Magistrate Judge Sherry R. Fallon recently issued a Report and Recommendation, recommending that the Court deny plaintiff’s motion to dismiss defendant’s state law counterclaims. GPNE Corp v. Fleetmatics USA, LLC, C.A. No. 13-2049-SLR-SRF (D. Del. Feb. 20, 2015). Plaintiff argued first that defendant’s state law tort claims are preempted by federal law because defendant could not show that plaintiff’s claims of infringement were “objectively baseless.” Id. at 5. Defendant responded that “federal law does not preempt its state law tort claims because it has alleged sufficient facts to show that GPNE sent . . . infringement letters in bad faith.” Id. Judge Fallon agreed with defendant, noting that at the pleadings stage it does not need to prove its allegations of bad faith are true, only that they are adequately pled. Id. at 8-12. Judge Fallon also found that defendant adequately pled its counterclaims of tortious interference, violation of the Delaware Uniform Deceptive Trade Practices Act, and common law unfair competition. Id. at 12-17.
Applying the U.S. Supreme Court’s decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), Judge Robinson granted-in-part and denied-in-part defendant Motorola’s summary judgment motion regarding whether Intellectual Ventures’ patents claim inventive subject matter. Intellectual Ventures I, LLC, et al. v. Motorola Mobility LLC, C.A. No. 11-908-SLR (D. Del. Feb. 24, 2015). Judge Robinson noted that under current case law “it is clear that computer-based programming constitutes patentable subject matter so long as the basic requirements of § 101 are met[.]” Id. at 10 (internal quotation omitted). But, the application of the law to “this area of technology ha[s] been a moving target[.]” Id. Quoting the Federal Circuit’s recent DDR Holdings decision, Judge Robinson noted that to overcome “Internet-centric” challenges to patent eligibility, the claims must do more than:
recite a commonplace business method aimed at processing business information, applying a known business process to the particular technological environment of the Internet, or creating or altering contractual relations using generic computer functions and conventional network operations, such as the claims in Alice, Ultramercial, buySAFE, Accenture, and Bancorp.
Id.at 10-11 (quoting DDR Holdings, LLC v. Hotels.Com, L.P., 773 F.3d 1245, 1259 (Fed. Cir. 2014). Applying this analytical framework, Judge Robinson found that the asserted claims of Intellectual Ventures’ U.S. Patent No. 6,557,054, titled “Method and System for Distributing Updates by Presenting Directory of Software Available for User Installation That Is Not Already Installed on User Station,” invalid under § 101. Judge Robinson found, however, that the asserted claims of U.S. Patent No. 7,409,450, titled “Transmission Control Protocol/Internet Protocol (TCP/IP) Packet-Centric Wireless Point to Multi-Point (PTMP) Transmission System Architecture,” were drawn to patentable subject matter. Id. at 13-22.
The claims at issue were:
181. A computer implemented method for distributing software updates from a remote computer system to a user station, the method comprising:
presenting, at the user station, as a function of an identification of software already installed on the user station, a directory of software updates available for installation on the user station and not already installed on the user station;
sending to the remote computer system over a communications network a selection of software updates for distribution to the user station, wherein the selection of software updates is selected at the user station as a function of the directory; and
receiving from the remote computer system over the communications network software updates indicated by the selection.
1 . A method comprising:
coupling one or more subscriber customer premise equipment (CPE) stations with a base station over a shared wireless bandwidth using a packet-centric protocol; and allocating said wireless bandwidth and system resources based on contents of packets to be communicated over said wireless bandwidth, wherein the contents of each packet include a packet header and wherein the allocating is responsive to at least one field in the packet header.
A recent special master decision from the District of Delaware provides guidance on two common discovery topics: the assertion of privilege and adequate preparation of a Rule 30(b)(6) witness. Special Master Terrell first explained that the “common legal interest” privilege was not applicable because the defendant did not adequately identify another party with which it shared a common interest merely by identifying an “unnamed possible joint venture.” Merck Sharp & Dohme Corp. v. Xellia Pharmaceuticals ApS, et al., C.A. No. 14-199-RGA, Special Master Or. at 4 (D. Del. Feb. 20, 2015). The Special Master also found that communications with foreign attorneys were not privileged and should be produced because “the law in this Court does not recognize the attorney client privilege protection for a foreign attorney, unless there is the involvement of a United States attorney, where the subject generally concerns a United States patent. [The defendant] willingly introduced this patent challenge in the U.S. by filing its ‘Paragraph IV certification’ concerning the ‘300 patent at issue in this lawsuit. Thus, the ‘touch base’ test [identified in some case law] is applicable.” Id. at 4-5.
The plaintiff also complained that the defendant’s 30(b)(6) witness was not adequately prepared for three noticed deposition topics: the decision to file a Paragraph IV certification, attempts to design-around the patent-in-suit, and analysis and investigation of the patent-in-suit. The Special Master concluded that the witness “was properly prepared and gave sufficient testimony in response to the Deposition Notice. . . . Some of the topics in the Deposition Notice overlap and it appears [the witness] gave extensive testimony relevant to the ‘300 patent. With respect to [the decision to file a Paragraph IV certification], testimony need not be given as to the specific legal advice in connection with the filing of the Paragraph IV certification. As to the factual basis for this filing, [the witness] testified about that under other Topics. [Furthermore,] it is not surprising that there would be some documents, particularly aged documents, as to which [the witness] would have no knowledge. On balance, I am satisfied that [the witness] was the appropriate witness for the Deposition Notice, made reasonable efforts to prepare, and gave testimony where she had relevant knowledge.” Id. at 6-7.
