HALLIBURTON SERVICES v. SMITH INTERN. INC. No. 4:02-CV-269.
317 F.Supp.2d 719 (2004)
HALLIBURTON SERVICES, Plaintiff, v. SMITH INTERNATIONAL INC., Defendant.
United States District Court, E.D. Texas, Sherman Division.
May 6, 2004.
Eric William Buether, Arthur Isaac Navarro, Godwin Gruber, Dallas, TX, Michael Edwin Jones, Potter Minton, Tyler, TX, for Plaintiff.
Alan David Rosenthal, Rosenthal & Osha, William C. Slusser, Slusser, Wilson & Partridge, Houston, TX, Otis W. Carroll, Jr., Ireland, Carroll & Kelley, PC, Tyler, TX, for Defendant.
MEMORANDUM OPINION AND ORDER
DAVIS, District Judge.
Before the Court are Smith's Motion for Partial Summary Judgment Under 35 U.S.C. § 287(a) Due to Halliburton's Failure to Mark (Docket No. 121), Halliburton's Motion to Dismiss as Moot Smith's Motion for Partial Summary Judgment Under 35 U.S.C. § 287(a) Due to Halliburton's Failure to Mark (Docket No. 152), and Halliburton's Motion for Leave to File Delayed Response to Smith's Motion for Partial Summary Judgment Under 35 U.S.C. § 287(a) Due to Halliburton's Failure to Mark (Docket No. 154). Having considered the parties submissions and the underlying procedural history, the Court
BACKGROUND AND PROCEDURAL HISTORY
This action involves Smith's alleged infringement of Halliburton's patents concerning drill bits and methods of designing drill bits used in down-hole oil and gas drilling operations. Specifically, Halliburton has sued Smith for making drill bits that allegedly infringe Patents 6,213,225 (the "'225 Patent"), 6,095,262 (the "'262
Smith alleges that Halliburton did not mark patented products with the appropriate patent numbers. It is undisputed that the '225 Patent, issued on August 1, 2000, is the earliest-issued of the patents in dispute. It is also undisputed that Halliburton made, sold, and offered for sale its patented drill bits between the August 1, 2000 issuance and this action's filing on September 6, 2002. According to Smith, Halliburton marked neither the '225 nor '262 Patent numbers on its products until "some time after July 26, 2002," and did not mark the '577 Patent number until after suit was filed.
Smith moved for summary judgment alleging that Halliburton' failure to mark precludes recovery of damages under 35 U.S.C. § 287. Under the marking statute, 35 U.S.C. § 287(a), to recover damages for infringement, a patentee must adequately mark patented products with the patent number or give the alleged infringer notice of patent protection. Smith argues that Halliburton's failure to mark patented drill bits violates the Marking statute and precludes recovery of any damages that may be incurred under the '262 and '225 Patents before July 26, 2002 and under the '577 Patent before September 6, 2002.
Halliburton responds by arguing that damages should begin to accrue on all patents at issue on August 1, 2002. With regard to the '262 and '225 Patents, Halliburton alternatively argues that the Marking statute includes no "shipping" requirement or that Halliburton marked and shipped its drill bits prior to August 1, 2002. With regard to the '577 Patent, Halliburton argues that the Marking statute does not apply because Halliburton has asserted only the '577 Patent's method claims. Thus, Halliburton contends that damages under the '577 Patent should begin to accrue on its issuance date, July 2, 2002. However, "in an effort to simplify the damage calculations [Halliburton] has
HALLIBURTON'S MOTION TO DISMISS AS MOOT
Before the Court can address the substantive marking issue, the Court must first consider this issue's unusual procedural posture. The certificate of service indicates that Smith served its motion for partial summary judgment on March 25, 2004 by Federal Express overnight delivery. Thus, pursuant to Local Rule CV-7, Halliburton's response was due April 9, 2004. L.R. CV-7 ("a party opposing a motion has 15 days from the date the motion was served in which to serve and file a response and any supporting documents"); see also Prince v. Poulos, 876 F.2d 30, 32 n. 1 (5th Cir.1989) ("Since Federal Express is not a public authority, they are not a form of `mail' and need not be utilized under Rule 25(a)."). However, due to attempts between the parties to resolve the marking issue without the Court's intervention, Halliburton failed to file a timely response. Negotiations having apparently failed, on April 19, Smith addressed a letter to the Court requesting the Court to grant Smith's motion to dismiss as unopposed.
The Court is inclined to grant Halliburton's motion to file a late response. Although Halliburton's response was 11 days late in this case, the Court will accept it for two reasons. First, the Court finds that an 11 day delay will not prejudice Smith in this circumstance. Second, the Court generally encourages litigants to resolve issues without judicial intervention and would not punish Halliburton in this instance for making good faith attempts to resolve the marking issue.
However, the Court denies Halliburton's motion to dismiss Smith's motion. First, the Court notes that Halliburton's response and motion to dismiss are identical and thus duplicative. Second, in this instance, the Court would rather accept a late response than rule on the possible implications of allowing parties to disguise late-filed responses as motions to dismiss other motions. Because the Court appreciates parties' attempts to resolve certain issues without judicial intervention, the Court chooses to consider Halliburton's motion to dismiss as a good faith filing based on a stipulation to limit damages rather than a procedural end-run around this Court's deadlines. The Court denies Halliburton's Motion to Dismiss as Moot Smith's Motion for Partial Summary Judgment Under 35 U.S.C. § 287(a) Due to Halliburton's Failure to Mark (Docket No. 152) as duplicative of Halliburton's response to Smith's motion, but will consider the arguments and stipulations as incorporated into Halliburton's response.
