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Judge Sleet was recently required to decide a unique issue in a copyright and trademark infringement case raised by the Digital Millennium Copyright Act’s (DMCA) notice and takedown Safe Harbor procedure. The plaintiff, Square Ring, is a boxing and mixed martial arts promoter that promoted a fight that occurred on March 21, 2009 and owns the copyright to the broadcast of that fight. The defendant, UStream, is a website that allows users to stream video of live events over the Internet. In the days leading up to the March 21 fight, Square Ring sent UStream four emails notifying UStream that the March 21 fight would likely be shared on UStream and requesting in advance that Square Ring be given either a “take down tool” or “appropriate staffing with the ability to simultaneously remove infringing content from your site.” Square Ring, Inc. v. John Doe-1, et al., C.A. No. 09-563-GMS, Memo. at 1-5 (D. Del. Jan. 23, 2015). UStream moved for summary judgment that it is immune from liability for copyright infringement due to the DMCA Safe Harbor provisions.

Judge Sleet first rejected Square Ring’s argument that Congress intended to exclude live broadcasts from the reach of the DMCA Safe Harbor. Id. at 8-9. His Honor then proceeded to the statutory analysis and addressed whether UStream met the Safe Harbor’s three threshold requirements. Judge Sleet found that because “UStream provides a website that allows its users to stream, share, and comment on user-generated video content . . . no genuine issue of material fact exists as to UStream’s qualification as a ‘service provider’ under” the DMCA. Id. at 9-10. Next, Judge Sleet addressed whether UStream satisfied the requirement for “reasonable implementation” of a “policy under which copyright holders can submit a take-down notice, such policy is available to the public through its website, and the service provider acts to remove infringing content once it receives adequate takedown notices.” Id. at 10. UStream has two office staffed with individuals who respond to DMCA takedown notices, and Judge Sleet found that “UStream has a strong DMCA policy, provides instructions for copyright owners to report alleged copyright infringement, takes active steps to limit incidents of infringement on its website and works diligently to keep unauthorized works off its website.” Id. Finally, to qualify for the Safe Harbor, “a service provider must accommodate and not interfere with standard technical measures used by copyright owners to identify or protect copyrighted works.” Id. at 10-11. Here, “Square Ring has not presented any evidence that UStream sought to conceal, delete, or suppress its ability to identify the March 21 Broadcast. Quite the opposite is true here. Square Ring’s monitoring agent was able to readily identify the channel names and URLs of the three purportedly infringing streams on the day that they were broadcast. . . . The court finds, as a matter of law, that UStream meets all three of the DMCA threshold requirements.” Id. at 10-11.

Judge Sleet then analyzed whether the specific requirements of the 17 U.S.C. § 512(c) Safe Harbor were met, and found under the circumstances that a material issue of fact remained for the jury as to “whether UStrearn was willfully blind such that it is not eligible for safe harbor protection” even though “UStrearn was not under an affirmative duty to discover and remove the March 21 Broadcast.” Id. at 12-13. Interestingly, the Court found that “questions related to UStrearn’s ‘red flag knowledge’ as a result of the pre-event notices are appropriately left to trial” and therefore “the lack of DMCA-compliant notice prior to the March 21 Broadcast is not fatal to Square Ring’s claims.” Id. at 13. Here, it was “clear . . . that Square Ring was incapable of providing a formal takedown notice compliance with the DMCA prior to the start of the March 21 Broadcast.” Id. at 13 n.5. Square Ring, accordingly, conceded that its emails prior to the March 21 fight were not adequate DMCA takedown notices, but contended that UStream had actual or constructive knowledge of infringement that precludes the safe harbor protections. Similarly, Square Ring contended that UStream did not act “expeditiously” to remove the March 21 Broadcast. Judge Sleet ultimately was “persuaded . . . by the complete lack of legal precedent for this factual situation” and was “not prepare to make a factual determination” when proceeding to trial would resolve such material issues of fact. Id. at 13.

