December 6, 2013

Judge Robinson grants motion for summary judgment of non-infringement.

In a recent memorandum opinion, Judge Sue L. Robinson granted a defendant’s motion for summary judgment of non-infringement under the doctrine of equivalents. Auxilium Pharmaceuticals, Inc. v. Upsher-Smith Laboratories, Inc., Civ. No. 13-148-SLR (D. Del. Dec. 4, 2013). The parties had stipulated previously that the defendant’s pharmaceutical formulation did not literally infringe the plaintiff’s patented methods for treating hypogonadism using a specific formulation of testosterone gel. The claims in the patents in suit focused on cyclic Hsieh enhancers, whereas the defendant’s formulation used Dudley enhancers, which the patentee gave up during prosecution. As the Court explained, “a large number of enhancers were known in the art, many of which the patentees referenced in their specification. The patentees specifically discussed the straight chain Dudley enhancers in the specification and, thereafter, differentiated the cyclic Hsieh enhancers.” Id. at 13. Further, the patentees “argued during prosecution that their invention was not obvious in light of Dudley enhancers . . . .” Id. The Court therefore found that the plaintiff could not recover through the doctrine of equivalents what it surrendered during prosecution. Id. at 13-14.

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December 6, 2013

Judge Robinson denies defendant’s request to claw back documents in ANDA litigation

Judge Sue L. Robinson denied defendant’s request to claw back certain documents that defendant initially produced “without claiming protection from disclosure under either the attorney-client privilege or the work product doctrine.” Pfizer Inc., et al. v. Lupin Pharm., Inc., et al., C.A. No. 12-808-SLR, slip. op. at 1 (D. Del. Dec. 2, 2013). Defendant produced “100 documents related to experiments conducted by scientists in [defendant’s] Intellectual Property Management Group,” and defendant sought to claw back those documents as protected under the attorney-client privilege or the work product doctrine. Id. at 2. Judge Robinson found it clear that these documents were not protected under the attorney-client privilege, as “they were neither created with the knowledge of . . . counsel, nor were they shared with . . . counsel contemporaneously.” Id.

The “harder question,” as Judge Robinson explained, was whether these documents were protected under the work product doctrine, which does not require attorney involvement for document protection. Id. at 3. Judge Robinson recognized that “the documents at issue were generated under the complex administrative paradigm created under the Hatch-Waxman Act,” and that “litigating the validity of patents is contemplated under the statute.” Id. at 3-4. However, Judge Robinson “decline[d] to equate the ordinary course of business of a generic manufacturer (testing compounds in order to develop bioequivalent drugs) with the more specific conduct associated with anticipation of litigation (e.g., testing the compounds of the prior art in order to invalidate a patent), especially where, as here, there [was] no indication that the [defendant] scientists were doing anything other than pursuing general scientific research on [defendant’s] prospective drug(s).” Id. at 4. Judge Robinson therefore found that defendant failed to meet its burden to demonstrate the documents at issue were protected from disclosure and denied defendant's requested claw back. Id.

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December 6, 2013

Judge Schneider determines effective date of Community of Interest doctrine

In a recent Letter Order, Magistrate Judge Joel Schneider resolved the parties’ dispute over the effective date of the Community of Interest (“COI”) doctrine. Evonik Degussa GmbH v. Materia Inc., C.A. No. 09-636-NHL-JS; Evonik Degussa GmbH v. Elevance Renewable Sciences, C.A. No. 10-200-NLH-JS, Letter Order (D. Del. Nov. 21, 2013). Plaintiff (“Evonik”) argued that the COI doctrine did not apply as between defendant (“Materia”) and UNO until May 3, 2007, the date Materia and UNO executed their “Second Amended and Restated Patent License Agreement” (“PLA”). Id. at 1. Materia, on the other hand, argued that the COI doctrine was applicable as early as January 12, 2007, when Materia and UNO signed a term sheet (“Term Sheet”) related to an amended and restated license agreement, or January 1, 2007, the Term Sheet’s effective date. Id.

