Lismont v. Alexander Binzel Corporation et al, No. 2:2012cv00592 - Document 122 (E.D. Va. 2014)
Court Description: OPINION and ORDER granting 66 Defendant's Motion for Summary Judgment. Copy distributed to all counsel of record on 8/20/14. Signed by District Judge Mark S. Davis and filed on 8/20/14. (tbro)
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UNITED STATES EASTERN DISTRICT DISTRICT Norfolk FILED COURT OF VIRGINIA AUG 2 0 2014 Division clerk, us.msiniei court -^_J HEDWIG LISMONT, Plaintiff, Civil v. Action No. 2:12cv592 ALEXANDER BINZEL CORPORATION, ALEXANDER BINZEL GMBH IBG & CO. SCHWEISSTECHNIK KG, INDUSTRIE-BETEILIGUNGS-GMBH & CO. KG, AND RICHARD SATTLER, Defendants. OPINION This matter is judgment pursuant before to AND the Federal Schweisstechnik GmbH & Co. Beteiligungs-GmbH & (collectively, reasons forth below, on a of Civil motion ("Binzel USA"), ("IBG"), and "Defendants"). the Court GRANTS for Procedure summary 56, filed Alexander Binzel ("Binzel Germany"), KG ("Sattler") set KG Co. Court Rule by Alexander Binzel Corporation ORDER IBG Industrie- Richard ECF No. 66. Defendants' Sattler For the motion for summary judgment. I. The in For the the FACTUAL extensive previous factual orders purposes AND of PROCEDURAL background issued by the instant this BACKGROUND in this Court. motion for case is ECF Nos. summary detailed 51, 79. judgment, where only issue, the Court will briefly recite the relevant facts. In Defendants' 1997, Binzel affirmative Germany defense of laches filed a German patent is at application for a method of using a deep drilling process to produce contact tips for welding or cutting torches. issued on December 10, 1998, identified applicant and owner of the patent, inventor. In international patents, August PCT The German patent, of Binzel Germany which as the and identified Sattler as the 1998, application, Binzel which Germany resulted filed in an several including United States Patent No. 6,429,406 ("the U.S. patent") issued Sattler as on the August inventor 6, 2002. contact of The U.S. tips patent produced listed by deep drilling. Hedwig Lismont of ("Plaintiff") 2000 in Germany, inventor second of the action inventorship alleging that he, contact in tips. Germany, claim. in final rejected subsequently Rights, full was filed an In not Sattler, 2002, seeking The inventorship issue appeal sued Binzel Germany in October parties on action years, the initiated related vigorously November with Plaintiff damages Germany for nine was the true a to his litigated the Plaintiff's 2009. 25, until Plaintiff European Court of Human "alleging that the German courts violated his right to a and fair trial for Human Rights." under Article Spross Decl. 6 of 1 14, the European Convention ECF No. 71-1 at 24. On October appeal 31, 2012, was nearly rejected by three the years German after Plaintiff's court, Plaintiff final filed a Complaint in this Court, alleging that he is the "sole inventor of disclosed the subject matter patent." Compl. f correction of inventorship the 41, ECF and No. claimed 1. In requested [the Plaintiff alleges infringement by Binzel USA. that Plaintiff's collateral claims estoppel" "are Supp. Mot. to Dismiss at 6-7, the Court held a hearing on 18, 2013, issued a motion to Defendants' estoppel and defenses could Complaint. laches not ECF No. Defendants the doctrine ECF No. 21, 2014, fact 66. dismiss because be Defs.' Br. motion and, and the of the of denying collateral such face 2013, on November Order grounds from of On November 5, merits the doctrine affirmative of Plaintiff's 51. their Motion for Summary Judgment on alleging that Plaintiff's claims are barred by Plaintiff and the inter alia, laches." Opinion on determined collateral ECF No. exist" because of Defendants' Memorandum filed February 7, 2014, ECF No. 34. "[u]pon Id. II 60. by of [U.S.] Complaint]," alleging, precluded and "the doctrine the addition, in Defendants filed a Motion to Dismiss, in 71, filed his and the doctrine of laches. responsive brief on February asserting that "genuine issues of material that Defendants' estoppel Plaintiff affirmative is "entitled defenses to discovery" raise "numerous contested factual issues." ECF No. 71 at their reply brief on February 27, 2014. 12, 2014, the Court entered an Order, for issues of both collateral estoppel and Recognizing necessary, ordered the that discovery Court Defendants "is granted to Defendants ECF No. 72. On March potentially dispositive for a laches." both to may discovery certain on ECF No. defenses limited respond filed observing that Defendants' Motion 9. Summary Judgment 3. the 79 at not be period and of Plaintiff s interrogatory requests and requests for production, so that the Court could properly consider Defendants' laches. failed The to Court resolve noted the that, motion if for affirmative defense of Defendants' summary laches judgment, defense the Court would then determine "whether additional discovery is necessary" regarding "Defendants' estoppel." his Id^ at 9 n.2. supplemental laches affirmative Accordingly, On April 15, summary judgment brief, defense. supplemental defense reply ECF No. brief Defendants' on 104. 2014, of Plaintiff filed addressing Defendants April 29, 2014. collateral Defendants' filed ECF their No. 110. Motion for Summary Judgment is ripe for review. II. The Federal Rules STANDARD of OF REVIEW Civil Procedure provide that a district court shall grant summary judgment in favor of a movant if such party "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The mere existence alleged factual dispute between the parties "will not otherwise properly supported motion for summary of some defeat an judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby Inc., the pleadings, affidavits, 477 U.S. 242, deposition 247-48 (1986). transcripts, and If other discovery materials demonstrate that there is no genuine dispute as to a material fact, "it is the 'affirmative obligation of the trial judge to prevent factually unsupported claims and defenses from proceeding to trial.'" 