Opinion
Civil Action No. 1:18-cv-1564 (AJT/TCB)
10-09-2019
I PEE HOLDING, LLC, Plaintiff, v. VIRGINIA TOY AND NOVELTY COMPANY, Defendant.
Brittney Renee Powell, Ronni Two, Fox Rothschild LLP, Washington, DC, Whitney D. Pierce, Fox Rothschild LLP, Greensboro, NC, for Plaintiff. Craig Crandall Reilly, Law Office of Craig C. Reilly, Alexandria, VA, for Defendant.
Brittney Renee Powell, Ronni Two, Fox Rothschild LLP, Washington, DC, Whitney D. Pierce, Fox Rothschild LLP, Greensboro, NC, for Plaintiff.
Craig Crandall Reilly, Law Office of Craig C. Reilly, Alexandria, VA, for Defendant.
ORDER
Anthony J. Trenga, United States District Judge
Presently pending in this patent-infringement action are cross motions for summary judgment. See [Doc. 89] (Plaintiff I Pee Holding, LLC's Motion for Partial Summary Judgment of Infringement and Patent Validity Based on Lack of Anticipation) (the "IPH Motion") and [Doc. 96] (Defendant Virginia Toy and Novelty Company's Motion for Summary Judgment) ("the VTC Motion").
On August 9, 2019, IPH filed a motion to amend/correct the Complaint to add ACE Gift & Craft (NINGBO) Co., Ltd ("ACE"), a Chinese corporation who IPH alleges also infringed '464 Patent by manufacturing the disputed product and who has "taken an active and substantive role in Virginia Toy's litigation strategy ... including paying for the defense of this action." [Doc. 112 ¶ 16]. The Court granted the motion on August 21, 2019 [Doc. 107]. On September 13, 2019, Magistrate Judge Buchanan dismissed a Rule to Show Cause [Doc. 108] as to why ACE should not be deemed to have already entered an appearance in this case [Doc. 157] and granted ACE ten (10) days to indicate to the Court whether it would accept service of process, which it subsequently agreed to do. On October 4, 2019, ACE, through counsel, filed its corporate disclosure statement, [Doc. 164], as well as its answer to IPH's First Amended Complaint, [Doc. 165].
Plaintiff I Pee Holding, LLC ("IPH") owns U.S. Patent No. 10,064,461 (the " '461 Patent"), which pertains to a special type of "snap fit" for Christmas-light type novelty light strings. IPH alleges that Defendant Virginia Toy and Novelty Company ("VTC") infringed its patent and has moved for summary judgment with respect to its patent infringement claim as well as Defendant's invalidity defense that the '461 Patent is anticipated by U.S. Patent No. 7,036,962 to Chan ("Chan"). See [Doc. 90] (Plaintiff's Memo in Support of Motion for Partial Summary Judgment) ("Pltf.'s Memo").
VTC has also moved for summary judgment on its three invalidity claims: (1) that Windy City Novelties, Inc. ("Windy City"), IPH's licensee and the employer of the inventor of the '461 Patent, made at least one offer to sell a device that embodied the '461 Patent before IPH filed the application for the '461 Patent and therefore the prior sale constitutes "prior art" that invalidates the '461 Patent ; (2) that U.S. Patent No. 8,083,381 to Tsai ("Tsai") anticipates Claims 1, 2, and 6 of the '461 Patent ; and (3) that Claims 5, 7, and 8 of the '461 Patent are obvious over Tsai, alone or in combination with patents that VTC contends constitute prior art. See [Doc. 97] (Defendant's Memorandum in Support of Motion for Summary Judgment) ("Def.'s Memo").
For the reasons stated below, the Court concludes that there are no genuine issues of material fact and IPH is entitled to judgment in its favor as a matter of law as to the following issues:
1. VTC's Accused Products literally infringe the '461 Patent ;
2. Chan does not anticipate the '461 Patent ;
3. Windy City's prior disclosure by sale of an invention embodying the '461 Patent does not qualify as prior art;
The Court also concludes that VTC is not entitled to judgment in its favor as a matter of law as to its defenses that Tsai anticipates Claims 1, 2, and 6 of the '461 Patent and that the '461 Patent is obvious over Tsai, alone or in combination with other prior art.
Accordingly, IPH's Motion for Partial Summary Judgment [Doc. 89] is GRANTED; and VTC's Motion for Summary Judgment [Doc. 96] is DENIED.
I. BACKGROUND
A. Case Background
IPH is the owner of the '461 Patent, which is entitled "Light String with Lighting Elements Surrounded by Decorative Shroud and Retained by Snap-fit Enclosure System." [Docs. 1 ("Complaint" or "Compl.") ¶ 7; 1-1]. The United States Patent and Trademark Office ("PTO") issued the '461 Patent on September 4, 2018, after an application was filed with the PTO on August 17, 2015. Compl. ¶ 7. The subject of the '461 Patent is a remote-controlled "snap-fit" enclosure system used to attach a Christmas-light type light string and lighting element to the decorative, colored glass shroud assembly, which, according to IPH, "substantially reduces material costs and assembly time for light string products, resulting in increased margins and/or more competitive pricing, making it a desirable improvement over the prior art." Compl. ¶ 8.
