TecSec, Incorporated v. International Business Machines Corporation et al
Filing
1157
MEMORANDUM OPINION AND ORDER granting in part and denying in part 1006 Motion for Partial Summary Judgment. Signed by District Judge Liam O'Grady on 6/19/2018. (awac, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
Tecsec,Inc.,
Plaintiff,
Civil Action No. 1:10-cv-115
Hon. Liam O'Grady
V.
Hon. Theresa Buchanan
Adobe Systems Inc.,et al.
Defendants.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Plaintiff TecSec's Motion for Partial Summary
Judgment ofInfringement by Defendant Adobe and on Defendant's Affirmative Defenses of
Obviousness-Type Double Patenting, Laches,§ 1498, and Affirmative Defense/Counterclaim of
Standards- Setting Misconduct(Dkt. 1006). For the reasons that follow and for good cause
shown, the motion is GRANTED IN PART AND DENIED IN PART.The Court DENIES
summary judgment on TecSec's claim that Adobe Systems, Inc.(Adobe)directly infringes
Claim 14 of U.S. Patent No. 5,898,781 and GRANTS summary judgment on Adobe's
affirmative defenses ofobviousness-type double patenting, laches, government sales defense
under 28 U.S.C. § 1498, and standards-setting misconduct.
1. BACKGROUND
The history ofthis case is well known to the parties and thoroughly articulated in the
prior decisions ofthis Court and the Federal Circuit Court of Appeals. See, e.g., TecSec. Inc. v.
Adobe Sys. Inc.,658 F. App'x 570, 572-75 (Fed. Cir. 2016)("TecSec 11"). In the present motion,
TecSec has moved for summary judgment on its claim that Adobe directly infringes Claim 14 of
1
U.S. Patent No. 5,898,781 (the '781 Patent) and on Adobe's affirmative defenses of obviousness-
type double patenting, laches, government sales defense under 28 U.S.C. § 1498, and standardssetting misconduct.
II. LEGAL STANDARD
Summary judgment will be granted where, viewing the facts in a light most favorable to
the non-moving party, there remains no genuine issue of material fact. Fed. R.Civ. Pro. 56(c);
Marlow v. Chesterfield Cty. Sch. Bd.749 F. Supp. 2d 417,426(E.D. Va. 2010). A party
opposing a motion for summary Judgment must respond with specific facts, supported by proper
documentary evidence, showing that a genuine dispute of material fact exists and that summary
judgment should not be granted in favor ofthe moving party. Anderson v. Liberty Lobby, Inc., All
U.S. 242,250(1986). Conclusory assertions of state of mind or motivation are insufficient.
Goldberg v. B. Green
Co., 836 F.2d 845,848 (4th Cir. 1988). As the Supreme Court has held,
"the mere existence ofsome alleged factual dispute between the parties will not defeat an
otherwise properly supported motion for summary judgment; the requirement is that there be no
genuine issue of material fact." Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514,
519(4th Cir. 2003){quoimg Anderson v. Liberty Lobby, Inc., 447 U.S. 242,247-248(1986))
(emphasis in original).
In a patent case, in order for a court to grant summary judgment to a patent holder, the
court must find that every limitation ofthe patent claim is found in the accused device or
technology. See Wenger Mfg., Inc. v. Coating Mack Sys., Inc., 239 F.3d 1225, 1231 (Fed. Cir.
2002). Affirmative defenses may be struck at the summary judgment phase where the defense
has no factual basis. Celotex Corp. v. Catrett, All U.S. 317, 322(1986). Adobe has the burden to
put forth a factual basis supporting its affirmative defenses to survive summary judgment. Id. at
322.
III. DISCUSSION
Claim 14 ofthe 781 Patent
TecSec contends that Adobe directly infringes Claim 14 of the '781 patent when a copy
of Adobe's product Acrobat is installed on a computer, meeting every limitation Claim 14. Dkt.
