In a recent ANDA case, following full post-trial briefing and in light of the approaching expiration of the 30-month stay, Judge Stark issued a sua sponte order enjoining the defendant from launching its generic product until the Court issues its opinion in the case. Galderma Labs, L.P. v. Tolmar, Inc., C.A. No. 10-45-LPS (D. Del. June 4, 2012).
Judge Burke Recommends That Patent Infringement Case be Transferred to the Northern District of California Under the “First-Filed Rule”
In Fuisz Pharma LLC v. Theranos, Inc., C.A. No. 11-1061-SLR-CJB (D. Del. May 18, 2012), Magistrate Judge Burke recently issued a Report and Recommendation, recommending that defendant’s motion to dismiss, stay, or transfer be granted in part, and that the case be transferred to the Northern District of California pursuant to the first-filed rule. Id. at 1. On October 26, 2011, Theranos, Inc. (“Theranos”), a Delaware corporation with its principal place of business in Palo Alto, California, originally brought suit in the Northern District of California (the “California Action”) against Fuisz Technologies, Ltd. and several members of the Fuisz family for inventorship claims under the Patent Act and state law claims alleging that the Fuisz defendants’ misappropriated Theranos’ confidential information and used that information to improperly obtain U.S. Patent No. 7,824,612 (the “’612 patent”). Id. at 2. On October 27, 2011, the same day that they were served with the original Complaint filed in the California Action, two of the individual Fuisz defendants named in the California Action assigned certain rights to the ‘612 patent to Fuisz Pharma LLC (“Fuisz Pharma”), a Delaware limited liability company with its principal place of business in Bay Harbor Islands, Florida. Id. at 3. Fuisz Pharma then filed the instant suit on November 1, 2011 in D. Del. (the “Delaware Action”) against Theranos for infringement of the ‘612 patent. Id. at 3. In response to being sued here in Delaware, Theranos filed a motion seeking to have the Delaware action dismissed, transferred to the N.D. Cal., or stayed pending resolution of the California Action, on the grounds that the California Action is the “first-filed” action. Id. at 3. Theranos argued that its motion should be granted pursuant to the first-filed rule “because it filed the California Action prior to Fuisz Pharma’s filing of the instant litigation [in Delaware], and because the California Action involves the same parties and subject matter as this action.” Id. at 7. In its opposition, Fuisz Pharma countered that the first-filed rule did not apply “because the California Action does not involve the same issues and/or the same parties as this infringement litigation [in Delaware].” Id. at 8. More specifically, Fuisz Pharma argued that the two cases are “distinctly different” because the Delaware Action is a “straight forward patent infringement action,” while in the California Action there are “other legal claims at issue.” Id. at 8.
The Court sided with Theranos, concluding that the “first-filed” rule did apply, the California action was, indeed, the “first-filed” action, and that the Jumara factors favored transfer of the Delaware Action to the N.D. Cal. Id. at 8, 35. The Court noted that: (a) “all of the parties in this action are parties to the California Action”; (b) “both cases involve . . . the ‘612 patent”; (c) the claims in both suits “stem, to a very great degree, from the same subject matter and same nucleus of operative facts,” and that (d) “if both actions were allowed to proceed simultaneously, there would be substantial risk of inconsistent judgments.” Id. at 8-14. The Court further noted that the first-filed rule has been applied in patent cases, even where the cases are not so-called “mirror image” cases, provided that the “same common subject matter exists among the two cases.” Id. at 12 (citations and quotations omitted). As part of its analysis of the Third Circuit’s Jumara factors, the Court also noted that the “existence of the first-filed California Action has a significant impact on the balancing of the public and private interests in the case” and that “the balance of those factors weigh strongly in favor of transfer.” Id. at 34.
