March 26, 2010

Magistrate Judge Mary Pat Thynge: Pending Equitable Defenses Preclude Final-Judgment Certification

Magistrate Judge Mary Pat Thynge recently resolved a thorny question of finality for purposes of appeal. Faced with a situation in which a jury had returned verdicts of noninfringement and "non-invalidity," but equitable defenses remained outstanding, the Court denied the underlying request for Rule 54(b) certification:

"[I]n both of those cases [cited to support certification], the courts had already decided infringement, validity, and enforceability. This court has not ruled on Amazon's equitable defenses, so Amazon's declaratory judgment claims of noninfringement and invalidity will not be considered 'final.' " (emphasis in original)

Just in case there was any doubt, the Court emphasized that "[e]ven assuming arguendo that Amazon can gin up an argument that its claims are indeed 'final,' its pending equitable defenses, at a minimum, give this court just reason to delay" certification. As a result, the outstanding enforceability issues precluded, as a matter of law, immediate Rule 54(b) relief.

Cordance Corp. v. Amazon.com Inc., C.A. No. 06-491-MPT (D. Del. March 19, 2010) (Thynge, M.J.).

March 25, 2010

Magistrate Judge Stark Addresses the Meaning of "Actual Notice" for § 154

Earlier this week, in Arendi Holding Ltd., v. Microsoft Corp., C.A. No. 09-119-JJF-LPS (D. Del. Mar. 22, 2010), Magistrate Judge Stark issued a Report and Recommendation that Judge Farnan grant Microsoft's motion for summary judgment on Arendi's claims for provisional damages under 35 U.S.C. § 154(d). Section 154 allows a patentee to pursue "provisional" damages for the period before the patent is actually granted, reaching back to the date on which the application was published. Id. at 10-12. It requires, however, that the accused infringer had "actual notice of the published patent application." Id. at 11; 35 U.S.C. § 154(d).

The question is: what does "actual notice" mean? Magistrate Judge Stark determined that the statute focuses on the accused infringer, not the patent applicant, and so the notice need not have come from the patent applicant. Id. at 14. Further, the accused infringer need only have had actual notice of "the published patent application," rather than specific notice of infringement. Id. at 14-15. The statute does, however, require actual notice, not constructive notice, and that is what decided the issue here..

Under the facts before the Court, Microsoft received notice solely as part of a 7,000 page document production in another case. Magistrate Judge Stark found that to be insufficient:

[A] single-page Notice of Publication dropped into nearly 7,000 pages of document production is analogous to a published application being available in a database but not expressly drawn to the attention of the alleged infringer. The authors of the legislative history did not intend for § 154( d)' s actual notice requirement to be deemed satisfied by mere availability of a patent application in a public database.
Id. at 19. Thus, he recommended that Microsoft's motion for summary judgment on § 154 issues be granted. Id.

Arendi Holding Ltd., v. Microsoft Corp., C.A. No. 09-119-JJF-LPS (D. Del. Mar. 22, 2010)

March 24, 2010

Judge Thynge: Failure to meet and confer adequately under Local Rule 7.1.1. may result in denial of motion to compel

In this patent infringement action, defendant Philips moved to compel plaintiff Masimo to provide answers to certain interrogatories and document requests. Masimo Corporation v. Philips Electronics North America Corporation, et al., C.A. No. 09-80-JJF-MPT (D. Del. Mar. 23, 2010). The court had previously decided to bifurcate and stay discovery related to Philips’ antitrust counterclaims. Philips argued that its discovery requests implicated both patent and antitrust issues and, therefore, Masimo should be compelled to respond. Id. at 2-3. Judge Thynge determined that, although the parties met and conferred as required under Local Rule 7.1.1 to discuss Masimo’s objections to Philips' discovery requests, no evidence indicated “that the parties discussed whether or to what extent Philips’ discovery requests related to overlapping patent and antitrust claims, or Masimo’s resultant discovery obligations.” Id. at 3-4. Thus, Judge Thynge denied Philips’ motion to compel and ordered the parties to confer on the issues because “it was unclear to the court whether Philips made the requisite effort to reach an agreement with Masimo . . . .” Id. at 4.

Masimo Corporation v. Philips Electronics North America Corporation, et al., C.A. No. 09-80-JJF-MPT (D. Del. Mar. 23, 2010)

March 24, 2010

Judge Sue L. Robinson: Disqualification Order Not Final for Purposes of Immediate Appeal

Gauging "finality" for purposes of appeal can be tricky. Add to that inquiry the disqualification of a party's counsel, and the complexity only increases. District judge Sue L. Robinson shed light on the intersection of these two topics in a recent decision on a motion for reconsideration.

