Sony Electronics v. Soundview Technologies
| Decision Date | 14 June 2001 |
| Docket Number | No. 3:00CV754(JBA).,3:00CV754(JBA). |
| Citation | 157 F.Supp.2d 190 |
| Court | Connecticut Supreme Court |
| Parties | SONY ELECTRONICS, INC. Consumer Electronics Association; Electronic Industries, Inc., Plaintiffs, v. SOUNDVIEW TECHNOLOGIES, INC., Defendant. Soundview Technologies, Inc., Counterclaim Plaintiff, v. Sony Corporation of America, Et al. Counterclaim Defendants. |
Gale R. Peterson, San Antonio, TX, pro se.
Jacqueline D. Bucar, S. Peter Sachner, Timothy P. Jensen, Tyler, Cooper & Alcorn, New Haven, CT, Richard L. DeLucia, Richard S. Gresalfi, Elizabeth A. Gardner, Kenyon & Kenyon, New York, NY, Richard M. Steuer, Kaye, Scholer, Fierman, Hays & Handler, New York, NY, Gary M. Hoffman, Dickstein, Shapiro & Morin, Washington, DC, Stephen P. Sachner, Hitt, Sachner & Miele, Cheshire, CT, Jaime A. Siegel, Park Ridge, NJ, for Sony Electronics, Inc., Sony Corp. of America.
Jacqueline D. Bucar, S. Peter Sachner, Timothy P. Jensen, Tyler, Cooper & Alcorn, New Haven, CT, Gary M. Hoffman, Dickstein, Shapiro & Morin, Washington, DC, Stephen P. Sachner, Hitt, Sachner & Miele, Cheshire, CT, for Consumer Electronics Ass'n, Electronic Industries Alliance.
Amy S. Owen, Miles & Stockbridge, McLean, VA, for Soundview Tech, Inc.
Garrard Russ Beeney, Jeffrey Scott, Sullivan & Cromwell, New York, NY, John M. DiMatteo, Michael Stacchini, Neal Feivelson, Patterson, Belknap, Webb & Tyler, New York, NY, James Sicilian, Eric L. Sussman, Day, Berry & Howard, Hartford, CT, for Philips Electronic NA Corp.
Joseph L. Clasen, Robinson & Cole, Stamford, CT, John J. Bogdanski, David S. Monastersky, Howd & Ludorf, Hartford, CT, John-Henry McKim Steele, Kenneth A. Votre, Votre & Associates, New Haven, CT, Amy S. Owen, Miles & Stockbridge, McLean, VA, Raymond P. Niro, Paul C. Gibbons, John C. Janka, Robert P. Greenspoon, Niro, Scavone, Haller & Niro, Chicago, IL, Eugene M. Cummings, David M. Mundt, Cook, Alex, McFarron, Manzo, Cummings & Mehler, Chicago, IL, for Soundview Tech, Inc.
Richard M. Steuer, Kaye, Scholer, Fierman, Hays & Handler, New York, NY, Michael S. Culver, Oliff & Berridge, Alexandria, VA, for Sony Corp. of America.
John E. Coffey, Reed, Smith, Hazel & Thomas, Falls Church, VA, for Philips Electronics NA Corp.
Joseph L. Clasen, David J. Burke, Brian E. Moran, James M. Ruel, Robinson & Cole, Stamford, CT, Vincent J. Belusko, Robert S. McArthur, Eric Shih, Morrison & Foerster, Los Angeles, CA, Les J. Weinstein, Squire, Sanders, Dempsey, Los Angeles, CA, for Mitsubishi Digital Electronics America, Inc.
William M. Bloss, Jacobs, Grudberg, Belt & Dow., P.C., New Haven, CT, Joseph
L. Clasen, James M. Ruel, Robinson & Cole, Stamford, CT, Vincent J. Belusko, Robert S. McArthur, Eric Shih, Morrison & Foerster, Los Angeles, CA, Les J. Weinstein, Squire, Sanders, Dempsey, Los Angeles, CA, for Mitsubishi Electronics America, Inc.
Richard J. Buturla, Robert L. Berchem, Berchem, Moses & Devlin, P.C., Milford, CT, Steven M. Pesner, Robert A. Johnson, Mira Helms Martinez, Akin, Gump, Strauss, Hauer & Feld, New York, NY, Adam Sheeh, Akin, Gump, Strauss, Hauer & Feld, Austin, TX, for Samsung Electronics America, Inc.
Glenn M. Cunningham, Patrick M. Fahey, Shipman & Goodwin, Hartford, CT, Thomas J. Nolan, John S. Schuster, Dale J. Giali, Ben M. Davidosn, Keri R. Curtis, Julie S. Gabler, Andrew Eliseev, Howrey, Simon, Arnold & White, Los Angeles, CA, Lewis G. Schwartz, Stamford, CT, for Pioneer Electronics (USA) Inc.
William M. Bloss, Jacobs, Grudberg, Belt & Dow., P.C., New Haven, CT, Alinor Clemans Sterling, Jacobs, Grudberg, Belt & Dow, P.C., new Haven, CT, Thomas G. Gallatin, jr., Latham & Watkins, New York, NY, Michael J. Shea, Larry S. Nixon, Jeffry H. Nelson, Nixon & Vanderhye, Arlington, VA, for Toshiba America Consumer Products, Inc.
