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In a case involving misappropriation of trade secrets and confidential information, copyright, and Lanham Act false designation of origin and unfair competition claims, Judge Sue L. Robinson denied Plaintiff’s motion for a preliminary injunction. Adtile Technologies Inc. v. Perion Network Ltd., et al, C.A. No. 15-1193-SLR (D. Del. June 23, 2016). Plaintiff develops “mobile ‘Motion Ads,’” i.e. motion-activated advertisements, and had previously entered into a licensing agreement related to such technology with one of the Defendants, but the parties had terminated the agreement over disputes regarding the Defendant’s use of Plaintiff’s technology and Plaintiff’s alleged refusal to provide Motion Ads under the agreement.

The Court concluded that the Plaintiff had not demonstrated a likelihood of success as to any of its claims. Plaintiff’s “trade secrets and confidential information are not sufficiently delineated from what is either publically available . . . or discernable from the Motion Ads . . . . That [Plaintiff] included, without attribution, [certain allegedly copyrighted and trademarked images] in two ads provided to [one Defendant] as deliverables under the License Agreement weakens [Plaintiff’s] copyright and trademark infringement arguments. The court concludes that [Plaintiff] has not shown likelihood of success on the merits.”  Id. at 13.

The Court then found that the other eBay factors were largely neutral. As to irreparable harm, while Plaintiff claimed that it was “losing the opportunity to develop its client base,” the Court also observed that “the parties were able to quantify the value of [Plaintiff’s] technology and product” through their license agreement. Id. at 14. Further, the Court could not “delineate on the record at bar what, if any, trade secrets and confidential information [Plaintiff] possesses, which cuts against injunctive relief.” Id. As to balance of hardships, while Plaintiff could lose “significant revenue, a stellar reputation as a technology innovator, and substantial market share,” Defendants “stand to lose substantial contracts and relationships if enjoined. Such a disruption would also cause harm to third parties, which have contracted with [one of the Defendants].” Id. at 15. As to public interest, while the public would have an interest in protecting trade secrets, confidentiality agreements, and copyrighted property, because Plaintiff had not shown a likelihood of success on its causes of action, certain of the information at issue was publicly available, and Plaintiff was “not the only company involved in the making of motion-activated ads, yet it seeks to . . . wholly eliminate one of its competitors,” this factor was also neutral. Id. at 15.

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In a recent Order, Judge Gregory M. Sleet denied defendants’ (“Google”) motion to amend the answer, which sought leave to include an implied license affirmative defense. VideoShare, LLC v. Google, Inc. and YouTube, LLC, C.A. No. 13-990-GMS (D. Del. June 23, 2016).

Because Google filed its motion to amend more than two months after the scheduling order’s deadline to amend the pleadings, Google was required to show good cause pursuant to Fed. R. Civ. P. 16(b)(4). Judge Sleet found that Google failed to meet this burden:

The basis of Google’s implied license defense is VideoShare’s June 21, 2013 covenant not to sue for infringement of U.S. Patent No. 7,987,492. Nonetheless, Google failed to include the implied license defense in its pleadings for a year and a half after VideoShare entered the covenant not to sue. Google has made no attempt to explain its delay in presenting this defense. Google does not contend that it lacked sufficient information to meet the amendment deadline, or that it discovered new information that could not be timely pled. Therefore, Google has not demonstrated why its amended defense could not have been sought in a timely manner.

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Magistrate Judge Thynge has issued a Report and Recommendation addressing whether there is an actual case or controversy within the meaning of the Declaratory Judgment Act over a suit in which the plaintiff seeks judgment of a defendant’s willful infringement based on the defendant’s filing of a New Drug Application with the FDA. Both the plaintiff and the defendant in this case filed NDAs with the FDA and neither party’s NDA has been approved. The parties in the case are also parties to an interference in the PTO in which the defendant is the senior party. Clarus Therapeutics, Inc. v. Lipocine Inc., C.A. No. 15-1004-RGA-MPT, Report and Recommendation at 1-5 (D. Del. June 23, 2016).

Given these facts, Judge Thynge found “significant, concrete steps to conduct infringing activity” as well as ripeness for judicial resolution: “Defendant not only has a working product, but also has an NDA before the FDA for review. Additionally, plaintiff notes defendant’s market research, hiring of new sales and marketing personnel, saving for manufacture of commercial quantities of its product, manufacture of launch supplies, and anticipation of the manufacturing agreements. Defendant contends the prerequisite FDA approval for commercialization and entry into the market is uncertain and, if approval is eventually given, commercial launch will not be immediate. While this may be accurate, defendant’s conduct is still indicative of meaningful preparation for the making, launch, and use of [its drug product] that satisfies the immediacy requirement for declaratory judgment jurisdiction.” Id. at 8-11.

