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Server Technology, Inc. v. American Power Conversion Corp.

United States District Court, D. Nevada

May 12, 2017

SERVER TECHNOLOGY, INC., Plaintiff,
v.
AMERICAN POWER CONVERSION CORPORATION, Defendant.

          ORDER

          LARRY R. HICKS UNITED STATES DISTRICT JUDGE.

         This order is amending and re-issuing certain vacated orders pursuant to the court's February 23, 2017 vacate order. ECF No. 691.

         In brief, after an appeal following a jury trial on the issues of copyright infringement, the Federal Circuit issued an order on September 23, 2016, finding that the court's claim construction of the term "plugstrip" as used in the patents-in-suit was erroneous and thus reversed and remanded the action back to this court. Server Tech., Inc. v. Am. Power Conversion Corp., 657 Fed.Appx. 1030, 1033-34 (Fed. Cir. 2016). Upon receiving the Federal Circuit's decision, the court ordered the parties to file a joint status report addressing the impact of the Federal Circuit's decision on this action. ECF No. 689. Thereafter, the parties filed a joint status report in accordance with the court's order. ECF No. 690.

         On February 23, 2017, the court issued its order vacating all orders found by the court to have relied upon or applied the court's construction of "plugstrip" in violation of the Federal Circuit's recent construction. However, as part of that order, the court noted that several of the vacated orders addressed additional claims or issues not impacted by the Federal Circuit's decision. For those orders, the court stated that it would issue amended orders establishing which portions of these orders have been vacated pursuant to the Federal Circuit's decision and which portions of the orders remain valid and binding in this litigation. This order constitutes the court's order amending and re-issuing portions of those vacated orders.

         The following orders have been amended and shall be re-issued by the court: (1) the court's order addressing defendant American Power Conversion Corp.'s ("APC") motion for summary judgment (ECF No. 381);[1] (2) the court's order addressing plaintiff Server Technology, Inc.'s ("STI") motion for a permanent injunction (ECF No. 651);[2] and (3) the court's order entering ongoing royalty (ECF No. 663).[3] The court notes the following rules guide the amended orders. First, all portions of the amended orders that are still vacated in light of the court's reissuance of the orders are STRUCKTHROUGH. The court retains the framework of the order for the record and the court's and parties' benefit. Second, any additional language not present in the original order shall be enclosed within BRACKETS to identify the additional language. Such additional language is to comply with changes to the local rules, for ease of reading, and/or clarification purposes but such additional language does not constitute nor create any new law of the case.

         Additionally, the court has amended and shall re-issue the jury verdict (ECF No. 590) in this action in accordance with the Federal Circuit's order and the parties' agreement as set forth in the joint status report.[4] The court directs the parties' attention to the amended jury verdict. Due to the nature of the Federal Circuit's order, all damages relating to the AP7900 series of products is vacated. Yet, the portion of the damages award relating to the AP8900 series of products is not vacated. The court, and the parties, recognize that the copyright infringement damages relating to the AP8900 series of products is 5% of total sales of those products. However, that information is solely within the control of the parties. As such, the parties shall prepare an appropriate order setting the damages for the AP8900 series of products consistent with the jury's verdict and submit the same for signature after which the court shall separately order the clerk of court to enter an appropriate judgment relating to the AP8900 series of products. The same rules guiding the court's amended orders guides the amended jury verdict.

         IT IS THEREFORE ORDERED that the clerk of court shall re-issue the amended order addressing defendant's motion for summary judgement (ECF No. 381) attached as Exhibit 1 to this order.

         IT IS FURTHER ORDERED that the clerk of court shall re-issue the amended order addressing plaintiffs motion for a permanent injunction (ECF No. 651) attached as Exhibit 2 to this order.

         IT IS FURTHER ORDERED that the clerk of court shall re-issue the amended order entering an ongoing royalty (ECF No. 663) attached as Exhibit 3 to this order.

         IT IS FURTHER ORDERED that the clerk of court shall re-issue the amended jury verdict in this action (ECF No. 590) attached as Exhibit 4 to this order.

         IT IS FURTHER ORDERED that the parties shall, within twenty (20) days after entry of this order, prepare an appropriate order setting forth the damages to be awarded to plaintiff as it relates to defendant's AP8900 series of products in accordance with this order and submit the same for signature.

         IT IS SO ORDERED.

