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Inc. v. Sprint Nextel Corporation and Sprint Solutions, Inc.

United States District Court, D. Nevada

June 27, 2014

2-WAY COMPUTING, INC., Plaintiff,


JAMES C. MAHAN, District Judge.

Presently before the court is defendant Sprint Solutions, Inc.'s ("Sprint") motion for summary judgment on the applicability of intervening rights to bar damages asserted for alleged patent violations. (Doc. # 134). Plaintiff 2-Way Computing, Inc. ("2-Way") has filed an opposition (doc. # 143), to which defendant has replied (doc # 152).

I. Rackground

This motion arises from an action brought by 2-Way for patent infringement. 2-Way accuses Sprint of infringing U.S. Patent No. 5, 434, 797 entitled "Audio Communication System for a Computer and Network" ("the '797 patent"). 2-Way describes the patent as disclosing an audio communication system that allows the user to talk with other users over a shared network, rather than having to rely on traditional telephone lines.

The user can use a computer to place a call and continue to work on other applications and perform other tasks while the audio communication system is operating, and does not need to use a standard telephone. 2-Way accuses Sprint of infringing 23 of the 32 claims of the '797 patent by making, using, selling, importing and/or offering to sell audio communication products and/or services, including mobile devices that support "Push-To-Talk" or "Direct Connect" communications.

The 797 patent was initially issued on July 18, 1995. On October 25, 2005, 2-Way filed for a reexamination request for the patent. During the reexamination, 2-Way amended and added claims to the 797 patent. A patent reexamination certificate was issued on September 2, 2008.

2-Way asserts that Sprint has infringed amended claims 1, 3-6, 17-18, and 20-32 of the 797 patent. In a separate order, the court granted in part and denied in part Sprint's motion for summary judgment. (Doc. # 160). In the instant motion Sprint contends that, if it is found to have infringed 2-Way's patent, any damages should be limited through the doctrine of intervening rights.

II. Discussion

A. Standard of Review

The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that "there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(a). A principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

In determining summary judgment, a court applies a burden-shifting analysis. "When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted).

In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323-24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).

If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that "the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." T.W. Elec. Serv., Inc. v. P. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987).

In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. See Celotex Corp., 477 U.S. at 324.

B. Analysis

1. Absolute Intervening Rights

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