Simo Holdings Inc. v. Hong Kong Ucloudlink Network Tech. Ltd., 18-CV-5427 (JSR)

• Decision Date: 28 August 2019
• Docket Number: 18-CV-5427 (JSR)
• Parties: SIMO HOLDINGS INC., Plaintiff, v. HONG KONG UCLOUDLINK NETWORK TECHNOLOGY LIMITED and uCloudlink (America), Ltd., Defendants.
• Court: U.S. District Court — Southern District of New York

396 F.Supp.3d 323

SIMO HOLDINGS INC., Plaintiff,

v.HONG KONG UCLOUDLINK NETWORK TECHNOLOGY LIMITED and uCloudlink (America), Ltd., Defendants.

18-CV-5427 (JSR)

United States District Court, S.D. New York.

Signed August 28, 2019

Harold Henry Davis, Kenneth Jenq, Lei Howard Chen, Peter E Soskin, Rachel Elizabeth Burnim, K & L Gates LLP, San Francisco, CA, Min Wu, Yang Liu, Pro Hac Vice, K & L Gates LLP, Palo Alto, CA, Gina Alyse Jenero, K & L Gates LLP, Chicago, IL, Jeffrey Charles Johnson, K & L Gates LLP, Seattle, WA, Matthew Jason Weldon, K & L Gates LLP, New York, NY, for Plaintiff.

Robert William Busby, Jr., Pro Hac Vice, Bradford A. Cangro, Ghee Lee, Pro Hac Vice, Morgan, Lewis & Bockius LLP, Washington, DC, Excylyn Janaize Hardin-Smith, Fish & Richardson P.C., Michael Edward Tracht, Morgan Lewis & Bockius, LLP, Michael Theodore Zoppo, Weil, Gotshal & Manges LLP, New York, NY, Jason C. White, Pro Hac Vice, Karon Nicole Fowler, Nicholas Restauri, Morgan, Lewis & Bockius LLP, Chicago, IL, Oliver James Richards, Cheryl Wang, Fish & Richardson, San Diego, CA, James Huguenin-Love, Phillip W. Goter, Fish & Richardson P.C., Minneapolis, MN, Jonathan Lamberson, Fish & Richardson P.C., Redwood City, CA, Shaobin Zhu, Morgan, Lewis & Bockius LLP, Palo Alto, CA, for Defendants.

OPINION AND ORDER

JED S. RAKOFF, U.S.D.J.

Following a trial in this patent infringement case, the jury found in favor of plaintiff SIMO Holdings Inc. ("SIMO") and awarded damages against defendants Hong Kong uCloudlink Network Technology Limited and its American subsidiary, uCloudlink (America), Ltd. (collectively, "uCloudlink"). Now before the Court are the parties' various post-trial motions.

The facts and procedural history of this case are set out in more detail in the Court's Opinion explaining its summary judgment rulings, familiarity with which is here presumed. See Summary Judgment Opinion, ECF No. 163. In brief, uCloudlink sells a line of mobile WiFi hotspot devices, the GlocalMe G2, G3, and U2, as well as an S1 mobile world phone (collectively, "the Infringing Devices"). These products all permit users to access data services while traveling abroad without incurring the roaming fees charged by telecommunications providers. SIMO filed suit, alleging that these products violated several claims of SIMO's U.S. Patent No. 9,736,689 ("the '689 Patent").¹ The Court granted SIMO summary judgment of infringement as to claims 8 and 11, see Summary Judgment Opinion 42, and the parties stipulated for the purposes of trial that the Devices also infringed the remaining asserted claims, see Stipulation ¶ 6, ECF No. 165. The jury was therefore asked to determine: whether the asserted claims were invalid because they were anticipated by prior art; whether the infringement was willful; and the extent of damages. The jury found that at least one of the asserted claims was not invalid and that the infringement was willful, and awarded compensatory damages of $2,183,562.40. See Jury Verdict, ECF No. 180. The Court subsequently granted plaintiff's motion to enhance the damages by 30% based upon the finding of willfulness. See Memorandum Order dated June 3, 2019 ("Enhanced Damages Order"), ECF No. 204.

Defendants now renew their motions for judgment as a matter of law on several grounds and seek a new trial on several others. For the reasons given below, those motions are denied. Plaintiff moves to supplement damages based on data not presented to the jury; seeks a permanent injunction; and seeks an award of attorney's fees. Plaintiff's motions to supplement damages and for a permanent injunction are granted. Plaintiff's motion for attorney's fees is denied.

I. Defendants' Motions

A. Motion for Judgment as a Matter of Law

uCloudlink moves, pursuant to Fed. R. Civ. P. 50(b), for judgment as a matter of law on several issues. The Federal Circuit reviews such motions "under regional circuit law." Wordtech Systems, Inc. v. Integrated Networks Solutions, Inc., 609 F.3d 1308, 1312 (Fed. Cir. 2010). In the Second Circuit, "[a] Rule 50 motion must be denied unless the evidence is such that, without weighing the credibility of the witnesses or otherwise considering the weight of the evidence, there can be but one conclusion as to the verdict that reasonable [persons] could have reached." Matusick v. Erie County Water Auth., 757 F.3d 31, 52 (2d Cir. 2014) (quoting Cross v. N.Y.C. Transit Auth., 417 F.3d 241, 248 (2d Cir. 2005) ). The evidence must be taken in the light most favorable to the non-moving party. Tolbert v. Queens College, 242 F.3d 58, 70 (2d Cir. 2001). "A movant's burden in securing Rule 50 relief is particularly heavy after the jury has deliberated in the case and actually returned its verdict." Cross, 417 F.3d at 248. Only "a complete absence of evidence" will justify granting the motion under such circumstances. Id. (quoting Song v. Ives Labs., Inc., 957 F.2d 1041, 1046 (2d Cir. 1992) ).

