August 2, 2010

Judge Joseph J. Farnan, Jr.: Pleading a Copyright Infringement Action

Plaintiff filed a motion to dismiss a copyright infringement action over audio compression technology. Vianix LLC v. Nuance Communications, Inc., C.A. No. 09-348-JJF, Memo. Op. (D. Del. July 20, 2010). Defendant argued that plaintiff failed to state a claim upon which relief can be granted because plaintiff “has not identified the specific original works” that form the basis of their claims and because it has not “identified specific acts” that are actionable as infringement. Id. at 3. The court found that plaintiff’s complaint “sufficiently pleads which specific original works are the subject of its copyright claims” because it identifies the accused works as “four computer programs, in the form of source code, embodying the MASC Technology” and lists the four copyright registrations, in addition to alleging that plaintiff provided a number of the accused works to the defendant in “object code” and that there were seven specific products since 2005 that incorporate the accused works. Id. at 7-8. The court further found that plaintiff alleged specific acts of infringement when it alleged that defendant’s “making and storing [] ‘archived copies of its own products, including versions that contain Vianix’ including the Subject Works” were acts of infringement. Id. at 9.

Vianix LLC v. Nuance Communications, Inc., C.A. No. 09-348-JJF, Memo. Op. (D. Del. July 20, 2010).

July 26, 2010

Special Master Bechtle: Contention Interrogatories - How much and when?

It’s always a looming question in patent litigation – who goes first in responding to contention interrogatories and how much information must be provided? Special Master Bechtle addressed just this issue in XPoint Technologies, Inc. v. Intel Corporation, C.A. No. 09-26-SLR, Special Master Order 14 (D. Del. June 25, 2010). In this case, the parties simultaneously exchanged responses to contention interrogatories, however, defendant argued that while it provided full and complete answers to the contentions plaintiff propounded on it, that plaintiff only provided some information and then waited until after receipt of defendant’s contentions to use that information and then supplement its own responses. Id. at 2. First, Special Master Bechtle stated that although the court’s scheduling order required that responses to contention interrogatories be filed on or before a date certain, there was no requirement that the responses be exchanged simultaneously. Id. at 3. Second, the Special Master disagreed with the plaintiff’s “theory that use of the word ‘first’ and the other words by the court in ¶2(c)(3) of its scheduling order means that a party with Rule 33 interrogatory answering responsibility can answer those interrogatories by providing a partial response.” Id. at 5. Rule 33 requires that the interrogatory “be answered completely and truthfully” and “must use all of the information a party has at that time…that allows the interrogatory to be fully responded to. The plain meaning of the Rule does not allow a knowing half answer, or a knowing partial answer, or some sort of temporary response.” Id. at 6. In this case, however, the defendant did not show any harm by plaintiff’s failure to comply to warrant dismissal of the claims and issues concerning products other than those included in its original interrogatory response. Id. at 12.

XPoint Technologies, Inc. v. Intel Corporation, C.A. No. 09-26-SLR, Special Master Order 14 (D. Del. June 25, 2010).

July 26, 2010

Judge Bartle: Motion to Transfer GRANTED

In a recent transfer opinion, Judge Bartle (sitting by designation from the E.D. Pa.) granted defendant Life Technologies Corporation’s motion to transfer to the Southern District of California. Boram Pharm. Co., Ltd. v. Life Technologies Corp., C.A. No. 10-31-HB, Memo. (D. Del. July 14, 2010). This was not a case where the plaintiff’s home turf is Delaware, since Boram is a South Korean company. The court found that the “critical factors” weighing in favor of transfer in this case are the “convenience of the parties and the witnesses.” Id. at 3. Specifically, Life Technologies demonstrated that 10 key witnesses are in the Southern California and all non-party witnesses are within that court’s subpoena power. Id. Furthermore, all of the “key research, testing, development, marketing, sales, and manufacture of the Accused Products” takes place in Southern California. Id. Also, although both parties are large corporations “and by implication can afford to indulge in litigation in this, the more expensive forum, it is no reason for the court to countenance this indulgence.” Id. at 4.

Boram Pharm. Co., Ltd. v. Life Technologies Corp., C.A. No. 10-31-HB, Memo. (D. Del. July 14, 2010).