Judge Schneider found that the COI doctrine’s effective date was not until May 3, 2007, the date that Materia and UNO signed the PLA. Id. at 2. As Judge Schneider explained, the “COI doctrine applies when two or more clients have a ‘common legal interest.’” Id. Judge Schneider highlighted that the Term Sheet specified that Materia and UNO did “not intend to be legally bound, unless and until a definitive License Agreement [had] been executed by both Parties.” Id. Judge Schneider therefore found that during the “negotiation period” between January 12, 2007 and May 3, 2007, Materia and UNO “were acting in their own and not the common best interest.” Id.

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December 6, 2013

Judge Sleet stays HumanEyes patent infringement litigation pending inter partes review of the patents-in-suit

Earlier this week, Chief Judge Gregory M. Sleet granted defendants' motion to stay litigation pending the outcome of inter partes review of the patents-in-suit. HumanEyes Technologies Ltd. v. Sony Corp., C.A. No. 12-398-GMS (D. Del. Dec. 2, 2013). The defendants filed the inter partes petitions five months after termination of a parallel ITC action, and the motion to stay three weeks after the petitions. Id. at 2 n.4. As such, Judge Sleet found no evidence that defendants were seeking an unfair tactical advantage. Moreover, because the parties are not direct competitors and HumanEyes can be adequately compensated for any delay by money damages, Judge Sleet found that plaintiff was unlikely to suffer prejudice due to the stay. Id. Also, because the case was in its early stages and because the Patent Trial and Appeal Board granted defendants' petitions, the inter partes review proceedings will likely simplify issues in the case and "advance the interests of judicial economy." Id. at 2 & n.5.

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December 6, 2013

Judge Stark Stays Related Cases Pending Outcome of Inter Partes Review Proceedings

Judge Stark has issued orders staying two related cases brought by General Electric against Kontera Technologies and Vibrant Media. In May 2013, Judge Stark denied a previous request by Vibrant to stay pending resolution of the inter partes review, which was filed by Vibrant. Since that time, however, the PTAB has instituted an inter partes review of the patents-in-suit based on its preliminary findings that all asserted claims are invalid. General Electric Co. v. Vibrant Media, Inc., C.A. No. 12-526-LPS, Memo. Order at 1 (D. Del. Dec. 4, 2013). As Judge Stark explained, “Regardless of their outcome, the IPR proceedings will simplify this case, as Vibrant will be estopped from contending that certain prior art invalidates the asserted claims and/or some or all of the asserted claims will be invalidated.” Id. Additionally, “[t]he PTAB has scheduled oral argument in the IPR for February 2014, so the delay caused by a stay will likely not be especially lengthy and, therefore, is unlikely to cause GE (which does not practice the patents-in-suit) undue prejudice. While the parties and the Court have invested resources in the litigation, and the litigation has advanced significantly since May, this action is far further away from conclusion than is the IPR.” Id. at 2. On these bases, Judge Stark ordered that the Vibrant action be stayed with the exception of “permit[ing] fact discovery to be completed—reducing any risk of evidentiary staleness that might otherwise be present during the pendency of the stay—but . . . allow[ing] the parties to avoid the expense of expert discovery until after the results of the IPR are known.” Id.

Additionally, Judge Stark seemed to find it persuasive that “in the related action, defendant Kontera Technologies, Inc. has agreed, if these actions are stayed, to be estopped to the same extent as Vibrant is estopped . . . [even though] [t]his was not Kontera’s position when the Court considered Vibrant’s earlier motion.” Id. at 1-2. Accordingly, Judge Stark ordered that the Kontera case as well.

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December 6, 2013

Chief Judge Sleet Construes Terms of “Jousting Toy” Tops Patent

Chief Judge Sleet recently issued his constructions of disputed claim terms in a patent related to “jousting toy” spinning tops. The patent is being asserted against Lego.

Judge Sleet construed the following terms:
- “stable footing on said playing surface to maintain said body section in an upright position without the use of centrifugal force”
- “[first playing component configured to] kinetically engage and form a scoring connection with a second playing component”
- “hooked arm connecting to said wire frame hoop”
- “means for rotating said body section”
- “means for carrying said body section above a playing surface”
- “means for providing a stable footing on said playing surface to maintain said body section in an upright position without the use of centrifugal force”
- “means for kinetically engaging said first playing component with a second jousting element to form a scoring connection”

Battle Toys, LLC v. Lego Systems, Inc., C.A. No. 12-928-GMS, Order at 1-10 (D. Del. Dec. 2, 2013).

