Posted On: June 26, 2008

Guest post - Magistrate Judge Stark Speaks to Delaware State Bar Association Intellectual Property Section

Our fellow associate, Sara Beth Reyburn attended the Delaware Bar Association Intellectual Property Section's annual meeting last night and has written the following guest post for the Delaware IP Law Blog:

The Honorable Leonard P. Stark shared some "General Thoughts from the Bench" at last night’s Delaware State Bar Association Intellectual Property Section’s annual meeting. Judge Stark shared tips on the practices and procedures he has developed since being appointed to fill the District of Delaware’s newly created second Magistrate position last August.

Judge Stark also cited statistics that show why he is honored to be a part of the district’s "tremendously experienced court". For example, according to Judge Stark’s research, the three District Judges and two Magistrate Judges have served on the federal bench for a collective 69 years and have written close to 3,000 opinions since 2001. The three District Judges have an average caseload of 500 cases each (approximately 90 pending patent cases each). From 1995 to 2007, the time from filing the complaint to trial has generally been less than 23 months. In 2007, 17 (nearly 20%) of the 94 patent cases tried nationwide were in the District of Delaware.

Judge Stark said he has received generous mentoring from his colleague Magistrate Judge Mary Pat Thynge, who is highly respected for her mediation skills. Judge Stark’s research indicated that Judge Thynge has mediated more than 1,150 cases, with an 80% settlement-success rate (including 187 of 272 patent cases). Judge Stark said he has been involved in 33 mediations and estimates his settlement-success rate at around 60%.

Author: Sara Beth Reyburn (sreyburn@ycst.com)

Sara Beth is an associate in Young Conaway's intellectual property, corporate, and litigation and trial practice sections andhas worked on cases involving a variety of intellectual property, corporate, and commercial issues, including patent litigation, trademark and tradename matters, and internet domain name disputes under the ICANN Uniform Domain Name Dispute Resolution Policy. Sara Beth originally joined the firm in 2001 and, after pursuing a writing career for a brief period, returned to the firm in 2006. Sara Beth has assisted on pro bono cases for the Federal Civil Panel of the United States District Court for the District of Delaware. She also volunteers with her hometown's local historical commission.

Posted On: June 24, 2008

Gregory M. Sleet: Bifurcation and Litigation Inefficiencies

As patent litigation grows more complex, splitting jury trials into separate liability and damages phases has become increasingly commonplace. As grounds for bifurcating proceedings, courts often cite the need to avoid jury confusion and the interests of promoting judicial economy. But, as a recent decision by Chief Judge Gregory M. Sleet demonstrates, the bifurcation inquiry remains a fact-specific exercise, and is far from automatic.

On the topic of judicial economy, the Court noted that the damages phase of trial would consume “perhaps one day of a ten-day trial.” Balanced against the “time and judicial resources required to hold two separate trials,” the Court held that carving out the short damages presentation would lead to “duplicative” proceedings.

The Court also rejected the jury confusion point: “Through reasoned and considered presentation, the attorneys for each side may clarify and compartmentalize issues for the jury.” Indeed, the Court implied that parties’ should give juries more credit: “[T]his court regularly tries complex cases before juries and has found juries well able to keep separate issues separate, particularly with the aid of considered and cogent presentations by counsel.”

The message to litigators? Bifurcation is not always warranted. And, more importantly, keep it short and sweet.

Deutscher Tennis Bund v. ATP Tour Inc., C.A. No. 07-178-GMS (D. Del. June 23, 2008) (Sleet, C.J.).

Posted On: June 19, 2008

Delaware or Texas? The First-Filed Rule Sends Case to the Lone Star State

CIF Licensing brought a lawsuit for patent infringement in the Eastern District of Texas against various defendants. One defendant, Remy International, moved to dismiss for lack of personal jurisdiction arguing that it was only a corporate "shell" and that its subsidiaries were the proper defendants. Subsequently, the Remy subsidiaries filed a declaratory judgment action in this District. Following that complaint, CIF amended its original complaint in Texas to join the proper subsidiary defendants and the Texas court stayed the action pending resolution of the "first-filed" issue by the District of Delaware. Remy Inc. v. CIF Licensing, LLC, C.A. No. 06-785-GMS/MPT, Memo. Order, at 2 (D. Del. June 9, 2008). Of note is the fact that the Delaware action had named potential suppliers and indemnitors as third-party defendants or defendants (who were not named in the Texas action).

