Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-03561/USCOURTS-cand-4_05-cv-03561-13/pdf.json

Parties Involved:
Rackable Systems, Inc.
Counter-defendant
Super Micro Computer, Inc.
Counter-claimant

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

RACKABLE SYSTEMS, INC.,

Plaintiff, No. C 05-3561 PJH 

v. ORDER GRANTING IN PART AND 

DENYING IN PART RACKABLE’S 

MOTION FOR SUMMARY

ADJUDICATION; DENYING

SUPERMICRO’S MOTION FOR

SUMMARY JUDGMENT

 SUPER MICRO COMPUTER, INC.,

Defendant.

___________________________________/

On April 11, 2007, Rackable Systems, Inc.’s (“Rackable”) motion for summary

adjudication and Supermicro Computer, Inc.’s (“Supermicro”) motion for summary

judgment came on for hearing before the court. Defendant Supermicro appeared through

its counsel, Richard Yankwich, of DLA Piper US LLP, and plaintiff appeared through its

counsel, Eric Lamison, of Kirkland & Ellis LLP. Having read the papers filed in conjunction

with the motions and carefully considered the arguments and the relevant legal authority,

and for the reasons stated on the record, the court GRANTS IN PART AND DENIES IN

PART Rackable’s motion for summary adjudication and DENIES Supermicro’s motion for

summary judgment.

BACKGROUND

A. Factual/Procedural Background

Rackable owns two patents concerning high density computer equipment storage

systems. The patents are U.S. Patent No. 6,496,366 (“the ‘366 patent”) and U.S. Patent

Case 4:05-cv-03561-PJH Document 241 Filed 04/25/07 Page 1 of 39
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No. 6,850,408 (“the ‘408 patent”). The ‘408 patent is a continuation of the ‘366 patent, and

the two patents share the same specification.

 In October 1999, three co-inventors founded Rackable Systems LLC, the 

predecessor to Rackable. They founded Rackable to market the “back-to-back” and “front

access” storage systems that they had previously devised. Rackable Systems LLC was

subsequently acquired by the prior Rackable Systems, Inc. in January 2001. Rackable

Systems, Inc. then assigned the patents to Rackable Corporation in December 2002. 

Rackable Corporation later changed its name to the present Rackable Systems, Inc.

(“Rackable”).

 The patents’ specification describes the incentive for the inventions. 

It discusses how the inventions intended to increase the efficiency at server locations by

enabling front access to computers, for which access had previously generally been in the

rear. This, in turn, enabled the placement of the computers back-to-back, thereby

increasing the number of computers that could be racked and stored at a given facility. 

Rackable’s ‘366 patent is focused primarily on the “back-to-back” rackmounting of

computer servers, while the ‘408 patent is focused on “front access” design, enabling

access to certain components from the front of the computer.

 Rackable filed this case on September 2, 2005, against Supermicro for infringement

as to both the ‘366 and ‘408 patents. Supermicro is a competitor of Rackable, and imports

and sells servers and motherboards. Rackable contends that Supermicro recently began

importing and selling computers that violate Rackable’s patent rights.

On October 27, 2006, this court issued its order construing ten claims from the ‘366

and ‘408 patents. The court found several claims to be indefinite. It found two claims

indefinite with respect to the ‘408 patent, including the claims “front,” and “the I/O

connectors including the one or more data transmission ports and to all components

requiring intermittent access provided for the computer.” It found one claim from the ‘366

patent to be indefinite -- “components requiring intermittent physical access.”

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The court subsequently permitted the parties to file motions regarding the

implications of the indefiniteness rulings. The parties filed for hearing on January 17, 2007

six motions including: (1) Rackable’s motion to dismiss for lack of case or controversy; (2)

Supermicro’s motion for summary adjudication of its counterclaims; (3) Supermicro’s

motion for attorneys fees and/or sanctions; (4) Supermicro’s motion for summary

adjudication and/or construction of ‘366 patent claim 39; (5) Rackable’s motion for leave to

file a motion for reconsideration of the court’s Markman order; and (6) Supermicro’s motion

for leave to amend its preliminary invalidity contentions.

On January 18, 2007, the court entered a brief order following the hearing. Among

other things, the court required the parties to submit a stipulation reflecting in part the

court’s rulings at the hearing. On February 5, 2007, the court signed the parties’ stipulation

and order, which:

1. Summarily adjudicated that all claims of the ‘408 patent and certain claims

from the ‘366 patent were invalid due to indefiniteness;

2. provided that the summary adjudication would have no impact on the validity

of the remaining claims of the ‘366 patent; and

3. denied Supermicro’s motion for summary adjudication of non-infringement of

those claims summarily adjudicated invalid and dismissed Supermicro’s

counterclaim for a declaratory judgment of non-infringement of those claims

as moot without prejudice.

However, in its January 18, 2007 order, the court declined to stay the proceedings

as to the remaining ‘366 claims not covered by the stipulation, and provided that those

claims would proceed in accordance with the deadlines currently in effect at the time.

The instant motions concern the surviving ‘366 patent claims. Supermicro moves for

summary judgment as to infringement on both Rackable’s claim for infringement and on its

counterclaim for non-infringement. Rackable moves for summary adjudication as to four

issues – two pertain to prior art asserted by Supermicro, one concerns Supermicro’s

inequitable conduct defense, and the other, which concerns infringement, overlaps with

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Supermicro generally objects to what it contends is Rackable’s piecemeal MSA,

arguing that the motion presents evidentiary issues more appropriately brought as motions in

limine. It further argues that the motion is unhelpful because it does not terminate in its entirety

any claim or counterclaim in the case.

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Supermicro’s motion.1

 The court has therefore discussed the overlapping infringement

issue raised by Rackable’s motion with its discussion of Supermicro’s motion for summary

judgment.

B. ‘366 Patent

The ‘366 patent has forty-seven claims, nine of which are in independent form, 

including claims 1, 18, 23, 30, 40, 44, 46, and 47. Set forth below are the claims at issue in

the instant motions.

Independent Claim 1 recites:

A set of computers comprising:

at least one rack; and

at least two computers, each computer having a front section and a back section

located opposite each other in each of said computers, two of said computers

being placed in a back-to-back configuration of said rack;

wherein said computers and said at least one rack cooperate to define a space

between said computers and to direct air flowing into said space such that a

quantity of air sufficient to constitute a cooling flow for said computers either (1)

enters the space and exits out through the computers or (2) enters through the

computers into the space and exits out of the space.

Claim 4 recites:

The set of claim 1, wherein the front section of at least one computer extends

beyond an attachment area of said rack.

Claim 6 recites:

The set of claim 4 further comprising a bracket having an offset from the front

section of the computer to extend to at least one computer beyond the attachment

area of said rack.

Claim 8 recites:

The set of claim 1, wherein said computers are configured with at least one vent

provided at the back section of a computer and at least one vent at the front

section of the computer.

Claim 9 recites:

The set of claim 8, wherein at least one vent provided in the back section of a

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computer is provided along a rear panel.

Claim 12 recites:

The set of claim 8, wherein at least some of said computers include at least one

fan.

Claim 13 recites:

The set of claim 12, further comprising a thermal monitor adapted to increase or to

decrease air flow within a computer to reduce the effects of thermal cycling on

components.

Claim 17 recites:

The set of claim 1, wherein said space between said computers directs air flowing

into said space from said computers out of said space.

Independent Claim 23 recites:

A method of cooling computers situated in an air environment that are back-to-back

in at least one rack and having a channel for air between said back-to-back

computers comprising:

drawing a quantity of air sufficient to cool the computers from said environment

through each computer into said channel and out said at least one rack.

Claim 24 recites:

The method of claim 23, wherein the step of drawing the quantity of air sufficient to

cool the computers from said environment through each computer and into said

channel comprises providing fans in said computers adapted to draw air from said

environment through said computers.

Claim 29 recites:

The method of claim 23 further comprising the step of providing said computer

placed in the back-to-back relationship in at least one rack to define the channel for

air between the computers.

Independent Claim 30 recites:

A method of cooling computers situated in an air environment that are back-to-back

in at least one rack and having a channel for air between said back-to-back

computer comprising:

passing a quantity of air sufficient to cool the computers through each

computer without recirculation of the air, wherein the quantity of air either (1)

enters the space and flows out through the computers or (2) flows into the

computers and exits out of the space.

Claim 32 recites:

The method of claim 30, wherein the step of passing the quantity of air sufficient to

cool the computers through each computer without recirculation of air comprises 

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drawing air from said environment through each computer into said channel and 

out of the rack.

Claim 37 recites:

The method of claim 30 further comprising the step of providing said computers

placed in the back-to-back relationship in said at least one rack to define the

channel for air between the computers.

Accordingly, the only disputed terms construed by the court in its October 2006

Markman order that are relevant to the claims at issue in these motions are “front,” “rack,”

and “computer.” The court construed “front” as “a panel designed to face forward when

placed in a rack.” It construed “rack” as “a frame or cabinet for holding multiple computer

chassis,” and “computer” as “a computer that functions as a server.”

DISCUSSION

A. Summary Judgment Standard

Summary judgment is appropriate when the evidence shows there is no genuine

issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.

R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986). The court will

resolve all disputed issues of fact in favor of the non-moving party. Id. at 255. 

