Nichia Corporation v. VIZIO, Inc.

MEMORANDUM of CONTENTIONS of FACT and LAW

C.D. Cal.February 18, 2019

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 8:16-cv-00545-SJO-MRW VIZIO’S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW QUINN EMANUEL URQUHART & SULLIVAN LLP Michael Fazio (SBN 228601) michaelfazio@quinnemanuel.com Ryan S. Goldstein (SBN 208444) ryangoldstein@quinnemanuel.com Miles Freeman (SBN 299302) milesfreeman@quinnemanuel.com 865 S. Figueroa St., 10th Floor Los Angeles, California 90017 Telephone: (213) 443-3000 Facsimile: (213) 443-3100 Raymond N. Nimrod (admitted pro hac vice) raynimrod@quinnemanuel.com Richard W. Erwine (admitted pro hac vice) richarderwine@quinnemanuel.com Matthew A. Traupman (admitted pro hac vice) matthewtraupman@quinnemanuel.com Kevin Jang (admitted pro hac vice) kevinjang@quinnemanuel.com 51 Madison Ave. New York, NY 10010 Telephone: (212) 849-7000 Facsimile: (212) 849-7100 Jared W. Newton (admitted pro hac vice) jarednewton@quinnemanuel.com 1300 I St. NW, Suite 900 Washington, DC 20005 Telephone (202) 538-8000 Facsimile: (202) 538-8100 Attorneys for Defendant and Counterclaim-Plaintiff VIZIO, Inc. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION NICHIA CORPORATION Plaintiff and Counterclaim- Defendant, v. VIZIO, INC. Defendant and Counterclaim- Plaintiff. Case No. 8:16-cv-00545-SJO-MRW VIZIO, INC.’S REVISED MEMORANDUM OF CONTENTIONS OF FACT AND LAW PURSUANT TO LOCAL RULE 16-4 Pretrial Conf.: March 18, 2019 Trial Date: March 26, 2019 REDACTED VERSION OF DOCUMENT PROPOSED TO BE FILED UNDER SEAL Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 1 of 49 Page ID #:14805 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -i- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW TABLE OF CONTENTS Page I. CLAIMS AND DEFENSES ............................................................................. 1 A. Summary of Nichia’s Claims .................................................................. 1 1. Alleged Infringement of U.S. Patent No. 7,855,092 .................... 1 2. Alleged Infringement of U.S. Patent No. 8,309,375 .................... 1 3. Damages for the Alleged Infringement ........................................ 2 B. Elements Required to Establish Nichia’s Claims ................................... 2 1. Alleged Infringement of U.S. Patent No. 7,855,092 .................... 2 2. Alleged Infringement of U.S. Patent No. 8,309,375 .................... 4 3. Damages for the Alleged Infringement ........................................ 6 C. Brief Description of Key Evidence in Opposition to Nichia’s Claims ..................................................................................................... 9 1. Non-Infringement of U.S. Patent No. 7,855,092 .......................... 9 2. Invalidity of U.S. Patent No. 7,855,092 ..................................... 12 3. Non-Infringement of U.S. Patent No. 8,309,375 ........................ 17 4. Invalidity of U.S. Patent No. 8,309,375 ..................................... 20 5. Damages for the Alleged Infringement ...................................... 25 D. Summary of VIZIO’s Counterclaims & Affirmative Defenses ............ 27 1. Non-Infringement of U.S. Patent No. 7,855,092 ........................ 27 2. Invalidity of U.S. Patent No. 7,855,092 ..................................... 27 3. Non-Infringement of U.S. Patent No. 8,309,375 ........................ 27 4. Invalidity of U.S. Patent No. 8,309,375 ..................................... 27 5. Collateral Estoppel ...................................................................... 28 6. License & Exhaustion ................................................................. 28 E. Elements Required to Establish VIZIO’s Counterclaims & Affirmative Defenses ............................................................................ 29 1. Non-Infringement of U.S. Patent No. 7,855,092 ........................ 29 2. Invalidity of U.S. Patent No. 7,855,092 ..................................... 29 Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 2 of 49 Page ID #:14806 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -ii- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW 3. Non-Infringement of U.S. Patent No. 8,309,375 ........................ 31 4. Invalidity of U.S. Patent No. 8,309,375 ..................................... 32 5. Collateral Estoppel ...................................................................... 34 6. License & Exhaustion ................................................................. 35 F. Brief Description of Key Evidence in Support of VIZIO’s Counterclaims & Affirmative Defenses ............................................... 36 1. Non-Infringement of U.S. Patent No. 7,855,092 ........................ 36 2. Invalidity of U.S. Patent No. 7,855,092 ..................................... 36 3. Non-Infringement of U.S. Patent No. 8,309,375 ........................ 36 4. Invalidity of U.S. Patent No. 8,309,375 ..................................... 36 5. Collateral Estoppel ...................................................................... 37 6. License & Exhaustion ................................................................. 39 II. ANTICIPATED EVIDENTIARY ISSUES .................................................... 39 III. ISSUES OF LAW ........................................................................................... 40 IV. BIFURCATION OF ISSUES .......................................................................... 41 V. JURY TRIAL .................................................................................................. 41 VI. ATTORNEYS’ FEES ...................................................................................... 41 VII. ABANDONMENT OF ISSUES ..................................................................... 42 Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 3 of 49 Page ID #:14807 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -iii- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW TABLE OF AUTHORITIES Page Cases Alzheimer’s Inst. of Am. v. Eli Lily & Co., 128 F. Supp.3d 1249 (N.D. Cal. June 5, 2015) ..................................................... 42 Chrimar Systems, Inc. v. Foundry Networks, Inc., No. 06-13963, 2010 WL 3431569 (E.D. Mich. Aug. 30, 2010) ........................... 35 In re Cortright, 165 F.3d 1353 (Fed. Cir. 1999) ....................................................................... 31, 34 Dow Chem. Co. v. Halliburton Oil Well Cementing Co., 324 U.S. 320 (1945) ......................................................................................... 30, 33 Eisai Co. Ltd. v. Dr. Reddy’s Laboratories, Ltd., 533 F.3d 1353 (Fed. Cir. 2008) ....................................................................... 30, 33 Ergo Licensing LLC v. CareFusion 303, Inc., 673 F.3d 1361 (Fed. Cir. 2012) ....................................................................... 31, 33 Everlight Elecs. Co. v. Nichia Corp., No. 12-cv-11758, 2016 WL 8232553 (E.D. Mi. Jan. 19, 2016) .................................................................................................. passim Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970) ........................................................................ 8 Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966) ............................................................................................. 30, 32 Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016) ......................................................................................... 8, 9 Harris Corp. v. IXYS Corp., 114 F.3d 1149 (Fed. Cir. 1997) ....................................................................... 31, 34 Hoffer v. Microsoft Corp., 405 F.3d 1326 (Fed. Cir. 2005) ............................................................................... 4 ICU Med., Inc. v. Alaris Med. Systems, Inc., No. 04-cv-689, 2007 WL 6137003 (C.D. Cal. Apr. 16, 2007) ............................. 42 Impression Products, Inc. v. Lexmark Intern., Inc., 137 S. Ct. 1523 (2017) ........................................................................................... 35 Intel Corp. v. Broadcom Corp., 173 F. Supp.2d 201 (D. Del. 2011) ....................................................................... 35 IPS Grp., Inc. v. Duncan Solutions, Inc., No. 15-cv-1526, 2018 WL 2215418 (S.D. Cal. May 14, 2018) ............................ 42 L&W, Inc. v. Shertech, Inc., 471 F.3d 1311 (Fed. Cir. 2006) ............................................................................... 9 LaserDynamics, Inc. v. Qanta Computer, Inc., 694 F.3d 51 (Fed. Cir. 2012) ................................................................................... 6 Limelight Networks, Inc. v. Akamai Technologies, Inc., 572 U.S. 915 (2014) ................................................................................................. 5 Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 4 of 49 Page ID #:14808 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -iv- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW LittleJohn v. United States, 321 F.3d 915 (9th Cir. 2003) ................................................................................. 35 Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009) ............................................................................... 6 MicroStrategy Inc. v. Bus. Objects, S.A., 429 F.3d 1344 (Fed. Cir. 2005) ........................................................................... 2, 4 Minks v. Polaris Industries, Inc., 546 F.3d 1364 (Fed. Cir. 2008) ............................................................................... 8 Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898 (2014) ......................................................................................... 31, 33 Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333 (Fed. Cir. 2013) ............................................................................. 34 Par Pharmaceutical, Inc. v. Luitpold Pharmaceuticals, Inc., No. 16-cv-2290, 2017 WL 1479418 (D.N.J. Apr. 24, 2017) ................................ 42 Pharmacia & Upjohn Co. v. Mylan Pharm., Inc., 170 F.3d 1373 (Fed. Cir. 1999) ............................................................................. 34 PPG Industries, Inc. v. Guardian Industries Corp., 75 F.3d 1558 (Fed. Cir. 1996) ................................................................... 30, 31, 33 ResQNet.com v. Lansa, Inc., 594 F.3d 860 (Fed. Cir. 2010) ................................................................................. 6 Seal-Flex, Inc. v. Athletic Track & Court Constr., 172 F.3d 836 (Fed. Cir. 1999) ............................................................................. 2, 4 SmithKline Diagnostics, Inc. v. Helena Laboratories Corp., 926 F.2d 1161 (Fed. Cir. 1991) ........................................................................... 8, 9 Soverain Software LLC v. Victoria’s Secret Direct Brand Management, LLC, 778 F.3d 1311 (Fed. Cir. 2015) ............................................................................. 35 SSIH Equip. S.A. v. U.S. Int’l Trade Com’n, 718 F.2d 365 (Fed. Cir. 1983) ............................................................................. 4, 5 State Indus., Inc. v. A.O. Smith Corp., 751 F.2d 1226 (Fed. Cir. 1985) ............................................................................... 8 VirnetX, Inc. v. Cisco Systems, Inc., 767 F.3d 1308 (Fed. Cir. 2014) ............................................................................... 6 Voda v. Cordis Corp., 536 F.3d 1311 (Fed. Cir. 2008) ....................................................................... 29, 32 WBIP, LLC v. Kohler Co., 829 F.3d 1317 (Fed. Cir. 2016) ................................................................... 9, 30, 33 WMS Gaming, Inc. v. Int’l Game Tech., 184 F.3d 1339 (Fed. Cir. 1999) ............................................................................... 3 ZUP, LLC v. Nash Manufacturing, Inc., 896 F.3d 1365 (Fed. Cir. 2018) ....................................................................... 30, 33 Statutory Authorities 35 U.S.C. § 101 ............................................................................................ 1, 2, 27, 28 35 U.S.C. § 102 ............................................................................................ 1, 2, 27, 28 Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 5 of 49 Page ID #:14809 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -v- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW 35 U.S.C. § 103 ................................................................................................... passim 35 U.S.C. § 103(a) ..................................................................................................... 