Space Data Corporation v. Alphabet Inc and Google LLC, No. 5:2016cv03260 - Document 255 (N.D. Cal. 2018)

Court Description: ORDER DENYING 190 PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT. Signed by Judge Beth Labson Freeman on 5/18/2018. (blflc4S, COURT STAFF) (Filed on 5/18/2018)

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Space Data Corporation v. Alphabet Inc and Google LLC Doc. 255 Case 5:16-cv-03260-BLF Document 255 Filed 05/18/18 Page 1 of 8 1 2 UNITED STATES DISTRICT COURT 3 NORTHERN DISTRICT OF CALIFORNIA 4 SAN JOSE DIVISION 5 6 SPACE DATA CORPORATION, Plaintiff, 7 v. 8 9 Case No. 16-cv-03260-BLF ALPHABET INC., et al., Defendants. 10 ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT [Re: ECF 190] United States District Court Northern District of California 11 Before the Court is Plaintiff Space Data Corporation’s (“Space Data”) motion for partial 12 13 summary judgment. Mot., ECF 190. Space Data argues that Defendants Alphabet Inc. and 14 Google LLC (collectively, “Google”) are judicially estopped from claiming that the asserted 15 claims in Space Data’s U.S. Patent No. 9,678,193 (the “’193 patent”) are invalid under 35 U.S.C. 16 §§ 101, 102, and/or 103. Id. at 1. The Court heard oral argument on the motion on May 17, 2018. 17 For the reasons discussed below, Space Data’s motion is DENIED. 18 19 I. BACKGROUND Space Data brings this action against Google, alleging that Google’s “Project Loon”—a 20 research and development project with the mission of providing wireless services using high- 21 altitude balloons placed in the stratosphere—infringes Space Data’s patents and unlawfully uses 22 Space Data’s confidential information and trade secrets. Third Am. Compl. (“TAC”), ECF 144. 23 Space Data asserts (1) claims for patent infringement of four patents owned by Space Data; (2) 24 misappropriation of trade secrets, under the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. 25 §1836; (3) misappropriation of trade secrets, under the California Uniform Trade Secrets Act 26 (“CUTSA”), Cal. Civ. Code § 3426 et seq.; and (4) breach of contract. See generally id. In 27 particular, Space Data claims that Google infringes Space Data’s ’193 patent titled (“Systems and 28 Applications of Lighter-Than-Air (LTA) Platforms”). TAC ¶¶ 380–404. Dockets.Justia.com United States District Court Northern District of California Case 5:16-cv-03260-BLF Document 255 Filed 05/18/18 Page 2 of 8 1 Space Data and Google have each filed patent applications relating to balloon 2 communicating systems. One of Google’s patent applications was issued as U.S. Patent No. 3 8,820,678 (the “’678 patent”) on September 2, 2014. Ex. A to Pransky Decl., ECF 225-2. Shortly 4 before the ’678 patent issued, on July 10, 2014, Space Data filed an application which became 5 Patent Application No. 14/328,331 (the “’331 application”). Ex. B to Pransky Decl., ECF 225-3. 6 In 2015, Space Data provoked an interference proceeding at the PTO and asserted that the claims 7 in the ’331 application had priority over those in Google’s ’678 patent. Ex. C to Pransky Decl. 8 (Letter to Commissioner of Patents dated April 24, 2015), ECF 225-4. Google did not contest 9 priority in the interference proceeding. As a result, the PTO’s Patent Trial and Appeal Board 10 (“PTAB”) issued a ruling in Space Data’s favor. Ex. 8 to Hosie Decl. (Interference Judgment 11 entered August 31, 2016), ECF 185-9. Space Data’s ’331 application issued as the ’193 patent on 12 June 13, 2017. Ex. D to Pransky Decl., ECF 225-5. 13 14 II. LEGAL STANDARD Federal Rule of Civil Procedure 56 governs motions for summary judgment. Summary 15 judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions 16 on file, together with the affidavits, if any, show that there is no genuine issue as to any material 17 fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. 