December 22, 2009

Judge Stark: Two opposing personal jurisdiction decisions involving corporate parents and their subsidiaries

In this multidistrict litigation consolidating nine patent infringement actions, Judge Stark recently issued a Report and Recommendation Regarding Motions for Summary Judgment and to Dismiss and Order on Evidentiary Motions. In re Rosuvastatin Calcium Patent Litig., MDL No. 08-1949 (D. Del. Dec. 11, 2009). One such motion was Defendant Aurobindo India’s Motion for Summary Judgment of No Personal Jurisdiction. Id. at 5. Aurobindo India argued that if it is dismissed from the case, so must defendant Aurobindo USA because of the absence of “the necessary and indispensible Aurobindo India.” Id. However, Judge Stark agreed with plaintiffs that under Forest Labs., Inv. v. Cobalt Labs., Inc., 2009 WL 605745 (D. Del. Mar. 9, 2009), and considering the record, id. at 6-9, there was sufficient evidence to conclude that “Aurobindo USA ‘engages in [a] persistent course of conduct’ in Delaware, thereby establishing general jurisdiction.” Id. at 9 (citing 10 Del. C. § 3104(c)(4). Moreover, “[u]nder the alter ego and agency theories, these jurisdictional contacts of Aurobindo USA may be imputed to Aurobindo India.” Id.

A different result was reached when Judge Stark considered defendant Apotex Inc.’s Motion to Dismiss for Lack of Personal Jurisdiction or in the Alternative to Transfer to the Middle District of Florida. Id. at 10. Here, Judge Stark found insufficient contacts with Delaware but that transfer was warranted. Id. Judge Stark noted that “Apotex Inc. is a Canadian corporation with a principal place of business in Canada. It has no offices, facilities, telephone listings, bank accounts, or property in Delaware. It does not have employees, or do business, in Delaware.” Id. at 11. Although plaintiffs argued that defendant Apotex Corp.’s contacts with Delaware should be imputed to Apotex Inc., the same argument that was successful with the Aurobindo defendants, here, Judge Stark found that plaintiffs failed to meet their burden. Id. “Apotex Corp. generates its own revenue, with which it purchases the products it sells. Apotex Corp. decides which of Apotex Inc.’s approved products it will market. Apotex Corp. pays Apotex Inc. for administrative services rendered by Apotex Inc. and the two companies maintain distinct books, records, financial statements, and tax returns.” Id. at 11-12. Judge Stark subsequently transferred the suit against Apotex Inc. to Florida, where Apotex Inc. conceded jurisdiction exists. Id. at 12.

In re Rosuvastatin Calcium Patent Litigation, MDL No. 08-1949 (D. Del. Dec. 11, 2009)

December 21, 2009

Sue L. Robinson: How Waiver Can Affect a Motion for Reconsideration

Where is the line between rehashing arguments and offering new evidence in seeking reconsideration of a ruling? According to a recent decision by district judge Sue L. Robinson, the waiver doctrine can play a primary role in this determination.

In disposing of a request to recalculate a lost-profits award, the Court noted that the movant never raised its remittitur argument in the initial post-trial proceedings. As a result, the movant not only waived its ability to raise the argument, but also prompted a rebuke from the Court:

"The present motion reflects a fundamental misunderstanding of the limited appropriateness of motions for reconsideration. There is no alleged change in law or new evidence. A 'manifest injustice' does not result from the court's failure to consider arguments not properly made by defendant in its prior motion to amend the judgment. As this court has iterated in previous cases, a motion for reconsideration is not properly grounded on a request that a court rethink a decision already made."

Strong words to consider when formulating positions for a post-trial (or any) motion.

Siemens Medical Solutions USA Inc. v. Saint-Gobain Ceramics & Plastics Inc., C.A. No. 07-190-SLR (D. Del. Dec. 16, 2009) (Robinson, J.).


December 18, 2009

Judge Stark: Report and Recommendation Regarding Claim Construction

In Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., et al., C.A. No. 08-309-JJF-LPS (D. Del. Dec. 18, 2009), Judge Stark recently construed the following claim terms.