744 F. Pratt, Supp. 2d 543, 999 F.2d 774, 545 778-79 Hostettler v. Auto-Owners Ins. (E.D. Va. 2010) (4th Cir. (quoting Co., Drewitt v. 1993)). If a movant has properly advanced evidence supporting entry of summary judgment, the non-moving party may not rest upon the mere the allegations specific facts of in illustrating a Catrett, the U.S. judge's determine 477 form genuine function the pleadings, 317, is truth of of issue the doing so, for matter and trial. (1986). himself is a genuine issue for trial." instead exhibits 322-24 not but to but weigh Anderson, sworn that the determine 477 U.S. set forth statements Celotex At to must Corp. v. point, "the evidence and whether at 249. there In the judge must construe the facts and all "justifiable inferences" in the light most favorable to the non-moving party, and the judge may not 255; T-Mobile Ne. 380, 385 (4th non-movant's thinks but the Cir. a on would unmistakably on the a defendant's Accordingly, if the granted." the a 477 for the U.S. at "necessarily proof that [t]he mere in support to judgment summary other of insufficient" probative, the . . . evidence non-movant's evidence "is F.3d in the verdict standard at whether he or judgment merits [,] summary not Anderson, be will significantly IdL return 674 evidence side of well-founded not one summary on scintilla position is favors evidentiary trial the ask himself jury could ruling plaintiff's or viewing judge must substantive at of After the evidence presented." the apply existence "the a Id. City Council of Newport News, fair-minded Because implicates credibility determinations. 2012) . evidence [non-movant] 252. LLC v. favor, whether make of the overcome motion. a Id. merely colorable, judgment may be at 249-50. III. DISCUSSION Defendants argue that Plaintiff s claims are "barred by the doctrine of laches" because than ten years after the years after issuance." 67. Defendants unreasonable [U.S.] [Plaintiff] Defs.' and Br. allege Plaintiff Patent issued, knew Supp. that filed or Mot. should for unquestionably J. "delay prejudiced action "more and more than ten have Summ. Plaintiff's this known at is 13, of the ECF No. manifestly Defendants." Id. Plaintiff disagrees, arguing that "Defendants' laches defense must be dismissed" because Plaintiff's delay in filing "the U.S. litigation because . . . was neither "Defendants have evidentiary [or economic] at 11, ECF No. A (1) unreasonable not, and nor inexcusable" cannot, prejudice." show PL's Suppl. and material Br. in Opp'n 104. defendant may invoke the laches "the plaintiff delayed filing suit inexcusable length of time from the defense for by proving an that unreasonable and time the plaintiff knew or reasonably should have known of its claim against the defendant" and (2) "the delay operated to the defendant." F.2d A.C. 1020, 1032 Aukerman (Fed. Co. Cir. v. prejudice R.L. 1992) Chaides (en whether to apply the laches defense, or injury of Constr. banc). In Co., the 960 determining the "court must look at all of the particular facts and circumstances of each case and weigh the equities of the parties." " [A] the delay omitted Id. [in filing suit] issuance of the patent will produce a rebuttable presumption of laches." 988 Cardiovascular F.2d 1157, Ching-Wu Chu, inventorship claim knew should Sys., Inc. 1163 (Fed. Cir. 699 F.3d 1331, under § claims accrues or creates a have v. 1993); 256, 1334 a Scimed (Fed. of of Life see also delay rebuttable known after the Advanced inventor of more than six years Sys., Inc., Pei-Herng Hor v. Cir. six presumption 2012) years of ("For after a laches." (citing Advanced Cardiovascular, v. Advanced 2008). of Med. Optics, 988 Inc., F.2d 532 F.3d at 1352, Serdarevic 1358 (Fed. Once the presumption of laches has attached, production" presumption shifts of laches for the delay or evidence that and 532 1038). rebut issue with plaintiff, offering to place the matters prejudice sufficient a the F.2d at to 1039. "evidence sufficient to raise raise If a the genuine is factors" prove "must affirmatively inexcusable delay and However, Computer 1992) if affirmative the in issue.'" 960 F.2d at unreasonable (2) Sys. plaintiff evidence of plaintiff introduces dispute fails a lack delay and prejudice 8 as to either "put to its proof on both Corp., (citing Aukerman, factual conduct." (1) unreasonable prejudice resulting Entry genuine [his] 960 "to of 972 F.2d come 'must F.2d at 1290, 1032, forward prejudice be and from that delay." cognizable excuse for its delay in filing suit, unreasonable excuse [evidentiary] is a of delay or prejudice," the defendant Cir. of delay reasonableness 960 v. an the or by offering genuinely that evidence Aukerman, Hemstreet show (quoting Aukerman, presumption rebut the plaintiff "bears the burden only of coming respecting and to Cir. the "burden "can reasonable' the 1359-60 who evidence the delay was F.3d at and inexcusable, forward the economic Serdarevic, To to 'by 'sufficient prejudice (Fed. 1163)); 1293 1037-38). with either a legally or the two facts of inferred.'" Hall v. Aqua Queen Mfg., Inc., (quoting Aukerman, 93 F.3d 1548, 1553-54 (Fed. Cir. 1996) 960 F.2d at 1038). Of course, prejudice, and "the establishment of the factors of undue delay whether by actual proof or by the presumption, does not mandate recognition of a laches defense in every case." Aukerman, 960 F.2d foundation for there evidence is inequitable prejudice, the to of an 1036. trial of issue In on laches must 79. factors the is be be defense made its March laches" because of which despite Id. summary "more It than a 2014 asserted Plaintiff, decade no to would