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Intellectual Ventures I, LLC, et al. v. Toshiba Corporation, C.A. No. 13-453-SLR-SRF (D. Del. Dec. 9, 2015), Judge Sue L. Robinson ordered that the stay of Defendant’s antitrust counterclaims remain in place until the patent claims in the case were resolved, “consistent with [Judge Robinson’s] normal practice.” Id. at 1. The Court concluded that “the crux of [Defendant’s] antitrust theories is the ‘poor quality’ of plaintiffs’ patents. . . . So long as [Defendant] relies on the ‘quality’ of the patent portfolio rather than its numerosity and the way it’s asserted . . . Defendant [had] not assuaged the concerns [the Court had] previously identified” with regard to not staying the antitrust claims. See D.I. 96 (March 20, 2015 order granting motion to stay antitrust counterclaims as to those that involve the validity of Plaintiffs’ patent portfolio, but denying motion to the extent the counterclaims relied on “the numerosity and value (i.e., presuming validity) of [Plaintiffs’] patent portfolio” ).

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In Verisign, Inc. v. XYZ.com, LLC, et al., C.A. No. 15-mc-175-RGA-MPT (D. Del. Dec. 4, 2015), Chief Magistrate Judge Mary Pat Thynge considered a motion to quash subpoenas. The plaintiff in a false advertising action in the Eastern District of Virginia had served subpoenas on two non-parties, requesting documents related to the sale of a top-level domain name to defendants, agreements and communications related to this domain name and the plaintiff, and communications referencing other domain names. See id. at 3 (listing requested categories of documents).

The Court first found that defendants did have standing to challenge the subpoena, where the non-parties had not objected to the subpoena, explaining that while “[c]ourts have held that parties . . . do not have standing to a subpoena if they are not the target of the subpoena . . . other courts have found that parties who claim privilege or a personal right in the subpoenaed information from a nonparty have standing to object.” Id. at 4-5. Here, defendants alleged that the subpoenas requested “documents between defendants and KBE, who has worked closely with defendants on business transactions, and require the nonparties to disclose confidential information and trade secrets. These representations demonstrate sufficient interest in the requested documents to determine defendants’ standing.” Id. at 5.

The Court also concluded that plaintiff had not provided a reasonable time for response to the subpoenas. Although the non-parties had agreed to a short production turnaround period (five days from service), “the time allotted for compliance was unreasonable and effectively gave defendants one business day [due to holidays] and a total of five days to seek protection of documents, in which they had a sufficient interest.” Id. at 6.

Ultimately, the Court did order production of the subpoenaed documents over defendants’ objections that the requested information was irrelevant to the case in Virginia, that the documents could have been sought through defendants, and that the subpoenas requested proprietary information from whose production defendants would suffer irreparable harm. The Court did observe that it “question[ed] plaintiff’s need to subpoena [certain requested categories] when production of these documents was potentially obtainable from defendants. If any issue arose regarding such production, it then could have been addressed by the court having more familiarity with the underlying matter. To address defendants’ concerns, however, production of the above categories is ordered under the ‘Attorney’s Eyes Only’ designation provided for in the protective order [in the underlying action]. [However], as [one category of] requested documents, the court [found] there was no evidence that these documents contain trade secrets or confidential information of defendants.”  Id. at 11.

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In a recent memorandum order, Judge Christopher J. Burke denied a defendant’s motion to partially stay a case involving several asserted patents pending the conclusion of the appeal to the Federal Circuit of the PTAB’s decision regarding one of the asserted patents.  LG Electronics, Inc. v. Toshiba Samsung Storage Technology Korea Corp., C.A. No. 12-1063-LPS-CJB (D. Del. Dec. 11, 2015).  The result of the IPR was a finding that the plaintiff’s patent was unpatentable as anticipated and obvious.  The plaintiff appealed that finding and briefing is scheduled to be completed in February 2016.  In denying the defendant’s motion to stay pending the outcome of that appeal, Judge Burke’s decision was motivated primarily by the “undue prejudice” factor of the stay analysis.  The Court noted that although a case schedule had been set only recently, the case was filed in August 2012, more than three years ago, and the case was delayed due to motion practice by the defendant.  Judge Burke explained that “[i]n a vacuum, it does not seem long to wait for another six or seven months for the appeal to conclude before moving forward . . . .  But this case cannot be viewed in a vacuum.  Instead, it must be viewed in its actual context.  . . . [D]elaying the action (in part) by many more months—in addition to the real delay LG has already experienced—is problematic.”

