Chief Magistrate Judge Mary Pat Thynge recently found that a plaintiff’s motion to compel sought discovery that was disproportional under Rule 26. AVM Technologies, LLC v. Intel Corp., C.A. No. 15-33-RGA/MPT (D. Del. May 3, 2016). Specifically, the plaintiff sought discovery of “products that are not accused and pre-date the accused products because documents created when features were introduced would more likely address their purpose and the problems to be resolved.” Such information, the plaintiff argued, “would refuse Intel’s defense of lack of utility, noninfringing technology and also Intel’s arguments of accidental occurrence.” Intel argued in response that it had produced a substantial number of documents relating to, among others, the immediate predecessor generations of products not accused.” Intel added that the plaintiff’s motion, if granted, would require Intel to search and produce “a range of documents covering over 20 years” relating to “nearly every microprocessor made by Intel.” Judge Thynge focused on the proportionality requirement of Rule 26, and explained that the Court is required to “evaluate the parties’ arguments and reasoning for or against the requested production on the bases of the production sought, the other production to date, the degree of the requested production’s relevance, and the burdens imposed on the party from whom the production is requested.” In post-hearing submissions, the plaintiff accepted Intel’s compromise offer to search a high level database, and to then search across hits from that database using the search terms requested by the plaintiff. As a result, Judge Thynge denied the plaintiff’s motion but ordered Intel to perform the agreed upon searches.
Judge Richard G. Andrews recently denied a motion for summary judgment seeking to invalidate a plaintiff’s patent for lack of patent-eligible subject matter. ART+COM Innovationpool Gmbh v. Google Inc., C.A. No. 14-217-RGA (D. Del. Apr. 28, 2016). At issue was the plaintiff’s ‘550 patent, which describes “a software-implemented method for providing a pictorial representation of space-related data, particularly geographical data of flat or physical objects.” Id. at 2 (internal quotation marks omitted). Google argued that the patent “is directed to the abstract ideal of storing image data, then repeatedly requesting specific data, which is then stored and displayed[,]” which “can be analogized to the age-old practice of a visitor in a library reviewing atlases that include maps with differing resolutions or scales.” Id. at 6-7 (internal quotation marks omitted). While the Court did not view the library analogy as a perfect one, id. at 8 n.1, it agreed with Google that the patent was directed to an abstract idea. Moving to the second step of the analysis, whether the claims express an inventive concept , Judge Andrews explained that “[t]he Supreme Court has described the second step … as calling for the query: ‘What else is there in the claims before us?’.” Here, Judge Andrews found that, in combination, the patent claims were directed to an “iterative process [that] allows a user to access more electronic pictorial data in a more rapid fashion. The distributed data sources permit a user to access masses of data, while the recursive division step permits a user to access that data quickly, with increasing resolution over time. This amounts to ‘more than a drafting effort designed to monopolize the [abstract idea itself].'” Id. at 12 (quoting Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2357 (2014)) (alteration in original).
In this case, the declaratory judgment plaintiff brought suit against two defendants seeking declarations of non-infringement and invalidity. The defendant and patentee moved to dismiss for lack of personal jurisdiction and subject matter jurisdiction. Fidelity Nat’l Information Services, Inc. v. Plano Encryption Techs., LLC, et al., C.A. No. 15-777-LPS-CJB, Report and Recommendation at 1-6 (D. Del. Apr. 25, 2016).
The first defendant, Plano Encryption Technologies (PET), is a Texas LLC, and the second, Koba Holdings, is a Delaware LLC. Accordingly, it was undisputed that Koba was subject to personal jurisdiction in the District of Delaware. The plaintiff asserted that PET was subject to jurisdiction through an alter ego theory because it had no real separate identify from Koba or that the association between Koba and PET “sound in . . . injustice or inequity.” Id. at 8-11. Judge Burke found, however, that there was “a notable lack of evidence from which the Court could” find alter ego liability. Id. at 10-11. Judge Burke therefore found that, “although the standard for [allowing] jurisdictional discovery is admittedly not high, [plaintiff’s] allegations fall short of the bar.” Id. As part of this analysis, Judge Burke rejected the argument that because Koba was the sole member of PET LLC, it subjected PET to jurisdiction, explaining that “Delaware law states that the presence in Delaware of a person with management authority over and out-of-state distinct jural entity will not itself subject that entity to jurisdiction unless ‘that presence is in connection with the affairs of the entity.’” Id. at 12-13.
