April 11, 2014

Judge Robinson Denies Motions to Dismiss Based on Lack of Title to Patent-in-Suit

Judge Robinson has issued a decision on several pending motions to dismiss for lack of subject matter jurisdiction in cases filed by plaintiff Data Speed Technology LLC. The moving defendants alleged lack of standing to sue because the plaintiff had not demonstrated that it owns all rights in the patent-in-suit. Judge Robinson ultimately denied the motions, but not before indicating that the chain of ownership of the patent-in-suit was “in a muddle.” The chronology of ownership of the patent-in-suit was complicated, even including litigation over title to the application leading to the patent-in-suit, and Judge Robinson explained the chain of title in depth after pulling relevant facts from several different parties’ submissions. Ultimately, although she found the “efforts of [the inventors] to monetize their invention through [assignment to] another individual . . . [could] be charitably characterized as less than sophisticated,” for the purposes of the motions to dismiss, the chain of title had been sufficiently proven. Data Speed Tech. LLC v. EMC Corp., et al., C.A. No. 13-616-SLR, et al., Memo. at 10 (D. Del. Apr. 8, 2014).

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April 11, 2014

Judge Robinson denies motion for judgment on the pleadings that defendant's cardboard box is not substantially similar to the patented design

Judge Sue L. Robinson recently denied defendant's motion for judgment on the pleadings based on the argument that defendant's "cardboard box design is 'not substantially similar' to the patented design." Poly-Am., L.P. v. API Indus., Inc., C.A. No. 13-693 (D. Del. Apr. 10, 2014). Judge Robinson compared the accused and patented designs to conclude that they are not "plainly dissimilar." Id. at 3. To reach this conclusion, Judge Robinson applied the standard from Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008). In particular, a patentee cannot meet its burden of proving that the two designs "would appear 'substantially the same' to the ordinary observer" if the claimed and accused designs are sufficiently distinct." Id. at 2. However, if the claimed and accused designs are not "plainly dissimilar, resolution of the question whether the ordnary observer would consider the two designs to be substantially the same will benefit from a comparison of the claimed and accused designs with the prior art . . . ." Id. Further, if a design contains both ornamental and functional features, the court may "'separate the function and ornamental aspects' because the scope fo the design claim 'must be construed in order to identify the non-functional aspects of the design as shown in the patent.'" Id. (quoting Richardson v. Stanley Works, Inc., 597 F.3d 1288, 1293 (Fed. Cir. 2010).

Judge Robinson disagreed with defendant that certain features of the accused design were different than the patented design. In particular, defendant argued that the accused design had bottom flaps rather than a solid bottom. Id. at 3. Judge Robinson held that "[t]he solid bottom cannot be a design difference that renders the accused product substantially dissimilar because it is not an ornamental design feature." Id. (citing Egyptian Goddess, 543 F.3d at 680). Judge Robinson also rejected defendant's argument that "the accused design has no top flaps with no tabs and no slots." Id. Judge Robinson noted that "an ordinary observer does not watch the box being formed in the manufacturing facility but, instead, sees the box when it is merchandised in the store. The ordinary observer, therefore, would not observe the tabs and slots, as the box top remains closed during the normal use of the container." Id. Judge Robinson also found that there remained issues of fact whether certain features of the accused design, such as the perforated opening of the accused design is a relevant difference, such that "an ordinary observer would acutally open the accused box to its full extent if not necessary to reach the product." Id. at 4. Judge Robinson also declined to find as a matter of law that the "overall visual differences between the accused design and patented design are greater than the differences between the patented design and the prior art." Id. at 6. (citing Egyptian Goddess, 543 F.3d at 678).

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April 10, 2014

"Conditional counterclaims" against DJ plaintiff/supplier insufficient to create jurisdiction, according to Federal Circuit

In Microsoft Corporation v. DataTern, Inc., the Federal Circuit made clear that conditional counterclaims and conditional statements of infringement alleged against a declaratory judgment plaintiff are insufficient to establish declaratory judgment jurisdiction. The Court noted, “[a] declaratory judgment plaintiff must plead facts sufficient to establish jurisdiction at the time of the complaint, and post-complaint facts cannot create jurisdiction where none existed at the time of filing.” The Court further noted that, even if post-complaint facts could be considered in evaluating DJ jurisdiction, the defendant/patentee’s conditional allegations and a refusal to grant a covenant not to sue are not the type of facts to support DJ jurisdiction. ...

