Delaware IP Law Blog

A quick perusal of our blog for the month of February might cause one to think that the three of us left for a month long ski trip in the Rockies. Rest assured, we were here in Delaware following the few district court opinions that issued. We are speculating that small number of opinions may be due to the case reassignments and readjusting of dockets based on the order issued by the Court in late January regarding the vacant judicial position. If that's the case, things are working their way out as quite a few opinions have issued in the last week or so. Postings to come in the near future…

The White House announced last Tuesday it has nominated U.S. Attorney Colm F. Connolly to fill the vacant judicial position in the District Court for the District of Delaware. The position was left vacant when former district court judge Kent A. Jordan was elevated to a position on the Third Circuit Court of Appeals. Judge Jordan was confirmed to the Third Circuit on December 8, 2006. The nomination of Colm Connolly will now proceed to the U.S. Senate for confirmation.

2/8: SWIMC Inc. v. Hy-Tech Thermal Solutions (trademark infringement)
2/12: Edwards Lifesciences AG and Edwards Lifesciences LLC v. CoreValve, Inc. (patent infringement)
2/14: Gannett Satellite Information Network, Inc. v. Office Media Network, Inc. (patent infringement)
2/22: W.L. Gore & Associates, Inc. and Gore Enterprise Holdings, Inc. v. Valeo-Sylvania L.L.C. and Label Technologies, Inc. (patent infringement)
2/25: L'Athene, Inc. v. Earthspring LLC and GreekIsland Labs LLC (trademark infringement, unfair competition)
2/25: SmithKline Beecham Corporation d/b/a GlaxoSmithKline v. Barr Pharmaceuticals, Inc. and Barr Laboratories, Inc. (patent infringement)
2/26: Ribbit Corporation v. Rates Technology Inc. (declaratory judgment for patent non-infringement)
2/26: JSA Technologies, Inc. v. Data Futures, Inc. (patent infringement)
2/29: Arysta LifeScience North America Corporation v. AXSS USA, LLC (patent infringement)
3/3: CRS, LLC v. Turner Broadcasting System, Inc. (patent infringement)

The District of Delaware is among the least reversed jurisdictions on claim construction rulings, according to a study conducted by David Schwartz, a professor at the John Marshall Law School in Chicago. Among the top five patent jurisdictions nationwide, Delaware (No. 4) had the lowest reversal rate: only 22.2 percent of the district's Markman decisions are overturned.

Among the top fourteen jurisdictions, only the Western District of Wisconsin, with 232 patent filings in the decade 1995-2005, had a lower reversal rate — 21.1 percent. But considering Delaware's 1112 patent lawsuits in the same time period, Delaware's reversal rate, at least according to this survey, is the lowest in the country among high-filing patent jurisdictions.

Read the study, published by Patently-O, here.

1/25: Endo Pharms. Inc. and Penwest Pharms. Co. v. Impax Laboratories, Inc. (patent infringement)
1/25: Forest Laboratories Inc., Forest Laboratories Holdings Ltd., Merz Pharma GmbH & Co. KGaA, Merz Pharms. GmbH v. Dr. Reddy's Laboratories, Inc., Dr. Reddy's Laboratories Ltd., Genpharm Inc., Interpharm Holdings Inc., Mylan Pharms. Inc., Ranbaxy Inc., Kendle Int'l Inc., Sun India Pharm. Industries Ltd. (patent infringement)
1/29: LivePerson, Inc. v. NextCard, LLC and MArshall Credit Strategies, LLC (patent non-infringement)
1/29: Belden Technologies, Inc. and Belden CDT (Canada) Inc. v. Superior Essex Inc. and Superior Essex Communications LP (patent infringement)
1/31: Boehringer Ingelheim Pharmaceuticals, Inc. v. Apotex Inc. and Apotex Corp. (patent infringement)
2/1: The Procter & Gamble Co. v. Teva Pharms. USA, Inc. (patent infringement)
2/1: David S. Miller v. Peggy R. Durney, Michael J. Durney and Laundry Loops (patent infringement)
2/1: Andrew Paul Leonard v. Stemtech Health Sciences Inc., et al. (copyright infringement)
2/6: CSC Brands, LP and Campbell Soup Co. v. National Harvest Food Group, LLC (trademark infringement)

One avenue to obtaining personal jurisdiction over a non-resident defendant is to assert the familiar "stream of commerce" theory of long-arm jurisdiction: the foreign party purposefully shipped the accused product through established distribution channels, thereby causing injury in the forum. But does the jurisdictional calculus change when the defendant is a patent holding company, operating solely through its subsidiaries? According to District of Delaware Chief Judge Gregory M. Sleet, it does not.

