February 21, 2014

Breaking News: Federal Circuit Affirms Cybor’s De Novo Review of Claim Construction

The Federal Circuit has issued its highly-anticipated decision in Lighting Ballast Control LLC v. Philips Electronics North America Corp., 2012-1014 (Fed. Cir. Feb. 21, 2014). The en banc decision of Chief Judge Rader and Judges Newman, Lourie, Dyk, Prost, Moore, O’Malley, Reyna, Wallach, and Taranto holds that the de novo standard of review should continue to apply to claim construction issues. As the Court summarized:

"[W]e apply the principles of stare decisis, and confirm the Cybor standard of de novo review of claim construction, whereby the scope of the patent grant is reviewed as a matter of law. After fifteen years of experience with Cybor, we conclude that the court should retain plenary review of claim construction, thereby providing national uniformity, consistency, and finality to the meaning and scope of patent claims. The totality of experience has confirmed that Cybor is an effective implementation of Markman II, and that the criteria for departure from stare decisis are not met."

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February 19, 2014

Judge Robinson grants plaintiff's motion to stay pending reexamination

Judge Sue L. Robinson recently considered plaintiff's motion to stay pending reexamination. Gevo, Inc. v. Butamax Advanced Biofuels LLC, et al., C.A. No. 12-301-SLR (D. Del. Feb. 18, 2014). The parties were competitors in the development of "isobutanol technology." Id. at 2. While the litigation was pending Butamax initiated a reexamination of the patent in suit. After conducting discovery, plaintiff provided defendant Butamax with a covenant not to sue "for the use of 'Accused Technology,' defined as certain modified recombinant microorganisms." Id. at 3. Butamax refused to dismiss its counterclaims, however, and the Court denied a motion to dismiss the claims, based in part "on the cloud cast over Butamax's research and development efforts from an unclear covenant not to sue." Id. Judge Robinson determined that in light of the pending reexamination, in which the PTO initially rejected all claims of the patent-in-suit, and the fact that fact discovery and claim construction was complete, a stay would be appropriate:

The parties are preparing for trial in about six months, however, rejection of the patent by the PTO would moot Butamax's counterclaims of invalidity (the only remaining claims to be litigated). Having considered the arguments put forth by both parties, and considering the time and expense of litigation, the court grants Gevo's motion to stay the case only until the PTO issues the Right to Appeal Notice. At that time, the parties will have 60 days to resurrect the litigation if they so desire.

Id.

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February 19, 2014

Judge Burke recommends denial of motions to dismiss direct infringement allegations

Magistrate Judge Christopher J. Burke recently considered motions to dismiss for failure to state a claim filed by defendants in three of eight related cases brought by Custom Media Technologies. Custom Media Technologies LLC v. Charter Communications, Inc., et al., C.A. Nos. 13-1420-LPS-CJB , 13-1425-LPS-CJB, 13-1426-LPS-CJB (D. Del. Feb. 10, 2014). Defendants moved to dismiss Charter's claims of direct infringement, arguing that Claim 1 of the patent-in-suit relates to "'customizing and distributing presentations for user sites[,]' and not to 'DVR technology [accused of infringement], which allows television viewers to watch and record television programming.'" Id. at 4. Although Charter's pleading was only required to meet the minimal requirements of Form 18, defendants argued that the Federal Rules, including Form 18, was not satisified, equating the situation at hand to a "a plaintiff stat[ing] that its patent covered an electric motor and that the defendent infringed because he sells cakes." Id. at 5. Judge Burke disagreed. "Plaintiff has accused a general category of products and services (here, 'DVR devices and DVR service' provided to cable television customers) of infringement. No more specificity . . . is required by Form 18." Id. Moreover, Form 18 only requires a "basic description" of the patentee's invention, "so long as there is a plausible basis to believe that the nature of what the patent covers might be infringed by the accused products." Id. Although Charter's allegations were "admittedly sparse," they were plausible. "[T]he Court cannot say that it is implausible, for example, that Defendants' DVR devices and services work in conjunction with thei cable television services to perform the steps of the method in Claim 1[.]" Id. at 6.

