Case 2:15-cv-01274-JRG-RSP Document 439 Filed 02/02/17 Page 1 of 8 PageID #: 29951
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`NO. 2:15-CV-01274-JRG-RSP
`(LEAD CASE)
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`JURY TRIAL DEMANDED
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`§
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`HONDA’S OBJECTIONS TO THE COURT’S REPORT AND RECOMMENDATION
`DENYING DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT ON
`NONCOMPLIANCE WITH MARKING REQUIREMENTS UNDER 35 U.S.C. § 287(a)
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`BLITZSAFE TEXAS, LLC,
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`Plaintiff,
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`v.
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`HONDA MOTOR CO., LTD., ET AL.,
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`Defendants.
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`Case 2:15-cv-01274-JRG-RSP Document 439 Filed 02/02/17 Page 2 of 8 PageID #: 29952
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`Pursuant to Federal Rule of Civil Procedure 72 and Local Rule CV-72(b), Defendants
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`American Honda Motor Co., Inc., Honda of America Mfg., Inc., Honda Manufacturing of
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`Alabama, LLC, Honda Manufacturing of Indiana, LLC (“Honda”) hereby object to the January
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`26, 2017 Report and Recommendation (Dkt. No. 403) denying Defendants’ Motion for Partial
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`Summary Judgment of Noncompliance with Marking Requirements Under 35 U.S.C. § 287(a)
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`(Dkt. No. 201).
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`I.
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`Blitzsafe bears the burden to prove its licensees complied with the marking statute.
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`In denying Defendants’ motion, the Court erred in holding that Defendants bear the
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`threshold burden of showing that an unmarked patented product exists. Dkt. No. 403 at 3. In
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`earlier cases, courts in this District rejected improper attempts by patentees to shift the burden of
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`proof by insisting that an accused infringer must come forward with evidence of the patentee’s
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`failure to mark, and the Court’s denial of Defendants’ motion breaks from this precedent. See
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`Pact XPP Techs., AG v. Xilinx, Inc., No. 2:07-cv-563-RSP, 2012 U.S. Dist. LEXIS 40651, at *9–
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`12 (E.D. Tex. Mar. 26, 2012) (“At trial, PACT would have the burden to prove compliance with
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`the marking statute by a preponderance of the evidence.”); see also Soverain Software LLC v.
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`Amazon.com, Inc., 383 F. Supp. 2d 904, 908, 911 (E.D. Tex. 2005) (granting summary judgment
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`that licensees did not comply with the marking requirements because the patentee “failed to
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`bring forth any evidence that [its licensees] complied with the statute by marking any products
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`they offered for sale or by not selling any products at all”).
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`The cases from other districts upon which the Court relied in denying Defendants’
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`motion are outliers that deviate from the previous approach taken by this District in Pact XPP
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`Techs. and Soverain Software. In DR Systems, Inc. v. Eastman Kodak Co., No. 08-cv-669, 2009
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`U.S. Dist. LEXIS 75549, at *10–13 (S.D. Cal. Aug. 25, 2009), the Southern District of
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`California correctly described the line of cases placing the burden on an accused infringer “to
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`Case 2:15-cv-01274-JRG-RSP Document 439 Filed 02/02/17 Page 3 of 8 PageID #: 29953
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`show the existence of a ‘patented article’ triggering the statute” as “the exception rather than the
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`rule.” Specifically relying on the holding from this District in Soverain Software, as well as
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`decisions from the Federal Circuit and the Supreme Court, the DR Systems court refused to place
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`the burden to identify products covered by the patent on the accused infringer as the Court has
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`done in this case. See DR Systems, 2009 U.S. Dist. LEXIS 75549, at *12 (citing Soverain
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`Software, 383 F. Supp. 2d at 908). As the DR Systems court explained, the Supreme Court and
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`the Federal Circuit have “consistently stated the general principle that the patentee must prove its
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`compliance with the marking statute” because “a patentee’s compliance is ‘a matter peculiarly
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`within his own knowledge.’” See id. (quoting Dunlap v. Schofield, 152 U.S. 244, 248 (1894) and
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`citing Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1446 (Fed. Cir. 1998); Maxwell v. J.
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`Baker, Inc., 86 F.3d 1098, 1111 (Fed. Cir. 1996)).
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`Most district courts agree with the approach taken by the DR Systems court, and on
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`summary judgment evidence mirroring the evidence in this case, those courts have repeatedly
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`held that a patentee fails to comply with § 287(a) when it fails to produce summary judgment
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`evidence showing that it made reasonable efforts to ensure that its licensees complied with the
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`marking statute. See, e.g., Adrea, LLC v. Barnes & Noble, Inc., No. 13 Civ. 4137, 2014 U.S.
