A jury recently returned a verdict in the battle between Leader Technologies, Inc. and Facebook. By its verdict, the jury found that Facebook literally infringed Leader's '761 patent. But the jury also found that Facebook demonstrated the invalidity of the patent-in-suit, both on the grounds of prior public use and the on-sale bar.
In one of his last acts as a judicial officer, now-retired district judge Joseph J. Farnan Jr. issued a decision resolving a contractual ambiguity of major proportions. The underlying IP transfer agreement called for the conveyance of "patent rights" between the counterparties listed on "Schedule A." The only problem was that Schedule A never existed; instead the parties drafted a "Schedule B - Patent Rights."
As a result, Defendants in the infringement litigation claimed that, in the absence of Schedule A, the patents-in-suit were transferred automatically. The result? Plaintiff did not have standing to enforce its rights to the patents-in-suit.
The Court rejected this assertion out of hand, in part because a paralegal who created Schedule B testified that she meant to call it Schedule A:
"While the Court understands Defendants' concerns with Schedule B, the Court is persuaded . . . that Schedule B was, in fact, intended to be Schedule A and was used by the parties as Schedule A. In making this determination, the Court credits the testimony of Kate Maxwell and finds that Schedule B was mistitled and was intended to be Schedule A. [This] testimony concerning the creation of the document and its storage as a computer file supports its authenticity."
Notable for litigators is the procedure followed to cure the ambiguity and establish the document's authenticity: have the preparer testify to the error and the use of the document.
After a jury trial returned a verdict in favor of plaintiff, Judge Farnan recently presided over a bench trial on the issue of plaintiff’s standing. The Dow Chemical Company v. Nova Chemicals Corporation (Canada), et al., C.A. 05-737-JJF (D. Del. July 30, 2010). Plaintiff and its subsidiary entered into an agreement to transfer certain patent rights from plaintiff to the subsidiary. The issue before Judge Farnan was whether this agreement transferred ownership of the patents-in-suit such that plaintiff no longer had standing. Id. at 3. Judge Farnan concluded that plaintiff was the legal owner of the patents at all relevant times throughout the litigation. Id. at 6. Patents were transferred under the agreement once they were listed on a Schedule A to the agreement. Id. Defendants argued that the patents were transferred because there was no Schedule A to the agreement. Id. at 7. However, plaintiff presented evidence that a document entitled “Schedule B Supplement – Patent Rights” was intended to be Schedule A and reference to Schedule B was a typographical error. Id.
District judge Joseph J. Farnan Jr. recently issued a strongly worded decision on willfulness, one that all litigators - and in-house counsel - should heed. The Court initially ordered a retrial on willfulness following the Federal Circuit's Seagate decision. In its subsequent post-trial decision, the Court made clear its thoughts on reverse engineering:
"Faced with this failed attempt [at a design-around] and despite its knowledge of the '075 patent and its importance to the industry, Fairchild chose the option that presented the most objectively high risk of infringement, namely to continue the development of its product by copying, through reverse engineering, the methods and features claimed in the patent."
The Court characterized such behavior concerning the '075 patent and the other patents-in-suit as "industrial stalking" and "blatant copying." The result, even with evidence of post-litigation opinions of counsel, was a textbook willfulness finding.
Judge Farnan recently denied plaintiff’s motion for a preliminary injunction related to handheld mobile computers. Symbol Technologies, Inc. v. Janam Technologies LLC, C.A. No. 08-340-JJF (D. Del. July 20, 2010). Judge Farnan found that plaintiff had shown a likelihood of success on the merits that two of plaintiff’s patents-at-issue were infringed. Id. at 16-17, 29. However, Judge Farnan also found that defendant “raised a substantial question” whether claims of the patents were invalid and plaintiff failed to prove that the defense lacked “substantial merit or [was] reasonably likely to fail.” Id. at 22; see also id. at 28, 33.
Symbol Technologies, Inc. v. Janam Technologies LLC, C.A. No. 08-340-JJF (D. Del. July 20, 2010)
In the ANDA case Sepracor Inc. v. Dey L.P. and Dey, Inc., C.A. 06-113-JJF (D. Del. July 15, 2010), Judge Farnan granted plaintiff’s motion to amend its complaint to add claims for damages after defendants began selling their generic product and to add defendants’ parent companies as parties. Although the original claims were ready for trial Judge Farnan granted plaintiffs’ request to add the parent companies because the parent companies were involved in the sale and distribution of the generic product in question. Id. at 5. Moreover, any further discovery that may be necessary would not unduly prejudice the defendants because the discovery would be limited to only the sale and distribution of the product. Id. Judge Farnan also denied defendants request to bifurcate damages from liability because the limited discovery would not cause any undue delays and there would be no danger of confusion for the jury. Id. at 7.
Continue reading "Judge Farnan: Motion to amend complaint late in case GRANTED" »
Plaintiff filed a motion to dismiss a copyright infringement action over audio compression technology. Vianix LLC v. Nuance Communications, Inc., C.A. No. 09-348-JJF, Memo. Op. (D. Del. July 20, 2010). Defendant argued that plaintiff failed to state a claim upon which relief can be granted because plaintiff “has not identified the specific original works” that form the basis of their claims and because it has not “identified specific acts” that are actionable as infringement. Id. at 3. The court found that plaintiff’s complaint “sufficiently pleads which specific original works are the subject of its copyright claims” because it identifies the accused works as “four computer programs, in the form of source code, embodying the MASC Technology” and lists the four copyright registrations, in addition to alleging that plaintiff provided a number of the accused works to the defendant in “object code” and that there were seven specific products since 2005 that incorporate the accused works. Id. at 7-8. The court further found that plaintiff alleged specific acts of infringement when it alleged that defendant’s “making and storing [] ‘archived copies of its own products, including versions that contain Vianix’ including the Subject Works” were acts of infringement. Id. at 9.
Vianix LLC v. Nuance Communications, Inc., C.A. No. 09-348-JJF, Memo. Op. (D. Del. July 20, 2010).
Discovery disputes over the production of source code often involve thorny issues of confidentiality. But sometimes those disputes are more basic, such as when a party outright refuses to produce certain code. In a recent decision, district judge Joseph J. Farnan Jr. addressed this type of dispute, and came down in favor of production.
On the underlying motion to compel, Imagine argued that it had no obligation to produce source code relating to its future products (as opposed to current products) because "of the likelihood that the products will change before they are released" and because movant BigBand "is not entitled to any damages from the future products."
The Court dismissed this contention, noting that Rule 26's relevancy standard is broad enough to encompass BigBand's discovery request: "[S]ource code of Imagine's future products is discoverable because it is reasonably likely to lead to evidence relevant to BigBand's infringement claim."
Also see the Court's related decision on a motion to amend and motion to dismiss.
On Tuesday, Judge Farnan granted a default judgment in a patent infringement case against Medical Skin Therapy Research, Inc. ("MSTR"). Tristrata Technologies filed suit againt MSTR on October 17, 2006 - three years, nine months, and thirteen days before the entry of default judgment. In that time, MSTR appears to have made no response at all to the Court, despite correspondence with Tristata showing that it was aware of the suit. The Court granted a default judgment, but did not grant Tristrata's requested $687,000 in damages plus attorney's fees. Instead, it ordered Tristrata to submit an itemized statement of damages and the basis for the damages, so that MSTR will have an opportunity to respond.
On Tuesday, Judge Farnan issued an opinion in Enhanced Security Research, LLC v. Juniper Networks, Inc., C.A. No. 09-871-JJF (D. Del. July 20, 2010), dismissing Plaintiff's claims for lack of standing.
The question was whether the plaintiff held enough of the rights under the patent to allow it to bring a claim at all. The patent-in-suit had been transferred several times, and was subject to a 2007 "Purchase Agreement" in which Plaintiff had sold several exclusive rights under the patent to a third party, but had retained title. The Federal Circuit requires that a plaintiff or plaintiffs hold "all substantial rights" to a patent in order to bring a claim. Id. at 7-8.
Here, the Court determined that Plaintiff had transferred "all substantial rights" to the third party, including the exclusive right, as stated in the contract, to "initiate, maintain, manage, resolve, conclude and settle all arrangements and activities in connection with any and all licensing or litigation or enforcement efforts and/or Proceedings . . . relating to any of [Plaintiff]'s rights in and to any of the Patents." Id. at 8-9. Because the third party possessed "all substantial rights" relating to the patent, Plaintiff could not bring an action without the involvement of that party. Id. at 9-11. Thus, the Court granted Defendant's Motion to Dismiss.
A recent decision by district judge Joseph J. Farnan Jr. illustrates the broad scope of Rule 15's amended pleading provisions. In the underlying copyright-infringement action, Leonard sought to leave open the operative infringement date in response to negative case law raised by Stemtech during mediation. Stemtech argued that this late change in position was simply a gambit designed to avoid the limitations statute and forestall a winning summary judgment motion.
The Court acknowledged Stemtech's plight, but nonetheless permitted the amendment:
"While the circumstances cited by Stemtech give rise to the specter of bad faith, the Court concludes, at this juncture, that the inference is not strong enough to deny Leonard leave to amend . . . . [T]he deletion of specific date references from the proposed Amended Complaint will leave this issue open for further development during discovery and will preserve Stemtech's ability to defend this action on the basis of a statute of limitations defense or a defense under the case law cited by Stemtech during mediation."
By allowing Leonard to amend these crucial dates in the complaint, the Court reminded litigators that, in the absence of prejudice, Rule 15 allows parties an immense latitude in framing their claims for relief.
Leonard v. Stemtech Health Sciences, Inc., C.A. No. 08-067-JJF (D. Del. July 16, 2010) (Farnan, J.).
Judge Farnan decided damages in the amount of $305,399 plus pre- and post-judgment interest in AU Optronics Corp. v. LG Display CO., et al., C.A. No. 07-357-JJF (D. Del. July 8, 2010). Judge Farnan found that AUO failed to establish that LGD willfully infringed, noting that since Seagate, there has been “tension in the case law . . . concerning whether the Court should look to prelitigation conduct only and/or post-litigation conduct in determining whether infringement was willful.” Id. at 2. Judge Farnan analyzed the evidence focusing on “prelitigation conduct of the accused infringer in the first instance” while taking into account “whether the accused infringer maintained plausible or credible defenses to infringement and invalidity.” Id. at 3 (internal quotations omitted).
LG Display CO., Ltd. V. AU Optronics Corporation, et al., C.A. No. 06-726-JJF(D. Del. July 8, 2010)
It is black letter law that a party asserting patent infringement must have standing to sue before it can bring a claim for infringement. Enhanced Security Research, LLC v. Cisco Systems, Inc., C.A. No. 09-390-JJF, Memo. Op. (D. Del. June 25, 2010). Defendants in Enhanced Security Research, LLC v. Cisco Systems, Inc., brought a motion to dismiss arguing that pursuant to terms of a Purchase Agreement, the plaintiff did not maintain any rights to the patents-in-suit and “divorced nominal legal title to the patents-in-suit from the exclusionary rights to the those patents.” Id. at 3. The issue in this case came down to whether plaintiff can sue in its own name or must include the other party to the Purchase Agreement. Id. at 7. The court found that as a result of the Purchase Agreement, plaintiff retained title to the patents-in-suit and “the rights to use, exploit, enforce, [the patents-in-suit]” but “control over the exclusionary rights” resided with the other party to the Agreement. Id. at 9 (internal citations omitted). By virtue of the agreement, plaintiff is “prohibited from making any decision with respect to assertion of its patent rights, the conduct of litigation relating to the patents-in-suit, or the settlement of such litigation without the prior written consent” of the other party to the Agreement. Id. at 9. It further “relinquished its ability to freely assign, transfer, or license its rights in the patents-in-suit without the prior written consent” of the other party. Id. at 10. Therefore, under the Purchase Agreement, plaintiff lacks standing to bring the lawsuit and joinder of the other party cannot cure the defect. Id. at 11.
In a wide-ranging post-trial opinion issued on Tuesday, District Judge Joseph J. Farnan Jr. covered many topics, including standing, reissue, obviousness, and inequitable conduct. Of these, the Court's decision on inequitable conduct is particularly noteworthy for its explanation of the contours of deceptive intent:
"While in hindsight it may be attractive to construct a deliberate scheme of deceptive intent from the actions of these individuals given the success of CRESTOR in the marketplace, it is at least equally plausible from their testimony and the contemporaneous documentary evidence, that a scheme to defraud was the furthest thing from the minds of these individuals at the relevant time and that their vision was limited to the overwhelming demands they faced daily in their severely understaffed department. Viewed in this context, which the Court is persuaded is the appropriate context given the testimony and evidence, actions suggestive of malfeasance become no more than a string of mishaps, mistakes, misapprehensions and misjudgment on the part of inexperienced and overworked individuals."
By its reference to the marketplace, the Court highlighted its thinking on not only deceptive intent, but also on the intersection of commercial success and inequitable conduct.
See also the Court's errata order, posted here.
On Friday, District Judge Joseph J. Farnan Jr. granted a request for a stay pending reexamination. While this outcome is not unusual in Delaware, the Court made the notable observation that the sheer number of prior art references at issue made simplification of the case more likely following scrutiny by the PTO:
"[I]t is noteworthy that every claim of both [patents-in-suit] is currently being rexamined by the same PTO Examiner, and that the PTO has already issued an office action rejecting all claims of the '975 patent. Also, inter partes reexamination of the '975 patent was granted in view of thirty prior art references . . . . Ex parte reexamination of the '236 patent was granted in view of fifteen prior art references. In these circumstances, the Court is persuaded that there is a strong likelihood that a stay pending reexamination will simplify the prior art issues and invalidity defenses which are likely to be raised in this action."
Although only one factor in the Court's analysis, the prior art in the aggregate helped persuade the Court that staying the proceedings would be the most efficient course.
