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SiOnyx, LLC v. Hamamatsu Photonics K.K.

United States District Court, D. Massachusetts

July 24, 2018

SIONYX, LLC and PRESIDENT AND FELLOWS OF HARVARD COLLEGE, Plaintiffs,
v.
HAMAMATSU PHOTONICS K.K., HAMAMATSU CORP., OCEAN OPTICS, INC., and JOHN DOES 1-10, Defendants.

          MEMORANDUM AND ORDER ON PLAINTIFFS' MOTION TO AMEND AND CROSS-MOTIONS FOR SUMMARY JUDGMENT

          F. Dennis Saylor, IV United States District Judge

         This is an action for patent infringement, breach of contract, and correction of inventorship. The technology at issue involves a device that improves the detection of near-infrared light, which has a variety of potential commercial and scientific applications. Plaintiff SiOnyx, LLC alleges that it approached defendant Hamamatsu Photonics K.K. (“HPK”) concerning a potential business partnership involving the technology. The parties entered into a nondisclosure agreement and SiOnyx provided HPK with certain technical information.

         SiOnyx alleges that after the approach proved unsuccessful, HPK violated the nondisclosure agreement, obtained patents on SiOnyx's technology without naming SiOnyx personnel as inventors, and infringed other patents held by SiOnyx. HPK contends that its engineers independently developed the technology contained in its patents and practiced by its products, and that it does not infringe SiOnyx's patents.

         Defendants have filed six separate motions for partial summary judgment. Plaintiffs have moved to amend the complaint and for partial summary judgment.[1]

         For the following reasons:

• HPK and HC's motion for partial summary judgment that SiOnyx's and Harvard's claims for breach of contract and unjust enrichment are barred by the statute of limitations will be denied;
• SiOnyx and Harvard's motion for leave to amend the second amended complaint will be denied as moot;
• SiOnyx's motion for partial summary judgment that HPK breached the nondisclosure agreement will be denied;
• HPK's motion for partial summary judgment on SiOnyx's unjust enrichment claim will be granted;
• HPK's motion for partial summary judgment on Harvard's unjust enrichment claim will be granted;
• HC's motion for partial summary judgment on SiOnyx's and Harvard's unjust enrichment claims will be granted as to the claim of Harvard and otherwise denied;
• HPK's motion for partial summary judgment on SiOnyx's claim for consequential damages will be denied;
• HPK's motion for partial summary judgment that Mazur is not a co-inventor will be granted.

         I. Background

         A. Factual Background

         The following facts appear to be undisputed.

         1.The Parties

         SiOnyx, LLC was founded in 2006 by Eric Mazur, a physics professor at Harvard University, and James Carey, his former doctoral student. (ECF 337-40 at 7:5-6, 8:3-9:7). Their goal was to commercialize laser-textured black silicon photodetectors, which had been the topic of Carey's Ph.D. dissertation and postdoctoral work in Mazur's laboratory. (ECF 337-40 at 9:15-11:11). Stephen Saylor joined SiOnyx in the fall of 2006 as President and CEO. (ECF 337-40 at 9:8-14).[2] SiOnyx owns U.S. Patent No. 8, 680, 591, which it asserts in this lawsuit. (ECF 163-2 ¶¶ 12-17, 19).

         The President and Fellows of Harvard College (“Harvard”) are the assignees of the other patent asserted in this lawsuit, U.S. Patent No. 8, 080, 467, which covers Mazur and Carey's work.[3] SiOnyx is the exclusive licensee of that patent. (ECF 342 Ex. G).

         Hamamatsu Photonics K.K. is a Japanese integrated photonics company that researches, develops, and manufactures optical devices and image sensors. (ECF 163-2 ¶¶ 54-55; ECF 178 ¶¶ 54-55; ECF 337-41 at 114:5-18). It is the assignee of U.S. Patent Nos. 8, 564, 087; 8, 629, 485; 8, 742, 528; 8, 884, 226; 8, 916, 945; 8, 994, 135; 9, 190, 551; 9, 293, 499; and 9, 614, 109, in addition to several Japanese patents covering similar inventions. (ECFs 337-22 through 337-31).

