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In a recent Report and Recommendation, Chief Magistrate Judge Mary P. Thynge granted defendants’ renewed motion for attorneys’ fees. Magnetar Technologies, Corp. v. Six Flags Theme Parks, Inc., C.A. No. 07-127-LPS-MPT (D. Del. Mar. 13, 2017). Previously, on July 21, 2015, Judge Thynge issued a Report and Recommendation finding that, in view of the totality of the circumstances, the case was exceptional based on plaintiffs’ objectively unreasonable position on inventorship of U.S. Patent No.  5,277,125 (“the ‘125 patent”) and plaintiffs’ reliance on Mark T. Hanlon’s expert report with respect to infringement of the ‘125 patent. On September 30, 2015, having considered plaintiffs’ objections to that Report and Recommendation and defendants’ subsequent response, Chief Judge Leonard P. Stark returned the issue of attorneys’ fees to Judge Thynge for additional findings.  On November 31, 2015, defendants filed the instant renewed motion for attorneys’ fees. See id. at 6.

In granting the renewed motion, Judge Thynge first reaffirmed the court’s conclusion “that plaintiffs’ position on the issue of inventorship was objectively unreasonable and defendants are entitled to fees incurred following the depositions in late July 2011” that demonstrated incorrect inventorship. Id. at 17-18. Judge Thynge also reaffirmed the court’s conclusion that plaintiffs’ reliance on Hanlon’s expert report was objectively unreasonable. Id. at 19.

Judge Thynge further found that attorneys’ fees in this action were “warranted to deter parties from continuing to maintain claims based on objectively unreasonable positions,” and “to compensate the defendants in this case for the expenses in defending claims that should not have been maintained.” Id. at 29. As Judge Thynge explained, “[p]laintiffs’ continued litigation of the ‘125 patent after the Chung and Staehs depositions revealed the inventorship issue with that patent improperly increased defendants’ litigation expenses by forcing them to continue to defend against the infringement claim and pursuing a ruling that the patent was invalid.” Id. at 29-30.

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Judge Gregory M. Sleet recently considered defendants’ motion to stay pending inter partes review of one patent in suit.  f’Real Foods, LLC v. Hamilton Beach Brands, Inc., No. 16-41-GMS (D. Del. Mar. 9, 2017).  Judge Sleet denied the motion, finding that the plaintiff would suffer undue prejudice and because the litigation at issue “will be minimally simplified.”  Id. at 2.  Judge Sleet importantly noted that the parties are direct competitors and that the Patent Trial and Appeal Board instituted inter partes review on only one claim of one of the patents in suit.  Id. at 2, n.3.  Further, there were many issues in the litigation  that would not be impacted by the inter partes review, namely “the litigation of the two patents-in-suit for which Defendants have not sought IPR, trademark infringement issues, and Defendants inequitable conduct and antitrust counterclaims.”  Id. at 3, n.4 (internal quotations omitted).

f’Real Foods, LLC v. Hamilton Beach Brands, Inc., No. 16-41-GMS (D. Del. Mar. 9, 2017)

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In Boston Scientific Corporation, et al. v. Edwards Lifesciences Corporation, C.A. No. 16-275-SLR-SRF (D. Del. Feb. 28, 2017), Magistrate Judge Sherry R. Fallon granted defendant and counterclaim/third-party plaintiff (collectively, “Edwards”)’s motion for leave to amend their answer to add a prior use defense pursuant to 35 U.S.C. § 273.

Evaluating the proposed amendment under Rule 15, the Court concluded that the proposed affirmative defense was “factually sufficient” for this stage of the proceedings, where Plaintiffs had not pointed to any authority requiring a heightened pleading standard for affirmative defenses – rather, affirmative defenses are not held to the same pleading standard as claims or counterclaims. Id. at 3-4.  The Court also held that the new defense would not cause undue delay where the motion was filed prior to the case’s deadline for amendment of pleadings and where the case was in its early stages, with fact discovery closing in spring 2017. Id. at 4.  As to prejudice, although Plaintiffs “claim[] that [they] did not anticipate the addition of Edwards’ prior use defense when [they] negotiated the discovery limits in the scheduling order, [Plaintiffs] acknowledged the possibility of an amended answer by stipulating to the deadline for amended pleadings in the scheduling order at the time of discovery negotiations.” Id. at 5.

