Eastern District of Texas Holds Willful Infringement Knowledge Requirement May Be Satisfied by Informing Non-Party of Infringement Claims Before Adding That Party as a Defendant

On October 5, 2022, U.S. Magistrate Judge Roy S. Payne of the Eastern District of Texas recommended denying-in-part a motion for summary judgment of no willful infringement, holding that requisite knowledge of the asserted patent and alleged infringement of that patent could be satisfied by notice of the lawsuit before the moving defendant was added as a party.

What Can You Do Today?

We provide additional context regarding Magistrate Judge Payne’s decision below and will continue to cover the issue across the district courts and the Court of Appeals for the Federal Circuit, should it provide additional guidance. In the meantime:

• Practitioners in the Eastern District of Texas may satisfy the willful infringement requirement of pre-suit knowledge if an alleged infringer is notified of an existing infringement suit prior to being added to that suit as a named defendant.
• Among other diligence, would-be defendants in the Eastern District should consider obtaining an opinion of counsel upon the first notice of an allegation of infringement, regardless of whether notice is provided directly by the patentee, and especially in cases where a customer makes a demand for indemnification.

Procedural History of the Dispute

On February 18, 2021, Arigna Technologies, Ltd. sued several vehicle manufacturers, alleging infringement of U.S. Patent No. 7,397,318 directed to a voltage control oscillator for use in a microchip incorporated in radar modules provided to those manufacturers by non-party vehicle parts manufacturer, Continental. One month later, on March 18, 2021, one of the vehicle manufacturer defendants, Toyota, notified Continental of the suit. Plaintiff Arigna served initial infringement contentions on July 1, 2021, which identified Continental’s radar module as the sole infringing device. On July 14, 2021, Continental filed an action for declaratory judgment of noninfringement and invalidity in the Eastern District of Virginia. Days later, on July 22, 2021, Arigna filed its second amended complaint, naming Continental as a defendant.

Pre-Suit Knowledge May Be Satisfied by Knowledge of an Existing Suit Against Other Alleged Infringers

Continental and other automaker defendants moved for summary judgment of no willful infringement based on Arigna’s alleged failure to introduce evidence of pre-suit knowledge of the asserted patent or infringement thereof. Because Arigna did not respond to the automaker defendants’ arguments, the Court recommended granting the motion as to the willful infringement allegations against the non-Continental defendants. As to Continental, however, the Court found that the requisite pre-suit knowledge may have been provided to Continental at least from co-defendant Toyota’s March 18, 2021 notice to Continental stating that Continental’s component had been alleged to infringe the asserted patent. The Court found that this notice may provide the requisite pre-suit knowledge, even though it occurred after Arigna filed its initial infringement suit against the vehicle maker defendants, and the notice was a “direct result of the instant suit.” The Court also rejected Continental’s argument that pre-suit knowledge must be supplied by the patentee, as opposed to any other source such as, in this case, a fellow alleged infringer.

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