After previously dismissing plaintiffs’ original allegations of willful infringement, Judge Fallon recently granted plaintiffs’ motion for leave to file an amended complaint to add claims of willful infringement. Intellectual Ventures I LLC, et al. v. Toshiba Corporation, at al., C.A. No. 13-453-SLR-SRF (D. Del. Aug. 17, 2015). Despite the passage of eight months between the original dismissal and the motion to amend, Judge Fallon found no undue delay or prejudice. Judge Fallon noted that the motion was filed within the deadline set in the scheduling order for amending pleadings and that the case is still in its early stages. Id. at 3. Judge Fallon also found that the proposed amendment was not futile because the complaint “provide[s] sufficient details to show that the patents-in-suit were called to defendants’ attention”; and “contains allegations that defendants disregarded the risk of infringement by continuing to disseminate the allegedly infringing products after receiving notice of the patents[.]” Id. at 6-7.
In Kraft Foods Group Brands LLC v. TC Heartland, LLC d/b/a Heartland Food Products Group, et al., C.A. No. 14-28-LPS (D. Del. Aug. 13, 2015), Magistrate Judge Christopher J. Burke recommended denial of Defendants’ motion to dismiss for lack of personal jurisdiction, as well as their motion to transfer venue to the Southern District of Indiana. One Defendant was an Indiana LLC with headquarters in Indiana, was not registered to do business in Delaware, had no offices or any other local presence there, and had no supply contracts in Delaware. The entity did ship orders of the accused products directly to Delaware via “contracts with ‘two national accounts’ that are headquartered outside of Delaware.” Id. at 2. The other Defendant was an Indiana corporation and it was disputed as to whether it was still doing business. Id. at 2-3.
As to personal jurisdiction, Defendants contended that, under the Due Process Clause, there was no specific jurisdiction under the stream-of-commerce theory, under the above facts and where approximately 2% of the accused products were shipped for sale in Delaware. Id. at 5-6, 8. Defendants argued that while they were aware of these shipments to Delaware, the shipments “were ‘initiated’ by their customers – not by them.” Id. at 8. The Court distinguished the Supreme Court and Federal Circuit cases Defendants relied on, see id. at 8-9, and concluded that Plaintiff had established a prima facie case of stream-of-commerce specific jurisdiction, finding that “Defendants themselves knowingly and intentionally shipped a significant number of products directly to Delaware. As such, they ‘purposefully avail[ed themselves] of the privilege of conducting activities within [Delaware].” Id. at 9-10 (edits in original).
Defendants also presented “a novel jurisdictional theory” regarding the other 98% of sales of the accused products. They contended that Plaintiff could not seek redress for those sales outside Delaware, as each act of patent infringement is a separate cause of action and thus Delaware did not have jurisdiction over the non-Delaware sales. See id. at 10. The Court rejected this theory, and affirmed that this Court could assert jurisdiction over out-of-state infringement activities. Id. at 12-14. Accordingly, the Court recommended that the motion to dismiss be denied.
As to transfer, Defendants moved under both 28 U.S.C. §§ 1406(a) (based on improper venue) and 1404(a) (based on Jumara factors). As to Section 1406, they pointed to changes in the general venue statute, 28 U.S.C. § 1391, to contend that a “major change” in the law regarding venue had occurred, and that “venue in a patent action is now appropriate only in a defendant’s state of incorporation, or ‘where the defendant has committed acts of infringement and has a regular and established place of business.’” Id. at 15. The Court had allowed additional briefing on this question, id. at 3, and now rejected Defendants’ arguments, see id. at 18-20, and recommended denial of the motion to transfer under Section 1406.
Defendants had addressd the grounds for transfer under Section 1404(a) and the Jumara factors “in a cursory fashion.” Id. at 21. The Court found that Defendants’ forum preference, where the claim arose, and convenience of the parties weighed in favor of transfer, albeit only slightly as to convenience of the parties. All other factors weighed in favor of transfer or were neutral, often because the parties had simply not addressed the factor in briefing. See id. at 27-28. The Court concluded that “a balancing of the Jumara factors produces a result that is not ‘strongly in favor of’ transfer,” and accordingly recommended denial of the motion. Id. at 29.