On June 15, 2010, a Delaware jury returned a verdict for plaintiff Dow Chemical Company and awarded Dow Chemical damages in the amount of $61.77 million. The Dow Chemical Co. v. Nova Chemicals Corp., C.A. No. 05-737-JJF, Verdict Form (D. Del. June 15, 2010). Specifically, the jury found that all four of the accused products of defendant Nova Chemicals Corp. infringed the two patents-in-suit. Nova Chemical asserted invalidity defenses alleging that the asserted patents were invalid for lack of written description and the claims were indefinite. Nova Chemical also asserted an obviousness defense. The jury ultimately determined the patents were valid and found for Dow Chemical on all invalidity questions. The $61.77 million damages award was broken down into approximately $4.3 million of reasonable royalty damages and $57.45 in lost profits.
In response to a contempt motion filed by nCube Corporation alleging that SeaChange violated the permanent injunction by developing a redesigned product that also infringes the patent-in-suit, SeaChange filed a declaratory judgment complaint requesting that the Court find its new product does not infringe the patent-in-suit. nCube Corporation v. Seachange Int'l Inc., C.A. Nos. 01-011-JJF, 09-573-JJF, Memo. Order (D. Del. June 4, 2010). nCube then moved to stay the declaratory judgment action pending its motion for contempt. Id. at 2. The Court found that the "most efficient means of addressing the parties current dispute is to stay" the declaratory judgment action until a determination is made whether contempt proceedings are appropriate. Id. at 6.
In an order addressing various motions in limine filed by the parties, Judge Farnan granted plaintiff's motion to preclude defendant from introducing any evidence or argument related to plaintiff's pre-suit investigation and testing "as it relates to the use of evidence of the attorney-cleient privilege to create a negative inference." The Dow Chemical Company v. Nova Chemicals Corp., C.A. No. 05-737-JJF, Order, at 1 (D. Del. May 30, 2010). The court denied the motion in part, however, and allowed testimony and evidence for the purpose of impeaching or "showing internal doubt on the part of Dow that Nova's product infringed the patents-in-suit." Id. at 2.
The court also denied the plaintiff's motion in limine to preclude the defendants' damages expert from relying on licensing agreements found through the Royaltysource database. Id.
On a trial practice note, the Court granted the plaintiff's motion to preclude the defendants from using excerpts of deposition testimony during opening statements. Id. at 3.
Last year, we posted about a declaratory action brought by Microsoft against WebXchange, which Judge Farnan dismissed for lack of subject matter jurisdiction. There was no case or controversy, because WebXchange had not accused Microsoft of infringement, even though WebXchange has a pending infringement action against several Microsoft customers involving the same patents.
WebXchange then sought fees, based on the fact that Microsoft had brought an earlier declaratory judgment action in the Northern District of California regarding the same patents, which was dismissed for the same reason. WebXchange alleged that, by bringing the Delaware action, Microsoft had acted in bad faith to multiply the proceedings, and that WebXchange is therefore entitled to attorney's fees under 28 U.S.C. § 1927, FRCP 41(d), and 35 U.S.C. § 285. Last week, Judge Farnan issued a memorandum opinion denying WebXchange's motion. Microsoft Corp. v. WebXchange, Inc., C.A. No. 09-484-JJF (D. Del. May 31, 2010). Judge Farnan held that Microsoft's second case was not frivolous, because it was based on different products, and the products in the second case are related to products that WebXchange has accused Microsoft's customers of infringing in the related case.
Microsoft Corp. v. WebXchange, Inc., C.A. No. 09-484-JJF (D. Del. May 31, 2010)
In The Dow Chemical Company v. Nova Chemicals Corp., C.A. No. 05-737-JJF (D. Del. May 20, 2010), after defendants' filed their motion for summary judgment, plaintiff submitted expert declarations in support of its counterstatement statement of facts opposing summary judgment. Id. at 3. Defendants subsequently filed a motion to strike the declarations because the expert declarations constituted "additional expert opinions that should have been filed before the end of discovery." Id. at 5. Judge Farnan disagreed. Judge Farnan agreed with plaintiff that the declarations were not "newly conceived arguments[,]" but were "appropriate elaborations of prior opinions and statements." Id. at 5-7.
Judge Farnan recently issued an opinion in LG Display Co., Ltd. v. AU Optronics Corp., C.A. No. 06-726-JJF (D. Del. Apr. 30, 2010). LG Display ("LGD") had alleged infringement of four patents, while AU Optronics ("AU") counter-claimed for infringement of another four patents. Judge Farnan bifurcated the trial into two one-week portions, the first portion addressing AUO's infringement claims against LGD, and the second portion addressing LGD's claims against AUO. The trial took place in June 2009.
Judge Farnan then issued the resulting decisions in phases. Earlier this year, Judge Farnan issued an opinion in favor of AU Optronics on their portion of the case, finding that LGD infringed each of AU's patents. Last week, Judge Farnan followed up with an opinion again in favor of AU Optronics, holding that they did not infringe any of LGD's patents.
While most of last week's opinion was fact-specific, there was at least one legal issue addressed. A third party, CMO, had initially been a defendant in the case, but was issued a stay sometime after claim construction. CMO petitioned, however, for leave to file a post-trial memorandum despite the stay, arguing that they had an interest in the Court's claim construction determinations. Id. at 4. Judge Farnan denied them leave to file, stating simply that "the Court will not permit CMO to interject itself into the post-trial briefing of LGD and AUO where proceedings against CMO have been stayed," but that the Court would consider CMO's positions as submitted during the Markman proceedings. Id. at 5.
See the opinions below the break.
Continue reading "Judge Farnan: Two-Phase Opinion Issued in LGD v. AUO" »
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).
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)
In Honeywell International Inc., et al. v. Nikon Corporation, et al., C.A. No. 04-1337-JJF (D. Del. Mar. 2, 2010), Judge Farnan considered defendants’ motion to unseal documents related to the Court’s decision granting summary judgment for invalidity. Id. at 1. Plaintiffs’ subsequently filed a motion to strike arguing that the Federal Circuit has exclusive jurisdiction over the motion due to plaintiffs’ pending appeal of the Court’s summary judgment opinion. Id. at 2. The Court ultimately denied both defendants’ and plaintiffs’ motions. Regarding jurisdiction, Judge Farnan determined that the motion to unseal documents was not an issue for appeal to the Federal Circuit and there was no danger that both courts would decide the same issue simultaneously. Id. at 4. Plaintiffs also argued that under Federal Circuit Rule 11, “the Federal Circuit has subject matter jurisdiction over the modification of protective orders as applied to the record on appeal.” Id. However, Judge Farnan noted that plaintiffs point to no case law indicating that Rule 11 applies to subject matter jurisdiction, and “by its plain language, Rule 11 is directed to ‘Forwarding the Record [on Appeal]. Accordingly, the Court does not read Rule 11 as establishing the Federal Circuit’s exclusive jurisdiction over the record on appeal. Id. at 5.
In a post-trial evidentiary opinion of phase I of a bench trial in which defendants asserted patents against plaintiff, Judge Farnan recently determined that certain testimony should be excluded because plaintiff failed to make adequate disclosure pretrial. LG Display Co., Ltd., v. AU Optronics Corp., et al., C.A. 06-726-JJF (D. Del. Feb. 16, 2010). One of plaintiff’s experts offered opinions at trial that were not disclosed in prior expert reports or depositions. Id. at 1. Plaintiff argued that the testimony was proper rebuttal testimony and should be considered, despite not being disclosed until the third day of trial. Id. at 2. Judge Farnan disagreed because plaintiff’s expert had one month to review defendant’s expert before submitting his rebuttal report and then another month before his deposition was taken. Id. at 3. “[Defendant] AUO and its expert were given no advance notice of [plaintiff’s expert’s] testimony, and [plaintiff] made no attempt to amend its expert report prior to allowing [their expert] to take the stand and reveal what [plaintiff] acknowledges were undisclosed, new opinions. In the Court’s view, this is precisely the type of attorney conduct that is prohibited by the Federal Rules of Civil Procedure.” Id. at 4. Judge Farnan also precluded plaintiff from asserting a license defense because plaintiff failed to disclose the defense prior to trial, as required by Federal Rule of Civil Procedure 26(e). Id. at 8.
LG Display Co., Ltd., v. AU Optronics Corp., et al., C.A. 06-726-JJF (D. Del. Feb. 16, 2010)
Is a product “unpatented” for purposes of pleading a false marking claim under Section 292 where it is covered by at least one claim of one of the patents listed on the product’s label? The District of Delaware, following the Federal Circuit decision in Clontech Labs, Inc. v. Invitrogen Corp., 406 F.3d 1347 (Fed. Cir. 2005), found that the for a product to be “unpatented” the product must “not be covered by at least one claim of each patent with which the article is marked.” Brinkmeier v. Graco Children’s Products Inc., C.A. No. 09-262-JJF, Memo. Op., at 7-8 (D. Del. Feb. 16, 2010) (internal citations omitted). Along the same line, marking a product with expired patents can still constitute “actionable mismarking” even if the product is “actually patented.” Id. at 8-9. Therefore, the Court found that plaintiff adequately pled that defendant’s products are “unpatented.” Id. at 9.
Privilege disputes are often a hot topic of intellectual property litigation. In WebXChange Inc. v. Dell, Inc., Judge Farnan ruled on a number of disputes sounding in the assertion of the attorney-client privilege, attorney work product doctrine and clergy-communicant privilege. C.A. Nos. 08-132-JJF, 08-133-JJF, Memo. Op. (D. Del. Feb. 16, 2010). One dispute involved the assertion of the attorney client privilege as to documents that were described in plaintiff’s privilege log as “notes memorializing confidential communications with counsel.” Id. at 7 (internal citations omitted). The court did not find a waiver of privilege, however, it did require the plaintiff to “supplement its privilege log entries” for all documents that are “drafts of confidential communications made to any attorney, or notes of memos to counsel regarding confidential communications.” Id. Further, plaintiff must “identify the actual communication to an attorney (listed within the privilege log) to which the drafts, notes and memos pertain.” Id. at 8.
Another dispute, involved the plaintiff’s assertion of the clergy-communicant privilege for certain emails that were sent to two Hindu gurus to allegedly obtain legal and spiritual advice concerning the litigation. Id. at 10. Plaintiff further argued that they copied certain third parties on the email “in furtherance of the blessings.” Id. at 11. The court accepted plaintiff’s representations and denied defendants’ motion to compel.
Finally, the court found the crime-fraud exception inapplicable to patent-prosecution documents that were withheld by plaintiff because defendants had not made a prima facie showing of fraud. Specifically, the court found that a mere restatement of the defendants’ inequitable conduct allegations is not sufficient to overcome the assertion of the attorney-client privilege based on this exception. Id. at 12-13.
WebXChange Inc. v. Dell, Inc., C.A. Nos. 08-132-JJF, 08-133-JJF, Memo. Op. (D. Del. Feb. 16, 2010).
In Pfizer, Inc. v. Sandoz, Inc., C.A. No. 09-742-JJF (D. Del. Jan. 20, 2010), Judge Farnan explained a recent trend among Delaware ANDA plaintiffs: when jurisdiction in Delaware is not a sure thing, ANDA plaintiffs will bring suit in Delaware, and then immediately bring a second suit in another "safe" forum where jurisdiction is assured. Id. at 12. Plaintiffs feel that they must do this because, under the Hatch-Waxman Act, they have only a 45-day window in which to bring suit once they receive notice of an ANDA filing, and the statute is silent on what happens if the suit that they bring within the window is dismissed for lack of jurisdiction. Id. To be avoid that potential problem, plaintiffs have been hedging their bets by bringing two suits. Id.
In this particular case Pfizer, a Delaware corporation with its principal place of business in New York, brought an ANDA suit against Sandoz, Inc., a Colorado corporation with its principal place of business in New Jersey, but also with its primary manufacturing plant located in Colorado. Id. at 3. Pfizer first brought suit in Delaware, and then a day later brought suit in Colorado. Id. Sandoz filed answers and counterclaims for declaratory judgment in both jurisdictions, and brought the present motion to transfer to Colorado. Pfizer responded with a motion in Delaware to enjoin the declaratory judgment action in Colorado. Id.
Luckily for Pfizer, Judge Farnan seemed to understand their concerns as ANDA plaintiffs. After describing the parties' ordinary arguments for and against Pfizer's choice of forum, id. at 4-5, Judge Farnan explained the need, as other courts have noted, for plaintiffs to bring ANDA cases in a "safe" forum in addition to their preferred forum because of the statute's lack of clarity. In light of that need, and because the other factors were each neutral, Judge Farnan held that Pfizer's choice of forum takes precedence, and denied Sandoz's motion to transfer. Id. at 6-16. Judge Farnan reserved decision on Pfizer's motion to enjoin the declaratory judgment action in Colorado, however, pending the Colorado court's resolution of similar motions to transfer. Id. at 16.
Pfizer, Inc. v. Sandoz, Inc., C.A. No. 09-742-JJF (D. Del. Jan. 20, 2010)
Following the Third Circuit's "liberal" approach to the admission of expert testimony, the Court found that the defendant's trade secret expert was qualified to testify regarding the electrochemistry field. Roche Diagnostics Operations, Inc. v. LifeScan Inc., C.A. No. 07-753-JJF, Memo. Order (D. Del. Jan. 29, 2010). Specifically, the Court held that the proffered expert's "education, academic endeavors, and publications demonstrate a substantial level of expertise." Id. at 2. Plaintiff argued that the expert had no prior experience or skills in the technical area at issue and therefore was unqualified to testify as to defendant's trade secret misappropriation counterclaims. Id. at 1.
In the same case, a jury recently found for plaintiffs on defendant's breach of contract and unfair competition counterclaims. See verdict sheet here.
Judge Farnan recently addressed motions to amend in two related cases.
In WebXchange Inc. v. Dell, Inc. and WebXchange Inc. v. FedEx Corporation, the defendants sought to amend their answers (after the amendment deadline) to "add flesh" to their inequitable conduct affirmative defenses and counterclaims. C.A. No. 08-132-JJF, Memo. Op. (D. Del. Jan. 20, 2010); C.A. No. 08-133-JJF, Memo. Op. (D. Del. Jan. 20, 2010). The court granted defendants' motions to amend finding that the amendments could not have been made prior to the pleading deadline, "despite [their] diligence." Id. at 5. Furthermore, the court found that the amendments were not futile because factual determinations regarding the the extent of the inventor's knowledge of certain documents and whether they were intentionally withheld from the PTO are "not appropriate at this stage of the litigation." Id. at 9. The amendments also do not prejudice plaintiff because the amendments relate to two earlier theories alleged by defendants in their earlier amended answers, no Markman hearing has been held, no trial date has been set and the close of expert and fact discovery are set off the Markman order. Id. at 9.
