Posted On: January 30, 2009

Joseph J. Farnan: Ordinary-Skill Evidence Assumes Importance in Means-Plus-Function Claim Construction

Last week, district judge Joseph J. Farnan Jr. issued a claim construction decision notable for its means-plus-function analysis. The patents-in-suit, which disclose methods for automating filing tax returns, offered a number of claim terms for construction. But, according to the Court, the specification failed to disclose any structure to support the means-plus-function limitations:

"[T]he specification offers no detail regarding the underlying algorithms used by TurboTax to perform the recited means-plus-function steps. In these circumstances, additional evidence is necessary to confirm that one of skill in the art would understand the references to TurboTax as disclosing particular algorithms, and, more importantly, what those algorithms are. But no such evidence has been provided."

Even if this evidence were presented, the Court continued, a corresponding structure is still absent:

"[T]hough the specification explains that certain steps can be implemented using progams 'similar' to TurboTax, the key reference in the specification to such software largely disparages it on the basis of requiring manual input. Where the patent's reference to prior art software is, at best, equivocal, the Court is unethusiastic about relying on it for corresponding structure."

Accordingly, to effectively combat a specification lacking detail on corresponding structure, practitioners should be prepared to offer ordinary-skill evidence during the Markman process.

Simplification LLC v. Block Financial Corp., C.A. No. 03-355-JJF (D. Del. Jan. 23, 2009) (Farnan, J.).

Posted On: January 28, 2009

Judge Sue L. Robinson: Post-Judgment Interest Applies to Prejudgment Interest Component of Judgment

Should a defendant have to pay interest on interest? Judge Robinson, in Trueposition Inc. v Andrew Corporation, answered yes. C.A. No. 05-747-SLR, Memo. Order (D. Del. Jan. 28, 2009). The Court ordered that under Third Circuit case law and 28 U.S.C. 1961, post-judgment interest should be calculated on the judgment plus prejudgment interest. Id. at 2. The imposition of this additional interest from a policy standpoint, helps to avoid rewarding defendants for delaying litigation. Id. The post-judgment interest award, however, does not begin to accrue until the date of the Court's order setting damages, not the entry of judgment following the jury verdict. Id. at 3. Finally, the Court declined to award post-judgment interest on the enhanced damages award. Id. at 3-4. Unlike prejudgment interest which is compounded quarterly and at the prime rate, post-judgment interest is calculated at a rate equal to the "weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System for the calendar week preceding." Id. at 4.

Trueposition Inc. v Andrew Corporation, C.A. No. 05-747-SLR, Memo. Order (D. Del. Jan. 28, 2009).

Posted On: January 28, 2009

Judge Joseph J. Farnan, Jr.: Court Will Not Force Defendants to Identify Specific Sections of Source Code Corresponding to Claims

The discovery of source code has become a frequent area of dispute in patent cases. The hottest topics usually relate to protecting the highly confidential nature of source code. In CIF Licensing, LLC v. Agere Systems, Inc., however, the defendants produced their complete source code in escrow and plaintiff had complete access to it. C.A. No. 07-170-JJF, Memo. Op. (D. Del. Jan. 23, 2009). What the plaintiff sought by its motion to compel was, in part, detailed answers to interrogatories that asked the defendants to identify specific lines of the source code that perform the specific functions set forth in the claims of the patents-in-suit. Id. at 3. The Court refused to require the defendants to provide such detailed responses because plaintiff has full access to the source code and each side's experts would undertake "essentially the same process to glean the requested information from the source code". Id. at 3-4.

CIF Licensing, LLC v. Agere Systems, Inc., C.A. No. 07-170-JJF, Memo. Op. (D. Del. Jan. 23, 2009).

Posted On: January 28, 2009

D. Del. Continues to See Rise in Patent Filings

Delaware continues to be the hotbed for patent litigation. The District of Delaware continues to be the nation's leader in number of patent cases per judge and Fiscal Year 2008 (October 1-September 30) showed an increase in patent filings in this district by almost 19%. In statistics recently released by the Court, the District of Delaware had 187 patent case filings in Fiscal Year 2008 compared to the 157 patent case filings in Fiscal Year 2007. The filings averaged to be approximately 45 patent cases per authorized judgeship. Of note, this statistic was calculated based on a Court comprised of 4 district court judges, and as most are aware, the District of Delaware has had one vacant judicial position since 2006. This statistic outpaces the N.D. Cal., D.N.J. and C.D. Cal. by almost 10X the amount of case filings per judge and even exceeds the E.D. Tex. by over five cases per judge.

Despite these statistics and the judge's additional civil and criminal case loads, the District continues to schedule patent trials approximately 18-24 months out and promises to adhere to those trial dates once set in the scheduling order. If a litigant wants to get to trial and do so quickly and efficiently, the District of Delaware remains the place to do so.

The graphs set forth below were provided by the U.S. District Court for the District of Delaware.

