Articles Posted in Leonard P. Stark, Chief Judge

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Judge Stark recently considered Heartland’s motion to compel discovery on the subject of why Kraft and its agents failed to disclose the Ackilli reference to the PTO during prosecution of one of the patents-in-suit.  Kraft Food Group Brands, LLC v. TC Heartland, LLC, et al., No. 14-028-LPS-CJB (D. Del. July 25, 2016).  Judge Stark granted the motion, finding that Kraft intentionally waived attorney-client privilege when it responded to Heartland’s interrogatory, asking for facts of certain individuals’ awareness of the Ackilli reference and why he or she did not disclose the reference to the PTO, with information about what “what a single Kraft patent attorney [Ms. Mitchell] knew about Ackilli and why she did not disclose the application to the Patent Office.”  Id. at 1-3.  Judge Stark ordered the parties to submit additional briefs on the scope of such waiver as to other individuals:

given that Kraft has indicated that it may defend itself against Heartland’s inequitable conduct allegations by arguing that Kraft or its agents were unaware that Ackilli should have been disclosed, Kraft’s decision to put in the record evidence to support this view constitutes waiver of information about other individuals who may have had a different perspective.

Id. at 3.

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Judge Leonard P. Stark recently issued a memorandum order addressing a number of privilege log disputes.  Idenix Pharmaceuticals, Inc. v. Gilead Sciences, Inc., C.A. No. 13-1987-LPS (D. Del. July 20, 2016) (and related cases, C.A. No. 14-109-LPS and C.A. No. 14-846-LPS).  Among other rulings, Judge Stark found the following:

(1) a communication between a non-lawyer employee and another non-lawyer employee who was the “liaison with patent attorneys” was properly withheld as privileged.  Id. at 5.

(2) an email between non-lawyers that discussed the terms for engaging patent prosecution counsel was not privileged.  Id. at 5-6.

(3) a “scientific document” attached to a privileged email was not privileged.  Id. at 6-7.

(4) a non-lawyer employee’s email to other non-lawyer employees expressing views on a competitor’s patent was not privileged.  Id. at 9.

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Chief Judge Leonard P. Stark recently considered the parties’ stipulation requesting the Court vacate its Claim Construction OpinionForest Laboratories, Inc., et al. v. Teva Pharmaceuticals USA, Inc., et al., Nos. 14-121-LPS, 14-686-LPS (D. Del. May 25, 2016).  The Court held a 4-day bench trial in February 2016 and the 30-month stay of FDA approval for Defendant’s ANDA ended on June 21, 2016.  Id. at 1.  Judge Stark found that the “public interest in the orderly operation of the federal judicial system” weighed against vacatur, particularly considering that the Court’s Opinion held terms of several of the patents-in-suit indefinite and plaintiffs are asserting the patents in other litigation.  Id. at 3-4.  Vacating the Opinion would be “at the expense of the interests of other parties in other litigation and the Court itself.”  Id. at 4.

Forest Laboratories v. Teva Pharmaceuticals, No. 14-121-LPS

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In a recent Memorandum Order, Chief Judge Leonard P. Stark granted in part defendants’ (“AVX”) renewed motion for reconsideration of the Court’s January 5, 2016 rulings, which granted the following relief to plaintiff (“Greatbatch”): “(1) allowed Greatbatch to conduct post-trial discovery, (2) ordered AVX to produce a privilege log for all lngenio documents after trial, (3) vacated the Court’s prior grant of summary judgment of no willful infringement of [U.S. Patent No. 6,888,715 (“’715 patent”)], and (4) granted summary judgment that the Ingenio products infringe the ’715 patent.” Id. at 14-15. Greatbatch Ltd. v. AVX Corp., C.A. No 13-723-LPS (D. Del. Apr. 18, 2016) (public version published April 22, 2016). As Judge Stark explained, “[t]he relief granted in the Court’s January 5 Rulings was motivated in large part by (1) AVX’s late production of core technical documents less than two weeks before trial (AVX’s ‘December 29 Production’) and (2) AVX’s misrepresentation to the Court at the pretrial conference, which AVX later attempted to correct, in part, by way of AVX’s December 29 Production.” Id. at 15. Judge Stark also noted that “[c]rucially, the relief the Court granted in its January 5 Rulings was also the product of AVX’s repeated late production of core technical documents and the fact that just days remained before trial was scheduled to begin.” Id.

