August 3, 2012

Judge Robinson grants-in-part plaintiff’s motion to strike finding affirmative defense of invalidity inappropriate due to assignor estoppel

In Juniper Networks, Inc. v. Palo Alto Networks, Inc., C.A. No. 11-1258-SLR (D. Del. Aug. 2, 2012), Judge Robinson granted-in-part plaintiff’s motion to strike defendant’s affirmative defense of invalidity finding that the doctrine of assignor estoppel barred such a defense as to one of the patents-in-suit. Plaintiff argued that the inventors of the patents-in-suit were issued the patents while employed by plaintiff. Id. at 2-3. They subsequently left plaintiff to start another company (the defendant) and brought to defendant “the very same technology that they had previously developed and then assigned to [plaintiff] during their employment.” Id. at 3. Defendant disputed these facts arguing, among other things, that the inventors were not officers or founders of defendant. Id. at 2.

Judge Robinson noted that the Federal Circuit “reaffirmed the existence of the doctrine of assignor estoppel” in Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220 (Fed. Cir. 1988). In Diamond, the Federal Circuit explained that assignor estoppel “is an equitable doctrine that prevents one who assigned the rights to a patent (or patent application)[, or other parties in privity with the assignor,] from later contending that what was assigned was a nullity” Id. at 4 (quoting Diamond, 848 F.2d 1224).

As to four of the patents-in-suit, Judge Robinson denied plaintiff’s motion because the issue of privity between the inventors and defendant could not be determined at “the pleadings stage” and that summary judgment was a “more appropriate venue[.]” Id. at 8-9. “Because the determination of privity . . . with respect to these four patents is a fact-sensitive inquiry that must be resolved outside the pleadings, and given the standard of review applicable to motions to strike, the court denies plaintiff’s motion at this time.” Id. at 9. Judge Robinson similarly denied plaintiff’s motion as to the fifth patent-in-suit because only one of the two inventors assigned his rights to plaintiff, which would require plaintiff to prove assignment by other means. Id. at 9-10. But, as to the sixth patent-in-suit, the sole inventor indisputably assigned the patent to plaintiff and he acknowledged being a founder of defendant, thereby establishing privity. Judge Robinson, therefore, granted plaintiff’s motion striking defendant’s invalidity defense as to that patent. Id. at 10.

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August 1, 2012

Judge Stark Grants Motions to Amend Complaint

Judge Leonard Stark has issued an interesting opinion allowing a plaintiff to amend its complaint for patent infringement to assert willful infringement and add additional patents. The Plaintiff, Cloud Farm Associates, filed a patent infringement action against Volkswagen and ZF Sachs for infringement of two patents. Cloud Farm later filed a first motion to amend the complaint to add allegations of willful infringement and a second motion to amend to add claims for infringement of two additional patents. Judge Stark addressed each motion in turn.

Volkswagen knew of the patents-in-suit since 1999 because of a letter sent to Rolls-Royce and copying Volkswagen regarding alleged infringement of the patents by a Rolls-Royce product. Despite this fact, however, Judge Stark determined that there was no undue delay in seeking to amend the complaint, as “knowledge of the patents-in-suit alone is not sufficient to prove willful infringement . . . [and] Cloud Farm asserts willful infringement for accused product lines that did not even exist in 1999. Thus, the Court focuses for purposes of undue delay on the thirteen month period from the time Cloud Farm filed its initial complaint until the time that Cloud Farm filed its First Proposed Amended Complaint.” Cloud Farm Associates, L.P. v. Volkswagen Group of America, Inc., C.A. No. 10-502-LPS at 4 n.2 (D. Del. Jul. 27, 2012). Similarly, Judge Stark found that “any prejudice resulting from delay prior to the filing of this lawsuit is not properly within the scope of consideration of the First Motion to Amend. Rather, the Court must consider whether Volkswagen has suffered prejudice in the time that has passed since the filing of this lawsuit.” Because there was “no evidence that Volkswagen suffered unfair prejudice during the time between the filing of the initial complaint and the filing of the First Proposed Amended Complaint,” Judge Stark granted the motion for leave to amend. Id. at 8. Furthermore and for similar reasons, Judge Stark concluded that “Cloud Farm’s claim against Volkswagen for willful infringement of the ‘354 patent is not barred by the equitable doctrine of laches [and] consequently, amendment is not futile.” Id. at 7. And in response to the Defendants’ claim that the First Proposed Amended Complaint did not adequately plead claims for willful infringement, Judge Stark found that Cloud Farm’s allegations regarding the letter to Rolls-Royce were sufficient to plead a claim for willful infringement. Id. at 5-6.

