Cordance Corp. v. Amazon.Com, Inc.

• Decision Date: 30 June 2009
• Docket Number: Civil Action No. 06-491-MPT.
• Citation: 631 F.Supp.2d 484
• Parties: CORDANCE CORPORATION, Plaintiff, v. AMAZON.COM, INC. and, Amazon Web Services, LLC, Defendants.
• Court: U.S. District Court — District of Delaware

631 F.Supp.2d 484

CORDANCE CORPORATION, Plaintiff, v. AMAZON.COM, INC. and, Amazon Web Services, LLC, Defendants.

Civil Action No. 06-491-MPT.

United States District Court, D. Delaware.

June 30, 2009.

COPYRIGHT MATERIAL OMITTED

Steven J. Balick, Ashby & Geddes, Wilmington, DE, Jeffrey C. O'Neill, Pro Hac Vice, Michael A. Albert, Pro Hac Vice, Robert M. Abrahamsen, Pro Hac Vice, for Plaintiff.

John G. Day, Tiffany Geyer Lydon, Ashby & Geddes, Wilmington, DE.

Richard L. Horwitz, David Ellis Moore, Doungamon Fon Muttamara-Walker, Potter Anderson & Corroon, LLP, Wilmington, DE, Carolyn Chang, Pro Hac Vice, Darren E. Donnelly, Pro Hac Vice, Gaurav Mathur, Pro Hac Vice, J. David Hadden, Pro Hac Vice, Lynn Pasahow, Pro Hac Vice, Ryan J. Marton, Pro Hac Vice, Saina S. Shamilov, Pro Hac Vice, for Defendants.

MEMORANDUM ORDER

MARY PAT THYNGE, United States Magistrate Judge.

INTRODUCTION

This is a patent case. On August 8, 2006 Cordance Corporation ("Cordance") filed suit alleging that Amazon.com Inc. and Amazon Web Services, LLC (collectively, "Amazon") infringe U.S. Patent Nos. 6,757,710 ("the '710 patent"), 6,044,205 ("the '205 patent"), 5,862,325 ("the '325 patent"), and 6,088,717 ("the '717 patent").¹ On October 23, 2006 Amazon filed its answer asserting numerous counterclaims and defenses, including a counterclaim of patent infringement of its U.S. Patent No. 6,269,369 ("the '369 patent"). Subsequently, Cordance and Amazon stipulated to a dismissal of claims and counterclaims relating to infringement of Cordance's '205 patent and Amazon's '369 patent. Therefore, the remaining patents in suit are Cordance's '325, '717, and '710 patents. Currently before the court is Cordance's motion for partial summary judgment with regard to certain defenses raised by Amazon.² Cordance contends it is entitled to summary judgment on the following defenses raised by Amazon: (1) prosecution laches, (2) patent misuse, (3) limitation on damages for failure to mark under 35 U.S.C. § 287, and (4) costs barred in action for infringement of a patent containing an invalid claim under 35 U.S.C. § 288.

SUMMARY JUDGMENT

Summary Judgment is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law."³ Once there has been adequate time for discovery, Rule 56(c) mandates judgment against the party that "fails to make a sufficient showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."⁴ When a party fails to make such a showing, "there can be no `genuine issue as to any material fact' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial."⁵ The moving party is therefore entitled to judgment as a matter of law because "the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof."⁶ A dispute of material fact exists where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party."⁷

The moving party bears the initial burden of identifying portions of the record which demonstrate the absence of a genuine issue of material fact.⁸ However, a party may move for summary judgment with or without supporting affidavits.⁹ Therefore, "the burden on the moving party may be discharged by `showing'—that is, pointing out to the district court—that there is an absence of evidence supporting the nonmoving party's case."¹⁰

If the moving party has demonstrated an absence of material fact, the nonmoving party must then "come forward with specific facts showing that there is a genuine issue for trial."¹¹ If the nonmoving party bears the burden of proof at trial, he "must go beyond the pleadings in order to survive a motion for summary judgment."¹² That party "may not rest upon the mere allegations or denials of his pleadings, but must set forth specific facts showing that there is a genuine issue for trial."¹³ At the summary judgment stage, the court is not to "weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial."¹⁴ Further, "there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party."¹⁵ The threshold inquiry therefore is "determining whether there is a need for trial— whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party."¹⁶

DISCUSSION

Cordance contends that it is entitled to summary judgment on the following defenses Amazon asserts in its Answer: (1) prosecution laches; (2) patent misuse; (3) limitation on damages for failure to mark under 35 U.S.C. § 287; and (4) costs barred in action for infringement of a patent containing an invalid claim under 35 U.S.C. § 288.

