Samsung Electronics Co., Ltd. et al v. NVIDIA Corporation et al, No. 3:2014cv00757 - Document 602 (E.D. Va. 2015)

Court Description: MEMORANDUM OPINION. Signed by District Judge Robert E. Payne on 12/16/2015. Memorandum Opinion electronically sent to all counsel of record. (sbea, )

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Samsung Electronics Co., Ltd. et al v. NVIDIA Corporation et al Doc. 602 I IN THE FOR THE UNITED STATES DISTRICT L COURT EASTERN DISTRICT OF VIRGINIA DEC I 6 Richmond Division L . CLERK. U.S. DISTRICT COUHl RICHt.iOND. VA SAMSUNG ELECTRONICS CO., et al. , LTD, Plaintiffs, Civil Action V. No. 3:14cv757 NVIDIA CORPORATION, et al., Defendants. MEMORANDUM OPINION This MOTION matter FOR is PARTIAL before SUMMARY reasons set forth below, the Court JUDGMENT on Defendant (Docket No. NVIDIA's 294). For the the motion will be granted in part and denied in part. I. Samsung America, Electronics Inc. Corporation, Co., ("Samsung") Old Velocity Holdings, Micro, complete and Ltd. filed Inc. the partial summary judgment, this Samsung case Velocity Electronics against Micro, NVIDIA Inc. and alleging violation of several (Compl., parties and f/k/a LLC ("NVIDIA") claims of several patents. now BACKGROUND Docket No. have filed 1). Discovery is cross-motions for although Samsung subsequently withdrew its motion for partial summary judgment. Dockets.Justia.com The FOR papers PARTIAL MEMORANDUM JUDGMENT REPLY SUMMARY OF TO Nos. IN LAW (Docket OPPOSITION (Docket relevant IN to JUDGMENT SUPPORT Nos. 295 and SUPPORT OF THEIR 307) ITS (Pl.'s MOTION alleges DEFENDANTS' No. 294), MOTION FOR FOR FOR PARTIAL PARTIAL and SUMMARY SAMSUNG'S SUMMARY 0pp.), MOTION DEFENDANTS' PSJ Mem.), PARTIAL PSJ JUDGMENT DEFENDANTS' SUMMARY JUDGMENT (Def.'s PSJ Reply).^ II. NVIDIA are (Def.'s MOTION 429) (Docket Nos. 440 and 443) motion (Docket OF and DEFENDANTS' 367 this that ISSUES it is entitled to partial summary judgment on three grounds: (1) In inter partes proceedings against the Patent Trial and Appeal that, Board in Samsung ("PTAB"), NVIDIA's has judicially taken estopped Samsung view, in from such asserting a NVIDIA further contends assert that estoppel, that, position then the case, here. judicial several contradict this contrary made the lack of written description. ^602 in statements positions that that Samsung contrary is position if Samsung cannot this patent case is due to invalid for (Def.'s PSJ Mem. 3-11); ' These docket numbers reflect the unsealed and sealed versions of the papers. 2 (2) Samsung is not entitled to pre-suit damages or was importing protected from infringing pre-suit provision of 35 U.S.C. 21); The '902 products, damages § under 287(b)(1). and the patent is cannot predated prior art. (Def.'s PSJ Mem. Samsung's responses state, (A) Samsung's inconsistent tribunal, (B) safe thus harbor (Def.'s PSJ Mem. 11- that '602 patent do conception need not and before There and diligent not evince the PTAB are intent to deceive judicial estoppel the use disclose of estopped memory every not a is in applicable. data from arguing buffers, embodiment, not invalid for lack of written description. 0pp. art, '902 patent to antedate that even if Samsung is covers prior 21-29). statements and certain in brief, that: such that Moreover, by establish reduction to practice of the (2) is and Samsung (1) *902 '675 patents because NVIDIA lacked actual notice that NVIDIA (3) for the and is the thus (Pl.'s PSJ 1-10); is NVIDIA's precludes a genuine control summary suit damages. over dispute its of material overseas judgment on the fact manufacturer about which availability of pre- (Pl.'s PSJ 0pp. 11-22); and (3) There is a genuine Samsung's diligence precludes summary dispute prior art. material reduction judgment on about practice to fact which antedating the asserted {Pl.'s PSJ 0pp. 22-30). III. The in of LEGAL STANDARD standard principles FOR SUMMARY for JUDGMENT resolving motions for summary judgment govern the analysis made here. Pursuant to Federal Rule of Civil Procedure 56, move for summary judgment, the case contains a party may and the Court must ascertain whether sufficient evidence from which a jury could reasonably find for the nonmoving party. See Anderson v. Liberty Lobby, 202 Inc.. 477 (1986). In genuine dispute unsupported a Va. trier and 368 the 106 S. Court fact defenses Ins. Ct. must of fact to exists to Co., find 744 is for F. justifiable inferences L. to Supp. Ed. 2d whether a factually trial. 2d 543, See 545 whole could not lead the non-moving appropriate." U.S. party, v. Lee. 1991). In reviewing a summary judgment motion, all 91 prevent from proceeding judgment (4th Cir. 2505, determine If "the record taken as a disposition by summary 943 F.2d 366, 248, of material Auto-Owners 2010). rational 242, essence, claims Hostettler v. (E.D. U.S. in favor of the a court "must draw nonmoving party." United States (4th Cir. mere v. 1992) scintilla Anderson, U.S. (14 of evidence 477 U.S. preliminary no Transformer (citing Anderson, Wall.) literally Carolina at 251 442, 448, question not U.S. 978 at preclude F.2d 255). 20 L.Ed. but the 867 (1872)). judge, whether not there 832, v. " Munson, 81 U.S. IV. A. the onus of proof is any upon Id. there is which a . . . (quoting Munson, at 448) . JUDICIAL ESTOPPEL AND LACK OF WRITTEN DESCRIPTION ('602) Judicial Estoppel The law of the judicial estoppel. 303 imposed.'" 81 MTjhere is a jury could properly proceed to find a verdict for the party upon whom a judgment. whether is 835 However, summary (citing Improvement Co. for evidence, will 477 Co./ F.3d 1294, regional circuit Minnesota Min. 1302-03 (Fed. governs & Mfq. Cir. 2002). Co. As the v. analysis Chemque, [jJudicial estoppel is a principle developed party from talcing a position in a judicial proceeding that is inconsistent with a stance previously taken in court .... Three elements must be satisfied Inc., explained by the Fourth Circuit: to prevent a of before judicial estoppel will be applied. First, the party sought to be estopped must be seeking to adopt a position that is inconsistent with a stance taken in prior litigation . . . . The position at issue must be one of fact as opposed to one of law or legal theory .... Second, the prior inconsistent position must have been accepted by the court . . . . Lastly, the party against whom judicial estoppel is to be applied must have intentionally misled the court to gain unfair advantage .... This bad faith requirement is the determinative factor. Zinkand v. Brown, 478 quotations omitted); 231, 241-42, Univ., 133 record S. 638 (4th see also Whitten v. Ct. 2434, suggests Additionally, in 634, L.Ed. any 2d Cir. 565 (2013) on "ta]s an equitable doctrine, the discretion of the (internal Inc., by Vance faith bad 2007) Fred's, abrogated on other grounds .... invoked F.3d v. 601 Ball ("Nothing Whitten's F.3d State in the part"). judicial estoppel is district court and with the recognition that each application must be decided upon its own specific facts Memorial Hosp., Whitten, and circumstances." 