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Enplas Display Device Corp. v. Seoul Semiconductor Co., Ltd.

United States District Court, N.D. California

August 10, 2016

ENPLAS DISPLAY DEVICE CORPORATION, et al., Plaintiffs,
v.
SEOUL SEMICONDUCTOR COMPANY, LTD., Defendant.

          ORDER ON POST-TRIAL MOTIONS RE: DKT. NOS. 484, 486, 529

          NATHANAEL M. COUSINS United States Magistrate Judge

         On March 24, 2016, the jury returned a verdict in this patent infringement case that Enplas Display Device Corporation (“EDD”) willfully infringed the ’554 and ’209 patents, and awarded Seoul Semiconductor Company, Ltd. (“SSC”) $4, 070, 000. The jury also found that the patents were not invalid. After the trial, the Court determined that claim 2 of the ’554 patent was not invalid. The Court also ruled that EDD did not prove that the ’209 patent inventor, Dr. Pelka, engaged in inequitable conduct.

         Now, the parties each move for further post-trial relief. EDD moves for judgment as a matter of law, a new trial, and to alter the judgment. SSC moves for the Court to award enhanced damages and attorneys’ fees. The Court finds that no further relief is necessary. The Court DENIES EDD’s motion. The Court concludes that although EDD willfully infringed the patents, there is no evidence of egregious behavior and this case does not warrant enhanced damages or attorneys’ fees.

         I. RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW

         Under Federal Rule of Civil Procedure 50(b), a court may grant a renewed motion for judgment as a matter of law if “the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.” “A renewed motion for judgment as a matter of law is properly granted ‘if the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion, and that conclusion is contrary to the jury’s verdict.’” Escriba v. Foster Poultry Farms, Inc., 743 F.3d 1236, 1242 (9th Cir. 2014) (quoting Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir. 2002)); see also Old Town Canoe Co. v. Confluence Holdings Corp., 448 F.3d 1309, 1314 (Fed. Cir. 2006) (“A motion for judgment as a matter of law is properly granted only if no reasonable juror could find in the non-movant’s favor.”).

         A jury’s verdict must be upheld if supported by substantial evidence, even if contrary findings are also possible. Harper v. City of Los Angeles, 533 F.3d 1010, 1021 (9th Cir. 2008). In considering the evidence, the Court must draw all reasonable inferences in favor of the nonmoving party, disregard all evidence favorable to the moving party that the jury is not required to believe, and ask whether the nonmoving party has presented sufficient evidence to support the jury’s conclusion. Id.; Escriba, 743 F.3d at 1242-43. “[I]n entertaining a motion for judgment as a matter of law, the court . . . may not make credibility determinations or weigh the evidence.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).

         EDD moves for judgment as a matter of law, for a new trial, and relief from the judgment on (A) improper claim construction; (B) infringement and invalidity verdicts; (C) the jury’s finding of induced infringement; (D) the amount of damages; (E) inequitable conduct; and (F) a handful of additional issues.

         A. Claim Construction

         EDD moves for a new trial under Rule 59(a) because it argues that the Court did not construe claims that were in dispute. Dkt. No. 484 at 7-9. Specifically, EDD argues that the Court failed to construe the terms “illumination coupler, ” “such that light rays which would otherwise pass out of said waveguide are captured for propagation between said top and bottom surfaces, ” “leaky, ” and “leakage, ” for the ’554 patent; and “around the perimeter of the aperture” and “directing” for the ’209 patent.

         Northern District of California Patent Local Rule 4-4 requires litigants to identify all disputed terms, then jointly identify the 10 most significant terms to be presented at the Markman hearing. The Federal Circuit requires a litigant to identify terms for claim construction before post-trial motions: “As we have repeatedly explained, litigants waive their right to present new claim construction disputes if they are raised for the first time after trial.” Lazare Kaplan Int’l, Inc. v. Photoscribe Techs., Inc., 628 F.3d 1359, 1376 (Fed. Cir. 2010). In SanDisk v. Memorex Products, Inc., 415 F.3d 1278, 1292 (Fed. Cir. 2005), the Federal Circuit affirmed the district court’s refusal to entertain claim construction arguments made “after relevant cut-off dates under [the Northern District of California’s Patent Local Rules] and the trial court’s scheduling order.”

         EDD requested claim construction of the term “illumination coupler embedded in an interior region of said waveguide” during the Markman hearing, and the Court determined that construction was not necessary. Dkt. No. 81 at 14. Prior to the Markman hearing, EDD requested construction for the ’209 patent terms “around the perimeter of the aperture” and “directing light rays, ” but did not identify these terms as significant. Dkt. No. 74. When the Court did not include them in its Markman order, EDD never renewed its request or clarified for the Court that these terms were significant. Cf. Apple, Inc. v. Samsung Elecs. Co., 932 F.Supp.2d 1076, 1079 (N.D. Cal. 2013) (finding that Samsung had not waived construction of a term, noting that “Samsung has continued to raise the issue, first in invalidity contentions and later in arguing for a jury instruction.”). Finally, EDD never identified the ’554 patent terms “such that light rays which would otherwise pass out of said waveguide are captured for propagation between said top and bottom surfaces, ” “leaky, ” and “leakage, ” for the Court or requested construction of them.

         The Court finds that EDD’s request is too late and DENIES the motion for a new trial on the basis that the Court did not construe the above terms.

         B. Infringement and Invalidity Verdict

         The Court addresses the infringement and invalidity verdicts together, as both are based on expert testimony. Each side had one expert to discuss both infringement and invalidity. SSC’s expert was Dr. Duncan Moore, and EDD’s expert was Dr. Clifford Pollock. Both experts testified that they were persons of ordinary skill in the art relevant to the patents in suit. No party objected to the expert’s qualifications to testify as to those topics.

