Judge Sue L. Robinson recently issued an order denying defendants' pending motions to transfer and amend its answer and staying the case pending "an early valuation of the case[.]" Acronis Int'l GmbH v. Symantec Corp., C.A. No. 12-372-SLR (D. Del. Aug. 20, 2012). Id. at 1. After briefing and oral argument on the pending motions, Judge Robinson noted that the "parties have as much a business dispute as a legal dispute[,]" and that an early valuation of the case "may encourage the resolution of the parties' dispute without incurring the costs and other burdens associated with a more traditional approach to patent litigation[.]" Id. Therefore, Judge Robinson ordered that by the end of October the parties must complete "focused damages discovery," and she referred the case to Magistrate Judge Thynge "for purposes of managing damages discovery and conducting ADR during this preliminary stage of the proceedings." Id. at 2.
Judge Stark recently construed a dozen claim terms relating to patented formulations and methods for making liquid acetaminophen. Cadence Pharmaceuticals, Inc. v. Paddock Laboratories Inc., et al., C.A. No. 11-733-LPS (D. Del. Aug. 22, 2012). The following claim terms were construed:
“liquid formulation consisting essentially of acetaminophen dispersed in an aqueous medium”
“free radical scavenger”
“an isotonizing agent”
“diluted to a concentration of 2 to 50 mg/ml”
“an aqueous solution”
“an injectable aqueous solution”
“while preserving for a prolonged period”
“deoxygenation of the solution by bubbling with at least one inert gas and/or placing under vacuum, until the oxygen content is below 2 ppm”
“optionally the deoxygenation of the solution is completed by addition of an antioxidant”
“and optionally the aforementioned aqueous solution with an active principal is topped with an inert gas atmosphere heavier than air and placed in a closed container in which the prevailing pressure is 65,000 Pa maximum, and the oxygen content of the aqueous solution is below 2 ppm”
With regard to the claim term "stable", the Court rejected the defendants' argument that the term is indefinite under 35 U.S.C. § 112, and therefore not amenable to construction. The Court explained, assuming arguendo that it should even consider indefiniteness in claim construction, that "proof of indefiniteness is an 'exacting standard' that requires a determination that the claim term is 'insolubly ambiguous'." Id. at 5 (quoting Halliburton Energy Servs., Inc. v. M-I LLC, 514 F.3d 1244, 1249-50 (Fed. Cir. 2008)). Here, the Court found that the defendants fell short of showing that the term "stable" was so ambiguous as to be incapable fo construction. Id. at 6.
Judge Robinson has considered motions for judgment as a matter of law and the question of inequitable conduct in a patent infringement case involving technology for applying thin film coatings to glass. See Asahi Glass Co., Ltd. v. Guardian Indus. Corp., C.A. No. 09-515-SLR (D. Del. Aug. 20, 2012). After partial grants of summary judgment, a denial of defendant’s motion to amend to assert claims of inequitable conduct, and a jury trial on validity, the defendant renewed its motion for judgment as a matter of law and moved for a new trial. Although the jury found that the patents-in-suit were valid, the defendant contended that JMOL or a new trial was appropriate because certain claims were invalid due to obviousness and both patents-in-suit were invalid for failure to list the proper inventorship.
On obviousness, Judge Robinson found that defendant had not “identified clear and convincing evidence of obviousness of the asserted claims of the patents-in-suit. Plaintiffs’ evidence of secondary considerations of nonobviousness . . . provides further rationale for upholding the jury verdict of nonobviousness based on the additional references and combinations of references asserted by defendant. Outside of [one prior art reference], the majority of defendant’s additional obviousness theories were founded primarily on attorney argument.” The court therefore found that “the jury’s verdict of nonobviousness was reasonable and supported by the record.” Id. at 40. Judge Robinson also found that defendants had not proven false inventorship through the improper inclusion of inventors, the improper exclusion of inventors, or a challenge to the jury instructions on inventorship. Id. at 15-22.
