Opinion
Case No. 18-cv-05031-EMC
2021-07-07
HONG KONG UCLOUDLINK NETWORK TECHNOLOGY LIMITED, et al., Plaintiffs, v. SIMO HOLDINGS INC., et al., Defendants.
Edward V. Anderson, SheppardMullin LLP, Trevor John Quist, Sheppard, Mullin, Richter & Hampton LLP, Palo Alto, CA, Robert M. Masters, Pro Hac Vice, Kevin A. Ryan, Pro Hac Vice, Jonathan Richard DeFosse, Pro Hac Vice, Sheppard, Mullin, Richter and Hampton LLP, Washington, DC, Kayvan Bakhtiari Noroozi, Noroozi PC, Los Angeles, CA, for Plaintiff Hong Kong uCloudlink Network Technology Limited. Edward V. Anderson, SheppardMullin LLP, Trevor John Quist, Sheppard, Mullin, Richter & Hampton LLP, Palo Alto, CA, Robert M. Masters, Pro Hac Vice, Kevin A. Ryan, Pro Hac Vice, Jonathan Richard DeFosse, Pro Hac Vice, Sheppard, Mullin, Richter and Hampton LLP, Washington, DC, for Plaintiff uCloudlink (America), Ltd. Benjamin E. Weed, KLGates LLP, Farris Suhail Matariyeh, Pro Hac Vice, Gina Alyse Johnson, KL Gates LLP, Chicago, IL, Harold H. Davis, Jr., Greenberg Traurig, Peter Edward Soskin, K&L Gates LLP, Lei Howard Chen, Yang Liu, Greenberg Traurig, LLP, San Francisco, CA, Jeffrey C. Johnson, KL Gates LLP, Seattle, WA, for Defendants SIMO Holdings Inc., Skyroam, Inc.
Edward V. Anderson, SheppardMullin LLP, Trevor John Quist, Sheppard, Mullin, Richter & Hampton LLP, Palo Alto, CA, Robert M. Masters, Pro Hac Vice, Kevin A. Ryan, Pro Hac Vice, Jonathan Richard DeFosse, Pro Hac Vice, Sheppard, Mullin, Richter and Hampton LLP, Washington, DC, Kayvan Bakhtiari Noroozi, Noroozi PC, Los Angeles, CA, for Plaintiff Hong Kong uCloudlink Network Technology Limited.
Edward V. Anderson, SheppardMullin LLP, Trevor John Quist, Sheppard, Mullin, Richter & Hampton LLP, Palo Alto, CA, Robert M. Masters, Pro Hac Vice, Kevin A. Ryan, Pro Hac Vice, Jonathan Richard DeFosse, Pro Hac Vice, Sheppard, Mullin, Richter and Hampton LLP, Washington, DC, for Plaintiff uCloudlink (America), Ltd.
Benjamin E. Weed, KLGates LLP, Farris Suhail Matariyeh, Pro Hac Vice, Gina Alyse Johnson, KL Gates LLP, Chicago, IL, Harold H. Davis, Jr., Greenberg Traurig, Peter Edward Soskin, K&L Gates LLP, Lei Howard Chen, Yang Liu, Greenberg Traurig, LLP, San Francisco, CA, Jeffrey C. Johnson, KL Gates LLP, Seattle, WA, for Defendants SIMO Holdings Inc., Skyroam, Inc.
PUBLIC REFILING
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT ON NO INVALIDITY OR UNENFORCEABILITY
Docket No. 233
EDWARD M. CHEN, United States District Judge Plaintiffs are various uCloudlink entities ("UCL"). UCL has sued various Skyroam entities ("Skyroam") for patent infringement. Initially, UCL based its case on two different patents. However, the parties’ dispute with respect to one patent was resolved, see Docket Nos. 136-37 (stipulation and order regarding partial dismissal with respect to the ‘066 patent), thus leaving only the ‘780 patent at issue. Currently pending before the Court is UCL's motion for summary judgment on no invalidity or unenforceability.
Having considered the parties’ briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby GRANTS in part and DENIES in part the motion for summary judgment.
I. FACTUAL & PROCEDURAL BACKGROUND
Claim 1 of the ‘780 patent provides as follows :
The ‘780 patent has a total of six claims, all of which are at issue in this case. Claim 1 is the only independent claim.
A subscriber identity module (SIM)-based service sharing system, comprising:
at least one SIM card read-and-write device , configured to simulate a read-and-write process performed by a local user equipment of a SIM card providing service sharing to a physical SIM card, wherein at least one SIM card providing service is insertable in the at least one SIM card read-and-write device;
a SIM scheduling management system configured to select appropriate SIM from the at least one SIM card inserted in the at least one SIM card read-and-write device according to the location of a user equipment and the type of a service requested by a subscriber, and assign the appropriate SIM to the subscriber; and
at least one multi-channel communication , configured to communicate with the SIM scheduling management system to acquire the appropriate SIM assigned by the SIM scheduling management system, and communicate with a service provider system corresponding to the appropriate SIM assigned by the SIM scheduling management system to acquire the service requested by the subscriber;
wherein the appropriate SIM is a smart card having the SIM function or SIM data;
the SIM scheduling management system comprises:
a SIM database configured to store SIM data on the at least one SIM card of the at least one SIM card read-and-write device;
a subscriber access unit configured to receive a service request from the multi-channel communication device, return the SIM card parameter assigned to the subscriber to the multi-channel communication device, receive an authentication data packet of the SIM card parameter from the multi-channel communication device, and return a corresponding authentication result to the multi-channel communication device;
a SIM scheduling unit , configured to search, according to the service request received by the subscriber access management unit, in the SIM database data to select appropriate SIM, and return a corresponding SIM card parameter to the subscriber access management unit;
a SIM card read-and-write management unit , configured to transfer the authentication data packet of the SIM card parameter received from the subscriber access management unit to the at least one SIM card read-and-write device, and return an authentication result calculated by the at least one SIM card read-and-write device to the subscriber access management unit.[ ]
This specific element of the claim is commonly referred to by the parties as element 1g. See Mot. at 11, 14.
