July 3, 2012

Judge Burke declines to modify Court's form langage in scheduling order regarding location of corporate depositions

In Invensas Corporation v. Renesas Electronics Corporation, C.A. No. 11-448-GMS-CJB (D. Del. June 27, 2012), Judge Burke recently considered defendant's request to modify the general default standard in the Court's scheduling order regarding the location of depositions of party representatives in Delaware, unless the Court makes an exception. Id. at 1-2. The form scheduling order for Judges Stark, Andrews, Burke and Fallon contain the following language regarding the location of depositions:

"Any party or representative (officer, director, or managing agent) of a party filing a civil action in this district court must ordinarily be required, upon request, to submit to a deposition at a place designated within this district. Exceptions to this general rule may be made by order of the Court. A defendant who becomes a counterclaimant, cross-claimant, or third-party plaintiff shall be considered as having filed an action in this Court for the purpose of this provision." Id. at 1-2.

When submitting the scheduling order, the parties disputed whether the default provision should apply and Judge Burke permitted supplemental briefing on the issue. Defendant, whose principal place of business is in Japan, asked the Court to eliminate this standard language and instead require corporate depositions take place at the party's principal place of business (i.e., Japan). Id. at 2. Judge Burke declined to modify the Court's form language in the scheduling order, finding that defendant "ma[de] the general assertion that it would be burdensome for its employees to travel to the United States for corporate depositions, but ha[d] not made a particularlize showing as to how this would be the case." Id. at 6. Defendant's request was "non-specific and premature" because, "[a]t this early stage of the case, topics for corporate depositions have not been noticed, nor have specific witnesses . . . been identified[,]" such that the court could know the impact travelling to the United States would have on one or more witnesses. Id.

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July 3, 2012

Judge Sleet Refuses to Alter Discovery Sanctions

In a multidistrict patent infringement case concerning plaintiff Cephalon’s armodafinil drug, Chief Judge Sleet entered an order, precluding Cephalon from relying upon any secondary considerations of non-obviousness due to Cephalon’s late production of documents. Judge Sleet, however, left Cephalon with the opportunity to later argue that it could rely on certain documents if they had been timely produced and would not prejudice the defendants. Cephalon subsequently filed a motion to narrow Judge Sleet’s order to allow reliance on “non-commercial” secondary considerations. In re Armodafinil Patent Litigation, C.A. No. 10-md-2200-GMS, at 1 (D. Del. June 26, 2012).

Cephalon argued that the defendants would not be prejudiced by allowing it to rely on the secondary considerations of copying and long-felt-need because all documents it sought to rely on were timely identified. The Court found, however, that the defendants were prejudiced by having been denied the opportunity to conduct full discovery on issues raised by late-produced documents. Because “[o]bviousness is determined in light of all the circumstances surrounding the alleged invention . . . even if Cephalon timely-produced some documents related to some secondary considerations, the defendants remain prejudiced because the late-produced documents may contain relevant information that the defendants could have relied upon to rebut the timely-produced materials.” Id. at 2 n.3. “It would be inherently unfair,” Judge Sleet wrote, “to give Cephalon the unfair advantage of being able to rely upon cherry-picked secondary considerations of long-felt need and copying, while those documents potentially unfavorable to its position remain buried within its late production to the defendants.” Id.

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July 3, 2012

Judge Andrews denies motion for attorneys’ fees, finding no showing of subjective bad faith.