WebXChange Inc. v. Dell, Inc., C.A. No. 08-132-JJF, Memo. Op. (D. Del. Jan. 20, 2010).
WebXChange Inc. v. FedEx Corporation, C.A. No. 08-133-JJF, Memo. Op. (D. Del. Jan. 20, 2010).
Despite granting the relief sought in a discovery motion, district judge Joseph J. Farnan Jr. has issued a decision declining to award the movant its fees and costs. In the underlying motion, WebXchange sought to compel 30(b)(6) testimony from FedEx about the company's shipping practices. According to FedEx, the topic - an infringement contention - had been untimely disclosed. Observing the absence of prejudice, the Court refused to limit the deposition, and allowed the testimony. Notably, however, the Court rejected a corresponding request for fees and costs:
"The Court concludes that an award of damages and costs is not justified in this situation. Although Plaintiff was successful in its [motion], Defendants were substantially justified in taking the position of opposition based upon the legitimate dispute on whether 'Shipping' has been listed as an infringement contention."
In this case, the "legitimate" discovery dispute precluded the otherwise available Rule 37 sanctions.
WebXchange Inc. v. FedEx Corp., C.A. No. 08-133-JJF (D. Del. Jan. 20, 2010) (Farnan, J.).
A recent decision by district judge Joseph J. Farnan Jr. highlights the expedited schedule a party must pursue to successfully amend a pleading past a discovery deadline. Under FRCP 16(b)'s "good cause" standard, unlike the more lenient amendment standard in FRCP 15(a), an untimely amendment "hinges on [the] diligence of the movant." According to the Court, the following discovery schedule - implemented to uncover a new inequitable-conduct defense - satisfied the good-cause standard:
June 5: Subpoena issued to witness
June 15: Documents produced by witness
June 16, 23, 24, 26: Depositions
June 30: Motion to amend filed
Under the circumstances of this case, a one-month window from subpoena to motion demonstrated the necessary diligence for amending a pleading outside the scheduling order's confines.
ICU Medical Inc. v. Rymed Tech. Inc., C.A. No. 07-468-JJF (D. Del. Dec. 16, 2009) (Farnan, J.).
For those with clients in the entertainment industry, district judge Joseph J. Farnan Jr. recently issued a notable decision construing claims related to paperless event ticketing. In particular, the Court construed the following claims:
"Personalized Physical Material"
"Paperless Ticket"
"Authentication Data"
"Exchanging"
"Data Center"
"Asks"
"Bid"
"Ask Quantity," "Ask Price," "Bid Quantity," and "Bid Price"
"Comparing the Bid to the Asks"
"Completing a Transfer of the Paperless Tickets When the Bid Price Equals the Ask Price and the Ask Quantity is Equal to or Greater than the Bid Quantity"
"The System"
"Access to the Venue Upon Presentation of the Buyer Authentication Data to an Access Device"
The Court also construed seven means-plus-function terms:
"Means for Associating the Paperless Tickets with Authentication Data of the Ticket Seller"
"Means for Reassociating the Paperless Tickets with Authentication Data of the Ticket Buyer"
"Means for Receiving from Ticket Sellers Electronic Asks"
"Means for Receiving from a Ticket Buyer an Electronic Bid"
"Means for Granting Access to the Event Upon Presentation of the Buyer Authentication Data of the Paperless Ticket"
"Means for Comparing the Bid to the Asks"
"Means for Completing a Transfer of the Paperless Tickets When the Bid Price Equals the Ask Price and the Ask Quantity is Equal to or Greater Than the Bid Quantity"
Flash Seats LLC v. Paciolan Inc., C.A. No. 07-575-JJF (D. Del. Jan. 19, 2010).
A recent decision by district judge Joseph J. Farnan Jr. serves to remind litigators that bifurcation is not always a sure bet. In the underlying litigation, the Court rejected an attempt to carve out an inequitable-conduct defense:
"Defendants must meet a high burden to be successful [in proving the defense]. In light of this burden, the potential that duplicative evidence regarding the alleged prior art will be presented at an inequitable conduct trial and at subsequent trials on infringement and invalidity weighs against bifurcation . . . . Accordingly, bifurcating trial on the issue of inequitable conduct will not promote judicial efficiency."
The winning argument? Plaintiff's assertion that it would have to present "much of the same background testimony" in both proceedings to describe the scope of the patents-in-suit and contrast the prior art.
WebXchange Inc. v. Dell Inc., C.A. No. 08-132-JJF (D. Del. Dec. 30, 2009) (Farnan, J.).
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.).
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:
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)
Despite similar cases pending in the Northern District of Illinois, Judge Farnan declined to transfer the case out of Delaware. Stored Value Solutions, Inc. v. Card Activation Technologies, Inc., C.A. No. 09-495-JJF, Memo. Op. (D. Del. Nov. 20, 2009). The Court found that the co-pending cases in Illinois are distributed among five different judges and therefore transferring the case to Illinois would not "increase efficiency over what it is currently." Id. at 8. The fact that a proposed claim construction decision existed, also did not change the Court's opinion "because the construction was not adopted and related to different parties." Id. at 8-9.
Judge Farnan issued an opinion yesterday on a few lingering issues in the Fuji case. This is another St. Clair digital camera patent case; St. Clair received a $3 million dollar jury verdict in 2004 but its execution was stayed until recently due to a dispute over ownership of the patents. St. Clair Intellectual Property Consultants, Inc. v. Fuji Photo Film Co., Ltd., C.A. No. 03-241-JJF at 2 (D. Del. Nov. 19, 2009). The issues included:
A special master in the District of Delaware recently recommended against the imposition of sanctions for a party's failure to timely produce expert-discovery materials. In the decision, issued by Special Master Vincent J. Poppiti, the special master considered and rejected a motion to exclude the evidence - certain product testing materials created by Chipworks - on the ground that the receiving party had the ability, and failed, to cure any claimed prejudice:
"Honeywell was served with Dr. Schlam's Expert Report on September 15, 2009, and was therefore aware of the Chipworks testing as of that date. Although Honeywell inquired whether a Chipworks representative would testify at trial, Honeywell ignored Defendants' offers to make a Chipworks representative available for deposition . . . . [Instead,] Honeywell chose to wait until October 14, 2009 to file the instant motion - a full two weeks after receipt of the [untimely Chipworks materials relied on by Dr. Schlam]."
Because the untimely Chipworks testing materials were already known to Honeywell, according to the special master, the two-week delay erased any potential for prejudice.
In Arendi Holding Ltd. v. Microsoft Corp., C.A. No. 09-119-JJF (D. Del. Oct. 27, 2009) (mem.), Judge Farnan denied a motion to bifurcate a patent infringement action. In denying defendants' (Microsoft and Dell) motion, the court stated that bifurcation
w[ould] not promote the efficient adjudication of the parties' dispute. In the Court's view, the history of these parties, the number of infringement allegations, the disposition of the prior case between the parties in the Rhode Island court (where bifurcation was ordered), the expedited schedule, and the lack of a wilfulness allegation, all counsel toward a unitary procedure for this case. The Court is unable to ascertain any undue prejudice that would or could result from such an approach to resolving the present claims.
Id. at 3.
This implicitly reaffirms that bifurcation in a patent case is not a given, although Judge Farnan has, in some other cases, allowed bifurcation on the basis of litigation inefficiencies. Judge Robinson, on the other hand, recently stated that "I have determined that bifurcation is appropriate, if not necessary, in all but exceptional patent cases," and has appeared to adhere to that rule so far. The Dutch Branch of Streamserve Development AB v. Exstream Software, LLC, C.A. No. 08-343-SLR (D. Del. Aug. 26, 2009) (mem.).
Arendi Holding Ltd. v. Microsoft Corp., C.A. No. 09-119-JJF (D. Del. Oct. 27, 2009) (mem.)
In Arendi Holding Ltd. v. Microsoft Corp., C.A. No. 09-119-JJF (D. Del. Oct. 27, 2009) (mem.), Judge Farnan denied a motion to bifurcate a patent infringement action. In denying defendants' (Microsoft and Dell) motion, the court stated that bifurcation
w[ould] not promote the efficient adjudication of the parties' dispute. In the Court's view, the history of these parties, the number of infringement allegations, the disposition of the prior case between the parties in the Rhode Island court (where bifurcation was ordered), the expedited schedule, and the lack of a wilfulness allegation, all counsel toward a unitary procedure for this case. The Court is unable to ascertain any undue prejudice that would or could result from such an approach to resolving the present claims.
Id. at 3.
This implicitly reaffirms that bifurcation in a patent case is not a given, although Judge Farnan has, in some other cases, allowed bifurcation on the basis of litigation inefficiencies. Judge Robinson, on the other hand, recently stated that "I have determined that bifurcation is appropriate, if not necessary, in all but exceptional patent cases," and has appeared to adhere to that rule so far. The Dutch Branch of Streamserve Development AB v. Exstream Software, LLC, C.A. No. 08-343-SLR (D. Del. Aug. 26, 2009) (mem.).
Arendi Holding Ltd. v. Microsoft Corp., C.A. No. 09-119-JJF (D. Del. Oct. 27, 2009) (mem.)
Judge Farnan recently dismissed Microsoft’s declaratory judgment complaint, involving Microsoft’s MapPoint and Virtual Earth services, against WebXchange because no case or controversy existed sufficient to confer subject matter jurisdiction. Microsoft Corporation v. Webxchange, Inc., C.A. 09-484-JJF (D. Del. Oct. 30, 2009). Microsoft had previously filed a complaint against WebXchange in the Northern District of California which was also dismissed for lack of subject matter jurisdiction. Id. at 2-3. Granting WebXchange’s motion to dismiss, Judge Farnan reasoned that: (1) “Microsoft does not allege even one instance of WebXchange accusing infringement based on the use of Virtual Earth[,]” id. at 7; (2) “no controversy exists by virtue of WebXchange’s infringement suits against Microsoft customers who use MapPoint[,]” id. at 8; (3) “the alleged damage caused by [WebXchange’s cases against Microsoft customers] to Microsoft’s relations with its customers, . . . does not create a controversy between the parties[;] id. at 10, and (4) “WebXchange’s failure to covenant not to sue Microsoft does not create an actual controversy by itself.” Id.
Microsoft Corporation v. Webxchange, Inc., C.A. 09-484-JJF (D. Del. Oct. 30, 2009)
In Personalized User Model LLP v. Google, Inc., C.A. No. 09-525-JJF (D. Del. Oct. 27, 2009), Judge Farnan issued an opinion on a motion by defendant Google to transfer a pending patent infringement suit to the Norther District of California (its home state) under 28 U.S.C. § 1404(a).
The opinion implicitly criticized the current state of Third Circuit law on § 1404(a) motions to transfer. According to the Court, "1404(a) is not complicated," and lays out three "simple, straightforward principles." Id. at 2. But "[i]n the Third Circuit, district courts are required to analyze and weigh a set of eleven (11) private/public factors." Id. The Court analyzed each of the 11 factors, listing in four pages of tables each party's arguments and the Court's conclusions. The Court ultimately denied the motion to transfer under the 11 factors, noting that "[i]nterestingly, the Court would reach the same conclusion by applying the three principles of Section 1404(a) without the enhanced analysis required by the eleven private/public factors of the case law." Id. at 7-8.
Denial of the motion to transfer is unsurprising, since the Delaware District Court denies most transfers anyway (except in the case of regional defendants or first filed cases).
As it has in the past, the Court rejected arguments regarding the location of witnesses and documents. Id. at 4, 6. Among the Court's findings on each of the 11 factors, the Court noted that "[t]here are no significant public efficiency" or "public policy" differences between the District of Delaware and the Northern District of California, and that "[p]atent cases are national cases and seldom open to a local interest analysis." Id. at 6-7. The Court made no indication that it plans to start granting motions to transfer any time soon; when a patent plaintiff files a case in Delaware, it stays in Delaware.
Personalized User Model LLP v. Google, Inc., C.A. No. 09-525-JJF (D. Del. Oct. 27, 2009)
In Honeywell International, Inc. v. Nikon Corp., C.A. No. 04-1337-JJF (Oct. 14, 2009), Judge Farnan, adopting the recommendation of Special Master Vincent J. Poppiti, ordered $18,000 in sanctions against InnoLux, a defendant in a patent infringement case, for its discovery behavior. Id. at 2. These sanctions resulted from a November 25, 2008 order requiring InnoLux to give plaintiff Honeywell an opportunity to re-depose the InnoLux's 30(b)(6) witness, because at the original deposition InnoLux rased multiple groundless objections, improperly instructed the witness not to answer questions allegedly outside of the scope of the discovery order, and possibly failed to adequately prepare the witness.
According to the Court's original order, "each and every objection and ensuing instruction not to answer on the grounds of work product was improper, and each is hereby stricken." Nov. 25th Order, at 3. Further, "It is inappropriate to instruct a 30(b)(6) witness not to answer a question, unless there is an appropriate claim of privilege." Id. Honeywell raised concerns about the witness's lack of preparation, and the number of times that the witness answered "I don't know"; the Court found that each of the questions that elicited an "I don't know" or to which an objection was raised were actually within the scope of the 30(b)(6) notice. Id. at 4-5. Due to the InnoLux's behavior, the Court ordered that the 30(b)(6) witness be re-deposed, and that the firm bear the costs of the deposition, including attorney's fees. Id. at 5. Although the court did not characterize these costs as "sanctions" in the original order, the Oct. 14 order referred to them as "sanctions," and set the amount at $18,000. Oct. 14 Order, at 2.
Continue reading "Sanctions Ordered in Honeywell v. Nikon" »
A recent decision by district judge Joseph J. Farnan Jr. reaffirms the difficulty parties often have in transferring actions out of the District of Delaware. In considering defendant Hologic's motion to transfer venue, the Court recognized that nearly identical litigation between the same parties was already pending in the transferee jurisdiction. But, unlike most other transfer scenarios, Hologic had also filed a third action in Delaware, seeking to enforce its own patents on the same technology.
