4:12-cv-11758-GAD-MKM Doc # 552 Filed 06/15/15 Pg 1 of 10 Pg ID 44685
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`Case No. 12-cv-11758
`HON. GERSHWIN A. DRAIN
`
`EVERLIGHT ELECTRONICS CO.,
`LTD.,
`
`Plaintiff/Counter-Defendant,
`
`vs.
`
`NICHIA CORPORATION, and
`NICHIA AMERICA CORPORATION,
`
`
`Defendants/Counter-Plaintiffs,
`
`vs.
`
`EVERLIGHT AMERICAS, INC.,
`
`Defendant.
`__________________________________/
`
`ORDER REGARDING NICHIA’S OBJECTIONS TO EVERLIGHT’S
`THEORIES OF INEQUITABLE CONDUCT [#540]
`
`I.
`
`INTRODUCTION
`
`This matter is set for the Phase 2 bench trial to commence on June 15, 2015.
`
`On May 27, 2015, Everlight filed with the Court its Submission Regarding its
`
`Inequitable Conduct Theories to be Presented at the Upcoming Phase 2 Trial.
`
`Presently before the Court are Nichia’s objections to some of Everlight’s asserted
`
`theories of inequitable conduct, filed on June 5, 2015. Everlight has filed a Response
`
`
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`Case No. 12-cv-11758
`HON. GERSHWIN A. DRAIN
`
`EVERLIGHT ELECTRONICS CO.,
`LTD.,
`
`Plaintiff/Counter-Defendant,
`
`vs.
`
`NICHIA CORPORATION, and
`NICHIA AMERICA CORPORATION,
`
`
`Defendants/Counter-Plaintiffs,
`
`vs.
`
`EVERLIGHT AMERICAS, INC.,
`
`Defendant.
`__________________________________/
`
`ORDER REGARDING NICHIA’S OBJECTIONS TO EVERLIGHT’S
`THEORIES OF INEQUITABLE CONDUCT [#540]
`
`I.
`
`INTRODUCTION
`
`This matter is set for the Phase 2 bench trial to commence on June 15, 2015.
`
`On May 27, 2015, Everlight filed with the Court its Submission Regarding its
`
`Inequitable Conduct Theories to be Presented at the Upcoming Phase 2 Trial.
`
`Presently before the Court are Nichia’s objections to some of Everlight’s asserted
`
`theories of inequitable conduct, filed on June 5, 2015. Everlight has filed a Response
`
`
`
`4:12-cv-11758-GAD-MKM Doc # 552 Filed 06/15/15 Pg 2 of 10 Pg ID 44686
`
`to Nichia’s Objections and Nichia has filed a Reply in support of its objections.
`
`Specifically, Nichia objects to three theories that Everlight seeks to raise during
`
`the Phase 2 trial. Nichia requests that based on its objections, the Court not consider
`
`the following evidence or argument:
`
`(1)
`(2)
`
`(3)
`
`(4)
`
`(5)
`
`a theory of infectious unenforceability of the ‘960 Patent;
`any theory of alleged inequitable conduct regarding the
`‘960 Patent other than a theory based on Example 8;
`any theory of alleged inequitable conduct specifically based
`on “GAG;”
`any theory of alleged inequitable conduct based on the tests
`performed by the inventors on GAG; and
`any inequitable conduct allegations based on the allegations
`of “Nichia.”
`
`Everlight asserts that Nichia has ignored this Court’s directive precluding the
`
`filing of additional motions in limine and has repackaged its in limine arguments as
`
`the instant objections. Everlight further maintains that even aside from the procedural
`
`impropriety of Nichia’s objections, its substantive positions are without merit and
`
`ignore large portions of Everlight’s Second Amended Complaint.
`
`II.
`
`DISCUSSION
`
`A)
`
`Allegations Based on Infectious Unenforceability
`
`Nichia argues that the Court has already decided this issue when it dismissed
`
`Everlight’s inequitable conduct allegation relating to the ‘960 Patent in Everlight’s
`
`First Amended Complaint, thus Everlight should be precluded from pursuing a theory
`
`-2-
`
`
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`4:12-cv-11758-GAD-MKM Doc # 552 Filed 06/15/15 Pg 3 of 10 Pg ID 44687
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`of infectious unenforceabililty. In the First Amended Complaint, Everlight based part
`
`of its inequitable conduct theory concerning the ‘960 Patent on the purported
`
`inequitable conduct concerning the ‘925 Patent. The Court found such an allegation
`
`warranted dismissal.
