Articles Posted in Richard G. Andrews

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In a recent Memorandum Opinion, Judge Richard G. Andrews denied defendants’ (“ZTE”) renewed motion for judgment as a matter of law of non-infringement as to U.S. Patent Nos. 7,190,966 (“the ’966 patent”) and 7,286,847 (“the ’847 patent”). InterDigital Communications, Inc. v ZTE Corp., C.A. No. 13-009-RGA (D. Del. Mar. 18, 2016). Judge Andrews found that the testimony of plaintiffs’ (“InterDigital”) infringement expert provided substantial evidence to support the jury’s findings. Id. at 6-9. Notably, as to one contested limitation, Judge Andrews explained that while ZTE “does not have the burden of proving non-infringement, . . . it seems . . . that ZTE should have challenged [InterDigital’s expert’s] testimony if ZTE believed it lacked support.”

Judge Andrews also denied ZTE’s motion for a new trial as to the ’847 and ’966 patents, rejecting ZTE’s argument that the validity and infringement verdicts were inconsistent. Id. at 9-10. Judge Andrews also found that while InterDigital “probably exceeded the scope” of Judge Andrews’ ruling on the permissible use of certain licensing evidence, those licensing references “were [not] sufficiently prejudicial to warrant a new trial.” Id. at 10. Similarly, Judge Andrews found that InterDigital’s use of “an impeachment ‘scoreboard’ in closing argument” did not warrant a new trial. Id. at 11. As Judge Andrews explained, “[t]he jury was instructed that it was the sole judge of credibility and that arguments made by attorneys were not evidence,” and that the “jury was entitled to determine for itself whether the alleged impeachments showed inconsistent testimony.” Id.

Judge Andrews also noted that the PTAB has invalidated all claims of U.S. Patent No. 8,380,244 (“the ’244 patent”), another patent-in-suit. InterDigital has appealed that determination to the Federal Circuit where it is now pending. Id. at 2. Judge Andrews thus concluded that “[i]n view of the doubt as to [the] validity of this patent, . . . it makes sense to postpone resolution of the JMOL until the Federal Circuit rules.” Id. at 9.

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In EMC Corporation, et al. v. Pure Storage, Inc., C.A. No. 13-1985-RGA (D. Del. Mar. 15, 2016), Judge Richard G. Andrews granted Defendant’s motion for judgment as a matter of law that the accused products did not infringe one claim of the asserted patent under the doctrine of equivalents. Plaintiffs pointed to their expert’s testimony as a sufficient basis for the infringement claim, but the Court found this testimony “conclusory” and “fail[ing] to provide the particularized testimony and linking argument required by the Federal Circuit.” Id. at 1 (quotations omitted). Further, Plaintiffs had not “present[ed] any evidence from which the jury could find equivalence on the basis of insubstantial differences or known interchangeability.” Id. at 1-2.

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In Raindance Technologies, Inc. v. 10X Genomics, Inc., C.A. No. 15-152-RGA (D. Del. Mar. 4, 2016), Judge Richard G. Andrews dismissed Plaintiffs’ amended complaint for patent infringement under the heightened pleading standard of Iqbal/Twombly–as opposed to the standard under Rule 84–despite the fact that the amended complaint was filed before December 1, 2015. Judge Andrews granted Plaintiffs leave to replead, explaining that while “Plaintiffs have not plausibly alleged any infringement, . . . Plaintiffs might very well be able to do so, particularly if they have analyzed [Defendant’s] products and not just its website.” Id. at 5. Explaining his application of Iqbal/Twombly, Judge Andrews noted the following:

Effective December 1, 2015, Federal Rule of Civil Procedure 84 and the Appendix of Forms were “abrogated.” Under existing standards, that is, Iqbal and Twombly, it is clear to me that Plaintiffs have not plausibly alleged indirect infringement on Counts I and III (and, I expect, on Counts IV through VII, although in the interest of conserving resources, I am not going to decide that now). Further, I believe that I have discretion whether or not to apply the post-December 1, 2015 direct infringement pleading standard to the amended complaint, and I believe that it would be in the interest of justice to do so. I also note, to foreclose future unnecessary argument, that for indirect infringement, Defendant’s knowledge of the patents is established at least as of the filing of the lawsuit.

