September 7, 2012

Judge Thynge Recommends Denial of Stay Pending Reexamination

Magistrate Judge Thynge has issued a report and recommendation considering the defendant’s motion to stay pending inter partes reexamination in ImageVision.Net, Inc. v. Internet Payment Exchange, Inc., C.A. No. 12-054-GMS-MPT (D. Del. Sep. 4, 2012). Considering each of the three factors for issuing a stay, Judge Thynge concluded that the motion should be denied.

Judge Thynge first considered whether the timing and status of the litigation and the reexamination weighs against a stay. She noted the defendant’s argument that “the legally relevant inquiry considers not whether discovery has commenced, but rather whether discovery is complete and a trial date set.” She then found that the status of the litigation favored a stay because “[a]lthough initial discovery has begun and a scheduling order issued, ‘this case is still in its infancy, and the record is relatively sparse.’ No trial date has been set and discovery is not scheduled to be completed until July 19, 2013. [Plaintiff] does not demonstrate how the facts of this case weigh against a stay despite the obvious lack of significant discovery activity. As a result, the status of the litigation favors a stay.” Id. at 5-6.

Judge Thynge next considered whether a stay would simplify the issues in question and trial of the case. She pointed out that “[s]hould the PTO grant defendant’s reexamination request, many issues outside the purview of the reexamination would remain to be tried.” Finding that “the scope of the issues to be resolved during litigation substantially exceeds the scope of the issues that can be resolved during the reexamination proceedings,” Judge Thynge determined that this factor disfavored a stay. Id. at 6-8.

Finally, Judge Thynge considered whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party. In this regard, she first noted that “[a]lthough competition between two parties is not dispositive, ‘the relationship between the parties is ‘[o]f particular importance’ because ‘[c]ourts are generally reluctant to stay proceedings where the parties are direct competitors.’” Accordingly, “[t]he element of direct competition strongly favor[ed] denying [the] motion for a stay.” Id. at 8-10. Judge Thynge next found that a stay “would prejudice [the plaintiff] particularly” because the reexamination had only recently been filed and “this litigation would likely be completed far in advance of a decision on the last appeal in the reexamination proceeding.” Therefore, the “prejudice to plaintiff resulting from the status of the reexamination proceedings disfavors granting a stay.” Id. at 10. Because the parties in the case were direct competitors and the reexamination was in its earliest stages, Judge Thynge found that the prejudice factor favored a stay and concluded: “Weighing all considerations, the interests in proceeding with the litigation outweigh any basis for a stay in this action.” Id. at 12.

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September 7, 2012

Judge Robinson Grants Summary Judgment of Invalidity

Judge Robinson recently considered cross motions for summary judgment of invalidity, infringement, and non-infringement in ongoing litigation over patents covering methods for analyzing cellular, biological samples. Focusing on the lighting system required by the patents-in-suit, Judge Robinson first engaged in the claim construction necessary to decide the dispute. She then denied all of the pending motions except for the defendant’s motion for summary judgment of invalidity based on inadequate written description. See Helicos Biosciences Corp. v. Illumina, Inc., C.A. No. 10-735-SLR, at 27 (D. Del. Aug. 28, 2012).

The defendant, Illumina contended that the asserted claims were invalid for lack of an adequate written description, lack of enablement, and anticipated and/or rendered obvious in view of the prior art. The parties also disputed whether any accused product infringed any of the asserted claims. In order to resolve summary judgment motion on these issues, however, Judge Robinson needed to engage in claim construction. In the parties’ briefing, Illumina proffered constructions for two terms, while the plaintiff, Helicos, did not propose any constructions, arguing that the plain meaning should apply to both terms at issue. While Judge Robinson considered Illumina’s constructions unduly narrow, she also disagreed with Helicos that no construction was required, stating that “a lay jury requires context for such unfamiliar technical language.” Id. at 13. She therefore crafted her own constructions for the two disputed terms and proceeded to consider the summary judgment motions based on these constructions.