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In a recent Order, Judge Richard G. Andrews denied defendants’ motions to dismiss in three related actions. Blackbird Tech LLC v. LEDWholesalers.com Inc. et al., C.A. Nos. 15-60, 15-61, 15-63-RGA (D. Del. Dec. 3, 2015). As Judge Andrews explained, “[t]he main thrust of the motions is to assert that the complaints do not plausibly assert infringement, because they attach a copy of the patent and web shots of the accused products (which appear to be T8 LED tube lights), and it is clear that the pictured products cannot infringe any claim of the asserted patent.” Id. at 1-2. The parties disputed the meaning of certain claim terms, but Judge Andrews found that the “the terminology of the patent claim (while perhaps clear to a POSITA) is not presently clear to me,” and observed this action “seems like a poor candidate for resolution on a motion to dismiss.” Judge Andrew thus denied the motions to dismiss. Id. at 2.

However, Judge Andrews explained that “I am nevertheless concerned about whether I am allowing what might be frivolous litigation to go forward.” Id. at 2. Judge Andrews therefore directed plaintiff “to provide detailed claim charts to each of the three Defendants charting its infringement theories for all asserted claims against at least one of each Defendant’s accused T8 LED tube lights.” Id. at 3. Judge Andrews further directed “[t]he parties . . . to meet-and-confer after the claim charts are filed,” explaining that the parties should discuss, among other things, “whether they can jointly agree upon a way to present the case to me for early resolution.” Id. Judge Andrews ordered the parties to submit a joint status report three business days before the Rule 16 scheduling conference “regarding any agreements or proposals for a means for early resolution of these cases.” Id.

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Chief Judge Stark recently denied a motion to stay patent litigation while the defendant pursues an appeal of the PTAB’s decision not to institute inter partes review of the sole asserted claim of the patent-in-suit. Of the factors typically considered in the stay analysis, Judge Stark found that each weighed against a stay. Greatbatch Ltd. v. AVX Corp., et al., C.A. No. 13-723-LPS, Memo. Or. at 1 (D. Del. Dec. 10, 2015).

First, “the Court note[d] that Defendants filed their petition for IPR on the last day permitted by statute. Moreover, Defendants delayed moving for a stay until after completion of discovery, after completion of the parties’ briefing for summary judgment and Daubert motions, almost a year after the PT AB instituted IPR, and less than two months before the pre-trial conference. While delay, by itself, is insufficient to find undue prejudice, here Defendants’ delay in combination with the parties’ status as competitors (or potential competitors) persuade that Court that this first factor weighs against a stay.” Id. at 2.

Second, “the IPR was not instituted as to claim 12, and the PTAB’s final written decision did not directly address claim 12. Any appeal from the PTAB’s decision will also not directly address claim 12. . . . Because the Court already has the benefit of the PT AB’ s final written decision, and because any forthcoming insight regarding the validity of claim 12 from the Federal Circuit or reissue proceedings is wholly speculative at this point, the Court determines that this factor weighs against a stay.” Id. at 3.

Finally, “the Court notes that discovery is complete, the Court has construed the disputed claim terms and ruled on the parties’ multitude of motions, the pretrial conference is less than two weeks away, and a jury trial (which has been on the schedule since April 2014) begins in a month (January 11, 2016).” Id. Moreover, “[t]he discovery process involved at least five discovery teleconferences, an indication of the vast amount of party and judicial resources that have been expended on this litigation, factors that in the overall balancing here – favor staying on course and proceeding to trial on all of the remaining patents-in-suit.” Id. at 3 n.3.

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Magistrate Judge Christopher J. Burke recently denied without prejudice a motion to stay pending the PTAB’s resolution of petitions for inter partes review in Toshiba Samsung Storage Technology Korea Corp. v. LG Electronics, Inc., et al., C.A. No. 15-691-LPS-CJB (D. Del. Dec. 3, 2015).  The Court explained that the PTAB decision is expected to issue in early February, and (as of the date of this decision) a scheduling order in the case had not been entered.  As a result, Judge Burke found that the amount of initial discovery disclosures and other case activity likely to occur before the PTAB’s decision was not significant enough to unduly prejudice the defendants.  Judge Burke also found that allowing the case to proceed would allow for a more fully developed record for the Court’s consideration of a motion to stay in the event that the PTAB granted the IPR petitions.  The plaintiff had also “repeatedly stated that it anticipates asserting [in this case] claims of [its] Patents-in-Suit that are not covered by LG’s IPR petitions,” and Judge Burke explained that these claims not potentially subject to IPR “could have an impact on the ‘simplification’ analysis.”  Finally, Judge Burke’s decision took into account Chief Judge Stark’s Revised Procedures for Managing Patent Cases, as well as a recent decision by the Chief Judge, which explained that “[g]enerally, the ‘simplification’ issues does not cut in favor of granting a stay prior to the time the PTAB decides whether to grant the petition for inter partes review.”

