American Technical Ceramics Corp. v. Presidio Components, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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:

AMERICAN TECHNICAL CERAMICS CORP. :

and AVX CORPORATION, :

:

Plaintiffs, : MEMORANDUM & ORDER

:

-against- : 14-CV-6544(KAM)(GRB)

:

PRESIDIO COMPONENTS, INC., :

:

Defendant. :

X

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MATSUMOTO, United States District Judge:

Plaintiffs American Technical Ceramics Corporation

(“ATC”) and AVX Corporation (collectively, “plaintiffs”)

commenced this action on November 6, 2014, against defendant

Presidio Components, Inc. (“Presidio” or “defendant”), alleging

infringement by Presidio of the following ATC patents: United

States Patent No. 6,144,547 (“the ‘547 Patent”), United States

Patent No. 6,337,791 (“the ‘791 Patent,” and together with the

‘547 Patent, the “patents-in-suit”), and United States Patent

No. 6,992,879 (“the ‘879 Patent”). (ECF No. 1, Compl.)

Plaintiffs seek a determination that Presidio willfully

infringed the patents-in-suit, and injunctive relief prohibiting

Presidio from engaging in further infringement.1 Plaintiffs also

1 Plaintiffs declined to proceed with their action as to all claims of

the ‘879 Patent which were cancelled by the U.S. Patent and Trademark Office.

(ECF No. 126, Mem. & Order on Cross-Motions for Summ. J. (“SJ Order”); see

seek damages from the alleged infringement, including attorneys’

fees and costs.

After inter partes review (“IPR”), two claim

construction hearings pursuant to Markman v. Westview

Instruments, Inc., 517 U.S. 370 (1996), and cross-motions for

summary judgment, the parties proceeded to trial. The court

held a two-week trial in which plaintiffs tried to a jury their

allegations that defendant infringed the patents-in-suit, and

that it infringed the ‘791 Patent willfully. (See Minute

Entries dated 6/10/2019 to 6/21/2019.) At trial, defendant

presented evidence related to two defenses it now asserts for

decision by the court: (1) that the ‘547 Patent was invalid

because the claim term “negligibly over a top surface” was

indefinite; and (2) that plaintiff had waived its right to sue

for infringement of the ‘791 Patent. (See ECF No. 157, Prop.

Jt. Pretrial Order 4.) Presently before the court is the

parties’ post-trial briefing on defendant’s asserted invalidity

defense and equitable defense of waiver. (See ECF No. 206-1,

Def. Mem.; ECF No. 207, Pls.’ Opp. (“Opp.”); ECF No. 208, Def.

Reply (“Reply”).)

For the reasons discussed below, the court finds that

defendant has failed to prove by clear and convincing evidence

also ECF No. 116-2, Pl. Summ. J. Mot. 2 n.1.) Also, plaintiffs only seek

injunctive relief as to the ‘791 Patent. (See ECF No. 157, Prop. Jt.

Pretrial Order 3.)

that the claim term “negligibly over a top surface” rendered the

‘547 Patent invalid for indefiniteness, or that plaintiff ATC

had waived its right to sue under the ‘791 Patent.

BACKGROUND

The court assumes familiarity with the procedural and

factual history of this case, as set forth most recently in the

court’s pre-trial Memorandum and Order deciding the parties’

respective expert evidentiary issues pursuant to Daubert v.

Merrell Dow Pharm., Inc., 509 U.S. 579 (1993), (ECF No. 179,

Mem. & Order on Daubert Mots. (“Daubert Order”)), and the

court’s Memorandum and Order deciding the parties’ respective

motions in limine, (ECF No. 181, MIL Order).

After a two-week trial, the jury found that Presidio

had not established by clear and convincing evidence that the

‘791 Patent was invalid as anticipated, as obvious, or as

indefinite. (See ECF No. 201, Jury Verdict 6.) The jury also

found that Presidio had not established by clear and convincing

evidence that the ‘547 Patent was invalid as anticipated or

obvious, or that the claim term “substantially L-shaped

terminations” was indefinite. (Id. at 7-8.) The jury, however,

found by clear and convincing evidence that the claim term

“negligibly over a top surface of said device body” is

indefinite. (Id. at 8.) The parties dispute whether this

finding by the jury is a general verdict and what weight the

court should give the verdict. (See DM 2; Opp. 4; Reply 2.)

Presidio characterizes the verdict as a “general verdict”

without explaining the effect, while plaintiffs argue the

verdict is merely advisory and should be afforded no weight.

The jury also returned a verdict for plaintiffs as to

infringement, finding all the accused products infringed either

the ‘547 Patent or the ‘791 Patent. (Jury Verdict 3-4.) The

jury found, however, that Presidio did not willfully infringe

the ‘791 Patent. (Id. at 5.) Finally, in determining damages

for Presidio’s infringement of the patents-in-suit, the jury

found plaintiffs were not entitled to an award of lost profits

as to either of the patents-in-suit, but that plaintiffs were

entitled to a reasonable royalty as to both patents, awarding

$58,334.75 as to the ‘547 Patent, and $680,647.00 as to the ‘791

Patent. (Id. at 9.)