Finally, Judge Robinson considered the issue of inequitable conduct. The Court had previously considered defendant’s motion to amend the pleadings to add claims of inequitable conduct. But the defendant’s request to amend came six months after the deadline to amend the pleadings and after the close of fact discovery, so the Court denied it on the basis of unexplained delay. After the jury trial, the defendant again argued that plaintiffs had engaged in inequitable conduct by failing to disclose two of their own patents during prosecution. Judge Robinson found, however, that “defendant’s inequitable conduct argument is based primarily on attorney argument without relevant references in the trial record. The evidence at bar is insufficient to demonstrate either the materiality of [the two patents] or [the inventor’s] intent to deceive the PTO by clear and convincing evidence.” Id. at 44. She awarded plaintiffs their reasonable costs in responding to defendant’s additional inequitable conduct theories raised post-trial: “Insofar as the court agrees with plaintiffs that these theories were procedurally barred, and given that defendant’s inequitable conduct theory with respect to [two other patents] are devoid of merit, the court will order defendant to pay plaintiffs’ reasonable costs associated with preparation of their responsive brief.” Id. at 46.
Judge Robinson: no new trial based on purportedly improper jury instruction to which no objection was raised.
In a recent memorandum opinion, Judge Robinson denied a plaintiff’s post-trial motion for judgment as a matter of law and for a new trial. Solvay, S.A. v. Honeywell Int’l Inc., Civ. No. 06-557-SLR (D. Del. Aug. 20, 2012). The patent-at-issue claimed “processes for making 1,1,1,3,3-pentaflouropropane (‘HFC-245fa’).” Id. at 2. At trial, the jury found that the patent was both anticipated and obvious. Id. at 1. The Court found ample evidence to support the jury’s findings, and denied the plaintiff’s motion for judgment as a matter of law of no anticipation or obviousness. Id. at 9, 12, 17.
The Court also denied the plaintiff’s motion for a new trial, which was based, in part, on the argument that the Court’s jury instructions were inconsistent with the manner in which the Court and the parties originally construed claim 1 of the patent-at-issue. Id. at 17. The Court noted that in its Markman order, it construed a reaction in claim 1 as occurring “at a temperature and under a pressure whereby HFC-245fa and HCl are produced in gaseous form and separated from the reaction mixture in a gas stream[.]” Id. at 17. The Court acknowledged that in the final jury instructions, the same portion of claim 1 was construed slightly differently, to read: “at a temperature and under a pressure whereby HFC-245fa and HCl are produced in gaseous form and continuously separated or drawn off from the reaction mixture in a gas stream”. Id. (emphasis in original). The Court noted, though, that “[t]he threshold issue is whether [the plaintiff] properly objected to the change in instructions, thereby preserving its right to raise the instruction as grounds for a new trial.” Id. at 18. Here, the plaintiff “did not object to the [inclusion of ‘continuously’ or ‘or drawn off’] to the claim construction in its notice of objections to the final jury instruction …, and it did not raise any objection before the instructions were read to the jury.” Id. Further, the plaintiff “conceded that the version of the claim construction including the words ‘continuously’ and ‘or drawn off’ was consistent with the court’s previous construction.” Id. at 18-19 (citing trial transcript). Under the circumstances, the Court explained that a new trial based upon the purported improper jury instruction would not be warranted because there was no “grievous unfairness” resulting from the instruction. Id. at 19.
