August 5, 2009

Judge Joseph J. Farnan, Jr.: No Per Se Rule that a Reexamination Order Precludes the Possibility of Proving Willful Infringement

In June 2009, Magistrate Judge Stark granted Plaintiff St. Clair’s Motion for Leave to File a Second Amended Complaint to, among other things, add allegations for willful infringement against Defendant Nokia. St. Clair Intellectual Property Consultants, Inc. v. Matsushita Electronic Industrial Co., et al., C.A. No. 04-1436-JJF-LPS (D. Del. June 10, 2009). In opposition to St. Clair’s motion, Nokia, relying on Lucent Techcs. v. Gateway, Inc. and In re Seagate Tech., unsuccessfully argued that St. Clair’s proposed amendment would be futile because the PTO’s grant of a reexamination precludes a claim of willful infringement, as a matter of law. In his July 28, 2009 memorandum opinion, Judge Farnan agreed with Magistrate Judge Stark’s rejection of Nokia’ argument because the courts in Lucent and Seagate “clearly refrained from creating a per se rule that a reexamination order precludes the possibility of proving willful infringement on summary judgment.” St. Clair Intellectual Property Consultants, Inc. v. Matsushita Electronic Industrial Co., et al., C.A. No. 04-1436-JJF-LPS, at 6 (D. Del. July 28, 2009). As such, “Judge Stark correctly rejected Nokia’s reading of Lucent as support for its argument that reexamination order must make futile any attempt to amend a complaint to include a count for willful infringement. As Judge Stark stated, this is so even where the PTO and a District Court do not agree on claim construction because ‘the Court is not bound by [the PTO’s] construction.’” Id.

August 4, 2009

Leonard P. Stark: Post-Trial Accounting Issues Cannot Be Raised in New Suit

Collecting damages incurred following a finding of liability can be difficult. One avenue to collection that will not work, recounted in a recent decision by magistrate judge Leonard P. Stark, involves filing a new action.

According to the Court, such a maneuver constitutes improper claim-splitting:

"Because [plaintiff's] pre-trial requests for damages for infringement in [the earlier litigation] sought damages only for the period through the jury verdict . . . , the Court determined that [plaintiff] failed to preserve its right to an accounting necessary for obtaining damages . . . . To allow [plaintiff] to present the same waived claim - involving the very same infringement of the very same patents by the very same 106 Accused Products - in a new lawsuit would seem to permit claim-splitting."

Notably, however, the Court did not completely foreclose the availability of damages for later acts of infringement:

"I am not prepared to find on the record before me that a patentee that waives its right to a post-verdict accounting is absolutely prohibited from seeking damages from the same alleged infringer for later acts of infringement in a second suit . . . ."

Thus, at least for now, the line between the waived accounting damages and any new acts of infringement remains blurred.

Power Integrations Inc. v. Fairchild Semiconductor Int'l Inc., C.A. No. 08-309-JJF-LPS (D. Del. July 9, 2009) (Stark, M.J.).

August 4, 2009

Magistrate Judge Mary Pat Thynge: Patent Misuse Tried to Judge

The Federal Rules of Civil Procedure provide a trial judge with the ability to manage the presentation of a trial, particularly where complex matters are being tried before a jury. Patent misuse is a defense that courts have held can be tried to the jury or to the judge. Judge Thynge in Cordance Corporation v., Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. July 28, 2009), was faced with the question of whether Amazon's defense of patent misuse should be tried before the jury or the bench. "[C]onsidering the Einsteinian analysis and Herculean task that Amazon is assigning to the jury by its proposed verdict form consisting of 14 pages with 20 questions containing over 160 subparts just to determine infringement and invalidity..." the Court chose not to "further burden and (potentially confuse) the jury with patent misuse" and therefore, that defense will be tried to the Court. Id. at 3.

In another portion of the opinion, the Court also found that plaintiff is only entitled to damages for infringement from the time the USPTO issued a certificate of correction for the patent-in-suit. Id. at 6. The corrections do not apply retroactively and prior to trial Cordance never articulated an infringement theory based on the uncorrected claims. Id. Thus, the damages period only runs from the date the PTO issued the certificate of correction.

Cordance Corporation v., Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. July 28, 2009).

August 4, 2009

Magistrate Judge Mary Pat Thynge: Summary Judgment Granted - No Willful Infringement Under Seagate Standard

In what is one of the first lengthy discussions on willful infringement from this District since the Federal Circuit issued its opinion in In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) (see our earlier posting on the Seagate opinion here), Magistrate Thynge recently granted summary judgment of no willful infringement. Cordance Corp. v., Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. July 27, 2009). Specifically, despite plaintiff's argument that Amazon had notice of its patents based on Amazon's level of activity and knowledge in the field of 1-click technology, the Court found that this was insufficient to demonstrate an objectively high likelihood that its actions constituted infringement of a valid patent. Id. at 10-11. Instead, the Court noted that Cordance's argument relied more on the "negligence standard for willful infringement overruled by Seagate." Id. at 11. Furthermore, the fact that Amazon moved for summary judgment of invalidity and non-infringement of the patents-in-suit demonstrated a "good faith belief in its defenses to Cordance's claims" and Cordance's own brief in support of its own motion for summary judgment states that the case "raises hotly contested issues of fact..." which are "likely to turn ultimately on conflicting expert testimony." Id. at 12. The Court therefore found that Cordance did not present enough evidence under the Seagate standard to demonstrate that Amazon acted despiste an objectively high likelihood that its acts constituted infringement, and granted Amazon's motion for summary judgment of no willful infringement. Id.

