Posted On: October 31, 2012

Court appoints independent, neutral expert to opine on interpretation of attorney-client privilege under the laws of India

Judge Kent A. Jordan, sitting by designation, recently determined that communications of defendant with Indian in-house counsel employed by defendant were not subject to attorney-client privilege under the laws of India. Shire Development Inc. v. Cadila Healthcare Limited (d/b/a Zydus Cadila), C.A. No. 10-581-KAJ (D. Del. Oct. 19, 2012). To reach this conclusion, Judge Jordan independently appointed a neutral expert on the laws of India, "[b]ecause the parties presented diametrically opposed expert reports on this difficult questions[.]" Id. at 1. Judge Jordan ultimately adopted this expert's conclusions that, "under the laws of India, attorney-client privilege does not attach to communications between a legally trained corporate employee and his employer." Id. at 2.

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Posted On: October 31, 2012

Magistrate Judge Thynge recommends against transfer of case to Northern District of California where both parties are multi-national Delaware corporations.

Magistrate Judge Mary Pat Thynge recently issued a report recommending the denial of a motion to transfer a case to the Northern District of California based on an evaluation of the considerations outlined by the Third Circuit in Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995). Trueposition, Inc. v. Polaris Wireless, Inc., C.A. No. 12-646-RGA-MPT (D. Del. Oct. 25, 2012). Judge Thynge recognized that the Federal Circuit’s decision in In re Link_A_Media Devices Corp., 662 F.3d 1221 (Fed. Cir. 2011) (previously discussed here) provided guidance for the Court’s consideration of the Jumara factors, but added that “the decision has not altered the fundamental fact that ‘Section 1404(a) is intended to place discretion in the district court to adjudicate motions to transfer . . . .’” Id. at 3 (quoting Intellectual Ventures I LLC v. Altera Corp., 842 F. Supp. 2d 744, 754 (D. Del. 2012) (previously discussed here)).

With regard to the Jumara factors, the defendant emphasized that the plaintiff’s choice of forum should be given little weight because the plaintiff lacked any meaningful connection to Delaware—having no offices or employees in the state. The Court disagreed, explaining, “even if Delaware is not considered [the plaintiff’s] home turf, ‘[n]onetheless [its] incorporation in Delaware represents a rational and legitimate reason to choose to litigate in the state,’ by opting ‘to avail [itself] of the rights, benefits, and obligations that Delaware law affords.’” Id. at 6-7 (footnotes omitted). As a result, the Court explained that the plaintiff’s “choice of Delaware as its preferred forum is entitled to, at minimum, significant deference.” Id. at 7 (quoting Intellectual Ventures, 842 F. Supp. 2d at 754). Although the defendant provided legitimate reasons it preferred to litigate in the Northern District of California—which was the location of its headquarters, product development, almost all employees, all documents, and potential third party witnesses—the Court explained, “Defendant’s choice weighs in favor of transfer, however this factor is not provided the same weight as plaintiff’s preference.” Id.

The Court also explained, with regard to whether the Northern District of California was more convenient for the parties than the District of Delaware, that “[u]nless the defendant is truly regional in character – that is, it operates essentially exclusively in a region that does not include Delaware – transfer is often inappropriate.” Id. at 9 (internal quotation marks omitted). Here, the Court noted that both parties were multi-national corporations with worldwide business activities and interests. Id. at 10. Because neither party convincingly made the case that it would be inconvenienced in either the District of Delaware or the Northern District of California, the Court explained that “incorporation in Delaware tips the balance under this part of the convenience analysis. Given that both parties were incorporated in Delaware, they had both willingly submitted to suit there, which weighs in favor of keeping the litigation in Delaware.” Id. (internal quotation marks omitted).

As for the convenience of potential witnesses, including third party witnesses, the Court noted that only the defendant made a case that its preferred forum was more convenient, as the plaintiff failed to identify any witness who might be unavailable in the Northern District of California. Id. at 12. However, the Court noted that “[t]his factor … warrants limited weight since unavailability and lack of cooperation by non-party witnesses are not presumed.” Id. at 12-13 (citing Ivoclar Vivident AG v. 3M Co., No. 11-1183-GMS-SRF (D. Del. June 22, 2012) (“The practical impact of this factor is limited by the fact that few civil cases proceed to trial, and at trial, few fact witnesses testify live.”)). The Court viewed similarly the location of relevant books and records, explaining that although they were mostly located in the Northern District of California, there was no indication that it would be unduly burdensome to bring them to the District of Delaware, if needed, in light of technological advances. Id. at 14.

Finally, the Court explained that none of the public interest factors weighed in favor of transfer, and one factor especially weighed in favor of keeping the case in the District of Delaware. Citing a Federal Circuit decision, the Court explained that the public policy of the fora weighed in favor of keeping the litigation in the District of Delaware “[g]iven that both parties were incorporated in Delaware, [and] they had both willingly submitted to suit” in Delaware. Id. at 17 (quoting Micron Technology, Inc. v. Rambus, Inc. 645 F.3d 1311, 1332 (Fed. Cir. 2011). On balance, Magistrate Judge Thynge found that transfer was not appropriate in this case, and recommended that the Court deny the defendant’s motion because the “defendant has failed to satisfy its burden of showing that the Jumara factors weigh strongly in favor of transfer.” Id. at 18 (citing Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (Fed. Cir. 1970) (“[U]nless the balance of convenience of the parties is strongly in favor of defendant, the plaintiff’s choice of forum should prevail.”)).

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Posted On: October 26, 2012

Jury verdicts of no infringement and invalidity of St. Jude’s patents in St. Jude v. Volcano Corp. C.A. No. 10-631-RGA

On October 19th, 2012, the jury returned a verdict in St. Jude Medical v. Volcano Corp., C.A. No. 10-631-RGA (D. Del.). The case involved patents related to technology for diagnosis of heart disease. The jury unanimously found that St. Jude failed to prove that Volcano infringed St. Jude’s patents (U.S. Patent Nos. 6,112,598 and 6,248,083). The jury also found that claims 1, 2 and 10 of St. Jude’s patents were invalid as anticipated and obvious (U.S. Patent Nos. 5,938,624 and 6,196,980).

