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Chief Judge Leonard P. Stark recently issued the Court’s claim construction opinion for the disputed terms of U.S. Patent No. 8, 316,445, titled “System and Method for Protecting Against Malware Utilizing Key Loggers.”  Trusted Knight Corporation v. International Business Machines Corporation, et al., C.A. No. 14-1063-LPS-CJB (D. Del. Nov. 19, 2015).  Judge Stark found two claim terms invalid as indefinite.  Judge Stark found the term “in response to the software key logging through the API stack to an internet communication port” indefinite because “it is unclear what action is performed ‘in response to the software key logging.'”  Id. at 8 (emphasis in original).  The Court found the second term indefinite after determining it was missing the verb “is.”  Id. at 11.  Corrected, the term would read “a process of passing the encrypted data to a 3-ring level where a hook is inserted by a hook-based key logger.” Id. (emphasis in original).  Judge Stark determined that the Court could not correct the term because Plaintiff’s proposed correction was the “subject of reasonable debate.”  Id.at 12.

Making Plaintiffs requested correction . . . would appear to make this limitation operative only in response to a hook (i.e., a form of malware) being inserted. Yet the specification – and, as noted in connection with the preceding term dispute, Plaintiff as well – states that the claimed invention operates even in the absence of malware (i.e., without a hook being inserted by a hook-based key logger). This seeming contradiction and, at minimum, ambiguity – demonstrate that Plaintiffs proposed correction to the claim language is subject to reasonable debate.

Id. (emphasis in original).  Judge Stark also noted that other corrections were feasible.  As such, the Court could not correct the claim term and, uncorrected, a person of ordinary skill in the art would not know the meaning of the term with reasonable certainty.  Id. at 12-13.

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In W.L. Gore & Associates, Inc. v. C.R. Bard, Inc., et al., C.A. No. 11-515-LPS-CJB (D. Del. Nov. 9, 2015), Magistrate Judge Christopher J. Burke considered a number of references, related to the stent-graft work of three different physicians (Lee, Vallbracht, and Palmaz), that Defendants claimed anticipated the U.S. Patent No. 5,735,892, entitled “Intraluminal Stent Graft.”

The Court concluded that the Lee references, and one Vallbracht reference, did not disclose certain limitations of the asserted claims, and thus recommended that Plaintiff’s motion for summary judgment of no anticipation be granted as to those refernces. See id. at 8-20; 26-28. On the other hand, the Court concluded that issues of material fact remained with respect to whether another Vallbracht reference, as well as all the Palmaz references, anticipated certain claims of the patent-in-suit. See id. at 21-26; 28-32. Accordingly, the Court recommended that Plaintiff’s motion be denied-in-part.

UPDATE: In a Memorandum Order dated November 24, 2015, Chief Judge Stark has adopted Judge Burke’s order in all respects. See W.L. Gore & Assocs., Inc. v. C.R. Bard, Inc., et al. C.A. No. 11-515-LPS-CJB, Memo. Or. at 4-5 (D. Del. Nov. 24, 2015).

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Magistrate Judge Burke recently issued a report and recommendation recommending denial of a patent-infringement defendant’s motion for summary judgment of laches. The defendant, Bard, had launched several prior products in the years before the litigation with the plaintiff, Gore, began. There was also prior litigation between the parties beginning in 2003 relating to the same products. W.L. Gore & Associates, Inc. v. C.R. Bard, Inc., et al., C.A. No. 11-515-LPS-CJB, Report and Recommendation at 1-4 (D. Del. Nov. 11, 2015). Accordingly, Judge Burke began by finding that the presumption of laches from a six-year delay applies because a period of eight years passed between Bard’s launch of its earliest product in 2003, which had similar features to those accused of infringement, and Gore’s filing of the suit in 2011. Id. at 7-9.