LEGAL STANDARD

In this patent case the court applies the law of the

Federal Circuit to patent issues, and the law of its regional

circuit, the Second Circuit, to non-patent issues. In re

Cambridge Biotech Corp., 186 F.3d 1356, 1368 (Fed. Cir. 1999);

see also Coconut Grove Pads, Inc. v. Mich & Mich TGR, Inc., 222

F. Supp. 3d 222, 250 n.6 (E.D.N.Y. 2016). Thus, questions

regarding indefiniteness and waiver, for example, are governed

by Federal Circuit law. The court applies the foregoing

analysis to the parties’ pending motions and objections.

DISCUSSION

Defendant requests the court adopt the jury’s verdict

that the ‘547 Patent’s claim term “negligibly over a top surface

of said device body” is indefinite. (DM 1.) Defendant also

requests the court find that plaintiffs waived their rights to

sue for infringement under the ‘791 Patent because they had

actual knowledge of Presidio’s alleged infringement for more

than a decade. (Id.) Plaintiffs oppose, arguing that the

jury’s indefiniteness verdict was merely advisory, (Opp. 1-2),

that the claim term is nevertheless definite, and that

plaintiffs did not possess actual knowledge of infringement of

the ‘791 Patent as defendant argues, (id. at 21-28).

I. Invalidity

Defendant argues that the ‘547 Patent’s claim term

“negligibly over the top surface” is indefinite as evidenced by

the testimony of both parties’ experts and confirmed by the

jury’s verdict. (DM 1.) Defendant also argues at length that

the jury’s invalidity verdict represents a “general verdict” as

“the jury was instructed to apply the law as provided by the

Court” to the facts of the case. (Id. at 3 (citing Anderson

Grp. LLC v. City of Saratoga Springs, 805 F.3d 34, 33 n.7 (2d

Cir. 2015)).) The jury found, defendant argues, that no

reasonably certain standard existed for determining what

constituted a “negligible” amount of termination material. (DM

5.) According to defendant, the trial evidence demonstrated by

clear and convincing evidence that nothing in the ‘547 Patent

informs a person of skill in the art (“POSITA”) regarding the

limit or scope of the claim term. (Id.)

Plaintiffs respond that the claim term’s scope is

defined with reasonable certainty by the ‘547 Patent’s intrinsic

record. (Opp. 1.) That is, the claim language “substantially

L-shaped,” the distinguished prior art and example embodiments,

and the patent’s prosecution history, support a finding of

definiteness in light of Federal Circuit authority. Plaintiffs

further argue that the jury’s verdict was advisory and that

Presidio’s trial conduct violated the court’s in limine orders

and thus compromised the jury’s verdict.

Whether or not the verdict is characterized as general

because the jury applied the law of invalidity to the facts of

the case, the court must adopt the verdict in order for it to

become binding. Indeed, there can be no confusion over how the

parties intended to try defendant’s indefiniteness defense, and

plaintiffs cite to a number of examples of representations by

defendant. Most notable is defense counsel’s statements at the

court’s Final Pretrial Conference, characterizing the jury’s

verdict as to indefiniteness as advisory and indicating the

court’s decision “would only come after the advisory verdict.”

(ECF No. 207-2, Pls.’ Ex. 3, Pretrial Conf. Tr. 27.2) Moreover,

the parties’ Joint Proposed Pretrial Order indicated Presidio’s

defense of indefiniteness may need to be resolved by the court.

(Jt. Prop. Pretrial Order 4.) Though the jury was instructed on

the law of indefiniteness, and the court affords its verdict

some weight, the court must nevertheless determine for itself

whether defendant met its burden by clear and convincing

evidence that the claim term “negligibly over a top surface” is

indefinite.

A. Legal Standard

“[A] patent is invalid for indefiniteness if its

claims, read in light of the specification delineating the

patent, and the prosecution history, fail to inform, with

reasonable certainty, those skilled in the art about the scope

of the invention.” Nautilus, Inc. v. Biosig Instruments, Inc.,

134 S. Ct. 2120, 2124 (2014). Further, patents enjoy a

“presumption of validity, a presumption not to be overthrown

except by clear and cogent evidence.” Microsoft Corp. v. I4I

Ltd. P’ship, 564 U.S. 91, 101 (2011) (quoting Radio Corp. of Am.

v. Radio Eng’g Labs., 293 U.S. 1, 2 (1934)); see also 35 U.S.C.

2 Citations to the parties exhibits, filed as a single document with

internal bookmarks, are generally to the pagination as marked by the court’s

electronic case filing (“ECF”) system. To the extent the exhibits are

transcripts of the trial held in this case, the court cites to the transcript

pages and lines rather than ECF pagination.

§ 282(a) (providing that a patent and each of its claims “shall

be presumed valid,” and “[t]he burden of establishing the

invalidity of a patent or any claim thereof shall rest on the

party asserting such invalidity”). Thus, invalidity, including

by reason of indefiniteness, must be proven by clear and

convincing evidence. Microsoft, 564 U.S. at 95.

