United States District Court, E.D. Virginia, Norfolk Division
Decided: March 28, 2014.
[Copyrighted Material Omitted]
For Virginia Innovation Sciences, Inc., Plaintiff, Counter Defendant: Aaron Ward Purser, Timothy E. Grochocinski, LEAD ATTORNEYS, Joseph Paul Oldaker, PRO HAC VICE, InnovaLaw, P. C., Orland Park, IL; W. Ryan Snow, LEAD ATTORNEY, David Caldwell Hartnett, Crenshaw Ware & Martin PLC, Norfolk, VA; Anthony Michael Vecchione, Edward E Casto, Jr, Edward R Nelson, III, Jonathan Hart Rastegar, Thomas C Cecil, PRO HAC VICE, Nelson Bumgardner Casto, P. C., Fort Worth, TX; Claire Abernathy Henry, Thomas John Ward, Jr, PRO HAC VICE, Ward & Smith Law Firm, Longview, TX.
For Samsung Electronics Co., LTD., Samsung Electronics America, Inc., Samsung Telecommunications America, LLC., Defendants: Brett Johnston Williamson, Cameron William Westin, Sanjeev B Mehta, PRO HAC VICE, O'Melveny & Meyers LLP, Newport Beach, CA; Brian Berliner, Marc M. Breverman, PRO HAC VICE, O'Melveny & Myers LLP, Los Angeles, CA; Eric Samuel Namrow, PRO HAC VICE, O'Melveny & Myers LLP (DC-NA), Washington, DC; Robert William McFarland, McGuireWoods LLP, Norfolk, VA; Sarah Kate McConaughy, McGuireWoods LLP (Norfolk), Norfolk, VA; Susan van Keulen, PRO HAC VICE, O'Melveny & Myers LLP, Menlo Park, CA.
For Samsung Electronics America, Inc., Samsung Electronics Co., LTD., Samsung Telecommunications America, LLC., Samsung Electronics America, Inc., Samsung Electronics Co., LTD., Samsung Telecommunications America, LLC., Counter Defendant: Robert William McFarland, McGuireWoods LLP, Norfolk, VA; Sarah Kate McConaughy, McGuireWoods LLP (Norfolk), Norfolk, VA.
For Samsung Electronics Co., LTD., Counter Claimant: Brett Johnston Williamson, Cameron William Westin, Sanjeev B Mehta, PRO HAC VICE, O'Melveny & Meyers LLP, Newport Beach, CA; Brian Berliner, Marc M. Breverman, PRO HAC VICE, O'Melveny & Myers LLP, Los Angeles, CA; Eric Samuel Namrow, PRO HAC VICE, O'Melveny & Myers LLP (DC-NA), Washington, DC; Sarah Kate McConaughy, McGuireWoods LLP (Norfolk), Norfolk, VA; Susan van Keulen, PRO HAC VICE, O'Melveny & Myers LLP, Menlo Park, CA.
For Samsung Electronics America, Inc., Samsung Telecommunications America, LLC., Counter Claimants: Robert William McFarland, McGuireWoods LLP, Norfolk, VA; Sarah Kate McConaughy, McGuireWoods LLP (Norfolk), Norfolk, VA.
OPINION AND ORDER
Mark S. Davis, UNITED STATES DISTRICT JUDGE.
This matter is currently before the Court on two motions filed by plaintiff Virginia Innovation Sciences, Inc. (hereinafter " Plaintiff" or " VIS" ) regarding a counterclaim advanced by Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC (collectively " Samsung" or " Defendants" ). ECF Nos. 141, 266. Plaintiff's first motion requests that the Court strike Defendants' thirteenth counterclaim, relating to inequitable conduct, or, in the alternative, grant summary judgment in favor of VIS on such counterclaim. Mot. to Strike 1, ECF No. 141. Plaintiff's second motion alternatively requests that, if the Court denies the first motion, the Court enter an order " bifurcating this case into a jury trial and a bench trial, and, in the jury trial, excluding evidence relating solely to inequitable conduct and Defendants' 35 U.S.C. § 111 defense." ECF No. 266. Also before the Court is Defendants' request for judicial notice filed in response to VIS's first motion. ECF No. 154. All three motions have been fully briefed and are therefore ripe for decision.
