Magistrate Judge Christopher J. Burke recently issued a Report and Recommendation recommending that the Court grant Brigham and Women’s Hospital’s (“BWH”) Motion to Intervene. Endoheart AG v. Edwards Lifesciences Corporation, C.A. No. 14-1473-LPS-CJB (D. Del. Nov. 6, 2015). BWH sought to intervene “in order to be able to press its claim . . . that it is entitled to a declaratory judgment that it is the owner of United States Patent No. 8,182,530 (“the ‘530 patent”) and to certain patent applications related to the ‘530 patent (collectively, “the inventions”).” Id. at 1-2. Plaintiff Endoheart AG claimed that it was the rightful owner of the ‘530 patent, the patent in suit. Id. at 2. Endoheart argued that the motion to intervene was not timely filed because it was filed seven months after Endoheart filed its complaint and four months after the Court entered a case schedule. Id. at 3-4. Judge Burke disagreed noting that the case is in its early stages, with trial not scheduled until March 2017, and any discovery related to BWH’s declaratory judgment claim would be narrowly focused. Id. at 4. Judge Burke also found that BWH sufficiently met its burden to make a prima facie showing that it has an ownership interest in the inventions. Id.at 5-6. Last, Judge Burke found that intervention would be appropriate because otherwise no party would be asserted that BWH is the rightful owner of the inventions. Id. at 7.
Last Friday, Judge Sue Robinson issued a temporary restraining order prohibiting Dr. Reddy’s Laboratories (DRL) from selling a generic esomeprazole product due to its likelihood of confusion with plaintiff AstraZeneca’s Prilosec® and Nexium® tablets. AstraZeneca AB, et al. v. Dr. Reddy’s Laboratories, Inc., C.A. No. 15-988-SLR, Memo. at 13-14 (D. Del. Nov. 6, 2015).
AstraZeneca holds three federal trademark registrations covering the color purple for gastrointestinal pharmaceuticals as well as one registration for the phrase “THE PURPLE PILL®.” It has used the color purple in branding gastrointestinal drugs, including Prilosec® and Nexium®, since 1989 and has sold approximately 22.6 billion purple capsules in that time. Approximately six years ago, DRL began selling a generic version of Prilosec®, which used a half-purple, half-yellow-or-grey capsule. In recent years, several generic versions of Nexium® have also been marketed by other companies, each of which used blue or white capsules. Most recently, in September 2015, DRL launched its generic version of Nexium® using a capsule that is entirely purple, although in two different shades. In late October 2015, AstraZeneca responded with a trademark infringement lawsuit and a request for injunctive relief. Id. at 1-4.
Judge Robinson concluded that AstraZeneca “carried its burden to prove that it is likely to succeed on the merits of its case, that it is likely to suffer irreparable harm if the requested relief is not granted, that the balance of hardships and the public interest weigh in its favor.” Id. at 13-14. Her Honor continued: “If DRL’s arguments were carried to their logical end, the loss of a branded company’s patent monopoly would inevitably result in a loss of its trademark rights, a result not consistent with the law or the market place. Moreover, so long as injunctive relief is available to prevent harm, the court declines to force such plaintiffs such as AZ to actually incur harm that is likely, but not provable, at the outset. Therefore, AZ’s motion for a temporary restraining order will be granted.” Id.
In support of this conclusion, Judge Robinson found that AstraZeneca was likely to succeed on the merits of its Lanham Act claims. Among other factors considered, Judge Robinson found that:
(1) the products were very similar because “DRL’s generic capsule is purple, albeit two shades of purple. Although not identical to AZ’s branded capsule, it does fit the description of the mark, “purple.” It has been recognized that a registration for a color covers all shades of that color”;
(2) “AZ has presented credible evidence that its Purple Marks branding is of long duration, of value, and strong”;
(3) Given the totality of the circumstances, including the physical appearance of DRL’s other generics (distinctive), the fact that DRL is a second wave generic in this market (and perhaps has to be more aggressive to get market share), and DRL’s explanations for adopting an all-purple pill . . . the court concludes that DRL intended to test AZ’s trademark, rather than honor it”; and
(4) “Despite the fact that Nexium® is a branded product and DRL’s generic is not, the court finds that AZ and DRL are still competing in the same market for the same consumers in the first instance, even if DRL is ultimately competing against other generics once the decision to buy a generic has been made.”
