In their answer in this patent infringement action, Defendants asserted an affirmative defense of inequitable conduct. The inequitable conduct defense alleged that the inventor and prosecuting attorney of the patent-in-suit had failed to disclose to the PTO an arguably-relevant interference and that the patent-in-suit would not have been granted but for that failure to disclose the interference. The interference in question involved both a patent application and an issued patent. The patent-in-suit claims priority to one application, which in turn claims priority to the application subject to the interference. Defendants argued that because the interference concluded with a determination that this application had been invented “by another,” the subject matter of the patent-in-suit had also been invented by another. Plaintiff moved to strike the affirmative defense, and Judge Stark granted the motion, finding that the Board of Patent Appeals and Interferences had made no priority determination but instead disposed of the interference a barred by the applicable statue of repose. Thus, the interference in question was not material to patentability, rendering the inequitable conduct defense implausible. Elm 3DS Innovations, LLC v. Micron Tech., Inc., et al., C.A. No. 14-1431-LPS, Memo. Or. at 1-3 (D. Del. Aug. 10, 2015).
Chief Judge Leonard P. Stark recently granted a plaintiff’s request for an order compelling supplemental responses to contention interrogatories relating to the plaintiff’s license agreements with non-party patentees. Intel Corp. v. Future Link Sys., LLC, C.A. No. 14-377-LPS (D. Del. Aug. 5, 2015). The Court noted that the defendant spent “the vast majority of its preliminary responsive contentions to complain about Plaintiff’s allegedly deficient document production and discovery responses[,]” but explained that “Defendant ‘may not avoid its obligations under the Court’s schedule by arguing, generically, that Intel has not “met its burden” to prove it is licensed . . . . [Defendant] needs to explain why.’” Id. at 2 (emphasis in original ). The Court also rejected the Defendant’s argument that Intel’s license claim “is not suitable for early summary judgment. On the contrary, Plaintiff has identified specific license provisions, products, and arguments for why it thinks five of the patents-in-suit are licensed. . . . Certain of the issues likely to be presented on summary judgment – for example, the applicability of certain license provisions to the five patents-in-suit – are questions of law (contract interpretation).” Id. at 3.
In Greatbatch Ltd. v. AVX Corporation, et al., C.A. No. 13-723-LPS (D. Del. July 28, 2015), Chief Judge Leonard P. Stark ordered a mechanism for reduction of asserted claims and prior art before trial. Plaintiff would shortly elect no more than 15 claims, with no per-patent limit. Here the Court adopted Defendants’ proposal over Plaintiff’s proposal for 24 claims. 10 days thereafter, Defendants would narrow prior art references to 20 maximum, with no per-patent limit, as well as identify a maximum of 60 prior art combinations (defined as a combination of two or more references per claim). The parties would not be allowed to modify their elections, as requested by Plaintiff, “solely on the basis of any decisions by the [PTAB] related to any inter partes review . . . petitions involving the asserted claims.” Id. at 2-3.
Further, the Court ordered the parties to adhere to the summary judgment briefing limits in the schedule, which allowed for 40 pages total per party.
In late 2013, Chief Judge Stark granted a motion to stay this case pending an inter partes review by the PTO based, in part, on the argument that the stay would not exceed 18 months, given the statutory deadlines for IPRs, and the defendant’s withdrawal of its prior opposition after the IPR was instituted. Zoll Medical Corp. v. Respironics, Inc., C.A. No. 12-1778-LPS, Memo. Or. at 1-2 (D. Del. July 8, 2015). Recently, the PTO confirmed patentability of eight claims of the patent-in-suit, with one claim having been cancelled in the IPR. Plaintiff Zoll sought to lift the stay of this litigation and Defendant Respironics opposed, arguing that it would appeal the finding of patentability to the Federal Circuit. Id.
As Judge Stark explained, “[u]nderstandably, Zoll now wishes to proceed with the litigation it filed more than 2 ½ years ago . . . . The proper exercise of the Court’s discretion under these circumstances is to lift the stay and proceed with the litigation, just as the parties (and the Court) envisioned at the time the unopposed motion to stay was granted. The IPR proceeding is complete and the stay has been in place nearly 19 months. Respironics has pointed to no new, unforeseeable events to cause the Court to depart from the path that was set when the stay was imposed. As Zoll puts it, ‘Having taken its shot in the USPTO and failed, Respironics should not be able to preclude Zoll from pursuing its claims in this court for an indeterminate period of time.’” Id. at 2.
