Demodulation, Inc. v. United States , 126 Fed. Cl. 499 ( 2016 )

In the United States Court of Federal Claims
No. 11-236C
(Filed: April 18, 2016)
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DEMODULATION, INC., *
*
Plaintiff, * Patent Infringement; Accused
* Product or Device; Summary
v. * Judgment; Motion to Amend
* Infringement Contentions and Claims
THE UNITED STATES, * Chart.
*
Defendant. *
*
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Keith A. McKenna, The McKenna Law Firm LLC, Montclair, New Jersey, with whom was
Ernest D. Buff, Ernest D. Buff & Associates, LLC, Bedminster, New Jersey, for Plaintiff.
Gary L. Hausken, with whom were Benjamin C. Mizer, Principal Deputy Assistant
Attorney General, John Fargo, Director, and Alice Suh Jou, Of Counsel, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice, Washington, D.C., for
Defendant.
OPINION AND ORDER ON DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT
WHEELER, Judge.
This patent infringement and trade secrets case has been in this Court for six years.
The case has a somewhat notorious history involving the imposition of sanctions against
Plaintiff and its original counsel for protective order violations, mistreatment of a
subpoenaed non-party, and the Plaintiff’s inability to identify any specific facts to support
its trade secret claims. At long last, Plaintiff’s remaining patent infringement claims have
been exposed as a further “smoke and mirrors” ruse lacking any substance. While the
record in this case consists of 219 entries, there is simply nothing there. As explained
below, due to Plaintiff’s failure to identify any specific accused product or device that
infringes Plaintiff’s patents, Defendant’s motion for summary judgment is granted.
Factual Background
On April 14, 2011, Plaintiff Demodulation, Inc. (“Demodulation”) filed a complaint
in this Court against the United States seeking approximately $50 million in damages for
breach of contract, misappropriation of trade secrets, and infringement of thirteen U.S.
patents.1 In its complaint, Demodulation alleged that the Department of Energy and the
National Nuclear Security Administration, among other agencies, stole Demodulation’s
proprietary technology, intellectual property, and trade secrets. Plaintiff’s third amended
complaint, filed on March 28, 2014, contained the following five counts: (1) breach of
express contract pursuant to 28 U.S.C. § 1491; (2) breach of implied contract pursuant to
28 U.S.C. § 1491; (3) patent infringement pursuant to 28 U.S.C. § 1498; (4) violation of
Plaintiff’s substantive and procedural due process rights and taking without just
compensation pursuant to the Fifth Amendment; and (5) misappropriation of trade secrets.
3d Am. Compl. ¶¶ 62-94. Presently, due to the Court’s prior rulings, only some of
Plaintiff’s patent infringement claims in Count Three remain. See Demodulation, Inc. v.
United States, 118 Fed. Cl. 69, 76 (2014) (“Demodulation I”) (granting in part Defendant’s
motion to dismiss Count Four for lack of subject matter jurisdiction and motion for partial
summary judgment with respect to Count Three); Demodulation, Inc. v. United States, 122
Fed. Cl. 652, 654-55 (2015) (“Demodulation II”) (dismissing all of Plaintiff’s trade secrets
claims included in Counts One, Two, Four, and Five as a sanction for Plaintiff’s counsel’s
willful violations of the Court’s orders relating to the Government’s discovery requests);
Demodulation, Inc. v. United States, 123 Fed. Cl. 98, 104-05 (2015) (“Demodulation III”)
(granting Defendant’s motion for partial summary judgment as to Plaintiff’s breach of
contract claim in Count One and finding moot Defendant’s motion for summary judgment
on the trade secrets claims in Count One, and all of the claims in Counts Two and Five).
In Count Three of its third amended complaint, Plaintiff alleges that the Government
infringed on thirteen of Plaintiff’s patents in violation of 28 U.S.C. § 1498. 3d Am. Compl.
