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In a recent Memorandum Order, Judge Richard G. Andrews addressed defendant’s motion for attorney fees under 35 U.S.C. § 285 and the Court’s inherent powers. Parallel Iron LLC v. NetApp Inc., C.A. No. 12-769-RGA (D. Del. Sept. 12, 2014). First, Judge Andrews denied defendant’s motion for attorney’s fees under § 285 because defendant failed to demonstrate it was the prevailing party. As Judge Andrews explained, that “there must be a dispute that was settled in favor of the party seeking to be declared the prevailing party that materially alters the legal relationship between the parties.”  Id. at 8. Here, however, the Court did not make any findings “regarding any substantive issue in the case,” did not “construe[] any terms, resolve[] a contested motion to dismiss, or resolve[] any motions for summary judgment.” Id. at 7. Judge Andrews explained that unlike cases  where there was no reason given for the motion to dismiss, here it was clear that “the Stipulation of Dismissal was required as a result of a third-party licensing agreement,” which “led to downstream licensures for the users, including [defendant].” Id. at 7-8. Judge Andrews thus reaffirmed the principle that “it cannot be the case that a party ‘can benefit from a bona fide license agreement, obtained after the litigation began, and claim to be the prevailing party, without a single substantial court decision that favors that party.’”  Id.

Judge Andrews did, however, grant attorney fees under the Court’s inherent powers to do so. As Judge Andrews explained, plaintiff had accused defendant’s products “by reference to their implementation of the pNFS standard” in its complaint and three sets of Paragraph 4(a) disclosures. Id. at 10. Over thirteen months after filing its complaint, plaintiff essentially withdrew its intention of accusing products implementing the pNFS standard of infringement. Id. at 10-11. The Court ordered plaintiff “to submit all materials that it had gathered or created during its pre-suit investigation related to this issue.” Id. at 11.  After conducting an in camera review of a subset of documents specified by plaintiff, the Court determined that plaintiff initiated the “suit without a good-faith belief that the accused instrumentalities implemented pNFS in an infringing manner,” and therefore awarded attorney fees.  Id. Judge Andrews further ordered supplemental briefing “to address the amount of fees appropriate in this case.” Id. at 16.

 

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Judge Richard G. Andrews recently addressed defendants’ motion for judgment on the pleadings, which provided several reasons that plaintiffs’ Third Amended Complaint failed to sufficiently plead indirect infringement. HSM Portfolio LLC v. Fujitsu Ltd., C.A. No. 11-770-RGA (D. Del. Sept. 9, 2014).

Defendants argued that plaintiffs cannot establish contributory infringement mainly because the “accused semiconductor chips are not components especially designed for an infringing product because they are accused of direct infringement in and of themselves.” Id. at 2. Judge Andrews agreed, explaining that “[t]he reason that it is necessary to plead that the component has no substantial noninfringing uses is that the component alone does not directly infringe” and therefore plaintiffs’ argument did “not make legal sense.” Id. at 3. Judge Andrews did, however, grant plaintiffs leave to file an amended complaint within ten days to amend their contributory infringement claim. Id. at 3.

Judge Andrews denied the remainder of defendants’ arguments. First, with respect to induced infringement based on domestic sales, defendants essentially argued that “because it might be found liable for direct infringement, based on the same actions of which it is accused of induced infringement, [the Court] should dismiss the claim for induced infringement.” Id. While Judge Andrews agreed that “there would be no additional liability for induced infringement based upon the same acts” of direct infringement, defendants’ “judicial economy” argument was not a sufficient “failure to state claim” argument. Id. Second, with respect to induced infringement based on foreign sales, Judge Andrews found that defendants “conflate[d] the standard for pleadings with that for summary judgment,” finding that plaintiff was only required to “set forth a basis for the court to make a ‘reasonable inference’” that defendants “encouraged the importation of the accused products in the United States by third parties.” Id. at 3-4. Third, Judge Andrews disagreed with defendants’ argument that all the inducement claims fail because plaintiffs failed to plead specific intent. Judge Andrews explained that plaintiffs alleged acts such as “creating advertisements, creating established distribution channels, manufacturing the products in accordance with U.S. law, distributing manuals, and providing technical support,” which “all evidence specific intent.” Id. at 4.

 

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In Chalumeau Power Systems LLC v. Alcatel-Lucent, et al., C.A. No. 11-1175-RGA (D. Del. Sept. 12, 2014), Judge Richard G. Andrews recently determined that defendants were entitled to attorneys’ fees and costs under Section 285.   Plaintiff had dismissed its complaint, citing a change in “the economics of the case” as a result of defendants’ new licensing defense; defendants then filed the instant motion.  Id. at 1.