Magistrate Thynge found that the relation back doctrine allowed CIF to properly add the subsidiary defendants to its Texas complaint and the Texas case was in fact, the first-filed. The court was not persuaded to depart from the first-filed rule simply because the indemnity claims were only found in the Delaware lawsuit, particularly where in a district such as this, great weight is given to plaintiff's choice of forum. Id. at 8-9.

For a copy of the opinion, see here.

Posted On: June 11, 2008

New District of Delaware Intellectual Property Case Filings

5/30: Dish Network Corp., Echostar DBS Corp., Echostar Technologies, LLC, Echosphere, LLC, Dish Network, LLC v. TiVo Inc. (declaratory judgment of patent non-infringement)
6/2: Cephalon, Inc. and CIMA Labs, Inc. v. Watson Pharmaceuticals, Inc., Watson Laboratories, Inc. (patent infringement)
6/4: W. Neudorff GmbH KG v. Falcon Lab LLC (declaratory judgment of patent non-infringement and invalidity)
6/4: LG Electronics USA Inc., LG Electronics Inc., LG Electronics Monterrey Mexico S.A., DE, CV v. Whirlpool Corp., Whirlpool Patents Co., Whirlpool Manufacturing Corp., Maytag Corp. (patent infringement)
6/4: Motivation Innovations, LLC v. DSW, Inc., Value City Department Stores, LLC, Bed, Bath & Beyond, Inc. and Hallmark Cards, Inc. (patent infringement)
6/5: Eli Lilly and Co., The Trustees of Princeton University v. Teva Parenteral Medicines, Inc. (patent infringement)
6/5: Forest Laboratories, Inc., Forest Laboratories Holdings, Ltd., MerzPharma GmbH & Co., KGaA and Merz Pharmaceuticals GmbH v. Apotex Inc. and Apotex Corp. (patent infringement)
6/6: Lannett Co., Inc. v. KV Pharmaceuticals, Drugtech Corp., Ther-RX Corp. (declaratory judgment for patent invalidity, non-infringement, unenforceability and unfair competition)

Posted On: June 4, 2008

Gregory M. Sleet: Jury Must Decide Composition of Design Around

As the pace of invention (and litigation) has increased over the past several decades, so has the pressure for companies to design around their competitors’ patents. The freedom to develop non-infringing alternatives to protected products fosters both competition and innovation, two crucial aspects of the modern patent system. But what happens when two companies settle an infringement suit, only to have the alleged infringer immediately come to market with a different product utilizing the same technology?

According to District of Delaware Chief Judge Gregory M. Sleet, it is for the jury to decide whether the design around breached the parties’ settlement agreement. In the underlying litigation, defendant agreed to forego selling the disputed voltage regulator or “any other” products incorporating plaintiff’s circuitry. After defendant began marketing its design around, plaintiff brought an action seeking to enforce the settlement agreement.

On summary judgment, the Court declined the invitation to draw the boundaries of the design around, noting that competing expert opinions precluded an early disposition:

Although a close question, the court’s conclusion is supported by the parties’ experts’ opinions, which – not surprisingly – are diametrically opposed. . . . Thus, there appears to be a classic battle of the experts on the issue of whether the [design around] contains the ZX circuitry . . . . (slip op. at 11)

This factual issue, in turn, prevented the Court from determining whether plaintiff could enforce the settlement agreement against the disputed product. Practitioners take note: As a first litigation step, the jury must decide the composition of the design around.

Linear Tech. Corp. v. Monolithic Power Sys. Inc., C.A. No. 06-476-GMS (D. Del. May 23, 2008) (Sleet, C.J.).