`
`Thereafter, the Court permitted Everlight to file a Second Amended Complaint
`
`in order to raise its inequitable conduct allegations again as the amendment appeared
`
`to remedy the deficiencies identified by the Court in its dismissal order. However,
`
`Everlight apparently did not remedy its infectious unenforceabililty theory related to
`
`the ‘960 Patent. Nichia argues that law of the case doctrine precludes Everlight from
`
`pursuing its infectious unenforceabililty theory with respect to the ‘960 Patent. See
`
`Pepper v. United States, __ U.S. __, 131 S.Ct. 1229, 1250 (2011) (quoting Arizona
`
`v. California, 460 U.S. 605, 618 (1983)).
`
`Everlight maintains that, contrary to Nichia’s contention, the Second Amended
`
`Complaint pled new facts that bear directly on infectious enforceability. However,
`
`Everlight’s argument rests on its allegations concerning false examples and claims of
`
`inventorship made during the prosecution of the ‘925 Patent. Nonetheless, because
`
`the Court granted Everlight leave to amend, Everlight maintains that the Court
`
`implicitly permitted Everlight’s theories of infectious unenforceability based upon the
`
`facts pled in the Second Amended Complaint.
`
`-3-
`
`
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`4:12-cv-11758-GAD-MKM Doc # 552 Filed 06/15/15 Pg 4 of 10 Pg ID 44688
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`Even though the Court permitted amendment, Everlight fails to explain how it
`
`remedied its factual allegations with respect to infectious unenforceability as it relates
`
`to the ‘960 Patent. Law of the case doctrine precludes this Court from allowing
`
`Everlight to proceed on this theory when it “has not alleged any inequitable conduct
`
`during the preparation and prosecution of the ‘960 Patent.” See Dkt. NO. 50 at 19.
`
`The Court has held that Everlight’s infectious unenforceability argument lacks merit;
`
`“even if the ‘925 Patent is found to be unenforceable, the ‘960 Patent would not be
`
`affected.” Id. (citing Baxter Intern., Inc. v. McGaw, Inc., 149 F.3d 1321, 1332 (Fed.
`
`Cir. 1998). Based on the foregoing, the Court will SUSTAIN Nichia’s objection to
`
`Everlight’s infectious unenforceability theory relative to the ‘960 Patent and
`
`PRECLUDE Everlight from arguing that the ‘960 Patent is unenforceable due to
`
`conduct committed during the prosecution of the ‘925 Patent.
`
`B)
`
`i)
`
`Allegations Not Disclosed in the SAC
`
`Allegations Regarding the ‘960 Patent Not Based on Example 8
`
`Here, Nichia complains that Everlight has previously only disclosed one
`
`inequitable conduct theory concerning the ‘960 Patent, specifically the alleged
`
`fabrication of Example 8. Everlight contends Example 8 is the only example
`
`disclosed with a phosphor with a peak wavelength at or near 600 nm. However,
`
`Everlight’s Submission presents an entirely new theory based on the test results
`
`-4-
`
`
`
`4:12-cv-11758-GAD-MKM Doc # 552 Filed 06/15/15 Pg 5 of 10 Pg ID 44689
`
`contained in the inventors’ notebooks. Everlight now theorizes that since none of the
`
`inventors’ notebooks disclosed test results that achieved a peak emission wavelength
`
`of 600 nm, the statements in the specification and the claims of inventorship of a
`
`phosphor with a peak emission wavelength near 600 nm were false.
`
`Nichia argues that it has been severely prejudiced by Everlight’s new theory
`
`and directs the Court’s attention to past rulings preventing the parties from relying on
`
`theories and arguments not timely disclosed during the discovery period. See Dkt.
`
`Nos. 355, 434. As such, Nichia maintains that Everlight should only be permitted to
`
`present inequitable conduct theories concerning the ‘960 Patent that were disclosed
`
`in the Second Amended Complaint.