Gore responded, however, that its delay in bringing suit was justified. First, Gore asserted that it was justified in not bringing suit against the earlier product due to its “quick technical failure and limited market impact” particularly compared to the later product that was the subject to the infringement suit. Id. at 10. Following the launch of Bard’s product in 2003, Gore explained that the five to six years delay were justified because Gore was focused on other legal issues. For instance, Gore’s business leader for its medical products division stated in his deposition that Gore was “fairly consumed” with this litigation and other litigation against another defendant, which drew Gore resources that might otherwise have been used on “offensive” patent litigation. Id. at 10-12. Furthermore, Judge Burke found that there was at least a question of fact as to whether Bard should have reasonably anticipated being sued by Gore at some point. Id. at 12-14. Judge Burke cited to case law deeming both of these excuses sufficient to overcome a presumption of laches and held that there were questions of fact that should be resolved by a jury.

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Chief Judge Leonard P. Stark recently considered Plaintiff S3 Graphics’s motion for partial summary judgment on patent ownership and license, and the parties’ motions to preclude expert testimony.  S3 Graphics Co., Ltd. v. ATI Technologies, ULC, et al., C.A. No. 11-1298-LPS (D. Del. Oct. 21, 2015).  In support of its motion for summary judgment, S3 Graphics argued that summary judgment that it owns the disputed patents was appropriate because a January 2001 assignment “unambiguously assigned all rights” in the patents to S3 Graphics.  Id. at 13.  Defendants, on the other hand, argued that the patents were in fact assigned to defendant ATI by virtue of a March 2001 asset purchase agreement.  Id.  And, even if the January 2001 Assignment did assign the rights in the patents to S3 Graphics, defendant ATI was a “bona fide purchaser without notice” so, pursuant to 35 U.S.C. § 261, the assignment was void as against Defendants.  Id.  Applying settled principles of Delaware contract law, Judge Stark interpreted the unambiguous contract terms to find that the 2001 assignment explicitly conveyed to S3 Graphics “the full and exclusive right, title, and interest in” the patents .  Id. at 13-15.  Judge Stark also rejected Defendants argument that they became subsequent purchasers without notice by virtue of the March 2001 asset purchase agreement.  Judge Stark interpreted the unambiguous terms of the March 2001 assignment to find that it does not include the disputed patents.  Id. at 18-25.  Judge also found in S3 Graphics’s favor on the issue of whether Defendants have an express license to the patents, but denied summary judgment as to the issue of implied license.  Id. at 26-30.

Judge Stark also excluded the portions of Defendants’ expert report “directed solely to whether the various contractual provisions at issue” establish who owns the disputed patents because the Court “resolved this issue as a matter of law.”  Id. at 45.  Judge Stark determined, however, that other parts of the expert report were relevant to the issue of implied license which will go forward to trial.  Id.  Judge Stark also excluded portions of S3 Graphics’s expert’s report relevant to what assets ATI acquired through the asset purchase agreement.  Judge Stark found that the expert was not qualified as an expert on contract interpretation and “never even read the APA.”  Id. at 49.

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In the on-going litigation between Intellectual Ventures (IV) and Canon, Judge Robinson has denied several motions for summary judgment of non-infringement and for summary judgment of invalidity including both anticipation and subject matter eligibility arguments, with a few limited exceptions in which summary judgment was granted. Several of the rulings finding infringement related to patents involving doctrine of equivalents issues. For one patent, Judge Robinson granted summary judgment of non-infringement based on the principle that if “a theory of equivalence would vitiate a claim limitation, however, then there can be no infringement under the doctrine of equivalents as a matter of law.” Intellectual Ventures I, LLC, et al. v. Canon Inc., et al., C.A. No. 13-473-SLR, Memo. Op. at 60-62 (D. Del. Nov. 9, 2015) (citing Tronzo v. Biomet, Inc., 156 F.3d 1154, 1160 (Fed. Cir. 1998). With respect to another patent, Canon alleged that claim scope had been surrendered and IV responded that it was asserting only literal infringement. Judge Robinson found that because IV did not respond to Canon’s argument, it would be precluded from asserting equivalents at trial. Id. at 30.

In analyzing invalidity of one patent-in-suit, Judge Robinson also concluded that a doctoral thesis that was available in archives at MIT but would have been difficult to find for anyone who did not already know of its existence was not prior art because it could not serve as “public notice.” Id. at 34-36.

