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Judge Gregory M. Sleet recently considered defendant Roxane Laboratories, Inc.’s letter request to file a motion for summary judgment of invalidity for lack of patentable subject matter under 35 U.S.C. § 101.  Vanda Pharmaceuticals Inc. v. Roxane Laboratories, Inc., C.A. No. 13-1973-GMS (consol.) (D. Del. Dec. 30, 2015).  Judge Sleet denied the request finding disputed issues of material fact to be “properly determined at trial,” such as whether the asserted claims involve a law of nature combined with steps that are “routine and conventional,” and whether the claims at issue are analogous to those at issue in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289, 1294 (2012).  Id. at 1 n.1.

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Judge Robinson previously granted a permanent injunction in this case in March 2014. The defendants have now moved for relief from continued application of that injunction, arguing that the rationale for the injunction has changed warranting modification of the injunction. Invista N.Am. S.A.R.L., et al. v. M&G USA Corp., et al., C.A. No. 11-1007-SLR, Memo. Or. at 1-2 (D. Del. Dec. 28, 2015).

Judge Robinson began her analysis of defendants’ request by rejecting the contention that the PTO’s invalidiation of the patent in suit during reexamination was grounds to modify the injunction because “the PTO’s determination is far from a final one, and . . . the Federal Circuit has already reviewed the ‘216 patent on appeal and affirmed the jury’s verdict of validity. Therefore, while the reexamination proceeding may be one factor to review in connection with defendants’ request for relief, it is by no means dispositive.” Id. at 3.

“With respect to the ‘different competitive reality’ that exists now,” however, Judge Robinson found that “the record before the court reflects several significant factors which have changed since (or were not apparent to the court in) March 2014.” Id. The Court’s prior determination that there were only two suppliers of products covered by the patented technology in the market (the plaintiff and the defendant) was no longer true in light of at least two other suppliers. “Moreover, the fact that plaintiffs have made no commercial in-roads with its . . . product since March 2014 indicates that the patented technology is not plaintiffs’ primary revenue source and calls into question whether such technology actually drove customer demand for defendants’ . . . product.” Id. at 3-4.

Overall, therefore, Judge Robinson found that the analytical framework for a permanent injunction had changed: “As to the first prong of the test, likelihood of success on the merits, the PTO’s finding of invalidity on reexamination – while not final – certainly adds an element of ambiguity to the analysis, when there was none in March 2014. The second prong of the analysis is irreparable harm. As noted, the harm advanced by plaintiffs in 2014 was ‘lost sales and market share, leading to the loss of research and development activities, a loss of goodwill in the market, and a forced loss of their patent exclusivity.’ Plaintiffs have had more than 18 months to generate market share for their PolyShield product and have failed to do so. Without sales in the first instance, it is difficult to justify imposition of injunctive relief based on lost sales and market share.” Id. at 4. Moreover, the balance of hardships weighed in favor of the defendants given that the plaintiff could be adequately compensated by a royalty (which Judge Robinson ordered be deposited in escrow in case the patent-in-suit survived appeal) and the “public interest is evenly balanced at best, with the ‘216 patent’s validity under scrutiny and its legal monopoly reducing competition.” Id. at 5.

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In a recent Memorandum Order, Chief Judge Leonard P. Stark granted defendants’ cross motion for partial judgment on the pleadings based on lack of subject matter jurisdiction over the parties’ declaratory judgment claims and affirmative defenses relating to the existence of an implied license (“implied license claims”), and thus dismissed the implied license claims without prejudice. S3 Graphics Co., Ltd. v. ATI Technologies ULC, et al., C.A. No. 11-1298-LPS (D. Del. Dec. 11, 2015). As Judge Stark explained, “[a]n implied license is an affirmative defense to a claim of patent infringement,” and “the parties agree[d] that this case does not involve any allegations of patent infringement.” Id. at 3. Accordingly, Judge Stark concluded that “there is no case or controversy, and the Court must dismiss the parties’ implied license claims.” Id. Judge Stark reached a similar conclusion with respect to “the implied license portion of [plaintiff’s] claim for injunctive relief.” Id. at 4. That is, just as the Court lacks subject matter jurisdiction to determine whether defendants have an implied license to the patents at issue, Judge Stark also found that the “Court lack[s] subject matter jurisdiction to provide [plaintiff] the remedy it requests relating to that claim.” In the same Memorandum Order, Judge Stark also denied plaintiff’s motion for reargument and motion to inspect as moot.