Cordance Corp. v., Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. July 27, 2009).

July 31, 2009

Leonard P. Stark: Agree to Claim Terms or Lose Two of Them

In multi-patent litigation, parties and the Court are often confronted with how to properly manage the sometimes unwieldy claim-construction process. To that end, Magistrate Judge Leonard P. Stark recently issued a noteworthy ruling that addressed how, at least in the case before him, Markman should be controlled. Specifically, the Court held that, in the underlying six-patent litigation, the parties would be limited to presenting twelve claim terms for construction.

While a claim limit is itself not unusual, the order also contains an incentive to agree: should the parties fail to settle on the twelve terms for construction, "the Court will limit the number of terms it will construe in conjunction with the Markman hearing to a maximum of ten (10)." Now that is incentive, indeed.

Power Integrations Inc. v. Fairchild Semiconductor Int'l Inc., C.A. No. 08-309-JJF-LPS (D. Del. July 16, 2009) (Stark, M.J.).

July 30, 2009

Sue L. Robinson: Jurisdiction Over Work-Product Dispute Declined

Yesterday, District of Delaware Judge Sue L. Robinson declined jurisdiction over a discovery dispute involving a party's instruction not to answer. At a deposition, the plaintiff's attorney directed the nonparty deponent -- who was involved in prosecuting the underlying patent -- to refrain from answering certain questions on work-product grounds.

The Court found that any order on the subject would have to originate from the court where the deposition occurred:

[A]lthough the nonparty deposition was taken outside this jurisdiction, the nonparty witness was represented by plaintiff's counsel, and it was plaintiff's counsel who instructed the witness not to answer certain questions based on work product. Nevertheless, the protection belongs to the attorney witness, not to the client . . . . Therefore, I conclude that, in this case, an order compelling the nonparty witness to answer is directed to the nonparty, not to plaintiff.

Despite declining jurisdiction, the Court in dicta cautioned that work-product immunity for prosecution activities must proceed on a case-by-case basis: "patent prosecution activities are subject neither to a blanket immunity nor automatic disclosure."

Accenture Global Services GMBH v. Guidewire Software Inc., C.A. No. 07-826-SLR (D. Del. July 29, 2009) (Robinson, J.).

July 28, 2009

New District of Delaware Intellectual Property Case Filings

6/19: Kone Corporation v. Thyssenkrupp Elevator Corporation, Thyssenkrupp Elevator Americas Corporation (patent infringement)
6/23: Tandberg Inc. v. Multimedia Patent Trust (patent infringement)
6/25: Dey LP and Dey Inc. v. Teva Parenteral Medicines Inc., Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries Ltd. (patent infringement)
6/26: Daiichi Sankyo Co. Ltd. and Daiichi Sankyo Inc. v. Apotex Inc. and Apotex Corporation (patent infringement)
7/1: Alcon Research Ltd. v. Par Pharmaceutical Inc. (patent infringement)
7/1: Bayer Schering Pharma AG, Bayer HealthCare Pharmaceuticals Inc. and Schering Corporation v. Teva Pharmaceuticals USA Inc. and Teva Pharmaceutical Industries Ltd. (patent infringement)
7/2: Aladdin Knowledge Systems Ltd. v. Finjan Inc., Finjan Software Ltd. and Finjan Software Inc. (patent infringement)
7/2: Microsoft Corporation v. WebXchange Inc. (patent infringement)
7/2: Research Foundation of State University of New York, New York University, Galderma Laboratories Inc. and Galderma Laboratories LP v. Lupin Limited and Lupin Pharmaceuticals Inc. (patent infringement)
7/7: Eurand Inc., Cephalon Inc. and Anesta AG v. Anchen Pharmaceuticals Inc. and Anchen Inc. (patent infringement)
7/8: IpVenture, Inc. v. Sony Electronics, Inc.Sony Corporation, Sony Corporation of America, Panasonic Corporation and Panasonic Corporation of North America (patent infringement)
7/8: Stored Value Solutions, Inc. v. Card Activation Technologies, Inc. (patent infringement)
7/8: Takeda Pharmaceutical Company Limited and Takeda Pharmaceuticals North America Inc. v. Torrent Pharmaceuticals Limited and Torrent Pharma Inc. (patent infringement)
7/10: Eppendorf AG, Eppendorf Array Technologies SA and Eppendorf North America Inc. v. Nanosphere, Inc. (patent infringement)
7/13: Alcon Research Ltd. v. Barr Laboratories Inc. (patent infringement)
7/13: Allergan Inc., Allergan USA Inc., Allergan Sales LLC, Endo Pharmaceuticals Solutions, Inc, Supernus Pharmaceuticals Inc. v. Watson Pharmaceuticals Inc., Watson Laboratories Inc- Florida Watson Pharma, Inc. (patent infringement)
7/13: Mosaid Technologies Inc. v. International Business Machines Corporation (patent infringement)
7/15: Asahi Glass Co. Ltd., AGC Flat Glass North America Inc. v. Guardian Industries Corp. (patent infringement)
7/15: Congoleum Corporation v. Tarkett Enterprises Inc. and Tarkett Inc. (patent infringement)
7/15: Magna Entertainment Corp. and Xpressbet Inc. v. Internet Opportunity Entertainment Limited (trademark infringement)
7/16: Personalized User Model LLP v. Google Inc. (patent infringement)
7/16: Bone Care International LLC and Genzyme Corporation v. Sandoz Inc. (patent infringement)
7/17: Swimc Inc. v. Jack Schwarz Shoes Inc. (trademark infringement)
7/22: TK Holdings Inc. v IEE Sensing and IEE S.A. (patent infringement)
7/24: Bayer Schering Pharma AG, Bayer HealthCare Pharmaceuticals Inc. and Schering Corporation v. Teva Pharmaceuticals USA Inc. and Teva Pharmaceutical Industries Ltd. (patent infringement)

