In a recent memorandum opinion, Chief Judge Leonard P. Stark invalidated on summary judgment Walker Digital’s U.S. Patents No. 5,884,270 and 5,884,272 for lack of patentable subject matter under 35 U.S.C. § 101. Walker Digital, LLC v. Google, Inc., C.A. No. 11-318-LPS (D. Del. Sept. 3, 2014). The patents related to “controlling the release of confidential or sensitive information of at least one of the parties in establishing anonymous communications.” The Court agreed with a hypothetical proposed by Google, which showed that a human would infringe the independent claim of the ’270 patent during “routine headhunting,” and found that “[t]o allow the claim to survive would disproportionately risk preempting a building block of human interaction, retarding rather than promoting progress, contrary to the very purpose patents are granted.” With respect to the ’270 patent’s dependent claims, the Court explained that “[e]ven accepting that the use of a computer increases speed and efficiency of performing the steps of the claims, and improves the likelihood of preserving anonymity of the first and second parties, these characteristics do not save the claims. As the Supreme Court has stated, the mere recicitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.” (internal quotation marks and citation omitted). The analysis was largely the same with respect to the ’272 patent.
Judge Sue L. Robinson recently ruled on pretrial issues in advance of a damages trial between Anesta and Mylan. Anesta Ag., et al. v. Mylan Pharmaceuticals, Inc., et al., Civ. No. 08-889-SLR (D. Del. Aug. 27, 2014). First, the Court ruled that Mylan could not contest at trial that it indirectly infringed Anesta’s method claims in light of earlier stipulations of direct infringement, explaining that Mylan “made a calculated, strategic business decision to launch their generic products ‘at risk’ – to wit, voluntarily taking the risk that the Federal Circuit would reverse my decision on validity.” Judge Robinson added that Mylan’s “stipulations of infringement and the subsequent judgments . . . are meaningless other than in the context of contributory infringement.” The Court also noted that Mylan “never identified non-infringement – clearly a dispositive issue – as an issue they contested in this damages phase of the case until the eve of the pretrial conference. . . . If a party fails to timely identify an issue (other than subject matter jurisdiction), that party is precluded from contesting it at trial.”
Next, Judge Robinson left open the door for Anesta to cross-examine Mylan’s experts on their “hundreds” of previous cases and instances where their testimony was excluded. Judge Robinson noted that past criticism in other cases “may have no relevance to the analysis performed in this case,” but left open the possibility that such cross-examination might be appropriate if Mylan first “attempt[s] to bolster their experts’ credibility by reference to their service in past cases[.]” (internal quotation marks omitted).
Judge Andrews has invalidated claim 1 of Tuxis Tech’s Patent No. 6,055,513 under 35 U.S.C. 101 at the pleadings stage of Tuxis’ infringement suit against Amazon. The patent is directed to what the parties and the Court characterized as “upselling,” i.e. offering a second product to a buyer who has already made a decision to purchase a first product. Judge Andrews found it “clear that the claim 1 of the ‘513 patent is drawn to unpatentable subject matter. It claims the fundamental concept of upselling—a marketing technique as old as the field itself. While the additional limitations of the claim do narrow its scope, they are insufficient to save it from invalidity.” Tuxis Techs., LLC v. Amazon.com, Inc., C.A. No. 13-1771-RGA, Memo. Op. at 4 (D. Del. Sept. 3, 2014).
The parties agreed that upselling is an abstract idea, but disagreed as to whether the claim at issue was meaningfully limited and thus does not pre-empt use of the abstract idea. Id. at 5. On this point, Judge Andrews found that after “analyzing the additional limitations imposed by claim 1 of the ‘513 patent, the idea of upselling has not been sufficiently limited to prevent the claim from ‘cover[ing] the full abstract idea itself.’” Id. at 5-6. Judge Andrews found that none of the limitations identified by the patentee were “meaningful” and allowing the claim to survive would “permit the general concept of upselling to be patented, which pre-empts its use in all fields and ‘effectively grant[s] a monopoly over an abstract idea.’” Id. at 6-7.
