FLIR Systems, Inc. v. Gambaro et al
Filing
129
ORDER: The Court DENIES Defendant MKC's Motion 82 to Dismiss or, in the Alternative, For Summary Judgment. The Court also DENIES MKC's alternative request for the Court to stay this matter as to Flir's claims against MKC, bu t grants MKC leave to raise these arguments at an appropriate time after discovery is completed. The Court GRANTS Plaintiff Flir's Motion 86 for Partial Summary Judgment and precludes Gambaro and MKC from relitigating in this action the relev ant claim constructions from the Prior Action. Plaintiff shall provide Defendants with a proposed plan no later than 4/26/2011; defendants shall provide Plaintiff's counsel no later than 5/6/2011, their proposed case-management plan. Plaintiff 039;s counsel then shall provide the Court with a summary of the proposals no later than 5/13/2011, after which the Court will set a scheduling conference. See 23 page Opinion and Order for full text. Signed on 04/18/2011 by Judge Anna J. Brown. (bb)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
FLIR SYSTEMS, INC.,
10-CV-231-BR
Plaintiff,
OPINION AND ORDER
v.
MOTIONLESS KEYBOARD COMPANY,
an Oregon corporation, and
THOMAS L. GAMBARO, an
individual,
Defendants.
FAROOQ A. TAYAB
MICHAEL J. COLLINS
WILLIAM A. BREWER, III
Bickel and Brewer
4800 Comerica Bank Tower
1717 Main Street
Dallas, TX 75201
(214) 653-4000
SUSAN D. MARMADUKE
SIVHWA GO
Harrang Long Gary Rudnick, PC
1001 S.W. Fifth Avenue, Suite 1650
Portland, OR 97204-1116
(503) 242-0000
Attorneys for Plaintiff
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OPINION AND ORDER
THOMAS L. GAMBARO
P.O. Box 14741
Portland, OR 97293
(503) 544-0589
Defendant, Pro Se
JAMES L. BUCHAL
Murphy & Buchal, LLP
2000 S.W. First Avenue, Suite 320
Portland, OR 97201
(503) 227-1011, ext. 2
Attorneys for Defendant Motionless Keyboard Company
BROWN, Judge.
This matter comes before the Court on the Motion (#82) of
Defendant Motionless Keyboard Company (MKC) to Dismiss or, in the
Alternative, for Summary Judgment and on the Motion (#86) for
Partial Summary Judgment of Plaintiff Flir Systems, Inc.
The
Court has jurisdiction over this matter pursuant to 28 U.S.C. §
1331.
For the reasons that follow, the Court DENIES MKC’s Motion
(#82) to Dismiss or, in the Alternative, for Summary Judgment and
GRANTS Flir’s Motion (#86) for Partial Summary Judgment.
PROCEDURAL BACKGROUND
On March 1, 2010, Plaintiff filed its Complaint in response
to several letters from Defendant Thomas L. Gambaro (issued on
MKC letterhead) asserting numerous instances of Plaintiff’s
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OPINION AND ORDER
alleged infringement of United States Patent No. 5,332,322 (‘322
Patent).
On April 29, 2010, Plaintiff filed its Amended
Complaint (#15) in which Plaintiff seeks a declaration by this
Court that Plaintiff has not infringed the ‘322 Patent, that the
‘322 Patent is invalid, and that the ‘322 Patent is unenforceable
due to patent misuse.
On April 8, 2010, Gambaro filed an Answer (#11) on behalf
of himself (i.e., appearing pro se) and on behalf of MKC.
On
April 29, 2010, Flir filed a Motion (#14) to Strike the Answer
with respect to MKC on the ground that a corporation must be
represented by an attorney in federal court.
At a hearing on
that Motion, the Court granted the Motion to Strike with respect
to MKC and informed Gambaro that MKC must be represented by
counsel to defend itself in this matter.
On August 12, 2010,
attorney James L. Buchal filed an appearance on behalf of MKC.