William M. Bloss, Jacobs, Grudberg, Belt & Dow., P.C., New Haven, CT, Alinor Clemans Sterling, Robert W. Adams, Mickey Gill, Nixon & Vanderhye, Arlingtin, VA, for Sharp Electronics Corp.
William M. Bloss, Jacobs, Grudberg, Belt & Dow., P.C., New Haven, CT, Morton Amster, Michael J. Berger, Joseph M. Casino, John S. Economou, Abraham Kasdan, Amster, Rothstein & Ebenstein, New York, NY, for Matsushita Elec. Corp. of America, JVC Americas Corp.
William M. Bloss, Jacobs, Grudberg, Belt & Dow., P.C., New Haven, CT, Alinor Clemans Sterling, Nixon & Vanderhye, Arlingtin, VA, William J. Speranza, Wiggin & Dana, Stamford, CT, Kathleen McGillis Haley, Carl W. Schwarz, Michael D. Switzer, McDermott, Will & Emery, Washington, DC, for Hitachi America Ltd.
In this consolidated case, counterclaim plaintiff Soundview Technologies (Soundview) seeks to recover against eleven television manufacturers and the manufacturers' trade association, Electronic Industries Alliance (EIA), for alleged patent infringement and anti-trust violations resulting from the manufacture and sale of television sets equipped with the V-chip technology that Soundview claims infringes its '584 patent, for alleged inducement of that infringement by the association, and for an alleged conspiracy by the manufacturers and the association to refuse to license Soundview's patent. All of the manufacturer-counterclaim defendants (manufacturers) have filed motions to dismiss and/or motions for summary judgment, and the industry association seeks to dismiss the claim that it induced patent infringement. Doc. # 154. This Ruling addresses only the industry association's motion.
The "V-chip" is a device that enables parents to program television sets to block the display of violent or sexually explicit programming, and is mandated by the FCC to be included in all 13-inch or larger size television sets manufactured after January 1, 2000, with standards for the technology designed by the industry. See 47 C.F.R. § 15.120(d). EIA is a trade association headquartered in Arlington Virginia that "provides member companies with an information and assistance network to enhance their own competitive position in the marketplace" by finding "strength in numbers" to protect its member companies' "business interests." Counterclaim ¶ 21 (quoting EIA website). As part of its mission, EIA formed the R4.3 Television Data Systems Subcommittee to discuss V-chip implementation. Counterclaim ¶ 22. This subcommittee investigated patents "which might be infringed by those manufacturers who build equipment" in compliance with the regulation, which itself incorporates the EIA-designed standard (known as EIA-608) for how the V-chip must work. Id. at ¶ 23. EIA participated in a number of meetings with other counterclaim defendant-manufacturers, and informed them that a patent search had been conducted, and that "some patents were found to be essential to the standard," six of which "could pose a problem." Id. at ¶ 24. A listing of these patents was later provided to members, with Soundview's '584 patent included "as number one on EIA's list of the six patents identified as `most relevant.'" Id. at ¶ 25. A cover memorandum to this list concluded that "[t]hose patents in the `most relevant' category have, generally speaking, broader claims, which are more easily infringed." Id. at ¶ 73.
EIA's vice president of engineering, George Hanover, also prepared a memorandum for its members analyzing the possibility of enlisting the aid of the FCC in its efforts to "avoid unreasonable royalty demands" on its members, id. at ¶ 30, and advised its members that they could seek to extend the effective dates of the regulation or "explore the FCC's legal ability to preempt the intellectual property rights of holders unwilling to license the use of their patents on fair and reasonable terms...." Id. This same Hanover memorandum also noted that any such attempts would "likely encounter serious legal and jurisdictional problems...." Id. (quoting Hanover memo). EIA then agreed to "recalculate" the list of potentially applicable content advisory patents to its members, in order to ensure that its members all participated in the analysis of patents that might be "essential" to producing the required technology. Id. at ¶ 31.
In November of 1998, Soundview officially notified EIA of its plans to license its patent to manufacturers "on reasonable terms on a non-exclusive, non-discriminatory basis." EIA did not respond to the letter, and despite Soundview's offer, "no television set manufacturers have taken licenses." Id. at ¶ 32. Allegedly prompted by Soundview's license offer and Hanover's conclusion that the FCC would be unable to mandate compulsory licensing, EIA circulated another memo, explaining steps the association was taking to collect information about the prices being requested for patent licenses. The memo, which took the form of minutes from a February 17, 1999 meeting, explained that:
EIA, at the request of some of its members, is in the process of evaluating these patents and assessing all of the options available to television manufacturers ... if any members have nonconfidential information relating to the patent issues that they would like the EIA to be aware of in connection with Era's (sic) study of the situation (such as patents called to their attention, offered license terms, relevant prior art, etc.) please provide that information to George Hanover.
Id. at ¶ 33. The meeting minutes also make statements concerning the "revenue streams" of member companies, and also indicate that EIA would create and distribute "content advisory tapes" that could be used by the member companies "in testing the infringing products." Id. at ¶ 75. EIA and the manufacturers also discussed Soundview at the February 17 meeting; the counterclaim alleges that "details of the discussion are not yet known, but they were of such nature that Soundview's consultant Bernard Lecher reported that he understood the discussion would not have taken place if the participants ... had known of Mr. Lecher's retention by Soundview." This consultant...
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