HALLIBURTON'S FAILURE TO MARK
Smith's motion for summary judgment raises two separate issues for the Court to resolve. First, in regard to the '262 and '225 Patents, the parties agree that Halliburton began marking its products in
The Marking Statute
Patentees must comply with the Marking statute in order to recover damages for infringement. The statute provides in relevant part:
35 U.S.C. § 287(a). Generally, under the marking statute, a party "is entitled to damages from the time when it either began marking its products in compliance with section 287(a) or when it actually notified [the infringer] of its infringement, whichever is earlier." American Medical Systems, Inc. v. Medical Engineering Corp., 6 F.3d 1523, 1537 (Fed.Cir.1993). "In determining whether the patentee marked its products sufficiently to comply with the constructive notice requirement, the focus is not on what the infringer actually knew, but on whether the patentee's actions were sufficient, in the circumstances, to provide notice in rem." Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1446 (Fed.Cir.1998).
The patentee bears the burden of proving compliance by a preponderance of the evidence. Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1446 (Fed.Cir.1998). Compliance with the marking statute is a question of fact. Gart v. Logitech, Inc., 254 F.3d 1334, 1339 (Fed.Cir.2001) cert. denied, 534 U.S. 1114, 122 S.Ct. 921, 151 L.Ed.2d 886 (2002). Consequently, the marking issue "is properly decided upon summary judgment when no reasonable jury could find that the patentee either has or has not provided actual notice to the particular defendants by informing them of his patent and their infringement of it." Id. Summary judgment shall be rendered when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R. Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir.1998). In determining whether a genuine issue for trial exists, the court views all inferences drawn from the factual record in the light most favorable to the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
The '262 and '225 Patents
Where a patentee has distributed unmarked products, damages do not begin
Id. at 1538. The Court finds that American Medical Systems applies here because the summary judgment evidence indicates that Halliburton initially shipped unmarked products and subsequently began marking and shipping marked products.
The Court finds that Halliburton has raised a genuine issue of material fact as to when it began shipping marked products. Halliburton does not dispute that it failed to mark its products with the '262 and '225 patent numbers until July 26, 2002. Halliburton's Motion to Dismiss (Docket No. 152), p. 2.
Halliburton's Motion to Dismiss (Docket No. 152), Exhibit A. The Court declines to accept Smith's argument that Halliburton's affidavit testimony suggests only when the bits were marked and gives no indication as to when marked bits were shipped. In this summary judgment context, the Court draws all inferences in favor of the non-movant
The Court also finds that Halliburton has raised a genuine issue of material fact as to when it stopped shipping unmarked
The '577 Patent
Smith also argues that Halliburton cannot recover damages prior to this suit's filing date because Smith failed to mark the '577 Patent number on its products. Although the '577 Patent contains both method and apparatus claims, Halliburton only asserts method claims in this action. However, Halliburton never refutes Smith's assertion that Halliburton made and sold products protected under the '577 Patent. Instead, Halliburton asserts, without citation, that "when the patent discloses method and apparatus claims, if only method claims are asserted in the lawsuit and only method claims are found to be infringed, then the marking limitation does not apply." Halliburton's Motion to Dismiss (Docket No. 152), p. 4.
Where a patent contains both method and apparatus claims, and there is a tangible item by which notice of the asserted method can be given, the patentee must mark the tangible item to comply with the Marking statute, 35 U.S.C. § 287. American Medical Systems, Inc. v. Medical Engineering Corp., 6 F.3d 1523, 1538-39 (Fed.Cir.1993); Honeywell International Inc. v. Hamilton Sundstrand Corp., 2001 WL 66345, *4 (D.Del.2001); Mosel Vitelic Corp. v. Micron Technology, Inc., 2000 WL 1728351 (D.Del.2000) (holding that "the only time that the notice provisions of the federal statute do not come into play is when the patent is directed to only a method or process"). The Federal Circuit set forth this principle in American Medical Systems by declaring:
6 F.3d at 1538-39.
In the present case, there is no evidence that Halliburton marked products covered by the '577 before it filed suit. As noted above, Halliburton does not deny that it produced and sold tangible items covered by the '577 Patent. Also, the summary judgment evidence does not indicate when Halliburton begin marking products with the '577 Patent number. Unlike the '262 and '225 Patents, Halliburton provided no summary judgment evidence indicating when, if ever, it began to mark products with the '577 Patent number. Moreover, a deposition attached to Smith's motion indicates that the '577 Patent was not marked along with the '262 and '225 Patents in late July 2002. Under American Medical Systems Halliburton should have marked its products with the '557 Patent number because Halliburton distributed tangible items created by the '557 methods and by which Halliburton could have given notice
In sum, the Court finds that Halliburton has presented sufficient summary judgment evidence to overcome Smith's motion regarding the '262 and '225 Patents but has presented no evidence to overcome the motion regarding the '577 Patent. Although the Court has found sufficient summary judgment evidence to raise a fact issue that Halliburton began shipping products marked with the '225 and '262 patent numbers in late July, the evidence does not suggest a firm date. Thus, to simplify evidentiary presentation and damages calculations, the Court accepts Halliburton's stipulation that damages on the ' 225 and '262 Patents begin accruing on August 1, 2002. However, the Court does so without prejudice to Smith to present evidence at trial that Halliburton did not ship marked products until a later date. Additionally, the Court holds that damages on the '577 Patent began accruing when suit was filed on September 6, 2002.
- No Cases Found