Articles Posted in Leonard P. Stark, Chief Judge

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Chief Judge Stark recently granted Defendant Trend Micro’s motion to transfer a patent infringement suit brought by Selene Communication Technologies to the Northern District of California. Considering the Third Circuit’s Jumara factors, His Honor found “that the factors, in total, weigh sufficiently strongly in favor of transfer.” Selene Commc’n Techs., LLC v. Trend Micro Inc., et al., C.A. No. 14-435-LPS, Memo. Or. at 1 (D. Del. Jan. 16, 2015).

Initially, Judge Stark explained that the plaintiff’s choice of forum and incorporation in Delaware were not dispositive. “[T]he deference to be given to Selene’s choice of forum is reduced because Selene’s principal place of business is in Shaker Heights, Ohio. Additionally, Selene was only created in 2011 and has only owned the patent-in-suit since July 2013.” Id. at 1-2.

On the other hand, the defendants’ choice of forum weighed in favor of transfer because one defendant is a California corporation and the other is a Delaware corporation, but both have significant operations in Cupertino, California. Thus, “Defendants have legitimate and rational reasons for their choice of forum, and therefore, it is entitled to weight, but not the same weight as Plaintiffs’ choice of forum.” Id. at 2. The location where the claim arose also weighed in favor of transfer because “research and development of the allegedly infringing products occurred primarily in the Northern District” of California and “the patent-in-suit was, until July 2013, held by . . . a California company with a principal place of business in Menlo Park, California, meaning that any harm from infringement prior to that date was suffered primarily in the Northern District.” Id. at 2-3. Additionally, the convenience of witnesses weighed in favor of transfer because, although there was no evidence that third party witnesses would refuse to testify without a subpoena, three of the four inventors reside in the Northern District. Id. at 3.

Judge Stark concluded: “The remaining Jumara factors are either neutral or slightly favor transfer. Overall, then, the Court concludes that Trend Micro has met its burden to show that the pertinent factors weigh strongly in favor of transfer.” Id. at 3-4.

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Chief Judge Stark recently denied a plaintiff’s Rule 60 motion to set aside a jury verdict.  Power Integrations, Inc. v. Fairchild Semiconductor Int’l Inc., et al., C.A. No. 08-309-LPS (D. Del. Jan. 13, 2015).  Judge Stark found the motion was untimely, coming more than 30 months after the verdict and 19 months after the Court’s rulings on post-trial motions.  Further, the Court found that the plaintiff had not identified any new evidence that existed at trial but were not discoverable at that time.  Rather, the Court explained the motion was based on evidence which came into existence after trial through events occurring in a related case and reexamination.

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Chief Judge Leonard P. Stark recently considered a motion dismiss plaintiff’s ANDA infringement action for lack of personal jurisdiction, applying the recent Supreme Court decision Daimler AG v. Bauman, 134 S. Ct. 746 (2014).  Acorda Therapeutics, Inc. v. Mylan Pharms. Inc., C.A. No. 14-935-LPS (D. Del. Jan. 14, 2015).  Judge Stark agreed that Daimler “altered the analysis with respect to general jurisdiction[,]” but unlike the recent decision by Judge Sleet, found that “Mylan Pharma consented to this Court’s exercise of personal jurisdiction when it registered to do business and appointed an agent for service of process in the State of Delaware.”  Id. at 1.  Regarding Mylan Pharma’s co-defendant and corporate parent, Mylan Inc., while it is not registered to do business in Delaware, Plaintiffs allege “a non-frivolous claim that Mylan Inc. used Mylan Pharma as its agent in connection with the ANDA filing giving rise to this litigation.”  Id. at 2.  Therefore, as to Mylan Inc., jurisdictional discovery was warranted.

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In ongoing litigation between Plaintiff Flatworld Interactives and Defendants Samsung and LG, Chief Judge Stark recently ruled on several summary judgment motions, in addition to construing the parties’ disputed claim terms in a separate opinion. Flatworld Interactives LLC v. Samsung Elecs. Co., Ltd., et al., C.A. No. 12-804-LPS, 12-964-LPS, Memo. Op. at 7-16 (D. Del. Dec. 31, 2014).