On September 17, 2010, MKC filed its Motion to Dismiss or, in the
Alternative, for Summary Judgment and Plaintiff filed its Motion
for Partial Summary Judgment.
On January 12, 2011, the Court heard argument on, inter
alia, MKC’s Motion to Dismiss and Flir’s Motion for Partial
Summary Judgment.
At the hearing, the Court directed the parties
to confer as to whether MKC should remain as a defendant in this
matter and, if not, whether the parties could reach an agreement
to dismiss MKC.
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The parties, however, could not reach an
OPINION AND ORDER
agreement, and the Court took both Motions under advisement.
FACTUAL BACKGROUND
On July 26, 1994, the ‘322 Patent was issued to Gambaro, an
Oregon resident, as the sole inventor.
The ‘322 Patent covers a
hand-grippable device that frees the thumb to actuate keys in
multiple and different ways.
MKC was formed in February 1997 as an Oregon corporation in
which Gambaro was an officer and a significant shareholder.
On
September 17, 1997, Gambaro assigned the ‘322 Patent to MKC.
On February 9, 2004, MKC filed a complaint in this Court for
infringement of the ‘322 Patent against Microsoft Corporation;
Saitek Industries, Ltd.; and Nokia, Inc., No. 04-CV-180-AA (Prior
Action).
In the Prior Action, Chief Judge Ann Aiken construed
the terms of the ‘322 Patent.
See Motionless Keyboard Co. v.
Microsoft, No. 04-CV-180-AA, 2005 WL 1113818, at *13-*20 (D. Or.
May 6, 2005).
Chief Judge Aiken’s claim construction was upheld
on appeal to the United States Federal Circuit Court of Appeals.
Motionless Keyboard Co. v. Microsoft, 486 F.3d 1376, 1380-82
(Fed. Cir. 2007).
Although not a party in the Prior Action, Gambaro
participated in the proceedings; was deposed in his individual
capacity and as a representative of MKC; attended the Markman
hearing on the claim construction; submitted four declarations,
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OPINION AND ORDER
three affidavits, and numerous additional filings; and also filed
an entry of appearance in the appeal.
Although Gambaro attests MKC was dissolved by a majority
vote of MKC’s shareholders in May 2005, MKC was administratively
dissolved by the State of Oregon on
April 11, 2008.
Beginning in November 2009, Gambaro sent several
infringement letters to Flir on MKC letterhead despite MKC’s
dissolution.
On March 30, 2010, Gambaro registered the assumed business
name “Patent Enforcement Company” with the State of Oregon.
It
appears on this record that MKC remained the record owner of the
‘322 Patent until March 31, 2010, when MKC purportedly assigned
the ‘322 Patent to Patent Enforcement Company.
The ‘322 Patent expired on January 12, 2010.
MKC’S MOTION (#82) TO DISMISS OR, IN THE ALTERNATIVE,
FOR SUMMARY JUDGMENT
MKC seeks to be dismissed as a party in this matter on the
ground that it is a dissolved corporation without any interest in
the ‘322 Patent, and, therefore, its participation in this matter
is not required.
I.
Standards.
To survive a motion to dismiss, a complaint
must contain sufficient factual matter,
accepted as true, to “state a claim to relief
that is plausible on its face.” [Bell
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Atlantic v. Twombly, 550 U.S. 554,] 570, 127
S. Ct. 1955. A claim has facial plausibility
when the plaintiff pleads factual content
that allows the court to draw the reasonable
inference that the defendant is liable for
the misconduct alleged. Id. at 556. . . .
The plausibility standard is not akin to a
“probability requirement,” but it asks for
more than a sheer possibility that a
defendant has acted unlawfully. Ibid. Where
a complaint pleads facts that are “merely
consistent with” a defendant's liability, it
“stops short of the line between possibility
and plausibility of ‘entitlement to relief.’”
Id. at 557, 127 S. Ct. 1955 (brackets
omitted).
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009).
