April 16, 2013

Magistrate Judge Thynge recommends denial of motion to dismiss complaint relating to cloud-based gaming applications.

Magistrate Judge Mary Pat Thynge recently issued a report recommending that a motion to dismiss allegations of direct, induced, and contributory infringement relating to cloud-based gaming applications be denied. T5 Labs (Delaware) LLC v. Gaikai, Inc., C.A. No. 12-1281 (SLR) (MPT) (D. Del. Apr. 5, 2012). The defendant argued that the complaint failed to provide meaningful notice of which products or services were accused, but Judge Thynge disagreed, explaining that the plaintiff adequately identified the defendant's "‘cloud’-based gaming applications and service’ or GPU cloud as the infringing method or product.” Id. at 9. This, together with sufficient allegations of jurisdiction, ownership, notice, and a demand for relief, was sufficient to provide the defendant with meaningful notice of the allegations against it, and met the requirements of Form 18 for alleging direct infringement. Id. at 10. Judge Thynge also found that the plaintiff adequately pled induced and contributory infringement under Twombly and Iqbal with respect to post-Complaint conduct. Id. at 11-13.

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April 16, 2013

Judge Robinson Denies Motion to Amend Complaint and Motion to Stay Case

Judge Sue Robinson recently denied a patent infringement plaintiff’s motion for leave to file an amended complaint adding claims of induced infringement. See Walker Digital, LLC v. Google, Inc., C.A. No. 11-309-SLR, Memorandum Order at 1 (D. Del. Apr. 11, 2013). Although the plaintiff had included allegations of induced infringement in preliminary infringement contentions, it did not formally move to amend pleadings until significantly later, approximately nine months after the deadline for filing amended pleadings and a month before the close of fact discovery. The plaintiff asserted good cause for its amendment based on (1) the Federal Circuit’s decision in Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012), (2) defendants’ claim constructions raising the potential need to rely on inducement, and (3) the lack of undue prejudice. Id. at 2. Judge Robinson found that (1) Akamai was inapplicable because the plaintiff did not allege that only some steps were performed by third parties, (2) the defendants’ representations that they did not intend to assert a non-infringement argument based on claim constructions were acceptable and binding, and (3) there was no good cause for plaintiff to amend regardless of whether or not such an amendment would prejudice defendants. Accordingly, she denied the motion to amend. Id. at 2-4.

Judge Robinson also denied the defendants’ request to stay the case pending reexamination. Id. at 4. Between the filing of the motion to stay and Judge Robinson’s decision, the PTO issued an “Action Closing Prosecution” in an inter partes reexamination initiated by defendants, which rejected every claim of the patent-in-suit. Although “there [was] no dispute that a final resolution of the administrative process would simplify the judicial process, and that . . . the administrative process is less expensive than the judicial process,” Judge Robinson found that “the judicial process had proceeded far enough (and the administrative process has not) that a stay would unduly prejudice [the plaintiff.]” Id. at 4-6. The prejudice to plaintiff was not diminished by the fact that “is a non-practicing entity,” because “it is a research-oriented business that will be prejudiced if its rights under the [patent-in-suit] are not adjudicated timely” and there is “no reliable time table to conclusion” of the administrative process. Id. at 5.

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April 15, 2013

Judge Andrews adopts Magistrate Judge Burke's claim constructions in their entirety

Judge Andrews recently issued a decision after plaintiff filed objections to Magistrate Judge Burke's Report and Recommendation construing the claims of U.S. Patent No. 6,973,229. Lamda Optical Solutions, LLC v. Alcatel-Lucent USA Inc., C.A. No. RGA-CJB (D. Del. Apr. 11, 2013). Upon de novo review of Magistrate Judge Burke's constructions, Judge Andrews overruled plaintiff's objections and adopted the Report and Recommendation in its entirety.

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April 12, 2013

Judge Robinson issues decisions in Golden Bridge Technology Inc. v. Apple

Golden Bridge Technology (“GBT”) sued Apple and other defendants (the “Apple action”), and Amazon.com, Inc. and other defendants in two separate actions alleging infringement of U.S. Patent No. 6,574,267 C1 and 7,359,427. The patents-in-suit “relate generally to wireless cellular networks and teach a method for establishing a communication link between a mobile station, such as a cellular telephone, and a base station.” Golden Bridge Technology Inc. v. Apple Inc., et al., C.A. Nos. 10-428-SLR, 11-165-SLR (D. Del. Apr. 9, 2013) (Claim Construction Memorandum Opinion). The cases were consolidated for claim construction but claims other than those against Apple were stayed.