Judge Stark denied AVX’s renewed motion for reconsideration with respect to issues (1)-(3) listed above. Judge Stark did, however, grant AVX’s renewed motion for reconsideration with respect to the fourth issue, the court’s grant of summary judgment that the Ingenio products infringe the ’715 patent. See id. at 20. Judge Stark explained that upon consideration of the relevant factors the “appropriate sanction is not the dispositive sanction of summarily deciding the ’715 infringement issue against AVX.” Id. at 23. Rather, “the lesser sanction of depriving AVX of the opportunity to try damages and validity with respect to the ’715 patent at the same trial at which infringement of the ’715 patent is at issue, and instructing the jury determining damages to assume infringement of the ’715, more appropriately balances the multiple, competing interests implicated by a difficult situation of AVX’s making.” Id. Judge Stark further explained that “[t]he degree of prejudice that would have resulted to Greatbatch were it not for the relief granted would have been great. Yet the remedy the Court has arrived at adequately ameliorated that prejudice, by not requiring Greatbatch to divert its trial preparation as a result of AVX’s December 29 Production and by permitting Greatbatch to proceed to prove its damages case concerning the ’715 patent based on an assumption of infringement.” Id. at 24. Judge Stark concluded that “[o]n the whole, the Court regards this result as a less severe punishment than was imposed in connection with the January 5 Rulings but one that nonetheless avoids substantial unfairness to Greatbatch while serving to deter conduct similar to AVX’s by others in the future.” Id.

Judge Stark finally denied AVX’s request to reopen discovery with respect to damages. See id. at 25.

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In Walker Digital, LLC v. Google, Inc., C.A. No. 11-318-LPS (D. Del. Apr. 12, 2016), Chief Judge Leonard P. Stark considered Defendant’s Motion for Review Taxation of Costs, where it had requested over $80K but had been awarded less than $3K by the Clerk of Court.  Chief Judge Stark granted the motion, finding the award of costs for depositions, a technology tutorial, conversion to TIFF images in production, and obtaining hearing transcripts to be an appropriate exercise of the Court’s discretion.

As a threshold matter, the Court interpreted Local Rule 54.1 as allowing such a motion by the prevailing party in a case.  Plaintiff argued it was procedurally improper as Defendant was not “the opposing party” to receiving costs, but the Court explained that Defendant “is the aggreived party with respect to the portion of the Clerk’s taxation decision to which [Defendant] has filed its motion.  In this context, then, [Defendant] is ‘the opposing party’ with respect to the Clerk’s decision – even though [Defendant] is not, of course, ‘the opposing party’ with respect to [its] own Bill of Costs.”  Id. at 5.

Also included in the decision is Chief Judge Stark’s discussion of the importance of Markman technology tutorials.  Plaintiff had argued that Defendant’s costs related to the creation of its  technology tutorial were not appropriate because Defendant had not identified how the tutorials had aided the Court.  But Chief Judge Stark, in awarding the costs, observed that “[i]n almost every patent case, the undersigned judge requires the submission of technology tutorials as they aid this Court in understanding the technological context in which particular claim construction disputes must be resolved. In every case in which technology tutorials are ordered and submitted, the Court relies on them, just as it relies on the parties’ claim construction briefing.”  Id. at 10.

