In a recent memorandum opinion, the Court held that a plaintiff’s allegations that a defendant’s “prospective products” “infringe or will infringe” and “are or will be based on [a plaintiff’s] trade secrets” stated a claim for relief. XpertUniverse, Inc. v. Cisco Systems, Inc., C.A. No. 09-157-RGA (D. Del. Jan. 20, 2012). The Court noted, however, that it was a “close issue,” and explained: “If the products are ones that have already been made or used as of the date the [Complaint] was filed, I think a claim upon which relief can be granted has been stated. If a product is in development but has not reached a stage where it has been made or used, there is no claim upon which relief can be granted.” Id. at 7. Accordingly, the Court explained that although the plaintiff’s claims would not be dismissed, the Court would “treat any products that have not infringed as of [the date the Complaint was filed] as not being alleged as an infringing product in the [Complaint].” Id. The Court further held that a plaintiff’s infringement allegations identifying products not yet known to the plaintiff that feature “similar functionality” to the specifically accused products sufficiently stated a claim for relief. Id.
In Masimo Corp. v. Philips Electronics N.A. Corp., C.A. No. 09-80-LPS-MPT, with the exception of one of the claim terms at issue, Judge Stark fully endorsed and adopted a Report and Recommendation construing the parties’ disputed claim terms. Id. at 2. For the term “a signal processor,” the Court agreed with the plaintiff’s proposed alternative construction and ordered that the term be construed as “a device that processes an input or output signal.” Id. at 2. In its analysis, the Court noted that the parties were “in agreement that the ordinary meaning of ‘a signal processor’ is ‘a device that processes an input or output signal.’” Id. at 2. The Court further noted that the construction adopted was supported by both the specification and prior decisions by other courts considering the patent-in-suit. Id. at 3-4.
The District of Delaware has produced another opinion in the recent line of cases considering motions to transfer venue, this time denying a motion to transfer to the Eastern District of Texas in Microsoft Corp. v. Geotag Inc., C.A. No. 11-175-RGA (Jan. 13, 2012). Much like Judge Andrew’s recent decision in Wacoh Co. v. Kionix Inc., the opinion distinguishes recent Federal Circuit precedent and relies on the Third Circuit’s Jumara public and private interest factors. The case involves a complaint for declaratory judgment of noninfringement and invalidity filed by Microsoft and Google against Geotag, Inc. Geotag, although a defendant in this suit, is a plaintiff against more than 450 companies in the Eastern District of Texas, alleging infringement of the same patent against all of them. Microsoft and Google filed a complaint in the District of Delaware seeking declaratory judgment regarding that patent, and Geotag moved for transfer to the venue where its infringement actions are currently pending.
Considering the Third Circuit’s private and public interests framework for analyzing motions to transfer, Judge Andrews stated: “[Plaintiff’s forum preference] supports the plaintiffs’ position that the case should not be transferred. [Defendant’s forum preference] supports the defendant’s request to transfer the case. The other interests do not add much to the balancing, as they are either inapplicable to this case, possibly applicable but not well-developed in the record, or applicable but pretty evenly-balanced as to which side they support.” Id. at 3-4. Judge Andrews’ opinion expressly considers and weighs each factor, explaining why each does or does not add to the balance. Of particular importance, he notes, “[p]laintiffs have chosen Delaware as a forum. That choice weighs strongly in the plaintiffs’ favor, although not as strongly as it would if the plaintiffs had their principal places of business (or, indeed, any place of business) in Delaware.” Id. at 4. By contrast, the defendant’s “lack of a substantial connection to the Eastern District is taken into account in the balancing of the other factors, and, in particular, by not according Geotag’s preference for the Eastern District the same weight as it might otherwise deserve.” Id. at 12.
Judge Andrews also addressed the Federal Circuit’s recent decision in In re Link_A_Media Devices Corp., 662 F.3d 1221, 1224 (Fed. Cir. 2011). In considering the convenience of witnesses, books, and records, Judges Andrews stated: “While there is a paragraph in In re Link_A_Media Devices Corp., about ‘the convenience of the witnesses and the location of the books and records,’ I do not understand the Federal Circuit to have altered the Third Circuit’s focus on the issue being not so much where the witnesses and evidence are, but whether they can be produced in court.” Id. at 6 n.2. Furthermore, he noted that the Geotag case was different from the Link_A_Media case in that there was a stronger connection to Delaware and a weaker connection to the transferee venue. “I have considered In re Link_A_Media Devices, but I do not think it is particularly helpful in assessing the transfer request in this case, as its facts were very different. I would characterize that case generally as standing for the proposition that when the parties, all the witnesses, and all the evidence are in one distant jurisdiction, and the only connection to Delaware is that it is the state of incorporation of the defendant, and there is no other reason for the suit to be in Delaware, the suit must be transferred, upon timely request, to the distant jurisdiction. While in the present case there is a marginally greater connection to Delaware, as one of the plaintiffs is also a Delaware corporation, of much greater significance is that with the exception of Geotag’s CEO, the witnesses have no connection to the proposed transferee district, and most of the evidence is not going to be there either.” Id. at 12-13.
