Opinion
04 Civ. 0182 (RWS).
November 5, 2004
STEVEN G. HILL, ESQ., KATHERINE R. LAHNSTEIN, ESQ., Of Counsel, PAUL BATISTA, ESQ., New York, NY, HILL, KERTSCHER WHARTON, Atlanta, GA, Attorneys for Plaintiff.
ALAN D. FEDERBUSH, ESQ., Of Counsel, PROSKAUER ROSE, New York, NY, STEVEN M. BAUER, ESQ., DAVID J. CERVENY, ESQ., Of Counsel, PROSKAUER ROSE, Boston, MA, Attorneys for Defendants.
OPINION
Defendants The Descartes Systems Group Inc., Descartes Systems (USA) LLC (collectively, "Descartes"), and Mitsui Co., USA, Inc. ("Mitsui") (collectively, "Defendants") have moved for summary judgment pursuant to Rule 56, Fed.R.Civ.P., to dismiss the first amended complaint ("FAC") of plaintiff Arrival Star, Inc. ("ASI") in this patent infringement action. Descartes has also moved under Rule 11, Fed.R.Civ.P., for sanctions against ASI. ASI has moved for a continuance to conduct discovery pursuant to Rule 56(f), Fed.R.Civ.P. Defendants' motion for summary judgment is denied at this time with leave to renew. Descartes' motion for sanctions is also denied, as is ASI's motion for a continuance.
The Parties
According to the FAC, ASI holds over thirty patents in the general field of advanced notification and vehicle route optimization systems.
Descartes provides supply chain services and software relating to the delivery of goods. Mitsui is one of Descartes' customers.
Prior Proceedings
On November 21, 2003, ASI wrote to Descartes requesting that Descartes license its patent portfolio. Descartes began a review of the portfolio.
On January 9, 2004, ASI filed a complaint alleging patent infringement by Descartes. It filed its FAC on or about April 9, 2004, alleging in 134 paragraphs that more than twenty Descartes products and one Mitsui product violated fifteen ASI patents. Four causes of action are alleged: patent infringement, inducement to infringe, contributory infringement and wilful infringement.
On April 16, 2004, Defendants moved under Rule 12(b)(6), Fed.R.Civ.P., to dismiss the FAC, submitting an affidavit of Bruce Gordon, Senior Vice President, Research, Development and Support at The Descartes Systems Group Inc. ("Gordon") in which, among other things, he denied that the accused Descartes products include key elements required by the ASI patents. This motion was returnable on May 19, 2004.
Upon the return day and after colloquy between the Court and counsel, Defendants converted their Rule 12(b)(6) motion to a Rule 56 summary judgment motion, which was adjourned to permit additional submissions by the parties.
In the meantime, Descartes had filed its motion for sanctions on April 28, 2004. ASI subsequently filed its motion for a continuance on May 28, 2004. All motions were argued and marked fully submitted on June 9, 2004.
A discovery schedule has been developed and demands have been made. No evidence has been submitted in connection with these motions as a result of that process.
The Facts
In the absence of Local Civil Rule 56.1 Statements, the facts are gleaned from the declarations of the parties and by reference to the FAC. The declaration of Martin Kelly Jones ("Jones"), Chief Executive Officer of ASI, lists advertisements, extracts from the Descartes website, and describes other documents which characterize the Descartes products. An exhibit to the affidavit of Katherine R. Lahnstein consists of a release by Descartes describing the use by Argix Direct of Fleetwise Dispatch and Fleetwide MobileLink which facilitate "real time communications between drivers, dispatchers, and customers." (Declaration of Katherine R. Lahnstein, dated May 28, 2004, Exh E.) The facts set forth below are undisputed except as noted and do not constitute findings of fact by this Court.
The Patents And Products At Issue
ASI is alleged to be the owner of all right, title and interest to multiple U.S. patents in the general field of advanced notifications and vehicular route optimizations systems, including the fifteen patents identified in the FAC: U.S. Patent No. 5,400,020 (the "'020 Patent"), U.S. Patent No. 5,623,260 (the "'260 Patent"), U.S. Patent No. 5,657,010 (the "'010 Patent"), U.S. Patent No. 6,278,936 (the "'936 Patent"), U.S. Patent No. 6,313,760 (the "'760 Patent"), U.S. Patent No. 6,317,060 (the "'060 Patent"), U.S. Patent No. 6,363,323 (the "'323 Patent"), U.S. Patent No. 6,411,891 (the "'891 Patent"), U.S. Patent No. 6,415,207 (the "'207 Patent"), U.S. Patent No. 6,486,810 (the "'810 Patent"), U.S. Patent No. 6,492,912 (the "'912 Patent"), U.S. Patent No. 6,510,383 (the "'383 Patent"), the 6,618,668 (the "'668 Patent"), U.S. Patent No. 6,683,542 (the "'542 Patent"), and U.S. Patent No. 6,700,507 (the "'507 Patent").
