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In a recent Memorandum Order, Judge Richard G. Andrews denied without prejudice defendants’ motion to declare the action an exceptional case pursuant to 35 U.S.C. § 285. Sprint Communications Company L.P. v. Comcast Cable Communications, LLC, C.A. No. 12-1013-RGA (D. Del. Aug. 18, 2016). The jury had initially found that defendants infringed certain of plaintiff’s patents, and awarded plaintiff $27.6 million in damages. Id. at 1. Judge Andrews subsequently granted defendants’ motion for judgment as a matter of law and, in the alternative, granted defendants’ motion for a new trial on infringement. Id. at 1-2. Plaintiff appealed, and the appeal is pending.

Judge Andrews denied the motion without prejudice for several reasons:

One, a Federal Circuit decision on the appeal is likely to make the resolution of this motion easier. It is entirely possible that the Federal Circuit could reverse the judgment in this case, thereby mooting the fees motion. It is possible that the Federal Circuit could affirm, and indicate perhaps indirectly through what it writes – that this is a close case. It is also possible that the Federal Circuit could issue a Rule 36 affirmance. A Rule 36 affirmance would be unlikely to be, of much assistance. Overall, deciding the issue in light of the decision on appeal is likely to make the decision easier and better.

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In a recent Report and Recommendation, Magistrate Judge Sherry R. Fallon recommended denying foreign defendants TCL Communication Technology Holdings Limited (“TCL Holdings”) and TCT Mobile Limited’s (“TCT Hong Kong”) motion to dismiss for lack of personal jurisdiction. Godo Kaisha IP Bridge 1 v. TCL Communication Technology  Holdings Limited, C.A. No. 15-634-SLR-SRF (D. Del. Aug. 17, 2016). Judge Fallon found that personal jurisdiction was proper under various sections of the Delaware long-arm statute. First, Judge Fallon found that jurisdiction was proper under subsection (c)(1) because “TCT Hong Kong and TCL Holdings made direct sales of Accused Products to Delaware customers through their respective websites,” and therefore transacted business in Delaware. Id. at 9-10. Judge Fallon also found that section (c)(3) was satisfied because TCT Hong Kong and TCL Holdings caused tortious injury in Delaware, as they caused to be sold through a website or an Amazon storefront accused products to Delaware customers. See id. at 10. Finally, Judge Fallon found that jurisdiction was proper under a “dual jurisdiction” or “stream of commerce” theory, which combines subsections (c)(1) and (c)(4). Under this theory, Judge Fallon concluded that TCL Holdings and TCT Hong Kong “intended to serve the United States market without excluding Delaware, thereby satisfying the first prong of the dual jurisdiction analysis.” Id. at 13. Judge Fallon noted that “[t]he record in the present case establishes TCT Hong Kong’s intent to serve the Delaware market by manufacturing and selling phones, which it actively markets in the United States and distributes through national retailers like Best Buy.” Id. at 12.

Judge Fallon also found that exercising jurisdiction over the TCL Holdings and TCT Hong Kong comported with due process. Judge Fallon explained that evidence showed “TCL Holdings and TCT Hong Kong purposefully availed themselves of the privilege of conducting business in Delaware by introducing their products in the United States market with the knowledge that some of those products would end up in Delaware and they should anticipate being sued in Delaware.” Id. at 16.

Godo Kaisha IP Bridge 1 v. TCL Communication Technology Holdings Limited, C.A. No. 15-634-SLR-SRF (D. Del. Aug. 17, 2016).

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Judge Richard G. Andrews recently decided motions in limine in advance of an August 26 pretrial conference in Impax Laboratories Inc., et al., v. Lannett Holdings Inc., et al., No. 14-984-RGA (D. Del. Aug. 24, 2016).  Judge Andrews excluded one of defendants’ witnesses after finding he was inadequately disclosed and “[d]efendants ma[d]e no meaningful proffer of what [the witness] might say.”  Id. at 1-2.   As to another witness, Judge Andrews did not exclude him, but ordered the defendants make him available for deposition prior to trial.  Id. at 2.  Judge Andrews also precluded the parties’ experts from testifying as to the plain and ordinary meaning of the preambles of the claims, which the Court previously found limiting but did not construe.  Id. at 2-3.

