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In Masimo Corporation v. Philips Electronic North America Corporation, et al., C.A. Nos. 09-80, 11-742-LPS-MPT, Magistrate Judge Mary Pat Thynge previously issued three Reports and Recommendations addressing the parties’ motions for summary judgment and Daubert motions. Having heard oral argument on the parties’ objections, Judge Leonard P. Stark has issued rulings relating to the Reports. Memorandum Opinion (D. Del. Mar. 31, 2014).

The Court first offered “comments about how it views objections to Reports and Recommendations filed by Magistrate Judges.” Id. at 2. While the only issues on appeal to the District Court are those that are specifically addressed in objections, parties do not waive their right to appeal to the Federal Circuit if they do not lodge objections to a Report and Recommendation. Id. at 3-5. The Court then explained that “generalized” objections to a Report and Recommendation are “unhelpful” and insufficient to preserve a party’s right to District Judge review; the Court, therefore, construed any objection raised by the parties here, but not briefed, as waived with regard to review by a District Judge. Id. at 5-7. It was also inappropriate for a party to incorporate underlying briefs by reference in their objection “as a way of avoiding the page limits on objections.” Id. at 8. Parties must also adhere to their original arguments when objecting, and not offer new ones, but may “explain their view of the Magistrate Judge’s determinations and analysis.” Id. at 9. Finally, parties must identify and properly apply the proper standard of review. Id. at 10. “As the District Judge is essentially undertaking appellate review of the work of a Magistrate Judge, it is imperative that the parties accurately articulate and apply the correct standard of review.” Id.

Turning to the parties’ objections, the Court first reviewed Magistrate Judge Thynge’s findings on summary judgment for invalidity and non-infringement de novo, and sustained a number of the parties’ objections. See id. at 10-29. The Court did not adopt the following findings of the Report, concluding that genuine issues of material fact existed: (1) the Report’s grant of Philips’ motion for summary judgment of invalidity of Masimo’s ‘222 patent due to lack of written description, id. at 10-16; (2) the Report’s grant of Philips’ motion for summary judgment of non-infringement of Masimo’s ‘984 patent (because Philips did not oppose Masimo’s objection), id. at 16-17; (3) the grant of Philips’ motion for summary judgment on no literal infringement of Masimo’s ‘535 patent , id. at 22-23. Finally, the Court sustained Philip’s objection to the Report and granted its motion for summary judgment of no infringement of Masimo’s ‘272 patent. Masimo’s arguments for the denial of summary judgment here were based on its expert’s “conclusory opinion and do not provide sufficient bases for a finding of infringement.” Id. at 28-29. As to Magistrate Judge Thynge’s later Report that decided motions for summary judgment on damages issues (willfulness and lost profits) , the Court adopted that Report in full. Id. at 37-39.

The Court also reviewed non-dispositive pre-trial matters, including Daubert motions (previously discussed here), for clear error or abuse of discretion. The Court sustained Masimo’s objection that it could not challenge the status of a certain reference as prior art. Id. at 17-19. It also sustained Masimo’s objection to the finding that its damages expert was “unfamiliar with the supporting documents and other details for his assumptions.” Id. at 33. The Court concluded that the expert, “far from relying on a third party [as had been done in a case cited in the Report] . . . legitimately relied on his staff and dictated the parameters of the analysis.” Id. 33-34.
While the Court overruled Masimo’s objection to the recommendation that its expert could only testify as to the “lack of peer reviewed studies on Nonin PureSat showing that it is an acceptable alternative, but cannot opine or testify that Nonin PureSat is an unacceptable alternative due to the lack of such studies,” id. at 32 (emphasis in original), it did note a concern about whether “it can effectively walk the fine line draw by today’s ruling.” Id. at 33. “It may be appropriate to reevaluate these issues in the context of a motion in limine, if either side chooses to file on in connection with preparation of the final pretrial order.” Id.

In a subsequent Order, Judge Stark supplemented His Honor’s review and overruled an additional objection of Phillips to the denial of its motion for summary judgment of invalidity of Masimo’s ‘984 patent, an objection that had not been covered in the March 31 opinion. Order(D. Del. Apr. 14, 2014). In addition to the fact that Magistrate Judge Thynge had idenfied issues of material fact, Judge Stark had also sustained Masimo’s objection to the finding that it could not challenge a certain reference’s status as prior art to the ‘984 patent. This also created a material issue as to whether the reference was prior art. Id. at 3.

