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Chief Judge Leonard P. Stark recently considered Plaintiff S3 Graphics’s motion for partial summary judgment on patent ownership and license, and the parties’ motions to preclude expert testimony.  S3 Graphics Co., Ltd. v. ATI Technologies, ULC, et al., C.A. No. 11-1298-LPS (D. Del. Oct. 21, 2015).  In support of its motion for summary judgment, S3 Graphics argued that summary judgment that it owns the disputed patents was appropriate because a January 2001 assignment “unambiguously assigned all rights” in the patents to S3 Graphics.  Id. at 13.  Defendants, on the other hand, argued that the patents were in fact assigned to defendant ATI by virtue of a March 2001 asset purchase agreement.  Id.  And, even if the January 2001 Assignment did assign the rights in the patents to S3 Graphics, defendant ATI was a “bona fide purchaser without notice” so, pursuant to 35 U.S.C. § 261, the assignment was void as against Defendants.  Id.  Applying settled principles of Delaware contract law, Judge Stark interpreted the unambiguous contract terms to find that the 2001 assignment explicitly conveyed to S3 Graphics “the full and exclusive right, title, and interest in” the patents .  Id. at 13-15.  Judge Stark also rejected Defendants argument that they became subsequent purchasers without notice by virtue of the March 2001 asset purchase agreement.  Judge Stark interpreted the unambiguous terms of the March 2001 assignment to find that it does not include the disputed patents.  Id. at 18-25.  Judge also found in S3 Graphics’s favor on the issue of whether Defendants have an express license to the patents, but denied summary judgment as to the issue of implied license.  Id. at 26-30.

Judge Stark also excluded the portions of Defendants’ expert report “directed solely to whether the various contractual provisions at issue” establish who owns the disputed patents because the Court “resolved this issue as a matter of law.”  Id. at 45.  Judge Stark determined, however, that other parts of the expert report were relevant to the issue of implied license which will go forward to trial.  Id.  Judge Stark also excluded portions of S3 Graphics’s expert’s report relevant to what assets ATI acquired through the asset purchase agreement.  Judge Stark found that the expert was not qualified as an expert on contract interpretation and “never even read the APA.”  Id. at 49.

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In the on-going litigation between Intellectual Ventures (IV) and Canon, Judge Robinson has denied several motions for summary judgment of non-infringement and for summary judgment of invalidity including both anticipation and subject matter eligibility arguments, with a few limited exceptions in which summary judgment was granted. Several of the rulings finding infringement related to patents involving doctrine of equivalents issues. For one patent, Judge Robinson granted summary judgment of non-infringement based on the principle that if “a theory of equivalence would vitiate a claim limitation, however, then there can be no infringement under the doctrine of equivalents as a matter of law.” Intellectual Ventures I, LLC, et al. v. Canon Inc., et al., C.A. No. 13-473-SLR, Memo. Op. at 60-62 (D. Del. Nov. 9, 2015) (citing Tronzo v. Biomet, Inc., 156 F.3d 1154, 1160 (Fed. Cir. 1998). With respect to another patent, Canon alleged that claim scope had been surrendered and IV responded that it was asserting only literal infringement. Judge Robinson found that because IV did not respond to Canon’s argument, it would be precluded from asserting equivalents at trial. Id. at 30.

In analyzing invalidity of one patent-in-suit, Judge Robinson also concluded that a doctoral thesis that was available in archives at MIT but would have been difficult to find for anyone who did not already know of its existence was not prior art because it could not serve as “public notice.” Id. at 34-36.

Judge Robinson rejected the portion of Canon’s summary judgment motion seeking a finding of indefiniteness because similar arguments had already been rejected during claim construction: “The court agrees with IV in that Canon’s indefiniteness arguments were considered in its claim construction order and Canon offers no fresh reasons to compel a different conclusion. Essentially, this portion of Canon’s motion for summary judgment equates to an untimely motion for reargument. Nonetheless, Canon’s arguments regarding IV’s expert’s use of the words ‘single receive path’ were taken out of context. Indefiniteness is not based on an expert’s utilization of a phrase to contrast the invention with prior art. Rather, § 112, 1f 2 requires ‘that a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty.’ As the court previously held, this term meets that standard in light of the disclosures contained within the specification.” Id. at 6-8.