‘780 patent, claim 1 (emphasis added).
II. DISCUSSION
A. Legal Standard
Federal Rule of Civil Procedure 56 provides that a "court shall grant summary judgment [to a moving party] if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). An issue of fact is genuine only if there is sufficient evidence for a reasonable jury to find for the nonmoving party. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "The mere existence of a scintilla of evidence ... will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party]." Id. at 252, 106 S.Ct. 2505. At the summary judgment stage, evidence must be viewed in the light most favorable to the nonmoving party and all justifiable inferences are to be drawn in the nonmovant's favor. See id. at 255, 106 S.Ct. 2505.
Where a party moves for summary judgment based on a claim or defense for which the opposing party bears the burden of proof, the moving party need only point to the opposing party's failure "to make a showing sufficient to establish the existence of an element essential to [the plaintiff's] case." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
In the instant case, patent invalidity and unenforceability are affirmative defenses that Skyroam, as the alleged infringer, has the burden of proving. See Impax Labs., Inc. v. Aventis Pharm., Inc. , 468 F.3d 1366, 1378 (Fed. Cir. 2006) ("An issued patent is presumed to be valid, and the burden of establishing invalidity as to any claim of a patent rests upon the party asserting such invalidity."). "Clear and convincing evidence is required to invalidate a patent." Id.
When evaluating a motion for summary judgment, the court views the record evidence through the prism of the evidentiary standard of proof that would pertain at a trial on the merits.... Thus, ... a moving party seeking to have a patent held not invalid at summary judgment must show that the nonmoving party, who bears the burden of proof at trial, failed to produce clear and convincing evidence on an essential element of a defense upon which a reasonable jury could invalidate the patent.
Eli Lilly & Co. v. Barr Labs., Inc. , 251 F.3d 955, 962 (Fed. Cir. 2001) (emphasis added). To defeat summary judgment, the nonmoving party need only "come forward with evidence sufficient to establish a genuine issue of material fact regarding that essential element." Duramed Pharm., Inc. v. Watson Labs., Inc. , 413 F. App'x 289, 292 (Fed. Cir. 2011) ; see also Freedman Seating Co. v. Am. Seating Co. , 420 F.3d 1350, 1363 (Fed. Cir. 2005) (stating that district court erred by holding that summary judgment for plaintiff-patent holder was appropriate because defendant-alleged infringer had failed to prove invalidity by clear and convincing evidence; since "it was [plaintiff] who moved for summary judgment[,] ... [defendant] only needed to show the existence of a genuine issue of material fact in order to preclude summary judgment for [plaintiff]").
B. Invalidity
According to Skyroam, UCL's ‘780 patent is invalid based on (1) anticipation, (2) obviousness, and (3) inadequate written description. In its motion for summary judgment, UCL argues that summary judgment should be issued in its favor on each of these affirmative defenses.
1. Anticipation
Under the Patent Act, "[a] person shall be entitled to a patent unless ... the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention." 35 U.S.C. § 102(a)(1). In other words, a patent claim is invalid if it is anticipated by prior art.
A patent claim is invalid as anticipated only if each and every element of the claim is expressly or inherently disclosed in a single prior art reference. An element may be inherently disclosed only if it "is ‘necessarily present,’ not merely probably or possibly present, in the prior art." Anticipation is a question of fact ....
Guangdong Alison Hi-Tech Co. v. ITC , 936 F.3d 1353, 1363-64 (Fed. Cir. 2019).
In the instant case, Skyroam asserts that four different pieces of prior art anticipated the claims of the ‘780 patent:
(1) Skyroam's own product known as 3Gmate;
(2) Skyroam's ‘735 patent (hereinafter primarily referred to as "Liu");
(3) the ‘501 patent (hereinafter referred to as "Barker"); and
(4) U.S. Patent Publication No. 2013/0130676 (hereinafter referred to as "Manso").
Each of these prior art references is addressed below.
a. Skyroam's 3Gmate Product
Skyroam contends that its very own product 3Gmate was on sale, in public use, or otherwise available to the public before the effective filing date of the ‘780 patent – i.e. , December 13, 2013. Skyroam's basic theory seems to be that, since UCL has claimed that the accused products infringe, then 3Gmate – the apparent predecessor of those products – must be anticipatory prior art because the basic technology in 3Gmate is the same as that in the accused products. See Quist Decl., Ex. 8 (Wolfe Invalidity Rpt., Ex. A-1, at 2) (stating that, "to the extent the 3GMate+ or Solis products are found contain claim elements of the ‘780 patent, these claim elements are also anticipated and/or rendered obvious by the 3GMate product"); Weed Decl., Ex. E (Qin Depo. at 29) (indicating that the 3Gmate technology is "fundamentally ... the same" as the technology in 3Gmate+).
i. On Sale
In its motion, UCL argues first that it is entitled to summary judgment because Skyroam cannot produce clear and convincing evidence that 3Gmate was, in fact, on sale prior to December 13, 2013. This argument is problematic because Skyroam has shown the existence of a genuine issue of material fact on whether 3Gmate was on sale prior to this date. Specifically, Skyroam has provided evidence that 3Gmate was on sale to customers such as [Redacted] and [Redacted] prior to December 13, 2013.