1008, p. 15. Claim 14 reads:
A system for providing multi-level multimedia security in a data network,
comprising:
1)a system memory for storing data;
2)an encryption algorithm module,comprising logic for converting unencrypted
objects into encrypted objects, the encryption algorithm module being disposed to
access data stored in the system memory;
3)an object labelling subsystem, comprising logic for applying label conditions to
an object, the object labelling subsystem being disposed to access data stored in
the system memory and the object labelling subsystem being further disposed to
accept inputs from the encryption algorithm module;
4)a decryption algorithm module, comprising logic for converting encrypted
objects into unencrypted objects, the decryption algorithm module being disposed
to access data stored in the system memory means; and
5)an object label identification subsystem, comprising logic for limiting object
access, according to the label conditions, the object label identification subsystem
being disposed to access data stored in the system memory and the object label
identification subsystem being further disposed to accept inputs from the
decryption algorithm module;
6) wherein the encryption algorithm module and the object labelling subsystem
together create an encrypted object such that the object label identification
subsystem limits access to the encrypted object.
After reviewing Claim 14 and its limitations in light of the claim construction of the case
and the record developed during discovery, the Court finds that it must await the actual trial
evidence before determining whether Adobe Acrobat infringes Claim 14 upon installation on a
computer as a matter oflaw. Accordingly, TecSec's motion for summary judgment as to Claim
14 is DENIED at this time. TecSec may renew the motion after all evidence has been presented
at trial.
Affirmative Defense - Obviousness-Type Double Patenting
TecSec contends that Adobe has failed to put forth any evidence to support its affirmative
defense ofobviousness-type double patenting, noting that Adobe's invalidity expert, Dr. Clark,
did not opine on obviousness-type double patenting in his expert report and that Adobe failed to
raise the defense in its Invalidity Contentions of July 24,2017.Id. at 27.
In response, Adobe disputes the facts pertaining to obviousness-type double patenting by
asserting that extensive evidence provided by Dr. Clark supports Adobe's defense and that the
Invalidity Contentions ofJuly 24,2017 were not required to include an analysis ofobviousness-
type double patenting. Dkt. 1072, p. 7. Adobe contends that it "included in the invalidity
matenals actually required by the Court's order, mapping the prior art for obviousness," then
cites to a discovery order. Id. at 17. Adobe itself drafted that discovery order, which makes no
mention of obviousness-type double patenting and which is associated with a motion to
supplement invalidity contentions that also makes no mention of the defense. See Dkt. 929,930,
941,and 943. Indeed, the order cited granted Adobe's own motion to supplement its invalidity
contentions. Id. Adobe was the master ofthat motion, and appears to admit in its response to the
instant motion that it failed to include obviousness-type double patenting in its initial invalidity
contentions and failed to attempt to include discovery pertaining to the defense in its motion to
supplement.
In addition, Adobe contends that Dr. Clark's expert report addressed the factual
foundation for this affirmative defense, yet also admits that TecSec submitted terminal
disclaimers in response to each ofthe obviousness-type double patenting rejections from the
United States Patent Office. Id. at 18. Terminal disclaimers disclaim any terminal part ofa patent
and the filing thereofgenerally bars an obviousness-type double patenting defense.
In re
Long,,759 F.2d 887.894(Fed. Cir. 1985). Adobe makes no argument and presents no evidenee
that the terminal disclaimers were improper and should not be given effect.
To the extent Adobe's response also asserts that Dr. Clark mapped the prior art for
obviousness, including obviousness-type double patenting, the Court hereby clarifies its June 8,
2018 Order at Docket Entry 1152 to preclude Dr. Clark from supplementing his claim charts and
analysis as they would relate to obviousness-type double patenting. Discovery in this matter is
closed but for the Court's June 8,2018 Order, and Adobe cannot attempt to manufacture
evidence for this affirmative defense at this late stage.
As to Adobe's final contention in support ofthis defense, focusing on the claim scope,
the Court finds the arguments irrelevant to demonstrating a factual or legal foundation for this
affirmative defense.
For these reasons and for good cause shown, TecSec is awarded summary judgment on
Adobe's aftirmative defense ofobviousness-type double patenting.
Affirmative Defense - Laches
TecSec contends that Adobe's affitraative defense oflaches is not applicable in this case
because the enactment of35 U.S.C.§ 286's statute of limitations eliminated the defense. Dkt.
1008, p. 27. There is no factual debate that TecSec's claim for damages fails within § 286's sixyear itmitations period. TecSec also contends that Adobe has failed to produce any evidence that
would support this defense. Id.
In response, Adobe asserts that it has suffered both evidentiary and economic prejudice
from TecSec's delay and that Adobe has ample evidence supporting its interrogatory response on
laches.' Dkt. 1072, p. 7. Adobe contends that TecSec has failed to explain bow that fact would
preclude the use oflaches as an affirmative defense. Id. at 19. Instead of meeting TecSec's
argument, however, Adobe attempts in its opposition brief to add substance to its interrogatory
response, reciting various facts that pertain to the period of elapsed time without offering
evidence or argument that Adobe has been actually prejudiced by the elapsed time. See id. at 2021.
