Wi-Lan Inc. v. Sharp Elecs. Corp.
Wi-Lan Inc. v. Sharp Elecs. Corp.
Opinion of the Court
Pending before the Court are Plaintiff Wi-LAN Inc.'s ("Plaintiff") Motions for Summary Judgment of Infringement (C.A. No. 15-379 D.I. 406; C.A. No. 15-788 D.I. 334), Defendants Sharp Electronics Corporation and Vizio, Inc.'s (collectively, "Defendants") Motions to Preclude the Expert Opinions of Craig K. Tanner (C.A. No. 15-379 D.I. 408; C.A. No. 15-788 D.I. 329), *229Defendants' Motions to Preclude the Analysis of Rebecca Reed-Arthurs (C.A. No. 15-379 D.I. 410; C.A. No. 15-788 D.I. 330), Defendants' Motions to Preclude the Expert Opinions of Ionut Mirel (C.A. No. 15-379 D.I. 411; C.A. No. 15-788 D.I. 331), Defendants' Motions to Preclude the Expert Opinions of David A. Kennedy (C.A. No. 15-379 D.I. 412; C.A. No. 15-788 D.I. 332), Plaintiff's Motions for Partial Summary Judgment of No Invalidity (C.A. No. 15-379 D.I. 414; C.A. No. 15-788 D.I. 339), Defendants' Motions for Summary Judgment of Non-Infringement (C.A. No. 15-379 D.I. 416; C.A. No. 15-788 D.I. 337), and Plaintiff's Motions to Preclude the Infringement and Validity Expert Reports of Clifford Reader (C.A. No. 15-379 D.I. 419; C.A. No. 15-788 D.I. 344). The Court heard arguments on these motions on December 19, 2018 and took all motions under advisement. (See D.I. 471 ("Tr.") ) The Court has also considered the parties' supplemental briefs and letters responding to the Court's post-hearing questions (C.A. No. 15-379 D.I. 470; C.A. No. 15-788 D.I. 399). (See C.A. No. 15-379 D.I. 472, 473, 474, 475, 481, 482; C.A. No. 15-788 D.I. 401, 402, 403, 404, 410, 411)
I. BACKGROUND
While this was initially a three-patent case, only one patent remains asserted in this action:
II. LEGAL STANDARDS
Under Rule 56(a) of the Federal Rules of Civil Procedure, "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. ,
To defeat a motion for summary judgment, the nonmoving party must "do more than simply show that there is some metaphysical doubt as to the material *230facts." Matsushita ,
III. DISCUSSION
The parties filed cross-motions for summary judgment regarding infringement of the '654 patent.
Plaintiff's evidence of infringement includes (and essentially depends on) two sets of declarations from the companies that manufacture for Defendants the System-on-Chips ("SoCs") which house the accused functionality (the "SoC declarations"). Plaintiff's other principal evidence of infringement is Register Transfer Level ("RTL") source code that provides the blueprint to manufacture the hardware of the SoCs. As Plaintiff cannot prove infringement without the source code, the Court will first consider the admissibility of the source code and the SoC declarations.
For purposes of this Opinion, the Court will assume that every limitation of the asserted claims is met by the accused products.
*231A. Admissibility of Source Code and SoC Declarations
Given the nature of the alleged infringement, and Defendants' relationship to the asserted patented methods, Plaintiff has "been on notice since the very beginning of the case that [it was] going to need source code from third parties." (D.I. 182 at 25; see also D.I. 91 at 33) That is, in order to meet its burden to prove infringement, Plaintiff has known that it would need to obtain source code from MediaTek, MStar, and Sigma (the "SoC manufacturers") - those third parties manufacture the SoCs that are accused of containing the infringing functionality in this case. (See D.I. 91 at 33; D.I. 182 at 25-26) When Plaintiff approached the SoC manufacturers, they did not easily and voluntarily produce their proprietary code. For example, in April 2017, MediaTek's counsel told Plaintiff's counsel that "MediaTek Inc. is not going to voluntarily produce each version of code that has existed for 15 chips over almost 8 years." (D.I. 423 Ex. 50 at 2; see also id. at 3 ("MediaTek Inc. does not have a single person, or even multiple people, who could state under oath that there are no 'material differences' for 15 chips over almost 8 years.") ) The following month, Plaintiff sued the SoC manufacturers in this Court for patent infringement. (See D.I. 418 at 13) Shortly thereafter, Plaintiff entered into termination agreements with the SoC manufacturers which provided that the SoC manufacturers would produce source code and the lawsuits against them would be dismissed without prejudice. (See D.I. 445 at 30; D.I. 446 Exs. 16-17) Ultimately, the SoC manufacturers produced a single version of RTL source code with accompanying declarations stating that the code produced provides the implementation of the deinterlacing process for digital video data in a specified list of chips, adding that there are "no material differences"
Plaintiff argues that the source code and the first set of SoC declarations are admissible, citing several grounds for admissibility. The Court addresses, and rejects, each in turn.
