Posted On: December 27, 2007

Delaware District Judge Dismisses "Hunting License" Infringement Suit

The distinction between an assignee and licensee is crucial to determining whether a party has standing to sue for infringement. Whether through ownership or assignment, those parties that hold all substantial rights to a patent - and those who hold all exclusionary rights but not all substantial rights - generally enjoy the ability to enforce the patent. A "bare" licensee, on the other hand, possesses no right of enforcement. But what happens when a patentee conveys, as part of a non-exclusive license, the exclusive right to sue a particular entity, but otherwise retains title to the patent? Who is the proper party: the non-exclusive licensee that holds the right to sue, or the patentee that has contracted away the ability to bring suit? According to district judge Joseph J. Farnan, neither has standing to sue.

In the underlying litigation, the Court addressed the question whether the rights conveyed "elevated [the transferee's] status from that of a bare licensee to the second category of plaintiffs, those who hold exclusionary rights and interests created by the patent statutes, but not all substantial rights to the patent such that a law suit may be maintained with the presence of the patent owner." Because the license limited the transferee's right to sue - it could only pursue a single entity, the defendant - and imposed other restrictions, the patentee failed to "provide [the transferee] with a sufficient cloak to cover its status as a bare, nonexclusive licensee."

Having struck down this "hunting license," the Court then held that the patentee itself failed to establish standing to bring suit by contracting away the right to sue: "That [the licensee] lacks standing to take advantage of that right does not mean that [the patentee] regains it." In other words, the parties' chosen "contractual division" of the patent rights defeated their standing, leaving no party available to enforce the patent.

Fairchild Semiconductor Corp. v. Power Integrations Inc., C.A. No. 07-187-JJF (D. Del. Dec. 20, 2007) (Farnan, J.).

Posted On: December 27, 2007

Long Scheduled Trial Date Precludes Delay in Expert Discovery

In a recent opinion, Delaware district judge Joseph J. Farnan Jr. reaffirmed the necessity of confirming expert witnesses' availability for pretrial discovery and trial. In the underlying litigation, defendant sought to delay expert reports and depositions on the basis of unavailability. Under normal circumstances, the Court might be inclined to work around outside schedules. But here, only thirty days before a "long scheduled" and firm trial date, defendant argued for delay in producing expert reports and taking expert depositions. Given the timing of defendant's request, the Court refused to accede:

"[T]he Court finds that the assertion that any expert witness is 'unavailable' to the parties in the thirty day period prior to a long scheduled trial is untenable and an issue for the witness's proponent, not the pre-trial schedule."

Nice Systems Inc. v. Witness Systems Inc., C.A. No. 06-311-JJF (D. Del. Dec. 14, 2007) (Farnan, J.) (order attached to claim construction opinion).

Posted On: December 21, 2007

Judge Robinson Sanctions Violation of Model Rule 4.2

Microsoft Corp. v. Alcatel Bus. Sys., C.A. No. 07-090 (D. Del. Dec. 18, 2007).

This case dealt with a violation of Model Rule of Professional Conduct 4.2 by two attorneys from a prominent national firm. The attorneys purchased, on the open market, an Alcatel Communications System that contained certain features at issue in the patent litigation. The system was installed at the attorneys' Washington D.C. offices, and one of the technicians working on the installation identified himself as an employee of Alcatel-Lucent, one of the originally-named defendants in the case. The employee helped install the system, trained the attorneys on how to use the system, and engaged in ongoing conversations with the attorneys about the administration, use, and configuration of the system. The Court noted that the employee was one of only a limited number of engineers at Alcatel with the experience and training to install the system.

Posted On: December 21, 2007

D. Del. Deposition Practice: Let the Witness Answer

It is well established in the District of Delaware that instructing a deponent to withhold a response is rarely permitted. Absent a genuine possibility that privileged information will be disclosed, our district judges are uniform in their disapproval of this deposition tactic. A recent decision by district judge Joseph J. Farnan, Jr., lends further support to this local practice:

"After reading the November 30th deposition transcript and viewing the [deposition] videotape, the Court finds that Defendant's counsel obstructed the questioning of [the witness] by the improper assertion of work product privilege and interposing numerous obections unsupported by the rules of evidence. The Court need not list the errors of Defendant's counsel to demonstrate the conduct of counsel, because the inappropriateness of the objections is plain from a reading of the deposition transcript."

As a sanction, the Court ordered a second deposition to be held at a time and location of plaintiff's choosing, with costs and fees for both depositions paid by defendant.

Promos Technologies Inc. v. Freescale Semiconductor Inc., C.A. No. 06-788-JJF (D. Del. Dec. 20, 2007) (Farnan, J.).

