In a recent order, Judge Richard G. Andrews denied a motion seeking permission to use confidential discovery information obtained in the district court litigation before the PTAB in an inter partes review proceeding. Callwave Commc’ns LLC v. AT&T Mobility LLC, et al., C.A. Nos. 12-1701-RGA, 12-1702-RGA, 12-1703-RGA (D. Del. Feb. 19, 2015). As Judge Andrews explained, “my view is that discovery before the PTAB is an issue for the PTAB. Any confidentiality issues, if discovery is permitted, can be resolved at the same time by the PTAB.”
Judge Andrews recently addressed two interesting legal questions on summary judgment motions related to invalidity and limitation of damages. The first related to the requirement of 35 U.S.C. § 120 that a patent application be “if filed before the patenting . . . on the first application” in order to have the priority date of that previously-filed application. Because a foreign patent application with an identical specification had been filed more than a year before three patents-in-suit, if the patents-in-suit were not treated as continuations of another application with the benefit of an earlier priority date, they would be anticipated by the foreign application. Immersion Corp. v. HTC Corp., et al., C.A. No. 12-259-RGA, Memo. Op. at 5-8 (D. Del. Feb. 11, 2015). The parent of the patents-in-suit was issued on August 6, 2002, and the patents-in-suit were all filed on the same day. Thus, the question was whether the patents-in-suit could have been “filed before the patenting” of the parent, which, the defendants argued, automatically issued at 12:00:01 a.m. on August 6, 2002. Id.
The plaintiff argued that the PTO has “long given continuation applications the priority date of a prior application if the continuation is filed on the same day that the prior application issues as a patent” and that the PTO has expressed this position in the MPEP. Accordingly, the plaintiff argued that the Court should give Chevron deference to the PTO as a matter of administrative law. Judge Andrews, however, found that the PTO’s view was not entitled to Chevron deference because the relevant statute is not “silent or ambiguous” Rather, “35 U.S.C. § 120 . . . expressly states that the application must be filed ‘before’ the parent application issues.” Id. Further, although the plaintiff pointed to one district court that had adopted the PTO’s interpretation, the Federal Circuit has expressly “left open the question of ‘whether filing a continuation on the day
the parent issues results in applications that are co-pending as required by the statute.’” Id. (citing Encyclopaedia Britannica, Inc. v. Alpine Electronics of Am., Inc., 609 F.3d 1345, 1352 (Fed. Cir. 2010)). Because the plaintiff had the burden of proving entitlement to an earlier priority date and did not present evidence of when on August 6, 2002 the applications were filed, it did not establish an earlier priority date and Judge Andrews granted the defendants’ motion for summary judgment of anticipation of the three patents-in-suit. Id.
Secondly, Judge Andrews addressed a cutoff on damages at the point of a patent’s reissuance. “If a patent is reissued, damages are available for the period between the original issuance and the issuance of the reexamined claims only if the original claims and reexamined claims are ‘identical’ . . . [or] ‘without substantive change.’” Id. at 14-16. In this case, the patentee added the phrase “concurrently running” to the claim at issue, which the defendants argued was a substantive change and the plaintiff argued was merely a clarification that did not affect claim scope. Judge Andrews found that this was a substantive change to claim scope because although “the specification is a relevant consideration, Plaintiffs argument that having multiple programs is inherent in the claim because it is disclosed in the specification is contrary to the ‘well-established principle that a court may not import limitations from the written description into the claims.’ . . . Moreover, though not dispositive, it is highly persuasive that the patent examiner allowed the amended claim only after ‘concurrently running’ was added because the prior art made ‘no reference to any other programs that are running concurrently and how the determination is made between the plurality of concurrently running programs . . . .’” Id.
Chief Judge Stark recently addressed a similar issue involving damages for a reissued patent, finding that damages must be cut off at the filing of a complaint because the patentee had failed to mark embodying products or otherwise provide notice of its patent during the period of patent reissuance.
