April 27, 2012

The District of Delaware gets third Magistrate Judge

On April 25, 2012, the Honorable Sherry R. Fallon was sworn in as a United States Magistrate Judge, joining Magistrate Judges Thynge and Burke. Prior to this appointment, Judge Fallon was a partner at Tybout, Redfearn & Pell specializing in insurance defense, insurance coverage and bad faith litigation, toxic tort, product liability, retailers' premises liability, construction litigation, creditors' claims in commercial bankruptcies, and defense of employment litigation claims. Click here for Judge Fallon's Web page.

April 26, 2012

Judge Robinson Finds Personal Jurisdiction over Nevada Defendants, but Orders Transfer

Judge Robinson recently considered motions for a preliminary injunction, to dismiss, and to transfer in a Lanham Act case with colorful facts.  Capriotti’s Sandwich Shop, Inc. v. Taylor Family Holdings, Inc., C.A. No. 12-28-SLR (D. Del. Apr. 25, 2012).  The case involves Capriotti’s, a Nevada corporation with franchised locations primarily in Delaware and Nevada.

Judge Robinson first determined that the defendant, Taylor Family Holdings, was amenable to jurisdiction and venue in the District of Delaware.  TFH had initiated a second case in the Delaware Court of Chancery against Capriotti’s after Capriotti’s filed its complaint and motion for a preliminary injunction in the District Court.  The Chancery litigation was stayed pending the outcome of the District Court litigation, and TFH moved to dismiss for lack of jurisdiction.  Judge Robinson found that on these facts and consistent with various authority, “by filing the suit in the Delaware Court of Chancery, defendants at bar have waived jurisdictional defenses and consented to the jurisdiction of this court.  Defendants ‘can claim no unfairness based upon this court’s exercise of jurisdiction over [them], since one who enjoys the full benefits of access to a forum’s courts as plaintiff may not simultaneously claim immunity from that forum's authority as defendant.’”  Id. at 15-18 (citing Marron v. Whitney Group, 662 F. Supp. 2d 198 (D. Mass. 2009)).

Judge Robinson also heard testimony in support of the motion for a preliminary injunction and determined that a key witness was in Nevada and had not testified in Delaware.  Because of this witness’s absence from the Delaware litigation, Judge Robinson refused to grant a preliminary injunction.  Id. at 19-20.  She also determined that the case was one where “the reasons to transfer strongly favor defendant,” and ordered transfer to the District of Nevada.  Although Delaware was a legitimate venue, the dispute regarding the injunction “arose in Nevada between two Nevada-based businesses and only a Nevada court can exercise personal jurisdiction over critical fact witnesses.”  Id. at 20-21.

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April 25, 2012

Judge Robinson denies motion to stay pending appeal of PTO's rejection of claims on reexamination

Judge Robinson denied today a motion for separate trials on two asserted patents, and for a stay as to one of those patents pending the outcome of an appeal to the Board of Patent Appeals and Interferences (“the Board”). Leo Pharma A/S v. Tolmar, Inc., Civ. No. 10-269-SLR (D. Del. Apr. 25, 2012). In this ANDA case, the plaintiff appealed to the Board the PTO’s rejection of all asserted claims of the ‘013 patent, and represented to the Court that if the Board upheld the PTO’s rejection, an appeal to the Federal Circuit would follow. The defendant argued that the plaintiff’s true motive for the “eleventh hour” motion (discovery was completed and trial was to begin in about two months) was improperly to prolong the 30 month stay under the Hatch-Waxman Act and, further, that the resources of both the Court and the parties would be wasted if separate trials were held on the related patents. The plaintiff, for its part, countered that denying the motion to stay would result in wasted resources because the outcome of the Board appeal (which would post-date the end of trial) likely would narrow the asserted claims tried to the Court. Judge Robinson denied the motion, and explained, “[b]ecause this is a bench trial, the evidence and arguments presented by the parties can be supplemented if need be. Since neither party is willing to abide by the decision of any forum other than the Federal Circuit, this court will do what it is supposed to do, try the case.”

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April 25, 2012

Magistrate Judge Thynge: Motion to Dismiss Denied Because Complaint Sufficiently Identified Infringing Programs and Systems

In Motivation Innovations, LLC v. Express, Inc., C.A. No. 11-615-SLR-MPT (D. Del. Apr. 24, 2012), Motivation sued various unrelated defendants for infringement of its patent related to delivering discounts and coupons and tracking customer spending habits.  The defendants collectively moved to dismiss for failure to meet the pleading standards of Rule 8, arguing that the complaint failed to “set forth a general class of products or a general identification of the alleged infringing methods.”  Id. at 6.