the Where it delay undue make and Furthermore, judgment, "[i]f there must the burden of proof and all pertinent 1039. Order, the Court noted that have established a rebuttable presumption charged with the the did not later." is undisputed that Plaintiff lay Presumption of Laches 12, application at merely discretion. allocated, Id. patent's issuance in 2002, patent on correctly considered." "Defendants appear to until exercise other recognize A. U.S. court's factors no genuine issues of material fact, factors must of "Those the defense may be denied." decision [exist] the at later German than court the file suit in this Court Court's Plaintiff knowledge of Order at knew of ECF No. the United States February that 11, "the 12, 2001, witness when Sattler has applied for the patent that is in dispute here in the United States No. in his 67-9. own name However, inventorship does "laches clock did patent issued." Aukerman, patent in argue because not not inventor." a accrue start to Pei-Herng Defs.' until run 23, ECF for correction of patent issues," "claim - Hor, the at the 699 Exh. I earliest F.3d at at - the until 1335 the (citing 960 F.2d at 1032). The suit as this that issued Court on on August October 6, 31, 2002, and 2012. the presumption of laches Plaintiff Plaintiff should not filed does attach, not either because the period of delay was less he "claim against the defendant." had no Aukerman, United reason to know of 960 F.2d at 1032. States patent 2001, Plaintiff was make such Minerals and Thus, Chem. Corp., is issued on August 6, Defendants' No. 67. 6, Because 213 2002. assertion 2002. (quoting charged should have been aware, August later than duty to investigation 1998) Plaintiff Having known of the February 12, "'be diligent and as the circumstances Wanlass v. Gen. Elec. Co., 148 F.3d 1334, Cir. & no charged with the inquiry (Fed. Nor could he. application reasonably suggest.'" 1338 his than six years or because Defs.' that Potash F.2d with 153, the Moreover, Co. 155 of (10th knowledge Plaintiff Plaintiff Supp. filed 10 v. Cir. that the Int'l 1954)). patent Plaintiff does not dispute "clearly of the issuance of the Br. Am. Mot. suit was [U.S.] for Summ. in this aware, Patent" on J. at Court or 14, "more ECF than six years after of the [he] patent," knew or should have the Court presumption of laches" 988 F.2d at 1163. Plaintiff "can evidence to Aukerman, has attached. Accordingly, rebut show an reasonable.'" determines the that the "rebuttable the Court next considers whether of laches 'by for the delay or that Serdarevic, issuance Advanced Cardiovascular, presumption excuse known of the 532 F.3d at offering the delay was 1359-60 (quoting 960 F.2d at 1038). B. Reasonableness of Plaintiff's Delay Plaintiff that his "German delay patent." (3) three this which ended "[Plaintiff's] therefore Br. factual [his] Aukerman, conduct." was in September between each his argument reasonable: (1) 2013," July repeated warnings (2) and his "the September about U.S. 104. ECF No. the The of Plaintiff's reasons to presents Plaintiff raise a genuine supporting in Opp'n at 12, considers whether suit negotiations PL's Suppl. determine reasons filing settlement and Court in litigations parties' 2012," advances "sufficient evidence to issue respecting the reasonableness of 960 F.2d at 1039. 1. Other Litigation and Notice to Defendants Because issues, that the Plaintiff s Court "delaying reasonable considers the because first he and third reasons them together. U.S. action until was involved 11 in "two raise related Plaintiff alleges October German 2012" was litigations against Defendants, which Court of Human Rights' were (ECHR) not final until the European decision in September 2013"1 and because he "gave adequate and repeated notice" to Defendants of his intent to challenge Opp'n at 13-14, "other U.S. ECF No.104. litigation" "Plaintiff the failed bring a separate excuse to give action patent. Defendants does not PL's argue excuse Defendants notice in the United Suppl. Br. in that Plaintiff's his of delay his States." because intent Defs.' to Suppl. Reply Br. at 7, ECF No. 110. "A patent holder may avoid the consequences of what would otherwise be an unreasonable delay in filing suit by establishing that he or she was engaged in 'other litigation.'" Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., F.2d 870, 1991) Tractor "The 876-77 Pullers (Fed. Cir. Ass'n, 630 'other litigation' F.2d (citing Watkins v. 1155, 1162 (6th Cir. Nw. 94 4 Ohio 1980)). excuse normally applies when a patentee defers suit against an alleged infringer until the conclusion of another lawsuit. If the party is ultimately sued and had received proper notice, the time delay consumed by the original 1 Defendants assert that the "final judgment of the German court was entered in 2009," when the German Plaintiff's appeal, not in 2013 when "the Supreme Court rejected European Court of Human Rights ('ECHR') dismissed [Plaintiff's] petition." Defs.' Suppl. Br. Supp. Summ. J. at 20 n.ll, ECF No. 110. Defendants assert that "the ECHR action was a separate action, with different parties," id., "in which [Plaintiff] claims he was not given basic due process, in violation of his constitutional . . . human rights," Jan. 30, 2013 Petry Decl. fl 11, ECF No. 67-6. 12 proceeding may occurred." Id. excuse of a delay the be excused at in 877. to evaluating However, bringing proceedings in suit, the "[f]or other there must accused whether be infringer laches litigation adequate . . . to notice inform[ing] the alleged infringer of the patentee's intention to enforce its patent upon completion of that proceeding." Corp. v. Seaman Corp., 833 F.2d 1570, Although there is 1573 Id. (Fed. (citing Hottel Cir. 1987)). "no rigid requirement" that the patentee himself provide "notice of such litigation and of its intention to sue [the there is alleged prior infringer] contact upon [between its the conclusion," parties], equities may require appropriate notice." 