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.
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.
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.
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”
– “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).
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.”
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.
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.
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.
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).
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).
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.