Judge Andrews recently considered whether to award attorneys’ fees under 35 U.S.C. § 285 to a defendant in a case where “the overall picture that is presented is that the Plaintiff’s strategy was to file suits against a large number of defendants, and, due to the huge expenses inherent in patent litigation, force nuisance value settlements.” Commonwealth Research Group LLC v. Lattice Semiconductor Corp., C.A. No. 11-655-RGA (D. Del. June 28, 2012). The defendant argued that the case was "exceptional" due to the plaintiff’s insufficient pre-suit investigation, as well as the plaintiff's delay in dismissing the suit, which resulted in the defendant unnecessarily expending time and resources on claim construction. Id. Although the plaintiff also prepared a claim construction brief, the Court “charitably described” it as “a very modest effort.” Id. at 2. In considering the plaintiff’s pre-suit investigation, the Court noted that a detailed infringement analysis had been conducted by the plaintiff, but the plaintiff had not reverse engineered the defendant’s product even though the product, itself, was inexpensive to purchase. Id. at 4, 6. The Court explained, “I am not sure whether such reverse engineering would have made [plaintiff’s] suit any more or less meritorious in its eyes. I do not think that doing reverse engineering is required, even if, as [the defendant] asserts, its product could have easily been purchased for $100.” Id. at 6 (footnote omitted). With regard to the defendant’s claim construction efforts, the Court found that the plaintiff acted “fairly promptly” to dismiss the case upon learning of the defendant’s strong indefiniteness positions, but that the case was not promptly dismissed at least partially because the defendant was seeking from the plaintiff compensation for its defense costs. Id. at 4. Overall, the Court explained, “I do not find that [the defendant] has shown, by either of its arguments, ‘subjective bad faith,’ and I will deny [the defendant’s] motion.” Id. at 6.

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June 29, 2012

Judge Andrews grants motions to dismiss claims of indirect infringement and willfulness

In IPVenture Inc. v. Lenovo Group Limited, et al., C.A. No. 11-588-RGA (D. Del. June 29, 2012), Judge Andrews recently dismissed plaintiff's claims of indirect infringement and willfulness. Citing the Federal Circuit's recent decision in In re Bill of Lading (write up on this opinion by Dennis Crouch at Patently-O), Judge Andrews found that plaintiff's "minimal allegations" of direct infringement were all that was required to satisfy Form 18. Id. at 3. Plaintiff's indirect infringement allegations, however, did not pass muster. For example, "there [was] no allegation that defendant knew about the existence of the '599 patent"; and there was no factual support to infer that defendant knew any induced acts constituted patent infringement. Id. Regarding willfulness, although general allegations may suffice, plaintiff pled no facts describing events occurring after the patent issued. Id. at 3-4. "At most, the factual allegations plausibly support the conclusion that both the Plaintiff and Dell had patents in the thermal power and management field[.]" Id. at 4. For similar reasons, Judge Andrews dismissed plaintiff's claims of indirect infringement and willfulness for most of the remaining defendants.

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June 29, 2012

Judge Andrews dismisses inequitable conduct counterclaims

In a recent memorandum opinion, Judge Andrews considered the sufficiency of a defendant's defensive pleadings, and most notably dismissed inequitable conduct counterclaims for failure to sufficiently plead the “who” and “when” of the alleged misconduct. XpertUniverse, Inc. v. Cisco Systems, Inc., C.A. No. 09-157-RGA (D. Del. June 19, 2012). The Court explained, “[i]n order to adequately plead inequitable conduct, the claimant must ‘recite[] facts from which the court may reasonably infer that a specific individual both knew of invalidating information that was withheld from the PTO and withheld that information with a specific intent to deceive the PTO.’” Id. at 4 (quoting Delano Farms Co. v. Ca. Table Grape Comm’n, 655 F.3d 1337, 1350 (Fed. Cir. 2011)). Cisco’s allegations included repeated references to one individual, Zelkin, whom Cisco labeled “an officer or employee of XU during prosecution”. Id. at 4. Each reference to this officer or employee was further qualified by the inclusion of the language “or one or more of the other individuals listed as an inventor”. Id. at 4-6. The Court explained, “Cisco’s allegations that Zelkin was an XU ‘officer or employee’ and that he ‘knew or should have known’ of the prior sales and prior art fall short of concretely alleging that he actually knew of the invalidating information.” Id. at 6. Further, the Court added, “[t]hese scant allegations are further diluted by the qualifiers that either Zelkin, or ‘one or more’ of the other inventors, knew about the prior sales and art and their materiality – affording the possibility that Zelkin, the only specific individual named, did not know about them at all.” Id. Cisco was given seven days to amend its pleadings to the extent possible to sufficiently allege inequitable conduct. Id. at 14.

