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Judge Gregory M. Sleet recently granted defendants’ motion to stay pending inter partes review of four patents-in-suit (U.S Patent Nos. 6,487,200, 6,993,353, 7,907,714, and 8,855,147).   AT&T Intellectual Property I, L.P., et al. v. Cox Communications, Inc., et al., C.A. No. 14-1106-GMS (D. Del. Sept. 24, 2015).  Plaintiffs objected to the proposed stay because defendants would not be prejudiced absent a stay, whereas plaintiffs would suffer prejudice since the parties are direct competitors.  Id. at 2.  Moreover, the fact that the parties were in the middle of discovery and that the IPR petitions covered only four of the nine patents-in-suit weighed against stay.  Id.  Judge Sleet disagreed.  Defendants “requested review of more than half the claims asserted in this case” and “[t]he results of the IPR may affect not only validity of the asserted claims, but also their scope.”  Id.at 3 n.4.  Therefore, the IPRs will simplify issues in this litigation.  Moreover, Judge Sleet found that the stage of the case did not weigh against a stay because trial was not scheduled until October 2016.  Id.

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Yesterday, in Elm 3DS Innovations, LLC v. Samsung Electronics Co., Ltd., et al., C.A. No. 14-1430-LPS-CJB (D. Del. Sept. 29, 2015), Magistrate Judge Christopher J. Burke recommended denial of Defendants’ motion to dismiss induced infringement claims to the extent Plaintiff was seeking pre-suit infringement damages. Plaintiff had only alleged pre-suit induced infringement of one of the patents-in-suit (the ‘239 patent). Plaintiff’s operative complaint cited no direct evidence that Defendants had reviewed or cited to the ‘239 patent before the suit, but did contain circumstantial evidence. See id. at 4-5. In finding that the complaint had sufficiently alleged pre-suit knowledge of this patent, the Court concluded that its allegations “suggest[ed] that . . . Defendants had some fairly detailed, specific discussions about the ‘239 patent’s parent – and went on to cite other patens from the same patent family thereafter. . . . [T]hese facts at least help make it seem more plausible that Defendants did in fact have actual knowledge of the ‘239 patent.” Id. at 5 (emphasis in original). “Plaintiff’s allegations that the’239 patent is well known and frequently referenced in the semiconductor industry, and that it has been frequently cited by Defendants’ competitors . . . over the last many years” supported the same conclusion: [t]hese pleaded facts are relevant . . . because if true . . . they render it more likely that Defendants . . . may have been similarly aware of the ‘239 patent’s existence and its contents.” Id. at 5-6.

Even though these two categories of allegations “may not have been sufficient” by themselves, and did not “make pre-suit knowledge probable” when taken together, “considered as a whole, they render it a least plausible that Defendants were aware of the ‘239 patent and its claims prior to suit,” which was sufficient to withstand a motion to dismiss. Id. at 6-7 (emphasis in original).

Defendants also argued that Plaintiff had failed to adequately plead their knowledge of their customers’ infringement. The Court also rejected this argument. The complaint had set out “how or why these products infringement at least [one claim],” Plaintiff had plausibly alleged knowledge of the ‘239 patent (as discussed above) and that Defendants would have been able to understand the content and scope of its specifications and claims. Id. at 7-8 (emphasis in original). Further, Plaintiff has plausibly alleged that Defendants knew its semiconductor chips were incorporated into its customers’ finished products imported and sold in the U.S. Id. at 8. Taken together, these facts plausibly alleged Defendants’ knowledge of its customers’ infringement. Id. at 9.

Finally, Defendants argued that Plaintiff had insufficiently pled specific intent to infringe. The Court also rejected this position, explaining that the complaint alleged Defendants’ “encourage[ment]” for their customers to incorporate Defendants’ products into finished products, “all after having sufficiently described what it is about Defendants’ semiconductor chips that is said to render them infringing apparatuses in the first place, and why Defendants had knowledge that those chips infringed. This is sufficient to plead specific intent.” Id. at 9.