Id. at 4-5. More specifically, in dismissing Count I, Judge Andrews noted that “[t]here is nothing in the complaint (at least so far as I can see) that hints at the role of pressure in Defendant’s products,” as required by the claim language. Id. at 3. (emphasis added). As to Count III, Judge Andrews explained that “[i]t is not obvious to me that what Plaintiffs describe is an ‘autocatalytic reaction,’” as stated in the claim language. Id. at 4 (emphasis added). Judge Andrews explained that “[t]he requirements of the next to last element might be met, but involves quite a bit of supposition.” Id.

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These related patent infringement cases have resulted in several opinions by Judge Andrews, including a summary judgment opinion and a Daubert opinion in a related case against Telit. In this opinion, Judge Andrews considered a few issues not already addressed by his Telit opinion.

Considering a challenge to Defendant’s damages expert, Judge Andrews found that the expert had not shown a “basis in fact to associate the royalty rates used in [certain] prior licenses to the particular hypothetical negotiation at issue in [this] case” as required by Uniloc. The expert’s purported basis for comparability of the licenses was his discussions with the Defendant’s technical expert, yet Judge Andrews found that both experts “make almost zero reference to the specific technology involved in either the [asserted] patent or the [purportedly comparable] licenses, aside from the hazy reasoning that they all relate to product features rather than core technology.” Such “loose, vague allegations of technological comparability, without any explanation, are insufficient, and . . . invite the Court to blindly accept the unsubstantiated conclusions of [] experts . . . [which] are nothing more than ipse dixit.” M2M Solutions LLC v. Enfora, Inc., et al., C.A. No. 12-32-RGA, Memo. Op. at 14-19 (D. Del. Mar. 9, 2016).

Judge Andrews provided a further reason for excluding the expert’s testimony: the “analysis virtually ignores the fact that these two licenses resulted from litigation settlements, providing a drastically different backdrop than the hypothetical negotiation involving two willing licensors, as would be the case here.” Characterizing Federal Circuit precedent on the point as “hostile toward using litigation settlement agreements in proving a reasonable royalty, except in limited circumstances,” Judge Andrews pointed out that the “settlement licenses here were not for the patent-in-suit and are only connected to the claimed invention by vague conclusions from Defendants’ experts.” Because the expert “ignore[d] the settlement context altogether and focuse[d] on the fact that the licenses were between Enfora and a non-practicing entity, [u]nder [the expert’s] rationale, any license between Enfora and a non-practicing entity would be economically comparable to a hypothetical negotiation between Enfora and a different non-practicing entity, regardless of the specific technology or whether the licenses resulted from litigation settlements. These unsubstantiated conclusions about economic comparability, lacking in analysis, again provide nothing more than ipse dixit.” Id. at 19-20. Moreover, Judge Andrews rejected the argument that the incomparable licenses could be used only as a “sanity check” rather than as the heart of a damages analysis. Id. at 20. Accordingly, the Court excluded any use of the incomparable licenses.

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In a series of related actions brought by the Plaintiffs, Judge Richard G. Andrews considered Defendants’ motion to compel compliance with subpoenas issued to a third party and former owner of the patents, and Plaintiffs’ motion to amend the complaint to add willfulness allegations. E.g., Delaware Display Group LLC, et al. v. Lenovo Group Ltd., et al., C.A. No. 13-2108-RGA (D. Del. Feb. 23, 2016).

As to the motion to compel, Defendants sought “discovery of teardown reports [i.e., “technical analysis on products supplied by” one party to another” created by [the former owner of the patents] after a March 25, 2013 consulting agreement, unredacted royalty reports . . . and email communications [between Plaintiffs and other third parties regarding the teardown work ].’”  Id. at 3-4. Plaintiffs and the non-party opposed the motion, but the Court had previously concluded that all the documents were in the possession of Plaintiffs, and thus the only issue was whether Plaintiffs were obligated to produce the documents. Id. at 4.

The Court granted the motion to compel in part, after running through a number of questions as to the potentially privileged or protected nature of the documents. As to the “teardown reports,” prepared by the former owner pursuant to an agreement with another non-party, they were neither attorney work product nor protected as non-testifying expert discovery, as the reports were prepared by and for non-parties. See id. at 6-9. They were also not protected by a common interest privilege, as the Court found no common interest between the parties to the agreement, noting that “Plaintiffs argue that [those parties] share the same interest in obtaining strong and enforceable patents,” but “Plaintiffs’ logic would find that any seller with rights to royalty payments is engaged in a common legal cause with its buyer. Id. at 11-12 (citations and quotations omitted). Accordingly, the Court granted the motion to compel as to the teardown reports. Similarly, the email communications regarding the teardown work were also not privileged. Id. at 15-16. However, the Court did not order production of the teardown emails, as Defendants had failed to comply with a prior discovery order. Therefore the motion to compel was denied to the extent it sought to compel production of the teardown emails “without complying with the procedures outlined” in that discovery order. Id. at 16.

