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In a recently unsealed memorandum opinion, Chief Judge Leonard P. Stark issued rulings on several pre-trial motions.  Andover Healthcare, Inc. v. 3M Co., C.A. No. 13-843-LPS (D. Del. Oct. 18, 2016).  Most notably, Chief Judge Stark denied a motion to preclude the plaintiff’s CEO from testifying as an expert based on his purported “blatant and direct financial interest in the outcome of this case.”  Id. at 14.  The Court explained that 3M’s argument that the CEO should be precluded because of his financial interest in the litigation “only holds if the Court disregards Andover’s corporate existence.  Any recovery in this case will initially go to Andover, not Murphy. . . .  [T]he Court concludes that Dr. Murphy’s indirect financial interest in the outcome of the litigation [redacted] can be handled appropriately on cross-examination.”  Id. at 15-16 (emphasis in original).

Chief Judge Stark also denied cross-motions for summary judgment relating to a laches defense, on the basis that there existed factual disputes regarding the factual underpinnings of the defense, and also in view of the U.S. Supreme Court’s pending consideration in the SCA Hygiene Products v. First Quality Baby Products case of whether and to what extent laches is an available defense to patent infringement.  Id. at 10 n.2.

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The Defendants in this case requested a stay pending the Federal Circuit’s decision on a patent-in-suit from a related case, and Judge Andrews denied the motion. In considering the motion to stay, Judge Andrews recognized that the Federal Circuit’s decision “may make this case moot, or otherwise simplify whatever issues would remain on this patent. Depending on what the decision is, it might also cause a scramble over whether a preliminary injunction should issue, which would involve issues in addition to the trial issues. Thus, on the whole, this factor favors granting the stay, but it does not heavily weigh in favor of granting the stay.” Sanofi, et al. v. Lupin Atlantis Holdings SA, et al., C.A. No. 15-415-RGA, Order at 1 (D. Del. Oct. 14, 2016). Judge Andrews also pointed out that the “case is ready for expert discovery, which is due to begin next week, and trial is set for April 24, 2017 . . . [which] argues against granting the stay.” Id. Finally, Judge Andrews found that a stay may cause some undue prejudice to Plaintiffs, the non-moving party, because “[i]f a stay is granted, Plaintiffs have to prepare for the possibility of a preliminary injunction, which would be an extra expense. In all likelihood, Defendants too would prepare for the possibility of a preliminary injunction. The prejudice to Plaintiffs may be that I would not grant a preliminary injunction, whereas if Plaintiffs win on a trial on the merits, they will get their injunction by virtue of the trial. Thus, it may be that a trial is an easier route for Plaintiffs to get the relief they are seeking. I think consideration of this factor suggests some possibility of tactical advantage to Defendants if a stay is granted.” Id. at 1-2.

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The Defendant sought leave to file an amended answer and counterclaims adding a claim of inequitable conduct based on an allegedly undisclosed inventor. The motion for leave was filed several months after the December 15, 2015 scheduling order deadline for amendment of pleadings, meaning that the Defendant needed to show “good cause” for the amendment. Although the allegedly undisclosed inventor, Dr. Chu, had initial been disclosed as a person who may have knowledge of products embodying the asserted patent in early 2015, Dr. Chu was not issued a subpoena or deposed until over a year later in May and June of 2016. Judge Andrews found it “fair to say that the [February 2015] ‘initial disclosures’ do not suggest Dr. Chu as a person who as involved in the invention.” E.I. DuPont de Nemours & Co. v. Unifrax I LLC, C.A. No. 14-1250-RGA, Memo. Or. at 1-2 (D. Del. Oct. 7, 2016).

The Plaintiff pointed to several documents that were produced in June 2015 and would have allegedly shown the Defendant at that time that Dr. Chu was involved in product development. But Judge Andrews reviewed the documents and found “they did not show anything that would suggest Dr. Chu was an inventor” but rather only “Dr. Chu being involved in testing and experimentation at Plaintiff’s direction and request.” Id. at 2-3. Therefore, Judge Andrews concluded:

I would tend to agree with Plaintiff that the cited documents do not support the proposed counterclaim. Perhaps this will be a problem for Defendant down the road, but, at this juncture, it does support Defendant’s argument that Defendant has good cause not to have asserted the counterclaim until Dr. Chu was deposed, and provided the basis upon which Defendant now relies. I do not think the cited documents put Defendant on notice that Dr. Chu was an important witness. Defendant’s motion for leave to amend followed without undue delay after Dr. Chu’s deposition was concluded. Therefore, I find good cause and will grant Defendant’s motion.

Id. at 3.

