Eastman Kodak Co. v. Agfa-Gevaert N.V.

Citation560 F.Supp.2d 227
Decision Date22 April 2008
Docket NumberNo. 02-CV-6564T.,02-CV-6564T.
PartiesEASTMAN KODAK COMPANY, Plaintiff, v. AGFA-GEVAERT N.V. and Agfa Corp., Defendants.
CourtU.S. District Court — Western District of New York

Kristen Mollnow Walsh, Michael F. Orman, Richard D. Rochford, Nixon Peabody LLP, Rochester, NY, Maia H. Harris, Nixon Peabody LLP, Boston, MA, Robert P. Fletcher, Nixon Peabody LLP, Washington, DC, for Plaintiff.

H. Michael Hartmann, Jeffrey B. Burgan, Leydig, Voit & Mayer, Ltd., Chicago, IL, Stephen G. Schwarz, Faraci & Lange LLP, Rochester, NY, for Defendants.


MICHAEL A. TELESCA, District Judge.

By Order dated September 26, 2006, upon consent of the parties, I appointed Special Master Joseph W. Berenato, III, as a Special Trial Master in this matter for the purpose of conducting a bench trial and issuing a Report and Recommendation to the court as to how the issues of liability in this case should be resolved. From May 3 to May 11, 2007, Special Master Berenato conducted the bench trial of this matter, and on September 7, 2007, he issued a thorough, well-reasoned 122 page Report and Recommendation recommending that the court find: (1) that the defendants' products Cronex 10TL and Orthovision G infringe plaintiffs U.S. Patents Nos. 4,425,425, 4,425,426, and 4,439,520; (2) that the remaining accused products do not infringe plaintiffs patents; (3) that the asserted claims of the plaintiffs patents are valid; (4) that the asserted claims of the plaintiffs patents are enforceable; (5) that the defendants' infringement of plaintiffs patents was not willful, and (6) that plaintiff failed to provide defendant with notice of infringement with respect to Cronex 10TL prior to expiration of the patents in suit, and therefore, plaintiff is not entitled to damages for the infringement of those patents with respect to Cronex 10TL.

On September 27, 2007, and October 2, 2007, respectively, Special Master Berenato issued two additional Reports with respect to evidentiary issues and trial matters. Thereafter, in accordance with the court's September 26, 2006 Order, the parties filed objections to the Special Master's Reports.

Following a review of the record de novo, for the reasons set forth in Special Master Berenato's September 7, 2007 Report and Recommendation, I adopt that Report and Recommendation in its entirety without modification. As an initial matter, I find no legal error in any aspect of the Special Master's Report and Recommendation. The authority relied on by the Special Master is appropriate and controlling, and I find no error in the Special Master's legal analysis or conclusions.

With respect to the Special Master's development and discussion of the factual record in this matter, his analysis of the facts is so comprehensive and so complete, additional discussion of the factual issues would serve no fruitful purpose. In short, Special Master Berenato provided the court and the parties with an extensive and detailed explanation as to how and why he arrived at his recommendations. Because I agree in whole with his Report and Recommendation, I adopt his September 7, 2007 Report and Recommendation in its entirety, and make it a Final Order of this Court. With respect to the parties' objections, I find that the issues raised in their objections were throughly explained by Special Master Berenato in his Report and Recommendation, and accordingly, I deny those objections without further comment. Finally, for the reasons stated in the Special Master's September 27, 2007 and October 2, 2007 Reports, I adopt those Reports in their entirety.



JOSEPH W. BERENATO, III, Special Master.


Pursuant to the Court's Order of September 26, 2006, the undersigned was appointed Special Master to issue a Report and Recommendation on the construction of the claims and, upon agreement of the parties, to issue a Report and Recommendation on the liability issues. The Report and Recommendation for Construction of Group I Patents was filed March 21, 2007. Trial was held May 3-11, 2007. Thereafter, the parties filed post-trial findings of fact and conclusions of law. The parties also submitted a list of exhibits as to which they agreed there were no objections to admissibility. Additionally, Defendants filed a post-trial motion seeking the admission of an exhibit to which Kodak had objected. A Report and Recommendation on that motion and the objected to exhibits is being separately filed.

Having heard the witnesses and considered the parties submissions, the following constitutes my Report and Recommendation regarding the ultimate issues of liability.


