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In a recent Order, Judge Gregory M. Sleet granted defendants’ motion for leave to amend its answer to include allegations that the asserted patent is unenforceable due to inequitable conduct. Merck Sharp & Dohme B.V. v. Warner Chilcott Co., LLC, C.A. No. 13-2088-GMS (D. Del. Jul. 10, 2015). As Judge Sleet explained, plaintiff opposed the motion solely on the grounds that “permitting the defendants to include such allegations would be futile.” Id. at 1. Judge Sleet was unpersuaded by plaintiff’s argument, noting that “plaintiff essentially asks the court to evaluate the merits of the defendants’ inequitable conduct accusations, pointing to specific statements in the record and explaining why they do not evidence deception. These arguments are untimely and better suited for the summary judgment stage.” Id. at 2. Judge Sleet found that “the court cannot say that the defendants’ allegations are baseless,” and ultimately concluded that “defendants have adequately alleged the necessary elements of inequitable conduct.” Id.
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In a recent Memorandum Opinion, Judge Sue L. Robinson denied defendants’ motion to transfer venue to the Southern District of Texas. Quest Integrity USA, LLC v. Clean Harbors Industrial Services, Inc., C.A. Nos. 14-1482, 14-1483-SLR (D. Del. Jul. 8, 2015). As Judge Robinson explained, plaintiff “is a limited liability company organized and existing under the laws of the State of Texas and having its principal place of business in Seattle, Washington.” Judge Robinson further explained that “Defendant Clean Harbors is a corporation organized and existing under the laws of the State of Delaware and having its principal place of business in Norwell, Massachusetts,” and “Defendant Cokebusters is a corporation organized and existing under the laws of the State of Delaware and having its principal place of business in Houston, Texas.” Id. at 1-2

In denying the motion to transfer, Judge Robinson first explained that because “‘convenience’ is separately considered in the transfer analysis, the court declines to elevate defendants’ choice of venue over the choice of the plaintiff.” Id. at 4. Judge Robinson found that “plaintiffs have historically been accorded the privilege of choosing their preferred venue for pursuing their claims remains a significant factor.” Id. Further, as Judge Robinson noted, “Defendants admit to engaging in infringing conduct in Delaware,” and “[t]hat fact negates the argument that the alleged infringement is focused in the Texas Gulf Coast region.” Id. Judge Robinson went on to observe that “[a]s is usual in these cases, the convenience factors do not weigh in favor of transfer because discovery is a local event and trial is a limited event.” Id. at 8. Additionally, as Judge Robinson explained, “[a]lthough Delaware is not the locus of any party’s business activities, it is a neutral forum.” Id. Judge Robinson thus concluded that transfer was not warranted in the interests of justice. Id.

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Judge Richard G. Andrews recently granted in part a defendant’s motion to dismiss for failure to claim patent-eligible subject matter under § 101.  Pragmatus Telecom, LLC v. Genesys Telecomm. Labs., Inc., C.A. No. 14-26-RGA (D. Del. July 9, 2015).  At issue were four patents sharing a common specification relating to “controlling communication between customers and organizations using certain computer systems.”  As Judge Andrews explained, the “specification demonstrates that the claims [of the purportedly representative ‘314 Patent] are directed to the abstract idea of connecting customers to call centers.”  Id. at 11.  In describing the claims, the Court drew an analogy to a customer calling a business and identifying himself, then dialing certain numbers to be transferred either to “help” or an “operator” or to leave a voicemail.  Id. at 12-13.  Judge Andrews explained, “[t]o allow such a claim would preempt the fundamental concept of customers communicating with businesses, and more specifically customers communicating with call center agents.”  Id. at 14.  The Court added, “the claim does not contain an inventive concept to transform the abstract idea into patent-eligible subject matter.”  Id.  The defendant sought to also invalidate the three other patents, based on the invalidation of the purportedly representative ‘314 Patent, but Judge Andrews explained, “the Court will only deal with the patent eligibility of the claims of the ‘314 Patent.  If Defendants wish to challenge the other patents under § 101, they must actually provide analysis for this position.”  Id. at 9.