18 Catrett, 477 U.S. 317, 322 (1986). “Partial summary judgment that falls short of a final 19 determination, even of a single claim, is authorized by Rule 56 in order to limit the issues to be 20 tried.” State Farm Fire & Cas. Co. v. Geary, 699 F. Supp. 756, 759 (N.D. Cal. 1987). 21 The moving party “bears the burden of showing there is no material factual dispute,” Hill 22 v. R+L Carriers, Inc., 690 F. Supp. 2d 1001, 1004 (N.D. Cal. 2010), by “identifying for the court 23 the portions of the materials on file that it believes demonstrate the absence of any genuine issue 24 of material fact.” T.W. Elec. Serv. Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th 25 Cir. 1987). In judging evidence at the summary judgment stage, the Court “does not assess 26 credibility or weigh the evidence, but simply determines whether there is a genuine factual issue 27 for trial.” House v. Bell, 547 U.S. 518, 559-60 (2006). A fact is “material” if it “might affect the 28 outcome of the suit under the governing law,” and a dispute as to a material fact is “genuine” if 2 Case 5:16-cv-03260-BLF Document 255 Filed 05/18/18 Page 3 of 8 1 there is sufficient evidence for a reasonable trier of fact to decide in favor of the nonmoving party. 2 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where the moving party will have the burden of proof on an issue at trial, it must United States District Court Northern District of California 3 4 affirmatively demonstrate that no reasonable trier of fact could find other than for the moving 5 party. Celotex, 477 U.S. at 325; Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 6 2007). Once the moving party meets its initial burden, the nonmoving party must set forth, by 7 affidavit or as otherwise provided in Rule 56, “specific facts showing that there is a genuine issue 8 for trial.” Liberty Lobby, 477 U.S. at 250 (internal quotation marks omitted). If the nonmoving 9 party’s “evidence is merely colorable, or is not significantly probative, summary judgment may be 10 granted.” Id. at 249–50 (internal citations omitted). Mere conclusory, speculative testimony in 11 affidavits and moving papers is also insufficient to raise genuine issues of fact and defeat 12 summary judgment. See Thornhill Publ’g Co. v. GTE Corp., 594 F.2d 730, 738 (9th Cir.1979). 13 For a court to find that a genuine dispute of material fact exists, “there must be enough doubt for a 14 reasonable trier of fact to find for the [non-moving party].” Corales v. Bennett, 567 F.3d 554, 562 15 (9th Cir. 2009). 16 III. 17 DISCUSSION Space Data seeks partial summary judgment that (1) Google is “judicially estopped from 18 arguing that references disclosed during proceedings involving [Google’s] patent applications 19 and/or patents before the [PTO] and/or foreign patent offices, and references duplicative of the 20 disclosed references, constitute prior art as to asserted claims 1, 2, 4 and 17 of Space Data’s [’193 21 patent] under 35 U.S.C. §§ 102 and/or 103” and (2) Google is judicially estopped from arguing 22 that asserted claims 1, 2, 4 and 17 of the ’193 patent (“Asserted Claims”) are invalid under 35 23 U.S.C. §§ 101, 102, and/or 103. Mot. 1. 24 In its motion, Space Data asserts that the Asserted Claims of the ’ 193 patent are identical 25 to certain claims that were issued in Google’s ’678 patent. See Mot. 2. Despite this identity, 26 Space Data argues, Google now contends that the Asserted Claims are invalid as being anticipated 27 or rendered obvious by certain references. Id. at 11–12. For support, Space Data points to 28 Google’s Preliminary Invalidity Contentions, which lists a table of references that Google intends 3 Case 5:16-cv-03260-BLF Document 255 Filed 05/18/18 Page 4 of 8 1 to rely on for its anticipation and obviousness arguments. Ex. 16 to Hosie Decl. (“Invalidity 2 Contentions”), ECF 185-17. In Space Data’s view, Google has changed its position that it took 3 during the PTO proceedings and now argues that the Asserted Claims are invalid based on the 4 “very references that Google itself said repeatedly did not anticipate and make obvious.” Mot. 20. 