¶¶ 79-86. In Demodulation I, the Court held that twelve of the thirteen asserted patents
had expired and granted the Government’s motion for summary judgment as to any
allegations of post-expiration use. Demodulation I, 118 Fed. Cl. at 74-75. In that opinion,
the Court dismissed the thirteenth patent, U.S. Patent No. 6,270,591 (“the ‘591 Patent”)2,
from the case after finding that Demodulation lacked ownership rights. Id. at 76. Thus, all
that remains before the Court are Demodulation’s claims for pre-expiration infringement
on U.S. Patent Nos. 5,557,085 (“the ‘085 Patent”); 5,576,693 (“the ‘693 Patent”);
6,018,297 (“the ‘297 Patent”); 6,137,411 (“the ‘411 Patent”); 6,225,905 (“the ‘905
Patent”); 6,232,879 (“the ‘879 Patent”); 6,417,771 (“the 771 Patent”); 7,071,417 (“the ‘417
Patent”); 7,075,439 (“the ‘439 Patent”); 7,233,249 (“the ‘249 Patent”); 7,354,645 (“the
‘645 Patent”); and 7,368,166 (“the ‘166 Patent”).
1
The Clerk’s Office of the Court transferred the case to Judge Wheeler on August 26, 2013.
2
For purposes of convenience, it is common practice to “use the last three digits of the patent number to
refer to a specific patent.” Federal Judicial Center, Anatomy of a Patent Case 3 (2d ed. 2012).
2
The asserted patents involve a highly specialized material consisting of glass-coated
amorphous metal filament or wire, which Demodulation calls “microwire.” 3d Am.
Compl. ¶80. Specifically, the patents relate to the manufacture, detection, and
manipulation of microwire.3 Id. Microwire, which is purportedly thinner than a human
hair, is particularly useful in electronic surveillance systems because it broadcasts a distinct
signal when struck by radio frequency waves and thus, the signal may be detected from
several kilometers away without the need for a physical connection. Demodulation III,
123 Fed. Cl. at 99. Demodulation seeks reasonable and entire compensation for the
Government’s alleged use or manufacture of inventions using microwire and covered by
the twelve asserted patents. 3d Am. Compl. at ¶¶ 79-86; 28 U.S.C. § 1498(a).
Following the close of fact discovery on June 30, 2015, and after the Court
dismissed all of Plaintiff’s trade secret and breach of contract claims, the Court entered a
scheduling order adopting the parties’ Joint Proposed Schedule for Claim Construction
(“Schedule”).4 Dkt. No. 171. Pursuant to the Schedule, Demodulation served the
Government with its Disclosure of Asserted Claims and Infringement Contentions on
November 19, 2015. Demodulation filed a similar, albeit much abbreviated disclosure with
the Court on the same day. Dkt. No. 181. According to the terms of the Schedule,
Demodulation’s disclosure was to include, “[s]eparately for each asserted claim, each
accused apparatus, product, device, process, method, act, or other instrumentality
(“Accused Instrumentality”) of the United States of which Plaintiff is aware. This
identification shall be as specific as possible. Each product, device, and apparatus shall be
identified by name or model number, if known.” Schedule at 3.
On November 25, 2015, counsel for the Government informed counsel for
Demodulation that the Government considered all of Demodulation’s infringement
contentions deficient. Shortly thereafter, the parties met and conferred telephonically.
Gov’t. Mot. at 5. During that conference, counsel for the United States outlined what the
Government considered “key deficiencies” in Demodulation’s infringement contentions.
Id. Based on those deficiencies, the Government concluded that summary judgment was
appropriate for all remaining patent claims. Id. at 5-6. On January 12, 2016, after
Demodulation declined to withdraw its infringement claims, the Government filed a
motion for summary judgment of noninfringement for all patents remaining in this
litigation. Demodulation responded to the Government’s motion on February 12, 2016.
Along with its response, Demodulation filed a Motion for Leave to Amend its Disclosure
of Asserted Claims and Contentions and/or Infringement Claim Charts. Dkt. Nos. 201-03.
Included with Plaintiff’s motion were no fewer than 1,000 pages of exhibits. Id. On
3
Although the ‘085, ‘693, ‘297, ‘879, ‘771, and ‘166 Patents refer to both methods and devices, the
inventions covered by these patents are actually either products or products by processes.