On October 25, 2012, after a second trial on Volcano’s counterclaims, the jury returned a verdict that Volcano had failed to prove that St. Jude literally infringed one of its patents (U.S. Patent No. 5,178,159) and that St. Jude infringed three of its patents under the doctrine of equivalents (U.S. Patent Nos. 5,178,159, 5,797,856, and 6,976,965).

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Posted On: October 24, 2012

The court again distinguishes Link A Media reiterating that, even if operating in another jurisdiction, Delaware may be "home turf" for Delaware corporation

Chief Judge Gregory M. Sleet recently denied defendant’s motion to transfer venue of this patent infringement action to the District of Massachusetts. AIP Acquisition LLC v. iBasis, Inc., C.A. No. 12-616-GMS (D. Del. Oct. 19, 2012). Plaintiff was a Delaware LLC with its principal place of business in Fort Lee, New Jersey, and defendant was a Delaware corporation with its principal place of business in Burlington, Massachusetts. Judge Sleet noted that in this case, plaintiff’s forum choice is afforded substantial deference because Delaware is plaintiff’s home forum (unlike in In re Link_A_Media, 662 F.3d 1221 (Fed. Cir. 2011)). Defendant had argued that plaintiff is based in New Jersey, and so its choice of forum was entitled to less weight, but Judge Sleet was unconvinced because “a corporate entity’s state of incorporation is part of its ‘home turf[.]’” Id. at 4. Judge Sleet also considered the “practical considerations” that related litigation involving plaintiff and the same patents was currently pending before the court and that “[p]ermitting the two cases to proceed in the same court could minimize costs to the judicial system as a whole, by requiring that only one court become familiar with the relevant technology.” Id. at 9. The court denied the motion because, although some private interest factors favored transfer (specifically defendant’s forum preference, where the claims arose, and where the relevant books and records were located), all other factors were either neutral or weighed “decidedly” against transfer. Id. at 10.

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Posted On: October 23, 2012

Judge Andrews grants defendants’ motion for leave to add intervening rights defense, but denies motion with respect to other inconsequential amendments.

A recent decision by Judge Richard G. Andrews shows that courts need not provide parties with leave to amend pleadings where the proposed amendments are inconsequential. LG Electronics, Inc. v. Asko Appliances, Inc., et al., C.A. No. 08-828-RGA (D. Del. Oct. 17, 2012). The defendants’ motion sought leave to “pare[] down their inequitable conduct claims, clarif[y] their antitrust counterclaims, and add[] a defense of intervening rights.” Id. at 1. The Court denied the motion with respect to the first two proposed amendments (deleting over 100 paragraphs relating to inequitable conduct and “refram[ing]” antitrust issues). Id. The Court explained that “narrowing of the inequitable conduct issues can be achieved by stipulation or other understanding among the parties,” and the proposed antitrust amendments “do not add new theories, factual disputes or issues to the case.” Id. The Court explained, “[j]ustice does not require providing leave to make these inconsequential amendments.” Id. (citing Fed. R. Civ. P. 15(a)(2)).

The Court did not find the proposed addition of an intervening rights defense to be inconsequential, though, and granted leave to make that amendment. Id. at 2. The Court found that the defendants timely sought to add an intervening rights defense after the plaintiff was granted leave to amend its infringement contentions regarding claims that were altered by reexamination. Id. The Court explained, “[w]hile the intervening rights defense will require technical and legal analyses of the extent to which the reexamined claims have changed, Defendants assert their defense is germane to the as-yet-unscheduled damages portion of the case, and not to the pending liability phase.” Id. Based on that limitation, the Court found that the defendants could add an intervening rights defense without unduly burdening or prejudicing the plaintiffs or the Court. Id.

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Posted On: October 22, 2012

Magistrate Judge Burke Recommends Denial of Transfer Motion

Magistrate Judge Christopher Burke has issued a report in patent litigation between patent-holding company Pragmatus and internet giant Yahoo!, recommending that Yahoo’s motion to transfer venue to the Northern District of California be denied. See Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-902-LPS-CJB (D. Del. Oct. 15, 2012). Judge Burke wrote a lengthy opinion analyzing the various public and private interest factors of Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) in great depth and explaining how those factors are typically applied in the District of Delaware. Ultimately, Judge Burke found that two factors weighed against transfer, four favored transfer, and six were neutral: “[T]he plaintiff’s choice of forum and practical considerations weigh against transfer. The defendant’s forum preference and whether the claim arose elsewhere weigh in favor of transfer. Two other factors—the convenience of the witnesses and the location of books and records—also weigh in favor of transfer, though only slightly, and not sufficiently to make a material impact on the Court’s decision.”

In reaching this conclusion, Judge Burke clarified several disputes among the parties as to the proper application of transfer precedent in the District of Delaware. He first stated that the Federal Circuit in In re Link_A_Media Devices Corp., 662 F.3d 1221 (Fed. Cir. 2011) “noted that a party’s state of incorporation is not one of the factors listed in Section 1404 or in Jumara, and stated that it would be inappropriate for a court to place ‘heavy reliance’ on this fact, such that it became ‘dispositive’ in the venue transfer analysis.” Nevertheless, he noted, “nothing in Link _A_ Media suggests that a defendant’s place of incorporation is irrelevant to the transfer analysis.” Rather, “in many circumstances, the Federal Circuit has found that the location of a defendant’s incorporation in a forum can be a fact supporting the conclusion that a lawsuit is properly venued in that same forum.” Next Judge Burke considered Yahoo!’s suggestion that when considering the availability of witnesses factor, “it is sufficient for purposes of venue transfer analysis if the witness is not subject to a court’s subpoena power.” He explained that the precedent relied on for this proposition in turn relied on precedent “where the Court intently considered whether there was evidence that the non-party witnesses at issue would actually be unavailable for trial.” He therefore concluded that “to automatically consider a witness unavailable, simply because they reside outside of this District’s subpoena power, would render the inquiry required by this factor unduly wooden.” Rather, a court must consider whether there is evidence that witnesses would actually be unavailable for trial. Finally, in considering the court congestion factor, Judge Burke noted that “for the first time in years, this Court now has a full bench of four U.S. District Judges (and, for the first time ever, three U.S. Magistrate Judges). In light of that . . . [he was] not persuaded by [the] argument that difficulties relating to court congestion favor transfer.”

