Court Opinion

ID: 3198269
Source: CourtListenerOpinion
Date Created: 2016-04-27 15:01:16.673609+00
Date Added: 2024-06-11T12:05:35.966152
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

          LARGAN PRECISION CO., LTD.,
               Plaintiff-Appellant

                           v.

    GENIUS ELECTRONIC OPTICAL CO., LTD.,
               Defendant-Appellee
             ______________________

                      2015-1695
                ______________________

   Appeal from the United States District Court for the
Northern District of California in No. 3:13-cv-02502-JD,
Judge James Donato.
                ______________________

                Decided: April 27, 2016
                ______________________

    DONALD ROBERT DUNNER, Finnegan, Henderson,
Farabow, Garrett & Dunner, LLP, Washington, DC,
argued for plaintiff-appellant. Also represented by
ANDREW JOSEPH VANCE; GARY MA, MING-TAO YANG, Palo
Alto, CA.

    DAVID E. SIPIORA, Kilpatrick Townsend & Stockton
LLP, Denver, CO, argued for defendant-appellee. Also
represented by JEFFREY M. CONNOR, KENNETH CHANG,
2    LARGAN PRECISION CO.   v. GENIUS ELECTRONIC OPTICAL CO.

MATTHEW CHRISTIAN HOLOHAN, KRISTOPHER L. REED,
LAURA K. MULLENDORE.
              ______________________

    Before LOURIE, MOORE, and CHEN, Circuit Judges.
MOORE, Circuit Judge.
    Largan Precision Co., Ltd. (“Largan”) appeals a judg-
ment of non-infringement of United States Patent Nos.
7,826,151; 7,864,454; 8,233,224; 8,310,768; and 8,395,691
(the “asserted patents”) by the U.S. District Court for the
Northern District of California. The asserted patents are
directed to various aspects of camera lenses. Because the
district court correctly held that no reasonable jury could
find induced infringement, we affirm.
                      BACKGROUND
    Largan and Genius Electronic Optical Co., Ltd. (“Ge-
nius”) are both Taiwanese companies that supply camera
lenses for various Apple phones and tablets. Largan and
Genius represent the first link in Apple’s four-part supply
chain. Genius manufactures lenses in Asia, and then
sells its lenses to Asian module integrators. The module
integrators build cameras, and then sell the finished
cameras to system integrators, which are also located in
Asia. The system integrators incorporate the cameras
into phones and tablets, which are then sent to Apple for
sale to end users worldwide. With one minor exception,
Largan and Genius are the only two lens suppliers for
Apple products at issue in this case. Apple does not track
where either supplier’s lenses are sold.
    Largan sued Genius for infringement over eight mod-
els of Genius lenses. At issue in this appeal are Largan’s
allegations of induced infringement. Largan alleged
Genius induced Apple to infringe the asserted patents by
placing lenses into Apple’s supply chain that were ulti-
mately incorporated in Apple products sold in the United
LARGAN PRECISION CO.   v. GENIUS ELECTRONIC OPTICAL CO.    3

States. Genius did not dispute that its lenses met every
limitation of every asserted claim. Rather, Genius argued
there was no induced infringement because there was no
evidence of direct infringement by Apple. The district
court granted summary judgment of no induced infringe-
ment, and Largan appealed to this court. We have juris-
diction under 35 U.S.C. § 1295(a)(1).
                         DISCUSSION
     We review summary judgment decisions de novo un-
der Ninth Circuit law. Brilliant Instruments, Inc. v.
GuideTech, LLC, 707 F.3d 1342, 1344 (Fed. Cir. 2013)
(citing Greater Yellowstone Coal. v. Lewis, 628 F.3d 1143,
1148 (9th Cir. 2010)). Summary judgment is appropriate
if “there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). At the summary judgment stage, we
credit the non-movant’s evidence and “draw all justifiable
inferences in its favor.” Brilliant Instruments, 707 F.3d at
1344.
    Induced infringement requires proof of direct in-
fringement by some party. Epcon Gas Sys., Inc. v. Bauer
Compressors, Inc., 279 F.3d 1022, 1033 (Fed. Cir. 2002).
To prove induced infringement, a patentee must show
“the accused inducer took an affirmative act to encourage
infringement with the knowledge that the induced acts
constitute patent infringement.” Info-Hold, Inc. v. Muzak
LLC, 783 F.3d 1365, 1372 (Fed. Cir. 2015) (quoting Mi-
crosoft Corp. v. DataTern, Inc., 755 F.3d 899, 904 (Fed.
Cir. 2014)). The knowledge requirement “may be satisfied
by a showing of actual knowledge or willful blindness.”
Id. at 1372–73. Willful blindness requires the alleged
inducer to (1) subjectively believe there is a high probabil-
ity that a fact exists and (2) take deliberate actions to
avoid learning of that fact. Global-Tech Appliances, Inc.
v. SEB S.A., 131 S. Ct. 2060, 2070 (2011).
4       LARGAN PRECISION CO.   v. GENIUS ELECTRONIC OPTICAL CO.

