Case 5:19-cv-00036-RWS Document 697 Filed 04/06/21 Page 1 of 10 PageID #: 33840
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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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`Plaintiff,
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`v.
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`APPLE INC.,
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`Defendant.
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`CIVIL ACTION NO. 5:19-CV-00036-RWS
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`ORDER
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`Before the Court is Defendant Apple’s Sealed Motion to Strike and Renewed Motion for
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`Partial Summary Judgment (Docket No. 664) and Plaintiff Maxell’s Sealed Response (Docket No.
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`667). The Court heard argument on the motion on Friday, March 19, 2021. Docket No. 677. For
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`the reasons set forth below, Apple’s motion is GRANTED.
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`I.
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`Background
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`On May 7, 2020, Maxell served the initial report of its damages expert, Carla Mulhern, that
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`used the “start dates” for damages-related sales as follows: July 1, 2013, for the ’317, ’999, ’498
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`and ’493 patents and May 17, 2018, for the ’438 and ’794 patents. Docket No. 667 at 1. Later, on
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`June 23, 2020, Maxell served Ms. Mulhern’s supplemental disclosures, which contemplated notice
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`dates of December 3, 2013, for the ’317 patent and May 17, 2018, for the other five patents. Id. at
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`2. The dates in Ms. Mulhern’s supplemental disclosures were based on Apple’s position regarding
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`notice dates and mirrored the dates used by Apple’s damages expert Lance Gunderson. Id.
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`In June 2020, Apple moved for partial summary judgment limiting Maxell’s claim for
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`damages for the ’317, ’999, ’498 and ’493 patents for lack of notice under 35 U.S.C. § 287(a).
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`Docket No. 368. In that motion, Apple argued that Maxell’s (and thus Ms. Mulhern’s) July 1,
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`2013 start date for damages was based on a June 25, 2013 letter (“the June 2013 letter”) from
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`Hitachi to Apple that could not, as a matter of law, provide actual notice of infringement. Id. at
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`8–10. Apple’s motion also stipulated that actual notice of infringement of the ’317 patent occurred
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`on December 3, 2013, and for the other five patents-in-suit on May 17, 2018. Id. at 10. In its
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`response, Maxell disputed Apple’s stipulated notice dates, arguing that “Apple and Maxell held
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`several meetings and exchanged several rounds of correspondence between June 2013 and May
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`2018” that Apple’s motion did not address; therefore, fact issues regarding the date of actual notice
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`remained for the jury. Docket No. 420 at 10.
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`On November 17, 2020, the Court granted-in-part Apple’s motion, finding that the June
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`letter did not constitute notice under § 287(a) as a matter of law. Docket No. 586 at 26. But the
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`Court could not determine that Apple’s stipulated dates could constitute actual notice of
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`infringement as a matter of law. Docket No. 586 at 26. Accordingly, Maxell would be permitted
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`to introduce evidence that actual notice occurred after June 25, 2013, but before December 3, 2013,
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`and May 17, 2018. Id.
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`After the Court’s ruling, Maxell did not provide Apple with an updated damages figure or
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`any supplemental disclosures from Ms. Mulhern until February 27, 2021, when the parties
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`exchanged drafts of the joint pretrial order. Docket No. 667 at 4. A footnote in Maxell’s statement
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`of contentions described its basis for its revised $435 million damages figure: “Under Maxell’s
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`notice scenario (as adjusted by the Court’s order on summary judgment (D.I. 586)), Apple had
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`notice of its infringement of the ’317, ’999, ’498, and ’493 patents by at least December 2013, and
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`of the remaining patents by no later than May 2018.” Docket No. 637 at 10 n.2. Maxell noted that
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`this figure was revised “in light of (1) amended notice dates due to the Court’s order on summary
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`judgment, (2) the narrowed claims as a result of the Court’s order to narrow the case for trial, and
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`(3) updated sales information produced by Apple.” Id. at 35–36.
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`At the pretrial conference, Apple objected to Maxell’s December 3, 2013 basis for its
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`updated damages figure, arguing that the $435 million demand was never disclosed before
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`February 27, 2021, and reflected undisclosed opinions of Ms. Mulhern. Docket No. 664 at 2. In
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`light of Apple’s objection, the Court ordered Maxell to present Ms. Mulhern for a limited
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`deposition regarding her revised damages calculations, which took place on March 15, 2021.
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`Docket No. 664 at 2. Maxell also provided Apple with supplemental disclosures from Ms.