         Each expert testified fully that it was his expert opinion that his side won on infringement and invalidity. Both SSC and EDD walked their own expert and the jury through each element of each claim and used demonstratives to emphasize that their expert opined on all relevant aspects of all claims at issue. As to invalidity, each expert testified about prior art and the theories of invalidity consistent with his party’s position. At times, opposing counsel was able to obfuscate an expert’s opinion by forcing the expert to admit to the possibility of a contradictory opinion. However, neither expert omitted information necessary to a prima facie case of infringement or invalidity.

         Thus, the jury’s assessment of infringement and invalidity required the jury to find one expert more credible than the other. “[I]n entertaining a motion for judgment as a matter of law, the court . . . may not make credibility determinations or weigh the evidence.” Reeves, 530 U.S. at 150. The Court will not second-guess the jury’s credibility determination. The jury’s verdict that SSC proved by a preponderance of evidence that EDD infringed the patents-in-suit, and that EDD did not prove by clear and convincing evidence that the patents were invalid, is supported by substantial evidence. EDD’s motion for judgment as a matter of law is DENIED.

         C. Induced Infringement

         EDD challenges the jury finding that it induced infringement, arguing that EDD did not know its downstream users. Prior to the start of trial, the Court ruled that SSC did not need to prove that EDD knew its downstream users with specificity. Dkt. No. 389 at 3.

         The Court previously ruled that while SSC must demonstrate direct infringement, and in so doing, must identify a direct infringer, SSC does not need to demonstrate that EDD knew of that particular direct infringer. “Inducement can be found where there is evidence of active steps taken to encourage direct infringement, which can in turn be found in advertising an infringing use or instructing how to engage in an infringing use.” Takeda Pharm. v. West-Ward Pharm., 785 F.3d 625, 630-31 (Fed. Cir. 2015). The case law does not require proof that the induced infringer knows of the direct infringement, or intends to induce a specific infringer. See Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 774 (Fed. Cir. 1993) (finding that “[l]iability for either active inducement of infringement or contributory infringement is dependent upon the existence of direct infringement.”)(emphasis added).

         The case law provides that an individual can be liable for active inducement if they encourage direct infringement through an advertisement or instruction booklet. Takeda, 785 F.3d at 630-31. These activities are directed at a general audience of people-buyers, sellers, and users of the product. Thus, the inducer does not need to have the intent to induce a particular person or entity, but rather, can be liable for encouraging direct infringement to the wider public, or a class of people or entities. Id.

         At trial, SSC demonstrated that EDD knew its products would be used in televisions, and EDD knew that some of those televisions would likely be sold in the United States. Tr. 937-939. The Court finds that the jury’s determination that EDD induced infringement in the United States is based on substantial evidence.

         D. Damages

         EDD moves for judgment as a matter of law under Rule 50(b), arguing that SSC presented no evidence supporting their damages request of $4, 000, 000 for the ’554 patent. SSC’s expert, Julie Davis, testified about the hypothetical negotiation between the parties for a license to the two patents. EDD objected to Davis’ testimony in a Daubert motion, which the Court rejected at that time. Dkt. No. 281. EDD then moved to exclude Davis’ testimony based on infringement of “other Enplas lenses” that were not part of this case. The Court granted that request in part, but stated, “Consistent with this Court’s prior rulings, Davis cannot assume that infringement can be proven for the lenses not in this case. However, Davis may present evidence that under a lump-sum royalty negotiation, EDD would seek to cover all of its potentially infringing products. As long as Davis’ ultimate damages determination is adequately adjusted to only recover for those lenses in the case, her testimony is permitted.” Dkt. No. 384 at 3.

         Davis testified that “if the license is limited only to the accused lenses, I think the reasonable royalty for the ’554 patent is $500, 000, and for the ’209 patent $70, 000.” Tr. 722: 3-5. However, Davis also testified that if EDD wanted a freedom-to-operate license, which would be the most pragmatic, “they would be willing to pay $2 to 4 million in order to ensure that they’d never have to worry about testing these products and negotiating other licenses for those products in the future.” Tr. 720: 22-25. EDD did not have a damages expert and did not present any evidence to rebut Davis’ opinion. Thus, the Court finds that Davis’ testimony complied with its prior orders and that substantial evidence supported the jury’s award of $4 million for the ’554 lens.

         E. Inequitable Conduct

         EDD argues that the Court provided inadequate analysis in its ruling that EDD could not prove Dr. Pelka’s inequitable conduct. The Court issued an order describing its findings of fact and conclusions of law. Dkt. No. 478. There, the Court found that EDD failed to present sufficient evidence to demonstrate inequitable conduct on both the materiality and intent elements. Both elements must be met by clear and convincing evidence in order to prove inequitable conduct and for the Court to award the extraordinary remedy of the unenforceability of the ’209 patent. The Court is not persuaded by EDD’s arguments that EDD should be entitled to new findings or a new hearing.

         F. Other Issues

         EDD argues that the verdict form is inconsistent with controlling law because it did not provide a claim-by-claim finding for direct infringement. Dkt. No. 447. The Court finds this argument unpersuasive because the jury instructions require the jury to find both direct and induced infringement on each claim for each product. Dkt. No. 441 at 10-12.

         Additionally, EDD argues that it was unfairly blocked from rebutting “other lenses” evidence. The Court dealt with this issue extensively prior to the start of trial and made evidentiary rulings during trial to remain consistent with its rulings, while fairly giving each party an opportunity to present its narrative. Dkt. Nos. 280, 384, 388. The Court is not persuaded that its rulings deprived EDD of a fair trial.

         G. Rule 60 and 59(e) motion ...


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