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As previously reported here, Judge Andrews granted a motion for attorneys’ fees and costs under Section 285 and the Supreme Court’s Octane Fitness decision. Judge Andrews ordered the parties to make further submissions of “supporting documentation necessary to justify their fees as well as a brief explanation of those documents.” Having received those submissions from the parties, Judge Andrews determined last week that the defendants were entitled to a substantial portion of the fees they sought. Chalumeau Power Sys. LLC v. Alcatel-Lucent USA Inc., et al., C.A. No. 11-1175-RGA, Memo. Or. at 1-4 (D. Del. Nov. 6, 2014). Under the Lodestar approach, Judge Andrews determined that the “forum rate” for the case “must be governed by the rate for Delaware intellectual property attorneys” and that the “limited exception to the forum rule cannot apply because a number of Delaware attorneys can, and do, capably litigate patent matters.” Id. at 3.

Judge Andrews therefore concluded that “attorneys’ fees and expenses should be governed by the prevailing Delaware market rates for patent litigation” and that the calculation should not be adjusted up or down because these prevailing market rates reflect the “specialized skill that patent litigators possess, as argued by Defendants.” Id. His Honor was “not convinced that Defendants have demonstrated that there is an exceptional circumstance with respect to the result obtained or the amount involved” sufficient to justify an adjustment, nor should the rates “be adjusted downward simply because Defendants did not win on a dispositive motion or at trial.” Id. at 3-4. Finally, Judge Andrews rejected the plaintiff’s argument that fees prior to the Court’s granting of Defendants’ motion to amend to assert a licensing defense were unnecessary: “Because the licensing agreement predates the litigation, and this Court determined the licensing defense was not untimely, it is not clear why the recovery should exclude fees and expenses from before [the Court’s determination]. Defendants had to litigate the case until they learned of the licensing defense. It makes no sense (and perhaps that is why the argument is limited to a footnote) to say that defending the case was not reasonably necessary.” Id. at 4.

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Judge Richard G. Andrews recently denied-in-part plaintiff CallWave Communications, LLC’s motion for leave to amend its complaints against defendants in a series of related cases.  CallWave Communications, LLC v. AT&T Inc., et al., C.A. Nos. 12-1701-RGA, 12-1702-RGA, 12-1704-RGA (D. Del. Nov. 5, 2014).  Previously, Judge Andrews granted Defendants’ motion to dismiss CallWave’s willfulness and indirect infringement claims.  In its motion to amend, CallWave sought to remove the portions of its complaints no longer relevant in light of Judge Andrews’ previous order, but also sought to add new factual allegations.  Id. at 3.  Judge Andrews granted CallWave’s motion to permit it to remove allegations related to willfulness and indirect infringement, but denied the motion as to the new factual allegations because the proposed amendments would be futile.  Id.  The proposed amendments related to a meeting between CallWave and defendant Google that, according to CallWave, would be relevant to Google’s pre-suit knowledge of the patents-in-suit.  Id. at 4.  Judge Andrews found that the new allegations “serve no purpose.”  Because the only claims “successfully pled” by CallWave relate to direct infringement, the new allegations relate to no existing claim and cannot “form the basis for CallWave successfully re-plead[ing] willful infringement against Google at some point in the future.”  Id.  

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In a recent Memorandum Opinion, Chief Judge Leonard P. Stark granted defendants’ motion to dismiss with respect to claim 1 of U.S. Patent No. 5,612,179 (“the ’179 patent”), after finding that claim to be directed toward a natural phenomenon, a category of unpatentable subject matter. Genetic Techs. Ltd. v. Bristol-Myers Squibb Co., C.A. No. 12-394-LPS (D. Del. Oct. 30, 2014). Judge Stark denied defendants’ motion to dismiss without prejudice to renew as the remaining asserted claims of the ’179 patent and the asserted claims of the other patent-in-suit, U.S. Patent No. 5,851,762 (“the ‘762 patent”).