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In Chesnut Hill Sound Inc. v. Apple Inc., C.A. No. 15-261-RGA (D. Del. Nov. 6, 2015), Judge Richard G. Andrews denied Plaintiff’s motion for a preliminary injunction.

The Court assumed for purposes of the motion that Plaintiff could prove a likelihood of success on the merits, but because it concluded that Plaintiff had not made a showing of irreparable harm, an assessment of likelihood of success was unnecessary. Id. at 3.

As to irreparable harm, the Court pointed to Plaintiff’s delay in moving for an injunction, where the patent-in-suit that was the subject of the motion had been issued three years before the motion. The fact that Plaintiff had brought suit on a second patent that had not issued until 2014 did not alter the Court’s analysis, as this patent was not the subject of the motion and the ten-month delay from its issuance to filing of the motion still demonstrated significant delay. See id. at 7-8. The fact that Plaintiff did not have a commercially viable product also showed a lack of irreparable harm. Plaintiff argued that Defendant’s product prevented its entrance into the market and, absent an injunction, Plaintiff’s investment in product development would be lost. The Court disagreed, noting that “[w]ithout an available product or any evidence that one will be available in the near future, any arguments [Plaintiff] makes regarding lost profits, lost market share, lost goodwill, and lost business opportunities are speculative, if not fanciful. Accordingly, [the Court found Plaintiff’s] lack of a commercially available product, or even a suggestion as to when such a product would be available, weakens its ability to show the type of ‘immediate irreparable injury” required to prove irreparable harm.” Id. at 9. Finally, Plaintiff had not shown that monetary damages would be insufficient, as mere difficulty in calculating monetary damages due to the fact that Defendant’s accused product was offered for free was insufficient to show such damages would be insufficient compensation. Id. at 10. Instead, due to Plaintiff’s “lengthy delay in seeking injunctive relief, its lack of a commercially available product, and its failure to show a causal connection between any alleged infringement and the market failure of its products . . . [Plaintiff] would be adequately compensated by money damages should it succeed on the merits of its infringement claim.” Id.

Because the Court concluded that Plaintiff had not made a showing of irreparable harm, it did not consider the balance of hardships or impact on the public interest. Id. at 11.

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Magistrate Judge Christopher J. Burke recently issued a Report and Recommendation recommending that the Court grant Brigham and Women’s Hospital’s (“BWH”) Motion to Intervene.  Endoheart AG v. Edwards Lifesciences Corporation, C.A. No. 14-1473-LPS-CJB (D. Del. Nov. 6, 2015).  BWH sought to intervene “in order to be able to press its claim . . . that it is entitled to a declaratory judgment that it is the owner of United States Patent No. 8,182,530 (“the ‘530 patent”) and to certain patent applications related to the ‘530 patent (collectively, “the inventions”).”  Id. at 1-2.  Plaintiff Endoheart AG claimed that it was the rightful owner of the ‘530 patent, the patent in suit.  Id. at 2.  Endoheart argued that the motion to intervene was not timely filed because it was filed seven months after Endoheart filed its complaint and four months after the Court entered a case schedule.  Id. at 3-4.  Judge Burke disagreed noting that the case is in its early stages, with trial not scheduled until March 2017, and any discovery related to BWH’s declaratory judgment claim would be narrowly focused.  Id. at 4.  Judge Burke also found that BWH sufficiently met its burden to make a prima facie showing that it has an ownership interest in the inventions.  Id.at 5-6.  Last, Judge Burke found that intervention would be appropriate because otherwise no party would be asserted that BWH is the rightful owner of the inventions.  Id. at 7.

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Last Friday, Judge Sue Robinson issued a temporary restraining order prohibiting Dr. Reddy’s Laboratories (DRL) from selling a generic esomeprazole product due to its likelihood of confusion with plaintiff AstraZeneca’s Prilosec® and Nexium® tablets. AstraZeneca AB, et al. v. Dr. Reddy’s Laboratories, Inc., C.A. No. 15-988-SLR, Memo. at 13-14 (D. Del. Nov. 6, 2015).

