Articles Posted in Leonard P. Stark, Chief Judge

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Chief Judge Leonard P. Stark recently granted a plaintiff’s motion to strike an amended answer and counterclaim, and awarded the plaintiff costs and expenses associated with presenting the motion.  Helios Software, LLC, et al. v. Spectorsoft Corp., C.A. No. 12-081-LPS (D. Del. July 18, 2014).  As the Court explained, it had previously granted the defendant leave to file an amended answer to add a counterclaim asserting inequitable conduct.  That order allowed the defendant to file an amended answer “in substantially the form it has proposed.”  The defendant then filed an amended answer and counterclaim that was “significantly different from the Amended Answer it had proposed to the Court.”  The defendant admitted it violated the Court’s order, and asked the Court to modify that order.  As Chief Judge Stark explained:

The Court is troubled that Defendant intentionally violated the Court’s Order and then asked the Court to modify its decision instead of seeking the Court’s permission before filing its modified pleading.  Defendant could and should have reached out to the Court in the seven-day period that the Court gave Defendant to file its Amended Answer and should have sought leave to file its newly amended pleading.  Because Plaintiffs had to bear the unnecessary cost of filing this motion as a result of Defendant’s conduct, the Court will charge Defendant with Plaintiffs’ reasonable costs and expenses incurred in presenting this motion.

The Court granted the defendant leave to file an amended version of its amended answer and counterclaim, however, in a form that mostly removed the plaintiff’s highly confidential and privileged information contained in its stricken pleading.

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In a recent oral order, Chief Judge Leonard P. Stark granted defendants’ request for an extension of time to comply with the Court’s Order granting a permanent injunction, entered June 30, 2014.  Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., et al., C.A. No. 08-309-LPS, D.I. 798 (D. Del. July 3, 2014) (permanent injunction discussed previously here). In a letter to the Court, defendants asserted that they “simply cannot implement this type of system level change immediately as required by the Court Order, and would prefer to comply rather than to risk immediately violating the Order.”  (D.I. 795 at 1.)  Judge Stark permitted defendants until July 31, 2014 to fully comply with the permanent injunction.  (D.I. 798.)

Further, Paragraph 8 of the permanent injunction order required defendants “to include a copy of this Order Granting Permanent Injunction with any product that [defendants] deliver[] outside the United States” in addition to a notice provision specified by the Court.  (D.I. 794.)  Judge Stark found that defendants “may comply with Paragraph 8 of the injunction order by clearly printing the Court’s notice on the cover of every box of infringing products so long as the notice includes a URL to the Court’s order and all customers are provided with a copy of the Court’s injunction order prior to their purchasing any of the enjoined products outside of the U.S.”  (D.I. 798.)  Judge Stark reasoned that “[a]lthough the Court is troubled that [defendants] did not raise this notice issue prior to the Court’s granting the injunction, and the Court today provides [defendant] [their] belatedly requested relief reluctantly, the Court is persuaded that the purpose of the notice provision in Paragraph 8 will be satisfied so long as [defendants] compl[y] with the foregoing obligations.” Id.

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In a recent memorandum order, Judge Leonard P. Stark granted a plaintiff’s motion for a permanent injunction.  Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., et al., C.A. No. 08-309-LPS (D. Del. June 30, 2014).  The Court found that the plaintiff demonstrated irreparable harm in the form of lost sales and price erosion resulting from the defendants’ (the plaintiff’s biggest competitor) infringement, and that the damage to the plaintiff’s “reputation as an innovator” as well as the “incumbency effects of” the defendants’ taking sales from the plaintiff through its infringement could not adequately be remedied by money damages.  The infringing sales also accounted for only a fraction of the defendants’ annual revenue, whereas the plaintiff’s revenue was based largely on its patented products, such that the balance of hardships weighed in favor of an injunction.  Finally, the Court found that an injunction would serve the public interests of encouraging innovation and protecting property rights.  The Court therefore enjoined the defendants from selling the products found to infringe at trial, as well as “those products ‘not colorably different’ from them.”

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Chief Judge Stark recently denied cross-motions for reargument or reconsideration of the Court’s order finding certain claims of the patents-in-suit infringed and certain claims not infringed. Judge Stark denied the Defendants’ motion because “the Court did not misunderstand [Defendant’s] argument, but instead rejected it” and denied Plaintiff’s motion because the clarification Plaintiff had requested was unnecessary. Thus, neither of the parties had met the “heavy burden” of showing that “the Court has patently misunderstood a party, made a decision outside the adversarial issues presented by the parties, or made an error not of reasoning but of apprehension.” Masimo Corp. v. Philips Elec. N. Am. Corp., C.A. No. 09-80-LPS-MPT, Memo. Order at 2-3 (D. Del. July 2, 2014).