In Lambda Optical Solutions, LLC v. Alcatel-Lucent USA Inc., et al., C.A. No. 10-487-RGA-CJB (D. Del. Aug. 7, 2015), Magistrate Judge Christopher J. Burke recommended denial of a counterclaim-defendant’s motion for summary judgment. All other motions before the Court had been mooted by stipulation or the Court’s prior recommendation that summary be granted in favor of the plaintiff/counterclaim defendants. See id. at 5, 7.
The Court first rejected the counterclaim-defendant’s lack of personal jurisdiction arguments as the issue had previously been adjudicated in the case. Id. at 5-6. Further, the Court concluded that issues of material fact remained regarding an inequitable conduct counterclaim, where the counterclaim-defendant, a named inventor, claimed he did not participate in the prosecution of the patent, but, the Court pointed out, the inventor still had a duty of candor and good faith to the patent office, he had signed a declaration to that effect, and the counterclaim-plaintiffs had produced evidence supporting their contention that the inventor had failed to disclose certain prior art. Id. at 6 & n.2.
In a recent Memorandum Opinion Judge Richard G. Andrews denied defendants’ motion for judgment as a matter of law on non-infringement and damages, and motion for a new a trial. Comcast IP Holdings I, LLC v. Sprint Communication Co., C.A. No. 12-205-RGA (D. Del. Aug. 10, 2015). As to the motion for JMOL, defendants’ first argued that “the jury’s verdict rendered three terms in the three asserted claims of the ‘008 patent superfluous, ‘call destination,’ ‘identifier of a second party,’ and ‘second party.’” Id. at 5. Judge Andrews found, however, that there was substantial evidence to support the jury’s determination that each of these limitations was met. See id. at 5-10. Judge Andrews also found that sufficient evidence “was offered for a jury to determine that the accused [technology] infringed the asserted claims of the ‘916 and ‘046 patent.” Id. at 10. As to these patents, Judge Andrews observed that there was sufficient evidence “to find that the ‘parsing’ limitation has been met, particularly when considering [plaintiff’s expert’s] testimony.” Id. at 11. As to the damages award, Judge Andrews explained that plaintiff’s expert’s analysis “was not a ‘black box’ as Defendants argue, nor did she provide ‘no explanation’ for how she reached her figures.” Id. at 13. Judge Andrews observed that “Defendants are correct that [the expert] did not offer a mathematical formula for her result,” but “[t]hat does not mean that her opinion was not based on a sound methodology. The hypothetical negotiation to determine a reasonable royalty can involve some approximation.” Id. at 14. Judge Andrews further noted that “[t]he lack of a mathematical formula, when there is other analysis, cannot, alone, be grounds for excluding [the expert’s] methodology.” Id. at 14. Judge Andrews also denied defendants’ motion for a new trial, unpersuaded by defendants’ arguments as to the weight of the evidence and that plaintiff’s experts exceeded the scope of their reports. Id. at 16-17.
As to plaintiff’s motion for post-trial relief, Judge Andrews granted plaintiff nearly $1.7 dollars in prejudgment interest. Id. at 20. The parties disagreed about whether prejudgment interest should be assessed from the time of the hypothetical negotiation in late 2006 or whether it should be calculated from the time of first infringement of each patent until judgment.” Id. at 18. Considering that each of the three asserted patents was found infringed, Judge Andrews determined that “the measure of damages must be from the time of the hypothetical negotiation to trial for all the asserted patents.” Id. at 18. Moreover, Judge Andrews found that “that the appropriate interest rate is the prime rate, compounded quarterly.” Id. at 20. Judge Andrews also granted post-judgment interest. Id. Judge Andrews finally found that plaintiff is entitled to an ongoing royalty, and granted plaintiff’ request for mediation to that end. Id. at 21-22. Continue reading
In their answer in this patent infringement action, Defendants asserted an affirmative defense of inequitable conduct. The inequitable conduct defense alleged that the inventor and prosecuting attorney of the patent-in-suit had failed to disclose to the PTO an arguably-relevant interference and that the patent-in-suit would not have been granted but for that failure to disclose the interference. The interference in question involved both a patent application and an issued patent. The patent-in-suit claims priority to one application, which in turn claims priority to the application subject to the interference. Defendants argued that because the interference concluded with a determination that this application had been invented “by another,” the subject matter of the patent-in-suit had also been invented by another. Plaintiff moved to strike the affirmative defense, and Judge Stark granted the motion, finding that the Board of Patent Appeals and Interferences had made no priority determination but instead disposed of the interference a barred by the applicable statue of repose. Thus, the interference in question was not material to patentability, rendering the inequitable conduct defense implausible. Elm 3DS Innovations, LLC v. Micron Tech., Inc., et al., C.A. No. 14-1431-LPS, Memo. Or. at 1-3 (D. Del. Aug. 10, 2015).
