March 22, 2011

Judge Robinson: Defendant’s motion for summary judgment of noninfringment GRANTED and motion for summary judgment of invalidity GRANTED-IN-PART

In Automated Transactions LLC v. 7-Eleven, Inc. et al., C.A. No. 06-043-SLR (D. Del. March 9, 2011), Judge Robinson recently decided defendants and plaintiff’s cross motions for summary judgment. Judge Robinson granted defendants’ summary judgment motion because she construed the terms “internet” and “an internet interface” to require connection to a public network. Id. at 9-15. Because the accused products utilized a private network and did not connect to the internet, defendants did not infringe the patents in suit. Id. Judge Robinson found that defendants could not infringe literally or under the doctrine of equivalents because “construing ‘Internet’ to mean any network [public or private] would read the limitation out of the patent.” Id. at 12 (emphasis in original). Moreover, a finding that the private network was the equivalent of the Internet would read on prior art thereby violating the ensnarement doctrine. Id. at 13. Judge Robinson also granted-in-part defendants’ summary judgment motion on invalidity because the term “an Internet interface” in the mean’s plus function claims “d[id] not provide sufficient structure for performing the function of providing the customer with access to the Internet in order to complete the retail transaction.” Id. at 20.

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March 18, 2011

Judge Robinson: Defendants' Motions to Dismiss GRANTED (Limiting Plaintiff's Damages)

Two days ago, in Minkus Electronic Display Systems Inc. v. Adaptive Micro Systems LLC, Civ. No. 10-666-SLR (D. Del. Mar. 16, 2011), Judge Robinson granted Defendants' motions to dismiss for failure to state a claim, limiting Plaintiff's damages as to each Defendant unless Plaintiff amends its complaint to allege facts lacking in its original complaint. Id. at 7.

Plaintiff alleged that Defendants had directly infringed, contributorily infringed, and actively induced infringement of its patent disclosing a remotely-controlled electronic display system. Id. at 2-3. Defendants argued that Plaintiff had failed to satisfy the pleading requirements for indirect infringement because, inter alia, Plaintiff failed to allege facts sufficient to establish Defendants' knowledge and intent to indirectly infringe. Id. at 4. The court agreed, finding that Plantiff's pleading "resorts to a mere recitation of the elements for indirect infringement, which is insufficient." Id. at 7 (quoting Xpoint Techs. v. Microsoft Corp., 730 F. Supp. 2d 349, 357 (D. Del. 2010)).

Judge Robinson noted that, because Defendants "will be deemed to have knowledge of [Plaintiff's] patent as of the date the complaint was filed," and because "the only consequence (I believe) of this decision is limiting plaintiff's damages to the period dating from a defendant's first knowledge of [Plaintiff's] patent, the court will so limit plaintiff's damages as to each defendant unless plaintiff chooses to amend its complaint to allege sufficient facts as to an individual defendant's knowledge." Id. at 7.

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March 18, 2011

Sue L. Robinson: Summary Judgment Practice on Equitable Issues

In a recent decision, District Judge Sue L. Robinson explained her practice on adjudicating post-trial equitable claims. The Court noted that it "does not entertain motions for summary judgment on equitable issues, instead holding bench trials on such issues." In the underlying action, Defendant Pylon had filed its summary judgment motion on inequitable conduct following a jury trial on infringement and invalidity. According to the Court, "although Pylon styles its post-trial paper as a 'motion,' in reality Pylon has simply filed its post-trial brief in support of its claim of unenforceability." D. Del. practitioners take note.

Robert Bosch LLC v. Pylon Manufacturing Corp., C.A. No. 08-542-SLR (D. Del. Mar. 9, 2011) (Robinson, J.).

March 18, 2011

Judge Robinson: Keurig's Motion for Preliminary Injunction DENIED

On March 10, 2011, in Keurig Inc. v. Sturm Foods, Inc., Civ. No. 10-841-SLR (D. Del. Mar. 10, 2011), Judge Robinson issued a memorandum opinion denying Keurig's motion for a preliminary injunction and Sturm Foods's partial motion to dismiss.

