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In Evonik Degussa GmbH v. Materia Inc., C.A. No. 09-636-NLH/JS (D. Del. June 30, 2014), Judge Noel L. Hillman, sitting by designation, considered plaintiff’s motion for partial summary judgment, arguing that defendant was precluded from raising claims or defenses in this case that had been previously litigated and decided in an interference proceeding before the USPTO.  Plaintiff argued that both claim and issue preclusion applied to issues of priority and validity.

Having first concluded that the PTO’s decision in an interference proceeding can be subject to claim or issue preclusion, id. at 14, the court denied the motion in most respects, largely because the claims at issue in the litigation recited broader subject matter than those at issue in the interference proceeding.  See, e.g., id. at 20-24.  The Court did grant the motion in part and precluded defendant from asserting invalidity under sections 102 and 103 based on issue preclusion.  Plaintiff argued the defendant was precluded from raising these arguments “because it chose not to assert such claims earlier out of self-interest.”  Id. at 30.  Applying case law from Delaware and other districts holding that patent validity is a single issue for purposes of issue preclusion, see id. at 31-32, the Court explained that since defendant “raised a validity challenge in the Interference, and validity is a single issue [for purposes of issue preclusion], [defendant] cannot later assert additional validity challenges under alternative theories of validity.”  Id. at 33.

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Chief Judge Leonard P. Stark recently made a ruling related to a protective order dispute in Andover Healthcare, Inc. v. 3M Company, C.A. No. 13-843-LPS, Oral Order (D. Del. June 29, 2014).  The Court denied plaintiff’s request that it be permitted to use defendant’s highly confidential information in related German proceedings. The Court explained that both German and U.S. law “provide other, appropriate mechanisms for Plaintiff to seek the relief it is requesting. Given the sensitivity to Defendant of the information Plaintiff seeks to use in Germany, and given that Plaintiff may have opportunities to present the evidence at issue to the German proceeding even after Plaintiff files a brief in Germany due June 30, it is reasonable to require Plaintiff to pursue the other mechanisms for the relief it is seeking.”

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In September 2012, plaintiff Joao Bock Transaction Systems filed suit against Jack Henry & Associates for infringement of U.S. Patent No. 7,096,003, which relates to security for financial transactions and wireless communication device authorization. Following briefing and oral argument, Judge Robinson issued her construction of several disputed claim terms:
– “At least one of . . . and”
– “Communication device”
– “Processes”
– “Processing”
– “Receiver”
– “Signal”
– “Transmitter”
– “Banking Transaction”
– “Central Transaction Processing Computer”
– “Electronic mail message”
– “Limitation”
– “Restriction”
– “Network computer”
– “Processing device”
– “Real time”
– “Transaction”
– “Transaction security apparatus”
– “Transmit(s)”
– “Transmitted”
– “Communication device associated with an individual account holder”
– “Containing information for authorizing or disallowing the transaction”
– “Determines whether the banking transaction is allowed or disallowed”
– “Information regarding a banking transaction”
– “Internet transaction”
– “Automated teller machine account”
– “[A] transmitter, wherein the transmitter transmits a second signal to the communication device or to a second communication device associated with the individual account holder, wherein the second signal contains information regarding the banking transaction”
– “[A] transmitter, wherein the transmitter transmits a periodic transaction record to the communication device or to a second communication device associated with the individual account holder, wherein the periodic transaction record shows a transaction or transactions on the checking account for a time period, wherein the periodic transaction record is transmitted to the communication device or to the second communication device at least one of automatically and in response to a request for the periodic transaction record”
– “[A] transmitter, wherein the transmitter transmits a second signal to the communication device or to a second communication device associated with the individual account holder, wherein the second signal contains information regarding the transaction”
Joao Bock Transaction Systems, LLC v. Jack Henry & Associates, Inc., C.A. No. 12-1138-SLR, Memo. Order at 5-20 (D. Del. June 30, 2014).