AstraZeneca holds three federal trademark registrations covering the color purple for gastrointestinal pharmaceuticals as well as one registration for the phrase “THE PURPLE PILL®.” It has used the color purple in branding gastrointestinal drugs, including Prilosec® and Nexium®, since 1989 and has sold approximately 22.6 billion purple capsules in that time. Approximately six years ago, DRL began selling a generic version of Prilosec®, which used a half-purple, half-yellow-or-grey capsule. In recent years, several generic versions of Nexium® have also been marketed by other companies, each of which used blue or white capsules. Most recently, in September 2015, DRL launched its generic version of Nexium® using a capsule that is entirely purple, although in two different shades. In late October 2015, AstraZeneca responded with a trademark infringement lawsuit and a request for injunctive relief. Id. at 1-4.

Judge Robinson concluded that AstraZeneca “carried its burden to prove that it is likely to succeed on the merits of its case, that it is likely to suffer irreparable harm if the requested relief is not granted, that the balance of hardships and the public interest weigh in its favor.” Id. at 13-14. Her Honor continued: “If DRL’s arguments were carried to their logical end, the loss of a branded company’s patent monopoly would inevitably result in a loss of its trademark rights, a result not consistent with the law or the market place. Moreover, so long as injunctive relief is available to prevent harm, the court declines to force such plaintiffs such as AZ to actually incur harm that is likely, but not provable, at the outset. Therefore, AZ’s motion for a temporary restraining order will be granted.” Id.

In support of this conclusion, Judge Robinson found that AstraZeneca was likely to succeed on the merits of its Lanham Act claims. Among other factors considered, Judge Robinson found that:
(1) the products were very similar because “DRL’s generic capsule is purple, albeit two shades of purple. Although not identical to AZ’s branded capsule, it does fit the description of the mark, “purple.” It has been recognized that a registration for a color covers all shades of that color”;
(2) “AZ has presented credible evidence that its Purple Marks branding is of long duration, of value, and strong”;
(3) Given the totality of the circumstances, including the physical appearance of DRL’s other generics (distinctive), the fact that DRL is a second wave generic in this market (and perhaps has to be more aggressive to get market share), and DRL’s explanations for adopting an all-purple pill . . . the court concludes that DRL intended to test AZ’s trademark, rather than honor it”; and
(4) “Despite the fact that Nexium® is a branded product and DRL’s generic is not, the court finds that AZ and DRL are still competing in the same market for the same consumers in the first instance, even if DRL is ultimately competing against other generics once the decision to buy a generic has been made.”

Id. at 5-9.

Judge Robinson also concluded that there was sufficient evidence of dilution of AstraZeneca’s marks because those marks are sufficiently “famous” and because “it is evident that DRL, in its marketing of its GI generics, has progressed from using colors in its two-tone capsules that are not at all similar to AZ’s purple pills, to a two-tone capsule that is (1) all purple and (2) uses AZ’s shade of purple.” Id. at 9. Moreover, Judge Robinson found that AstraZeneca had not acquiesced to DRL’s conduct by the “sale of the half-purple Prilosec generic capsules since 2005 [and the resulting] ‘market history of overlap between’ the products” and that such a history did not undermine an argument of irreparable harm. Id. at 12.

Judge Robinson also rejected a contract defense based on the agreement settling prior Hatch-Waxman litigation between AstraZeneca and DRL and releasing “any and all claims . . . in connection with the DRL Product . . . arising before the Effective Date of this Settlement Agreement.” Her Honor explained that although DRL’s ANDA product was described in its ANDA as “purple opaque,” this characterization was of little consequence because “[f]rom the court’s extensive ANDA litigation experience, however, the court takes judicial notice of the fact that such submissions are voluminous by nature, and that the focus of ANDA litigation is on the formulation of the generic product for infringement purposes (not on the color of the proposed commercial product, which is not on the market as not even approved by the FDA yet).” Id. at 10 n.6. Further, Her Honor noted that Hatch-Waxman litigation allows only for consideration of patent issues, and that the settlement agreement at issue, “[i]f anything . . . specifically preserved AZ’s trademark rights against the very conduct in which DRL has engaged.” Id. at 10-12.