         EXHIBIT 1

         AMENDED ORDER

         Before the court is defendant American Power Conversion Corp.'s ("APC") motion for summary judgment on the issues of anticipation, obviousness, and non-infringement. Doc. #287.[1] Plaintiff Server Technology, Inc. ("STI") filed an opposition (Doc. #301) to which APC replied (Doc. #324).[2]

         I. Facts and Procedural History

         A. Procedural Overview

         Plaintiff STI manufactures intelligent power distribution devices. STI brought the underlying patent infringement action against defendant APC alleging that APC's product designs infringe three of its patents: United States Patents numbers 7, 043, 543 ("the '543 patent"), [3]7, 141, 461 ("the '461 patent"), [4] and 7, 702, 771 ("the '771 patent).[5] Specifically, STI alleges that APC's various products infringe claims 1-3, 6, and 15-17 of the '543 patent; claims 1, 3, and 8 of the '461 patent; and claims 15-17 of the '771 patent.

         Like STI, APC manufacturers intelligent power distribution devices. APC denies that its products infringe STI's patents and has raised three defenses: (1) anticipation under 35 U.S.C. § 102; (2) obviousness under 35 U.S.C. § 103; and (3) non-infringement.

         On April 13, 2010, the court issued a Markman order construing various disputed terms of the patents in suit. Doc. #163. Thereafter, APC filed the present motion for summary judgment. Doc. #287. On February 23, 2012, the court heard argument on the motion.

         B. The Patents Generally[6]

         STI's patents in suit ('543, '771, and '461 patents) describe and relate to intelligent power distribution devices, also referred to as "intelligent plugstrips" or "PDUs." Like an ordinary electrical plugstrip used in a home or office, intelligent plugstrips are primarily intended to distribute power from a wall outlet through an input power cord to a number of power outlets. But unlike ordinary plugstrips, intelligent plugstrips are intended for large scale applications such as commercial data centers and include several enhanced features. These enhanced features enable a user to locally or remotely control and monitor the power supply to connected appliances such as computers, servers, routers, and other electronic equipment through various internal relay controls.

         II. Legal Standard

         Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, affidavits or declarations, stipulations, admissions, and other materials in the record show that "there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In assessing a motion for summary judgment, the evidence, together with all inferences that can reasonably be drawn therefrom, must be read in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); County of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001).

         The moving party bears the initial burden of informing the court of the basis for its motion, along with evidence showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On those issues for which it bears the burden of proof, the moving party must make a showing that is "sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party." Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986); see also Idema v. Dreamworks, Inc., 162 F.Supp.2d 1129, 1141 (CD. Cal. 2001).

         To successfully rebut a motion for summary judgment, the non-moving party must point to facts supported by the record which demonstrate a genuine issue of material fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736 (9th Cir. 2000). A "material fact" is a fact "that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, summary judgment is not appropriate. See v. Durang, 711 F.2d 141, 143 (9th Cir. 1983). A dispute regarding a material fact is considered genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Liberty Lobby, 477 U.S. at 248. The mere existence of a scintilla of evidence in support of the party's position is insufficient to establish a genuine dispute; there must be evidence on which a jury could reasonably find for the party. See Id. at 252.

         III. Discussion

         In its motion, APC seeks an order from the court (1) that asserted claims 1, 2, 3, and 6 of the '543 patent are invalid as anticipated under 35 U.S.C. § 102; (2) that asserted claims 15, 16, and 17 of both the '543 patent and the '771 patent are invalid as obvious under 35 U.S.C. § 103; and (3) that accused APC product designs, the AP7900 and AP8900, do not infringe asserted claims 1, 3, and 8 of the '461 patent. Doc. #287. The court shall address each argument below.

         A. Anticipation

         APC argues that claims 1, 2, 3, and 6 of the '543 patent are invalid as anticipated based on two pieces of prior art, the MasterSwitch VM ("MSVM") manufactured by APC and the RPC-21 manufactured by non-party BayTech. Doc. #287.

         In opposition, STI argues that the '543 patent is not anticipated because neither identified prior art design (1) contains a "current-related information display" in "current-related information-determining communication, " or (2) is a "plugstrip" as that term is used and understood in the patent. Doc. #301.

         1. Anticipation Standard

         An issued patent is presumed valid by statute. 35 U.S.C. § 282. However, a patent may be held invalid as a matter of law if it is anticipated. 35 U.S.C. § 102. A patent is anticipated if a single reference, either printed publication or prior use, published more than one year before the date of the patent application, discloses, expressly or inherently, every limitation of the claim such that a person of ordinary skill in the art could practice the invention without experimentation. 35 U.S.C. § 102(b); see also Advanced Display Systems, Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir. 2000).