“multi-sampling . . . during an off-time of said switching signal”sampling two or more times during one off-time of the switching signal

“a controller to generate the switching signal and to control the switching signal in response to a first feedback signal associated with a voltage control loop and a second feedback signal associated with a current control loop”a controller to generate the switching signal and to control the switching signal in response to a first feedback signal associated with a voltage control loop and a second feedback signal, distinct from the first feedback signal, associated with a current control loop

“controlling a switching signal to regulate the connection of the electrical power to output terminals in response to a first feedback signal associated with a voltage control loop and a second feedback signal associated with a current control loop”controlling a switching signal to regulate the connection of the electrical power to output terminals in response to a first feedback signal associated with a voltage control loop and a second feedback signal, distinct from the first feedback signal, associated with a current control loop

“sampling a voltage . . . and a discharge time”sampling a voltage from the auxiliary winding of the transformer when the transformer is discharging

“frequency variation signal”an internal signal that cyclically varies in magnitude during a fixed period of time and is used to modulate the frequency of the oscillation signal within a predetermined frequency range

“frequency jittering”varying the switching frequency of a switch mode power supply about a target frequency in order to reduce electromagnetic interference

“means coupled to the control input for varying the switching frequency, including: one or more current sources . . . and a counter”Means-plus function term, with a function of “varying the switching frequency of the oscillator,” and a structure of a digital-to-analog converter and a counter having at least four bits

Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., et al., C.A. No. 08-309-JJF-LPS (D. Del. Dec. 18, 2009)

December 18, 2009

New Rules for Computing Time and Proposed Revised Local Rules for Comment

As most everyone is aware by now, new amendments to the Federal Rules of Civil Procedure became effective as of December 1, 2009 that change the way that deadlines are computed under the rules. The District Court of Delaware recently posted on its website, the following information regarding the computation time:

TIME (COMPUTATION OF TIME): Effective 12/1/2009, CM/ECF will no longer exclude intermediate weekends and holidays when calculating deadlines less than 11 days. Deadlines will be calculated in accordance with the changes to Fed.R.Civ.P.6 (i.e., 5 day deadlines will become 7 day deadlines, 10 and 15 day deadlines will become 14 day deadlines, etc.). CM/ECF will add 3 calendar days for mailing, as prescribed in the Administrative Procedures for Filing and Service by Electronic Means.

The District Court has also posted proposed amendments to the local rules for comment. These new local rules were drafted to address the December amendments to the Federal Rules of Civil Procedure and other court practices and procedures. Some proposed changes include the following:

- The addition of Rule 5.1(b) which states that when computing time periods under the federal rules, the clerk's office "shall be deemed inaccessible" any time when it is closed due to inclement weather.

- The rules that contained certain time deadlines were changed to conform to the federal rules including changes to the 10 day time period for filing an answering brief to 14 days and the 5 day period for filing a reply brief to 7 days.

- The proposal also changes Rule 7.1.3(a)(4) to limit all opening and answering briefs to 20 pages and all reply briefs to 10 pages (the current rule allows for 40 page opening and answering briefs and 20 page reply briefs).

- Rule 7.1.5(a) is also changed to limit all motions for reargument and answering briefs to 10 pages. Also added to this rule is a provision prohibiting the filing of a motion for reargument where an objection to a Report and Recommendation by a Magistrate Judge has been filed.

- Reasonable notice for a deposition pursuant to Rule 30 has been changed to "not less than 10 days."

Other proposed changes are shown in the redline of the current District of Delaware Local Rules attached below. The public has been asked to comment on the revisions by February 1, 2010.

