Posted On: August 28, 2013

Judge Andrews rejects “dual jurisdiction” theory, denies motion to transfer

Judge Richard G. Andrews recently decided defendants’ motion to dismiss for lack of personal jurisdiction or, in the alternative, to transfer the case to the Northern District of California in Round Rock Research LLC v. ASUSTeK Computer Inc., et al., C.A. No. 11-978-RGA (D. Del. Aug. 20, 2013).

The Court first concluded that plaintiff had not established personal jurisdiction over defendant ACI, a California company, with regard to two out of its ten counts that dealt with two different patents. For one patent, plaintiff had not sufficiently alleged that sales of named accused products had taken place in Delaware, and for the other, it had not sufficiently shown that sales of accused products had taken place prior to the filing of the complaint. See id. at 6-7.

The Court then dismissed the Taiwanese defendant, ASUSTeK, because plaintiff “ha[d] not established that there is personal jurisdiction . . . generally.” Id. at 12. Plaintiff could not establish jurisdiction under the specific jurisdiction provisions of the Delaware long-arm statute, see id. at 7-8, but the Court also considered whether “dual jurisdiction” was an available theory, under which there could be “jurisdiction under a blend of” specific and general jurisdiction provisions of the long-arm statute. Id. at 8. Although other Delaware state and federal decisions have accepted the “dual jurisdiction” theory based on their interpretation of a footnote in LaNuova D&B, S.p.A. v. Bowe Co., Inc., 513 A.2d 764,768 (Del. 1986), see id. at 7-10, the Court did not accept the theory. The Court explained that it did not believe that the dicta in this “footnote supports the conclusion that [the Delaware] Superior Court has interpreted it to have [i.e., to recognize dual jurisdiction].” Id. at 10.

The Court then denied the motion to transfer to the Northern District of California. The remaining defendant ACI was incorporated and headquartered in California, while the plaintiff was a Delaware company with its principal place of business in New York. The Court found that that the Jumara factors weighing in favor of transfer did not outweigh plaintiff’s forum choice or the fact that three other actions were filed contemporaneously in Delaware by plaintiff, making the balance of conveniences “tip[] strongly enough” in favor of keeping the case in Delaware. Id. at 19. The Court had also gained familiarity with the patents-in-suit in the related actions through a Markman hearing held after the filing of the motion to transfer. Id. at 18 (see link for the Court’s denial of a motion to transfer to the N.D. Cal. in one of the related cases). While the Court explained that “[s]ubsequent events while a motion to transfer has been pending should not be taken into account,” here “it [had been] predictable that [the Court] would likely be gaining [knowledge of the patents-in-suit] through the related cases” and therefore the Court’s familiarity with the patents was “a legitimate concern to factor into the analysis.” Id. (citing In re EMC, 501 F. App’x 973, 976 (Fed. Cir. 2013)).

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Posted On: August 28, 2013

Judge Sleet claim construction Order

In a recent claim construction Order, Chief Judge Gregory M. Sleet construed the following terms of U.S. Patent No. RE41,555, entitled “Antibody purification:”

“selectively eluting [the monomeric IgG antibody] from the support” and “the
antibody selectively eluted;”

“monomeric IgG antibody”

GlaxoSmithKline LLC v. Genentech, Inc., C.A. No. 10-799-GMS (D. Del. Aug. 22, 2013).

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Posted On: August 26, 2013

Jury verdicts stand after Judge Andrews denies all post-trial motions.

Judge Richard G. Andrews recently denied all post-trial motions in a dispute over patented medical devices. St. Jude Medical Cardiology Division, Inc., et al. v. Volcano Corp., C.A. No. 10-631-RGA (D. Del. Aug. 22, 2013). The Court held separate trials on the patents asserted by the plaintiffs and the defendant, with the jury finding in relevant part that (1) defendant did not infringe the asserted claims of plaintiffs’ U.S. Patents No. 6,112,598 or 6,248,083; (2) defendant proved by clear and convincing evidence that plaintiffs’ U.S. Patents No. 5,983,624 and 6,196,989 are invalid as anticipated and obvious; and (3) plaintiffs did not infringe defendant’s U.S. Patent No. 6,976,965 under the doctrine of equivalents. The parties filed a total of six post-trial motions, but the Court denied each, finding that the evidence put before the jury was sufficient to sustain the verdicts.

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Posted On: August 24, 2013

Judge Stark Denies Motion for Injunction Banning Export of Surgical Products After Finding of Infringement

Judge Stark recently had occasion to consider a patent plaintiff’s request for a temporary restraining order and preliminary injunction filed after a jury found the plaintiff’s patents valid and infringed. The plaintiff, Synthes, asked the court to enjoin exportation of accused products for sales overseas. Depuy Synthes Prods., LLC v. Globus Med., Inc., C.A. No. 11-652-LPS, Memo. Order at 1 (D. Del. Aug. 22, 2013). Judge Stark found, however, that the plaintiff had not demonstrated irreparable harm. Judge Stark’s finding was based on evidence, presented at trail and in the briefing on the motion, showing that consumers use the defendant, Globus’, products for reasons other than the patented features. Judge Stark further pointed out that “[e]ven if Synthes could establish that Globus’ remaining inventory is purchased based on the patented features, ‘lost sales standing alone are insufficient to prove irreparable harm.’” Id. at 2-3 (citations omitted). Accordingly, there was no “clear showing” of a risk of irreparable harm. Finally, Judge Stark found that “Synthes may be adequately compensated through a reasonable royalty.” Id. at 4. For these reasons, Judge Stark denied the motion for a temporary restraining order and preliminary injunction.

