Sandisk Corp. v. Phison Electronics Corp., 3:07-cv-00605-bbc.
| Decision Date | 28 January 2008 |
| Docket Number | No. 3:07-cv-00607-bbc.,No. 3:07-cv-00605-bbc.,3:07-cv-00605-bbc.,3:07-cv-00607-bbc. |
| Citation | 538 F.Supp.2d 1060 |
| Parties | SanDisk Corp., Plaintiff, v. PHISON ELECTRONICS CORP., Silicon Motion Technology Corp., Silicon Motion, Inc. (Taiwan), Silicon Motion, Inc. (California), Silicon Motion International, Inc., Synergistic Sales, Inc., USBest Technology, Inc., Skymedi Corp., Zotek Electronic Co., Ltd., Zodata Technology Ltd., Infotech Logistic LLC, Power Quotient International Co., Ltd., PQI Corp., PNY Technologies, Inc., Kingston Technology Co., Inc., Kingston Technology Corp., Payton Technology Corp., Memosun, Inc., Buffalo, Inc., Melco Holdings, Inc., Buffalo Technology (USA) Inc., Verbatim Corp., Transcend Information Inc. (California, U.S.A.), Transcend Information Maryland, Inc., A-Data Technology Co., Ltd., A-Data Technology (USA) Co., Ltd., Apacer Technology, Inc., Apacer Memory America, Inc., Acer, Inc., Behavior Tech Computer USA Corp., Dane-Elec Memory S.A., and Dane-Elec Corp., USA, Defendants. SanDisk Corp., Plaintiff, v. Phison Electronics Corp., Silicon Motion Technology Corp., Silicon Motion, Inc. (Taiwan), Silicon Motion, Inc. (California), Silicon Motion International, Inc., Synergistic Sales, Inc., USBest Technology, Inc., Skymedi Corp., ChipsBrand Microelectronics (HK) Co. Ltd., ChipsBank Technology (Shenzhen) Co., Ltd., ChipsBank Microelectronics Co., Ltd., Zotek Electronic Co., Ltd., Zodata Technology Ltd., Infotech Logistic LLC, Power Quotient International Co., Ltd., PQI Corp., PNY Technologies, Inc., Kingston Technology Co., Inc., Kingston Technology Corp., Payton Technology Corp., Memosun, Inc., Buffalo, Inc., Melco Holdings, Inc., Buffalo Technology (USA) Inc., Verbatim Corp., Transcend Information Inc. (California, U.S.A.), Transcend Information Maryland, Inc., Imation Corp., Imation Enterprises Corp., Memorex Products, Inc., Add-On Computer Peripherals, Inc., Add-On Computer Peripherals, LLC, Add-On Technology Co., A-Data Technology Co., Ltd., A-Data Technology (USA) Co., Ltd., Apacer Technology, Inc., Apacer Memory America, Inc., Acer, Inc., Behavior Tech Computer USA Corp., Corsair Memory, Inc., DaneElec Memory S.A., Dane-Elec Corp., USA, Edge Tech Corp., Interactive Media Corp., LG Electronics, Inc., LG Electronics U.S.A., Inc., TSR Silicon Resources,' Inc. and Welldone Co., Defendants. |
| Court | U.S. District Court — Western District of Wisconsin |
Allen Arntsen, Foley & Lardner LLP, Madison, WI, David Caine, James C. Yoon, Julie Holloway, Lisa Kim Anh Nguyen, Michael A. Ladra, Monica Mucchetti Eno, Olga V. Kotlyarevskaya, Ron E. Shulman, Wilson Sonsini Goodrich & Rosati, Palo Alto, CA, Jose C. Villarreal, Nicole W. Stafford, Wilson Sonsini Goodrich & Rosati, Austin, TX, Matthew J. Bye, Wilson
Sonsini Goodrich & Rosati, P.C., Washington, DC, for Plaintiff.
Anthony J. Sievert, Eugenia G. Carter, Christine Yang, Anthony J. Sievert, Whyte Hirschboeck Dudek, Lester A. Pines, Cullen Weston Pines & Bach LLP, David J. Harth, Heller Ehrman LLP, Madison, WI, David Barkan, Fish & Richardson PC, Redwood City, CA, Brian C. Kwok, Perry Clark, Kirkland & Ellis LLP, Anup Tikku, Chien-Wei Chou, Jane C. Schlicht, Jong H. Lee, Michael J. Bettinger, K&L Gates LLP, San Francisco, CA, Rummel Mor Bautista, The Ryan Firm, Anaheim, CA, Alfredo A. Bismonte, Beck, Ross, Bismonte & Finley, LLP, San Jose, CA, Frank J. West, Richard D. Kelly, Robert C. Mattson, Takahiro' Miura, Oblon, Spivak, McClelland, Maier & Neustadt P.C., Alexandria, VA, Allen A. Slaughter, Jr, Byron Todd Jones, Jennifer L. McKenna, Ronald J. Schutz, Robins, Kaplan, Miller & Ciresi, LLP, Minneapolis, MN, J. Thomas Haley, Kevin Palmersheim, Haley Palmersheim, S.C., Middleton, WI, for Defendants.
