Chief Judge Gregory M. Sleet recently issued a claim-construction opinion notable for what it did not construe. On review of a magistrate judge's recommendation, the Court rejected the defendants' attempts to argue issues beyond the scope of the Markman proceeding:
"The defendants have also made a number of claim differentiation . . . and other invalidity arguments, though they couched these arguments as claim construction objections. Such validity arguments are not properly resolved at the claim construction stage."
The Court's decision stands as a warning to D. Del. practitioners: aggressive Markman tactics will not succeed in this district. (See also footnote 5 of the Court's opinion.)
In what looks to be the final opinion in a patent infringement case that has continued since 1999, Chief Judge Gregory M. Sleet partially affirmed a decision by the Clerk of Court not to grant costs requested by defendant Hamilton Standard, whose trial victory was affirmed by the Federal Circuit in April. Hamilton sought trial costs of $431,200.47, but the Clerk granted only $2,410. Hamilton appealed that decision to the District Court, which affirmed, except as to bond premiums for a bond Hamilton posted to stay execution of judgment pending post-trial motions (in the amount of $36,540). Chief Judge Sleet affirmed the denial of Hamilton’s other costs, including:
Transcripts: Under Local Rule 54.1(b)(2), transcript costs are taxable only "when requested by the Court or prepared pursuant to stipulation," neither of which was the case here. Id. at 2.
Depositions: Under 54.1(b)(3), deposition costs are "taxable only where a substantial portion of the deposition is used in the resolution of a material issue in the case," which did not occur here: the witnesses testified live, and mere use of the deposition transcript to prepare the witnesses was "scarcely relevant." Id. at 3. Chief Judge Sleet also found it insufficient that "some portion of" one deposition was "played or read at trial," and that, for one witness, the Federal Circuit "quoted eight words of the (at least) 278-page deposition in its 21-page opinion affirming [the district] court's ruling on remand." Id.
Exhibits: The court rejected the $173,855.77 requested for exhibits under 28 U.S.C. § 1920(4), and Local Rules 54.1(b)(5)-(6) for three reasons: (1) lack of specificity in the documentation of costs, which meant that the Clerk and the Court could not adequately apply the law, id. at 6-7; (2) the costs "relate[d] primarily to graphics design and computer animation work," which is not covered under any of the rules, id. at 7; and (3) "parties may not recover costs for the preparation of animations, graphics design, and other exhibits that serve primarily an argumentative or adversarial function," id. at 8.
What could Hamilton have done differently to recover these costs? Not much. The law regarding taxable transcripts and depositions is plain, and even if Hamilton had provided more detail about the exhibits in its reports, it could only have been awarded the minor costs of the physical copies submitted to the court, not the development and graphics design cost of the exhibits themselves. Id. at 7-8. Note, however, that Judge Robinson suggested in 2006 that "reasonable" fees for exhibit preparation might be taxable, as we covered here.
In his recent decision granting a motion to amend, Magistrate Judge Leonard P. Stark offered a new take on whether adding new patents following the close of the pleadings will unduly complicate a case. In the underlying litigation, the parties had filed competing complaints in both Delaware and Maine. The Delaware plaintiff sought to amend its complaint to seek a non-infringement declaratory judgment on several patents asserted against it in Maine.
The Delaware defendant unsuccessfully objected to the alleged added complexity:
"Fairchild also contends that adding two more patents to the eleven patents already at issue in the Delaware Action would unduly complicate this case. Yet Fairchild's own proposal of simultaneously litigating the two cases five hundred miles apart, potentially requiring the services of two juries and at least two judges, as well as two rounds of discovery, two sets of claim construction briefs, two Markman hearings, two summary judgment motions, and the like, seems far more complicated."
Even with thirteen patents at issue, the complexity argument remains a double-edged sword.
A fundamental precept of patent law teaches that a party is liable for direct infringement only when it performs each step of the invention's claims. In a recent decision, District Judge Sue L. Robinson addressed infringement liability for those who perform less than all the claimed steps. The Court concluded that:
"The law of divided infringement . . . does prohibit infringement by defendants. In the circumstances where one party performs only some of the claimed steps, and another entity performs other of the claimed steps, direct infringement will only lie if one party exercises 'control or direction' over the entire process such that every step is attributable to the controlling party . . . ."