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Posted On: August 24, 2013

Judge Andrews Allows Amendment of Complaints to Assert Additional Patents Against Existing Defendants

Judge Andrews recently granted a patent plaintiff’s motion to file amended pleadings, filed two days before the scheduling order’s deadline “to amend of supplement the pleadings.” “The main thrust of the amended pleadings would be to assert some of the four asserted patents, previously unasserted again some of the seven of the defendants, against those defendants.” HSM Portfolio LLC, et al. v. Fujitsu Ltd., et al., C.A. No. 11-770-RGA, Order at 1 (D. Del. Aug. 20, 2013). Judge Andrews found that “[w]hile there are indeed issues concerning delay and unfair prejudice, I believe that the case is still at a fairly early stage, and any issues of prejudice can be dealt with by extending the schedule.” Id.

Judge Andrews went on to address arguments raised by individual defendants specific to their own cases. In this context, he found that:
1. Two patents possibly subject to a laches defense would be better dealt with “at a later stage of the case”
2. The fact that additional patents would “not generate much in the way of damages” did not demonstrate futility
3. Plaintiffs had not “pleaded facts sufficient to support the argument that Spansion is an agent of [defendant] AMD. Thus, while I will allow the amendment, I expect that AMD will file the motion to dismiss that it has proffered.”

In addition to granting the motion to amend, Judge Andrews also ordered the parties to meet and confer and submit a status report on scheduling within four weeks and ordered that “scheduling deadlines relating to the defendants who opposed the motion to amend . . . during the next six weeks (or until there is an agreed-upon schedule, whichever occurs later)” would not be enforced. Id. at 1-2.

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Posted On: August 23, 2013

Judge Sleet grants motion to stay pending reexamination

Chief Judge Gregory M. Sleet recently granted defendant's motion to stay pending reexamination. Celorio v. On Demand Books LLC, C.A. No. 12-821-GMS (D. Del. Aug. 21, 2013). In doing so, Judge Sleet examined the following factors: "(1) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether discovery is complete and a trial date has been set." Id. at 2 n.1 (quotations omitted). Regarding the first factor, Judge Sleet noted that any stay pending reexamination will delay final resolution of the case. Therefore, that fact alone is insufficient to establish that any prejudice from the delay is "undue." Id. As such, the court must look at "sub-factors," such as "the timing of the stay request"; "the relationship between the parties"; "the related question of whether the plaintiff may be compensated through future money damages": and "the status of the reexamination proceedings." Id. Judge Sleet determined that any delay will not result in undue prejudice or present a tactical disadvantage to plaintiff. In particular, Judge Sleet found that because the petition for reexamination and the motion to stay were filed early in the case, the Court could not conclude that defendant was attempting to gain an unfair tactical advantage. Id. Further, plaintiff's five-year delay of filing the case after it became aware of defendant's alleged infringement demonstrated that plaintiff did not consider "this to be a 'time of the essence matter' or that, absent expeditious litigation, he [would] suffer undue prejudice." Id. In addition, plaintiff could be compensated for any delay through money damages. Id.

Regarding simplification of issues, Judge Sleet determined that this factor favored a stay. "[R]egardless of the PTO's conclusion, the results of the reexamination proceeding will aid in simplifying or eliminating the overlapping issues before the court. Indeed, even if the PTO were to ultimately confirm all of the claims, the court would likely benefit from the expert analysis the PTO conducts, thus further simplifying issues before the court." Id. at 3 n.1. Judge Sleet determined that the early stage of the case also favored a stay, as no scheduling order had been entered and no trial date had been set. Id.

Judge Sleet also specifically rejected plaintiff's argument that defendant was "estopped from seeking a stay because it filed a counterclaim for declaratory relief pursuant to the Declaratory Judgment Act ('DJA')." Id. Judge Sleet noted:

Celorio [did] not cite any case law supporting his argument and instead provide[d] citations to cases detailing the parameters of the DJA and rules regarding binding admissions in responsive pleadings. None of the cases Celorio cite[d] suggested that once a party has filed a claim under the DJA, it should be barred from requesting a stay and the court [had] not uncovered such precedent.

Id.