159 F.3d 192, King 197 (4th Herbert Cir. J. 1998); Thomas see also 601 F.3d at 242. NVIDIA's argument, briefly stated, (1) v. In this proceeding, covers use of is that: Samsung stated that the "data strobe buffers" when *602 patent those data strobe buffers are part of memory controllers; (2) In a PTAB proceeding, Samsung stated that the *602 patent does not controllers; disclose the data strobe PTAB relied on this buffers in memory statement making a decision in an inter partes decision; and (3) Samsung should be judicially estopped from asserting that the ^602 patent covers use of data strobe buffers when those data strobe buffers are part of memory controllers. {Def.'s PSJ Mem. 3). Samsung takes issue with all three factual contentions, argues that any of the as a matter three of elements law NVIDIA has required for not judicial and adequately pled estoppel under Fourth Circuit precedent. 1. On April NVIDIA filed another Samsung's Assertedly Inconsistent Statements 30, a Samsung 2015 (after Samsung request patent for ("the inter ^734 initiated this partes patent"), W34 patent was obvious in light of the Mem, 4; Pl.'s PSJ 0pp. 2). review lawsuit), ("IPR") alleging '602 patent. NVIDIA states that, that of the (Def.'s PSJ as part of the IPR, Samsung argued that not render] obvious patent because the the '602 patent [does any claim of the '734 '602 patent "does not disclose a data strobe buffer for controller" .... Rather, Samsung a memory asserted that the '602 patent is "directed at a data strobe buffer for use in a memory device." (Def.'s PSJ Mem. 4-5) that, in this case, '602 patent (emphasis in memorandum). NVIDIA contends Samsung argues a contrary position that the discloses embodiments that may be used in both memory devices and in a memory controller. {Def.'s PSJ Mem. 5, 8) . Samsung does not believe between its two positions. Samsung points out the in of context found Mem. that particular of memory in '602 and type data is any Samsung's contradiction of did not I PR only covered a whereas the controller, '602 of patent type 2 - 8 ) I n this case, particular that a context, '602 type of data strobe buffers, use there In its statement of additional facts, that, actually stated that that data such render argument particular ^734 patent covered the strobe that buffers in the had claims not obvious. (Pl.'s PSJ '734 '734 Samsung is arguing that any use of the strobe particular type of data buffer infringes strobe buffer is '602, whether used alone, used ^ Samsung characterizes its position in simple terms as: By way of simple analogy, if hypothetical Patent 1 generally discloses a bicycle, but not tassels. Patent 1 would not anticipate or render obvious the claims of Patent 2, which specifically claims a bicycle with tassels .... The asserted '602 Patent claims recite only a data strobe buffer (a bicycle) . The fact that Samsung may have argued that the '602 Patent does not disclose a data strobe buffer in a memory controller (a bicycle with tassels), does not preclude the claims, which require only a data strobe buffer (a bicycle) from being infringed by a data strobe buffer that happens to be in a memory controller {a bicycle that happens to have tassels." (Pl.'s PSJ Mem. 7). Samsung argues that before PTAB, it argued that Patent 1 does not render Patent 2 obvious, and in this case, it is arguing that infringement of Patent 1 plus some additional feature infringes Patent 1. (Pl.'s PSJ Mem. 7-8). 8 in the context of a memory controller, or used in any other context. Stated somewhat simply, • The ^602 patent claims plain (X) • Samsung's position is that: or (X)+Z or (X). Any use of (X)+A, Samsung claimed that the render obvious, the '734 claimed because, (X)+Z. whether i t be is infringement; In the IPR, ^734 (X), '602 patent did not while the *602 claimed The addition of Z makes (X), '734 non- obvious in light of '602; • Samsung accuses NVIDIA of way of (X)+Z, the way; • infringing its '602 which necessarily involves using does not teach during protect (X) along and The fact that Samsung stated that "'602 teaches '602" patent by (X) (X)+Z, the when IPR (X) (X). ''602 so *734 is not obvious in light of does not mean that *602 is used in the context of does {X)-fZ: not it just means that (X)+Z is not obvious in light of (X) ^ As a rule, "[t]hat which infringes, if later, would anticipate, if earlier." Peters v. Active Mfq. Co., 129 U.S. 530, 537, 9 S. Ct. 389, 392, 32 L. Ed. 738 (1889). However, there is not enough information in NVIDIA or Samsung's briefing to tell whether NVIDIA is infringing '602 in exactly the same way that '734 was anticipated (or made obvious) by *602. In its Reply, NVIDIA argues that Samsung argued the difference between *602 and *734 was "fundamental," and that Samsung is now arguing that the difference between *602 and 9 Thus, from the statements not undisputed before appear the PTAB contradictory facts and or its on the record, statements inconsistent. in This Samsung's this case means that first requirement of judicial estoppel is not met. E.g., V. ("Since Braswell Servs. Grp., Inc., 134 positions are not inconsistent, 2. F.3d 219, 224 to that the satisfy PTAB for the second accepted does not argues, of judicial estoppel: assertedly inconsistent position. the to institute that essentially, PTAB did ''602 not the IPR '734 patent]." that teach memory controllers '734's patent on NVIDIA would PTAB "adopted Samsung's position as its sole declining Samsung these requirement [regarding obviousness of the 9). Sedlack Whether The PTAB "Accepted" Samsung's Position NVIDIA argues that basis the judicial estoppel cannot apply.) Even if Samsung's arguments were inconsistent, have do the (such requested its decision PTAB that on NVIDIA {Def.'s PSJ Mem. 6, accepted it does plus memory controllers base by "'602 not make obvious')," but NVIDIA's erroneous misrepresentation that "'602 is never infringed when used in the context of a memory controller." (Pl.'s PSJ 0pp. 3). NVIDIA's process is "trivial." (Def.'s PSJ Reply 1). However, because NVIDIA does not argue that NVIDIA's process is identical to '734, it is not inconsistent for Samsung to argue that "the difference between '734 and '602 is fundamental, but difference between NVIDIA's process and '602 is trivial." 