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Judge Sue L. Robinson recently decided defendant’s motion to stay in Versata Software, Inc., et al. v. Callidus Software, Inc., C.A. No. 12-931-SLR (D. Del. May 8, 2014). In its discussion, the Court also indicated that it will now allow no more than two patents to be presented to any one jury at trial. See id. at 5 n.7
Plaintiffs’ three patents-in-suit are covered business method (“CBM”) patents, and defendant has challenged their validity before the PTAB pursuant to Section 18 of the AIA. Id. at 2. However, defendant “chose to seek limited review before the PTAB on a subset of the patent claims at issue.” Id. at 4.
The PTAB had granted review of the patents and must issue its final written decision on or before March 2015, but may extend the deadline up to six months. Id. at 2. The trial in this case is scheduled for October 2015, soon after what would be the PTAB’s extended deadline to issue a final decision.

Under these facts, the Court was “not convinced” that post-grant review of only a subset of claims would meaningfully simplify the litigation. Id. at 4. The Court observed that defendant was using a stay “as both a sword and a shield” given the fact that defendant was also asserting its patents against plaintiffs, thus “moving forward on its interests but denying [plaintiffs] the opportunity to do the same, thus presenting a clear tactical advantage for . . . the moving party.” Id. Furthermore, defendant was “defending against the asserted claims of infringement aggressively, having engaged the court and [plaintiff] in a preliminary motion practice [namely, motions to dismiss and/or transfer, id. at 2] before resorting to the administrative avenue for relief and the resulting stay motion. Under the circumstances of this case, [defendant’s] tactics have actually increased the burdens of litigation, rather than reduced them.” Id. at 4.

The Court did grant the motion to stay with regard to one of plaintiff’s three patents. In a footnote, the Court explained that it “now allows no more than two patents to be presented to any one jury at trial, meaning that [plaintiff] would not have moved forward with all three patents to trial in any event.” Id. at 5 n.7.

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Judge Leonard P. Stark recently issued findings of fact and conclusions of law following a bench trial in an ANDA case relating to Avanir’s Nuedexta® product, which is used to treat a neurological condition known as pseudobulbar affect. Avanir Pharmaceuticals, Inc., et al. v. Actavis South Atlantic LLC, et al., Consol. C.A. No. 11-704-LPS (D. Del. Apr. 30, 2014). The Court found that the plaintiffs proved by a preponderance of the evidence that claims 1-9 of U.S. Patent No. 7,659,282, and claims 1-9, 12, 13, 15, and 17 of U.S. Patent No. 8,227,484 were infringed. The Court found further that the defendants failed to prove that the infringed claims were invalid as obvious or for lack of written description. With respect to U.S. Patent No. RE38,115, the Court found that the plaintiffs failed to prove infringement of claims 18-21, and that the defendants failed to prove that those claims are invalid.

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In a recent Memorandum Order, Magistrate Judge Christopher J. Burke denied without prejudice five defendants’ motion to stay pending the PTO’s decision on whether to grant two inter partes review (“IPR”) petitions filed for the patents-in-suit. McRO, Inc., d/b/a Planet Blue v. Bethesda Softworks LLC, 12-1509-LPS-CJB, et al. (D. Del. May 1, 2014). Plaintiff also has pending in the Central District of California (the “Central District Action”) over twenty related actions asserting the same patents-in-suit. Id. at 3. It was one defendant from the Central District Action that had filed the IPR petitions in December 2013. Id. at 4. Defendants’ motion in the instant action specifically requested that the Court stay the litigation until the later of “(1) the PTO’ s initial decision on whether to grant [the] petitions for IPR; or (2) the issuance of a claim construction order in the Central District Actions.” Id.

As an initial matter, Judge Burke determined that focusing on the issuance of the claim construction opinion from Central District Action as a triggering event was “not likely to be beneficial.” Id. at 5. While acknowledging that the Court would likely benefit from a review of the claim construction opinion, Judge Burke found that “the Central District will likely have issued its final Markman Order well before significant claim construction activity occurs in this case.” Id. at 5-6. Because there “would almost certainly be ample time-whether or not the motion to stay is granted-for the parties and the Court to react to the Central District’s Markman ruling in advance of the Court’s own claim construction efforts,” Judge Burke focused the Court’s analysis on whether to stay the actions pending the PTO’s decision on the IPR petitions. Id. at 6.