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December 4, 2013

District of Delaware Announces Patent Study Group

The District of Delaware has announced the creation of a Patent Study Group focused on exploring "issues relating to the practice of patent litigation, with a particular emphasis on the handling of such cases in the District of Delaware." The Court's announcement was posted on its website and reads as follows:


Court Announces Patent Study Group

The United States District Court for the District of Delaware is pleased to announce the creation of a Patent Study Group. The goal of the Patent Study Group is to explore issues relating to the practice of patent litigation, with a particular emphasis on the handling of such cases in the District of Delaware. In recent years, more patent cases have been filed in the District of Delaware than in almost all of the other federal trial courts across the country. The size of Delaware’s patent docket, and the experience of the District’s bench and bar, create a unique opportunity for identifying potential “best practices” for the management of these complex cases. Over the coming months, the Patent Study Group will solicit input from practitioners who regularly appear in the District of Delaware (in-state and out-of-state counsel), in-house counsel, and others with an interest in understanding and improving the practice of patent litigation.

December 3, 2013

Judge Stark grants leave to amend and offers guidance on sufficiency of plaintiff's claims

In Gammino v. American Telephone and Telegraph Company, et al., C.A. No. 12-666-LPS (D. Del. Nov. 22, 2013), Judge Leonard P. Stark granted plaintiff’s motion for leave to file an amended complaint. Having granted this motion, the Court also denied as moot motions to dismiss direct and/or willful infringement claims contained in the original complaint. However, the Court still “offer[ed] . . . guidance as to the adequacy of the pleadings contained in the Amended Complaint.” Id. at 6.

One defendant opposed plaintiff’s motion for leave to amend, arguing that amendment was futile because the requested claims were barred by claim preclusion. Plaintiff’s proposed amendment added additional defendants and allegations related to direct and willful infringement. Id. at 2. Defendant argued that because plaintiff had previously dismissed indirect infringement claims against all defendants with prejudice, and “because Plaintiff's claim for direct infringement is asserted against the same defendant on the same alleged facts, the adjudication on the merits of the claim for indirect infringement must also bar Plaintiff's claim for direct infringement." Id. at 3-4. The Court disagreed because the dismissal of the indirect claims occurred in the instant action and had not resulted in a final judgment; for res judicata to apply, “an adjudication on the merits must have occurred in a previous proceeding and resulted in a final judgment.” Id. at 4. Furthermore, the dismissed causes of action arose under a different section of the patent laws than the direct claims. Id.

Because the Court granted plaintiff’s motion for leave to amend, its Amended Complaint was now the operative complaint. Therefore, the Court denied as moot other defendants’ motions to dismiss direct and/or willful infringement claims contained in the original complaint. Id. at 6. But, “in light of the length of time that this action has already been pending, and in hopes that yet another round of motions to dismiss may be avoided,” the Court “offer[ed] . . . guidance as to the adequacy of the pleadings contained in the Amended Complaint.” Id. at 6. The Court examined plaintiff’s allegations and observed that its direct and willful infringement allegations appeared to be adequate under the applicable standards. Id. at 7-8.

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December 3, 2013

Judge Andrews grants motion to disqualify counsel

In Enzo Life Sciences, Inc. v. Adipogen Corporation, C.A. No. 11-88-RGA (D. Del. Nov. 20, 2013), Judge Richard G. Andrews granted defendants’ motion to disqualify plaintiff’s counsel. An attorney that had previously worked on the case for defendants was now a named partner of plaintiff’s new counsel. Id. at 3.

It was clear that the named partner was disqualified; the Court considered whether the conflicted attorney’s firm had complied with ABA Model Rule of Professional Conduct 1.10(a)(2), which outlines what steps a firm can take to avoid a conflict being imputed to it. The Court concluded that the firm had not established an effective screen and had not shown that no part of the fee for this action would be apportioned to the conflicted attorney. Id. at 6.