The standard for definiteness affords some leeway for

the “inherent limitations of language.” Teva Pharms. USA, Inc.

v. Sandoz, Inc., 789 F.3d 1335, 1340–41 (Fed. Cir. 2015). “Some

modicum of uncertainty is the ‘price of ensuring the appropriate

incentives for innovation.’” Nautilus, 134 S. Ct. at 2128

(quoting Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.,

535 U.S. 722, 732 (2002)). On the other hand, “a patent must be

precise enough to afford clear notice of what is claimed,

‘thereby apprising the public of what is still open to them.’”

Id. at 2129 (alteration omitted) (quoting Markman, 517 U.S. at

373) (internal quotation marks omitted).

Whether a claim term is indefinite is a question of

law. Teva Pharms., 789 F.3d at 1341 (quoting Wellman, Inc. v.

Eastman Chem. Co., 642 F.3d 1355, 1365-66 (Fed. Cir. 2011)). A

particular term’s significance or meaning in the industry, to

one of skill in the art, is a factual issue, however. Id. at

1342 (“Understandings that lie outside the patent documents

about the meaning of terms to one of skill in the art or the

science or state of the knowledge of one of skill in the art are

factual issues.”).

The Federal Circuit has found a claim term indefinite

where the patent’s intrinsic record did not disclose, with

reasonable certainty, the particular method to be used for

determining whether the term was satisfied. See Dow Chem. Co.

v. NOVA Chem. Corp., 803 F.3d 620, 633 (Fed. Cir. 2015). For

example, in Teva Pharms., 789 F.3d 1335, 1340–41 (Fed. Cir.

2015) the Federal Circuit found the relevant patents indefinite,

as the patents did not specify how to calculate a measurement

when there were admittedly multiple ways to do so that yielded

different results. Teva Pharms., 789 F.3d at 1344-45. Thus,

claim terms must “‘provide objective boundaries for those of

skill in the art’ when read in light of the specification and

the prosecution history.” Liberty Ammunition v. United States,

835 F.3d 1388, 1395 (Fed. Cir. 2016); Interval Licensing LLC v.

AOL, Inc., 766 F.3d 1364, 1370 (Fed. Cir. 2014). “Claim

language employing terms of degree has long been found definite

where it provided enough certainty to one of skill in the art

when read in the context of the invention.” Nautilus, 783 F.3d

at 1378.

B. Findings of Fact

Generally, the court is required to make findings of

fact on an action tried without a jury or with an advisory jury

pursuant to Federal Rule of Civil Procedure 52. As discussed

above, however, the question of indefiniteness is a question of

law that requires the court consider the intrinsic record of a

patent. Teva Pharms., 789 F.3d at 1342 (“A party cannot

transform into a factual matter the internal coherence and

context assessment of the patent simply by having an expert

offer an opinion on it.”). While “[e]xperts may explain terms

of art and the state of the art at any given time, . . . they

cannot be used to prove the legal construction of a writing.”

Id. at 1339.

The parties offered testimony at trial from their

respective experts, each a purported POSITA, concerning whether

a POSITA could determine the scope of the claim term “negligibly

over a top surface.” While the experts’ opinions were properly

admitted under Federal Rule of Evidence 702, the question of

indefiniteness is one of law left for the court to decide. The

parties agree that answering the legal question of

indefiniteness requires the court to look to the intrinsic

record, and apparently do not dispute what comprises the

intrinsic record. The factual testimony the parties offered

concerned only the meaning, if any, a POSITA would assign to the

terms “negligible” or “small,” and it is undisputed that neither

phrase is a term of art. (Tr. 1817:1-9 (Randall Testimony); Tr.

2255:22-25 (Shanfield Testimony).) Moreover, the parties’

respective experts offered various opinions of whether the claim

term “negligibly over a top surface” informed a POSITA as to the

scope of the claimed invention. The court need not repeat or

make factual findings regarding these offered opinions. The

only factual finding the court must make regarding

indefiniteness, as supported by trial testimony, is that the

terms “negligibly” and “small” “ha[ve] no default meaning to one

of skill in the art.” Teva Pharms., 789 F. 3d at 1341.

C. Application

1. Indefiniteness

The parties generally do not dispute the law governing

indefiniteness, only its application to the facts adduced at

trial. Indeed, both plaintiffs and defendant appear to agree

that courts look to the patents’ intrinsic record, which

includes the patent’s claims, specifications, and prosecution

history, in determining whether the claim term informs a POSITA

of the claim term’s scope with reasonable certainty. (See,

e.g., DM 4; Opp. 3.) The parties dispute amounts to whether

defendant can point to clear and convincing evidence in the

record that the claim term “negligibly over a top surface” is

indefinite. The court finds that it has not.

In deciding the parties’ cross-motions for summary

judgment, the court denied defendant’s motion as to the

invalidity of the ‘547 Patent, finding that a genuine dispute of

material fact existed. At summary judgment, defendant argued,

as it does here, that the claim term “negligibly over a top

surface” was indefinite and that no reasonable jury could find

otherwise. (SJ Order 41-42.) The court, however, found that

plaintiffs proffered sufficient evidence in the form of Dr.