`
`Everlight argues that, contrary to Nichia’s arguments, the Second Amended
`
`Complaint pleads facts other than the falsity of Example 8. For instance, Everlight’s
`
`inequitable conduct theory for the ‘960 Patent is premised on false claims of
`
`inventorship of a phosphor that has a peak wavelength of 590 nm to 600 nm:
`
`Specifically, independent claim 14 of the ‘960 Patent covers an LED
`with a fluorescent material that has a spectrum with “a peak wavelength
`existing around the range from 510 nm to 600 nm.” Noguchi, Sakano,
`and Shimizu knew that they had not invented with a fluorescent material
`that has a spectrum with a peak wavelength in the range of 590 nm to
`600 nm.
`
`See Sec. Am. Compl., ¶ 296. Moreover, paragraphs 297 and 310 also allege theories
`
`of inequitable conduct that are separate from Example 8 and are facts that relate to a
`
`-5-
`
`
`
`4:12-cv-11758-GAD-MKM Doc # 552 Filed 06/15/15 Pg 6 of 10 Pg ID 44690
`
`different phosphor than the phosphor described in Example 8.
`
`For instance, paragraph 310 states:
`
`Furthermore, at least one of the named inventors (Noguchi) conducted
`experiments that showed a full substitution replacement of yttrium by
`gadolinium could not work in a phosphor to be used in an LED. On July
`29, 1996, on the very same day when the earliest of the Japanese priority
`application was filed, which expressly claims full replacement of yttrium
`with gadolinium, Noguchi filed a patent application in Japan, which
`shows that alleged full replacement of yttrium by gadolinium would
`result in zero luminosity.
`
`The fact that GAG has zero luminance is wholly separate from Example 8 and was
`
`one of the arguments that Everlight successfully presented to the jury to invalidate
`
`claim 14.
`
`Nichia responds that the paragraphs identified by Everlight-296, 297 and 310-
`
`are in the “Overview of Misconduct” and “Factual Background” portions of the SAC
`
`and none alleges any actual act of material misconduct, rather these paragraphs are
`
`directed to the knowledge of the inventors and, “thus, if anything, address the intent
`
`prong, not distinct acts of material misconduct.” Nichia’s Reply at 3. Moreover,
`
`Nichia completely ignores paragraph 299 of the Second Amended Complaint which
`
`concludes the “Overview of Misconduct,” section by clearly grounding its claim in
`
`Example 8.
`
`Based on the foregoing, it appears that Nichia was on notice that Everlight’s
`
`inequitable conduct theories relied on more than Example 8.Therefore, the Court will
`
`-6-
`
`
`
`4:12-cv-11758-GAD-MKM Doc # 552 Filed 06/15/15 Pg 7 of 10 Pg ID 44691
`
`OVERRULE Nichia’s objection.
`
`ii)
`
`Allegations Based on GAG
`
` 1) GAG-specific allegations
`
`Nichia objects to any inequitable conduct theory specifically relating to the
`
`phosphor GAG (Gd3Al5O12). Nichia complains that Everlight’s Second Amended
`
`Complaint argued that no phosphor had been created that fully substituted yttrium for
`
`gadolinium. With respect to this theory, the only Gd based phosphor that Everlight
`
`discussed was Example 8 or (Gd3(Al0.5Ga0.5)5O12:Ce or GAGG. However, Everlight
`
`has revised its theory to specifically rely on the GAG phosphor. Nichia complains
`
`that it has been severely prejudiced by this since this theory was first raised in
`
`Everlight’s Brief in Opposition to Nichia’s Motion for Summary Judgment, well
`
`beyond the fact and expert discovery cutoffs in this matter.
`
`Everlight counters that the Second Amended Complaint explicitly pleads facts
`
`relating to GAG. Paragraph 53 makes explicit reference to Figure 3 of the Noguchi
`
`835 Patent application, which deals with Yttrium being fully replaced by Gadolinium
`
`and makes no mention of GGAG or any other substitution of Aluminum. The next
`
`fifteen paragraphs of the Second Amended Complaint plead facts relating to the
`
`disclosure of GAG in the Noguchi 835 application and the fact that the inventors knew
`
`that GAG would not emit light yet claimed GAG in the ‘925 Patent.