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June 27, 2012

Special Master Denies Plaintiff’s Motion to Permit Corporate Representatives Access to Defendants’ “Attorneys’ Eyes Only” Information

In Apeldyn Corp. v. AU Optronics Corp., et al., C.A. No. 08-568-SLR (D. Del. June 13, 2012), the Special Master recently issued a Report and Recommendation recommending that plaintiff’s motion to modify the protective order to permit plaintiff’s corporate representatives to have access to information designated Attorneys’ Eyes Only be denied. Id. at 1. In the motion, plaintiff sought modification of the protective order to permit two of its corporate representatives access to “CONFIDENTIAL – ATTORNEY’S EYES ONLY” information relating to defendants’ motions for summary judgment of non-infringement. Id. at 3. Plaintiff argued that such access was necessary for, among other reasons, its corporate representatives to: (1) “assist fully in the preparation of the briefs in the appeal of summary judgment”; (2) “manage outside litigation counsel”; and (3) “assist with the case as it progresses.” Id. at 3. The Special Master disagreed. In its analysis, the Special Master cited and applied the 3d Cir.’s decision in Pansy v. Borough of Stroudsburg, 23 F.3d 772, 790 (3d Cir. 1994) for determining whether modification of the protective order was warranted. Id. at 4. In applying the Pansy test, the Special Master concluded that permitting disclosure of defendants’ attorneys’ eyes only information to plaintiff’s corporate representatives would not “promote fairness and efficiency” in this case and was “outweighed” by the injury to the defendants that might result from such disclosure. Id. at 8, 12. The Special Master also concluded that plaintiff’s need for the information and plaintiff's stated reasons for modification of the protective order did not outweigh and were insufficient to overcome the “risk of inadvertent disclosure of Defendants’ Attorneys’ Eyes Only information to third parties which might result in competitive harm to Defendants.” Id. at 16.

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June 27, 2012

Judge Robinson: Summary Judgment of Non-Infringement for Boston Scientific

With a July trial looming in the ongoing “stent wars” between Johnson and Johnson affiliate Cordis and Boston Scientific, Judge Robinson recently granted summary judgment of non-infringement to Boston Scientific. Cordis Corp. v. Boston Scientific Corp., C.A. No. 10-39-SLR (D. Del. June 19, 2012).

The Court construed the claim terms in question in accordance a previous finding that Boston Scientific did not infringe related patents with similar claim terms, which was affirmed by the Federal Circuit. The Court then granted Boston Scientific’s motion for summary judgment on the grounds that Cordis could not “show that the . . . stent meets the ‘undulating’ or ‘circumferentially extending turn back portion’ limitations of the asserted patents” under a construction consistent with the Federal Circuit’s opinion. Id. at 26.

Boston Scientific also moved for summary judgment that Cordis’s patent rights were exhausted because Cordis licensed the use of its patents to Abbott Laboratories, and Abbott’s subsequent sales of stents to Boston Scientific for resale were authorized. Resolution of this issue depended on interpretation of the terms “merger” and “consolidation” in the license agreement between Cordis and Abbott, which provided that Cordis could terminate the license if Abbott was involved in a merger or consolidation with a “major competitor.” Abbott subsequently acquired ACS, a division of Guidant. Although ACS was a major competitor under the license agreement, the Court applied the Delaware statutory definition of the terms “merger” and “consolidation” and found that no such merger or consolidation had occurred between Abbott and ACS. Id. at 17. The Court, therefore, also granted Boston Scientific’s motion for summary judgment on the grounds of patent exhaustion, finding that Abbott’s rights to the patents had not been extinguished and Abbott was authorized to sell the stents to Boston Scientific.