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In late 2013, Chief Judge Stark granted a motion to stay this case pending an inter partes review by the PTO based, in part, on the argument that the stay would not exceed 18 months, given the statutory deadlines for IPRs, and the defendant’s withdrawal of its prior opposition after the IPR was instituted. Zoll Medical Corp. v. Respironics, Inc., C.A. No. 12-1778-LPS, Memo. Or. at 1-2 (D. Del. July 8, 2015). Recently, the PTO confirmed patentability of eight claims of the patent-in-suit, with one claim having been cancelled in the IPR. Plaintiff Zoll sought to lift the stay of this litigation and Defendant Respironics opposed, arguing that it would appeal the finding of patentability to the Federal Circuit. Id.

As Judge Stark explained, “[u]nderstandably, Zoll now wishes to proceed with the litigation it filed more than 2 ½ years ago . . . . The proper exercise of the Court’s discretion under these circumstances is to lift the stay and proceed with the litigation, just as the parties (and the Court) envisioned at the time the unopposed motion to stay was granted. The IPR proceeding is complete and the stay has been in place nearly 19 months. Respironics has pointed to no new, unforeseeable events to cause the Court to depart from the path that was set when the stay was imposed. As Zoll puts it, ‘Having taken its shot in the USPTO and failed, Respironics should not be able to preclude Zoll from pursuing its claims in this court for an indeterminate period of time.’” Id. at 2.

Respironics’ appeal to the Federal Circuit was not a persuasive reason to keep the stay in place: “The pendency of an appeal from the IPR, and the possibility that the Federal Circuit may reverse the PTO (and thereby simplify this litigation by, presumably, making it disappear), is not, in and of itself, a sufficient basis to make the patentee here continue to wait to enforce patent rights that it currently holds.” “Had Respironics initially been seeking a stay that would extend to the period during which any appeal from the IPR would be pending, it is likely Zoll would have continued to oppose the motion, and the Court’s calculus might very well have differed too.” Id. at 2-3.

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In a declaratory judgment action brought by Draeger alleging non-infringement and invalidity, Judge Sue L. Robinson granted My Health’s motion to set aside the clerk’s entry of default and motion for extension of time to answer, and denied Draeger’s motion for default judgment as moot. Draeger Medical Systems, Inc. v. My Health, Inc., C.A. No. 15-248-SLR (D. Del. July 1, 2015). Draeger had filed the action after My Health’s affiliate had contacted it to potentially negotiate a license for the patent-in-suit. My Health had not responded to Draeger’s complaint, but explained that its general counsel had been suffering from neurological problems at the time process was served and had no memory of seeing the complaint. Id. at 2-3.

The Court granted My Health’s motion. While Draeger argued that it would suffer prejudice “if the default is set aside, given that it is a developing company and the ‘specter of litigation’ is detrimental to its sales, market share, business decisions, and investment from third parties,” the Court concluded that these concerns were “more suited to establishing subject matter jurisdiction than precluding litigation on the merits.” Id. at 4-5. The Court also rejected Draeger’s arguments that My Health’s conduct was willful or in bad faith, accepting as credible that the general counsel’s health problems had caused the lack of response, especially where Draeger had rejected My Health’s request for a short extension acompanyied with an explanation as to these “extenuating medical circumstances.” Id. at 6.

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Magistrate Judge Fallon recently issued a report and recommendation in litigation between Merck and Teva over Teva’s proposed generic version of mometasone furoate nasal spray, marketed by Merck as Nasonex®. Merck Sharp & Dohme Corp. v. Teva Pharmaceuticals USA, Inc., C.A. No. 14-874-SLR-SRF, Report and Recommendation at 1-2 (D. Del. July 1, 2015). Judge Fallon addressed several motions at once, recommending denying Teva’s motion to transfer to the District of New Jersey based on the Third Circuit’s Jumara factors, which indicated that Delaware was “a legitimate forum based on Teva’s state of incorporation” and would not be unduly burdensome (id. at 3-8); denying as moot Teva’s motion for judgment on the pleadings (id. at 16); and granting Teva’s motion to dismiss Count II of the complaint with leave to amend (id. at 8-16).

