Apex Inc. v. Raritan Computer, Inc.
| Decision Date | 25 February 2002 |
| Docket Number | No. 01 CIV 4435(MP).,01 CIV 4435(MP). |
| Citation | 187 F.Supp.2d 141 |
| Parties | APEX INC., Plaintiff, v. RARITAN COMPUTER, INC., Defendant. |
| Court | U.S. District Court — Southern District of New York |
Nixon & Vanderhye P.C. (James D. Berquist, J. Scott Davidson, Donald L. Jackson, of counsel), Arlington, VA, Friedman, Wittenstein & Hochman, P.C. (Stuart I Friedman and Paul S. Grossman, of counsel), New York, for Plaintiff.
Ward & Olivio (John W. Olivio, Jr. John F. Ward, David M. Hill, of counsel), New York, for Defendant.
FINDINGS AND CONCLUSIONS
Plaintiff Apex is a Washington corporation, having its principal place of business in Redmond, and is the successor company of Apex PC Solutions., a wholly owned subsidiary of Avocent Corporation of Huntsville, AL.
Defendant Raritan is a New Jersey corporation, having its principal place of business in Somerset, NJ.
Plaintiff and Defendant both market and sell computer switching systems for connecting computer workstations to remote computers.
On May 23, 2001 Plaintiff Apex, Inc. ("Apex") filed this action accusing Defendant Raritan Computer, Inc. ("Raritan") of making, using, offering to sell, selling, or importing products that infringe one or more claims of U.S. Patents Nos. 5,884,096 ("the '096 patent"), 6,112, 264 ("the '264 patent"), and 5,397,176 ("the '176 patent") (collectively, "the patents-in-suit") under 35 U.S.C. §§ 271 and 281-285 (Compl., ¶¶ 8-28) and seeks damages pursuant to 25 U.S.C. § 283, as well as declaratory and injunctive relief (Compl. at 6). Plaintiff also asserts that Raritan's infringement of these patents has been willful, and therefore asks the Court to award treble damages under 35 U.S.C. § 284. Finally, Plaintiff seek fees pursuant to 35 U.S.C. § 284, costs pursuant to 35 U.S.C. § 284, and prejudgement and post-judgement interest.
Defendant Raritan denies all charges of infringement and asserts that all the patents-in-suit are invalid pursuant to 35 U.S.C. §§ 101-103 and 112. Defendant further asserts that Plaintiffs are estopped from including the accused products within the scope of the issued patent claims. Defendant also accuses Apex of having brought this action knowing that its patent claims are invalid and are not infringed and therefore requests a finding of an "exceptional case" and an award of attorney's fees. Finally Defendant asserts that Plaintiff's claims for relief are barred by the doctrines of latches, waiver, unclean hands, and estoppel.
On November 13, 2001, this Court denied Plaintiff's motion for an Order pursuant to 35 U.S.C. § 283 preliminarily enjoining Defendant from making, selling, using, or importing one of Defendant's products which is known as the "Paragon Switch System," and which is the subject of this action. The decision was partially based on (1) Defendant's agreement not to make any offer or sales of its Paragon product to Compaq Computer Corporation, a significant Customer of Plaintiff, through completion of a trial on the merits in this case, (2) the delay of plaintiff in seeking an injunction, and (3) the scheduling of an early trial on January 14, 2001.
A seven-day trial took place as scheduled.
The '096, '176, and '264 patents, which are asserted in this action, all derive from a common parent application that was filed with the U.S. PTO on August 25, 1995 and resulted in the issuance of United States Patent No. 5,721,842 (the "'842 patent"), which is not asserted here. The patents-in-suit all pertain to computer switching systems that make use of an on-screen display for controlling the switching system and to obviate the need for manual switching. All of the patents-in-suit are now wholly owned by Apex.
The '096 patent issued on March 16, 1999, based on Application Serial No. 08/969,723 ("the '723 application") filed November 12, 1997, which is a continuation of Application Serial No. 08 519,193 ("the '193 application"), filed August 25, 1995 (now the '842 patent.)
The '723 application was filed with eight (8) claims. A Preliminary Amendment cancelling original claims 1-8 and adding new claims 9-10 was filed on November 12, 1997.
On February 10 and May 27, 1998, Apex filed Information Disclosure Statements ("IDS") bringing certain prior art references to the attention of the United States Patent and Trademark Office ("USPTO"). Also on May 27, 1998, Apex filed a second Preliminary Amendment in which claims 9-10 were cancelled and new claims 11-37 were added, with claims 11, 20, 26 and 32 being the only independent claims. No substantive remarks were provided by Apex.
