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Special Master Redfearn recently considered cross motions to exclude the competing expert reports of the parties in Eon Corp. IP Holdings, LLC v. Flo TV, Inc., et al. The moving defendants, several mobile carriers and mobile technology companies, sought to exclude portions of an infringement expert report that discussed (1) doctrine of equivalents theories that had not previously been asserted in infringement contentions and (2) various third party applications that had not been previously disclosed as accused products.

The Special Master noted that the doctrine of equivalents argument would be moot if the Court did not adopt defendants’ claim construction position, but that allowing the theory “to remain in [the] report does not mean that the Court will adopt the Plaintiff’s claim construction.” Eon Corp. IP Holdings, LLC v. Flo TV, Inc., et al., C.A. No. 10-812-RGA, Rulings and Recommendations at 6 (D. Del. Oct. 3, 2013). The Special Master further found that the plaintiff was not accusing the third party applications of infringement but could potentially make an appropriate reference to the software at trial, so the admissibility of the third party application references should be left to the discretion of Judge Andrews at trial. Id.

The plaintiff moved to exclude certain combinations of prior art as untimely disclosed in an invalidity expert report, arguing that it could not take discovery on those combinations at this stage of the case. The defendants pointed out, however, that the plaintiff had not previously sought discovery on any prior art combinations. Further, the Special Master found that the invalidity expert report did not include any evidence not previously disclosed and did not include any new or abandoned references. Finally, the plaintiff’s expert was able to analyze and address the combinations at issue. Id. at 7-8.

Thus, the Special Master denied both motions to exclude. Addressing the Third Circuit’s Pennypack factors, the Special Master concluded that neither party suffered any prejudice and neither side had acted in bad faith. Therefore, because “it is important that these issues be fully presented and all valid legal theories considered,” the “extreme sanction” of exclusion was not warranted. Id. at 8-9.

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Judge Noel L. Hillman of the United States District Court for the District of New Jersey, sitting by designation, recently granted a motion to drop two parties from the litigation pursuant to Rule 21. Evonik Degussa GmbH v. Materia Inc., et al., C.A. Nos. 09-636 (NLH/JS), 10-200 (NLH/JS) (D. Del. Sept. 30, 2013). The two parties previously were owners of the asserted patent, but during the course of the litigation assigned their rights, title, and interest in the patent to Materia Inc. They subsequently moved pursuant to Rule 21 to be dropped as parties, and the plaintiff opposed the motion.

Although the case did not present misjoinder or nonjoinder in the traditional sense, the Court explained that federal courts “agree that [Rule 21] may apply even in the absence of misjoinder or nonjoinder.” Id. at 4 (quoting Joseph v. Baxter Int’l Inc., 614 F. Supp. 2d 868, 874 (N.D. Oh. 2009) (quoting 4A Matthew Bender, Moore’s Federal Practice § 21.05 (2d ed.))). The Court added that “[a]t least one federal court has held that a party’s assignment of its interest in the patent-in-suit to another party nullifies its status as an indispensable party, and the assigning party is therefore dismissable from suit pursuant to Rule 21.” Id. at 5 (citing Biovail Labs., Inc. v. TorPharm, Inc., 2002 WL 31687610, at *2 (N.D. Ill. Nov. 26, 2002)). Here, the Court found that the two moving defendants, UNOF and UNORTF, had completely assigned their rights and responsibilities in the asserted patent to another party already in the litigation—Materia Inc. “[I]t is clear that UNOF and UNORTF no longer have a stake in the underlying infringement suit between Evonik and Materia. . . . As such, UNOF and UNORTF no longer maintain a sufficient interest in this case to justify their continuing presence. Therefore, since they are no longer indispensable or necessary parties to this dispute, their dismissal from suit is appropriate under these circumstances.” Id. at 6-7.