In Alltech Associates Inc. v. Teledyne Instruments Inc., C.A. No. 13-425-RGA (D. Del. Feb. 12, 2015), Judge Richard G. Andrews denied plaintiff’s unopposed motion to vacate certain of the Court’s claim construction rulings in the case. Having reached a settlement agreement with defendant, plaintiff argued that the Court’s constructions it disagreed with “should be vacated because settlement precludes review of the constructions,” and expressed concerns about the constructions “having a collateral estoppel effect” in subsequent cases. Id. at 1. The Court denied the request. It observed that while “[s]ettlement of any civil litgation is usually a good outcome,” refusing to vacate an order may encourage settlement early on if parties had to “carefully assess whether settlement was in their best interest before a claim construction hearing.” Id. (emphasis added). The Court further explained that “[a]ssuming that the standard that applies is whether there are exceptional circumstances justifying vacating the claim construction order . . . that standard has not been met. . . . [The Court could not] judge how important vacating the claim construction is to the settlement” based on the motion. Id.
In Intel Corporation v. Future Link Systems, LLC, 14-377-LPS (D. Del. Feb. 12, 2015), Magistrate Judge Christopher J. Burke addressed Future Link’s motion which sought to dismiss Intel’s declaratory judgment complaint related to nine patents on various grounds. In particular, Future Link alleged “(1) that the Complaint should be dismissed for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1), as Intel does not have standing to bring the declaratory judgment claims at issue; (2) that Intel’s claims regarding direct and indirect non-infringement should be dismissed for failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6); (3) that Intel’s claims regarding a license defense and the doctrine of patent exhaustion also fail to state a claim pursuant to Rule 12(b)(6); and (4) that the Court should exercise its inherent authority under the Declaratory Judgment Act to dismiss the suit.” Id. at 6.
Judge Burke recommended granting Future Link’s motion, in part. Specifically, Judge Burke recommended that the court dismiss Counts 1-14 and 17-20 of the Complaint. Judge Burke further recommended that the motion be denied as to Count 16, and granted in part with respect to Count 15. In particular, with respect to Count 15, Judge Burke recommended that the motion to dismiss be granted with respect to indirect infringement of all claims of the ’0576 patent and direct infringement of claims 17-19, and denied with respect to direct infringement of claims 1-16 and 20-21. The dismissal of these claims was recommended to be without prejudice. Id. at 29-30.
As Judge Burke explained, “Intel’s first theory as to why subject matter jurisdiction exists relates to the infringement allegations Future Link made against Intel’s customers Dell, HP and Promise” in various letters. See id. at 2-5, 8. As to direct infringement of certain claims of one patent at issue, the ’0576 Patent, Judge Burke found subject matter jurisdiction to exist. Judge Burke explained that “since it is reasonable to infer that Future Link has accused Dell, HP, and Promise of infringement based solely on the use and sale of Intel components, there is necessarily an implied accusation that Intel itself has also directly infringed the 18 arrangement claims. This is because Intel, in both making these components and selling them to its three customers, would have been performing its own independent acts of infringement (assuming that these components are, in fact, infringing).” Id. at 15. On the other hand, Judge Burke found Intel’s allegations as to direct infringement of the other eight patents at issue insufficient to support subject matter jurisdiction. Judge Burke explained that “[h]ere, at most these allegations indicate that (1) Intel’s customers have been accused of infringement, and (2) Intel produces at least some (unspecified number of) ‘components’ that are the subject of these accusations. But unlike in Arris or DataTern, here there are: (1) no allegations that Future Link had ever directly accused Intel of infringement of these eight patents; (2) no allegations that Future Link ever communicated with Intel regarding Intel’s role in Dell, HP or Promise’s asserted acts of infringement; and (3) again, no allegations that Future Link specifically listed Intel’s own products by name when discussing its customers’ alleged infringement of the patents.” Id. at 20. Judge Burke also found that the complaint did not provide sufficient allegations to establish subject matter jurisdiction with respect to induced or contributory infringement. Id. at 17-18, 23-24.
Judge Burke then turned to Intel’s second theory of subject matter jurisdiction, which was based on Intel’s alleged indemnity obligations to its customers. Judge Burke found this theory insufficient to support subject matter jurisdiction, as it was “not clear enough from the Complaint (and the Dell, HP and Promise Letters) that Future Link was actually putting Intel components at issue.” As Judge Burke explained, Intel did not cite any authority that “courts have found subject matter jurisdiction to exist when it was unclear from the Complaint that a patent holder’s allegations against the customer in fact related to the sale or use of the supplier’s equipment in the first place.” Id. at 25.