Motivation’s complaint contained the same allegation against each defendant, claiming that each defendant infringed “at least Claim 1 of the ‘527 Patent . . . through, among other activities, the manufacture, operation, and use of its home delivered coupon and discount programs and systems, including, but not limited to, discount programs and systems made through [each defendant’s] Rewards Program and redeemed at [defendants’] stores.”  Id.  The primary issue, as Magistrate Judge Thynge framed it, was whether this language along with an identification of the trade name of each defendant’s customer rewards program met the threshold for specificity required by Twombly and Iqbal and exemplified in Form 18.  Id. at 7-8.

Judge Thynge rejected several arguments from the defendants that this language was not sufficient.  She first found that Motivation’s reference in the complaint to the specific trade name of each defendant’s allegedly infringing discount program helped to specify the “home delivered coupon and discount programs and systems” that allegedly infringed the patent-in-suit.  Id. at 8-9.  She next explained that the conditional language of the complaint, “home delivered coupon and discount programs and systems, including but not limited to discount offers,” was acceptable because the complaint went on to specifically identify “coupon and discount programs and systems” and describe the programs and systems through trade names.  Id. at 9-10.  Finally, the defendants argued that the specifically-referenced claim 1 covered only redeeming offers, while the complaint did not mention a system or method for redemption.  Judge Thynge rejected this argument, finding that “Plaintiff is not required to plead specific claims of the patent allegedly infringed or describe in detail how the allegedly infringing products work.” Id. at 10-11.

For all of these reasons, Judge Thynge found that the complaint sufficiently stated a claim and recommended denial of the motion to dismiss and granting Motivation leave to amend to provide the correct name or a description of the Victoria’s Secret rewards program.  Id. at 11-12.

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April 23, 2012

Judge Thynge Grants Motion to Consolidate Cases Involving Same Parties, Same Accused Products and Related Patents; Denies Request for a Stay

In Masimo Corp. v. Philips Elecs. North America Corp., C.A. No. 11-742-LPS-MPT, Judge Thynge granted in part and denied in part defendants’ motion to consolidate and stay a later filed patent infringement suit involving the same parties and related patents. Id. at 1. Plaintiff filed a first action against defendants for infringement of fourteen patents relating to pulse oximetry technology. Id. at 2. Defendants responded asserting counterclaims for infringement of ten patents of their own against plaintiff. Id. at 2. The Court later reduced the number of patents-in-suit in the first action from twenty-four to seven. Id. at 2. Discovery in the first action had progressed and claim construction had been completed. Id. at 3. Thereafter, plaintiff filed a second action against defendants alleging infringement of two additional patents. Id. at 3. In response, defendants moved to consolidate the two actions and stay litigation of the two additional patents asserted in the second action. Id. at 3. On their motion to consolidate, defendants argued that consolidation was appropriate because, among other things, the second action “involves the same family of patents, same technology and the same accused products” as the first action and that by consolidation judicial resources would be “conserved.” Id. at 4. Plaintiff countered that consolidation of the two actions would only cause “further delay” and likely prevent it from obtaining the injunctive relief it seeks. Id. at 6-7. The Court ruled in favor of consolidation. Id. at 9. In its analysis, the Court agreed with defendants, concluding that because the two cases involve the same parties, same patents, and likely the same witnesses and evidence, and because the issues were so “closely intertwined” judicial resources would indeed likely be conserved by consolidating the two cases. Id. at 9.
On the other hand, regarding defendants’ request that litigation of the patents at issue in the second action be stayed pending the outcome of litigation of the patents at issue in the first action, the Court determined that the competing interests did not favor granting a stay. Id. at 15. The Court noted that it was “uncertain whether resolution of the [patents at issue in the first action] would settle any issues relating to the [patents at issue in the second action].” Id. at 11. The Court also pointed out that “[r]esuming litigation after a protracted stay would also carries distinct problems associated with the passage of time, such as stale evidence, faded witness’ memories, and lost documents and information.” Id. at 14.

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April 23, 2012

Court again finds that Exergen, and not Therasense, provides standard for pleading inequitable conduct.