Having found that PET should be dismissed for lack of personal jurisdiction, Judge Burke turned to whether there was subject matter jurisdiction over declaratory judgment claims against Koba. On this point, “it is not seriously disputed that there is no basis to find that a case or controversy exists (or could possibly exist) between [plaintiff] and Koba. The record is clear — according to facts asserted in FIS’s Complaint — that: (1) pursuant to the PTO’s records, PET (not Koba) is the assignee of the patents-in-suit; and (2) PET (not Koba) is the entity that has been attempting to license and enforce those patents. (D.I. 1 at iii! 13-14; see also Tr. at 94) As the assignee, PET alone has standing to sue for infringement of the patents; Koba would have no such standing. And so, there could be no actual or imminent injury to FIS caused by Koba that would give the Court declaratory judgment jurisdiction over any ‘rights and other legal relations’ that FIS might have with respect to Koba. It would be futile to argue otherwise. For these reasons, the Court also recommends that the Motion be granted as to Koba, pursuant to Rule 12(b)(l), due to a lack of subject matter jurisdiction.” Id. at 18-19.
On remand from the Federal Circuit, Judge Robinson is considering the case of an asserted patent that claims the function of silencing a ringing mobile phone by pressing a button on the phone without picking up the call. In considering summary judgment motions, Judge Robinson was faced with construing the term “an alert sound generator for generating an alert sound when the call is received from the remote caller,” and determining whether it uses means-plus-function language. Her Honor explained that “[i]n describing ‘the operation and the state transition’ of the call, the specification explains that ‘an alert sound’ is ‘generated.’ Accordingly, the limitation is defined by its function, i.e., a generator used to generate an alert sound. The court concludes that the limitation is subject to § 112, ¶ 6, with a function ‘generating the alert sound when the call is received from the remote caller’ and a structure ‘alert sound generator.’” Mobilemedia Ideas, LLC v. Apple Inc., C.A. No. 10-258-SLR, Memo. Op. at 10-11 (D. Del. Apr. 11, 2016). Judge Robinson further concluded that the claim at issue was not indefinite because “[c]onsistent with [an expert’s] opinion, the court concludes that those of skill in the art would recognize the structure in the specification and associate it with the corresponding functions of the claim.” Id. at 12-13.
In a recent Memorandum Order, Judge Sue L. Robinson denied defendant’s motion to transfer venue pursuant to 28 U.S.C. § 1404 to the Northern District of Alabama. Scientific Telecommunications, LLC v. ADTRAN, Inc., C.A. No. 15-647-SLR (D. Del. Apr. 25, 2016). As Judge Robinson noted, both parties are Delaware corporations. Id. at 1. In addition, according to defendant, “it employs over 2,000 people worldwide, including approximately 1,346 employees who work at or are based out of defendant’s operational and corporate headquarters in Huntsville, Alabama.” Id. Further, “[a]ll decisions regarding the design, development, and support of defendant’s accused products are made by its officers and employees located at its Huntsville, Alabama corporate headquarters,” and defendant’s “business records likewise are maintained at its corporate headquarters.” Id.
Judge Robinson recognized “defendant’s ties to the Northern District of Alabama” and that “defendant has asserted a counterclaim based on a non-disclosure agreement (‘NDA’) that must be interpreted under Alabama law.” Id. at 3. Nonetheless, Judge Robinson found that “defendant clearly operates on a global basis, and its incorporation in Delaware reflects its recognition that Delaware is an appropriate jurisdiction for resolution of commercial disputes through litigation.” Id. Judge Robinson explained that “[h]aving accepted the benefits of incorporation under the laws of the State of Delaware, ‘a company should not be successful in arguing that litigation’ in Delaware is ‘inconvenient,’ ‘absent some showing of a unique or unexpected burden.’” Id.
Judge Robinson acknowledged that “litigating in Delaware may be a more expensive exercise for defendant than litigating in Alabama.” Id. at 4. However, under the circumstances at bar, Judge Robinson “decline[d] to elevate the convenience of one party over the other.” Id. Judge Robinson thus denied transfer, noting that “[t]he record at bar does not reflect . . . that litigating in Delaware imposes a unique or unexpected burden on defendant, such that transfer is warranted.” Id.