With respect to lack of written description and lack of enablement, Judge Robinson concluded that summary judgment of invalidity should be granted: “Illumina has demonstrated, by clear and convincing evidence, that the written description requirement has not been met. Although the parties seem to agree on the ordinary meaning of the word “focus” (to wit, “to make an image sharper”), the complete limitation is in dispute . . . . The court has been unable to reconcile the language chosen by the inventor to describe his invention and the science at issue. Given this hobson’s choice, the court finds the ‘109 patent invalid for lack of written description and enters judgment in favor of Illumina.” Id. at 22-23.

Judge Robinson did not rule on several remaining issues of invalidity because they “hinge[d] on a central issue” that had not been addressed in the parties’ briefing. Id. at 23-24. Similarly, Judge Robinson found that “the record does not sufficiently address infringement under the court’s nowadopted construction. . . . Because the court takes up claim construction and summary judgment simultaneously, and neither party advocated for the construction ultimately adopted by the court, the parties’ summary judgment arguments are not framed in [the proper terms].” Id. at 25-26. Accordingly, Judge Robinson ordered further briefing on infringement and claim construction and denied the balance of the pending motions.

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September 6, 2012

Chief Judge Sleet Rules on Correction of Inventorship Action

In a recently-decided case, two plaintiffs filed a correction of inventorship action seeking to add themselves as inventors of several patents assigned to defendant Zimmer, Inc. Chief Judge Sleet held a bench trial and concluded that the plaintiffs were not inventors of the patents-in-suit. See Scott v. Zimmer, Inc., C.A. No. 10-772-GMS (D. Del. Aug. 27, 2012).

Judge Sleet went through the patents-in-suit, claim by claim, and found that the plaintiffs had not contributed novel elements to any of the claims at issue. “To be an inventor, one must contribute to the conception of the invention. . . . Thus, plaintiffs must show that they each individually made a ‘contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention, and [did] more than merely explain to the real inventors well-known concepts and/or the current state of the art.’” Id. at 5-6 (citations omitted). In each instance, however, the plaintiffs’ testimony that they had been involved in the conception of novel elements was completely uncorroborated, and “plaintiffs’ testimony regarding their own inventorship claim ‘is regarded with skepticism’ and ‘cannot, standing alone, rise to the level of clear and convincing proof.’” Id. at 6 (citations omitted). Furthermore, the documentary evidence and testimony of other inventors largely contradicted any suggestion that the plaintiffs had helped conceive of the inventive elements. Therefore, the court concluded that “the plaintiffs [had] not met their burden of establishing, by a clear and convincing evidence, a specific contribution made by them to the conception of a novel element of a patent claim, and that they [had] not corroborated their testimony.” Id. at 16.

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September 6, 2012

Judge Robinson Denies Motion to Dismiss for Lack of Standing

Last month, Judge Robinson issued an opinion considering the standing required to file a patent infringement suit. In MobileMedia Ideas, LLC v. Apple Inc., C.A. No. 10-258-SLR (D. Del. Aug. 16, 2012), the plaintiff, MobileMedia Ideas (“MMI”), filed suit against Apple for infringement of sixteen patents. Apples filed a motion to dismiss on the ground that MMI lacked subject matter standing. Judge Robinson ultimately denied Apple’s motion to dismiss, finding that MMI had sufficient standing.

At issue was whether MMI could sue on its own or whether it needed to also joint its three licensees. The licensees were former owners of the patents-in-suit who had entered into an assignment and license-back agreement with MMI. Each licensee also partially owned MMI. “Typically,” Judge Robinson noted, “courts are presented with the situation where an exclusive licensee sues an alleged infringer, and it must be determined whether the licensee has standing. [Here] the court is presented with the rather unique, converse scenario ‘in which the patent owner seeks to bring suit, requiring [the court] to determine whether the patent owner transferred away sufficient rights to divest it of any right to sue.’” Id. at 12 (citations omitted).