Judge Andrews ultimately found that “the ‘interest of justice’ supports management and resolution of all the Geotag cases by one judge, but it does not really provide an answer to the question whether it should be a Texas or a Delaware judge. Under Third Circuit law, considerable deference is given to the plaintiffs’ choice of forum. Since there is little beyond the defendant’s choice of forum- which is less compelling than usual -to suggest transfer should be ordered, I do not think the defendant has shown that the balance of convenience tips significantly enough in the defendant’s favor so that transfer should be ordered. I will therefore deny the defendant’s motion to transfer.” Id. at 13.
In Sunovion Pharmaceuticals Inc. v. Dey Pharm., L.P., Inc., C.A. No. 06-113-LPS (D. Del. Jan. 18, 2012), Judge Stark recently considered the issue of incorporation by reference in connection with Defendants’ allegation that the patents-in-suit were invalid for anticipation. Defendants contended that the prior art patent’s description of additional material in another patent satisfied the requirements for incorporation by reference “because it adequately describe[d] with detailed particularity the specific material incorporated . . . and also clearly indicate[d] where that material [was] found (in the specification of the [other] patent).” Id. at 4. Plaintiff argued that the legal standard was not met “because the prior art patent [was] directed to an entirely different invention that merely refer[ed] to the [other] patent as background, and not as part of the substantive description of the invention.” Id. at 3-4 (internal quotations omitted). Judge Stark decided that, “[a]lthough a close question,” the prior art patent adequately incorporated by reference “the practical utility of the compounds described in the [other] patent[,]” and described them as “an integral aspect of the invention claimed in the [prior art] patent Id. at 4-5.
In Wacoh Co. v. Kionix Inc., C.A. No. 10-617-RGA, Judge Andrews recently granted defendants’ motions to transfer after distinguishing the Fed. Cir.’s decision in In re Link_A_Media Devices Corp. and concluding that the “balance of convenience” factors nonetheless tipped in defendants’ favor. Id. at 13. In Wacoh, the plaintiff, a Japanese corporation with its principal place of business in Japan, brought suit in Delaware against three defendants for patent infringement. Id. at 2. The three defendants were all Delaware corporations with principal places of business in New York (Ithaca), California (Pasadena) and California (Sunnyvale), respectively. Id. at 4-5. After filing answers to the complaint denying plaintiff’s allegations of infringement, the three defendants each filed motions to transfer. Id. at 2. Kionix, the defendant with its principal place of business in New York, filed a motion to sever and transfer the case against it to the Northern District of New York. Id. at 2. The other two defendants, VTI and Invensense, filed a joint motion to transfer the cases against them to the Northern District of California. Id. at 2. Following full briefing and oral argument, the Court granted each of the defendants’ motions. Id. at 4, 13. In applying the Third Circuit’s Jumara factors for analyzing § 1404(a) motions to transfer and considering the Fed. Cir.’s recent decision in Link_A_Media, the Court distinguished the facts of this case from those presented in Link_A_Media. Id. at 13. Specifically, the Court noted that, unlike the plaintiff here, the “Link_A_Media plaintiff had substantial connections to the transferee district (that is, its affiliate and its employees, including the inventors, were located there).” Id. at 13. The Court further noted that the conclusion it would draw from Link_A_Media is that “when a plaintiff sues a defendant in District A and the plaintiff, the defendant, and all potential witnesses and evidence are located in District B, and there is no other valid reason for denying a request for transfer to District B, it is an abuse of discretion not to grant the transfer.” Id. at 12-13. Notwithstanding the distinction between the two cases, the Court nonetheless granted defendants’ motions to transfer on the grounds, at least in part, that the plaintiff in this case was a “non-Delaware corporation with no connection of any kind to Delaware.” Id. at 13. Overall, the Court found that in this case the “balance of convenience tips enough in the defendants’ favor.” Id. at 13. The Court’s decision and analysis in this case is particularly noteworthy because it provides some insight as to how the holding in Link_A_Media might be construed and applied going forward.