ASI identifies more than twenty Descartes products in its FAC, including Cargo 2000, Fleetwise Dispatch, Fleetwise Monitor, Fleetwise Reservations, Fleetwise Route Planner, MobileLink, RiMMs, Roadshow Dispatch, Roadshow Enterprise, Roadshow Route Planner, Roadshow Sales Territory Planner, Roadshow Transport, 20/20 Visibility, LogiMan, PC Pro, Supply Chain Snapshot, and Automated Manifest Service. (See FAC at ¶¶ 18-111.) ASI alleges that the Descartes products identified in the FAC are organized into four integrated product suites which infringe some or all of ASI's patents. (See FAC at ¶ 16.) The product suites alleged are: Value-Added Networks, the Routing and Scheduling Suite, the Visibility and Performance Suite, and the Transportation Management Suite. (See FAC at ¶¶ 114-17.)
ASI has accused the Descartes Value-Added Network products ("VANs") of infringing eight patents: the '801, '912, '207, '323, '060, '936, '668, and '542 Patents. (See FAC at ¶ 114.)
ASI also has accused the Descartes Routing and Scheduling Suite of infringing all fifteen of the asserted ASI patents. (See FAC at ¶ 114.) In its description of the Routing and Scheduling Suite in the amended complaint, ASI has alleged that the product suite "electronically connects dispatchers, drivers and customer service for efficient customer response." (FAC at ¶ 27.)
ASI also has accused the Descartes Visibility and Performance Suite of infringing thirteen of ASI's patents: the '801, '912, '207, '891, '323, '060, '760, '936, '010, '260, '020, '668 and '542 Patents. (See FAC at ¶ 116). ASI alleges that the Descartes product 20/20 Visibility, as part of the Visibility and Performance Suite, "allows users to monitor, measure, query and report on order and shipment information at the line-item level across the supply chain." (FAC at ¶ 85.)
The Mitsui Logistic Exchange ("MLX") is alleged to be Mitsui's internet logistics infrastructure, which delivers logistics and fulfillment services to all of the company's subdivisions, subsidiaries and clients throughout the United States. (See FAC at ¶ 112.) ASI does not allege that the MLX standing alone infringes the asserted patents. Rather, ASI alleges that Mitsui's implementation and use of the Visibility and Performance Suite for the MLX infringes the '801, '912, '207, '891, '323, '060, '760, '936, '010, '260, '020, '668, and '542 Patents. (See FAC at ¶ 112, 118.)
In addition, ASI has accused the Descartes Transportation Management Suite of infringing "at least" one patent, the '323 Patent. (FAC at ¶ 117.) In its description of the Transportation Management Suite in the FAC, ASI alleges that the Transportation Management Suite "enables companies to create and execute the best mode and rate combination for all shipments." (FAC at ¶ 110.)
According to Descartes, none of the Descartes products accused includes key elements that are required by the claims of the asserted patents. (See Declaration of Bruce Gordon, sworn to on April 16, 2004 ("Gordon Decl."), at ¶ 8.)
Discussion
The Summary Judgment Standard
Summary judgment is granted only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); SCS Communications, Inc. v. Herrick Co., Inc., 360 F.3d 329, 338 (2d Cir. 2004); see generally 11 James Wm. Moore, et al., Moore's Federal Practice ¶ 56.11 (3d ed. 1997 Supp. 2004). The court will not try issues of fact on a motion for summary judgment, but, rather, will determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). Summary judgment is appropriate where the moving party has shown that "little or no evidence may be found in support of the nonmoving party's case. When no rational jury could find in favor of the nonmoving party because the evidence to support its case is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper." Gallo v. Prudential Residential Servs., Ltd. P'ship, 22 F.3d 1219, 1223-24 (2d Cir. 1994) (internal citations omitted). "The party seeking summary judgment bears the burden of establishing that no genuine issue of material fact exists and that the undisputed facts establish her right to judgment as a matter of law." Rodriguez v. City of New York, 72 F.3d 1051, 1060-61 (2d Cir. 1995).
A material fact is one that would "affect the outcome of the suit under the governing law," and a dispute about a genuine issue of material fact occurs if the evidence is such that "a reasonable jury could return a verdict for the nonmoving party."Anderson, 477 U.S. at 248; see also R.B. Ventures, Ltd. v. Shane, 112 F.3d 54, 57 (2d Cir. 1997). Thus, "[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." Anderson, 477 U.S. at 248; see also Ouarles v. Gen. Motors Corp., 758 F.2d 839, 840 (2d Cir. 1985) ("[T]he mere existence of factual issues — where those issues are not material to the claims before the court — will not suffice to defeat a motion for summary judgment.").