4
The Schedule is based on the Local Rules of Practice for Patent Cases before the United States District
Court for the Northern District of California (“N.D. Cal. Patent Local Rules”). As the Schedule is based
on the N.D. Cal. Patent Local Rules, the Court considers those rules, as well as the cases interpreting those
rules, to be particularly relevant.
3
February 18, 2016, the Court issued an order staying all briefing and proceedings relating
to claim construction until after resolution of the Government’s motion for summary
judgment. The parties have now fully briefed the Government’s motion for summary
judgment of noninfringement, and the Court heard oral argument on March 16, 2016.
Analysis
A. Standard of Review
1. Jurisdiction
The Court of Federal Claims possesses exclusive jurisdiction to entertain suits
against the United States brought by an owner of a U.S. patent to recover reasonable and
entire compensation for the use or manufacture “by or for the United States without license
of the [patent] owner” of the “invention described in and covered” by the patent. 28 U.S.C.
§ 1498(a). Under section 1498, the patent holder may recover “his reasonable and entire
compensation for such use and manufacture.” Id.
2. Summary Judgment of Noninfringement
Summary judgment is appropriate where “the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as a matter of law.” RCFC 56(c).
A fact is “material” if it might significantly alter the outcome of the case under the
governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving
party bears the initial burden of showing that there exists no genuine dispute as to any
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Even when the movant
does not bear the burden of proof on the issue that is the subject of the movant’s motion
for summary judgment, the moving party nevertheless must meet “the initial burden of
coming forward with sufficient evidence to demonstrate that there is no material issue of
fact that would preclude summary judgment, and that it is entitled to judgment as a matter
of law.” Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 806 (Fed. Cir. 1999).
The moving party may meet its initial burden by showing an absence of proof as to an
essential element of the nonmoving party’s case because failure to prove “an essential
element of the nonmoving party’s case necessarily renders all other facts immaterial.”
Celotex, 477 U.S. at 323. Once the moving party meets its initial burden, the burden shifts
to the nonmoving party who must then come forward with sufficient evidence to show that
a genuine issue of material fact exists for trial. Crown Operations Int’l, Ltd. v. Solutia,
Inc., 289 F.3d 1367, 1377 (Fed. Cir. 2002) (citing Celotex, 477 U.S. at 322-23).
A central purpose “of the summary judgment rule is to isolate and dispose of
factually unsupported claims or defenses . . . .” Celotex, 477 U.S. at 323-24. While
dismissal of factually unsupported claims is proper pursuant to Rule 56, “the purpose of
summary judgment is not to deprive a litigant of a trial, but to avoid an unnecessary trial
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when only one outcome can ensue.” Vivid Techs., 200 F.3d at 806. To that end, “the plain
language of Rule 56(c) mandates the entry of summary judgment, after adequate time for
discovery and upon motion, against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party’s case, and on which that party
will bear the burden of proof at trial.” Celotex, 477 U.S. at 322.
Patent infringement claims involve mixed questions of fact and law, Teva Pharm.
USA, Inc. v. Sandoz, Inc., 135 S.Ct. 831, 837-42 (2015), but summary judgment of
noninfringement nonetheless is proper when the moving party shows that “on the correct
claim construction, no reasonable jury could have found infringement on the undisputed
facts or when all reasonable factual inferences are drawn in favor of the patentee.”
TechSearch, LLC v. Intel Corp., 286 F.3d 1360, 1371 (Fed. Cir. 2002); see also, Bus.
Objects, S.A. v. Microstrategy, Inc., 393 F.3d 1366, 1371-72 (Fed. Cir. 2005).
Determining a claim of patent infringement involves a two-step inquiry. Advanced
Cardiovascular Sys., Inc. v. Scimed Life Sys., Inc., 261 F.3d 1329, 1336 (Fed. Cir. 2001).
First, the Court must construe the patent claims to define “the scope of the patentee’s
rights.” Teva Pharm. USA, 135 S.Ct. 831, 835 (2015) (quoting Markman v. Westview
Instruments, Inc., 517 U.S. 370, 372 (1996)). “Second, the claims, as construed, are
compared to the accused device.” Advanced Cardiovascular Sys., 261 F.3d at 1336(citations omitted).