Judge Sue L. Robinson recently denied defendants' joint motion to transfer to the Northern District of California where the patents-in-suit were previously litigated. Mosaid Technologies, Inc. v. Sony Ericsson Mobile Communications (USA) Inc., C.A. No. 11-598-SLR (D. Del. Aug. 16, 2012). Judge Ware of the Northern District of California presided over the two previous cases and was, according to defendants, "extensively familiar with the patents." Id. at 3. Plaintiff was a Canadian corporation with it's principal place of business in Texas Id. at. 2. Defendant HTC was a Washington corporation with its principal place of business in Washington, and defendant Sony was a Delaware Corporation with its principal place of business in Georgia. Id. Defendants had argued that several of the Jumara public interest factors favored transfer because of Judge Ware's "'substantial investments of both time and resources with respect to the subject matter in this case." Id. at 7. Judge Robinson found those factors neutral, however, noting that Judge Ware recently announced his retirement planned for this month. Id. Judge Robinson found all other factors neutral as well. For example, she determined that this court was "equally well-suited" to construe an agreement at issue under California law, and the named inventors indicated their willingness to travel to Delaware, as needed. Id. at 7-8. "Insofar as no factors favor[ed] transfer in these circumstances[,]" defendants motion was denied. Id. at 9.
Judge Robinson has granted early summary judgment of invalidity on one patent in several of the Cyberfone patent infringement cases. See Cyberfone Systems, LLC v. Cellco Partnerhsip, et al., C.A. No. 11-827-SLR through 11-835-SLR (D. Del. Aug. 16, 2012). Judge Robinson first determined that under Bancorp Services, L.L.C. v. Sun Life Assurance Co. of Canada, 2012 WL 3037176 (Fed. Cir. July 27, 2012), the Court need not conduct claim construction prior to proceeding with a § 101 analysis. Rather, an early summary judgment even without the benefit of claim construction was appropriate. Cyberfone at 8-9. She then considered the patentability of the claimed invention and found that the patent-in-suit did not meet the “machine-or-transformation test” for patentability of a process claim under In re Bilski, 545 F.3d 943 (Fed. Cir. 2008). The claimed process neither “transformed” the credit card data collected nor was meaningfully limited in scope by the machine on which it operated. Judge Robinson found that “the use of a telephone to capture data does not make the abstract concepts of sorting and storing data somehow patent-eligible, [and to] the extent that a machine is also involved in the sorting or organizing step . . . [t]he machine is just a general purpose computing device being asked to do some unspecified sorting function.” Cyberfone at 11-15. Finally, Judge Robinson found that even aside from the non-dispositive machine-or-transformation test, the patent was too abstract: “[T]he abstract nature of plaintiff’s patent is plainly apparent. The patent, broken down into its component parts, recites steps by which data is obtained, sorted and stored. These steps represent nothing more than a disembodied concept of data sorting and storage and, therefore, the court finds the abstract nature of this patented process to be manifestly apparent.” Id. at 15-16.
Judge Stark Issues Claim Construction Opinion in Multi-Defendant Patent Case Relating to Technology for Power Conservation in a Computer System
In St. Clair Intellectual Property Consultants, Inc. v. Apple, Inc., C.A. 10-982-LPS (D. Del.), Judge Stark recently issued a claim construction opinion construing disputed claim terms for six patents-in-suit relating to ways in which a computer system can utilize various techniques to achieve improved power conservation. Id. at 1. In the memorandum opinion, the Court construed the following claim terms and phrases:
- “accumulating a count indicating the time duration said CPU has allocated to performing . . . [said] idle class activities within a predetermined time period”
- “accumulating a count related to said idle class code thread occurrence detection”
- “execution of a predefined code thread”
- “single common system bus which directly connects the CPU device with the input/output devices”
- “system bus which directly connects the CPU device with said input/output circuit”
- “system bus which connects the CPU device with the input/output device”
- “generating [or generates] a first inactivity indicator after a first predetermined period of inactivity and a second inactivity indicator a second predetermined period of inactivity after generating the first inactivity indicator”
- “[couples device operating power/coupling said circuit operating power] . . . when the [state controller/computer system] is in said [first/second/third] state”
- “polarity control bit”
- “polarity circuit”
- “idle thread execution completion detection means”
- “processor clock speed control means”
- “selectable connector”
- “selection device”
- “bus processing means”
- “power director means which in response to the mode of operation of the mode controller selectively couples each of the plurality of power control lines to said memory cell associated with that power control line such that a signal is generated on the power control line that is dependent upon the state of the memory cell to which it is coupled”
Judge Robinson stays second-filed action, defers to first-filed court to determine where litigation should proceed.