10 the Because Samsung's statements before the PTAB and this Court were not inconsistent, an inconsistent statements statement. are NVIDIA Moreover, inconsistent, description of the event, the PTAB cannot possibly have relied upon PTAB has decision not if Samsung's that Samsung's the correct one. In either it is even appears demonstrated the second element of judicial estoppel. 3. Whether NVIDIA Has Established That Samsung Acted With Bad Faith Or Intent To Mislead This Court Even if NVIDIA positions before estoppel is had the established on which applicable not PTAB here that Samsung the PTAB because took relied, NVIDIA established the third element of judicial estoppel: intent contrary judicial has not bad faith or to mislead. NVIDIA emphasizes that it "repeatedly notified Samsung that [Samsung] had taken Samsung's receipt inconsistent of this notice factual proves positions," that bad faith or with intent to mislead this Court. 5, 9-10). However, Samsung and that acted in (Def.'s PSJ Mem. NVIDIA has established at most that Samsung knowingly took contradictory positions, not that Samsung acted with intent to mislead the Court or with bad faith.'' NVIDIA also ^ Additionally, Samsung points out that parties "frequently raise different arguments in district 11 courts than they do in PTAB dropped the briefing. At "intent to mislead" argument from its reply (Def.'s PSJ Reply 1-4). the hearing on this motion, NVIDIA's counsel that NVIDIA had no evidence of subjective bad faith, that bad faith could be contradiction. (Tr. inferred from Samsung's Dec. 1, 2015 Hr'g conceded but stated act of 7:13-9:21). knowing The Fourth Circuit sometimes permits an inference of bad faith or intent to mislead the court where a party continues contradictory positions which to "indicate that assert [party's] was deliberately and not inadvertently taken." King, 197-98; see Comm'n, 2013) No. also, e.g., 4:12cv46, (noting that Vanderheyden 2013 WL 30065, judicial v. estoppel is (E.D. position 159 F.3d at Peninsula at *12 factually VA. Airport Jan. 2., commonly used when a debtor knows that he has a legal claim, fails to comply with the statutory duty to disclose that attempts to sue on the courts infer bad faith, basis claim in bankruptcy, of however, that claim) . In and then cases where the inconsistent positions tend to be stark and factually obvious: a person is able to do a job or is not able to do a job; a person knows of a legal claim or does not inferred know of because a legal the claim. different In such factual cases, bad positions faith is are so proceedings because the PTAB and district courts" have different standards and purposes. (Pl.'s PSJ 0pp. 8-9). 12 obviously contradictory that the party could only be asserting them intending to mislead the court. Such an inference is not appropriate in this Samsung's positions are not clearly inconsistent. even if Samsung's positions were inconsistent, case because In this case, they were not so inconsistent that a reasonable person could not believe that the positions were legally consistent.® In other words, Samsung could plausibly and reasonably taken the positions the PTAB and has not Court this Court adequately under the in good proven Fourth bad faith. faith Circuit's or rules On in question before this intent for record, to NVIDIA mislead judicial the estoppel, even if Samsung's positions are factually inconsistent. 4. Conclusion on Judicial Estoppel For the reasons stated above, the Court finds that NVIDIA has not carried its burden to show judicial estoppel. The Court, exercising its discretion to grant equitable relief, declines to apply judicial estoppel there. ^ The Court's own conclusion, supra, that the positions were not legally inconsistent is prima facie evidence that minds could, without bad faith or intend to mislead, that Samsung's positions were legally consistent. 13 reasonable conclude B. Whether The ^602 Patent Is Invalid For Lack Of Written Description NVIDIA argues that, from asserting a if judicial estoppel position contrary to "the disclose use of the '602 technology memory controller," then the written description, buffers in devices) any '602 patent does not (a data strobe buffer) the claims (use of data including memory devices would exceed the scope of the written description Mem. 10) . established, Because Samsung's inability not invalidate the patent if judicial does memory written estoppel not those used memory controllers. estoppel has (Def.'s not been talce of does to make a not position would how memory not buffers (Def.'s PSJ Mem. in 11). 14 to argues how the to the carry that out out and then context of in a the the the carry that '602 buffers, buffers This argument buffer that strobe NVIDIA teach asserting strobe contend teach Instead, from data used to make memory strobe strobe that Samsung use not does to lack of written description even does claimed. description method/process the NVIDIA description method/process for foreclosed disclose controller." method/process written judicial (data this argument need not be addressed. Moreover, "'602 strobe or controller strobe buffers only in the context of memory devices). PSJ in a '602 patent is invalid for lack of because context, forecloses Samsung '602 the use memory is irrelevant. The written description describes a process for making memory strobe buffers, and the claims claim a method for making memory strobe buffers. Samsung did not need to claim every possible use for those memory strobe buffers in the written description. Samsung correctly identifies the rule that: although the specification often describes very specific embodiments of the invention, [the Federal Circuit has] repeatedly warned against confining the claims to those embodiments .... In particular, [the Federal Circuit has] expressly rejected the contention that if a patent describes only a single embodiment, the claims of the patent must be construed as being limited to that embodiment. Phillips V. AWH Corp., 415 F.3d 1303, 1323 {Fed. Cir. 