         Hamamatsu Corporation (“HC”) is the marketing and sales company responsible for distributing HPK's products in North America. (ECF 97 at 3). It is a New Jersey corporation with its principal place of business in New Jersey. (ECF 97 at 3). HC is a wholly owned subsidiary of Photonics Management Corp., which is a holding company owned by HPK. (ECF 97 at 3, 13). HC purchases products from HPK at a price set by HPK. (ECF 97 at 3; ECF 382-1 at 62:21-65:7). HC has the authority to set its own resale prices, and it separately profits from its sales to end users. (ECF 97 at 3; ECF 382-1 at 62:21-65:7).

         2.The Technology at Issue

         The technology at issue involves silicon photodetectors where one surface has been irradiated by a pulsed laser beam.

         The photodetectors use p-n photodiodes, which work by transforming light into electrical current. The photodiode is formed from a silicon semiconductor substrate that has two types of charge-neutral impurities: (1) those that donate electrons (n-type impurities) and (2) those that accept electrons (p-type impurities), which can be said to have electron “holes.” (ECF 377-1 at 87). When n-doped silicon is placed next to p-doped silicon, it creates a p-n junction, around which the electrons and holes rearrange themselves until they reach an equilibrium. (ECF 377-1 at 88-89). At equilibrium, there is a thin insulating layer at the juncture where the electrons and holes (charge carriers) have recombined (depletion region), and an electric field-created by the ions left behind when the electrons and holes diffused away-preventing further diffusion. (ECF 377-1 at 89; see ECF 201 at 13:10-14:20).

         The outermost electrons associated with the silicon substrate are said to be in the “valence band, ” and have a certain energy. The next-highest energy state available is in the “conduction band.” The difference in energy between the valence band and the conduction band is a physical property of the semiconductor material; for silicon, the band-gap energy is about 1.07 eV, which corresponds to light with a wavelength around 1100 nm. (ECF 377-1 at 1, 63-64).

         If a photon of sufficient energy (that is, for silicon, one with a wavelength of less than 1100 nm) interacts with the silicon substrate, it may transfer its energy to an electron in the valence band and promote it to the conduction band; in other words, the photon is absorbed. (ECF 377-1 at 63; see ECF 201 at 10:21-11:21). Higher-energy photons will be absorbed closer to the light-incident surface, while lower-energy photons are absorbed deeper in the substrate. (ECF 386 Ex E at HPK0022535; see ECF 201 at 12:8-13:9, 15:11-16:16).

         When a photon is absorbed, it creates an electron-hole pair (by promoting an electron to the conduction band). (ECF 377-1 at 93). If the photon is absorbed in the depletion region of the photodiode, the electron and the hole are immediately separated because of the electric field, which creates a current. (ECF 377-1 at 93-94). Photons absorbed too far away from the depletion region are much less likely to produce a current. (ECF 201 at 15:11-16:16).

         Thus, in an ordinary p-n photodiode, light enters through one surface of the photodiode and, to some extent, is absorbed in the depletion region, resulting in electric current. (ECF 377-1 at 63). Light that is not absorbed will either go right through the photodiode (in which case it does not contribute to the sensitivity of the photodiode) or reflect off the back surface of the photodiode back into the photodiode, in which case it has another opportunity to be absorbed and turned into current. ('109 patent, col. 7 ll. 24-34). Whatever portion of that light is still unabsorbed after a second trip through the photodiode will either pass through the light-incident surface (again without contributing to the sensitivity of the photodiode) or be reflected by that surface, and so on. ('109 patent, col. 7 ll. 34-37). Infrared light is more likely to go through the photodiode without being absorbed than visible light, because its longer wavelength (and correspondingly lower energy) is absorbed deeper in the substrate and its energy may be insufficient to bridge the band gap of the silicon semiconductor. (ECF 377-1 at 6-7, 63-64; see ECF 201 at 9:3-13; 12:1-7).

         The technology at issue seeks to improve the sensitivity of the photodiode to near-infrared light by irradiating a surface of the silicon substrate with a laser. That irradiation creates an irregular texture on the surface, so that, instead of being smooth, it has micro- or nanometer-scale features that cause the surface to look black to the human eye. (ECF 377-1 at 6-7). Changing the parameters of the irradiation protocol can change the size and shape of those features. (ECF 377-1 at 55 tbl.3.2).

