Posted On: October 30, 2008

Peter Zura of 271 Patent Blog

Just a short note that our thoughts and prayers are with our fellow blogger at the 271 Patent Blog, Peter Zura, and his family during this time of recovery.

Posted On: October 30, 2008

Chief Judge Gregory M. Sleet: Permanent Injunction Granted, Damages Stipulation Upheld

Following the Court’s recent denial of Tyco Healthcare Group’s motion for judgment as a matter of law, Judge Sleet provides another blow to the defendant by granting plaintiff Becton Dickinson and Company’s motion for award of damages, prejudgment interest and a permanent injunction and denying the plaintiff’s motion to stay the injunction pending any appeal. Becton Dickinson and Company v. Tyco Healthcare Group LP, C.A. No. 02-1694-GMS, Memo. Order (D. Del. Oct. 29, 2008).

Becton Dickinson obtained an infringement verdict against the defendant in October 2004 along with an award of damages for a reasonable royalty and lost profits. The Court granted defendant’s motion for a new trial on infringement issues but denied their motions with respect to damages. The infringement case was re-tried in November 2007 and the parties entered a stipulation setting forth the manner in which damages should be calculated from January 2004 through the completion of the litigation. Id. at 1, 3. Tyco was again found to infringe plaintiff’s patent and plaintiff moved for an award of damages. In its opposition to plaintiff’s motion, Tyco contended that the lost profit numbers were not accurate based on the failure of plaintiff’s to have the capacity to manufacture the additional sales that were made during the relevant time period. The stipulation did not provide for damages to be effected because of lack of capacity. Judge Sleet refused to set aside the parties’ stipulation and adjust the damages where Tyco could have insisted that a provision be in the stipulation to cover such a situation, and awarded the plaintiff’s request for the reasonable royalty and lost profits damages. Id. at 4.

In agreement with Judge Robinson’s recent order in Cordis Corp. v. Medtronic Vascular Inc., C.A. No. 97-550-SLR, Order (D. Del. Sept. 15, 2008) (see post here), Judge Sleet found the applicable rate to be the prime rate, compounded quarterly as that rate “best represents the cost of borrowing money.” Id. at 5 (internal citations omitted).

Finally, in what has become a rare occurrence since the Federal Circuit’s decision in eBay, Inc. v. MercExchange, L.L.C., the Court granted plaintiff’s request for a permanent injunction. The parties in this case, are direct competitors, plaintiff established it lost 40% market share during the period of infringement, and although defendant’s business relationships may be harmed by the injunction “that is the risk Tyco took when it placed a potentially infringing product on the market and continued to make sales of that product.” Id. at 8.

And now a public service announcement…The Court in this matter denied the defendant’s request for a stay of the injunction pending their appeal where the request was only mentioned “in passing” and they failed to address all of the factors relevant to the analysis in its brief. Id. at 9-10. So make sure if you are going to move for some form of relief that you address all of the relevant factors required for the court to analyze your request.

Becton Dickinson and Company v. Tyco Healthcare Group LP, C.A. No. 02-1694-GMS, Memo. Order (D. Del. Oct. 29, 2008).

Posted On: October 30, 2008

Chief Judge Gregory M. Sleet: JMOL Denied - Circumstantial Evidence of Infringement Sufficient to Support Verdict

Becton Dickinson and Company won a jury verdict back in 2004 against Tyco Healthcare Group, but the Court granted defendant's post-trial motion and allowed the infringement case to be re-tried. Following the retrial in November 2007, Tyco Healthcare Group LP was again found liable and subsequently moved for judgment as a matter of law pursuant to Fed. R. Civ. P. 50(b) arguing that the jury’s finding was not supported by the evidence. Becton Dickinson and Company v. Tyco Healthcare Group LP, C.A. No. 02-1694-GMS, Memo. (D. Del. Oct. 17, 2008). The Court denied defendant’s motion. Id. Of note, the Court agreed that the direct evidence of infringement proffered by the plaintiff was not sufficient to support an infringement verdict. Id. at 6-7 n.2. That being said, however, the Court in denying the motion, relied on Federal Circuit precedent which holds “[T]here is no requirement that direct evidence be introduced,” and the circumstantial evidence presented by plaintiff’s fact and expert witnesses was sufficient to support the verdict. Id. at 6.