By their motion for summary judgment of invalidity, the Defendants contended that the patent-in-suit lacked written description because the claims contained a negative limitation that was not disclosed in the specification. As Judge Stark explained, “[u]nder§ 112(a), negative claim limitations are ‘adequately supported when the specification describes a reason to exclude the relevant limitation.’ ‘Such written description support need not rise to the level of disclaimer. In fact, it is possible for the patentee to support both the inclusion and exclusion of the same material.’” Id. at 9 (citations omitted). Judge Stark agreed that there was a negative claim limitation but found a question of fact as to whether the specification discloses that limitation to a person of ordinary skill:

“[T]he specification teaches a person of ordinary skill that once the image is removed from the screen, nothing related to it is left behind. The reason for excluding any representative of the removed image may be discerned from the specification. . . . At least certain of the specific embodiments disclosed, such as the ‘hide-and-go-seek’ function or ‘guessing game’ function, necessitate that not only the image itself but also any representative thereof be completely removed from the screen.”

Id. at 9-10. Judge Stark also granted the Defendants’ motion to strike a declaration filed in support of Plaintiff’s summary judgment motion because His Honor would have denied the motion for summary judgment even without consideration of the declaration. This “decision to strike the declaration [was, however,] without prejudice to Plaintiff’s ability to attempt to rely on [the declarant] at a later point in this case.” Id. at 7.

The Defendants also filed a motion for summary judgment to limit damages. The first issue implicated by this motion was whether the Plaintiff was required to mark embodiments of the patent-in-suit during the time in which the patent was undergoing reissue proceedings in the Patent Office. The parties cited no authority addressing this question, but the Plaintiff argued that marking could not be required because of the potential for false marking if the reissue resulted in no issued claims. Id. at 10-11. Based on 35 U.S.C. § 252, however, Judge Stark explained that “[t]he surrender of the original patent shall take effect upon the issue of the reissued patent. That is, a patent undergoing reissue remains in force during the reissue proceedings, and an accused infringer may be liable for infringing activity occurring during the reissue prosecution.” Id. at 11 (emphasis Court’s). “As a result,” the Court concluded, “§ 287 applied and required marking,” which “comports with the underlying purposes of § 287.” Id. at 11-12.

Judge Stark further found that there was no constructive notice of the patent-in-suit because the Plaintiff’s failure to mark the single embodiment of the patent-in-suit was not de minimis. The de minimis exception applies to “for example, failure by mistake to mark a few articles in hundreds of thousands made and sold” and for a “patentee whose compliance with the marking statute is nearly perfect.” Id. at 13 (citations omitted) (emphasis Court’s). Importantly, the pertinent comparison is between the number of marked and unmarked embodiments made, offered, sold, or imported by the patentee, not a comparison between the patentee’s and the accused infringers’ embodiments.” Id. at 14 (emphasis Court’s).

Finally, Judge Stark found that the evidence demonstrated that the Plaintiff did not provide actual notice to the Defendants. The Plaintiff’s only evidence of actual notice was a letter allegedly sent to the Defendants notifying them of the reissue proceedings of the patent-in-suit and inviting them to submit relevant prior art. “The letter does not mention infringement, or even a specific product. The letter cannot be read to constitute the required affirmative communication of a ‘specific charge of infringement’ by a ‘specific accused product.’ At bottom, the letter failed to provide actual notice.” Id. at 14-15.

Accordingly, the Court granted the summary judgment motion to limit damages: “[N]o reasonable juror could conclude that Plaintiff provided Defendants actual notice. In combination with the Court’s determinations that the notice obligation was not excused by the pendency of the reissue proceedings, and that Plaintiff also failed to provide Defendants constructive notice, the result is that Defendants’ motion for summary judgment to limit damages based on Plaintiff’s failure to mark must be granted. Plaintiff may only recover, at most, damages accruing after the date the complaint was filed in the respective actions against Samsung and LG.” Id. at 16.

