Articles Posted in Leonard P. Stark, Chief Judge

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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.

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In Fairchild Semiconductor Corporation, et al. v. Power Integrations, Inc., C.A. No. 12-540-LPS (D. Del. Apr. 23, 2015), Chief Judge Leonard P. Stark concluded that Defendant could not relitigate the validity and direct infringement of one of the patents asserted against it by Plaintiffs, due to prior proceedings in this Court between these parties, where a jury found infringement and no invalidity against Defendant (Fairchild II, C.A. No. 08-309-LPS).

Having concluded in a prior opinion that the accused products at issueas well as the scope of the asserted claims were essentially the same in the two actions, the Court now concluded that issue preclusion existed here.  As to infringement, Plaintiffs argued Defendant was precluded from re-litigating whether a certain product infringed “when used in power supplies with transformers.”  Id. at 2.  This “identical issue” had come before the jury in Fairchild II and the Court had upheld the verdict post-trial.  Id. at 2-3.  Defendant argued that Plaintiffs made “different and contradictory arguments . . . which purportedly raise new factual questions, but [the Court observed that] the scope of claims 6 and 18 as consistently construed by this Court have not changed . . . and the Court perceives no reason . . . why a new argument in this context should prevent application of issue preclusion.”  Id. at 4.

As to validity, “[t]he only dispute appear[ed] to be whether the identical issue of validity was adjudicated, given the ‘minor’ change in the Court’s claim construction.”  Id. at 5 (emphasis in original).  But the Court concluded that [i]n the present case, the issue of validity is necessarily identical to that in Fairchild II because [Defendant] has actually brought the same validity challenges, with the exception of an additional obviousness challenge (which cannot succeed as the claim scope has narrowed). Thus…[Plaintiffs have] met [their] burden to show that the identical issue of validity was previously adjudicated.”  Id.  Defendant countered that it was “was unfairly prejudiced by [Plaintiffs’] concealment of its presently asserted position [in Fairchild II based on its expert’s testimony] that the ‘972 invention does not, in fact, provide substantially constant current control.”  Id. at 5.  Defendant “support[ed] this argument by pointing out that the asserted claims have been finally rejected by the Examiner, and that in rejecting the asserted claims, the Examiner stated, ‘[a]ll we are doing is preventing the patent owner from making one argument to the court and making a different argument to the Office.’ . . . However . . . [Defendant] had every opportunity to try (and did try) to dissuade the jury in [Fairchild II] from relying on evidence [Defendant] contends has always been unreliable.” Id. at 5-6 (citations omitted).  Therefore, the Court disagreed that “preclusion is inappropriate here because otherwise [Defendant] will have been deprived of a full and fair opportunity to litigate.”  Id. at 5.

Having made the above conclusions, the Court did not reach whether claim preclusion existed, id. at 2, and itgranted Plaintiffs’ motion for judgment on the pleadings to the extent it sought to apply collateral estoppel to preclude Defendant from relitigating the above issues.

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In Fairchild Semiconductor Corporation, et al. v. Power Integrations, Inc., C.A. No. 12-540-LPS (D. Del. Apr. 24, 2015), Chief Judge Leonard P. Stark considered Plaintiffs’ motion for reargument as well as their objections to various decisions of the appointed Special Master.

The Court denied Plaintiffs’ motion for reargument on its recent decision to grant summary judgment to Defendant relating to priority on Defendant’s patent.  Plaintiffs argued that the Court’s finding that there was proof of reasonable diligence in reducing the invention to practice after conception was based on a mistake of apprehension not supported by the law or facts.  The Court found no clear error in its decision.  Id. at 1-3.

The Court also overruled Plaintiffs’ objections to the orders of Special Master Terrell.  First, the Special Master granted Defendant’s motion to strike portions of Plaintiffs’ expert report.  The Court observed that the Special Master’s analysis was not deficient and his conclusions were consistent with the Court’s prior orders allowing Plaintiffs to submit revised expert reports with certain parameters.  Id. at 5-7 & n.2.  Second, the Special Master had only granted Plaintiffs’ own motion to strike as to portions of Defendant’s expert reports that were responsive to stricken portions of Plaintiffs’ expert’s opinions.  Id. at 7.  In adopting the Special Master’s order, the Court agreed with the Special Master’s conclusions regarding the scope of Defendant’s expert’s opinions.  Id. at 8.