         The anticipating reference must describe the patented features "with sufficient clarity and detail" such that a person of ordinary skill in the field would recognize the existence of the patent features in the reference. Crown Operations Int'l v. Solutia, Inc., 289 F.3d 1367, 1375 (Fed. Cir. 2002). Moreover, "all of the elements and limitations of the claim must be shown in a single prior reference, arranged as in the claim." Karsten Mfg. Corp. v. Cleveland Golf Co., 242 F.3d 1376, 1383 (Fed. Cir. 2001).

         2. Person of Ordinary Skill in the Art

         A person of ordinary skill in the art is a person presumed to think "along the line of conventional wisdom in the art and is not one who undertakes to innovate, whether by patient, and often expensive, systematic research or by extraordinary insights." Standard Oil Co. v. Am. Cyanamid Co., 7"'4 F.2d 448, 454 (Fed. Cir. 1985). For purposes of this motion, the parties agree that a person of ordinary skill in the art is one who would have an electrical or computer engineering degree (or the equivalent industry experience) and at least one to three years of experience designing power distribution devices.

         3. Identified Prior Art

         APC identifies two pieces of prior art anticipating the '543 patent: the RPC-21[7] and the MSVM.[8] See Doc. #287. Both of these products were advertised and sold in 1999, [9] and as such, these designs pre-date the '543 patent application of December 8, 2000, by more than one year.

         STI concedes that the RPC-21 and MSVM are prior art references for the purpose of the court's anticipation analysis. Further, the parties do not distinguish between the MSVM and the RPC-21 in addressing APC's motion. Therefore, for the sake of simplicity, the court will analyze APC's anticipation arguments using the MSVM design.

         4. Claim Language

         Independent claim 1 of the '543 patent discloses:

An electrical power distribution plugstrip connectable to one or more electrical loads in a vertical electrical equipment rack, the electrical power distribution plugstrip comprising in combination:
A. a vertical strip enclosure having a thickness and a length longer than a width of the enclosure;
B. a power input penetrating said vertical strip enclosure;
C. a plurality of power outputs disposed along a face of said length of the strip enclosure, each among the plurality of power outputs being connectable to a corresponding one of said one or more electrical loads;
D. a plurality of power control relays disposed in said vertical strip enclosure, each among said plurality of power control relays being connected to said power input and in independent power controlling communication with one or more corresponding power outputs among said plurality of power outputs;
E. a current-related information display disposed on said vertical strip enclosure in current-related information-determining communication with at least one among said power input and said plurality outputs; and
F. a current-related information reporting system associated with said vertical strip enclosure and being (i) in current-related information-determining communication with at least one among said power input and said plurality of power outputs, and (ii) connectable in current-related information transfer communication with a separate communications network distal from the electrical power distribution plugstrip.

Doc. #288, Exhibit 1, '543 patent, Col. 10:57-11:19. Claim 2 is a dependent claim of claim 1 and discloses:

The electrical power plugstrip of claim 1 further comprising at least one intelligent power section disposed in the vertical strip enclosure and in which is disposed at least one of the plurality of power control relays.

Doc. #288, Exhibit 1, '543 patent, Col. 11:20-24. Claim 3 is a dependent claim of both claims 1 and 2 and discloses:

The electrical power plugstrip of claim 2 further comprising an external power manager application external to the vertical strip enclosure in network communication with the intelligent power section disposed in the vertical strip enclosure, whereby a user of the of the external power manager may control power provided to selectable ones of said plurality of power outputs.

Doc. #288, Exhibit 1, '543 patent, Col. 11:25-31. Finally, claim 6 is a dependent claim of claim 1 and discloses:

The electrical power plugstrip of claim 1 wherein the current-related information display is in current determining communication with all among the plurality of power outputs through at least one current sensing device.

Doc. #288, Exhibit 1, '543 patent, Col. 11:45-48.

         5. Independent Claim 1

         The plain language of claim 1 requires a power distribution plugstrip with the following limitations: (a) a vertical strip enclosure; (b) a power input; (c) a number of outlets; (d) remotely controllable relays associated with the outlets; (e) a current-related information display; and (0 a current reporting system. See Doc. #288, Exhibit 1, '543 patent, Col. 10:57-11:19.

