘917 Patent applies in all respects to the ‘902 Patent.
8 - OPINION AND ORDER
art reflected in Epson’s earlier WO ‘352 Application to the
German Patent Office, which ultimately became U.S. Patent No.
6,102,517 (‘517 Patent aka “Kobayashi”).
Ninestar asserts the ‘517 Patent as described in the WO ‘352
Application depicts an arrangement of contacts on an ink
cartridge that allows electrical communication with the printer
apparatus.
Epson’s ‘917 Patent involves rearrangement of those
contacts in rows to solve a rocking problem.
According to
Ninestar, Epson knew its earlier WO ‘352 Application to the
German Patent Office and the resulting issuance of the ‘517
Patent by the USPTO based on information contained in the WO ‘352
Application were “highly material” to Epson’s ‘917 Patent
application to the USPTO because the German Patent Office had
previously rejected claims of a German counterpart to the ‘917
Patent based on Epson’s prior WO ‘352 Application.
In addition, Ninestar contends after the USPTO granted ex
parte reexamination of the ‘917 and ‘902 Patents to evaluate
whether they were invalid for obviousness, Epson submitted
inventor Shinada’s declaration purporting to solve a “rocking”
problem associated with the arrangement of the print-cartridge
contacts relative to the printer apparatus.
Ninestar asserts
Epson included as part of Shinada’s declaration only the Japanese
language version of its earlier WO ‘352 Application previously
filed in the German Patent Office.
9 - OPINION AND ORDER
Ninestar argues Epson’s
failure to provide an English-language translation of the
alleged prior art described in the WO ‘352 Application during
the reexamination indicates Epson intended to conceal from the
USPTO information regarding that prior art.
Ninestar also maintains Epson’s nondisclosure was material
because on reexamination of Epson’s ‘917 Patent, the examiner
finally had an opportunity to read the English-language version
of the WO ‘352 Application and cancelled claims 17-22 of the ‘917
Patent after doing so.
Based on this chain of events, Ninestar contends there is
not a genuine dispute of material fact that Epson’s failure to
disclose a fully-translated English version of to the USPTO was
material to the issuance of the ‘917 Patent.
In Semiconductor Energy Lab. Co., Ltd. V. Samsung Elec. Co.,
Ltd, the court addressed a patent applicant’s duty regarding
disclosure of foreign references:
The duty of candor does not require that the
applicant translate every foreign reference,
but only that the applicant refrain from
submitting partial translations and concise
explanations that it knows will misdirect the
examiner's attention from the reference's
relevant teaching.
204 F.3d 1368, 1378 (Fed. Cir. 2000)(emphasis added).
Thus, Ninestar contends Epson’s intentional failure to
disclose the material information that it had already solved the
alleged “side-by–side rocking problem” in its ‘517 Patent as
10 - OPINION AND ORDER
reflected in the WO ‘352 Application was not in keeping with its
duty of candor, thereby rendering the ‘917 Patent invalid based
on inequitable conduct.
Moreover, Ninestar asserts Epson’s
conduct rises to a level of fraud sufficient to constitute Walker
Process fraud.
II.
Epson’s Cross-Motion for Partial Summary Judgment.
Epson seeks summary judgment as a matter of law that Epson
did not engage in inequitable conduct or Walker Process fraud in
either the original prosecutions of the ‘917 and ‘902 Patents6
before the USPTO or during reexamination of the ‘917 Patent.
Epson acknowledges Epson disclosed the WO ‘352 Application
for the ‘517 Patent to the USPTO in its Japanese form accompanied
by an English-language abstract in a Supplemental Information
Disclosure Statement submitted to the USPTO during the course
of the ‘917 Patent reexamination.
In addition, Epson points
out that the examiner also had available an English-language
translation of a German Patent Office action in which claims of
a counterpart application to the ‘917 Patent based on the WO ‘352
Application were rejected.
In light of these undisputed facts, Gerald Murch, Epson’s
expert, opined that even if Epson had provided a complete English
6
As noted, Epson’s application for the ‘902 Patent was filed
as a divisional application of the application that later became
the ‘917 Patent. Accordingly, the Court’s discussion of and
ruling as to the ‘917 Patent applies in all respects to the ‘902
Patent.
11 - OPINION AND ORDER
translation of the WO ‘352 Application to the USPTO, the
translation would have been cumulative of the above information
that Epson had already provided to the examiner.
¶¶ 229-37.
Murch Decl. at
See also Leviton Mfg. Co., Inc. V. Universal Sec.
Instr., Inc., 606 F.3d 1353, 1359 (Fed. Cir. 2010)(“[A] withheld
otherwise material reference is not material if it is merely
cumulative to, or less relevant than, information already
considered by the examiner.”).
III. Analysis
The undisputed record reflects Epson disclosed to the USPTO
an English translation of the abstract for the ‘517 Patent
Application.
In addition, the record reflects the USPTO had
available a fully-translated counterpart application to the ‘917
Patent and the ‘902 Patent.
Accordingly, Ninestar’s reliance on
Semiconductor Energy to support its fraud argument is misplaced
because in that case the court found the untranslated parts of a
prior foreign patent application were material to patentability
and were not cumulative.
The Court concludes a complete English
translation of the WO ‘352 Application would have been cumulative
of the information that Epson had already provided to the
examiner.
Viewing the record in the light most favorable to Ninestar,
the Court concludes no reasonable juror could find that Epson had
“the specific intent to deceive” the Patent Examiner regarding
12 - OPINION AND ORDER
the prior art relating to the ‘917 Patent and the ‘902 Patent or
that an intent to deceive was “the single most reasonable
inference able to be drawn from the evidence.”
See Therasense,
649 F.3d at 1290.
CONCLUSION
For these reasons the Court DENIES the Motion (#179) for
Partial Summary Judgment of Unenforceability of U.S. Patent Nos.
6,502,917 (‘917 Patent) and 6,550,902 (‘902 Patent) for
Inequitable Conduct filed by Defendants Ninestar Technology
Company, Ltd.; Ninestar Technology Co. Ltd; and Dataproducts USA,
LLC, and GRANTS the Cross-Motion (#204) for Partial Summary
Judgment of No Inequitable Conduct or Walker Process Fraud filed
by Plaintiffs Seiko Epson Corporation; Epson America, Inc.; and
Epson Portland, Inc.
IT IS SO ORDERED.
DATED this 10th day of November, 2011.
/s/ Anna J. Brown
ANNA J. BROWN
United States District Judge
13 - OPINION AND ORDER
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