After examination of the briefs and the record, the Court determines that a hearing is unnecessary, as the facts and legal arguments are adequately presented, and the decisional process would not be aided significantly by oral argument. See Fed.R.Civ.P. 78(b); E.D. Va. Loc. Civ. R. 7(J). For the reasons that follow, the Court GRANTS Defendants' request for judicial notice. ECF No. 154. With regard to Plaintiff's first motion, the Court DENIES Plaintiff's request to strike Defendants' counterclaim and affirmative defense of inequitable conduct, but GRANTS summary judgment in favor of Plaintiff on Defendants' thirteenth counterclaim. ECF No. 141. Having granted summary judgment in favor of Plaintiff on Defendants' counterclaim of inequitable conduct, the Court DENIES as moot Plaintiff's motion to bifurcate. ECF No. 266.
I. FACTUAL BACKGROUND
At issue in this case are five  patents: U.S. Patent No. 7,899,492 (" the '492 patent" ), U.S. Patent No. 8,050,711 (" the '711 patent" ), U.S. Patent No. 8,145,268 (" the '268 patent" ), U.S. Patent No. 8,224,381 (" the '381 patent" ), and U.S. Patent No. 8,135,398 (" the '398 patent" ). All of the patents-in-suit are continuations or continuations-in-part of the '492 patent, which in turn issued from U.S. Patent Application No. 11/165,341 (" the '341 application" ), filed June 24, 2005. The '711, '268, and '381 patents are continuations from the '492 patent and, thus, claim priority directly to the '492 patent, which ultimately claims priority to provisional application number 60/588,359, filed on July 16, 2004. The '711, '268, and '381 patents all share a substantively identical specification (" the '492 specification" ). U.S. Patent No. 7,957,733 (" the '733 patent" ), which is no longer at issue in this case, was filed on May 22, 2007 as a continuation-in-part of the '492 patent. The '398 patent is a continuation from the '733 patent. The shared specification of the '733 and '398 patents (" the '398 specification" ) includes all of the '492 specification along with additional material. Each of the patents-in-suit describes inventions intended to resolve the inconvenience and impracticability of viewing multimedia content on the small screens of mobile terminals.
II. PROCEDURAL HISTORY
In the instant patent infringement action, VIS alleges that Defendants have directly, indirectly, and willfully infringed the patents-in-suit by making, using, offering for sale, selling, and/or importing a wide range of accused products, including smartphones, tablets, Blue-ray players, and hubs. Pl.'s First Am. Compl., ECF No. 121. Samsung denies VIS'S claims of infringement and asserts several affirmative defenses, including invalidity of all patents-in-suit, prosecution history estoppel and other equitable doctrines. Additionally, Samsung asserts counterclaims seeking declarations of non-infringement and invalidity for each of the patents-in-suit. Samsung's thirteenth counterclaim, which is at issue in the instant motions, alleges that " VIS's enforcement of the '492, '711, '268, '381, '733, and/or '398 Patents is barred, in whole or in part, as a result of VIS's inequitable conduct committed during prosecution of one or more of the Patents-in-Suit at the U.S. Patent and Trademark Office (USPTO)." Defs.' Answer to the First Am. Compl. 33, ECF No. 132. The alleged inequitable conduct includes submission of the '341 Application
Declaration with a forgery of one of the inventor's signature, Prof. Halal's signature, and the withholding of " materially relevant information from the USPTO with the intent to deceive" during prosecution of the '733 and '398 patents, particularly the " Rakib" prior art reference. Id. at 34-40.
The Court held its Markman hearing in this matter on June 11, 2013 and issued its Markman opinion on September 25, 2013. ECF No. 198. Since the Markman hearing, there have been numerous filings in this matter and several motions remain pending before the Court. By Order of October 25, 2013, the Court joined for trial this matter and Virginia Innovation Sciences, Inc. v. Samsung Electronics Co., Ltd., et al., Case No. 2:13cv322. ECF No. 353. The trial of the two matters is now set for April 21, 2014. On November 15, 2013 the Court ruled on Defendants' Motion to Dismiss VIS's Claim for Willful Infringement; granting, in part, and denying, in part such motion. ECF No. 395. The Court found that the claim for willful infringement failed to state a plausible claim for relief with regard to willful infringement of the '711, '268, and '381 patents. On January 8, 2014, the Court ruled on Defendants' Motion for Summary Judgment; granting, in part, and denying, in part, such motion. ECF No. 413. The Court found no willful infringement, and also found claims 21, 22, 25, 28, and 29 of the '268 patent and claims 15, 60, 61 and 62 of the '398 patent invalid as anticipated.