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In a recent memorandum opinion, Chief Judge Leonard P. Stark denied a motion to invalidate under § 101 the plaintiff’s U.S. Patent No. 5,987,610 (“Computer virus screening methods and systems”).  Intellectual Ventures I LLC v. Symantec Corp., et al., C.A. No. 10-1067 (D. Del. Apr. 22, 2015).  The Court found that the ’610 patent (unlike the other two patents at issue in the motion) was “Internet-centric” – the “key idea of the patent is that virus detection can take place remotely between two entities in a telephone network,” and “[c]laims that purport to improve the functioning of the computer itself or effect an improvement in any other technology or technical field may be patentable under § 101.” (emphasis in original) (internal quotation marks omitted).  The Court rejected the defendants’ arguments that the patent was akin to “observing individuals for signs of intoxication, reading wartime correspondence, or asking someone if she is having an emergency.”  The Court added that the ’610 patent did not claim an abstract idea because “[t]he concept of detecting a computer virus in installed data (and doing so in a telephone network) does not make sense outside of a computer context.”

However, the Court granted the motion to invalidate two other asserted patents, U.S. Patents. No. 6,460,040 (“Distributed content identification system”) and 6,073,142 (“Automated post office based rule analysis of e-mail messages and other data objects for controlled distribution in network environments”), under § 101.  The Court agreed with the defendants that both patents claimed methods that were abstract ideas capable of being performed by humans and “are not necessarily rooted in computer technology.”  The Court further found that the methods lacked any inventive concept that could salvage patent eligibility.

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Chief Judge Stark recently denied a plaintiff’s motion to stay litigation with respect to a counterclaim for infringement of patent claims that stood rejected by the PTAB.  Fairchild Semiconductor Corp., et al., v. Power Integrations, Inc., C.A. No. 12-540-LPS (D. Del. Apr. 15, 2015).  The Court explained, “[w]hile a stay would minimally simplify the case set for trial, it would also unfairly prejudice [the defendant].  The most prominent and weighty factor under the circumstances is that discovery is completed and the parties and the Court are preparing for trial, which will begin in about six weeks.  Under the totality of the circumstances, the Court concludes that the appropriate exercise of its discretion is to deny [the plaintiff’s] motion to sever and stay.”  Id. at 7-8.

Judge Stark also ruled on cross-motions for summary judgment relating to priority dates.  One of the plaintiff’s defenses to a counterclaim of infringement was invalidity based on one of the plaintiff’s own patents, which it argued was prior art based on filing dates.  Id. at 15-16.  The defendant disagreed that the plaintiff’s patent was prior art, arguing that the defendant’s patent was entitled to an earlier priority date based on pre-filing conception and reduction to practice.  Chief Judge Stark found that the defendant produced corroborating evidence of a conception date that preceded the plaintiff’s patent filing date, and also that the inventors of the defendant’s patent “were continuously diligent in reducing the invention to practice” before the plantiff’s patent filing date.  Id. at 20-21.  As a result, the Court ruled that the plaintiff’s patent could not be invalidating prior art.

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Chief Judge Leonard P. Stark has adopted Magistrate Judge Burke’s Report and Recommendation in Forest Laboratories, Inc., et al. v. Amneal Pharmaceuticals, C.A. No. 14-508-LPS, in which Judge Burke denied defendant Mylan’s motion to dismiss for lack of personal jurisdiction.  As observed in the Order, two recent decisions regarding similar issues of personal jurisdiction over Mylan – Acorda and AstraZeneca were certified for interlocutory appeal before the Federal Circuit and the Federal Circuit has granted Mylan permission to appeal these decisions.  Memorandum Order at 2 (D. Del. Mar. 30, 2015).  Per this Order, either party may similarly file a motion to certify for interlocutory appeal.

The Court reviewed the motion de novo, explaining that “[g]iven the detailed reasoning provided in the Report, as well as the lengthy discussion of the jurisdictional issues in Acorda, and further given that Mylan has in the instant case raised no arguments that are not adequately addressed in Judge Burke’s report and/or Acorda, the Court finds it unnecessary to address Mylan’s Motion to Dismiss or its Objections any further.”  Id. at 3.

