Judge Sue L. Robinson recently denied defendants’ renewed motion to stay pending reexamination pending since September 14, 2012 and “with no predictable end in sight.” Carrier Corporation v. Goodman Global, Inc., et al., No. 12-930-SLR (D. Del. Apr. 11, 2016). In denying the motion, Judge Robinson noted: “Given that it was defendants’ choice to opt for inter partes reexamination rather than inter partes review (available as of September 17, 2012), I see no reason to revisit my prior decision to conclude the litigation.” Id. at 1. Judge Robinson previously granted defendants’ motion for a new trial because of improper statements made by plaintiff’s counsel during closing argument. For the upcoming new trial, Judge Robinson declined to revisit the Court’s original decision to bifurcate willfulness and damages, noting that “this case is the poster child for bifurcation in terms of the complexity (created by the parties) of the liability issues[.]” Id. at 2.
In this case, Judge Robinson had previously granted a motion for summary judgment of invalidity and non-infringement based on Section 101, which the plaintiff unsuccessfully appealed to the Federal Circuit. Judge Robinson has now found that the plaintiff’s litigation tactics were unreasonable and not excused by the shifting jurisprudence of Section 101. Joao Bock Transaction Systems, LLC v. Jack Henry & Associates, Inc., Memo. Or. at 6-7 C.A. No. 12-1138-SLR (D. Del. Mar. 31, 2016). Her Honor explained that “[t]he posture of this case stands out from other cases,” including the plaintiff’s motion to dismiss counterclaims that “included numerous details supporting its belief [of] invalidity” (id. at 3-4); plaintiff’s claim construction positions, which included new definitions for certain claim language which were provided for the first time during claim amendment before the PTO and “were added for litigation purposes” (id. at 6); and plaintiff’s infringement claim charts which “accused 65 products of infringing 36 claims,” which plaintiff narrowed only to “representative” products following the Court’s order to narrow, and which continued to undergo revisions and additions (id. at 4-5).
Based on this conduct, Judge Robinson found that “Plaintiff cannot complain that defendant’s resistance to the idea of representative products is the reason for the discovery burden, when plaintiff refused to narrow the scope of its infringement allegations for over a year and significant discovery was performed before plaintiff suggested this approach. Moreover, for the same reasons, plaintiff’s burden of reviewing the discovery on the allegedly infringing products was one of its own making. Plaintiff’s claim construction positions . . . and its lack of a coherent infringement theory (evidenced by its shifting infringement positions) contributed greatly to the discovery burden. . . . While each individual action by plaintiff may not have been ‘exceptionally’ unreasonable, the totality of the circumstances of the present action are indicative of the type of ‘exceptional case’ that justifies an award of fees. That defendant’s motion for invalidity was granted on the § 101 issue does not negate the ‘exceptional’ nature of the case, when the record indicates that plaintiff pursued litigation so inefficiently as to be objectively unreasonable and burdensome for defendant and the court.” Id. at 6-7.
Moreover, Judge Robinson rejected the “contention that defendant may only be compensated for its expenses related to the § 101 issue. As plaintiff has conceded, that area of law was at the time (and even today) evolving. Judicial economy (not defendant) is responsible for the court’s decision not to reach additional issues once defendant succeeded on this issue at the summary judgment phase. . . . Taking into account that patent cases are complex and patent litigation is an expensive proposition, nevertheless, the court will award attorney fees of $1,000,000 to account for the fact that plaintiff’s ever changing litigation strategies (including its claim construction positions) created a tortuous path to resolution.” Id. at 8-9. Judge Robinson denied, however, a motion for additional fees, finding that plaintiff’s appeal to the Federal Circuit “was reasonable and not exceptional.” Id. at 9 n.14.
Judge Sue L. Robinson recently considered Sony Corporation’s motion for attorneys’ fees pursuant to 35 U.S.C. § 285. Apeldyn Corporation v. Sony Corporation, et al., C.A. No. 11-440-SLR (D. Del. Mar. 31, 2016). Judge Robinson previously granted Sony’s motions for summary judgment of non-infringement due to collateral estoppel and invalidity. Sony argued that this case was exceptional and that fees were warranted because “plaintiff pursued objectively unreasonable infringement and validity positions, which were barred by collateral estoppel.” Id. at 4. Judge Robinson noted, however, that defendants opposed an early motion for summary judgment on collateral estoppel. Id. Judge Robinson concluded the case was not exceptional:
The court expended considerable effort in reaching its invalidity determination, including resolving a claim construction dispute for a limitation not construed in the previous litigation. (D. I. 198 at 20) The court is not persuaded that plaintiff was so lacking a good faith belief of validity as to merit awarding exceptional case status under § 285.