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Chief Judge Leonard P. Stark recently issued a Memorandum Opinion adopting the Magistrate Judge’s Report and Recommendation on claim construction and denying defendants’ requests for summary judgment on indefiniteness post-Nautilus.  Masimo Corporation v. Philips Electronics North America Corporation, et al., C.A. No. 09-80-LPS (D. Del. Dec. 1, 2015).  First, defendants argued that the term “said scan” was indefinite because, due to a drafting error, the claim contained no antecedent basis for “said scan.”  Id. at 9.   Masimo argued that “the error [could] be corrected and that, even absent correction, a person having ordinary skill in the art would understand ‘said scan’ to refer to the result of the analysis module.”  Id.  The Court agreed with defendants that the Court cannot fix the drafting error.  But, the Court also found that the error does not render the term indefinite:

The prosecution history makes clear that Plaintiffs amendment did not seek to substantially change the scope of the claim. Indeed, the ‘”scan module” in the original claim has the same functionality as the “analysis module” in the amended claim. Given the identical claim structure and the context of the amendment, the Court concludes that a person having ordinary skill in the art would understand that “said scan” means “the analysis to qualify the plurality of indication values to be considered as possible resulting indications for the physiological parameter. “

Id. at 11.

Defendants also argued that the term “determine a resulting indication that likely most closely correlates to the physiological parameter” was indefinite.  Id. at 12.  The Court disagreed:

The specification explains how to calculate two estimates of the physiological parameter (saturation values) and teaches how the invention uses the two estimates to arrive at a resulting indication. Plaintiff has also submitted an expert declaration, which further supports its position, and which (at minimum) shows a genuine dispute of material fact preventing the Court from granting summary judgment of invalidity due to indefiniteness.

Id.

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Chief Magistrate Judge Thynge recently issued a report and recommendation in which she recommended denial of plaintiffs Astellas Pharma and Celgene Corp.’s motions to dismiss and motions to strike counterclaims, each of which she found to have been adequately plead. The challenged counterclaims and defenses were directed to (1) an improper continuation application under § 102(b) without which, the defendant alleged, the patents-in-suit would not have issued, (2) an improper priority date under § 120 due to failure to name the “true inventors” in the earlier application and an effort to amend inventorship that would result in no common inventors, and (3) improper inventorship under § 256 because the original patent was disclaimed under § 253 before any effort to correct inventorship, which Judge Thynge found to involve “sufficient facts to support improper inventorship, which warrants discovery on this issue.” Celgene Corp., et al. v. Fresenius Kabi USA, LLC, C.A. No. 14-571-RGA, Report and Recommendation at 6-8 (D. Del. Dec. 7, 2015).

Judge Thynge also rejected challenges to the defendant’s corresponding affirmative defenses, which were “neither improperly plead nor redundant. Affirmative defenses differ from counterclaims and are governed by Fed. R. Civ. P. 8, rather than Rule 13. Generally affirmative defenses must be initially pled or be subject to waiver of the defense. A counterclaim is governed by Rule 13. The party raising either an affirmative defense or a counterclaim bears the burden of proof. Counterclaims and affirmative defenses that raise the similar contentions are not improper.” Id. at 8. Additionally, because “[m]otions to strike under Rule 12(f) require a showing of prejudice” and the plaintiffs had not “alleged nor demonstrated any prejudice due to the analogous nature between defendants’ counterclaims and affirmative defenses,” Rule 12 provided no basis to strike the affirmative defenses. Id.

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Judge Christopher J. Burke recently issued a recommendation that a plaintiff’s complaint alleging direct and willful infringement be dismissed, without prejudice.  Mayne Pharma Int’l Pty Ltd. v. Merck & Co., Inc., et al., C.A. No. 15-438-LPS-CJB (D. Del. Dec. 3, 2015).  Reviewing the allegations against Form 18 (because defendant did not argue that Twombly/Iqbal applied under the amendments to the Federal Rules that took effect on December 1), Judge Burke found that the complaint adequately alleged infringement against the two U.S. defendants.  However, Judge Burke found that the allegation that a third (and non-U.S.) defendant manufactured and “injected” the infringing products “into the stream of commerce with knowledge that those products will be sold throughout the United States” was insufficient, since it was not clear from the allegations that the non-U.S. defendant actually imported the accused products into the U.S.  Judge Burke also “easily” found that the willfulness allegations were insufficient, because there were no facts supporting a willfulness claim.  Rather, the plaintiff simply alleged that “[u]pon information and belief, Defendants infringement has been with knowledge of the ’745 patent and has been willful.”