Next, Adobe argues that laches may not apply to damages under Supreme Court
precedent but it remains relevant to the Court's exercise of its equitable powers and is still a
viable defense. Id. at 21. fhe Court simply cannot square Adobe's contentions with SCA
Hygiene Prods. Aktiholag v. First Quality Baby Prods.. LLC, 137 S. Ct. 954,967(2017), in
which the Supreme Court explicitly held that laches is not a defense against damages where the
mfnngement occurred during § 286's statutory timespan. Adobe points to willfulness, attorney's
fees, interest and costs, and lost profits as supposedly equitable issues to which, it contends,
laches could still apply after
Hygiene. Id. at 22-23. Even assuming that all the issues Adobe
identifies are indeed equitable issues for the Court to decide, Adobe fails to demonstrate that any
delay by TecSec in bringing forth this lawsuit is relevant to resolving those issues.
For these reasons and for good cause shown,TecSec is awarded summary judgment on
Adobe's affirmative defense of laches.
Affirmative Defense -28 U.S.C.§1498
instead relying on citations to exhibits. This is insufficient under Local Rule 56, which requires "[a] briefin
response to[a motion for summary judgment to] include ... all material facts as to which it is contended that there
exists a genume issue necessary to be litigated." A bare assertion that facts exist, even accompanied by citations to
the exhibits, is deficient. See Wood v. Credit One Bank,277 F. Supp.3d 821,830(E.D. Va.2017)(distinctly
Ihit"
^ ri"^ fi
56(b) violations). Adobe is reminded
thoJ 1 h
"f opponent's statement of material facts at the summary judgment stage may result in
rn. elects to provide this warning for futureofthe nature of this violation, givensanction. did cite to ex^Ibte the
admitted. Because reference in lieu ofa more serious that Adobe
Court
28 U.S.C. § 1498 codifies the government sales defense and presents an affirmative
defense to infringement liability where 1)the infringing device was manufactured for the
government; and 2)the government authorized or consented to the manufacture of the device.
Sevenson Envt'lInc. v. Shaw Envt'l, Inc., 477 F.3d 1361, 1365 (Fed. Cir. 2007). In the
instant motion, TecSec contends that Adobe has failed to produce any evidence to support either
element ofthe defense and is accordingly entitled to summary judgment on the affirmative
defense at this stage. Dkt. 1008, p. 28.
In response, Adobe contends that it has produced extensive records of sales of its Acrobat
product to the government and argues that the federal government has adopted standards that
require the infringing capability. Dkt. 1072, p. 26. Adobe then falls back on an argument,
apparently advanced for the first time, that it believes the government may have impliedly, rather
than expressly, consented to the development and inclusion ofthe allegedly infringing capability.
Id. at 28-29.
Adobe s contentions on these points at times border on the frivolous and appear designed
to simply muddy the waters. Adobe cites extensively to the statute and case law addressing the
government sales defense, yet noticeably makes no argument for how that case law would alter
the essential analysis here: that Adobe needed to produce evidence during discovery that would
show that Acrobat, particularly its allegedly infringing security feature, was manufactured for the
government and that the government authorized or consented to the manufacturing ofthe device.
See id. at 24-25. For instance, Adobe contends that the Sevenson case cited by TecSec for the
elements ofthe defense actually supports Adobe's position, because the case establishes that the
"for the government" prong ofthe defense "impose[s] only a requirement that the use or
manufacture ofa patented method or apparatus occur pursuant to a contract with the government
and for the benefit ofthe government." Id. at 25(quoting Sevemon, All F.3d at 1365). Adobe
does not follow this point up with sufficient evidence that Adobe can meet that standard.