In patent cases, it can be “appropriate to construe the claims at issue with knowledge
of the accused device as opposed to considering claim construction issues in the abstract.”
Iris Corp. Berhad v. United States, 84 Fed. Cl. 12, 16 (2008); see Exigent Tech., Inc. v.
Atrana Solutions, Inc., 442 F.3d 1301, 1310 n.10 (Fed. Cir. 2006) (“[I]t is appropriate for
a court to consider the accused device when determining what aspect of the claim should
be construed.”). Nevertheless, although “it is convenient for the court to concentrate on
those aspects of the claim[s] whose relation to the accused device [are] in dispute,” the
claim construction process “is independent of the device charged with infringement.” Pall
Corp. v. Hemasure Inc., 181 F.3d 1305, 1308 (Fed. Cir. 1999). However, even though the
claim construction process is independent of the accused device, the ultimate purpose of
construing the claims in a patent infringement action is to be able to compare them against
the accused device to determine whether the accused device infringes on the asserted patent
claims. In the end, in order for the plaintiff in a patent infringement action to prevail, “the
plaintiff must establish by a preponderance of the evidence that the accused device
infringes one or more claims of the patent . . . .” Advanced Cardiovascular Sys., 261 F.3d
at 1336.
B. The Asserted Patents
1. U.S. Patent No. ‘591
As indicated above, this Court has already dismissed the ‘591 Patent from this
litigation. In Demodulation I, this Court held that Demodulation lacked ownership rights
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to the ‘591 Patent and therefore, as a mere licensee, it did not have the right to sue for
infringement. Demodulation I, 118 Fed. Cl. at 75-76. Why Plaintiff continues to assert
this claim after the Court dismissed the ‘591 Patent with prejudice from this case is
unknown.
2. U.S. Patents Nos. ‘085, ‘693, ‘297, ‘411, ‘905, ‘879, 771, ‘417, ‘439,
‘249, ‘649, and ‘166
The Court finds that no genuine issue of material fact exists and therefore summary
judgment for Defendant may be granted. Specifically, summary judgment of
noninfringement is appropriate for each of the asserted patents because Demodulation has
failed to identify any accused infringing products. Section 1498(a) contemplates
reasonable and entire compensation for the Government’s “use or manufacture” of the
patented invention. Accordingly, in order for Demodulation to prove infringement, it must
identify a specific infringing product being used or manufactured by the Government.
Plaintiff has not met this burden. Demodulation filed its first complaint in this case over
six years ago. To date, and after more than two years in which fact discovery was available,
Demodulation has failed to identify a single accused device that the Government has either
used or manufactured to compare to the claims under any construction by this Court.
As shown below, Demodulation has provided the Court with expansive amounts of
text, but when analyzed, the words simply are generic areas of technology lacking any
detailed product information. The following table includes the terms Plaintiff lists as
accused “devices” or “products” in its infringement forms and claims chart:
U.S. Patent No. Accused “Products”
The ‘085 Patent “Remote sensing devices”; “transponder units . . . ; e.g., passive radio
frequency identification (RFID) tag”; “surface acoustic wave (SAW)
devices”; “Magnetometers, Delay Line, Pulse Generators, Magnetic
Torque/Tension Sensor, Magnetic Field, Current, Torque and Stress
Sensors”; “field sensors . . . (e.g. U.S. Navy NUWC-Newport & Y-
12 patents)”; “munitions guided systems”; “SPAWAR used in space
applications”; “magnetic drive in gates or portals”; “drones”; “remote
sensing devices that use an electronic identification device capable of
using/generating a magnetic field for an interrogation zone; a radio
frequency field to remotely interrogate the sensor (both
electromagnetic fields) to transmit and receive the RF signal via the
encoded identification data and transponder units (including all
amorphous metal structures).” Pl.’s Disclosure at 2-7.
“Patents generated by BWXT.” Pl.’s Disclosure, Ex. 2 at 1.