The Court recently denied, without prejudice, a defendant’s motion for leave to file an amended answer, and in the process addressed the appropriate standard for pleading inequitable conduct in light of the Federal Circuit’s opinion in Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011). Bayer Cropscience AG v. Dow Agrosciences LLC, C.A. No. 10-1045 (RMB/JS) (D. Del. Apr. 12, 2012). In Bayer Cropscience, the defendant sought to amend its answer to add an inequitable conduct counterclaim and related affirmative defense. The plaintiff opposed the proposed amendment, arguing that the amendment was futile because it failed to allege facts upon which the “single most reasonable inference” to draw was that the inventor specifically intended to deceive the PTO. Id. at 9-10. The Court, citing then-Magistrate Judge Burke’s recent report and recommendation in Wyeth Holdings Corp. v. Sandoz, Inc., C.A. No. 09-955-LPS-CJB (D. Del. Feb. 3, 2012) (adopted by Judge Stark on March 1, 2012), explained that Therasense “discussed the evidentiary standard to be used at trial … [and] did not evaluate the sufficiency of the parties’ pleadings.” Id. at 10. Accordingly, the Court explained that the appropriate standard was not the “single most reasonable inference” standard articulated in Therasense, but instead was whether, under Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009), the defendant "pled sufficient facts from which a reasonable inference can be drawn that material information was not given to the PTO because [the plaintiff] specifically intended to deceive the PTO.” Id. at 10-11.

The Court found that it could not reasonably infer from the facts alleged in the proposed amended answer "that [the inventor] had a specific intent to deceive the PTO simply because he did not reveal one aspect of the results published in his 1995 article.” The Court added, “[t]his is especially true since [the defendant] does not allege that [the inventor] had any role or involvement in the prosecution of the ‘401 patent … [or that the inventor] had a direct personal stake in the outcome of the prosecution.” Id. at 11-12. Further, the defendant’s argument that the inventor specifically intended to deceive the PTO was “at odds with the objective fact that [the inventor] published the allegedly incriminating information...” in a paper while the ‘401 patent was being prosecuted: “The Court agrees with [the plaintiff’s] argument that ‘[the defendant] offers no reasonable explanation for why [the inventor] would tell the whole world in a later publication something he didn’t want the PTO to know.’” Id. at 12.

Although the Court found Exergen, and not Therasense, to be the appropriate pleading standard for inequitable conduct, it explained that Therasense was nevertheless relevant because it rejected the former “sliding scale” analysis under which intent could be inferred based upon a showing that material information was withheld, or under which withheld information could be inferred to be material where an intent to deceive was sufficiently alleged. Id. at 7, 12-13 (citing Therasense, 649 F.3d at 1290-91).

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April 23, 2012

Judge Andrews construes claims of patents directed to technology for locating experts

In XpertUniverse, Inc. v. Cisco Systems, Inc., C.A. No. 09-157-RGA (D. Del. Apr. 20, 2012), Judge Andrews recently construed the following claim terms of U.S. Patent Nos. 7,499,903 and 7,366,709 directed at technology for locating an expert using a computer-based inquiry:

"underlying plurality of criteria groupings" and "underlying criteria grouping(s)"
"skill-set database"
"expert having individualized knowledge"
"unique numerical routing identifier," "unique numeric routing identifier," and
"numeric routing identifier"
"match and route system"
"layer(s) of inquiry type(s)"
"inquiry type(s)"
"receiving from the user a response to the presentation of a first member of the
underlying criteria grouping"
"the response triggering the presentation of further members of the underlying
criteria grouping"
"upon a user's request for assistance with at least one of the predetermined
semantically-expressed inquiry type"
"upon the receipt of a user request for assistance with at least one of the
predetermined semantically-expressed inquiry type"
"the host server communicably connected with an inquiry-type database and a skillset
"subject list style"
"member of an organization"/"member of the organization"
"inquiry type(s)"
"inquiry criteria"
"underlying criteria"
"interactive problem definition page"
"inquiry criteria values"
"plurality of monitors"
"the processor being configured to extract unique combinations from the database
and evaluate the combinations"

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April 18, 2012

2012 Federal Trial Practice Seminar: An Introduction to Federal Practice in the District of Delaware

The Delaware Chapter of the Federal Bar Association, in conjunction with the United States District Court for the District of Delaware, is pleased to announce another exciting new initiative. On the evenings of Thursday, May 17 and Thursday, May 31, 2012, from 5:00 to 7:30 p.m., the District Court and FBA will sponsor a two-night seminar program entitled “The Federal Trial Practice Seminar Presents: An Introduction to Federal Practice in the District of Delaware.” The sessions will take place in Courtroom 2B at the J. Caleb Boggs Federal Building.