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In a recent Memorandum Order, Judge Richard G. Andrews considered defendants’ request to “show that the suboxone film has not achieved commercial success.” Reckitt Benckiser Pharmaceuticals Inc., et al. v. Watson Laboratories Inc., et al., C.A. No. 13-1674-RGA (D. Del. Dec. 15, 2015). Judge Andrews first noted that “Plaintiffs are not claiming commercial success, but are asserting other secondary factors of nonobviousness.” Judge Andrews also noted that “[t]he absence of objective evidence is a neutral factor.” Judge Andrews explained that “marketplace failure could, under the right circumstances, be a ‘negative factor,’” as it “could rebut (in a roundabout way) ‘long-felt need.’” While Judge Andrews “was doubtful that Defendants [can] show marketplace failure,” or “even have a good shot at making commercial results a neutral factor,” Judge Andrews nevertheless found that “Defendants have to decide how to allocate their time. “ Accordingly, Judge Andrews concluded that “if Defendants believe the proffered . . . evidence [regarding commercial success] is a good use of their time, I will allow it.” Judge Andrews reached this conclusion despite the fact that “Plaintiffs unilaterally withdrew their commercial success expert, and Defendants’ expert was to respond to that now foregone evidence.” Judge Andrews did “not see Plaintiffs being unfairly prejudiced by allowing Defendants to put on their evidence.”

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In Reckitt Benckiser Pharmaceuticals Inc., et al. v. Watson Laboratories, Inc., et al., C.A. No. 13-1674-RGA; v. Par Pharmaceutical, Inc., et al., C.A. No. 14-422-RGA (D. Del. Dec. 16, 2015), Judge Richard G. Andrews granted-in-part Plaintiffs’ motion in limine to preclude Defendants from offering evidence at trial concerning the an inter partes review of a patent-in-suit.

Defendants were precluded from offering “the PTAB’s factual finding, decisions, and legal conclusions,” but would be allowed to offer opposing party statements admissible under FRE 801(d)(2).  Id. at 2.  The remainder of documents at issue appeared to be inadmissible hearsay, and the Court thus advised they should not be offered into evidence absent a exception.  Id.  The Court would permit Defendants at trial to lay a foundation for their expert to rely on a certain declaration from the proceedings (regarding another’s pH measurement), explaining that whether the expert could rely on such data was a factual question that was not amenable to resolution before trial.  Id.

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Special Master Seville recently decided several discovery disputes arising between plaintiff Callwave and defendants Google and Broadsoft in several related litigations pending before Judge Richard G. Andrews. Callwave Communications, L.L.C. v. AT&T Mobility LLC, et al., C.A. Nos. 12-1701-RGA, 12-1702-RGA, 12-1704-RGA, 13-711-RGA (D. Del. Dec. 17, 2015).

First, Special Master Seville vacated a prior order denying Callwave’s request regarding the production of an expert’s report and testimony from a prior litigation.  Id. at ¶ 1-2.  Special Master Seville found that the report and testimony related to “opinions on prior art asserted by Google in this litigation and are therefore relevant.”  Id. at ¶ 2.

Special Master Seville then considered Callwave’s motion to strike defendants’ expert and defendants’ counter motion to strike Callwave’s new validity opinions and portions of the reply report of its expert.  Id. at ¶ 4.  After a review of the relevant factors set forth in Meyers v. Pennypack Woods Home Ownership Ass’n, 559 F.2d 894, 904-05 (3d Cir. 1977), Special Master Seville denied both motions.  Special Master Seville found no prejudice that could not be cured, no disruption of a trial date (trial was not scheduled), and no bad faith or intentional conduct.  Id. at ¶ 10-12.

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In this patent litigation between Adidas and Under Armour, Judge Sleet held a Markman hearing on May 14, 2015 and issued a claim construction order on June 15, 2015. The Defendant, Under Armour, subsequently filed a motion to modify the claim construction order based on the fact that the Under Armour had proposed the same construction in filing an inter partes review that it had proposed in the litigation. Although the PTAB did not institute IPR, Under Armour argued that Judge Sleet should adopt the construction advocated before the PTAB because the PTAB had accepted that construction in its denial of IPR. Therefore, Under Armour reasoned, the PTAB’s reliance on that construction means that collateral estoppel should apply. Adidas AG v. Under Armour, Inc., et al., C.A. No. 14-130-GMS, Or. at 2 n.1 (D. Del. Dec. 15, 2015).

Judge Sleet rejected this argument, reasoning that “the PTAB’s choice not to institute and IPR is not the type of adjudication that leads to issue preclusion” because the PTAB adopted Under Armour’s construction only “for purposes of this decision.” Id. Moreover, “the patent owner [Adidas] did not present the PTAB with a different construction than the one it presented to the court. The fact that it did not provide the PTAB with any construction does not weigh in favor of issue preclusion in such a preliminary proceeding. Contrary to the defendants’ assertions, the patentee is not ‘trying to have its cake and eat too.’ The court is not bound by a preliminary claim construction used by the PTAB for the limited purpose of denying an IPR request.” Id.

