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Grant Street Group, Inc. v. Realauction. Com, LLC

United States District Court, Third Circuit

May 31, 2013

GRANT STREET GROUP, INC., Plaintiff,
v.
REALAUCTION.COM, LLC, Defendant.

MEMORANDUM OPINION

MARK R. HORNAK, District Judge.

Pending before the Court is Defendant's Motion for Summary Judgment on the issue of willful patent infringement. This case has been ongoing for three and a half years, with a docket quickly approaching 630 entries. Moreover, this Motion is not the first rendezvous between these two parties. Because the parties are well acquainted with the facts, this Court need not go into the specifics regarding the background of the case.

Grant Street Group, Inc. ("Grant Street") brought this suit arguing that Realauction.com, LLC ("Realauction") infringed one of its patents, [1] and did so willfully. Realauction denies any patent infringement and further argues that Grant Street's '063 patent is invalid. The issue presently before the Court is whether Realauction's Motion for Summary Judgment as to willful infringement should be granted. The Court has carefully considered all of the parties' briefs[2] and the issue is ripe for disposition. For the reasons that follow, the Motion for Summary Judgment is denied without prejudice, the Court reserving its ruling on the issue of willfulness until the Court has had the benefit of the evidence presented at trial.

I. Standard

Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The parties must support their position by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed.R.Civ.P. 56(c)(I)(A). In other words, summary judgment may be granted only if there exists no genuine issue of material fact that would permit a reasonable jury to find for the nonmoving party measured against the standard fixed by the applicable substantive law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).

In reviewing the evidence, the court is to draw all reasonable inferences in favor of the non-moving party. See Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986); Huston v. Procter Gamble Paper Prod. Corp., 568 F.3d 100, 104 (3d Cir. 2009) (citations omitted). It is not the court's role to weigh the disputed evidence and decide which is more probative, or to make credibility determinations. See Anderson, 477 U.S. at 255; Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004); Boyle v. Cnty. of Allegheny, 139 F.3d 386, 393 (3d Cir. 1998). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 247-48 (1986). An issue is "genuine" if a reasonable jury could possibly hold in the non-movant's favor with regard to that issue. See id. "Where the record taken as a whole could not lead a reasonable trier of fact to find for the nonmoving party, there is no genuine issue for trial.'" Matsushita, 475 U.S. at 587; Huston, 568 F.3d at 104.

II. Discussion

Pursuant to 35 U.S.C. § 284, a finding of willful infringement allows an award of enhanced damages "up to three times the award found or assessed." 35 U.S.C. § 284. In In re Seagate Tech., LLC, 497 F.3d 1360, the United States Court of Appeals for the Federal Circuit announced, in an en banc opinion, a two-part test for willful infringement:

[T]o establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.... The state of mind of the accused infringer is not relevant to this objective inquiry. If this threshold objective standard is satisfied, the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.

In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007). The objective prong is "a separate legal test from Seagate's subjective component" and the "subjective requirement... must be addressed only after the objective requirement is satisfied." Bard Peripheral Vascular, Inc. v. W.L. Gore Assocs., Inc., 682 F.3d 1003, 1005, 1007 (Fed. Cir. 2012). "Should the court determine that the infringer's reliance on a defense was not objectively reckless, it cannot send the question of willfulness to the jury, since proving the objective prong is a predicate to consideration of the subjective prong." Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 1236 (Fed. Cir. 2011).

This means that this Court may grant Realauction's Motion for Summary Judgment only if it concludes that as a matter of law, Grant Street will not be able to prove by clear and convincing evidence that any infringement by Realauction was done with an objectively high likelihood that its conduct was infringing.

The "objective' prong of Seagate tends not to be met where an accused infringer relies on a reasonable defense to a charge of infringement." Bard, 682 F.3d at 1005-06 (quoting Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305, 1319 (Fed. Cir. 2010)); Black Decker, Inc. v. Robert Bosch Tool Corp., 260 F.Appx. 280, 291 (Fed. Cir. 2008) ("both legitimate defenses to infringement claims and credible invalidity arguments demonstrate the lack of an objectively high likelihood that a party took actions constituting infringement of a valid patent."). "This holds true even if defenses to infringement, including claim constructions, are unsuccessful, so long as they are legitimate or reasonable." CSB-Sys. Int'L Inc. v. SAP Am., Inc., No. 10-2156, 2012 WL 1439059, at *3 (E.D. Pa. Apr. 25, 2012).

Under Seagate's objective prong, "the court is in the best position for making the determination of reasonableness... (and therefore] the objective determination of recklessness, even though predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review." Bard, 682 F.3d at 1006-07. According to Bard,

"the answer to whether an accused infringer's reliance on a particular issue or defense is reasonable is a question for the court when the resolution of that particular issue or defense is a matter of law" but it "is properly considered by the jury" "[w]hen the ...

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