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Chief Judge Leonard P. Stark recently considered Defendants motion to dismiss Robert Bosch LLC’s patent infringement claims for lack of personal jurisdiction.  Robert Bosch LLC v. Alberee Products, Inc., et al., C.A. No. 12-574-LPS (D. Del. Sept. 29, 2014).  Two of the three Defendants are Maryland corporations and the third, API, is a Korean corporation.  Id. at 1.  In its complaint, Bosch alleged that API manufactures windshield wiper blade components in Korea and sells them to companies in the United States, including the Maryland Defendants.  Id. at 3.   Bosch further alleged that the Defendants then worked together from Maryland to assemble the wiper blades to market and sell in the United States.  Id.  Plaintiff pointed to no evidence that Defendants have offices, employees, bank accounts, or property in Delaware; travel to or manufacture anything in Delaware; or otherwise have transacted business or directly sold products in Delaware.  Id. at 4.

Bosch did not allege jurisdiction under any one prong of Delaware’s long arm statute, 10 Del. C. § 3104, but that jurisdiction existed “under a ‘dual jurisdiction’ or ‘stream of commerce’ theory.  Id. at 7.  The concept of dual jurisdiction relates to the situation in which a defendant has sufficient general contacts with Delaware and the plaintiff’s claims arise from those contacts.  Id. at 7-8 (citing LaNuova D & B, S.p.A. v. Bowe Co., 513 A.2d 764 (Del. 1986); Wright v. Am. Home Products Corp., 768 A.2d 518 (Del. Super. 2000); Boone v. Oy Partek Ab, 724 A.2d 1150 (Del. Super. 1997)).  Applying the LaNuova, Wright and Boone cases, this Court has held that “‘[t]he dual jurisdiction concept arises from at least partial satisfaction of subsections (1) and (4) of the Delaware long-arm statute . . . . Dual jurisdiction may be established when a manufacturer has sufficient general contacts with Delaware and the plaintiffs’ claims arise out of those contacts.”‘  Id. at 8 (quoting Belden Techs., Inc. v. LS Corp., 829 F. Supp. 2d 260, 267 (D. Del. 2010)).  Jurisdiction would exist if a defendant intended to serve the Delaware market, resulting in a product entering the market; and the plaintiff’s claim arose from injuries caused by this product.  Id. at 8-9.  Judge Stark noted that another Judge in this District recently concluded that the Delaware Supreme Court would not likely “embrace” the theory of dual jurisdiction, Id. at 9., but Judge Stark disagreed finding that “[t]he Delaware Supreme Court has had several opportunities to reject the dual jurisdiction theory but has refrained from doing so.”  Id. at 10-11.

Judge Stark then turned to whether the Defendants here are subject to jurisdiction under the “dual jurisdiction” theory.  Based on Bosch’s allegations, the only question was “whether any or all of Defendants’ actions in placing wiper blades or wiper blade components into the stream of commerce – where those wiper blades and/or wiper blade components end up allegedly causing injury in Delaware (through the sale of the Goodyear Assurance product at Costco) – are sufficient to satisfy the dual jurisdiction theory.”  Id. at 12.  Regarding the Maryland Defendants, Judge Stark found that because they sell the accused wiper blades to nationwide reseller Costco, with locations in Delaware, Defendants “presumptively intend[] to target the Delaware market.”  Id. at 16.  This intent resulted in the introduction of the accused blades in Delaware, and Bosch’s claims arose from injuries caused by those blades.  Id.  Judge Stark also found that a finding of personal jurisdiction comported with Due Process.  Id. at 16-17.  Regarding API, the Korean Defendant, Judge Stark determined that Bosch did not point to any evidence of an agency relationship between API and the Maryland Defendants, nor did Bosch satisfy the requirements of the dual jurisdiction theory.  Id. at 19-20.  Judge Stark did, however, grant Bosch leave to conduct jurisdictional discovery focused on “the relationship among API [and the Maryland Defendants], and the distribution and sale of the accused products in Delaware and throughout the United States.”  Id. at 21-23.

