Judge Gregory M. Sleet recently granted defendants’ motion to stay litigation filed by IMS Health Incorporated pending the PTAB’s resolution of the covered business method patent review. IMS Health Incorporated v. Symphony Health Solutions Corporation, C.A. No. 13-2071-GMS (D. Del. May 29, 2015). Defendants filed petitions to institute a covered business method (“CBM”) review of the patents in suit. At the time of Defendants’ motion to stay, the Patent Trial and Appeal Board (“PTAB”) instituted review of one patent and the remaining petition was under consideration. Judge Sleet stayed the litigation as to the first petition and temporarily stayed the litigation pending the PTAB’s decision regarding institution of CBM review of the remaining patents in suit.
In StrikeForce Technologies, Inc. v. PhoneFactor, Inc., C.A. No. 13-490-RGA-MPT (D. Del. May 26, 2015), Magistrate Judge Mary P. Thynge recommended denying plaintiff’s (“StrikeForce”) motion to amend its complaint to add allegations of infringement against Microsoft Corporation (“Microsoft”) pursuant to Fed. R. Civ. P. 15(a). StrikeForce acknowledged that “it was aware Microsoft acquired [defendant] PhoneFactor as its wholly-owned subsidiary in October 2012,” but argued that “it was only shortly before filing its motion to amend its complaint and join Microsoft that it became apparent PhoneFactor is not operating as an independent entity, purportedly necessitating the filing of that motion.” Id. at 3.
In reaching the recommendation to deny StrikeForce’s motion, Judge Thynge first concluded that StrikeForce’s “delay in seeking to join Microsoft was undue and its explanation for that delay insufficient to support granting its motion.” Id. at 10. Judge Thynge observed that “[d]espite StrikeForce giving Microsoft actual notice of the ‘599 patent, its belief that Microsoft was one of its ‘largest infringers,’ and Microsoft’s public announcement of its ‘phone based two factor authentication,’ StrikeForce did not name Microsoft as a defendant.” Id. at 7. Judge Thynge also noted that “StrikeForce waited almost twenty-two months after its CEO commented that Microsoft was ‘one of our largest infringers’ and almost nineteen months after filing its initial complaint, and after the Markman hearing was held, to seek to sue Microsoft for infringement in this case.”
In recommending denial of the motion, Judge Thynge also found that “StrikeForce’s ability to separately bring suit against Microsoft, as well as the disruption and delay of the schedule in the instant suit at this stage of the proceeding by the addition of Microsoft, would prejudice PhoneFactor and disrupt the orderly continuation of this case under the current scheduling order.” Id. at 12. Judge Thynge found it notable that StrikeForce “filed its motion to amend after the claim construction hearing had taken place.” Id.
Judge Robinson recently faced the question of the application of two pre-litigation agreements between Boston Scientific, Medtronic, and their predecessors to the awarding of attorneys’ fees at the end of the litigation. The specific agreements at issue included a provision requiring reimbursement of the prevailing party’s attorneys’ fees if infringement litigation arose between the parties. This provision applied to the instant litigation because the later agreement modified the earlier agreement in order to substitute successors in interest but did not eliminate the attorneys’ fee provision of the earlier agreement. Medtronic, Inc. v. Boston Scientific Corp., C.A. No. 07-823-SLR, Memo. at 7-8 (D. Del. May 27, 2015). Furthermore, although one of the defendants was not a signatory to the agreement at issue, Judge Robinson concluded that the defendant was bound by that agreement because it had enjoyed the benefits of the agreement and had engaged in a course of conduct that showed it adopted the agreement. Id. at 8-9.
Judge Robinson also determined that the declaratory judgment plaintiff, Medtronic, was not time-barred from moving for attorneys’ fees under the agreements. The agreement at issue required only a determination of the prevailing party for its “loser pays” provision to apply. Accordingly, there were no issues of fact to present to a jury and Medtronic had not waived its entitlement to attorneys’ fees by failing to offer proof at trial or present the claim in the pretrial order. Judge Robinson therefore concluded that the request for attorneys’ fees post-trial was timely. Id. at 4-6.