B. Parties’ Motions

1. Infringement

Supermicro moves for summary judgment of non-infringement on its

counterclaim for declaratory relief for non-infringement and as to Rackable’s claim for

infringement as to ‘366 patent claims 1, 4, 6, 8-9, 12-13, 17, 23-24, 29-30, 32, and 37. In

the related issue presented by Rackable’s motion, Rackable seeks summary adjudication

on one element of its inducement of infringement claim as to all of the ‘366 patent claims

listed above except claims 30 and 32.

Contrary to Supermicro’s opening papers, Rackable clarified in its opposition that it

is claiming both direct infringement by Supermicro and also infringement by inducement,

and that it is not pursuing a theory of contributory infringement. 

A. Legal Standards

A determination as to patent infringement is a two-step process. Warner-Lambert v.

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Teva Pharmaceuticals, 418 F.3d 1326, 1340 (Fed. Cir. 2005). First, the court must

construe the claims. Id. Second, the court must compare the accused product or process

to the properly construed claims. Id. The first step is a question of law and the second

step is a question of fact. Id. Infringement may be found only where the accused product

or process contains each limitation of the claim, either literally or under the doctrine of

equivalents. Id.

i. Inducement of Infringement

Title 35 U.S.C. § 271(b) states that “[w]hoever actively induces infringement of a

patent shall be liable as an infringer.” It covers the range of actions by which one may

cause, urge, encourage, or aid another to infringe a patent. Active infringement by

inducement requires direct infringement by someone other than the inducer. See, e.g.,

Epcon Gas Syst., Inc. v. Bauer Compressors, Inc., 279 F.3d 1022, 1033 (Fed. Cir. 2002). 

There can be no inducement of infringement absent direct infringement. Id.

The indirect infringement provisions, which include contributory and active

inducement of infringement, differ from the direct infringement provision, because indirect

infringement has been interpreted to require knowledge or intent on the part of an accused

infringer. In Golden Blount v. Peterson, the Federal Circuit recently confirmed that “the

only intent required of defendant is the intent to cause the acts that constitute

infringement.” 438 F.3d 1354, 1364 (Fed. Cir. 2006) (citing with approval Moba v. Diamond

Automation, 325 F.3d 1306, 1318 (Fed. Cir. 2003), and Hewlett-Packard v. Bausch &

Lomb, 909 F.2d 1464, 1469 (Fed. Cir. 1990)) (emphasis added).

Circumstantial evidence is sufficient to establish both direct infringement and

inducement of infringement. Moleculon Research Corp. v. CBS, 793 F.2d 1261, 1272

(Fed. Cir. 1986). As a general rule, “inducement of infringement under § 271(b) does not

lie when the acts of inducement occurred before there existed a patent to be infringed.” 

Nat’l Presto Indus. v. W. Bend Co., 76 F.3d 1185, 1196 (Fed. Cir. 1996).

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ii. Direct Infringement

Direct infringement occurs when “whoever without authority makes, uses, offers to

sell, or sells any patented invention, within the United States or imports into the United

States any patented invention during the term of the patent therefor.” 35 U.S.C. § 271(a). 

A patentee may prove direct infringement by either direct or circumstantial evidence. Liquid

Dynamics Corp. v. Vaughan Co., Inc., 449 F.3d 1209, 1219 (Fed. Cir. 2006) (citing

Moleculon, 793 F.2d at 1272). There is no requirement that direct evidence be introduced,

nor is a jury's preference for circumstantial evidence over direct evidence unreasonable per

se. See Fuji Photo Film Co. v. Jazz Photo Corp., 394 F.3d 1368, 1374 (Fed. Cir.2005).

B. Parties’ Arguments

i. Inducement of Infringement

Rackable claims that Supermicro is inducing direct infringement by its

customers, including Intelenet, by selling them certain Supermicro products, and then

inducing them to use the Supermicro product in a manner that infringes on Rackable’s ‘366

patent claims. 

a. Supermicro’s Motion

Supermicro argues that Rackable has only identified one direct infringer - Intelenet.

It contends that there is no evidence that Supermicro induced Intelenet to perform the

infringing acts, that there is no evidence that Intelenet has seen the materials Rackable

claims are inducing, and that no reasonable jury could find the materials inducing.

Supermicro also contends that there is no evidence tying direct infringer Intelenet to

Supermicro’s allegedly inducing materials, which it asserts include four possible sources of

inducement identified by Rackable - emails, user manuals, an SEC filing, and Supermicro’s

website. In support, it also argues that Rackable’s infringement expert, Robert Stillerman,

admitted that there was no connection between the alleged sources of inducement and

Intelenet.

Supermicro turns first to the emails, of which it claims there are four at issue. It

argues that three of the emails – which included one from Danny Le to the Supermicro

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support group, one from Vincent Wong to Richard Chen and Supermicro’s technical

support group, and one from Richard Chen to John Hui – were internal messages only, and

were not sent to third parties. Supermicro admits that the fourth email, from Simon Huang,

was sent to Supermicro customers, but argues there is no evidence that it was sent to

Intelenet or that Intelenet received it. Similarly, Supermicro argues that there is no

evidence that Intelenet ever saw Supermicro’s user manuals or guides, or that it read

Supermicro’s SEC statement. It contends that the same is true of Supermicro’s website

and the specific website pages that contain the allegedly inducing language.

Alternatively, Supermicro argues that even if Intelenet viewed the allegedly inducing

materials, no reasonable jury could find that the materials induced infringement because

more than mere advertising is required to induce infringement. It argues that the language

utilized by its website, including “density-optimized,” “double density,” and “especially

designed for space-limited applications” does not instruct customers how to assemble the

products back-to-back, but is simply promotional. Regarding its user manual, Supermicro

asserts that it similarly does not induce a back-to-back configuration. In terms of Intelenet’s

alleged direct infringement, Supermicro argues that Rackable has not produced evidence

regarding the model numbers of the allegedly infringing servers located at Intelenet.

In opposition, Rackable counters that it can prove inducement of infringement with

circumstantial evidence showing direct infringement and the related inducement. It also

argues that Supermicro has misrepresented the law regarding what materials may

evidence inducement of infringement. 

Rackable argues that it is relying on “a broad range of communications” that include

Supermicro’s promotion of back-to-back use, in addition to its technical support group’s

specific instructions for customers regarding how to use Supermicro products in a back-toback configuration. It contends that it has both direct and circumstantial evidence of

Supermicro’s inducement, including communications between Supermicro’s Sales,

Technical Support, and Engineering departments with its customers, and “unrebutted direct

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evidence of direct infringement” by Supermicro customer, Intelenet. It further points to

Supermicro’s user manuals and its SEC filings.

Regarding Supermicro’s Sales Department, Rackable points to an email from

Supermicro employee Simon Huang, that it contends actively induced an infringing use of

accused products by at least seven companies. See Casamiquela Decl. Exhs. 12, 22. 

That email was sent to more than 150 recipients at sixteen different companies, and

advised Supermicro customers that Supermicro had “another new exciting new product[],”

which allowed customers to “configure back-to-back servers.” Id. at Exh. 12. Rackable

notes that Supermicro’s damages expert, Robert Wallace, admitted that the seven

companies subsequently purchased the accused products following Huang’s email. 

Casamiquela Decl. Exh. 23; see also Exh. 9 (email from Huang to other Supermicro

executives, advising them that he received a very high customer response rate to his

customer email).

Regarding Supermicro’s technical support department, Rackable points to one of

Supermicro’s responses to “Frequently Asked Questions,” as prepared by Danny Le, a

member of the support department, and emailed to the department. See Casamiquela

Decl., Exh. 19; Exh. 25. That response noted that Supermicro’s accused products could be

mounted “back-to-back,” and explained how to mount them. See Casamiquela Decl., Exh.

19. Rackable argues that this response is circumstantial evidence that Supermicro’s

customers mounted the accused products back-to-back per its instructions.

Regarding Supermicro’s engineering department, Rackable contends that Richard

Chen, Supermicro’s lead server chassis engineer and product manager for the accused

products, also instructed Supermicro sales representatives that the accused Supermicro

products could be configured for back-to-back use. Id. at Exh. 11, at 157. Additionally,

Rackable points to an email exchange between Chen and Supermicro customer support, in

which Chen provided a specific response to a customer inquiry advising the customer

regarding “back-to-back” mounting. Id. at Exh. 28. Rackable further notes an email

response from Supermicro engineer Vincent Wong, prepared in response to an inquiry sent

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to Wong by Supermicro’s technical support department seeking in turn a response to a

customer inquiry, in which Wong set forth an explanation for the customer regarding how to

accomplish back-to-back mounting. Id. at Exh. 29 (noting that Supermicro’s product “does

support back to back mounting” and explaining how to accomplish it using a “rack mount”).

Turning to Supermicro’s user manuals, Rackable contends that Supermicro

essentially instructs customers regarding a back-to-back configuration, by explaining to

customers how to mount the accused products directly into a rack without the use of rails. 

See Casamiquela Decl., Exhs. 26, 27. Rackable argues that by instructing customers how

to install the accused product into a four-post rack without rails, Supermicro’s manuals

induce the user to directly mount the accused products in a back-to-back configuration. It

also asserts that Supermicro’s website lists mounting rails for the accused products as

“optional” equipment. As for Supermicro’s SEC filing, Rackable notes that it is not

contending that the filing itself induced infringement. 

