2019-07-18 SJM Non-Infringement - Asuspdf
2019-07-18 SJM Non-Infringement - Asuspdf
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  1. 1IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISIONCase No. 2:18-cv-00193-JRGJURY TRIAL DEMANDED ASUSTEK’S MOTION FOR SUMMARY JUDGMENT OF NON-INFRINGEMENT Semcon accuses ASUSTeK of infringing four patents based entirely on the incorporation of third-party System-on-Chip (“SoC”) components into the Accused Products. ASUSTeK is a Taiwan entity, with no U.S.-based activities. It does not make, use, sell, or offer to sell the Accused Products in the U.S. Semcon knows this and it knows that ASUSTeK’s subsidiary, ASUS Computer International (“ACI”), a third party not named in this litigation, controls all U.S. operations with respect to the Accused Products. But Semcon chose not to file suit against ACI. Instead, Semcon pursued its claims against ASUSTeK, and has adduced zero evidence showing ASUSTeK performs an infringing act with respect to the Accused Products. Because the undisputed facts demonstrate that ASUSTeK does not make, sell, offer to sell, or import the Accused Products into the United States, summary judgment onSemcon’s claims of direct infringement iswarranted.Additionally, there is no dispute that ASUSTeK had no knowledge ofthe Asserted Patent prior to being served with the Complaint in this case. Because pre-suit knowledge is a prerequisite to damages for induced infringement stemming from pre-suit sales of the accused products, Case 2:18-cv-00193-JRG Document 74 Filed 07/18/19 Page 1 of 10 PageID #: 1862
  2. 2Semcon cannot, as a matter of law, seek damages before the date of service of the Complaint. Thus, summary judgment of Semcon’s claim for induced infringement from pre-suit activity should be granted. I.STATEMENT OF UNDISPUTED MATERIAL FACTS a.ASUSTEK neither imports into, nor makes, uses, offers to sell, or sells any of the Accused Products in the U.S. ASUSTeK is a Taiwan-based company that does not make, use, offer to sell, or sell any of the Accused Products within the United States.1 no Accused Product3 is manufactured within the United States.45 ASUSTeK did not and does not import any of the Accused Products into the United States.6ASUSTeK is the owner of www.asus.comand store.asus.com.7 Customers located in the U.S. cannot access www.asus.comor store.asus.com.8 Nor can anyone in the U.S. purchase any ASUSTeK product through these domains.9 These domains, however, include links to sub-domains, including www.asus.com/us/ and store.asus.com/us (collectively, “US-websites”), that 1Ex. 1(Lee Declaration), at ⁋⁋1, 4; Ex. 2(ASUSTeK’s Supp. Resp. to Semcon’s First Set of Interrogatories), at 11.2Ex. 1(Lee Declaration), at ⁋ 4. 3Ex. 3 (Semcon’s Infringement Contention), identifying the Accused Products.4Id., at ⁋ 5. 5Id.6Ex. 2(ASUSTeK’s Supp. Resp. to Semcon’s First Set of Interrogatories), at 11.7Ex. 1 (Lee Declaration), at ⁋ 6; Ex. 2(ASUSTeK’s Supp. Resp. to Semcon’s First Set of Interrogatories), at 11. 8Ex. 1(Lee Declaration), at ⁋ 6; Ex. 2(ASUSTeK’s Supp. Resp. to Semcon’s First Set of Interrogatories), at 11. 9Ex. 1(Lee Declaration), at ⁋ 6.Case 2:18-cv-00193-JRG Document 74 Filed 07/18/19 Page 2 of 10 PageID #: 1863
  3. 3allow users to purchase ASUSTeK-branded products (those attempting to access www.asus.com or store.asus.com will be automatically redirected to the US-websites).10b.ASUSTeK had no pre-suit knowledge of the Asserted Patents Semcon served its Complaint on September 5, 2018, asserting patent infringement of U.S. Patent Nos. 7,100,061; 7,596,708; 8,566,627; and 8,806,247 (the “Asserted Patents).18 This date was the first date ASUSTeK became aware of the Asserted Patents.19 Semcon never identified the Asserted Patents, nor sent a copy of the Asserted Patents to ASUSTeK before service of the Complaint.2010Ex. 1 (Lee Declaration), at ⁋ 6; Ex. 2 (ASUSTeK’s Supp. Resp.to Semcon’s First Set of Interrogatories), at 11. 11Ex. 1 (Lee Declaration), at ⁋⁋ 6, 7; Ex. 2 (ASUSTeK’s Supp. Resp.to Semcon’s First Set of Interrogatories), at 12. 12Ex. 1(Lee Declaration), at ⁋ 7. 13Id.14Id. 15Id. 16Id. 17Id.18Dkt. 13. 19Ex. 1(Lee Declaration), at ⁋ 8.20Id.; Semcon has produced copies of its subpoena to the U.S. entity, ACI, served in prior litigation. However, as already discussed, ACI is a wholly separate legal entity, and no subpoena was served on ASUSTeK. Case 2:18-cv-00193-JRG Document 74 Filed 07/18/19 Page 3 of 10 PageID #: 1864
