Articles Posted in Leonard P. Stark, Chief Judge

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Chief Judge Stark recently issued a claim construction order involving both alleged means-plus-function claims and a limiting preamble. With regard to the term “cavity forming structure,” Judge Stark found that “the claim language is sufficiently definite and provides sufficient structure for the basic function of ‘forming a cavity’” and that “Defendants have not put forth any expert testimony or other evidence to support their contrary view.” Accordingly, Judge Stark found the term should not be construed under § 112 ¶ 6. Orthopoenix LLC v. Dfine Inc., et al., C.A. No. 13-1003-LPS, Memo. Or. at 2 (D. Del. Feb. 2, 2016). Judge Stark also considered whether the claim preamble “a device for insertion into a vertebral body to apply a force” was limiting and determined that it was because it “provide[s] the antecedent basis for at least the ‘for capable of compacting cancellous bone and moving fractured cortical bone’ referred to in the claim.” Id. at 7.

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In a recent Memorandum Opinion, Chief Judge Leonard P. Stark issued a claim construction construing claim terms across seven of the eight patents-in-suit in this ANDA litigation. Forest Laboratories, Inc. et al. v. Teva Pharmaceuticals USA, Inc. et al., C.A. Nos. 14-121, 14-200, 14-508, 14-686, 14-1058, 14-1271-LPS (D. Del. Jan. 5, 2016). Among the terms construed, Judge Stark found two terms indefinite. First, Judge Stark found the term “change in memantine concentration as a function of time (dC/dT) that is less than 50% that of an immediate release dosage form comprising the same dose of memantine as the composition” indefinite. Judge Stark explained that “[a]s indicated in the claims, memantine concentration must be observed ‘as measured in a single-dose human PK study.’” Id. at 16. Judge Stark found that “[a] person of ordinary skill in the art would not know, with reasonable certainty, which ‘human PK study’ on which to rely when considering whether a formulation of memantine might infringe the [patents at issue].” Id. Judge Stark explained that the patents at issue “provide[] no guidance, other than non-limiting examples, regarding which concentration profile (or set of profiles) should be used when assessing potential infringement.” Id. at 16-17. Indeed, as Judge Stark noted, “[t]he specifications of the [patents at issue] do not disclose any human PK study. Rather, they disclose memantine concentration data generated from computer simulations.” Id. at 17. Judge Stark also found the term “change in plasma concentration as a function of time (dC/dT) in a defined time period of 0 to 6 hours after administration … that is less than about 50% of the dC/dT provided by the same quantity of an immediate release form of memantine in said defined time period” indefinite for the same reasons discussed above with respect to the “memantine concentration…” term. Id. at 20. Specifically, “the ‘human PK study’ limitation (which is present in all of the claims containing this term) does not give a POSA the required ‘reasonable certainty.’” Id. at 20.

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In a recent Memorandum Order, Chief Judge Leonard P. Stark granted defendants’ cross motion for partial judgment on the pleadings based on lack of subject matter jurisdiction over the parties’ declaratory judgment claims and affirmative defenses relating to the existence of an implied license (“implied license claims”), and thus dismissed the implied license claims without prejudice. S3 Graphics Co., Ltd. v. ATI Technologies ULC, et al., C.A. No. 11-1298-LPS (D. Del. Dec. 11, 2015). As Judge Stark explained, “[a]n implied license is an affirmative defense to a claim of patent infringement,” and “the parties agree[d] that this case does not involve any allegations of patent infringement.” Id. at 3. Accordingly, Judge Stark concluded that “there is no case or controversy, and the Court must dismiss the parties’ implied license claims.” Id. Judge Stark reached a similar conclusion with respect to “the implied license portion of [plaintiff’s] claim for injunctive relief.” Id. at 4. That is, just as the Court lacks subject matter jurisdiction to determine whether defendants have an implied license to the patents at issue, Judge Stark also found that the “Court lack[s] subject matter jurisdiction to provide [plaintiff] the remedy it requests relating to that claim.” In the same Memorandum Order, Judge Stark also denied plaintiff’s motion for reargument and motion to inspect as moot.

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Chief Judge Stark recently denied a motion to stay patent litigation while the defendant pursues an appeal of the PTAB’s decision not to institute inter partes review of the sole asserted claim of the patent-in-suit. Of the factors typically considered in the stay analysis, Judge Stark found that each weighed against a stay. Greatbatch Ltd. v. AVX Corp., et al., C.A. No. 13-723-LPS, Memo. Or. at 1 (D. Del. Dec. 10, 2015).