Public Notice of Federal Court Proposed Revised Local Rules

Proposed Local Rules

December 18, 2009

New District of Delaware Intellectual Property Case Filings

12/2: Bristol-Myers Squibb Company, Bristol-Myers Squibb Company, Novartis Corporation, et al. v. Teva Pharmaceuticals USA, Inc. (patent infringement)
12/2: Cephalon Inc. and Cephalon France v. Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries Ltd. (patent infringement)
12/2: Konarka Technologies, DuPont Displays Inc. and The Regents of the University of California v. Plextronics Inc. (patent infringement)
12/2: In re: Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litigation (patent infringement)
12/2: Samsung Electronics Co., Ltd. v. Sharp Corporation, Sharp Electronics Corporation and Sharp Electronics Manufacturing Company of America Inc. (patent infringement)
12/2: Takeda Pharmaceutical Company Ltd. and Takeda Pharmaceutical North America Inc. v. Watson Laboratories, Inc.- Florida, Watson Pharma Inc. and Watson Pharmaceuticals Inc. (patent infringement)
12/3: Pfizer Inc., Pfizer Ireland Pharmaceuticals, Warner-Lambert Company and Warner-Lambert Company LLC v. Kremers Urban LLC and KUDCO Ireland Ltd. (patent infringement)
12/7: Eurand Inc., Cephalon, Inc. and Anesta AG v. Anchen Pharmaceuticals and Anchen Inc. (patent infringement)
12/8: Cephalon Inc. and Cephalon France v. Actavis Group, Actavis Pharma Manufacturing Pvt Ltd. and Actavis, Inc. (patent infringement)
12/8: Delta Airlines Inc. v. Applied Interact LLC (patent infringement)
12/8: Eurand Inc., Cephalon, Inc. and Anesta AG v. Anchen Pharmaceuticals and Anchen Inc. (patent infringement)
12/8: LG Household & Healthcare Ltd. v. Procter & Gamble Company (patent infringement)
12/8: Pfizer Inc., Pfizer Ireland Pharmaceuticals, Warner-Lambert Company and Warner-Lambert Company LLC v. Dr. Reddy's Laboratories Ltd. and Dr. Reddy's Laboratories, Inc. (patent infringement)
12/10: Seattle Children's Hospital, Novartis AG, Novartis Vaccines and Diagnostics, Inc. and Novartis Pharmaceuticals Corporation v. Teva Parenteral Medicines Inc., Teva Pharmaceutical Industries Ltd. and Teva Pharmaceuticals USA, Inc. (patent infringement)
12/11: Cephalon Inc. and Cephalon France v. Mylan Pharmaceuticals Inc., Mylan, Inc., Matrix Laboratories Ltd. and Matrix Laboratories Inc. (patent infringement)

December 17, 2009

Mary Pat Thynge: Obviousness and the Limits of Document Discovery

In document discovery, relevance is broadly construed. But the doctrine has its limits. In a recent decision by magistrate judge Mary Pat Thynge, the Court rejected as irrelevant a request for documents concerning certain properties embodied in two prior art products. According to the Court, the request, made in part to support assertions of obviousness, could not illuminate the sufficiency of the defense:

"That the inherent teaching of a prior art reference is applicable to obviousness does not make the information requested by Mylan relevant since . . . obviousness is an objective legal construct, measured by whether the inherency would have been obvious to one skilled in the art."

As a result, the Court held that, as a matter of law, the requested documents were irrelevant to the issue of obviousness.

Eurand Inc. v. Mylan Pharma. Inc., C.A. No. 08-889-SLR (D. Del. Dec. 9, 2009) (Thynge, M.J.).


December 15, 2009

Joseph J. Farnan: Pre-Patent Commercial Negotiation Leads to On-Sale Bar

In a recent decision, district judge Joseph J. Farnan Jr. helped define the commercial boundaries of the on-sale bar's offer requirement. In the underlying litigation, the accused infringers grounded their invalidity argument on the patentee's alleged offer of the subject technology well before seeking its patent.

According to the patentee, its advances to a potential customer - which included a term sheet entitled "Bidder's Offer" - were inchoate and therefore could not constitute a formal offer capable of acceptance. The Court rejected this position, noting that the patentee's tender satisfied the traditional elements of an offer:

"Honeywell relies on the parties' business relationship and the alleged custom and practice in the industry to argue that the AIMS Proposal could not be a formal offer for sale because further negotiation between the parties was expected. In the Court's view, however, the fact that further negotiations might arise, or even be expected, does not preclude the AIMS Proposal from being an invalidating offer where, as here, the AIMS Proposal contained the essential terms of an offer and Honeywell manifested its intent to make an offer to Boeing." (Slip op. at 10.)

Thus, according to the Court, "[i]n this case . . . we have a definite offer, capable of acceptance, in the contract sense, and such offers have always been sufficient to invoke the on-sale bar." (Slip op. at 12.) With this negotiation history established, the Court entered judgment against the patentee on the defense of the on-sale bar.