In a recent memorandum opinion, Judge Robinson granted a defendant’s motion to stay a second-filed action pending the first-filed court’s determination of where the litigation should proceed in light of the first-filed rule. Cellectis S.A. v. Precision Biosciences, Inc., C.A. Nos. 11-890-SLR, 12-204-SLR (D. Del. Aug. 6, 2012). The declaratory judgment plaintiff, Cellectis, (who was the defendant in a mirror image infringement suit filed first in North Carolina), argued that “the first-filed rule should not apply in the first instance because the North Carolina court lacks jurisdiction over [Cellectis].” Id. at 5. The Court noted, though, that Cellectis had previously sued Precision Biosciences in North Carolina, and therefore “should not oppose litigating in a court in which it previously litigated without complaint.” Id. The Court ultimately held that because it was not “evident that the North Carolina court lacks personal jurisdiction . . . the North Carolina court should make that determination in the first place as the first-filed court.” Id. at 6. The Court stayed the case to allow the North Carolina court time to apply the first-filed rule and determine where the parties’ litigation should proceed. Id.
On a separate issue, Judge Robinson clarified that where a complaint is amended “to add patents that issued after the original complaint was filed,” the determination of whether to permit the amendment is controlled by Federal Rule of Civil Procedure 15(d), as opposed to Rule 15(a). Here, the Court permitted Cellectis to amend its complaint to add newly issued patents under Rule 15(d), explaining that (as with the inquiry under Rule 15(a)) leave should be freely given absent evidence of undue delay, bad faith, or dilatory motive, none of which were present in this case. Id. at 8-9. The Court acknowledged that it appeared Cellectis chose to amend its complaint, rather than file a new action for infringement of the newly issued patents, to avoid "first-to-file complications." Id. at 8.
Judge Fallon Recommends Dismissal of Claims for Indirect Infringement and Willfulness in Multi-Defendant Patent Case Where Plaintiff Failed to Sufficiently Allege That Defendants had "Actual Knowledge"
In Monec Holding AG v. Motorola Mobility, Inc., et al., C.A. No. 11-798-LPS-SRF (D. Del.), Magistrate Judge Fallon recently issued a Report and Recommendation recommending that defendants’ motion to dismiss plaintiff’s claims for indirect infringement and willfulness be granted. Id. at 1. In the case, plaintiff filed suit against multiple defendants alleging willful, direct and indirect infringement of a patent relating to an electronic book technology. Id. at 1-2. Specifically, in its first amended complaint, as bases for its claims of indirect infringement and willfulness, plaintiff alleged that: (1) “Defendants instruct their customers, both retailers and end-users, on infringing uses of the Infringing Products”; (2) “Defendants knew or should have known that the Infringing Products were especially made for use in an infringement of [the patent-in-suit]”; and (3) “there is no substantially noninfringing use of the Infringing Products.” Id. at 2. In support of its allegations that defendants had actual knowledge of the patent-in-suit, plaintiff further alleged that because defendants’ competitors had been engaged in litigation with plaintiff involving the same patent at issue in this case, and because that litigation received substantial press coverage, defendants in this case were aware of and would have likely followed and monitored that litigation. Id. at 1-2.