Judge Andrews recently considered post-trial motions after a jury found Comcast infringed all asserted claims of the patents-in-suit. Sprint Commc’ns Co. L.P. v. Comcast IP Holdings, LLC, C.A. No. 12-1013-RGA (Aug. 7, 2015). Comcast moved for judgment as a matter of law on the issue of infringement. Comcast argued, among other things, that its accused networks “do not and cannot contain multiple, unique ring terminals-and thus do not infringe the asserted patent claims.” Id. at 5. Viewing the evidence in Sprint’s favor, Judge Andrews found that “a reasonable jury could not have concluded that a combination of interface cards meets the Court’s construction of ‘ring terminal.'” Id. at 11. Judge Andrews found that the testimony of Sprint’s expert was contradicted by the platform manuals. Id. Judge Andrews also found that the platforms in the accused networks share multiple rings, therefore a reasonable jury could not have found infringement. Id. at 15.
In the alternative, Comcast also moved for a new trial arguing, among other things, that Sprint presented a new infringement theory based on expert testimony not previously disclosed. Id. at 21. Judge Andrews agreed. Prior to trial, Comcast filed a motion in limine to preclude the expert’s testimony that “a single interface card is a ‘ring terminal'” because it was not disclosed in his expert report. Judge Andrews reserved decision. Id. at 23. After Comcast renewed the argument post-trial, Judge Andrews found that Comcast was entitled to a new trial because Sprint’s concession at oral argument that “a single interface card is not the ring terminal” was in direct conflict with Sprint’s arguments at summary judgment and its expert’s testimony at trial. Id. at 25.
Judge Richard G. Andrews recently stayed two cases pending inter partes review. MiiCs & Partners Am. Inc. v. Toshiba Corp., et al., C.A. Nos. 14-803-RGA, 14-804-RGA (D. Del. Aug. 11, 2015). Judge Andrews found that inter partes review “has the potential to simplify the issues for trial . . . the law of probabilities makes it almost certain that the PTAB will grant at least some of the petitions, and that some of the claims will eventually be rejected or modified, and others of them, even if neither rejected nor modified, will garner additional prosecution history that may be relevant to claim construction.” Id. at 2. The Court added that the case was still relatively early in the schedule, with no depositions yet conducted, and expert discovery a long way off. Finally, the plaintiffs were non-practicing entities, such that “[i]t does not appear that they will suffer any undue prejudice if the motion is granted.” Id. at 3. Overall, the Court found that “this seems pretty close to the classic case for granting a stay pending inter partes review.” Id.
In a recent opinion, Judge Richard G. Andrews granted defendants’ motion to dismiss plaintiff’s claims of direct and indirect infringement. M2M Solutions LLC v. Telit Communication, C.A. No. 14-1103-RGA (D. Del. Aug. 5, 2015). As to plaintiff’s allegations of direct infringement, Judge Andrews observed that plaintiff’s decision to lump two defendants together in addressing its direct infringement claim cannot pass muster under Form 18, which also requires the identification of the accused product, process or method for each defendant. Indeed, Plaintiff’s complaint does not identify which particular defendant or defendants are responsible for which allegedly infringing products, process or method.” Id. at 6. Plaintiff argued that it was appropriate to group “Telit UK and Telit US under an umbrella term” based on “Telit UK’s public representations suggesting its actual control over Telit US.” Id. Judge Andrews found, however, that although “Plaintiff allege[d] the existence of a parent-subsidiary relationship” it failed to “present facts that demonstrate the parent’s effective control over the subsidiary.” Id. at 7.
