Chief Judge Leonard P. Stark recently considered and denied Sunovion Pharmaceuticals’ motion to dismiss Cipla’s claims for indirect and willful infringement. Cipla Ltd. v. Sunovion Pharmaceuticals Inc., C.A. No. 15-424-LPS (D. Del. Mar. 30, 2016). Regarding inducement, Judge Stark concluded that the complaint sufficiently stated a claim because it alleged facts giving rise to a reasonable inference that users of the accused product directly infringe the patent in suit, and that defendant’s induced third parties to infringe by alleging defendant sells the accused product who it reasonably infers will use the product. Id. at 3-4. Further, the complaint alleges that defendant “knew or should have known that its actions would induce actual infringement.” Id. at 4. “Because the patented compound is (allegedly) the only active ingredient in [the accused product], one can reasonably infer that any use of [the product] will constitute infringement.” Id. Regarding contributory infringement, Judge Stark concluded the complaint passed muster because it adequately alleged that defendant sold a product practicing the patent, that the product has no substantial non-infringing uses, and that defendant knew its product would infringe. Judge Stark also concluded that plaintiff’s willfulness allegations were sufficient because the complaint alleged that defendant had knowledge of the patent in suit and manufactures a product that contains the patented compound. Id. at 6.
Chief Judge Leonard P. Stark recently denied defendants’ motion to stay pending ex parte reexamination of the patent-in-suit. Cronos Technologies, LLC v. Expedia, Inc., et al., C.A. No. 13-1538-LPS, 13-1541-LPS, 13-1544-LPS (D. Del. Mar. 21, 2016). In doing so, Judge Stark addressed the factors relevant to whether a stay is warranted. As to whether a stay would simplify issues, Judge Stark noted that this factor was neutral because, although all asserted claims were before the PTO, there was not complete overlap between the invalidity issues addressed by this Court and those by the PTO. Id. at 2. Regarding timing, Judge Stark noted that this factor weighed against a stay because the reexamination was at its early stages while trial was set in this Court for August 2016. Id.at 3. Last, regarding any delay in requesting reexamination, Judge Stark noted that plaintiff’s status as a non-practicing entity reduced prejudice it might suffer from a stay, but because defendants will not be estopped from raising the same invalidity defenses raised during reexamination, a stay may give them “‘two bites at the apple'[.]” Id. at 4.
Judge Sue L. Robinson recently considered and denied Ricoh Americas Corporation’s motion for judgment on the pleadings that Intellectual Ventures I LLC’s image scanning method patent is invalid under 35 U.S.C. § 101. Intellectual Ventures I LLC v. Ricoh Americas Corporation, et al., C.A. No. 13-474-SLR (D. Del. Mar. 22, 2016). Ricoh argued that the patent “‘simply claims an unpatentable mathematical formula used in a generic prior art scanner,’ which formula can be performed mentally or with a pen and paper.” Id. at 14. Judge Robinson disagreed, noting that the asserted claim does not claim a mathematical formula or method to implement such a formula. Id. Therefore, Judge Robinson concluded that the claimed invention was not directed to an abstract idea. For “completeness” Judge Robinson analyzed step 2 of the Alice framework, i.e., whether the claims recite a known business practice merely implemented using computer technology. Id. at 5. Judge Robinson analyzed the claim language and concluded that it described with “sufficient specificity” how the claimed method operates the scanner, “thereby disclosing an ‘inventive concept.'” Id. at 15.
In Network Congestion Solutions, LLC v. United States Cellular Coporation, C.A. No. 14-903-SLR; v. Wideopenwest Finance, LLC, C.A. No. 14-904-SLR (D. Del. Mar. 22, 2016), Judge Sue L. Robinson denied defendants’ motions to dismiss for lack of patenable subject matter.
The patent-in-suit generally related to systems and methods for alleviating congestion in a communication network. See id. at 14-15. The Court first concluded that the claims were not directed to an abstract idea, finding the claims analogous to those held valid in DDR Holdings as “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.” Id. at 16 (quoting DDR Holdings). “That defendants are able to come up with a human equivalent of ‘resource control management’ does not render the claims at bar similar to methods that ‘merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet.” Id. The Court also concluded that the claims had an inventive concept: “[a]lthough defendants argue that the environment and devices are well known in the prior art and cannot provide an inventive concept, the claim as a whole (the equipment recited and steps claimed) provides the requisite degree of specificity. Moreover, the claims are directed to a solution for a problem that arises in the computer context. This specificity also suffices to alleviate concerns of pre-emption.” Id.