“[T]o have constitutional standing, a party’s interests in the patents must ‘include sufficient exclusionary rights such that [it] suffers an injury in fact from infringing activities. If [it] holds all substantial rights, it can sue in its name alone. If [it] holds less than all substantial rights but sufficient exclusionary rights that it suffers injury in fact, it can sue as a co-party.’” Id. at 10. Proceeding to examine the transfer of patent rights between MMI and its licensees, Judge Robinson found that one licensee “was delegated the ‘responsibility’ to bring suit, [but] the ‘right’ to sue lies with MMI, [and] [t]he right to sue is of paramount importance in the ‘substantial rights’ analysis.” Id. at 13. She noted that the licensees had assigned MMI “‘the entire right, title and interest in the patents-in-suit,’ . . . [a] transfer of [which] is well known to mean a full assignment of the patent.” Id. at 14. MMI also had other rights “for which the associated enforcement ‘responsibilities’ have been delegated to [a licensee]. MMI has the right to receive patent royalties, for example . . . irrespective of the fact that MMI later allocates its profits to the owners.” Id. Furthermore, “‘the fact that a patent owner has retained a right to a portion of the proceeds of the commercial exploitation of [a] patent . . . does not necessarily defeat what would otherwise be a transfer of all substantial rights in the patent.’” Id. (citations omitted). Finally, “‘[t]he right to dispose of an asset is an important incident of ownership, and such a restriction on that right is a strong indicator’ that not all substantial rights under the patent have been transferred.” Because unanimous approval of all three licensees/owners was required for MMI to sell a patent, this indicated that MMI, not any individual licensee, owned the substantial rights of the patent. Id. (citations omitted).

“In conclusion,” Judge Robinson explained that while the licensees “have retained (or have been granted back) certain rights in the patents-in-suit, the court does not deem such rights ‘substantial’ vis a vis those held by MMI. There is no indication that . . . nonexclusive licensees of MMI holding no legal title to the patents-in-suit, have constitutional standing to sue.” Id. at 15. Accordingly, she found that MMI had standing to sue and denied the motion to dismiss.

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September 5, 2012

Judge Sleet transfers case to Texas where first-filed declaratory judgment action pending

Judge Gregory M. Sleet recently considered defendant's motion to dismiss, or alternatively to transfer, the pending patent infringement action to Texas where defendant had first-filed a declaratory judgment action involving the same parties and same five patents. Mitek Systems Inc. v. United Services Automobile Association, C.A. No. 12-462 (D. Del. Aug. 30, 2012). Both actions involved various state law claims, such as, breach of contract. Id. at 2. Judge Sleet first determined that the first-filed rule applied, finding that the same patents were at issue in both actions and that the cases involved the same parties. Id. at 3. Even though both cases involve separate state law claims, "it [wa]s clear that the focus of each case [wa]s the intellectual property rights" related to the agreement between the parties. Id. at 4 (internal quotations omitted). Judge Sleet next determined that no exception to the first-filed doctrine applied, such as the forum selection clause of the license agreement at issue in the later-filed action. Id. Judge Sleet held that enforcing the forum selection clause "would violate Delaware's public policies promoting judicial efficiency and comity served by the first-filed rule." Id. at 5 (internal quotations omitted). Last, Judge Sleet determined that transfer was appropriate, finding that all but one Jumara factor was either neutral or favored transfer. Id. at 8-15.

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August 27, 2012

Judge Robinson sua sponte issues stay pending early valuation of the case through ADR

Judge Sue L. Robinson recently issued an order denying defendants' pending motions to transfer and amend its answer and staying the case pending "an early valuation of the case[.]" Acronis Int'l GmbH v. Symantec Corp., C.A. No. 12-372-SLR (D. Del. Aug. 20, 2012). Id. at 1. After briefing and oral argument on the pending motions, Judge Robinson noted that the "parties have as much a business dispute as a legal dispute[,]" and that an early valuation of the case "may encourage the resolution of the parties' dispute without incurring the costs and other burdens associated with a more traditional approach to patent litigation[.]" Id. Therefore, Judge Robinson ordered that by the end of October the parties must complete "focused damages discovery," and she referred the case to Magistrate Judge Thynge "for purposes of managing damages discovery and conducting ADR during this preliminary stage of the proceedings." Id. at 2.