The Court disagreed, concluding that plaintiff had failed to allege sufficient facts from which the Court could infer that defendants had actual knowledge of the patent-in-suit at the time they committed the allegedly infringing activities. Monec Holding at 8-9. The Court found that plaintiff’s assumption that defendants would have known about the patent-in-suit based on the litigation activities of their competitors was not enough. Id. at 8. The Court also found that the plaintiff failed to sufficiently allege willful blindness or that the defendants somehow purposefully avoided knowledge of the patent-in-suit. Id. at 12. In addition, on the issue of intent, the Court found that plaintiff’s “conclusory averments” contained no factual support to establish the requisite intent and that marketing activities of the defendants, absent more, do not demonstrate that defendants knew such activities were infringing or that defendants had the specific intent to encourage another’s infringement. Id. at 13. Likewise, on the issue of willful infringement, the Court found that plaintiff failed to sufficiently allege how or why defendants would have known that the patent-in-suit applied to their allegedly infringing activities or that defendants acted in “deliberate disregard” of plaintiff’s rights. Id. at 16.
Judge Stark recently issues a Markman opinion construing the claims of patents related to power conservation in computer systems. In St. Clair Intellectual Prop. Consultants, Inc. v. Acer, Inc., et al., C.A. Nos. 09-354-LPS & 09-704-LPS (D. Del. Aug. 7, 2012), Judge Stark construed the following terms:
- “activity value”
- “activity count”
- “monitors/monitoring the activity level [of the] computer system”
- “activity monitor”
- “powered modes”/“powered states”
- “a power switching circuit”
- “predetermined group of the computer system devices/circuits”
- “operating modes”
- “idle threads”
- “clocking said CPU at a second frequency less than said first frequency or by not maintaining clocking of said CPU”
- “special purpose buses each connected to the processor and to one of the external devices and each operating at a different bus bandwidth corresponding to the bus bandwidth associated with the bus device to which it is connected”
- “common bus connecting the plurality of external bus devices to the plurality of special-purpose buses”
- “A data processing system comprising a processor, .... a plurality of special-purpose buses each connected to the processor, ... and bus processing means”
- “power switching means for selecting one of said supply voltages as said card voltage”
- “when the input data [at least a subset of the input data] has not been recently updated”
Judge Andrews Grants Motion to Dismiss Counterclaims for Unclean Hands and State Law Claims for Deceptive Trade Practices, Tortious Interference and Unfair Competition, But Denies Motion to Dismiss Lanham Act Counterclaim
In Kimberly-Clark Worldwide, Inc. v. Cardinal Health 200, LLC, C.A. No. 11-1228-RGA (D. Del. July 27, 2012), Judge Andrews recently issued a memorandum order dismissing with prejudice defendant’s unclean hands counterclaim and dismissing without prejudice defendant’s state law counterclaims for deceptive trade practices, tortious interference and unfair competition, but denying plaintiffs’ motion to dismiss defendant’s Lanham Act counterclaim. Id. at 1. Plaintiffs filed suit against defendant for infringement of two patents relating to sterilization products and methods used to sterilize surgical instruments. In its answer to the complaint, defendant denied plaintiffs’ claims for patent infringement, asserting a number of affirmative defenses and counterclaims, including counterclaims for: (a) unclean hands; (b) unfair competition and false advertising under the Lanham Act; (c) deceptive trade practices; (d) tortious interference; and (e) common law unfair competition. Id. at 1. In response, plaintiffs moved to dismiss each of these counterclaims under Rule 12(b)(6) for failure to state a claim. The Court granted the motion in part and denied it in part. In granting the motion to dismiss defendant’s unclean hands counterclaim, the Court found that “unclean hands is more in the nature of an affirmative defense than a separate cause of action” and that is was not a “stand-alone” counterclaim. Id. at 2. In granting the motion to dismiss defendant’s counterclaim for deceptive trade practices, the Court found that the counterclaim was lacking because it failed to assert “at a minimum, a violation of a particular state’s deceptive trade practices act, including allegations of which subsection is violated.” Id. at 7. Similarly, with respect to dismissal of defendant’s state law counterclaims for tortious interference and common law unfair competition, relying on post-Twombly cases, the Court concluded that those counterclaims should be dismissed because they failed to identify a valid business relationship or expectancy and how plaintiffs’ conduct allegedly interfered with that business relationship or expectancy. Id. at 8. On the other hand, in denying the motion to dismiss defendant’s Lanham Act counterclaim, the Court concluded that defendant’s noninfringement allegations provided a “sufficiently detailed foundation for alleging that Plaintiffs’ statements of infringement are false” and that defendant’s allegations regarding sham litigation and whether certain statements are literally false were each issues of fact “best left for summary judgment or trial.” Id. at 4-5. Regarding certain oral statements and allegations that customers have been misled, the Court further concluded that those allegations had been sufficiently pled for purposes of surviving the motion to dismiss. Id. at 6-7.
