As part of an aggressive litigation strategy developed to manage and assert its intellectual property, defendant Rambus Inc. implemented a document retention policy – one meant to protect its intellectual property. Much to their chagrin, however, the District of Delaware has found that this policy, in fact, caused the company to destroy such crucial evidence to its infringement claims that the only proper sanction would be to hold the patents-in-suit unenforceable. Micron Technology, Inc. v. Rambus, Inc., C.A. No. 00-792-SLR, Opinion (D. Del. Jan. 9, 2009). As part of the implementation of the new document retention policy, Rambus held company-wide “shred days” during which employees would shred documents pursuant to the policy. Id. at 13-14. Outside prosecution counsel was even asked by Rambus to purge their files for issued patents except for documents that were part of the official record. Id. at 17. The Court found that a duty to preserve potentially discoverable evidence arose when the company “articulated a time frame and motive for implementation of the Rambus litigation strategy” and because the document retention policy was adopted as a part of this strategy, Rambus “knew, or should have known,” that such a policy would destroy potentially relevant and material documents and therefore such behavior was inappropriate. Id. at 31-32.
Plaintiff Micron Technology had asserted claims of patent misuse and inequitable conduct, along with others against Rambus Inc. These claims, by their nature, are often established using non-public, internal documents from the patentee. The fact that these types of documents were included in the destroyed documents at Rambus would cause Micron extreme prejudice in trying to prove its case which the Court notes, “has been compounded by Rambus’ litigation conduct, which has been obstructive at best, misleading at worst.” Id. at 33.
The Court further found that typical sanctions such as adverse jury instructions or the preclusion of evidence would be “impractical, bordering on meaningless, under these circumstances and in the context of a typical jury trial.” Id. Judge Robinson stated that “[T]he spoliation conduct was extensive, including within its scope the destruction of innumerable documents relating to all aspects of Rambus’ business; when considered in light of Rambus’ litigation conduct, the very integrity of the litigation process has been impugned.” Id. Therefore, the Court found the only appropriate sanction to be declaring the 12 patents-in-suit “unenforceable against Micron.” Id.
Litigants in this district should be reminded that the discovery process and claims of spoliation are taken very seriously here. In fact, Judge Robinson, in this case held a bench trial just on the issue of spoliation and unclean hands. Id. at 1. No one disputes that document retention policies are critical, particularly in today’s electronic world, but one should beware of the timing and motive of the company when implementing such a policy particularly when litigation or an aggressive licensing strategy is part of the company’s business.
1/2: Pozen Inc. v. Alphapharm Pty Ltd., Mylan Pharmaceuticals, Inc. and Mylan, Inc. (patent infringement)
1/7: Eurand Inc., Cephalon, Inc. and Anesta AG v. Impax Laboratories, Inc. (patent infringement)
1/8: Wyeth v. Torrent Pharmaceuticals Ltd. and Torrent Pharma Inc. (patent infringement)
Judge Farnan recently construed six terms used in patents related to the well-known asthma drug—albuterol. Sepracor, Inc. v. Dey, L.P., C.A. No. 06-113-JJF (Consol.), Memo. Op. (D. Del. Dec. 18, 2008).
The first disputed term, “side effects” was construed to mean “effects other than the desired therapeutic effect associated with the administration of racemic albuterol.” Id. at 13-14. The Defendants argued that by not limiting the term to those side effects set forth in the specification, the claims would cover side effects that were not known at the time the patent was filed and therefore the scope of the claims would be improperly expanded. Id. at 8-9. Judge Farnan found that the patentee did not expressly limit its claim scope to those side effects listed in the specification and, in fact, used language suggesting that the listed effects were only meant to be exemplary. Id. at 12-13. Also, the term “side effects” is a general, not technical, term and therefore can be construed according to its plain meaning. Id. at 13. Thus, the Court did not limit the claim term “side effects” to those set forth in the specification.
As typically arises in a situation where the patentee is awarded such a broad claim construction, the Defendants argued that such a construction would render the claims invalid on the grounds of indefiniteness and written description. Judge Farnan, in a footnote, acknowledged that such a construction may have that effect, however, these invalidity arguments are “best dealt with in a context other than the Court’s initial consideration of claim construction.” Id. at 15 n.2.
The second set of terms, “chronic administration” and “chronically administering to the individual,” was construed to mean “prophylactic or periodic administration.” Id. at 17. Because both parties relied on a declaration in construing this term and the PTO allowed the claims on the basis of this declaration, the Court used this extrinsic evidence in adopting its construction of “chronic administration.” Id. at 16.
The next term, “acute administration,” was construed to mean “treatment after onset of an asthma attack.” Id. at 18. The dispute related to this term was whether the treatment needed to be after the asthma attack began or at some other time. The specification and declaration mentioned above both supported the Court’s definition and because the Plaintiff offered no evidence otherwise, the Court adopted the construction above. Id. at 18.
The parties’ next dispute surrounded the terms “inducing bronchodilation or providing relief of bronchospasm.” Id. at 19. Specifically, the Defendants argued that the term should be limited to the treatment of asthma. Id. The Court found that there was not a “manifest exclusion or restriction” of the claim scope in the specification or prosecution history and because there was no particular definition of the terms in the patent history it looked to the dictionary definitions of “bronchospasm” and “bronchodilation” to define these terms. Id. at 22-23. The Court defined the claim terms to mean “inducing relaxation of smooth muscle in the walls of the bronchi and bronchioles or providing relief from contraction of smooth muscle in the walls of the bronchi and bronchioles.” Id.
