LAMBETH MAGNETIC STRUCTURES, LLC v. SEAGATE TECHNOLOGY (US) HOLDINGS, INC et al
Filing
221
MEMORANDUM ORDER. For the reasons stated in the filing at this docket entry, Seagate's Motion for Summary Judgment (Doc. 150 ) is GRANTED in part as to lack of pre-suit damages accruing after Microsoft began selling products under its license t o the '988 patent, and DENIED in part as to inadequate written description and non-infringement. Lambeth's Motion for Summary Judgment against Seagate (Doc. 157 ) is GRANTED in part as to implied license, equitable estoppel, waiver, and un clean hands, and DENIED in part as to all remaining grounds. The parties' requests for oral argument are DENIED pursuant to the undersigned's Practices and Procedures, Section II.B. See contents of this filing. Signed by Judge Cathy Bissoon on 6/24/19. (rdl)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
LAMBETH MAGNETIC STRUCTURES, )
LLC,
)
)
Plaintiff,
)
)
v.
)
)
SEAGATE TECHNOLOGY (US)
)
HOLDINGS, INC., et al.,
)
)
Defendants.
)
Civil Action No. 16-538
Judge Cathy Bissoon
LAMBETH MAGNETIC STRUCTURES, )
LLC,
)
)
Plaintiff,
)
)
v.
)
)
WESTERN DIGITAL CORPORATION, )
et al.,
)
)
Defendants.
)
Civil Action No. 16-541
Judge Cathy Bissoon
MEMORANDUM ORDER
Pending before the Court are two sets of cross-motions for summary judgment in two
related patent infringement cases, Civil Action Nos. 16-538 and 16-541. For the reasons that
follow, all four motions will be granted in part and denied in part.
In Civil Action 16-538, Seagate Technology (US) Holdings, Inc. and Seagate Technology
LLC (collectively, “Seagate”) move for judgment of (1) invalidity of United States Patent No.
7,128,988 (the “ꞌ988 patent”) due to inadequate written description; (2) non-infringement of the
ꞌ988 patent by Seagate; and (3) lack of pre-suit damages. (Seagate’s Motion for Summary
Judgment, Civil Action No. 16-538, Doc. 150.) Plaintiff Lambeth Magnetic Structures, LLC
1
(“Lambeth”) moves for partial summary judgment in its favor on several of Seagate’s affirmative
defenses: (1) invalidity of the ꞌ988 patent; (2) Seagate’s equitable defenses (equitable estoppel,
laches, waiver, and unclean hands); (3) express or implied license, release, exhaustion and
double recovery; and (4) standing. (Lambeth’s Motion for Summary Judgment against Seagate,
Civil Action No. 16-538, Doc. 157.)
In Civil Action 16-541, Western Digital Corporation, Western Digital Technologies, Inc.,
Western Digital (Fremont), LLC, Western Digital (Thailand) Company Limited, Western Digital
(Malaysia) Sdn.Bhd and HGST, Inc. (collectively, “Western Digital”), move for judgment of
(1) non-infringement of the ꞌ988 patent by Western Digital; (2) invalidity of the ꞌ988 patent based
on lack of enablement; and (3) lack of pre-suit damages. (Western Digital’s Motion for
Summary Judgment, Civil Action 16-541, Doc. 158.) Lambeth moves also for partial summary
judgment in its favor on several of Western Digital’s affirmative defenses: (1) failure to comply
with the requirements of 35 U.S.C. §§ 102 (novelty), 103 (obviousness), and 116 (omission of
joint inventors) such that the ꞌ988 patent is invalid; (2) express or implied license; (3) standing;
and (4) Western Digital’s equitable defenses (laches and unclean hands). (Lambeth’s Motion for
Summary Judgment against Western Digital, Civil Action No. 16-541, Doc. 159; Lambeth’s
Brief in Support of Motion for Summary Judgment against Western Digital, “Lambeth’s MSJ
Brief Against Western Digital,” Civil Action No. 16-541, Doc. 173.)
2
BACKGROUND 1
The ꞌ988 patent 2 concerns an atomic structure for creating thin film magnetic materials
with desirable properties (specifically, uniaxial magnetic anisotropy, which the Court will define
shortly), and devices containing such materials. Thin film magnetic materials with uniaxial
magnetic anisotropy are useful in devices such as hard disk drives (“HDDs”) because they
facilitate reliably writing and reading data. Lambeth claims that Seagate and Western Digital
design and manufacture high performance HDDs that infringe the ꞌ988 patent by containing at
least one recording head made from the invented structure.
1
As the Court writes for the parties, the Court assumes familiarity with the procedural history of
this case, and the Court will address only those facts that are material to resolving the instant
motions. The Court draws facts from the following sources: Seagate’s Concise Statement of
Material Facts in Support of Summary Judgment (“Seagate’s SOF,” Civil Action No. 16-538,
Doc. 164) and the exhibits thereto (“Seagate’s SOF Exhibits,” Civil Action No. 16-538, Docs.
165-171) as well as Lambeth’s Response to Seagate’s SOF (Civil Action No. 16-538, Doc. 218)
and the exhibits thereto (“Lambeth’s Counter-SOF Exhibits against Seagate,” Civil Action No.
16-538, Doc. 218); Lambeth’s Concise Statement of Material Facts in Support of its Motion for
Summary Judgment (“Lambeth’s SOF against Seagate,” Civil Action No. 16-538, Doc. 173) and
the exhibits thereto (“Lambeth’s SOF Exhibits against Seagate,” Civil Action No. 16-538, Doc.
173) as well as Seagate’s Response to Lambeth’s SOF (Civil Action No. 16-538, Doc. 202) and
the exhibits thereto (“Seagate’s Counter-SOF Exhibits,” Civil Action No. 16-538, Docs. 202,
203); Western Digital’s Statement of Undisputed Facts in Support of Summary Judgment
(“Western Digital’s SOF,” Civil Action No. 16-541, Doc. 166) and the exhibits thereto
(“Western Digital’s SOF Exhibits,” Civil Action No. 16-541, Docs. 163, 168-172) as well as
Lambeth’s Response to Western Digital’s SOF (Civil Action No. 16-541, Doc. 208) and the
exhibits thereto (“Lambeth’s Counter-SOF Exhibits against Western Digital,” Civil Action No.
16-541, Doc. 208); and Lambeth’s Concise Statement of Material Facts in Support of its Motion
for Summary Judgment (“Lambeth’s SOF against Western Digital,” Civil Action 16-541, Doc.
174) and the exhibits thereto (“Lambeth’s SOF Exhibits against Western Digital,” Civil Action
16-541, Doc. 174) as well as Western Digital’s Response to Lambeth’s SOF (Civil Action No.
16-541, Doc. 206) and the exhibits thereto (“Western Digital’s Counter-SOF Exhibits,” Civil
Action No. 16-541, Doc. 206). Unless otherwise noted, the facts addressed in this section are
undisputed.
2
The ꞌ988 patent, titled “Magnetic Material Structures, Devices and Methods,” issued on
October 31, 2006 and has an effective filing date of August 29, 2001. (Lambeth’s Response to
Seagate’s SOF at ¶ 1.)
3
I.
Crystalline Materials
Some background on crystalline materials is necessary to understand the parties’ dispute
as well as the specialized terms and notation the Court will use throughout this Memorandum
Order. In crystalline materials, “the atoms are arranged in an ordered three-dimensional pattern
that extends over a long range atomic scale.” (Lambeth’s Response to Seagate’s SOF at ¶ 3.) 3 A
“unit cell” is a three-dimensional repeating unit in a crystalline material. (Id. at ¶¶ 3, 5.)
Crystalline materials can be “single crystal,” meaning that if one were to follow a fixed
direction from one atom in the crystal, there is a constant, repeating distance between subsequent
atoms in the crystal, or “polycrystalline,” meaning the material contains multiple crystals that are
sometimes called “grains.” (Id. at ¶¶ 6-9.)
The three predominant types of unit cells found in nature for metallic crystals are body
centered cubic (“bcc”), face centered cubic (“fcc”), and hexagonal close packed (“hcp”), as
depicted below:
bcc
fcc
hcp
(Lambeth’s Response to Western Digital’s SOF at ¶¶ 20, 21.)
3
Lambeth’s Response to Seagate’s SOF and Lambeth’s Response to Western Digital’s SOF both
contain similar expressions of agreement among the parties as to the background on crystalline
materials. For brevity, the Court cites Lambeth’s Response to Seagate’s SOF. Unless otherwise
noted, there are no material differences between Seagate’s and Western Digital’s statements
concerning the nature of crystalline materials.
4
“For a given crystal, the orientation of crystal planes and crystal directions can be
described using a coordinate system called the ‘Miller Index,’” which “uses x, y, z coordinates to
denote directions and planes within a cubic crystal.” (Lambeth’s Response to Seagate’s SOF at
¶¶ 14-15.) Using the notation of this coordinate system, the “(110)” plane of a bcc crystal, and
the “[110]” direction of a bcc crystal, which is perpendicular to that plane, are shown below in
blue and red, respectively:
(Id. at ¶¶ 19-20.) Also using this notation system, the (111) plane of an fcc crystal and the [111]
direction of an fcc crystal, which is perpendicular to that plane, are shown in blue and red
respectively:
(Id. at ¶¶ 24-25.)
When describing the orientation of a crystal, a “bcc (110) crystal” means that the bcc
crystal’s (110) plane is parallel to the substrate and its [110] direction is perpendicular to the
5
substrate. (Id. at ¶ 17.) Likewise, for an “fcc (111) crystal,” its (111) plane is parallel to the
substrate and its [111] direction is perpendicular to the substrate. (Id. at ¶ 22.)
For hexagonal crystals, such as hcp crystals, crystallographers use a “Miller Bravais”
index consisting of four numbers to describe planes of the crystal. (Lambeth’s Response to
Western Digital’s SOF at ¶ 24.)
Taking an imaginary slice through a crystal along a particular plane exposes a set of
atoms with a repetitive two-dimensional pattern. (Id.) For example, the (111) plane of an fcc
crystal and the (0001) plane of an hcp crystal have two-dimensional hexagonal patterns across
unit cells, as shown below:
fcc (111)
hcp (0001)
(Id. at ¶ 25.)
6
II.
Lambeth’s Claims against Seagate and Western Digital
Lambeth asserts claims 1, 3, 6, 7, 9, 17, 19, 27, 28 and 29 of the ꞌ988 patent against
Seagate and Western Digital. Specifically, Lambeth asserts that the accused Seagate and
Western Digital devices satisfy the elements recited in independent claims 1 and 27, which are
incorporated in the remaining dependent claims asserted against Defendants. Claims 1 and 27
recite the following elements: 4
a substrate;
at least one bcc-d layer which is magnetic, forming a uniaxial symmetry broken structure;
and
at least one layer providing a (111) textured hexagonal atomic template disposed between
said substrate and said bcc-d layer.
ꞌ988 patent at col. 45, ll. 3-8; id. at col. 46, ll. 62-67.
The Court construed several of these claim terms in its Claim Construction Order (Civil
Action No. 16-538, Doc. 78; Civil Action No. 16-541, Doc. 88) as follows:
“bcc-d”
Undisputed Claim Term
Construction
Either a body centered cubic or a body
centered cubic derivative crystal structure.
Construction
An atomic pattern upon which material is
grown and which is used to direct the growth
of an overlying layer
Layer that is predominately (111) hexagonal
and that provides an atomic template
Having an anisotropy energy density function
with only a single maximum and a single
minimum as the magnetization angle is
rotated by 180 degrees from a physical axis
A structure consisting of unequal volumes or
unequal amounts of the bcc-d variants of a six
variant system
A structure that is uniaxial as a result of the
structure being symmetry broken
Disputed Claim Term
“Atomic template”
“[Layer] providing a (111) textured
hexagonal atomic template”
“Uniaxial”
“Symmetry broken structure”
“Uniaxial symmetry broken structure”
4
Claim 1 begins “A magnetic material structure comprising:,” ꞌ988 patent at col. 45, l. 1, while
claim 27 begins “A magnetic device having incorporated therein a magnetic material structure
comprising:,” id. at col. 46, ll. 60-61. Otherwise, the wording of the two claims is identical.
7
ANALYSIS 5
I.