Federal Circuit to consider issue of whether it has jurisdiction to hear appeal in case bifurcating liability and damages
Today, the Federal Circuit announced that the appeal from Judge Robinson's decision in Robert Bosch LLC v. Pylon Mfg. Corp., C.A. No. 08-542 (D. Del. 2012) (the Court's post-trial opinion is discussed here), will be heard en banc to determine whether the Federal Circuit has jurisdiction "to entertain appeals from patent infringement liability determinations when a trial on damages has not yet occurred[,]" and "when willfulness issues are outstanding and remain undecided[.]" In recent years, absent unusual circumstances, Judge Robinson has bifurcated liability and damages in all patent infringement cases before her, such that a trial on damages will commence after the issue of liability is fully adjudicated on appeal.
Chief Judge Sleet recently denied a plaintiff’s request to modify a protective order to exempt its lead trial attorney from a prosecution bar. In re Bear Creek Technologies Inc. (‘722 Patent Litigation), MDL No. 12-2344 (GMS) (D. Del. July 25, 2012). The Court explained that “where a separate court [here, the Eastern District of Virginia] has already found that a party met its burden with respect to the need for a prosecution bar on reexamination proceedings, as Verizon has done here, the burden shifts to the other party to prove an exemption on a counsel-by-counsel basis[.]” Id. at 3 (citing In re Deutsche Bank Trust Co. Ams., 605 F.3d 1373 (Fed. Cir. 2010) (alteration added)). Proving that an exemption is needed “requires demonstrating that: (1) counsel’s representation of the client in matters before the PTO does not and is not likely to implicate competitive decision-making related to the subject matter of the litigation so as to give rise to a risk of inadvertent use of confidential information learned in litigation; and (2) the potential injury to the moving party from restrictions imposed on its choice of litigation and prosecution counsel outweighs the potential injury to the opposing party caused by such inadvertent use[.]” Id. at 4.
The Court denied the plaintiff’s motion, explaining that the plaintiff failed to satisfy its burden of showing “(1) that [its lead trial attorney’s] involvement in the … Reexamination will not implicate competitive decision-making; and (2) even if [he] would not be involved in such decision-making, that the potential injury to [the plaintiff] in precluding its choice of counsel outweighs the potential injury to Verizon that would result from inadvertent confidential disclosure(s)[.]” The Court noted that, as the Federal Circuit has held, “strategically amending or surrendering claim scope during prosecution can implicate competitive decision-making necessitating a denial of an exemption request.” Id. at 5 n.6. Further, the Court noted that as a result of discovery under the protective order, the plaintiff’s lead trial attorney already had developed "in-depth knowledge of Verizon’s highly confidential information on nearly all aspects of its voice telecommunications network …” Id. at 5 n.7 (internal quotation marks omitted). On balance, the Court found that exempting the plaintiff’s lead trial attorney from the prosecution bar was unwarranted in light of the knowledge he already had gained through the litigation, coupled with the significant harm Verizon would incur through any inadvertent disclosure. Id. at 6 n.7.
