Luminara Worldwide, LLC v. Liown Elecs. Co.
| Decision Date | 29 March 2017 |
| Docket Number | Case No. 14-cv-03103 (SRN/FLN) |
| Parties | Luminara Worldwide, LLC, Plaintiff, v. Liown Electronics Co. Ltd. et al., Defendants. Shenzhen Liown Electronics Co. Ltd. et al., Counterclaim Plaintiffs, v. Luminara Worldwide, LLC, et al., Counterclaim Defendants. |
| Court | U.S. District Court — District of Minnesota |
[FILED UNDER SEAL]
Courtland C. Merrill, Daniel R. Hall, Joseph W. Anthony, Cory D. Olson, Steven C. Kerbaugh, Steven M. Pincus, Ariel O. Howe, Anthony Ostlund Baer & Louwagie P.A., 90 South Seventh Street, Suite 3600, Minneapolis, Minnesota 55402, Jon E. Wright, Sterne Kessler Goldstein & Fox, 1100 New York Avenue Northwest, Suite 600, Washington, District of Columbia 20005, and Ryan S. Dean, Fish & Tsang LLP, 2603 Main Street, Suite 1000, Irvine, California 92614, for Plaintiff and Counterclaim Defendants.
Alan G. Carlson, Jonathan D. Carpenter, Peter Kohlhepp, Tara C. Norgard, Carlson Caspers Vandenburgh Lindquist & Schuman P.A., 225 South Sixth Street, Suite 4200, Minneapolis, Minnesota 55402, Joseph P. Reid, Patrick J. McKeever, Thomas N. Millikan, Yun L. Lu, Perkins Coie LLP, 11988 El Camino Real, Suite 350, San Diego, California 92130, and Kenneth J. Halpern, Perkins Coie LLP, 3150 Porter Drive, Palo Alto, California 94304, for Defendants and Counterclaim Plaintiffs.
This matter comes before the Court on Defendants' Motion for Summary Judgment [Doc. No. 485]. The motion seeks resolution as a matter of law of six discrete issues that are not—by themselves—case-dispositive. For various reasons, discussed at greater length below, the parties now agree that only four of those issues are ripe for decision at this time. (See Joint Status Report [Doc. No. 718] at 1.) As labeled by the Defendants, these four issues are: (1) whether claims 1 and 13 of U.S. Patent No. 8,696,166 (the "'166 patent") are anticipated by U.S. Patent No. 7,261,455 (the "'455 patent"); (2) whether Plaintiff Luminara Worldwide, LLC ("Luminara") should be held to the construction of the claim term "affixed" it successfully put forward before the U.S. Patent Trial and Appeal Board ("PTAB"); (3) whether two Luminara candle designs infringe U.S. Patent Nos. 8,789,986 (the "'986 patent") and 8,926,137 (the "'137 patent"); and (4) whether various "prior art" references put forward by Luminara actually qualify as prior art under former 35 U.S.C. § 102.1
The Court has carefully considered the parties' briefs, the record, and the case law relevant to these disparate issues. Based on that consideration, and for the reasons stated herein, the Court will grant the Defendants' motion in part, and deny the motion in part.
This litigation arises out of allegations that Defendants have infringed four patents (collectively, the "Luminara patents"), each of which is entitled "Kinetic Flame Device," for which Luminara is the exclusive licensee.2 (See generally Third Am. Compl. [Doc. No. 131].) Together, the Luminara patents teach improved techniques for making the light from artificial candles flicker like the flames of real candles.3 See Luminara Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343, 1346 (Fed. Cir. 2016). Whereas previous artificial candles had primarily relied on randomly energized colored lights or the use of a blowing device to oscillate the simulated flame—resulting in "relatively poor imitations of a real flame"—Luminara's technology uses "a drive mechanism that stimulates and/or perturbs a complex interaction between gravity, mass, electromagnetic field strength, magnetic fields, air resistance and light" to achieve a convincing reproduction of a conventional combustion candle. ('355 patent at 1:55-2:26.)
The Luminara patents claim priority to 2008. Luminara, 814 F.3d at 1346. In January 2010, Luminara's predecessor, Candella, LLC ("Candella") displayed a number of prototype candles at the Consumer Electronics Show ("CES") in Las Vegas. Shortly after the show concluded, Candella approached Defendant Liown Electronics Co. Ltd ("Liown") to manufacture candles based on its designs. Luminara, 814 F.3d at 1346.Although the parties engaged in extensive negotiations and Liown worked to prepare the designs for production, the relationship soon broke down. Id. On June 28, 2010, Liown filed a Chinese patent application for a kinetic flame device similar to that covered by the Luminara patents. Id. Whether the application was based on confidential information about Luminara's technology is a matter of dispute. Id. Nonetheless, Liown began selling flameless candles in the United States in 2012. Id.