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In Arcelormittal France v. AK Steel Corp., et al., C.A. Nos. 10-050, 13-865-SLR (D. Del. Dec. 4, 2015), Judge Sue L. Robinson granted defendants’ motion for summary judgment of no infringement and invalidity, and denied plaintiffs’ motion to dismiss for lack of subject matter jurisdiction in C.A. No. 10-050. As Judge Robinson noted, “[t]he above captioned litigation has a convoluted procedural history.” Id. at 2 (full procedural history summarized on pages 2-5). Following a jury verdict in defendants’ favor in C.A. No. 10-050, plaintiffs appealed. The Federal Circuit (i) upheld the claim construction in part and reversed in part; (ii) reversed the jury’s verdict of anticipation; and (iii) with respect to obviousness, concluded that a new trial was required because the claim construction error prevented the jury from properly considering plaintiffs’ evidence of commercial success (“ArcelorMittal I”). Id.

During the appeal, plaintiffs obtained U.S. Patent No. RE44,153E (“the RE153 patent”). Id. at 3. Plaintiffs subsequently filed a complaint for patent infringement of the RE153 patent in C.A. No. 13-685 against defendant AK Steel Corp., and filed a motion for leave to file a second amended complaint in C.A. No. 10-050, substituting the RE153 for the originally asserted patent, U.S. Patent No. 6,296,805 (“the ‘805 patent”). Id. Defendants then moved for entry of summary judgment in C.A. No. 10-050, arguing that the RE153 patent was invalid pursuant to 35 U.S.C. § 251(d). Id. at 4. The court granted that motion, having concluded that RE153 patent was improperly broadened. Id. The Federal Circuit affirmed and reversed that ruling in part (“ArcelorMittal II”), finding that “district court properly concluded that claims 1 through 23 of the RE153 patent were improperly broadened under § 251 and therefore invalid,” but “erred in invalidating claims 24 and 25, which the parties concede maintain the same scope as the original claims.” Id. at 5. The Federal Circuit remanded the case for further proceedings. Id.

Here, plaintiffs argued that C.A. No. 10-050 should be dismissed for lack of subject matter jurisdiction because (1) claims 24 and 25 were never at issue in C.A. No. 10-050; (2) all of the asserted claims of the RE153 patent have been held invalid; and (3) the absence of any case or controversy requires dismissal. Id. at 6. Judge Robinson rejected plaintiffs’ argument, first explaining that “Claims 24 and 25 of the RE153 patent are ‘substantially identical’ to claim 1 of the ‘805 patent, as established by the Federal Circuit in ArcelorMittal II and consistent with the parties’ concession.” Id. at 7. Thus, according to Judge Robinson, “claims 24 and 25 of the RE153 patent were asserted in Civ. No. 10-050 as a matter of law,” and plaintiffs’ motion to dismiss must be denied. Id. at 7-8. Judge Robinson noted that the “RE153 patent simply took the place of the ‘805 patent upon its surrender.” Id.

In their motion for summary judgment, defendants argued in general that “because claims 24 and 25 of the RE153 patent have the same scope as claim 1 of the ‘805 patent, the motions are appropriately resolved consistent with the 2011 trial record and the mandate of the Federal Circuit in ArcelorMittal I.” Id. at 6. Judge Robinson agreed. First, Judge Robinson granted defendants’ motion for summary judgment of no infringement, noting that following ArcelorMittal I, plaintiffs had “conceded – by not addressing – the fact that the trial record had no evidence of past infringement of claim 1 of the ‘805 patent as construed by the Federal Circuit.” Id. at 9. Judge Robinson thus reasoned that “[g]iven the fact that I would not allow the record to be opened on remand if the ‘805 patent were still at issue, and given that plaintiffs are not asserting pre-trial acts of infringement, I find that there are no genuine issues of material fact as to infringement of claims 24 and 25 of the RE153 patent.” Id.

Judge Robinson also granted defendants’ motion for summary judgment of invalidity. Judge Robinson observed that “[t]he question once again is whether, under the circumstances at bar, I should allow plaintiffs to start with a clean slate, as though no trial and no appeal had ever occurred in Civ. No. 10-050.” Id. at 11. Judge Robinson “decline[d] to do so, and confine[d] [the Court’s] analysis to the scope of the Federal Circuit’s mandate in ArcelorMittal I.” Id. Judge Robinson concluded “plaintiffs have not identified any genuine issues of material fact sufficient to overcome defendants’ prima facie case of obviousness.” Id. Specifically, Judge Robinson explained that “defendants contend (and plaintiffs concede by not addressing)” that there was not a sufficient nexus between commercial success and the patented invention. Id.

Judge Robinson did grant plaintiffs’ motion to amend in C.A. No. 13-865, which sought “permission to assert yet another patent against AK Steel – U.S. Reissue Patent No. RE44,940 (“the RE940 patent”), a continuation of the patent application that issued as the RE153 patent and which itself issued on June 10, 2014.”  Id. at 5.

 

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