Impax Laboratories Inc. v. Lannett Holdings Inc., No. 14-984-RGA

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Judge Sue L. Robinson recently issued an order holding that, absent the parties’ consensual resolution to the dispute over the sufficiency of defendants’ production, the Court will “use an adverse inference jury instruction regarding infringement[.]” Intellectual Ventures I LLC v. Ricoh Americas Corporation, et al., No. 13-474-SLR-SRF (D. Del. Aug. 17, 2016).  Judge Robinson previously expressed concern that defendants were attempting to use affirmative evidence from its non-party parent, yet prevented discovery by plaintiff of other evidence.  Here, Judge Robinson concluded that the court could not assess whether defendants’ document production was sufficient because apparently defendants’ parent “made its own determinations as to what documents were relevant, without regard either to plaintiff’s document requests or any feedback from the defendant.”  Id. at 2.  Judge Robinson noted that “it is not generally up to the accused infringer (or its parent) to determine in the first instance what information is sufficient to prove (or not) infringement and, therefore, the court cannot say with any degree of confidence that document production from [defendants’ parent] has been adequate or complete[.]”  Id. at 3.  While Judge Robinson indicated the Court would use an adverse inference, the Court would not grant summary judgment of infringement.  Id.

Intellectual Ventures I LLC v. Ricoh Americas Corporation, No. 13-474-SLR

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In Princeton Digital Image Corporation v. LLC, et al., C.A. No. 13-408-LPS (D. Del. Aug. 16, 2016), Chief Judge Leonard P. Stark granted Plaintiff’s motion to set aside the Clerk’s entry of default, but also awarded sanctions to third-party intervenor Adobe for Plaintiff’s failure to answer its complaint in this action.

Defendants in this action are customers of Adobe, and Adobe had successfully moved to intervene in this and related suits due to its customers’ requests for indemnity. Id. at 2. Adobe then filed a complaint in intervention in this and related cases. While Plaintiff answered the complaint and counterclaimed in related suits, it did not do so in this action. Consequently, the Clerk had entered default against Plaintiff. Id. at 2-3.

The Court granted Plaintiff’s motion to set aside the entry of default, but required Plaintiff to “only assert[] defenses that are identical to those asserted in the Related Suits,” except that Plaintiff was prohibited from asserting a counterclaim that had already been dismissed in the related actions. Id. at 4. The Court explained that “[g]iven the identicality of the claims and defenses in this case and the claims and defenses in the Related Suits, there are no significant concerns of inefficiency or prejudice that would warrant deciding the issues in this case in Adobe’s favor based solely on [Plaintiff’s] default.” Id. at 4-5.

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Judge Andrews recently granted a motion filed by several defendants under Rule 12(c) seeking to invalidate the patents-in-suit as ineligible under 35 U.S.C. § 101. The Court found that two of the patents-in-suit “are directed to the abstract idea of (1) sending information, (2) directing the sent information, (3) monitoring receipt of the sent information, and (4) accumulating records about receipt of the sent information.” Two-Way Media Ltd. v. Comcast Cable Communications, LLC, et al., C.A. No. 14-1006-RGA, Memo. Op. at 8-10 (D. Del. Aug. 15, 2016). Judge Andrews further explained that there was no “inventive concept” sufficient to rescue this abstract idea because, although the specifications pointed to a specific system architecture as the innovation in question, “[n]one of the claims . . . recite or refer to anything that could be described as an architecture.” Id. at 10-11. Two other patents-in-suit were similarly deficient. Id. at 12-15.

Judge Andrews’ decision involved two interesting procedural points that movants may wish to note. First, the patentee argued that the “motion is premature because claim construction is necessary to determine patent eligibility under § 101” but Judge Andrews issued an order requiring the patentee to identify “the claim terms it contends need construction and . . . its proposed constructions.” The Defendants argued that those constructions did not alter the § 101 analysis and Judge Andrews adopted the constructions for purposes of the motion. Id. at 5-6.

Second, the patentee argued that the Court should consider materials from prior proceedings before the PTO and in other litigations, which arguably “demonstrate[] how [its] invention[s] solved specific technical problems and added significant inventive concepts over the prior art.” But Judge Andrews found the materials in question “irrelevant to the § 101 motion for judgment on the pleadings [because] [n]one of the materials addresses a § 101 challenge to claims of the asserted patents” but rather the “novelty and nonobviousness of the claims under§§ 102 and 103, [which] does not bear on whether the claims are directed to patent-eligible subject matter under § 101, [as well as the] history of conception of the invention and commercial embodiments of the invention. Id. at 7.