IPH alleges that VTC, a Virginia corporation, and ACE, a Chinese company, manufactures, imports, and/or distributes "light string novelty products" (such as wearable light string necklaces) that infringe the '461 Patent by employing a snap-fit enclosure system that falls within the '461 Patent's independent claims. Compl. ¶¶ 11-12; see also [Doc. 112 ("Amended Compl.") ¶¶ 19-20]. On November 30, 2018, IPH, through counsel, sent a cease-and-desist letter to VTC's president and registered agent, to which VTC did not respond. Amended Compl. ¶¶ 21-22. Thereafter, IPH filed this action on December 18, 2018. In its Amended Complaint, IPH seeks injunctive relief and damages, including treble damages and attorneys' fees, pursuant to 35 U.S.C. §§ 283, 284, and 285. Id. "Prayer for Relief".
On March 22, 2019, VTC answered IPH's Complaint and filed counterclaims seeking declaratory judgment that it did not infringe the '461 Patent or, alternatively, that the '461 Patent is invalid, on the basis that it does not satisfy the statutory criteria for novelty and non-obviousness. See generally [Doc. 19]. VTC also seeks attorneys' fees pursuant to 35 U.S.C. § 285. Id. at 14. On May 17, 2019, IPH answered the counterclaim denying all of the material factual allegations. [Doc. 24].
On May 23, 2019, VTC filed a Motion to Dismiss or, in the Alternative, a Motion for Judgment on the Pleadings. [Doc. 30]. On June 14, 2019, the Court held a hearing on VTC's Motion to Dismiss, following which it denied VTC's motion from the bench. [Doc. 46].
On July 19, 2019, the Court held a Markman hearing and on August 6, 2019, the Court issued an Order construing the claims at issue in this action. [Doc. 73] (the "Markman Order").
In the Markman Order, [Doc. 73 at 1-2], the Court issued the following claims construction with respect to the '461 Patent :
(1) The term "the cap is secured to the neck and the light element secured within the shroud without the need for an external fastener" will be construed as "the cap is secured to the neck and the light element is secured within the shroud without the need for anything designed to hold objects together from outside or beyond, or apart from, the assembly structure" ;
(2) The term "a substantially straight-through path" will be construed as "the conductor takes a substantially straight-through route from one of the cooperating cut-outs in the neck and shroud to the other cut-out on the opposite side of the neck and shroud" ; and
(3) The term "wherein the conductor and light element are non-integral with and separate, apart and removable from the shroud and the cap" will be construed as "wherein the conductor and light element comprise a fully functional subassembly that can be removed from and separated from the shroud and cap without being damaged or affecting its ability to function."
B. Undisputed Facts
The Court finds that the following facts are undisputed, as well as those referenced in Part III. Analysis, infra. :
1. VTC sells and ACE manufacturers and exports to VTC light string necklaces with snap-fit enclosures represented by the following product numbers: 21CB2MR; 21SFB1WR; 21BU2BG; 21SKB2W; 21PU20; 21BU2BO; 18BBW6SL; 21GB2W (the "Accused Products").
2. VTC is selling the Accused Products in the United States through its own website and through third-party marketplaces, like Amazon.com.
3. ACE is manufacturing, offering for sale, selling and exporting the Accused Products in the United States and supplies the Accused Products to VTC for sale in the United States.
4. IPH has not licensed or otherwise authorized VTC or ACE to manufacture or sell any of the Accused Products.
5. The earliest effective filing date of the '461 Patent is August 27, 2015.
6. Each of Tsai, U.S. Patent No. 7,178,930 to Damrau ("Damrau"), U.S. Patent No. 7,036,962 to Chan ("Chan"),
U.S. Patent Application Publication No. 2005/0117339 to Pan ("Pan"), and International Application Publication No. WO 98/43014 to Bruce et al. ("Bruce") predate the filing of the '461 Patent and were never before the USPTO during examination of the '461 Patent.
7. Each of the offers for sale made by IPH prior to the effective filing date of the '461 Patent were sales made to private individuals by Windy City, IPH's licensee and the employer of the inventor of the '461 Patent.
8. The product offered for sale by IPH prior to the effective filing date of the '461 Patent was ready for patenting at the time of the offered sale.
9. The Accused Products include a shroud with a body having an open interior and a neck having an opening into the body interior.
10. The Accused Products have a controller including one or more batteries and a switch and includes circuitry to control a lighting scheme of the light elements.
II. LEGAL STANDARD
A. Summary Judgment
Summary judgment is appropriate only if the record shows 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) ; see also Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Evans v. Techs. Apps. & Serv. Co. , 80 F.3d 954, 958 (4th Cir.1996). In the context of a patent infringement suit, the party seeking summary judgment has the initial burden of showing an absence of a material fact in dispute. Celotex Corp. v. Catrett , 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson , 477 U.S. at 248, 106 S.Ct. 2505.