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Chief Judge Leonard P. Stark recently made a ruling related to a protective order dispute in Andover Healthcare, Inc. v. 3M Company, C.A. No. 13-843-LPS, Oral Order (D. Del. June 29, 2014).  The Court denied plaintiff’s request that it be permitted to use defendant’s highly confidential information in related German proceedings. The Court explained that both German and U.S. law “provide other, appropriate mechanisms for Plaintiff to seek the relief it is requesting. Given the sensitivity to Defendant of the information Plaintiff seeks to use in Germany, and given that Plaintiff may have opportunities to present the evidence at issue to the German proceeding even after Plaintiff files a brief in Germany due June 30, it is reasonable to require Plaintiff to pursue the other mechanisms for the relief it is seeking.”

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Chief Judge Stark recently announced his new procedures and form scheduling order for Non-ANDA patent cases (see here).  Yesterday, Chief Judge Stark announced that, effective July 1, 2014, Judge Stark will be following his new procedures for Discovery Matters and new procedures for Motions to Strike and Motions to Amend in ALL CIVIL CASES, regardless of when they were filed.  Those procedures are copied below and can be accessed via Judge Stark’s webpage under the “New Procedures” tab.  Judge Stark also posted to his webpage a “Revised Patent Form Scheduling Order” for ANDA patent cases on the “New Patent Procedures” tab.

“Discovery Matters” Procedures
a. Any discovery motion filed without first complying with the following procedures will be denied without prejudice to renew pursuant to these procedures.
b. Should counsel find, after good faith efforts – including verbal communication among Delaware and Lead Counsel for all parties to the dispute – that they are unable to resolve a discovery matter or a dispute relating to a protective order, the parties involved in the discovery matter or protective order dispute shall submit a joint letter in substantially the following form:
Dear Judge Stark:
 The parties in the above-referenced matter write to request the scheduling of a discovery teleconference.
 The following attorneys, including at least one Delaware Counsel and at least one Lead Counsel per party, participated in a verbal meet-and-confer (in person and/or by telephone) on the following date(s): __________________________
Delaware Counsel: ____________________
 Lead Counsel: ________________________
 The disputes requiring judicial attention are listed below:
 [provide here a non-argumentative list of disputes requiring judicial attention]
c. On a date to be set by separate order, generally not less than forty-eight (48) hours prior to the conference, the party seeking relief shall file with the Court a letter, not to exceed three (3) pages, outlining the issues in dispute and its position on those issues. On a date to be set by separate order, but generally not less than twenty-four (24) hours prior to the conference, any party opposing the application for relief may file a letter, not to exceed three (3) pages, outlining that party’s reasons for its opposition.
d. Each party shall submit two (2) courtesy copies of its discovery letter and any attachments.
e. Should the Court find further briefing necessary upon conclusion of the telephone conference, the Court will order it. Alternatively, the Court may choose to resolve the dispute prior to the telephone conference and will, in that event, cancel the teleconference.
Motions to Amend
a. Any motion to amend (including a motion for leave to amend) a pleading shall NOT be accompanied by an opening brief but shall, instead, be accompanied by a letter, not to exceed three (3) pages, describing the basis for the requested relief, and shall attach the proposed amended pleading as well as a “blackline” comparison to the prior pleading.
b. Within seven (7) days after the filing of a motion in compliance with this Order, any party opposing such a motion shall file a responsive letter, not to exceed five (5) pages.
c. Within three (3) days thereafter, the moving party may file a reply letter, not to exceed two (2) pages, and, by this same date, the parties shall file a letter requesting a teleconference to address the motion to amend.

 

Motions to Strike
a. Any motion to strike any pleading or other document shall NOT be accompanied by an opening brief but shall, instead, be accompanied by a letter, not to exceed three (3) pages, describing the basis for the requested relief, and shall attach the document to be stricken.
b. Within seven (7) days after the filing of a motion in compliance with this Order, any party opposing such a motion shall file a responsive letter, not to exceed five (5) pages.
c. Within three (3) days thereafter, the moving party may file a reply letter, not to exceed two (2) pages, and, by this same date, the parties shall file a letter requesting a teleconference to address the motion to strike.
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Judge Leonard P. Stark recently considered Google’s motion to stay proceedings brought by NPE Walker Digital pending the conclusion of the Patent Trial and Appeal Board’s (“PTAB”) Covered Business Method (“CBM”) review of the patents-in-suit.  Walker Digital, LLC v. Google, Inc., C.A. No. 11-318-LPS (D. Del. June 24, 2014).  Judge Stark ultimately determined that no factor favored a stay.  Regarding simplification of issues, Judge Stark noted that the estoppel effects of the CBM process could simplify issues in this case (even if the PTAB does not cancel all of the asserted claims), but not by much because the PTAB rejected several of Google’s grounds for CBM review.  Id. at ¶ 3.  In addition, the fact that discovery was complete and all case dispositive motions had been fully briefed, “strongly disfavor[ed] a stay.”  Id. at ¶ 4.  Prejudice to Plaintiff, Walker Digital, also disfavored a stay because, while it is true that Walker Digital is an NPE, “it is also true that the longer Google is allowed to engage in allegedly infringing activity, the lower the value of the patents becomes as licensing assets.”  Id. at ¶ 5.  Last, a stay would not alleviate any burden to the Court or the parties due to the late stage of the case.  Id. at ¶ 6.

