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In a recent memorandum order, Chief Judge Leonard P. Stark granted defendants’ motion for leave to amend their answer to add a defense and counterclaim asserting that U.S. Patent No. 7,215,984 (“the ’984 Patent”) is unenforceable due to plaintiff’s inequitable conduct during the ex-parte reexamination of the ’984 Patent. Masimo Corp. v. Philips Electronic North America Corp. et al, C.A. No. 09-80-LPS-MPT (D. Del. Sept. 2, 2014). The main issue Judge Stark resolved was whether defendants’ claim was futile. Defendants alleged that several plaintiff representatives committed inequitable conduct when they “each failed on several occasions to inform the PTO that the interpretation of the asserted claims of the ‘984 patent [plaintiff] urged the PTO to adopt had been rejected by this Court, including: (i) when Magistrate Judge Thynge issued her Report & Recommendation (“R&R”) regarding summary judgment, (ii) when the PTO issued its Notice of Intent to Issue Reexamination Certificate (“NIRC”) based on that rejected construction, and (iii) when the undersigned District Judge issued his Summary Judgment Opinion and Order (“SJ Order”) adopting the magistrate’s R&R.” Id. at 3. Plaintiff submitted the R&R to the PTO and expressly identified the pages containing Judge Thynge’s construction, but did not “explain how Judge Thynge’s construction or explanation related to the claim construction positions [plaintiff] had advocated before Judge Thynge and was continue to advocate before the PTO.” Id. at 7. Subsequent to the R&R but prior to the PTO’s NIRC, the Court adopted the R&R, making the previous recommended construction an Order of the Court. Id. As Judge Stark explained, plaintiff never disclosed to the PTO the Order of the Court adopting the R&R, even after the issuance of the NIRC. Id. at 8. Judge Stark also noted that the examiner’s reasoning in the NIRC “appeared to indicate that she was relying on the rejected construction advanced by [defendant]” and that the examiner mistakenly believed she was adopting the same construction as the Court. Id. at 8-9. Judge Stark ultimately concluded the following:

Regardless of whether a patentee in all cases has an obligation to disclose a District Court’s adoption of an unobjected-to recommended claim construction, or whether a patentee has an obligation to explain the impact of a Court’s claim construction on arguments the patentee has made to the examiner, under the facts alleged here it is plausible to believe that [plaintiff] intentionally decided not to make these disclosures because [plaintiff] intended to deceive the examiner into believing she was applying the Court’s claim construction, when [plaintiff] knew she was not, and when [plaintiff] feared application of the Court’s claim construction could lead the examiner to invalidate its claims. While [defendants have] not yet proven these allegations, [they have] stated plausible claims for relief . . . .

Id. at 9. Judge Stark also found that plaintiff would not be unduly prejudiced from the amendment, as defendants sought “only limited additional discovery, including short depositions of the four [plaintiff] representatives and production of the readily available reexam history . . . , which should not affect the [scheduled trial].” Id. at 10.

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In a series of related cases (e.g., Inventor Holdings, LLC v. Wal-Mart Stores, Inc., C.A. No. 13-096-GMS (D. Del. Aug. 27, 2014)), Special Master Paul M. Lukoff issued an opinion relating to a number of protective order disputes.  The parties had disagreements over: “the scope of the prosecution bar, the use of laptop computers by plaintiff’s attorneys and experts in the stand-alone computer access facility and the extent to which the plaintiff can obtain hard copies of source code pages.”  Id. at 2.

As to the (bilateral) prosecution bar, the plaintiff wanted its litigation counsel to be able to “consult with [prosecution counsel]” in re-examination, inter partes review and covered business method review, “explaining that coordination is necessary to avoid taking inconsistent positions.”  Id. at 3.  The Special Master, relying on recent case law regarding prosecution bars in this District (Versata Software, Inc. v. Callidus Software, Inc.), concluded that the risk of inadvertent disclosure merited a “limited prosecution bar exemption similar to the one noted above in Versata,” where litigation counsel would not be allowed to consult with prosecution counsel if they reviewed source code in the litigation.  Id. at 4.  The Special Master observed that, since plaintiff’s litigation team may soon grow from three to five attorneys, it appeared that plaintiff would be able to “implement a response to the potentially irreconcilable situation created by access to source code on one hand and possible proceedings at the PTO on the other.”  Id. at 5.  The Special Master further decided that 1) the duration of this bar would be two years and 2) the subject matter of the bar would be “the broad subject matter of the patent-in-suit,” as defendant requested, because “[e]specially as a non-practicing entity, the risk is that the ambitions of the plaintiff are quite broad in terms of the reach of the technology they own.”  Id.

