Opinion
Civil Action No. 04-2416.
September 8, 2004
MEMORANDUM AND ORDER
This case involves allegations of patent infringement relating to twelve patents for various aspects of computer hardware, including "read channel devices." Presently before this Court is Defendant Agere Systems Inc.'s ("Agere") motion for judgment on the pleadings and summary judgment to preclude pre-suit damages for patent infringement based on Plaintiff Broadcom Corporation's ("Broadcom") alleged failure to plead and prove compliance with the marking requirements of 35 U.S.C. § 287. Agere also seeks to limit the scope of historical discovery on this basis. For the reasons set forth below, this Court denies Defendant's motion without prejudice.
I. BACKGROUND
On January 22, 2004, Broadcom contracted to purchase a patent portfolio from Cirrus Logic, Inc. ("Cirrus") through a Patent Purchase Agreement. (Def.'s Mot. for Summ. J. Ex. 2.) On February 10, 2004, Broadcom filed the instant action against Agere for infringing seven of the portfolio patents. Agere's present motion concerns six of the seven patents at issue in Broadcom's complaint. II. STANDARD OF REVIEW
This action was transferred from the Western District of Wisconsin.
U.S. Patent Nos. 5,701,314 (the "`314 patent"), 5,771,127 (the "`127 patent"), 5,835,295 (the "`295 patent"), 5,926,490 (the "`490 patent"), 5,978,162 (the "`162 patent"), and 5,991,107 (the "`107 patent").
As both parties rely on material outside the pleadings, the Court analyzes this motion according to the standard for summary judgment set forth in Federal Rule of Civil Procedure 56. See FED. R. CIV. P. 12(c) ("If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56."); see also 5C CHARLES ALAN WRIGHT ARTHURR. MILLER, FEDERALPRACTICE AND PROCEDURE § 1369 (3d ed. 2004) (noting that standard under Rule 12(c) is identical to standard under Rule 56(c)).
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). The moving party bears the initial burden of identifying those portions of the record that it believes illustrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If the moving party makes such a demonstration, then the burden shifts to the nonmovant, who must offer evidence that establishes a genuine issue of material fact that should proceed to trial. See id. at 324; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986). "Such affirmative evidence — regardless of whether it is direct or circumstantial — must amount to more than a scintilla, but may amount to less (in the evaluation of the court) than a preponderance." Williams v. Borough of West Chester, 891 F.2d 458, 460-61 (3d Cir. 1989).
When evaluating a motion brought under Rule 56(c), a court must view the evidence in a light most favorable to the nonmovant and draw all reasonable inferences in the nonmovant's favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); see also Pollock v. Am. Tel. Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986). A court must, however, avoid making credibility determinations or weighing the evidence in ruling on summary judgment. See Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 150 (2000); see also Goodman v. Pa. Tpk. Comm'n, 293 F.3d 655, 665 (3d Cir. 2002).
III. DISCUSSION
Agere argues that Broadcom has failed to plead and prove compliance with 35 U.S.C. § 287, which limits damages if patentees do not to mark the patented articles they make or sell. (Def.'s Mot. for Summ. J. at 6.) Therefore, according to Agere, Broadcom must be estopped from asserting any claim for damages prior to the institution of this suit. ( Id.) Broadcom replies that § 287's requirements do not apply to this action, because Cirrus, Broadcom's predecessor, exited the read channel business in September 2001, and therefore had no products to mark after that date. (Pl.'s Mot. in Opp'n to Summ. J. at 4.) Moreover, Broadcom states, because the Court has not yet construed the claims of the six patents at issue, it is unclear whether the goods Cirrus sold "embodied" the patents, and thus summary judgment would be premature. ( Id. at 14.)
35 U.S.C. § 287(a) limits recovery of damages for patent infringement if the patentee does not provide sufficient notice that its "patented article" is, indeed, patented. The statute provides that
(a) Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word "patent" or the abbreviation "pat.", together with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.35 U.S.C. § 287(a) (2004). Hence, notice can be either constructive, by marking the patented article or packaging, or actual, by notifying the infringer. Wine Ry. Appliance Co. v. Enter. Ry. Equip. Co., 297 U.S. 528, 530 (1936); Gart v. Logitech, 254 F.3d 1334, 1345 (Fed. Cir. 2001). Section 287 was enacted to remedy "the problem of having unmarked products in the marketplace." Am. Med. Sys. v. Med. Eng'g Corp., 6 F.3d 1523, 1537 (Fed. Cir. 1993). By linking "failure to mark with disability to collect damages," the statute "encourage[s] the patentee to give notice to the public of the patent," and prevents innocent infringement. Id. at 1537-38. The patentee carries the burden of both pleading and proving compliance with § 287's marking requirements. See Maxwell v. J. Baker, Inc., 86 F.3d 1098, 1111 (Fed. Cir. 1996) ("As the patentee, Maxwell had the burden of pleading and proving at trial that she complied with the statutory requirements.").