Attorneys who have been practicing in the District for three years or less are eligible to participate in this seminar. One of the two seminar sessions will relate to an attorney’s interaction with opposing counsel and participation in the litigation process, while the other session will focus on an attorney’s interaction with the Court. Each session will include a presentation from a speaker and a panel discussion. The speakers and panel members will be current and/or former judges of the District Court.

Participation is limited to FBA members. Current FBA members may register for the seminar by contacting Steve Brauerman via e-mail at sbrauerman@bayardlaw.com, by no later than May 14, 2012. Those interested in participating in the seminar who are not currently FBA members may fill out and submit the attached application form in order to become a member.
Alternatively, they may contact Mr. Brauerman at the e-mail address listed above to obtain additional information about FBA membership.

Space for the seminar is limited and applicants will be accepted on a first-come, first-served basis. Applicants should be available to attend both sessions. Admission to the seminar is free and the FBA expects to apply for Continuing Legal Education credit in Delaware for both sessions.

The "Introduction to Federal Practice" seminar will be organized by the same administrative team that has organized our successful "Federal Trial Practice Seminar" (or "FTPS") in 2010 and 2011. The FTPS, an eight-week trial skills seminar program offered to attorneys in their first ten years of practice, will be next offered again in Spring 2013.

Federal Bar Association Membership Application

April 17, 2012

Judge Sleet: Markman Order in Telecommunications Patent Litigation

Chief Judge Sleet recently issued a Markman order construing the following claim terms in two separate patents relating to mobile telecommunications:
- “intelligent gateway”
- “mobile network”
- “said roamer”
- “routing center”
- “said mobile switch center”
- “is identified as”
- “adapted to enable a call dialed . . . as said dialing sequence to be routed to said destination number”
- “adapted to deliver short messages”
- “said characteristics being obtained by said gateway using knowledge of a second cellular telephony network”
- “said intelligent gateway being adapted to obtain information for said call completion using knowledge of said second cellular telephony network”
- “coupling to; being coupled to; being respectively coupled to”
- “packet-switch network”
- “other intelligent gateways”
- “other mobile networks”
In construing these terms, Judge Sleet relied upon The Institute of Electrical and Electronics Engineers dictionary and Newton’s Telecom Dictionary in finding that certain terms had established meanings as technical terms of art when the patents-in-suit were filed. Starhome GMBH v. AT&T Mobility LLC, C.A. No. 10-434-GMS, at 1, 3 (D. Del. Apr. 12, 2012). Importantly, Judge Sleet also rejected an attempted “last-minute change to [] proposed construction the night before the Markman hearing as contravening the court’s standing Orders regarding Markman briefing.” Id. at 2. Rather, Judge Sleet relied on the proposed constructions submitted in the parties’ joint claim construction chart.

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April 15, 2012

Magistrate Judge Thynge: Bill of Costs Granted in Part, Denied in Part

Magistrate Judge Thynge recently reviewed a bill of costs in Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT (D. Del. Apr. 11, 2012). The court considered $591,824.69 in printing, electronic discovery, exemplifications, deposition expenses, filing fees, and witness fees and subsistence costs, and granted the bill of costs in part and denied it in part. Judge Thynge found no evidence of dilatory tactics by Amazon, but did reduce some of the costs requested.
In order to recover electronic discovery costs, she required Amazon to produce documents that distinguish the costs for converting documents, which were recoverable, from costs for processing, which were not. Id. at 9. Costs of exemplifications were limited to the amount attributable to “the actual presentation of the exhibits and documents,” not for “the intellectual effort involved in their production.” Id. at 11. With regard to deposition costs, Judge Thynge refused to allow reimbursement for depositions that were not used at trial and depositions of which Amazon failed to prove “a substantial portion” was used at trial. Id. at 12-20. Finally, Judge Thynge granted Amazon’s requests for witness expenses because Amazon had provided sufficient documentation supporting witnesses’ travel costs and had provided evidence of an agreement between the parties that witness fees would be recoverable if Amazon prevailed. Id. at 21.

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