As originally filed, this case involved alleged infringement by Defendants Agfa-Gevaert N.V. and Agfa Corporation (collectively "Agfa") of seven patents owned by Plaintiff Eastman Kodak Company ("Kodak"). By stipulation of the parties, the so-called cross-over patents were eliminated from the case and trial proceeded based upon the T-grain patents. The T-grain patents are U.S. Patents Nos. 4,425,425 ("the '425 patent"), 4,439,520 ("the '520 patent"), and 4,425,426 ("the '426 patent"). The '425 and '520 patents expired November 12, 2001 and the '426 patent expired September 30, 2002. Moreover, the '426 patent was the subject of a patent reexamination, Reexamination Control No. 90/001,255, filed June 8, 1987, by E.I. du Pont de Nemours & Company ("DuPont"), predecessor in interest to Defendants. As a result of the reexamination, no claims were canceled or amended although Kodak submitted affidavits and remarks distinguishing certain prior art.

Subsequent to the reexamination proceeding, DuPont spun-off its X-ray film business interests in 1996 as Sterling Diagnostic Imaging, Inc. ("Sterling"). In 1999, Agfa acquired Sterling and assumed Sterling's patent infringement liabilities. Trial Tr. 669 (Verhoeven); TX 99 (Agfa Corp. Depo. Exh. 53 § 2.03). During its existence, Sterling manufactured X-ray film products at a plant in Brevard, North Carolina and sold such products in the United States. TX 823 (Response to Interrogatory No. 1 at 10), 28 (Agfa Corp. Depo. Exh. 48).

Kodak contends that claims 1-3, 5-9, and 19 of the '425 patent are infringed, that claims 1-5, 8-10, 13, 16, 19, 20, and 28 of the '520 patent are infringed, and that claims 1-8 of the '426 patent are infringed. Trial proceeded on the following products: Sterling Ultravision Ci, Sterling Ultravision L, Sterling Ultravision C, Agfa CPBU, Agfa Ortho HT-G, Sterling Cronex 10T, Sterling Cronex 10TL, Sterling Orthovision L, Sterling Orthovision G, DI Image Plus Green, and Agfa Ortho Opthos H.1 Kodak asserts both literal infringement and infringement under the doctrine of equivalents. Defendants have denied infringement and have asserted the defenses of invalidity, non-infringement, laches, and unenforceability, and, with respect to Cronex 10TL, lack of notice under 35 U.S.C. § 287. Kodak furthermore contends that the infringement has been willful, which Defendants deny.

Notice as to Sterling Cronex 10TL

Kodak has accused both Cronex 10T and Cronex 10TL of infringing the '426 patent. Although denying that Cronex 10TL infringes, Defendants argue that they are not liable for any infringement because Kodak failed to mark its products with the patent numbers of the T-grain patents as required by 35 U.S.C. § 287, that they did not receive notice of infringement by Cronex 10TL until after the T-grain patents had expired, and that consequently they cannot be liable for any infringement by that product. Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1549 n. 8 (Fed.Cir.1995) (en banc), cert. denied, 516 U.S. 867, 116 S.Ct. 184, 133 L.Ed.2d 122 (1995).

35 U.S.C. § 287(a) provides generally that where the manufacturer or seller of a patented article fails to mark the article or its packaging with a notice that the item is patented, the patentee shall not be entitled to damages for infringement absent "proof that the infringer was notified of the infringement and continued to infringe thereafter ...." The section further provides that where the patentee has not marked a patented article, damages for infringement are limited to the period following the date on which the infringer received actual notice of infringement. 35 U.S.C. § 287(a).

There is no dispute that Kodak did not mark its X-ray products with a notice that they were patented under one or more of the patents in suit. Kodak has not disputed that for purposes of calculating damages, the damages period commenced when Agfa, or its predecessors in interest received actual notice of alleged infringement of the patents in suit.

Kodak's original Complaint alleged that Cronex 10T and a number of other Agfa film products infringed Kodak's '426, '425, and/or '520 patents. Although various products were identified as infringing, the original Complaint did not identify Cronex 10TL as infringing. TX 1040 (¶ 6). It was not until October 24, 2004, i.e., after expiration of the T-grain patents, that Kodak supplemented its response to Agfa's Interrogatory No. 5 and specifically accused Cronex 10TL of infringement. On July 13, 2005, Kodak filed an Amended Complaint and therein accused Cronex 10TL and other products of infringement. TX 1058.

In a Decision of July 2, 2004, this Court held that Kodak provided actual notice as to the Cronex 10T product in correspondence to DuPont dated September 7, 1995. The Court further held that the 1995 correspondence did not implicate any other accused product, with the possible exception of Cronex 10TL. The Court found that material disputes of fact regarding similarities between Cronex 10T and Cronex 10TL precluded grant of summary judgment on whether notice as to Cronex 10T was sufficient as to Cronex 10TL as...

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