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`Mulhern supporting her revised damages figure on March 10, 2021, following the pretrial
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`conference. Id.; Docket No. 664-1, Ex. A (“Updated Mulhern Exhibits”).
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`II.
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`Apple’s Motion and Maxell’s Response
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`On March 16, 2021, Apple filed the instant motion. Docket No. 664. In its motion, Apple
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`does not dispute the revision of Ms. Mulhern’s damages calculations based on the narrowing of
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`the case or Apple’s additional sales data. Id. at 3. But Apple argues that any revision of Ms.
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`Mulhern’s damages figure based on the December 3, 2013 date for the ’999, ’498 and ’493 patents
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`should be prohibited as untimely and prejudicial under Federal Rules of Civil Procedure 26(e) and
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`37(c)(1). Id. at 4–5. Apple further argues that Maxell’s proffered evidence—an email from
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`Hitachi to Apple dated December 3, 2013 (“the December 2013 email”)—cannot constitute actual
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`notice for the ’999, ’498 and ’493 patents as a matter of law. Id. at 7. Thus, Apple renews its
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`summary judgment motion to limit Maxell’s damages based on lack of notice under 35 U.S.C.
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`§ 287(a). Id.
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`Maxell responds that it did not immediately revise Ms. Mulhern’s damages calculations
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`based on the Court’s order because the trial had been reset to March 2021 and“[s]ome narrowing
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`of the case was expected.” Docket No. 667 at 3. Maxell argues that it was therefore more efficient
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`to postpone updating the damages total based on the Court’s exclusion of the June 2013 letter until
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`all issues impacting the damages total were resolved (i.e., dropping asserted claims and receiving
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`updated sales information). Id. at 4. Those issues, Maxell contends, were resolved by February
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`9, 2021, and so Maxell provided its updated damages total to Apple a few weeks later on February
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`27, 2021. Id. Maxell argues that Apple’s motion mischaracterizes the updates made to the
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`damages figure, as there was “no change to the damages theory, the royalty rates, the damages
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`methodology, or Mr. Mulhern’s opinions on those matters.” Id.
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`Maxell also contends that Apple has known of its reliance on the December email for notice
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`for almost two years, as Maxell produced it in 2019 and identified it in several interrogatory
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`responses that year. Id. At the hearing on Apple’s motion, Maxell confirmed that it had no
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`evidence other than the December 2013 email to support a December 3, 2013 notice date for the
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`’999, ’498 and ’493 patents. But Maxell argued that the December 2013 email is sufficient to
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`convey actual notice for the ’999, ’498 and ’493 patents under the Federal Circuit’s guidance in
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`Gart v. Logitech, Inc., 254 F.3d 1334 (Fed. Cir. 2001). The parties do not dispute that the
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`December 2013 email provided notice for the ’317 patent. The dispute thus centers around whether
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`the December 2013 email and surrounding circumstances provide notice as to the other three
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`patents (the ’999, ’498 and ’493 patents).
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`III.
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`The December 2013 Email
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`The relevant portions of the December 2013 email read as follows:
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`As we discussed at the meeting on October 18, our [people] have prepared the
`documents which show the relationship between our smartphone patents and
`Apple’s smartphones/tablets. Attached patent list is also updated one as some
`patents were newly issued.
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`Hitachi Maxell and our patent engineers would be pleased to visit you to introduce
`and explain our understanding on these patents and the relationship, and answer to
`your questions, if any. . . In the meantime, did you receive any feedback from your
`engineers about . . . our patents available for sales?
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`Docket No. 664-3, Ex. C at 2. Attached to the email are claims charts for five Hitachi Maxell
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`patents, including the ’317 patent, but not for any other patents-in-suit. Id. at 3–30. Also attached
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`is a “List of Hitachi Maxell Patents” that includes the ’999, ’498 and ’493 patents. Id. at 31–33.
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`This patent list is identical to the patent list attached to the June letter except for the addition of
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`several patents not asserted here. See Docket No. 664-2, Ex. B at 9–12.
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`IV.
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`Analysis
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`Under Federal Rule of Civil Procedure 54(b), a court that enters any order or decision
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`adjudicating “fewer than all of the claims or the rights and liabilities of fewer than all the parties.