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February 18, 2014

Judge Stark Denies Motion to Dismiss State Law Claims Related to Patent Ownership Dispute, Grants Dismissal of Declaratory Judgment Counterclaim

Judge Stark recently considered two interesting motions to dismiss claims and counterclaims. The motions were filed in a case concerning whether certain patents were part of a business transaction several years ago and whether S3 Graphics or ATI Technologies now owns those patents. Each party sought declaratory judgment that it was the rightful owner of the disputed patents, and S3 Graphics asserted state law tort claims of slander of title, conversion, and unfair competition. S3 Graphics Co., Ltd. v. ATI Techs. ULC, et al., C.A. No. 11-1298-LPS, Memo. Order at 1-3 (D. Del. Feb. 11, 2014).

ATI moved to dismiss S3 Graphics’ state law tort claims as preempted by federal patent law and barred by the Noerr-Pennington doctrine. Judge Stark found that the state law claims were not preempted because “[n]o conflicts exist between federal patent law and anything contained in S3G’s state law claims” because the state law claims do “not seek imposition of liability upon AMD/ATI for improperly publicizing patents they own, but instead alleges that these Defendants have falsely and in bad faith ‘laid claim to patents they do not own, or hold any other interest in.’” Id. at 3-4. Judge Stark continued, “[n]or are S3G Ltd.’s state law tort claims barred by the Noerr-Pennington doctrine” because of Walker Process fraud. Under the Walker Process fraud doctrine, ATI Technologies would not be immune from state law liability arising from assertion of patent rights under Noerr-Pennington if ATI Technologies engaged in “knowing and willful fraud” in the procurement of a patent. Judge Stark found that “S3G Ltd. adequately alleges each of the elements of the Walker Process fraud to application of Noerr-Pennington immunity, making Defendant’s reliance on that immunity unavailing as a basis for dismissing S3G Ltd.’s state law tort claims.” Id. at 5-6. Judge Stark, therefore, denied the motion to dismiss.

S3 Graphics also moved to dismiss for lack of declaratory judgment jurisdiction over ATI Technologies’ counterclaim. Because the counterclaim sought a declaratory judgment that S3 Graphics “lacks any ownership interest in the Disputed Patents” and S3 Graphics had “not asserted any ownership interest in the patents and admits that it lacks any ownership interest in the patents,” Judge Stark found that there was no actual controversy sufficient to warrant a declaratory judgment. Id. at 7. Accordingly, Judge Stark granted the motion to dismiss the declaratory judgment counterclaim.

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February 18, 2014

Magistrate Judge Thynge Excludes Infringement Expert as Ipse Dixit without Sufficient Analysis

Among the flurry of pre-trial activity recently in the Magnetar Technologies case, which involves patents directed toward magnetic braking systems used in amusement park rides, was a report and recommendation by Magistrate Judge Thynge in which she granted a motion to exclude the plaintiffs’ infringement expert, Mark Hanlon. Magnetar Techs. Corp., et al. v. Six Flags Theme Parks, Inc., et al., C.A. No. 07-127-LPS-MPT, Report and Recommendation at 1 (D. Del. Feb. 7, 2014).

The defendants first contended in their motion that Mr. Hanlon lacked any specialized knowledge to support his expert opinions because he had not identified any experience with the technology of the patents-in-suit and had admitted multiple times during his deposition that he was not an expert. According to the defendants, Mr. Hanlon’s knowledge was “only general in nature” and that plaintiffs could not explain how Mr. Hanlon’s various work experiences qualified him as an expert in the technology of the patents-in-suit. The plaintiffs responded that the specific knowledge defendants would require – the design of magnetic arrays and the theory of magnetic brakes – was not necessary because Mr. Hanlon had experience as an expert in the “design and structure of amusement park rides” and “the mounting of magnetic brakes.” Id. at 2-4. Judge Thynge found that Mr. Hanlon had “the necessary skill and knowledge as evidenced from his previously described past work experience, his curriculum vitae, his educational background, and his previous involvement in eight magnet eddy braking projects,” which gave him “the qualifications to testify about magnetic brakes, and is capable of identifying the components of a magnetic brake assembly.” Id. at 10-11. Mr. Hanlon was not qualified, however, to testify as to the “theory of operation or the design of magnetic brakes.” Id. at 11.

