Posted On: June 27, 2007

Gavel Passed To Judge Sleet At Annual Delaware FBA Meeting

The Delaware Chapter of the Federal Bar Association held its annual meeting yesterday. The highlight of the meeting was the ceremonial passing of the gavel from current Chief Judge Sue Robinson to new Chief Judge Gregory Sleet. The formal transfer of power will take place on July 1st. Chief Judge Sleet will become the first African-American chief judge in Delaware's history. For an article on the festivities, click here.

In addition to the installation of Chief Judge Sleet, new officers for the FBA were elected, including James Parrett as President, Anne Gaza as VP, Paul Crawford as Treasurer, and our own Karen Keller as Secretary.

Also of note, Leonard Stark, soon to be the new federal Magistrate Judge for the District of Delaware, was on hand and was introduced to the room. Here is a little background on our new magistrate-elect. On a personal note, I am glad to see Mr. Stark is a fellow Blue Hen!

Posted On: June 27, 2007

CAFC Affirms Summary Judgment Decision in D. Del. Business-Intelligence Software Case

On Monday, the Federal Circuit affirmed a decision of former Delaware district judge Kent A. Jordan that granted summary judgment of noninfringment and invalidity. After construing the claims of Plaintiff Microstrategy's three software patents, the district court found that Business Objects did not infringe one and that the other two were invalid for indefiniteness and anticipation, respectively. The Federal Circuit agreed on all counts, holding that the district court properly relied on the summary of the invention and certain reexamination statements to bolster its noninfringement decision.

The Court also concurred on the invalidity decision, noting that because the district court could have interpreted a textual error in one of the patents in several ways, the patent was indefinite as a matter of law.

On anticipation, the Court rejected Microstrategy's argument that the district court improperly relied on a series of manuals as a single prior art reference:

"The recitation of the applicable law [in the summary judgment briefing] . . . does not prevent the waiver of an argument unless that recitation is accompanied by an explanation of how the law applies to the facts of the particular case. Not only did Microstrategy fail to provide such an explanation, but it also failed to challenge Business Objects' statement that the manuals relied upon 'constitute a single prior art disclosure.' " ( slip. op at 8 )

Because Microstrategy did not explicitly identify the issue of multiplicity at the summary judgment stage, it could not object to the district court's anticipation methodology on appeal.

Microstrategy Inc. v. Business Objects Americas, No. 2006-1320 (Fed. Cir. June 25, 2007).

Read the district court opinion: Microstrategy Inc. v. Business Objects Americas, C.A. No. 03-1124-KAJ (D. Del. Jan. 23, 2006) (Jordan, J.).

Posted On: June 27, 2007

Baxter Loses Bid To Have Patent Declared Invalid for Indefiniteness

Talecris Biotherapeutics, Inc. v. Baxter Int'l Inc., C.A. No. 05-349 GMS (D. Del. June 18, 2007).

Talecris sued Baxter for patent infringement, and Baxter counterclaimed for a declaratory judgment of noninfringement and invalidity. In this opinion, Judge Sleet denied Baxter's motion for summary judgment that the patent at issue is invalid for indefiniteness and granted (sua sponte) summary judgment that the patent is not indefinite.

Baxter asserted that three separate claim terms were indefinite: 1) "acceptable level suitable for intravenous administration," 2) "increased level of anticomplement activity," and 3) "then incubating the solution of step a"/"the increased anticomplement activity of the solution." Op. at 4. However, most of the opinion focused on the first claim term, which included the phrase "acceptable level." With regard to this first claim term, the court held that "the record reflects that the phrase has meaning to those of ordinary skill in the art, albeit the determination of that meaning may depend on a number of variables, and the ultimate determination of acceptability may be temporally distant from the time in which the inventive steps of the claim are performed." Op. at 8. Baxter's arguments as to the other claim terms were dismissed by the court as a rehashing of claim construction arguments. Op. at 9.

Despite Talecris' arguments in its briefs that disputes of material fact existed so as to preclude summary judgment, the Court found no genuine issues of material fact existed. Thus, even though Talecris did not cross-move for summary judgment in its favor on the issue of indefiniteness, the Court, sua sponte, granted summary judgment in its favor, removing the indefiniteness issue from the trial to come.