2005). ® So long as the written description enables a person skill in the art to practice all the claims, does not run specifications, art would claims. to the ordinary so long as a claim purposes stated in the and so long as persons of ordinary skill in the not representations description counter of confine depicted should not the in claim the impose terms to environments, additional the the limitations exact written on the Id. ®NVIDIA mischaracterizes Samsung's source of law, characterizing Samsung as relying on the Manual of Patent Examining Procedure. {Def.'s PSJ Reply 5). Samsung does cite the manual, but its argument ultimately rests on Phillips, which applies here. 15 LizardTech, 1336, the 1345 (Fed. contrary. description broader at only one ^maintain Earth Resources Mapping, 2005), on which LizardTech, taught 1344 v. Cir. In process F.3d Inc. issue but recited ("The method updated in one problem for is because NVIDIA not it sums' does lacks not enable the of of the argue a DWT ^602 that the 424 is the did not claims. F.3d not teach the LizardTech, DWT, 424 provides which coefficients. to written specification seamless That is is to the Yet claim 21 is broader than claim ^maintain that the that creating procedure recited by claim 1. 1 relies, was specific process, one the NVIDIA Inc., updated Samsung's claims at sums' written issue, limitation."). description so does LizardTech is inapplicable. Analogizing to Phillips, Samsung has a patent for making a lightbulb, with adequate claims and written description. said NVIDIA that sticking the infringes lightbulb in by making the lightbulb, and a flashlight. Samsung's lightbulb patent would not be inadequate for failure to mention "and It is for the then lack of written description lightbulb may be placed in a flashlight." Thus, even assuming that judicial estoppel should apply, the ^602 patent is not invalid for lack of written description. 16 V. A. PRE-SUIT DAMAGES '675) Direct and Contributory Infringement NVIDIA originally challenged damages under 35 § 271(g) (importation 14-15) . 271(c) U.S.C. U.S.C. After Judgment, damages Reply ('902 AND § 271(b) (contributory of NVIDIA a the availability of (induced infringement), infringement), and product-by-process). filed its Motion pre-trial 35 U.S.C. (Def.'s for 35 § PSJ Mem. Partial Summary Samsung amended its damages report to remove pre-suit for 10) . any violations of § 271(b) In in its memorandum or § 271(c). opposition to (Def.'s this PSJ motion, Samsung confirmed that it does not seek damages for induced or contributory infringement. (Pl.'s PSJ Br. 21-22), Hence, that aspect of NVIDIA's motion for partial summary judgment will be granted. B. Infringement By Importation Samsung has not, however, yielded on the issue of pre-trial damages for importation of the product-by-process. NVIDIA argues that provision of 35 U.S.C. it is § 287(b), from seelcing pre-trial damages infringing entitled product-by-process to use the safe harbor which would preclude Samsung for under NVIDIA's § 271(g) importation of an prior to NVIDIA receiving actual Icnowledge that the imported product-by-process was created by an infringing process. 17 (Def.'s PSJ Mem. 11-12). The parties do not dispute that NVIDIA received Samsung filed this action on November 12, 2014. notice when {Def.'s PSJ Mem. 11-12) . Samsung argues that because: (1) NVIDIA's circumstances process only is entitled to pre-suit damages the "actual knowledge" standard is inapplicable to patents; (2) party TSMC makes the it because NVIDIA's it ineligible who take patents direction limitations of §287{b)(l), infringers the for § 287(b) and/or possession or (3) of § a in question control of are third- protection due 287(b)(2) product made to protects with a patent process and NVIDIA never takes possession of the products in question. 1. Applicable Law: The § 287(b) As a general matter, less than a Safe Harbor patentees are entitled to damages not reasonable royalty. 35 U.S.C. § 284. Section 287, however, places limitations on damages. (1) An infringer under 271(g) shall be subject to all provisions of this title relating to damages and injunctions except to the extent those remedies are modified by this subsection or ... the Process Patent Amendments Act. The modifications of remedies provided in this subsection shall not be available to any person who - (A) practiced the patented process; (B) owns by, the process; or controls, person who or is owned practiced or the controlled patented or (C) had knowledge before the infringement that a patented process was used to make the product the 18 importation, use, offer for sale, or sale of which constitutes the infringement. (2) No remedies for infringement under section 271(g) shall be available with respect to any product in the possession of, or in transit to, the person subject to liability under such section before that person had notice of infringement with respect to that product. The person subject to liability shall bear the burden of proving any such possession or transit. 35 U.S.C. § 287(b). 2. Argument and Application of the § 287 (b) Safe Harbor NVIDIA complains that Samsung's damages claim encompasses sales of products manufactured by allegedly infringing processes between 2009 and November received (by way of that the products NVIDIA Samsung's ^902 and '675 patents. states that contractor, the 12, service 2014, in this imports infringing the and date on action) actual sells allegedly (Def.'s PSJ Mem. products which are NVIDIA knowledge violate 11-12). NVIDIA manufactured Taiwan Semiconductor Manufacturing Company by a ("TSMC"). (Def.'s PSJ Mem. 13). The parties agree that NVIDIA does not own TSMC, or vice-versa. NVIDIA asserts, control TSMC. states that confidential processes to (Def.'s though (Def.'s TSMC and Samsung PSJ Mem. treats its discloses customers, PSJ Mem. such 13; disputes, 13; "limited" 19 that PSJ 0pp. NVIDIA Pl.'s PSJ 0pp. fabrication that Pl.'s NVIDIA did not does not 11). NVIDIA as highly processes information 11). about know that those TSMC practiced the claims of the instant suit. (Def.'s PSJ Mem. NVIDIA importing it argues a cannot that, 13-14; Pl.'s PSJ 0pp. because it has be held of § exceptions liable 287 (b) laid for pre-notice unless out NVIDIA in § itself; controls TSMC or (or vice versa) ; falls (B) (C) accused under § damages into 287(b)(1): practiced the patented process 11-12). been product-made-by-infringing-process