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Chief Judge Leonard P. Stark recently issued a Memorandum Order on several of the parties various motions in limine filed in advance of an upcoming pretrial conference on January 9.  Intellectual Ventures I LLC v. Symantec Corporation, C.A. No. 10-1067-LPS (D. Del. Jan. 6, 2015).  Judge Stark granted plaintiff’s motions to preclude any evidence from defendant disparaging plaintiff’s business model and practices (such as referring to plaintiff as a “patent troll”), or disparaging the United States Patent and Trademark Office.  Id. at 1, 2.  Judge Stark also granted plaintiff’s motion to preclude reference to reexamination proceedings of the patent-in-suit because any probative value is outweighed by the risk of unfair prejudice and jury confusion.  Id. at 1-2.  Judge Stark granted defendant’s motion to preclude evidence of pre-suit knowledge of the patent-in-suit because “[n]o claims of willful infringement, indirect infringement, or copying will be the subject of the forthcoming trial.”  Id. at 3.

Plaintiff also requested that the Court order defendant to limit the number of prior art references, obviousness combinations, and witnesses it will present at trial.  Judge Stark denied the request noting that the parties can “make their own decisions as to how to make the best and most effective use of the limited, albeit sufficient, amount of time they will be given for their presentations at trial, which they are reminded will be no more than 20-24 hours per side.”  Id. at 3-4.

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In two opinions filed last week, Chief Judge Leonard P. Stark denied defendant’s motions for summary judgment of invalidity, non-infringement, and no standing in Transcenic, Inc. v. Google, Inc., C.A. No. 11-582-LPS (D. Del. Dec. 22, 2014) (“Standing Opinion” and “Invalidity/Noninfringement Opinion”).

As to invalidity and noninfringement, the motions largely constituted a “’battle of the experts that is not amenable to resolution prior to the presentation of evidence, including testimony,” Invalidity/Noninfringement Opinion at 3, and that genuine issues of material fact remained.

As to standing, the Court concluded that no valid assignment contract existed between the inventor and his employer (an alleged assignee), and even if there was one, the assignment obligation would not cover the patent-in-suit. Standing Opinion at 5-6. “[B]ecause [defendant] only present[ed] evidence regarding the relatedness of the patent-in-suit to [the business of the entity that later acquired the inventor’s employer], no reasonable juror could find that [the inventor’s] invention was related to the business of [the employer].” Id. at 6. As a result, defendant’s arguments as to lack of standing failed, and the Court granted plaintiff’s motion for summary judgment regarding the standing defense. Id.

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In Graphics Properties Holdings, Inc. v. Google, Inc., C.A. No. 12-1394-LPS; v. Lenovo Holdings Company, Inc., et al., C.A. No. 12-1397-LPS (D. Del. Nov. 20, 2014), Chief Judge Leonard P. Stark granted the defendants’ motion for leave to amend their answer to add an inequitable conduct defense, finding that the proposed amendment was not futile.  Id. at 2.

Defendants alleged that plaintiff withheld a Federal Circuit order during prosecution, which affirmed a construction of a term of a patent to which the patent-in-suit was a continuation.  Id. at 2-3.  Defendants further alleged that, had the PTO been aware of this order, it would not have permitted issuance of the patent-in-suit due to lack of written description or because this patent could not claim priority to the previously issued patent.  Id. at 3.  The Court concluded that the amendment was not futile.  While plaintiff had disclosed the District Court’s order regarding this term, and “[w]hile Plaintiff contends this alleged non-disclosure is not material, as the Federal Circuit Order is merely cumulative of the District Court Order, Defendants have articulated a plausible theory to the contrary.  The Amended Answer alleges that the Federal Circuit Order is material because it contained adverse statements not contained in the District Court Order” regarding what the patent’s specification did not cover.  Id. at 4.

