Delaware IP Law Blog

On Wednesday, District Judge Sue L. Robinson emphasized, as earlier D. Del. cases have, that inadequately pleaded state-law claims in patent cases will not be tolerated. In the underlying infringement litigation, plaintiff sought redress for trade-secret misappropriation and a variety of other state-law business torts. On a motion to dismiss, the Court explained that plaintiff's general allegations of theft and interference could not survive the Supreme Court's Twombly pleading standard.

On the trade secret count, the Court rejected as insufficient the assertion that defendant, after exposure to plaintiff's product via a customer, "seemed to develop the [new] product surprisingly quick[ly]." Similarly, the intentional interference count - and, by extension, the unfair competition claims - could not survive: "Accenture was not required to plead the precise nature of Guidewire's interference with its business opportunity, but it was required to allege some wrongful or improper conduct vis-a-vis . . . the only customer mentioned in Accenture's complaint."

The lesson? When considering whether to add state-law claims to an infringement complaint, make sure the details, independent of the infringement, are there.

Accenture Global Services GMBH v. Guidewire Software Inc., C.A. No. 07-826-SLR (D. Del. Oct. 8, 2008).

9/11: Alma Lasers Ltd. and Alma Lasers, Inc. v. Palomar Medical Technologies, Inc. (patent infringement)
9/16: Promos Technologies, Inc. v. LSI Corporation and Agere Systems, Inc. (patent infringement)
9/18: Autodesk Canada Co. v. Assimilate, Inc. (copyright infringement)
9/19: Packers Plus Energy Services Inc. v. Halliburton Energy Services Inc. (patent infringement)
9/24: Le T. Le v. City of Wilmington, Joseph F. Capadanno, Jr. and James J. O'Donnell (copyright infringement)
9/24: JSA Technologies, Inc. v. Informed Decisions Corporation d/b/a CASHNet (patent infringement)
9/25: Moberg v. 33TLLC, Cedric Leygues, Erwan Leygues (copyright infringement)
9/26: Procter & Gamble Co. and Hoffman-La Roche Inc. v. Teva Pharmaceuticals USA, Inc. (patent infringement)
9/26: LifeLock Inc. v Custom Direct Inc. (trademark infringement and unfair competition)
9/29: Unilin Beheer BV, Flooring Industries Ltd. sarl; v. Tarkett Inc., Clarion Boards Inc., Clarion Laminates LLC and AT Clarion Group, LLC (patent infringement)
9/30: Wilco AG v. Packaging Technologies & Inspection LLC (patent infringement)
10/6: Target Corporation v. Woodside RU Holdings Inc., Woodside United Acquisition LLC, Rehrig International, Inc., Woodside Capital, LLC and United Steel & Wire Co. (patent infringement)

The U.S. Supreme Court's decision in eBay, Inc. v. MercExchange, LLC continues to make it difficult to obtain injunctive relief. Judge Robinson, in Wellman, Inc. v. Eastman Chemical Co. , found that even if plaintiff had demonstrated a likelihood of success on the merits (which they did not), the court would not find irreparable harm. C.A. No. 07-585-SLR, Memo. Order (D. Del. Oct. 3, 2008). Wellman and Eastman were direct head to head competitors and plaintiff argued that one of the factors that forced it to file for Chapter 11 bankruptcy protection was the defendant's infringement of their patent. The court agreed that that plaintiff was "suffering financially" and the parties were direct competitors but stated that plaintiff did not dispute that the patented product only accounted for a small percentage of their business and they did not demonstrate that the loss of business was directly related to sales of the patented technology. The Court denied the motion for preliminary injunction finding that money damages would be a sufficient remedy. Id. at 5-6. Wellman, Inc. v. Eastman Chemical Co. , C.A. No. 07-585-SLR, Memo. Order (D. Del. Oct. 3, 2008).

Earlier this year, we reported on a licensee-standing decision by Magistrate Judge Leonard P. Stark. In that decision, the Magistrate Judge recommended that a licensee operating under an agreement subject to "pre-existing nonexclusive licenses" could nonetheless pursue litigation as an exclusive licensee. In a recent order, District Judge Sue L. Robinson has, for the most part, adopted that report.

In recognizing the licensee's standing to sue, however, the Court made explicit its thoughts on determining exclusivity:

"Defendant argues that the intent of the parties is not dispositive. I agree. Intent is but one factor a court looks to in determining whether a license agreement confers to the licensee a legally protected interest in the patent. The license at issue is an expression of plaintiffs' intent to grant . . . an exclusive license . . . ; therefore it is a factor that weighs in favor of finding standing."

Accordingly, it is the "entire license agreement," not just the parties' characterizations, that controls the inquiry.

