United States District Court, E.D. Texas, Marshall Division
MEMORANDUM OPINION AND ORDER
PAYNE UNITED STATES MAGISTRATE JUDGE
moves for leave to join Texas Instruments' motion for
summary judgment of no presuit damages, based on the alleged
failure of Semcon's predecessor and its licensees to mark
products covered by the patents-in-suit as required by 35
U.S.C. § 287(a). Dkt. No. 462. Huawei also moves to
supplement its damages report to account for the alleged
failure to mark. Dkt. No. 465. For the following reasons,
Huawei's motion for leave to join the motion for summary
judgment is denied, but the motion to supplement the damages
report is granted. Accordingly, because Huawei has met its
initial burden of production of notifying Semcon of products
covered by the '061 patent that Huawei believes were not
marked, Semcon must satisfy its burden of showing compliance
with the marking statute at trial.
§ 287(a) of the Patent Act, a patentee or other party
selling a patented product under the patent must mark that
product with the patent number to provide notice to the
public that the product it may be pursuing is patented.
Arctic Cat Inc. v. Bombardier Recreational Prod.
Inc., No. 2017-1475, 2017 WL 6044237, at *9 (Fed. Cir.
Dec. 7, 2017). A patentee's licensees must also comply
with § 287(a) because the statute extends to
“persons making or selling any patented article for or
under” the patent. Id. at *9 (citation
omitted) (quoting § 287(a)). Because it may be difficult
for a patentee to ensure that licensees are complying with
the statute, the Federal Circuit has held that “where
third parties are involved, courts may consider
‘whether the patentee made reasonable efforts to ensure
compliance with the marking requirements.'”
Id. (quoting Maxwell v. J. Baker, Inc., 86
F.3d 1098, 1111-12 (Fed. Cir. 1996)).
patentee has the burden of “pleading and proving”
compliance with the marking requirement. Id. An
accused infringer who challenges a patentee's compliance
with § 287(a) bears “an initial burden of
production to articulate the products it believes are
unmarked ‘patented articles' subject to §
287.” Id. at *10 (quoting § 287(a)).
“[T]his is a low bar.” Id. The accused
infringer must simply “put the patentee on notice that
he or his authorized licensees sold specific unmarked
products which the alleged infringer believes practice the
patent.” Id. The accused infringer must only
carry a burden of production, not a burden of persuasion or
proof. Id. The reason for requiring the accused
infringer to satisfy an initial burden of production is to
narrow the universe of products that the patentee may have to
prove complied with the marking statute. Id.
2006, Semcon's predecessor, Transmeta, filed a lawsuit
against Intel alleging that Intel processors equipped with
Enhanced SpeedStep Technology infringed eleven patents,
including U.S. Patent No. 7, 100, 061, one of the four
patents Semcon accuses Huawei of infringing. See
Dkt. No. 268 at 10 (quoting Complaint against Intel ¶
15). Intel and Transmeta resolved the infringement claims and
entered into a settlement and license agreement in December
2007. See Id. The parties agreed to a non-exclusive
license “under Transmeta's Patents” to make,
use, sell, offer for sale, or import “Intel Licensed
Products” that were alleged to infringe the asserted
patents. Id. at 11 (quoting License Agreement ¶
3.2). Semcon has admitted that the license agreement does not
require Intel to mark the products it sells with the asserted
patent number. See Dkt. No. 268 at 3 (citing
Semcon's response to request for admissions).
other three patents Semcon accuses Huawei of infringing, U.S.