In a recent decision, the Court rejected the claim that a Danish holding company with no connections to Delaware can escape litigation in this district. By collaborating with its subsidiaries on the design, production, and distribution of the accused product, the holding company can properly be said to have directed its activities to the state.

"[The holding company] acted in consort with its subsidiaries to place the accused products in the stream of commerce; it knew that the accused products foreseeably would be sold in the United States and Delaware; and [its] conduct and connections with the forum state were such that it should reasonably have anticipated being brought to court here."

Notably, the Court accepted, as evidence of foreseeability, a subsidiary's website listing of a Delaware vendor selling the accused products. For purposes of personal jurisdiction, at least, a holding company now cannot hide behind the activities of its subordinate entities.

Energy Transportation Group, Inc. v. William Demant Holding A/S, C.A. No. 05-422-GMS (D. Del. Jan. 4, 2008) (Sleet, C.J.).

In the ongoing battle between Boston Scientific Corporation, Johnson & Johnson Inc. and Cordis Corporation, the District of Delaware recently handed BSC a victory, allowing it to proceed in four declaratory judgment actions each seeking a judgment on invalidity on one of four patents related to drug-eluting coronary stent technology. Boston Scientific Corporation v. Johnson & Johnson Inc. and Cordis Corporation, C.A. Nos. 07-333-SLR, 07-348-SLR, 07-409-SLR, 07-765-SLR, Memo. Op. (D. Del. Jan. 24, 2008). BSC manufactures a private-labeled version of a stent manufactured by Abbott Laboratories. There are four lawsuits currently pending in the District of New Jersey where Johnson & Johnson asserts infringement of the same four patents at issue in the Delaware litigation, however, the defendant in those cases is Abbott Laboratories.

Johnson & Johnson moved to dismiss all four actions for failure to allege imminent harm necessary for declaratory judgment jurisdiction and also moved to transfer the four cases to the District of New Jersey where its earlier-filed cases are pending.

The Court found that J&J's Jekyll & Hyde jurisdictional argument was not enough to warrant dismissal of the actions. In the District of New Jersey actions, J&J accuses Abbott Laboratories' stent product (identical to that of BSC) of infringing the same patents-in-suit despite the fact that Abbott's product was pending launch in 2008 and was only pending FDA approval. In moving to dismiss the Delaware actions, J&J argued that there could not be declaratory judgment jurisdiction because BSC is not currently marketing or selling the stent (although it has announced its intention to start selling in 2008) and is still awaiting FDA approval. Judge Robinson stated that J&J "can not have it both ways" and therefore denied their motions to dismiss

The Court further denied J&J's motions to transfer the cases to the District of New Jersey where its four earlier filed cases against Abbott are pending. The Court found so, even though the actions pending in the D. N.J. involve the same patents, the same accused products and the same legal issues. Judge Robinson acknowledged that BSC need not have been a party to the earlier filed litigation for the "first-filed" rule to apply, however, in its discretion the prejudice to BSC should the action be transferred was too great. The New Jersey court has yet to set a trial date where the Delaware cases have a trial date and schedule in place so BSC will be able to proceed without delay on its claims. Judge Robinson found J&J's argument on the risk of inconsistent rulings on the legal issues to be "entirely speculative" at this time and therefore not persuasive for transfer. Applying the remainder of the Jumara factors, the Court found that the cases should remain in Delaware.

And the battle rages on…

Crown Packaging Tech., Inc. v. Rexam Beverage Can Co., C.A. No. 05-608-MPT (D. Del. Jan. 22, 2007)

Rexam moved for partial summary judgment of invalidity and noninfringement. The Court granted both motions in part. As to noninfringement, the Court held that Rexam did not infringe the claim at issue under the doctrine of equivalants, granting Rexam's noninfringement summary judgment motion. Other noninfringement arguments were denied as moot. As to invalidity, although Rexam asserted several bases for invalidity (including § 102, § 103, lack of adequate written description, and indefiniteness), the Court granted summary judgment only on inadequate written description grounds, mooting the other invalidity bases.

