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On Tuesday, the jury in Interdigital Communications, Inc., et al. v. ZTE Corporation, et al., C.A. No. 13-009-RGA (D. Del. Oct. 28, 2014) returned a verdict for the plaintiffs, finding all asserted claims of the three patents-in-suit infringed and not invalid.

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This week, the jury returned a verdict for plaintiff in Comcast IP Holdings I, LLC v. Sprint Communications Company L.P., et al., C.A. No. 12-205-RGA-CJB (D. Del. Oct. 15, 2014).  The jury found that plaintiff had proven infringement of all asserted claims and awarded $7.5 million in damages.

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Judge Gregory M. Sleet recently issued an opinion construing the disputed terms of U.S. Patent No. 5,980,940 (“the ’940 Patent”), entitled “Pharmaceutical Combination Preparation for Hormonal Contraception.” Bayer Intellectual Property GmbH et al. v. Warner Chilcott Co., LLC et al., C.A. No. 12-1032-GMS (D. Del. Oct. 9, 2014). As to the phrase “effective estrogen content,” defendants’ construction was founded on “the lowest level disclosed in a preferred embodiment, and requires ethinyl estradiol in an amount of at least 15 [micrograms] in the combined pill and at least 2 [micrograms] in the unopposed pill.” Id. at 2. Defendants argued that “given the patent’s objective to provide a daily estrogen content that was ‘as low as possible in each individual dosage unit,’ the inventors would have preferred and described lower respective doses if they believed that such estrogen content would be ‘effective.’” Id. Judge Sleet found, however, that “the subjective intent of the inventor when he used a particular term is of little or no probative weight in determining the scope of a claim,” and that “when a claim term is expressed in general descriptive words, [the court] will not ordinarily limit the term to a numerical range that may appear in the written description or in other claims.” Id. at 2. The Court thus found that the term “effective estrogen content” captures “pharmaceutical combinations with ethinyl estradiol levels below 15 [micrograms] in the combined pill and below 21 [micrograms] in the unopposed pill.” Id.

As to the disputed phrase “high contraceptive reliability, low incidence of follicular development, and satisfactory cycle control, with reliable avoidance of intracyclic menstrual bleeding and undesirable side-effects,” Judge Sleet found that the “disputed phrase should not be construed as a single term because it includes five distinct requirements that cover different oral contraceptive concepts/characteristics.” Id. at 3. However, Judge Sleet was ultimately unable to construe this disputed phrase. After rejecting both parties’ proposed constructions, Judge Sleet provided the following explanation:

The plain meaning of the claim language leaves the court with numerous questions, the answers to which are necessary to complete an infringement analysis regarding when the claim limitations are met. For example, how high must the contraceptive reliability be? What incidence of follicular development would be considered low? What constitutes satisfactory cycle control? And even more problematic are the reliable terms. What level of avoidance is necessary for intracyclic menstrual bleeding, and is it evaluated after the first 28 day administration cycle or after prolonged use? The uncertainty is compounded for side effects. The specification discusses various side effects ranging from headaches to cardiovascular disease. What constitutes an unacceptable avoidance of headaches is a thoroughly different question than what would constitute unacceptable avoidance of cardiovascular disease, yet the two are linked together in a single characteristic in the disputed phrase. Finally, even if the court did have individual standards against which the limitations are measured, the intrinsic record does not indicate what analytical tools or processes should be used to make the measurements.

 Id. at 7-8. Judge Sleet went on to further explain that “[t]he Supreme Court has recently held that the proper test for whether a patent is indefinite is ‘if its claims, read in light of the patent’s specification and prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.’” (citing Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, *6 (2014)). Judge Sleet concluded that “[t]he difficulty the court has encountered in construing the terms may unavoidably present an indefinite issue that will need to be addressed at summary judgment.” Id. at 8.

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In an open letter to Delaware counsel, Chief Judge Leonard P. Stark has provided clarification on the Court’s new 6 p.m. EST deadline for the filing and service of papers, which will become effective Thursday, October 16. Judge Stark explained that “the 6:00 p.m. Eastern Time deadline applies to every filing and service deadline in every case in the District of Delaware, other than initial pleadings.” Accordingly, “the 6:00 p.m. deadline applies to the exchange among parties of discovery requests and discovery responses, and it applies even if such requests or responses are made by hand delivery.”