Honeywell Int'l Inc. v. Nikon Corp., C.A. No. 04-1337-JJF (D. Del. Dec. 4, 2009) (Farnan, J.).


December 9, 2009

Fed. Cir. Reversal of Judge Robinson Opinion "undoubtedly marks a shift from past declaratory judgment cases."

Last week, the Federal Circuit reversed Judge Robinson's opinion in Hewlett Packard Co. v. Acceleron, LLC, C.A. No. 07-650-SLR, Memo. Op. (D. Del. Mar. 10, 2009), which we posted about earlier this year. The Fed. Circuit's opinion on this case is particularly interesting because, in their words, it "undoubtedly marks a shift from past declaratory judgment cases." Hewlett-Packard Company v. Acceleron LLC, No. 2009-1283 (Fed. Cir. Dec. 4, 2009).

Judge Robinson had dismissed this declaratory judgment action because "[l]itigation was . . . still too speculative a prospect to support declaratory judgment jurisdiction" when the case was filed. Hewlett Packard, C.A. No. 07-650-SLR at 13. At that time Acceleron had sent a letter to HP asking for "an opportunity to discuss" Acceleron's patent that "relates to Blade Servers." Id. at 1-2.

Acceleron's initial letter suggested that declaratory judgment jurisdiction might be an issue by stating that "we ask that you agree that all information exchanged . . . will not be used for any litigation purposes whatsoever, including but not limited to any claim that Acceleron has asserted any rights against any of your ongoing or planned activities, or otherwise created any actual case or controversy regarding the . . . patent." Id. The Court noted, however, that the letter did not include "a statement of infringement, identification of specific claims, claim charts, prior pleadings or litigation history, or the identification of other licensees," or "directly imply[] impending litigation." Id.

In reversing, the Fed. Cir. held that "The facts of this case, when viewed objectively and in totality, show that Acceleron took the affirmative step of twice contacting HP directly, making an implied assertion of its rights under the ’021 patent against HP’s Blade Server products, and HP disagreed. Therefore, we hold that there is declaratory judgment jurisdiction arising from a 'definite and concrete' dispute between HP and Acceleron, parties having adverse legal interests." Id. at 8-9.

The difference between the Fed. Cir. holding and the District of Delaware holding seems to turn on the degree to which a patent troll must "imply" that litigation was pending - Judge Robinson noted that Acceleron did not "direcly imply[] impending litigation," but the the Fed. Cir. held that Acceleron's "implied assertion of its rights," along with HP's disagreement, was enough.

The Fed. Cir. recognized that "it is implausible (especially after MedImmune and several post-MedImmune decisions from this court) to expect that a competent lawyer drafting such correspondence for a patent owner would identify specific claims, present claim charts, and explicitly allege infringement." Id. at 6. The Court also recognized that legitimate business interactions (such as a patent owner attempting to sell a patent) should not invoke declaratory judgment jurisdiction, id. at 6, but that Acceleron's letter here was no such communication. The letter asserted that its patents were "relevant" to one of HP's product lines and imposed a short deadline to respond. Further, the Fed. Cir. emphasized Acceleron's status as a non-practicing entity: Acceleron's implication of litigation was stronger because it was "a non-competitor patent holding company," and "solely a licensing entity, and without enforcement it receives no benefits from its patents." Id. at 3, 8.

In its conclusion, the Fed. Cir. praised Judge Robinson's opinion, and noted that their reversal represents an actual change in the law:

As the district court recognized in its careful opinion analyzing declaratory judgment jurisdiction, there is no bright-line rule for distinguishing those cases that satisfy the actual case-or-controversy requirement from those that do not. See MedImmune, 549 U.S. at 127. Our decision in this case undoubtedly marks a shift from past declaratory judgment cases. However, MedImmune has altered the way in which the Declaratory Judgment Act applies to patent law cases, requiring that legal interests be evaluated in patent cases under the general criteria of the Act. Our jurisprudence must consequently also evolve, and in this case the facts demonstrate adverse legal interests that warrant judicial resolution.

Id. at 9.