Rackable then contends that in addition to showing inducement, the above evidence

also “broadly shows” direct infringement resulting from Supermicro’s inducement. It asserts

that Intelenet is not the only direct infringer, but that it is only one specific example. 

With respect to alleged direct infringer Intelenet, Rackable notes that Intelenet purchased

approximately 300 server units from Supermicro “built on [Supermicro’s] accused 513

model chassis.” It argues that this is sufficient circumstantial evidence that Supermicro

induced Intelenet’s direct infringement. 

In reply, Supermicro repeats many of its same arguments in its opening papers. It

first argues that even though Rackable has conceded that it is not bringing a claim for

contributory infringement, the court should enter judgment for Supermicro on the claim

because it is stated in Rackable’s complaint. Supermicro also argues generally that

Rackable has not submitted “significant probative evidence” sufficient to defeat its motion

for summary judgment. 

In terms of third party direct infringers, Supermicro asserts again that Intelenet is the

only such infringer identified by Rackable. It argues that Rackable cannot rely on other

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At the April 11, 2007 hearing, in response to the court’s inquiries on this issue, counsel

for Supermicro erroneously suggested that at least one of the internal emails, that from Le to

other members of the technical support group, responded not to a frequently asked customer

question, but instead to frequently asked questions by Supermicro employees. Casamiquela

Decl., Exh. 19. However, review of the record demonstrates that this is not the case. In his

deposition, Le attested that the response was prepared to a frequently asked customer

question. See id. at Exh. 25, at 45-46.

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third parties listed in the exhibits to a Supermicro interrogatory response because those

exhibits list every Supermicro customer who purchased the accused products, and that

Rackable can’t simply presume that these other customers are mounting servers back-toback. In sum, Supermicro contends that for purposes of this motion, there is only one

direct infringer – Intelenet.

Supermicro also clarifies that, contrary to Rackable’s assertion otherwise, it has not

conceded that Intelenet is an undisputed direct infringer. Instead, Supermicro contends

that whether or not Intelenet is a direct infringer is irrelevant to the present motion because

Rackable has not linked Intelenet to any of Supermicro’s allegedly inducing activity. In

support of its argument that there is insufficient evidence linking Intelenet with Supermicro’s

alleged inducement, Supermicro points to a chart that it has drafted, which it contends

demonstrates the insufficiencies. See Reply at 9. In essence, Supermicro argues that

Rackable cannot link Intelenet to Supermicro via the alleged emails because they were

internal in nature.2

 It asserts that there is no evidence that the only non-internal marketing

email, from Supermicro employee Huang to customers, was received by Intelenet. In

terms of customer email inquiries received by Supermicro, Supermicro asserts that none of

the emails cited by Rackable were from Intelenet. 

Turning to its user manuals, Supermicro reiterates its original argument that the

manuals do not mention “back-to-back” mounting; nor do they discuss mounting more than

one column of units in a rack. It asserts that Rackable’s argument that the manual’s

references to offset mounting and optional rail kits induced infringement fails because those

elements appeared in prior art. 

b. Rackable’s Motion

In its motion, Rackable seeks summary adjudication on only one element of its

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inducement of infringement claim, that of direct infringement by third party Intelenet.

Rackable argues that is able to prove by a preponderance of the evidence that Intelenet’s

installation of the accused Supermicro products directly infringes on the subject ‘366 patent

claims. In support, it relies on its expert Stillerman’s opinion. Ostapuk Decl., Exh. T at 6-7,

8, Exhs. B-E. It further argues that Supermicro’s expert Sam Wood conceded that he had

no basis to dispute Stillerman’s opinion. Ostapuk Decl, Exh. L at 73-75, 77-78. 

Accordingly, Rackable argues that Supermicro is unable to rebut Rackable’s showing of

direct infringement by Intelenet.

In opposition, Supermicro asserts that triable issues of fact exist regarding

Intelenet’s alleged direct infringement. First, it argues that Rackable should be precluded

from pursuing a theory of infringement based on Intelenet’s activities because it did not

identify Intelenet in its Preliminary Infringement Contentions (“PIC”). Additionally,

Supermicro argues that the court should resist making “an interlocutory factual finding of

direct infringement” by Intelenet because it would not narrow the scope of any claims or

counterclaims in this case.

As for the merits, Supermicro argues that Rackable’s evidentiary basis for summary

adjudication consists of Stillerman’s expert report, Stillerman’s subsequent visit to Intelenet,

and testing conducted by Stillerman. It notes that Rackable failed to depose any Intelenet

employees, and argues that it lacks a sufficient evidentiary basis for the finding it seeks. 

Specifically, Supermicro argues that Rackable has not provided any evidence that

Intelenet’s infringing units included “computers that functioned as a server,” per this court’s

Markman ruling. Moreover, it argues that Stillerman’s failure to determine which specific

Supermicro products were installed at Intelenet precludes summary adjudication of the

issue.

In reply, Rackable argues that it was not required list all evidentiary support in its

PIC under Patent L.R. 3-1, and that the Intelenet evidence was properly developed in

discovery. It asserts that its current argument regarding Intelenet is not a change in its

theory on the inducement of infringement claim. Rackable notes that contrary to

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Supermicro’s argument, its expert Stillerman did indeed identify the accused Supermicro

products and model numbers used in an infringing manner by Intelenet. Ostapuk Decl.,

Exh. T, at pars. 3, 7, 11, 23, 29-30; Exh. B. It argues that the photographs relied on by

Stillerman plainly show Supermicro logos on servers used by Intelenet. Ostapuk Reply

Decl., Exh. J & K. 

ii. Direct Infringement

In its opening papers, Supermicro simply asserts that Rackable has dropped its case

for direct infringement. However, as noted above, that is not the case.

In opposition, Rackable argues that Supermicro’s use of computers mounted backto-back in its testing facility for the accused product demonstrates direct infringement, and

cites to a photograph that evidences such mounting, see Yankich Reply Decl., Exh. 2;

deposition testimony from Henry Kung, a Supermicro employee who testified that the

photograph showed the rackmounting of Supermicro’s server; and Supermicro emails that

suggest that the mounted servers shown in the photograph were under testing. See

Casamiquela Decl., Exh. 11 at 90:6-91:4 (Chen testimony); Exh. 8 at 196:16-19 (Kung

testimony); Exh. 47 (Supermicro emails). Rackable further argues that there is strong

circumstantial evidence that Supermicro’s engineers in fact mounted the accused products

in a back-to-back configuration and that they told technical support staff and customers that

they could be mounted that way.

In reply, Supermicro first argues that Rackable cannot utilize the test report to show

direct infringement because it did not rely on it in its PIC, and cites to Federal Rule of Civil

Procedure 37(c). Supermicro nevertheless argues that the photograph relied on by

Rackable does not indicate back-to-back mounting, and therefore cannot create a triable

issue of material fact. Supermicro further counters that Rackable’s reliance on the

circumstantial evidence of direct infringement is too speculative to proceed to trial.

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C. Analysis

i. Inducement of Infringement Claim

As noted above, in order to prove that a defendant induced infringement under 35

U.S.C. § 271(b), a plaintiff must show that the defendant took actions that actually induced

direct infringement by another, and that the defendant knew or should have known that

such actions would induce infringement. See Golden Blount, 365 F.3d at 1061. 

Additionally, a defendant’s liability for indirect infringement must relate to the identified

instances of direct infringement. See Dynacore Holdings Corp. v. U.S. Phillips Corp., 363

F.3d 1263, 1274-75 (Fed. Cir. 2004). 

a. Existence of Third Party Direct Infringer

The Federal Circuit has held that with inducement of infringement claims, a patent

holder may either identify individual acts of direct infringement, or an entire category of

infringers (e.g., a defendant’s customers). Dynacore, 363 F.3d at 1274-75. “Plaintiffs who

identify individual acts of direct infringement must restrict their theories of vicarious liability

and tie their claims for damages or injunctive relief to the identified act.” Id. On the other

hand, “[p]laintiffs who identify an entire category of infringers (e.g., the defendant’s

customers) may cast their theories of vicarious liability more broadly, and may

consequently seek damages or injunctions across the entire category.” Id.

Where a plaintiff identifies a category of infringers, such as customers, the courts

generally do not require that the customers be specifically identified. See Metabolite

Laboratories v. Laboratory Corp. of America, 370 F.3d 1354, 1364-65 (Fed. Cir. 2004)

(affirming district court’s denial of judgment as a matter of law (“JMOL”) of no infringement,

and concluding that there was sufficient evidence of direct infringement by third party

doctors and that plaintiff patentee was not required to show which specific doctors directly

infringed method patent claims); but see E-Pass Technologies, Inc. v. 3Com Corp., 473

F.3d 1213, 1222-23 (Fed Cir. 2007) (implying that in order to successfully make out an

inducement of infringement claim based on direct infringement by a defendant’s customers,

the plaintiff should be able to point to at least one end user that infringed).

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Here, Rackable has identified both a specific infringer, Intelenet, and a category of

infringers, Supermicro’s customers, which includes Intelenet. It is not entirely clear to the

court whether in naming Intelenet, Rackable intended to assert an individual act of

infringement, or simply, in accordance with the Federal Circuit’s recent decision in E-Pass,

intended to provide one example of a direct infringer from its customer category. 

