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Maxwell Technologies, Inc. v. Nesscap

August 27, 2007

MAXWELL TECHNOLOGIES, INC., PLAINTIFF,
v.
NESSCAP, INC., AND NESSCAP CO., LTD., DEFENDANTS.



The opinion of the court was delivered by: Hon. John A. Houston United States District Judge

ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION OF U.S. PATENT NO. 6,631,074 [Doc. No. 13]

INTRODUCTION

Now pending before this Court is Plaintiff Maxwell Technologies, Inc.'s ("Plaintiff") motion for preliminary injunction of U.S. Patent No. 6,631,074 (the "'074 Patent"). Doc. No. 13. Defendants Nesscap, Inc. and Nesscap Co., Ltd. (collectively "Defendants") oppose this motion. This matter came on for hearing on June 21, 2007 and August 9, 2007 with appearances by David Doyle and Eric Acker for Plaintiff, and George Neuner, Brian Gaff, Andrea Kimball and Scott Weston for Nesscap. This Court, after an evidentiary hearing and hearing the oral argument of counsel, took the matter under submission. Now, after a careful consideration of the pleadings, relevant evidence, the oral argument of counsel at the hearing, and for the reasons set forth below, this Court DENIES Plaintiff's motion for preliminary injunction as to the '074 Patent only.

BACKGROUND

On October 17, 2006, Plaintiff filed a complaint for patent infringement and filed a motion for preliminary injunction on October 18, 2006. Plaintiff filed an amended complaint on November 2, 2006, alleging patent infringement of U.S. Patent No. 6,525,924 (the "'924 Patent") and U.S. Patent No. 6,631,074 (the "'074 Patent"), naming Nesscap, Inc. and Nesscap Co., Ltd as defendants. Doc. No. 12. Plaintiff also filed a motion for preliminary injunction on November 2, 2006. Doc. No. 13.

Defendants filed motions to dismiss on November 9, 2006, which were set for hearing on January 18, 2007. Doc. Nos. 25 and 26. Defendants also filed an ex parte application to continue the preliminary injunction hearing until after this Court's decision on Defendants' motion to dismiss. This Court granted Defendants' ex parte application on November 15, 2006, finding that although the motions to dismiss would be decided first, a shortened briefing schedule was warranted. Doc. No. 34. The Court subsequently rescheduled the preliminary injunction hearing date until February 22, 2007. Doc. No. 34. Plaintiff filed an opposition on December 14, 2006. Doc. No. 35. Defendants filed replies on December 21, 2006. Doc. Nos. 36 and 37. The matter was taken under submission pursuant to Civ.LR 7.1(d.1) on January 16, 2007. Doc. No. 41.

On January 25, 2007, Defendants renewed their ex parte application to continue the preliminary injunction hearing date. Doc. No. 42. On January 26, 2007, Plaintiff filed an opposition and Defendants filed a reply. Doc. Nos. 44 and 45. This Court granted in part and denied in part Defendants' ex parte application. Doc. No. 46. The Court found it appropriate to continue the preliminary injunction hearing until March 1, 2007, but required Defendants to file under seal their opposition in response to the preliminary injunction motion. Id.

This Court granted in part and denied in part Defendants' motion to dismiss on March 13, 2007, finding personal jurisdiction over Defendant Nesscap, Inc., but quashing service and ordering Plaintiff to serve Nesscap Co. within 45 days of the order. Doc. No. 59. The Court also rescheduled the preliminary injunction hearing date to April 5, 2007. Doc. No. 59. Defendants' opposition in response to the preliminary injunction motion was subsequently unsealed on February 1, 2007. Doc. No. 62. Plaintiff filed a reply on March 22, 2007. Doc. No. 66.

On April 5, 2007, this Court held a hearing on Plaintiff's motion for preliminary injunction. Doc. No. 70. At the hearing, the Court indicated that it would entertain an evidentiary hearing on the '074 Patent only, and set a telephonic status conference date for April 11, 2007. On April 11, 2007, the Court held a status conference, with David Doyle and Eric Acker appearing on behalf of Plaintiff, and George Neuner, Brian Gaff and Callie Bjurstrom on behalf of Nesccap. Doc. No. 74. The Court set a tentative evidentiary hearing date on the '074 Patent for May 18, 2007, and orally granted Plaintiff's preliminary injunction motion on the '924 Patent only. Id. On April 23, 2007, this Court issued a written Order granting Plaintiff's motion for preliminary injunction on the '924 Patent only. Doc. No. 79. The Court also rescheduled the evidentiary hearing on the '074 Patent to June 21, 2007. Doc. No. 80. Plaintiff posted a stipulated bond to conform to this Court's preliminary injunction Order on April 27, 2007.