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Chief Judge Leonard P. Stark recently denied a motion for sanctions under 35 U.S.C. § 285 in a series of cases presenting a “difficult, close call.”  Princeton Digital Image Corp. v. Office Depot Inc., C.A. No. 13-239-LPS (D. Del. Mar. 28, 2016) (and related cases).  Although the Court denied the motion, it found a number of factors weighed in favor of finding the case to be “exceptional” for purposes of § 285, while others weighed against such a finding or were neutral.  As Judge Stark explained:

The Court makes this finding not due to the lack of merit to PDIC’s case, nor due to bad faith litigation.  Instead, these cases “stand out from the rest” due to a combination of: an adequate but far from ideal pre-suit investigation, conducted with haste due to decreasing damages availability based on an expired, but seemingly strong and broad, patent; somewhat careless, dilatory litigation conduct by the patentee; an attempt by the patentee to shift some substantial portion of the costs of identifying the line between licensed and non-licensed conduct to Defendants and Adobe; intervention, permitted by the Court, by an aggressive intervenor, despite PDIC’s repeated (though at times hard-to-believe) protestations that PDIC had no intent to accuse any licensed conduct of infringement; PDIC’s unexplained delay in dismissing at least one of the above-captioned cases; and PDIC’s failure to carefully, consistently, and thoroughly respond to Adobe’s reasonable inquiries as well the Court’s questions.  The overall balance, therefore, leads the Court to find that these cases are “exceptional.”

However, the Court decided that under the circumstances the “appropriate exercise of its discretion” was “not to award attorney fees.”  In part that was based on the aggressive intervenor, Adobe, itself causing increased attorney fees.  Additionally, Judge Stark explained, “[w]ith respect to considerations of deterrence, although PDIC could have done more to advance the litigation much more efficiently, there is no singular category of conduct that rises to a level that would warrant deterrence by way of an award of attorney fees.  There is no evidence of bad faith or otherwise sanctionable conduct.”  The Court added, “[i]n many ways, PDIC’s somewhat careless and dilatory conduct was a result of the unique circumstances of these cases, involving an aggressive third-party intervenor, two motions for sanctions before the case even got to the discovery phase, and a flurry of motion practice based on wholly-undeveloped theories of license interpretation and patent infringement.  Id. at 41 (emphasis in original).  For the same reasons, the Court found that Rule 11 sanctions were not warranted, and the lack of bad faith precluded an award of sanctions under 28 U.S.C. § 1927.

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In a recent Memorandum Order, Chief Judge Leonard P. Stark denied foreign defendant API Korea Co., Ltd.’s (“API”) renewed motion to dismiss the second amended complaint for lack of personal jurisdiction. Robert Bosch LLC, v. Alberee Products, Inc., et al., C.A. No. 12-574-LPS (D. Del. Mar. 17, 2016) (public version published Mar. 25, 2016). The Court had previously granted plaintiff’s (“Bosch”) request for jurisdictional discovery with respect to API.

Judge Stark first rejected Bosch’s argument that “jurisdictional discovery . . . revealed evidence that API has an agency relationship” with U.S. defendants Alberee Products, Inc. (“Alberee”) and Saver Automotive Products, Inc. (“Saver”). Id. at 2-5. Accordingly, Judge Stark did not attribute Alberee or Saver’s jurisdictional contacts to API. Id. at 5. Moreover, while Bosch also argued for an “alter ego” relationship, Judge Stark found that Bosch failed to “point to any fraud or inequity which would allow the Court to ‘pierce the corporate veil.’” Id. at 3 n.2.

Judge Stark did, however, find that the Court may exercise dual jurisdiction over API pursuant to Delaware’s long-arm statute. Id. at 6. Specifically, Bosch asserted a theory of “dual, or stream-of-commerce, jurisdiction based on subsections c(1) and c(4) of Delaware’s long-arm statute.” Id. at 5. Judge Stark reasoned that in the “absence of any evidence that API intended to exclude Delaware from the U.S. distribution of the finished wiper blade products containing the API components, the Court finds that API had an intent to serve the Delaware market, and it is undisputed that this cause of action arises from injuries caused by those products.” Id. at 5-6. Judge Stark also found the exercise of jurisdiction over API based on the stream-of-commerce comports with the requirements of Due Process. Id. at 8. Judge Stark explained that “jurisdictional discovery has revealed evidence supporting an inference ‘that the distribution channel formed by [API, Alberee, Saver, and Costco] was intentionally established, and that defendants knew, or reasonably could have foreseen, that a termination point of the channel was [Delaware].’” Id. at 7. As Judge Stark noted, “[t]his goes beyond evidence of mere foreseeability that API’s components would be sold in Delaware. Rather, API had knowledge that its components were used by Alberee in finished products sold to Saver for distribution through nationwide retailers such as Costco.” Id.