According to the Court, Hologic's decision to affirmatively litigate its own patents in Delaware weakened its position on transfer:
"The fact that Hologic initiated suit against Ethicon in this District - even though the parties were involved in other patent litigation concerning similar technology in the Southern District of Ohio - indicates that Hologic does not consider this District to be an inconvenient forum."
As a result, Hologic could not justify a transfer out of Delaware. This case stands as a reminder that first-filed pending litigation among the parties, which usually favors a transfer, can also stand as an impediment to obtaining a new forum.
Ethicon Endo-Surgery Inc. v. Hologic Inc., C.A. No. 09-580-JJF (D. Del. Oct. 15, 2009) (Farnan, J.).
In the Court's Order construing some of the claim terms at issue in this infringement action, Judge Farnan requested supplemental briefing for the disputed claim term "homogeneously branched linear ethylene/ά-olefin interpolymers." See The Dow Chemical Company v. Nova Chemicals Corporation (Canada), C.A. No. 05-737-JJF, Order (D. Del. June 25, 2009).
The parties submitted additional briefing and the Court has construed the term to mean the following:
- "homogeneously branched linear ethylene/ά-olefin interpolymers": "ethylene ά-olefin interpolymer in which the comonomer is randomly distributed within a given interpolymer molecule and wherein substantially all of the interpolymer molecules have the same ethylene/comonomer ratio within that interpolymer. Such interpolymer has no long chain branching."
In a recent Markman opinion, Judge Farnan construed several terms relating to two patents pertaining to the use of microelectrodes for the rapid determination of the concentration of an analyte in a liquid sample – a process that, as the court noted, is useful for blood sugar analysis in individuals suffering from diabetes. The parties disputed "the bulk of the language used in the independent claims," id. at 5, and the court construed the following terms:
In UCB, Inc. et al. v. KV Pharmaceutical Company, C.A. 08-223-JJF (D. Del. Aug. 18, 2009) Judge Farnan provided claim constructions for disputed terms of a patent pertaining to “multiparticulate pharmaceutical dosage forms that include both immediate release (“IR”) beads and extended release (“ER”) beads.” The parties disputed the meaning of the claim terms “approximately” and “about,” and Defendant contended that a specific claim term was indefinite. Id. at 5. The Court construed the disputed terms as follows:
“The Total Amount of Methylphenidate Hydrochloride Present Is About 10 to 40 mg”
Plaintiffs argued that, according to its plain and ordinary meaning, the word “about” should be defined as “approximately.” Id. at 6-7. Defendant, pointing to the use of the word in the specification, argued that the definition should be more precise so that the term would require “precision within ‘rounding’ or ‘measurement error.’” Id. Ultimately, the Court chose to adopt the Plaintiffs construction. Noting Ortho-McNeil Pharm., Inc. v. Caraco Pharm. Labs., Ltd., 476 F.3d 1321, 1327-28 (Fed. Cir. 2007), the Court held that a narrow construction was inappropriate here because the evidence relied upon by Defendant did not support the proposed construction. Id. at 9-13. Defendant argued that because the word “approximately” is also a claim term, construing “about” to mean “approximately” would give “two different claim terms . . . the same meaning.” Id. at 13. The Court responded that “notwithstanding this consideration, without a more concrete basis for either Defendant’s construction or some alternative construction of “about,” the most appropriate construction of “about” is simply “its ordinary and accepted meaning of ‘approximately.’” Id. (quoting Merck & Co. v. Teva Pharms. USA, Inc., 395 F.3d 1364, 1372 (Fed. Cir. 2005).
“The Immediate Release Beads Are Present in an Amount of About 20 to 40 Percent and the Extended Release Beads Are Present in an Amount of About 60 to 80 Percent”
The Court applied the same legal principles here to construe “about,” and reached the same conclusion giving “the term ‘about’ its ordinary and customary meaning of ‘approximately’” Id. at 16.
“Approximately”
Plaintiffs contended that this term required no construction, whereas Defendant asked the Court to construe this term to mean “almost exactly,” which was its plain and ordinary meaning according to the American Heritage College Dictionary. Id. at 17. The Court agreed with Plaintiff’s position, because although “Defendant’s extrinsic dictionary definition clearly supports such a construction, without some meaningful corresponding basis for it in the intrinsic record, the Court will not paraphrase the ordinary word ‘approximately’ as ‘almost exactly.’” Id.
“Water”The Defendant contended that the term should be construed to mean “purified water (per the USP)” whereas Plaintiffs thought no construction was necessary. Id. at 18. The Court agreed with Defendant. Id. “[B]ecause the claim specifically itself calls for the testing to be done in a USP apparatus, it is appropriate to construe the claim term ‘water’ in terms of the definition set forth in the USP.” Id. at 19. This construction is not “an improper importation of a limitation from the extrinsic record, . . . because the claim itself calls for testing to be done in a USP apparatus . . . .” Id.
“An Amount Up to 20 Percent” and “An Amount Up to About 4 Percent”
The Defendant argued that these terms were indefinite, whereas Plaintiffs contended that “the specification confirm[ed] that the percentages [were] weight percentages on the total weight of the coated particle.” Id. at 20-21. “A claim will be found indefinite only if it ‘is insolubly ambiguous, and no narrowing construction can properly be adopted . . . .’” Id. at 21 (quoting Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1319 (Fed. Cir. 2008). Looking at the limitation of the claim, the Court decided to construe the claim as Plaintiffs’ contended because it was the “only reasonable interpretation . . . .” Id. at 22-23.
The Court also addressed Defendant’s arguments regarding the validity of a certain claim. Defendant argued that “Claim 1 of the ‘215 patent [was] inoperative as calling for the impossible.” Id. at 25. The Court ultimately decided to reserve its decision on that issue due to the early stage of the litigation. Id.
UCB, Inc. et al. v. KV Pharmaceutical Company, C.A. 08-223-JJF (D. Del. Aug. 18, 2009)
Judge Farnan recently granted Plaintiffs’ Motion to Strike Defendants’ Motion for Summary Judgment of Unenforceability based upon defendants’ failure to plead their inequitable conduct defense with particularity; and defendants’ subsequent failure to take any action to amend their Answer. Laboratory Skin Care, Inc., et al. v. Limited Brands, Inc. et al., C.A. No. 06-601-JJF (D. Del. Aug. 17, 2009). Defendants argued that they could not have amended their answer to plead inequitable conduct with particularity before summary judgment because a crucial deposition transcript was withheld by plaintiffs until the day before discovery closed. Id. at 7. The Court disagreed noting several opportunities defendants had to obtain the necessary information to plead their current inequitable conduct defense theory with particularity, including the opportunity to move to amend after defendants received the deposition transcript or concurrently with their summary judgment motion. Id. at 8-9.
In June 2009, Magistrate Judge Stark granted Plaintiff St. Clair’s Motion for Leave to File a Second Amended Complaint to, among other things, add allegations for willful infringement against Defendant Nokia. St. Clair Intellectual Property Consultants, Inc. v. Matsushita Electronic Industrial Co., et al., C.A. No. 04-1436-JJF-LPS (D. Del. June 10, 2009). In opposition to St. Clair’s motion, Nokia, relying on Lucent Techcs. v. Gateway, Inc. and In re Seagate Tech., unsuccessfully argued that St. Clair’s proposed amendment would be futile because the PTO’s grant of a reexamination precludes a claim of willful infringement, as a matter of law. In his July 28, 2009 memorandum opinion, Judge Farnan agreed with Magistrate Judge Stark’s rejection of Nokia’ argument because the courts in Lucent and Seagate “clearly refrained from creating a per se rule that a reexamination order precludes the possibility of proving willful infringement on summary judgment.” St. Clair Intellectual Property Consultants, Inc. v. Matsushita Electronic Industrial Co., et al., C.A. No. 04-1436-JJF-LPS, at 6 (D. Del. July 28, 2009). As such, “Judge Stark correctly rejected Nokia’s reading of Lucent as support for its argument that reexamination order must make futile any attempt to amend a complaint to include a count for willful infringement. As Judge Stark stated, this is so even where the PTO and a District Court do not agree on claim construction because ‘the Court is not bound by [the PTO’s] construction.’” Id.
A defendant's motion to transfer will be denied where there is no evidence to establish that the defendant could have been sued in the transferee forum originally. Safety Braking Corp. v. Six Flags Theme Parks, et al., C.A. No. 07-127-JJF, Memo. Op. (D. Del. June 9, 2009). This is what Judge Farnan recently found in the Safety Braking Corp. matter in which the plaintiffs brought suit against several groups of theme park defendants all of which are Delaware entities that own and operate amusement parks in various locations across the United States. Defendants moved to transfer the litigation to the Central District of California where related cases involving similar technology and the same parties are pending. Id. at 2-3. The Court found that transfer was not appropriate because defendants did not submit sufficient evidence to show that plaintiffs could have properly brought suit in the Central District of California. Id. at 9.
The District of Delaware was recently asked to decide a discovery dispute over third party documents related to litigation pending in California and Texas. Software Rights Archive, LLC v. Google Inc., Yahoo! Inc., IAC Seach & Media, Inc., AOL LLC and Lycos, Inc., Misc. No. 09-017-JJF, Opinion (D. Del. May 21, 2009). Specifically, the movants (Google Inc., Yahoo! Inc., IAC Seach & Media, Inc., AOL LLC and Lycos, Inc.) were seeking documents from the third parties (Delaware entities) related to: (1) jurisdiction; (2) "respondent's efforts, if any, to 'monetize' the patents-in-suit"; and (3) the patents and their inventors. Id. at 2.
Judge Farnan held that although the documents may be available from the opposing party, there is no rule that prohibits a party from also requesting those same documents from a third party or requiring them to request them from a party first. Id. at 4. Moreover, to ensure the "completeness" of discovery, "where a party requests documents from a non-party that are likely to be in the possession of an opposing party, production of documents is appropriate where those documents constitute a 'non-well-defined set' 'whose completeness is not readily verifiable.'" Id. at 6. (internal citations omitted). Therefore, the Court ordered the third parties to produce the documents despite the fact that the opposing party might also be in possession of the documents.
Judge Farnan recently construed the claim terms in a patent related to a combination of "(1) the (-) -enantiomer of an antiviral agent known as BCH-189...and (2) the well-known HIV antiviral agent AZT." Glaxo Group Ltd. v. Teva Pharmaceuticals USA, Inc., C.A. No. 07-713-JJF, Memo. Order (D. Del. Apr. 30, 2009). The following claim terms were construed:
- "method for the treatment of a mammal including man, suffering from or susceptible to infection by HIV" (the Court found no construction necessary)
- "form of dosage unit"
- "pharmaceutically acceptable carrier"
The parties also submitted the terms "comprises" and "includes" for construction. The Court chose to adopt a standard jury instruction either prepared by the AIPLA or one agreed upon by the parties as to the meaning of those terms. Id. at 3-4.
A plaintiff's place of residence will not excuse the reasonable diligence requirement to discover a trade secret claim under 6 Del. C. Section 2006. In fact, a foreign plaintiff will be deemed to be on notice once a patent is filed in the United States containing the trade secret and therefore any trade secret claim must be brought within three years following the filing date of that patent. Raza v. Siemens Medical Solutions USA, Inc., C.A. No. 06-132-JJF, Memo. Op. (D. Del. Apr. 16. 2009).
Raza v. Siemens Medical Solutions USA, Inc., C.A. No. 06-132-JJF, Memo. Op. (D. Del. Apr. 16. 2009).
Judge Farnan found an English professor's declaration opining on the proper function of a comma to be admissible under Rule 702 as part of the claim construction process. To the extent a party argues that it contradicts the intrinsic evidence or the expert does not have relevant technical expertise, however, it will impact the weight the Court gives the opinion. American Patent Development Corporation, LLC v. Movielink, LLC, C.A. No. 07-605-JJF, Memo. Op. (D. Del. Mar. 27, 2009).
The Court also construed the following terms found in the patent-in-suit that relates to a "simple, inexpensive system for limiting the use of a downloaded video program purchased by a customer":
- "a digital data stream comprising said video product, and data establishing a limit for authorized viewing of said video product"
- "a digital data stream comprising said video product, data establishing a time period during which viewing of said video product is authorizied"
- "central station"
- "decoding said data establishing a limit"
- "comparing an output of a local clock signal generator with said result of said decoding step"
- "storing a result of said decoding step"
- "erasing said video product"
- "user site" (the Court found no construction necessary)
- "video product" (the Court found not construction necessary)
- "data establishing a limit for authorized viewing of said video product" (the Court found no construction necessary)
Of note, plaintiff based some proposed constructions on dictionary definitions that postdated the filing of the patent and the Court refused to adopt constructions based on those proposed definitions. Id. at 28.
In a recent case, Defendant Tivo, Inc. (“Tivo”), moved the Court to dismiss Plaintiffs’ (collectively, “Echostar”) case pursuant to the Court’s power under the Declaratory Judgment Act. Dish Network Corp. v. Tivo, Inc., C.A. No. 08-327-JJF, Memorandum Opinion (D. Del. Mar. 31, 2009).
The backstory … Tivo successfully sued Echostar for patent infringement before Judge Folsom in the Eastern District of Texas. Echostar redesigned its products and alleged that its redesigned products no longer infringed Tivo’s patents. Tivo disagreed and pursued a contempt action before Judge Folsom in Texas. Id. at 2. Meanwhile, Echostar brings this action in the District of Delaware to “remove the ‘cloud’ of uncertainty” surrounding its products.
The conflict begins … Judge Farnan begins his analysis of Tivo’s motion to dismiss with a hint of foreshadowing. Judge Farnan points out that Tivo “only” argues the Court should “exercise its discretion to decline jurisdiction over the instant declaratory judgment suit.” Id. at 6. Nevertheless, the Court is “unpersuaded” by Tivo’s arguments for dismissal stating that the only issue is whether there is enough of a difference between Echostar’s redesigned products and the original infringing products so that the proper forum for adjudication is the contempt proceedings before Judge Folsom in Texas. Id. at 7-8.