Judge Burke ultimately denied stay for three reasons. First, Judge Burke found that “because discovery has only just begun in some of the instant cases (and has not really begun in earnest in others), even if the PTO ultimately institutes IPR proceedings, and Defendants renew their motion to stay thereafter, having proceeded forward with initial discovery in the meantime will not be unduly harmful to the efficient management of these proceedings.” Id. at 6-7.

Second, denying stay would allow the Court to harmonize its approach to the stay request with the approach taken in Central District Action. Id. at 7. That is, the Central District has permitted discovery to go forward, but indicated it is inclined to consider granting stay if the PTO institutes the IPR proceedings. Id. Accordingly, Judge Burke found that by denying stay in the instant action, the Court may be provided with the opportunity to take into account the Central District’s final decision on a similar stay motion. Id. at 8.

Third, Judge Burke found that denying stay at this time and proceeding with “some initial discovery” may “allow for some additional clarity in the record,” and allow the Court to “better decide whether a stay would simplify the issues for trial.” Id. Specifically, Judge Burke found that the Court would benefit from a more clear record on, among other things, the patents claims in dispute, and “the claims and defenses to be pressed in earnest.” Judge Burke denied defendants’ motion without prejudice, leaving open the opportunity for defendants to renew their motion after the PTO’s decision on the IPR petitions. Id. at 9.

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Last week, a District of Delaware jury unanimously found in favor of Intellectual Ventures in its patent infringement suit against Canon. Intellectual Ventures asserted two patents related to semiconductor image sensors against various Canon digital cameras and video-cameras. The jury found that both patents were valid in the face of obviousness challenges and challenges to inventorship. The jury also found one of the two patents infringed by three Canon products. Intellectual Ventures I LLC, et al. v. Canon Inc., et al., C.A. No. 11-792-SLR, Verdict Sheet at 2-3 (D. Del. May 2, 2014).

Separately from these jury determinations, Judge Robinson entered an order construing the term “digital image magnification in a graphical user interface” as used in a third patent-in-suit, which was not a subject of the jury verdict. Her Honor explained that a claim construction disputed had arisen “as the parties’ experts dispute the meaning of ‘digital image magnification,’ the proper scope of which must be determined before presentation to a jury.” Judge Robinson adopted the construction “expanding image data – which may be represented in the form of pixels, a page description language, or any other form – on the screen of a digital device.” Intellectual Ventures I LLC, et al. v. Canon Inc., et al., C.A. No. 11-792-SLR, Memo. Or. at 1-2 (D. Del. May 5, 2014).

UPDATE:

A few days later, the same District of Delaware jury has found in favor of Canon on two other patents. The jury returned a verdict last Friday finding that various Canon had not induced infringement by selling various cameras that included certain features. The jury also found, however, that the two patents at issue were not invalid for anticipation or obviousness. Intellectual Ventures I LLC, et al. v. Canon Inc., et al., C.A. No. 11-792-SLR, Verdict Sheet at 2-4 (D. Del. May 9, 2014).

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On May 5th, the Federal Circuit denied Microsoft’s mandamus petition to force the transfer of a case filed by PersonalWeb Technologies, LLC against it in the Eastern District of Texas. Microsoft asserted that District Court Judge Leonard Davis abused his discretion in denying the transfer where a similar request by Apple resulted in the transfer of a case over the same patents.

Writing for the three judge panel of Judges Lourie, Dyk and Reyna, Judge Lourie explained in the order:

Although the question of transfer in this case is close, we cannot say that the district court’s determination amounted to a clear abuse of discretion. . . . Deference as to the proper administration of justice is particularly appropriate in this type of circumstance, where the trial court is “familiar with [an] . . . asserted patent and the related technology . . . coupled with the fact there is co-pending litigation before the trial court involving the same patent and underlying technology” and, as the district court noted, Microsoft and Yahoo! plan on calling at least some of the same witnesses. In re Vistaprint Ltd., 628 F.3d 1342, 1347 (Fed. Cir. 2010); In re Volkswagen of Am., Inc., 566 F.3d 1349 (Fed. Cir. 2009); Regents of the Univ. of Cal. v. Eli Lilly & Co., 119 F.3d 1559 (Fed. Cir. 1997).

