H-W Tech., LC v. Overstock.Com. Inc.

• Decision Date: 23 September 2013
• Docket Number: Civil Action No. 3:12–CV–0636–G (BH).
• Citation: 973 F.Supp.2d 689
• Parties: H–W TECHNOLOGY, LC, Plaintiff, v. OVERSTOCK.COM. INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

973 F.Supp.2d 689

H–W TECHNOLOGY, LC, Plaintiff,

v.OVERSTOCK.COM. INC., et al., Defendants.

Civil Action No. 3:12–CV–0636–G (BH).

United States District Court,

N.D. Texas,

Dallas Division.

Sept. 23, 2013.

Winston Oliver Huff, Deborah Jagai, W.O. Huff & Associates, PLLC, Dallas, TX, Arthur I. Navarro, Navarro Law Office, PC, Irving, TX, for Plaintiff.

John H. Barr, Jr., Bracewell & Giuliani, Houston, TX, for Defendants.

ORDER ACCEPTING FINDINGS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

A. JOE FISH, Senior District Judge.

After reviewing all relevant matters of record in this case, including the findings, conclusions, and recommendation of the United States Magistrate Judge and the plaintiff's objections thereto, in accordance with 28 U.S.C. § 636(b)(1), the undersigned district judge is of the opinion that the findings and conclusions of the magistrate judge are correct and they are accepted as the findings and conclusions of the court.

While the court agrees with the recommendation of the magistrate judge, it does note that the findings and conclusions of the magistrate judge do not address the plaintiff's filing of a “Declaration” on June 14, 2013, attached to which is a Certificate of Correction showing that the plaintiff amended Claim 9 of its '955 patent on May 28, 2013, to insert a previously omitted clause. See Declaration of Winston Huff (docket entry 54). The “declaration” states that it was filed to supplement the plaintiff's response to the defendant's motion for summary judgment. Id. The plaintiff made this filing nearly four months after filing its response to the defendant's motion for summary judgment, without requesting leave of the court or notifying the court that it had made such a filing. Furthermore, the “declaration” was accompanied by neither a certificate of service nor a certificate of conference, so the court can only assume that the plaintiff also did not notify the defendant that it had made this filing, depriving the defendant of the opportunity to file a responsive pleading. Because the plaintiff filed the “declaration” several months after its response, without leave of the court, consent of the defendant, or notice to either the court or the defendant, the magistrate judge was correct in refusing to acknowledge the “declaration” in her recommended disposition of the motion for summary judgment. See Springs Industries, Inc. v. American Motorists Insurance Company, 137 F.R.D. 238, 240 (N.D.Tex.1991) (Fitzwater, J.) (“where a [party] has injected new evidentiary materials in a [pleading] without affording the [opposing party] an opportunity for further response, the court ... retains the discretion to decline to consider them”); K.G.S. v. Kemp, 4:11–CV–0303–A, 2011 WL 4635002, at *1 n. 1 (N.D.Tex. Oct. 5, 2011) (McBryde, J.) (disregarding an amended response that was filed after a reply “without obtaining either consent of the defendants or leave of court”).

For the reasons stated in the findings, conclusions, and recommendation, it is ORDERED, ADJUDGED and DECREED that defendant Overstock.com, Inc.'s motion for summary judgment, filed January 28, 2013, is hereby GRANTED in part and DENIED in part as moot. Plaintiff's infringement claim is DISMISSED with prejudice as it relates to claims 9 and 17 of the '955 patent.

FINDINGS, CONCLUSIONS, AND RECOMMENDATION

IRMA CARRILO RAMIREZ, United States Magistrate Judge.

By standing order of reference dated March 5, 2012, this case has been referred for pretrial management, including the determination of non-dispositive motions and issuance of findings of fact and recommendations on dispositive motions. Before the Court is Defendant Overstock.com, Inc.'s Motion for Summary Judgment, filed February 21, 2013 (doc. 28). Based on the relevant filings and applicable law, the motion for summary judgment should be GRANTED as to Plaintiff's claims of infringement under Claims 9 and 17 of the ' 955 patent, and DENIED as moot as to Defendant's patent misuse defense.