Regarding the laptop computer issue, plaintiff requested laptop computers when accessing source code to facilitate note-taking.  The parties had already agreed that no mobile phones would be allowed and that the source code would only be available at a stand-alone computer.  The Special Master pointed out that “the plaintiff, having already agreed to create a fairly impervious environment . . . has already conceded that any device that could undermine that environment would jeopardize the integrity” of the confidential information.  Id. at 6Under these circumstances the Special Master explained that a laptop computer, even if lacking a camera or unable to transmit information from the stand-alone computer, would not qualify as acceptable.  Id.  Therefore, plaintiff’s notes would have to be hand-written.

Finally, regarding printing source code, plaintiff wanted to print 1,000 pages aggregate total, while defendants requested a limit of 250 pages aggregate total.  The Special Master observed that the parties had yet to make all exchanges contemplated by Paragraph 4 of the District’s Default Standard for Discovery, and in light of “this state of incomplete discovery, we are probably not at a point yet where we know enough to establish the appropriate boundaries for ‘excessive’ printing.”  Id. at 8.  Therefore, the Special Master deferred decision on this issue, directing the plaintiff to apply to the Special Master if necessary and to note page numbers that “had the present ‘excessive’ threshold not been extant, they would have requested to be printed, so that those pages . . . can indeed be printed in the event the Court permits such.”  Id. at 8.

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In Cot’n Wash, Inc. et al. v. Henkel Corp. et al., C.A. Nos. 12-650, 12-651-SLR (D. Del. Aug. 26, 2014), Judge Sue L. Robinson considered defendants’ motion for summary of invalidity and non-infringement, and defendants’ motions to exclude certain expert testimony. Regarding defendants Henkel Corporation, The Dial Corporation, and Henkel Consumer Goods, Inc.’s (collectively, “the Henkel defendants”) motion for summary judgment of non-infringement with respect to their “original products,” Judge Robinson found there were no genuine issues of material fact that those products did in fact infringe the patent-in-suit, and therefore denied the Henkel defendants’ motion for summary judgment in this regard. Id. at 10-11. Further, Judge Robinson ruled that “consistent with the court’s claim construction and analysis, the court is inclined to enter summary judgment sua sponte in favor of plaintiffs that the Henkel defendants’ original products infringed the [patent-in-suit].” Id. at 11. As to the Henkel defendants’ motion for summary judgment of non-infringement with respect to their “reformulated products,” Judge Robinson ruled that “plaintiffs must either provide the Henkel defendants with a covenant not to sue” or the Court would entry judgment in favor of the Henkel defendants. Id. at 9. As to the Henkel defendants’ motion for summary judgment of non-infringement regarding indirect infringement, the Henkel defendants argued that “because plaintiffs’ theory of induced infringement relies on Dial’s customers’ use of the accused products, any possible recovery under that claim would be entirely duplicative of the recovery for the alleged direct infringement.” Id. at 13. Judge Robinson found, however, that “the question of double recovery is proper at the damages phase” and the Henkel defendants’ motion for summary judgment was thus denied in this regard. Id. at 14. Further, Judge Robinson denied the Henkel defendants’ motion for summary judgment that argued that Henkel Consumer Goods and Henkel Corporation are not proper parties to this action. Id. at 12-13. Judge Robinson did, however, grant defendant The Sun Product Corporation’s (“Sun”) motion for summary judgment of non-infringement. Id. at 14-15.

Judge Robinson denied defendants’ motions for summary judgment of invalidity for anticipation, public use, and obviousness, finding issues of material fact to exist with respect to each. Id. at 15-33. Judge Robinson did, however, grant defendants’ motion to exclude plaintiffs’ expert opinions concerning secondary considerations of non-obviousness, specifically commercial success, industry praise, licensing, and copying. Id. at 34-39. With respect to commercial success, industry praise, and licensing, Judge Robinson generally found that the opinions failed to establish a nexus between the respective secondary consideration and the claimed invention of the asserted patent. Id. at 34-38. As to copying, Judge Robinson found that plaintiff’s expert report “cites to numerous exhibits regarding proof of copying, yet none of these exhibits were submitted to the court. Without these exhibits it is impossible to determine the validity of the copying claims.” Id. at 39.