Moreover, “the PTAB’s decision in the upcoming Interference will not determine the issue of infringement central to plaintiff’s complaint. Due to the lack of further factual development needed and the PTAB’s inability to hear plaintiff’s infringement claim in the forthcoming Interference, the issue is fit for judicial decision.” Id. at 11. Judge Thynge therefore recommended that the defendant’s motion to dismiss be denied.

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Judge Sleet recently denied motions to dismiss and bifurcate counterclaims of inequitable conduct and antitrust violations. In response to the plaintiffs’ complaint for patent infringement, the defendant in this case filed an answer that included ten counterclaims. The plaintiff then moved to dismiss or bifurcate counts IX and X of the counterclaims, which were for inequitable conduct and Sherman Act violations. Judge Sleet found, however, that the plaintiff was “improperly seek[ing] to disprove [defendant’s] factual assertions. The court does not analyze the factual disputes raised by [plaintiff], but examines the sufficiency and plausibility of [defendant’s] claims.” F’real Foods, LLC, et al. v. Hamilton Beach Brands, Inc., et al., C.A. No. 16-41-GMS, Order at 2 n.1 (D. Del. June 13, 2016). Specifically, the inequitable conduct claims were adequately plead because the included the “specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO” as required by Exergen Corp. v. Wal-Mart Stores, Inc. and the antitrust violation was adequately plead based on the alleged inequitable conduct and baselessness of the litigation. Id.

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Chief Judge Leonard P. Stark recently considered the parties’ stipulation requesting the Court vacate its Claim Construction OpinionForest Laboratories, Inc., et al. v. Teva Pharmaceuticals USA, Inc., et al., Nos. 14-121-LPS, 14-686-LPS (D. Del. May 25, 2016).  The Court held a 4-day bench trial in February 2016 and the 30-month stay of FDA approval for Defendant’s ANDA ended on June 21, 2016.  Id. at 1.  Judge Stark found that the “public interest in the orderly operation of the federal judicial system” weighed against vacatur, particularly considering that the Court’s Opinion held terms of several of the patents-in-suit indefinite and plaintiffs are asserting the patents in other litigation.  Id. at 3-4.  Vacating the Opinion would be “at the expense of the interests of other parties in other litigation and the Court itself.”  Id. at 4.

Forest Laboratories v. Teva Pharmaceuticals, No. 14-121-LPS

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In a recent Order, Judge Gregory M. Sleet granted plaintiffs’ motion to dismiss defendants’ counterclaim for invalidity and to strike defendants’ fourth and fifth affirmative defenses with prejudice. Teva Pharmaceuticals USA, Inc. v. Forest Laboratories, Inc., C.A. No. 13-2002-GMS (D. Del. June 16, 2016). Plaintiffs argued that “the court should dismiss the counterclaims and new affirmative defenses for invalidity because defendants . . . failed to obtain leave from the court before significantly amending its answer.” Id. at 2 n.1. Plaintiffs asserted that “allowing these counterclaims and affirmative defenses nearly two years into the litigation and after fact discovery has closed would cause prejudice and substantially delay the adjudication of this case.” Defendants, on the other hand, argued that “because the Plaintiffs chose to expand the scope of litigation by adding Forest Pharma to the case more than six months after the deadline to join parties and amend the pleadings, Plaintiffs cannot complain when Forest Pharma asserts defenses in response to the new allegations against it.” Id.

Judge Sleet found that the parties’ dispute needed to be “analyzed through the lens of Federal Rule of Civil Procedure 15(a)(3).” Id. As Judge Sleet explained, the parties’ “contest[ed] whether an answer in response to an amended pleading requires leave from the court if it addresses issues outside of the scope of the amended complaint.” Id. Judge Sleet rejected defendants’ argument that “when the Plaintiffs added a new party, the Defendants were permitted to amend the complaint as a matter of course under Rule 15(a).” Id. at 3 n.1. Judge Sleet rather found that defendants failed to explain “why adding Forest Pharma—a wholly owned subsidiary of Forest Labs—expanded the scope of its defenses or claims.” Id.  As Judge Sleet noted, “the two defendants brought the new claims jointly, and none of the new claims uniquely apply to the new defendant.” In sum, Judge Sleet was “not persuaded that adding Forest Pharma as a new defendant expanded the scope of this case.” Id.

Judge Sleet finally summarized the court’s analysis as follows:

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In Toshiba Samsung Storage Technology Korea Corporation v. LG Electronics, Inc., et al., C.A. No. 15-691-LPS (D. Del. June 17, 2016), Magistrate Judge Christopher J. Burke denied Defendants’ renewed motion to stay the case. The renewed motion sought to stay only the remaining portion of the case that had not already been stayed by prior order of the Court, which related to one asserted patent. The PTAB had instituted inter partes review as to some of the asserted claims of this patent. Id. at 2.