First, Plaintiff argues that the source code and SoC declarations are admissible as records of a regularly conducted business activity under Federal Rule of Evidence 803(6). (See D.I. 472 at 1-3; D.I. 474 at 1-2) Rule 803(6) provides that a business record is not excluded as hearsay if "(A) the record was made at or near the time by ... someone with knowledge; (B) the record was kept in the course of a regularly conducted activity of a business ...; (C) making the record was a regular practice of that activity; (D) all these conditions are shown ... by a certification that complies *232with Rule 902(11) or (12) ...; and (E) the opponent does not show that the source of information or the method of circumstances of preparation indicate a lack of trustworthiness." A business record is self-authenticating under Rule 902(11) as long as the requirements of Rule 803(6)(A)-(C) are shown by a certification of a qualifying person and the adverse party had reasonable notice of the record and certification. See Fed. R. Evid. 803(6)(D) & 902(11).
The SoC declarations, which Plaintiff contends are the Rule 902(11) certifications for the source code, state that the declarant either is familiar with or has personal knowledge of the contents and functionality of the code and that the declarant understands that the code is maintained as a business record in the ordinary course of the company's business. (See D.I. 446 Exs. 9-14) However, as Defendants argue, the SoC declarations fail to demonstrate that the source code meets the requirements of Rule 803(6). The SoC declarations merely provide conclusory statements that the code is a business record without providing any factual basis for those statements, let alone addressing the three requirements of 803(6).
Mere "boilerplate recitation of the requirements under 803(6) fails to provide sufficient detail necessary to authenticate the exhibits or satisfy the requirements of Rule 803(6)." JPMorgan Chase Bank, N.A. v. AME Fin. Corp. ,
Moreover, Plaintiff cannot satisfy the fifth requirement of Rule 803(6). Defendants have demonstrated a lack of trustworthiness in the materials; the source code contains inconsistent dates in the metadata, copyright, and revision histories
The SoC declarations, too, are not admissible under Rule 803(6) because they were prepared for purposes of litigation, nor in the ordinary course of business, and, further, do not contain much indicia of trustworthiness. (See D.I. 473 at 2-3; see also *233United States v. Casoni ,
Plaintiff's second asserted basis for admissibility of the source code is that it may be authenticated under Rules 901(b)(1) and 901(b)(4). However, Rule 901(b)(1), which permits authentication via testimony, is not met because the SoC declarations are not trustworthy and neither the declarants nor anyone else with knowledge of the source code has been deposed or will be coming to trial. (See Tr. at 43-44) While Rule 901(b)(4) allows evidence to be authenticated by distinctive characteristics, such as the "appearance, contents, substance, internal patterns ... taken together with all the circumstances," this provision is not satisfied here - even if the source code is distinctive - given the highly dubious circumstances surrounding the production and the lack of indicia of trustworthiness in the source code. Furthermore, even if the source code could be authenticated, it does not necessarily follow that the source code would also be admissible. See, e.g. , Acceleration Bay LLC v. Activision Blizzard Inc. ,
Plaintiff next argues that the source code is admissible under Federal Rule of Evidence 807(a)(3), because the SoC declarations are "more probative on the point for which [they are] offered than any other evidence that the proponent can obtain through reasonable efforts." (See D.I. 472 at 5 n.6) However, "equivalent circumstantial guarantees of trustworthiness" is also a prerequisite under Rule 807 and, as already explained, the source code and declarations lack such characteristics. Fed. R. Evid. 807(a)(1).
Plaintiff additionally argues that, pursuant to Rule 703, its experts may reasonably rely on the source code in forming their opinions and may also disclose the contents of the source code to the jury because "their probative value in helping the jury evaluate the opinion substantially outweighs their prejudicial effect." (See D.I. 472 at 5-6) Plaintiff's interpretation of this provision lacks merit. Rule 703 allows an expert to rely on his or her own experiences, statements made by others, and data presented by others even when that evidence on which the expert has relied would itself be admissible only if it was authenticated. See Fed. R. Evid. 703, advisory committee's note on proposed rules. The Rule was not intended to create a "backdoor" to allow the admission into evidence of otherwise inadmissible declarations and other materials simply because they might assist the jury's evaluation of an expert's opinions.
