Free Motion for Judgment - District Court of Arizona - Arizona

1 2 3 4 5 6

Charles F. Hauff, Jr. (AZ Bar No. 014465) Douglas W. Seitz (AZ Bar No. 004258) Daniel R. Pote (AZ Bar No. 018570) SNELL & WILMER L.L.P. One Arizona Center 400 E. Van Buren Phoenix, AZ 85004-2202 Telephone: (602) 382-6000 Attorneys for Eberle Design, Inc. and Electronic Devices, Inc. UNITED STATES DISTRICT COURT

7

DISTRICT OF ARIZONA
8 9 10

Eberle Design, Inc., and Electronic Devices, Inc., Plaintiff/Counterdefendants,

11

CIV 02 2575 PHX DGC (Lead) CIV 03 883 PHX DGC (Consolidated) EBERLE'S MOTION FOR JUDGMENT AS A MATTER OF LAW PURSUANT TO RULE 50 WITH RESPECT TO ON-SALE BAR, INFRINGEMENT, AND CONTRIBUTORY INFRINGEMENT

v.
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

12

Snell & Wilmer L.L.P.

Reno A&E,
13

Defendant/Counterplaintiff.
14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Eberle Design, Inc. and Electronic Devices, Inc. (collectively, "Eberle") hereby file their motion seeking judgment as a matter of law pursuant to Rule 50(a) of the Federal Rules of Civil Procedure (the "JMOL") with respect to U.S. Patent No. 6,087,964 (the " '964 patent") as follows: (1) Judgment in favor of Eberle as to invalidity of the '964 patent due to the on-sale bar, or at least as to the commercial offer prong of the on-sale bar; (2) Judgment in favor of Eberle as to non-infringement of claim 34 of the '964 patent; and (3) Judgment in favor of Eberle as to a finding that Electronic Devices is not liable for infringement of the '964 patent either contributorily or under inducement. I. INTRODUCTION Judgment as a matter of law is appropriate where "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." Fed. R. Civ. Pro. 50(a); Acosta v. City and County of San Francisco, 83 F.3d 1143, 1145 (9th Cir. 1996). In the course of presenting its
Case 2:02-cv-02575-DGC Document 193 Filed 09/08/2005 Page 1 of 8

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

infringement and damages case, Reno has not introduced evidence that could support a jury verdict in favor of at least three aspects of their case. First, Reno has not put forth evidence that could support a jury finding that there was not an offer for sale of the patented invention prior to the critical date. At the very least, assuming arguendo that there is still a factual question as to whether Mr. Potter ultimately considered the sale to be commercial at the time he filed his patent, or whether the Model C was ready for patenting as of a certain date, no reasonable jury could find that the correspondence of February 21, 1996 was not a commercial offer of a LCD vehicle detector. Second, there is no evidence that could support a jury finding that any of the Oracle devices infringe claim 34 of the '964 patent. Claim 34 is directed to a vehicle detector with a bar graph display configured to display a "graph-like indication of sensitivity." The evidence clearly shows that none of the Oracle devices display sensitivity values (i.e., "1", "2", "3") via the bar graph. Third, no reasonable jury could find that Electronic Devices is liable for infringement of the '964 patent either contributorily or under an inducement theory, as Reno has not presented any evidence that Electronic Devices knowingly induced Eberle's alleged infringement or that they contributed to the infringement. II. A REASONABLE JURY COULD NOT FIND THAT THE '964 PATENT IS VALID IN LIGHT OF THE ON-SALE BAR The evidence clearly shows that the Model C was the subject of a definite offer for

12 13 14 15 16 17 18 19 20 21

Snell & Wilmer L.L.P.

sale prior to the critical date of April 24, 1996, and that the invention of the '964 patent
22

was ready for patenting. Reno has not presented evidence that could lead a reasonable jury
23

to conclude otherwise.
24

Eberle must show by clear and convincing evidence that, prior to the critical date,
25

the invention was the subject of a definite offer for sale, and that the invention was ready
26

for patenting. Pfaff v. Wells Elect. Inc., 525 U.S. 55, 67-68 (1998). Whether or not there
27

was a definite offer for sale is determined via traditional contract principles, Linear Tech.
28