Atlantic v. Twombly, 550 U.S. 554, 555-56 (2007).
See also Bell
When
considering a motion to dismiss, the court must accept as true
the allegations in the complaint and construe them in favor of
the plaintiff.
Intri-Plex Tech., Inc. v. Crest Group, Inc., 499
F.3d 1048, 1050 n.2 (9th Cir. 2007).
"The court need not accept
as true, however, allegations that contradict facts that may be
judicially noticed by the court."
Shwarz v. United States, 234
F.3d 428, 435 (9th Cir. 2000)(citations omitted).
Rule 12(b)(6) provides:
[When] matters outside the pleading are
presented to and not excluded by the court,
the motion shall be treated as one for
summary judgment and disposed of as provided
in Rule 56, and all parties shall be given
reasonable opportunity to present all
material made pertinent to such a motion by
Rule 56.
There are two exceptions to this rule:
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OPINION AND ORDER
The court may
consider documents properly attached to the Complaint and
documents that are subject to judicial notice because their
authenticity cannot be questioned.
Lee v. City of Los Angeles,
250 F.3d 668, 688-89 (9th Cir. 2001).
II.
Discussion.
MKC maintains it has been a dissolved corporation at all
times relevant to this action, has not held title to the ‘322
Patent, and has not owned any assets.
In particular, MKC argues
Gambaro’s threats to bring infringement claims against Flir began
in 2009 and could not have been made on MKC’s behalf because MKC
had already been dissolved.
Although MKC asserts any assets of
the corporation were transferred to Gambaro when MKC was
administratively dissolved by the State of Oregon on April 11,
2008, the Court notes this contention is contradicted by
Gambaro’s statement that MKC voted to dissolve itself in 2005.
In any event, MKC asserts any judgment against MKC would merely
amount to a judgment against Gambaro.
Ultimately MKC contends
Flir is aware Gambaro cannot afford counsel for MKC and that
Flir’s motive in opposing MKC’s Motion is to obtain a default
judgment against MKC.
MKC, therefore, urges the Court to dismiss
MKC or, in the alternative, to stay the proceedings against MKC
on the ground that MKC will stipulate to be bound by any judgment
against Gambaro.
Flir, in turn, contends there are disputes of fact as to the
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OPINION AND ORDER
ownership of the ‘322 Patent and as to MKC’s potential to assert
infringement claims against Flir under the ‘322 Patent that
preclude dismissal of MKC at this stage of the litigation.
Flir
reiterates the infringement letters it received from Gambaro were
on MKC letterhead and, therefore, Gambaro’s letters raise the
specter of claims by MKC against Flir, which Flir seeks to
resolve in this action.
In at least one letter, for example,
Gambaro suggests settling this matter “between our companies.”
In addition, Flir notes the letters contain accusations of
infringement of the ‘322 Patent dating back to late 2004 when MKC
was still in business and the owner of the ‘322 Patent.
Moreover, in his letter of January 15, 2010, Gambaro informed
Flir that its refusal to settle the matter could lead to a jury
trial and “possibly a test case that may be known as Motionless
v. FLIR, et all [sic],” suggesting claims by MKC against Flir
exist.
Despite Gambaro's claim that he acquired the ‘322 Patent in
an assignment from MKC in 2005 for nominal consideration, Flir
notes MKC's Exhibit 3 in support of its Motion shows MKC as the
assignor of the ‘322 Patent to Patent Enforcement Company in
March 2010.
Flir also points out that MKC stated in its opening
brief on appeal of the Prior Action to the Federal Circuit that
MKC and Gambaro voided the purported 2005 assignment of the ‘322
Patent from MKC to Gambaro after Chief Judge Aiken ruled Gambaro
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OPINION AND ORDER
could not intervene in the Prior Action on that basis.
Thus,
according to Flir, because Gambaro threatened Flir with patent
infringement five years prior to November 2009, disputes of fact
remain as to whether MKC was an owner of the ‘322 Patent during
some or all of that period.