Second, the defendants requested the Mr. Hanlon’s infringement opinion be excluded because it was “completely unsupported and ungrounded in fact” because it failed to “identify how any accused ride meets the limitations of any asserted claim.” The plaintiffs responded that Mr. Hanlon’s analysis was adequately based on data, principles, specific identified documents, and his own personal knowledge and experience. Id. at 4-5. Here, Judge Thynge found broadly that Mr. Hanlon’s opinion “lack[ed] the proper grounds for his conclusions, because it [was] void of the necessary analysis for comparing each element of the claim to the accused product.” Id. at 11. Judge Thynge explained that Mr. Hanlon’s opinions generally simply “state[ed] the claim limitations followed by general references to several documents and [a] deposition . . . . Nowhere does Hanlon explain why the documents or deposition are relevant to the technology involved or to [the asserted claims], how they show why [the asserted claims] cover[] the accused product, or how they demonstrate or provide the required analysis of the claim elements to the accused product.” Id. at 16. Judge Thynge concluded: “Ipse dixit is defined as ‘something asserted but not proved,’ which exemplifies Hanlon’s expert report. Hanlon only provides data and a conclusion, with the chasm between not bridged by any analysis. Without an explanation for his reliance on and the relevance of the cited documents, the court cannot find any good grounds for his conclusions. Therefore, Hanlon’s expert report is stricken.” Id. at 22.

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February 17, 2014

Judge Andrews issues claim construction related to computer-aided learning technology

Judge Richard G. Andrews recently construed several disputed claim terms across the following patents: U.S. Patent Nos. 6,126,448, 6,213,780, 6,685,478, 6,398,556, 6,688,888, and U.S. Patent No. RE 38,432, which each generally relate to computer-aided learning systems, methods, and/or apparatuses. IpLearn, LLC v. Kenexa Corporation et al., C.A. Nos. 11-825, 11-876, 11-1026-RGA (D. Del. Feb. 10, 2014). Specifically, Judge Andrews construed the disputed claim terms as follows:

- "company documents" means "documents in the possession of the company."

- "institute user pays to access materials regarding the at least one learning user" / "pays to access materials" means "pays a fee to access personal material regarding the at least one learning user."

- "ascertaining materials for a learning user to learn" means "identifying and selecting a set of learning materials for a learning user."

- "the user" means “either a learning user or an institute user.”

-"dialogue session" means "a duration of time for the users to communicate in a dialogue environment."

- "retrieving/retrieved/retrieves" / "generating/generated/generates" means "retrieving by the system" / "generated by the system."

- "user/users" means "student/students."

- "line-item " means "a subdivision of a subject."

- "inference engine" means "hardware, software, or some mix of hardware and software, that accesses relationship rules to determine a student's level of understanding in a subject or line item."

- "relationship rules" means "rules that define the relationship between or among areas of
a subject."

- "reviews " means "review of the summarized learning materials."

- "learnt line-item" means "a line-item for which the student has achieved a preset level in learning that line item."

- "learnt line-item selection rules" / "line-item selection rules" means "rules that govern which [learnt] line-item is selected by the computer."


Judge Andrews also found the following terms should be given their plain and ordinary meanings:

-"searching at least some of the documents" / "at least some of the documents are searched."
-"recommendation.''
- "summarized learning materials."

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February 17, 2014

Judge Andrews denies motion for summary judgment of no unenforceability for inequitable conduct

Judge Richard G. Andrews recently denied a defendant’s motion for summary judgment of no unenforceability for inequitable conduct. St. Jude Medical, et al. v. Volcano Corporation, C.A. No. 10-631-RGA (D. Del. Feb. 12, 2014). Defendant had requested summary judgment either because there were no disputed material facts, or alternatively, because “even if there is a disputed material fact . . . [defendant] states that [even if inequitable conduct occurred] as a matter of law the patent-in-suit, as a ‘great-grandchild’ of the 'tainted’ patent is too distantly related to be rendered unenforceable.” Id. at 1.

While the Court found the alternative argument “novel[],” it concluded that “it would be better framed if [the Court] decided whether there actually was any underlying inequitable conduct.” Id. The Court observed that while it had “seen the inventor testify twice before,” it “would like to see him testify on the matters framed by this motion, since [the] judgment on his credibility is likely to be dispositive, and [the Court could not] make a credibility determination on a summary judgment motion.” Id.