Validity of the ꞌ988 Patent
Seagate argues that the ꞌ988 patent is invalid due to inadequate written description, while
Western Digital argues that the ꞌ988 patent is invalid due to lack of enablement. For the reasons
that follow, the Court concludes that there are disputed issues of material fact concerning both
written description and enablement, and that summary judgment on those grounds should be
denied.
A. Legal standards
35 U.S.C. § 112(a) requires that a patent’s specification contain:
a written description of the invention, and of the manner and process of making and using
it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to
which it pertains, or with which it is most nearly connected, to make and use the same,
and shall set forth the best mode contemplated by the inventor or joint inventor of
carrying out the invention.
This language creates “a written description requirement separate from enablement.” Ariad
Pharms. v. Eli Lilly & Co., 598 F.3d 1336, 1347 (Fed. Cir. 2010).
Pursuant to the written description requirement, the specification must “objectively
demonstrate that the applicant actually invented—was in possession of—the claimed subject
matter.” Id. at 1349. In other words, “the specification must describe the invention in sufficient
Summary judgment is appropriate if the moving party establishes “that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). A dispute is “genuine” only if there is a sufficient evidentiary basis for a
reasonable jury to find for the non-moving party, and a fact is “material” only if it might affect
the outcome of the action under the governing law. See Sovereign Bank v. BJ’s Wholesale Club,
Inc., 533 F.3d 162, 172 (3d Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986)). In ruling on each of the pending motions for summary judgment, the Court must
view the facts, and any reasonable inferences arising therefrom, in the light most favorable to the
non-moving party. See Moody v. Atlantic City Bd. of Educ., 2017 WL 3881957, at *1 n.1 (3d
Cir. Sept. 6, 2017) (citing Hugh v. Butler Cty. Family YMCA, 418 F.3d 265, 266-67 (3d Cir.
2005)).
5
8
detail so ‘that one skilled in the art can clearly conclude that the inventor invented the claimed
invention as of the filing date sought.’” In re Alonso, 545 F.3d 1015, 1019 (Fed. Cir. 2008)
(quoting Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1997)). The inquiry
into whether a patent complies with the written description requirement is a factual inquiry.
Ariad, 598 F.3d 1351; Falkner v. Inglis, 448 F.3d 1357, 1363 (Fed. Cir. 2006). So, to decide
whether the written description requirement is satisfied, the factfinder must assess whether the
patent discloses the invention based on “an objective inquiry into the four corners of the
specification from the perspective of a person or ordinary skill in the art.” Ariad, 598 F.3d
1351. 6
Pursuant to the enablement requirement, “the specification of a patent must teach those
skilled in the art how to make and use the full scope of the claimed invention without ‘undue
experimentation.’” Genetech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1365 (Fed. Cir. 1997)
(quoting In re Wright, 999 F.2d 1557, 1561 (Fed. Cir. 1993)). “The key word is ‘undue,’ not
‘experimentation.’” In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1988) (internal citation omitted).
Relevant factors for assessing enablement include:
(1) the quantity of experimentation necessary, (2) the amount of direction or guidance
presented, (3) the presence or absence of working examples, (4) the nature of the
invention, (5) the state of the prior art, (6) the relative skill of those in the art, (7) the
predictability or unpredictability of the art, and (8) the breadth of the claims.
6
Of particular relevance to the parties’ dispute, a patent may be invalid due to inadequate written
description if it claims an entire genus of inventions but describes only one or a few species within
that genus; this potential for invalidity is heightened when a patent claims a genus defined by
functional language rather than providing a description of what it takes in practice to achieve a
certain functional result. Id. at 1349. A sufficient description of an entire genus “requires the
disclosure of either a representative number of species falling within the scope of the genus or
structural features common to the members of the genus so that one of skill in the art can ‘visualize
or recognize’ the members of that genus.” Id. (internal citation omitted).
9
Id. (“Wands factors”). The Wands factors are illustrative, not mandatory, and defendants bear
the burden of proving by clear and convincing evidence that the patent is invalid for lack of
enablement. Cephalon, Inc. v. Watson Pharms., Inc., 707 F.3d 1330, 1336 (Fed. Cir. 2013).
While enablement is a question of law, resolving enablement depends on resolving underlying
questions of fact regarding undue experimentation. Transocean Offshore Deepwater Drilling,
Inc. v. Maersk Contractors. USA, Inc., 617 F.3d 1296, 1305 (Fed. Cir. 2010).
B. Whether the ꞌ988 patent is invalid due to inadequate written description
Seagate argues that the ꞌ988 patent is invalid due to inadequate written description
because the patent claims two categories of atomic templates but describes only one. That is,
Seagate argues that the ꞌ988 patent claims uniaxial symmetry broken structures grown on both
single-crystal and polycrystalline templates, but describes only structures grown on single-crystal
templates. (Seagate’s Brief in Support of Motion for Summary Judgment, “Seagate’s MSJ
Brief,” at 4-12, Civil Action No. 16-538, Doc. 163.) It maintains that the patent fails the written
description test because it fails to describe the full genus of atomic templates covered by the
claims. Lambeth responds that the cases on which Seagate relies involve true genus-species
claims, which are not at issue here, and that in any event, the ꞌ988 patent demonstrates that
Lambeth had possession of both single and polycrystalline templates. (Lambeth’s Response to
Seagate’s MSJ at 2-4, Civil Action 16-538, Doc. 217.)
For the reasons that follow, the Court will deny Seagate’s motion for summary judgment
of invalidity.
Seagate argues that single crystal and polycrystalline atomic templates (for growing the
claimed uniaxial symmetry broken structures) comprise a broad “genus” of atomic templates,
with single crystal templates serving as a narrow “species” of atomic templates. (Seagate’s MSJ
10
Brief at 5.) As a result, Seagate argues that the ꞌ988 patent’s specification “needs to show that
one has truly invented the genus, i.e., that one has conceived and described sufficient
representative species encompassing the breadth of the genus.” AbbVie Deutschland GmbH v.
Janssen Biotech, Inc., 759 F.3d 1285 (Fed. Cir. 2014). Despite the requirement to fully describe
the genus, Seagate asserts that Lambeth has failed to provide even a single example of the
invention on a polycrystalline template. (Seagate’s MSJ Brief at 1.)
Lambeth responds that the claims at issue are not genus-species claims. (Lambeth’s
Response to Seagate’s MSJ Brief at 2.) The patent discloses that each single crystal grain in a
polycrystalline template can be treated as a single crystal template for purposes of the invention,
negating any significance to the distinction. E.g., ꞌ988 patent at col. 23, ll. 20-23 (“for
polycrystalline substrates the epitaxially grown films contain multiple variant sets corresponding
to the crystalline orientations of the individual hexagonal template grains”). 7 Seagate’s
argument that the specification fails to describe the genus is, Lambeth contends, inapt.
Moreover, Lambeth responds that even if single crystal and polycrystalline templates are
considered separate species, the patent’s specification indicates that polycrystalline templates are
within the scope of the invention that Lambeth possessed. The specification both discloses
polycrystalline templates as a type of atomic template that can be used to grow the desired
magnetic films, e.g., ꞌ988 patent at col. 21, ll. 61-67 (“[t]his concept . . . enables the development
of nearly linear magnetic response functions even for polycrystalline (110) textured bcc-d films
epitaxially grown on polycrystalline, randomly oriented, (111) hexagonal atomic templates”),
7
As implied by the specification’s discussion of the prior art, a polycrystalline template consists
of “a large number of single crystal grains.” See ꞌ988 patent at col. 11, l. 12. Given this
relationship between the “genus” and the “species”—the species of polycrystalline templates is,
by definition, a species of adjoining single crystal grains—the Court agrees that the analogy to
typical genus-species claims is weak.
11
and shows possession by explaining physical attributes and conditions that yield the desired
results on either single crystal or polycrystalline atomic templates, e.g., ꞌ988 patent at col. 33, ll.
54-59 (“[o]ur findings are that a symmetry broken structure can be obtained even for
polycrystalline films provided the (111) hexagonal template is highly textured and the deposition
angle with respect to the substrate normal is constrained to be within 15 ≦ Ω ≦ 75 degrees from
the normal”).
Given the specification’s disclosures concerning polycrystalline templates and their use
for creating the desired magnetic structures, the question of whether one skilled in the art would
conclude from those disclosures that Lambeth had possession of uniaxial symmetry broken
structures grown on polycrystalline templates is a disputed question of material fact with
evidence on both sides. (Compare Seagate’s SOF Exhibit 14, “Dr. Ross’s May 2, 2018 Expert
Report - Seagate,” at ¶¶ 367-71 (person of skill in the art would conclude that inventor lacked
such possession), with Seagate’s SOF Exhibit 21, “Dr. Coffey’s July 16, 2018 Responsive
Expert Report - Seagate,” at ¶¶ 197-98 (person of skill in the art would conclude that the patent
discloses films grown on polycrystalline atomic templates).) It would be inappropriate for the
Court to resolve this question at summary judgment.
C. Whether the ꞌ988 patent is invalid due to lack of enablement
For similar reasons, the Court will deny Western Digital’s motion for summary judgment
of invalidity based on lack of enablement.
Western Digital argues that the ꞌ988 patent provides no guidance to a person of ordinary
skill in the art as to how to make or use the claimed invention. (Western Digital’s Brief in
Support of Motion for Summary Judgement, “Western Digital’s MSJ Brief,” at 24, Civil Action
No. 16-541, Doc. 165.) Specifically, considering several of the Wands factors, Western Digital
12
argues that the specification: (1) provides only vague and conclusory statements about the
parameters necessary to achieve the desired results, e.g., ꞌ988 patent at col. 22, ll. 54-55 (the
processing conditions must be “just right” to achieve a uniaxial symmetry broken structure);
(2) discloses no working examples (no material samples that are both uniaxial and symmetry
broken); (3) provides no information regarding polycrystalline 8 uniaxial symmetry broken
structures; (4) leaves instructional voids regarding necessary processing conditions that would
require significant and unreasonable experimentation to fill; and (5) covers less terrain than the
breadth of the claims would require. (Western Digital’s MSJ Brief at 24-27.)
In response, Lambeth argues that Western Digital’s arguments either depend on
genuinely disputed facts or lack any factual basis. (Lambeth’s Response to Western Digital’s
MSJ Brief at 19.)
The dispute concerning the level of guidance in the specification as to how to practice the
invention is illustrative. Lambeth argues that the specification teaches a person of ordinary skill
in the art how to practice the specific parameters yielding a uniaxial symmetry broken structure. 9
8
Lambeth asserts the ꞌ988 patent only against Defendants’ devices that allegedly practice the
invention on polycrystalline templates.
9
The specification provides, as an example, a roadmap for creating a uniaxial symmetry broken
structure by sputtering a material for deposition onto a substrate in the presence of two
“symmetry breaking mechanism[s]” (which are the angle of incidence between the sputtered
material and the substrate, and the direction of the magnetic field at the surface of the substrate)
and several surrounding conditions:
FIG. 13 illustrates a cross-sectional view of a rod shaped sputtering target [15] composed
of bcc-d material for deposition on to a disk substrate. A shield [16] and magnets [17] to
facilitate a sputtering plasma at low Ar gas pressures surround the target. A disk
substrate [18] is held on axis with the sputtering target, but at a distance to cause the
sputtered material [27] to arrive at the disk surface along a radial direction and at an angle
of incidence. Ar gas is introduced into the vacuum chamber via a pathway between the
target and a water cooled shield. This concentrates the sputtering gas [25] in the vicinity
of the sputtering target and minimizes it in the vicinity of the disk substrate. . . . A low
gas pressure is desired to enable a scattering mean free path of the sputtered material to
13
(Id. at 20.) Drawing on language in the specification, centering on the lines cited in the
preceding footnote, Lambeth’s expert, Dr. Kevin Coffey (“Dr. Coffey”), opines that “the patent
provides a [Person of Ordinary Skill in the Art (“POSITA”)] with specific instructions on the
geometry of a sputtering set up, specific instructions on which sputtering parameters should be
controlled and how, and detailed discussion of how to apply two symmetry breaking mechanisms
in tandem to effectively create a uniaxial symmetry broken bcc-d magnetic layer.” (Lambeth’s
Counter-SOF Exhibit L against Western Digital, “Dr. Coffey’s July 16, 2018 Rebuttal Expert
Report - Western Digital,” at ¶ 108.) Despite Lambeth’s evidence, Western Digital maintains
that the directions in the specification are insufficient, and that Dr. Coffey’s opinions are based
on “cherry-pick[ed] quotes” from the patent that misconstrue its teachings. (Western Digital’s
MSJ Brief at 24-25.) Yet, as Lambeth argues, Western Digital cites no evidence that a person of
ordinary skill in the art would be unable to practice the invention—let alone unable to practice
the invention without undue experimentation—based on the level of guidance provided in the
specification. 10 The question of whether the level of guidance provided in the specification is
be comparable to, or longer than, the distance from the target to the disk substrate. This
prevents the randomization of the direction of the sputtered material by avoiding gaseous
collisions. Sputtering wears the target in a predefined and somewhat conical shape
causing a deposition path from the target to the disk at the desired range of incident
angles between 15 and 75 degrees. . . . The magnetic fields from the magnets can be so
arranged to provide a small, but non-negligible, magnetic field at the disk surface
directed around the circumference of the disk. This directionally provides, a second
symmetry breaking mechanism, in addition to the deposition at an angle, an energy
mechanism of deposition in a magnetic field to help promote bcc-d orientation of the
magnetic material. For magnetic bcc-d material with K1>0 the promoted easy axis from
both symmetry breaking mechanism coincides.