Posted On: January 27, 2009

New District of Delaware Intellectual Property Case Filings

1/12: Quantum Loyalty Systems, Inc. and Quantum Corporation of New York, Inc. v. TPG Rewards, Inc. (patent infringement)
1/12: Xpoint Technologies, Inc. v. Intel Corp., Farstone Technology, Inc., Acronis, Inc., Hewlett-Packard Co., Dell, Inc., Microsoft Corporation, Acer, Inc., Acer America Corporation, Gateway, Inc., Toshiba Corp., and Toshiba America, Inc. (patent infringement)
1/13: Medicis Pharmaceutical Corp. v. Mylan Inc., Matrix Laboratories, Inc., Sandox, Inc. and Barr Laboratories, Inc. (patent infringement)
1/15: Orion Corporation v. Wockhardt USA, Inc. a/k/a Wockhardt USA LLC and Wockhardt Limited (patent infringement)
1/15: Sciele Pharma, Inc., Andrx Corporation, Andrx Pharmaceuticals, Inc. (n/k/a Watson Laboratories, Inc. - Florida), Andrx Pharmaceuticals, LLC, Andrx Laboratories (NJ), Inc., Andrx EU Ltd. and Andrx Labs, LLC v. Lupin Ltd. and Lupin Pharmaceuticals, Inc.
1/15: The University of Delaware v. Global Solar Energy, Inc. (patent infringement)
1/18: KVAR Energy Savings, Inc. v. L. Gillen, J. Chieffo, Tri-State Energy Solutions LLP and Chieffo Electric, Inc. (trademark infringement)
1/23: Baxter Healthcare Corporation, Baxter International, Inc. and Baxter Healthcare SA v. Minrad, Inc. (patent infringement)

Posted On: January 14, 2009

Judge Sue L. Robinson: New Claim Construction Opinion

In Internet Media Corp. v. Dell, Inc., Judge Robinson construed the following terms used in a patent for technology related to providing access to the World Wide Web:

(1) "a published compilation of preselected Internet locations";
(2) "a predetermined published Internet location";
(3) "a unique predetermined mult-digit jump code."

Internet Media Corp. v. Dell, Inc., C.A. No. 05-633-SLR, Memo. Order (D. Del. Jan. 14, 2009).

Posted On: January 12, 2009

Judge Sue L. Robinson: Extensive Spoliation of Documents Leads to Ruling Patents Unenforceable

As part of an aggressive litigation strategy developed to manage and assert its intellectual property, defendant Rambus Inc. implemented a document retention policy – one meant to protect its intellectual property. Much to their chagrin, however, the District of Delaware has found that this policy, in fact, caused the company to destroy such crucial evidence to its infringement claims that the only proper sanction would be to hold the patents-in-suit unenforceable. Micron Technology, Inc. v. Rambus, Inc., C.A. No. 00-792-SLR, Opinion (D. Del. Jan. 9, 2009). As part of the implementation of the new document retention policy, Rambus held company-wide “shred days” during which employees would shred documents pursuant to the policy. Id. at 13-14. Outside prosecution counsel was even asked by Rambus to purge their files for issued patents except for documents that were part of the official record. Id. at 17. The Court found that a duty to preserve potentially discoverable evidence arose when the company “articulated a time frame and motive for implementation of the Rambus litigation strategy” and because the document retention policy was adopted as a part of this strategy, Rambus “knew, or should have known,” that such a policy would destroy potentially relevant and material documents and therefore such behavior was inappropriate. Id. at 31-32.

Plaintiff Micron Technology had asserted claims of patent misuse and inequitable conduct, along with others against Rambus Inc. These claims, by their nature, are often established using non-public, internal documents from the patentee. The fact that these types of documents were included in the destroyed documents at Rambus would cause Micron extreme prejudice in trying to prove its case which the Court notes, “has been compounded by Rambus’ litigation conduct, which has been obstructive at best, misleading at worst.” Id. at 33.

The Court further found that typical sanctions such as adverse jury instructions or the preclusion of evidence would be “impractical, bordering on meaningless, under these circumstances and in the context of a typical jury trial.” Id. Judge Robinson stated that “[T]he spoliation conduct was extensive, including within its scope the destruction of innumerable documents relating to all aspects of Rambus’ business; when considered in light of Rambus’ litigation conduct, the very integrity of the litigation process has been impugned.” Id. Therefore, the Court found the only appropriate sanction to be declaring the 12 patents-in-suit “unenforceable against Micron.” Id.

Litigants in this district should be reminded that the discovery process and claims of spoliation are taken very seriously here. In fact, Judge Robinson, in this case held a bench trial just on the issue of spoliation and unclean hands. Id. at 1. No one disputes that document retention policies are critical, particularly in today’s electronic world, but one should beware of the timing and motive of the company when implementing such a policy particularly when litigation or an aggressive licensing strategy is part of the company’s business.

Micron Technology, Inc. v. Rambus, Inc., C.A. No. 00-792-SLR, Opinion (D. Del. Jan. 9, 2009).