Among other influential elements in the analysis, the Court noted that: (i) “Microsoft’s accused technology apparently underlies at least one of Yahoo!’s products at issue.”; (ii) Microsoft contradicted itself on the question of judicial economy and efficiency by admitting these interests were served in light of its “indemnity relationship with defendant Yahoo!”; and (iii) Yahoo! did not file a petition seeking transfer.

Judge Lourie concluded as follows:

Although judicial economy cannot dominate the § 1404(a) analysis, which generally calls for transfer where the convenience factors strongly weigh in favor of the transferee forum, the district court’s conclusion did not rest entirely on judicial economy. It noted that any documentary sources of proof and employee witnesses of PersonalWeb would reside in the Eastern District of Texas. It further found that the Western District of Washington had no authority to compel a non-party witness to testify. Under these circumstances and the relatedness of the suits against Microsoft and Yahoo!, it is not entirely self-evident that the transferee venue is more convenient and that transfer would be in the interest of justice. We therefore cannot say that Microsoft has met the demanding standard for mandamus relief.

The order in the case, In re: Microsoft Corp., No. 14-00123, U.S. Court of Appeals for the Federal Circuit, is available HERE.

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The Local Rules of the District of Delaware, as annotated by the attorneys of Young Conaway Stargatt & Taylor, LLP, are now available online in HTML webpage format, which some may find easier to search and navigate than other electronic formats. Click HERE to follow the link. Be sure to bookmark and share the page. Paper copies of the annotated Rules, as well as electronic copies formatted for use with tablets or e-readers, are available upon request.

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In a declaratory judgment action in which Geotag accuses Google’s advertisement products of infringement, Judge Richard G. Andrews ruled on several motions for summary judgment filed by Google, the plaintiff and counterclaim-defendant. Microsoft Corporation, et al. v. Geotag, Inc., C.A. No. 11-00175-RGA (D. Del. Apr. 10, 2014).

The Court denied Google’s motion for partial summary judgment on the basis of laches. Google argued that Geotag had actual or constructive notice of alleged infringement since 2003 and that a presumption of laches applied, citing information from a Google site available since 2003, as well as Google and third-party blog posts and articles from 2003-2005. Id. at 5. The Court agreed with GeoTag that, based on its review of the content of these sites, these facts were insufficient to put Geotag on notice of potential infringement. There was no showing of actual notice, and “none of the publications are sufficiently detailed to establish constructive notice or to trigger GeoTag’s duty to investigate, even had GeoTag known of them.” Id. at 6-7. As Google’s motion relied on the six-year presumption of laches and the Court found that it had not shown that the presumption applied, the motion for summary judgment was denied. Id. at 7. The Court also denied a motion for summary judgment of invalidity based on both anticipation and obviousness. See id. at 7-11.

However, the Court granted Google’s motion for summary judgment of noninfringement, finding that the accused system did not practice the patent’s “dynamic replication” requirement. See id. at 11-18.

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In Intellectual Ventures I LLC v. Xilinx, Inc., C.A. No. 10-1065-LPS (D. Del. Apr. 21, 2014), Judge Leonard P. Stark granted defendant’s motion for summary judgment on damages and willfulness in part. Prior to the summary judgment opinion, Judge Stark had excluded plaintiff’s sole damages expert as unreliable and denied plaintiff’s request to supplement its damages report. Id. at 2.

Judge Stark granted defendant’s motion for summary judgment of no willful infringement based on defendant’s assertion that plaintiff “cannot satisfy the objective prong of a willfulness claim.” Id.at 6. Judge Stark found that defendant had “at least one reasonable defense to each allegation of infringement.” Id. at 7. Specifically, Judge Stark explained that defendant raised non-infringement defenses that were not unreasonable, and that the PTO’s rejection and plaintiff’s cancellation of certain claims of three patents-in-suit further demonstrated the reasonableness of these defenses. Id. at 6-7. Judge Stark also granted defendant’s summary judgment motion of no damages for distributor sales, as the basis for those damages relied on the testimony of the excluded damages expert. Id. at 7.