Magistrate Judge Burke recently issued a report and recommendation construing claims of U.S. Patent No. 6,973,229, titled “Node Architecture for Modularized and Reconfigurable Optical Networks, and Methods and Apparatus Therefor.” Lambda Optical Solutions, LLC v. Alcatel-Lucent USA Inc., C.A. No. 10-487-RGA-CJB (D. Del. Aug. 3, 2012). Judge Burke recommended constructions of the following terms:
“optical access ingress subsystem”
“optical access ingress subsystem which is adapted to receive an optical signal associated with an access network”
“optical access egress subsystem”
“optical access egress subsystem which is adapted to direct the optical signal toward an access network”
“transport ingress subsystem”
“transport egress subsystem”
“adapted to selectively provide optical coupling between the transport ingress subsystem and at least one of (1) the optical access egress subsystem, and (2) the transport egress subsystem”
“adapted to selectively provide optical coupling between the transport egress subsystem and at least one of (1) the optical access ingress subsystem and (2) the transport ingress subsystem”
“specified optical input”
“specified optical output”
In addition, Judge Burke recommended the parties’ agreed-upon construction of the following terms:
Joinder proper for claims stemming from defendants' use a third-party's gene expression system in their manufacturing processes
Judge Sue L. Robinson recently denied defendant Alexion's motion to dismiss Novartis's complaint for improper joinder. Novartis Vaccines & Diagnostics, Inc. v. Medimmune, LLC, et al., C.A. No. 11-084-SLR (D. Del. Aug. 2, 2012). Novartis's complaint alleged that defendants infringed its patent by, among other things, the use of "a commercial gene expression system manufactured by non-party Lonza Group AG . . as a common step in what may otherwise be divergent manufacturing processes." Id. at 2-3. Alexion argued that joinder was improper because the defendants use differing manufacturing processes that result in different drug products. Id. at 5. Judge Robinson noted, however, that because defendants modify and incorporate Lonza's system into their own manufacturing processes, "there is necessarily some degree of overlap in defendants' manufacturing processes[.]" Id. at 6. Judge Robinson acknowledged that defendants didn't have a "tangible business or legal relationship[,]" but noted that the absence of such a relationship is "just one of several considerations when determining whether defendants' actions are part of the same transaction, occurrence, or series of transactions or occurrences." Id. In addition, the court found that it would be inefficient "to construe claims and determine invalidity separately for each defendant[,] and the parties' stipulated protective order would alleviate any concerns that defendants would have to disclose sensitive business information to co-defendants who are also potential competitors. Id. at 7.
Judge Robinson grants-in-part plaintiff’s motion to strike finding affirmative defense of invalidity inappropriate due to assignor estoppel
In Juniper Networks, Inc. v. Palo Alto Networks, Inc., C.A. No. 11-1258-SLR (D. Del. Aug. 2, 2012), Judge Robinson granted-in-part plaintiff’s motion to strike defendant’s affirmative defense of invalidity finding that the doctrine of assignor estoppel barred such a defense as to one of the patents-in-suit. Plaintiff argued that the inventors of the patents-in-suit were issued the patents while employed by plaintiff. Id. at 2-3. They subsequently left plaintiff to start another company (the defendant) and brought to defendant “the very same technology that they had previously developed and then assigned to [plaintiff] during their employment.” Id. at 3. Defendant disputed these facts arguing, among other things, that the inventors were not officers or founders of defendant. Id. at 2.
Judge Robinson noted that the Federal Circuit “reaffirmed the existence of the doctrine of assignor estoppel” in Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220 (Fed. Cir. 1988). In Diamond, the Federal Circuit explained that assignor estoppel “is an equitable doctrine that prevents one who assigned the rights to a patent (or patent application)[, or other parties in privity with the assignor,] from later contending that what was assigned was a nullity” Id. at 4 (quoting Diamond, 848 F.2d 1224).
