Cellwitch Inc. v. Tile, Inc.
- Jeffrey White
- 4:19-cv-01315
- U.S. District Court · Northern District of California
- 11
In Cellwitch v. Tile, Judge White denied Cellwitch’s motion to enforce patent-review estoppel and obtain a protective order.
Cellwitch’s estoppel and protective-order requests were denied, allowing discovery concerning Tile’s asserted prior-art systems to continue; Tile did not receive attorney’s fees.
What happened
Cellwitch Inc. v. Tile, Inc. concerns Cellwitch’s patent-infringement lawsuit involving a patent for tracking personal items. After Tile challenged the patent through inter partes review, Cellwitch argued that Tile could no longer use certain invalidity arguments or continue related discovery.
The court rejected Cellwitch’s argument that estoppel barred obviousness combinations involving both printed references and prior-art systems. The court also found that factual questions remained about whether Tile’s system evidence was merely duplicative of printed publications, and that discovery was still ongoing.
The court denied Cellwitch’s motion to enforce estoppel and denied its request for a protective order. The court declined Tile’s request for attorney’s fees, finding that Cellwitch’s conduct did not rise to the level of subjective bad faith. Judge Jeffrey White issued the order.
The detailed version
- Cellwitch Inc. v. Tile, Inc. · No. 4:19-cv-01315
- Jeffrey White
- Dec. 20, 2023
Background
Cellwitch sued Tile, alleging infringement of U.S. Patent No. 8,872,655, which describes using a small disc attached to personal items to track them. Tile later petitioned the Patent Trial and Appeal Board for inter partes review, a process for challenging patent claims before the agency. The petition relied on three printed prior-art references: Hayes, Ritter, and Duncan. The Board found several patent claims unpatentable, including claims 1–3, 10–15, 22, and 23, and the Federal Circuit affirmed.
After the litigation resumed, Tile served invalidity contentions identifying nineteen prior-art references, including six printed publications and thirteen prior-art systems. Tile also served subpoenas on sixteen entities seeking discovery about the systems. Cellwitch objected based on estoppel under 35 U.S.C. § 315(e)(2) and asked the court to prevent Tile from pursuing its anticipation and obviousness arguments and to issue a protective order limiting related discovery.
IPR Estoppel
Section 315(e)(2) generally prevents an inter partes review petitioner from asserting in a civil action that a patent claim is invalid on a ground the petitioner raised or reasonably could have raised during the review. The court explained that inter partes review itself may rely only on patents or printed publications, not prior-art products or systems. Cellwitch, as the party asserting estoppel, had the burden to show that Tile’s invalidity grounds were barred.
Cellwitch argued first that Tile should be barred from using any obviousness combination involving printed references that Tile raised or reasonably could have raised during inter partes review, even when the combinations also included prior-art systems. The court rejected that argument. It concluded that estoppel does not generally bar an invalidity ground that relies on at least one product or other non-patent, non-printed-publication reference, even if the theory also uses a printed reference that could have been raised during inter partes review.
Cellwitch also argued that Tile’s thirteen prior-art systems were simply printed publications relabeled as systems to avoid estoppel. The court did not decide the broader legal dispute among district courts about when estoppel may apply to systems that are materially identical to printed references. Instead, it found Cellwitch’s argument premature because discovery was ongoing and factual questions remained about how the systems functioned and whether evidence such as source code might show that they contained information that could not have been presented during inter partes review.
The court also declined to treat Tile’s invalidity disclosures as establishing that further discovery would be futile. Although Cellwitch challenged the adequacy of Tile’s disclosures under the Patent Local Rules, Cellwitch had not asked the court to require Tile to amend those disclosures. The court found no basis for imposing the severe result of effectively terminating Tile’s patent-invalidity defenses under 35 U.S.C. §§ 102 and 103.
Protective Order
The court denied Cellwitch’s request for a protective order. Under Federal Rule of Civil Procedure 26(c), such an order requires good cause to protect against undue burden or expense. Because unresolved factual questions about Tile’s system evidence were material to estoppel, the court found no good cause to block the related discovery.
Attorney’s Fees
Tile requested attorney’s fees under 28 U.S.C. § 1927 and the court’s inherent authority. The court stated that fee sanctions require subjective bad faith or comparable improper conduct. Although the court was troubled by Cellwitch’s apparent decision to withhold discovery, it was not persuaded that Cellwitch had acted with the required bad faith. The court therefore declined to award Tile attorney’s fees in connection with the motion.
Disposition
The court denied Cellwitch’s motion to enforce inter partes review estoppel, denied its request for a protective order, and declined to award Tile attorney’s fees. The court also warned that it would not look lightly on future efforts to withhold or block discovery relevant to the parties’ claims or defenses.
Read the full 11-page opinion on CourtListener, the free public archive maintained by the Free Law Project.