The only evidence that Adobe offers to support this defense is that the federal
government uses Acrobat and that the federal government uses and endorses ISO 32000-1:2008
pertaining to the portable document format(PDF)used by Acrobat and NIST standards.
id
at 27-29. The Court is well aware that the federal government uses Acrobat and relies on the
PDF. What Adobe needs to show to survive summary judgment on this affirmative defense is
that there is some foundation for concluding that the allegedly infringing capability of Acrobat
was developed in response to a contract with the federal government and for its use. To attempt
to meet this burden, Adobe cites to two documents, Exhibits 62 and 63.^ Id. at 28. Broadly, these
exhibits can be said, as Adobe contends, to evidence the govemmenfs request for the Acrobat
product. Nothing in them suggests that they provide a sufficient foundation for Adobe to meet its
burden at this stage to prove that Acrobat's allegedly infringing feature was manufactured for the
government and that the government authorized or consented to the manufacture ofthe allegedly
infringing feature. Adobe s position on this point is essentially that if an allegedly infringing
product conforms to broad standards adopted by the government and is purchased by the
government, the government sales defense may be met. While true that "[t]he coverage of§ 1498
should be broad so as not to limit the Government's freedom in procurement," TVI Energy Corp.
V. Blane. 806 F.2d 1057, 1060(Fed. Cir. 1986), Adobe's proposed interpretation would be so
broad as to permit the defense in nearly any circumstance where an allegedly infringing product
proffered in its reply briefthat Adobe provided Exhibit 62 in an untimely supplement to its
k'im
summary Judgment not properly produced during discovery from
be, IS impermissible. Adobe is cautioned that any evidencestage, unaccompanied by any explanationor explicitlv
pursuant to a court order will be excluded from trial absent leave ofthe Coun
discovery or explicitly
is sold to the Government. Adobe cites to no law to support this proposition and the Court rejects
it.
While Adobe falls back on an argument that the government impliedly consented to
Adobe developing and including the allegedly infringing capability, it puts forth no evidence to
support even that contention. See Dkt. 1072, p. 28-29. As TecSec notes, implied consent may be
shown where 1)the government expressly contracted for work to meet certain specifications; 2)
the specifications cannot be met without [infringement]; and 3)the government had some
knowledge ofthe infringement." Dkt. 1118, p. 18(quoting Madey v. Duke Univ., 413 F. Supp.
2d 601,609(M.D.N.C. 2006). At this point, Adobe can only be said to have put forth evidence
to support the first element ofan implied government sales defense.
Therefore Adobe cannot meet its burden to demonstrate that the allegedly infringing
capability was developed in 28 U.S.C. § 1498's safe harbor. For these reasons and for good
cause shown, TecSec is entitled to summary judgment on Adobe's affirmative defense under 28
U.S.C. § 1498.
Affirmative Defense -Standards-Setting Misconduct
The defense ofstandards-setting misconduct is applicable where a plaintiff participates
in a standards-setting organization, fails to disclose certain intellectual property required by that
participation, and thereafter asserts infringement of that intellectual property against others. Cf
Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1014(Fed. Cir. 2008). TecSec contends that
Adobe has not identified any standards-setting organization in which TecSec participated or that
it even should have joined. Dkt. 1008, p. 29. Adobe begins its response by improperly shifting
the burden to TecSec and by, without explanation, claiming that standards-setting issues are a
species of unclean hands. See Dkt. 1072, p. 29-30 (citing Gilead Science.i, Inc. v. Merck Co.,
Inc., 888 F.3d 1231, 1239(Fed. Cir. 2018)). Gilead did not involve standard-setting misconduct
and simply stands for the proposition that a plaintiffs pre-litigation business misconduct and
litigation misconduct can preclude that plaintiff from enforcing its patents where the misconduct
pertains to the relief plaintiff seeks. Gilead. 888 F.3d at 1239.
Instead of opposing TecSec's motion for summary judgment on this affirmative defense,
Adobe, apparently focusing on unclean hands, irrelevantly describes how it believes TecSec has
broadly behaved improperly by «o/joining a standards-setting organization, plainly conceding
that it cannot proceed with this affinnaiivc defense as a matter of law. See Dkt. 1072, p, 29-30.
For these reasons and for good cause shown, TecSec is awarded summary judgment on
Adobe's affirmative defense of standards-setting misconduct.
V. CONCLUSION
For the reasons discussed above and for good cause shown, the motion is GRANTED IN
PART AND DENIED IN PART.The Court DENIES summary judgment on Claim 14 of U.S.
Patent No. 5,898,781, and GRANTS summary judgment on Adobe's affirmative defenses of
obviousness-type double patenting, laches, govcmment sales defense under 28 U.S.C. § 1498,
and standards-setting misconduct.
It is SO ORDERED.
jQ
June V^,2018
Liam O'GraflA
United Statesuisirict Judge
Alexandria, Virginia
10
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?