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KATZ v. AIWA AMERICA

March 12, 1993

MAURICE KATZ and SAMURAI, Plaintiffs,
v.
AIWA AMERICA, INC., THE WIZ DISTRIBUTORS, LTD., NOBODY BEATS THE WIZ, INC., et al., Defendants.



The opinion of the court was delivered by: HAROLD A. ACKERMAN

 ACKERMAN, District Judge:

 Plaintiffs Maurice Katz ("Katz") and Samurai Products, Inc. ("Samurai") brought this action against defendants AIWA America, Inc., The Wiz Distributors, Ltd., and Nobody Beats The Wiz, Inc., et al. (collectively "AIWA") alleging patent infringement and unfair competition. Before me now are 1) AIWA's motion for summary judgment of non-infringement, both with respect to the complaint and its counterclaim, and for an award of attorneys' fees and costs, or in the alternative, for judgment on the pleadings on plaintiffs' count for unfair competition and 2) Katz's cross-motion for sanctions against AIWA and AIWA's counsel.

 Oral arguments on these motions were heard on April 8, 1993. For the following reasons, AIWA's motion for summary judgment of non-infringement is granted but its request for attorneys' fees and costs is denied. Katz's cross-motion for sanctions is also denied.

 I. Factual Background

 On March 31, 1992, plaintiffs filed a complaint against AIWA alleging patent infringement and unfair competition, requesting money damages, injunctive relief, and attorneys' fees. AIWA's counterclaim seeks, inter alia, a declaratory judgment that AIWA's products do not infringe any valid claim of plaintiff Katz's patent and an award of attorneys' fees and costs, as well as sanctions pursuant to 35 U.S.C. § 285, 28 U.S.C. § 1927 and Rule 11 against plaintiffs.

 The following are the undisputed facts.

 A. The Katz Patent

 Plaintiff Katz is the exclusive owner of United States Letters Patent No. 4,678,874 ("'874 patent" or "Katz patent"), a utility patent for an anti-burglary device for automobile radios and cassette players ("players"). *fn1" Katz filed an application for a patent on April 3, 1986 and the patent issued on July 7, 1987. The patent contains fourteen claims, two of which, claims 1 and 8, are independent. Each of the independent claims recites as elements or limitations of the invention: 1) a "lever means" and 2) a "dial-type combination lock means for securing and unsecuring said lever means." Claim 1 reads in pertinent part:

 '874 patent at Col. 7, lines 27-49. Claim 8 contains essentially the same recitation and recites elements in addition to those recited in Claim 1, including "a key-receiving structure" and "a blocking-key means." Id. at Col. 9, lines 1-4; 14-36.

 B. AIWA's Products

 AIWA sells automobile radio/cassette players having a security system to discourage theft. AIWA's products falling into this category at any time since the Katz patent was issued are Model Nos. CT-X7000, CT-X8000, CT-X6, and CT-X8 ("AIWA products"). The security system for all of these products uses the player's microcomputer, random access memory (RAM), display screen, preset station buttons and several other operational buttons.

 A user activates the security system for the first time by pressing certain operational buttons on the player's front panel. This causes the microcomputer to enter into a "stand-by" mode during which the microcomputer is able to receive a four-digit security code, selected by the user. Operation of the player is inhibited during the stand-by mode because the microcomputer withholds the electrical command and control signals necessary for the player's operation. During stand-by, the microcomputer responds only to the transmission of the security code. The user transmits the security code to the microcomputer by pressing the player's preset station buttons which causes the transmission of electrical signals, representative of the code, to the microcomputer. The microcomputer displays the code on the display screen and also simultaneously stores it in its RAM.

 Once the code has been entered, the microcomputer leaves the stand-by mode and enters a mode in which it provides normal command and control signals. If the user then presses one of the player's operational buttons, the microcomputer responds by transmitting the appropriate electrical signals to effect the selected operation.