Turning to the instant motions, the Court first addresses Defendants' unopposed request for judicial notice because that request impacts the remaining motions. ECF No. 154. The Court then addresses Plaintiff's motion to strike, or, in the alternative, for summary judgment and the associated responses, briefs, and declarations. ECF Nos. 141, 142, 152, 153, 173, 174, and 189. Finally, the Court will address Plaintiff's motion to bifurcate and the associated responses and briefs. ECF Nos. 266, 267, 318, and 346.
A. Defendants' Request for Judicial Notice
Federal Rule of Evidence 201 " governs judicial notice of . . . adjudicative fact[s]." Fed.R.Evid. 201(a). The Court is permitted to take judicial notice " on its own," Fed.R.Evid. 201(c)(1), however, the Court " must take judicial notice if a party requests it and the court is supplied with the necessary information," Fed.R.Evid. 201(c)(2).
Defendants request that the Court take judicial notice of the travel distances to a specific address in Arlington, Virginia from various starting locations. Request for Judicial Notice 1-2, ECF No. 154. Information on these distances, sourced from online resources, was supplied to the Court in an Appendix of Exhibits. App'x of Exs., Exs. K-N, ECF Nos. 155-7, 155-8, 155-9, & 155-10. Plaintiff takes no position with regard to this request.
Federal Rule of Evidence 201 permits district courts to " judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot be reasonably questioned." Fed.R.Evid. 201(b). The United States Court of Appeals for the Fourth Circuit has ruled that " geographical information is especially appropriate
for judicial notice." United States v. Johnson, 726 F.2d 1018, 1021 (4th Cir. 1984); see also United States v. Lavender, 602 F.2d 639, 641 (4th Cir. 1979). Accordingly, district courts within the Fourth Circuit have on several occasions taken notice of travel distances, including in cases where the information was supplied from online sources.
See, Elcomsoft, Ltd. v. Passcovery Co., Ltd., 958 F.Supp.2d 616, 622 (E.D. Va. 2013), reconsideration denied (Dec. 19, 2013) (taking " judicial notice that Russia is far from this District, and that any willing witnesses will face significant travel costs" ); Rogers v. Metro. Life Ins. Co., No. CIV. JKB-12-1012, 2013 WL 2151675, at *8 n.5 (D. Md. May 15, 2013) (referring to driving distances obtained from Mapquest.com in taking " judicial notice that Odenton, Maryland ... is approximately eighteen miles from downtown Baltimore, twenty-seven miles from downtown Washington, and fifteen miles from Annapolis" ); United States v. Franklin, No. CRIM. MJG-11-0095, 2012 WL 71018, at *1 n.3 (D. Md. Jan. 9, 2012) (taking " judicial notice of the Yahoo Internet directions to provide distance and driving time estimates" ).
As the Court has been " supplied with the necessary information," pursuant to Fed.R.Evid. 201(c)(2), the Court takes judicial notice of the following facts: 1) that [street number withheld] Maud Street NW, in Washington, DC is less than eight miles driving distance from [street number withheld] Joyce Street, in Arlington, Virginia; 2) that Beijing, China is over 6,900 miles flight distance from Arlington, Virginia; and 3) that La Jolla, California is over 2,600 miles driving distance from Arlington, Virginia.
B. VIS's Motion to Strike
i. VIS's Arguments in Support of the Motion
VIS asserts that Defendants' thirteenth counterclaim, which alleges inequitable conduct and was first asserted in Defendants' Amended Answer, should be struck for failure to comply with Federal Rule of Civil Procedure 15(a). Pl.'s Mem. in Supp. of Mot. to Strike 12, ECF No. 142 (hereinafter " Mem. in Supp." ). VIS cites to Elite Entm't, Inc. v. Khela Bros. Entm't, 227 F.R.D. 444, 446 (E.D. Va. 2005), for the proposition that " [i]n response to an amended complaint, an amended response may be filed without leave only when the amended complaint changes the theory or scope of the case, and then, the breadth of the changes in the amended response must reflect the breadth of the changes in the amended complaint." Mem. in Supp. 12, ECF No. 142 (emphasis in original).