Chief Magistrate Judge Thynge recently issued a report and recommendation addressing a patent infringement defendant’s motion to dismiss for failure to state a claim of joint infringement and recommending that the motion be granted. Two-Way Media Ltd. v. Verizon Commc’ns Inc., et al., C.A. No. 14-1212-RGA-MPT, Report and Recommendation at 1-2 (D. Del. May 18, 2015).
Judge Thynge first found that the allegations of the complaint, “viewed in the light most favorable to plaintiff, are sufficient to support the inference that defendants and the third parties carry out all steps claimed in the patents-in-suit.” Id. at 9-10. Although the defendant objected to a phrase in the allegations as “insufficiently precise” and unrelated to the claims of the patents-in-suit, Judge Thynge found that the allegation related to a specific claim of a patent-in-suit and suggested that any ambiguity should be the subject of claim construction rather than a motion to dismiss. Id.
With respect to defendant’s direction and control over the third parties, however, Judge Thynge found that the complaint did not adequately state a claim of joint infringement. “This court is required to take plaintiff’s factual allegations as true, but plaintiff cannot plausibly allege the third parties were contractually obligated to perform all of the steps enumerated in plaintiff’s patents because the terms of the contracts between defendants and the third parties are unknown to plaintiff. . . . Even if Fed. R. Civ. P. 12(b)(6) allowed this court to look outside the record at the extrinsic materials submitted by plaintiff in its response to the motion to dismiss, it would find the third parties were independent businesses providing statistical services to multiple clients using what appears to be proprietary metrics. Thus, it is merely possible—rather than plausible—that defendants control and direct the third parties.” Id. at 13-14.
Magistrate Judge Christopher J. Burke recently considered the impact of a final judgment in a parallel Nevada action on several motions for summary judgment. Spectrum Pharmaceuticals, Inc., et al. v. InnoPharma, Inc., et al., C.A. No. 12-260-RGA-CJB (D. Del. May 22, 2015). Judge Burke ultimately recommended that the defendants’ invalidity motion be granted on collateral estoppel grounds, and the defendants’ non-infringement motion be granted on collateral estoppel grounds with respect to the asserted claims that were the subject of the Nevada judgment. Judge Burke recommended that the plaintiffs’ validity motion be denied as moot, and that the defendant’s non-infringement motion with respect to the asserted claims that were not at issue in the Nevada action also be denied as moot based on a representation by plaintiffs’ counsel that those claims were no longer being asserted.
In Masimo Corporation v. Philips Electronic North America Corporation, et al., C.A. No. 09-80-LPS (D. Del. May 18, 2015), Chief Judge Leonard P. Stark concluded, after a ten-day bench trial, that Defendants had not proven inequitable conduct by Plaintiff. Defendants had alleged that three of Plaintiffs’ attorneys had committed inequitable conduct during a reexamination of one of the patents-in-suit when they did not inform the PTO that Magistrate Judge Thynge, and the Court when it adopted the Magistrate’s Report and Recommendation (“SJ Order”), had rejected constructions on which Plaintiff had relied to overcome the PTO’s rejections.
The Court determined that Defendants had not proven that Plaintiff’s attorneys had “made a deliberate decision to withhold” the SJ Order from the PTO. Id. at 15 (internal quotation marks omitted). Instead, the Court concluded that “these attorneys had set up a system of disclosure aimed at providing the PTO with all relevant district court orders by filing [invention disclosure statements] in [the relevant reexamination] [.]” Id. The Court concluded that “the ‘single most reasonable inference’” as to why this particular order had not been disclosed to the PTO was that “this was the result of timing and circumstances of the reexamination process rather than any deceitful intent of [the attorneys].” Id. at 16. The attorneys had developed a system in which the prosecution attorneys, who could not view information in the litigation subject to the protective order, would still be kept apprised of developments, and the policy was that “anything even remotely relevant to the merits of the case should be submitted.” Id. at 15 (internal quotation marks omitted).
