Delaware IP Law Blog

In Pfizer Inc. et al. v. Sandoz Inc., C.A. No. 12-654-GMS-MPT (D. Del. May 7, 2013), Chief Judge Gregory M. Sleet recently issued an order construing the following six disputed terms of U.S. Patent No. 8,026,276, which is alleged to cover a pharmaceutical that treats advanced renal cell carcinoma:

- “CCI-779”

- “w/v”

- “w/v of citric acid”

- “parenteral composition”

- “preparing”

- “combining”

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In a recent order, Chief Judge Gregory M. Sleet denied defendant’s motion to dismiss plaintiff’s claims of direct, contributory, and induced infringement for failure to state a claim upon which relief may be granted. Segan LLC v. Zynga Inc., C.A. No. 11-670-GMS (D. Del. May 2, 2013). Plaintiff is asserting U.S. Patent No. 7,054,928 (the “’928 Patent”), which includes two independent claims, one system claim and one method claim. Id. at 1 n.1. With respect to plaintiff’s claims for direct infringement, defendant argued that “it cannot possibly directly infringe either the system or methods claims” because direct infringement requires a party to “commit all the acts necessary to infringe . . . either personally or vicariously,” and plaintiff’s asserted claims “require activity by multiple actors.” Id. Judge Sleet explained, however, that with respect to the “use” of a system, “physical or direct control of all the elements of a system is not required—the user must simply cause those elements to work for their patented purpose.” Id. at 2 n.1. In light of that standard, Judge Sleet found that plaintiff sufficiently pled direct infringement, as plaintiff alleged that defendant “has used its own games on social media websites.” Id.

Defendant also argued that plaintiff’s indirect infringement claims should be dismissed for failure to adequately plead “the requisite underlying direct infringement [and] the necessary knowledge and intent.” Id. Judge Sleet found, however, that plaintiff sufficiently pled the direct infringement prong by alleging that “on any given day 60,000,000 people (i.e., users) play Defendant’s games on social websites” and that the “games’ users . . . put the invention into service, control the operation of the system as a whole and obtain [a] benefit from it.” Id. Further, with respect to the knowledge and intent requirements for induced infringement, Judge Sleet contrasted the instant complaint from the deficient complaint in Chalumeau Power Sys. LLC v. Alcatel-Lucent, C.A. No. 11-1175-RGA (D. Del. Jul. 18, 2012) (discussed previously here). Id. at 3 n.1. In the Chalumeau complaint, there were “only insufficient factual assertions to support the legal conclusion of actual knowledge, and no factual assertions at all to support the legal conclusion of specific intent.” Id. In the instant matter, Judge Sleet found that knowledge was sufficiently pled since plaintiff alleged that it sent a letter to defendant’s officers with a full copy of the asserted patent on June 30, 2011. Id. Further, Judge Sleet found that plaintiff provided “several factual assertions permitting a reasonable inference that [defendant] acted with the requisite specific intent.” Id. With respect to the contributory infringement claim, Judge Sleet again found knowledge sufficiently pled based on the allegations related to plaintiff’s letter with the asserted patent attached. Id. Further, Judge Sleet found that plaintiff provided allegations sufficient to permit “the reasonable inference that [defendant] was aware that its games were ‘especially adapted for use in infringement’ of the ’928 Patent.” Id. Specifically, plaintiffs alleged that “[d]efendant has specifically designed, developed, and acquired [its] on-line games for game players to use on target websites” and that defendant "admits in its amended IPO statement that its games require game players (users) to access the internet, Facebook (or any target website [defendant] engages).” Id.

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Chief Judge Gregory Sleet recently denied a generic pharmaceutical company’s request for leave to move for summary judgment before a Rule 16(b) conference in an ANDA case. The defendant generic manufacturer sought leave for early summary judgment because the thirty-month stay was set to expire in the coming months and because statements made by the plaintiff’s CEO and counsel supposedly confirmed that defendant’s ANDA product did not have a limitation required in every claim of the patent-in-suit. See Endo Pharms. Inc. v. Mylan Techs. Inc., C.A. No. 11-220-GMS, Order at 1-2 n.1 (D. Del. May 3, 2013).

