A jury recently returned a verdict in the battle between Leader Technologies, Inc. and Facebook. By its verdict, the jury found that Facebook literally infringed Leader's '761 patent. But the jury also found that Facebook demonstrated the invalidity of the patent-in-suit, both on the grounds of prior public use and the on-sale bar.
In a comprehensive opinion addressing a multitude of pretrial motions, district judge Sue L. Robinson offered a key insight into her practice admitting the PTO's reexamination record at trial.
As part of its analysis on a motion for summary judgment of invalidity, the Court explained why this record is inadmissible, at least when a jury is the factfinder:
"It is generally not the court's practice to admit the reexamination record as trial evidence. As the rejections on reexamination are not binding, they are generally not relevant to the issues to be tried. Almost always, such evidence is more prejudicial than probative, and creates jury confusion vis a vis the complex invalidity standards they are asked to apply - for example, that patents enjoy a statutory presumption of validity." (slip op. at 33, n.31)
It will be interesting to see whether the Court also follows this practice in non-jury trials.
In one of his last acts as a judicial officer, now-retired district judge Joseph J. Farnan Jr. issued a decision resolving a contractual ambiguity of major proportions. The underlying IP transfer agreement called for the conveyance of "patent rights" between the counterparties listed on "Schedule A." The only problem was that Schedule A never existed; instead the parties drafted a "Schedule B - Patent Rights."
As a result, Defendants in the infringement litigation claimed that, in the absence of Schedule A, the patents-in-suit were transferred automatically. The result? Plaintiff did not have standing to enforce its rights to the patents-in-suit.
The Court rejected this assertion out of hand, in part because a paralegal who created Schedule B testified that she meant to call it Schedule A:
"While the Court understands Defendants' concerns with Schedule B, the Court is persuaded . . . that Schedule B was, in fact, intended to be Schedule A and was used by the parties as Schedule A. In making this determination, the Court credits the testimony of Kate Maxwell and finds that Schedule B was mistitled and was intended to be Schedule A. [This] testimony concerning the creation of the document and its storage as a computer file supports its authenticity."
Notable for litigators is the procedure followed to cure the ambiguity and establish the document's authenticity: have the preparer testify to the error and the use of the document.
Judge Robreno: Motion for Summary Judgment GRANTED after claim construction order found claim invalid under means plus function analysis
On August 4, 2010, Judge Robreno granted defendants' motion for summary judgment. In his June claim construction order, Judge Robreno found that certain claims were indefinite under 35 U.S.C. § 112, ¶ 6, because the means-plus-function claims did not receite sufficient structure. As such, "the claims, and by extension the patents-in-suit, are indefinite as a matter of law[,]" thereby warranting a grant of defendants' motion for summary judgment. Inventio AG v. ThyssenKrupp Elevator Am. Corp., C.A. 08-874-ER, at n.1 (D. Del. Aug. 4, 2010).
Judge Thynge: Finding in favor of plaintiff after bench trial on issues of inequitable conduct and patent misuse
In Cordance Corp. v. Amazon. com, Inc. et al., C.A. No. 06-491-MPT (D. Del. July 23, 2010), Judge Thynge recently presided over a bench trial on defendants’ claims that plaintiff was guilty of inequitable conduct. During prosecution of the patent in question, the patent inventor swore that he conceived the invention prior to the effective date of another patent that formed the basis for the PTO's rejection of the patent application. Id. at 7. Defendants argued that the patent inventor “intentionally misled the PTO” by making several misstatements. Id. at 12. Judge Thynge ultimately found, however, that defendants’ “purported examples of inconsistent testimony” and “lack of factual support for [the patent inventor’s] declaration to the PTO that he was diligent in reducing his [invention] to practice[,]” among other things, were insufficient to prove intent to deceive by clear and convincing evidence. Id. at 27-34.
In Cordance Corp. v. Amazon. com, Inc. et al., C.A. No. 06-491-MPT (D. Del. July 23, 2010), Judge Thynge denied Cordance Corp.'s request for an injunction or, in the alternative, for a royalty for ongoing damages. Amazon was found by a jury to infringe two valid claims of Cordance's U.S. Patent No. 6,757,710, which covers one-click purchasing technology. You may remember Amazon's lawsuit against Barnes and Noble over the one-click purchasing technology; that patent was U.S. 5,960,411, which recently survived reexamination. Cordance's one-click patent apparently preceded the Amazon one-click patent.
The case was bifurcated but, while an appeal is pending, Cordance moved for an injunction. The Court denied the injunction because of a lack of irreparable harm - Cordance has no competing product, and any harm can be remedied by monetary damages. Cordance's request for ongoing royalties was also denied, without prejudice. According to the Court, that issue will be better dealt with in the damages portion of the trial, after the Fed. Circuit rules on the appeal.
The District of Delaware has announced its newest panel of special masters. The five on the panel, three of whom are former judicial officers, are:
Vincent J. Poppiti
David A. White
Louis C. Bechtle
B. Wilson Redfearn
Richard K. Hermann
The panel members, who serve "at the pleasure of the Judges of the Court," are eligible to hear and resolve discovery disputes in intellectual property cases.
After a jury trial returned a verdict in favor of plaintiff, Judge Farnan recently presided over a bench trial on the issue of plaintiff’s standing. The Dow Chemical Company v. Nova Chemicals Corporation (Canada), et al., C.A. 05-737-JJF (D. Del. July 30, 2010). Plaintiff and its subsidiary entered into an agreement to transfer certain patent rights from plaintiff to the subsidiary. The issue before Judge Farnan was whether this agreement transferred ownership of the patents-in-suit such that plaintiff no longer had standing. Id. at 3. Judge Farnan concluded that plaintiff was the legal owner of the patents at all relevant times throughout the litigation. Id. at 6. Patents were transferred under the agreement once they were listed on a Schedule A to the agreement. Id. Defendants argued that the patents were transferred because there was no Schedule A to the agreement. Id. at 7. However, plaintiff presented evidence that a document entitled “Schedule B Supplement – Patent Rights” was intended to be Schedule A and reference to Schedule B was a typographical error. Id.
District judge Joseph J. Farnan Jr. recently issued a strongly worded decision on willfulness, one that all litigators - and in-house counsel - should heed. The Court initially ordered a retrial on willfulness following the Federal Circuit's Seagate decision. In its subsequent post-trial decision, the Court made clear its thoughts on reverse engineering:
"Faced with this failed attempt [at a design-around] and despite its knowledge of the '075 patent and its importance to the industry, Fairchild chose the option that presented the most objectively high risk of infringement, namely to continue the development of its product by copying, through reverse engineering, the methods and features claimed in the patent."
The Court characterized such behavior concerning the '075 patent and the other patents-in-suit as "industrial stalking" and "blatant copying." The result, even with evidence of post-litigation opinions of counsel, was a textbook willfulness finding.