Posted On: December 20, 2007

"Extended Release Formulation" and other terms defined in ANDA case

Recently, in the Wyeth v. Impax Laboratories, Inc. case, Judge Farnan construed three separate claim terms: (1) "extended release formulation"; (2) "diminished incidences of nausea and emesis"; and (3) "a method for eliminating the troughs and peaks of drug concentration in a patient's blood plasma." C.A. No. 06-222-JJF, Memo. Op. (D. Del. Dec. 13, 2007). The opinion itself was a straightforward application of the Phillips v. AWH Corp. case whereby the Court looked to the claims, the specification and the prosecution history and did not turn to any extrinsic evidence to aid in its construction. Id. at 3-4.

One interesting section of the opinion was in the construction of the terms "extended release formulation." The plaintiff, Wyeth, was seeking to apply a general definition using the words' ordinary meaning. The defendant, Impax, wanted to import specific ingredients that were listed in the specification as a requirement for it to be an "extended release formulation." Id. at 5-6. The Court found that in light of the patent and the specification the list of ingredients should not be included in the definition of the terms, particularly where in certain dependent claims that were not at issue, the language of the claims did in fact include a list of specific inactive ingredients. Where there was a particular limitation in a dependent claim there arises a presumption that the limitation should not be present in the independent claim. Id. at 6 (citing Phillips v. AWH Corp.).

As a side note - these parties had previously been involved in litigation in another district over the same patents. During that litigation a Markman ruling was issued on two of the same terms that were currently at issue in the new litigation. The earlier Markman ruling had been vacated by the judge in that case when the case settled before trial, however, the defendant directed the District of Delaware court to the approach taken by the earlier court in construing the terms. There is no mention in the opinion of how much weight, if any, this Court gave to the prior Markman ruling since it only needed to rely on the intrinsic record to decide the construction.

Posted On: December 19, 2007

District of Delaware New Case Filings

11/29: Senju Pharmaceutical Co., Ltd., Kyorin Pharmaceutical Co., Ltd. and Allergan, Inc. v.
Apotex, Inc., Apotex Corp. and Apotex Pharmachem India, PVT, Ltd. (patent
11/30: Sun Microsystems, Inc. v. Versata Enterprises, Inc. (patent infringement)
11/30: Human Genome Sciences v. Amgen and Immunex (patent infringement)
12/4:, Inc. v. Amazon Web Services LLC, et al. (patent infringement)
12/6: Sanofi-Aventis and Sanofi-Aventis US LLC v. Apotex Inc and Apotex Corp. (patent
12/6: Pfizer Inc. et al. v. Cobalt Pharmaceuticals Inc. (patent infringement)
12/13: AstraZeneca Pharmaceuticals LP, and AstraZeneca UK Limited, and IPR Pharmaceuticals,
Inc. and Shionogi Seiyaku Kabushiki Kaisha v. Mylan Pharmaceuticals Inc. (patent
12/13: AstraZeneca Pharmaceuticals LP, and AstraZeneca UK Limited, and IPR Pharmaceuticals,
Inc. and Shionogi Seiyaku Kabushiki Kaisha v. Sun Pharmaceutical Industries Ltd., and
Sun Pharmaceutical Industries Inc. and Caraco Pharmaceutical Laboratories Ltd. (patent
12/13: AstraZeneca Pharmaceuticals LP, and AstraZeneca UK Limited, and IPR Pharmaceuticals,
Inc. and Shionogi Seiyaku Kabushiki Kaisha v. Sandoz Inc. (patent infringement)
12/13: AstraZeneca Pharmaceuticals LP, and AstraZeneca UK Limited, and IPR Pharmaceuticals,
Inc. and Shionogi Seiyaku Kabushiki Kaisha v. Par Pharmaceutical, Inc. (patent
12/13: AstraZeneca Pharmaceuticals LP, and AstraZeneca UK Limited, and IPR Pharmaceuticals,
Inc. and Shionogi Seiyaku Kabushiki Kaisha v. Apotex Inc. and Apotex Corp. (patent
12/13: AstraZeneca Pharmaceuticals LP, and AstraZeneca UK Limited, and IPR Pharmaceuticals,
Inc. and Shionogi Seiyaku Kabushiki Kaisha v. Aurobindo Pharma Ltd. and Aurobindo
Pharma USA Inc. (patent infringement)
12/13: AstraZeneca Pharmaceuticals LP, and AstraZeneca UK Limited, and IPR Pharmaceuticals,
Inc. and Shionogi Seiyaku Kabushiki Kaisha v. Cobalt Pharmaceuticals Inc. and Cobalt
Laboratories Inc. (patent infringement)
12/14: Sciele Pharma, Inc. and Sciele Pharma Cayman Ltd.v. Mylan Pharmaceuticals Inc. and
Mylan Laboratories, Inc. (patent infringement)
12/17: Spear Pharmaceuticals, Inc. and Spear Dermatology Products, Inc. v. William Blair &
Company, L.L.C. and Valeant Pharmaceuticals International (trade secret
misappropriation and breach of contract)
12/17: Medtronic, Inc. v. Boston Scientific Corporation, Guidant Corporation and Mirowski
Family Ventures, L.L.C. (patent non-infringement - declaratory judgment)
12/18: Janssen, L.P., Janssen Pharmaceutica N.V., and Ortho-Mcneil Neurologies, Inc. v. KV
Pharmaceutical Company (patent infringement)
12/18: Accenture Global Services GmbH, and Accenture LLP v. Guidewire Software, Inc. (unfair
competition and supplemental state law claims)