As to the unredacted royalty reports, the Court rejected Plaintiffs’ argument that these documents contained information about their non-testifying experts. Further, Plaintiffs tried to argue the documents’ disclosure of “attorney’s fees paid in conjunction with licensing and litigating the patents-in-suit against other companies,” while not privileged, was irrelevant and highly sensitive. Id. at 13-14. While the Court was “skeptical” as to the relevance of these documents and recognized their sensitivity, it ordered production, noting that the case’s protective order only allowed withholding of production based on a privilege or immunity and that “in the absence of such an assertion of protection . . . a party may not redact information it unilaterally deems sensitive, embarrassing, or irrelevant. If Plaintiffs feel the Protective Order was inadequate, they could have moved to modify it.” Id. at 14-15.

Finally, as to Plaintiffs’ motion for leave to amend, the Court denied it as unduly delayed, where it was filed on the last day of fact discovery and two years after filing the Complaint. The Court rejected Plaintiffs’ argument that the motion was timely because the parties had previously agreed to a deadline for filing motions to amend to plead willfulness, explaining that while timeliness under a scheduling order is “certainly relevant,” it is not dispositive, citing Third Circuit law on the definition of undue delay as placing an unwarranted burden on the court or when plaintiff has had previous opportunities to amend. Here, “Plaintiffs have already amended the complaint once in [several of the related] actions. Plaintiffs provide no explanation for why they did not seek leave earlier or why the allegations of willfulness were not included in earlier amendments. Plaintiffs’ only ‘reason[] for not amending sooner’ appears to be that the scheduling order’s deadline had not yet elapsed. Given that this motion was filed on the last possible day, which was also the date that fact discovery was scheduled to close, and the delay in filing appears to have been an intentional effort to wait until the last moment, that does not suffice,” and the motion was denied. Id. at 20.

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In a recent Order, Judge Richard G. Andrews denied Plaintiffs’ request to file a motion for summary judgment of infringement in an ANDA action. Impax Laboratories Inc., et al. v. Lannett Holdings Inc., et al., C.A. No. 14-984-RGA (D. Del. Feb. 29, 2016).

In opposition to Plaintiffs’ request, Defendants argued that “Plaintiffs’ response to Defendants’ discovery is barely started.” Judge Andrews found, however, that while that may be true, the issue for infringement is “(1) construction of the claims, which has already been done, and (2) comparison of the claims with the accused ANDA product.” (internal citation omitted). Judge Andrews thus found that “Plaintiffs’ allegedly deficient discovery responses seem to be a makeweight argument.”

However, Defendants also asserted that there is a “genuine factual dispute over the composition of the accused ANDA product.” Judge Andrews found that expert reports, “which will not be finished until late May at the earliest, will be necessary to decide whether there is, or is not, a dispute, and, if there is, what the evidence will show about who has the better argument.” Judge Andrews was thus “dubious about how helpful a summary judgment motion might be.” Judge Andrews also noted that “the schedule for this case really does not have sufficient time built into it for orderly summary judgment practice.” Judge Andrews thus concluded that “I do not believe that summary judgment practice would be efficient or productive,” and ultimately denied Plaintiffs’ request.