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Posted On: August 21, 2013

Judge Andrews construes claims relating to telephone network technologies

In a recent claim construction opinion, Judge Richard G. Andrews construed seven terms from U.S. Patent Nos. 7,012,916; 7,206,304; 7,903,641; 8,170,008; 8,189,565; 8,204,046; and 8,223,752 (collectively, the “Low Patents”), which each relate to “facilitating the integration of traditional telephone networks with computer networks.” Comcast IP Holdings I, LLC v. Sprint Communications Company et al., C.A. No. 12-205-RGA (D. Del. Aug. 16, 2013). Judge Andrews also construed three terms from an unrelated patent, U.S. Patent No. 6,873,694 (the “’694 Patent”), which teaches “systems and methods to optimize a telephony network.” Judge Andrews construed the following seven terms from the Low Patents:

- “switched telecommunication system I telecommunication system”
- “requesting . . . a communication to be set up through the switched telecommunication
system”
- “telecommunications system control apparatus”
- “URI I uniform resource identifier (URI) I universal resource identifier (URI) I universe
resource name (URN)”
- “DNS-type database system I DNS-type distributed database system”
- “Domain name system signaling”
- “A substantial portion of the number string”

Judge Andrews also construed the following three terms from the ’694 Patent:

- "Dial-up prompt [parameter]"
- "Telephony parameter"
- "Telephone usage of the telephony network"

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Posted On: August 20, 2013

Judge Andrews denies motion to preclude expert but instructs defendant on the Court's preference for preserving objection at trial and renewing motion post-trial

Judge Richard G. Andrews recently denied defendant Par Pharmaceutical's motion to preclude the testimony of Plaintiff's expert. Novartis Pharms. Corp., et al. v. Actavis South Atlantic LLC, et al., C.A. No. 11-1077-RGA (D. Del. Aug. 16, 2013). Par raised three issues with the expert's testimony: "(1) the 'forced degradation' or 'stress' testing; (2) whether acetaldehyde or anything else is an antioxidant; and (3) why [the expert did] not address, or did not perform, other techniques." Id. at 1. Judge Andrews determined that the second and third issues were not appropriate under Daubert. Regarding the first issue, Judge Andrews noted that the Court's pre-trial "gate-keeper" function is not as important for a bench trial, and so, live testimony and cross-examination would more likely lead to a correct decision about whether the expert's testimony is appropriate under Daubert. Id. Judge Andrews denied Par's motion, instructing Par to preserve the objection at trial by making an objection during the expert's testimony. Judge Andrews further instructed that: "Failure to [object] at the appropriate time will result in the objection being waived"; that "[t]he Court will consider granting a continuing objection"; and that [t]he Court will only consider evidence actually adduced at trial (whether through cross-examination or testimony from other witnesses) in ruling on any renewed motion." Id. at 2.

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Posted On: August 19, 2013

Judge Robinson orders plaintiff to show cause why it should not be sanctioned for prosecution of allegedly frivolous, eventually withdrawn infringement claim.

Judge Robinson recently granted a motion to dismiss a § 285 counterclaim for attorneys’ fees relating to an allegedly frivolous and eventually withdrawn claim, but ordered the plaintiff to show cause why it should not be sanctioned under Rule 11 for its prosecution of that claim. Technology Innovations, LLC v. Amazon.com, Inc., Civ. No. 11-690-SLR (D. Del. Aug. 15, 2013). The plaintiff alleged infringement of two patents, one of which (the ‘407 patent) previously had been asserted in the Southern District of Texas. The defendant claimed that during the course of the litigation in Texas, the plaintiff agreed not to pursue the ‘407 infringement claim because of the “high unlikelihood of infringement.” Id. at 1-2. As a result, when the plaintiff asserted the '407 infringement claim in Delaware, the defendant moved for Rule 11 sanctions. Id. The Court denied that motion without prejudice as premature (previously discussed here). Almost a year later, after the defendant answered, filed counterclaims, and engaged in discovery regarding the ‘407 patent, the plaintiff amended its complaint to remove allegations relating to the ‘407 patent and to provide an affirmative statement of non-liability with respect to that patent. Id. at 2. The defendant answered and asserted a counterclaim under § 285 for attorneys’ fees in connection with the plaintiff’s continued prosecution of the withdrawn allegations. The plaintiff then moved to dismiss that counterclaim.

The Court reviewed the history of § 285, and cases applying it, and concluded that § 285 attorneys’ fees “can only be awarded after the substantive issues in the case have been resolved and the prevailing party has been determined.” Id. at 7. The Court therefore granted the motion to dismiss the § 285 counterclaim, since the “prevailing party” could not be determined until the claims relating to the other asserted patent were tried. Id. at 8. However, the Court noted that “Rule 11 is not circumscribed by the time-oriented limitations of § 285.” Id. at 8. Because the plaintiff continued to assert the ‘407 patent for nearly a year after the Court denied without prejudice the original motion for Rule 11 sanctions, the defendant was forced to respond to the complaint, file counterclaims, and engage in discovery during that time. As a result, Judge Robinson ordered the plaintiff to show cause why its filing of the eventually withdrawn '407 patent infringement claim was not sanctionable under Rule 11. Id at 9.