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In Intellectual Ventures I LLC v. Canon Inc., et al., C.A. No. 11-792-SLR (D. Del. Apr. 10, 2014), Judge Sue L. Robinson construed a number of claim terms across six patents:

“Selecting for magnification a selected region of an original image in the graphical user interface”
“Floating plane”
“Logical operators to provide different blending/merging effects”
“Means for displaying a composite image … further wherein individual pixels of the means for displaying can be dedicated simultaneously to both the main image and the representation of at least one input zone”
“layer”
“Enhancement layer having a doping concentration that is less than the first doping concentration”
“image sensor”
“A silicide layer on a portion of the image sensor wherein an area overlying the pinned photodiode is devoid of the silicide layer”
“A field stop layer being formed beneath the field area and being wider than the field area in a direction towards the active area”
“A channel area having a bottle-neck structure connecting to the photodiode area and the floating diffusion area”
“Multi-layer interlayer insulating films … stacked in at least two layers of oxide film having different density and the refractive index so that the density and the refractive index of the upper interlayer insulating film becomes lower than that of the lower interlayer insulating film as the multilayer interlayer insulating films proceed upward”
“A light shield layer and an element protecting film sequentially stacked on the multi-layer interlayer insulating film”
“Wherein the density of the oxide films becomes higher in the order of PE-CVD<HDP-CVD<LP-CVD<thermal oxidations”
In its Order, the Court also held that certain claims of U.S. Patent No. 6,121,960 were invalid under Section 112. As to the claim term “clear space around a blended area to highlight the area of blending,” the Court found its claim was invalid as lacking written description and as indefinite. See id. at 3-4. The “clear space” limitation only appeared in the claim itself; the portion of the specification identified by plaintiffs in support did not indicate the meaning of this term.

The Court also found other claims of this patent invalid due to the indefiniteness of means-plus-function terms “a computing device for providing a main image” and “means for computing, the means for computing providing a main image.” See id. at 4-9.

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In a recent memorandum opinion, Judge Richard G. Andrews denied defendant’s partial summary judgment motion of indefiniteness. Pi-Net International Inc. v. JPMorgan Chase & Co., C.A. No. 12-282-RGA (D. Del. Apr. 7, 2014). Given the potential for judicial efficiency, Judge Andrews had granted defendants leave to file their partial motion for summary judgment, in which it was argued that the following five terms, which appeared in several claims of the three patents-in-suit, were indefinite:

(1) “means for transmitting a transaction request from said transactional application”;
(2) “means for processing said transaction request”;
(3) “a computer system executing the Back-end transactional application for processing the transaction request in real-time”;
(4) “keeping a transaction flow captive”;
(5) “routed transactional data structure.”

Id. at 2. As to the first two terms, defendant argued that the terms were “computer-implemented means-plus-function terms for which no algorithm is disclosed.” Id. Judge Andrews explained that in general, when there exists the “special case where the corresponding structure of a means-plus-function term is a computer, the patent must disclose an algorithm for performing the claimed function.” Id. at 6. Judge Andrews further explained, however, that there is a “narrow” exception to that general rule: the Federal Circuit has held that “it is ‘not necessary to disclose more structure than the general purpose processor’ when the claimed functions ‘can be achieved by any general purpose computer without special programming.’” Id. (quoting In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011)).

As Judge Andrews explained, “[a]t this stage, the Court cannot rule out the possibility that a general purpose computer without special programming could perform the claimed function, or that an algorithm is disclosed.” Id. at 8. Specifically, Judge Andrews explained that defendant argues strenuously that the terms are invalid because the functions at issue require more than simply plugging in a general purpose computer.” Id. at 12. Judge Andrews explained, however, that in order to agree with defendant’s position, “an expert opinion comparing the functional capabilities of a general purpose computer during the relevant time frame with the disputed functionalities might have been helpful.” Id. Defendant, however, did not provide any such opinion. Judge Andrews thus concluded that based on the current record, which lacked “the benefit of a claim construction hearing, it [was] difficult to say that no disputed issue of material fact exists regarding whether the claimed functions could have been performed by a general purpose computer without special programming.” Id. at 13. Judge Andrews additionally noted that even if the exception for a “general purpose processor” did not apply, “the flow chart in Figure 8, common to all three patent specifications, might be sufficient to satisfy the algorithm requirement.” Id. at 12.