Id. at 4-5.
Judge Sue L. Robinson recently considered and denied Ricoh Americas Corporation’s motion for judgment on the pleadings that Intellectual Ventures I LLC’s image scanning method patent is invalid under 35 U.S.C. § 101. Intellectual Ventures I LLC v. Ricoh Americas Corporation, et al., C.A. No. 13-474-SLR (D. Del. Mar. 22, 2016). Ricoh argued that the patent “‘simply claims an unpatentable mathematical formula used in a generic prior art scanner,’ which formula can be performed mentally or with a pen and paper.” Id. at 14. Judge Robinson disagreed, noting that the asserted claim does not claim a mathematical formula or method to implement such a formula. Id. Therefore, Judge Robinson concluded that the claimed invention was not directed to an abstract idea. For “completeness” Judge Robinson analyzed step 2 of the Alice framework, i.e., whether the claims recite a known business practice merely implemented using computer technology. Id. at 5. Judge Robinson analyzed the claim language and concluded that it described with “sufficient specificity” how the claimed method operates the scanner, “thereby disclosing an ‘inventive concept.'” Id. at 15.
In Network Congestion Solutions, LLC v. United States Cellular Coporation, C.A. No. 14-903-SLR; v. Wideopenwest Finance, LLC, C.A. No. 14-904-SLR (D. Del. Mar. 22, 2016), Judge Sue L. Robinson denied defendants’ motions to dismiss for lack of patenable subject matter.
The patent-in-suit generally related to systems and methods for alleviating congestion in a communication network. See id. at 14-15. The Court first concluded that the claims were not directed to an abstract idea, finding the claims analogous to those held valid in DDR Holdings as “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.” Id. at 16 (quoting DDR Holdings). “That defendants are able to come up with a human equivalent of ‘resource control management’ does not render the claims at bar similar to methods that ‘merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet.” Id. The Court also concluded that the claims had an inventive concept: “[a]lthough defendants argue that the environment and devices are well known in the prior art and cannot provide an inventive concept, the claim as a whole (the equipment recited and steps claimed) provides the requisite degree of specificity. Moreover, the claims are directed to a solution for a problem that arises in the computer context. This specificity also suffices to alleviate concerns of pre-emption.” Id.
This case involves an assertion of U.S. Patent No. 8,180,858, titled “Method and System for Presenting Data Over A Network Based On Network User Choices and Collecting Real-Time Data Related to Said Choices,” against Valve, a company that makes and sells video games and runs a digital distribution platform for video games. The Plaintiff accused three of Valve’s games of infringing the patent-in-suit by running in-game “shops” that “allow users to select virtual items and in-game features.” Treehouse Avatar LLC v. Valve Corp., C.A. No. 15-427-SLR, Memo. Op. at 22 (D. Del. Mar. 22, 2016). Valve is incorporated in the State of Washington and has its principal place of business in Washington. Valve moved to transfer to the Western District of Washington, which both parties agreed would be a proper venue. Id. at 1-3.
Valve argued that the choice of forum in Delaware should be given less deference because the Plaintiff “incorporated in Delaware weeks before filing the action at bar” and the plaintiff’s “home turf” should therefore be deemed its principal place of business in Ottawa. Judge Robinson denied the motion to transfer, explaining that “[b]usiness entities choose their situs of incorporation for varied reasons, including the ability to sue and be sued in that venue. . . . It is of no consequence that plaintiff appears to be a non-practicing entity; such a business strategy is not nefarious. The court declines to treat such non-practicing entities as anything less than holders of constitutionally protected property rights, those rights having been legitimized by the [PTO].” Additionally, “Defendant [had] not indicated that any particular witness who may be called upon to testify at trial would be unwilling to do so. . . . [and] this court’s view is that virtually all businesses maintain their books and records in electronic format readily available for review and use at any location.” Id. at 4-8. Moreover, Judge Robinson explained, “because very few cases are resolved through trial, and because trials in most busy districts are of limited duration, this factor should not be accorded significant weight. It certainly should not become the tail that wags the dog.” Id. at 6-7.