Judge Andrews further explained that claim 1 lacked an “inventive concept.” His Honor illustrated this point with an example showing how “[s]hrewd sales representatives have long made their living off of this basic practice”:
A man enters a clothing store to purchase a new pair of dress slacks (“a user initiated primary transaction for the purchase of a good or service”). The sales representative assists the man in finding a pair of pants, and in the process learns that the man is a banker (“a second data element relating to the [identity of the customer]”). Knowing that suspenders are fashionable in the banking profession, the sales representative offers the banker a pair of suspenders that match his pants (”utilizing at least in part the primary transaction data including the identity of the good or service of the primary transaction and the second data element [related to the customer] and determining at least one item for a prospective upsell”). The customer agrees with the sales representative and purchases the suspenders (“receiving an acceptance of the offer … in real time”). This type of marketing strategy is at the heart of claim 1 and has been practiced as long as markets have been in operation.
Id. at 8. Accordingly, Judge Andrews found claim 1 invalid and granted Amazon’s motion to dismiss.
In EMC Corp. v. Zerto, Inc., C.A. No. 12-956-GMS (D. Del. Sept. 4, 2014), Judge Gregory M. Sleet issued an order recently construing the following claim terms of U.S. Patent Nos. 7,647,460; 6,073,222; 7,603,395; 7,971,091; and 7,577,867:
“to mirror at least some of the information written from the CPU to the first storage system in the second storage system”
“to mirror at least some of the information written from the CPU to the first storage system in both the second and third storage systems”
“means . . . for mirroring”
“when a new block written to the mass storage system is to overwrite the original data block”
“original data block”
“surfacing [a/the] copy of at least a portion of the series of transactions”
“surfacing of a copy of transactions” is construed to mean “generating a data structure from the dataset of a series of transactions.”
“surfacing of a copy of the at least a portion of the series of transactions” is construed to mean “generating a data structure from the dataset of the at least a portion of the series of transactions.”
“surfaced copy” is construed to mean “data structure generated from a dataset of transactions.”
“causes the production application to quiesce”
“quiescing the production application”
“client file index”
“data protection appliance (DPA) manager”
In a recent memorandum order, Chief Judge Leonard P. Stark granted defendants’ motion for leave to amend their answer to add a defense and counterclaim asserting that U.S. Patent No. 7,215,984 (“the ’984 Patent”) is unenforceable due to plaintiff’s inequitable conduct during the ex-parte reexamination of the ’984 Patent. Masimo Corp. v. Philips Electronic North America Corp. et al, C.A. No. 09-80-LPS-MPT (D. Del. Sept. 2, 2014). The main issue Judge Stark resolved was whether defendants’ claim was futile. Defendants alleged that several plaintiff representatives committed inequitable conduct when they “each failed on several occasions to inform the PTO that the interpretation of the asserted claims of the ‘984 patent [plaintiff] urged the PTO to adopt had been rejected by this Court, including: (i) when Magistrate Judge Thynge issued her Report & Recommendation (“R&R”) regarding summary judgment, (ii) when the PTO issued its Notice of Intent to Issue Reexamination Certificate (“NIRC”) based on that rejected construction, and (iii) when the undersigned District Judge issued his Summary Judgment Opinion and Order (“SJ Order”) adopting the magistrate’s R&R.” Id. at 3. Plaintiff submitted the R&R to the PTO and expressly identified the pages containing Judge Thynge’s construction, but did not “explain how Judge Thynge’s construction or explanation related to the claim construction positions [plaintiff] had advocated before Judge Thynge and was continue to advocate before the PTO.” Id. at 7. Subsequent to the R&R but prior to the PTO’s NIRC, the Court adopted the R&R, making the previous recommended construction an Order of the Court. Id. As Judge Stark explained, plaintiff never disclosed to the PTO the Order of the Court adopting the R&R, even after the issuance of the NIRC. Id. at 8. Judge Stark also noted that the examiner’s reasoning in the NIRC “appeared to indicate that she was relying on the rejected construction advanced by [defendant]” and that the examiner mistakenly believed she was adopting the same construction as the Court. Id. at 8-9. Judge Stark ultimately concluded the following:
Regardless of whether a patentee in all cases has an obligation to disclose a District Court’s adoption of an unobjected-to recommended claim construction, or whether a patentee has an obligation to explain the impact of a Court’s claim construction on arguments the patentee has made to the examiner, under the facts alleged here it is plausible to believe that [plaintiff] intentionally decided not to make these disclosures because [plaintiff] intended to deceive the examiner into believing she was applying the Court’s claim construction, when [plaintiff] knew she was not, and when [plaintiff] feared application of the Court’s claim construction could lead the examiner to invalidate its claims. While [defendants have] not yet proven these allegations, [they have] stated plausible claims for relief . . . .