ꞌ988 patent at col. 34, l. 58 – col. 35, l. 45.
10
As addressed below, Western Digital argues that the inventor himself was unable to create the
claimed structure, providing strong evidence that the amount of experimentation would be
undue—Lambeth disputes this fact and presents evidence to the contrary.
14
sufficient to enable a person of ordinary skill in the art to practice the invention without undue
experimentation is, clearly, a disputed question of fact.
Likewise, assessing each remaining Wands factor addressed by the parties would require
deciding numerous disputed factual issues.
Western Digital claims that the patent fails to disclose any working examples of the
invention because it fails to disclose a sample of material that is both uniaxial and symmetry
broken. But Lambeth cites evidence that “there are two working examples disclosed in the ꞌ988
Patent, namely, the samples ‘LS1425_2cx,’ which discloses a Ni atomic template and an Fe
magnetic bcc-d layer, see ꞌ988 Patent at [col. 42, l. 44 – col. 44, l. 22], and ‘LS0909-6,’ which
discloses a Cu atomic template and an Fe magnetic bcc-d layer, see id. at [col. 41 l. 2 – col. 42, l.
26].” (Dr. Coffey’s July 16, 2018 Rebuttal Expert Report - Western Digital at ¶ 161.) 11
Western Digital claims that the patent fails to address polycrystalline structures. But
Lambeth cites the language of the specification itself, which states that “[t]he technique to
obtain[] the same easy and hard magnetic axis behavior across an entire polycrystalline sample is
to induce the appropriate (110) textured bcc-[d] coupled uniaxial variant set for each of the
randomly oriented hexagonal templates,” ꞌ988 patent at col. 22, ll. 11-15, and further states that
“[t]he method of achieving this is to provide an energetically driven growth process that
11
As to the former sample, the specification states “it was determined to be one of the symmetry
broken uniaxial sets,” ꞌ988 patent at col. 42, ll. 63-64, and as to the latter sample, the
specification states “even when a hexagonal template of non-magnetic material was employed it
was possible to have exchange coupled variants and to obtain the uniaxial symmetry broken
behavior,” id. at col. 42, ll. 27-30.
15
preferentially selects that the appropriate coupled variant set for each hexagonal template
orientation being use[d],” id. at col. 22, ll. 16-19. 12
Western Digital claims that the level of experimentation needed to make use of the full
scope of the claims is high because the inventor himself never succeeded in creating a uniaxial
symmetry broken structure. But, as just mentioned, Lambeth provides evidence that the patent
discloses two examples of such structures.
Finally, Western Digital argues that the patent is not enabled because the claims cover a
boundless number of materials and structures of any size, but fail to teach how to make a
uniaxial symmetry broken structure from various possible permutations of materials or how to
make such a structure of any size. But again, Western Digital fails to provide any evidence to
support that conclusion, and Lambeth responds by arguing, correctly, that this lack of evidence
cannot meet Western Digital’s burden to show lack of enablement by clear and convincing
evidence.
As the question of enablement boils down to a series of factual disputes about the
inferences a person of skill in the art would draw from the specification and the amount of
experimentation needed to practice the full scope of the claims, Western Digital’s motion for
summary judgment of invalidity due to lack of enablement will be denied. 13
12
In addition, Lambeth presents evidence that one of the samples listed above, LS0909-6,
contains a uniaxial symmetry broken structure on a polycrystalline template. (See Lambeth’s
Response to Seagate’s MSJ Brief at 10.)
13
The Court also notes that the parties dispute the experiences and qualifications that a POSITA
would have, and the Court agrees with Lambeth that this fact alone would be sufficient to
preclude summary judgment on issues resting on the inferences a POSITA would draw from the
patent. (See Lambeth’s Response to Seagate’s MSJ 10-11; Lambeth’s Response to Western
Digital’s MSJ 20 n.13.)
16
II.
Seagate’s Motion for Judgment on Non-Infringement of the ꞌ988 Patent
Seagate argues that Lambeth’s evidence fails to show that Seagate’s accused devices
contain symmetry broken structures or a layer providing a (111) textured hexagonal template,
and so Lambeth cannot establish infringement. Lambeth responds that there are genuinely
disputed facts as to each component of Seagate’s argument that preclude summary judgment.
The Court will address each disputed claim element in turn to determine whether “no reasonable
factfinder could find that the accused product contains every claim limitation or its equivalent.”
Medgraph, Inc. v. Medtronic, Inc., 843 F.3d 942, 949 (Fed. Cir. 2016).
A. Whether the accused Seagate devices contain symmetry broken structures
The Court construed “symmetry broken structure” to mean a “structure consisting of
unequal volumes or unequal amounts of the bcc-d variants of a six variant system.” Seagate
focuses on the meaning of the Court’s claim construction—specifically, the meaning of
“consisting of”—and on Lambeth’s evidence as to unequal volumes or amounts of the relevant
variants. (Seagate’s MSJ Brief at 12-13.)
1. “Consisting of”
Taking the Court’s use of the phrase “consisting of” to imply that a layer satisfying that
claim element must contain only crystals within the six variant system and no other crystals,
Seagate argues that its accused FeCo layers cannot be symmetry broken because it is undisputed
that they contain some crystals that are not variants of the six-variant system. (Id. at 14.) This
argument draws support from the use of “consisting of” as a term of art in original claim
construction indicating a closed set of components, e.g., Multilayer Stretch Cling Film Holdings,
Inc. v. Berry Plastics Corp., 831 F.3d 1350, 1358 (Fed. Cir. 2016). Yet, as Lambeth argues,
17
Seagate provides no support for the principle that “consisting of” is a term of art in interpreting a
Court’s construction of a claim term.
The Court now clarifies that nothing in its claim construction requires such a limitation
concerning the lack of additional crystals in the relevant layer. The Court also notes that this
issue was not raised as a subject of dispute during the claim construction process. Defendants
had ample opportunity to raise any arguments concerning claim limitations during claim
construction but failed to raise this argument. As the Court’s October 18, 2017 Claim
Construction Order governs claim construction in this case, the Court will not revisit its
constructions at this stage of the litigation.
2. Evidence as to unequal volumes or unequal amounts
Seagate next contends that Lambeth has provided no evidence to show that Seagate’s
accused layers contain unequal volumes or amounts of the relevant orientational variants, which
would be required for those layers to meet the Court’s construction of “symmetry broken
structure.” To the contrary, Lambeth’s experts provide such evidence. Specifically, they
provide and describe an analysis based on dark field imaging of the accused layers showing that
a particular orientational variant, a member of the relevant six variant system, is present in a
greater amount than others. (Seagate’s SOF Exhibit 18, “Dr. Clark’s May 2, 2018 Initial Expert
Report - Seagate,” at ¶¶ 116-124 (more crystallites in the sample of the accused layer are
oriented with their easy directions perpendicular to the long axis of the write head relative to
other directions, and the variants present belong to the six variant system); Seagate’s SOF
Exhibit 20, “Dr. Coffey’s May 2, 2018 Initial Expert Report - Seagate,” at ¶¶ 181-188
(interpreting imaging results to show “the presence of unequal amounts of variants in the
Kurdjumov-Sachs six-variant system”).) Seagate disagrees with this interpretation, but there is
18
no need to belabor the point; Lambeth has proffered sufficient evidence to render the issue
genuinely disputed, and summary judgment must be denied. 14
B. Whether the accused Seagate devices contain a template layer that is (111) textured
hexagonal
The asserted claims require a layer that is predominately (111) hexagonal and that
provides an atomic template. Seagate argues that Lambeth’s testing fails to show any (111)
hexagonal crystals in the accused NiFe layers, and that even if Lambeth’s tests are deemed
sufficient to show the presence of such crystals in the analyzed samples of the NiFe layers,
Lambeth has not sampled a sufficient proportion of the NiFe layers to show that the (111)
hexagonal crystals predominate. Lambeth, drawing again on its expert materials, argues to the
contrary that it has produced evidence establishing that the accused NiFe layers are
predominately (111) hexagonal.
Lambeth’s evidence is, again, sufficient to withstand summary judgment.
As to the presence of (111) hexagonal crystals in the accused NiFe layers, Dr. Clark’s
May 2, 2018 Initial Expert Report - Seagate states that the diffraction patterns of the NiFe layers,
when visualized through the Fast Fourier Transform (“FFT”) procedure, “show that the lower
NiFe layer . . . is a template to the FeCo layer growing upon it, at least because they share a
predominate common direction normal to the template, and this direction is <111>FCC||<110>BCC,
the orientation for epitaxial growth.” Id. at ¶ 67. According to Dr. Clark’s analysis, the NiFe
layer in this sample is fcc, oriented in the <111> 15 direction, and predominately hexagonal. Id. at
14
Seagate also argues that Lambeth’s evidence would need to show the amount, volume, or
relative proportion of each variant in the accused layer in order to conclude that the variants are
present in unequal amounts. As a matter of logic, for the reasons stated in Lambeth’s responsive
brief, those elements are not required to show unequal volumes or amounts.
15
According to Dr. Clark, these angular brackets denote a family of structurally identical
orientational directions in a crystal. Id. at ¶ 30. Likewise, curly brackets “{}” indicate a family
19
¶ 89 (“this FFT indicates the crystal structure of the NiFe layer is FCC”); id. at ¶ 66 (“this
parallel direction [between the overlying layers] is <110> in the BCC FeCo, and <111> in the
FCC NiFe layer”); see id. at ¶¶ 34-36 (showing how the hexagonal structure of a (111) fcc layer
leads to six distinct variants of overlying (110) bcc crystals in the Kurdjumov-Sachs
relationship). This is sufficient evidence from which a factfinder could conclude that the NiFe
layer contains (111) hexagonal crystals. 16
As to the predominance of (111) hexagonal crystals in the accused NiFe layers, Dr. Clark
explains his conclusion that “because we can see [in the high-resolution cross-section images]
that the lattice fringes are continuous along the lower NiFe layer, this is indicative of the crystal
structure of the extent of the lower NiFe layer.” Id. at ¶ 89. Dr. Clark further justifies this
conclusion—that the NiFe layer is visibly continuous and that the sample is therefore
representative of the whole layer—in his subsequent report. (Seagate’s SOF Exhibit 19, “Dr.
Clark’s August 3, 2018 Reply Expert Report – Seagate,” at ¶ 15 (“[A] 1.1% percent sample of
the lower NiFe layer . . . represent[s] an adequate sample to determine the lower NiFe layer
texture. Given the very fine scale of the microstructure, even limited area FFTs are
representative of the full microstructure.”); id. at ¶ 43 (“[A] 0.165% sample of the lower NiFe
layer represents an adequate sample to determine that lower NiFe layer texture. Given that the
microstructure of the FeCo exhibits repetitive columnar growth across the write head,
establishing the orientation relationship between the NiFe and the FeCo columns in one part of
of structurally identical crystal planes. Id. at ¶ 29. As there is no dispute concerning notation,
the Court uses whichever bracket style the parties have used in their relevant materials.
16
The parties dispute whether the orientation depicted in Dr. Clark’s report is the (111)
orientation relative to the underlying substrate. Lambeth’s evidence, viewed in a light most
favorable to Lambeth as the nonmoving party, shows that the (111) orientation is the orientation
depicted in Dr. Clark’s report.
