Posted On: June 28, 2013

Judge Andrews denies motion to stay litigation

In a recent order, Judge Richard G. Andrews denied defendant’s motion to stay the litigation for “at least six months.” Microsoft Corporation v. Robocast Inc., C.A. No. 13-313-RGA (D. Del. Jun. 18, 2013). The instant action is related to another action—C.A. No. 10-1055 (the “main case”)—in which defendant is alleging patent infringement. As Judge Andrews explained, the main case is “likely to be tried in or near March 2014,” whereas the instant action is not likely to be scheduled for trial “any earlier than 2015.” Id. at 1. Defendant’s main argument in support of its motion for stay was that the instant action would “in all likelihood be resolved by the resolution of the main case.” Defendant further asserted that “it will take six months to see if the alleged infringing activity has any potential to make money.” Id.

Judge Andrews first noted that “both parties’ actions in this case seem to be motivated mostly by their perceived impact on the main case,” as the “[t]he potential economic consequences of this case are dwarfed by those of the main case.” Id. On the one hand, as Judge Andrews explained, he “would not normally stay [claims] of the nature presented by this case, as their interrelationship with the claims of the main case means that they all ought to go forward together.” Id. On the other hand, Judge Andrews acknowledged that defendant did not delay in making its request, the “stay would likely result in simplification of the issues,” and the stay would not “in actuality prejudice [plaintiff].” Id. at 1-2. Ultimately, Judge Andrews concluded that “the allegation of this case is the defendant is infringing [plaintiff’s] patent, and, while the economic consequences may be miniscule, I think on balance that this case too should proceed ahead.” Id. at 2.

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Posted On: June 27, 2013

Judge Robinson issues claim construction opinion for patents involving plastic polymers and strikes expert testimony submitted in support of claim constructions

Judge Robinson recently construed the terms of patents-in-suit -- U.S. Patent Nos. 7,919,159; 7,943,216, and 7,879,930 -- related to "plastic materials with applications in packaging for oxygen-sensitive foods and beverages." INVISTA North America S.a.r.l. et al. v. M&G USA Corporation, et al., C.A. No. 11-1007-SLR-CJB (D. Del. June 25, 2013).

Judge Robinson construed the following terms:

"composition"
"ionic compatibilizer"
"copolyester containing a metal sulfonate salt"
"copolyester comprising a metal sulfonate salt"
"polyester"
"attached"
"metal sulfonate salt"
"cobalt salt"
"is present"
"melt blended resin" and "melt blend"
"a base polymer"
"transition metal catalyst"
"colorant"
"copolyester of polyethylene terephthalate"
"compatibilizer"

Judge Robinson also considered M&G's motion to strike INVISTA's expert testimony submitted in support of its opening claim construction brief, and "hours before the close of expert discovery." Id. at 7 n.7. INVISTA argued that its expert's testimony did not violate the scheduling order's provisions on disclosure of expert testimony because the submission merely provided "a background tutorial for purposes of claim construction." Id. Judge Robinson disagreed.

Claim construction is an issue highly relevant to infringement in this case. Even if lnvista's filing of new expert testimony at the close of expert discovery and without prior notice to M&G did not technically violate the scheduling order, it was inconsistent with the intent of the scheduling order.

Id. at 8

Judge Robinson agreed that "expert testimony can aid the court in claim construction," but struck INVISTA's expert testimony in this case, becuase "allowing new expert testimoony that ha[d] not been vetted through discovery would unduly prejudice M&G." Id.

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Posted On: June 24, 2013

Judge Robinson Grants Motions to Dismiss for Lack of Standing Based on Lack of Ownership of Patents-in-Suit

Judge Robinson recently granted motions to dismiss for lack of standing filed by Amazon, Zappos, and Expedia in a patent infringement case brought by Walker Digital. See Walker Digital, LLC v. Expedia, Inc., et al., C.A. No. 11-313-SLR, Memorandum Op. at 1 (D. Del. June 19, 2013). The standing dispute stemmed from a settlement agreement between Walker Digital and eBay, which the defendants alleged transferred all rights to the patents-in-suit to eBay and terminated Walker Digital’s constitutional standing to pursue the litigation. Using standard principles of contract interpretation, Judge Robinson found that the settlement agreement at issue “ostensibly includes two separate conveyances of rights from plaintiff to eBay” but that both grants of patent rights included the patents-in-suit. Id. at 9. Furthermore, “[g]iven the complexity of plaintiff’s patent portfolio and the sophistication of the parties to the Settlement Agreement, the court relie[d] on the unambiguous granting language rather than the equivocal parol evidence [and an inconsistent warranty provision of the agreement] to divine what the parties meant to accomplish through the Settlement Agreement.” Id. at 11-13.

