California company EcoFactor, a provider of smart home energy products and services, brought several suits in Massachusetts, accusing a number of businesses of infringing patents relating to evaluating and improving efficiency in HVAC systems and to smart thermostats. These suits follow an October ITC complaint seeking to block importation of products accused of infringing these same patents. The cases are presently spread between Judges Saylor, Sorokin, and Bowler.
Judge Saylor denied Her Campus Media’s motion to dismiss or, in the alternative, for summary judgment, finding it premature to determine whether the use of Adler’s photograph constituted fair use or that Her Campus Media was shielded by the safe harbor provisions. Judge Saylor noted that the complaint alleges that Her Campus Media, which accepts and posts content from non-employees, utilizes an editorial staff to review proposed publications, including the submission that included the Adler photograph, and that a review of fair use and safe harbor would turn on facts such as the nature of the relationship between the website and its student contributors that preclude a finding at this early stage of the proceeding, much as it did in a different case involving Her Campus Media with a very similar fact pattern. Judge Saylor also denied the motion with respect to Mass. G.L. c. 214, § 3A, which provides a civil cause of action for any person whose name, portrait or picture is used in Massachusetts for advertising or trade without their consent. Her Campus Media asserted that, because the subject of the photographs had an independent right to their likenesses that Adler had not secured, an award of money damages to Adler would not be proper. Judge Saylor found this to be legally incorrect, because (a) Her Campus Media lacked the right to enforce the subjects’ rights under the Massachusetts law; (b) court-awarded monetary damages for copyright infringement would not qualify as a “use for advertising purposes or for the purposes of trade” within the meaning of the Massachusetts law; and (c) to the extent the Massachusetts law did somehow prevent an award for copyright infringement, it would likely be preempted by copyright law.
Judge Saylor overruled Palomar’s objections to the Magistrate Judge Bowler’s order partially granting MRSI’s motion to compel, finding that her ruling was not clearly erroneous nor contrary to law. The discovery dispute surrounded the selection of search terms to search e-mail, that Palomar contended were over-broad and would result in a significant number of documents not related to the litigation and would result in the production sensitive personal information, in violation of the California state constitution. Judge Saylor found no reason that the constitution of the state should impact discovery in a federal case and based on federal, not California, law, and further determined that the argument was waived as not having been raised in the written responses to the discovery requests. Judge Saylor did, however, permit Palomar to submit for in camera review any specific documents for which it contends that the laws of California should control discovery (despite the case arising under federal patent law) and that the privacy concern was not waived.
Judge Saylor granted in part and denied in part Abiomed’s motion to strike Maquet’s second supplemental non-infringement contentions. Maquet, who asserted patent infringement counterclaims, sought to add a claim under 35 U.S.C. § 271(f), which prohibits the export of all or a substantial portion of a patented invention for assembly abroad. Judge Saylor struck this part of the contentions, finding that Maquet’s counterclaims did not refer to 271(f) and made no factual allegations from which a 271(f) claim could be inferred, and thus Maquet should follow the requirements of F.R.C.P. 15. Judge Saylor refused to strike portions of the second supplemental contentions that added new infringement contentions concerning the “guide mechanism” term. He noted that, through inadvertence, his scheduling order did not literally prevent the service of supplemental contentions, and accepted Maquet’s assertion that the amendment was based on “newly adduced” evidence not previously available to it. Maquet further assured the Court that the amendment narrows the asserted claims and “elaborates and refines” their infringement theory. He did ban any further amendment of the infringement contentions.
Photographer Morgan Howarth specializes in interior architectural photography. Howarth accuses Mitchell Construction Group of copying a Howarth photograph of a kitchen cabinet and using it without license on Mitchell’s website. Specifically, the photograph is alleged to be included in Mitchell’s “5 Amazing Kitchen Cabinet Storage Options You Need To See!” on Mitchell’s blog. Howarth seeks injunctive relief, actual or statutory damages, and attorneys fees. The case is before Judge Saylor.
