circuit1A New Hampshire District Court recently denied defendant sensor makers’ attempt to tilt the case in their favor by denying summary judgment of invalidity and non-infringement.

SignalQuest asserted three patents relating to tilt and vibration sensors against the defendants. During the case, the U.S. Patent Office instituted ex parte reexaminations for each of the patents, leading the Court to stay the case pending conclusion of the reexaminations.  All three patents ultimately survived reexamination, but some claims were canceled or amended, and some new claims were added.  After the Court lifted the stay, the defendants moved for summary judgment.

In their motion, the defendants first argued there were no sales or offers for sale in the U.S. SignalQuest conceded there had been no sales, but pointed to evidence of quotations for the defendants’ products being sent to companies in the U.S. as evidence of offers for sale.  The defendants countered that the quotations were not offers for sale because they did not include the required specificity to constitute an offer.  For example, according to the defendants, both quotations did not specify the quantity or a specific price (in both cases quoted prices depended on the quantity ordered).  The Court rejected this argument, finding that a reasonable jury could interpret the quotations as offers for sale because they provided a description of the products and price at which they could be purchased.

The defendants next argued that even if quotations were offers for sale, they did not occur in the U.S. and did not constitute infringement. The Court rejected this argument as well, finding disputed issues of fact relating to whether the contemplated sales would be completed in the U.S. or abroad.  The Court further declined to find that intervening rights applied to pre-reexamination offers for sale because some post-reexamination claims in each patent had identical scope to dependent claims canceled during reexamination.

The Court then turned to invalidity. The defendants argued that the claims were invalid only to the extent SignalQuest asserted that the post-reexamination claims covered square-shaped embodiments, because SignalQuest disclaimed coverage of those embodiments in reexamination.  The Court recounted that during reexamination SignalQuest supplied evidence of commercial success to overcome obviousness rejections.  The examiner in the reexamination found this evidence was sufficient to overcome rejections for claims that covered SignalQuest’s products, but maintained the obviousness objections to dependent claims directed to square-shaped embodiments because the evidence of commercial success did not relate specifically to those embodiments.

SignalQuest initially maintained in the reexaminations that the dependent claims should be allowed because they depended from allowed claims.  SignalQuest appealed the obviousness objections on these grounds, but later withdrew the appeals and canceled the claims directed to the square-shaped embodiments.  Based on these events, the defendants argued that SignalQuest had disclaimed these embodiments.

The Court began by pointing out that the defendants had the burden of showing invalidity. Here, the Court found that the defendants did “not even begin to make such a showing,” by failing to put any prior art before the Court that the court could find invalidated the patents.  According to the Court, defendants instead asked “the court to read the examiner’s obviousness objection as to one dependent claim into all of the patents’ claims if (and only if) those claims are read to cover an embodiment with a square-shaped electronically insulative element.”  The Court determined this was not sufficient to support summary judgment of invalidity.  The Court concluded by noting that to the extent the defendants’ invalidity argument is at bottom a prosecution history estoppel argument, that argument would be denied at this stage and addressed during the claim construction phase.

The decision highlights a number of considerations when moving for summary judgment, including being careful to meet the required showing for summary judgment motion without being overly reliant on prior proceedings (such as reexaminations) and the Court to fill in the gaps.

The case SignalQuest, Inc. v. Tien-Ming Chou, OneQue Corporation, and Bravotronics Corporation, No. 11-cv-392-JL (D.N.H. February 23, 2016), before Hon. Joseph N. Laplante.  A copy of the order can be found here.