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Posted On: June 24, 2013

Delaware IP Law Bloggers Comment on Supreme Court's Myriad Decision

Delaware IP Law Blog Author, Greg Brodzik, and Contributor, Jim Lennon, were invited by IPWatchdog.com to comment on the Supreme Court's recent decision in Association for Molecular Pathology, et al. v. Myriad Genetics, Inc., et al., 569 U.S. ___, on the scope of patent eligibility in the context of DNA discoveries. Follow this link to their post on IPWatchdog.com: Myriad: Positive Implications for Genetic Research, but Some Questions Remain Unanswered

Posted On: June 21, 2013

Magistrate Judge Thynge recommends grant of defendants’ motion for summary judgment on willful infringement, denial of motion for summary judgment on lost profits damages

In Masimo Corporation v. Philips Electronics North America Corporation, et al., Magistrate Judge Mary Pat Thynge recently recommended the grant of defendants’ motion for summary judgment as to no willful infringement and the denial of their motion for summary judgment on lost profits damages. C.A. No. 09-80-LPS-MPT (D. Del. June 14, 2013).

The Court recommended the grant of defendants’ motion as to willful infringement with regard to four patents-in-suit. The Court concluded that defendants’ actions had been objectively reasonable because they had “presented legitimate and credible defenses to the infringement claims, as well as presented credible invalidity arguments. As such, [defendants have] ‘demonstrate[d] the lack of an objectively high likelihood that [defendants] took actions constituting infringement of a valid patent.’” Id. at 16 (quoting Black & Decker, Inc. v. Robert Bosch Tool Corp., 260 F. App’x 284, 291 (Fed. Cir. 2008)). For example, with regard to U.S. Patent No. 6,263,222, Judge Thynge had previously recommended adoption of defendants’ claim construction of a key term, and although Judge Stark “ultimately disagreed with the construction,” id., it was clear from these facts that defendants’ reliance on their construction to show noninfringement was reasonable. See id. at 5-6. Additionally, as discussed here, Judge Thynge had previously recommended a partial grant of summary judgment on invalidity as to the same patent. “The partial success of its invalidity defenses lend credibility to the reasonableness of [defendants’] actions which defeats the objective prong of [the Federal Circuit’s test for willful infringement from In re Seagate Tech., LLC, 497 F.2d 1360 (Fed. Cir. 2007)].” Id. at 6-7. With regard to a different patent, the Court concluded that defendants’ invalidity arguments were also reasonable and thus precluded a finding of willful infringement. Id. at 8. Furthermore, the Court had also recently granted summary judgment to defendants on the basis of non-infringement as to this patent. Id. The Court also ruled that summary judgment on willfulness was appropriate, as “this court and the Federal Circuit have held the state of mind of the accused infringer is not relevant” to the objective prong of Seagate. Id. at 12 (internal citations and quotation marks omitted).

The Court recommended denial of defendants’ motion for summary judgment as to lost profits damages, relying on its prior rulings on expert testimony, discussed here. “Having ruled [in that opinion] on all of the challenges to expert testimony, the court has essentially already decided the outcome of the motion for summary judgment on damages. Since the court will allow experts to testify to divisive positions on the [acceptability of a potential non-infringing alternative], as well as permit [plaintiff’s damages expert to present lost profits analysis] at trial," issues of material fact remained and defendants' motion should be denied. Id. at 16.

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Posted On: June 21, 2013

Chief Judge Sleet Finds Personal Jurisdiction Over Declaratory Judgment Defendant Lacking, Grants Motion to Dismiss

Chief Judge Sleet recently granted a patent infringement defendant’s motion to dismiss for lack of personal jurisdiction given the defendant’s lack of sufficient contacts with Delaware. See Liqui-Box Corp. v. Scholle Corp., C.A. No. 12-464-GMS, Memorandum Op. at 1 (D. Del. June 17, 2013). The declaratory judgment defendant, Scholle, is a Nevada corporation with headquarters in California. One of the operating subsidiaries of Scholle, Scholle Packaging, is a Nevada corporation with primary operations in Illinois and headquarters in California. Of the two declaratory judgment plaintiffs, Liqui-Box Corp. and Liqui-Box Inc., one is an Ohio incorporated and based corporation and the other is a Delaware corporation with operations primarily in Texas. After Scholle sent a letter to Liqui-Box in Ohio alleging infringement of its patents, Liqui-Box filed a declaratory judgment action in the District of Delaware. The same day, Scholle filed an infringement action against Liqui-Box in the Northern District of Illinois. Id. 2.