         When applied to the back surface of a photodiode, the irregular asperity has the effect of improving the sensitivity of the photodiode to infrared light. In that case, the light enters the photodiode from one surface, and, as before, some is absorbed by the substrate. But instead of meeting a smooth surface on the backside of the photodetector, the unabsorbed light meets the irregular asperity. Light components that hit the asperity an angles greater than or equal to 16.6° will be totally reflected, and because the asperity is irregular, they will be reflected back toward the first surface and the side surfaces in many different directions. ('109 patent, col. 7 ll. 39-50). Because they are arriving from all different directions, they “are extremely highly likely to be totally reflected” on the first and side surfaces, and therefore to be “repeatedly totally reflected on different faces to further increase their travel distance” inside the photodiode. ('109 patent col. 7 ll. 51-59). By increasing the travel distance of light inside the photodiode, the asperity makes a thinner piece of silicon act “thicker, ” and infrared light that otherwise would pass through can be absorbed “deeper” than the photodiode actually is. (See ECF 201 at 16:12-18:3). The longer the light is trapped within the photodiode, the more likely it is to be absorbed and generate current, and the more sensitive the photodiode will be. ('109 patent, col. 7 l. 59-col.8 l. 2; see ECF 201 at 12:8-13:9; 17:20-18:3; 20:6-21:3).

         3. The 2007 Nondisclosure Agreement

         In late 2006, SiOnyx, through Mazur, reached out to HPK about a possible business relationship. (ECF 337-40 at 14:3-15:15; ECF 353 Ex. B at 119:4-24). Mazur, Carey, and Saylor went to Japan in November 2006 to meet with representatives of HPK, where Mazur gave a presentation introducing the technology. (ECF 386 Ex. F at 22:4-25:8; see Id. Ex. E).

         SiOnyx and HPK entered into a mutual nondisclosure agreement on January 11, 2007, to facilitate a possible business relationship. (ECF 337-2). The parties agree that this is a valid and enforceable contact. (ECF 400 at 1).

         The nondisclosure agreement provides:

Each of the parties has developed certain products, technology and methodologies, including information that each party regards as confidential, proprietary, trade secret information. Each party proposes to disclose certain of such information to the other party, to be used by the other party solely for the limited purpose of EVALUATING APPLICATIONS AND JOINTS [sic] DEVELOPMENT OPPORTUNITES OF PULSED LASER PROCESS DOPED PHOTONIC DEVICES and for no other purposes whatsoever (the “Permitted Purpose.”).

(ECF 337-2 at 1). The agreement defines “Confidential Information” as

any proprietary business, financial and technical information, whether oral, written, electronic, magnetic, visual or otherwise, of a party, disclosed by such party (the “Disclosing Party”) to the other party to this Agreement (the “Receiving Party”), including without limitation, information acquired by the Receiving Party from any business plan or similar document or from the Disclosing Party's employees or agents relating to the Disclosing Party's business, products, services, trade secrets, all forms of intellectual property, designs, methods, subscribers, customers, partners, suppliers, strategy, plans, opportunities, finances, research, development, know-how or personnel, and confidential information disclosed to the Disclosing Party by third parties.

(ECF 337-2 at 1). Although the nondisclosure agreement prohibits the use of confidential information for any purpose outside the “Permitted Purpose, ” it also provides that the prohibition

shall not apply to the extent that the Receiving Party can demonstrate that certain Confidential Information: (a) was in the public domain prior to the time of its disclosure under this Agreement; (b) entered the public domain after the time of its disclosure under this Agreement through means other than an unauthorized disclosure resulting from an act or omission by the Receiving Party; (c) was independently developed or discovered by the Receiving Party without use of the Confidential Information; or (d) is or was disclosed to the Receiving Party at any time, whether prior to or after the time of its disclosure under this Agreement, by a third party having no fiduciary relationship with the Disclosing Party and having no obligation of confidentiality with respect to such Confidential Information.

(ECF 337-2 at 1).

         SiOnyx and HPK agreed that any breach of the nondisclosure agreement would constitute irreparable harm, so that the “Disclosing Party” would be entitled to equitable relief to enforce the agreement. (ECF 337-2 at 2). And they agreed that all ownership rights in any intellectual property arising from “Confidential Information” would remain with the “Disclosing Party” in the absence of a separate written instrument expressly granting those rights. (ECF 337-2 at 2).

