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Judge Andrews recently granted a motion filed by several defendants under Rule 12(c) seeking to invalidate the patents-in-suit as ineligible under 35 U.S.C. § 101. The Court found that two of the patents-in-suit “are directed to the abstract idea of (1) sending information, (2) directing the sent information, (3) monitoring receipt of the sent information, and (4) accumulating records about receipt of the sent information.” Two-Way Media Ltd. v. Comcast Cable Communications, LLC, et al., C.A. No. 14-1006-RGA, Memo. Op. at 8-10 (D. Del. Aug. 15, 2016). Judge Andrews further explained that there was no “inventive concept” sufficient to rescue this abstract idea because, although the specifications pointed to a specific system architecture as the innovation in question, “[n]one of the claims . . . recite or refer to anything that could be described as an architecture.” Id. at 10-11. Two other patents-in-suit were similarly deficient. Id. at 12-15.

Judge Andrews’ decision involved two interesting procedural points that movants may wish to note. First, the patentee argued that the “motion is premature because claim construction is necessary to determine patent eligibility under § 101” but Judge Andrews issued an order requiring the patentee to identify “the claim terms it contends need construction and . . . its proposed constructions.” The Defendants argued that those constructions did not alter the § 101 analysis and Judge Andrews adopted the constructions for purposes of the motion. Id. at 5-6.

Second, the patentee argued that the Court should consider materials from prior proceedings before the PTO and in other litigations, which arguably “demonstrate[] how [its] invention[s] solved specific technical problems and added significant inventive concepts over the prior art.” But Judge Andrews found the materials in question “irrelevant to the § 101 motion for judgment on the pleadings [because] [n]one of the materials addresses a § 101 challenge to claims of the asserted patents” but rather the “novelty and nonobviousness of the claims under§§ 102 and 103, [which] does not bear on whether the claims are directed to patent-eligible subject matter under § 101, [as well as the] history of conception of the invention and commercial embodiments of the invention. Id. at 7.

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In Chief Judge Leonard P. Stark’s Markman opinion in a series of related actions brought by Plaintiffs Intellectual Ventures I and II, the Court concluded that several disputed terms were indefinite, and further concluded that several terms appearing in the preambles of the claims were limiting. E.g., Intellectual Ventures I LLC v. AT&T Mobility, et al., C.A. No. 13-1668-LPS (D. Del. Aug. 12, 2016).

The Court concluded that the term “optimize” in the larger phrase “allocating means for allocating resources to said IP flow … so as to optimize end user application IP QoS requirements of said software application” was indefinite because the specification “indicate[d] that QoS is subjective and that QoS can vary from user to user based on individual preferences. . . . This subjective, user-based understanding would make it difficult, if not impossible for a POSA to ascertain, with reasonable certainty, whether the claim limitation is satisfies by any particular embodiment. Id. at 20-21. The Court also agreed with Defendants that “terms of degree” used in another patent rendered the claims indefinite, as a POSA “would not understand the terms ‘large’ and ‘small’ with ‘reasonable certainty,’” and the Court found the testimony of Defendant’s expert persuasive on this point. Id. at 34-35 (citations omitted).

As to terms in the preambles, the Court concluded that the term “frequency hopping” in a preamble was limiting where the preamble was relied on to distinguish the invention from the prior art. Plaintiff had done so during an inter partes review proceeding and, furthermore, this term appeared “in the patent’s title and throughout the specification. The term is needed to ‘give life, meaning and vitality to the claim.’” Id. at 10. As to a different term appearing in another patent (“application aware resource allocator at the MAC laywer / application-aware media access control (MAC) layer”), again the Court concluded the term was limiting in a preamble where the patentee relied on the term during prosecution to distinguish over prior art. Id. at 16.

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Judge Robinson recently considered defendant’s motion to dismiss for failure to state a claim, applying Twombly and Iqbal under the amended Federal Rules abrogating Form 18 for pleading direct infringement, and post-Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S.Ct. 1923, 1932 (2016).   Dermafocus LLC v. Ulthera, Inc., No. 15-654-SLR (D. Del. Aug. 11, 2016).  Judge Robinson analyzed plaintiff’s claims to assess “plausibility,” noting that “it is logical to presume that a defendant has greater access to and, therefore, more information about its accused method.”  Id. at 4-5.  Judge Robinson declined to require more of a plaintiff, “[a]bsent specific guidance from the Federal Circuit directing the court to front-load the litigation process by requiring a detailed complaint in every instance[.]”  Id. at 5.