protections three '675 patent until Samsung filed the (A) that of 271(g), under one of that the the NVIDIA NVIDIA owns or that NVIDIA had knowledge that the process infringed. Samsung Samsung does agrees argue 287(b)(1)(B) such damages; (2) and that exceptions that: that (1) (A) NVIDIA NVIDIA is and (C) do not apply. controls TSMC under exempt from pre-suit not § NVIDIA never took possession of the products under § 287(b) (2), so that NVIDIA is not exempt from pre-suit damages. a. Samsung Has Pled Acts Sufficient To Raise A Material Dispute About NVIDIA's "Control" Of TSMC, And For The § Thus About 287(b) NVIDIA's Eligibility Safe Harbor In defining the legal standard for "ownership or control," NVIDIA argues that "control" in the context of § 287 (b) (1) (B)'s "own or interest exception control" in to means TSMC apply. (or that NVIDIA vice-versa) (Def.'s PSJ 20 must for Mem. have the 16-17). a § controlling 287(b)(1)(B) NVIDIA mostly argues that ownership. "control" in this context should mean corporate (Def.'s PSJ Mem. 16).^ NVIDIA's corporate ownership interpretation of "control" in the context of superfluous. the That, statute of 1166, against 1178, 185 render is unacceptable course, statutory construction. Ct. would E.g., L. Marx v. Ed. 2d Indeed, surplusage). an the Gen. 242 term "own" approach Revenue Corp., (2013) rules the of {noting 133 S. the construction to canon require that each term of a statute be given effect if at all possible. E.g., Lamie 1031, 157 surplusage canons of v. U.S. Tr., L. Ed. 2d is important 540 1024 U.S. (2004) though not 526, 536, (noting 124 that absolute). statutory construction alone S. Ct. canon 1023, against Anti-surplusage teach that "control" is different than "own." ' In its original briefing, NVIDIA pulled its definition for "own or control" from the section of the U.S. Code dealing with the liability of parent companies for sanctions violations. (Def.'s PSJ Mem. 16 n. 3) (citing 22 U.S.C. § 8725(a)(2)). In its reply brief, parent NVIDIA found a corporation controls' its Federal Circuit case which states that "a clearly subsidiaries." 'directly (Def.'s or indirectly owns PSJ Reply (quoting 13) or Union Pac. Corp. v. United 1993)). The citation to the slightly misleading because than a patent case. More simply stands for necessarily own and ownership or control the States, 5 F.3d 523, 526 (Fed. Cir. Federal Circuit, without context, is Union Pacific is a tax case, rather importantly, in context the quote proposition that parent corporations control their subsidiaries not that can only be established in situations of complete corporate ownership/control. 21 Additionally, the oral Patents argument, Amendments ownership and unnecessary. 17-18} as Samsung pointed out in its briefing and at Act (relying Dec. on (June 23, from the on S. Rep. resort 2015 Hr'g, Rep. of on the to Process Process meaning other 33:13-34:17; 100-83, the of statutes Pl.'s PSJ 0pp. Patents Amendments 1987)}. The legislative history of the Act is meant to "shelter only purchasers who are in [patented] No. 1, history elaboration making manufacturer protect themselves using the contains S. shows that § 287(b} remote legislative control, (Tr. Act of 1987 the and contracts at not with the process." 100-83, are (Pl.'s 42). in the position party who PSJ 0pp. to is actually 17-18) (relying NVIDIA actually quotes the same report for a similar proposition, that "Mt]hose who are closely connected with carrying out the process in the manner outlined' cannot PSJ avail Mem. 16) themselves (quoting of S. the § Rep. 287(b) 100-83, safe at harbor." 52). The (Def.'s parties, accordingly, both acknowledge that an importer which is "closely connected" to the party using the patented process cannot use the safe harbor provision.® ® NVIDIA reneges on this acknowledgement in its Reply, where it argues purely that "[c]ontrol in the statutory phrase ^own or control' requires the power to assume responsibility ... for the decisions of the other company, whether by contract, and equity position, or control of the Reply 13) . As noted supra, board however, 22 of directors." (Def.'s PSJ this interpretation clearly To the end of establishing an absence of close connection, NVIDIA argues that "NVIDIA does not own or control TSMC ... NVIDIA is one of hundreds of customers who rely upon TSMC." Mem. 13) . To establish affidavits in which "primary partner," "selects exactly close NVIDIA connection, officials Samsung referred (Def.'s PSJ cites to several TSMC as in which NVIDIA officials stated that which infringing process will be its NVIDIA used to manufacture its products," in which NVIDIA officials stated that TSMC always refused to undertook provide NVIDIA's suggestions information about and had processing, only and in once which NVIDIA officials stated that TSMC shares design information with NVIDIA. v. H. for (Pl.'s PSJ 0pp. Lundbeck A/S, the favor 612 F. proposition sufficient on 12-13). NVIDIA also cites Infosint, Supp. that 2d 402, strategic 404-05 partnerships indicia of "control" to prevent the control (Def.'s PSJ Mem. issue at (S.D.N.Y. the finding summary S.A. 2009) provide a in NVIDIA's judgment stage. 18) . Under the legal definition of "control" acknowledged by the parties - connected" that or is, not whether "remote" NVIDIA - and Samsung TSMC has were shown "closely sufficient. violates anti-surplusage canons of statutory interpretation and cannot stand. 23 affidavit-backed NVIDIA that a reasonable jury could find that c o n t r o l l e d TSMC. That papers facts said, provide the the Court is correct not convinced standard for that § the parties' 287(b)(1)(B). The Federal Circuit's "direction and control" line of cases appears more appropriate. As the Federal Circuit recently summarized: [f]or method claims ... a patent holder must establish that an accused infringer performs "all the steps of the claimed method, either personally or through another acting under his direction previously standard is or that control..." "the satisfied We control in have or stated direction situations where the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method." Aristocrat Techs. F.3d 1348, 1362 Australia (Fed. see also Muniauction, (Fed. Cir. 2008); 1373, 1379 (Fed. Cir. BMC, Muniauction, infringement, where 2013) v. Int'l Inc. Game Tech., 709 (internal citations omitted); Inc. v. Thomson Corp., BMC Res., Cir. Pty Ltd. v. 532 F.3d 1318, 1328 Paymentech, L.P., 498 F.3d 2007) . ® Other district courts have found and the their progeny deal with defendant performs part divided of the infringing method and a third party performs completes the infringing method. Divided infringement is not directly akin to importation. However, they are roughly analogous in that TSMC performs part of the infringement (the process) and NVIDIA performs part of the infringement (bringing the product-byprocess into the United States). Additionally, the statutes providing liability for divided infringement and for importation 24 that "to raise a fact direction-or-control third parties accordance Inc. V. 2008) 924, with to standard, perform specific Lipidlabs, the alleged steps 930-33 (N.D. Inc., af f' d, 318 F. 111. 