It’s always a looming question in patent litigation – who goes first in responding to contention interrogatories and how much information must be provided? Special Master Bechtle addressed just this issue in XPoint Technologies, Inc. v. Intel Corporation, C.A. No. 09-26-SLR, Special Master Order 14 (D. Del. June 25, 2010). In this case, the parties simultaneously exchanged responses to contention interrogatories, however, defendant argued that while it provided full and complete answers to the contentions plaintiff propounded on it, that plaintiff only provided some information and then waited until after receipt of defendant’s contentions to use that information and then supplement its own responses. Id. at 2. First, Special Master Bechtle stated that although the court’s scheduling order required that responses to contention interrogatories be filed on or before a date certain, there was no requirement that the responses be exchanged simultaneously. Id. at 3. Second, the Special Master disagreed with the plaintiff’s “theory that use of the word ‘first’ and the other words by the court in ¶2(c)(3) of its scheduling order means that a party with Rule 33 interrogatory answering responsibility can answer those interrogatories by providing a partial response.” Id. at 5. Rule 33 requires that the interrogatory “be answered completely and truthfully” and “must use all of the information a party has at that time…that allows the interrogatory to be fully responded to. The plain meaning of the Rule does not allow a knowing half answer, or a knowing partial answer, or some sort of temporary response.” Id. at 6. In this case, however, the defendant did not show any harm by plaintiff’s failure to comply to warrant dismissal of the claims and issues concerning products other than those included in its original interrogatory response. Id. at 12.
In a recent transfer opinion, Judge Bartle (sitting by designation from the E.D. Pa.) granted defendant Life Technologies Corporation’s motion to transfer to the Southern District of California. Boram Pharm. Co., Ltd. v. Life Technologies Corp., C.A. No. 10-31-HB, Memo. (D. Del. July 14, 2010). This was not a case where the plaintiff’s home turf is Delaware, since Boram is a South Korean company. The court found that the “critical factors” weighing in favor of transfer in this case are the “convenience of the parties and the witnesses.” Id. at 3. Specifically, Life Technologies demonstrated that 10 key witnesses are in the Southern California and all non-party witnesses are within that court’s subpoena power. Id. Furthermore, all of the “key research, testing, development, marketing, sales, and manufacture of the Accused Products” takes place in Southern California. Id. Also, although both parties are large corporations “and by implication can afford to indulge in litigation in this, the more expensive forum, it is no reason for the court to countenance this indulgence.” Id. at 4.
Discovery disputes over the production of source code often involve thorny issues of confidentiality. But sometimes those disputes are more basic, such as when a party outright refuses to produce certain code. In a recent decision, district judge Joseph J. Farnan Jr. addressed this type of dispute, and came down in favor of production.
On the underlying motion to compel, Imagine argued that it had no obligation to produce source code relating to its future products (as opposed to current products) because "of the likelihood that the products will change before they are released" and because movant BigBand "is not entitled to any damages from the future products."
The Court dismissed this contention, noting that Rule 26's relevancy standard is broad enough to encompass BigBand's discovery request: "[S]ource code of Imagine's future products is discoverable because it is reasonably likely to lead to evidence relevant to BigBand's infringement claim."
Also see the Court's related decision on a motion to amend and motion to dismiss.
On Tuesday, Judge Farnan granted a default judgment in a patent infringement case against Medical Skin Therapy Research, Inc. ("MSTR"). Tristrata Technologies filed suit againt MSTR on October 17, 2006 - three years, nine months, and thirteen days before the entry of default judgment. In that time, MSTR appears to have made no response at all to the Court, despite correspondence with Tristata showing that it was aware of the suit. The Court granted a default judgment, but did not grant Tristrata's requested $687,000 in damages plus attorney's fees. Instead, it ordered Tristrata to submit an itemized statement of damages and the basis for the damages, so that MSTR will have an opportunity to respond.
On Tuesday, Judge Farnan issued an opinion in Enhanced Security Research, LLC v. Juniper Networks, Inc., C.A. No. 09-871-JJF (D. Del. July 20, 2010), dismissing Plaintiff's claims for lack of standing.
The question was whether the plaintiff held enough of the rights under the patent to allow it to bring a claim at all. The patent-in-suit had been transferred several times, and was subject to a 2007 "Purchase Agreement" in which Plaintiff had sold several exclusive rights under the patent to a third party, but had retained title. The Federal Circuit requires that a plaintiff or plaintiffs hold "all substantial rights" to a patent in order to bring a claim. Id. at 7-8.