The plot thickens … Judge Farnan denies Tivo’s motion because whether Tivo can show a “colorable difference” between the products is a decision best made by Judge Folsom but not an “adequate basis” upon which the case can be dismissed. Id. at 9. The story climaxes when Judge Farnan, sua sponte, raises the idea to transfer the case to the Eastern District of Texas, reminding Tivo that the idea of “an alternative motion to transfer” should have been raised by them “with the instant [m]otion.” Id. at 10.
Moral of the story … never forget to give the Court the basis to find in your favor.
Dish Network Corp. v. Tivo, Inc., C.A. No. 08-327-JJF, Memorandum Opinion (D. Del. Mar. 31, 2009).
In a recent decision, district judge Joseph J. Farnan rejected a "colloquial" claim definition in favor of the "textbook" meaning:
"[T]he dispute between the parties primarily centers around whether 'power' should be interepreted according to its ordinary, 'textbook' definition or whether it should be interpreted according to a 'colloquial' definition, proposed by Plaintiff . . . . Plaintiff contends that a person of ordinary skill in the art, upon reading the specification . . . , would understand that the patent embraces the colloquial definition of 'power' . . . . Although Plaintiff correctly notes that the specification does not explicitly adopt the textbook definition of 'power,' the intrinsic record also does not clearly reject this textbook definition."
Moreover, even Plaintiff's own expert used the term in its "classic sense." As a result, the Court rejected the colloquial use and adopted the textbook meaning.
Reminding parties that the Court disfavors motions to strike pursuant to Fed. R. Civ. P. 12(f), Judge Farnan, granted in part and denied in part plaintiffs’ motion to strike portions of the defendant’s answer, defenses and counterclaims in Symbol Technologies, Inc. v. Aruba Networks, Inc., C.A. No. 07-519-JJF, Memo. Op. (D. Del. Mar. 30, 2009).
• Equitable Estoppel - Defendant alleged that Plaintiff Symbol was equitably estopped from asserting its patents because during merger negotiations between Symbol and Defendant they never suggested they may assert the patents against Defendant. Judge Farnan denied plaintiffs’ motion because equitable estoppel is so driven by the underlying facts and the factual record at this stage of the proceeding was so “sparse.” Id. at 6.
• Laches – Noting that defendant pled a “garden variety” laches defense, and finding a difference between putting a plaintiff on notice of a typical laches defense and a prosecution laches defense, Judge Farnan granted plaintiffs’ motion as to that defense giving defendant leave to amend in order to put “Plaintiffs on fair notice of their alleged ‘prosecution laches’ defense.” Id. at 8.
• Inequitable Conduct - Defendant alleged that plaintiff Wireless Valley committed inequitable conduct when it “buried” a highly material reference in a disclosure to the patent examiner. Plaintiffs moved as to this defense and counterclaim because the reference was cited to the examiner. In granting plaintiff’s motion, Judge Farnan noted that dicta in the Molins court may support the contention that “burying” a reference is indicative of bad faith, this is contradicted by the decision of that case and the Federal Circuit decisions in Scripps and Fiskars. The Court followed the Federal Circuit precedent in Fiskars, that held “An applicant can not be guilty of inequitable conduct if the reference was cited to the examiner.” Id. at 8-9. (internal citations omitted).
• Introduction and Summary – In an interesting portion of their motion, plaintiffs’ asked the Court to strike defendant’s introduction and summary to their answer as non-responsive to the complaint and potentially prejudicial. Judge Farnan granted plaintiffs’ motion on this issue concluding that the “surplusage” contained therein was irrelevant to defendant’s equitable defenses. Id. at 10-12.
Section 271(e)(2) is the well known provision of the Patent Act that creates an artificial act of infringment by the filing of an ANDA with the FDA. This statute is the means by which a "case or controversy" arises so that the ANDA filer or a patentee can initiate suit regarding invalidity or infringement. But are the elements of Section 271 intended to be jurisdictional prerequisites?
Judge Farnan recently overruled defendants' objection and adopted a decision by Magistrate Judge Stark where Judge Stark applied Rule 12(b)(6) standards to a motion to dismiss an infringment action brought pursuant to 35 U.S.C. 271(e)(2). AstraZeneca Pharmaceuticals LP v. Aurobindo Pharma Ltd., C.A. No. 07-810-JJF-LPS, MDL No. 08-1949-JJF-LPS, Memo. Op. (D. Del. Feb. 25, 2009). The Court found that Judge Stark did not err in his application of Rule 12(b)(6) because the elements of Section 271(e)(2) are not jurisdictional but instead "subject matter jurisdiction over a Section 271(e)(2) claims still flows from 28 U.S.C. 1338(a)." Id. at 5.
On February 17, 2009, a Delaware jury returned a verdict in the case of CIF Licensing, LLC, d/b/a/ GE Licensing v. Agere Systems, Inc., C.A. No. 07-170-JJF. The patents-in-suit, U.S. Patent Nos. 5,048,054, 5,428,641, 5,446,758 and 6,198,776, involve technology related to modems. The jury returned an infringement verdict against defendant on all four patents. For the '641 and '776 patents the jury found defendant Agere's infringement to be willful. The jury also found three of the patents invalid. The '054 and '758 patents were found invalid as they were anticipated by prior art. The '054, '758 and '776 patents were also found invalid as obvious in light of the prior art. The jury awarded damages to the plaintiff in the amount of $7.6 million (based on a 13.5% royalty rate for hardware modems and 4.5% royalty rate for software modems). A copy of the public version of the verdict form can be found below.
Last week, district judge Joseph J. Farnan Jr. issued a Markman decision addressing the claims of a skin-care-product patent. Notable among the Court’s analysis is its discussion of the term “comprising” in the context of the specification. The Court considered, and rejected, defendants’ argument that, because the specification details that the invention comprises an “absorption enhancing material,” the claim at issue must also be defined to include an “absorption enhancer”:
“The Court is aware of no cases, and Defendants do not cite any, standing for the proposition that the term ‘comprising,’ when used in the specification, means ‘the listed ingredients are required.’”
According to the Court, the specification describes a number of components that no party contends are properly part of the claim’s scope. As a result, “the specification – including its passages that use the word ‘comprise’ – simply does not provide a clear and consistent basis upon which to limit the claims.”
Laboratory Skin Care Inc. v. Limited Brands Inc., C.A. No. 06-601-JJF (D. Del. Feb. 11, 2009).
In an effort to curb collusive extensions of the 180-day exclusivity period between brand drug manufacturers and primary ANDA filers, Congress extended declaratory-judgment jurisdiction to secondary ANDA filers under the 2003 amendments to the Hatch-Waxman Act. Before, delayed-entry settlement agreements often blocked secondary filers from going to market. Now, however, secondary filers can hasten their entry if, among other statutory devices, the primary filer fails to take its generic to market within 75 days after a court judgment of invalidity or non-infringement.
But what happens when a brand manufacturer, after independently settling with the primary filer, offers the secondary filer a covenant not to sue on the very patent that forms the basis for the secondary filer's declaratory-judgment action (and hence the secondary filer's only potential means of early entry to the market)?
In a lucid opinion, district judge Joseph J. Farnan Jr. addressed this question by referencing the competing goals of Hatch-Waxman: "balanc[ing] the need for pharmaceutical innovation with the need for generic drug competition." At the outset, the Court acknowledged that, by accepting jurisdiction, a later judgment for the secondary filer would eliminate the primary's exclusivity period:
"[B]ecause of the settlement agreement between [the primary filer] and Sepracor, [the primary] may not go to market until August 2012. If, more than 254 days prior to this, [the secondary] were to attain a court judgment of non-infringement or invalidity of Sepracor's Orange Book patents, [the primary's] exclusivity period would be completed entirely before [the primary] could go to market."
Allowing jurisdiction, in other words, would frustrate the exclusivity incentive to challenge brand patents. The competing goal of resolving patent disputes in a timely fashion, however, ultimately took precedence:
"[A] signficant aspect of this [statutory goal structure] is to encourage the early resolution of patent disputes when subsequent Paragraph IV ANDA filers are blocked by a first generic applicant's 180-day exclusivity."
Although not explicitly stated, the Court's decision touches on equitable principles. Implicit in the Court's analysis is the delayed-entry settlement executed by the primary filer. By voluntarily waiting to launch its generic, the primary undermined its standing to claim the salutary benefits of exclusivity. Rather than reward the primary in this situation, the Court chose the route that actually fulfilled one of the statutory goals. In these circumstances, at least when declaratory-judgment jurisdiction is at stake, it appears that the secondary filer has the edge.
Dey LP v. Sepracor Inc., C.A. No. 08-372-JJF (D. Del. Jan. 30, 2009) (Farnan, J.).
Last week, district judge Joseph J. Farnan Jr. issued a claim construction decision notable for its means-plus-function analysis. The patents-in-suit, which disclose methods for automating filing tax returns, offered a number of claim terms for construction. But, according to the Court, the specification failed to disclose any structure to support the means-plus-function limitations:
"[T]he specification offers no detail regarding the underlying algorithms used by TurboTax to perform the recited means-plus-function steps. In these circumstances, additional evidence is necessary to confirm that one of skill in the art would understand the references to TurboTax as disclosing particular algorithms, and, more importantly, what those algorithms are. But no such evidence has been provided."
Even if this evidence were presented, the Court continued, a corresponding structure is still absent:
"[T]hough the specification explains that certain steps can be implemented using progams 'similar' to TurboTax, the key reference in the specification to such software largely disparages it on the basis of requiring manual input. Where the patent's reference to prior art software is, at best, equivocal, the Court is unethusiastic about relying on it for corresponding structure."
Accordingly, to effectively combat a specification lacking detail on corresponding structure, practitioners should be prepared to offer ordinary-skill evidence during the Markman process.
The discovery of source code has become a frequent area of dispute in patent cases. The hottest topics usually relate to protecting the highly confidential nature of source code. In CIF Licensing, LLC v. Agere Systems, Inc., however, the defendants produced their complete source code in escrow and plaintiff had complete access to it. C.A. No. 07-170-JJF, Memo. Op. (D. Del. Jan. 23, 2009). What the plaintiff sought by its motion to compel was, in part, detailed answers to interrogatories that asked the defendants to identify specific lines of the source code that perform the specific functions set forth in the claims of the patents-in-suit. Id. at 3. The Court refused to require the defendants to provide such detailed responses because plaintiff has full access to the source code and each side's experts would undertake "essentially the same process to glean the requested information from the source code". Id. at 3-4.
CIF Licensing, LLC v. Agere Systems, Inc., C.A. No. 07-170-JJF, Memo. Op. (D. Del. Jan. 23, 2009).
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.
Sepracor, Inc. v. Dey, L.P., C.A. No. 06-113-JJF (Consol.), Memo. Op. (D. Del. Dec. 18, 2008).
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.
Leonard v. Stemtech Health Sciences, Inc., C.A. No. 08-67-JJF, Memo. Op. (D. Del. Dec. 19, 2008).
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.
Honeywell Int'l Inc. v. Nikon Corp., C.A. No. 04-1337-JJF (D. Del. Dec. 9, 2008) (Farnan, J.).
Once a patentee files a disclaimer, any cause of action related to an interference proceeding is mooted and therefore the federal court lacks jurisdiction to hear a declaratory judgment dispute. 3V, Inc. v. CIBA Specialty Chemicals Corp., C.A. Nos. 06-593-JJF, 06-629-JJF, 06-672-JJF, Opinion, at 10 (D. Del. Nov. 19, 2008). If a party wishes to continue to address the priority date of the claims or whether a disclaimed patent constitutes prior art, they can assert those claims in any future litigation surrounding potential infringement, but it is not appropriate for the court to address them in the context of an appeal from the Board of Patent Appeals and Interferences once one of the patents involved in the underlying interference has been disclaimed. A priority dispute must exist to establish federal jurisdiction over a Section 291 or Section 146 action and interfering patents are a prerequisite to any priority dispute. Id. at 12.
The court also denied defendant’s motion for leave to discover documents related to the plaintiff’s disclaimer and decision to file the disclaimer. Id. at 14. Defendant sought such documents because, they argued, the plaintiff purposefully withheld their intent to file a disclaimer from the defendant in order to drive up litigation costs and therefore defendant should be entitled to exceptional case damages. Id. at 5. The court found such information to likely constitute work-product or be subject to the attorney-client privilege. Id. at 14-15. Furthermore, the fact that defendant spent money and time engaging in discovery was not sufficient to justify the burden of additional discovery. Id. at 15.
In a somewhat unusual procedural posture, Defendants moved the district court for attorneys' fees following a stipulated judgment of non-infringement after Judge Farnan issued his Markman Order construing the terms in favor of defendants. Prism Technologies LLC v. Verisign, Inc., C.A. No. 05-214-JJF, Memorandum Opinion (D. Del. Sept. 30, 2008). After the Federal Circuit affirmed Judge Farnan's Markman Order, defendants moved pursuant to 35 U.S.C. 285 to declare this matter an exceptional case and award defendants their attorneys' fees. Though admitting that the plaintiff could have done a "more thorough" pre-suit investigation, the Court found that the claim chart and analysis done by the plaintiff was "adequate to support its claims." Id. at 6. Judge Farnan also found that the plaintiffs' reasonableness in continuing to pursue the litigation was supported by its conduct, particularly its withdrawal of the infringement claims once it knew it could not support its claims under the Court's claim construction. Id. at 8. The Court therefore, found that defendants did not establish that this was an exceptional case.
That willfulness is not properly a part of a Hatch-Waxman case is not a controversial proposition anymore. In a recent opinion, District Judge Joseph J. Farnan Jr. reaffirmed a long line of cases that jettisoned willful infringement allegations grounded solely on ANDA filings.
An interesting aspect of the decision, however, is its procedural posture: defendant chose to employ the the pre-answer motion to strike under FRCP 12(f). By granting this type of "disfavored" motion - especially when defendant had already filed its answer - the Court signaled that the willfulness argument, in a typical ANDA scenario, will no longer succeed in D. Del.
Sepracor Inc. v. Dey L.P., C.A. No. 06-113-JJF (D. Del. Sept. 26, 2008) (Farnan, J.).