Based on these and other factors, Judge Burke concluded that while “the issue is a close one . . . Yahoo! has not demonstrated that the balance of convenience of the parties tips strongly in its favor, as is required by Third Circuit precedent.” He refuted Yahoo!’s suggestion that “‘there isn’t a strong showing’ required of defendants in order to obtain a transfer of venue,” stating instead that Third Circuit and District precedent requires “that a defendant bear the ‘heavy burden’ to show that the balance of convenience tips ‘strongly in favor’ of transfer.” Yahoo! did not meet that burden in this case in part because Pragmatus “brought suit . . . in a district that is very near to its place of business and to the location of its employees, a district where it had a legitimate basis to file the litigation (in light of the fact, among other things, that Yahoo! is itself incorporated here), and where the same Court is overseeing myriad other litigation matters involving the patents-in-suit.” Accordingly, Judge Burke recommended denial of the motion to transfer.

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Posted On: October 22, 2012

Judge Andrews Orders Narrowing of Terms for the Court’s Construction

Judge Andrews has issued an interesting order regarding an upcoming Markman hearing in Riverbed Technology Inc. v. Silver Peak Systems Inc., C.A. No. 11-484-RGA (D. Del. Oct. 17, 2012). The parties in the case identified 31 disputed terms for construction, and Judge Andrews “note[d] that the parties have no agreed-upon constructions. The ratio of agreed-upon to disputed terms is considerably outside the norm.” Accordingly, he “anticpate[d] that no more than ten terms will be heard at the hearing,” and placed the burden on the parties to identify those terms most in need of construction.

Judge Andrews’ order requires the parties to submit a joint letter “identifying the number of asserted claims, and explaining the importance of construction of the approximately 31 disputed terms to other issues in the case . . . . Each party should also identify, in order of priority, the terms that are most important to the party to have argued at the hearing.” “Depending on what is in the submission,” Judge Andrews warned, “the Court may select the terms to be heard, may narrow the claims at issue, or both, or may postpone the hearing until the parties narrow the claims and terms.”

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Posted On: October 19, 2012

Court Denies Motions to Exclude Expert Reports and Evidence of Secondary Considerations of Non-Obviousness

Judge Andrews and Magistrate Judge Thynge have issued orders resolving numerous pre-trial issues in the past few weeks in the patent infringement litigation between St. Jude Medical and Volcano Corp. related to technology for diagnosis of heart disease. In addition to rulings on claim construction and exclusion of prior art, Judge Thynge has also recently considered St. Jude’s request to exclude portions of Volcano’s expert reports due to spoliation of evidence and Judge Andrews has considered Volcano’s motions to exclude evidence and testimony related to secondary considerations of non-obviousness.

Judge Thynge considered a request by St. Jude to exclude “portions of Volcano’s expert reports based on Volcano’s purported ‘unilateral destructive testing and spoliation of a unique piece of evidence.” See St. Jude Med. Cardiology Div., Inc. v. Volcano Corp., C.A. No. 10-631-RGA-MPT (D. Del. October 9, 2012). Volcano’s expert reports relied on this testing, and St. Jude alleged that it had no notice of the pending dissection of the evidence and no opportunity to conduct its own testing on any similar piece of evidence. Judge Thynge concluded that “St. Jude did not understand Volcano’s experts were dissecting the [evidence, but] . . . Volcano did not willfully conceal the dissection prior to serving [the expert] reports.” Nevertheless, “[b]ecause Volcano altered the [evidence], and did so without St. Jude understanding that alteration would occur, the court [found] there [had] been spoliation.”

Despite finding spoliation of evidence, Judge Thynge did not exclude Volcano’s expert reports. She determined that “Volcano’s exclusive possession of the [evidence], and St. Jude’s inability to prevent, or object to . . . dissection thereof, weighs in favor of finding Volcano ‘at fault’ for altering that evidence.” Nevertheless, St. Jude’s expert was able to “form strong opinions about [the evidence] from examination of the many photographs included in the . . . report documenting the dissection.” Therefore, “the court determine[d] Volcano’s actions . . . did not cause prejudice to St. Jude sufficient to strike portions of the [expert] reports addressing that dissection.” Accordingly, Judge Thynge denied St. Jude’s motion to strike.

Judge Andrews addressed evidence of secondary considerations of non-obviousness. In addition to finding that certain studies could be relevant to secondary considerations and should be admitted, Judge Andrews considered testimony of an expert regarding secondary considerations. See St. Jude Med. Cardiology Div., Inc. v. Volcano Corp., C.A. No. 10-631-RGA-MPT (D. Del. October 12, 2012). He concluded that evidence that “each generation of St. Jude's products . . . embod[ies] its latest patent” would be insufficient to show the required “nexus” between secondary considerations and the patented invention. Rather, Judge Andrews stated, “there has to be more specific testimony” showing “that any secondary consideration is the result of the patented invention, and not the result of other factors, such as the reputation of the maker, features of the device that were known in the prior art, etc.” Because this proffer was insufficient, Judge Andrews concluded that St. Jude “should not discuss the . . . studies or [the] likely [expert] testimony during its opening. The Court [did] not, however, prohibit[] the Plaintiff from attempting to lay the appropriate foundation during testimony.”