The Court rejected the plaintiff’s argument that it would be prejudiced in two ways if the parties were dropped. First, the Court disagreed that dropping the parties would result in the plaintiff being unable to obtain certain information during discovery. The Court noted that discovery had been ongoing for more than a year, and in any event the plaintiff would still be able to discover material from the dropped parties by way of subpoenas or, more likely, through Materia, whose assignment agreement indicated that Materia would be responsible for and comply with discovery requests relating to the dropped parties. Id. at 8. Second, the Court rejected the argument that dropping the two parties would prejudice the plaintiff’s ability to recover attorneys’ fees, explaining that the argument was entirely speculative at this point since the plaintif had not yet prevailed in the litigation. Id. at 10. Moreover, the assignment agreement indicated that Materia would be responsible for any attorneys’ fees award related to the dropped parties’ conduct in the litigation. Id. at 11. Although the plaintiff appears to have argued that this assurance was illusory because Materia might enter Chapter 11 bankruptcy, the Court explained that it could not “keep UNOF and UNORTF tethered as parties solely for the purpose of affording their adversary leeway in deciding how to obtain a speculative award for attorneys’ fees . . . .” Id. at 12. “Absent some indication of fraud or bad faith, a party’s filing for bankruptcy cannot serve as a legitimate reason to avoid the legal consequences of an otherwise properly executed assignment agreement. The Court also reminded the plaintiff that Materia had not yet entered bankruptcy, and there was no evidence in the record that it definitely would do so.

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In a recent memorandum opinion, Judge Richard G. Andrews denied plaintiff’s motion for entry of judgment, in which it requested that the Court “exercise its discretion to enter final judgment consistent with the summary ruling by either: (1) Proceeding to final judgment of non-infringement and dismissing any outstanding counterclaims without prejudice; or (2) Proceeding to final judgment of non-infringement pursuant to Rule 54(b) and staying the counterclaims pending resolution of the appeal.” L-3 Communications Corporation v. Sony Corporation et al., C.A. No. 10-734-RGA (D. Del. Oct. 4, 2013).

As Judge Andrews noted, “[t]he decision of whether to dismiss a counterclaim of invalidity where the Court has found no infringement is soundly within the Court’s discretion.” Id. at 1. Judge Andrews further noted that “[a]lternatively, under Federal Rule of Civil Procedure 54(b), the Court may determine that there is no ‘just reason for delay’ and direct the entry of final judgment of non-infringement while staying the remaining invalidity counterclaims.” Id. Denying plaintiff’s motion, Judge Andrews explained that “[h]ere, trial is scheduled to start less than a month away. Most of the preparation has already occurred. To delay would be a waste of the resources that have already been expended.” Id. at 2. Judge Andrews additionally denied plaintiff’s argument that Court “no longer has jurisdiction because there is no longer a case or controversy because the patent in suit has expired.” Id. As Judge Andrews explained, “[h]ere, the infringement dispute between [plaintiff] and [defendant] is not over, as the claim construction will likely be appealed. The fact that the patent has subsequently expired has no bearing on the infringement allegations.” Id.

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In Vehicle IP, LLC v. Werner Enterprises, Inc., C.A. No. 10-503-SLR (D. Del. Oct. 1, 2013), the jury returned a verdict finding that plaintiff had not proved that defendant’s system infringed the asserted claims of the patent in suit and that defendant had not proved that the same claims were invalid due to lack of enablement. Prior to trial, Judge Robinson precluded defendant from arguing at trial an untimely raised invalidity theory, and an untimely raised non-infringement theory. Prior to trial, Judge Robinson also granted summary judgment of non-infringement as to certain claims.

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In a recent Order, Judge Sue L. Robinson “confirm[ed]” her position on early summary judgment:

“The court will not entertain motions for summary judgment before the close of discovery unless: (a) the parties stipulate to the underlying facts of a dispute [either by agreement or presumption] (turning the exercise into resolving a question of law); or (b) the issue in dispute is dispositive, meaning that the court’s decision (regardless of its outcome) becomes the law of the case.”
In re: Automated Transaction LLC Patent Litigation, MDL Civ. No. 13-2429-SLR, at 1 (D. Del. Oct. 8, 2013). As to (b), the Court explained that it had “neither the time nor the resources to engage in multiple summary judgment exercises per case.” Id.