Regarding [Redacted] UCL argues that this customer "was merely involved in the experimental use (testing) of the 3Gmate device" and, even though "[Redacted] reimbursed Skyroam for certain costs associated with the testing, such payments do not automatically transform experimental use into commercial use." Reply at 2-3. See generally Barry v. Medtronic, Inc. , 914 F.3d 1310, 1321 (Fed. Cir. 2019) (stating that " ‘[t]he law has long recognized the distinction between inventions put to experimental use and products sold commercially’ "). Although UCL is correct that some communications between Skyroam and [Redacted] indicate testing of some kind was taking place, it is a question of fact as to whether what was involved was actually experimental testing or rather something along the lines of testing "to determine suitability for a customer's particular ... need," LaBounty Mfg. v. United States ITC , 958 F.2d 1066, 1074 (Fed. Cir. 1992), or "market testing where the inventor is attempting to gauge consumer demand for his claimed invention." In re Smith , 714 F.2d 1127, 1135 (Fed. Cir. 1983) (adding that the purpose of market testing is "commercial exploitation and not experimentation"); see also 3M v. Kent Indus. , 274 F. Supp. 993, 999 (E.D. Mich. 1967) (stating that the tests "were strictly customer approval tests to satisfy the Navy that the material offered for sale would be suitable"; "[s]uch customer testing is no different than the potential purchaser's ‘test drive’ of an automobile or his trying on of a suit in a clothing store to see if it is satisfactory") (emphasis in original); cf. SmithKline Beecham Corp. v. Apotex Corp. , 365 F.3d 1306, 1318 (Fed. Cir. 2004) (stating that, "after the invention is reduced to practice, further testing will not qualify as experimental use for purposes of negating a bar under § 102(b)"). As for [Redacted] UCL contends that the [Redacted] dealings were too preliminary in nature – i.e. , that they were not sufficiently concrete in nature to be characterized as a commercial sale or offer for sale. See Reply at 3 n.1; see also Hamilton Beach Brands, Inc. v. Sunbeam Prods. , 726 F.3d 1370, 1375 (Fed. Cir. 2013) (noting that an offer to sell must be " ‘sufficiently definite that another party could make a binding contract by simple acceptance’ "). But, as above, Skyroam has raised a genuine dispute of material fact. There is deposition testimony that "[Redacted]t." Weed Decl., Ex. M (at ECF Page 10 of 12) (updates to deposition responses).
The Court also takes note that
the experimental use defense is very narrow and strictly limited.... [T]he defense [is] very narrow and limited to actions performed "for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry." Further, use does not qualify for the experimental use defense when it is undertaken in the "guise of scientific inquiry" but has "definite, cognizable, and not insubstantial commercial purposes." ... [U]se is disqualified from the defense if it has the "slightest commercial implication." Moreover, use in keeping with the legitimate business of the alleged infringer does not qualify for the experimental use defense.
Madey v. Duke Univ. , 307 F.3d 1351, 1362 (Fed. Cir. 2002).
Although the Court agrees with Skyroam that there is a genuine dispute of fact as to whether 3Gmate was on sale prior to December 2013, 3Gmate cannot be invalidating prior art unless Skyroam can also show – or at least establish a genuine dispute of fact – that 3Gmate practiced each of the limitations of the ‘780 patent. Critical here is that Skyroam must provide some evidence showing that the version of 3Gmate that was on sale prior to December 13, 2013 , practiced each of the limitations of the ‘780 patent. Here, Skyroam has failed to create a genuine dispute of fact.
The Court acknowledges that Skyroam's expert, Dr. Wolfe, has provided an invalidity analysis based on 3Gmate. But, as UCL argues, Dr. Wolfe "relies on an amalgamation of design documents, many from after December 2013, and some as late as 2016" such as the Skyroam Technology Guide from 2016 (Bates stamped SIMO_0014166). Mot. at 8. And even though there is testimony from a Skyroam employee that the 3Gmate technology is the same as that described in the 2016 Skyroam Technology Guide, see Weed Decl., Ex. U (Qin Depo. at 40-41), testimonial evidence alone is insufficient to support invalidity but rather must be corroborated. See, e.g., Finnigan Corp. v. Int'l Trade Comm'n , 180 F.3d 1354, 1366-67 (Fed. Cir. 1999) ("The law has long looked with disfavor upon invalidating patents on the basis of mere testimonial evidence absent other evidence that corroborates that testimony...."); id. at 1366 ("Mere testimony concerning invalidating activities is received with further skepticism because such activities are normally documented by tangible evidence such as devices, schematics, or other materials that typically accompany the inventive process."). Here, there is nothing concrete to corroborate the employee's testimony. For example, there is no evaluation of the 3Gmate source code – specifically, as it existed prior to December 2013 – to assess its similarity to the 2016 technology. Potentially, this was not done because, as Skyroam employees indicated in their depositions, new upgrades were made to products "every week" which would make it difficult to establish the timing of changes. See Quist Decl., Ex. 19 (Liu Depo. at 120); see also Quist Reply Decl., Ex. 28 (Qin Depo. at 57) (testifying that the backend system is upgraded "all the time" and that "[i]t's not, like, you know, we only have one version, stop there[;] [i]t will just keep evolving").