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Posted On: August 12, 2013

Judge Andrews Issues Post-Trial Opinion in Avodart ANDA Case

Judge Richard Andrews recently issued his post-trial opinion in an ANDA case concerning a patent covering Glaxosmithkline’s (GSK) Avodart, a drug used to treat enlarged prostate. The defendants, several generic drug companies, stipulated to infringement but challenged the validity of the patent-in-suit on the basis of written description and enablement, as well as anticipation. Following a bench trial in January, Judge Andrews found that the defendants failed to prove any invalidity defense by clear and convincing evidence and, therefore, found in favor of GSK on all issues. Glaxosmithkline LLC v. Banner Pharmacaps, Inc., et al., C.A. No. 11-046-RGA, at 1-3 (D. Del. Aug. 9, 2013).

Judge Andrews first addressed the lack of written description defense. The patent-in-suit claimed both the pharmaceutical compound itself and pharmaceutically acceptable solvates thereof. The defendants argued that the solvates were not adequately described in the patent. Judge Andrews found that the specification need not “independently describe crystalline, precipitated, and reacted solvates as subgroups of the genus of pharmaceutically acceptable solvates” because the claim recited “pharmaceutically acceptable solvates” and there was “no reason why a person skilled in the art would not credit a patentee with possession of a solvate merely because the patentee did not disclose solvates formed by each [of the three] solvation process[es].” Id. at 7-10. Judge Andrews also rejected the defendants’ argument that the Court’s construction of “pharmaceutically acceptable” required the specification to “make clear that the claimed solvates are sufficiently soluble, have sufficient dissolution rates, are physically and chemically stable, and can be produced consistently.” Judge Andrews explained that this interpretation of his construction was too strict and could not be combined with the “high unpredictability as to how a particular solvate form will behave in a body” to require to the specification to provide “specific information as to acceptable solvate forms to ensure the inventors actually possessed the invention.” Id. at 12-13.

Judge Andrews then considered the lack of enablement defense. Judge Andrews found that the quantity of experimentation necessary given the state of the art was not unduly high, because the difficulties cited to by the defendants were difficulties associated with “commercialization of a finished drug product . . . rather than demonstrating how to make a safe solvate with therapeutic effect.” He explained that “finished drug products . . . need not be enabled by the patent.” This factor, along with the amount of direction provided by the patent-in-suit, the defendants’ admission that the level of ordinary skill in the art is very high, and the fact that solvates are well known in the art supported a determination that the claims of the patent-in-suit were enabled. Id. at 22-27.

The defendants also argued the Merck had independently invented the compound at issue and that the patent-in-suit was thus anticipated. The defendants based this argument on a lab notebook, compound data sheet, and article evidencing Merck’s experimentation. But the defendants did not have inventor testimony from anyone at Merck, and Judge Andrews found that there was no evidence that Merck had independently conceived of the invention. The Merck experimentation could not, therefore, serve as an anticipatory reference. Id. at 28-33.

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Posted On: August 12, 2013

Judge Robinson grants motion for leave to amend induced infringement claim

Judge Sue L. Robinson recently granted plaintiff’s motion for leave to amend its complaint in E.I. Du Pont de Nemours & Co. v. Heraeus Precious Metals North America Conshohocken LLC, C.A. No. 11-773-SLR (D. Del. Aug. 8, 2013). The patent-in-suit relates to the manufacture of solar cells.

The Court had previously dismissed plaintiff’s induced infringement claim because plaintiff did not sufficiently allege specific intent to induce infringement or knowledge of infringement. Id. at 2. Plaintiff now moved to amend its complaint to cure these deficiencies. Id. “Defendant's sole dispute relate[d] to whether plaintiff's proposed amendment claims pre-suit induced infringement,” as plaintiff had originally only asserted a claim for prospective relief. Id. at 3. “To fix this alleged deficiency, defendant submits that plaintiff's proposed amendment be expressly time-limited in every sentence asserting an element of its induced infringement claim by adding ‘since the date [defendant] has been on notice of the [patent-in-suit].’” Id. (internal citations omitted).

The Court concluded that plaintiff’s proposed amendments sufficiently corrected deficiencies in the original claim, but also that these amendments did not allege that defendant knew of the patent earlier than the date of the complaint’s filing. Id. at 4-5. Therefore plaintiff’s claim was limited to the time period beginning at the filing of its complaint. Id. But “[d]efendant's argument that every sentence in the complaint alleging an element of induced infringement must indicate this temporal limitation [was] repetitive and unnecessary.” Id. at 5.

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Posted On: August 9, 2013

Judge Robinson denies motion to dismiss indirect infringement claims

Judge Sue L. Robinson recently denied Ricoh Company, Ltd.'s motion to dismiss Telecomm Innovations, LLC's indirect infringement claims. Telecomm Innovations, LLC v. Ricoh Company, Ltd., et al., C.A. No. 12-1277-SLR (D. Del. Aug. 6, 2013) (click here for a discussion of trends in the District of Delaware regarding pleading direct and indirect patent infringement). Plaintiff accused Ricoh's "fax-capable products" of infringement and, in support of its indirect infringement claims alleged that Ricoh provides "technical support and services, as well as detailed explanations, instructions and information as to arrangements, applications and uses, which induce defendants' customers to infringe the '519 patent through use of [the accused products]." Id. at 2. Plaintiff also alleged that Ricoh "specifically intended to induce infringement by its customers and others ... knowing that such acts would cause infringement and/or were willfully blind to the possibility that their inducing acts would cause infringement." Id. (alterations in original) (internal quotations omitted).

