Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 1 of 21 PageID #: 19052
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`MAXELL, LTD.,
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`
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`Plaintiff,
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`Civil Action No. 5:19-cv-00036-RWS
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`v.
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`APPLE INC.,
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`Defendant.
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`JURY TRIAL DEMANDED
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`APPLE INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT
`LIMITING MAXELL’S CLAIM FOR DAMAGES FOR
`THE ’999, ’498, ’493, AND ’317 PATENTS UNDER 35 U.S.C. § 287(a)
`AND
`FOR NO ENHANCED DAMAGES UNDER 35 U.S.C. § 284
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`

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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 2 of 21 PageID #: 19053
`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 2 of 21 PageID #: 19053
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`TABLE OF CONTENTS
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`2.55:”
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`INTRODUCTION ............................................................................................................. 1
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`STATEMENT OF ISSUES TO BE DECIDED BY THE COURT .................................. 1
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`STATEMENT OF UNDISPUTED MATERLAL FACTS ................................................ 2
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`LEGAL STANDARDS ..................................................................................................... 5
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`Page
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`A.
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`B.
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`Damages Under 35 U.S.C. § 287 ........................................................................... 5
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`Increased Damages Under 35 U.S.C. § 284 ........................................................... 6
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`.<
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`ARGUMENT ..................................................................................................................... 7
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`A.
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`Maxell’s Damages Are Limited For Failure To Provide Notice Under
`§ 287 ....................................................................................................................... 7
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`1.
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`2.
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`3.
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`B.
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`Maxell Is Not Entitled To Any Enhanced Damages Under § 284 ....................... 10
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`1.
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`2.
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`Apple’s Motion For No Enhanced Damages Is Ripe............................... 11
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`Apple’s Conduct Was Neither Egregious Nor Worthy of
`leishment ............................................................................................... 12
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`VI.
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`CONCLUSION ................................................................................................................ 1 5
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`

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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 3 of 21 PageID #: 19054
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`
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`TABLE OF AUTHORITIES
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`Page
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`CASES
`Amsted Indus. Inc. v. Buckeye Steel Castings Co.,
`24 F.3d 178 (Fed. Cir. 1994)....................................................................................... 6, 8, 9, 10
`bioMerieux, S.A. v. Hologic, Inc.,
`No. 18-cv-21, 2020 WL 759546 (D. Del. Feb. 7, 2020) ......................................................... 14
`Bioverativ Inc. v. CSL Behring LLC,
`No. 17-cv-914, 2020 WL 1332921 (D. Del. Mar. 23, 2020) .................................................. 14
`Document Sec. Sys., Inc. v. Nichia Corp.,
`No. 19-cv-08172 (C.D. Cal. Mar. 4, 2020) .............................................................................. 14
`Edwards v. Hartford Underwriters Ins. Co., No. 1:18-CV-370, 2019 WL
`5790857, at *4 (E.D. Tex. Oct. 18, 2019), report and recommendation
`adopted, No. 1:18-CV-370, 2019 WL 5722111 (E.D. Tex. Nov. 4, 2019) ............................ 12
`Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc.,
`946 F.3d 1367 (Fed. Cir. 2020)................................................................................................. 1
`Finjan, Inc. v. Blue Coat Sys., Inc.,
`No. 13-cv-03999, 2016 WL 3880774 (N.D. Cal. July 18, 2016), rev’d in part on
`other grounds, 879 F.3d 1299 (Fed. Cir. 2018) ....................................................................... 14
`Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir. 1994) ..................................................................... 13
`Gart v. Logitech, Inc.,
`254 F.3d 1334 (Fed. Cir. 2001)............................................................................................. 6, 9
`Global-Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011) ................................................................................................................ 11
`Halo Elecs., Inc. v. Pulse Elecs., Inc.,
`136 S. Ct. 1923 (2016) ......................................................................................................... 7, 14
`IP Power Holdings Ltd. v. Westfield Outdoor, Inc.,
`No. 19-cv-01878, 2020 WL 2992415 (D. Nev. June 4, 2020) ............................................... 14
`LoggerHead Tools, LLC v. Sears Holdings Corp.,
`No. 12-cv-9033, 2016 WL 5112017 (N.D. Ill. Sept. 20, 2016) ................................................ 15
`Mass. Inst. of Tech. v. Abacus Software, Inc.,
`No. 5:01-cv-344, 2004 WL 5268125 (E.D. Tex. Sept. 29, 2004)........................................... 8, 9
`Nike, Inc. v. Wal-Mart Stores, Inc.,