Posted On: December 14, 2007

Does MedImmune "Abrogate" Federal Circuit Cases Regarding Covenant not to Sue?

As everyone is aware, the Supreme Court in MedImmune Inc. v. Genentech, Inc. announced a new standard for determining whether a case or controversy exists thereby replacing the former "reasonable apprehension of imminent suit test." But how does this new standard effect a situation where there is a covenant not to sue on an original patent where a reissue application is pending? This is one of the questions the Delaware District Court was faced with in Pfizer Inc. v. Ranbaxy Laboratories Ltd., et al., C.A. No. 07-138 (D. Del. Nov. 29, 2007) (Farnan, J.). The Court found that in light of the MedImmune standard there cannot be a "current and concrete" case or controversy between the parties unless a valid and enforceable patent exists. Id. at 8. In this case, one claim of the patent-at-issue had been declared invalid during a prior lawsuit and the covenant not to sue between the parties contained an agreement not to sue on any other claims in the patent. Id. at 8-9. There was no specific language in the covenant not to sue referencing reissue applications, but the Court said the "question of whether a new patent will ever be reissued is speculative, purely hypothetical and unripe for judicial determination" therefore, there can be no subject matter jurisdiction over the claims. Id. at 9.

Pfizer further moved to dismiss certain of Ranbaxy's counterclaims on the basis of res judicata. These same parties had been involved in prior litigation over the same patent where the defendant, Ranbaxy, challenged the validity of the patent-in-suit. The defendant conceded that it was aware the prior art it now wants to assert against Pfizer but argued that it did not have all the facts related to the data. The Court held that Ranbaxy was required to raise all invalidity defenses during the earlier litigation and because they were informed about the data during that litigation they could not raise it now. If they felt that there was not enough time to analyze the data they should have sought an extension of trial in that Court, but will not be able to raise the invalidity claim now. Id. at 13-14. Furthermore, the Court stated that a change in the law does not alter the res judicata effect of a judgment and therefore refused to recognize an exception to the rule based on KSR/Teleflex. Id. at 15

Posted On: December 6, 2007

Admitting Evidence of Commercial Success After KSR

As part of the "broad inquiry" into obviousness mandated by the Supreme Court in KSR v. Teleflex, commentators have speculated over the continuing viability of so-called "secondary considerations." Some commentators predict that such considerations are now "elevated in importance." Others question the rubric's continuing relevance, specifically pointing to the Federal Circuit's treatment of a case out of this district.

Given these doctrinal fluctuations, discerning the best proofs for an invalidity case may now be more difficult. One recent decision by Delaware district judge Sue L. Robinson, however, sheds light on one route to proving the secondary consideration of commercial success: news articles.

In its December 4th order, the Court held that a defendant's praise for the accused products, embodied in news articles, can be admitted as admissions of a party so long as the statements "relat[e] to the commercial success of the accused products." Other articles that simply mention the accused product, on the other hand, are inadmissible: it is the party's own statement of praise, not the existence of public information about the products, that controls the evidentiary inquiry.

Callaway Golf Co. v. Acushnet Co., C.A. No. 06-091-SLR (D. Del. Dec. 4, 2007) (Robinson, J.).

Posted On: December 6, 2007

Magistrate Judge Thynge Rules on Summary Judgment Motions in Dispute Over Liquid Crystal Display Technology

Commissariat a l'Energie Atomique v. Samsung Electronics Co., et al., C.A. No. 03-484-MPT (D. Del. Oct. 31 and Nov. 2, 2007).

On October 31st and November 2nd, Magistrate Judge Thynge issued a series of four opinions in the above case. This case is a patent dispute involving the design and manufacture of liquid crystal displays. In particular, the claims relate to increasing the viewing angle of LCD display panels (like the one on your holiday shopping list). I will address each opinion in turn.

