Kaneka Corp. v. SKC Kolon PI, Inc.

• Decision Date: 02 August 2016
• Docket Number: Case No. CV 11-3397 JGB (RZx)
• Citation: 198 F.Supp.3d 1089
• Parties: KANEKA CORPORATION v. SKC KOLON PI, INC. et al.
• Court: U.S. District Court — Central District of California

198 F.Supp.3d 1089

KANEKA CORPORATION

v.SKC KOLON PI, INC. et al.

Case No. CV 11-3397 JGB (RZx)

United States District Court, C.D. California.

Signed August 2, 2016

Anthony J. Dain, Dave Deonarine, Frederick K. Taylor, J Christopher Jaczko, Nikki Ma, Raymond K. Chan, Procopio Cory Hargreaves and Savitch LLP, San Diego, CA, for Kaneka Corporation.

John Williamson, Anthony A. Hartmann, Cecilia Sanabria, Daniel G. Chung, Eric J. Fues, Hala S. Mourad, Mindy L. Ehrenfried, Parmanand K. Sharma, Richard L. Stroup, Smith R. Brittingham, IV, Finnegan Henderson Farabow Garrett and Dunner LLP, Washington, DC, Charles Hyuk Suh, Minjae Kang, Finnegan Henderson Farabow Garrett & Dunner LLP, Reston, VA, David Karl Willingham, Caldwell Leslie and Proctor PC, Los Angeles, CA, for SKC Kolon PI, Inc. et al.

Proceedings: Order: (1) DENYING Defendants' Motion for Judgment as a Matter of Law, or in the Alternative, a New Trial on Induced Infringement, (Doc. No. 692); (2) FINDING the Equitable Defenses of Implied License and Laches Do Not Bar Plaintiff's Claims, (Doc. Nos. 654, 698); and (3) GRANTING IN PART Plaintiff's Motion for Entry of Judgment, an Award of Supplemental Damages, an Accounting of Infringing Sales, and Pre-Judgment and Post-Judgment Interest, (Doc. No. 669) (IN CHAMBERS)

JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE

Before the Court are two post-trial motions: Plaintiff's Motion for Entry of Judgment, an Award of Supplemental Damages, an Accounting of Infringing Sales, and Pre– and Post-Judgment Interest, ("Plaintiff's Motion," Doc. No. 669), and Defendants' Motion for Judgment as a Matter of Law, or in the Alternative, a New Trial on Induced Infringement, ("Defendants' Motion," Doc. No. 692). Also before the Court is the issue of whether Defendants' equitable defenses of implied license and laches bar Plaintiff's claims. (Doc. Nos. 654, 698.) For the following reasons, the Court GRANTS IN PART Plaintiff's Motion, DENIES Defendants' Motion, and FINDS that the equitable defenses asserted by Defendants do not bar Plaintiff's claims.

I. BACKGROUND

A. Procedural Posture

On July 26, 2010, Plaintiff Kaneka Corporation ("Kaneka" or "Plaintiff"), a Japanese corporation, filed this patent-infringement action against Defendants SKC Kolon PI, Inc. ("SKPI"), a Korean corporation, and SKC, Inc. ("SKC"), a U.S. corporation (collectively, "Defendants"). (Complaint, Doc. No. 1.) Kaneka and SKPI both manufacture and sell polyimide films. (Second Amended Complaint ("SAC"), Doc. No. 230, ¶ 17.) These films can be made into flexible copper-clad laminates, which are then made into flexible printed circuit boards. (Id.¶ 28.) The patents asserted in this case include claims covering polyimide films, as well as methods and processes for producing the films.¹ (Id.¶ 16.)

After a transfer of venue, a lengthy stay during an International Trade Commission ("ITC") investigation, several amendments to the Complaint, and a comprehensive Markman hearing, the parties filed cross-motions for summary judgment on June 30, 2014. (Doc. Nos. 448, 452.) On April 10, 2015, the Court issued its ruling on the motions for summary judgment, granting in part and denying in part each of the motions. ("MSJ Order," Doc. No. 513.)

The case proceeded to a jury trial, which commenced on November 3, 2015 and concluded on November 19, 2015. (Minutes of Jury Trial for Nov. 3 & 9, 2015, Doc. Nos. 658, 668.) At the close of Plaintiff's case in chief, Defendants made a motion for judgment as a matter of law. (Doc. No. 644.) The Court denied the motion. (Minutes of Jury Trial for Nov. 16, 2015, Doc. No. 665.) At the close of Defendants' case, Plaintiff made a motion for judgment as a matter of law, (Doc. No. 651), and Defendants renewed their motion, adding additional arguments, (Doc. No. 652). The Court denied both motions. (Minutes of Jury Trial for Nov. 18, 2015, Doc. No. 723; Trial Transcript, Nov. 18, 2015, a.m.) On November 18, 2015, the jury was instructed, and, after hearing closing arguments, retired to deliberate. (Minutes of Jury Trial for Nov. 18, 2015, Doc. No. 667.)

B. The Verdict

On November 19, 2015, the jury returned a unanimous verdict in favor of Plaintiff. (See Minutes of Jury Trial for Nov. 19, 2015, Doc. No. 668; Verdict, Doc. No. 656.)