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August 23, 2012

Judge Stark construes claims relating to liquid acetaminophen.

Judge Stark recently construed a dozen claim terms relating to patented formulations and methods for making liquid acetaminophen. Cadence Pharmaceuticals, Inc. v. Paddock Laboratories Inc., et al., C.A. No. 11-733-LPS (D. Del. Aug. 22, 2012). The following claim terms were construed:

“stable”

“liquid formulation consisting essentially of acetaminophen dispersed in an aqueous medium”

“buffering agent”

“free radical scavenger”

“an isotonizing agent”

“diluted to a concentration of 2 to 50 mg/ml”

“an aqueous solution”

“an injectable aqueous solution”

“while preserving for a prolonged period”

“deoxygenation of the solution by bubbling with at least one inert gas and/or placing under vacuum, until the oxygen content is below 2 ppm”

“optionally the deoxygenation of the solution is completed by addition of an antioxidant”

“and optionally the aforementioned aqueous solution with an active principal is topped with an inert gas atmosphere heavier than air and placed in a closed container in which the prevailing pressure is 65,000 Pa maximum, and the oxygen content of the aqueous solution is below 2 ppm”

With regard to the claim term "stable", the Court rejected the defendants' argument that the term is indefinite under 35 U.S.C. § 112, and therefore not amenable to construction. The Court explained, assuming arguendo that it should even consider indefiniteness in claim construction, that "proof of indefiniteness is an 'exacting standard' that requires a determination that the claim term is 'insolubly ambiguous[]'." Id. at 5 (quoting Halliburton Energy Servs., Inc. v. M-I LLC, 514 F.3d 1244, 1249-50 (Fed. Cir. 2008)). Here, the Court found that the defendants fell short of showing that the term "stable" was so ambiguous as to be incapable fo construction. Id. at 6.

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August 22, 2012

Judge Robinson Finds Evidence of Obviousness and Inequitable Conduct Insufficient, Awards Costs

Judge Robinson has considered motions for judgment as a matter of law and the question of inequitable conduct in a patent infringement case involving technology for applying thin film coatings to glass. See Asahi Glass Co., Ltd. v. Guardian Indus. Corp., C.A. No. 09-515-SLR (D. Del. Aug. 20, 2012). After partial grants of summary judgment, a denial of defendant’s motion to amend to assert claims of inequitable conduct, and a jury trial on validity, the defendant renewed its motion for judgment as a matter of law and moved for a new trial. Although the jury found that the patents-in-suit were valid, the defendant contended that JMOL or a new trial was appropriate because certain claims were invalid due to obviousness and both patents-in-suit were invalid for failure to list the proper inventorship.

On obviousness, Judge Robinson found that defendant had not “identified clear and convincing evidence of obviousness of the asserted claims of the patents-in-suit. Plaintiffs’ evidence of secondary considerations of nonobviousness . . . provides further rationale for upholding the jury verdict of nonobviousness based on the additional references and combinations of references asserted by defendant. Outside of [one prior art reference], the majority of defendant’s additional obviousness theories were founded primarily on attorney argument.” The court therefore found that “the jury’s verdict of nonobviousness was reasonable and supported by the record.” Id. at 40. Judge Robinson also found that defendants had not proven false inventorship through the improper inclusion of inventors, the improper exclusion of inventors, or a challenge to the jury instructions on inventorship. Id. at 15-22.

Finally, Judge Robinson considered the issue of inequitable conduct. The Court had previously considered defendant’s motion to amend the pleadings to add claims of inequitable conduct. But the defendant’s request to amend came six months after the deadline to amend the pleadings and after the close of fact discovery, so the Court denied it on the basis of unexplained delay. After the jury trial, the defendant again argued that plaintiffs had engaged in inequitable conduct by failing to disclose two of their own patents during prosecution. Judge Robinson found, however, that “defendant’s inequitable conduct argument is based primarily on attorney argument without relevant references in the trial record. The evidence at bar is insufficient to demonstrate either the materiality of [the two patents] or [the inventor’s] intent to deceive the PTO by clear and convincing evidence.” Id. at 44. She awarded plaintiffs their reasonable costs in responding to defendant’s additional inequitable conduct theories raised post-trial: “Insofar as the court agrees with plaintiffs that these theories were procedurally barred, and given that defendant’s inequitable conduct theory with respect to [two other patents] are devoid of merit, the court will order defendant to pay plaintiffs’ reasonable costs associated with preparation of their responsive brief.” Id. at 46.

