Competitive Technologies v. Fujitsu Ltd.

• Decision Date: 25 February 2003
• Docket Number: No. C-02-1673 JCS.,C-02-1673 JCS.
• Citation: 286 F.Supp.2d 1118
• Parties: COMPETITIVE TECHNOLOGIES, et al., Plaintiffs, v. FUJITSU LIMITED, et al., Defendants.
• Court: U.S. District Court — Northern District of California

286 F.Supp.2d 1118

COMPETITIVE TECHNOLOGIES, et al., Plaintiffs, v.FUJITSU LIMITED, et al., Defendants.

No. C-02-1673 JCS.

United States District Court, N.D. California.

February 25, 2003.

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George C. Beck, Foley & Lardner, Washington, DC, Jack Russo, Tim C. Hale, Russo & Hale, LLP, Palo Alto, CA, John C. Cotter, Testa, Hurwitz and Thibeault, LLP, Joseph M. Talarico, Richard J. Phelan, Paul E. Schaafsma, Foley & Lardner, Chicago, IL, Karen L. Febeo, Stephanie M. Zierten, Testa, Hurwitz & Thibeault, LLP, Boston, MA, Nancy J. Geenan, Foley & Lardner, Attorneys at Law, San Francisco, CA, for Competitive Technologies, Inc.

Derek A. Roach, Mark L. Gordon, Gordon & Glickson, LLC, Chicago, IL, George C. Beck, Foley & Lardner, Washington, DC, Joseph M. Talarico, Paul E. Schaafsma, Richard J. Phelan, Foley & Lardner, Chicago, IL, Mark L. Niu, Irell & Manella, Long Beach, CA, Morgan Chu, Roman Melnik, Irell & Manella, LLP, Los Angeles, CA, Nancy J. Geenan, Foley & Lardner, Attorneys at Law, San Francisco, CA, Reynaldo C. Barcelo, Irell & Manella, LLP, Newport Beach, CA, for Board of Trustees of University of Illinois.

G. Brian Bussey, Morrison & Foerster, LLP, Washington, DC, Jun Tsutsumi, Morrison & Foerster, LLP, New York City, Lorna K. Geiler, Meyer Capel, PC, Champaign, IL, for Fujitsu Ltd., Fujitsu America, Inc., and Fujitsu General America Corp.

G. Brian Bussey, Morrison & Foerster, LLP, Washington, DC, Jun Tsutsumi, Morrison & Foerster, LLP, New York City, Lorna K. Geiler, Meyer Capel, PC, Champaign, IL, Karl J. Kramer, Richard D. Mosier, Steven W. Ritcheson, Morrison & Foerster, LLP, Palo Alto, CA, for Fujitsu Microelectronics, Inc., Fujitsu General Ltd., and Fujitsu Hitachi Plasma Display, Ltd.

CORRECTED ORDER GRANTING IN PART AND DENYING IN PART MOTIONS BY COMPETITIVE TECHNOLOGIES AND UI AND DENYING AS MOOT FUJITSU'S CONDITIONAL CROSS-MOTION^*

SPERO, United States Magistrate Judge.

I.INTRODUCTION

On Friday, December 20, 2002, at 9:30 a.m., the following motions came on for hearing:

• Competitive Technologies' Motion To Dismiss Under Federal Rules Of Civil Procedure 12(b)(6) and 12(b)(7)¹;

• The University of Illinois'

(1)Motion To Dismiss Counterclaims 5-13 Pursuant ToRule 12(b)(1) And/Or 12(b)(6);

(2) Special Motion To Strike Counterclaims 10-13 Pursuant ToCCCP § 425.16; And

(3)Motion To Strike The Tenth Affirmative Defense Pursuant ToRule 12(f);

• Fujitsu Limited's and Fujitsu Hitachi Plasma Display Limited's Conditional Cross-Motion To Set A Schedule For A Probability Showing Pursuant To Cal.Code. Civ. Proc. § 425.16(b).²

For the reasons stated below, the UI Motion and the Competitive Motion are GRANTED in part and DENIED in part.The Fujitsu Conditional Cross-Motion is DENIED as moot.

II.BACKGROUND

A.Facts³

This case involves two patents related to an electronic circuit for plasma display panels("PDPs")—U.S. PatentNos. 4,866,349("the '349 Patent") and 5,081,400 ("the '400 Patent").The '349 Patent, entitled "Power Efficient Sustain Drivers and Address Drivers for Plasma Panel," was issued to UI as assignee on September 12, 1989 and lists as inventors Larry J. Weber, Kevin W. Warren and Mark B. Wood.Exh.A to Amended Complaint For Patent Infringement ("Amended Complaint").The '400 Patent, also entitled "Power Efficient Sustain Drivers and Address Drivers for Plasma Panel," was issued to UI as assignee on January 14, 1992 and lists as inventors the same three individuals.Exh. B to Amended Complaint.

In 1985, UI entered into a Servicing Agreement ("the 1985 Servicing Agreement") with University Patents, Inc.("UPI") granting UPI exclusive authority as UI's licensing agent.See Servicing Agreement, Exh. C to Complaint filed in International Trade Commission("ITC Complaint"), attached as Exh. 5 to The University of Illinois' Request For Judicial Notice, filed October 18, 2002 [docketno. 164];see alsoAmended Complaint For Patent Infringement ("Amended Complaint")at ¶ 13.UPI changed its name to Competitive Technologies, Inc. in 1994.Exh.A to ITC Complaint, attached as Exh. 5 to The University of Illinois' Request For Judicial Notice, filed October 18, 2002 [docketno. 164];see alsoAmended Complaintat ¶ 13.