However, “[t]o the extent [Plaintiffs] would be prejudiced by the need to obtain additional discovery directed to the prior use defense, a limited grant of additional discovery [was] warranted.” Id. Accordingly, the Court granted Plaintiffs’ request for an increase in their limits on discovery requests and an extension to serve new document requests, but did not provide Plaintiffs with the full requested increase, as “[i]n view of the unused requests available to [Plaintiffs] under the scheduling order . . . the number of additional requests sought by [Plaintiffs] is unnecessary.” Id. at 6.

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In this case, Plaintiff T-Jat systems alleged in its operative complaint that the three Defendants, Expedia, Inc. (Delaware), Expedia, Inc. (Washington), and Orbitz Worldwide Inc. “operate as a single entity” with a high degree of intermingling. T-Jat Systems 2006 Ltd. v. Expedia, Inc., et al., C.A. No. 16-581-RGA-MPT, Report and Recommendation at 1-3 (D. Del. Mar. 7, 2017). In response to this allegation, the Defendants moved to dismiss, arguing that “the first amended complaint fails to satisfy the pleading requirements of FED. R. CIV. P. 8(a) because it does not set forth facts sufficient for a facially plausible claim from which the court can infer the alleged misconduct . . . [particularly because] T-Jat’s allegations that Expedia-DE and Expedia-WA acted as one entity because of the companies’ parent-subsidiary relationship [is] far fetched, and the first amended complaint fails to show ‘facts that justify piercing the corporate veil.’” Id. at 5.

Magistrate Judge Thynge first rejected Plaintiff’s alter-ego theory, finding that “T-Jat has, at best, alleged sufficient facts to establish . . . a failure to observe corporate formalities and subsidiary companies acting as a façade for the parent companies” but not additional factors that would help prove a true alter-ego relationship. Plaintiff alleged sharing of certain officers and directors, sharing of a headquarters and offices, and a collective identify on marketing and promotional materials. “However, T-Jat does not allege the second element of fraud or injustice of use of the corporate form in either case. Recent case law from this court establishes that factual allegations of ‘nothing more than a close relationship and coordination among defendants,’ including operational control of the parent company over subsidiaries, is insufficient under Rule 12(b)(6). As such, the alter-ego theory against all three defendants is inadequate to meet the minimum pleading requirements.” Id. at 9-12.

Judge Thynge refused to dismiss, however, Plaintiff’s agency theory, explaining that “[o]ne can reasonably infer Expedia-DE’s control over Expedia-WA and Expedia’s control over Orbitz from the alleged facts. Further, the court can reasonably deduce Expedia-DE directed Expedia-WA’s actions, and likewise Expedia directed Orbitz’s activities relating to the underlying cause of action, the allegedly infringing mobile and website applications, based on the close connection between the respective companies. Although this corporate closeness may not be sufficient to succeed on agency theory at later stages in litigation, it is sufficient to survive a motion to dismiss, if the parties are properly and individually identified.” Id. at 12-13.

Finally, Judge Thynge agreed with Defendants that the complaint improperly conflated separate entities into a generic “Defendants” rather than pleading sufficient facts against each individual Defendant: “Although T-Jat’s assertions of Orbitz’s individual infringement may be facially plausible, the allegations as to Expedia-DE and Expedia-WA do not clarify that each defendant committed at least one infringing act. Therefore, the first amended complaint fails to provide Defendants with adequate notice of the direct infringement allegations against them and fails to meet the minimum pleadings standard.” Id. at 14-15.

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On January 23, 2017, Magistrate Judge Christopher J. Burke issued a standing order regarding courtroom opportunities for newer attorneys. The standing order explains that “[t]he Court is cognizant of a growing trend in which fewer cases go to trial, and in which there are generally fewer opportunities in court for speaking or ‘stand-up’ engagements. This is especially true for newer attorneys, that is, attorneys practicing for less than seven years (‘newer attorney(s )’).” Id. at 1. The standing order goes on:  “Recognizing the importance of the development of future generations of practitioners through courtroom opportunities, the undersigned Judge encourages the participation of newer attorneys in proceedings in my courtroom—particularly as to oral argument on motions where the newer attorney drafted or contributed significantly to the briefing for the motion.”

