Samsung Elecs. Am., Inc. v. Grecia
| Decision Date | 15 March 2021 |
| Docket Number | CIVIL ACTION NO. 21-562 |
| Citation | 525 F.Supp.3d 590 |
| Parties | SAMSUNG ELECTRONICS AMERICA, INC., et al. v. William GRECIA |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Neil P. Sirota, Stephanie C. Kato, Baker Botts LLP, New York, NY, Timothy S. Durst, Baker Botts, Dallas, TX, Andrew George, Baker Botts, Washington, DC, for Samsung Electronics America, Inc., Samsung Electronics Co., Ltd.
William Grecia, Downingtown, PA, Pro Se.
KEARNEY, District Judge Congress grants patent owners the ability to sue manufacturers and sellers of products infringing on their valid patents. Congress also grants manufacturers and sellers facing or fearing claims their products infringe a patent to seek an Order declaring the patent at issue is invalid and their products do not infringe. We today address whether a global manufacturer can proceed before us against the Pennsylvania patent owner who earlier sued an allegedly infringing seller of a product in Texas when there is no identity of parties or products in the two cases and no apparent control by the global manufacturer over the seller or its product sued in Texas.
The Pennsylvania patent owner pro se asks us to dismiss the manufacturer's invalidity suit before us or transfer it to Texas to join his infringement case against the seller of another product allegedly using his patent. We favor deferring to the earlier case to avoid duplicate effort and possible forum shopping when possible. But we must have sufficient similarity in the product and requested scope of relief beyond the same patent at issue by unrelated persons. We lack the similarity in this dispute. The patent owner did not sue the manufacturer in Texas. There is no basis to find the manufacturer controls the seller of a different product. The manufacturer's declaratory judgment case before us addresses different products and broader subjects. We deny the patent owner's motion to dismiss or transfer. We will proceed on determining the validity of the patent at issue in the patent owner's home District.
Pennsylvanian William Grecia owns United States Patent 8,404,555 ("’555 patent"), titled "Personalized digital media access system (PDMAS)."1 The ’555 patent relates to the field of digital access management schemes used by makers of electronic products to protect sensitive data from illegal access using computerized devices.2 Mr. Grecia claims his patent "teaches a more personal system of access rights management which employs electronic ID, as part of a web service membership, to manage access rights across a plurality of devices."3 He also owns United States Patent Numbers 8,533,860 ("’860 patent") and 8,887,308 ("’308 patent") which share the same specifications and relate to the same subject matter.4
Samsung Electronics America and Samsung Electronics Co., Ltd. (collectively "Samsung") is a global electronics firm headquartered in South Korea with 244 subsidiaries across the world, including in the United States.5 Samsung developed, used, and sold cloud-based data access software including Samsung Knox and Samsung Pay. Knox is a "mobile device security framework that includes backend tools to allow organizations to manage their employees’ devices."6 Samsung Electronics Co. developed Knox and Samsung Electronics America markets and sells the software.7 Samsung Pay is Samsung's mobile payment software.8
Mr. Grecia wants Samsung to buy his patent.
Mr. Grecia made repeated claims these Samsung products infringe his ’555 patent while trying to induce Samsung to buy it over the past several years. Mr. Grecia first offered to sell a patent portfolio, including the ’555 patent, to Samsung in 2014.9 Mr. Grecia's counsel described the importance of the invention, existing litigation with Samsung's competitors, and how the patents may benefit Samsung.10 Samsung did not respond. Mr. Grecia's counsel wrote again a couple weeks later comparing the ’555 patent against a patent application submitted by Samsung, which later became United States Patent Number 9,898,588 ("’588 patent") owned by Samsung.11 Mr. Grecia's counsel told Samsung it had a duty to disclose in the application "the prior teachings and disclosure of Mr. Grecia's patents."12
Samsung did not respond to either of Mr. Grecia's letters.
Mr. Grecia's litigation tactics.
Mr. Grecia began taking a more aggressive approach.13 He filed approximately seventy patent infringement suits asserting the ’555 patent or its continuations, the ’860 patent and the ’308 patent.14 He repeatedly threatened suits against Samsung and its customers for alleged infringement of the patents and unsuccessfully sued Samsung three times.15 In his first suit against Samsung six years ago, Mr. Grecia alleged Samsung infringed the ’308 patent.16 Mr. Grecia voluntarily dismissed this suit three weeks after filing.17 In two subsequent suits filed in 2016 and 2019, Mr. Grecia alleged infringement of the ’860 patent and then, for the second time, the ’308 patent.18 Samsung obtained judgments of invalidity of all asserted claims in both cases and the Court of Appeals for the Federal Circuit affirmed both orders of invalidity.19
Mr. Grecia sued Samsung's customers Verizon, T-Mobile, and Sprint for infringement of the ’555 patent and the ’308 patent based on the sale of "Samsung Pay Devices," or Samsung phones preloaded with the Samsung Pay application.20 In amended complaints filed in each of these cases, Mr. Grecia withdrew the infringement allegations of the ’555 patent, "and then, faced with a motion to dismiss, dismissed the cases entirely without prejudice."21
Mr. Grecia tried to again induce Samsung to purchase the ’555 patent.
