Audio MPEG, Inc. et al v. Dell, Inc., et al

Filing 619

OPINION AND ORDER, entered and filed 5/31/17: This matter is before the Court on a #248 Motion to Dismiss Dell's Counterclaims I-X and Strike Dell's Seventh Affirmative Defense, and, in the alternative, a #253 Motion for a Separate Trial and Stay of Dell's Counterclaims I-X and Patent Misuse Affirmative Defense, both of which were jointly filed by Audio MPEG, Inc. ("Audio MPEG"), U.S. Philips Corporation ("Philips"), TDF SAS ("TDF"), Institute fur Rundfunktechnik GmbH {"IRT") (collectively, "Plaintiffs"), and Counterclaim Defendant Societa Italiana per lo Sviluppo dell'Elettronica S.p.A. {"SISVEL") (collectively with Plaintiffs, "Counter-Defendants"). The Court notes that Counter-Defendants' request to stay discovery on Dell's counterclaim is moot because discovery is already complete in this case. See Status Conf. Tr. 39, ECF No. 616 (notifying the Court that discovery is closed and the case is ready for trial). Dell alleged antitrust counterclaims against the patent owners and Audio MPEG, who were the original Plaintiffs in this case, and additionally joined SISVEL, the parent company of Audio MPEG, as a third-party defendant. Countercl. 28, 44. According to Dell, SISVEL administers the MPEG patent pool, with SISVEL alone having "responsibility for licensing non-U.S. Patents in the patent pool and SISVEL's wholly-owned subsidiary, Audio MPEG, ha[ving] sole responsibility for licensing U.S. Patents." Id. 44. Having evaluated the relevant factors and finding that each factor weighs in favor of bifurcation, the Court GRANTS Counter- Defendants' Motion for a Separate Trial of Dell's Counterclaims I-X and Patent Misuse Defense from trial of Plaintiffs' patent infringement claims. ECF No. 253; see Ricoh Co., 2005 WL 6965048, at *1 {"The Court has broad discretion in deciding whether to separate issues and claims for trial, in accordance with its broad power to manage its trial calendar."). The Court DISMISSES as MOOT Counter-Defendants' Motion to Stay discovery because discovery on both the patent infringement and antitrust claims is already complete. See Status Conf. Tr. 39. The Court TAKES UNDER ADVISEMENT Counter-Defendants' Motion to Dismiss Dell's Counterclaims I-X and Strike Dell's Seventh Affirmative Defense (patent misuse defense). ECF No. 248. Finally, while the Court appreciates the challenges for the parties resulting from continuance of their trial date, because the Court's docket was filled with many other trials already scheduled before this case was transferred to the undersigned Judge, the Court SETS trial on Plaintiffs' patent infringement claims to begin on December 5, 2017, and in the interest of judicial efficiency, the Court DIRECTS the parties to file all pretrial motions before July 31, 2017. (See Opinion and Order and Foot Notes for Specifics) (Signed by District Judge Mark S. Davis on 5/31/17). Copies provided as directed 5/31/17. (ecav, )

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA Norfolk Division AUDIO MPEG, INC., et al. , Plaintiffs/ Counterclaim Defendants, and SOCIETA ITALIANA PER LO SVILUPPO DELL'ELETTRONICA S.P.A., Third-PartyDefendant, Civil No. V. 2:15cv73 (Lead Case) Civil No. 2:16cv82 (Consolidated Case} DELL INC., Defendant / Counterclaimant / Third-Party Plaintiff. OPINION AND ORDER This Dell's matter is before Counterclaims Defense, ECF No. 248, I-X the and and, Court Strike on Dell's a Motion Seventh in the alternative, a to Dismiss Affirmative Motion for a Separate Trial and Stay of Dell's Counterclaims I-X and Patent Misuse Affirmative Defense,^ ECF No. 253, both of which were ^ The Court notes that Counter-Defendants' request to stay discovery on Dell's counterclaims is moot because discovery is already complete in this case. jointly filed by Audio MPEG, Corporation {"Philips"), Rundfunktechnik Counterclaim GmbH TDF {«IRT") Defendant dell'Elettronica Inc. {«Audio MPEG"), U.S. Philips SAS (collectively, Societt S.p.A. ("TDF"), per "Counter-Defendants")For the below, Court DISMISSES as MOOT GRANTS the patent misuse defense, the Motion Motion to Stay lo and Sviluppo (collectively Plaintiffs, the fiir "Plaintiffs"), Italiana {"SISVEL") Institute for reasons a the with set Separate forth Trial, counterclaims and and TAKES UNDER ADVISEMENT the Motion to Dismiss. I. This FACTUAL AND PROCEDURAL BACKGROUND patent infringement action infringement by Defendant Dell Inc. arises out of alleged ("Defendant" or "Dell"), of the following audio technology patents: United States Patent No. 5,323,396 ("the 5,777,992 ("the 5,539,829 '396 ("the patents"). '992 Compl, '829 patent"), patent"), patent") 19-46. United and United States Patent States (collectively, the Patent No. No. "asserted Through compression of audio files See Status Conf. Tr. 39, ECF No. 616 (notifying the Court that discovery is closed and the case is ready for trial). ^ Dell alleged antitrust counterclaims against the patent owners and Audio MPEG, who were the original Plaintiffs in this case, and additionally joined SISVEL, the Countercl. parent company of Audio MPEG, as a third-party defendant. 