Flir emphasizes Oregon law does not prevent lawsuits by or
against a dissolved corporation.
Or. Rev. Stat. § 60.637(2)(e)
("Dissolution of a corporation does not . . . [p]revent
commencement of a proceeding by or against the corporation in its
corporate name.").
See also Or. Rev. Stat. § 60.645.
Thus, Flir
contends MKC could lawfully bring claims against Flir even after
it was dissolved, and Flir may properly assert claims against MKC
in this matter despite it dissolution.
Finally, Flir objects to paragraphs four, five, and six of
Buchal's Declaration in support of MKC’s Motion for lack of
personal knowledge and to paragraphs five and six as inadmissible
settlement discussions.
Flir also objects to paragraph two of
Gambaro's Declaration as merely self-serving and to paragraph
five as irrelevant.
The Court concludes it is not necessary to
resolve these objections because this evidence does not alter the
Court’s conclusion that MKC’s Motion should be denied.
The Court notes discovery in this matter has been stayed
pending resolution of these Motions, and Flir has not had the
opportunity to fully investigate the ‘322 Patent ownership
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OPINION AND ORDER
issues, the purported transfers of assets between Defendants, or
the corporate dissolution of MKC.
Without discovery and
depositions, Flir contends it cannot determine whether Gambaro's
statements about the dissolution of MKC and the subsequent
transfer of the ‘322 Patent and other MKC assets are true.
In
summary, Flir contends it has provided sufficient evidence on
this record to warrant a denial of MKC’s Motion whether it is
considered to be a Motion to Dismiss or a Motion for Summary
Judgment.
The Court is satisfied Flir has set out sufficient facts in
the record to state a plausible claim for declaratory relief
against MKC.
The Court also concludes there are disputes of fact
with respect to Flir’s action for declaratory relief against MKC
concerning, inter alia, whether MKC transferred the ‘322 Patent
to Gambaro in 2005 and whether MKC was the owner of the ‘322
Patent until March 2010.
There are also issues that cannot be
resolved conclusively on this record such as the chain of title
for the ‘322 Patent, the nature of MKC's dissolution, and the
distribution of MKC’s assets on dissolution.
Thus, the Court
cannot conclusively determine whether MKC was an owner of the
‘322 Patent during the period that Gambaro asserts Flir infringed
the ‘322 Patent.
Viewing the evidence in the light most
favorable to Flir, as the Court must for purposes of MKC’s
Motion, the Court concludes Flir has demonstrated at this stage
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OPINION AND ORDER
that disputes of material fact exist that preclude summary
judgment.
The Court, therefore, denies MKC’s Motion (#82) to the
extent that MKC presently seeks the dismissal of MKC as a
defendant or seeks summary judgment in MKC’s favor.
The same
reasoning also leads the Court to conclude that it is premature
to grant MKC’s alternative request to stay this action against
MKC.
Accordingly, the Court denies MKC’s alternative Motion to
stay as well.
FLIR’S MOTION (#86) FOR PARTIAL SUMMARY JUDGMENT
Flir moves for summary judgment on the ground that Gambaro
is bound by the preclusive effect of Chief Judge Aiken’s claims
construction of the ‘322 Patent in the Prior Action.
I.
Standards.
A.
Summary Judgment.
“Summary judgment is appropriate . . . if the pleadings, the
discovery, disclosure materials on file, and affidavits show that
there is no genuine dispute as to any material fact and that the
moving party is entitled to judgment as a matter of law.
Sprint
PCS Assets, L.L.C. v. City of Palos Verdes Estates, 583 F.3d 716,
720 (9th Cir. 2009)(citing Federal Rule of Civil Procedure 56).
The moving party must show the absence of a dispute as to any
material fact.
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Rivera v. Philip Morris, Inc., 395 F.3d 1142,
OPINION AND ORDER
1146 (9th Cir. 2005).
In response to a properly supported motion
for summary judgment, the nonmoving party must go beyond the
pleadings to show there is a genuine dispute as to a material
fact.
