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Judge Richard G. Andrews recently granted Defendants’ motion for judgment on the pleadings of invalidity of Plaintiff’s U.S. Patent No. 5,826,034 under 35 U.S.C. § 101.  Novo Transforma Techs., LLC v. Sprint Spectrum L.P., et al., C.A. No. 14-612-RGA (D. Del. Sept. 2, 2015).  Applying the U.S. Supreme Court’s decision in Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), Judge Andrews found that “[t]he ‘034 patent claims the abstract idea of ‘translation.’ The claims do not solve a problem specific to the realm of computer networks, and the additional claim limitations do not amount to an ‘inventive concept.’  Therefore, the asserted claims of the ‘034 patent are invalid.”  Id. at 4.  Plaintiff argued that the claimed invention was not an abstract idea because “it addresses a problem that ‘specifically arises in the context of communication networks due to the presence of incompatible devices and formats.’  The ‘034 specification explains that the claimed invention addresses the problem of  ‘incompatibility between different communication services employing different media for communicating information.'”  Id. at 5.    Judge Andrews disagreed noting that “[i]ncompatible communication types have existed since before the emergence of computers and the Internet” and translating “into a different media form . . . is no different than the function of a translator.”  Id. at 6.   Moreover, Judge Andrews determined that additional claim limitations did not “render the subject matter patent-eligible” because “the ‘034 patent contemplates the conversion and delivery of physical messages[, a] problem [] not unique to electronic devices.”  Id. at 8.

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In two recent orders, Judge Gregory M. Sleet granted motions to stay pending the outcome of inter partes review.  Joao Control & Monitoring Systems, LLC v. Volkswagen Group of Am. Inc., et al., Consol. C.A. No. 14-517-GMS (D. Del. Sept. 2, 2015);  In-Depth Test, LLC v. Maxim Integrated Products, Inc., C.A. No. 14-887-GMS (D. Del. Sept. 3, 2015) (and related cases).  In both cases, Judge Sleet found that a stay was warranted based on a balancing of the procedural posture and likelihood that a stay would simplify the litigation, the low risk of undue prejudice to the plaintiff resulting from a stay, and the interest in preserving judicial resources.

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Judge Sleet recently granted a defendant’s motion to dismiss for lack of Section 101 patentable subject matter. Plaintiff’s patented was directed toward promotional games, and Judge Sleet found that the claims were directed toward an abstract idea: “[T]he court finds that the concept of promotional games – ‘random drawing sweepstakes, instant win packaging, lotteries, collect & win and match & win contests’ – is an abstract idea. Though perhaps some would dispute whether such games are a ‘fundamental’ economic principle, there can be little doubt that they qualify as a ‘longstanding commercial practice’ and a ‘method of organizing human activity.’. . . Promotional games are marketing tools. Though a precise definition of ‘abstract idea’ is deliberately elusive, in the court’s view, these tools fit squarely within any understanding of the category.” Everglades Game Technologies, LLC v. Supercell, Inc., C.A. No. 14-643-GMS, Memo. at 6 (D. Del. Aug. 21, 2015). Judge Sleet further found that there was no inventive concept to transform the abstract idea into eligible subject matter because “each of the claims of the ‘050 Patent lack meaningful limitations on the abstract idea.” Id. at 7. The Court also noted that the Plaintiff had not taken a clear position on whether it believed the “machine or transformation test” supported its position, but the Court found that “[t]o the extent the machine-or-transformation test remains worthy of consideration, the court finds that it fails to support the ‘050 Patent’s validity.” Id. at 10-11.

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Chief Judge Stark recently issued two oral orders regarding motions to strike in the case of Greatbatch Ltd. v. AVX Corporation et al., C.A. No. 13-0723-LPS (D. Del. Aug. 17, 2015). First, Judge Stark granted a motion to strike an amended claim chart. Judge Stark found that the “late-filed” contentions included a “new infringement theory [that] is inconsistent with its previous theory, in that the previous theory was that a claim limitation could be found at least in one specific location, while its present theory is that the claim limitation is NOT found in that same specific location.” The Court concluded that because “Defendants relied on Plaintiff’s previous theory as the basis for their non-infringement and invalidity cases throughout fact discovery and for opening expert reports,” the “Defendants are likely to suffer unfair prejudice if Plaintiff’s late-filed contentions are not stricken, prejudice which could not be cured without dramatic change to the case schedule, which includes summary judgment motions being filed a week from now.”

Second, Judge Stark denied the Plaintiff’s motion to strike portions of the Defendant’s expert report. Plaintiff sought to have the expert’s opinion stricken because it relied on a document that had not previously been produced and because it was based on the expert’s observations of the Defendant’s manufacturing process. The Court explained: “Plaintiff has not shown that it has suffered, or is likely to suffer, any significant prejudice from Defendants’ belated production of a single document. Furthermore, regarding Defendants’ expert’s reliance on his personal observations of the manufacturing process, the record does not establish that Plaintiff asked to observe Defendants’ manufacturing process, and Defendants’ expert’s reference to the manufacturing process is not untimely. Whatever prejudice Plaintiff may have suffered, or may suffer in the future, does not justify the requested relief (i.e., striking the entirety of Defendants’ expert’s opinion for one of the accused products as it relates to the ‘779 patent).”