July 2, 2009

Magistrate Judge Stark: Motion for Judgment on the Pleadings -- denied

Magistrate Judge Stark recently recommended, among other things, that the Court deny defendant-counterplaintiff Rembrant’s motion for judgment on the pleadings. In re Rembrandt Techs. LP Patent Litigation, MDL Docket No. 07-1848-GMS-LPS, (D. Del. June 29, 2009). Rembrandt argued that they never signed a license agreement and no other facts are pled “to support the conclusory allegation that Rembrandt is nevertheless bound by [the] [a]greement as a partner, joint, venturer, alter ego, or principal of a party to the [a]greement . . . .” Id. at 7-8. In support of their motion, the Counter-Defendants argued that “under the guise of ‘challenging the pleadings,’ Rembrandt [was] asking the Court to ignore and dismiss the detailed factual allegations supporting each . . . claim[.]” Id. at 8. Noting that a complaint “must state enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element of a plaintiff’s claim[,]” Id. at 11, Magistrate Judge Stark recommended denying Rembrandt’s motion because the counterclaims were sufficient “under the notice pleading requirements” and because “granting judgment to Rembrandt without any consideration of what has been revealed in discovery would be improper.” Id. at 13.

In re Rembrandt Techs. LP Patent Litigation, MDL Docket No. 07-1848-GMS-LPS, (D. Del. June 29, 2009)

July 2, 2009

Judge Robinson: Plaintiffs not permitted to use information as a sword and a shield

Judge Robinson recently decided several discovery disputes between the parties in State of Florida v. Abbott Labs., C.A. 08-155-SLR (D. Del. June 23, 2009). Among other things, plaintiffs objected to defendants’ request for “rebates plaintiffs negotiate and receive for fenofibrate products.” Id. at 1. Plaintiffs objected on the grounds that the request sought (1) confidential information, and (2) that the information was not relevant. Judge Robinson rejected plaintiffs objections because: (1) if relevant, the information is discoverable. “Any problems with confidentiality can be resolved through a protective order . . . [;]” and (2) the rebates are relevant because plaintiffs broadly claimed their damages and so “cannot shield the rebate information from discovery . . . .” Id. at 2.

Among other things, defendants objected to plaintiffs’ request for settlement agreements. Judge Robinson reiterated her general practice to not “order the disclosure of settlement agreements, as such disclosure inhibits the very laudable purpose of settlement.” Id. at 3.

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July 2, 2009

Magistrate Judge Stark: assessing the adequacy of scienter when pleading fraud with particularity

In a recent trademark infringement and dilution case, Magistrate Judge Stark denied plaintiffs’ motion to dismiss defendants’ counterclaim seeking cancellation of plaintiffs’ trademark due to fraud on the Patent and Trademark Office. ING Bank v. the PNC Fin. Servs. Group, Inc., C.A. No. 08-514-GMS-LPS (D. Del. June 22, 2009). The basis of plaintiffs’ motion was that defendants failed to “state the facts and circumstances constituting fraud with particularity . . . .” Id. at 1. Among other things, plaintiffs’ argued that defendants failed to adequately allege scienter because they did not allege that the declarant, who made the statement-at-issue to the PTO, subjectively knew the statement was false when made. Magistrate Judge Stark rejected plaintiffs argument, however, because the declarant was clearing signing the statement to the PTO on behalf of the “applicant.” To assess the adequacy of scienter, the factfinder is “not limited to the subjective understanding of the corporate representative who made the statement . . . .” Id. at 5. Therefore, defendants adequately alleged scienter that “among those involved in the preparation of [the statement to the PTO] were those who knew or should have know that” plaintiffs were making a false statement. Id. at 7.