Judge Robinson concluded that plaintiff’s direct infringement allegations passed muster because they alleged defendant’s accused system was used in such a manner that infringed claim 1 of the patent-in-suit.  Id. at 5-6.  Defendant complained that “plaintiff did not specify ‘which particular combinations of components … allegedly infringe when used,’ nor did plaintiff ‘allege how all of the claimed method steps are performed.'”  Id. at 6.  But, Judge Robinson noted that it was not clear whether the “information demanded by defendant” was available to the public, therefore, “[u]nder these circumstances,” the Court concluded that plaintiff provided “reasonable notice of a plausible claim for direct infringement of at least” claim 1 of the patent in suit.  Id.  Regarding indirect infringement, Judge Robinson concluded that plaintiff failed to adequately allege pre-suit knowledge of the patent-in-suit.  Plaintiff alleged that the patent-in-suit was one of seven prior art references listed in a patent application for which defendant’s founder was a named inventor and applicant.  Id. at 8.  The patent-in-suit, however, did not come up again during prosecution of that application.  Id.  Judge Robinson, therefore, concluded that [a]lthough it is certainly conceivable that [the inventor] took note of the [patent-in-suit] a decade ago and shared his knowledge thereafter with others at his company, the court concludes that the allegations are neither likely nor reasonable; i.e., no plausible inference arises from the alleged facts that defendant had knowledge of the [patent-in-suit] in 2005.”  Id. at 8-9 (emphasis in original).  Judge Robinson also concluded that plaintiff’s allegations of post-suit willful infringement passed muster under Halo, although the Court granted the motion to dismiss as to “pre-complaint willfulness” given the failure to adequately plead pre-suit knowledge.  Id. at 11.  Although prior to Halo, the Court would have dismissed “allegations of willful infringement based only on post-complaint conduct,” [u]nder the less rigid standard announced in Halo . . . the court will allow plaintiff’s general allegations of willful infringement to withstand the motion to dismiss. Id. at 12.

Dermafocus LLC v. Ulthera, Inc., No. 15-654-SLR

 

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In Verifone, Inc. v. Poynt Co., C.A. No. 16-105-SLR (D. Del. Aug. 11, 2016), a trademark infringement action, Judge Sue L. Robinson denied Plaintiff’s motion for a preliminary injunction. The majority of the opinion addressed likelihood of success on the merits, looking to whether there was likelihood of confusion between the parties’ marks. See id. at 8 -17. The Court concluded that plaintiff had not shown likelihood of success on the trademark claim. Id. at 17. The irreparable harm factor weighed in Defendant’s favor where it was “about to launch its product and quantifies the monetary damages it would suffer due to delay, recertification, and rebranding,” and where Plaintiff’s evidence of harm to its reputation and goodwill was speculative. Id. at 17-18. As to the balance of hardships, this also favored Defendant who had searched the PTO database before applying for its trademark and where Defendant had offered evidence of damage it would suffer from an injunction. Id. at 18. Finally the public interest factor was “largely neutral” where “the public has an interest in not being deceived or confused,” no confusion was evidence and the common purchases of the parties’ product were sophisticated. Id. at 18-19.

Verifone, Inc. v. Poynt Co., C.A. No. 16-105-SLR (D. Del. Aug. 11, 2016)

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In Videoshare, LLC v. Google, Inc., et al., C.A. No. 13-990-GMS (D. Del. Aug. 2, 2016), Judge Gregory M. Sleet granted Defendants’ Motion for Judgment on the Pleadings based on Section 101. The two patents-in-suit “describe[] a method and system for sharing streaming video over a network,” with one of the patents having an additional requirement of having an associated advertisement. Id. at 1-2. Defendants argued they were invalid “for claiming the patent-ineligible abstract idea of translating (converting) content and sharing the translated content (such as video segments), with or without accompanying advertisements.” Id. at 3 (internal quotation marks omitted).