28, 44. According to Dell, SISVEL administers the MPEG patent pool, with SISVEL alone having "responsibility for licensing non-U.S. Patents in the patent pool and SISVEL's wholly-owned subsidiary, Audio MPEG, halving] sole responsibility for licensing U.S. Patents." Id. ^ 44. using MPEG Standards^ to encode and decode digital audio signals, the patented technologies facilitate other audio on electronic devices. According IRT to the plaintiff States Audio to relating MPEG license, to offered a sue, id. "joint audio patents, expiration. the and infringement all Plaintiffs, of license" expired on Jiine 21, collect on 2011, right in costs, of the TDF, and and the '396 flU the and United damages on behalf of Patent Owners have Patent asserted patents, id. id. asserted patents all The and H 24, Philips, fees, Since 1996, the H 42. exclusive the H 41. including Id. plaintiffs own the asserted patents, has music Id. fH 2, 22. complaint, ("Patent Owners")/ the playing of Owners' prior to MPEG their patent and the '992 6, '829 patent 30, and the patent expired on July 23, 2013, id. 1 36. On February complaint 20, 2015, in the Norfolk Division of Hewlett-Packard Company See generally Plaintiffs HP filed ("HP") Compl., a the asserted patents. I:15cvl674 filed this ECF No. 1. On complaint a three-count Court alleging that infringed the three-count Alexandria Division of Inc., No. Plaintiffs asserted patents. December against 21, Dell this Court alleging that Dell 2015, in the infringed Compl., Audio MPEG, Inc., et al. v. Dell, (E.D. Va. 2015). On February 22, 2016, the ' MPEG Standards are worldwide industry standards for audio compression set by the MPEG/Audio Working Group of Standardization ("ICS"). Compl. H 20. the International Organization for Alexandria Division transferred the Dell case Division to be consolidated with the HP case. No. 73. Dell On May 16, as the 3:22-4:16, sole ECF No. 2016, asserted patents and/or in the that Dell by directly Cyberlink "manufacturing, offering PowerDVD {such for sale that leaving Hr'g Tr. using, products as Latitude in selling, that include including, but not D530, and Dell Precision M6300) Latitude D630)." allege case. ECF Dell computers and electronic devices containing Latitude D830, as 2:15cv73, infringed claims capabilities required by the MPEG standards, limited to[,] Norfolk 136. allege importing, No. the Plaintiffs and HP settled, remaining defendant Plaintiffs the to Dell Compl. indirectly HH 51, D630, or Roxio Creator 60, infringed Latitude 69. {such Plaintiffs also claims in the asserted patents by inducing and contributing to infringement by others. Id. 52-53, continued its informed Dell, products 61-62, 70-71. infringing Plaintiffs further allege that Dell activities no later than July 1, incorporating the MPEG even 2004, Audio after Audio MPEG that "all Defendant's encoding and decoding capabilities required by at least one of the MPEG standards are covered by [the asserted patents]." Dell issued," denies Answer that 47, the 56, Id. patents 65, 52, 61, were ECF No. "duly 184, 70. and legally arguing that the patents are invalid because the inventors failed to satisfy the conditions of patentability specified in seg., Aff. Defenses 1 1, ECF No. 184. 35 U.S.C. § 100, Further, Dell denies that it has directly or indirectly infringed on the patents. 