`138 F.3d 1437 (Fed. Cir. 1998)................................................................................................. 6
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`ii
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 4 of 21 PageID #: 19055
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`
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`TABLE OF AUTHORITIES
`(continued)
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`Page
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`Read Corp. v. Portec, Inc.,
`970 F.2d 816 (Fed. Cir. 1992) ................................................................................................. 15
`Solutran, Inc. v. U.S. Bancorp,
`No. 13-cv-02637, 2019 WL 405513 (D. Minn. Jan. 18, 2019) ................................................ 14
`SRI Int’l, Inc. v. Cisco Sys., Inc.,
`No. 13-cv-1534, 2020 WL 1285915 (D. Del. Mar. 18, 2020), appeal docketed,
`No. 20-1704 (Fed. Cir. Apr. 14, 2020)................................................................................. 7, 14
`WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1325 (Fed. Cir. 2016) ................................................. 12
`STATUTES
`35 U.S.C. § 271(a) ........................................................................................................................ 11
`35 U.S.C. § 284 ........................................................................................................................... 1, 2
`35 U.S.C. § 287 ..................................................................................................................... 2, 8, 10
`35 U.S.C. § 287(a) ............................................................................................................ 1, 6, 9, 10
`RULES
`Fed. R. Civ. P. 56(a) ....................................................................................................................... 6
`
`
`
`iii
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`

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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 5 of 21 PageID #: 19056
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`I.
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`INTRODUCTION
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`Apple moves for summary judgment that Maxell’s damages period is limited and that
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`Maxell is not entitled to enhanced damages.
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`First, Maxell seeks pre-suit damages starting on July 1, 2013 for Apple’s alleged
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`infringement of four1 of the ten asserted patents. To get such damages, Maxell must prove that
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`Apple had actual notice of its alleged infringement as required by 35 U.S.C. § 287(a).
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`Second, Maxell seeks enhanced damages under 35 U.S.C. § 284 even though this is a
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`typical patent infringement dispute that lacks any evidence of egregious behavior by Apple.
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` Accordingly, Eko Brands, LLC v. Adrian Rivera Maynez Enterprises, Inc.
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`confirms that Maxell is not entitled to an award by the Court of enhanced damages on these
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`facts. 946 F.3d 1367 (Fed. Cir. 2020). Consequently, there is no reason to present the predicate
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`question of “willful” infringement to the jury.
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`II.
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`STATEMENT OF ISSUES TO BE DECIDED BY THE COURT
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`Whether Apple is entitled to summary judgment that:
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`1.
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`1 U.S. Patent Nos. 6,748,317; 6,580,999; 8,339,493; and 6,430,498.
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`1
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`2.
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`4.
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`Maxell cannot meet its burden of proving that Apple’s conduct was “egregious”
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`such that Maxell would be entitled to enhanced damages under 35 U.S.C. § 284.
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`III.
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`STATEMENT OF UNDISPUTED MATERIAL FACTS
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`3 For brevity, the Bates prefix “APL-MAXELL_” will hereinafter be cited as “AM,” and the
`Bates prefix “MAXELL_APPLE” will hereinafter be cited as “MA.”
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`2
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 7 of 21 PageID #: 19058
`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 7 of 21 PageID #: 19058
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 8 of 21 PageID #: 19059
`Case 5:19-cv-00036—RWS Document 387 Filed 07/02/20 Page 8 of 21 PageID #: 19059
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 9 of 21 PageID #: 19060
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`IV.
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`LEGAL STANDARDS
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`A.
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`Damages Under 35 U.S.C. § 287
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`To obtain pre-suit damages, Maxell must prove it gave Apple legally-sufficient notice of
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`5
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 10 of 21 PageID #: 19061
`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 10 of 21 PageID #: 19061
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`each asserted patent. See Nike, Inc. v. Wal—Mm‘t Stores, Inc, 138 F.3d 1437, 1446 (Fed. Cir.
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`1998). It can do this in two ways: either by constmctive notice or by actual notice. See Gart v.
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`Logitech, Inc, 254 F.3d 1334, 1345 (Fed. Cir. 2001).—
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`—I—
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`— all aaaal
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`notice requires “the affirmative communication” of a “specific charge of infringement by a
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`specific accused product or device.” Amsted Indus. Inc. v. Bnckeve Steel Castings Co., 24 F.3d
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`178, 187 (Fed. Cir. 1994).
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`B.