In determining whether a genuine issue of material fact exists, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986);Gibbs-Alfano v. Burton, 281 F.3d 12, 18 (2d Cir. 2002). "Summary judgment may be granted if, upon reviewing the evidence in the light most favorable to the nonmovant, the court determines that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law."Richardson v. Selsky, 5 F.3d 616, 621 (2d Cir. 1993). Thus, "[t]he evidentiary standard that must be met by the moving party is a high one." United States v. Collado, 348 F.3d 323, 327 (2d Cir. 2003). In order to defeat a motion for summary judgment, the non-moving party must offer sufficient evidence to enable a reasonable jury to return a verdict in its favor. See Anderson, 477 U.S. at 248; Byrnie v. Town of Cromwell, Bd. of Educ., 243 F.3d 93, 101 (2d Cir. 2001);Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998). Summary judgment is warranted "when the nonmoving party has no evidentiary support for an essential element on which it bears the burden of proof." Silver v. City Univ. of New York, 947 F.2d 1021, 1022 (2d Cir. 1991).
I. Defendants' Motion for Summary Judgment Is Denied
The only evidence of record relied upon by Defendants in support of their "motion for summary judgment of non-infringement" is the summarily-stated declaration of Gordon. (Defs. June 2004 Reply Mem. at 1.) Defendants have not filed a Local Civil Rule 56.1 Statement listing specific facts as to which they claim there is no genuine dispute for trial. The absence of a Local Civil Rule 56.1 Statement provides a sufficient basis to deny Defendants' motion. See Local Civil Rules of the United States District Courts for the Southern and Eastern Districts of New York, 56.1(a) ("Failure to submit such a statement may constitute grounds for denial of the motion.");accord Manos v. Geissler, 321 F. Supp. 2d 588, 591 n. 1 (S.D.N.Y. 2004); Doe v. Nat'l Bd. of Podiatric Med. Examiners, No. 03 Civ. 4034 (RWS), 2004 WL 912599, at *3 (S.D.N.Y. Apr. 29, 2004); NAS Electronics, Inc. v. Transtech Electronics PTE, Ltd., 262 F. Supp. 2d 134, 150 (S.D.N.Y. 2003).
Gordon has testified without further explanation that "[n]one of the Descartes products notif[ies] a user of the impending arrival of a vehicle" and that "none of the Descartes accused products places a telephone call to the passenger or user prior to the arrival of a vehicle at a particular stop to provide a notification of that arrival." (Gordon Decl. at ¶ 10.) The declaration of Jones recites unidentified Descartes website materials and articles to the contrary. Gordon has not provided any documentary evidence concerning the Descartes products, nor has Jones annexed to his declaration any of the website materials or articles referenced therein. Even if, as Defendants suggest, the Jones declaration were discounted in whole or in part to the extent that it contains inadmissible hearsay, however, it does not follow that "summary judgment of non-infringement is appropriate at this time" on the basis of what Defendants term the "undisputed" facts set forth in Gordon's declaration. (Defs. June 2004 Reply Mem. at 5.)
Although Defendants contest the admissibility of the Jones declaration due to what they term "Jones' undocumented recollection of evidence," (Defs. June 2004 Reply Mem. at 4), they do not suggest that the Descartes website materials and articles referenced by Jones do not exist or that the quotations contained in Jones' declaration are otherwise inaccurate.
"Summary judgment of non-infringement requires a two-step analytical approach." Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1304 (Fed. Cir. 1999). "First, the claims of the patent must be construed to determine their scope." Id. "[P]roper claim construction requires an examination of the written description and relevant prosecution history to determine the meaning of claim limitations. . . ." Storage Tech. Corp. v. Cisco Sys., Inc., 329 F.3d 823, 831 (Fed. Cir. 2003). "Second, a determination must be made as to whether the properly construed claims read on the accused device." Pitney Bowes, 182 F.3d at 1304.
While the first step is a question of law and the second a question of fact, see id., both steps depend upon evidence not presently on the record in this case, including the relevant prosecution history and evidence concerning the accused devices beyond Gordon's conclusory assertion of non-infringement. Gordon's summarily-stated testimony that none of the accused Descartes products includes key elements required by the claims of ASI's patents fails to provide a sufficient basis on which to perform the two-step analysis required by the Federal Circuit. Summary judgment of non-infringement is, accordingly, inappropriate at this time, as the present record does not support the conclusion that "there is no genuine issue whether the accused device[s are] encompassed by the claims." Id.
Moreover, even if detailed claim construction and the reading of the claims on the accused devices were not required, summary judgment would not be appropriate. Drawing inferences in favor of the nonmoving party, the comparison of the declarations leads to the inevitable conclusion that there remain material issues to be resolved by a trier of fact. Gordon's declaration addressed seven points to establish non-infringement, all of which are contested by Jones on the basis of what he maintains are Descartes' own materials. Additional arguments made in the parties' submissions raise further questions for a trier of fact. A factual conflict has thus been created.