Notably, Judge Stark also clarified that “[p]arties will not be permitted to alter the new deadline on a case-by-case basis.” To that end, Judge Stark further explained that “[w]hile each individual Judge retains the discretion to set a different deadline in a specific case with respect to a particular paper, the Judges of the Court agree that this discretion will be exercised rarely (most likely during trial).”

Judge Stark also noted that the new deadline does “not apply to proceedings pending in Bankruptcy Court,” but it “does, of course, apply to bankruptcy appeals and any other bankruptcy-related cases to the extent those cases are on the District Court’s docket.”

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In a recent Report and Recommendation, Magistrate Judge Christopher J. Burke construed the terms “multi-phase product,” “multiphase oral contraception product” and “phase” (collectively, the “phase terms”), in addition to the terms “daily dosage units” and “daily oral dosage units” (collectively, the “daily terms”) with respect to the only patent-in-suit, U.S. Patent No. 8,071,577 (the “’577 Patent”). Bayer Pharma AG v. Watson Laboratories, Inc., C.A. No. 12-1726-LPS-CJB (D. Del. Sept. 30, 2014). The patent-in-suit contains only three claims, each of which are independent. Defendant argued that claims 1 and 2 “are hybrid claims that recite both a product and a method of using that product at the same time” and should therefore be found indefinite as a matter of law. Id. at 8.

Addressing defendant’s indefiniteness argument, Judge Burke acknowledged that “a single patent may include claims directed to one or more of the classes of patentable subject matter, but no single claim may cover more than one subject matter class.” Id. at 9. In particular, such a “hybrid claim,” is indefinite because it is “not sufficiently precise to provide competitors with an accurate determination of the metes and bounds of protection involved and is ambiguous.” Id. at 10. Judge Burke explained, for example, that such indefinite hybrid claims may arise when the “claims describ[e] a system that also require[s] the user of the recited system to take specific action.” Id. at 12. On the other hand, an indefinite hybrid would not arise if the “claims contain[] language simply describing a system as well as the capabilities of the claimed system.” Id. Addressing the “phase terms” of claims 1 and 2, Judge Burke determined that the use of the term “phase” referred to “physical components of a claimed composition” rather than use of the composition. Id. at 25. Further, following a thorough analysis, Judge Burke concluded that “[t]he other intrinsic evidence . . . does not give the Court enough cause to alter that view.” Id. Judge Burke thus provided constructions for the “phase terms” consistent with these conclusions. Id. Turning to the “daily terms” Judge Burke concluded that “[f]or the same reasons as described above in reference to the ‘phase’ terms, the Court declines to construe these ‘daily’ terms so that they inject method steps into claims 1 and 2,” and adopted constructions for these terms consistent with that conclusion. Id. at 26. In support of that conclusion, Judge Burke explained that “none of the claim language in composition claims 1 or 2 explicitly requires that the drug be actually administered to a patient in a certain manner.” Id.

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In Graphic Properties Holdings, Inc. v. Asus Computer International, C.A. No. 13-864-LPS (D. Del. Sept. 29, 2014), Chief Judge Leonard P. Stark denied defendants ASUS Technology Pte Ltd. (“ASUS Singapore”) and ASUSTek Computer Inc.’s (“ASUS Taiwan”) (collectively the “Foreign Defendants”) motion to dismiss for lack of personal jurisdiction and improper venue. First, addressing the long-arm statute prong of the personal jurisdiction inquiry, Judge Stark resolved the issue of whether the Court would recognize a theory of “dual jurisdiction” (i.e., “stream of commerce”) based on “partial satisfaction” of subsections (1) and (4) of the Delaware long-arm statute, 10 Del. C. § 3104. Id. at 4-10. As Judge Stark explained, under a stream of commerce approach, jurisdiction exists when a “defendant displays ‘an intent to serve the Delaware market’ and ‘this intent results in the introduction of [a] product into the market and … plaintiffs cause of action arises from injuries caused by that product.’” Id. at 6. Because the Delaware Supreme Court has not provided an express opinion on this issue, Judge Stark’s role was limited to predicting how the Supreme Court would rule. Id. at 7. Considering that the (i) Delaware Supreme Court has refrained from rejecting the dual jurisdiction theory despite having several opportunities to do so; (ii) that “no Delaware state court has rejected the dual jurisdiction theory”; and (iii) that “Delaware’s long arm statute … is to be broadly construed to confer jurisdiction to the maximum extent possible under the Due Process Clause”, Judge Stark concluded the “Delaware Supreme Court, if faced with the issue, would hold that the ‘stream-of-commerce’ theory does provide a basis for personal jurisdiction under Delaware law, even though the theory is not expressly authorized by Delaware’s long-arm statute.” Id. at 8-9. Judge Stark reached this conclusion notwithstanding the fact that a fellow Judge of the Court reached a “contrary, and not unreasonable” conclusion regarding the stream of commerce theory. Id. at 6-7, 9 (citing Round Rock Research LLC v. ASUSTeK Computer Inc., 967 F. Supp. 2d 969 (D. Del. 2013)).