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`Increased Damages Under 35 U.S.C. § 284
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`35 U.S.C. § 284 allows the court to “increase the damages up to three times the amount
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`found or assessed.” 35 U.S.C § 284. But there is no requirement that “a jury must consider
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`willfulness before the district court may exercise its discretion to enhance damages lmder § 284”
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`and the Federal Circuit rejected a recent attempt to impose one. Exergen Corp. v. Ka: USA, Inc,
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`725 F. App’x 959. 971—72 (Fed. Cir. 2018). Indeed, a “blanket rule” requiring an irrelevant
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`analysis of willfulness when facts cannot support enhancement “is directly contrary to the
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`Supreme Comt’s mandate [in Halo] that c01uts exercise their discretion free from inelastic rules
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`like the [overturned] Seagate test.” Id. While Halo requires a jury to decide whether an
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`infringement was willful (“deliberate or intentional”), the “question of enhanced damages is
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`addressed by the court” and requires “egregious behavior and punishment.” Eko Brands, 946
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`F.3d at 1378 (emphasis added). A consideration of enhanced damages is properly severed from
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`the question of willfulness because “[d]iscretion remains with the court to determine whether the
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`conduct is sufficiently egregious to warrant enhanced damages.” Presidio Components, Inc. v.
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 11 of 21 PageID #: 19062
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`Am. Tech. Ceramics Corp., 875 F.3d 1369, 1382 (Fed. Cir. 2017).
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`The “considerations of egregious behavior and punishment” attributable to enhanced
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`damages under Eko Brands come directly from the Supreme Court’s edict in Halo: “Awards of
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`enhanced damages under the Patent Act over the past 180 years establish that they are not to be
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`meted out in a typical infringement case, but are instead designed as a ‘punitive’ or ‘vindictive’
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`sanction for egregious infringement behavior.” Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct.
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`1923, 1932 (2016); Eko Brands, 946 F.3d at 1378. “The sort of conduct warranting enhanced
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`damages has been variously described in our cases as willful, wanton, malicious, bad-faith,
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`deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate.” Halo, 136 S.
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`Ct. at 1932; SRI Int’l, Inc. v. Cisco Sys., Inc., No. 13-cv-1534, 2020 WL 1285915, at *1 n.1 (D.
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`Del. Mar. 18, 2020) (disapproving “the lowest common denominator—deliberate—as being
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`sufficient for enhanced damages” because “‘Deliberate,’ used in its ordinary sense, which I take to
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`be ‘carefully thought out,’ is not a synonym for, nor akin to, the other adjectives used in that
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`string.”), appeal docketed, No. 20-1704 (Fed. Cir. Apr. 14, 2020). A case merits enhanced
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`damages only if it involves a “‘wanton and malicious pirate’ who intentionally infringes another’s
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`patent—with no doubts about its validity or any notion of a defense—for no purpose other than to
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`steal the patentee’s business.” Halo, 136 S. Ct. at 1932.
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`V.
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`ARGUMENT
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`A. Maxell’s Damages Are Limited For Failure To Provide Notice Under § 287
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 12 of 21 PageID #: 19063
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`Federal Circuit and Eastern Distlict of Texas precedent requires that, for a particular
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`communication to provide “actual notice,” it must name specific products and make clear
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`allegations that those products infringe specific claims. In Amstea'. the letter stated that the plaintiff
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`had acquired the asserted patent, expected to enforce it, and advised the defendant to refi‘ain fi'om
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`infiinging. 24 F.3d at 186. It also said the defendant “should not offer to supply items which are
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`copies of or designed to replace [Amsted’s product].” 10'. But the Federal Circuit held that these
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`statements did not provide actual notice because they notified “only of Amsted’s ownership of the
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`patent” and “generally advised companies not to infiinge.” Id. at 187. Massachusetts Institute of
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`Teclmo/ogv v. Abacus Software, Inc. , from this Distn'ct. holds similarly. No. 5:01-cv—344. 2004
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`WL 5268125. at *2 (ED. Tex. Sept. 29, 2004). The MT letter claimed the defendant was
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`“commercially involved with digital color image editing,” the patent “covers a system for
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`controlling color reproduction,” and that “to remain competitive. companies involved in the
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 13 of 21 PageID #: 19064
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`scanning, processing and editing of digital color images greatly benefit from a license to use the
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`patented technology.” Id. The plaintiff argued this charged the defendant with infringement for
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`their “entire product line” of image editing software, but the Court found this was not a reasonable
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`inference—the letter was merely “informational” and failed to provide actual notice. Id. at *5‒7.