[] Exh.A to Declaration of Steven W. Richeson In Support Of Counterclaimants' Consolidated Opposition To Competitive Technologies, Inc.'s Motions To Dismiss("Richeson Declaration").⁴[⁵]

Beginning in 1995 and continuing until 1999, Competitive [] engaged in licensing negotiations for the '349 and '400 Patents with Fujitsu.Defendants' Amended Answer To Amended Complaint And Counterclaims ("Amended Answer") at ¶¶ 48, 55.Some of these negotiations were conducted by Competitive's "agent and affiliate in Japan,"Innovation Partners International, Inc. Amended Answerat ¶ 98.[]Amended Answerat ¶ 52.[]Amended Answerat ¶ 87.The negotiations between Competitive and Fujitsu were unsuccessful.

In August, 2000, Matsushita and Fujitsu entered into a "comprehensive cross-license ... concerning PDP patents."Amended Answerat ¶ 49.The purpose of this cross-license was to achieve "`patent peace' between the two companies."Id.[] Amended Answer at ¶ 54.

In September, 2002, (well after litigation of this action had commenced), UI and Competitive amended the Servicing Agreement.See Exh.A to Second Declaration of Reynaldo C. Barcelo in Support of the University's Opposition and Conditional Cross-Motion("Second Barcelo Decl.")[DocketNo. 127].⁶Pursuant to the Amended Servicing Agreement, Competitive's rights in the '349 and '400 Patents were terminated and reverted to UI.Id.Further, Competitive assigned to UI "any and all rights it may have to bring and maintain suit for past infringement."Id.

B.Procedural Background

1.The ITC Proceeding and the Illinois Action

On December 21, 2000, UI and Competitive filed an action in federal district court in the Central District of Illinois against the Fujitsu defendants, alleging infringement of the '349 and '400 Patents ("the Illinois action").Two days later, on December 23, 2000, Competitive and the University lodged a complaint with the International Trade Commission("ITC"), alleging that Fujitsu violated section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, by importing goods that infringed the same patents.In the Matter of Certain Plasma Display Panels, Plasma Panel Components, and Products Containing Same, ITC InvestigationNo. 337-TA-445.On February 2, 2001, the district court stayed the Illinois action pending resolution of the claims pending before the ITC.SeeFebruary 2, 2001 Order Granting Motion For A Mandatory Stay Provided By Statute.

The ITC initiated an investigation on January 22, 2001.Some discovery was conducted.Amended Answerat ¶ 63.On June 26, 2001, Competitive and UI withdrew their complaint before the ITC.Id.As a result, on September 25, 2001, the stay in the Illinois action was lifted.

After the stay was lifted in the Illinois action, Fujitsu filed four motions in that action: 1) a motion to dismiss for lack of personal jurisdiction; 2) a motion to dismiss for improper venue; 3) a motion seeking transfer to the Northern District of California; 4) a motion to dismiss UI for lack of standing.The district court granted Fujitsu's motion to transfer on April 2, 2002 and the Illinois action was transferred to this Court.The court did not rule on the remaining three motions.⁷

2.The Delaware Action and the JPML Petition

On September 10, 2001, Fujitsu brought an action against Competitive and another entity, Plasmaco, in federal district court in Delaware ("the Delaware action"), asserting claims related to the '349 and '400 Patents.Competitive brought motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), to consolidate the Delaware action with the Illinois action pursuant to 28 U.S.C. § 1404(a), or to stay the Delaware action pending resolution of the Illinois action.Similarly, Plasmaco brought a motion to dismiss under Fed.R.Civ.P. 12(b)(6).Competitive also petitioned the Judicial Panel on Multidistrict Litigation("JPML") to consolidate the Illinois and the Delaware actions under 28 U.S.C. § 1407(a).

The JPML denied the petition to consolidate on April 16, 2002.On April 19, 2002, the district court in Delaware stayed the Delaware action pending resolution of the action in this Court.On May 22, 2002, Fujitsu filed a notice of dismissal pursuant to Fed.R.Civ.P. 41(a).On the same day, Fujitsu filed its answer in this Court, asserting as counterclaims against Competitive the same claims as had been asserted in the Delaware action.Competitive brought a motion seeking to vacate Fujitsu's voluntary dismissal in the Delaware action on August 23, 2002.That motion was denied on August 30, 2002, and the Delaware case was closed.

C.Fujitsu's Counterclaims

Fujitsu asserted thirteen counterclaims against Competitive and UI in this action.The counterclaims are the same as to both UI and Competitive.⁸Fujitsu has asserted the following counterclaims:

First Counterclaim: Claim for declaratory judgment re invalidity of '349 Patent claims;

Second Counterclaim: Claim for declaratory judgment re non-infringement of '349 Patent claims;

Third Counterclaim: Claim for declaratory judgment re invalidity of '400 Patent claims;

Fourth Counterclaim: Claim for declaratory judgment re non-infringement of '400 Patent claims;

Fifth Counterclaim: Claim for declaratory judgement re unenforceability of '349/'400 Patents;

Sixth Counterclaim: Breach of confidentiality based on disclosure of information concerning "pendency and timing" of licensing negotiations between Competitive and Fujitsu;

Seventh Counterclaim: Misappropriation of trade secrets based on disclosure of information "concerning the existence, status, and/or substance of the confidential business discussions" between Fujitsu and Competitive;

Eighth...