The ‘693 Patent “Microwire Detection-Tracking-Sensor System”; “Electronic Label
(Tag)”; “Label/Marker/Tag/Sensor”; “sensor/tracking components”;
“sensor platforms including plurality of wires in various
6
configurations”; “Systems of detection . . . that utilize the electronic
components defined in this patent”; “RFID Tag”; “a Magnetic sensor
. . . (see NUWC Patents 7,405,559 and 8,686,715)”; “DOE Y-12
Patents 8,871,523 and 9,146,168.” Pl.’s Disclosure at 7-10.
“Microwire Detection-Tracking-Sensing System.” Pl.’s Disclosure,
Ex. 2 at 2.
The ‘297 Patent “a multi-bit tag that provides the ability to track specific items for
human or other asset tracking (cell phone, munitions, etc.)” Pl.’s
Disclosure at 10-11.
The ‘411 Patent “a remote sensing devices use an electronic identification device
capable of creating a magnetic field for an interrogation zone”;
“transponder units (such as glass-coated amorphous microwire or
other device[)]”; “e.g. radio frequency identification (RFID) tag that
is encoded with unique digital information (bits) representing a
unique alpha-numeric sequence of information or item-specific
information”; “controllers that are arranged to use information on the
phase between demodulation to determine the position [of] a sensor
in space”; “controllers operatively connected to devices for acoustic
indication for sensor information data including position and
displacement”; “detection systems using magnetic drive that are
arranged parallel to the ground plane”; “amorphous metal wires tapes
tags sensors markers . . . in the use of low observable technologies”;
“coil arrangement in a frame with electrical conductors wrapped one
or more turns”; “sensor deployment comprising an element of an
amorphous magnetic material.” Pl.’s Disclosure at 11-14.
The ‘905 Patent “numerous systems that apply both radio frequency and magnetic
capabilities set forth in this patent”; “[s]ensors, magnetometers, delay
lines, tracking and tagging devices, undersea low observable
technologies, apertures affixed to exterior surfaces, in situ remote
sensing, condition monitoring, munitions, stealth, medical and
others.” Pl.’s Disclosure at 14-17.
The ‘879 Patent “the remote sensing device’s use [of] an electronic device capable of
using/generating a magnetic field for an interrogation zone”;
“transponder units (including all amorphous metal structures or other
device[)] affected by both radio frequency (RF) and magnetic energy;
e.g. passive radio frequency identification (RFID) tag that is encoded
with unique digital information (bits) representing a unique alpha-
numeric sequence of information or item-specific information”;
“surface acoustic waves (SAW) devices”; “sensors for stress and
explosive [d]etection/tracking”; “systems where the permeability of
the metal alloy was influenced through a varying magnetic field”;
“systems containing a wire shaped element that has an essentially
circular cross section and is straight in a longitudinal direction of the
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element”; “a method of [d]etection of objects in an interrogation
zone.” Pl.’s Disclosure at 17-21.
The ‘771 Patent “uses of [] an amorphous A method for remote detection of objects”;
“systems that demodulate electromagnetic reply signals and detect
frequency shift in the demodulated reply signal.” Pl.’s Disclosure at
21-22.
The ‘417 Patent “tracking, anti-counterfeiting and sensor devices”; “repeatable and
stable sensor tags and devices for magnetic switching and domain
excitation”; “optical emission scanners . . . for anti-counterfeiting
application.” Pl.’s Disclosure at 22-25.
The ‘439 Patent “sensor platforms”; “material on the surface of amorphous metal
sensor elements that expansion contraction properties acted like as a
heat shrinkable material, to alter the state of a sensor element.” Pl.’s
Disclosure at 25-26.
The ‘249 Patent “sensors, tracking devices and anti-counterfeiting devices deploying
at minimum one bit of encoding information”; “sensor elements”;
“computer interface systems with labview signal processing
capability”; “amorphous metal wires, nanocrystalline and
amorphous, wires having the glass coatings removed”; “condition
monitoring devices”; “strain, torque, tension sensors”; “energy
harvesting devices”; “optical fiber applications; such as security,
condition monitoring and the monitoring of data flows and speed”;
“information data emitting from encoded amorphous metal
elements”; “amorphous metal wire”; “sensor systems at BWTX.”
