April 18, 2014

Judge Andrews Dismisses Unsupported Willfulness Allegations

Judge Richard Andrews recently granted motions to dismiss claims of willful infringement in two cases brought by Steelhead Licensing LLC. Judge Andrews explained that there was apparently no reason for use of the word “willful” in the complaints because the plaintiff seemed to have no facts in support of an allegation of willfulness. Judge Andrews therefore granted the motions to dismiss willfulness, stating that “Plaintiff, who I would expect might have an interest in moving this case along, puts itself at the mercy of the Defendants, who can stall by making a motion to dismiss, and the Court, whose default decisional standard is LILO.” Steelhead Licensing LLC v. Charter Commc’ns Inc., et al., C.A. No. 13-2075-RGA, 13-2076-RGA, Order at 1-2 (D. Del. Apr. 10, 2014).

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April 16, 2014

Judge Stark grants motion to transfer to the Northern District of California.

Judge Leonard P. Stark recently transferred a case to the Northern District of California based in part on the plaintiff’s actions and representations made to the Judicial Panel on Multidistrict Litigation. Genetic Technologies Ltd. v. Natera, Inc., C.A. No. 12-1737-LPS (D. Del. Apr. 15, 2014). Specifically, the Court noted that “[b]efore the [JPML], [the plaintiff] contended the Northern District was preferable to Delaware as a venue for centralizing pre-trial litigation.” Id. at 3. The JPML declined consolidating the cases into an MDL, leaving the plaintiff litigating in Delaware, North Carolina, New Jersey, and the Northern District of California. Although Judge Stark found that the plaintiff had rational reasons for wanting to litigate this action in Delaware, the Court found that the plaintiff's representation to the JPML, as well as several other Jumara factors (including, notably, the convenience to the parties of litigating in Northern California, where the defendant's principle place of business is located and which is some 2,500 miles closer to the plaintiff's Australian headquarters than Delaware), weighed in favor of transferring the case. Id. at 2-4.

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April 16, 2014

Chief Judge Sleet resolves competing proposals on appropriate post-verdict royalty rates.

Chief Judge Gregory M. Sleet recently issued a memorandum and order resolving a post-trial dispute regarding the appropriate royalty rate to apply to post-verdict infringement. Telcordia Technologies, Inc. v. Cisco Systems, Inc., C.A. No. 04-876-GMS (D. Del. Apr. 14, 2014). The Court previously had found that a permanent injunction was not warranted, and ordered the parties to negotiate the terms of a reasonable royalty rate for post-verdict infringement. Id. at 1. The parties were unable to reach agreement, however, and ultimately submitted competing proposals that amounted to a difference of roughly $8.9 million. Id. at 4.

Chief Judge Sleet noted that royalty rates applied to post-verdict ongoing infringement frequently exceed royalty rates found at trial because of the parties’ changed legal status following a verdict, but that market circumstances also need to be considered in the analysis. Id. at 7. The Court found that the plaintiff was in a stronger bargaining position after prevailing at trial, and on appeal, but was not in a strong enough position to warrant the 3.5% “market rate” the plaintiff proposed with respect to its ‘763 and ‘633 patents (through the expiration of the ‘763 patent, after which the plaintiff proposed a 2% market rate through the expiration of the ‘633 patent). Id. at 8. The defendant proposed an “effective rate” of 0.64% on the two patents. The Court ultimately found that a 1.25% royalty rate on the ‘763 patent, and a 1% royalty rate on the ‘633 patent, were appropriate under the circumstances. Id. at 9.

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April 16, 2014

Judge Andrews Claim Construction Order

Judge Richard G. Andrews construed the following claim terms of U.S. Patents Nos. 6,335,031 and 6,316,023 at issue in the Novartis Pharmaceuticals Corp., et al. v. Alvogen Pine Brook, Inc., et al., C.A. No. 13-52-RGA (consol.) (D. Del. Apr. 7, 2014) litigation:

"about 0.01 to about 0.5 percent by about 0.01 to about 0.5 percent by
"diluent or carrier"
"a/the composition"
"an amount of antioxidant effective to stabilize Compound A from degradation"

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April 15, 2014

Judge Robinson sanctions plaintiff for objectively unreasonable claim construction position; grants summary judgment of invalidity.

Judge Sue L. Robinson recently sanctioned a plaintiff for its objectively unreasonable claim construction position. Technology Innovations, LLC v. Amazon.com, Inc., Civ. No. 11-690-SLR (D. Del. Mar. 31, 2014). At issue was the plaintiff’s allegation (later withdrawn following a motion to dismiss and for sanctions) that Amazon.com’s Kindle product infringed the plaintiff’s U.S. Patent No. 5,517,407, titled “Device for including enhancing information with printed information and method for electronic searching thereof.” As the Court explained, “[t]he specification is replete with references to providing ‘enhancing information’ to aid the reader of ‘printed information’ and makes it clear that ‘printed information’ refers to pages provided in a conventional book.” Id. at 22. Further, the “background of the invention indicates that the patentee was concerned with problems associated with printed and electronic indices then available to users of printed publications. . . . The patent distinguishes electronic books from the present invention and points out that ‘they do not enhance printed publications. . . . Additionally, figures 1-8 illustrate a book with printed pages.” Id.