Shanfield’s expert report that the claim terms were not

indefinite. (Id. at 42-43.) The court also noted that both the

PTAB and the court necessarily construed the term “negligibly

over a top surface” in construing the ‘547 Patent’s claims and

in conducting inter partes review. (Id. at 43.)

The court construed “negligibly over a top surface” to

mean “a small amount of termination material is formed on a top

surface of the device body.” (Cl. Constr. Order 22.) Defendant

argues that claim terms such as “small” and “large” are

routinely found indefinite, citing to several district court

cases from other circuits. (DM 5.) Plaintiffs point out,

however, that claims using terms of degree are definite when the

patent’s context informs a POSITA of the scope of the claims

with reasonable certainty, citing to Nautilus, 783 F.3d at 1378.

(Opp. 3.) As the parties agree, the court must look to the

patent’s intrinsic record to determine definiteness, aided by

the evidence presented at trial. Defendant’s citations to

district court cases cannot establish a rule that terms of

degree, like “small,” are generally found indefinite. Without

citation to or an explanation of the intrinsic records of the

patents at issue in those cases, defendant’s proposition of law

is hollow and offers no analogous support. Analyzing claim

terms alone, without the aid of the intrinsic record, is not

helpful in determining whether the claim term at issue in this

case is indefinite.

In supporting its case for indefiniteness, defendant

relies almost exclusively on trial or deposition testimony and

on expert reports by the parties’ respective experts and

purported POSITAs. As the court noted in deciding the parties’

summary judgment motions, there is at least a dispute as to

whether the claim term is indefinite as the parties have both

offered experts at trial on this issue, unsurprisingly offering

competing conclusions. Defendant argues that there is no limit

specified in the patent’s intrinsic record, as evidenced by

testimony of the parties’ respective experts at trial.

Defendant points to the testimony of defendant’s expert, Dr.

Randall; of plaintiffs’ validity expert, Dr. Shanfield; and of

plaintiffs’ Rule 30(b)(6) corporate designee, Mr. Ritter. (DM

6.) Defendant cites this testimony to argue that skilled

artisans, purported POSITAs, could not identify the scope of the

terms “negligibly” or “small,” and that the patent itself offers

no limitation for the terms.

The parties’ experts, as noted above, at least agreed

the terms “negligible” and “small” were not industry terms of

art. (Tr. 1817:1-9; 2255:22-25.) Dr. Randall, defendant’s

expert, testified that a POSITA would not know the scope of the

terms “small” or “negligible.” (Tr. 1817:10-15.) He also

testified that the ‘547 Patent contained no “numerical

limitation of negligibly or small,” (Tr. 1817:21-24), though

the court had already concluded that a numerical limitation is

not required to construe this claim term.

Defendant next points to Dr. Shanfield’s deposition

testimony concerning the variability of solder creep, as

contemplated in the ‘547 Patent. (ECF No. 206-2, Def.’s Ex. 5,

Shanfield Dep. 26.) Dr. Shanfield acknowledged there was

nothing in the patent that specified the extent to which the top

termination material of the claimed capacitor would vary as a

result of solder creep. (Id.) Defendant argues that this

potential variability, and Dr. Shanfield’s inability to define

its range, are evidence that the top termination has “no defined

dimension.” (DM 7 (citing Randall Rept. ¶ 594).)

Defendant also cites to plaintiffs’ expert Dr.

Hillman’s testimony. At trial, Dr. Hillman declined to comment

on what amount of termination material would be “significant”

and what amount would be “small.” (Tr. 934-46.) Even if Dr.

Hillman could not “offer an explanation of the difference

between” a “‘small’ amount of termination from a ‘significant’

amount of termination” material, as defendant argues, the court

is not bound by his inability. (DM 8 (citing Tr. 934-936).)

Notably, Dr. Hillman framed his understanding of the term

negligibly using the relative amounts of termination material,

comparing the top termination to the bottom termination, to

determine if the ‘547 Patent claims were met in evaluating the

accused products. (See, e.g., Tr. 940: 7-12.) Though he did

not articulate as much at trial, this method is similar to the

relational comparison required by the claim term “substantially

L-shaped,” which the court has previously found further

clarifies the scope of the term “negligibly over a top surface”

and obviated the need for any further construction or

limitation. Dr. Shanfield explained as much at trial. (Tr.

2217-2218.)

Though defendant relies heavily on expert testimony to

support its indefiniteness case, plaintiffs’ experts offered

ample, credible, and competing opinions on the question of

definiteness. In light of these competing, credible views, the

trial testimony alone did not establish by a preponderance of,

let alone by clear and convincing, evidence, that the claim term

fails to inform a POSITA of the invention’s scope to a

reasonable certainty. Thus, as it must, the court turns to the

intrinsic record.

Defendant’s only real citation to the intrinsic record

is the ‘547 Patent’s prosecution history and statements made by

plaintiffs before the Patent and Trial Appeal Board (“PTAB”).

(DM 8.) Plaintiffs’ counsel represented that the “negligible

top-land termination” could not “exceed 0.05 millimeters.” (ECF

No. 206-2, Def.’s Ex. 9, PTAB Tr. 50.) Similarly, defendant

argues that Dr. Shanfield, plaintiffs’ expert, testified at his

deposition that the top-land terminations were “extremely likely

not to have a dimension exceeding .1 millimeters” or a dimension

of 0.1 millimeters. (DM 9 (citing ECF No. 206-2, Def.’s Ex. 10,

Shanfield Dep. 53).)

