Masimo Corp. v. Philips Electronics North America Corp.

Citations: 918 F. Supp. 2d 277; 2013 U.S. Dist. LEXIS 8716; 2013 WL 258964Docket: C.A. No. 09-80-LPS-MPT

Court: District Court, D. Delaware; January 22, 2013; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Philips has moved to limit the number of claims asserted by Masimo in ongoing patent litigation, specifically in Masimo I and II, arguing that reducing the claims from 95 to 30 would decrease the complexity of the case. This motion was discussed during a status conference on December 18, 2012, where both parties presented arguments and submitted additional written materials. The court has previously managed the cases by bifurcating and staying discovery on Philips' antitrust counterclaims and limiting the number of patents in dispute. Initially, Masimo I involved fourteen patents, which were later reduced to seven for litigation purposes. The court ruled on claim construction following a tutorial and Markman hearing, but Masimo subsequently initiated a second action (Masimo II) with additional claims against Philips, which led to a consolidation of the cases. Philips asserts that a reduction in claims would streamline litigation, minimize disputes, and simplify expert analysis due to the overlapping nature of the patents.

Masimo argues against imposing restrictions on the number of claims at this stage, asserting that Philips has not demonstrated duplicative claims to justify dismissing 65 claims. Masimo emphasizes that its claims are directed to distinct inventions, warranting full protection and the potential for injunctive relief. It maintains that any claim reduction should occur shortly before trial and criticizes Philips for not addressing the substance of the currently asserted claims. Masimo proposes limiting only the number of claim terms to be construed and suggests a collaborative approach for claim and prior art reduction after key trial milestones, emphasizing that the representative claims trial strategy should only be decided once the trial issues are clear. Conversely, Philips argues for claim reduction based on shared specifications and the similarity of certain patents, while asserting that any narrowing should allow for the possibility of adding claims if good cause is shown. Philips also supports limiting prior art references in line with any claim reduction but insists that such reductions should follow Masimo's selection of claims. Both parties express a desire to avoid unnecessary complexity and agree on meeting to confer regarding claims and prior art at various stages of the proceedings.

A district court possesses the inherent authority to limit the number of claim terms for construction and the number of patent claims asserted to enhance judicial efficiency. In this case, Masimo has proposed over 39 claim terms and 95 claims across seven patents, resulting in an unwieldy litigation process. Historical precedents from Masimo I and II indicate that relying on parties to reduce claims post-summary judgment is ineffective. Masimo's attempt to introduce three additional patents for trial was supported by its assertion that minimal discovery would be required due to their connection with selected patents. The patents share a common genealogy, particularly within the '060 application family, and fall under two subject matter categories: parallel calculation/frequency domain patents and pulse rate patents. The identified patents, including the newly raised '955 and '400 patents, relate to methods of determining pulse rates. The parties have submitted a Joint Claim Construction Chart detailing disputed claim terms and proposed constructions. Previous court decisions and summary judgment briefings provide a framework for selecting which claims and prior art references to reduce. Masimo incorrectly asserts that the Federal Circuit’s standard in In re Katz is solely about claim duplicativeness; rather, it emphasizes the need for a small number of claims to be examined and acknowledges the common genealogy of patents. The Federal Circuit's ruling in Stamps.com further supports the district court's ability to limit claims while allowing for additional claims if justified.

Significant to the decisions in In re Katz and Stamps.com is the recognition that lower court safety valve provisions do not make limitations on the number of claims absolute. Masimo asserts that its 17 independent claims and 78 related dependent claims represent distinct inventions, arguing that no reduction in claims should occur. However, Masimo acknowledges the necessity for claim reduction and did not intend to present all claims to the jury. The argument does not challenge the early opportunity for claim reduction, which does not violate the statutory presumption of independent validity for each claim. Masimo’s primary concern is the timing of this reduction, rather than the eventual reduction itself.

Philips asserts that any claim narrowing should allow for the possibility of adding claims with good cause. The court finds early claim reduction appropriate prior to claim construction and summary judgment motions. Masimo is ordered to identify 30 representative claims from its asserted patents to streamline the issues, and both parties must limit their claim terms for construction to 20, focusing on terms that may be confusing or ambiguous to the jury.

Regarding prior art references, Philips is open to reducing its references in line with the reduction of asserted claims but argues against limiting these references before Masimo selects its claims. Philips contends that references discarded should not count against its total. Masimo opposes Philips' mathematical approach and requests that Philips either adhere to 19 charted references or complete earlier discovery responses on prior art. The court in Intellectual Ventures did not require defendants to serve invalidity contentions before the plaintiff's claim reduction, suggesting that the timing for claim reduction should follow the defendants' document production and invalidity contentions. The main focus remains on the number of asserted claims and its implications for claim term construction.