A. "[N]one of the Descartes products notif[ies] a user of the impending arrival of a vehicle." (Gordon Decl. at ¶ 8.)
This assertion by Descartes is in direct conflict with paragraphs 10 through 18 of the Jones declaration. Jones references industry articles reviewed by ASI in preparation for filing suit. Jones notes that Descartes advertises in at least one article that it provides "`the ability to accurately predict'" delivery times. (Declaration of Martin Kelly Jones, dated May 5, 2004 ("Jones Decl."), at ¶ 10.) According to Jones, the same article notes that Descartes allows employees in the field to know "`when all goods are going to arrive at the customer location.'" (Id. at ¶ 11 (emphasis omitted).)
A second article identified by Jones indicates that Descartes' RiMMs feature allows drivers to provide a "`10-minute warning before arriving to drop off an order.'" (Id. at ¶ 12 (emphasis omitted).) A third article indicates that Descartes' route optimization solution gives customers not only delivery time options, but also "a confirmation email giving a 60-minute estimate time of arrival" for the delivery vehicle. (Id. at ¶ 13 (emphasis omitted).) According to Jones, a fourth article reveals that Descartes advertises "`up-to-the-minute arrive and depart updates and estimate[d] arrival and departure times.'" (Id. at ¶ 15 (emphasis omitted).)
According to Jones, Descartes' website itself presents products capable of providing impending arrival notification. For example, a case study provided on the website includes the statement that "a Descartes customer's dispatchers can `monitor pick-up and delivery activities in real-time, compare actual events to original route plans and provide real-time information to customers regarding a driver's actual time of arrival (ETA).'" (Id. at ¶ 14 (emphasis omitted).) Further, the website points out, according to Jones, that the Cargo 2000 product provides both shipment status and departure time reports. (See id. at ¶ 16.)
The website goes on to discuss Descartes' LogiMan product, according to Jones, and states the following:
(a) it has a "powerful tracking engine and configurable alerts functions give you end-to-end insight and control." (b) [Logiman] is designed to track the progress of air cargo as it moves across borders, between forwarders and carriers, and through the world's freight terminals." (c) "Real-time updates are possible and free text comments can be attached to any consignment." (d) "Proactive alerts of shipment status changes or missed milestones are sent to relevant parties."
(Id. at ¶ 17 (emphasis omitted).)
Furthermore, the Jones declaration indicates that ASI reviewed the Descartes description of its Fleetwise Monitor product offering. Fleetwise Monitor is assertedly a part of the integrated Routing and Scheduling Suite of Descartes solutions. According to Jones, the website states the following about Fleetwise Monitor:
(a) "Fleetwise Monitor provides rapid notification of critical events that affect distribution. It offers truly real-time information on an ongoing basis, not just visibility into arrivals at distribution centers or hubs, so proper service expectations can be maintained." (b) "Real-time status: Extends visibility throughout the organization for customer service, transportation managers or dispatchers." (c) "Escalating alerts: Notifies of exceptions outside user-specific tolerances and provides decision support for customer interaction."
(Id. at ¶ 18 (emphasis omitted).)
As all factual inferences must be drawn and all ambiguities resolved in favor of the nonmoving party in addressing a motion for summary judgment, the inference to be drawn here is that Descartes' products may notify a user of the impending arrival of a vehicle.
B. "All of the accused Descartes' products are event-based products. . . . None of the accused Descartes products report the impending arrival of a vehicle at a schedule stop prior to the stop." (Gordon Decl. at ¶ 9.)
ASI contends that exceptions and event-based rules for Descartes include alert messaging solutions that compare shipment departure times, expected travel times, reaching transitional "hubs" by predefined time periods, and final destinations by a preestablished estimated time of arrival. (See Jones Decl. at ¶ 58.) Jones asserts that Descartes' systems are "alerting customers to delays when ETAs change, and alerts when something needs attention so that you can be proactive in fixing it." (Id. (emphasis omitted).) It is asserted that even these arguably "event-based" rules activate messages from and describe events concerning the estimated time of arrival. (See id.) According to Jones, many events within the ASI patents utilize such "event-based" rules, including, but not limited to, prior stops, distance before a destination, time before arrival, delays to estimated times of arrival, driver inputs, and/or user request (from a remote communication device). (See id.) Many of the notifications that Gordon calls "event based" are, ASI contends, in fact, "time-based." Thus, at a minimum there may be substantial overlap between the notions of event-based and time-based notifications.
The inference to be drawn in favor of the non-moving party is that "event-based" and "time-based" events may overlap, such that the attempted distinction being drawn by Defendants is incapable of supporting judgment as a matter of law.
