Cyntec Company, Ltd. v. Chilisin Electronics Corp.

Background

Cyntec alleged that Chilisin Electronics Corp. and Chilisin America Ltd. infringed four patents concerning electrical chokes: U.S. Patent Nos. 8,212,641, 8,922,312, 9,117,580, and 9,481,037. The parties stipulated to noninfringement of the ’641 patent. The remaining dispute involved the ’312 and ’037 patents, which concern molded chokes made with magnetic powders, and the ’580 patent, which concerns a pillar choke with a non-circular and non-rectangular cross-section.

Cyntec alleged direct infringement based on sales inside the United States and indirect infringement based on sales outside the United States to third parties that later imported accused products into the United States. Cyntec also sought damages based largely on foreign sales. The defendants moved for summary judgment, which asks whether the evidence shows that no reasonable jury could find for the opposing party. They also moved to exclude portions of expert Paul Kohl’s infringement report and expert Bryan Van Uden’s damages report.

Summary-judgment rulings

The court denied summary judgment on the defendants’ noninfringement arguments. Although Cyntec lacked direct evidence showing that third parties imported or sold the accused products in the United States, the court found sufficient circumstantial evidence to create a factual dispute. That evidence included Chilisin’s use of design codes to track samples and sales to end customers located in the United States, evidence that some products met specifications required by U.S.-based companies, and other evidence concerning Chilisin’s customers and products. The court also found a factual dispute about whether defendants knew the induced acts constituted infringement, citing Cyntec’s December 2017 notice letter.

The court denied summary judgment on indefiniteness of the ’312 and ’037 patents. Defendants argued that the phrase “by means of” failed to identify clearly the required relationship between the powders’ hardness difference and the lower manufacturing temperature. The court rejected defendants’ proposed interpretation that the hardness difference had to be the only possible cause of the lower temperature. Reading the claims and specifications together, the court found that the patents described a sufficient causal connection between the hardness difference, reduced strain and core loss, and the ability to use a lower manufacturing temperature.

The court also denied summary judgment on alleged noninfringement of the ’312 and ’037 patents. It found evidence, including Cyntec expert Kohl’s reverse-engineering testing, sufficient to create a factual dispute about whether the accused products contained the claimed hardness difference and were manufactured at a temperature below the melting point of the wire’s insulation. The court further found that Kohl’s report provided enough factual support for Cyntec to proceed under both literal infringement and the doctrine of equivalents, which permits infringement to be shown when an accused product performs substantially the same function in substantially the same way to achieve substantially the same result.

The court denied summary judgment on defendants’ argument that the ’580 patent was invalid because it was anticipated by prior art. Defendants relied on an accused product sold in February 2013, but the court found a factual dispute about whether the product sold then had the same core design as the product Cyntec alleged infringed the ’580 patent. The court also declined to rule that the patent had a priority date limited to March 25, 2013, because defendants had not disclosed their written-description challenge in their required invalidity contentions and Cyntec was prejudiced by that omission.

The court denied summary judgment on willful infringement. Defendants did not dispute that Cyntec had provided pre-suit notice of alleged infringement in December 2017, but argued that notice and continued infringement did not establish the egregious conduct needed for enhanced damages. The court found a factual dispute about whether an accused choke’s design changed in December 2012 and whether that product was the same product that allegedly copied Cyntec’s design.

Expert testimony

The court granted in part and denied in part defendants’ motion to exclude. It excluded portions of Kohl’s report that stated or characterized what Chilisin knew, intended, encouraged, or was likely to know, including the challenged statements identified in paragraphs 172, 177, 179, 181, 334, 337, 339, 341, 343, 488, 491, 493, 495, and 497. The court concluded that some of those opinions were unsupported statements about Chilisin’s subjective beliefs or summarized Cyntec’s characterization of the evidence rather than the underlying evidence itself.

The court did not exclude Van Uden’s damages opinions or report. Although his methodology did not establish a direct link between the customers’ overall U.S. sales and the share of Chilisin’s accused products imported into the United States, the court found that his opinions relied on sufficiently reliable data. The defendants’ objections went to the weight and persuasiveness of the opinions rather than their admissibility.

Sealing and disposition

The court granted the parties’ motions to file portions of their briefs and exhibits under seal. It found compelling reasons to seal technical product information, sales information, and other confidential or proprietary material, while noting that it expressed no opinion about whether the documents would remain sealed at trial.

Judge Phyllis J. Hamilton’s final disposition was to deny defendants’ motion for summary judgment, grant in part and deny in part defendants’ motion to exclude, and grant the parties’ motions to file under seal. The court also set a case-management conference for October 16, 2020, to address the case schedule.