Ricoh argued that Plaintiff's indirect infringement claims did not pass muster because Plaintiff had "not pled with sufficient 'factual detail' that there was at least one direct infringer and that defendants knew of and specifically intended to induce infringement." Id. at 5. Judge Robinson noted that Plaintiff was "not required to specifically identify the customers who [were] induced to infringe, as this is a 'proper question for discovery.'" Id. Because Plaintiff pled that Ricoh's customers infringe the patent-in-suit, "the requirement for pleading facts to allow an inference that at least one direct infringer exists ha[d] been met." Id.

Regarding knowledge of the patent-in-suit, Judge Robinson found that Plaintiff's allegations that Ricoh received notice of the patent at least as early as the filing of the Complaint was sufficient to plead knowledge "for purposes of post-complaint relief." Id. at 6. Finally, regarding Ricoh's intent for their customers to infringe, Judge Robinson found that Plaintiff's allegations that Ricoh "provided technical support and instructions to their customers on how to use products in such a way as to infringe the patented invention" was sufficient to plead Ricoh's specific intent to induce patent infringement. Id at 6-8.

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Posted On: August 9, 2013

Judge Robinson finds that first-filed declaratory judgment action in Delaware should proceed; enjoins prosecution of litigation in other district.

Judge Sue L. Robinson recently granted a declaratory judgment plaintiff’s motion to enjoin a related infringement action filed in another district court. Nexans Inc. v. Belden Inc., Civ. No. 12-1491-SLR (D. Del. Aug. 6, 2013). The plaintiff in the Delaware action, Nexans, filed suit against the defendant, Belden, seeking a declaratory judgment of non-infringement and invalidity of three Belden patents, and asserting an affirmative claim alleging Belden infringed a Nexans patent. Id. at 1. Two days later, Belden filed suit in Indiana alleging Nexans infringed the same three Belden patents, as well as an additional patent not at issue in the Delaware litigation. Id. at 2. Just over a week later, Nexans amended its Delaware complaint to add the “additional patent” to its declaratory judgment action. Id. at 2-3. The result was that both the Delaware and Indiana cases involved allegations regarding the same four Belden patents, although the Nexans patent was at issue only in the Delaware litigation.

Belden moved to dismiss Nexans’ amended claim, arguing that because the additional patent was not the subject of the parties’ broken-down negotiations, there was no case or controversy with respect to it to support declaratory judgment jurisdiction. “According to Belden, the case or controversy with respect to the [additional] patent did not arise until Belden’s filing of the Indiana action . . . .” Id. at 5. The Court rejected that argument, explaining that “it was not the filing of the Indiana action that caused a case or controversy to arise out of the [additional] patent, but the same events that led to the filing of the original complaint that caused the case or controversy.” Id. at 6. That, the Court explained, was because Belden’s warning letter was not specific regarding which patents it believed Nexans infringed, and in subsequent discussions leading up to the filing of Nexans’ declaratory judgment action, the additional patent was mentioned. Id. at 6-7. A case or controversy also arose, the Court explained, because the technology covered by the additional patent was related to one of the patents at issue in Nexans’ original complaint. Id. (“When an actual controversy exists over one patent, it can also cover patents relating to the same technology between the same parties.”). The Court also found Belden’s litigation history with other parties relevant to the case or controversy question: Belden had filed three other suits alleging infringement of the additional patent by parties also alleged to infringe one of the patents at issue in Nexans’ complaint, so the Court found it reasonable for Nexans “to believe that the [additional] patent was related to the controversy between the parties.” Id. at 7. As a result, the Court denied Belden’s motion to dismiss the amended claim, which the Court found related back under Rule 15(c)(1)(B), meaning that the Indiana and first-filed Delaware litigation involved the same four Belden patents. Id. at 7, 8.

Because the litigations were mirror images with respect to Belden’s patents, Nexans sought to enjoin the Indiana litigation under the first-filed rule. Belden argued several exceptions to the first-filed rule existed, such that the Delaware litigation should be dismissed in favor of the Indiana case. Specifically, Belden argued that Nexans’ declaratory judgment action was anticipatory (or, in the alternative, was filed in bad faith during settlement negotiations) and was the result of forum shopping. The Court disagreed, finding that Nexans’ suit, filed 19 days after the parties’ Standstill Agreement expired and at a time when settlement negotiations had broken down, could not be considered anticipatory or in bad faith. Id. at 11. The Court also found that alleged forum-shopping was no reason to depart from the first-filed rule, explaining that it would not "characterize a plaintiff’s choice of venue as ‘forum shopping’ when, by essentially moving to transfer venue, a defendant is doing the same thing – choosing a venue that it believes to be more favorable to its claims for whatever reason.” Id. at 12. Finally, the Court was not convinced that any other considerations weighed in favor of departing from the first-filed rule, and explained that it made more sense to litigate in Delaware because “dismissal of the declaratory judgment claims in favor of the Indiana action would still leave Nexans’ affirmative claim for infringement of its patent in the instant action and require the parties to litigate in two separate courts.” Id. at 13. The Court therefore granted Nexans’ motion to enjoin the prosecution of the Indiana action. Id. at 13-14.

