Judge Leonard P. Stark recently denied Comcast's motion to dismiss for lack of jurisidiction. DN Lookup Technologies LLC v. Comcast Corporation, et al., C.A. No. 11-1181-LPS (D. Del. Oct. 1, 2012). In determining whether personal jurisdiction exists, the court first looks to Delaware's long arm statute, 10 Del. C. § 3104(c), and then determines whether asserting personal jurisdiction would violate due process. Id. at 5-6. Plaintiff argued that the court had specific jurisdiction under Delaware's long arm because "Comcast provide[d] infringing services in Delaware" and because "Comcast enjoy[ed] substantial revenues from its subsidiaries[.]" Id. at 7. Comcast argued that it" [did] not own, operate, sell, market, offer to sell, or otherwise provide any cable produces or services in Delaware." Judge Stark found otherwise, however. For example, a press release on the comcast.com website notified the public of Comcast's launch of WiFi in northern Delaware and additional hotspots in and around Wilmington, Delaware. Id. at 7-8. In addition, "the Comcast Agreement for Residential Services entered in to by Wilmington, Delaware customers directs customers to resolve problems by contact ing Comcast." Id. at 8. In addition, Judge Stark found that plaintiff made out a prima facie case that defendant Comcast Cable Communications LLC ("CCCL") was the agent of Comcast when providing accused services in Delaware. Id. at 8. Among other things, Comcast held "itself out to the public as being principally involved in the development, management and operation of cable systems and in the delivery of programming content." Id. Comcast also "enjoy[ed] substantial revenues from CCCL, its wholly-owned subsidiary[, and] divert[ed] free cash flow from its subsidiaries, including CCCL, to distribute dividends to its own shareholders." Id. at 8-9. Judge Stark also determined that due process was satisfied for the aforementioned reasons. Id. at 10-11.
Chief Judge Gregory M. Sleet recently clarified the effect of the term “comprising” in claim construction. See Hollingsworth & Vose Filtration Ltd. v. Delstar Tech., Inc., et al., C.A. No. 10-788-GMS (D. Del. Sept. 25, 2012). This came as part of the Court’s order clarifying its previous claim construction order, in which it construed the following language found in Claim 1 of U.S. Patent No. 6,623,548: “filter material comprising: a blend of polypropylene fibres and dry spun halogen free acrylic fibres” to mean “a mixture of fibres that includes at least polypropylene fibres and dry spun halogen free acrylic fibres. Dry spun halogen free fibres means halogen free acrylic fibres made by a process of dry spinning in which the polymer is formed into fibres by extrusion into a gas such as air and not by extrusion into a liquid coagulation bath.” Id. at 1 n.1; D.I. 50 at 1 (previously discussed here).
The Court clarified its previous construction to address the defendants’ question whether, in Claim 1, “the ‘blend’ is open to the inclusion of other types of unrecited fibres, or whether it is only the ‘filter material’ that can include other types of unrecited fibres.” Id. at 1-2 n.1 (quoting D.I. 53 at 5). The Court clarified that the word “blend,” as used in Claim 1, “is not limited to only polypropylene fibres, dry spun halogen free acrylic fibres, and polyvinyl chloride fibres but, rather, is open to the inclusion of other types of unrecited fibres, including wet spun halogen free acrylic fibres.” Id. at 1. That clarification, however, was not the result of the interplay of the words “comprising” and “blend,” as urged by the plaintiff. The Court explained that “[t]he transition ‘comprising’ generally renders the preceding term (e.g., the ‘filter material’) open-ended, but it has no such effect on subsequently recited claim elements (e.g., the ‘blend’).” Id. at 1-2 n.1 (citing Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337, 1343 (Fed. Cir. 2007) (previously discussed on Patently-O)). However, the Court agreed with the plaintiff that “like ‘comprising’—the term ‘blend’ itself ordinarily conveys the concept of ‘including, but not limited to.’” Id. at 1-2 n.1. Citing the Federal Circuit’s decision in Mars, Inc. v. H. J. Heinz Co., 377 F.3d 1369 (Fed. Cir. 2004) (recognizing that the term “mixture” is open-ended), the Court found that the defendant’s acknowledgement that “[t]he blend is a mixture of fibres” required that the claim term “blend” not be limited to a blend of only the subsequently recited fibres. Id. at 1-2 n.1.