Plaintiff also argues that the SoC declarations are admissible under Rule 801(d)(2)(B) as statements offered against Defendants that Defendants have "adopted or believed to be true." In particular, Plaintiff insists that since Defendants submitted their own SoC declarations and relied on them in support of their motions for summary judgment and expert reports, "the statements of authenticity and admissibility in those declarations that mirror the statements in Wi-LAN's SoC Declarations are not hearsay ," because "Defendants have adopted these statements as *234true and therefore are precluded from now claiming them to be hearsay." (D.I. 472 at 2) This contention is, in the apt characterization of Defendants, "wildly inaccurate." (D.I. 475 at 1) Defendants' primary - and vehement - position has always been that all of the SoC declarations are inadmissible;
Finally, and most recently, Plaintiff requests that, should the Court finds the source code and SoC declarations inadmissible, it be given a further opportunity to cure any defects, citing Federal Rule of Civil Procedure 56(c)(2) as support. (See D.I. 474 at 2-3; D.I. 482 at 1) Rule 56(c)(2) allows a party to object to material cited in a summary judgment motion if it cannot be presented in a form that would be admissible in evidence. "The objection functions much as an objection at trial." Fed. R. Civ. P. 56, committee notes on 2010 amendment. If the inadmissible evidence cannot be converted into admissible form, it must be excluded.
Rule 56(c)(2) does not help Plaintiff here. Plaintiff has had ample time and opportunities over years of litigation to obtain evidence of infringement from the SoC manufacturers. As but one example, as long ago as September 2017 the Court stated there was already at that time "a really strong case" to deny Plaintiff another opportunity to obtain source code from third parties, as the issue had been litigated since early 2016. (D.I. 182 at 25-26) (Sept. 11, 2017 Transcript) This has now been an issue for approximately three years - and trial is now just two months away. There is simply no reason to provide Plaintiff still another opportunity to fix its evidentiary deficiencies (even assuming Plaintiff could, somehow, do so).
Thus, the Court concludes that the source code and SoC declarations are inadmissible. They will be excluded from trial.
Without source code from the SoC manufacturers, no reasonable juror could find that Defendants' accused televisions practice the limitations of the asserted claims. Therefore, Plaintiff cannot prove that Defendants directly infringe the '654 patent through sales or testing. It follows, then, that the Court must grant Defendants' motions for summary judgment of non-infringement and deny Plaintiff's motions for summary judgment of infringement.
B. Direct Infringement Through Sales Under SiRF
Defendants present an alternative basis on which the Court may - and is - also granting summary judgment of non-infringement. "A method claim is directly infringed when someone practices every step of the patented method." Ericsson, Inc. v. D-Link Sys., Inc. ,
In SiRF , the defendant developed, manufactured, and sold GPS chips to customers who incorporated the chips into end-user GPS devices. See
The Federal Circuit has explained that its "decision in SiRF did not create direct infringement liability whenever an alleged infringer sells a product that is capable of executing the infringing method." Ericsson ,
Here, it is undisputed that no person or entity performs any steps of the asserted method claims; rather, it is the accused products themselves that perform every step of the claims. (See, e.g. , D.I. 407 at 1-3; D.I. 447 at 17-18) SiRF , then, is inapplicable. No reasonable juror could find on the present record that Defendants control the performance (automatically or not) of the claimed method. See Ericsson ,
Plaintiff argues that Defendants directly infringe because they "control all aspects of the hardware within the accused televisions, including the [SoCs] and display modules." (D.I. 407 at 2) In fact, as any reasonable factfinder would have to conclude, if anyone actually controls the performance of the steps of the method it is not Defendants but the SoC manufacturers , because the SOC manufacturers design and implement the allegedly infringing deinterlacing functionality, which is protected by confidential and proprietary source code to which Defendants do not even have access. (See D.I. 447 at 19) While Defendants incorporate the SoCs into their televisions, there is no evidence that Defendants assert any control over the precise functionality of those chips. Further, unlike in SiRF , where the defendant physically possessed and controlled the servers at the time of performance of the method, Defendants here have no control over performance of the method after they sell their televisions to end users. As "there are no steps automatically performed by equipment controlled by [Defendants]," SiRF does not apply. Ericsson ,
Plaintiff argues that having no direct infringer "provides an unjust and prejudicial exemption for Defendants' infringement" and that " SiRF serves the purpose of foreclosing such unintended results." (D.I. 472 at 9) The Court is not persuaded that there must be a direct infringer in *236this case.
Thus, again, the Court will grant Defendants' motions for summary judgment of non-infringement and deny Plaintiff's motions for summary judgment of infringement.