5 Based on this premise, Space Data asserts that judicial estoppel bars Google from challenging the 6 validity of the Asserted Claims in this proceeding. Id. at 19–21. United States District Court Northern District of California 7 Google responds with two arguments. First, Google contends that “[i]t is well-settled law 8 that the prosecution of a patent does not estop a party from later arguing that the patent it once 9 attempted to secure is invalid.” Opp’n 5, ECF 225. For support, Google cites a number of cases 10 where courts have declined to apply judicial estoppel. Id. at 5–6 (citing Paramount Publix Corp. 11 v. Am. Tri–Ergon Corp., 294 U.S. 464 (1935); Haughey v. Lee, 151 U.S. 282 (1894); Veaux v. S. 12 Oregon Sales, 123 F.2d 455 (9th Cir. 1941); Kellogg Switchboard & Supply Co. v. Michigan Bell 13 Tel. Co., 99 F.2d 203, 205 (6th Cir. 1938)). Second, Google asserts that even if judicial estoppel 14 were to apply, Google is not estopped from arguing the invalidity of the Asserted Claims because 15 it has not made any inconsistent representations to the PTO and the Court. Id. at 7–12. 16 The Court need not decide whether a categorical rule bars the application of judicial 17 estoppel to patent invalidity arguments because Space Data has failed to satisfy its moving burden 18 to prevail on this motion even under New Hampshire v. Maine, 532 U.S. 742 (2001), which Space 19 Data urges the Court to apply. 20 The doctrine of judicial estoppel provides that “[w]here a party assumes a certain position 21 in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply 22 because his interests have changed, assume a contrary position, especially if it be to the prejudice 23 of the party who has acquiesced in the position formerly taken by him.” New Hampshire, 532 24 U.S. at 749 (quoting Davis v. Wakelee, 156 U.S. 680, 689 (1895)). The Supreme Court in New 25 Hampshire articulated several factors that inform the courts when deciding whether to apply the 26 judicial estoppel doctrine in a particular case. “First, a party’s later position must be ‘clearly 27 inconsistent’ with its earlier position.” Id. at 750. “Second, courts regularly inquire whether the 28 party has succeeded in persuading a court to accept that party’s earlier position, so that judicial 4 Case 5:16-cv-03260-BLF Document 255 Filed 05/18/18 Page 5 of 8 1 acceptance of an inconsistent position in a later proceeding would create ‘the perception that either 2 the first or the second court was misled.’” Id. “A third consideration is whether the party seeking 3 to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment 4 on the opposing party if not estopped.” Id. at 751. “Additional considerations may inform the 5 doctrine’s application in specific factual contexts.” Id. In addition, “[w]hether judicial estoppel 6 applies is a matter of regional circuit law” even in patent cases. See, e.g., Minnesota Min. & Mfg. 7 Co. v. Chemque, Inc., 303 F.3d 1294, 1302 (Fed. Cir. 2002). The Ninth Circuit generally has 8 considered the New Hampshire factors in applying judicial estoppel. See, e.g., Elston v. Westport 9 Ins. Co., 253 F. App'x 697, 699 (9th Cir. 2007). United States District Court Northern District of California 10 Google argues that even if judicial estoppel were to apply, Google should not be estopped 11 from arguing the invalidity of the Asserted Claims because it has not made any inconsistent 12 representations. Opp’n 7–12. New Hampshire provides that “a party’s later position must be 13 ‘clearly inconsistent’ with its earlier position” for judicial estoppel to take effect. 532 U.S. at 750. 14 The Court has reviewed the prosecution history of the ’678 patent to determine whether Google is 15 correct. 