A. Prosecution Laches

Cordance and Amazon each move for summary judgment on the issue of prosecution laches.¹⁷ Amazon specifically moves for summary judgment that the '710 patent is unenforceable due to prosecution laches. It contends that Cordance waited more than six years after filing the parent patent application before telling the PTO it had claims to "automatically complet[ing] an on-line purchase." In addition to the six year delay from the filing of the parent application to the filing of the application that led to the '710 patent, Amazon contends the delay is unreasonable because during that delay Cordance: (1) kept its invention hidden from the world; (2) represented to the public that it had a different invention; and (3) even acknowledged that Amazon had pioneered one-click purchasing.

Cordance contends that there is no factual basis to support Amazon's prosecution laches defense. Cordance notes that its five patents are of the same patent family; that several were prosecuted simultaneously; and that all issued within eight and a half years of Cordance's first date of filing. Cordance insists there is no indication that it unreasonably or inexplicably delayed the prosecution of any of its patents, noting that several of its patents issued within two and a half years of filing. Because the defense of prosecution laches is an equitable doctrine which is applied only in rare and extreme cases involving abusive delays of the patenting process, it argues that it is entitled to summary judgment in its favor on Amazon's prosecution laches defense.

Prosecution laches is an equitable doctrine "that may be applied to bar enforcement of patent claims that issued after an unreasonable and unexplained delay in prosecution even though the applicant complied with pertinent statutes and rules."¹⁸ There are no "firm guidelines for determining when such laches exists."¹⁹ "There are legitimate grounds for refiling a patent application which should not normally be grounds for a holding of laches, and the doctrine should be used sparingly lest statutory provisions be unjustifiably vitiated. The doctrine should be applied only in egregious cases of misuse of the statutory patent system."²⁰ The Federal Circuit noted that "an examination of the totality of the circumstances, including the prosecution history of all of a series of related patents and overall delay in issuing claims, may trigger laches."²¹ This court has stated that "a threshold inquiry must be undertaken as to whether a patent `was obtained after an unreasonable and unexplained delay in prosecution.'"²² Next, the court reiterated that "in reviewing the record to determine whether the delay at issue was unreasonable and unexplained, the court must consider the fact that prosecution laches is an equitable tool which has been used sparingly in only the most egregious of cases."²³ The issue before the court, therefore, is whether Cordance's delay in prosecuting the '710 patent, as one of a series of related patents, was unreasonable and unexplained.

Cordance owns five U.S. patents, which are all part of the same patent family:²⁴

Cordance's first application was filed on February 29, 1996 and issued as U.S. Patent No. 6,044,205 on March 28, 2000. A period of four years and one month.

Cordance's second patent application was a continuation in part of the first application, was filed on September 27, 1996, and issued as U.S. Patent No. 5,862,325 on January 19, 1999. A period of two years and four months.

Cordance's third patent application was a continuation of the second application, was filed on August 31, 1998, and issued as U.S. Patent No. 6,088,717 on July 11, 2000. A period of less than two years.

Cordance's fourth patent application was a continuation of the third application, was filed on May 15, 2000, and issued as U.S. Patent No. 6,345,288 on February 5, 2002. A period of less than two years.

Cordance's fifth patent application was a continuation of the fourth application, was filed on February 5, 2002, and issued as U.S. Patent No. 6,757,710 on June 29, 2004. A period of slightly more than two years and four months.

The period between the filing of the first application for Cordance's first patent, February 29, 1996, until the issuance of Cordance's fifth patent, June 29, 2004, is eight years and four months.

The court first notes that in 2006, the average pendency "between application and either abandonment or grant of a U.S. Patent [was] over thirty-one months."²⁵ Four of Cordance's five patents issued in less than the 2006 average pendency, with only the parent application taking longer than that average. Therefore, as an initial matter the time for prosecuting each of the patents in the patent family does not appear to indicate an egregious misuse of the...