Important to her construction of these terms, Judge Robinson explained that the patentees “assert that the ‘003 patent should be recognized as having a priority date of August 8, 1996, the earliest filing date of its related patents, thus also establishing the temporal perspective for those of skill in the art. Without addressing in this order the question of whether the definitions constitute new matter and, therefore, support a later priority date, the court will address the extent to which, if at all, the court is bound by the multiple definitions the patentees choose to give certain claim language during the claim amendment process that took place in the PTO from October 2004 to September 2005. The definitions were not included in the specification, were not the subject of any commentary by the examiner, were made years after the earliest priority date, and were added for litigation purposes, that is, to differentiate the ‘003 patent from a related patent. Most significantly, the definitions added through the auspices of 37 C.F.R. 1.115 are worded in the disjunctive and, rather than narrowing the scope of the claim language or adding clarity to such, instead obscure the scope of the claims, thus confounding the public notice requirement of§ 112, ¶ 2. Given that the definitions are not ‘clearly stated,’ see Vitronics, 90 F.3d at 1582, the court rejects plaintiff’s argument that the court is obligated to embrace them for purposes of the claim construction exercise.” Id. at 4-5.

Because Judge Robinson’s constructions resulted in a narrower claim scope of the patent-in-suit than the scope of a related patent that had been the subject of a separate suit, she found that “the issue of invalidity common to each action [was not] substantially identical” and denied the defendant’s motion for summary judgment of invalidity based on collateral estoppel. Id. at 20 n.34.

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Chief Judge Stark recently announced his new procedures and form scheduling order for Non-ANDA patent cases (see here).  Yesterday, Chief Judge Stark announced that, effective July 1, 2014, Judge Stark will be following his new procedures for Discovery Matters and new procedures for Motions to Strike and Motions to Amend in ALL CIVIL CASES, regardless of when they were filed.  Those procedures are copied below and can be accessed via Judge Stark’s webpage under the “New Procedures” tab.  Judge Stark also posted to his webpage a “Revised Patent Form Scheduling Order” for ANDA patent cases on the “New Patent Procedures” tab.

“Discovery Matters” Procedures
a. Any discovery motion filed without first complying with the following procedures will be denied without prejudice to renew pursuant to these procedures.
b. Should counsel find, after good faith efforts – including verbal communication among Delaware and Lead Counsel for all parties to the dispute – that they are unable to resolve a discovery matter or a dispute relating to a protective order, the parties involved in the discovery matter or protective order dispute shall submit a joint letter in substantially the following form:
Dear Judge Stark:
 The parties in the above-referenced matter write to request the scheduling of a discovery teleconference.
 The following attorneys, including at least one Delaware Counsel and at least one Lead Counsel per party, participated in a verbal meet-and-confer (in person and/or by telephone) on the following date(s): __________________________
Delaware Counsel: ____________________
 Lead Counsel: ________________________
 The disputes requiring judicial attention are listed below:
 [provide here a non-argumentative list of disputes requiring judicial attention]
c. On a date to be set by separate order, generally not less than forty-eight (48) hours prior to the conference, the party seeking relief shall file with the Court a letter, not to exceed three (3) pages, outlining the issues in dispute and its position on those issues. On a date to be set by separate order, but generally not less than twenty-four (24) hours prior to the conference, any party opposing the application for relief may file a letter, not to exceed three (3) pages, outlining that party’s reasons for its opposition.
d. Each party shall submit two (2) courtesy copies of its discovery letter and any attachments.
e. Should the Court find further briefing necessary upon conclusion of the telephone conference, the Court will order it. Alternatively, the Court may choose to resolve the dispute prior to the telephone conference and will, in that event, cancel the teleconference.
Motions to Amend
a. Any motion to amend (including a motion for leave to amend) a pleading shall NOT be accompanied by an opening brief but shall, instead, be accompanied by a letter, not to exceed three (3) pages, describing the basis for the requested relief, and shall attach the proposed amended pleading as well as a “blackline” comparison to the prior pleading.
b. Within seven (7) days after the filing of a motion in compliance with this Order, any party opposing such a motion shall file a responsive letter, not to exceed five (5) pages.
c. Within three (3) days thereafter, the moving party may file a reply letter, not to exceed two (2) pages, and, by this same date, the parties shall file a letter requesting a teleconference to address the motion to amend.