Posted On: June 25, 2007

New District of Delaware Filings

6/18: Abbott Laboratories v. Impax Laboratories, Inc. (patent infringement - Hatch-Waxman)
6/19: QSoft Consulting Limited v. Teddy Tong and tdtong ltd. (trademark)
6/21: Weyerhaeuser Company v. Dow Chemical Company, University of Leeds, BTG International Ltd. and Ian M. Ward (patent infringement)
6/22: MedPointe Healthcare, Inc. v. Sun Pharmaceutical Industries, Ltd. (patent infringement)
6/22: Boston Scientific Corporation and Boston Scientific Scimed, Inc. v. Johnson & Johnson, Inc. and Cordis Corporation (declaratory judgment for patent non-infringement)

Posted On: June 25, 2007

MDL Panel Transfers 15 Patent Cases to District of Delaware

The Judicial Panel on Multidistrict Litigation (MDL) has ordered fifteen related patent cases consolidated and transferred to the District of Delaware. Judge Gregory M. Sleet, who had presided over several of the pending cases, will now hear the consolidated action, which involves nine patents related to high-speed internet and "related" services. See Docket, 07-md-1848-GMS (filed June 21, 2007).

By ordering the transfer and consolidation, the MDL rejected the assertion that unique questions of fact predominate over any commonalities: "Transfer under [28 U.S.C] Section 1407 does not require a complete identity or even a majority of common factual or legal issues as a prerequisite to transfer." Indeed, the MDL expressly commented on the benefits of trying the cases in Delaware: "[W]e are assigning this litigation to a seasoned jurist in a readily accessible district with the capacity to handle this litigation."

Read the order here: In re Rembrandt Technologies LP Patent Litigation, No. 1848 (J.P.M.L. June 18, 2007) (Hodges, J.).

Posted On: June 18, 2007

When it comes to potential conflicts…Disclose! Disclose! Disclose!

Does an attorney have any duties to disclose or for that matter not take a case where they previously represented the parent corporation of an adverse party in prior unrelated litigation?

The District of Delaware recently had on opportunity to opine as to whether such conduct violates Rule 1.9 of the Model Rules of Professional Conduct. In Talecris Biotherapeutics, Inc. v. Baxter International, Inc., C.A. No. 05-349-GMS, Memorandum (D. Del. June 14, 2007), the plaintiff moved to disqualify defendant and counterclaim plaintiff's counsel. This particular attorney had previously represented a parent company of the counterclaim defendant in a previous action fourteen years ago that surrounded infringement claims of a non-asserted patent and product. Id. at 2. The patent that was litigated in the prior litigation, however, has been asserted as prior art rendering the plaintiff's patent invalid. The attorney was only a third-year associate at the time and was a member of a four person trial team. Id.

The Court found that the motion should be denied as the attorney's conduct did not violate Rule 1.9. Rule 1.9 prevents a lawyer from "taking a position adverse to a former client in the same or related matter unless the former client consents after consultation." Id. at 3. The Court considered three factors in determining whether the matters were "substantially related" and therefore the representation would be in violation of Rule 1.9: "(1) the nature and scope of the prior representation; (2) the nature and scope of the current representation; and, (3) during the prior representation, the possibility that the client disclosed confidences to his attorney which could be relevant to the current action and detrimental to the former client in the course of the current litigation." Id. at 4.

The particular attorney in this case, was only a third-year associate during the prior representation and only interacted with the former client during the early stages of discovery in litigation that occurred 15 years ago and lasted only 6 months. Id. at 5. The Court admitted, that the fact that the defendants are now asserting the patent that was at issue in the prior litigation as prior art to the patent at issue in the current litigation does raise some overlap. Id. However, it also noted that this patent appears to have been disclosed during the prosecution of the patent at issue and appears on the face of that patent. Therefore, the Court found it not reasonable to infer that the defendant's current reliance on this prior art patent was as a result of confidential information the attorney received during that prior litigation.

The motion was thus denied as the "substantive relationship between the two litigations is tenuous." Id. at 7.

In a footnote, the Court stated that "the prudent course of action would have been" for the attorney to have provided notice to her client of the potential conflict and request a waiver as soon as identifying them as a potentially adverse party. Id. at 7 n.3.

Therefore, when in doubt, disclose and get a waiver so as to protect yourself from being in violation of the Model Rules.

Posted On: June 18, 2007

New District of Delaware Filings

6/8: Callaway Golf Company v. Acushnet Company (patent infringement)
6/8: Ronald A. Katz Technology Licensing, L.P. v. Citizens Communications Co., et al. (patent infringement)
6/15: Febit Biotech GMBH v. Codon Devices, Inc. (patent infringement)

Posted On: June 15, 2007

Patent-Related Claims Must Proceed with Arbitration of Commercial Claim

Magistrate Judge Thynge issued an interesting decision last week that detailed the intersection of patent litigation and the arbitration of commercial disputes. Plaintiff Digene brought an infringement action against one defendant and later added inducement and tortious interference claims against another, Co-Defendant Beckman. The Court stayed the patent case and ordered "all" of Digene's claims against Beckman to arbitration. Following the arbitrator's favorable interpretation of a prior licensing agreement between the parties, Beckman sought to dismiss the inducement and interference claims on res judicata grounds.