In Tarkus Imaging, Inc. v. Adobe Systems, Inc., et al., C.A. No. 10-063-LPS (D. Del. May 11, 2012), Judge Stark issued a Memorandum Opinion and Order construing the claim terms of U.S. Patent No. 6,628,823 at issue in the case as follows:
- “original image” means “the image data and other data pertaining to the image prior to performing the claimed processing steps”
- “original” means “two-dimensional object (such as a print, negative, or transparency, artwork, or reproduction defined by an image file)”
- “density capabilities” means “assumed or measurable density values that an assumed or actual output device is capable of producing”
- “density” means “the negative logarithm of reflectance, transmittance, or luminance factor”
- “output device” means “a physical or assumed device used to produce or define a reproduction”
- “pictorial dynamic range” means “the range from the value representing the edge of detail in black to the value representing the edge of detail in white”
- “tone reproduction curve” means “the relationship between the tonal values of an original image and the tonal values of an intended reproduction”
- “tone” means “lightness or brightness of an element in a scene or image”
- “color space values” means “the number or combination of numbers used to represent colors”
- “initial color space values of a scene” means “a number of combination of numbers determined by a capture device to represent colors in a scene (e.g., camera raw or scene referred image data)”
- “capture device” means “a device (e.g., a camera, scanner, or computer) capable of acquiring an image of a scene or original”
- “estimating a key of the original image” means “estimating whether an original image, as a whole, is bring or dark”
- “standard output device” means “a representative real or assumed device having defined associated color space values that are commonly used in image files”
- “applying an S-shaped flex adjustment” means “changing the amount of shaped of a curve”
- “applying a shift adjustment” means “changing the bow (e.g., convexity or concavity of a curve)”
- “scene” means “a real-world view”
- “focal plane image” means “an image formed on a sensor of a capture device”
- “Image file” means “a file containing image data and optionally data pertaining to the image”
Judge Stark transfers cases to Northern District of California where a related case is currently pending
In Optimum Power Solutions LLC v. Hewlett-Packard Co., et al., C.A. Nos. 11-853, 854, 855, 856 (D. Del. May 25, 2012), Judge Stark recently considered motions to transfer four related cases filed by plaintiff Optimum to the Northern District of California. Plaintiff had previously filed a case against three of four of the instant defendants, among others, in the Eastern District of Texas. That court concluded that transfer to the Northern District of California was appropriate. Id. at 1. After the transfer, the plaintiff moved the California court to amend its complaint to add more defendants, and the original defendants moved to dismiss. Id. at 3. The court “denied Plaintiff’s motion, granted defendants’ motion, and dismissed without prejudice each defendant other than Apple [, apparently envisioning] that Plaintiff would then re-file individual actions against each defendant in the Northern District, actions which might then be coordinated. Instead, Plaintiff chose to initiate suit against four defendants here (and others elsewhere).” Id. at 3-4. Judge Stark concluded that these circumstances weighed in favor of transfer and granted defendants pending motions. Id. at 4.
In a recent memorandum opinion, Judge Andrews granted a motion filed by defendant SAS Institute to sever based on improper joinder, but denied SAS’s motion to transfer the case to its home forum in the Eastern District of North Carolina. Investpic, LLC v. SAS Institute, Inc., C.A. No. 10-1028-RGA (D. Del. May 15, 2012). Investpic filed suit in November 2010 against 15 defendants, including SAS. Applying the Federal Circuit’s standard for improper joinder, the Court severed SAS’s case, finding that “[t]here is no allegation in the complaint that alleges any connection between SAS and any other defendant, or between SAS’s products and any other defendant’s products.” Id. at 3.
The bulk of the Court’s opinion was dedicated to SAS’s motion to transfer, analyzing each of the factors laid out by the Third Circuit in Jumara v. State Farm Ins. Co., 55 F.3d 873, 879-80 (3d Cir. 1995). In the process, Judge Andrews distinguished the Federal Circuit’s decision in In re Link_A_Media Devices Corp., 662 F.3d 1221 (Fed. Cir. 2011) (discussed here previously), explaining, “I would characterize that case generally as standing for the proposition that when the parties, all the witnesses, and all the evidence are in one distant jurisdiction, and the only connection to Delaware is that it is the state of incorporation of the defendant, and there is no other reason for the suit to be in Delaware, the suit must be transferred, upon timely request, to the distant jurisdiction.” Id. at 11. Judge Andrews explained that the situation in the case at bar was markedly different than that in Link_A_Media, primarily because Investpic and its patent (through previous owners) had a long-standing connection to Delaware, were located closer to Delaware than North Carolina, and because sales of SAS’s accused products took place in Delaware. “[W]hen the plaintiff is a small corporation with Delaware as its long-standing corporate home (as I consider the plaintiff to be . . .), and the defendant is a national company of [SAS’s] size, see Intellectual Ventures I LLC v. Altera Corp., 2012 WL 297720, *3 (D. Del. Jan. 24, 2012) (multi-billion dollar companies doing business on an international scale have a greater burden to meet in seeking transfer), there ought to be a compelling reason to overcome plaintiff’s choice of forum.” Id. Although SAS provided a number of valid reasons supporting its motion, the Court found that the overall balance of the Jumara factors did not support a transfer.
