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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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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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In a recent memorandum opinion, Chief Judge Leonard P. Stark invalidated on summary judgment Walker Digital’s U.S. Patents No. 5,884,270 and 5,884,272 for lack of patentable subject matter under 35 U.S.C. § 101.  Walker Digital, LLC v. Google, Inc., C.A. No. 11-318-LPS (D. Del. Sept. 3, 2014).  The patents related to “controlling the release of confidential or sensitive information of at least one of the parties in establishing anonymous communications.”  The Court agreed with a hypothetical proposed by Google, which showed that a human would infringe the independent claim of the ’270  patent during “routine headhunting,” and found that “[t]o allow the claim to survive would disproportionately risk preempting a building block of human interaction, retarding rather than promoting progress, contrary to the very purpose patents are granted.”  With respect to the ’270 patent’s dependent claims, the Court explained that “[e]ven accepting that the use of a computer increases speed and efficiency of performing the steps of the claims, and improves the likelihood of preserving anonymity of the first and second parties, these characteristics do not save the claims.  As the Supreme Court has stated, the mere recicitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.” (internal quotation marks and citation omitted).  The analysis was largely the same with respect to the ’272 patent.

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Judge Sue L. Robinson recently ruled on pretrial issues in advance of a damages trial between Anesta and Mylan.  Anesta Ag., et al. v. Mylan Pharmaceuticals, Inc., et al., Civ. No. 08-889-SLR (D. Del. Aug. 27, 2014).  First, the Court ruled that Mylan could not contest at trial that it indirectly infringed Anesta’s method claims in light of earlier stipulations of direct infringement, explaining that Mylan “made a calculated, strategic business decision to launch their generic products ‘at risk’ – to wit, voluntarily taking the risk that the Federal Circuit would reverse my decision on validity.”  Judge Robinson added that Mylan’s “stipulations of infringement and the subsequent judgments . . . are meaningless other than in the context of contributory infringement.”  The Court also noted that Mylan “never identified non-infringement – clearly a dispositive issue – as an issue they contested in this damages phase of the case until the eve of the pretrial conference. . . . If a party fails to timely identify an issue (other than subject matter jurisdiction), that party is precluded from contesting it at trial.”

Next, Judge Robinson left open the door for Anesta to cross-examine Mylan’s experts on their “hundreds” of previous cases and instances where their testimony was excluded.  Judge Robinson noted that past criticism in other cases “may have no relevance to the analysis performed in this case,” but left open the possibility that such cross-examination might be appropriate if Mylan first “attempt[s] to bolster their experts’ credibility by reference to their service in past cases[.]”  (internal quotation marks omitted).

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Judge Andrews has invalidated claim 1 of Tuxis Tech’s Patent No. 6,055,513 under 35 U.S.C. 101 at the pleadings stage of Tuxis’ infringement suit against Amazon. The patent is directed to what the parties and the Court characterized as “upselling,” i.e. offering a second product to a buyer who has already made a decision to purchase a first product. Judge Andrews found it “clear that the claim 1 of the ‘513 patent is drawn to unpatentable subject matter. It claims the fundamental concept of upselling—a marketing technique as old as the field itself. While the additional limitations of the claim do narrow its scope, they are insufficient to save it from invalidity.” Tuxis Techs., LLC v. Amazon.com, Inc., C.A. No. 13-1771-RGA, Memo. Op. at 4 (D. Del. Sept. 3, 2014).

The parties agreed that upselling is an abstract idea, but disagreed as to whether the claim at issue was meaningfully limited and thus does not pre-empt use of the abstract idea. Id. at 5. On this point, Judge Andrews found that after “analyzing the additional limitations imposed by claim 1 of the ‘513 patent, the idea of upselling has not been sufficiently limited to prevent the claim from ‘cover[ing] the full abstract idea itself.’” Id. at 5-6. Judge Andrews found that none of the limitations identified by the patentee were “meaningful” and allowing the claim to survive would “permit the general concept of upselling to be patented, which pre-empts its use in all fields and ‘effectively grant[s] a monopoly over an abstract idea.’” Id. at 6-7.

Judge Andrews further explained that claim 1 lacked an “inventive concept.” His Honor illustrated this point with an example showing how “[s]hrewd sales representatives have long made their living off of this basic practice”:

A man enters a clothing store to purchase a new pair of dress slacks (“a user initiated primary transaction for the purchase of a good or service”). The sales representative assists the man in finding a pair of pants, and in the process learns that the man is a banker (“a second data element relating to the [identity of the customer]“). Knowing that suspenders are fashionable in the banking profession, the sales representative offers the banker a pair of suspenders that match his pants (”utilizing at least in part the primary transaction data including the identity of the good or service of the primary transaction and the second data element [related to the customer] and determining at least one item for a prospective upsell”). The customer agrees with the sales representative and purchases the suspenders (“receiving an acceptance of the offer … in real time”). This type of marketing strategy is at the heart of claim 1 and has been practiced as long as markets have been in operation.

Id. at 8. Accordingly, Judge Andrews found claim 1 invalid and granted Amazon’s motion to dismiss.

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