Following a plaintiff's jury verdict and post-trial proceedings, including sanctions motions, District Judge Joseph J. Farnan Jr. has entered a final judgment in the St. Clair/Fuji infringement litigation. The Court entered judgment for St. Clair in the amount of $3,003,465.00, with interest and costs.
Resolving a charge of inequitable conduct requires a close reading of an often conflicting factual record for clues that evince an intent to deceive. In a post-trial opinion released yesterday, District Judge Joseph J. Farnan Jr. acknowledged that fine evidentiary line by reluctantly refusing to find a patentee defrauded the PTO by summarizing, instead of naming, the controlling prior art.
Although labeling the mode of disclosure suspicious, the Court, based on these findings, ultimately declined to hold the patent-in-suit unenforceable:
"[T]he Court is troubled by the fact that Dr. Eklund possessed known material prior art references but did not disclose the actual references themselves. However, absent a bright line rule by the Federal Circuit that non-disclosure of possessed, material art equates with inequitable conduct, the Court is unwilling to strike a patent in the circumstances of a plausible explanation for that non-disclosure."
This decision underscores the importance of the standard of proof in patent litigation: to demonstrate an inequity clearly and convincingly requires more than arguing that the patentee neglected to choose the optimal vehicle for disclosure.
Following post-trial decisions on invalidity and evidentiary matters earlier this year, District Judge Joseph J. Farnan Jr. has entered a final judgment in the Boehringer/Mylan Pharmaceuticals ANDA litigation. In its June 2008 decision, the Court held the patent-in-suit infringed but invalid. In negotiating the subsequent final judgment, the parties disputed whether the Court should memorialize its finding of infringement. After the parties submitted competing proposals, the Court, without comment, chose to omit any reference to its infringement finding.
Parties to litigation, and particularly high stakes patent litigation, spend a lot of time and money discovering facts that may prove their case or defense. Judge Farnan in a recent opinion has made clear, however, that there are limits to what a party can obtain under the rules. Purdue Pharma Products, L.P. v. Par Pharmaceuticals, Inc., C.A. No. 07-255-JJF, Memo. Order (D. Del. Aug. 26, 2008).
The Court in Purdue Pharma, granted a third party's motion to quash a subpoena which sought documents related to an opposition to the European counterpart of the patent-in-suit and documents related to the knowledge a non-party foreign individual that was working on similar technology. In deciding to grant the motion, the Court found that the foreign patents and printed publications sought from the subpoenaed party are available without the defendants burdening the courts, the parties or foreign individuals. Id. at 5. The information related to a foreign individual's potential "knowledge or use" of the patented product is not prior art and is "too peripherally relevant to the matter at issue to justify issuing a letter request under the Hague Convention." Id.
Lesson learned: Parties seeking to burden both the district courts, foreign tribunals and foreign individuals in the quest for documents and testimony should be able to demonstrate that the information is sufficiently relevant to the litigation to "justify the burden and expense." Id. at 6.
For a copy of the opinion see here.
We recently reported on an invalidity decision by District Judge Joseph J. Farnan Jr. that declined to give effect to a so-called terminal disclaimer. Earlier this week, the Court followed that post-trial opinion with a decision resolving the parties' evidentiary disputes. Among those disputes? The admissibility of the same disclaimer.
In its opinion, the Court noted that plaintiffs sought to introduce the disclaimer after the close of evidence. Although it acknowledged "concern" over the timeliness of the filing, the Court nonetheless allowed the document into evidence. As part of the patent-in-suit's prosecution history, the disclaimer became on filing an "admissible supplementation of an already identified trial exhibit."
As a result, the Court concluded, the "issue of timeliness is more appropriately addressed in the context of the disclaimer's effectiveness, rather than its admissibility."
Judge Farnan recently construed the terms below for claims related to technology used to "optimize the rate at which data can be transmitted across communication channels." CIF Licensing, LLC v. Agere Systems, Inc., C.A. No. 07-170-JJF, Memo. Op. (D. Del. July 10, 2008):
-"receiver"
-"line probing processor"
-"selector"
-"for selecting one of the plurality of frequency bands"
-"for selecting one of the plurality of bit rates"
-"constellation"
-"constellation switching"
-"can be"
-"frame selector"
-"zero insertion unit"
-"signal constellation selector/mapper"
-"operably coupled"
Judge Farnan further found that the preambles of certain claims were limiting under the recent Federal Circuit decision Symantec Corp. v. Computer Assocs. Int'l Inc., 522 F.3d 1279 (Fed. Cir. 2008).
A copy of the opinion can be found here.
Last week's ANDA win by a generic-drug manufacturer in the District of Delaware is notable for many reasons, chief among them the Court's double patenting analysis. See IP Law360 (subscription). But Judge Farnan's opinion is also notable for its discussion of an obscure term-extension device, the Section 253 terminal disclaimer.
After recounting the underlying family of applications, and the concomitant risk of double patenting, the Court addressed -- and rejected -- the patentee's assertion that its partial disclaimer of the patent-in-suit's remaining term mooted an invalidity finding. By doing so, the Court highlighted the importance of timing when filing a terminal disclaimer.
The Court began by noting the "dual problem" in the litigation: that the disclaimer was filed near the conclusion of trial and after the expiration of the earlier patent. Looking to the limited Federal Circuit precedent, the Court concluded that a "terminal disclaimer may overcome a nonstatutory double patenting rejection only if the earlier patent has not yet expired."
Beyond the statutory arguments, the Court also expressed concern about the patentee's delay in seeking the disclaimer:
[E]xtensive delay in filing a document which may ultimately moot a double patenting issue can have harsh effects on the judicial system as a whole resulting in gamesmanship during trial, and/or a waste of the Court's and the parties' resources. (Op. at 22-23 n.8)
Having filed the disclaimer after the earlier patent's expiration, the Court concluded that the patentee could not invoke Section 253's safe harbor provisions in its efforts to escape a finding of invalidity.
This morning's edition of IP Law360 (subscription) features an informative article on judges' pet peeves in patent litigation. Featured in the piece are two D. Del. judges: Chief Judge Sleet and Judge Farnan.
Of note are the judges' comments on summary judgment motions and the use of experts. On the issue of summary judgment, Chief Judge Sleet noted that:
Generally in these cases, both parties have experts who are ready, willing, and able to come to court and dispute the facts. It can be a significant waste of time and money to bring a summary judgment motion.
Judge Farnan agreed: "The problem is, if I'm a lawyer for a generic and I'm attacking a patent and I think it is obvious because of a combination of two prior pharmaceutical products, there's almost always going to be a dispute of facts."
On the topic of experts, Judge Farnan cautioned litigants against expert overkill:
I pretty much let [litigants] try the case they want, but I talk to them in the pretrial conference about the value [experts] offer. I have to write an opinion, and they want that opinion yesterday. So I tell them, 'the more you put into that trial record, the more I have to consider and address.'
Patent litigation is an aggressive, competitive field of law. The judges' comments today add valuable perspective - that of the decision maker - to how best to champion the causes of our clients.
Can earlier litigation on the same patent and in the same court justify a departure from the well-worn first-filed rule? According to District Judge Joseph J. Farnan Jr., it does not. The DJ plaintiff, who had earlier been sued in the Eastern District of Texas, argued against transfer there based on prior Delaware litigation involving the same patent.
The Court rejected this argument, holding that the earlier case did not constitute a "special circumstance" justifying a departure from the first-filed rule. Because that litigation involved a different Delaware judge, the Court could not be "substantially more familiar" with the patent-in-suit than the Texas district court. With no other aspects of the dispute favoring litigation in Delaware, the Court transferred the case.
District of Delaware Judge Joseph J. Farnan Jr. recently weighed in on a patent-related document subpoena dispute, touching on professional conduct in so-called "rocket docket" litigation. By ordering an evidentiary hearing, the Court reminded the parties (and the reader) of its inherent supervisory power over litigants:
In the Court's experience, lawyering in fast paced, high stakes litigation can sometimes wander from the professional standards expected. . . . In order to resolve the legal issues presented by the petition and the professional issues presented by the briefing, the Court will conduct an evidentiary hearing.
To reinforce its point, the Court ordered that even if the "subpoena issues are fully resolved, the hearing must still go forward to resolve the professional issues." Patent litigators take note: in this district, allegations of unprofessionalism will be fully vetted.
A foreign corporation manufactures in a foreign country products alleged to infringe a U.S. Patent. They provide modules to original equipment manufacturers here in the U.S. who then incorporate them into products sold to consumers through retailers across the country and on the Internet. The foreign corporation also owns directly and indirectly subsidiaries which are Delaware corporations. Are these contacts with Delaware enough to establish personal jurisdiction over the foreign corporation? Judge Farnan recently answered that question in the affirmative in his decision denying a motion to dismiss filed by defendants in LG.Philips LCD Co., Ltd. v. Chi Mei Optoelectronics, Corp., et al., C.A. Nos. 06-726-JJF, 07-357-JJF, Memo. Op. (D. Del. Apr. 29, 2008).
Jurisdiction under the Delaware Long-Arm Statute was proper because the foreign corporation, Chi Mei Optoelectronics, "acted in consort" with the original equipment manufacturers here in the United States to place products containing the allegedly infringing modules into a national distribution network which ultimately allowed some products to be sold in Delaware. Id. at 12. The fact that there was a "middle man" through which the defendant sold its product did not protect it from the possibility of being subject to jurisdiction of the Delaware court. Id. Furthermore, the plaintiff, LG.Philips provided "sufficient evidence" of revenues from sales of the accused products in Delaware. Id. The Court noted and "found instructive" the defendant's failure to provide any evidence rebutting the "factual presumption that a portion of [their] large revenues from the United States market are the result of products incorporating its ... module sold in Delaware..." Id.
Jurisdiction also comports with Due Process, because given the defendant's contract with its original equipment manufacturers (and one major one in particular), the substantial quantities of modules it ships to the U.S. to be incorporated into end products and sold in retail stores here, and the size of its business, Judge Farnan found it "far from a stretch to conclude" that the modules would end up in Delaware. Id. at 14.
For a copy of the opinion click here.
Modern legal practice sweeps across a broad spectrum of domestic and international business. Before patents are litigated, they are often exchanged, like any other commodity, on the open market. To effectively pursue the acquisition and protection of intellectual property, businesses must engage counsel experienced in both deals and litigation. It is therefore inevitable that one law firm will find itself retained on aspects of each of these steps.
But what happens when a single firm ends up on opposite sides of the acquisition-litigation coin?
According to District of Delaware Judge Joseph J. Farnan Jr., if the two transactions are wholly unrelated, with no possibility of confidential revelation, a motion to disqualify is unfounded.
In the subject litigation, a law firm first represented the infringement plaintiff in its purchase of the IP rights in the accused product. The same firm then found itself representing the defendant in the infringement litigation. Although the potential for conflict is apparent from this arrangement, the Court noted that the differences in the two transactions make this an atypical case:
The present action concerns issues of infringement . . . . It does not implicate the underlying transaction . . . through which Rhthmol® was acquired nor does it involve any of the provisions, warranties or representations contained in the agreements governing the transaction. (Op. at 5)
This reality, coupled with a dearth of evidence that the firm acquired any confidential information about the accused product during the earlier deal, could not, as a matter of law, give rise to an actionable conflict of interest.
In another District of Delaware decision addressing declaratory judgment jurisdiction post-MedImmune, Judge Farnan found declaratory judgment defendant ON Semiconductor's argument that the "reasonable apprehension of suit" test was not overruled by MedImmune unpersuasive. Samsung Elecs. Co. v. ON Semiconductor Corp., C.A. No. 06-720-JJF, Memo. Op. (D. Del. April 3, 2008). The Court found that recent Federal Circuit case law including Micron Tech., Inc. v. Mosaid Tech., Inc. (opinion here) and SanDisk Corp. v. STMicroelectronics Inc. (opinion here) has made clear that the Supreme Court's decision in MedImmune rejects the reasonable apprehension of suit test. Id. at 9-10.
ON Semiconductor's course of conduct, including letters accusing Samsung of infringement and their analysis of potential infringement by Samsung and Samsung's continued position that the patents are invalid and not infringed during the course of licensing discussions demonstrated evidence of a "substantial controversy" sufficient to warrant jurisdiction over the dispute. Id.at 10. The fact that the licensing negotiations were continuing "is not dispositive with regard to the existence of an actual controversy." Id.
Citing the EMC Corporation decision from the Federal Circuit, ON Semiconductor also argued that even if the Court can exercise declaratory judgment jurisdiction it should dismiss the action because licensing negotiations are still ongoing and their is still the potential for a non-legal resolution. Id.at 12. Judge Farnan declined to dismiss the action, however, stating that the record evidence demonstrated that when Samsung filed the complaint the parties' negotiations were at an impasse and ON had made clear its willingness to pursue other routes for enforcing its legal rights. Id.
Samsung Elecs. Co. v. ON Semiconductor Corp., C.A. No. 06-720-JJF, Memo. Op. (D. Del. Apr. 3, 2008).
Continuing a long tradition of interpreting Delaware's long-arm statute broadly, Judge Joseph J. Farnan Jr. recently rejected an attempt by an Illinois company, Emulgen, to escape jurisdiction in Delaware. In the underlying infringement suit, Emulgen contended, among others, that its miniscule revenues from Delaware sales and its lack of knowledge that Delaware customers would receive its marketing emails could not confer personal jurisdiction. The Court rejected these assertions out of hand:
Emulgen contracted with a third-party to conduct a national e-mail marketing campaign, intending to reach the entire United States . . . . There is no evidence in the record that Emulgen attempted to limit its [marketing e-mails and shipments] to certain states only.
As a result, "Emulgen's use of the internet as a marketing tool and its decision to contract with a third-party to market its product through a nationwide e-mail broadcast are sufficient to establish specific jurisdiction" under the long-arm statute. The Court also rejected Emulgen's sales argument, finding that although potentially de minimis, the fact that some sales occurred in Delaware sufficiently triggered long-arm jurisdiction.
This case not only reaffirms the far reach of Delaware's long-arm statute, but it puts the bar on notice that a company's nationwide internet activity will likely impart jurisdiction in Delaware.
Tristrata Tech. v. Emulgen Labs. Inc., C.A. No. 06-652-JJF (D. Del. Feb. 25, 2008) (Farnan, J.).