Becton Dickinson and Company v. Tyco Healthcare Group LP, C.A. No. 02-1694-GMS, Memo. (D. Del. Oct. 17, 2008).

Posted On: October 30, 2008

New District of Delaware Intellectual Property Case Filings

10/8: Autocell Laboratories, Inc. v. Cisco Systems, Inc. (patent infringement)
10/10: Redbox Automated Retail LLC v. Universal Studios Home Entertainment LLC, Universal City Studios LLLP, Universal City Studios Production LLLP and Focus Features LLC (copyright misuse and antitrust)
10/14: Fairchild Semiconductor Corp. and System General Corp. v. Power Integrations Inc. (patent infringement)
10/14: Dyson Inc. v. Bissell Homecare Inc. (declaratory judgment action for non-infringement)
10/17: Cordis Corp. v. Boston Scientific Corporation and Boston Scientific Scimed, Inc. (patent infringement)
10/20: Endo Pharmaceuticals Inc. and Penwest Pharmaceuticals Co. v. Barr Laboratories Inc. (patent infringement)
10/21: Aerocrine AB and Aerocrine Inc. v. Apieron Inc. (patent infringement)
10/23: Watson Laboratories Inc. v. Barr Laboratories Inc. and Barr Pharmaceuticals Inc. (patent infringement)
10/23: NMT Medical Inc. and Lloyd A. Marks v. W.L. Gore & Associates Inc. (patent infringement)
10/24: Courtsey Products LLC v. Royal Cup Inc. (patent infringement)
10/27: Emi April Music Inc., Monica's Reluctance to LOB, Hunglikeyora Musica, WB Music Corp. and Naughty Music v. Lobby House Inc. and Kenneth Caudill (copyright infringement)
10/28: DVDPlay Inc. v. Coinstar E-Payment Services Inc. and Video Vending New York Inc. (patent infringement)
10/29: Cephalon Inc. and CIMA Labs, Inc. v. Barr Pharmaceuticals, Inc. and Barr Laboratories Inc. (patent infringement)

Posted On: October 13, 2008

Magistrate Judge Mary Pat Thynge: Motion to Amend in Companion Case

A plaintiff chooses to file three separate actions in the same district against three separate alleged infringers. The plaintiff asserts the same patents in all three actions. A defendant in one of the matters adds an inequitable conduct defense against the plaintiff. After the cut-off date for amendments to the pleadings, the defendant in another matter moves to amend its answer to add the same claims of inequitable conduct that were pled by the other defendant in the separate pending matter. What is the result? Should the defendant be able to add the same defense asserted by another defendant in a different action but against the same plaintiff? Magistrate Judge Thynge recently answered that question, yes. Parker-Hannifin Corporation v. Zippertubing (Japan), Ltd., C.A. No. 06-751-MPT, Memo. Order (D. Del. Sept. 24, 2008). Under Rule 15(a), the plaintiff could not argue prejudice since they had notice of the allegations from the companion case and the case was early in the discovery process. Id. at 5 n.8.

The plaintiff, in arguing against allowing the amendment, did not in fact argue prejudice, but instead argued that defendant’s one theory of inequitable conduct “is not necessary to practice the patents-in-suit or for the best mode” and that the other theory rests on a patent that is not prior art or material to other patentability requirements. Id. at 3. The Court will not weigh evidence when deciding a motion to amend and therefore the plaintiff’s reliance on factual contentions in opposing the amendment were unsuccessful. Id. at 7. Furthermore, in order to satisfy Federal Rule of Civil Procedure 9(b), the defendant need only allege the relevant material information and the acts of alleged fraud to “permit responsive pleading” and defendant disclosed “at least that much in its twenty-eight paragraph amendment.” Id. at 7-8.

Parker-Hannifin Corporation v. Zippertubing (Japan), Ltd., C.A. No. 06-751-MPT, Memo. Order (D. Del. Sept. 24, 2008).

Posted On: October 10, 2008

Judge Sue L. Robinson: Pleading State-Law Business Torts in D. Del.

On Wednesday, District Judge Sue L. Robinson emphasized, as earlier D. Del. cases have, that inadequately pleaded state-law claims in patent cases will not be tolerated. In the underlying infringement litigation, plaintiff sought redress for trade-secret misappropriation and a variety of other state-law business torts. On a motion to dismiss, the Court explained that plaintiff's general allegations of theft and interference could not survive the Supreme Court's Twombly pleading standard.

