Activevideo Networks, Inc. v. Verizon Communications, Inc.

• Decision Date: 17 August 2011
• Docket Number: Civil Action No. 2:10cv248.
• Citation: 807 F.Supp.2d 563
• Court: U.S. District Court — Eastern District of Virginia
• Parties: ACTIVEVIDEO NETWORKS, INC., Plaintiff, v. VERIZON COMMUNICATIONS, INC., Verizon Services Corp., Verizon Virginia Inc., and Verizon South Inc., Defendants.

807 F.Supp.2d 563

ACTIVEVIDEO NETWORKS, INC., Plaintiff,

v.VERIZON COMMUNICATIONS, INC., Verizon Services Corp., Verizon Virginia Inc., and Verizon South Inc., Defendants.

Civil Action No. 2:10cv248.

United States District Court, E.D. Virginia,Norfolk Division.

Aug. 17, 2011.

Nathan Wayne McCutcheon, David Michael Morris, Morgan Lewis & Bockius LLP, Washington, DC, Stephen Edward Noona, Kaufman & Canoles, P.C., Norfolk, VA, Ahren Christian Hsu–Hoffman, Daniel Johnson, Jr., Dion Michael Bregman, Efrain Staino Flores, Jason Evan Gettleman, Lorraine Marie Casto, Michael Francis Carr, Michael John Lyons, Morgan, Lewis & Bockius LLP, Palo Alto, CA, Brett Michael Schuman, Sheila Jambekar, Morgan, Lewis & Bockius LLP, San Francisco, CA, for Plaintiff.

Brent Lee Vannorman, Gregory N. Stillman, Hunton & Williams, Norfolk, VA, Brian Mark Buroker, Bradley Thomas Lennie, Justin T. Arbes, Hunton & Williams LLP, Evan Todd Leo, John Christopher Rozendaal, Joseph Solomon Hall, Kenneth Matthew Fetterman, Kfir Ben–Gurion Levy, Kiran S. Raj, Mark Charles Hansen, Michael Eugene Joffre, Michael Kerry Kellogg, Rebecca Ann Beynon, W. Joss Nichols, Wan Joo Kim, Kellogg Huber Hansen Todd Evans & Figel PLLC, Washington, DC, Caren K. Khoo, John P. Frantz, Leonard Charles Suchyta, Verizon Corporate Resources Group LLC, Basking Ridge, NJ, Henry Braude Gutman, Lisa Heather Rubin, Noah Maxim Leibowitz, Simpson Thacher & Bartlett LLP, New York, NY, Jason Bussey, Jeffrey Eric Ostrow, Patrick Edward King, Simpson Thacher & Bartlett LLP, Palo Alto, CA, for Defendants.

MEMORANDUM OPINION AND ORDER

RAYMOND A. JACKSON, District Judge.

Before the Court are Defendants', Verizon Communications Inc., Verizon Services Corp., Verizon Virginia Inc., and Verizon South Inc. (collectively, “Verizon”), Motion for Judgment as a Matter of Law of Validity of U.S. Patent No. 6,169,542; and Motion for Judgment as a Matter of Law that U.S. Patent No. 7,561,214 is Not Invalid, both pursuant to Federal Rule of Civil Procedure 50(a). Having carefully reviewed the Parties' pleadings, the Court ruled from the bench regarding Defendants' Motions on July 29, 2011. The reasons for the Court's rulings are set forth more fully below. For the reasons stated herein, Defendants' Motion for Judgment as a Matter of Law of Validity of U.S. Patent No. 6,169,542 and Motion for Judgment as a Matter of Law that U.S. Patent No. 7,561,214 is Not Invalid are both GRANTED.

I. FACTUAL AND PROCEDURAL HISTORY

On May 27, 2010, Plaintiff Active Video Networks, Inc. (“Active Video”), filed suit in the United States District Court for the Eastern District of Virginia against Verizon alleging patent infringement and seeking to enjoin Verizon from infringing certain patents that ActiveVideo owns and to recover monetary damages for previous infringement. On December 2, 2010, Verizon filed an Answer to ActiveVideo's First Amended Complaint and First Amended Counterclaims against ActiveVideo, seeking, inter alia, declaratory judgments of noninfringement and invalidity of ActiveVideo's asserted patents and alleging ActiveVideo's infringement of several patents owned by Verizon. In response, ActiveVideo filed an Answer to Defendant's First Amended Counterclaims and ActiveVideo's First Amended Counterclaims on December 16, 2010 alleging invalidity and non-infringement of the patents that Verizon asserted against it.

On July 12, 2011, a jury trial was held in the United States District Court for the Eastern District of Virginia on ActiveVideo and Verizon's claims of infringement and invalidity. During the trial, ActiveVideo asserted infringement of four of its patents: United States Patent Nos. 5,550,578 (the “'578 patent”), 6,100,883 (the “'883 patent”), 6,034,678 (the “'678 patent”), and 6,205,582 (the “'582 patent”). Similarly, Verizon asserted infringement of two of its patents: United States Patent Nos. 6,169,542 (the “'542 patent”) and 7,561,214 (the “'214 patent”). Specifically, Verizon asserted ActiveVideo's infringement of Claim 1 of the '542 patent and Claim 9 of the '214 patent. During the course of the trial, ActiveVideo presented evidence, through the expert testimony of Dr. Diana Hawkins Manuelian, that each of the asserted claims of Verizon's patents were anticipated by prior art. On July 29, 2011, at the close of all the evidence pertaining to its counterclaims, Verizon filed the instant Motion for Judgment as a Matter of Law of Validity of U.S. Patent No. 6,169,542 and Motion for Judgment as a Matter of Law that U.S. Patent No. 7,561,214 is Not Invalid. On July 29, 2011, after thoroughly consideration, the Court granted both of Verizon's Motions.