Here, the Court determined that Plaintiff had transferred "all substantial rights" to the third party, including the exclusive right, as stated in the contract, to "initiate, maintain, manage, resolve, conclude and settle all arrangements and activities in connection with any and all licensing or litigation or enforcement efforts and/or Proceedings . . . relating to any of [Plaintiff]'s rights in and to any of the Patents." Id. at 8-9. Because the third party possessed "all substantial rights" relating to the patent, Plaintiff could not bring an action without the involvement of that party. Id. at 9-11. Thus, the Court granted Defendant's Motion to Dismiss.
A recent decision by district judge Joseph J. Farnan Jr. illustrates the broad scope of Rule 15's amended pleading provisions. In the underlying copyright-infringement action, Leonard sought to leave open the operative infringement date in response to negative case law raised by Stemtech during mediation. Stemtech argued that this late change in position was simply a gambit designed to avoid the limitations statute and forestall a winning summary judgment motion.
The Court acknowledged Stemtech's plight, but nonetheless permitted the amendment:
"While the circumstances cited by Stemtech give rise to the specter of bad faith, the Court concludes, at this juncture, that the inference is not strong enough to deny Leonard leave to amend . . . . [T]he deletion of specific date references from the proposed Amended Complaint will leave this issue open for further development during discovery and will preserve Stemtech's ability to defend this action on the basis of a statute of limitations defense or a defense under the case law cited by Stemtech during mediation."
By allowing Leonard to amend these crucial dates in the complaint, the Court reminded litigators that, in the absence of prejudice, Rule 15 allows parties an immense latitude in framing their claims for relief.
Visiting district judge Jerome B. Simandle issued a decision Monday that refused to construe a set of claims for purposes of resolving a motion to dismiss. By their motion, Defendant Trigen and another claimed that, based on the motion's record, their ear-drop solution could not infringe the patents-in-suit as a matter of law.
Recognizing that other jurisdictions have declined to engage in claim construction to resolve a preliminary motion, the Court rejected Trigen's attempts to evade the case law:
"Defendants attempt to distinguish these cases on the grounds that many involved efforts to introduce extrinsic evidence on a Rule 12(b)(6) motion, noting that here no party has offered extrinsic evidence nor documentation of prosecution history. This only serves to illustrate the point. The fact that the parties in this case have obeyed the procedural rules constraining Rule 12(b)(6) motions does not mean that the record is sufficiently complete to warrant construing the patent claim contrary to Plaintiffs' allegations of infringement."
The Court summed it up best by advising that it is possible to "envision a patent infringement cause of action for which patent claims could be construed on a motion to dismiss, but this is not such a case."
In their motion for a preliminary injunction, plaintiffs sought to enjoin defendant from bringing to market defendant’s generic version of plaintiffs’ drug. Id. at 1. Plaintiffs’ motion was filed after the Court held its March 23, 2010 Markman hearing and after the parties informed the court that defendant planned an “at-risk launch” if its generic product received FDA approval. Id. at 4. Defendant agreed to not launch before May 31, 2010, and plaintiffs filed their motion for a preliminary injunction on April 2, 2010. In granting plaintiffs’ motion, Judge Stark found the following: (1) plaintiffs established likelihood of success on the merits based on, among other things, the label defendant proposed to the FDA for its generic product; (2) plaintiffs would be harmed irreparably due to lost market share, lost profits and price erosion; (3) harm to plaintiffs outweighed any harm defendant might suffer due to the injunction because, among other things, defendant would still be entitled to its 180-day period of exclusivity; and (4) the public interest would be served because “the public interest in recognizing Plaintiffs’ patent rights, and more generally promoting continued, large-scale investment in research and development of new pharmaceuticals, outweighs the public’s interest in promoting generic, low-cost alternatives to branded pharmaceuticals.” Id. at 7-38. Judge Stark also ordered plaintiffs to post a $26 million bond in the event that defendant was wrongfully enjoined. Id. at 39-40.
Judge Farnan decided damages in the amount of $305,399 plus pre- and post-judgment interest in AU Optronics Corp. v. LG Display CO., et al., C.A. No. 07-357-JJF (D. Del. July 8, 2010). Judge Farnan found that AUO failed to establish that LGD willfully infringed, noting that since Seagate, there has been “tension in the case law . . . concerning whether the Court should look to prelitigation conduct only and/or post-litigation conduct in determining whether infringement was willful.” Id. at 2. Judge Farnan analyzed the evidence focusing on “prelitigation conduct of the accused infringer in the first instance” while taking into account “whether the accused infringer maintained plausible or credible defenses to infringement and invalidity.” Id. at 3 (internal quotations omitted).
