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Pct International Inc. v. Holland Electronics LLC

United States District Court, D. Arizona

March 2, 2015

PCT International Incorporated, Plaintiff,
Holland Electronics LLC, Defendant.


JAMES A. TEILBORG, Senior District Judge.

Pending before the Court are Defendant Holland Electronics LLC ("Holland")'s Motion, and Memorandum in Support Thereof, for Sanctions for PCT International Inc.'s Protective Order Violation (Doc. 222); Defendant Holland Electronics, LLC's Renewed Motion for Summary Judgment on Infringement, or Alternatively, Partial Summary Judgment on Damages and Renewed Motion to Preclude any Theory of Indirect Infringement for Lack of Disclosure (Doc. 223); Plaintiff's Resubmitted Motion to Exclude Portions of the Expert Reports of Daniel J. Whittle, PhD (Doc. 229); Plaintiff's Resubmitted Motion to Exclude the Expert Opinion of David A. Haas (Redacted) (Doc. 233); Plaintiff's Resubmitted Motion to Exclude the Expert Opinion of David A. Haas (Filed under Seal) (Doc. 237); and Plaintiff's Motion for Leave to File Non-Electronically Exhibit 26 to Plaintiff's Separate Statement of Additional Material Facts in Support of PCT's Opposition to Holland's Renewed Motion for Summary Judgment (Doc. 260). The Court now rules on the motions.

I. Motion for Sanctions

Holland moves for sanctions against Plaintiff PCT International Incorporated ("PCT") for PCT's alleged violation of the Protective Order issued in this case. (Doc. 222 at 4). The Court previously entered a Protective Order pursuant to Federal Rule of Civil Procedure ("Rule") 26(c) that permits the parties to designate materials produced during discovery as "confidential" or "outside attorneys' eyes only." (Doc. 53). The Protective Order limits the parties' ability to use and disclose these designated materials, and it orders that designated materials "shall not be used or disclosed for any purpose other than the litigation of this action." ( Id. at 2).

PCT is involved in litigation with its former supplier EZconn Corporation in the United States District Court for the District of Nevada. In that litigation, PCT filed a document giving rise to Holland's instant motion for sanctions. The relevant portion of PCT's document is as follows:

Plaintiffs believe that third party discovery from Holland Electronics, LLC ("Holland") will lead to documents that support personal jurisdiction over eGtran. [PCT] is currently involved in a patent infringement lawsuit against Holland in the District of Arizona. Case No. 12-cv-01797-PHX-JAT (D. Ariz.). During discovery in that case, Holland produced a number of documents pursuant to a protective order that may serve as evidence of jurisdictional facts relating to eGtran. The Arizona Court issued an order, attached as Exhibit G to the Harting Declaration, Dkt. No. 36, describing the documents at a high level. The Holland documents generally relate to:
• EZconn/eGtran's disclosure to Holland of "the price at which it offered to manufacture PCT's product." Dkt. No. 36, Exhibit G at 4-5.
• EZconn/eGtran's disclosure to Holland of "the quantities and shipment dates of PCT compression connector orders." Id. at 5
• Communications from EZconn/eGtran comprising "certain e-mail attachments to Holland in an e-mail with the subject line RE: PCT.' Id.
• An email from EZconn/eGtran to Holland forwarding "copies of communications and a financial transaction between PCT and EZconn concerning a dispute regarding loans made from EZconn to PCT." Id.
• Communications from Holland to EZconn/eGtran asking "EZconn to delete e-mails concerning PCT after reading them because Holland was concerned about getting sued for interference.' Id.

Plaintiffs' Reply Memorandum of Points and Authorities in Support of Plaintiffs' Motion for Leave to Conduct Jurisdictional Discovery at 14:16-15:6, Andes Indus., Inc. et al. v. EZconn Corp. et al., No. 2:14-cv-00400-APG-GWF (D. Nev. Oct. 16, 2014), ECF No. 60 (grammatical errors in original).

Holland alleges that the bullet points in the above-quoted portion of PCT's filing contain Holland's confidential information designated pursuant to the Protective Order; thus, Holland claims, PCT has violated the Order. (Doc. 222 at 4). PCT responds that all of the details concerning the documents are direct quotations from the Court's June 3, 2014 Order (Doc. 198). (Doc. 241 at 3). The Court has compared the details quoted in PCT's filing with its statements in its June 3, 2014 Order and they are identical. See (Doc. 198 at 4-5). This is not surprising, because PCT's filing cites to the Court's Order and uses quotation marks in its description of the documents.

The Protective Order provides that "[a]ny Designated Material which becomes part of an official judicial proceeding... is public." (Doc. 53 at 6). Furthermore, the Court's orders are public documents; information contained in them is public and cannot be subject to any protective order. PCT did not disclose or use confidential information under the Protective Order when it quoted the Court's June 3, 2014 Order. The Court will deny Holland's motion.

