April 13, 2010

Magistrate Judge Leonard P. Stark: Court Denies Stay Despite Decline in Defendant's Financial Outlook

Magistrate Judge Stark denied defendant's request for entry of a 60 day stay based on a "drastic downturn in [defendant's] financial outlook." Aerocrine AB v. Apieron, Inc., C.A. No. 08-787-LPS, Order Regarding Request for Stay, at 1 (D. Del. Mar. 30, 2010). A court has discretion to enter a stay because of financial hardship on one of the parties. Id. at 1. Finding that there are hardships for both parties, including potential bankruptcy for the defendant and for plaintiffs, the possibility that defendant will continue to infringe the asserted patents and delay of resolution of this litigation which has been pending since 2008, the court chose to deny the stay. "Ultimately, [plaintiff] prefers to proceed with this litigation at the risk that doing so will force [defendant] to file for bankruptcy protection, rather than have the instant action stayed in hopes that the proposed asset sale will be consummated and permit [defendant] to proceed with the litigation." Id. at 2.

Aerocrine AB v. Apieron, Inc., C.A. No. 08-787-LPS, Order Regarding Request for Stay, at 1 (D. Del. Mar. 30, 2010).

April 13, 2010

Judge Joseph J. Farnan, Jr.: Motions in Limine

In addressing various motions in limine filed in a case set to be tried to the bench this month, Judge Farnan denied the pending motions in limine all addressing the exclusion of evidence at trial. UCB, Inc. v. KV Pharmaceutical Co., C.A. No. 08-223-JJF, Memo. Op. (D. Del. Mar. 9, 2010). In one motion, plaintiffs sought to preclude the defendant from asserting its on-sale bar defense because they did not assert such a defense during discovery. The court denied the motion, finding that plaintiffs did not demonstrate any "actual harm or prejudice" they will incur if the defense is allowed. Furthermore, plaintiffs could not point to any specific discovery they were unable to complete, and in fact responded to defendant's motion for summary judgment on the issue. Id. at 6.

Judge Farnan denied another pending motion in limine on similar grounds finding that defendant was timely in asserting a specific non-infringement defense where it argued the general theory in summary judgment and claim construction. The court found that the issue has long been known and the fact that the "precise" argument was not "expressly disclosed" did not warrant granting the motion. Id. at 8.

UCB, Inc. v. KV Pharmaceutical Co., C.A. No. 08-223-JJF, Memo. Op. (D. Del. Mar. 9, 2010).

April 12, 2010

Judge Sue L. Robinson: Markman Opinion

In a case involving technology relating to wiper blades, Judge Robinson recently issued a claim construction order construing the terms set forth below:

- "component"
- "mounted to said concave surface of said support element"
- "mounted directly to the convex surface of said support element"
- "a leading edge face"
- "wherein each crosspiece disposed at the end sections of the two spring stripes is provided with a covering cap"
- "groove-like construction"
- "a wiper blade part"
- "wind deflection strip is disposed between and in contact with each respective end cap and the device piece"
- "base body"
- "bracing itself on the wiper blade"
- "detent shoulder"
- "pointing toward the other end portion"
- "cavities"
- "protrusions protuding;" "a protusion protruding"
- "long sides;" "long sides of the support element"
- "hook legs"
- "detent tooth that protrudes from the long side of the support element"
- "recess"
- "the face of the end of the support element"
- "inside wall"
- "pin passage"
- "tail space"
- "forwardmost free end"
- "rearward of said pin passage and said rivet passage"
- "rail-free hook insertion space"
- "cavity"
- "engagement tab"
- "outward lateral extent"

Interestingly, the court refused to construe the phrase "wherein said leading edge face is disposed on a face of said support element which faces away from the window" because the "phrase is unsupported by the specification and has no apparent plain meaning. Robert Bosch, LLC v. Pylon Manufacturing Corp., C.A. No. 08-542-SLR, Memo. Order, at 3 (D. Del. Mar. 30, 2010).

Robert Bosch, LLC v. Pylon Manufacturing Corp., C.A. No. 08-542-SLR, Memo. Order (D. Del. Mar. 30, 2010).