51-53, 60-62, 69-71. history estoppel; estoppel; patent exhaustion; misuse; limit on any damages. In a Dell asserts defenses license; waiver, prosecution et laches; of Answer prosecution laches,^ and/or and argues for a Aff. Defenses HH 2-22. Counterclaim against Counter-Defendants, violations of the Sherman Act, Dell asserts civil conspiracy under Virginia state law, common law conspiracy, breach of contract, promissory estoppel, waiver, "antitrust and prosecution claims"). Countercl. laches (collectively, HI 152-224. federal antitrust law and Virginia state law. Counter-Defendants are direct competitors Arguing the both Dell alleges that with each other but have illegally pooled their patents together (the "SISVEL patent pool"), which improperly restrains trade and creates a monopoly. Id. 152-187, 196-203. According to Dell, Counter-Defendants illegally pooled their patents together by including expired and unrelated patents in the SISVEL patent pool and not varying or reducing the licensing fee as patents within the pool expired, and by not competing against each other in the marketplace due * On March 21, 2017, in SCA Hygiene Products Aktiebolag v. First Quality BabyProducts, LLC, equitable defense damages where [statute]." No. the 15-927, of the laches infringement 137 S. Ct. 954, United States "cannot 967 be occurred (2017). Supreme interposed within the Court as a held that defense period the against prescribed by to their Dell patent argues that injure Dell and pool arrangement. Id. Counter-Defendants 131-147, specifically through license agreements with "Co-Conspirator B," respectively, 169-172. conspired to "Co-Conspirator A" which required "Counter- Defendants to license the SISVEL patent pool to Dell or sue Dell for infringement." In argues addition that, standard, to improperly because MPEG on ("FPAND fair, terms"), According to competitive" and their adopted as an international obligated to offer were reasonable, but Dell, failed and to do Counter-Defendants license state pooling was Counter-Defendants licenses federal Id. HH 159, 189-195. fee law. for Dell patent nondiscriminatory so. HH are charging the patent pool, Id. patents. 145-149. terms 204-209. a "supra- in violation of Dell asserts that it has "suffered svibstantial injury to its business and property as a result of the Counter-Defendants' unlawful conduct," id. K 144, and asserts that Counter-Defendants' conduct "has caused, and will continue to cause, siabstantial anticompetitive effects to competition generally, and specifically to competition in the United States," id. H 179. On August Dismiss Dell's Affirmative 26, 2016, Counter-Defendants Coxmterclaims Defense I-X (patent misuse filed an alternative Motion for a and filed Strike defense), a Motion Dell's ECF No. to Seventh 248, and Separate Trial and Stay of Defendant's Defense, Counterclaims ECF No. 253. I-X Patent October On and 24, response to Counter-Defendants' and a On November 4, of ECF No. 206. 2016, 329. The case was 24, parties bifurcate Counter-Defendants filed a of the Motion for the would status Court explained and ECF No. a 616. The bifurcation ruling, 334, and a Separate Trial, conference with reviewed that it consult the would with Court case rule the Judge regarding the motions in limine. ECF No. reply brief in reply- ECF No. then reassigned to this Judge on March 20, telephonic 2017, and a 308, in support April filed ECF No. their Motion to Dismiss, In a Dell Motion to Dismiss, brief 2017. 2016, Affirmative to the Motion for Separate Trial, response support Misuse the parties status with the motion on co-assigned Status Conf. recommended that, on the to Magistrate Tr. 65-66, after receiving its the parties may wish to consider returning to settlement discussions. considered by this Court, Id. Having been fully briefed and Counter-Defendants' Motion to Dismiss and Motion for a Separate Trial are now ripe for review. II. LEGAL STANDARD Under Federal Rule of Civil Procedure 42{b), order a separate trial" avoid prejudice, Civ. which P. 42(b). circuit of coxinterclaims "[f]or convenience, or to expedite and economize. As an initial matter, law controls "the court may . . ." Fed. to R. the Court must determine application of Rule 42 (b) to the combined patent infringement and antitrust claims in this case. While there is little discussion of this question in the case law, it appears that the Court should look to precedent from the United States Court of Appeals for the Federal Circuit to determine "[w]hether and under what sets of facts patent issues should be matter, [the separated for it "implicat[es] Federal Innotron Circuit] the the 800 Court because, while a procedural the jurisprudential responsibilities of in Diagnostics, Therefore, trial," field F.2d primarily of 1077, will patent 1084 look law." (Fed. to In Cir. Federal re 1986). Circuit precedent in deciding whether to bifurcate trial of the patent infringement claims from the antitrust claims. Because a trial court "has broad discretion with regard to trial management," a decision to bifurcate a for an abuse of discretion. 