Once a motion for summary judgment is properly made and supported, the opposing party has the burden of showing that a genuine dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). To defeat a properly supported motion for summary judgment, the non-moving party "must set forth specific facts showing that there is a genuine issue for trial." Anderson , 477 U.S. at 247–48, 106 S.Ct. 2505 ("[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact."). Whether a fact is considered "material" is determined by the substantive law, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248, 106 S.Ct. 2505. The facts shall be viewed, and all reasonable inferences drawn, in the light most favorable to the non-moving party. Id. at 255, 106 S.Ct. 2505 ; see also Lettieri v. Equant Inc. , 478 F.3d 640, 642 (4th Cir. 2007).
This methodology is no different in patent infringement cases. To prevail, the party claiming infringement must establish that the accused product meets every limitation recited in the accused claim, either literally or under the doctrine of equivalents. V-Formation, Inc. v. Benetton Group SpA , 401 F.3d 1307, 1310 (Fed. Cir. 2005) ; Lifescan, Inc. v. Home Diagnostics, Inc. , 76 F.3d 358, 359 (Fed. Cir. 1996). Accordingly, a determination of patent infringement requires a two-step inquiry. First, the court must construe the patent claims as a matter of law. Advanced Cardiovascular Sys., Inc. v. Scimed Life Sys., Inc. , 261 F.3d 1329, 1336 (Fed. Cir. 2001). Next, the claims must be compared to the accused device to determine whether the accused device contains each limitation of the claims as properly construed, either literally or under the doctrine of equivalents. See Advanced Cardiovascular Sys. , 261 F.3d 1329 at 1336. Infringement must be "establish[ed] by a preponderance of the evidence." Id.
The Court's Markman Order completed the first step in this inquiry with respect to certain claims in dispute.
Meanwhile, challenges to the validity of a patent face a higher burden of proof. In Microsoft v. i4i Limited Partnership , the Supreme Court stated that "there is a presumption of [patent] validity [that is] not to be overthrown except by clear and cogent evidence." 564 U.S. 91, 101, 131 S.Ct. 2238, 180 L.Ed.2d 131 (2011) (citations omitted). Thus, to prove invalidity, the alleged infringer "must submit such clear and convincing evidence of invalidity such that no reasonable jury could find otherwise." Eli Lilly & Co. v. Barr Labs. , 251 F.3d 955, 962 (Fed. Cir. 2001) ; See ActiveVideo Networks, Inc. v. Verizon Commc'ns, Inc. , 807 F. Supp. 2d 563, 566 (E.D. Va. 2011) ("An accused infringer challenging the validity of a patent claim must prove anticipation by clear and convincing evidence.").
B. Anticipation
A patent claim is anticipated, and therefore not entitled to patent protection, where, inter alia , it was patented, described in a printed publication or in public use or on sale before the filing date of the claimed invention, 35 U.S.C. § 102(a)(1), or it was described in an application for patent, published (or deemed published) under section 122(b), by another and that application or patent was filed before the effective filing date of the claimed invention, 35 U.S.C. § 102(a)(2). In addition, to anticipate, a prior art reference must disclose each and every limitation present in the contested patent. Am. Calcar, Inc. v. Am. Honda Motor Co., Inc. , 651 F.3d 1318, 1341 (Fed. Cir. 2011).
Determining anticipation is a question of fact that "may be decided on summary judgment if the record reveals no genuine dispute of material fact," Golden Bridge Tech., Inc. v. Nokia, Inc. , 527 F.3d 1318, 1321 (Fed. Cir. 2008), and "[a]n accused infringer challenging the validity of a patent claim must prove anticipation by clear and convincing evidence, ActiveVideo Networks, Inc. , 807 F. Supp. 2d at 566. Although a patentee would not have the burden of proof at trial, to successfully move for summary judgment, the patentee must show that the accused infringer "failed to produce clear and convincing evidence of a defense upon which a reasonable jury could invalidate the patent." Eli Lilly & Co , 251 F.3d at 962.
C. Obviousness
A patent may be invalidated for obviousness "if the differences between the claimed invention and the prior art are such that the claimed invention would have been obvious at the time the invention was made to a person having ordinary skill in the art." 35 U.S.C. § 103(a) ; see also KSR Int'l Co. v. Teleflex, Inc. , 550 U.S. 398, 421, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007) (explaining a patent to be obvious if it is no more than a predictable use of prior art elements and there is an apparent reason to combine those elements as the patent does). A determination of obviousness involves (1) construction of the claims and (2) a comparison of the construed claim to the prior art. Key Pharms. v. Hercon Labs. Corp. , 161 F.3d 709, 714 (Fed. Cir. 1998). Thus, obviousness is a question of law, KSR Int'l Co. , 550 U.S. at 427, 127 S.Ct. 1727, but factual inquiries underlie this analysis, including: the scope and content of the prior art, the differences between the claims and the prior art, the level of ordinary skill in the art, and secondary considerations, Graham v. John Deere Co. , 383 U.S. 1, 17-18, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). Secondary indicia of non-obviousness include commercial success, long felt but unsolved needs, and the failure of others to create the patent. Id. at 18, 86 S.Ct. 684.