Judge Robinson held oral argument on claim construction on March 19, 2013 and recently issued her claim construction Opinion, construing the following terms of the patents-in-suit:

“Access Preamble”/“Preamble”
“Discrete Power Level”

In construing “Access Preamble”/“Preamble,” the Court considered the estoppel effect of the construction of claims of the ‘267 patent in a prior suit filed by GBT in Texas against other defendants. The Court held that collateral estoppel was not applicable because the issues decided by the Texas Court were not identical to this case. Specifically, the ‘427 patent, although a related patent, was not issued until after the conclusion of the Texas case, and the ‘267 patent was reexamined after the Texas case concluded, resulting in different claims and additional prosecution history. Id. at 9.

Following the Court’s claim construction Opinion, Judge Robinson issued the Court’s Memorandum Opinion on Summary Judgment in the Apple Action. Golden Bridge Technology Inc. v. Apple Inc., et al., C.A. No. 10-428-SLR (D. Del. Apr. 9, 2013) (Summary Judgment Memorandum Opinion). Judge Robinson considered GBT’s motion for partial summary judgment of infringement and Apple’s motions for summary judgment of non-infringement and invalidity. Judge Robinson denied GBT’s motion and granted Apple’s motion as to non-infringement. Although Judge Robinson found that Apple’s accused products and related processes practiced “the ‘discrete power level’ limitation” of the asserted claims, GBT did not identify “a genuine issue of material fact regarding the limitation of ‘spreading the access preamble” or of a “spread across preamble.” Id. at 14-15. Therefore, summary judgment of non-infringement was appropriate.

In the Apple action, Judge Robinson also considered various motions to exclude and strike expert testimony. Golden Bridge Technology Inc. v. Apple Inc., et al., C.A. No. 10-428-SLR (D. Del. Apr. 9, 2013) (Memorandum Order). Apple moved to strike GBT’s untimely expert opinions and moved to exclude certain other expert opinions. Id. at 2. GBT also filed two Daubert motions. Id. The Court granted-in-part GBT’s Daubert motion that sought to exclude opinions on the inventors’ lack of diligence in preparing and filing the patent application, and failure to meet the written description requirements of 35 U.S.C. § 112. Judge Robinson excluded the expert’s opinions on diligence because the expert was not a patent attorney or an expert in patent law. Id. at 3. Judge Robinson denied Apple’s Daubert motion that sought to exclude an expert’s rebuttal opinion on validity, a rebuttal opinion on attorney diligence, and two experts’ opinions and untimely supplements regarding infringement. Id. at 4. The court granted Apple’s motion as to attorney diligence, finding it would not be helpful to the jury, because it was “based not on records but on speculation[.]” Id. Judge Robinson denied Apple’s motion in all other respects. Even though GBT’s experts’ infringement opinions were offered before the court issued its claim construction, the Court found that any disagreement between the opinions and the Court’s construction “is more properly reserved for cross-examination[.]” Id. at 5.

Finally the Court denied both GBT and Apple’s motions to exclude or strike testimony “regarding the definition of ‘bandwith.’” Id. at 6. The Court found the opinions admissible under Daubert, and any issues with the testimony could be dealt with on cross examination. Id. Furthermore, GBT’s “untimely” expert opinion was admissible because it was “necessary to respond to criticisms lodged by Apple’s expert . . . in his rebuttal report.” Id.

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April 11, 2013

Judge Robinson grants motion to dismiss for lack of personal jurisdiction over Japanese corporation and dismisses joint infringement claims against other defendants

In Intellectual Ventures I LLC, et al. v. Nikon Corporation, et al., C.A. No. 11-1025-SLR (D. Del. Apr. 1, 2013), Judge Sue L. Robinson granted one defendant’s motion to dismiss for lack of personal jurisdiction and granted-in-part the remaining defendants’ motion to dismiss plaintiffs’ indirect infringement claims.