The remaining terms were defined as follows:
- “treating bronchospasm in a patient with reversible obstructive airway disease”: “treating bronchospasm in a patient with a respiratory disorder such as asthmas, chronic bronchitis, or emphysema” Id. at 27.
- “preventing bronchospasm in a patient with reversible obstructive airway disease”: “preventing bronchospasm in a patient with a respiratory disorder such as asthma, chronic bronchitis, or emphysema” Id. at 29.
Third Circuit Judge Kent A. Jordan, sitting by designation, has issued an interesting decision on exclusivity as it relates to licensee standing. Despite the “semi-exclusive” language in its agreement with the patentholder, the licensee argued that it had standing to sue because the license granted it rights in an exclusive field of use.
The Court rejected that proposition:
“Even if OMI could successfully argue that a single entity extended release tramadol product encompasses a distinct field of use sufficient to provide co-plaintiff standing, and I am not convinced that it could, OMI has not shown that it in fact has an exclusive license to that field.”
The parties’ various agreements, which encompassed multiple products, evinced a “concern” that the licensed products occupied the same field. Accordingly, the licensee could not establish the exclusivity necessary to confer standing to sue.
Following District of Delaware precedent in the Alcoa v. Alcan matter decided by Judge Robinson in 2007 (C.A. No. 06-451-SLR, 2007, Memo. Order (D. Del. July 2, 2007)), Judge Farnan denied a copyright infringement defendant's motion to transfer venue to the Central District of California. Leonard v. Stemtech Health Sciences, Inc., C.A. No. 08-67-JJF, Memo. Op. (D. Del. Dec. 19, 2008). The Court found little sympathy for the defendant, a Delaware corporation, who was urging the Court to transfer the case to California where its principal place of business is located. Despite the defendant's argument that four key witnesses would be "inconvenienced" to travel to Delaware, they did not produce any affidavits or evidence to support the fact that these witnesses would actually be unavailable in Delaware. Id. at 7. Furthermore, although many documents and records subject to discovery are located in California, the Court found that the burden is not that great where electronic discovery is commonplace and the defendant made no showing that shipping documents to Delaware would be burdensome. Id. at 7-8. Defendant is also conducting business on a national scale and therefore it is not burdensome for them to litigate in Delaware, particularly where they are also incorporated here. Id. at 8. Finally, the Court gave little weight to the defendant's argument regarding time to trial, recognizing the "relative expeditiousness" of both the District of Delaware and the Central District of California. Id. at 9.
With the option of concurrent proceedings before the Patent and Trademark Office, infringement defendants enjoy multiple routes to challenging the patent-in-suit -- unless the case is stayed. A pause in the litigation, however, is not automatic. By recently denying a motion to stay pending reexamination, Magistrate Judge Leonard P. Stark has added to the stay lexicon in this district.
The Court addressed the importance of earlier, and comprehensive, litigation between the parties involving some of the same claims:
"[The stay] factors do not neatly apply to the circumstances presented here, largely because of the lengthy and extensive history of litigation between [the parties] . . . . [Earlier] jury findings to the contrary make it unclear whether a stay will ultimately simplify the trial of the instant case."
This uncertainty, along with an indefinite timetable for further PTO action, appear to have swayed the Court to keep the litigation moving forward. By denying a stay in the face of the administrative overlap, this decision may signal an increasing judicial preference in this district for getting cases to trial notwithstanding a pending reexamination.
Add the District of Massachusetts to the growing list of jurisdictions adopting specialized patent rules. Last month, D. Mass. unveiled its new LR 16.6, which, among others, prescribes a detailed structure for disclosing infringement and invalidity contentions, Markman proceedings, and other patent scheduling matters.
Delaware practitioners will see familiar elements in the D. Mass. rule. Its suggested opening Markman briefing limit, 25 pages, is similar to Chief Judge Sleet's briefing rules. Also recognizable is the joint claim statement provision, which is an increasingly common (and often required) feature of D. Del. patent litigation.
District Judge Joseph J. Farnan Jr. recently issued a claim construction decision notable for its refusal to construe several claim terms. In the underlying dispute over a liquid-crystal display patent, the parties requested construction of the terms "display apparatus" and, in relevant part, "providing a predetermined variation with viewing angle of light transmission." Citing a variety of infirmities, the Court declined to construe the terms.
According to the Court, the "display apparatus" term appears only in the preamble, and thus cannot constitute a limitation:
"[T]he terse preamble simply refers to a 'display apparatus,' which, in the Court's view, is nothing more than a statement of the general field of the claim. Indeed, the word 'display' is not relied upon later in the claim to describe the details of the invention, which, in and of itself, provides further corroboration for the Court's conclusion that the preamble is not a limitation."
The "predetermined variation" phrase suffered a similar fate, but for opposite reasons: rather than lacking sufficient explanation in the specification, as above, the phrase instead had sufficient explanatory support to refute defendants' proposed construction:
"Pairing a description of a specific, concrete use of the invention with a generalized description of the invention, the specification thus uses an example in the usual way to clarify the broader concept. . . . [T]his language, rather than being dispensable boilerplate, represents the standard mode of using an example to convey an idea. The Court will not punish the patentees for attempting to make their specification more accessible in this manner."
Because plaintiff's proposed construction altered the claim language "only slightly," the Court declined to construe the claim phrase.
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