Id.
A fact is in genuine dispute "'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.
Id.
"Summary
judgment cannot be granted where contrary inferences may be drawn
from the evidence” as to material facts.
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 (9th
Cir. 1982)).
If the nonmoving party's claims are factually implausible,
however, that party must "come forward with more persuasive
evidence than otherwise would be necessary."
Wong v. Regents of
Univ. of Cal., 379 F.3d 1097 (9th Cir. 2004), as amended by 410
F.3d 1052, 1055 (9th Cir. 2005)(citing Blue Ridge Ins. Co. v.
Stanewich, 142 F.3d 1145, 1149 (9th Cir. 1998)).
B.
Preclusion.
After “an issue is actually and necessarily determined by a
court of competent jurisdiction, that determination is conclusive
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in subsequent suits based on a different cause of action
involving a party to the prior litigation.”
Montana v. U.S., 440
U.S. 147, 153 (1979).
The Supreme Court recently discussed the concept of
preclusion at length in Taylor v. Sturgell, 553 U.S. 880 (2008).
In Taylor Justice Ginsburg provides significant clarity to this
area of federal common law.
Justice Ginsburg noted the often
confusing lexicon for preclusion and disfavored terms such as
collateral estoppel, direct estoppel, merger, bar, and privity.
Id. at 892-94.
The Court defined claim and issue preclusion and
their purposes as follows:
The preclusive effect of a judgment is
defined by claim preclusion and issue
preclusion, which are collectively referred
to as “res judicata.” Under the doctrine of
claim preclusion, a final judgment forecloses
“successive litigation of the very same
claim, whether or not relitigation of the
claim raises the same issues as the earlier
suit.” New Hampshire v. Maine, 532 U.S. 742,
748, 121 S. Ct. 1808, 149 L. Ed. 2d 968
(2001). Issue preclusion, in contrast, bars
“successive litigation of an issue of fact or
law actually litigated and resolved in a
valid court determination essential to the
prior judgment,” even if the issue recurs in
the context of a different claim. Id., at
748-749, 121 S. Ct. 1808. By “preclud[ing]
parties from contesting matters that they
have had a full and fair opportunity to
litigate,” these two doctrines protect
against “the expense and vexation attending
multiple lawsuits, conserv[e] judicial
resources, and foste[r] reliance on judicial
action by minimizing the possibility of
inconsistent decisions.” Montana v. United
States, 440 U.S. 147, 153-154, 99 S. Ct. 970,
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59 L. Ed. 2d 210 (1979).
Id. at 892.
Here Flir seeks to apply issue preclusion to Gambaro, a
party in this matter who was not a party to the Prior Action.
In
general, a person who is not a party to an action has not had a
full and fair opportunity to litigate the issues in that action
and, therefore, is generally not bound by a decision in such a
case.
Id. at 892-93.
The Supreme Court in Taylor, however, set
out six categories of exceptions to the general rule that permits
preclusion as against nonparties:
(1) a nonparty agrees to be
bound by a determination between other parties, (2) a nonparty is
bound on the basis of a pre-existing substantive legal
relationship between the nonparty and a party to the decision,
(3) a nonparty is adequately represented in the prior action, (4)
a nonparty is bound by a prior decision if he “assumed control”
of the litigation in which that decision was rendered, (5) a
nonparty to the first action brings a suit on behalf of a party
to the original action, and (6) a nonparty may be bound under
certain statutory schemes that foreclose successive litigation by
nonparties.
Id. at 893-95.
Flir contends the second and fourth of these categories of
exceptions justify application of issue preclusion against
Gambaro as to the claim construction of the ‘322 Patent by Chief
Judge Aiken in the Prior Action.
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II.
Discussion.
Chief Judge Aiken construed Claims One through Five of the
‘322 Patent in the Prior Action.
Motionless Keyboard Co. v.