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In a recent Memorandum Order, Chief Judge Leonard P. Stark ruled on two issues following the pretrial conference. Intellectual Ventures I LLC v. Symantec Corp., C.A. No. 10-1067-LPS (D. Del. Jan. 21, 2015). First, Judge Stark ruled that “[t]he two newly-accused products will not be the subject of the trial beginning next week.” Id. at 1. Judge Stark provided this ruling, however, without prejudice to plaintiff “to seek relief related to [the newly-accused products] through an appropriate post-trial proceeding in this case or by filing a new suit.” Id.

Second, Judge Stark found that defendant would “not be permitted to present its false marking ‘defense’ at the forthcoming trial.” Id. Judge Stark explained that with respect to two of the three asserted patents, plaintiff is asserting only method claims, and “the marking requirement does not apply to method claims.” Id. With respect to the remaining patent-in-suit, Judge Stark found that “as an exercise of its discretion and as proper case management, that it would be unfairly prejudicial to [plaintiff] to allow [defendant], at nearly the final moment before trial (i.e., listing it as a contested issue in the proposed pretrial order), to put [plaintiff] in a position in which it must prove that it (or its predecessors and/or licensees) marked [its] embodiments.” Id. at 2. Specifically, defendant “mistakenly or misleadingly” identified failure to mark as an affirmative defense in its answer, but did not discuss § 287 in its responses to interrogatories, did not provide expert discovery on failure to mark, and did not propose a jury instruction on failure to mark at the time the parties exchanged instruction proposals. Id. On balance, Judge Stark determined that defendant “failed to give [plaintiff] adequate, meaningful notice that it contested marking,” and defendant therefore “waived and/or abandoned its right to contest marking at the forthcoming trial.” Id. at 2-3.

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In Vehicle Interface Technologies, LLC v. Ford Motor Company and its related case against Jaguar Land Rover North America, Judge Richard G. Andrews recently granted the defendants’ motions for summary judgment of invalidity based on anticipation.  C.A. Nos. 12-1284-RGA, 12-1285-RGA (D. Del. Jan. 21, 2015).  The patent-in-suit is U.S. Patent No. 6,842,677, entitled “Vehicle User Interface System and Method.”  Defendants argued anticipation based on the prior sale of the 2001 Mercedes-Benz E-Class.  Id. at 3.  The only disputed issue was the construction of one term (“page”), as plaintiff conceded that if the Court adopted defendants’ construction, then the patent-in-suit was anticipated by this prior art reference.  Id. at 5.  Having adopted defendants’ construction, id. at 10, the Court concluded that the reference was anticipatory and granted defendants’ motion.  Id. at 11-12.

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In a series of related cases brought by Joao Bock Transaction Systems, LLC, Judge Sue L. Robinson granted defendants’ motions to stay pending a final determination by the Federal Circuit in a different case brought by this plaintiff and involving the same patent-in-suit.  E.g. Joao Bock Transaction Systems, LLC v. Capital One Financial Corporation, et al., C.A. No. 14-425-SLR (D. Del. Jan. 12, 2015) (related cases 14-529, 14-530). Because the Federal Circuit will decide whether this patent is invalid under Section 101, a stay would simplify the cases’ issues and streamline the litigations.  Id. at 2.  The Court pointed out that “under the circumstances at bar, the movants are not seeking an undue litigation advantage, but simply seeking the guidance of the Federal Circuit (as is this court) before having to invest in potentially needless litigation.”  Id. at 2-3.

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Chief Judge Stark recently granted Defendant Trend Micro’s motion to transfer a patent infringement suit brought by Selene Communication Technologies to the Northern District of California. Considering the Third Circuit’s Jumara factors, His Honor found “that the factors, in total, weigh sufficiently strongly in favor of transfer.” Selene Commc’n Techs., LLC v. Trend Micro Inc., et al., C.A. No. 14-435-LPS, Memo. Or. at 1 (D. Del. Jan. 16, 2015).

Initially, Judge Stark explained that the plaintiff’s choice of forum and incorporation in Delaware were not dispositive. “[T]he deference to be given to Selene’s choice of forum is reduced because Selene’s principal place of business is in Shaker Heights, Ohio. Additionally, Selene was only created in 2011 and has only owned the patent-in-suit since July 2013.” Id. at 1-2.