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In Chief Judge Leonard P. Stark’s Markman opinion in a series of related actions brought by Plaintiffs Intellectual Ventures I and II, the Court concluded that several disputed terms were indefinite, and further concluded that several terms appearing in the preambles of the claims were limiting. E.g., Intellectual Ventures I LLC v. AT&T Mobility, et al., C.A. No. 13-1668-LPS (D. Del. Aug. 12, 2016).

The Court concluded that the term “optimize” in the larger phrase “allocating means for allocating resources to said IP flow … so as to optimize end user application IP QoS requirements of said software application” was indefinite because the specification “indicate[d] that QoS is subjective and that QoS can vary from user to user based on individual preferences. . . . This subjective, user-based understanding would make it difficult, if not impossible for a POSA to ascertain, with reasonable certainty, whether the claim limitation is satisfies by any particular embodiment. Id. at 20-21. The Court also agreed with Defendants that “terms of degree” used in another patent rendered the claims indefinite, as a POSA “would not understand the terms ‘large’ and ‘small’ with ‘reasonable certainty,’” and the Court found the testimony of Defendant’s expert persuasive on this point. Id. at 34-35 (citations omitted).

As to terms in the preambles, the Court concluded that the term “frequency hopping” in a preamble was limiting where the preamble was relied on to distinguish the invention from the prior art. Plaintiff had done so during an inter partes review proceeding and, furthermore, this term appeared “in the patent’s title and throughout the specification. The term is needed to ‘give life, meaning and vitality to the claim.’” Id. at 10. As to a different term appearing in another patent (“application aware resource allocator at the MAC laywer / application-aware media access control (MAC) layer”), again the Court concluded the term was limiting in a preamble where the patentee relied on the term during prosecution to distinguish over prior art. Id. at 16.

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Judge Robinson recently considered defendant’s motion to dismiss for failure to state a claim, applying Twombly and Iqbal under the amended Federal Rules abrogating Form 18 for pleading direct infringement, and post-Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S.Ct. 1923, 1932 (2016).   Dermafocus LLC v. Ulthera, Inc., No. 15-654-SLR (D. Del. Aug. 11, 2016).  Judge Robinson analyzed plaintiff’s claims to assess “plausibility,” noting that “it is logical to presume that a defendant has greater access to and, therefore, more information about its accused method.”  Id. at 4-5.  Judge Robinson declined to require more of a plaintiff, “[a]bsent specific guidance from the Federal Circuit directing the court to front-load the litigation process by requiring a detailed complaint in every instance[.]”  Id. at 5.

Judge Robinson concluded that plaintiff’s direct infringement allegations passed muster because they alleged defendant’s accused system was used in such a manner that infringed claim 1 of the patent-in-suit.  Id. at 5-6.  Defendant complained that “plaintiff did not specify ‘which particular combinations of components … allegedly infringe when used,’ nor did plaintiff ‘allege how all of the claimed method steps are performed.'”  Id. at 6.  But, Judge Robinson noted that it was not clear whether the “information demanded by defendant” was available to the public, therefore, “[u]nder these circumstances,” the Court concluded that plaintiff provided “reasonable notice of a plausible claim for direct infringement of at least” claim 1 of the patent in suit.  Id.  Regarding indirect infringement, Judge Robinson concluded that plaintiff failed to adequately allege pre-suit knowledge of the patent-in-suit.  Plaintiff alleged that the patent-in-suit was one of seven prior art references listed in a patent application for which defendant’s founder was a named inventor and applicant.  Id. at 8.  The patent-in-suit, however, did not come up again during prosecution of that application.  Id.  Judge Robinson, therefore, concluded that [a]lthough it is certainly conceivable that [the inventor] took note of the [patent-in-suit] a decade ago and shared his knowledge thereafter with others at his company, the court concludes that the allegations are neither likely nor reasonable; i.e., no plausible inference arises from the alleged facts that defendant had knowledge of the [patent-in-suit] in 2005.”  Id. at 8-9 (emphasis in original).  Judge Robinson also concluded that plaintiff’s allegations of post-suit willful infringement passed muster under Halo, although the Court granted the motion to dismiss as to “pre-complaint willfulness” given the failure to adequately plead pre-suit knowledge.  Id. at 11.  Although prior to Halo, the Court would have dismissed “allegations of willful infringement based only on post-complaint conduct,” [u]nder the less rigid standard announced in Halo . . . the court will allow plaintiff’s general allegations of willful infringement to withstand the motion to dismiss. Id. at 12.