Judge Sleet first found that the exercise of jurisdiction under Delaware’s long-arm statute was inappropriate, rejecting arguments that Scholle had sufficient direct contacts with Delaware and that the actions of Scholle’s subsidiary should be attributed to Scholle under an alter ego theory or an agency theory. Id. at 5-11. As part of this analysis, Judge Sleet emphasized that “the relevant inquiry for specific personal jurisdiction purposes is ‘to what extent . . . the defendant patentee purposefully directed such enforcement activities at residents of the forum, and the extent to which the declaratory judgment claim arises out of or relates to those activities.’” Because sales in Delaware were not “‘enforcement activities’ that might allow for specific jurisdiction in the declaratory judgment context,” found that the case did not fall under the specific jurisdiction or general jurisdiction provisions of the long-arm statute. Id.

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Posted On: June 21, 2013

Judge Robinson denies plaintiff’s motion to exclude, grants defendant’s motion to strike

In a recent order, Judge Sue L. Robinson denied plaintiff’s motion to exclude testimony regarding “commercial success of the [defendant’s] accused . . . products and services,” and granted defendant’s motion to strike plaintiff’s untimely infringement theories. Walker Digital, LLC v. Google Inc., et al., C.A. No. 11-309-SLR, at 1, 4-5 (D. Del. Jun. 21, 2013). Addressing plaintiff’s motion to exclude, Judge Robinson found that “the financial data supplied in the supplemental interrogatory is not well beyond or inconsistent with the testimony of [defendant’s] 30(b)(6) witness” that was deposed on financial topics. Id. at 3. Further, as Judge Robinson explained, plaintiff “had ample opportunity to seek the court's assistance in obtaining financial data earlier, but did not do so.” Id. Additionally, Judge Robinson found that defendant did not act in bad faith. Id. at 4. Judge Robinson found that, on balance, the Pennypack factors weighed against excluding defendant’s financial data. Id.

Turning to defendant’s motion to strike, Judge Robinson noted that in its expert report plaintiff included infringement theories with respect to accused instrumentalities that plaintiff did not address during discovery. See id. at 4-5. Judge Robinson noted that “[g]iven that [defendant] did not disclose these instrumentalities until the close of fact discovery, it is not surprising that these instrumentalities were not vetted by [defendant] and [plaintiff] through the fact discovery process.” Id. at 5. However, as Judge Robinson explained, in its expert report plaintiff “chose to present its infringement contentions in a conclusory fashion and did not provide an infringement chart.” Id. Judge Robinson additionally explained that defendant was not “given the opportunity to participate in the discovery process related” to the newly addressed instrumentalities. Id. Judge Robinson thus granted defendant’s motion to strike. Id.

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Posted On: June 19, 2013

Chief Judge Sleet denies motion to stay pending inter partes review.

Chief Judge Gregory M. Sleet recently denied a defendant’s motion to stay litigation pending inter partes review by the PTO. Davol, Inc. v. Atrium Medical Corp., C.A. No. 12-958-GMS (D. Del. June 17, 2013). The Court found that two of the three stay considerations weighed in favor of granting the motion (issue simplification and stage of litigation). Id. at 9-11. The Court denied the motion to stay, though, finding that the risk of undue prejudice to the plaintiff resulting from a stay outweighed the potential benefits inter partes review could have on the litigation in terms of simplifying the case. Id. at 11-12. As the Court explained, “the PTO proceedings are in their earliest stage and could be expected to last for nearly two years[,]” resulting in a delay in litigation that “risks unnecessarily impairing [plaintiff’s] patent rights[.]” Id. at 4-5. The Court was especially concerned about potential prejudice to the plaintiff given that the parties were direct competitors in a “relatively exclusive market”. Id. at 6. The Court rejected the defendant’s argument that any concern about the competitive position of the plaintiff should be reduced as a result of the plaintiff’s willingness to license its patented technology, explaining that “while eventual money damages might be sufficient to compensate [plaintiff] for lost sales, the prospect of lost market share and price erosion injects an added measure of uncertainty into this action.” Id. at 7.

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Posted On: June 17, 2013

Judge Andrews construes claims related to cardiovascular pressure sensor technology

In St. Jude Medical, Cardiology Division, Inc., et al. v. Volcano Corp., C.A. No. 12-441-RGA (D. Del. May 30, 2013), Judge Richard G. Andrews recently construed the following disputed claim terms of U.S. Patent No. 6,565,514, entitled “method and system for determining physiological variables”:

-“displaying said graph”
-“detecting continuously at least two physiological variables, arterial pressure (Pa) and distal coronary pressure (Pd), derived from the guidewire-mounted pressure sensor”
-"sensor element"

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Posted On: June 14, 2013

Federal Circuit holds that it may entertain appeals from patent liability determinations in bifurcated trials, confirms acceptability of bifurcation of liability from damages and willfulness issues

Today the Federal Circuit held that the Court has jurisdiction to entertain appeals from determinations on patent infringement liability where damages and/or willfulness issues have yet to be decided due to bifurcation. Robert Bosch, LLC v. Pylon Manufacturing Corp., No. 2011-1363, -1364, at 26-27 (Fed. Cir. June 14. 2013). As discussed here, the Federal Circuit decided sua sponte to grant a rehearing en banc on these issues in August 2012.