In a recent opinion, Judge Joseph J. Farnan Jr. had the opportunity to reflect on the reach of the Supreme Court's KSR decision. In its post-trial opinion on the issue of invalidity, the Court examined a claim of obviousness in light of the high court's mandate:
The Supreme Court [ ] explained that there is no necessary inconsistency between the underlying idea of the teaching, suggestion, or motivation test and the Graham analysis so long as the teaching, suggestion, or motivation test is not applied as a rigid and mandatory formula. In other words, the Supreme Court has acknowledged that the teaching, suggestion, or motivation test can provide helpful insight to an obviousness inquiry. (internal quotation marks omitted)
Accordingly, the Court held that, at least in chemical-compounds cases, it "remains necessary to identify some reason that would have led a chemist to modify a known compound in a particular manner to establish prima facie obviousness of a new claimed compound." The result? Judgment of no invalidity for the patentee.
The distinction between an assignee and licensee is crucial to determining whether a party has standing to sue for infringement. Whether through ownership or assignment, those parties that hold all substantial rights to a patent - and those who hold all exclusionary rights but not all substantial rights - generally enjoy the ability to enforce the patent. A "bare" licensee, on the other hand, possesses no right of enforcement. But what happens when a patentee conveys, as part of a non-exclusive license, the exclusive right to sue a particular entity, but otherwise retains title to the patent? Who is the proper party: the non-exclusive licensee that holds the right to sue, or the patentee that has contracted away the ability to bring suit? According to district judge Joseph J. Farnan, neither has standing to sue.
In the underlying litigation, the Court addressed the question whether the rights conveyed "elevated [the transferee's] status from that of a bare licensee to the second category of plaintiffs, those who hold exclusionary rights and interests created by the patent statutes, but not all substantial rights to the patent such that a law suit may be maintained with the presence of the patent owner." Because the license limited the transferee's right to sue - it could only pursue a single entity, the defendant - and imposed other restrictions, the patentee failed to "provide [the transferee] with a sufficient cloak to cover its status as a bare, nonexclusive licensee."
Having struck down this "hunting license," the Court then held that the patentee itself failed to establish standing to bring suit by contracting away the right to sue: "That [the licensee] lacks standing to take advantage of that right does not mean that [the patentee] regains it." In other words, the parties' chosen "contractual division" of the patent rights defeated their standing, leaving no party available to enforce the patent.
In a recent opinion, Delaware district judge Joseph J. Farnan Jr. reaffirmed the necessity of confirming expert witnesses' availability for pretrial discovery and trial. In the underlying litigation, defendant sought to delay expert reports and depositions on the basis of unavailability. Under normal circumstances, the Court might be inclined to work around outside schedules. But here, only thirty days before a "long scheduled" and firm trial date, defendant argued for delay in producing expert reports and taking expert depositions. Given the timing of defendant's request, the Court refused to accede:
"[T]he Court finds that the assertion that any expert witness is 'unavailable' to the parties in the thirty day period prior to a long scheduled trial is untenable and an issue for the witness's proponent, not the pre-trial schedule."
It is well established in the District of Delaware that instructing a deponent to withhold a response is rarely permitted. Absent a genuine possibility that privileged information will be disclosed, our district judges are uniform in their disapproval of this deposition tactic. A recent decision by district judge Joseph J. Farnan, Jr., lends further support to this local practice:
"After reading the November 30th deposition transcript and viewing the [deposition] videotape, the Court finds that Defendant's counsel obstructed the questioning of [the witness] by the improper assertion of work product privilege and interposing numerous obections unsupported by the rules of evidence. The Court need not list the errors of Defendant's counsel to demonstrate the conduct of counsel, because the inappropriateness of the objections is plain from a reading of the deposition transcript."
As a sanction, the Court ordered a second deposition to be held at a time and location of plaintiff's choosing, with costs and fees for both depositions paid by defendant.
Recently, in the Wyeth v. Impax Laboratories, Inc. case, Judge Farnan construed three separate claim terms: (1) "extended release formulation"; (2) "diminished incidences of nausea and emesis"; and (3) "a method for eliminating the troughs and peaks of drug concentration in a patient's blood plasma." C.A. No. 06-222-JJF, Memo. Op. (D. Del. Dec. 13, 2007). The opinion itself was a straightforward application of the Phillips v. AWH Corp. case whereby the Court looked to the claims, the specification and the prosecution history and did not turn to any extrinsic evidence to aid in its construction. Id. at 3-4.
One interesting section of the opinion was in the construction of the terms "extended release formulation." The plaintiff, Wyeth, was seeking to apply a general definition using the words' ordinary meaning. The defendant, Impax, wanted to import specific ingredients that were listed in the specification as a requirement for it to be an "extended release formulation." Id. at 5-6. The Court found that in light of the patent and the specification the list of ingredients should not be included in the definition of the terms, particularly where in certain dependent claims that were not at issue, the language of the claims did in fact include a list of specific inactive ingredients. Where there was a particular limitation in a dependent claim there arises a presumption that the limitation should not be present in the independent claim. Id. at 6 (citing Phillips v. AWH Corp.).
As a side note - these parties had previously been involved in litigation in another district over the same patents. During that litigation a Markman ruling was issued on two of the same terms that were currently at issue in the new litigation. The earlier Markman ruling had been vacated by the judge in that case when the case settled before trial, however, the defendant directed the District of Delaware court to the approach taken by the earlier court in construing the terms. There is no mention in the opinion of how much weight, if any, this Court gave to the prior Markman ruling since it only needed to rely on the intrinsic record to decide the construction.
As everyone is aware, the Supreme Court in MedImmune Inc. v. Genentech, Inc. announced a new standard for determining whether a case or controversy exists thereby replacing the former "reasonable apprehension of imminent suit test." But how does this new standard effect a situation where there is a covenant not to sue on an original patent where a reissue application is pending? This is one of the questions the Delaware District Court was faced with in Pfizer Inc. v. Ranbaxy Laboratories Ltd., et al., C.A. No. 07-138 (D. Del. Nov. 29, 2007) (Farnan, J.). The Court found that in light of the MedImmune standard there cannot be a "current and concrete" case or controversy between the parties unless a valid and enforceable patent exists. Id. at 8. In this case, one claim of the patent-at-issue had been declared invalid during a prior lawsuit and the covenant not to sue between the parties contained an agreement not to sue on any other claims in the patent. Id. at 8-9. There was no specific language in the covenant not to sue referencing reissue applications, but the Court said the "question of whether a new patent will ever be reissued is speculative, purely hypothetical and unripe for judicial determination" therefore, there can be no subject matter jurisdiction over the claims. Id. at 9.
Pfizer further moved to dismiss certain of Ranbaxy's counterclaims on the basis of res judicata. These same parties had been involved in prior litigation over the same patent where the defendant, Ranbaxy, challenged the validity of the patent-in-suit. The defendant conceded that it was aware the prior art it now wants to assert against Pfizer but argued that it did not have all the facts related to the data. The Court held that Ranbaxy was required to raise all invalidity defenses during the earlier litigation and because they were informed about the data during that litigation they could not raise it now. If they felt that there was not enough time to analyze the data they should have sought an extension of trial in that Court, but will not be able to raise the invalidity claim now. Id. at 13-14. Furthermore, the Court stated that a change in the law does not alter the res judicata effect of a judgment and therefore refused to recognize an exception to the rule based on KSR/Teleflex. Id. at 15
On Friday, a Delaware jury refused to return a finding of invalidity on several Power Integrations patents. The special verdict allows an earlier jury award of $35 million to stand.
Power Integrations Inc. v. Fairchild Semiconductor Inc., C.A. No. 04-1371 (D. Del.) (Farnan, J.).
In a recent decision on remand from the Federal Circuit, District of Delaware Judge Farnan considered whether, as part of an anticipation inquiry, an earlier patent enabled one skilled in the underlying art to practice the procedure claimed in the patent in suit. Answering no, the Court added new context to the continuing dialogue in the courts about settling the meaning of the phrase "ordinary skill in the art."
The prior art patent in this drug case embraced "hundreds to thousands" of compounds that could be used to treat a variety of medical conditions. The patent in suit, by contrast, claimed a specific compound - riluzole - for the treatment of one condition - ALS. Although the prior art mentioned riluzole, it did so only for the purposes of synthesizing other compounds or to exclude it altogether. The Court therefore concluded that, amidst the disclosure of so many other compounds and conditions, the prior art patent failed to put one skilled in the treatment of ALS "in possession" of the claimed invention in the patent in suit. The Court also held that, as a matter of law, the experimentation necessary to uncover the riluzole-ALS link would be too great. Accordingly, the prior art patent could not be enabling for anticipation purposes.
Many topics in patent law require courts and litigants to decipher the meaning of "ordinary skill." If anything, the term has assumed added significance since the Supreme Court's obviousness decision in KSR. A bright line to take from the present case: one of ordinary skill would not think to practice a particular invention without some transparent and undisguised prompting from the prior art in question. Only one of extraordinary skill in the art would do that.
Impax Labs. Inc. v. Aventis Pharma. Inc., C.A. No. 02-581-JJF (D. Del. July 19, 2007) (Farnan, J.).
Federal Rule of Civil Procedure 8(c) catalogues a list of affirmative defenses that an answering party must plead. The rule also requires, without elaboration, that the party assert "any other matter constituting an avoidance or affirmative defense." In patent litigation, one defense to a charge of willful infringement is the so-called "advice of counsel" defense. The question, then, is whether this defense must be pleaded affirmatively. The answer, according to a recent decision by district judge Joseph J. Farnan, Jr., is "no."
Responding to a discovery dispute in the underlying infringement litigation, the Court acknowledged the downside to holding that, at least in the willful infringement context, the advice-of-counsel defense falls within the ambit of Rule 8(c). In particular, the Court cautioned that a party's reliance on the advice of counsel is only one factor in evaluating willfulness and that "treating advice of counsel as an affirmative defense . . . risks weakening and/or shifting the burden of proof to the accused infringer," an outcome contrary to established Federal Circuit precedent.
According to the Court, a genuine affirmative defense "rais[es] new facts and arguments that, if true, will defeat the plaintiff's . . . claim, even if all allegations in the complaint are true." By contrast, a defense that simply "negates some element of plaintiff's prima facie case" falls outside the scope of Rule 8(c).
Weighing these standards, the Court held that the defense of advice of counsel "does not entail admitting the allegations of the plaintiff's complaint and does not alone overcome a plaintiff's claim of willful infringment." Thus:
"[A]dvice of counsel is only an 'affirmative defense' in the sense that it must be introduced into the litigation by the accused infringer in mitigation of a claim of willfulness; it is not a 'true' or 'mandatory' affirmative defense under Rule 8(c) that must be pled in the answer."
In the continuing dialogue over how and when to preserve the accused infringer's attorney-client privilege while also recognizing that party's ability to maintain a defense, this decision helps shed light on the still evolving contours of the willfulness defense.
LG.Philips LCD Co. Ltd. v. Tatung Co., C.A. No. 04-343-JJF (July 13, 2007) (Farnan, J.).
Since state-law unfair competition and other tort claims often accompany allegations of patent infringement, the question of whether the state claims are preempted by the patent scheme assumes importance in intellectual-property litigation. Judge Joseph J. Farnan Jr. recently addressed the question of preemption for a variety of tort claims brought in the Knova Software-Inquira patent litigation.
Intentional Interference with Prospective Economic Relationships and Unfair Competition. One aspect of the traditional test of preemption involves whether a party's state-law claim contains an element in addition to those necessary to establish infringement. The Court here, however, was faced with a damages-based claim: Plaintiff Knova contended that because it pleaded damages recoverable solely under the state law claim, it properly alleged an element divorced from the infringement counts. Rejecting this assertion, the Court reaffirmed that the preemption test "focus[es] on the conduct of the defendant, not remedies that may be available to plaintiffs." Accordingly, the Court found that the patent act preempted Knova's interference and unfair competition claims.
Unjust Enrichment. Addressing a rare unjust enrichment count, the Court declined to find a preemptive effect until discovery closed. Knova argued that defendant's allegedly infringing sale of bundled software services conferred an "incremental benefit" on defendant compensable apart from the infringement. But the Court could not discern from the complaint whether Knova simply sought a "patent-like remedy for making, using, or selling a patented product." In the face of this uncertainty, the Court allowed the unjust enrichment claim to proceed without prejudice to raise the question of preemption after completing discovery on the other claims.
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Delaware district judge Joseph J. Farnan Jr. recently issued a comprehensive claim construction opinion involving the Verisign computer-access security system. Of note is the Court's analysis of the means-plus-function and step-plus-function construction rules under 35 U.S.C. � 112, � 6.
For one claim, the Court noted that the patentee chose to employ the means-plus-function rules by using the phrase "clearinghouse means." Thus, "a consequence of [this] choice is that [the] scope of the means-plus-function limitation is limited to the corresponding structure described in the specification and equivalents thereof." (slip op. at 34).
Interestingly, the Court then declined to apply Paragraph 6 to the identical phrase as used in a subsequent claim. The Court distinguished between means-plus and step-plus claim elements, and noted that the simple presence of the term "means" or "step" (as opposed to "steps for") does not automatically signal the applicability of Paragraph 6. Examining the claim as a whole — "a method of controlling access . . . comprising the steps of [the clearinghouse means]" — the Court rejected plaintiff's argument that the means- or step-plus analysis applied. Instead, the term "clearinghouse means" was "little more than an overzealous use of the word means." (slip op. at 37).
This opinion is a reminder that parties should not slice their claim construction arguments too thin — context, and not the import of words in isolation, will ultimately control.