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`By contrast, Gart illustrates the level of specificity required to effect “actual notice.” The
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`Gart letter identified claims 7 and 8 of the asserted patent, named the accused TRACKMAN
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`VISTA and TRACKMAN MARBLE products, and warned the defendant to examine whether a
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`license was needed for those products. 254 F.3d at 1346. The court found the “reference to
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`specific claims of the patent, a specific product, and the suggestion that a license under the patent
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`may be needed” provided actual notice under 35 U.S.C. § 287(a). Id.
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 14 of 21 PageID #: 19065
`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 14 of 21 PageID #: 19065
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`N|
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`B.
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`Maxell Is Not Entitled To Any Enhanced Damages Under § 284
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`Summaiy judgment on Maxell’s enhanced damages claim is proper because Maxell
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`cannot. as a matter of law, meet its burden to establish that Apple committed the “egregious”
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`10
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 15 of 21 PageID #: 19066
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`misconduct required to support a claim for enhanced damages. Granting Apple’s motion will
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`resolve multiple disputes between the parties and streamline the issues for trial.
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`1.
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`Apple’s Motion For No Enhanced Damages Is Ripe
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`The question of enhanced damages is for the court, not the jury, to decide. Eko Brands,
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`946 F.3d at 1378. Discovery has closed, and Maxell has failed to identify any Apple conduct that
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`could be characterized as egregious.
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` Accordingly, summary judgment now, that Maxell is not entitled
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`to enhanced damages, is warranted. See Exergen, 725 F. App’x at 971‒72; 35 U.S.C. § 284.
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`Summary judgment of no enhanced damages will thus also resolve the issue of willful
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`infringement.
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`would substantially streamline the trial and decrease the possibility of unfair prejudice. See
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`11
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 16 of 21 PageID #: 19067
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`Edwards v. Hartford Underwriters Ins. Co., No. 1:18-CV-370, 2019 WL 5790857, at *4 (E.D.
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`Tex. Oct. 18, 2019), report and recommendation adopted, No. 1:18-CV-370, 2019 WL 5722111
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`(E.D. Tex. Nov. 4, 2019) (“Indeed, numerous courts have held that a district court may grant
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`summary judgment on specific issues without granting summary judgment as to the entire cause
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`of action in order to narrow the issues presented at trial.”).
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`2.
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`Apple’s Conduct Was Neither Egregious Nor Worthy of Punishment
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`Enhanced damages are only proper if there was egregious misconduct. See WBIP, LLC v.
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`Kohler Co., 829 F.3d 1317, 1325 (Fed. Cir. 2016) (enhancing damages where parties were
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`competitors, defendant learned about plaintiff’s technology at a trade show and later launched its
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`own product, and did not dispute its obviousness defense was created during litigation, years after
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`it began its culpable conduct).
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`12
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 17 of 21 PageID #: 19068
`Case 5:19-cv-00036—RWS Document 387 Filed 07/02/20 Page 17 of 21 PageID #: 19068
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`13
`D—‘ U.)
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` Post-Eko Brands cases uniformly agree on this. See SRI, 2020 WL
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`1285915, at *1; Bioverativ Inc. v. CSL Behring LLC, No. 17-cv-914, 2020 WL 1332921, at *4
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`(D. Del. Mar. 23, 2020) (defendant’s actions, including confidential discussions with plaintiff
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`and tracking plaintiff’s clinical data did not amount to “‘consciously wrongful,’ ‘malicious’
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`behavior”); bioMerieux, S.A. v. Hologic, Inc., No. 18-cv-21, 2020 WL 759546, at *13 (D. Del.
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`Feb. 7, 2020) (“pre-suit knowledge alone is not a sufficient basis for a finding of willful
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`infringement” and there was no evidence of copying to support willful infringement); IP Power
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`Holdings Ltd. v. Westfield Outdoor, Inc., No. 19-cv-01878, 2020 WL 2992415, at *3 (D. Nev.
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`June 4, 2020) (“the full correspondence history” shows “it is equally as plausible [defendant] has
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`investigated Plaintiff’s allegations and has formed a good-faith belief it does not infringe”).