Count II of the complaint dealt with Merck’s claim of contributory infringement. As the Court explained, “[p]ursuant to Merck’s conversion theory of contributory infringement, Teva would be liable for infringement even if the generic copy of Nasonex® nasal spray sold by Teva contains only anhydrous mometasone furoate, because at least some of the mometasone furoate contained in Teva’s product converts to the allegedly infringing monohydrate form during the proposed shelf life of the product.” Id. at 2-3.

Teva argued that the complaint did not include sufficient allegations supporting Merck’s “conversion theory,” which was more fully expressed in its briefs, including that Teva had knowledge of such a conversion or that its product was made especially for such a conversion. Judge Fallon rejected this argument, however, finding that the contributory infringement theory met the plausibility requirement of Twombly and Iqbal. Id. at 12-14. Similarly, Judge Fallon found that Merck had adequately plead the absence of a substantial non-infringing use and adequately identified a component of the invention as allegedly infringing. Id. at 14-15.

Judge Fallon agreed, however, with Teva’s assertion that “Merck’s cause of action for contributory infringement is facially deficient because it fails to specifically reference or make factual allegations regarding materiality,” i.e. that the complaint does not set out that the allegedly infringing component constitutes a material part of the invention as required by § 271(c). Thus, “Merck’s cause of action for contributory infringement is facially deficient and should be dismissed on this basis.” Id. at 11-12. Judge Fallon recommended, however, that dismissal be with leave to amend the complaint to address the materiality requirement. Id. at 15-16.

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In Andrulis Pharmaceuticals Corp. v. Celgene Corp., C.A. No. 13-1644-RGA (D. Del. June 26, 2015), Judge Richard G. Andrews construed terms in claim 2 of U.S. Patent No. 6,140,346, finding three sets of related terms to be indefinite.  The patent relates to a “novel method for treating cancers with thalidomide alone or in combination with other antiangiogenic and anti-cancer agents.”  Id. at 1 (citation and internal quotation marks omitted).

The terms found indefinite were: “enhanced” and “enhanced combination”; “enhanced therapeutically-effective amounts of thalidomide”; and “said neoplastic diseases are sensitive to said enhanced combination.”  Defendant argued that “enhanced” required degrees that the patent never articulated.  Id. at 7.  The Court found the “central issue” to be whether “enhanced means greater than additive,” as Plaintiff claimed the addition of “enhanced” was needed for the claim to overcome prior art, “or whether it renders the claim indefinite.”  Id.

The Court concluded that the term was indeed indefinite.  There was no evidence narrowing its meaning, id. at 8, and the patent provided very little guidance as to the meaning, id.  at 8-9.  The Court also found that the prosecution history did not support Plaintiffs’ contention that “enhanced” necessarily meant “greater than additive” in light of the prosecution history.  Id. at 9.  In fact, “[t]he prosecution history demonstrates that the applicant did not simply adopt the examiner’s position that the claims require a greater than additive effect.”  Id. at 10.  “It cannot be the case that ‘enhanced’ is merely a synonym for ‘greater than additive’ when read within the context of the examiner’s rejection, and the applicant’s amendment and response.”  Id.  The inventor’s own testimony supported the interpretation that “enhanced” was not synonymous with “additive effect,”  id. at 12, although the Court did not find the inventors’, or proffered experts’, testimony on this subject particularly probative.  See id. at 12, 13.  It concluded that “[b]ecause ‘enhanced’ can mean less than additive, additive, or greater than additive, the term is indefinite because it does not inform a person skilled in art of the invention with reasonable certainty of its meaning in the patent-in-suit.”  Id. at 13.

As to “enhanced therapeutically-effective amounts of thalidomide,” the Court concluded that its “grammatical structure adds a second reason for a finding of indefiniteness.”  Id. at 14.  Plaintiffs attempted to argue “enhanced” did not modify “therapeutically-effective amounts of thalidomide,” but the Court found this would result in “grammatical gymnastics.”  Id. at 15.  The larger term was indefinite because it was “unclear what an ‘enhanced’ amount of thalidomide . . . would be.”  Id.  The Court also found the third term “said neoplastic diseases are sensitive to said enhanced combination” indefinite “[f]or the reasons offered int eh analysis of the [other two] terms.”  Id. at 17.