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February 17, 2014

Judge Thynge issues recommendations related to infringement, non-infringement, and invalidity

In Magnetar Technologies Corp., et al. v. Six Flags Theme Parks, Inc., et al., C.A. No. 07-127-LPS-MPT (D. Del. Feb. 7, 2014), Magistrate Judge Mary Pat Thynge issued a report and recommendation for the parties’ motions for summary judgment of infringement, non-infringement, and invalidity. Plaintiffs alleged that defendants’ roller coasters and other amusement park rides infringed the two patents-in-suit (the “‘125 Patent” and the “‘237 Patent”).

As to the ‘125 Patent, the Court granted defendants’ motion for summary judgment of invalidity, accepting the majority of defendants’ arguments. First, the Court concluded that the only asserted claim included an error that rendered it fatally indefinite under Section 112. This claim referenced both “a track having two parallel rails” as well as “magnet assemblies mounted between said tracks.” Id. at 4 (emphasis added). Defendants argued that “the plain error is that the magnets cannot be mounted between plural ‘tracks,’ because there is only one track recited.” Id. The Court agreed with the argument that “there are purportedly at least two reasonable ways to correct the error, which would result in corrected claims of different scopes.” Id. at 5. Therefore, “the appropriate correction would be subject to reasonable debate” and the claim was invalid as being insolubly ambiguous. Id. at 9. Second, the Court concluded that the patent failed to name an inventor. See id. at 9-17. Third, defendants argued that the patent was invalid under Section 102’s on-sale bar, pointing to alleged sales to United Airlines and to the City of Denver. Id. at 19. The Court agreed that plaintiffs had in fact made a commercial offer of sale to United Airlines, even though no fixed price had been set. Id. at 27-29. It denied summary judgment as to the alleged sale to the City of Denver, however, finding insufficient evidence. Id. at 29. Finally, the Court concluded that the asserted claim was obvious in light of various combinations of prior art. See id. at 29-38.

The Court denied plaintiffs’ motion for summary judgment of infringement of the ‘125 Patent by certain accused roller coaster rides. Plaintiffs argued that defendants had offered no facts as to why these rides did not infringe, citing, inter alia, defendants’ lack of substantive non-infringement contentions. Id. at 40-41; 42-43. In response, defendants argued that plaintiffs had never articulated their infringement contentions during discovery, pointing to plaintiffs’ interrogatory responses as well as their infringement expert’s report, and had raised new infringement arguments for the first time in their summary judgment opening brief. Id. at 41-44. The Court agreed that “by not disclosing the specific evidentiary support for their infringement contentions until this time, defendants have been deprived of a meaningful opportunity to respond to that evidence” and therefore denied plaintiffs' motion for summary judgment. Id. at 44. Notably, in a separate opinion issued on the same day (D.I. 404), the Court had recommended striking the report of plaintiff’s infringement expert, and therefore did not consider that report. Id. at 40.

The Court granted-in-part defendants’ motion for non-infringement of the ‘125 Patent with respect to different accused roller coaster rides. Id. at 38. Defendant articulated three different categories of these rides, arguing that each category did not infringe. The Court granted the motion as to one category because it had struck plaintiffs' infringement expert report, and there was no other testimony to support infringement. Id. at 49. As to the second category, defendants based their non-infringement argument on a certain interpretation of a term not construed by the Court. Id. at 49-50. The Court found that questions of fact existed as to the claim interpretation and therefore denied the motion as to this category of rides. Id. at 51. As to the third and final category, the Court granted summary judgment as to two of the three rides in this category, id. at 53-54, and denied summary judgment on the third, finding that genuine issues of material fact existed, id. at 54-55.

As to the ‘237 Patent, the Court granted defendants’ motion as to non-infringement and denied their motion as to invalidity of this patent. As to non-infringement, the Court found that defendants had shown that the accused products did not meet all limitations of the asserted claims. See id. at 70-74. As to invalidity, defendants argued that this patent failed to meet the written description requirement if the accused claims were read to cover the accused products, explaining that the “broad construction [of a term] plaintiffs successfully argued for is not supported by the specification.” Id. at 58-59. The Court found that defendants had not met their burden in this respect, and denied the motion. Id. at 59-60. The Court also found that questions of fact existed as to whether the patent was obvious. Id. at 64-65.