Plaintiffs had sued four entities, all of which “are ‘Nikon Group Companies’ within . . . [defendant] Nikon Corporation.” Id. at 7. One of the defendants, Sendai, was a Japanese corporation that “manufacturers DSLR cameras and sells them to” Nikon Corporation, its parent that is also a Japanese corporation. Id. While the cameras were then sold in the United States, and Nikon Corporation and another co-defendant “maintain websites in English targeting the United States” and Delaware, Sendai itself conducted no business in the United States. Id. at 6, 7.

Plaintiffs argued that the Court had personal jurisdiction over Sendai based on “several theories,” all of which the Court rejected. Id. at 6. First, because Sendai was not a principal in an agency relationship with any co-defendants, but instead its “conduct [was] directed by its parent,” and because its conduct was “limited to activities in Japan,” plaintiffs had “not asserted sufficient contacts to establish personal jurisdiction” under an agency theory. Id. at 8-9. Second, plaintiffs could not assert jurisdiction “under a dual jurisdiction theory for stream-of-commerce activities in which subsection (1) and (4) of Delaware’s long-arm statute are partially satisfied,” which required a showing of “an intent to serve the Delaware market” and “that this intent results in the introduction of the product into the market.” Id. at 9 (internal citations and quotation marks omitted). There was no indication that “Sendai ha[d] the requisite intent” to sell the cameras in Delaware because its manufacturing and sales were directed to its parent in Japan, its website was in Japanese, and “the cameras themselves offer menus in 20 languages and world time zones.” Id. at 10. “The court has not heretofore exerted dual jurisdiction over a foreign subsidiary based on such attenuated facts, and declines to do so in this case.” Id.

As to indirect infringement, the Court found that, “[c]onsistent with the court’s analysis" in Walker Digital LLC v. Facebook, Inc., 852 F. Supp. 2d 559, 565-66 (D. Del. 2012), plaintiffs’ induced infringement claims were facially plausible and provided defendants with adequate notice. Id. at 11. However it dismissed plaintiffs’ joint infringement claims. Plaintiffs alleged that the defendants “act[ed] alone and together to infringe,” with Nikon Corporation acting “as a mastermind over the other defendants and/or its customers.” Id. at 12. But as claims against Sendai had been dismissed, plaintiffs could not support joint infringement by alleging “Nikon Corporation, as a parent company, controls the distribution of the accused products manufactured by Sendai.” Id. Additionally, “[p]laintiffs [had] not alleged any relationship between the remaining defendants that could plausibly lead to a showing that Nikon Corporation exercises control or direction over its co-defendants.” Id.

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April 11, 2013

Chief Judge Sleet finds asserted claims not invalid as anticipated or as obvious, awards injunctive relief to plaintiff

In a recent post-trial opinion, Chief Judge Gregory M. Sleet found that defendants had not met their burden of proof in showing that the asserted claims of the patent-in-suit were invalid, either as anticipated or obvious. In re Armodafinil Patent Litigation Inc. (‘722 Patent Litigation), MDL No. 10-md-2200-GMS (D. Del. Mar. 30, 2013). Because the defendants had stipulated that their ANDAs infringed the asserted claims, id. at 9, the Court’s ruling on invalidity also led it to award injunctive relief to plaintiff.

The patent-in-suit was related to plaintiff’s drug that “is indicated to improve wakefulness in patients with excessive sleepiness associated with obstructive sleep apnea, narcolepsy, and shift work sleep disorder.” Id. at 4. Plaintiff originally asserted all claims of this patent, but it had agreed that defendants’ “right to enter the market with respect to the [patent-in-suit] . . . will stand or fall based upon the outcome of this litigation with respect to” two of the claims. Id. at 9. Therefore, the bench trial had been limited to the presentation of evidence related to these claims. Id. The two claims “cover a pharmaceutical composition with an active component consisting essentially of Form I armodafinil.” Id. at 48.