Microsoft, No. 04-CV-180-AA, 2005 WL 1113818, at *13-*20 (D. Or.
May 6, 2005).
Flir contends the Court’s ‘322 Patent construction
was “actually and necessarily determined” in the Prior Action.
See Montana, 440 U.S. at 153.
The portion of Chief Judge Aiken’s claim construction
pertinent to this action centers on Claim One and the form of the
keys on the handheld devices at issue in this case.
Chief Judge
Aiken set out Claim One of the ‘322 Patent in the Prior Action as
follows:
Claim One describes:
A handheld device for entering information
into an electronic system via a keyboard, the
device comprising:
a housing having a grippable portion
which permits the device to be held in
one hand with the thumb free to move at
least temporarily to a predetermined
key-actuation position while the device
is held,
a concavity in said housing at said
key-actuation position, and
a thumb-associable cluster of keys
forming a keyboard within said
concavity, each of the plurality of keys
in said cluster being selectively
actuable via mixed lateral and slight
endo, translation of a thumb within said
concavity, whereby information is
entered into an electronic system.
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Motionless Keyboard Co., 2005 WL 1113818, at *14.
In Claim One
Chief Judge Aiken also described the limitation of “concavity” as
follows:
I construe this phrase to mean that the
concavity must be formed by a depression in
the housing of the device, and that all keys
comprising the keyboard must be contained
entirely within the concave area and sunk
below the surface of the housing, so that the
thumb movement occurs within the concave
area.
Id., at *19.
As noted, Flir contends the second and fourth Taylor
exceptions support issue preclusion against Gambaro because of
Gambaro’s status as MKC’s assignee of the ‘322 Patent.
In Taylor
the Court elaborated on this exception:
[N]onparty preclusion may be justified based
on a variety of pre-existing “substantive
legal relationship[s]” between the person to
be bound and a party to the judgment. Shapiro
78. See also Richards, 517 U.S., at 798, 116
S. Ct. 1761. Qualifying relationships
include, but are not limited to, preceding
and succeeding owners of property, bailee and
bailor, and assignee and assignor. See 2
Restatement §§ 43-44, 52, 55. These
exceptions originated “as much from the needs
of property law as from the values of
preclusion by judgment.” 18A C. Wright, A.
Miller, & E. Cooper, Federal Practice and
Procedure § 4448, p. 329 (2d
ed.2002)(hereinafter Wright & Miller).
553 U.S. at 894.
Thus, Flir argues Gambaro’s position as
successor/assignee of the ‘322 Patent justifies precluding
Gambaro from relitigating in this case Chief Judge Aiken’s claim
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OPINION AND ORDER
construction in the Prior Action.
According to the Federal
Circuit, assignees of the same property that has been subject to
a judicial ruling are bound by such rulings.
Int’l Nutrition Co.
v. Horphag Research, Ltd., 220 F.3d 1325, 1329 (Fed. Cir. 2000).
Flir also contends Gambaro’s control over the Prior Action
satisfies Taylor’s fourth category of exceptions and justifies
precluding Gambaro from relitigating in this case the claim
construction from the Prior Action.
In Taylor the Supreme Court
held when “a person had ‘the opportunity to present proofs and
argument’, he has already ‘had his day in court’ even though he
was not a formal party to the litigation.”
(quoting Montana, 440 U.S. at 154).
553 U.S. at 895
In Montana the Supreme Court
held:
These interests are similarly implicated when
nonparties assume control over litigation in
which they have a direct financial or
proprietary interest and then seek to
redetermine issues previously resolved. As
this Court observed in Souffront v. Compagnie
des Sucreries, 217 U.S. 475, 486-487, 30 S.
Ct. 608, 612, 54 L. Ed. 846 (1910), the
persons for whose benefit and at whose
direction a cause of action is litigated
cannot be said to be “strangers to the
cause. . . . [O]ne who prosecutes or defends
a suit in the name of another to establish
and protect his own right, or who assists in
the prosecution or defense of an action in
aid of some interest of his own . . . is as
much bound . . . as he would be if he had
been a party to the record.” See Schnell v.