Id. at 5-9.
Judge Robinson also concluded that there was sufficient evidence of dilution of AstraZeneca’s marks because those marks are sufficiently “famous” and because “it is evident that DRL, in its marketing of its GI generics, has progressed from using colors in its two-tone capsules that are not at all similar to AZ’s purple pills, to a two-tone capsule that is (1) all purple and (2) uses AZ’s shade of purple.” Id. at 9. Moreover, Judge Robinson found that AstraZeneca had not acquiesced to DRL’s conduct by the “sale of the half-purple Prilosec generic capsules since 2005 [and the resulting] ‘market history of overlap between’ the products” and that such a history did not undermine an argument of irreparable harm. Id. at 12.
Judge Robinson also rejected a contract defense based on the agreement settling prior Hatch-Waxman litigation between AstraZeneca and DRL and releasing “any and all claims . . . in connection with the DRL Product . . . arising before the Effective Date of this Settlement Agreement.” Her Honor explained that although DRL’s ANDA product was described in its ANDA as “purple opaque,” this characterization was of little consequence because “[f]rom the court’s extensive ANDA litigation experience, however, the court takes judicial notice of the fact that such submissions are voluminous by nature, and that the focus of ANDA litigation is on the formulation of the generic product for infringement purposes (not on the color of the proposed commercial product, which is not on the market as not even approved by the FDA yet).” Id. at 10 n.6. Further, Her Honor noted that Hatch-Waxman litigation allows only for consideration of patent issues, and that the settlement agreement at issue, “[i]f anything . . . specifically preserved AZ’s trademark rights against the very conduct in which DRL has engaged.” Id. at 10-12.
Having found a likelihood of success, Judge Robinson found a likelihood of irreparable harm because “[b]y using AZ’s Purple Marks, it is likely that DRL will create (and intended to create) the false impression that its generic esomeprazole magnesium capsules are identical to Nexium®, not merely bioequivalent, and may be an “authorized generic,’’ that is, a generic drug made or authorized by the brand name company, i.e., by AZ.” Id. at 12. In balancing the harms, Her Honor “recognize[d] that imposing injunctive relief on DRL (i.e., forcing DRL to take its generic off the market) will be costly, both monetarily and in terms of such intangibles as market share and loss of good will. The court nevertheless concludes that DRL engaged in the conduct at issue fully aware of such consequences and, therefore, cannot be heard to complain that the risks it took did not pay off.” Id. at 13.
Judge Richard G. Andrews recently issued what appears from the Court’s docket to have been a sua sponte order directing a defendant to explain why its pro hac vice counsel should not have their admission revoked as a result of filing a reply brief that raised, for the first time, the defendant’s best argument in support of a motion to dismiss for lack of personal jurisdiction. Funai Electric Co., Ltd. v. Personalized Media Commc’ns, LLC, C.A. No. 15-558-RGA (D. Del. Nov. 6, 2015). The Court also ordered the plaintiff to file a sur-reply addressing the merits of the defendant’s argument.
The full text of the docket order was as follows:
ORAL ORDER: Defendant’s Reply Brief (D.I. 14) raises an issue not in either of the earlier briefs, in particular, whether Plaintiff meets the “arising from” requirement of section 3104(c)(1). It cites in particular Sprint Nextel. (D.I. 14, pp. 2-4). Plaintiff is ORDERED to respond to on the merits to the argument. Defendant’s counsel are ORDERED to explain why they should not have their pro hac vice status revoked for saving their better argument for the reply brief. Both letters are due November 13, 2015. Ordered by Judge Richard G. Andrews on 11/6/2015.
In Reckitt Benckiser Pharmaceuticals Inc., et al. v. Watson Laboratories, Inc., et al., C.A. No. 13-674-RGA and Reckitt Benckiser Pharmaceuticals Inc., et al. v. Par Pharmaceutical, Inc., et al., C.A. No. 14-422-RGA (D. Del. Oct. 26, 2015), Judge Richard G. Andrews ruled on several motions in limine related to the parties’ expert testimony.