1276 62 (Fed. Cir. 2007) (9th Cir. Shum v. trial is reviewed Intel Corp., 499 F.3d 1272, (citing Danjag v. Sony, 263 F.3d 942, 2001)). "In the context of patent 961- cases, '[e]xperienced judges use bifurcation and trifurcation both to simplify the issues manageability of presented to a No. CIV.A. (quoting jury.'" 02-212-JJF, Thomas Trifurcation, L. patent cases volume the in and complexity Enzo Life Scis., 2003 Creel WL 21402512, & Robert Opinions of Counsel, P. and Inc. at to the of v. *5 maintain evidence Digene Corp., (D. Taylor, Del. 2003) Bifurcation, Privilege and Prejudice, 424 PLI/PAT 823, 826 not limits. without (1995)). However, For the Court's discretion is example, "[w]hen deciding whether issues should be separately tried, trial courts must ensure that a litigant's Shum, 499 constitutional F.3d convenience, at right 1276. prejudice, In to a jury examining is the preserved." factors of and judicial economy under Rule 42(b), the United States Court of Appeals for the Federal Circuit has stated that "the major consideration choice most likely to result in a litigation." (citing 9 In re Charles Innotron Alan A. antitrust bifurcate Theodor (Fed. the Groz Cir. recognized toward the just final disposition of the & Arthur 800 R. F.2d at Miller, 1084 Federal (1971)). Bifurcation of Antitrust Counterclaims When applying and directed Diagnostics, Wright Practice & Procedure § 2388 is this principle counterclaims, issues & Sohne, 1992) that for to cases district trial. See F.2d 1352, 972 (table "district decision) courts with patent courts id. at 1992 WL (stating may claims frequently 1084-85; In re 188908, at *2 that generally Innotron favor separation of patent and antitrust issues for trial"),® the However, ® Dell disputes this assertion from Federal Circuit dictum regarding the waycourts "generally" handle cases with patent claims and antitrust counterclaims, arguing that bifurcation is the exception, not the rule. Def.'s Resp. Br. 8, ECF No. 306 (citations omitted). Whether bifurcation under such circumstances is the way courts "generally" proceed, or is the exception, is immaterial to the analysis here as this Court exercises its discretion on the facts of this case, rather than applying a rule of district courts are not required to bifurcate patent claims and antitrust claims, and retain "considerable discretion in determining whether the severance of antitrust and patent issues would best prejudice, & Sohne, 1084). in serve the convenience 1992 WL 188908, at *2 (citing parties, avoid In re Theodor Groz Innotron, 800 P.2d at Courts have synthesized these bifurcation considerations the patent/antitrust context Co. 6965048, V. at Katun *1 Corp., (D.N.J. and conserve jury's comprehension of Ricoh the and minimize expense and delay." "whether bifurcation will the of judicial considered resources, improve the issues, and avoid prejudice." No. CIV.A. 03-2612 2005) (citing Montell N.V., 28 F. Supp. 2d 833, 837 In re Theodor Groz & Sohne, specifically 2005 WL Carbide Union WHW, Corp. v. (S.D.N.Y. 1998)); see also 1992 WL 188908, at *2 (noting that district courts may consider the "commonality of the patent and antitrust make issues bifurcation presented" and "\mworkable whether and [an] the issues presented inefficient use of judicial resources"). B. Bifurcation of Patent Misuse Defense When a defendant asserts a patent misuse defense along with antitrust counterclaims, manage the litigation. courts See, have e.g., generality or exception. W.L. utilized bifurcation Gore & Assocs., to Inc. v. See In re Hamilton, 82 F.3d 432 (Fed. Cir. 1996) {table decision) (refusing to issue a writ of mandamus to a district court to bifurcate the patent and antitrust claims for trial). 