Pl.’s Disclosure at 26-29.
“sensor systems at DOE’s Y-12 Plant.” Pl.’s Disclosure, Ex. 2 at 9.
The ‘645 Patent “microwires”; “sensor systems”; “[p]roducts [] described in BWTX
patents and publications”; “microwire products including different
metal compositions”; “new and specialized composite wires”; “the
elastic modulus for [g]lass coated amorphous metal”; “microwire in
structural, electronic, reflection and absorption of EM energy for
aerospace applications by the US Government”; “[a]morphous metals
. . . used as radar absorption material such as chaff and ‘Foo Foo
dust’”; “glass coated microwire with glass composed of glass is a
soda-lime silicate container glass.” Pl.’s Disclosure at 29-31.
The ‘166 Patent “development use and licensing of [U.S.] patent for
chemical/biological species for the detection of explosives detection
devices (US 8871523)”; “application of polymers, reagents or other
material on surfaces of microwires and/or the use of microwire
properties are influenced by either thermal expansion, chemical
reaction or applied stress/deflection.” Pl.’s Disclosure at 31-33.
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As the preceding chart illustrates, even the most specific accused “devices”
Demodulation identifies are merely broad technology categories such as “sensors,”
“magnetometers,” “tracking and tagging devices,” and “apertures affixed to exterior
surfaces.” Pl.’s Disclosure at 15 (regarding infringement contentions for Claim One of the
‘905 Patent). These broad categories potentially include thousands of devices and offer
little or no notice to the Government as to what actual device Demodulation contends
infringes any of its patent claims. Demodulation also lists various U.S. patents, including
patents held by the Naval Undersea Warfare Center (“NUWC”) and the Department of
Energy (“DOE”), as accused infringing products. Pl.’s Disclosures at 10 (regarding
infringement contentions for Claims Four and Five of the ‘693 Patent, respectively).
However, Plaintiff has not come forward with a device that it claims embodies any of these
patents, nor has it argued that any of these patents are invalid in view of its asserted claims.
Indeed the existence of a patent is no guarantee of the existence of a corresponding product,
let alone one made or used by the United States. As “[a] patent shall be presumed valid,”
35 U.S.C. § 282, and in the absence of any identification of an actual accused device,
Plaintiff’s mere references to patents held by the Government do not amount to
identification of an accused device.
Although courts generally construe the claims of an asserted patent prior to
considering the ultimate issue of whether the accused device infringes the asserted patent
claims, there is no requirement for this Court to conduct a Markman hearing to construe
claims prior to considering the Government’s motion for summary judgment. This is
particularly true where, as here, Demodulation has no intelligible infringement position
under any construction of any of its asserted patents’ claims. In fact, this Court need only
construe the claims “to the extent necessary to resolve the controversy.” Vivid Techs., 200
F.3d at 803; see also Biovail Corp. Int’l v. Andrx Pharms., Inc., 239 F.3d 1297, 1301 (Fed.
Cir. 2001) (finding it unnecessary to construe a claim term where it was not relevant to the
case’s outcome); Ballard Med. Prods. v. Allegiance Healthcare Corp., 268 F.3d 1352, 1358
(Fed. Cir. 2001) (“If the district court considers one issue to be dispositive, the court may
cut to the heart of the matter and need not exhaustively discuss all other issues presented
by the parties.”). Here, the Court need not construe any of the claims in Plaintiff’s asserted
patents because without an accused product, Plaintiff cannot prove infringement as a matter
of fact under any claim construction. Accordingly, to proceed with a Markman hearing in
the absence of a single, identifiable accused product—after Plaintiff has been afforded
years of discovery—would be a waste of judicial resources.