C. Direct Infringement By Testing
Plaintiff also contends that a reasonable jury could find infringement for a small portion of the accused products based on Defendants' testing of those products in a way that practices the claimed methods. Defendants counter that Plaintiff has failed to identify evidence sufficient to prove by a preponderance of the evidence that Defendants performed tests that practiced the claimed methods in the United States. (See D.I. 418 at 31-37)
Even assuming that a reasonable factfinder could find that Defendants have performed tests practicing the claimed methods in the United States, this evidence could not support a finding of direct infringement. This is because just as Defendants' end user customers are not direct infringers (see supra n.10), so, too, Defendants are not direct infringers by virtue of those occasions on which they plug in and turn on the accused televisions and obtain an interlaced signal. Additionally, Defendants have no control over the functionality in the SoCs installed in their televisions. Accordingly, those performing the testing on the accused products do not directly infringe the asserted claims.
IV. CONCLUSION
For the foregoing reasons, Plaintiff's motions for summary judgment of infringement will be denied and Defendants' motions for summary judgment of non-infringement will be granted. The Court will confer with the parties before determining whether it must resolve any or all of the remaining motions or any other issues.
ORDER
At Wilmington, this 14th day of February, 2019 :
For the reasons set forth in the Memorandum Opinion issued this date, IT IS HEREBY ORDERED that:
1. Plaintiff's Motions for Summary Judgment of Infringement (C.A. No. 15-379 D.I. 406; C.A. No. 15-788 D.I. 334) are DENIED .
2. Defendants' Motions for Summary Judgment of Non-Infringement (C.A. No. 15-379 D.I. 416; C.A. No. 15-788 D.I. 337) are GRANTED .
*2373. The parties shall meet and confer and, no later than February 15th , submit a joint status report regarding the status of the parties' remaining claim(s) in suit, whether the Court should resolve any of the parties' remaining motions, and generally how this case should now proceed.
4. As the Memorandum Opinion was filed under seal, the parties shall meet and confer and, no later than February 15th , submit a proposed redacted version. Thereafter, the Court will issue a public version of its Memorandum Opinion.
Further docket citations will be made to the C.A. No. 15-379 docket, but apply equally to corresponding filings in the C.A. No. 15-788 action, unless specified otherwise.
The parties' Daubert motions do not impact the Court's analysis of the parties' cross-motions regarding infringement, so the Court need not first decide the Daubert motions.
The Court recognizes that the parties dispute whether each limitation of the asserted claims is met by the accused products. Indeed, both parties moved for summary judgment on precisely whether or not certain limitations are met. As a result of the Court's conclusions in this Opinion, it need not rule on those portions of the parties' motions.
As almost all of the declarations that Plaintiff relies on predate the Court's issuance of its claim construction order (see Tr. at 46), the Court struggles to understand how the declarants could know whether distinctions among versions of the source code are "material" in a manner pertinent to this case. Plaintiff's counsel admitted at the hearing "clearly, there have been revisions to the source code." (Id. at 43)
Defendants' position is that none of the SoC declarations should be admitted, but if the Court finds that the first set is admissible then the second set of SoC declarations should also be admitted for completeness. (See D.I. 418 at 27; D.I. 473 at 5 n.3)
For example, the 2017 source code has a copyright date of 2006, a last modified date of 2010, and many undated revisions in the revision history. (See D.I. 473 at 7)
See D.I. 332 at 2 (June 22, 2018 letter arguing declarations cannot substitute for trial testimony); D.I. 342 at 1-2 (July 2, 2018 letter arguing declarations are inadmissible); D.I. 418 at 2 (arguing in opening summary judgment brief that declarations are "wildly unreliable and inadmissible"); D.I. 456 at 1 (arguing in reply summary judgment brief declarations are "inadmissible hearsay"); D.I. 473 at 5 n.2 ("Defendants do not believe either set of SoC declarations should be admitted into evidence.").
Given the Court's conclusions, it is unnecessary for the Court to evaluate Defendants' additional argument that the 2017 version of source code - which post-dates the expiration of the '654 patent and post-dates the period relevant to infringement, which begins in 2009 - is irrelevant. (See D.I. 418 at 6-10)
Plaintiff's reliance on Vehicle IP, LLC v. AT & T Mobility LLC ,
Defendants' customers who purchase the accused televisions also do not control any steps of the asserted methods. Even though they may choose to use their televisions in either an infringing or non-infringing manner (by using input sources that broadcast either interlaced or progressive signals, respectively), turning the television on, changing the channel, or changing the input is not part of the claimed methods. As such, Defendants' customers neither perform nor control any steps of the claims and are not direct infringers. See SiRF ,
The Court understands that, as a result of the accompanying Order, the only remaining claim in this lawsuit is Defendants' counterclaim for declaratory judgment of invalidity of the '654 patent. (See D.I. 472 at 10; D.I. 473 at 9) The parties will be ordered to meet and confer and advise the Court as to whether this understanding is correct.
Reference
- Full Case Name
- WI-LAN INC. v. SHARP ELECTRONICS CORPORATION, Wi-LAN Inc. v. Vizio, Inc.
- Cited By
- 4 cases
- Status
- Published