December 16, 2011

Judge Andrews Considers Failure to Prosecute Claim, Orders Monetary Sanction Rather Than Immediate Dismissal

Judge Andrews recently issued a memorandum opinion in the case of WebXChange Inc. v. Dell Inc., et al., Civ. No. 08-132-RGA (D. Del. Dec. 15, 2011). WebXChange sued Dell and Federal Express for patent infringement, but has had a history of “irreconcilable-and total-breakdown[s] in the client-lawyer relationship.” Id. at 2-4. The defendants sought dismissal of the case, and on November 9, the court issued an order to show cause why the action should not be dismissed with prejudice. Id. at 4. When the plaintiff, without counsel, requested an extension of time to show cause, Judge Andrews noted that the plaintiff “has been in default of its obligations to prosecute the case since July 6, 2011.” Id. The plaintiff was “personally responsible for its lack of counsel . . . prejudice to the defendants arises from the delay . . . [and the] plaintiff’s conduct has been willful.” Id. at 6-7. Nevertheless, the court found that the plaintiff’s claim could be meritorious. Id. at 8. Therefore, although the facts “mostly suggest[ed] that dismissal [was] appropriate,” the court it instead took an “intermediate step . . . namely the imposition of a monetary sanction.” Id. at 8. Because “‘nothing has happened in the case’ since February 2011,” Judge Andrews concluded that it would “not make sense . . . that if new counsel do enter an appearance on January 17, 2012, the case should just go on as if the last six-to-eleven months had not happened.” Id. at 7. The plaintiff was therefore given until January 17, 2012 to both find new counsel and post $100,000 in escrow with the Clerk of the Court for defense costs.

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December 12, 2011

Court Issues Claim Construction Order Relating to Vehicle Navigation Systems

In Vehicle IP, LLC v. AT&T Mobility LLC, et al., Civ. No. 09-1007-LPS (D. Del. Dec. 12, 2011), Judge Stark construed three claims of a patent entitled “Method and Apparatus for Determining an Expected Time of Arrival” which the Court explained was “directed at improving vehicle navigation systems through more efficient distribution of navigation functions between a mobile unit located in the vehicle and a remote dispatch, yielding a more accurate determination of expected time of arrival.” Memo Op. at 1. Finding that the patent claims and specification used the term “expected time of arrival” consistently to mean a time of day, and not an interval of time, Judge Stark construed the term to mean “time of day at which the vehicle is expected to arrive somewhere (and not remaining travel time).” Id. at 6-7. Judge Stark construed the term “way point(s),” again focusing on the claims and specification (and rejecting both parties’ proffer of extrinsic evidence), to mean “intermediate point(s) on the way to the final destination (and not the final destination itself).” Id. at 9. Finding in the specification an additional function-based limitation, Judge Stark construed the term “dispatch” to mean “a computer-based communication and processing system remotely located from the vehicle that manages and monitors vehicles.” Id. at 11. Finally, the Court adopted the parties’ agreed-upon construction of the term “determine in response to the vehicle position” to mean “determine based on the vehicle position and update as the vehicle position changes position throughout the trip.” Id. at 6 n.2.

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December 9, 2011

Judge Kugler Grants Preliminary Injunction but Refuses to Order Recall in ANDA Case

Judge Kugler recently ruled on the plaintiff’s motion for a preliminary injunction in Sciele Pharma Inc. v. Lupin, C.A. No. 09-0037-RBK (D. Del. Dec. 6, 2011). Considering likelihood of success on the merits, Judge Kugler found that “since a generic drug’s label is found to control the analysis of potential infringement in a case like this one, and since Defendant’s label reflects a Tmax that falls within the range claimed in Plaintiff’s patent, Plaintiff has shown a likelihood [of infringement].” Id. at 11. Regarding irreparable harm, the court observed that the market for the branded drug was “in steady and irreversible decline, and has been for some time,” and found “that a loss of market position accompanied by market diminution presents an even stronger case for irreparability.” Id. at 18. The court then found irreparable harm based on “projected lost sales, price erosion, and lost market share, in concert with [a] claimed loss of goodwill.” Id.