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June 26, 2012

Judge Robinson denies motion for preliminary injunction

Judge Robinson recently denied a motion for a preliminary injunction, finding that the proper construction of a disputed claim term rendered the plaintiff unlikely to prevail on its infringement claim, and finding further that the defendant raised a substantial question concerning validity. Butamax Advanced Biofuels LLC v. Gevo, Inc., C.A. No. 11-54-SLR (D. Del. June 19, 2012). The Court rejected the plaintiff’s argument that the disputed term “acetohydroxy acid isomeroreductase” should be given its plain and ordinary meaning, and instead construed the term consistently with the narrower definition given to it in the definitions section of the patent. Id. at 10. In light of that construction, the Court explained that the plaintiff likely could not prove infringement at trial. Id. at 12. Further, the Court explained that to obtain a preliminary injunction, “the patentee must demonstrate that a defendant’s invalidity defense ‘lacks substantial merit.’” Id. at 17-18 (quoting Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350-51 (Fed. Cir. 2001)). The Court explained, “the fact that the ‘889 patent has been rejected on reexamination, combined with the finding by the court that plaintiff’s likely claim construction is too narrow, demonstrate that defendant’s invalidity defenses do not lack substantial merit.” Id. at 20. The Court issued another opinion in this case two days later addressing various motions.

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June 25, 2012

Judge Robinson: Counterclaims and Inequitable Conduct Claims Allowed to Proceed

Judge Robinson recently considered various motions related to counterclaims in Butamax Advanced Biofuels LLC v. Gevo, Inc., C.A. No. 11-54-SLR (D. Del. June 21, 2012). She first denied Butamax’s motion for judgment of non-infringement on the pleadings, declining “to tackle the issues of claim construction and infringement without the benefit of any introductions to the technology or to the accused ‘product’ but for Butamax’s assertions regarding same. If, however, there are a limited number of critical claim limitations, the court would entertain a course of focused discovery in order to encourage an expedited resolution of the counterclaims.” Id. at 2-3.

Judge Robinson also granted Butamax’s motion to sever counterclaims and try them separately, id. at 3, and Butamax’s motion to amend the pleadings to add allegations of inequitable conduct. She rejected Gevo’s argument that the amendments were intended “to delay the adjudication of Gevo’s counterclaims” and found that Butamax had pled inequitable conduct with sufficient particularly and that its allegations were not futile. Because the “proposed amendment satisfies the . . . pleading standard by identifying the ‘who,’ the ‘what,’ the ‘when,’ the ‘where,’ and the ‘how,’” Judge Robinson allowed the amendment. Id. at 4-6.

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June 25, 2012

Judge Robinson precludes presentation of willfulness evidence in damages phase of case.

In a recent memorandum order, Judge Robinson rejected the plaintiff’s efforts to present willfulness evidence in the damages phase of trial. IGT v. Bally Gaming Int’l, Inc., et al., C.A. No. 06-282-SLR (D. Del. June 20, 2012). Inconsistently with Judge Robinson’s typical practice, the plaintiff had requested that it be permitted to try willfulness during the liability phase of the case. The Court permitted the plaintiff to do that, but, thereafter, the plaintiff failed to include any information about its willfulness allegations in its interrogatory responses, and the parties engaged in no discovery regarding willfulness at any time. Id. at 1-2. After the Court’s summary judgment rulings largely disposed of the liability phase of the case, the plaintiff sought to present willfulness evidence in the damages phase. Judge Robinson explained, “Plaintiff, over defendants’ objection, requested permission to pursue the issue of willfulness during the liability phase of the case. Although the court generally separates the resolution of liability from the resolution of willfulness and damages, the court granted plaintiff’s request. Plaintiff never brought up the issue of willfulness again until the April 2009 pretrial order. In seeking a second opportunity to pursue its willfulness claim, plaintiff is requesting a second bite at the apple. The court is not inclined to make two exceptions for plaintiff.” Id. at 3.

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