 

Motions to Strike
a. Any motion to strike any pleading or other document shall NOT be accompanied by an opening brief but shall, instead, be accompanied by a letter, not to exceed three (3) pages, describing the basis for the requested relief, and shall attach the document to be stricken.
b. Within seven (7) days after the filing of a motion in compliance with this Order, any party opposing such a motion shall file a responsive letter, not to exceed five (5) pages.
c. Within three (3) days thereafter, the moving party may file a reply letter, not to exceed two (2) pages, and, by this same date, the parties shall file a letter requesting a teleconference to address the motion to strike.
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Judge Sue L. Robinson recently denied defendant Gevo, Inc.’s motion for reconsideration of the court’s May 19, 2014 order finding that Gevo did not adequately pursue its defenses of lack of enablement and written description during discovery and, therefore, could not present those defenses at trial.  Butamax™ Advanced Biofuels, LLC v. Gevo, Inc, et al., C.A. No. 11-54-SLR (D. Del. June 27, 2014).  Gevo now asserted that it could present the defenses without expert testimony, but the Court was not persuaded.  Even though Gevo disclosed the defenses in interrogatory responses, “Gevo did not substantially pursue these defenses through the course of discovery and Butamax was not given occasion to thoroughly vet such defenses in preparation for trial.  Moreover, until the motion [for reconsideration], Gevo did not provide the court with an indication that it would be appropriate to go forward with such defenses without expert testimony.”  Id. at 2.

 

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In Hand Held Products, Inc. v. Amazon.com, Inc., et al., C.A. No. 12-768-RGA-MPT (D. Del. June 24, 2014), Magistrate Judge Mary Pat Thynge construed several terms of U.S. Patent No. 6,015,088, entitled “Decoding of Real Time Video Imaging.”  For a number of the disputed claims, the Court analyzed defendants’ arguments for indefiniteness under the standard recently revised by the Supreme Court in Nautilus, Inc. v. Biosig Instruments, Inc., No. 13-369, 2014 WL 2440536 (U.S. June 2, 2014) and concluded that four means-plus-function terms (“processing means for processing an imaged target,” “display means for continually displaying a real-time image of said target from said imaging and processing means,” “image capture means for selectively capturing at least one image displayed by said display means,” and “output means for outputting the decoded bar-coded information to said display means”) did not adequately disclose a structure and thus were indefinite.  The Report and Recommendation also addressed whether the steps of the patent’s method claims have to be performed in the recited order, concluding that parts did and parts did not. See id. at 10-13.

The Court construed the following terms:

“target”

“having at least one of optically readable and bar coded information contained thereupon”; “having at least one of optically readable and bar coded information contained therein”

“continually displaying a real time image of said target”

“selectively capturing and storing an instantaneous image of said target into the memory of a computer”; “selectively capturing . . . an instantaneous image”; “selectively capturing at least one image displayed by said display means”

“storing”

“bar-coded information”; “bar-code readable information”

“decoding bar-code information if bar-code readable information is contained on said instantaneous stored image”

“imaging means for imaging a target of interest, said target having at least one of optically readable and bar-coded information contained therein”

“target . . . therein”

“scanning means for scanning said at least one captured image and for determining the presence of bar-coded information in the field of view of said at least one captured image”

“decoding means for decoding any bar-coded information detected by said scanning means”

“discrimination means for discriminating the type of bar-coded information present in said at least one captured image”

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Judge Sue L. Robinson recently entered, sua sponte, a limited prosecution bar due to the “growing proliferation of parallel proceedings between federal trial courts and the [PTO] . . . .”  Versata Software, Inc. v. Callidus Software, Inc., Civ. No. 12-931-SLR (D. Del. June 19, 2014).  The prosecution bar entered by Judge Robinson provided:

Plaintiffs shall designate one or  more attorneys on their trial team who will be responsible for consulting with counsel handling any administrative review process, in order to coordinate coherent and consistent positions in various proceedings.  These designated attorneys shall not be involved in reviewing the highly confidential source code of defendant, nor take part in discussing highly confidential source code with co-counsel or any witness in the case, nor shall they read any report from any witness in the case concerning such highly confidential source code, nor attend portions of any deposition (nor read portions of transcripts of such depositions) where highly confidential source code is mentioned or discussed.  They may participate in all other aspects of the case.  If it is likely that highly confidential source code will be used at trial, the parties shall discuss the operation of this limited prosecution bar at the pretrial conference.