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Posted On: August 6, 2013

Special Master Lukoff issues supplemental decision regarding privilege log dispute

Having recently issued a decision relating to plaintiff’s privilege log on July 19, discussed here (“the July 19 decision”), Special Master Paul M. Lukoff issued a second Opinion and Order “devoted to two additional issues, as well as a continuation” of the issues in the July 19 decision. Robocast, Inc. v. Apple, Inc., C.A. No. 11-235-RGA; Robocast, Inc. v. Microsoft Corporation, C.A. No. 10-1055-RGA, slip. op. at 2 (D. Del. Jul. 30, 2013).

Special Master Lukoff first assessed which communications of a Canadian lawyer (Pozner) who functioned as plaintiff's Director of Business Development were protected by the attorney-client privilege. Judge Andrews had previously ruled that these documents were not privileged and ordered them produced, and plaintiff continued to withhold some of them. Id. at 1. But the Special Master concluded that, before Judge Andrews, the parties had not briefed the specific question now before him: whether plaintiff could still claim privilege where Pozner specifically functioned as a “conduit or adjunct to lawyers.” Id. at 2-3. Special Master Lukoff concluded that most of Pozner’s communications with attorneys were privileged as he was “actively engaged in securing, and integral to the consideration by [plaintiff] of, of legal advice.” Id. at 3-4. But where Pozner communicated with non-lawyers without outside counsel being party to these communications, “there was greater opportunity to find that his involvement, having already lost any patina of protection in terms of attorney-client privilege” due to Judge Andrew’s decision, “was for business rather than legal reasons.” Id. at 4.

Defendant also argued that there were more than 1,000 log entries that were inadequate under Rule 26(b)(5)(A) and their documents should be produced. Generally Special Master Lukoff found that plaintiff’s descriptions were sufficient as he “had no reason to doubt plaintiff’s counsels’ representation . . . they they’ve described as well as they can documents which they’re certain came from an outside law firm, but whose metadata . . . provided no further insights as to which firm and which attorney within that firm was the originator.” Id. at 4. Special Master Lukoff then conducted the same “item-by-item determination” present in the July 19 decision, as to whether the presence of third parties on these additional log entries waived privilege. See id. at 5-7.

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Posted On: August 2, 2013

Judge Stark finds claims of patent invalid under 35 U.S.C. § 101, grants motion for judgment on the pleadings

In buySAFE, Inc. v. Google, Inc., C.A. No. 11-1282-LPS (D. Del. Jul. 29, 2013), Judge Leonard P. Stark recently granted defendant’s motion for judgment on the pleadings under Rule 12(c), concluding that the asserted claims of the patent-in-suit, U.S. Patent No. 7,644,019 (“the ‘019 Patent”), were not eligible for patent protection under 35 U.S.C. § 101.

The '019 Patent relates to providing a guaranty service for online transactions. One of the two independent claims was a process claim, and the second independent claim required a “machine readable medium” capable of performing the process of the first claim. Id. at 1. Defendant argued that the asserted claims of the ‘019 Patent failed to meet Section 101’s subject matter eligibility requirements because they were an abstract idea. Id. at 3. The Court first addressed whether the claims were “tied to a particular machine or apparatus,” as directed by the “machine-or transformation” test. Id. at 4 (quoting Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010)). The Court concluded that they were not because the claims were capable of being performed without a computer, and “[a] method that can be performed entirely in the human mind is an abstract idea and is not eligible for patent protection.” Id. at 5 (citing Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011)).

The Court rejected all of plaintiff’s arguments for validity. First, the fact that the patent was “limited to online transactions” did not save it; in Cybersource, “the patent was also limited to online transactions – ‘a method for verifying the validity of a credit card transaction over the Internet’ - yet the Federal Circuit found the patent invalid under Section 101.” Id. (quoting Cybersource, 654 F.3d at 1370). Second, while plaintiff argued that the patent’s process could not be done mentally, the Court explained that “[m]erely using a computer to perform more efficiently what could otherwise be accomplished manually does not confer patent-eligibility.” Id. at 6. Third, a patent did not become patent-eligible by “explicitly reciting a ‘computer’ in each independent claim,” and these “claims [did] not provide any details as to how the computer is involved in the claimed process, or describe the significance of the computer to that process. In fact, the patent's process would be performed exactly the same way by a person and by a computer.” Id. at 6. Finally, the “temporal limitation” of the claims did not save their validity because “[t]he temporal limitation is not dependent on any specific programming, nor is it tied to any particular machine.” Id. at 7.