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Judge Robinson recently granted a motion by a third party to intervene and disqualify an expert. The expert in question had previously served as a testifying expert for Apotex, Inc. in prior litigation relating to Nasonex®. The later-filed litigation in Delaware does not involve Apotex but is related to Nasonex® and involves the same patent. Both the plaintiff Merck and the expert knew that the expert had previously served as an expert for Apotex, but neither gave notice of the new engagemet to Apotex because the expert believed that his engagement by Apotex “ended when that case ended.” Finding that the risk of disclosure of Apotex’s confidential information constituted a sufficient interest that may be affected by the litigation, Judge Robinson allowed Apotex to intervene. Merck Sharp & Dohme Corp. v. Teva Pharmaceuticals USA, Inc., et al., C.A. No. 14-874-SLR-SRF, Memo. Or. at 1-4 (D. Del. Sept. 3, 2015).

Having allowed the intervention, Judge Robinson next considered whether to grant Apotex’s motion to disqualify the expert. Judge Robinson found that the first two requirements for disqualification were indisputably met, i.e., “a confidential relationship existed between Apotex and [the expert], and confidential information was actually disclosed to [the expert].” Id. at 5. Judge Robinson further found that “Apotex’s confidential information is at a substantial risk of disclosures and/or adverse use, by virtue of the fact that Merck has chosen to pursue simultaneous cases against all three generic manufacturers – Teva, Amneal, and Apotex – regarding the [same] patent. In this regard, common sense dictates that generic products (even pharmaceutical generic products) cannot be so dissimilar as to completely alleviate the natural instinct to draw upon past knowledge to solve even new problems, leading to inadvertent use if not disclosure.” This was particularly true because the expert would presumably change positions from the prior litigation, in which he found no infringement, to the Delaware litigation, in which he presumably would find infringement – a “change in position [that] is relevant fodder for discovery, and puts Apotex’s confidential information at risk.” Id. at 5-7. Accordingly, Judge Robinson found that disqualification of the expert was appropriate.

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In a recent memorandum opinion, Chief Judge Leonard P. Stark construed claim terms from U.S. Patent No. 5,755,725, entitled “Computer-Assisted Microsurgery Methods and Equipment.”  Sarif Biomedical LLC v. Brainlab, Inc., et al., C.A. No. 13-846-LPS (D. Del. Aug. 26, 2015).  Of note, Chief Judge Stark found that language in the preamble of a claim was limiting because it provided antecedent basis for a term appearing in other claim limitations.  Specifically, the preamble to claim 1 recited “[a] computer-assisted microsurgery installation, comprising . . .” and the word “microsurgery” was not otherwise referenced in the claims, nor described in the specification.  The Court agreed with the defendants that the preamble must be limiting because “it provides the antecedent basis for the term ‘the tool,’ which appears later in limitations . . . of the same claim 1.”  Id. at 6 (“These later references to ‘the tool’ refer to a microsurgical tool . . . .”).

Chief Judge Stark found, respect to another disputed claim term, that “the presumption against means-plus-function claiming in the absence of the word ‘means’ has been overcome.”  Id. at 13.  At issue was a claim reciting “a computer adapted to: . . . control position and displacements of the tool as a function of control signals originating from a control unit, wherein the fixed reference frame Rc is independent of the patent reference frame Rp and of the image reference frame Ri.”  The Court explained that the “term, and the entirety of the intrinsic (and extrinsic) evidence, fail to recite sufficiently definite structure to accomplish the function of ‘control position and displacements of the tool as a function of control signals originating from a control unit.’”  Id.  The Court therefore found that the term lacked sufficient disclosure of structure because “there is no disclosure as to how the computer would perform this function. . . . The patent provides no guidance as to how the computer would operate, other than the general assertion that it would run ‘specialized software.’”  Id. at 14-15.

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Judge Andrews recently granted a motion for summary judgment of invalidity of U.S. Patent No. 7,156,717, which relates to a finishing method for semiconductors. The crucial threshold question presented by the motion was whether the asserted prior art reference adequately incorporated by reference another piece of art. The asserted art, Sun, stated the following about the incorporated art, Litvak:

This [invention] is an improvement and expansion of the invention described in allowed U.S. patent application Ser. No. 08/122,207 of Herbert E. Litvak, filed Sep. 16, 1993, now U.S. Pat. No. 5,499,733. This earlier application is being expressly incorporated herein by this reference, and is referred to hereinafter as the “Prior Application.”

