Orbit IP scored significant victories in August for clients SourceBlue, LLC and its supplier, Infinilux Corporation, in their patent and business interference litigation with NICOR, Inc.  Two years ago, NICOR filed a patent infringement action against SourceBlue related to a lighting control unit (“LCU”) that Infinilux supplies SourceBlue. In response, SourceBlue and Infinilux sought declaratory judgment of no infringement and patent invalidity. In addition, SourceBlue and Infinilux brought various state law claims against NICOR, including for unfair competition, tortious interference, and slander of title/trade libel. In response, NICOR asserted state law claims for unfair competition and tortious interference against SourceBlue and Infinilux. 

Earlier this summer, each side moved for summary judgment on certain claims and defenses. SourceBlue and Infinilux also filed Daubert motions to preclude NICOR’s experts from providing portions of their proposed expert testimony. United States District Judge André Birotte, Jr. decided the motions on August 30, 2023. 

The Court granted summary judgment that SourceBlue and Infinilux are not liable for indirect infringement. The Court also granted SourceBlue and Infinilux summary judgment on NICOR’s state law claims. In contrast, the Court denied NICOR’s motion for partial summary judgment on the issue of direct infringement and as to SourceBlue and Infinilux’s respective state law claims brought against NICOR. As a result, the principal issues for trial have been narrowed to SourceBlue and Infinilux’s state law claims, NICOR’s direct infringement claims, and the validity (or lack thereof) of the asserted patent. SourceBlue and Infinilux believe, however, that the Court’s claim construction rulings included in its August 30th order preclude a finding of direct infringement in favor of NICOR as a matter of law.

With respect to SourceBlue and Infinilux’s Daubert motions, the Court excluded portions of NICOR’s technical expert’s opinions relating to SourceBlue and Infinilux’s invalidity defenses based on lack of written description and enablement as being inconsistent with law and unreliable. The Court also ruled that NICOR’s damages expert cannot refer to SourceBlue and Infinilux’s conduct as “wrongful” because that is an issue for the Court and the expert’s use of the term would be prejudicial. The Court also struck the opinions of NICOR’s damages expert related to NICOR’s state law claims as being moot in view of the Court’s grant of summary judgment in favor of SourceBlue and Infinilux on all of NICOR’s state law claims. The Court further struck the opinions of NICOR’s damages expert as being untimely on two of the three datacenter projects for which NICOR sought damages. And finally, the Court excluded the lost profits opinions of NICOR’s damages expert to the extent his calculations included sales from NICOR’s subsidiary, NICOR International. Although SourceBlue and Infinilux believe NICOR cannot prevail on its direct infringement claim at trial in light of the Court’s various rulings, even if it were to succeed in proving direct infringement, the Court’s rulings severely limit the damages NICOR could be awarded.

Orbit IP looks forward to moving the litigation toward a positive resolution for its clients.  The Orbit IP team includes partners David A. Randall, Ehab M. Samuel, and Tom Brindisi. The case is Nicor Inc. v. SourceBlue LLC et al., U.S. District Court for the Central District of California, No. 2:21-cv-05876-AB(PDx).