In a recent decision, Judge Robinson found that although the plaintiffs’ initiation of an ANDA action was not frivolous, its continued prosecution of suit after “agreeing to stipulate” that the defendant did not infringe was “exceptional” and justified an award of attorneys’ fees under § 285. In re: Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., Civ. No. 09-MD-2118-SLR (D. Del. Jan. 12, 2012). Judge Robinson rejected the defendant’s argument that the initiation of the suit in the first place was frivolous, finding that the plaintiffs’ suit legitimately sought to obtain information about the defendant’s generic formulation that the defendant had refused to provide to the plaintiffs voluntarily, and which the plaintiffs argued should have been (but was not) included in the defendant’s Paragraph IV Notice letters. Id. at 4. However, despite “agree[ing] to stipulate to the fact that [the defendant’s] product, as formulated in its ANDA, did not infringe,” id. at 7, the plaintiffs pressed on. They argued that continued prosecution of the action was the only safeguard against a generic bait-and-switch in which the defendant would secure a final judgment of non-infringement on its current generic formulation (which testimony suggested would never gain FDA approval), benefit from the resulting termination of the 30-month stay, and then reformulate in an infringing manner that would quickly be approved by the FDA. Id. at 5-6. Judge Robinson rejected the plaintiff’s rationale, finding that “[t]he decision to . . . maintain the suit in order to ‘police’ against any possible reformulations by [the defendant] warrants a finding of ‘exceptional’ in light of the FDA’s requirement of re-certification once reformulation occurs.” Id. at 7. “In the event [the defendant] changes its formula, plaintiffs should receive another certification notice and be given the opportunity to file an infringement action based upon the amended formulation.” Id. at 6.
Judge Robinson has denied motions for judgment as a matter of law and for a new trial following jury determinations of validity and non-infringement in McKesson Automation, Inc. v. Swisslog Italia S.p.A., C.A. No. 06-028-SLR (Jan. 12, 2012). In her opinion, Judge Robinson noted that a reasonably jury could have concluded that the accused product did not infringe. Id. at 14. She also found that the defendant’s expert testimony regarding infringement and invalidity was consistent and could not be the basis for a new trial. Id. at 18.
The plaintiff also argued that “the court had a duty to construe [a] term [of the patents-in-suit] and [that] the court’s failure to do so resulted in a miscarriage of justice.” Id. at 14. This argument stemmed from the court’s prior finding that the term at issue need not be construed because the detail provided by the claim sufficiently defines the term and “‘belies any need for further construction.’” Id. at 8. The plaintiff cited the Federal Circuit’s holding in O2 Micro International Limited v. Beyond Innovation Technology Co., 521 F.3d 1351 (Fed. Cir. 2008), for the proposition that where claim construction is improperly placed before the jury, the case must be remanded for a new trial. Judge Robinson rejected this argument for two reasons. “First, the court note[d] that plaintiff’s proposed construction would not have resolved the issue as it is now characterized by the plaintiff.” Id. at 17. “Second, the court emphasize[d], as it did during its [claim construction] opinion, that ‘the specific detail provided by claim 1 defines the precise nature of [the claim term at issue] and belies the need for further construction.’” Id. Judge Robinson further suggested that “even if it was error not to construe the term, it was harmless error since the jury interpreted the term in accordance with the court’s understanding (i.e., the jury did not construe the term in the restrictive fashion advocated by plaintiff).” Id. at 18 n.9. For these reasons, the court found no error requiring a new trial in “declin[ing] to adopt plaintiff’s construction and instead conclud[ing] that the detail in claim one defines the precise nature of the claim.” Id. at 17-18.
Sitting by designation, Judge Bumb recently considered a motion to strike several affirmative defenses and counterclaims. In Bayer CropScience AG v. Dow Agrosciences LLC, C.A. No. 10-1045-RMB/JS (Dec. 30, 2011), plaintiff Bayer CropScience brought an infringement action against Dow Agrosciences, and Dow raised various affirmative defenses and counterclaims. In considering Bayer’s motion to strike some of Dow’s affirmative defenses and counterclaims, the court was faced with the issue of what pleading standard applied. With respect to the affirmative defenses, Judge Bumb stated: “While the Third Circuit has not yet opined as to whether Twombly/Iqbal is applicable to affirmative defenses, this Court agrees with those courts that have found Twombly/Iqbal inapplicable to affirmative defenses.” Id. at 3. Therefore, the court “review[ed] Defendant’s affirmative defenses only for sufficiency and for compliance with Rule 9(b).” Id. at 4. Under this standard, the motion to dismiss the defense of equitable estoppel was granted, but the motion to dismiss the defense of patent misuse was denied. Id. at 7-11.