At the hearing, Skyroam argued that documentary evidence on "old" prior art is often difficult to locate. This is undoubtedly true. Nevertheless, that does not mean Skyroam is not obligated to provide corroborative evidence sufficient to raise a genuine dispute of fact. Furthermore, in the case at bar at least, the prior art at issue, even if old, is Skyroam's own product, which should have lessened the burden on Skyroam.
Furthermore, in its papers, Skyroam has not explained how there is any corroborative evidence. For example:
• Although there appears to be a slide presentation on 3Gmate before December 2013, see Weed Decl., Ex. N (email written by Jing Liu/Skyroam, dated February 22, 2013) (attaching slide presentation), Skyroam has not demonstrated that the presentation covers each of the limitations of the ‘780 patent is met.
• Similarly, Skyroam has not established that Dr. Wolfe's invalidity chart related to 3Gmate (Ex. A-1 of his invalidity report) demonstrated how each element is attached to a date before December 13, 2013. Notably, even if the Court were to credit the 2016 Skyroam Technology Guide as being applicable to 3Gmate as it existed before December 13, 2013, Skyroam still has not shown that all of the elements are satisfied. See, e.g. , Opp'n at 7 (asserting that "Dr. Mahon [UCL's expert] cites to SIMO_0014166, a document that Ray Qin confirmed encompasses the 3GMate technology, to support numerous claim elements in his infringement report") (emphasis added); Opp'n at 8 (arguing that, in its infringement contentions, "uCloudlink cites numerous pre critical date documents ... to support its position for nearly every element of the asserted patent" and "uCloudlink's expert did the same") (italics in original; bold added).
Accordingly, the Court concludes that Skyroam has failed to raise a genuine dispute of material fact with respect to 3Gmate being anticipatory prior art. UCL is entitled to summary adjudication on this issue.
b. Liu (Skyroam's ‘735 Patent), Barker, and Manso
For the remaining prior art references that Skyroam claims are anticipatory – i.e. , Liu, Barker, and Manso – UCL makes three arguments in favor of summary judgment: (1) Skyroam relies on the opinion of its expert, Dr. Wolfe, but his opinion is too conclusory; (2) Skyroam has failed to show that each of the references contains what the parties refer to as element "1g"; and (3) Skyroam has failed to show that the references "disclose the elements of the invention as arranged in the claim." Mot. at 16 (emphasis in original).
i. Conclusory Expert Opinion
UCL's first argument is that Dr. Wolfe's invalidity opinions (in particular, as expressed in his expert report) are too conclusory. UCL primarily criticizes Dr. Wolfe for doing two things in his expert report: (1) identifying an element in a prior art reference that allegedly satisfies a limitation in the ‘780 patent but without explaining how the limitation is satisfied other than (2) providing a block quotation from the prior art reference. See Mot. at 12. But contrary to what UCL suggests in its papers, there is no rule against block quoting per se. Cf. Med. Instrumentation & Diagnostics Corp. v. Elekta AB , 344 F.3d 1205, 1222 (Fed. Cir. 2003) (holding that district court erred in finding that defendant failed to demonstrate the existence of an issue of material fact on obvious; noting, inter alia , that "[defendant's] expert's declaration quotes from several prior art articles that expressly discuss the combination of stereotaxy with computer imaging technologies"). Indeed, even the case cited by UCL does not clearly support such a proposition. See Bradley v. Applied Marine Sys. LLC , No. 13-cv-03941-JSC, 2015 WL 433204, at *5, 2015 U.S. Dist. LEXIS 12085, at *13-14 (N.D. Cal. Feb. 2, 2015) (noting that defendant "only cited to two particular portions of the ‘216 Patent which it contends claim the same functionality as the ‘520 Patent" and "otherwise simply quoted wholesale from the ‘216 Patent" "without specific citations").
Furthermore, cases finding an expert's opinion is too general or conclusory entail situations where far less information is provided by the expert. See e.g., Motorola, Inc. v. Interdigital Tech. Corp. , 121 F.3d 1461, 1473 (Fed. Cir. 1997) (stating that "[a]n expert's conclusory testimony, unsupported by the documentary evidence , cannot supplant the requirement of anticipatory disclosure in the prior art reference itself") (emphasis added); Biotec Biologische Naturverpackungen GmbH v. Biocorp, Inc. , 249 F.3d 1341, 1354 (Fed. Cir. 2001) (rejecting defendants’ argument that expert's express mentioning of prior art reference "without analysis[ ] raised a material issue concerning patent validity"; "[t]hat an otherwise unexplained patent was ‘expressly mentioned’ by the affiant does not provide the substance that precedent and practice require of summary judgment proceedings"); Cytologix Corp. v. Ventana Med. Sys. , 424 F.3d 1168, 1176 (Fed. Cir. 2005) (finding expert testimony on lack of written description "general and conclusory" because it "consist[ed] of little more than the statement ‘I believe that the claim would be invalid, because I can't find any support for [the claim] in the specification’ "); cf. Semiconductor Energy Lab. Co. v. Chi Mei Optoelectronics Corp. , 531 F. Supp. 2d 1084, 1109 (N.D. Cal. 2007) (stating that "[r]eviewing the Invalidity Contentions and expert report, it is apparent that CMO has provided detailed citations to prior art rather than conclusory statements").