1. Direct Infringement by SKC

Regarding Kaneka's direct infringement claims against SKC, the jury found that it is more likely than not that each of the films alleged to infringe Claim 1 of the '064 Patent² were made by Kaneka's patented process and that SKC directly infringed Claim 1 of the '064 Patent by importing into the United States, or by offering for sale or selling in the United States, each of those accused films. (Verdict ¶¶ 1, 2, Doc. No. 656.) The jury also found that it is more likely than not that the film alleged to infringe Claims 9 and 10 of the '961 Patent³ was made by Kaneka's patented process and that SKC directly infringed Claims 9 and 10 of the '961 Patent by importing into the United States, or by offering for sale or selling in the United States, the accused SKPI film. (Id.¶ 3.)

2. Induced Infringement by SKPI

As to Kaneka's induced infringement claim against SKPI for the '064 Patent, the jury found that it is more likely than not that SKPI was aware of the '064 Patent before Kaneka filed its Complaint on July 26, 2010, and that the earliest date SKPI was aware of the '064 Patent was August 5, 2004. (Verdict ¶¶ 4, 5.) The jury also found that it is more likely than not that SKC, Samsung, and/or LG directly infringed Claim 1 of the '064 Patent before March 14, 2010 by importing into the United States, or by offering for sale or selling in the United States, the accused SKPI films or mobile phones that incorporated the accused SKPI films made by the patented process. (Id.¶ 6.) For purposes of Kaneka's claim of induced infringement against SKPI, the jury found that each film accused to infringe Claim 1 of the '064 Patent⁴ was made by Kaneka's patented process.

(Id.¶ 7.) The jury further found that it is more likely than not that SKPI actively and intentionally induced SKC's, Samsung's, and/or LG's direct infringement of the '064 Patent with knowledge or willful blindness of the patent. (Id.¶ 8.)

As for the '961 Patent, the jury found that it is more likely than not that SKC, Samsung, and/or LG directly infringed Claims 2, 3, 5, 9, 10, and 12 of the '961 Patent by importing into the United States, or by offering for sale or selling in the United States, the accused SKPI films or mobile phones that incorporated the accused SKPI films that include each limitation of the Claims. (Id.¶¶ 9, 11.) The jury also found that it is more likely than not that each film accused to infringe Claim 2,⁵ Claim 3,⁶ Claim 5,⁷ Claim 9,⁸ and Claim 12⁹ of the '961 Patent infringes the respective claims of the patent. (Verdict ¶¶ 10, 12.) As to Claim 10,¹⁰ the jury found that all but two of the films¹¹ accused of infringing Claim 10 of the '961 Patent infringe the patent. The jury further found that it is more likely than not that SKPI actively and intentionally induced SKC's, Samsung's, and/or LG's direct infringement of the '961 Patent with knowledge or willful blindness of the patent. (Id.¶ 13.)

3. Defense of Patent Invalidity

As an affirmative defense to Plaintiff's claims, Defendants asserted that both the '064 Patent and the '961 Patent are invalid as anticipated and/or obvious to a person of ordinary skill in the art in view of prior art that was introduced at trial. However, as to each patent, the jury found that Defendants did not prove that it is highly probable that any of the asserted claims of the '064 Patent or '961 Patent are invalid. (Verdict ¶¶ 14, 15.) Defendants also sought to prove that it is highly probably that the '961 Patent does not contain a description of the invention of Claims 2, 3, and 5 that is sufficiently full and clear to enable a person of ordinary skill in the art to make and use the full scope of the claimed invention. The jury found against Defendants as to each Claim on this affirmative defense. (Id.¶ 16.)

4. Defense of Patent Exhaustion

Defendants also asserted patent exhaustion as an affirmative defense. Specifically, Defendants introduced evidence at trial that Kaneka granted a Japanese company, Hirano, a license to manufacture and sell polyimide film production equipment—equipment which allegedly practiced the patents-in-suit—and that SKPI and/or its Global Partners (SKC or Kolon) purchased this equipment from Hirano in a sale that was authorized under the license Kaneka granted to Hirano. However, the jury found that Defendants failed to prove it is more likely than not that the sale of polyimide film production equipment was an authorized sale under the license. (Verdict ¶ 17.)

5. SKC's Lanham Act Counterclaim

SKC sought to prove that Kaneka acted in bad faith when it sent letters to SKC's existing or potential customers which contained allegedly false or misleading statements regarding this lawsuit and SKC's alleged infringement of Kaneka's patents. However, the jury found that SKC did not prove that it is highly probable that Kaneka acted in bad faith when it sent the letters. (Verdict ¶ 24.)

6. Damages

The jury awarded Kaneka $13,488,765.06 in lost profits for sales that it found Kaneka would have made with reasonable probability but for SKPI's infringement of the patents-in-suit. (Verdict ¶¶ 19, 22.) Specifically, the jury awarded Kaneka $5,920,389.50 for lost profits due to SKPI's infringement of the '064 Patent, (id.¶ 19), and $7,568,375.56 for lost profits due to SKPI's infringement of the '961 Patent, (id.¶ 22). The jury did not award any royalty to Kaneka for infringing sales by SKPI of either the '064 Patent or the '961 Patent. (Id.¶¶ 20, 23.) The jury also did not award any royalty to Kaneka for infringing sales by SKC of either the '064 Patent or the '961 Patent. (Verdict ¶¶ 18, 21.)

C. Post-Trial Motions and Bench Resolution of Equitable Defenses

Following the jury's verdict, on December...