The Court earlier disqualified Apeldyn's counsel due to a conflict of interest. Apeldyn then sought reconsideration, or, alternatively, permission to appeal. The Court declined to reopen its earlier decision and, notably, foreclosed two opportunities for immediate appellate review.

On certifying an interlocutory appeal, the Court noted that "a reversal here . . . would leave the underlying substantive claims between the parties undisturbed" and that Apeldyn had failed to identify a "controlling question of law as to which there is a substantial ground for difference of opinion." As a result, resolving the disqualification issue now could not "materially advance the ultimate termination of the litigation" and thus could not give rise to interlocutory relief.

On certifying a final judgment, the Court similarly rejected the notion that disqualification presented an issue ripe for appeal: "The resolution of a collateral issue, such as the disqualification of counsel, cannot properly be considered a 'final judgment' with respect to an assertion of patent infringement."

With this decision, we can add disqualification of counsel to the collateral-order lexicon.

Apeldyn Corp. v. Samsung Electronics Co. Ltd., C.A. No. 08-568-SLR (D. Del. Mar. 12, 2010) (Robinson, J.).

March 23, 2010

Chief Judge Gregory M. Sleet: Jury Verdict

On March 11, 2010, a jury returned its verdict in LG Electronics U.S.A., Inc. v. Whirlpool Corporation finding that defendant Whirlpool did not literally infringe the asserted claims of LG's patent and that the patent was not invalid based on obviousness. C.A. No. 08-234-GMS, Verdict Form (D. Del. Mar. 11, 2010).

The same jury returned a verdict finding that plaintff and counterclaim defendant LG's side-by-side refrigerator product does infringe four of the 5 claims of the first Whirlpool patent-in-suit. On the other hand, the jury held that LG's French door refrigerator product does not infringe those same claims either literally or under the doctrine of equivalents. No willful infringement was found and the jury further found that the assert patent was not invalid based on written description, anticipation or obviousness. The jury awarded Whirlpool $1,786,925 in damages.

As to the second Whirlpool patent-in-suit, the jury found that LG infringed the asserted claims but that the patent was invalid based on anticipation. (The jury did not find the patent invalid based on obviousness.)

LG Electronics U.S.A., Inc. v. Whirlpool Corporation , C.A. No. 08-234-GMS, Verdict Form (D. Del. Mar. 11, 2010).

March 20, 2010

Judge Thynge: Motion for Reconsideration Denied

Yesterday, Judge Thynge issued a memorandum order on a motion for reconsideration in Robert Bosch, LLC. v. Pylon Manufacturing Corp., C.A. No. 08-542-SLR (D. Del. Mar. 19, 2010). Bosch had moved for reconsideration of a December 23, 2009 discovery motion, arguing that the Court had suffered from a "misapprehension of the facts." Id. at 2.

In the brief memorandum order, the Court denied the motion for reconsideration, clarifying that it had not, in fact, misunderstood the facts, and that Bosch had based its reconsideration argument on a "selective quote from the opinion [that] is inaccurate and incomplete," and that the "cherry-picked sentence relied upon by Bosch" was taken out of context. Id. at 4.

Robert Bosch, LLC. v. Pylon Manufacturing Corp., C.A. No. 08-542-SLR (D. Del. Mar. 19, 2010)

March 19, 2010

Judge Robinson: Motion to dismiss for lack of personal jurisdiction DENIED after the court attributed one defendant's contacts to the defendant in question

Plaintiffs filed this patent infringement action against defendants Anchen Pharmaceuticals and Anchen Inc. after the defendants filed their Abbreviated New Drug Application (“ANDA”) to manufacture generic versions of AMRIX®. In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litigation, MDL No. 09-2118 (D. Del. Mar. 12, 2010). Plaintiffs are a Nevada and a Swiss corporation. Defendant Anchen Pharmaceuticals is a California corporation with a principal place of business in California. Id. at 3. Defendant Anchen Inc. is a Delaware corporation, with a principal place of business in California. The relationship between the two entities was not clear to the Court but there was an overlap of senior corporate officers and plaintiffs alleged that the two entities held themselves out in the marketplace as one company. Id.