         In its motion for summary judgment, APC argues that the MSVM includes all these limitations. See Doc. #287. STI concedes that the MSVM meets limitations (a) through (d) of claim 1 but argues that the MSVM does not contain (1) a "current-related information display... in current-related information-determining communication" as required by limitation (e); and (2) a network device contained within the vertical strip enclosure as required by limitation (f). See Doc. #301. The court shall address each argument below.

         a. Current-related Information Display

         In substance, limitation (e) requires that the device contain a display that conveys current-related information. See Doc. #288, Exhibit 1, '543 patent, claim 1(e). During the claim construction process, the court did not construe the phrase "current-related information-determining communication" because the parties agreed that "current-related information-determining communication" meant "communication in which current is measured." See Doc. #94, STI's Opening Claim Construction Brief, p.45-46; Doc. #122, APC's Response, p.39.

         STI now argues that because "current-related information-determining communication" means "communication in which current is measured, " limitation (0 requires that the same measured current information be communicated to the display. STI's interpretation requires a numerical value that is then transmitted and displayed, which, it argues, can only be accomplished through a digital display. Thus, at its core, STI's interpretation of limitation (e) requires a digital display. As the MSVM used an LED display which did not, and could not, display a numerical value, STI argues that it cannot anticipate the '543 patent.

         The court has reviewed the documents and pleadings on file in this matter and finds that, contrary to STI's arguments, (1) limitation (e) does not require a digital display, and (2) the MSVM contains a "current-related information display... in current-related information-determining communication." First, STI's interpretation of limitation (e) is in direct contradiction to the court's claim construction order. In that order, the court found that STI's interpretation of "current-related information display" to mean a digital display that conveyed a numerical current value was contrary to the plain claim language and specification of the '543 patent. See Doc. #163, p. 21-22 ("STI's interpretation is contrary to the terms plain meaning and usage" and "would improperly limit the claim language based on the specification.").

         Second, STI's attempt to salvage its argument by relying on the word "determining" in the claim phrase is equally unavailing. Both claims 1 and 15 of the '543 patent require a display in "current-related information-determining communication, " but while claim 1 discloses a display, claim 15 specifically discloses a digital display confirming that the "determining" language is not determinative for claim construction. STI's attempt to limit claim 1 to require a digital display would render the specific "digital display" language in claim 15 meaningless. See e.g., AllVoice Computing PLC v. Nuance Commc'ns, Inc., 504 F.3d 1236, 1247 (Fed. Cir. 2007) ("[C]laim differentiation takes on relevance in the context of a claim construction that would render additional, or different, language in another independent claim superfluous.").

         Finally, the court finds that the MSVM's LED display does, in fact, display determined current information. The crux of STI's argument is that the only kind of current information that can be determined is a numerical value. However, information other than a numerical value can be "determined." For example, one can determine whether something is hot or cold, without measuring a precise value of temperature. Similarly, a PDU device can determine that current is high or low, or above or below a certain threshold, and this determined information can then be communicated to an LED display.

         Here, it is undisputed that the MSVM's LED determines and communicates a condition: when the PDU is operating in a normal current condition under a pre-programmed threshold value the LED displays a solid green indicator; when the PDU's current draw is approaching an overload condition the LED displays a flashing green indicator; and when the current level has passed the overload condition the LED displays a solid red indicator. See Doc. #310, Exhibit 6, Bors Depo., p.47:13-18. Hence, the MSVM measures the level of input current, determines whether the measured input current is above or below a threshold level, and communicates this information to the LED. Based on this function, the court finds that the MSVM displays determined current-related information, and therefore, meets limitation (e) of the '543 patent.

         b. "Plugstrip"

         STI also argues that the MSVM does not anticipate claim 1 of the '543 patent because it is not a "plugstrip'' as that term is used and understood in the '543 patent. STI contends that claim 1 of the '543 patent discloses a single piece vertical plugstrip that houses all identified parts including the "current-related information reporting system'' disclosed in limitation (f). Because it is undisputed that the MSVM is a two piece device that has a separate network component for remote communication, STI argues it is not a "plugstrip." The court agrees.

         Claim 1 discloses "[a]n electrical power distribution plugstrip... comprising in combination ... (F) a current*related information reporting system associated with said vertical strip enclosure-----" Doc. #288, Exhibit 1, '543 patent, claim 1. The claim term "comprises'' is presumed to mean "includes as a part of." See Crystal Semiconductor Corp. v. TriTech Microelecs. Int 7, /we, 246 T.3d 1336, 1348 (red. Cir. 2001) ("The transition 'comprising' creates a presumption that the recited elements are a part of the [claimed] device"). Thus, the use of the word "comprising" in claim 1 requires that all the limitations of the claim, including the current reporting system, are contained within the plugstrip.