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August 22, 2012

Judge Robinson: no new trial based on purportedly improper jury instruction to which no objection was raised.

In a recent memorandum opinion, Judge Robinson denied a plaintiff’s post-trial motion for judgment as a matter of law and for a new trial. Solvay, S.A. v. Honeywell Int’l Inc., Civ. No. 06-557-SLR (D. Del. Aug. 20, 2012). The patent-at-issue claimed “processes for making 1,1,1,3,3-pentaflouropropane (‘HFC-245fa’).” Id. at 2. At trial, the jury found that the patent was both anticipated and obvious. Id. at 1. The Court found ample evidence to support the jury’s findings, and denied the plaintiff’s motion for judgment as a matter of law of no anticipation or obviousness. Id. at 9, 12, 17.

The Court also denied the plaintiff’s motion for a new trial, which was based, in part, on the argument that the Court’s jury instructions were inconsistent with the manner in which the Court and the parties originally construed claim 1 of the patent-at-issue. Id. at 17. The Court noted that in its Markman order, it construed a reaction in claim 1 as occurring “at a temperature and under a pressure whereby HFC-245fa and HCl are produced in gaseous form and separated from the reaction mixture in a gas stream[.]” Id. at 17. The Court acknowledged that in the final jury instructions, the same portion of claim 1 was construed slightly differently, to read: “at a temperature and under a pressure whereby HFC-245fa and HCl are produced in gaseous form and continuously separated or drawn off from the reaction mixture in a gas stream”. Id. (emphasis in original). The Court noted, though, that “[t]he threshold issue is whether [the plaintiff] properly objected to the change in instructions, thereby preserving its right to raise the instruction as grounds for a new trial.” Id. at 18. Here, the plaintiff “did not object to the [inclusion of ‘continuously’ or ‘or drawn off’] to the claim construction in its notice of objections to the final jury instruction …, and it did not raise any objection before the instructions were read to the jury.” Id. Further, the plaintiff “conceded that the version of the claim construction including the words ‘continuously’ and ‘or drawn off’ was consistent with the court’s previous construction.” Id. at 18-19 (citing trial transcript). Under the circumstances, the Court explained that a new trial based upon the purported improper jury instruction would not be warranted because there was no “grievous unfairness” resulting from the instruction. Id. at 19.

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August 21, 2012

Judge Robinson denies transfer after finding no Jumara factors favored transfer

Judge Sue L. Robinson recently denied defendants' joint motion to transfer to the Northern District of California where the patents-in-suit were previously litigated. Mosaid Technologies, Inc. v. Sony Ericsson Mobile Communications (USA) Inc., C.A. No. 11-598-SLR (D. Del. Aug. 16, 2012). Judge Ware of the Northern District of California presided over the two previous cases and was, according to defendants, "extensively familiar with the patents." Id. at 3. Plaintiff was a Canadian corporation with it's principal place of business in Texas Id. at. 2. Defendant HTC was a Washington corporation with its principal place of business in Washington, and defendant Sony was a Delaware Corporation with its principal place of business in Georgia. Id. Defendants had argued that several of the Jumara public interest factors favored transfer because of Judge Ware's "'substantial investments of both time and resources with respect to the subject matter in this case." Id. at 7. Judge Robinson found those factors neutral, however, noting that Judge Ware recently announced his retirement planned for this month. Id. Judge Robinson found all other factors neutral as well. For example, she determined that this court was "equally well-suited" to construe an agreement at issue under California law, and the named inventors indicated their willingness to travel to Delaware, as needed. Id. at 7-8. "Insofar as no factors favor[ed] transfer in these circumstances[,]" defendants motion was denied. Id. at 9.

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