Judge Robinson rejected the portion of Canon’s summary judgment motion seeking a finding of indefiniteness because similar arguments had already been rejected during claim construction: “The court agrees with IV in that Canon’s indefiniteness arguments were considered in its claim construction order and Canon offers no fresh reasons to compel a different conclusion. Essentially, this portion of Canon’s motion for summary judgment equates to an untimely motion for reargument. Nonetheless, Canon’s arguments regarding IV’s expert’s use of the words ‘single receive path’ were taken out of context. Indefiniteness is not based on an expert’s utilization of a phrase to contrast the invention with prior art. Rather, § 112, 1f 2 requires ‘that a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty.’ As the court previously held, this term meets that standard in light of the disclosures contained within the specification.” Id. at 6-8.

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In Chesnut Hill Sound Inc. v. Apple Inc., C.A. No. 15-261-RGA (D. Del. Nov. 6, 2015), Judge Richard G. Andrews denied Plaintiff’s motion for a preliminary injunction.

The Court assumed for purposes of the motion that Plaintiff could prove a likelihood of success on the merits, but because it concluded that Plaintiff had not made a showing of irreparable harm, an assessment of likelihood of success was unnecessary. Id. at 3.

As to irreparable harm, the Court pointed to Plaintiff’s delay in moving for an injunction, where the patent-in-suit that was the subject of the motion had been issued three years before the motion. The fact that Plaintiff had brought suit on a second patent that had not issued until 2014 did not alter the Court’s analysis, as this patent was not the subject of the motion and the ten-month delay from its issuance to filing of the motion still demonstrated significant delay. See id. at 7-8. The fact that Plaintiff did not have a commercially viable product also showed a lack of irreparable harm. Plaintiff argued that Defendant’s product prevented its entrance into the market and, absent an injunction, Plaintiff’s investment in product development would be lost. The Court disagreed, noting that “[w]ithout an available product or any evidence that one will be available in the near future, any arguments [Plaintiff] makes regarding lost profits, lost market share, lost goodwill, and lost business opportunities are speculative, if not fanciful. Accordingly, [the Court found Plaintiff’s] lack of a commercially available product, or even a suggestion as to when such a product would be available, weakens its ability to show the type of ‘immediate irreparable injury” required to prove irreparable harm.” Id. at 9. Finally, Plaintiff had not shown that monetary damages would be insufficient, as mere difficulty in calculating monetary damages due to the fact that Defendant’s accused product was offered for free was insufficient to show such damages would be insufficient compensation. Id. at 10. Instead, due to Plaintiff’s “lengthy delay in seeking injunctive relief, its lack of a commercially available product, and its failure to show a causal connection between any alleged infringement and the market failure of its products . . . [Plaintiff] would be adequately compensated by money damages should it succeed on the merits of its infringement claim.” Id.

Because the Court concluded that Plaintiff had not made a showing of irreparable harm, it did not consider the balance of hardships or impact on the public interest. Id. at 11.

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Magistrate Judge Christopher J. Burke recently issued a Report and Recommendation recommending that the Court grant Brigham and Women’s Hospital’s (“BWH”) Motion to Intervene.  Endoheart AG v. Edwards Lifesciences Corporation, C.A. No. 14-1473-LPS-CJB (D. Del. Nov. 6, 2015).  BWH sought to intervene “in order to be able to press its claim . . . that it is entitled to a declaratory judgment that it is the owner of United States Patent No. 8,182,530 (“the ‘530 patent”) and to certain patent applications related to the ‘530 patent (collectively, “the inventions”).”  Id. at 1-2.  Plaintiff Endoheart AG claimed that it was the rightful owner of the ‘530 patent, the patent in suit.  Id. at 2.  Endoheart argued that the motion to intervene was not timely filed because it was filed seven months after Endoheart filed its complaint and four months after the Court entered a case schedule.  Id. at 3-4.  Judge Burke disagreed noting that the case is in its early stages, with trial not scheduled until March 2017, and any discovery related to BWH’s declaratory judgment claim would be narrowly focused.  Id. at 4.  Judge Burke also found that BWH sufficiently met its burden to make a prima facie showing that it has an ownership interest in the inventions.  Id.at 5-6.  Last, Judge Burke found that intervention would be appropriate because otherwise no party would be asserted that BWH is the rightful owner of the inventions.  Id. at 7.