 

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Judge Gregory M. Sleet recently granted a defendant’s motion for attorneys’ fees, finding that the totality of the circumstances warranted characterizing the case as exceptional under 35 U.S.C. § 285 and Octane FitnessSummit Data Sys., LLC v. EMC Corp., et al., C.A. No. 10-749-GMS (D. Del. Sept. 25, 2014).  The plaintiff, Summit, had alleged induced infringement against the sole remaining defendant, NetApp, whose end-user customers were alleged to directly infringe by using NetApp products with Microsoft software.  However, just months prior to filing its complaint, Summit had licensed the asserted patents (indirectly, through a patent aggregator) to Microsoft, meaning that no end-user could directly infringe the asserted patents.  Summit did not disclose the existence of this license agreement until more than a year and a half after filing suit, and soon thereafter agreed to dismiss the lawsuit.

As the Court explained, Summit “forfeited its right to pursue [its induced infringement theory] against NetApp when it entered into the Licensing Agreement . . ., which provided Microsoft with a license to the asserted patents.”  Id. at 6.  The Court rejected Summit’s arguments that NetApp carried the burden of proving a license or patent exhaustion defense, and that Summit could reasonably assume NetApp induced infringement through some other, non-Microsoft-based configuration:  “For over two years, Summit proceeded on an infringement theory that rested on Microsoft’s software being a necessary component.  Summit cannot rely on reasonable assumptions and guesses that NetApp infringes the asserted patents in one way or another.  And NetApp need not establish an affirmative defense when Summit’s sole theory of infringement was unfounded.”  Id. at 7.

The Court added that “Summit’s practice of extracting settlements worth a fraction of what the case would cost to litigate supports a finding of exceptionality.”  Id.  In this case, Summit had settled with a number of other co-defendants for amounts ranging from $60,000 to $170,000.  Id. at 3.  The Court explained that the “Federal Circuit has looked to ‘nuisance value settlements’ to determine whether a case is exceptional.”  Id. at 8 (quoting Eon-Net LP v. Flagstar Bancorp, 653 F.2d 1314, 1327-28 (Fed. Cir. 2011)).  In light of this, and the license issue, the Court found that the totality of the circumstances supported a finding that the case was exceptional.

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In a recent Memorandum Order, Chief Judge Leonard P. Stark denied plaintiffs’ motion for judgment on the pleadings regarding defendant’s patent-misuse defense, and also denied plaintiffs’ motion for leave to file a motion for summary judgment on the same defense. Intellectual Ventures I LLC v. Symantec Corp., C.A. No. 13-440-LPS (D. Del. Sept. 24, 2014).

First, given that defendant raised patent misuse as an affirmative defense rather than a claim or counterclaim, Judge Stark determined that plaintiffs’ motion for judgment on the pleadings should be treated as motion to strike under Fed. R. Civ. P. 12(f), rather than a motion pursuant to Fed. R. Civ. P. 12(c) as plaintiffs had contended. Id. at 2-3. Judge Stark noted that “[a] majority of the District Courts within the Third Circuit that have addressed the issue have determined that the pleading requirements of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), do not apply to the pleading of affirmative defenses.” Id. at 2. Defendant alleged that plaintiffs engaged in patent misuse by “tying the ‘wanted’ patents-in-suit with a large and undisclosed number of ‘unwanted’ patents,” collecting royalties from invalid patents, and “creating and maintaining an unlawful monopoly.” Id. at 6-9. Because Judge Stark could rely only on the pleadings, and because defendant’s affirmative defense required “additional information” or otherwise implicated “legal and factual” questions that the Court could not resolve at this stage of the case, plaintiffs’ motion to strike was denied. Id.

Turning to plaintiff’s motion for leave to file a motion for summary judgment on the patent misuse defense, Judge Stark noted that plaintiffs’ motion focused on defendant “tying the patents-in-suit to irrelevant and unwanted patents in package licenses.” Id. at 9. Judge Stark explained that because there was a “factual dispute as to whether [plaintiffs] improperly tied licensing the patents-in-suit in this case with unrelated patents, this issue does not appear to be amenable to resolution on summary judgment.” Id. at 8-9. Further, citing to the Court’s scheduling order setting the date for case-dispositive motions, Judge Stark noted that “[m]ore importantly, the Court perceives no persuasive reason to permit a motion for summary judgment on this one issue at this time.” Id. at 9.