 

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In Genetic Technologies Limited v. Laboratory Corporation of America Holdings, et al., C.A. No. 12-1736-LPS-CJB (D. Del. Sept. 3, 2014), Magistrate Judge Christopher J. Burke recommended the grant of defendants’ motion to dismiss for failure to state a claim. The Court determined that the single asserted claim of U.S. Patent No. 7,615,342, entitled “ACTN3 Genotype Screen for Athletic Performance,” was directed to non-patent-eligible subject matter under Section 101.

“The methods claimed in the ‘342 Patent embody findings that the presence of certain genes is correlated with elite sprinting, strength, or power performance.” Id. at 3. The asserted claim included steps for “analyzing” a sample obtained, “detecting” the presence of certain alleles at a certain location, and then “predicting the potential sprinting, strength, or power performance of the human” where the presence of the two alleles would be positively associated with these attributes.

The Court first concluded that defendants’ motion to dismiss was not premature because (i) “[p]laintiff has failed to articulate why there are any disputed areas of fact relevant to resolution of the Motion,” id. at 10, and (ii) the Court concluded that claim construction was not necessary to resolve the Section 101 question, see id. at 11-13. The Court also prefaced its analysis with an examination of the holdings of decisions it found “especially instructive:” Mayo Collaborative Servs. v. Prometheus Labs. Inc., 132 S. Ct. 1289 (2012) (“Prometheus”), PerkinElmer, Inc. v. Intema Ltd., 496 F. App’x 65 (Fed. Cir. 2012), and Assoc. for Molecular Pathology v. Myriad Genetics, Inc., 698 F.3d 1303 (Fed. Cir. 2012). See id at 14-20.

Applying the Supreme Court’s two-part test for patent eligibility of patent-ineligible concepts (such as laws of nature), see id. at 9-10, the Court first identified the patent’s “link between a particular genetic variation and the potential for elite athletic performance” to be a natural law. Id. at 20-21. Next the Court assessed whether the elements of the claim transformed it into a patent-eligible application of the natural law because they contained an inventive concept. The Court concluded that this was not the case; rather, the elements of the claim that applied the law of nature – the “analyzing,” “detecting,” and “predicting” steps – utilized methods that were already well-known and/or were merely instructions on how to apply the natural law. See id. at 22-28. The Court came to the same conclusion when looking at these elements “as a whole” and found that “the steps in combination do not make the natural law and insignificant post-solution activity into patent-eligible subject matter.” Id. at 28. The Court concluded that the claims were similar to those rejected in Prometheus where the claimed steps “amount[ed] to nothing significantly more than an instruction to [testers] to apply the applicable laws.” Id. at 29 (internal citations omitted). The Court also rejected plaintiff’s argument that the claim was patentable because it may meet the machine-or-transformation test because “the Supreme Court has held that the machine-or-transformation test is non-dispositive in these types of cases – a claim can still pass the test, but fail the Section 101 law of nature inquiry.” Id. at 29 n.14 (citing Prometheus).

Finally, the Court observed that “[t]he presence here of the basic underlying concern that [claim 1 of the ‘342 Patent] tie[s] up too much future use of laws of nature simply reinforces [the Court’s] conclusion that the process[] described in [claim 1] [is] not patent eligible.” Id. at 30 (alternations in original) (citing Prometheus).

As a result, the Court recommended that plaintiff’s complaint be dismissed as to claim 1 and that, should the District Court adopt this recommendation, the District Court direct the plaintiff to provide “notice as to whether any other claims of the patent-in-suit will be asserted here, or whether the case should be closed.” Id. at 30.

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Judge Robinson recently considered a defendant’s motion in a patent infringement case to dismiss claims of joint and willful infringement. With regard to joint infringement, the question presented was whether the plaintiff had adequately pled joint liability based on an agency relationship between two defendants who were corporate parent and subsidiary. The complaint made allegations regarding the corporate structure and operations of the defendant, Toshiba. Judge Robinson found the allegations of infringement based on agency sufficient to withstand a motion to dismiss, taking “plaintiffs’ factual allegations as true, especially where, as here, the information resides with defendants who, in turn, have provided only a general denial of infringement rather than facts about the organization and relationships between the various defendant entities.” Intellectual Ventures I LLC, et al. v. Toshiba Corp., et al., C.A. No. 13-453-SLR, Memo. Op. at 4-6 (D. Del. Sept. 3, 2014).

