July 3, 2013

Judge Andrews denies motion to redact portions of oral argument transcript

Judge Richard G. Andrews recently rejected a defendant’s motion to redact certain portions of an oral argument transcript relating to alleged inequitable conduct. St. Jude Medical Cardiology Division Inc., et al. v. Volcano Corp., C.A. No. 12-441-RGA (D. Del. June 17, 2013). Judge Andrews noted that the defendant had not provided any argument as to why the information should be redacted, other than a bare claim that it was highly confidential, and in denying the motion explained: “[n]o harm is alleged, and, indeed, it is apparent to me that there could not be any harm from the disclosure of specific allegations of inequitable conduct years and years ago that would justify sealing the transcript.”

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July 3, 2013

Judge Robinson rules on summary judgment motions

In a recent memorandum opinion, Judge Sue L. Robinson considered plaintiffs’ motion for partial summary judgment on infringement and defendants’ cross-motion for non-infringement, in addition to defendants’ motion for summary judgment of invaldity and plaintiffs’ cross-motion for partial summary judgment of validity. INVISTA North America S.a.r.l. et al. v. M&G USA Corporation, et al., C.A. No. 11-1007-SLR-CJB (D. Del. June 25, 2013). Plaintiffs are asserting three patents—U.S. Patent Nos. 7,919,159 (“the ’159 patent”); 7,943,216 (“the ’216 patent”); and 7,879,930 (“the ’930 patent”)—each related to “plastic materials with applications in packaging for oxygen-sensitive foods.” Id. at 1. The ’216 and ’159 patents share a common specification and relate specifically to compositions (and containers and articles derived therefrom), which are alleged to possess strong gas barrier properties while yielding comparatively small amounts of yellowness and haze that traditionally accompanied compositions with similar properties. See id. at 2-4. The ’930 patent relates to “the use of certain colorants that do not completely deactivate” the transition metal catalyst in compositions such as those claimed in the ’216 and ’159 patents. See id. at 5.

With respect to the ’216 and ’159 patents, Judge Robinson granted summary judgment of no direct infringement. Id. at 19. The Court had construed the term “composition” as used in those patents to mean “a blend that contains the specified ingredients at any time from the moment the ingredients are mixed together.” Id. at 17. It was undisputed that defendants’ accused products—the PoliProtect products (“PoliProtect”)—are “manufactured as pellets” and have components that are separated into different layers. Id. at 17. Because the components were not “mixed together in a blend,” Judge Robinson found that PoliProtect did not practice the “composition” limitation. Id. at 18-19.

However, turning to indirect infringement of the ’216 patent, Judge Robinson found that the “only reasonable inference from the evidence of record is that [defendants’] customers mix the components of the pellets into blends to make their desired articles,” and “thereby necessarily practice the ‘composition’ limitation.” Id. at 20-21. Judge Robinson also found that, with the exception of one claim, PoliProtect practiced the remaining limitations of the seven asserted claims from the ’216 patent. See id. at 21-26. Further, as Judge Robinson noted, defendants “had knowledge of the ’216 patent at least from the filing of [the] lawsuit.” Id. at 26. Addressing contributory infringement, Judge Robinson found that defendants offered “no evidence to rebut [plaintiffs’] arguments that the PoliProtect products are not a staple of commerce that are suitable for noninfringing uses.” Id. at 27. With respect to induced infringement, Judge Robinson first noted that plaintiffs “established on the summary judgment record that the PoliProtect products have no substantial noninfringing uses.” Id. at 28. Moreover, Judge Robinson explained that “it is entirely appropriate to presume that one who sells a product containing a component that has no substantial noninfringing use in that product does so with intent that the component will be used to infringe.” Id. at 29 (quoting Ricoh Co. v. Quanta Computer Inc., 550 F.3d 1325, 1340, 1338 (Fed. Cir. 2008)). Judge Robinson therefore granted summary judgment of contributory and induced infringement for six of the seven asserted claims of the ’216 patent.

Judge Robinson, however, denied plaintiffs’ motion for summary judgment with respect to indirect infringement of the ’159 patent. Id. at 31. Plaintiffs argued PoliProtect literally infringed the ’159 patent because PoliProtect’s LiSIPA-containing copolyester meets both the “polyester” and “ionic compatibilizer” limitations. Id. at 29. Judge Robinson did note that “the doctrine of equivalents may be applicable even when its application would vitiate the requirement that two components be separate elements.” Id. at 30. Judge Robinson concluded, however, that defendants raised genuine issues of material fact regarding the “polyester” limitation under the doctrine of equivalents, precluding the entry of summary judgment. Id. at 30-31.

