Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_02-cv-02385/USCOURTS-cand-3_02-cv-02385-5/pdf.json

Parties Involved:
Microsoft Corporation
Counter-claimant
TV Interactive Data Corporation
Counter-defendant

Document Text:

United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

TV INTERACTIVE DATA CORPORATION,

Plaintiff,

 v.

MICROSOFT CORPORATION,

Defendant.

 /

No. C 02-02385 JSW

ORDER GRANTING IN PART

AND DENYING IN PART

MICROSOFT’S MOTION FOR

PARTIAL SUMMARY

JUDGMENT OF NO WILLFUL

INFRINGEMENT AND LIMITING

DAMAGES CLAIMS TO POSTSUIT INDUCEMENT

Now before the Court is the motion of Defendant Microsoft Corporation (“Microsoft”)

for partial summary judgment of no willful infringement and limiting TV Interactive Data

Corporation’s (“TVI”) damages to post-suit inducement. Having carefully reviewed the parties’

papers and considered their arguments and the relevant legal authority, and good cause

appearing, the Court hereby GRANTS IN PART and DENIES IN PART Microsoft’s motion for

partial summary judgment.

A. Standard on Summary Judgment.

Summary judgment is appropriate when there is no genuine issue as to any material fact

and the moving party is entitled to judgment as a matter of law. Union States Gypsum Co. v.

Nat’l Gypsum Co., 74 F.3d 1209, 1212 (Fed. Cir. 1996). The burden of demonstrating the

absence of any genuine issue of material fact rests with the moving party. SRI Int’l v.

Matsushita Elec. Corp., 775 F.2d 1107, 1116 (Fed. Cir. 1985). In order to defeat summary

judgment, the non-moving party must do “more than simply show that there is some 

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metaphysical doubt as to the facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475

U.S. 574, 586 (1986). Rather, the non-moving party must set forth “specific facts showing that

there is a genuine issue for trial.” FED. R. CIV. P. 56(2); Matsushita Elec. Indus. Co., 475 U.S.

at 587.

B. Microsoft’s Motion for Partial Summary Judgment Precluding Damages for PreSuit Willful Infringement is Denied.

Microsoft contends that it is entitled to partial summary judgment to preclude pre-suit

willful infringement damages because TVI cannot meet its burden of proving Microsoft had

pre-suit knowledge of TVI’s patents. Section 284 of the Patent Act provides that “the court

may increase the damages up to three times the amount found or assessed.” 35 U.S.C. § 284. 

Under this section, it is within the discretion of the court to award increased damages when “the

infringer acted in wanton disregard of the patentee’s patent rights, that is, where infringement is

willful.” Id.; Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992). Willfulness is a

question of fact determined from the totality of the circumstances and must be proven by clear

and convincing evidence. Gustafson, Inc. v. Intersystems Indus. Prods., Inc., 897 F.2d 508, 510

(Fed. Cir. 1990).

In determining whether the infringement was willful, the primary focus is on the

infringer’s intent and reasonable beliefs. Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 944 (Fed.

Cir. 1992). One who has actual notice of the patent rights of another has an affirmative duty to

diligently ascertain whether he or she is infringing the patent. Stryker Corp. v. Intermedics

Orthopedics, Inc., 96 F.3d 1409, 1414-16 (Fed. Cir. 1996). Thus, in order to prove that a

defendant willfully infringed, a plaintiff must prove by clear and convincing evidence that the

defendant had actual notice of the patent. See Gustafson, Inc., 897 F.2d at 511 (holding that “a

party cannot be found to have ‘willfully’ infringed a patent of which he had no knowledge”). 

However, at the summary judgment stage, a plaintiff need only set forth specific facts showing

that there is a genuine issue of material fact for trial regarding the existence of defendant’s

knowledge. See Matsushita Elec. Indus. Co., 475 U.S. at 587; Gustafson, Inc., 897 F.2d at 511.

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 The Court finds that TVI has set forth specific facts showing that there is a genuine

issue of material fact for trial regarding whether Microsoft willfully infringed TVI’s patents

before the suit was filed. At a minimum, the reference to TVI’s ’156 patent on a form attached

to an Office Action during the prosecution of one of Microsoft’s patents which was forwarded

by outside counsel to Microsoft’s in-house counsel, indicates that there is a genuine issue of

material fact as to whether Microsoft had actual notice of the ’156 patent at that time. See

Stryker, 96 F.3d at 1415 (concluding that the infringer had actual notice of the patent when a

patent attorney for the company saw a drawing and reference to the patent in the Official

Gazette of the Patent and Trademark Office); Great No. Corp. v. Davis Core & Pad Co., Inc.,

