Am. Technical Ceramics Corp. v. Presidio Components, Inc., 14-CV-6544(KAM)(GRB)

• Decision Date: 27 March 2018
• Docket Number: 14-CV-6544(KAM)(GRB)
• Court: United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
• Parties: AMERICAN TECHNICAL CERAMICS CORP. and AVX CORPORATION, Plaintiffs, v. PRESIDIO COMPONENTS, INC., Defendant.

AMERICAN TECHNICAL CERAMICS CORP. and AVX CORPORATION, Plaintiffs, v. PRESIDIO COMPONENTS, INC., Defendant.

14-CV-6544(KAM)(GRB)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

March 27, 2018

MEMORANDUM & ORDER

MATSUMOTO, United States District Judge:

Plaintiffs American Technical Ceramics Corp. ("ATC") and AVX Corporation ("AVX," and together with ATC, "plaintiffs") initiated the instant action by filing a complaint ("Compl." or the "complaint," ECF No. 1) on November 6, 2014, alleging infringement by defendant Presidio Components, Inc. ("Presidio" or "defendant") of the following patents held by plaintiffs: United States Patent No. 6,144,547 (the "'547 Patent"), United States Patent No. 6,337,791 (the "'791 Patent," together with the '547 Patent, the "patents-in-suit"), and United States Patent No. 6,992,879 (the "'879 Patent").¹ (See generally Compl.; see also Compl. Ex. 1, ECF No. 1-3 (annexing '547 Patent, '791 Patent, and '879 Patent).) Plaintiffs seek damagesarising from the alleged infringement, judgment that Presidio infringed the patents-in-suit, judgment that Presidio's acts of infringement are willful, an award of enhanced damages and attorneys' fees pursuant to 35 U.S.C. §§ 284 and 285, injunctive relief prohibiting Presidio from engaging in further infringement, an accounting, and an award of interest and costs. (Compl. at 5-6.)

Defendant filed an answer and counterclaim ("Ans." or the "answer," ECF No. 22) on January 5, 2015, in which it denied having infringed plaintiffs' patents, (see Ans. p. 2 ¶ 7-p. 5 ¶ 26),² and asserted affirmative defenses including noninfringement, invalidity of the patents-in-suit, laches, equitable estoppel, and waiver. (Id. p. 4 ¶ 27-p. 6 ¶ 34.) Defendant also asserted two counterclaims, the first seeking a declaratory judgment that defendant does not infringe the patents-in-suit and the '879 Patent, (id. p. 7 ¶ 7-p. 11 ¶ 10), and the second seeking declaratory judgment that the patents-in-suit and the '879 Patent are invalid. (Id. p. 11 ¶ 12-p. 12 ¶ 16.) Plaintiffs filed an answer denying the counterclaims on January 29, 2015. (ECF No. 23.)

Presently before the court are cross-motions for summary judgment pursuant to Federal Rule of Civil Procedure("Rule") 56. Plaintiffs' motion, which defendant opposes, seeks summary judgment in its favor as to defendant's affirmative defenses of laches, equitable estoppel, and waiver. (Notice of Motion, ECF No. 97.) Defendant's motion, which plaintiffs oppose, seeks summary judgment in its favor that: (1) plaintiffs failed to undertake patent marking, (2) the '879 Patent is invalid, (3) plaintiffs cannot establish lost profit damages, (4) this is not an "egregious" case warranting enhanced damages, (5) the '547 Patent is indefinite, (6) defendant did not infringe the '547 Patent, and (7) defendant did not infringe the '791 Patent. (Motion for Summary Judgment, ECF No. 94.)

Background

I. The Parties

ATC is a wholly-owned subsidiary of AVX. (Claim Construction Order ("Cl. Constr. Order"), ECF No. 79, at 2.) ATC, AVX, and Presidio are manufacturers of electrical devices, including capacitors, which are electronic components that store and release energy within a circuit, and are used in a variety of electrical systems, including consumer electronics. (Id.) Capacitors typically consist of two parallel conductive, usually metal, plates separated by a non-conductive, insulating material known as a "dielectric." (Id.)

The patents-in-suit relate to "multilayer ceramic capacitors" ("MLCCs"), which are created through the combinationof multiple capacitors by stacking several layers of conductive material and non-conductive, or dielectric, material. (Id. at 2-3.) Plaintiffs and defendant make and sell MLCCs. (Id. at 3.) Plaintiffs manufacture a product known as the Accu-P capacitor. Plaintiff AVX owns the '547 Patent and ATC is the exclusive licensee. Plaintiff ATC owns the '791 Patent. Defendant manufactures products known as BB capacitors, which plaintiffs contend practice and as such infringe the patents-in-suit.

II. Procedural History³

A. Claim Construction

Following briefing, the court held a claim construction, or Markman, hearing on August 31, 2016, at which the parties presented oral argument and expert testimony to explain their proposed constructions of certain claims in the patents-in-suit. (Cl. Constr. Order at 3.) On November 7,2016, the court entered its claim construction order, setting forth how those disputed terms would be construed.

