CSB-Sys. Int'l Inc. /Counterclaim v. SAP America, Inc.
| Decision Date | 30 April 2012 |
| Docket Number | CIVIL ACTION NO. 10-2156 |
| Parties | CSB-SYSTEM INTERNATIONAL INC. Plaintiff/Counterclaim Defendant, v. SAP AMERICA, INC., Defendant/Counterclaim Plaintiff. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Currently pending before the Court is Plaintiff SAP America, Inc.'s ("SAP") Motion for Summary Judgment to Limit CSB's Damages. For the following reasons, the Motion is granted in part as set forth in detail below.
The patent involved in this case is U.S. Patent No. 5,631,953 ("the '953 Patent"), which claims a system or apparatus. (Def.'s Mot. Summ. J., Ex. 2 ("953 Patent").) In the simplest of terms, the technology in this case concerns circuit arrangements of hardware and software that allow the integration of speech (telephone systems) with data systems. These systems permit agents in customer service call centers to obtain information from their personal computer aboutthe person calling for assistance at the same time he or she takes the call. The U.S. application which led to the '953 patent was filed on August 25, 1995. The United States Patent & Trademark Office ("USPTO") allowed the claims as set forth in the '953 Patent. Ultimately the '953 patent issued on May 20, 1997.
The accused products are the SAPphone Interface and the Integrated Communication Interface ("ICI") (collectively the "Accused Products"). The SAPphone was first introduced to the market in 1998. Subsequently, SAP developed the ICI, the successor product to SAPphone, and began to market it in 2003.
Plaintiff CSB-System International, Inc. ("CSB") brought the present patent action against Defendant SAP in this Court on May 11, 2010, alleging that the Accused Products infringe on the '953 Patent held by Plaintiff. Due to the existence of several disputed claim terms, the parties proceeded to a one-day Markman hearing,2 at which time each side offered a short tutorial and the testimony of an expert witness. Thereafter, on July 27, 2011, the Court issued a lengthy opinion construing each of the disputed claims, but declining to rule on SAP's claims of indefiniteness until the summary judgment stage.
On April 2, April 17, and April 25, 2012, the Court denied Defendants' Motions for Summary Judgment on Invalidity, Non-infringement, and No Willful Infringement, respectively. The Court now turns its attention to the present Motion for Partial Summary Judgment Limiting CSB's Claim for Damages.
Summary judgment is proper "if the pleadings, the discovery and disclosure materials onfile, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c)(2). A factual dispute is "material" only if it might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). For an issue to be "genuine," a reasonable fact-finder must be able to return a verdict in favor of the non-moving party. Id.
On summary judgment, the moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 145-46 (3d Cir. 2004). It is not the court's role to weigh the disputed evidence and decide which is more probative, or to make credibility determinations. Boyle v. Cnty. of Allegheny, 139 F.3d 386, 393 (3d Cir. 1998) ). Rather, the court must consider the evidence, and all reasonable inferences which may be drawn from it, in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)); Tigg Corp. v. Dow Corning Corp., 822 F.2d 358, 361 (3d Cir. 1987). If a conflict arises between the evidence presented by both sides, the court must accept as true the allegations of the non-moving party, and "all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255.
Although the moving party must establish an absence of a genuine issue of material fact, it need not "support its motion with affidavits or other similar materials negating the opponent's claim." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). It can meet its burden by "pointing out . . . that there is an absence of evidence to support the nonmoving party's claims." Id. at 325. Once the movant has carried its initial burden, the opposing party "must do more thansimply show that there is some metaphysical doubt as to material facts." Matsushita Elec., 475 U.S. at 586. "[T]he non-moving party must rebut the motion with facts in the record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral argument." Berckeley Inv. Group. Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir. 2006). If the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial," summary judgment is appropriate. Celotex, 477 U.S. at 322. Moreover, the mere existence of some evidence in support of the non-movant will not be adequate to support a denial of a motion for summary judgment; there must be enough evidence to enable a jury to reasonably find for the non-movant on that issue. Anderson, 477 U.S. at 249-50.
