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United States District Court, Southern District of New York

July 28, 2000


The opinion of the court was delivered by: McMAHON, District Judge.


The various pending motions are disposed of as follows:

1. TM's motion for Leave to Rely on the Statement of Ethan Miller is granted, and IBM's cross-motion to strike the statement is denied.

2. IBM's motion for summary judgment relating to the '342 patent is denied, on the ground that there are myriad disputed issues of material fact, almost all of them concerning the question of substantial equivalence under the Doctrine of Equivalents. As a jury has been demanded, only a jury can resolve the conflicting views of the experts in this non-obvious and extremely complicated patent dispute. "Summary judgment is as available in patent cases as in other areas of litigation." See Continental Can Co. v. Monsanto Co., 948 F.2d 1264, 1265 (Fed.Cir. 1991) (citation omitted); see also Bayer AG v. Elan Pharmaceutical Research Corporation, 212 F.3d 1241 (Fed.Cir. 2000); Vivid Techs., Inc. v. American Science & Eng'g, Inc., 200 F.3d 795 (Fed.Cir. 1999). However, I tend to agree with those of my confreres who have held that, in general, summary judgment is appropriate only in cases where the technology at issue is relatively simple and straightforward. See Amhil Enterprises, Ltd. v. Wawa, Inc., 81 F.3d 1554 (Fed.Cir. 1996) (holding that summary judgment was appropriate because no genuine issue of material fact existed and no expert testimony was required to explain the nature of the patented invention, but observing that District Courts should approach summary judgment motions in patent cases with great care); Palumbo v. Don-Joy Co., 762 F.2d 969 (Fed.Cir. 1985). See also, e.g., C-Thru Products, Inc. v. Uniflex, Inc., 262 F. Supp. 213 (E.D.N.Y. 1966) (holding that motions for summary judgment in patent cases must be considered with unusual caution), aff'd, 397 F.2d 952 (2nd Cir. 1968); Servaas & Co. v. Dritz, 185 F. Supp. 61 (S.D.N.Y. 1960). The '342 patent and the allegedly infringing products can hardly be so described. And I indicated the inappropriateness of summary judgment on the issues raised by the '342 patent in my Markman decision — or, at least, I thought I did.

3. The court orders a half-day hearing on the parties' cross motions for summary judgment relating to the '773 patent. The hearing will take place on September 21 at 1 PM. If, however, there is any scheduling conflict due to a criminal trial, we will proceed the following day, again at 1 PM. Each side will have 2 hours to present its side of the matter.

4. IBM's motion for summary judgment on the issue of its liability for sales made to the United States Government is denied. While IBM is correct that the Federal Circuit's decision in Manville Sales Corp. v. Paramount Systems, Inc., 917 F.2d 544 (Fed.Cir. 1990) is not binding on this Court, IBM is wrong to argue that the decision of another judge of this Court in Serra v. United States General Services Administration, 667 F. Supp. 1042 (S.D.N.Y. 1987) is binding on this Court. Only decisions of the United States Supreme Court and the relevant Courts of Appeals are binding on a District Court, and as neither the Supreme Court nor the Second Circuit has ever construed 28 U.S.C. § 1498, there is no binding authority for me to follow, only persuasive authority. And as to that, I find Manville, as well as the various cases (both pre- and post-Manville) that reach the same result,*fn1 far more persuasive than those courts that have concluded that a District Court has no jurisdiction under § 1498 to entertain a claim for damages against a private party (as opposed to the United States) relating to sales made to the Government.*fn2 In a suit between private parties, § 1498 is available to defendants as an affirmative defense, but is not a jurisdictional bar.

Having decided that § 1498 applies in this case and that it establishes an affirmative defense as to private defendants, there remains the question of whether this Court will allow IBM to amend its complaint to assert that affirmative defense, or whether this Court will grant TM's in limine motion to prevent IBM from asserting just such a defense. After carefully reviewing the procedural history up to this point, as well as the briefs on both sides, I find that TM would not be prejudiced if IBM were allowed to amend its answer to assert a § 1498 affirmative defense, even though discovery has long since closed.*fn3 Frankly, I find TM's assertion that it would have altered its discovery strategy had it been made aware of IBM's assertion of a § 1498 affirmative defense to be ludicrous. We are not talking about an issue of infringement, but of damages. IBM can proffer an accounting for its Government sales at the same time it files its amended answer, which shall be within 30 days of the date of this opinion. In view of the unsettled state of the law on this issue, IBM's adoption of the position that it viewed as favorable to itself, and its decision to raise the issue as a Rule 12(b)(1) motion for lack of jurisdiction over the subject matter, was not unreasonable (imprudent, perhaps, but not unreasonable). Therefore, TM's motion in limine to prevent IBM from asserting a defense under § 1498 is denied and the amendment is allowed.

5. TM's motion for sanctions as per Fed.R.Civ.P. 37(b) and/or (d) is referred to Magistrate Judge Fox, who handled the discovery and who is uniquely positioned to decide whether sanctions relating to discovery are warranted.

6. IBM's motion for summary judgment on liability for foreign sales is deferred until trial. TM recognizes that it is not allowed to recover twice for a single instance of infringement. The Court cannot ascertain whether TM is trying to obtain double recovery until the evidence comes in. Thus, this motion is premature.

7. The parties are directed to appear for a final pre-trial conference on December 1 at 2 PM. Jury selection will commence on January 8, 2001.

This constitutes the decision and order of the Court.

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