July 30, 2012

Judge Stark denies motion to stay pending reexamination, discusses pre-suit knowledge issues in ruling on motions to dismiss indirect and willful infringement allegations.

In a recent memorandum opinion, Judge Stark denied a motion to stay pending the conclusion of reexamination proceedings, finding that none of the three relevant factors weighed in favor of granting a stay. Softview LLC v. Apple Inc., et al., C.A. No. 10-389-LPS (D. Del. July 26, 2012). Specifically, the Court found that a stay would not result in simplification of the issues and trial, because “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,” and the defendants were within their rights to refuse to be bound by any PTO decisions other than validity based on the particular prior art references raised during the reexamination. Id. at 3-4. The Court also found that although the litigation was still in the early stages, the parties and the Court had already expended significant resources on motions to sever, stay, and dismiss. Because the reexamination was also in its early stages, the Court found, on balance, that the “relative status of the litigation and reexamination proceedings does not favor a stay.” Id. at 7. Finally, the Court found that the plaintiff would be unduly prejudiced by a stay, because a stay would deprive the plaintiff of its chosen forum (potentially for several years), while giving the defendants a “clear and unwarranted tactical advantage.” Id. at 7-8.

The Court next considered whether the plaintiff had alleged a plausible basis for finding that the defendants had pre-suit knowledge of the patent to support a finding of willfulness or indirect infringement. The Court found that the plaintiff’s allegations of (1) an AT&T subsidiary’s knowledge of the patent; (2) AT&T’s relationship with the patent’s inventor; and (3) AT&T’s former role as exclusive seller of the patented technology raised (in the aggregate) a plausible basis for a finding of pre-suit knowledge. Id. at 9-10. The Court also found that the plaintiff alleged a plausible basis for pre-suit knowledge as to several defendants who were members of a defensive patent aggregate service ("RPX"), since RPX indisputably had knowledge of the patent. Id. at 13. The plaintiff failed, however, to adequately allege pre-suit knowledge by defendant Kyocera. The Court explained that the allegation that Kyocera had pre-suit knowledge as a result of the media’s publicity of an earlier lawsuit involving the patent was insufficient. Id. at 11.

After finding that the plaintiff failed to sufficiently allege pre-suit knowledge on the part of Kyocera, the Court considered whether the plaintiff’s indirect infringement claim could be based on post-filing conduct by Kyocera. Id. at 13. The Court noted, “[o]n this issue there is divided precedent in this District,” and agreed with the precedent finding that “the filing of a complaint is sufficient to provide knowledge of the patents-in-suit for purposes of stating a claim for indirect infringement occurring after the filing date.” Id. at 14 (citing Apple Computer, Inc. v. Unova, Inc., 2003 WL 22928034, at *5 (D. Del. Nov. 25, 2003)).

Finally, the Court considered whether an allegation of willful infringement requires pre-suit knowledge and/or a motion for a preliminary injunction to enjoin post-filing infringement. Id. at 15. The Court held that, under In re Seagate Tech, LLC, 497 F.3d 1360 (Fed. Cir. 2007), a patentee “cannot recover enhanced damages based solely on an accused infringer’s post-filing conduct whether the patentee has not sought a preliminary injunction.” Id. at 16 (emphasis in original). Because the plaintiff’s allegations against AT&T and the defendants affiliated with RPX was based also on pre-suit knowledge, the Court denied their motion to dismiss willfulness allegations. Id. at 17.

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July 30, 2012

Chief Judge Sleet construes claim terms relating to refrigerator ice bin and dispenser technologies.

Chief Judge Sleet recently construed claims across ten different patents relating to refrigerator ice bin and dispenser technologies. LG Electronics U.S.A., Inc. v. Whirlpool Corp., C.A. No. 10-311 (GMS) (D. Del. July 10, 2012) (previously discussed here and here). The following claim terms were construed by the Court:

“refrigerating compartment”
“ice compartment”
“ice storage bin is dedicated to define a part of the cavity”
“that enables removal of at least a portion of the ice compartment from the refrigerating compartment”
“wherein the portion of the ice compartment that is removable from the refrigerating compartment is detachably installed within the refrigerating compartment”
“removing at least a portion of the ice compartment . . . including at least the ice storage bin and the [sic] at least one of the insulating walls”
“an interface . . . configured to receive air”
“freezing chamber/freezing compartment”
“an ice container positioned on the refrigerator door and configured to store ice made by the icemaker”
“a structure provided on the refrigerator door and corresponding to the ice container, the structure including an inlet configured to receive air”
“calculating a door-opening time when a door-open and a door-close are detected”
“cooling operation”
“obtaining a reset temperature lower than said negative limit temperature in accordance with the door opening time”
“determining and setting a reset temperature depending on the door-opening time, wherein the resetting temperature is lower than the negative limit temperature”
“executing a cooling operation until a temperature inside the refrigerator compartment reaches the reset temperature”
“the cover being movable between an open position to allow access to the ice bin and a closed position to prevent cold air from leaking from the ice compartment into the fresh food compartment”
“a cover for impeding cold air from passing from the ice compartment to the fresh food compartment”
“a cover adjustable into a closed position to cover the opening”
“finger activated release to move the latch member into an unlocked position”
“an unlocked position disengaged from the catch to permit the ice bin to be removed from the ice compartment”
“the cover being adjustable into an open position to permit removal of the ice bin from the ice compartment”
“auger”
“a refrigerator including a freezer compartment having an access opening and a closure member for closing the access opening”
“ice crusher blade”
“upper ice bin member”
“lower ice bin member”
“being disposed within the freezer compartment”
“an ice dispenser”
“a [first/second] end insert”
“interengaging”
“an aperture for receiving a fastener”

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July 30, 2012

Claim construction in patent infringement suit over technology to prevent vehicle rollover

Judge Leonard P. Stark recently construed the following claim terms of U.S. Patent Nos. 5,529,153 and 5,437,354 relating to "technology for suppressing vehicular rolling motion, i.e. the tendency of the vehicle to tilt when the vehicle turns a corner or is driven around a sharp curve." Cloud Farm Associates, L.P. v. Volkswagen Group of America, Inc., C.A. No. 10-502-LPS (D. Del. July 27, 2012)

"partially filled with hydraulic fluid"
"a chamber having two portions partially filed with hydraulic fluid"
"seal" /"sealing" /"seals"
"prevent flow of said fluid"
"preventing tilting of the frame or body of the vehicle"10/"preventing tilting
of the body of the vehicle"
"prevent movement of the piston and further tilting of the body of the
vehicle"
"a plate within said chamber having a substantially central opening
separating said fluid within the chamber into a lower portion and an upper
portion"
"a plate within said chamber having at least one opening separating the fluid
within the chamber into two portions"
"means within said chamber to separate said fluid within the chamber into
two portions"
"sealing means"
"means for sensing the tilt" terms
"means for moving the sealing means to seal"
"electromagnetic means to move said sealing means to seal"
"electromagnetic means for operating said sealing means"
"predetermined tilt position of the body"/"set tilt position of the body"
"electrical switch"/"means [including] an electrical switch"
"means ... for energizing said electromagnetic means"
"said at least one opening"
"mercury switch"
"prevent any flow of said fluid"
"means for dampening the movement of the piston when the piston is
compressed or extended"
"being below"

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July 30, 2012

Judge Andrews denies plaintiffs' request to amend ANDA complaint to join non-ANDA claims

In Novartis Pharmaceuticals Corp., v. Actavis South Atlantic LLC, C.A. No. 11-1077-RGA (D. Del. July 25, 2012), Judge Andrews denied plaintiffs' motion to amend its complaint to add a non-ANDA claim to the existing ANDA litigation. In doing so, Judge Andrews found that permitting amendment would prejudice defendant, without justificiation, by expediting the non-ANDA claim and by depriving defendant of the opportunity to file case dispositive motions for that claim.

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July 27, 2012

Federal Circuit Denies Mandamus in District of Delaware Case Under In re Link_A_Media Devices

The Federal Circuit recently issued a decision applying In re Link_A_Media Devices Corp. and denying a writ of mandamus directing the Judge Stark of the District of Delaware to transfer a patent infringement case to the Northern District of California. The case involved two Delaware limited liability companies as plaintiffs and four Delaware corporations as defendants. Because the defendants were all headquartered on the west coast, they moved for transfer under 28 U.S.C. § 1404(a), but Judge Stark denied their motions. See Intellectual Ventures I LLC, et al. v. Altera Corp., C.A. No. 10-1065-LPS (D. Del. Jan. 23, 2012).

Three of the defendants sought a writ of mandamus from the Federal Circuit, and the Federal Circuit denied their petition. In re Altera Corp., et al., Misc. Doc. No. 121, at 5 (Fed. Cir. Jul. 20, 2012) (slip op.). In its opinion, the Federal Circuit noted that under Link_A_Media it “has jurisdiction to issue a writ of mandamus to correct a denial of transfer, but only to the extent that the trial court’s analysis amounted to a clear abuse of discretion.” Id. at 3 (citing In re Link_A_Media Devices Corp., 662 F.3d 1221, 1223 (Fed. Cir. 2011)). The Court went on to explain that “the district court afforded the respondents’ choice of forum substantial weight . . . [and] concluded that the convenience of [potential] witnesses was entitled to little weight.” Id. at 2-3.