With respect to the ’930 patent, the parties summary judgment motions addressed only indirect infringement. See id. at 31. Judge Robinson found that plaintiffs offered evidence of infringement of the limitations at issue and thus created genuine issues of material fact, precluding the entry of summary judgment of no indirect infringement. See id. at 31-35.

Turning to the validity motions, Judge Robinson noted that defendants argued that the asserted claims of the ’159 and ’216 patents are invalid as obvious and for failure to comply with 35 U.S.C. § 112’s written description and enablement requirements. Id. at 34. With respect to obviousness, defendants asserted that the ’159 and ’216 patents are obvious in light of two prior art references. Id. at 35. As Judge Robinson explained, however, defendants’ expert “never addressed the combination of the . . . references in his expert reports,” and the argument was made for the first time in defendants’ reply summary judgment brief for invalidity. Id. at 35-36. Although defendants attempted to support the new theory with an expert declaration attached to the reply brief, the new opinions in the declaration were struck in a separate order as untimely and prejudicial. Id. at 36. Without expert testimony addressing the combination of the two references, Judge Robinson granted plaintiffs’ motion for partial summary judgment of validity on this ground. Id. at 36.

With respect to a lack of enablement, defendants first argued that the ’159 and ’216 patents recite a “metal sulfonate salt,” but did not provide any “meaningful disclosures, teachings, or supportive data” related to those salts, with the exceptions of sodium and zinc. Id. at 37. Judge Robinson found, however, that plaintiffs’ expert presented evidence that the patent specification “enables one of ordinary skill in the art to make and use the claimed invention.” Id. at 39. Thus, there remained an issue of material fact, and Judge Robinson denied entering summary judgment of lack of enablement on this ground. Id. at 39. Defendants had also set forth several other similar invalidity arguments under § 112 related to the ’159 and ’216 patents, which were all premised on a similar theory that the scope of the asserted claims were “substantially broader than the small number of examples provided.” Id. at 42-43. Once again, Judge Robinson found that entry of summary judgment for invaldity on these grounds was precluded “[i]n light of the conflicting expert testimony” regarding whether the examples provided in the specification enable a person of ordinary skill in the art to make the claimed invention. Id. at 43.

Defendant also argued that plaintiffs’ specification failed to disclose the “importance of sodium acetate . . . in controlling yellowness in the compositions of the ’159 and ’216 patents,” and that the patents were therefore nonenabling and lacked a sufficient written description. Id. at 39. Judge Robinson explained, however, that “[t]he enablement and written description requirements are both based on the invention as claimed,” and “sodium acetate is not a limitation in any of the asserted claims and is not mentioned in the specification.” Id. at 40-41. Judge Robinson therefore granted plaintiffs’ partial motion for summary judgment of validity on this ground. Id. at 42.

With respect to the ’930 patent, defendants moved for summary judgment of invalidity based on an insufficient written description, non-enablement, and indefiniteness. Id. at 43. Judge Robinson denied the parties’ motions for summary judgment on these issues in light of conflicting expert testimony. See id. at 43-45.

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July 1, 2013

Judge Robinson denies motion to dismiss for lack of personal jurisidiction, without prejudice to renew following jurisdictional discovery

Judge Robinson recently considered defendant Daxtra Technologies Limited's ("Daxtra UK")' motion to dismiss plaintiff's complaint for lack of personal jurisdiction. Kenexa Brassring, Inc. v. Akken, Inc., et al., C.A. No. 12-660-SLR (D. Del. June 25, 2013). Daxtra UK is a Scottish company with places of business in the United Kingdom. Id. at 2. Defendant Daxtra Technologies Inc. ("Daxtra US") is a Delaware corporation and a subsidiary of Daxtra UK formed "for the purpose of marketing and selling software and providing support in the United States." Id.

To establish personal jurisdiction, the Court must determine whether there exists a basis for jurisdiction under Delaware's long arm statute, 10 Del C. sec. 3104(c)(1)-(4), and if so, whether the the defendant "purposefully availed" itself of the forum state such that it should reasonably anticipate being sued there. Id. at 4.