Although the Court granted defendants’ motion, it declined to apply a recent decision on which defendants had relied.  Defendants argued that the Court’s recent decision in Masimo Corp. v. Philips Electronic North America Corp. stood for the proposition that an intentional failure to disclose a claim construction ruling inconsistent with the applicant’s position was indicative of inequitable conduct.  The Court declined to extend the holding of this case beyond the “particular circumstances” present there, but also found it “unnecessary to resolve the parties’ dispute as to just how much Masimo helps Defendants here.”  Id. at 5.

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In a recent Memorandum Opinion, Chief Judge Leonard P. Stark granted defendants’ motion to dismiss with respect to claim 1 of U.S. Patent No. 5,612,179 (“the ’179 patent”), after finding that claim to be directed toward a natural phenomenon, a category of unpatentable subject matter. Genetic Techs. Ltd. v. Bristol-Myers Squibb Co., C.A. No. 12-394-LPS (D. Del. Oct. 30, 2014). Judge Stark denied defendants’ motion to dismiss without prejudice to renew as the remaining asserted claims of the ’179 patent and the asserted claims of the other patent-in-suit, U.S. Patent No. 5,851,762 (“the ‘762 patent”).

While acknowledging that it was not precedential at the time of the Court’s decision, Judge Stark was nevertheless persuaded by the Federal Circuit’s decision in Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (Fed. Cir. 2013), which stated that “to grant dismissal of a patent infringement suit at the pleading stage for lack of patentable subject matter, ‘the only plausible reading of the patent must be that there is clear and convincing evidence of ineligibility.’” Id. at 6-7. Claim 1 of the ’179 patent was directed to a method of “amplifying and analyzing correlations between different regions of DNA sequence.” Id. at 10. Relying on the two-step framework set forth in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012), Judge Stark first determined that claim 1 recites a natural phenomenon, explaining that a “correlation that preexists in the human body is an unpatentable phenomenon.” Id. at 11. Next, Judge Stark considered whether there existed “additional steps in the claim . . . sufficient to satisfy patent eligibility.” Judge Stark found that the claim’s additional steps did not give rise to an “inventive concept” as to satisfy patent eligibility:

The asserted claim recites a series of steps to manifest the natural law – that is, to detect the natural correlations between coding and noncoding sequences. The added steps used to discern these correlations consist only of routine and conventional techniques. The patent specification states this outright, making this one of the (perhaps rare) occasions in which further factual development and claim construction are not necessary and invalidity can properly be determined at the 12(b)(6) stage.

 Id. at 13. Judge Stark therefore concluded that “the only plausible reading of claim 1 of the ’179 patent is that its additional steps, which consist only of routine and conventional techniques, fail to give rise to an ‘inventive concept,’ such that when, taken as a whole, the claim does not provide meaningful limitations that restrict the natural correlation to an application.” Id. at 14. Given the parties’ limited analysis in their briefing and during oral argument, Judge Stark stated that “the Court will require additional assistance from the parties to apply the foregoing analysis to the ’762 patent (and to the remaining claims of the ‘179 patent as well).” Id. at 20.

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In an open letter to Delaware counsel, Chief Judge Leonard P. Stark has provided clarification on the Court’s new 6 p.m. EST deadline for the filing and service of papers, which will become effective Thursday, October 16. Judge Stark explained that “the 6:00 p.m. Eastern Time deadline applies to every filing and service deadline in every case in the District of Delaware, other than initial pleadings.” Accordingly, “the 6:00 p.m. deadline applies to the exchange among parties of discovery requests and discovery responses, and it applies even if such requests or responses are made by hand delivery.”

Notably, Judge Stark also clarified that “[p]arties will not be permitted to alter the new deadline on a case-by-case basis.” To that end, Judge Stark further explained that “[w]hile each individual Judge retains the discretion to set a different deadline in a specific case with respect to a particular paper, the Judges of the Court agree that this discretion will be exercised rarely (most likely during trial).”

Judge Stark also noted that the new deadline does “not apply to proceedings pending in Bankruptcy Court,” but it “does, of course, apply to bankruptcy appeals and any other bankruptcy-related cases to the extent those cases are on the District Court’s docket.”