`
`-7-
`
`
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`4:12-cv-11758-GAD-MKM Doc # 552 Filed 06/15/15 Pg 8 of 10 Pg ID 44692
`
`Nichia responds that nowhere in the Second Amended Complaint is GAG
`
`mentioned. Everlight is again pointing the Court only to the “Factual Background”
`
`section of the Second Amended Complaint and not the sections providing actual
`
`notice of its allegations concerning materiality and specific intent.
`
`Based on the foregoing, it appears that Nichia was on notice that Everlight’s
`
`inequitable conduct theories related to the GAG phosphor. Again, the Court will
`
`OVERRULE Nichia’s objection.
`
` 2) GAG Allegations Based on Inventors’ Test Results
`
`Nichia also objects to Everlight’s allegations concerning the inventors’ test
`
`results relating to the GAG phosphor, which was also first disclosed in Everlight’s
`
`Opposition to Nichia’s Motion for Summary Judgment. Nichia complains that
`
`Everlight has further amended its theory by now arguing in its recent Submission that
`
`the inventors’ test results showed that GAG did not emit light suitable to make white
`
`light. Nichia maintains that Everlight has again altered its argument because its prior
`
`theory has now been proven untrue.
`
`Everlight counters that the Second Amended Complaint alleges that the
`
`inventors failed to disclose Noguchi’s test results in the 835 application showing that
`
`GAG does not emit light. The Second Amended Complaint further ties the failure to
`
`disclose the test results with the inventors’ false claims of inventorship. See Sec. Am.
`
`-8-
`
`
`
`4:12-cv-11758-GAD-MKM Doc # 552 Filed 06/15/15 Pg 9 of 10 Pg ID 44693
`
`Compl., ¶ 65. (“Noguchi, Sakano, and Shimizu failed to bring the data and
`
`conclusions of Noguchi’s prior work to the attention of the PTO, notwithstanding
`
`their obvious knowledge that they were highly relevant to the inventions claimed in
`
`the ‘925 Patent.”) Moreover, Everlight cannot be expected to cite to specific test
`
`results in its Second Amended Complaint because it was filed prior to Nichia’s
`
`production of any documents in this litigation. Rule 9(b) of the Federal Rules of Civil
`
`Procedure does not require a party to plead every piece of evidence that supports its
`
`claims.
`
`Based on the foregoing, the Court will OVERRULE Nichia’s objection.
`
`3)
`
`Allegations Directed to “Nichia”
`
`Nichia next argues that Everlight’s Submission makes improper references to
`
`false statements made by Messrs. Noguchi, Sakano, Shimizu, as well as Nichia. The
`
`Court agrees with Nichia that the vague reference to ‘Nichia’ is improper as the
`
`Second Amended Complaint is limited to alleging inequitable conduct against the
`
`three named inventors. The Court has previously rejected Everlight’s allegations
`
`against unnamed actors when it dismissed Everlight’s First Amended Complaint for
`
`its failure to identify “a specific individual or individuals who had knowledge of the
`
`fictitious testing and phosphors.” See Dkt. No. 50.
`
`Everlight maintains that its inequitable conduct allegations are directed solely
`
`-9-
`
`
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`4:12-cv-11758-GAD-MKM Doc # 552 Filed 06/15/15 Pg 10 of 10 Pg ID 44694
`
`towards Messrs. Noguchi, Sakano and Shimizu. Based on the foregoing, the Court
`
`will SUSTAIN Nichia’s objection to Everlight’s allegations against ‘Nichia.’
`
`III. CONCLUSION
`
`Accordingly, the Court will SUSTAIN (1) Nichia’s objection to Everlight’s
`
`theory of infectious unenforceability of the ‘960 Patent; (2) OVERRULE Nichia’s
`
`objection to Everlight’s theories of alleged inequitable conduct regarding the’960
`
`Patent other than a theory based on Example 8; (3) OVERRULE Nichia’s objection
`
`to Everlight’s theory of alleged inequitable conduct specifically based on “GAG;” (4)
`
`OVERRULE Nichia’s objection to any theory of alleged inequitable conduct based
`
`on the tests performed by the inventors on GAG; and (5) SUSTAIN Nichia’s objection
`
`to Everlight’s inequitable conduct allegations based on the allegations of “Nichia.”
`
`SO ORDERED.
`
`Dated: June 15, 2015
`
`/s/Gershwin A Drain
`GERSHWIN A. DRAIN
`UNITED STATES DISTRICT JUDGE
`
`-10-
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