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`Dist. LEXIS 92698, at *5–6 (S.D.N.Y. July 1, 2014) (holding “that it is the patentee who bears
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`the burden in pleading and proving compliance with the marking statute” and granting summary
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`judgment as to the ’851 patent based on the patentee’s infringement allegations in prior
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`litigation); U.S. Ethernet Innovations, LLC v. Acer, Inc., No. C 10-3724, 2013 U.S. Dist. LEXIS
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`116640, at *36, *51–56 (N.D. Cal. Aug. 16, 2013) (holding that the patentee “bears the burden
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`of pleading and proving compliance with the marking statute” and granting summary judgment
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`to the accused infringer because the patentee “ha[d] consistently taken the position that the
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`Case 2:15-cv-01274-JRG-RSP Document 439 Filed 02/02/17 Page 4 of 8 PageID #: 29954
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`relevant products sold by [its licensee] Intel infringe its patents, and it ha[d] not offered any
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`evidence . . . that they do not—instead, it just speculate[d] that the factfinder ultimately may find
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`that [the] products do not infringe”); Kimberly-Clark Worldwide, Inc. v. First Quality Baby
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`Prods., LLC, No. 1:09-cv-1685, 2013 U.S. Dist. LEXIS 61272, at *22–23 (M.D. Pa. Apr. 30,
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`2013) (rejecting placing the burden on the accused infringer to identify what products, if any,
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`practice the patent and granting summary judgment to the accused infringer where “three other
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`companies . . . were licensed or otherwise given carte blanche to practice the [asserted patent],”
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`but only one was contractually obligated to mark its products).
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`This Court erred when it departed from the sound reasoning of the Supreme Court, the
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`Federal Circuit, the majority of other district courts, and earlier decisions in this District by
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`improperly placing the burden on Defendants to prove the existence of unmarked patented
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`products. The summary judgment evidence in this case shows that (1) Blitzsafe did not provide
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`actual notice of infringement prior to filing these lawsuits; (2) Blitzsafe’s predecessor accused
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`specific AAMP and Ford products of infringing the patents-in-suit; (3) Blitzsafe’s predecessor
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`then licensed AAMP and Ford to practice the patents-in-suit; (4) no marking requirements were
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`included in these licenses, and Blitzsafe did not endeavor to ensure that AAMP and Ford marked
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`their products with the patents-in-suit; and (5) AAMP and Ford continued to sell these licensed,
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`but unmarked, products prior to the filing of these lawsuits. See Dkt. No. 201 at 3–7, 11–15;
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`Dkt. No. 248 at 2–7; Dkt No. 254 at 1–2. With the burden of proving compliance with § 287(a)
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`properly placed on Blitzsafe, Defendants are entitled to summary judgment that Blitzsafe did not
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`comply with the marking requirements and precluding Blitzsafe from recovering pre-suit
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`damages.
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`3
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`II.
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`Defendants satisfied their initial burden as set forth in the cases relied upon by the
`Court.
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`Although the Court erred by departing from prior decisions in this District and placing
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`“the threshold burden of showing that an unmarked product exits” on Defendants, Defendants
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`still should have prevailed under that standard as set forth in the outlier cases upon which the
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`Court relied. The Court adopted “the view espoused by the Northern District of California in
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`Oracle Am., Inc. v. Google Inc., 2011 WL 5576228, (N.D. Cal. Nov. 15, 2011)” but it misapplied
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`that standard to the summary judgment evidence in this case. The Oracle court denied Google’s
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`motion for summary judgment because there was no evidence in the summary judgment record
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`that could establish that any patented articles were sold in the United States before Oracle first
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`gave actual notice of specific infringement claims on July 20, 2010. Oracle, 2011 WL 5576228,
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`at *2–3. Google relied exclusively on Oracle’s infringement contentions, which “listed various
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`‘instrumentalities’ which Oracle claimed to ‘practice the asserted claims.’” Id. at *2. Those
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`contentions, however, were undated, did not specify the claims, and did not identify a date of
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`sale or importation. Id. Defendants’ summary judgment evidence does not suffer from these
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`deficiencies and, therefore, was sufficient to trigger Blitzsafe’s burden. Defendants produced the
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`patentee’s prior complaints and infringement contentions mapping the claims of the patents-in-
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`suit to AAMP and Ford products as well as evidence of sales of those unmarked products after
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`they were licensed and prior to the filing of these lawsuits. See Exh. A, C, F, H, L, N, O, P, Q to
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`Dkt. No. 201; Dkt. No. 248 at 5–6; Exh. S to Dkt. No. 254. This evidence was more than
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`sufficient to trigger Blitzsafe’s burden under the standard adopted by the Court.