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April 10, 2014

Judge Stark provides guidance for parties’ post-trial motions

Following the jury’s verdict of no infringement and invalidity in Personalized User Model, L.L.P. v. Google, Inc., C.A. No. 09-525-LPS, on April 7, Judge Leonard P. Stark issued a letter to the parties, having completed review of the parties’ proposals for how the case should proceed, as well as their motions for judgment as a matter of law (“JMOL”).

The Court summarized its “tentative views” related to plaintiff’s motion for JMOL on infringement and no invalidity: it was “inclined to deny” them as it concluded that the jury could reasonably have found non-infringement and invalidity. See id. at 4-6. On the other hand, as to the jury’s verdict of breach of contract by plaintiff, the Court indicated that it was likely to grant JMOL to plaintiffs, based on Delaware statutory law. See id. at 6-8.

In conclusion, the Court advised that the parties should “determine whether they wish to further litigate JMOL issues and/or seek a new trial” and that the parties should meet and confer to “propose as compressed a schedule as possible for the submission of short briefs so the Court can determine in an efficient manner whether to adhere to its inclinations and enter judgment.” Id. at 8. Until these issues were resolved, the Court saw “no basis for the additional proceedings (i.e., a bench hearing on equitable issues and jury trial on damages) requested by defendant.” Id.

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April 8, 2014

Judge Andrews Construes Terms of Blood Pressure Patent

Judge Andrews recently issued his amended construction of several disputed terms in U.S. Patent No. 6,565,514, a blood pressure system patent asserted by St. Jude against Volcano Corp. The Court construed the following terms:
- “Displaying said graph”
- “of the data resulting from said calculation”
- “Detecting continuously at least two physiological variables, arterial pressure (Pa) and distal coronary pressure (Pd), derived from the guidewire-mounted pressure sensor”
- “Sensor element”

In construing these terms, Judge Andrews also found that the term “of the data resulting from said calculation” was not indefinite. St. Jude Med., Cardiology Div., Inc., et al. v. Volcano Corp., C.A. No. 12-441-RGA, Or. at 1-5 (D. Del. Apr. 1, 2014).

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April 8, 2014

Judge Stark Considers Post-Trial Damages and Denies Stay of Execution of Judgment

Judge Stark recently issued his ruling on the issue of post-trial damages following a two-day bench trial. In June 2010, a jury found that the defendant’s products infringed the plaintiffs’ patents and awarded damages in the form of both lost profits and reasonable royalties for the period from March 2002 to December 31, 2009. The Court denied motions for judgment as a matter of law and a motion for a permanent injunction, and on appeal the Federal Circuit affirmed the judgment in all respects. The parties were then unable to agree on the amount of “supplemental damages” owed to the plaintiff for the period of January 1, 2010 to October 15, 2011, when the patents-in-suit expired. The Dow Chem. Co. v. Nova Chems. Corp., et al., C.A. No. 05-737-LPS Slip. Op. at 1-4 (D. Del. Mar. 28, 2014). Following a bench trial to determine the supplemental damages owed, Judge Stark found that the plaintiff was entitled to lost profits and reasonable royalties, accepting the plaintiff’s arguments as well as the plaintiff’s rebuttals to the defendant’s argument. Id. at 4-22. Judge Stark also found, however, that the plaintiff was not entitled to enhanced damages. The plaintiff requested enhanced damages for “willful post-judgment infringement during the sixteen months between when the Court denied [the plaintiff’s] request for a permanent injunction and the expiration of the patents-in-suit.” But as Judge Stark explained, “the grant of [the defendant’s] motion for summary judgment of no willfulness effectively decided this issue” and the “Court is not persuaded it should revisit the question.” Id. at 22.

Interestingly, Judge Stark also had to consider whether to stay entry or execution of the judgment until after completion of an ongoing reexamination of the patents-in-suit at the PTO. Although the defendant had already paid damages associated with the jury verdict, it argued that it should, at a minimum, pay the supplemental damages to an escrow account to mitigate the risk that it would be paying damages on patents that could be found invalid. Judge Stark acknowledged that these “arguments implicate potentially difficult questions. If the patents-in-suit are invalid, [the defendant] cannot infringe them, and should not have to pay [the plaintiff] anything further. But as of today the patents-in-suit remain valid . . . and weighing heavily against granting the requested stay, [the defendant] waited until very late in this litigation to initiate the reexaminations and to seek a stay. [The defendant] filed its petitions for reexamination of the patents-in-suit on December 17, 2012, more than seven years after this case was filed and more than two years after the jury’s verdict on infringement and invalidity. Under the circumstances, the Court believes the most appropriate exercise of its discretion is to deny the requested stay.” Id. at 23-24.