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In a recent Memorandum Opinion, Judge Richard G. Andrews granted both (i) defendant’s motion to exclude the testimony of plaintiff’s damages experts Mr. Herman “Whitey” Bluestein and Mr. Richard Bero, and (ii) plaintiff’s motion to exclude the opinion of Mr. Charles Donohoe on a running royalty rate. M2M Solutions LLC v. Motorola Solutions, Inc., et al., C.A. No. 12-33-RGA (D. Del. Feb. 25, 2016). Judge Andrews first concluded that Mr. Bluestein’s testimony must be excluded for “three principal reasons”: “1) I do not think that Mr. Bluestein is qualified as an expert to render technical conclusions about the advantageous characteristics of the patented technology, 2) the Beacham Report[] [surveys] are completely unrelated to M2M device technology and any allegedly infringing features of the accused products, and 3) the only link between the Beacham Reports and the patented technology is provided solely by Mr. Bluestein’s say-so.” Id. at 5-6. As to the first reason, Judge Andrews explained that “while Mr. Bluestein may have considerable experience in the industry generally, he does not have the expertise (and he does not rely on others who do) to carefully tie his methodology (or, indeed, any methodology) to the ’010 patent’s footprint in the marketplace, especially when only providing vague platitudes about what that footprint is.” Id. at 7. As to the second reason, Judge Andrews explained that “[t]he Beacham Reports do not discuss M2M device technology at all, let alone provide any sort of discussion about particular security features of M2M devices.” Id. at 8. Finally, as to the third reason, Judge Andrews noted that “the linchpin of Mr. Bluestein’s damages theory-that Beacham Report survey respondents who indicated a preference for using internal resources to manage their M2M products use the patented technology-is unsupported by anything other than Mr. Bluestein’s say-so.” Id. at 9. And because Mr. Bluestein’s opinion provided the foundation for Mr. Bero’s reasonable royalty analysis, Judge Andrews also excluded Mr. Bero’s damages testimony. Id. at 13.

Judge Andrews also determined that the opinion of plaintiff’s expert, Mr. Donohoe, regarding a running royalty rate should be excluded. Judge Andrews found that Mr. Donohoe’s opinion “improperly relies on licenses that are not economically comparable to the ’010 patent.” Id. at 16. Specifically, “Mr. Donohoe has failed to show how . . . two large, worldwide, standard-essential, FRAND patent portfolios are economically comparable to a license that the parties would have negotiated for a single asserted patent.” Id. at 15. Judge Andrews explained that “[t]he negotiations surrounding the Company A and Company B portfolio licenses were undoubtedly ‘radically different’ than the hypothetical negotiation that would have occurred between the parties for a license to a single patent.” Id. at 16.

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In EMC Corporation, et al. v. Pure Storage, Inc., C.A. No. 13-1985-RGA (D. Del. Feb. 25, 2016), Judge Richard G. Andrews decided a number of pending motions in limine.

First, the Court concluded that Plaintiffs would not be precluded from introducing evidence of Defendant’s pre-suit knowledge of the patents-in-suit. While Plaintiffs were not seeking pre-suit damages for induced infringement, the Court agreed that knowledge of the patents could still be relevant to the existence of non-infringing alternatives: “[t]hat an accused infringer knew that a particular course of action would constitute patent infringement and yet chose that course anyway could call into question its assertion that acceptable non-infringing alternatives were available.” Id. at 2 (citations omitted). Defendant had also objected to this evidence as overly prejudicial to the extent that it implicated whether Defendant had improper access to the data of a company Plaintiffs had acquired (Data Domain). See id. at 2. The Court found the evidence’s probative value to outweigh any potential unfair prejudice, but recommended that the parties make proposals to reduce the probability that the jury could make improper inferences, and advised that “any hint of argument about improper conduct in relation to Data Domain’s technology would be grounds for a mistrial.” Id. at 5 & n.2. In connection with this motion, the Court also made individual determinations as to the relevance and admissibility of specific deposition testimony and exhibits.

The Court also precluded Plaintiffs from introducing evidence of an IPO valuation of Data Domain and the amount Plaintiffs paid to acquire this company, concluding that Plaintiffs had not shown a nexus between these amounts and the claimed inventions. See id. at 5-6. Even if Plaintiffs could demonstrate such a nexus, the Court concluded that the unfairly prejudicial effect of this evidence outweighed its probative value. Id. at 6.

Finally, the Court granted Plaintiffs’ motion to prevent Defendants from “introducing evidence of or argument based on [its] experts’ testimony that embodiments in the asserted patents’ specifications and commercial embodiments support their views about the plain and ordinary meaning of claim terms.” Id. at 6. The Court concluded that “[t]estimony that embodiments in a patent specification support an expert’s opinions regarding the plain and ordinary meaning of claim terms would amount to claim construction and suggest that literal infringement can be established by a comparison between accused products and specification embodiments” and, similarly, that “[t]estimony that commercial embodiments support an expert’s opinions regarding the plain and ordinary meaning of claim terms would suggest that literal infringement can be established by a comparison between accused products and commercial embodiments.” Id. at 8. However, Defendant’s experts would not be precluded from “making any reference whatsoever to patent specifications and commercial embodiments. Should [Defendant’s] experts refer to specification or commercial embodiments in the course of their testimony regarding the plain and ordinary meaning of claim terms, the determination whether the testimony amounts to claim construction will have to be made on an objection by objection basis in the context of the trial.” Id. at 9. The experts were also not wholly precluded from relying on extrinsic evidence to support their views on plain and ordinary meaning. Id.

