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Aevoe Corp. v. AE Tech Co., Ltd.

United States District Court, D. Nevada

July 29, 2014

AEVOE CORP., a California corporation, Plaintiff,
v.
AE TECH CO., LTD., a Taiwan corporation; S&F CORPORATION dba SF PLANET CORPORATION, a Minnesota corporation; and GREATSHIELD INC., a Minnesota corporation, Defendants.

ORDER

GLORIA M. NAVARRO, Chief District Judge.

Pending before the Court is the Motion for Summary Judgment (ECF No. 425) filed by Defendants AE Tech Co., Ltd., S&F Corporation, and Greatshield Inc. (collectively, "Defendants"). Plaintiff Aevoe Corp. filed a Response (ECF No. 448) and Defendants filed a Reply (ECF No. 476). Defendants argue that, based on the evidence in the record, Defendants are entitled to summary judgment on their inequitable conduct counterclaim. For the reasons discussed in this Order, the Court concludes that genuine issues of material fact still exist as to each element of Defendants' inequitable conduct claim, thus precluding summary judgment. Accordingly, Defendants' Motion for Summary Judgment (ECF No. 425) is DENIED.

I. BACKGROUND

Plaintiff Aevoe Corp. ("Plaintiff") is the sole owner of United States Patent No. 8, 044, 942 ("the '942 Patent") entitled "Touch Screen Protector." (Am. Compl. ¶¶ 13-14, ECF No. 44.) Plaintiff is a California corporation ( id. at ¶ 6) that "markets and sells products embodying the '942 Patent throughout the United States" ( id. at ¶ 15). The invention of the '942 Patent relates to a touch screen protector for hand-held electronic devices. U.S. Patent No. 8, 044, 942, at [57] (filed June 14, 2011). Specifically, the '942 Patent discloses a touch screen protector that does not physically contact the touch screen portion of the device. Id.

In this action, Plaintiff alleges that three defendants infringed the '942 Patent. First, Plaintiff alleges that Defendant AE Tech ("AE Tech") is a Taiwan corporation ( id. at ¶ 7) that "manufactures, imports, advertises, sells, and offers to sell products... that infringe the '942 Patent" ( id. at ¶ 16). Second, Plaintiff alleges that Defendant S & F Corporation ("S&F") is a Minnesota corporation that does business as SF Planet Company ("SF Planet") (collectively, "S&F Defendants"). ( Id. at ¶¶ 7-8.) The S&F Defendants allegedly "import, advertise, sell, and offer to sell products... that infringe the '942 Patent." ( Id. at ¶ 17.) Third, Plaintiff alleges that Defendant GreatShield is a Minnesota corporation that is a corporate affiliate of the S&F Defendants. ( Id. at ¶¶ 11-12.) Plaintiff further alleges the S&F Defendants "operate an Amazon.com storefront" through which they sell the AE Tech products that allegedly infringe the '942 Patent. ( Id. at ¶¶ 30-31.)

In response to the Defendants' allegedly infringing activities, Plaintiff filed the instant action on January 11, 2012, alleging infringement of the '942 Patent. ( See Compl., ECF No. 1.) Plaintiff subsequently filed its Amended Complaint on March 14, 2012. (Am. Compl., ECF No.44.) Defendant AE Tech filed its Answer on March 30, 2012 (Answer, ECF No. 51) and Defendants S&F Corporation and Greatshield Inc. filed their Answer on April 9, 2012 (Answer, ECF No. 52). In the Answers, Defendants assert multiple affirmative defenses: (1) unclean hands; (2) unenforceability; (3) noninfringement; (4) invalidity; (5) inequitable conduct; and (6) any additional affirmative defenses that become apparent during the course of the litigation. (Answer at 5:26-6:13, ECF No. 51.) Defendants also assert four counterclaims: (1) declaratory judgment of noninfringement; (2) declaratory judgment of invalidity; (3) declaratory judgment of unenforceability; and (4) false marking. ( Id. ¶¶ 25-51.) The Court subsequently dismissed Defendants' counterclaim for false marking, but found that Defendants had adequately alleged their counterclaim for a declaratory judgment of unenforceability as a result of inequitable conduct. (February 25, 2014 Order, ECF No. 512.)

Thereafter, Defendants filed the instant Motion for Summary Judgment of Inequitable Conduct in which they assert that no genuine issues of material fact remain for trial and Defendants are entitled to judgment on their inequitable conduct counterclaim. Specifically, Defendants assert that Plaintiff was selling a screen protector product for an Apple MacBook computer ("iVisor AG for MacBook") more than one year prior to the filing of the application that eventually issued as the '942 Patent. (Mot. for Summ. J. 2:13-22, ECF No. 425.) The iVisor AG for MacBook was a commercial embodiment of a Taiwanese patent application that predated the filing of the application that issued as the '942 Patent. ( Id. at 3:5-7, 4:8-10.) This Taiwanese patent application was even referenced in a declaration that the applicants filed pursuant to 37 C.F.R. § 1.131 (the "131 Declaration"), in an attempt to establish an invention date of the touch screen protector product prior to the effective date of the Taiwanese patent application. ( Id. at 4:8-10.) Despite discussing the Taiwanese patent application in the 131 Declaration, the patent applicants failed to mention the sales of the iVisor AG for MacBook. ( Id. at 4:18-20.) Defendants now assert that, based on the applicants' withholding the iVisor AG for MacBook from the PTO, they are entitled to a summary adjudication that the applicants' committed inequitable conduct before the PTO and that, as a result, the '942 Patent should be rendered unenforceable.

II. LEGAL STANDARD

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 dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Because a motion for summary judgment is a purely procedural question not pertaining to patent law, this Court applies the law of the regional circuit, the Ninth Circuit, when determining whether a genuine dispute exists as to any material fact. CollegeNet, Inc. v. ApplyYourself, Inc., 418 F.3d 1225, 1230 (Fed. Cir. 2005).

Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is a sufficient evidentiary basis on which a reasonable fact-finder could rely to find for the nonmoving party. See id. "The amount of evidence necessary to raise a genuine issue of material fact is enough to require a jury or judge to resolve the parties' differing versions of the truth at trial.'" Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968)). "Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party's favor." Diaz v. Eagle Produce Ltd. P'ship, 521 F.3d 1201, 1207 (9th Cir. 2008). 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 that depends on which party filed the motion and which party bears the burden of proof. When, as here, "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). 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). However, the nonmoving party "may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists, " Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and "must do more than simply show that there is some metaphysical doubt as to the material facts.'" Orr v. Bank of Am., 285 F.3d 764, 783 (9th Cir. 2002) (quoting Matsushita, 475 U.S. at 586). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient." Anderson, 477 U.S. at 252. 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.

At summary judgment, a court's function is not to weigh the evidence and determine the truth, but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249. The evidence of the nonmovant is "to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255. Nevertheless, if the evidence of the nonmoving party is merely ...


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