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In Intellectual Ventures I LLC, et al. v. AT&T Mobility LLC, et al., C.A. No. 13-1668-LPS and its related actions (D. Del. Sept. 24, 2014), Chief Judge Leonard P. Stark denied defendants’ motions to dismiss with respect to willful infringement and lack of standing, but denied the latter without prejudice.

As to willfulness (directed to only one of the related defendants), plaintiffs alleged that this defendant had knowledge of certain patents-in-suit once it brought these patents to the attention of the examiner during the prosecution of its own patents.  Id. at 4.  Furthermore, the complaint alleged willful blindness: that the defendant ignored the risks of patent infringement as a matter of corporate policy as it had no policy in place to obtain rights from patent holders.  Id. at 5.  The Court found that these allegations were sufficient to survive dismissal.  Id.

As to standing, the Court denied this motion as “[t]he parties have not provided the Court with a copy of the full agreement transferring patent rights to [plaintiffs].”  Id. at 6.  In light of the Court’s recent opinion in Clouding IP, LLC v. Google Inc., it highlighted “the importance of examining the full agreement when assessing whether a plaintiff has been transferred ‘all substantial rights’ in a patent.”  Id. at 5-6.  Therefore the Court denied the motion without prejudice; defendants could move again if the parties provided the “complete assignment agreements and amendments.”  Id. at 6.

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In a recent order, Judge Richard Andrews granted a motion in limine to exclude at trial evidence of the PTAB’s denial of an inter partes review petition of a patent-in-suit. Judge Andrews explained that evidence of the IPR petition was inadmissible under Rule 403 because it was “of marginal relevance, . . . the probative value is greatly outweighed by the expenditure of time that would be required to give the jury the full context necessary to fairly evaluate the evidence . . . [and] because of the complexity involved in giving the full context, there would also be a significant risk of confusion of the issues.” Interdigital Commc’ns Inc., et al. v. Nokia Corp., et al., C.A. No. 13-10-RGA, Order at 1-2 (D. Del. Sept. 19, 2014).

Judge Andrews explained his reasoning: “I agree that the . . . IPR denial is a final decision. I do not agree that it is a decision on the merits, any more so than a grant of an IPR is a decision on the merits. It is akin to a ruling on a preliminary injunction, where the merits are assessed with less than a full record and with less than a full adversarial proceeding.” Id. at 1. Furthermore, although the IPR denial is part of the prosecution history, “it is a relatively unique part of the prosecution history. First, a patent examiner cannot allow a patent to issue saying there is a reasonable likelihood that it is not obvious . . . [instead] [t]he patent examiner has to come to a conclusion that it is not obvious, or not allow the issuance of the patent. Second, the patent examiner is a person of ordinary skill in the art, whereas the IPR decisions are made by lawyers who are not persons of ordinary skill in the art.” Id. Judge Andrews did, however, allow the defendants to “truthfully state [to the jury] that the PTO did not have [IPR] reference before issuing the patent.” Id. at 2 n.1.

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Judge Sue L. Robinson recently denied a defendant’s motion to supplement an invalidity expert report to include newly discovered prior art.  Round Rock Research, LLC v. Sandisk Corp., Civ. No. 12-569-SLR (D. Del. Sept. 24, 2014).  The newly discovered prior art was “a reference that has always been (perhaps to the exclusion of others) in the possession, custody, and control of” the defendant, but its relevance was only discovered by the defendant after the plaintiff’s infringement report was served.  The plaintiff complained that it would need substantial discovery into this prior art reference if the defendant was permitted to supplement.  The Court agreed, and explained “[g]iven the extensive discovery in which these parties have engaged, there comes a time to close the record.  I conclude that this is the time.”

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Judge Richard G. Andrews recently ordered a plaintiff to reduce the number of claim terms it was asserting from 52 to 32 by the filing of its opening claim construction brief, finding that there would be little or no prejudice associated with such a reduction.  EMC Corp. v. Pure Storage Inc., C.A. No. 13-1985-RGA (D. Del. Sept. 19, 2014).  Judge Andrews denied a request for an extension of page limits for claim construction briefing, however, but explained: “I find that having Plaintiff open the briefing with arguments for plain meaning is generally not very helpful.  Thus, Plaintiff need only brief in its opening brief those terms for which it proposes a construction.  Of course, Plaintiff will need to respond in its reply brief if Defendant proposes constructions for terms that the Plaintiff believes should be given their plain meaning.”  Finally, the Court indicated that regardless of the number of claim terms the parties’ briefed, the Court would permit oral argument on no more than 10 terms.