586 App'x similar allegations infringing products." (Pl.'s 583 F. F. here, and Ecast, Patent 2d 1331, (Fed. Cir. 0pp. will 12-13). 834 586 F. 1335 {S.D. Samsung in Emtel, (S.D. Tex. Supp. 2d LLC v. Holdings, 2009)). that be 811, cause method requirements." Inc., Supp. process claimed 2d Glob. stating infringer must the Supp. v. 2008); 908 PSJ of instructions (noting Rowe Int'l Corp. Panthers BRHC LLC, which issue as to direct infringement under the Fla. has 2008) made NVIDIA "selects exactly used Under to a manufacture its BMC/Muniauction- derived standard of "control," Samsung has also shown sufficient affidavit-backed facts from which a jury could find that NVIDIA controlled TSMC's actions and is accordingly ineligible for the § 287(b) safe harbor. have the same general goal of not letting defendants escape liability by having a third party do part of their dirty work. (S. Rep. No. 100-83, at 42) . In any case, divided infringement is much closer to this case than the definition for "control" on which NVIDIA relies, which come from the federal statute on liability of parent companies for sanctions violations and from tax cases. (Def.'s PSJ Mem. 16 n. 3) (quoting 22 U.S.C. § 8725(a)(2); see also (Def.'s PSJ Reply 13) (quoting Union Pac. Corp., 5 F.3d at 526). Moreover, at oral argument NVIDIA's attorney stated that NVIDIA does not believe that "direction or control" "changes the operative legal" concept behind "owns or controls." (Tr. Dec. 1, 2015 Hr'g, 66:15-19). 25 Because a reasonable "controlled" TSMC, the issue of jury could find that NVIDIA NVIDIA is not entitled to summary judgment on pre-trial connected" argument standard of the under parties either Samsung Has A or Shown Facts Material Issue "Imported" The Of the the "closely "control." b. by damages BMC/Muniauction Sufficient To Raise Fact Over Whether NVIDIA Product, But That Is NVIDIA's failure to protected class of Irrelevant Samsung qualify as infringers, not fusses one that of "[sjeparate Section from 287(b)'s NVIDIA's motion independently fails because it does establish that the infringing products were in possession or in transit to it, as the statute requires." its (Pl.'s PSJ Mem. 18). NVIDIA asserts that it had constructive possession of the accused products when it stored them in certain overseas third-party warehouses. The Court, shipping) (Def.'s PSJ Reply 12).^° however, is not convinced that products under § 287(b)(2) safe harbor of § 287(b)(1). Rather, of a product-by-process 10 (or is a prerequisite for the § 287(b)(1) appear to be two independent safe harbors. importers possessing absent and § 287(b)(2) § 287(b)(1) (A) protects practice, (B) All of NVIDIA's support for the "constructive possession" theory comes from criminal cases (Def.'s PSJ Reply 12 & 12 n. 3) . 26 ownership or control, importers cannot be or (C) held knowledge. liable for § 287(b) (2) damages for says that products in inventory or in transit at the time the importer acquires actual knowledge. the Nothing importer about must §287(b)(2) as a 287(b)(1); take rather, the structure physical predicate the for of § receipt safe provisions 287 of the harbor are suggests that items status alternate under under paths § for limiting importers' damages. Samsung may be receipt of correct imported irrelevant because (1) that NVIDIA does products-by-process, possession under not but § take physical that 287(b)(2) fact is not is a prerequisite for the safe harbor of § 287(b)(1); and (2) Samsung has raised a material issue of fact on control which precludes granting summary judgment on the basis of § apart from whether § 287 (b)(2) 287(b)(1), wholly is a prerequisite or a separate safe harbor. In sum, reasonable Samsung jury could 287 (b)(1)(B), has find raised that facts sufficient that NVIDIA controlled TSMC under a § so that NVIDIA could be ineligible for the safe harbor of § 287(b)(1). Accordingly, these genuine disputes of material fact preclude issuing partial summary judgment on the issue of pre-suit damages to the extent case. 27 that they are in the VI. DILIGENCE, REDUCTION, AND THE LEE APPLICATION Issued patents may be of prior art. 35 invalid due U.S.C. § 102. to obviousness When a in light defendant raises invalidity due to obviousness in an infringement action based on a particular piece of prior art, a plaintiff may assert that he conceived of his patented invention prior to that prior particular patented invention art, and effectively eliminating the conception of antedating the prior his art obviousness-inducing reference. E.g. Creative Compounds, Starmark Labs., 651 (Fed. V. Inc., as C.R. However, exercised Bard, a F.3d 1303, 1311 79 F.3d 1572, plaintiff reasonable may only diligence Cir. 1577 in his reducing an LLC v. 2011); Mahurkar Cir. 1996)." (Fed. antedate own patent his if he concept to practice in the critical period between the publication of the alleged prior art and the plaintiff's reduction to practice. Id. In its third invalidity contention, NVIDIA asserts that the "Lee Application" is invalidating prior art with respect to the ^902 patent; Samsung asserts that it conceived the *902 patent before publication of the Lee Application and pursued the patent with reasonable The diligence "reasonable interferences, until reduction diligence" to concept but "[t]he Federal Circuit has interference context' ([pre-AIA] NVIDIA originates in 'borrowed from the 35 U.S.C. § 102(g)) to resolve priority under 35 U.S.C. § 102(a)." (Def.'s (relying on Mahurkar, 79 F.3d at 1577)). 