Virginia IP Law : Virginia Intellectual Property Lawyer & Attorney : Troutman Sanders Law Firm : Technology & Patent Litigation

The patent at issue in Fitness Gaming was “directed to the combination of an electronic game of chance device and a piece of exercise equipment.” The patentee asserted that the defendant’s exercise bikes infringed its patents because they included a game console that allowed a user to play games like “Blackjack” and “Texas Hold ‘Em” while exercising. 

Throughout the specification and prosecution history, however, the patentee had expressly equated an “electronic game of chance device” with a “legalized gambling device” that involved a wager. The inventor also distinguished video-type arcade games that did not involve gambling. 

The accused products, on the other hand, were played with “credits” which have no value, the accused product did not accept coins or tokens, and the products did not pay any money to the user. 

Combining claim construction and an infringement analysis, Judge Hilton held that the specification and prosecution history clearly limited an “electronic game of chance” to a “legal gambling device” that accepted a wager and permitted a payout in the form of money. Since the accused products did not either accept money or pay money, they could not infringe, and Judge Hilton granted summary judgment to the defendant.

Fitness Gaming breaks no new ground on either claim construction or infringement but is a helpful case for accused infringers where an inventor has limited her invention through statements in the specification and especially in the prosecution history. 

The case is Eastern District of Virginia case no. 3:09-CV-447 (although it may also be designated as the “full employment for lawyers” case, with, by my count, 59 lawyers listed on the docket on PACER).  We have previously blogged about the dismissal of a number of WiAV’s other claims and their subsequent certification for appeal.  (That appeal can be followed on PACER as Federal Circuit case no. 2010-1266, with oral argument set for September 10.)

The ruling on marking

On June 10, Defendants moved for summary judgment of no willful infringement and of no-pre-suit damages.  The Court’s August 10 memorandum opinion granted summary judgment as to no pre-suit damages and accordingly denied the willful infringement aspect of the motion as moot.

The patent marking statute, 35 U.S.C. 287(a), “encourages” patentees and those making, selling, offering to sell, or importing a patented article to give notice of the patent by putting the patent number on the patented article.  The encouragement comes in the provision that “In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice.”

As part of its claim of infringement of U.S. Patent No. 6,539,205 (“Traffic channel quality estimation from a digital control channel”), WiAV sought pre-suit damages from July 14, 2003, through December 31, 2007.  WiAV did not seek pre-suit damages from December 31, 2007, to July 14, 2009 (when the suit was filed, thereby giving actual notice of infringement) because it was undisputed that several major companies (LG, RIM, Apple, and HTC) acquired licenses and sold unmarked articles on various dates beginning on December 31, 2007.

WiAV argued that sales by two other companies (Mindspeed and Skyworks) prior to December 31, 2007, did not trigger the statutory requirement to mark and therefore that the failure to mark did not bar pre-suit damages for the 2003-07 period.

Defendants asserted that, under the plain language of the statute, no damages can be recovered until actual notice is given, even damages that accrue before a requirement to mark is triggered.  They argued that WiAV wanted to revise the statute through construction to read that “no damages shall be recovered by the patentee in any action for infringement during the period in which there is a failure to mark, except on proof...”

The Court held that Defendants "ignore[d] the statutory context in which the provision precluding damages appears" and that "the statute gives rise to some ambiguity" on the period for which damages are precluded.  (Mem. Op. at 11.)  The parties then disagreed as to how the ambiguity should be resolved in light of the purposes of the statute.

The Federal Circuit described three purposes of the statute in Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1443 (Fed. Cir. 1998): (1) helping to avoid innocent infringement, (2) encouraging patentees to give notice to the public that the article is patented, and (3) aiding the public to identify whether an article is patented. 

In 2003, the District of Delaware ruled favorable to WiAV’s argument, holding that a patentee can recover damages for infringement during a period of time when § 287 is not triggered, even if § 287 is later triggered and the patentee fails to comply.  The Court reached that result after concluding that “it is only when the patentee is himself contributing to the problem of innocent infringement by producing unmarked product that 287(a) punishes that patentee by precluding damage recovery.”  (Mem. Op. at 12.)