I. BACKGROUND

H–W Technology, Inc. (Plaintiff) sues Overstock.com, Inc. (Defendant) for patent infringement pursuant to 35 U.S.C. § 1 et seq. ( See doc. 1.) The United States Patent and Trademark Office (PTO) issued United States Patent No. 7,525,955, entitled “Internet Protocol (IP) Phone with Search and Advertising Capability” (the '955 patent) on April 28, 2009. ( Id. at 3.) The '955 patent is allegedly “directed to novel, unique and non-obvious systems and methods of using a multi-convergence device, including phones commonly referred to as ‘smartphones', which are able to converge voice and data within a single terminal, and which allow users of such devices via domain specific applications to receive information and offers from merchants and to complete a transaction with one of said merchants without having to generate a voice call.” ( Id.) The '955 patent contains 24 patent claims, consisting of three independent claims (Claims 1, 9, and 17) and 21 dependent claims. (Doc. 1–1 at 43–44.)

On March 1, 2012, Plaintiff filed this patent infringement action, alleging it owns all the rights to the '955 patent, and that Defendant has infringed the '955 patent. (Doc. 1 at 3.) Defendant filed a counterclaim seeking a declaration that it is not infringing the '955 patent and that the '955 patent is invalid and unenforceable. (Doc. 12 at 1, 5–8.)

Defendant now moves for summary judgment. ( See docs. 28; 29.) The motion has been fully briefed and is ripe for decision.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate when the pleadings and evidence on file show that no genuine issue exists as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). “[T]he substantive law will identify which facts are material.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Id. The movant makes a showing that there is no genuine issue of material fact by informing the court of the basis of its motion and by identifying the portions of the record which reveal there are no genuine material fact issues. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In a case in which “the movant bears the burden of proof on an issue, either because he is the plaintiff or as a defendant he is asserting an affirmative defense, he must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in his favor.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir.1986) (emphasis in original).

Once the movant makes this showing, the non-movant must then direct the court's attention to evidence in the record sufficient to establish that there is a genuine issue of material fact for trial. Celotex, 477 U.S. at 324, 106 S.Ct. 2548. To carry this burden, the non-movant “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The non-movant must show that the evidence is sufficient to support a resolution of the factual issue in its favor. Anderson, 477 U.S. at 249, 106 S.Ct. 2505.

While all of the evidence must be viewed in a light most favorable to the motion's opponent, Anderson, 477 U.S. at 255, 106 S.Ct. 2505 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158–59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970)), neither conclusory allegations nor unsubstantiated assertions satisfy the non-movant's summary judgment burden, Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994) (en banc) (per curiam); Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.1992). “The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his or her claim.” Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir.1998). “The parties may satisfy their respective burdens by ‘citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations ... admissions, interrogatory answers, or other materials.’ ” Rooters v. State Farm Lloyds, 428 Fed.Appx. 441, 445 (5th Cir.2011) (per curiam) (citing Fed. R. Civ. P. 56(c)(1)).

III. INFRINGEMENT CLAIMS

Defendant moves for summary judgment as to Plaintiff's infringement claims on grounds that Claims 9 and 17 of the '955 patent are invalid for indefiniteness. (Doc. 29 at 5.)

A. Indefiniteness

Under Section 112 paragraph 2 of the Patent Act, a claim must “particularly point[ ] out and distinctly claim[ ] the subject matter which the applicant regards as his invention.” 35 U.S.C. § 112, ¶ 2. If it does not, it is indefinite and invalid. Id.; see also Halliburton Energy Servs., Inc. v. M–I LLC, 514 F.3d 1244, 1249 (Fed.Cir.2008); Sipco, LLC v. Datamatic, Ltd., No. 6:09CV532–LED–JDL, 2011 WL 1742669, *3 (E.D.Tex. May 6, 2011). The definiteness requirement of Section 112, paragraph 2 is intended to ensure that the claims “adequately perform their function of notifying the public of the patentee's right to exclude.” Solomon v. Kimberly–Clark Corp., 216 F.3d 1372, 1379 (Fed.Cir.2000); see also 3 Donald S. Chisum, Chisum on Patents, § 8.03, at 8–14 (2000) (“The primary purpose of this requirement of definiteness in claims is to provide clear warning to others as to what constitutes infringement of the patent.”). A claim is presumed valid and is therefore only indefinite if it is “insolubly ambiguous, and no narrowing construction can properly be adopted.” Exxon Research & Eng'g v. U.S., 265 F.3d 1371, 1375 (Fed.Cir.2001); see also Honeywell Int'l, Inc. v. Int'l Trade Comm'n, 341 F.3d 1332, 1338–39 (Fed.Cir.2003). Stated differently, a...