Valve also filed a motion to dismiss on Section 101 grounds, which Judge Robinson denied. On the first step of the Alice analysis, Judge Robinson found that “the claims at bar are directed to users selecting and modifying customizable characters (avatars) in real time on CE sites, as well as storing and retrieving such characters within an information network. The human analogy is not representative of the claims as a whole, which describe more than the pre-Internet business concept of ‘tallying’ choices applied in a computer setting. Instead, the claims are . . . ‘necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.’” Id. at 23. On the second step of the Alice analysis, Judge Robinson found that the patent seeks “to address the problem of ‘network site loyalty’ by providing the network user ‘audio data and visual image data that is indicative of the individuality of the network user’ . . . [which is achieved by] provid[ing] a specific series of steps used to customize a character to users’ choices in real time . . . communicate with other users through an information network including CE sites . . . navigate to a different site with the customized character . . . and operate CE sites for a plurality of users . . . .” The Court therefore concluded that “the claims are innovative, i.e., do not represent the ‘routine and conventional’ use of a computer.” Id. at 23-24.
The Defendant in this case, Ancestry.com, moved to dismiss several aspects of the Plaintiff’s operative complaint, each of which Judge Robinson addressed in turn in this order. First, regarding willful infringement, Judge Robinson found that the complaint adequately alleged that Ancestry was aware of the patent-in-suit before the lawsuit was filed. Ancestry had approved a label for saliva collection products provided by Plaintiff Genotek that included a URL patent marking, and Ancestry’s own patent application had uncovered Genotek’s application as potential prior art. Judge Robinson found that “any of the above facts taken alone would not provide sufficient indicia that the [patent-in-suit] was called to the attention of Ancestry. However, the factual circumstances surrounding the parties’ dispute, taken as a whole, satisfy the requirement that the [patent-in-suit] was called to Ancestry’s attention . . . [because] the parties were in an ongoing business relationship whereby Ancestry was made aware that the saliva collection kits purchased from DNA Genotek were marked as patent-protected, Dr. Chahine, a patent attorney and general manager at Ancestry, not only was responsible for approving the labels Ancestry attached to the DNA Genotek products, but was also the first-named inventor on Ancestry’s ‘701 Application, . . . [and] Ancestry was directly informed that the [Genotek] Application was relevant prior art and that the [Genotek] patent was a family member.” DNA Genotek Inc. v. Ancestry.com DNA, LLC., C.A. No. 15-355-SLR, Memo. Or. at 2-4 (D. Del. Mar. 22, 2016).
Judge Robinson dismissed, however, counts for conversion and trespass to chattels, finding that the counts did not pass muster under the economic loss doctrine. Genotek argued that Ancestry had committed conversion and damaged the value of Genotek’s patent portfolio by filing certain Ancestry applications. Genotek also had, however, an independent count for breach of contract that covered these allegations. Thus, the economic loss doctrine applied because the duties allegedly violated arose from contract. Id. at 4-6. Finally, Judge Robinson refused to dismiss the count to quiet title, finding that Genotek need merely show that it could acquire an interest in the property subject to the quiet title claim. Id. at 6-7.
In a recent Memorandum Opinion, Judge Sue L. Robinson denied defendant’s motion to dismiss pursuant to FRCP 12(b)(6), which alleged that plaintiff failed to claim patentable subject matter under 35 U.S.C. § 101. Improved Search LLC v. AOL Inc., C.A. No. 15-262-SLR (D. Del. Mar. 22, 2016). The first patent-in-suit, U.S. Patent No. 6,604,101 (“the ‘101 patent”) “relates generally to translation of query and retrieval of multilingual information on the web.” Id. at 13. As Judge Robinson explained, the ‘101 patent describes “a method and system for conducting a translingual search on the Internet and accessing multilingual websites through dialectal standardization, pre-search translation and post-search translation.” Id. The second patent-in-suit, U.S. Patent No. 7,516,154 (“the ‘154 patent”) is a continuation-in-part of the ‘101 patent and incorporates a system and method “to send a user one or more advertisements in his native language, also called as source language, over the Internet while the user is performing a cross language search.” Id. at 15. More specifically, “the server conducts a search in the database and returns to the user one or more advertisements relevant to the content word or keyword,” and the “advertisements are either in the source language or may be translated by the server from a target language.” Id. at 15-16.