Plaintiffs largely do not respond with citations to

the trial transcript. Instead, plaintiffs rely heavily on the

patent’s claim term “substantially L-shaped terminations” to

argue that the scope of “negligibly” is reasonably certain

because it “must operate to make the termination as a whole

appear ‘substantially L-shaped.’” (Opp. 3.) Plaintiffs also

argue that the court relied on the “substantially L-shaped”

claim language to construe the term “negligibly.” (Opp. 4

(citing Cl. Constr. Order 22).) Similarly, at summary judgment,

the court noted that it previously construed the term

“negligibly” without difficulty, and that the PTAB understood

the scope of the term when it authorized the patent to issue.

(SJ Order 43.)

Plaintiffs next cite to the ‘547 Patent’s

specification and prosecution history to provide the upper and

lower bounds of “negligibly.” (Opp. 5.) Plaintiffs first point

to the patent’s specification which contrasted the ‘547 Patent

with prior art capacitors that had top and bottom lands of the

same size, likely referring to U-shaped terminations. (Id.

(citing ‘547 Patent col.5 l.43).) As a lower bound, plaintiffs

cite to the patent’s prosecution history which “distinguishe[d]

the L-shaped terminations of the Galvagni prior art,” a patent

claiming L-shaped terminations. Plaintiffs note that the patent

examiner amended the ‘547 Patent’s claim terms finding that

Galvagni “d[id] not disclose a portion of the terminations

negligibly over the top surface.” (Opp. 5 (citing Pls.’ Ex. 2,

Examiner’s Am. 6-7).) Plaintiffs argue that such amendments

weigh in favor of a finding of definiteness. (Id. at 6 (citing

Tinnus Enters., LLC v. Telebrands Corp., 733 F. App’x 1011, 1020

(Fed. Cir. 2018)).)

Defendant appears, once again, to urge on the court

that a specific limit is required to render “negligibly” a

definite term. Though defendant appears to have abandoned its

argument that a numerical limitation is required, the court has

already declined to read in a numerical limitation in construing

the term. Defendant’s only citation to the intrinsic record is

the inter partes review transcript where plaintiffs’ counsel

stated 0.05 millimeters served as an upper limit of the

negligible top-land termination material. The court declined,

however, to import this specific limitation during claim

construction and again declines to find that the prosecution

history renders the scope of the claim indefinite to a POSITA.

The ‘547 Patent does, however, specify a reasonably

certain limitation that the defendant seeks. That is, a

negligible top termination must comprise a termination that is

“substantially L-shaped.” The jury found this term informed a

POSITA as to the scope of the claimed invention to reasonable

certainty; defendant does not dispute this finding or further

challenge it. Defendant only earnestly meets plaintiffs’

argument that “substantially L-shaped” provides an objective

criterion by arguing “negligible” and “small” are not defined as

any specific amount of termination material on the top surface

that is less than the bottom surface. (Reply 7-8.) Such

specificity is not required.

It is undisputed that “negligible” and “small” are not

terms of art that clarify the scope of the claim term at issue.

It is also undisputed, however, that L-shaped and U-shaped

terminations are terms of art. (See Tr. 2219:1-2.) Still,

industry terms of art are not necessary to clarify the scope of

the claim term negligibly, as the term, read in the context of

the patent as a whole, must contribute to terminations that are

substantially L-shaped. Any more than a negligible amount of

top termination material, would render the termination not

“substantially L-shaped,” as the court has repeatedly found.

Defendant’s argument requires reading the term

“negligibly” in a vacuum. Federal Circuit precedent, however,

does not permit this analysis without the benefit of context.

Indeed, in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S.

Ct. 2120, the court found that the claim language, coupled with

illustrations and specifications of the patent at issue provided

“sufficient clarity to skilled artisans as to the bounds of

th[e] disputed term.” 783 F.3d at 1382-83. Though the term

negligibly itself is indeed vague as to its bounds, reading the

claim term in the context of the intrinsic record provides a

ready limitation. The court finds that the ‘547 Patent’s claim

term “negligibly over a top surface” informs a POSITA as to the

scope of the claimed invention to a reasonable certainty.

Defendant did not carry its burden by clear and convincing

evidence.

2. Misconduct

Before the court considers defendant’s waiver

argument, plaintiffs’ argument that the court should not afford

the advisory verdict any weight because of misconduct at trial

by Presidio bears some discussion. (Opp. 12.) As an initial

matter, the court ultimately did not consider defendant’s

alleged misconduct in reaching its decision on indefiniteness.

According to plaintiffs, Presidio violated the court’s

evidentiary orders throughout trial by repeatedly suggesting

“negligibly” had a numerical limitation and improperly objecting

during plaintiffs’ witness examination. (Id.) Plaintiffs argue

this misconduct confused and misled the jury. Plaintiffs

contend Presidio’s efforts contravened the court’s construction

of the claim term, which included no numerical limit, (Cl.