Judge Sleet, however, found that “summary judgment briefing would be wasteful and premature at this stage.” Judge Sleet accepted three arguments against summary judgment proffered by the plaintiff. First, the plaintiff argued that because it had no opportunity to conduct fact or expert discovery, it would respond to a summary judgment motion with a Rule 56(d) declaration. Second, the plaintiff argued that a supposed limitation of the claims of the patent-in-suit was not actually present in the claims and that claim construction would be necessary to determine what was claimed. Finally, the plaintiff argued that even if there were no literal infringement, it was entitled to assert infringement under the doctrine of equivalents, which would require both discovery and claim construction. Accepting all three of these arguments, Judge Sleet found the “summary judgment request to be inappropriate at this juncture.” Id.

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In a recent memorandum opinion, Chief Judge Gregory M. Sleet granted Facebook’s motion to transfer to the Northern District of California a patent case filed against it by a Canadian company and its Delaware subsidiary. Mitel Networks Corp., et al., v. Facebook, Inc., C.A. No. 12-325 (GMS) (D. Del. May 1, 2013). The Court found that only one factor under the Third Circuit’s Jumara analysis weighed in favor of keeping the case in Delaware: the plaintiff’s forum preference. The weight the Court gave that factor was diminished, however, because although the subsidiary plaintiff was incorporated in Delaware, neither plaintiff maintained any operations in Delaware. Id. at 5. Further, the Court found compelling Facebook’s argument (to which the plaintiffs did not respond during briefing) that the Canadian parent company was the real party in interest, and the Delaware subsidiary was added as a co-plaintiff only for jurisdictional purposes. Id. at 4, 6. As a result, the Court found that the plaintiffs’ “forum selection is entitled to some degree of heightened deference, but not to paramount consideration.” Id. at 6 (internal quotation marks omitted). The remaining Jumara factors weighed in favor of transfer to the Northern District of California, or were neutral. The Court therefore concluded that Facebook “met [its] burden of demonstrating that the interests of justice and convenience strongly favor transfer.” Id. at 18.

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Chief Judge Gregory M. Sleet recently issued a claim construction order in Edwards Lifesciences, L.L.C., et al. v. Medtronic CoreValve, L.L.C., et al., C.A. No. 12-cv-23-GMS (D. Del. Apr. 23, 2013). The Court construed the following disputed claim terms of U.S. Patent No. 8,002,825, entitled “Implantable Prosthetic Valve for Treating Aortic Stenosis”:

-“a prosthetic valve for implantation in a stenosed aortic valve”

-“metallic frame having intersecting bars”

-“frame made with intersecting metallic bars”

-“Frame”

-“18 French arterial introducer”

-“the frame being expandable”

-“a flexible valvular structure”

-“internal cover"

-“comprises a concave shape profile” and “shape comprising a concave profile”

-“wherein the frame is configured to be expanded by a balloon”

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In a recent memorandum opinion, Chief Judge Gregory M. Sleet adopted Magistrate Judge Thynge’s report and recommendation, denying defendant’s renewed motion to stay the patent litigation proceedings pending inter partes reexamination. ImageVision.Net, Inc. v. Internet Payment Exchange, Inc., C.A. No. 12-054-GMS-MPT (D. Del. Apr. 22, 2013). In June 2012, after filing for inter partes reexamination, defendant had filed its first motion to stay. Id. at 1. Judge Sleet adopted in part the magistrate judge’s report and recommendation and denied that motion. Id. After the PTO granted defendant’s request for inter partes reexamination in December 2012, defendant filed a renewed motion to stay—the motion at issue in Judge Sleet’s recent memorandum opinion. Id. at 1-2.

First, Judge Sleet held that “the granting of an inter partes reexamination under the AlA” should not “displace the three-factor test that has been traditionally employed in assessing a motion to stay.” Id. at 5. The three-factor test, as Judge Sleet explained, “is capable of incorporating any changes resulting from the AlA.” Id. Specifically, Judge Sleet noted that to the extent defendant “focus[ed] on the more searching standard applied by the PTO in granting a reexamination request” under the AIA, the court could account for that standard pursuant to the three-factor test’s “issue simplification factor.” Id.

