Ultratec, Inc. et al v. Sorenson Communications, Inc. et al
Filing
563
OPINION AND ORDER granting #396 Motion in Limine no. 3, on one condition; granting #397 Motion in Limine no. 4 with one exception; denying #400 Motion in Limine no. 7; denying as moot #403 Motion in Limine no. 10; Reserving the ruling on #451 Motion in Limine no. 12; denying as moot #464 Motion in Limine no. 16. Signed by District Judge Barbara B. Crabb on 10/3/14. (jat)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ULTRATEC, INC. and CAPTEL, INC.,
OPINION AND ORDER
Plaintiffs,
13-cv-346-bbc
v.
SORENSON COMMUNICATIONS, INC.
and CAPTIONCALL, LLC,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -This civil action involving claims of patent infringement and counterclaims of
invalidity is scheduled for trial beginning on October 14, 2014. This order addresses
plaintiffs’ motions in limine nos. 12 and 16 and defendants’ motions in limine nos. 3, 4, 7
and 10.
OPINION
I. PLAINTIFFS’ MOTIONS IN LIMINE
A. Plaintiffs’ Motion in Limine No. 12 to Preclude Evidence or Argument Concerning
Any Alleged Good-Faith Belief of Invalidity Before the Issuance of
the Inter Partes Review Institution Decisions, dkt. #451
Plaintiffs ask the court to preclude defendants from arguing that before the Patent
Trial and Appeals Board instituted inter partes review of the patents-in-suit on March 5,
2014, defendants had a good-faith belief that the patents-in-suit were invalid. Plaintiffs say
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that defendants have no evidence indicating how or when they came to a good faith belief
that the patents-in-suit were invalid after the date the complaint was filed (which is when
defendants say is the first time they learned of the patents-in-suit and what they covered)
and before the date on which the Board granted inter partes review. In particular, say
plaintiffs, defendants have never disclosed an advice-of-counsel defense and have declined
to answer questions addressing their good-faith belief on grounds of privilege. In response,
defendants say that this is irrelevant because they have evidence, including testimony from
Pat Nola and Robert Puzey, that will show that defendants had a good faith belief in
invalidity even before the suit was filed. Defendants also appear to be arguing that they can
introduce their answer to the complaint, counterclaims and petitions for inter partes review
as additional evidence of their good-faith belief after the lawsuit was filed.
Because there are no longer any claims of induced infringement at issue in this case,
Oct. 1, 2014 Opin. and Ord., dkt. #558, any evidence concerning defendants’ alleged goodfaith belief in the invalidity of the patents-in-suit is relevant only to the subjective prong of
willfulness for the purposes of damages. However, that question will be at issue in this case
only if (1) the jury rejects defendants’ invalidity defenses; and (2) the court allows plaintiffs
to present their willfulness case to the jury. (I will address defendants’ motion regarding
willfulness later in this opinion.) Because of the conditional nature of plaintiffs’ motion, I
will reserve ruling on it and address plaintiffs’ concerns if and when plaintiffs are allowed to
present their willfulness contentions to the jury.
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B. Plaintiffs’ Motion in Limine No. 16 to Preclude Defendants from Offering Any Evidence
or Argument During the Liability Phase Related to the Pending Inter Partes Review
Proceeding to Negate Intent for Induced Infringement, dkt. # 464
This motion is moot as a result of the court’s dismissal of plaintiffs’ induced
infringement claims.
II. DEFENDANTS’ MOTIONS IN LIMINE
A. Defendants’ Motion in Limine No. 3 to Preclude Evidence
Regarding Opinion of Counsel, dkt. #396
Defendants argue that the jury should not hear “any evidence or argument that
Defendants could have or should have sought” an opinion of counsel with respect to any
alleged infringement because 1) defendants have not asserted an advice of counsel defense;
and 2) such evidence and argument is barred by 35 U.S.C. § 298. This statute, which was
enacted as part of the America Invents Act, reads:
The failure of an infringer to obtain the advice of counsel with respect to any
allegedly infringed patent, or the failure of the infringer to present such advice
to the court or jury, may not be used to prove that the accused infringer
willfully infringed the patent or that the infringer intended to induce
infringement of the patent.