To the extent obviousness is premised on combining multiple prior art references, the question of motivation to combine may be addressed on summary judgment. Wyers v. Master Lock Co. , 616 F.3d 1231, 1239 (Fed. Cir. 2010). In this context, "the combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results." KSR , 550 U.S. at 416, 127 S.Ct. 1727. "[T]he common sense and ordinary creativity of" a person of ordinary skill in the art (a "POSITA") also are part of this analysis. Norgren Inc. v. ITC , 699 F.3d 1317, 1322 (Fed. Cir. 2012) (citing KSR , 550 U.S. at 420-21, 127 S.Ct. 1727 ). Thus, if the content of the prior art, the scope of the patent claim, and the level of ordinary skill in the art are not in dispute, the moving party may succeed in a motion for summary judgment if he sufficiently demonstrates that one of ordinary skill "would have both recognized the problem in the art as recognized by the inventors and found it obvious to solve such problem in the manner claimed in the invention." Morpho Detection, Inc. v. Smiths Detection Inc. , 2012 WL 5879851, at *6, 2012 U.S. Dist. LEXIS 166558, at *6 (E.D. Va. 2012).
III. ANALYSIS
A. IPH's Motion for Partial Summary Judgment [Doc. 89]
a. Literal Infringement of the Asserted Claims
While it is well-settled that an invalid claim cannot give rise to liability for infringement, Pandrol USA, LP v. Airboss Ry. Prods. , 320 F.3d 1354, 1365 (Fed. Cir. 2003), patent validity and infringement are separate issues that must be answered independently of each other, Medtronic, Inc. v. Cardiac Pacemakers, Inc. , 721 F.2d 1563, 1583 (Fed. Cir. 1983). To this end, when confronted with both issues, the best practice is to resolve both issues simultaneously. See Medtronic, Inc. , 721 F.2d at 1583 (noting that although the district court was correct in its determination that the patents in suit were invalid, the "better practice" would have been to resolve the issue of infringement as well). Given this guidance by the Federal Circuit, the Court reviews IPH's claim of infringement notwithstanding the issues of invalidity, discussed infra. In that regard, IPH does not contend that the Accused Products infringe under the doctrine of equivalents
Under the Leahy-Smith America Invents Act ("AIA"), "whoever with authority makes, uses, offers to sell or sells any patented invention within the United States ... infringes the patent." 35 U.S.C. § 271(a). "A claim is literally infringed when the accused device literally embodies each limitation of the claim." CIVIX-DDI v. Microsoft Corp. , 18 Fed. Appx. 892, 895 (Fed. Cir. 2001). "To prove literal infringement, the patentee must show that the accused device contains every limitation in the asserted claims." Alcohol Monitoring Sys., Inc. v. Actsoft, Inc. , 414 F. App'x 294, 300 (Fed. Cir. 2011) (quoting Mas-Hamilton Grp. v. LaGard, Inc. , 156 F.3d 1206, 1211 (Fed. Cir. 1998) ).
The dispositive issue as to literal infringement is whether the Accused Products infringe each of the claims of the '461 Patent. VTC has not argued that the Accused Products do not satisfy the elements recited in Claims 2, 5, 6, or 7 of the '461 Patent, but rather contends that there is no infringement because the Accused Products do not meet elements 1[G] and 8[G] of Claims 1 and 8, respectively. See [Doc. 127 at 13].
Here, it is undisputed that VTC sells the Accused Products in the United States. See [Doc. 19 ¶ 12].
Element 1[G] reads: "wherein the conductor and light element are non-integral with and separate, apart and removable from the shroud and the cap, and"
Element 8[G] reads: "wherein the conductor and the plurality of LED light elements are non-integral with and separate, apart and removable from respective ones of their shrouds and caps."
To satisfy elements 1[G] and 8[G], the light element and conductor of the Accused Products must "comprise a fully functional subassembly that can be removed from and separated from the shroud and cap without being damaged or affecting its ability to function." [Doc. 73 at 12]. As reflected in the Markman Order, the light and conductor found in the Accused Products must be (1) capable of being removed from inside the shroud; (2) capable of being separated from the shroud and cap; and (3) must be done so without damaging the light or affecting its ability to function. Markman Order at 9-11; see also Pltf.'s Memo at 14.
VTC's position, in substance, imports the "substantially enclosed" limitation found outside of elements 1[G] and 8[G] into the "separate, apart and removable" limitation to require that the shroud be "substantially enclosed" at the time the light element and conductor is removed. But the Court's Markman Order does not require that the "substantially enclosed" limitation exist at the time the light element and conductor subassembly is removed, only that the light element and conductor subassembly must be fully functional at the time it is removed from the shroud and cap.
VTC, in its opposition, argues for a new construction of Claims 1 and 8, notwithstanding this Court's Markman Order. [Doc. 127 at 13]. In that regard, VTC argues that because each claim describes the shroud as being "substantially enclosed" at elements 1 [H] and 8[D], the shroud must be substantially enclosed wherever it is recited in the claim description, including at 1 [G] and 8[G]. Id. at 10. As discussed, the Court did not impose any such further limitation in its Markman Order and declines to revisit or revise its Markman Order.