Id. at 9. Judge Stark also found that plaintiff would not be unduly prejudiced from the amendment, as defendants sought “only limited additional discovery, including short depositions of the four [plaintiff] representatives and production of the readily available reexam history . . . , which should not affect the [scheduled trial].” Id. at 10.
In a series of related cases (e.g., Inventor Holdings, LLC v. Wal-Mart Stores, Inc., C.A. No. 13-096-GMS (D. Del. Aug. 27, 2014)), Special Master Paul M. Lukoff issued an opinion relating to a number of protective order disputes. The parties had disagreements over: “the scope of the prosecution bar, the use of laptop computers by plaintiff’s attorneys and experts in the stand-alone computer access facility and the extent to which the plaintiff can obtain hard copies of source code pages.” Id. at 2.
As to the (bilateral) prosecution bar, the plaintiff wanted its litigation counsel to be able to “consult with [prosecution counsel]” in re-examination, inter partes review and covered business method review, “explaining that coordination is necessary to avoid taking inconsistent positions.” Id. at 3. The Special Master, relying on recent case law regarding prosecution bars in this District (Versata Software, Inc. v. Callidus Software, Inc.), concluded that the risk of inadvertent disclosure merited a “limited prosecution bar exemption similar to the one noted above in Versata,” where litigation counsel would not be allowed to consult with prosecution counsel if they reviewed source code in the litigation. Id. at 4. The Special Master observed that, since plaintiff’s litigation team may soon grow from three to five attorneys, it appeared that plaintiff would be able to “implement a response to the potentially irreconcilable situation created by access to source code on one hand and possible proceedings at the PTO on the other.” Id. at 5. The Special Master further decided that 1) the duration of this bar would be two years and 2) the subject matter of the bar would be “the broad subject matter of the patent-in-suit,” as defendant requested, because “[e]specially as a non-practicing entity, the risk is that the ambitions of the plaintiff are quite broad in terms of the reach of the technology they own.” Id.
Regarding the laptop computer issue, plaintiff requested laptop computers when accessing source code to facilitate note-taking. The parties had already agreed that no mobile phones would be allowed and that the source code would only be available at a stand-alone computer. The Special Master pointed out that “the plaintiff, having already agreed to create a fairly impervious environment . . . has already conceded that any device that could undermine that environment would jeopardize the integrity” of the confidential information. Id. at 6. Under these circumstances the Special Master explained that a laptop computer, even if lacking a camera or unable to transmit information from the stand-alone computer, would not qualify as acceptable. Id. Therefore, plaintiff’s notes would have to be hand-written.