Rackable’s theory as to Intelenet affects the type of proof required, as discussed below. 

See Dynacore, 363 F.3d at 1274.

However, regardless of the theory Rackable intends to advance with respect to

Intelenet, Rackable has sufficiently identified its third party direct infringers as required by

Federal Circuit law.

b. Evidence of Supermicro’s Inducement and Intent to Induce

Infringement

Numerous cases find active inducement where a defendant selling products

capable of either innocent or infringing use, as Supermicro is accused of doing, provides

through labels, advertising or other sales methods, instructions and directions as to the

infringing use. See 5 Chisum on Patents § 17.04[4][f]; Biotec v. Biocorp, 249 F.3d 1341

(Fed. Cir. 2001); Mentor HS v. Medical Device Alliance, Inc. 244 F.3d 1365 (Fed. Cir.

2001). In Chiuminatta Concrete Concepts v. Cardinal Industry, the Federal Circuit held that

the district court correctly granted summary judgment based on its finding that, by

advertising and selling a rotary saw for cutting concrete, an accused infringer actively

induced infringement of a patent claim that required cutting concrete at a specified stage of

hardening. 145 F.3d 1303, 1307 (Fed. Cir. 1998). The advertisements in that case

suggested cutting the concrete with the accused saw at a stage earlier than the stage

required by the claim, but then also encouraged use at later stages that fell within the claim. 

Id.

In terms of inducement, the court finds that there is a genuine issue of material fact

whether Supermicro induced its customers to utilize its products in a back-to-back

configuration that may infringe on the ‘366 patent claims. Although Supermicro has argued

that the emails were internal, thus suggesting that its customers never received the

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inducing instructions, there is sufficient circumstantial evidence that Supermicro customers

did in fact receive the inducing materials and instructions. First, Huang’s email was

undisputedly sent to Supermicro customers, and there is direct evidence that some

customers received it and responded to it. Second, Le’s deposition testimony established

that the response he prepared to “Frequently Asked Questions” was in response to

customer inquiries and was prepared with the intention that it be distributed to customers. 

Third, lead engineers Chen and Wong both responded to direct customer inquiries via their

internal emails to the technical support department. Finally, Supermicro’s own expert

admitted that seven customers listed in Huang’s email purchased the accused Supermicro

product. Moreover, it is worth noting that Supermicro does not dispute the substance or the

authenticity of the emails, which contained instructions that are sufficient to raise a triable

issue of fact as to inducement. 

As noted above, the Federal Circuit recently confirmed that “the only intent required

of defendant is the intent to cause the acts that constitute infringement.” Golden Blount,

438 F.3d at 1364. The requisite intent to induce may be inferred from all of the

circumstances, such as giving a direct infringer instructions on how to use a patented

process or designing a product to infringe. Apple Computer v. Articulate Systems, Inc., 991

F.Supp. 1189, 1191 (N.D. Cal. 1997); see also Sharper Image v. Target, 425 F.Supp.2d

1056, 1066 (N.D. Cal. 2005) (defendants’ sales of accused product in combination with

instruction manuals constituted some evidence of knowing intent to induce infringement

sufficient to defeat defendant’s motion for summary judgment). There is no dispute that

Supermicro intended to issue the instructions and emails that underlie this claim.

c. required link between the inducement and the direct

infringement

i. Customer Category

The court looks first at the customer category, which includes Intelenet, asserted by

Rackable in support of its inducement of infringement claim. Supermicro suggests that

Rackable has failed to offer evidence of direct infringement by Supermicro customers other

than Intelenet. However, Rackable was not required to do so. Direct infringement by a

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customer group may be inferred where the instructional materials teach an infringing

configuration. See Golden Blount, 438 F.3d at 1363 (holding that where court was able to

conclude that the instruction sheet taught an infringing method regarding fireplace burner

assembly, that was sufficient circumstantial evidence to prove direct infringement by the

third party customer end-users); see also Sharper Image, 425 F.Supp.2d at 1065-66

(holding that where evidence of an owner’s guide produced by the defendant instructed

users how to clean an air purifier in a manner that infringed upon the plaintiff’s patent, there

was sufficient circumstantial evidence of both inducement and of the fact that “at least

some customers did follow the instructions”). 

Even if this court was not inclined to make the inferential leap based on the inducing

materials themselves, there is nevertheless additional evidence creating a triable issue of

fact that Supermicro’s customers did in fact infringe on the ‘366 patent. First, Rackable has

pointed to circumstantial evidence in the form of deposition testimony from a member of

Supermicro’s sales department that suggests that its customers did in fact follow

Supermicro’s instructions regarding back-to-back rackmounting. See Casamiquela Decl.,

Exh. 25 at 77-78. Second, there is photographic evidence, in addition to expert testimony,

that Intelenet, a Supermicro customer, installed Supermicro products in a manner that

infringed on the ‘366 patent. See Ostapuk Decl., Exh. T.

ii. Intelenet

As discussed above, although its theory is not entirely clear, it also appears that

Rackable intends to base its inducement of infringement claim on an identifiable individual

act of direct infringement by Intelenet. That this is an alternative or additional theory for

Rackable’s claim is further supported by the fact that Rackable has actually moved for

summary adjudication as to Intelenet’s direct infringement. In support of that motion,

Rackable offered an unrebutted expert opinion supported by photos and related reports

that Intelenet directly infringed on its patent. See Ostapuk Decl. at Exhs. L, T, and U. 

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As noted above, where a plaintiff, such as Rackable, “identif[ies] individual acts of

direct infringement, [it] must restrict [its] theories of vicarious liability and tie [its] claims for

damages or injunctive relief to the identified act.” Dynacore, 363 F.3d at 1274-75.

For purposes of Supermicro’s motion, the question is whether there is a triable issue

of fact as to the link between Supermicro’s inducement and Intelenet’s alleged act of

infringement (as demonstrated by the photograph at Ostapuk Decl., Exh. T). Although

Rackable has not pointed to direct evidence demonstrating that Intelenet actually received

the inducing materials themselves, given the fact that Intelenet was undisputedly a

Supermicro customer, and the evidence of Supermicro’s inducement of its customers

generally, it can be inferred for purposes of Supermicro’s motion that Intelenet received

inducing materials similar to those received by other Supermicro customers. Additionally,

there is further circumstantial evidence that Intelenet received Supermicro’s inducing

materials, and followed the instructions contained therein, given the photograph taken at

Intelenet’s facility demonstrating Supermicro computers stacked in a back-to-back

configuration. For these reasons, the court concludes that there is a triable issue of fact

regarding the link between Supermicro’s inducing activities and Intelenet’s alleged direct

infringement. 

However, turning to Rackable’s motion, the inquiry is different since Rackable

actually seeks summary adjudication that Intelenet directly infringed upon its patent for

purposes of this claim. The court declines to parse out the claim to the extent sought by

Rackable. Having concluded that a triable issue of fact exists on the link with Intelenet, and

that the inducement of infringement claim will go to trial, and given the repercussions of

such a finding on a third party, the court makes no finding on this additional single element

of the claim. 

For all of the above reasons, the court DENIES Supermicro’s motion for summary

judgment as to the inducement of infringement claim, both as it pertains to Supermicro

customers and specifically to Intelenet, and also DENIES Rackable’s related motion for

summary adjudication as to one element of the claim.

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ii. Direct Infringement Claim 

The briefing on this issue was scant, at best. However, the court concludes that

based on the evidence before it, a triable issue of fact exists as to Supermicro’s direct

infringement. Additionally, the court denies Supermicro’s Rule 37 objection to Rackable’s

arguments and evidence since the issue was raised in its reply brief, and no formal motion

was or has been filed.

The court further notes that experimentation and testing may be exceptions to

infringement of a patent as long as they are de minimus and NOT for a commercial

purpose. See Embrex, Inc. v. Service Engineering Corp., 216 F.3d 1343, 1349 (Fed. Cir.

2000) (defendants’ tests on infringing machines constituted infringement where the

defendants “performed the tests expressly for commercial purposes”). Here, Supermicro

has not disputed that the testing depicted in the photograph submitted by Rackable was not

for a commercial purpose. Accordingly, it does not appear to qualify as an exception to

infringement. 

For these reasons, Supermicro’s motion for summary judgment as to the direct

infringement claim is DENIED.

iii. Contributory Infringement

Because Rackable has conceded that it is not bringing a claim for contributory

infringement, and for the reasons stated on the record, this claim is DISMISSED.

2. Enforceability

Rackable moves for summary adjudication as to Supermicro’s unenforceability

counterclaim, to the extent that it is based on Rackable’s alleged inequitable conduct. 

Supermicro clarified in its opposition that its counterclaim is based on two instances of

inequitable conduct, rather than four as anticipated by Rackable, which include: (1)

Rackable’s failure to identify print and copyright dates for Cobalt Raq 2, 3, and 4

datasheets in the Information Disclosure Statement (“IDS”) submitted by Rackable to the

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Supermicro noted that it is no longer pursuing a claim of inequitable conduct based on

Rackable’s failure to submit the Koike patent to the USPTO, or its failure to disclose to the

USPTO commercially available computer racks with removable sidewalls. Therefore, the court

limits its discussion to the two items listed above.

