Eolas Technologies Incorporated v. Adobe Systems Incorporated et al

Filing 1020

REPLY to Response to Motion re 873 SEALED PATENT MOTION for Summary Judgment of No Enhanced Damages for Willful Infringement filed by Adobe Systems Incorporated, Amazon.com Inc., CDW Corporation, Citigroup Inc., Google Inc., J.C. Penney Corporation, Inc., Staples, Inc., The Go Daddy Group, Inc., Yahoo! Inc., YouTube, LLC. (Jones, Michael)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION

EOLAS TECHNOLOGIES
INCORPORATED,
PLAINTIFF,
v.
ADOBE SYSTEMS INC., et al.,
DEFENDANTS.

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Civil Action No. 6:09-CV-446-LED

JURY TRIAL DEMANDED

REPLY IN SUPPORT OF DEFENDANTS’ MOTION FOR
SUMMARY JUDGMENT OF
NO ENHANCED DAMAGES FOR WILLFUL INFRINGEMENT

Although Eolas argues that it “does not seek enhanced damages based solely on the
Defendants’ post-filing conduct,”1 Eolas has already stipulated that it has sustained zero damages
for pre-suit conduct.2 There can thus be no willfulness damages for pre-suit conduct; “three
times zero is still zero.”3 The only remaining question is whether enhanced damages are
available for post-suit conduct.4 Under Seagate, they are not. Seagate makes clear that a
preliminary injunction is the remedy for post-filing willful infringement, and that a patentee who
makes no attempt to secure one is not entitled to enhanced damages for post-filing conduct.5
Having chosen not to move for a preliminary injunction, Eolas may not now seek to “enhance”
any post-filing compensatory damages.
There is also no merit to Eolas’ arguments that, under the GSI case, Eolas is somehow
exempt from Seagate because of Defendants’ alleged pre-suit patent knowledge.6 Eolas’
1

See 9/28/2011 Eolas’ Response In Opposition To Defendants’ Motion For Summary Judgment Of No Enhanced
Damages For Willful Infringement (“Eolas’ Response”) (D.N. 990) at 2.
2
See 8/17/2011 Joint Stipulation of No Pre-Suit Damages (D.N. 867).
3
See, e.g., GSI Group, Inc. v. Sukup Mfg. Co., 591 F. Supp. 2d 977, 983-84 (C.D. Ill. 2008) (holding pre-suit
enhanced damages unavailable for patents as to which pre-suit compensatory damages unavailable; “[A]vailable
compensatory damages for Sukup’s alleged pre-filing infringement of these patents is zero, and three times zero is
still zero. GSI, therefore, cannot recover enhanced damages for the pre-filing infringement of these patents.”).
4
Eolas’ arguments about 35 U.S.C. § 287 are a red herring. Eolas’ inability to collect pre-suit enhanced damages
results from its stipulation that it sustained zero damages for pre-suit conduct, and its inability to collect post-suit
enhanced damages results from its failure to seek a preliminary injunction..
5
See In re Seagate Tech., LLC, 497 F.3d 1360, 1374 (Fed. Cir. 2007) (en banc) (“[A] patentee can move for a
preliminary injunction, which generally provides an adequate remedy for combating post-filing willful
infringement. A patentee who does not attempt to stop an accused infringer’s activities in this manner should not
be allowed to accrue enhanced damages based solely on the infringer’s post-filing conduct.” (emphasis added)
(citations omitted)); see also, e.g., Baxter Healthcare Corp. v. Fresenius Med. Care. Holdings, Inc., No. C 07-1359,
2010 U.S. Dist. LEXIS 21778 at *49-50 (N.D. Cal. Feb. 19, 2010) (holding no enhanced damages for post-suit
conduct available under Seagate where patentee failed to move for preliminary injunction).
6
This argument necessarily applies only to the ‘906 patent. The ‘985 patent issued on October 6, 2009—the day
Eolas filed this suit. See U.S. Patent No. 7,599,852 B2; 10/6/2009 Complaint (D.N. 1). Further, Eolas’ “distinction”
of Anascape and Webmap on the basis that they “involved patentees who had no evidence of pre-suit knowledge”
(Eolas’ Motion at 3) completely mischaracterizes Anascape and ignores Webmap’s reliance on Anascape. Contrary
to Eolas’ Motion, the Anascape plaintiff—represented by the same counsel representing Eolas here—argued that
defendants had pre-suit knowledge. See Anascape, Ltd. v. Microsoft Corp., No. 9:06-CV-158, 2008 WL 7182476, at
*3 (E.D. Tex. Apr. 25, 2008) (Clark, J.) (“Anascape argues that a reasonable jury could conclude that Defendants
had pre-suit knowledge of the [patent-in-suit] before Anascape filed the lawsuit.”). The Webmap court relied
heavily on Anascape (and referred to the Anascape plaintiff’s failed attempt to establish pre-suit patent knowledge)
and held that the Webmap plaintiff, having failed to seek a preliminary injunction, was not entitled to post-suit
enhanced damages under Seagate. See Webmap Techs., LLC v. Google, Inc., No. 2:09-CV-343-DF-CE, 2010 WL
3768097, at *3 (E.D. Tex. Sept. 10, 2010). Further, Eolas’ only “distinction” of Cordance is that there, the court
discussed facts surrounding plaintiff’s willfulness allegations before rejecting plaintiff’s arguments. But there,