April 12, 2010

Judge Robinson: Defendants’ Motion to Transfer GRANTED

In Fuzzysharp Technologies, Inc. v. Nvidia Corp. et al., C.A. No. 09-872 (D. Del. April 6, 2010), Plaintiff filed suit after filing seven separate patent infringement actions, involving the same patents, against multiple defendants in the Northern District of California. Id. at 1. Defendants moved for transfer to the Northern District of California after, in one of the cases, the district judge decided summary judgment invalidating the patents-in-suit under In re Bilski, 545 F.3d 943 (Fed. Cir. 2009). Judge Robinson considered “whether it makes sense for this court to keep the case at bar, necessarily imposing a stay pending the Supreme Court’s review of In re Bilski and/or the Federal Circuit’s Review of [plaintiff’s related case].” Id. at 2. Judge Robinson determined that due to the prior filings in the Northern District of California and the “unusual circumstances[,]” transfer was warranted. Id.

Fuzzysharp Technologies, Inc. v. Nvidia Corp. et al., C.A. No. 09-872 (D. Del. April 6, 2010)

April 12, 2010

Judge Bartle: Attorney-client privilege WAIVED when advice of counsel is used as defense to a claim of inequitable conduct

In Brigham and Women’s Hospital Inc., et al. v. Teva Pharmaceuticals USA, Inc., et al., C.A. 08-464 (D. Del. Mar. 31, 2010), Judge Bartle considered whether the attorney-client privilege was waived by plaintiffs when answering certain of defendants’ interrogatories relating to defendants’ inequitable conduct counterclaims. Id. at 4-5. When answering the interrogatories, plaintiffs indicated that they relied on advice of counsel to determine what material was disclosed to the patent office during prosecution of the patents in question. Id. at 5-8. Defendants argued that plaintiffs “relied on advice of counsel as a ‘sword’ to defeat the intent prong of inequitable conduct[,]” but were also “improperly attempting to use attorney-client privilege as a ‘shield’ to deflect inquiry into [related] communications.” Id. at 8-9.

Judge Bartle first determined that Federal Circuit law on attorney-client privilege applied, rather than Third Circuit law, because the privilege issue was “closely related to the substantive issue of inequitable conduct[,]” which is within the realm of the Federal Circuit. Id. at 9-10. Although the Federal Circuit has not decided the issue of waiver in the context of the use of advice of counsel as a defense to inequitable conduct, Judge Bartle looked to cases involving willful infringement. Id. at 11. In the willful infringement context, the Federal Circuit has clearly established, “that a litigant who asserts reliance of the advice of counsel as a defense waives the attorney-client privilege with regard to all communications pertaining to that advice.” Id. at 12. Likewise, Judge Bartle determined that reliance on advice of counsel as a defense to inequitable conduct results in waiver of the attorney-client privilege as to communications between lawyer and client relating to plaintiffs’ failure to disclose certain information to the patent office. Id. at 16.

Brigham and Women’s Hospital Inc., et al. v. Teva Pharmaceuticals USA, Inc., et al., C.A. 08-464 (D. Del. Mar. 31, 2010)

April 7, 2010

Judge Robinson: No Misrepresentation to Call Puerto Rican Rum "Havana Club" Rum

Yesterday, Judge Robinson issued an opinion in Pernod Ricard USA LLC v. Bacardi U.S.A., Inc., C.A. No. 06-505-SLR (D. Del. Apr. 5, 2010). Plaintiff Pernod alleged that Bacardi "made false and misleading representations concerning the geographic origin of its 'Havana Club'-branded rum in violation of Section 43(a) of the Lanham Act." Id. at 1. The Court noted the lack of caselaw regarding the meaning of "geographic origin," and that the term is susceptible to two interpretations: place of present production, or place of historical origin / "heritage." In other words, does a "Havana Club" rum have to be presently manufactured in Cuba, or merely manufactured using a Cuban recipe by a company with Cuban roots?

After a brief discussion of the caselaw, the Court avoided the issue, holding that the Bacardi rum is not misleading on either count. It accurately displays "Puerto Rican Rum" or "crafted in Puerto Rico" on both sides of the bottle, id. at 16-19, and the Bacardi company and its rum recipe both have a Cuban heritage. Id. at 19-20. Plaintiffs argued that Bacardi had changed the recipe, negating the Cuban heritage; the Court recognized that there had been minor modifications to the recipe, but that the resulting product was almost identical. Id. at 21. Regarding any minor taste differences in the resulting product, according to the Court, "As the expression goes, 'if it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck.'" Id. at fn. 23. The Court also twice noted, on pages 20 and 21, that "The First Amendment protects defendant's ability to accurately portray where its rum was historically made - as opposed to claiming that the product is still made there."