In the first Office Action dated September 28, 1998, claims 11-37 were rejected under the judicially created doctrine of obviousness-type double-patenting in view of Apex's '842 patent. On October 22, 1998, Apex filed a Terminal Disclaimer to obviate this rejection, and filed another IDS. Apex also submitted an Amendment cancelling claim 36, amending claims 12-14, 21-23, 27-29, 33-35 and 37, and adding new claims 38-43, without remarks.
On November 12, 1998, the Examiner issued a Notice of Allowability, which did not contain any Examiner's Statement of Reasons for Allowance. The same day, Apex mailed still another Supplemental IDS citing over 100 prior art references, including for the first time Perholtz et al. United States Patent No. 5,732,212 ("the Perholtz patent").
On December 4, 1998, the Examiner indicated that he had reviewed the newly cited references and issued a Supplemental Notice of Allowability, again without any Statement of Reasons for Allowance.
On February 3, 1999, a Protest against the issuance of the '096 patent was filed by Cybex Computer Products Corporation. Specifically, Cybex asked that the Examiner be given an opportunity to carefully consider the Perholtz patent. Apex opposed the Protest, and on June 30, 1999, the USPTO dismissed the Protest as untimely.
On March 16, 1999, the '096 patent issued with thirty-two (32) claims.
The '176 patent issued on August 10, 1999, based on Application Serial No. 08 970,168 ("the '168 application") filed November 12, 1997, which is a continuation of the '842 patent. The '168 application was filed with eight (8) claims.
On February 12, 1998, Apex filed an IDS citing additional prior art references to the USPTO.
On September 22, 1998, the Examiner issued a Notice of Allowability allowing all of the originally filed claims. The Notice of Allowability contained the Examiner's Statement of Reasons for Allowance, which stated:
"the prior art of record does not teach nor fair suggest the system arrangement as claimed with circuitry for creating serial data packet from keyboard and mouse electronic signals, and crosspoint switch for connecting keyboard/mouse/video monitor from a number of workstations to plurality of remote computer systems."
On December 3, 1998, in an interview with Apex's representative, the Examiner rejected all of the pending claims on the basis of double-patenting in view of the '842 patent. To overcome this rejection, Apex filed a Terminal Disclaimer on December 7, 1998.
On December 16, 1998 (after allowance of the pending claims), Apex filed an Amendment cancelling Claims 2 and 3 and amending Claim 1 to "conform the claims to those pending in corresponding foreign applications."
On August 10, 1999, the '176 patent issued with six (6) claims.
The '264 patent issued on August 29, 2000 based on Application Serial No. 09 244,947 ("the '947 application") filed February 4, 1999, which is a continuation of Application Serial No. 08/969,723 filed November 12, 1997 (now the '096 patent), which is a continuation of the '842 patent. The '947 application was filed with eight (8) claims. Claim 1 was the only independent claim, and Claim 8, which depended from Claim 1, contained the limitation for an OSD circuit (i.e., an "on-screen programming circuit") in the first signal conditioning unit.
During an Examiner interview on June 1, 1999, Apex's representative discussed with the Examiner the patentability of the pending claims (i.e., Claims 1-8). In an Interview Summary Report dated June 3, 1999, the Examiner noted that the Perholtz patent was discussed and recorded that the "distinguished feature of the present invention over Perholtz—analog overlay done within the central switch."
Two weeks later, on June 16, 1999, Apex filed a Preliminary Amendment. In its Remarks, Apex stated that In other words, the Examiner and Apex's representative did not agree on the patentability of Claims 1-8, so Apex cancelled Claims 1-8. New Claims 9-25 provided for the location of the analog overlay "disposed between the computer-side interface and the user-side interface."
On August 25, 1999, an Office Action was provided, rejecting claims 9-25 under the judicially created doctrine of obviousness-type double-patenting in view of both the '842 and '096 patents. In response, on December 20, 1999, Apex filed a Request for Reconsideration in which it argued that its "claims are patentably distinct from the original claims" as being directed at analog circuits as opposed to generic circuits of the prior patents. On April 10, 2000, the Examiner issued a Notice of Allowability without any Statement of Reasons for Allowance.
On August 29, 2000, the '264 patent issued with seventeen (17) claims.
Apex accuses five Raritan products of infringement. These are: Raritan's MasterConsole MX4 ("MX4")...
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