Chief Magistrate Judge Mary Pat Thynge recently issued a Report and Recommendation regarding defendant Amazon.com, Inc.’s motion for summary judgment of non-infringement. Hand Held Products, Inc. v. Amazon.com, Inc., et al., C.A. No. 12-768-RGA-MPT (D. Del. Jan. 21, 2016). The accused products at issue are Amazon mobile apps used by consumers to find and purchase Amazon products from their smartphones. Id. at 5. “One way the Amazon Apps can be used to find a product on Amazon is by scanning the barcode of the product.” Id. This barcode scanning ability is the feature accused of infringing the patent-in-suit. Id. Based on the Court’s claim construction, Amazon argued that “it is undisputed that a user of the Accused Apps cannot take the requisite snapshot by pressing a shutter button, setting a timer, or in any other manner.” Id. at 8 (emphasis in original). The Court agreed. “[T]he Accused Apps provide no mechanism by which a user selects an instant in time to capture a barcode image and, therefore, the Accused Apps do not infringe the asserted claims of the [patent-in-suit].” Id. (emphasis in original).
In Verisign, Inc. v. XYZ.com, LLC, et al., C.A. No. 15-mc-175-RGA-MPT (D. Del. Dec. 4, 2015), Chief Magistrate Judge Mary Pat Thynge considered a motion to quash subpoenas. The plaintiff in a false advertising action in the Eastern District of Virginia had served subpoenas on two non-parties, requesting documents related to the sale of a top-level domain name to defendants, agreements and communications related to this domain name and the plaintiff, and communications referencing other domain names. See id. at 3 (listing requested categories of documents).
The Court first found that defendants did have standing to challenge the subpoena, where the non-parties had not objected to the subpoena, explaining that while “[c]ourts have held that parties . . . do not have standing to a subpoena if they are not the target of the subpoena . . . other courts have found that parties who claim privilege or a personal right in the subpoenaed information from a nonparty have standing to object.” Id. at 4-5. Here, defendants alleged that the subpoenas requested “documents between defendants and KBE, who has worked closely with defendants on business transactions, and require the nonparties to disclose confidential information and trade secrets. These representations demonstrate sufficient interest in the requested documents to determine defendants’ standing.” Id. at 5.
The Court also concluded that plaintiff had not provided a reasonable time for response to the subpoenas. Although the non-parties had agreed to a short production turnaround period (five days from service), “the time allotted for compliance was unreasonable and effectively gave defendants one business day [due to holidays] and a total of five days to seek protection of documents, in which they had a sufficient interest.” Id. at 6.
Ultimately, the Court did order production of the subpoenaed documents over defendants’ objections that the requested information was irrelevant to the case in Virginia, that the documents could have been sought through defendants, and that the subpoenas requested proprietary information from whose production defendants would suffer irreparable harm. The Court did observe that it “question[ed] plaintiff’s need to subpoena [certain requested categories] when production of these documents was potentially obtainable from defendants. If any issue arose regarding such production, it then could have been addressed by the court having more familiarity with the underlying matter. To address defendants’ concerns, however, production of the above categories is ordered under the ‘Attorney’s Eyes Only’ designation provided for in the protective order [in the underlying action]. [However], as [one category of] requested documents, the court [found] there was no evidence that these documents contain trade secrets or confidential information of defendants.” Id. at 11.
Chief Magistrate Judge Thynge recently issued a report and recommendation in which she recommended denial of plaintiffs Astellas Pharma and Celgene Corp.’s motions to dismiss and motions to strike counterclaims, each of which she found to have been adequately plead. The challenged counterclaims and defenses were directed to (1) an improper continuation application under § 102(b) without which, the defendant alleged, the patents-in-suit would not have issued, (2) an improper priority date under § 120 due to failure to name the “true inventors” in the earlier application and an effort to amend inventorship that would result in no common inventors, and (3) improper inventorship under § 256 because the original patent was disclaimed under § 253 before any effort to correct inventorship, which Judge Thynge found to involve “sufficient facts to support improper inventorship, which warrants discovery on this issue.” Celgene Corp., et al. v. Fresenius Kabi USA, LLC, C.A. No. 14-571-RGA, Report and Recommendation at 6-8 (D. Del. Dec. 7, 2015).