Section 287, a statute concerned with marking patented articles, logically does not apply if neither the patentee "nor another with its consent has ever manufactured or vended an article under the infringed patent." Wine Ry., 297 U.S. at 529; see also Texas Digital Sys., Inc. v. Telegenix, Inc., 308 F.3d 1193, 1220 (Fed. Cir. 2002) (because tangible articles, capable of being marked, are the touchstone of § 287's applicability, "[t]he recovery of damages is not limited where there is no failure to mark, i.e. . . . where there are no products to mark.").
To preclude pre-suit damages, Agere must demonstrate there is no genuine dispute that: (1) Cirrus's read channel products were "patented articles" within the meaning of 35 U.S.C. § 287(a); (2) the "patented articles" were made, sold, or offered for sale by Cirrus or an agent or licensee within the United States and were not marked; and (3) Agere was not actually notified of any infringement before the instant suit was filed.
There is no genuine issue for trial on the second question of fact. The undisputed evidence clearly demonstrates that Cirrus made and sold read channel devices within the United States. (Def.'s Mot. for Summ. J. Exs. 9-10, Ex. 13 at 00038, Exs. 22-36) (Cirrus product descriptions and Annual Reports); (Pl.'s Mot. in Opp'n to Summ. J. at 4) (Broadcom admission that "Cirrus is a former competitor of Agere in the read channel business."). Moreover, Broadcom does not contest Cirrus's Responses to Subpoenas in which Cirrus states that it "does not engage in patent marking" and "does not have a policy on patent marking." (Def.'s Mot. for Summ. J. Ex. 7 at 27.)
Likewise, no genuine issue remains for the third question of fact. Agere has presented evidence that Agere was never accused of infringing the patents at issue until commencement of this suit. (deBlasi Decl. ¶ 3.) In response, Broadcom merely postulates that Agere may have received notice of infringement from certain joint development agreements between Cirrus and Lucent, Agere's predecessor. (Pl.'s Mot. in Opp'n to Summ. J. at 16-17, n. 13.) Such vague assertions do not create a genuine dispute of material fact. See Celotex, 477 U.S. at 324; see also Int'l Raw Materials, Ltd. v. Stouffer Chem. Co., 978 F.2d 1318, 1328 n. 13 (3d Cir. 1992). Moreover, in the Patent Purchase Agreement executed between Cirrus and Broadcom in January 2004, Broadcom contracted for Cirrus to disclose "any documents and material or information in the possession or control of Seller, its counsel or its agents relating to . . . (E) actual or potential infringement, including any related . . . correspondence." (Def.'s Mot. for Summ. J. Ex. 2 at 2, 10.) Broadcom has not produced any such documentation related to the instant patents.
A genuine issue of fact remains, however, on the first material question of fact: whether the read channel products Cirrus sold were "patented articles" — that is, whether the '314, '127, '295, '490, '162, and '107 patents were embodied in Cirrus's read channel products. See Laitram Corp. v. Hewlett-Packard Co., Inc., 806 F. Supp. 1294, 1296 (E.D. La. 1992) ("Whether an article is covered by a particular patent is a question that must be proven; it cannot be assumed by this Court.").
The determination of whether an article "embodies" a patent is an analogous inquiry to that of whether an article infringes a patent. See Laitram, 806 F. Supp. at 1296 (holding that the "best proof" of whether an article is covered by a particular patent "is to ask if the article were sold by someone other than the patentee, would it directly and literally infringe the independent claims of the patent."); Clancy Sys. Int'l, Inc. v. Symbol Techs., Inc., 960 F. Supp 1170, 1173 (D. Colo. 1997) (stating that "[o]ne test for determining whether a product is a "patented article" under section 287(a) is to ask whether the product would infringe the patent if sold by an unauthorized party."). Both inquiries look to the relationship between the patent and the article in question. The sole difference is the identity of the article's manufacturer — in infringement analysis, the manufacturer does not own the patent, while in the "embodiment" analysis, the manufacturer does own the patent.
