Judge Richard G. Andrews recently dismissed plaintiffs’ motion to strike portions of the supplemental expert reports of defendants’ expert because the motion did not comply with the Court’s Local Rule 7.1.1. requiring parties to make a reasonable effort to resolve non-dispositive motions. Interdigital Communications Inc. v. Nokia Corporation, C.A. No. 13-10-RGA (D. Del. Mar. 26, 2015). The Court directed the parties to meet and confer. Id. at 2.
Chief Judge Leonard P. Stark recently decided the parties’ motions to preclude expert testimony in Fairchild Semiconductor Corporation v. Power Integrations, Inc., C.A. No. 12-540-LPS (D. Del. Mar. 20, 2015). Judge Stark granted Power Integrations’ motion as to Fairchild’s claim for damages for alleged inducement because Fairchild’s expert used the wrong date for his hypothetical negotiation. Id. at 2. In particular, Fairchild’s expert failed to consider a 2012 jury verdict in prior litigation between the parties in which the jury found no inducement of the patent-in-suit. Id. However, because both parties’ experts relied on the same incorrect date, Judge Stark gave both sides the opportunity to serve supplemental expert reports to correct the hypothetical negotiation date. Id. at 3.
Judge Stark denied Fairchild’s motion to preclude Power Integrations’ technical expert finding that he did not import new limitations into two claim terms and provided adequate support for his opinion that the patent-in-suit was invalid under 35 U.S.C. § 112. Id. at 3-4. Judge Stark did, however, grant Fairchild’s motion as to Power Integrations’ damages expert. Judge Stark determined that the expert improperly apportioned value between infringing and non-infringing products because he “did not analyze Fairchild’s accused products, relying instead on an apportionment based on [Power Integrations’] products, based on his belief that those products would have a relative value in the marketplace similar to what is exhibited by the Power Integrations products.” Id. at 7 (internal quotation omitted). Judge Stark also determined that the expert used an improper rule of thumb when beginning his analysis with “an assumption that up to 80% of value may be attributable to intellectual property, based on research showing that 80% of a high tech company’s value consists of intangible value, such as intellectual property.” Id. at 8.
Judge Sue Robinson recently ruled in a claim construction order that several patent claims were indefinite under 35 U.S.C. § 112 because the specifications did “not provide guidance as to the type or format of the” structure of means-plus-function claims. Therefore, Her Honor found, the claims failed “to inform, with reasonable certainty, those skilled in the art about the scope of the invention” under the Supreme Court’s Nautilus, Inc. v. Biosig Instruments, Inc. decision. Intellectual Ventures I, LLC, et al. v. Canon Inc., et al., C.A. No. 13-473-SLR, Memo. Or. at 4-34 (D. Del. Mar. 27, 2015). Although Judge Robinson did not find all claims indefinite, her indefiniteness finding applied to a substantial portion of the claim terms in dispute. A representative claim is as follows:
An apparatus, comprising:
a main circuit module;
a connection cable; and
an optical sensor circuit module coupled to the main circuit module through the connection cable, wherein the optical sensor circuit module is configured to:
receive scan control signals from the main circuit module; and
generate timing control signals for extracting an analog image signal in response to the received scan control signals, wherein the received scan control signals do not comprise any timing control signals.
In this claim, Judge Robinson found the specification was lacking guidance regarding both “scan control signals” and “timing control signals” because there is no information “as to the type or format of the signals or what the signals ultimately control. Id. at 4-5.