Judge Thynge also rejected challenges to the defendant’s corresponding affirmative defenses, which were “neither improperly plead nor redundant. Affirmative defenses differ from counterclaims and are governed by Fed. R. Civ. P. 8, rather than Rule 13. Generally affirmative defenses must be initially pled or be subject to waiver of the defense. A counterclaim is governed by Rule 13. The party raising either an affirmative defense or a counterclaim bears the burden of proof. Counterclaims and affirmative defenses that raise the similar contentions are not improper.” Id. at 8. Additionally, because “[m]otions to strike under Rule 12(f) require a showing of prejudice” and the plaintiffs had not “alleged nor demonstrated any prejudice due to the analogous nature between defendants’ counterclaims and affirmative defenses,” Rule 12 provided no basis to strike the affirmative defenses. Id.
Chief Magistrate Judge Mary Pat Thynge recently granted a motion for summary judgment of invalidity under § 101 filed by Google relating to the Plaintiff’s search method patent. Collarity, Inc. v. Google Inc., C.A. No. 11-1103-MPT (D. Del. Nov. 25, 2015). Judge Thynge agreed with Google that the plaintiff’s patent claimed an abstract idea—“refining search queries . . . by switching some used words in the query but not others”—that could be performed on a general purpose computer or even by a human with pen and paper. The Court also found that the patent claimed no inventive concept. While the Plaintiff argued that the claims were specific to improving internet searching, Judge Thynge noted that the claims, themselves, never mentioned the internet at all. Finally, Judge Thynge disagreed with the Plaintiff’s argument that the PTO’s issuance, post-Alice, of a continuation patent that included nearly identical claim language showed that the Plaintiff’s patent was valid. As the Court explained, if the Plaintiff’s argument was correct, “any patent issued post-Alice would be inoculated from invalidity under Section 101. That is not the case.”
In Magnetar Technologies Corp., et al. v. Six Flags Theme Parks Inc., et al., C.A. No. 07-127-LPS-MPT (D. Del. July 21, 2015), Chief Magistrate Judge Mary Pat Thynge recommended granting-in-part Defendants’ motion for attorneys’ fees under section 285, but recommended denial of the motion for fees against Plaintiffs’ counsel under 28 U.S.C. § 1927.
The Court concluded that Plaintiffs’ litigation conduct was objectively unreasonable, making the case exceptional, in particular as to the asserted ‘125 patent that was ultimately found invalid by Chief Judge Stark in July 2014. While the Court rejected a number of Defendants’ arguments regarding the frivolousness of Plaintiffs’ claims, improper motivation for the suit, and objectively unreasonable conduct, see id. at 11-18, the Court agreed that Plaintiffs’ arguments on inventorship for the ‘125 patent were objectively unreasonable — namely, that it was so obvious that an individual not named on the patent was an inventor that the argument he was not was unreasonable. See id. at 18-21. The Court also concluded that Plaintiffs’ reliance on its expert was objectively unreasonable because they “knew or should have known their expert’s opinion fell well short of the Daubert standard.” Id. at 21. The Court had granted Defendants’ Daubert motion due to the expert’s unreliable methodology, “strongly criticiz[ing] his entire infringement analysis” and had cited “a laundry list of unanswered questions” in the report. Id. at 22. The Court’s “criticism demonstrates that [the expert’s] report so lacked any reliable methodology under the Daubert analysis and [Rule 702] that it should have been apparent to plaintiffs.” Id.
Having found the case exceptional based on inventorship issues and Plaintiffs’ reliance on its expert, the Court then narrowed the attorney fees available to Defendants to “reasonable attorneys’ and costs regarding the ‘125 patent related to incorrect inventorship since July 29, 2011 [when key inventor depositions occurred] and [Plaintiffs’] expert report when issued.” Id. at 26. Because Defendants’ current fee request was insufficiently detailed for the Court to determine whether, for example, the rates were reasonable, the Court ordered Defendants to address these issues in any subsequent modification. See id. at 26-27.
The Court then recommended denial of Defendants’ request for fees against Plaintiffs’ counsel under 28 U.S.C. § 1927. The current counsel assumed representation after Plaintiffs’ prior counsel had withdrawn in 2008. Id. at 5. The Court found no direct evidence that the new counsel knew the ‘125 patent was invalid due to incorrect inventorship, and rejected Defendants’ arguments as to unreasonable litigation conduct based. See id. at 28-30. Furthermore, the Court rejected the argument that maintaining the suit on the ‘125 patent after Defendants’ counsel sent two letters regarding the weaknesses of the claims rendered counsel liable, where Plaintiffs’ counsel had “promptly” responded to the letters, explained “in detail” why it disagreed with Defendants’ argument, and “expressed a willingness to continue a good faith dialogue.” Id. at 30.