In a recent Memorandum Order, Chief Judge Leonard P. Stark granted in part defendants’ (“AVX”) renewed motion for reconsideration of the Court’s January 5, 2016 rulings, which granted the following relief to plaintiff (“Greatbatch”): “(1) allowed Greatbatch to conduct post-trial discovery, (2) ordered AVX to produce a privilege log for all lngenio documents after trial, (3) vacated the Court’s prior grant of summary judgment of no willful infringement of [U.S. Patent No. 6,888,715 (“’715 patent”)], and (4) granted summary judgment that the Ingenio products infringe the ’715 patent.” Id. at 14-15. Greatbatch Ltd. v. AVX Corp., C.A. No 13-723-LPS (D. Del. Apr. 18, 2016) (public version published April 22, 2016). As Judge Stark explained, “[t]he relief granted in the Court’s January 5 Rulings was motivated in large part by (1) AVX’s late production of core technical documents less than two weeks before trial (AVX’s ‘December 29 Production’) and (2) AVX’s misrepresentation to the Court at the pretrial conference, which AVX later attempted to correct, in part, by way of AVX’s December 29 Production.” Id. at 15. Judge Stark also noted that “[c]rucially, the relief the Court granted in its January 5 Rulings was also the product of AVX’s repeated late production of core technical documents and the fact that just days remained before trial was scheduled to begin.” Id.
Judge Stark denied AVX’s renewed motion for reconsideration with respect to issues (1)-(3) listed above. Judge Stark did, however, grant AVX’s renewed motion for reconsideration with respect to the fourth issue, the court’s grant of summary judgment that the Ingenio products infringe the ’715 patent. See id. at 20. Judge Stark explained that upon consideration of the relevant factors the “appropriate sanction is not the dispositive sanction of summarily deciding the ’715 infringement issue against AVX.” Id. at 23. Rather, “the lesser sanction of depriving AVX of the opportunity to try damages and validity with respect to the ’715 patent at the same trial at which infringement of the ’715 patent is at issue, and instructing the jury determining damages to assume infringement of the ’715, more appropriately balances the multiple, competing interests implicated by a difficult situation of AVX’s making.” Id. Judge Stark further explained that “[t]he degree of prejudice that would have resulted to Greatbatch were it not for the relief granted would have been great. Yet the remedy the Court has arrived at adequately ameliorated that prejudice, by not requiring Greatbatch to divert its trial preparation as a result of AVX’s December 29 Production and by permitting Greatbatch to proceed to prove its damages case concerning the ’715 patent based on an assumption of infringement.” Id. at 24. Judge Stark concluded that “[o]n the whole, the Court regards this result as a less severe punishment than was imposed in connection with the January 5 Rulings but one that nonetheless avoids substantial unfairness to Greatbatch while serving to deter conduct similar to AVX’s by others in the future.” Id.
Judge Stark finally denied AVX’s request to reopen discovery with respect to damages. See id. at 25.
Judge Sue L. Robinson recently ruled on a defendant’s motion to dismiss for lack of personal jurisdiction or, in the alternative, to transfer to the Western District of Washington. Segway Inc., et al. v. Inventist, Inc., Civ. No. 15-808-SLR (D. Del. Apr. 25, 2016). Judge Robinson found that the defendant was subject to personal jurisdiction in Delaware under the “stream-of-commerce” or “dual jurisdiction” framework because (1) the defendant operated a website (including an online store) that broadly promoted the sale of its accused product, including in Delaware (where plaintiff representatives made three online purchases); (2) the defendant’s accused product was available to customers in Delaware through third parties Amazon.com and Brookstone.com; and (3) the defendant’s accused product was advertised as being available through national retail chains that maintain stores in Delaware. The Court found that these factors supported a finding of personal jurisdiction under the Delaware long-arm statute, and also a finding that an exercise of such jurisdiction would comport with due process.