Having found a likelihood of success, Judge Robinson found a likelihood of irreparable harm because “[b]y using AZ’s Purple Marks, it is likely that DRL will create (and intended to create) the false impression that its generic esomeprazole magnesium capsules are identical to Nexium®, not merely bioequivalent, and may be an “authorized generic,’’ that is, a generic drug made or authorized by the brand name company, i.e., by AZ.” Id. at 12. In balancing the harms, Her Honor “recognize[d] that imposing injunctive relief on DRL (i.e., forcing DRL to take its generic off the market) will be costly, both monetarily and in terms of such intangibles as market share and loss of good will. The court nevertheless concludes that DRL engaged in the conduct at issue fully aware of such consequences and, therefore, cannot be heard to complain that the risks it took did not pay off.” Id. at 13.

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Judge Richard G. Andrews recently issued what appears from the Court’s docket to have been a sua sponte order directing a defendant to explain why its pro hac vice counsel should not have their admission revoked as a result of filing a reply brief that raised, for the first time, the defendant’s best argument in support of a motion to dismiss for lack of personal jurisdiction.  Funai Electric Co., Ltd. v. Personalized Media Commc’ns, LLC, C.A. No. 15-558-RGA (D. Del. Nov. 6, 2015).  The Court also ordered the plaintiff to file a sur-reply addressing the merits of the defendant’s argument.

The full text of the docket order was as follows:

ORAL ORDER:  Defendant’s Reply Brief (D.I. 14) raises an issue not in either of the earlier briefs, in particular, whether Plaintiff meets the “arising from” requirement of section 3104(c)(1).  It cites in particular Sprint Nextel.  (D.I. 14, pp. 2-4).  Plaintiff is ORDERED to respond to on the merits to the argument.  Defendant’s counsel are ORDERED to explain why they should not have their pro hac vice status revoked for saving their better argument for the reply brief.  Both letters are due November 13, 2015.  Ordered by Judge Richard G. Andrews on 11/6/2015.
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In Reckitt Benckiser Pharmaceuticals Inc., et al. v. Watson Laboratories, Inc., et al., C.A. No. 13-674-RGA and Reckitt Benckiser Pharmaceuticals Inc., et al. v. Par Pharmaceutical, Inc., et al., C.A. No. 14-422-RGA (D. Del. Oct. 26, 2015), Judge Richard G. Andrews ruled on several motions in limine related to the parties’ expert testimony.

The Court granted Plaintiffs’ motion to preclude Defendants’ invalidity expert who relied on the expert reports of other of experts in forming his obviousness opinion. The Court concluded the opinion “lack[ed] reasoning or analysis” and was “needlessly cumulative,” and excluded the testimony under FRE 403. Id. at 2.

The Court denied Defendants’ motion to preclude Plaintiffs’ validity expert from relying on certain post-dated references that could show that “drug content uniformity was a problem in the field at the time of the invention,” arguing it was hearsay. Id. The Court allowed reliance on the references as either not hearsay or something experts in the field would reasonably rely on in forming an opinion (and thus allowable under FRE 703). Id. at 2-3. The Court also held that the references were relevant and that Defendants’ objections to the expert’s reliance on them went to weight, rather than admissibility.

Finally, the Court denied one of the defendant’s motion to preclude Plaintiffs from relying on certain “partitioning” infringement analysis, explaining that the motion “raise[d] questions appropriate for the trier of fact.”

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Magistrate Judge Christopher J. Burke recently granted a Daubert motion seeking to exclude portions of a plaintiff’s damages expert opinion.  W.L. Gore & Assocs., Inc. v. C.R. Bard, Inc., et al., C.A. No. 11-515-LPS-CJB (D. Del. Oct. 23, 2015).  The expert had rendered a reasonably royalty opinion based in part on her conclusion that a certain licensed patent was “similar in importance” to the asserted patents subject to the hypothetical license negotiation analysis in the case.  This conclusion was, in turn, based on a conversation the expert had with the plaintiff’s technical expert on infringement.  As Judge Burke explained, “it is clear that [the damages expert] relied exclusively on her conversation with [the technical expert] in reaching a conclusion regarding technological comparability of the Goldfarb patent and the asserted patents[.]”  Id. at 11.  The Court explained that was improper because the technical expert had not, himself, opined as to the technological comparability of the Goldfarb patent and the asserted patents, and therefore, the damages expert “could not simply testify at trial (as she did during her deposition) about what [the technical expert] previously said to her about the topics. . . . In that scenario, [the damages expert] would be simply repeating [the technical expert’s] views on technological comparability without applying her own experience or methodology to those views[.]”  Id. at 13 (emphasis in original).  This, the Court explained, would “amount to the transmission of hearsay to the jury, which is not permissible.”  Id. at 13-14.  While the Court granted the motion, it allowed the plaintiff leave to supplement the technical expert’s report to include an opinion on the technological comparability issue which the damages expert could then rely upon.