         In opposition, APC argues that limitation (f) only requires that the eurrent-related information reporting system be "associated with" the vertical strip enclosure. APC contends that the use of the phrase "associated with'' means that the reporting system need not reside in the plugstrip. However, the term "associated with'" must be understood in the context of the entire patent. The '543 patent as a whole makes it clear that the "plugstrip" is a one-piece, fully integrated device. Tirst, the patent is entitled "Vertical-Mount Electrical Power Distribution Plugstrip." Second, the summary of the invention refers repeatedly to the invention as a "power distribution plugstrip." Third, the specification describes the device as a fully integrated plugstrip. See Doc. #288, Exhibit 1, '543 patent, Col. 10:17-18 ("All of PDU is preferably fully integrated within power distribution plugstrip-----"). Finally, the design of the plugstrip shown in Figure 1 displays a one-piece plugstrip that houses all the design features, including the reporting system. See Doc. #288, Exhibit 1, '543 patent, Figure 1. Therefore, the court finds that claim 1 discloses a fully integrated plugstrip that contains the current-related information reporting system.

         Decause the reporting system of the MSVM is an external system eonneeted to the plugstrip by a cable, it is not contained within the plugstrip. As such, the MSVM does not meet limitation (f). Therefore, the MSVM does not contain every limitation of claim 1 and cannot anticipate claim 1 as a matter of law. See Kunlen Mfg. Cot p., 242 T.3d at 1383 ("[A]ll of the elements and limitations of the claim must be shown in a single prior reference, arranged as in the claim."). Accordingly, the court shall deny APC?s motion for summary judgment on the issue of anticipation.

         5. Remaining Claims

         Claims 2, 3, and 6 of the '543 patent are dependent claims of claim 1. Decause the court finds that claim 1 is not anticipated by the MSVM as addressed above, these dependent claims are also not anticipated.

         B. Obviousness

         In its motion for summary judgment, APC argues that asserted claims 15, 16, and 17 of both the '543 patent and '771 patent are invalid as obvious under 35 U.S.C. § 103. Specifically, APC argues that a person of ordinary skill in the art would have combined APC's prior art PDU, the MSVM, with APC's identified prior art digital displays, United States patents no. 5, 650, 771[10] ("the Lee patent") and 6, 476, 729[11] ("the Liu patent"), to arrive at STI's patented PDU designs in order to alleviate the known problem of alerting an end-user to a current overload condition.[12] See Doc. #287.

         In opposition, STI argues that summary judgment is not appropriate because: (1) combining the MSVM with the digital displays disclosed in the Lee and Liu patents does not encompass the design disclosed in independent claim 15; (2) there is a disputed issue of material fact as to whether one skilled in the art would have had a reason to combine the prior art references; and (3) there is sufficient evidence of secondary considerations to support a finding of non-obviousness on summary judgment. See Doc. #301.

         The court has reviewed the documents and pleadings on file in this matter, as well as the arguments and submissions by counsel at the February 23, 2012 hearing, and finds that there are disputed issues of fact as discussed below precluding summary judgment that claims 15, 16, and 17 of the '543 and '771 patents are invalid as obvious under 35 U.S.C. §103. Accordingly, the court shall deny APC's motion for summary judgment on this issue.

         1. Obviousness Standard

         Under the Patent Act, a patent may be deemed invalid as a matter of law "if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." 35 U.S.C. § 103(a).

         A patented invention is obvious if a person of ordinary skill in the art would have had a reason to combine the particular elements or technologies in the way the claimed new invention does. KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007). The mere fact that prior references could be combined to reach the patented design does not render the resultant combination obvious absent a reason to combine the references in such a manner. In re Mills, 916 F.2d 680, 682 (Fed. Cir. 1990). This "apparent reason" can be shown by identifying some teaching, suggestion or motivation in the prior art to combine or modify the prior art in the manner identified in the claims. KRS, 550 U.S. at 418-19. However, an invention is not obvious "where vague prior art does not guide an inventor toward a particular solution." Bayer Schering Pharma AG v. Barr Labs., Inc., 575 F.3d 1341, 1347 (Fed. Cir. 2009). For purposes of summary judgment, the evidence must support particular findings "as to the reason the skilled artisan, with no knowledge of the claimed invention, would have selected these components for combination in the manner claimed." In re Kotzab, 217 F.3d 1365, 1371 (Fed. Cir. 2000).