While Judge Kugler found that a balancing of hardships generally favored the plaintiff and granted a preliminary injunction, he refused to order a recall of the generic product that had already been released. The court accepted the defendant’s argument on this point that a recall would be “onerous, complicated and expensive” and would result in “a loss of goodwill and harm to its reputation with distributors and retailers.” Id. at 19.

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December 9, 2011

Chief Judge Sleet Issues Order Construing Claims of Wireless Networking Technology Patent

Chief Judge Sleet recently issued a claim construction order in Extricom, Ltd. v. Meru Networks, Inc., C.A. No. 10-391-GMS (D. Del. Dec. 5, 2011). Of particular note, Judge Sleet construed the phrase “all the access points” to mean “a plurality of access points,” rejecting the argument that this construction would “inject confusion” into the meaning of the term. Id. at 1-2 n.2. The court found that “‘all access points’ refers for antecedence to ‘a plurality of access points,’ which appears in Claim 1 four lines above the instant term, and, as such, qualifies the term to define a plurality of access points rather than all access points on a network.” Id. The patent’s specification also supported this meaning, according to the court, because “the preferred embodiments describe the access points acting in groups that ‘are substantially independent’ and may be ‘regarded as separate systems,’ not a single unit.” Id.

Judge Sleet also construed the phrase “substantially in accordance with IEEE standard 802.11” as having its plain and ordinary meaning. Id. at 2. In doing so, the court rejected the defendant’s argument that the term is indefinite “because it does not . . . ‘particularly point[] out and distinctly claim[] the subject matter which the patentee regards as his invention.” Id. at 2 n.4. The court pointed to the Federal Circuit’s decision in Fujitsu Ltd. v. Netgear, Inc., 620 F.3d 1321 (Fed. Cir. 2010), which concluded that “where a patent incorporates a standard such as 802.11, which includes both mandatory and optional provisions, courts should compare the ‘claims . . . to the accused product to determine infringement.’” Id. The court also that the plaintiff’s “contention that one of ordinary skill in the art would understand the meaning of this term is likewise supported by the fact that over forty issued patents and pending patent applications use this or similar language in describing 802.11 Standard compliance.” Id.

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December 9, 2011

District Court Adopts New Default Standards for E-Discovery and Access to Source Code

Yesterday, the District Court adopted new default standards, the Default Standard for Discovery, including Discovery of Electronically Stored Information ("ESI"), and the Default Standard for Access to Source code.

Default Standard for Discovery, Including Discovery of Electronically Stored Information

Default Standard for Access to Source Code

December 8, 2011

Special Master orders a complete response to contention interrogatory where party responds to only portions of the interrogatory

In XPRT Ventures, LLC v. eBay, Inc., et al., C.A. No. 10-595-SLR (D. Del. Nov. 30, 2011), Special Master White granted defendants’ motion to compel plaintiff to provide a complete response to its interrogatory seeking plaintiff’s contentions on conception and reduction to practice for each claim of the patents-in-suit. Plaintiff opposed defendants’ motion arguing that its response was complete, that the interrogatory posed an undue burden, was duplicative of other discovery and imposed an unnecessary expense. Id. at 8. Special Master White disagreed. He found that the response was incomplete because it failed to provide any information concerning due diligence and failed to identify any documents, although requested by the interrogatory. Special Master White noted that plaintiff “may not pick-and-choose which portions of the discovery request that it likes, and then claim that the response is complete.” Id. Special Master White also found that the interrogatory did not pose an undue burden, was not duplicative and did not impose an unnecessary expense. Id. at 9-11. There was no undue burden because it is the plaintiff not the defendant that controls the number of claims asserted in the case. Id at 9. The interrogatory was not duplicative because choosing to serve “written discovery in advance of a deposition is hardly novel; nor is it objectionable for a party to want to know basic facts and receive relevant information and documents before taking a deposition; and it is inappropriate for the responding party to instruct the propounding party to ask the question at a deposition rather than provide a written response.” Id at 10. Last, the interrogatory posed no unnecessary expense because the information sought should be readily available to plaintiff. Id. at 11.