As to inducement, Judge Andrews found that plaintiff failed to sufficiently plead knowledge that the infringer’s acts constituted infringement. Specifically, plaintiff asserted in its complaint that “[u]pon information and belief, Telit has performed the acts that constitute inducement of infringement with the knowledge or willful blindness that the acts induced thereby would constitute direct infringement by its customers.” Id. at 8. Judge Andrews reasoned that plaintiff’s assertion was based “on no factual allegations [and therefore] cannot pass muster under the plausibility standards.” Id. Further, Judge Andrews also found that plaintiff failed to sufficiently plead a “specific intent to infringe” because it “fus[ed] the two Defendants as one.” Id. at 9. Specifically, Judge Andrews explained that when articulating inducement allegations, plaintiff has to identify “which particular Defendant or Defendants are said to have disseminated the training or instructional materials at issue.” Id. at 10. Judge Andrews also dismissed plaintiff’s contributory infringement claim because plaintiff “lump[ed]” the defendants together, and because “[t]he contributory infringement claim [was] factually too conclusory to state a claim.” Id. at 10 & n.5, 11.
Judge Richard G. Andrews recently granted a motion for judgment on the pleadings that seven asserted patents claimed subject matter that is not patent-eligible under 35 U.S.C. § 101. Personalized Media Commc’ns, LLC v. Amazon.com, Inc., et al., C.A. No. 13-1608-RGA (D. Del. Aug. 10, 2015). Each of the patents was directed generally to “the use of control and information signals embedded in electronic media content to generate output for display that is personalized and relevant to a user.” Judge Andrews found that the patents were not patent-eligible under § 101, because they claimed, respectively, the abstract ideas of: “using personal information to create a customized presentation,” “updating operating instructions,” “decryption,” “completing partial instructions,” “promoting programming,” “receiving instructions for ordering,” and “providing personalized recommendations.”
Judge Robinson recently granted a motion to dismiss a Hatch-Waxman case for lack of personal jurisdiction because the defendant had almost no connection to Delaware. Although Defendant currently conducts drug and business development only in Massachusetts and New York and is incorporated in Virginia, Plaintiff “point[ed] to [Defendant’s] long-standing former incorporation in the State of Delaware . . . from 2002 to 2014” in support of jurisdiction. Purdue Pharma L.P., et al. v. Collegium Pharm., Inc., C.A. No. 15-260-SLR, Memo. Op. at 7-8 (D. Del. Aug. 6, 2015). Recognizing that “the traditional grounds for exercising general jurisdiction over drug company defendants in Hatch-Waxman litigation have been narrowed” recently, Judge Robinson granted the motion to dismiss because there was no general jurisdiction: “[Defendant] is not currently incorporated in Delaware, nor is Delaware its principal place of business.” Id. at 8-9. Further, “the grounds for establishing specific jurisdiction asserted at bar are not compelling . . . . [Defendant] did not send its Paragraph IV Notice Letter to [Plaintiff] in Delaware; [Defendant] is not registered to do business in Delaware; [Plaintiff] did not prepare its NDA in Delaware. Although [Defendant] worked with a Delaware corporation to conduct clinical trials for its NDA submission, there is no indication of record that the trials themselves took place in Delaware. Likewise, although oxycodone, the API used in [Defendant’s proposed] product, is manufactured in Wilmington, Delaware . . . oxycodone is a basic API that is the subject of numerous patents and is commercially available in at least two dosage forms. Even if such a contact were held to satisfy Delaware’s long-arm statute, the court concludes that it would not pass constitutional muster.” Id. at 10.
Having found that the Court lacked jurisdiction, Judge Robinson next had to decide between transfer to the Southern District of New York, where Defendant had consented to jurisdiction and favored transfer, and the District of Massachusetts, where Plaintiff had filed a “back-up action” and favored: “There is no doubt that jurisdiction can be exercised over [Defendant] in Massachusetts, where [Defendant] continues to be headquartered and to engage in drug and business development and investment activities. . . . [A] straightforward venue like Massachusetts is the most reasonable solution to the parties’ dispute in this regard.” Id. at 11-12.