August 17, 2011

Judge Sleet Claim Construction Order

In a recent ANDA case involving valganciclovir hydrochloride 450 mg tablets, Judge Sleet construed the term "compound 2-(2-amino-l ,6-dihydro-6-oxo-purin-9-yl)methoxy-3-hydroxy-lpropanyl-L-valinate hydrochloride in crystalline form" to mean "valganciclovir hydrochloride in a physical form having molecules arranged in a regularly repeating three dimensional pattern."

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August 17, 2011

Chief Judge Sleet: Post-Trial Motions Denied

On August 11, Chief Judge Sleet denied several post-trial motions in CNH America LLC v. Kinze Manufacturing, Inc., C.A. No. 08-945-GMS (D. Del. Aug. 11, 2011). A jury found in February that all of the claims of the two patents asserted by CNH were invalid as anticipated, and all but two of them were also invalid as obvious.

Patent-holder and plaintiff CNH brought a motion for JMOL or a new trial on invalidity. CNH presented a number of arguments – here are a few of the more interesting ones:

  • CNH argued that it was entitled to a new trial because defendant Kinze presented a previously-undisclosed video at trial. The Court found that this was merely a new copy of a previously-disclosed video, this time with better production values. Id. at 8-9.
  • CNH argued against anticipation and obviousness on various bases; the Court denied all of these, and characterized many of them as attempts by CNH to present late claim construction arguments. Id. at 11-16.
  • CNH argued that the jury must have erred in determining that certain claims were anticipated but not obvious. The Court rejected these arguments based on a statement by the Federal Circuit that a determination of non-obviousness does not necessarily foreclose anticipation. The Court also noted that Third Circuit precedent actually controls this issue, and does not support CNH’s position. Id. at 16-19.

Defendant Kinze also presented two motions:

  • Kinze moved for JMOL of obviousness as to the two claims that were anticipated but not obvious. The Court refused to rule on the substance of this issue, on the grounds that it would not affect the scope of the judgment (the Court did state, however, that the motions could be renewed if the case were reversed or vacated on appeal). Id. at 20-21
  • Kinze moved for attorney’s fees; the Court denied the motion, because there was nothing exceptional about this case. Id. at 21.

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August 17, 2011

Chief Judge Sleet: No Subject Matter Jurisdiction for Declaratory Judgment

On August 3, in Velcera, Inc. v. Merial Ltd., C.A. No. 11-134 (GMS) (D. Del. Aug. 3, 2011), Chief Judge Sleet dismissed one of three declaratory patent claims and its associated counterclaims based on a lack of subject matter jurisdiction. The plaintiff, Velcera, is subject to a contempt judgment and an injunction in a related action on the same patent in the U.S. District Court for the Middle District of Georgia. That judgment covered all of Velcera’s products, so, according to the Court, there was no “actual controversy between the parties. Any dispute regarding the Georgia court’s order is properly raised before that court of on appeal to the Federal Circuit.” Id. at n.4. Velcera’s other two declaratory claims were not addressed by the Georgia court, so they were unaffected by the ruling.

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August 17, 2011

Judge Robinson: Do Not Violate the Cardinal Rule That Evidence Not Vetted During Discovery Cannot Be Used at Trial

In Belden Technologies Inc. v. Superior Essex Communications LP, C.A. No. 08-63-SLR (D. Del. Aug. 12, 2011), a patent infringement case involving high performance data cables, Judge Robinson recently issued a memorandum opinion deciding several post-trial motions, including plaintiffs' and defendants' motions for JMOL and plaintiffs' motion for a permanent injunction. Id. at 1. Although Judge Robinson upheld most of the jury's verdict as supported by substantial evidence and thus denied most of the plaintiffs' and defendants' requested relief, each motion for JMOL was granted-in-part. Id. at 40.