30 35 U.S.C. § 112 ................................................................................................... passim 35 U.S.C. § 271(a) ................................................................................................... 1, 3 35 U.S.C. § 271(b) ....................................................................................................... 1 35 U.S.C. § 271(c) ....................................................................................................... 1 35 U.S.C. § 271(g) ................................................................................................... 1, 5 35 U.S.C. § 284 ................................................................................................... passim 35 U.S.C. § 285 .......................................................................................................... 41 35 U.S.C. § 295 ...................................................................................................... 6, 18 Rules and Regulations Local Rule 16-4 ........................................................................................................... 1 Additional Authorities Federal Circuit Bar Association Model Jury Instruction B.3.1a ................................. 4 Federal Circuit Bar Association Model Jury Instruction B.3.5 ................................... 6 G. Blasse et al., “Luminescent Materials,” Springer-Verlag (1994) ................... 16, 23 Gage, Optoelectronics Applications Manual, McGraw Hill (1977) ......................... 16 J.M. Robertson et al., Colourshift of the CE3+ Emission in Monocrystalline Epitaxially Grown Garnet Layers, Philips J. Res. 36 (1981) .......................... 16, 23 L.G. Van Uitert et al., “Photoluminescent Conversion of Laser Light for Black and White and Multicolor Displays. 1: Materials” Applied Optics Vol. 10, No. 1 (1971) ....................................................................................... 16, 23 M.V. Hoffman, “Improved Color Rendition in High Pressure Mercury Vapor Lamps,” Journal of the Illuminating Engineering Society, Vol. 6, No. 2 (1977) ............................................................................................................... 16, 23 N.D. Cal. Model Patent Jury Instruction 3.8 ............................................................... 8 N.D. Cal. Model Patent Jury Instruction 4.2.b .......................................................... 31 N.D. Cal. Model Patent Jury Instruction 5.7 ............................................................... 6 N.D. Cal. Model Patent Jury Instruction B.4.3 ......................................................... 30 Pinnow et al., Photoluminescent Conversion of Laser Light for Black and White and Multicolor Displays, Applied Optics, Vol. 10, No. 1 (1971) ......... 16, 23 Rossotti, Colour, Why the World Isn’t Grey, Princeton Science Library (1985) ............................................................................................................... 16, 23 S. Nakamura et al., “High-Power InGaN Single-Quantum-Well-Structure Blue and Violet Light-Emitting Diodes,” Applied Physics Letters (1995) ..... 16, 23 S. Nakamura et al., “High-Power InGaN Single-Quantum-Well-Structure Blue and Violet Light-Emitting Diodes,” Applied Physics Letters 67, 1868 (1995) ............................................................................................................... 16, 23 Schlotter et al., Luminescence Conversion of Blue Light Emitting Diodes, Applied Physics A (Feb. 27, 1997) .................................................................. 16, 23 Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 6 of 49 Page ID #:14810 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -1- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW Pursuant to Local Rule 16-4, the Court’s November 30, 2018 Order (Dkt. 230), and the Court’s Standing Order for Civil Cases (“Standing Order”), Defendant and Counterclaim-Plaintiff VIZIO, Inc. (“VIZIO”) respectfully submits this Revised Memorandum of Contentions of Fact and Law. I. CLAIMS AND DEFENSES A. Summary of Nichia’s Claims 1. Alleged Infringement of U.S. Patent No. 7,855,092 Plaintiff Nichia Corporation (“Nichia”) alleges that VIZIO has infringed claim 1 and claim 12 of U.S. Patent No. 7,855,092 (the “‘092 patent”) through the sale or importation of certain televisions. Nichia alleges that LEDs and certain electronics present in VIZIO’s D55u-D1, E55-E1, E60-C3, M43-C1, and M60-C3 televisions meet the requirements of claim 1 of the ‘092 patent. Nichia alleges that the LEDs and certain electronics present in E55-D1, E60-C3, and M60-C3 televisions meet the additional requirement of claim 12 of the ‘092 patent. Nichia alleges that VIZIO directly infringes the ‘092 patent under 35 U.S.C. § 271(a). Nichia does not allege indirect infringement under 35 U.S.C. § 271(b) or (c). Nichia alleges that VIZIO infringes the ‘092 patent literally. Nichia does not allege infringement under the doctrine of equivalents. Nichia also alleges that the ‘092 patent is not invalid under 35 U.S.C. §§ 101, 102, 103, and 112. 2. Alleged Infringement of U.S. Patent No. 8,309,375 Nichia alleges that VIZIO has infringed claim 4 of U.S. Patent No. 8,309,375 (the “‘375 patent”) through the sale or importation of certain televisions. Nichia alleges that the method of manufacturing the LEDs present in VIZIO’s D24-C1, D28-C1, D28hn-D1, D32hn-E1, D39hn-E0, D55u-D1,E50-D1, E55-E1, E60-C3, M43-C1, and M60-C3 meets the requirements of claim 4 of the ‘375 patent. Nichia alleges that VIZIO directly infringes the ‘375 patent under 35 U.S.C. § 271(g). Nichia does not allege infringement under 35 U.S.C. § 271(a), (b) or (c). Nichia alleges that VIZIO Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 7 of 49 Page ID #:14811 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW infringes the ‘375 patent literally. Nichia does not allege infringement under the doctrine of equivalents. Nichia alleges that the ‘375 patent is not invalid under 35 U.S.C. §§ 101, 102, 103, and 112. 3. Damages for the Alleged Infringement If Nichia is successful in proving the alleged infringement and the asserted patents are not invalid, Nichia alleges that it is entitled to damages in the form of a reasonable royalty under 35 U.S.C. § 284. Nichia alleges that it is entitled to approximately $2.6 million if only the ‘092 patent is infringed, approximately $902,000 if only the ‘375 patent is infringed, and approximately $2.7 million if both patents are infringed. Nichia also contends that it is entitled to an additional $ under 35 U.S.C. § 284 for defending against inter partes review (“IPR”) petitions filed by VIZIO. B. Elements Required to Establish Nichia’s Claims 1. Alleged Infringement of U.S. Patent No. 7,855,092 In order to show that the ‘092 patent is infringed, Nichia “must supply sufficient evidence to prove that the accused product or process contains, either literally or under the doctrine of equivalents, every limitation of the properly construed claim.” Seal- Flex, Inc. v. Athletic Track & Court Constr., 172 F.3d 836, 842 (Fed. Cir. 1999); Federal Circuit Bar Association Model Jury Instruction B.3.1a. “If [] even one claim limitation is missing or not met, there is no literal infringement.” MicroStrategy Inc. v. Bus. Objects, S.A., 429 F.3d 1344, 1352 (Fed. Cir. 2005). Claim 1 of the ‘092 patent requires Nichia to show that the accused products include: 1. A device for emitting white-color light comprising: (i) a light emitting diode including: Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 8 of 49 Page ID #:14812 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW an LED chip comprising a gallium nitride compound semiconductor containing indium and being capable of emitting a blue color light, and a phosphor capable of absorbing a part of the blue color light and emitting a light having longer wavelength than the blue color light, the blue color light and the light from said phosphor being mixed to make the white-color, (ii) a control unit for converting an input to pulse signals, (iii) a driver receiving said pulse signals from said control unit to drive said LED chip, wherein the brightness of the white-color light from said light emitting diode is controlled by a width of said pulse signals. Nichia has alleged that the “control unit” limitation recited in claim 1 should be construed as a means-plus-function limitation under 35 U.S.C. § 112 ¶ 6. Nichia has alleged that the claimed function for the “control unit” limitation is “converting an input to pulse signals” and that the corresponding structure in the patent specification is “a tone control circuit that retrieves image data from RAM and computes the duration of lighting the light emitting diodes of an LED display device, then outputs pulse signals for turning on and off the LEDs.” Accordingly, to prove infringement of claim 1 of the ‘092 patent, Nichia must show that the accused products perform the claimed function and include Nichia’s proposed corresponding structure or its equivalent. See WMS Gaming, Inc. v. Int’l Game Tech., 184 F.3d 1339, 1350 (Fed. Cir. 1999). Nichia has not alleged that the accused products include the equivalent of its proposed corresponding structure. Claim 12 of the ‘092 patent requires Nichia to show that the accused products further include: Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 9 of 49 Page ID #:14813 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW 12. The device according to claim 1, wherein said phosphor has a garnet structure and is activated with cerium. In order to show infringement of either claim under 35 U.S.C. § 271(a), Nichia must show that VIZIO “makes, uses, offers to sell, or sells [the infringing product], within the United States or imports into the United States [the infringing product] during the term of the patent.” Nichia bears the burden of proving infringement by a preponderance of the evidence. SSIH Equip. S.A. v. U.S. Int’l Trade Com’n, 718 F.2d 365, 376 (Fed. Cir. 1983). 2. Alleged Infringement of U.S. Patent No. 8,309,375 In order to show that the ‘375 patent is infringed, Nichia “must supply sufficient evidence to prove that the accused product or process contains, either literally or under the doctrine of equivalents, every limitation of the properly construed claim.” Seal- Flex, 172 F.3d at 842; Federal Circuit Bar Association Model Jury Instruction B.3.1a. “If [] even one claim limitation is missing or not met, there is no literal infringement.” MicroStrategy, 429 F.3d at 1352. Claim 4 of the ‘375 patent requires the following limitations, including the limitations of claim 1 from which claim 4 depends1: Claim 4 [rewritten in independent form]. A method for manufacturing a light emitting device comprising: preparing a light emitting component having an active layer of a semiconductor, said active layer comprising a gallium nitride based semiconductor containing indium and being capable of emitting a 1 Claim 4 of the ‘375 patent depends from claim 1, which is not asserted. In order for claim 4 to be infringed, all elements of claim 1 must also be met. See Hoffer v. Microsoft Corp., 405 F.3d 1326, 1331 (Fed. Cir. 2005). For the sake of simplicity, VIZIO lists all of those elements of claim 1 here as part of the requirements for proving infringement of claim 4. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 10 of 49 Page ID #:14814 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW blue color light having a spectrum with a peak wavelength within the range from 420 to 490 nm; preparing a phosphor capable of absorbing a part of the blue color light emitted from said light emitting component and emitting a yellow color light having a broad emission spectrum comprising a peak wavelength existing around the range from 510 to 600 nm and a tail continuing beyond 700 nm, wherein selection of said phosphor is controlled based on an emission wavelength of said light emitting component; and combining said light emitting component and said phosphor so that the blue color light from said light emitting component and the yellow color light from said phosphor are mixed to make a white color light, wherein a chromaticity point of the white color light is on a straight line connecting a point of chromaticity of the blue color light and a point of chromaticity of the yellow color light, and wherein a content of said phosphor in said light emitting device is selected to obtain a desired chromaticity of the white color light[;] []wherein the emission spectrum of said phosphor comprises a peak wavelength existing around the range from 530 to 570 nm and a tail continuing beyond 700 nm. Because claim 4 is a method claim, Nichia must show that each step of the claimed method has been performed. See Limelight Networks, Inc. v. Akamai Technologies, Inc., 572 U.S. 915, 921 (2014) (“A method patent claims a number of steps; under this Court’s case law, the patent is not infringed unless all the steps are carried out.”). Nichia bears the burden of proving infringement of the ‘375 patent by a preponderance of the evidence. SSIH Equip., 718 F.2d at 376. In order to show infringement under 35 U.S.C. § 271(g), Nichia must show that VIZIO “imports into the United States or offers to sell, sells, or uses within the United Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 11 of 49 Page ID #:14815 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW States a product which is made by a process patented in the United States” and that “the importation, offer to sell, sale, or use of the product occurs during the term of such process patent.” Nichia must also show that the allegedly infringing product is not “materially changed by subsequent processes” and that it has not “become[] a trivial and nonessential component of another product.” 