On the trade secret count, the Court rejected as insufficient the assertion that defendant, after exposure to plaintiff's product via a customer, "seemed to develop the [new] product surprisingly quick[ly]." Similarly, the intentional interference count - and, by extension, the unfair competition claims - could not survive: "Accenture was not required to plead the precise nature of Guidewire's interference with its business opportunity, but it was required to allege some wrongful or improper conduct vis-a-vis . . . the only customer mentioned in Accenture's complaint."

The lesson? When considering whether to add state-law claims to an infringement complaint, make sure the details, independent of the infringement, are there.

Accenture Global Services GMBH v. Guidewire Software Inc., C.A. No. 07-826-SLR (D. Del. Oct. 8, 2008).

Posted On: October 9, 2008

New District of Delaware Intellectual Property Case Filings

9/11: Alma Lasers Ltd. and Alma Lasers, Inc. v. Palomar Medical Technologies, Inc. (patent infringement)
9/16: Promos Technologies, Inc. v. LSI Corporation and Agere Systems, Inc. (patent infringement)
9/18: Autodesk Canada Co. v. Assimilate, Inc. (copyright infringement)
9/19: Packers Plus Energy Services Inc. v. Halliburton Energy Services Inc. (patent infringement)
9/24: Le T. Le v. City of Wilmington, Joseph F. Capadanno, Jr. and James J. O'Donnell (copyright infringement)
9/24: JSA Technologies, Inc. v. Informed Decisions Corporation d/b/a CASHNet (patent infringement)
9/25: Moberg v. 33TLLC, Cedric Leygues, Erwan Leygues (copyright infringement)
9/26: Procter & Gamble Co. and Hoffman-La Roche Inc. v. Teva Pharmaceuticals USA, Inc. (patent infringement)
9/26: LifeLock Inc. v Custom Direct Inc. (trademark infringement and unfair competition)
9/29: Unilin Beheer BV, Flooring Industries Ltd. sarl; v. Tarkett Inc., Clarion Boards Inc., Clarion Laminates LLC and AT Clarion Group, LLC (patent infringement)
9/30: Wilco AG v. Packaging Technologies & Inspection LLC (patent infringement)
10/6: Target Corporation v. Woodside RU Holdings Inc., Woodside United Acquisition LLC, Rehrig International, Inc., Woodside Capital, LLC and United Steel & Wire Co. (patent infringement)

Posted On: October 9, 2008

Judge Sue L. Robinson: No Preliminary Injunction Despite Head to Head Competition

The U.S. Supreme Court's decision in eBay, Inc. v. MercExchange, LLC continues to make it difficult to obtain injunctive relief. Judge Robinson, in Wellman, Inc. v. Eastman Chemical Co. , found that even if plaintiff had demonstrated a likelihood of success on the merits (which they did not), the court would not find irreparable harm. C.A. No. 07-585-SLR, Memo. Order (D. Del. Oct. 3, 2008). Wellman and Eastman were direct head to head competitors and plaintiff argued that one of the factors that forced it to file for Chapter 11 bankruptcy protection was the defendant's infringement of their patent. The court agreed that that plaintiff was "suffering financially" and the parties were direct competitors but stated that plaintiff did not dispute that the patented product only accounted for a small percentage of their business and they did not demonstrate that the loss of business was directly related to sales of the patented technology. The Court denied the motion for preliminary injunction finding that money damages would be a sufficient remedy. Id. at 5-6. Wellman, Inc. v. Eastman Chemical Co. , C.A. No. 07-585-SLR, Memo. Order (D. Del. Oct. 3, 2008).
Posted On: October 7, 2008

Sue L. Robinson: License Exclusivity Not Solely Function of Parties' Intent

Earlier this year, we reported on a licensee-standing decision by Magistrate Judge Leonard P. Stark. In that decision, the Magistrate Judge recommended that a licensee operating under an agreement subject to "pre-existing nonexclusive licenses" could nonetheless pursue litigation as an exclusive licensee. In a recent order, District Judge Sue L. Robinson has, for the most part, adopted that report.