VTC further contends that certain Accused Products with internal protrusions cannot infringe the '461 Patent because the type of separation needed to make the light element and conductor removable causes those products' necks from not locking with the cap after it has been disassembled. [Doc. 127 at 17-21]. In other words, VTC contends that only by changing the form of the Accused Products with internal protrusions can those Accused Products infringe the '461 Patent and that this is not a valid theory of infringement. Id. In support of this argument, VTC cites High Tech Medical Instrumentation, Inc. v. New Image Industries, Inc. , 49 F.3d 1551 (Fed. Cir. 1995) and Heflin v. Coleman Music and Entertainment, LLC. , 2011 U.S. Dist. LEXIS 141579, 2011 WL 6130802 (E.D. Va. Dec. 5, 2011). In both cases, the court found that the patentee's allegation of infringement was lacking if an accused product would infringe only if it was manipulated. See High Tech , 49 F.3d at 1555-56 ("a device does not infringe simply because it is possible to alter it in a way that would satisfy all the limitations of a patent claim...").
In High Tech , the patentee claimed that an accused device infringed its patent for a hand-held dental endoscope that required the endoscope to have a camera "rotatably coupled to said body member." Id. at 1552. According to the patentee, although the accused device was fixed to its housing with two set screws, if the screws were loosened, which the patentee claimed could occur, the accused device could become "rotatable" and therefore infringe its patent. The district court agreed, but the Federal Circuit reversed. Id. at 1556. According to the Federal Circuit, although loosening two set screws in the accused product would cause the device to be capable of being rotated, such a manipulation, coupled with the absence of an intention to remove the two set screws, could not be grounds for infringement. Id. ; see also Heflin , 2011 U.S. Dist. LEXIS 141579, at *15-16, 2011 WL 6130802, at *5 ("Here, as in High Tech , the fact that the Accused Devices might be capable of dispensing collector cards is not enough, by itself, to justify a finding that the manufacture and sale of [the Accused Devices] infringe [Plaintiff's] patent rights. This capability must also be coupled with intent on the part of Defendants to use the Accused Devices for the purpose of distributing collector cards.") (quotations omitted and alterations in original).
Significant for this case, in High Tech , the patentee argued that despite the absence of the word "capable" in the claim language, the accused product was capable of being rotated and therefore violated its patent. High Tech , 49 F.3d at 1556. And in Helfin , the patentee similarly argued that "Claims 1 through 4 of the '874 Patent cover not only those devices that actually dispense ‘collector cards,’ but also those which are capable of dispensing ‘collector cards. ’ " 2011 U.S. Dist. LEXIS 141579, at *14, 2011 WL 6130802, at *5 (emphasis in original). But missing from the claim language in both High Tech and Helfin was a requirement that the device needed to be capable of performing a specific function. Cf. Fantasy Sports Properties, Inc. v. Sportsline.com, Inc. , 287 F.3d 1108, 1118 (Fed. Cir. 2002) ("[A]s in every infringement analysis, the language of the claims, as well as the nature of the accused product, dictates whether an infringement has occurred."). Unlike in High Tech or Helfin , the limitation at issue here—that the light element and conductor sub-assembly "can be removed from and separated from the shroud and cap," see Markman Order at 12—is itself a capability limitation expressly included in the '461 Patent's claim.
The Court's Markman Order also rejected VTC's position when it declined to impose any temporal limitation (assembled versus disassembled) with respect to elements 1[G] and 8[G]. Markman Order at 10-11. In particular, the Court rejected VTC's proposed temporal limitation (i.e. , "when the shroud and cap are connected and disconnected from one another") since any such temporal limitation is not present in the plain language of the claim. Id. Because of this claim construction, whether the Accused Product is assembled or disassembled (and any resulting characteristics that emerge from either state) is unimportant to evaluating if the Accused Products satisfy elements 1 [G] and 8[G], as construed. The relevant limitation mentioned is whether the light and conductor sub-assembly unit are removable (i.e. , are able to be removed).
Based on the undisputed evidence, IPH has demonstrated that the Accused Products satisfy the disputed elements at issue here. IPH has shown that the Accused Products have a light element and conductor that are able to be removed from the shroud (thus making it "non-integral") and are "separate, apart and removable" from the shroud and cap. Also, upon their removal from the shroud, the Accused Products' light element and conductor are neither damaged nor unable to function, thus satisfying the Court's requirements for elements 1[G] and 8[G]. See [Doc. 119 ("Locati Decl.") ¶¶ 17-19; Velte Dep. at 31:21-25; 34:18-24; 36:17-25; 48:16-21 (admitting that the Accused Products included a light element that is removable from the shroud when the two halves of the shroud are separated). For these reasons, IPH is entitled to judgment in its favor as a matter of law as to its claim that the Accused Products infringe the '461 Patent.
b. Whether the '461 Patent is anticipated by Chan (Patent '962 )
According to IPH, Chan expressly discloses a "cutter blade [that] is adapted to cut and shear the insulating wire protective layer." See Pltf.'s Memo, Ex. D at 4:34-58. IPH argues that this procedure, which is necessary and disclosed in the Chan patent and whereby the lighting element must be damaged to facilitate an electric connection, cannot satisfy the "separate, apart and removable" limitation. Id. at 16-17. In support, IPH cites to VTC's own expert witness, Mr. Stephen Velte, who indicated that the wire of Chan has "to cut through to the wire to create an electrical current" and that this process damaged the wire. Velte Dep. at 124:16-125:16.