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United States Patent & Trademark Office (“USPTO”); and (2) Rackable’s failure to disclose

the Cobalt Raq 1 datasheet to the USPTO.3

A. Legal Standards

A patent may be rendered unenforceable for inequitable conduct if an applicant, with

intent to mislead or deceive the examiner, fails to disclose material information or submits

materially false information to the USPTO during prosecution. Digital Control Inc. v.

Charles Machine Works, 437 F.3d 1309, 1313 (Fed. Cir. 2006). The party asserting

inequitable conduct must prove a threshold level of materiality and intent by clear and

convincing evidence. Id. 

To prove that a patent is unenforceable due to inequitable conduct, the alleged

infringer must provide clear and convincing evidence of (1) affirmative misrepresentations

of a material fact, failure to disclose material information, or submission of false material

information, and (2) an intent to deceive. Impax Laboratories, Inc. v. Aventis

Pharmaceuticals, Inc., 468 F.3d 1366 (Fed. Cir. 2006).

Information is material to patentability when it is not cumulative to information

already of record or being made of record in the application, and: (1) it established by itself

or in combination with other information, a prima facie case of unpatentability; or (2) it

refutes, or is inconsistent with, a position the applicant takes either in opposing an

argument of unpatentability relied on by the office, or in asserting an argument of

unpatentability. Id. Additionally, the Federal Circuit recently affirmed that what had

previously been referred to as the “reasonable examiner” standard for materiality, may also

be utilized by a court in determining materiality. Id. at 1374. Under that standard, an

omission or misstatement is material “if a reasonable examiner would have considered

such [information] important in deciding whether to allow the patent application.” Id.

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To satisfy the intent to deceive element of inequitable conduct, “the involved

conduct, viewed in light of all the evidence, including evidence indicative of good faith, must

indicate sufficient culpability to require a finding of intent to deceive.” Id. (quoting

Kingsdown Med. Consultants, Ltd. v. Hollister, 863 F.2d 867, 876 (Fed. Cir. 1988)). “Intent

need not, and rarely can be proven by direct evidence.” Id. Rather, intent to deceive is

generally inferred from the facts and circumstances surrounding the applicant’s overall

conduct. Id. Furthermore, under the “reasonable examiner” standard, a misstatement or

omission may be material even if disclosure of that misstatement or omission would not

have rendered the invention unpatentable. Digital Control, 437 F.3d at 1318.

If the court finds materiality and intent, it “must balance the equities to determine

whether the patentee has committed inequitable conduct that warrants holding the patent

unenforceable.” Id. (quoting Monsanto Co. v. Bayer Bioscience N.V., 363 F.3d 1235, 1239

(Fed. Cir. 2004)). The more material the omission or misrepresentation, the less intent that

must be shown to elicit a finding of inequitable conduct. Id. If inequitable conduct occurred

with respect to one or more claims of an application, the entire patent is unenforceable. Id.

Determining at summary judgment that a patent is unenforceable for inequitable

conduct is permissible, but uncommon. Digital Control, 437 F.3d at 1313. “A genuine

issue of material fact is not raised by the submission of ‘merely conclusory statements or

completely unsupportable, specious, or conflicting explanations or excuses.’” Id. (quoting

Monsanto, 363 F.3d at 1240). The Federal Circuit has upheld a district court’s grant of

summary judgment on inequitable conduct where “the affidavits submitted to explain the

representations made to the USPTO were bare declarations of lack of intent to mislead and

the explanations provided in the affidavits were either nonresponsive or lacked evidentiary

support.” Id. (citations omitted). However, the court has refused summary judgment where

the plaintiff submitted an affidavit that “set forth a non-frivolous explanation that could lead

a finder of fact to determine that this declaration to the USPTO was not false or misleading

or where the plaintiff stated facts supporting a plausible justification or excuse for the

misrepresentation.” Id.

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B. Parties’ Arguments

i. Rackable’s Information Disclosure Statement

Frank Becking served as Rackable’s patent prosecution counsel at the time of

Rackable’s patent application. He hired a prior art firm to search for potentially relevant art,

and disclosed in Rackable’s December 4, 2000 IDS filed with the USPTO, the art located

by the search firm and that located through internet and newspaper reviews. See Ostapuk

Decl., Exh. K. Items 18, 19, and 20 of the IDS listed the Cobalt Raq 2, 3, and 4 datasheets. 

See id. Becking also identified the website links where the datasheets could be found, and

noted on the IDS that the links were “visited on November 27, 2000.” See id. He also

submitted the actual data sheets to the USPTO. See id. at 7-12. The datasheets

themselves specified copyright and print dates, including a 1999 copyright and print date

for the Cobalt Raq 2 datasheet, and 2000 copyright and print dates for the Cobalt Raq 3

and Raq 4 datasheets. See id. at 8 (Cobalt Raq 2), 9 (Cobalt Raq 3), 12 (Cobalt Raq 4).

 Supermicro argues that Becking should have disclosed specifically in the IDS the

copyright and print dates on the datasheets, which ranged from one to two years prior to

the date of Becking’s visit to the website, and cites to 37 C.F.R. § 1.56 regarding a

patentee’s duty to disclose information material to patentability. Supermicro contends that

the copyright and print dates for the Cobalt Raq 2 data sheet were highly material given the

fact that the datasheet disclosed installing Cobalt Raq 2 servers on both sides of a rack -

the novel feature claimed in Rackable’s ‘366 patent. It argues that disclosure of the dates

was also required by 37 C.F.R. § 1.98 because the dates established that the invention

was known prior to the filing of the ‘366 patent application. 

Moreover, Supermicro contends that if Rackable had properly disclosed the date in

its IDS, then the patent examiner could have researched the Cobalt company. It contends

that although the USPTO had the datasheets themselves, the font size of the copyright and

print dates was too small to put the examiner on notice of those dates. Supermicro further

asserts that there is sufficient evidence of Becking’s intent to deceive the USPTO since

Becking admitted that he knowingly chose to omit the copyright and print dates, see

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Corbett Decl., Exh. A at 109:5-8, and argues that Becking’s “huddling with other attorneys

at his office” further demonstrates such intent.

Rackable, on the other hand, argues that Becking’s use of the November 27, 2000

website visit as the “publication” date on the IDS was appropriate pursuant to patent law,

which requires disclosure of the “publication” rather than the “print” date. It asserts that the

1999 print date on the Cobalt datasheets was not necessarily a “publication” date because

there was nothing to demonstrate that the documents were actually publicly disseminated

as of those dates. Rackable further notes that the examiner had the datasheets

themselves, and that the examiner’s initials on the datasheets demonstrates that s/he

considered them and the print dates therein. Ostapuk Decl., Exh. K.

Rackable also argues that there was no intent to deceive on Becking’s part because he

listed the datasheets and their dates in good faith after consultation with other attorneys.

ii. Cobalt Raq 1 Datasheet

Supermicro also argues that because Becking, Rackable’s prosecution counsel,

knew about the Cobalt Raq 2, 3, and 4 datasheets, he should have known and disclosed

another datasheet – the Cobalt Raq 1 datasheet. Ostapuk Decl, Exh. Q; see also Exhs. 1,

Seelig and Mehra Decls. Supermicro’s counsel discovered the Cobalt Raq 1 datasheet on

a third party website in 2006. Supermicro’s argument is that since Becking knew about the

existence of Cobalt datasheets with revision numbers 2, 3, and 4, he should have known

that a product corresponding to revision 1 existed.

In its opening brief, Rackable notes that Supermicro’s expert, Wood, admitted in his

deposition that there was no evidence that Becking or others knew of the Cobalt Raq 1

datasheet. Ostapuk Decl, Exh. L at 245-54; Exh. N. In fact, Rackable notes that Wood

admitted that the internet archive for Cobalt’s website suggested that website page did not

contain the subject datasheet as of Becking’s November 27, 2000 visit to the website. See

id. It further argues that there is no evidence that any inventor knew of the datasheet. 

Ostapuk Decl., Exh. H at 74-5, 91-2; Exh G at 126-28; Exh. C at 159-60. Rackable also

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contends that patent law requires that an applicant or its counsel actually know of the

withheld prior art before there is an obligation to disclose it.

In opposition, Supermicro’s again argues that there is a genuine issue of material

fact as to whether Becking knew or should have known about the datasheet.

In reply, Rackable reiterates that as a matter of law, Supermicro’s “should have

known” standard is wrong, and that Supermicro also has not shown any intent to deceive

on Becking’s part.

C. Analysis

The parties seem to disagree regarding the applicable legal standards to apply to

Supermicro’s inequitable conduct defense, which forms the basis of its unenforceability

counterclaim, but neither explains coherently what the issue is or the significance of their

alleged disagreement. In its opposition, Supermicro argues that Rackable improperly

deviates to a “fraud” standard, and that although inequitable conduct is sometimes referred

to as “fraud on the patent office,” fraud and inequitable conduct are not synonymous. It is

not clear whether Supermicro is arguing that the case law regarding inequitable conduct

that Rackable relies on is the wrong case law, or that Rackable misrepresents the case

law. In any event, the court has undertaken its own review of the case law, and has set

forth the general legal standards regarding inequitable conduct above, and will apply

Federal Circuit law regarding inequitable conduct to the pertinent issues raised by

Rackable’s motion. Again, as with the infringement claim, although the parties have not

done so, the court analyzes the issues based on the required elements for inequitable

conduct, as set forth by the Federal Circuit.

i. Omission/Misrepresentation

Supermicro has pointed to two omissions and/or misrepresentations by Rackable in

support of its counterclaim. The first - regarding the Cobalt Raq 2, 3, and 4 datasheets’

print and copyright dates - appears to be both an alleged omission and a

misrepresentation. It is an omission in the sense that Supermicro contends that Becking

should have provided the copyright dates; and it is a misstatement to the extent that

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Supermicro contends that Becking provided the wrong date(s). The second, which

concerns Becking’s failure to disclose the Cobalt Raq 1 datasheet, constitutes an omission

as opposed to a misrepresentation since there is no dispute that the datasheet was not

disclosed. 