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Posted On: October 19, 2012

Judge Andrews construes term related to "PressureWire" technology

Judge Richard G. Andrews recently construed over thirty claim terms across nine patents related to St. Jude’s “PressureWire” technology, a platform which calculates fractional flow reserve to measure arterial blood pressure. St. Jude Medical v. Volcano Corp., C.A. No. 10-631-RGA (D. Del. Oct. 12, 2012). The following claim terms of U.S. Patent Nos. 6,112,598; 6,167,763; 5,938,624; 6,196,980; 6,248,083; 5,178,159; 5,797,856; 6,976,965; and 7,134,994 were construed:

“it does not contact any surrounding rigid structures,” with “‘[s]aid sensor element’ as the “antecedent basis for the word ‘it’”
“recess”
“surrounding the sensor”
“pressure sensitive end of the pressure transducer does not contact any structure other than the mount”
“pressure transducer”
“core wire”
“fills the male connector to prevent capillary action”
“interface cable”
“connectable”
“information storing means”
“provided on said interface cable”
“uniquely characteristic of said measuring device (14)”
“EPROM”
“extending along the length thereof”
“insulating sleeve”
“extending along the length of the tubular member”
“cylindrical insulting member”
“flexible elongate member”
“coaxially disposed on at least a portion of the flexible elongate member”
“coil assembly”
“distal extremity”
“said flexible elongate member having a first transition counting from the proximal extremity from a larger diameter to a smaller diameter”
“said flexible elongate member is provided with an additional transition distal of the distal extremity of the flexible elongate tubular member and being disposed within the coil assembly”
“hole . . . such that a portion of the pressure sensitive region is disposed opposite the hole”
“distal extremity of the guidewire”
“mounted within the sensor housing such that the pressure sensitive region projects into the lumen”
“multi-mode graphical user interface with at least two distinct displays for presenting diagnostic parameter values of multiple types”
“multi-mode graphical user interface host”
“kernel mode drivers”
“processed sensor data”
“peripheral interface card”

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Posted On: October 18, 2012

Judge Andrews denies stay pending reexamination where case in its early stages

Judge Richard G. Andrews recently denied defendants' motion to stay pending reexamination of one of the two patents-in-suit. Rovi Corp. v. Haier Group Corp., C.A. No. 11-1140-RGA (D. Del. Oct. 16, 2012). Judge Andrews determined that while he "might very well be inclined to grant a stay as to the '523 patent (the subject of the reexam), the Court [did] not see any reason to grant a stay as to the other." Because the case was in its infancy, and because the plaintiffs "ought be able to proceed on the [patent not involved in reexamination proceedings]," Judge Andrews declined to stay the entire case.

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Posted On: October 17, 2012

Judge Andrews construes disputed claim of patent covering plaintiffs' EMBEDA® capsule

Judge Richard G. Andrews construed the one disputed claim term of plaintiffs' U.S. Patent No. 7,815,934 covering plaintiffs' EMBEDA® extended release capsules for oral use. in a one page order, Judge Andrews adopted plaintiffs' proposed construction, construing the term "sequestering subunit" to mean "Any means for containing an aversive agent and preventing or substantially preventing the release thereof in the gastrointestinal tract when intact, i.e., when not tampered with."

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Posted On: October 15, 2012

Judge Robinson denies emergency request seeking disqualification of expert witness.

Judge Sue L. Robinson recently denied a plaintiff’s emergency request seeking to disqualify an opposing expert witness based on the expert’s earlier consultations with the plaintiff, pursuant to a confidentiality agreement, regarding the litigation. Butamax Advanced Biofuels LLC v. Gevo, Inc., Civ. No. 11-54-SLR (D. Del. Oct. 10, 2012). The plaintiff’s emergency request was based on its contention that the plaintiff previously sought to retain the expert, and in the process engaged in substantive discussions regarding how the plaintiff would respond to certain arguments expected to be made by the defendant. Id. at 1-2. The emergency request provided: “Through the confidential relationship, [the expert] at least learned counsel’s [modus operandi] and decision-making process. Yesterday, [the expert] indicated he will consult for [the defendant’s] counsel on the same matters. The Court should exclude [the expert] and preclude [the defendant] from contacting him further.” Civ. No. 11-54-SLR, D.I. 531.

The Court explained that the disqualification of an expert witness is justified where it was “(1) … objectively reasonable for the party seeking disqualification to have concluded that a confidential relationship existed with the expert;[] and (2) … confidential or privileged information actually [was] disclosed to the expert.” Id. at 2 (citing Syngenta Seeds, Inc. v. Monsanto Co., Civ. No. 02-1331, 2004 WL 2223252, at *1 (D. Del. Sept. 24, 2004)). The Court added that “[a]ffirmative answers to both inquiries ordinarily compel disqualification; however, ‘disqualification is likely inappropriate if either inquiry yields a negative response.’” Id. at 3 (quoting Wang Laboratories, Inc. v. Toshiba Corp., 762 F. Supp. 1246, 1248 (E.D. Va. 1991)).

Here, the Court assumed that because the expert signed a confidentiality agreement, the first prong of the inquiry was satisfied. Id. at 5-6. The Court found, though, that the second prong of the inquiry was not satisfied, because no confidential or privileged information was disclosed to the expert by the plaintiff’s attorney. Id. at 6. The record showed that the expert had not been retained by the plaintiff, nor received any fees or confidential documents from the plaintiff. Id. In fact, the plaintiff’s attorneys had refused to provide the expert “with even publicly available documents from the litigation, e.g., the declarations of two other EC Commission members that had been submitted on behalf of [the plaintiff].” Id. at 6 n.5. The Court found that “the nature of the relationship and of the information allegedly disclosed instantly is much too abbreviated to warrant such a drastic sanction [as disqualification].” Id. at 6. The Court added that allowing the expert to testify on behalf of the defendant would not call into question the integrity of the judicial process, especially where, as here, the expert was “one of a limited number of individuals with expertise related to [the subject matter of his testimony].” Id. at 7.

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Posted On: October 15, 2012

Judge Andrews partially overrules Magistrate Judge’s decision to exclude certain prior art evidence for discovery violations, but excludes the evidence on other grounds

Judge Richard G. Andrews partially overruled Magistrate Judge Thynge’s decision to exclude certain prior art evidence due to discovery violations, but in a subsequent order excluded the evidence anyway on other grounds. St. Jude Medical v. Volcano Corp., C.A. No. 10-631-RGA, Mem. Op. (D. Del. Oct. 9, 2012); Order (D. Del. Oct. 12, 2012). Plaintiffs produced the prior art, a video recording of a demonstration in Paris, France to an audience that included U.S. cardiologists, in support of its 102(a) invalidity theory. The video was produced on April 24, 2012 -- five months after fact discovery closed in November 2011. Id. at 2. Judge Andrews had previously affirmed Magistrate Judge Thynge’s decision to exclude other prior art evidence due to discovery violations. Id. Judge Andrews found the situation at issue here somewhat different, however. First, Judge Andrews found that even though plaintiffs produced the video as soon as they received it, it was not clearly erroneous for Magistrate Judge Thynge to conclude that that producing it after the discovery deadline passed violated the court’s scheduling order. Id. at 3. In doing so, Judge Andrews rejected plaintiffs’ argument that there was no violation because supplementations under Fed. R. Civ. P. 26(e) were permissible and contemplated under the court’s scheduling order. Id. Judge Andrews was not persuaded because Rule 26(e) “is not an invitation to do further investigation immediately before trial, and then add the fruits of the investigation to the case.” Id.