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Chief Judge Leonard P. Stark recently decided the parties’ motions to preclude expert testimony in Fairchild Semiconductor Corporation v. Power Integrations, Inc., C.A. No. 12-540-LPS (D. Del. Mar. 20, 2015).  Judge Stark granted Power Integrations’ motion as to Fairchild’s claim for damages for alleged inducement because Fairchild’s expert used the wrong date for his hypothetical negotiation.  Id. at 2.  In particular, Fairchild’s expert failed to consider a 2012 jury verdict in prior litigation between the parties in which the jury found no inducement of the patent-in-suit.  Id.  However, because both parties’ experts relied on the same incorrect date, Judge Stark gave both sides the opportunity to serve supplemental expert reports to correct the hypothetical negotiation date.  Id. at 3.

Judge Stark denied Fairchild’s motion to preclude Power Integrations’ technical expert finding that he did not import new limitations into two claim terms and provided adequate support for his opinion that the patent-in-suit was invalid under 35 U.S.C. § 112.  Id. at 3-4.  Judge Stark did, however, grant Fairchild’s motion as to Power Integrations’ damages expert.  Judge Stark determined that the expert improperly apportioned value between infringing and non-infringing products because he “did not analyze Fairchild’s accused products, relying instead on an apportionment based on [Power Integrations’] products, based on his belief that those products would have a relative value in the marketplace similar to what is exhibited by the Power Integrations products.”  Id. at 7 (internal quotation omitted).  Judge Stark also determined that the expert used an improper rule of thumb when beginning his analysis with “an assumption that up to 80% of value may be attributable to intellectual property, based on research showing that 80% of a high tech company’s value consists of intangible value, such as intellectual property.”  Id. at 8.

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In a recent Memorandum Order, Chief Judge Leonard P. Stark ruled on two issues following the pretrial conference. Intellectual Ventures I LLC v. Symantec Corp., C.A. No. 10-1067-LPS (D. Del. Jan. 21, 2015). First, Judge Stark ruled that “[t]he two newly-accused products will not be the subject of the trial beginning next week.” Id. at 1. Judge Stark provided this ruling, however, without prejudice to plaintiff “to seek relief related to [the newly-accused products] through an appropriate post-trial proceeding in this case or by filing a new suit.” Id.

Second, Judge Stark found that defendant would “not be permitted to present its false marking ‘defense’ at the forthcoming trial.” Id. Judge Stark explained that with respect to two of the three asserted patents, plaintiff is asserting only method claims, and “the marking requirement does not apply to method claims.” Id. With respect to the remaining patent-in-suit, Judge Stark found that “as an exercise of its discretion and as proper case management, that it would be unfairly prejudicial to [plaintiff] to allow [defendant], at nearly the final moment before trial (i.e., listing it as a contested issue in the proposed pretrial order), to put [plaintiff] in a position in which it must prove that it (or its predecessors and/or licensees) marked [its] embodiments.” Id. at 2. Specifically, defendant “mistakenly or misleadingly” identified failure to mark as an affirmative defense in its answer, but did not discuss § 287 in its responses to interrogatories, did not provide expert discovery on failure to mark, and did not propose a jury instruction on failure to mark at the time the parties exchanged instruction proposals. Id. On balance, Judge Stark determined that defendant “failed to give [plaintiff] adequate, meaningful notice that it contested marking,” and defendant therefore “waived and/or abandoned its right to contest marking at the forthcoming trial.” Id. at 2-3.

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Chief Judge Stark recently issued a memorandum order with helpful guidance for parties regarding jury instructions in patent infringement cases. His Honor explained that an instruction on the entire market value rule should be read to the jury, “as doing so will assist the jurors’ understanding of the evidence on damages,” but that an “overly narrow” interpretation of the law governing the entire market value rule would be rejected. Intellectual Ventures I LLC v. Symantec Corp., C.A. No. 10-1067-LPS, Memo. Or. at 1 (D. Del. Jan. 23, 2014). Such an instruction should be read, Judge Stark explained, both when the plaintiff’s expert first addressed entire market value rule damages and again as part of final instructions. Id.

The specific instructions adopted by Judge Stark on the entire market value rule, reasonable royalty, the Georgia-Pacific factors, and damages generally are found in the Court’s order below.

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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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