20
the sample can reasonably be extrapolated to the remainder.”).) While it is true that “conclusory
expert assertions do not give rise to a genuine issue of material fact,” D Three Enters., LLC v.
SunModo Corp., 890 F.3d 1042, 1051 (Fed. Cir. 2018), the Court finds that Dr. Clark’s
conclusions are supported by his reasons; if the texture appears continuous in images of the
microstructure, and multiple samples confirm continuity by revealing the same features, then a
factfinder could conclude that the features of the samples can be extrapolated across the layer
(even if a reasonable argument could be made that the samples are not representative). Lambeth
has provided sufficient evidence from which a factfinder could conclude that (111) hexagonal
crystals predominate in the NiFe layer.
To summarize Lambeth’s evidence as to the presence of a (111) hexagonal texture in the
accused NiFe layers, Plaintiff’s expert, Dr. Clark, has analyzed the accused NiFe layers and
concluded that they are predominately (111) hexagonal. He has also explained his methodology,
and explained how that method has led him to that conclusion. While Seagate is free to
challenge Dr. Clark’s methods and conclusions, and any of the underlying evidence used to
derive those methods and conclusions, the summary judgment stage is not the appropriate time to
do so.
III.
Western Digital’s Motion for Judgment of Non-Infringement of the ꞌ988 Patent
Western Digital argues that Lambeth cannot show that Western Digital’s accused
products infringe the ꞌ988 patent because they lack a uniaxial symmetry broken structure and
lack a layer providing a (111) textured hexagonal atomic template. (Western Digital’s MSJ Brief
at 10-22.) Lambeth’s response to Western Digital is, in essence, the same as its response to
Seagate: Western Digital’s arguments rely on genuinely disputed facts that preclude summary
judgment. As the Court has done for Seagate’s arguments above, the Court will address each of
21
Western Digital’s non-infringement arguments in turn and will ultimately conclude that
summary judgment must be denied.
A. Whether the accused Western Digital devices contain uniaxial symmetry broken
structures
The Court construed “uniaxial symmetry broken structure” to mean “[a] structure that is
uniaxial as a result of the structure being symmetry broken.” 17 Western Digital argues both that
Lambeth’s evidence is insufficient to establish that the accused products are uniaxial and that
Lambeth’s evidence is insufficient to establish that any uniaxiality results from the structures
being symmetry broken. However, for the reasons below, Lambeth’s evidence as to each claim
element is sufficient to withstand summary judgment.
The asserted claims require the presence of “at least one bcc-d layer which is magnetic,
forming a uniaxial symmetry broken structure,” with “uniaxial symmetry broken structure”
having the construction just mentioned. The question before the Court on summary judgment is
whether Lambeth’s evidence, viewed in a light most favorable to Lambeth, is sufficient for a
factfinder to conclude that the relevant claim element is present in the accused devices.
It is. Specifically, Dr. Coffey opines and explains as follows:
[T]he WD [Western Digital] Type 1 Products all contain a layer of FeCoNi high moment
material in the write head that includes multiple polycrystalline grains of (110) textured
bcc FeCoNi. The grains of (110) bcc FeCoNi in the layer of FeCoNi material in the write
head of the WD Type 1 Products are oriented relative to the (111) hexagonal template
provided by the Ru template layer directly beneath such that the FeCoNi layer consists of
variants from the six-variant Burgers system. . . . [T]he layer of FeCoNi material in the
WD Type 1 Products’ write poles has unequal amounts of the bcc variants in the Burgers
six variant system . . . . Furthermore, . . . the result of the symmetry breaking in the layer
of FeCoNi in the WD Type 1 Products’ write heads is uniaxial anisotropy in the
17
Given the Court’s constructions of “symmetry broken” and “uniaxial,” the expanded version
of the Court’s construction would be “a structure that has an anisotropy energy density function
with only a single maximum and a single minimum as the magnetization angle is rotated by 180
degrees from a physical axis as a result of the structure consisting of unequal volumes or unequal
amounts of the bcc-d variants of a six variant system.”
22
measured region of that material layer. Specifically, the unequal amounts of variants in
the six-variant system observed via dark field image analysis at different angles as a
sample was rotated by 180 degrees from a physical axis were measured and the resulting
anisotropy energy density function was calculated. As discussed in further detail below,
it is my opinion that the layer of FeCoNi in the WD Type 1 Products is uniaxial because
the anisotropy energy density function I calculated solely due to the measured broken
symmetry in representative samples of the WD Type 1 Products has a single maximum
and a single minimum as the magnetization angle is rotated by 180 degrees from a
physical axis.
...
[B]ecause these [calculated] uniaxial anisotropy density functions were determined solely
by utilizing dark field imaging data that reflects the unequal amounts of the bcc-d
variants of a six variant system, it is my opinion that the FeCoNi layer in the WD Type 1
Products is uniaxial as a result of being symmetry broken and, accordingly, meet [sic] the
Court’s construction of the term “uniaxial symmetry broken.”
(Lambeth’s Counter-SOF against Western Digital Exhibit B, “Dr. Coffey’s May 2, 2018 Initial
Expert Report - Western Digital,” at ¶¶ 237, 252.)
In the passages quoted above, Dr. Coffey explains how the analyses performed by Dr.
Clark show that a layer of the accused Western Digital devices forms a uniaxial symmetry
broken structure according to the Court’s constructions. To the extent that his conclusions rely
on knowledge beyond the testing data, Dr. Coffey cites supporting references and justifies the
assumptions that lead him to his conclusions. (Id. at ¶¶ 252-256.) While Lambeth cites
additional evidence supporting its infringement claim against Western Digital, the Court may
pause here because, at this stage, Lambeth’s evidence suffices to meet its burden at summary
judgment to show that this claim element is met. 18
18
At best, Western Digital’s arguments that its devices lack the required uniaxial structure
raise factual disputes; at worst, its arguments are simply irrelevant.
For example, to support its argument that its devices lack the required uniaxiality,
Western Digital performed its own magnetic testing of the accused write poles using magnetic
force microscopy (“MFM”). (See Western Digital’s MSJ Brief at 12-14.) Yet, as Lambeth
argues, the claims plainly require that the uniaxial symmetry broken structure be formed from a
magnetic bcc-d layer. As Western Digital’s MFM tests were performed at the level of the write
23
B. Whether the accused Western Digital devices contain a layer providing a (111)
textured hexagonal atomic template
Next, Western Digital takes the position that Seagate has taken with respect to sampling
the accused layer: Lambeth took too few samples to conclude that the whole layer has a (111)
hexagonal texture. For the same reasons as before, however, Lambeth’s expert has provided a
sufficient explanation for why the properties of the samples can be extrapolated to the layer.
Lambeth’s evidence can reasonably be taken to show that Western Digital’s accused
products contain (111) hexagonal textured layers. For example, Lambeth offers evidence that a
category of accused devices contains a “lower Ru layer . . . [that] is a template to the FeCo layer
growing upon it, at least because they share a predominate common direction normal to the
template, and this direction is <-0002>HCP||<110>BCC, the orientation for epitaxial growth.”
(Lambeth’s Counter-SOF against Western Digital Exhibit F, “Dr. Clark’s May 2, 2018 Initial
Expert Report - Western Digital,” at ¶ 67.) To show that the accused Ru layer has a hexagonal
texture, Dr. Clark again performed FFT analyses of samples along the layer, which “indicate[]
that the crystal structure of the Ru layer is HCP.” (Id. at ¶ 97.) Based on “the high resolution
cross-sections [depicted] above, because [Dr. Clark] can see that the lattice fringes are
continuous along the Ru layer, [Dr. Clark concludes that] this is indicative of the crystal structure
poles on its HDD write heads, and not at the level of a crystalline layer, the relevance of these
tests is questionable. Regardless, the question before the Court is not whether Western Digital’s
evidence fully rebuts Lambeth’s.
As to the portion of the Court’s construction that requires a causal link between
symmetry breaking and uniaxiality, Western Digital offers evidence and arguments that Dr.
Coffey fails to account for all the relevant factors; that other factors contribute to uniaxiality to a
much greater degree than does symmetry breaking; and that the type of analysis that Dr. Coffey
draws on to reach his conclusions (dark field imaging) is incapable of revealing the necessary
information about crystal orientations or the presence of unequal amounts of the relevant crystal
variants. (Id. at 15-20.) None of these arguments are properly considered at summary judgment
where Lambeth has offered evidence to the contrary.
24
of the extent of the Ru layer.” (Id.) Dr. Clark performed similar analyses and reached similar
conclusions for other accused layers in Western Digital’s products. (Id. at ¶¶ 98-102, 122-128.)
As before, the Court finds that this line of factual reasoning is sufficient—although by no means
undisputable—evidence from which a factfinder could conclude that the hexagonal texture
persists throughout the relevant layers.
Consequently, Western Digital’s motion for summary judgment of non-infringement will
be denied.
IV.
Availability of Pre-Suit Damages
A. Legal standards
Pursuant to 35 U.S.C. § 287(a), in the event a patentee or licensee fails to mark a patented
article for sale with its patent number,
no damages shall be recovered by the patentee in any action for infringement, except on
proof that the infringer was notified of the infringement and continued to infringe
thereafter, in which event damages may be recovered only for infringement occurring
after such notice. Filing of an action for infringement shall constitute such notice.
Id.
The owner of a patent “bears the burden of pleading and proving he complied with §
287(a)’s marking requirement.” Arctic Cat Inc. v. Bombardier Rec. Prods., 876 F.3d 1350, 1366
(Fed. Cir. 2017) (“Arctic Cat I”). Although licensees are also bound to comply with § 287(a)
and can trigger § 287(a)’s damages bar by failing to mark, a patent owner may avoid the
damages bar if the owner makes reasonable efforts to ensure the licensee’s compliance. Id.
(citing Maxwell v. J. Baker, Inc., 86 F.3d 1098, 1111-12 (Fed. Cir. 1996)).
Even on summary judgment, “[t]he burden of proving compliance with marking is and at
all times remains on the patentee.” Id. at 1367. So, for example, if the dispute concerns whether
an unmarked product practices the invention, once an alleged infringer notifies the patentee of
25
the specific products that it believes practice the invention and have been sold without marking,
the burden to prove that those products do not practice the invention rests with the patentee. Id.
1368. Underlying this rule is the reality that “the patentee is in a better position to know whether
his goods practice the patents-in-suit.” Id.; see also Dunlap v. Schofield, 152 U.S. 244, 248
(1894) (“[w]hether his patented articles have been duly marked or not is a matter peculiarly
within his own knowledge”).
In the absence of marking, § 287(a) also allows a patent owner to avoid the damages bar
by providing actual notice to the infringer. “[T]hat notice must be an affirmative act on the part
of the patentee which informs the defendant of his infringement.” Amsted Indus. v. Buckeye
Steel Castings Co., 24 F.3d 178, 187 (Fed. Cir. 1994) (citing Dunlap, 152 U.S. at 248). For that
reason, “[i]t is irrelevant . . . whether the defendant knew of the patent or knew of his own
infringement.” Id. On summary judgment, where the alleged infringers argue lack of notice, the
patentee must adduce some evidence to establish that it provided actual notice to the specific
infringers.
Compliance with 35 U.S.C. § 287(a) is a question of fact. Arctic Cat I, 876 F.3d at 1366.
B. Whether Lambeth has met its burden to show marking or notice
Both Seagate and Western Digital argue that Lambeth’s alleged licensees, Samsung and
Microsoft, sold unmarked products that practice the ꞌ988 patent in the United States during the
period prior to this lawsuit. Further, they argue that Lambeth provided them no actual notice of
their allegedly infringing products before filing the two instant suits. As a result, they argue that
§ 287(a) cuts off damages during the pre-suit period. Seagate additionally argues that Lambeth
has failed to plead compliance with marking, and that Lambeth’s failure to disclose information
26
in response to an interrogatory regarding compliance with § 287(a) forecloses Lambeth’s
subsequent ability to offer evidence of marking under Federal Rule of Civil Procedure 37(c). 19
Lambeth argues that it effectively pleads compliance with marking or could do so
through amendment, that its disclosures were sufficient to provide Defendants with notice of the
relevant facts concerning marking, that Western Digital’s evidence that Samsung and Microsoft
were licensees is legally insufficient, and that Seagate’s evidence as to Microsoft’s status as a
licensee is legally insufficient. However, Lambeth admits to both parties that Seagate has proven
Samsung was a licensee selling unmarked HDDs from March to November 2011. (Lambeth’s
Response to Seagate’s MSJ at 28-29; Lambeth’s Response to Western Digital’s MSJ at 28, 28
n.15.)