July 23, 2010

Joseph J. Farnan: Source Code for Future Products Must be Produced

Discovery disputes over the production of source code often involve thorny issues of confidentiality. But sometimes those disputes are more basic, such as when a party outright refuses to produce certain code. In a recent decision, district judge Joseph J. Farnan Jr. addressed this type of dispute, and came down in favor of production.

On the underlying motion to compel, Imagine argued that it had no obligation to produce source code relating to its future products (as opposed to current products) because "of the likelihood that the products will change before they are released" and because movant BigBand "is not entitled to any damages from the future products."

The Court dismissed this contention, noting that Rule 26's relevancy standard is broad enough to encompass BigBand's discovery request: "[S]ource code of Imagine's future products is discoverable because it is reasonably likely to lead to evidence relevant to BigBand's infringement claim."

BigBand Networks, Inc. v. Imagine Comms. Inc., C.A. No. 07-351-JJF (D. Del. July 20, 2010) (Farnan, J.).

Also see the Court's related decision on a motion to amend and motion to dismiss.

July 22, 2010

Judge Farnan: Default Judgment Granted in Patent Infringement Case

On Tuesday, Judge Farnan granted a default judgment in a patent infringement case against Medical Skin Therapy Research, Inc. ("MSTR"). Tristrata Technologies filed suit againt MSTR on October 17, 2006 - three years, nine months, and thirteen days before the entry of default judgment. In that time, MSTR appears to have made no response at all to the Court, despite correspondence with Tristata showing that it was aware of the suit. The Court granted a default judgment, but did not grant Tristrata's requested $687,000 in damages plus attorney's fees. Instead, it ordered Tristrata to submit an itemized statement of damages and the basis for the damages, so that MSTR will have an opportunity to respond.

Tristrata Technology, Inc. v. Medical Skin Therapy Research, Inc., C.A. No. 06-644-JJF (D. Del. July 20, 2010)

July 22, 2010

Judge Farnan: Motion to Dismiss Granted Because Due To Plaintiff's Lack of Standing

On Tuesday, Judge Farnan issued an opinion in Enhanced Security Research, LLC v. Juniper Networks, Inc., C.A. No. 09-871-JJF (D. Del. July 20, 2010), dismissing Plaintiff's claims for lack of standing.

The question was whether the plaintiff held enough of the rights under the patent to allow it to bring a claim at all. The patent-in-suit had been transferred several times, and was subject to a 2007 "Purchase Agreement" in which Plaintiff had sold several exclusive rights under the patent to a third party, but had retained title. The Federal Circuit requires that a plaintiff or plaintiffs hold "all substantial rights" to a patent in order to bring a claim. Id. at 7-8.

Here, the Court determined that Plaintiff had transferred "all substantial rights" to the third party, including the exclusive right, as stated in the contract, to "initiate, maintain, manage, resolve, conclude and settle all arrangements and activities in connection with any and all licensing or litigation or enforcement efforts and/or Proceedings . . . relating to any of [Plaintiff]'s rights in and to any of the Patents." Id. at 8-9. Because the third party possessed "all substantial rights" relating to the patent, Plaintiff could not bring an action without the involvement of that party. Id. at 9-11. Thus, the Court granted Defendant's Motion to Dismiss.

Enhanced Security Research, LLC v. Juniper Networks, Inc., C.A. No. 09-871-JJF (D. Del. July 20, 2010)

July 19, 2010

Joseph J. Farnan: Amended Complaint Allowed to Stave Off Negative Case Law

A recent decision by district judge Joseph J. Farnan Jr. illustrates the broad scope of Rule 15's amended pleading provisions. In the underlying copyright-infringement action, Leonard sought to leave open the operative infringement date in response to negative case law raised by Stemtech during mediation. Stemtech argued that this late change in position was simply a gambit designed to avoid the limitations statute and forestall a winning summary judgment motion.

The Court acknowledged Stemtech's plight, but nonetheless permitted the amendment:

"While the circumstances cited by Stemtech give rise to the specter of bad faith, the Court concludes, at this juncture, that the inference is not strong enough to deny Leonard leave to amend . . . . [T]he deletion of specific date references from the proposed Amended Complaint will leave this issue open for further development during discovery and will preserve Stemtech's ability to defend this action on the basis of a statute of limitations defense or a defense under the case law cited by Stemtech during mediation."