Plaintiffs do not object to defendants’ motion in principle but argue that the statutory
bar should not be interpreted so narrowly as to preclude them from rebutting any evidence
defendants seek to introduce that implies that defendants consulted with counsel or had
some legal basis for believing the patents to be invalid. (As discussed above, plaintiffs’
motion in limine no. 12 also referred to this issue.)
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Generally speaking, I agree with plaintiffs that the protection granted by 35 U.S.C.
§ 298 dissolves in the event defendants “open the door” by attempting to refute a claim of
willful infringement by implying that they relied on the advice of counsel. With respect to
the specific evidentiary issues that plaintiffs highlight in their response to the motion, it is
not necessary to address them at this time. As noted in the discussion of plaintiffs’ motion
in limine no. 12, evidence concerning defendants’ subjective, good-faith belief of invalidity
is no longer relevant during the liability phase of trial and will become relevant only during
the damages phase if this court allows plaintiffs to present their willfulness contentions to
the jury. Should that occur, the parties should bring to the court’s attention any remaining
evidentiary disputes related to good-faith and advice of counsel.
B. Defendants’ Motion in Limine No. 4 to Exclude Evidence of Plaintiffs’ Unasserted
and Non-Prior Art Patents, dkt. #397
Defendants want the court to preclude plaintiffs from presenting any evidence or
argument concerning any patent owned by plaintiffs except for those that are alleged to have
been infringed in this case or those that are used as prior art. They argue that evidence
concerning plaintiffs’ other patents is irrelevant and unduly prejudicial.
In response,
plaintiffs state that they want to introduce evidence of their other patents for the purpose
of showing that Robert M. Engelke and Kevin Colwell, inventors of the patents-in-suit and
named expert witnesses in this case, are accomplished inventors in the area of technology in
dispute. (Plaintiffs also say the evidence of other patents is relevant to their inducement
claim, but this argument is now moot.) I agree that evidence of plaintiffs’ unasserted patents
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is relevant to establishing Engelke’s and Colwell’s expert qualifications and credibility.
Further, I am not persuaded that such evidence would be unduly prejudicial to defendants.
Accordingly, evidence of plaintiffs’ unasserted and non prior-art patents is admissible for this
limited purpose. Defendants’ motion will be granted in all other respects.
C. Defendants’ Motion in Limine No. 7 to Exclude Evidence of Willfulness, dkt. #400
Plaintiffs have alleged and intend to pursue at trial a claim that defendants’
infringement was willful, thereby permitting (but not requiring) the court to award enhanced
damages. 35 U.S.C. § 284 (“[T]he court may increase the damages up to three times the
amount found or assessed.”); Beatrice Food Co. v. New England Printing and Lithographing
Co., 923 F.2d 1576, 1578 (Fed. Cir. 1991) (although statute does not state basis upon
which district court may increase damages, “[i]t is well-settled that enhancement of damages
must be premised on willful infringement or bad faith.”) (citations omitted). Defendants
seek an order precluding plaintiffs from introducing any evidence tending to show subjective
willfulness unless and until the court rules on the reasonableness of their invalidity defenses,
which is the objective prong of the willfulness test. In re Seagate Technology, LLC, 497 F.3d
1360, 1371 (Fed. Cir. 2007) (en banc) (setting out two-part test for willfulness); Bard
Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 682 F.3d 1003, 1005-06 (Fed. Cir.
2012) (“generally the objective prong of Seagate tends not to be met where an accused
infringer relies on a reasonable defense to a charge of infringement”) (citations omitted).
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Plaintiffs generally agree that the issue of willfulness should not be considered by the
jury until after it finds liability. (They seek a “preliminary” instruction on willfulness before
the liability phase but I decline to give this instruction.) However, plaintiffs argue that:
1) Plaintiffs should not be barred from presenting evidence bearing on
willfulness to the extent it may also relate to liability issues; and
2) This court may consider the objective prong of the willfulness test before,
during or after the jury decides the subjective prong.
I agree with plaintiffs on both points. In general, to the extent that evidence is
admissible to prove the subjective prong of the willfulness test, is also relevant to questions
the jury must consider in reaching its determination on liability and is not inadmissible on
other grounds, plaintiffs may introduce it during the liability phase. In particular, some of
the “willfulness” evidence (copying of plaintiffs’ inventions and commercial success) may be
relevant to defendants’ claims of obviousness. At trial, defendants are free to object to
specific pieces of evidence on the ground that they are irrelevant to non-obviousness or that
their relevance is outweighed by their prejudicial effect. At this time, however, I decline to
grant defendants’ blanket request for the exclusion of all evidence bearing on willfulness.
