Articles Posted in Leonard P. Stark, Chief Judge

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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.

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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. 

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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.

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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.

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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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