In the Court's Markman Order, the Court construed the "separate, apart and removable" limitation, present in both claim 1 and claim 8 of the '461 Patent, as "wherein the conductor and light element comprise a fully functional subassembly that can be removed from and separated from the shroud and cap without being damaged or affecting its ability to function. Markman Order at 12 (emphasis added). Further, the Court explicitly excluded from its construction of "separate, apart and removable" any device where "the rubber sheath protecting the wires were pierced by prongs to facilitate electrical connection and then left exposed after disassembly ...." Id. at 9.
Here, VTC's own expert admitted that Chan requires the use of a device to cut through (or "compromise") the wire to create an electrical current. Velte Dep. at 124:16-125:16. And the use of such a cutting device inflicts damage to the conductor and light element sub-assembly. Velte Dep. 124:24-125:9; see also Locati Decl. ¶¶ 22-24. Therefore, Chan cannot anticipate Claims 1 or 8 of the '461 Patent since it lacks at least one element of each claim; that is, it cannot meet the "separate, apart and removable" limitation. Am. Calcar, Inc. , 651 F.3d at 1341. For this reason, VTC has failed to produce clear and convincing evidence upon which a reasonable jury could find that Chan anticipates the '461 Patent ; and IPH is entitled to judgment in its favor as a matter of law as to VTC's anticipation defense based on Chan.
Q: When you make that type of connection with this type of connector, does it alter physically the conductor and the wire?; Velte: Right, the wire, shroud, protective cover does have to be penetrated to create the electrical circuit, yes; Q: And then that portion of the wire is then exposed? Is that a fair statement to make? Velte: It's been compromised..."), and cannot satisfy the Court's construction of "separate, apart and removable," in particular, that to satisfy this limitation the "conductor and light element ... can be removed and separated from the shroud and cap without being damaged. "
B. VTC's Motion for Summary Judgment [Doc. 96]
a. Disclosure via Sale
VTC argues that private offers of sale are no longer protected "disclosures" after the Supreme Court's decision in Helsinn Healthcare S.A. v. Teva Pharms., USA, Inc. , ––– U.S. ––––, 139 S. Ct. 628, 634, 202 L.Ed.2d 551 (2019) ; see also 35 U.S.C. § 102(a)(1) ("A person shall be entitled to a patent unless – (1) the claim invention was ... on sale, or otherwise available to the public before the effective filing date of the claimed invention."). Consequently, according to VTC, the private sale by Windy City to private customers of products embodying the '461 Patent prior to the '461 Patent's effective filing date constitutes an unprotected disclosure and is therefore prior art that invalidates the '461 Patent.
35 U.S.C. § 102(b)(1) provides that "A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention" if the "disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventory or a joint inventor." In Helsinn , the Supreme Court considered whether a private, confidential sale of an invention to a third party can qualify as "prior art" under § 102(a) and held that, under the facts of that case, it was not a protected disclosure under § 102(b) and therefore may be prior art under § 102(a). 139 S. Ct. 628, 634. But Helsinn was narrowly limited to a sale that had occurred more than one year before the underlying patent's effective date; and made clear that the one-year grace period, applicable to private sales, continued to apply notwithstanding its decision. 139 S. Ct. at 633-34 (noting that Congress enacted the AIA "against the backdrop of a substantial body of law interpreting § 102's on-sale bar and concluding that Congress did not unsettle this meaning, and the related ‘on sale’ bar when it adopted the AIA). In other words, Helsinn did not, as VTC contends, extend its holding beyond private, confidential sales that took place more than one year before the patent filing date. Nor did Helsinn amend the well-established one-year grace period applicable to sales of the kind here.
Here, it is undisputed that the first sale of a product under the '461 Patent occurred by Windy City on August 17, 2015, ten days before IPH filed its provisional application for the '461 Patent. See [Doc. 118-1 ¶¶ 3-5]. And even though the invention including the '461 Patent was reduced to practice and ready for patenting at the time of that August 2015 sale, this offer for sale of a product covered by any claim of the '461 Patent occurred well within the one-year grace period permitted under the AIA. As such, it is a protected disclosure under § 102(b)(1) and cannot be considered prior art. For these reasons, VTC has failed to produce clear and convincing evidence upon which a reasonable jury could find that Windy City's August 17, 2017 sale constitutes an unprotected disclosure and thus prior art under § 102(a). It is therefore not entitled to judgment in its favor as a matter of law as to its defense that the '461 Patent is invalid due to a prior disclosure constituting prior art.
b. Anticipation by Tsai (Patent '381 )
VTC contends that Tsai anticipates Claims 1, 2, and 6 of the '461 Patent and therefore bars its patentability. As Claims 2 and 6 are dependent on Claim 1, cf. Markman Order at 3-4 ("The '461 Patent ... contains eight claims, and only claims 1 and 8 are independent."), VTC's position rests chiefly on showing Tsai's anticipation of Claim 1, which revolves around the following three elements of that claim.