Applying the stream of commerce theory, Judge Stark explained that “[a] non-resident firm’s intent to serve the United States market is sufficient to establish an intent to serve the Delaware market, unless there is evidence that the firm intended to exclude from its marketing and distribution efforts some portion of the country that includes Delaware.” Id. at 9. In the instant matter, Judge Stark found evidence that the Foreign Defendants not only targeted the United States generally by selling to ASUS Computer International (“ASUS California”) in California, but that they also targeted Delaware specifically given that “there are least three physical resale outlets (Best Buy stores) inside Delaware that stock and sell the accused devices.” Id. at 10. Accordingly, Judge Stark found the long-arm statute prong satisfied.

Judge Stark also found the constitutional due process prong of the personal jurisdiction inquiry satisfied given that the “Foreign Defendants,by way of ASUS California, purposefully ship the accused devices into Delaware through established distribution channels such as Best Buy” and therefore “purposefully avail [themselves] of the privilege of conducting activities within [Delaware], thus invoking the benefits and protections of its laws.” Id. at 12-13.

While denying the motion to dismiss as of the date of the opinion, Judge Stark agreed with the Foreign Defendants’ assertion that “plaintiff only provided facts showing sales of accused devices in Delaware five months after the filing of the Complaint.” Id. at 14. Because a court “cannot base jurisdiction on events that occurred after the filing of [the] complaint” in view of the “arising under” language of Delaware’s long-arm statute, Judge Stark found that the Foreign Defendants will be required to show “[f]acts that the accused devices were on sale in Delaware prior to the filing of this suit” in order for the Court to sustain jurisdiction over the Foreign Defendants. Id. at 13-14. Judge Stark noted that the Court will be “prepared to reevaluate whether it can properly exercise jurisdiction over the Foreign Defendants as the case proceeds.” Id. at 14.

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Judge Richard G. Andrews recently deferred ruling on the part of a Daubert motion which sought to preclude an expert from offering testimony on § 112 defenses on which the expert testified he deferred to counsel.  IPLearn, LLC v. Blackboard, Inc., C.A. No. 11-876 (RGA) (D. Del. Oct. 2, 2014).  Judge Andrews indicated he likely would exclude the expert’s opinion on § 112 defenses, explaining “I am not convinced that these are [the expert's] opinions on the § 112 issues.  I am quite sure that the legal citations . . . are not only not his, but to cases that he has not read.  Therefore, I expect that I will exclude the opinions [addressing the § 112 defenses] of the report.  I will, however, give Defendant an opportunity before trial to show that the § 112 opinions are indeed [the expert's] opinions.”  Id. at 4.  The Court proceeded to schedule a pretrial hearing to examine and cross-examine the expert on his § 112 opinions.

Earlier in the decision, the Court denied the Daubert motion to the extent it sought to exclude the expert based on his unfamiliarity with the presumption of validity and the need to prove invalidity by clear and convincing evidence.  The plaintiff had argued that the defendant’s invalidity expert should be excluded from trial for failure to apply the clear and convincing standard or the presumption of validity.  Judge Andrews agreed with the defendant, though, that the expert’s “failure to offer opinions on legal standards has no relevance because that is not the role of the expert.”  Id. at 2.  As the Court explained, “[c]lear and convincing evidence and the presumption of validity are not standards required of expert opinion on invalidity, but standards used by a factfinder.  These are legal concepts that are for jury determinations, not for expert witnesses.”  Id. at 4.