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carefully-chosen quotes from GSI refer to “pre-filing conduct” and “post-filing conduct” as
“relevant.”7 This discussion of GSI by Eolas is, at best, misleading. The referenced “pre-suit
conduct” and “post-suit conduct” was deemed relevant to pre-suit willful infringement of the
one patent for which pre-suit compensatory damages were available.8 There is no such patent
here.9 Further, the GSI court held that Seagate barred post-filing enhanced damages for all six
asserted patents, including the one patent for which pre-suit damages were available:
The statements in the Seagate opinion, however, are quite clear. The Federal Circuit
stated that a patent holder, such as GSI, has an adequate remedy for post-filing willful
infringement through the pursuit of preliminary injunctive relief. The Federal Circuit
further stated: “A patentee [such as GSI] who does not attempt to stop an accused
infringer’s activities in this manner should not be allowed to accrue enhanced damages
based solely on the infringer’s post-filing conduct.” Id. at 1374. This Court must follow
the Federal Circuit. GSI is not entitled to enhanced damages for any post-filing willful
infringement; GSI could have stopped such infringement through preliminary
injunctive relief. 10
GSI thus held that, for patents as to which no pre-suit compensatory damages were available
(true of both patents here), no pre-suit enhanced damages were available, and that for every
asserted patent, post-suit enhanced damages were not available under Seagate, since patentee
chose not to move for a preliminary injunction (true of both patents here). Rather than attempt to
distinguish GSI, Eolas thus resorted to misstating the critically relevant portion of its holding.
Defendants respectfully request that the Court grant their motion for summary judgment,
and accordingly enter summary judgment against Eolas on its willfulness claims.

defendants had argued that plaintiffs’ “failure to provide notice of the patents-in-suit or its claims of infringement
prior to commencing this lawsuit precludes a pre-suit willfulness finding.” See Cordance Corp. v. Amazon.com,
Inc., 639 F. Supp. 2d 406, 414 (D. Del. 2009). There was no stipulation of no pre-suit damages in Cordance.
7
See Eolas’ Response at 3 (“pre-filing conduct with respect to th[o]se patents . . . is still relevant”) (“Willfulness is
an issue of intent.”) (“post-filing conduct . . . is still relevant to show intent.”) (alterations and omissions in Eolas’
Response); see also GSI, 591 F. Supp. 2d at 983-84.
8
GSI, 591 F. Supp. 2d at 984 (“As explained above, Sukup’s pre-filing conduct with respect to these patents may
tend to show a pattern of recklessness that could support a finding of willful infringement of the ‘271 Patent.”).
9
See 8/17/2011 Joint Stipulation of No Pre-Suit Damages (D.N. 867).
10
See GSI, 591 F. Supp. 2d at 984-85 (emphasis added). GSI also undercuts Eolas’ argument that Seagate is
somehow irrelevant where pre-suit patent knowledge is at issue. Pre-suit patent knowledge was present in GSI, and
indeed is part of the “pre-suit conduct” conduct referenced by Eolas’ GSI quotes. That court recognized that it
“must follow the Federal Circuit” and held patentee was not entitled to post-suit enhanced damages under Seagate.

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Respectfully submitted,
Dated: October 11, 2011