Mr. Grecia began emailing Samsung approximately a year ago claiming "purported improprieties by Samsung in its briefing to the court that invalidated the ’308 patent and an alleged failure by Samsung to disclose [Mr.] Grecia's patents in Samsung's prosecution of its own patents that if disclosed to the Patent Office would, according to [Mr.] Grecia, invalidate thousands of Samsung's patents."22 Mr. Grecia told Samsung he would be willing to resolve the issues and remain silent about Samsung's alleged transgressions if Samsung purchased his patents for an amount Samsung claims "border[ed] on, if not crossing into, extortion."23 Mr. Grecia later offered to sell his company to Samsung, including its patent portfolio.24 Samsung responded the next day, "Samsung is not interested in a mediation, patent purchase, or license from Mr. Grecia."25 Mr. Grecia responded with yet another offer and reiterated his deadline to accept.26 Samsung allowed the deadline to pass.27
Mr. Grecia emailed Samsung again at the end of March 2020 seeking a "global settlement with Samsung."28 He attached a claim chart allegedly showing how the ’555 patent can be read on a Samsung mobile point of sale ("mPOS") application.29 Samsung responded, "(1) the allegedly infringing mPOS application is not, and has never been, available in the U.S., and (2) the mPOS application would not infringe anyway."30 Samsung also addressed Mr. Grecia's allegations of misconduct and reiterated it had no interest in a settlement or any of Mr. Grecia's other proposals.31
Samsung did not hear from Mr. Grecia again until nine months later in January 2021.32 Mr. Grecia emailed Samsung's counsel and a Senior Vice President in Samsung's Silicon Valley intellectual property office renewing his previous offers to sell his portfolio and realleging his theory of wrongdoing by Samsung in failing to disclose Mr. Grecia's patents to the Patent office.33 He attached another claim chart to show the claims of the ’555 patent read on Samsung's Knox mobile security software.34 Mr. Grecia requested Samsung respond, if interested in purchasing his ’555 patent, by February 5, 2021.35 Samsung did not respond.
Mr. Grecia sent another email about two weeks later attaching a new claim chart allegedly showing claims of the ’555 patent read on Samsung's mobile payment application, Samsung Pay.36 This claim chart identified the allegedly infringing use of Samsung Pay by a third-party bank promoting Samsung Pay, and not an alleged infringement by Samsung itself.37 Mr. Grecia's email "extended a February 15th, 2021 communication date for Samsung ... to express interest in a continued discussion of the offered proposal."38 His email also stated he would not "assert an aggressive strategy" against parties considering his proposals.39 Samsung claims it had not been considering Mr. Grecia's proposals nor did it plan on engaging in any discussion with him.40 Mr. Grecia does not allege Samsung responded.
Mr. Grecia's suit against retailer Kohl's.
So Mr. Grecia sued. But not Samsung. On January 30, 2021, Mr. Grecia instead sued Kohl's Corporation in the United States District Court for the Western District of Texas (the "Kohl's suit"), alleging Kohl's EMV ("Europay, Mastercard, and Visa") point of sale devices used at the checkout counter in Kohl's stores infringe claim 2 of the ’555 patent.41 Mr. Grecia alleges in Texas "Kohl's uses, owns, and controls [the] EMV point of sale device" which allegedly infringes the ’555 patent.42 He claims the infringing action by Kohl's EMV point of sale devices includes its monitoring of access to "financial data of one or more payment systems (computer based apparatus) by writing data to describe which tokenized [Primary Account Number] data is associated with a De-tokenized Authorization ID relational data" and receiving of access request for computer facilitated financial data by receiving a tokenized Primary Account Number.43
Mr. Grecia does not allege infringement by Samsung or either of its software products, Samsung Knox and Samsung Pay.44 Mr. Grecia attaches a claim chart as an exhibit to his Kohl's suit complaint including a picture of the Kohl's EMV point of sale device and the Samsung Pay application but does not allege it is an infringing product of the suit.45 He claims he did not...
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