Asia Vital Components Co., Ltd. v. Asetek Danmark A/S
377 F. Supp. 3d 990
N.D. Cal.2019Background
- Asetek owns U.S. Patents No. 8,240,362 and 8,245,764, directed to liquid CPU-cooling systems; AVC (Asia Vital Components) manufactures accused products (K7/K9 series, 1.5, 2.0, K7127N).
- AVC sued for declaratory judgment of noninfringement and invalidity; Asetek counterclaimed for direct, induced, contributory, and willful infringement.
- The parties cross‑moved for partial summary judgment; Asetek moved to strike portions of AVC experts’ opinions and filed the invalidity/equitable‑defenses motion; AVC moved on induced/contributory/willfulness, extraterritorial sales, and marking.
- Court struck (in part) a late non‑infringement theory from AVC’s rebuttal expert and struck most of an expert declaration for presenting new invalidity theories beyond the expert report.
- On summary judgment, the Court held both patents are not invalid as a matter of law (granted Asetek SJ on invalidity) and rejected AVC’s equitable defenses (including laches).
- The Court denied AVC summary judgment on induced infringement, contributory infringement, willful infringement (enhanced damages), extraterritorial sales issues, and marking compliance; those issues remain for trial.
Issues
| Issue | Plaintiff's Argument (AVC) | Defendant's Argument (Asetek) | Held |
|---|---|---|---|
| Motion to strike late expert theories | AVC: rebuttal report timing acceptable; no duty to disclose fully crystallized non‑infringement theory earlier | Asetek: theory (stator isolated from cooling liquid) was not disclosed in contention interrogatory; prejudiced discovery | Court: granted in part; struck the late theory from rebuttal report (AVC violated Rule 26(e)) |
| Invalidity of patents (obviousness/anticipation) | AVC: prior art (Schmidt, Yu, Atsuo, others) and industry trend (miniaturization) render patents obvious | Asetek: AVC failed to show motivation to combine references or disclose necessary claim elements | Court: granted Asetek SJ — AVC failed to present admissible, specific evidence of motivation to combine and reasonable expectation of success; patents not invalid |
| Equitable defenses (laches, waiver, estoppel, unclean hands) | AVC: asserted multiple equitable bar defenses | Asetek: infringement claims filed within §286 six‑year window; laches unavailable | Court: Asetek SJ granted; other equitable defenses deemed abandoned; laches denied because damages period within six years |
| Induced and contributory infringement | AVC: had reasonable non‑infringement/invalidity defenses; argued lack of requisite knowledge and substantial non‑infringing uses | Asetek: AVC sold/shipped accused products to U.S., knew of patents and allegations, manuals and design encourage infringing use; products have no substantial non‑infringing use | Court: AVC SJ denied; triable issues exist on inducement, contributory infringement, and knowledge; jury can find affirmative acts and knowledge |
| Willful infringement / enhanced damages | AVC: defenses show lack of willfulness; no basis for enhanced damages as a matter of law | Asetek: evidence that AVC knew of patents, attempted (unsuccessfully) to license, followed related litigation — supports willfulness at trial | Court: AVC SJ denied; willfulness is factual for jury under Halo and discretion for court on enhancement remains for post‑verdict determination |
| Marking & extraterritorial sales | AVC: Asetek failed to virtually/physically mark substantially all products and thus cannot recover pre‑notice damages; some sales allegedly occurred outside U.S. | Asetek: used virtual marking (pat. www.ip‑mark.com); produced evidence of U.S. sales to specific customers; CNTS/licensing explained earlier periods | Court: AVC SJ denied; genuine fact disputes exist about marking coverage and location of particular sales; licenses/CNTS did not defeat marking showing |
Key Cases Cited
- Microsoft Corp. v. i4i Ltd. P'ship, 564 U.S. 91 (2011) (patent validity requires clear and convincing evidence)
- KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (obviousness requires analysis of Graham factors and caution against hindsight)
- Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93 (2016) (enhanced damages for egregious willful misconduct; jury decides willfulness)
- SEB S.A. v. Montgomery Ward & Co., 594 F.3d 1360 (Fed. Cir. 2010) (virtual marking evidence can support constructive notice)
- Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034 (Fed. Cir. 2016) (en banc) (complete obviousness inquiry including objective indicia)
- Pers. Web Techs., LLC v. Apple, Inc., 848 F.3d 987 (Fed. Cir. 2017) (motivation to combine and reasonable expectation of success required to show obviousness)