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December 5, 2011

Order construing claim terms of patent for a shower curtain fastening device

In Allure Home Creation Co., Inc. v. Maytex Mills, Inc., C.A. No. 10-712-GMS, Judge Sleet recently construed the following terms of U.S. Patent Nos. 6,698,061 and 7,003,848 which claim a a shower curtain fastening device:

"a sheet material having at least one aperture"
"a second component having first and second ends"
"the first end comprises a sleeve and a recess for matingly engaging the
extending member with a bulbous head"
"a second end comprising means for engaging the aperture of the sheet
material"
"the second component is connected to and freely rotatable about the
first component"
"a first component having first and second ends, wherein ... the second end comprises an extending member with a bulbous head"
"a first component having a first end, a second end and a hook"
"the second end comprises an extending member with an enlarged end comprising a bulbous head"

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December 5, 2011

Recent Mandamus Rulings from the Federal Circuit in Delaware Cases

On December 2, 2011,the Federal Circuit granted a petition for a writ of mandamus reversing the District of Delaware’s denial of a motion to transfer venue. In re Link_A_Media Devices Corp., Misc. Doc. No. 990 (Fed. Cir. Dec. 2, 2011). The Court of Appeals ordered the District Court to transfer the case to the Northern District of California, finding that the exacting standard for a writ of mandamus had been satisfied.

In Marvell Int’l v. Link_A_Media Devices, C.A. No. 10-869-SLR (D. Del. June 8, 2011), a Bermuda plaintiff brought suit against a defendant incorporated in Delaware. The District Court denied defendant Link_A_Media Devices’ motion to transfer. The court found that transfer was not warranted in part because “the plaintiff’s choice of forum is still of paramount consideration.” Id. at 3. The court also stated that “because [the defendant] is a Delaware corporation, it has no reason to complain about being sued in Delaware” and noted that it was not “persuaded by [the defendant’s] arguments regarding convenience.” Id. at 4-5. (Read more about Judge Robinson’s denial of the motion to transfer here.) The Federal Circuit, however, granted mandamus and ordered transfer. The Federal Circuit specifically held that “the district court placed far too much weight on the plaintiff’s choice of forum.” In re Link_A_Media Devices Corp., Misc. Doc. No. 990, at 4 (Fed. Cir. Dec. 2, 2011). The Federal Circuit also found that the district court’s “heavy reliance on the fact that [the defendant] was incorporated in Delaware was similarly inappropriate” and that the “district court also erred when it found that consideration of the public interest factors did not favor either forum.” Id. at 5-6.

Earlier this year, the Federal Circuit denied a petition for a writ of mandamus in In re Xoft, Inc., Misc. Doc. No. 983 (Fed. Cir. Aug. 19, 2011). In that case, New York and German plaintiffs brought suit against a defendant incorporated in Delaware. Judge Stark accepted Magistrate Judge Thynge’s report recommending that defendant Xoft’s motion to transfer to the Northern District of California be denied. Carl Zeiss Meditec, Inc. v. Xoft, Inc., C.A. No. 10-308-LPS-MPT (D. Del. Mar. 30, 2011). Judge Thynge found that the scales were not sufficiently tipped in favor of transfer where Delaware was the plaintiff’s choice of forum, the defendant was incorporated in Delaware, and the location of witnesses and evidence were neutral or weighed only slightly in favor of transfer. Judge Stark agreed with this recommendation and rejected Xoft’s “proposition that Judge Thynge placed too much weight on the fact that Xoft is incorporated in Delaware and too little weight on the fact that Zeiss’s headquarters is in Northern California.” Id. at 2. Judge Stark found that “Judge Thynge thoughtfully explained that the convenience of witnesses and location of sources of proof -which are considered only to the extent that they are ‘unavailable’ - were either ‘neutral’ or weighed ‘only slightly in favor of transfer’” and “made clear that, in the Third Circuit, a plaintiff s choice of forum -which Xoft concedes is a ‘paramount consideration’ - should not be lightly disturbed.” Id. at 3. (Read more about Judge Thynge’s denial of the motion to transfer here.) The Federal Circuit considered the argument that “the district court placed too much emphasis on the plaintiff’s choice of forum” and refused to grant mandamus. See In re Xoft, Inc., Misc. Doc. No. 983, at 3 (Fed. Cir. Aug. 19, 2011). The Federal Circuit specifically ruled that “[i]n the Third Circuit, that choice is afforded considerable weight and should not be lightly disturbed. The district court properly considered the relevant factors for a transfer motion and determined that the factors did not strongly favor transfer.” Id.