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`. . may be revised at any time before the entry of a judgment adjudicating all the claims and all the
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`parties’ rights and liabilities.” FED. R. CIV. P. 54(b). Accordingly, interlocutory orders, such as
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`grants of partial summary judgment, are “left within the plenary power of the court that rendered
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`them to afford such relief from them as justice requires.” McKay v. Novartis Pharm. Corp., 751
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`F.3d 694, 701 (5th Cir. 2014). “[T]he trial court is free to reconsider and reverse its decision for
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`any reason it deems sufficient, even in the absence of new evidence or an intervening change in or
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`clarification of the substantive law.” Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d
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`167, 185 (5th Cir. 1990), abrogated on other grounds, Little v. Liquid Air Corp., 37 F.3d 1069,
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`1075 n.14 (5th Cir. 1994).
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`In light of Federal Rule of Civil Procedure 54(b) and the prevailing law, the Court considers
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`Apple’s renewed motion for summary judgment as a motion for reconsideration. The Court
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`previously declined to find Apple’s stipulated notice dates were correct as a matter of law because
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`Apple had not carried its burden of demonstrating that no genuine issues of material fact remained
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`regarding those dates. Docket No. 586 at 26. Indeed, the Court held that Maxell would be
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`permitted to introduce evidence that actual notice occurred at a date after June 25, 2013, but before
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`December 3, 2013, and May 17, 2018. Id. In its initial summary judgment response, Maxell
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`contended that multiple pieces of evidence supported notice dates other than Apple’s stipulated
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`dates, such as “a documented meeting between the parties on October 18, 2013,” and an October
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`13, 2013 email regarding a potential licensing opportunity. Docket No. 420 at 10. But Maxell’s
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`decision less than a month before trial to, for the first time, put forward a December 3, 2013 “start
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`date” for damages for the ’9991, ’498 and ’493 patents has now placed a spotlight on its evidentiary
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`basis for proving notice as of that date. Having reviewed the December 2013 email, Maxell’s sole
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`basis for actual notice on December 3, 2013, the Court must reconsider its previous ruling: the
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`December email cannot constitute actual notice under § 287 of Apple’s alleged infringement of
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`the ’999, ’498 and ’493 patents as a matter of law. Accordingly, no genuine issue of material fact
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`remains for the jury.
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`“Actual notice requires the affirmative communication of a specific charge of infringement
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`by a specific accused product or device.” Amsted Indus. Inc. v. Buckeye Steel Casting Co., 24 F.3d
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`178, 187 (Fed. Cir. 1994). A letter that merely communicates “notice of the patent’s existence”
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`will not satisfy this requirement. Id. “The purpose of the actual notice requirement is met when
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`the recipient is notified, with sufficient specificity, that the patent holder believes that the recipient
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`of the notice may be an infringer.” SRI Int’l., Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462,
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`1469–70 (Fed. Cir. 1997).
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`1 The first infringing sale date for the ’999 patent is September 2015; however, Maxell contends that Apple had notice
`of its infringement of the ’999 patent on December 3, 2013. See Docket No. 664-1, Ex. A at 6 (Updated Mulhern Ex.
`10).
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`The Court must grant summary judgment as to the December 2013 email for the same
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`reasons it previously did for the June 2013 letter—the December 2013 email cannot reasonably be
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`construed as “communicat[ing] a charge of infringement” as to the ’999, ’498 and ’493 patents.
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`Id. (citing Amsted, 24 F.3d at 187); Mass. Inst. of Tech. v. Abacus Software, Inc., Civil Action No.
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`5:01-CV-344, 2004 WL 5268125, at *5 (E.D. Tex. Sept. 29, 2004). Apple does not dispute that
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`the claim chart referenced in and attached to the December 2013 email for the ’317 patent provided
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`actual notice of Maxell’s belief that Apple was infringing the ’317 patent. Docket No. 664 at 8.
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`That claim list directly compared claims 1, 15 and 17 of the ’317 patent to the iPhone 4/5 series
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`and iPad/iPad 2/iPad mini/iPad Air series. Docket No. 664-3, Ex. C at 8. But no such claim lists
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`appear for the ’999, ’498 or ’493 patents. And the content of the email itself is even more scant
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`than that of the June 2013 letter, which the Court previously found fell within the realm of
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`“informational” letters that are insufficient to provide notice. Docket No. 586 at 26 (citing Amsted,
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`24 F.3d at 187).
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`Maxell’s only support for a finding that the December 2013 email constitutes actual notice
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`for the ’999, ’498 or ’493 patents is a list of patents attached to the email. Docket No. 664–3, Ex.
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`C at 31. But this list of patents is identical to that attached to the June 2013 letter that the Court
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`previously found inadequate. Docket No. 586 at 26; see Docket No. 664-2, Ex. B at 9–12. Mere
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`communication of a patent’s existence cannot constitute actual notice. Amsted, 24 F.3d at 187.