While acknowledging that it was not precedential at the time of the Court’s decision, Judge Stark was nevertheless persuaded by the Federal Circuit’s decision in Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (Fed. Cir. 2013), which stated that “to grant dismissal of a patent infringement suit at the pleading stage for lack of patentable subject matter, ‘the only plausible reading of the patent must be that there is clear and convincing evidence of ineligibility.’” Id. at 6-7. Claim 1 of the ’179 patent was directed to a method of “amplifying and analyzing correlations between different regions of DNA sequence.” Id. at 10. Relying on the two-step framework set forth in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012), Judge Stark first determined that claim 1 recites a natural phenomenon, explaining that a “correlation that preexists in the human body is an unpatentable phenomenon.” Id. at 11. Next, Judge Stark considered whether there existed “additional steps in the claim . . . sufficient to satisfy patent eligibility.” Judge Stark found that the claim’s additional steps did not give rise to an “inventive concept” as to satisfy patent eligibility:

The asserted claim recites a series of steps to manifest the natural law – that is, to detect the natural correlations between coding and noncoding sequences. The added steps used to discern these correlations consist only of routine and conventional techniques. The patent specification states this outright, making this one of the (perhaps rare) occasions in which further factual development and claim construction are not necessary and invalidity can properly be determined at the 12(b)(6) stage.

 Id. at 13. Judge Stark therefore concluded that “the only plausible reading of claim 1 of the ’179 patent is that its additional steps, which consist only of routine and conventional techniques, fail to give rise to an ‘inventive concept,’ such that when, taken as a whole, the claim does not provide meaningful limitations that restrict the natural correlation to an application.” Id. at 14. Given the parties’ limited analysis in their briefing and during oral argument, Judge Stark stated that “the Court will require additional assistance from the parties to apply the foregoing analysis to the ’762 patent (and to the remaining claims of the ‘179 patent as well).” Id. at 20.

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In a recent decision, Judge Sue L. Robinson granted in part a defendant’s motion to dismiss claims relating to a “method of supplying in-room beverage service to a lodging establishment” using “a novel single-use, disposable brew basket for an electric coffee maker.”  Courtesy Prods., L.L.C. v. Hamilton Beach Brands, Inc., Civ. No. 13-2012-SLR (D. Del. Nov. 5, 2014).  The Court dismissed the plaintiff’s claim for direct infringement of an asserted method claim, finding that the plaintiff failed to allege that the defendant performed all steps of the method claim – i.e. that it “supplies its ‘system’ to lodging establishments or provided any factual information regarding the performance of the last three steps of the claim,”  which related to supplying individual hotel rooms with disposable brew baskets and filter packs.  The Court also dismissed the willful infringement claim, finding that the plaintiff  “offered no factual information to establish ‘awareness’ or ‘full knowledge’ of the patents-in-suit, sufficient to evidence pre-suit knowledge of the patents-in-suit.  Moreover, the complaint contains no facts establishing ‘objective recklessness of the infringement risk.’”  Id. at 10 (quoting Intellectual Ventures I LLC v. Toshiba Corp., 2014 WL 4365235 (D. Del. Sept. 3, 2014)).

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On Tuesday, the jury in Interdigital Communications, Inc., et al. v. ZTE Corporation, et al., C.A. No. 13-009-RGA (D. Del. Oct. 28, 2014) returned a verdict for the plaintiffs, finding all asserted claims of the three patents-in-suit infringed and not invalid.

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This week, the jury returned a verdict for plaintiff in Comcast IP Holdings I, LLC v. Sprint Communications Company L.P., et al., C.A. No. 12-205-RGA-CJB (D. Del. Oct. 15, 2014).  The jury found that plaintiff had proven infringement of all asserted claims and awarded $7.5 million in damages.

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Judge Gregory M. Sleet recently issued an opinion construing the disputed terms of U.S. Patent No. 5,980,940 (“the ’940 Patent”), entitled “Pharmaceutical Combination Preparation for Hormonal Contraception.” Bayer Intellectual Property GmbH et al. v. Warner Chilcott Co., LLC et al., C.A. No. 12-1032-GMS (D. Del. Oct. 9, 2014). As to the phrase “effective estrogen content,” defendants’ construction was founded on “the lowest level disclosed in a preferred embodiment, and requires ethinyl estradiol in an amount of at least 15 [micrograms] in the combined pill and at least 2 [micrograms] in the unopposed pill.” Id. at 2. Defendants argued that “given the patent’s objective to provide a daily estrogen content that was ‘as low as possible in each individual dosage unit,’ the inventors would have preferred and described lower respective doses if they believed that such estrogen content would be ‘effective.’” Id. Judge Sleet found, however, that “the subjective intent of the inventor when he used a particular term is of little or no probative weight in determining the scope of a claim,” and that “when a claim term is expressed in general descriptive words, [the court] will not ordinarily limit the term to a numerical range that may appear in the written description or in other claims.” Id. at 2. The Court thus found that the term “effective estrogen content” captures “pharmaceutical combinations with ethinyl estradiol levels below 15 [micrograms] in the combined pill and below 21 [micrograms] in the unopposed pill.” Id.