However, Judge Andrews determined that he could not assess whether Magistrate Judge Thynge’s decision to exclude was an abuse of discretion based on the current record. Because of the importance of the evidence (if it was admitted it “might very well provide the clear and convincing evidence to invalidate the patent”), Judge Andrews set up a teleconference on October 11, prior to the commencement of the impending trial, to further discuss the issue with counsel. The next day, Judge Andrews issued an order finding that there was no “likely discovery [defendant] could have done had it had the video earlier.” Oct. 12 Order at 1-2. But, there was no evidence that a person of ordinary skill in the art was in the audience of the demonstration in the video. Id. at 2. Plaintiffs offered the evidence to support its theory that the patented invention was known by others in the United States. Id. The video, however, did not “indicate” knowledge or use in the United States. Id. “The theory that American cardiologists have knowledge . . . based on watching a device the patented features of which are not within their area of expertise, cannot be proved by clear and convincing evidence based on the proffer of evidence.” Id. Thus, Judge Andrews excluded the video, and any related testimony about the demonstration, “as not presenting sufficient evidence to raise a triable jury question[.]” Id. at 3.

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Posted On: October 13, 2012

Judge Stark Denies Motion for Contempt of Permanent Injunction

Judge Stark has denied a motion to hold a defendant in contempt of the Court’s permanent injunction in the long-standing patent battle between ARRIS Group and SeaChange International. See nCube Corp. v. SeaChange Int’l Inc., C.A. No. 01-011-LPS (D. Del. Oct. 12, 2012). A jury had previously found in favor of ARRIS in its infringement case against SeaChange, and the Court entered a permanent injunction in 2006. In 2009, ARRIS filed its motion, alleging that SeaChange’s design-around did not place its interactive television (ITV) product outside the scope of the patent-in-suit or the Court’s permanent injunction. Judge Stark held that the dispute was amenable to a contempt proceeding under the Federal Circuit’s recent decision in TiVo Inc. v. Echostar Corp., 646 F.3d 869 (Fed. Cir. 2011), and held such a hearing to allow the parties to present evidence on the contempt issue.

Under TiVo, a “party seeking to enforce the injunction must prove both that (1) the newly accused product is not more than colorably different from the product found to infringe and (2) that the newly accused product actually infringes.” Tivo, 646 F.3d at 882. ARRIS contended that SeaChange had made only a minor, insignificant change in its design-around. SeaChange countered that ARRIS improperly relied on a previously-unaccused element and that a finding of contempt can only be based on features that were alleged as infringing at trial. Judge Stark came down on the side of SeaChange, explaining that “[u]nder TiVo, the Court must assess whether colorable differences exist between the [accused] functionality . . . of the infringing ITV system and the redesigned . . . functionality that is now implemented . . . [in] the modified ITV system. Having undertaken this analysis, the Court finds that ARRIS has failed to prove, by clear and convincing evidence, that there is no colorable difference between the [accused] functionality in the infringing ITV system and the [accused] functionality in the modified ITV system.” Therefore, Judge Stark concluded, ARRIS had failed to demonstrate the first TiVo prong, and the contempt motion should be denied.

Despite finding that ARRIS had not shown a lack of colorable differences between the original, infringing product and SeaChange’s new, modified product—and therefore that a contempt finding was inappropriate—Judge Stark proceeded to consider whether the modified product infringed the patent-in-suit under the second TiVo prong. He concluded: “Having considered both parties’ arguments and evidence on the issue of infringement, the Court finds that ARRIS has failed to provide clear and convincing evidence that SeaChange’s modified ITV system actually infringes [the asserted claim]. To the contrary, SeaChange—although it does not bear the burden of proof—has come forward with significant evidence of non-infringement.” Accordingly, while he did not find non-infringement, Judge Stark determined that SeaChange had prevailed under the high standard of TiVo and denied ARRIS’s motion for contempt.

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Posted On: October 12, 2012

Judge Robinson Dismisses Claims of Willful and Joint Infringement, Allows Claims of Indirect Infringement

Judge Sue Robinson recently ruled on a motion to dismiss claims of indirect infringement, willful infringement, and joint infringement under Twombly and Iqbal, finding that the plaintiff had adequately plead indirect infringement but not willful or joint infringement. Aeritas, LLC v. Alaska Air Group, Inc., C.A. No. 11-967-SLR, at 1-2 (D. Del. Sep. 28, 2012).

Considering the defendant’s motion to dismiss the amended complaint, Judge Robinson first addressed indirect infringement. She noted that the plaintiff had alleged “induce[d] infringement, of one or more claims of the [patents-in-suit], with specific intent that [the defendant’s] software be used by . . . customers to infringe the [patents-in-suit].” The plaintiff also alleged contributory infringement by the defendant “offering its products to its customers, which constitute a material part of the invention and is not a staple article or commodity of commerce suitable for substantial non-infringing use.” Therefore, “having identified the products at issue for purposes of its direct infringement claims, the court conclude[d] that [the plaintiff had] satisfied the pleading requirements of Twombly and Iqbal with respect to the allegations of indirect infringement found in the amended complaint.” Id. at 5. In making this finding, Judge Robinson reiterated her position in Walker Digital, LLC v. Facebook, Inc., 2012 WL 1129370 (D.Del. Apr. 4, 2012) that a plaintiff meets the requirements of Twombly and Iqbal if it “identif[ies] the patent-at issue and the allegedly infringing conduct, as well as the notice afforded by service of the original complaint and the apparent decision to continue the inducement post-service.”