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Judge Sue L. Robinson recently granted Defendant Carrier Corp.’s motion to dismiss Plaintiff Goodman Mfg. Co.’s complaint seeking declaratory judgment of inequitable conduct relating to Carrier Corp.’s U.S. Patent Nos. 7,243,004 and 7,775,452.  Goodman Mfg. Co. v. Carrier Corp., C.A. No. 13-2014-SLR (D. Del. Sept. 23, 2014).  This declaratory judgment action was filed after Carrier sued Goodman for infringing the same patents, and on the same day Goodman sought leave to amend its answers to assert inequitable conduct in Carrier’s patent infringement action.  Id. at ¶ 2.  The court subsequently denied Goodman’s motion to amend its answers.  Id.

Judge Robinson found that Goodman’s declaratory judgment claim of inequitable conduct is a compulsory counterclaim because it “arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.”  Id. at ¶¶  3-5.  The Court noted that Goodman made the same arguments in this case that it made to the Court in the Carrier case in support of its motion to amend its answer to add inequitable conduct claims.  Id. at ¶ 5.  “Goodman may not circumvent the court’s denial of its motion for leave to amend by filing a separate action for the same claims.”  Id.  Judge Robinson also found that the court did not have subject matter jurisdiction over Goodman’s declaratory judgment counterclaim as to the ‘452 patent because the parties previously stipulated to dismiss their infringement and invalidity claims as to that patent.  “Without a corresponding infringement case, under a ‘totality of the circumstances’ review, there are insufficient facts to show the existence of an actual controversy between the parties as to the ‘452 patent.”  Id.  at ¶ 9.

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In L’Oréal S.A. v. MSD Consumer Care, Inc., C.A. No. 12-99-GMS (D. Del. Sept. 19, 2014), Judge Gregory M. Sleet addressed defendant’s motion for leave to amend its answer with affirmative defenses and counterclaims. The motion was filed following the deadline to amend the pleadings, and defendant was therefore required to show “good cause.” Id. at 1 (citing Fed. R. Civ. P. 16(c)(b)(4)).

Judge Sleet granted defendant’s motion for leave to amend to include claims of inequitable conduct. Judge Sleet was “not convinced” that “defendant needlessly delayed or that the plaintiffs will be unduly burdened by the addition of these allegations.” Specifically, the close of fact discovery was on January 31, 2014, and defendant filed its motion of February 6, 2014. Judge Sleet explained that “defendant was diligent in filing its motion for leave to amend to include allegations of inequitable conduct, and that the plaintiffs have failed to argue that any prejudice would result.” Id. at 2. Judge Sleet did, however, deny defendant’s motion for leave to amend to include new counterclaims for invalidity and non-infringement. Judge Sleet explained that “[d]espite having previously included these claims as affirmative defenses, the defendant provides no justification for why these counterclaims were not or could not have been included within the time limits of the original scheduling order.” Id. at 3.

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Judge Gregory M. Sleet recently denied defendant’s motion to stay pending reexamination.  A.L.M. Holding Co., et al. v. Akzo Nobel Surface Chemistry LLC, C.A. No. 13-1069-GMS (D. Del. Sept. 16, 2014).  Judge Sleet considered three factors when deciding the stay motion:  (1) undue prejudice or tactical disadvantage to non-moving party, (2) simplification of issues, and (3) stage of case.  Id. 2 n.1.  Judge Sleet noted that undue prejudice requires more than “the mere possibility of delay.”  Id.  Judge Sleet determined that defendant appeared to have timely filed the request for ex parte reexamination, but that evidence suggested a stay might prejudice plaintiff’s product sales over the course of “what is likely to be a lengthy delay[.]”  Id.  This factor weighed against a stay.  Regarding simplification of issues, Judge Sleet noted that no matter the outcome, the results of the reexamination will “simplify issues before the court,” which weighed in favor a stay.  Id.  But, the last factor, stage of the case, tipped the scales against a stay because the case had “proceeded sufficiently far enough,” such that a claim construction hearing was scheduled for September 29, 2014 and trial was scheduled for July 2015.  Id.

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