As to the disputed phrase “high contraceptive reliability, low incidence of follicular development, and satisfactory cycle control, with reliable avoidance of intracyclic menstrual bleeding and undesirable side-effects,” Judge Sleet found that the “disputed phrase should not be construed as a single term because it includes five distinct requirements that cover different oral contraceptive concepts/characteristics.” Id. at 3. However, Judge Sleet was ultimately unable to construe this disputed phrase. After rejecting both parties’ proposed constructions, Judge Sleet provided the following explanation:

The plain meaning of the claim language leaves the court with numerous questions, the answers to which are necessary to complete an infringement analysis regarding when the claim limitations are met. For example, how high must the contraceptive reliability be? What incidence of follicular development would be considered low? What constitutes satisfactory cycle control? And even more problematic are the reliable terms. What level of avoidance is necessary for intracyclic menstrual bleeding, and is it evaluated after the first 28 day administration cycle or after prolonged use? The uncertainty is compounded for side effects. The specification discusses various side effects ranging from headaches to cardiovascular disease. What constitutes an unacceptable avoidance of headaches is a thoroughly different question than what would constitute unacceptable avoidance of cardiovascular disease, yet the two are linked together in a single characteristic in the disputed phrase. Finally, even if the court did have individual standards against which the limitations are measured, the intrinsic record does not indicate what analytical tools or processes should be used to make the measurements.

 Id. at 7-8. Judge Sleet went on to further explain that “[t]he Supreme Court has recently held that the proper test for whether a patent is indefinite is ‘if its claims, read in light of the patent’s specification and prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.’” (citing Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, *6 (2014)). Judge Sleet concluded that “[t]he difficulty the court has encountered in construing the terms may unavoidably present an indefinite issue that will need to be addressed at summary judgment.” Id. at 8.

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In an open letter to Delaware counsel, Chief Judge Leonard P. Stark has provided clarification on the Court’s new 6 p.m. EST deadline for the filing and service of papers, which will become effective Thursday, October 16. Judge Stark explained that “the 6:00 p.m. Eastern Time deadline applies to every filing and service deadline in every case in the District of Delaware, other than initial pleadings.” Accordingly, “the 6:00 p.m. deadline applies to the exchange among parties of discovery requests and discovery responses, and it applies even if such requests or responses are made by hand delivery.”

Notably, Judge Stark also clarified that “[p]arties will not be permitted to alter the new deadline on a case-by-case basis.” To that end, Judge Stark further explained that “[w]hile each individual Judge retains the discretion to set a different deadline in a specific case with respect to a particular paper, the Judges of the Court agree that this discretion will be exercised rarely (most likely during trial).”

Judge Stark also noted that the new deadline does “not apply to proceedings pending in Bankruptcy Court,” but it “does, of course, apply to bankruptcy appeals and any other bankruptcy-related cases to the extent those cases are on the District Court’s docket.”

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In a recent Report and Recommendation, Magistrate Judge Christopher J. Burke construed the terms “multi-phase product,” “multiphase oral contraception product” and “phase” (collectively, the “phase terms”), in addition to the terms “daily dosage units” and “daily oral dosage units” (collectively, the “daily terms”) with respect to the only patent-in-suit, U.S. Patent No. 8,071,577 (the “’577 Patent”). Bayer Pharma AG v. Watson Laboratories, Inc., C.A. No. 12-1726-LPS-CJB (D. Del. Sept. 30, 2014). The patent-in-suit contains only three claims, each of which are independent. Defendant argued that claims 1 and 2 “are hybrid claims that recite both a product and a method of using that product at the same time” and should therefore be found indefinite as a matter of law. Id. at 8.

Addressing defendant’s indefiniteness argument, Judge Burke acknowledged that “a single patent may include claims directed to one or more of the classes of patentable subject matter, but no single claim may cover more than one subject matter class.” Id. at 9. In particular, such a “hybrid claim,” is indefinite because it is “not sufficiently precise to provide competitors with an accurate determination of the metes and bounds of protection involved and is ambiguous.” Id. at 10. Judge Burke explained, for example, that such indefinite hybrid claims may arise when the “claims describ[e] a system that also require[s] the user of the recited system to take specific action.” Id. at 12. On the other hand, an indefinite hybrid would not arise if the “claims contain[] language simply describing a system as well as the capabilities of the claimed system.” Id. Addressing the “phase terms” of claims 1 and 2, Judge Burke determined that the use of the term “phase” referred to “physical components of a claimed composition” rather than use of the composition. Id. at 25. Further, following a thorough analysis, Judge Burke concluded that “[t]he other intrinsic evidence . . . does not give the Court enough cause to alter that view.” Id. Judge Burke thus provided constructions for the “phase terms” consistent with these conclusions. Id. Turning to the “daily terms” Judge Burke concluded that “[f]or the same reasons as described above in reference to the ‘phase’ terms, the Court declines to construe these ‘daily’ terms so that they inject method steps into claims 1 and 2,” and adopted constructions for these terms consistent with that conclusion. Id. at 26. In support of that conclusion, Judge Burke explained that “none of the claim language in composition claims 1 or 2 explicitly requires that the drug be actually administered to a patient in a certain manner.” Id.