First, the court found that "defendants presented an obviousness defense at trial based on the knowledge of one of skill in the art, which evidence was not vetted during discovery and to which plaintiffs objected." Id. at 13. In doing so, "defendants violated the cardinal rule of this court's trial practice, that is, evidence not vetted during discovery cannot be used at trial." Id. Thus, Judge Robinson held that "the court will retry the invalidity of [this claim], at defendants' expense and precluding their use of the knowledge of one of ordinary skill in the art to support their invalidity defense. Id. at 14.

Second, the court found that one of the asserted claims was rendered obvious as a matter of law by the combination of two prior art patents, stating that the secondary considerations of non-obviousness proffered by the plaintiffs were insufficient to preclude the court's obviousness finding. Id. at 28. The court noted that "plaintiffs cite no testimony as to whether $3 million, a small fraction of the $140 million in sales of cables with separators, is significant to constitute a 'commercial success' in the patent validity context." Id. Further, "plaintiffs failed to show a nexus between the commercial success and [the asserted claim]"; "[g]iven plaintiffs' admitted status as a 'market leader' for high speed communication cables . . . , sales are easily attributed to their leadership position and successful marketing campaigns." Id.

Finally, the court denied plaintiffs' motion for a permanent injunction, finding that "plaintiffs have failed to demonstrate irreparable injury, as well as the inadequacy of money damages[,]" and "any hardship to plaintiffs would be outweighed by that to defendants." Id. at 39-40.

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August 15, 2011

Judge Robinson: Order for Sanctions Modified Where Counsel Focused Deposition Efforts on Creating Record for Motion for Sanctions Instead of Obtaining Substantive Information

In Apeldyn Corp. v. AU Optronics, Inc., C.A. No. 08-568-SLR (D. Del. Aug. 2, 2011), Judge Robinson recently modified Special Master Poppiti's order for sanctions against a party that failed to adequately prepare its Rule 30(b)(6) designees for their depositions. Id. at 3-4. Although Judge Robinson "agree[d] generally with the fact that AUO's corporate designees were inadequately prepared," she found that "Apeldyn's counsel focused their efforts to create a record for the motion it ultimately presented, rather than in obtaining the substantive information noticed." Id. at 3. Thus, the court ordered AUO "to produce one or more substitute witnesses[,]" but held that the deposition must be limited "to the ten most important [noticed] topics (as identified by Apeldyn)[,]" that the "continued deposition shall be limited to ten hours[,]" and that "Apeldyn shall be responsible for its own costs and fees in connection with the deposition[.]" Id. at 4.

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August 10, 2011

Judge Sue L. Robinson: Motion to Amend to Add Inequitable Conduct DENIED

Defendant moved to amends its affirmative defenses and counterclaims to add two new theories of inequitable conduct (both concerning allegations that the applicants concealed or misrepresented the true inventorship of pending claims to the PTO) over six months after the deadline for amendment of the pleadings and after the close of fact discovery. Ashahi Glass Co., Ltd. v. Guardian Indus. Corp., C.A. No. 09-515-SLR, Memo. Op. (D. Del. Aug. 8, 2011). Defendant's delay was "largely unexplained" and the Court found that although the delay "is not egregious, allowing defendant's motion at this late stage would place an unwarranted burden on the court and prejudice plaintiffs in several respects, most notably, opening discovery for the purpose of allowing plaintiffs and opportunity to respond to the new claims cannot be accomplished while maintaining the current trial date." Id. at 6. Court, therefore, denied the motion.

Of note, Judge Robinson mentioned in a footnote that the Court is currently booked for trials through 2013 and therefore rescheduling a trial in 2011 or 2012 "would be a formidable task." Id. at 6, n.10.