1039; see also Hall, 93 court's conclusion that [other] litigation was contact [between the (quoting Aukerman, the actions whether the of is of required" F.2d at Aukerman, 1554 an intent where and there 1039)). "To had "district after been the "'prior infringer]'" establish whether the district court must look not only at but also alleged infringer was in likely to be sued." sue accused the patentee, at fact Vaupel 944 F.2d at 877. whether to overall 960 F.2d at (affirming the existing lawsuit." important notice at patentee 960 such notice was given, F.3d the "where [defendant] Id. at 878. 13 had reason evidence on notice However, to showing of an "[w]hat is believe it was a. The February 12, 2001 German Pleading Plaintiff to pursue pleading asserts that U.S. patent his submitted he "'expressly rights" to the German in reserved' the right February 12, 2001 a court, and contends that he "never indicated or implied that he was abandoning his interest PL's Suppl. in the U.S. patent." 104. Defendants reserved the right Plaintiff did patent" Defs.' Defendants assume argue to amend Plaintiff's "amend[] "to his that related to at 8, ECF No. 110. "it reasonable expressly law the German reserved." U.S. Thus, entirety, was being 2001 pleading to the German court stated issue, in according ECF No. Plaintiff's German counsel, translation: the Defendants change reserved." which for inventorship was merely pleadings," damages that February 12, "[a] German pleading include its addressed in the German litigation." The 2001 ECF No. Reply Br. Suppl. contend the that Br. in Opp'n at 15, Id. to 67-9 § 263 at ZPO 23 Georg Spross, is therefore (English transl.). proffers his preferred "An extension of claim according to § 263 ZPO Code of Spross Civil Decl. Even under have "reserved" only the Spross's Procedure] 1 6, ECF translation, right No. is therefore 71-1 however, "exten[d]" expressly (emphasis Plaintiff added). appears to claim, id. , not to pursue a separate inventorship claim in the United States. Accord & Matthias 14 his [of German Joachim Zekoll to to Reimann, Introduction to German allows Law a matter consent of (2d ed. 2005) in dispute to the added)). could 369 the conclude or finds Court that upon the court that Plaintiff's "expressly reserv[ing]" right no February to the § 263 ZPO approval" (emphasis reasonable factfinder 12, extend gave Defendants any "reason to believe sued" on that "be amended or modified with the defendant Thus, (indicating 2001 his pleading, German claim, [they were] likely to be Plaintiff's inventorship claim in the United States at conclusion of the German litigation. Vaupell, 944 F.2d at 878. b. The June 24, In warned support of Plaintiff's [Defendants] in inventorship of the U.S. 15, ECF No. 104, to Sattler on 2002 Letter argument 2001-2002 that that he he "repeatedly contested patent," PL's Suppl. the Br. in Opp'n at Plaintiff submits a letter sent by his counsel June 24, 2002, "shortly before the U.S. patent issued in August 2002," id^ at 14 (citing PL's Exh. 35, ECF No. 104-2). Plaintiff alleges that his letter - "highlighted in yellow" - was Id. In the "According letter to confirmations) parties - to the Sattler, records warning contained in the "clear and unambiguous." Plaintiff's available counsel to us stated, (documents, you have declared or had others declare to third especially application USA) public authorities - (e.g. patent that you allegedly are the sole inventor of the 15 patent in question." highlighted "advised conduct and we Sattler Exh. 35, ECF original). carefully in all legal No. and appropriate (emphasis counsel prosecute respects." [Plaintiff] The letter concluded, 104-2 Plaintiff's examine "reimburse [Plaintiff] Id. in will actions that "pay 2002." yellow that demanded and in PL's Id. for Counsel all compensation" your by damages" "July 5, "If you allow the deadline to pass, we will initiate appropriate legal action with no further notification." First, letter in Id. the no Court way action would be time of Second, the observes indicated that that Plaintiff's Plaintiff's Plaintiff the did Defendants "allow[ed] U.S. initiate the patent legal [July 5, had action 24, threatened initiated in the United States. letter, June Indeed, not in even 2002 legal at the issued. Germany, after 2002] deadline to pass." Id. According to an April 28, 2014 sworn declaration of Jans Petry, "[i]n December 2002, which was Germany, "not [Plaintiff] limited to filed a second German action," exploitations of the but included all activities in countries, protection was sought, 2014 Petry Decl. SI 7, damages," Mr. Petry related to products include the United patent where patent including the United States." ECF No. 110-5. asserts, sold in States." Id. 16 Apr. 28, "As part of his claim for Plaintiff all in other "requested countries, Thus, because information which would there is no genuine issue of material that "[t]he was, in legal fact, No. 110. action filed aggregated his fact U.S. on this point, threatened Plaintiff in June Plaintiff by by in Germany, in which claim." Defs.' "Having added claims litigation, Plaintiff excused delay his States." Suppl. for U.S. cannot now bringing in the Court agrees a Reply Br. damages claim separate at 2002 7, he ECF into the German that this action litigation in the United Id. Certainly, evidence had Plaintiff presented to the Court affirmative that, sometime action in December 2002, after initiating he had put his second German Defendants on notice of his continued intention to file a separate action regarding the U.S. patent after the conclusion of the German litigation, Court's analysis would likely be quite different. only evidence of any warning December 2002 is a "letter from July Defendants 02, 2012" "with was issue, reasonable in its litigation." 