The Federal Circuit has held that affirmative misrepresentations, in contrast to

misleading omissions, are more likely to be regarded as material. Digital Control, 437 F.3d

at 1318. Additionally, the court has held with that where a defendant alleges a material

omission, “there must be clear and convincing evidence that the applicant made the

deliberate decision to withhold a known material reference.” Id. (quoting Baxter Int’l Inc. v.

McGaw, 149 F.3d 1321, 1327 (Fed. Cir. 1998)).

Here, Supermicro has pointed to evidence that Becking was aware of the first

omission regarding the Cobalt Raq 2, 3, and 4 datasheets’ copyright dates, but that

Becking nevertheless chose not to include the information on Rackable’s IDS. However,

regarding the undisclosed Cobalt Raq 1 datasheet, Supermicro has not pointed to any

evidence that Becking and/or Rackable were aware of the datasheet, let alone that he

made a deliberate decision to withhold it, as required by the law, for its inequitable conduct

defense. 

Because the Federal Circuit requires a “deliberate decision” in connection with an

alleged omission and there is no evidence that Becking made such a decision to omit

information regarding the Cobalt Raq 1 datasheet, the court GRANTS Rackable’s motion

regarding Supermicro’s unenforceability counterclaim as it pertains to the Cobalt Raq 1

datasheet. 

However, it is necessary for the court to proceed further with its inquiry regarding

Becking’s alleged omission and/or misstatement of the appropriate dates for the Cobalt

Raq 2, 3, and 4 datasheets.

ii. Materiality

Turning to the issue of materiality, Supermicro points to 37 C.F.R. section 1.56

(regarding duty of candor generally) and also to section 1.98(b)(5) in support of its

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argument that the copyright and print dates on the Cobalt Raq 2, 3, and 4 datasheets were

material and should have been disclosed. Section 1.98(b) requires that “[e]ach publication

listed in an [IDS] must be identified by publisher, author (if any), title, relevant pages of the

publication, date, and place of the publication.” (emphasis added.)

 As noted above, the parties disagree regarding whether the copyright and print

dates constituted “publication” dates for purposes of the applicable regulations. However, it

is not necessary for the court to resolve that issue because summary adjudication is

appropriate on other grounds.

Information that is withheld from the USPTO “is not material for the purposes of

inequitable conduct if it is merely cumulative to that information considered by the

examiner.” Digital Control, 437 F.3d at 1319. There is no dispute that the copyright and

print dates were in fact disclosed on the Cobalt Raq 2, 3, and 4 datasheets themselves,

which were provided to the USPTO with the IDS. The fact that the dates were in a small

font on the documents does not render the information “withheld” or “undisclosed.” While

the court certainly appreciates the difficulty associated with small print, it was readily able to

discern the copyright information from the photocopied exhibits submitted to it, and is not

persuaded that the size of the print prevented notice to the USPTO of the date information.

Accordingly, because Rackable submitted the datasheets, which themselves

contained the dates at issue, any additional disclosure of the dates on the IDS would have

been cumulative, and thus cannot be considered material. See Digital Control, 437 F.3d at

1319. The court therefore also GRANTS Rackable’s motion with respect to Supermicro’s

unenforceability counterclaim in so far as it concerns the copyright and print dates for the

Cobalt Raq 2, 3, and 4 datasheets. 

3. Invalidity

Rackable also moves for summary adjudication as to Supermicro’s invalidity

counterclaim, in so far as Supermicro contends that the ‘366 patent is invalid because the

Cobalt Raq 1 datasheet, discussed above, and the Cobalt Raq device constitute prior art. 

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The parties have not done a particularly good job of explaining either the device or

the datasheet in their papers. The Cobalt Raq 1 datasheet, which was located by

Supermicro’s counsel in a 2006 search on the Internet, in turn, describes the Cobalt device

(also referred to by the parties as the Cobalt “product” or “Raq”). The datasheet describes

the Cobalt Raq device as follows:

Cobalt RaQ microservers, from Cobalt Networks, Inc., deliver a full suite of

Internet services with remote administration capabilities - packaged in a

single rack unit height, industry standard enclosure.

See Ostapuk Decl., Exh. Q; Seelig and Mehra Decls., Exh. 1. It contains a print date of

“7/98" and a copyright date of 1998. Id. Former Cobalt employees, including the Raq

inventor, describe the Raq as “a server.” See Ostapuk Decl., Exh. M at 13.

A. Legal Standards

 A patent is entitled to a presumption of validity, and an accused infringer must prove

invalidity by clear and convincing evidence. Metabolite Labs., Inc. v. Lab. Corp., 370 F.3d

1354, 1365 (Fed. Cir. 2004). The relevant statute, 35 U.S.C. § 102, provides in pertinent

part:

A person shall be entitled to a patent unless –

(a) the invention was known or used by others in this country, or patented or

described in a printed publication in this or a foreign country, before the

invention thereof by the applicant for patent, or

(b) the invention was patented or described in a printed publication in this or a

foreign country or in public use or on sale in this country, more than one year

prior to the date of the application for patent in the United States.

Section 102(a) establishes that a person cannot patent what was already known to

others. Woodland Trust v. Flowertree Nursery, 148 F.3d 1368, 1370 (Fed. Cir. 1998). If

the invention was known to or used by others in this country before the date of the

patentee’s invention, the later inventor has not contributed to the store of knowledge, and is

not entitled to a patent. Id. Thus, under section 102(a), prior knowledge or use by others

may invalidate a patent if the prior knowledge or use was accessible to the public.

In comparison, section 102(b) establishes a one-year grace period based on

publication or public use or sale, after which an inventor is barred from access to the patent

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system. Id. Unlike section 102(a), section 102(b) “is primarily concerned with the policy

that encourages an inventor to enter the patent system promptly, while recognizing a one

year period of public knowledge or use or commercial exploitation before the patent must

be filed.” Id. “Thus an inventor’s own prior commercial use, albeit kept secret, may

constitute a public use or sale under section 102(b), barring him from obtaining a patent.” 

Id. However, when an asserted prior use is not that of the patent applicant, section 102(b)

is not a bar when that prior use or knowledge is not available to the public. Id. at 1371.

To invalidate patent claims based on prior art, the challenger to the patent must

show by clear and convincing evidence that the earlier invention is prior art under section

102, and that the earlier invention includes all elements of the claims at issue. Metabolite

Labs., 370 F.3d at 1365, 1367; Netscape Comm. Corp. v. Konrad, 295 F.3d 1315, 1320

(Fed. Cir. 2002). 

To anticipate under either section 102(a) or section 102(b), a single prior art

reference must disclose every limitation of the claimed invention. See Schering Corp. v.

Geneva Pharmaceuticals, 339 F.3d 1373, 1377 (Fed. Cir. 2003) (citing Lewmar Mar., Inc.

v. Barient, Inc., 827 F.2d 744, 747 (Fed. Cir. 1987)). Furthermore, such disclosure must be

"enabling" – i.e., it must be sufficient to permit a person having ordinary skill in the art to

practice the invention. SmithKline Beecham Corp. v. Apotex Corp., 403 F.3d 1331, 1342

(Fed. Cir. 2005) (quoting Minnesota Min. & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294,

1301 (Fed. Cir. 2002)).

 Anticipation is a question of fact, SmithKline, 403 F.3d at 1343, and the

determination of whether a prior art reference is enabling "is a question of law based upon

underlying factual findings.” Crown Operations Int'l v. Solutia, 289 F.3d 1367, 1376 (Fed.

Cir. 2002). "However, without genuine factual disputes underlying the anticipation inquiry,

the issue is ripe for judgment as a matter of law." SmithKline, 403 F.3d at 1343. The

burden of proof in all instances falls upon the party seeking to establish the invalidity of a

patent claim, who "must overcome the presumption of validity in 35 U.S.C. § 282 by clear

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and convincing evidence." State Contracting & Eng'g Corp. v. Condotte Am., Inc., 346 F.3d

1057, 1067 (Fed. Cir. 2003).

For prior art to anticipate a patent under section 102(a), the knowledge must be

publicly known and sufficient to enable one of ordinary skill in the art to practice the

invention. Minnesota Mining, 303 F.3d at 1301. Public use under section 102(b) includes

any use of the claimed invention by a person other than the inventor who is under no

limitation, restriction, or obligation of secrecy to the inventor. Id. at 1301.

B. Parties’ Arguments

i. Cobalt Raq 1 Datasheet

At the outset, it is important to note that Supermicro clarified that its position is that

the datasheet is prior art under 35 U.S.C. §§ 102(a) and 102(b) – but not § 102(g), and that 

the datasheet anticipates the asserted ‘366 patent claims. Thus, the court need not

address Rackable’s arguments in its opening motion papers regarding § 102(g). 

