Sierra Applied Sciences v. Advanced Energy Indust.
| Citation | 258 F.Supp.2d 1148 |
| Decision Date | 22 April 2003 |
| Docket Number | No. CIV. 01-B-1796 (CBS).,CIV. 01-B-1796 (CBS). |
| Parties | SIERRA APPLIED SCIENCES, INC., Plaintiff, v. ADVANCED ENERGY INDUSTRIES, INC., Defendant. |
| Court | U.S. District Court — District of Colorado |
Charles Henry Torres, Christine victoria Theisen, Charles H. Torres PC, Denver, CO, Susan E. Chetlin, Dahl & Oserloth, L.L.P., Denver, CO, Matthew Gabriel McFarland, Bieging, Shapiro & Burrus, LLP, Denver, CO, for plaintiff.
Thomas C. Grimm, Morris, Nicholes, Arsht & Tunnell, Wilmington, DE, Matthew B. Lehr, Latham & Watkins, Menlo Park, CA, Craig A. Neugeboren, Colley, Godward, LLP, Broomfield, CO, for defendant.
This is an action for declaratory judgment of patent non-infringement and invalidity, and for injunctive relief. Defendant states counterclaims for patent infringement of three of its U.S. patents. Defendant moves for dismissal for lack of subject-matter jurisdiction under Fed.R.Civ.P. 12(b)(1). A hearing was held on the motion to dismiss March 24, 2003. For the following reasons, I grant Defendant's motion.
Plaintiff Sierra Applied Sciences is a Boulder, Colorado company that designs electrical power supplies for industrial sputter-deposition applications. Defendant Advanced Energy Industries, a Fort Collins, Colorado company, also designs such supplies. Sputter-deposition technology is used to coat architectural glass, integrated circuits, and electronic media (e.g., compact discs) with a thin layer of metal or a metal compound. The object to be coated is called the substrate. The substrate is placed in a vacuum chamber along with the target material (e.g., aluminum) and a reactive gas, usually argon. The electronic power supplies at issue here are connected to the target assembly, which integrates the substrate with a group of magnets. When activated, the power supply forces electricity into the vacuum chamber through a cathode. The electricity ionizes the reactive gas, forcing the gas molecules to lose some of their negatively charged electrons.
The gas then consists of millions of positively charged ions. This ionized gas is called plasma. The negatively charged target assembly attracts the plasma to the target material. Upon impact with the target, plasma ions dislodge, or "sputter" atoms of the target material into the vacuum chamber space. Eventually, they migrate to the object to be coated-the substrate-and deposit on it.
The sputtering process often is plagued by the periodic occurrence of stray electrical discharges, or arcs, in the vacuum chamber. Arcs are movements of electricity between objects with a strong positive charge and those with a strong negative charge. In sputtering, an arc may occur between the target and the substrate. It may damage the coating of the substrate. An arc may also occur between the target and another part of the vacuum chamber. This also may degrade the coating quality. Arcs can be short-lived or continuous, and occur most often in reactive-sputtering processes where the metal target material reacts with a gas to form a compound coating.
Plaintiff and Defendant hold patents that address arcing problems. Plaintiff contends its patented technology addresses the problem differently than Defendant's technology. Plaintiff contends its technology consists of a circuit design for a pulsing power supply that reverses voltage on the sputtering cathode within the vacuum chamber. The effect of Plaintiffs design is that the plasma is "extinguished" during the voltage shift so the reactive gas retains its electrons. Plaintiff contends Defendant's designs do not extinguish the plasma.
On December 1, 1995, Defendant wrote a letter through its attorneys to Plaintiff warning that Plaintiff might be using power-supply technology patented by Defendant. On January 15, 1996, Plaintiff responded to the letter, indicating that it manufactured less than five of the offending power supplies, and had changed its plans so it was no longer manufacturing any power supplies. On December 8, 1999, Defendant wrote another letter to Plaintiff warning it that Plaintiff was again manufacturing power supplies that used Defendant's patented technology. This time, Defendant wrote, "[w]e are now concerned that Sierra may have been surreptitiously copying AEI's technology." On December 15, 1999, Plaintiffs attorneys responded, saying they were investigating the matter. On November 13, 2000, Defendant wrote a third letter in which it indicated it had not received a response from Plaintiff, so would act as it deemed appropriate if no response was received within two weeks. Plaintiff commenced this action almost a year later.
