Bifurcation of damages and willfulness does not support plaintiff’s request to bifurfacte defendant’s counterclaims

In Quantum Loyalty Systems, Inc. v. TPG Rewards, Inc., C.A. No. 09-22-SLR-MPT (D. Del. Dec. 22, 2011), Judge Thynge recently considered plaintiff’s request that the court, in addition to damages and willfulness, bifurcate consideration of certain of defendant’s counterclaims. Specifically, plaintiff asked that the court “sever, dismiss, bifurcate or transfer” the following counterclaims because they were unrelated to the factual and legal issues surrounding plaintiff’s claim of infringement of the patent in suit:

– Count II: Declaration of Invalidity and Noninfringement of U.S. Patent No. 7,156,294 (“the ‘294 patent”);
– Count III: Declaration of Invalidity and Noninfringement of U.S. Patent No. 7,066,383 (“the ‘383 patent);
– Count IV: Attempted Monopolization;
– Count V: False Advertising under Section 43(a) of the Lanham Act;
– Count VI: Deceptive Trade Practices under Delaware Law;
– Count VII: Tortious Interference with Prospective Business Relations;
– Count VIII: Breach of Settlement Agreement;
– Count IX: Cybersquatting under the Anticybersquatting Consumer Protection Act (15 U.S.C. § 1125(d)(1));
– Count X: False Designation of Origin under the Lanham Act (15 U.S.C. § 1125(a)); and
– Count XI: Delaware Common Law Unfair Competition.

Id. at 4.

Defendant argued that the counterclaims were appropriate because “the issues for all of the claims, defenses, and counterclaims are substantially intertwined.” Id. Judge Thynge ultimately agreed. Regarding defendant’s antitrust counterclaim, plaintiff argued, among other things, that bifurcation was appropriate because the court has already bifurcated damages and “much of the anticipated antitrust discovery will focus on damages and other economic factors and involve discovery matter unrelated to the patent case.” Id. at 7. Judge Thynge disagreed. “[T]he invalidity and unenforceability of the [patent in suit] is, in part, the basis of [defendant’s] antitrust claims as well as, two of its affirmative defenses to [plaintiff’s] infringement claim. Therefore, bifurcation here . . . would likely result in substantial duplication of evidence, and the presentation thereof, in two separate cases.” Id. at 9.

Quantum Loyalty Systems, Inc. v. TPG Rewards, Inc., C.A. No. 09-22-SLR-MPT (D. Del. Dec. 22, 2011)

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