Finally, regarding printing source code, plaintiff wanted to print 1,000 pages aggregate total, while defendants requested a limit of 250 pages aggregate total. The Special Master observed that the parties had yet to make all exchanges contemplated by Paragraph 4 of the District’s Default Standard for Discovery, and in light of “this state of incomplete discovery, we are probably not at a point yet where we know enough to establish the appropriate boundaries for ‘excessive’ printing.” Id. at 8. Therefore, the Special Master deferred decision on this issue, directing the plaintiff to apply to the Special Master if necessary and to note page numbers that “had the present ‘excessive’ threshold not been extant, they would have requested to be printed, so that those pages . . . can indeed be printed in the event the Court permits such.” Id. at 8.
In Cot’n Wash, Inc. et al. v. Henkel Corp. et al., C.A. Nos. 12-650, 12-651-SLR (D. Del. Aug. 26, 2014), Judge Sue L. Robinson considered defendants’ motion for summary of invalidity and non-infringement, and defendants’ motions to exclude certain expert testimony. Regarding defendants Henkel Corporation, The Dial Corporation, and Henkel Consumer Goods, Inc.’s (collectively, “the Henkel defendants”) motion for summary judgment of non-infringement with respect to their “original products,” Judge Robinson found there were no genuine issues of material fact that those products did in fact infringe the patent-in-suit, and therefore denied the Henkel defendants’ motion for summary judgment in this regard. Id. at 10-11. Further, Judge Robinson ruled that “consistent with the court’s claim construction and analysis, the court is inclined to enter summary judgment sua sponte in favor of plaintiffs that the Henkel defendants’ original products infringed the [patent-in-suit].” Id. at 11. As to the Henkel defendants’ motion for summary judgment of non-infringement with respect to their “reformulated products,” Judge Robinson ruled that “plaintiffs must either provide the Henkel defendants with a covenant not to sue” or the Court would entry judgment in favor of the Henkel defendants. Id. at 9. As to the Henkel defendants’ motion for summary judgment of non-infringement regarding indirect infringement, the Henkel defendants argued that “because plaintiffs’ theory of induced infringement relies on Dial’s customers’ use of the accused products, any possible recovery under that claim would be entirely duplicative of the recovery for the alleged direct infringement.” Id. at 13. Judge Robinson found, however, that “the question of double recovery is proper at the damages phase” and the Henkel defendants’ motion for summary judgment was thus denied in this regard. Id. at 14. Further, Judge Robinson denied the Henkel defendants’ motion for summary judgment that argued that Henkel Consumer Goods and Henkel Corporation are not proper parties to this action. Id. at 12-13. Judge Robinson did, however, grant defendant The Sun Product Corporation’s (“Sun”) motion for summary judgment of non-infringement. Id. at 14-15.
Judge Robinson denied defendants’ motions for summary judgment of invalidity for anticipation, public use, and obviousness, finding issues of material fact to exist with respect to each. Id. at 15-33. Judge Robinson did, however, grant defendants’ motion to exclude plaintiffs’ expert opinions concerning secondary considerations of non-obviousness, specifically commercial success, industry praise, licensing, and copying. Id. at 34-39. With respect to commercial success, industry praise, and licensing, Judge Robinson generally found that the opinions failed to establish a nexus between the respective secondary consideration and the claimed invention of the asserted patent. Id. at 34-38. As to copying, Judge Robinson found that plaintiff’s expert report “cites to numerous exhibits regarding proof of copying, yet none of these exhibits were submitted to the court. Without these exhibits it is impossible to determine the validity of the copying claims.” Id. at 39.
In Genetic Technologies Limited v. Laboratory Corporation of America Holdings, et al., C.A. No. 12-1736-LPS-CJB (D. Del. Sept. 3, 2014), Magistrate Judge Christopher J. Burke recommended the grant of defendants’ motion to dismiss for failure to state a claim. The Court determined that the single asserted claim of U.S. Patent No. 7,615,342, entitled “ACTN3 Genotype Screen for Athletic Performance,” was directed to non-patent-eligible subject matter under Section 101.
