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In Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-902-LPS-CJB (D. Del. May 15, 2014), Magistrate Judge Christopher J. Burke issued a Report and Recommendation relating to the construction of sixteen disputed terms across five patents: U.S. Patent Nos. 5,689,641; 6,237,025; 6,351,762; 5,854,893; 7,185,054; and 5,896,500. The patents in suit “relate to the field of distributed multimedia collaboration. Specifically, the Asserted Patents disclose systems and methods for utilizing hardware, software and communications technologies ‘to produce a multimedia collaboration system that greatly facilitates distributed collaboration, in part by replicating the benefits of face-to-face collaboration.’” Id. at 2.

Judge Burke construed the following terms:

“a first and second set of potential participants”
“active states” / “active teleconference”
“addresses of video display devices”
“call handle”
“conducting”
“controlling communications connections”
“displayed in two sets”
“initiate” /“initiating”
“managing a video conference”
“potential participants”
“quick dial list”
“selecting” /“selected”
“teleconference”
“on hold”/“hold state”
“tracking the audio and video capabilities associated with each workstation”
“video display device”

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In Moneycat Ltd. v. PayPayl Inc., C.A. No. 13-1358-MSG (D. Del. May 15, 2014), Judge Mitchell S. Goldberg, sitting by designation, granted defendant’s motion to transfer to the Northern District of California.

As a threshold matter, Judge Goldberg addressed whether the motion was timely. Plaintiff argued it was not because Judge Goldberg’s “Policies and Procedures encourage the parties to make motions for a transfer prior to the Rule 16 scheduling conference, which occurred in this case over two months prior to [defendant] filing its motion to transfer. Second, [plaintiff] contends that transfer at this point—with the case having proceeded through substantial portions of discovery—would delay resolution of its infringement claims, particularly where [defendant] has refused to agree to continue on the same discovery schedule should the case be transferred.” Id. at 4. Even though “motions to transfer ought to be made as early in the proceedings as practicable” and the Court observed that, in light of the parties’ past litigation history, defendants should have been aware of what products would be accused and thus could have brought the transfer motion earlier, see id. at 5-6, the Court allowed the motion, noting that filing early transfer motions was not a hard and fast rule and that the case was still in its early stages. Id. at 6.

The Court then turned to the Jumara factors. Plaintiff is based in Israel, does not have a U.S. business presence, and has no apparent ties to Delaware. Under these facts, plaintiff’s forum choice was “not entitled to significant deference.” Id. at 7. The Court also observed that “there is reason to believe that [plaintiff] will have to send resources to the West Coast on occasion no matter where this case is tried, because much of the evidence and many of the witnesses in this case are in California,” the principal place of business of defendant. Id. Therefore, the Court “accord[ed] [plaintiff’s] choice of forum less deference than would otherwise be appropriate.” Id. at 8.

Defendant’s forum choice, where the claim arose, the convenience of the parties, the convenience of witnesses, and the location of books and records all weighed in favor of transfer, a key fact being that defendant’s activities regarding the accused services, records, and witnesses were largely in California or likely to be. See id. at 9, 10, 12. However, these factors only slightly favored transfer except for the convenience of the parties and the location of books and records. Id. at 15. As to the convenience of the parties, the Court noted differences in case law regarding the weight to afford the fact that a defendant is a Delaware corporation, which was the case here. Id. at 10-11. The Court followed the “decisions by considering [defendant’s] incorporation as weighing slightly in favor of denying transfer, but . . . decline[d] to give it significant weight. Overall, because neither party has a significant physical connection to Delaware, [the Court found] the convenience of the parties factor to weigh in favor of transfer” Id. at 11.

As to the public interest Jumara factors, all were neutral save practical considerations, which weighed in favor of transfer, the Court again citing the fact that the bulk of witnesses and evidence were in California. Id. at 13.

“Balancing these factors,” the Court concluded that defendant had “met its burden to justify transferring this action to the Northern District of California.” Id. at 15.

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As detailed in our previous post, at this year’s meeting of the IP Section of Federal Bar Association’s Delaware Chapter, Judge Stark gave a presentation on the District’s Patent Study Group, as well as on recent and anticipated changes to his and Judge Robinson’s case management practices. The slides from this presentation have been posted to the District of Delaware’s web site and are posted below.

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Attendees of the May 13th annual meeting of the IP Section of Federal Bar Association’s Delaware Chapter were privileged to hear perspectives from a variety of judges, including Chief Judge Rader and Judge Dyk from the Federal Circuit Court of Appeals, Judge Jordan from the Third Circuit, Chief Judge Davis of the Eastern District of Texas, Magistrate Judge Grewal of the Northern District of California, and Chief Judge Sleet and Judges Robinson, Stark and Andrews of the District of Delaware.