         4.The Confidential Architectures

         On January 16, 2007, Saylor and Carey met with Keith Kobayashi (of HPK's International Division) and Koei Yamamoto (Senior Executive Managing Director and General Manager of HPK's Solid State Division) by telephone to plan possible experimental prototypes. (ECF 337-3; ECF 337-40 at 17:13-19, 19:19-20:9).

         The following day, on January 17, 2007, Carey emailed Kobayashi “the first draft of a device architecture we would like to pursue.” (ECF 337-3 at 2). He explained that “[t]he suggested device architecture was selected based on our past experiments and what we believe is compatible with current Hamamatsu photodetectors, ” and he “also included two possible alternatives if the preferred architecture is difficult.” (ECF 337-3 at 2-3). The first of those alternatives-“Alternative #1”-showed a p-n photodiode where the laser-textured layer was positioned on the back of the device, opposite the side where light would enter the device. (ECF 337-3 at 5; ECF 337-40 at 19:13-20:21).

         Carey marked these architectures “confidential, ” and Kobayashi responded that he “forwarded the device diagram to Mr. Yamamoto and other related people who were notified of the confidentiality.” (ECF 337-5).

         Carey testified that he had discussed the architectures with Mazur prior to disclosing them to HPK and that the discussion was “collaborative.” (ECF 353 Ex. A at 334:20-335:9). He said, “We discussed architectures together . . . specifically that architecture that I feel like we taught to Hamamatsu was not one we had publicly disclosed and would benefit shortwave response, like it said in the description of architecture Alternative Number 1. How to take advantage of different properties ranging from the shortwave infrared response, the gain, and the photovoltaic near-infrared response.” (ECF 353 Ex. A at 336:14-22). But he also testified that he could not recall any writing or email between him and Mazur that would demonstrate that Mazur had collaborated on the architectures. (ECF 353 Ex. A at 335:10-15).

         Mazur also testified that he discussed the architectures with Carey. Looking at claim 1 of the '945 patent, he testified:

Q. Based upon that, what, if anything, do you believe you contributed to this claim?
. . . .
A. Certainly part of the second paragraph was the irregular asperity in the region opposed to the pn junction and the irregular asperity constituting the light incident surface.
. . . .
Q. Sure. So let me ask you this: Based upon what you just told me, when did you conceive of that idea?
A. Beginning during the year that [Carey] was a postdoc. And then the structuring on the back side, as shown also in the diagram on the front page, during the time that SiOnyx was collaborating with [HPK].
Q. Did you actually conceive of that while SiOnyx was collaborating with [HPK]?
A. It was [Carey] and I, and at some point [Saylor] discussed this idea.
Q. Was that in the time that [HPK] and SiOnyx were collaborating?
A. I believe so, yes.
Q. Did you tell it to Jim Carey and Steve Saylor, or did Jim Carey tell it to you?
A. It sort of emerged in a conversation.
Q. Was there anybody else there?
A. No. Because the only two people I really dealt with on a regular basis were [Carey], who was my former student, and [Saylor].
Q. Did you write it down?
A. I did not.
Q. So all there was was a conversation with you and Dr. Carey?
A. But he didn't write it out.

(ECF 353 Ex. B at 176:8-177:23).

         Carey testified that prior to his January 17, 2007 email, neither he nor anyone else at SiOnyx had ever discussed the idea of locating the laser-textured layer as depicted in Alternative #1 with anyone outside SiOnyx. (ECF 337-4 at 345:20-346:2; ECF 337-40 at 20:10-21:1).

         HPK produced a slide presentation created by Terumasa Nagano (of HPK's Microelectrical Mechanical Systems Manufacturing Development Group) in November 2006, prior to receiving the architectures from Carey. That presentation includes a device architecture that has a laser-textured surface on one side, and p-type region on the other side, like Carey's Alternative #1. (ECF 377-14 at HPK0068533). The diagram does not indicate the surface through which the light enters the device, and it needs to be flipped upside-down to match up with Alternative #1.