  4. 4II.STATEMENT OF ISSUES TO BE DECIDEDa.Can ASUSTeKbe liable for directly infringing the Asserted Patentswhen ASUSTeKdoes not make, use, offer to sell, or sell theAccused Products withintheUnitedStatesorimportthemintotheUnitedStates?b.CanASUSTeKbeliableforindirectlyinfringingtheAssertedPatentsbeforethefilingdateofthelawsuitwhenASUSTeKhadnopre-suitknowledgeoftheAssertedPatents?III.GOVERNING LAWSummary judgmentis proper when “there is no genuine dispute as to any material fact.”Fed. R. Civ. P. 56(a).Disputesoverirrelevantfactswillnotdefeatamotionforsummaryjudgment.AllerganSales,LLCv.Sandoz,Inc., 211 F. Supp. 3d 907, 914 (E.D. Tex. 2016) (J. Gilstrap) (citing Andersonv.LibertyLobby,Inc.,477U.S.242,248(1986)).Andanon-movantmustdomorethanmakeunsubstantiatedassertionstoraiseadisputeofmaterialfact.Charettev.Box,No.4:10cv98,2011U.S.Dist.LEXIS94140,at*6(E.D.Tex.Aug.23,2011)(“Neither‘conclusoryallegations’nor‘unsubstantiatedassertions’willsatisfythenonmovant'sburden.”).a.A defendant that does not engage in prohibited acts under 35 U.S.C. §271etseq.cannotbeliableforpatentinfringementTheactsofinfringementprohibitedbythePatentActarewelldefined.Adefendantthat“makes,uses,offerstosell,orsellsanypatentedinvention,withintheUnitedStatesorimportsintotheUnitedStatesanypatentedinventionduringthetermofthepatent[],infringesthepatent.”35U.S.C.§271(a).TheprohibitiondefinesinfringingactsinrelationtoU.S.territoriallimits.SeeDeepsouthPackingCo.v.LaitramCorp.,406U.S.518,531(1972).Adefendantthatdoesnotengageintheprohibitedactscannotbeliableforpatentinfringement.Id.;epicRealmLicensing,LPv.AutoflexLeasing,Inc.,644F.Supp.2d806,815-16(E.D.Tex.2008)(“Toshowdirectpatentinfringement,thepatenteemustshowsomeoneperformedtheprohibitedacts...”).BoththeSupremeCourtandtheFederalCircuithaverepeatedlycautionedpatentownersagainstterritorialoverreach:“It is the general rule under United States patent law that no Case 2:18-cv-00193-JRG Document 74 Filed 07/18/19 Page 4 of 10 PageID #: 1865
  5. 5infringementoccurs when a patented product is made and sold inanother country.” Microsoft Corp. v. AT&T Corp., 550 U.S. 437, 441 (2007).“The traditionalunderstanding that our patent law operate[s] onlydomestically and do[es] not extend to foreign activities isembedded in the Patent Act itself.”Id. at 455. (citation and quotation marksomitted); see also Halo Elec., Inc. v. Pulse Elec., Inc., 831 F.3d 1369, 1378, 1377-80 (Fed. Cir. 2016) (affirming that district court did not err in granting summary judgment of no direct infringement, because the products-at-issue were neither sold nor offered for sale by the defendant within the United States for purpose of § 271(a)). And “[a]ny doubt as to whether [defendant]’s contracting activities in the United States constituted a sale within the United States under § 271(a) is resolved by the presumption against extraterritorial application of United States laws. Id. at 1378; Texas Advanced Optoelectronic Solutions, Inc. v. Renesas Elec. America, Inc., 895F.3d 1304, 1330-31 (Fed. Cir. 2018) (affirming plaintiff had “not produced evidence sufficient to raise a material dispute of fact” as to sales or offers to sell in the United States where “the undisputed facts show[ed] manufacture and packaging abroad, and shipping of the [products-at-issue] to locations abroad”).b.Noliabilityforpre-suitdamagesforinducedinfringementwherenopre-suitknowledge.Undersection 271(b), whoever “actively induces infringement of a patent shall be liable as an infringer.”35 U.S.C. § 271(b). “Inducement requires a showing that the alleged inducer knew of the patent, knowingly induced the infringing acts, and possessed a specific intent to encourage another's infringement of the patent.”Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1328 (Fed. Cir. 2009) (citing DSU Med. Corp. v. JMS Co.,471 F.3d 1293, 1304 (Fed.Cir.2006)(en banc in relevant part)); see alsoWater Techs. Corp. v. Calco, Ltd.,850 F.2d 660, 668 (Fed.Cir.1988)(“Althoughsection 271(b)does not use the word ‘knowing,’ the case law and legislative history uniformly assert such a requirement.”). Accordingly, summary judgment for pre-suit Case 2:18-cv-00193-JRG Document 74 Filed 07/18/19 Page 5 of 10 PageID #: 1866
