I/P Engine, Inc. v. AOL, Inc. et al

Filing 439

Opposition to 299 MOTION in Limine #1 to Preclude Plaintiff From Introducing Evidence of Willful Infringement, Pre-Suit Knowledge, or Copying filed by I/P Engine, Inc.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14)(Sherwood, Jeffrey)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
NORFOLK DIVISION
__________________________________________
)
)
)
Plaintiff,
)
v.
)
)
AOL, INC. et al.,
)
)
Defendants.
)
__________________________________________)
I/P ENGINE, INC.,

Civ. Action No. 2:11-cv-512
REDACTED VERSION

PLAINTIFF I/P ENGINE, INC.’S OPPOSITION TO DEFENDANTS’ MOTION IN
LIMINE #1 TO PRECLUDE PLAINTIFF FROM INTRODUCING EVIDENCE ON
WILLFUL INFRINGEMENT, PRE-SUIT KNOWLEDGE, OR COPYING
Defendants seek to preclude Plaintiff I/P Engine, Inc. (“I/P Engine”) from introducing
evidence at trial on willful infringement, pre-suit knowledge and copying. I/P Engine’s
considerable evidence that Defendants knew or should have known about the patents-in-suit
prior to the filing of the litigation is relevant and admissible for four independent reasons. First,
this evidence supports I/P Engine’s claims of inducement and indirect infringement. Second, the
evidence goes to secondary considerations of non-obviousness. Third, evidence that shows
Google knew or should have known about the patents-in-suit is relevant to show Defendants’
unclean hands, which is relevant to rebut their affirmative defense of laches. Fourth, the
evidence is relevant to a finding of willfulness and enhanced damages, as well as the possible
award of attorneys’ fees.
I.

I/P Engine’s Evidence of Defendants’ Pre-Suit Knowledge
I/P Engine has collected significant evidence that Defendants’ knew or should have

known about the patents-in-suit prior to this litigation. First, Google owns a patent that cites as
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prior art one of the patents-in-suit, U.S. Patent No. 6,314,420 (“the ‘420 patent”). Google owns
U.S. Patent No. 7,647,242, which lists the ‘420 patent on its face. Ex. 1 (PTX 0416). The ‘420
patent was cited as a reference made of record in an office action dated September 30, 2003. Ex.
2 (PTX 0417). This evidence shows, without any question, that Google (and its patent attorneys)
had actual knowledge of the ‘420 patent prior to the litigation, and prior to when Google started
its infringement.
Second, similar to Google, AOL owns U.S. Patent No. 7,165,119 (the ‘119 patent).
Ex. 3 (PTX 0420). During the prosecution of the ‘119 patent, AOL disclosed the ‘420 patent to
the PTO. In fact, the specification of the ‘119 patent specifically referenced the ‘420 patent. Ex.
4 (PTX 0421). This evidence shows that AOL and its patent attorneys had actual knowledge of
the ‘420 patent at least as early as Oct. 14, 2003, the filing date of the ‘119 patent.

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II.

Evidence that Defendants Knew or Should Have Known About the Patents-In-Suit
Supports I/P Engine’s Claims of Inducement and Indirect Infringement
I/P Engine has alleged claims of inducement and indirect infringement against

Defendants in this case. The Supreme Court has held that induced infringement requires
“knowledge that the induced acts constituted patent infringement.” Global-Tech Appliances, Inc.
v. SEB S.A., 131 S. Ct. 2060, 2061 (2011). Moreover, the Federal Circuit has stated that

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knowledge of infringement goes to establishing liability for indirect infringement. Dynacore
Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263, 1273 (Fed. Cir. 2004) (stating that “[i]n
order to prove vicarious liability for indirect infringement, a plaintiff who demonstrates direct
infringement must also establish that the defendant possessed the requisite knowledge or intent
to be held vicariously liable”). Evidence that Google knew or should have known about the
patents-in-suit is therefore relevant to I/P Engine’s claims of inducement and indirect
infringement.
III.