1. The '547 Patent

Of particular relevance to defendant's motion for summary judgment, the court considered the term "substantially L-shaped terminations," which appears in all claims of the '547 Patent and describes the appearance and structure of the terminations that devices practicing the '547 Patent would have. The court concluded that the term was to be construed "in accordance with its ordinary meaning, i.e., as a termination that is substantially or largely L-shaped, but not wholly L-shaped." (Id. at 20-21.) In reaching this construction, the court rejected defendant's argument that "substantially L-shaped" would not "sufficiently distinguish the structure from U-shaped terminations," and instead determined that "[t]erminations having a U-shape are already excluded by the ordinary meaning of substantially L-shaped, because a structure with terminations that extend around the lateral sides of a device body would not be L-shaped." (Id. at 20 (internal quotation marks omitted).)

Also relevant to defendant's motion, at the claim construction stage, the court considered the '547 Patent's statement, recited in each of its claims, that the "substantially L-shaped terminations" extend "negligibly over atop surface" of the device body. The court construed "negligibly over a top surface" to mean "a small amount of termination material is formed on a top surface of the device body." (Id. at 22.) In reaching this construction, the court noted that "[b]y definition, the top configuration [of the termination] must be smaller than the bottom configuration in order for the top termination portion to extend 'negligibly,' and for the terminations as a whole to appear 'substantially L-shaped.'" (Id.) The parties did not include the term "terminations" in the Joint Disputed Claim Terms Chart, (see generally Joint Disputed Claim Terms Chart ("JDTC"), ECF No. 48-1 (setting forth terms for which parties sought construction and not including "terminations")), and the parties agree that terms "not specifically identified" in the chart should be "given their plain and ordinary meaning."⁴ (Notice of Filing of Joint Disputed Claim Terms Chart ("JDTC Notice"), ECF No. 48, at 1.)

The court also construed three other terms appearing in the '547 Patent's claims, (see Cl. Constr. Order at 11-16, 22-27), although the other construed terms are not at issue in the motions presently before the court.

2. The '791 Patent

The court construed four terms in the '791 Patent's claims, (see generally Cl. Constr. Order at 27-37), although none of the '791 Patent's construed terms are at issue in motions presently before the court.

B. Inter Partes Review

A person who is not the owner of a patent may, under certain circumstances, initiate an inter partes review and petition the United States Patent and Trademark Office ("USPTO") to review the patent and cancel it as unpatentable. 35 U.S.C. § 311. In June of 2015, defendant filed petitions for inter partes review with the USPTO challenging the validity of the '547 Patent, the '791 Patent, and the '879 Patent. (So-Ordered Stipulation to Stay Proceedings, ECF No. 75, at 1-2.) The Patent Trial and Appeal Board ("PTAB") of the USPTO granted the petition with respect to certain claims of the patents, (id. at 2), and on September 14, 2016, pursuant to a so-ordered stipulation, the instant action was stayed pending final written decisions from PTAB. (See generally id.)

On November 30, 2016, PTAB held claim 1 of the '791 Patent and all claims of the '879 Patent unpatentable, and on December 1, 2016, PTAB found all challenged claims of the '547 patent patentable. (Parties' December 2016 Joint Status Letter("December 2016 Letter"), ECF No. 82, at 1.)⁵ The stay in the instant action was subsequently lifted, and the parties proceeded with the instant motions.

C. The Instant Motions

The parties filed their cross-motions for summary judgment on August 2, 2017. As set forth in defendant's memorandum of law in support of their motion for summary judgment, ("Def. Mem.," ECF No. 120-1), defendant seeks summary judgment that: (1) plaintiffs failed to mark products practicing the '547 Patent, and as such the patent marking statute bars plaintiffs from recovering pre-complaint damages for the '547 Patent; (2) the '879 Patent is invalid as anticipated by prior art; (3) plaintiffs cannot establish lost profit damages for the '547 and '791 Patents; (4) plaintiffs cannot establish enhanced damages for the '547 and '791 Patents under 35 U.S.C. § 284; (5) the '547 Patent is invalid for indefiniteness; and (6) plaintiffs cannot establish infringement of the '547 or '791 Patents. (See generally Def. Mem.) Plaintiffs oppose defendant's motions, except that plaintiffs do not opposesummary judgment as to availability for enhanced damages with respect to infringement of the '547 Patent. (See generally Plaintiffs' Memorandum of Law in Opposition to Defendant's Motion for Summary Judgment ("Pl. Opp."), ECF No. 122.)

Plaintiffs' motion for summary judgment seeks summary judgment as to three equitable defenses asserted by defendant in its answer as to the patents-in-suit. As set forth in their memorandum of law, ("Pl. Mem.," ECF No. 116-2), plaintiffs seek judgment that the defenses of laches, equitable estoppel, and waiver are not available to defendant. (See generally Pl. Mem.) Defendant opposes the motion and contends that each of these defenses should be available at least in part, though defendant concedes...