  6. 6activity is proper if the plaintiff cannot show the defendant had knowledge of the patent before filing its complaint. National Presto Ind., Inc. v. West Bend Co.,76 F.3d 1185, 1196 (Fed. Cir.1996) (affirming district court grant of summary judgment); see also Candela Corp. v. Palomar Med. Tech., Inc., No. 9:06-CV-277, WL 11442020, at *4 (E.D. Tex. Sep. 5, 2008) (“because the alleged inducer must have an affirmative intent to cause direct infringement...it is axiomatic that such intent cannot exist if [the accused infringer] did not know of the [] patent,” granting summary judgment of no inducement for pre-suit activity). IV.ANALYSIS a.ASUSTEK has not engaged in any acts within the U.S. To prevail on summary judgment of non-infringement based on extraterritoriality, ASUSTeK must only demonstrate that any statutorily prohibited activities (i.e., make, use, offer to sell, sell or import) attributable to ASUSTeK occurred outside the United States. 35 U.S.C. § 271(a). 35 U.S.C. § 271(a). It is undisputed that ASUSTeK does not make, use, sell, offer to sell, or import any of the allegedly infringing products identified by Semcon in its infringement contentions (identified in Exhibit 3) into the US. The “making” and “using” of an allegedly infringing article is a physical occurrence that is “relatively straightforward to place.” Litecubes, LLC v. N. Light Products, Inc., 523 F.3d 1353, 1370 (Fed. Cir. 2008). Here, ASUSTeK does not itself manufacture the Accused Products, and ASUSTeK does not import any of the Accused Products into the U.S. Nor does ASUSTeK use the Accused Products in the U.S., where it has no operations or employees in the U.S. Case 2:18-cv-00193-JRG Document 74 Filed 07/18/19 Page 6 of 10 PageID #: 1867
  7. 7Further, it is undisputed that ASUSTeK does not sell or offer to sell the Accused Products within the U.S. With respect to “selling” an allegedly infringing article, the Federal Circuit has explained that “when substantial activities of a sales transaction...occur entirely outside the United States,” there is no sale “within the United States for the purposes of § 271(a).” Halo Elec., Inc., 831 F.3d at 1378. For a sale to have occurred within the U.S. for purposes of Section 271(a), the court must consider whether the activities in the U.S. are sufficient to constitute a sale under 271(a), recognizing the strong policy against extraterritoriality. MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1375 (Fed. Cir. 2005). The ordinary meaning of a sale includes the transfer of property or title. Id.; see alsoHalo Elec., 831 F.3d at 1378. Here, the facts of Halo are similar. There, the Federal Circuit affirmed summary judgment of noninfringement based on extraterritoriality, where the products were manufactured overseas and substantial activities of sales transactions occurred overseas. The Federal Circuit found that all negotiations, purchase orders, shipping and delivery occurred outside of the U.S. Id. at 1378-79. Halo has since been relied upon to affirm summary judgment of noninfringement based on extraterritoriality where the defendant produced evidence that manufacture, packaging, shipping, and sales took place abroad. Texas Advanced Optoelectronic Solutions, Inc. v. Renesas Elec. America, Inc., 895 F.3d 1304, 1330 (Fed. Cir. 2018).Likewise, here, any sales of the Accused Products clearly occurred abroad.21 Semcon has not articulated any basis for arguing ASUSTeK is liable for the sales of ACI, a distinct legal entity not named in this litigation. See e.g., U.S. v. Bestfoods, 524 U.S. 51, 61 (1998) (“It is a general principle of corporate law deeply ingrained in our economic and legal systems that a parent corporation (so-called because of control through ownership of another corporation's stock) is not liable for the acts of its subsidiaries.”).Case 2:18-cv-00193-JRG Document 74 Filed 07/18/19 Page 7 of 10 PageID #: 1868