An infringement determination, and by extension an embodiment determination, "requires a two step analysis." Gart v. Logitech, 254 F.3d 1334, 1339 (Fed. Cir. 2001). The first step is to properly construe the patent claim to determine its scope and meaning. Id.; see also Carroll Touch, Inc. v. Electro Mech. Sys., Inc., 15 F.3d 1573, 1576 (Fed. Cir. 1993). Once the claim is properly construed, it must be compared to the article in question. See Gart, 254 F.3d at 1339; see also Markman, 517 U.S. at 372; Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456 (Fed. Cir. 1998). Thus, the determination of embodiment is a question of fact that is properly decided on summary judgment only "when no reasonable jury could find that every limitation recited in the properly construed claim either is or is not found in the accused device either literally or under the doctrine of equivalents." Gart, 254 F.3d at 1339; see also Bai v. L L Wings, Inc., 160 F.3d 1350, 1353. This situation arises when the parties do not dispute any relevant facts regarding the article in question. See Athletic Alternatives, Inc. v. Prince Mfg., Inc., 73 F.3d 1573 (Fed. Cir. 1996). A court must be mindful, though, that "the task of claim construction requires us to examine all the relevant sources of meaning in the patent record with great care, the better to guarantee that we determine the claim's true meaning." Id., see also D.M.I., Inc. v. Deere Co., 755 F.2d 1570, 1573 (Fed. Cir. 1985).
In this case, the patent record is insufficient for this Court to determine whether Cirrus's read channel products were "patented articles" within the meaning of 35 U.S.C. § 287, i.e., whether they "embodied" the claims of the patents at issue, and thus whether the requirements of § 287 apply to this case. The embodiment question, which is dispositive of the instant motion, can not be answered until this Court construes the patent claims according to the Markman process. Until the Markman process is complete, a genuine issue of material fact remains regarding what, exactly, is covered by the patents at issue. See Laitram, 806 F. Supp. at 1295-96 (denying similar motion pending construction of patent claims); cf. Loral Fairchild Corp. v. Victor Co. of Japan Ltd., 906 F. Supp. 813 (E.D.N.Y. 1995) (granting motion where patentee consistently asserted throughout the case that the products at issue infringed their patent until faced with marking argument on summary judgment). Accordingly, Agere's motion is denied as premature, however, it may raise these issues again following the Court's Markman ruling.
Laitram presented facts similar to those here. Hewlett-Packard, accused of infringing The Laitram Corporation's patent in a certain software package, alleged that Laitram sold about 100 units of the package without complying with the marking requirements of § 287. Laitram, 806 F. Supp. at 1295. Hewlett-Packard thus moved for summary judgment on the issue of presuit damages. Id. at 1295-96. The District Court denied summary judgment because the Court had not yet constructed the claims of the patents at issue, and, as such, Hewlett-Packard had "failed to prove that the [software packages sold] were `patented articles' within the meaning of § 287." Laitram, 806 F. Supp at 1296. Similarly, here, Agere has failed to prove that the read channel products Cirrus sold between 1998 and 2001 were "patented articles" within the meaning of the '314, '127, '295, '490, '162, and '107 patents.
Furthermore, as this Court has denied Agere's motion to limit pre-suit damages, Agere's request to limit the scope of historical discovery must also be denied.
IV. CONCLUSION
For the foregoing reasons, Agere's motion for summary judgment and judgment on the pleadings to limit Broadcom's claim for damages based on failure to comply with 35 U.S.C. § 287 and to limit the scope of historical discovery is denied without prejudice. An appropriate Order follows.
ORDER
AND NOW, this 8th day of September, 2004, upon consideration of Defendant Agere Systems Inc.'s Motion for Summary Judgment and Judgment on the Pleadings and to Limit the Scope of Historical Discovery, Plaintiff Broadcom Corporation's Response, and for the foregoing reasons, it is hereby ORDERED that:
1. Agere Systems Inc.'s Motion for Summary Judgment, Judgment on the Pleadings, and to Limit the Scope of Historical Discovery (Document No. 25) is DENIED without prejudice.
2. Agere Systems's Motion for Leave to File a Reply Brief is DENIED as moot.