II. LEGAL STANDARDS

A. Judgment as a Matter of Law

A district court may grant a motion for judgment as a matter of law if the nonmoving party has been fully heard on an issue and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue. See Fed.R.Civ.P. 50(a); see also Wheatley v. Wicomico Cnty., Md., 390 F.3d 328, 332 (4th Cir.2004) (“Such a motion [for judgment as a matter of law] is properly granted ‘if the nonmoving party failed to make a showing on an essential element of his case with respect to which he had the burden of proof.’ ” (quoting Singer v. Dungan, 45 F.3d 823, 827 (4th Cir.1995))). In considering a motion for judgment as a matter of law, the court must “view the evidence in the light most favorable to ... the nonmovant, and draw all reasonable inferences in his favor without weighing the evidence or the witnesses' credibility.” Baynard v. Malone, 268 F.3d 228, 234–35 (4th Cir.2001). However, “[t]he party bearing the burden of proof must produce genuine evidence that creates a fair doubt; ‘wholly speculative assertions will not suffice.’ ” Bongam v. Action Toyota, Inc., 14 Fed.Appx. 275, 280 (4th Cir.2001) (citation omitted); see also Price v. City of Charlotte, N.C., 93 F.3d 1241, 1249 (4th Cir.1996) (“The movant is entitled to judgment as a matter of law ‘if the nonmoving party failed to make a showing on an essential element of his case with respect to which he had the burden of proof.’ ” (citation omitted)).

B. Anticipation

An accused infringer challenging the validity of a patent claim must prove anticipation by clear and convincing evidence. See Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 962 (Fed.Cir.2001). An invention is anticipated under 35 U.S.C. § 102 where, inter alia, it was “known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent,” § 102(a), or it was described in “an application for patent, published under section 122(b), by another filed in the United States before the invention by the applicant for patent” or “a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent,” § 102(e). However, “[t]o be anticipating, a prior art reference must disclose ‘each and every limitation of the claimed invention[,] ... must be enabling[,] and [must] describe ... [the] claimed invention sufficiently to have placed it in possession of a person of ordinary skill in the field of the invention.’ ” Helifix Ltd. v. Blok–Lok, Ltd., 208 F.3d 1339, 1346 (Fed.Cir.2000) (internal citations omitted).

III. DISCUSSION

In Verizon's Motion for Judgment as a Matter of Law of Validity of U.S. Patent No. 6,169,542 and Motion for Judgment as a Matter of Law that U.S. Patent No. 7,561,214 is Not Invalid, Verizon argues that ActiveVideo failed to prove by clear and convincing evidence that the asserted claims of Verizon's patents are invalid. Specifically, Verizon argues that ActiveVideo's invalidity expert, Dr. Manuelian, failed to establish the presence of each and every element of the asserted claims in the prior art references as required to prove anticipation, and failed to demonstrate that a certain reference relied upon in her anticipation analysis of the '542 patent actually constitutes prior art. The Court addresses the sufficiency of Dr. Manuelian's invalidity analysis with respect to each of Verizon's asserted claims in turn.

A. Anticipation of Claim 1 of the '542 patent

In her anticipation analysis of Claim 1 of the '542 patent, Dr. Manuelian considered two separate prior art references. First she considered a 1991 or 1992 embedded Covergirl advertisement (the “Covergirl ad”) originally produced by Dr. Manuelian as a demonstration of ICTV, Inc.'s (“ICTV”), ActiveVideo's predecessor, technology. Second, Dr. Manuelian considered U.S. Patent No. 5,319,455 (the “'455 Patent”) entitled “System for distributing customized commercials to television viewers,” which was filed on December 23, 1992. In considering Dr. Manuelian's analysis of the Covergirl ad, Verizon argues that the Covergirl ad should not be considered prior art for two reasons. First, Verizon contends that the Covergirl ad was merely a demonstration produced for promotional purposes rather than a video created by ICTV's operational system. Second, Verizon argues that the Covergirl ad was not sufficiently available to the public because it bears a confidentiality legend stating “Copy or Public Display Strictly Prohibited.” The Court addresses each of Verizon's arguments with respect to the status of the Covergirl ad as prior art in turn.

Under 35 U.S.C. § 102(a), a person is not entitled to a patent where “the invention was known or used by others in this country ... before the invention thereof by the applicant for patent.” The requirement that an invention be “known” by others does not require that the invention actually be reduced to practice in order to constitute prior art, so long as the knowledge satisfies the requirements of disclosure and enablement. See Ecolochem, Inc. v. S. Cal. Edison Co., 227 F.3d 1361, 1369 (Fed.Cir.2000) (“A presentation indicative of the state of knowledge...