Noble Security, Inc. and Meir Avganim v. ACCO Brands Corporation

Background

Noble Security, Inc. and Meir Avganim sued ACCO Brands Corporation for allegedly infringing U.S. Patent Nos. 9,549,476 and 9,624,697. The patents concern a trapezoid-shaped computer-security slot and a lock designed to work with that slot. ACCO also asserted a counterclaim involving its U.S. Patent No. 8,842,422. The court had previously struck Plaintiffs’ tortious-interference claim.

The parties filed cross-motions for summary judgment under Rule 56. Magistrate Judge Gabriel W. Gorenstein issued a report and recommendation advising that both motions be granted in part and denied in part. After reviewing the parties’ objections, Judge Margaret M. Garnett adopted the report and recommendation in full.

ACCO’s Motion Concerning the ’697 Patent

ACCO argued that it could not directly infringe the ’697 Patent because that patent included a security cavity or slot, while ACCO sold only locks. The court denied this part of ACCO’s motion. It held that the patent’s references to the security cavity described the environment in which the patented lock operates and did not make the cavity a structural component of the invention. ACCO therefore could potentially directly infringe the patent by selling an infringing lock even if it did not sell the corresponding slot.

Implied License and the ’476 Patent

The court granted ACCO’s motion as to non-infringement of the ’476 Patent based on an implied license. An implied license is permission inferred from the patent owner’s conduct rather than stated expressly. The court found that the Wedge Slot covered by the ’476 Patent had no non-infringing uses and that Plaintiffs had consented to Dell’s use of the slot by providing schematics, knowing Dell would implement the slot in its machines, imposing no restrictions, and not challenging Dell’s commercial use. The court also found that Plaintiffs sought to encourage adoption of the Wedge Slot to expand the market for Noble Locks. Because Dell had an implied license, ACCO could not be indirectly liable for infringement of the ’476 Patent based on Dell’s use of the slot.

Worldwide Damages

The court denied ACCO’s motion for summary judgment seeking to bar worldwide damages. United States patent law generally does not impose infringement liability for a patented product made and sold entirely in another country, but the location and substance of sales activity can matter. The court found insufficient evidence to establish that locks manufactured, shipped, warehoused, and delivered abroad were not sold in the United States for purposes of the patent statute. Evidence concerning ACCO’s United States-based sales infrastructure and website, as well as United States involvement in foreign sales, left a genuine factual dispute for trial.

Willful Infringement

The court denied Plaintiffs’ motion and granted ACCO’s motion on whether ACCO willfully infringed the Noble Patents. The court found that ACCO had asserted multiple good-faith defenses and that Plaintiffs had offered no evidence from which a factfinder could conclude that ACCO willfully infringed. The ruling resolved the willfulness issue in ACCO’s favor.

Direct Infringement of Claim 1 of the ’697 Patent

The court denied Plaintiffs’ motion seeking summary judgment that ACCO’s N17 Locks directly infringed Claim 1 of the ’697 Patent. That claim requires the lock’s wedge elements, when locked, to engage with and bear against the sidewalls of the security cavity. The court explained that whether the accused product satisfies the construed claim requirements is generally a factual question. Because photographs could allow a juror to perceive a space between the N17 Lock’s wedge elements and the sidewalls, and the parties disputed that issue, summary judgment was improper.

Invalidity of ACCO’s ’422 Patent Claims

The court denied Plaintiffs’ motion seeking summary judgment that Claims 1, 4, 16, and 17 of ACCO’s ’422 Patent were invalid. Plaintiffs had not identified the three patents they later relied on as prior art in their required invalidity contentions, and they had not timely supplemented those contentions. The court found no clear error in denying the motion as untimely.

Claims Against Avganim and Final Disposition

The court granted Plaintiffs’ motion as to dismissal of the claims against Avganim. ACCO had presented no evidence that Avganim made, used, or sold an invention covered by ACCO’s patent, and the court found no exceptional circumstances supporting disregard of the corporation’s separate legal status.

The final disposition was: Plaintiffs’ motion for summary judgment was granted as to the dismissal of claims against Avganim and denied in all other respects. ACCO’s motion was granted as to non-infringement of the ’476 Patent based on an implied license and lack of willful infringement, and denied in all other respects.