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In Graphic Properties Holdings, Inc. v. Asus Computer International, C.A. No. 13-864-LPS (D. Del. Sept. 29, 2014), Chief Judge Leonard P. Stark denied defendants ASUS Technology Pte Ltd. (“ASUS Singapore”) and ASUSTek Computer Inc.’s (“ASUS Taiwan”) (collectively the “Foreign Defendants”) motion to dismiss for lack of personal jurisdiction and improper venue. First, addressing the long-arm statute prong of the personal jurisdiction inquiry, Judge Stark resolved the issue of whether the Court would recognize a theory of “dual jurisdiction” (i.e., “stream of commerce”) based on “partial satisfaction” of subsections (1) and (4) of the Delaware long-arm statute, 10 Del. C. § 3104. Id. at 4-10. As Judge Stark explained, under a stream of commerce approach, jurisdiction exists when a “defendant displays ‘an intent to serve the Delaware market’ and ‘this intent results in the introduction of [a] product into the market and … plaintiffs cause of action arises from injuries caused by that product.’” Id. at 6. Because the Delaware Supreme Court has not provided an express opinion on this issue, Judge Stark’s role was limited to predicting how the Supreme Court would rule. Id. at 7. Considering that the (i) Delaware Supreme Court has refrained from rejecting the dual jurisdiction theory despite having several opportunities to do so; (ii) that “no Delaware state court has rejected the dual jurisdiction theory”; and (iii) that “Delaware’s long arm statute … is to be broadly construed to confer jurisdiction to the maximum extent possible under the Due Process Clause”, Judge Stark concluded the “Delaware Supreme Court, if faced with the issue, would hold that the ‘stream-of-commerce’ theory does provide a basis for personal jurisdiction under Delaware law, even though the theory is not expressly authorized by Delaware’s long-arm statute.” Id. at 8-9. Judge Stark reached this conclusion notwithstanding the fact that a fellow Judge of the Court reached a “contrary, and not unreasonable” conclusion regarding the stream of commerce theory. Id. at 6-7, 9 (citing Round Rock Research LLC v. ASUSTeK Computer Inc., 967 F. Supp. 2d 969 (D. Del. 2013)).

Applying the stream of commerce theory, Judge Stark explained that “[a] non-resident firm’s intent to serve the United States market is sufficient to establish an intent to serve the Delaware market, unless there is evidence that the firm intended to exclude from its marketing and distribution efforts some portion of the country that includes Delaware.” Id. at 9. In the instant matter, Judge Stark found evidence that the Foreign Defendants not only targeted the United States generally by selling to ASUS Computer International (“ASUS California”) in California, but that they also targeted Delaware specifically given that “there are least three physical resale outlets (Best Buy stores) inside Delaware that stock and sell the accused devices.” Id. at 10. Accordingly, Judge Stark found the long-arm statute prong satisfied.

Judge Stark also found the constitutional due process prong of the personal jurisdiction inquiry satisfied given that the “Foreign Defendants,by way of ASUS California, purposefully ship the accused devices into Delaware through established distribution channels such as Best Buy” and therefore “purposefully avail [themselves] of the privilege of conducting activities within [Delaware], thus invoking the benefits and protections of its laws.” Id. at 12-13.

While denying the motion to dismiss as of the date of the opinion, Judge Stark agreed with the Foreign Defendants’ assertion that “plaintiff only provided facts showing sales of accused devices in Delaware five months after the filing of the Complaint.” Id. at 14. Because a court “cannot base jurisdiction on events that occurred after the filing of [the] complaint” in view of the “arising under” language of Delaware’s long-arm statute, Judge Stark found that the Foreign Defendants will be required to show “[f]acts that the accused devices were on sale in Delaware prior to the filing of this suit” in order for the Court to sustain jurisdiction over the Foreign Defendants. Id. at 13-14. Judge Stark noted that the Court will be “prepared to reevaluate whether it can properly exercise jurisdiction over the Foreign Defendants as the case proceeds.” Id. at 14.

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