Judge Sue L. Robinson recently ruled on a motion to stay with respect to defendants’ patent misuse and antitrust counterclaims. Intellectual Ventures I LLC v. Toshiba Corporation, et al., Civ. A. No. 13-453-SLR (D. Del. Mar. 20, 2015). Judge Robinson explained that, in most cases, “patent misuse defenses and antitrust counterclaims are related to, and co-extensive with, the scope of the patent litigation in whcih they are asserted.” Id. at 3. In such cases, it makes sense “to stay consideration of such defenses and counterclaims, as they are based in large measure on the efficacy of the patent litigation itself . . . .” Id. The defendants argued that their counterclaims were different than the typical case, because the patent misuse and antitrust counterclaims were not focused simply on the asserted patents, but instead on the plaintiff’s “3,700+” patent portfolio. Id. Judge Robinson agreed to a point, and ordered that the counterclaims were stayed to the extent they involve validity of the plaintiff’s patent portfolio. But to the extent the antitrust counterclaims related to “numerosity and value (i.e., presuming validity) of [the plaintiff’s] patent portfolio and [the plaintiff’s] allegedly improper leveraging of such, I agree that a stay is not warranted, as there are no overlapping issues with [the plaintiff’s] case.” Id. at 4. Judge Robinson ruled that such counterclaims could proceed, but on a bifurcated schedule.
As previously reported, Judge Richard Andrews granted a motion for attorney fees in a patent infringement case under the Court’s inherent powers due to the plaintiff’s initiation of the suit without a good-faith belief that the accused products implemented the patented technology. Following supplemental briefing on the amount of attorney fees to be awarded, Judge Andrews has issued another opinion outlining the amount of fees that are owed. Parallel Iron LLC v. NetApp, Inc., C.A. No. 12-769-RGA, Memo. Op. at 16 (D. Del. Mar. 25, 2015).
Judge Andrews first rejected the plaintiff’s contention that the “lodestar” approach typically used to calculate attorney fees subject to a fee-shifting statute is not appropriate when fees are granted under the Court’s inherent powers. Id. at 6-7. Judge Andrews then rejected the argument that fees should be limited to the work associated with the plaintiff’s unsupported infringement contention because “Plaintiff was . . . sanctioned both for filing the suit and for its litigation tactics throughout. The entire period that Plaintiff accused pNFS instrumentalities is therefore the appropriate period for which to award fees.” Id. at 7-9. Furthermore, Judge Andrews found that defense counsel had not “performed unnecessary, frontloaded work . . . [because] responsible attorneys would not stand around and wait for months once their client has been accused of infringement and then rush to perform all their work once they get more specific information. It is reasonable to begin investigating and preparing a defense once an infringement suit has been brought.” Id. Judge Andrews also rejected arguments that evidence of settlement was used in violation of F.R.E. 408 and that the defendant was not entitled to fees incurred in connection with bringing a fee motion. Id. at 10-12.
Judge Andrews then found that the request for fees for hours worked was reasonable despite the fact that the hours were worked under a fixed fee arrangement. Judge Andrews’ only disagreement with the fees calculated by the defendant’s counsel was the hourly rate used. His Honor explained that under the “forum rule,” the hourly rate used should be that of intellectual property attorneys in Delaware rather than in New York City. Id. at 12-14. Finally, Judge Andrews refused to grant an injunction to prevent the plaintiff from dissipating assets and found that discovery into the plaintiffs finances was premature because judgment had not yet been entered, so allowing discovery would render Rule 69(a)(2), governing discovery from a judgment creditor, superfluous. Id. at 14-16.
Judge Andrews recently granted a Rule 12(b)(6) motion to dismiss for lack of patentable subject matter under 35 U.S.C. § 101 and Alice Corp. Priceplay.com, Inc. v. AOL Advertising, Inc., C.A. No. 14-92-RGA, Memo. Op. at 10 (D. Del. Mar. 18, 2015). Under the first step of the Alice analysis, His Honor found that the patents-in-suit were directed to the abstract idea of “a sales transaction,” a “fundamental economic practice long prevalent in our system of commerce.” Id. at 5-6. “[The plaintiff] argues that the claimed invention cannot be directed to patent-ineligible subject matter when ‘hundreds of e-commerce models have been commercialized and developed’ in recent years. . . . [but t]here are many products and services that are commercially available that are not directed to patent-eligible subject matter. Therefore, the examples provided by [the plaintiff] have little impact on the patentability of the claimed subject matter. . . . Performing a sales transaction over the Internet, or in conjunction with an auction and a competitive activity, does not make the concept any more ‘concrete.’” Id.