Case 2:02-cv-02575-DGC

Document 193 2 - Filed 09/08/2005 -

Page 2 of 8

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Corp. v. Micrel, Inc., 275 F.3d 1040, 1046 (Fed. Cir. 2002), and turns on whether the offer was such that the other party could make it into a binding contract by simple acceptance. Group One, Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041, 1045 (Fed. Cir. 2001). Eberle has introduced a long series of faxes and letters between Mr. Lamoureux of Electromega and Mr. Potter of Reno A&E that clearly show, on their face, that Mr. Lamoureux made a serious offer to buy product from Mr. Potter prior to the critical date, and that Mr. Potter made a serious offer to sell his LCD detector in return. The language of Mr. Potter's February 21 correspondence, however, clearly and convincingly on its face indicates Mr. Potter's promise, and, indicates that Mr. Potter had an intent to be bound by his offer. Nothing in the record could support a conclusion that the February 21, 1996 letter was not an offer to sell. Reno argues that the February 20, 1996 purchase orders did not include a price term, and therefore cannot constitute a definite offer for sale. In this regard, the Federal Circuit looks to the Uniform Commercial Code ("UCC") for guidance as to whether a particular communication rises to the level of a commercial offer for sale, Lacks Indus. v. McKechnie Vehicle Components USA, Inc., 322 F.3d 1335 (Fed. Cir. 2003) (citations omitted). The UCC states that, in some instances, parties can conclude a contract for sale even though the price is not settled. UCC § 2-305. Furthermore, the early purchase orders included a "TBA" in the price column, and Mr. Potter testified that he had a course of conduct where he shipped against to-beannounced ("TBA") prices. The purchase orders specified a quantity of 200 detectors, and the February 21, 1996 letter promises a delivery of "production quantities" in the mid-July timeframe. Thus, the price, delivery, and quantity terms were consistent with a definite commercial offer to sell. An offer for sale does not have to be accepted to implicate the on sale bar. Scaltech, Inc. v. Retec/Tetra, L.L.C., 269 F.3d 1321, 1328 (Fed. Cir. 2001). Nevertheless, Eberle has shown that Model C detectors were indeed ultimately shipped in response to the original purchase orders received from Electromega.
Case 2:02-cv-02575-DGC Document 193 3 - Filed 09/08/2005 Page 3 of 8

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Reno argues that it did not have a product, and that the device was not ready for patenting, but the correspondence shows that Potter intended to sell an LCD detector for which drawings had been released and for which detailed specifications had been written. The testimony of co-inventors Mr. Seabury and Mr. Allen further supports Eberle's contention that the Model C was ready for patenting. Accordingly, based on the evidence presented with respect to the on-sale bar, no reasonable jury could find the '964 patent valid. At a minimum, a judgment as a matter of law should be entered that no reasonable jury could find that there was not a commercial offer for sale prior to the critical date.

III.

12 13

A REASONABLE JURY COULD NOT FIND THAT CLAIM 34 OF THE '964 PATENT IS INFRINGED BY THE ORACLE DEVICES The evidence shows that claim 34 is not infringed by the Oracle devices, as it does

Snell & Wilmer L.L.P.

not include a bar graph which shows "a graph-like indication of sensitivity" as required by
14

the claim.
15

Claim 34 depends from claim 33, which itself depends from claim 31. For
16

convenience, the entire chain of relevant claims -- claims 31, 33, and 34 -- are presented
17

below.
18 19 20 21 22 23 24 25 26 27 28

31. A vehicle detector comprising: Means for detecting the occupancy state of a loop detection zone; At least two manually actuatable function switches coupled to said detecting means for enabling operator control of function state selection, selection of any one of a plurality of vehicle detector parameters, and vehicle detector parameter value selection; and A variable display device coupled to said detecting means for indicating a selected parameter and the actual value of a parameter selected by at least one of said function switches. ... 33. The vehicle detector of claim 31 wherein said selected parameter is relative sensitivity of said loop detection zone; and wherein said display device includes means for displaying the

Case 2:02-cv-02575-DGC

Document 193 4 - Filed 09/08/2005 -

Page 4 of 8

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

sensitivity value. ... 34. The vehicle detector of claim 33 wherein said means for displaying the sensitivity value comprises a display region having selectively activatable indicators for providing a graph-like indication of sensitivity.

'964 Patent, Ex. 1, Column 18, lines 7-32 (emphasis added). The evidence unequivocally shows that none of the accused Oracle products display a "graph-like indication of sensitivity." The Oracle operation manuals in evidence (Ex. 10, 11, 14, and 15) make it clear that that the Oracle bar graph is an "inductance meter" which shows "the inductance deflection as vehicles pass over the loop." Oracle /2 Operation Manual, Ex. 010-008. The Oracle does not include a graphical indication of the sensitivity value. In this regard, claim 34 is conspicuously absent from Mr. Ferraro's rather lengthy set of demonstratives dealing with infringement (Ex. 300 and 301). In fact, Mr. Ferraro's testimony supports the interpretation of claim 34 that Eberle is advancing. Accordingly, Eberle respectfully submits that, even when the evidence is viewed in the light most favorable to Reno, no reasonable jury could find that any of the Oracle devices infringe claim 34 of the '964 patent.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

IV.