Update: On September 30, 2015, having considered Plaintiffs’ objections to the Report and Recommendation and Defendants’ subsequent response, Chief Judge Stark returned the issue of attorney fees to Magistrate Judge Thynge for additional findings. See Magnetar Technologies Corp., et al. v. Six Flags Theme Parks Inc., et al., C.A. No. 07-127-LPS-MPT (D. Del. Sept. 30, 2015). In a footnote, the Court also highlighted the need to comply with the Court’s rules regarding page limits for responses to Report and Recommendation objections (10 pages) and the requirement to file redacted public versions of sealed filings. Id. at n.1.
In a recent Report and Recommendation, Magistrate Judge Mary P. Thynge found the court should deny plaintiff’s motion to dismiss and strike defendant’s counterclaim and affirmative defense of inequitable conduct. Andrulis Pharmaceuticals Corp. v. Celgene Corp., C.A. No. 13-1644-RGA (D. Del. Jul. 16, 2015). Defendant averred that an inventor and prosecution attorney of the asserted patent engaged in inequitable conduct when they submitted a “December 27, 1999 Response to the PTO, which omitted . . . substantive conclusions of [a] 1996 NYU interim report, and purported to show the ‘enhanced’ effect of thalidomide and carboplatin” for cancer treatment. Id. at 5.
Denying plaintiff’s motion, Judge Thynge first found that defendant pled inequitable conduct with particularity, explaining that defendant provided “the specific who, what, when, where and how” of the material omission. Specifically, Judge Thynge explained that defendant identified that the inventor and prosecuting attorney omitted substantive conclusions from the 1996 NYU interim report from its response to the PTO on December 27, 1999 (i.e., “who,” “what,” “when,” and “where”). Further, Judge Thynge found that defendant identified “how a reasonable examiner would have used the information allegedly concealed”: to determine that the claimed combination “did not have [an] enhanced effect relative to the effect of [carboplatin] alone.” Id. at 8-9 (emphasis added).
Judge Thynge next concluded that defendant sufficiently alleged underlying facts from which the court could infer but-for materiality, explaining that defendant pointed to: (i) “the conclusion by the researchers that the response rate for the combination was similar to the administration of carboplatin alone”; and (ii) the fact that “plaintiff [omitted] that conclusion and represent[ed] that the interim results instead showed an enhanced effect, on which the examiner relied in deciding to issue [the asserted patent].” Id. at 10. Judge Thynge also found that defendant sufficiently alleged that “plaintiff knew of and withheld material information with a specific intent to deceive the PTO.” Id. at 11. Judge Thynge pointed to several facts defendant relied on as evidence of plaintiff’s intent to deceive: “the interim conclusions were not submitted to the examiner, the conclusions found a similar, rather than enhanced, response rate, and plaintiff argued the interim data showed an enhanced effect.” Id.
In StrikeForce Technologies, Inc. v. PhoneFactor, Inc., C.A. No. 13-490-RGA-MPT (D. Del. May 26, 2015), Magistrate Judge Mary P. Thynge recommended denying plaintiff’s (“StrikeForce”) motion to amend its complaint to add allegations of infringement against Microsoft Corporation (“Microsoft”) pursuant to Fed. R. Civ. P. 15(a). StrikeForce acknowledged that “it was aware Microsoft acquired [defendant] PhoneFactor as its wholly-owned subsidiary in October 2012,” but argued that “it was only shortly before filing its motion to amend its complaint and join Microsoft that it became apparent PhoneFactor is not operating as an independent entity, purportedly necessitating the filing of that motion.” Id. at 3.
In reaching the recommendation to deny StrikeForce’s motion, Judge Thynge first concluded that StrikeForce’s “delay in seeking to join Microsoft was undue and its explanation for that delay insufficient to support granting its motion.” Id. at 10. Judge Thynge observed that “[d]espite StrikeForce giving Microsoft actual notice of the ‘599 patent, its belief that Microsoft was one of its ‘largest infringers,’ and Microsoft’s public announcement of its ‘phone based two factor authentication,’ StrikeForce did not name Microsoft as a defendant.” Id. at 7. Judge Thynge also noted that “StrikeForce waited almost twenty-two months after its CEO commented that Microsoft was ‘one of our largest infringers’ and almost nineteen months after filing its initial complaint, and after the Markman hearing was held, to seek to sue Microsoft for infringement in this case.”