Absent this showing of control or direction, the Court held, summary judgment of non-infringement is appropriate.
Notably, the Court reached its conclusion after reconsidering an earlier claim construction. Because it raised the divided infringement issue, the new construction impaired the prospect of direct infringement, which in turn led to an increased likelihood of summary judgment. Litigators take note: this case is another example of how slight alterations to a claim construction can have a dramatic effect on the summary judgment phase.
Chief Judge Sleet recently decided a case where plaintiff, a law firm that had helped to prosecute a patent, tried to claim an equitable interest in the patent after their client’s alleged failure to pay their fees. Huntley, L.L.C. v. Monterey Mushrooms, Inc., C.A. No. 08-377-GMS, at 1 (D. Del. Sept. 18, 2009). The firm then tried to make an infringement claim against a subsequent assignee based on the firm’s supposed equitable interest. Id. at 3-4. Chief Judge Sleet denied both claims, noting that the firm’s engagement letter said nothing about a potential assignment of the patent or any equitable interest in it. Id. at 7. While the firm had filed a "Notice of Equitable Claim" with the PTO, that filing was “inconsequential” standing alone, as it was signed only by the firm. Id. The court also rejected Huntley's claim of a "grantor's lien" in the patent, pointing out the lack of legal support for "this rather novel proposition." Id. at 7-8. With plaintiff having no interest in the patent, Judge Sleet granted defendant's motion to dismiss for lack of standing. Id. at 8.
Consistent with a theme that has been developing in D. Del. multi-patent litigation, E.D. Pa. chief judge Harvey Bartle, sitting by designation, recently issued an order limiting the number of claims for trial. In the four-patent litigation, the Court limited the plaintiffs to no more than twelve representative claims, with at least one claim from each of the patents-in-suit. Notably, however, the Court expressly directed that the trial on the representative claims will be "without prejudice to a trial at a later point, at the request of plaintiffs, on any of the remaining claims of the patents."
In a recent Markman opinion, Judge Farnan construed several terms relating to two patents pertaining to the use of microelectrodes for the rapid determination of the concentration of an analyte in a liquid sample – a process that, as the court noted, is useful for blood sugar analysis in individuals suffering from diabetes. The parties disputed "the bulk of the language used in the independent claims," id. at 5, and the court construed the following terms:
"Reference electrode," "working electrode," "counter electrode": The court construed the term "electrode" to mean a "microelectrode having a width of 15 to 100 [micrometers]," due to references in the specification and the prosecution history. Id. at 6-9.
"Capillary Chamber," construed to mean "a space or channel that is defined over the electrodes that directs flow of the blood sample over the electrodes." Id. at 9-10.
"Detecting," construed to mean "discovering or ascertaining the presence of." Id. at 10-12. The court also noted that "following said detecting, applying or controlling the voltage" required no further construction. Id. at 13-14.
"An electroactive reaction product," construed to mean "a chemical compound produced during a reaction that is capable of donating or receiving electrons to an electrode." Id. at 12-13.
"Correlating the electrooxidized electroactive reaction product to the concentration of glucose in the blood sample," construed to mean "using a relationship between the electrooxidized reaction product and the concentration of glucose in blood." Id. at 14-16.
"Providing a readout of the glucose concentration in the blood sample": the court held that the term "readout" implied something that could be read by the user. Id. at 16-17.
"About," construed to mean "approximately." Id. at 19-21.
"Electrooxidize," construed to mean "to donate at least one electron at an electrode." Id. at. 23-24.
"Providing a disposable biosensor test strip," and "determining," held to not need construction. Id. at 18-19, 21-22.