<%media(20070406-Verisign.pdf|Prism Techs. LLC v. Verisign Inc., C.A. No. 05-214-JJF (April 2, 2007) (Farnan, J.).)%>
District of Delaware Local Rule 7.1.2 provides that an answering brief be filed within 10 days (excluding intermediate weekends and legal holidays as provided by Fed. R. Civ. P. 6(a)) after the opening brief. But how does e-filing and service by electronic mail effect this rule? Judge Farnan recently answered that in the opinion <%media(20070326-cherry line 03-199.pdf|Cherry Line, S.A. v. Muma Services)%>, C.A. No. 03-199 (D. Del. Mar. 13, 2007) (Farnan, J.). The defendant in this case served plaintiff with its motion by hand delivery as well as electronically and therefore defendant argued that the service by hand delivery did not trigger the "three day rule" set forth in Fed. R. Civ. P. 6(e) which provides that service by electronic means adds three days to the period set forth in 6(a). Id. at 4. The Court found that "electronic service controls" and is "generally preferable to mail and hand delivery." Id. The Court further went on to state that "[W]hen a party chooses electronic means or mail delivery, separate hand delivery is gratuituous and has no effect on response times." Id. Hence, the plaintiff's response was timely filed.
A Delaware jury yesterday returned a $16.7 million verdict in favor of Affymetrix in its suit against rival Illumina. Judge Farnan had previously bifurcated the proceedings, so invalidity, wilfullness, whether to grant a permanent injunction, and other issues are still yet to be decided. However, Round 1 clearly goes to Affymetrix - the jury awarded a royalty rate that was even higher than what Affymetrix had asked for!
In <%media(20070223-05-132.pdf|Bridgestone Sports Co. Ltd. v. Achushnet Co)%>., the plaintiff moved to preclude defendant's use of prior art references that were disclosed four months after the deadline for the defendants to provide their invalidity defenses. C.A. No. 05-132 (D. Del. Feb. 15, 2007) (Farnan, J.). The defendants had provided 198 pages of invalidity contentions on 7 patents-at-issue. None of the prior art references disclosed after the deadline were contained in the original contentions. In deciding whether to exclude the evidence pursuant to Fed. R. Civ. P. 37, the Court turned to the Third Circuit case of Meyers v. Pennypack Woods Home Ownership Ass'n, 559 F.2d 894 (3d Cir. 1977). That case found that the factors relevant to such an inquiry include: (1) the prejudice or surprise to a party against whom the evidence is offered; (2) the ability of the injured party to cure the prejudice; (3) the likelihood of disruption to the trial schedule; (4) bad faith or willfulness involved in not complying with the disclosure rules; and (5) the importance of the evidence to the party offering it.
Among many reasons for deciding to exclude the evidence, Judge Farnan noted that the parties in this litigation are "sophisticated business entities" who are represented by "counsel well-versed in complex patent litigation" and have brought "numerous and contentious discovery disputes" that have been more "'strategic'" in nature than substantive. Id. at 9. Furthermore, the defendants had many other references available to them such that the exclusion of these pieces would not "cripple" their invalidity case. Id. The references were also available to the defendants before the close of fact discovery and "well-before" the deadline for disclosure of invalidity defenses and references relied on. The fact that plaintiff was aware of these references furthermore did not excuse the defendant's failure to disclose. Id. at 11.
The analysis of whether in-house an employee should be granted full access to information labeled "attorneys' eyes only" focuses on two things: the employee's position in the company and the risks and safeguards of inadvertent disclosure. R.R. Donnelly & Sons, Co. v. Quark, Inc., C.A. No. 06-032, 2007 U.S. Dist. LEXIS 424 (D. Del. Jan. 4, 2007) (Farnan, J.).
In this case, plaintiff wanted its Chief Patent Counsel and President of Corporate Strategic Initiatives to have access to all discovery related information for case management purposes such as advising the client and managing outside counsel. The Court found that because the role of Chief Patent Counsel does not report directly to any business people involved in competitive decision-making and only deals with legal decision-making relating to the company's patent portfolio, that he will be allowed access to "attorneys' eyes only information." On the other hand, the Court did not find that the President of Corporate Strategic Initiatives should have full access because his role in the company is to be directly involved in the competitive decision-making of the company and he interacts directly with the business people. Therefore, inadvertent disclosure with his role is much more likely than with the Chief Patent Counsel.
In a separate discussion, Judge Farnan addressed the scope of the prosecution bar covered by the Protective Order and because the plaintiff offered to amend the protective order to limit access to confidential and attorneys' eyes only information to outside litigation counsel that have entered an appearance in this action there was no reason to broaden the scope of the prosecution bar to prevent their outside counsel firm from prosecuting any patents involving any aspect of the technology at issue.
Unless you�ve been living under a rock for the last few months, the KSR case pending before the Supreme Court has probably come across your radar screen several times. The recent oral arguments before the Court in KSR left many observers thinking that a change in the obviousness standard is on its way. In anticipation of a possible new standard for obviousness, Judge Farnan granted a five-month stay of the validity trial in Power Integrations Inc. v. Fairchild Semiconductor Int'l Inc., C.A. No. 04-1371, 2006 U.S. Dist. LEXIS 87259 (D. Del. Nov. 30, 2006) (Farnan, J.). Judge Farnan also ruled that if the Supreme Court has not issued a decision within five months, then the trial will go forward �using modified jury interrogatories and/or instructions, as well as other appropriate measures intended to minimize any post-trial or appellate impact of the Supreme Court�s decision in KSR on the issues in this case.�
It remains to be seen if other judges, in this district or other districts, will follow suit. (If you hear of other judges following suit in other jurisdictions, please let us know.) I seem to remember some similar rulings when the Phillips claim construction case was before the Federal Circuit. Interestingly, the Federal Circuit has had no problem issuing opinions refining their view of obviousness while the Supreme Court decides KSR!
<%media(20061129-Epic Systems.pdf|Epic Sys. Corp. v. Acacia Research Corp., C.A. No. 06-255-JJF (D. Del. Nov. 16, 2006))%>
Judge Farnan denied Resource Scheduling Coroporation�s (the codefendant's) motion to dismiss for lack of an actual controversy. Epic received a letter from defendants informing Epic that one of their products infringed defendants' patent and they would need to take a license. The letter went on to state that defendants �intend to add additional parties� to litigation involving the same patent pending in Texas. In addition, the letter proposed royalty rates for a possible license that would �increase over time and as our litigation progresses.� Based on the totality of these circumstances, the Court found that Epic had demonstrated reasonable apprehension of suit sufficient to establish an actual controversy.
Wyeth v. Impax Labs., Inc., C.A. No. 06-222-JJF, 2006 U.S. Dist LEXIS 79761 (D. Del. Oct. 26, 2006).
Upon a motion to compel filed by Impax, Wyeth prevailed on four of five disputes before the Court, losing only its bid to split the cost of imaging relevant documents with Impax. As to Impax�s request that Wyeth produce documents from prior litigation involving the same patents, the Court denied the request as to documents not related to matters at issue in the present litigation because Impax had not shown that the documents were �critical to resolving the issues before the Court.� As to production of documents in their native format (as opposed to TIFF format or PDF format), the Court held that since 1) the parties had not agreed to produce documents with metadata and 2) Impax had shown no particularized need for the documents with metadata, the Court would not force Wyeth to produce the native files with metadata.
Judge Joseph J. Farnan today so ordered two stipulations of dismissal in the patent infringement lawsuits involving Amazon.com, Inc. and Cendant Corporation among others. The stipulations dismissed all claims and counterclaims in their entirety with prejudice. (<%media(20061101-Amazon STIPULATION of Dismissal.pdf|C.A. Nos. 06-41-JJF)%>, <%media(20061101-amazon 2_STIPULATION of Dismissal.PDF|05-414-JJF)%>)
To potential defendants BEWARE if you want to bolster your argument for transfer and you believe that some key witnesses will be former employees, be prepared to make a demonstration in your transfer briefs that they will be unwilling to testify voluntarily or that you cannot get their information in some other fashion. And know that if you are incorporated here in Delaware, and choose to reap both the legal and business benefits of being incorporated in this state, that you should expect to litigate here and there will be little sympathy for your motion to transfer elsewhere. Even similar litigation between the parties elsewhere may not be enough!
The District Court once again gave deference to plaintiff's choice of forum and refused to transfer a patent infringement case to the Northern District of Georgia where other litigation between the same parties is pending. Nice Systems, Inc. and Nice Systems, Ltd. v. Witness Systems, Inc., C.A. No. 06-311 (D. Del. Oct. 12, 2006) (Farnan, J.). The Court applied the Jumara factors (Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995)) including six private interest factors and six public interest factors in reaching its conclusion. Both parties in this case are incorporated in Delaware and the Court stressed that defendant, after choosing to incorporate here, cannot now complain that it is inconvenient to litigate here. In a question that frequently arises in this District, the Court again stressed that employee witnesses are presumed willing to testify at trial and therefore the convenience of current employees will not be part of the analysis. As to former employees, the Court admitted that they may be beyond the subpoena power of the Court, but would not tip the balance to transfer here because the defendant did not make any showing that the former employees would be unwilling to testify voluntarily or that their information was not available in some other way. Finally, even where this case involved some overlap of parties, products and technologies with three cases pending in the N. D. Ga., Judge Farnan concluded this did not weigh in favor of transfer. The cases in Georgia are "at various stages in litigation before three different judges and two of the pending cases have survived a motion to consolidate" and therefore the Court did not feel that transfer would serve the interests of judicial economy. Id. at 7.
Judge Joseph Farnan signed a stipulated dismissal in Alza Corp. v. Impax Labs. Inc., C.A. No. 05-642 (D. Del. Oct. 10, 2006) (Farnan, J.) today. This brings to an end litigation between these two parties that began in September 2005.
Alza Corp. v. Impax Labs. Inc., C.A. No. 05-642 (D. Del. Oct. 10, 2006) (Farnan, J.)
A Delaware judge has issued a decision highlighting the sometimes overlooked distinction between issues of law and fact in the patent realm. In a decision released last week, the Court rejected an attempt to revisit an earlier claim construction of the term "MOS transistor" - or metal oxide transistor. The Court held that defendant's proposed construction was rendered moot because it raised the issue of the doctrine of equivalents, a theory of infringement plaintiff did not choose to pursue.
The decision resolves some uncertainty generated by the Court's earlier claim construction opinion, in which it declined to address a similar argument by defendant. There, the Court noted that the defendant's proposed construction involved a related component - a "DMOS transistor" - that the patent-in-suit did not claim and that would be relevant only to a claim under the doctrine of equivalents. Emphasizing that claim construction is a purely legal exercise, the Court refused to inject the factual issue of equivalence into its Markman discussion.
It seems that regardless of the effect an unclaimed term will have on the actual claims, as defendant unsuccessfully argued here, the legal exercise of claim construction will not intrude on the factual turf of the doctrine of equivalents.
Nokia Corp. v. Qualcomm, Inc.), No. 06-509-JJF (D. Del. Aug. 29, 2006)
Upon a motion to remand filed by Nokia, Judge Farnan remanded this dispute back to the Delaware Court of Chancery, where the suit was originally filed. The court decided whether Nokia's claims arose under federal patent law despite the fact that the claims are for breach of contract. Distinguishing the Federal Circuit U.S. Valves case (that found a federal question existed where interpretation of a patent was necessary to determine rights under a licensing agreement), the court held that interpretation of the patents at issue was not necessary to determine the parties' contractual obligations. The court found that the interpretation of provisions in Nokia's license agreement with Qualcomm depends on whether certain patents are declared "essential" under European Telecommunications Standards Institute (ETSI) procedures. Because the court found that Qualcomm had already voluntarily declared the patents "essential,"; however, no interpretation of the patents was necessary to interpret the license agreement.
Nokia Corp. v. Qualcomm, Inc.), No. 06-509-JJF (D. Del. Aug. 29, 2006)
A recent case serves as a reminder that potential litigants in this district, and particularly before Judge Farnan, should consider their options in pursuing bifurcation should it be helpful to their case as the Court will be open to various combinations in managing these complex cases.
Judge Farnan recently held on a motion for reconsideration, that it is not a violation of a party's Seventh Amendment right to a jury trial to allow a bifurcated trial first on the issues of infringement and damages and then on the issue of invalidity. Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., et al., C.A. No. 04-1371-JJF (D. Del. Aug. 22, 2006). Although the same evidence may be presented at both trials, the Court followed Federal Circuit precedent in holding that these are not the same issues and therefore they may be presented to separate juries. Of particular note is the fact that willfulness was to be tried with infringement and damages before any decision on invalidity. The Court made a specific note that any potential problems in the damages calculation could be rectified by the jury verdict form or if necessary a recalculation by the court after the trial on invalidity.
On a procedural side note, the Court found that the defendants' motion for reconsideration was not untimely, as the timing set forth in Local Rule 7.1.5 begins when the order is entered onto the Court's docket (not when signed or orally entered). Therefore, when filing a motion for reconsideration, begin your 10 day countdown on the day of the entry on the Court's docket.
In the latest twist to the post-Echostar waiver debate, Judge Farnan has issued an opinion stating that a party asserting the advice-of-counsel defense to willful infringment waives the attorney-client privilege concerning communications with both opinion counsel and trial counsel. In the July 28th decision, the Court noted that, based on the Federal Circuit's recent In re Echostar decision, 2006 U.S. App. LEXIS 11162 (Fed. Cir. May 1, 2006), a defendant's advice-of-counsel defense effects a waiver of "communications with all counsel related to the same subject matter." This waiver extends to "litigation counsel[ ] and any other counsel." Affinion Net Patents Inc. v. Maritz Inc., C.A. No. 04-360 (D. Del. July 28, 2006) (Farnan, J.), slip op. at 2-3.
Interestingly, the Court bypassed the plaintiff's argument that the waiver extends to all counsel because the defendants here had retained opinion and trial counsel from the same law firm. Instead, the Court relied exclusively on Echostar for its broad statement. Contrast this with another Delaware decision issued only a few weeks earlier, which read Echostar more narrowly. Ampex Corp. v. Eastman Kodak Co., 2006 U.S. Dist. LEXIS 48702, at *11 (D. Del. July 17, 2006) (Jordan, J.) ("Echostar did not even address the issue of communications with trial counsel.").
Ultimately, the Court denied the underlying motion to compel documents, finding that the communications in issue were never disclosed to the client and did not discuss any communication between attorney and client. Nonetheless, the Court's message is explicit: An Echostar waiver extends to both opinion and trial counsel.
Affinion Net Patents Inc. v. Maritz Inc., C.A. No. 04-360 (D. Del. July 28, 2006) (Farnan, J.)