In recommending denial of the motion, Judge Thynge also found that “StrikeForce’s ability to separately bring suit against Microsoft, as well as the disruption and delay of the schedule in the instant suit at this stage of the proceeding by the addition of Microsoft, would prejudice PhoneFactor and disrupt the orderly continuation of this case under the current scheduling order.” Id. at 12. Judge Thynge found it notable that StrikeForce “filed its motion to amend after the claim construction hearing had taken place.” Id.
Chief Magistrate Judge Thynge recently issued a report and recommendation addressing a patent infringement defendant’s motion to dismiss for failure to state a claim of joint infringement and recommending that the motion be granted. Two-Way Media Ltd. v. Verizon Commc’ns Inc., et al., C.A. No. 14-1212-RGA-MPT, Report and Recommendation at 1-2 (D. Del. May 18, 2015).
Judge Thynge first found that the allegations of the complaint, “viewed in the light most favorable to plaintiff, are sufficient to support the inference that defendants and the third parties carry out all steps claimed in the patents-in-suit.” Id. at 9-10. Although the defendant objected to a phrase in the allegations as “insufficiently precise” and unrelated to the claims of the patents-in-suit, Judge Thynge found that the allegation related to a specific claim of a patent-in-suit and suggested that any ambiguity should be the subject of claim construction rather than a motion to dismiss. Id.
With respect to defendant’s direction and control over the third parties, however, Judge Thynge found that the complaint did not adequately state a claim of joint infringement. “This court is required to take plaintiff’s factual allegations as true, but plaintiff cannot plausibly allege the third parties were contractually obligated to perform all of the steps enumerated in plaintiff’s patents because the terms of the contracts between defendants and the third parties are unknown to plaintiff. . . . Even if Fed. R. Civ. P. 12(b)(6) allowed this court to look outside the record at the extrinsic materials submitted by plaintiff in its response to the motion to dismiss, it would find the third parties were independent businesses providing statistical services to multiple clients using what appears to be proprietary metrics. Thus, it is merely possible—rather than plausible—that defendants control and direct the third parties.” Id. at 13-14.
Chief Magistrate Judge Mary Pat Thynge recently issued a report recommending that a motion to dismiss a claim for joint infringement be granted. Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC, et al., C.A. No. 14-1006-RGA-MPT (D. Del. May 13, 2015). Judge Thynge explained that “to survive a motion to dismiss the claim of joint infringement, a plaintiff must plead facts sufficient to allow a reasonable inference that various parties perform all of the claimed steps; and one party exercises the requisite ‘direction or control,’ such that performance of every step is attributable to the controlling party.” Id. at 8. Judge Thynge found that the plaintiff’s allegations were sufficient to support an inference that all steps claimed in the patents-in-suit were carried out by defendants and various third parties. However, “[h]ere, plaintiff sets forth an unsupported proposition that Comcast and NBCU control or direct the third parties, despite conceding the issue of control and direction turns on whether the third parties had discretion to perform the claim limitations.” Id. at 11. In this case, Judge Thynge found that “plaintiff cannot plausibly allege the third parties were contractually obligated to perform all of the steps enumerated in plaintiff’s patents because the terms of the contract between defendants and the third parties are unknown to plaintiff.” Id. “Thus, it is merely possible—rather than plausible—that defendants control and direct the third parties.” Id. at 12.
Chief Magistrate Judge Mary Pat Thynge recently issued a report recommending the denial of a plaintiff’s motion which sought to accelerate an appeal of the Court’s ruling that Claims 113 and 114 of U.S. Patent No. 7,783,299 are invalid. TruePostition, Inc. v. Polaris Wireless, Inc., C.A. No. 12-646-RGA-MPT (D. Del. Mar. 3, 2015). Claims 113 and 114 previously had been found indefinite after a Markman hearing, but the parties were still litigating factual issues relating to a third claim, Claim 98. With respect to Rule 54(b) certification, Judge Thynge explained, “the three asserted claims must be viewed as part of a single action for relief based on infringement. Claims 113 and 114 have been resolved; Claim 98 has not. As a result, the single right of action for relief based on infringement of the ‘299 Patent is not final within the meaning of Rule 54(b).” Id. at 8. With respect to voluntary dismissal without prejudice under Rule 41(a)(2) of the remaining Claim 98 infringement claim, Magistrate Judge Thynge viewed such a dismissal as unwarranted given that the parties already had expended significant amounts of their time, and the Court’s time, on issues relating to the Claim 98. Id. at 13-14. As a result, the plaintiff’s motion was denied.