-FBS The Fox Group, Inc. v. Cree, Inc. et al, No. 2:2010cv00314 - Document 559 (E.D. Va. 2011)
Court Description: MEMORANDUM OPINION and ORDER granting The Fox Group, Inc.'s Motion for Entry of Partial Summary Judgment of Non-Infringement of U.S. Patent No. 6,543,026, and Dismissal Without Prejudice of Related Counterclaims, Based on the Court's Claim Construction; dismissing as moot Cree, Inc.'s counterclaims seeking declarations that the '026 patent is not infringed, invalid, and unenforceable, in light of the court's holding of non-infringement of the '026 patent; directing the clerk to enter judgment for Cree on Count I of the Complaint and dismiss Cree's counterclaims set forth above as moot, in accordance with this Memorandum Opinion and Order. Signed by District Judge Rebecca Beach Smith and filed on 7/20/11. (mwin, )
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UNITED STATES DISTRICT COURT ["" EASTERN DISTRICT OF VIRGINIA I Norfolk Division THE FOX GROUP, I INC., pjt ED r ~ JUL 2 0 2011 1 c^~"5isr^CTXOL; Plaintiff, v. CREE, ACTION NO. 2:10cv314 INC., Defendant. MEMORANDUM OPINION AND This <wFox") matter comes Motion for before Entry ORDER the court on of Partial The Fox Summary Group, Inc.'s Judgment of Non-Infringement of U.S. Patent No. 6,543,026, and Dismissal Without Prejudice of Construction Related ("Fox's I. The Counterclaims, on the Court's Claim Summary Judgment Motion"). Factual relevant Based factual and Procedural History history and the relevant procedural history prior to June 10, 2011, is set forth in detail in this court's claim construction Opinion, and need not be repeated herein. The Fox Group, Inc. v. Cree, Inc., at Va. 2011). *l-4 (E.D. June 10, -- F. Supp. 2d --, See 2011 WL 2308694, On June 28, 2011, Fox filed its Summary Judgment Motion, in which it represents that it cannot prove that Cree, Inc. U.S. Patent construction No. of 6,543,026 the claims (w*026 of that patent") patent, (wCree") infringed under and this "based court's upon the discovery provided by Cree in this action." Mem. in Supp. of Mot. for Summ. J. 1, ECF No. 383; see Compl. 1H 18-25, ECF No. 1 (alleging Cree's infringement of the *026 patent). Accordingly, Fox requests that the court enter partial summary judgment of non-infringement of the *026 patent in favor of Cree. Fox also requests that Court dismiss Cree's counterclaims as moot or, "the in the alternative, decline to exercise declaratory judgment jurisdiction to hear Cree's counterclaims at this time." On July 6, 2011, Judgment Motion. Mem. in Supp. for Summ. J. 7. Cree filed its Partial Opposition to Fox's Summary Cree "agrees non-infringement with respect to the should be entered in its favor," 1, ECF No. 430 of Mot. that summary judgment of *026 patent is appropriate and Partial Opp. to Mot. for Summ. J. [hereinafter "Cree's Opp."] , but argues that the Court should exercise its discretion to hear Cree' s counterclaims that seek declarations that the '026 patent is invalid and unenforceable. Answer ff 130-35, ECF No. 12. Fox's Summary Judgment Motion II. See On July 14, 2011, Fox filed its Reply. is ripe for review. Analysis Summary judgment is appropriate when a court, viewing the record as a whole and in the light most favorable to the nonmoving party, finds that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. 248-50 P. 56{a); (1986). Anderson v. Likewise, Liberty Lobby, Inc., 477 U.S. 242, the court can enter judgment in favor of the nonmovant, as long as the court gives "notice and a reasonable time to respond." agree, and the Fed. R. Civ. P. 56 (f) . court FINDS, that In this case, both parties there are no material facts in dispute regarding Cree's alleged infringement of the A026 patent and that Fox cannot meet its burden to prove that Cree infringed the '026 patent under the court's claim construction.1 Accordingly, Cree is entitled to judgment as a matter of law on Count One of the Complaint.2 The only remaining matter is the proper disposition of Cree's declaratory judgment counterclaims related to the x026 patent. threshold question is whether this court has subject The matter jurisdiction over those counterclaims notwithstanding the fact that 1 Cree agrees that Fox cannot meet its burden to prove that Cree infringed the '026 patent under the court's claim construction, but nonetheless asks the court to enter partial summary judgment of non-infringement on the basis that "Fox has failed to adduce any evidence of infringement under any claim construction. " Cree' s Opp. 3 (emphasis in original) . At this stage of the proceeding, the court declines to consider summary judgment of non-infringement under any claim construction other than its own. See Markman v. Westview Instruments, the Inc. , infringement 52 F.3d 967, analysis is 976 two (Fed. steps, Cir. 1995) in which (providing that the court first determines "the meaning and scope of the patent claims asserted to be infringed," and then compares "the properly construed claims to the device accused of infringing" (emphasis added) (citations omitted)). 