First, “the Court note[d] that Defendants filed their petition for IPR on the last day permitted by statute. Moreover, Defendants delayed moving for a stay until after completion of discovery, after completion of the parties’ briefing for summary judgment and Daubert motions, almost a year after the PT AB instituted IPR, and less than two months before the pre-trial conference. While delay, by itself, is insufficient to find undue prejudice, here Defendants’ delay in combination with the parties’ status as competitors (or potential competitors) persuade that Court that this first factor weighs against a stay.” Id. at 2.

Second, “the IPR was not instituted as to claim 12, and the PTAB’s final written decision did not directly address claim 12. Any appeal from the PTAB’s decision will also not directly address claim 12. . . . Because the Court already has the benefit of the PT AB’ s final written decision, and because any forthcoming insight regarding the validity of claim 12 from the Federal Circuit or reissue proceedings is wholly speculative at this point, the Court determines that this factor weighs against a stay.” Id. at 3.

Finally, “the Court notes that discovery is complete, the Court has construed the disputed claim terms and ruled on the parties’ multitude of motions, the pretrial conference is less than two weeks away, and a jury trial (which has been on the schedule since April 2014) begins in a month (January 11, 2016).” Id. Moreover, “[t]he discovery process involved at least five discovery teleconferences, an indication of the vast amount of party and judicial resources that have been expended on this litigation, factors that in the overall balancing here – favor staying on course and proceeding to trial on all of the remaining patents-in-suit.” Id. at 3 n.3.

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Chief Judge Leonard P. Stark recently issued a Memorandum Opinion adopting the Magistrate Judge’s Report and Recommendation on claim construction and denying defendants’ requests for summary judgment on indefiniteness post-Nautilus.  Masimo Corporation v. Philips Electronics North America Corporation, et al., C.A. No. 09-80-LPS (D. Del. Dec. 1, 2015).  First, defendants argued that the term “said scan” was indefinite because, due to a drafting error, the claim contained no antecedent basis for “said scan.”  Id. at 9.   Masimo argued that “the error [could] be corrected and that, even absent correction, a person having ordinary skill in the art would understand ‘said scan’ to refer to the result of the analysis module.”  Id.  The Court agreed with defendants that the Court cannot fix the drafting error.  But, the Court also found that the error does not render the term indefinite:

The prosecution history makes clear that Plaintiffs amendment did not seek to substantially change the scope of the claim. Indeed, the ‘”scan module” in the original claim has the same functionality as the “analysis module” in the amended claim. Given the identical claim structure and the context of the amendment, the Court concludes that a person having ordinary skill in the art would understand that “said scan” means “the analysis to qualify the plurality of indication values to be considered as possible resulting indications for the physiological parameter. “

Id. at 11.

Defendants also argued that the term “determine a resulting indication that likely most closely correlates to the physiological parameter” was indefinite.  Id. at 12.  The Court disagreed:

The specification explains how to calculate two estimates of the physiological parameter (saturation values) and teaches how the invention uses the two estimates to arrive at a resulting indication. Plaintiff has also submitted an expert declaration, which further supports its position, and which (at minimum) shows a genuine dispute of material fact preventing the Court from granting summary judgment of invalidity due to indefiniteness.

Id.

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Chief Judge Leonard P. Stark recently issued the Court’s claim construction opinion for the disputed terms of U.S. Patent No. 8, 316,445, titled “System and Method for Protecting Against Malware Utilizing Key Loggers.”  Trusted Knight Corporation v. International Business Machines Corporation, et al., C.A. No. 14-1063-LPS-CJB (D. Del. Nov. 19, 2015).  Judge Stark found two claim terms invalid as indefinite.  Judge Stark found the term “in response to the software key logging through the API stack to an internet communication port” indefinite because “it is unclear what action is performed ‘in response to the software key logging.'”  Id. at 8 (emphasis in original).  The Court found the second term indefinite after determining it was missing the verb “is.”  Id. at 11.  Corrected, the term would read “a process of passing the encrypted data to a 3-ring level where a hook is inserted by a hook-based key logger.” Id. (emphasis in original).  Judge Stark determined that the Court could not correct the term because Plaintiff’s proposed correction was the “subject of reasonable debate.”  Id.at 12.

Making Plaintiffs requested correction . . . would appear to make this limitation operative only in response to a hook (i.e., a form of malware) being inserted. Yet the specification – and, as noted in connection with the preceding term dispute, Plaintiff as well – states that the claimed invention operates even in the absence of malware (i.e., without a hook being inserted by a hook-based key logger). This seeming contradiction and, at minimum, ambiguity – demonstrate that Plaintiffs proposed correction to the claim language is subject to reasonable debate.