         Although the ultimate determination of obviousness under § 103 is a question of law, it is based on several underlying factual findings, including (1) the scope and content of the prior art; (2) the level of ordinary skill in the pertinent art; (3) the differences between the claimed invention and the prior art; and (4) evidence of secondary factors, such as commercial success, long-felt need, and the failure of others. Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966). A defendant proffering the affirmative defense of obviousness bears the burden to prove the patent is obvious by clear and convincing evidence. Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 962 (Fed. Cir. 2001); see also, Finnigan Corp. v. Int'l Trade Comm 'n, 180 F.3d 1354, 1365 (Fed. Cir. 1999).

         2. Prior Art

         For purposes of the present motion, the parties agree that the MSVM, Lee patent, and Liu patent are prior art references to STI's '543 and '771 patents. The parties further agree that both the Lee and Liu patents disclose a digital display to measure and display current on a power regulating device.[13]

         3. Person of Ordinary Skill in the Art As stated above, the parties agree that a person of ordinary skill in the art is one who would have an electrical or computer engineering degree (or the equivalent industry experience) and at least one to three years of experience designing power distribution devices.

         4. Claim Language

         Independent claim 15 - and thereby dependent claims 16 and 17 - contains the same limitations identified in claim 1 of the '543 patent except claim 15 also requires a digital current information display. Specifically, claim 15 discloses:

An electrical power distribution plugstrip connectable to one or more electrical loads in a vertical electrical equipment rack, the electrical power distribution plugstrip comprising in combination:
A. a vertical strip enclosure having a thickness, and a length longer that a width of the enclosure;
B. a power input penetrating said vertical strip enclosure;
C. a plurality of power outputs disposed along an area on a face of said length of the strip enclosure, each among the plurality of power outputs being connectable to a corresponding one of said one or more electrical loads;
D. a plurality of power control relays disposed in said vertical strip enclosure, each among said plurality of power control relays being connected to said power input and to one or more corresponding power outputs among said plurality of power outputs;
E. a digital current information display disposed on another area of said vertical strip enclosure and adjacent to said plurality of outputs in current-determining communication with at least one among said power input and said power outputs; and
F. a plugstrip current reporting system (i) associated with the vertical strip enclosure (ii) in power information determining communication with at least one among said power input and said plurality of power outputs, and (iii) communicatingly connectable with a distal current reporting system through a communications network external to the electrical power distribution plugstrip.

Doc. #288, Exhibit 1, '543 patent, Col. 12:21-50. Claim 16 is a dependent claim of claim 15 and discloses:

The electrical plugstrip of claim 15 further comprising at least one intelligent power section disposed in the vertical strip enclosure and in which is disposed at least one of the plurality of power control relays.

Doc. #288, Exhibit 1, '543 patent, Col. 12:51-54. Claim 17 is also a dependent claim of both claims 15 and 16 and discloses:

The electrical power plugstrip of claim 16 further comprising, an external power manager application external to the vertical strip enclosure in network communication with the intelligent power section disposed in the vertical strip enclosure, whereby a user of the external power manager may control power provided to selectable ones of said plurality of power outputs.

Doc. #288, Exhibit 1, '543 patent, Col. 12:55-62.

         Claims 15-17 of the '771 patent are virtually identical to those of the '543 patent, except that the '771 patent claims are broader in nature in that they are not limited to a "vertical" device. See Doc. #288, Exhibit 47, '771 patent, Col. 12:19-57. Because the claims of the '771 patent are broader than those of the '543 patent, a finding that the '543 patent claims are not obvious necessarily means that those of the '771 patent are likewise not obvious. Thus, for purposes of this motion, the court analyzes obviousness with respect to the claims of the '543 patent only.

         5. Combined Prior Art

         In order for a patented design to be obvious as a matter of law, the combination of all prior art references must include all the limitations of the patented design. See KRS, 550 U.S. at 418-t419. As addressed in the previous seetion on anticipation, the court has found that the MSVM does not contain all the limitations of claim 1 of the '543 patent because the MSVM does not contain a current-related information reporting system contained within the vertical plugstrip enclosure. That finding carries over to the court's analysis of obviousness. Thus, for claim 15 of the '543 patent to be obvious, that additional limitation, along with the disclosure of a digital display, must be found in the Lee and Liu patents. Reviewing the Lee and Liu patents, the court finds that neither reference meets the "plugstrip" limitation of claim 1, and thus does not meet the same limitation of claim 15. Because the Lee and Liu patents do not disclose this limitation, combining these references with the MSVM does not reach the patented design of claim 15 of the '543 patent. Therefore, the patented design cannot be held invalid as obvious as a matter of law. Accordingly, the court shall deny APCs motion as to this issue. Nevertheless, the Court will consider the obviousness question in light of the remaining Graham factors.