In addition, in spite of UCL's criticisms, it is telling that UCL's own expert often took a similar approach in his own expert report. See Weed Decl., Ex. C (Mahon Infringement Rpt. ¶ 318)(in finding a claim limitation satisfied by Accused System, largely replicating claim language with references to certain parts of Accused System and then quoting from a Skyroam Technology Guide).
Finally, in spite of what it argues in its papers, UCL could not have found Dr. Wolfe's expert report overly lacking in specifics because it nevertheless proceeded to take his deposition without first seeking relief from this Court. If Dr. Wolfe's report provided adequate notice to UCL as to what the basis of his opinions were for purposes of his deposition, then it strains credulity to now assert it is so conclusory so as to justify summary judgment. Cf. Slot Speaker Techs., Inc. v. Apple, Inc. , No. 13-cv-01161-HSG (DMR), 2017 WL 235049 at *3, 2017 U.S. Dist. LEXIS 8414 at *7-8 (N.D. Cal. Jan. 19, 2017) (noting that "[c]ourts in this district have rejected [patent-related] contentions that do not provide adequate notice of a party's theory"); Avago Techs. Gen. IP PTE Ltd. v. Elan Microelectronics Corp. , No. C04-05385 JW (HRL), 2007 WL 951818, at *3, 2007 U.S. Dist. LEXIS 97464, at *8 (N.D. Cal. Mar. 27, 2007) (stating that, "in providing invalidity contentions under the Patent Local Rules, Elan has provided Avago with adequate claim charts and the corresponding page references of the prior art that relate to the elements of the asserted claims[;] [t]he charts identify specifically in each prior art reference the pages corresponding to the element of each asserted claim in accordance with 3-3(c)").
Accordingly, the Court rejects UCL's assertion that Dr. Wolfe's report is too conclusory.
ii. Element "1g"
UCL argues next that there is no genuine dispute that each of the prior art references does not disclose what the parties refer to as element "1g" of the ‘780 patent. Element 1g is the seventh element of claim 1 – the last element. Claim 1 provides in relevant part:
A subscriber identity module (SIM)-based service sharing system, comprising:
at least one SIM card read-and-write device, ... wherein at least one SIM card providing service is insertable in the at least one SIM card read-and-write device;
a SIM scheduling management system configured to select appropriate SIM from the at least one SIM card inserted in the at least one SIM card read-and-write device according to the location of a user equipment and the type of a service requested by a subscriber, and assign the appropriate SIM to the subscriber; and
at least one multi-channel communication, configured to communicate with the SIM scheduling management system to acquire the appropriate SIM ...;
wherein the appropriate SIM is a smart card having the SIM function or SIM data;
the SIM scheduling management system comprises:
[1d] a SIM database configured to store SIM data on the at least one SIM card of the at least one SIM card read-and-write device;
[1e] a subscriber access unit configured to receive a service request from the multi-channel communication device, return the SIM card parameter assigned to the subscriber to the multi-channel communication device, receive an authentication data packet of the SIM card parameter from the multi-channel communication device, and return a corresponding authentication result to the multi-channel communication device;
[1f] a SIM scheduling unit, configured to search, according to the service request received by the subscriber access management unit, in the SIM database data to select appropriate SIM, and return a corresponding SIM card parameter to the subscriber access management unit;
[1g] a SIM card read-and-write management unit, configured to transfer the authentication data packet of the SIM card parameter received from the subscriber access management unit to the at least one SIM card read-and-write device, and return an authentication result calculated by the at least one SIM card read-and-write device to the subscriber access management unit.
‘780 patent, claim 1 (emphasis added). According to UCL, the SIM card read-and-write management unit in 1g "acts as an intermediary to facilitate the authentication of a SIM card. The claims require a specific flow of authentication information to and from this component and other components of the virtual SIM system (e.g., the ‘subscriber access management unit’ and the ‘SIM card read-and-write device’)." Mot. at 14.
(a) Liu (‘735 Patent)
Skyroam's expert, Dr. Wolfe has opined that Liu discloses element 1g:
Liu 735 discloses a SIM card read-and-write management unit (e.g., "administration system 116" ), configured to transfer the authentication data packet (e.g., request at step 806) of the SIM card parameter received from the subscriber access management unit to the at least one SIM card read-and-write device, and return an authentication result
(e.g., response at step 812) calculated by the at least one SIM card read-and-write device to the subscriber access management unit.
Weed Decl., Ex. 9 (Wolfe Invalidity Rpt., Ex. A-2, at 40) (emphasis added). The following figure is FIG. 8 from Liu.
In its motion, UCL contends that there is no genuine dispute of fact that Liu does not contain element 1g because " ‘step 806’ and ‘step 812’ [in Liu] involve communications between the ‘administration system 116’ and a ‘client 106,’ not ... between a ‘SIM card read and write management unit’ and a ‘subscriber access management unit.’ " Mot. at 14.
As a comparison, below is FIG. 8 from the ‘780 patent.