As to the third term, Judge Andrews noted in a parenthetical that a court will not construe a limitation as a means-plus-function term if it contains a term that “is used in common parlance or by persons of skill in the pertinent art to designate structure.” Id. at 13. As Judge Andrews explained, the claim term at issue included “computer system,” and therefore could not be said to be “devoid of anything that can be construed as structure.”Id. at 15. In other words, “[a] computer system is a physical structure that [was] sufficient to prevent [defendant] from rebutting the presumption” that a term that does not contain the word “means” should not be construed as a means-plus-function term. Id.

As to the last two terms, plaintiff asserted that they were “insolubly ambiguous because the patentee did not define them in the specification or the prosecution history and they do not have a generally accepted meaning to a PHOSITA.” Id. at 2-3. Judge Andrews explained that “[a]lthough it does appear that the link between [plaintiff’s expert’s] cited passages and his proposed definitions is somewhat tenuous in places, there is no competing declaration or affidavit from [a defendant] expert for the Court to rely upon.” Id. at 16. That is, “[w]ithout an opposing expert to identify the deficiencies, if any, in [plaintiff’s expert’s] declaration, it is difficult to say that his opinion regarding a PHOSITA’s understanding of the claim language is incorrect.” Id.

In accordance with the analysis above, Judge Andrews denied defendant’s partial motion for summary judgment.

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Judge Robinson has issued a decision on several pending motions to dismiss for lack of subject matter jurisdiction in cases filed by plaintiff Data Speed Technology LLC. The moving defendants alleged lack of standing to sue because the plaintiff had not demonstrated that it owns all rights in the patent-in-suit. Judge Robinson ultimately denied the motions, but not before indicating that the chain of ownership of the patent-in-suit was “in a muddle.” The chronology of ownership of the patent-in-suit was complicated, even including litigation over title to the application leading to the patent-in-suit, and Judge Robinson explained the chain of title in depth after pulling relevant facts from several different parties’ submissions. Ultimately, although she found the “efforts of [the inventors] to monetize their invention through [assignment to] another individual . . . [could] be charitably characterized as less than sophisticated,” for the purposes of the motions to dismiss, the chain of title had been sufficiently proven. Data Speed Tech. LLC v. EMC Corp., et al., C.A. No. 13-616-SLR, et al., Memo. at 10 (D. Del. Apr. 8, 2014).

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Judge Sue L. Robinson recently denied defendant’s motion for judgment on the pleadings based on the argument that defendant’s “cardboard box design is ‘not substantially similar’ to the patented design.” Poly-Am., L.P. v. API Indus., Inc., C.A. No. 13-693 (D. Del. Apr. 10, 2014). Judge Robinson compared the accused and patented designs to conclude that they are not “plainly dissimilar.” Id. at 3. To reach this conclusion, Judge Robinson applied the standard from Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008). In particular, a patentee cannot meet its burden of proving that the two designs “would appear ‘substantially the same’ to the ordinary observer” if the claimed and accused designs are sufficiently distinct.” Id. at 2. However, if the claimed and accused designs are not “plainly dissimilar, resolution of the question whether the ordnary observer would consider the two designs to be substantially the same will benefit from a comparison of the claimed and accused designs with the prior art . . . .” Id. Further, if a design contains both ornamental and functional features, the court may “‘separate the function and ornamental aspects’ because the scope fo the design claim ‘must be construed in order to identify the non-functional aspects of the design as shown in the patent.'” Id. (quoting Richardson v. Stanley Works, Inc., 597 F.3d 1288, 1293 (Fed. Cir. 2010).