 

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Judge Leonard P. Stark recently considered Google’s motion to stay proceedings brought by NPE Walker Digital pending the conclusion of the Patent Trial and Appeal Board’s (“PTAB”) Covered Business Method (“CBM”) review of the patents-in-suit.  Walker Digital, LLC v. Google, Inc., C.A. No. 11-318-LPS (D. Del. June 24, 2014).  Judge Stark ultimately determined that no factor favored a stay.  Regarding simplification of issues, Judge Stark noted that the estoppel effects of the CBM process could simplify issues in this case (even if the PTAB does not cancel all of the asserted claims), but not by much because the PTAB rejected several of Google’s grounds for CBM review.  Id. at ¶ 3.  In addition, the fact that discovery was complete and all case dispositive motions had been fully briefed, “strongly disfavor[ed] a stay.”  Id. at ¶ 4.  Prejudice to Plaintiff, Walker Digital, also disfavored a stay because, while it is true that Walker Digital is an NPE, “it is also true that the longer Google is allowed to engage in allegedly infringing activity, the lower the value of the patents becomes as licensing assets.”  Id. at ¶ 5.  Last, a stay would not alleviate any burden to the Court or the parties due to the late stage of the case.  Id. at ¶ 6.

 

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In Cornerstone Therapeutics Inc., et al. v. Exela Pharma Sciences, LLC, et al., C.A. No. 13-1275-GMS (June 16, 2014), Chief Judge Gregory M. Sleet denied the defendants’ motion to transfer to the Western District of North Carolina.

Examining the Jumara factors, the Court explained that plaintiff’s forum choice was “not entitled to the usual paramount deference because none of the plaintiffs are physically located in Delaware,” although their forum choice was still entitled to greater weight than that of defendants.  Id. at 2.  As this is an ANDA case, where the claim arose was governed by “where the ANDA submission was submitted;” here that was North Carolina so this factor weighed in favor of transfer.  Id. at 2-3 However, given that most of the defendants were incorporated in Delaware, convenience of the parties weighed against transfer, as did the location of books and records and the convenience of witnesses where defendants did not show why the evidence and witnesses could not come to Delaware.  Id. at 3.

As to the public interest factors, the Court was not persuaded by defendants’ arguments regarding “the convenience of undisclosed witnesses” and “the congestion of the docket in Delaware.  Although the number of cases per judge and time to trial are greater in Delaware, it is undisputed that Delaware judges have much greater familiarity with patent cases by virtue of their patent-heavy dockets,” which would allow for administrative efficiencies.  Id. at 4.

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In a recent order, Judge Sue L. Robinson denied defendants’ motion for leave to file a second amended answer that would include inequitable conduct counterclaims and affirmative defenses.  Carrier Corp. v. Goodman Global, Inc. et al., C.A. No. 12-930-SLR (D. Del. June 19, 2014). With respect to its inequitable conduct allegation, defendants claimed that the Aquasmart HVAC system (“Aquasmart”) constituted prior art to the patent-in-suit, and the inventors “misrepresented and omitted information regarding Aquasmart to the USPTO during the prosecution” of the patent-in-suit.  Id. at 2.

Judge Robinson noted that defendants filed their second amended answers “ten months after the deadline to amend the pleadings and two months after the close of fact discovery,” and that a “certain prejudice to plaintiff is inherent on [such a] timeline.” Id. at 4 (quoting Asahi Glass Co., Ltd. v. Guardian Indus. Corp., 276 F.R.D. 417, 420 (D. Del. 2011)). Accordingly, under Fed. R. Civ. P. 16(b)(4),  defendants were required to show “good cause” for the Court to grant  leave to amend. Id.

Finding that defendants failed to show good cause, Judge Robinson denied defendants’ motion. Specifically, Judge Robinson explained that defendants’ inequitable conduct allegation “rests on a document produced nearly seven months prior to the filing of the motion for leave to file second amended answers, as well as upon publicly available documents [defendants] discovered independently.”  Id. Further, defendants “did not ask the inventors about Aquasmart during their depositions.”  Id.  Taken together, Judge Robinson concluded that “[t]he timing of [defendants’] motion, coupled with previously produced discovery and publicly available documents relating to Aquasmart, negate the argument for good cause.” Id.

Judge Robinson also dismissed defendants’ motion to file supplemental briefing related to inequitable conduct as moot, as that motion related only to a patent that was dismissed from the suit by stipulation. Id. at 5 n.4; 1-2 n.1.
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