Evidence that Defendants Knew or Should Have Known About the Patents-In-Suit
Goes to Secondary Considerations of Non-Obviousness
One of the secondary considerations of non-obviousness is copying. Iron Grip

Barbell Co. v. USA Sports, Inc.,392 F.3d 1317, 1325 (stating that the Federal Circuit has
“establish[ed] that copying by a competitor may be a relevant consideration in the secondary
factor analysis”); Depuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314, 1327
(Fed. Cir. 2009). Google and AOL’s prior knowledge of a patent-in-suit is relevant
circumstantial evidence that they copied the patented technology. See, e.g., Geo M. Martin Co.
v. Alliance Mach. Sys. Int'l LLC, 618 F.3d 1294, 1305 (Fed. Cir. 2010) (accepting that evidence
of copying included knowledge of a patented concept, a portion of which was then incorporated
into a new technology). Evidence that Google and AOL knew or should have known about the
patents-in-suit as early as 2003, which is prior to its implementation of the allegedly infringing
AdWords system, is relevant because it goes to establishing copying as a secondary
consideration of non-obviousness.
IV.

Evidence that Defendants Knew or Should Have Known About the Patents-In-Suit
is Relevant to Show Defendants’ Unclean Hands
Defendants have moved for summary judgment on laches (D.I. 237), and all

Defendants have pled a laches affirmative defense for trial. D.I. 41 at ¶ 140; D.I. 42 at ¶ 140;
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D.I. 43 at ¶ 140; D.I. 44 at ¶ 140; D.I. 45 at 20. In responding to this defense, I/P Engine intends
to bring evidence that supports the “unclean hands doctrine,” which can “preclude application of
the laches defense with proof that the [defendant] was itself guilty of misdeeds towards
[plaintiff].” See Serdarevic v. Advanced Med. Optics, Inc., 532 F.3d 1352 (Fed. Cir. 2008)
(quoting A. C. Aukerman Co. v. R. L. Chaides Constr. Co., 960 F.2d 1020 (Fed. Cir. 1992)).
Evidence that Google and AOL knew or should have known about the patents-in-suit goes to
showing that they were “guilty of misdeed towards” the patentee and is therefore relevant.
V.

Evidence that Defendants Knew or Should Have Known About the Patents-In-Suit
is Relevant to a Finding of Willfulness, Enhanced Damages and the Possible Award
of Attorney’s Fees
Evidence that Defendants knew or should have known about the patents-in-suit is

relevant to a finding of willful infringement. See K-Tec, Inc. v. Vita-Mix Corp., 2012 U.S. App.
LEXIS 18773 at *27 (Fed. Cir. Sept. 6, 2012) (“To prevail on an allegation of willful
infringement, the patentee must prove (1) that the accused infringer “acted despite an objectively
high likelihood that its actions constituted infringement of a valid patent”; and (2) that this
objectively defined risk was either known or so obvious that the accused infringer should have
known about it.”) (citing In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en
banc)). Such evidence is also relevant to enhanced damages and attorney’s fees, which may be
granted based on a finding of willful infringement. See Seagate, 497 F.3d at 1368-1380.
Defendants do not dispute the relevance of such evidence to a claim of willful
infringement. Rather, Defendants’ sole argument for preclusion of this evidence is the incorrect
assertion that I/P Engine never pled willful infringement. In fact, I/P Engine pled sufficient facts
to show Defendants’ willful infringement of the patents-in-suit through notice pleading in their
initial complaint. A complaint that adequately pleads willful infringement, even by the higher
standard expressed in the recent cases of Iqbal and Twombly, must only assert alleged facts that
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show (1) direct infringement of specific accused products and (2) that defendants had actual
notice of the patent-in-suit.1 Gradient Enters. v. Skype Techs. S.A., 848 F. Supp. 2d 404, 409
(W.D.N.Y. 2012) (stating that when pleading willful infringement, even in light of Iqbal and
Twombly, “courts have generally required a complaint to allege facts that, at a minimum, show
direct infringement, i.e., that identify the patent in suit, and show the defendant’s actual
knowledge of the existence of the patent.”); Sony Corp. v. LG Electronics U.S. A., Inc., 768 F.
Supp. 2d 1058, 1064 (C.D. Cal 2011) (finding that a complaint that “identifie[d] the specific
accused products, and allege[d] that defendants had actual notice of the patents in suits, ...
allege[d] sufficient facts to state a plausible claim for willful infringement”).