10 Int'l Med. (Fed. Cir. Prosthetics Research Assocs., 1992) (noting that Inc., 975 F.2d 858, 860 the district court bifurcated a patent misuse defense together with the antitrust counterclaim) ; Va. Panel Corp. 1997) v. MAC Panel Co., 133 F.3d 860, 863 (Fed. Cir. (noting that the lower court bifurcated the trial into a standard "infringement" claims were patent tried, misuse Trial litigation that have presentation and an defense courts of trial, in which the patent infringement "antitrust" and antitrust have utilized noted that evidence in which both the counterclaim were bifurcation "when the trial, to considering patent misuse tried). manage the such orderly defense is more appropriately tried along with the antitrust issues." Va. Panel Corp. Va. V. Mac Panel Co., (explaining that demonstrating the 887 F. Supp. patent "expansion of 880, misuse patent 884 (W.D. defense monopoly may 1995) include rights over unpatented devices"). III. As an alternative Counter-Defendants to request DISCUSSION their that pending the Motion Court to bifurcate Dismiss, Dell's counterclaims I-X and patent misuse affirmative defense so that they may be tried infringement claims. separately from Plaintiffs' patent The Court will first consider bifurcation of Dell's counterclaims I-X, and then will evaluate bifurcation of Dell's patent misuse defense. 11 A. Bifurcation of Dell's Co\mterclaims I-X 1. Convenience and Judicial Economy The Court first conserve judicial parties, witnesses, that bifurcation because Dell's evaluates resources and is and the in whether be more Court. "the counterclaims convenient of judicial infringement Br. 5. Dell argues that the defenses evidence the argue economy, unrelated issues that will require different evidence." Reply would for Counter-Defendants interest and bifurcation raise Pis.' regarding the "patent issues" and Dell's antitrust counterclaims overlaps, and therefore i t would be more convenient and expedient to hear the patent infringement trial. Court and Def.'s Resp. orders witnesses antitrust Br. 13-14. separate will be trials, counterclaims all of these that a the Court [completed] simplify some of later trial. the factors considers of CIV.A 09-80-JJF-MPT, 2010 v. and expert Id. at 14. there is trial on [the plaintiffs'] Masimo Corp. "[i]f the and two separate convenience whether (the defendant's] single their credibility and the weight to be given to their testimony." economy, fact required to testify twice, assessing a According to Dell, juries will be required to evaluate In in and a judicial "possibility patent claims will antitrust counterclaims" in a Philips Elecs. WL 925864, at *2 N. (D. Am. Corp., No. Del. 2010); see also Otsuka Pharm. Co. v. Apotex Corp., 143 F. Supp. 3d 188, 197 12 {D.N.J. 2015) infringement (noting issue that might when moot a resolution of counterclaim, a it patent is in interest of judicial economy to bifurcate the trial); Int'l Inc. 756766, so V. at *4 long as Tech. (D. Del. some simplified, be New . . implicated of Co., 1996) the No. CIV.A. 96-272 the Dentsply MMS, 1996 WL ("Separate trials may be warranted issues in a second trial would be . all of the issues in a second trial need not in the first." (citing Akzona, Inc. v. E.I. Du Font de Nemours & Co., 607 P. Supp. 227, 232 (D. Del 1984))). Here, than Dell's antitrust Plaintiffs' patent antitrust claims pool are licensees knowledge about antitrust against both claims. substantial regarding there and new the any may be the Dell's and (4) some patent efficiency interest the (2) include a (Dell), include ten unique claims See generally Countercl. overlap of infringement evidence infringement scope because single licensee counterclaim additional patent claims in the patents in the SISVEL instead of a based upon federal and state law.® while greater three patents-in-suit, cover a worldwide market, Therefore, much infringement include all of instead of only the large number of (3) (1) claims witnesses claims appears beyond claims, in hearing the to require the evidence thus all and with of militating the claims ® Counter-Defendants did not request the Court to bifurcate Count XI of Dell's counterclaim. 13 together in a Co., 318 F. single trial. Supp. 959, See Components, 966 ("Pursuant to Rule 42(b) (D. Me. 1970) Inc. v. W. Elec. (collecting cases) the courts have frequently found it to be in the interest of economy and convenience, both to the court and to the parties, disposition of and in furtherance of the most expeditious complex litigation of this kind, antitrust and misuse issues from the issues of and infringement."). Moreover, to sever [patent] resolution of the validity the patent infringement claims could resolve one or more of the antitrust claims because several of Dell's counterclaims are listed as alternative arguments depending on the resolution of the patent infringement claims.' not infringed, (Breach of and Count X that the favor of If the patents are found to be invalid, or \inenforceable. RAND Obligations), (Waiver) factors of bifurcating Dell's counterclaim Count VIII Count IX would all be moot. (Promissory Thus, Estoppel), the Court finds judicial economy and convenience weigh in the patent infringement claims from the a n t i t r u s t claims. ' See Countercl. are H 208 found valid, (Count VIII: infringed, "In the event that the Asserted Patents and enforceable, Counter-Defendants have to comply with their RAND obligations."); H 213 failed (Count IX: "In the event that the Asserted Patents are found valid, infringed, and enforceable. Dell has result of its reasonable reliance and Counter-Defendants' been damaged as a failure to offer a license to the Asserted Patents on reasonable and non- discriminatory terms and conditions."