The Court granted Plaintiffs’ motion to preclude Defendants’ invalidity expert who relied on the expert reports of other of experts in forming his obviousness opinion. The Court concluded the opinion “lack[ed] reasoning or analysis” and was “needlessly cumulative,” and excluded the testimony under FRE 403. Id. at 2.
The Court denied Defendants’ motion to preclude Plaintiffs’ validity expert from relying on certain post-dated references that could show that “drug content uniformity was a problem in the field at the time of the invention,” arguing it was hearsay. Id. The Court allowed reliance on the references as either not hearsay or something experts in the field would reasonably rely on in forming an opinion (and thus allowable under FRE 703). Id. at 2-3. The Court also held that the references were relevant and that Defendants’ objections to the expert’s reliance on them went to weight, rather than admissibility.
Finally, the Court denied one of the defendant’s motion to preclude Plaintiffs from relying on certain “partitioning” infringement analysis, explaining that the motion “raise[d] questions appropriate for the trier of fact.”
Magistrate Judge Christopher J. Burke recently granted a Daubert motion seeking to exclude portions of a plaintiff’s damages expert opinion. W.L. Gore & Assocs., Inc. v. C.R. Bard, Inc., et al., C.A. No. 11-515-LPS-CJB (D. Del. Oct. 23, 2015). The expert had rendered a reasonably royalty opinion based in part on her conclusion that a certain licensed patent was “similar in importance” to the asserted patents subject to the hypothetical license negotiation analysis in the case. This conclusion was, in turn, based on a conversation the expert had with the plaintiff’s technical expert on infringement. As Judge Burke explained, “it is clear that [the damages expert] relied exclusively on her conversation with [the technical expert] in reaching a conclusion regarding technological comparability of the Goldfarb patent and the asserted patents[.]” Id. at 11. The Court explained that was improper because the technical expert had not, himself, opined as to the technological comparability of the Goldfarb patent and the asserted patents, and therefore, the damages expert “could not simply testify at trial (as she did during her deposition) about what [the technical expert] previously said to her about the topics. . . . In that scenario, [the damages expert] would be simply repeating [the technical expert’s] views on technological comparability without applying her own experience or methodology to those views[.]” Id. at 13 (emphasis in original). This, the Court explained, would “amount to the transmission of hearsay to the jury, which is not permissible.” Id. at 13-14. While the Court granted the motion, it allowed the plaintiff leave to supplement the technical expert’s report to include an opinion on the technological comparability issue which the damages expert could then rely upon.
UPDATE: In a Memorandum Order dated November 24, 2015, Chief Judge Stark has adopted Judge Burke’s order in all respects. See W.L. Gore & Assocs., Inc. v. C.R. Bard, Inc., et al. C.A. No. 11-515-LPS-CJB, Memo. Or. at 3-4 (D. Del. Nov. 24, 2015).
Judge Fallon recently considered a renewed motion to dismiss Courtesy Products L.L.C.’s willful infringement claims filed by defendant Hamilton Beach Brands, Inc.; as well as Courtesy Products’ motion to dismiss and strike Hamilton Beach’s inequitable conduct claims. Courtesy Products L.L.C. v. Hamilton Beach Brands, Inc., C.A. No. 13-2012-SLR-SRF (D. Del. Oct. 20, 2015).
Judge Fallon recommended denial of Hamilton Beach’s motion to dismiss because the Court found that under In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007), the amended complaint adequately pled objective recklessness. Id. at 6. In particular, Judge Fallon found sufficient “[t]he amended allegations regarding the knowledge requirement, combined with allegations that Hamilton Beach directly and/or indirectly infringed the patents-in-suit, and that it intentionally advised third party customers to use the accused products in systems that infringe the patents-in-suit[.]” Id. Judge Fallon also found that the amended complaint “sufficiently establish[ed] a link between knowledge and objective recklessness by pleading that, ‘[h]aving executed a license in the year 2009 to practice claims of the [patents-in-suit] for a specific product … and thus being on notice of the [patents-in-suit], Hamilton Beach’s continued activities demonstrate a willful disregard of the [patents-in-suit] and thus constitute willful patent infringement.'” Id. at 8.
