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Technology Licensing Corp. v. Thomson

August 27, 2010

TECHNOLOGY LICENSING CORPORATION, A NEVADA CORPORATION, PLAINTIFF,
v.
THOMSON, INC., A DELAWARE CORPORATION, DEFENDANT.



MEMORANDUM AND ORDER RE: MOTIONS FOR SUMMARY JUDGMENT

Technology Licensing Corporation ("TLC") owns U.S. Patent Nos. RE40,411 E (the "'411" patent) and RE40,412 E (the "'412" patent), which are July 1, 2008 reissues of U.S. Patent Nos. 5,745,250 (the "'250 patent"), and 5,486,869 (the "'869 patent"), respectively. The '411 and '412 patents relate to identifying and separating the sync signal component of a composite video signal in order to allow accurate reproduction of the transmitted image. TLC filed this action against Thomson for infringing the '411 and '412 patents by incorporating into its products Gennum and Elantec sync separator chips that practice the '411 and '412 patents. Thomson moves for summary judgment on TLC's infringement claims that are based on Thomson's incorporation of the Gennum GS4882 and GS4982 chips and the Elantec EL4583 and EL4581 chips because those claims are barred by the Kessler*fn1 doctrine and res judicata. (Docket No. 270.) Thomson also moves for summary judgment on the issue of no damages before January 5, 2010 with respect to infringement claims arising from Thomson's incorporation of the Elantec EL 4511 chip because of TLC's failure to provide Thomson notice of infringement. (Docket No. 274.)

Summary judgment is proper "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law."

Fed. R. Civ. P. 56(c). A material fact is one that could affect the outcome of the suit, and a genuine issue is one that could permit a reasonable jury to enter a verdict in the nonmoving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Id. at 256. On issues for which the ultimate burden of persuasion at trial lies with the nonmoving party, the moving party bears the initial burden of establishing the absence of a genuine issue of material fact and can satisfy this burden by presenting evidence that negates an essential element of the nonmoving party's case or by demonstrating that the nonmoving party cannot produce evidence to support an essential element of its claim or defense. Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 2000).

Once the moving party carries its initial burden, the nonmoving party "may not rely merely on allegations or denials in its own pleading," but must go beyond the pleadings and, "by affidavits or as otherwise provided in [Rule 56,] set out specific facts showing a genuine issue for trial." Fed. R. Civ. P. 56(e); accord Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); Valandingham v. Bojorquez, 866 F.2d 1135, 1137 (9th Cir. 1989). On those issues for which it will bear the ultimate burden of persuasion at trial, the nonmoving party "must produce evidence to support its claim or defense." Nissan Fire, 210 F.3d at 1103.

In its inquiry, the court must view any inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The court also may not engage in credibility determinations or weigh the evidence, for these are jury functions. Anderson, 477 U.S. at 255.

A. Motion for Partial Summary Judgment on Kessler Doctrine and Res Judicata

In 1998, Elantec filed a declaratory judgment action in the Northern District of California seeking a declaration that the '869 and '250 patents---reissued as the '411 and '412 patents- in-suit---were invalid, unenforceable, and were not infringed by Elantec's products including the EL4583 and EL4581 chips at issue in this litigation. TLC filed counterclaims against Elantec for infringing certain claims in the '250 and '869 patents. The parties settled, entered into a patent license agreement, and filed a stipulated dismissal with prejudice on April 5, 1999. In 2002, TLC terminated the license agreement with Elantec because it believed Elantec violated the agreement. TLC brought this suit against Thomson for patent infringement by, inter alia, incorporating Elantec chips in its products on June 20, 2003. (Docket No. 1.) In 2006, TLC and other plaintiffs sued Elantec in California Superior Court for violations of the license agreement. In 2009, Elantec filed a declaratory judgment action against TLC in the Northern District of California alleging the '411 and '412 patents are invalid. TLC counterclaimed infringement. The case is currently pending.

In 2001, TLC sued Videotek, Inc. in the Northern District of California for infringing certain claims in the '250 and '869 patents. In 2002 Videotek filed a third party complaint against Gennum seeking indemnification. Gennum cross-claimed against TLC for non-infringement and invalidity of the '250 and '869 patents, and TLC filed counterclaims against Gennum alleging infringement through several of its sync separator chips, including the GS4882 and GS4982 chips at issue in this litigation. See Tech. Licensing Corp. v. Gennum Corp., No. 01-4204, 2007 WL 1319528 (N.D. Cal. May 4, 2007). Then Magistrate Judge Seeborg ruled that the GS4882 and GS4982 chips did not infringe the '869 patent claims then at issue and that while certain Gennum chips would infringe the '250 patent claims then at issue, those claims were invalid. Id. Specifically, Judge Seeborg found that the claims at issue in the '250 patent were entitled to a priority date no earlier than June 22, 1995, and were invalid because certain Elantec sync separator chips existed in 1993 and therefore constituted prior art. Id. at *21. The Federal Circuit affirmed those aspects of Judge Seeborg's ruling that were appealed. Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316 (Fed. Cir. 2008).

Thomson argues that the prior litigation between TLC and Elantec and Gennum has decided the issues of patent infringement and validity between those chips and the patents-in-suit, and that under the Kessler doctrine and res judicata Thomson is entitled to the benefit of those judgments.

1. Res Judicata

Under federal law, claim preclusion---otherwise known as res judicata--bars "lawsuits on 'any claims that were raised or could have been raised' in a prior action." Stewart v. U.S. Bancorp, 297 F.3d 953, 956 (9th Cir. 2002) (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 713 (9th Cir. 2001)). Claim preclusion requires the moving party to satisfy three elements: (1) an identity of the claims, (2) the previous action must have resulted in a final judgment on the merits, and (3) the present action must involve the same parties or persons in privity of interest. Providence Health Plan v. McDowell, 385 F.3d 1168, 1173-1174 (9th Cir. 2004).

In its March 10, 2010 claim construction Order applying collateral estoppel and adopting Judge Breyer's construction of the terms "circuit" and "circuitry" in means-plus-function format, this court stated that "[a]s one of Gennum's customers, Thomson is in privity with Gennum for preclusion purposes."

Tech. Licensing Corp. v. Thomson, Inc., No. 03-1329, 2010 WL 843560, at *6 (E.D. Cal. Mar. 10, 2010) (citing Schnitger v. Canoga Elecs. Corp., 412 F.2d 628 (9th Cir. 1972)). It is therefore law of the case that Thomson is in privity with Gennum. It also follows that Thomson is in privity with Elantec. ...


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