35 U.S. §§ 271(g)(1) & (2); Federal Circuit Bar Association Model Jury Instruction B.3.5. Nichia bears the burden of demonstrating that the accused LEDs were manufactured using the patented process, unless it is able to prove that (1) there is a substantial likelihood that the LEDs in the accused products were made by the claimed process and (2) Nichia made a reasonable effort to determine the process actually used in the production of the LEDs and was unable to do so. 35 U.S.C. § 295. 3. Damages for the Alleged Infringement Nichia alleges that it is entitled to damages in the form of a reasonable royalty for the alleged infringement of the ‘375 patent. 35 U.S.C. § 284 governs the award of damages in patent cases and provides that “[u]pon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.” In order to calculate a reasonable royalty, the fact finder considers “a hypothetical negotiation between the patentee and the infringer when the infringement began.” ResQNet.com v. Lansa, Inc., 594 F.3d 860, 868 (Fed. Cir. 2010); N.D. Cal. Model Patent Jury Instruction 5.7. There are two components to determining a reasonable royalty: the royalty base and the royalty rate. See Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1339 (Fed. Cir. 2009); N.D. Cal. Model Patent Jury Instruction 5.7. In order to determine an appropriate royalty base, a patentee must first identify the smallest-salable patent-practicing unit (“SSPPU”) that practices the patented invention. See LaserDynamics, Inc. v. Qanta Computer, Inc., 694 F.3d 51, 67 (Fed. Cir. 2012). If the SSPPU includes non-patented components, the patentee must Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 12 of 49 Page ID #:14816 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW then apportion out the value attributable to those components. See VirnetX, Inc. v. Cisco Systems, Inc., 767 F.3d 1308, 1327 (Fed. Cir. 2014); N.D. Cal. Model Patent Jury Instruction 5.7. Once the proper royalty base is determined, the next step is to select the proper royalty rate to be applied to that base. A non-exhaustive list of factors that can be considered when determining the proper royalty rate are: 1. The royalties received by the patentee for the licensing of the patent in suit, proving or tending to prove an established royalty. 2. The rates paid by the licensee for the use of other patents comparable to the patent in suit. 3. The nature and scope of the license, as exclusive or non- exclusive; or as restricted or non-restricted in terms of territory or with respect to whom the manufactured product may be sold. 4. The licensor’s established policy and marketing program to maintain his patent monopoly by not licensing others to use the invention or by granting licenses under special conditions designed to preserve that monopoly. 5. The commercial relationship between the licensor and licensee, such as, whether they are competitors in the same territory in the same line of business; or whether they are inventor and promoter. 6. The effect of selling the patented specialty in promoting sales of other products of the licensee; that existing value of the invention to the licensor as a generator of sales of his non-patented items; and the extent of such derivative or convoyed sales. 7. The duration of the patent and the term of the license. 8. The established profitability of the product made under the patent; its commercial success; and its current popularity. 9. The utility and advantages of the patent property over the old modes or devices, if any, that had been used for working out similar results. 10. The nature of the patented invention; the character of the commercial embodiment of it as owned and produced by the licensor; and the benefits to those who have used the invention. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 13 of 49 Page ID #:14817 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW 11. The extent to which the infringer has made use of the invention; and any evidence probative of the value of that use. 12. The portion of the profit or of the selling price that may be customary in the particular business or in comparable businesses to allow for the use of the invention or analogous inventions. 13. The portion of the realizable profit that should be credited to the invention as distinguished from non-patented elements, the manufacturing process, business risks, or significant features or improvements added by the infringer. 14. The opinion testimony of qualified experts. 15. The amount that a licensor (such as the patentee) and a licensee (such as the infringer) would have agreed upon (at the time the infringement began) if both had been reasonably and voluntarily trying to reach an agreement; that is, the amount which a prudent licensee— who desired, as a business proposition, to obtain a license to manufacture and sell a particular article embodying the patented invention— would have been willing to pay as a royalty and yet be able to make a reasonable profit and which amount would have been acceptable by a prudent patentee who was willing to grant a license. Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970); Minks v. Polaris Industries, Inc., 546 F.3d 1364, 1372 (Fed. Cir. 2008) (acknowledging widespread use of Georgia-Pacific factors). Nichia bears the burden of proving the correct amount of damages in the form of a reasonable royalty by a preponderance of the evidence. SmithKline Diagnostics, Inc. v. Helena Laboratories Corp., 926 F.2d 1161, 1164 (Fed. Cir. 1991) (“We agree with the district court that the amount of a prevailing party’s damages is a finding of fact on which the plaintiff bears the burden of proof by a preponderance of the evidence.”). Finally, 35 U.S.C. § 284 provides that “the court may increase the damages up to three times the amount found or assessed.” The Supreme Court has held that culpability for enhanced damages must “generally [be] measured against the knowledge of the actor at the time of the challenged conduct.” Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923, 1933 (2016). This must go “beyond typical Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 14 of 49 Page ID #:14818 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -9- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW infringement” and instead be limited to those “egregious cases of misconduct.” Id. at 1935; N.D. Cal. Model Patent Jury Instruction 3.8. It is well established that a prerequisite to a finding of willful infringement is that the accused infringer have knowledge of the patent. State Indus., Inc. v. A.O. Smith Corp., 751 F.2d 1226, 1236 (Fed. Cir. 1985) (“To willfully infringe a patent, the patent must exist and one must have knowledge of it.”). Even following the Supreme Court’s decision in Halo, “[k]nowledge of the patent alleged to be willfully infringed continues to be a prerequisite to enhanced damages.” WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016) (citing Halo, 136 S. Ct. at 1932-33). The plaintiff bears the burden of proving willfulness by a preponderance of evidence. Halo, 136 S. Ct. at 1934. C. Brief Description of Key Evidence in Opposition to Nichia’s Claims 1. Non-Infringement of U.S. Patent No. 7,855,092 VIZIO has not infringed the ‘092 patent for at least the following reasons. First, the products that Nichia has accused of infringing the ‘092 patent do not perform the function required for the “control unit” as recited in claim 1. The parties agree that the “control unit” limitation is written in means-plus-function form and subject to 35 U.S.C. § 112 ¶ 6. The claimed function for the “control unit” is “converting an input to pulse signals.” Nichia has alleged that the accused products perform the claimed function because they allegedly convert “image data” stored in RAM to “pulse signals” output from a control chip.2 Nichia has failed to demonstrate that the accused products perform this function, and the evidence shows that they do not. The evidence includes at least the following:  Testimony from VIZIO’s Vice President of Product Management, John Hwang, concerning the operation of the accused products and the fact that 2 As set forth below, VIZIO contends that the ‘092 patent specification does not disclose corresponding structure and the claim is indefinite and therefore invalid. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 15 of 49 Page ID #:14819 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -10- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW they use a software algorithm to determine which portions of the display should be darkened, not a conversion of input image data to pulse signals;  Testimony from VIZIO’s technical expert concerning the operation of the accused products and the fact that they use a software algorithm to determine which portions of the display should be darkened, not a conversion of input image data to pulse signals;  Testimony from Nichia’s technical expert concerning his failure to identify any feature or functionality in the accused products that converts image data to pulse signals; and  Testing data from Insight Analytics Laboratory (“IAL”). See e.g., Hwang Dep. Tr. at 55:3-18; Karlicek Report at ¶¶ 911-917; Wetzel Infringement Report at ¶¶ 250-260. Second, the products that Nichia has accused of infringing the ‘092 patent do not include the structure that Nichia contends is required for the “control unit” limitation recited in claim 1.3 Nichia has proposed that the corresponding structure for the “control unit” limitation is a tone control circuit that retrieves image data from RAM and computes the duration of lighting the light emitting diodes of an LED display device, then outputs pulse signals for turning on and off the LEDs. Nichia has failed to demonstrate that the accused products include a “tone control circuit” that “retrieves data from RAM,” “computes the duration of lighting LEDs,” and “outputs pulse signals for turning on and off the LEDs.” The evidence shows that these aspects of Nichia’s proposed corresponding structure are not present in the accused products. The evidence includes at least the following: 3 As set forth in Section I.C(2) below, VIZIO contends that the specification does not disclose corresponding structure for the claimed function, and therefore the “control unit” limitation renders the asserted claims indefinite. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 16 of 49 Page ID #:14820 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -11- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW  Testimony from John Hwang concerning the operation of the accused products and the fact that they do not retrieve image data from RAM or compute the duration of lighting LEDs;  Testimony from VIZIO’s technical expert concerning the operation of the accused products and the fact that they do not include a “tone control circuit” that retrieves image data from RAM or compute the duration of lighting LEDs;  Testimony from Nichia’s technical expert concerning his failure to identify any feature or functionality in the accused products that is a “tone control circuit” that “retrieves data from RAM,” “computes the duration of lighting LEDs,” and “outputs pulse signals for turning on and off the LEDs”; and  Testing data from IAL. See e.g., Hwang Dep. Tr. at 55:3-18; Karlicek Report at ¶¶ 911-917; Wetzel Infringement Report at ¶¶ 250-260. Third, Nichia has not proven that VIZIO directly infringes the claims of the ‘092 patent. For example, Nichia’s evidence of alleged infringement for the “control unit” limitation relies on (1) a user manually changing a brightness setting on the television or (2) a user inputting a PowerPoint display into an HDMI input of the television. Nichia has not demonstrated that VIZIO uses the accused products in this manner, or that the televisions perform in this manner during their normal operation. See e.g., Karlicek Report at ¶¶ 902-910. Fourth, claim 1 of the ‘092 patent requires “a phosphor capable of absorbing a part of the blue color light and emitting a light having longer wavelength than the blue color light,” and “the blue color light and the light from said phosphor being mixed to make the white-color.” Nichia has taken the position that, in order to meet this requirement, the phosphor must emit yellow light. The phosphor in the LEDs in the Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 17 of 49 Page ID #:14821 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -12- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW accused products do not meet this requirement because they emit red or green light, not yellow light. The evidence supporting this defense includes at least the following:  Testimony from VIZIO’s technical expert explaining that the phosphors in the accused products emit red and green light;  Testimony from Nichia’s technical expert explaining that the phosphors in the accused products emit red and green light;  Testing data from IAL and Nichia demonstrating that the phosphors in the accused products emit red and green light. See e.g., Karlicek Report at ¶¶ 918-935. 2. Invalidity of U.S. Patent No. 7,855,092 In addition to not infringing the ‘092 patent, VIZIO will also show that Nichia’s infringement claims fail because the ‘092 patent is invalid under at least 35 U.S.C. §§ 103 and 112. First, claims 1 and 12 of the ‘092 patent are invalid as indefinite under 35 U.S.C. § 112 ¶ 2 because the term “control unit” is written in means-plus-function form and subject to 35 U.S.C. § 112 ¶ 6, but the patent specification fails to disclose corresponding structure for performing the claimed function of “converting an input to pulse signals.” The evidence supporting this defense includes at least the following:  Figure 10 and column 20, line 63 through column 22, line 45 of the ‘092 patent (which Nichia relies on) fail to disclose adequate structure for performing the claimed function of “converting an input to pulse signals”; and  Testimony from VIZIO’s technical expert concerning the knowledge of a person of ordinary skill in the art at the time of the alleged invention and the lack of structure disclosed in the patent specification. Second, claims 1 and 12 of the ‘092 patent are invalid for lack of enablement under 35 U.S.C. § 112 ¶ 1 because the specification does not enable the full scope of the claimed invention. The specification and witness testimony confirms that the Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 18 of 49 Page ID #:14822 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -13- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW inventors developed a white LED using only YAG:Ce phosphor; however, the claims are broader and cover a white LED using any phosphor that partially absorbs blue light and emits light having a longer wavelength (claim 1) or any phosphor that partially absorbs blue light and emits light having a longer wavelength and includes a garnet structure activated with cerium (claim 12). These claims cover phosphors other than YAG:Ce, but the specification does not provide a disclosure that enables the use of these other phosphors. The evidence supporting this defense includes at least the following:  The specification of the ‘092 patent at Table 1 and columns 25-30;  Testimony from VIZIO’s technical expert concerning the scope of the claimed invention and the knowledge of a person having ordinary skill in the art at the time of the alleged invention;  Testimony from Nichia’s technical expert concerning the scope of the claimed invention and his opinion that it covers phosphors other than YAG:Ce; and  Testimony from the named inventors of the ‘092 patent concerning the scope of the claimed invention and the alleged invention of the ‘092 patent, including the fact that phosphors other than YAG:Ce did not work. See e.g., Karlicek Report at ¶¶ 756-772; Moriguchi Dep. Tr. at 98:17-22. Third, claims 1 and 12 of the ‘092 patent are invalid for lack of enablement under 35 U.S.C. § 112 ¶ 1 because the specification does not enable the use of control unit and driver circuitry to deliver pulse signals to a phosphor-based LED. Nichia and its technical expert have taken the position that a person of ordinary skill in the art would have used constant current to drive phosphor-based LEDs, and would have encountered difficulties in doing so. Under this theory, the specification does not provide an enabling disclosure because it does not teach a person of ordinary skill in the art how to overcome these alleged difficulties and make and use pulse signals to adjust the brightness of a phosphor-based LED. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 19 of 49 Page ID #:14823 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -14- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW The evidence supporting this defense includes at least the following:  Figure 10 and column 20, line 63 through column 22, line 45 of the specification of the ‘092 patent;  Testimony from VIZIO’s technical expert concerning the scope of the claimed invention and the knowledge of a person having ordinary skill in the art at the time of the alleged invention;  Testimony from Nichia’s technical expert concerning the scope of the claimed invention and his opinion that a person of ordinary skill in the art would have encountered difficulties in using pulse signals to drive phosphor-based LEDs; and  Testimony from the named inventors of the ‘092 patent concerning the scope of the claimed invention and the use of pulse width modulation to drive phosphor-based LEDs. See e.g., Karlicek Report at ¶¶ 773-777. Fourth, as set forth in Section I.F.5 below, Nichia is collaterally estopped from disputing issues that were decided in Everlight v. Nichia, including that the subject matter of claims 2, 3, and 5 of U.S. Patent No. 5,998,925, and claims 2, 14, and 19 of U.S. Patent No. 7,531,960 would have been obvious to a person of ordinary skill in the art at the time of the alleged invention. As the Court explained in its order on VIZIO’s motion for summary judgment, “[t]he Federal Circuit’s decision in Everlight addresses a plethora of issues related to the asserted claims in this action and will no doubt have an effect on the ultimate question of the validity of the Asserted Patents when that issue comes before the Court.” Dkt. 105 at 19. The Court determined that “Everlight cannot serve as the sole basis for invalidating separate patent claims with limitations that were never addressed or are not substantially similar to the claim limitations at issue in the Everlight action,” but explained that “VIZIO is free to argue that these new limitations do nothing to change the obviousness outcome affirmed by the Federal Circuit.” Id. The evidence shows that the new limitations in claims 1 and 12 of the ‘092 patent Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 20 of 49 Page ID #:14824 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -15- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW simply describe a routine, well-known application of LEDs, and therefore do not save the claims from the obviousness determination in Everlight. Id. at 12. See e.g., Karlicek Report at ¶¶ 783-784. Fifth, claims 1 and 12 of the ‘092 patent are invalid as obvious under 35 U.S.C. § 103 based on prior art teachings. Each of the elements recited in these claims— namely, a blue InGaN LED chip, a phosphor that partially absorbs blue light and emits light having a longer wavelength, and a control unit and driver to change the brightness of the LED via pulse signals—was known in the prior art before the alleged invention. A person of ordinary skill in the art at the time of the alleged invention would have had a significant motivation to combine these elements, with a reasonable expectation of success in achieving the claimed invention. Nichia’s alleged evidence of secondary considerations does not demonstrate that the claims would not have been obvious. In addition to the decision in Everlight, the evidence supporting this defense includes at least the following:  U.S. Patent No. 6,600,175 to Baretez;  JP Patent Pub. No. 07-176794 to Shimizu;  JP Patent Pub. No. H08-7614 to Shimizu;  U.S. Patent No. 3,699,478 to Pinnow;  U.S. Patent No. 4,024,070 to Schuil;  U.S. Patent No. 5,796,376 to Banks;  U.S. Patent No. 4,727,283 to van Kemenade;  Pinnow et al., Photoluminescent Conversion of Laser Light for Black and White and Multicolor Displays, Applied Optics, Vol. 10, No. 1 (1971);  J.M. Robertson et al., Colourshift of the CE3+ Emission in Monocrystalline Epitaxially Grown Garnet Layers, Philips J. Res. 36 (1981); Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 21 of 49 Page ID #:14825 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -16- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW  L.G. Van Uitert et al., “Photoluminescent Conversion of Laser Light for Black and White and Multicolor Displays. 1: Materials” Applied Optics Vol. 10, No. 1 (1971);  M.V. Hoffman, “Improved Color Rendition in High Pressure Mercury Vapor Lamps,” Journal of the Illuminating Engineering Society, Vol. 6, No. 2 (1977);  G. Blasse et al., “Luminescent Materials,” Springer-Verlag (1994)  S. Nakamura et al., “High-Power InGaN Single-Quantum-Well-Structure Blue and Violet Light-Emitting Diodes,” Applied Physics Letters 67, 1868 (1995);  Schlotter et al., Luminescence Conversion of Blue Light Emitting Diodes, Applied Physics A 64, 417-18 (Feb. 27, 1997);  Rossotti, Colour, Why the World Isn’t Grey, Princeton Science Library (1985);  Gage, Optoelectronics Applications Manual, McGraw Hill (1977);  Testimony from VIZIO’s technical expert and other evidence that demonstrates the combination of Baretz, Hoffman, and Banks renders obvious the asserted claims, including that a person of ordinary skill in the art at the time of the alleged invention would have had a significant motivation to combine these references to meet the claimed elements, with a reasonable expectation of success in achieving the claimed invention;  Testimony from VIZIO’s technical expert and other evidence that demonstrates the combination of Baretz, Pinnow, and Banks renders obvious the asserted claims, including that a person of ordinary skill in the art at the time of the alleged invention would have had a significant motivation to combine these references to meet the claimed elements, with a reasonable expectation of success in achieving the claimed invention; Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 22 of 49 Page ID #:14826 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -17- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW  Testimony from VIZIO’s technical expert and other evidence that demonstrates the combination of Shimizu ‘614, Nakamura, Hoffman, and Banks renders obvious the asserted claims, including that a person of ordinary skill in the art at the time of the alleged invention would have had a significant motivation to combine these references to meet the claimed elements, with a reasonable expectation of success in achieving the claimed invention;  Testimony from VIZIO’s technical expert and other evidence that demonstrates the combination of Shimizu ‘614, Nakamura, Pinnow, and Banks renders obvious the asserted claims, including that a person of ordinary skill in the art at the time of the alleged invention would have had a significant motivation to combine these references to meet the claimed elements, with a reasonable expectation of success in achieving the claimed invention;  Testimony from VIZIO’s technical expert and other evidence that demonstrates Nichia’s alleged evidence of secondary considerations does not render the claims non-obvious;  Testimony from the named inventors concerning the obviousness of the claimed invention, including the fact that using the control and driver circuitry was simple and routine; and  Additional prior art, technical documentation, and witness testimony concerning the state of the art at the time of the alleged invention, rationales for combining the prior art, and secondary considerations of obviousness. See e.g., Karlicek Report at ¶¶ 556-755. 3. Non-Infringement of U.S. Patent No. 8,309,375 VIZIO also does not infringe the ‘375 patent. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 23 of 49 Page ID #:14827 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -18- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW First, Nichia has failed to meet its burden of its proof with respect to showing that VIZIO practices all steps of the method asserted in claim 4. Nichia has provided no evidence of the manufacturing steps used for the LEDs present in the products accused of infringement. For example, Nichia has failed to demonstrate that any manufacturer of these LEDs selects the content of a phosphor in order to achieve a desired chromaticity of white color light or that the selection of phosphor is controlled based on an emission wavelength of said light emitting component. Having failed to put forth any such evidence of the manufacturing method for the LEDs in the accused products, Nichia has failed to meet its burden of proof on infringement for claim 4.4 Evidence supporting this defense includes at least the following:  Testimony from Nichia’s technical expert demonstrating that he has failed to show the LEDs in the accused products are manufactured using the method of manufacturing recited in claim 4, including at least the step of selecting a content of phosphor based on the emission wavelength of the blue LED chip and selecting a content of phosphor to achieve a desired chromaticity;  Testimony from VIZIO’s technical expert that LEDs such as those in the accused products are not typically manufactured using the method of 4 Nor is Nichia entitled to the burden-shifting presumption that the accused LEDs were manufactured using the patented process, as described in 35 U.S.C. § 295. Section 295 requires (1) that there be a substantial likelihood that the LEDs in the accused products were made by the claimed process, and (2) that Nichia made a reasonable effort to determine the process actually used in the production of the LEDs and was unable to do so. Initially, VIZIO has already identified multiple reasons why there is no “substantial likelihood” that the LEDs at issue were manufactured using the claimed method. See Dkt. 179-1 at 15-18. Furthermore, there is no evidence that Nichia made a “reasonable effort” to determine the process used to manufacture the LEDs, as Nichia failed to seek discovery from manufacturers themselves and failed to have its testing expert make any determinations as to how the LEDs were manufactured. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 24 of 49 Page ID #:14828 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -19- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW manufacturing recited in claim 4, including at least the step of selecting a content of phosphor based on the emission wavelength of the blue LED chip and selecting a content of phosphor to achieve a desired chromaticity;  Testing data from IAL demonstrating its failure to identify the method of manufacturing the LEDs in the accused products; and  Deposition testimony from IAL demonstrating its failure to identify the method of manufacturing the LEDs in the accused products. See e.g., Karlicek Report at ¶¶ 790-801. Second, the LEDs in the accused products do not meet the requirement of “wherein a chromaticity point of the white color light is on a straight line connecting a point of chromaticity of the blue color light and a point of chromaticity of the yellow color light.” Nichia’s testing evidence demonstrates that the chromaticity point of the overall LED does not lie on a straight line connecting the chromaticity point for the chip in the LED and the chromaticity point for the phosphor(s) in the LED. The evidence supporting this defense includes at least the following:  Testimony from VIZIO’s technical expert plotting the chromaticity point for the LEDs in the accused products against the chromaticity points for the LED chip and phosphor;  Testimony from Nichia’s technical expert plotting the chromaticity point for the LEDs in the accused products against the chromaticity points for the LED chip and phosphor; and  Testing data from IAL demonstrating the chromaticity point for the LEDs, chips, and phosphors in the accused products; and  Deposition testimony from IAL regarding the chromaticity point for the LEDs, chips, and phosphors in the accused products. See e.g., Appendix E to Wetzel Infringement Report, D24h-C1 at 9, D28h-C1 at 9, D32hn-E1 at 7, D39hn-E0 at 8, D55u-D1 at 21-22, E50-D1 at 8, E55-E1 at 21-22, E60- C3 at 21-23, M43-C1 at 21-23, E60-C3 at 21-23; Karlicek Report at ¶¶ 802-899. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 25 of 49 Page ID #:14829 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -20- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW Third, claim 4 of the ‘375 patent requires “preparing a phosphor capable of absorbing a part of the blue color light emitted from said light emitting component and emitting a yellow color light” and “a peak wavelength existing around the range from 530 to 570 nm.” The phosphor in the LEDs in the accused products do not meet this requirement because they emit red or green light, not yellow light. Moreover, Nichia has failed to demonstrate that any phosphors in the LEDs emit light having “a peak wavelength existing around the range from 530 to 570 nm.” The evidence supporting this defense includes at least the following:  Testimony from VIZIO’s technical expert explaining that the phosphors in the accused products emit red and green light at certain wavelengths;  Testimony from Nichia’s technical expert explaining that the phosphors in the accused products emit red and green light at certain wavelengths;  Testing data from IAL and Nichia demonstrating that the phosphors in the LEDs in the accused products emit red and green light, and demonstrating that IAL did not measure the emission spectrum for individual phosphors. See e.g., Karlicek Report at ¶¶ 802-899. 4. Invalidity of U.S. Patent No. 8,309,375 In addition to not infringing the ‘375 patent, VIZIO will also show that Nichia’s infringement claims fail because the ‘375 patent is invalid under at least 35 U.S.C. §§ 103 and 112. First, claim 4 of the ‘375 patent is invalid as indefinite under 35 U.S.C. § 112 ¶ 2 because a person of ordinary skill in the art at the time of the alleged invention would not have reasonable certainty concerning the scope and meaning of the terms “broad emission spectrum” and “existing around the range from 530 to 570 nm.” The evidence supporting this defense includes at least the following:  The specification of the ‘375 patent, including Figures 3-5, 18-23, and the accompanying disclosure; and Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 26 of 49 Page ID #:14830 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -21- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW  Testimony from VIZIO’s technical expert concerning the scope of claim 4 and the knowledge of a person or ordinary skill in the art at the time of the alleged invention. See e.g., Karlicek Report at ¶¶ 551-555. Second, claim 4 of the ‘375 patent is invalid for lack of enablement under 35 U.S.C. § 112 ¶ 1 because the specification does not enable the full scope of the claimed invention. The specification and witness testimony confirms that the inventors developed a white LED using only YAG:Ce phosphor; however, the asserted claim is broader and covers a white LED using any phosphor that emits yellow light and comprises a peak wavelength existing around the range from 530 to 570 nm and a tail continuing beyond 700 nm. The claim covers phosphors other than YAG:Ce, but the specification does not provide a disclosure that enables the use of these other phosphors. The evidence supporting this defense includes at least the following:  The specification of the ‘375 patent at Table 1 and columns 25-30;  Testimony from VIZIO’s technical expert concerning the scope of the claimed invention and the knowledge of a person having ordinary skill in the art at the time of the alleged invention;  Testimony from Nichia’s technical expert concerning the scope of the claimed invention and his opinion that it covers phosphors other than YAG:Ce; and  Testimony from the named inventors of the ‘375 patent concerning the scope of the claimed invention and the alleged invention of the ‘375 patent, including the fact that phosphors other than YAG:Ce did not work. See e.g., Karlicek Report at ¶¶ 534-550; Moriguchi Dep. Tr. at 98:17-22. Third, as set forth in Section I.F.5 below, Nichia is collaterally estopped from disputing issues that were decided in Everlight v. Nichia, including that the subject matter of claims 2, 3, and 5 of U.S. Patent No. 5,998,925, and claims 2, 14, and 19 of U.S. Patent No. 7,531,960 would have been obvious to a person of ordinary skill in the Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 27 of 49 Page ID #:14831 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -22- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW art at the time of the alleged invention. As the Court explained in its order on VIZIO’s motion for summary judgment, “[t]he Federal Circuit’s decision in Everlight addresses a plethora of issues related to the asserted claims in this action and will no doubt have an effect on the ultimate question of the validity of the Asserted Patents when that issue comes before the Court.” Dkt. 105 at 19. The Court determined that “Everlight cannot serve as the sole basis for invalidating separate patent claims with limitations that were never addressed or are not substantially similar to the claim limitations at issue in the Everlight action,” but explained that “VIZIO is free to argue that these new limitations do nothing to change the obviousness outcome affirmed by the Federal Circuit.” Id. The evidence shows that any new limitations in claim 4 of the ‘375 patent were taught in the same prior art that invalidated the Everlight claims, and therefore do not save the claims from the obviousness determination in Everlight. See e.g., Karlicek Report at ¶¶ 781-782. Fourth, claim 4 of the ‘375 patent is invalid as obvious under 35 U.S.C. § 103. Each of the elements recited in these claims—namely, a method of manufacturing a white light LED that includes preparing a blue InGaN LED chip, preparing a yellow phosphor, and selecting the content of phosphor based on the wavelength of the blue LED chip and to obtain a desired chromaticity of white color light—was known in the prior art before the alleged invention. A person of ordinary skill in the art at the time of the alleged invention would have had a significant motivation to combine these elements, with a reasonable expectation of success in achieving the claimed invention. Nichia’s alleged evidence of secondary considerations does not demonstrate that the claims would not have been obvious. In addition to the decision in Everlight, the evidence supporting this defense includes at least the following:  U.S. Patent No. 6,600,175 to Baretz;  JP Patent Pub. No. 07-176794 to Shimizu;  JP Patent Pub. No. H08-7614 to Shimizu;  U.S. Patent No. 3,699,478 to Pinnow; Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 28 of 49 Page ID #:14832 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -23- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW  U.S. Patent No. 4,024,070 to Schuil;  U.S. Patent No. 4,727,283 to van Kemenade;  Pinnow et al., Photoluminescent Conversion of Laser Light for Black and White and Multicolor Displays, Applied Optics, Vol. 10, No. 1 (1971);  J.M. Robertson et al., Colourshift of the CE3+ Emission in Monocrystalline Epitaxially Grown Garnet Layers, Philips J. Res. 36 (1981);  L.G. Van Uitert et al., “Photoluminescent Conversion of Laser Light for Black and White and Multicolor Displays. 