The Court then found that the patents-in-suit lacked an inventive concept. The plaintiff argued that “the ‘novel combination of a buyer’s participation in both an auction and a ‘competitive’ or ‘intermediary’ activity is distinct from any of the systems for conducting e-commerce,’ and thus makes the subject matter patent-eligible.” Id. at 7. But Judge Andrews explained that “the addition of an auction and a competitive activity to a sales transaction is nothing more than the addition of ‘well-understood, routine, conventional activity.’” Further, “the Internet is not essential to perform the claimed functions. Reliance on an intermediary activity to determine price has been a practice in sale negotiations throughout history, long before the existence of the Internet or computers.” Id. at 7-8.
After the motion was briefed, Judge Andrews ordered the plaintiff to submit proposed claim constructions to determine if construction would impact the motion. During oral argument on the motion, the parties agreed that the proposed construction did not affect any argument regarding the motion. Id. at 1.
Judge Sue L. Robinson recently issued rulings in advance of trial in Intellectual Ventures I, LLC v. Motorola Mobility LLC, C. A. No. 11-908-SLR (D. Del. March 13, 2015). Judge Robinson prohibited IV from introducing evidence of other entities who have licensed the patents in suit (either individually or as party of a portfolio) or were granted covenants not to sue. In the 2014 trial Judge Robinson permitted such evidence as proof of secondary considerations because both parties discussed plaintiffs’ business model (which will not be discussed in this case). Judge Robinson also issued rulings regarding plaintiffs’ doctrine of equivalents defense, but delayed decision on other remaining issues such as the merits of defendant’s divided infringement defense. Judge Robinson’s rulings on summary judgment can be found here and here.
In Gilead Sciences, Inc. et al. v. Abbott Laboratories, Inc. et al., C.A. No. 13-2034-GMS (D. Del. Mar. 13, 2015), Plaintiffs Gilead Sciences, Inc., Gilead Pharmasset LLC, and Gilead Sciences Limited (collectively, “Gilead”) brought this patent infringement suit against defendants Abbott Laboratories, Inc. and AbbVie, Inc. (collectively, “AbbVie”) in late 2013 alleging that “AbbVie falsely and knowingly represented to the U.S. Patent and Trademark Office (‘PTO’) that it invented highly valuable methods of treating the hepatitis C virus (‘HCV’) that were invented by Gilead and its predecessor Pharmasset, Inc. and others.” In March 2014, Gilead filed a Second Amended Complaint, asserting, among other things, three state law claims (Counts 9-11), including (i) violation of Cal. Bus. & Prof § 17200 of the California Unfair Competition Law (“UCL”); (ii) slander of title; and, (iii) breach of contract under Illinois law. AbbVie in turn filed the present motion to strike under California’s Anti-SLAPP statute (relating to Gilead’s Counts 9 and 10) and Motions to Dismiss for Failure to State a Claim (Relating to Gilead’s Counts 9-11). Id. at 1-2.
Judge Sleet explained that California’s anti-SLAPP statue was passed in order “to allow [the] court to promptly expose and dismiss meritless and harassing claims seeking to chill protected expression.” First, pursuant to the statute, “the moving party is required to show that the conduct underlying the plaintiff’s cause of action is an act arising from the defendant’s constitutional rights of free speech or petition, and therefore protected.” Second, “if the defendant is successful at step one, the burden shifts to the plaintiff to show there is a probability it will prevail on its claim.” Id. at 5-6. Judge Sleet noted that there were certain exceptions to the anti-SLAPP statute, and that the exception relevant to the instant matter was that “conduct deemed ‘illegal as a matter of law’ is not protected activity under the Constitution, and therefore, is not protected at step one of the anti-SLAPP analysis.” California courts have interpreted this exception to include “exclusively criminal conduct and not a mere violation of a civil statute or common-law standard of conduct.” Id. at 6-7.