Judge Stark ruled that a reduction in the number of asserted claims significantly impacts the case's complexity, contrary to Masimo's assertions. In the case of Personalized User, the plaintiff successfully reduced claims from 68 to 36 and sought a Markman ruling before making further reductions. The court mandated that the defendant provide invalidity contentions for the reduced claims first, acknowledging that fewer asserted claims lead to fewer claim terms needing construction.

In contrast, Masimo has not yet reduced its claims from the current 95, and Philips has responded with charts for 19 prior art references applicable to all these claims. As a result, Masimo is ordered to limit its asserted claims to no more than 30 and shall identify no more than 20 claim terms for construction. Following Masimo's selection, Philips must then identify up to 40 prior art references and provide invalidity contentions for each.

The modifications in claim and reference limits can be adjusted upon a showing of good cause. Consequently, the court canceled the existing claim construction schedule and set a date for the parties to confer on new timelines and to file a joint proposal by February 5, 2013. A teleconference is scheduled for February 7, 2013, to discuss the new scheduling.

Counsel for Masimo and Philips will meet to finalize the timeline for Masimo's claim selection, Philips' selection of prior art references, and the submission of a revised Joint Claim Construction Chart. They must file a joint submission by February 5, 2013, by 5:00 p.m. Eastern time. A teleconference is scheduled for February 7, 2013, at 11:00 a.m. Eastern time to discuss these issues and set a new Markman hearing date, with Philips responsible for organizing the call. Consequently, the current briefing schedule and the Markman hearing on March 20, 2013, are canceled. 

Philips' motion concerning the Masimo I patents was denied due to the completion of summary judgment briefing, with the court's review of the parties' arguments ongoing. The selection of patents for initial proceedings is left to the parties, with the '955 and '400 Masimo patents initially asserted. There are at least 33 disputes noted in the recent joint claim construction chart, with 18 disputes related to a single claim. Philips argues that evaluating the validity of 95 claims based on a single prior art reference for each claim would be necessary.

Masimo's request to add three patents post-discovery cutoff was denied. This request came after the completion of Markman briefing and hearing, and the court had already issued a Report and Recommendation on claim terms for the initial patents. Masimo's rationale for grouping the patents was not accepted, as it had not previously contested the initial patent selection process or the limitation on the number of patents. The court indicated that Masimo could have grouped patents during its initial selection. The interplay between the initially raised patents and related patents was acknowledged, but Masimo's argument for adding them at this stage was not persuasive.

Philips references several legal precedents, including cases such as *Stamps.com Inc. v. Endicia, Inc.* and *In re Katz Interactive Call Processing Patent Litig.*, which support its arguments. The PTO has initially rejected claims from the '955 patent and has ordered reexamination of claims in the '984, '194, and '222 patents associated with Masimo. Philips maintains it is not seeking summary dismissal and is open to claim adjustments, allowing for the addition of claims if justified. Masimo's current stance contradicts previous statements regarding the integration of certain "limbo" patents into Masimo I. The timing of any proposed changes from Masimo remains uncertain, depending on the outcome of summary judgment motions and counsel agreement, which the court finds questionable based on past experiences. Additionally, substantial discovery has been conducted related to unselected patents, and incorporating these patents into the Masimo I trial would promote judicial efficiency. The document concludes that there is a clear relationship between selected and unselected patents, suggesting a strategic link in their claims.

The '053 patent is derived from a continuation application of the '850 patent, while the '159 and '400 patents stem from separate continuation applications of the '053. The abandoned '859 patent also originates from a continuation application of the '053. The '955 patent is a divisional application of the '859 patent, and the '572 patent comes from a continuation application of the '955 patent. Therefore, the '850, '159, '400, '955, and '572 patents are all linked through continuation applications from the '272 patent, which is currently under summary judgment. 

A continuation application seeks to add claims to an invention already disclosed in a parent application, maintaining the same specification and not adding new disclosure. A divisional application, on the other hand, is based on an earlier application that contains multiple independent inventions. 

The excerpt also references the burden allocation in patent claims as per In re Katz Interactive Call Processing Litigation, emphasizing that the claimant is responsible for narrowing disputes. If a claimant fails to file a motion to add claims with adequate justification, they cannot claim a lack of opportunity to be heard. The excerpt cites relevant case law, including Stamps.com, which upheld a lower court's decision to deny additional claims due to the claimant's failure to demonstrate need. 

Additionally, it is noted that while every word in a claim carries significance, not every word necessitates construction. Philips identified 135 prior art references but only provided details for 19. The court has directed Masimo and Philips to limit their claims and references, allowing further modifications only upon showing good cause.