Having determined that application of the three-factor test was appropriate, Judge Sleet then assessed whether the magistrate judge erred in her application of that test in her report and recommendation (the “R&R”). First, with respect to prejudice to the non-moving party, Judge Sleet noted that while “delay does not, by itself, amount to undue prejudice,” Magistrate Judge Thynge properly based her finding of undue prejudice on the “potential for delay” and “the parties’ competitive relationship.” Id. at 6-7. Second, with respect to the “simplification of the issues,” defendant argued that Magistrate Judge Thynge had not given enough weight to the PTO’s grant of the reexamination request, since “[i]f . . . all claims of the [the patent-in-suit under reexamination] are invalid, then every other issue in the case will be moot.” Id. at 8-9. Judge Sleet explained that “[w]hile this may be true,” the R&R was still not in error--defendant “fail[ed] to recognize the speculative nature of its reexamination predictions, and the PTO's published statistics [that] suggest that at least some claims will survive intact or in an amended form.” Id. at 9. Third, with respect to the “stage of the ligation,” defendant emphasized that discovery was not complete and that no exact trial date was set. Id. at 9-10. Judge Sleet explained, however, that Magistrate Judge Thynge “properly examined this factor in light of other decisions from this district and found it significant that the parties have already engaged in substantial discovery.” Id. at 10. Judge Sleet adopted the R&R, finding that Magistrate Judge Thynge’s “treatment of the three factors” was “neither clearly erroneous nor contrary to law.” Id.

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In a recent memorandum opinion, Chief Judge Gregory M. Sleet denied defendant’s amended motion to transfer venue of this patent infringement action to the Middle District of Florida. Devicor Medical Products, Inc. v. Biopsy Sciences, LLC, C.A. No. 10-1060-GMS (D. Del. Apr. 15, 2013). Plaintiff is a Delaware corporation with its principal place of business in Ohio, and defendant is a Florida corporation with its principal place of business in Clearwater, Florida. Id. at 3.

Pursuant to 28 U.S.C. § 1404(a), Judge Sleet first determined that the suit could have been properly brought in the Middle District of Florida, as defendant’s principal place of business is in Clearwater, Florida. Id. at 4. Next, Judge Sleet considered the private interest Jumara factors. Because plaintiff is a Delaware corporation but is not physically located in Delaware, its forum choice weighed against transfer and was given “heightened but not maximum weight.” Id. at 6. Defendant’s preference to litigate in Florida weighed in favor of transfer. Id. With respect to whether the infringement “claims arose elsewhere,” defendant argued that it did not commit any direct acts of infringement in the District of Delaware. Id. at 7. Judge Sleet found, however, that defendant acknowledged its “distributors had sold the accused products in Delaware,” which could establish the basis for “alleged acts of indirect infringement.” Id. Judge Sleet therefore determined that factor was neutral. Id. at 7-8. Because neither party had a physical presence in Florida and because transfer would at least save defendant “the inconvenience and expense of litigating in a distant forum,” Judge Sleet found the convenience of the parties weighed in favor of transfer. Id. at 9. With respect to the convenience of the witnesses, “neither party . . . pointed to a single witness who [would] be unavailable for trial in either Delaware or Florida,” and Judge Sleet accordingly considered that factor to be neutral. Id. Because all of defendant’s books and records were maintained in Florida, Judge Sleet found the location of the books and records to weigh “slightly in favor of transfer.” Id. at 9-10.

Judge Sleet noted that the “parties appear[ed] to agree that several of the public interest factors [were] inapplicable to or neutral in the transfer analysis.” Id. at 10. However, Judge Sleet did consider the “local interest in deciding local controversies at home.” Id. at 10-11. Defendant argued that the “Middle District of Florida has a greater interest in litigation involving claims of patent infringement against one of its residents than does [the District of Delaware].” Id. at 10. Judge Sleet rejected defendant’s position, noting that “patent infringement actions are more properly viewed as national rather than local controversies.” Id. at 10-11. Further, with respect to the “public policies of the fora,” defendant argued that public policies supported the Middle District of Florida overseeing the matter. Id. at 11. Judge Sleet found, however, that defendant failed to provide support for its conclusory allegation. Id.