C. "[N]one of the Descartes accused products places a telephone call to a passenger or a user prior to the arrival of a vehicle at a particular stop to provide a notification of that arrival." (Gordon Decl. at ¶ 10.)
Certain of the ASI patents describe telephone calls as the means of communicating the vehicle status messages. (See Jones Decl. at ¶ 20.) In this regard, Descartes has asserted that telephone calls are required by the '760, '010, '260, '542, and '507 Patents. However, ASI contends that the '507 Patent claims describe a "notification" call, not a "telephone call." (Id. at ¶ 21.) Moreover, ASI notes that there are numerous ways in which a telephone call may be made by Descartes' technology. Indeed, one article reviewed by ASI is said to have quoted a high-ranking Descartes employee analogizing Descartes to a local telephone company because the system is always on and one calls whomever one needs to call in order to get the information one requires. (See id. at ¶ 23.) The Descartes system, according to Jones, also forwards messages to end users. (See id.)
Jones asserts that Descartes' website also describes alerts and messages as being sent by Descartes' systems as "fax, email or SITA message" (id. at ¶ 24), formats that are used, according to ASI, to deliver messages to users via mobile (cellular) telephone. In the Descartes materials reviewed by Jones, ASI has noted references to Descartes' support for wireless devices, and enhanced support for wireless capabilities, (see id. at ¶ 25), including the following excerpt taken from Descartes' website:
"Descartes' MobileLink Suite of applications provides integrated 1-way and 2-way wireless communications between dispatchers and drivers for routing planning and dispatch. Mobile devices in the field feed data to a wireless communications server called MobileLine: Gateway to provide a single point of access across multiple networks. Descartes works with key partners to support these wireless capabilities."
(Id. at ¶ 26). According to Jones, that same page of the Descartes website refers to supporting the use of wireless handheld devices and includes a link to Cingular, Nextel and Research in Motion, which companies assertedly provide mobile telecommunications network access for supporting telephone calls between mobile telephones and similar devices for use in mobile telephony. (See id. at ¶¶ 27-28.)
The references taken together supply the inference that certain of the Descartes products may utilize communications to a user prior to the arrival of a vehicle at a particular stop to provide a notification of that arrival.
D. "[N]o Descartes accused product allows a user to specify the amount of time prior to arrival at which a notification call will be made." (Gordon Decl. at ¶ 10.)
In an article referred to by Jones, Descartes' solution for online grocers is described as using the Descartes route optimization solution to give customers delivery time options. (See Jones Decl. at ¶ 13.) Furthermore, the Descartes website describes LogiMan as having, according to Jones, a "`powerful tracking engine and configurable alerts functions [which] give you end-to-end insight and control,'" as well as providing "`[p]roactive alerts of shipment status changes or missed milestones. . . .'" (Id. at ¶ 17 (emphasis omitted).)
The inference drawn here is that Descartes' products may allow a user to specify the amount of time prior to arrival at which a notification call will be made. Moreover, in light of all the other claims of Descartes (i.e., real-time status updates, wireless communication abilities) it is a reasonable inference that the configurable alerts may include a customer-set notification period for an advanced notification.
E. "[N]o Descartes accused product provides an advance notification by ringing a telephone a specified number of times." (Gordon Decl. at ¶ 10.)
According to ASI, a preset number of rings are standard on wireless devices accepting both voice and text messages, and Descartes' LogiMan provides alert and messages sent as a fax, email or SITA message and presented as readable text, Cargo-Imp, EDIFACT or XML message or any other message format. (See Lahnstein Decl. at ¶ 15.) The inferences drawn here are that Descartes' products use wireless devices as the recipient of notification messages, and that these wireless devices may be set to ring a specified number of times, with the number of rings for voice calls being different for text calls.
F. "[N]o Descartes accused product allows users or passengers to request a vehicle at a particular time." (Gordon Decl. at ¶ 10.)
According to Jones, an article about Descartes' solution for online grocers describes the Descartes RiMMs product as giving customers delivery time options. (See Jones Decl. at ¶ 13.) The inference drawn here is simply that users may be able to request a delivery vehicle at a particular time.
G. "[N]one of the accused Descartes products . . . compares the actual and expected time values of a vehicle to predict its arrival . . . [and] none of the accused Descartes products alters the time at which a user is notified of the vehicle's impending arrival based on that comparison. . . ." (Gordon Decl. at ¶ 11.)
According to Jones, Descartes' website offers a case study in providing real-time delivery vehicle driver's estimated time of arrival, and includes a statement that, with "`new wireless capabilities,' a Descartes customer's dispatchers can monitor pickup and delivery activities in real-time, compare actual events to original route plans and provide real time information to customers regarding a driver's actual time of arrival (ETA).'" (Jones Decl. at ¶ 14 (emphasis omitted).)