In a recent order, Judge Richard G. Andrews denied a motion seeking permission to use confidential discovery information obtained in the district court litigation before the PTAB in an inter partes review proceeding. Callwave Commc’ns LLC v. AT&T Mobility LLC, et al., C.A. Nos. 12-1701-RGA, 12-1702-RGA, 12-1703-RGA (D. Del. Feb. 19, 2015). As Judge Andrews explained, “my view is that discovery before the PTAB is an issue for the PTAB. Any confidentiality issues, if discovery is permitted, can be resolved at the same time by the PTAB.”
Judge Andrews recently addressed two interesting legal questions on summary judgment motions related to invalidity and limitation of damages. The first related to the requirement of 35 U.S.C. § 120 that a patent application be “if filed before the patenting . . . on the first application” in order to have the priority date of that previously-filed application. Because a foreign patent application with an identical specification had been filed more than a year before three patents-in-suit, if the patents-in-suit were not treated as continuations of another application with the benefit of an earlier priority date, they would be anticipated by the foreign application. Immersion Corp. v. HTC Corp., et al., C.A. No. 12-259-RGA, Memo. Op. at 5-8 (D. Del. Feb. 11, 2015). The parent of the patents-in-suit was issued on August 6, 2002, and the patents-in-suit were all filed on the same day. Thus, the question was whether the patents-in-suit could have been “filed before the patenting” of the parent, which, the defendants argued, automatically issued at 12:00:01 a.m. on August 6, 2002. Id.
The plaintiff argued that the PTO has “long given continuation applications the priority date of a prior application if the continuation is filed on the same day that the prior application issues as a patent” and that the PTO has expressed this position in the MPEP. Accordingly, the plaintiff argued that the Court should give Chevron deference to the PTO as a matter of administrative law. Judge Andrews, however, found that the PTO’s view was not entitled to Chevron deference because the relevant statute is not “silent or ambiguous” Rather, “35 U.S.C. § 120 . . . expressly states that the application must be filed ‘before’ the parent application issues.” Id. Further, although the plaintiff pointed to one district court that had adopted the PTO’s interpretation, the Federal Circuit has expressly “left open the question of ‘whether filing a continuation on the day
the parent issues results in applications that are co-pending as required by the statute.’” Id. (citing Encyclopaedia Britannica, Inc. v. Alpine Electronics of Am., Inc., 609 F.3d 1345, 1352 (Fed. Cir. 2010)). Because the plaintiff had the burden of proving entitlement to an earlier priority date and did not present evidence of when on August 6, 2002 the applications were filed, it did not establish an earlier priority date and Judge Andrews granted the defendants’ motion for summary judgment of anticipation of the three patents-in-suit. Id.
Secondly, Judge Andrews addressed a cutoff on damages at the point of a patent’s reissuance. “If a patent is reissued, damages are available for the period between the original issuance and the issuance of the reexamined claims only if the original claims and reexamined claims are ‘identical’ . . . [or] ‘without substantive change.’” Id. at 14-16. In this case, the patentee added the phrase “concurrently running” to the claim at issue, which the defendants argued was a substantive change and the plaintiff argued was merely a clarification that did not affect claim scope. Judge Andrews found that this was a substantive change to claim scope because although “the specification is a relevant consideration, Plaintiffs argument that having multiple programs is inherent in the claim because it is disclosed in the specification is contrary to the ‘well-established principle that a court may not import limitations from the written description into the claims.’ . . . Moreover, though not dispositive, it is highly persuasive that the patent examiner allowed the amended claim only after ‘concurrently running’ was added because the prior art made ‘no reference to any other programs that are running concurrently and how the determination is made between the plurality of concurrently running programs . . . .’” Id.
Chief Judge Stark recently addressed a similar issue involving damages for a reissued patent, finding that damages must be cut off at the filing of a complaint because the patentee had failed to mark embodying products or otherwise provide notice of its patent during the period of patent reissuance.
In Alltech Associates Inc. v. Teledyne Instruments Inc., C.A. No. 13-425-RGA (D. Del. Feb. 12, 2015), Judge Richard G. Andrews denied plaintiff’s unopposed motion to vacate certain of the Court’s claim construction rulings in the case. Having reached a settlement agreement with defendant, plaintiff argued that the Court’s constructions it disagreed with “should be vacated because settlement precludes review of the constructions,” and expressed concerns about the constructions “having a collateral estoppel effect” in subsequent cases. Id. at 1. The Court denied the request. It observed that while “[s]ettlement of any civil litgation is usually a good outcome,” refusing to vacate an order may encourage settlement early on if parties had to “carefully assess whether settlement was in their best interest before a claim construction hearing.” Id. (emphasis added). The Court further explained that “[a]ssuming that the standard that applies is whether there are exceptional circumstances justifying vacating the claim construction order . . . that standard has not been met. . . . [The Court could not] judge how important vacating the claim construction is to the settlement” based on the motion. Id.