As to four of the patents-in-suit, Judge Robinson denied plaintiff’s motion because the issue of privity between the inventors and defendant could not be determined at “the pleadings stage” and that summary judgment was a “more appropriate venue[.]” Id. at 8-9. “Because the determination of privity . . . with respect to these four patents is a fact-sensitive inquiry that must be resolved outside the pleadings, and given the standard of review applicable to motions to strike, the court denies plaintiff’s motion at this time.” Id. at 9. Judge Robinson similarly denied plaintiff’s motion as to the fifth patent-in-suit because only one of the two inventors assigned his rights to plaintiff, which would require plaintiff to prove assignment by other means. Id. at 9-10. But, as to the sixth patent-in-suit, the sole inventor indisputably assigned the patent to plaintiff and he acknowledged being a founder of defendant, thereby establishing privity. Judge Robinson, therefore, granted plaintiff’s motion striking defendant’s invalidity defense as to that patent. Id. at 10.
Judge Leonard Stark has issued an interesting opinion allowing a plaintiff to amend its complaint for patent infringement to assert willful infringement and add additional patents. The Plaintiff, Cloud Farm Associates, filed a patent infringement action against Volkswagen and ZF Sachs for infringement of two patents. Cloud Farm later filed a first motion to amend the complaint to add allegations of willful infringement and a second motion to amend to add claims for infringement of two additional patents. Judge Stark addressed each motion in turn.
Volkswagen knew of the patents-in-suit since 1999 because of a letter sent to Rolls-Royce and copying Volkswagen regarding alleged infringement of the patents by a Rolls-Royce product. Despite this fact, however, Judge Stark determined that there was no undue delay in seeking to amend the complaint, as “knowledge of the patents-in-suit alone is not sufficient to prove willful infringement . . . [and] Cloud Farm asserts willful infringement for accused product lines that did not even exist in 1999. Thus, the Court focuses for purposes of undue delay on the thirteen month period from the time Cloud Farm filed its initial complaint until the time that Cloud Farm filed its First Proposed Amended Complaint.” Cloud Farm Associates, L.P. v. Volkswagen Group of America, Inc., C.A. No. 10-502-LPS at 4 n.2 (D. Del. Jul. 27, 2012). Similarly, Judge Stark found that “any prejudice resulting from delay prior to the filing of this lawsuit is not properly within the scope of consideration of the First Motion to Amend. Rather, the Court must consider whether Volkswagen has suffered prejudice in the time that has passed since the filing of this lawsuit.” Because there was “no evidence that Volkswagen suffered unfair prejudice during the time between the filing of the initial complaint and the filing of the First Proposed Amended Complaint,” Judge Stark granted the motion for leave to amend. Id. at 8. Furthermore and for similar reasons, Judge Stark concluded that “Cloud Farm’s claim against Volkswagen for willful infringement of the ‘354 patent is not barred by the equitable doctrine of laches [and] consequently, amendment is not futile.” Id. at 7. And in response to the Defendants’ claim that the First Proposed Amended Complaint did not adequately plead claims for willful infringement, Judge Stark found that Cloud Farm’s allegations regarding the letter to Rolls-Royce were sufficient to plead a claim for willful infringement. Id. at 5-6.
Considering the second motion to amend, which related to the addition of two new patents, Judge Stark stated: “The Court concludes that Plaintiff has demonstrated good cause to amend as it did not have sufficient factual information to allege infringement of the ‘616 patent and ‘115 patent until after the depositions of Defendants’ corporate representatives.” Id. at 9-10. While “the parties have already engaged in substantial discovery,” the case was not so far along that the schedule could not be amended to allow the Defendants time to respond to the new patents. Additionally, Judge Stark recognized that “if the Court were to deny leave to amend, the likely result would be that Plaintiff would assert the claims it attempts to add to this lawsuit in a new lawsuit against Defendants—which will require completely new discovery, another Markman hearing, and a separate trial—likely resulting in even higher increased costs for Defendants and further delay in resolution of the parties’ disputes. In these circumstances, the Court does not find undue prejudice [in allowing the addition of the new patents].” Id. at 10-11.