First, Kenexa argued that personal jurisdiction was appropriate "through direct contacts between Daxtra UK and the United States, including Delaware. Id. at 5. Kenexa pointed to the sale of a potentially infringing product in the United States that had been licensed to a U.S. company. Id. Judge Robinson found that this ground was not sufficient because it was unclear whether Kenexa would accuse that product of infringing the patents-in-suit. Id. Next, Kenexa asserted that personal jurisdiction was appropriate because Daxtra UK used its website to solicit job applicants in the U.S. Id. at 5-6. Judge Robinson rejected this ground because "Kenexa ha[d] not indicated any particular instance in which a U.S. applicant interacted with the website[.] Id. at 6.

Second, Kenexa argued that personal jurisdiction existed over Daxtra UK through contacts of its subsidiary, Daxtra US, pursuant to agency theory. Id. "Under agency theory, the court may attribute the actions of a subsidiary company to its parent where the subsidiary acts on the parent's behalf or at the parent's direction." Id. at 6-7 (quotations omitted). Four factors are relevant to the court's determination:

(1) the extent of overlap of officers and directors; (2) methods of financing; (3) the division of responsibility for day-to-day management; and (4) the process by which each corporation obtains its business.

Id. at 7 (quotations omitted).

Daxtra UK conceded that the officers and directors of Daxtra UK and Daxtra US overlapped completely. Id. Daxtra UK argued, however, that there was no overlap regarding the financing of the entities, and Judge Robinson found that Kenexa had not alleged otherwise, with reasonable particularity. Id. at 7-8. Regarding the third factor, Kenexa argued that Daxtra UK's CTO was assigned to Daxtra US, which was "indicative of his playing a larger role in the day-to-day management" of Daxtra US. Id. at 8. Daxtra UK responded that the CTO's re-assignment was temporary so that he could help "make sales calls and grow the business in the United States[.]" Id. Regarding the last factor, the court found that at least some of Daxtra US's business was obtained from Daxtra UK. Id. at 8-9.

In light of the foregoing, Judge Robinson concluded that "plaintiff ha[d] presented factual allegations that suggeste[d] with reasonable particularity the possible existence of the requisite contacts between Daxtra UK and Delaware." Id. at 9. Therefore, the Court permitted Kenexa to take jurisdictional discovery and denied Daxtra UK's motion, without prejudice to renew one month after the close of such discovery. Id. at 9-10.

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July 1, 2013

Judge Andrews claim construction opinion

Judge Andrews recently construed the following claim terms of U.S. Patent No. 7,155,451 related to "methods of automating the presentation of computer content," which is asserted against Microsoft Corp. and Apple Inc. in two civil actions. Robocast v. Microsoft, et al., C.A. No. 10-1055-RGA, 11-235-RGA (D. Del. June 28, 2013):

"show structure of nodes"
"multidimensional show structure of nodes"
"nodes"
"plurality of accessible resources"
"content"
"on-line search"
"interactively variable duration information"
"at least two of said nodes are spanned concurrently"
"persistent content window"
"without requiring user input"
"in accordance with said show structure"
"providing"
"search results"
"wherein said show structure is created in response to said search results received in
response to said on-line search"
"Related to said selected category"

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June 28, 2013

Judge Andrews denies motion to stay litigation

In a recent order, Judge Richard G. Andrews denied defendant’s motion to stay the litigation for “at least six months.” Microsoft Corporation v. Robocast Inc., C.A. No. 13-313-RGA (D. Del. Jun. 18, 2013). The instant action is related to another action—C.A. No. 10-1055 (the “main case”)—in which defendant is alleging patent infringement. As Judge Andrews explained, the main case is “likely to be tried in or near March 2014,” whereas the instant action is not likely to be scheduled for trial “any earlier than 2015.” Id. at 1. Defendant’s main argument in support of its motion for stay was that the instant action would “in all likelihood be resolved by the resolution of the main case.” Defendant further asserted that “it will take six months to see if the alleged infringing activity has any potential to make money.” Id.

Judge Andrews first noted that “both parties’ actions in this case seem to be motivated mostly by their perceived impact on the main case,” as the “[t]he potential economic consequences of this case are dwarfed by those of the main case.” Id. On the one hand, as Judge Andrews explained, he “would not normally stay [claims] of the nature presented by this case, as their interrelationship with the claims of the main case means that they all ought to go forward together.” Id. On the other hand, Judge Andrews acknowledged that defendant did not delay in making its request, the “stay would likely result in simplification of the issues,” and the stay would not “in actuality prejudice [plaintiff].” Id. at 1-2. Ultimately, Judge Andrews concluded that “the allegation of this case is the defendant is infringing [plaintiff’s] patent, and, while the economic consequences may be miniscule, I think on balance that this case too should proceed ahead.” Id. at 2.