Lambeth further argues that selling unmarked products should cut off damages only
during the period in which the unmarked products were sold, and that, in any event, Seagate and
Western Digital received actual notice of infringement on January 9 and 8, 2015, respectively.
(Lambeth’s Response to Seagate’s MSJ at 30-33; Lambeth’s Response to Western Digital’s MSJ
at 29-33.)
As explained below, Seagate and Western Digital have met their burden of producing
affirmative evidence that Microsoft was a licensee selling unmarked products practicing the
patent. Because Lambeth has failed to carry its burden to offer any evidence to the contrary, the
Court finds that Microsoft was a licensee selling unmarked products during the pre-suit period
for purposes of the instant motions. This finding is sufficient to start the clock on the damages
bar at a date earlier than the alleged Samsung license began, rendering Samsung’s status as a
19
The Court will not address these last two arguments, as the Court concludes that the damages
bar applies on alternate grounds.
27
licensee immaterial. The Court also rejects Lambeth’s argument that the damages bar under
§ 287(a) lifts during a sales interlude when unmarked products are no longer sold. And, the
Court finds that Lambeth has failed to produce evidence that it provided Seagate or Western
Digital with actual notice of their infringement. Therefore, the Court will grant Seagate and
Western Digital’s motions for summary judgment as to lack of pre-suit damages beginning once
Microsoft’s license took effect and it began selling products practicing the ꞌ988 patent.
1. Microsoft and Samsung’s status as licensees for purposes of summary judgment
Seagate and Western Digital offer evidence that Microsoft was licensed to sell products
practicing the ꞌ988 patent in the pre-suit period. But Lambeth offers no counter-evidence. As
Seagate and Western Digital rely on the same evidence to show Microsoft’s status, the Court will
address Seagate’s evidence and then reach the same conclusion as to both Seagate and Western
Digital.
Seagate presents an executed license agreement, and other supporting information,
showing that Microsoft was licensed to practice the ꞌ988 patent. In particular, Seagate provides a
copy of a contract between SBS Magnetics, a wholly owned subsidiary of Acacia Research
Group LLC, itself a wholly-owned subsidiary of Acacia Research Corporation (collectively
“Acacia”), and Microsoft under which Microsoft obtained rights to license any patents Acacia
would acquire after September 30, 2010. (Seagate’s SOF Exhibit 42, “Microsoft Agreement,” at
§§ 1.4, A1.2, A2.1, A2.2.) Seagate also presents an assignment agreement showing that Acacia
acquired the ꞌ988 patent on December 18, 2010 from Lambeth Systems (“LS”). (Seagate’s SOF
Exhibit 40, “Assignment Agreement.”) The Assignment Agreement acknowledges a preexisting
agreement between Acacia and Microsoft that would result in Microsoft obtaining a license to
the ꞌ988 patent or a covenant not to sue, without specifically identifying that agreement. (Id. at
28
§ 3.3 (“LS acknowledges that because of two preexisting agreements . . . the second between
Acacia and Microsoft Corporation . . . [Microsoft] will obtain or will be granted, a license,
release and/or covenant not to sue under the Patents upon or after the Effective Date.”).)
Lambeth disputes that Microsoft qualifies as a licensee for the ꞌ988 patent under the
Microsoft Agreement. Lambeth argues that the Microsoft Agreement merely grants Microsoft
an option to acquire rights to the patent and avers that Seagate has presented no evidence that
Microsoft exercised that option. (Lambeth’s Response to Seagate’s MSJ at 30; Microsoft
Agreement at § 2.1 (“prior to Microsoft providing such written notice [of intention to exercise its
option], the terms and conditions set forth in Addendum A attached hereto . . . shall have no legal
effect”).)
Seagate counters that this option was clearly exercised under the terms of the Microsoft
Agreement, and presents direct evidence in the text of the Microsoft Agreement that the option
was exercised. (Id. at § 4.15 (“Microsoft hereby exercises its option pursuant to Section 2.1(a)
and the Parties agree that the terms and conditions set forth in Addendum A shall automatically
take immediate legal effect”).) Seagate also presents indirect evidence via the Assignment
Agreement, which mentions the forthcoming license to Microsoft.
In response, Lambeth offers no affidavit or other evidence that Microsoft never received
a license. Lambeth rests on Seagate’s failure to provide evidence of other documents related to
the license, such as an independent notice document or a payment document, and contends that
such failure, particularly after Defedants’ attempts to discover those documents, can be taken as
evidence adverse to Seagate. (Lambeth’s Response to Seagate’s MSJ at 29 (citing Lin v. Rohm
& Haas Co., 685 F. App’x 125, 132 (3d Cir. 2017) (discussing the “missing witness inference,”
which stems from “the simple proposition that if a party who has evidence which bears on the
29
issues fails to present it, it must be presumed that such evidence would be detrimental to his
cause”).)
Lambeth’s argument misapprehends its burden. Once a moving defendant has presented
a properly supported motion for summary judgment, “the plaintiff must present affirmative
evidence in order to defeat [it].” Anderson, 477 U.S. at 257. “This is true even where the
evidence is likely to be within the possession of the defendant, as long as the plaintiff has had a
full opportunity to conduct discovery.” Id. A plaintiff meets its burden in such a scenario by
presenting any affirmative “evidence from which a jury might return a verdict in [its] favor.” Id.
Unlike the scenario contemplated by the Supreme Court, the fact at issue here (whether
Microsoft was granted the license) is peculiarly within Lambeth’s and its former assignee’s
knowledge and ability to prove. This provides an even stronger than usual reason, especially in
the context of a dispute concerning marking under § 287(a), for Lambeth to shoulder the burden
of producing affirmative evidence from which a jury could conclude that the license option was
not exercised. As Lambeth has failed to point to any affirmative evidence in the record from
which a jury could conclude that Microsoft failed to exercise its option, the Court must conclude
that Microsoft was licensed to use the ꞌ988 patent for purposes of resolving Defendants’
30
summary judgment motions. 20 The Court reaches the same conclusion, for the same reasons,
with respect to Western Digital’s motion. 21
As for Samsung’s license, Lambeth admits that Seagate has proven that Samsung was
licensed to use the ꞌ988 patent (Lambeth’s Response to Western Digital’s MSJ at 28 n.15), and
Lambeth pleaded in its Complaint against Seagate (Civil Action No. 16-538, Doc. 1) that
Seagate’s HDDs “may be covered by a license to the ꞌ988 patent previously obtained by
Samsung Corporation.” (Id. at ¶ 21.) Yet, despite these admissions against Seagate, Lambeth
argues that Western Digital has provided insufficient evidence that Samsung was a licensee for
Western Digital to prevail on summary judgment.
Obviously, Samsung cannot simultaneously have been licensed and unlicensed to
practice the ꞌ988 patent. Nonetheless, the Court need not resolve the question of whether
Western Digital’s evidence is sufficient to show that Samsung exercised its option, nor the
question of whether Lambeth’s admissions to Seagate judicially estop Lambeth from denying the
same facts to Western Digital in the parallel proceeding. As Microsoft began selling products
under its license during a period predating Samsung’s alleged license, and as the Court concludes
20
Seagate also provides the testimony of a Microsoft witness, who testified to seeing a document
indicating that the ꞌ988 patent was added to the addendum of covered patents under the Microsoft
Agreement, as additional evidence that the option was in fact exercised. (Exhibit 12 to Seagate’s
SOF at 16-17.) Lambeth argues that Seagate’s attempt to prove the contents of the document
triggering the license, if such a document exists, would violate Federal Rule of Evidence 1002.
(Id. (“An original writing . . . is required in order to prove its contents unless these rules or a
federal statute provide otherwise.”).) This argument misstates the nature of what Seagate is
trying to prove. Seagate is trying to prove that Microsoft had a license, not the content of any
particular document used to trigger the license. A witness’s testimony that he was personally
aware that the ꞌ988 patent was licensed to Microsoft is relevant to show that Microsoft had such a
license.
21
Western Digital’s motion relies on the same evidence as Seagate’s motion, and Lambeth’s
response to Western Digital’s motion makes the same counterarguments as its response to
Seagate’s motion.
31
that § 287(a)’s damages bar runs in favor of Seagate and Western Digital from the date Microsoft
began selling such products, the period of available damages is the same regardless of whether
Samsung had a license. Specifically, Defendants allege that Microsoft began selling licensed
products practicing the invention on or about December 19, 2010 and that Samsung began
selling licensed products practicing the invention on or about March 2, 2011. The resolution of
Samsung’s license status is thus immaterial to resolving Defendants’ summary judgment
motions, and the Court need not opine on that matter. 22
2. Application of § 287(a)’s damages bar to a sales interlude
Lambeth argues that, after patentees or licensees sell an unmarked product practicing the
invention, the damages bar lifts during a period in which they are no longer selling the product.
Lambeth notes that there is no opportunity for a patentee or licensee to mark a product during
such a sales interlude, suggesting that it would be improper and unfair to bar damages during a
sales interlude. As there is no binding authority addressing this situation, the Court will consider
the parties’ arguments and the persuasive authorities on which they rely.
Lambeth relies on Wine Railway Appliance Co. v. Enterprise Railway Equipment Co.,
297 U.S. 387 (1936), and American Medical Systems, Inc. v. Medical Engineering Corp., 6 F.3d
1523 (Fed. Cir. 1993). Those cases differ significantly from the instant suits; neither of
Lambeth’s cases address a scenario in which a licensed, patented product was sold without
marking during the pre-suit period without a subsequent cure during the pre-suit period. Even
so, the reasoning in those cases sheds light on the question.
22
For purposes of summary judgment, the parties do not dispute that Microsoft and Samsung
sold unmarked products practicing the ꞌ988 patent during the pre-suit period; the sole areas of
factual dispute concerning marking are whether Microsoft and Samsung were licensed and
whether Defendants were notified of their infringement.
32
In Wine Railway Appliance Co., neither the patentee “nor another with its consent” had
ever manufactured or sold a product under the patent. 297 U.S. at 393. The Court held that a
patentee’s or assignee’s duty to mark or inform an infringer takes effect only after the patentee or
assignee has made or sold a product practicing the patent. Id. at 395. The Court’s reasoning
relied on the structure of the then-applicable statute, which presented two duties, both contingent
on the existence of a product for sale. Under the prior statute, a patentee had a duty to mark, and
if the party failed to mark its patented products, then it had duty to notify an infringer or else face
a bar to damages. Because it would be impossible to mark a nonexistent product, both the initial
duty to mark and the sub-contingent duty to notify did not arise, and the damages bar had no
application, in the event a patentee or licensee never sold a product practicing the invention. Id.
That logic fundamentally changes once a patentee or licensee sells a product practicing
the invention. In that case, selling the product would trigger the duty to mark or inform, and the
seller would have an opportunity to perform and to avoid the bar. While marking under the
current statute is an option rather than a duty, Rembrandt Wireless Technologies, LP v. Samsung
Electronics Co., Ltd., 853 F.3d 1370, 1383 (Fed. Cir. 2017), a similar logic applies: selling the
patented product is the key event that triggers the application of the damages bar and the option
to either mark or provide notice in order to avoid the bar, cf. 35 U.S.C. § 287(a) (“Patentees, and
persons making, offering for sale, or selling within the United States any patented article for or
under them . . . may give notice to the public that the same is patented . . . [by marking.] In the
event of failure so to mark, no damages shall be recovered . . . except on proof that the infringer
was notified.”).
In American Medical Systems, the Court of Appeals for the Federal Circuit held that the
damages bar lifts once public compliance with marking begins, even if the product was
33
previously sold unmarked. 6 F.3d at 1537. The court looked to the text of the statute, which
does not specify a “time limit by which marking must begin” and also its purpose “of
encouraging marking to provide notice to the public.” Id. Both considerations weighed in favor
of finding that the damages bar lifts once compliance with marking begins. Id. Here, however,
both the text of the statute, which does not provide a mechanism for the bar to lift automatically
during a sales interlude, and its purpose—as explained below—weigh against finding that the
damages bar lifts.