Patent Nos. 7, 596, 708, 8, 566, 627, and 8, 806, 247, had
not issued at the time Intel and Transmeta resolved the
infringement claims. These three patents issued in 2009,
2013, and 2014, respectively. There is no evidence in the
record suggesting that the license agreement, when it
referred to “Transmeta Patents, ” was referring
to later-issued patents that may cover Intel licensed
products. In other words, there is nothing in the record
suggesting that Intel and Transmeta agreed that Intel would
have the right to practice any patent that might subsequently
issue to Transmeta, assuming such a patent covered the
licensed products. Accordingly, nothing suggests that Intel
had a duty to mark licensed products with later-issued
patents-because Intel presumably did not receive a license to
such patents. If this is an incorrect characterization of the
license agreement, it is because the Court lacks a clear
Instruments (“TI”), a defendant initially accused
of infringement in the consolidated Semcon cases, timely
moved for summary judgment that Semcon was not entitled to
presuit damages, on the basis that Semcon's predecessors
had not required licensees to mark products covered by the
asserted patents. See Dkt. No. 268. Part of TI's
motion was based on Semcon's failure to make reasonable
efforts to require Intel to mark products covered by the
'061 patent. See Id. at 10-11. Semcon and TI
have since settled. See Dkt. No. 476.
the deadline for filing motions for summary judgment lapsed,
Huawei moved to join TI's motion for summary judgment of
no presuit damages. Huawei requested leave to join TI's
motion with respect to “section IV.B (‘Semcon is
Not Entitled to Pre-Suit Damages Because it Failed to Comply
with the Marking Statute'), subsection 1, ” which
relates to Semcon's failure to make reasonable efforts to
require Intel to mark products covered by the '061
patent. See Dkt. No. 462 at 1. Huawei did not
present a clear basis that it was entitled to summary
judgment of no presuit damages with respect to the other
three patents-in-suit. The question is whether Huawei should
be allowed to pursue a late motion for summary judgment of no
presuit damages with respect to the '061 patent, the
patent subject to the Transmeta and Intel license agreement.
contends that the lateness is justified for two reasons.
First, because Semcon conceded in October 2017 that it would
no longer allege “Huawei had knowledge of the patents
prior to the filing of the instant lawsuit.”
See Dkt. No. 305 at 4. Second, because Mr. John
Horsley, Transmeta's former general counsel, testified
during a recent deposition that neither Transmeta nor its
licensees marked products with the patents-in-suit.
See Dkt. No. 462 at 1-2.
factors are relevant when determining whether to excuse a
party's failure to adhere to a scheduling order: (1) the
explanation for the untimeliness; (2) the importance of the
submission; (3) potential prejudice in allowing the
submission; and (4) the availability of a continuance to cure
such prejudice. See S&W Enters., L.L.C. v. Southtrust
Bank of Alabama, NA, 315 F.3d 533, 536 (5th Cir. 2004).
explanation for the untimely motion is largely
unsatisfactory. The agreement between Transmeta and Intel was
produced to Huawei well before the dispositive motions
deadline. See Dkt. No. 480 at 4-5. This agreement
alone could have formed the basis for a timely motion for
summary judgment. Like TI, who timely moved for summary
judgment, Huawei had every opportunity to pursue a motion of
no presuit damages on the basis of the Transmeta/Intel
license agreement. Semcon's recent concession that Huawei
did not have presuit knowledge of the patents-in-suit relates
to Semcon's former allegations of indirect infringement.
Semcon's change in course did not inform Huawei that
Semcon failed to provide Huawei with actual notice of
the'061 patent before filing suit. Even if Semcon's
change in course had alerted Huawei to the marking issue,
Huawei should have been aware of Semcon's presuit damages
contentions by virtue of Semcon's damages report, which
Semcon was required to provide Huawei no later than September
11, 2017. See Dkt. No. 235 at 4.
late motion is unquestionably important because the motion
relates to Huawei's exposure to presuit damages with
respect to infringement of the '061 patent. There is
prejudice in allowing the late motion, however. Semcon's
first notice that Huawei would seek to restrict damages,
through a late summary judgment motion, came on November 28,
2017, about a month before trial. See Dkt. No. 462.
Huawei's deadline for filing a summary judgment motion
lapsed on October 9, 2017. The motion was about seven weeks
too late-a significant delay given the Court's compressed
schedule leading up to trial.
prejudice is mitigated, however, because Semcon was provided
timely notice of the same issue by TI. By identifying a
complaint in which Semcon's predecessor accused Intel
products of infringing the '061 patent, which resulted in
the relevant license agreement between Transmeta and Intel,
TI met its initial burden of production. See Arctic
Cat, 2017 WL 6044237, at *10. Thus, ...