M2M Solutions LLC v. Enfora, Inc.

• Decision Date: 09 March 2016
• Docket Number: Civil Action No. 12–32–RGA
• Citation: 167 F.Supp.3d 665
• Parties: M2M Solutions LLC, Plaintiff, v. Enfora, Inc., Novatel Wireless Solutions, Inc., and Novatel Wireless, Inc., Defendants.
• Court: U.S. District Court — District of Delaware

167 F.Supp.3d 665

M2M Solutions LLC, Plaintiff,

v.Enfora, Inc., Novatel Wireless Solutions, Inc., and Novatel Wireless, Inc., Defendants.

Civil Action No. 12–32–RGA

United States District Court, D. Delaware.

Signed March 9, 2016

Richard D. Kirk, Esq., Stephen B. Brauerman, Esq., Vanessa R. Tiradentes, Esq., Sara E. Bussiere, Esq., Bayard, P.A., Wilmington, DE; Marc N. Henschke, Esq., Foley & Lardner LLP, Boston, MA; Jeffrey N. Costakos, Esq., Kadie Jelenchick, Esq., Foley & Lardner LLP, Milwaukee, WI; Jason J. Keener, Esq., Jeffrey J. Mikrut, Esq., Foley & Lardner LLP, Chicago, IL. Attorneys for Plaintiff M2M Solutions LLC.

Francis DiGiovanni, Esq., Thatcher A. Rahmeier, Esq., Drinker Biddle & Reath LLP, Wilmington, DE; Christoper W. Kennerly, Esq., Paul Hastings LLP, Palo Alto, CA; Elizabeth L. Brann, Esq., Jeffrey D. Comeau, Esq., Paul Hastings LLP, San Diego, CA. Attorneys for Defendants.

MEMORANDUM OPINION

ANDREWS

, U.S. DISTRICT JUDGE:

Presently before the Court are two summary judgment motions filed by Defendants and two Daubert

motions, one filed by Plaintiff and one by Defendants. Specifically, Defendants filed a Motion for Summary Judgment of Non–Infringement and No Willfulness (D.I.145), a Motion for Summary Judgment on Damages Issues (D.I.142), and a Motion to Exclude M2M's Experts Richard Bero and Whitey Bluestein (D.I.147).¹ Plaintiff filed a Motion to Exclude Opinions of Dr. Choi. (D.I.140). The motions are fully briefed. (D.I.141, 144, 146, 148, 172, 174, 176, 179, 188, 194, 195, 196).

I. BACKGROUND

On January 13, 2012, Plaintiff M2M Solutions LLC filed five related patent infringement actions asserting infringement of U.S. Patent Nos. 8,094,010 (“the '010 patent”)

and 7,583,197 (“the '197 patent”). The Court held a Markman hearing, after which it invalidated the '197 patent and construed several claim terms in the '010 patent. (D.I.90). The Court issued separate Memorandum Opinions on summary judgment motions (the “Telit SJ opinion”) and Daubert motions (the “Telit Daubert opinion”) in Plaintiffs related case against Telit. (C.A. No. 12–33–RGA, D.I.247, 295). The parties have since agreed to withdraw certain arguments made in the present motions, conceding that the reasoning of the Telit SJ opinion applies with equal force to certain issues raised here. (D.I. 201 at 1–3).

The '010 patent

claims a “programmable communicator device” that is capable of receiving transmissions, authenticating them using a particular form of coded number authentication, and storing numbers from authenticated transmissions in a list of permitted callers. ('010 patent, abstract & claim 1). The patent further contemplates a device that is remotely programmable and that allows for remote data monitoring, “which can be used to relay information about the status of a remote piece of technical equipment such as a vending machine.” (Id. col. 3, ll. 43–47; id. col. 4, ll. 3–7; id. col. 7, ll. 24–30).

II. LEGAL STANDARDS

A. Summary Judgment

“The court shall grant summary judgment if 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 has the initial burden of proving the absence of a genuinely disputed material fact relative to the claims in question. Celotex Corp. v. Catrett, 477 U.S. 317, 330, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Material facts are those “that could affect the outcome” of the proceeding, and “a dispute about a material fact is ‘genuine’ if the evidence is sufficient to permit a reasonable jury to return a verdict for the nonmoving party.” Lamont v. New Jersey, 637 F.3d 177, 181 (3d Cir.2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)

). The burden on the moving party may be discharged by pointing out to the district court that there is an absence of evidence supporting the non-moving party's case. Celotex, 477 U.S. at 323, 106 S.Ct. 2548.