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November 28, 2011

Eleventh-Hour Motion to Amend to Add Affirmative Defense Held Timely

In Pfizer Inc., et al. v. Teva Parenteral Medicines, Inc., et al., C.A. No. 10-37-GMS (D. Del. Nov. 21, 2011), the Court granted the defendants’ motion to amend to add an obvious-type double patenting defense, filed on the last day for amendments to the pleadings under the amended scheduling order. The plaintiffs argued they would be prejudiced by the defendants’ last minute amendment, and that there was no reason for defendant’ to have waited as long as they did to amend. Id. at 3-4. The Court rejected the plaintiffs’ argument, and in a footnote reminded the plaintiffs that they chose not to oppose the defendants’ previous motion to amend the scheduling order to extend the deadline for amended pleadings. Id. at 6 n.13. Although the defendants’ motion to amend came on the last day possible under the amended scheduling order, the plaintiffs’ non-objection to the extension of that deadline undercut their claims of prejudice. “Specifically, while Teva could have sought to amend its Answer to include this defense earlier, it filed this motion within the time allotted by the court—and unopposed by the plaintiffs—for such amendments.” Id.

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November 18, 2011

Motion for Jurisdictional Discovery Granted: Foreign Parent and the Stream-of-Commerce Theory

In Eastman Chemical Co. v. Alphapet Inc., et al., C.A. No. 09-971-LPS-CJB (D. Del. Nov. 18, 2011), the plaintiff offered three arguments in support of its motion for jurisdictional discovery to determine whether the Court could exercise personal jurisdiction over a Thai parent company defendant. Judge Burke first rejected the notion that the Thai parent was bound by a forum selection provision contained in an agreement entered into by one of the parent’s subsidiary co-defendants, explaining that the plaintiff could advance no non-frivolous argument that the Thai parent was bound by that provision because (1) the parent was not a third party beneficiary of the agreement containing the provision, id. at 13-17, and (2) there was no suggestion that the parent received any direct monetary or non-monetary benefit from the agreement containing the provision such that it could be considered “closely related” to the agreement containing the forum-selection clause. Id. at 19-25. Judge Burke next rejected the plaintiff’s argument that discovery should be permitted to show that the Thai parent was subject to general jurisdiction, through an agency theory, based on its subsidiary’s continuous and systematic contacts with Delaware. Although the plaintiff alleged sufficient facts to suggest an agency relationship, the plaintiff “offer[ed] no evidence suggesting that the subsidiaries in question have any . . . significant Delaware contacts.” Id. at 28-30. Finally, the Court considered whether discovery should be permitted to determine whether the Thai parent could be subjected to personal jurisdiction in Delaware based on the stream-of-commerce theory. Judge Burke outlined Delaware’s “unique” stream-of-commerce body of law, explaining that jurisdiction may be found where there is a showing of “(1) an intent to serve the Delaware market; and (2) that this intent results in the introduction of the product [at issue] into the market and that plaintiff’s cause of action arises from injuries caused by that product.” Id. at 33 (quoting Belden Techs., Inc. v. LS Corp., 626 F. Supp. 2d 448, 456 (D. Del. 2009) (alteration in original)). Judge Burke emphasized that under the second prong, the relevant inquiry is not whether the defendants sold their products in Delaware, but rather “whether there are any Delaware sales of Defendants’ . . . products, or of other products that incorporate Defendants’ . . . products (even if those products themselves are not directly sold or marketed in Delaware).” Id. at 34 (emphasis added). Based on that standard, Judge Burke granted-in-part the plaintiff’s motion and permitted limited discovery into whether the Thai parent could be subjected to personal jurisdiction in Delaware based on the stream-of-commerce theory in connection with the “sales and distribution of . . . products in the U.S. and Delaware.” Id. at 38.

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