Judge Robinson disagreed with defendant that certain features of the accused design were different than the patented design. In particular, defendant argued that the accused design had bottom flaps rather than a solid bottom. Id. at 3. Judge Robinson held that “[t]he solid bottom cannot be a design difference that renders the accused product substantially dissimilar because it is not an ornamental design feature.” Id. (citing Egyptian Goddess, 543 F.3d at 680). Judge Robinson also rejected defendant’s argument that “the accused design has no top flaps with no tabs and no slots.” Id. Judge Robinson noted that “an ordinary observer does not watch the box being formed in the manufacturing facility but, instead, sees the box when it is merchandised in the store. The ordinary observer, therefore, would not observe the tabs and slots, as the box top remains closed during the normal use of the container.” Id. Judge Robinson also found that there remained issues of fact whether certain features of the accused design, such as the perforated opening of the accused design is a relevant difference, such that “an ordinary observer would acutally open the accused box to its full extent if not necessary to reach the product.” Id. at 4. Judge Robinson also declined to find as a matter of law that the “overall visual differences between the accused design and patented design are greater than the differences between the patented design and the prior art.” Id. at 6. (citing Egyptian Goddess, 543 F.3d at 678).

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In Microsoft Corporation v. DataTern, Inc., the Federal Circuit made clear that conditional counterclaims and conditional statements of infringement alleged against a declaratory judgment plaintiff are insufficient to establish declaratory judgment jurisdiction. The Court noted, “[a] declaratory judgment plaintiff must plead facts sufficient to establish jurisdiction at the time of the complaint, and post-complaint facts cannot create jurisdiction where none existed at the time of filing.” The Court further noted that, even if post-complaint facts could be considered in evaluating DJ jurisdiction, the defendant/patentee’s conditional allegations and a refusal to grant a covenant not to sue are not the type of facts to support DJ jurisdiction. …

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Following the jury’s verdict of no infringement and invalidity in Personalized User Model, L.L.P. v. Google, Inc., C.A. No. 09-525-LPS, on April 7, Judge Leonard P. Stark issued a letter to the parties, having completed review of the parties’ proposals for how the case should proceed, as well as their motions for judgment as a matter of law (“JMOL”).

The Court summarized its “tentative views” related to plaintiff’s motion for JMOL on infringement and no invalidity: it was “inclined to deny” them as it concluded that the jury could reasonably have found non-infringement and invalidity. See id. at 4-6. On the other hand, as to the jury’s verdict of breach of contract by plaintiff, the Court indicated that it was likely to grant JMOL to plaintiffs, based on Delaware statutory law. See id. at 6-8.

In conclusion, the Court advised that the parties should “determine whether they wish to further litigate JMOL issues and/or seek a new trial” and that the parties should meet and confer to “propose as compressed a schedule as possible for the submission of short briefs so the Court can determine in an efficient manner whether to adhere to its inclinations and enter judgment.” Id. at 8. Until these issues were resolved, the Court saw “no basis for the additional proceedings (i.e., a bench hearing on equitable issues and jury trial on damages) requested by defendant.” Id.

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Judge Andrews recently issued his amended construction of several disputed terms in U.S. Patent No. 6,565,514, a blood pressure system patent asserted by St. Jude against Volcano Corp. The Court construed the following terms:
– “Displaying said graph”
– “of the data resulting from said calculation”
– “Detecting continuously at least two physiological variables, arterial pressure (Pa) and distal coronary pressure (Pd), derived from the guidewire-mounted pressure sensor”
– “Sensor element”
In construing these terms, Judge Andrews also found that the term “of the data resulting from said calculation” was not indefinite. St. Jude Med., Cardiology Div., Inc., et al. v. Volcano Corp., C.A. No. 12-441-RGA, Or. at 1-5 (D. Del. Apr. 1, 2014).

Update:

Judge Andrews’ amendments above were to his original claim constructions from May, 2013. In 2013, Judge Andrews had engaged in expedited briefing and argument of claim construction based on the parties’ representation that such an exercise would resolve the litigation. As he has explained in yet another claim construction opinion, however, the prior claim constructions did not end the litigation and the Court has now addressed several other disputed terms in the patent-in-suit. St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., C.A. No. 12-441-RGA, Memo. Op. at 2 (D. Del. Apr. 22, 2014).