(1) "A cap ... configured to fit onto the neck."
The principal area of dispute with respect to this element is whether the Tsai patent satisfies the '461 Patent's limitation of "a cap ... configured to fit onto the neck" based on its limitation that "[t]he cover (40) is mounted around the lens (30) and connected to the seat (10)...." [Doc. 120, Ex. F, Tsai, Col. 2, II, 66-67].
According to VTC, Claim 1 requires the structure referred to as a "neck" (1) be a portion of the shroud with an opening to communicate to the interior of the shroud; (2) has locking elements that "cooperate with the cap," securing the neck to the cap such that the light element is secured within the shroud without the need for an external fastener; and (3) has at least 2 cut-outs to align with cut-outs in the cap to define straight-through path configured to receive the conductor. Id. VTC also contends that the '461 Patent instructs that the shroud, which would include the neck, is not limited to the shape or configuration described in the specification and "can take many forms or shapes." Id. Thus, according to VTC, because Tsai includes a cap that includes parts of a neck, as described in Claim 1, Tsai anticipates the '461 Patent.
IPH, in reply, contends that Tsai has no "neck" because the neck described in its claim must enable a cap to fit on it with cooperating locking elements positioned in the cap and in Tsai, there is an absence of any such a neck or any cooperating lock elements between the cap and the neck as required by element 1[E]. [Doc. 118 at 14-15]. In further support of its position, it references the common definition of ‘neck,’ which, according to IPH, implies a narrowing, constriction, slenderness, or reduction of size which is absent in Tsai. Id. at 15 (citing Locati Decl. ¶ 7] ).
Element 1 [D] of the '461 Patent contemplates two separate components, a neck and a cap, that cooperate with one another via a "snap-fit" locking mechanism. What is described as a neck in Tsai is not a neck as described in the '461 Patent because the Tsai "neck" does not permit a cap configured to fit on the neck. VTC, while not disputing that element 1 [D] contemplates two separate components, claims that because in Tsai there is what can be considered a "cap" that fits onto a structure that can be considered a "neck," there is anticipation. [Doc. 97 at 13 ("the neck cut-outs 421 are aligned with and cooperate with the cap cut-outs 122 to form a substantially straight-through path, even though they do not overlap or contact one another. " (emphasis added) ]; see also [Doc. 135 at 4]. But in Tsai, the cap appears as a seat and the neck appears as a side wall that is tangentially connected to that seat via a hook mechanism that is not like the cooperating locking element in the '461 Patent. See [Doc. 120, '461 Patent, Ex. D, Col. 4, 60-65]; Locati Decl. ¶¶ 6-7; Velte Dep. 62:12-63:2 (Velte describing connector in Tsai as hook). Therefore, the relied upon Tsai element does not meet the element 1 [D] criteria; and VTC has failed to produce clear and convincing evidence upon which a reasonable jury could find that Tsai anticipates element 1 [D] of the '461 Patent.
(2) "light element secured within the shroud...."
The second element in dispute is whether the light element in Tsai is "secured within a shroud." Though VTC admits that the light element in Tsai sits within a separate component (the lens), it contends that both are located within a shroud-like figure, thus satisfying the claim limitation. As support, VTC references the word "comprising" in element 1[PRE] to argue that other features (such as the lens) can exist within the secured shroud, in addition to the light element. [Doc. 135 at 5-6]. IPH disagrees, and argues that because Tsai clearly states that the lighting element is connected to a printed circuit board (not conductor wires as in the '461 Patent ), which is also mounted "in the tank of the lens," the Tsai light element is "not secured or enclosed within the shroud." [Doc. 118 at 15].
On this issue, there remains a genuine dispute of material fact, including whether the light element in Tsai is secured or enclosed in what can be considered a shroud. See [Doc. 118 at 15 (IPH disputing that "the Tsai LED [light] is not secured or enclosed within the lamp housing (assuming that qualifies as the shroud).") ].
(3) "light element and conductor that is ‘separate, apart and removable’ "
The last disputed issue is whether the light element and conductor are "separate, apart and removable," as required by element 1 [G]. IPH claims that because the device in Tsai is intended for outdoor use, it is sealed by waterproof glue to prevent water from infiltrating inside. As such, the "seat and lens that contain the PCB [the printed circuit board assembly part that houses the conductor] and light element are permanently affixed" and separating the pieces would damage the device and affect its ability to function, at odds with the Court's language in its Markman Order. [Doc. 118 at 16] (citing Locati Decl. ¶ 11). IPH also argues that, even if there was no glue creating a permeant, non-removable seal, the light and conductor in Tsai are, given the presence of the PCB, not one, definite subassembly. [Doc. 118 at 17 (citing Locati Decl. ¶ 12) ]. And because element 1 [G] requires both the light element and conductor act as a single sub-unit, Tsai cannot anticipate the '461 Patent. Id.
