Cybiotronics, Ltd. v. Golden Source Electronics

• Decision Date: 12 February 2001
• Docket Number: No. CV 99-10522ABC (CTX).,CV 99-10522ABC (CTX).
• Citation: 130 F.Supp.2d 1152
• Court: U.S. District Court — Central District of California
• Parties: CYBIOTRONICS, LTD., Plaintiff, v. GOLDEN SOURCE ELECTRONICS, LTD.; and Smoothline, Ltd., Defendants.

Page 1152

130 F.Supp.2d 1152

CYBIOTRONICS, LTD., Plaintiff, v. GOLDEN SOURCE ELECTRONICS, LTD.; and Smoothline, Ltd., Defendants.

No. CV 99-10522ABC (CTX).

United States District Court, C.D. California.

February 12, 2001.

William Robinson, Mayer, Brown & Platt, Los Angeles, CA, for plaintiff.

Kathleen Pasulka, James McClain, Brown, Martin, Haller & McCain, San Diego, CA, R. Wayne Olmsted, Balfour, McDonald, Olmsted, Costa Mesa, CA, for defendants.

ORDER RE: MOTIONS FOR SUMMARY JUDGMENT (FED.R.CIV. PRO.56) BY DEFENDANT SMOOTHLINE, LTD.

COLLINS, District Judge.

This case involves cordless telephone and caller identification technology, the subject of three patents which Plaintiff claims are infringed by various products manufactured and/or sold by Defendants. Defendant Smoothline has filed two Motions for Summary Judgment, one under 35 U.S.C. § 287(a) alleging insufficient notice of Plaintiff's patents, and one under 35 U.S.C. § 271 claiming lack of infringing activity within the United States. The Motions came on for a regular hearing before this Court on February 12, 2001. After review of all of the papers filed by the parties, the case file, and oral argument, the Court hereby GRANTS the Motion pursuant to 35 U.S.C. § 287(a), and also hereby GRANTS the Motion pursuant to 35 U.S.C. § 271.

I. PROCEDURAL HISTORY

On October 12, 1999, Plaintiff CYBIOTRONICS, LTD. ("Plaintiff," or "Cybiotronics") commenced this civil action by filing a Complaint naming Defendants GOLDEN SOURCE ELECTRONICS, LTD. ("Golden Source") and SMOOTHLINE, LTD. ("Smoothline"). The Complaint alleges ownership by the Plaintiff of three patents related to telephone and caller identification ("caller ID") technology, and states that Plaintiff has developed, manufactured and sold products embodying inventions claimed by the patents. It further alleges the manufacture, use, importation, distribution, offer, and sale of products embodying inventions in the patents by the named Defendants. The Complaint accuses each Defendant of direct infringement, inducement of infringement, and contributory infringement that is allegedly continuing. See Complaint ¶¶ 6-17.

The Complaint alleges that Plaintiff has "placed the required statutory notice on all of its telephone and caller identification products manufactured and sold by Cybiotronics" under the patents. Id. ¶ 18. Plaintiff's prayer for relief seeks judgment against all Defendants, preliminary injunctive relief during the pendency of the action, permanent injunctive relief thereafter, compensatory damages, trebling thereof, reasonable attorneys' fees, costs, and interest, and an order forcing Defendants to deliver to Plaintiff all infringing products for destruction at Plaintiff's option. See Complaint at 4.

Both of the named Defendants subsequently filed a separate Answer and Counterclaim.¹ A contentious discovery relationship followed.

After many trips back and forth to Magistrate Judge Turchin by both sides of the case to compel discovery from the other, finally on December 15, 2000 Defendant Golden Source filed a motion for summary adjudication of non-infringement as to U.S.Patent No. 5,265,145 ("the '145 patent") and U.S.Patent No. 5,742,669 ("the '669 patent"). On December 22, 2000, the Court signed a Stipulation and Order submitted by Plaintiff and Golden Source continuing the hearing from January 8, 2001 to January 22, 2001, thereby giving Plaintiff two more weeks to file an opposition (by January 8, 2001). Nonetheless, on December 28, 2000, Plaintiff filed an Ex Parte Application seeking denial of the motion filed by Golden Source to allow Plaintiff more time to conduct discovery (pursuant to Federal Rule of Civil Procedure 56(f)). This Application was denied by the Court on January 4, 2001. Five days later, on January 9, 2001, rather than an opposition to the Golden Source motion, the Court received and signed a Stipulation and Order submitted by Plaintiff and Golden Source dismissing Plaintiff's claims against Golden Source regarding the '145 patent and the '669 patent.

