The Liqmax 120 (one of the accused products manufactured by AVC and sold by its customer, Enermax).

In an omnibus decision issued March 15, 2019, Judge Jon S. Tigar ruled on Plaintiff/Counter-Defendant Asia Vital Component Co., Ltd.’s (“AVC’s”) motion for partial summary judgment of non-infringement and Defendant/Counter-Claimant Asetek Danmark A/S’s (“Asetek’s”) motion for partial summary judgment of invalidity and motions to strike expert reports and declarations.  AVC is a Taiwan-based manufacturer of fan coolers and heat sinks for CPUs, laptops, and personal computers.[1]  Defendant Asetek is a Danish company credited with popularizing widely used liquid cooling systems.

At issue in the case are two patents that describe a liquid cooling system for the central processing unit of a computer: U.S. Patent Nos. 8,240,362 (“’362 Patent”) and 8,245,764 (“’764 Patent”).  Mere weeks after the patents issued in August 2012, Asetek successfully asserted them in a lawsuit against CoolIT Systems Inc.[2]  Asetek also asserted these patents against Cooler Master Co., Ltd., winning a permanent injunction in addition to monetary damages.[3]  Asetek initiated licensing negotiations with AVC in April 2014.  After those failed, AVC filed suit for declaratory judgment of non-infringement and invalidity in September 2014.

Court Strikes Undisclosed Non-Infringement and Invalidity Theories.  Judge Tigar granted Asetek’s motions to strike portions of AVC’s expert’s non-infringement report and portions of an expert declaration in support of AVC’s opposition to Asetek’s motion for summary judgment on validity.

Asetek argued for striking portions of AVC’s expert’s non-infringement report because AVC failed to disclose a particular non-infringement theory in response to Asetek’s interrogatory requesting factual and legal bases for AVC’s non-infringement contentions.  AVC argued in its opposition that, because Asetek bears the burden of proof on the question of infringement, it need not “divulge its fully-crystallized non-infringement arguments upon which it would rely at trial, because the deadline for AVC’s rebuttal expert report on non-infringement served that purpose.”[4]  The Court sided with Asetek, finding that “[a] rule that an accused infringer may wait until its expert rebuttal report to set forth theories of non-infringement for the first time would forfeit the benefits of contention interrogatories.”[5]

Court Grants Asetek’s Motion for Summary Judgment of Validity of the Asserted Patents.  The Court’s decision focused on the crux of the parties’ dispute: whether AVC showed motivation to combine the prior art references in its obviousness arguments.  Judge Tigar took issue with the lack of expert testimony supporting AVC’s motivation to combine arguments, particularly given the complexity of the technology at issue.  He emphasized that AVC’s expert’s comments on general industry design trends were insufficient to show motivation to combine and that AVC had provided “no incentive or motivation or commentary” on why combining the prior art references would have been desirable.

Resolution of the Matter.  In addition to granting Asetek’s motion for summary judgment of validity, the Court denied AVC’s motion for summary judgment of non-infringement.  Notably, AVC argued unsuccessfully that deficiencies in Asetek’s infringement contentions under the Local Patent Rules warranted summary judgment in its favor.  It’s no surprise then that AVC and Asetek settled days after Judge Tigar’s ruling.  AVC stipulated to an injunction barring it from selling the accused liquid cooling systems in United States and to undisclosed monetary damages.

 

Asia Vital Components Co., Ltd. v. Asetek Danmark A/S, Case No. 3:16-cv-07160-JST (RMI), Dkts. 239 and 241 (N.D. Cal. Mar. 15, 2019).


Endnotes:

[1]  http://www.avc.co/en-us/ProductTechnology/%E6%95%A3%E7%86%B1%E7%94%A2%E5%93%81.

[2]  https://vrzone.com/articles/the-battle-for-liquid-cooling-asetek-sues-coolit-is-corsair-in-danger/17078.html.

[3]  https://techreport.com/news/29092/asetek-wins-injunction-against-cooler-master-liquid-coolers.

[4]  Asia Vital Components Co., Ltd. v. Asetek Danmark A/S, Case No. 3:16-cv-07160-JST, Dkts. 239 and 241 (N.D. Cal. Mar. 15, 2019) (“Order”), at 5.

[5]  Id. at 5.