Sionyx LLC v. Hamamatsu Photonics K.K.

• Decision Date: 07 December 2020
• Docket Number: 2019-2359, 2020-1217
• Parties: SIONYX LLC, President and Fellows of Harvard College, Plaintiffs-Cross-Appellants v. HAMAMATSU PHOTONICS K.K., Hamamatsu Corporation, Defendants-Appellants Does 1-10, Defendant
• Court: U.S. Court of Appeals — Federal Circuit

981 F.3d 1339

SIONYX LLC, President and Fellows of Harvard College, Plaintiffs-Cross-Appellants

v. HAMAMATSU PHOTONICS K.K., Hamamatsu Corporation, Defendants-AppellantsDoes 1-10, Defendant

2019-2359, 2020-1217

United States Court of Appeals, Federal Circuit.

Decided: December 7, 2020

William D. Belanger, Troutman Pepper Hamilton Sanders LLP, Boston, MA, argued for plaintiffs-cross-appellants. Also represented by Anthony H. Cataldo, Gwendolyn Tawresey.

John David Simmons, Panitch Schwarze Belisario & Nadel LLP, Philadelphia, PA, argued for defendants-appellants. Also represented by Keith Aaron Jones, Stephen Emerson Murray ; Koichiro Minamino, Minamino Law Office, PLLC, Washington, DC.

Before Lourie, Reyna, and Wallach, Circuit Judges.

Lourie, Circuit Judge.

Hamamatsu Photonics K.K. and Hamamatsu Corporation ("Hamamatsu") appeal from the judgment of the U.S. District Court for the District of Massachusetts after a jury verdict that (1) Hamamatsu breached its Non-Disclosure Agreement ("NDA") with SiOnyx LLC ("SiOnyx"); (2) Hamamatsu willfully infringed U.S. Patent 8,080,467 ("the ’467 patent") ; (3) SiOnyx is entitled to $796,469 in damages and $1,091,481 of pre-judgment interest for breach of the NDA; (4) SiOnyx is entitled to $580,640 in damages and $660,536 of pre-judgment interest for unjust enrichment; (5) SiOnyx is entitled to post-judgment interest at the statutory rate for its breach of contract and unjust enrichment claims; (6) Dr. James Carey is a co-inventor of U.S. Patents 9,614,109 ; 9,293,499 ; 9,190,551 ; 8,994,135 ; 8,916,945 ; 8,884,226 ; 8,742,528 ; 8,629,485 ; and 8,564,087 (collectively "the Disputed U.S. Patents"); (7) SiOnyx is entitled to sole ownership of the Disputed U.S. Patents; (8) SiOnyx is entitled to an injunction prohibiting Hamamatsu from practicing the Disputed U.S. Patents for breach of the NDA; and (9) SiOnyx is entitled to an injunction prohibiting Hamamatsu from practicing the ’467 patent for infringement. See SiOnyx, LLC v. Hamamatsu Photonics K.K. , No. 1:15-cv-13488-FDS (D. Mass. Sept. 24, 2019), ECF No. 834.

SiOnyx cross-appeals from the district court's decisions (1) denying SiOnyx sole ownership of the Japanese patent applications from which the Disputed U.S. Patents claim priority and all other foreign patents claiming priority from the Japanese applications (collectively "the Disputed Foreign Patents"); and (2) denying SiOnyx's motion for fees under 35 U.S.C. § 285.

Because the district court erred in failing to grant SiOnyx sole ownership of the Disputed Foreign Patents, we reverse the district court's denial of SiOnyx's motion to compel Hamamatsu to transfer ownership of those patents to SiOnyx. We decline to address the issue of willfulness and affirm the district court's judgment in all other respects.

BACKGROUND

This appeal arises from research conducted at Harvard University by Professor Eric Mazur and his then-student James Carey. In 1998, Mazur discovered a process for creating "black silicon" by irradiating a silicon surface with ultra-short laser pulses. In addition to turning the silicon black, the process creates a textured surface, and the resulting black silicon has electronic properties different from traditional silicon. After discovering the process for making the material, Mazur worked with his students, including Carey, to study its properties and potential uses. Based on their work, Mazur and Carey filed U.S. Provisional Patent Application 60/293,590 on May 25, 2001, from which several patents eventually issued, including the ’467 patent.

I. THE PARTIES ’ RELATIONSHIP

Around 2005, Mazur and Carey founded SiOnyx to further develop and commercialize black silicon. Thereafter, SiOnyx sought to establish relationships with companies that may be interested in its technology. In November 2006, SiOnyx met with Hamamatsu, which produces, among other things, silicon-based photodetector devices. SiOnyx gave a brief presentation on the discovery of black silicon and, on January 11, 2007, SiOnyx and Hamamatsu entered into the NDA to allow the parties to share confidential information relating to "evaluating applications and joint[ ] development opportunities of pulsed laser process doped photonic devices." J.A. 2881.