The parties had completed briefing last year and plaintiff had relied on the panel opinion in CLS Bank International v. Alice Corp. Pty Ltd., 685 F.3d 1341 (Fed. Cir. 2012), in which the Federal Circuit “reason[ed] that a claim that is drawn to a specific way of doing something with a computer is likely to be patent eligible whereas a claim to nothing more than the idea of doing that thing on a computer may not.” Id. at 7 (internal citations and quotation marks omitted). In May 2013 the Court ordered the parties to submit supplemental briefing on the effect of the en banc decision in this case, 717 F.3d 1269 (Fed. Cir. 2013), as that decision vacated and reversed the panel opinion. Id. at 1, 7. The en banc decision “reiterated the principle that simply appending generic computer functionality to lend speed or efficiency to the performance of an otherwise abstract concept does not meaningfully limit claim scope for purposes of patent eligibility.” Id. at 7-8 (internal citations and quotation marks omitted). The Court explained that “even under the reasoning of the CLS panel decision, the Court would have found the claims patent-ineligible because Plaintiff has not shown that the ‘019 patent claims are directed to any specific way of using a computer to guarantee a safe transaction. Rather, as described above, the claims are directed to a method that just happens to be performed by a computer. Under the now governing en banc decision in CLS, Defendant's argument for patent-ineligibility is even stronger.” Id. at 8.

Having applied the machine-or-transformation test, the Court then “examined more generally the abstract nature of the claims” as directed by the Supreme Court. Id. at 8 (citing Cybersource, 654 F.3d at 1371). It concluded that the ‘019 Patent was directed to “an abstract . . . process,” pointing out that “[t]he claimed concept is not directed to any specific device or system, is not limited to a concrete application, and is not limited to any specific industry. Allowing Plaintiff to patent the general concept of performance guaranties would effectively grant a monopoly over an abstract idea.” Id. at 8-9.

The Court also issued a claim construction opinion on the same day in this case, but that opinion had no impact on the Rule 12(c) motion. Id. at 1 n.1.

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Posted On: August 2, 2013

Judge Stark construes claims relating to once-daily formulations of tetracyclines.

Judge Leonard P. Stark recently issued a claim construction order relating to two patents claiming once-daily formulations of tetracyclines. Galderma Laboratories Inc., et al. v. Amneal Phamaceuticals, LLC, et al., C.A. No. 11-1106-LPS (D. Del. July 30, 2013). The following claim terms were construed by the Court:

“steady state blood levels of doxycycline of a minimum of 0.1 μg/ml and a maximum of 1.0 μg/ml”

“steady state blood levels of the doxycycline of between 0.3 μg/ml to 0.8 μg/ml”

“pellets”

“pellet”

“coated with at least one enteric polymer”

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Posted On: August 2, 2013

Judge Sleet issues claim construction order

In a recent order, Chief Judge Gregory M. Sleet construed eight disputed claims terms of U.S. Patent No. 7,567,925 (“the ’925 Patent”). Imagevision.net, Inc. v. Internet Payment Exchange, Inc., C.A. No. 12-054-GMS-MPT (D. Del. Jul. 30, 2013). The ’925 Patent, entitled “Point of service transaction management for service facilities,” relates to an invention that “enables the collection by credit/debit card payment of customer co-pay and self-pay charges via an integrated point-of-service transaction management system and method.” Judge Sleet construed the following eight disputed terms:

- “computing terminal”

- “computerized transaction database associated with each of the at least one processors for relationally and electronically tracking, within said database and by the single health care service provider, remotely from each of the at least one computing terminal”

- “the tracking correlates to an increased collection rate of at least one of the self-pay payments and the overdue self-pay payments from the at least one customer”

- “registration”

-“batch updated”

- “users of the system are assigned at least one level of access in the administrator”

- “patient service”

- “non patient service"

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Posted On: August 2, 2013

Judge Stark Releases Opinion on Privilege Assertions Regarding Mixed Legal and Business Advice Contained in Documents and at Depositions

In an opinion recently made public, Judge Leonard Stark granted in part and denied in part a motion for a protective order barring discovery of information subject to attorney-client privilege. In this patent infringement action relating to dynamic integrated circuits, a defendant asserted that the plaintiffs had improperly instructed multiple witnesses not to answer questions at depositions on the basis of privilege. After a lengthy meet and confer process and a hearing, Judge Stark instructed the parties to identify the specific privilege assertions being challenged and the plaintiffs to move for a protective order if necessary. Defendant Xilinx identified several privilege assertions that it wished to challenge, and Defendant Altera added four additional documents, described as the “Runway Reports,” which were “created in the ordinary course of business for potential or actual patent acquisitions.” Intellectual Ventures I LLC, et al. v. Altera Corp., et al., C.A. No. 10-1065-LPS, Memo. Op. at 1-2 n.2 (D. Del. July 25, 2013). The plaintiffs then filed a motion asking the Court for a protective order barring additional testimony in response to the disputed deposition questions and production of the identified documents. Id. at 1-2.