1: Materials” Applied Optics Vol. 10, No. 1 (1971);  M.V. Hoffman, “Improved Color Rendition in High Pressure Mercury Vapor Lamps,” Journal of the Illuminating Engineering Society, Vol. 6, No. 2 (1977);  G. Blasse et al., “Luminescent Materials,” Springer-Verlag (1994);  S. Nakamura et al., “High-Power InGaN Single-Quantum-Well-Structure Blue and Violet Light-Emitting Diodes,” Applied Physics Letters 67, 1868 (1995);  Schlotter et al., Luminescence Conversion of Blue Light Emitting Diodes, Applied Physics A 64, 417-18 (Feb. 27, 1997);  Rossotti, Colour, Why the World Isn’t Grey, Princeton Science Library (1985);  Testimony from VIZIO’s technical expert and other evidence that demonstrates the combination of Baretz and Hoffman renders obvious the asserted claims, including that a person of ordinary skill in the art at the time of the alleged invention would have had a significant motivation to combine these references to meet the claimed elements, with a reasonable expectation of success in achieving the claimed invention; Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 29 of 49 Page ID #:14833 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -24- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW  Testimony from VIZIO’s technical expert and other evidence that demonstrates the combination of Baretz and Pinnow renders obvious the asserted claims, including that a person of ordinary skill in the art at the time of the alleged invention would have had a significant motivation to combine these references to meet the claimed elements, with a reasonable expectation of success in achieving the claimed invention;  Testimony from VIZIO’s technical expert and other evidence that demonstrates the combination of Shimizu ‘614, Nakamura, and Hoffman renders obvious the asserted claims, including that a person of ordinary skill in the art at the time of the alleged invention would have had a significant motivation to combine these references to meet the claimed elements, with a reasonable expectation of success in achieving the claimed invention;  Testimony from VIZIO’s technical expert and other evidence that demonstrates the combination of Shimizu ‘614, Nakamura, and Pinnow renders obvious the asserted claims, including that a person of ordinary skill in the art at the time of the alleged invention would have had a significant motivation to combine these references to meet the claimed elements, with a reasonable expectation of success in achieving the claimed invention;  Testimony from VIZIO’s technical expert and other evidence that demonstrates Nichia’s alleged evidence of secondary considerations does not render the claims non-obvious;  Testimony from the named inventors concerning the obviousness of the claimed invention, including the fact that Nichia’s products do not practice the ‘375 patent and none of Nichia’s evidence discusses the method of manufacturing an LED; and Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 30 of 49 Page ID #:14834 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -25- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW  Additional prior art, technical documentation, and witness testimony concerning the state of the art at the time of the alleged invention, rationales for combining the prior art, and secondary considerations of obviousness. See e.g., Karlicek Report at ¶¶ 160-533. 5. Damages for the Alleged Infringement Nichia’s theory of damages is deeply flawed and substantially inflates the amount of the potential damages award. Nichia’s damages expert, John Jarosz, opines that if both the ‘092 and ‘375 patents are found valid and infringed, the jury should award approximately $2.7 million in damages. Mr. Jarosz also contends that Nichia should be entitled to an additional $ for defending against IPR petitions filed by VIZIO. But this theory of damages fails to account for at least the facts that:  Mr. Jarosz erroneously included in his calculations damages for a product that Nichia originally accused of infringing the ‘092 patent but later dropped;  Mr. Jarosz selected a legally improper royalty base for the ‘092 patent that purportedly relies on the smallest salable patent practicing unit (“SSPPU”) but significantly overstates the scope of the claim by including components not covered by that claim. In particular, Mr. Jarosz relies on the costs for the backlight system, control unit and driver as his SSPPU, but the claim recites only an LED, control unit, and driver;5 5 VIZIO has moved to exclude this theory of damages as legally impermissible under Daubert. See Dkt. 176. While VIZIO maintains its position that this theory of damages is subject to exclusion under Daubert, to the extent VIZIO’s motion is denied, VIZIO will also make this argument to fact-finder. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 31 of 49 Page ID #:14835 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -26- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW  Mr. Jarosz ignored substantial evidence from both parties’ prior licenses indicating that the parties would have agreed to a royalty rate significantly lower than the rates proposed by Mr. Jarosz;  Mr. Jarosz’s contention that Nichia is entitled to IPR defense costs under 35 U.S.C. § 284 has no legal support. Moreover, Mr. Jarosz provides no explanation why such defense costs are even reasonable, instead relying only on what he was told by Nichia’s counsel. See e.g., Bakewell Report at ¶235, Exs. 1.0 & 1.1. With these adjustments applied, Nichia would be entitled to, at most, approximately $350,000. See e.g., Bakewell Report at ¶235, Exs. 1.0 & 1.1. This conclusion is supported by at least Nichia’s and VIZIO’s prior patent licenses, VIZIO’s financial documentation, and the opinions of VIZIO’s damages expert, Chris Bakewell. Additionally, to the extent that Nichia alleges that damages should be enhanced under 35 U.S.C. § 284, that contention fails for several reasons. Initially, Nichia has failed to timely disclose this contention in discovery either by way of its written discovery responses or in its expert reports and should not be permitted to raise such a contention now on the eve of trial. Nichia has not alleged (let alone shown) that VIZIO’s conduct prior to the expiration of the patents was the sort of “egregious, willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, or flagrant behavior” that merits enhanced damages. Moreover, even if Nichia had timely made such an allegation, there is no basis to award enhanced damages under the facts of this case. It is undisputed that VIZIO had no pre-suit knowledge of the asserted patents. Furthermore, VIZIO became aware of the Everlight litigation shortly after Nichia brought suit, where closely related patents from the same family were asserted by Nichia and subsequently invalidated in light of the prior art. The asserted claims recite, at most, only minor differences over the claims found obvious by the jury in Everlight and affirmed on appeal by the Federal Circuit. In light of the Everlight verdict, VIZIO had a good faith basis to believe that the Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 32 of 49 Page ID #:14836 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -27- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW asserted claims were invalid and therefore did not act with “egregious, willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, or flagrant behavior.” Additionally, the fact that the Court invalidated two other closely related patents in connection with claim construction in this case further demonstrates that VIZIO had a good faith basis to believe the asserted claims were invalid. Furthermore, VIZIO’s good faith basis for believing that the asserted claims are invalid was demonstrated by its actions throughout this case. Evidence supporting these positions will be presented through the testimony of VIZIO’s technical expert witness, VIZIO’s fact witnesses (including Ken Lowe and John Hwang), and documents produced by VIZIO related to the Everlight litigation. D. Summary of VIZIO’s Counterclaims & Affirmative Defenses 1. Non-Infringement of U.S. Patent No. 7,855,092 VIZIO has raised the affirmative defense that it does not infringe the ‘092 patent at least for the reasons set forth above in Section I.C(1). 2. Invalidity of U.S. Patent No. 7,855,092 VIZIO has raised the affirmative defense that the ‘092 patent is invalid under 35 U.S.C. §§ 101, 102, 103, and/or 112 at least for the reasons set forth above in Section I.C(2). VIZIO has also counterclaimed for a declaratory judgment that the ‘092 patent is invalid under 35 U.S.C. §§ 101, 102, 103, and/or 112. 3. Non-Infringement of U.S. Patent No. 8,309,375 VIZIO has raised the affirmative defense that it does not infringe the ‘375 patent at least for the reasons set forth above in Section I.C(3). 4. Invalidity of U.S. Patent No. 8,309,375 VIZIO has raised the affirmative defense that the ‘375 patent is invalid under 35 U.S.C. §§ 101, 102, 103, and/or 112 at least for the reasons set forth above in Section I.C(4). VIZIO has also counterclaimed for a declaratory judgment that the ‘375 patent is invalid under 35 U.S.C. §§ 101, 102, 103, and/or 112. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 33 of 49 Page ID #:14837 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -28- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW 5. Collateral Estoppel VIZIO has raised the affirmative defense that Nichia’s claims are barred under the doctrine of collateral estoppel based on the judgment of invalidity entered in Everlight Electronics Co., Ltd. v. Nichia Corp., No. 4:12-cv-11758 (E.D. Mich.) and affirmed by the Federal Circuit in Everlight Electronics Co., Ltd. v. Nichia Corp., No. 2016-1577 (Fed. Cir.). Indeed, at least for the reasons set forth below in Section I.F(5), Nichia should be estopped from re-litigating at least the following issues: Resolved Issue 1. The combination of an indium gallium nitride blue LED chip and blue-to-yellow YAG phosphor to produce white light—the subject matter of the ’925 and ’960 Patents—was obvious to person of ordinary skill in the art at the time of the alleged inventions. Resolved Issue 2. A person of ordinary skill at the time of invention would have been motivated to combine YAG phosphor with a blue LED chip to produce white light and would have had a reasonable expectation of success in doing so. Resolved Issue 3. A person of ordinary skill in the art would have considered prior art outside the field of LEDs in evaluating useful phosphors to combine with a blue LED chip, i.e., the scope of analogous art is not limited to the field of LEDs. Resolved Issue 4. Evidence of secondary considerations related to a white LED that uses a blue LED chip in combination with YAG phosphor does not overcome the determination of obviousness of combining a blue LED with a YAG phosphor to make white light. 6. License & Exhaustion VIZIO has raised the affirmative defense that Nichia’s claims are limited under the doctrines of license and exhaustion. As set forth in greater detail below, at least one of the models that Nichia has accused of infringement contains LEDs manufactured by an entity that has entered into a patent license with Nichia. Thus, Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 34 of 49 Page ID #:14838 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -29- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW Nichia is barred under the doctrines of license and/or exhaustion from seeking a further recovery. E. Elements Required to Establish VIZIO’s Counterclaims & Affirmative Defenses 1. Non-Infringement of U.S. Patent No. 7,855,092 As set forth above, it is Nichia’s burden to prove that the accused products meet each limitation of each asserted claim of the ‘092 patent. Accordingly, to the extent Nichia fails to prove such facts by a preponderance of the evidence, VIZIO has established its defense of non-infringement. Furthermore, as set forth above in Section I.(C)(1), VIZIO has identified and will present to the jury multiple reasons why Nichia’s infringement allegations must fail. 2. Invalidity of U.S. Patent No. 7,855,092 “A party challenging the validity of a patent bears the burden of proving invalidity by clear and convincing evidence.” Voda v. Cordis Corp., 536 F.3d 1311, 1322 (Fed. Cir. 2008). (a) Invalidity under 35 U.S.C. § 103 “A patent for a claimed invention may not be obtained . . . if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.” 35 U.S.C. § 103. In other words, “[a]n invention which has been made, and which is new in the sense that the same thing has not been made before, may still not be patentable if the difference between the new thing and what was known before is not considered sufficiently great to warrant a patent . . . If this difference is such that the subject matter as a whole would have been obvious at the time to a person skilled in the art, then the subject matter cannot be patented.” Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 14 (1966); N.D. Cal. Model Patent Jury Instruction B.4.3. