Largan Precision Co. v. Genius Electronic Optical Co.

86 F. Supp. 3d 1105, 2015 U.S. Dist. LEXIS 43073, 2015 WL 1476902
CourtDistrict Court, N.D. California
DecidedMarch 31, 2015
DocketCase No. 13-cv-02502-JD
StatusPublished
Cited by4 cases

This text of 86 F. Supp. 3d 1105 (Largan Precision Co. v. Genius Electronic Optical Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Largan Precision Co. v. Genius Electronic Optical Co., 86 F. Supp. 3d 1105, 2015 U.S. Dist. LEXIS 43073, 2015 WL 1476902 (N.D. Cal. 2015).

Opinion

ORDER RE CROSS-MOTIONS FOR SUMMARY JUDGMENT RE INFRINGEMENT

JAMES DONATO, United States District Judge

Plaintiff Largan and defendant Genius have filed cross-motions for summary judgment on the issue of direct, contributory, and induced infringement. See Dkt. Nos. 214, 2151 The motions overlap substantially and focus on the issue of whether Genius’s conduct was sufficiently connected to the United States to give rise to infringement liability. The Court finds that, although Genius’s products meet the elements of Largan’s patents as alleged, all but a sliver of the accused conduct took place outside the territorial reach of the United States patent laws. Consequently, the Court grants both motions in part and denies them in part.

FACTUAL BACKGROUND

Largan and Genius supply lenses to Apple and Motorola for' incorporation into cellphones and tablets. Largan alleges that Genius infringes ten claims spread out over five patents.1 Five claims are alleg[1108]*1108edly infringp.fi by the lenses alone; the other five allegedly infringe when the lenses are combined with an image sensor, Largan accuses eight Genius lenses, all but one of which are sold to Apple. This table summarizes Largan’s infringement contentions (boldface indicates claims that require an image sensor):

[[Image here]]

The route Genius’s lenses travel to get into the Apple products is largely undisputed.2 Genius and Apple entered into a Master Development and Supply Agreement (“MDSA”) in 2010 that governs the sale of products from Genius to “Apple or Apple Affiliates.” See MDSA at GSEO 00028087, Dkt. No. 222-10. The agreement, however, does not specify the prices, quantities, or lens models to be sold by Genius. Those details are worked out on an ongoing basis between Genius, Apple, and to some extent, other companies in Apple’s supply chain.

Specifically, Genius’s employees negotiate prices with Apple’s Global Supply Managers (known as “GSMs”) in Cuperti-no, California. Leopold Decl. ¶ 9, Dkt. No. 222-24; Whitehead Dep. Tr. 104:22-105:2, Dkt. Nos. 222-6, 215-7; Mack-Mumford Dep. Tr. 48:18-50:24, 51:1753:22, Dkt. Nos. 222-11, 216-10, 290-28. These discussions with the GSMs can involve Genius employees traveling to the U.S., see Leopold Decl. ¶ 9, but are mainly done by phone, see Mack-Mumford Dep. Tr. 51:12-16. The discussions result in a summary of prices, and sometimes a statement of work, or SOW, provided by Apple to Genius. See Mack-Mumford Dep. Tr. 206:1321, 19:4-9, 67:16-24. The types of information included in a SOW has varied over time, see Whitehead Dep. Tr. 242:1-244:25, but current SOWs include the code name of the relevant lens, a “not-to-exeeed price” (or “NTE price”), and the minimum quantity of lenses to be sold, see id. 246:14-247:12; Sample SOW at 2, Dkt. No. 216-11. The NTE price establishes pricing for the next several quarters; as its name implies, the [1109]*1109price at which Genius, sells its lenses can be lower than the NTE price, but cannot be higher. See Whitehead • Dep. Tr. 249:15-250:5. Nevertheless, Genius claims that on at least one occasion it has charged the module integrators more than the price agreed to with Apple, when a module integrator requested a lens specification different from the one Apple had requested. See Mack-Mumford Dep. Tr. 78:5-22.3

After the SOW legwork is done, Genius quotes the prices to the camera module integrators that constitute the next stage in Apple’s supply chain. See id. 206:1-9, 19:16-20:7. The module integrators, which are located exclusively in Asia, send purchase orders to Genius (either to Genius’s headquarters in Taichung, Taiwan, or to their manufacturing facilities across the Taiwan Strait in Xiamen) and the lenses are shipped to the module integrators from Xiamen. Mack-Mumford Decl. ¶¶ 4-6, Dkt. No. 216-7. After buying the lenses from Genius, the module integrators combine them with other components to build cameras. See Mack-Mumford Dep. Tr. 20:2-16; Bone Dep. Tr. 134:11-21, Dkt. Nos. 222-5, 290-27; Joint Pretrial Statement at 6:14-15. The module integrators sell the cameras to system integrators, all of which are located in Asia, who incorporate the cameras into phones or tablets. See Mack-Mumford Dep. Tr. 91:23-92:2; Joint Pretrial Statement at 6:16-17. The system integrators send these products to Apple for sale to end users in various countries, including the United States. See Genius’s Responses to RFAs 115, Dkt. No. 222-25.

Genius’s process for selling lenses to be incorporated into Motorola products is similar. Genius’s employees negotiate pricing with Motorola “category managers”. See Whitehead Dep. Tr. 105:4-7. These managers are based in Chicago, and Genius’s employees on occasion travel to Chicago to meet with them. See id. 107:4-7, 13-16. The process of negotiating prices with Motorola involves three stages: first, Genius gives Motorola a range of potentially acceptable prices; second, Motorola asks Genius for a more granular price proposal; and third, the parties negotiate an agreed-upon price. See id. 163:9-165:16. Afterwards, Genius sells its lenses to a module integrator at the agreed-upon price, and the lenses progress through Motorola’s supply chain in a similar way to Apple’s — again all in Asia and outside the United States. ’ See Francis Dep. Tr. 138:16-21, Dkt. No. 216-17. In some cases, Genius has sold lenses to the module integrator for less than the pricé agreed between Genius and Motorola. See Whitehead Dep. Tr. 210:24-211:4.

Genius’s employees state that they do not know and have never discussed where Genius lenses incorporated into Apple or Motorola products ultimately end up. See id. 214:11-23; 218:916.

The vast majority of the accused products — which the parties ballpark as “millions” of lenses and lens/sensor combinations — have been sold through these supply chains. But it is undisputed that Genius has provided a tiny number of the accused products directly to Apple in Cupertino, California, via FedEx or DHL. See Dkt. Nos. 222-34 at GSEO 00059796 (FedEx label for GS-8740 shipment); 226-38 at GSEO 00024743 (GS-8656); 226-40 at GSEO 00081936 (DHL label for GS-8689 shipment); 226-41 at GSEO 00084818 (GS-8588 and GS-8689). The parties agree that these were free development samples not meant for sale, that they constitute only a minute fraction of the accused units, and that they were provided “at Apple’s request and subject to Apple’s instructions.” See Joint Pretrial Statement at 6:7-9.4

[1110]*1110LEGAL STANDARD

Summary judgment is appropriate when, drawing all justifiable inferences in the nonmovant’s favor, “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); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

A person who, without a license, “makes, uses, offers to sell, or sells any patented invention within the United States or imports into the United States” is liable for direct patent infringement. 35 U.S.C.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
86 F. Supp. 3d 1105, 2015 U.S. Dist. LEXIS 43073, 2015 WL 1476902, Counsel Stack Legal Research, https://law.counselstack.com/opinion/largan-precision-co-v-genius-electronic-optical-co-cand-2015.