The present Motion concerns Plaintiff's claim for more than $280 million in damages based on software sales of the Accused Products dating back to 2001. Defendant argues that, assuming Plaintiff prevails on its infringement claims, Plaintiff's damage award is cabined by two well-established legal tenants: (1) lack of standing, and (2) the six-year limitation period of 35 U.S.C. § 286. Applying either one of these principles, Defendant concludes that Plaintiff has failed to put forward evidence of any active infringement by SAP occurring within the relevant time periods. The Court addresses each argument individually.
Defendant's first argument asserts that because Plaintiff was not assigned rights to the '953 Patent until March 29, 2010, Plaintiff lacks standing to sue for acts of infringement occurring prior to that time. "The doctrine of standing limits federal judicial power and has bothconstitutional and prudential components." Media Techs. Licensing, LLC. v. Upper Deck Co., 334 F.3d 1366, 1369 (Fed. Cir. 2003). Constitutional standing requires a plaintiff to demonstrate that it suffered an injury-in-fact that is "'fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief.'" Teva Pharms. USA, Inc. v. Novartis Pharms. Corp., 482 F.3d 1330, 1337 (Fed. Cir. 2007) (quoting Allen v. Wright, 468 U.S. 737,751 (1984)).
In the patent context, "[t]he right of a patentee for a remedy to patent infringement is created by the statute." Rite-Hite Corp. v. Kelly Co., 56 F.3d 1538, 1551 (Fed. Cir. 1995) (citing 35 U.S.C. § 281).3 As a general principle, a "patentee" is entitled to recover full compensation for any damages suffered as a result of the infringement. Gen. Motors Corp. v. Devex Corp., 461 U.S. 648, 654 (1983). The term "patentee" includes "'not only the patentee to whom the patent was issued but also the successors in title to the patentee.'" Ortho Pharm. Corp. v. Genetics Inst., Inc., 52 F.3d 026, 1030 (Fed. Cir. 1995) (quoting 35 U.S.C. § 100(d)). The "injury" present in patent infringement arises from the patentee's statutorily-created right to exclude. Morrow v. Microsoft Corp., 499 F.3d 1332, 1339 (Fed. Cir. 2007). In other words, "[c]onstitutional injury in fact occurs when a party performs at least one prohibited action with respect to the patented invention that violates these exclusionary rights." Id. Infringement thus harms only the owner of the patent at the time of the infringing acts. Minco, Inc. v. Combustion Eng'g, Inc., 95 F.3d 1109, 1117 (Fed. Cir. 1996) (citing United States v. Loughrey, 172 U.S. 206, 211-12 (1898)).
Given this principle, "only a party that possessed legal title to a patent at the time theinfringement occurred can bring suit to recover damages for such infringement." Messagephone, Inc. v. SVI Sys., Inc., Nos. Civ.A.99-1471, 99-1478, 2000 WL 1141046, at *4 (Fed. Cir. Aug. 11, 2000). While a patentee may transfer title to a patent by assignment, making the assignee the effective "patentee" under 35 U.S.C. § 281, Prima Tek II, L.L.C. v. A-Roo Co., 222 F.3d 1372, 1377 (Fed. Cir. 2000), "'it is a great mistake to suppose that the assignment of a patent carries with it the right to damages for an infringement committed before such assignment.'" Messagephone, 2000 WL 1141046, at *4 (quoting Moore v. Marsh, 74 U.S. 515, 522 (1868)). Rather, the presumptive understanding is that "[t]he bare reference to all right, title, and interest does not normally transfer the right to sue for past infringement." Minco, 95 F.3d at 1117 (citing Moore, 74 U.S. at 520). Instead, "the right to sue for prior infringement is not transferred unless the assignment agreement manifests an intent to transfer this right."4 Id.; Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1579 n.7 (Fed. Cir. 1991) (). Although no formula or set prescription of words is required, "[t]he authorities are uniform that the latter assignment must be express, and cannot be inferred from the assignment of the patent itself." Arachnid, 939 F.2d at 1578 n.7.
In the present case, Defendant does not dispute that Plaintiff has standing—as the current holder of the '953 Patent—to bring the present action. It argues, however, that CSB did not become the holder of that Patent until March 29,...
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