These were proper considerations according to the Federal Circuit: “[S]tatus as Delaware corporations is not entitled to controlling weight insofar as no office or employees are located in Delaware. Still, the relevant inquiry is broad enough to include the Delaware court’s interest in resolving disputes involving its corporate citizens . . . .” Id. at 3. “Moreover, the decision to deny transfer draws support from the fact that numerous potential non-party witnesses having knowledge related to the engineering and sales of the accused products appear to be located close to Delaware. In light of these circumstances, a rational basis existed for denying transfer of this case.” Id. at 4.

The Court also distinguished Altera from Link_A_Media, noting that Link_A_Media “did not go so far as to limit the trial court’s discretion to deny transfer in this case.” Id. The Court held that Altera was “clearly distinguishable; in it thorough opinion, the district court endeavored to evaluate each of the forum non conveniens factors . . . and there is no clear indication that the court failed to meaningfully consider the merits of the transfer motion. Moreover . . . there are rational grounds for denying transfer given that all of the parties . . . had incorporated in Delaware and some witnesses would potentially find Delaware more convenient.” Id.

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July 27, 2012

Jury awards damages of $50 million based on 6% royalty rate for contributory and induced infringement of patent relating to enzyme replacement therapy to treat Fabry disease.

A jury recently awarded a plaintiff $50 million in damages based on a 6% royalty rate after finding that the defendant induced and contributed to the infringement of U.S. Patent No. 7,011,831 (“Recombinant α-galactosidase A therapy for Fabry disease”), and that the asserted claims were not invalid as anticipated, for failure to meet the written description requirement, or for failure to meet the enablement requirement. Shelbyzyme LLC v. Genzyme Corp., C.A. No. 09-768-GMS (D. Del. July 17, 2012).

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July 24, 2012

Judge Stark denies defendants' Rule 11 sanctions motion filed after defendants prevailed on summary judgment

In BAE Sys. Info. and Elec. Sys. Integration Inc. v. Aeroflex Inc., C.A. No. 09-769-LPS (July 23, 2012), Judge Stark denied defendants' Rule 11 sanctions motion, filed after Judge Stark granted defendants' summary judgment motion of noninfringement pursuant to 28 U.S.C. § 1498 and summary judgment motion on plaintiff's remaining state law claims on statute of limitiations grounds. Id. at 1-5. Defendants argued that Rule 11 sanctions were appropriate because plaintiff' brought a "knowingly frivolous" and "baseless" patent infringement action against defendants. Id. at 5-7. Judge Stark disagreed. Specifically, defendants did not prove that plaintiff's proposed claim constructions supporting its claims were not reasonable. "While [defendants] proposed an alternative construction . . . that proves only that there was a dispute, not that [plaintiff] was frivolous in its advocacy." Id. at 9 (emphasis in original).

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July 24, 2012

Judge Andrews applies Therasense and denies summary judgment motion of no inequitable conduct

Judge Andrews recently issued a memorandum order denying plaintiff’s motion for partial summary judgment of no inequitable conduct. Bristol-Myers Squibb Co. v. Teva Pharmaceuticals USA, Inc., C.A. No. 10-805-RGA (D. Del. July 19, 2012). Defendant’s inequitable conduct defense was premised on the failure of the inventor of the patent-in-suit and two prosecuting attorneys to disclose to the PTO prior art relating to “the compound 2’-CDG.” Id. at 1. Judge Andrews explained the applicable law set forth by the Federal Circuit in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290-91 (Fed. Cir. 2011) (see write up at Patently-O) and noted that it “was intended to cut back on inequitable conduct as a defense.” Id. at 3. At the Summary Judgment stage, Judge Andrews stated that the only issue was “whether at least one of the three accused individuals knew the withheld information was material and made a deliberate decision to withhold it.” Id. Despite plaintiff’s evidence that the inventor and two attorneys did not make an intentional decision to withhold the prior art and did not consider the prior art material, Judge Andrews decided that summary judgment would be inappropriate because “the ‘materiality’ question [was] one on which two experts differ, and [he did] not know which one [he was] going to accept.” Id. at 4. Judge Andrews concluded by noting that “[i]t is often difficult to prove someone’s state of mind about something the person did yesterday. To prove by clear and convincing evidence that a person intended to deceive the PTO twenty years ago in the absence of any direct evidence that he did so, is about as difficult as climbing Mt. Everest. I cannot say, however, as a matter of law that it cannot be done.” Id.