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August 10, 2011

Judge Leonard P. Stark: Motion to Dismiss Counterclaims Based on Covenant Not to Sue in ANDA Case DENIED

In Bristol-Myers Squibb Co. v. Mylan Pharmaceuticals Inc., Mylan brought declaratory judgment counterclaims for invalidity and non-infringement against Bristol-Myers Squibb and Merck. C.A. No. 09-651-LPS, Memo. Op. (D. Del. July 11, 2011). In response, Bristol-Myers and Merck sent a proposed covenant not to sue to Mylan for infringement of two the patents asserted by Mylan in its counterlcaims (but not originally asserted by Bristol-Myers Squibb in its complaint). Id. at 6. Mylan did not respond to the proposed covenant and a motion to dismiss by Bristol-Myers Squibb and Merck followed based on lack of subject matter jurisdiction. Id. The Court denied the motion and found that a case or controversy exists because the covenant not to sue contained conditional language that would allow Bristol-Myers Squibb to bring suit if it determines that Myaln's Notice Letter was inaccurate. Id. at 9, 11. The Court stated, "By conditioning the covenant on BMS' own view of the accuracy of Mylan's representations, and by reserving to itself the right to sue Mylan for infringement of the Unasserted Patents based on Mylan's ANDA as it presently exists, BMS has failed to provide Mylan with the certainty to which it is entitled." Id. at 11.

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August 8, 2011

Judge Stark: Claim Construction; Request to Compel Withheld Documents DENIED

In Xerox Corp. v. Google Inc., C.A. No. 10-136-LPS (D. Del. Aug. 1, 2011), Judge Stark construed five disputed claim terms and two disputed order-of-steps requirements. The construed claim terms were:

“Selected document content”
“Classification label”
“Categorizing the selected document content using the organized classification document content for assigning selected document content a classification label”
“To restrict a search at the information retrieval system for information concerning the set of entities to the category of information in the information retrieval system identified by the assigned classification label”

Also, Judge Stark denied the defendants’ request to compel documents withheld by the plaintiff as privileged. The plaintiff had exchanged documents with a third-party patent licensing company and later withheld these documents, asserting a common interest privilege. Id. at 12-13. While the defendants argued that the plaintiff’s relationship with the third-party patent licensing company was “purely commercial, and, therefore, outside the scope of the common interest privilege[,]” Judge Stark noted that the third-party patent licensing company’s compensation from the plaintiff was based on a contingency fee. Id. This supported a finding that the plaintiff’s relationship was “an allied, uniform, agency relationship . . . sufficiently imbued with common legal interests in that it plainly relate[d] to litigation[,]” id. at 13., leading Judge Stark to deny the defendants’ request to compel the documents.

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August 5, 2011

Magistrate Judge Burke Appointed on August 4, 2011

Yesterday, Christopher J. Burke was officially appointed as the newest U.S. Magistrate Judge for the District of Delaware. The full order is below.

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August 4, 2011

Chief Judge Sleet: Patent Not Invalid for Obviousness-Type Double Patenting

In Eli Lilly & Co. v. Teva Parenteral Medicines, Inc., C.A. No. 08-335-GMS (D. Del. Jul. 28, 2011), Chief Judge Sleet ordered that the plaintiffs’ patent was not invalid for obviousness-type double patenting.

The Order was based on Chief Judge Sleet’s consideration of the parties’ proposed post-trial findings of fact and conclusions of law following a five-day bench trial in November 2010. The defendants argued that the patent at issue was invalid because, inter alia, examples in an earlier patent specification disclosed the utility of a particular compound as it pertained to making the compound in the later patent. Chief Judge Sleet disagreed with this argument for two reasons: (1) this was not a case in which “separate patents are sought for a claim to a compound and a claim to using that compound for the disclosed utility of the original compound[;]” and (2) the defendants impermissibly used examples from the earlier patent’s specification as if the specification were a prior art teaching in the obviousness-type double patenting analysis, which would have constituted “an improper use of hindsight knowledge of [the later compound] in determining whether [the later compound] would have been an obvious variant of [the earlier compound.]” Id. at 4-5.

Additionally, Chief Judge Sleet concluded that a person of ordinary skill in the art would not have “immediately recognized” the earlier compound as an intermediate used to make the later compound. Id. at 6. Nor would a person of ordinary skill in the art have a reason to make the later compound among the many other compounds suggested by the earlier compound because, during the relevant time period, the later compound was not a preferred compound and the changes suggested by the defendants would have yielded an “undesirable” result. Id. at 6-7.

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