(The subscriber access management unit is part of the SIM scheduling management system.)
In response to UCL's motion, Skyroam makes what is, in essence, a claim construction argument. It contends that UCL has construed the patent in such a way that the patent is not so much concerned about structure as functionality. In other words, even though the SIM scheduling management system as claimed in element 1g is described as having four components – the SIM database, the SIM scheduling unit, the subscriber access unit, and the SIM read-and-write management unit – UCL has indicated that a single structure can perform the functions of more than one of those components. In other words, "double counting" is permitted under the patent. See Opp'n at 15 (asserting that "double counting ‘780 Patent components is acceptable").
The Court finds Skyroam's claim construction position persuasive. As a general matter, "the same structure can satisfy more than one limitation in a patent claim unless the claim specifies otherwise." Kroy IP Holdings, LLC v. Safeway, Inc. , 107 F. Supp. 3d 656, 669 (E.D. Tex. 2015) ; cf. Intellectual Prop. Dev., Inc. v. UA-Columbia Cablevision of Westchester, Inc. , 336 F.3d 1308, 1320 n.9 (Fed. Cir. 2003) (stating that "we see no reason why, as a matter of law, one claim limitation may not be responsive to another merely because they are located in the same physical structure"; citing In re Kelley , 49 CCPA 1359, 305 F.2d 909, 915-16 (1962), for the proposition that "two limitations hypothetically can read on the same structure"). Here, nothing in the ‘780 patent indicates that "double counting" is not allowed. Indeed, as Skyroam contends, both UCL and its expert, Dr. Mahon, have engaged in double counting. See, e.g. , Weed Decl., Ex. A (in UCL's unamended infringement contentions, citing Skyroam's central server as providing the functionality of the claimed SIM scheduling management system (page 10), the SIM scheduling unit (page 52), the subscriber access unit (pages 43, 47, 52), and the SIM card read-and-write management unit (page 54)); Weed Decl., Ex. C (Mahon Infringement Rpt. ¶¶ 176, 318) (double counting Skyroam's "Virtual SIM server" as both the SIM scheduling management system and the SIM card read-and-write management unit). Furthermore, even if it may be desirable to "decouple" components, as Dr. Mahon suggested in his rebuttal/validity report, see Quist Reply Decl., Ex. 29 (Mahon Rebuttal/Validity Rpt. ¶¶ 137-38) (testing that "Liu 735 does not disclose the optimal arrangement of the ‘subscriber access [management] unit,’ ‘SIM scheduling unit,’ and ‘SIM card read-and-write management unit’ "; "[w]ith the claimed architecture, major components of the back-end are decoupled in a manner that enables enhanced scalability of the functions offered by the back-end system") (emphasis added), that does not mean that, under the patent, the various components cannot be put into a single component that performs multiple functions.
Because the Court agrees that double counting under the patent is permitted, the Court finds that there is a genuine dispute of material fact as to whether Liu satisfies the 1g element.
(b) Barker
UCL argues next that there is no genuine dispute that Barker is not anticipatory prior art because it does not practice element 1g – indeed, the PTAB denied Skyroam's petition for inter partes review because of this problem. See Quist Decl., Ex. 4 (PTAB Decision at 21) (rejecting Skyroam's argument that the SIM Allocator and Accounting module authenticate the VISM in Barker; the network operator performs authentication instead, and thus "we agree with the Patent Owner that the SIM allocator and accounting module does not disclose the ‘SIM card read-and-write management unit’ ").
In response, Skyroam notes that it is not making the same argument that it presented to the PTAB. Rather, it is making a new argument based – similar to above – on the premise that UCL has adopted a claim construction that allows for double counting. See Opp'n at 12 (arguing that "uCloudlink has now apparently abandoned its position that the various components of the claimed SIM scheduling management system, including the SIM scheduling management system it-self, must necessarily exist").
Because the Court finds that double counting is permitted under the ‘780 patent, summary judgment is denied for the same reasons as stated above.
(c) Manso
Finally, UCL argues there is no genuine dispute that Manso does not practice element 1g and therefore cannot be anticipatory prior art. UCL acknowledges that Skyroam's expert, Dr. Wolfe, has provided an opinion on element 1g but criticizes it because he has equated a SIM card read-and-write management unit with an unidentified software/hardware unit within a remote server:
Manso discloses a SIM card read-and-write management unit (e.g., software/hardware unit within "remote server 18"), configured to transfer the authentication data packet (e.g., "random number") of the SIM card parameter received from the subscriber access management unit to the at least one SIM card read-and-write device, and return an authentication result (e.g., "SRES_2") calculated by the at least one SIM card read-and-write device to the subscriber access management unit.
Quist Decl., Ex. 11 (Wolfe Invalidity Rpt., Ex. A-4, at 20).
Skyroam argues that it was sufficient for Dr. Wolfe to identify the remote server as containing a software/hardware unit that performs the function of the SIM card read-and-write management unit because, as discussed above, UCL has construed the patent to allow for double counting. See Opp'n at 13.
As above, because the Court finds that double counting is permitted under the patent, summary judgment is denied.
iii. How Elements Are Arranged
UCL's final argument on Liu, Barker, and Manso is that, even if the prior art references contain all the elements of the ‘780 patent, that does not make them invalidating because there is no genuine dispute that that the elements in the prior art references are not "arranged" as they are in the ‘780 patent.
