Loral Fairchild Corp. v. Victor Co. of Japan, Ltd.

• Decision Date: 07 June 2002
• Docket Number: Nos. Civ.A.92-0128-RRR, Civ.A.91-5056-RRR.,s. Civ.A.92-0128-RRR, Civ.A.91-5056-RRR.
• Citation: 208 F.Supp.2d 344
• Parties: LORAL FAIRCHILD CORPORATION, Plaintiff, v. VICTOR COMPANY OF JAPAN, LTD., et al., Defendants, Loral Fairchild Corporation, Plaintiff, v. Matsushita Electric Industrial Company, Ltd., et al., Defendants.
• Court: U.S. District Court — Eastern District of New York

208 F.Supp.2d 344

LORAL FAIRCHILD CORPORATION, Plaintiff, v. VICTOR COMPANY OF JAPAN, LTD., et al., Defendants, Loral Fairchild Corporation, Plaintiff, v. Matsushita Electric Industrial Company, Ltd., et al., Defendants.

Nos. Civ.A.92-0128-RRR, Civ.A.91-5056-RRR.

United States District Court, E.D. New York.

June 7, 2002.

COPYRIGHT MATERIAL OMITTED

Gregory Lyons, Wiley, James H. Wallace, Jr., Rein & Fielding, Washington, DC, Peter K. Stackhouse, Walsh, Colucci, Stackhouse, Emrich & Lubeley, P.C., Arlington, VA, Anthony W. Karambelas, Newport Beach, CA, for Loral Fairchild Corp.

Michael J. Berger, Amster, Rothstein & Ebenstein, New York City, for Victor Co. of Japan, US JVC Corp.

Cynthia B. Okrent, Cullen & Dykman, Brooklyn, NY, Barry W. Graham, Steven McCann, John Lowe, Douglas B. Henderson, Jeffrey A. Berkowitz, Vincent P. Kovalick, Robert E. Converse, Jr., Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., Washington, DC, for Nikon Corp., Nikon, Inc Richard J. Spensley Horn Jubas & Lubitz, Ted R. Rittmaster, Spensley Horn Jubas & Lubitz, Los Angeles, CA, for Murata Machinery, Ltd., Murata Business Systems, Inc.

ORDER

RANDELL R. RADER, Circuit Judge, sitting by designation.

This case returned to this court on remand from the Court of Appeals for the Federal Circuit. Loral Fairchild Corp. v. Matsushita Elec. Indus. Co., 266 F.3d 1358, 60 USPQ2d 1361 (Fed.Cir.2001), reh'g denied, 266 F.3d 1358 (Fed.Cir.2001) (Toshiba II). Over the course of two weeks in December 2001, Loral Fairchild Corporation (Loral), Toshiba, and NEC tried the issues of infringement and validity of U.S. Patent No. 3,931,674 (the '674 patent) to a jury. On December 20, 2001, the jury returned a verdict finding the '674 patent invalid and not infringed by Toshiba's Type 4 process. After the verdict, Loral moved for judgment as a matter of law or, alternatively, for a new trial. Because substantial evidence supports the jury's verdict, this court denies Loral's motion for judgment as a matter of law. Further, because the jury verdict is not against the weight of the evidence, this court also denies Loral's motion for a new trial.

BACKGROUND

This patent infringement suit has a lengthy procedural history. In 1991, Loral sued numerous Japanese electronics manufacturers, and their U.S. distributors, for infringement of U.S. Patent Nos. 3,931,674 (the '674 patent) and 3,896,485 (the '485 patent). In August 1995, the court severed and stayed all of the non-manufacturing consumer defendants, leaving six core groups of manufacturing defendants—Sony, Sanyo, Toshiba, Hitachi, NEC, and OKI. On October 11, 1995, the parties agreed to a plan for separate trials for each of the six groups of manufacturing defendants. At this time, only Toshiba and NEC remain as defendants, and only the '674 patent is at issue.

The '674 patent was filed on Feb. 8, 1974, issued on Jan 13, 1976, and is owned by Loral. The patent claims a process for manufacturing a charge-coupled device (CCD). A CCD is an important component in electronic cameras that converts light into electrical charges. Thus, when focused on an image, the CCD converts that image into an electrical signal. The signal can then be stored and later displayed on a video monitor. Claim 1, the only claim at issue, recites:¹

1. A process for fabricating a charge coupled device structure in a semiconductor substrate, comprising the steps of:

[1] selectively applying at least one layer of insulation material to said semiconductor substrate;

[2] selectively forming a plurality of spaced-apart first gate electrodes on the uppermost surface of said at least one layer of insulation material;

[3] forming a first insulation layer over said plurality of first gate electrodes;

[4] forming implanted barrier regions in said semiconductor substrate in the intervals between said plurality of spaced-apart first gate electrodes, the edges of said implanted barrier regions being aligned with the vertical edges of the insulation layer on the respective first gate electrodes [5] selectively forming a plurality of second gate electrodes on said uppermost surface of said at least one insulating layer between said plurality of spaced-apart first gate electrodes, each of said second gate electrodes substantially occupying the space between adjacent first gate electrode [sic]; and

[6] connecting each of said second gate electrodes to an individual adjacent first gate electrode to form a composite electrode for a charge coupled element.