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In Greatbatch Ltd., v. AVX Corp., C.A. No. 13-723-LPS (D. Del. Sept. 22, 2015), Chief Judge Leonard P. Stark (i) denied defendants’ motion to strike plaintiff’s “Percolation Network” theory of infringement; and (ii) denied plaintiff’s motion to strike defendants’ newly disclosed prior art references.   As to defendants’ motion to strike plaintiff’s infringement theory, Judge Stark found that “whatever prejudice Defendants may have suffered (or will suffer) from Plaintiff[’s] . . . ‘percolation network’ theory of infringement is outweighed by other factors, including the importance of the information Defendants seek to strike.” Id. at 2. Judge Stark explained that defendants themselves acknowledged that the theory “is the entirety of the [plaintiff’s] infringement case for the ’779 patent.” Judge Stark also noted that plaintiff’s expert “in effect disclosed the . . . theory in his opening expert report,” and therefore defendants “failed to show that they were unfairly surprised or meaningfully prejudiced.” Id. Judge Stark also found it “notabl[e]” that defendants’ “expert opined on a percolation network theory of infringement in his responsive expert report and Defendants had an opportunity to depose Plaintiff’s experts regarding this theory.” Id. Judge Stark also found the other three Pennypack factors to weigh in plaintiff’s favor, and thus denied defendants’ motion to strike. Id.

Denying plaintiff’s motion to strike defendants’ newly disclosed prior art references, Judge Stark first found that plaintiff “has not specifically articulated what unfair prejudice it may suffer if Defendants’ allegedly late disclosure of prior art references and combinations is not stricken.” Id. at 3. Second, Judge Stark explained that “whatever prejudice Plaintiff may have suffered (or will suffer) is outweighed by other factors, including the importance of the information Plaintiff seeks to strike.” Id. Lastly, the court noted that it did not find “willful deception or flagrant disregard of any court order. To the contrary, the Court intended – by issuing its Order of July 28, 2015 – that Defendants would finally identify their invalidity contentions by August, 17, 2015, and this is exactly what Defendants did.” Id. (internal citation omitted).

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Judge Richard G. Andrews recently adopted two reports and recommendations on a number of summary judgment claims.  Impulse Technology, Ltd. v. Microsoft Corp., C.A. No. 11-586-RGA (D. Del. Sept. 22, 2015).  In his memorandum adopting the Magistrate Judge’s recommendations, Judge Andrews discussed the “doctrine of vitiation,” which he characterized as “an obscure way of applying the ‘judgment as a matter of law’ standard to doctrine of equivalents cases.'”  Id. at 4.  Judge Andrews explained, quoting Federal Circuit decisions, that the doctrine of vitiation is “nothing more than a conclusion that the evidence is such that no reasonable jury could conclude that an element of an accused device is equivalent to an element called for in the claim, or that the theory of equivalence to support the conclusion of infringement otherwise lacks legal sufficiency.”  Id. (quoting Cadence Pharm. Inc. v. Exela Pharmsci Inc., 780 F.3d 1364, 1371 (Fed. Cir. 2015) (quoting DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 469 F.3d 1005, 1018-19 (Fed. Cir. 2006)).  The Court added that “[i]t seems to me that the ‘doctrine of vitiation’ can be essentially the application of the ‘insubstantial differences’ test to limit the ‘function-way-result’ test” for determining equivalents.  Id. at 5.  “When cases talk about the claimed equivalent being the ‘opposite’ or ‘antithesis’ of the claimed limitation, it looks a lot like the cases are saying that the differences are to substantial to be overcome by the ‘function-way-result’ test.”  In this case, the Court agreed with the Magistrate Judge that the “difference between the claims’ defined physical space (known ‘prior’ to set up of the system) and the accused product’s hardcoded values (meaning the physical space is only known ‘after’ the set up of the system) is too great to be covered by the doctrine of equivalents.”  Id. at 5-6.

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In Cronos Technologies, LLC v. Expedia, Inc., C.A. Nos. 13-1538, 13-1541, 13-544-LPS (D. Del. Sept. 8, 2015), Chief Judge Leonard P. Stark denied defendants’ motion for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c), which sought to invalidate certain claims of U.S. Patent No. 5,644,110 (the “’110 patent”) for being directed to patent-ineligible subject matter. The ’110 patent discloses methods and systems for “remote ordering of products.” Id. at 1. Judge Stark observed that despite challenging the validity of 12 claims, defendants’ analysis was “directed almost exclusively to [independent method] claim 22,” which defendants contended is “representative of all the asserted claims.” Id. at 4.