By allowing Leonard to amend these crucial dates in the complaint, the Court reminded litigators that, in the absence of prejudice, Rule 15 allows parties an immense latitude in framing their claims for relief.

Leonard v. Stemtech Health Sciences, Inc., C.A. No. 08-067-JJF (D. Del. July 16, 2010) (Farnan, J.).

July 14, 2010

Jerome B. Simandle: Claim Construction Inappropriate on Motion to Dismiss

Visiting district judge Jerome B. Simandle issued a decision Monday that refused to construe a set of claims for purposes of resolving a motion to dismiss. By their motion, Defendant Trigen and another claimed that, based on the motion's record, their ear-drop solution could not infringe the patents-in-suit as a matter of law.

Recognizing that other jurisdictions have declined to engage in claim construction to resolve a preliminary motion, the Court rejected Trigen's attempts to evade the case law:

"Defendants attempt to distinguish these cases on the grounds that many involved efforts to introduce extrinsic evidence on a Rule 12(b)(6) motion, noting that here no party has offered extrinsic evidence nor documentation of prosecution history. This only serves to illustrate the point. The fact that the parties in this case have obeyed the procedural rules constraining Rule 12(b)(6) motions does not mean that the record is sufficiently complete to warrant construing the patent claim contrary to Plaintiffs' allegations of infringement."

The Court summed it up best by advising that it is possible to "envision a patent infringement cause of action for which patent claims could be construed on a motion to dismiss, but this is not such a case."

Deston Therapeutics LLC v. Trigen Labs. Inc., C.A. No. 09-809-JBS-KW (D. Del. July 12, 2010) (Simandle, J.).

July 12, 2010

Judge Stark: Motion for Preliminary Injunction GRANTED

In their motion for a preliminary injunction, plaintiffs sought to enjoin defendant from bringing to market defendant’s generic version of plaintiffs’ drug. Id. at 1. Plaintiffs’ motion was filed after the Court held its March 23, 2010 Markman hearing and after the parties informed the court that defendant planned an “at-risk launch” if its generic product received FDA approval. Id. at 4. Defendant agreed to not launch before May 31, 2010, and plaintiffs filed their motion for a preliminary injunction on April 2, 2010. In granting plaintiffs’ motion, Judge Stark found the following: (1) plaintiffs established likelihood of success on the merits based on, among other things, the label defendant proposed to the FDA for its generic product; (2) plaintiffs would be harmed irreparably due to lost market share, lost profits and price erosion; (3) harm to plaintiffs outweighed any harm defendant might suffer due to the injunction because, among other things, defendant would still be entitled to its 180-day period of exclusivity; and (4) the public interest would be served because “the public interest in recognizing Plaintiffs’ patent rights, and more generally promoting continued, large-scale investment in research and development of new pharmaceuticals, outweighs the public’s interest in promoting generic, low-cost alternatives to branded pharmaceuticals.” Id. at 7-38. Judge Stark also ordered plaintiffs to post a $26 million bond in the event that defendant was wrongfully enjoined. Id. at 39-40.

The Research Foundation of State University of New York, et al. v. Mylan Pharmaceuticals Inc., C.A. 09-184-...

July 12, 2010

Judge Farnan: Damages opinion

Judge Farnan decided damages in the amount of $305,399 plus pre- and post-judgment interest in AU Optronics Corp. v. LG Display CO., et al., C.A. No. 07-357-JJF (D. Del. July 8, 2010). Judge Farnan found that AUO failed to establish that LGD willfully infringed, noting that since Seagate, there has been “tension in the case law . . . concerning whether the Court should look to prelitigation conduct only and/or post-litigation conduct in determining whether infringement was willful.” Id. at 2. Judge Farnan analyzed the evidence focusing on “prelitigation conduct of the accused infringer in the first instance” while taking into account “whether the accused infringer maintained plausible or credible defenses to infringement and invalidity.” Id. at 3 (internal quotations omitted).

LG Display CO., Ltd. V. AU Optronics Corporation, et al., C.A. No. 06-726-JJF(D. Del. July 8, 2010)