As to the adequacy of the screen, several factors weighed in favor of disqualification. The Court cited the conflicted attorney’s past involvement in the defendants’ representation, which included drafting confidential mediation statements and signing various discovery documents. Id. at 7-8. While this attorney did not have a “pivotal role” in the case while working for defendants, and while he “may now have a ‘limited recollection’ of this case, at the time he was working on the case he surely was aware of the defense strategies.” Id. at 8. Furthermore, he had been an attorney of record for defendants and now his name appeared on firm correspondence, which created “a constant appearance of a continuing imputed conflict.” Id. Finally, the small size of this firm detracted from the efficacy of a screen. Id. at 9.

While the firm had implemented a screen in a timely fashion, the screen also lacked “key aspects.” Id. First, while it prohibited firm members from talking about the case with the conflicted attorney, it lacked a “prohibition regarding discussing the matter in the presence of [this attorney], or in locations from which [he] could still hear the conversations.” Id. This was a particularly important issue for a small firm. Second, the screen had no enforcement mechanism as it provided “no warning to employees as to what would occur if the screen were not followed.” Id.

As to the fee issue, “no evidence was provided to the Court to assess whether [plaintiff’s counsel’s firm] has sufficient funds, considering the firm's small size, to satisfy the firm's partner share agreement without any of the funds from this case being used to pay [the conflicted attorney’s] share. While the court is mindful that [the attorney’s] partnership share would not fluctuate based upon the success of their client, because of the nature of a small firm it is likely that his actual pay would be affected.” Id. at 11.

Finally, the Court concluded that a balancing of the equities favored disqualification, emphasizing that the “strong interest in preserving the integrity of the judicial system” was particularly strong here, where the potential for use of confidential information would be in the same matter. “This court must protect against even the appearance of impropriety.” Id. at 12-13.

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December 2, 2013

Judge Andrews grants motion to preclude assertion of willful infringement

In a recent memorandum order, Judge Richard G. Andrews granted defendants’ motion to preclude plaintiff’s assertion of willful infringement. Inventio AG v. Thyssenkrupp Elevator Americas Corp., C.A. No. 08-874-RGA (D. Del. Nov. 20, 2013). First, Judge Andrews found that the complaint did not contain any factual assertions related to willfulness, noting that “[t]he words ‘wilfull,’ ‘willfully,’ ‘objectively unreasonable,’ ‘knowledge of the patent,’ or any similar construct, do not appear in the Complaint.” Id. at 1. While plaintiff argued that its request for a “declaration that this is an exceptional case pursuant to 35 U.S.C. § 285” put defendants on notice of its willfulness claim, Judge Andrews found that a “demand for relief is not a factual assertion.” Id. Second, Judge Andrews found that plaintiff should not be permitted to amend its complaint to assert wilfull infringement, noting that the deadline to amend the pleading was “nearly a year ago,” and that plaintiff had not shown the diligence required by the good cause standard under Fed. R. Civ. P. 16. Id. at 1-2.

Third, Judge Andrews found that plaintiff “proffered no evidence from which pre-filing willful infringement could be found.” Id. at 2. Specifically, Judge Andrews found that the “hazy testimony” plaintiff cited was insufficient to establish that defendants had pre-suit knowledge of the asserted patents. Id. at 3. Further, while plaintiff argued that defendants saw that “Schindler’s elevator repair operations,” were marked with five patents, Judge Andrews explained, among other things, that none of those patents were asserted in the instant litigation, and that it did not appear that defendants copied any patented aspects of the marked Schindler product. Id. at 3 & n.3.

Fourth, Judge Andrews found that plaintiff failed to set forth a sufficient to basis to pursue a post-filing willfulness claim. Id. at 3. Plaintiff argued that a post-filing claim was justified because “it did not know Defendants were engaged in any post-filing infringement until receiving discovery.” Id. at 4. Judge Andrews found, however, that such argument made “no sense,” in part because plaintiff’s complaint indicated there was post-filing infringement. Id. Moreover, as Judge Andrews explained, “[i]t seems hard to believe that Plaintiff, having learned that its competitor was infringing its patents by renovation projects that would take some period of time to complete, did not know (without the need for discovery) that the infringement was, as it alleged, continuing.” Id. at 5

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