I/P Engine’s Complaint also alleges sufficient facts to show
Google’s knowledge of the patented technology as discussed previously. See D.I. 1 at ¶¶ 48-53
(alleging that Google new or should have known about the patents-in-suit because they were
cited multiple times as prior art in the prosecution of a patent related to a patent asserted against
Google in a prior litigation). Since I/P Engine properly pled willful infringement, Defendants’
argument for preclusion is without merit.2

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Defendants may argue that I/P Engine, despite pleading sufficient facts to support and place
Defendants on notice of a claim of willful infringement, does not specifically use “willfulness”
language in their complaint. This argument should be ignored by this Court because it is the type
of “hyper-technical” analysis that the Supreme Court rejected in Ashcroft v. Iqbal,556 U.S. 662
(U.S. 2009) (pointing out that the new “Federal Rule 8 marks a notable and generous departure
from the hyper-technical, code-pleading regime of a prior era”).
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In their preclusion argument, Defendants attempt to inflate the importance of a statement
made by I/P Engine’s counsel without providing full context of the conversation. Defendants
repeatedly sought to secure an admission that I/P Engine did not intend to bring a claim of
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VI.

Conclusion
For the foregoing reasons, evidence that Defendants knew or should have known about

the patents-in-suit prior to the filing of the litigation is relevant and admissible. Defendants’
motion in limine should be denied.
Dated: September 27, 2012

By: /s/ Jeffrey K. Sherwood
Donald C. Schultz (Virginia Bar No. 30531)
W. Ryan Snow (Virginia Bar No. 47423)
CRENSHAW, WARE & MARTIN PLC
150 West Main Street
Norfolk, VA 23510
Telephone:
[phone]
Facsimile:
[phone]
Jeffrey K. Sherwood (Virginia Bar No. 19222)
Frank C. Cimino, Jr.
Kenneth W. Brothers
Dawn Rudenko Albert
Charles J. Monterio, Jr.
DICKSTEIN SHAPIRO LLP
1825 Eye Street, NW
Washington, DC 20006
Telephone:
[phone]
Facsimile:
[phone]
Counsel for Plaintiff I/P Engine, Inc.

willful infringement at trial. I/P Engine refused to make such an admission, reserving their
rights. Counsel’s statement in no way changes the facts alleged in I/P Engine’s Complaint or the
sufficiency of the pleading.

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CERTIFICATE OF SERVICE
I hereby certify that on this 27th day of September, 2012, the foregoing PLAINTIFF I/P
ENGINE, INC.’S OPPOSITION TO DEFENDANTS’ MOTION IN LIMINE #1 TO
PRECLUDE PLAINTIFF FROM INTRODUCING EVIDENCE ON WILLFUL
INFRINGEMENT, PRE-SUIT KNOWLEDGE, OR COPYING, was served via the Court’s
CM/ECF system, on the following:
Stephen Edward Noona
Kaufman & Canoles, P.C.
150 W Main St
Suite 2100
Norfolk, VA 23510
[e-mail]
David Bilsker
David Perlson
Quinn Emanuel Urquhart & Sullivan LLP
50 California Street, 22nd Floor
San Francisco, CA 94111
[e-mail]
[e-mail]
Robert L. Burns
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
Two Freedom Square
11955 Freedom Drive
Reston, VA 20190
[e-mail]
Cortney S. Alexander
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
3500 SunTrust Plaza
303 Peachtree Street, NE
Atlanta, GA 94111
[e-mail]
/s/ Jeffrey K. Sherwood

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