         6. Reason to Combine

         APC argues that a person of ordinary skill in the art would have combined the identified prior art references in order to solve the known problem of how to alert a user about a possible current overload condition. See Doc. #287. APC contends that during the relevant time period, those skilled in the art were aware of the problem of excessive current levels in a PDU and knew that adding a display showing current output could alert the end user that he was approaching a current overload condition.

         It is undisputed that both an LED and a digital display were known design options to those in the art as a way to alert a» end user of a possible current overload condition.[14] However, the relevant question before the court is not whether a digital display was a known option to alert an end-user to a current overload condition as APC contends, but whether one skilled in the art would have had a reason to use a digital display as a design alternative to an LCD. See In re Kotzab, 217 F.3d at 1371 (holding that for a patent to be obvious, a person of ordinary skill must have had a reason to use a particular component over another). As the problem of alerting an end-user to a current overload condition was already addressed in the market by the use of an LCD, for the digital display to be obvious, a person of ordinary skill must have had a reason, articulated by clear and convincing evidence, to use the digital display in lieu of an LCD.

         Here, viewing the evidence in the light most favorable to STI, the court finds that there was no reason a person of ordinary skill would have combined a digital display into a vertical plugstrip solely to alert an end-user of a current overload condition. The evidence before the court establishes that an LCD worked better than a digital display for alerting an end-user to a current overload condition. See Doc. #310, Cxhibit 14, Rohr Dcpo., p.296:8:297:7 (testifying that a digital display was too "complex** and that an LCD was the "best solution'' to providing an end-user with a visual display). In particular, Alex North, the lead engineer at DayTech testified that he believed a display was "worthless" because an LCD indicator provided technicians with all of the information required. Doc. #310, Cxhibit 12, North Dcpo., p.72:10-73:13; p. 146:17-147:7. Further, the evidence establishes that a digital display was more costly than an LCD display to add to a vertical plugstrip and lead to additional unnecessary "complications" in product design. Doc. #310, Cxhibit 14, Rohr Dcpo., p.29G:8-297:7.

         Finally, the evidence establishes that there were no design incentives to incorporate a digital display into a PDU. APC's expert Douglas Dors, in his export report, stated that there was no need for a digital display because users had acceptable alternative means, including the use of manufacturers' "name plate" data, to determine appropriate equipment use. Doc. #314, Exhibit 1, Dors Expert Report, § 247. Thus, designers during that time thought the inclusion of a digital display was unnecessary. Dased on the foregoing, the court concludes that there is no clear and convincing evidence establishing any reason for a person of ordinary skill to include a digital display in a PDU.

         7. Secondary Considerations of Non-Obviousness

         Defore a court can make a finding of obviousness, and thereby hold a patent invalid, a court must determine whether there are any "secondary considerations" supporting a finding of nonobviousness. KSR bit'l Co. v. Tele/lex, Inc., 550 U.S. 398, 405 (2007). This is because "[s]econdary considerations 'may often establish that an invention appearing to have been obvious in light of the prior ail was not.™ Ools. Inc. v. ITC, 598 T.3d 1294, 1310 (red. Cir. 2010) (quoting Stiatoflex, Inc. v. Ateouuip Corp., 713 T.2d 1530, 1538 (red. Cir. 1983)). Further, "[s]secondary considerations 'can be the most probative evidence of nomobviousness in the record, and enables the... court to avert the trap of hindsight."" Id. (quoting Custom Accessories, Inc. v. Jeffrey-Allan Indus., /a., 807 T.2d 955, 900 (red Cir. 1980)); see also, Gambro Lundia AD v. Daxtei Ilealt/icaie Cut p., 110 F.3d 1573, 1579 (Fed. Cir. 1997) (citing Stiatoflex, Inc., 713 F.2d at 1538 ("[O]bjcetive indicia may often be the most probative and cogent evidence [of non-obviousness] in the record.).

         Secondary considerations relevant to an obviousness determination include: commercial success; skepticism in the field; copying by others; meeting a long felt, but unsolved need; and failure by others. See e.g., KRS, 550 U.S. at 405 (commercial success and long felt need); Metabolite Labs. Inc. v. Lab. Corp. of Am. Holdings, 370 T.3d 1354, 1308 (Fed. Cir. 2004) (initial skepticism); Akami Techs., Inc. v. Cable & Wireless Set vs., Inc., 344 F.3d 1180, 1190 (red. Cir. 2003) (copying); Tiansocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., 617 T.3d 1296, 1304-05 (Fed. Cir. 2010) (affirming non-obviousness based on commercial success, copying by others).