Defendant also moved the Court to rule as matter of law that plaintiff cannot prove any damages on the grounds that plaintiff’s “only support for damages comes from [the excluded] expert opinion.” Id. at 3. Judge Stark denied defendant’s motion, noting that there was “sufficient evidence in the record”—independent of the excluded expert testimony—“from which a jury could find a reasonable royalty.” Id. Such evidence included, for example, agreements between the parties and the testimony of defendant’s damages expert. Id.

Judge Stark also denied defendant’s motion that requested the Court to rule as a matter of law that plaintiff cannot provide any damages for induced infringement on the basis that plaintiff had “no evidence concerning the actual use of the accused products.” Id. at 4. Judge Stark explained that plaintiff’s expert asserted that the accused software product had “default settings” that met each limitation at issue. Id. Despite the fact that customers could change the defaults settings, Judge Stark found there was sufficient evidence such that a reasonable jury could find that “the product, as sold, necessarily infringes the patents-in-suit.” Id.

Judge Stark denied defendant’s request that the Court rule as a matter of law that plaintiff was not entitled to “pre-suit damages for induced infringement, or willful infringement or enhanced damages, because [plaintiff] bases these claims solely on information [plaintiff] exchanged with [defendant] pursuant to a contractual business relationship, and those contracts preclude [plaintiff] from using that information to support [plaintiff]’s case.” Id. at 5. Judge Stark found, however, that a genuine issue of material fact existed as to whether plaintiff notified defendant of the patents-in-suit pursuant to the parties’ contractual business relationship. Id.

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In a recent decision, Judge Sue L. Robinson granted defendants’ motion for a stay pending inter partes review. Peschke Map Technologies, LLC v. J.J. Gumberg, et al., Civ. No. 12-1525-SLR, 12-1527-SLR, 12-1528-SLR, 12-1530-SLR, 12-1572-SLR, 12-1574-SLR (D. Del. Apr. 24, 2014). The PTAB’s decision on the inter partes review is due in November 2014, just 10 days before the pretrial conference was scheduled to be held. Nevertheless, Judge Robinson explained that “it makes more sense to stay litigation pending the decision of the PTAB in November than to try to accommodate plaintiff’s needs for further discovery in the remaining months leading to trial in December. A stay should clarify, if not simplify, the issues for trial and, should the cases not be resolved administratively, the court will set a new trial schedule expeditiously . . . .”

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Judge Robinson has issued a supplemental permanent injunction in the Invista v. M&G USA case, which involves resins manufactured by the parties and sold to customers to make containers. Following a jury trial, Judge Robinson had previously granted a permanent injunction. The previous injunction had not, however, addressed sales for exportation outside of the United States under 35 U.S.C. § 271(f). In considering the request for the new injunction, Judge Robinson pointed out that although the plaintiff had not “specifically invoke[d] 35 U.S.C. § 271(f) in connection with the [patent-in-suit], Invista did ask in its complaint for an injunction permanently enjoining [the defendant] from ‘. . . exporting out of the United States any products that infringe any claims of the patents-in-suit . . ., or by supplying or causing to be supplied any products that induce or contribute to the same by others, including third parties outside of the United States.’” Invista N. Am. S.A.R.L., et al. v. M&G USA Corp., et al., C.A. No. 11-1007-SLR-CJB, Order at 1-2 (D. Del. Apr. 21, 2014). Because there are no non-infringing uses of the products found to infringe, Judge Robinson agreed that the plaintiff would be irreparably harmed if the defendant “manufactures such resins, regardless of who the customers are.” Id. Her Honor therefore permanently enjoined the plaintiff “from infringing the [patent-in-suit] by manufacturing, using, importing, selling, and/or offering to sell in the United States, or exporting from the United States” the infringing products until the expiration of the patent-in-suit. Judge Robinson did, however, order that the injunction not take effect for ten days in order to allow an immediate appeal to the Federal Circuit. Id. at 2-3.

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