Semcon Tech, LLC v. Micron Tech., Inc., C.A. No. 12-532-RGA, Memo. Op. at 6-7 (D. Del. Aug. 17, 2015). Finding that this was an incorporation by reference, Judge Andrews explained “[i]t is hard to imagine what is required to incorporate something by reference if stating that it is ‘expressly incorporated herein by this reference’ does not suffice.” Id.

The plaintiff’s argument that the incorporation was insufficient was based on the alleged requirement that an incorporation “specify what particular material it is incorporating and where it may be found.” See Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir. 2000). Judge Andrews rejected this argument, relying instead on Ultradent Prods., Inc. v. Life-Like Cosmetics, Inc., 127 F.3d 1065, 1069 (Fed. Cir. 1997), which “accepted that one patent could incorporate another patent by reference and together be one piece of art for purposes of anticipation.” Id.

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In Lifeport Sciences LLC, et al. v. Cook Incorporated, et al., C.A. No. 13-362-GMS (D. Del. Aug. 20, 2015), Judge Gregory M. Sleet granted defendants’ motion for reconsideration of the Court’s construction of the term “a displacement member attached to said tubular member for displacing the filter from said segment.”  In its Markman order, the Court had initially rejected defendants’ contention that this term should be construed as a means-plus-function term, and adopted a plain and ordinary meaning construction.  Id. at 1 n.1.  Although the Court pointed out that motions for reconsideration should be granted sparingly, id. at 1, the Court ultimately granted the motion, agreeing with defendants’ prior arguments that looked to other terms for guidance, see id. at 2, and it thus construed the term as a means-plus-function claim with a corresponding structure.  The Court also noted that plaintiff’s expert’s declaration should not have been relied on, as the Court had indicated at the Markman hearing that extrinsic evidence would not be considered, thus defendants had not been able to “present[] their own extrinsic evidence or arguments in opposition.”  Id. at 2 n.2.

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In Personalized Media Communications , LLC v. Amazon.com Inc., C.A. No. 13-1608-RGA (D. Del. Aug. 20, 2015), Special Master Paul M. Lukoff denied plaintiff’s motion for sanctions, which raised two distinct applications for relief: “(i) it wanted sanctions against Amazon for discovery misconduct, and (ii) it wanted [the court] to once more consider ordering Amazon to finally deliver source code packages which had still not been produced despite plaintiff’s relentless efforts.” Id. at 2. As to the first issue, the Special Maser explained that following Judge Andrews’ grant of judgment on the pleadings in favor of defendants, this “case [was] closed” for purposes of “Rule 34 issues and concomitant Rule 37 enforcement features.” Id. at 2. The Special Master therefore concluded that “I have no authority to order source code production, even if I had been inclined to do so, or to order sanctions related to previous failures to produce source code.” Id. at 3. As to the second issue, the Special Master found that “the sanctions potential of Rule 37(a)(5)(A) is not worthy of invocation under these circumstances.” Id. at 8. The Special Master reasoned that “when put into the perspective of a late arriving but prospectively evolving approach to discovery of source code, I find that Amazon’s production of the recommendation service source code package in April 2015 was substantially justified.” Id.

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In the multi-district litigation, In Re: Rembrandt Technologies Patent Litigation, Judge Gregory M. Sleet recently considered defendants’ motion to declare case exceptional and for an award of fees and costs.  In Re: Rembrandt Technologies Patent Litigation, C.A. No. 07-md-1848-GMS (D. Del. Aug. 20, 2015).  Judge Sleet granted the motion and ordered defendants to submit their documentation in support of the requested attorneys’ and experts’ fees, and costs.  In support of the Court’s decision, Judge Sleet found that Rembrandt improperly compensated its fact witnesses, in violation of Model Rule of Professional Conduct 3.4(b) (“A lawyer shall not … offer an inducement to a witness that is prohibited by law.”). Id. at 3 n.4.  In particular, Judge Sleet found that “the fee structure for Rembrandt’s fact witnesses was unreasonable and improperly linked to the outcome of the case, giving rise to a considerable risk of tainted testimony.”  Id.  Judge Sleet also found that “Rembrandt engaged in (or failed to prevent) widespread document spoliation, over a number of years.”  Id.  Last, Judge Sleet found that Rembrandt should have known that it was enforcing fraudulently revived patents.  Id.  Although the fraud was perpetrated by the third-party from which Rembrandt bought the patents, Judge Sleet determined that “Rembrandt had sufficient knowledge to learn of the fraud.”  Id.   In opposition to the motion, Rembrandt denied wrongdoing and “point[ed] the finger at third parties.”  Id.  Judge Sleet disagreed:

Rembrandt must take responsibility for its own massive litigation. If it had only been a single issue, perhaps the court’s view would be different. But the “totality of the circumstances”– the wrongful inducements, the spoliation, and the assertion of fraudulently revived patents — supports [defendants’] characterization of this case as “exceptional” — it “stands out.”

Id. (citing Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014).

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