On May 4, 2007, Defendants filed an ex parte motion to shorten the time for a hearing on its motion to stay, as well as temporarily stay this Court's preliminary injunction until a decision on the motion to stay. Doc. No. 86. This Court denied Defendants' motion to temporarily stay, but granted their motion to shorten time, setting the hearing date on Defendants' motion to stay to May 24, 2007. Doc. No. 91. Plaintiff filed a response in opposition to Defendants' motion to stay on May 16, 2007. Doc. No. 95. Defendants filed a reply on May 18, 2007. Doc. No. 98. On May 24, 2007, this Court held a hearing on Defendants' motion to stay, with Eric Acker and Brian Kramer appearing as counsel for Plaintiff, and George Neuner and Andrea Kimball for Defendants. Doc. No. 99. The Court denied Defendants' motion to stay at the hearing, and subsequently issued a written order on the motion. Id.; Doc. No. 102.

An evidentiary hearing on the '074 Patent was held on June 21, 2007. Doc. No. 113. At the hearing, this Court allowed the parties to file supplemental declarations as a result of new evidence presented by Defendants. The Court held a telephonic conference on June 25, 2007, setting forth deadlines for the parties' submissions. Defendants filed supplemental declarations on July 12, 2007. Doc. Nos. 119-121. On July 26, 2007, Plaintiff filed responses in opposition to Defendants' supplemental declarations. Doc. Nos. 123-126. Defendants filed replies to Plaintiff's opposition responses on August 6, 2007, as well as objections to affidavits filed by Plaintiff. Doc. Nos. 127-130. On August 9, 2007, this Court continued the evidentiary hearing on the '074 Patent. At the continued hearing, the Court allowed Defendants to file a surrebuttal declaration. Defendants filed a surrebuttal declaration on August 21, 2007. Doc. No. 134.

DISCUSSION

Legal Standard - Preliminary Injunction

To prevail on a motion for preliminary injunction on a patent infringement claim, a reviewing court must weigh the following factors: "1) likelihood of the patentee's success on the merits; 2) irreparable harm if the injunction is not granted; 3) the balance of hardships between the parties; and 4) the public interest." Abbott Laboratories v. Andrx Pharmaceuticals, Inc., 473 F.3d 1196, 1200-01 (Fed. Cir. 2007), quoting Oakley, Inc. v. Sunglass Hut Int'l, 316 F.3d 1331, 1338-39 (Fed. Cir. 2003). To find likelihood of success, a patentee must present proof of the accused products infringement of a "valid and enforceable patent." Pfizer, Inc. v. Teva Pharmaceuticals, USA, Inc., 429 F.3d 1364, 1372 (Fed. Cir. 2005). The burden lies with the patentee for proving infringement on the patent, and with the accused infringer in proving invalidity or unenforceability of the asserted patents. Id. at 1201, citing to Gonzales v. O Centro Espirita Beneficente Uniao Do Vegetal, 126 S.Ct. 1211, 1219-20 (2006) ("[T]he burdens at the preliminary injunction stage track the burdens at trial.").

The basic function of a mandatory injunction is to "preserve status quo pending determination of an action on the merits." Chalk v. U.S. District Court Central District of California, 840 F.2d 701, 704 (9th Cir. 1988). "It is so well settled as not to require citation of authority that the usual function of a preliminary injunction is to preserve the status quo ante litem pending a determination of the action on the merits." Larry P. v. Riles, 502 F.2d 963, 965 (9th Cir. 1974).

Analysis

Plaintiff moves for a preliminary injunction of Defendants' electric double layer ultracapacitor products. Doc. No. 13. Plaintiff asserts that Defendants' ultracapacitors infringe on at least claim 1 of the '074 Patent. Id. at 17.

A. Ultracapacitor Technology

Ultracapacitors, also known as Electric Double Layer Capacitors ("EDLC"), are energy storage devices consisting of a series of electrodes separated by a permeable membrane. The permeable membrane allows the movement of charged ions in an electrolyte solution surrounding the electrodes, such that upon application of an electrical current or energy source to the electrode, charged particles in the electrolyte solution migrate to the opposite electrode, wherein negatively charged ions migrate to the positively charged electrode, and positively charged ions migrate to the negatively charged electrode. The electrostatic build-up of energy as a result of the process of separating the charges can be stored by the device, and then ...


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