This arrangement argument is predicated on Federal Circuit law holding as follows:
Because the hallmark of anticipation is prior invention, the prior art reference – in order to anticipate under 35 U.S.C. § 102 – must not only disclose all elements of the claim within the four corners of the document, but must also disclose those elements "arranged as in the claim."
The meaning of the expression "arranged as in the claim" is readily understood in relation to claims drawn to things such as ingredients mixed in some claimed order. In such instances, a reference that discloses all of the claimed ingredients, but not in the order claimed, would not anticipate, because the reference would be missing any disclosure of the limitations of the claimed invention "arranged as in the claim." But the "arranged as in the claim" requirement is not limited to such a narrow set of "order of limitations" claims. Rather, our precedent informs that the "arranged as in the claim" requirement applies to all claims and refers to the need for an anticipatory reference to show all of the limitations of the claims arranged or combined in the same way as recited in the claims, not merely in a particular order. The test is thus more accurately understood to mean "arranged or combined in the same way as in the claim."
Net MoneyIN, Inc. v. VeriSign, Inc. , 545 F.3d 1359, 1369-70 (Fed. Cir. 2008).
As Skyroam argues, there is a genuine dispute of material fact here given, at the very least, Liu which maps a flow of information much like the ‘780 patent. Notably, the FIG. 8 of Liu and the FIG. 8 of the ‘780 patent (see above) are similar. See also Opp'n at 14 (comparing the two FIGs. 8).
Accordingly, UCL's motion for summary judgment of no invalidity on the basis of anticipation is denied.
2. Obviousness
Skyroam also asserts obviousness as a basis for invalidity. See 35 U.S.C. § 103 ("A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.").
Skyroam's expert, Dr. Wolfe, has provided a chart on obviousness at Exhibit A-5 to his invalidity report. See Quist Decl., Ex. 12 (Wolfe Invalidity Rpt., Ex. A-5). As that chart reflects, Dr. Wolfe combined the following prior art references for his obviousness opinion: van der Laak, Zhang, and Liu (i.e. , the ‘735 patent). Dr. Wolfe explains the motive for combining these prior art references as follows:
Each of these patents is directed towards very similar apparatus and methods for provisioning SIM-based mobile telephony services to a phone in order to support low-cost and easy to use operation when travelling or when multiple service providers are desired. A POSITA would have been motivated to combine these references since they address the same problems in the same situations and utilize the same or similar hardware and processes. They could be combined as described herein using ordinary creativity and ordinary engineering design processes without undue experimentation.
Furthermore, during prosecution, the examiner indicated that the combination of van der Laak and Zhang fails to disclose only "[1d] the SIM scheduling management system comprises: a SIM database configured to store SIM data on the at least one SIM card of the at least one SIM card read-and-write device; [1e] a subscriber access unit configured to receive a service request from the multi-channel communication device, return the SIM card parameter assigned to the subscriber to the multi-channel communication device, receive an authentication data packet of the SIM card parameter from the multi-channel communication device, and return a corresponding authentication result to the multi-channel communication device; [1f] a SIM scheduling unit, configured to search, according to the service request received by the subscriber access management unit, in the SIM database data to select appropriate SIM, and return a corresponding SIM card parameter to the subscriber access management unit; and [1g] a SIM card read-and-write management unit, configured to transfer the authentication data packet of the SIM card parameter received from the subscriber access management unit to the at least one SIM card read-and-write device, and return an authentication result calculated by the at least one SIM card read-and-write device to the subscriber access management unit." But as indicated below, Liu 735 discloses these limitations. For example, it would have been obvious to incorporate Liu 735's process of assigning SIMs to ensure an appropriate SIM is selected, and to incorporate Liu's 735's authentication process to improve communication security into the combination of van der Laak and Zhang discussed by the examiner.
Quist Decl., Ex. 12 (Wolfe Invalidity Rpt., Ex. A-5, at 1-2).
In addition to the obviousness chart at Ex. A-5, there are other places where Dr. Wolfe raises an obviousness argument. For example, in discussing why Liu is anticipatory prior art (Ex. A-2), Dr. Wolfe states – with respect to element 1b – that
Element 1b covers the following: "a SIM scheduling management system configured to select appropriate SIM from the at least one SIM card inserted in the at least one SIM card read-and-write device according to the location of a user equipment and the type of a service requested by a subscriber, and assign the appropriate SIM to the subscriber." ‘780 patent, claim 1.
a POSITA [person of skill in the art] would find it obvious to combine the service type disclosure for SIM and modem selection in Manso with Liu 735. Both references select a virtual SIM based on multiple considerations of customer needs. It would be obvious to mix and match these similar criteria motivated by the same needs in similar systems.
Quist Decl., Ex. 9 (Wolfe Invalidity Rpt., Ex. A-2, at 18).
In its motion for summary judgment, UCL criticizes Dr. Wolfe for providing only a conclusory opinion on motivation. See Mot. at 17-18. But contrary to what UCL suggests, Dr. Wolfe has done more than just say that combining the references would have been common sense or intuitive. See also Innogenetics, N.V. v. Abbott Labs. , 512 F.3d 1363, 1373 (Fed. Cir. 2008) (" ‘[T]here must be some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness.’ "). Providing more detail is not necessary in case such as the one at bar which does not involve overly complicated technology. See Personal Web Techs., LLC v. Apple, Inc. , 848 F.3d 987, 992 (Fed. Cir. 2017) ("noting that the amount of explanation needed will vary from case to case, depending on the complexity of the matter and the issues raised in the record").