 After activating the security system, the player operates normally unless it is disconnected from its power supply. When the player is subsequently reconnected to the power supply, the microcomputer enters the stand-by mode in which operation of the player is inhibited until the security code is retransmitted to the microcomputer.

 The security code is reentered into the player by pressing the preset station buttons in the same manner in which the code was originally programmed into the player. The microcomputer electronically compares the transmitted code with the code stored in the RAM and, if a match exists, the player becomes operational.

 II. Discussion

 A. Standard for Summary Judgment

 Summary judgment may be granted only if the pleadings, supporting papers, affidavits, and admissions on file, when viewed with all inferences in favor of the nonmoving party, demonstrate that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); see Todaro v. Bowman, 872 F.2d 43, 46 (3d Cir. 1989); Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 896 (3d Cir.), cert. dism'd, 483 U.S. 1052 (1987). Put differently, "summary judgment may be granted if the movant shows that there exists no genuine issues of material fact that would permit a reasonable jury to find for the nonmoving party." Miller v. Indiana Hosp., 843 F.2d 139, 143 (3d Cir.), cert. denied, 488 U.S. 870, 102 L. Ed. 2d 147, 109 S. Ct. 178 (1988). An issue is "genuine" if a reasonable jury could possibly hold in the nonmovant's favor with regard to that issue. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). A fact is material if it influences the outcome under the governing law. Id. at 248.

 Within the framework set out above, the moving party essentially bears two burdens. First, there is the burden of production, of making a prima facie showing that it is entitled to summary judgment. This may be done either by demonstrating that there is no genuine issue of fact and that as a matter of law, the moving party must prevail, or by demonstrating that the nonmoving party has not shown facts relating to an essential element of the issue for which it bears the burden. Once either showing is made, this burden shifts to the nonmoving party who must demonstrate facts supporting each element for which it bears the burden as well as establish the existence of genuine issues of material fact. Second, there is the burden of persuasion. This burden is a stringent one which always remains with the moving party. If there remains any doubt as to whether a trial is necessary, summary judgment should not be granted. See Celotex Corp. v. Catrett, 477 U.S. 317, 330-33, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-61, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970); Advisory Committee's Notes on Fed. Rule of Civ. Pro. 56(e), 1963 Amendment; see generally C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2727 (2d ed. 1983).

 With respect to patent cases, the Federal Circuit *fn2" has stated that:

 
Summary judgment is as appropriate in a patent case as in any other. Where no genuine issue of material fact remains and the movant is entitled to judgment as a matter of law, the court should utilize the salutary procedure of Fed. R. Civ. P. 56 to avoid unnecessary expense to the parties and wasteful utilization of the jury process and judicial resources.

 Barmag Barmer Maschinenfabrik AG v. Murata Machinery, Ltd., 731 F.2d 831, 835 (Fed. Cir. 1984). The Federal Circuit has affirmed grants of summary judgment in patent cases on numerous occasions. See id. (citing cases); see also Intellicall, Inc. v. Phonometrics, Inc., 952 F.2d 1384 (Fed. Cir. 1992); Becton Dickinson & Co. v. C.R. Bard, Inc., 922 F.2d 792 (Fed. Cir. 1990). *fn3"

 B. Standard for Patent Infringement

 A "claim" set forth in a patent "provides the metes and bounds of the right which the patent confers on the patentee to exclude others from making, using, or selling the protected invention." Corning Glass Works v. Sumitomo Elec. U.S.A., Inc., 868 F.2d 1251, 1257 (Fed. Cir. 1989) (citing Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 607, 94 L. Ed. 1097, 70 S. Ct. 854 (1950)). As the Federal Circuit has explained:

 
The claims of the patent provide the concise formal definition of the invention. They are the numbered paragraphs which "particularly [point] out and distinctly [claim] the subject matter which the applicant regards as his invention." 35 U.S.C. § 112. It is to these wordings ...

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