782 F.2d 159, 166-67 (Fed. Cir. 1986) (concluding that the infringer had actual notice of the

patent when a third party mentioned to the president of the company that there was a similar

product on the market that had been patented). In addition, there is a genuine issue of material

fact as to whether Microsoft is liable for pre-suit willful infringement of the ’307, ’863 and ’532

patents. See Crystal Semiconductor Corp. v. TriTech Microelectronics Int’l, Inc., 246 F.3d

1336, 1352-57, 1361 (Fed. Cir. 2001) (upholding enhanced damages for willful infringement of

patents based on damages calculated from the date the infringer had pre-suit notice of another

related patent-in-suit even though notice of the subject patents occurred at the time suit was

filed). Accordingly, Microsoft’s motion for partial summary judgment of no pre-suit willful

infringement is DENIED. 

C. Microsoft’s Motion for Partial Summary Judgment Precluding Damages for PreSuit Inducement is Denied.

Microsoft also contends that it is entitled to partial summary judgment to preclude presuit damages for inducement because TVI cannot meet its burden of proving Microsoft had

knowledge of TVI’s patents before suit was filed. Section 271(b) of the Patent Act provides

that “whoever actively induces infringement of a patent shall be liable as an infringer.” 35

U.S.C. § 271(b). To prove that a defendant has induced infringement, a plaintiff must

demonstrate “that the alleged infringer’s actions induced infringing acts and that he knew or

should have known his actions would induce actual infringements.” Manville Sales Corp. v.

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Paramount Sys., Inc., 917 F.2d 544, 553 (Fed. Cir. 1990). In addition, a plaintiff must

demonstrate that the alleged infringer knowingly induced infringement with a “specific intent to

encourage another’s infringement and not merely that the defendant had knowledge of the acts

alleged to infringe.” Id. Thus, in order for induced infringement to have taken place, the

defendant must have known of the patent at the time the alleged infringement was induced. See

id. 

According to the analysis set forth above, the Court finds that there is a genuine issue of

material fact as to when Microsoft had actual notice of the ’156 patent and whether Microsoft is

liable for pre-suit inducement of the ’307, ’863 and ’532 patents. Thus, Microsoft’s motion for

partial summary judgment precluding pre-suit damages for inducement is DENIED.

D. Microsoft’s Motion for Partial Summary Judgment Precluding Damages for Direct

Infringement is Denied.

Microsoft further alleges that the Court should dismiss in toto TVI’s claim for damages

for direct infringement because WindowsTM lacks the essential hardware required by the

limitations in TVI’s claims at issue. Section 271 of the Patent Act states that “whoever without

authority makes, uses, offers to sell, or sells any patented invention within the United States . . .

infringes the patent.” 35 U.S.C. § 271(a). A determination of infringement is a two-step

process. Desper Prods. v. Qsound Labs., Inc., 157 F.3d 1325, 1332 (Fed. Cir. 1998). First, the

court must construe the claim to determine its meaning and scope. Id. (citing Markman v.

Westview Instruments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995)). Second, the properly-construed

claim must be compared to the allegedly infringing device. Id. A device literally infringes if

each of the elements of the asserted claim is found in the accused device. Bayer AG v. Elan

Pharm. Research Corp., 212 F.3d 1241, 1247 (Fed. Cir. 2000). However, a device that does not

literally infringe a patent claim may still infringe under the doctrine of equivalents if the

accused product contains “elements identical to or equivalent to each claimed [limitation] of the

patented invention.” Warner-Jenkinson Co., Inc., v. Hilton Davis Chem. Co., 520 U.S. 17, 40

(1997). 

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“To prove infringement under the doctrine of equivalents, a patentee must show that the

accused device performs substantially the same function in substantially the same way to

achieve substantially the same result.” Malta v. Shulmerich Carillons, Inc., 952 F.2d 1320, 

1325 (Fed. Cir. 1991). However, courts should not examine the patented and accused

inventions for “overall” equivalence. Warner-Jenkinson, 520 U.S. at 40. Rather, courts must

determine that each element of the accused device is equivalent to a limitation from the patent

claim. Id. An element in the accused product is equivalent to a claim element if one skilled in

the art would find the difference between the two “insubstantial.” See id. at 39-40.

Although equivalence is a factual matter normally reserved for a jury, a court may grant

summary judgment in any case where no reasonable jury could find equivalence. Sage Prods.,

Inc. v. Devon Indus., Inc., 126 F.3d 1420, 1423 (Fed. Cir. 1997). However, the Court finds that

TVI has set forth specific facts that indicate there is a genuine issue for trial regarding whether

WindowsTM directly infringes TVI’s patents. Specifically, although TVI’s claims have been

construed to require a hardware device, there is a dispute of material fact as to whether

WindowsTM may infringe under the doctrine of equivalents. See Fantasy Sports Props., Inc. v.