Figure 9 from the '674 patent illustrates a CCD constructed with the claimed process:

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Sony was the first of the defendants to go to trial. Before the Sony trial in 1996, this court held a two-day Markman hearing to acquire information before setting the meaning of the patent claims. After the hearing, this court issued an order on the meaning of the claims. Loral Fairchild Corp. v. Victor Co. of Japan, 906 F.Supp. 798 (E.D.N.Y.1995) (Loral I).

Over the course of five weeks in 1996, Loral and Sony tried the issues of ownership, validity, and infringement. On February 14, 1996, the jury returned a verdict that Loral owned the patent, that Sony did not show invalidity by clear and convincing evidence, and that Loral had shown infringement under the doctrine of equivalents.

Sony then moved for judgment as a matter of law (JMOL) or, alternatively, for a new trial. Sony's motion asked this court to reconsider the evidence on validity. This court determined that no reasonable jury could have found that the Erb reference did not qualify as prior art against the '674 patent. Loral Fairchild Corp. v. Victor Co. of Japan, 931 F.Supp. 1014, 1031 (E.D.N.Y.1996) (Loral II). Because Dr. Erb's printed publication² was prior art, this court reconsidered the validity verdict. Thus, this court granted Sony's motion for JMOL on three grounds: (1) the Erb article is § 102(a) prior art that rendered the '674 patent invalid for obviousness; (2) the work of Drs. Erb and Su, which culminated in the article, is § 102(g) prior art, which also rendered the '674 patent invalid; and (3) prosecution history estoppel precludes infringement under the doctrine of equivalents by any process that merely reversed steps three and four of claim 1 of the '674 patent. Id.

On appeal, the Court of Appeals for the Federal Circuit affirmed the grant of JMOL on only one ground. Although this court still had multiple defendants awaiting trial on the same patent, the Federal Circuit did not address the validity of the '674 patent. Thus, the Federal Circuit upheld only this court's determination on JMOL that prosecution history estoppel barred Loral's allegations of infringement under the doctrine of equivalents. Because it did not reach validity, the Federal Circuit's decision did not address whether the Erb reference is prior art for the '674 patent. See Loral Fairchild Corp. v. Sony Corp., 181 F.3d 1313, 1316 n. 3, 50 USPQ2d 1865, 1876 n. 3 (Fed.Cir.1999) (Loral III).

Without a word from the Federal Circuit on validity, Loral renewed its action for literal infringement of the '674 patent against Toshiba and NEC. On April 10, 2000, Toshiba and NEC each moved for summary judgment of invalidity of the '674 patent based on the evidence Loral had produced in the Sony trial. Although the parties had agreed to abide by the results of the Sony trial, the Federal Circuit had not addressed the validity of the '674 patent. This court held a two-day hearing on the motions. The court granted the motions, reaffirming its conclusion from the Sony trial that both the Erb article and the Erb/Su work qualify as "prior art to the '674 patent under 35 U.S.C. § 102(a) and (g)," and that claim 1 was therefore obvious. Loral Fairchild Corp. v. Victor Co. of Japan, Nos. 92-0128 & 91-5056 (E.D.N.Y. June 21, 2000) (Toshiba I). In reaching the conclusion of obviousness, this court relied on Loral's earlier concession of the interchangeability of steps three and four of the '674 process. See Loral III, 181 F.3d at 1327.

Loral appealed to the Federal Circuit. Based in part on Loral's proffer of evidence not available at the Sony trial, the Federal Circuit detected a genuine issue of material fact about whether Dr. Erb's work antedated the '674 invention dates. The Federal Circuit also questioned whether Dr. Erb had reduced his work to practice before publication of the Erb article. Therefore, the Federal Circuit reversed the summary judgment and remanded. Toshiba II, 266 F.3d at 1365.

In compliance with the remand, this court scheduled summary judgment motions and set a trial date. On December 4, 2001, this court ruled on the parties' motions for summary judgment on infringement, invalidity, inequitable conduct, and collateral estoppel. In that summary judgment order, this court also clarified the claim construction for the '674 patent used during the Sony trial. Specifically, at the request of the parties, the order elaborated that the requirement (step 6) that each second gate electrode connect to one, but not both, adjacent first gate electrodes is an open limitation made with reference to the gate electrodes as shown in Figs. 9, 11, and 13 of the '674 patent. Step 6 does not preclude connecting the second gate electrode to additional electrodes, so long as it satisfies the claim requirement of connection to one, but not both, adjacent first gate electrodes. This court also clarified that limitation 6 is a step in the process of fabricating CCD wafers. Summary Judgment Order, slip op. at 7.

This court then conducted a jury trial beginning December 10, 2001. The jury received the case for deliberation on December 18, 2001. While the jury deliberated on December 19, 2001, this court adopted a procedure necessitated by the scarcity of courtroom time in Brooklyn during reconstruction of the courthouse. Specifically, this court at that time entertained the parties' motions for...