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Judge Andrews recently granted a Rule 12(b)(6) motion to dismiss for lack of patentable subject matter under 35 U.S.C. § 101 and Alice Corp. Priceplay.com, Inc. v. AOL Advertising, Inc., C.A. No. 14-92-RGA, Memo. Op. at 10 (D. Del. Mar. 18, 2015). Under the first step of the Alice analysis, His Honor found that the patents-in-suit were directed to the abstract idea of “a sales transaction,” a “fundamental economic practice long prevalent in our system of commerce.” Id. at 5-6. “[The plaintiff] argues that the claimed invention cannot be directed to patent-ineligible subject matter when ‘hundreds of e-commerce models have been commercialized and developed’ in recent years. . . . [but t]here are many products and services that are commercially available that are not directed to patent-eligible subject matter. Therefore, the examples provided by [the plaintiff] have little impact on the patentability of the claimed subject matter. . . . Performing a sales transaction over the Internet, or in conjunction with an auction and a competitive activity, does not make the concept any more ‘concrete.’” Id.

The Court then found that the patents-in-suit lacked an inventive concept. The plaintiff argued that “the ‘novel combination of a buyer’s participation in both an auction and a ‘competitive’ or ‘intermediary’ activity is distinct from any of the systems for conducting e-commerce,’ and thus makes the subject matter patent-eligible.” Id. at 7. But Judge Andrews explained that “the addition of an auction and a competitive activity to a sales transaction is nothing more than the addition of ‘well-understood, routine, conventional activity.’” Further, “the Internet is not essential to perform the claimed functions. Reliance on an intermediary activity to determine price has been a practice in sale negotiations throughout history, long before the existence of the Internet or computers.” Id. at 7-8.

After the motion was briefed, Judge Andrews ordered the plaintiff to submit proposed claim constructions to determine if construction would impact the motion. During oral argument on the motion, the parties agreed that the proposed construction did not affect any argument regarding the motion. Id. at 1.

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Judge Sue L. Robinson recently issued rulings in advance of trial in Intellectual Ventures I, LLC v. Motorola Mobility LLC, C. A. No. 11-908-SLR (D. Del. March 13, 2015).  Judge Robinson prohibited IV from introducing evidence of other entities who have licensed the patents in suit (either individually or as party of a portfolio) or were granted covenants not to sue.  In the 2014 trial Judge Robinson permitted such evidence as proof of secondary considerations because both parties discussed plaintiffs’ business model (which will not be discussed in this case).  Judge Robinson also issued rulings regarding plaintiffs’ doctrine of equivalents defense, but delayed decision on other remaining issues such as the merits of defendant’s divided infringement defense.  Judge Robinson’s rulings on summary judgment can be found here and here.

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In a recent Memorandum Order, Judge Richard G. Andrews granted defendants’ motion to stay pending the resolution of two inter partes reviews.  CallWave Commc’ns, LLC v. AT&T Mobility, LLC, et al., C.A. No. 12-1701-RGA (D. Del. Mar. 18, 2015).   Although the plaintiff argued that the second instituted inter partes review was procedurally improper and could be dismissed, the Court found that even in such case the first instituted inter partes review likely would simplify the issues in dispute for trial.

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In Tenon & Groove, LLC, et al. v. Plusgrade S.E.C., et al., C.A. No. 12-1118-GMS-SRF, Magistrate Judge Fallon previously recommended granting defendants’ motion for summary judgment that the patents-in-suit were invalid under Section 101 as directed to patent-ineligible abstract ideas.  Judge Gregory M. Sleet has overruled plaintiffs’ objections to the Report, and granted the motion.  Memorandum at 10 (D. Del. Mar. 11, 2015).

In arguing that the patented invention was “an idea but not an abstract idea,” plaintiffs’ objections “attempt[ed] to seize upon the specific language used by the magistrate judge and [defendants]” to point out that their “contradictory articulations of the proper formulation of the abstract idea suggests [sic] the absence of any such ‘abstract’ idea.”  Id. at 5 (emphasis in original).  The Court disagreed that a “contradiction” existed, and even if there was one, observed that “the use of slightly different words to describe something abstract is [not] proof that it is not abstract.”  Id. (emphasis in original).  The Court also rejected plaintiffs’ reliance on DDR Holdings here, 773 F.3d 709 (Fed. Cir. 2014), explaining that in that case, “the defendant’s different characterizations of the idea had no bearing on the Federal Circuit’s ultimate ruling that the claims were patent ineligible.”  Id. at 5-6.