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February 17, 2014

Judge Stark affirms Magistrate Judge’s Orders regarding discovery issues

In a recent memorandum order, Judge Leonard P. Stark overruled plaintiff’s first and second objections, and affirmed Magistrate Judge Mary P. Thynge’s Orders from April 18, 2012 and August 22, 2012. Magnetar Technologies Corp. et al. v. Six Flags Theme Parks Inc., et al., C.A. No. 07-127-LPS-MPT (D. Del. Feb. 7, 2014). The issues addressed focused heavily on (i) materials produced by third-party Acacia Research Corporation—including the “Zelley memorandum”—in response to a subpoena in another case in California; (ii) the deposition of Geoffrey Zelley, an associate of the firm that previously represented plaintiff in the instant matter. In the April 18, 2012 Order, Judge Thynge found that “the factual part of the Zelley memorandum was discoverable, but the impressions of counsel contained in the document were not.” Id. at 2 n.1 Further, Judge Thynge allowed the Zelley deposition to move forward with certain limitations. Id. Plaintiffs objected to these rulings, arguing that “Mr. Zelley's deposition should not go forward due to the risk of a waiver of attorney client privilege and attorney work product, that the Zelley memorandum and other assertedly privileged documents should be returned, and that Defendants should not be able to further use such documents.” Id. at 2. Defendant thereafter moved to compel production of certain document’s, and Judge Thynge granted that motion in part. Id. at 2-3 (discussed previously here). In response, plaintiffs filed their second objections. Plaintiffs specifically objected to Judge Thynge’s ruling related to the destruction of documents, which essentially stated that while there was no bad faith by plaintiffs in connection with the destruction of certain documents, a sanction was still warranted, which included producing some documents containing privileged attorney-client communications. Id. at 3.

Judge Stark affirmed Judge Thynge’s rulings, finding they were “neither clearly erroneous nor contrary to law.” Id. at 5. For example, with regard to Judge Thynge’s April 2012 decision, Judge Stark found that Judge Thynge “properly considered Defendants' substantial need for the information contained in the Zelley Memo and permitted the deposition to go forward on that basis," and that she also "properly reasoned that Plaintiffs' spoliation of evidence and other litigation misconduct have created a substantial need for the information contained in the Zelley Memo- information that is no longer available to the Defendants by any other means." Id. Judge Stark also cited portions of Judge Thynge’s August 2012 order with approval, for example, where she explained that the subject documents “were clearly under the control of [plaintiff] at the time of their destruction. Although the instant matter does not involve the typical intentional withholding of the documents as is routinely involved for an inference, [plaintiff’s] control of the documents and the potential prejudice to defendants, makes an inference a possible sanction for spoliation." Id. at 5-6. As Judge Stark further explained, “Judge Thynge thoughtfully exercised her discretion in concluding that ‘[a]lthough the absence of evidence of bad faith spoliation does not warrant dismissal or entering an unfavorable judgment, the lack of reasonable preservation measures and prejudice weighs in favor of a lesser sanction.’” Id. at 6.

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February 17, 2014

Judge Robinson issues claim construction and summary judgment rulings

In Juniper Networks, Inc. v. Palo Alto Networks, Inc., C.A. No. 11-1258-SLR (D. Del. Feb. 6, 2014), Judge Sue L. Robinson construed several disputed terms and issued summary judgment rulings with respect to the patents-in-suit: United States Patent Nos. 8,077,723 ("the '723 patent"); 7,779,459 ("the '459 patent"); 7,650,634 ("the '634 patent"); 7,302,700 ("the '700 patent"); 6,772,347 ("the '347 patent"); 7,734,752 ("the '752 patent"); and 7,107,612 ("the '612 patent"). The patents-in-suit are related to “computer network and systems using hardware, software, or combinations thereof.” Id. at 13. Specifically, Judge Robinson construed the following terms:

The ‘634 Patent
- "[T]wo or more security devices" means "at least two physical devices, each of which performs a security function."
- Judge Robinson concluded that with respect to the following limitation, the “plain meaning of ‘forwarding’ does not compel the conclusion that the ‘extraction’ step must be performed first”: "[E]xtracting flow instructions, a session ID and flow information, for the two or more security devices, from the single flow record and forwarding the flow instructions, the session ID and the flow information to the respective ones of the two or more security devices to facilitate processing of the data packet." Judge Robinson found further support for the construction from the specification, which explained that “the steps of the invention can be performed in a different order and still achieve desirable results.” Id. at 17.