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Chief Judge Leonard P. Stark recently considered and denied Sunovion Pharmaceuticals’ motion to dismiss Cipla’s claims for indirect and willful infringement.  Cipla Ltd. v. Sunovion Pharmaceuticals Inc., C.A. No. 15-424-LPS (D. Del. Mar. 30, 2016).  Regarding inducement, Judge Stark concluded that the complaint sufficiently stated a claim because it alleged facts giving rise to a reasonable inference that users of the accused product directly infringe the patent in suit, and that defendant’s induced third parties to infringe by alleging defendant sells the accused product who it reasonably infers will use the product.  Id. at 3-4.  Further, the complaint alleges that defendant “knew or should have known that its actions would induce actual infringement.”  Id. at 4.  “Because the patented compound is (allegedly) the only active ingredient in [the accused product], one can reasonably infer that any use of [the product] will constitute infringement.”  Id.  Regarding contributory infringement, Judge Stark concluded the complaint passed muster because it adequately alleged that defendant sold a product practicing the patent, that the product has no substantial non-infringing uses, and that defendant knew its product would infringe.  Judge Stark also concluded that plaintiff’s willfulness allegations were sufficient because the complaint alleged that defendant had knowledge of the patent in suit and manufactures a product that contains the patented compound.  Id. at 6.

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Chief Judge Leonard P. Stark recently denied defendants’ motion to stay pending ex parte reexamination of the patent-in-suit.  Cronos Technologies, LLC v. Expedia, Inc., et al., C.A. No. 13-1538-LPS, 13-1541-LPS, 13-1544-LPS (D. Del. Mar. 21, 2016).  In doing so, Judge Stark addressed the factors relevant to whether a stay is warranted.  As to whether a stay would simplify issues, Judge Stark noted that this factor was neutral because, although all asserted claims were before the PTO, there was not complete overlap between the invalidity issues addressed by this Court and those by the PTO.  Id. at 2.  Regarding timing, Judge Stark noted that this factor weighed against a stay because the reexamination was at its early stages while trial was set in this Court for August 2016.  Id.at 3.  Last, regarding any delay in requesting reexamination, Judge Stark noted that plaintiff’s status as a non-practicing entity reduced prejudice it might suffer from a stay, but because defendants will not be estopped from raising the same invalidity defenses raised during reexamination, a stay may give them “‘two bites at the apple'[.]”  Id.  at 4.

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Chief Judge Leonard P. Stark recently considered Symantec Corp.’s Motion for Judgment as a Matter of Law on noninfringement, invalidity and damages following a 10-day jury trial in January 2015 resulting in a plaintiff verdict.  Intellectual Ventures I LLC v. Symantec Corp., C.A. No. 10-1067-LPS (D. Del. March 10, 2016). Judge Stark denied the motion in all respects.  Of note, with regard to damages, Judge Stark found that substantial evidence supported the application of the Entire Market Value Rule and the jury’s damages award of $8 million.  Id. at 7.  In particular, Judge Stark noted that plaintiff “presented substantial evidence that virus detection and prevention in the cloud – the infringing component of the accused products – drives the basis for consumer demand for Symantec’s accused products.”  Id. at 7-8. For example, plaintiff’s damages expert testified that the patented component drove demand for the entire multi-component product; plaintiff’s infringement expert testified about the importance of the infringing component, testimony corroborated by Symantec’s documents; and both experts testified that Symantec would not have been able to sell the accused products without the patented technology.  Id. at 8.   Judge Stark noted that the law does not require that the infringing component solely drive demand.  Id.

 

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