The Court agreed that Digene had the opportunity to litigate its commercial and inducement claims before the arbitrator: "In light of Beckman's license under the [agreements], whether it induced infringement . . . by its relationship with Ventana was dependent upon the interpretation of the [agreements between the parties]. Further, because of Beckman's rights under the [agreements], whether it could tortiously interfere with Digene's potential business opportunities also hinged upon the same agreements . . . ."

As a result, Digene's attempts to continue the litigation following the arbitrator's decision could not proceed: "[Digene's claims] have already been evaluated twice by two different forums between the same parties and Digene, in essence, is asking for a third opportunity."

The Court's rationale highlights the importance of avoiding, when dealing with multiple claims of varying subject matter, the prospect of this type of arbitration estoppel.

Digene v. Ventana Medical Systems, C.A. No. 01-752-MPT (D. Del. June 12, 2007) (Thynge, M.J.).

Posted On: June 15, 2007

Delaware Court Finds No Retroactive Effect for KSR Decision

Most commentators agree that the Supreme Court's recent KSR decision effectively broadened the federal courts' inquiry in determining obviousness. But how will this new paradigm affect pending litigation? Chief Judge Sue L. Robinson answered that question in part in a succinct memorandum order on Thursday. At trial, defendants asserted an invalidity defense based on obviousness. The jury disagreed and returned a verdict of infringement. Defendants then moved for judgment as a matter of law, but failed to attack the jury's nonobviousness finding. Herein lies the rub.

When KSR issued several months later, defendants moved for reconsideration of the verdict in light of the Supreme Court's repudiation of the so-called "teaching, suggestion, or motivation" test. The Delaware court declined to reopen the issue, stating that the "question of obviousness in this case was not open for review by this court when KSR issued." Only if the obviousness issue were "still open on direct review" would the Court re-examine the jury's finding in light of the new precedent.

In other words, to preserve the ability to move to reconsider, a party must have put the contested issue before the court in the first place. Relying on the jury's adverse finding alone is insufficient to trigger the retroactive application of new precedent.

Praxair v. ATMI, C.A. No. 03-1158-SLR (D. Del. June 14, 2007) (Robinson, C.J.)

Posted On: June 14, 2007

Chief Judge Robinson Renders Two Patents Unenforceable Based On Inequitable Conduct

Praxair, Inc. v. ATMI, Inc., C.A. No. 03-1158-SLR (D. Del. June 13, 2007).

In December 2005, a jury returned a verdict in favor of Praxair, finding two of its patents valid and infringed. A bench trial regarding inequitable conduct followed the jury trial. This opinion addresses the inequitable conduct issue.

Praxair asserted three references that were not disclosed to the PTO. The Court found only two of those references were sufficiently material to merit further consideration. Of these two remaining references, only one reference was found to have been intentionally withheld from the examiners of the two patents at issue. Interestingly, the court relied on the high materiality of the omitted reference and the "absence of any explanation for the nondisclosure" to infer an intent to deceive. Op. at 12. The Court found significant the facts that 1) Praxair was using the technology in the omitted reference in its own products for several years before filing the patent applications, and 2) one of the inventors built devices that utilized the technology in the omitted reference. Op. at 12, fn 9.

Moral of the story: If you are a patent prosecutor, this is the type of decision that might make you lose sleep. You ask the inventors to turn over any potentially relevant prior art, but do your words go in one ear and out the other? Maybe the take away is for patent attorneys to put their requests to inventors in writing (if you don't already) – just in case.

Posted On: June 8, 2007

New District of Delaware Filings

6/5: BigBand Networks, Inc. v. Imagine Communications, Inc. (patent infringement)
6/7: Pfizer, Inc., Pfizer Ireland Pharmaceuticals, Warner-Lambert Co., Warner-Lambert Company, LLC, Warner-Lambert Export Ltd. v. Teva Pharmaceuticals USA, Inc. (patent infringement)
6/7: Ronald A. Katz Technology Licensing, L.P. v. Comcast Corporation (patent infringement)

Posted On: June 4, 2007

New District of Delaware Filings

Solvay Chemicals, Inc. v. OCI Chemical Corporation (patent infringement)
Boston Scientific Corporation and Boston Scientific, Scimed, Inc. v. Johnson & Johnson, Inc. and Cordis Corporation (declaratory judgment of patent non-infringement)