Posted On: January 12, 2009

New District of Delaware Intellectual Property Case Filings

1/2: Pozen Inc. v. Alphapharm Pty Ltd., Mylan Pharmaceuticals, Inc. and Mylan, Inc. (patent infringement)
1/7: Eurand Inc., Cephalon, Inc. and Anesta AG v. Impax Laboratories, Inc. (patent infringement)
1/8: Wyeth v. Torrent Pharmaceuticals Ltd. and Torrent Pharma Inc. (patent infringement)

Posted On: January 12, 2009

Judge Joseph J. Farnan, Jr.: New Claim Construction Opinion

Judge Farnan recently construed six terms used in patents related to the well-known asthma drug—albuterol. Sepracor, Inc. v. Dey, L.P., C.A. No. 06-113-JJF (Consol.), Memo. Op. (D. Del. Dec. 18, 2008).

The first disputed term, “side effects” was construed to mean “effects other than the desired therapeutic effect associated with the administration of racemic albuterol.” Id. at 13-14. The Defendants argued that by not limiting the term to those side effects set forth in the specification, the claims would cover side effects that were not known at the time the patent was filed and therefore the scope of the claims would be improperly expanded. Id. at 8-9. Judge Farnan found that the patentee did not expressly limit its claim scope to those side effects listed in the specification and, in fact, used language suggesting that the listed effects were only meant to be exemplary. Id. at 12-13. Also, the term “side effects” is a general, not technical, term and therefore can be construed according to its plain meaning. Id. at 13. Thus, the Court did not limit the claim term “side effects” to those set forth in the specification.

As typically arises in a situation where the patentee is awarded such a broad claim construction, the Defendants argued that such a construction would render the claims invalid on the grounds of indefiniteness and written description. Judge Farnan, in a footnote, acknowledged that such a construction may have that effect, however, these invalidity arguments are “best dealt with in a context other than the Court’s initial consideration of claim construction.” Id. at 15 n.2.

The second set of terms, “chronic administration” and “chronically administering to the individual,” was construed to mean “prophylactic or periodic administration.” Id. at 17. Because both parties relied on a declaration in construing this term and the PTO allowed the claims on the basis of this declaration, the Court used this extrinsic evidence in adopting its construction of “chronic administration.” Id. at 16.

The next term, “acute administration,” was construed to mean “treatment after onset of an asthma attack.” Id. at 18. The dispute related to this term was whether the treatment needed to be after the asthma attack began or at some other time. The specification and declaration mentioned above both supported the Court’s definition and because the Plaintiff offered no evidence otherwise, the Court adopted the construction above. Id. at 18.

The parties’ next dispute surrounded the terms “inducing bronchodilation or providing relief of bronchospasm.” Id. at 19. Specifically, the Defendants argued that the term should be limited to the treatment of asthma. Id. The Court found that there was not a “manifest exclusion or restriction” of the claim scope in the specification or prosecution history and because there was no particular definition of the terms in the patent history it looked to the dictionary definitions of “bronchospasm” and “bronchodilation” to define these terms. Id. at 22-23. The Court defined the claim terms to mean “inducing relaxation of smooth muscle in the walls of the bronchi and bronchioles or providing relief from contraction of smooth muscle in the walls of the bronchi and bronchioles.” Id.

The remaining terms were defined as follows:

- “treating bronchospasm in a patient with reversible obstructive airway disease”: “treating bronchospasm in a patient with a respiratory disorder such as asthmas, chronic bronchitis, or emphysema” Id. at 27.

- “preventing bronchospasm in a patient with reversible obstructive airway disease”: “preventing bronchospasm in a patient with a respiratory disorder such as asthma, chronic bronchitis, or emphysema” Id. at 29.

Sepracor, Inc. v. Dey, L.P., C.A. No. 06-113-JJF (Consol.), Memo. Op. (D. Del. Dec. 18, 2008).

Posted On: January 5, 2009

Kent A. Jordan: “Field of Use” Exclusivity Argument Unsupported by License Agreement

Third Circuit Judge Kent A. Jordan, sitting by designation, has issued an interesting decision on exclusivity as it relates to licensee standing. Despite the “semi-exclusive” language in its agreement with the patentholder, the licensee argued that it had standing to sue because the license granted it rights in an exclusive field of use.

The Court rejected that proposition:

“Even if OMI could successfully argue that a single entity extended release tramadol product encompasses a distinct field of use sufficient to provide co-plaintiff standing, and I am not convinced that it could, OMI has not shown that it in fact has an exclusive license to that field.”

The parties’ various agreements, which encompassed multiple products, evinced a “concern” that the licensed products occupied the same field. Accordingly, the licensee could not establish the exclusivity necessary to confer standing to sue.

Purdue Pharma Products LP v. Par Pharmaceutical Inc., C.A. No. 07-255-KAJ (D. Del. Dec. 3, 2008) (Jordan, J.) (redacted version).