In the meantime, on January 5, 2001, Defendant Smoothline filed the two Motions for Summary Judgment which are now before the Court. The first Motion for Summary Judgment (the "Marking Motion") seeks an adjudication of limitation on the period during which Plaintiff may seek damages for alleged infringement, on the ground that Plaintiff failed to adequately mark the products Plaintiff produced pursuant to the '145 patent, the '669 patent, and U.S.Patent No. 5, 883, 942 ("the '942 patent") (collectively "the patents-in-suit") as required to give constructive notice (35 U.S.C. § 287(a)). The Marking Motion also denies any actual notice to Smoothline prior to the Complaint, and therefore disclaims any entitlement to damages before its filing.

The second Motion for Summary Judgment filed by Smoothline on January 5, 2001 (the "Infringement Motion") argues that Plaintiff has not and cannot produce any evidence that Smoothline has performed any infringing activities within the United States.² The Motion contends therefore, that because United States patents are limited in their legal effect to the United States (with certain limited exceptions), Smoothline cannot be found liable for infringement (35 U.S.C. § 271).

On January 16, 2001, the Court signed a Stipulation and Order filed by Plaintiff and Defendant Smoothline continuing the hearing on the two Motions for Summary Judgment from its initial date of January 29, 2001 to February 12, 2001. Plaintiff was thereby given until January 29, 2001 to file any opposing papers, and Smoothline until February 5, 2001 to file any replies to Plaintiff's oppositions.

On January 29, 2001, Plaintiff filed an Opposition to the Marking Motion ("Marking Opposition") and an Opposition to the Infringement Motion ("Infringement Opposition"), along with supporting documents.³ In the opposing papers, Plaintiff argues, respectively, that there does exist evidence of Plaintiff's placement of marks on products it has manufactured, at least as early as January, 1999, and that there is evidence sufficient to find Smoothline liable for infringement. February 5, 2001, Smoothline filed replies to each ("Marking Reply" and "Infringement Reply," respectively), closing the papers.

II. LEGAL STANDARD ON A MOTION FOR SUMMARY JUDGMENT

The party moving for summary judgment has the initial burden of establishing that there is "no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c); see British Airways Bd. v. Boeing Co., 585 F.2d 946, 951 (9th Cir. 1978); Fremont Indemnity Co. v. California Nat'l Physician's Insurance Co., 954 F.Supp. 1399, 1402 (C.D.Cal.1997).

If the moving party has the burden of proof at trial (e.g., a plaintiff on a claim for relief, or a defendant on an affirmative defense), the moving party must make a "showing sufficient for the court to hold that no reasonable trier of fact could find under than for the moving party." Calderone v. United States, 799 F.2d 254, 259 (6th Cir.1986) (quoting from Schwarzer, Summary Judgment under the Federal Rules: Defining Genuine Issues of Material Fact, 9 F.R.D. 465, 487-88 (1984)). Thus, if the moving party has the burden of proof at trial, that party "must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in [its] favor." Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986) (emphasis in original); see Calderone, 799 F.2d at 259.

If the opponent has the burden of proof at trial, the moving party has no burden to negate the opponent's claim. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party does not have the burden to produce any evidence showing the absence of a genuine issue of material fact. Id., at 325, 106 S.Ct. 2548. "Instead, ... 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 to support the nonmoving party's case." Id. (citations omitted).

Once the moving party satisfies this initial burden, "an adverse party may not rest upon the mere allegations or denials of the adverse party's pleadings ... [T]he adverse party's response ... must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e) (emphasis added). A "genuine issue" of material fact exists only when the nonmoving party makes a sufficient showing to establish the essential elements to that party's case, and on which that party would bear the burden of proof at trial. Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548. "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which a reasonable jury could reasonably find for plaintiff." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in favor of the nonmovant. Id. at 248, 106 S.Ct. 2505. However, the court must view the evidence presented "through the prism of the substantive evidentiary burden." Id. at 252, 106 S.Ct. 2505.

III. FACTUAL BACKGROUND

All three of the original parties to this matter, Cybiotronics (Plaintiff), Golden Source, and Smoothline, are apparently businesses incorporated under the laws of Hong Kong, with their principal places of business in Hong Kong as well. See Complaint ¶¶ 3-5; Statement of Uncontroverted Facts & Conclusions of Law (Infringement) ("IUF") ¶ 1. It appears that all three companies are, inter alia, manufacturers who have produced telephone products for BellSouth, either directly or through intermediaries. See Statement of Uncontroverted Facts and Conclusions of Law (Marking) ("MUF") ¶ 10; Statement of Genuine Issues (Marking) ("MGI") ¶ 10 (not disputing this factual assertion).

...