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Judge Richard G. Andrews recently considered Apple Inc.’s motion to dismiss Chestnut Hill Sound Inc.’s claims of willful infringement and indirect infringement.  Chestnut Hill Sound Inc. v. Apple Inc., C.A. No. 15-261-RGA (D. Del. Feb. 29, 2016).  Judge Andrews denied the motion as to willfulness allegations based on meetings that took place years before the patents issued because “it is plausible that [Apple] either tracks suggestions of patent infringement, or would be reckless in not doing so.”  But, Judge Andrews did note that Apple may renew the motion if the cases pending before the United States Supreme Court subsequently change the law on willfulness.  Judge Andrews also denied the motion as to inducement claims, but agreed to dismiss Chestnut Hill’s “formulaic” contributory infringement claims.

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Judge Andrews has rejected a challenge to the standing of Plaintiff EMC to sue on two patents. The two patents were originally assigned by their inventors to a company called Data Domain, Inc., which was acquired by EMC in 2009. EMC then reorganized its business in several steps governed by an overarching Reorganization Agreement: “First, Data Domain, Inc. was converted to Data Domain LLC. Second, Data Domain LLC assigned ‘all right, title and interest’ in its intellectual property, including the deduplication patents, to Data Domain Holding, Inc. (‘New Data Domain’). Third, New Data Domain entered a License and Assignment Agreement (‘EIC License Agreement’) with EMC International Company (‘EIC’). Fourth, EIC granted an exclusive sublicense to EMC Information Systems International (‘EISI’). Fifth, New Data Domain transferred ‘all right, title and interest’ in its intellectual property to EMC Corporation. Additionally, EMC Corporation became an authorized reseller of Data Domain products.” EMC Corp., et al. v. Pure Storage, Inc., C.A. No. 13-1985-RGA, Memo. Op. at 2-3 (D. Del. Feb. 29, 2016).

The standing arguments turned on interpretation of the EIC License Agreement between New Data Domain and EIC. According to EMC, The EIC License Agreement granted a limited exclusive license from New Data Domain to EIC but expressly retained the primary right to sue and control litigation, which was subsequently assigned to EMC. According to Defendant Pure Storage, however, the EIC License Agreement, when read in light of the Reorganization Agreement, granted EIC “all substantial rights” in the patents-in-suit, and New Data Domain retained only an ability to “control and direct” infringement litigation on behalf of EIC. Thus, Pure Storage argued, New Data Domain did not retain all substantial rights and did not transfer all substantial rights to EMC. Pure Storage also contended that intrinsic evidence supported its position. Id. at 7-8.

Judge Andrews agreed that the EIC License Agreement and the Reorganization Agreement should be read together and found that the two agreements were not inconsistent or ambiguous. Judge Andrews went on to find that New Data Domain had “retained the primary right to sue for infringement in the EIC License Agreement and subsequently assigned that right to EMC” because: “The EIC License Agreement established that New Data Domain retained the primary right to ‘control and direct the conduct of any actions necessary to prevent or terminate any infringement . . ., including the institution of legal proceedings.’ EIC was granted a secondary right to initiate infringement ‘[i]f New Data Domain fails to take timely action.’ EIC’s right to institute and control infringement litigation is restricted because EIC must submit a written request to take over the conduct and control of infringement litigation and New Data Domain ‘may consent thereto, such consent not to be unreasonably withheld.’” Id. at 9. Important to this finding that New Data Domain had more than mere authority to sue on behalf of EIC was the fact that “New Data Domain could enforce its intellectual property rights without consulting EIC” and that the EIC License Agreement specifically stated that it did not create a principal or agent relationship. Id. at 9-10. Additionally, New Data Domain’s retention of all substantial rights was further supported by the fact that it retained the right to make, use, or sell products embodying the patents at issue and to license the patents outside of its business, which rights later were assigned to EMC. Id. at 11-12. For all of these reasons, the Court held, EMC had standing to sue.

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