Special Master Seitz: Decision on objections to instructions that 30(b)(6) witness not answer questions
Special Master Seitz recently decided Defendants’ Objections to Plaintiff’s Instructions Not to Answer Questions at Deposition of Plaintiff’s Rule 30(b)(6) Witness. One of the four issues decided involved counsel for Plaintiff instructing the witness not to answer questions regarding communications between himself and a U.S. attorney employed as General Counsel of another entity. Id. at 2. Plaintiff argued that the communication was protected by the attorney-client privilege or, alternatively, the community of interest privilege. Id. Defendants objected because there was no attorney-client relationship, the communications were not described with particularity as required under Fed. R. Civ. P. 26(b)(5)(A)(ii) and the community of interest privilege does not apply because there is not a direct parent-subsidiary relationship between plaintiff and the other entity. Id. Special Master Seitz found that the attorney-client privilege did not apply and that the Plaintiff and its “sister subsidiary” could not be treated as a single entity for purposes of the community of interest privilege. Id. at 3. Moreover, Special Master Seitz noted that the witness, as Plaintiff’s corporate representative at a 30(b)(6) deposition may have spoke to the attorney to gather facts regarding the issues in dispute, but “those facts cannot be protected from disclosure simply because a lawyer provides that information to a corporate witness.” Id. at 4.
Special Master Seitz also addressed objections to counsel for Plaintiff’s instruction that the witness not answer questions regarding conversations with an employee of its sister subsidiary, questions regarding communications with a Swiss attorney employed as in-house counsel at Plaintiff, and questions relating to the witness’s preparation to testify about Plaintiff’s asserted reasonable royalty. Id. at 4-9.
Last week, Magistrate Judge Thynge granted summary judgment of non-infringement in Innovative Patents, L.L.C. v. Brain-Pad, Inc., C.A. No. 07-680-MPT, Mem. Opinion (D. Del. June 29, 2010) [Innovative Patents II]. Plaintiffs Innovative Patents, L.L.C. and Forcefield, Inc. brought this infringement action based on Brain-Pad's sale of sweat bands with impact-absorbing inserts, which Forcefield alleges infringes U.S. Pat. No. 7,234,174.
This case again demonstrates the importance of claim construction. In January, we covered the claim construction opinion in this case, where the Court adopted defendant Brain-Pad's definition of "curved in configuration": "preformed, arcuate and having first and second ends." Innovative Patents, L.L.C. v. Brain-Pad, Inc., C.A. No. 07-680-MPT, at 4 (D. Del. Jan. 13, 2010). Now, the Court granted summary judgment for Brain-Pad because its accused products use pads that are not "curved in configuration" as required by the claims. Brain-Pad's pad inserts are "flaccid, shapeless loop[s] of perforated elastomeric material," which are neither "arcuate" nor have "first and second ends" (because they are loops). Innovative Patents II, at 9.
What about the doctrine of equivalents? It turns out that the "curved in configuration" limitation was added during prosecution to avoid the prior art, and the Court determined that prosecution history estoppel applies, blocking Plaintiffs from relying on the doctrine of equivalents. Id. at 10-13.
All in all, this shows that, while District of Delaware judges have counseled against summary judgment motions under certain circumstances, they remain a useful tool in Delaware.
On June 28th, Magistrate Judge Stark issued an order granting Mylan Pharmaceuticals, Inc.'s motion to amend its infringement response to include an allegation of unenforceability due to inequitable conduct, based on plaintiff Galderma Laboratories' failure to disclose an allegedly material FDA action during prosecution.
The Court held that the proposed amendment pled inequitable conduct with the required particularity, and it allowed the amendment because Mylan had not acted in bad faith or with a dilatory motive in omitting the allegation from its original answer, and because there was no undue prejudice to plaintiffs. Plaintiffs had failed to disclose the relevant FDA Memo despite the fact that it was responsive to a timely document request, and the Court accepted Mylan's explanation that it had not discovered the FDA litigation previously because it had "limited its search to patent infringement actions" (even though "it is clear that a search of all federal court decisions (on Westlaw or Lexis, for example) for [the drug name] would have retrieved the FDA action."). Id. at 6.