Respironics’ appeal to the Federal Circuit was not a persuasive reason to keep the stay in place: “The pendency of an appeal from the IPR, and the possibility that the Federal Circuit may reverse the PTO (and thereby simplify this litigation by, presumably, making it disappear), is not, in and of itself, a sufficient basis to make the patentee here continue to wait to enforce patent rights that it currently holds.” “Had Respironics initially been seeking a stay that would extend to the period during which any appeal from the IPR would be pending, it is likely Zoll would have continued to oppose the motion, and the Court’s calculus might very well have differed too.” Id. at 2-3.
In Interdigital, Inc, et al. v. Wistron Corporation, C.A. No. 15-478-LPS (D. Del. June 18, 2015), Chief Judge Leonard P. Stark granted Plaintiffs’ emergency motion to remand the case to Delaware’s Court of Chancery. Plaintiffs had originally filed suit in that court, seeking a TRO and injunctive relief to “prevent Defendants from advancing suit filed in the Intellectual Property Court of Taiwan.” Id. at 1. Defendant filed a Notice of Removal, which brought the matter to the District Court. Id.
The Court concluded that a forum selection clause in a patent licensing agreement between these parties “at least arguably constitute[d] a contractual waiver” of Defendant’s right to remove the action to federal court where Plaintiffs filed suit regarding the agreement in Delaware state court. Id. at 2. The Court rejected the import of Defendant’s “premature contentions about the merits of the parties’ underlying disputes and allusions to notions of “international comity.” Id. at 3. Further, “even assuming (without deciding) that Plaintiffs are exaggerating the prejudice they are suffering from Defendant’s removal of the Chancery action and from Defendant’s initiation of litigation in Taiwan, the Court perceives no reason to exercise whatever discretion it has to keep this matter here rather than remand.” Id.
Finally, the Court denied Plaintiffs’ requests for fees and costs, finding remand to be the most appropriate and effective remedy. Id. at 4.
In a recent Memorandum Order, Chief Judge Leonard P. Stark denied defendants’ (the “Moving Defendants”) motion to stay the litigation pending inter partes review (“IPR) of U.S. Patent No. 8,466,795 without prejudice. Pragmatus Mobile, LLC v. Amazon.com, Inc., C.A. Nos. 14-436, 14-440-LPS (D. Del. June 17, 2015). Judge Stark noted that “[t]he PTAB has not instituted the IPR petition” but “[g]iven the filing date, the PTAB is statutorily required to decide whether to institute the IPR petition by October 22, 2015.” Id. at 2.
Applying the first of three traditional factors the court considers when deciding whether to stay litigation pending IPR, Judge Stark found that “Moving Defendants’ delay in petitioning for IPR could create at least some tactical disadvantage for Plaintiff Pragmatus Mobile, LLC (‘Plaintiff’) and a stay may unduly prejudice Plaintiff.” Id. More specifically, Judge Stark observed that “[w]hile Plaintiff’s status as a nonpracticing entity reduces the prejudice it would suffer from a stay . . . , there remains a potential for undue prejudice.” Id. Moreover, Judge Stark found that “the timing of Moving Defendants’ filing suggests they may be seeking a tactical advantage, given they were aware of the prior art asserted in their IPR petition many months before filing the petition just three days before the statutory deadline.” Id.
Judge Stark also found the second traditional factor (whether stay would simplify the issues in question and trial in the case) to disfavor stay at the time of deciding the motion. Judge Stark explained that “[g]enerally, the ‘simplification’ issue does not cut in favor of granting a stay prior to the time the PTAB decides whether to grant the petition for inter partes review.” Id. 2-3. Judge Stark noted, however, that “Moving Defendants may renew their Motion if and when their petition is instituted, and the simplification factor may be evaluated differently at that time.” Id. at 3.
Judge Stark finally found the third factor (whether discovery is complete and whether a trial date has been set) to weigh against granting stay. Judge Stark observed that “a trial date has been set for September 12, 2016 (around the same time as the IPR petition may be finally decided) and the parties have substantially completed document production, exchanged invalidity and infringement contentions, and commenced claim construction briefing in preparation for a Markman hearing scheduled for August.” Id. Judge Stark further noted that “[f]inal infringement contentions are due in late October, shortly after the PTAB’s deadline for deciding whether to institute the petition.” Id.
Chief Judge Leonard P. Stark recently denied a motion to stay pending inter partes review filed by Netflix. Copy Protection LLC v. Netflix, Inc., C.A. No. 14-365-LPS (D. Del. June 17, 2015). As the Court explained, the PTAB had not yet instituted the inter partes review, and was not required by statute to make a decision on whether or not to do so until October 2015. Further, based on the statutory timeline, a final decision from the PTAB would be expected around the same time as trial in this case—October 2016. Therefore, the Court found that the balance of factors weighed against staying the case at this time, but explained that Netflix could renew its motion if and when inter partes review is instituted by the PTAB.