Closing out this dispute, at least at the District Court, Final Judgement was entered awarding SiOnyx:
- $1,377,109 in contractual and unjust enrichment damages plus $1,752,017 in pre-judgment interest for a total of $3,129,126;
- post-judgment interest at 2.4% pursuant to 28 U.S.C. §1961, with an accounting of post-verdict sales to occur;
- judgment that the ‘467 patent was willfully infringed;
- addition of Dr. James Carey as co-inventor of the ‘467 patent;
- ownership of nine U.S. patents; and
- a permanent injunction barring infringement of all ten patents by Hamamatsu.
Let the appellate process begin…
Following trial, Judge Saylor dealt with a number of post-trial motions. He granted SiOnyx’s motion for equitable relief, awarding ownership of the nine patents in dispute to SiOnyx and ordering Hamamatsu to take all necessary steps to correct ownership of the patents. This was based on the non-disclosure agreement that a jury found to have been violated, that provided for ownership of all patent rights arising from the confidential information SiOnyx disclosed to Hamamatsu when exploring a possible business relationship. While the SiOnyx employee who took part in the disclosure was found to be only a con-inventor (along with Hamamatsu personnel), Judge Saylor noted that the non-disclosure agreement expressly provided ownership in the resulting ideas to SiOnyx. Judge Saylor further granted an injunction prohibiting Hamamatsu from making, using, selling, offering for sale, or importing accused products based on language in the NDA that explicitly provided for injunctive relief in the event of breach as well as on SiOnyx’s ownership of the patents, one of which the jury found to be infringed.
Judge Saylor denied Hamamatsu’s motion for judgment as a matter of law, finding that the statute of limitations did not bar suit on the NDA. He noted that this is generally a jury decision, and that there was no reason to overturn the jury’s verdict on this issue. He further refused to modify the unjust enrichment award to stop damages from accruing after the NDA expired, finding that the jury reasonably concluded that post-expiration damages flowed from pre-expiration conduct in designing the accused products.
The rulings were not all bad for Hamamatsu. Judge Saylor treated SiOnyx’s motion to amend the judgement to have their employee deemed the sole inventor on the patents in suit (filed prematurely) as a motion for judgment as a matter of law and denied it. SiOnyx contended that a jury instruction erroneously stated that the method of forming a claimed aspect of the invention was irrelevant, but Judge Saylor determined that, having failed to object to the instruction prior to the jury retiring under Fed. R. Civ. P. 51, SiOnyx had waived the argument, and further that SiOnyx could not raise the issue because it was not argued in SiOnyx’s motion for a directed verdict. Accordingly, Hamamatsu employees remain co-inventors.
Judge Saylor also denied SiOnyx’s motion for fees for an exceptional case. He noted that, while SiOnyx alleged Hamamatsu’s invalidity and non-infringement defenses to be substantively too weak to merit litigating, SiOnyx did not seek summary judgment on either issue. He further found no evidence that Hamamatsu deliberately sought to increase the cost and complexity of the litigation for an improper purpose.
Finally, Judge Saylor denied SiOnyx’s motion for enhanced damages pursuant to 35 U.S.C. 284, which allows the court to assess damages when not found by the jury. Here, the jury awarded damages for breach of contract and unjust enrichment, but awarded $0 in patent damages despite finding willful infringement. SiOnyx contended that the $0 award was, in effect, the jury not “finding” damages pursuant to the statute, permitting the judge to do so. Judge Saylor disagreed, noting that SiOnyx’s damages expert told the jury that there may be overlap between the breach of contract damages and infringement damages, and that the jury might need to choose between the two. Given this, and given the fact that the jury was told not to award duplicative damages, it is reasonable to interpret the $0 infringement award to mean that the infringement damages were covered by the breach of contract damage award. Judge Saylor further refused to treble the damages, since there was no way to accurately determine the level of damages attributable to infringement.
If anyone is wondering why patent litigation is so expensive, note that this case was filed in November 2015, and included significant motion practice and discovery disputes to get to this point, including 70 docket entries just to get to the filing of an answer to the complaint (with motions to dismiss, contesting adequacy of service, and for a preliminary injunction intervening). The case took almost two years to get to a claim construction order, and almost another two years to get to trial, and the matter is just now coming due for appeal. While this case involved additional issues beyond mere patent claims, this is not an unusual time-frame for patent litigation, and helps explain the costs involved.