It is black letter law that a party asserting patent infringement must have standing to sue before it can bring a claim for infringement. Enhanced Security Research, LLC v. Cisco Systems, Inc., C.A. No. 09-390-JJF, Memo. Op. (D. Del. June 25, 2010). Defendants in Enhanced Security Research, LLC v. Cisco Systems, Inc., brought a motion to dismiss arguing that pursuant to terms of a Purchase Agreement, the plaintiff did not maintain any rights to the patents-in-suit and “divorced nominal legal title to the patents-in-suit from the exclusionary rights to the those patents.” Id. at 3. The issue in this case came down to whether plaintiff can sue in its own name or must include the other party to the Purchase Agreement. Id. at 7. The court found that as a result of the Purchase Agreement, plaintiff retained title to the patents-in-suit and “the rights to use, exploit, enforce, [the patents-in-suit]” but “control over the exclusionary rights” resided with the other party to the Agreement. Id. at 9 (internal citations omitted). By virtue of the agreement, plaintiff is “prohibited from making any decision with respect to assertion of its patent rights, the conduct of litigation relating to the patents-in-suit, or the settlement of such litigation without the prior written consent” of the other party to the Agreement. Id. at 9. It further “relinquished its ability to freely assign, transfer, or license its rights in the patents-in-suit without the prior written consent” of the other party. Id. at 10. Therefore, under the Purchase Agreement, plaintiff lacks standing to bring the lawsuit and joinder of the other party cannot cure the defect. Id. at 11.
In a wide-ranging post-trial opinion issued on Tuesday, District Judge Joseph J. Farnan Jr. covered many topics, including standing, reissue, obviousness, and inequitable conduct. Of these, the Court's decision on inequitable conduct is particularly noteworthy for its explanation of the contours of deceptive intent:
"While in hindsight it may be attractive to construct a deliberate scheme of deceptive intent from the actions of these individuals given the success of CRESTOR in the marketplace, it is at least equally plausible from their testimony and the contemporaneous documentary evidence, that a scheme to defraud was the furthest thing from the minds of these individuals at the relevant time and that their vision was limited to the overwhelming demands they faced daily in their severely understaffed department. Viewed in this context, which the Court is persuaded is the appropriate context given the testimony and evidence, actions suggestive of malfeasance become no more than a string of mishaps, mistakes, misapprehensions and misjudgment on the part of inexperienced and overworked individuals."
By its reference to the marketplace, the Court highlighted its thinking on not only deceptive intent, but also on the intersection of commercial success and inequitable conduct.
See also the Court's errata order, posted here.
Judge Baylson issued a recent claim construction order construing the following terms:
"fixed upon a solid support according to an array comprising discrete regions"
"determining the possible presence and quantification of precipitate(s) in said discrete region(s)"
"correlating the presence and quantification of the precipitate(s) at the discrete region(s) with the identification and/or quantification of said target compound"
"colloidal gold particles coupled to the bound target compound"
"wherein the possible presence and quantification of a precipitate is obtained by reflection, absorption or diffusion of a light beam upon said precipitate"
"wherein binding of said targe compound to one or more of said multiple species of capture molecules leads to a catalytic reduction of a metal present in solution, and a formation of a metallic precipitate in one or more of said discrete region(s)
"wherein said computer is programmed to detect and/or quantitate said target compounds"
Update: Below is the order adopting the constructions. Here is Judge Baylson's July 12, 2010 memorandum opinion in support of the claim constructions.
On Friday, District Judge Joseph J. Farnan Jr. granted a request for a stay pending reexamination. While this outcome is not unusual in Delaware, the Court made the notable observation that the sheer number of prior art references at issue made simplification of the case more likely following scrutiny by the PTO:
"[I]t is noteworthy that every claim of both [patents-in-suit] is currently being rexamined by the same PTO Examiner, and that the PTO has already issued an office action rejecting all claims of the '975 patent. Also, inter partes reexamination of the '975 patent was granted in view of thirty prior art references . . . . Ex parte reexamination of the '236 patent was granted in view of fifteen prior art references. In these circumstances, the Court is persuaded that there is a strong likelihood that a stay pending reexamination will simplify the prior art issues and invalidity defenses which are likely to be raised in this action."
Although only one factor in the Court's analysis, the prior art in the aggregate helped persuade the Court that staying the proceedings would be the most efficient course.
Although parties to litigation enjoy a wide latitude in amending pleadings, the ability to change one's case theory midstream has its limits. A recent decision by Magistrate Judge Leonard P. Stark demonstrates these boundaries. In the underlying infringement litigation, Facebook sought to amend its false-marking counterclaim outside the confines of the scheduling order. Looking to Rule 16(b)'s "good cause" standard, the Court denied Facebook's request on diligence grounds.
Specifically, the Court emphasized Facebook's possession of the documents necessary to its proposed pleading prior to the amendment deadline:
"[I]t appears that Facebook possessed documents containing examples of how Leader marked its . . . products before it previously moved to add the false marking claim. Facebook provides no explanation for why, in light of this information, it could not reasonably have complied with the Scheduling Order. Accordingly, the Court concludes that Facebook has not shown that good cause exists to amend its responsive pleading with regard to the false marking counterclaim."