The Court also found that Defendants had not proven that the SJ Order was a “known material reference in the view of [these attorneys], at a time when any of them believed they could have submitted the SJ Order as part of the [relevant reexamination].” Id. at 21. The Court explained that “the record supports a strong inference that [Plaintiffs’] attorneys would have disclosed the SJ Order if they had understood its purported implications during the ten-day window between the SJ Order and the [Notice of Intent to Issue Reexamination Certificate] [(“NIRC”)] . . . and did not do so after that period only because they believed the [reexamination] was closed and, therefore, they were not permitted to do so. . . . Even if [the attorneys] were technically wrong about what post-NIRC disclosures were permissible under the MPEP (a dispute the Court need not resolve), what is decisive here is that they believed no such disclosures were possible.” Id. at 23.
Furthermore, the Court concluded that Defendants did not prove that the attorneys made a misrepresentation to the PTO by “failing to correct a statement [Plaintiff] made to the PTO in a response to an office action, a statement that in [Defendants’] view became false the moment Judge Thynge issued her R&R.” Id. at 23. The Court concluded these “statements” were, in fact, arguments regarding claim construction, and thus no misrepresentation had been made. Id. at 24-25.
In a recent decision, Judge Sue L. Robinson ruled on a number of post-trial motions in a dispute over digital camera technology. Intellectual Ventures I, LLC, et al. v. Canon Inc., et al., Civ. No. 11-792-SLR (D. Del. May 18, 2015). Notably, Judge Robinson found that the defendant waived its right to pursue two purportedly renewed motions for judgment as a matter of law. First, Judge Robinson explained that although the defendant moved pursuant to Rule 50(a) for a judgment of no infringement of one asserted patent, and the defendant argued in opposition to the plaintiff’s Rule 50(a) motion with respect to the validity of that same patent, the defendant failed to, itself, move pursuant to Rule 50(a) for judgment of invalidity as a matter of law. Judge Robinson found, therefore, that the defendant waived its right to file a renewed motion for judgment as a matter of law seeking to invalidate that patent. Id. at 11 n.2. With respect to another patent, the Court found that the defendant waived its right to pursue a renewed motion for judgment as a matter of law of obviousness, because its Rule 50(a) motion was limited to arguments relating to anticipation. Id. at 19 n.6.
Judge Robinson granted the plaintiff’s motion for a new trial with respect to the jury’s finding of no induced infringement of two patents. As the Court explained, the defendant had represented that it did not intend to argue non-infringement, and the defendant in fact offered no expert testimony on non-infringement. Instead, the defendant called a fact witness who discussed the operation of the accused technology, and then used that testimony as “the bedrock for its closing argument to the jury that the accused devices do not meet the ‘digital image magnification’ limitation of the claims.” Id. at 45-46. Judge Robinson explained that the defendant’s counsel “improperly played the role of expert witness by inferring from factual testimony that the accused devices do not meet the claim limitations.” Id. at 46. Although the defendant argued that a limiting instruction cured any prejudice this caused, the Court disagreed and explained that “[t]he court promised that it would correct any counter-mischief by Canon’s counsel in this regard. . . . It does now by granting IV’s motion for a new trial on infringement . . . .” Id. at 47.
Chief Magistrate Judge Mary Pat Thynge recently issued a report recommending that a motion to dismiss a claim for joint infringement be granted. Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC, et al., C.A. No. 14-1006-RGA-MPT (D. Del. May 13, 2015). Judge Thynge explained that “to survive a motion to dismiss the claim of joint infringement, a plaintiff must plead facts sufficient to allow a reasonable inference that various parties perform all of the claimed steps; and one party exercises the requisite ‘direction or control,’ such that performance of every step is attributable to the controlling party.” Id. at 8. Judge Thynge found that the plaintiff’s allegations were sufficient to support an inference that all steps claimed in the patents-in-suit were carried out by defendants and various third parties. However, “[h]ere, plaintiff sets forth an unsupported proposition that Comcast and NBCU control or direct the third parties, despite conceding the issue of control and direction turns on whether the third parties had discretion to perform the claim limitations.” Id. at 11. In this case, Judge Thynge found that “plaintiff cannot plausibly allege the third parties were contractually obligated to perform all of the steps enumerated in plaintiff’s patents because the terms of the contract between defendants and the third parties are unknown to plaintiff.” Id. “Thus, it is merely possible—rather than plausible—that defendants control and direct the third parties.” Id. at 12.