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In Graphic Properties Holdings, Inc. v. Asus Computer International, C.A. No. 13-864-LPS (D. Del. Sept. 29, 2014), Chief Judge Leonard P. Stark denied defendants ASUS Technology Pte Ltd. (“ASUS Singapore”) and ASUSTek Computer Inc.’s (“ASUS Taiwan”) (collectively the “Foreign Defendants”) motion to dismiss for lack of personal jurisdiction and improper venue. First, addressing the long-arm statute prong of the personal jurisdiction inquiry, Judge Stark resolved the issue of whether the Court would recognize a theory of “dual jurisdiction” (i.e., “stream of commerce”) based on “partial satisfaction” of subsections (1) and (4) of the Delaware long-arm statute, 10 Del. C. § 3104. Id. at 4-10. As Judge Stark explained, under a stream of commerce approach, jurisdiction exists when a “defendant displays ‘an intent to serve the Delaware market’ and ‘this intent results in the introduction of [a] product into the market and … plaintiffs cause of action arises from injuries caused by that product.’” Id. at 6. Because the Delaware Supreme Court has not provided an express opinion on this issue, Judge Stark’s role was limited to predicting how the Supreme Court would rule. Id. at 7. Considering that the (i) Delaware Supreme Court has refrained from rejecting the dual jurisdiction theory despite having several opportunities to do so; (ii) that “no Delaware state court has rejected the dual jurisdiction theory”; and (iii) that “Delaware’s long arm statute … is to be broadly construed to confer jurisdiction to the maximum extent possible under the Due Process Clause”, Judge Stark concluded the “Delaware Supreme Court, if faced with the issue, would hold that the ‘stream-of-commerce’ theory does provide a basis for personal jurisdiction under Delaware law, even though the theory is not expressly authorized by Delaware’s long-arm statute.” Id. at 8-9. Judge Stark reached this conclusion notwithstanding the fact that a fellow Judge of the Court reached a “contrary, and not unreasonable” conclusion regarding the stream of commerce theory. Id. at 6-7, 9 (citing Round Rock Research LLC v. ASUSTeK Computer Inc., 967 F. Supp. 2d 969 (D. Del. 2013)).

Applying the stream of commerce theory, Judge Stark explained that “[a] non-resident firm’s intent to serve the United States market is sufficient to establish an intent to serve the Delaware market, unless there is evidence that the firm intended to exclude from its marketing and distribution efforts some portion of the country that includes Delaware.” Id. at 9. In the instant matter, Judge Stark found evidence that the Foreign Defendants not only targeted the United States generally by selling to ASUS Computer International (“ASUS California”) in California, but that they also targeted Delaware specifically given that “there are least three physical resale outlets (Best Buy stores) inside Delaware that stock and sell the accused devices.” Id. at 10. Accordingly, Judge Stark found the long-arm statute prong satisfied.

Judge Stark also found the constitutional due process prong of the personal jurisdiction inquiry satisfied given that the “Foreign Defendants,by way of ASUS California, purposefully ship the accused devices into Delaware through established distribution channels such as Best Buy” and therefore “purposefully avail [themselves] of the privilege of conducting activities within [Delaware], thus invoking the benefits and protections of its laws.” Id. at 12-13.

While denying the motion to dismiss as of the date of the opinion, Judge Stark agreed with the Foreign Defendants’ assertion that “plaintiff only provided facts showing sales of accused devices in Delaware five months after the filing of the Complaint.” Id. at 14. Because a court “cannot base jurisdiction on events that occurred after the filing of [the] complaint” in view of the “arising under” language of Delaware’s long-arm statute, Judge Stark found that the Foreign Defendants will be required to show “[f]acts that the accused devices were on sale in Delaware prior to the filing of this suit” in order for the Court to sustain jurisdiction over the Foreign Defendants. Id. at 13-14. Judge Stark noted that the Court will be “prepared to reevaluate whether it can properly exercise jurisdiction over the Foreign Defendants as the case proceeds.” Id. at 14.

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