In ABT Holding Company, et al. v. Garnet Biotherapeutics, Inc., C.A. No. 14-1512-LPS-CJB (D. Del. Mar. 23, 2016), Magistrate Judge Christopher J. Burke recommended that Defendant’s motion to dismiss for lack of subject matter jurisdiction be granted. The motion was based on the recent Federal Circuit case, Biogen MA, Inc. v Japanese Foundation for Cancer Research, 785 F.3d 648 (Fed. Cir. 2015), in which that court held that the America Invents Act eliminated district courts’ subject matter jurisdiction over review of decisions in patent interference proceedings. Id. at 1. Now that the U.S. Supreme Court has denied Biogen’s petition for writ of certiorari in that case and the holding is thus “undisturbed,” the Court concluded that it lacked subject matter jurisdiction over the case. Id. at 2.
Rather than dismiss the action, the Court recommended that it be transferred to the Federal Circuit, where Plaintiffs could have originally brought the action. Id.
This case involves an assertion of U.S. Patent No. 8,180,858, titled “Method and System for Presenting Data Over A Network Based On Network User Choices and Collecting Real-Time Data Related to Said Choices,” against Valve, a company that makes and sells video games and runs a digital distribution platform for video games. The Plaintiff accused three of Valve’s games of infringing the patent-in-suit by running in-game “shops” that “allow users to select virtual items and in-game features.” Treehouse Avatar LLC v. Valve Corp., C.A. No. 15-427-SLR, Memo. Op. at 22 (D. Del. Mar. 22, 2016). Valve is incorporated in the State of Washington and has its principal place of business in Washington. Valve moved to transfer to the Western District of Washington, which both parties agreed would be a proper venue. Id. at 1-3.
Valve argued that the choice of forum in Delaware should be given less deference because the Plaintiff “incorporated in Delaware weeks before filing the action at bar” and the plaintiff’s “home turf” should therefore be deemed its principal place of business in Ottawa. Judge Robinson denied the motion to transfer, explaining that “[b]usiness entities choose their situs of incorporation for varied reasons, including the ability to sue and be sued in that venue. . . . It is of no consequence that plaintiff appears to be a non-practicing entity; such a business strategy is not nefarious. The court declines to treat such non-practicing entities as anything less than holders of constitutionally protected property rights, those rights having been legitimized by the [PTO].” Additionally, “Defendant [had] not indicated that any particular witness who may be called upon to testify at trial would be unwilling to do so. . . . [and] this court’s view is that virtually all businesses maintain their books and records in electronic format readily available for review and use at any location.” Id. at 4-8. Moreover, Judge Robinson explained, “because very few cases are resolved through trial, and because trials in most busy districts are of limited duration, this factor should not be accorded significant weight. It certainly should not become the tail that wags the dog.” Id. at 6-7.
Valve also filed a motion to dismiss on Section 101 grounds, which Judge Robinson denied. On the first step of the Alice analysis, Judge Robinson found that “the claims at bar are directed to users selecting and modifying customizable characters (avatars) in real time on CE sites, as well as storing and retrieving such characters within an information network. The human analogy is not representative of the claims as a whole, which describe more than the pre-Internet business concept of ‘tallying’ choices applied in a computer setting. Instead, the claims are . . . ‘necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.’” Id. at 23. On the second step of the Alice analysis, Judge Robinson found that the patent seeks “to address the problem of ‘network site loyalty’ by providing the network user ‘audio data and visual image data that is indicative of the individuality of the network user’ . . . [which is achieved by] provid[ing] a specific series of steps used to customize a character to users’ choices in real time . . . communicate with other users through an information network including CE sites . . . navigate to a different site with the customized character . . . and operate CE sites for a plurality of users . . . .” The Court therefore concluded that “the claims are innovative, i.e., do not represent the ‘routine and conventional’ use of a computer.” Id. at 23-24.