In Masimo Corporation v. Philips Electronic North America Corporation, et al., C.A. No. 09-80-LPS (D. Del. May 18, 2015), Chief Judge Leonard P. Stark concluded, after a ten-day bench trial, that Defendants had not proven inequitable conduct by Plaintiff. Defendants had alleged that three of Plaintiffs’ attorneys had committed inequitable conduct during a reexamination of one of the patents-in-suit when they did not inform the PTO that Magistrate Judge Thynge, and the Court when it adopted the Magistrate’s Report and Recommendation (“SJ Order”), had rejected constructions on which Plaintiff had relied to overcome the PTO’s rejections.
The Court determined that Defendants had not proven that Plaintiff’s attorneys had “made a deliberate decision to withhold” the SJ Order from the PTO. Id. at 15 (internal quotation marks omitted). Instead, the Court concluded that “these attorneys had set up a system of disclosure aimed at providing the PTO with all relevant district court orders by filing [invention disclosure statements] in [the relevant reexamination] [.]” Id. The Court concluded that “the ‘single most reasonable inference’” as to why this particular order had not been disclosed to the PTO was that “this was the result of timing and circumstances of the reexamination process rather than any deceitful intent of [the attorneys].” Id. at 16. The attorneys had developed a system in which the prosecution attorneys, who could not view information in the litigation subject to the protective order, would still be kept apprised of developments, and the policy was that “anything even remotely relevant to the merits of the case should be submitted.” Id. at 15 (internal quotation marks omitted).
The Court also found that Defendants had not proven that the SJ Order was a “known material reference in the view of [these attorneys], at a time when any of them believed they could have submitted the SJ Order as part of the [relevant reexamination].” Id. at 21. The Court explained that “the record supports a strong inference that [Plaintiffs’] attorneys would have disclosed the SJ Order if they had understood its purported implications during the ten-day window between the SJ Order and the [Notice of Intent to Issue Reexamination Certificate] [(“NIRC”)] . . . and did not do so after that period only because they believed the [reexamination] was closed and, therefore, they were not permitted to do so. . . . Even if [the attorneys] were technically wrong about what post-NIRC disclosures were permissible under the MPEP (a dispute the Court need not resolve), what is decisive here is that they believed no such disclosures were possible.” Id. at 23.
Furthermore, the Court concluded that Defendants did not prove that the attorneys made a misrepresentation to the PTO by “failing to correct a statement [Plaintiff] made to the PTO in a response to an office action, a statement that in [Defendants’] view became false the moment Judge Thynge issued her R&R.” Id. at 23. The Court concluded these “statements” were, in fact, arguments regarding claim construction, and thus no misrepresentation had been made. Id. at 24-25.
Chief Judge Stark recently resolved a motion for summary judgment of no willfulness and various motions in limine in the lead-up to a trial in the litigation between Fairchild Semiconductor and Power Integrations.
Judge Stark determined that the first Seagate prong, the objectively high likelihood of infringement of a valid patent, was not satisfied and therefore the subjective prong and the ultimate question of willfulness could not go to the jury. Fairchild Semiconductor Corp., et al. v. Power Integrations, Inc., C.A. No. 12-540-LPS, Memo. Op. at 3 (D. Del. Apr. 23, 2015). The objective prong was not satisfied, Judge Stark explained, because Fairchild asserted reasonable non-infringement positions based on the Court’s claim construction and the fact that it had redesigned its products in a manner that Power Integrations had previously admitted would not infringe. Judge Stark found that these were, “at minimum, credible, reasonable non-infringement theories, and consequently the first prong of Seagate cannot be satisfied,” “even if the Court or a jury ultimately rejects Fairchild’s non-infringement theories” and “[r]egardless of whether [summary judgment of non-infringement] is ultimately granted or denied.” Id. at 1, 4. Judge Stark also rejected Power Integrations’ contention that Fairchild acted recklessly, explaining that the “implicit concession (in describing the new products as only ‘essentially,’ but not entirely, unchanged), the accused products are changed from what was found to infringe in the earlier case,” and therefore willfulness could not be proven on this record.