The Court explained that this case “does not involve the question of whether the district court has the authority to bifurcate the willfulness and infringement issues. As a general matter, it does.” Id. at 22. It “ma[d]e clear that district courts, in their discretion, may bifurcate willfulness and damages issues from liability issues in any given case.” Id. at 26. The Court did observe, with regard to its holding on bifurcation of liability and damages, that “[m]odern patent damages trials, with their attendant discovery, are notoriously complex and expensive. . . . Given the substantial reversal rate of liability determinations on appeal, the whole expense of a damages trial is often wasted. Accordingly, those policy concerns that motivated Congress to grant jurisdiction over cases that are final except for an accounting [of damages] support our holding today.” Id. at 20.

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Posted On: June 14, 2013

Supreme Court: Mere isolation of naturally occurring DNA segment is not patent eligible. AMP v Myriad Genetics, 569 U.S. _ (June 13, 2013)

The U.S. Supreme Court’s much anticipated decision in Association for Molecular Pathology, et al. v. Myriad Genetics, Inc., et al., 569 U.S. ___, issued June 13, 2013. In short, the Supreme Court analyzed whether an isolated DNA sequence is patent eligible in light of the fundamental principle that laws of nature, natural phenomena, and abstract ideas are not patentable. The Supreme Court held that mere isolation of an otherwise naturally occuring genetic sequence of DNA is not patent eligible but that a non-naturally occuring DNA sequence may be subject matter eligible for patenting, so long as the other conditions for patenting are met (e.g., novelty, non-obviousness, written description).

While many divergent views are forming on the impact this decision will have on the biotech industry, its impact on patent litigation in Delaware is broadly predictable. In appropriate circumstances, new patent validity challenges can be anticipated against DNA sequence claims asserted in this District and new litigation may flow from the entry of several new competitors expected to offer genentic tests for various diagnostics, some of which will undoubtedly be the subject of a patent controversy within Delaware’s jurisdiction.

Download file

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Posted On: June 14, 2013

Judge Robinson denies plaintiff's motion to dismiss invalidity counterclaim and motion to strike affirmative defenses and introductory section in defendant's answer

Judge Robinson recently considered a motion to dismiss defendant's counterclaims and to strike certain affirmative defenses related to the invalidity of the patent in suit, as well as certain background information. Joao Bock Transaction Systems, LLC v. Jack Henry & Associates, Inc., C.A. No. 12-1138-SLR (D. Del. June 13, 2013). Judge Robinson denied plaintiff's motion finding that defendant's counterclaims provided sufficient detail to give rise to a plausible claim for relief. Id. at 4-5. Specifically, defendant's answer and counteclaim "include[d] numerous details indicating why Jack Henry believe[d] the '003 patent [was] invalid," such as because the patent in suit was a continuation of a patent determined to be invalid, and because prior art existed prior to a year before the patent application. Id. at 5.

Judge Robinson also denied plaintiff's motion to strike. Regarding defendant's introductory section, Judge Robinson found that the material, including references to prior litigation, had "evidentiary or legal signifcance," and should not be stricken. Id. at 5-6. Judge Robinson declined to strike defendant's affirmative defenses, finding that sufficient supporting facts were present in defendant's responsive pleading. Id. at 6.

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Posted On: June 11, 2013

Judge Robinson denies film company's motion to transfer to California

In a recent memorandum opinion, Judge Sue L. Robinson denied a defendant’s motion to transfer to the Central District of California litigation involving a patented codec used for encoding video onto Blue-ray discs. FastVDO LLC v. Paramount Pictures Corp., Civ. No. 12-1427-SLR (D. Del. June 4, 2013). The plaintiff was a Florida limited liability company with headquarters in Florida, and was significantly smaller (with significantly less litigation experience) than the defendant, a Delaware corporation with its headquarters in California. Id. at 1, 4. The defendant argued that the allegedly infringing coding was performed by authoring houses operating primarily in California, but the Court disagreed, noting that the authoring houses were headquartered in California, but performed coding in facilities located in Indiana, Pennsylvania, and New York. Id. at 1. As a result, and combined with the fact that Blue-ray discs are sold across the country, the Court found that the alleged infringement did not occur principally in California. Id. at 4. The Court gave little weight to the defendant’s argument that the authoring houses’ documents would be outside the Court’s subpoena power, explaining that since “the authoring houses manufacture the Blue-ray discs at the behest of [defendant], it is unlikely they would refuse any reasonable request to produce information from their business partner in electronic format.” Id. at 5. The Court also found that while trial would be less expensive for the defendant in California, it would be more expensive for the plaintiff than litigating in Delaware. As a result, the Court explained that “[a]lthough Delaware is not the locus of any party’s business activities, it is a neutral forum and no more inconvenient for [defendant] than Florida, the locus of [plaintiff’s] business activities.” Id. at 6. All of this, combined with the fact that 24 other Blue-ray cases filed by the plaintiff were pending in Delaware, convinced the Court that transfer was not warranted. Id. at 7-8.