Rule 12(b)(1) empowers a court to dismiss a complaint for "lack of jurisdiction over the subject matter." Fed.R.Civ.P. 12(b)(1). As courts of limited jurisdiction, federal courts may only adjudicate cases that the Constitution and Congress have granted them authority to hear. See U.S. CONST, art. Ill, § 2; Moms v. City of Hobart, 39 F.3d 1105, 1110 (10th Cir.1994). Statutes conferring jurisdiction on federal courts must be strictly construed. See F & S Constr. Co. v. Jensen, 337 F.2d 160, 161 (10th Cir.1964). The federal declaratory judgment statute provides "in a case of actual controversy within its jurisdiction ... any court of the United States may declare the rights and other legal relations of any interested party seeking such declaration." 28 U.S.C. § 2201.
A Rule 12(b)(1) motion to dismiss "must be determined from the allegations of fact in the complaint, without regard to mere [conclusory] allegations of jurisdiction." Groundhog v. Keeler, 442 F.2d 674, 677 (10th Cir.1974). The burden of establishing subject-matter jurisdiction is on the party asserting jurisdiction. See Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir.1974). Motions to dismiss pursuant to Rule 12(b)(1) may take two forms. First, if a party attacks the facial sufficiency of the complaint, the court must accept the allegations of the complaint as true. See Holt v. United States, 46 F.3d 1000, 1002-03 (10th Cir.1995). Second, if a party attacks the factual assertions regarding subject-matter jurisdiction through affidavits and other documents, the court may make its own findings of fact. Id. at 1003. A court's consideration of evidence outside the pleadings will not convert the motion to dismiss to a motion for summary judgment under Rule 56. Id. Here, Defendant attacks the factual assertions related to subject-matter jurisdiction underlying Plaintiffs Complaint, so I make findings of fact.
"Whether a declaratory plaintiffs ability and definite intention to undertake a potentially infringing activity constitutes sufficient `preparation' is a question of degree to be resolved on a case-by-case basis." Arrowhead Indus. Water, Inc. v. Ecolochem, Inc., 846 F.2d 731, 736 (Fed.Cir. 1988). The Federal Circuit has annunciated two versions of its two-pronged actual controversy test. Prong one is the same in both: "[t]he defendant's conduct must have created on the part of the plaintiff a reasonable apprehension that the defendant will initiate suit if the plaintiff continues the allegedly infringing activity." Shell Oil Co. v. Amoco Corp., 970 F.2d 885, 888 (Fed.Cir.1992) (citations omitted).
Prong two varies between a narrow reading and a broader one. Under the narrower test, "plaintiff must actually have either produced the device or have prepared to produce that device" Id. Sweetheart Plastics, Inc. v. Illinois Tool Works, Inc., 439 F.2d 871, 874-875 (1st Cir.1971). Defendant contends this is the most appropriate version of the test.
Plaintiff contends the proper version is the more inclusive one-whether Plaintiff is "making, using or selling a device" subject to an infringement charge under 35 U.S.C. § 271(a), or has meaningfully prepared to do so. See BP Chems. v. Union Carbide Corp., 4 F.3d 975, 978 (Fed.Cir.1993). See also, C/O at 7. This version tracks the language in the U.S. patent infringement statute. See 35 U.S.C. § 271(a) ().
In BP Chemicals, 4 F.3d at 978, the Federal Circuit held that the second prong requires "present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity." Id. at 978. However, the court based this version of the second prong on the "producing or preparing to produce version," citing Jervis B. Webb Co. v. Southern Sys., Inc., 742 F.2d 1388, 1398-99 (Fed.Cir.1984). In Jervis, the Federal Circuit had described prong two as follows: "the plaintiff seeking a declaration of invalidity must have actually produced the accused device or have actually prepared to produce such a device." Id. at 1399, citing Sweetheart Plastics, Inc. v. Illinois Tool Works, Inc., 439 F.2d 871, 875 (1st Cir. 1971). Because the Federal Circuit seems to use both versions of its test more or less interchangeably, I apply both.
There is no dispute that to withstand dismissal, Plaintiff must show that a case or controversy existed at the time it filed its Complaint on September 14, 2001. To do so, it must prove it was engaging in activity with its 2-kW and 150-kW power supplies that infringed Defendant's patents as of that date. The key...
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Sierra Applied Sciences v. Advanced Energy Indus.
...complaint against Advanced Energy Industries, Inc. ("AEI") for lack of a case or controversy. Sierra Applied Scis., Inc. v. Advanced Energy Indus., Inc., 258 F.Supp.2d 1148 (D.Colo. 2003). We reverse-in-part, vacate-in-part, affirm-in-part, and The following facts are uncontested, except wh......