Id. (emphasis in original).  Judge Stark also noted that other corrections were feasible.  As such, the Court could not correct the claim term and, uncorrected, a person of ordinary skill in the art would not know the meaning of the term with reasonable certainty.  Id. at 12-13.

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Chief Judge Leonard P. Stark recently considered Plaintiff S3 Graphics’s motion for partial summary judgment on patent ownership and license, and the parties’ motions to preclude expert testimony.  S3 Graphics Co., Ltd. v. ATI Technologies, ULC, et al., C.A. No. 11-1298-LPS (D. Del. Oct. 21, 2015).  In support of its motion for summary judgment, S3 Graphics argued that summary judgment that it owns the disputed patents was appropriate because a January 2001 assignment “unambiguously assigned all rights” in the patents to S3 Graphics.  Id. at 13.  Defendants, on the other hand, argued that the patents were in fact assigned to defendant ATI by virtue of a March 2001 asset purchase agreement.  Id.  And, even if the January 2001 Assignment did assign the rights in the patents to S3 Graphics, defendant ATI was a “bona fide purchaser without notice” so, pursuant to 35 U.S.C. § 261, the assignment was void as against Defendants.  Id.  Applying settled principles of Delaware contract law, Judge Stark interpreted the unambiguous contract terms to find that the 2001 assignment explicitly conveyed to S3 Graphics “the full and exclusive right, title, and interest in” the patents .  Id. at 13-15.  Judge Stark also rejected Defendants argument that they became subsequent purchasers without notice by virtue of the March 2001 asset purchase agreement.  Judge Stark interpreted the unambiguous terms of the March 2001 assignment to find that it does not include the disputed patents.  Id. at 18-25.  Judge also found in S3 Graphics’s favor on the issue of whether Defendants have an express license to the patents, but denied summary judgment as to the issue of implied license.  Id. at 26-30.

Judge Stark also excluded the portions of Defendants’ expert report “directed solely to whether the various contractual provisions at issue” establish who owns the disputed patents because the Court “resolved this issue as a matter of law.”  Id. at 45.  Judge Stark determined, however, that other parts of the expert report were relevant to the issue of implied license which will go forward to trial.  Id.  Judge Stark also excluded portions of S3 Graphics’s expert’s report relevant to what assets ATI acquired through the asset purchase agreement.  Judge Stark found that the expert was not qualified as an expert on contract interpretation and “never even read the APA.”  Id. at 49.

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In a recent Memorandum Order, Chief Judge Leonard P. Stark adopted in part defendants’ objections to Magistrate Judge Burke’s Report and Recommendation (“the Report”) dated July 15, 2015 (discussed here), which recommended that defendants’ motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) for failure to claim patentable subject matter under 35 U.S.C. § 101 should be denied. Execware, LLC v. BJ’s Wholesale Club, Inc., C.A. Nos. 14-233, 14-234, 14-235, 14-240-LPS (D. Del. Sept. 30, 2015). Judge Stark explained that defendants’ objections are sustained to the extent “they challenge Judge Burke’s conclusions that claim 1 is not directed to an abstract idea and that claim 1 contains an ‘inventive concept.’” Id. at 3. Judge Stark first disagreed with the Report’s approach of “presum[ing] that the claims are to be construed in the manner most favorable to Plaintiff.” Judge Stark found the approach improper in this particular instance because defendants’ motions could be denied based on constructions “that . . . turn out to be incorrectly less favorable to Defendants than the constructions that will ultimately be adopted after formal claim construction takes place.” Id. at 4-5.

Judge Stark also found that “[c]laim construction is necessary in this case before determinations can be made under either step of the Alice inquiry.” Id. at 6. Judge Stark noted that the Report invoked the “most favorable” standard four times in its “step-1 analysis under Alice.” Id. at 7. Judge Stark thus found “[b]ecause the claim meaning is apparently uncertain enough to turn on multiple uses of this standard, and because the parties were not afforded an opportunity to explain why it may or may not be appropriate to read in limitations from the specification into certain of the steps comprising claim 1, . . . formal claim construction is necessary before deciding whether claim 1 is directed to an abstract idea.” Id. As to the second step of Alice, Judge Stark noted, among other things, that “the Report does not give any reasons why, when this claim term is eventually construed, it will be construed with limitations read into it from the specification.” Id. at 9-10. Judge Stark ultimately denied defendants’ motions to dismiss without prejudice to renew as summary judgment motions after claim construction and discovery have taken place. Id. at 11.