Sportsline.com, Inc., 287 F.3d 1108, 1118-19 (Fed. Cir. 2002) (concluding software enabling a

user to play fantasy football directly infringed a claim interpreted as a computer executing

fantasy football software); Overhead Door Corp. v. Chamberlain Group, Inc., 194 F.3d 1261,

1269-70 (Fed. Cir. 1999) (“[A]ny software process can be transformed into an equivalent

hardware process, and any hardware process can be transformed into an equivalent software

process.”). Accordingly, Microsoft’s motion for partial summary judgment dismissing in toto

TVI’s claim for damages for direct infringement is DENIED.

E. Microsoft’s Motion for Partial Summary Judgment Precluding Damages for

Contributory Infringement is Granted.

Finally, Microsoft argues that TVI’s claim for damages for contributory infringement

should be dismissed because WindowsTM is a staple article of commerce with substantial noninfringing uses, or, in the alternative, TVI should be limited to post-suit damages for

contributory infringement because TVI cannot prove Microsoft had actual knowledge of TVI’s

patents before suit was filed. A contributory infringer is defined by section 271(c) of the Patent

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Act as one who “sells a component . . . constituting a material part of the invention, knowing

the same to be especially made or especially adapted for use in the infringement of such patent,

and not a staple article or commodity of commerce suitable for substantial noninfringing use . . .

.” 35 U.S.C. § 271(c). Hence, the language of § 271(c) excludes from its scope a staple article

or commodity with a substantial non-infringing use that has not been especially made or

adapted for use in infringing the patent. Id.; see also C.R. Bard, Inc. v. Advanced

Cardiovascular Sys., Inc., 911 F.2d 670, 673 (Fed. Cir. 1990). A non-staple article has been

defined as “one which was designed to carry out the patented process and has little or no utility

outside of that process.” Polysius Corp. v. Fuller Co., 709 F. Supp. 560, 576 (E.D. Pa. 1989),

aff’d, 889 F.2d 1100 (Fed. Cir. 1989). To determine whether a product is a staple of commerce,

a court must look at the entire device and not just the part capable of practicing the claims of the

patent at issue. See Hodosh v. Block Drug Co., 833 F.2d 1575, 1578 (Fed. Cir. 1987).

The Court finds that Microsoft is entitled to partial summary judgment in its favor

precluding the award of damages for contributory infringement. Looking at WindowsTM as a

whole, TVI cannot meet its burden of proving that it has no other substantial non-infringing

uses. To the contrary, WindowsTM has numerous substantial features that are unrelated to

AutoPlay, each with its own utility, including application multi-tasking, a file search feature, a

help system, safeguards to prevent a computer crash and utilities to copy, move, delete and

rename files, among others. See, e.g., C.R. Bard, 911 F.2d at 674 (finding substantial noninfringing use when forty to sixty percent of the uses may have been non-infringing); Universal

Elecs., Inc. v. Zenith Elecs. Corp., 846 F. Supp. 641, 652 (N.D. Ill. 1994) (finding Universal

remote control transmitter to be a staple article of commerce suitable for substantial noninfringing use because it could operate many electronic devices not manufactured by Zenith). 

In addition, TVI has put forward no evidence suggesting that WindowsTM was designed in order

to carry out AutoPlay and has little or no use outside of that function. Accordingly, there is no

genuine issue of material fact that WindowsTM is a staple article of commerce with substantial

non-infringing uses and therefore Microsoft’s motion for partial summary judgment precluding 

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 In addition to proving that an infringing device is a non-staple article of commerce

in order to recover damages for contributory infringement under § 271(c), TVI would also

have had to prove that Microsoft had actual knowledge of its patents. Hewlett -Packard Co.

v. Bausch & Lomb, Inc., 909 F.2d 1464, 1469 n.4 (Fed. Cir. 1990). Had the Court found that

summary judgment precluding damages for contributory infringement was inappropriate,

there would have been a genuine issue of material fact as to whether Microsoft had actual

knowledge of TVI’s patents prior to the commencement of this action, such that summary

judgment limiting contributory infringement damages to those accruing post-suit would have

been inappropriate on that ground as well. See supra Part B.

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damages for contributory infringement is GRANTED.1

CONCLUSION

For the foregoing reasons, Microsoft’s motion for partial summary judgment of no

willful infringement and limiting TVI’s damages to post-suit inducement is hereby GRANTED

IN PART and DENIED IN PART. 

IT IS SO ORDERED.

Dated: August 10, 2005 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

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