Denying defendants’ motion, Judge Stark explained that “[t]here are several considerations relevant to deciding a Rule 12 motion that challenges the patent eligibility of multiple patent claims based on analysis of a single representative claim.” Id. at 4. First, Judge Stark found that defendants “have not adequately articulated why each of claim 22’s dependent claims relates to the same abstract idea purportedly embodied by claim 22; nor have they adequately explained why each of the dependent claims fails to include an inventive concept.” Id. at 5. Defendants also failed to “address the concepts embodied in claim 22 as a whole.” Id. at 6. Judge Stark further observed that “the Court cannot say at this time” that there is no set of facts “that could be proven that would result in the challenged claims being patent-eligible.” Id. at 7. To that end, Judge Stark explained that “[t]here may be a set of facts related to preemption, questions of patentability, and/or whether claim 22 (and its dependent claims) are directed to a technological improvement rather than a generic computer implementation of an abstract idea that prevents the Court from determining that the challenged claims are patent ineligible.” Id.

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In Courtesy Products, L.L.C. v. Hamilton Beach Brands, Inc., C.A. No. 13-2012-SLR-SRF (D. Del. Sept. 1, 2015), Judge Sue L. Robinson denied defendant’s motion to stay litigation pending IPR of U.S. Patent Nos. 7,311,037 (“the ’037 patent”) and 7,770,512 (“the ’512 patent”). In addition to the ’037 and ’512 Patents, plaintiff is also asserting U.S. Patent No. 7,258,884 (“the ’884 patent”) against defendant. Id. at 1. As Judge Robinson explained, “[t]he PTAB declined to institute IPR proceedings with respect to, inter alia, the ’884 patent or to asserted claims 19 and 26 of the ’037 patent.” Id. at 2. As to the stage of the proceedings, “the parties have pursued fact discovery and just commenced the claim construction exercise. Trial is scheduled to commence in March 2017.” Id. Finding that stay was not warranted, Judge Robinson first observed that “the IPRs instituted by the PTAB do not address all of the claims at issue, meaning that the parties’ dispute will not be fully resolved by the IPRs, regardless of the outcome of such.” Id. at 3. Second, Judge Robinson explained that “if the outcome of the PTAB is not favorable to [defendant], [defendant] has the option of asserting the rest of its arsenal of defenses in this court, not only prolonging the ultimate resolution of the dispute, but expending the resources of the parties and two public agencies.” Id. Finally, and “perhaps most significantly,” Judge Robinson noted that “[plaintiff] is in direct competition with, and has lost business to, [defendant].” Id.

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Judge Goldberg recently granted-in-part declaratory judgment-plaintiff Transcend Medical, Inc.’s motion for summary judgment of invalidity finding the claim term “choroid” invalid as indefinite.  Transcend Medical, Inc. v. Glaukos Corporation, C.A. No. 13-830 (D. Del. Sept. 18, 2015).  The indefinite term was found in claims of all patents-in-suit–U.S. Patent Nos. 7,857,782, 8,075,511, and 8,579,846.  The parties agreed that the plain and ordinary meaning of the term was “vascular layer of the eye located between the sclera and retina.”  Id.at 10.  But, Transcend Medical argued that the term was invalid because the patents-in-suit “define the term in multiple inconsistent ways[,]” sometimes in accord with the term’s plain and ordinary meaning and at other times inconsistent with that meaning.  Id.  Glaukos argued that the other descriptions were not inconsistent, relying on its expert’s testimony about what a person of ordinary skill would understand.  Id. at 12.  Judge Goldberg determined, however, that the expert’s opinion failed to account for contrary argument Glaukos made to the USPTO.  Id.  As such, Judge Goldberg disregarded the expert’s testimony because it “contradict[ed] the clear import of the prosecution history and the language of the specification.”  Id. at 13 (citing Teva Pharm. USA, Inc. v. Sandoz, Inc., 789 F.3d 1335, 1342 (Fed. Cir. 2015)).  Finding that the “choroid” term was defined inconsistently in the specification and during prosecution, Judge Goldberg held the specification “fail[ed] to inform, with reasonable certainty, those skilled in the art as to the scope of the term ‘choroid.'”  Id. at 15.  Judge Goldberg denied Transcend Medical’s summary judgment motion in all other respects, finding a genuine issue of material as to written description and indefiniteness of other claim terms.  Id. at 3-8,  15-18.