Keurig had moved for a preliminary injunction based on its trademark infringement claims, trade dress infringement claims, and false advertising and unfair competition claims. Id. at 7.

Regarding the trademark infringement claims, Judge Robinson determined, based on the current record, the likelihood of confusion in the market by applying a multi-factor test previously adopted by the United States Court of Appeals for the Third Circuit (modified for cases involving a nominative fair use defense), finding that the balance of factors favored Sturm Foods. Id. at 14.

Regarding the trade dress infringement claims, Judge Robinson found, based on the current record, that Keurig did not show that the overall look of its products was consistent, which is required for a finding of trade dress infringement. Id. at 17.

Regarding the false advertising and unfair competition claims, Judge Robinson found, based on the current record, that Sturm Foods's statements did not necessarily imply that Sturm Foods's products were of equal quality to Keurig's products, especially given the lower price of Sturm Foods's products. Id. at 19-20. For this and other reasons, Keurig was unable to show a likelihood of success on the merits proving the literal falsity of Sturm Foods's statements. Id. at 20.

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March 18, 2011

Special Master Redfearn: Application for Amendment to Stipulated Protective Order DENIED

Earlier this month, in Spansion, LLC v. Samsung Electronics Co., Ltd., C.A. No. 1:08-CV-00855-SLR (D. Del. Mar. 2, 2011), Special Master Redfearn denied Spansion's application for an amendment to a Stipulated Protective Order withholding confidential business information from both parties' in-house counsel.

Spansion argued that its in-house counsel needed access to confidential business information so that its in-house counsel could provide informed direction to trial counsel. Id. at 3. Applying a balancing test set forth by the United States Court of Appeals for the Ninth Circuit, Special Master Redfearn balanced the risk of injury to Samsung due to inadvertent disclosure of confidential business information against the risk that withholding information would impede Spansion's prosecution of Samsung's claims. Id. at 4-5. Because the risk of injury to Samsung outweighed Spansion's need for in-house legal advice, Special Master Redfearn denied Spansion's application to amend the Stipulated Protective Order. Id. at 5.

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March 16, 2011

Three Young Conaway Attorneys Selected to Participate in D. Del. Trial Practice Seminar

Three attorneys at Young Conaway have been selected to participate in the District of Delaware's second annual Federal Trial Practice Seminar. Michele Sherretta Budicak and Jeffrey T. Castellano, of the firm's Intellectual Property Litigation Section, and Erika R. Caesar, of the Commercial Litigation Section, will take part in instructional sessions designed to hone D. Del. practitioners' courtroom skills. Topics include opening and closing statements, witness examination, courtroom presentation, and much more. More information about the program can be found in our January post announcing the Seminar.

Congratulations Michele, Jeff, and Erika!

March 15, 2011

Berle M. Schiller: Explaining The "Home Turf" Concept of Venue

Visiting judge Berle M. Schiller recently issued a venue decision notable for its analysis of the concept of "home turf." Defendant CardioMEMS, a Delaware entity, had no offices, employees, or records in the state. Plaintiff LUMC, a non-U.S. entity, had even less of a connection. Nonetheless, LUMC brought its infringement action in Delaware. CardioMEMS cried foul, and sought to move the litigation to its principal place of business.

The Court declined to transfer the action. Specifically, the Court was not persuaded by CardioMEMS's argument that LUMC had no legitimate reason to file in Delaware:

"CardioMEMS has overstated its case . . . . LUMC is a Dutch company and has no 'home turf' in this country. Defendant's argument, taken to its logical conclusion, would never afford deference to the choice of venue of a foreign plaintiff and leave the choice of venue largely in the control of the defendant. Additionally, it is not correct that LUMC has no reason to litigate this action here. [Among other reasons,] CardioMEMS is incorporated in Delaware."

In a field frequently litigated, this decision provides context to what it means, at least for foreign entities, to litigate on "home turf" for purposes of assessing a transfer motion.

Academisch Ziekenhuis Leiden v. CardioMEMS, Inc., C.A. No. 10-1127-BMS (D. Del. Mar. 9, 2011) (Schiller, J.).