28 practice. PSJ Mem. 26 n.7) asserts that evidence of PSJ 0pp. • has reasonable 22-30). not produced diligence. (Def.'s legally PSJ Mem. '602 patent before March 22, The Lee Application March sufficient 21-29; Pl.'s The parties agree that: The inventor who assigned the patent of the • Samsung 22, 1996. is a (Pl.'s to Samsung conceived 1996. piece of prior art published on PSJ Mem. 24; Def.'s PSJ Mem. 24- 25) . • Samsung constructively reduced the on June 28, *902 patent to practice 1996, when it filed its own patent application before the Korean patent authority ("KIPO"). (Pl.'s PSJ Mem. 27-28). The parties disagree on diligence" and corroborated (2) whether reasonable between March 22, (1) the requirements of "reasonable Samsung diligence has adequately during 1996 and June 28, the 1996, proven critical and period so that Samsung is entitled to antedate its conception prior to the Lee Application (and thus remove the Lee Application as invalidating prior art). (Def.'s PSJ Mem. 26-29; Pl.'s PSJ Mem. 27-30). A. Legal Standard For Reasonable Diligence Reasonable diligence is an issue Monsanto Co. v. Mycoqen Plant Sci., Inc., of fact for the jury. 261 F.3d 1356, 1367-68 (Fed. Cir. 2001). The party challenging validity must prove all 29 issues relating to the status of any asserted prior art by clear and convincing challenging evidence. validity Mahurkar, must also 79 F.3d prove Corroboration is reasonable diligence. Cir. Pryce v. relying inventor's toward reasonable Mahurkar, support Symsek, of party 79 F.3d at testimony 988 F.2d 1187, regarding 1196 (Fed. on during to district practice the court and proof critical (relying on Illumina (EDL), two cases, asserts that reasonable diligence requires continuous activity reduction activity 05542 to The 1993). NVIDIA, an required 1576. lack diligence by clear and convincing evidence. 1578. at Inc. v. period. of specific details (Def.'s Complete Genomics 2013 WL 1282977, at *7) (N.D. Cal. PSJ Mem. Inc., No. Mar. on 26) C-10- 26 2013); Loral Fairchild Corp. v. Victor Co. of Japan, Ltd., 931 F. Supp. 1014, 1030 (E.D.N.Y. 1996)). Returning to Federal Circuit precedent, NVIDIA asserts that a prosecuting attorney must prove reasonable diligence with records which show "the exact days when activity specific to the patentee's application occurred." (Def.'s PSJ Mem. 26) (relying on In re Enhanced Sec. LLC, 739 F. 3d 1347, 1358 In particular, 867, 871 (C.C.P.A. (Fed. Cir. 2014). NVIDIA points to D'Amico v. 1965) Research, for the proposition Koike, that 347 F.2d two short notes (that the prosecuting attorney considered and approved the 30 application on one occasion, another) in reasonable a two month diligence. and prepared the critical (Def.'s D'Amico court actually gave period PSJ formal were Mem. insufficient 27). trial courts a papers However, a ruling number of must circumstances depend such on a as, great but not limited to, complexity of the invention, length of the application, detail of the drawings, experience, workload and availability of the attorney, availability of the draftsman and the inventor during the period involved, size of the attorney's staff, procedure and policy in reviewing the application, type and thoroughness of the review, number of people involved in preparing the application and their location, and the number of changes which the subject application underwent. Certainly, evidence as to all these factors need not be of record; possibly evidence as to only one or two would suffice in certain cases. However, in the present appeal we know essentially nothing about the handling of the application during the two-month period except that (a) Breen did in fact "consider and approve" the application, and (b) the other work, i.e., checking, placing in final form, and preparing the formal papers, was done sometime. There is no end to the inferences which might be drawn from the scanty record before us and we prefer not to indulge in them, but we cannot overlook the fact that Koike's priority date falls nearly midway in this two-month period and it is certainly possible that all of D'Amico's activity took place during the period prior to October 29, whereupon the application lay idle for nearly one month awaiting execution by the inventor. Be that 31 for the good deal of leeway in determining whether a record showed reasonable diligence. [S]uch on as it may, and the the that month is the critical month record contains no evidence, weakest sort, whether in it even of anything occurred. D'Amico, 347 F.2d at 871. prosecuting patent in attorney the D'Amico did not only critical logged period, two but lose only because his entries because of there work was on no the other evidence of special circumstances.^^ Samsung contends that reasonable diligence does not require a party to work constantly on an invention or to drop all other work. (Pl.'s That is 365, 369 PSJ 0pp. correct. 27) Samsung (C.C.P.A. 1957) (citing Monsanto, points to Rines 261 v. F.3d at Morgan, 1369). 250 F.2d for the proposition that the diligence determination must be made on the circumstances of each case, and that "[i]t is not necessary that an inventor or his attorney should drop all other work and concentrate on the particular invention involved; and if the attorney has a reasonable backlog of work which he takes up in chronological order and carries out expeditiously, that is sufficient." (Pl.'s PSJ 0pp. 29) on Rines, (quoting 250 F,2d at 369). That is also correct. NVIDIA also correctly notes that attorneys must provide dates of activity to prove reasonable diligence in prosecution. In re Enhanced Sec. Research, LLC, 739 F.3d 1347, 1358 (Fed. Cir. 2014). However, evidence of attorney diligence need not come straight from the prosecuting attorney. In D'Amico, the court considered logs of a designated recordkeeper. D'Amico, 347 F.2d at 870. 32 Samsung's argument falters, however, where Samsung argues that "courts have found reasonable diligence even when there are gaps of several months 0pp. 27) 1389 (C.C.P.A. found (relying on in the relevant Rey-Bellet 1974)). reasonable This is diligence v. Enqelhardt, not when activities." strictly there (Def.'s 493 F.2d true. are 1380, Courts gaps of PSJ have several months, but courts have not held that a gap of several months is reasonable per se. depends on the As in Amico, the reasonableness of the gap circumstances. For instance, in Rey-Bellet, several months of inactivity was reasonable because the inventor needed to test his invention on a monkey, short on monkeys. 