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Chief Judge Stark recently denied a motion for attorney’s fees under § 285. As listed by the Court, Defendants’ factual basis for seeking fees included that Plaintiff “was ‘on notice’ as to doubts about its ‘standing to sue’ early in the litigation, but made no attempt to demonstrate that it possessed ‘all substantial rights’ in the asserted patents . . . continued litigating after the Court dismissed Plaintiff’s Complaint for lack of standing . . . [and] caused Defendants to incur over three million dollars in ‘attorneys’ fees and costs.’” Clouding IP, LLC v. EMC Corp., et al., C.A. No. 13-1455-LPS, Memo. Or. at 2 (D. Del. Sept. 30, 2015). Judge Stark found that the Plaintiff had presented a good faith reading of the patent purchase documents and that “Plaintiff had a good faith, though ultimately incorrect, belief that it had standing to suethroughout the litigation. In particular, the Court agrees with Plaintiff’s statement that ‘[i]t is illogical to believe that [Plaintiff] would incur the significant tie and expenses associated with patent litigation all the while believing that it lacked standing, especially because a party can challenge standing until the last moments of a case.” Id. at 4. His Honor concluded, “[a]s long as the test for awarding attorney fees turns on whether the case is ‘exceptional,’ the Court is obligated to consider the instant case in comparison to the full panoply of patent cases with which it has been involved, and needs to assess if the instant case is in some meaningful sense ‘uncommon,’ ‘rare,’ or ‘not ordinary.’ Having undertaken this analysis, the Court concludes that nothing about the instant case stands out as ‘exceptional’ in any respect.” Id. at 5. In another decision issued on the same day, Judge Stark granted § 285 fees based on His Honor’s finding that the case “stands out from others” and is exceptions. See Nova Chemicals Corp., et al. v. The Dow Chemical Co., C.A. No. 13-1601-LPS, Memo. Op. (D. Del. Sept. 30, 2015)

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In a series of related actions, Chief Judge Leonard P. Stark granted Defendants’ motions to dismiss or for judgment on the pleadings based on Section 101, ruling that all claims of the patent-in-suit, entitled “Method and Apparatus for Conducting or Facilitating a Promotion,” were directed to patent-ineligible subject matter. E.g., Inventor Holdings, LLC v. Gameloft, Inc., C.A. No. 14-1067-LPS (D. Del. Sept. 30, 2015).  The patent relates to “a method and apparatus for distributing promotions to potential participants and for allowing the promotion participants to receive benefits associated with the promotions. The claimed methods are generally directed to “facilitating play of a game” on a “mobile device” or “computer-readable medium” in which a user receives an in-game benefit after a locked outcome of the game is unlocked using an unlock code associated with that outcome.” Id. at 1-2 (internal citations and quotation marks omitted).

The Court first concluded that certain disputed terms could be given their plain and ordinary meaning, and thus the Court could decide patentability at this stage without further claim construction resolution. See id. at 13-16. The Court also clarified that a clear and convincing evidence burden of proof did not apply to Defendants’ motions as there were no disputed material facts to resolve. Id. at 12 n.6.

Under the first prong of the ­Supreme Court’s Mayo/Alice test, the Court concluded that the patent was directed to an abstract idea because its claims did not “solve a problem specific to mobile devices,” and were similar to the claims at issue in, “for example, Bilski and Alice, which were directed to abstract ideas that could be implemented using generic computer technology.” Id. at 17 (emphasis in original). The Court also agreed with Defendants that the claims were directed to an abstract concept because they were directed to a “fundamental economic practice,” in other words “the economic strategy and abstract idea of ‘providing an ‘unlock code’ in exchange for a qualifying activity for an ‘outcome’ to reveal the [intra-game] benefit of the locked outcome.” Id. at 17-18 (alterations in original).

Finally, the Court concluded under the second Mayo/Alice step that the claims did not include a sufficient inventive concept. The claims were “implemented using generic mobile device technology” and this was insufficient to “impose meaningful limits on the scope of those claims.” Id. at 20-21. Further, while Plaintiff argued that the claims met the machine-or-transformation test because of their “use of a ‘mobile device’ in connection with the other claim limitations,” the Court observed that “many exemplary embodiments in the specification indicate that the mobile device is not integral to the performance of the claimed method,” thus “neither the claims nor the specification . . . recite any machine that plays a ‘significant part in permitted the claimed method to be performs.’” Id. at 22-23 (emphasis in original) (internal citations omitted). Further, the claims “tie[d] up use of the underlying ideas of the [patent],” id. at 23, and these claims were not analogous to the claims found patent-eligible in DDR Holdings because they “do recite standard use of a conventional mobile phone in a normal, expected manner,” id. at 24 (emphasis in original).

Accordingly, the Court concluded that the claims of the patent-in-suit were directed to patent-ineligible subject matter, and granted Defendants’ motions to dismiss or for judgment on the pleadings. Id. at 25.

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