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`The MobileMedia and Fortinet decisions treat the accused infringer’s initial burden of
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`production in a similar manner. The MobileMedia court held that an accused infringer need only
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`“come forward with a particular unmarked product allegedly triggering § 287” in order to shift
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`the burden “to the patentee to show compliance with the marking statute.” MobileMedia Ideas,
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`LLC v. Apple Inc., No. 10-258-SLR, 2016 WL 3958723, at *5 (D. Del. July 21, 2016) (emphasis
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`added). The Fortinet court held that the accused infringer need only “identify the . . . products it
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`believes practice the inventions claimed” in order to shift “the burden of persuasion . . . to [the
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`patentee] to show that [the] products do not practice the inventions claimed.” See Fortinet, Inc.
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`v. Sophos, Inc., No. 13-cv-5831, 2015 WL 5971585, at *5 (N.D. Cal. Oct. 14, 2015) (emphasis
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`added). Again, under the standards described in these cases, Defendants met their burden of
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`production, but Blitzsafe offered no admissible evidence to meet its burden of persuasion.
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`Blitzsafe admits that it took no steps to ensure that AAMP and Ford marked their
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`products. Dkt. No. 248 at 3–4, 6. Blitzsafe now disclaims its infringement allegations against
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`AAMP and Ford, but the only summary judgment evidence it produced to show that the AAMP
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`and Ford products do not practice the patents-in-suit are the out of court statements of AAMP
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`and Ford denying Blitzsafe’s own allegations of infringement.1 See Dkt. 201-7; Exh. A, C, D to
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`Dkt. No. 248. These out of court statements are inadmissible hearsay not covered by any
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`hearsay exception, and they should not have been considered by the Court.2 Fed. R. Evid. 801-
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`804; Fed. R. Civ. P. 56; Mersch v. City of Dallas, 207 F.3d 732, 734–75 (5th Cir. 2000).
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`III. Conclusion
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`Honda requests that the Court set aside the January 26, 2017 Report and
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`Recommendation and grant Defendants’ motion for the reasons set forth herein and in
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`Defendants’ original briefing.
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`1 Blitzsafe’s counsel offered a preview of Mr. Marlowe’s potential trial testimony at the pretrial hearing, but this is
`not part of the summary judgment record and should not have been considered by the Court. See Dkt. No. 399 at 19,
`28–29. Fed. R. Civ. P. 56; Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915 (5th Cir. 1992); see also Alverson v.
`Harrison Cty., 643 F. App’x 413, 415 (5th Cir. 2016) (unpublished).
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`2 Blitzsafe’s counsel admitted Ford’s noninfringement contentions are inadmissible. Dkt. No. 399 at 18.
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`Respectfully submitted,
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`/s/ Joseph M. Beauchamp
`Joseph M. Beauchamp
`Texas State Bar No. 24012266
`Email: jbeauchamp@jonesday.com
`H. Albert Liou
`Texas State Bar No. 24061608
`Email: aliou@jonesday.com
`JONES DAY
`717 Texas Street, Suite 3300
`Houston, Texas 77002-2712
`Telephone: (832) 239-3939
`Facsimile: (832) 239-3600
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`Robert W. Kantner
`Texas State Bar No. 11093900
`Email: rwkantner@jonesday.com
`Jeffrey M. White
`Texas State Bar No. 24064380
`Email: jwhite@jonesday.com
`JONES DAY
`2727 North Harwood Street
`Dallas, TX 75201.1515
`Telephone: +1.214.220.3939
`Facsimile: +1.214.969.5100
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`ATTORNEYS FOR DEFENDANTS
`AMERICAN HONDA MOTOR CO.,
`INC.; HONDA OF AMERICA MFG.,
`INC.; HONDA MANUFACTURING OF
`ALABAMA, LLC; AND HONDA
`MANUFACTURING OF INDIANA, LLC
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`Dated: February 2, 2017
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`
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`Joseph Melnik
`California State Bar No. 255601
`Email: jmelnik@jonesday.com
`JONES DAY
`1755 Embarcadero Road
`Palo Alto, California 94303
`Telephone: (650) 739-3939
`Facsimile: (650) 739-3900
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`Randy Akin
`Texas State Bar No. 00954900
`Email: gra@randyakin.com
`G. R. (Randy) Akin, P.C.
`3400 W. Marshall Avenue, Suite 300
`Longview, Texas 75604
`Telephone: (903) 297-8929
`Facsimile: (903)297-9046
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`Case 2:15-cv-01274-JRG-RSP Document 439 Filed 02/02/17 Page 8 of 8 PageID #: 29958
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that the foregoing document was filed on February 2, 2017, and
`was served electronically on all counsel who have consented to electronic service.
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`Joseph M. Beachamp
`Joseph M. Beauchamp
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