Constr. Order 22), and violated the court’s in limine rulings,

(MIL Order 10-11). Although Presidio’s counsel was admonished

for statements made during opening statements, plaintiffs

contend Presidio continued in this vein throughout trial. For

example, counsel for Presidio repeatedly asked, over objection,

plaintiffs’ expert Dr. Hillman whether he had measured top

termination material on Presidio’s BB capacitors. (Opp. 14

(citing Tr. 865:17-21; 871:21-872:1; 873:7-10; 934:22-935:7;

943:7-25).) Presidio’s examination of its own expert witness,

Dr. Randall, also drew a curative instruction from the court

that the jury “may not apply the numerical values” found in the

specifications of the ‘547 Patent in its infringement analysis

of the top termination material. (Tr. 1593:22-1605:12.)

Finally, plaintiffs point to Presidio’s series of objections

during plaintiffs’ expert Dr. Shanfield’s direct examination, in

which Presidio’s counsel argued that the court’s in limine

orders precluded any relational analysis comparing the extent of

the top and bottom terminations, which the court concluded it

did not. (Opp. 15 (citing Tr. 2192:2-2193:22; 2213:17-

2214:25).) While much of this final exchange occurred at

sidebar, plaintiffs contend Presidio’s objections at least

distracted the jury. (Opp. 16.)

Presidio’s conduct at trial indeed pushed the limits

of the court’s in limine rulings and claim construction, though

the court cannot say it crossed the line into affirmative

misconduct, but, rather, came close. Counsel for Presidio

appeared, at times, either to disregard or not to understand the

court’s rulings on plaintiffs’ objections to questions eliciting

testimony regarding termination measurements and numerical

limits. These interruptions were at least distracting to the

jury, and the litigants, and disruptive to the flow of trial,

but it is not clear they misled or confused the jury such that

the court’s curative instructions were ineffective. In any

event, the court does not find this trial conduct so infected

the jury’s advisory verdict such that the court must completely

disregard it.

II. Waiver

Defendant next argues that the court should find

plaintiffs waived their right to sue for infringement of the ‘791

Patent by failing to enforce their rights for more than a decade

after becoming aware of the alleged infringement. Defendant

contends that plaintiffs analyzed Presidio’s BB capacitors as

early as 2002 and determined that those capacitors were covered

by ATC’s patents. (DM 11.) Plaintiffs respond that, although

they had determined Presidio’s BB capacitors contained vias, no

witness possessed the requisite knowledge for the court to find,

by clear and convincing evidence, that plaintiffs intentionally

relinquished their rights to enforce the ‘791 Patent “with full

knowledge of the material facts.” Qualcomm Inc. v. Broadcom

Corp., 548 F.3d 1004, 1019-1020 (Fed. Cir. 2008).

The Federal Circuit has suggested the applicability of

two equitable doctrines of waiver in patent actions: “true

waiver” and “implied waiver.” Qualcomm, 548 F.3d at 1020 (Fed.

Cir. 2008). Implied waiver applies where a patent owner has

intentionally failed to disclose the existence of a patent “in

the face of a duty to speak,” and is inapplicable to the instant

action. Id. at 1021. The Federal Circuit has further

suggested, but does not appear to have expressly endorsed the

view, that “true waiver” consists of a “voluntary or intentional

relinquishment of a known right.” Id. at 1019. Additionally,

although the Federal Circuit does not appear to have expressly

ruled on the standard of proof required for waiver, it has

upheld a finding of implied waiver where there was “clear and

convincing evidence.” See id. at 1021-22. Defendant does not

specify which doctrine it believes applies to plaintiffs’

conduct, though the parties appear to dispute whether plaintiffs

held full knowledge of its rights and nevertheless intentionally

waived, referring to “true waiver.” Defendant does not argue as

to what burden applies to its waiver defense and plaintiffs

assert that the burden is clear and convincing without citation

to legal authority.

The court previously denied plaintiffs’ motion for

summary judgment based on defendant’s asserted equitable defense

of waiver. The court found that plaintiffs had not demonstrated

an absence of disputed material facts concerning defendant’s

equitable defense of waiver as to the ‘791 Patent. (SJ Order

76.) That is, defendant had presented at summary judgment

sufficient evidence to permit a reasonable fact-finder to

conclude that plaintiffs had knowledge of Presidio’s alleged

infringement of the ‘791 Patent. The court must now determine

if Presidio established—through its trial evidence—whether

plaintiffs intentionally relinquished their right to enforce the

‘791 Patent with full knowledge of the material facts.