In addition to opening remarks from Chief Judge Rader and Chief Judge Sleet, the event included a district court judicial panel, an appellate judicial panel, and a presentation by Judge Stark, the soon-to-be Chief Judge of the District of Delaware. Judge Stark’s presentation provided a statistical overview of litigation in the District and the Court’s recently implemented Patent Study Group (PSG). The presentation also touched upon current (e.g., Judge Robinson’s new model scheduling order) and anticipated changes (e.g., Judge Stark’s new model scheduling order expected in later 2014) stemming from the results of the PSG.

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In Carrier Corporation v. Goodman Global, Inc. et al., C.A. No. 12-930-SLR (D. Del. May 8, 2014), Judge Sue L. Robinson denied defendants’ motion to stay pending reexamination of U.S. Patent No. 7,243,004. At the time of the Court’s decision, the PTO had rejected all claims and an Action Closing Prosecution was expected to issue. Id. at 2.

As Judge Robinson explained, defendants had reasoned that granting stay would conserve judicial resources “based on two assumptions: (a) the administrative process will likely conclude prior to judgment being entered; and (b) the claims will likely be cancelled and deemed unpatentable.” Id. at 2.

Judge Robinson was not persuaded by either of these assumptions. Judge Robinson first observed that the Federal Circuit in Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1334 (Fed. Cir. 2013) “confirmed that Congress, in enacting the reexamination statute, 35 U.S.C. § 302, expected reexaminations to take place concurrent with litigation.” Id. at 3. Addressing the first assumption above, Judge Robinson explained that “cancelled claims are deemed unpatentable only if the time for appeal has expired or any appeal proceeding has terminated.” Id. (citing 35 U.S.C. § 307(a); Fresenius, 721 F.3d at 1339). As to the second assumption, Judge Robinson explained that “reexamination does not proceed at all absent the finding of a substantial new question of patentability by an examiner; thus, the second assumption applies to every reexamination proceeding once instituted.” Id.

Judge Robinson ultimately determined that “[w]ithout an end to the administrative process in sight, and with different (but equally significant purposes) being served by litigation, the court declines to stay the litigation unless [plaintiff] fails to pursue its administrative remedies once the Action Closing Prosecution issues.” Id. at 4.

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Chief Judge Sleet recently issued an order construing several disputed terms of pharmaceutical patents directed to metered-dose inhalers. Judge Sleet construed the following terms of the patents, which are listed in the Orange Book for Teva’s Proair HFA product:

– “no surfactant”
– “pharmaceutical suspension aerosol formulation”
– “substantially free of surfactant”
– “substantially completely insoluble”
– “in the amount of 11.4% w/w”
– “in the amount of 0.4% w/w”
– “in the amount of 88.2% w/w”
– “actuator”
– “a rotary gear…comprising a wheel mounted on a spindle which wheel having a plurality of ratchet teeth around its periphery”
– “a driver for driving said rotary gear in step-wise fashion in response to displacement of the actuator”
– “a pawl to prevent reverse rotation of the rotary gear… wherein the pawl comprises at least two ratchet teeth each for engaging with the ratchet teeth of the wheel to prevent reverse rotation of the rotary gear, the at least two ratchet teeth being radially spaced such that one of the at least two ratchet teeth of the pawl engages with the ratchet teeth of the wheel following each step of the step-wise rotary motion of the rotary gear”
– “display coupled to the rotary gear … having a visible array of incrementing integers on a surface thereof indexable by a single integer in response to each step of the step-wise rotary motion of the rotary gear”
– “the pawl”
Teva Branded Pharmaceutical Products R&D, Inc., et al. v. Perrigo Pharmaceuticals Co., et al., C.A. No. 12-1101-GMS, Order at 1-18 (D. Del. May 12, 2014).

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Chief Judge Gregory M. Sleet recently construed claim terms of five patents in an ANDA case relating to lubiprostone capsules, used for the treatment of constipation. Sucampo AG, et al. v. Anchen Pharmaceuticals, Inc., et al., C.A. No. 13-202-GMS (D. Del. May 5, 2014). The Court first adopted the parties’ proposed construction of the claim term “13, 14-dihydro-15-keto-16, 16-difluoro prostaglandin E1” and then construed the disputed claim term “medium chain fatty acid” to mean “saturated or unsaturated fatty acids having 6-14 carbon atoms which may have a branched chain that are components of a medium chain fatty acid triglyceride.”

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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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