Defendants argued that the action should be dismissed as to Anchen Pharmaceuticals for lack of personal jurisdiction. Id. at 15. Plaintiffs argued that jurisdiction was proper because the Delaware contacts of Anchen Inc. should be attributed to Anchen Pharmaceuticals under agency theory. Id. at 18. “Because the allegations demonstrate[d] a nearer than arm’s length relationship, the court agree[d].” Id. Defendants did not dispute plaintiffs’ evidence that “both entities share[d] the same address and some of the same employees. Moreover, Anchen Pharmaceuticals’ statements to the United States Patent Office during the prosecution of its mark, [that both defendants, although separate legal entities, constitute a single source to the relevant public], evince exactly this type of relationship.” Id. Although Judge Robinson concluded that Anchen Pharmaceuticals’ activities in Delaware were not sufficient to establish personal jurisdiction, she found general jurisdiction present because submission of the ANDA constituted and act of infringement and because Anchen Pharamaceuticals’ drug sales in Delaware was a “substantial revenue” source for the company. Id. at 19.

In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litigation, MDL No. 09-2118 (D. Del. Mar. 12, 2010)

March 17, 2010

Magistrate Judge Leonard P. Stark Nominated to Fill D. Del. Vacancy

President Obama nominated Magistrate Judge Leonard P. Stark to fill the District of Delaware vacancy. The position has been empty since 2006 when Judge Kent A. Jordan was appointed to the Third Circuit.

For a copy of the White House Press Release see here.

March 12, 2010

Magistrate Judge Thynge: Bifurcation of Anti-Trust Issues Granted

Magistrate Judge Mary Pat Thynge issued a memorandum order yesterday in Masimo Corp. v. Philips Electronics North America Corp., C.A. No. 09-80-JJF-MPT (D. Del. Mar. 11, 2010), granting a motion by plaintiff Masimo to bifurcate and stay discovery of Philips' antitrust counterclaims. Id. at 10. Magistrate Judge Thynge noted that "Bifurcation of patent and antitrust claims is not mandatory, but is common," id. at 3-4, and that, absent bifurcation, the jury might have comprehension difficulties (from the volume of information, including 24 asserted patents) and might be subject to bias against the plaintiff (from the defendant's allegations of monopolization). Id. at 3. Discovery and related issues were also stayed, because "there is a possibility that a trial on [the] patent claims will potentially eliminate or simplify [the] antitrust counterclaims alleging anticompetitive licensing restrictions." Id. at 8. This opinion mirrors a decision by Judge Robinson that we reported last year.

Masimo Corp. v. Philips Electronics North America Corp., C.A. No. 09-80-JJF-MPT (D. Del. Mar. 11, 2010)

March 11, 2010

Judge Farnan: Claim construction in Leader v. Facebook

In Leader Technologies, Inc. v. Facebook, Inc., C.A. No. 08-862-JJF (D. Del. Mar. 9, 2010), Judge Farnan recently construed claim terms related to a patent involving “the ‘management and storage of electronic information,’ and specifically relat[ing] to ‘new structures and methods for creating relationships between users, applications, files and folders.’”

Plaintiff asked Judge Farnan to construe five claim terms, whereas defendant put forth three claim terms (down from its initial 31 claim terms, narrowed after the Markman hearing).

The construction of the eight disputed terms are as follows:

Context
“environment”

Judge Farnan found that this construction, proposed by plaintiff, was supported by the specification, and rejected defendants claim differentiation argument stating that “the specification should prevail over claim differentiation principles.” Id. at 10.

Component
“a computer-related entity, either hardware, a combination of hardware and software, software, or software in execution.”

Judge Farnan rejected defendant’s argument that means-plus-function treatment was appropriate thereby construing the term as expressly defined in the specification. Id. at 14.

Ordering
“organizing”

Judge Farnan rejected defendant’s proposed construction because it read in a limitation not supported by the claim or the specification. Id. at 15.

Traversing
“navigation according to a specific path or route”

Many-to-many Functionality
“two or more users able to access two or more data files”

Judge Farnan rejected defendant’s argument that the claim term was indefinite. Id. at 22-24.

Dynamically
“automatically and in response to the preceding event”

Judge Farnan rejected plaintiff’s argument that the claim term required no construction because it is commonly used in the field, “and one of ordinary skill in the art understands its meaning.” Id. at 24.

Metadata
Term given its plain and ordinary meaning

Judge Farnan determined that defendant’s proposed construction “import[ed] unnecessary and unwarranted limitations” into the claim term. Id. at 27. Furthermore, the proposed construction was not supported by the prosecution history. Id. at 28.

Accesses [the data]
Term given its plain and ordinary meaning

Leader Technologies, Inc. v. Facebook, Inc., C.A. No. 08-862-JJF (D. Del. Mar. 9, 2010)