The new terms that Judge Andrews has construed are:

– “a ratio element, said ratio element being capable of calculating a ratio Pd/Pa from said measured physiological variables (Pa, Pd) by processing said processable signals”
– “a marking element, said marking element being capable of marking automatically, or manually by an operator/user, at least one interesting point or portion on the graph”
– “a calculating element, said calculating element being capable of using said interesting point on the graph for calculating a new physiological variable”
– “software code for performing the steps of claim 1″
– “a computer readable program for causing a processor in a control unit to control an execution of the steps of claim 1″
– “displaying intermediate and final results of the method of claim 1″

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Judge Stark recently issued his ruling on the issue of post-trial damages following a two-day bench trial. In June 2010, a jury found that the defendant’s products infringed the plaintiffs’ patents and awarded damages in the form of both lost profits and reasonable royalties for the period from March 2002 to December 31, 2009. The Court denied motions for judgment as a matter of law and a motion for a permanent injunction, and on appeal the Federal Circuit affirmed the judgment in all respects. The parties were then unable to agree on the amount of “supplemental damages” owed to the plaintiff for the period of January 1, 2010 to October 15, 2011, when the patents-in-suit expired. The Dow Chem. Co. v. Nova Chems. Corp., et al., C.A. No. 05-737-LPS Slip. Op. at 1-4 (D. Del. Mar. 28, 2014). Following a bench trial to determine the supplemental damages owed, Judge Stark found that the plaintiff was entitled to lost profits and reasonable royalties, accepting the plaintiff’s arguments as well as the plaintiff’s rebuttals to the defendant’s argument. Id. at 4-22. Judge Stark also found, however, that the plaintiff was not entitled to enhanced damages. The plaintiff requested enhanced damages for “willful post-judgment infringement during the sixteen months between when the Court denied [the plaintiff’s] request for a permanent injunction and the expiration of the patents-in-suit.” But as Judge Stark explained, “the grant of [the defendant’s] motion for summary judgment of no willfulness effectively decided this issue” and the “Court is not persuaded it should revisit the question.” Id. at 22.

Interestingly, Judge Stark also had to consider whether to stay entry or execution of the judgment until after completion of an ongoing reexamination of the patents-in-suit at the PTO. Although the defendant had already paid damages associated with the jury verdict, it argued that it should, at a minimum, pay the supplemental damages to an escrow account to mitigate the risk that it would be paying damages on patents that could be found invalid. Judge Stark acknowledged that these “arguments implicate potentially difficult questions. If the patents-in-suit are invalid, [the defendant] cannot infringe them, and should not have to pay [the plaintiff] anything further. But as of today the patents-in-suit remain valid . . . and weighing heavily against granting the requested stay, [the defendant] waited until very late in this litigation to initiate the reexaminations and to seek a stay. [The defendant] filed its petitions for reexamination of the patents-in-suit on December 17, 2012, more than seven years after this case was filed and more than two years after the jury’s verdict on infringement and invalidity. Under the circumstances, the Court believes the most appropriate exercise of its discretion is to deny the requested stay.” Id. at 23-24.

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OpenTV, a Delaware corporation with a California principal place of business, sued Netflix, also a Delaware corporation with a California principal place of business, for infringement of patents related to technologies for “over-the-top” delivery of movies, television, and other media via the Internet. Netflix filed a motion to transfer to the Northern District of Delaware, which Chief Judge Sleet granted.

Considering the Third Circuit’s Jumara factors, Judge Sleet found that “[a]lthough the plaintiff’s choice of venue is ordinarily entitled to deference, its preference is ‘entitled to less than the paramount consideration’ when it files suit where it is incorporated but not physically located. Here, OpenTV’s preferred forum is Delaware, where it is incorporated, but Open TV’s principal place of business is in Northern California. Therefore, the court will not accord substantial weight to OpenTV’s choice of Delaware.” This factor, therefore, weighed slightly in favor of transfer to California. OpenTV, Inc. v. Netflix, Inc., C.A. No. 12-1733-GMS, Memo. at 3 (D. Del. Mar. 31, 2014) (citations omitted). Additional facts that weighed in favor of transfer included that the accused products were developed in California, the parties could more easily and cost-effectively litigate in California, and relevant witnesses including the inventors and third party witnesses were in California. Id. at 4-8.

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