Viavi Solutions Inc. v. Platinum Optics Technology Inc.

Background

Viavi Solutions Inc. designs optical filters using hydrogenated silicon for 3D motion sensing and holds patents associated with that technology. Platinum Optics Technology Inc. (PTOT) manufactures optical filters that allegedly use Viavi’s patented technology. Viavi alleged that, beginning May 1, 2020, PTOT made and sold accused filters for use in electronic devices containing 3D cameras, which were allegedly imported and sold in the United States.

Viavi brought claims under 35 U.S.C. § 271(b), which imposes liability on someone who actively induces another person’s patent infringement. The amended complaint alleged induced infringement of claims in four patents. Viavi later voluntarily dismissed its claim concerning the ’369 patent. The court also granted Viavi leave to amend its complaint to add direct-infringement allegations.

PTOT moved for summary judgment of non-infringement. Because Viavi had been allowed to add direct-infringement allegations while PTOT’s motion was pending, the court treated PTOT’s motion as a partial motion for summary judgment addressing induced infringement only.

Legal standard

Summary judgment is appropriate when the evidence shows no genuine dispute about any material fact and the moving party is entitled to judgment as a matter of law. A fact is material if it could affect the case’s outcome, and a dispute is genuine if a reasonable jury could decide for the nonmoving party.

To prove induced infringement, Viavi had to show that the accused party directly infringed the asserted patent claims, took an affirmative step to encourage infringement, and knew that the induced acts constituted patent infringement. Viavi also had to show specific intent to encourage another party’s infringement. Knowledge could be shown through circumstantial evidence or willful blindness. Willful blindness required proof that PTOT subjectively believed there was a high probability that the relevant fact existed and deliberately acted to avoid learning it.

Analysis

PTOT argued that it sold filters to customers in Asia and did not know where the filters ultimately went because of a multi-step supply chain. Under the described process, PTOT sold filters to Asian customers; module integrators incorporated them into lenses and camera modules; system integrators assembled those components into mobile phones and tablets; and the finished devices were sold to the third-party company for worldwide distribution.

The parties agreed that filters and lenses were randomly incorporated at multiple stages, that camera modules were not selected based on the supplier of the filters, and that devices were not assembled based on the country where they would eventually be sold. The court concluded that this supply chain evidence did not establish that PTOT knew its filters would be included in products sold in the United States.

Viavi relied on a mobile device purchased in Colorado that contained an accused filter identified as Filter #25. Viavi believed PTOT manufactured the filter and asserted that only Viavi and PTOT supplied that particular filter. The court held that, even assuming PTOT made Filter #25, the evidence did not show that PTOT knew its filters would end up in products sold in the United States. The court also found no evidence that PTOT knew it was one of only two manufacturers of the filter.

Viavi argued that the random supply chain, PTOT’s compliance with the third-party company’s technical specifications, and the company’s substantial United States market supported an inference of knowledge and intent. The court rejected that argument, explaining that a product’s ability to infringe because it meets technical specifications does not by itself establish an intent to induce infringement.

The court also rejected Viavi’s argument that PTOT’s lawyers’ knowledge could be attributed to PTOT. The court concluded that the cases Viavi cited did not support attributing confidential third-party information provided under a protective order to PTOT through its outside counsel.

The court separately considered willful blindness. Viavi argued that PTOT deliberately failed to determine whether Filter #25 was its own product, failed to ask whether other approved suppliers existed, and acted to remain ignorant during discovery. The court found these arguments unsupported or speculative. It also held that PTOT’s manufacturing activity, meetings, production adjustments, technical discussions, and communications with the third-party company did not show the deliberate conduct required for willful blindness.

Ruling

The court held that Viavi had not produced sufficient evidence from which a jury could infer that PTOT possessed the specific intent to induce infringement or was willfully blind to infringement. PTOT had shown an absence of evidence supporting the required knowledge element, and Viavi had not identified sufficient facts creating a genuine issue for trial.

The court granted PTOT’s motion for summary judgment of non-infringement with respect to induced infringement. The court stated that this ruling was not dispositive because Viavi had been granted leave to amend its complaint to add allegations of direct infringement.