Static Control Components, Inc. v. Lexmark International, Inc.

502 F. Supp. 2d 568, 2007 U.S. Dist. LEXIS 37749, 2007 WL 1485830
District Court, E.D. Kentucky·Decided May 18, 2007·No. Civ.A. 5:02-571, Civ.A. 5:04-84·Published·Cited by 4 cases

Opinion

*572 ORDER

VAN TATENHOVE, District Judge.

The Court takes up for consideration the claims of fourteen patents at issue in this suit that have contested constructions for the purpose of construing those claims. 1 The parties have filed a joint claim construction brief [R. 919]; opening briefs [R. 966 (Static Control, Pendí, and Wazana), 949 (Lexmark) ]; responses to the opposing parties’ opening brief [R. 1007, 1010]; and replies [R. 1023,1025].

I.

BACKGROUND

Briefly, the status of the parties is as follows: Lexmark is a large producer of printers and toner cartridges for its printers. SCC is “a leading supplier to toner cartridge remanufacturers.” [R. 172 at 16, Case No. 5:02-571]. The remanufacturers, which include the other Counterclaim Defendants in this case, take used toner cartridges, repair them, refill the toner, et cetera and resell the cartridges to end-user consumers. SCC sells to the remanu-facturers parts and supplies for reworking the used toner cartridges, such as replacement parts, toner, and microchips. [R. 1],

Lexmark and SCC first began litigation in this Court in 2002 when Lexmark filed suit against SCC, alleging, inter alia, that SCC’s sale of “SMARTER” microchips infringed on Lexmark’s copyrighted “Toner Loading Programs.” [R. 1, Case No. 5:02-571], In 2004, SCC filed a declaratory judgment action, alleging, inter alia, that its new “re-engineered” microchips did not infringe on any of Lexmark’s copyrights. [R. 1, Case No. 5:04-84]. The cases were ultimately consolidated with Case No. 5:04-84 as the lead case, and all citations in this Order refer to that lead case unless otherwise noted. [R. 140]. Lexmark filed a Counterclaim/Third Party Complaint to the 2004 litigation initiated by SCC, in which it alleged patent claims against SCC and the Counterclaim Defendant remanu-facturers to this case. [R. 67], These patent claims in Lexmark’s Counterclaim form the basis of the claim construction process in which the Court currently engages.

The primary, though not only, theory on which Lexmark alleges direct patent infringement against the remanufacturers and active inducement of patent infringement against SCC is predicated on Lex-mark’s use of single-use restrictions on the majority of its cartridges at issue. These “restricted” cartridges have been commonly referred to as “Prebate cartridges” for the reasons that follow: Lexmark runs what it called at one time its “Prebate Program” and what now is referred to as the “Lexmark Return Program.” [R. 594 at 3, n. 4]. In that program, Lexmark’s customers buy printer cartridges at an upfront discount in exchange for the customer agreeing to use the cartridge only once and then return the empty cartridge only to Lexmark. According to Lexmark, Lex-mark offers “ ‘[rjegular’ toner eartridge[s] for those customers who do not choose the Prebate/Cartridge Return Program toner cartridge[s] with [their] terms.” [R. 2 at 8], Therefore, “Prebate” is temporally the reverse of a rebate.

Over the years, the precise language of Lexmark’s Prebate terms printed across the top of Prebate cartridge boxes has varied. [See, e.g., R. 573 at 3]. However, currently the terms read:

RETURN EMPTY'CARTRIDGE TO LEXMARK FOR REMANUFACTUR-ING AND RECYCLING
*573 Please read before opening. Opening this package or using the patented cartridge inside confirms your acceptance of the following license agreement. This patented Return Program cartridge is sold at a special price subject to a restriction that it may be used only once. Following this initial use, you agree to return the empty cartridge only to Lex-mark for remanufacturing and recycling. If you don’t accept these terms, return the unopened package to your point of purchase. A regular price cartridge without these terms is available.

[R. 594, 3-4 (Lexmark has provided the Court with a demonstrative cartridge and cartridge box with the above Prebate language, as Lexmark represented that it would at Record 519 at 9, n. 13) ]. Including English, these terms are printed in six different languages. Id.

Lexmark’s second theory of direct patent infringement is predicated on the idea that the first sale of cartridges in foreign nations does not exhaust Lexmark’s patents on those cartridges in the United States. See Jazz Photo Corp. v. Int’l Trade Comm’n, 264 F.3d 1094, 1105 (Fed.Cir.2001) (citing Boesch v. Graff, 133 U.S. 697, 701-703, 10 S.Ct. 378, 33 L.Ed. 787 (1890)). Accordingly, Lexmark argues that regardless of whether a single use restriction reads on its cartridges, the Counterclaim Defendant remanufacturers of printer cartridges infringe upon the patents that read upon cartridges originally sold overseas by reselling them without license in the United States.

II.

DISCUSSION

A. Principles of Claim Construction

The current exercise the Court undertakes is that of claim construction. Title 35 U.S.C. § 112 requires that the written description of the invention, or “specification,” in the patent, “shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” “It is a bedrock principle of patent law that the claims of a patent define the invention to which the patentee is entitled the right to exclude.” Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1115 (Fed.Cir.2004) (citing Aro Mfg., Co. v. Convertible Top Replacement Co., 365 U.S. 336, 339, 81 S.Ct. 599, 5 L.Ed.2d 592 (1961)). Determining the scope and meaning of a claim is solely a matter of law for the Court to decide. Markman v. Westview Instruments, Inc., 517 U.S. 370, 372, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996).

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Static Control Components, Inc. v. Lexmark International, Inc., 502 F. Supp. 2d 568, 2007 U.S. Dist. LEXIS 37749, 2007 WL 1485830 (E.D. Ky. 2007).

502 F. Supp. 2d 568 (Static Control Components, Inc. v. Lexmark International, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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