As to simplification of issues, while the Court acknowledged that there was overlap of issues in this litigation and in the IPR proceeding, it found that this factor did not favor a stay. There were more asserted claims that were not before the PTAB than were, and the IPR stood “to address a fairly circumscribed number of legal issues,” i.e. obviousness in light of only certain admitted prior art, as to the claims involved. Furthermore, “because [the unstayed patent] does appear to be fundamentally different than [the already stayed] patents in some ways, a non-trivial amount of discovery will likely be unique to that patent.” Id. at 6. On the other hand, the early stage of the case favored a stay. See id. at 6-7.

The Court concluded that “[t]he ‘undue prejudice’ considerations are mixed,” id. at 11, where the timing of the motion did not indicate “unduly prejudicial or unfair tactics are afoot,” id. at 8-9 (emphases in original), the long delay in Plaintiff’s ability to adjudicate its claims while the IPR proceedings completed, id. at 9-10, and where the parties were competitors “in a very crowded field” such that money damages could adequately compensate for infringement, id. at 10. The Court concluded that the most important subfactor was the harm the Plaintiff would face from a delay.  Id. at 11. “Taking this into account, but noting that the other subfactors weigh in favor of a stay, overall the ‘undue prejudice’ factor [was] neutral.” Id.

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Judge Richard G. Andrews recently granted plaintiff’s motion to dismiss defendant’s counterclaim seeking “Declaratory Judgment of lnvalidity and/or Unenforceability for Failure to Comply With the Rules Governing U.S. Stage National Entry of a PCT Application.”  Nox Medical EHF v. Natus Neurology Inc., No. 15-709-RGA (D. Del. Jun. 20, 2016).  In short, after filing the patent application at issue, the PTO notifed the applicant that the inventor oath or declaration was missing.  Id. at 1.  The applicant subsequently supplied the requested oath and declaration.  Id. at 1-2.  Years later, plaintiff filed a statement to correct inventorship, adding an additional inventor, and the PTO issued a Certificate of Correction.  Id. at 2.  Judge Andrews found that defendant’s counterclaim failed as a matter of law because the defects to the patent at issue were fixed by the Certificate of Correction issued pursuant to § 256, which provides that omitting inventors shall not invalidate a patent if the error can be corrected.  Id.  at 2-4.

Nox v. Natus, No. 15-709-RGA

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Judge Richard G. Andrews recently reviewed the documentation provided by Jaguar in support of its request for fees.  Vehicle Interface Technologies, LLC v. Jaguar Land Rover North America, LLC, Nos. 12-1285-RGA, 14-339-RGA (D. Del. June 15, 2016).  Judge Andrews previously granted Jaguar’s motion for fees pursuant to 35 U.S.C. § 285.  Jaguar sought $2,883,048 in fees and costs, calculated from June 2013 which was when Jaguar served its invalidity contentions.  Judge Andrews found that fees should have been calculated beginning in October 2013, which was when VIT had to respond to interrogatories “by identifying claim limitations that it maintained were not present in the asserted prior art references.”  Id. at 3-4.  By that date, “VIT certainly had a reasonable opportunity to consider Defendants’ initial invalidity contentions and was on notice that [certain] prior art rendered VIT’s case objectively baseless.”  Id. at 4.  Judge Andrews also found that it was appropriate for Jaguar to seek fees for VIT’s appeal.  Id. at 4-5.  Regarding the “quantum” of reasonable fees, Judge Andrews found that the appropriate rates for Jaguar’s counsel should have been the “prevailing market rates of Delaware intellectual property attorneys.”  Id. at 5-6.  Judge Andrews also found the number of attorney hours requested were reasonable, but that Jaguar was not entitled to receive fees paid to its expert witnesses.  Id. at 6-9.

Vehicle Interface v. Jaguar, No. 12-1285-RGA

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Judge Richard G. Andrews recently reconsidered a ruling made at trial that the designated deposition testimony of a settled-out defendant’s expert was inadmissible hearsay.  Sanofi v. Glenmark Generics Inc. USA, C.A. No. 14-264-RGA (D. Del. June 17, 2016).  The Court explained that there was nothing unusual about the settlement that would suggest that it was aimed at procuring the expert’s absence from trial, and that the testimony therefore should have been admitted at least under the Rule 32 analysis.  The Court expressed doubt, though, about the admissibility of the testimony under Rule 403, in part because anything helpful in the testimony would likely be “cumulative to whatever [the plaintiff’s own] experts testified to at trial.”  However, because the Court’s ruling not to admit the testimony at trial resulted in an undeveloped record for purposes of the Rule 403 analysis, Judge Andrews decided that “the better course at this point is to tentatively admit the testimony. . . .  The post-trial briefing will reveal whether it has any significant probative value.  If it does not, I will strike it from the record.  If it does, I will consider it.”

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