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July 24, 2012

Judge Andrews grants defendant's motions to exclude two of plaintiff's experts

Judge Andrews recently granted defendant's motions to exclude two of plaintiff's experts in Bristol-Myers Squibb Co. v. Teva Pharmaceuticals USA, Inc., C.A. No. 10-805-RGA (D. Del. July 17, 2012). Judge Andrews excluded plaintiff's patent law expert because the report and testimony would not assist the trier of fact. Id. at 1. Judge Andrews also excluded, as cumulative and redundant, plaintiff's chemistry expert, "with the understanding that Defendant will not object based on the expert discovery rules to Plaintiff's other 'esteemed nucleoside chemist' covering the same material[.]" Id.

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July 23, 2012

Judge Richard Andrews Applies Twombly and Iqbal to Claims of Direct and Indirect Patent Infringement

Judge Andrews has continued to issue orders regarding the sufficiency of pleadings under Twombly and Iqbal in several recent patent infringement cases. We have previously covered several Judge Andrews orders regarding pleading standards, including IPLearn, LLC v. BeeLine Acquisition Corp., HSM Portfolio LLC v. Fujitsu Ltd., Real Time Social Inventions LLC v. CMI Marketing Inc., and IPVenture Inc. v. Lenovo Group Limited, et al. Judge Andrews recently considered similar motions to dismiss or amend direct and indirect infringement claims in three new orders, Pragmatus Telecom, LLC v. Ford Motor Co., C.A. No. 12-92-RGA (D. Del. Jul. 5, 2012); Chalumeau Power Sys. LLC v. Alcatel-Lucent, C.A. No. 11-1175-RGA (D. Del. Jul. 18, 2012); and Howard Foundation Holdings Ltd. v. Int’l Vitamin Corp., C.A. No. 12-35-RGA (D. Del. Jul 11, 2012).

Judge Andrews addressed direct infringement in Pragmatus, reiterating that compliance with Form 18 is sufficient to adequately plead direct infringement under In re Bill of Lading Transmission and Processing System Patent Litigation, 681 F.3d 1323 (Fed. Cir. 2012) (write-up at Patently-O). On this basis, Judge Andrews refused to dismiss claims of direct infringement. Pragmatus at 2.

But on indirect infringement, Judge Andrew granted motions to dismiss in Pragmatus and Chalumeau. In both cases, he found that insufficient facts were alleged to allow an inference that the allegations of indirect infringement were plausible: “The allegations of both forms of indirect infringement suffer from the bare bones nature of the complaint. Some facts would put some flesh on the bones, and might, or might not, make the allegations plausible. Until such facts are pled, however, the complaint fails to state a claim for indirect infringement.” Pragmatus at 2-3. Furthermore, “[b]oth induced infringement and contributory infringement require the defendant to know of the patent, and to know that the defendant’s actions are either inducing or contributing to another’s direct infringement. . . . [T]here are only insufficient factual assertions to support the legal conclusion of actual knowledge, and no factual assertions at all to support the legal conclusion of specific intent.” Chalumeau at 1-2. On this later issue of knowledge of the patent, Judge Andrews again stated that under Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011) (write-up at Patently-O), “[s]ervice of the original complaint gives the defendants actual notice of the patent’s existence. It might also make plausible the claim that the defendant has the knowledge that third parties who are selling its product are directly infringing the [patent-in-suit].” Chalumeau at 2-3; Pragmatus at 2-3.

Finally, Judge Andrews addressed allegations of willful infringement in Chalumeau and Howard. Here too, he found that the complaints at issue had not plausibly alleged that the defendants knew or should have known that their actions constituted infringement of a valid patent. Chalumeau at 3; Howard at 1. Moreover, in Howard, which involved a complaint against a customer of allegedly-infringing technology, Judge Andrews stated: “I do not think . . . that someone telling a manufacturer that it infringes a patent supports as a plausible inference that the manufacturer broadcasts the allegation to its customers.” Howard at 1 n.1.

Although Judge Andrews dismissed claims of indirect and willful infringement in Pragmatus and Chalumeau, he either did so without prejudice to amend “before the close of fact discovery should any of [the plaintiff’s] theories gather more factual support” or indicated that he would “not foreclose” the possibility of amendment after a Rule 16 conference. Pragmatus at 3; Chalumeau at 3. In Howard, despite concluding that the plaintiff had not adequately plead willfulness, he granted the plaintiff’s motion for leave to file a first amended complaint. Howard at 1 n.1.

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