The Defendant in this case, Ancestry.com, moved to dismiss several aspects of the Plaintiff’s operative complaint, each of which Judge Robinson addressed in turn in this order. First, regarding willful infringement, Judge Robinson found that the complaint adequately alleged that Ancestry was aware of the patent-in-suit before the lawsuit was filed. Ancestry had approved a label for saliva collection products provided by Plaintiff Genotek that included a URL patent marking, and Ancestry’s own patent application had uncovered Genotek’s application as potential prior art. Judge Robinson found that “any of the above facts taken alone would not provide sufficient indicia that the [patent-in-suit] was called to the attention of Ancestry. However, the factual circumstances surrounding the parties’ dispute, taken as a whole, satisfy the requirement that the [patent-in-suit] was called to Ancestry’s attention . . . [because] the parties were in an ongoing business relationship whereby Ancestry was made aware that the saliva collection kits purchased from DNA Genotek were marked as patent-protected, Dr. Chahine, a patent attorney and general manager at Ancestry, not only was responsible for approving the labels Ancestry attached to the DNA Genotek products, but was also the first-named inventor on Ancestry’s ‘701 Application, . . . [and] Ancestry was directly informed that the [Genotek] Application was relevant prior art and that the [Genotek] patent was a family member.” DNA Genotek Inc. v. Ancestry.com DNA, LLC., C.A. No. 15-355-SLR, Memo. Or. at 2-4 (D. Del. Mar. 22, 2016).
Judge Robinson dismissed, however, counts for conversion and trespass to chattels, finding that the counts did not pass muster under the economic loss doctrine. Genotek argued that Ancestry had committed conversion and damaged the value of Genotek’s patent portfolio by filing certain Ancestry applications. Genotek also had, however, an independent count for breach of contract that covered these allegations. Thus, the economic loss doctrine applied because the duties allegedly violated arose from contract. Id. at 4-6. Finally, Judge Robinson refused to dismiss the count to quiet title, finding that Genotek need merely show that it could acquire an interest in the property subject to the quiet title claim. Id. at 6-7.
In a recent Memorandum Opinion, Judge Sue L. Robinson denied defendant’s motion to dismiss pursuant to FRCP 12(b)(6), which alleged that plaintiff failed to claim patentable subject matter under 35 U.S.C. § 101. Improved Search LLC v. AOL Inc., C.A. No. 15-262-SLR (D. Del. Mar. 22, 2016). The first patent-in-suit, U.S. Patent No. 6,604,101 (“the ‘101 patent”) “relates generally to translation of query and retrieval of multilingual information on the web.” Id. at 13. As Judge Robinson explained, the ‘101 patent describes “a method and system for conducting a translingual search on the Internet and accessing multilingual websites through dialectal standardization, pre-search translation and post-search translation.” Id. The second patent-in-suit, U.S. Patent No. 7,516,154 (“the ‘154 patent”) is a continuation-in-part of the ‘101 patent and incorporates a system and method “to send a user one or more advertisements in his native language, also called as source language, over the Internet while the user is performing a cross language search.” Id. at 15. More specifically, “the server conducts a search in the database and returns to the user one or more advertisements relevant to the content word or keyword,” and the “advertisements are either in the source language or may be translated by the server from a target language.” Id. at 15-16.
Notably, Judge Robinson found that “[i]n trying to sort through the various iterations of the § 101 standard, the court looks to DDR as a benchmark.” Id. at 12 (citing DDR Holdings, LLC v. Hotels.Com, L.P., 773 F.3d 1245, 1258-59 (Fed. Cir. 2014)).
As to the first step of the Alice framework, defendant attempted to “analogize the method of the ‘101 patent to a set of tasks performed by a human, [arguing] that the ‘101 patent is directed to the abstract idea of searching for documents in a foreign language by translating a modified search request.” Id. at 16-17 (citations omitted). Similarly, defendant argued “that the ‘154 patent is directed to two abstract ideas – translingual searching and advertising.” Id. at 17. Judge Robinson, however, provided the following analysis as to the first step under Alice:
In a recent Memorandum Opinion, Judge Richard G. Andrews denied defendants’ (“ZTE”) renewed motion for judgment as a matter of law of non-infringement as to U.S. Patent Nos. 7,190,966 (“the ’966 patent”) and 7,286,847 (“the ’847 patent”). InterDigital Communications, Inc. v ZTE Corp., C.A. No. 13-009-RGA (D. Del. Mar. 18, 2016). Judge Andrews found that the testimony of plaintiffs’ (“InterDigital”) infringement expert provided substantial evidence to support the jury’s findings. Id. at 6-9. Notably, as to one contested limitation, Judge Andrews explained that while ZTE “does not have the burden of proving non-infringement, . . . it seems . . . that ZTE should have challenged [InterDigital’s expert’s] testimony if ZTE believed it lacked support.”