The ‘612 Patent
-"[R]ules" means “actions to be applied against packets, as distinct from a look-up table, which is a data structure that stores information.”

The ‘752 Patent
- "[A] primary portion that stores information associated with the operation of the first device-implemented session module, when the primary security system is operating in a primary security mode" means “the portion of the flow table that stores information for processing packets when all security devices are operational.”

-"[A] secondary portion that stores information associated with the operation of the first device-implemented session module, when the primary security system is functioning in a failover mode" means “a separate portion of the same flow table that stores information for processing packets if there is a failover event."

The ‘723 Patent
-"[F]irst engine" and "second engine" mean "a first processor" and "a second processor,” respectively.
-"[A] tag" and "associat[e] ... a tag" mean "a structure for holding data" and "form a connection with a
tag," respectively.

The ‘700 and ‘459 Patents
-"[S]ecurity screening" means "inspection by applying one or more security policies."
-"[W]ithout performing the security screening" means “without inspection.”

Judge Robinson granted plaintiff’s motion for summary judgment of assignor estoppel, which negated defendant’s invalidity defenses. Moa and Zuk – two individuals who previously worked for the plaintiff corporation – left the plaintiff corporation to found and work for the defendant corporation (“PAN”). Judge Robinson explained that Mao and/or Zuk are “listed as inventors on each of the '723, '459, '700, '347, and '612 patents,” and each “assigned ‘entire right, title and interest’ of each of the claimed inventions to either NetScreen or Juniper for ‘valuable consideration.’” Id. at 5. Judge Robinson explained that “Mao requested the title of sole founder when he joined PAN, [and] he and PAN have consistently held him out to be at least a founder.” Id. at 6. Judge Robinson concluded that “this fact is dispositive of the issue of privity.” Id. However, “[f]or completeness,” Judge Robinson also considered the “balance of the equities and the relationship of Moa and PAN.” Id. Judge Robinson explained that in this regard the relevant “query is whether Moa was closely involved in the development of products and with the company,” and found that “Mao testified to his involvement in the product's development (including specific examples of product features) and his critical role with PAN.” Id. at 7. Judge Robinson thus held that the Moa was in privity with PAN, and the patents at issue were subject to assignor estoppel. Id. Further, Judge Robinson found the ‘723 patent was subject to assignor estoppel despite the fact that Zuk declined to execute an assignment and oath. Id. at 7-8. As Judge Robinson explained, Zuk’s “employment contract properly assigned the patent to Juniper.” Id. at 8. Having granted plaintiff’s motion for summary judgment of assignor estoppel, Judge Robinson denied the competing motions for summary judgment of validity as moot. Id. at 8 n.9.

Finding genuine issues of material fact to exist, Judge Robinson denied plaintiff’s motion for summary judgment of infringement. Id. at 41. Judge Robinson also denied defendant’s motion for summary judgment of non-infringement, with a few exceptions. Applying the doctrine of prosecution history estoppel to the ‘634 patent, Judge Robinson held that based on amendments made during reexamination and court's construction of “two or more security devices,” plaintiff was precluded “from arguing at trial that a single security device satisfies the ‘two or more security devices’ claim limitations using the doctrine of equivalents.” Id. at 20. Similarly, with respect to the ‘752 patent, Judge Robinson held that an amendment and the court’s construction “requiring that the secondary portion be separate from the primary portion, prevents Juniper from arguing at trial that a flow table without portions satisfies the claim language under the doctrine of equivalents.” Id. at 30. Judge Robinson also granted defendant’s motion for summary judgment of non-infringement of the ‘459 and ‘700 patent under the doctrine of equivalents, since “[t]he prosecution history . . . and the court's construction forecloses argument by Juniper that intra-zone packets may be inspected and still meet these claim limitations under the doctrine of equivalents.” Id. at 39.

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