The Court therefore explained that the plaintiff’s “definition for ‘printed’ – to encompass ‘any configuration in which information is presented for direct human perception’ – is astonishingly broad.” Id. at 23. The plaintiff's proposed construction was based on a sentence in the specification referring to a printed work as a "configuration in which information is presented for direct human perception." Id. at 23-24. But the Court noted that the plaintiff ignored the next sentence in the specification, which provided, "[t]hus, for example, in addition to a cloth- (or other hard-) bound, or soft-bound book, work 11 may be a magazine, or other paper based media . . . ." Id. at 24. Finding that it was not objectively reasonable in this case to allege that a Kindle would infringe the '407 patent, the Court sanctioned the plaintiff under Rule 11. Id. at 24.

The Court also granted the defendant’s motion for summary judgment of invalidity of the plaintiff’s remaining asserted U.S. Patent No. 7,429,965, based on indefiniteness.

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April 11, 2014

Judge Andrews denies partial summary judgment motion of indefiniteness

In a recent memorandum opinion, Judge Richard G. Andrews denied defendant’s partial summary judgment motion of indefiniteness. Pi-Net International Inc. v. JPMorgan Chase & Co., C.A. No. 12-282-RGA (D. Del. Apr. 7, 2014). Given the potential for judicial efficiency, Judge Andrews had granted defendants leave to file their partial motion for summary judgment, in which it was argued that the following five terms, which appeared in several claims of the three patents-in-suit, were indefinite:

(1) "means for transmitting a transaction request from said transactional application";
(2) "means for processing said transaction request";
(3) "a computer system executing the Back-end transactional application for processing the transaction request in real-time";
(4) "keeping a transaction flow captive";
(5) "routed transactional data structure."

Id. at 2. As to the first two terms, defendant argued that the terms were “computer-implemented means-plus-function terms for which no algorithm is disclosed.” Id. Judge Andrews explained that in general, when there exists the “special case where the corresponding structure of a means-plus-function term is a computer, the patent must disclose an algorithm for performing the claimed function.” Id. at 6. Judge Andrews further explained, however, that there is a “narrow” exception to that general rule: the Federal Circuit has held that “it is ‘not necessary to disclose more structure than the general purpose processor’ when the claimed functions ‘can be achieved by any general purpose computer without special programming.’” Id. (quoting In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011)).

As Judge Andrews explained, “[a]t this stage, the Court cannot rule out the possibility that a general purpose computer without special programming could perform the claimed function, or that an algorithm is disclosed.” Id. at 8. Specifically, Judge Andrews explained that defendant argues strenuously that the terms are invalid because the functions at issue require more than simply plugging in a general purpose computer.” Id. at 12. Judge Andrews explained, however, that in order to agree with defendant’s position, “an expert opinion comparing the functional capabilities of a general purpose computer during the relevant time frame with the disputed functionalities might have been helpful.” Id. Defendant, however, did not provide any such opinion. Judge Andrews thus concluded that based on the current record, which lacked “the benefit of a claim construction hearing, it [was] difficult to say that no disputed issue of material fact exists regarding whether the claimed functions could have been performed by a general purpose computer without special programming.” Id. at 13. Judge Andrews additionally noted that even if the exception for a “general purpose processor” did not apply, “the flow chart in Figure 8, common to all three patent specifications, might be sufficient to satisfy the algorithm requirement.” Id. at 12.

As to the third term, Judge Andrews noted in a parenthetical that a court will not construe a limitation as a means-plus-function term if it contains a term that "is used in common parlance or by persons of skill in the pertinent art to designate structure." Id. at 13. As Judge Andrews explained, the claim term at issue included “computer system,” and therefore could not be said to be “devoid of anything that can be construed as structure.”Id. at 15. In other words, “[a] computer system is a physical structure that [was] sufficient to prevent [defendant] from rebutting the presumption” that a term that does not contain the word “means” should not be construed as a means-plus-function term. Id.

As to the last two terms, plaintiff asserted that they were “insolubly ambiguous because the patentee did not define them in the specification or the prosecution history and they do not have a generally accepted meaning to a PHOSITA.” Id. at 2-3. Judge Andrews explained that “[a]lthough it does appear that the link between [plaintiff’s expert’s] cited passages and his proposed definitions is somewhat tenuous in places, there is no competing declaration or affidavit from [a defendant] expert for the Court to rely upon.” Id. at 16. That is, “[w]ithout an opposing expert to identify the deficiencies, if any, in [plaintiff’s expert’s] declaration, it is difficult to say that his opinion regarding a PHOSITA's understanding of the claim language is incorrect.” Id.

In accordance with the analysis above, Judge Andrews denied defendant’s partial motion for summary judgment.