         In further support of its opposition, STI argues that substantial evidence of secondary considerations establish that adding a digital display to a vertical plugstrip was not obvious. See Doc. #301. hi particular, STI focuses on (1) the commercial success of its digital display PDUs; (2) subsequent copying by others, including APC; and (3) a long felt, but unsolved need of knowing the exact measured current value. As addressed below, the court finds that STTs evidence of secondary considerations supports the court's finding that claims 15-17 of the '543 and '771 patents are not obvious.

         a. Commercial Success

         Initially, STI argues that the commercial success of its digital display PDUs establishes the products' novelty and non-obviousness.

         Taken in the light most favorable to STI, the evidence indicates that STI's digital display PDUs have been commercially successful. First, the combined sales revenue for STI's PDUs containing a digital display have grown significantly over the last several years since their introduction in 2003. Doc. #13, Exhibit 41, Cwing Dccl., ¶14, 17-18. Second, STI's products have carved out a large market share of the total intelligent PDU market. Id. at ¶21-22 (quoting Prost & Sullivan Award for Product Line Strategy through Competitive Growth Strategy Report).

         Further, the evidence supports STI's contention that its commercial success is related directly to the use of a digital display in its PDUs. Id. at ¶ 21 (quoting Trost &. Sullivan Award for Product Line Strategy through Competitive Growth Strategy Report) ("Server Technology, Inc. was the first company to bring input eurrent monitoring (ICM) to the market with digital display indicators built into the Sentry enclosures to report the true RMS input.").

         b. Copying By Others

         STI also contends that its design of a digital display has now become the industry standard in vertical PDUs, farther establishing the patented design's novelty and non-obviousness.

         Viewing the evidence in the light most favorable to STI, the court finds that STI's digital display has now become the industry standard. See Doc. #311, Exhibit 1, Mares Decl., ¶23 ("[V]ertieal PDUs having a local display remote reporting, and switchable output design characteristics have become a de facto standard in the industry.''). Testimony of representatives from both APC and DayTech confirms this fact. APC's designer, Joe Kramer, testified that he was "not aware of a single competing product'' available today without the local current display. Doc. #310, Exhibit 9, Kramer Depo., p. 171:5-172:17. Turther, DayTech's lead engineer Alex North testified that having a digital display is standard, and that DayTech "would be at a competitive disadvantage" if it did not have a digital current display. Doc. #310, Exhibit 12, North Depo., p.239:22-240:4;p.303:8-17.

         c. Long Felt, but Unsolved Need

         Finally, STI argues that its digital display solved the problem of allowing an end-user to maximize the capacity of each individual PDU which was a desired outcome. It is undisputed that prior art intelligent PDUs did not provide an end-user with a measured value of how much current was being drawn by the equipment connected to the PDU. It is farther undisputed that end-users wishing to maximize PDU efficiency by connecting the maximum amount of equipment into each PDU would have to add pieces individually to see when a current overload condition was being approached. STI argues that its digital display allowed an end-user to locally determine how much current was being used and therefore maximize the total draw of the PDU without overloading the plugstrip and causing the connected equipment to fail.

         STI argues that at the time it was necessary for end-users to know, particularly in large data centers, how much equipment could be connected to an individual PDU to maximize efficiency and save space. Data center technicians using conventional methods without readily visible digital displays would risk making significant and costly errors in determining power consumption and in building data centers. LCD displays did not provide this information and discouraged users from adding additional equipment to the racks, whereas digital displays showed exaetly how much eurrent was being used. The digital display end user knew how much more eurrent he could draw, and how many more pieces of equipment could be added before reaching an overload condition. The ability to monitor current levels locally allowed users to observe the amount of remaining capacity, and determine actual power consumption of the various network devices and storage equipment.

         In short, reviewing the evidence in the light most favorable to STI, it appears that only STI solved the problem arising from the lack of a digital display: that technicians needed detailed information concerning the amount of current drawn by a PDU displayed direetly on the PDU. It appears that STI alone discovered that a eurrent»related information display could be used to maximize rack capacity.

         C. Patent Non-Infringement ['461 Patent]

         In its motion for summary judgment, APC argues that its accused product designs, the AP7900 and AP8900, do not infringe claims 1, 3, and 8 of the '461 patent because these designs do not: (1) include a current sensor in communication with a communication bus; (2) display "power-related information;" (3) monitor or display parameters at ...


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