In the ongoing litigation between Mylan Pharmaceuticals and Galderma Laboratories over the branded product Oracea, Judge Stark has issued an opinion on remedies for Mylan’s infringement of one patent covering that drug. Judge Stark had previously found after a bench trial that Mylan infringed a patent—the Chang Patent—that was added to the Orange Book after Mylan’s generic product had received FDA approval. Consequently, Mylan’s ANDA did not include a Paragraph IV certification for the Chang Patent. In the recent remedies opinion, Judge Stark ordered a permanent injunction against any drug described in Mylan’s ANDA until the expiration of the Chang Patent. He also ordered the FDA to withdraw approval of Mylan’s ANDA and delay the effective date of approval to no earlier than December 19, 2027, the expiration date of the Chang Patent. The Research Foundation of State University of New York v. Mylan Pharmaceuticals Inc., C.A. No. 09-184-LPS, at 3 (D. Del. May 18, 2012).
After considering remedies briefing from the parties, Judge Stark rejected Mylan’s argument that 35 U.S.C. § 271(e)(4)(A) did not entitle Galderma to a change in the effective date of Mylan’s ANDA because Mylan had not filed a Paragraph IV certification for the patent which Mylan was found to infringe. The Court found that “a Paragraph IV certification against the Chang Patent was not required for Galderma to bring suit under Section 271(e)(2).” Id. at 9. Judge Stark cited the Federal Circuit’s recent decision in AstraZeneca Pharmaceuticals LP v. Apotex Corp., 669 F.3d 1370 (Fed. Cir. 2012) that a Paragraph IV certification was not required for subject matter jurisdiction over a patentee’s Section 271(e)(2) claims. Because Galderma had alleged that Mylan’s ANDA filing infringed the Chang Patent, the Court had subject matter jurisdiction over the infringement claim despite the lack of a Paragraph IV certification for that patent. As Judge Stark stated, a Paragraph IV certification is not a “necessary predicate” to an infringement claim under §271(e)(2)(A). Id. at 7-10.
In AstraZeneca, however, the plaintiffs failed to state a viable Section 271(e)(2) claim because the defendant generic manufacturer had carved out patented methods of treatment from their ANDA. By contrast, Mylan’s ANDA product was directly covered by the Chang patent and therefore infringed the Chang Patent under Section 271(e)(2). Accordingly, “because Galderma properly invoked the Court’s subject matter jurisdiction, stated a claim pursuant to Section 271(e)(2), and ultimately prevailed on the merits at trial, the Court . . . grant[ed] Galderma’s request for [an order that the FDA delay approval of the ANDA] under Section 271(e)(4)(A).” Id. at 9-10.
In a recent claim construction order, Chief Judge Sleet construed the following claims from two patents relating to plaintiff Stiefel Laboratories, Inc.’s OLUX-E® (clobetasol propionate) Foam, 0.05%:
“an amount sufficient to form an occlusive layer on the skin, in use”
“an amount up to 50% by weight, based on the total weight of the composition”
Stiefel Laboratories, Inc. v. Perrigo Israel Pharmaceuticals Ltd., C.A. No. 10-592-GMS (D. Del. May 11, 2012).
Judge Stark recently issued a Markman opinion in Bristol-Myers Squibb Co. v. Mylan Pharmaceuticals Inc., C.A. No. 09-651-LPS (D. Del. May 16, 2012). The Court construed the following claim terms of patents related to the reverse transcriptase inhibitor, Efavirenz:
- “Form 1,” “Form 2,” and “Form 4”
- “Form I,” “Form II,” and “Form III”
- “Characterized by”
- “Comprising 4 (or 6) or more 2θ values selected from the group consisting of”
- “Characterized by a differential scanning calorimetry thermogram having a peak at about 108° C to about 110° C”
- “Form 5”
- “No detectable peaks”
Judge Stark noted that “the parties’ respective positions [on several disputed terms] reveal underlying factual disputes that should be resolved at trial rather than as part of claim construction.” While construing the terms in question, he found that there were several “matters on which the Court will need to receive testimony. Therefore, the Court will reserve judgment on these questions and the ultimate indefiniteness determination for trial.” Id. at 14. Judge Stark also refused to consider Plaintiff’s attempted modification after the Markman hearing of “their originally proposed construction to conform with the Court’s previous constructions of similar ‘Form’ terms in a separate case involving different patents. . . . In view of Defendants’ objections, as well as Plaintiffs’ representations that their proposal ‘does not change the claim scope’ the Court will not consider Plaintiffs’ modified proposal.” Id. at 8 n.2.
Magistrate Judge Burke denies Rule 60 motion to strike expert report based on newly discovered evidence purported to show bad faith delay in serving it.