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June 27, 2013

Judge Robinson issues claim construction opinion for patents involving plastic polymers and strikes expert testimony submitted in support of claim constructions

Judge Robinson recently construed the terms of patents-in-suit -- U.S. Patent Nos. 7,919,159; 7,943,216, and 7,879,930 -- related to "plastic materials with applications in packaging for oxygen-sensitive foods and beverages." INVISTA North America S.a.r.l. et al. v. M&G USA Corporation, et al., C.A. No. 11-1007-SLR-CJB (D. Del. June 25, 2013).

Judge Robinson construed the following terms:

"composition"
"ionic compatibilizer"
"copolyester containing a metal sulfonate salt"
"copolyester comprising a metal sulfonate salt"
"polyester"
"attached"
"metal sulfonate salt"
"cobalt salt"
"is present"
"melt blended resin" and "melt blend"
"a base polymer"
"transition metal catalyst"
"colorant"
"copolyester of polyethylene terephthalate"
"compatibilizer"

Judge Robinson also considered M&G's motion to strike INVISTA's expert testimony submitted in support of its opening claim construction brief, and "hours before the close of expert discovery." Id. at 7 n.7. INVISTA argued that its expert's testimony did not violate the scheduling order's provisions on disclosure of expert testimony because the submission merely provided "a background tutorial for purposes of claim construction." Id. Judge Robinson disagreed.

Claim construction is an issue highly relevant to infringement in this case. Even if lnvista's filing of new expert testimony at the close of expert discovery and without prior notice to M&G did not technically violate the scheduling order, it was inconsistent with the intent of the scheduling order.

Id. at 8

Judge Robinson agreed that "expert testimony can aid the court in claim construction," but struck INVISTA's expert testimony in this case, becuase "allowing new expert testimoony that ha[d] not been vetted through discovery would unduly prejudice M&G." Id.

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June 24, 2013

Judge Robinson Grants Motions to Dismiss for Lack of Standing Based on Lack of Ownership of Patents-in-Suit

Judge Robinson recently granted motions to dismiss for lack of standing filed by Amazon, Zappos, and Expedia in a patent infringement case brought by Walker Digital. See Walker Digital, LLC v. Expedia, Inc., et al., C.A. No. 11-313-SLR, Memorandum Op. at 1 (D. Del. June 19, 2013). The standing dispute stemmed from a settlement agreement between Walker Digital and eBay, which the defendants alleged transferred all rights to the patents-in-suit to eBay and terminated Walker Digital’s constitutional standing to pursue the litigation. Using standard principles of contract interpretation, Judge Robinson found that the settlement agreement at issue “ostensibly includes two separate conveyances of rights from plaintiff to eBay” but that both grants of patent rights included the patents-in-suit. Id. at 9. Furthermore, “[g]iven the complexity of plaintiff’s patent portfolio and the sophistication of the parties to the Settlement Agreement, the court relie[d] on the unambiguous granting language rather than the equivocal parol evidence [and an inconsistent warranty provision of the agreement] to divine what the parties meant to accomplish through the Settlement Agreement.” Id. at 11-13.

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June 24, 2013

Delaware IP Law Bloggers Comment on Supreme Court's Myriad Decision

Delaware IP Law Blog Author, Greg Brodzik, and Contributor, Jim Lennon, were invited by IPWatchdog.com to comment on the Supreme Court's recent decision in Association for Molecular Pathology, et al. v. Myriad Genetics, Inc., et al., 569 U.S. ___, on the scope of patent eligibility in the context of DNA discoveries. Follow this link to their post on IPWatchdog.com: Myriad: Positive Implications for Genetic Research, but Some Questions Remain Unanswered

June 21, 2013

Magistrate Judge Thynge recommends grant of defendants’ motion for summary judgment on willful infringement, denial of motion for summary judgment on lost profits damages

In Masimo Corporation v. Philips Electronics North America Corporation, et al., Magistrate Judge Mary Pat Thynge recently recommended the grant of defendants’ motion for summary judgment as to no willful infringement and the denial of their motion for summary judgment on lost profits damages. C.A. No. 09-80-LPS-MPT (D. Del. June 14, 2013).