Judge Robinson granted, however, the motion to dismiss as to allegations of willful infringement. Her Honor explained that “all the information relating to notice is in the hands of plaintiffs and it is a matter of public knowledge that plaintiffs own hundreds of patents, [therefore] a general allegation about ‘discussions’ or ‘a presentation’ is insufficient to withstand a motion to dismiss. Moreover, notice of the infringement risk via the letter written only one day before the complaint was filed does not constitute a showing of objective recklessness on the part of the defendants.” Id. at 8.

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Judge Andrews recently considered several motions in limine in advance of trial in Interdigital Communications, Inc., et al. v. Nokia Corp., et al., C.A. No. 13-10-RGA (D. Del. Aug. 28, 2014).  Of note, the Court explained that evidence relating to inventors’ alleged dishonesty before the PTO would be inadmissible during the jury trial, under Rule 403, except to the extent it arose in cross-examination to challenge inventors’ credibility pursuant to Rule 608(b), or potentially as it related to an obviousness inquiry. In the latter case, the Court ordered that the defendants must disclose how they intended to use such evidence in connection with obviousness before trial.  The Court also precluded the defendants from referring to the plaintiff as a “troll, non-practicing entity (NPE), patent assertion entity, or extortionist.”   The Court also excluded evidence of a rejected IPR petition, explaining that “[a] PTO non-merits decision not involving Defendants has little or no probative value, and would require a lot of explanation for the jury to be able to understand. … [any] minimal probative value … would be substantially outweighed by the danger of unfair prejudice to the Defendants, and the risk of jury confusion from the complexity added by such testimony.”

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Following her decision last summer granting Butamax’s motion for summary judgment of non-infringement and invalidity of certain patent claims in its ongoing litigation with Gevo, Judge Robinson recently considered Butamax’s request for a Section 285 exceptional case determination and award of attorneys fees. Applying the guidance set out in Octane Fitness, Judge Robinson found that this was not an exceptional case. Gevo, Inc. v. Butamax Advanced Biofuels LLC, et al., C.A. No. 13-576-SLR, Memo. at 2-4 (D. Del. Aug. 26, 2014).

Butamax characterized the claims resolved by summary judgment as a “scenario where a plaintiff is offered the opportunity to investigate and verify facts before filing an infringement action, and instead refuses that offer and immediately files a baseless suit, and loses on summary judgment.” Id. at 3. Judge Robinson explained, however, that the “parties at bar are involved in a race to develop a commercial isobutanol recovery process, a complex and unpredictable technology” and that “Gevo’s scepticism of Butamax’s representations regarding non-infringement and its research and commercialization plans” was therefore justifiable. Id. Accordingly, “Gevo’s conduct in the case at bar was not unreasonable, nor is there evidence of ‘subjective bad faith.’” Id. at 4.

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In a recent order, Judge Sue L. Robinson ruled on several issues following the parties’ pretrial conference. Carrier Corp. v. Goodman Global, Inc., et al., C.A. No. 12-930-SLR (D. Del. Aug. 28, 2014). First, Judge Robinson denied defendants’ expert’s proffer related to anticipation, where the expert’s report merely referenced a series of claims charts “which were never explained or even specifically endorsed by the expert.” Judge Robinson concluded that defendants should not be permitted “to assert essentially new opinions through [their] expert declaration submitted in connection with [their] proffer of anticipation.” Id. at 2.

Second, Judge Robinson considered whether to admit as evidence opinions of counsel and reexamination proceedings that post-dated the alleged period of induced infringement, which was alleged to be between November 2009 and September 2012. See id. at 2-4. Judge Robinson found that the “request for reexamination,” which was filed in September 2012 following a prior art search, was “circumstantial evidence of [defendants’] intent during the relevant time.” Id. at 3. Judge Robinson would allow such evidence to be admitted, but would provide a limiting instruction for the jury and restrict the scope of examination. Id. On the other hand, Judge Robinson found that defendants failed to establish a “sufficient nexus between the August 2013 opinions of counsel and [defendants’] intent in September 2012.” Id. at 3-4. Noting that such evidence would present “an even greater risk of undue prejudice,” defendants would not be permitted to introduce that evidence at trial.