Lambeth also cites two district court cases that provide some help to its cause, but which
are ultimately unavailing. 23 In Refac Electronics Corp. v. A & B Beacon Business Machines
Corp., 695 F. Supp. 753 (S.D.N.Y. 1988), the district court employed language suggesting that a
damages bar would lift during a sales interlude, id. at 755 (“a patentee with an unutilized patent
may do nothing before a suit to collect damages for infringement”), but the court had no
occasion to delimit the damages period due to disputed facts, id. at 756.
Medical Graphics Corp. v. SensorMedics Corp., 1995 WL 523633 (D. Minn. June 5,
1995), is directly on point. The district court lifted the damages bar during the sales interlude
period between 1986 and 1994. Id. at *1, *3 (the patented product had been sold unmarked by
an assignee from 1983 to 1986, and the suit was initiated in 1994). That court’s reasoning,
however, is not persuasive. The court relied on the principle, drawn from Wine Railway
Appliance Co., that a statute should not be read to impose an impossible duty, such as a duty to
mark a product that does not exist.
23
Lambeth also cites WiAV Solutions LLC v. Motorola, Inc., 732 F. Supp. 2d 634 (E.D. Va.
2010), which finds that the damages bar does not come into effect before the opportunity to mark
under § 287(a) initially arises, id. at 639, a situation that engages the reasoning of Wine Railway
Appliance Co. because the patentee would have no chance, at any point in time, to comply with
marking.
34
Yet, the statutory duty imposed on the patentee in Medical Graphics Corp., and on
Lambeth in this case, is far from impossible to perform. The patentee in the relevant scenario
can avoid the damages bar by marking products during the sales period, making reasonable
efforts to ensure compliance with marking during the sales period, or by providing actual notice
to an infringer either during the sales period or after the sales period ends. Applying the
damages bar to a patentee that fails to avail itself of those opportunities is not, as Lambeth
contends, unfair.
Moreover, allowing a patentee or licensee to defeat the marking requirement at will by
stopping sales of an unmarked product runs contrary to § 287(a)’s purpose of encouraging
marking in order to provide public notice of an invention. See Am. Med. Sys., Inc., 6 F.3d at
1537; see also Rembrandt Wireless Techs., LP, 853 F.3d at 1383 (the three purposes of the
marking statute are: “1) helping to avoid innocent infringement; 2) encouraging patentees to give
notice to the public that the article is patented; and 3) aiding the public to identify whether an
article is patented” (quoting Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1443 (Fed. Cir.
1998)).
Several district courts have reached the same conclusion. E.g., Horatio Washington
Depot Techs. LLC v. TOLMAR, Inc., 2018 WL 5669168, at *2 (D. Del. Nov. 1, 2018) (“if a
patentee produces or sells an unmarked product—but then later ceases such production/sales—it
may still not collect damages thereafter for infringement until it takes active steps to address the
failure to mark”); Arctic Cat Inc. v. Bombardier Recreational Prods., Inc., 334 F. Supp. 3d 1238,
1248 (S.D. Fla. 2018) (“Arctic Cat II”) (rejecting a reading of § 287(a) that would lift the
damages bar during a sales interlude as contrary to the purposes identified in Rembrandt
Wireless Technologies, LP, 853 F.3d at 1383); Lambda Optical Solutions, LLC v. Alcatel-
35
Lucent USA Inc., 2015 WL 5470175, at *5 (D. Del. July 29, 2015) (“if a patentee-plaintiff were
able to return to the favorable status of a non-producing patentee simply by halting production of
unmarked product, this would not encourage patentees in the first instance to give notice to the
public that the article is patented” (internal quotation marks and citation omitted)).
The Court agrees with those district courts that apply the damages bar to a sales interlude,
and the Court thus finds that the damages bar under § 287(a) applies to the period after unmarked
sales have begun, even if those sales subsequently cease, until the patentee either cures the
marking defect or notifies the infringer. If a patentee wishes to have damages accrue during a
period of no sales after failing to mark, the patentee may achieve this by providing appropriate
notice to the infringer.
3. Actual notice of infringement
Lambeth contends that it provided adequate notice, but submits no evidence that it
communicated notice to Seagate or Western Digital in an appropriate form.
According to Lambeth, Seagate and Western Digital had actual notice of their alleged
infringement via an indemnification request sent by Toshiba, a defendant in a third patent
infringement lawsuit filed by Lambeth that was parallel to the instant suits until it settled prior to
claim construction. (Lambeth’s Response to Seagate’s MSJ at 29; Lambeth’s Response to
Western Digital’s MSJ at 32-33.)
As a matter of law, this method of notice is insufficient. Amsted Indus., 24 F.3d at 187
(“notice must be an affirmative act on the part of the patentee which informs the defendant of his
infringement”); see Gart v. Logitech, Inc., 254 F.3d 1334, 1346 (Fed. Cir. 2001) (“as long as the
communication from the patentee provides sufficient specificity regarding its belief that the
recipient may be an infringer, the statutory requirement of actual notice is met” (emphasis
36
added)). To the extent that Lambeth relies on Lucent Technologies, Inc. v. Gateway, Inc., 580 F.
Supp. 2d 1016, 1059 (S.D. Cal. 2008), aff’d in part and vacated in part on other grounds, 580
F.3d 1301 (Fed. Cir. 2009), for any principle to the contrary, that reliance is misplaced. The
district court in Lucent Technologies, Inc. addressed whether, following an in-person meeting
between the patentee and the alleged infringer at which the patentee communicated directly with
the accused infringer, an indemnification letter sent from the alleged infringer to a third party
could be taken as evidence of the alleged infringer’s actual notice at the prior meeting. The
present situation is entirely distinct, with no form of pre-suit direct communication from the
patentee to the alleged infringer regarding infringement. 24 As Lambeth presents no evidence that
it provided actual notice of infringement to Seagate or Western Digital, Seagate and Western
Digital are entitled to summary judgment on lack of pre-suit damages from the period
commencing as soon as Microsoft’s unmarked, licensed products practicing the invention were
offered for sale or imported into the United States. See 35 U.S.C. § 287(a). 25
24
Lambeth also cites Wokas v. Dresser Industries, Inc., 978 F. Supp. 839, 844-45 (N.D. Ind.
1997), which deals with an ambiguous communication from the patentee to the alleged infringer
and is thus inapplicable for the same reasons.
25
Lambeth argues that there is no requirement to mark when the patented invention is merely a
minor component of a larger device, particularly when the seller has myriad products, each of
which may be covered by many licensed patents, such that determining which products need
marking for which patents is impractical. (Lambeth’s Response to Western Digital’s MSJ 32
n.18.) The Court sees no reason to adopt such an exception. No impracticality exception exists
in the text of 35 U.S.C. § 287, Lambeth has cited no cases identifying such an exception, and an
exception of that nature would provide carte blanche to sellers wishing to evade marking
requirements, defeating the public notice functions of marking.
37
V.
Lambeth’s Motions for Partial Summary Judgment against Seagate and
Western Digital
Lambeth’s motions for summary judgment against Seagate and Western Digital cover a
wide range of affirmative defenses asserted against Lambeth. The Court will address each
category of affirmative defense and will conclude, for the most part, that Lambeth’s motions
must be denied. However, the Court will grant Lambeth’s summary judgment motion against
Seagate, in part, as to the affirmative defenses of implied license, equitable estoppel, waiver, and
unclean hands, and will grant Lambeth’s summary judgment motion against Western Digital, in
part, as to implied license and unclean hands.
A. Whether Lambeth is entitled to summary judgment on withdrawn affirmative defenses
As an initial matter, Lambeth moves for partial summary judgment on several of Seagate
and Western Digital’s defenses that have been withdrawn. 26 Seagate and Western Digital
respond that it would be improper for the Court to render judgment on their withdrawn, and
therefore moot, defenses. The Court agrees with Defendants, and will deny Lambeth’s motion
for summary judgment on any withdrawn affirmative defenses. See Alcon Research Ltd. v. Barr
Labs., Inc., 745 F.3d 1180, 1193 (Fed. Cir. 2014) (“[t]he scope of any judgment should conform
to the issues that were actually litigated”); SanDisk Corp. v. Kingston Tech. Co., 695 F.3d 1348,
1353 (Fed. Cir. 2012) (withdrawn claims, regardless of the mechanism used to withdraw them,
are no longer at issue in the litigation).
26
As to Seagate, these affirmative defenses are: invalidity based on anticipation or obviousness
under 35 U.S.C. §§ 102 or 103; invalidity under 35 U.S.C. § 116 (omission of joint inventors);
and laches. (Lambeth’s Brief in Support of Motion for Summary Judgment, “Lambeth’s MSJ
Brief Against Seagate,” at 3, Civil Action No. 16-538, Doc. 172.) As to Western Digital, these
affirmative defenses are: invalidity under 35 U.S.C. § 116; uncorrectability of inventorship; lack
of standing; and laches. (Lambeth’s MSJ Brief Against Western Digital at 23.) Summary
judgment will be denied as to each of those defenses.
38
B. Whether Lambeth is entitled to summary judgment on issues concerning ownership of
the ꞌ988 patent
Several prongs of Lambeth’s motions rely on its contention that it owns the ꞌ988 patent or
that Seagate and Western Digital were not licensed or otherwise authorized to use the ꞌ988
patent. Specifically, Lambeth argues that it is entitled to summary judgment on Seagate’s
affirmative defenses of standing, express license, implied license, equitable estoppel, waiver and
release, and on Western Digital’s affirmative defense of express license and implied license
(collectively, the “ownership-related affirmative defenses”).
Seagate and Western Digital dispute ownership, arguing that Carnegie Mellon University
(“CMU”) owns the ꞌ988 patent under the agreements and policies governing Dr. David N.
Lambeth’s (“Dr. Lambeth’s”) relationship to CMU and its Data Storage Systems Center
(“DSSC”). They also argue that, pursuant to those same agreements and policies, they are
licensed to use the ꞌ988 patent because they are external sponsors of the DSSC with agreements
granting them licenses to DSSC inventions. Seagate further argues, as alternate bases for its
license or release concerning the ꞌ988 patent, that its agreements with Microsoft, Samsung, Cisco
and Oracle grant it rights to use the ꞌ988 patent via those entities’ agreements with Acacia, which
provide authorization to “Authorized Third Parties.”
On Lambeth’s motions for summary judgment, the question is whether Defendants’
evidence, taken in a light most favorable to Defendants, is sufficient to convince a factfinder of
at least one theory supporting each ownership-related affirmative defense. The Court will take
each ownership-related affirmative defense in turn.
1. Standing and express license
As to standing and express license, if Defendants have adduced sufficient evidence that
CMU owned the patent, then Lambeth’s motions for summary judgment must be denied. Under
39
present circumstances, Defendants have provided evidence that the ꞌ988 belongs to CMU and is
expressly licensed to Seagate and Western Digital through CMU’s ownership. Accordingly,
Lambeth’s motions will be denied as to standing and express license.
Defendants’ evidence, taken in a light most favorable to Defendants and drawing all
reasonable inferences in Defendants’ favor, shows the following. Dr. Lambeth agreed to be
“[s]ubject to . . . the 1985 Intellectual Property Policy” (the “CMU IP Policy”) in his August 25,
1989 Faculty Appointment with CMU. (Seagate’s Counter-SOF Exhibit 44; Western Digital’s
Counter-SOF Exhibit 145.) The CMU IP Policy states in relevant part that “intellectual property
created at the university” is owned by external sponsors if an external sponsorship agreement
with CMU says so, specifically using the following language:
In order of precedence, ownership of the intellectual property shall be as follows:
3.1 Externally Sponsored Work
Ownership Provisions: Intellectual property created as a result of work conducted under
an agreement between an external sponsor and the university that specifies the ownership
of such intellectual property shall be owned as specified in said agreement.
(Seagate’s Counter-SOF Exhibit 43 at § 3; Western Digital’s Counter-SOF Exhibit 146 at § 3.)