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April 8, 2014

Chief Judge Sleet Grants Transfer to Northern District of California

OpenTV, a Delaware corporation with a California principal place of business, sued Netflix, also a Delaware corporation with a California principal place of business, for infringement of patents related to technologies for “over-the-top” delivery of movies, television, and other media via the Internet. Netflix filed a motion to transfer to the Northern District of Delaware, which Chief Judge Sleet granted.

Considering the Third Circuit’s Jumara factors, Judge Sleet found that “[a]lthough the plaintiff’s choice of venue is ordinarily entitled to deference, its preference is ‘entitled to less than the paramount consideration’ when it files suit where it is incorporated but not physically located. Here, OpenTV’s preferred forum is Delaware, where it is incorporated, but Open TV’s principal place of business is in Northern California. Therefore, the court will not accord substantial weight to OpenTV’s choice of Delaware.” This factor, therefore, weighed slightly in favor of transfer to California. OpenTV, Inc. v. Netflix, Inc., C.A. No. 12-1733-GMS, Memo. at 3 (D. Del. Mar. 31, 2014) (citations omitted). Additional facts that weighed in favor of transfer included that the accused products were developed in California, the parties could more easily and cost-effectively litigate in California, and relevant witnesses including the inventors and third party witnesses were in California. Id. at 4-8.

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April 7, 2014

Judge Sleet grants motion to transfer to Eastern District of Michigan

In Cruise Control Technologies LLC v. Chrysler Group LLC, et al., 12-1755-GMS (D. Del. Mar. 31, 2014), Chief Judge Gregory M. Sleet granted defendants’ motion to transfer venue to the Eastern District of Michigan in this multi-defendant litigation. Id. at 3-4. Of the thirteen defendant car companies in the instant litigation, all but one filed motions to transfer or statements consenting to such transfer. Id. at 1-2. As Judge Sleet explained, defendants contend that venue is proper in the Eastern District of Michigan because each defendant has its "headquarters and/or research and development facilities . . . located there.” Id. at 6. Plaintiff did not contest this point, and Judge Sleet therefore turned to the Jumara private interest factors. Id.

First, Judge Sleet considered the parties’ choice of forum and found this factor to weigh against transfer. Id. at 6-7. Specifically, Judge Sleet explained that “the court declines to strip the plaintiff’s forum choice of the deference due merely because the plaintiff may have been formed primarily to enforce patent rights.” Id. at 7. Judge Sleet therefore found that “although the Defendants’ choice of the Eastern District appears to be a legitimate venue, [plaintiff’s] forum choice controls.” Id. at 7. Next, Judge Sleet addressed “where the claims arose,” and noted that “the crucial inquiry in determining the deeper roots of infringement claims is where the design and development of the accused products occurred.” Id. at 8-9. Judge Sleet explained that all defendants “are either headquartered in the Eastern District of Michigan and/or operate their research and development facilities there.” Id. at 8. Further, defendants’ “accused products and services were designed and developed in the Eastern District of Michigan” and “no design or development related to the accused products occurred in Delaware.” Id. at 8. Judge Sleet therefore found this factor to weigh strongly in favor transfer. Id. at 9.

Addressing the “convenience of the parties,” Judge Sleet noted “[t]he fact that the Defendants possess vast resources . . . does not mean that the court should follow an approach that would unnecessarily waste these resources.” Id. at 10. Judge Sleet further explained that “while the court does not seek to give short shrift to the inconvenience to [plaintiff] of being compelled to litigate outside the forum it has chosen, the court must ‘account for the absolute costs likely to flow from its transfer decision.’” Id. at 10. Judge Sleet thus found this factor to weigh in favor of transfer, given that all of defendants’ “employees involved in the research and design of the accused products or who otherwise possess knowledge relevant to the instant litigation are located in the Eastern District of Michigan.” Id. at 10-11. Judge Sleet similarly found “the witnesses’ convenience” to weigh in favor of transfer, noting that “unavailability of witnesses in this jurisdiction combined with inconvenience to third party witnesses is sufficient to establish that the witnesses' convenience favors transfer.” Id. at 11.