The burden then shifts to the non-movant to demonstrate the existence of a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)

; Williams v. Borough of West Chester, Pa., 891 F.2d 458, 460–61 (3d Cir.1989). A non-moving party asserting that a fact is genuinely disputed must support such an assertion by: “(A) 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; or (B) showing that the materials cited [by the opposing party] do not establish the absence ... of a genuine dispute....” FED.R.CIV.P. 56(c)(1).

When determining whether a genuine issue of material fact exists, the court must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007)

; Wishkin v. Potter, 476 F.3d 180, 184 (3d Cir.2007). A dispute is “genuine” only if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson, 477 U.S. at 247–49, 106 S.Ct. 2505. If the non-moving 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. See

Celotex Corp., 477 U.S. at 322, 106 S.Ct. 2548.

B. Daubert

Federal Rule of Evidence 702

sets out the requirements for expert witness testimony and states:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if: (a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.

FED.R.EVID. 702

. The Third Circuit has explained:

Rule 702

embodies a trilogy of restrictions on expert testimony: qualification, reliability and fit. Qualification refers to the requirement that the witness possess specialized expertise. We have interpreted this requirement liberally, holding that “a broad range of knowledge, skills, and training qualify an expert.” Secondly, the testimony must be reliable; it “must be based on the ‘methods and procedures of science’ rather than on ‘subjective belief or unsupported speculation’; the expert must have ‘good grounds' for his o[r] her belief. In sum, Daubert holds that an inquiry into the reliability of scientific evidence under Rule 702 requires a determination as to its scientific validity.” Finally, Rule 702 requires that the expert testimony must fit the issues in the case. In other words, the expert's testimony must be relevant for the purposes of the case and must assist the trier of fact. The Supreme Court explained in Daubert that “Rule 702's ‘helpfulness' standard requires a valid scientific connection to the pertinent inquiry as a precondition to admissibility.” By means of a so-called

“Daubert

hearing,” the district court acts as a gatekeeper, preventing opinion testimony that does not meet the requirements of qualification, reliability and fit from reaching the jury. See Daubert (“Faced with a proffer of expert scientific testimony, then, the trial judge must determine at the outset, pursuant to Rule 104(a) [of the Federal Rules of Evidence] whether the expert is proposing to testify to (1) scientific knowledge that (2) will assist the trier of fact to understand or determine a fact in issue.”).

Schneider ex rel. Estate of Schneider v. Fried, 320 F.3d 396, 404–05 (3d Cir.2003)

(footnote and internal citations omitted).²

The party offering expert testimony bears the burden of proving its admissibility by a preponderance of the evidence. See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 592 n.10, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)

. In the context of calculating a reasonably royalty in a patent case under 35 U.S.C. § 284, the Federal Circuit has explained that “damages awarded for patent infringement must reflect the value attributable to the infringing features of the product, and no more.” CSIRO v.

Cisco Sys., Inc., 809 F.3d 1295, 1301 (Fed.Cir.2015) (internal quotation marks omitted). “[G]iven the great financial incentive parties have to exploit the inherent imprecision in patent valuation, courts must be proactive to ensure that the testimony presented—using whatever methodology—is sufficiently reliable to support a damages award.” Id. Further, the Federal Circuit has “consistently explained that proof of damages must be carefully tied to the claimed invention itself.” Apple Inc. v. Motorola, Inc., 757 F.3d 1286, 1324 (Fed.Cir.2014) ; see also

VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1327 (Fed.Cir.2014) (“[T]his court has consistently held that a reasonable royalty analysis requires a court to ... carefully tie proof of damages to the claimed invention's footprint in the market place.” (alteration in original) (internal quotation marks omitted)). “While questions regarding which facts are most relevant for calculating a reasonable royalty are properly left to the jury, a critical prerequisite is that the underlying methodology be sound.” VirnetX, 767 F.3d at 1328. “[T]he essential requirement for reliability under Daubert is that the ultimate reasonable royalty award must be based on the incremental value that the patented invention adds to the end product.” CSIRO, 809 F.3d at 1301 (internal quotation marks omitted).

II. DISCUSSION

A. Defendants' Motion for Summary Judgment of Non–Infringement and No Willfulness (D.I.145)

Defendants' non-infringement and no willfulness motion raises three principal issues. Fi...