The first opinion denied in part and granted in part Samsung's motion for summary judgment that claims of the '412 patent at issue are anticipated by a European patent publication. Before comparing the claims at issue and the disclosure of the European reference, the Court noted that 'the fact that the examiner may have considered EP '775 [the European publication] during prosecution is not dispositive of Samsung's motion.' Op. at 7. The Court then noted that 'whether a reference 'teaches away' from the invention is inapplicable to an anticipation analysis.' Op. at 9 (citing 150 F.3d 1354, 1361). Thus, the fact that the European reference disparages the invention after disclosing it is not dispositive. Finally, the Court compares the claims at issue to the European reference and concludes that two of the three claims are anticipated.

The second opinion dealt with Samsung's motion for summary judgment that the '028 patent failed to disclose the best mode of performing the invention. Samsung argued that a particular polarizer, a model by Sanritz, was known by the inventors to be the best polarizer to carry out their invention, and the inventors concealed this polarizer by not disclosing it in the patent application such that a person of ordinary skill in the art would not be enabled to practice the invention. After determining that the relevant date of inquiry concerning the inventor's subjective belief as to the best mode of carrying out the invention is the earliest priority date claimed in the patent, the Court found Samsung had presented clear and convincing evidence that the Sanritz polarizer was the best mode of carrying out part of the claimed means and that the inventors had indeed concealed the best mode by not disclosing it in the application. Interestingly, the Court held that the trade name of the polarizer, Sanritz, 'was necessary for a skilled artisan to practice the best mode of the claimed invention' and, therefore, the trade name should have been disclosed. Op. at 8. Thus, the Court invalidated the '028 patent.

The third opinion dealt with the parties' cross motions for summary judgment of infringement and noninfringement of the claims remaining at issue after the decisions discussed above, claims 3-5 and 12. As to claims 3-5 of the '412 patent, both parties lost their summary judgment motions on literal infringement. As to infringement under the doctrine of equivalents, however, the Court found that CEA's conclusory statements were insufficient as a matter of law. Thus, the Court granted Samsung's motion for summary judgment of noninfringement as to infringement under the DOE. The Court further bolstered this decision in the alternative by holding that applying the DOE to the 'uniaxial medium' claim term as requested by CEA would vitiate the term under the all elements rule. Both parties lost their summary judgment motions as to claim 12 of the '412 patent. Finally, the Court addressed CEA's motion for summary judgment of inducement of infringement. As to this motion, the Court held that '[a]lthough intent may be proven by circumstantial evidence, when a plaintiff introduces circumstantial evidence that allows for inferences to be drawn, it is 'up to the jury to decide whether or not to draw any inference and to consider the weight of any such evidence.' 'Op. at 18 (citing 471 F.3d 1293, 1306). Since circumstantial evidence was presented as to intent, the Court denied the summary judgment motion, allowing the issue to proceed to the jury.

The fourth and final opinion dealt with Samsung's summary judgment motion that claims 3-5 of the '412 patent were anticipated under 102(b) by a single prior art reference. The Court denied the motion because there were multiple questions of fact as to whether certain claim elements were disclosed in the reference. One practical point was noted by the Court on page 7 of the opinion: make sure to explain how the language you quote in a reference discloses the corresponding claim element in your claim chart. In this case, the Court was unwilling to guess as to how/whether the quoted language disclosed the claim element. Completing the thought for the reader is almost always preferable to leaving the reader to complete the thought for themselves.

Posted On: December 4, 2007

Another "Case or Controversy" Decision Post- "MedImmune"

The District Court recently held that evidence of "marketing products or services and entering into licensing agreements" is enough to support declaratory judgment jurisdiction. Cordance Corp. v., Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. Nov. 20, 2007). This is true even where there is no allegedly infringing product or service currently on the market and where there was no threatened litigation or request to cease and desist. Following the Supreme Court's holding in MedImmune which rejected the requirement of "reasonable apprehension", the Court found that the counterclaim defendant's advertising and promoting of a service that was expected to be introduced, development of the architecture used by other companies to allegedly infringe the patent and receiving licensing fees related to the allegedly infringing service was enough to create a "case or controversy" sufficient for the Court to have jurisdiction. Id. at 7.

In a separate argument, the counterclaim defendant asserted that Amazon's counterclaim was vague and failed to state a claim because it did not "sufficiently identify which products allegedly infringe." Id. at 5. The Court found that Amazon did not need to identify specific products by name, "so long as they are sufficiently described in some way." Id. at 8.