16 As Space Data points out, the patent examiner issued a non-final rejection stating that 17 the ’678 patent claims were anticipated or rendered obvious by U.S. Patent No. 6,167,263 18 (“Campbell”). Ex. 1 to Hosie Decl. (January 3, 2014 Non-Final Rejection), ECF 185-2. In 19 response, Google amended independent claim 1 to recite that “the desired movement of the target 20 balloon comprises a desired horizontal movement of the target balloon” and that “controlling the 21 target balloon based on the desired movement of the target balloon comprises controlling an 22 altitude of the target balloon based on the desired horizontal movement of the target balloon.” 23 Ex. 3 to Hosie Decl. 2 (March 24, 2014 Office Action Response), ECF 185-4. Google added 24 similar features to independent claim 26. Id. at 7. Google then argued that Campbell did not 25 disclose the feature of “controlling an altitude of the target balloon based on the desired horizontal 26 movement of the target balloon” and thus the claims were patentable. Id. at 15. Subsequently, the 27 PTO issued the ’678 patent. Ex. 4 to Hosie Decl. (Issue Notification), ECF 185-5. 28 Here, Google avers that its Invalidity Contentions are not inconsistent with the prosecution 5 United States District Court Northern District of California Case 5:16-cv-03260-BLF Document 255 Filed 05/18/18 Page 6 of 8 1 history described above. Opp’n 9. The Court agrees. The Invalidity Contentions assert that “the 2 only limitation of the independent claims of the ’193 patent that was not disclosed by Campbell is 3 the use of altitude control for horizontal positioning of a balloon.” Invalidity Contentions 11. 4 This statement is not inconsistent with Google’s representation that Campbell does not disclose 5 “controlling an altitude of the target balloon based on the desired horizontal movement of the 6 target balloon” as stated in its March 24, 2014 Office Action Response. In fact, Google’s 7 obviousness arguments are premised on Campbell’s lack of disclosure. In the Invalidity 8 Contentions, Google further identifies a number of references that purportedly cure Campbell’s 9 deficiency. Invalidity Contentions 13–20. Google then explains why one of skill in the art would 10 have combined Campbell with those references to render independent claims 1 and 17 of the ’193 11 patent obvious. Id. at 12–20. This line of reasoning does not contradict Google’s arguments that 12 were presented to the PTO. For these reasons, Space Data has not shown that Google is relying on 13 arguments that are “clearly inconsistent” with the statements made during the prosecution of 14 the ’678 patent. New Hampshire, 532 U.S. at 749 (holding that a party’s later position must be 15 “clearly inconsistent” with its earlier position for judicial estoppel to apply). The Court is unpersuaded by Space Data’s other arguments. First, Space Data argues that 16 17 the Invalidity Contentions are inconsistent with Google’s position that was taken during the 18 parties’ interference proceedings. See Mot. 10–11; Reply 15. The Invalidity Contentions assert 19 that U.S. Patent No. 6,402,090 (“Aaron”) in combination with other references would render the 20 Asserted Claims obvious. Invalidity Contentions 13–15. According to Space Data, “Google 21 conceded during the [i]nterference [p]roceeding that Aaron did not invalidate the core ’678 22 claims.” Mot. 10. The Court disagrees with Space Data’s characterization of Google’s position. 23 During the interference proceeding, the PTAB considered Aaron in the context of whether certain 24 dependent claims in the ’678 patent were within the same “count” 1 as independent claim 1. Ex. 25 12 to Hosie Decl., ECF 185-13. Whether Aaron anticipated or rendered obvious the subject matter 26 27 28 1 “Count means the Board’s description of the interfering subject matter that sets the scope of admissible proofs on priority.” 