Turning to the question of willful infringement, Judge Robinson noted that the plaintiff’s amended complaint simply “reserve[d] the right to request [a willful infringement] finding at the time of trial” and alleged that “Defendant’s acts of infringement have been willful under 35 U.S.C. § 284 since at least the date it was served with the Complaint.” In the past, Judge Robinson has “allowed general allegations of willful infringement to withstand motions to dismiss and . . . read[] Seagate as not foreclosing the consideration of conduct after the complaint is filed.” Nevertheless, in this case, she found that “mere notice of the charge of infringement gleaned from service of the complaint [does not] pass muster for a willfulness claim under Rule 8 . . . [as] a patentee must not only demonstrate that the accused infringer knew about the patent (as for indirect infringement), but ‘acted despite an objectively high likelihood that its actions constituted infringement.’” Judge Robinson determined that the allegations of willful infringement did not pass muster under Rule 8 because of “the apparent recognition by [the plaintiff] that it had no good faith basis to assert willful infringement . . . [and] the fact that the burden to prove willful infringement includes more than mere knowledge of the patent.” She noted, however, that “should discovery reveal evidence of willful infringement, [the plaintiff] may approach the court for permission to amend its pleadings at that juncture.” Id. at 7-8.

Finally, Judge Robinson found that the plaintiff had failed to sufficiently plead joint infringement. She explained that “the phrase ‘[t]o the extent that Defendant is jointly infringing . . . it is the mastermind of the infringement’ simply sets forth a proposition, not facts.” She therefore refused to “characterize the speculative language used in the amended complaint as ‘enough factual matter’ that, when taken as true, ‘state[s] a claim for relief that is plausible on its face,’” as required by Twombly. Id. at 9.

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Posted On: October 11, 2012

Judge Stark Grants Leave to Amend Answer to Assert Inequitable Conduct

Judge Leonard Stark recently granted a patent infringement defendant’s motion to amend its answer and counterclaims to assert counterclaims of inequitable conduct. See Intervet Inc. v. Boehringer Ingelheim Vetmedica, Inc., C.A. No. 11-595-LPS (D. Del. Oct. 9, 2012). The defendant represented that it could not have known of the facts supporting a claim of inequitable conduct by the deadline for amending the pleadings, and therefore the good cause required by Rule 16 to amend the case schedule existed. Specifically, the defendant was unaware that the inventors knew the materiality of certain prior art that they had not disclosed to the PTO until after an inventor notebook was produced and depositions of two other inventors were taken. Given these circumstances, Judge Stark found that the defendant had “acted diligently in gathering evidence to support its inequitable conduct claim and informed [the plaintiff] of its intention to amend its answer approximately one week after [the relevant] deposition.” “The Court [did] not find undue delay, bad faith, or dilatory motive in [the defendant’s] actions . . . [and the] amended claim [was] not futile.” Furthermore, the Court was “not persuaded that [the plaintiff] will be unduly prejudiced if the Court grants [the] motion . . . [as] discovery appears to be ongoing.” Accordingly, Judge Stark granted the motion to amend the answer and counterclaims.

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Posted On: October 11, 2012

New Filing Requirement: Electronic Filing of Sealed Documents

The CM/ECF Administrative Procedures have been recently revised to include a new procedure for filing sealed documents electronically, effective November 1, 2012. (See § (G)(1)). Previously, a document filed under seal was not actually filed. Rather, a slip sheet containing the notation “Document Filed Under Seal,” or the like, was filed in its place. Now, the Court requires sealed documents to be filed directly into CM/ECF. During the docketing process, a screen will appear asking if the document should be filed under seal. If “yes” is selected, the document will be sealed from public view. A redacted document is still required to be filed within 7 days of the sealed filing.

In addition, beginning January 1, 2013 all documents filed into CM/ECF are required to conform with the PDF/A standard.

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Posted On: October 10, 2012

Judge Burke grants motion to stay pending reexamination that was filed prior to court entering scheduling order in the case

Judge Burke recently considered defendant RadioShack’s motion to stay plaintiff Ever Win’s patent infringement litigation pending the USPTO’s reexamination of the patent-in-suit. Ever Win International Corp. v. RadioShack Corp., C.A. No. 11-1104-GMS-CJB (D. Del. Oct. 9, 2012). RadioShack filed its request for reexamination in the PTO, and once granted by the PTO, its motion to stay pending reexamination, while the case was still in its infancy and prior to the Court entering a case scheduling order. In weighing the relevant factors to determine whether a stay was appropriate, Judge Burke concluded that the current status of the litigation “strongly favor[ed] a stay.” Id. at 13. Judge Burke noted that “[t]his Court is more likely to grant stays early in a case because they are more likely to advance judicial efficiency and maximize the likelihood that neither the Court nor the parties expend their assets addressing invalid claims.” Id. at 7. Regarding prejudice, the only aspect of this factor that weighed in Ever Win’s favor was the fact that the reexamination proceedings had just begun, resulting in a lengthy delay of resolution of the litigation. Id. at 10-11. Furthermore, because Ever Win never sought a preliminary injunction, “any prejudice to [Ever Win] that might result from delaying the ultimate resolution of this dispute is not as severe as [Ever Win] contends.” Id. at 13.

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Posted On: October 9, 2012

Chief Judge Sleet finds plaintiff’s direct, induced, contributory, and willful infringement claims survive Rule 12(b)(6) motions.

Chief Judge Gregory M. Sleet recently denied several motions to dismiss direct, induced, contributory, and willful infringement claims, finding that the plaintiff’s factual allegations were sufficient to survive under Rule 12(b)(6). In re: Bear Creek Techs. Inc. (‘722 Patent Litig.), MDL No. 12-2344 (GMS) (D. Del. Sept. 27, 2012). The Court explained with regard to the direct infringement claims that “the plaintiff’s complaints meet the Form 18 requirements by: invoking jurisdiction under 28 U.S.C. § 1338(a); stating its ownership of the patent-in-suit; alleging that the defendants have infringed the patent by ‘making, selling, and using [the device] embodying the patent’; putting the defendants on notice as to the general scope/nature of their infringement; and demanding an injunction and damages.” Id. at 2 n.5 (alteration in original). The Court rejected the argument that the complaints were insufficient for failure to identify which products were alleged to infringe, and explained that “[i]t is well-established that, ‘[w]hile it is not necessary to identify specific products,’ it is necessary for a complaint at least to ‘mimic Form 18 and identify a general category of products.’” Id. Here, the complaints included allegations regarding the defendants’ “VoIP products, systems[,] or services[,]” and identified certain trade names associated with the accused services. Id. at 3 n.5.