Applying the Supreme Court’s standard for Section 285 awards, see Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014), the Court first concluded that plaintiff’s infringement theories and claim construction positions were frivolous.  See id. at 2-6.  Once the Court requested documentary evidence of plaintiff’s pre-suit investigation, it became clear that plaintiff had not “vetted” every accused patent family before filing suit, as it had previously claimed to have done.  Id. at 3.  The Court observed that the single, 5-page document produced in camera grouped claim limitations too broadly, “encompassing multiple disputed terms in each group.”  Id. at 4.  The Court explained that “[a] pre-suit investigation which lumps so many limitations together does not demonstrate an adequate investigation into whether the accused device infringes each and every claim limitation.”  Id.  The Court then analyzed plaintiff’s claim construction positions, and found them similarly frivolous.  See id. at 4-6.

The Court also found that plaintiff’s litigation conduct warranted a finding that the case was exceptional.  Plaintiff had opposed defendants’ motion to add a license defense as futile, even though plaintiff now claimed that it was this defense that had caused it to drop the suit.  Id. at 6-7.  The Court concluded that plaintiff’s litigation strategy was to “extort[] a settlement fee” as it “st[rung] out the case in the hopes that [defendant] would incur fees while [plaintiff] would not.  [Plaintiff] did not even disclose an expert until” days before the close of fact discovery.”  Id. at 7.
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Judge Robinson has issued another decision denying a motion to dismiss joint and contributory infringement claims. Her Honor found that the plaintiff’s “claims of contributory infringement are facially plausible and provide defendants with adequate notice to satisfy the pleading requirements of Twombly and Iqbal.” Intellectual Ventures I LLC, et al. v. Ricoh Co., Ltd., et al., C.A. No. 13-474-SLR, Memo. Op. at 9 (D. Del. Sept. 12, 2014). Further, “[f]or each patent-in-suit, plaintiffs describe the accused products and include a representative product . . . and assert that ‘these components and apparatuses are not staple articles of commerce suitable for substantial non-infringing use.’” Id. This, Judge Robinson found, was consistent with “Form 18’s liberal pleading requirements which allow plaintiffs to plead that entire product categories infringe the patent-in-suit.” Id. Finally, Consistent with and citing to her prior decision in Walker Digital LLC v. Facebook, Inc., 852 F. Supp. 2d 559, 565 (D. Del. 2012), Judge Robinson found that the complaint “appropriately asserts that defendants had knowledge of its infringement ‘at least through the filing and/or service of this Complaint.’” Id.

The defendants also moved on grounds of lack of personal jurisdiction over one particular defendant, Ricoh Company, Ltd. (RCL), which is a Japanese corporation with a principal place of business in Tokyo. Judge Robinson granted the motion to dismiss for lack of personal jurisdiction because the Court had neither general jurisdiction nor “dual jurisdiction” under Delaware’s long-arm statute. Id. at 6-8. General jurisdiction did not exist over RCL because it had not “undertaken any direct acts in Delaware, does not directly sell products in the United States, is not registered to do business in Delaware, has no offices or registered agents in Delaware, and has no control or agency relationship with its U.S.-based subsidiaries.” Id. at 7. Furthermore, the Supreme Court’s recent Daimler v. Bauman decision made clear that general jurisdiction could not exist based on RCL’s relationship with its Delaware-incorporated subsidiaries. Id. Furthermore, the plaintiffs’ argument that there was “dual jurisdiction” was unpersuasive because there was “no evidence in the record that RCL has the requisite intent to sell Ricoh products in Delaware,” including no evidence that RCL’s website allows the direct purchase of Ricoh products. Id. at 7-8. Finally, Judge Robinson declined to allow jurisdictional discovery because “RCL is a Japanese corporation doing business solely in Asia with its subsidiaries” so plaintiffs did not show with a “reasonable particularity the possible existence of the requisite contacts between [the party] and the forum state.” Id. at 8 (internal quotations omitted).