The defendants argued here, however, that allowing division of damages periods as WiAV sought would render the statute ineffective at achieving its "principal purpose" of providing notice. 

The Court concluded that Defendants' interpretation "penalizes the patentee for failing to comply with a statute that the patentee was not required to comply with in the first place.  And it is simply unreasonable to read the statute in this manner."  Therefore, the Court held "that a patentee is not precluded from collecting damages for a period in which marking was not required even if the requirements of the marking statute were later triggered and the patentee failed to comply."  (Mem. Op. at 13.)

Procedure dooms WiAV's pre-suit damages anyway

WiAV’s statutory interpretation victory was short-lived, however.  The Court rejected WiAV’s attempt to shift the burden to the defendants to prove that the marking statute was applicable.  Rather, citing an 1894 Supreme Court opinion, the Court held that it was "clear that the patentee bears the burden of showing compliance with the marking statute."  (Mem. Op. at 14.)  WiAV failed to survive summary judgment because it failed to offer evidence that could lead a jury to find in its favor on that point, on which it bore the burden of proof.

WiAV relied on 30(b)(6) testimony to show that one pre-Dec. 31, 2007 company (Mindspeed) was not practicing the patent (and thus that the marking statute was not triggered).  Unfortunately for WiAV, however, the deponent contradicted that statement twice later in the deposition. 

Expert testimony was needed, said the Court, to draw any conclusion about whether pre-Dec. 31, 2007 sales practiced the patent, and WiAV failed to offer such evidence.  WiAV did offer a declaration of its expert, but the Court held that, even if allowed, that declaration was “entirely speculative and conclusory” and thus wholly failed to explain the technical details necessary to accept WiAV’s arguments that pre-Dec. 31, 2007 sales did not practice the patent.

The Court also ruled against WiAV with respect to the other company (Skyworks) that was involved prior to Dec. 31, 2007, holding that offers to sale counted as practicing the patent and also that WiAV failed to offer evidence to prove that Skyworks made no sales or offers for sale in the United States.  Again, WiAV relied on a 30(b)(6) deponent who contradicted himself twice later, and again that was insufficient because WiAV bore the burden.

The summary judgment procedural lessons are clear:  A party must understand all of the issues on which it bears the burden of proof and support those issues with evidence.  A litigant cannot count on 30(b)(6) testimony if that testimony is not clear, and experts must go beyond mere conclusions to provide grounds for a fact finder to adopt their conclusions.  Furthermore, as my colleagues have recently emphasized and as this blog regularly observes, the Eastern District’s “Rocket Docket” places special constraints on presentation of evidence, including requiring litigants to be organized from the very beginning and often greatly constraining the time available to search for and prepare to present such evidence.

Defendants skillfully navigate the Local Rules

Eastern District practitioners may have wondered if there was a misprint in the first paragraph of this blog entry, which refers to defendants’ motions for summary judgment, plural. 

Local Civil Rule 56(C) prohibits separate motions for summary judgment on separate grounds without leave of court.  As I’ve noted in a past blog entry, in conjunction with the Local Rules’ page limits on briefs, that limits what can be raised at summary judgment and is a significant part of how the Eastern District’s “Rocket Docket” avoids flurries of motions and forces litigants to move things along toward trial.

In this case, however, defendants successfully moved the Court to allow them to file three motions for summary judgment, divided by issue.  They were, no doubt, aided in that effort by the ability to argue that doing so was actually more efficient than having multiple defendants raise several issues in overlapping presentations, such that they were not seeking an increase in the number of possible motions or the number of pages overall.

This example shows that Eastern District judges will listen to reason with respect to the Local Rules, but litigants need to conceptualize how their case should be presented and must ask the Court for appropriate procedural relief where necessary.