Relying on such authority, VIS argues that Samsung cannot add the new counterclaim asserting inequitable conduct without leave of court because the counterclaim " is not tied to [VIS]'s allegation of willful infringement" that was added in the First Amended Complaint and, thus, " does not reflect the breadth of the changes in the [First Amended Complaint]." Id. at 12-13. Anticipating a favorable ruling by the Court on its motion to strike, VIS also asserts that, should Defendants request leave from the Court to amend their counterclaims, " their request should be denied due to their undue delay and the prejudice to [VIS]." Id. at 13 (citing Elite Entm't, 227 F.R.D. at 447).
ii. Samsung's Arguments in Opposition
Samsung asserts that the requirement that a response " reflect the breadth of the amendments to the complaint" is " a measure of proportionality, not of relation." Mem. in Response 2, ECF No. 152 (citing Elite Entm't, 227 F.R.D. at 446-47). Samsung argues that " the changes [in its counterclaim] are proportional" because
" both [the addition of willful infringement by VIS and the addition of inequitable conduct by Samsung] expand the scope of the lawsuit" and add a new claim. Samsung further argues that VIS is applying the standard in Elite Entm't " in a way squarely rejected by that court." Id. at 2-3. Samsung also contends that not only did " [t]he [First Amended Complaint] change the scope of this case by adding willful infringement," but that " [a]s a result, Samsung 'is allowed to answer the amended complaint anew as though it were the original complaint.'" Id. at 1 (citing Digital Privacy, Inc. v. RSA Security, 199 F.Supp.2d 457, 459 n.2 (E.D. Va. 2002)). Additionally, Samsung posits that, based on VIS's failure to challenge Samsung's affirmative defense of inequitable conduct in its motion to strike, the affirmative defense is not at issue here. Id. at 2.
iii. VIS's Rebuttal Arguments
VIS asserts that Samsung's position, based on Digital Privacy, " that a defendant may amend its response after the plaintiff files an amended complaint . . . goes too far" as " the Digital Privacy opinion was issued earlier in time than the Elite opinion; thus, to the extent the two opinions are inconsistent, Elite should control." Pl.'s Rebuttal Br. 6-7, ECF No. 173. VIS argues that, under the Elite Entm't standard, " the changes in [VIS]'s amended complaint do not come close to 'changing the scope' of the case to allow Defendants to assert an entirely new counterclaim in their response" as the addition of the willful infringement allegation " merely allows for additional damages but does not change the nature of [VIS]'s infringement case against Defendants." Id. at 8. Alternatively, VIS argues that " even if the Court were to find that [VIS]'s amendment 'changed the scope' of the case within the meaning of Elite, Defendants' new counterclaim fails the 'breadth' test" because it " interjects allegations of fraud and significantly alters the scope of the litigation." Id. at 8-9. VIS further argues that it " clearly intended for its motion to cover the affirmative defense of inequitable conduct." Id. at 5. VIS requests that, should the Court choose " to place form over function," VIS be given " leave to file a motion to dismiss or strike the affirmative defense on the ground that it is not pled with the required particularity." Id.
iv. Applicable Standard
There are three Federal Rules of Civil Procedure that are implicated by the instant motion; Rule 12(f), which governs motions to strike, Rule 15(a), which governs amendments to pleadings, and former Rule 13(f), which governed the addition of omitted counterclaims. The 2009 Amendments to the Federal Rules of Civil Procedure made changes to Rule 15(a) and abrogated Rule 13(f). As " [n]o appellate court has squarely addressed  whether counterclaims filed in response to an amended complaint pursuant to Rule 15, Fed. R. Civ. P., must be permitted as of right or only with leave of court, " the Court will look to the opinions of district courts on the issue. Elite Entm't, 227 F.R.D. at 446; see also Childress v. Liberty Mut. Fire Ins. Co., C10-059RSL, 2011 WL 2071200, at *1 (W.D. Wash. May 25, 2011). A review of district court cases reveals that " district courts have taken variant positions on the issue," such that three lines of cases arose under the prior versions of the Federal Rules of Civil Procedure. Elite Entm't,
227 F.R.D. at 446 (citing Uniroyal Chem. Co. v. Syngenta Crop Prot., Inc., No. 3:02CV02253 (AHN), 2005 WL 677806, at *1 (D. Conn. March 23, 2005)).
These three approaches have been characterized as permissive, moderate, and narrow. Courts applying the narrow approach hold " that an amended answer must be confined specifically to the amendments to the complaint." Id. At the opposite end of the spectrum, those applying the permissive view hold that the defendant is allowed to plead anew to the amended complaint as though it were the original complaint. Id. In between these two views, those courts applying the moderate approach hold that " the breadth of the changes in the amended response must reflect the breadth of the changes in the amended complaint." Id.
As described below, the 2009 Amendments, specifically the abrogation of Rule 13(f), superseded those cases following the narrow approach. After considering the cases applying the two remaining approaches, the Court finds that the permissive approach deprives the Court of the ability to effectively manage ...