UPDATE: In a Memorandum Order dated November 24, 2015, Chief Judge Stark has adopted Judge Burke’s order in all respects. See W.L. Gore & Assocs., Inc. v. C.R. Bard, Inc., et al. C.A. No. 11-515-LPS-CJB, Memo. Or. at 3-4 (D. Del. Nov. 24, 2015).

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Judge Fallon recently considered a renewed motion to dismiss Courtesy Products L.L.C.’s willful infringement claims filed by defendant Hamilton Beach Brands, Inc.; as well as Courtesy Products’ motion to dismiss and strike Hamilton Beach’s inequitable conduct claims.  Courtesy Products L.L.C. v. Hamilton Beach Brands, Inc., C.A. No. 13-2012-SLR-SRF (D. Del. Oct. 20, 2015).

Judge Fallon recommended denial of Hamilton Beach’s motion to dismiss because the Court found that under In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007), the amended complaint adequately pled objective recklessness.  Id. at 6.  In particular, Judge Fallon found sufficient “[t]he amended allegations regarding the knowledge requirement, combined with allegations that Hamilton Beach directly and/or indirectly infringed the patents-in-suit, and that it intentionally advised third party customers to use the accused products in systems that infringe the patents-in-suit[.]”  Id.  Judge Fallon also found that the amended complaint “sufficiently establish[ed] a link between knowledge and objective recklessness by pleading that, ‘[h]aving executed a license in the year 2009 to practice claims of the [patents-in-suit] for a specific product … and thus being on notice of the [patents-in-suit], Hamilton Beach’s continued activities demonstrate a willful disregard of the [patents-in-suit] and thus constitute willful patent infringement.'”  Id. at 8.

Regarding Hamilton Beach’s inequitable conduct allegations, Judge Fallon found that the allegations passed muster except with respect to the “but-for materiality” standard discussed in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1291 (Fed. Cir. 2011).  Id. at 12-13.  “Neither the challenged pleading nor Hamilton Beach’s answering brief identifies how the cited misrepresentations in the May 21, 2007 response to the PTO’s office action led to the issuance of the patents-in-suit.”  Id.  Although Judge Fallon recommended the Court grant-in-part Courtesy Products’ motion to dismiss on this basis, Judge Fallon also recommended the Court give Hamilton Beach leave to correct the deficiencies.  Id. at 15.

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Magistrate Judge Christopher J. Burke recently recommended denial of a motion to dismiss pre-suit induced infringement claims, to the extent damages were sought for such pre-suit infringement.  Elm 3DS Innovations, LLC v. SK hynix Inc., et al., C.A. No. 14-1432-LPS-CJB (D. Del. Oct. 16, 2015).  The complaint did not allege direct evidence of pre-suit knowledge of the plaintiff’s ’239 patent, but Judge Burke found that it alleged certain indirect evidence that, taken together, rendered it at least plausible that the defendants did, in fact, have pre-suit knowledge of the ’239 patent.  The complaint alleged that the plaintiff’s president made a presentation to an executive and around 60 of defendants’ engineers in 2000 or 2001 relating to the ’239 patent’s parent, and that the ’239 patent was also well known in the industry and cited by defendants’ competitors in numerous patent applications.  Id. at 4-5.  On balance, Judge Burke found that these allegations “render it at least plausible that [defendants were] aware of the [patent-in-suit] and its claims as of the date of the patent’s issuance.”  Id. at 4.  Judge Burke also found that the complaint “plausibly allege[d] that Defendants knew that their semiconductor chips at issue were in fact incorporated into their customers’ (e.g., global equipment manufacturers like Apple, Microsoft, Samsung and HTC) finished electronic products sold in the United States.”  Id. at 10-11.

Update:  On March 31, 2016, Chief Judge Leonard P. Stark adopted Magistrate Judge’s Burke’s report and recommendation.

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