By doing so, the Court gave clear guidance to the litigator: diligence for purposes of Rule 16(b)'s "good cause" standard includes a timely review of an opposing party's document production.
In a related decision, Judge Farnan approved two discovery orders issued by Magistrate Judge Stark in this case - one on the common-interest privilege and the other allowing a restricted reopening of discovery. Read the decision here.
The Delaware Chapter of the Federal Bar Association honored district judge Joseph J. Farnan, Jr. today at its annual meeting in Wilmington. The event, also sponsored by the United States District Court for the District of Delaware, brought together a number of Delaware federal judges, past law clerks, and practitioners from around the country to celebrate Judge Farnan's twenty-five distinguished years on the bench. Judge Farnan, who is retiring in July, addressed the capacity crowd at the Hotel duPont's Gold Ballroom with an emotional and, as always, thoughtful speech.
All of us at the Delaware IP Law Blog express our heartfelt appreciation to Judge Farnan for his many years of public service and for his substantial contributions to the District and to the quality of justice in Delaware.
A recent claim-construction report and recommendation by Magistrate Judge Leonard P. Stark approached the dilemma of construing numerous terms in a creative way. Faced with over fifty disputed claim terms, the Court posed six questions that, when answered, would resolve the meaning of the claims:
(1) "Do the Abbott patents exclude an 'internal hydrophobic component' ";
(2) "Whether the 'treatment-lining' terms should be numerically defined";
(3) "Whether 'sustained release' can be defined in relation to 'immediate release'";
(4) "Whether 'significant increase' should be numerically defined";
(5) "Whether 'intermediate release' can be defined in relation to both 'sustained release' and 'intermediate release' ";
(6) "Whether 'about' should be numerically defined."
By grouping the disputed terms together in this way, the Court was able to resolve the parties' disputes without wading into the whole universe of claim terms.
Chief Judge Gregory M. Sleet recently reaffirmed the notion that fervid advocacy on behalf of a client cannot alone justify a Section 285 fee award. As part of the Court's post-trial findings on invalidity, the Court rejected a concomitant fee request, noting that awards of attorneys' fees under the statute are "not intended to be an ordinary thing in patent cases."
The Court continued that "hard-fought" litigation is distinct from vexatious or bad-faith conduct:
"Mylan's conduct in this case does not rise to a level of bad faith or vexatious litigation that warrants an award of attorneys' fees and costs. Indeed, the record demonstrates that throughout this litigation, both sides vigorously, and in apparent good faith, defended their respective positions."
The line between aggressive advocacy and incivility is difficult to draw. Nonetheless, litigators must consciously fix this boundary in each case. By refusing to assign blame in a contentious, but fair, litigation process, the Court has given the litigator comfort that fee-shifting is reserved for egregious tactics, not zealous advocacy.
See also the Court's post-trial findings on infringement here.
Mary Pat Thynge: Email Received at Eleventh Hour Need Not be Disclosed in Reply Brief Filed the Same Day
When does a party have an obligation to inform the Court in its motion practice of ongoing negotiations between the parties? According to Magistrate Judge Mary Pat Thynge, not at the "eleventh hour."
Shortly before defendants in the underlying infringement action filed their reply brief on a letter-of-request motion, plaintiff emailed defendants as part of an ongoing discussion between the parties about the outstanding request for international discovery. In a later sur-reply, Pronova claimed that defendants ambushed it by failing to note this contemporary correspondence.
In a strongly worded statement, the Court refused to assign any impropriety to defendants' actions:
"[T[he court makes little of the fact that the defendants' reply, which was filed at 7:32 p.m. (EST) . . . makes no mention of revisions Pronova suggested in an email sent to the defendants that same day at 3:49 p.m. (EST). Pronova's argument that such action by the defendants is improper strikes the court as misguided, disingenuous, and evidencing, at best, an ignorance of the regularities of motion practice."
In effect, the Court continued, "[t]o do so would only encourage the sending of emails in the eleventh hour prior to filing deadlines, and the court sees no need to nurture such a perversion of this court's local rules."
Judge Robreno recently issued a claim construction opinion in a case involving 2 patents and nearly 30 disputed claim terms. The patents involve technology related to elevator installation. The disputed claim terms included the following:
“a device for temporarily operating an elevator installation during modernization”
“a system for modernizing an elevator installation"
"a method for modernizing an elevator installation"
"at least one of [A] and [B]"
“floor terminal . . . operative for at least one input of destination call reports and recognition of identification codes of passengers"
“floor terminal . . . for at least one of the input of destination call reports and for recognition of identification codes of users”
“computing unit . . . for at least one of evaluating the destination call reports and association of destination floors with recognized ones of the identification codes”
"recognition of identification codes of passengers"
“interrupting at least one existing electrical floor call transmitter line between at least one floor call transmitter and the elevator control”
“interrupting at least one existing car call transmitter line between at least one car call transmitter and the elevator control”
“the elevator control being disconnected from the hall call transmitters and the car call transmitters of the elevator installation”
"existing electrical floor call transmitter line"
"existing car call transmitter line"
"floor call transmitter line input"
"car call transmitter line input"
"hall call transmitters"
"in a modular manner"
"performing said steps a. through c. [of claim 1] for each elevator car and associated elevator control of an elevator installation in succession whereby the elevator installation is modernized in a modular manner”