The identification of an accused product is a necessary element in an action for
patent infringement. For Demodulation to prevail in this litigation, it “must establish by a
preponderance of the evidence that [an] accused device infringes one or more claims of the
patent . . . .” Advanced Cardiovascular Sys., 261 F.3d at 1336. “[T]he plain language of
Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and
upon motion, against a party who fails to make a showing sufficient to establish the
existence of an element essential to that party’s case, and on which that party will bear the
burden of proof at trial.” Celotex Corp., 477 U.S. at 322. Ultimately, no matter how the
9
claims might be construed, there can be no infringement as a matter of law when Plaintiff
has failed to identify an accused product. See Bender v. Motorola, Inc., No. 09-1245, 2010
WL 726739, *3-*4 (N.D. Cal. Feb. 26, 2010); Lyda v. CBS Corp., No. 14-6572, 2-15 WL
4393120, *4 (S.D.N.Y. July 16, 2015). After six years of litigation, Demodulation has
failed to make a showing sufficient to establish the existence of an actual accused product,
an essential element to its case. Accordingly, summary judgment must be granted in favor
of the Government.
3. Demodulation’s Motion to Amend
According to the Schedule, amendments to Plaintiff’s infringement contentions
“may be made only by order of the Court in accordance with law.” Schedule at 8. In this
case, Demodulation agrees that relevant law requires it to make a timely showing of good
cause to amend its infringement contentions or claim chart. Pl.’s Mot. at 12-13; see N.D.
Cal. Local Patent Rule 3-6 (“Amendment of the Infringement Contentions or the Invalidity
Contentions may be made only by order of the Court upon a timely showing of good
cause.”). In determining whether good cause exists, a court must first consider whether
the movant was diligent in moving to amend and if so, whether the nonmoving party would
suffer prejudice if the court were to allow amendment. See O2 Micro Intern. Ltd. v.
Monolithic Power Systems, Inc., 467 F.3d 1355, 1366-68 (Fed. Cir. 2006); Canvs. Corp.
v. U.S., 107 Fed. Cl. 100, 103-04 (2012); Acer, Inc. v. Tech. Props. Ltd., Nos. 08-cv-
00882JF/HRL et al., 2010 WL 3618687, at *3 (N.D. Cal. Sept. 10, 2010) (unpublished).
Here, the Court deems it unnecessary to decide whether Plaintiff has shown good
cause in moving to amend its infringement contentions and claim chart. Although it is not
the Court’s obligation to “scour through the exhibits to the Contentions to determine
whether any might be properly authenticated and create a genuine issue of material fact,”
the Court has nevertheless done so in this case. Nomadix, Inc. v. Hewlett-Packard Co.,
838 F. Supp. 2d 962, 966 (C.D. Cal. 2012). In the more than 1,000 pages of exhibits
Plaintiff filed with its motion to amend, the Court found seven “Product Descriptions.” As
in the product descriptions identified in Plaintiff’s infringement contentions, the product
descriptions in its motion to amend fail to identify a single accused device. Instead, as in
its infringement contentions, Demodulation once again merely refers to large technology
categories and patents held by the Government.
The following table includes the terms Plaintiff lists as accused “devices” or
“products” in its motion to amend:
Exhibit 1-1 US Army Munitions Guidance Sensor & Detonation Trigger
“microwire and radio frequency methods to enhance the telemetric control
of munitions including precision guided munitions”; “microwire as a
track, trace and ‘switch’ mechanism to remotely detonate weapons by a
10
return radio frequency signal”; “US Navy Patents 7,405,559; 8,686,715
and 8,231,161”
Exhibit 1-2 DoD – Asset (Munitions, Nuclear Weapons, Terrorists (IFF)
[“identity friend-foe”]) Track & Trace with Fixed Encryption Key
“a clandestine, electronic key (e.g. magnetic transducer – microwire) for
over-the-air track and trace transmission and device authentication”
Exhibit 1-3 US Gov – Passive RFID Asset Track & Trace
“overt, electronic key, e.g. magnetic tranducer – passive – RFID (Radio
Frequency Identification) tag, NFC (Near-Field Communication) Tags,
etc. for over-the-air track and trace transmission and device authentication
for conventional assets”; “Passive RFID system, which already has