Judge Gregory M. Sleet recently granted a motion by Intel to transfer a case to the District of Oregon. Memory Integrity, LLC v. Intel Corp., C.A. No. 13-1804-GMS (D. Del. Feb. 13, 2015). In addressing the Third Circuit’s Jumara factors, Judge Sleet discounted the weight of Memory Integrity’s choice to file suit in Delaware, its “home” forum, agreeing with Intel (itself a Delaware corporation) that because Memory Integrity is a “non-practicing entity with no facilities, operations, employees, or presence in Delaware[,]” it “cannot reap the full benefits of heightened deference” to its chosen forum. Id. at 4. On the other hand, Judge Sleet found Intel’s preferred forum, the District of Oregon, to make sense given that the company has a large design and development facility in Oregon, along with 37,000 employees. Id. at 5. Although the parties disputed whether the accused products in the case were developed in Oregon or Israel, Judge Sleet noted that it was undisputed that they were not developed in Delaware, id. at 7, nor were there any identified witnesses or records located in Delaware, id. at 8-9. On balance, Judge Sleet found that the Jumara factors tipped in favor of transferring the case.
In Lifeport Sciences LLC, et al. v. Cook Incorporation, et al., C.A. No. 13-362-GMS (D. Del. Feb. 5, 2015), Judge Gregory M. Sleet granted defendants’ motion for judgment on the pleadings regarding one of the patents-in-suit, finding that this patent was subject to a covenant not to sue between the parties.
Plaintiffs’ predecessor-in-interest had entered into an agreement (“2003 Agreement”) with defendants not to sue them or their customers for infringement of a certain family of products which “are or have been sold commercially anywhere in the world.” Id. at 1 n.1. The parties disagreed whether this agreement would apply to products sold after the effective date of the agreement. Applying Indiana law, the Court agreed with defendants’ interpretation that “the use of ‘are or have been sold’ . . . created an ongoing covenant not to sue, not limited in time by the effective date of the 2003 Agreement. The Plaintiffs place unwarranted emphasis on the argument that ‘are’ and ‘have been’ represent only present and past tense, but not future. This simplistic view ignores the fact that present-tense language may also imply future action as well.” Id. at 2 n.2. Further, plaintiffs’ reading would render “are” superfluous. Id. at 3 n.2. The Court was also not persuaded by plaintiffs’ citations to other sections of this agreement. Id.
In its analysis, the Court pointed out that while presenting matters outside the pleadings on a 12(d) motion typically converts it to a motion for summary judgment, here the agreement at issue was attached to defendants’ answer, “the parties did not dispute its authenticity, and plainly the Plaintiffs’ claim arising from [this patent] implicates the 2003 Agreement. Thus, the court may appropriately consider the 2003 Agreement at this stage.” Id. at 2 n.2.
Judge Richard G. Andrews recently granted Defendant’s letter request to file an early motion for partial summary judgment in light of the Court’s view that “there is a reasonable possibility that Plaintiff is estopped from asserting that lenalidomide can meet the claim limitations requiring thalidomide under the doctrine of equivalents.” Andrulis Pharms. Corp. v. Celgene Corp., C.A. No. 13-1644-RGA (D. Del. Feb. 6, 2015). In its letter request (D.I. 59) defendant argued that “early summary judgment [was] appropriate because Andrulis concede[d] that [the accused product] does not literally infringe and because prosecution history estoppel is a purely legal issue based on indisputable facts that bars Andrulis’s allegation that [the accused product] infringes under the doctrine of equivalents.” D.I. 59 at 1. Judge Andrews also cautioned defendant to not file a motion staying discovery pending the Court’s resolution of the partial summary judgment motion because the Court would not use its discretion to grant such a motion.
In a recent order, Judge Gregory M. Sleet denied the parties’ motions to exclude the testimony of various experts. In particular, Judge Sleet denied plaintiffs’ motion to exclude defendant’s technical and damages experts, and defendant’s motion to exclude plaintiffs’ damages expert. L’Oréal S.A. v. MSD Consumer Care, Inc., C.A. No. 12-99-GMS (D. Del. Feb. 4, 2015).
Judge Sleet found that while the defendant’s technical expert possessed “extraordinary skill in the art of photochemistry,” he did “not satisfy his own definition of one having ordinary skill in the art” as to the subject matter in dispute. Id. at 1 n.1. Judge Sleet explained why the Court would nevertheless permit defendant’s technical expert to testify. Id. Judge Sleet found that “[w]hile there may not be absolute overlap between the fields of photochemistry and sunscreen formulation, the court is convinced that the nexus is sufficiently close such that [the expert’s] testimony is ‘likely to assist the trier of fact to understand the evidence or to determine infringement’ or invalidity.” Judge Sleet further noted that “[t]his is not a situation where [the expert’s] expertise is so far removed from the subject sub-specialty, that he is rendered unqualified to offer his opinion to the fact finder.” Id.