More and more frequently, courts are having to deal with concurrent reexamination proceedings in the USPTO while parties are litigating the same patents in the district court forum. In Automotive Technologies Int'l, Inc. v. American Honda Motor Co., et al., certain defendants filed a reexamination on eight of twelve of the patents that plaintiff asserted against them in litigation filed in the District of Delaware and subequently moved to stay the litigation. C.A. Nos. 06-187-GMS, 06-391-GMS, Memo. Order (D. Del. Sept. 15, 2009). This Court granted the motion to stay. Over a year and a half later, the PTO reissued two of the patents-in-suit and reaffirmed certain claims without amendment. Id. at 2. Because of this action at the PTO, the plaintiffs moved the court to lift the stay. The Court denied the motion finding that because "reexamination proceedings are still underway for six of the eight asserted patents" and "all of the claims presently asserted against the defendants stand rejected by the PTO" lifting the stay was not appropriate. Id. at 4. The Court further found that continuing the stay could simplify the issues for trial and conserve both the parties' and the Court's resources. Id. at 4.
Judge Robinson recently construed the parties' disputed claim terms set forth in a patent related to a "method and system for providing a preview thumbnail image of a web page" in Girafa.com, Inc. v. IAC Search & Media, Inc., C.A. No. 07-787-SLR, Memo. Order (D. Del. Sept. 15, 2009).
The following terms were construed:
- "image server"
- "A web server separated from said image server"
- "Visualization functionality"
- "At least partially concurrently"
- "Annotated web page"
- "Thumbnail visual image"
- "Trimming a path component based on the consideration of finding the most representative image of a given web page"
- "Home page or homepage"
- "Thumbnail visual image of another web page of at least one web site which is represented by said at least one hyperlink"
Plaintiff SRI International (“SRI”) brought a patent infringement action against defendants Symantec Corporation (“Symantec”) and Internet Security Systems, Inc. (“ISS”) related to four patents. After issuing its claim construction opinion in October, 2006, the Court held that each of SRI’s patents were invalidated as anticipated by certain prior art. See Sri International, Inc. v. Internet Security Systems, Inc., et al., C.A. No. 04-1199-SLR, at 1 (D. Del. Aug. 20, 2009) (discussing procedural history). On appeal, the Federal Circuit affirmed the Court’s decision as to one of the patents but vacated and remanded for trial as to the remaining three patents. Id. After a trial in September, 2008, the jury found that Symantec and ISS infringed each claim of two of SRI's patents. Id. at 12. Among other post-trial motions, both Symantec and ISS filed motions for judgment as a matter of law (“JMOL”) as to the jury's infringement verdicts.
Pursuant to its JMOL motion, Symantec argued that a finding of “induced infringement was not supported by substantial evidence because plaintiff presented no direct evidence that either Symantec or its customers actually employed the infringing combination of SGS and Manager Products [both Symantec Products].” Id. at 14 (emphasis added). At trial, SRI relied on circumstantial evidence to prove that the Symantec products in question were designed to work together, that the SGS products monitor enterprise networks, and Symantec encouraged and instructed customers to use the products together. Id. at 15-16. SRI argued that this circumstantial evidence was enough for the jury to conclude that the products were in fact used together. Id. at 16. Despite SRI’s urging otherwise, the Court noted that “[w]hile it is true that circumstantial evidence may be used to demonstrate direct infringement, the evidence must still indicate that infringement actually occurred.” Id. at 16-17. “[B]ecause both the SGS and Manager Products have non-infringing uses (i.e., the combination does not ‘necessarily infringe’ the patents), plaintiff was obligated to identify specific instances of direct infringement involving these products.” Id. at 18. Granting Symantec’s motion for JMOL as to the combination of the SGS and Manager Products, the Court found that SRI’s circumstantial evidence “[did] not compel the conclusion that infringement necessarily occurred.” Id. at 20.
Pursuant to its JMOL motion on direct infringement, ISS argued that SRI “presented no evidence that ISS itself actually deployed or used the accused products in an infringing manner.” Id. at 24. SRI, on the other hand, argued that direct infringement was supported by evidence that ISS demonstrated in training courses and video presentations the accused products’ infringing uses. Id. at 25. However, testimony at trial indicated that the demonstrations could be based off the accused product or could be artificially created for demonstrative purposes. Id. at 26-27. No testimony was introduced at trial positively showing that ISS used an infringing system during the demonstrations. Id. at 27. “On this record, a reasonable jury could not have found direct infringement by ISS by a preponderance of the evidence.” Id. The Court also granted ISS’s JMOL motion as to induced infringement because SRI did not identify any specific instances of infringement by ISS customers. Id. at 30.
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