Presidio summarizes its argument as follows:

plaintiffs knew that Presidio’s BB capacitors had vias claimed

in the ‘791 Patent in 2002, concluded that the BB capacitors

were covered by a Monsorno BMC patent in 2004, and yet chose not

to sue Presidio. Defendant calls this “actual knowledge of the

infringement of the Monsorno patents.” (DM 14.) Plaintiffs

respond that “actual knowledge” requires a single person to have

knowledge that the BB capacitors contained vias and knowledge of

the ‘791 Patent. Plaintiffs oppose defendant’s motion by

refuting each witness’s knowledge of either the BB capacitor’s

vias or the ‘791 Patent. Plaintiffs also argue that defendant’s

“should have known” allegations do not rise to the level of

intent required to prove waiver because “negligence, oversight,

or thoughtlessness” is insufficient to prove waiver. (Opp. 23

(citing Hudson River Sloop Clearwater, Inc. v. Dep’t of the

Navy, No. 86-CV-3292, 1989 U.S. Dist. LEXIS 19034, at *21

(E.D.N.Y. May 1, 1989)).) Thus, plaintiffs conclude, Presidio’s

contention that plaintiffs were “charged” with knowledge is

insufficient to prove waiver. Defendant characterizes

plaintiffs’ argument that actual knowledge is required as

unsupported by case law. Neither plaintiffs nor defendant,

however, cite to clearly controlling authority for this point.

Defendant bears the burden of proving waiver, and it has not

cited any authority for the proposition that waiver may be found

based on constructive or charged knowledge.

Defendant musters the following record evidence to

establish that plaintiffs were aware of Presidio’s alleged

infringement of the ‘791 Patent. Plaintiffs’ engineers, and

specifically John Mruz, analyzed Presidio’s BB capacitors as

early as 2004. (ECF No. 206-2, Def.’s Ex. 13, Mruz Notes and

Emails 64; Def.’s Ex. 15, Presdio I Trial Tr. 91-93.)

Plaintiffs concede this, yet argue that Mruz was not aware of

the ‘791 Patent until his deposition in this case in 2017.

(Opp. 23.) Defendant further contends that plaintiffs’

employees apparently reported the fact that BB capacitors

contained vias to other engineers and to plaintiffs’ upper

management. As evidence, defendant points to a 2004 email

between Mruz and Bob Grossbach, another ATC engineer, attaching

presentation slides which included a diagram of a capacitor with

vias entitled “The Approach of Vendor ‘P.’” (DM 11 (citing ECF

No. 206-2, Def.’s Ex. 16, Slides 110-18).) Based on this

evidence, and plaintiffs’ concession, the court can at least

conclude that employees at ATC had knowledge that BB capacitors

contained vias sometime between 2002 and 2004. Whether or not

this presentation was actually given to, or even intended for,

ATC’s management has not been proven, but is also not disputed

by plaintiffs.

This allegation alone, however—that ATC’s employees,

and possibly its management, knew the BB capacitors contained

vias—is not sufficient to establish that plaintiffs were aware

the BB capacitors infringed the ‘791 Patent as early as 2002 or

2004. Defendant must tie the fact that BB capacitors contained

vias to the ‘791 Patent to establish ATC’s waiver. Knowledge of

the vias alone cannot do this.

Defendant attempts this connection by citing emails

from Mruz that indicate he was aware of Presidio products that

were covered by a Monsorno patent. In 2004, Mruz noted to

another ATC employee that Presidio used plaintiffs’ “patented

BMC configuration.” (ECF No. 206-2, Def.’s Ex. 18, Mruz Apr.

23, 2004 Email 124.) Mruz also determined in 2004 that certain

Presidio broadband capacitors used “Rich Monsorno’s BMC

structure.” (Def.’s Ex. 19, Mruz Mar. 11, 2014 Email 126.)

Though plaintiffs do not dispute Mruz’s conclusion, the parties

disagree as to which Monsorno patent Mruz referred. Defendant

contends that the ‘791 Patent is the only Monsorno patent that

claims vias. (DM 12.) This fact, they argue, indicates the

Monsorno patent referred to in Mruz’s March 11, 2004 email is

the ‘791 Patent, and not some other patent. Plaintiffs respond

that the structure apparently covered by the Monsorno patent in

Mruz’s email attachment was not the capacitor’s vias, but the

BMC structure. (Opp. 26-27.) Plaintiffs point out the asterisk

placed by Mruz next to the annotated BMC structure, which refers

to the additional annotation “[t]his is covered in the Monsorno

patent.” (Mruz Mar. 11, 2014 Email 127.) Plaintiffs also argue

that Mruz testified, without contrary evidence, that he was

unaware of the ‘791 Patent until 2017. (Opp. 23.) Plaintiffs

further argue, albeit in a footnote, that Mruz testified at a

different trial between the parties and referred to a BMC

structure as patented in Monsorno’s ‘926 Patent, U.S. Pat. No.

5,576,926. (Id. at 28 n.9 (citing Pls.’ Ex. 20, Tr. 116).)