Managing editor and co-author of Delaware IP Law Blog, Pilar G. Kraman, is a featured author in the latest issue of Managing IP’s, Intellectual Property Focus. This special “Americas IP Focus 2012” showcases commentary and analysis from IP lawyers throughout the Western Hemisphere, and is distributed to IP Owners and IP lawyers around the world. The publication will also be distributed to attendees of major IP conferences in October including: the AIPLA annual meeting; the LES US & Can annual meeting; and the AIPPI world congress. You can read Pilar’s article below, “Trends in Delaware post-Twombly,” which discusses recent developments in the District of Delaware regarding the sufficiency of pleadings alleging indirect and direct patent infringement.
Judge Andrews disqualifies attorneys based on their law firm's representation of plaintiff's parent company nearly twenty years earlier.
Judge Richard G. Anderson recently disqualified the law firm Latham & Watkins as defense counsel in a patent infringement action filed by the subsidiary of a former Latham client. Eon Corp. IP Holdings LLC v. Flo TV Inc., et al., C.A. No. 10-812-RGA (D. Del. Sept. 24, 2012). Latham represented the plaintiff's parent company between 1988 and 1995, but did not represent it in patent prosecution matters, or with regard to any licensing efforts involving the patent at issue. Id. at 3, 7. Instead, Latham represented the plaintiff's parent company in general corporate and regulatory matters. Id. at 3. The Court noted that some of those corporate and regulatory matters related to the same or similar technology at issue in the patent litigation. Id. at 3.
There was no dispute that the two Latham attorneys who had been admitted pro hac vice in the litigation were not at Latham during the firm's prior representation, and it was acknowledged that they were subject to an ethical wall. Id. at 3. Neverthelss, the Court was concerned because, "[s]ome of the invalidity defenses, if pursued, could involve factual inquiry into" the activities of the plaintiff's parent company when it was represented by Latham, "and it is conceivable that the information about related factual matters could have been shared with Latham attorneys." Id. at 7. As a result, the Court found that "the answer to the question, 'might [the plaintiff] have disclosed to Latham confidences which could be relevant to the present action, and detrimental to [the plaintiff] in this action,' is surely yes." Id. at 8.
The Court explained that, "[i]n terms of the conflict [of interest] analysis, it makes no difference that seventeen years have passed since Latham represented [the plaintiff's parent company], when the lawsuit will in part concern events that occurred twenty years ago." Id. The Court acknowledged that the conflict of interest could be viewed as having been ameliorated in various ways: by the passage of time, the imposition of an ethical wall, and the fact that the two attorneys involved in the litigation were not involved in the previous representation. Neverthelss, the Court found that "on balance, considering the rather unusual circumstances of the conflict of interest here, I believe the most appropriate exercise of my discretion is to disqualify Latham and Watkins ... ." Id. at 10.
At plaintiff's request, Judge Leonard P. Stark recently stayed a patent infringement lawsuit pending the court's resolution of motions for summary judgment in related cases. St. Clair Intellectual Property Consultants, Inc. v. Motorola Mobility LLC, C.A. No. 11-1305-LPS (D. Del. Sept. 20, 2012). Plaintiff argued that a stay was appropriate because "multiple summary judgment motions, including several seeking to invalidate patents asserted here, [were] pending before this Court in related patent infringement cases." Id. at 2. Defendant complained that a stay would prejudice it because the defendant had already complied with court ordered deadlines, particularly regarding claim construction, and plaintiff would have additional time "to refine its theories or strategies[.]" Id. at 3. Judge Stark did not think this prejudice rose to the level of undue, but noted that plaintiff's failure to comply with the court's scheduling order deadlines could be "most appropriately addressed, if necessary, in the context of Defendant's recently-filed motion for sanctions." Id.
Judge Stark Grants Leave to File Supplemental Complaint to Include Claims of Indirect Infringement Based on Events Occurring after Filing of the Original Complaint
In a recent memorandum order, Judge Leonard P. Stark granted Plaintiff British Telecommunications’ (BT’s) motion for leave to file a supplemental complaint for patent infringement against Defendant Google. BT sought to file a supplemental complaint in order to include claims of indirect infringement for events occurring after the filing of its original complaint. More specifically, BT sought to add Google’s newly introduced product, Google Play, and to include indirect infringement claims based on Google’s knowledge of the patents-in-suit since at least the filing of the original complaint. British Telecommunications PLC, v. Google Inc., C.A. No. 11-1249-LPS, at 1 (D. Del. Sep. 20, 2012).
Noting that the Third Circuit “has adopted a liberal approach to granting leave to amend,” Judge Stark was “persuaded that the proper course of action is to grant Plaintiffs motion for leave to amend.” Id. at 1-2. He found “no evidence of undue delay, bad faith, or dilatory motive on the part of Plaintiff,” especially where “Plaintiff filed its motion before discovery began, within the time frame for supplementing or amending pleadings as set forth in the Scheduling Order, and within four months of filing its original complaint.” Id. at 2. Accordingly Judge Stark granted BT’s motion for leave to file a supplemental complaint.