Notably, Judge Robinson found that “[i]n trying to sort through the various iterations of the § 101 standard, the court looks to DDR as a benchmark.” Id. at 12 (citing DDR Holdings, LLC v. Hotels.Com, L.P., 773 F.3d 1245, 1258-59 (Fed. Cir. 2014)).
As to the first step of the Alice framework, defendant attempted to “analogize the method of the ‘101 patent to a set of tasks performed by a human, [arguing] that the ‘101 patent is directed to the abstract idea of searching for documents in a foreign language by translating a modified search request.” Id. at 16-17 (citations omitted). Similarly, defendant argued “that the ‘154 patent is directed to two abstract ideas – translingual searching and advertising.” Id. at 17. Judge Robinson, however, provided the following analysis as to the first step under Alice:
In Draeger Medical Systems, Inc. v. My Health, Inc., C.A. No. 15-248-SLR (D. Del. Mar. 3, 2016), Judge Sue L. Robinson denied Defendant’s motion to dismiss for lack of subject matter jurisdiction, in a declaratory judgment action for non-infringement and invalidity. Defendant, through a third party, had contacted Plaintiff regarding alleged infringement of its patent, and in that communication had informed Plaintiff of Defendant’s efforts to enforce its patent through other litigations, included a claim chart detailing how Plaintiff infringed the Defendant’s patent, and reserved Defendant’s rights to sue and seek damages. Plaintiff had not responded to the letter before filing this action. Defendant argued that there was no subject matter jurisdiction because the foregoing was insufficient to establish an actual case or controversy.
The Court disagreed, holding that the foregoing facts were sufficient based on “the Federal Circuit’s seminal case on this issue [Sandisk, where the Federal Circuit found] jurisdiction where defendant provided a ‘thorough infringement analysis’ prepared by legal experts, stated that plaintiff’s conduct infringed its patents, and claimed that plaintiff would need to pay a royalty for its infringing product.” Id. at 5. The fact that Defendant had informed Plaintiff of prior enforcement of its IP rights also supported a finding of jurisdiction. It was not enough that Defendant’s letter had indicated it was interested in resolution “without litigation.” Id. at 5-6. And, here, “[u]nder the totality of these circumstances, it does not weigh against jurisdiction that [Plaintiff] did not engage in licensing negotiations before initiating a lawsuit or [Defendant] remains interested in a negotiated resolution.” Id. at 6.
Accordingly, the Court denied the motion to dismiss.
In Cisco Systems, Inc. v. Sprint Communications Co., L.P., C.A. Nos. 15-431-SLR & 15-432-SLR (D. Del. Feb. 19, 2016), Judge Sue L. Robinson granted Defendant Sprint’s motion to dismiss for lack of subject matter jurisdiction. Plaintiff Cisco had filed invalidity and non-infringement declaratory judgment clams against Defendant. Defendant had asserted infringement against Plaintiff’s customers based on the use of Cisco products, and some customers had also made demands on Cisco for indemnification. Id. at 4-5. The Court held that these facts were insufficient to establish subject matter jurisdiction. Plaintiff had not established “a reasonable potential that” suit would be brought against it beyond Defendant’s suits against Cisco customers, as required by the Federal Circuit, and while Plaintiff would have standing to bring suit if it had “an obligation to indemnify their customers,” no standing existed based solely on “customer requests without regard to the merits of such requests” based on Federal Circuit precedent. Id. at 4-5 (emphasis in original).
Plaintiff also argued that Defendant’s “aggressive litigation strategies and [its] refusal to give assurances that it will not enforce its patents against [Plaintiff]” supported jurisdiction. Id. at 5. The Court also rejected this argument; while “the Federal Circuit has recognized that a patentee’s refusal to give assurances that it will not enforce its patent is relevant to the determination [of declaratory judgment standing], the Court . . . subsequently explained that such post-complaint facts cannot create jurisdiction where none existed at the time of filing. With respect to [Plaintiff’s] aggressive licensing and litigation strategies – even in the face of this court’s invalidating various of Sprint’s patents – the prospect of continued litigation against Cisco customers, without more, is insufficient to pass muster under the current legal regime.” Id. at 5-6 (internal citations and quotation marks omitted).
In a footnote, the Court also clarified that Federal Circuit law did not require Plaintiff’s complaint to “establish its products meet each element of Sprint’s infringement allegations,” as Sprint had argued. Id. at 6 n.3.