The same day, Judge Stark resolved numerous pre-trial motions in limine in addition to addressing various other pre-trial matters. His Honor granted the plaintiffs’ motion to preclude any reference to pending or completed reexamination proceedings, including both the non-final reexamination of plaintiff’s patent and the completed reexamination that found defendant’s patent valid. Fairchild Semiconductor Corp., et al. v. Power Integrations, Inc., C.A. No. 12-540-LPS, Memo. Or. at 1-2 (D. Del. Apr. 23, 2015). Judge Stark next denied without prejudice a motion to preclude impermissible expert testimony from lay witnesses during examination of inventors because His Honor found this to be “an issue best address in specific circumstances as they arise during trial.” Id. at 2. Judge Stark also precluded testimony from the defendant’s prior expert from the prior litigation between the parties, testimony that may be “an attempt to back door infringement or validity contentions” that the Court had previously stricken, and testimony regarding a prior jury’s finding of direct infringement of a patent of which defendant was accused of inducing infringement. Id. at 3-5.
Finally, Judge Stark granted a motion to preclude testimony that the accused products in this case are the same as those found to infringe in earlier litigation because the risk of unfair prejudice was too high. As explained above, the Court granted summary judgment of no willfulness, and the evidence was therefore not necessary for willfulness. His Honor also explained that the probative value was minimal with respect to inducement because the evidence related to a “different product used at a different time” and was “substantially outweighed by the risk of unfair prejudice arising from the inflammatory nature of PI’ s ‘copying’ evidence.” Finally, the evidence was not relevant to secondary considerations of obviousness because there was no obviousness defense with respect to the patent at issue. Id. at 2-3.
In Triplay, Inc., et al. v. Whatsapp Inc., C.A. No. 13-1703-LPS (D. Del. Apr. 28, 2015), Magistrate Judge Christopher J. Burke considered recommended that Defendant’s motion to dismiss due to lack of patentable subject matter be granted as to one claim of the patent-in-suit, and denied without prejudice as to the remaining claims. The patent-in-suit is U.S. Patent No. 8,332,475 and entitled “Messaging System and Method,” and is directed to “a field of electronic messaging and, in particular, to cross-platform messaging.” Id. at 2.
As a threshold issue, while Defendant sought to invalidate all claims of the patent-in-suit, the Court declined to address claims that had not been the focus of argument and that had not been “clearly asserted” against Defendant. Id. at 12. The Court rejected Defendant’s position that it need not separately evaluate the invalidity of every claim “as long as the Court analyzes one claim that is ‘sufficiently similar’ to others,” observing that Defendant had not shown the key claims (namely, claims 1 and 12) to be “representative” and that “Defendant bears the burden to demonstrate that its asserted Section 101 defense is well taken as to each claim.” Id. at 13.
The Court concluded that claims 1 and 12 were directed to an abstract idea. Similar to the claims in Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed Cir. 2014), “the majority of the limitations of the claims at issue . . . describe only an abstract idea . . . lacking any concrete or tangible application, and their articulation accounts for much of the claim’s language and limitations overall.” Id. at 20 (internal quotation marks omitted). The Court found the case distinguishable from DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), explaining that “the clear majority of the claim language that is at issue here is not ‘necessarily rooted in computer technology[,]’ nor in the technology of electronic communications devices. Instead, the majority of that claim language speaks to an abstract idea (converting and forwarding messages, so that the messages are sent in a format and layout in which they can be received by a recipient) that has long been used to resolve problems in the area of communications (electronic and otherwise), and that can potentially be applied in just about any communications context, depending on the means of communication.” Id. at 25.
As to the method claim (12), the Court then concluded that this claim was invalid as lacking an inventive concept. See id. at 28-36. However, the Court found that the system claim (1), although it “largely mirrors the structure of claim 12,” required claim construction on its additional “access block” and “media block” elements, which the Court determined could add significant limitations to render the claims patent eligible, before determining patent eligibility under Section 101. See id. at 38-40.
Accordingly, the Court recommended that the motion be granted as to claim 12 and denied without prejudice as to the remaining claims of the patent-in-suit.
Update: On August 10, 2015, Chief Judge Leonard P. Stark adopted Magistrate Judge Burke’s Report and Recommendation over the parties’ objections, with the exception of the recommendation to deny the Motion to Dismiss without prejudice to renew as to all claims other than claim 12. The Court granted the motion as to claim 12, and the motion “remain[ed] pending” as to all remaining claims. Memorandum Order at 2. Defendant had objected to Judge Burke’s findings that claim 1 had to be construed before determining patent ineligibility and that “the other claims of the ‘475 patent could not be assessed given the parties’ lack of attention to them.” Memorandum Order at 1. To that end, the Court overruled these objections, and further instructed the parties to submit letter briefs to address any claim construction issues to address before Defendant renewed its motion as to claim 1, and also requested letter briefing on “whether any of the dependent claims of the ‘475 patent include limitations that would make it inappropriate to analyze claims 1 and 12 as representative claims for purposes of deciding Defendant’s Motion to Dismiss.” Id. A copy of Chief Judge Stark’s Order is below.