  8. 8Similarly, ASUSTeK does not “offer for sale” the Accused Products within the United States. An “offer to sell” generally occurs when one “communicate[s] a manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.”MEMC,420 F.3d at 1376(internal quotation marks omitted). 23 Because ASUSTeK does not make, use, sell, offer to sell, or import the Accused Products into the U.S., summary judgment of non-infringement is warranted. b.Indirect Infringement Lack of the requisite pre-suit knowledge of the Asserted Patents may also call for summary disposition. Union Pacific Resources Co. v. Chesapeake Energy Corp., No. 496CV726Y, 1998 WL 34359124, at *5 (N.D. Tex. May 20, 1998) (citing Hewlett–Packard Co. v. Bausch & Lomb, Inc.,909 F.2d 1464, 1469 (Fed.Cir.1990)). There is no dispute that ASUSTeK did not have 22Ex. 1(Lee Declaration), at ⁋ 6. 23Ex. 1(Lee Declaration), at ⁋ 7. Case 2:18-cv-00193-JRG Document 74 Filed 07/18/19 Page 8 of 10 PageID #: 1869
  9. 9knowledge of the Asserted Patents prior to being served with the Complaint on May 9, 2018. Semconhas produced no evidence demonstrating that ASUSTeKhad any pre-suit knowledge of the Asserted Patents, actual or constructive.Semcon, in its Complaint, merely alleged that “Defendant, with knowledge that these products, or the use thereof, infringe the [Asserted Patents]at least as of the date of this Complaint, knowingly and intentionally induced...” Dkt. 1, at ¶ 20; see alsoid. at ¶¶ 28, 36, 44. To date, Semcon has adduced no evidence showing that it ever identified the Asserted Patents or sent a copy of the Asserted Patents to ASUSTeK,prior to service of the Complaint24. Therefore, ASUSTeKis entitled to summary disposition for any alleged liability for induced infringement before May 9, 2018. Core Wireless Licensing S.A.R.L. v. Apple Inc., No. 15-cv-05008 NC, 2016 WL 6427850, at *7 (N.D. Cal. Oct. 31, 2016)(grantingaccusedinfringersummary judgment to limitdamagesperiod for alleged acts ofinducinginfringementto time after accusedinfringerwas given notice by the patentee of the patentat the time of service of the complaint); see also Union Pacific Resources Co., WL 34359124, at *5; Semiconductor Energy Laboratory Co. Ltd. v. Chi Mei Optoelectronics Corp., 531 F. Supp. 2d 1084 (N.D. Cal. 2007).For this reason, summary judgment of no induced infringement for pre-suit activities should be granted. For these reasons, ASUSTeK respectfully requests the Court grant summary judgment of non-infringement on Semcon’s claims of direct infringement, and summary judgment on pre-suit damages for Semcon’s claims of induced infringement.24As discussed above, the only evidence identified by Semcon is copies of subpoenas served on ACI, not ASUSTeK, in prior litigation. Case 2:18-cv-00193-JRG Document 74 Filed 07/18/19 Page 9 of 10 PageID #: 1870
  10. 10Dated: July 18, 2019 Respectfully submitted, /s/ Carrie A. Bader Eric A. Buresh Michelle L. Marriott Carrie Ann Bader ERISE IP, P.A. 7015 College Blvd., Suite 700 Overland Park, KS 66211 (913) 777-5600 Telephone (913) 777-5601 Facsimile carrie.bader@eriseip.com Harry Lee Gillam, Jr. Melissa Smith GILLAM & SMITH, LLP 303 South Washington Avenue Marshall, TX 75670 (903) 934-8450 Telephone (903) 934-9257 Facsimile gil@gillamsmithlaw.com ATTORNEYS FOR DEFENDANT ASUSTEK COMPUTER, INC. CERTIFICATE OF SERVICEThe undersigned certifies that the foregoing document was filed electronically in compliance with Local Rule CV-5(a). Plaintiff’s counsel of record were served with a true and correct copy of the foregoing document by electronic mail on July 18, 2019./s/ Melissa R. Smith Melissa R. Smith Case 2:18-cv-00193-JRG Document 74 Filed 07/18/19 Page 10 of 10 PageID #: 1871
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