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Posted On: June 7, 2013

Chief Judge Sleet Grants Motion to Stay Pending Inter Partes Reexamination

Chief Judge Sleet has granted a patent infringement defendant’s motion for a stay pending completion of inter partes reexamination of several patents-in-suit. See BodyMedia, Inc. v. Basis Science, Inc., C.A. No. 12-133-GMS, Order at 1-3 (D. Del. June 6, 2013). Judge Sleet first found that a stay would not result in undue prejudice to the plaintiff. The PTO had granted six of the defendant’s seven reexamination requests, thus mooting the plaintiff’s objection that the PTO had not yet acted on the requests. Furthermore, the parties’ competitive relationship did not weigh against granting a stay in light of the fact that the defendant had not yet sold its product and the plaintiff had not sought a preliminary injunction. Finally, Judge Sleet rejected the plaintiff’s allegations of potential prejudice, given that “the potential for litigation delay, by itself, is insufficient to demonstrate that [the plaintiff] will be unacceptably prejudiced” and “the timing of the reexamination and stay requests do not evidence any dilatory motive.” Id. at 3. Judge Sleet also found that the simplification-of-issues-in-question factor favored granting a stay: “[I]f the court were to deny [the defendant’s] request for a stay, it would be adjudicating less than ten percent of [the plaintiff’s] 243 asserted claims. Further, 15 of the 22 claims not covered by the pending reexaminations depend on claims that have been rejected. Thus, while [the plaintiff] is correct that there will be issues for judicial resolution not involved in the inter partes reexamination, the court is convinced that, in view of the foregoing, the reexamination proceedings will simplify the overlapping issues present in the reexamination and that will ultimately be before the court.” Id. Thus, Judge Sleet concluded, “a stay of this action will promote judicial economy and avoiding wasting the parties’ efforts and expense in parallel proceedings.” Id.

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Posted On: June 4, 2013

Judge Andrews denies defendants' motion to exclude plaintiffs' nine experts in advance of bench trial

Judge Andrews recently considered defendants' motion to exclude plaintiffs' nine experts in advance of a bench trial. VIIV Healthcare UK Ltd. v. Lupin, C.A. No. 11-576-RGA (D. Del. May 30, 2013). In support of their motion, defendants submitted more than "1600 pages of appendices . . . , as well as briefing not only on the merits but on collateral argumetns such as compliance with the local rules and the submission of an expert affidavit." Id. Judge Andrews denied defendants' motion and instructed defendants as to the procedure to renew the objections at trial. Id. at n.1. In doing so, Judge Andrews noted:

While I acknowledge the "gate-keeper" function of a federal trial judge, it is inefficient in the extreme to spend hours trying to figure this out in advance of a bench trial in which the likelihood is that the experts are going to testify in any event. In addition, live testimony and cross-examination, in the context of the issues actually in dispute at trial, are much more likely to result in a correct decision from me about whether an expert is giving appropriate reliable scientific testimony, or using bad data and/or inappropriate methods to reach unreliable conclusions.

Id. at. 1-2.

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Posted On: June 3, 2013

Magistrate Judge Burke Denies Motion to Stay Pending Resolution of Motion to Transfer

Magistrate Judge Christopher Burke has denied patent infringement defendant Yahoo!’s motion to stay in a case referred to Judge Burke for resolution of all pretrial matters. See Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-908-LPS-CJB, Memorandum Order at 1 (D. Del. May 30, 2013). Plaintiff Pragmatus sued Yahoo! for patent infringement in the District of Delaware in 2011. During 2012, Yahoo! filed a motion to transfer venue to the Northern District of California, and the Court denied the motion. In early 2013, however, Pragmatus filed a separate lawsuit involving two new patents against Yahoo! in the Northern District of California. Yahoo! promptly filed a renewed motion to transfer venue along with a motion to stay the Delaware proceedings pending resolution of its renewed motion to transfer. Id. at 1-2. Judge Burke considered only the motion to stay, leaving resolution of the renewed motion to transfer for another day.

Considering first the status of the litigation, Judge Burke found that the “case is by no means in its early stages.” Not only was the fact discovery deadline approaching, but the Court had “expended significant resources on the matter,” resolving a motion to transfer, a motion to dismiss, and numerous discovery disputes. “Our Court,” Judge Burke explained, “has found that in such circumstances, it is more difficult for a stay to be characterized as promoting the efficient use of judicial resources.” Accordingly, “the stage of this litigation—with some important case events still ahead, but with many having already been completed—weighs slightly against a stay.” Id. at 4-5.

