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In Lambda Optical Solutions, LLC v. Alcatel-Lucent USA Inc., et al., C.A. No. 10-487-RGA-CJB (D. Del. July 31, 2015), Magistrate Judge Christopher J. Burke recommended denial of Defendants’ motion for summary judgment of invalidity based on anticipation and obviousness. The Court first recommended denial as to anticipation because it concluded that issues of material fact remained as to whether the claimed anticipatory references (printed publications) were enabling.  The Court first concluded, as to whether there is a presumption of enablement of prior art publications, that it was in agreement with other decisions of the District Court that it should presume a printed publication is enabled.  Id. at 11-12.  However, the Court ultimately found that there were genuine issues of material fact as to enablement of the prior art based on how long it took between publications of those articles sand when Defendants introduced an applicable commercial product.  See id. at 13-14. As to obviousness, the Court also found issues of material fact remained upon review of the record, including expert testimony.  As to objective indicia of non-obviousness, the Court accepted Plaintiff’s position that the uncontested commercial success of Defendants’ accused products was relevant and contributed to the defeat of summary judgment: “[w]hile [Defendants] may later prove that all of its products that are at issue at trial do not infringe . . . the evidence put forth by [Plaintiff] as to such products may be considered at the summary judgment stage.”  Id. at 20.

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In Butamax Advanced Biofuels LLC v. Gevo, Inc., C.A. Nos. 12-1036-SLR; 12-1200-SLR; 12-1300-SLR (D. Del. Aug. 3, 2015), Judge Sue L. Robinson considered the parties’ various dispositive motions on infringement and invalidity.  The Court granted Defendants’ motion as to invalidity for one patent, based on indefiniteness, as well as their motion for summary judgment of no willfulness.

As to one patent, the Court concluded that the asserted claims’ “% identity” language was indefinite.  See id. at 4-13.  It therefore granted summary judgment as to invalidity and did not consider infringement, as the indefiniteness of the claims prevented a “meaningful infringement analysis.”  Id. at 13.

As to another group of patents, however, the Court found issues of material fact remained as to validity and infringement.  As to questions of enablement and written description, it noted that “[t]he art in the case at bar is generally unpredictable. The disagreement between the experts on whether one of ordinary skill could practice the invention without undue experimentation and whether the inventors had possession of the invention present genuine disputes of material fact better left to the province of the jury.”  Id. at 18.  Similarly, as to infringement, it concluded that “the expert opinions are in direct conflict, therefore, there are genuine issues of material fact as to” infringement, and thus denied Plaintiff’s motion for summary judgment of infringement.  Id. at 19.

As to willful infringement, the Court granted Defendants’ motion, noting that the Court had granted their motion as to indefiniteness one one patent, and Defendants had “at minimum . . . credible and reasonable theories supported by expert testimony” for invalidity and non-infringement as to the other patents.  Id. at 20-21.  Additionally, while “[t]he court recognize[d] [Plaintiff’s] arguments against summary judgment of no willfulness based on the concurring opinions in both Halo Elecs., Inc. v. Pulse Elecs.,Inc., 769 F.3d 1371, 1383 (Fed.Cir.2014) (O’Malley, J., concurring), and Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837, 847 (Fed. Cir. 2015) (Hughes, J., concurring), calling for a review of the willfulness jurisprudence.  . . . the court decline[d] to depart from the application of the controlling law, Seagate’s two-part test, until such time as the Federal Circuit does so.”  Id. at 21 n.18.

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Magistrate Judge Burke recently denied a defendant’s request to stay a patent infringement case against it pending resolution of its motions to dismiss the case and motion to transfer to the Northern District of California. As Judge Burke explained, “all that has occurred pursuant to the Scheduling Order in the case is that the parties have made some basic initial disclosures,” and “the Court expects to resolve Defendant’s motion to transfer in the near future . . . well before Defendant is required to provide more substantive contentions, and so the Court does not find Defendant’s simplification-related arguments persuasive.” Papst Licensing GMBH & Co. KG v. Lattice Semiconductor Corp., C.A. No. 14-1375-LPS-CJB, Memo. Or. at 1-2 (D. Del. Aug. 3, 2015). Additionally, Judge Burke found that denying the motion to stay would not significantly prejudice any party and would allow the case to proceed on the same schedule as two related cases, each of which also had a similar motion to transfer. Id. The denial was, however, with leave to renew because the Court intended to “address the stay issue again with the parties” once Judge Burke had resolved the motions to transfer. Id. at 2-3.