In response, Candella brought suit in this district on November 2, 2012, claiming patent infringement. See Candella, LLC v. Liown Elecs. Co., No. 12-cv-2803 (PJS/JJK) (D. Minn. 2012). The parties settled the following year—Liown agreed to stop selling infringing candles in the United States, and in return Candella restarted negotiations directed toward establishing a manufacturing relationship. Luminara, 814 F.3d at 1347. The process proved unfruitful, however, and on August 5, 2014—days after receipt of the '986 patent from the U.S. Patent and Trademark Office—Liown notified Luminara that it would no longer comply with the terms of the settlement agreement. Id. Candella brought the present suit against Liown and the other named defendants that same day, alleging patent infringement, trademark infringement, and tortious intereference. (See generally Third Am. Compl.) Defendants have since counterclaimed, alleging that Luminara has infringed Liown's '986 and '137 patents, and seeking (among other things) declarations of non-infringement and invalidity as to the Luminara patents. (See Defs.' Answer to Third Am. Compl. [Doc. No. 146] at 25-28.)
Shortly after suit was filed, Luminara moved for a preliminary injunction based on Liown's alleged infringement of claim 1 of the '166 patent, and Liown's alleged tortiousinterference with Luminara's customers. (See generally Pl.'s Mem. in Supp. of Mot. for Prelim. Inj. [Doc. No. 52].) This Court granted the motion, finding that Luminara had established a substantial likelihood of success on the merits of its infringement action, and that Defendants had failed to raise substantial doubt about the validity of the '166 patent. See Luminara Worldwide, LLC v. Liown Electronics Co., No. 14-cv-3103 (SRN/FLN), 2015 WL 1967250, at *14 (D. Minn. May 1, 2015). As relevant to the latter point, the Court concluded that the prior art '455 patent did not anticipate claim 1 of the '166 patent because the mechanism of the '455 patent was unable to pivot in the same chaotic and multi-directional manner as the mechanism of the '166 patent. Id. at *12. In the Court's view, the gimbal structure utilized by the '455 patent, which limited movement to two axes, displayed only rhythmic or metronomic motion, rather than the unpredictable flickering effect produced by the wire-based structure of the '166 patent. Id. Thus, the Court concluded that the '455 failed as a matter of law to anticipate at least one limitation of claim 1 of the '166 patent. Id. Because the Court concluded that Luminara was entitled to a preliminary injunction on the basis of alleged infringement, it did not reach the alternate ground of tortious interference. Id. at *5.
Defendants appealed the Court's preliminary injunction order, and the Federal Circuit reversed. As will be discussed in greater depth below, the circuit court found—contrary to the Court's determination—that a substantial question existed as to whether the '455 patent anticipates claim 1 of the '166 patent. Luminara, 814 F.3d at 1352. In particular, the circuit court concluded that while the '166 patent does require chaotic pivoting, it contains no requirements as to movement. Id. at 1354. Because the '455patent teaches pivoting in two axes and that the flame reflector be "articulated by a natural and chaotic external or internal force," the Federal Circuit concluded that a preliminary injunction was unwarranted. Id.
Upon remand, the parties proceeded to file separate motions for summary judgment, and a hearing was held to consider both motions on May 20, 2016. (See Defs.' Mot. for Summ. J. [Doc. No. 485]; Pl.'s Mot. for Summ. J. [Doc. No. 501]; Minute Entry [Doc. No. 561].) A dispute soon arose, however, regarding the status of one of Luminara's expert witnesses, which stretched through the summer and fall. See generally Luminara Worldwide, LLC v. Liown Elecs. Co., No. 14-cv-3103 (SRN/FLN), 2016 WL 6774229 (D. Minn. Nov. 15, 2016). Specifically, the parties disputed Luminara's continued assertion of attorney-client privilege over documents considered by Doug Patton, one of the founding members of Candella and also a designated Rule 26(a)(2)(C) non-reporting expert witness. See id. at *1-3. The matter was not finally resolved until mid-November, when this Court ruled that, by designating Patton as a non-reporting expert witness, Luminara had waived privilege as to the disputed documents. Id. at *5. It then gave Luminara a choice: proceed with Patton as an expert witness and waive privilege, or withdraw his designation.
Ultimately, Luminara chose the latter option. (See Nov. 22, 2016 Letter [Doc. No. 692].) In doing so, however, the Court and the parties were left in some doubt regarding the effect on the pending motions for summary judgment—both of which depended (either in support or in opposition) in part on Patton's testimony. As relevant to the present motion, on December 20, 2016, the parties produced a joint status reportconcluding that four of the six issues encompassed by the motion were ripe for disposition, and that memoranda relating to the other two would need to be refiled. (See Joint Status Report at 1.) In line with the parties' representations, the Court has chosen to address the four ripe matters immediately.
Summary judgment is...
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