Applying the Alice test and looking to recent Federal Circuit decisions for guidance, the Court found that Defendants had shown invalidity by clear and convincing evidence. Id. at 5. In terms of defining what the patents were directed to under step 1 of the Alice inquiry, the Court rejected Defendants’ articulation of above-quoted the abstract idea as too high a level of abstraction, but also rejected Plaintiff’s articulation of what the patents were directed to as “loaded with nearly every step or feature recited in the claims, thereby defeating the distillative purpose of the ‘directed to’ inquiry.” Id. at 9. Instead, the Court concluded, based in part on the patents’ specifications, that the patents were “directed to preparing a video in streaming video format for sharing over a computer network.” Id. This was an abstract idea because “the claims are not directed to an improvement in computer functionality, and the physical components of the claim merely provide a generic environment for carrying out the abstract idea.” Id. at 11. To that end, the Court was not persuaded that Plaintiff had invented anything that resulted in an improvement to computer functionality, for example, it had not invented “the technology that converts video files into streaming format.” Id. at 12. Furthermore, “[t]he ordered arrangement of such conventional features provides no discernable benefits to computer functionality. This stands in stark contrast to claims [in the recent Enfish and Bascom Federal Circuit decisions] which achieved such improvements to computing technology.” Id. at 13.

Turning to the second step of Alice, the Court concluded that the claims did not contain an inventive concept, as they recited computer capabilities that were routine and conventional. See id. at 17-18. In particular, the Court found these claims distinguishable from those in DDR Holdings that were “necessarily rooted in computer technology”: “[t]he instant claims require a series of conventional steps that could be done on a general purpose computer by a human to instead be done in an automated fashion on a receiving computer via the Internet. In this regard, manually following the claimed conventional steps does not lead to an unconventional result, and . . . automation of these conventional steps does not save the patents from ineligibility. In this way, unlike DDR Holdings, the instant claims do nothing more than conform to the routine and conventional.” Id. at 2.

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In a recent Report and Recommendation, Magistrate Judge Sherry R. Fallon recommended that the court deny defendant Baker Hughes, Incorporated’s (“Baker”) motion to transfer venue to the Southern District of Texas pursuant to 28 U.S.C. § 1404(a). Smith International, Inc. v. Baker Hughes Incorporated, C.A. No. 16-56-SLR-SRF (D. Del. Aug. 10, 2016). Judge Fallon concluded that “Baker has not shown that the Jumara factors as a whole weigh strongly in favor transfer.” Id. at 12. Judge Fallon explained that “[o]nly Baker’s forum preference weighs in favor of transfer, and that preference does not warrant maximum deference. On the other hand, the remaining factors are neutral or weigh in favor of [plaintiff] Smith.” Id. Further, “in the present action, [plaintiff] Smith chose a legitimate forum because Delaware is the state of incorporation of both parties.” Id. While Judge Fallon “recognize[d] that it may be more expensive and inconvenient for Baker to litigate in Delaware instead of Texas,” the court declined “to elevate the convenience of one party over the other,’ as ‘discovery is a local event and trial is a limited event.’” Id. at 13. Judge Fallon found that “Delaware imposes no ‘unique or unexpected burden’ on Baker, such that transfer is warranted in the interests of justice.” Id.

Smith International, Inc. v. Baker Hughes Incorporated, C.A. No. 16-56-SLR-SRF (D. Del. Aug. 10, 2016).

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Judge Sue L. Robinson recently denied Mylan ANDA defendants’ motion to dismiss for lack of personal jurisdiction and improper venue.  Pfizer Inc. v. Mylan Inc., Civ. No. 15-960-SLR (D. Del. Aug. 12, 2016).  The Court explained that, under Daimler, the defendants’ regular and routine litigation in Delaware and systematic placement of goods into the stream of commerce, including Delaware, were insufficient to establish general jurisdiction over them.  However, the Court explained that it was indisputable that the defendant that served the notice letter and/or other defendants would eventually market their generic product in Delaware upon FDA approval.  This, the Court explained, was a sufficient jurisdictional hook under Delaware’s long-arm statute for specific jurisdiction over the defendant that served the notice letter.  The Court next agreed with the plaintiff that specific jurisdiction over that defendant should be imputed to the one other Mylan defendant under an agency theory, but found that “more information regarding Mylan Inc.’s and Mylan N.V.’s role” was needed to determine whether jurisdiction could be imputed to them, also.  As a result, the Court granted the plaintiff jurisdictional discovery “to determine whether an agency relationship exists between Mylan Inc. and Mylan N.V. and [the defendant that served the notice letter].”