Pernod Ricard USA LLC v. Bacardi U.S.A., Inc., C.A. No. 06-505-SLR (D. Del. Apr. 5, 2010)

April 5, 2010

Judge Robinson: Motion for Reconsideration Denied

Last August, we wrote about Judge Robinson's reversal a 2002 inequitable conduct decision in one of the Cordis Corp. v. Boston Scientific cases. Judge Robinson had initially found the two asserted patents invalid for inequitable conduct. Cordis appealed, won on appeal, and then prevailed again on remand. Boston Scientific then filed a motion for reconsideration, and Judge Robinson issued a memorandum opinion on Thursday addressing the motion. Cordis Corp. v. Boston Scientific Corp., C.A. No. 98-197-SLR (D. Del. Mar. 31, 2010)

Boston Scientific asserted that "the Federal Circuit's mandate clearly limited the court's inquiry on remand 'only to supplement and explain its prior findings on deceptive intent and taint," id. at 4, and that the Court "did not address all of the questions posed by the Federal Circuit," id. at 6. The Court disagreed on both counts, essentially holding that if the Federal Circuit had mandated that it review its prior findings, it must also be able to change its prior conclusion; a contrary interpretation would "leave the court in the untenable position of submitting for appellate review a factual record which is starkly inconsistent with the court's previous legal determinations." Id. The Court further held, as far as addressing individual questions, that its analysis did not deviate from the Federal Circuit's mandate.

Boston Scientific further argued that reversal as to one of the two patents was improper, because Cordis had failed to appeal the holding as to that patent. The Court again disagreed, holding that "Irrespective of Cordis' failure to explicitly place the enforceability of the . . . patent at issue [on appeal], the Federal Circuit's mandate directing the court to engage in a factual inquiry regarding deceptive intent - relevant to the enforceability of [both] patents - implicitly does so." Id. at 6-7.

Cordis Corp. v. Boston Scientific Corp., C.A. No. 98-197-SLR (D. Del. Mar. 31, 2010)

April 5, 2010

Magistrate Judge Stark: Opinions on Motion to Compel U.S. Depositions of Foreign Inventors

Magistrate Judge Stark issued several orders and memorandum orders last wednesday in Aerocrine AB v. Apieron, Inc., C. A. No. 08-787-LPS (Mar. 30, 2010), addressing inequitable conduct, stay of the litigation, and discovery issues. We have posts forthcoming on the other orders - this post addresses the discovery-related order.

In it, Magistrate Judge Stark dealt with a motion to compel depositions of various foreign inventors of asserted patents. Defendant Aperion moved to compel Aerocrine to produce each of 8 foreign inventors for depositions in the U.S. The Court granted four of the motions, and denied four. The inventors shared certain characteristics: all of them were co-inventors of a patent in suit, each was a co-founder of Aerocrine, and each had assisted with production. The deciding factor was the degree of control that Aerocrine could assert over the inventors. The Court granted the motion to compel as to the inventors who were either still working for Aerocrine as officers or directors, or who signed patent assignment agreements specifically requiring that they be available testify in relation to these patents.

Aerocrine AB v. Apieron, Inc., C. A. No. 08-787-LPS (Mar. 30, 2010)

April 1, 2010

Judge Stark: Inequitable Conduct Amendment Allowed

Magistrate Judge Stark recently issued a memorandum order in Aerocrine AB v. Apieron Inc., C. A. 08-787-LPS (D. Del. Mar. 30, 2010). The order granted a motion by plaintiff Apieron to amend their complaint to add inequitable conduct allegations, and denied defendant Aerocrine's motion for judgment on Apieron's pleadings alleging inequitable conduct.

The inequitable conduct allegations arose from the deposition of a non-party scientist in the field of the patents. The scientist explained that he had performed research directed to the same subject matter of the patents, and prior to their earliest filing date. The scientist also stated that he had presented his research at a conference attended by the inventors of the asserted patents, and that "it would be 'hard for [him] to imagine' that [one of the inventors] was not aware of his work, because [they] went to meetings together between 1993 and 1999, 'knew each other and talked about [the research].'" Id. at 5. According to the proposed amendment to the complaint, the inventors knew of the research presented at the conference, and the research anticipates every element of at least one (specific) claim of each of the patents. None of the inventors disclosed the research to the patent office.