Peter Eckrich & Sons, Inc., 365 U.S. 260,
262,
n. 4, 81 S. Ct. 557, 559, 5 L. Ed. 2d
540 (1961); cf. Zenith Radio Corp. v.
Hazeltine Research, Inc., 395 U.S. 100, 111,
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89 S. Ct. 1562, 1570, 23 L. Ed. 2d 129
(1969).
440 U.S. at 154 (footnote omitted).
Flir emphasizes Gambaro’s significant participation in
depositions and briefing and at the hearings in the Prior Action.
Flir also notes Gambaro submitted declarations in support of
MKC’s motion for summary judgment on claim construction and in
support of MKC’s response to the defendants’ cross-motion for
summary judgment in the Prior Action.
In fact, Flir points out
that MKC’c counsel introduced Gambaro as “his client” in a
hearing before Chief Judge Aiken.
In addition, Flir contends MKC
and Gambaro’s financial and proprietary interests were precisely
aligned in the Prior Action because both sought to prove the
validity of the ‘322 Patent and that the defendants had infringed
the ‘322 Patent.
Gambaro begins his Response by defining “arbitrary and
capricious” and by discussing the concept of natural law versus
common law.
Gambaro relies on these concepts when he contends at
length that Chief Judge Aiken’s claim construction in the Prior
Action was erroneous, particularly with respect to the limitation
of “concavity.”
Gambaro argues, inter alia:
“This nonsequitur
ruling of Law exists within the realm of Law, however the ‘322
Patent operates within the Natural law or the law of nature that
is outside of the realm of the ruling of law and therefore the
'322 previous rulings do not apply or bind the Defendant,
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Inventor Thomas L. Gambaro.”
Gambaro also asserts the
construction of the ‘322 Patent in the Prior Action is erroneous
because Chief Judge Aiken did not handle the actual patented
articles when she construed the claims.
Chief Judge Aiken,
however, adhered to the long-standing principle that claims are
to be construed according to their language rather than in light
of the devices themselves.
See NeoMagic Corp. v. Trident
Microsystems, Inc., 287 F.3d 1062, 1074 (Fed. Cir. 2002).
See
also SRI Int’l v. Matsushida Elec. Corp. Of Am., 775 F.2d 1107,
1118 (Fed. Cir. 1985).
Finally, after the briefing on these Motions was closed and
the Court ordered the parties not to make any additional filings
until the Court ruled on these Motions, Gambaro nonetheless made
numerous unauthorized submissions, including most recently a
March 29, 2011, letter (#128) in which Gambaro makes several
additional substantive arguments as to why Chief Judge Aiken’s
claim construction in the Prior Action is invalid and should not
apply to the merits of this case.
As noted, however, that claim
construction became final when the Federal Circuit upheld it in
2007.
The issue in Flir’s Motion is not whether that claim
construction was correct--that question is now foreclosed by the
Federal Circuit’s decision.
The issue at the moment is whether
that claim construction must be imported to this case and whether
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Flir may assert it against Gambaro.
Accordingly, the Court has
repeatedly instructed Gambaro on this point and informed Gambaro
that he cannot rely on natural law as a means of undermining the
federal law that binds this Court.
In addition to his Response (#112), Gambaro also filed the
Declaration (#103) of Thomas L. Gambaro Supporting Motion for
Part Summary Judgment.
Although it is styled as a Declaration,
the Court construes this document as part of Gambaro’s Response
to Plaintiff’s Motion because it contains argument directed at
Flir’s Motion.
Gambaro contends in his Declaration that there
are disputes of fact that preclude Flir’s Motion for Partial
Summary Judgment.
Gambaro’s asserted disputes of material fact,
however, are either repetitions of his irrelevant arguments for
the invalidity of the claim construction in the Prior Action or
about the ultimate merits of this matter--i.e., whether Flir’s
devices infringe the ‘322 Patent--a question which will be
resolved later in this case.