The Court also rejected the defendants’ arguments that plaintiff’s literal and doctrine of equivalents infringement claims were insufficient for failure to meet the pleading requirements of Twombly and Iqbal. Id. The Court explained, “as the Federal Circuit has made clear, direct infringement—and by extension, its doctrine of equivalents cause of action—must simply comply with the Form 18 elements to meet the Twombly pleading standard.” Id. (citing McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1357 (Fed. Cir. 2007).

Next, the Court rejected the defendants’ argument that the plaintiff’s induced and contributory infringement claims were insufficient for failure to identify specific third parties. The Court explained, “identifying third parties who participated in allegedly infringing activities is a proper question for discovery[,]” and found sufficient the plaintiff’s allegations that “defendants have induced ‘one or more certain affiliates, one or more third parties, and plural subscribers . . . each regarding the VoIP Services subject to [the instant] clamis[.]” Id. (citations omitted). The Court further agreed with the plaintiff that it sufficiently plead knowledge by including in its complaints the allegation that it provided each defendant with a copy of the patent-in-suit in March 2011. Id. For the same reason, the Court found that the plaintiff’s complaints “sufficiently plead the required elements of willful infringement” since its willful infringement claims were not asserted until after March 2011.

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Posted On: October 9, 2012

Judge Andrews construes claims relating to credit/debit/ATM card technology.

Judge Richard G. Andrews recently construed several claim terms relating to credit/debit/ATM card technology. Serverside Group Ltd., et al. v. Dimpledough, Inc., et al., C.A. No. 11-559-RGA (D. Del. Oct. 2, 2012). The Court first construed the term “financial transaction card” to mean “a transaction card (e.g., credit card, debit card, ATM card, or similar card), but not a prepaid bearer card.” Id. at 1. The Court found that the term “financial transaction card,” used in the preambles as a claim limitation to overcome prior art, was “essential to understanding the claim body; without the term, the claims could include a system for placing personalized images on any card material, not just financial transaction cards as is clearly intended in every claim and the specification.” Id. Based on its construction of “financial transaction card,” the Court found that no construction was needed for the claim term “financial transaction card production equipment.” Id. at 2.

The term “financial record of the remote customer that personalized the image” was construed to mean “record of financial information of the customer that personalized the image,” and the term “one way code” was construed to mean “a hash value created from customer information.” Id. at 2-3.

The Court also construed several means plus function terms:

“image processing means for providing an image, produced based on said instructions for manipulation, for application to the financial transaction card” was construed to have the function of “providing an image, based on instructions for manipulation, for application to the financial transaction card” and the associated structure of “an image processor (see, e.g., back end software 110 and image manipulation emulator 256).” Id. at 3.

“means for embedding the customer identifier in the personalized image” was construed to have a function of “embedding the customer identifier in the personalized image” and the structure “a back end server (such as server 1103 or 1203) that embeds the customer identifier in the personalized image, for example by embedding the identifier in a bar code, machine readable code, or metadata.” Id.

“computer program means for presenting to a remote customer the remote user interface / computer program means for presenting to a remote customer a user interface / computer program means for presenting to a remote user interface” were construed to have the function of “presenting to a remote customer or remote user a user interface” and the structure “a user interface (see, e.g., front end software 105 and Figs. 3-10).” Id. at 3-4.

“image instruction means for receiving instructions for manipulation of an image file” was construed to have the function of “receiving instructions for manipulation of an image file” and the structure “an image compilation server coupled to a communications link (see, e.g., image compilation server 108).” Id. at 4.

The Court added that its construction of these means plus function terms was “without prejudice to Defendants’ ability to argue the claims as construed are indefinite, with an expert witness who can aid the factfinder in understanding, inter alia, the claimed function and what one of ordinary skill would require to implement it.” Id. at 5.

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Posted On: October 5, 2012

Judge Thynge Denies Plaintiff’s Motion for Leave to File Motion for Partial Summary Judgment of Infringement Based on Proposed Preliminary Claim Construction at Preliminary Injunction Stage

In Neology, Inc. v. Federal Signal Corporation, et al., C.A. No. 11-672-LPS-MPT (D. Del), Magistrate Judge Thynge recently denied plaintiff’s motion for leave to file a motion for partial summary judgment of infringement based on a preliminary claim construction proposed in connection with plaintiff’s earlier motion for preliminary injunction. Id. at 1. In this case, plaintiff filed suit against defendants alleging infringement of six patents-in-suit. Id. at 1. Plaintiff then filed a motion for preliminary injunction. Judge Thynge subsequently issued a Report and Recommendation denying plaintiff’s motion for preliminary injunction, but agreeing, at least in part, with plaintiff’s proposed preliminary claim construction. Id. at 1. The Report and Recommendation was later adopted by Judge Stark. Id. at 1. And, based on that ruling and the proposed claim construction that was agreed to in part in connection with denial of the preliminary injunction, plaintiff moved for leave to file a motion for partial of infringement regarding two of the six patents-in-suit. Id. at 1-2. Plaintiff argued that “no additional evidence or argument merits reconsideration of construction of those claims [that were agreed to]” and stressed that allowing the partial summary judgment motion would “narrow[] the claims and issues . . . for further discovery and trial.” Id. at 2. The Court disagreed. Citing Federal Circuit authority, the Court noted that “[a]lthough [it] did adopt plaintiff’s proposed construction as to certain terms for the purpose of the preliminary injunction, ‘a conclusion of law such as claim construction is subject to change upon the development of the record after a district court’s decision on a motion for preliminary injunction.’” Id. at 4. The Court further noted that the “standard employed at the preliminary injunction stage is far less stringent than what a plaintiff must prove at trial” and that “as a result of the limited effect of claim construction during the preliminary injunction stage, [it] doubts the alleged time and resource savings benefits advanced by plaintiff.” Id. at 4-5.