Lastly, Judge Burke recommended denying Future Link’s motion to dismiss for failure to state a claim of non-infringement. As to the claims at issue, Judge Burke noted that “[a]lthough Intel’s allegations in Count 15 are sparse as to the products at issue, the remainder of its Complaint provides needed context.” Id. at 28.
Judge Gregory M. Sleet recently granted a motion by Intel to transfer a case to the District of Oregon. Memory Integrity, LLC v. Intel Corp., C.A. No. 13-1804-GMS (D. Del. Feb. 13, 2015). In addressing the Third Circuit’s Jumara factors, Judge Sleet discounted the weight of Memory Integrity’s choice to file suit in Delaware, its “home” forum, agreeing with Intel (itself a Delaware corporation) that because Memory Integrity is a “non-practicing entity with no facilities, operations, employees, or presence in Delaware[,]” it “cannot reap the full benefits of heightened deference” to its chosen forum. Id. at 4. On the other hand, Judge Sleet found Intel’s preferred forum, the District of Oregon, to make sense given that the company has a large design and development facility in Oregon, along with 37,000 employees. Id. at 5. Although the parties disputed whether the accused products in the case were developed in Oregon or Israel, Judge Sleet noted that it was undisputed that they were not developed in Delaware, id. at 7, nor were there any identified witnesses or records located in Delaware, id. at 8-9. On balance, Judge Sleet found that the Jumara factors tipped in favor of transferring the case.
In Lifeport Sciences LLC, et al. v. Cook Incorporation, et al., C.A. No. 13-362-GMS (D. Del. Feb. 5, 2015), Judge Gregory M. Sleet granted defendants’ motion for judgment on the pleadings regarding one of the patents-in-suit, finding that this patent was subject to a covenant not to sue between the parties.
Plaintiffs’ predecessor-in-interest had entered into an agreement (“2003 Agreement”) with defendants not to sue them or their customers for infringement of a certain family of products which “are or have been sold commercially anywhere in the world.” Id. at 1 n.1. The parties disagreed whether this agreement would apply to products sold after the effective date of the agreement. Applying Indiana law, the Court agreed with defendants’ interpretation that “the use of ‘are or have been sold’ . . . created an ongoing covenant not to sue, not limited in time by the effective date of the 2003 Agreement. The Plaintiffs place unwarranted emphasis on the argument that ‘are’ and ‘have been’ represent only present and past tense, but not future. This simplistic view ignores the fact that present-tense language may also imply future action as well.” Id. at 2 n.2. Further, plaintiffs’ reading would render “are” superfluous. Id. at 3 n.2. The Court was also not persuaded by plaintiffs’ citations to other sections of this agreement. Id.
In its analysis, the Court pointed out that while presenting matters outside the pleadings on a 12(d) motion typically converts it to a motion for summary judgment, here the agreement at issue was attached to defendants’ answer, “the parties did not dispute its authenticity, and plainly the Plaintiffs’ claim arising from [this patent] implicates the 2003 Agreement. Thus, the court may appropriately consider the 2003 Agreement at this stage.” Id. at 2 n.2.
Judge Richard G. Andrews recently granted Defendant’s letter request to file an early motion for partial summary judgment in light of the Court’s view that “there is a reasonable possibility that Plaintiff is estopped from asserting that lenalidomide can meet the claim limitations requiring thalidomide under the doctrine of equivalents.” Andrulis Pharms. Corp. v. Celgene Corp., C.A. No. 13-1644-RGA (D. Del. Feb. 6, 2015). In its letter request (D.I. 59) defendant argued that “early summary judgment [was] appropriate because Andrulis concede[d] that [the accused product] does not literally infringe and because prosecution history estoppel is a purely legal issue based on indisputable facts that bars Andrulis’s allegation that [the accused product] infringes under the doctrine of equivalents.” D.I. 59 at 1. Judge Andrews also cautioned defendant to not file a motion staying discovery pending the Court’s resolution of the partial summary judgment motion because the Court would not use its discretion to grant such a motion.