Accordingly, Judge Burke adopted the following procedures regarding oral argument as to pending motions:

  1. After a motion is fully briefed, either as part of a Request for Oral Argument, or in a separate Notice filed thereafter, a party may alert the Court that, if argument is granted, it intends to have a newer attorney argue the motion (or a portion of the motion).
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In a recent Memorandum Order, Magistrate Judge Christopher J. Burke denied plaintiffs’ (“Integra”) motion for leave to file an amended complaint, concluding that “to grant the Motion would cause substantial and undue prejudice to Defendant.” Integra LifeSciences Corp. v. Hyperbranch Medical Technology, Inc., C.A. No. 15-819-LPS-CJB (D. Del. Feb. 16, 2017). First, Judge Burke observed that the parties and Court have “spent substantial time and effort attempting to address and narrow the issues in what is already a large, complex matter.” Id. at 2.  As Judge Burke explained, the action is a “six-patent case” and one patent “involves complicated chemical technologies.” Id. Judge Burke further explained that the “parties . . . proceeded through a lengthy and involved preliminary injunction phase,” and since then, they “have expended more time on discovery (and on discovery disputes), have narrowed the number of claims and references at issue, and are currently in the midst of claim construction briefing (involving 20 disputed claim terms).” Id.

Second, Judge Burke found that the additions in the proposed Amended Complaint, which sought to add two new patents, “are not minor.” Id. While Judge Burke acknowledged that there is some overlap between the operative complaint and proposed Amended Complaint, he observed that the new patents had different inventors and implicated embodiments not directly at issue with the original patents. Id. at 2-3. Judge Burke further observed that defendant “is  . . . understandably concerned with how a jury will be able to grasp its arguments at trial, were a case as large as this to become ever larger after amendment.” Id. at 3.

Third, Judge Burke found that “were the Motion granted, this would surely do violence to the current case schedule.” Id. Judge Burke explained that “the addition of the new patents will no doubt necessitate significant additional fact and expert discovery, claim construction and discovery dispute proceedings, and dispositive motion practice.” Id. Further, “[t]he current trial date would surely be lost, and the case schedule would no doubt need to be pushed back by many months (at least).” Id.

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In Callwave Communications, LLC v. Verizon Services Corp., et al., C.A. No. 12-1704-RGA (D. Del. Feb. 13, 2017), Judge Richard G. Andrews granted Plaintiff’s motion to enforce the settlement agreement between Plaintiff and intervenor Telecommunication System Inc. (“TCS”) who had indemnified Defendants. The parties disagreed as to whether an agreement had been reached in principle, where TCS had agreed to Plaintiff’s terms via email, the parties had filed a stipulation to stay the case pending finalization of the agreement, and where “drafts, comments, and edits were exchanged.” Id. at 2. In the intervening period, the Court had granted another party’s Section 101 motion to invalidate one of the patents-in-suit.

Applying Delaware law, the Court observed that “[o]bjective indicators demonstrate that a contract was made. First, the August 8th email clearly demonstrates that TCS believed an agreement had been reached. The August 8th agreement set out the payment terms and a July 21st email set out the boundaries of the license Callwave would offer TCS. Intermediate emails demonstrated that the terms from the July 21st email carried through and were part of the agreement struck on August 8th. For example, a July 22nd email thanked Callwave for ‘agreeing to the terms, other than payment’ and confirming that the covenant not to sue would allow damages to accrue. These emails used the language of contract – ‘this formal offer’ – and the language of resolution -‘my client accepts.’ Second, the stipulation filed with this court clearly indicates an agreement had been reached.” Id. at 3 (internal citations omitted). Additionally, “the tenor of the comments in the drafts reflect an effort to memorialize an agreement already reached.” Id. The fact that some open terms remained regarding, for example, assignability, notice, choice of law, and confidentiality did not mean that the contract did not contain “all essential terms” and was thus enforceable under Delaware law. Id. at 4.

Having found an enforceable contract existed, the Court ordered specific performance, including all terms “either explicitly agreed to or included in responding drafts without comment or suggested revision.” Id. at 4.

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In W.L. Gore & Associates, Inc. v. C.R. Bard, Inc., et al., C.A. No. 11-515-LPS (D. Del. Feb. 8, 2017), Chief Judge Leonard P. Stark issued decisions on various motions in limine prior to the parties’ upcoming pretrial conference.

Regarding Plaintiff’s motion to exclude “evidence and argument relating to discovery disputes,” the Court granted the motion in part, explaining that “[i]t would be improper, irrelevant, unfairly prejudicial, and confusing to the jury for the parties to refer to or re-fight discovery disputes at trial. Any minimal probative value there may be would be substantially outweighed by the countervailing concerns of Federal Rule of Evidence 403.” Id. at 1. However, “where relevant,” the Court would permit the parties to “make reference to the timing with which an expert was provided with particular evidence – and how that evidence did (or did not) impact the expert’s analysis and opinion- but without stating or suggesting to the jury that such production was late, untimely, or in any manner improper.” Id. The Court denied Plaintiff’s motion to preclude arguments purportedly contrary to the Court’s claim construction because it was not persuaded that certain slides to be used in Defendants’ opening statement were contrary to the Court’s claim construction. Id. at 2.