37 C.F.R. § 41.201. “[E]ach count must describe a patentably distinct invention.” Id. 6 Case 5:16-cv-03260-BLF Document 255 Filed 05/18/18 Page 7 of 8 1 of the Asserted Claims was not at issue. See id. As such, the Court finds that Space Data has not 2 identified any inconsistent statements made by Google regarding Aaron. United States District Court Northern District of California 3 Second, citing to Google’s Information Disclosure Statements, Space Data argues that 4 “Google told the PTO that the prior art listed did not anticipate nor render obvious” the ’678 5 patent claims. Reply 8 (citing Exs. 32, 34 to Hosie Decl. (the “’678 Information Disclosure 6 Statements”), ECF 135-33, -34). However, the ’678 Information Disclosure Statements do not 7 include any statement that Google believed that the listed references do not anticipate or render 8 obvious the claims that were being pursued. See Exs. 32, 34 to Hosie Decl. Moreover, “[t]he 9 filing of an information disclosure statement shall not be construed to be an admission that the 10 information cited in the statement is, or is considered to be, material to patentability as defined in 11 § 1.56(b).” 37 C.F.R. § 1.97. Thus, the “mere submission of an [information disclosure 12 statement] to the USPTO does not constitute the patent applicant’s admission that any reference in 13 the [information disclosure statement] is material prior art.” Abbott Labs. v. Baxter Pharm. Prod., 14 Inc., 334 F.3d 1274, 1279 (Fed. Cir. 2003). The Court therefore rejects Space Data’s argument 15 that the ’678 Information Disclosure Statements show any “clearly inconsistent” positions taken 16 by Google. New Hampshire, 532 U.S. at 749 (requiring a showing that the accused party has 17 taken a “clearly inconsistent” position for judicial estoppel to apply). 18 Third, according to Space Data, Google’s inventor declaration states “that the invention 19 was Google’s alone and fully novel and non-obvious.” Reply 8 (citing Ex. 36 to Hosie Decl. 20 (“Inventor Declaration”), ECF 185-37). But the inventor declaration for the ’678 patent contains 21 no such statement. See Inventor Declaration. Rather, the Inventor Declaration states that the 22 listed inventors believe that they are the first and joint inventors of “the subject matter which is 23 claimed and for which a patent is sought” and that they have a duty to disclose information which 24 is material to patentability as defined in 37 CPR § 1.56.” See id. Nowhere does the Invention 25 Declaration provide that Google believes that the invention claimed in the ’678 patent is neither 26 anticipated nor rendered obvious by specific references, let alone by those listed in later filed 27 information disclosure statements. 28 Accordingly, Space Data has not shown that Google’s position in this case is “clearly 7 Case 5:16-cv-03260-BLF Document 255 Filed 05/18/18 Page 8 of 8 1 inconsistent” with its earlier representations before the PTO under New Hampshire, which Space 2 Data asserts to be governing. The Court therefore finds that Space Data has failed to satisfy its 3 moving burden to demonstrate that it is entitled to partial summary judgment. Celotex, 477 U.S. 4 at 325 (holding that the moving party must first affirmatively demonstrate that no reasonable trier 5 of fact could find other than for the moving party to establish that it is entitled to summary 6 judgment). 7 As the Court noted at the hearing, Space Data may renew this argument at trial in a motion 8 in limine should Google assert invalidity contentions in direct conflict with its prior position taken 9 before the PTO on which it succeeded in obtaining issuance of the ’678 patent. 10 United States District Court Northern District of California 11 IV. CONCLUSION For the foregoing reasons, Space Data’s motion for partial summary judgment is DENIED. 12 The Court recognizes that Google may possibly advocate a clearly inconsistent position as this 13 case proceeds. This ruling is without prejudice to Space Data’s ability to argue judicial estoppel 14 later in this proceeding. 15 16 17 18 IT IS SO ORDERED. Dated: May 18, 2018 ______________________________________ BETH LABSON FREEMAN United States District Judge 19 20 21 22 23 24 25 26 27 28 8

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