Judge Burke next considered whether a stay would simplify issues in the case. Yahoo! argued that a stay or transfer would simplify issues and promote judicial efficiency by preventing duplication of effort between the Delaware and California courts. As Pragmatus argued and Judge Burke agreed, however, this argument for simplification was purely speculative in that “a stay would only prevent duplicative litigation if this Court were to (1) later grant the renewed Motion to Transfer; and then (2) this action and the California Action were consolidated for discovery and trial in the Northern District of California; and (3) that consolidation occurred in such a manner as to reduce or eliminate the prospect for the type of duplicative discovery that Yahoo! is concerned about among the two actions.” Judge Burke continued, “if one or more of those eventualities do not later occur . . . the proposed stay will likely result in complication, not simplification—it will have frozen the progress of this case as discovery nears its end, without much or any resulting efficiency benefit to this Court or the Northern District of California. . . . A stay at this precise point in the litigation, even pending decision on the renewed Motion to Transfer, would complicate the orderly proceeding of the completion of the discovery period, which is otherwise currently in full swing as this very motion awaits resolution.” Therefore, “[i]n light of the speculative nature of the prospect for simplification . . . the Court [found] that this factor weighed against a stay.” Id. at 5-7.

Finally, Judge Burke considered the possibility of prejudice to either party and found that, although there was some possibility of prejudice, it did not meaningfully favor either granting or denying a stay. Thus, all three factors relevant to the stay analysis either weighed against granting a stay, or were neutral, and Judge Burke denied the motion to stay. Id. at 7-10.

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Posted On: June 3, 2013

Judge Andrews construes claim terms of patent for three cases

Judge Richard G. Andrews recently issued a claim construction Order relating to three cases that had been consolidated for Markman purposes. Power Management Solutions, LLC v. Intel Corporation, et al., C.A. No. 11-743-RGA; Power Management Solutions LLC v. Advanced Micro Devices, Inc., C.A. No. 12-426-RGA-CJB; Power Management Solutions, LLC v. NVIDIA Corporation, C.A. No. 12-427-RGA (D. Del. May 30, 2013). The patent-in-suit is U.S. Patent No. 5,504,909, entitled “Power management apparatus collocated on the same integrated circuit as the functional unit that it manages.”

Judge Andrews construed the following disputed terms for all three cases:

-“internal” and “external”

-“internal functional circuit”

-“external functional circuit”

-“externally generated”

-“second externally generated electrical signal”

-“internal functional circuit function”

-“allowing submicrosecond recovery of internal functional circuit function upon the assertion of the second externally generated electrical signal”

Judge Andrews also construed the following terms specifically for Power Management Solutions, LLC v. Advanced Micro Devices, Inc., C.A. No. 12-426-RGA-CJB:

-“first electrical signals”

-“electrical power is controllably passed from an external power supply through the power gating means to the internal functional circuit”

-“one or more first electrical signals are controllably passed between an external functional circuit and the internal functional circuit via the switching means”

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Posted On: June 3, 2013

Judge Sleet orders production of documents related to revival of patent application under crime-fraud exception

In Shelbyzyme, LLC v. Genzyme Corporation, C.A. No. 09-768-GMS (D. Del. May 22, 2013), Chief Judge Gregory M. Sleet issued an Order granting in part defendant’s request for production of documents under the crime-fraud exception. Defendant alleged that the patent applicants had committed fraud in reviving a patent application because the abandonment and/or delay in revival was intentional, but the applicants had represented to the PTO that the abandonment and delay were unintentional. Id. at 2 n.1.

“Communications that otherwise would be shielded by the attorney-client privilege or the work product doctrine forfeit such protection when they are made in furtherance of a fraud or crime.” Id. The Court concluded that defendant had not established a prima facie case for fraud as to the abandonment because its arguments were speculative. Id. However, defendant had established a prima facie case for fraud as to the delay in revival, in alleging that the applicants “knew at least as early as December 1999 that the Issue Fee had not been paid; [the prosecuting attorney] had received the Notice of Abandonment . . . in January 2000; and [the applicants] knew at least by early 2000 that the [patent application] had been abandoned.” Id. (internal quotation marks omitted). Communications in 1999 between the applicants and other individuals regarding the fact that the application’s Issue Fee had not been paid, and that failure to pay would result in abandonment, “permit[ted] the reasonable inference that [the applicants] knew . . . that the [application] had been abandoned.” Id. The Court also concluded that “[g]iven the apparent falsity of the applicants’ representation to the PTO and their demonstrated knowledge that 37 C.F.R. § 1.137(b) required the entire delay to be unintentional, an inference of intent [to deceive] is not only reasonable but effectively required here.” Id. While it would be necessary for defendant to show “clear evidence of deceptive intent,” “there is no reason that ‘clear evidence’ cannot take the form of a well-supported inference.” Id. at 3 n.1. Finally, although the PTO may have been aware that it sent the Notice of Allowance and Notice of Abandonment to the applicants, “it could not independently determine what the applicants themselves knew,” and therefore the alleged misrepresentations to the PTO established reliance and causation. Id.