1. Willfulness

uCloudlink contends that there is insufficient evidence to support the jury's verdict of willful infringement. The Court previously awarded SIMO enhanced damages of 30% based on this finding, but explicitly reserved the question of whether there was sufficient evidence to support it. See Enhanced Damages Order 3 n.3. With the issue now squarely presented, the Court concludes that the jury's finding of willfulness was supported by sufficient evidence.²

uCloudlink argues that SIMO adduced no evidence that uCloudlink knew of the '689 Patent prior to August 13, 2018, so any infringement prior to that date could not have been willful. Def. Mem. Supp. Mot. JML 3-4, ECF No. 221. "Knowledge of the patent alleged to be willfully infringed continues to be a prerequisite to enhanced damages." WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016). Contrary to uCloudlink's claim, however, the Court concludes that there was circumstantial evidence that, while not overwhelming, was sufficient for the jury to reasonably infer that uCloudlink had knowledge of the '689 Patent earlier than August of 2018. First, there was testimony suggesting that a uCloudlink employee was at least familiar with the '735 Patent as of 2016. The '735 Patent is the parent to the '689 Patent, and the application that would become the '689 Patent was pending as of 2016.³ Second, uCloudlink's internal architecture documents bear notable similarities to both the '689 Patent and to SIMO's internal architecture documents. Third, Wang Bin was hired from Skyroam by uCloudlink in 2013, and he concededly took several confidential Skyroam files with him (although it is disputed whether uCloudlink knew of or made use of those files).

To be sure, none of this is direct evidence that uCloudlink knew of the '689 Patent. But it is evidence from which a jury could reasonably infer that uCloudlink had such knowledge. "Evidence of pre-suit knowledge of a patent can be circumstantial." Kaneka Corp. v. SKC Kolon PI, Inc., 198 F. Supp. 3d 1089, 1107 (C.D. Cal. 2016). uCloudlink's arguments to the contrary largely rest on unpersuasive interpretations of law. For example, uCloudlink argues that a finding of willfulness cannot be based on conduct prior to, at the earliest, August 15, 2017, when the '689 Patent issued. Def. Mem. Supp. Mot. JML 4. But the Federal Circuit has seriously called that argument into doubt, albeit in an unpublished opinion. See WCM Indus., Inc. v. IPS Corp., 721 F. App'x 959, 970 n.4 (Fed. Cir. 2018) (observing that patent applications are now published, such that possible infringers can discover what claims a patent will likely cover, but not deciding whether prior precedent holding that such applications were irrelevant should be overruled); see also id. at 970 ("[H]ere WCM provided sufficient evidence for a reasonable jury to conclude that IPS did know of WCM's patents as they issued, if not earlier.") (second emphasis added). Because the willfulness determination "looks to the totality of the circumstances presented in the case," id., it would be artificial to ignore the reasonable possibility that uCloudlink might have learned of the application that would become the '689 Patent.

Additionally, the Court notes that uCloudlink did not introduce any evidence establishing when it learned of the '689 Patent. While uCloudlink was, of course, not obligated to do so, as the burden to prove knowledge and willfulness was plaintiff's, the absence of countervailing evidence is relevant to the determination of whether the jury's verdict was permissible. The jury's inference of knowledge arguably might not have been reasonable had uCloudlink adduced evidence establishing when, in fact, it learned of the patent. But without such evidence, the jury was not forbidden from concluding, based on all of the circumstances, that uCloudlink in fact did know of the '689 Patent, at or before the time of its issuance.

Similarly, uCloudlink argues that its knowledge of the '735 Patent cannot support an inference that it knew of the '689 Patent. uCloudlink principally relies on Vasudevan Software, Inc. v. TIBCO Software Inc., which concluded that "[t]he requisite knowledge of the patent allegedly infringed simply cannot be inferred from mere knowledge of other patents, even if somewhat similar." No. C 11-06638 RS, 2012 WL 1831543, at *3 (N.D. Cal. May 18, 2012). As a decision from a court of coordinate jurisdiction, Vasudevan is not binding on this Court. Moreover, Vasudevan predates the Supreme Court's decision in Halo Elec., Inc. v. Pulse Elec., Inc., which "eschew[ed] any rigid formula" for determining willfulness. ––– U.S. ––––, 136 S. Ct. 1923, 1934, 195 L.Ed.2d 278 (2016). In that vein, the Court agrees with the court in Dentsply Sirona, Inc. v. Edge Endo, LLC, Civ. No. 17-1041 WJ/SCY, 2019 WL 1517584, at *4 (D.N.M. Apr. 8, 2019), that subsequent cases, "which were decided with the benefit of Halo's guidance, are more persuasive than Vasudevan." See also SiOnyx, LLC v. Hamamatsu Photonics K.K., ...