TV Guide On-Line Inc. v. Tribune Media Services Inc., C.A. No. 05-725-SLR/LPS (D. Del. Sept. 30, 2008).

In a somewhat unusual procedural posture, Defendants moved the district court for attorneys' fees following a stipulated judgment of non-infringement after Judge Farnan issued his Markman Order construing the terms in favor of defendants. Prism Technologies LLC v. Verisign, Inc., C.A. No. 05-214-JJF, Memorandum Opinion (D. Del. Sept. 30, 2008). After the Federal Circuit affirmed Judge Farnan's Markman Order, defendants moved pursuant to 35 U.S.C. 285 to declare this matter an exceptional case and award defendants their attorneys' fees. Though admitting that the plaintiff could have done a "more thorough" pre-suit investigation, the Court found that the claim chart and analysis done by the plaintiff was "adequate to support its claims." Id. at 6. Judge Farnan also found that the plaintiffs' reasonableness in continuing to pursue the litigation was supported by its conduct, particularly its withdrawal of the infringement claims once it knew it could not support its claims under the Court's claim construction. Id. at 8. The Court therefore, found that defendants did not establish that this was an exceptional case.

Prism Technologies LLC v. Verisign, Inc., C.A. No. 05-214-JJF, Memorandum Opinion (D. Del. Sept. 30, 2008).

District Judge Sue L. Robinson has modified a recent damages order, reported by us last month, that accounted for the award's tax treatment:

"It is apparent from the papers submitted that the appropriate method of calculating prejudgment interest based on after-tax damages is fraught with opportunities for mischief. Indeed, each party has employed a different analysis in computing this aspect of the damages award. Under the circumstances, the court has determined that its attempt to adjust for taxes was ill conceived and, therefore, will adopt Cordis' computation of prejudgment interest, which (according to Medtronic) is consistent with a pre-tax assessment."

Cordis Corp. v. Medtronic Vascular Inc., C.A. No. 97-550-SLR (D. Del. Sept. 30, 2008).

That willfulness is not properly a part of a Hatch-Waxman case is not a controversial proposition anymore. In a recent opinion, District Judge Joseph J. Farnan Jr. reaffirmed a long line of cases that jettisoned willful infringement allegations grounded solely on ANDA filings.

An interesting aspect of the decision, however, is its procedural posture: defendant chose to employ the the pre-answer motion to strike under FRCP 12(f). By granting this type of "disfavored" motion - especially when defendant had already filed its answer - the Court signaled that the willfulness argument, in a typical ANDA scenario, will no longer succeed in D. Del.

Sepracor Inc. v. Dey L.P., C.A. No. 06-113-JJF (D. Del. Sept. 26, 2008) (Farnan, J.).

Thanks to Bob Matthews at Latimer Mayberry in Virginia for sending us a recent case similar to Judge Robinson's fees decision, posted below. Just two days before the Delaware decision issued, the Northern District of Ohio reached the same conclusion: "A finding of inequitable conduct regarding the '346 patent, even if made during the fee hearing, would compel a finding that the patent is invalid, notwithstanding that this issue was previously eliminated from the case by Vector's dismissal."

The result? Just as in the Delaware case, a prevailing party could not raise enforceability via a fees motion.

Euclid Chem. Co. v. Vector Corrosion Techs., Inc., C.A. No. 01:05 cv 80 (N.D. Ohio Sept. 24, 2008).

On Friday, District Judge Sue L. Robinson resolved an atypical motion for attorney fees. By its motion, a prevailing defendant sought reimbursement on the ground that plaintiff alleged inequitable conduct rendered the subsequent litigation frivolous. The catch? The Court never actually ruled on the unenforceability issue:

"Given the fact that plaintiff's claims of infringement asserted against defendants have been dismissed with prejudice, defendants are asking me to make a substantive determination as to the validity of a patent, under the guise of a motion for attorney fees, when a court would not otherwise have jurisdiction to do so. I decline to undertake such an analysis."

Novo Nordisk A/S v. Sanofi-Aventis, C.A. No. 05-645-SLR (D. Del. Sept. 26, 2008) (Robinson, J.).

Following a plaintiff's jury verdict and post-trial proceedings, including sanctions motions, District Judge Joseph J. Farnan Jr. has entered a final judgment in the St. Clair/Fuji infringement litigation. The Court entered judgment for St. Clair in the amount of $3,003,465.00, with interest and costs.

St. Clair Intellectual Property Consultants Inc. v. Fuji Photo Film Co. Ltd., C.A. No. 03-241-JJF (D. Del. Sept. 25, 2008) (Farnan, J.).