A REASONABLE JURY COULD NOT FIND THAT ELECTRONIC DEVICES IS LIABLE UNDER CONTRIBUTORY INFRINGEMENT OR INDUCEMENT In order to succeed on a claim of inducement, Reno must show (1) that there has

been direct infringement, and (2) that Electronic Devices knowingly induced infringement and possessed specific intent to encourage another's infringement. Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1304 (Fed. Cir. 2002). Reno has not presented evidence that could lead a reasonable jury to conclude that Electronic Devices is liable for patent infringement under an inducement theory. Specifically, no evidence has been presented that would suggest that Electronic Devices had the requisite knowledge and specific intent to encourage the alleged infringement by
Case 2:02-cv-02575-DGC Document 193 5 - Filed 09/08/2005 Page 5 of 8

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Eberle. The only evidence Reno has presented with respect to Electronic Devices' activities is the testimony of Simon Lee. However, Mr. Lee merely testified that Electronic Devices made and sold to Eberle a subassembly that included certain components, such as microprocessors (in some instances), the oscillator circuit, and output circuitry. While circumstantial evidence may suffice to show intent in the context of an inducement analysis, Water Techs. Corp v. Calco, Ltd., 850 F.2d 660, 668 (Fed. Cir. 1988), there are no facts in the record from which a jury could even infer the requisite intent. Furthermore, Reno did not introduce evidence on contributory infringement. Contributory infringement liability arises when one "sells within the United States . . . a component of a patent machine . . . knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial non-infringing use." 35 U.S.C. § 271(c)(2000). Reno has not presented evidence that the boards that it manufactured were not a staple article or commodity of commerce suitable for substantial non-infringing use. Reno must show that Eberle "knew that the combination for which its components were especially made was both patented and infringing." Preemption Devices, Inc. v. Minn Mining & Mfg, Co., 803 F.2d 1170, 1174 (Fed. Cir. 1986). Reno must also show that Electronic Devices components have no substantial non-infringing uses. Alloc, Inc. v. ITC, 342 F.2d 1361, 1374 (Fed. Cir. 2003). Accordingly, judgment as a matter of law should be granted as to the indirect infringement claim against Electronic Devices.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

V.

CONCLUSION For any and all of the foregoing reasons, Eberle respectfully requests that the Court

grant its JMOL as follows: (1) Judgment in favor of Eberle as to invalidity of the '964 patent due to the on-sale bar, or at least as to the "commercial offer" prong of the on-sale bar; (2) Judgment in favor of Eberle as to non-infringement of claim 34 of the '964 patent;
Case 2:02-cv-02575-DGC Document 193 6 - Filed 09/08/2005 Page 6 of 8

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

and (3) Judgment in favor of Eberle as to a finding that Electronic Devices is not liable for infringement of the '964 patent either contributorily or under an inducement theory. RESPECTFULLY SUBMITTED this 8th day of September, 2005. SNELL & WILMER L.L.P.

By

s/Daniel R. Pote. Charles F. Hauff, Jr. Douglas W. Seitz Daniel R. Pote Attorneys for Plaintiff, Eberle Design, Inc.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

Case 2:02-cv-02575-DGC

Document 193 7 - Filed 09/08/2005 -

Page 7 of 8

1 2 3 4 5 6 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

CERTIFICATE OF SERVICE Pursuant to Fed. R. Civ. P. 5(b), I certify that I am an employee of the law offices of Snell & Wilmer, and that on this date I deposited for mailing and/or hand delivery, with first-class postage thereupon prepaid, a true and correct copy of the foregoing Opposition, addressed as follows: The Honorable David G. Campbell (Hand-Delivered) United States District Judge District of Arizona Sandra Day O'Connor U.S. Courthouse, Suite 623 401 W. Washington Street SPC 58 Phoenix, Arizona 85003-2156 Michael D. Rounds, Esq. WATSON & ROUNDS 5371 Kietzke Lane Reno, Nevada 89511 Henry C. Bunsow HOWREY, SIMON, ARNOLD & WHITE 525 Market Street Suite 3600 San Francisco, CA 94105 George C. Chen (Hand-Delivered) BRYAN CAVE Two North Central Avenue, Suite 2200 Phoenix, AZ 85004-4406

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Snell & Wilmer L.L.P.

Dated: September 2, 2005 s/Deborah Giancaterin An Employee of Snell & Wilmer L.L.P.

1723412.1

Case 2:02-cv-02575-DGC

Document 193 8 - Filed 09/08/2005 -

Page 8 of 8