As to anticipation, the Court concluded that the claims were not invalid as inherently anticipated. Defendants argued that a person of ordinary skill in the art “will necessarily and inevitably obtain Form I armodafinil from following the prior art Preparation I process” described in another patent (“the ‘855 Patent”) that “discloses how to synthesize armodafinil.” Id. at 10, 48. Generally, the Court found plaintiff’s experts’ testimony more credible than those of defendants with respect to anticipation issues. See, e.g., id. at 20, 29. Specifically, defendants had not met their burden because (i) “defendants have not demonstrated clearly and convincingly through their experts’ experiments and testing that the performance of Preparation I necessarily and inevitably results in Form I armodafinil, (ii) “defendants have failed to show by clear and convincing evidence that the result of performing Preparation I meets the requirements of the asserted claims of the patent-in-suit,” and (iii) “defendants have not demonstrated clearly and convincingly that their reproductions of the ‘855 Patent’s Preparation I were consistent with how a person of ordinary skill in the art would have performed the Preparation and, therefore, have not proven that their experts’ experiments accurately demonstrate that Form I armodafinil inevitably results from Preparation I.” Id. at 18.

At one point in its discussion, the Court noted that both sides referenced “the ‘court’s construction’” of certain terms in the patent-in-suit that the Court had not construed, but instead whose meaning the parties had agreed on before the Markman hearing. Id. at 24. Noting that “the parties’ arguments—and particularly those of defendants, who repeatedly reference how the court construed [these terms]—[therefore struck] the court as misleading,” the Court accepted plaintiff’s constructions. Id.

"Defendants focused their obviousness arguments on the assertion that” the ‘855 patent, combined with other references, invalidated the asserted claims of the patent-in-suit. Id. at 49. The Court, again accepting plaintiff’s experts’ testimony as more credible, concluded that defendants had not shown obviousness. First, “there was no more than a general motivation to find new crystal forms of armodafinil with nothing directed to the unknown Form I itself.” Id. at 68. Second, “the defendants [had] not produced sufficient evidence to demonstrate that skilled artisans would have had reason to select the route that produced the claimed invention or that the prior art provided indication of which parameters were critical or likely to prove successful amongst the numerous testing conditions and variables available.” Id. at 69. Finally, “the defendants’ contention based on allegedly ‘obvious to try’ experiments . . . [fell] short” because “‘[o]bvious to try’ is not equivalent to obviousness in every case, particularly where, as here, the prior art provided at most general motivation to conduct trial and error experimentation in a decidedly unpredictable field” and defendants’ arguments were “based on an impermissible hindsight analysis.” Id. at 70-71.

In light of these findings, the Court awarded plaintiff’s requested injunctive relief. Id. at 72-73.

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April 10, 2013

Judge Thynge Considers Daubert and Summary Judgment Motions

In Masimo Corporation v. Philips Electronics North American Corporation, et al., C.A. Nos. 09-080-LPS-MPT & 11-742-LPS-MPT (Cons.) (D. Del. Apr. 2, 2013), Magistrate Judge Mary Pat Thynge issued a report and recommendation regarding Daubert and summary judgment motions from both parties. The case involves a number of patents related to “pulse oximetry,” which “allows for non-invasive measurement of the oxygen levels in a medical patient’s hemoglobin.” Id. at 1. At the time of the Court’s opinion, seven patents were at issue from the original action filed, plus two patents from a second action filed by plaintiff; six were plaintiff’s patents, and three were defendants’ for which they had counterclaimed infringement. Id. at 4-5.

The motions for summary judgment for which the Court issued recommendations related to infringement, noninfringement, invalidity, and laches. Id. at 6 & n. 22 (noting that the other motions before the Court would be addressed in another opinion). The Court denied the majority of these motions, finding that genuine issues of material fact remained. See, e.g., id. at 17, 23, 58-60, 75, 77, 85, 87, 115-16, 140, 146-47. As to defendant’s motion for summary judgment based on laches with respect to three patents, defendants alleged that a series of negotiations with third parties and with defendants, and lawsuits with third parties, all relating to plaintiff’s technology, put plaintiff on notice as to potential infringement more than six years preceding the filing of the lawsuit with respect to two out of the three patents. See id. at 178-81. While the Court agreed that defendants had established the necessary six-year presumption of laches for these two patents, id. at 189-91, it concluded that plaintiff had presented evidence that rebutted the presumption. First, litigation with another entity over one of the three patents “provid[ed] justification for [plaintiff] not pursuing [defendant] on that patent” while that action was pending. Id. at 193. Second, there was an issue of material fact as to whether negotiations related to the potential infringement of defendants’ technology would have resolved the infringement issues. Id. at 195. In response, defendants argued that they had suffered economic prejudice as a result of plaintiff’s delay in filing because they had expanded their use of the potentially infringing products, but plaintiffs demonstrated “through statements from [defendants’] executives that an earlier lawsuit would not have affected [defendants’] business plans.” Accordingly, issues of material fact were raised “as to whether a nexus exists between [defendants’] economic change an [plaintiff’s] delay. Id. at 198. The Court therefore denied defendants’ motion, finding it unnecessary to address plaintiff’s unclean hands argument. Id.