Regarding Hamilton Beach’s inequitable conduct allegations, Judge Fallon found that the allegations passed muster except with respect to the “but-for materiality” standard discussed in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1291 (Fed. Cir. 2011). Id. at 12-13. “Neither the challenged pleading nor Hamilton Beach’s answering brief identifies how the cited misrepresentations in the May 21, 2007 response to the PTO’s office action led to the issuance of the patents-in-suit.” Id. Although Judge Fallon recommended the Court grant-in-part Courtesy Products’ motion to dismiss on this basis, Judge Fallon also recommended the Court give Hamilton Beach leave to correct the deficiencies. Id. at 15.
Magistrate Judge Christopher J. Burke recently recommended denial of a motion to dismiss pre-suit induced infringement claims, to the extent damages were sought for such pre-suit infringement. Elm 3DS Innovations, LLC v. SK hynix Inc., et al., C.A. No. 14-1432-LPS-CJB (D. Del. Oct. 16, 2015). The complaint did not allege direct evidence of pre-suit knowledge of the plaintiff’s ’239 patent, but Judge Burke found that it alleged certain indirect evidence that, taken together, rendered it at least plausible that the defendants did, in fact, have pre-suit knowledge of the ’239 patent. The complaint alleged that the plaintiff’s president made a presentation to an executive and around 60 of defendants’ engineers in 2000 or 2001 relating to the ’239 patent’s parent, and that the ’239 patent was also well known in the industry and cited by defendants’ competitors in numerous patent applications. Id. at 4-5. On balance, Judge Burke found that these allegations “render it at least plausible that [defendants were] aware of the [patent-in-suit] and its claims as of the date of the patent’s issuance.” Id. at 4. Judge Burke also found that the complaint “plausibly allege[d] that Defendants knew that their semiconductor chips at issue were in fact incorporated into their customers’ (e.g., global equipment manufacturers like Apple, Microsoft, Samsung and HTC) finished electronic products sold in the United States.” Id. at 10-11.
Update: On March 31, 2016, Chief Judge Leonard P. Stark adopted Magistrate Judge’s Burke’s report and recommendation.
In a recent Memorandum Order, Chief Judge Leonard P. Stark adopted in part defendants’ objections to Magistrate Judge Burke’s Report and Recommendation (“the Report”) dated July 15, 2015 (discussed here), which recommended that defendants’ motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) for failure to claim patentable subject matter under 35 U.S.C. § 101 should be denied. Execware, LLC v. BJ’s Wholesale Club, Inc., C.A. Nos. 14-233, 14-234, 14-235, 14-240-LPS (D. Del. Sept. 30, 2015). Judge Stark explained that defendants’ objections are sustained to the extent “they challenge Judge Burke’s conclusions that claim 1 is not directed to an abstract idea and that claim 1 contains an ‘inventive concept.’” Id. at 3. Judge Stark first disagreed with the Report’s approach of “presum[ing] that the claims are to be construed in the manner most favorable to Plaintiff.” Judge Stark found the approach improper in this particular instance because defendants’ motions could be denied based on constructions “that . . . turn out to be incorrectly less favorable to Defendants than the constructions that will ultimately be adopted after formal claim construction takes place.” Id. at 4-5.
Judge Stark also found that “[c]laim construction is necessary in this case before determinations can be made under either step of the Alice inquiry.” Id. at 6. Judge Stark noted that the Report invoked the “most favorable” standard four times in its “step-1 analysis under Alice.” Id. at 7. Judge Stark thus found “[b]ecause the claim meaning is apparently uncertain enough to turn on multiple uses of this standard, and because the parties were not afforded an opportunity to explain why it may or may not be appropriate to read in limitations from the specification into certain of the steps comprising claim 1, . . . formal claim construction is necessary before deciding whether claim 1 is directed to an abstract idea.” Id. As to the second step of Alice, Judge Stark noted, among other things, that “the Report does not give any reasons why, when this claim term is eventually construed, it will be construed with limitations read into it from the specification.” Id. at 9-10. Judge Stark ultimately denied defendants’ motions to dismiss without prejudice to renew as summary judgment motions after claim construction and discovery have taken place. Id. at 11.