Judge Robinson recently issued an opinion in Senju Pharmaceuitical Co. v. Apotex, Inc., C.A. No. 07-779-SLR (D. Del. June 16, 2010), holding that the patent at issue was infringed, but also invalid as obvious.
Senju had asserted several claims of U.S. Patent No. 6,333,045, which covered the use of a "Gatifloxacin ophthalmic solution containing disodium edetate [("EDTA")]," sold as the antibiotic eye-drop "ZYMAR." Apotex filed an abbreviated new drug application ("ANDA") with the FDA, seeking approval to market a generic version of the drug -- Gatifloxacin by itself was covered by a recently expired patent. Id. at 1. The patent at issue in this case, however, was filed later, and claimed the combination of Gatifloxacin and EDTA, as well as the method and uses of combining the two. Id. at 1-2.
The Court found that it would have been obvious to one of ordinary skill in the art to combine Gatifloxacin with EDTA. Id. at 22-33. As described by the Court, both Gatifloxacin and EDTA were known in the prior art, as were the uses and benefits of EDTA combined with compounds similar to Gatifloxacin. Id. at 4-9. The original Gatifloxacin patent recognized the similarity of Gatifloxacin and these other compounds, and also recognized that the "pharmaceutical formulations of Gatifloxacin would follow 'the routes well known ... ' with respect to 'oral and parenteral' administration.'" Id. At the time, such "routes well known" included combinations with EDTA. Id. Thus, it was obvious to one of ordinary skill to combine the substances.
The Court also evaluated the secondary considerations of non-obviousness, but found that they did not weigh in favor of either party. Id. at 33-37. The Court did not give much weight to the product's commercial success, because the prior Gatifloxacin patent blocked the entry of any generic competitors into the market. Id. Senju also argued that a contemporaneous invention had occurred, but the Court determined that the second inventor "did not recognize or appreciate the invention," and discounted this factor as well. Id. at 33-35. All in all, this was a fairly clear-cut obviousness opinion.
It is black letter law that a party asserting patent infringement must have standing to sue before it can bring a claim for infringement. Enhanced Security Research, LLC v. Cisco Systems, Inc., C.A. No. 09-390-JJF, Memo. Op. (D. Del. June 25, 2010). Defendants in Enhanced Security Research, LLC v. Cisco Systems, Inc., brought a motion to dismiss arguing that pursuant to terms of a Purchase Agreement, the plaintiff did not maintain any rights to the patents-in-suit and “divorced nominal legal title to the patents-in-suit from the exclusionary rights to the those patents.” Id. at 3. The issue in this case came down to whether plaintiff can sue in its own name or must include the other party to the Purchase Agreement. Id. at 7. The court found that as a result of the Purchase Agreement, plaintiff retained title to the patents-in-suit and “the rights to use, exploit, enforce, [the patents-in-suit]” but “control over the exclusionary rights” resided with the other party to the Agreement. Id. at 9 (internal citations omitted). By virtue of the agreement, plaintiff is “prohibited from making any decision with respect to assertion of its patent rights, the conduct of litigation relating to the patents-in-suit, or the settlement of such litigation without the prior written consent” of the other party to the Agreement. Id. at 9. It further “relinquished its ability to freely assign, transfer, or license its rights in the patents-in-suit without the prior written consent” of the other party. Id. at 10. Therefore, under the Purchase Agreement, plaintiff lacks standing to bring the lawsuit and joinder of the other party cannot cure the defect. Id. at 11.
In a wide-ranging post-trial opinion issued on Tuesday, District Judge Joseph J. Farnan Jr. covered many topics, including standing, reissue, obviousness, and inequitable conduct. Of these, the Court's decision on inequitable conduct is particularly noteworthy for its explanation of the contours of deceptive intent:
"While in hindsight it may be attractive to construct a deliberate scheme of deceptive intent from the actions of these individuals given the success of CRESTOR in the marketplace, it is at least equally plausible from their testimony and the contemporaneous documentary evidence, that a scheme to defraud was the furthest thing from the minds of these individuals at the relevant time and that their vision was limited to the overwhelming demands they faced daily in their severely understaffed department. Viewed in this context, which the Court is persuaded is the appropriate context given the testimony and evidence, actions suggestive of malfeasance become no more than a string of mishaps, mistakes, misapprehensions and misjudgment on the part of inexperienced and overworked individuals."
By its reference to the marketplace, the Court highlighted its thinking on not only deceptive intent, but also on the intersection of commercial success and inequitable conduct.
See also the Court's errata order, posted here.