Judge Andrews also denied ZTE’s motion for a new trial as to the ’847 and ’966 patents, rejecting ZTE’s argument that the validity and infringement verdicts were inconsistent. Id. at 9-10. Judge Andrews also found that while InterDigital “probably exceeded the scope” of Judge Andrews’ ruling on the permissible use of certain licensing evidence, those licensing references “were [not] sufficiently prejudicial to warrant a new trial.” Id. at 10. Similarly, Judge Andrews found that InterDigital’s use of “an impeachment ‘scoreboard’ in closing argument” did not warrant a new trial. Id. at 11. As Judge Andrews explained, “[t]he jury was instructed that it was the sole judge of credibility and that arguments made by attorneys were not evidence,” and that the “jury was entitled to determine for itself whether the alleged impeachments showed inconsistent testimony.” Id.
Judge Andrews also noted that the PTAB has invalidated all claims of U.S. Patent No. 8,380,244 (“the ’244 patent”), another patent-in-suit. InterDigital has appealed that determination to the Federal Circuit where it is now pending. Id. at 2. Judge Andrews thus concluded that “[i]n view of the doubt as to [the] validity of this patent, . . . it makes sense to postpone resolution of the JMOL until the Federal Circuit rules.” Id. at 9.
In a recent Report and Recommendation, Magistrate Judge Sherry R. Fallon recommended that the Court dismiss plaintiff’s (“Evolved Wireless”) willful infringement claims and claims for pre-complaint inducement and contributory infringement pursuant to FRCP 12(b)(6). Evolved Wireless, LLC v. Samsung Electronics Co., Ltd., C.A. No. 15-545-SLR-SRF (D. Del. Mar. 15, 2016). Judge Fallon first addressed defendants’ (“Samsung”) pre-suit knowledge of the five patents-in-suit. Judge Fallon found, among other things, that Evolved Wireless’s allegations in the complaint regarding a May 4, 2015 FRAND licensing letter were insufficient to establish that Samsung had pre-suit knowledge of the patents-in-suit. Judge Fallon explained that the letter included “a list of eighty-five U.S. and foreign patents and applications, [and stated] that ‘the use of one or more patent claims in the portfolio is required to practice or otherwise comply with LTE standards or technical specifications.’” Id. at 6. The letter failed to “identify the patents-in-suit in this action from the list of eighty-five patents and patent applications.” Id. Judge Fallon also noted that “[t]he complaint in the instant case contains no allegations that the patents-in-suit are well-known in the industry.” Id. at 7. Judge Fallon thus concluded that Evolved Wireless failed to plead that Samsung had pre-suit knowledge of the patents-in-suit. Id. at 8.
Judge Fallon next found that Evolved Wireless failed to sufficiently plead the “objective recklessness” prong of the willful infringement standard. Judge Fallon explained that “Samsung’s refusal to enter into a licensing agreement with Evolved Wireless in response to a letter that did not accuse Samsung of infringement, did not identify any allegedly infringing products made by Samsung, and did not specifically identify the patents-in-suit from the appendix of eighty-five patents and patent applications does not demonstrate that Samsung was objectively reckless in continuing to manufacture, market, and sell the LTE devices.” Id. at 10. Judge Fallon thus recommended that the Court dismiss Evolved Wireless’s willful infringement allegations.
Next, Judge Fallon also recommended that the Court dismiss Evolved Wireless’s pre-complaint induced and contributory infringement claims. As noted, Judge Fallon had found that “Evolved Wireless . . . failed to sufficiently plead that Samsung had knowledge of the patents-in-suit and the infringement allegations prior to the filing of this action.” Id. at 12. As to the intent element, Judge Fallon added that “[b]ecause the complaint fails to sufficiently allege that Samsung understood the infringing nature of the asserted conduct prior to commencement of the suit, Evolved Wireless has not adequately pleaded that Samsung specifically intended that its customers would infringe the patents-in-suit.” Id. at 13.