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In a recent Report and Recommendation, Magistrate Judge Sherry R. Fallon recommend that the court deny defendant’s motion to transfer to the District of Minnesota pursuant to 28 U.S.C. § 1404(a). Husqvarna AB et al. v. The Toro Company, C.A. No. 15-856-SLR-SRF (D. Del. Aug. 11, 2016). Judge Fallon found that “[o]nly [defendant’s] forum preference for its ‘home district’ and the limitations of some [of defendant’s] witnesses to appear in person for trial weigh in favor of transfer.” Id. at 16. Judge Fallon explained that “[i]n the present action, [plaintiffs] chose a legitimate forum, [defendant’s] state of incorporation.” Id. While Judge Fallon recognized “that it may be more expensive and inconvenient for [defendant] to litigate in Delaware than in Minnesota,” Judge Fallon declined “to elevate the convenience of one party over the other,’ as ‘discovery is a local event and trial is a limited event.’” Id. Judge Fallon concluded that “Delaware imposes no ‘unique or unexpected burden’ on [defendant], such that transfer is warranted in the interests of justice.” Id. According to Judge Fallon, defendant failed to show that the Jumara factors a whole weigh in favor of transfer, and therefore recommended that the court deny defendant’s motion.

Husqvarna AB et al. v. The Toro Company, C.A. No. 15-856-SLR-SRF (D. Del. Aug. 11, 2016).

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In a recent Memorandum, Judge Gregory M. Sleet granted defendants’ motion for leave to amend to add declaratory judgment counterclaims for U.S. Patent Nos. 9,295,802 (“the ’802 patent”); 9,265,911 (“the ’911 patent”); and 9,279,794 (“the ’794 patent”) in this ANDA litigation regarding plaintiffs’ product INOmax®. Mallinckrodt Hospital Products IP Ltd., et al. v. Praxair Distribution, Inc., et al., C.A. No. 15-170-GMS (D. Del. Aug. 2, 2016). The ’802 patent, ’911 patent and ’794 patent each issued to plaintiffs after the filing of this action. Id. at 2. Shortly after the patents issued, they were added to the Orange Book listing for INOmax®. Id. Defendants sought to have the newly-issued patents added to the case by stipulation of the parties, but plaintiffs disagreed. Id. at 2-3. Soon after plaintiffs noted their disagreement, defendants filed expedited Paragraph IV Certifications regarding the newly-issued patents. Id. at 3.

Granting defendants’ motion, Judge Sleet first explained that “adding the new patents to this case will conserve judicial and party resources, because the alternative would require the parties to initiate a new lawsuit. The court does not find any inference of bad faith on the part of the Plaintiffs.” Id. at 4. Next, Judge Sleet found that Plaintiffs would not be prejudiced by the addition of the new patents. Specifically, Judge Sleet noted that two of the newly-added patents were continuations of a patent already being asserted in the case. Id. Judge Sleet also noted that “Plaintiffs cannot claim surprise or lack of notice, as the Defendants notified them of their intent to add the new patents to the suit nearly two weeks before filing an expedited Paragraph IV certification for the new patents and over two weeks before seeking leave to amend.” Id. at 5.

Finally, Judge Sleet considered whether such amendment would be futile. Plaintiffs argued that defendants’ amendment would be futile because the court lacks subject matter jurisdiction over the new patents. Id. Specifically, plaintiffs contended that “since the Defendants’ Motion to Amend was filed four days after the Defendants’ expedited Paragraph IV certification and lacked an offer of confidential access to the ANDA, it fails the provisions of§ 355(j)(5)(C)(i)(I) and must be denied.” Id. Rejecting plaintiffs’ argument, Judge Sleet “decline[ed] to follow a form-over-function approach”:

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In a recent report and recommendation, Magistrate Judge Mary Pat Thynge recommended that several affirmative defenses be stricken.  Sonos, Inc. v. D&M Holdings Inc., C.A. No. 14-1330-RGA-MPT (D. Del. Aug. 10, 2016).  Of note, Judge Thynge explained that the defendants’ § 288 defense should be stricken because there was no allegation that any asserted patent “has been found invalid before the commencement of the present action.”  Judge Thynge also recommended that the defendant’s equitable estoppel and unclean hands affirmative defenses be stricken for failure to allege facts supporting those defenses with the particularity required by Rule 9(b).  Next, the Court recommended the striking of the defendant’s patent misuse defense, which was supported by arguments in the defendant’s answering brief, but not in allegations in the affirmative defense, itself.  Judge Thynge explained, “D&M is required to assert a basis showing an anticompetitive effect in its pleadings; delegating this in its answering brief is not sufficient.”  Finally, Judge Thynge explained that the defendant’s prosecution laches defense “is limited to a one sentence conclusory statement, containing no information to support the elements of unreasonable and inexcusable delay,” warranting that it, too, be stricken.  The Court noted, however, that it would allow D&M leave to amend the pleadings to address these deficiencies.

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