Additionally, plaintiff had requested that damages and willfulness not be bifurcated, as is Judge Robinson’s standard practice. The Court granted this request, “given the MDL status of this litigation.” Id. at 1.

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In a recent Memorandum Order, Judge Sue L. Robinson granted defendant’s motion to strike a paragraph of plaintiff’s answer to defendant’s counterclaims. Netgear, Inc. v. Ruckus Wireless, Inc., C.A. No. 10-999-SLR (D. Del. Oct. 2, 2013). The paragraph contained “a litany of ‘admissions’ which go far beyond defendant’s description of” the technology at issue contained in its counterclaim allegations. Id. at 3-4. Furthermore, “[p]laintiff’s answer includes material that was the subject of motions for summary judgment and claim construction,” including assertions that were grounded in disputed constructions of a claim term. Id. at 4-5. The Court explained that “[p]laintiff cannot legitimately argue that the material contained in [the paragraph] is not improper and goes far beyond the scope of defendant’s allegation. Plaintiff’s ‘admissions’ contain issues of material fact over which the parties’ experts disagree. To allow plaintiff’s answer to stand as written would cause prejudice to defendant by misrepresenting the record.” Id. at 5. As a result, the Court granted the motion to strike this paragraph of plaintiff’s answer.

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Judge Hillman, sitting by designation from the District of New Jersey, has issued a Markman opinion in the patent dispute between Evonik Degussa GmbH and Materia Inc. The case involves two patents assigned to plaintiff Evonik, which are asserted against Materia, and a third patent assigned to third party plaintiff the University of New Orleans Foundation, which is asserted against Evonik. All three patents claim catalysts that facilitate olefin methathesis reactions. Evonik Degussa GmbH v. Materia Inc., et al., C.A. No. 09-636, at 1-9 (D. Del. Sept. 30, 2013). The Court construed the following terms of the patents-in-suit:
– “N-heterocyclic Carbene”
– “And”
– “Aryl”
The Court also adopted the parties’ agreed-upon construction of the term “Neutral Electron Donor.” Id. at 9-59.

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On Thursday, October 10, 2013, the Federal Circuit will hear oral arguments in the Ruby R. Vale Moot Courtroom at Widener Law School in Wilmington. The Court will hear arguments in four cases from 2:00 p.m. to 4:00 p.m. You can find more information here and here.

Following the oral arguments, the Intellectual Property Section of the Delaware Chapter of the Federal Bar Association will host a Roundtable Discussion featuring the Visiting Judges of the Court of Appeals for the Federal Circuit; and Chief Judge Gregory M. Sleet and Judge Sue L. Robinson of the U.S. District Court for the District of Delaware. A reception will immediately follow. More details below.

FBA Federal Circuit Reception

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Judge Andrews recently considered General Motor’s motion to stay pending resolution of its supplier’s declaratory judgment action filed against plaintiff, Pragmatus. Pragmatus Telecom LLC v. General Motors LLC, C.A. No. 12-1545-RGA (D. Del. Oct. 3, 2013). Judge Andrews noted that in many circumstances motions to stay customer cases can be resolved easily. In those cases:

[t]he supplier makes a product, transfers it to the customer, and the customer sells it to third parties. The resolution of the supplier case will almost certainly resolve the customer case. If the supplier wins, the patent holder is collaterally estopped against the customer. If the supplier loses, the patent holder cannot get any additional damages against the customer.

Id. at 1.

The case at hand, however, did not present such an easy question. Even though the customer agreed to be bound by the Court’s infringement decision in the supplier action, “‘with respect to infringement or non-infringement’ of the patents ‘based on [the customer’s] use of the supplier’s technology'”, such an agreement would not “have as much value as a representation that the customer will be bound by the validity/invalidity decision.” Id. at 2 (alteration in original). At least under the facts of this case, and with the absence of such an agreement to be bound, Judge Andrews determined that the equities did not support the granting of a stay. Id.

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In Netgear, Inc. v. Ruckus Wireless, Inc., C.A. No. 10-999-SLR (D. Del. Sept. 30, 2013), Judge Sue L. Robinson recently considered a number of motions and cross-motions for summary judgment, a Daubert motion, and construed several claim terms. The five patents-in-suit in this case are “directed to wireless communications systems, which use radio waves to communicate.” Id. at 2.