Second, although it is true that some cases include language supporting defendants’
position that submitting the willfulness question to the jury is improper unless and until the
court first decides whether plaintiffs have met their burden with respect to the objective
prong of the test, e.g., BASF Corp. v. Aristo, Inc., 2012 WL 2529229, at *3 (N.D. Ind. June
29, 2012) (“According to Bard, a willfulness determination should be sent to the jury only
when a judge has decided, as a matter of law, that there is clear and convincing evidence that
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a defendants’ conduct in using an allegedly patented process was objectively reckless”), I am
not convinced that the Federal Circuit has imposed such a hard and fast rule on district
courts. Although it is clear that the objective determination is a legal determination that
must be decided ultimately by the court and that there is no reason to submit the willfulness
question to the jury if the court has determined that the accused infringer’s defenses are
objectively reasonable, I do not understand the cases to require a trial court presiding over
often-complex and fact-intensive patent trials to put a case on hold while it considers the
objective question, or alternatively, to work through the night to issue a decision on the
objective prong so as not to hold up the trial. As the Federal Circuit recognized in Powell
v. Home Depot U.S.A., Inc., 663 F.3d 1221, 1237, n.2 (Fed. Cir. 2011), district courts have
broad discretion to set the order of trial and may, if the circumstances require, reserve a
ruling on the objective prong of the willfulness inquiry until after the subjective prong has
been addressed. Other district courts have taken this approach. E.g., Carnegie Mellon Univ.
v. Marvell Technology Group, Ltd., 986 F. Supp. 2d 574, 622 (W.D. Penn. Sept. 23, 2013)
(declining to decide objective prong on motion for judgment as a matter of law made prior
to jury’s consideration of subjective prong and allowing subjective prong to be tried); Apple,
Inc. v. Samsung Electronics, Co., Ltd., 920 F. Supp. 2d 1079, 1106–07 (N.D. Cal. Jan. 29,
2013) (allowing jury to decide subjective willfulness before court considered objective
willfulness).
That being said, after the jury is dismissed to deliberate on liability, defendants may
move for judgment as a matter of law that plaintiffs cannot meet their burden with respect
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to the objective prong of the willfulness test. If circumstances allow, the court will rule on
that motion before or soon after the jury delivers its liability verdict.
Finally, I reject plaintiffs’ contention that Seagate’s two-part test and the clear and
convincing evidence burden of proof have been implicitly overruled by the Supreme Court’s
decision in Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014).
Octane Fitness involved 35 U.S.C. § 285, which allows the court “in exceptional cases” to
award attorney fees to the prevailing party, not § 284, which is the enhanced damages
provision. Given the differences between the statutes and absent further guidance from the
Federal Circuit, I decline to find that Octane Fitness applies by extension to § 284.
D. Defendants’ Motion in Limine No. 10 to Preclude Testimony Regarding
Infringement Theories Based on Direction or Control, dkt. # 403
This motion is moot in light of the court’s October 1 order dismissing the induced
infringement claims.
ORDER
IT IS ORDERED THAT:
1. Plaintiffs’ motion in limine no. 16, dkt. #464, and defendants’ motion in limine
no. 10, dkt. #403, are DENIED as moot.
2. The ruling on plaintiffs’ motion in limine no. 12, dkt. #451, is RESERVED. If
at trial either side believes it needs a ruling on a particular witness or a particular line of
questioning, it can request one from the court.
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3. Defendant’s motion in limine no. 3, dkt. #396, is GRANTED on the condition
that defendants do not “open the door” by attempting to refute a claim of willful
infringement by implying that they relied on the advice of counsel. If at trial either side
believes it needs a further ruling on this issue with respect to a particular witness or a
particular line of questioning, it can request one from the court.
3. Defendants’ motion in limine no. 4, dkt. #397, is GRANTED with one exception.
Plaintiffs may introduce evidence of their other patents for the limited purpose of
establishing the expert qualifications and credibility of Robert Engelke and Kevin Colwell.
4. Defendants’ motion in limine no. 7, dkt. #400, is DENIED.
Entered this 3d day of October, 2014.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge
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