The Court granted the following motions for summary judgment:

-Defendants’ motion for summary judgment of invalidity, based on the written description requirement, as to two claims of U.S. Patent No. 6,263,222. The Court concluded that plaintiff’s patent did not show that the inventors possessed the claimed subject matter: these claims “speak of a signal processor generically; its specification, however, only describes correlation canceler techniques, and [plaintiff’s expert] admits at the time of the invention only correlation cancellation techniques were known to one skilled in the art. . . . nothing in [the claims] or the specification constitute an adequate description of all signal processors for use in a non-correlation canceler. Therefore, [defendants’] motion for summary judgment on written description is granted.” Id. at 29-30.

-Defendants’ motion for summary judgment of invalidity, based on the written description requirement, as to U.S. Patent No. 6,699,194. Defendants, relying on the specification itself and the testimony of the inventor, argued that the specification in plaintiff’s patent did not disclose certain methods in the claims because it did not “disclose any method of estimating pulse rate from an unclean spectrum” – it only disclosed “classifying clean spectral data.” Id. at 121 (emphasis added). The Court agreed. Id. at 129.

-Defendants’ motion for summary judgment of noninfringement of U.S. Patent No. 7,215,984. The Court concluded that some of plaintiff’s expert’s statements on the issue were inconsistent with her other testimony, and plaintiff “should not be able to create a question of fact to defeat summary judgment via [its expert’s] new declaration if it contradicts her prior testimony.” Id. at 69 & n.322.

-Plaintiff’s motion for summary judgment of noninfringement of U.S. Patent No. 6,122,535 (“the ‘535 patent”). First, while the Court did not grant plaintiff’s motion as to literal infringement “in light of the manner in which the parties’ presented their arguments,” id. at 199, it concluded that defendants were precluded from relying on the doctrine of equivalents. Plaintiff demonstrated that: (i) defendants’ infringement contentions would eliminate an element of claim 1, id. at 155; (ii) the way in which defendants had distinguished its patent from prior art during prosecution demonstrated prosecution history estoppel, id. at 156, 158; and (iii) the ‘535 patent contained disclosed but unclaimed embodiments, id. at 162. Second, the Court granted plaintiff’s motion as to direct infringement because defendants had not shown that every step of method claim 1 of the ‘535 patent had actually been performed; “that [plaintiff’s] products may be capable of performing the claimed method is not enough.” Id. at 167 (emphasis added). As a result, plaintiff was neither a direct nor indirect infringer. Id. at 165-66.

As to plaintiff’s Daubert motion, plaintiff argued defendants’ expert on infringement and validity with respect to U.S. Patent No. 6,725,074 (“the ‘074 patent”) was not qualified to opine on “fuzzy logic,” which was a central aspect of the ‘074 patent. Id. at 90 & n.424. This expert had no formal education or training in fuzzy logic, but defendants argued that because he was “qualified as an expert in the field of digital signal processing, source code and medical devices, and this field includes the technology disclosed in the ‘074 patent, namely, the use of uncertain and fuzzy logic software applications in medical devices,” he possessed “at least ordinary skill in the art” such that he could “provide helpful testimony on how software using uncertain and fuzzy logic works within the devices at issue.” Id. at 91 (internal citations and quotation marks omitted). The Court agreed and denied plaintiff’s motion. Id. at 91-92. In doing so, the Court distinguished case law in which an expert was unqualified because that expert did not have knowledge about the relevant field of technology, had “other significant deficiencies,” and had not properly addressed the issue of a person of ordinary skill in the art. Id. at 93-94. Here, defendants’ expert’s qualifications, in light of plaintiff’s own description of a person of ordinary skill in the art, was appropriate. Id. at 94-95.