Seagate and Western Digital were external sponsors of the DSSC at CMU at the relevant times,
with applicable corporate sponsorship agreements that provide (in mutually identical language)
that:
All inventions, whether or not patentable, conceived or first reduced to practice in the
course of or under this Agreement by any Center personnel while engaged in the
activities of the Center (hereinafter referred to as the “Inventions”) shall become the
property of the University. The University shall grant to the Corporation [that is, to
Seagate or IBM, with Western Digital as the successor in interest to IBM] and all other
Associates a worldwide, irrevocable, royalty-free license to make, have made, use, or sell
the product of the Inventions.
40
(Seagate’s Counter-SOF Exhibit 40 at § 2.b; Western Digital’s Counter SOF Exhibit 135 at
§ 2.b; id. at § 11 (“This Agreement shall bind and inure to the benefit of the Corporation [IBM]
and the University, and their successors and assigns.”).) Under this language, all inventions
conceived or first reduced to practice by Center personnel engaged in Center activities, during
the course of the sponsorship agreement, belong to CMU and must be licensed to the applicable
external sponsor. The question is whether Defendants have evidence to show that Dr. Lambeth
was “Center personnel” “engaged in the activities of the Center” at the time of the invention
underlying the ꞌ988 patent. They do.
Dr. Lambeth was the Associate Director of the DSSC for ten years until his resignation
from the DSSC on August 31, 1999. (Seagate’s Counter-SOF Exhibits 38, 45; Western Digital’s
Counter SOF Exhibit 144.) He took a leave of absence from his faculty position at CMU from
September 1999 through August 2001. (Seagate’s Response to Lambeth’s SOF at ¶ 90; Western
Digital’s Response to Lambeth’s SOF at ¶ 171.) Still, in and around April 2000, the period of
invention underlying the ꞌ988 patent, Dr. Lambeth was receiving salary support for his five
advisees through the DSSC and CMU. (Seagate’s Counter-SOF Exhibit 46; Western Digital’s
Counter SOF Exhibit 154.) In addition, throughout his leave, he continued to visit campus, use
CMU equipment, and discuss topics relevant to the ꞌ988 patent—which incorporates prior work
owned by the DSSG—with CMU students and staff. (Western Digital’s Counter SOF Exhibits
158-160.)
As a result, there is evidence from which a jury could conclude that Dr. Lambeth was
DSSG “personnel” engaged in DSSG activities at the time of his invention. Under the terms of
the applicable sponsorship agreements and by virtue of Dr. Lambeth’s appointment agreement,
41
this would mean that CMU became the owner of the ꞌ988 patent, and that Seagate and Western
Digital were granted rights to the ꞌ988 patent. 27
Standing to sue for patent infringement requires title to the patent. Lans v. Digital Equip.
Corp., 252 F.3d 1320, 1328 (Fed. Cir. 2001); Filmtec Corp. v. Allied-Signal, Inc., 939 F.2d
1568, 1571 (Fed. Cir. 1991). As Seagate and Western Digital raise a genuine dispute about
ownership, Seagate’s argument that Lambeth lacks standing cannot be dismissed on summary
judgment.
Likewise, Seagate and Western Digital’s defenses of express license are valid to the
extent Defendants were expressly licensed to use the ꞌ988 patent via their agreements with CMU,
and those defenses cannot be dismissed because Defendants’ evidence is sufficient to show that
they were so licensed. 28
Lambeth argues that the language of the sponsorship agreements with CMU indicates a future
obligation to transfer a license rather than a present assignment of the license, and that no license
was ever transferred. However, the Court need not read the language of the sponsorship
agreements so narrowly. See Carnegie Mellon Univ. v. Marvell Tech. Grp., LTD, 906 F. Supp.
2d 399, 410-11 (W.D. Pa. 2012) (Fischer, J.) (interpreting the same language in the CMU
external sponsorship agreement with Seagate and finding that: “The language in the Agreement
granting rights to Seagate and the other licensees is very broad. . . . [C]onsidering the agreement
as a whole, and reading the clauses together, § 2.b. can only be read to mean that the licensees
were granted the unrestrained right to sell products embodying the inventions created at the
DSSC.” (emphasis added)). In particular, “shall become the property of the University” is a
clear grant to CMU, and “[CMU] shall grant to the Corporation,” in the context of the agreement
specifying how rights are to be apportioned among the relevant entities, both indicate a present
assignment of rights. Not one of Lambeth’s cases addresses such clear contractual language.
E.g., Bd. of Trs. of Leland Stanford Jr. Univ. v. Roche Molecular Sys., 563 U.S. 776, 786 (2011)
(interpreting the Bayh-Dole Act rather than contractual language and recognizing that the BayhDole Act applies “unless there is an agreement to the contrary”); Advanced Video Techs. LLC v.
HTC Corp., 879 F.3d 1314, 1317-18 (Fed. Cir. 2018) (contract providing that employee “will
hold in trust” her rights to her invention and then “will assign” her rights to her employer did not
show immediate assignment).
28
Seagate also presents direct evidence of its agreements with Microsoft, Samsung, Cisco and
Oracle to support alternate express license arguments—the Court will address the parties’
arguments concerning those agreements below in its discussion of release as an affirmative
defense.
27
42
2. Implied license, equitable estoppel and waiver
Nonetheless, three of the ownership-related affirmative defenses fail because Defendants
have offered no evidence to establish that they chose to produce the accused devices in reliance
on Dr. Lambeth’s conduct or representations to them. As reliance is a required element of
implied license (under theories applicable to the instant facts), equitable estoppel and waiver,
those defenses will be dismissed.
As to implied license, “[a]ny language used by the owner of the patent, or any conduct on
his part exhibited to another from which that other may properly infer that the owner consents to
his use of the patent in making or using it, or selling it, upon which the other acts, constitutes a
license and a defense to an action in tort.” De Forest Radio Tel. Co. v. United States, 273 U.S.
236, 241 (1927) (emphasis added). The Court of Appeals for the Federal Circuit has established
multiple paths leading to an implied license under the Supreme Court’s language in De Forest
Radio Telephone Co. The only path relevant to the instant facts is the one comparable to
equitable estoppel, in which: (1) the patentee, through statements or conduct, affirmatively grants
the infringer permission to make, use or sell the invention; (2) the alleged infringer is aware of
that permission; and (3) the alleged infringer acts in reliance on that permission. See Wang
Labs., Inc. v. Mitsubishi Elecs. Am., Inc., 103 F.3d 1571, 1581 (Fed. Cir. 1997) (“The primary
difference between the estoppel analysis in implied license cases and the analysis in equitable
estoppel cases is that implied license looks for an affirmative grant of consent or permission to
make, use, or sell: i.e., a license.”); Bandag, Inc. v. Al Bolster’s Tire Stores, Inc., 750 F.2d 903,
925 (Fed. Cir. 1984) (infringer must “have been aware” of the actions constituting permission for
implied license to apply); Stickle v. Heublein, Inc., 716 F.2d 1550, 1559 (Fed. Cir. 1983)
43
(implied license requires that “[o]ne must have been led to take action by the conduct of the
other party”).
As to equitable estoppel itself, that defense requires that: “(1) the patentee engages in
misleading conduct that leads the accused infringer to reasonably infer that the patentee does not
intend to assert its patent against the accused infringer; (2) the accused infringer relies on that
conduct; and (3) as a result of that reliance, the accused infringer would be materially prejudiced
if the patentee is allowed to proceed with its infringement action.” John Bean Techs. Corp. v.
Morris & Assocs., 887 F.3d 1322, 1327 (Fed. Cir. 2018); see also A.C. Aukerman Co. v. R.L.
Chaides Constr. Co., 960 F.2d 1020, 1041 (Fed. Cir. 1992).
Similarly, waiver requires that the patentee’s “conduct was so inconsistent with an intent
to enforce its rights as to induce a reasonable belief that such right has been relinquished.”
Hynix Semiconductor v. Rambus, 645 F.3d 1336, 1348 (Fed. Cir. 2011) (emphasis added).
Saying that a patentee’s conduct induced an alleged infringer by demonstrating the patentee’s
lack of intent to enforce the patent is, for relevant purposes, another way of saying that the
patentee’s conduct caused the alleged infringer to rely on the patentee’s effective representation
that infringement would not be challenged. In other words, reliance is an essential component of
waiver just as it is an essential component of implied license and equitable estoppel.
Simply put, Seagate and Western Digital cite no evidence that they relied on
Dr. Lambeth’s actions when they chose to produce or continue producing the accused devices, or
that they relied on any particular communication or lack thereof from Dr. Lambeth.
Seagate responds to Lambeth’s arguments on equitable estoppel and waiver by stating
that “when Seagate launched hard disk drives (‘HDDs’) in 2006 with new write heads it had
independently developed, there was no reason for Seagate to concern itself with any [intellectual
44
property] (including the ꞌ988 patent) invented by Seagate’s sponsored researcher.” (Seagate’s
Response to Lambeth’s MSJ at 12.) This is a far cry from claiming reliance on “Seagate’s
sponsored researcher.” Yet, immediately following that sentence, Seagate claims that “Seagate’s
reliance was only reinforced by the passage of time and Dr. Lambeth’s silence.” (Id.) 29
There is a missing piece in this puzzle: reliance on what? Turning to the portion of
Seagate’s Counter-SOF cited in its brief, this remains a mystery. (See Seagate’s Counter SOF at
¶¶ 95-100.) 30 As a result, Seagate’s affirmative defenses of implied license, equitable estoppel
and waiver must be dismissed at this stage.
Western Digital responds to Lambeth’s argument against implied license by stating that
Western Digital relied on the DSSC policies that were circulated to sponsors and faculty.
(Western Digital’s Response to Lambeth’s MSJ at 20-21.) There is no contention, however, that
Dr. Lambeth supplied those policies to Western Digital or otherwise communicated anything to
Western Digital that could have engendered reliance. As a result, the Court will grant Lambeth’s
summary judgment motion against Western Digital, in part, as to implied license.
3. Release
Lambeth argues that Seagate’s contracts with entities that obtained rights via a prior
owner of the ꞌ988 patent (Acacia) fail to provide Seagate with release from liability, or its
29
Seagate’s response concerning implied license cites no evidence bearing on reliance.
(Seagate’s Response to Lambeth’s MSJ at 13-15.)
30
Paragraphs 95 and 96 concern communications with entities other than Dr. Lambeth regarding
the DSSC, which are not relevant to the question of reliance on Dr. Lambeth’s statements or
actions. Paragraph 97 shows that Dr. Lambeth believed Seagate was infringing “in the
2009/2010 time frame.” Paragraph 98 shows that Dr. Lambeth met with a Seagate representative
on May 8, 2009 at “the InterMag 2009 conference,” and that he discussed Seagate’s products but
did not mention either an infringement action or the ꞌ988 patent. Paragraphs 99 and 100 indicate
Lambeth’s filing of the instant suit on April 29, 2016 without prior notice of infringement to
Seagate. None of these facts, individually or collectively, is evidence from which a factfinder
could infer reliance on Dr. Lambeth’s actions, communications or silence.
45
effective equivalent. The Court will examine Seagate’s evidence to determine its sufficiency to
show release.
As to Microsoft, the Court has already discussed the Microsoft Agreement with Acacia,
and Seagate’s evidence bearing on Microsoft’s license to the ꞌ988 patent. The Court concluded
that the evidence is sufficient to show that Microsoft had a license to the ꞌ988 patent. In addition
to the Microsoft Agreement, Seagate presents evidence of Acacia’s agreements with Samsung
(Seagate’s Counter-SOF Exhibit 18, “Samsung Agreement”), Cisco (Seagate’s Counter-SOF
Exhibit 25, “Cisco Agreement”), and Oracle (Seagate’s Counter-SOF Exhibit 28, “Oracle
Agreement”). Each of those agreements grants Acacia’s counterparty a license, which includes
the right for the counterparty to authorize certain third parties (such as suppliers), via a license or
release, to make products under the license. (E.g., Microsoft Agreement at §§ A2.5 (“Rights of
Authorized Third Parties”), A3.6 (release as to authorized third parties); Samsung Agreement at
§ A2.5 (“Rights of Authorized Third Parties”); Cisco Agreement at §§ 2.3 (covenant not to sue
Cisco’s authorized third parties), 3.2 (release as to authorized third parties); Oracle Agreement at
§§ A2.5 (“Rights of Authorized Third Parties”), A3.6 (release as to authorized third parties).)