Third, Judge Robinson found that defendants failed to “timely identify, for purposes of full and fair discovery, its contention that it never sells its components as a ‘system’” and was therefore precluded from presenting such a defense. Id. at 4. Fourth, defendants had argued that there remained an issue of fact for the jury to determine, namely, whether a particular limitation “would be understood with reasonable certainty by a person of ordinary skill in the art.” Id. Judge Robinson explained, however, that the Court had already rejected defendants’ indefiniteness argument with respect to the limitation and provided a construction for the term. Id. Given that it is the Court’s responsibility to “construe claim language consistent with the understanding of a person of ordinary skill in the art,” Judge Robinson rejected defendants’ argument. Id.

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In Interdigital Communication v. ZTE Corp., C.A. Nos. 13-009, 13-10-RGA (D. Del. Aug. 28, 2014), Judge Richard G. Andrews ruled on several motions for summary judgment filed by plaintiff and defendants. First, Judge Andrews addressed plaintiff’s motions that an asserted patent was not unenforceable due to inequitable conduct, and that the asserted claims of certain asserted patents were not invalid as anticipated, obvious, or for lack of enablement and written description. Id. at 3-6. Judge Andrews granted plaintiff’s motion regarding enablement, explaining that to demonstrate a lack of enablement, it is “necessary to show that one cannot practice the invention without undue experimentation,” and that defendants failed to “raise any evidence in their briefing” regarding undue experimentation. Id. at 5-6. Judge Andrews also granted plaintiff’s inequitable conduct summary judgment motion in part, explaining that while “there [was] a sufficient factual dispute as to the Siemens 004 reference,” the defendants did “not address the other five references.” Id. at 4. Accordingly, Judge Andrews found that defendants “waived their defense of inequitable conduct” as to those five references. Id. Judge Andrews denied plaintiff’s motion for summary judgment as to anticipation, obviousness, and lack of written description. Id. at 3-6. Judge Andrews also denied plaintiff’s Daubert motion. Id. at 8. Defendants had also filed summary judgment motions addressing various non-infringement and anticipation arguments. Id. at 6-7. Judge Andrews found a genuine issue of material fact to exist with respect to each of these issues and thus denied defendants’ motions. Id.

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Judge Richard G. Andrews recently considered GeoTag, Inc.’s motion to dismiss Microsoft and Google’s (“Plaintiffs”) amended complaint for lack of subject matter jurisdiction.  Microsoft Corp. et al. v GeoTag, Inc., C.A. No. 11-175-RGA (D. Del. Aug. 29, 2014).  Judge Andrews considered an earlier motion on similar grounds but gave Plaintiffs leave to amend their complaint.  GeoTag renewed its motion in opposition to Plaintiffs’ amended complaint.  Id. at 1.  This declaratory judgment action was filed by Plaintiffs in response to GeoTag’s suits filed in the Eastern District of Texas against Plaintiffs’ customers.  Plaintiffs argued that the Court had subject matter jurisdiction  because “‘GeoTag’s Texas lawsuits implied an assertion of both indirect and direct infringement against Google and Microsoft, and a live controversy therefore existed as to the Google and Microsoft products accused by GeoTag’s Texas lawsuits against their customers.'”  Id. at 2.  Under MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), this implied assertion of infringement “created a justiciable dispute.”  Id. at 3.

GeoTag disputed “Plaintiffs’ implied assertion of direct infringement,” arguing that it “‘would mean that the patentee made incorrect allegations of direct infringement against a customer that, unbeknownst to the patentee, would constitute implied assertions of direct infringement against the supplier.'”  Id.  Judge Andrew disagreed because, under 35 U.S.C. § 271, a customer and vendor can both directly infringe a patent based on the same conduct.  Id.  3-4.  Judge Andrews determined that subject matter jurisdiction was present because an express accusation need not occur, only whether there was “‘a reasonable potential that such a claim could be brought.'”  Id.  at 4. (quoting Microsoft Corp. v. DataTern, Inc., 755 F.3d 899, 905 (Fed. Cir. 2014)).  Because “reasonable potential” existed, Judge Andrews denied GeoTag’s motion as to direct infringement.  Judge Andrews also determined that subject matter jurisdiction existed based upon an implied assumption of induced infringement because, despite being aware of allegations against its customers, Google provided articles to customers on how to create store locators.  Id. at 5.  In Judge Andrews view, Plaintiffs’ actions “established a ‘reasonable potential’ GeoTag could have brought induced infringement claims.”  Id.

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