Magistrate Judge Burke recently denied a Rule 60 motion filed by Sandoz to strike Wyeth’s microbiology expert report served after the expert report deadline. Wyeth Holdings Corp., et al., v. Sandoz, Inc., C.A. No. 09-955-RGA-CJB (D. Del. May 10, 2012). Earlier in the litigation, Sandoz had moved to strike the same expert report, arguing that Wyeth withheld it in bad faith until after the deadline for expert reports with the goal of springing it on Sandoz late in the litigation. Id. at 4. In response to Sandoz’s earlier motion, Wyeth argued that it had not planned to serve a microbiology expert report at all until it received a microbiology expert report from Sandoz. Id. Ruling on Sandoz’s earlier motion to strike, the Court found no evidence of bad faith conduct by Wyeth, but struck a number of paragraphs that were not directly responsive to issues raised for the first time in Sandoz’s report. Id. at 2, 4.
Sandoz later filed a motion to strike the same expert report, this time under Rule 60 and on the theory that newly discovered evidence obtained during the deposition of Wyeth’s microbiology expert undercut Wyeth’s previous claim that it did not intend to serve a microbiology report until it received one from Sandoz. Id. at 3-4. Specifically, Sandoz learned during the deposition that—contrary to Wyeth’s prior representations that it did not even contact its microbiology expert until after it received Sandoz’s microbiology report—Wyeth actually had retained its microbiology expert many months prior to the expert phase of the litigation. Id. at 4.
Addressing the motion at issue, the Court explained that Sandoz carried a heavy burden of showing that the newly discovered evidence “(1) is material and not merely cumulative . . .; (2) could not have been discovered [previously] through the exercise of reasonable diligence; and (3) would probably have changed the [previous] outcome.” Id. at 2-3. The Court added that Sandoz’s burden was higher still because the exclusion of critical evidence is “an extreme sanction” “not normally to be imposed absent a showing of willful deception or flagrant disregard of a court order . . .” Id. (quoting In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 791-92 (3d Cir. 1994)).
The Court explained that there was no dispute that the evidence discovered during the deposition of Wyeth’s microbiology expert was not cumulative of evidence previously known to the Court and Sandoz, satisfying the first prong of the Rule 60 analysis. Id. at 5. The Court found, however, that Sandoz could not satisfy the second prong because Sandoz could have, through the exercise of reasonable diligence, learned when Wyeth retained its expert if that information was truly critical to the first motion to strike. Id. at 5-6. Finally, the Court found that even had it known of the newly discovered evidence during the first motion briefing, it probably would not have changed the outcome of that motion—although the new evidence might change one of the five Pennypack factors (bad faith), it would not change the remaining four factors. Id. at 6 (referring to Myers v. Pennypack Woods Home Ownership Ass’n, 559 F.2d 894, 904-05 (3d Cir. 1977)). The Court explained that even assuming the “bad faith” Pennypack factor would change based on the new evidence, the overall balance of the Pennypack factors would not shift far enough to justify the exclusion of Wyeth’s expert report. Id. at 7. Moreover, the Court added that the new evidence regarding when Wyeth “retained” its microbiology expert would not have altered its previous conclusion because the relevant issue was not how early the expert was retained, but instead was how early Wyeth planned to serve an expert report from him. Id. at 8-9. The new evidence did not shed any light on that question. Id.
Judge Robinson Denies Several Motions to Dismiss but Indicates that She Might Consider Early Claim Construction
Judge Robinson recently issued a memorandum order in Cyberphone Systems, LLC v. Cellco Partnership, et al., C.A. Nos. 11-827-SLR through 11-835-SLR (D. Del. Apr. 30, 2012), denying various motions of certain defendants to dismiss the claims against them. Among these were motions based on the argument that, although CyberFone filed its complaints on the day before the America Invents Act took effect, these pre-AIA complaints violated Federal Rule of Civil Procedure 20 because they did not “allege joint infringement, or any relationships or common activities among the individual defendants.” Id. at 2. Judge Robinson initially noted that “severance, not dismissal, is the correct remedy for misjoinder.” She then refused to exercise her discretion to sever the claims. Id. at 2-3. Similarly, she refused to sever claims against cellular carriers from claims against cellular handset manufacturers based on the customer suit exception. Id. at 3-4.
Judge Robinson also denied several motions to dismiss “improper” infringement allegations, finding that they complied with Form 18, and denied several motions to dismiss that related to the adequacy of CyberFone’s direct infringement allegations. She stated: “[t]he court is not prepared to engage in the claim construction exercise at this stage of the proceedings, with no context whatsoever provided by discovery or a motion practice.” Id. at 4. “The court will discuss with the parties, however, the need for an early claim construction of dispositive limitations, once a full and fair exchange of fundamental documents has been accomplished.” Id. at 4 n.6.
Finally, Judge Robinson reaffirmed her recent decision in Walker Digital that “a defendant’s receipt of the complaint and decision to continue its conduct despite the knowledge gleaned from the complaint satisfies the requirements of Global-Tech [that the defendant have knowledge of the patent].” On this basis, she refused to dismiss various claims of indirect infringement. Id. at 6.