Lambda Optical Solutions, LLC v. Alcatel-Lucent U.S. Inc.
| Decision Date | 29 July 2015 |
| Docket Number | Civil Action No. 10-487-RGA-CJB |
| Parties | LAMBDA OPTICAL SOLUTIONS, LLC, Plaintiff, v. ALCATEL-LUCENT USA INC. and ALCATEL-LUCENT HOLDINGS INC., Defendants. ALCATEL-LUCENT USA INC. and ALCATEL-LUCENT HOLDINGS INC., Counter-Claimants, v. LAMBDA OPTICAL SOLUTIONS, LLC, LAMBDA OPTICAL SYSTEMS CORP., and ANASTASIOS TZATHAS, Counter-Defendants. |
| Court | U.S. District Court — District of Delaware |
In this patent case filed by Plaintiff Lambda Optical Solutions, LLC ("Lambda" or "Plaintiff") against Defendants Alcatel-Lucent USA Inc. and Alcatel-Lucent Holdings Inc. (collectively, "Alcatel" or "Defendants"), Plaintiff alleges infringement of U.S. Patent No. 6,973,229 ("the '229 patent"). Alcatel timely answered Plaintiff's Complaint, and asserted counterclaims against Lambda, Lambda Optical Systems Corporation ("LOS"), and Anastasios Tzathas (collectively, "Counter-Defendants"), one of the named inventors of the Motion for Summary Judgment Regarding Damages ("Motion"). (D.I. 368) For the reasons set out below, the Court recommends that Defendants' Motion be GRANTED.
Lambda is a Delaware limited liability company with its principal place of business in Newport Beach, California. (D.I. 1 at ¶ 1) Defendants are Delaware corporations, with their principal places of business in New Jersey and Texas, respectively. (D.I. 74 at 9 at ¶¶ 1, 2) Counter-Defendant LOS is a Delaware corporation with its principal place of business in Reston, Virginia. (Id. at ¶ 5) Counter-Defendant Mr. Tzathas is an individual residing in New Market, Maryland. (Id. at 10 at ¶ 6)
The '229 patent is entitled "Node Architecture for Modularized and Reconfigurable Optical Networks, and Methods and Apparatus Therefor," and was issued on December 6, 2005. 1 The '229 patent lists three inventors: Mr. Tzathas, Moon W. Kim, and Abdella Battou. (Id.) Counter-Defendant LOS is the sole assignee of the '229 patent, and Plaintiff is its exclusive licensee. (D.I. 1 at ¶¶ 32-33) The '229 patent is based on U.S. Application No. 09/795,950, which was filed on February 28, 2001. The '229 patent contains thirty claims, four of which are independent (i.e., claims 1, 25, 26 and 27), and forty-nine figures. The '229 patent relates to the field of optical networking, which involves transmitting voice, Internet traffic, and other digital data over fiber-optic cables.
Plaintiff's Complaint, which was filed on June 4, 2010, originally alleged infringementagainst 20 Defendants (D.I. 1); other than Alcatel, all of the other originally named Defendants have been dismissed by stipulation. On January 24, 2011, Alcatel timely answered Plaintiff's Complaint, and asserted counterclaims against Counter-Defendants. (D.I. 74) On March 28, 2012, this case was referred to the Court by Judge Richard G. Andrews to hear and resolve all pretrial matters, up to and including the resolution of case-dispositive motions. After a hearing, (D.I. 215), the Court issued a Report and Recommendation on claim construction on August 3, 2012, (D.I. 234). Judge Andrews overruled objections to that Report and Recommendation on April 11, 2013. (D.I. 325) Briefing on the pending Motion was completed on January 8, 2014, and the Court held oral argument on the Motion (and other pending motions) on March 5, 2014. (D.I. 436, hereinafter "Tr.")
A grant of summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585 n.10 (1986). If the moving party meets this burden, the nonmovant must then "come forward with specific facts showing that there is a genuine issue for trial." Id. at 587 (emphasis in original) (internal quotation marks omitted). If the nonmoving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). During this process, the Court will "draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh theevidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).
However, in order to defeat a motion for summary judgment, the nonmoving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586-87; see also Podobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir. 2005) () (internal quotation marks and citation omitted). The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). Facts that could alter the outcome are "material," and a factual dispute is genuine only where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50 (internal citations omitted). A party asserting that a fact cannot be—or, alternatively, is—genuinely disputed must support the assertion either by citing to "particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials"; or by "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1)(A) & (B).
In this Motion, Alcatel raises two issues relating to damages on which it argues thatsummary judgment is appropriate. First, Alcatel argues that Lambda cannot recover pre-suit damages from the date when LOS stopped selling unmarked patented products (February 28, 2007) until the date it gave Alcatel notice of the patent by filing suit in this case (June 4, 2010). (D.I. 412 at 2) Second, Alcatel asserts that Lambda is not entitled to recover damages for sales of Alcatel's 1675 LambdaUnite product. (D.I. 369 at 2) The Court will address these issues in turn.
As to this first issue, the facts are relatively simple and undisputed. In 2001, LOS began selling certain products that practice at least one claim of the '229 patent. (D.I. 370, ex. 8 at A079-80; id., ex. 9 at A087) At no point were those products marked to give notice to the public that they were patented, pursuant to the requirements of 35 U.S.C. § 287 ("Section 287"), since the '229 patent had not yet issued. (Id., ex. 8 at A079) On December 6, 2005, the '229 patent was issued, ('229 patent), but LOS continued to sell its above-referenced products without marking them. LOS delivered its final product that practiced a claim of the '229 patent on February 28, 2007.2 (Id.) The parties agree that Alcatel first received actual notice of the alleged infringement only when Lambda filed the present action on June 4, 2010. (D.I. 369 at 4-5; D.I.370, ex. 9 at A090; id., ex. 11 at A099-100)
This damages dispute relates only to the time period between when LOS stopped selling unmarked patented products (February 28, 2007) and the date Lambda gave Alcatel actual notice by filing suit (June 4, 2010). In other words, Lambda admits that it cannot obtain damages for the time period between when the '229 patent issued and when LOS stopped selling unmarked patented products. (D.I. 394 at 3) And Alcatel does not dispute that Lambda can seek damages for the time period after Lambda filed suit.
The statute at the forefront of the parties' dispute is 35 U.S.C. § 287(a), which provides that:
Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word "patent" or the abbreviation "pat.", together with the number of the patent, or by fixing thereon the word "patent" or the abbreviation "pat." together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.
Thus, when required by the statute, notice that sales of a product may constitute patent infringement may be given to the infringer in one of two ways: (1) constructive notice by marking the patentee's own product covered by the patent or (2) actual notice. Minks v. Polaris Indus., ...
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