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Judge Andrews recently denied a defendant’s Daubert motion, which sought to exclude the plaintiff’s technical expert on a number of grounds. The defendant argued that the expert’s opinions “are too unreliable to be presented to a jury” because the expert “lacks familiarity with the infringing products, relied too heavily on someone else to provide him with relevant segments of source code to review, and used the Court’s claim construction to determine how the products work.” IPLearn, LLC v. Blackboard Inc., C.A. No. 11-876-RGA, Memo. Or. at 1-2 (D. Del. Sept. 29, 2014).

Judge Andrews explained that although the expert in question “never used the allegedly infringing products,” and reviewed only portions of the relevant source code selected by another individual, his opinion was “based on ‘thousands of pages of technical manuals, source code, and depositions transcripts.’” Id. at 2. “Even if [the expert] did not know the qualifications of the individual who selected the pieces of source code, or whether there might be other relevant segments of the source code, he was able to determine whether the sections of code related to the elements relevant to infringement. Therefore, his expert opinion is based on sufficient facts and reliable methods. Whether [the expert] should have consulted the complete source code, and might have missed something that would change his opinion, is an issue for cross-examination and, possibly, contradictory expert testimony by Defendant’s expert.” Id. at 3-4. Indeed, the expert “need not use the product if, as here, he has familiarized himself with it in other ways. Reviewing source code and other materials can be sufficient. [Accordingly] Whether [the expert] should have based his expert opinion on personal use with the product, rather than source code and other materials, is fodder for cross-examination, not a Daubert issue for this Court.” Id. at 2.

Further, Judge Andrews explained that “[w]hether [the expert] relied too heavily on his report in his deposition does not, in my opinion, raise a Daubert issue,” because this argument is essentially the defendant contending that the expert “will be a poor witness.” Id. at 3. Finally, Judge Andrews explained that it was “not self-evident from the deposition transcript cited by Defendant that [the expert’s] reference to the Court’s claim construction was an explanation of how the products work, rather than an application of the construed claims onto the product. . . . [T]he infringement expert[’s] . . . role is to compare the construed claims to the allegedly infringing products. Defendant has not shown that he has not done that.” Id. at 4.

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In Cirrex Systems LLC v. Verizon Services Corp., et al, C.A. No. 13-921-GMS (D. Del. Oct. 1, 2014), Judge Gregory M. Sleet recently granted defendants’ motion to stay the case, which was brought by a non-practicing entity, pending inter partes review.

The Court had previously advised on a July 2014 teleconference that it may grant defendants’ request for a stay.  Id. at 1 n.1.  During that conference, plaintiff had argued that a stay may impede its access to third-party discovery.  However, the Court now found the prejudice to plaintiff to be neutral here, where plaintiff “may seek to recoup its damages and, as a non-practicing entity, may seek adequate redress for potential ongoing infringement during the length of the stay.”  Id. at 2 n.1.  The Court further concluded that the PTO proceedings would likely aid in simplifying the case, even if the PTO does not find any claims invalid.  Id.  Finally, the stage of the case favored a stay, as the case was still in its early phases, with fact discovery closing in January 2015 and trial set for February 2016.

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In Comcast IP Holdings I LLC v. Sprint Communications Company LP, et al., C.A. No. 12-205-RGA (D. Del. Sept. 29, 2014), Judge Richard G. Andrews concluded that plaintiff’s damages expert had not adequately apportioned damages and thus the analysis was not admissible.

Defendants had filed a motion in limine seeking to exclude profits and or/revenues relating to the accused products, arguing that plaintiff’s damages expert had violated the entire market value rule because the products also contained unpatented features.  Plaintiff argued its expert had, in fact, apportioned revenues between the patented and unpatented technology in the products.  The Court had requested further submissions on this issue, including a proffer of this expert’s testimony.  Id. at 1.

The Court found the expert’s proffer insufficient.  The expert had identified three different functionalities of the accused products and noted that only one was “substantially implicated by the asserted patents,” but there was no indication that she had performed a “‘numerical calculation’ to arrive at a percentage to apply to the profits.  Apportionment does not seem possible without a numerical calculation. There is no evident apportionment in the proffer,” nor in the expert’s deposition or report. Id. at 2.

On the other hand, the Court recognized that its request for additional submissions had focused on whether the entire market value rule had been violated, and that, if it had specifically asked for more detail on apportionment, the subsequent submissions may have been different.  Therefore, the Court allowed plaintiff to submit a proffer “with some detail as to how much of the revenues and/or profits it apportioned to the patented technology, and what the basis for that apportionment is.”  Id.

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