The Court granted the motion to amend the complaint, because it "was filed less than a month after Apieron took [the scientist's] deposition and became aware of the basis for its allegations of inequitable conduct," and there was no undue prejudice or evidence of bad faith or a dilatory motive in their conduct. The Court also denied Plaintiff's opposing motion for judgment on the pleadings, holding that that these allegations, laid out with detail in the amended complaint, were enough to plead inequitable conduct with particularity as required by the Federal Circuit's Exergen decision. Id. at 22.

Aerocrine AB v. Apieron Inc., C. A. 08-787-LPS (D. Del. Mar. 30, 2010)

March 30, 2010

Judge Sue L. Robinson: Daubert and Renewed Motion for Summary Judgment in Dispute Over ProV1 Golf Balls

On remand from the Federal Circuit for re-trial on the issues of obviousness and anticipation, Judge Robinson denied defendant Acushnet Company’s renewed motion for summary judgment and Daubert motion, she granted in part and denied in part Acushnet Company’s motions in limine and granted plaintiff Callaway Golf Company’s motions in limine. Callaway Golf Company v. Acushnet Company, C. A. No. 06-091-SLR, Memo. Op. (D. Del. Mar. 3, 2010). The technology at issue in this case was Acushnet’s Titlest Pro V1, Pro V1* and Pro V1x golf balls. The Federal Circuit reversed the court’s entry of summary judgment of no anticipation, vacated the obviousness judgment based on irreconcilably inconsistent jury verdicts, and remanded for a new trial.

The court denied defendant’s motion for summary judgment on anticipation finding that the asserted piece of prior art known as the “Nesbitt” patent does not explicitly anticipate plaintiff’s patent. Defendant’s argument was that certain measurements taken on balata balls would “teach a person of skill in the art that a polyurethane cover must invariably have the same Shore D hardness.” The court found that “[a]side from attorney argument, no evidence (let alone Nesbitt) cited by Achushnet makes that causative leap, to wit, that if A equals B, and A equals C, then C equals B.” Id. at 7.

On remand, Acushnet renewed its Daubert motion to exclude the expert testimony of plaintiffs’ damages expert, Brian Napper. Defendant moved to disqualify Mr. Napper for (1) failing to create the “but for” world of lost profits starting at the first date of infringement; and (2) failing to account for what players using the infringing balls would play with in the absence of that ball (the so-called “premium market”). Specifically, Acushnet argued that the expert did not include in his analysis what defendant would have offered at the first date of infringement if the Pro V1 ball was not available, how the market would have responded to that offering or what the market would have looked like if they withdrew the Pro V1 in 2003. Id. at 12. Judge Robinson stated that “[t]o credibly demonstrate that Acushnet would have had viable, non-infringing alternatives to offer in 2001 – as well as to predict how the market would have responded to these alternatives by 2003 – is an exercise that may be appropriate, but certainly is not one that is mandatory in light of its speculative nature.” Id. at 13. The court further found the reasoning in Mr. Napper’s report to be grounded on “real world facts, and therefore, acceptable.” Id. “For any economic hypothesis to account for all variables is not possible, let alone required.” Id. (emphasis in original).
Defendant also argued that the expert calculated lost profits on sales by companies that do not own the patents-in-suit. In response, the court held that “where the profits of a wholly-owned subsidiary flow up to the parent, inclusion of such profits is appropriate.” Id.

The court granted defendant’s motion to exclude evidence of defendant’s new Pro V1 balls, which defendant offered as a non-infringing alternative, and therefore, defendant argued was relevant to commercial success and damages. The court found this evidence lacks foundation since it was not vetted through discovery and therefore the use of such evidence would be unduly prejudicial to plaintiff. Id. at 13 n.14.

Frequently, parties dispute how far a plaintiff can go in “bolstering” the validity its own patents. Plaintiff in this case, agreed that it would not reference the fact that three PTO examiners considered the patents-in-suit. The court further held that plaintiff should not make any reference to the on-going reexam of the patents-in-suit and that plaintiff cannot speculate as to the extent to which prior art that was before the PTO was actually considered. Id. at 14.

Callaway Golf Company v. Acushnet Company, C. A. No. 06-091-SLR, Memo. Op. (D. Del. Mar. 3, 2010).