In Cox Communications Inc, et al. v. Sprint Communications Company L.P., et al., C.A. No. 12-487-SLR (D. Del. May 15, 2015), Judge Sue L. Robinson granted Plaintiffs’ motion for partial summary judgment as to the indefiniteness of the term “processing system” found in four of the patents-in-suit owned by Defendants that share a specification. Defendants offered a proposed construction for this term, citing the opinion of its expert, while Plaintiffs’ expert opined that there was no known, well-understood meaning for this term and that the term was only described functionally. Id. at 6-7. The Court concluded that this term was indefinite, finding that there was no established meaning in the art for this term and that the” claim language and specification do not provide structural limitations for the ‘processing system’ and do not inform those skilled in the art about the scope of the invention with reasonable certainty.” Id. at 10-11.
In Polar Electro Oy v. Suunto Oy et al., C.A. No. 11-1100-GMS (D. Del. May 12, 2015), Judge Gregory M. Sleet granted defendant Suunto Oy’s (“Suunto”) motion to dismiss for lack of personal jurisdiction. Plaintiff Polar Electro Oy (“Polar”) filed this patent infringement lawsuit against defendants Suunto, Amer Sports Winter & Outdoor (“ASWO”), and Firstbeat Technologies Oy. Id. at 1. As Judge Sleet explained, “Polar is a company operating and existing under the laws of Finland, with its principal place of business in Kempele, Finland” and “Suunto is also a Finnish company, with its principal place of business in Vaanta, Finland.” Id. at 2. Further, “Suunto does not sell its accused products directly in the United States,” but rather contracts with “ASWO, a Delaware corporation . . . to distribute Suunto products in the United States.” Id.
Considering Suunto’s motion, Judge Sleet found that the Delaware long-arm statute was met under a theory of “dual jurisdiction” or “stream of commerce” jurisdiction, which “arises from at least partial satisfaction of subsections (1) and (4) of the Delaware long-arm statute.” Id. at 6. Specifically, Judge Sleet first found that Suunto had an “intent to serve the Delaware market.” Judge Sleet explained that “Suunto’s relationship with ASWO clearly demonstrates an intent to serve the United States market at large” and that “[a] non-resident firm’s intent to serve the United States market is sufficient to establish an intent to serve the Delaware market, unless there is evidence that the firm intended to exclude from its marketing and distribution efforts some portion of the country that includes Delaware.” Id. at 7. Judge Sleet further noted that “there is no dispute that Polar alleges patent infringement for Suunto products that are sold in Delaware.” Id. at 8.
Despite finding the Delaware long-arm statute satisfied, Judge Sleet nevertheless concluded that “due process considerations prevent the exercise of jurisdiction over Suunto.” Id. at 10. Judge Sleet noted that “releasing a product into the stream of commerce, without ‘something more,’ cannot furnish a basis to exercise jurisdiction.” Id. at 9. Judge Sleet then explained that “Suunto sells its products through a U.S. distributor,” ASWO, and that “[a]s Polar itself acknowledges, the goal of the distribution agreement is to increase Suunto’s market share in the United States at large, without any particular focus on Delaware (or any state for that matter).” Id. Judge Sleet concluded that “ASWO’s ultimate dealings with retailers in Delaware may have been foreseeable, but the court sees no evidence of intent–there is not ‘something more’ beyond placing the product into the stream of commerce.” Id.