1990) a Defendants entirety, Defs.' Adelberq Labs., Cir. nearly 71-1 at 38. for Inc. Suppl. Defendants [from Plaintiff's] a claim according Petry Letter, ECF No. "it - to was decade to However, the subsequent to American attorneys later US-law." - threatening Aug. 31, 2012 Thus, the Court agrees that to being Reply Br. v. Miles, the Inc., assume the addressed at 921 8, inventorship in ECF No. F.2d 1267, the German 110. 1272 See (Fed. (observing that "an obligation exists on the part of 17 a patentee to communicate to an accused contacted and failed to sue because of was not June 24, United June in acquiescing 2002 States, 24, 2002 Plaintiff's in the letter and did because threaten the December 2002 Because any legal actually legal action initiated German the United States at inventorship claim. Therefore, Court could conclude that determines the June notice of "[Plaintiff's] [in the United it Plaintiff's in the threatened in the against Defendants there was no likely to be sued" the conclusion of the German litigation on Plaintiff's the has action litigation, reason for Defendants "to believe [they were] in it other litigation that infringement"). not letter was infringer whom States] 24, Vaupell, that no 2002 944 reasonable letter put intention to enforce upon F.2d at 878. factfinder Defendants on [the U.S.] patent completion of [the German] proceeding," id. at 877. 2. Settlement Negotiations Plaintiff also asserts that "the parties' settlement negotiations between July and September 2012" is a "reasonable and legally cognizable excuse[] October 2012." for delaying the action until PL's Suppl. Br. in Opp'n According to Plaintiff's February Plaintiff's contacted "U.S. counsel settle the dispute" in "July 2012." SI 47, ECF No. 71-1. 21, 2014 at 13, ECF No. 104. sworn declaration, Defendants in an attempt to Pl.s' Exh. 3, Lismont Decl. In the context of licensing negotiations, such negotiations progressing, the laches Formless that "continuous success," a 693 the "continuous and of chance See, F.2d in e.g., 697, A.C. 700 parties' success," Aukerman (7th Cir. settlement and bilaterally progressing, id., such negotiations, months be fair period. Co., arguendo such with must would make that a the tolling laches of the little difference to laches order Co. 1982). to v. toll Miller Assuming negotiations with period bilaterally a fair was chance tolled period were during for three the Court's analysis, the overall time between the issuance of the U.S. of as patent and the filing of Plaintiff's action in this Court amounts to nearly a decade. Accordingly, the Court failed to rebut the presumption concludes that of laches by Plaintiff has demonstrating a genuine dispute of material fact regarding the reasonableness of his delay. C. Material Prejudice to Defendants The Court next considers whether Plaintiff "can rebut the presumption of laches ... by offering evidence 'sufficient to place the matters of [evidentiary] prejudice genuinely in issue.'" prejudice and economic Serdarevic, 532 F.3d at 1359-60 (quoting Aukerman, 960 F.2d at 1038). 1. Evidentiary Prejudice Evidentiary prejudice "may arise by reason of a defendant's inability to present a full and fair defense on the merits due 19 to the loss of unreliability records, of memories undermining the court's 960 F.2d at the death of of witness, or past long a events, thereby ability to judge the 1033. Plaintiff asserts facts." that the Aukerman, "Defendants' allegation that they suffered evidentiary prejudice because five witnesses (Sattler, Sperling, unavailable is without 1, ECF No. Defendants' Plaintiff 104. support." However, burden to Cordemanns) Br. Court the rebuts Sohn, PL's Suppl. demonstrate successfully Serdarevic, Stohler, that notes in Opp'n at it evidentiary of is prejudice presumption the are not unless laches. See 532 F.3d at 1359 (finding "wrong as a matter of law" the argument "that a defendant cannot rely on the presumption alone, but Wanlass, must present affirmative evidence of prejudice"); 148 F.3d at 1338 (noting that although "appellants bore the burden of showing a lack of both evidentiary and economic prejudice, their brief speaks primarily of [defendant's] failure to offer proof"); the patentee affirmative Hall, 93 F.3d at 1554 (observing that "where fails to evidence of ... a com[e] lack of forward prejudice with or a either legally cognizable excuse for its delay in filing suit, the two facts of unreasonable Aukerman, failed to "remain[] delay 960 F.2d rebut and at the prejudice 1037)). 'must be Indeed, presumption of inferred'" (quoting where a plaintiff has laches, Defendants may utterly mute on the issue of prejudice and nonetheless 20 prevail[]" unless Plaintiff "come[s] demonstrating a lack of prejudice." forward Id. though the laches any evidence (emphasis in original). a. Loss of Key Witness Mr. Even with Sperling presumption relieves Defendants their burden to prove evidentiary prejudice, Defendants out they of an abundance evidentiary prejudice of caution, because that "[o]ne key witness of assert, will suffer is dead" and [o]ther witnesses can no longer recall key details regarding the timing of events process." Defs.' related to Suppl. the Reply development Br. at Plaintiff argues that the death of Mr. of 10, the ECF Sperling, patented No. 110. "the head of engineering at Binzel Germany from 1993 to 1999," id. at 11, "in no way presents any material prejudice to Defendants" because Mr. Sperling's "testimony was prejudicial to Defendants," PL's Suppl. Br. in Opp'n at 7-8, ECF No. 104. In support, Plaintiff submits a Confirmation signed by Mr. PL's Exh. 29, transcript of Sperling on May 17, Sperling Confirmation, Mr. Sperling's ECF No. testimony given 2002, 