software to identify a target[] based on the target’s specific digital signal
on the RF response, with a simple included software”
Exhibit 1-4 DoD – Asset (Munitions, Nuclear Weapons, Terrorists (IFF)
[“identity friend-foe”]) Track & Trace with Fixed Encryption Key
“a clandestine, electronic key (e.g. magnetic transducer – microwire) for
over-the-air track and trace transmission and device authentication”;
Exhibit 1-5 NSA ANT Catalog – Retro-Reflective Passive Signal Acquisition
Device with Fixed Identification Key for USB and other Data Cables
“a clandestine, electronic key (e.g. magnetic transducer – microwire) for
over-the-air retro-reflection of data signals on a cable plus device
authentication to tie said cable to a specific user”; “RF [radio frequency]
Transmit/Receive device [that] is a CW [continuous wave] Radar unit”;
“[f]or Retro-Reflective ANT Products such as LOUDAUTO,
TAWDRYYWARD RANGEMASTER & SURLYSPAWN (circa 2008
Product Names), current improved products will include an encoded
transponder (e.g. microwire) implanted into or on the data wires”
Exhibit 1-6 NSA ANT Catalog – USB/Ethernet Connector
“a clandestine, electronic key (e.g. magnetic transducer – microwire) for
over-the-air track and trace transmission and device authentication”;
“[f]or USB ANT Products such as COTTONMOUTH I,
COTTONMOUTH II, COTTONMOUTH III, FIREWALK (circa 2008),
current products will include an encoded transponder (e.g. microwire)
implanted into or on the SIM Card that is incorporated as part of the circuit
board of the connector”
Exhibit 1-7 NSA ANT Catalog – Cell Phone, Track & Trace with Fixed
Encryption Key for Personal Wireless Device
“a clandestine, electronic key (e.g. magnetic transducer – microwire) for
over-the-air track and trace transmission and device authentication”;
“[f]or Cell Phone ANT Products such as DROPOUTJEEP,
GOPHERSET, MONKEY CALENDAR, TOTECHASER,
TOTEGHOSTLY, & PICASSO (circa 2008), current products will
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include an encoded transponder (e.g. microwire) implanted into or on the
SIM Card”
As with the terms described in Plaintiff’s initial disclosures, none of these “device”
descriptions is sufficiently specific to provide the Government with notice as to how a
product it is using or manufacturing infringes on Plaintiff’s patents. See K-Tech
Telecommc’ns, Inc. v. TimeWarner Cable, Inc., 714 F.3d 1277, 1284 (Fed Cir. 2013)
(recognizing that “a potential infringer [must] be placed on notice of what activity or device
is being accused of infringement”); Gharb v. Mitsubishi Elec. Automation, Inc., No. 10-
07204, 2012 WL 1986435, *4 (N.D. Ill. June 4, 2012). At its most specific, Plaintiff
identifies “circa 2008” product models apparently taken from a National Security Agency
(“NSA”) catalogue as examples of products that in their “current” form would infringe on
its patents by including microwire. Pl.’s Mot. to Am., Exs. 1-5 - 1-7. Like the vague and
overly broad device descriptions included in Plaintiff’s initial and amended charts, the
conjectural and hypothetical NSA products described in Plaintiff’s amended claim chart
fail to provide sufficient notice to the Government or to identify an actual accused product
with which this Court could compare properly construed patent claims. Accordingly, even
if the Court were to allow Plaintiff to amend its claim chart, it would nevertheless fail to
meet its burden. Plaintiff has failed to identify any accused device under any construction
that provides a foundation for a patent infringement lawsuit. As “a complete failure of
proof concerning an essential element of the nonmoving party’s case necessarily renders
all other facts immaterial,” further proceedings in this case are not warranted. Celotex, 477
U.S. at 323.
Conclusion
For the foregoing reasons, the Court GRANTS Defendant’s motion for summary
judgment of noninfringement as to all the asserted patents and claims remaining in this
litigation. Plaintiff’s motion to amend its infringement contentions and claim chart is
DENIED AS MOOT.
The Clerk of Court shall enter judgment in favor of the Defendant. Reasonable costs
are awarded to Defendant.
IT IS SO ORDERED.
s/Thomas C. Wheeler
THOMAS C. WHEELER
Judge
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