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Intellectual Ventures I, LLC, et al. v. Toshiba Corporation, C.A. No. 13-453-SLR-SRF (D. Del. Dec. 9, 2015), Judge Sue L. Robinson ordered that the stay of Defendant’s antitrust counterclaims remain in place until the patent claims in the case were resolved, “consistent with [Judge Robinson’s] normal practice.” Id. at 1. The Court concluded that “the crux of [Defendant’s] antitrust theories is the ‘poor quality’ of plaintiffs’ patents. . . . So long as [Defendant] relies on the ‘quality’ of the patent portfolio rather than its numerosity and the way it’s asserted . . . Defendant [had] not assuaged the concerns [the Court had] previously identified” with regard to not staying the antitrust claims. See D.I. 96 (March 20, 2015 order granting motion to stay antitrust counterclaims as to those that involve the validity of Plaintiffs’ patent portfolio, but denying motion to the extent the counterclaims relied on “the numerosity and value (i.e., presuming validity) of [Plaintiffs’] patent portfolio” ).

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In Verisign, Inc. v. XYZ.com, LLC, et al., C.A. No. 15-mc-175-RGA-MPT (D. Del. Dec. 4, 2015), Chief Magistrate Judge Mary Pat Thynge considered a motion to quash subpoenas. The plaintiff in a false advertising action in the Eastern District of Virginia had served subpoenas on two non-parties, requesting documents related to the sale of a top-level domain name to defendants, agreements and communications related to this domain name and the plaintiff, and communications referencing other domain names. See id. at 3 (listing requested categories of documents).

The Court first found that defendants did have standing to challenge the subpoena, where the non-parties had not objected to the subpoena, explaining that while “[c]ourts have held that parties . . . do not have standing to a subpoena if they are not the target of the subpoena . . . other courts have found that parties who claim privilege or a personal right in the subpoenaed information from a nonparty have standing to object.” Id. at 4-5. Here, defendants alleged that the subpoenas requested “documents between defendants and KBE, who has worked closely with defendants on business transactions, and require the nonparties to disclose confidential information and trade secrets. These representations demonstrate sufficient interest in the requested documents to determine defendants’ standing.” Id. at 5.

The Court also concluded that plaintiff had not provided a reasonable time for response to the subpoenas. Although the non-parties had agreed to a short production turnaround period (five days from service), “the time allotted for compliance was unreasonable and effectively gave defendants one business day [due to holidays] and a total of five days to seek protection of documents, in which they had a sufficient interest.” Id. at 6.

Ultimately, the Court did order production of the subpoenaed documents over defendants’ objections that the requested information was irrelevant to the case in Virginia, that the documents could have been sought through defendants, and that the subpoenas requested proprietary information from whose production defendants would suffer irreparable harm. The Court did observe that it “question[ed] plaintiff’s need to subpoena [certain requested categories] when production of these documents was potentially obtainable from defendants. If any issue arose regarding such production, it then could have been addressed by the court having more familiarity with the underlying matter. To address defendants’ concerns, however, production of the above categories is ordered under the ‘Attorney’s Eyes Only’ designation provided for in the protective order [in the underlying action]. [However], as [one category of] requested documents, the court [found] there was no evidence that these documents contain trade secrets or confidential information of defendants.”  Id. at 11.

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In a recent memorandum order, Judge Christopher J. Burke denied a defendant’s motion to partially stay a case involving several asserted patents pending the conclusion of the appeal to the Federal Circuit of the PTAB’s decision regarding one of the asserted patents.  LG Electronics, Inc. v. Toshiba Samsung Storage Technology Korea Corp., C.A. No. 12-1063-LPS-CJB (D. Del. Dec. 11, 2015).  The result of the IPR was a finding that the plaintiff’s patent was unpatentable as anticipated and obvious.  The plaintiff appealed that finding and briefing is scheduled to be completed in February 2016.  In denying the defendant’s motion to stay pending the outcome of that appeal, Judge Burke’s decision was motivated primarily by the “undue prejudice” factor of the stay analysis.  The Court noted that although a case schedule had been set only recently, the case was filed in August 2012, more than three years ago, and the case was delayed due to motion practice by the defendant.  Judge Burke explained that “[i]n a vacuum, it does not seem long to wait for another six or seven months for the appeal to conclude before moving forward . . . .  But this case cannot be viewed in a vacuum.  Instead, it must be viewed in its actual context.  . . . [D]elaying the action (in part) by many more months—in addition to the real delay LG has already experienced—is problematic.”

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