UCL argues still that, in order to have a viable obviousness argument, Skyroam must show that there was a reasonable expectation of success in combining the prior art references. See id. at 991 (noting that "a person of ordinary skill in the art would have been motivated to combine the prior art in the way claimed by the ‘310 patent claims at issue and had a reasonable expectation of success in doing so"). But the motivations described above also inform whether there was a reasonable expectation of success. In the case cited by UCL, the circumstances were different because, there, the patent holder had provided "evidence that the combination ... would be inoperable and [thus] would teach away from the obviousness of the claims." MediaTek, Inc. v. Freescale Semiconductor, Inc. , No. 11-cv-5341 YGR, 2014 WL 2854705, at *5, 2014 U.S. Dist. LEXIS 85398, at *19 (N.D. Cal. June 20, 2014). The same cannot be found as a matter of law here. Hence, UCL's motion for summary judgment based on obviousness is denied.
3. Inadequate Written Description
Finally, Skyroam asserts invalidity based on inadequate written description. Skyroam's expert, Dr. Wolfe, claims that there is an inadequate written description because claim 1, as written, only requires one SIM card and it is not possible for a single SIM card – which connects to only a single network provider – to provide "an international, any-network, any-service provider, any-technology and mode, or any-service network access service." ‘780 patent, abstract; see also ‘780 patent, col. 1, ll. 30-33 (stating that "[t]ypically, since the service provider is bound to the SIM in the device, one terminal may only use voice and data services provided by a service provider specified by the SIM").
In response, UCL asserts that this is not so much an issue of written description as enablement. See Reply at 14; see also U.S.C. § 112(a) (providing that "[t]he specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same") (emphasis added); Ariad Pharm., Inc. v. Eli Lilly & Co. , 598 F.3d 1336, 1351 (Fed. Cir. 2010) (noting that the "written description requirement [is] separate from enablement" and stating that "the description must ‘clearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimed’[;] [i]n other words, the test for sufficiency is whether the disclosure of the application relied upon reasonably conveys to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date").
The Court agrees – especially as Skyroam admits as much in its papers and conceded as much at the hearing. See, e.g. , Opp'n at 21 (arguing that, "because claim 1 can be met with a single SIM card , then that single SIM card, according to the invention, is one that has SIM data or a SIM function that not only includes those standard authentication capabilities, but also those that are well beyond what was known in the art, namely, that it enables an access service that provides ‘any-service provider, any-technology and mode, or any-service’ ") (italics in original; bold added).
Under the enablement framework, the Court agrees with UCL that Skyroam's argument lacks merit because there is no limitation in the ‘780 claims requiring that the invention provide "an international, any-network, any-service provider, any-technology and mode, or any-service network access service." ‘780 patent, abstract. The claim is not limited to more than a single SIM card. Accordingly, the Court holds that UCL is entitled to summary judgment on Skyroam's enablement defense.
C. Unenforceability
Finally, UCL argues that there is no genuine dispute that its ‘780 patent is enforceable. UCL challenges arguments made by Skyroam that UCL engaged in inequitable conduct by (1) misappropriating Skyroam trade secrets, (2) failing to identify Skyroam employees as the true inventors of the ‘780 patent (i.e. , because of the misappropriation), and (3) withholding material prior art from the PTO, specifically, Liu (i.e. , the ‘735 Patent).
Skyroam has here abandoned the first two arguments in favor of pursuing a misappropriation claim in Texas. See Opp'n at 22 n.14. Accordingly, the Court need only consider whether there is a genuine dispute of fact on the withholding of material prior art.
For the reasons stated above, there is a genuine dispute of fact on whether Liu is material prior art. This leaves UCL with its argument that there must still be evidence supporting an intentional withholding. According to UCL, there is nothing to suggest that any withholding was intentional:
Skyroam alleges that uCloudlink's Chief Architect – Dr. Thomas Gong – learned of the Liu patent in April 2016. Quist Decl., Ex. 2 at 26. [Redacted] Contemporaneous documents thus corroborate witness testimony that uCloudlink did not view the Liu patent as material. Skyroam has offered no contrary evidence. As such, Skyroam cannot carry its heavy burden of showing uCloudlink had an intent to deceive the PTO concerning the Liu patent.
Mot. at 24-25 (emphasis in original).
The problem with UCL's position is that it essentially says that the Court must credit Dr. Gong with being honest in his assessment that [Redacted] As reasonable inferences must be drawn in the nonmoving party's favor, the Court cannot, for purposes of this motion, so credit Dr. Gong.
III. CONCLUSION
For the foregoing reasons, the Court grants in part and denies in part UCL's motion for summary judgment. The Court finds that UCL is entitled to summary adjudication with respect to two matters: (1) the ‘780 patent is not invalid based on Skyroam's 3Gmate product and (2) the ‘780 patent is not invalid based on lack of enablement. The motion for summary judgment is otherwise denied.
Out of an abundance of caution, the Court is sealing the entirety of this order. The parties are ordered to meet and confer to determine what, if any, portions of this order are required to be sealed. Within a week of the date of this order, the parties shall file a stipulation containing a narrowly tailored sealing request.
This order disposes of Docket No. 233.