}; H 217 (Count X: "In the event that the Asserted Patents are found valid, infringed, and enforceable. Dell has been damaged as a result of its reasonable reliance and Counter-Defendants' waiver of its [sic] rights to seek licensing fees beyond those fees that are reasonable and non-discriminatory."). 14 2. Jury Confusion Next, patent Counter-Defendants infringement "significantly claims reduce the argue from risk that the of Dell argues that antitrust juror Opening Br. 10-11 {citing Masimo Corp., In response. bifurcation of claims the would confusion." Pis.' 2010 WL 925864, at *2). Counter-Defendants' concerns are only "generalized concerns about juror confusion," which cannot justify separate trials. Def.'s Resp. Br. 16. Moreover, according to Dell, at most, concerns about juror confusion would only justify separate trials, antitrust claims. In the the ultimate at just disposition of the consider whether bifurcation would comprehension 6965048, at 16 n.6. interest of a Court must jury's Id. not a stay of discovery on Dell's *1. of the "[N]either objective [of issues." litigation, "improve the Ricoh Co., 2005 nor economy is convenience bifurcation]: ' [A] WL the paramount consideration at all times in the administration of justice is a fair and impartial economy of time, thereto.'" {E.D. La. (S.D.N.Y. trial 1951)). litigants. Considerations of money and convenience of witnesses must yield LoCicero v. 1971) to all Humble Oil (citing Baker v. Thus, & Ref. Co., Waterman, 52 F.R.D. 11 F.R.D. 28, 440, in deciding whether to bifurcate, 29 441 "the major consideration is directed toward the choice most likely to 15 result in a Innotron, just final disposition of the litigation," 800 F.2d at 1084. Here, Coxmter-Defendants raise concern over juror confusion. the patents-in-suit matters the of fact average actions In re and for personal Ricoh Co., 2005 "patent cases law that juror as more "generalized" in Br. WL 6965048, at *1. product, and claims no general, are not Unlike 195 F.R.D. as the 618, intuitive three such as cited by {N.D. 111. one allegedly instant patents to would be." 622 the Both involve case one claim, counterclaim, involve 16. common actions, 2000), which involved a single patent, infringement a injury or breach of contract, Dell, Real v. Bunn-O-Matic Corp., infringing than See Def.'s Resp. and issues of reasonable more with patent detailed technological questions related to software programing, multiple allegedly involving infringing both products, Federal additional patents, Countercl.; see and see also and state ten law generally Masimo antitrust claims, and Compl.; Corp., 2010 see WL claims numerous generally 925864, at *2 ("Explanation and presentation of the existence and relevance of these non-asserted complicate Thus, while trial patents and in Real, to the inevitably the court jury lead found to would only further juror confusion."). "no compelling reason to conduct separate trials" on the issues of liability and damages, Real, 195 F.R.D. at 622, the 16 instant case involves complex issues that, confusion, as of if tried the telephonic exhibits," status exhibit conference list was issues Ricoh Co., 2005 interest bifurcating the on April juror trial WL 6965048, comprehension because jury 24, 2017, 6,000 "in the range of 800 to at to patent issues would pose a of create "something north of for even the most astute of juries."). the likely (notifying the Court that, and Dell's exhibit list was documents"); antitrust would see Status Conf. Tr. 38-39 Counter-Defendants' 850 together, *1 {"[T]o add difficult task The Court concludes that weighs bifurcation in the of favor of antitrust claims and patent infringement claims "will surely enhance jury decision making in two ways: (1) by presenting the evidence in a manner that is easier for the jurors to understand, and (2) by limiting the number of legal issues the jury must address at any particular Pharm. Co., antitrust complex time." 143 and Ricoh F. patent patent Co., Supp. 2005 WL at 197 3d 696504 8, claims *1; ("Bifurcation misuse] Counterclaims infringement at from further the of Otsuka [the already- enhances *the parties' right to jury trial by making the issues the jury must consider less complex.'" Pharm. *11 Co., (D.N.J. Nos. 98-2749, (quoting Warner Lambert Co. v. Purepac 99-5948, 2000))). 