         5.The SiOnyx-HPK Collaboration

         On April 4, 2007, Saylor traveled to Japan to meet with representatives of HPK. At the meeting, HPK representatives showed a presentation created by Akira Sakamoto (of HPK's Solid-State Production Development Group) at the direction of Yamamoto. The presentation outlined a plan for HPK to make four types of silicon test wafers, each created by up to three different processes. (ECF 337-8 at 55:5-57:17; ECF 337-7). The wafers would be laser textured by SiOnyx, sent back to HPK for final processing, and tested for their optical-response characteristics. (ECF 337-8 at 14:6-15:3). That presentation showed architectures very similar to those proposed by Carey. (Compare ECF 337-3 with ECF 337-7).

         Between April and November 2007, SiOnyx and HPK jointly tested 38 wafers. HPK fabricated the test devices up until the laser-texturing step, and mailed them to SiOnyx for texturing. SiOnyx then returned them to HPK for final processing and testing. (ECF 337-8 at 14:3-15:3; ECF 337-40 at 44:21-45:20). The results of the testing showed that at least some of the devices that were laser-textured by SiOnyx had improved infrared photosensitivity as compared to one of HPK's standard devices. (ECF 337-9 at HPK0010411). The testing also showed that the photosensitivity of devices having the laser-textured surface on the side of the device opposite from the direction of incident light (front illuminated, in this case where the textured surface is on the back) had stronger performance than devices having the laser-textured surface on the same side as the incident light (back illuminated), which performed significantly worse than the reference device. (ECF 337-11 at 14).

         Some knowledge about laser-texturing devices was in the public domain-due, in part, to Mazur's many academic publications on the topic. Carey testified, however, that SiOnyx had discovered that there was a preferred target size for the structures making up the texture, which balanced optical response against certain disadvantageous properties. That texture, and the process for making it, was confidential information of commercial value to SiOnyx. (ECF 337-40 at 21:2-22:1). SiOnyx, when it textured the test devices from HPK, used its confidential process to produce its preferred texture. (ECF 337-40 at 49:21-50:14). But SiOnyx shared very limited information as to the process parameters for achieving that texture with HPK-nothing except the identity of the ambient gas in the laser-processing chamber. (ECF 337-10; ECF 45-2 at 69:4-15, 94:3-7). As part of the testing procedure, HPK took scanning-electron-microscope (“SEM”) images of the textures, which showed detailed images of textures achieved and allowed structural features of the textures to be measured. (ECF 337-9 at HPK0010405-08, HPK0010415). Carey testified that the size of the features shown in these SEM images were within the target range identified by SiOnyx, which he considered to be confidential. (ECF 337-40 at 49:5-50:14).

         The joint-testing program primarily took place between SiOnyx and HPK. Mazur was present at the initial meeting in November 2006 and discussed the confidential architectures with Carey. However, he was “kept out of the details” of the SiOnyx-HPK talks; “[o]ther than knowing that something was going on, [he] didn't know” what was being discussed. (ECF 382-17 at 149:18-152:8; see also ECF 353 Ex. A at 334:9-336:6 (Carey testifying that he does not recall Mazur being involved)). Mazur testified that he had “technical input into what SiOnyx was doing, but [he] was not informed of any-and [he] knew that [HPK] was making devices that were being structured at SiOnyx and then sent back. And [he] knew about plans to modify the architecture, but that's about the extent to which [his] exchanges . . . with [Carey] went, ” and that he had not reviewed any technical documents during this time. (ECF 382-17 at 152:2-16).

         Harvard had no confidentiality agreement with HPK, and had no involvement in the collaboration apart from the activities of Mazur. (ECF 342 Ex. F at 57:22-24). Harvard's Rule 30(b)(6) deposition witness testified that Harvard did not have any authority to approve or deny any terms within the nondisclosure agreement between SiOnyx and HPK. (ECF 342 Ex. F at 58:10-13).

         An employee of HC was at the initial November 2006 meeting, and another employee of HC actually signed the nondisclosure agreement on behalf of HPK, but following that there were no communications between SiOnyx and HC. (ECF 97 at 13; ECF 345 Ex. Q at 172:10-19, Ex. S at 255:3-256:21, Ex. U at 121:10-15).

         6.The End of the Collaboration and HPK's Further Activities

         After the testing was finished, Saylor and Kobayashi exchanged a few emails concerning the possibility of further tests. (ECF 337-12). But on January 15, 2008, Kobayashi responded as follows:

After discussing with related people mainly from technical aspects, we reached to the ...

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