The Court then accepted the magistrate’s conclusion that the patents also failed to claim an inventive concept.  See id. at 7-9.  It again rejected plaintiffs’ reliance on DDR Holdings, explaining that the patented invention here did not solve “a problem unique or inherent to computers” as was the case in DDR HoldingsId. at 8-9.  Finally, while it “may have been unnecessary,” the Court found no error in “[t]he magistrate judge’s decision to analyze the machine-or-transformation test apart from the two-step Alice inquiry . . . .  Magistrate Judge Fallon’s conclusion that the patents-in-suit failed the machine-or-transformation test comports with her analysis under the two-step Alice framework.”  Id. at 9.

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In CryoLife, Inc. v. C.R. Bard, Inc. et al., C.A. No.  14-559-SLR (D. Del. Mar. 10, 2015), Plaintiff CryoLife, Inc. (“CryoLife”) filed a declaratory judgment action against Defendants C.R. Bard, Inc. (“Bard”), Davol, Inc. (“Davol”), and Medafor, Inc. (“Medafor”) (collectively, “Defendants”), seeking a declaration that U.S. Patent No. 6,060,461 (“the ’461 patent”) is invalid and not infringed.  Defendants  moved to dismiss the declaratory judgment for lack of subject matter jurisdiction and failure to state a claim. As to subject matter jurisdiction, Judge Robinson found that there was no “dispute that Medafor is the assignee of the ’461 patent and that Medafor has not granted a written license to Bard or Davol.”  Judge Robinson thus explained that “[e]ven though CryoLife argues that Davol is an implied exclusive licensee, it has offered no evidence that Medafor transferred any of its rights to either Bard or Davol.” CryoLife’s identification of certain facts were insufficient to establish that “Medafor could not sue Cryolife for infringement without joining Bard and/or Davol.” Accordingly, Judge Robinson concluded that the court did not have subject matter jurisdiction over Bard and Davol, and granted Defendants’ motion in that regard.

Judge Robinson then addressed Defendants’ motion to dismiss for failure to state a claim. Judge Robinson found that “CryoLife identifie[d] . . . . specific statutory sections regarding invalidity (§§ 102, 103, and/or 112) and provide[d] examples of invalidating prior art.” Further, “Cryolife also allege[d] a lack of written description.” Id. Judge Robinson also explained that “[w]hile the amended complaint does not identify the relevant statutory sections for indirect infringement or use the terms ‘induced infringement’ or ‘contributory infringement,’ Cryolife has pled that there is no direct or indirect infringement.” Judge Robinson therefore denied Defendants’ motion to dismiss for failure to state a claim.

Following the filing of CryoLife’s declaratory judgment action, Medafor filed a counterclaim for infringement and moved for a preliminary injunction. Finding Medafor to have carried its burden, Judge Robinson granted Medafor’s motion for a preliminary injunction. The patent at issue—the ’461 patent—is titled “Topically Applied Clotting Material.” In 2006, Medafor received FDA approval for ARISTA®, an “innovative hemostatic power that is used to control bleeding when conventional methods are ineffective.” On the other hand, CryoLife was “seeking FDA approval to market PerClot for surgical indications (‘PerClot Surgical’) and received FDA approval of its lnvestigational Drug Exemption application on March 27, 2014.”