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In a recent Order, Judge Richard G. Andrews denied plaintiff Ansell Healthcare Products LLC’s (“Ansell”) request that defendant Reckitt Benckiser LLC (“Reckitt”), be precluded from disclosing Ansell’s Protected Information, as defined in the parties’ Protective Order, to Reckitt’s consulting expert, Dr. William H. Potter, until after he testifies in a parallel proceeding in Australia involving the parties. Ansell Healthcare Products LLC v. Reckitt Benckiser LLC, C.A. No. 15-915-RGA, D.I. 82 (D. Del. Oct. 5, 2016); see also id., D.I. 76, 81. Although acting as only a consulting expert in the instant action, Ansell explained that Dr. Potter would testify as to noninfringement and invalidity in the Australian action, which is set to go to trial in mid-December 2016. (D.I. 76 at 1-2.) Ansell noted that far more confidential and highly confidential documents were produced in the instant action as compared to the Australian action, and Ansell questioned Dr. Potter’s “ability to separate the information that he may gain from Ansell’s Protected Information produced in this case from the information properly available in the Australian proceeding.” Id. at 1-3. Ultimately denying Ansell’s request, Judge Andrews observed:

The Court’s main concern, based on comity, would be not to do something that would interfere with the Australian proceedings, including circumventing Australian discovery limitations. Like everyone else, I take Dr. Potter’s honesty as a given. I recognize that it is hard for one person to segregate information in the person’s own mind. Regardless of how successful Dr. Potter is at doing this, any danger of inadvertent violation of the protective order is minimized since the documents provided to him in connection with this litigation will not be available in the Australian proceedings. I do think Defendant needs its expert to be fully informed if he is to be of maximum utility to it. Plaintiff has not shown good cause for preventing the disclosure.

To the extent Dr. Potter needs to sign a different acknowledgement form than the one he has already signed, he needs to do that before any “highly confidential – attorneys’ eyes only” documentation is provided to him.

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In Toshiba Samsung Storage Technology Korea Corporation v. LG Electronics, Inc., et al., C.A. No. 15-691-LPS-CJB (D. Del. Sept. 20, 2016) (unsealed Sept. 28, 2016) Magistrate Judge Christopher J. Burke denied Defendants’ motion to dismiss due to lack of standing. The parties had consented to Judge Burke conducting any and all proceedings and entering a final order with regard to Defendants’ motion to dismiss. Id. at 4.

Defendants argued that Plaintiff had not obtained all substantial rights to the patents-in-suit when third party Samsung had executed an assignment agreement with Plaintiff, because Samsung retained “the right to practice the patents, the right to license the patents, and the right to re-acquire the patents at no cost.” Id. at 9. The Court concluded that the most important factor in the “all substantial rights” analysis – the right to sue – weighed in favor of Plaintiff. Id. at 25. Having first interpreted disputed portions of the assignment agreement, the Court concluded that Plaintiff had the exclusive right to sue, and the presence of a covenant not to sue a “future licensee” not named in the agreement did not divest Plaintiffs its standing due to the mere possibility that such “future licensee” could be Defendants. See id. at 17-20. Second, “the Court [was] also swayed by the apparent intent of the parties in drafting the Agreement, as reflected by some of the wording in the document.” Id. at 26. Third, it concluded that the limits on transfer were “not so stringent as to suggest” a lack of standing where Samsung’s right of first refusal allowed only for “the possibility of re-acquiring the Assigned Patents, only if [Plaintiff] decides to transfer, sell or abandon the patents[.]” Id. at 27 (emphasis in original). Fourth, it was “important that the Agreement provides [Plaintiff] other rights indicative of ownership. For example, [Plaintiff] enjoys exclusive rights to all proceeds and other benefits obtained from its enforcement actions, and the right to make, use and sell products or services under the Assigned Patents.” Id. at 28.

Accordingly, and “[t]aking all of these considerations into account, and based on the record before it, the Court conclude[d] that the Agreement did transfer from Samsung to [Plaintiff] all substantial rights in the Assigned Patents,” and denied Defendants’ motion. Id. at 28.

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In Varentec, Inc. v. Gridco, Inc., et al., C.A. No. 16-217-RGA (D. Del. Oct. 3, 2016), Judge Richard G. Andrews denied Plaintiff’s motion for a preliminary injunction that it has filed two months after filing its Complaint. Id. at 1.

As to likelihood of success on the merits, the Court concluded that Plaintiff had not carried its burden to show it will likely prove infringement of the asserted claims. While it concluded that the accused product likely did satisfy one limitation under the doctrine of equivalents based on part on expert testimony offered, it also concluded that the product did not likely satisfy another limitation in the asserted claims. See id. at 9-15. Having concluded this factor was not met, the Court did not address the other preliminary injunction factors, and denied the motion. Id. at 15.

Varentec, Inc. v. Gridco, Inc., et al., C.A. No. 16-217-RGA (D. Del. Oct. 3, 2016)

 

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Judge Stark recently issued two decisions applying collateral estoppel to various defendants based on a prior litigation in which the court had granted summary judgment of no pre-suit damages an the jury had ruled in the defendants’ favor. The Federal Circuit then summarily affirmed that judgment. Defendant Frontier Communications therefore moved for judgment on the pleadings based on collateral estoppel, arguing that the decision against pre-suit damages could not be relitigated. United Access Techs., LLC v. Frontier Commc’ns Corp., et al., C.A. No. 11-341-LPS, Memo. Op. at 1-3 (D. Del. Sept. 30, 2016). Judge Stark found, however, that the issues were not identical because the time periods in question were not identical and that difference “is material because [the] licensees could have, at some point between June 2002 and July 2009, begun to comply with the marking statute.” Id. at 4-5.