Judge Sleet found that defendant failed to meet “its heavy burden of establishing that the balance of convenience tips strongly in favor of transfer,” and defendant’s motion was thus denied. Id. at 11-12.

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Chief Judge Gregory M. Sleet recently construed 14 claim terms from U.S. Patent Nos. 6,760,808 and 7,487,309, relating to the reliable and scalable transfer of high-bandwidth streams of data between multiple storage units and multiple applications. Avid Tech., Inc. v. Harmonic, Inc., C.A. No. 11-1040 (GMS) (D. Del. Apr. 15, 2013). The Court construed the following terms:

-“independent storage units”
-“redundancy information”
-“nonsequentially”
-“identifier”
-“identifier of each segment”
-“identifier of the segment”
-“identifier of a segment”
-“identifier of the requested segment”
-“means, operative in response to a request from one of the client systems, for retrieving the requested segment of the file from the storage unit using the information associating the identifier of each segment stored on the storage unit with the location of each segment of the storage unit”
-“means for sending the requested segment to the client system”
-“means for sending a request, for each segment of the data requested by the application, to the storage unit on which the segment is stored”
-“means for selecting one of the storage units on which the segment is stored such that a load of requests on the plurality of storage units is substantially balanced”
-“means for scheduling the transfer of data from the storage unit such that the storage unit efficiently transfers data” and
-“means for distributing each segment, and the redundancy information for each segment, among the plurality of storage units by sending to the storage unit the segment of the data and the identifier of the segment”.

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Chief Judge Gregory Sleet recently issued a claim construction order in a longstanding patent infringement dispute involving interactive program guides for digital satellite broadcasts. See Pegasus Dev. Corp. v. DirecTV, Inc., C.A. No. 00-1020-GMS, Order (D. Del. Apr. 1, 2013). Judge Sleet construed the following terms, several of which he found to be means-plus-function terms and several of which had been previously construed by the Federal Circuit:
- “embedded signals”
- “recording the receipt of and passing to said devices of said embedded signals”
- “decrypting [an encrypted information transmission]”
- “switch means”
- “matrix switch means”
- “a first processor means operatively connected to said plurality of detector means for identifying each detected control signal as having been detected by a particular detector”
- “a second processor means for controlling the output directing function of said switch means”
- “a second processor means for controlling the output function of said switch means”
- “a processor means for controlling the output functions of said matrix switch means and the transfer functions of said storage/transfer means”
- “a processor means for controlling the directing function of said matrix switch means and the transfer functions of said storage/transfer means”
- “storage/transfer means for receiving an storing said control signals and for transferring at least a portion of said control signals for further processing”
- “causing said memory means to transmit selected information of said selected data unit at a selected time”
- “causing a switch associated with said intermediate input means to connect the output of a player associated with said recorder to at least one selected processor at a selected time”
- “member information”
- “outputting data that include additional information besides said input information”
- “assembling output records that include additional information besides said input information”
- “reprogrammable system”
- “reprogram”
- “operating instructions”
- “said memory device”
- “different signals”
- “[selected] television program transmission”
- “locations”

UPDATED:
Chief Judge Sleet had previously ordered the parties to submit supplemental briefing regarding whether the controller and processor "constitute structure corresponding to the claim terms 'a second processor means for controlling the output directing function of said switch means' and 'a second processor means for controlling the output function of said switch means.'" Considering the parties' supplemental briefing and oral arguments at the Markman hearing, Judge Sleet found that the two terms should be construed as means-plus-function terms with corresponding structures of the "signal processor" and the "cable program controller & computer." Judge Sleet also refused to alter his previous claim construction to include a "controller" or "processor," finding that they were sub-parts of the signal processor, and that there was "no need for the court to call out individual components of that processor or recognize it by alternative names." See Pegasus Dev. Corp. v. DirecTV, Inc., C.A. No. 00-1020-GMS, Supplemental Order at 1-2 (D. Del. Apr. 15, 2013)