The Court also construed the terms “administering” and “neoplastic diseases.”

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Magistrate Judge Christopher J. Burke recently denied a declaratory judgment-defendant’s motion to stay pending the outcome of a petition for inter partes review.  NuVasive, Inc. v. Neurovision Medical Products, Inc., C.A. No. 15-286-LPS-CJB (D. Del. June 23, 2015).  The IPR petition sought to invalidate all claims of one of the two patents-in-suit, U.S. Patent No. 8,634,894.  Judge Burke denied the stay because the PTAB’s decision on the petition was imminent, “coming well before the parties will have engaged in time-consuming and costly discovery and claim construction-related activity in this case.”  Id. at 3.  Moreover, Judge Burke noted that the PTAB’s decision, whether to deny or grant the petition, will “allow for some additional clarity in the record”; and that it is “the District’s Court’s preference that . . . cases filed by a plaintiff should move forward–even in the face of early-filed motions that have not yet to be fully resolved.”  Id. at 4-5. Continue reading

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In a recent Order, Judge Richard G. Andrews granted a defendant’s motion to dismiss three indirect infringement counts for failure to plausibly allege the existence of any direct infringers.  Acceleration Bay LLC v. Activision Blizzard Inc., C.A. No. 15-228-RGA (D. Del. June 22, 2015).  As Judge Andrews explained, “[t]he allegations of direct infringement in the indirect infringement accounts seem designed to obscure what Plaintiff’s theory is rather than to elucidate it.”  The Court rejected the argument that the counts should be dismissed, alternatively, for failure to plausibly allege knowledge, explaining that this “seems much ado about nothing” since “were this Defendant’s only argument, all it would result in would be a limitation of the scope of the indirect infringement counts.”  The dismissal was without prejudice.

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In Bayer Cropscience AG, et al. v. Dow Agrosciences LLC, C.A. No. 12-256-RMG-JS (D. Del. June 18, 2015), Judge Renée Marie Bumb, sitting by designation, made determinations, based on Defendant’s attorney’s “almost entirely unredacted” billing statements, of fees to be charged against Plaintiffs to Defendant under 35 U.S.C. § 285.  Defendant requested over $6 million in fees.  Plaintiffs requested that Defendant produce completely unredacted records, and requested a reduction in the fees of at least $1.3 million.  The Court ultimately reduced the fee award by approximately $170K, id. at 86-87, and rejected Plaintiffs’ request for unredacted records, id. at 86.

Having reviewed each of the contested billing entries (redacted from the public version of this opinion), the Court rejected a number of Plaintiffs’ contentions that bills for various items, including preparation of key declarations, attendance at summary judgment hearings, getting attorneys “up to speed” for an appeal, and substantial document review, were excessive, redundant, or unnecessary and thus unreasonable.  See, e.g., id. at 13, 21, 23-24, 31-32, 59-60.  The Court also rejected Plaintiffs’ contention as “baseless” that it was unreasonable for Defendant to have hired lead counsel from New York and California where it could have hired lead and local counsel from Delaware, id. at 26, as well as its argument that Defendant should have utilized local counsel at various locations for depositions “in a case of this complexity,” id. at 83.  For several issues, the Court observed that it would have been helpful for Plaintiffs to provide it with how much time Plaintiffs’ attorneys had billed to these tasks, for comparison.  See, e.g., 31, 76.

For other items, however, the Court did reduce fees.  For example, the Court reduced fees involving “seemingly excessive edits to” a summary judgment motion and a motion for fees.  Id. at 18, 81-82. “While attorney review and editing are important, the Court has attempted to reasonably adjust the time to address Bayer’s legitimate concerns that it should not have to pay for excessive, multiple attorneys’ reviews.”  Id. at 18.  The Court further reduced some amounts for legitimate expenses where it concluded, for example, that the number of attorneys who billed to a task or attended a hearing appeared unnecessary.  See, e.g., id. at 22-23, 25. Continue reading

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