This result is in accord with Judge Stark’s prior decisions regarding the knowledge requirement of indirect infringement, and Judge Stark stated as much: “Defendant's argument that the motion is futile because Plaintiff fails to state a plausible claim of indirect infringement is unpersuasive. While Defendant notes that decisions in this District are not uniform as to whether knowledge of a patent may be demonstrated by filing of a complaint, the undersigned judge has expressed the view that, for purposes of indirect infringement occurring after the filing date, ‘an accused infringer is on notice of the patent(s)-in-suit once an initial pleading identifies the patents-in-suit.’” Id. at 2 (citing Softview LLC v. Apple Inc., 2012 WL 3061027, at *7 (D. Del. July 26, 2012)).
Judge Robinson Grants Defendants’ Motion to Dismiss Under the Doctrine of Claim Preclusion Where Infringement Allegations Were Previously Asserted Against the Same Defendants and Based on the Same Patent Invalidated in a Prior ANDA Litigation
In Senju Pharmaceutical Co., Ltd., et al. v. Apotex Inc., et al., C.A. No. 11-1171-SLR (D. Del.), Judge Robinson dismissed plaintiffs’ claims of infringement for failure to state a claim where the allegations were asserted against the same defendants and based on the same patent and same ANDA filing that the Court had ruled upon in a prior litigation. Id. at 1. In that prior litigation, plaintiffs filed suit against defendants for infringement of the patent at issue based on defendants’ ANDA filing. Id. at 1. At the conclusion of that case, the Court entered final judgment against plaintiffs, invalidating the asserted claims of the patent at issue as obvious. Id. at 2-3. However, while that prior litigation was still pending, without notifying the Court, plaintiffs initiated and were engaged in reexamination proceedings involving the same patent at issue. Id. at 1. Following the reexamination proceedings, plaintiffs then filed the instant litigation against defendants alleging infringement of those "new" claims of the patent at issue that were “added or amended” during reexam. Id. at 1. In response, defendants moved to dismiss the instant action based on the doctrine of res judicata or claim preclusion. Id. at 6. Specifically, defendants argued that dismissal was proper because “the claims of the current lawsuit are precluded” by the judgment against the plaintiffs in the prior litigation. Id. at 6. The Court agreed. Id. at 6. Citing both Third Circuit and Federal Circuit authority, the Court noted that “[c]laim preclusion bars any new legal claim based on the same cause of action previously asserted” and that “[e]ach patent, not patent claim, gives rise to an independent and distinct legal claim or cause of action.” Id. at 7 (emphasis in original). In its analysis, the Court concluded that in the instant litigation the plaintiffs “are alleging infringement by the same proposed product that was at issue in the first litigation” and that “[plaintiffs] could have asserted the equivalent of the new and amended claims in the first litigation.” Id. at 8-9. The Court held that the “reexamination of the patent-at-issue did not create a new cause of action against the same previous defendant and accused product and reasoned that “[a]llowing this case to go forward would open the door to relitigation of a matter that has already been decided on the merits.” Id. at 11.
Judge Sue Robinson recently granted a defendant summary judgment of non-infringement based on the doctrine of patent exhaustion. Keurig, Inc. v. Sturm Foods, Inc., Civ. No. 10-841-SLR (D. Del. Sept. 13, 2012). The plaintiff in the case, Keurig, is the manufacturer of popular beverage brewers, as well as individual serving cartridges for use in its brewers. Id. at 1. Keurig sued the defendant, Sturm Foods, asserting various patent and non-patent claims, based on the defendant’s manufacture and sale of its “Grove Square” line of individual serving cartridges, the packaging of which indicates that they are “*For use by owners of Keurig coffee makers.” Id. at 3. In one of several competing motions for summary judgment, the defendant argued that the doctrine of patent exhaustion precluded a finding of infringement. The Court agreed, explaining that the “purpose of the patent exhaustion doctrine is to ensure that a patentee surrenders its statutory monopoly after it has received compensation for an article sold that embodies its patent.” Id. at 10. Here, the “article sold” was the patented brewer. The Court distinguished the case from those in which patent exhaustion arises in connection with the sale of an “incomplete” item because, in this case, Keurig “sells a product that completely practices the patent. … There is no need to determine the extent to which the brewers embody the patent when the brewers are sold in a completed form. For this reason, the court agrees with defendant that the two-prong test [under Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008)] is inapplicable; instead, the ‘long standing doctrine’ that an ‘initial authorized sale of a patented item terminates all patent rights to that item’ is applicable. Id. at 9-10 (quoting Quanta, 553 U.S. at 625). With regard to the non-patent claims (including trademark and trade dress infringement, unfair competition, and false advertising), the Court found that genuine issues of material fact exist which precluded entry of summary judgment.
