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Wordtech Systems, Inc. v. Integrated Network Solutions

July 6, 2011

WORDTECH SYSTEMS, INC. PLAINTIFF,
v.
INTEGRATED NETWORK SOLUTIONS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Plaintiff Wordtech Systems, Inc. ("Wordtech"), filed this patent infringement action on September 22, 2004. A jury in this Court found Defendants INSC, Nasser Khatemi and Hamid Assadian each liable to Wordtech for direct infringement, contributory infringement, and inducement of infringement involving technology for automated duplication of compact discs. As is relevant here, individual Defendants Khatemi and Assadian (hereafter jointly "Defendants") filed a post-trial motion for new trial, which was denied. Defendants appealed the liability verdicts against them, and, on June 16, 2010, the Federal Circuit reversed the denial of Defendants' new trial motion and remanded to this Court.

Presently before the Court is Wordtech's subsequently-filed Motion for Partial Summary Judgment as to Inducement ("Motion"). Defendants, both of whom are proceeding pro se, each filed oppositions. In conjunction with his opposition, Defendant Assadian requests relief from this case pursuant to Federal Rule of Civil Procedure 60(d)(1) and judicial review of the Federal Circuit's audio, transcript, and related attachments. For the following reasons, Wordtech's Motion and Defendant Assadian's requests are DENIED.*fn1

BACKGROUND*fn2

In its operative First Amended Complaint, Wordtech alleges that Defendants infringed three of its patents, which cover "Programmable Self-Operating Compact Disk Duplication Systems," by modifying and selling "Robocopiers." Robocopiers are disc duplication devices that copy video files from computers to multiple discs. According to Wordtech, INSC, Khatemi and Assadian, among others, directly and contributorily infringed Wordtech's patents and induced third parties to do the same.

INSC, a Nevada corporation, was established by Khatemi's mother in early 1994. In 1994 and 1995, INSC listed Khatemi as both President and Director on annual forms required to be filed under state law.

From 1995 through November of 2006, INSC failed to file any further required statements, though eventually, after initiation of this action, the corporation resumed at least some filings.

Despite the references to Khatemi on corporate documents, Defendants both claim they never served as INSC officers. According to Defendants, Khatemi was a "salesman" and Assadian was an engineer responsible for "product development." In addition, and though Assadian was identified as the corporate representative, Khatemi testified that individuals generally were not given titles at INSC. Defendants also testified that INSC had only a handful of employees between 2000 and 2005 and that Defendants were INSC's only full-time employees at the time of trial. Finally, Assadian testified that he and Khatemi were primarily responsible for the company.

At the close of the trial on Wordtech's claims, the jury found INSC and the individual Defendants liable on all infringement theories, including inducement. The jury determined infringement of each patent was willful and awarded Wordtech a total of $250,000 in damages. This Court subsequently found the case "exceptional" under 35 U.S.C. § 285, trebled damages, and awarded Wordtech attorneys' fees, interest and costs. Defendants subsequently filed motions for judgment as a matter of law under Rule 50 of the Federal Rules of Civil Procedure*fn3 and a motion for new trial under Rule 59(a), all of which were denied.

On appeal, Defendants challenged only the liability verdicts against them individually, the damages award and this Court's denial of their motion to amend their answer. Pertinent for purposes of Wordtech's instant Motion is Defendants' appeal as to Wordtech's inducement claim. The appellate court vacated the liability verdicts on this theory because of mistakes in the verdict forms and because that court believed the legal test for inducement was never presented to the jury. That court remanded for this Court to determine whether a new trial is warranted, stating as follows:

[W]e reverse the denial of [Defendants'] Rule 59(a) motion..., and remand for consideration of whether a new trial is warranted on their individual liability for direct infringement, inducement, and contributory infringement. On remand, the district court should address the issues of piercing INSC's corporate veil and INSC's corporate status, whether Wordtech preserved these arguments for trial, the law governing these issues and whatever jury instructions might be necessary.

Wordtech, 609 F.3d at 1317-18. Wordtech since filed its instant Motion arguing that Defendants are liable as a matter of law for inducement of infringement under 35 U.S.C. § 271(b). In addition, Defendant Assadian requested that this Court:

1) relieve him from this case pursuant to Rule 60(d)(1); and

2) grant judicial review of the appellate court's audio, transcript, and related attachments. Each of these ...


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