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Last Friday, Judge Sue Robinson issued a temporary restraining order prohibiting Dr. Reddy’s Laboratories (DRL) from selling a generic esomeprazole product due to its likelihood of confusion with plaintiff AstraZeneca’s Prilosec® and Nexium® tablets. AstraZeneca AB, et al. v. Dr. Reddy’s Laboratories, Inc., C.A. No. 15-988-SLR, Memo. at 13-14 (D. Del. Nov. 6, 2015).

AstraZeneca holds three federal trademark registrations covering the color purple for gastrointestinal pharmaceuticals as well as one registration for the phrase “THE PURPLE PILL®.” It has used the color purple in branding gastrointestinal drugs, including Prilosec® and Nexium®, since 1989 and has sold approximately 22.6 billion purple capsules in that time. Approximately six years ago, DRL began selling a generic version of Prilosec®, which used a half-purple, half-yellow-or-grey capsule. In recent years, several generic versions of Nexium® have also been marketed by other companies, each of which used blue or white capsules. Most recently, in September 2015, DRL launched its generic version of Nexium® using a capsule that is entirely purple, although in two different shades. In late October 2015, AstraZeneca responded with a trademark infringement lawsuit and a request for injunctive relief. Id. at 1-4.

Judge Robinson concluded that AstraZeneca “carried its burden to prove that it is likely to succeed on the merits of its case, that it is likely to suffer irreparable harm if the requested relief is not granted, that the balance of hardships and the public interest weigh in its favor.” Id. at 13-14. Her Honor continued: “If DRL’s arguments were carried to their logical end, the loss of a branded company’s patent monopoly would inevitably result in a loss of its trademark rights, a result not consistent with the law or the market place. Moreover, so long as injunctive relief is available to prevent harm, the court declines to force such plaintiffs such as AZ to actually incur harm that is likely, but not provable, at the outset. Therefore, AZ’s motion for a temporary restraining order will be granted.” Id.

In support of this conclusion, Judge Robinson found that AstraZeneca was likely to succeed on the merits of its Lanham Act claims. Among other factors considered, Judge Robinson found that:
(1) the products were very similar because “DRL’s generic capsule is purple, albeit two shades of purple. Although not identical to AZ’s branded capsule, it does fit the description of the mark, “purple.” It has been recognized that a registration for a color covers all shades of that color”;
(2) “AZ has presented credible evidence that its Purple Marks branding is of long duration, of value, and strong”;
(3) Given the totality of the circumstances, including the physical appearance of DRL’s other generics (distinctive), the fact that DRL is a second wave generic in this market (and perhaps has to be more aggressive to get market share), and DRL’s explanations for adopting an all-purple pill . . . the court concludes that DRL intended to test AZ’s trademark, rather than honor it”; and
(4) “Despite the fact that Nexium® is a branded product and DRL’s generic is not, the court finds that AZ and DRL are still competing in the same market for the same consumers in the first instance, even if DRL is ultimately competing against other generics once the decision to buy a generic has been made.”

Id. at 5-9.

Judge Robinson also concluded that there was sufficient evidence of dilution of AstraZeneca’s marks because those marks are sufficiently “famous” and because “it is evident that DRL, in its marketing of its GI generics, has progressed from using colors in its two-tone capsules that are not at all similar to AZ’s purple pills, to a two-tone capsule that is (1) all purple and (2) uses AZ’s shade of purple.” Id. at 9. Moreover, Judge Robinson found that AstraZeneca had not acquiesced to DRL’s conduct by the “sale of the half-purple Prilosec generic capsules since 2005 [and the resulting] ‘market history of overlap between’ the products” and that such a history did not undermine an argument of irreparable harm. Id. at 12.