Two other defendants moved for judgment on the pleadings on the basis that a finding of summary judgment of non-infringement in the prior litigation estopped the Plaintiff from showing infringement in this case. Although the Federal Circuit had previously determined that collateral estoppel could not apply to a prior jury verdict in this case, the Defendants argued that it could apply to the summary judgment order. United Access Techs., LLC v. CenturyTel Broadband Services, LLC, et al., C.A. No. 11-339-LPS, Memo. Op. at 1-4 (D. Del. Sept. 30, 2016). Judge Stark agreed that the accused products at issue were identical because the Plaintiffs had not identified any differences from the products in the prior case. However, because “the Federal Circuit’s summary affirm Anne neither ‘endorse[d] [n]or reject[ed] . . . the district court’s specific holdings’ regarding claim construction, and because the claim constructions at issue here are not necessary to one of the rationales for affirmance [in the prior case], it is simply not possible to say that this Court’s claim constructions were necessary to the Federal Circuit’s decision. As a result, collateral estoppel does not apply to this Court’s decision.” Id. At 5-6.

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Magistrate Judge Burke denied a motion to disqualify Plaintiff’s counsel, who had previously represented the Defendant from 2008 to 2014 as trademark counsel. There was no dispute that the firm representing the Plaintiff had previously done substantial legal work for the Defendant through a handful of attorneys that had long represented the Defendant in trademark matters both before joining that firm and after leaving it. Regalo Int’l, LLC v. Munchkin, Inc., C.A. No. 15-1103-LPS-CJB, Memo. Or. at 1-6 (D. Del. Sept. 29, 2016).

Given these facts, the Court’s analysis focused only on whether this case was “substantially related” to the prior matters in which Plaintiff’s counsel had represented the Defendant. Although the two representations in question were a patent litigation and trademark counseling and did not involve overlap in the products at issue, the Defendant contended that the firm had high-level strategic knowledge of the Defendant based on handling hundreds of matters for the Defendant in the past. Judge Burke found, however, that this did not establish that “(1) the prior and current representations are sufficiently related for purposes of this inquiry, nor that (2) [the Defendant] has met its burden to demonstrate that any [of its] confidences previously disclosed . . . Are sufficiently ‘relevant’ to the present action or sufficiently ‘detrimental’ . . . in this case.” Id. at 12. Indeed, Judge Burke explained that the Court tends “not to give great weight in this analysis to unfocused concerns that a party’s former counsel knows that party’s ‘playbook.’ Instead, in the main, they tend to require a party who is moving to disqualify counsel in a patent matter to demonstrate a fairly close legal and factual nexus between the present and prior representations.” Id.

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In a recent claim construction order, Judge Richard G. Andrews found preamble language limiting because it provided meaning to terms in two claims and antecedent basis for another claim term.  Sanofi v. Lupin Atlantis Holdings S.A., C.A. No. 15-415-RGA (D. Del. Oct. 3, 2016).  The preamble language at issue was, for claims 1 and 6, “a method of reducing a risk of cardiovascular hospitalization in a patient” and, for claim 9, “a method of reducing a risk of hospitalization for atrial fibrillation in a patient.”  The Court found that the preamble language for claims 1 and 6 gave meaning to the claim term “effective amount” because reading the body of claims 1 and 6 (“administering to said patient an effective amount of dronedrone or a pharmaceutically acceptable salt thereof…”) on its own, without the preamble language, “begs the question, effective for what?”  Id. at 6.  With respect to claim 9, the Court found that the preamble language provided an antecedent basis for the claim term “patient in need of reduction of said risk.”  Id. at 7.  The Court explained that “[w]ithout the phrase ‘reducing a risk of cardiovascular hospitalization,’ the phrase ‘a patient in need of reduction of said risk’ would not have a proper antecedent basis.”  Id. at 8.        Continue reading

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Data Engine Technologies LLC v. Google Inc., C.A. No. 14-1115-LPS (D. Del. Sept. 29, 2016), Chief Judge Leonard P. Stark granted Defendant’s Rule 12(c) motion because the Court concluded that asserted claims of certain of the patents-in-suit were directed to patent-ineligible subject matter.

The patents-in-suit at issue relate to electronic spreadsheets. Id. at 1. The Court’s analysis divided the patents into two groups. First, as to the “Tab Patents,” the patent containing the claim the Court determined was representative “broadly cover[ed] methods for rendering electronic, three-dimensional spreadsheets, wherein individual spreadsheet pages may be labeled and selected via user input such that selected pages are shown while others are ‘obscure[ d].’” Id. at 10. The second group of claims within an additional patent related to tracking changes and versions within a spreadsheet. See id. at 14.

By the time of decision, the Court had already issued its opinion on claim construction, therefore the Court applied those constructions to its decision to the extent necessary. Id. at 1-2. Additionally, because the motion presented an issue of law, the Court “rejected consideration of all extrinsic evidence presented by the parties and relie[d] only on the pleadings and patents, which were attached as exhibits to the complaint, and ma[de] its ruling as a matter of law.” Id. at 16 n.4.

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