Dermafocus LLC v. Ulthera, Inc., No. 15-654-SLR


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In Verifone, Inc. v. Poynt Co., C.A. No. 16-105-SLR (D. Del. Aug. 11, 2016), a trademark infringement action, Judge Sue L. Robinson denied Plaintiff’s motion for a preliminary injunction. The majority of the opinion addressed likelihood of success on the merits, looking to whether there was likelihood of confusion between the parties’ marks. See id. at 8 -17. The Court concluded that plaintiff had not shown likelihood of success on the trademark claim. Id. at 17. The irreparable harm factor weighed in Defendant’s favor where it was “about to launch its product and quantifies the monetary damages it would suffer due to delay, recertification, and rebranding,” and where Plaintiff’s evidence of harm to its reputation and goodwill was speculative. Id. at 17-18. As to the balance of hardships, this also favored Defendant who had searched the PTO database before applying for its trademark and where Defendant had offered evidence of damage it would suffer from an injunction. Id. at 18. Finally the public interest factor was “largely neutral” where “the public has an interest in not being deceived or confused,” no confusion was evidence and the common purchases of the parties’ product were sophisticated. Id. at 18-19.

Verifone, Inc. v. Poynt Co., C.A. No. 16-105-SLR (D. Del. Aug. 11, 2016)

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In Videoshare, LLC v. Google, Inc., et al., C.A. No. 13-990-GMS (D. Del. Aug. 2, 2016), Judge Gregory M. Sleet granted Defendants’ Motion for Judgment on the Pleadings based on Section 101. The two patents-in-suit “describe[] a method and system for sharing streaming video over a network,” with one of the patents having an additional requirement of having an associated advertisement. Id. at 1-2. Defendants argued they were invalid “for claiming the patent-ineligible abstract idea of translating (converting) content and sharing the translated content (such as video segments), with or without accompanying advertisements.” Id. at 3 (internal quotation marks omitted).

Applying the Alice test and looking to recent Federal Circuit decisions for guidance, the Court found that Defendants had shown invalidity by clear and convincing evidence. Id. at 5. In terms of defining what the patents were directed to under step 1 of the Alice inquiry, the Court rejected Defendants’ articulation of above-quoted the abstract idea as too high a level of abstraction, but also rejected Plaintiff’s articulation of what the patents were directed to as “loaded with nearly every step or feature recited in the claims, thereby defeating the distillative purpose of the ‘directed to’ inquiry.” Id. at 9. Instead, the Court concluded, based in part on the patents’ specifications, that the patents were “directed to preparing a video in streaming video format for sharing over a computer network.” Id. This was an abstract idea because “the claims are not directed to an improvement in computer functionality, and the physical components of the claim merely provide a generic environment for carrying out the abstract idea.” Id. at 11. To that end, the Court was not persuaded that Plaintiff had invented anything that resulted in an improvement to computer functionality, for example, it had not invented “the technology that converts video files into streaming format.” Id. at 12. Furthermore, “[t]he ordered arrangement of such conventional features provides no discernable benefits to computer functionality. This stands in stark contrast to claims [in the recent Enfish and Bascom Federal Circuit decisions] which achieved such improvements to computing technology.” Id. at 13.

Turning to the second step of Alice, the Court concluded that the claims did not contain an inventive concept, as they recited computer capabilities that were routine and conventional. See id. at 17-18. In particular, the Court found these claims distinguishable from those in DDR Holdings that were “necessarily rooted in computer technology”: “[t]he instant claims require a series of conventional steps that could be done on a general purpose computer by a human to instead be done in an automated fashion on a receiving computer via the Internet. In this regard, manually following the claimed conventional steps does not lead to an unconventional result, and . . . automation of these conventional steps does not save the patents from ineligibility. In this way, unlike DDR Holdings, the instant claims do nothing more than conform to the routine and conventional.” Id. at 2.

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