Judge Robinson also rejected a contract defense based on the agreement settling prior Hatch-Waxman litigation between AstraZeneca and DRL and releasing “any and all claims . . . in connection with the DRL Product . . . arising before the Effective Date of this Settlement Agreement.” Her Honor explained that although DRL’s ANDA product was described in its ANDA as “purple opaque,” this characterization was of little consequence because “[f]rom the court’s extensive ANDA litigation experience, however, the court takes judicial notice of the fact that such submissions are voluminous by nature, and that the focus of ANDA litigation is on the formulation of the generic product for infringement purposes (not on the color of the proposed commercial product, which is not on the market as not even approved by the FDA yet).” Id. at 10 n.6. Further, Her Honor noted that Hatch-Waxman litigation allows only for consideration of patent issues, and that the settlement agreement at issue, “[i]f anything . . . specifically preserved AZ’s trademark rights against the very conduct in which DRL has engaged.” Id. at 10-12.

Having found a likelihood of success, Judge Robinson found a likelihood of irreparable harm because “[b]y using AZ’s Purple Marks, it is likely that DRL will create (and intended to create) the false impression that its generic esomeprazole magnesium capsules are identical to Nexium®, not merely bioequivalent, and may be an “authorized generic,’’ that is, a generic drug made or authorized by the brand name company, i.e., by AZ.” Id. at 12. In balancing the harms, Her Honor “recognize[d] that imposing injunctive relief on DRL (i.e., forcing DRL to take its generic off the market) will be costly, both monetarily and in terms of such intangibles as market share and loss of good will. The court nevertheless concludes that DRL engaged in the conduct at issue fully aware of such consequences and, therefore, cannot be heard to complain that the risks it took did not pay off.” Id. at 13.

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Judge Richard G. Andrews recently issued what appears from the Court’s docket to have been a sua sponte order directing a defendant to explain why its pro hac vice counsel should not have their admission revoked as a result of filing a reply brief that raised, for the first time, the defendant’s best argument in support of a motion to dismiss for lack of personal jurisdiction.  Funai Electric Co., Ltd. v. Personalized Media Commc’ns, LLC, C.A. No. 15-558-RGA (D. Del. Nov. 6, 2015).  The Court also ordered the plaintiff to file a sur-reply addressing the merits of the defendant’s argument.

The full text of the docket order was as follows:

ORAL ORDER:  Defendant’s Reply Brief (D.I. 14) raises an issue not in either of the earlier briefs, in particular, whether Plaintiff meets the “arising from” requirement of section 3104(c)(1).  It cites in particular Sprint Nextel.  (D.I. 14, pp. 2-4).  Plaintiff is ORDERED to respond to on the merits to the argument.  Defendant’s counsel are ORDERED to explain why they should not have their pro hac vice status revoked for saving their better argument for the reply brief.  Both letters are due November 13, 2015.  Ordered by Judge Richard G. Andrews on 11/6/2015.
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In Reckitt Benckiser Pharmaceuticals Inc., et al. v. Watson Laboratories, Inc., et al., C.A. No. 13-674-RGA and Reckitt Benckiser Pharmaceuticals Inc., et al. v. Par Pharmaceutical, Inc., et al., C.A. No. 14-422-RGA (D. Del. Oct. 26, 2015), Judge Richard G. Andrews ruled on several motions in limine related to the parties’ expert testimony.

The Court granted Plaintiffs’ motion to preclude Defendants’ invalidity expert who relied on the expert reports of other of experts in forming his obviousness opinion. The Court concluded the opinion “lack[ed] reasoning or analysis” and was “needlessly cumulative,” and excluded the testimony under FRE 403. Id. at 2.

The Court denied Defendants’ motion to preclude Plaintiffs’ validity expert from relying on certain post-dated references that could show that “drug content uniformity was a problem in the field at the time of the invention,” arguing it was hearsay. Id. The Court allowed reliance on the references as either not hearsay or something experts in the field would reasonably rely on in forming an opinion (and thus allowable under FRE 703). Id. at 2-3. The Court also held that the references were relevant and that Defendants’ objections to the expert’s reliance on them went to weight, rather than admissibility.

Finally, the Court denied one of the defendant’s motion to preclude Plaintiffs from relying on certain “partitioning” infringement analysis, explaining that the motion “raise[d] questions appropriate for the trier of fact.”

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