The parties dispute, then, amounts to whether the

Monsorno patent referred to in Exhibit 19 is the ‘791 Patent

such that it is clear plaintiffs had actual knowledge of

defendant’s alleged infringement of that patent and not some

other Monsorno patent. Defendant argues in support of its

position that the ‘791 Patent refers to itself as a BMC

capacitor, because it describes “BMC” capacitors as those

including buried electrodes and describes a preferred embodiment

as one including a buried layer capacitor structure. (DM 12

(citing ‘791 Patent col.1 l.26; col.2 l.34).) Therefore, a

reference to a “Monsorno BMC patent,” according to defendant

must refer to the ‘791 Patent. (DM 13.) Defendant further

points to the ‘791 Patent’s claim of a buried electrode, (‘791

Patent col.4 l.33), a specification describing a preferred

embodiment having a first electrode layer surrounded and

literally buried in ceramic, (id. col.3 l.4), and the patent’s

abstract which notes the first electrode layer’s ceramic

enclosure, (id. at 1). Interestingly, however, one of the ‘791

Patent’s preferred embodiment descriptions, upon which defendant

relies refers back to the BMC structure “generally designated

according to the prior art and described more fully in Monsorno

U.S. Pat. No. 5,576,926,” the ‘926 Patent. (‘791 Patent col.2

l.36.) Plaintiffs also point out that the ‘791 Patent does not

refer to “its inventive embodiments as ‘BMC’ structures,” and

that the ‘791 Patent’s inventive embodiments are not

electrically isolated. (Opp. 28.)

Defendant next points to plaintiffs’ characterization

of the BB capacitors as broadband capacitors and the ‘791 Patent

as a broadband patent. (Reply 10.) However, these statements

can not satisfy defendant’s burden. Neither can ATC’s emphasis

at trial that the ‘926 Patent is not a broadband patent. (Id.

(citing Trial Tr. 127:14-19).) These statements at trial, by

plaintiffs’ counsel during his opening statement, do not

establish that the “Monsorno patent” referred to by plaintiffs’

employees in 2004 was the ‘791 Patent.

Defendant finally raises its 2009 trial in California

against ATC for patent infringement. There, plaintiffs’ witness

testified that ATC believed Presidio’s products infringed

“multiple Monsorno BMC patents.” (DM 13 (citing Def.’s Ex. 23,

Presidio I Trial Tr. 148).) The same witness, ATC’s former Vice

President, Kathleen Kelly, testified that plaintiffs declined to

sue Presidio for infringement due to some policy implemented by

Victor Insetta, ATC’s founder. Defendant argues this testimony

makes clear that plaintiffs believed Presidio infringed multiple

Monsorno patents, including the ‘791 Patent, which defendant

calls a BMC patent. Plaintiffs respond by pointing to Kelly’s

deposition testimony in this case that she was not aware of any

ATC employee completing an infringement analysis of Presidio’s

products infringing the ‘791 Patent. (ECF No. 207-2, Pls.’ Ex.

15, Kelly Dep. 167-68.)

Defendant’s contention that ATC honored a corporate

policy of non-enforcement is not mere speculation given Kelly’s

earlier trial testimony. However, even if defendant proved the

policy, it would not necessarily prove that ATC intentionally

waived its rights under the ‘791 Patent with full knowledge of

the material facts. Defendant does speculate, however, when it

implies that plaintiffs declined to sue upon learning of

Presidio’s alleged infringement because plaintiffs did not, at

the time, have a product that competed with the BB capacitors.

(DM 13 (citing 416).) This speculative argument does not

support a finding of knowing waiver by ATC.

The court finds that defendant has not established

waiver by clear and convincing evidence, or even by a

preponderance of the evidence. As the court found in denying

plaintiffs’ summary judgment, the Mruz email referring to BMC

structures “leaves significant room for dispute.” (SJ Order

76.) Defendant, however, has not clarified the uncertainty

surrounding this email with evidence sufficient to leave the

court with a clear and abiding conviction that Mruz was aware

that the BB capacitors, as early as 2004, potentially infringed

the ‘791 Patent. Mruz is clearly referring to and even

annotated the BMC structure, not vias, when he referred to

Monsorno’s patent. Moreover, even the ‘791 Patent refers to the

‘926 Patent as prior art describing more fully the claimed BMC

structures. The court cannot find that even a preponderance of

the evidence establishes Mruz’s knowledge as early as 2002 or

2004 of both the ‘791 Patent and Presidio’s alleged

infringement.

Defendant’s remaining evidentiary support in Kelly’s

prior testimony offers no further clarity. In light of her

deposition testimony in this case, Kelly’s testimony at a

previous trial does not clearly establish that she was referring

to Presidio’s infringement of the ‘791 Patent. All defendant

has adduced is evidence that ATC was aware Presidio employed

vias in its BB capacitors as early as 2002, and that plaintiffs’

employee believed certain of Presidio’s products were “covered

by” a “Monsorno patent.” Defendant has not, therefore,

established which Monsorno patent Mruz referenced. Mruz’s

deposition testimony at least contradicts evidence that he was

referring to the ‘791 Patent in 2004. The record remains

unclear as to this point, and likely weighs in plaintiffs’

favor. Thus, defendant has not established by clear and

convincing evidence that plaintiff ATC had, with full knowledge

of its rights, intentionally waived its right to sue under the

‘791 Patent.

CONCLUSION

For the foregoing reasons the court finds: (1) that

the claim term “negligibly over a top surface” is not invalid

for indefiniteness; and (2) that plaintiffs did not waive their

right to sue under the ‘791 Patent. The parties shall file a

proposed judgment within 30 days of the date of this Order.

SO ORDERED.

Dated: October 16, 2019

Brooklyn, New York

/s/

HON. KIYO A. MATSUMOTO

United States District Judge

Eastern District of New York