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In a recent Memorandum Opinion, Magistrate Judge Sherry R. Fallon granted defendants’ motion to strike plaintiff’s opening summary judgment and Daubert papers, but also ruled that plaintiff may file “amended briefs and exhibits within fourteen (14) days.” Monec Holding AG v. Motorola Mobility, Inc., C.A. No. 11-798-LPS-SRF (D. Del. Sept. 5, 2014). Defendants moved to strike based on the grounds that plaintiff “improperly exceeded the page limits for its summary judgment briefing by including factual material, citations, and legal analysis in the attached exhibits.” Id. at 2. As Judge Fallon explained, “[t]his court has recognized the impropriety of including legal analyses in charts attached as exhibits to the briefing, as opposed to including them in the briefing itself, for purposes of circumventing page limitations.” Id. Judge Fallon reasoned that defendants were prejudiced as the result plaintiff’s “improper reliance on Exhibit 1 of the [declaration] to convey its legal arguments because [defendants] must respond to the 272-page exhibit within the briefing page limitations established by the court.” Id. at 3. Judge Fallon therefore struck the opening summary judgment and Daubert papers, but granted plaintiff an opportunity to file amended opening briefs and supporting documents within fourteen days of the Court’s order. Id. at 3.

 

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Chief Judge Leonard P. Stark recently decided issues raised at the pretrial conference, after considering letter briefs submitted by the parties.  Masimo Corp. v. Philips Elec. N.A, C.A. No. 09-80-LPS (D. Del. Sept. 12, 2014).  Judge Stark allowed Philips to try its indirect infringement claims despite failing to “adequately” respond to Masimo’s interrogatories.  Id. at ¶ 1.  Because Masimo never complained of the sufficiency of Philip’s responses until a few weeks before trial, Judge Stark determined that “the best exercise of [the Court's] discretion is to permit the indirect infringement allegations to be tried.”  Id.  Judge Stark also decided issues related to Masimo’s trial presentation regarding damages in light of Philips’ recent concession of infringement.  Judge Stark permitted Masimo to present evidence of Philips’ alleged infringement and that the infringement allegations were pending during the parties negotiations:  “This is necessary to avoid the jury incorrectly assuming that Masimo engaged in negotiations with Philips because Masimo was highly motivated to license the patents.”  Id. at ¶ 2.A.    Masimo would not be permitted, however to present any further information because Masimo failed to demonstrate that such information would be “necessary as part of a proper damages analysis” and the risk of confusing the jury outweighed any probative value.  Id.  As part of its damages presentation, Judge Stark also permitted Masimo to present evidence about Masimo’s prior litigation involving the patent-in-suit and that the the patent was found valid and infringed prior to the parties entering into a settlement agreement (the details of which were relied upon by the parties’ experts).  Id. at ¶ 2.B.

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Judge Leonard P. Stark decided numerous pending motions in various Intellectual Ventures’ lawsuits, C.A. Nos. 12-193-LPS, 13-1631-LPS, 13-1634-LPS, 13-1635-LPS, 13-1668-LPS, to 13-1672-LPS (D. Del. Sept. 8, 2014).  First, Judge Stark granted Sierra Wireless America Inc.’s and Ericsson Inc.’s motions to intervene, finding that the intervenors’ motions were timely (having been filed prior to claim construction) and were necessary so that the intervenors could “protect their interest in products which [the intervenors] manufacture for Defendants, an interest put at risk by the litigation as Plaintiffs accuse these products of infringement.”  Id. at ¶ 6.  Judge Stark rejected plaintiff’s argument that intervention as a right is only appropriate if the intervenors owe an indemnity obligation to defendants.  Id. at ¶ 7.  An intervenor must demonstrate “an interest relating to the property or transaction which is the subject of the action[,].” which they have done here by “demonstrating their interest in the very devices accused of infringement.”  Id. at ¶ 8 (quoting Liberty Mut. Ins. Co. v. Treesdale, Inc., 419 F.3d 216, 220 (3d Cir. 2005).

Judge Stark also granted Plaintiff’s motion for leave to amend its complaints to add certain subsidiaries as named defendants, finding the motions timely and the amendment not futile or prejudicial.  Id. at ¶ 13.  Judge Stark also granted numerous defendant’s motion to sever, creating ten separate cases; and defendant Nextel Operations Inc.’s unopposed motion to redact portions of a discovery conference transcript.  Id. at ¶¶ 14-15.