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Judge Gregory M. Sleet recently denied defendant Zonoff Inc.’s motion to dismiss plaintiff Icontrol Networks, Inc.’s motion to dismiss for failure to state a claim.  Zonoff Inc. v. Icontrol Networks, Inc., C.A. No. 14-1199-GMS (D. Del. July 31, 2015).  Zonoff moved to exclude Icontrol’s claims for failure to adequately plead indirect infringement and joint infringement, and for damages.  Judge Sleet found Icontrol’s allegations of induced infringement sufficient as Icontrol alleged “facts supporting a plausible inference that Zonoff had knowledge of the patents-in-suit”; and “that Zonoff took various actions supporting the plausible inference that it intended its customers to infringe the patents-in-suit.”  Id. at 2 n.1.  Judge Sleet noted that a plaintiff is not required to “‘prove its case at the pleading stage.'”  Id. (quoting In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1293, 1340 (Fed. Cir. 2012) (summary of opinion by Dennis Crouch available at Patently-O).  Regarding contributory infringement, Judge Sleet found that Icontrol adequately pled that Zonoff’s accused products had no substantial non-infringing uses because it pled that “Zonoff’s software must infringe no matter how it is used . . . . ”  Id.  Judge Sleet also rejected Zonoff’s argument that Icontrol was obligated to plead joint infringement because “the claims at issue are not so clear that the court is able to make such a determination [that the method claims implicate joint infringement] without more information.”  Id.  Finally, Judge Sleet rejected Zonoff’s argument that Icontrol’s claims for damages should be dismissed because Icontrol did not allege that its products complied with the marking statute, 35 U.S.C. § 287.  Id.  Judge Sleet noted that Zonoff had actual notice of infringement at least as of the filing of the complaint and that the “notice requirements imposed by § 287 do not apply to all patented inventions,” such as patents directed to a process or method.  Id.

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Magistrate Judge Christopher J. Burke recently considered defendant Plaid Technologies Inc.’s motion to stay this action pending the Court’s resolution of defendant’s motion to dismiss all claims of the seven asserted patents-in-suit as patent-ineligible under 35 U.S.C. § 101.  Yodlee, Inc. v. Plaid Technologies Inc., C.A. No. 14-1445-LPS-CJB (D. Del. Jul. 20, 2015).  In denying defendant’s motion, Judge Burke noted that if the motion to dismiss is denied, little efficiency would have been gained.  Id. at 4-5.  Moreover, due to the large number of patents and claims at issue (7 and 162, respectively), “it is reasonable to infer that . . . there is a greater likelihood that a portion of the case will survive the motion to dismiss.”  Id. at 5.  Ultimately, Judge Burke noted that this “simplification of the issues” factor was neutral.  Regarding stage of the litigation factor, Judge Burke noted that although some discovery had progressed, the early stage of the litigation favored a stay.  Id.  at 7.  Finally, regarding undue prejudice, Judge Burke found this factor favored a stay noting that the parties are competitors and that there was evidence that competition from defendant had “financially harmed” plaintiff in the past and  likely would in the future.  Id. at 13.

Ultimately, Judge Burke decided a stay was not warranted:

On balance, the possibility of simplification of the issues is neutral, the status of the litigation weighs squarely in favor of a stay, and the prospect of undue prejudice weighs squarely against a stay. While reasonable minds could disagree as to the right outcome, the Court is ultimately persuaded that the prospect for harm to Plaintiff were a stay granted is the most compelling factor here. Therefore, the motion to stay is DENIED.

Id. at 15.