Hewlett-Packard Company v. Acceleron LLC, No. 2009-1283 (Fed. Cir. Dec. 4, 2009)

December 9, 2009

Judge Farnan: Markman Opinion on a Medical Patent

Judge Farnan recently issued a claim construction opinion in ICU Medical, Inc. v. RyMed Technologies, Inc., C.A. No. 07-468-JJR (D. Del. Dec. 3, 2009), an infringement case involving patents on intravenous medical connector valves used to connect fluid bags to an IV. The following terms were construed:

  • "Compressed State" - "the state of the seal when a medical implement causes axial compression"
  • "Decompressed State" - "the state of the seal when a medical implement is not causing axial compression"
  • "O-Ring Elements" - "portions having a circular outer surface that is wider at the middle than at the top or bottom."
  • "Resilient Seal" - "wherein, upon compression, the structure changes shape and, upon removal of the compression, the structure returns to its original shape."
  • "Resilient Seal Element" - "a sealing structure wherein, upon compression, the structure changes shape and, upon removal of the compression, the structure returns to its original shape."
  • "Generally Arcuate Segments" - "naturally separated divisions, portions or sections of the walls that are bent, curved like a bow or arc-shaped."
  • "Arcuate Segments Intersecting One Another" - "arcuate segments that meet or touch."
  • "Fills Essentially Completely" - "fills all of or almost all of the cavity adjacent to the opening to prevent fluid from leaking between the seal and the wall structure."
  • "Bearing Against Said Wall Structure Near Said Opening to Seal Said Opening" - "the seal is situated in contact with the wall structure [of the housing] near the opening of the proximal end of the housing to make the opening fluid tight."
  • "Pre-Slit" - "an opening made beforehand."
  • "Horizontal Groove" - "at least one groove which is perpendicular to an axis defined by the proximal and distal ends."
  • "Seated Within the Cavity" - "situated, positioned or located within the cavity."

Although some of the patent terms had been previously construed by another court, Judge Farnan rejected some of those constructions where the prior court had relied on the dictionary definition of some terms (such as "resilient"), because "[c]urrently, dictionary definitions are not favored as a source of ordinary meaning." Id. at 13, 19.

ICU Medical, Inc. v. RyMed Technologies, Inc., C.A. No. 07-468-JJR (D. Del. Dec. 3, 2009)

December 7, 2009

Attorney disqualification in D.N.J vs. D. Del.: Same facts, same rules, different interpretation of the appropriate remedy

Magistrate Judge Bongiovanni of the District of New Jersey recently considered Wyeth’s renewed request for the disqualification of Howry LLP (“Howry) as counsel to Boston Scientific Corporation (“BSC”), based on Howry's representation of Wyeth in another matter. Wyeth and Cordis Corp. v. Abbott Laboratories, et al., C.A. No. 08-230-JAP (D.N.J. Dec. 1, 2009). Judge Bogiovanni originally deferred the issue in light of Wyeth's motion for disqualification pending in the District of Delaware before Judge Robinson in a case involving the same parties and Howry LLP. In August, Judge Robinson found that Howry’s representation of BSC violated Rule 1.7. Boston Scientific Corporation, et al. v. Johnson & Johnson, et al., C.A. No. 07-765-SLR, at 7 (D. Del. Aug. 25, 2009). However, Judge Robinson declined to disqualify Howry due to, among other things, the unrelatedness of the BSC matter and the European matter in which Howry represented Wyeth, the fact that Howry’s Washington, D.C. office was representing plaintiffs here whereas Howry’s Europe-based attorneys were handling the matter in Europe, and that an ethical wall was in place. Id. at 8-9. Judge Bongiovanni, however, disqualified Howry on the sole basis of its Rule 1.7 violation. Judge Bongiovanni indicated that in the District of New Jersey the violation of Rule 1.7 should result in automatic disqualification. Wyeth, C.A. No. 08-0230, at 2 (citing In re Cendant Corp. Securities Litig., 1234 F. Supp. 2d 235, 248-50 (D.N.J. 2000) (“New Jersey simply does not permit concurrent representation when the interests of two current clients are adverse.”).

Wyeth and Cordis Corp. v. Abbott Laboratories, et al., C.A. No. 08-230-JAP (D.N.J. Dec. 1, 2009)