 

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In SecureBuy, LLC v. CardinalCommerce Corporation, C.A. No. 13-1792-LPS (D. Del.  June 16, 2014), Judge Leonard P. Stark construed the following disputed claim terms of U.S. Patent Nos. 8,140,429; 7,051,002; and 7,693,783:

-“authentication program”

-“authentication protocol”

-“authentication determination”

-“connection layer”

-“distribution layer”

-“plug-in layer”

-“means for determining from the payment information received at the universal platform server, for each commercial transaction, which of the different authentication protocols is prescribed by the payment network for the type of payment instrument identified in the payment information”

-“means for determining from the payment information received at the server which of the
different authentication protocols is prescribed for the type of payment option identified in the payment information”

-“means for selecting, in accordance with the determination of step (b), a particular authentication protocol from the plurality of different authentication protocols supported by the universal platform server”

-“means for selecting, in accordance with the determination made by the means for determining, a particular authentication protocol from the plurality of different authentication protocols supported by the server”

-“Universal platform server”

-”payment option,” “payment instrument,” and “payment information”

-”first party,” “second party,” “third party,” and “fourth party”

-”Obtaining an authentication determination for the transaction in accordance with the selected protocol,” “obtaining an authentication determination from a fourth party in accordance with the authentication protocol,” and “obtain an authentication determination in accordance with its associated authentication protocol.”

-“means for obtaining an authentication determination for the commercial transaction in accordance with the selected authentication protocol, including formatting messages and routing the formatted
messages over the communications network in accordance with one or more mandates of the selected authentication protocol.”

-“means for obtaining an authentication determination for the commercial transaction in accordance with the selected authentication protocol, including formatting messages and routing the formatted messages”

-“means for returning the obtained authentication determination to the first party’s server”

- “means for returning the obtained authentication over the communications network to a designated entity”

- “Plug-in/Plug-in component”

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In a recent memorandum order, Judge Leonard P. Stark entered a preliminary injunction in a suit involving GPS modules supplied to the Ford Motor Company.  M/A-COM Technology Solutions Holdings, Inc. v. Laird Techs., Inc., C.A. No. 14-181-LPS (June 13, 2014) (public version June 16, 2014).  The plaintiff had, for several years, been Ford’s sole supplier of GPS modules for installation in its automobiles, but the defendant won a contract with Ford to supply GPS modules beginning with a shipment in mid-July 2014.  The plaintiff responded by filing suit and alleging that the defendant’s GPS modules infringed the plaintiff’s patent.

The Court allowed limited discovery, following by full briefing, oral argument, witness testimony, and supplemental briefing, and ultimately found that a preliminary injunction was justified.  The Court found that the plaintiff would likely prevail at proving infringement, and specifically rejected the defendant’s proposed constructions of certain terms that would limit their scope and exclude a disclosed embodiment in order to avoid infringement.  The Court also found that the plaintiff would likely prevail at showing that the defendant was not given rights to infringe through a license agreement between the plaintiff and Ford, and that the defendant failed to raise a substantial question concerning invalidity based on anticipation or obviousness.

The Court next considered whether the plaintiff demonstrated that it would be irreparably harmed absent a preliminary injunction.  The Court found that the plaintiff’s relationship with Ford was threatened with damage that could not be fully remedied through money damages in the form of price erosion and damage to its relationship with Ford.  And although the Court found that a preliminary injunction would significantly harm the defendant, that harm was outweighed by the harm the plaintiff would experience absent an injunction.

Lastly, the Court found that the balance of competing public interests weighed in favor of an injunction.  In this analysis the Court considered the interest in protecting patent rights, and also the interest in encouraging patent litigation to proceed at a reasonable pace—with parties not rushing to Court when a concrete dispute may never ripen (the defendant accused the plaintiff of unduly delaying the litigation), outweighed the “disruptive effect” the injunction would have no Ford, especially since Ford “has not appeared and nothing in the record would support a finding that Ford (and, through Ford, the public) will be harmed as a result of” an injunction.
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On Wednesday, June 18, Judge Leonard P. Stark published a new form scheduling order on the District of Delaware web site for non-ANDA patent cases, as well as a new form pre-trial order for patent cases, a new set of “Procedures for Managing Patent Cases,” and a “Case Management Checklist” for use in patent Rule 16 conferences. These changes are in response to feedback from the Patent Study Group (discussed here). Unless otherwise ordered, these Revised Procedures will govern all non-ANDA patent
cases filed on or after July 1, 2014 that are assigned to Judge Stark.

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