UPDATED:
Chief Judge Sleet granted in part plaintiffs' motion for reargument regarding Judge Sleet's claim construction order. Judge Sleet amended the Court's construction of the term "decrypting [an encrypted information transmission]" to mean "using a digital key in conjunction with a set of associated mathematical operations to decipher digital data. This term does not include mere descrambling of an analog television transmission. The decrypting must be of the entire information transmission that is recited in step (b) of claim 14." See Pegasus Dev. Corp. v. DirecTV, Inc., C.A. No. 00-1020-GMS, Order at 1 (D. Del. May. 15, 2013)

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In a recent post-trial opinion, Chief Judge Gregory M. Sleet found that defendants had not met their burden of proof in showing that the asserted claims of the patent-in-suit were invalid, either as anticipated or obvious. In re Armodafinil Patent Litigation Inc. (‘722 Patent Litigation), MDL No. 10-md-2200-GMS (D. Del. Mar. 30, 2013). Because the defendants had stipulated that their ANDAs infringed the asserted claims, id. at 9, the Court’s ruling on invalidity also led it to award injunctive relief to plaintiff.

The patent-in-suit was related to plaintiff’s drug that “is indicated to improve wakefulness in patients with excessive sleepiness associated with obstructive sleep apnea, narcolepsy, and shift work sleep disorder.” Id. at 4. Plaintiff originally asserted all claims of this patent, but it had agreed that defendants’ “right to enter the market with respect to the [patent-in-suit] . . . will stand or fall based upon the outcome of this litigation with respect to” two of the claims. Id. at 9. Therefore, the bench trial had been limited to the presentation of evidence related to these claims. Id. The two claims “cover a pharmaceutical composition with an active component consisting essentially of Form I armodafinil.” Id. at 48.

As to anticipation, the Court concluded that the claims were not invalid as inherently anticipated. Defendants argued that a person of ordinary skill in the art “will necessarily and inevitably obtain Form I armodafinil from following the prior art Preparation I process” described in another patent (“the ‘855 Patent”) that “discloses how to synthesize armodafinil.” Id. at 10, 48. Generally, the Court found plaintiff’s experts’ testimony more credible than those of defendants with respect to anticipation issues. See, e.g., id. at 20, 29. Specifically, defendants had not met their burden because (i) “defendants have not demonstrated clearly and convincingly through their experts’ experiments and testing that the performance of Preparation I necessarily and inevitably results in Form I armodafinil, (ii) “defendants have failed to show by clear and convincing evidence that the result of performing Preparation I meets the requirements of the asserted claims of the patent-in-suit,” and (iii) “defendants have not demonstrated clearly and convincingly that their reproductions of the ‘855 Patent’s Preparation I were consistent with how a person of ordinary skill in the art would have performed the Preparation and, therefore, have not proven that their experts’ experiments accurately demonstrate that Form I armodafinil inevitably results from Preparation I.” Id. at 18.

At one point in its discussion, the Court noted that both sides referenced “the ‘court’s construction’” of certain terms in the patent-in-suit that the Court had not construed, but instead whose meaning the parties had agreed on before the Markman hearing. Id. at 24. Noting that “the parties’ arguments—and particularly those of defendants, who repeatedly reference how the court construed [these terms]—[therefore struck] the court as misleading,” the Court accepted plaintiff’s constructions. Id.

"Defendants focused their obviousness arguments on the assertion that” the ‘855 patent, combined with other references, invalidated the asserted claims of the patent-in-suit. Id. at 49. The Court, again accepting plaintiff’s experts’ testimony as more credible, concluded that defendants had not shown obviousness. First, “there was no more than a general motivation to find new crystal forms of armodafinil with nothing directed to the unknown Form I itself.” Id. at 68. Second, “the defendants [had] not produced sufficient evidence to demonstrate that skilled artisans would have had reason to select the route that produced the claimed invention or that the prior art provided indication of which parameters were critical or likely to prove successful amongst the numerous testing conditions and variables available.” Id. at 69. Finally, “the defendants’ contention based on allegedly ‘obvious to try’ experiments . . . [fell] short” because “‘[o]bvious to try’ is not equivalent to obviousness in every case, particularly where, as here, the prior art provided at most general motivation to conduct trial and error experimentation in a decidedly unpredictable field” and defendants’ arguments were “based on an impermissible hindsight analysis.” Id. at 70-71.

In light of these findings, the Court awarded plaitniff’s requested injunctive relief. Id. at 72-73.

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