According to Jones, the Descartes RiMMs product, a part of the Descartes Routing and Scheduling Suite of integrated solutions, is used for assisting online grocers to arrange for deliveries to their customers' homes. (See id. at ¶ 12.) Jones asserts that an article covering this use of RiMMs describes a driver's "`10-minute warning before arriving to drop off an order.'" (Id. (emphasis omitted).)
The inference drawn here is that in each of these examples, the system is comparing the actual and expected time values of a vehicle to predict its arrival and altering the time at which a user is notified of the vehicle's impending arrival based on that comparison.
H. Defendants' Additional Arguments Do Not Demonstrate That Summary Judgment Is Appropriate
Defendants have contended that the ASI patents-in-suit are limited in their coverage to systems that allow a school bus passenger to receive an advance notification with information relating to the location or estimated time of arrival of the bus at a bus stop. ASI argues that its patents specifically apply to delivery vehicles. For example, the '060 Patent states that "`[p]referably, the vehicle 17 is a delivery vehicle for delivering items to a destination or picking items up at a destination.'" (See Jones Decl. at ¶¶ 4-6 (emphasis in original).)
Defendants have also asserted that a cellular network is required of the '936 and '383 Patents. According to ASI, a review of the claims of these two patents suggests the opposite conclusion. (See Jones Decl. at ¶¶ 30-35.)
Defendants have also argued that none of Descartes' accused products use onboard location sensors that track and report the status of a vehicle prior to arrival. ASI has cited a Descartes release to the contrary which states, in relevant part:
Today, the Descartes System Group Inc., (Nasdaq: DSGX), (TSE-DSG), a trusted provider of logistics solutions, introduced MobileLink: Tracker, a new wireless application that uses Global Positioning Satellite (GPS) technology to provide delivery operators with real-time visibility of vehicles and enable in-the-moment decision-making for meeting and responding to customer commitments.
* * * * *
Responding to clients needs for an easy-to-use, hands-free wireless application, MobileLink: Tracker acts as a "black box" and requires no driver interaction to operate. A small device containing a GPS receiver and radio modem is mounted within a vehicle and communicates across radio frequency networks with Descartes' market leading Routing and scheduling solutions — Descartes Roadshow and descartes Fleetwise.
(Id. at ¶ 37 (emphasis omitted).)
A dispute is also presented as to the Descartes products used by Mitsui. Descartes has stated that Mitsui has not bought or used most of the products identified in paragraph 112 of the FAC (20/20 Visibility, Cargo 2000, LogiMan, PC Pro, Supply Chain Snapshot, and Roadshow Transport). Rather, according to Gordon, "Mitsui is licensed to use only one of the accused products at issue in this lawsuit: the 20/20 Visibility product." (Gordon Decl. at ¶ 6.)
According to ASI's review of Descartes' website, 20/20 Visibility, Cargo 2000, LogiMan, PC Pro, Supply Chain Snapshot, and Roadshow Transport comprise part of the Descartes Visibility and Performance Management solution. (See Jones Decl. at ¶ 63.) Descartes' marketing materials state, according to Jones, that "`Descartes' Visibility Performance Management solution has been implemented at Mitsui since November 2001.'" (Id. at ¶ 48 (emphasis omitted).) Moreover, a case study narrative regarding Mitsui, accessible through the Descartes website, according to Jones, states that, "`[a]fter a careful review of technology alternatives, Mitsui USA selected Descartes' Visibility Performance Management solution as the foundation for the Mitsui Logistics Exchange (MLX) — its Internet logistics infrastructure.'" (Id. at ¶ 49 (emphasis omitted).) A further link to a page on the Descartes website states, according to Jones, that the "Visibility Products" include 20/20 Visibility, Cargo 2000, DC Optimizer, Fleetwise Reservations, LogiMan, PC Pro, Roadshow Transport, Summary Balances, Supply Chain Snapshot, and Turnaround Documents. (See id. at ¶ 50.)
The clarity which results from Local Civil Rule 56.1 Statements is lacking here. Drawing inferences in favor of ASI and given the absence of relevant claims construction, a material factual controversy exists, precluding summary judgment.
II. Descartes' Motion For Sanctions Is Denied
Descartes has moved for sanctions against ASI pursuant to Rule 11, Fed.R.Civ.P., on the grounds that ASI failed to perform the pre-filing investigation required by the Federal Circuit.
Rule 11(b) provides in relevant part that, by presenting to the court a pleading, written motion or other paper, an attorney or party proceeding pro se "is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances," the pleading, written motion or other paper is not being presented for any "improper purpose" and the claims, defenses and other legal contentions are "warranted by existing law or by a nonfrivolous argument for the extension, modification of reversal of existing law or the establishment of new law." Fed.R.Civ.P. 11(b). A violation of Rule 11 is thus triggered "when it appears that a pleading has been interposed for any improper purpose, or where, after reasonable inquiry, a competent attorney could not form a reasonable belief that the pleading is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversal of existing law." Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 254 (2d Cir. 1985) (emphasis in original); accord Kropelnicki v. Siegel, 290 F.3d 118, 131 (2d Cir. 2002); see also Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 369 F.3d 91, 97 (2d Cir. 2004) ("Rule 11 sanctions are designed to deter baseless filings. . . .") (citation omitted).