Judge Stark denied the motion for protective order with respect to the Runway Reports, but granted the motion in all other respects. Generally, the subject matter at issue was “communications related to the acquisition, due diligence, valuation, and licensing of the patents-in-suit,” which the defendants contended was not privileged “because Plaintiffs’ business model involves such activities.” Id. at 3-4. Patrik Edenholm, who works as a patent “finder” for the plaintiffs, was the first witness at issue. Judge Stark found that the assertions of privilege made during Mr. Edenholm’s deposition were proper because knowledge of the plaintiffs’ patent valuation process “while in this instance tied to business decisions of patent acquisition, may be intertwined with legal analysis, including considerations of claim scope, validity, and licensing power.” Id. at 5-6. The second witness at issue was Ryan Morrison, a transactional attorney who provided the plaintiffs legal advice related to patent acquisitions. The defendants sought information from Mr. Morrison about the contents of reports regarding patent assets under consideration for purchase and his thought processes in providing advice concerning patent due diligence. Judge Stark agreed with the plaintiffs that this information was privileged, stating that Mr. Morrison is an attorney and “to the extent that Mr. Morrison’s work and analyses also include business advice, this does not, under the circumstances, vitiate the attorney-client privilege.” Id. at 6-9. Judge Stark also noted that “[e]ven if Plaintiffs’ assertion of privilege were improper, the Court is not persuaded by [defendant’s] general argument that its inability to obtain discovery on due diligence and valuation is highly relevant to standing as well as to damages.” Id. at 8 n.6.

Judge Stark also reviewed certain privileged documents that had been disclosed to a Mr. Belgard, who was a consultant for the plaintiffs. Because Mr. Belgard was described as “an independent contractor” who had an “arm’s length” relationship with the plaintiffs, he was not “the functional equivalent of an employee” and thus not a “privileged person.” Id. at 9-11. Nevertheless, disclosure of documents to Mr. Belgard did not waive privilege with respect to those documents because he had a “common legal interest . . . in properly acquiring patents.” In adopting this position, Judge Stark rejected the defendant’s “application of the common interest doctrine [as] too narrow” in its position that the common legal interest doctrine applies only to attorneys. Id. at 11-12.

Judge Stark did, however, order production of the Runway Reports, which he found to be insufficiently supported by the plaintiffs’ “conclusory statement that the Runway Reports contain ‘attorney notes, attorney-client communications, and work product information.’” Judge Stark explained that “[t]he Court specifically ordered the parties to communicate so that neither party would waste time or effort briefing unchallenged privilege assertions. The Court concludes, regrettably, that the parties have failed to adequately communicate with each other to ensure that all parties were sufficiently apprised of all of the ripe privilege issues . . . While both sides are to blame for the lack of communication, the Court concludes that Plaintiffs were on sufficient notice that the Runway Reports were being put at issue . . . [and] have not met their burden of establishing privilege with respect to the Runway Reports.” Id. at 12-14.

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Posted On: August 2, 2013

Judge Andrews affirms Magistrate Judge Fallon’s decision denying motion to transfer

In a recent memorandum opinion, Judge Richard G. Andrews overruled defendant’s objections and affirmed Magistrate Judge Sherry R. Fallon’s decision denying defendant’s motion to transfer venue to the Northern District of California. Agincourt Gaming, LLC v. Zynga, Inc., C.A. No. 11-720-RGA (D. Del. Jul 29, 2013) (Magistrate Judge Fallon's decision previously discussed here). As a threshold matter, Judge Andrews concluded that “a motion to transfer is not a dispositive motion for purposes of [28 U.S.C.] § 636(b)(1),” and he “proceed[ed] to review the Magistrate Judge’s decision under the deferential standard of review of § 636(b)(1)(A).” Id. at 3.

Judge Andrews found that while “[i]t may be that more of the factors favored transfer than not, . . . the Magistrate Judge did not abuse her discretion in reaching a reasoned conclusion that all of the factors favoring transfer, taken as a whole, were insufficient to outweigh the deference owed under Third Circuit precedent to Plaintiffs choice of forum.” Id. at 3. As Judge Andrews explained, the Magistrate Judge gave considerable weight to Plaintiff’s choice of forum, which was reasonable given that both Plaintiff and Defendant are Delaware corporations.” Id.

Judge Andrews also addressed other findings of Magistrate Judge Fallon that defendant contested. For example, Judge Andrews found that defendant agreed during oral argument that it sells its products nationally, and thus it could not complain that Magistrate Judge Fallon concluded the “where the claims arose” factor was neutral. Id. at 4. Judge Andrews also affirmed Magistrate Judge Fallon’s finding with respect to the convenience of the parties, noting that the financial burden to defendant of litigating in Delaware would be relatively modest, but, on the other hand, defendant and its employees may be “called away from work.” Id. Judge Andrews further noted that “only non-party witnesses matter” under Third Circuit law with respect to the convenience of the witnesses, and he thus concluded that Magistrate Judge Fallon’s conclusion regarding that factor was not clearly erroneous. Id. at 4-5.

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Posted On: August 1, 2013

Judge Andrews construes terms of patents related to computer networking

Judge Richard G. Andrews construed the following claim terms of U.S. Patent Nos. 7,945,736; 7,948,921; and 7,630,295 that cover technology related to dynamic load management of network memory, automatic network optimization, and network device continuity:

"configured"
"data packet"
"communications interface configured to process the signal to activate and deactivate the link"

Riverbed Technology, Inc. v. Silver Peak Sys., Inc., C.A. No. 11-484-RGA (D. Del. July 30, 2013)

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