In a recent order, Judge Gregory M. Sleet denied the parties’ motions to exclude the testimony of various experts. In particular, Judge Sleet denied plaintiffs’ motion to exclude defendant’s technical and damages experts, and defendant’s motion to exclude plaintiffs’ damages expert. L’Oréal S.A. v. MSD Consumer Care, Inc., C.A. No. 12-99-GMS (D. Del. Feb. 4, 2015).
Judge Sleet found that while the defendant’s technical expert possessed “extraordinary skill in the art of photochemistry,” he did “not satisfy his own definition of one having ordinary skill in the art” as to the subject matter in dispute. Id. at 1 n.1. Judge Sleet explained why the Court would nevertheless permit defendant’s technical expert to testify. Id. Judge Sleet found that “[w]hile there may not be absolute overlap between the fields of photochemistry and sunscreen formulation, the court is convinced that the nexus is sufficiently close such that [the expert’s] testimony is ‘likely to assist the trier of fact to understand the evidence or to determine infringement’ or invalidity.” Judge Sleet further noted that “[t]his is not a situation where [the expert’s] expertise is so far removed from the subject sub-specialty, that he is rendered unqualified to offer his opinion to the fact finder.” Id.
Judge Sue L. Robinson recently granted a defendant’s motion for summary judgment of no remedies. Rosebud LMS, Inc. d/b/a Rosebud PLM v. Adobe Systems Inc., Civ. No. 14-194-SLR (D. Del. Feb. 5, 2015). Because it was undisputed that the plaintiff’s patent issued after the defendant discontinued its accused product, the Court explained that the only remedies potentially available were provisional remedies under 35 U.S.C. § 154(d), based on the publication of the patent application. Id. at 3-4. Here, however, Judge Robinson found that the plaintiff failed to prove that the defendant had actual notice of the published patent application. Specifically, the Court rejected the argument that the defendant had an affirmative duty to search patent applications because of the parties’ litigation history. Id. at 6. The Court also found that the other purported evidence of actual notice showed, at best, constructive notice, which was not sufficient for purposes of awarding provision remedies under § 154(d). Id. at 6-7.
In The Money Suite Company v. 21st Century Insurance and Financial Services, Inc., et al., C.A. No. 13-984-GMS (D. Del. Jan. 27, 2015) and a series of related actions (Nos. 13-986, 13-1747, and 13-1748-GMS), Judge Gregory M. Sleet granted defendants’ joint motion to dismiss (or for judgment on the pleadings), on the basis that the patent-in-suit was invalid as an abstract idea under Section 101. The patent is directed to “a computerized method for generating price quotes for financial products.” Id. at 2.
Citing Alice Corp., the Court concluded that the patent was indeed directed to an abstract idea, noting that the “concept is not dissimilar from those discussed by recent [Section] 101 court cases,” including Alice Corp. Id. at 5. Furthermore, the patent’s “outlined sequence of steps [e.g., “the use of front-end network gateways to allow users to interface with remote servers in order to generate a price quote for financial products,” id. at 7] is neither inventive nor sufficiently narrow to alleviate preemption concerns. The use of front-end network gateways . . . is not new[.]” Id. Further, “[l]eaving open the possibility of practicing the idea of price quoting financial products manually does not save the [patent-in-suit, as plaintiff contended]. This was the very concern underlying the court’s rationale in Alice: monopolizing computerized implementations while allowing the public to practice the idea ‘by hand’ does not comport with [Section] 101.” Id. at 9. The Court also distinguished the patent-in-suit from the patent upheld as valid in DDR Holdings, LLC v. Hotels.com, 773 F.3d 1245 (Fed. Cir. 2014), explaining that the generation of price quotes for financial products was “undeniably a pre-Internet concept,” and thus the asserted claims did “precisely what DDR Holdings explains is fatal to many computer-based patents.” Id. at 10.
As a result, the Court granted the defendants’ joint motion to dismiss based on Section 101 invalidity. Id. at 11.