Considering the second motion to amend, which related to the addition of two new patents, Judge Stark stated: “The Court concludes that Plaintiff has demonstrated good cause to amend as it did not have sufficient factual information to allege infringement of the ‘616 patent and ‘115 patent until after the depositions of Defendants’ corporate representatives.” Id. at 9-10. While “the parties have already engaged in substantial discovery,” the case was not so far along that the schedule could not be amended to allow the Defendants time to respond to the new patents. Additionally, Judge Stark recognized that “if the Court were to deny leave to amend, the likely result would be that Plaintiff would assert the claims it attempts to add to this lawsuit in a new lawsuit against Defendants—which will require completely new discovery, another Markman hearing, and a separate trial—likely resulting in even higher increased costs for Defendants and further delay in resolution of the parties’ disputes. In these circumstances, the Court does not find undue prejudice [in allowing the addition of the new patents].” Id. at 10-11.

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July 31, 2012

Judge Andrews: Motion to Dismiss Counterclaims Denied and Motion for Judgment of Invalidity on the Pleadings Granted

Judge Richard Andrews recently issued an order granting judgment of invalidity as a matter of law in a District of Delaware ANDA case. See Shire LLC v. Teva Pharms. USA Inc., C.A. No. 10-329-RGA (D. Del. Jul. 23, 2012). Plaintiff Shire dedicated its patent to the public but left it listed in the Orange Book. Shire then moved to dismiss all counterclaims relating to that patent and Defendant Teva cross-moved for judgment on the pleadings that the patent was invalid. Judge Andrews found that the Court “retains jurisdiction over a patent dedicated to the public where, as here, it remains listed on the Orange Book and therefore has the potential to create a triggering event for the first-filer’s exclusivity.” Furthermore, judgment of invalidity was appropriate because “express dedication to the public comprises abandonment under 35 U.S.C. § 102(c).” Judge Andrews therefore granted judgment of invalidity on the pleadings and denied Shire’s motion to dismiss. Referring to the Federal Circuit’s decision in Teva Pharms. USA, Inc. v. Eisai Co., 620 F.3d 1341 (Fed. Cir. 2010) (discussed at Patently-O), Judge Andrews further found that the Court retained jurisdiction over the Defendants’ remaining claim for attorneys’ fees.

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July 31, 2012

Judge Andrews clarifies “futility” in connection with motion to amend pleadings.

In a recent order, Judge Andrews rejected a plaintiff’s argument against amendment of an answer and counterclaims. XpertUniverse Inc. v. Cisco Systems Inc., C.A. No. 09-157-RGA (D. Del. July 27, 2012). The plaintiff had argued that “the amended portions of Cisco’s Proposed Answer and Counterclaims are unlikely to survive summary judgment. Thus, Cisco’s proposed amendment is futile…” (D.I. 236 at 8) The Court explained that even accepting the argument that the amended portions of the answer and counterclaims likely would not survive summary judgment, “it is not the same thing as stating that amendment would be futile. Thus, Plaintiff has advanced no valid argument against amendment.”

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July 30, 2012

Judge Andrews applies the America Invents Act and severs cases against computer manufacturers

Judge Richard G. Andrews recently considered motions to sever and transfer which raised the issue of whether the court should apply the joinder rule of Federal Rule 20(a) or that of the America Invents Act, 35 U.S.C. §299. IPVenture, Inc. v. Acer, Inc., et al., C.A. No. 11-588-RGA (D. Del. July 24, 2012). Judge Andrews decided that §299 applies, but that the result would have been the same under Rule 20 as well. Severance was appropriate because plaintiff’s “allegations of commonality [we]re painted with a broad brush and appear[ed] to be inconsequential to the critical patent issues.” Id. at 3-4. The allegations related to joinder included “that the accused computers include ‘common components’ such as [Intel microprocessors, ... cooling fans, operating systems (such as Microsoft Windows ...), [and] embedded controllers.” Id. at 4 (alterations in original). Judge Andrews pointed out that just because “computers generally have the same components and the same functionalities does not mean that they are ‘the same in respects to the patent.’” Id. Therefore, the “claims of infringement against the defendants’ products d[id] not share an aggregate of operative facts.” Id. Judge Andrews also noted that the defendants’ relationship to each other – that is, that they are all direct competitors – “significantly counsel[ed] against their joinder in the same case. Id. at 4-5.

Judge Andrews also granted defendant ASUS’s motion to transfer to the Northern District of California. Plaintiff was a California corporation with a principal place of business in the Northern District. Therefore, Judge Andrews noted that while plaintiff’s choice of forum weighs strongly in plaintiff’s favor, it weighs “not as strongly as if would if plaintiff had its principal place of business (or, indeed, any place of business) in Delaware. Id.at 6-7. After weighing all factors, Judge Andrews found that “little beyond plaintiff’s choice of forum” weighed against transfer. Id. at 11.

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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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