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`Accordingly, the December 2013 email cannot reasonably be found to communicate actual notice
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`of infringement as to the ’999, ’498 and ’493 patents.
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`Maxell’s reliance on Gart is unavailing. 254 F.3d 1334. There, the Federal Circuit
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`examined two letters that the plaintiff, Gart, contended supported actual notice of defendant
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`Logitech’s infringement. Id. at 1346–47. The first letter “included a specific reference to claims
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`7 and 8 of the ’165 patent, specific reference to Logitech’s selling of the TRACKMAN VISTA,
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`and noted that Logitech ‘may wish to have [its] patent counsel examine the . . . patent . . . to
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`determine whether a non-exclusive license under the patent is needed.’ ” Id. at 1346. The court
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`found that this letter constituted actual notice that Logitech’s TRACKMAN VISTA product was
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`infringing claims 7 and 8 of the ’165 patent. Id. The second letter at issue was more cursory; it
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`again identified ’165 patent, but merely indicated that “Logitech might find that patent
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`‘particularly interesting’ relative to [its] TRACKMAN VISTA and TRACKMAN MARBLE
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`products.” Id. The court held that “[s]tanding alone, this letter would not constitute effective
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`actual notice.” Id. But because the previous letter had constituted actual notice as to claims 7 and
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`8 of the ’165 patent, the second letter viewed “in conjunction with” the first letter could constitute
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`actual notice under § 287. Id. at 1347.
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`The factual situation here is significantly different than in Gart. First—and most
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`critically—the Federal Circuit held in that case that the first letter sufficiently provided actual
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`notice of infringement of the patent at issue. Id. at 1346. The opposite is true here. The Court
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`previously found that the June 2013 letter could not constitute actual notice of any of the patents-
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`in-suit as a matter of law. Docket No. 586 at 26. Thus, reliance on the June 2013 letter “in
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`conjunction with” the December 2013 email, as Gart would allow, does not aid Maxell. Gart, 254
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`F.3d at 1347. Because the June 2013 letter does not constitute actual notice of Apple’s
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`infringement of any of the patents-in-suit, it cannot bolster the inadequate December 2013 email.
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`Second, Gart does not support extending proper notice as to one patent to any patents
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`mentioned in the same communication. The court’s opinion concerned notice as to additional
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`accused products where a specific claim of infringement of the same patent had previously been
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`established for other products. Id. at 1347. Because the prior letter had reasonably apprised
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`Logitech that Gart believed the TRACKMAN VISTA products infringed claims 7 and 8 of the
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`’165 patent, the second letter, which added mention of the TRACKMAN MARBLE products,
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`reasonably apprised Logitech that Gart believed those products, too, were infringing. Id. The list
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`of patents attached to the December 2013 email did not attempt to tie those patents to specific
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`claims or specific products beyond those patents that were charted in the preceding pages. See
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`Docket No. 664-3, Ex. C. at 31–33. Maxell’s interpretation would stretch the Federal Circuit’s
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`analysis to cover any patents that may have been merely mentioned alongside a more specific
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`communication of infringement. Under Maxell’s argument, because the December 2013 email
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`and associated claim charts gave Apple notice of its infringement of the ’317 patent, it also
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`provided notice as to the nearly three dozen other patents listed, the ’999, ’498 and ’493 patents
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`among them. Because the question of notice “must focus on the action of the patentee,” this
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`application would find that a patent holder who sends a specific communication of infringement
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`as to one patent and also attaches a list of patents would have provided notice under § 287 as to
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`every patent listed—whether it was two or 200. Gart, 254 F.3d at 1346 (citing Amsted, 24 F.3d
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`at 187). The court’s analysis in Gart does not extend that far and thus cannot cure the deficiencies
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`of Maxell’s December 2013 email.
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`Accordingly, Apple’s motion, reviewed as a motion for reconsideration, is GRANTED.
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`The December 2013 email may not be used as evidence that Apple had actual notice of
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`infringement on December 3, 2013, for any patent-at-issue other than the ’317 patent. Ms.
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`Mulhern may not rely on a “start date” of December 3, 2013, for calculating damages for the ’999,
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`’498 and ’493 patents.
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`It is further ORDERED that within 14 days of the issuance of this order, the parties shall
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`jointly submit a proposed redacted version so that a public version can be made available.
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`.
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`____________________________________
`ROBERT W. SCHROEDER III
`UNITED STATES DISTRICT JUDGE
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`SIGNED this 20th day of March, 2021.
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