On the other hand, the defendants’ choice of forum weighed in favor of transfer because one defendant is a California corporation and the other is a Delaware corporation, but both have significant operations in Cupertino, California. Thus, “Defendants have legitimate and rational reasons for their choice of forum, and therefore, it is entitled to weight, but not the same weight as Plaintiffs’ choice of forum.” Id. at 2. The location where the claim arose also weighed in favor of transfer because “research and development of the allegedly infringing products occurred primarily in the Northern District” of California and “the patent-in-suit was, until July 2013, held by . . . a California company with a principal place of business in Menlo Park, California, meaning that any harm from infringement prior to that date was suffered primarily in the Northern District.” Id. at 2-3. Additionally, the convenience of witnesses weighed in favor of transfer because, although there was no evidence that third party witnesses would refuse to testify without a subpoena, three of the four inventors reside in the Northern District. Id. at 3.

Judge Stark concluded: “The remaining Jumara factors are either neutral or slightly favor transfer. Overall, then, the Court concludes that Trend Micro has met its burden to show that the pertinent factors weigh strongly in favor of transfer.” Id. at 3-4.

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In a recent Memorandum Order, Magistrate Judge Christopher J. Burke denied plaintiff’s motion to lift the stay pending inter partes review (“IPR”) in two related actions. Princeton Digital Image Corp. v. Konami Digital Entertainment Inc., C.A. Nos. 12-1461, 13-335-LPS-CJB (D. Del. Jan. 14, 2015). Defendants had filed two petitions for IPR of the patent-in-suit, U.S. Patent No. 5,513,129 (“the ‘129 patent”), and the PTAB granted each petition in part. Id. at 2-3. As Judge Burke explained, only “three claims from the ‘129 Patent’s 23 claims are not currently under review in [the] two IPR proceedings: claims 14, 19, and 20.” Id. Each of those three claims are dependent claims, depending from two independent claims under review. Plaintiff thus requested that the Court lift the stay “at least with respect to claims 14, 19, and 20.” Id. at 3.

Judge Burke found, however, that “were Plaintiff’s request to lift the stay granted-either as to claims 14, 19 and 20, or as to all claims-that could significantly complicate the issues in these actions and lead to inefficiency.” Id. at 4. Judge Burke further explained that “the ongoing IPR proceedings could simplify issues at play in this case-even as to the few dependent claims (claims 14, 19 and 20) that the PTAB does not currently have under review.” Id. at 5. Lastly, Judge Burke noted that as of the current date, “all but three of the [the ‘129 patent’s] claims are under review,” which was less than the six claims not under review at the time the court initially granted stay. Id. at 6. Judge Burke therefore concluded that “any changed circumstances since the date of the Court’s Order on the stay motions do not favor Plaintiff’s position” regarding simplification of the issues, and “[i]f anything, . . . the rationale for a stay [with respect to simplification] is stronger now as compared to when the Court initially granted the stay.” Id.

Turning to plaintiff’s argument regarding undue prejudice, Judge Burke explained that since the Court’s original order granting stay, “the most significant changed circumstance is the fact that the PTAB has initiated its review” in response to a second IPR petition. Id. at 7. Judge Burke found that “[t]he additional delay likely associated with that proceeding will mean that relevant PTAB proceedings will remain ongoing longer than was expected at the time of the Court’s prior Order,” but also explained that “[t]he mere potential for delay . . . is insufficient to establish undue prejudice.” Id. at 7-8. Judge Burke further noted that the “other relevant subfactors” related to undue prejudice (the timing of the request for review, the timing of the request for a stay, and the relationship of the parties) favored stay. Id. at 8. On balance, Judge Burke found the “undue prejudice” factor to be neutral. Id. at 8.

Considering the factors discussed, Judge Burke concluded that “overall, the calculus still supports a stay.” Id. at 8.