"In evaluating whether the signer of a filing has violated Rule 11, the district court applies an objective standard of reasonableness, examining whether, under the circumstances of a given case, the signer has conducted a "reasonable inquiry" into the basis of a filing." MacDraw, Inc. v. CIT Group Equip. Fin., Inc., 73 F.3d 1253, 1257 (2d Cir. 1992); see also Eastway Const., 762 F.2d at 253 (observing that Rule 11 "explicitly and unambiguously imposes an affirmative duty on each attorney to conduct a reasonable inquiry into the viability of a pleading before it is signed"). With regard to pleadings, the Second Circuit has explained that,
Although Fed.R.Civ.P. 11(b) seeks to ensure, by imposing responsibility on attorneys, that claims are "warranted" and "likely to have evidentiary support after a reasonable opportunity for further investigation or discovery," it makes clear by the latter quoted phrase that a plaintiff is not required to know at the time of pleading all facts necessary to establish the claim. See O'Brien v. Alexander, 101 F.3d 1479, 1489 (2d Cir. 1996) (a sanction under Rule 11(b) may not be imposed for failure to make reasonable inquiry "unless a particular allegation is utterly lacking in support").Commercial Cleaning Servs., L.L.C. v. Colin Serv. Sys., Inc., 271 F.3d 374, 386 (2d Cir. 2001).
In the context of patent infringement actions, the Federal Circuit has interpreted Rule 11 to require, "at a minimum, that an attorney interpret the asserted patent claims and compare the accused device with those claims before filing a claim alleging infringement." Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1300-01 (Fed. Cir. 2004). "The presence of an infringement analysis plays the key role in determining the reasonableness of the pre-filing inquiry made in a patent infringement case under Rule 11." View Eng'g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed Cir. 2000); see also Q-Pharma, 360 F.3d at 1302 (observing that "our case law makes clear that the key factor in determining whether a patentee performed a reasonable pre-filing inquiry is the presence of an infringement analysis" and explaining that "an infringement analysis can simply consist of a good faith, informed comparison of the claims of a patent against the accused subject matter"). The courts have declined to impose any special, pre-filing investigation requirements upon the plaintiff in patent cases independent of Rule 11. See, e.g., Ulead Sys., Inc. v. Lex Computer Mgmt. Corp., 351 F.3d 1139, 1150 (Fed. Cir. 2003).
Descartes argues that no objectively reasonable attorney who had conducted the required pre-filing investigation would have believed that the accused Descartes products contain every element of the asserted patent claims. In other words, according to Descartes, even a cursory examination of the patents-in-suit and the allegedly offending products would have revealed that infringement was impossible, since none of the accused Descartes products include the elements of an advance notification system or notify passengers that a vehicle such as a bus is about to arrive. Descartes further argues that Mitsui has not bought or used most of the products that ASI alludes to in the FAC, which fact alone, according to Descartes, demonstrates that ASI did not fully investigate its claims prior to commencing this action. Descartes surmises that either ASI and its counsel did not perform an infringing analysis or such an analysis was performed and, notwithstanding the analysis, a lawsuit was filed.
Descartes has relied on two principal authorities in support of its motion, View Engineering, Inc. v. Robotic Vision Systems, Inc., 208 F.3d 981 (Fed. Cir. 2000), and Judin v. United States, 110 F.3d 780 (Fed. Cir. 1997). In View Engineering, the Federal Circuit explained that,
Rule 11 . . . must be interpreted to require the law firm to, at a bare minimum, apply the claims of each and every patent that is being brought into the lawsuit to an accused device and conclude that there is a reasonable basis for a finding of infringement of at least one claim of each patent so asserted.View Eng'g, 208 F.3d at 986 (affirming the district court's imposition of Rule 11 sanctions where counsel had "performed neither a formal nor an informal analysis of any sort" and thus failed to conduct a "reasonable inquiry for the purpose of filing patent infringement claims"). In Judin, the Federal Circuit, applying a rule of the Court of Federal Claims modeled after Rule 11, Fed.R.Civ.P., concluded that the plaintiff "had failed to meet the minimum standards imposed by Rule 11," where neither the plaintiff nor his counsel "had made a reasonable effort to ascertain whether the accused devices satisfied the two key claim limitations." Judin, 110 F.3d at 784 (noting that "[n]o adequate explanation was offered for why they failed to obtain, or attempted to obtain, a sample of the accused device from the Postal Service or a vendor so that its actual design and functioning could be compared with the claims of the patent").