The Court ordered plaintiff to produce the requested documents only within a limited time period (November 2001 – February 2001) and that related to the revival of the patent application. “Given the narrow basis articulated above for the court’s invocation of the crime-fraud exception,” the Court concluded that the only communications made in furtherance of the fraud were those relating to the revival of the patent application, and not “the otherwise protected communications made leading up to the July 1999 response to Office Action or the October 1999 Issue Fee due date.” Id. at 3 n.2.

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Posted On: June 3, 2013

Judge Burke recommends granting plaintiff’s motion to substitute, granting defendant’s motion to transfer, denying parties’ motions to dismiss in ANDA litigation

Recently, in Abbott Laboratories v. Roxane Laboratories, Inc., C.A. No. 12-457-RGA-CJB (D. Del. May 28, 2013), Magistrate Judge Christopher J. Burke issued a report and recommendation with respect to four motions pending before the Court in this ANDA litigation, providing the following recommendations: (1) granting Abbott Laboratories’ (“Abbott”) motion to substitute AbbVie, Inc. (“AbbVie”) as plaintiff in the action; (2) denying Roxane Laboratories, Inc.’s (“Roxane”) motion to dismiss Abbott’s complaint for lack of subject matter jurisdiction; (3) granting Roxane’s motion to transfer venue to the U.S. District Court for the Southern District of Ohio; (4) denying Abbott’s motion to dismiss “all claims and counterclaims related to the two asserted patents without prejudice” as moot. Id. at 1.

In October 2011, Abbott had announced that it would be undergoing a significant reorganization. Id. at 2. Pursuant to the reorganization, Abbott split into two publicly traded companies, one which focuses on developing pharmaceuticals and another which focuses on developing “diversified medical products.” Id. AbbVie is the pharmaceutical-focused company and is a Delaware corporation. Id. The medical product company retained the Abbott name and is an Illinois corporation. Id. Abbott’s headquarters are in Abbott Park, Illinois. Id.

On April 10, 2012, following an amendment to its ANDA, Roxane filed suit in the Southern District of Ohio seeking a declaratory judgment that Abbott’s U.S. Patent Nos. 7,148,359 and 7,364,752 are invalid and/or not infringed. Id. at 4. That same day, Abbott filed suit in the District of Delaware alleging infringement of the patents in the Ohio action in addition to U.S. Patent No. 5,648,497. Id. On April 11, 2012, Abbott filed an amended complaint asserting additional infringement claims with respect to U.S. Patent Nos. 6,037,157 and 6,703,40. Id. In view of its reorganization, Abbott assigned all its Delaware patents-in-suit to AbbVie on August 1, 2012. Id. at 5. Then, on August 29, 2012, Roxane filed it motion to dismiss with its motion to transfer pending. Id. at 5-6. That same day, following Roxane’s filing, Abbott filed its motion to substitute. Id. at 6.

Judge Burke first addressed Abbott’s motion to substitute AbbVie, and Roxane’s motion to dismiss for lack of subject matter jurisdiction, as both motions implicated the issue of “how . . . Abbott’s assignment of the patents-in-suit to AbbVie impact this litigation.” Id. at 6. Judge Burke explained “it is undisputed that when the original Complaint was filed, Abbott was the owner of the patents-in-suit and that it had standing to sue.” Id. at 10. Abbott argued that “pursuant to [Fed. R. Civ. P. 25(c)], its motion to substitute AbbVie as plaintiff in this action ‘was timely and the correct mechanism for bringing AbbVie into the case in Abbott’s stead.’” Id. at 12. On the other hand, Roxane argued that the “standing issue should be judged at the moment there is a challenge to subject matter jurisdiction.” Id. It was thus Roxane’s position that because Abbott “relinquish[ed] its rights to the patent during the pendency of the litigation,” the dispute became moot and there was “no justiciable dispute between Abbott and Roxane [such that the Amended Complaint]” must be dismissed. Id. at 11-12.

First, Judge Burke found that the timing of Abbott’ motion to substitute was not dispositive, and that Abbott’s filing of its motion “mere hours after the filing of Roxane’s Motion to Dismiss . . . militates that the case be dismissed.” Id. at 19. Specifically, Judge Burke explained that “‘[i]n circumstances where dismissal for lack of initial standing is not required, the Supreme Court [has] held that jurisdictional defects can be cured before judgment,’” and that “the temporary loss of standing during patent litigation can be cured before judgment.” Id. at 19. Second, Judge Burke found that “Rule 25(c) may be used to cure a lack of standing incurred after the filing of the complaint as long as the claims survived assignment.” Id. at 25. In light of these findings, Judge Burke recommended that Abbott’s motion to substitute be granted and Roxane’s related motion to dismiss be denied. Id. at 25-26.