The core of this dispute regards whether the existence of intervening structures (notably the PCB) between the conductor and light element in Tsai defeats its status as an independent subassembly that is removable from the alleged shroud. In the Court's Markman Order, the Court did not limit the light element and conductor subassembly to those two components. The subassembly may therefore include other components, such as the PCB, as well, and provided (1) the conductor and light element comprise the entirety or part of a fully functional sub-assembly and (2) that subassembly can be removed and separated without damage to that subassembly, element 1[G] is met. Since Tsai satisfies both conditions, see Velte Decl. 48:16-21 (admitting that the light element and conductor subassembly is removable from the shroud of the accused product); [Doc. 120, Ex. F, Tsai, Fig. 3], there is no material factual dispute and the Court finds that Tsai anticipates element 1[G] of the '461 Patent.
Nevertheless, because VTC has failed to show, by clear and convincing evidence, that Tsai has anticipated each and every claim limitation of the '461 Patent, VTC is not entitled to judgment in its favor as a matter of law with respect to its anticipation defense based on Tsai; and VTC's motion for summary judgment with respect to anticipation by Tsai is denied.
c. Obviousness over Tsai, alone or in combination with other prior art.
VTC alleges that Claims 5, 7, and 8 of the '461 Patent are supposedly obvious over Tsai, whether alone or in combination with patents that constitute prior art. [Doc. 97 at 17-27]. With respect to Claim 5, VTC argues that the two additional limitations present in the '461 Patent (a controller with (1) a switch and (2) one or more batteries) is obvious such that someone with ordinary skill in the art would be able to make the modifications. Similarly, with respect to Claim 7, VTC argues that the three additional limitations present in the '461 Patent (a controller with (1) a switch, (2) one or more batteries, and (3) circuitry to control a lighting scheme of the lighting elements) are also obvious such that someone with ordinary skill in the art would be able to make the modifications. Finally, with respect to Claim 8, VTC contends that the "neck" limitation and the "four cut-outs formed therein equally circumferentially spaced from one another to define four section" are the only limitations in dispute and that Tsai discloses both of these limitations. Def.'s Memo at 17-21; see also [Doc. 135 at 9-10]. In response, IPH contends that (1) not every claim limitation is present in the combination of prior art references; (2) a POSITA would not have been motivated to combine these prior art references to manufacture the '461 Patent ; (3) no POSITA would have a reasonable chance of success in doing so; and (4) the secondary considerations, namely the amount of time it took to develop the '461 Patent after the prior art references VTC cites were first published, favor a finding of non-obviousness [Doc. 118 at 18]. Central to IPH's position is Tsai's absence of a discernable neck which would bar any POSITA from being able to create the "invention disclosed in the '461 Patent without undue experimentation." [Doc. 118 at 20 (citing Locati Decl. ¶ 7) ].
As evidenced by their positions, the parties do not dispute the level of ordinary skill in the pertinent field under Graham. Rather, the parties disagree over whether the '461 Patent represents predictable modifications to Tsai that someone of ordinary skill in the art would have been motivated to make; that is, the parties disagree on the "differences between the prior art and the claimed invention." KSR , 550 U.S. at 406, 127 S.Ct. 1727 (quoting Graham , 383 U.S. at 17-18, 86 S.Ct. 684 ).
Both parties appear to agree that a POSITA is someone with only a high school education and two years of experience in product design. See [Docs. 118 at 21 n.12, 135 at 2 n.2].
Based on the current record, the Court finds that VTC has not shown, by clear and convincing evidence, that Tsai, alone or in combination with other prior art, renders the '461 Patent obvious; material factual disputes exist over whether Tsai makes obvious every claim limitation of the '461 Patent. VTC is therefore not entitled to judgment in its favor as a matter of law with respect to its invalidity defense based on obviousness.
These disputes relates to both primary and secondary considerations. See Commonwealth Scientific & Indus. Research Org. v. Buffalo Tech. , 542 F.3d 1363, 1377 (Fed. Cir. 2008) (concluding that secondary consideration evidence, as with evidence regarding the primary considerations, can present factual issues for the trier of fact). As one commentator has observed, "[t]he breadth of the factual inquiry, the likelihood that any of a variety of factors can influence the ultimate determination, and the many moving parts of the obviousness inquiry are all good indicators that there will often be genuine issue(s) of material fact that will need to be resolved before a judgment of obvious or nonobvious can be rendered." Lee Petherbridge & R. Polk Wagner, The Federal Circuit and Patentability: An Empirical Assessment of the Law of Obviousness , 85 Tex. L. Rev. 2051, 2083 (2007).
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IV. CONCLUSION
For the above reasons, it is hereby
ORDERED that IPH's Partial Motion for Summary Judgment [Doc. 89] is GRANTED ; and judgment is entered in its favor with respect to its infringement claim and VTC's invalidity defense that Chan anticipates the '461 Patent ; and it is further
ORDERED that VTC's Motion for Summary Judgment [Doc. 96] is DENIED.