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Judge Andrews has denied a motion for summary judgment of non-infringement in litigation between Plaintiff Openwave Systems and Defendants Apple and RIM, although he did so “with some frustration.” Openwave Sys., Inc. v. Apple Inc., et al., C.A. No. 11-765-RGA, Memo. Or. at 3 (D. Del. Sept. 9, 2014). Judge Andrews’ frustration stemmed from the “unexpected” nature of the motion, given that the plaintiff had previously stated that if the Court adopts a construction “that matches the ALJ’s construction [from a related action] in all material respects, the parties will meet and confer to present a motion or stipulation to the Court terminating this case.” Id. at 1. Judge Andrews did, in fact, adopt such a matching construction, adding only a footnote clarifying the ALJ’s construction by saying it “does not read out embodiments including microcontrollers.” Id. The plaintiff then argued that this footnote was a material difference from the ALJ’s construction, and the defendants moved for summary judgment. Id.

Judge Andrews indicated that he disagreed that his footnote was a material difference in claim construction, but would not “further consider at this time the consequences of Plaintiff’s unfulfilled representations,” although he expected to “be able to revisit [this topic] when the question of sanctions or exceptional case arises.” Id. at 1, 3. Turning to the substance of the non-infringement motion, Judge Andrews explained that the plaintiff attempted to show a genuine issue of material fact because each accused product contains a computer module and also a microcontroller. Although the patents disclaimed devices containing computer modules, “a microcontroller can be considered a computer module, [so] saying that something is a computer module does not necessarily mean that it is anything different than a microcontroller.” Id. at 2. Thus, Judge Andrews concluded, “the patentee distinguished computer modules from microcontrollers, but the distinction between the two, which may be obvious to a POSITA, is not obvious to me. Therefore, while it is clear to me that the question of infringement is whether the accused products contain a computer module that is not solely a microcontroller, the answer is not clear based on the record before me.” Id. at 3.

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Judge Richard G. Andrews recently issued a claim construction ruling in three related cases. Pragmatus Telecom, LLC v. Volkswagen Group of America, Inc., et al., Master Docket No. 12-1533-RGA (D. Del. Sept. 9, 2014).  The Court construed the following claim terms:

  • “server” and “the server”
  • “help request form including the customer IP address”
  • “upon selection of the remote help option, send a help request to the call center”
  • “a contact channel”
  • “a WWW server comprising ‘means for providing access by customers to a web page including a help request interface for receiving requests for help from customers’”
  • “CGI programs”
  • “automated call distribution system”
  • “call center” and “call centre”
  • “customer IP address”

The Court noted that during oral argument the parties agreed to constructions of the following terms, which the Court adopted:

  • “remote help option”
  • “help request form” and “help request” and “requests for help”

Based on the Court’s constructions, and adoption of the parties’ agreed constructions, the Court gave the following terms their plain and ordinary meaning:

  • “the remote help option provides for the selection of one of a plurality of different contact channels”
  • “help request form including the customer IP address”

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Judge Andrews recently issued his construction of numerous disputed terms from the 100-plus claims of Semcon Tech’s U.S. Patent No. 7,156,717. The terms construed were:
- “tracked information”
- “control parameters”
- “finishing cycle time”
- “in situ finishing information”
- “in situ process information”
- “processor to evaluate the in situ process information and the tracked information”
- “processor for processing: (i) the tracked information, and (ii) historical performance”
- “[a multiplicity of] finishing information”
- “tracked semiconductor wafer”
- “a family of stored information”
- “member [of/in] the family of stored information”
- “historical performance”
- “a first uniform region”
- “a second uniform region”
- “one uniform region”
- “heterogeneous semiconductor wafer surface”
- “heterogeneous regions of a semiconductor wafer surface”
-

Semcon Tech, LLC v. Micron Tech., Inc., C.A. No. 12-532-RGA, Memo. Op. at 3-19 (D. Del. Sept. 9, 2014). The parties also requested construction of “several lengthy claim terms largely comprised of the terms construed above,” and Judge Andrews found that the “terms that required construction have been construed . . . [and] the remainder of the long phrases receive their plain and ordinary meaning.” Id. at 19.

Interestingly, with respect to “finishing cycle time,” the patentee acted as his own lexicographer. Because the parties disagreed about the meaning of the definition provided in the specification, however, at the Markman hearing Judge Andrews requested supplemental briefing on the necessity of construing the patent’s definition. Based on authority submitted by the defendant, Judge Andrews concluded that it was proper “if necessary to reach the correct construction, [for] a district court [to] elucidate a claim’s meaning by providing a derivative construction of a nonclaim term.” Nevertheless, such “additional judicial guidance” was not necessary to reach the construction of “finishing cycle time,” and Judge Andrews adopted the patentee’s lexicographical definition in the specification. Id. at 7-8.

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