Gilead argued that the anti-SLAPP exception applied because AbbVie’s inventors violated 18 U.S.C. § 1001 “when they submitted sworn declarations falsely affirming that they had invented the … Combination.” Judge Sleet, however, found that “[a]t this stage of the proceedings, a finding that the inventors ‘knowingly and willfully’ submitted false declarations is premature.” Id. at 9-10. Given that the exception did not apply, the Court proceeded with the anti-SLAPP analysis. Judge Sleet found that AbbVie met its burden under the first step of the analysis because statements “made while petitioning government agencies (including the PTO) qualify as protected activity under the anti-SLAPP statute.” Addressing step two of the analysis, Judge Sleet explained that “the anti-SLAPP analysis requires the court to determine whether there is a probability Gilead will succeed on Counts 9 and 10,” and as such, the court turned to the motion to dismiss analyses. Id. at 11. Judge Sleet dismissed Counts 9 and 10 (violation of California’s UCL and Slander of Title/Injurious Falsehood), and accordingly granted AbbVie’s motion to strike related to those claims pursuant to the anti-SLAPP statue. Id. at 12-16. Judge Sleet, however, denied AbbVie’s motion to dismiss Gilead’s Count 11, which alleged breach of contract. Id. at 16-18.
In a recent Memorandum Order, Judge Richard G. Andrews granted defendants’ motion to stay pending the resolution of two inter partes reviews. CallWave Commc’ns, LLC v. AT&T Mobility, LLC, et al., C.A. No. 12-1701-RGA (D. Del. Mar. 18, 2015). Although the plaintiff argued that the second instituted inter partes review was procedurally improper and could be dismissed, the Court found that even in such case the first instituted inter partes review likely would simplify the issues in dispute for trial.
In Tenon & Groove, LLC, et al. v. Plusgrade S.E.C., et al., C.A. No. 12-1118-GMS-SRF, Magistrate Judge Fallon previously recommended granting defendants’ motion for summary judgment that the patents-in-suit were invalid under Section 101 as directed to patent-ineligible abstract ideas. Judge Gregory M. Sleet has overruled plaintiffs’ objections to the Report, and granted the motion. Memorandum at 10 (D. Del. Mar. 11, 2015).
In arguing that the patented invention was “an idea but not an abstract idea,” plaintiffs’ objections “attempt[ed] to seize upon the specific language used by the magistrate judge and [defendants]” to point out that their “contradictory articulations of the proper formulation of the abstract idea suggests [sic] the absence of any such ‘abstract’ idea.” Id. at 5 (emphasis in original). The Court disagreed that a “contradiction” existed, and even if there was one, observed that “the use of slightly different words to describe something abstract is [not] proof that it is not abstract.” Id. (emphasis in original). The Court also rejected plaintiffs’ reliance on DDR Holdings here, 773 F.3d 709 (Fed. Cir. 2014), explaining that in that case, “the defendant’s different characterizations of the idea had no bearing on the Federal Circuit’s ultimate ruling that the claims were patent ineligible.” Id. at 5-6.
The Court then accepted the magistrate’s conclusion that the patents also failed to claim an inventive concept. See id. at 7-9. It again rejected plaintiffs’ reliance on DDR Holdings, explaining that the patented invention here did not solve “a problem unique or inherent to computers” as was the case in DDR Holdings. Id. at 8-9. Finally, while it “may have been unnecessary,” the Court found no error in “[t]he magistrate judge’s decision to analyze the machine-or-transformation test apart from the two-step Alice inquiry . . . . Magistrate Judge Fallon’s conclusion that the patents-in-suit failed the machine-or-transformation test comports with her analysis under the two-step Alice framework.” Id. at 9.