347 F.2d at 870 require Rey-Bellet, 493 F.2d. to drop all projects prosecution, but refusing to decide, per se and without reasonable prosecute a certain of for an and work on one solely on the basis of that other documentary statement inactivity attorney and, in of may circumstances. documented See also D'Amico, evidence, to take that was months two it to patent). The better months 1389. (recognizing that reasonable diligence does not attorneys principle and his employer was the law be is that reasonable, However, case of such delay a period of given evidence inactivity by the must of be prosecuting attorney, activity must be documented with specific dates. 33 several B. Parties' The Assertions question, evidence from Of Fact then, which a is whether reasonable Samsung jury admissible find could has reasonable diligence during the critical period. NVIDIA asserts that reasonable diligence, Samsung points to during entries in an gaps as long as Mem. 26-27). in the the 99 internal a (Def.'s fact no facts on day long Samsung argues PSJ Mem. 26-29). NVIDIA that "[t]he only thing Samsung critical database," month between NVIDIA shown such that no jury could find that Samsung exercised reasonable diligence. grounds is argument has the that the three period and that entries. Federal Circuit are three there are (Def.'s PSJ has found that the "reasonable diligence" standard was not met as a matter of law in cases where the attorney evinced in Samsung's three entries. Samsung argues that critical period." Samsung points to: processing in 1996; (1) (2) much more work than (Def.'s PSJ Mem. 26-28). "NVIDIA's motion ignores evidence that [Samsung employees and attorneys] the did (Pl.'s all worked diligently during PSJ 0pp. 28). In particular, the high volume of patents Samsung was the diligence of in-house counsel passing the patent off to outside counsel for prosecution; in (3) the high volume of patents the outside counsel was processing in 1996; (4) the fact that outside counsel nevertheless expedited 34 the prosecution; processing and and finalizing by outside counsel. evidence relies on in Samsung's (5) the (Pl.'s (1) Samsung's quick application PSJ 0pp. turn-around once 28-30). it was in 1996, and returned Samsung's diligence the testimony of Sung Pil Kim, IP department (2) a a manager printout from a Samsung database showing activity on the patent on April 3, 17, and May 22, 1996. In sum, in May (Def.'s PSJ Reply 16-17). Samsung has made out a jury issue on the issue of reasonable diligence. NVIDIA's reply does not establish otherwise. argues that lack testimony counsel means that there is "no evidence of attorney diligence." (Def.'s However, is not necessary. from Samsung's NVIDIA outside PSJ Reply 16) . of First, evidence from the prosecuting attorney See D'Amico, 347 F.2d at 870 (considering a draftsman recordkeeper's time logs as evidence). Second, database due NVIDIA also asserts that the Kim testimony and the printout diligence Specifically, are insufficient under D'Amico. NVIDIA attacks as a matter of (Def.'s Kim's PSJ law Reply testimony because to show 16-17). Kim does not have specific recollection about what specific work was done on what (Def.'s bolstered specific PSJ by Reply the days, and 16). But database, admitted Kim's which 35 that lack NVIDIA he of was guessing. recollection acknowledges is does provide specific dates. (Def.'s PSJ Reply 17). NVIDIA then attacks the database for failing to provide specific detail, for having gaps as PSJ Reply 17). long as one month between activity. As to the first, the short and (Def.'s entries in the database are bolstered by Kim's recollections. As to the second, it is true that insufficient for in D' Amico activity spaced diligence. reasonable logs But, in apart D'Amico, were there was no evidence of heavy workload or any of the "great number of circumstances" 347 F.2d at which 871. provides a counsel were impact By general a reasonableness contrast, picture pushing in that this both themselves quantities of patent applications. finding. D'Amico, Kim's testimony case Samsung to put and the out the database would reasonable diligence. dates and a picture individually Together, of the substantial (Pl.'s PSJ 0pp. 28). That is enough to distinguish this case from D'Amico. and outside be however, Kim's testimony insufficient to show they provide concrete circumstances at Samsung and its outside counsel which indicate that a reasonable jury could find reasonable diligence. corroborate each requirement. Pryce, Third, inferences other, NVIDIA in the Additionally, fulfilling Kim the and the Pryce database corroboration 988 F.2d at 1196. argues non-moving that, party's 36 even favor, making the reasonable Court cannot deny summary competent; judgment (2) because: about testimony (1) see (3) evidence is the not is dates upon Kim's testimony is not which corroborated. work was (Def.'s not PSJ done; Mem. specific and 20). (4) his However: the evidence need not be given by the prosecuting attorney, D' Ami CO; (2) NVIDIA fails to present prosecuting attorneys must be named; the necessary dates; the the Kim's testimony is not specific enough about the persons who performed work; enough (1) database. favor, there and Drawing is a (4) all (3) a case saying the the database provides Kim's testimony is corroborated by reasonable genuine dispute inferences of material in fact, Samsung's so that a reasonable jury could find that Samsung and its outside counsel exercised reasonable diligence during the critical period. Thus, NVIDIA is not entitled to partial summary judgment on this issue. Finally, at oral argument Samsung asserted, and NVIDIA conceded, that most of the cases NVIDIA relies upon were largely not decided the facts at had summary been 2015 Hr'g, 54:13-18, Samsung that a judgment, presented to but, the rather, were factfinder. made (Tr. after Dec. 1, 62:6-18, 64:19-65:6). The Court agrees with fact-intensive inquiry such as reasonable diligence is best evaluated for legal sufficiency after all the evidence has been presented. 37 CONCLUSION For SUMMARY the foregoing JUDGMENT {Docket unopposed sub-issue all issues, other (Docket No. 294) reasons, of § No. 294) 287(b) NVIDIA's NVIDIA's will and MOTION (c) FOR MOTION be partially pre-trial PARTIAL FOR on damages. SUMMARY has been denied by previous order PARTIAL is (Docket No. so ORDERED. /s/ Robert E. Payne Senior United States District Judge Richmond, Virginia Date: December 16, 2015 38 On JUDGMENT 586) . It the

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