Magistrate Judge Mary Pat Thynge recently issued a report and recommendation setting forth the court's recommendations for constructions of the disputed claim terms of U.S. Patent No. 7,337,949 entitled System for Marketing Leisure Activity Services Through Prepaid Tickets. Quantum Loyalty Systems, Inc. v. TPG Rewards, Inc., C.A. No. 09-022-RGA-MPT (D. Del. Sept. 11, 2012). The following terms were construed:
"service specific payment mode"
"service specific ticket"
"substantially unique identifier"
"representing an initial value to be remitted"
"configured to be valid for incremental quantity of services"
"at any one of a plurality of service providers"
"payment mode is redeemable at a variable rate"
"enabling a variable rate redemption of the payment mode"
"for a redemption in exchange for a unit use of a desired service"
"at the selected service proivder, debiting a price set by the selected service provider"
"effecting payment/effecting payment at the price debited"
"as opposed to a cash sum"
"absorbing any difference in prices"
"adjusting price of the payment mode"
"verifying an expiration date"
Last week we reported on Judge Sue Robinson’s opinion denying a motion to dismiss for lack of sufficient standing in MobileMedia Ideas, LLC v. Apple Inc., C.A. No. 10-258-SLR (D. Del. Aug. 16, 2012) (read about that decision here). The case is now moving forward on the merits, and Magistrate Judge Mary Pat Thynge has issued a memorandum order regarding MobileMedia Ideas’ (“MMI”) assertion of the common interest privilege.
As detailed in the previous post, MMI is a patent holding entity for Sony and Nokia. Apple, the defendant in this suit, served third party subpoenas seeking documents from three Nokia entities that had previously been shared between Nokia, Sony, and MMI. Each Nokia entity objected to the subpoenas based on the attorney-client privilege. Apple conceded that the common legal interest privilege might apply to the documents because Sony and Nokia worked together to develop a litigation strategy for MMI. But Apple contested whether each document shared among the parties was shared specifically for the purpose of furthering a joint legal strategy, as is required for the common interest privilege to apply. See MobileMedia Ideas LLC v. Apple Inc., C.A. No. 10-258-SLR/MPT, at 1-10 (D. Del. Sep. 10, 2012).
After considering all of the evidence, Judge Thynge found that the common interest privilege applied to the documents Apple sought: “Apple’s argument that the transfer of the patent prosecution files and [invention disclosure forms (“IDFs”)] to MMI were not to further a joint legal strategy is refuted by the Formation and Operating Agreements which provide the central purpose of MMI was ‘to acquire, develop, administer and manage [i]ntellectual [p]roperty rights’ related to the inventions obtained from the Nokia and Sony entities.” Id. at 12. Also, “since the formation of MMI, Nokia, Sony and their respective wholly owned subsidiaries have provided assistance and cooperation to MMI’s outside attorneys . . . . Such future cooperation, which may involve providing additional materials, does not imply that the original transfer of the patent prosecution files and the IDFs was merely to effectuate transfer of the patents.” Id. at 13. Furthermore, [t]he exchanges by Sony [and] Nokia . . . were made under non-disclosure agreements with the understanding the parties shared a common legal interest. . . . A common legal interest agreement . . . was also executed [and] it acknowledged litigation was contemplated.” Id. at 15-16. Finally, Sony and Nokia “receive a percentage of the recovery from any successful enforcement by MMI of the transferred patents confirming their common interest in MMI prevailing in the present litigation.” Id. at 16.
Judge Thynge therefore concluded that the “language, provisions and tenor of the [various agreements] clearly indicate at the time of their execution, the Nokia and Sony entities anticipated litigation for enforcement of the transferred patents. As evidenced by the various agreements, the purpose of the transfer of the patent prosecution files and the IDFs were part of the joint legal strategy involving the Nokia and Sony entities that began before MMI’s formation and continued thereafter. MMI and the Nokia and Sony entities have operated with the expectation that any shared privilege communications would be confidential and protected from disclosure. The Nokia and Sony entities, as licensees, clearly share a common legal interest in MMI prevailing in this action. That as a result of the Formation Agreement, MMI is now the owner of the patents does not eviscerate or prevent the sharing of a common legal interest with Nokia and Sony.” Id. at 14.