By: /s/ James R. Batchelder, with
permission by Michael E. Jones
James R. Batchelder (pro hac vice)
[e-mail]
Sasha G. Rao (pro hac vice)
[e-mail]
Mark D. Rowland
[e-mail]
Brandon Stroy (pro hac vice)
[e-mail]
Rebecca R. Hermes (pro hac vice)
[e-mail]
Han Xu (pro hac vice)
[e-mail]
ROPES & GRAY LLP
1900 University Avenue, 6th Floor
East Palo Alto, California 94303-2284
Telephone: [phone]
Facsimile: [phone]
Michael E. Jones (Bar No. 10929400)
[e-mail]
Allen F. Gardner (Bar No. 24043679)
[e-mail]
POTTER MINTON
A Professional Corporation
110 N. College, Suite 500
Tyler, TX 75702
Telephone: [phone]
Facsimile: [phone]
ATTORNEYS FOR DEFENDANTS
GOOGLE, INC. AND YOUTUBE, LLC
/s/ David J. Healey, with permission by
Michael E. Jones
David J. Healey
1221 McKinney Street, Suite 2888
Houston, TX 77010
713.652.0115
[e-mail]
Jason W. Wolff
12390 El Camino Real
San Diego, CA 92130
858.678.4705
[e-mail]
Frank E. Scherkenbach
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Proshanto Mukherji
One Marina Park Drive
Boston, MA 02110
617.542.5070
[e-mail]
[e-mail]
Attorneys for Defendant
ADOBE SYSTEMS INCORPORATED
/s/ Edward R. Reines, with permission by
Michael E. Jones
Edward R. Reines
[e-mail]
Jared Bobrow
[e-mail]
Sonal N. Mehta
[e-mail]
Aaron Y. Huang
[e-mail]
Andrew L. Perito
[e-mail]
WEIL, GOTSHAL & MANGES LLP
201 Redwood Shores Parkway
Redwood Shores, CA 94065
Telephone:
[phone]
Facsimile:
[phone]
Doug W. McClellan
[e-mail]
WEIL, GOTSHAL & MANGES LLP
700 Louisiana, Suite 1600
Houston, TX 77002
Telephone: [phone]
Facsimile: [phone]
Jennifer H. Doan
[e-mail]
Joshua R. Thane
[e-mail]
HALTOM & DOAN
6500 Summerhill Road, Suite 100
Texarkana, TX 75503
Telephone: [phone]
Facsimile: [phone]
Otis W. Carroll, Jr. (Bar No. 03895700)
[e-mail]
Deborah J. Race (Bar No. 16448700)
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[e-mail]
IRELAND CARROLL & KELLEY
6101 S. Broadway, Suite 500
Tyler, TX 75703
Telephone:
[phone]
Facsimile:
[phone]
Attorneys for Defendants
AMAZON.COM and YAHOO! INC. 
/s/ Thomas L. Duston, with permission by
Michael E. Jones
Thomas L. Duston
Julianne Hartzell
Scott A. Sanderson
Anthony S. Gabrielson
Marshall Gerstein & Borun
233 S. Wacker Drive
6300 Willis Tower
Chicago, IL 60606
312.474.6300
[e-mail]
[e-mail]
[e-mail]
[e-mail]
Eric Hugh Findlay
Brian Craft
Findlay Craft
6760 Old Jacksonville Highway
Suite 101
Tyler, TX 75703
903.534.1100
[e-mail]
[e-mail]
Attorneys for Defendant
CDW LLC
/s/ Edwin R. DeYoung, with permission by
Michael E. Jones
Edwin R. DeYoung
Roger Brian Cowie
Galyn Dwight Gafford
Michael Scott Fuller
Roy William Hardin
Jason E. Mueller
Locke Lord LLP
2200 Ross Ave.
Suite 2200
Dallas, TX 75201
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214.740.8500
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
Eric L. Sophir
SNR Denton
1301 K Street, N.W.
Suite 600, East Tower
Washington, DC 20005-3364
202.408.6470
[e-mail]
Attorneys for Defendant
CITIGROUP INC.
/s/ Proshanto Mukherji, with permission
by Michael E. Jones
Thomas M. Melsheimer
Neil J. McNabnay
Carl Bruce
Fish & Richardson
1717 Main Street
Suite 5000
Dallas, TX 75201
214.474.5070
[e-mail]
[e-mail]
[e-mail]
Proshanto Mukherji
Fish & Richardson
One Marina Park Drive
Boston, MA 02210
617.542.5070
[e-mail]
Attorneys for Defendant
THE GO DADDY GROUP, INC.
/s/ Christopher M. Joe, with permission by
Michael E. Jones
Christopher M. Joe
Brian Carpenter
Eric W. Buether
Buether Joe & Carpenter
1700 Pacific, Suite 2390
Dallas, TX 75201
214-466-1270
[e-mail]
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[e-mail]
[e-mail]
Attorneys for Defendant
J.C. PENNEY CORPORATION, INC.
/s/ Michael Ernest Richardson, with
permission by Michael E. Jones
Michael Ernest Richardson
Beck Redden & Secrest
1221 McKinney
Suite 4500
Houston, TX 77010
713.951.6284
[e-mail]
Kate Hutchins
Wilmer Cutler Pickering Hale and Dorr,
LLP
399 Park Avenue
New York, NY 10022
212.230.8800
[e-mail]
Donald R. Steinberg
Mark Matuschak
Wilmer Cutler Pickering Hale and Dorr,
LLP
60 State Street
Boston, MA 02109
617.526.5000
[e-mail]
[e-mail]
Daniel V. Williams
Jonathan Hardt
Wilmer Cutler Pickering Hale and Dorr,
LLP
1875 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
202.663.6012
[e-mail]
[e-mail]
Attorneys for Defendant
STAPLES, INC.

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CERTIFICATE OF SERVICE
The undersigned hereby certifies that all counsel of record who are deemed to have
consented to electronic service are being served with a copy of this document via the Court’s
CM/ECF system per Local Rule CV-5(a)(3) on this 11th day of October, 2011. All other counsel
of record will be served via facsimile or first class mail.

/s/ Michael E. Jones

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