With respect to its motion to transfer, Roxane argued that transfer was warranted pursuant to the first-filed rule because “the Ohio Action was filed prior the Delaware Action, and because the Ohio Action involved the same parties and subject matter as the Delaware Action.” Id. at 27. Judge Burke explained that “the first-filed rule is meant to identify cases that, if not mirror images of each other, are so indistinguishable that, in essence, they can be said to arise from the ‘same set of facts.’” Id. at 31. Judge Burke found that “although there will be significant commonalities of fact and law among the two suits, the subject matter of the suits are different enough to render the first-filed rule inapplicable.” Id. at 28. As Judge Burke explained, not only were there three patents in the Delaware action that were not asserted in the Ohio action, there also existed substantive differences among those patents, including differences in subject matter, inventors, and the scope of potentially invalidating prior art. Id. at 28-31.

Despite Judge Burke's recommendation that first-filed rule did not apply, he was nevertheless required to address whether the case should be transferred pursuant to the traditional 28 U.S.C. § 1404(a) analysis. Id. at 32. Judge Burke found that “this is a case where Delaware has no ties to Abbott or Roxane, while the proposed transferee forum not only has ties to both parties and to the underlying dispute, but is also the forum in which litigation regarding the same ANDA is already ongoing.” Id. at 52. Judge Burke further noted that “[a]lthough Abbott’s choice of forum is entitled to considerable deference . . . the balance of the Jumara factors weigh strongly in favor of transfer.” Id. at 53. Accordingly, Judge Burke ultimately recommended that the Court transfer the Delaware action to the Southern District of Ohio, and that the Court deny Abbott’s motion to dismiss as moot in view of that transfer recommendation. Id. at 52-53.

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Posted On: June 3, 2013

Judge Stark grants-in-part defendants' motions to dismiss Clouding IP LLC's infringement claims

Judge Stark recently considered defendants' various motions to dismiss Clouding IP LLC's allegations of infringement filed in three related and coordinated cases. Clouding IP, LLC v. Amazon.com, Inc., et al., C.A. Nos. 12-641-LPS, 12-642-LPS, 12-675-LPS (D. Del. May 24, 2013). First, the Court denied defendant Oracle's motion to dismiss Clouding's direct infringement claims because the claims were sufficient under the Federal Rule's Form 18. Id. at 3-4. The claims identified "a description of the accused Oracle products . . . [and] also identified at least one accused product or product category[.]" Id. at 4. The Court rejected Oracle's argument that Form 18 also required Clouding "to specify what functionality infringed, or any facts that show how [Oracle] performs even one step of a claimed method." Id. (internal quotation omitted) (alteration in original).

All defendants moved to dismiss Clouding's inducement claims because the claims did not adequately plead knowledge of the asserted patents prior to filing the complaint, and failed to plead specific intent to induce infringement. Id. at 5. Clouding argued that its inducement claims were limited to post-filing conduct, thus pre-filing knowledge was not required; and argued that intent was established by Defendants' continued infringement despite knowledge of the complaint. Id. at 5-6. Judge Stark granted defendants motion, however, because Clouding's argument "only holds true . . . if the complaint contains
sufficient facts to support an inference that Defendants specifically intended or encouraged others to directly infringe. No such facts are found in Clouding's [complaints] nd, as a result, Clouding cannot rely on Defendants' continued infringement to support an induced infringement claim." Id. at 6.

All defendants also moved to dismiss Clouding's claims of willful infringement based on Clouding's failure to allege pre-filing knowledge of the asserted patents, and because Clouding had not sought a preliminary injunction for any post-filing conduct. Id. at 6-7. Judge Stark denied defendants' motions. Regarding pre-filing knowledge, Clouding argued that because it amended its original complaints to add willful infringement claims, "the time between the filing of the original complaint and the filing of the amended complaint should be deemed 'pre-filing' conduct under Seagate." Id. at 7. (referring to In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007)). Judge Stark agreed. "For purposes of pleading willful infringement, there appears to be little practical difference between a precomplaint notice letter informing a defendant about a patentee's allegation of infringement and a subsequently-superceded original complaint formally alleging infringement." Id. Regarding Clouding's failure to seek a preliminary injunction, Judge Stark noted that there is no per se requirement that a plaintiff file for a preliminary injunction before raising a willful infringement claim, and Clouding's claims were not based solely on post-filing conduct since the claims were based at least in part on conduct predating the "operative amended complaint." Id. at 8.

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