Addressing the claim limitations at issue, Judge Robinson concluded that “Medafor’s constructions are consistent with the specification” and that “CryoLife has offered no non-infringement arguments using Medafor’s constructions.”  Judge Robinson therefore concluded Medafor showed “a likelihood of success on infringement.” Judge Robinson was unpersuaded by CryoLife’s invalidity arguments, explaining that “CryoLife argues, without expert testimony or declarations, that certain prior art anticipates or, in combination, renders the asserted claims obvious. CryoLife supports its anticipation and obviousness arguments with reference to a table

of invalidity contentions and the barest of attorney argument.” Judge Robinson also found that Medafor carried its burden demonstrating the remaining prerequisites for a preliminary injunction, explaining that “[t]here is sufficient record evidence that Cryolife’s PerClot product is in direct competition with Medafor’s Arista product and that these products are targeted to the same customers and hospitals.” According to Judge Robinson, Medafor made “persuasive arguments for the loss of its customer base and damage to its goodwill.”

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Judge Andrews recently granted a request by patent infringement defendants to allow additional claim construction briefs and argument regarding certain terms of a patent-in-suit after a jury trial finding the patent valid and infringed. Interdigital Commc’ns, Inc., et al .v. ZTE Corp., et al., C.A. Nos. 13-09-RGA, 13-10-RGA, Memo. Op. at 3-4 (D. Del. Mar. 6, 2015). Among the terms argued was a term that Judge Andrews had previously construed, adopting the construction proposed by the defendants. Post-trial, however, the defendants argued that construction was confusing and “opened the door for Plaintiffs’ expert . . . to make claim construction arguments to the jury at the . . . trial.” Id. at 9. The plaintiffs argued that their expert’s construction was the correct construction and that the defendants should not be permitted to relitigate claim construction when the defendants’ construction was adopted originally. Id. at 9-10.

At the trial, the defendants objected to the expert’s testimony, and the Court sustained the objection and struck the testimony. Judge Andrews also noted, in his claim construction opinion, that such testimony by the expert is improper and could be sanctionable. Id. at 9-10. Post-trial, however, Judge Andrews adopted the plaintiffs’ construction, noting that “Defendants’ argument that this interpretation is objectionable because the Court struck Dr. Cooklev’s testimony at the ZTE trial misunderstands the Court’s ruling. The testimony was improper because Dr. Cooklev was arguing a question of law to the jury. It was not that the substance of the argument was necessarily objectionable, it was that the argument was being made at all.” Id. at 11-12.

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In Williamson v. Google Inc., C.A. No. 14-216-GMS (D. Del. Mar. 2, 2015), Judge Gregory M. Sleet granted Google’s motion to transfer to the Northern District of California. Judge Sleet noted that “Williamson is not at home in Delaware, and therefore his choice is ‘entitled to less deference.’”  Id. at 2.  On the other hand, as Judge Sleet noted, Google “has legitimate reasons for seeking to litigate” in the Northern District of California, as its principal place of business is in Mountain View, California. According to Judge Sleet, Google’s choice was therefore entitled to “some—but not overriding—deference.”  Id. at 2-3. Further, considering Google’s logistics  and the fact that  Williamson would be required to travel in any case, Judge Sleet found the Northern District of California to be “more convenient” to the parties.  Id. at 3. Considering “where the claims arose,” Judge Sleet explained that “Google designed and developed the accused AdSense product in Mountain View; Google continues to develop and market AdSense from that location. Therefore the infringement claims have ‘deeper roots’ in the Northern District of California than in the District of Delaware.”  Addressing non-party witnesses, Judge Sleet noted that Google argued “its invalidity contentions may rely on testimony from founders or inventors at . . . companies . . . who would not be subject to Delaware’s subpoena power.” Id. at 5. On balance, Judge Sleet found that the Jumara factors as a whole weighed in favor of transfer.

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Chief Magistrate Judge Mary Pat Thynge recently issued a report recommending the denial of a plaintiff’s motion which sought to accelerate an appeal of the Court’s ruling that Claims 113 and 114 of U.S. Patent No. 7,783,299 are invalid.  TruePostition, Inc. v. Polaris Wireless, Inc., C.A. No. 12-646-RGA-MPT (D. Del. Mar. 3, 2015).  Claims 113 and 114 previously had been found indefinite after a Markman hearing, but the parties were still litigating factual issues relating to a third claim, Claim 98.  With respect to Rule 54(b) certification, Judge Thynge explained, “the three asserted claims must be viewed as part of a single action for relief based on infringement.  Claims 113 and 114 have been resolved; Claim 98 has not.  As a result, the single right of action for relief based on infringement of the ‘299 Patent is not final within the meaning of Rule 54(b).”  Id. at 8.  With respect to voluntary dismissal without prejudice under Rule 41(a)(2) of the remaining Claim 98 infringement claim, Magistrate Judge Thynge viewed such a dismissal as unwarranted given that the parties already had expended significant amounts of their time, and the Court’s time, on issues relating to the Claim 98.  Id. at 13-14.  As a result, the plaintiff’s motion was denied.