17 00-2053, 2000 WL 34213890, 3. Prejudice Finally, prejudice the parties both assert that they will experience if request. the Court does Counter-Defendants not proceed as argue that a they respectively single trial will prejudice them by the jury hearing the allegations that CoxinterDefendants jury is Pis,' have engaged evaluating Opening allegations market" for licensees, Plaintiffs' Br. of and and consumers. have consumers of in counterclaims include behavior such Countercl. allegations in the with technology 106-107. vast that "worldwide "[1]icensors, . . . located In this worldwide number include anticompetitive the claims. technology, Counter-Defendants' Dell's engaged MP3 behavior while infringement Dell's Counter-Defendeuits' MP2 with patent 10-11. throughout the world." context, in anticompetitive of licensees and Counter-Defendants conspiracies, improper market monopolization, and "have breached the promises they made to the MP3 Standard body." argues 98, 121, resolution of Dell's In response. Dell i t because bifurcation counterclaims. Def.'s Resp. 15-16. Under Federal Rule of Civil Procedure 42(b), bifurcate a trial "to avoid prejudice." "The 131. that bifurcation would prejudice would delay Br. Id. inevitable effect prejudicial evidence [is] of the introduction to deny 18 Fed. R. of a court may Civ. . . [the opposing party] P. 42(b). . highly the fair trial to which it Inc., 990 F.2d 1440, non-patent case, court to claims deny irrelevant entitled." 1445 (4th Cir. motion "expos [ed] to it v. CSX Transp., {holding that, the jury to Here, conspiracies, claims evaluates the improper patent . . . Dell's and breach of promises could bias the when Dixon 1993) bifurcate evidence")- anticompetitive See it was an abuse of discretion for a a together was when in a district trying inflammatory and allegations market Corp., defendant's] 2010 WL 925864, jury against Plaintiffs infringement at of monopolization, claims, thus preventing a fair trial on the patent infringement claims. Masimo the *2 ("[A]t trial, See [the allegations of monopolization could bias the jury when it evaluates [the plaintiffs'] patent claims."). The Court next considers Dell's argument that bifurcation would cause it prejudice by delaying resolution of its antitrust claims. As Counter-Defendants allege, and Dell does not dispute, Dell waited twelve years (from the time that Audio MPEG first requested that Dell license the asserted patents) to bring the instant antitrust claims against Counter-Defendants. Resp. Br. 15. argument that resolution of that Dell is Def.'s Such delay in bringing suit weighs against Dell's it would suffer prejudice its counterclaims. Moreover, without the swift i t does not appear faced with any ongoing anticompetitive conduct by Counter-Defendants, such that damages would be mitigated by an 19 earlier patent trial pool date, will because have all of expired the patents before trial regardless of whether the trial is bifurcated. in the will SISVEL commence, Countercl. H 77 ("[T]he last expiration date of any patent in the SISVEL Patent Pool . . . that Dell expires on July 2, will not be 2017."). Thus, the Court finds unduly prejudiced by any minimal delay resulting from bifurcation. Having considered the factors above and finding factor weighs in favor of bifurcation, Defendants' Motion for a that each the Court GRANTS Counter- Separate Trial of Dell's Counterclaims I-X from trial of Plaintiffs' patent infringement claims. B. Bifurcation of Dell's Patent Misuse Defense Counter-Defendants Dell's patent also misuse request defense that from the (citing Va. defense, antitrust Panel Corp., patent issues." 