In its opening papers, Rackable argues that the datasheet cannot constitute prior art

under § 102(a) because Supermicro cannot prove that it was publicly disseminated, and

because, even if it was publicly disseminated, there is no evidence that it was disseminated

prior to Rackable’s patent. Rackable cites to a district court decision for the proposition that

“a self-affixed copyright or print date does not show when the document was publicly

disseminated and accessible to one of skill in the art.” Hilgraeve v. Symantec, 271

F.Supp.2d 964, 975 (E.D. Mich. 2003). In support of its argument regarding public

dissemination, Rackable also cites to deposition testimony from Glenn Henriquez, a former

engineer for Cobalt, and also the Cobalt Raq inventor, who testified that he did not know

exactly when or whether the datasheet was publicly disseminated, and to deposition

testimony from Supermicro’s expert, Wood. Ostapuk Decl., Ex. M at 23; Exh. L at 239-45.

As for § 102(b), Rackable notes that since the publication of the datasheet was by a

third party, Cobalt, the publication, use, or sale, must be available to the public. See

Woodland Trust, 148 F.3d at 1371. For the same reasons that it argued that Supermicro

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cannot establish public dissemination under § 102(a), Rackable also argues that

Supermicro cannot establish public dissemination under § 102(b).

Rackable also argues that in addition to not qualifying as prior art, Supermicro

cannot assert the datasheet as anticipating, because the datasheet lacks many elements of

the ‘366 patent’s independent claims. Rackable contends that contrary to the independent

claims of the ‘366 patent, the datasheet makes no reference to back-to-back use of the Raq

devices or the required airflow. Ostapuk Decl., Exh. Q; Exh. L at 256-59, 262-63. In

support, Rackable asserts that Henriquez, the Cobalt Raq designer, testified that he had

never heard of nor seen the Raq used in a back-to-back fashion, and that he did not

understand the datasheet’s references regarding placement. Ostapuk Decl., Exh. M at 36-

37.

In opposition, Supermicro counters that the Cobalt Raq 1 datasheet was made

available to the public in July 1998 in accordance with its copyright date - and prior to the

priority date of Rackable’s patent, and therefore constitutes prior art. In support,

Supermicro cites to declarations from Cobalt’s Director of Marketing, Kelly Seelig, and its

co-founder, Vivek Mehra. It also cites to Henriquez’s deposition testimony regarding the

fact that the datasheet was distributed to “people that wanted to buy a product.” Corbett

Decl, Exh. C at 20-22. Supermicro also asserts that for these very same reasons, the

datasheet qualifies as prior art under § 102(b).

Supermicro further argues that the datasheet indeed anticipates the asserted claims,

and that contrary to Rackable’s arguments, the datasheet necessarily teaches back-to-back

configuration. In support, it notes the relevant disclosure in the datasheet:

High server density

The Cobalt Raq microserver is designed for use in the extremely spaceconscious environment of the ISP Network Operations Center. Its single

rack-unit enables up to 40 Cobalt Raq microservers to fit into a standard 19-

inch equipment rack, or up to 80 when mounted on both sides of a rack. Low

power consumption translates to low heat generation, and a rear-mounted fan

provides front-to-back flow-through cooling.

Corbett Decl., Exh. C at Tab 903 (same as Ostapuk Decl, Exh. Q; Seelig and Mehra Decls.,

Exh. 1). Supermicro’s expert attests in a declaration filed in conjunction with Supermicro’s

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opposition that the above language of the datasheet indeed discloses a back-to-back

configuration of the Raq servers. Wood Decl., par. 12.

Supermicro also argues that according to this court’s construction of “front” following

the Markman hearing as “a panel designed to face forward when placed in a rack,” and the

parties’ stipulation that “back” means the opposite of front, Rackable’s argument that the

datasheet may teach front-to-back or front-to-front placement - as opposed to back-to-back

placement - does not square with the court’s Markman ruling. It further notes that the term

“front” was only definite with respect to the ‘366 patent (as opposed to the ‘408 patent)

because the rack provides a frame of reference by which to determine the “front” side. 

Supermicro also contends that the datasheet’s disclosed airflow anticipates a backto-back configuration. In support, it cites to its expert Wood’s opinion that one of ordinary

skill in the art would interpret the datasheet in this manner. Wood Decl., at pars. 13-14.

In reply, Rackable argues that this court should not consider the untimely

declarations from Seelig and Mehra, who it claims Supermicro never disclosed as

witnesses under Federal Rule of Civil Procedure 26 or in Supermicro’s discovery

responses. Rackable argues that Supermicro’s failure to disclose Seelig and Mehra is

extremely prejudicial.

Rackable also counters that the datasheet does not sufficiently anticipate the ‘366

patent claims. Contrary to Supermicro’s characterization of Wood’s testimony, Rackable

argues that Wood admitted in his deposition that the devices discussed in the Raq 1

datasheet could have been mounted so that air flowed in a straight horizontal manner that

passes through a Raq on one side of a rack and then through another Raq on the other

side of a Raq. Ostapuk Decl., Exh. L at 258, 263. It therefore argues that the airflow

anticipated by the ‘366 patent is not present in the datasheet. Rackable additionally argues

that Wood’s testimony is internally inconsistent.

ii. Cobalt Raq Device

Contrary to its arguments regarding the Cobalt Raq 1 datasheet, in its opposition,

Supermicro does not specify which subsection of § 102 it is relying on with respect to its

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argument that the device or Raq itself constitutes prior art. Instead, it simply states that the

device is prior art under § 102. However, unlike the datasheet, Supermicro asserts that it is

not arguing that the device anticipates the asserted claims. Instead, it states that it relies

on the device only for obviousness arguments, which are not raised by Rackable in the

instant motion. 

In its opening papers, Rackable argues that the device does not constitute prior art. 

Like the datasheet, it asserts that Supermicro cannot produce any evidence of sales of the

device prior to Rackable’s invention or patent application. It notes that former Cobalt

employee, Henriquez, was unable to identify sales or use dates for the device. Ostapuk

Decl., Exh. M at 13, 15, 51-54.

In opposition, Supermicro counters that it can show that the device is prior art

because it was sold as early as 1998, and lists ten pieces of evidence in support, including

the Seelig and Mehra declarations, deposition testimony from inventor Henriquez that the

Raq was completed in 1998, the print and copyright dates on the Cobalt Raq 1 datasheet,

and an SEC filing that shows the first commercial sale as September 1998. See Corbett

Decl., Exh. C at 11-12, Exh. E at 9; see also Ostapuk Decl. at Exh. Q. 

In reply, Rackable makes the same objections to the Seelig and Mehra declarations

as it did with respect to the datasheet, and argues that because Supermicro concedes that

the device does not anticipate the ‘366 patent, Rackable should be granted summary

adjudication on anticipation. 

C. Analysis

At the outset, it is necessary to address the evidentiary issue raised by Rackable. 

As noted, Rackable argued in its reply that the court should not consider the Seelig and

Mehra declarations proffered by Supermicro because Seelig and Mehra were not disclosed

pursuant to Rule 26. However, because Rackable made this argument in its reply,

Supermicro did not address the issue until the April 11, 2007 hearing. At the hearing,

Supermicro noted that it had noticed depositions of Sun Microsystem (“Sun”) (Cobalt’s

successor) employees several months ago in November 2006, which led to Henriquez’s

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deposition and also should have resulted in depositions of Seelig and Mehra. It noted that

the delay in obtaining information from Seelig and Mehra resulted from Sun’s reluctance to

cooperate, and that it had “beat the bushes” to locate Seelig and Mehra. Supermicro

offered at the hearing to reopen discovery such that Rackable could have an opportunity to

depose Seelig and Mehra. 

Because it appears that Rackable may have had notice of Supermicro’s attempts to

interview Sun/Cobalt employees several months ago, and alternatively, because any

prejudice to Rackable may be remedied by allowing it to depose Seelig and Mehra, the

court GRANTS the parties’ stipulated request to reopen discovery for the limited purpose of

allowing Rackable to depose Seelig and Mehra. Although the court has reviewed the

Seelig and Mehra declarations in connection with Rackable’s instant motion, for the

reasons discussed below, it is not necessary for the court to rely on those contested

declarations. The court would reach the same conclusions on the issues absent those

declarations.

Again, the court breaks down its analysis of the prior art issues according to the

required elements set forth by the prior art statutes and relevant Federal Circuit law.

i. Cobalt Raq 1 Datasheet

a. Public Accessibility

As noted, under both sections 102(a) and (b), in order for an invention to be “known”

such that it may constitute prior art, it must be accessible to the public. See Woodland

Trust, 148 F.3d at 1370. Rackable asserted in its opening papers that there was no

evidence that the datasheet was publicly disseminated. Supermicro relies on the Mehra

and Seelig declarations and on deposition testimony from Henriquez, as evidence that the

datasheet was indeed accessible to the public.