Ultimately Gambaro does not address the specific question
before the Court concerning the application of the exceptions to
the general rule that issue preclusion does not operate to bind a
nonparty to a ruling in a prior proceeding set out in Taylor.
As noted, the construction of the ‘322 Patent is in
significant dispute in this matter, particularly the meaning of
the term “concavity” as it relates to the thumb-actuated keypads
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OPINION AND ORDER
on the devices of Flir and Gambaro.
Chief Judge Aiken’s
construction of those portions of the ‘322 Patent was essential
to the resolution of the infringement claims in the Prior Action
and was actually litigated and resolved in the District Court and
on appeal.
Thus, the Court concludes the threshold requirements
for the application of issue preclusion are met, and the Court
turns to a consideration of whether it is appropriate to preclude
Gambaro from relitigating in this action the ‘322 Patent claim
construction from the Prior Action under the second and fourth
exceptions set out by the Supreme Court.
See Taylor, 553 U.S. at
892.
A.
The Second Exception.
Although the Court has found there are genuine disputes of
fact as to the chain of title to the ‘322 Patent, particularly
with respect to MKC’s ownership, Flir has established and Gambaro
concedes that Gambaro is the record owner of the ‘322 Patent.
Thus, Gambaro is bound by the rulings in the Prior Action with
respect to the ‘322 Patent under the second exception set out by
the Supreme Court in Taylor by virtue of Gambaro’s succession to
that property.
See 553 U.S. at 894.
See also Int’l Nutrition
Co., 220 F.3d at 1329.
B.
The Fourth Exception.
Because Gambaro had the opportunity to “present proofs and
argument” in the Prior Action, participated significantly in
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those proceedings, had significant financial and proprietary
interests in both MKC and the ‘322 Patent, and directed the Prior
Action, the Court concludes Gambaro “actually controlled” the
litigation in the Prior Action.
Thus, the Court finds Gambaro is
also bound by the rulings in the Prior Action with respect to the
‘322 Patent under the fourth exception set out by the Supreme
Court in Taylor by virtue of his control over that litigation.
See 553 U.S. at 895.
See also Montana, 440 U.S. at 154.
In summary, the Court concludes the claim construction of
the terms of the ‘322 Patent disputed in this matter were
actually litigated and necessarily determined by Chief Judge
Aiken in the Prior Action, were subsequently upheld by the
Federal Circuit, and, under the second and fourth exceptinos, are
binding on Gambaro in this action.
Accordingly, the Court grants
Flir’s Motion for Partial Summary Judgment and orders that
Gambaro and MKC are precluded from relitigating any such
constructions in this action.
CONCLUSION
For these reasons, the Court DENIES Defendant MKC’s Motion
(#82) to Dismiss or, in the Alternative, For Summary Judgment.
The Court also DENIES MKC’s alternative request for the Court to
stay this matter as to Flir’s claims against MKC, but grants MKC
leave to raise these arguments at an appropriate time after
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discovery has been completed.
The Court GRANTS Plaintiff Flir’s Motion (#86) for Partial
Summary Judgment and precludes Gambaro and MKC from relitigating
in this action the relevant claim constructions from the Prior
Action.
FURTHER PROCEEDINGS
The Court directs Plaintiff to prepare a proposed casemanagement plan to include a plan and schedule for proposed
discovery and dispositive motion(s) on the merits of the claims
and defenses presently asserted in this action.
Plaintiff shall
provide Defendants with the proposed plan no later than April 26,
2011.
In turn, Defendants shall provide Plaintiff’s counsel no
later than May 6, 2011, their proposed case-management plan.
Plaintiff’s counsel then shall provide the Court with a
summary of the proposals no later than May 13, 2011, after which
the Court will set a scheduling conference.
IT IS SO ORDERED.
DATED this 18th day of April, 2011.
/s/ Anna J. Brown
ANNA J. BROWN
United States District Judge
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