104-1 at 83, on February a 5, 2003, PL's Exh. 30, Feb. 5, 2003 Hr'g Tr., ECF No. 104-1 at 86, and a transcript of Mr. Sperling's testimony given on October 7, 2008, PL's Exh. 31, Oct. 7, 2008 Hr'g Tr., ECF No. 104-1 at 93. First, support of the Court observes his argument that Plaintiff's is not "demonstrating a lack of prejudice," Hall, 21 "evidence" in affirmative evidence 93 F.3d at 1554, but is rather German a mere summary litigation, with of the respect evidence to Mr. from Plaintiff's exhibits that Mr. the German obviously Defs.' litigation and, unavailable" Suppl. Sperling's Reply written litigation, on Br. 11, statement its he testify at face, Sperling. during It is the clear Sperling was a key witness in because to presented is in ECF and appear now the No. U.S. 110. testimony to deceased, is litigation. Although from favor "he the Mr. German Plaintiff, thus potentially supporting Plaintiff's argument that Defendants' may not be materially prejudiced by Mr. Sperling's unavailability, it is obvious from the German court's ruling that its doubts as to the reliability of Mr. in its ruling against Sperling's statements weighed heavily Plaintiff, see Defs.' Exh. C, German Opinion at 8, ECF No. 110-3 (finding that Sperling's statements were "not sufficiently reliable in order for it to be deemed proved that the Plaintiff communicated the idea essential to the invention to the Defendant in the manner explained above"). Plaintiff's evidence fails to show that Defendants would not be materially prejudiced by the inability to question Mr. Sperling before a factfinder in the United States, who can consider Mr. Sperling's statements and judge for itself the credibility and reliability of his statements. court was concerned to learn It also appears that the German that Plaintiff written statement signed by Mr. Sperling, 22 and had drafted the the Court agrees with Defendants Sperling," tactics that loss especially concerning disadvantage." The the Court the regarding the Defs.' of Plaintiff's Sperling statement" Suppl. Reply Br. question "questionable is a "material at 12. that " [c]onclusory statements that there are missing witnesses, that memories documentary have 1308 (Fed. Defendants Cir. have well-established lessened, evidence, evidentiary prejudice. the to rule witnesses' acknowledges "opportunity are not Meyers 1992) . and there sufficient" v. Asics However, clearly that to Corp., this is demonstrated missing establish 974 F.2d 1304, not that is such they a case. would be materially prejudiced by having to proceed in this litigation without further examination of Mr. Sperling, and Plaintiff has failed to produce affirmative evidence demonstrating otherwise. Accordingly, the Court finds that (1) Defendants are presumed to have suffered evidentiary prejudice, demonstrate without the a lack of (2) evidentiary presumption, Plaintiff has failed to prejudice, Defendants have, in and fact, (3) even suffered evidentiary prejudice.2 2. Economic Prejudice Economic prejudice others 2 will suffer Because the Plaintiff arises when "a defendant loss of fails monetary to produce and possibly investments affirmative or incur evidence demonstrating a lack of evidentiary prejudice resulting from the death of Mr. Sperling, the Court need not conduct a full analysis of the parties' additional arguments regarding evidentiary prejudice. 23 damages which likely would have been prevented by earlier suit." Aukerman, 960 F.2d at 1033. economic prejudice exists, In order to determine whether "courts must look for a change in the economic position of the alleged infringer during the period of delay." Id. advanced Plaintiff several acknowledges reasons that they that have Defendants suffered prejudice due to Plaintiff's delay in filing suit. Br. in Opp'n Defendants' at 23, ECF alleged No. 104. activities However, occurred have economic PL's Suppl. because after "all of [Plaintiff] repeatedly warned Sattler and Binzel Germany in 2001-2002 that he would take legal action to protect his U.S. Plaintiff contends that Defendants' material economic prejudice." that "Plaintiff has Id. patent rights," activities "cannot be Defendants disagree, arguing offered no evidence regarding the lack of economic prejudice to Defendants," and, "[e]ven were the burden of persuasion still on Defendants, it is clear that there is sufficient evidence of economic prejudice." Br. at 15, ECF No. 110. Specifically, Defs.' Suppl. Reply Defendants argue that they will suffer economic prejudice because they "have continued to invest in and expand the infringing product line throughout the period of delay" and, "[m]ore significantly," they "also refrained from pursuing non-infringing alternatives." 24 have Id. a. Investments and Expansion Even burden the though to Defendants the prove easily declaration, laches presumption economic prejudice, demonstrate John Kaylor, relieves such the "the current German its opinions finds In President 2009," states that, issued Court prejudice. . . . since December 1, court Defendants of a that sworn [Binzel-US] since 2008, in of when the Defendants' favor, " [i]ncreasing sales of the contact tips in question" has been "a strategic focus of Binzel-US." ECF No. 110-10. to expend Kaylor asserts that "Binzel-US marketing and sales resources drilled contact tips," and, consequently, manufactured by using the patented reach [ed] a record high in 2013." v. GMFanuc Robotics Corp., (observing that of capital Kaylor Decl. 1 3, Defs.' Exh. J, long as "there may has been a promote deep-drilling Id^ M sales the deep- technology 3-4; see ABB Robotics 1065 [without constitute continued sales "of contact tips 52 F.3d 1062, "increasing investments] to [has] (Fed. Cir. additional 1995) evidence economic prejudice," 'change in the as economic position of the alleged infringer during the period of delay'"). Plaintiff that produces Defendants [regarding did marketing delay." Aukerman, attempts to point no not and affirmative "change sales 25 [their] efforts] 960 F.2d at 1033. out weaknesses evidence demonstrating economic during Rather, the position period of Plaintiff merely in Defendants' allegations of economic prejudice. No. 104 See PL's Suppl. (asserting that "there is no Br. in Opp'n at 26-27, ECF indication of prejudice in the sales data that is presently available," that "erratic sales do not support "[t]here result is of delay"). a finding no evidence either the of that German economic these prejudice," sales litigations levels or changed U.S. that as a litigation However, as discussed above, because Defendants enjoy a presumption of laches, Plaintiff must do more than merely dispute Defendants' evidence of prejudice. 