In Transcend Medical, Inc. v. Glaukos Corp., C.A. No. 13-380 (D. Del. Oct. 9, 2015), Judge C. Darnell Jones, II, writing for Judge Mitchell S. Goldberg, denied Glaukos’ (declaratory judgment-defendant) request to postpone the inequitable conduct trial schedule for November 2, 2015. As Judge Jones explained, the court previously granted Transcend’s (declaratory judgment-plaintiff) motion for summary judgment on non-infringement, denied Glaukos’ motion on the issue of inequitable conduct, and scheduled the inequitable conduct trial. Id. at 1. Glaukos urged that the “inequitable conduct trial be postponed because the infringement ruling resolved the gravamen of the dispute between the parties and a trial on the inequitable conduct issue would be a waste of resources and potentially unnecessary in the event that the infringement ruling is affirmed on appeal.” Id. While the parties agreed that “following summary judgment of non-infringement, courts have the discretion to dismiss any remaining inequitable conduct and invalidity claims without prejudice to allow an appeal of the non-infringement judgment to go forward,” the court found it should not exercise that discretion. Id. at 1-2.
First, Judge Jones pointed to the fact that “parties have expended substantial resources preparing for trial and are close to being prepared to try this case,” and that postponement might “require the parties to prepare for trial a second time.” Id. at 2. Judge Jones further explained that “the inequitable conduct trial is a bench trial and will not involve a lengthy jury selection process,” and that “there is significant overlap between the parties’ witnesses.” Id. Judge Jones also reasoned that “proceeding to trial on the inequitable conduct claim will serve to provide more clarity regarding the parties’ positions in the event that the infringement ruling is reversed on appeal,” and that “reaching final judgment on all of the claims raised in this case will avoid the potential for piecemeal appellate litigation.” Id.
Judge Robinson recently considered cross-motions for summary judgment on the validity of U.S. Patent Nos. 7,062,749 and 7,603,674 pursuant to 35 U.S.C. § 101. YYZ, LLC v. Hewlett-Packard Company, et al., C.A. Nos. 13-136-SLR, 13-579-SLR, 13-581-SLR (D. Del. Oct. 8, 2015). The patents disclose a “computer-based apparatus and systems for measuring, monitoring, tracking and simulating enterprise [or business] communications and processes in an asynchronous messaging environment.” Id. at 13-14 (internal quotation omitted) (alteration in original).
Providing examples for each asserted claim, defendants argued “that the “asserted claims of the patents-in-suit are directed to the abstract idea of collecting and saving information relating to a business process – a well-known, routine, and fundamental business practice.” Id. at 15. In response, Plaintiff contended that the technologies of the patents are “very specific” and the invention directed to a “very specific” technological environment. Id. The Court disagreed, finding that the claims essentially recite a method for sending a copy of information to a central repository and storing the copied information, which is an abstract idea. Id. at 15-16. Judge Robinson also found that although “the asserted claims of the patents-in-suit operate in an asynchronous message-based communications environment and fix problems only existing in asynchronous environments[,]” this limitation was insufficient to “pass muster under the § 101 paradigm.” Id. at 17. More specifically, Judge Robinson held that:
To broadly claim a method of accomplishing routine functions requires more than just an “apply it” directive, even in a specific technical environment such as the one at bar. A component that “can be configured” to perform the claimed function is neither sufficiently described nor sufficiently innovative to transform the inventive concept at bar into patent-eligible subject matter.
Id. at 19.
Note that in coming to this conclusion, Judge Robinson considered extrinsic evidence, namely an expert declaration submitted by plaintiff, because such evidence was “helpful in terms of understanding the state of the art at the time of the patents-in-suit, and whether the problem to which the patent was directed is solved using computer technology in unconventional ways.” Id. at 16.