2 As such, Cree's counterclaim seeking a declaration of non-infringement of the '026 patent, Answer ^|f 126-29, is DISMISSED, as MOOT. Cree is not liable to Fox for infringing the '026 patent. court must to hear controversy" those counterclaims, regarding the '026 United States Constitution. there patent under be . . . "case III of or the (providing that " [i]n a case or controversy within its jurisdiction, of the United States a Article See 28 U.S. C. ยง 2201 (a) For the . . . any court may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought") / Prasco, LLC v. Medicis Pharm. Corp. , 537 F.3d 1329, 1335 {Fed. Cir. 2008) (explaining that the Declaratory Judgment Act only provides a remedy if the "suit meets the case or omitted) ) . must be controversy requirement of and concrete, touching parties having adverse legal interests, ' of character, specific relief through the . legal (citations . the dispute relations of 'real and substantial, ' and a decree of a conclusive as distinguished from an opinion advising what the law would be upon (quoting Medlmmune, (2007)). III" "For there to be a case or controversy . *definite 'admi[t] Article The a hypothetical test Inc. is v. state of Genentech, "whether the facts.'" Inc., facts 549 alleged, Id. at U.S. 1335-36 118, under all 127 the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, or sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Id. at 133 6 (internal quotation marks and citations omitted). An analysis "important is element" "the issue in the of court's whether there all-the-circumstances has been meaningful preparation to conduct potentially infringing activity." Cat Tech LLC v. TubeMaster, (stating that it "must be Inc., 528 F.3d 871, considered judgment is appropriate") . 880 (Fed. Cir. 2008) in determining whether a declaratory There is no dispute that Fox brought this action because it believes Cree engages in activity that infringes the '026 patent. prove However, such activity there also is no dispute that Fox cannot actually infringes the '026 patent under the court's claim construction, which controls the issue of infringement between these parties conducting even in this "potentially case. In other words, infringing activity." Cree is not Id. Cree's only argument in support of nonetheless finding a real and immediate controversy is that "Fox has made clear that it disagrees with the Court's claim construction and that Cree does not infringe." Opp. 7. Cree suggests that Fox's avowed reservation of to appeal this court's claim construction, see Mem. Cree's its right in Supp. of Mot. for Summ. J. 2, and the accompanying specter that the Federal Circuit or the Supreme Court could vacate the non-infringement judgment, is enough to make a "definite and concrete" dispute over the '026 patent. See Cardinal Chem. Co. v. Morton Int' 1, Inc. , 508 U.S. 83, 95 (1993) (noting that the party seeking a declaratory judgment has the burden of establishing the existence of an actual case or controversy) . accept Cree's position, the court would have to find that its claim construction is likely erroneous, that ruling. To and, therefore, tacitly abandon The court will not do so. The court is of the opinion that a justiciable dispute cannot be predicated on the hypothetical results of a hypothetical appeal.3 Cree is not entitled to pursue counterclaims that seek to invalidate the '026 patent and/or render it unenforceable when the court has found that Cree has not been "making, using, selling, and/or offering for sale silicon carbide substrates and products carbide 1 21. the that practice '026 patent between Fox and Cree, (1941), Cas. the '026 patent." Compl. Co. v. Pac. the court FINDS that "all the Coal & Oil Co., 312 U.S. 270, demonstrate that it is mooted by the court's judgment of non-infringement.4 3 invention of To the extent a case or controversy once existed regarding circumstances," Md. 273 the that use silicon See Steffel v. Thompson, 415 U.S. 452, 459 Of course, if summary judgment of non-infringement of the '026 patent is ultimately vacated, Cree's counterclaims related to the '026 patent would be part of a case or controversy and could proceed. 4 Cree cites Cardinal Chem. Co. v. Morton Int'l, Inc., 508 U.S. 83 (1993) for the proposition that "the issue of validity is not when a finding of no infringement is made or affirmed." Cree's Opp. 5 (emphasis in original). Cardinal is inapposite. u[T]he issue before [the Court in Cardinal] . . . concern[ed] the mooted n.10 (1974) ("The rule in federal cases is that an actual controversy must be extant at all stages of review . Moreover, even counterclaims, if the court could . . ." hear (citations omitted) ) . Cree's ^026 patent it would exercise its discretion to dismiss them as moot, in light of its holding of non-infringement. See Teva Pharm. USA, Inc. v, Pfizer, Inc. , 395 F.3d 1324, 1331 (Fed. Cir. 2005) ("Even if there is an actual controversy, the district court is not required to exercise declaratory judgment jurisdiction, but has substantial discretion to decline that jurisdiction." (citations omitted)), abrogated on other grounds, 549 U.S. 118 (2007) ; Nystrom v. TREX Co. , Inc., 339 F.3d 1347, 1351 n.* (Fed. Cir. 2003) ; see also Phonometrics, Inc. v. ("Where, N. Telecom, as here, plainly evident, issue." n.9 (Ct. Inc., 133 1468 (Fed. Cir. 1998) it is appropriate to treat only the infringement (quoting Leesona Corp. v. Cl. 1459, noninfringement is clear and invalidity is not United States, 530 F.2d 896, 906 1976))). III. For the above reasons, Motion. F.3d Cree's Conclusion the court GRANTS Fox's Summary Judgment counterclaims seeking declarations that the x026 jurisdiction of an intermediate appellate court-not the jurisdiction of ... a trial court . . . ." 508 U.S. at 95. patent is not infringed,5 invalid, as MOOT, and unenforceable are DISMISSED, in light of the court's holding of non-infringement of the '026 patent.6 The Clerk is DIRECTED to forward a copy Opinion and Order to counsel for all parties. of this Memorandum The Clerk is further DIRECTED to enter judgment for Cree on Count I of the Complaint and dismiss Cree's counterclaims set forth above as moot, in accordance with this Memorandum Opinion and Order. IT IS SO ORDERED. /s/ Rebecca Beach Smith United States District Judge REBECCA BEACH UNITED Norfolk, Virginia July 5O' 2011 See supra note 2. See supra note 3. SMITH STATES DISTRICT JUDGE
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