As for Defendants’ motions in limine, the Court first granted their motion to exclude evidence or argument relating to a certain product of Defendants not marketed in the U.S during the term of the patent-in-suit, explaining that “Plaintiff’s allegations as to the ‘apparent infringement’ of the patent-in-suit by these stent grafts are untimely and unsupported by evidence in the record. Permitting Plaintiff to do as it proposes would be unfairly prejudicial to Defendants – who have had no incentive or opportunity in this action to develop non-infringement evidence relating to these products – and confusing to the jury, concerns that substantially outweigh whatever minimal probative value this evidence might have.” Id. But the Court denied Defendants’ motion to exclude Defendants’ license agreements resulting from settlement, as their concerns could be adequately addressed through cross-examination. Id. at 3.

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Chief Judge Stark recently issued an order addressing several motions to strike or supplement contentions and to strike expert reports. Judge Stark first found that the plaintiff’s “final infringement contentions fail to provide Defendants adequate notice of ‘how the accused products allegedly meet [a certain] limitation’” because the contentions addressed only half of the Court’s claim construction of that limitation and appeared to rely, instead, on the plaintiff’s proposed construction, which had been rejected. Intellectual Ventures I LLC v. AT&T Mobility LLC, et al., C.A. No. 13-1668-LPS, Memo. Or. at 3-4 (D. Del. Feb. 14, 2017). Judge Stark found that this “failure to serve infringement contentions that apply the Court’s claim construction was neither substantially justified nor harmless,” which supported striking the contentions. Id. For the same reasons, Judge Stark also struck the plaintiff’s doctrine of equivalents contention for the same patent, which the plaintiff contended was “based on the same evidence” as its deficient literal infringement contention. Id. at 6. Judge Stark denied, however, a motion to strike the plaintiff’s infringement theory for a separate patent, which the defendant claimed was untimely because it was served two weeks before the close of fact discovery. The Court agreed that the “infringement theory, which is contained in its timely served infringement contentions, should not be stricken. While it appears [the plaintiff] had formulated its [theory] prior to August 2016, it was appropriately pursuing discovery with respect to that theory·in the preceding months, and it permissibly relied on the opportunity provided in the scheduling order to finalize infringement contentions after the Court’s claim construction order.” Id. at 9-10.

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Chief Judge Stark recently considered several pre-trial motions for summary judgment in this litigation between Plaintiff Intellectual Ventures and Defendant Symantec. Two of the summary judgment motions at issue were cross-motions directed to Section 101 patent eligibility. Judge Stark ultimately found that the claims at issue, directed to a method of remote mirroring of data for back-up purposes, were not patent eligible. Intellectual Ventures I LLC, et al. v. Symantec Corp., et al., C.A. No. 13-440-LPS, Memo. Op. at 7-11 (D. Del. Feb. 13, 2017). Judge Stark first found that the claims were directed to “the abstract idea of backing up data. The claims recite the basic steps of copying data from one location to another several times and sending a confirmation that the data has been received. It is undisputed that institutions have long backed up data in general, and the specification even describes long-practiced methods of backing up digital data. Additionally, courts have found similar claims – about storing or copying information – as being within the realm of abstract ideas.” Id. at 8. And although the patent specification described several disadvantages of prior art back-up methods, “[t]he claims do not provide any concrete details that limit the claimed invention to a specific solution to the problem of remote back-up of digital data. The claims simply rely on functional language to describe copying and confirmation steps. Additionally, the claims use existing computer functionality as a tool to better back up data and do not themselves purport to improve anything about the computer or network itself. . . . The specification’s insistence that the claimed invention is an ‘advancement’ over the prior art does not overcome the Court’s conclusion that the claims as written focus on an abstract idea.” Id. at 8-9. Moreover, the claim limitations did not contain an inventive concept because “the patent’s claimed solution merely restates the problem to provide ‘a method for remote mirroring of digital data,’ in which ‘the data copied’ is ‘a substantially concurrent copy.’ Such attempt to claim ‘the abstract idea of a solution to the problem in general,’ as opposed to a particular solution, confirms the patent ineligibility of these claims.” Id. at 11.

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