In recognizing the licensee's standing to sue, however, the Court made explicit its thoughts on determining exclusivity:

"Defendant argues that the intent of the parties is not dispositive. I agree. Intent is but one factor a court looks to in determining whether a license agreement confers to the licensee a legally protected interest in the patent. The license at issue is an expression of plaintiffs' intent to grant . . . an exclusive license . . . ; therefore it is a factor that weighs in favor of finding standing."

Accordingly, it is the "entire license agreement," not just the parties' characterizations, that controls the inquiry.

TV Guide On-Line Inc. v. Tribune Media Services Inc., C.A. No. 05-725-SLR/LPS (D. Del. Sept. 30, 2008).

Posted On: October 3, 2008

Judge Joseph J. Farnan: Motion for Attorneys' Fees DENIED

In a somewhat unusual procedural posture, Defendants moved the district court for attorneys' fees following a stipulated judgment of non-infringement after Judge Farnan issued his Markman Order construing the terms in favor of defendants. Prism Technologies LLC v. Verisign, Inc., C.A. No. 05-214-JJF, Memorandum Opinion (D. Del. Sept. 30, 2008). After the Federal Circuit affirmed Judge Farnan's Markman Order, defendants moved pursuant to 35 U.S.C. 285 to declare this matter an exceptional case and award defendants their attorneys' fees. Though admitting that the plaintiff could have done a "more thorough" pre-suit investigation, the Court found that the claim chart and analysis done by the plaintiff was "adequate to support its claims." Id. at 6. Judge Farnan also found that the plaintiffs' reasonableness in continuing to pursue the litigation was supported by its conduct, particularly its withdrawal of the infringement claims once it knew it could not support its claims under the Court's claim construction. Id. at 8. The Court therefore, found that defendants did not establish that this was an exceptional case.

Prism Technologies LLC v. Verisign, Inc., C.A. No. 05-214-JJF, Memorandum Opinion (D. Del. Sept. 30, 2008).

Posted On: October 3, 2008

UPDATE Judge Sue L. Robinson: Calculating Pre-Judgment Interest, and Other Damages-Related Inquiries

District Judge Sue L. Robinson has modified a recent damages order, reported by us last month, that accounted for the award's tax treatment:

"It is apparent from the papers submitted that the appropriate method of calculating prejudgment interest based on after-tax damages is fraught with opportunities for mischief. Indeed, each party has employed a different analysis in computing this aspect of the damages award. Under the circumstances, the court has determined that its attempt to adjust for taxes was ill conceived and, therefore, will adopt Cordis' computation of prejudgment interest, which (according to Medtronic) is consistent with a pre-tax assessment."

Cordis Corp. v. Medtronic Vascular Inc., C.A. No. 97-550-SLR (D. Del. Sept. 30, 2008).

Posted On: October 2, 2008

Joseph J. Farnan: Motion-to-Strike Victory for ANDA Filer

That willfulness is not properly a part of a Hatch-Waxman case is not a controversial proposition anymore. In a recent opinion, District Judge Joseph J. Farnan Jr. reaffirmed a long line of cases that jettisoned willful infringement allegations grounded solely on ANDA filings.

An interesting aspect of the decision, however, is its procedural posture: defendant chose to employ the the pre-answer motion to strike under FRCP 12(f). By granting this type of "disfavored" motion - especially when defendant had already filed its answer - the Court signaled that the willfulness argument, in a typical ANDA scenario, will no longer succeed in D. Del.

Sepracor Inc. v. Dey L.P., C.A. No. 06-113-JJF (D. Del. Sept. 26, 2008) (Farnan, J.).

Posted On: October 2, 2008

UPDATE Sue L. Robinson: Fees Motion Incorrect Vehicle for Analyzing Enforceability

Thanks to Bob Matthews at Latimer Mayberry in Virginia for sending us a recent case similar to Judge Robinson's fees decision, posted below. Just two days before the Delaware decision issued, the Northern District of Ohio reached the same conclusion: "A finding of inequitable conduct regarding the '346 patent, even if made during the fee hearing, would compel a finding that the patent is invalid, notwithstanding that this issue was previously eliminated from the case by Vector's dismissal."

The result? Just as in the Delaware case, a prevailing party could not raise enforceability via a fees motion.

Euclid Chem. Co. v. Vector Corrosion Techs., Inc., C.A. No. 01:05 cv 80 (N.D. Ohio Sept. 24, 2008).