The Court recommended the grant of defendants’ motion as to willful infringement with regard to four patents-in-suit. The Court concluded that defendants’ actions had been objectively reasonable because they had “presented legitimate and credible defenses to the infringement claims, as well as presented credible invalidity arguments. As such, [defendants have] ‘demonstrate[d] the lack of an objectively high likelihood that [defendants] took actions constituting infringement of a valid patent.’” Id. at 16 (quoting Black & Decker, Inc. v. Robert Bosch Tool Corp., 260 F. App’x 284, 291 (Fed. Cir. 2008)). For example, with regard to U.S. Patent No. 6,263,222, Judge Thynge had previously recommended adoption of defendants’ claim construction of a key term, and although Judge Stark “ultimately disagreed with the construction,” id., it was clear from these facts that defendants’ reliance on their construction to show noninfringement was reasonable. See id. at 5-6. Additionally, as discussed here, Judge Thynge had previously recommended a partial grant of summary judgment on invalidity as to the same patent. “The partial success of its invalidity defenses lend credibility to the reasonableness of [defendants’] actions which defeats the objective prong of [the Federal Circuit’s test for willful infringement from In re Seagate Tech., LLC, 497 F.2d 1360 (Fed. Cir. 2007)].” Id. at 6-7. With regard to a different patent, the Court concluded that defendants’ invalidity arguments were also reasonable and thus precluded a finding of willful infringement. Id. at 8. Furthermore, the Court had also recently granted summary judgment to defendants on the basis of non-infringement as to this patent. Id. The Court also ruled that summary judgment on willfulness was appropriate, as “this court and the Federal Circuit have held the state of mind of the accused infringer is not relevant” to the objective prong of Seagate. Id. at 12 (internal citations and quotation marks omitted).

The Court recommended denial of defendants’ motion for summary judgment as to lost profits damages, relying on its prior rulings on expert testimony, discussed here. “Having ruled [in that opinion] on all of the challenges to expert testimony, the court has essentially already decided the outcome of the motion for summary judgment on damages. Since the court will allow experts to testify to divisive positions on the [acceptability of a potential non-infringing alternative], as well as permit [plaintiff’s damages expert to present lost profits analysis] at trial," issues of material fact remained and defendants' motion should be denied. Id. at 16.

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June 21, 2013

Chief Judge Sleet Finds Personal Jurisdiction Over Declaratory Judgment Defendant Lacking, Grants Motion to Dismiss

Chief Judge Sleet recently granted a patent infringement defendant’s motion to dismiss for lack of personal jurisdiction given the defendant’s lack of sufficient contacts with Delaware. See Liqui-Box Corp. v. Scholle Corp., C.A. No. 12-464-GMS, Memorandum Op. at 1 (D. Del. June 17, 2013). The declaratory judgment defendant, Scholle, is a Nevada corporation with headquarters in California. One of the operating subsidiaries of Scholle, Scholle Packaging, is a Nevada corporation with primary operations in Illinois and headquarters in California. Of the two declaratory judgment plaintiffs, Liqui-Box Corp. and Liqui-Box Inc., one is an Ohio incorporated and based corporation and the other is a Delaware corporation with operations primarily in Texas. After Scholle sent a letter to Liqui-Box in Ohio alleging infringement of its patents, Liqui-Box filed a declaratory judgment action in the District of Delaware. The same day, Scholle filed an infringement action against Liqui-Box in the Northern District of Illinois. Id. 2.

Judge Sleet first found that the exercise of jurisdiction under Delaware’s long-arm statute was inappropriate, rejecting arguments that Scholle had sufficient direct contacts with Delaware and that the actions of Scholle’s subsidiary should be attributed to Scholle under an alter ego theory or an agency theory. Id. at 5-11. As part of this analysis, Judge Sleet emphasized that “the relevant inquiry for specific personal jurisdiction purposes is ‘to what extent . . . the defendant patentee purposefully directed such enforcement activities at residents of the forum, and the extent to which the declaratory judgment claim arises out of or relates to those activities.’” Because sales in Delaware were not “‘enforcement activities’ that might allow for specific jurisdiction in the declaratory judgment context,” found that the case did not fall under the specific jurisdiction or general jurisdiction provisions of the long-arm statute. Id.

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