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In a recent Order, Judge Gregory M. Sleet ruled that a plaintiff/assignee lacked standing to assert privilege over communications between its assignor and the assignor’s counsel, explaining that the assignment of a patent, on its own, does not result in the assignee “inheriting” the assignor’s attorney-client privilege with respect to the prosecution of the patent.  Green Mountain Glass, LLC v. Saint-Gobain Containers, Inc., C.A. No. 14-392-GMS (D. Del. Jan. 14, 2015).  Rather, Judge Sleet explained, the privilege analysis depends on a close review of the facts to determine whether the assignment resulted in a “transfer of control of the business and the continuation of the business under new management,” as opposed to simply the transfer of an asset.  Id. at 2 n.1 (quoting SimpleAir, Inc. v. Microsoft Corp., 2013 WL 4574594, at *2 (E.D. Tex. Aug. 27, 2013)).  In this case, the Court found that the assignor and assignee entities “were certainly not strangers to one another,” but saw “no relationship that would support a transfer of privilege.”  The Court acknowledged that “a planned stock-for-stock merger” could support a showing that “a continuous relationship existed between” the assignor and the assignee, but noted that in this case “the anticipated merger did not occur.”  Id. at 2 n.1.  As a result, the Court viewed the assignment as a mere transfer of assets, with no transfer of privilege.

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Chief Judge Stark recently denied a plaintiff’s Rule 60 motion to set aside a jury verdict.  Power Integrations, Inc. v. Fairchild Semiconductor Int’l Inc., et al., C.A. No. 08-309-LPS (D. Del. Jan. 13, 2015).  Judge Stark found the motion was untimely, coming more than 30 months after the verdict and 19 months after the Court’s rulings on post-trial motions.  Further, the Court found that the plaintiff had not identified any new evidence that existed at trial but were not discoverable at that time.  Rather, the Court explained the motion was based on evidence which came into existence after trial through events occurring in a related case and reexamination.

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Chief Judge Leonard P. Stark recently considered a motion dismiss plaintiff’s ANDA infringement action for lack of personal jurisdiction, applying the recent Supreme Court decision Daimler AG v. Bauman, 134 S. Ct. 746 (2014).  Acorda Therapeutics, Inc. v. Mylan Pharms. Inc., C.A. No. 14-935-LPS (D. Del. Jan. 14, 2015).  Judge Stark agreed that Daimler “altered the analysis with respect to general jurisdiction[,]” but unlike the recent decision by Judge Sleet, found that “Mylan Pharma consented to this Court’s exercise of personal jurisdiction when it registered to do business and appointed an agent for service of process in the State of Delaware.”  Id. at 1.  Regarding Mylan Pharma’s co-defendant and corporate parent, Mylan Inc., while it is not registered to do business in Delaware, Plaintiffs allege “a non-frivolous claim that Mylan Inc. used Mylan Pharma as its agent in connection with the ANDA filing giving rise to this litigation.”  Id. at 2.  Therefore, as to Mylan Inc., jurisdictional discovery was warranted.

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Judge Andrews recently denied Plaintiffs’ motion to modify a protective order in order to permit Plaintiffs to use expert reports from the District Court litigation (that had already proceeded to trial) in inter partes review proceedings pending before the Patent Trial and Appeal Board.  Novartis Pharms. Corp. v. Noven Pharms., Inc., C.A. No. 13-527-RGA (D. Del. Jan. 9, 2015).  Plaintiffs argued that good cause existed to modify the protective order so that Plaintiffs could demonstrate inconsistencies in the expert’s opinions.  Judge Andrews disagreed finding that Plaintiffs:

had motivation to demonstrate inconsistencies in the opinions of [the expert] in the trial held before me, and, based on the citations in Plaintiffs letter, did so, or, at least, tried to do so. I do not understand, given the representation that the trial transcript can be used in the IPR, and that [the expert] will soon be deposed and can presumably be further questioned about whether anything he said at trial is inconsistent with his current invalidity analysis (which, I gather, has not changed), why his infringement report is necessary for justice to be had.

Furthermore, Judge Andrews found defendant’s confidentiality concerns to be legitimate and not worth the risk considering Plaintiffs’ “minimal” need for using the expert reports in the IPR.

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