More recently, however, in Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295 (Fed. Cir. 2004), the Federal Circuit declined to impose Rule 11 sanctions where the defendant argued that no reasonable pre-filing investigation had taken place. Distinguishing its earlier decision in View Engineering, the Court held that sanctions were warranted in that case "because the patentee had not performed any claim construction analysis or an infringement analysis prior to filing its counterclaim for infringement." Q-Pharma, 360 F.3d at 1302 (noting that patentee Q-Pharma had not relied solely on advertising but has also relied "on its own comparison of the asserted claims with the accused product"). The Q-Pharma Court determined that Judin was likewise distinguishable, stating that "in Judin, we concluded that the district court abused its discretion in not awarding sanctions because the patentee had not attempted to obtain a sample of the accused product and had not compared the accused device with the patent claims prior to filing suit." Id. (observing that Q-Pharma had actually obtained a sample of the accused product and rejecting the defendant's argument that a chemical analysis of the accused product should have been conducted prior to filing the action).
Based upon Q-Pharma and its interpretation of earlier Federal Circuit precedent, Descartes' motion for sanctions fails. Here, ASI performed claim construction analysis and infringement analysis prior to filing. (See Declaration of Steven G. Hill, dated May 10, 2004 ("Hill Decl."), at ¶¶ 6-8.) According to counsel for ASI, both ASI and its outside counsel reviewed and discussed hundreds of pages of publicly available material regarding Descartes' technology and prepared detailed claim charts analyzing the Descartes products against certain independent and dependent claims of each of the various ASI patents-in-suit. (See id.) The holding of View Engineering is thus inapplicable to the facts here. The evidence of record also demonstrates that here, unlike in Judin, ASI attempted to obtain a sample of the accused software prior to filing by asking for source code, user manuals and system administration guides. (See Hill Decl. at ¶¶ 6, 9-11.)
The Federal Circuit has held that where a patentee has requested information concerning purportedly infringing products and that request has been rebuffed or rejected by the party subsequently named a defendant, the filing of a lawsuit was not sanctionable. See Hoffmann-La Roche Inc. v. Invamed Inc., 213 F.3d 1359, 1363-65 (Fed. Cir. 2000). As the Court stated in that case:
It is difficult to imagine what else [the plaintiffs] could have done to obtain facts relating to [the defendant's] alleged infringement of their process patents. [The defendant] has pointed to nothing else that it believes they could or should have done. Its position apparently is that because they were unable to obtain and set forth in their complaint facts showing infringement, they should not have filed suit at all.
The district court correctly rejected that theory.
Hoffman-La Roche, 213 F.3d at 1364 (noting that if the defendant "initially had told [the plaintiffs], under a confidentiality agreement, the process used to manufacture the drug — as it subsequently did — it could have avoided this litigation and the expenses incurred in defending it").
Here, ASI advised Descartes by letter dated November 21, 2003 that, if Descartes did not wish to license ASI's patents, ASI wanted to review Descartes' technical documentation. (See Hill Decl. at ¶¶ 9-11.) However, Descartes did not deny infringement and it did not produce any of the technical documentation to show the inner-workings of its products either, instead indicating in a letter dated December 5, 2003 its receipt of ASI's letter and that it would respond in "due course." (Hill Decl., Exh. B.) Although Descartes did not refuse to produce such documentation, as did the defendant in Hoffman-La Roche, it also gave no indication whether such documentation might be forthcoming. While both parties might have been well served by engaging in further correspondence or discussion between December 5, 2003 and January 9, 2004, under the circumstances present here, ASI's decision to file this action is not sanctionable.
III. ASI's Motion for a Continuance Is Denied
ASI has moved for a continuance pursuant to Rule 56(f), Fed.R.Civ.P., and has submitted a declaration in support of its motion. Rule 56(f), Fed.R.Civ.P., provides that when a party facing an adversary's motion for summary judgment reasonably advises the court that it needs discovery to be able to present facts needed to defend the motion, the court should defer decision of the motion until the party has had the opportunity to take discovery and rebut the motion. See Commercial Cleaning Servs., 271 F.3d at 386 (citing Hellstrom v. U.S. Dep't of Veteran's Affairs, 201 F.3d 94, 97 (2d Cir. 2000); Meloff v. New York Life Ins. Co., 51 F.3d 372, 375 (2d Cir. 1995)).
As a material factual controversy exists precluding summary judgment, ASI's motion for a continuance in order to develop facts with which to defend against Defendants' motion for summary judgment is denied as moot.
Conclusion
Defendants' motion for summary judgment is denied at this time with leave to renew. Descartes' motion for sanctions is denied, as is ASI's motion for a continuance.
It is so ordered.