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In the wake of two recent decisions regarding whether Delaware has jurisdiction over Mylan Pharmaceuticals, Inc. in ANDA litigation (Acorda Therapeutics, Inc. and AstraZeneca AB), Magistrate Judge Christopher J. Burke concluded that it did, and thus recommended that Mylan’s motion to dismiss for lack of personal jurisdiction be denied.  Forest Laboratories, Inc., et al. v. Amneal Pharmaceuticals LLC, et al., C.A. No. 14-508-LPS (D. Del. Feb. 26, 2015).

Similar to Judge Stark’s recent decision in Acorda, Judge Burke concluded that Mylan had consented to Delaware jurisdiction by registering to do business there – an argument also offered by plaintiffs in the Acorda and AstraZeneca cases.

Judge Burke recognized that the recent Acorda and AstraZeneca decisions came to opposite conclusions on this issue, and engaged in a fullsome analysis of whether compliance with state registration statute can be basis for finding consent to personal jurisdiction, both before the Supreme Court’s Daimler decision and in light of this decision.  See id. at 7-32.  Having done so, and having “address[ed] various points made” in both the Acorda and AstraZeneca opinions, Judge Burke  concluded that Mylan had consented to jurisdiction in Delaware. Id. at 32.

As a matter of procedure, Judge Burke also observed in a footnote that His Honor did not consider additional notices of supplemental authority the parties had filed, as they went “well beyond citing supplemental authority, and instead include extensive argument akin to what would be found in a brief,” in violation of Local Rule 7.1.2(b) that prohibits such supplemental argument.  Id. at 2 n.1.

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Judge Sleet recently considered two patent infringement defendants’ motions to dismiss for failure to state a claim and lack of subject matter jurisdiction as well as motions to stay pending inter partes review. His Honor denied the motions to dismiss, explaining that “[Defendants] ask too much of [plaintiff] at this stage, and would require that [plaintiff] identify each claim element that is practiced by the accused products. The burden of pleading is not so high.” Message Notification Technologies LLC v. Microsoft Corp., et al., C.A. Nos. 13-1881-GMS, 13-1883-GMS, Order at 2-3 n.3 (D. Del. Feb. 23, 2015). Furthermore, the operative complaints were filed prior to the Supreme Court’s decision in Limelight Networks, Inc. v. Akamai Technologies, Inc., so although “it appears several of [plaintiff’s] statements rested on the assumption that ‘divided infringement’ was a viable route to liability[, defendants] will have the opportunity to test [plaintiff’s] allegations through summary judgment, but only after [plaintiff] is allowed discovery.” Id. Judge Sleet also rejected the subject matter jurisdiction argument, finding that the plaintiff adequately plead ownership of the patent-in-suit and thus had standing. Id.

However, Judge Sleet granted defendants’ motions to stay due to a lack of undue prejudice, potential simplification of issues, and the stage of the case: “It is true that [defendant] filed its petition seeking IPR review on the eve of its one-year deadline. . . . Although this delay would typically suggest prejudice or tactical advantage, in this case, the court has not yet entered a schedule.” Id. at 3 n.4. Furthermore, because the PTAB institutes review in the majority of IPR petitions, Judge Sleet did “not consider the fact that the [PTAB] has not yet decided to institute review of Microsoft’s petition to be of great moment,” and the plaintiff “is a non-practicing entity, without competing products, thus minimizing the risk of harm.” Id. Finally, the defendant that filed the IPR “is statutorily estopped from re-litigating issues decided by the PTAB, and [the non-IPR defendant] has stipulated to be similarly estopped. Thus, there is no danger of duplicative litigation.” Id.

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