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This case was stayed pending a reexamination at the PTO and, although the stay was lifted in 2013, there had been “no activity since October 2013, while the parties continue[d] with inter partes review and covered-business-method review proceedings.” In March 2015, however, the plaintiff filed a “motion to reopen discovery to gather information concerning the prior art status of a particular reference.” Judge Sleet recently denied that motion. Fifth Market, Inc. v. CME Group, Inc., et al., C.A. No. 08-520-GMS, Or. at 1 (D. Del. July 31, 2015).

Judge Sleet explained his view of the request: “Understandably, the parties have been postponing the litigation of this case while the USPTO reviews the patents-in-suit and after appeals are exhausted. Thus, in the court’s view, this case is effectively, if not formally, stayed. And despite showing no interest in reviving its case in district court, the plaintiff now requests that the court order discovery to aid its efforts before the USPTO. The court declines to do so. . . . In short, [the motion] is improper for a number of reasons . . . . The court will not reopen discovery in this matter unless agreed upon by both parties or better justification is provided.” Id. at 2 n.1. Although the plaintiff claimed it needed the discovery into the alleged prior art for purposes of the IPR and this suit, Judge Sleet found that “plaintiff has made no challenge to the [reference] in this matter, to this court. . . . And the defendants are correct to note that the Protective Order between the parties forecloses the use of discovery materials ‘for any purpose other than prosecuting or defending claims in this action.’” Id. Furthermore, Judge Sleet found that there were procedures for the plaintiff to obtain this discovery in the PTO and that, if those procedures would not allow such discovery, the Court would not “undermine the procedures in place by offering an avenue to circumvent the rules.” Id.

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In a recent Report and Recommendation, Magistrate Judge Christopher J. Burke recommended that the court grant defendants’ motion for summary judgment regarding damages. Lambda Optical Solutions, LLC v. Alcatel-Lucent USA Inc., C.A. No. 10-487-RGA-CJB (D. Del. Jul. 29, 2015). First, defendants (collectively, “Alcatel”) argued that “Lambda cannot recover pre-suit damages from the date when LOS [, the assignee of the asserted patent,] stopped selling unmarked patented products (February 28, 2007) until the date it gave Alcatel notice of the patent by filing suit in this case (June 4, 2010).” Id. at 5. Considering Alcatel’s argument, Judge Burke was required to address a fairly unsettled question:  “whether a patentee that sells unmarked product, but later ceases such sales, becomes a non-producing patentee that may obtain damages under Section 287(a) once sales of the unmarked product cease.” Id. at 7. Judge Burke found that it did not, and therefore recommended that “Lambda is not entitled to damages for the time between when LOS stopped selling unmarked products and the date when Lambda filed suit.” Id. at 13.  Judge Burke reasoned this outcome was consistent with the actual language of Section 287(a), and comported with the policies underlying Section 287. See id. at 7-13. For example, Judge Burke noted that “if a patentee-plaintiff were able to return to the more favorable status of a nonproducing patentee simply by halting production of unmarked product, this would not encourage patentees in the first instance ‘to give notice to the public that the article is patented,’ nor would it ‘aid[] the public to identify whether an article is patented[.]’” Id. at 11. Alcatel also argued that Lambda was not entitled to damages based upon sales of Alcatel’s 1675 LambdaUnite product. Id. at 13. Judge Burke agreed with Alcatel and recommended granting summary judgment in its favor on this issue, finding that the product failed to “selectively provide optical coupling,” as required by the independent claims at issue. Id. at 14.

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Judge Gregory M. Sleet recently severed and stayed infringement claims against several banks relating to alleged infringement of mobile banking technology patents pending the resolution of claims against the manufacturer of the banks’ mobile banking applications.  Rothschild Mobile Imaging Innovations, LLC v. Mitek Systems, Inc., C.A. No. 14-617-GMS (D. Del. July 31, 2015).  As Judge Sleet explained, “the infringement claims against the Bank defendants are peripheral to the claims of infringement against Mitek because the Banks appear to have only been customers of Mitek’s alleged infringing technology.”  Id. at 5.  The Court added, “[a]djudication of the claims against Mitek will dispose of the claims against the Bank defendants as users of the products [and] [t]he presence of the Bank defendants as parties neither adds nor detracts from [plaintiff’s] patent infringement claim against Mitek.”  Id. at 6.  The Court found that the balance of factors favored staying the case pending the resolution of the claims against Mitek, and did not favor transferring the case to the Southern District of California, Mitek’s home forum.