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April 8, 2013

Judge Andrews grants motion to dismiss for lack of personal jurisdiction.

Judge Richard G. Andrews recently granted a motion to dismiss for lack of personal jurisdiction. M2M Solutions LLC v. Simcom Wireless Solutions Co., Ltd., et al., C.A. No. 12-034-RGA (D. Del. Apr. 1, 2013). The motion was filed by one of four defendants in the case—a Florida limited liability company with places of business located in Florida and Illinois. Id. at 1. The Court explained that it was undisputed that the defendant had no physical presence, employees, or third-party distributors in Delaware. Id. Nor was there any evidence that any single one of the defendant’s accused products ever entered Delaware. Id.

The plaintiff argued that the defendant was subject to personal jurisdiction based on its website, and on its relationship with customers who maintained retail stores in Delaware. More specifically, the plaintiff noted that the defendant’s website was accessible in Delaware, provided a toll-free phone number, and included references to the defendant being a “global” company with aspirations to increase activities throughout North America. Id. at 1-2. The Court recognized that the defendant’s website contained “public expressions of intent to serve the entirety of North America along with a toll-free phone number[,]” but found that because individuals accessing the website from Delaware could not place an order directly through the website, it was more of a passive website under the test laid out in Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 119 (W.D. Pa. 1997). Id. at 6 n.3. As a result, the Court found that the defendant’s passive website could not support a finding of personal jurisdiction over the defendant.

The Court next rejected the argument that the defendant was subject to personal jurisdiction based on its relationship with customers with Delaware retail stores. Id. at 7. The Court acknowledged that “[i]t is a tenable theory under the Delaware long-arm statute that [the defendant] may be subject to personal jurisdiction for placing infringing products in the ‘stream of commerce[,]” but in this case the Court found the evidence supporting that theory to be “completely speculative” given that there was no allegation that even a single product had entered Delaware. Id. (“It would seem that an absolute minimum requirement of the ‘stream of commerce’ test is the allegation that an infringing product has actually entered the market of the forum state.”). The Court concluded by explaining: “there is zero evidence that any [of the defendant’s] products have entered the Delaware market, let alone evidence suggesting a ‘regular and anticipated’ flow of products into the state.” Id. at 9. As a result, the Court denied the plaintiff’s request for jurisdictional discovery, and granted the defendant’s motion to dismiss. Id.

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April 8, 2013

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

In a recent memorandum opinion, Judge Leonard P. Stark granted a motion for summary judgment that pre-2004 versions of Microsoft Windows do not infringe various patents asserted by the plaintiff. St. Clair Intellectual Property Consultants, Inc. v. Acer, Inc., et al., Consol. C.A. No. 09-354-LPS (D. Del. Mar. 29, 2013). The plaintiff had neither responded to interrogatories relating to pre-2004 Windows, nor provided the defendants with contentions on how pre-2004 Windows infringe. Id. at 4. Further, the plaintiff provided no competing expert testimony in response to the defendants’ expert, who opined that pre-2004 versions of Windows do not infringe. Id. at 5. Because the plaintiff carried the burden of proving infringement, and it “failed to present any evidence of infringement related to pre-2004 versions of Windows[,]” the Court granted the motion for summary judgment of non-infringement, and found further that pre-2004 versions of Windows could appropriately be considered non-infringing alternatives. Id. at 5-6 (emphasis in original).

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April 8, 2013

Judge Robinson Denies Request to Allow Damages Discovery before the Federal Circuit Rules on Liability

Judge Robinson recently issued a discovery order in the ongoing patent infringement dispute between Mobilemedia Ideas and Apple. Plaintiff Mobilemedia Ideas filed a request for “‘discovery necessary to allow the parties to be prepared to try the damages case’ as soon as possible after the court’s decision on the parties’ post-trial motions.” Judge Robinson denied the request, stating “[t]he court is not inclined to change its standard practice of bifurcating damages until the issue of liability has been decided by the Federal Circuit, until such time (if ever) the Federal Circuit requires the court to abandon said practice.” See Mobilemedia Ideas LLC v. Apple Inc., C.A. No. 10-258-SLR, Order at 1 (D. Del. Apr. 2, 2013).

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