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 35 of 49 Page ID #:14839 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -30- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW “Obviousness under 35 U.S.C. § 103(a) is ultimately a legal question, based on underlying factual determinations. The factual determinations underpinning the legal conclusion of obviousness include 1) the scope and content of the prior art, 2) the level of ordinary skill in the art, 3) the differences between the claimed invention and the prior art, and 4) evidence of secondary factors, also known as objective indicia of non- obviousness.” Eisai Co. Ltd. v. Dr. Reddy’s Laboratories, Ltd., 533 F.3d 1353, 1356 (Fed. Cir. 2008); N.D. Cal. Model Patent Jury Instruction B.4.3. In addition to these four factual determinations, the fact-finder may also consider “secondary considerations” of non-obviousness including evidence of long-felt need, industry praise, initial skepticism, copying by others, and commercial success. See WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1332-37 (Fed. Cir. 2016); N.D. Cal. Model Patent Jury Instruction B.4.3. However, secondary considerations “are relevant only in a close case where all other proof leaves the question of invention in doubt.” Dow Chem. Co. v. Halliburton Oil Well Cementing Co., 324 U.S. 320, 330 (1945). Moreover, Nichia, as the patentee, “bears the burden of production with respect to evidence of secondary considerations of nonobviousness.” ZUP, LLC v. Nash Manufacturing, Inc., 896 F.3d 1365, 1373 (Fed. Cir. 2018). As set forth in greater detail above in Section I.C(2), VIZIO will demonstrate why the ‘092 patent is invalid as obvious in view of the prior art. (b) Invalidity under 35 U.S.C. § 112 (i) Indefiniteness Paragraph 2 of 35 U.S.C. § 112 states, “The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” Under this requirement, “the language of the claims must make it clear what subject matter they encompass.” PPG Industries, Inc. v. Guardian Industries Corp., 75 F.3d 1558, 1562 (Fed. Cir. 1996). Put differently, Section 112 contains a “requirement for precision and definiteness of claim language.” Id. (emphasis in original). “[A] patent is invalid for indefiniteness if its claims, read in Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 36 of 49 Page ID #:14840 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -31- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898, 901 (2014). For a claim limitation drafted in means-plus-function form pursuant to 35 U.S.C. § 112 ¶ 6, the specification must describe corresponding structure for the claimed function. Ergo Licensing LLC v. CareFusion 303, Inc., 673 F.3d 1361, 1363 (Fed. Cir. 2012). If the specification fails to disclose corresponding structure, then the claim is indefinite pursuant to 35 U.S.C. § 112 ¶ 2. Id. As set forth in greater detail above in Section I.C(2), VIZIO will demonstrate why the ‘092 patent is invalid as indefinite. (ii) Lack of Enablement Paragraph 1 of 35 U.S.C. § 112 states, “The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.” Under this requirement—known as enablement—the specification “must teach those skilled in the art how to make and use the full scope of the claimed invention without undue experimentation.” Harris Corp. v. IXYS Corp., 114 F.3d 1149, 1155 (Fed. Cir. 1997); N.D. Cal. Model Patent Jury Instruction B.4.2b. “A lack of enablement rejection under section 112, ¶ 1 is appropriate where the written description fails to teach those in the art to make and use the invention as broadly as it is claimed without undue experimentation.” In re Cortright, 165 F.3d 1353, 1356 (Fed. Cir. 1999). As set forth in greater detail above in Section I.C(2), VIZIO will demonstrate why the ‘092 patent is invalid for lack of enablement. 3. Non-Infringement of U.S. Patent No. 8,309,375 As set forth above, it is Nichia’s burden to prove that the accused products were manufactured in a way that meets each limitation of claim 4 of the ‘375 patent. Accordingly, to the extent Nichia fails to prove such facts by a preponderance of the Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 37 of 49 Page ID #:14841 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -32- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW evidence, VIZIO has established its defense of non-infringement. Furthermore, as set forth above in Section I.(C)(3), VIZIO has identified and will present to the jury multiple reasons why Nichia’s infringement allegations must fail. 4. Invalidity of U.S. Patent No. 8,309,375 “A party challenging the validity of a patent bears the burden of proving invalidity by clear and convincing evidence.” Voda v. Cordis Corp., 536 F.3d 1311, 1322 (Fed. Cir. 2008). (a) Invalidity under 35 U.S.C. § 103 “A patent for a claimed invention may not be obtained . . . if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.” 35 U.S.C. § 103. In other words, “[a]n invention which has been made, and which is new in the sense that the same thing has not been made before, may still not be patentable if the difference between the new thing and what was known before is not considered sufficiently great to warrant a patent . . . If this difference is such that the subject matter as a whole would have been obvious at the time to a person skilled in the art, then the subject matter cannot be patented.” Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 14 (1966). “Obviousness under 35 U.S.C. § 103(a) is ultimately a legal question, based on underlying factual determinations. The factual determinations underpinning the legal conclusion of obviousness include 1) the scope and content of the prior art, 2) the level of ordinary skill in the art, 3) the differences between the claimed invention and the prior art, and 4) evidence of secondary factors, also known as objective indicia of non- obviousness.” Eisai Co. Ltd. v. Dr. Reddy’s Laboratories, Ltd., 533 F.3d 1353, 1356 (Fed. Cir. 2008). In addition to these four factual determinations, the fact-finder may also consider “secondary considerations” of non-obviousness including evidence of long-felt need, Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 38 of 49 Page ID #:14842 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -33- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW industry praise, initial skepticism, copying by others, and commercial success. See WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1332-37 (Fed. Cir. 2016). However, secondary considerations “are relevant only in a close case where all other proof leaves the question of invention in doubt.” Dow Chem. Co. v. Halliburton Oil Well Cementing Co., 324 U.S. 320, 330 (1945). Moreover, Nichia, as the patentee, “bears the burden of production with respect to evidence of secondary considerations of nonobviousness.” ZUP, LLC v. Nash Manufacturing, Inc., 896 F.3d 1365, 1373 (Fed. Cir. 2018). As set forth in greater detail above in Section I.C(4), VIZIO will demonstrate why the ‘375 patent is invalid as obvious in view of the prior art. (b) Invalidity under 35 U.S.C. § 112 (i) Indefiniteness Paragraph 2 of 35 U.S.C. § 112 states, “The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” Under this requirement, “the language of the claims must make it clear what subject matter they encompass.” PPG Industries, Inc. v. Guardian Industries Corp., 75 F.3d 1558, 1562 (Fed. Cir. 1996). Put differently, Section 112 contains a “requirement for precision and definiteness of claim language.” Id. (emphasis in original). “[A] patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898, 901 (2014). For a claim limitation drafted in means-plus-function form pursuant to 35 U.S.C. § 112 ¶ 6, the specification must describe corresponding structure for the claimed function. Ergo Licensing LLC v. CareFusion 303, Inc., 673 F.3d 1361, 1363 (Fed. Cir. 2012). If the specification fails to disclose corresponding structure, then the claim is indefinite pursuant to 35 U.S.C. § 112 ¶ 2. Id. As set forth in greater detail above in Section I.C(4), VIZIO will demonstrate why the ‘375 patent is invalid as indefinite. (ii) Lack of Enablement Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 39 of 49 Page ID #:14843 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -34- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW Paragraph 1 of 35 U.S.C. § 112 states, “The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.” Under this requirement—known as enablement—the specification “must teach those skilled in the art how to make and use the full scope of the claimed invention without undue experimentation.” Harris Corp. v. IXYS Corp., 114 F.3d 1149, 1155 (Fed. Cir. 1997). “A lack of enablement rejection under section 112, ¶ 1 is appropriate where the written description fails to teach those in the art to make and use the invention as broadly as it is claimed without undue experimentation.” In re Cortright, 165 F.3d 1353, 1356 (Fed. Cir. 1999). As set forth in greater detail above in Section I.C(4), VIZIO will demonstrate why the ‘375 patent is invalid as not enabled. 5. Collateral Estoppel Collateral estoppel, also known as issue preclusion, “protects a party from having to litigate issues that have been fully and fairly tried in a previous action and adversely resolved against party-opponent.” Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013) (citing Pharmacia & Upjohn Co. v. Mylan Pharm., Inc., 170 F.3d 1373, 1379 (Fed. Cir. 1999)). While regional circuit law generally governs collateral estoppel, Federal Circuit law governs the application of collateral estoppel to substantive issues of patent law. Ohio Willow Wood, 735 F.3d at 1342. Under Ninth Circuit law, collateral estoppel applies when “(1) the issue at stake is identical to an issue raised in the prior litigation; (2) the issue was actually litigated in the prior litigation; and (3) the determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in the earlier action.” LittleJohn v. United States, 321 F.3d 915, 923 (9th Cir. 2003). Federal Circuit authority is substantively the same, requiring “(1) identity of the issues in a prior proceeding; (2) the issues were actually litigated; (3) the determination of the issues was necessary to Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 40 of 49 Page ID #:14844 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -35- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW the resulting judgment; and (4) the party defending against preclusion had a full and fair opportunity to litigate the issues.” Soverain Software LLC v. Victoria’s Secret Direct Brand Management, LLC, 778 F.3d 1311, 1315 (Fed. Cir. 2015); Chrimar Systems, Inc. v. Foundry Networks, Inc., No. 06-13963, 2010 WL 3431569 (E.D. Mich. Aug. 30, 2010) (applying collateral estoppel to issues underlying a prior jury verdict, such as the teachings of the prior art). As explained below, each of these factors is met and collateral estoppel must therefore apply to issues underlying the jury verdict in Everlight. 6. License & Exhaustion “Patent license agreements allow third party licensees to have partial or complete access to the patented invention by providing immunity from an infringement suit on the licensed patent. A patent license is essentially a waiver of the patent owner’s right to sue; the parties agree that the patent owner will allow the licensee either to make, to use, to sell (or some combination of, or derivative of, these three rights) without subjecting the licensee to an infringement suit. It is thus well settled that a valid license is a complete defense to infringement.” Intel Corp. v. Broadcom Corp., 173 F. Supp.2d 201, 218 (D. Del. 2011). “The right to use, sell, or import an item exists independently of the Patent Act. What a patent adds—and grants exclusively to the patentee—is a limited right to prevent others from engaging in those practices. Exhaustion extinguishes that exclusionary power.” Impression Products, Inc. v. Lexmark Intern., Inc., 137 S.Ct. 1523, 1534 (2017). “Patent exhaustion reflects the principle that, when an item passes into commerce, it should not be shaded by a legal cloud on title as it moves through the marketplace.” Id. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 41 of 49 Page ID #:14845 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -36- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW F. Brief Description of Key Evidence in Support of VIZIO’s Counterclaims & Affirmative Defenses 1. Non-Infringement of U.S. Patent No. 7,855,092 As set forth above, it is Nichia’s burden to prove that the accused products meet each limitation of each asserted claim of the ‘092 patent. Accordingly, to the extent Nichia fails to prove such facts by a preponderance of the evidence, VIZIO has established its defense of non-infringement. Furthermore, as set forth above in Section I.(C)(1), VIZIO has identified and will present to the jury multiple reasons why Nichia’s infringement allegations must fail. 2. Invalidity of U.S. Patent No. 7,855,092 VIZIO has shown and will show at trial that claims 1 and 12 of the ‘092 patent are invalid under at least 35 U.S.C. § 103 and 35 U.S.C. § 112. As set forth above in Section I.(C)(2), VIZIO has identified and will present to the jury multiple reasons why the ‘092 patent is invalid. 