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In Greatbatch Ltd. v. AVX Corporation, et al., C.A. No. 13-723-LPS (D. Del. July 28, 2015), Chief Judge Leonard P. Stark ordered a mechanism for reduction of asserted claims and prior art before trial.  Plaintiff would shortly elect no more than 15 claims, with no per-patent limit.  Here the Court adopted Defendants’ proposal over Plaintiff’s proposal for 24 claims.  10 days thereafter, Defendants would narrow prior art references to 20 maximum, with no per-patent limit, as well as identify a maximum of 60 prior art combinations (defined as a combination of two or more references per claim).  The parties would not be allowed to modify their elections, as requested by Plaintiff, “solely on the basis of any decisions by the [PTAB] related to any inter partes review . . . petitions involving the asserted claims.”  Id. at 2-3.

Further, the Court ordered the parties to adhere to the summary judgment briefing limits in the schedule, which allowed for 40 pages total per party.

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In Magnetar Technologies Corp., et al. v. Six Flags Theme Parks Inc., et al., C.A. No. 07-127-LPS-MPT (D. Del. July 21, 2015), Chief Magistrate Judge Mary Pat Thynge recommended granting-in-part Defendants’ motion for attorneys’ fees under section 285, but recommended denial of the motion for fees against Plaintiffs’ counsel under 28 U.S.C. § 1927.

The Court concluded that Plaintiffs’ litigation conduct was objectively unreasonable, making the case exceptional, in particular as to the asserted ‘125 patent that was ultimately found invalid by Chief Judge Stark in July 2014.  While the Court rejected a number of Defendants’ arguments regarding the frivolousness of Plaintiffs’ claims, improper motivation for the suit, and objectively unreasonable conduct, see id. at 11-18, the Court agreed that Plaintiffs’ arguments on inventorship for the ‘125 patent were objectively unreasonable — namely, that it was so obvious that an individual not named on the patent was an inventor that the argument he was not was unreasonable.  See id. at 18-21.  The Court also concluded that Plaintiffs’ reliance on its expert was objectively unreasonable because they “knew or should have known their expert’s opinion fell well short of the Daubert standard.”  Id. at 21.  The Court had granted Defendants’ Daubert motion due to the expert’s unreliable methodology, “strongly criticiz[ing] his entire infringement analysis” and had cited “a laundry list of unanswered questions” in the report.  Id. at 22.  The Court’s “criticism demonstrates that [the expert’s] report so lacked any reliable methodology under the Daubert analysis and [Rule 702] that it should have been apparent to plaintiffs.”  Id.

Having found the case exceptional based on inventorship issues and Plaintiffs’ reliance on its expert, the Court then narrowed the attorney fees available to Defendants to “reasonable attorneys’ and costs regarding the ‘125 patent related to incorrect inventorship since July 29, 2011 [when key inventor depositions occurred] and [Plaintiffs’] expert report when issued.”  Id. at 26.  Because Defendants’ current fee request was insufficiently detailed for the Court to determine whether, for example, the rates were reasonable, the Court ordered Defendants to address these issues in any subsequent modification.  See id. at 26-27.

The Court then recommended denial of Defendants’ request for fees against Plaintiffs’ counsel under 28 U.S.C. § 1927.  The current counsel assumed representation after Plaintiffs’ prior counsel had withdrawn in 2008.  Id. at 5. The Court found no direct evidence that the new counsel knew the ‘125 patent was invalid due to incorrect inventorship, and rejected Defendants’ arguments as to unreasonable litigation conduct based.  See id. at 28-30.   Furthermore, the Court rejected the argument that maintaining the suit on the ‘125 patent after Defendants’ counsel sent two letters regarding the weaknesses of the claims rendered counsel liable, where Plaintiffs’ counsel had “promptly” responded to the letters, explained “in detail” why it disagreed with Defendants’ argument, and “expressed a willingness to continue a good faith dialogue.”  Id. at 30.

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