1554 a and ("[T]he defendant could have See Hall, 93 F.3d at remained utterly mute on the issue of prejudice and nonetheless prevailed.").3 Binzel Germany also asserts that, "since the German court's ruling Euros in 2008, in tooling forming process," . . . [it has] and invested approximately 30,000 prototype contact which Defendants allege tips "is using the cold covered by the deep-drilling method," and that it would not have done so "if it knew that the U.S. patent was going to be disputed." 24, Responses to Plaintiff's Interrogatory Nos. No. 104-1. See Adelberg Labs., 921 F.2d at 1272 PL's Exh. 9-11 at 6, ECF (observing that "[m]aking heavy capital investment and increasing production can constitute prejudice" when it is a result of plaintiff's delay). 3 Plaintiff alleges that "Defendants refused to produce complete copies of their strategic, budget, sales and marketing plans." PL's Suppl. Br. in Opp'n at 26, ECF No. 104. Curiously, however, Plaintiff never filed a discovery motion with the Court deficiencies in Defendants' submissions. 26 addressing any alleged Again, Plaintiff produces no affirmative evidence demonstrating either that not process or prejudice. Defendants that the Instead, investment in percentage "of the did investment Plaintiff cold [Defendants'] "Defendants could heeded [Plaintiff], who technology was However, than id. , does told render No. 2:07-CV-563, 3, process saved may have been demonstrate economic that Defendants' represented this Defendants more money . . . expensive patented if that than small in any they this the had cold patented the cold drilling technology," form process commercially 104 (citing PACT XPP Techs, v. Xilinx, 2013 U.S. 2013) See PL's Suppl. Br. Dist. LEXIS 125209, at **33-34 ("finding no economic prejudice where non-infringing alternative Nor does the fact that Defendants' small, in "expenditures "change expenditures, 960 F.2d the not other position . . . during the period of delay," Aukerman, or that did to economic 1033, Defendants comparison investment [their] at that a deep no evidence of a commercially viable was provided")). in PL's Suppl. Br. in Opp'n at 26, ECF the ECF No. (E.D. Tex. Sept. forming asserts unviable, as Plaintiff appears to suggest. Inc., cold the fact that the cold forming process may be expensive in Opp'n at 26, the result not merely have much "more not in total R&D expenditures" and, deep drilling technology." No. 104. did forming event, forming invest ha[d] no explicitly proven nexus to the [plaintiff's] delay in filing suit," Hemstreet, 972 27 F.2d at 1294. Accordingly, because Plaintiff fails to produce affirmative evidence demonstrating a lack of economic prejudice to Defendants, Aqua Queen (quoting Chisum, such Mfg., prejudice Inc., Aukerman, Chisum on 93 960 "'must F.3d F.2d Patents be 1548, at § 19.05 inferred.'" 1553-54 1038); (Fed. accord Hall Cir. 6A (Matthew Bender) v. 1996) Donald S. (noting that "there seem to be few cases indeed in which a lengthy period of unexcused delay escaped a laches finding because of proof of want of injury"). b. Election not to Pursue Non-Infringing Activities Defendants also assert that they "elected not to pursue non-infringing alternatives based on the fact that they thought the [inventorship] claim had been Reply Br. at 17, ECF No. 110. Schubert, resolved." Defs.' Suppl. In a sworn declaration, Dr. Emil "the current Managing Director of [Binzel-Germany] ," stated that "[t]here are a number of non-infringing alternatives to producing contact tips through a deep-drilling method," and "during the course of the German looked at several alternatives 5, ECF No. 110-11. Binzel-Germany to produce the contact tips not using the deep-drilling method." SI SI 3, litigation, Defs.' Dr. Exh. Schubert K, Schubert Decl. alleges that, had Plaintiff filed an action in the United States during the German litigation, or shortly thereafter," continued to pursue Binzel-Germany "would have these other technologies and expended time 28 and resources However, going to "because to file an Binzel-Germany manufactured Dr. in the gave independent "continued the asserts [its] associated [Plaintiff] using Schubert invest reduce no in the develop deep-drilling that he the was States," Id. "also for SI 11. contact method." capacity that United the Binzel-Germany production Id. indication action to costs." tips SISl 11-12. continued patented to deep- drilled contact tips" and "paid Mr. Sattler royalties," both of which Binzel-Germany could have avoided had his action in the United States earlier." Id. Plaintiff "brought SISI 14-15. Plaintiff again fails to produce any affirmative evidence contradicting Rather, Defendants' allegation of economic Plaintiff merely alleges that Defendants' comments prejudice. "speculative that Defendants may have changed their business plans to increase sales of all patented and non-patented contact tips, changed the price points of all contact tips, and/or changed the royalty payments to