With respect to the alternative motion to transfer the case to the Western District of Washington, Judge Robinson found that while Delaware was an appropriate forum under the Third Circuit’s Jumara standard, in this case transfer was warranted. The Court explained, “[a]lthough defendant clearly has global aspirations, those aspirations are more reflected in its promotional materials than its physical or fiscal presence in Delaware. At this moment, then, I am persuaded that defendant is accurately characterized as a regional enterprise for whom litigating in Delaware will impose an unreasonable burden.”
Judge Robinson recently considered evidentiary disputes in advance of trial. SRI Int’l Inc. v. Cisco Sys., Inc., C.A. No. 13-1534-SLR (D. Del. Apr. 22, 2016). Among other things, Judge Robinson denied Cisco’s request for its expert to provide a supplemental opinion to rebut plaintiff’s expert’s infringement opinion on the “based on the analysis of network data” limitation. In the Court’s view, such a request was an attempt to reargue claim construction. Id. at ¶ 2. Judge Robinson concluded that the request was based on Cisco’s expert’s failure to address plaintiff’s expert’s opinion in the alternative. Id. “Under the circumstances, I see no reason to allow Cisco to finally amend its position on the eve of trial with a supplemental expert report. The issue should be one of claim construction for purposes of appeal.” Id.
In Walker Digital, LLC v. Google, Inc., C.A. No. 11-318-LPS (D. Del. Apr. 12, 2016), Chief Judge Leonard P. Stark considered Defendant’s Motion for Review Taxation of Costs, where it had requested over $80K but had been awarded less than $3K by the Clerk of Court. Chief Judge Stark granted the motion, finding the award of costs for depositions, a technology tutorial, conversion to TIFF images in production, and obtaining hearing transcripts to be an appropriate exercise of the Court’s discretion.
As a threshold matter, the Court interpreted Local Rule 54.1 as allowing such a motion by the prevailing party in a case. Plaintiff argued it was procedurally improper as Defendant was not “the opposing party” to receiving costs, but the Court explained that Defendant “is the aggreived party with respect to the portion of the Clerk’s taxation decision to which [Defendant] has filed its motion. In this context, then, [Defendant] is ‘the opposing party’ with respect to the Clerk’s decision – even though [Defendant] is not, of course, ‘the opposing party’ with respect to [its] own Bill of Costs.” Id. at 5.
Also included in the decision is Chief Judge Stark’s discussion of the importance of Markman technology tutorials. Plaintiff had argued that Defendant’s costs related to the creation of its technology tutorial were not appropriate because Defendant had not identified how the tutorials had aided the Court. But Chief Judge Stark, in awarding the costs, observed that “[i]n almost every patent case, the undersigned judge requires the submission of technology tutorials as they aid this Court in understanding the technological context in which particular claim construction disputes must be resolved. In every case in which technology tutorials are ordered and submitted, the Court relies on them, just as it relies on the parties’ claim construction briefing.” Id. at 10.
Judge Noel L. Hillman of the United States District for the District of New Jersey, sitting by designation, recently granted Materia Inc.’s (“Materia”) motion to dismiss Evonik Degussa GmbH’s (“Evonik”) counterclaims for inequitable conduct. Evonik Degussa GmbH v. Materia, Inc., C.A. No. 09-636-NHL/JS (D. Del. Apr. 6, 2016). The Court had previously granted Evonik’s motion for partial summary judgment that it does not infringe Materia’s U.S. Patent No. 7,622,590 (“the ’590 Patent”). Id. at 1-2. Following the Court’s decision, Materia provided Evonik with a broad covenant not to sue (“CNS”) on the ’590 Patent. The parties agreed that the “the CNS moots Evonik’s counterclaim for invalidity.” Id. at 2. The specific question before the court was “whether following a partial summary judgment determination as to noninfringement, a CNS covering noninfringement, invalidity, and all future claims moots a counterclaim for inequitable conduct.” Id. at 3. After a review of the “evolving case law” on this topic, Judge Hillman concluded that “Materia’s CNS is sufficiently broad to remove any case or controversy regarding the ’590 Patent and therefore Evonik has failed to meet its burden of showing a substantial controversy exists as to the ’590 Patent.” Id. at 7. Judge Hillman agreed with Materia “that for all intents and purposes the CNS ‘kills the ’590 Patent vis-à-vis Evonik.’” Id. Accordingly, Judge Hillman dismissed the inequitable conduct counterclaims.