The court need not rely on the contested Seelig and Mehra declarations in

concluding that a genuine issue of material fact exists as to the public accessibility of the

datasheet. Instead, the court relies on the deposition testimony from Raq’s inventor,

Henriquez, who attested that the datasheet was produced for customers or end-users, and

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that in Cobalt’s ordinary course of business, it would have been sent to the customers prior

to shipping of the Raq device. See Corbett Decl, Exh. C at 20-24. This is sufficient to

create a triable issue of fact as to the public accessibility of the datasheet.

b. Date of Accessibility/Dissemination

The public dissemination or accessibility of the prior art must also predate the

applicant’s invention, in this case that of the ‘366 patent. See Mahurkar v. C.R. Bard Inc.,

79 F.3d 1572, 1576 (Fed. Cir. 1996). The date of invention is presumed to be the filing

date of the application for a patent, which in this case was December 17, 2002. 5 Chisum

on Patents, sect. 5:03[2][a]. 

Again, the court need not rely on the Seelig and Mehra declarations in determining

that a genuine issue of material fact exists regarding the date that the datasheet was made

accessible to the public. Instead, the 1998 print and copyright dates on the datasheet itself,

in combination with evidence cited by Supermicro that the Raq itself was made

commercially available to the public in September 1998, and evidence from the Raq

inventor that the datasheet was likely distributed prior to the shipping of the Raq to

customers, constitute sufficient circumstantial evidence to create such an issue of fact. 

See Ostapuk Decl., Exh. Q; Corbett Decl, Exh. C at 20-22; see also Constant v. Advanced

Micro-Devices, Inc., 848 F.2d 1560 (Fed. Cir. 1988) (exhaustive proof of when public

received publication not required; evidence of routine business practice of public

distribution of printed materials is sufficient to prove public accessibility). Given the fact

that evidence exists, in addition to the 1998 printed date on the datasheet itself, this case,

is therefore distinguishable from the district court case relied on by Rackable. See

Hillgraeve, 271 F.Supp.2d at 974-75. 

In sum, because there is a genuine issue of material fact that the Cobalt Raq 1

datasheet was publicly accessible prior to the December 17, 2002 filing date of Rackable’s

‘366 patent application, there is a triable issue as to whether the datasheet constitutes prior

art under sections 102(a) and (b).

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Apparently, there are other issues regarding anticipation that Rackable has not raised

in the instant motion. See Reply at 11 n.6 (noting that it disputes that the datasheet discloses

other claim limitations, including a “computer that functions as a server,” and that Supermicro

has addressed issues on which Rackable did not move).

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c. Anticipation

Rackable notes that for purposes of this motion, it is disputing only the datasheet’s

anticipation of ‘366 claim limitations regarding (1) back-to-back configuration, and (2)

airflow. See Reply at 11 n.6.4

 Accordingly, this court’s inquiry is limited to whether or not a

genuine issue of material fact exists as to whether the datasheet anticipated the “back-toback” configuration and airflow limitations at issue in the surviving ‘366 patent claims. 

The datasheet does not explicitly include language requiring a “back-to-back”

configuration, or “a channel for air” between the back-to-back computers as specified in

‘366 patent independent claims 1, 23, and 30. See Ostapuk Decl., Exh. Q. However,

extrinsic evidence from Supermicro’s expert, Wood, supports Supermicro’s invalidity

counterclaim. Regarding the configuration of the Raq servers, Wood opines that the

datasheet anticipates a back-to-back configuration based both upon the court’s

construction of the term “front,” and on the understanding of one skilled in the art. He

refutes Rackable’s argument that the datasheet could anticipate the front-to-back

placement of the servers. Wood explains that:

One of skill in the art would read the Cobalt Raq datasheet and understand

that it does not teach one to mount units facing the same direction, such that

the air passes horizontally into one unit and out of the unit on the other side of

the rack as argued by Rackable . . . [for] two reasons. . . . First, one of skill in

the art would understand that it is bad thermal design to have the hot air from

one unit blow into the other unit. . . . Second, as a matter of operations, one

of skill in the art typically will mount servers so that the same side of all of the

computers face outward on the rack.

Wood Decl., pars 12-13.

Additionally, Wood advises that the datasheet also anticipates the channel for airflow

disclosed by the ‘366 patent claims. He asserts that the datasheet:

discloses a fan that creates a front-to-back airflow through the computers

when mounted in racks. It is inherent that this airflow would be sufficient to

constitute a cooling flow. Given the back-to-back configuration disclosed by

this datasheet, the air flowing through the rack mounted computers

necessarily would enter through the outward-facing sides of the computers

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Rackable implies that this court should afford little weight to Wood’s declaration

because it contends that his opinions are inconsistent with his deposition testimony on the

issue. Having reviewed both the declaration and the deposition testimony, see Ostapuk Decl.,

Exh. L, the court does not agree that the two are inconsistent.

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into the space between the computers, and then out of that space (or viceversa). Thus, the airflow will match the airflow claimed in the ‘366 Patent.

Wood Decl., par. 14.

Accordingly, the issue for this court is whether Supermicro’s extrinsic evidence,

specifically its expert declaration, is sufficient to create a triable issue of material fact as to

the datasheet’s anticipation of the back-to-back configuration and airflow disclosed by the

patent.5

The law of anticipation does not require that the datasheet explicitly disclose the

configuration or the channel for airflow. A publication that “does not expressly disclose in

words” one or more elements of a patent’s claims “might nevertheless be anticipating if a

person of ordinary skill in the art would understand the [publication] as disclosing [the

missing element or elements] and if such a person could have combined the [publication’s]

description of the invention with his own knowledge to make the claimed invention.” Helifix,

Ltd. v. Blok-Lok, Ltd, 208 F.3d 1339, 1347 (Fed. Cir. 2000). Whether a claim limitation is

inherent in a prior art reference for purposes of anticipation is a question of fact. See

Finnigan Corp. v. International Trade Comm’n, 180 F.3d 1354, 1362 (Fed. Cir. 1999).

 “Recourse to extrinsic evidence is proper to determine whether a feature, while not

explicitly discussed, is necessarily present in a reference.” Telemac Cellular Corp. v. Topp

Telecom, Inc., 247 F.3d 1316, 1328 (Fed. Cir. 2001). Such extrinsic evidence may be used

to “educate the decisionmaker to what the reference meant to persons of ordinary skill in

the field of the invention,” but may not be used “to fill gaps in the reference.” Scripps Clinic

& Research Foundation v. Genentech, 927 F.2d 1565, 1576 (Fed. Cir. 1991). 

The Federal Circuit has held that expert testimony that prior art in fact teaches the

limitations of a method patent is sufficient to create a genuine issue of material fact as to

anticipation. See Medical Instrumentation & Diagnostics Corp. v. Elekta AB, 344 F.3d

1205, 1221 (Fed. Cir. 2003) (reversing district court’s grant of summary judgment in favor

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of plaintiff). That is exactly what Wood’s testimony accomplishes in this case. Wood’s

testimony reveals to the court that one of ordinary skill in the field of computer storage

systems would interpret the datasheet to anticipate the airflow and back-to-back

configuration taught by the ‘366 patent claims. Given Wood’s testimony, the court finds

that a triable issue of material fact exists, and Rackable’s motion must be DENIED as to the

Cobalt Raq 1 datasheet.

ii. Cobalt Raq Device

The analysis regarding the Raq itself is similar to that with respect to the datasheet. 

For the same reasons discussed above regarding the datasheet, the court concludes that

there is a genuine issue of material fact regarding the public use or sale and the date of

public use or sale with respect to the Raq. Accordingly, subject to proof at trial, the Raq

may constitute prior art under § 102.

However, given Supermicro’s concession that it is not asserting anticipation as to

the Raq, the court GRANTS Rackable’s motion for summary adjudication as to the Raq’s

anticipation of the pertinent ‘366 patent claims.

CONCLUSION

For the above reasons, the court GRANTS IN PART AND DENIES IN PART

Rackable’s motion for summary adjudication and DENIES Supermicro’s motion for

summary judgment. Concerning infringement, the court DENIES Supermicro’s motion for

summary judgment of the inducement of infringement and direct infringement claims, and

also DENIES Rackable’s motion for summary adjudication as to one element of the

inducement of infringement claim, regarding direct infringement by third party Intelenet. 

However, as stated on the record, the court DISMISSES any claim for contributory

infringement raised by Rackable in its complaint.

Turning to enforceability, the court GRANTS Rackable’s motion for summary

adjudication that its alleged failure to disclose the copyright and/or printing dates for the

Cobalt Raq 2, 3, and 4 datasheets and the existence of the Cobalt Raq 1 datasheet did not

constitute inequitable conduct.

Case 4:05-cv-03561-PJH Document 241 Filed 04/25/07 Page 38 of 39
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As for invalidity, the court DENIES Rackable’s motion for summary adjudication that

the Cobalt Raq 1 datasheet and the Raq device do not constitute prior art. The court also

DENIES Rackable’s motion because there is a triable issue of fact as to the Cobalt Raq 1

datasheet’s anticipation of the ‘366 patent claims regarding back-to-back configuration and

airflow. However, because the issue is undisputed, the court GRANTS Rackable’s motion

for summary adjudication that the Raq device does not anticipate.

Additionally, discovery is reopened for the limited purpose of allowing Rackable to

depose Seelig and Mehra.

IT IS SO ORDERED.

Dated: April 25, 2007

__________________________________

PHYLLIS J. HAMILTON

United States District Judge

Case 4:05-cv-03561-PJH Document 241 Filed 04/25/07 Page 39 of 39