Recently, plaintiff filed two patent infringement lawsuits in this court. Plaintiff alleges infringement of two patents in Case No. 3:07-cv-00605-bbc and five patents in Case No. 3:07-cv-00607-bbc. The two cases involve many of the same defendants and all seven patents asserted relate to flash memory technology. Case No. 607 has been stayed because the five patents asserted in that case are the subject of a proceeding before the International Trade Commission. Case No. 3:07-cv-00607bbc, Order, dkt. # 118. Now before the court are various defendants' motions to stay Case No. 605 pursuant to 28 U.S.C. § 1659 and this court's inherent power and defendants' motions to consolidate Cases Nos. 605 and 607 pursuant to Rule 42 of the Federal Rules of Civil Procedure.
Because the patents asserted in Case No. 605 are different from those involved in Case No. 607 and now before the International Trade Commission, § 1659 does not require that Case No. 605 be stayed. However, because the issues in both cases overlap substantially, I will stay Case No. 605 and consolidate Cases Nos. 605 and 607 pursuant to this court's inherent powers.
I find the following facts to be material and undisputed.
Plaintiff has established itself as the leading company in the flash memory industry. Currently, it is one of the world's largest suppliers of flash memory products. However, plaintiff has come to face increasingly stiff competition from defendants, many of whom sell products that compete directly with plaintiffs products. Competitive pricing pressures have forced the prices down on plaintiffs flash memory products. Last year alone, plaintiff reduced its average selling price by 68% per megabyte. Moreover, defendants have steadily increased their share of the flash memory market. For example, defendant Kingston nearly doubled its market share in the United States within the past year.
On October 23, 2007, plaintiff SanDisk Corp. filed two complaints in this court, Cases Nos. 3:07-cv-605-bbc and 3:07-cv-607-bbc. Case No. 605 alleges infringement of U.S. Patent Nos. 6,149,316 (the '316 patent) and 6,757,842 (the '842 patent). Case No. 607 alleges infringement of U.S. Patent Nos. 6,426,893 (the '893 patent), 5,719,808 (the '808 patent), 6,763,424 (the '424 patent), 6,947,332 (the '332 patent) and 7,137,011 (the '011 patent). Both cases assert that a variety of defendants manufactured or distributed products known as "flash memory products" such as "flash drives," CompactFlash memory cards, MMC memory cards and media players. Many of the same defendants and products are common to both actions.
Certain patents involved in Cases Nos. 605 and 607 share a prosecution history. U.S. patent application serial number 07/337,566 (the '566 application) was filed on April 13, 1989. A restriction requirement issued in the '566 application on July 15, 1991 separated four groups of claims. Subsequently, the applicant filed two divisional patent applications, serial number 07/963,838, from which the '316 and '842 patents at issue in Case No. 605 resulted, and 07/963,851, from which the '808 patent at issue in Case No. 607 resulted. As a result, the '316, '842 and '808 patents share a specification and some prior art. In addition, the three patents share certain claim terms. The most prominent example of this is the term "erasable together," which appears in independent claims 1, 5, 11, 16 and 23 of the '808 patent, independent claims 1, 53, 67 and 99 of the '316 patent and independent claims 1, 10, 21, 31, 40, 47 and 61 of the '842 patent.
The '316 and '842 patents claim a priority date of April 13, 1989 and will expire April 13, 2009.
On October 23, 2007, plaintiff SanDisk Corp. filed a complaint (Investigation No. 337-TA-2571) with the United States International Trade Commission pursuant to Section 337 of the Tariff Act of 1930. That complaint alleges infringement of the same five patents at issue in Case No. 607, which has been stayed. The target date for completion of the commission's investigation is March 12, 2009. However, certain respondents in the proceeding have filed a motion to extend the target date until June 13, 2009. An appeal of the case would likely take an additional nine months or more to resolve.
Various defendants seek a stay of Case No. 605 pursuant to 28 U.S.C. § 1659 or this court's inherent power to issue a stay. In addition, certain defendants have moved to consolidate Cases Nos. 605 and 607.
When an alleged infringement occurs through importation, a patentee may bring parallel patent infringement actions before both the district court and the International Trade Commission. Texas Instruments Inc. v. Tessera, Inc., 231 F.3d 1325, 1330 (Fed.Cir.2000). However, 28 U.S.C. § 1659 includes a mandatory stay provision which limits the timing of such parallel actions. Fuji Photo Film Co. v. Benun, 463 F.3d 1252, 1256 (Fed.Cir.2006). Upon request by a defendant in parallel actions before a district court and the International Trade Commission, the district court must stay its proceedings "with respect to any claim that involves the same issues involved In the proceeding before the commission" until the commission's determination becomes final. 28 U.S.C. § 1659.
The parties disagree about the scope of the mandatory stay provision. Plaintiff contends that for a claim to "involve the same issues" for the purpose of imposing a stay under § 1659, the claim must involve the same patent. Defendants contend that claims may "involve the same issues" if they involve patents that are "closely related" and share important factual or legal disputes. Plaintiff has the better argument.
First, defendants contend that lawsuits sharing "overlapping issues" must be stayed, which would mean that the mandatory stay provision requires stay for claims that involve only some of the same issues. However, the statutory language does not lend itself to such a broad reading, requiring stay only for "any claim that involves the same issues." Moreover, defendants' reading extends the mandatory stay beyond its purpose. The legislative...
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