March 14, 2011

Leonard P. Stark: Rejection of Mark Does Not Preclude Reliance Argument

Last week, District Judge Leonard P. Stark rejected an attempt to dismiss a trademark-fraud defense on particularity grounds. In the underlying action, Pennsylvania Engineering & Manufacturing (PEM) leveled a trademark-infringement claim against Southco. Southco counterclaimed, asserting that PEM defrauded the PTO while attempting to register the mark. PEM responded by arguing that the PTO could not have relied on PEM's allegedly fraudulent statements. Why? Because the PTO ultimately rejected PEM's application.

The Court disagreed with PEM. It noted that, while the Examiner rejected the registration, she left open the possibility that additional evidence could change the outcome:

"In the Court's view, these statements [by the Examiner rejecting the registration] do not show, as PEM contends, that the Examiner did not rely on the alleged misrepresentations identified by Southco. Rather, the Examiner merely expressed the view that the assertions in the application and affidavit were insufficient standing alone to establish acquired distinctiveness . . . . That the examiner sought additional evidence on the issue of distinctiveness does not, in the Court's view, establish that she did not rely on the initial evidence submitted."

With the reliance objection resolved, the Court concluded that Southco pleaded its counterclaim with sufficient particularity. By doing so, the Court also established that, at least under these circumstances, reliance in the trademark arena is not outcome determinative.

Postscript: For those of you wondering how the infringement claim made its way into the litigation, the PTO eventually registered the mark after receiving additional evidence.

Southco, Inc. v. Penn Eng'g & Mfg. Corp., C.A. No. 10-03-LPS (D. Del. March 7, 2011) (Stark, J.).

March 11, 2011

Visiting Judge Paul Diamond: Motion to Transfer to Southern District of Iowa, defendant’s principal place of business, DENIED

In Walker Digital, LLC v. Multi-State Lottery Association, C.A. No. 10-1113-PD (D. Del. Mar. 3, 2011), Judge Diamond denied defendant’s motion to transfer to the Southern District of Iowa where defendant is principally located. This patent infringement case involves defendant’s alleged use of plaintiff’s patented multiplier method in multi-state lottery games. Id. at 1. Judge Diamond went through each of the Jumara factors. Judge Diamond disagreed with defendant’s argument that plaintiff’s choice of forum deserved little deference because “plaintiff’s choice of forum is a paramount consideration[.]” Id. at 3 (internal citations omitted). Judge Diamond also found that the alleged infringing conduct occurred in every state participating in the lotteries at issue, including Delaware. Id. Judge Diamond also found that the convenience of the parties factor was neutral, but the convenience of witnesses weighed against transfer because plaintiff’s non-party witnesses reside or work in Connecticut or New York. Id. at 4-5. Finally Judge Diamond found that public interest did not favor transfer because time to trial in both jurisdictions was the same in both districts and Delaware has more experience adjudicating patent cases. Id. at 5.

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March 10, 2011

Judge Robinson: Teva’s Late Motion for Leave to Amend Pleading DENIED

On February 25th, 2011, in OSI Pharmaceuticals, Inc. v. Teva Pharmaceuticals USA, Inc., Civ. No. 09-185-SLR (Consol.) (D. Del. Feb. 25, 2011), Judge Robinson issued a memorandum order denying Defendants’ motion for leave to amend their pleadings. While the court’s scheduling order set January 29, 2010 as the deadline to amend pleadings, id. at 1, Defendants filed their motion to amend on October 25, 2010 — almost nine months after the deadline, id. at 2. Defendants argued that “good cause” existed for their late motion, citing the volume of documents produced by Plaintiffs, the specificity required by Federal Rule of Civil Procedure 9(b), and the “protracted discovery proceedings.” Id. Judge Robinson disagreed, noting that (1) the documents at issue had been available “well before October 2010[,]” (2) there were no citations to the depositions held in August 2010 in Defendants’ opening brief, and (3) Defendants had changed their legal argument in their letter submission. Id. at 2-3. While noting Rule 15(a)(2)’s provision that courts should “freely give leave [to amend pleadings] when justice so requires[,]” id. at 1, Judge Robinson concluded that “justice [did] not require leave to amend in this instance.” Id. at 3.

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