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`Even before Eko Brands, courts held that without “egregious misconduct,” there can be no
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`willful infringement. See, e.g., Solutran, Inc. v. U.S. Bancorp, No. 13-cv-02637, 2019 WL
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`405513, at *34 (D. Minn. Jan. 18, 2019) (no enhanced damages because defendant “did not engage
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`in egregious misconduct” and doubting “whether the Federal Circuit’s longstanding treatment of
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`‘willful infringement’ as a predicate to enhanced damages remains good law”); Finjan, Inc. v. Blue
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`Coat Sys., Inc., No. 13-cv-03999, 2016 WL 3880774, at *17 (N.D. Cal. July 18, 2016) (no
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`egregious misconduct because “[w]hen this lawsuit was filed, [defendant] ha[d] reasonable good-
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`faith non-infringement and invalidity defenses,” which “were not rendered unreasonable” though
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`“[plaintiff] prevailed at trial”), rev’d in part on other grounds, 879 F.3d 1299 (Fed. Cir. 2018);
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`Document Sec. Sys., Inc. v. Nichia Corp., No. 19-cv-08172, D. 32 at 6 (C.D. Cal. Mar. 4, 2020)
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`(attached as Ex. Q) (a “[d]isagreement about the existence of continued infringement” does “not
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`support a plausible inference that [an alleged infringer’s] conduct warrants enhanced damages
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`14
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 19 of 21 PageID #: 19070
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`under Halo and § 284”); LoggerHead Tools, LLC v. Sears Holdings Corp., No. 12-cv-9033, 2016
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`WL 5112017, at *4 (N.D. Ill. Sept. 20, 2016) (“[t]he uncontested facts do not show that
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`Defendants engaged in egregiously willful misconduct” when they relied on counsel’s
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`“noninfringement opinion before this litigation began”).
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`In addition, although the factors set forth in Read Corp. v. Portec, Inc., 970 F.2d 816, 826
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`(Fed. Cir. 1992),7 are not a required part of an enhanced damages analysis post-Halo, see Presidio,
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`875 F.3d at 1382, those factors that apply to a pretrial determination of increased damages argue
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`against such a finding here.
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`VI. CONCLUSION
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`For the reasons above, Apple respectfully requests the Court grant summary judgment
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`limiting Maxell’s damages period for the ’317, ’999, ’498, and ’493 Patents and summary
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`judgment of no enhanced damages.
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`7 The Read factors are “(1) whether the infringer deliberately copied the ideas or design of
`another; (2) whether the infringer, when he knew of the other’s patent protection, investigated
`the scope of the patent and formed a good-faith belief that it was invalid or that it was not
`infringed; . . . (3) the infringer’s behavior as a party to the litigation[;] . . . (4) [d]efendant’s size
`and financial condition[;] . . . “(5) [c]loseness of the case[;] . . . (6) [d]uration of defendant’s
`misconduct[;] . . . (7) [r]emedial action by the defendant[;] . . . (8) [d]efendant’s motivation for
`harm[;] . . . (9) [w]hether defendant attempted to conceal its misconduct.” 970 F.2d at 826–28.
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 20 of 21 PageID #: 19071
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`June 30, 2020
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`
`/s/ Luann L. Simmons
`
`
`
`Luann L. Simmons (Pro Hac Vice)
`lsimmons@omm.com
`O’MELVENY & MYERS LLP
`Two Embarcadero Center
`28th Floor
`San Francisco, CA 94111
`Telephone: 415-984-8700
`Facsimile: 415-984-8701
`
`Xin-Yi Zhou (Pro Hac Vice)
`vzhou@omm.com
`O’MELVENY & MYERS LLP
`400 S. Hope Street
`Los Angeles, CA 90071
`Telephone: 213-430-6000
`Facsimile: 213-430-6407
`
`Marc J. Pensabene (Pro Hac Vice)
`mpensabene@omm.com
`Laura Bayne Gore (Pro Hac Vice)
`lbayne@omm.com
`O’MELVENY & MYERS LLP
`Times Square Tower, 7 Times Square
`New York, NY 10036
`Telephone: 212-326-2000
`Facsimile: 212-326-2061
`
`Melissa R. Smith (TX #24001351)
`melissa@gilliamsmithlaw.com
`GILLIAM & SMITH, LLP
`303 South Washington Avenue
`Marshall, Texas 75670
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
`
`Attorneys for Defendant Apple Inc.
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`16
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`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 21 of 21 PageID #: 19072
`Case 5:19-cv-00036-RWS Document 387 Filed 07/02/20 Page 21 of 21 PageID #: 19072
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`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that all counsel of record who are deemed to have
`consented to electronic service are being sewed with a copy of this document via the Comt's
`CM/ECF system per Local Rule CV—5(a)(3) on June 30, 2020.
`
`/s/ Melissa R. Smith
`
`Melissa R. Smith
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`l7
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