Turning to the question of counterclaims, Judge Bumb noted that while counterclaims normally are subject to the rigors of Twombly/Iqbal, “[i]n the patent context . . . some courts have, whether expressly or implicitly, declined to apply the rigors of Twombly/Iqbal to defendants asserting invalidity counterclaims.” Id. at 5. Although the case at hand involved a counterclaim of unenforceability rather than invalidity, the court stated that “the same logic that led other courts to conclude that invalidity counterclaims were not subject to the heightened pleading under Twombly/Iqbal leads this Court to the same conclusion with respect to patent unenforceability counterclaims.” Id. at 7. Applying this standard to defendant’s counterclaim for a declaratory judgment of unenforceability, the court dismissed the counterclaim to the extent that it was based on equitable estoppel, but refused to dismiss the patent misuse or prosecution history estoppel aspects of the counterclaim. Id. at 11-13.
In Grape Technology Group, Inc. v. Jingle Networks, Inc., C.A. No. 08-408-GMS (D. Del. January 9, 2012), following a jury verdict of no infringement and validity, Judge Robinson recently decided the parties’ post-trial motions. When denying defendant’s JMOL motion as to the validity of the patents-in-suit, Judge Robinson rejected defendant’s argument that the asserted claims of one patent-in-suit were invalid because it would have been obvious to one of skill in the art to combine two prior art references. Id. at 17. Because defendant failed to present any evidence regarding the level of skill of the art, the court was unable to determine said level of skill, nor was the jury verdict against the weight of evidence. Id. at 19-20.
Jingle had argued that “its expert, Dr. Forys referenced a person ‘in the industry’ when discussing the prior art, and that that testimony is sufficient evidence to establish the level of ordinary skill in the art.” Id. at 18, n.11. Judge Robinson disagreed. “Dr. Forys’s brief, and unsupported, ‘reference’ of a person in the industry hardly creates any evidence that the ordinary level of skill in the art is ‘an individual working in the telecommunications industry,’ as [defendant] claims.” Id. Judge Robinson also pointed out that the expert’s report “inconsistently defined the level of skill in the art as a ‘B.S. degree in Electrical or Computer Engineering or equivalent training as well as 3-5 years of experience in the fields of call center architecture and their components especially involving directory assistance as well as marketing and advertising.’” Id.
When does judicial efficiency require the District Court grant a defendant’s motion to transfer venue? Chief Judge Sleet recently ordered transfer to the Northern District of Illinois in a case where parallel litigation was at a more advanced stage than the Delaware case in Motorola Mobility, Inc. v. Apple Inc., C.A. No. 10-cv-867-GMS (D. Del. Jan. 5, 2012). In that case, another infringement action involving the same parties and the same patents had been filed in the Western District of Wisconsin and was later transferred to the Northern District of Illinois. The Northern District of Illinois case had already progressed through substantial discovery and beyond a Markman hearing, and the judge in that matter had already issued a decision construing some of the claim terms. It was scheduled for oral argument in the near future and for trial at least a year before a trial could be held in the Delaware matter. By contrast, the District of Delaware case was in its earliest stages, and related matters involving the Apple, the defendant moving for transfer, were currently stayed and unlikely to proceed during the pendency of the Illinois action.
Considering all of these facts, the court ordered transfer. Applying Supreme Court, Third Circuit, and Federal Circuit precedent, Chief Judge Sleet found that “the balance of interests necessitates the transfer of this action to the Northern District of Illinois.” Id. at 2 n.2. Although “the parties did not concentrate their written submissions or oral arguments on the private interest factors identified [by the Third Circuit] in Jumara,” the court found that these factors favored transfer. Id. In particular, the court observed that because of the parties’ financial means, “considerations of witness convenience, financial constraint, and the location of books and records are not significant issues” and that factor “is often rendered neutral.” Id. Furthermore, the court cited the Federal Circuit’s preference for the jurisdiction in which the action was “first filed,” as expressed in Electronics for Imaging, Inc. v. Coyle, 394 F.3d 1341 (Fed. Cir. 2005), but noted that the public and private interests at play “outweigh the deference afforded to [the plaintiff’s] choice of forum and necessitate transfer for reasons of judicial efficiency.” Motorola, at 2 n.2.
Finally, the court considered the defendant, Apple’s, argument that the case should not be tried in Delaware for reasons of forum non conveniens. While the court ordered transfer on other grounds, it warned that this forum non conveniens argument was not persuasive and even “strikes [the court] as disingenuous,” given that Apple itself has filed several patent infringement actions in Delaware and has argued to keep those actions in Delaware. “Consequently, while Apple correctly identified in its Reply that ‘the strongest argument in favor of transfer is judicial efficiency,’ the court urges Apple and other parties to refrain from extending their advocacy to arguments that, as was the case here, appear less than forthright.” Id. (citations omitted).