The Court denied plaintiff’s motions for summary judgment for infringement and validity, and granted-in-part defendant’s motion for summary judgment of invalidity (as to four of the patents-in-suit) and non-infringement (as to three of the patents-in-suit). In the course of construing disputed claim terms, the Court found a number of claim limitations, across four patents-in-suit, indefinite. The Court therefore granted summary for invalidity as to the asserted claims of these four patents. Because “the court [could not] complete a meaningful infringement analysis” and because the claims were invalid, the Court additionally granted summary judgment for non-infringement of three of these patents. See, e.g., id. at 24 n.2.

The Court also considered other invalidity arguments with regard to U.S. Patent Nos. 6,621,454 (the ‘454 Patent), 7,263,143 (the ‘143 Patent), and 5,507,035 (the ‘035 Patent). As to the ‘454 Patent, the Court denied competing motions for summary judgment as to enablement because the plaintiff had offered “some” evidence of support for the limitation in the claim at issue, and therefore genuine issues of material fact remained. Id. at 34-35. The Court also denied plaintiff’s motion for summary judgment of no invalidity due to obviousness and/or anticipation because genuine issues of material fact remained. Id. at 36. As to the ‘143 Patent, defendant argued the asserted claims did not meet the requirements of 35 U.S.C. § 101, but the Court concluded that the defendants had not identified clear and convincing evidence of invalidity under this section. Id. at 40. The Court also denied competing summary judgment motions on invalidity of the ‘143 Patent for lack of written description. Id. at 40-42. Finally, as to the ‘035 Patent, the Court concluded that it did not recite patent eligible subject matter under § 101: “[t]he ‘035 patent is an abstract idea, a strategy which consists of making random selections over multiple attempts, determining whether the attempt is successful and, if not, trying again. That the strategy is limited to the field of antenna diversity does not transform the abstract subject matter into patent eligible subject matter. . . . Moreover, the reference in the patent to a controller and means to accomplish certain functions does not supply an inventive concept that represents a nontrivial, nonconventional human contribution or materially narrows the claims relative to the abstract idea they embrace. . . . The recited means are also not indispensable to the claimed strategy.” Id. at 48-49 (internal citations and quotation marks omitted).

Defendant had moved to exclude the testimony of plaintiff’s expert regarding the source code related to the patents-in-suit, arguing that “he did not review the entirety of the source code, rather, he reviewed selections of source code provided to him by counsel” and because the expert did not test any accused infringing products. Id. at 49-50. The Court denied this motion because the expert “was not required to test the accused products. Defendant has not shown that [the expert’s] testimony is based on unreliable sources, indeed, it is based on defendant’s source code and the testimony of defendant’s witnesses. Defendant’s concerns go to the weight of the testimony and may properly be addressed on cross-examination.” Id. at 50.

Finally, the Court construed a number of disputed terms across the five patents-in-suit. As noted above, the Court concluded that several disputed terms were indefinite. Having found that other terms were not indefinite, the Court construed those terms:

“[O]ptimal conditions,” id. at 18-20;
“[M]eans, responsive to said conditions, for selecting at least one of said beams having one of said orthogonal polarizations for data transmissions from said first transmitter,” id. at 22-23;
“[M]eans to analyze the topology broadcast messages and enter in said topology table the network addresses of the wireless node transmitting the topology broadcast message and network addresses of other nodes contained in the topology broadcast messages; and,” id. at 25-26;
“[M]ultibeam antenna,” id. at 32-33;
“[S]canner,” id. at 33 (defendant argued this was means-plus-function limitation and moved for summary judgment for invalidity for indefiniteness; the Court concluded that this was was not a means-plus-function limitation and denied summary judgemnt. Id. at 33 n.10);
“[P]eriodicity,” id. at 33 & 38;
“[A] data transmission antenna pattern with a null in the direction of said interference,” id. at 33-34;
“[G]ain control circuit,” id. at 37;
“[R]eceiver gain,” id.

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