Sattler . . . are Suppl. Br. in Opp'n at 28, ECF No. 104. baldly asserts that "[e]very company nonsensical." Furthermore, Plaintiff in the world increase its sales and maximize its price points." event, Plaintiff "show[ing] that fails [none] to of differently had [plaintiff] 1308; see also Lautzenhiser produce the 29 Id. would sued earlier," Meyers, LLC tries affirmative defendants Techs., PL's v. In any evidence have 974 Sunrise to acted F.2d at Med. HHG, Inc. , 752 F. plaintiff's Supp. 2d argument 988, that 1004 defendants' garden-variety ventures in the that no conduct evidence had suggests [plaintiff] that defendants believing that the had Defendants suit of 2010) would where had have earlier," to delay in filing were mere an director our products and, if they to infringe were action where their dropped" been [they] altered alleged over To the contrary, the U.S. patent especially after the German court had ruled in Defendants' on the and develop . . . [they] would have done a design-round") . Plaintiff's (rejecting "expenditures "continued allegations "clarification Ind. ordinary course of business, filed testified (S.D. inventorship issue - resulted in Defendants' - favor confidence in promoting the patented invention and foregoing opportunities to pursue Prods., trial Inc., 839 court's allegedly the alternatives. the 1120, "reliance upon 1554 (Fed. company testified by Am. rather Home Prods. (6th Cir. [plaintiff's] v. Cir. Litton 1988) that, had have upon the company, [plaintiff], than Corp. 1973) make v. he 30 "known would continued Lockwood Mfg. (holding silence and, (affirming he that . . . deprived of the opportunity to consider the effect which this might Indus. prejudice where president infringement of 1124 1544, of material corporation investments"); F.2d finding infringing allegation sold F.2d See Jamesbury Corp. unaware of of of have capital Co., 483 defendant's [defendant] litigation any claim against the company, of the built company Accordingly, have the economic any economic using contested the Court finds that suffered produce up the business by expanding the operations prejudice, affirmative prejudice, Defendants have, in fact, (3) and Plaintiff has demonstrating even process"). Defendants are presumed to (2) evidence and D. (1) product without failed lack a the to of presumption, suffered economic prejudice. Evidence of Other Factors Although Plaintiff has failed to "rebut the presumption of laches 'by offering evidence to show an excuse for the delay or that the delay was reasonable,'" Serdarevic, 532 F.3d at 1359-60 (quoting Aukerman, "must weigh decision all on the For example, patentee 960 F.2d at pertinent laches 1038), facts defense," and the Court equities Aukerman, 960 nonetheless in making F.2d at 1034. "[e]ven if unable to overcome the presumption, may be able to preclude application of a the a laches defense with proof that the accused infringer was itself guilty of misdeeds towards the patentee." Court next considers whether there Id. is at 1038. any "evidence Thus, of the other factors which would make it inequitable to recognize the defense despite undue delay and prejudice." Plaintiff makes no Id. at 1036. allegation that Defendants have committed any "misdeeds" that would preclude the "application of the laches defense." Id. at 1038. 31 However, Plaintiff asserts that it is generally "sequenc[e] multiple "conserve resources, "reasonable" litigations" in 13, of ECF No. this 104. action unreasonable plaintiff with corporations, Suppl. Br. Opp'n at Thus, after nor the limited can a vs. is The Goliath" 104; in Opp'n was "an pursuing unlimited ECF No. 71. he Br. that his "filing litigations because No. "David PL's Suppl. resources" in Opp'n at 1, Plaintiff's plaintiff German comparatively ECF that Plaintiff contends inexcusable" with 2, to test the legal basis in a first litigation, and attempt to settle the dispute." at litigation so - patent neither individual "multi-national PL's resources." see also PL's Br. Court declines implications, to in consider however, because the Court seriously questions Plaintiff's underlying rationale. Indeed, as appropriate Defendants in observe, infringement such actions rationale where is "it often would be burdensome for a party to have to pursue multiple suits at once, nor would there be any practical way to consolidate regarding patents in different countries." Defs.' Br. however, at ultimate U.S. 6, issue patents, witnesses, with ECF No. 110. In of inventorship the "parties" and Defendants evidence that are this case, is the are the same same, identical," "allowing id. , Plaintiff litigation" actually serves to counteract 32 for the to Suppl. the and actions Reply where the German and the "proofs, Court sequence agrees this Plaintiff's asserted rationale because sequencing the litigation "forc[es] parties litigate exactly the same case and to twice tak[es] the judicial resources of two courts instead of one," id. the Court favors finds that Defendants Plaintiff's and the sequencing Court finds argument no the up Thus, actually other factors precluding the application of the laches defense. IV. For the judgment foregoing is GRANTED, suit against U.S. patent Plaintiff has affirmative reasons, as Defendants creates CONCLUSION a Plaintiff's rebuttable rebut of a by lack motion ten-year for correction failed to evidence Defendants' of of delay filing inventorship in the of laches, forward with prejudice or which either a legally Hall, cognizable excuse for its delay in filing suit." at summary in presumption "com[ing] for 93 F.3d 1553-54. The Clerk is REQUESTED Order to all IT IS SO counsel of to send a copy of this Opinion and record. ORDERED. /s Mark UNITED Norfolk, Virginia August dJQ , 2014 33 STATES S. Davis DISTRICT JUDGE
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