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In Cot’n Wash, Inc. v. Sun Products Corp., C.A. No. 12-651-SLR (D. Del. Sept. 14, 2015), Judge Sue L. Robinson denied defendant’s motion for attorney fees and costs under 35 U.S.C. § 285. Defendant had prevailed on summary judgment following a favorable claim construction ruling. The Court concluded that the case was not exceptional, as “a prototypical patent infringement case” where “the core factual and legal issues were related and relatively subtle.” Id. at 3. The Court also observed that it was “not unusual for a patentee to assert the broadest possible interpretation of its patent, in order to generate the greatest economic benefit from its intellectual property. . . . it truly should be an extraordinary case that puts patentees at risk for fees and costs when they follow this business model.” Id. at 3 n.2.

The Court also denied Defendant’s request for “the costs of responding to certain of plaintiffs’ testing” that took place over the course of expert discovery and before the claim construction ruling, where the Court did not rely on such testing to rule in Defendant’s favor.  Id.

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In a declaratory judgment action for non-infringement of Defendants’ patents, Judge Richard G. Andrews granted-in-part Defendants’ motions to dismiss. Crypton Future Media, Inc. v. Hologram USA, Inc., et al., C.A. No. 14-1247-RGA (D. Del. Sept. 8, 2015). Defendants had sent a cease-and-desist letter to Plaintiff regarding Defendants’ potential infringing use. Id. at 2. Defendants argued that this did not create a substantial controversy, and even if it had, the controversy was mooted by the parties’ subsequent communications, after the complaint was filed, where Defendants gave Plaintiff “repeated assurances that it considers the technology at issue in the Complaint to be non-infringing.” Id. at 4.

While, at the time the action was filed, “there was clearly declaratory judgment jurisdiction” where Defendants’ letter was more than a mere expression of concern, it “acknowlege[d] the threatening tone,” and “clearly charged [Plaintiff] with infringement” id. at 6, the Court concluded that the parties’ subsequent interactions had divested it of subject matter jurisdiction.  The Court “agree[d] with [Plaintiff] that [Defendants] ha[ve] been careful to make narrow disclaimers that leave a wide range of future activity susceptible to attack. Because [Plaintiff’s] system uses a different layout each time based on site-specific concerns, and uses various materials rented on site, [Defendants’] statements may not address all future activity. It is for precisely that reason, however, that the Court cannot retain jurisdiction. Because the technology is different each time, this action cannot result in ‘specific relief through a decree of a conclusive character.’ . . . [Defendants’] representations are sufficient to moot the controversy and are binding as a matter of judicial estoppel.” Id. at 7 (citations omitted).

As a result of the Court’s finding that it now lacked subject matter jurisdiction and thus should dismiss the federal claims, it also dismissed the related state law claims and dismissed Defendant’ motions with respect to improper venue and failure to state a claim as moot. Id.

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Judge Robinson recently denied a motion to transfer to the District of Maryland filed by TWi Pharmaceuticals. As Judge Robinson described the motion, “TWi has not presented a typical scenario for transfer, that is, the case clearly could have been brought in the transferee district, and the transferee district is a more convenient one for the moving party. Instead, TWi skipped the first part of the § 1404(a) analysis altogether in its opening papers, concedes that the convenience factors are neutral, and urges the court to transfer based on the singular fact that the Maryland court had rendered a decision on a related patent and, thus, any forum but Maryland should be rejected as an exercise in forum shopping.” Par Pharmaceutical, Inc., et al. v. Breckenridge Pharmaceutical, Inc., et al., C.A. No. 15-486-SLR, Memo. Or. at 4-5 (D. Del. Sept. 10, 2015). Judge Robinson then “decline[d] to characterize a patentee’s choice of venue as ‘forum shopping’” particularly because “any negative connotations associated with ‘forum shopping should have dissipated when Congress enacted the Patent Pilot Program Act.” Id. at 5. Additionally, Her Honor found that “TWi glosses over the fact that the [patent-in-suit] has been asserted against both [defendants]; i.e. if TWi has its way, there most certainly will be judicial inefficiencies, with two courts trying two separate cases over the same patent, possibly reaching inconsistent results” and that the patents asserted in Delaware and Maryland, “although related, are different and the parties in suit are different.” Id. at 6. Thus, Judge Robinson denied the motion to transfer. In addition, Her Honor rejected a separate argument that the Court should dismiss one count of the complaint because the court “was divested of jurisdiction once the FDA approved TWi’s ANDA” because “TWi cited no authority in support of its argument, and the court is aware of none.” Id. at 7.
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