II. Holland's Motion for Summary Judgment

Holland moves for summary judgment on the issue of infringement, alleging that it is not a direct infringer and there is no evidence of indirect infringement. (Doc. 223 at 2).[1] Holland also moves for partial summary judgment on damages. ( Id. )

A. Summary Judgment Standard

Summary judgment is appropriate when "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). "A party asserting that a fact cannot be or is genuinely disputed must support that assertion by... citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits, or declarations, stipulations... admissions, interrogatory answers, or other materials, " or by "showing that materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Id. 56(c)(1)(A), (B). Thus, summary judgment is mandated "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

Initially, the movant bears the burden of pointing out to the Court the basis for the motion and the elements of the causes of action upon which the non-movant will be unable to establish a genuine issue of material fact. Id. at 323. The burden then shifts to the non-movant to establish the existence of material fact. Id. The non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts" by "com[ing] forward with specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting Fed.R.Civ.P. 56(e) (1963) (amended 2010)). A dispute about a fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The non-movant's bare assertions, standing alone, are insufficient to create a material issue of fact and defeat a motion for summary judgment. Id. at 247-48. However, in the summary judgment context, the Court construes all disputed facts in the light most favorable to the non-moving party. Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004).

B. Direct Infringement

Holland argues that PCT cannot succeed on its claim against Holland for direct infringement of U.S. Patent 6, 042, 422 (filed Oct. 8, 1998) (the "422 Patent") because claim 1 of the 422 Patent requires that the coaxial connector be crimped to a cable and Holland sells, but does not crimp, connectors. (Doc. 223 at 3-4).

1. Legal Standard

A person is liable for patent infringement if, without permission of the patentee, that person "makes, uses, offers to sell, or sells any patented invention[] within the United States... during the term of the patent therefor." 35 U.S.C. § 271(a). "A determination of patent infringement requires a two-step analysis." Dynacore Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263, 1273 (Fed. Cir. 2004). First, the court must interpret the claims "to determine their scope and meaning"; this is a question of law for the court. Id. Second, the court must "then compare the properly construed claims to the allegedly infringing device." Id. "To prove infringement, the patentee must show that the accused device meets each claim limitation, either literally or under the doctrine of equivalents." Id. Although this second step is a factual question, "[a]n infringement issue is properly decided upon summary judgment when no reasonable jury could find that every limitation recited in the properly construed claim either is or is not found in the accused device either literally or under the doctrine of equivalents." Gart v. Logitech, Inc., 254 F.3d 1334, 1339 (Fed. Cir. 2001).

2. Analysis

Claim 1 of the 422 Patent contains the following limitation:

... said collapsible band forming an annular rib projecting inward toward said inner tube when said outer barrel is axially compressed...

422 Patent col.7 ll.1-3. Holland contends that PCT's own infringement expert admitted that Holland's products do not meet this limitation because as sold, the outer barrel has not yet been axially compressed. (Doc. 223 at 3-4). Thus, according to Holland, infringement only occurs when someone other than Holland "actually takes a Holland connector and attaches it to a piece of coaxial cable." ( Id. at 5).

Holland's argument fails because it misconstrues claim 1 of the 422 Patent. In construing claims, the Court first looks to the ordinary and customary meaning of the claim terms themselves. See Phillips v. AWH Corp., 415 F.3d 1303, 1312-13 (Fed. Cir. 2005). Claim 1 does not require that the collapsible band forms an annular rib and the outer barrel is axially compressed; it requires that the collapsible band forms an annular rib when the outer barrel is axially compressed. Thus, claim 1's language is one of capability and not of immediate characteristics.

In Intel Corporation v. United States International Trade Commission, 946 F.2d 821 (Fed. Cir. 1991), the claim at issue required "programmable selection means" and used language relating to capability, namely " when said alternate addressing mode is selected." 946 F.2d at 832. There, the Federal Circuit Court of Appeals ("Federal Circuit") held that the accused device need only be capable of operating in the alternate addressing mode to be infringing. Id. In Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197 (Fed. Cir. 2010), the Federal Circuit clarified that when a claim "recites capability and not actual operation, an accused device need only be capable of operating' in the described mode." 626 F.3d at 1204 (quoting Intel, 946 F.2d at 832). Here, the plain language of claim 1 of the 422 Patent specifies that the annular rib is formed when the outer barrel is axially compressed. A device having all of the limitations specified in claim 1 thus infringes if the relevant collapsible band forms an annular rib when the outer barrel is axially compressed; the device does not need to actually be compressed as a condition precedent to infringement.

For these reasons, Holland's interpretation of claim 1 is contrary to the ordinary and customary meaning of the claim's terms. Although Holland cites the testimony of PCT's infringement expert, Dr. Dickens, as evidence supporting Holland's interpretation of claim 1, "unsupported assertions by experts as to the definition of a claim term are not useful to a court." Phillips, 415 F.3d at 1318. In particular, expert testimony should be discounted when expert testimony is "clearly at odds with the claim construction mandated by the claims themselves." Id. Thus, although Holland quotes Dr. Dickens as stating that Holland's connectors would infringe "when you've crimped it, " (Doc. 223 at 4), the Court finds Dr. Dickens' testimony uncompelling.[2]

Moreover, although Holland argues that its motion for summary judgment is not based upon claim construction but rather "upon Dr. Dickens' admission that, as a factual matter, the accused products as sold by Holland do not meet all the limitations of claim 1, " (Doc. 256 at 8), Holland does not contend that its connectors do not form annular ribs when the outer barrel is axially compressed. Rather, Holland's arguments involve the interpretation of the claim language; in particular, Holland is arguing the meaning of "when." This is an issue of claim construction, which is a matter of law for the Court. Thus, because the Court concludes that claim 1 of ...

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