ACCO BRANDS, INC. v. PC GUARDIAN ANTI-THEFT PRODUCTS

The opinion of the court was delivered by: SUSAN ILLSTON, District Judge

ORDER DENYING CROSS-MOTIONS FOR SUMMARY JUDGMENT

On September 9, 2005, the Court heard argument on plaintiff's motion for summary adjudication of infringement of U.S. Patent No. 6,553,794 and on defendants' motion for summary judgment of inequitable conduct and unenforceability. Having carefully considered the parties' arguments, and for good cause appearing, the Court hereby DENIES defendants' motion for summary judgment. The Court further DENIES plaintiff's motion for summary adjudication without prejudice to reconsideration after claim construction occurs.

BACKGROUND

  Plaintiff, ACCO Brands, Inc. d/b/a Kensington Technology Group ("Kensington"), is the owner of two patents — U.S. Patent Nos. 6,553,794 ("the '794 patent") and 5,502,989 ("the '989 patent") — both of which cover devices for attaching a lock to a portable computer. These patents are very closely related; both patents derive from the same application, U.S. App. Ser. No. 138,634 (filed October 15, 1993). The '989 patent claims a device, however, while the '794 patent claims a method, albeit in different terms from the '989 patent.

  Defendants, PC Guardian Anti-Theft Products, Inc., and Fellowes, Inc. (collectively, "PC Guardian"), are the makers of the Notebook Guardian line of locks for laptop computers. In 2000, Kensington brought suit against PC Guardian, claiming that the Notebook Guardian infringed the '989 patent. Kensington ultimately lost on summary judgment. See ACCO Brands, Inc. v. Micro Security Devices, Inc., No. C 00-2296 SI (N.D. Cal. Jul. 23, 2002), aff'd 346 F.3d 1075 (Fed. Cir. 2003). Kensington now claims that PC Guardian's product infringes the '794 patent. PC Guardian denies infringement and claims that the '794 patent is unenforceable because Kensington committed inequitable conduct before the Patent & Trademark Office ("PTO").

  1. The '794 patent and the accused product

  The operation of the accused product is not disputed. See Dec. of Brian Smith in Support of Plaintiff's Mot. for Summary Adjudication ("Smith Dec."), Exh. B (attaching declaration of PC Guardian designer from prior litigation, which describes the operation of Notebook Guardian). The product consists of a cable attached to a lock. At the end of the lock is a rectangular metal protrusion, referred to as a "flanged tab structure," as well as a metal "hook arm." In the unlocked position, this hook arm sits inside the protrusion. When the key is turned, however, a cam inside the lock rotates, causing the hook arm to raise out of the protrusion. The hook arm, in its raised position, coupled with the rest of the protrusion, is larger than the security slot on the side of a laptop. Thus, when the protrusion is inserted into a security slot on the side of a computer and the lock is turned, the raised hook arm catches the inside of the security slot, preventing its release.

  PC Guardian's claims of inequitable conduct stem from Kensington's failure to disclose U.S. Patent No. 2,530,560 ("the Young patent") in prosecuting the '794 patent. PC Guardian bases this argument on the important role that the Young patent played in a reexamination of the '989 patent.*fn1

  After the prosecution of the '989 patent, the primary examiner, Darnell Boucher,*fn2 conducted a reexamination of a number of claims of the patent. She rejected several of these claims because they were anticipated by the Young patent. Examiner Boucher later reconsidered this rejection, allowing the claims because Young "fails to teach a pin coupled through the house which extends into the security slot after the slot engagement member is in the locked position." Defendants' Mot. for Summary Judgment, Exh. C, at 16 (emphasis added). Examiner Boucher later reiterated this basis for distinguishing Young: "[T]he prior art fails to teach or make obvious a computer locking assembly having a locking member which is rotatable to a locked position after being placed through an opening in a computer . . . and subsequently a pin being place [sic] into the opening after the locking member is rotated to the locked position. . . ." Defendants' Mot. for Summary Judgment, Exh. D (emphasis added).

  This determination by Examiner Boucher would later play a key role in the patent infringement action that Kensington brought against PC Guardian (then named Micro Security Devices) for infringement of the '989 patent. In affirming this Court's Order granting summary judgment to PC Guardian on the issue of infringement, the Federal Circuit relied on Examiner Boucher's determination: "the examiner and the applicant understood that the pin extends (actively) into the slot after rotation." ACCO Brands, Inc. v. Micro Security Devices, Inc., 346 F.3d 1075, 1079 (Fed. Cir. 2003) (emphasis added).

  Despite the fact that the Young patent was playing such a fundamental role in litigation over the '989 patent throughout the time that the '794 patent was being prosecuted, it is undisputed that Kensington never revealed the Young patent to the PTO in its prosecution of the '794 patent. Neither party presented any evidence concerning why Young was not disclosed to the PTO.

  LEGAL STANDARD

  Federal Rule of Civil Procedure 56 states that summary judgment may be granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). "Summary judgment is appropriate in a patent case, as in other cases, when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Nike Inc. v. Wolverine World Wide, Inc., 43 F.3d 644, 646 (Fed. Cir. 1994). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553 (1986). The moving party, however, has no burden to negate or disprove matters on which the non-moving party will have the burden of proof at trial. Id. The moving party need only point out to the Court that there is an absence of evidence to support the non-moving party's case. Id. at 325, 106 S. Ct. at 2554. The burden then shifts to the non-moving party to "designate `specific facts showing there is a genuine issue for trial.'" Id. at 324, 106 S. Ct. at 2553 (quoting Rule 56(e)). To carry this burden, the non-moving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 1356 (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 [non-moving party]." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512 (1986).

  Summary judgment can be used to determine infringement. Avia Group Int'l, Inc. v. L.A. Gear Cal., Inc., 853 F.2d 1557, 1560 (Fed. Cir. 1988). The moving party bears the burden of proving infringement by a preponderance of the evidence. Mannesmann Demag Corp. v. Engineered Metal Products Co., 793 F.2d 1279, 1282 (Fed Cir. 1986). To establish infringement, every limitation in a claim as construed by the Court must be in the accused product, either exactly or by substantial equivalent. Carroll Touch, Inc., v. Electro Mechanical Systems, Inc., 15 F.3d 1573, 1576 (Fed. Cir. 1993). A claim is literally infringed if the accused product is exactly the same as each element of the asserted claim. Hi-Life Products, Inc. v. American Nat'l Water-Mattress Corp., 842 F.2d 323, 325 (Fed. Cir. 1986). Even if a product does not literally infringe it may infringe under the doctrine of equivalents. Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17, 21, 117 S. Ct. 1040, 1045 (1997). Doctrine of equivalents infringement is found where ...