Most of the opinion dealt with the inadequate written description issue, and I will spend the remainder of this post on that issue. Rexam argued that the claim at issue failed to comply with § 112, para. 1 because it did not include the "annular reinforcing bead" limitation contained in the patent's other asserted claims. Section 112, para. 1 requires the specification to "describe the invention sufficiently to convey to a person of skill in the art that the patentee had possession of the claimed invention at the time of the application." Lizardtech v. Regents of Univ. of Cal., 424 F.3d 1336, 1345 (Fed. Cir. 2005). Based on intrinsic evidence, inventor testimony, and expert testimony, the Court found that "[n]owhere is there an indication that the inventors possessed a can end having the other elements of claim 34 of the '875 patent [claim at issue] without also having an annular reinforcing bead." Op. at 13. Thus, the Court held that the specification did not support the broader claim without the "annular reinforcing bead" limitation, and the claim was therefore invalid for failure to comply with the written description requirement.

Let's pause for a moment and consider the analytical framework of this decision. I submit that this decision is correct under Federal Circuit precedent, but this issue – claims broader than the specification – fits more neatly under either the noninfringement or claim scope inquiries. Under the Gentry Gallery decision and its progeny, the Federal Circuit usually (depending on the panel) holds that a feature described in a patent as "essential" or "critical" to the invention must be present in that patent's claims. If such a feature is not present, the claim is invalid for lack of an adequate written description. That is, a claim is invalid if the inventor did not possess the claimed invention, which must contain the essential element, at the time of the application. The Court here, however, also correctly points out that an explicit statement of limitation is not required for the specification to limit the claims. See Op. at fn 46. (Patent prosecutors, of course, almost never describe a feature as the "invention" or "essential to the invention" for just this reason, as well as other reasons related to claim interpretation.) In this case, the patent specification did not describe the annular bead limitation as "essential" or "critical" to the invention; the specification merely failed to mention an embodiment that did not contain the annular bead. In fact, even the abstract of the patent at issue referenced the annular bead limitation. Op. at 6.

Under these circumstances, it seems fair to limit the patentee to embodiments containing the annular bead. After all, even the patent abstract contains the annular bead limitation. It seems strange to me, though, to analyze this issue as one of invalidity for lack of a written description. Before Gentry Gallery, Lizardtech (Op at fn 20), Enzo, and other similar cases, no one would have argued that this issue, claims drafted more broadly than the preferred embodiments, was an inadequate written description problem. You might have argued that the claim scope should be narrowed so as not to include the broader interpretation (claim scope) or that the reverse doctrine of equivalents applied such that the accused product would not infringe (noninfringement). Now, however, after Gentry Gallery and cases like it, we find ourselves in a situation where the Court is forced to determine what the inventor thought of as "essential" or "critical" features to his/her invention at the time of filing, and then strike any claims that do not include these features. It seems to me that this problem would be better dealt with either during the claim construction phase (Limit the scope of the claims based on the specification, being careful not import a limitation from the specification into the claims. This would allow the claims to be interpreted so as to preserve their validity – a canon of claim construction) or during the infringement determination (The reverse doctrine of equivalents, if it still exists, would prevent infringement where the claims are broader than the specification).

What do you think about accused infringers using the written description requirement as a sword in this manner? Should the Federal Circuit overrule Gentry Gallery? Or resurrect the reverse doctrine of equivalents? Please post your comments.

1/15: Tatoo Johnny, Inc. v. Matthew Walker (copyright infringement)
1/17: Validus Pharmaceuticals, Inc. v. Actavis South Atlantic LLC and Actavis, Inc. (patent infringement)
1/17: Applabs, Inc. v. Vocalocity, Inc. (copyright infringement)

In the case Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. January 22, 2008), Cordance Corp. has alleged that Amazon's trademarked "1-click" technology infringes its patent covering i-name technology. Amazon.com filed a declaratory judgment counterclaim alleging that Cordance's promotion of the i-name services infringes its patent covering software realted to personal address books. Cordance moved to dismiss this counterclaim and the Court subsequently denied the motion. See also posting on 12/04/07: Another "Case or Controversy" Decision Post- "MedImmune". This opinion addresses Cordance's motion for reconsideration and motion for leave to file a reply memorandum including a motion for Fed. R. Civ. P. 11(c) sanctions. Id. at 1.

The Court found that unlike the cases where there is a covenant not to sue and the patent holder abandons the infringement allegations, Amazon is not abandoning its claims here. Furthermore, Cordance has not stopped or agreed to stop all allegedly infringing activities. To divest the Court of declaratory judgment jurisdiction, the Court implies that the cessation of all potentially infringing activities either direct or indirect must be shown. Id. at 5.

Magistrate Judge Thynge further noted that Cordance's attempts in its motion to engage in the court in a facutal and legal analysis of Amazon's counterclaims would not succeed and that her analysis would stick to the issues at hand. Id. at 5.