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Judge Leonard P. Stark recently transferred a case to the Northern District of California based in part on the plaintiff’s actions and representations made to the Judicial Panel on Multidistrict Litigation. Genetic Technologies Ltd. v. Natera, Inc., C.A. No. 12-1737-LPS (D. Del. Apr. 15, 2014). Specifically, the Court noted that “[b]efore the [JPML], [the plaintiff] contended the Northern District was preferable to Delaware as a venue for centralizing pre-trial litigation.” Id. at 3. The JPML declined consolidating the cases into an MDL, leaving the plaintiff litigating in Delaware, North Carolina, New Jersey, and the Northern District of California. Although Judge Stark found that the plaintiff had rational reasons for wanting to litigate this action in Delaware, the Court found that the plaintiff’s representation to the JPML, as well as several other Jumara factors (including, notably, the convenience to the parties of litigating in Northern California, where the defendant’s principle place of business is located and which is some 2,500 miles closer to the plaintiff’s Australian headquarters than Delaware), weighed in favor of transferring the case. Id. at 2-4.

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Chief Judge Gregory M. Sleet recently issued a memorandum and order resolving a post-trial dispute regarding the appropriate royalty rate to apply to post-verdict infringement. Telcordia Technologies, Inc. v. Cisco Systems, Inc., C.A. No. 04-876-GMS (D. Del. Apr. 14, 2014). The Court previously had found that a permanent injunction was not warranted, and ordered the parties to negotiate the terms of a reasonable royalty rate for post-verdict infringement. Id. at 1. The parties were unable to reach agreement, however, and ultimately submitted competing proposals that amounted to a difference of roughly $8.9 million. Id. at 4.

Chief Judge Sleet noted that royalty rates applied to post-verdict ongoing infringement frequently exceed royalty rates found at trial because of the parties’ changed legal status following a verdict, but that market circumstances also need to be considered in the analysis. Id. at 7. The Court found that the plaintiff was in a stronger bargaining position after prevailing at trial, and on appeal, but was not in a strong enough position to warrant the 3.5% “market rate” the plaintiff proposed with respect to its ‘763 and ‘633 patents (through the expiration of the ‘763 patent, after which the plaintiff proposed a 2% market rate through the expiration of the ‘633 patent). Id. at 8. The defendant proposed an “effective rate” of 0.64% on the two patents. The Court ultimately found that a 1.25% royalty rate on the ‘763 patent, and a 1% royalty rate on the ‘633 patent, were appropriate under the circumstances. Id. at 9.

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Judge Richard G. Andrews construed the following claim terms of U.S. Patents Nos. 6,335,031 and 6,316,023 at issue in the Novartis Pharmaceuticals Corp., et al. v. Alvogen Pine Brook, Inc., et al., C.A. No. 13-52-RGA (consol.) (D. Del. Apr. 7, 2014) litigation:

“antioxidant”
“about 0.01 to about 0.5 percent by about 0.01 to about 0.5 percent by
weight”
“diluent or carrier”
“a/the composition”
“an amount of antioxidant effective to stabilize Compound A from degradation”
“stabilizing”

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Judge Sue L. Robinson recently sanctioned a plaintiff for its objectively unreasonable claim construction position. Technology Innovations, LLC v. Amazon.com, Inc., Civ. No. 11-690-SLR (D. Del. Mar. 31, 2014). At issue was the plaintiff’s allegation (later withdrawn following a motion to dismiss and for sanctions) that Amazon.com’s Kindle product infringed the plaintiff’s U.S. Patent No. 5,517,407, titled “Device for including enhancing information with printed information and method for electronic searching thereof.” As the Court explained, “[t]he specification is replete with references to providing ‘enhancing information’ to aid the reader of ‘printed information’ and makes it clear that ‘printed information’ refers to pages provided in a conventional book.” Id. at 22. Further, the “background of the invention indicates that the patentee was concerned with problems associated with printed and electronic indices then available to users of printed publications. . . . The patent distinguishes electronic books from the present invention and points out that ‘they do not enhance printed publications. . . . Additionally, figures 1-8 illustrate a book with printed pages.” Id.

The Court therefore explained that the plaintiff’s “definition for ‘printed’ – to encompass ‘any configuration in which information is presented for direct human perception’ – is astonishingly broad.” Id. at 23. The plaintiff’s proposed construction was based on a sentence in the specification referring to a printed work as a “configuration in which information is presented for direct human perception.” Id. at 23-24. But the Court noted that the plaintiff ignored the next sentence in the specification, which provided, “[t]hus, for example, in addition to a cloth- (or other hard-) bound, or soft-bound book, work 11 may be a magazine, or other paper based media . . . .” Id. at 24. Finding that it was not objectively reasonable in this case to allege that a Kindle would infringe the ‘407 patent, the Court sanctioned the plaintiff under Rule 11. Id. at 24.

The Court also granted the defendant’s motion for summary judgment of invalidity of the plaintiff’s remaining asserted U.S. Patent No. 7,429,965, based on indefiniteness.

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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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