    We hold that the district court properly granted
summary judgment of no induced infringement because
Largan failed to offer evidence of direct infringement by
Apple. Largan did not offer evidence that any Apple
product sold in the United States contained an accused
Genius lens. Instead, Largan only presented evidence
that Genius lenses are incorporated in some Apple prod-
ucts manufactured in Asia and that some Apple products
are sold in the United States. Given the evidence of
record, which includes the volume of Largan and Genius
lenses supplied for Apple’s worldwide distribution of
products, Largan supplies such a large volume of lenses in
the relevant Apple products that all of those products sold
in the United States could contain Largan lenses.1
    Largan argues it does not need to identify specific
sales in the United States because “Apple’s supply chain
randomly selects between Genius’s and Largan’s lenses
for shipments to the U.S.” Appellant’s Br. 33. It argues
because the supply chain randomly selects lenses, a
reasonable jury could find the proportion of Apple phones
and tablets sold in the United States with Genius lenses
is equal to the proportion of Apple phones and tablets sold
worldwide with Genius lenses. Therefore, it argues a
reasonable jury could find direct infringement by Apple.
    Circumstantial evidence can be sufficient to prove in-
fringement. See Lucent Techs., Inc. v. Gateway, Inc., 580
F.3d 1301, 1318–19 (Fed. Cir. 2009). But it is insufficient
here because Largan’s theory requires Apple’s supply
chain selection to be random, and Largan failed to pro-

    1   The district court denied summary judgment on
products for which the record demonstrated there was a
question of fact regarding whether Largan made enough
lenses to cover all United States sales. Largan Precision
Co. v. Genius Elec. Optical Co., 86 F. Supp. 3d 1105, 1120
(N.D. Cal. 2015).
LARGAN PRECISION CO.   v. GENIUS ELECTRONIC OPTICAL CO.   5

duce any evidence that it is random. Largan only pre-
sented evidence obtained from Genius and Apple, the first
and fourth steps in Apple’s supply chain; it never present-
ed evidence from the module integrators (step two) or the
system integrators (step three). Based on the record
before us, we cannot infer that the module integrators
randomly select lenses or that the system integrators
randomly select cameras because there is no evidence
about how the module and system integrators operate.
    Largan attempts to establish randomness through
testimony from Apple, but the testimony it cites does not
allow the inference that the supply chain is random.
Apple’s corporate representative testified that Apple does
not track where a given supplier’s lenses are sold. This
testimony alone does not prove randomness in the supply
chain. Evidence that Apple does not track where a sup-
plier’s lenses are sold is not equivalent to evidence that
Apple suppliers treat Largan and Genius lenses inter-
changeably. In the light most favorable to Largan, the
evidence shows only that Apple does not place require-
ments on its suppliers regarding lenses. It says nothing
about whether the module integrators (step two) or the
system integrators (step three) randomly select Genius or
Largan lenses for the Apple products destined for the
United States. Largan has furnished no evidence that the
module integrators randomly select lenses or that the
system integrators randomly select cameras by proving
Apple did not place affirmative requirements on its sup-
pliers’ selections.
    Largan cites O2 Micro as an example of our court af-
firming a finding of induced infringement based on cir-
cumstantial evidence of sales in the United States. See
O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co., 449 F.
App’x 923 (Fed. Cir. 2011). As we discussed in O2 Micro,
a patentee may rely on circumstantial evidence to show
that a defendant’s foreign-manufactured components are
incorporated into products sold in the United States by a
6       LARGAN PRECISION CO.   v. GENIUS ELECTRONIC OPTICAL CO.

third party. Id. at 929. But O2 Micro is ultimately dis-
tinguishable from the present case because there was
some evidence of United States sales—the parties stipu-
lated that some of the accused components were sold in
the United States. Id. at 927. Conversely, there is no
evidence in this record that a single Apple product sold in
the United States contained an accused Genius lens. 2
And Largan did not present any evidence from the supply
chain to establish what process the module integrators
and system integrators used to select lenses in products
destined for the United States. Largan presented no
evidence of a single United States sale or evidence of
randomness from the module integrators or system inte-
grators.
    Largan also tries to prove United States sales with ev-
idence that Genius does not actively prevent United
States sales. It relies on testimony from Genius employ-
ees stating Genius has never instructed Apple not to sell
its lenses in the United States. This too provides no
insight into the behavior of the module integrators or
system integrators. That Genius does not restrict where
Apple sells its products does not indicate whether the
system integrators ship Apple products with Genius
lenses to the United States.

    2   Largan offers evidence that Genius was the sole
supplier for certain Apple products during a specific
period of time in an effort to overcome its failure of proof.
See Appellant’s Br. at 39. However, as noted supra note
1, the district court denied summary judgment with
respect to these products. As such, Largan presented no
evidence that any Apple product sold in the United States
at issue in this appeal contained a Genius lens.
LARGAN PRECISION CO.   v. GENIUS ELECTRONIC OPTICAL CO.   7

                        CONCLUSION
    Largan has failed to present sufficient evidence to es-
tablish a prima facie showing of direct infringement by
Apple. Because induced infringement requires proof of
underlying direct infringement, no reasonable jury could
find Genius liable for induced infringement. 3 For the
foregoing reasons, the judgment is affirmed.
                        AFFIRMED
                           COSTS
   No Costs.

   3    Because we hold that no reasonable jury could
find underlying direct infringement, we do not reach the
issue of Genius’s alleged knowledge of or willful blindness
to Apple’s alleged direct infringement.