887 F. misuse. Dell Supp. patent "more appropriately Pis.' at 884). alleges bifurcate Plaintiffs' infringement claims because this defense is tried along with the Court that Opening Br. 8 In its seventh Coxmter-Defendants "have sought to illegally extend the patent life of the patents that Plaintiffs claim essential patents . patents not that are expire years later, . are . , essential by tying these claimed which expired in 2010 and 2011, claimed to be essential and are with set to resulting in an anticompetitive requirement for licensees to pay royalties for licenses relating to patents 20 past their expiration." Counter-Defendants Patents beyond Answer H 15. "have their also Dell further alleges that sought original and to enforce proper scope improper application of industry standards." "Patent misuse infringement," 'patent's derive benefit teachings,' products that 2005) 395 U.S. not do v. the 'extend use the (1969)). the grant anticompetitive 1171, and 1182 (Fed. anticompetitive behavior, his of the patent the to patent's royalty on patent." F.3d 1179, U.S. (Fed. Hazeltine Res., v. 1184 Inc., the has is whether "the patentee physical done so or in Sanofi-Aventis Cir. 2011). temporal scope of a manner that has v. Apotex Inc., 659 Due to the focus on "the doctrine of patent misuse closely tracks antitrust law principles in many respects." Corp., the In determining if a patentee has "key inquiry" effects." of patent using to pay a of 424 means to "from use licensee Int'l Trade Comm'n, 135-36 the teaching by defense monopoly of to Asserted Id. H 16. patentee the requiring a impermissibly broadened F.3d a {citing Zenith Radio Corp. 100, patent equitable attributable not misused its patent, has an prevents to such as Philips Corp. Cir. which leverage' a is the U.S. Philips 424 F.3d at 1185-86. The Court finds that it is appropriate to bifurcate Dell's patent misuse defense along with Dell's antitrust claims because of the significant overlap in alleged facts and legal arguments. 21 In its patent misuse defense, Dell argues that Counter- Defendants are attempting to "illegally extend the patent life of the patents ... by tying" the essential asserted patents with non-essential patents in a patent pool. Dell's Counterclaim, Covinter-Defendants have Counter-Defendants ... is Count to (Tying), violated "have essential III tied federal the Answer H 15. Dell alleges antitrust license of law In that because technology that the practice of MP2 Decoding Technology and MP3 Decoding Technology, with patents that are not essential to the practice" of these technologies. Dell's III patent (Tying), Thus, misuse defense allege very because of the and similar legal and Countercl. Ill69. antitrust facts factual counterclaim and legal Both Count argument. overlap between Dell's patent misuse defense and antitrust counterclaim Count III, Court GRANTS patent misuse Counter-Defendants' request defense can be so that it antitrust counterclaims. See Va. 884 the ("[W]hen considering to bifurcate Dell's heard along with Panel Corp., 887 F. orderly presentation of the Supp. the at evidence the patent misuse defense is more appropriately tried along with the antitrust issues."). IV. CONCLUSION Having evaluated the relevant factors and finding that each factor weighs in favor of bifurcation, Defendants' Motion for a the Court GRANTS Counter- Separate Trial of Dell's Counterclaims 22 I-X and Patent Misuse Defense from trial of Plaintiffs' infringement claims. 6965048, *1 at ECF {"The No. Court has 253; see broad Ricoh Co., discretion whether to separate issues and claims for trial, 2005 in WL deciding in accordance with its broad power to manage its trial calendar."). DISMISSES as MOOT Counter-Defendants' patent The Court Motion to Stay discovery because discovery on both the patent infringement and antitrust claims is already complete. TAKES UNDER Dell's ADVISEMENT Counterclaims Defense I-X See Status Conf. Tr. 39. Counter-Defendants' and Strike (patent misuse defense). Dell's ECF No. Motion to Seventh 248. The Court Dismiss Affirmative Finally, while the Court appreciates the challenges for the parties resulting from continuance of their trial date, because the Court's docket was filled with many other trials already scheduled before this case was trial on transferred to Plaintiffs' December 5, the Court 2017, DIRECTS the patent and in the the undersigned Judge, infringement interest of parties before July 31, 2017. 23 to file the claims Court to SETS begin on judicial efficiency, all pretrial motions The Clerk is REQUESTED to send a Order to counsel IT IS copy of this Opinion and for Counter-Defendants and to counsel SO ORDERED, Mark S. UNITED Norfolk, Virginia May SI for Dell. 2017 24 STATES Davis DISTRICT JUDGE

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