3. Non-Infringement of U.S. Patent No. 8,309,375 As set forth above, it is Nichia’s burden to prove that the LEDs present in the accused products were manufactured using the method claimed in claim 4 of the ‘375 patent. Accordingly, to the extent Nichia fails to prove such facts by a preponderance of the evidence, VIZIO has established its defense of non-infringement. Furthermore, as set forth above in Section I.(C)(3), VIZIO has identified and will present to the jury multiple reasons why Nichia’s infringement allegations must fail. 4. Invalidity of U.S. Patent No. 8,309,375 VIZIO has shown and will show at trial that claim 4 of the ‘375 patent is invalid under at least 35 U.S.C. § 103 and 35 U.S.C. § 112. As set forth above in Section I.(C)(4), VIZIO has identified and will present to the jury multiple reasons why the ‘375 patent is invalid. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 42 of 49 Page ID #:14846 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -37- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW 5. Collateral Estoppel Nichia is collaterally estopped from re-litigating any of the issues decided in Everlight Electronics Co., Ltd. v. Nichia Corp., No. 4:12-cv-11758 (E.D. Mich.) and/or affirmed by the Federal Circuit in Everlight Electronics Co., Ltd. v. Nichia Corp., No. 2016-1577 (Fed. Cir.). Indeed, the Court has already acknowledged that “the Federal Circuit’s decision in Everlight addresses a plethora of issues related to the asserted claims in this action and will no doubt have an effect on the ultimate question of the validity of the Asserted Patents when that issue comes before the Court.” Dkt. 105 at 19. Nichia is collaterally estopped from disputing at least the following issues that were litigated and decided in Everlight:  The subject matter of claims 2, 3, and 5 of U.S. Patent No. 5,998,925, and claims 2, 14, and 19 of U.S. Patent No. 7,531,960 is obvious in view of the prior art;  Blue InGaN LED chips were known in the prior art;  Baretz and Tadatsu each teach a blue InGaN LED chip that emits light at a peak wavelength between approximately 420 and 490 nm;  Baretz teaches a blue InGaN LED chip that emits light at a peak wavelength of approximately 450 nm;  YAG:Ce phosphor that was capable of absorbing blue light and emitting yellow light having a longer wavelength was known in the prior art;  Hoffman and van Kemenade teach YAG:Ce phosphor capable of absorbing blue light and emitting yellow light having a longer wavelength;  For purposes of analogous art, the field of endeavor for the asserted patents is not limited to references that disclose LEDs;  Hoffman and van Kemenade are analogous art;  At the time of the alleged invention, a person of ordinary skill in the art would have been motivated to combine a blue InGaN LED chip with Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 43 of 49 Page ID #:14847 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -38- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW YAG:Ce phosphor to create a white light LED that results from partial absorption of blue light by the YAG:Ce phosphor to emit yellow light that mixes with the non-absorbed blue light to make white light;  At the time of the alleged invention, a person of ordinary skill in the art would have had a reasonable expectation of success in a blue InGaN LED chip with YAG:Ce phosphor to create a white light LED that results from partial absorption of blue light by the YAG:Ce phosphor to emit yellow light that mixes with the non-absorbed blue light to make white light;  The subject matter of claims 2, 3, and 5 of the ‘925 Patent, and claims 2, 14, and 19 of the ‘960 Patent is obvious despite Nichia’s alleged evidence of secondary considerations, including commercial success and praise for Nichia’s white LEDs. See, e.g., Everlight, 719 Fed. Appx. at 1010-1014; Everlight Elecs. Co. v. Nichia Corp., No. 12-cv-11758, 2016 WL 8232553, at *1 (E.D. Mi. Jan. 19, 2016). These issues are subject to collateral estoppel for at least the following reasons: First, the parties have raised these identical issues in this case, as evidenced by at least their expert reports, expert depositions, and briefing on VIZIO’s Motion for Summary Judgment (Dkt. 179). Thus, this element of collateral estoppel is met. Second, it is undisputed that these issues were actually litigated in Everlight and necessary to the jury’s obviousness verdict. Third, Nichia had a full and fair opportunity to challenge each issue during the course of the Everlight litigation. While Nichia has previously alleged that this element is not met because of certain alleged inaccuracies in Everlight’s expert testimony, that argument has been rejected both by this Court and the Federal Circuit. See Dkt. 105 at 9-19; Everlight, 719 Fed. Appx. at 1012 n. 4. Thus, Nichia had a full and fair opportunity to litigate these issues in Everlight and cannot re-litigate them now. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 44 of 49 Page ID #:14848 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -39- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW 6. License & Exhaustion Nichia is barred from seeking damages with respect to any LEDs that are manufactured under a license to the asserted patents. Discovery has revealed that the LEDs used in the accused D39hn-E0 model were manufactured by Nichia has a patent license agreement See e.g., NICHIA00072017. Accordingly, Nichia cannot accuse those same LEDs of infringement in this case. Evidence in support of this defense includes expert testimony by VIZIO’s damages expert, Chris Bakewell, discovery responses provided by VIZIO identifying the entities that manufacture the accused LEDs present in the accused products, and Nichia’s patent license agreements II. ANTICIPATED EVIDENTIARY ISSUES Concurrent with the filing of this Memorandum, VIZIO anticipates filing the following motions in limine:  No testimony or argument that contradicts any issue decided in Everlight Electronics Co., Ltd. v. Nichia Corp., No. 4:12-cv-11758 (E.D. Mich.) and/or affirmed by the Federal Circuit in Everlight Electronics Co., Ltd. v. Nichia Corp., No. 2016-1577 (Fed. Cir.);  No testimony or argument that Nichia manufactures products that practice or are capable of practicing the Asserted Patents or that the Asserted Patents have been commercially successful;  No testimony or argument regarding proceedings at the Patent Trial and Appeal Board;  No testimony or argument regarding praise and awards that are unrelated to the asserted patents. VIZIO anticipates that other evidentiary issues will arise in the lead-up to and during the course of the trial when certain exhibits or testimony are offered, but that these can be addressed at the time those issues are raised. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 45 of 49 Page ID #:14849 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -40- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW III. ISSUES OF LAW VIZIO respectfully submits that at least the following legal issues remain to be decided:  Whether claims 1 and 12 of the ‘092 patent are indefinite because the patent specification fails identifies adequate corresponding structure for the claimed function of the “control unit” limitation;  Whether the terms “broad emission spectrum” and “existing around the range” render claim 4 of the ‘375 patent indefinite;  Whether claims 1 and 12 of the ‘092 patent and claim 4 of the ‘375 patent are invalid for lack of enablement with respect to the phosphor limitations;  Whether claims 1 and 12 of the ‘092 patent are invalid for lack of enablement with respect to the use of control unit and driver circuitry to deliver pulse signals to a phosphor-based LED;  Obviousness of claims 1 and 12 of the ‘092 patent and claim 4 of the ‘375 patent;  The application and scope of collateral estoppel to particular issues decided in Everlight v. Nichia;  Any claim construction issues raised by Nichia and its technical expect, including the question of whether the claims of the ‘092 patent require brightness control based on a displayed image;  Whether Nichia’s damages expert Mr. Jarosz applied the proper damages analysis in relying on an improper SSPPU; and  Whether Mr. Jarosz properly included IPR defense costs as part of his damages calculation under 35 U.S.C. § 284. Additionally, VIZIO identifies any questions of law presented in VIZIO’s pending Motion for Summary Judgment (Dkt. 179) and Motion to Exclude (Dkt. 176). VIZIO also reserves the right to identify additional legal issues based on arguments made by Nichia in advance of trial, including, but not limited to, in response to any new Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 46 of 49 Page ID #:14850 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -41- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW arguments raised by Nichia in connection with VIZIO’s substitution of its technical expert. IV. BIFURCATION OF ISSUES VIZIO does not request any bifurcation of issues at trial. V. JURY TRIAL The claims and defenses raised by both Nichia and VIZIO are properly tried to the jury and both parties have timely invoked their right to a jury trial. VI. ATTORNEYS’ FEES Should VIZIO prevail in this action, VIZIO will respectfully seek an award of attorneys’ fees pursuant to 35 U.S.C. § 285. VIZIO respectfully submits that at least the following conduct by Nichia would support an award of attorneys’ fees in this action:  Nichia’s continued assertion of patents that are closely related to the patents asserted and held invalid in the Everlight litigation;  Nichia’s refusal to withdraw infringement allegations related to products for which it failed to timely serve an expert report;  Nichia’s refusal to withdraw infringement allegations related to products that were licensed under its agreement with ;  Nichia’s refusal to withdraw the ‘375 patent after failing to obtain any discovery regarding the methods used to manufacture the accused LEDs;  Nichia’s request for a damages award under 35 U.S.C. § 284 for inter partes review defense costs, including attorneys’ fees, when Section 284 does not cover such fees and Nichia has provided no basis as to why such fees were reasonable;  Nichia’s refusal to make the inventors of the asserted patents available for deposition in the United States (requiring VIZIO to successfully move to compel) and then later listing them as trial witnesses that Nichia intends to call at trial. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 47 of 49 Page ID #:14851 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -42- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW As other courts have found, the failure to withdraw infringement allegations in the face of a clear non-infringement or invalidity defense merit the award of attorneys’ fees under Section 285. See e.g., IPS Grp., Inc. v. Duncan Solutions, Inc., No. 15-cv-1526, 2018 WL 2215418, at *2 (S.D. Cal. May 14, 2018) (awarding fees for infringement claim where patentee failed to produce any evidence in support of infringement theory and relied exclusively on expert testimony); Par Pharmaceutical, Inc. v. Luitpold Pharmaceuticals, Inc., No. 16-cv-2290, 2017 WL 1479418, at *3 (D.N.J. Apr. 24, 2017) (awarding fees for infringement claim where patentee failed to put forth any discovery in support); Alzheimer’s Inst. of Am. v. Eli Lily & Co., 128 F. Supp.3d 1249, 1251-52 (N.D. Cal. June 5, 2015) (awarding fees where patentee’s claims were barred by collateral estoppel); ICU Med., Inc. v. Alaris Med. Systems, Inc., No. 04-cv-689, 2007 WL 6137003, at *5 (C.D. Cal. Apr. 16, 2007) (awarding fees where patentee was “grossly negligent” in asserting claim that was invalid). For at least these reasons, VIZIO respectfully submits that, should it prevail at trial, an award of fees would be appropriate. VII. ABANDONMENT OF ISSUES In order to streamline the issues, VIZIO has agreed not to present at trial the following defenses pled in its Amended Answer (Dkt. 56):  Failure to State a Claim;  Lack of Standing;  Prosecution History Estoppel;  Laches, Estoppel, and/or Unclean Hands. VIZIO’s agreement not to present these defenses is expressly conditioned on the present scope of the case and Nichia’s current expert opinions and positions and is limited only to the present case. To the extent that Nichia seeks to alter those positions or assert additional claims, VIZIO expressly asserts the right to revive these defenses. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 48 of 49 Page ID #:14852 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -43- Case No. 8:16-cv-00545-SJO-MRW VIZIO'S REVISED MEMO. OF CONTENTIONS OF FACT AND LAW DATED: February 18, 2019 QUINN EMANUEL URQUHART & SULLIVAN, LLP By /s/ Richard W. Erwine Richard W. Erwine Attorneys for Defendant and Counterclaim-Plaintiff VIZIO, Inc. Case 8:16-cv-00545-SJO-MRW Document 243 Filed 02/18/19 Page 49 of 49 Page ID #:14853