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April 11, 2014

Judge Robinson Denies Motions to Dismiss Based on Lack of Title to Patent-in-Suit

Judge Robinson has issued a decision on several pending motions to dismiss for lack of subject matter jurisdiction in cases filed by plaintiff Data Speed Technology LLC. The moving defendants alleged lack of standing to sue because the plaintiff had not demonstrated that it owns all rights in the patent-in-suit. Judge Robinson ultimately denied the motions, but not before indicating that the chain of ownership of the patent-in-suit was “in a muddle.” The chronology of ownership of the patent-in-suit was complicated, even including litigation over title to the application leading to the patent-in-suit, and Judge Robinson explained the chain of title in depth after pulling relevant facts from several different parties’ submissions. Ultimately, although she found the “efforts of [the inventors] to monetize their invention through [assignment to] another individual . . . [could] be charitably characterized as less than sophisticated,” for the purposes of the motions to dismiss, the chain of title had been sufficiently proven. Data Speed Tech. LLC v. EMC Corp., et al., C.A. No. 13-616-SLR, et al., Memo. at 10 (D. Del. Apr. 8, 2014).

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April 11, 2014

Judge Robinson denies motion for judgment on the pleadings that defendant's cardboard box is not substantially similar to the patented design

Judge Sue L. Robinson recently denied defendant's motion for judgment on the pleadings based on the argument that defendant's "cardboard box design is 'not substantially similar' to the patented design." Poly-Am., L.P. v. API Indus., Inc., C.A. No. 13-693 (D. Del. Apr. 10, 2014). Judge Robinson compared the accused and patented designs to conclude that they are not "plainly dissimilar." Id. at 3. To reach this conclusion, Judge Robinson applied the standard from Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008). In particular, a patentee cannot meet its burden of proving that the two designs "would appear 'substantially the same' to the ordinary observer" if the claimed and accused designs are sufficiently distinct." Id. at 2. However, if the claimed and accused designs are not "plainly dissimilar, resolution of the question whether the ordnary observer would consider the two designs to be substantially the same will benefit from a comparison of the claimed and accused designs with the prior art . . . ." Id. Further, if a design contains both ornamental and functional features, the court may "'separate the function and ornamental aspects' because the scope fo the design claim 'must be construed in order to identify the non-functional aspects of the design as shown in the patent.'" Id. (quoting Richardson v. Stanley Works, Inc., 597 F.3d 1288, 1293 (Fed. Cir. 2010).

Judge Robinson disagreed with defendant that certain features of the accused design were different than the patented design. In particular, defendant argued that the accused design had bottom flaps rather than a solid bottom. Id. at 3. Judge Robinson held that "[t]he solid bottom cannot be a design difference that renders the accused product substantially dissimilar because it is not an ornamental design feature." Id. (citing Egyptian Goddess, 543 F.3d at 680). Judge Robinson also rejected defendant's argument that "the accused design has no top flaps with no tabs and no slots." Id. Judge Robinson noted that "an ordinary observer does not watch the box being formed in the manufacturing facility but, instead, sees the box when it is merchandised in the store. The ordinary observer, therefore, would not observe the tabs and slots, as the box top remains closed during the normal use of the container." Id. Judge Robinson also found that there remained issues of fact whether certain features of the accused design, such as the perforated opening of the accused design is a relevant difference, such that "an ordinary observer would acutally open the accused box to its full extent if not necessary to reach the product." Id. at 4. Judge Robinson also declined to find as a matter of law that the "overall visual differences between the accused design and patented design are greater than the differences between the patented design and the prior art." Id. at 6. (citing Egyptian Goddess, 543 F.3d at 678).

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April 10, 2014

"Conditional counterclaims" against DJ plaintiff/supplier insufficient to create jurisdiction, according to Federal Circuit

In Microsoft Corporation v. DataTern, Inc., the Federal Circuit made clear that conditional counterclaims and conditional statements of infringement alleged against a declaratory judgment plaintiff are insufficient to establish declaratory judgment jurisdiction. The Court noted, “[a] declaratory judgment plaintiff must plead facts sufficient to establish jurisdiction at the time of the complaint, and post-complaint facts cannot create jurisdiction where none existed at the time of filing.” The Court further noted that, even if post-complaint facts could be considered in evaluating DJ jurisdiction, the defendant/patentee’s conditional allegations and a refusal to grant a covenant not to sue are not the type of facts to support DJ jurisdiction. ...

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April 8, 2014

Judge Andrews Construes Terms of Blood Pressure Patent

Judge Andrews recently issued his amended construction of several disputed terms in U.S. Patent No. 6,565,514, a blood pressure system patent asserted by St. Jude against Volcano Corp. The Court construed the following terms:
- “Displaying said graph”
- “of the data resulting from said calculation”
- “Detecting continuously at least two physiological variables, arterial pressure (Pa) and distal coronary pressure (Pd), derived from the guidewire-mounted pressure sensor”
- “Sensor element”

In construing these terms, Judge Andrews also found that the term “of the data resulting from said calculation” was not indefinite. St. Jude Med., Cardiology Div., Inc., et al. v. Volcano Corp., C.A. No. 12-441-RGA, Or. at 1-5 (D. Del. Apr. 1, 2014).

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