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Posted On: October 3, 2012

Judge Stark Denies Motion to Strike Affirmative Defenses of Patent Misuse and Assertion of Invalid Patent Claims

In a recent memorandum opinion, Judge Stark denied an ANDA plaintiff’s motion to strike two of the defendant’s affirmative defenses. The plaintiff filed a complaint for patent infringement in response to the defendant’s filing of an Abbreviated New Drug Application, and the defendant asserted counterclaims. The defendant contended that it had provided the plaintiff with a paragraph IV notification before the suit was filed, and therefore, the plaintiff’s infringement suit constituted patent misuse. The defendant also contended that the plaintiff was barred from recovering costs under 35 U.S.C. § 288 because claims of the patents-in-suit were invalid and the plaintiff did not enter a disclaimer of these invalid claims with the PTO before commencing their suit. The plaintiff moved to strike both affirmative defenses, and Judge Stark denied the motion as to the first defense because there were disputed questions of fact and as to the second defense because there were disputed questions of law. Cadence Pharmaceutical, Inc. v. Paddock Laboratories, Inc., C.A. No. 11-733-LPS, at 1-7 (D. Del. Oct. 1, 2012).

Judge Stark first agreed with the “majority of the District Courts within the Third Circuit that have . . . determined that the heightened pleading requirements of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), do not apply to the pleading of affirmative defenses.” “The Court agrees with these authorities,” he stated, “[t]herefore, Plaintiffs’ contention that Defendants’ affirmative defenses are not pled in a manner that would satisfy Twombly and Iqbal is unavailing.” Id. at 2-3. Further considering the sufficiency of the pleading of counterclaims, Judge Stark rejected the plaintiff’s argument that “an affirmative defense of patent misuse must be pled with particularity to satisfy Federal Rule of Civil Procedure 9(b ).” Judge Stark found that “[i]t is unclear from the pleadings whether the defense sounds in fraud and this Court is unaware of any cases that hold that patent misuse claims inherently sound in fraud.” Id. at 5 n.2.

Judge Stark then turned to the defendant’s contention that it had provided plaintiff with a paragraph IV notification before the suit was filed, explaining how the patents-in-suit were not infringed by the proposed ANDA product and were invalid or unenforceable, and that the plaintiff had therefore engaged in patent misuse by filing a baseless complaint with no reasonable basis for doing so that “impermissibly broadened the physical or temporal scope of the patent grant with anticompetitive effect.” Id. at 3-5. Judge Stark refused to strike this defense, finding that “[a]lthough Defendants have not nearly proven the purported facts on which their patent misuse defense is based (and may never do so), neither does the Court perceive any clear deficiency in the pleading that would justify the relief of striking the affirmative defense and removing it from this case.” Id. at 5.

Judge Stark also refused to strike the defendant’s affirmative defense under § 288. The defendant contended that § 288 barred the plaintiff from recovering costs because the plaintiff did not enter a disclaimer of invalid claims at the PTO prior to commencement of the suit. Judge Stark pointed out that there had been “no finding that any claim of the patents-in-suit is either invalid or unenforceable . . . [and] Plaintiffs cite persuasive authority, in the form of non-precedential decisions from the Federal Circuit and this District, to the effect that§ 288 applies only when patent litigation is commenced after a determination of invalidity.” Id. at 5-6. Although this authority was not precedential, especially in the sense that “there is no such thing as ‘the law of the district,’” id. at 6 n.3, the Federal Circuit has generally agreed with this conclusion, stating that “the argument essentially relied on here by Defendants ‘borders on the ridiculous.’” Id. at 6 (citing Bradford Co. v. Jefferson Smurjit Corp., 2001 WL 35738792, at *7 (Fed. Cir. Oct. 31, 2001)). Nevertheless, because the defendant cited to “arguably inconsistent authority from the Supreme Court and the Third Circuit, among others, construing the predecessor statute to § 288, [a] motion to strike [was] not the appropriate vehicle to resolve this disputed question of law,” and Judge Stark denied the motion. Id. at 6-7.

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Posted On: October 3, 2012

Judge Stark finds that court has personal jurisdiction over Comcast in Delaware

Judge Leonard P. Stark recently denied Comcast's motion to dismiss for lack of jurisidiction. DN Lookup Technologies LLC v. Comcast Corporation, et al., C.A. No. 11-1181-LPS (D. Del. Oct. 1, 2012). In determining whether personal jurisdiction exists, the court first looks to Delaware's long arm statute, 10 Del. C. § 3104(c), and then determines whether asserting personal jurisdiction would violate due process. Id. at 5-6. Plaintiff argued that the court had specific jurisdiction under Delaware's long arm because "Comcast provide[d] infringing services in Delaware" and because "Comcast enjoy[ed] substantial revenues from its subsidiaries[.]" Id. at 7. Comcast argued that it" [did] not own, operate, sell, market, offer to sell, or otherwise provide any cable produces or services in Delaware." Judge Stark found otherwise, however. For example, a press release on the comcast.com website notified the public of Comcast's launch of WiFi in northern Delaware and additional hotspots in and around Wilmington, Delaware. Id. at 7-8. In addition, "the Comcast Agreement for Residential Services entered in to by Wilmington, Delaware customers directs customers to resolve problems by contact ing Comcast." Id. at 8. In addition, Judge Stark found that plaintiff made out a prima facie case that defendant Comcast Cable Communications LLC ("CCCL") was the agent of Comcast when providing accused services in Delaware. Id. at 8. Among other things, Comcast held "itself out to the public as being principally involved in the development, management and operation of cable systems and in the delivery of programming content." Id. Comcast also "enjoy[ed] substantial revenues from CCCL, its wholly-owned subsidiary[, and] divert[ed] free cash flow from its subsidiaries, including CCCL, to distribute dividends to its own shareholders." Id. at 8-9. Judge Stark also determined that due process was satisfied for the aforementioned reasons. Id. at 10-11.

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