The NDA includes several provisions that are relevant to this appeal. First, the NDA provides that a party receiving confidential information (as defined in the agreement) shall maintain the information in strict confidence for seven years after the expiration of the agreement, after which the receiving party may use or disclose the confidential information. J.A. 2881–82 ¶¶ 2, 8. Second, the agreement provides that a party receiving confidential information acknowledges that the disclosing party claims ownership of the information and all patent rights "in, or arising from" the information. J.A. 2882 ¶ 5. Finally, the agreement requires a party receiving confidential information to return all confidential information within 30 days of the termination of the agreement. Id . ¶ 7.

While the NDA was in effect, SiOnyx provided to Hamamatsu proposed architectures and a manufacturing process for a photodetector device, which were marked as confidential. Hamamatsu and SiOnyx worked together to produce experimental devices using SiOnyx's process. Hamamatsu produced silicon wafers as it would to manufacture its traditional photodiodes, which were then sent to SiOnyx to perform SiOnyx's laser-texturing process. The textured wafers were then returned to Hamamatsu to be cut, packaged, and tested. The sample devices produced favorable results, but Hamamatsu represented that it wished to develop its products alone "without further reference to proprietary information of SiOnyx," and the NDA expired on January 12, 2008. J.A. 3013. After expiration of the NDA, SiOnyx did not request that Hamamatsu return any confidential information received from SiOnyx, and Hamamatsu did not do so.

After the NDA was terminated, Hamamatsu continued to develop new photodetector devices. On February 1, 2008, as part of its work developing a new commercial photodiode, Hamamatsu prepared an internal development report that referred to the prototype work done with SiOnyx. On February 9, 2009, Hamamatsu emailed SiOnyx to inform SiOnyx that Hamamatsu intended to introduce a new photodiode at its Photon Fair exhibition that included a "black silicon surface fabricated by laser." J.A. 3011. The email included a cross-sectional diagram of the structure of the photodiode and a performance curve. Hamamatsu stated that it did not believe that the new product infringed SiOnyx's intellectual property or breached Hamamatsu's confidentiality obligations. At the time, SiOnyx did not consider the product to be meaningfully different from the devices the parties developed together in 2007.

On February 24, 2009, Hamamatsu filed the first of a series of Japanese patent applications relating to photodetector devices. Hamamatsu subsequently filed patent applications in several countries that claimed priority from these applications, including the U.S. applications that became the Disputed U.S. Patents. In 2010, Hamamatsu began releasing the accused products, which include laser-textured photodiodes, avalanche photodiodes, and charge-coupled device (CCD) sensors. SiOnyx began selling its own photodetector products by 2013, and in 2014 one of SiOnyx's customers alerted SiOnyx to Hamamatsu's patents. SiOnyx met with Hamamatsu to discuss ownership of the Disputed U.S. and Foreign Patents, but the parties did not reach an agreement.

II. DISTRICT COURT PROCEEDINGS

Having failed to reach an agreement with Hamamatsu regarding ownership of the patents, SiOnyx sued Hamamatsu in the District of Massachusetts. SiOnyx brought four claims: (1) breach of contract; (2) unjust enrichment; (3) infringement of the ’467 patent ; and (4) change of inventorship of the Disputed U.S. Patents. The case was tried to a jury on the issues of infringement, willfulness, invalidity, inventorship, breach of contract, unjust enrichment, and damages. After a two-week trial, the jury returned a verdict in favor of SiOnyx. Specifically, the jury found that (1) Hamamatsu first breached the NDA on February 1, 2008, when it referred to SiOnyx's confidential information in an internal report, and awarding $796,469 in damages; (2) Hamamatsu was unjustly enriched beginning January 10, 2010, and awarding $580,640 in damages; (3) SiOnyx's breach of contract and unjust enrichment claims were not barred by the statute of limitations; (4) Carey is a co-inventor of the Disputed U.S. Patents; and (5) the asserted claims of the ’467 patent are valid and willfully infringed by Hamamatsu beginning December 20, 2011, but awarding $0 in damages.

The parties filed numerous post-trial motions. Hamamatsu moved for judgment as a matter of law that (1) SiOnyx's breach of contract and unjust enrichment claims were barred by the statute of limitations; (2) that SiOnyx is not entitled to damages after the NDA's confidentiality period ended on January 11, 2015; and (3) that Hamamatsu did not willfully infringe the ’467 patent. The district court denied Hamamatsu's motion. SiOnyx filed post-trial motions seeking (1) sole ownership of the Disputed U.S. Patents; (2) sole ownership of the Disputed Foreign Patents; (3) an injunction for breach of the NDA prohibiting Hamamatsu from "making, using, offering for sale, selling, or importing the accused products and/or products practicing the [Disputed U.S. Patents]"; (4) an injunction for patent infringement prohibiting Hamamatsu from "making, using, offering for sale, selling, or importing the accused products" practicing the ’467 patent ; (5) pre- and post-judgment interest on damages awarded for breach of contract; (6) pre-judgment interest on damages awarded for unjust enrichment; and (7) fees under 35 U.S.C. § 285. The district court granted SiOnyx sole ownership of the Disputed U.S. Patents, injunctions on accused products...