Seagate presents evidence that it supplied HDDs to Microsoft, Samsung, 31 Cisco, and
Oracle and that it satisfied the respective contractual requirements under each agreement for
authorized third party status at the relevant times. (See generally Seagate’s Counter-SOF at ¶¶
105-133.) As a result, Seagate presents evidence that it was authorized, either through a release
or an effectively equivalent mechanism, to produce devices practicing the ꞌ988 patent.
31
Seagate also acquired Samsung’s HDD business in December 2011. (Seagate’s Counter-SOF
at ¶ 117.)
46
Lambeth raises several arguments to contest Seagate’s authorization via each contract.
Those arguments blend contested contract interpretations with disputes about factual issues, such
as, for example, about whether licensing options in the relevant agreements were exercised,
whether Seagate’s conduct was sufficient for Seagate to qualify under the authorized third party
definitions, and whether the transfer of rights when Seagate acquired Samsung’s HDD business
encompassed the acquisition of releases under the applicable contract language. As resolving
these disputes would require resolving disputed questions of fact, and as Seagate’s evidence is
sufficient to meet its burden on summary judgment, the Court will deny Lambeth’s motion as to
Seagate’s affirmative defense of release. 32
C. Whether Lambeth is entitled to summary judgment on unclean hands
Lambeth argues that Seagate and Western Digital have failed to provide any evidence to
support a defense of unclean hands, requiring summary judgment against that defense. Lambeth
also argues that Seagate has refused to provide a Federal Rule of Civil Procedure 30(b)(6)
witness on the topic of unclean hands, precluding that defense.
Seagate and Western Digital present distinct theories. Seagate argues that there is
evidence that Lambeth licensed the invention to Seagate and then sued to extract further payment
from Seagate. Cf., e.g., Sun Microsystems, Inc. v. Versata Enter., Inc., 630 F. Supp. 2d 395, 410
32
Lambeth requests partial summary judgment against Seagate’s defense of release stemming
from Seagate’s agreement with SK Hynix, but Seagate concedes that it made no sales to SK
Hynix from 2010 to 2017, (Seagate’s Response to Lambeth’s MSJ at 18 n.8), rendering that
portion of Lambeth’s motion moot. Lambeth also requests partial summary judgment against
Seagate’s defenses of release, patent exhaustion, and double recovery stemming from a
settlement agreement between Lambeth and TDK/Toshiba. Concerning the agreement with
TDK/Toshiba, Lambeth disputes only the sufficiency of Seagate’s evidence as to the quantity of
subject devices sold in the United States. Seagate has, however, presented evidence that it sold
subject devices in the United States, (Seagate’s Counter SOF at ¶ 135), and the determination of
quantity, for purposes of calculating damages, is not appropriate for resolution on summary
judgment.
47
(D. Del. 2009) (“If indeed Sun has sought the Court’s relief for infringement . . . after it granted
Versata a license . . . , then Sun may be guilty of conduct involving at least bad faith, directly
related to its patent infringement claims, injurious to Versata, and affecting the balance of the
equities between the parties [thus satisfying the elements of unclean hands].”). However,
Seagate’s response cites no evidence in the record to support the notion that Lambeth
deliberately licensed the patent to Seagate, or any other action on the part of Lambeth that could
constitute bad faith when paired with this lawsuit. As a result, Seagate has failed to carry its
burden on summary judgment to offer evidence of unclean hands.
Western Digital argues that there is evidence that Dr. Lambeth deliberately failed to
disclose material information to the Patent and Trademark Office (“PTO”) during the
prosecution of his patent, citing 1st Media, LLC v. Electronic Arts, Inc., 694 F.3d 1367, 1372
(Fed. Cir. 2012), which discusses the elements of an inequitable conduct defense. While that
may be a defense supported by some evidence in the record, Western Digital’s argument
conflates the defense of inequitable conduct with the separate defense of unclean hands.
Western Digital did not plead inequitable conduct in its Answer (Civil Action No. 16-541, Doc.
48), and cannot now—after discovery has concluded—assert a surprise affirmative defense
without leave. See Fed. R. Civ. P. 8(c)(1) (“In responding to a pleading, a party must
affirmatively state any avoidance or affirmative defense.”); Fed. R. Civ. P. 9(b) (“In alleging
fraud or mistake, a party must state with particularity the circumstances constituting fraud or
mistake.”); cf. Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1326-27 (Fed. Cir. 2009)
(affirming denial of motion for leave to add inequitable conduct as an affirmative defense
because inequitable conduct must be pled with particularity under Federal Rule of Civil
48
Procedure 9(b), and the proposed pleading was deficient). As a result, the Court also will grant
Lambeth’s motion for summary judgment against Western Digital’s unclean hands defense.
D. Whether Lambeth is entitled to summary judgment on Western Digital’s invalidity
defenses of anticipation and obviousness 33
The Court will address the appropriate legal standards for gauging the invalidity defenses
of anticipation and obviousness, and then determine whether Western Digital has adduced
sufficient evidence for a jury to conclude that the patent is invalid under either theory by clear
and convincing evidence. Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 962 (Fed. Cir. 2001)
(“a moving party seeking to have a patent held not invalid at summary judgment must show that
the nonmoving party . . . failed to produce clear and convincing evidence on an essential element
of a[n invalidity] defense”). The Court will conclude that Lambeth’s motion must be denied as
to Western Digital’s invalidity defenses.
1. Legal standards
Under the applicable version of 35 U.S.C. § 102, 34 a patent is invalid if the
claimed invention is anticipated by a prior invention. Net MoneyIN, Inc. v. VeriSign, Inc., 545
F.3d 1359, 1369 (Fed. Cir. 2008). Specifically, a patent is invalid if “the invention was patented
or described in a printed publication in this or a foreign country or in public use or on sale in this
33
Western Digital has withdrawn its reliance on the Siemens GMR sensor as a prior art reference
in this action, rendering Section III.B of Lambeth’s motion (concerning invalidity based on that
reference) moot. (Western Digital’s Response to Lambeth’s MSJ at 2.) For the reasons stated
above, the Court will deny Lambeth’s summary judgment motion as to affirmative defenses that
have been withdrawn and are therefore moot.
34
The statute has been amended, Leahy-Smith America Invents Act (“AIA”), 125 Stat. 284, 287
(2011), but the claims have an effective filing date in 2001, before the March 16, 2013 trigger
date for the amended statute. See AIA, 125 Stat. at 293. The Court’s references throughout its
analysis refer to the pre-AIA statute.
49
country, more than one year prior to the date of application for patent in the United States.” 35
U.S.C. § 102(b) (2006).
To prove the defense of anticipation, a defendant “must show that the four corners of a
single, prior art document describe every element of the claimed invention.” Net MoneyIN, Inc.,
545 F.3d at 1369 (internal citation and quotation marks omitted). The prior art’s description of
each claim limitation may be express, but a defendant may also prove anticipation by showing
that each limitation “is necessarily present, or inherent, in the single anticipating reference.”
Schering Corp. v. Geneva Pharms., Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003). Anticipation is a
question of fact. Kennametal, Inc. v. Ingersoll Cutting Tool Co., 780 F.3d 1376, 1381 (Fed. Cir.
2015).
A patent may also be invalid if the claimed invention would have been obvious to a
POSITA based on the prior art, pursuant to 35 U.S.C. § 103. The relevant inquiry is as follows:
Under § 103, [1] the scope and content of the prior art are to be determined; [2]
differences between the prior art and the claims at issue are to be ascertained; and [3] the
level of ordinary skill in the pertinent art resolved. Against this background, the
obviousness or nonobviousness of the subject matter is determined. [4] Such secondary
considerations as commercial success, long felt but unsolved needs, failure of others, etc.,
might be utilized to give light to the circumstances surrounding the origin of the subject
matter sought to be patented.
Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966). “[I]t is error to reach a conclusion of
obviousness until all those factors are considered.” Apple Inc. v. Samsung Elecs. Co., Ltd., 839
F.3d 1034, 1048 (Fed. Cir. 2016). As this test reveals, “[o]bviousness is a question of law based
on underlying facts.” Id. at 1047.
2. Anticipation and obviousness
Lambeth argues that Western Digital has failed to provide evidence that any one of the
proffered prior art references meets, or suggests to a POSITA, the claim limitation of uniaxiality.
50
Lambeth reasons that the Court’s claim construction defines uniaxial to mean “[h]aving an
anisotropy energy density function with only a single maximum and a single minimum as the
magnetization angle is rotated by 180 degrees from a physical axis” and Western Digital’s
expert, Dr. Mark Kryder (“Dr. Kryder”), failed to calculate or otherwise show the energy density
function for the prior art references. (Lambeth’s MSJ Brief Against Western Digital at 4-7.)
Western Digital responds that, to the contrary, Dr. Kryder explained how each asserted
prior art reference disclosed each of the claim limitations, including the limitation of uniaxiality.
(Western Digital’s Response to Lambeth’s MSJ Brief at 9-13.) Ticking through five of the
asserted prior art documents, Western Digital traces the portions of its expert testimony that
clarify how those documents reveal uniaxiality in one way or another. For example, as to the
year 2000 “Sun Articles,” Dr. Kryder opined that “Sun discloses a uniaxial structure that will
have an anisotropy energy density function with only a single maximum and a single minimum
as the magnetization angle is rotated by 180 degrees from a physical axis” because “Sun
performed hysteresis loops and found ‘excellent in-plane uniaxial anisotropy.’” (Western
Digital’s Counter-SOF Exhibit 114, “Dr. Kryder’s April 28, 2018 Opening Expert Report,” at
¶ 602 (quoting Sun II at Fig. 5, F9.2.6; Sun I at Fig. 3(b); Sun III at Fig. 5(b)).)
There is no need for the Court to proceed further through Western Digital’s examples.
Western Digital has provided expert testimony explaining how a prior art reference discloses the
disputed claim limitation of uniaxiality, or at least would suggest that limitation to a POSITA. If
a jury were to credit Dr. Kryder’s testimony as to the Sun Articles, it could reasonably conclude
that the Sun Articles describe a uniaxial structure—or at least suggest such a structure—by clear
and convincing evidence, and that the patent is invalid on either anticipation or obviousness
grounds. The Court also notes that the parties’ respective discussions of these issues do not
51
address all of the Graham factors that the Court would have to consider before rendering
judgment on obviousness—however, it is clear from the parties’ briefs and the evidence
discussed above that each of those factors rests on disputed facts, including the scope of the prior
art in comparison to the present claims, the qualifications of a POSITA, and the circumstances
surrounding the origins of the ꞌ988 patent.
As a result, Western Digital’s affirmative defenses of invalidity based on anticipation and
obviousness survive summary judgment.
CONCLUSION
To summarize the Court’s analysis above, all four motions for summary judgment will be
granted in part and denied in part. Seagate and Western Digital’s motions for summary
judgment will be granted as to lack of pre-suit damages accruing once Microsoft began publicly
utilizing its license without marking, but denied as to all remaining grounds. Lambeth’s motions
for summary judgment against Seagate and Western Digital will be granted so as to dismiss the
affirmative defenses of implied license, equitable estoppel, waiver, and unclean hands, but
denied as to all remaining grounds.
Accordingly, for the reasons above, IT IS ORDERED that:
Seagate’s Motion for Summary Judgment (Civil Action No. 16-538, Doc. 150) is
GRANTED in part as to lack of pre-suit damages accruing after Microsoft began selling products
under its license to the ꞌ988 patent, and DENIED in part as to inadequate written description and
non-infringement.
Lambeth’s Motion for Summary Judgment against Seagate (Civil Action No. 16-538,
Doc. 157) is GRANTED in part as to implied license, equitable estoppel, waiver, and unclean
hands, and DENIED in part as to all remaining grounds.
52
Western Digital’s Motion for Summary Judgment (Civil Action No. 16-541, Doc. 158) is
GRANTED in part as to lack of pre-suit damages accruing after Microsoft began selling products
under its license to the ꞌ988 patent, and DENIED in part as to lack of enablement and noninfringement.
Lambeth’s Motion for Summary Judgment against Western Digital (Civil Action No. 16541, Doc. 159) is GRANTED in part as to implied license and unclean hands, and DENIED in
part as to all remaining grounds.
The parties’ requests for oral argument are DENIED pursuant to the undersigned’s
Practices and Procedures, Section II.B.
IT IS SO ORDERED.
June 24, 2019
s/Cathy Bissoon
Cathy Bissoon
United States District Judge
cc (via ECF email notification):
All Counsel of Record
53
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?