After noting that the location of books and records was neutral in the Court’s analysis, Judge Sleet considered the Jumara public interest factors. Addressing practical considerations, Judge Sleet explained that “this action has significant connections to” the Eastern District of Michigan. Id. at 12. Further, as Judge Sleet pointed out, “even regarding those Defendants who are incorporated in Delaware, the Eastern District of Michigan still has a stronger interest to this litigation because it is where the claims arose and where the employees and known material witnesses are located.” Id. Judge Sleet additionally noted the fact that “all, except one, of the other Defendants are seeking transfer also weighs in favor of transferring the instant actions to the Eastern District of Michigan.” Id. at 13. Judge Sleet also found the administrative difficulty of the two fora to favor transfer, noting that “Delaware courts’ dockets are far more congested on average than those of courts in the Eastern District of Michigan,” and that “Delaware is one of the busiest patent jurisdictions in the nation.” Id. at 13-14.

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April 7, 2014

Chief Judge Sleet denies motions to transfer to the District of Massachusetts

Chief Judge Gregory M. Sleet has denied motions to transfer to the District of Massachussetts in a number of related patent infringement actions. Videoshare, LLC v. Google Inc, et al., C.A. No. 13-990-GMS; Videoshare, LLC v. Viddler, Inc., C.A. No. 13-991-GMS; Videoshare, LLC v. Vimeo, LLC, C.A. No. 13-992-GMS (D. Del. Apr. 1, 2014).

Plaintiff was a Delaware company with its principal place of business in Massachusetts. Each defendant was also a Delaware company with principal places of business in California, Pennsylvania, and New York. Id. at 2.

Applying the Jumara factors, the Court concluded that “only the defendants’ forum preference counseled transfer, and that factor is eclipsed by [plaintiff’s] forum choice, which was afforded a degree of heightened deference.” Id. at 13. The remaining factors either weighed in favor of transfer or were neutral. Of particular interest in the Jumara analysis was the “unusual scenario” presented as to the convenience of the parties: “the parties' respective headquarters are physically located further from their preferred forum than the opposed forum. As such, the court does not need to deeply analyze the associated logistical and operational costs, or the parties’ ability to bear those costs, because the parties are willing to travel a further distance to litigate in their preferred forum. Stated differently, none of the parties can make a colorable argument that it would be ‘inconvenient’ to litigate closer to home.” Id. at 9. The location of the parties’ books and records was also neutral because the “bulk of relevant evidence was not located in either forum.” Id. at 10. Additionally, while the plaintiff had previously sued one of the defendants in Massachusetts regarding the same claimed technology, that case had been dismissed on procedural grounds. Id. at 6. The Court therefore concluded that the potential efficiency of transferring these cases was only marginal as the Massachusetts court did not gain familiarity with the merits of the underlying patented technology. Id. at 6-7, 11.

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April 7, 2014

Magistrate Judge Joel Schneider denies defendant's request to disqualify plaintiff's expert for previously working with defense counsel

Magistrate Judge Joel Schneider, sitting by designation, recently denied defendant Materia, Inc.'s motion to disqualify plaintiff Evonik Degussa DmbH's expert on inequitable conduct issues. Evonik Degussa DmbH v. Materia, Inc., et al., C.A. No. 09-636-NLH-JS (D. Del. Apr. 2, 2014). Materia argued that disqualification was proper because its co-defense counsel, Nixon Peabody, retained the expert in the past "regarding an 'ethics matter.'" Id. at 1. Materia argued that it would be substantially prejudiced because the past engagement would "stymie its effective cross-examination," and that "fundamental fairness" warranted disqualification. Id. at 1-2. Magistrate Judge Schneider disagreed. "[D]isqualification is a drastic measure which should not be imposed except where absolutely necessary." Id. at 2. Disqualification was inappropriate because Materia did not show that it was "objectively reasonable" for it to conclude that it had a confidential relationship with the expert and there was no evidence that any relevant confidential information was relayed to the expert. Id. at 2-3. Further, "policy and fairness" did not warrant disqualification because "[t]here is nothing unfair if Nixon Peabody is requried to cross-examine an expert it previously retained in an entirely unrelated matter." Id. at 4. Evonik, on the other hand, would be prejudiced if its expert is disqualified because Evonik has the "right to qualified experts of its choice." Id.

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