“The methods claimed in the ‘342 Patent embody findings that the presence of certain genes is correlated with elite sprinting, strength, or power performance.” Id. at 3. The asserted claim included steps for “analyzing” a sample obtained, “detecting” the presence of certain alleles at a certain location, and then “predicting the potential sprinting, strength, or power performance of the human” where the presence of the two alleles would be positively associated with these attributes.
The Court first concluded that defendants’ motion to dismiss was not premature because (i) “[p]laintiff has failed to articulate why there are any disputed areas of fact relevant to resolution of the Motion,” id. at 10, and (ii) the Court concluded that claim construction was not necessary to resolve the Section 101 question, see id. at 11-13. The Court also prefaced its analysis with an examination of the holdings of decisions it found “especially instructive:” Mayo Collaborative Servs. v. Prometheus Labs. Inc., 132 S. Ct. 1289 (2012) (“Prometheus”), PerkinElmer, Inc. v. Intema Ltd., 496 F. App’x 65 (Fed. Cir. 2012), and Assoc. for Molecular Pathology v. Myriad Genetics, Inc., 698 F.3d 1303 (Fed. Cir. 2012). See id at 14-20.
Applying the Supreme Court’s two-part test for patent eligibility of patent-ineligible concepts (such as laws of nature), see id. at 9-10, the Court first identified the patent’s “link between a particular genetic variation and the potential for elite athletic performance” to be a natural law. Id. at 20-21. Next the Court assessed whether the elements of the claim transformed it into a patent-eligible application of the natural law because they contained an inventive concept. The Court concluded that this was not the case; rather, the elements of the claim that applied the law of nature – the “analyzing,” “detecting,” and “predicting” steps – utilized methods that were already well-known and/or were merely instructions on how to apply the natural law. See id. at 22-28. The Court came to the same conclusion when looking at these elements “as a whole” and found that “the steps in combination do not make the natural law and insignificant post-solution activity into patent-eligible subject matter.” Id. at 28. The Court concluded that the claims were similar to those rejected in Prometheus where the claimed steps “amount[ed] to nothing significantly more than an instruction to [testers] to apply the applicable laws.” Id. at 29 (internal citations omitted). The Court also rejected plaintiff’s argument that the claim was patentable because it may meet the machine-or-transformation test because “the Supreme Court has held that the machine-or-transformation test is non-dispositive in these types of cases – a claim can still pass the test, but fail the Section 101 law of nature inquiry.” Id. at 29 n.14 (citing Prometheus).
Finally, the Court observed that “[t]he presence here of the basic underlying concern that [claim 1 of the ‘342 Patent] tie[s] up too much future use of laws of nature simply reinforces [the Court’s] conclusion that the process described in [claim 1] [is] not patent eligible.” Id. at 30 (alternations in original) (citing Prometheus).
As a result, the Court recommended that plaintiff’s complaint be dismissed as to claim 1 and that, should the District Court adopt this recommendation, the District Court direct the plaintiff to provide “notice as to whether any other claims of the patent-in-suit will be asserted here, or whether the case should be closed.” Id. at 30.
Judge Robinson recently considered a defendant’s motion in a patent infringement case to dismiss claims of joint and willful infringement. With regard to joint infringement, the question presented was whether the plaintiff had adequately pled joint liability based on an agency relationship between two defendants who were corporate parent and subsidiary. The complaint made allegations regarding the corporate structure and operations of the defendant, Toshiba. Judge Robinson found the allegations of infringement based on agency sufficient to withstand a motion to dismiss, taking “plaintiffs’ factual allegations as true, especially where, as here, the information resides with defendants who, in turn, have provided only a general denial of infringement rather than facts about the organization and relationships between the various defendant entities.” Intellectual Ventures I LLC, et al. v. Toshiba Corp., et al., C.A. No. 13-453-SLR, Memo. Op. at 4-6 (D. Del. Sept. 3, 2014).
Judge Robinson granted, however, the motion to dismiss as to allegations of willful infringement. Her Honor explained that “all the information relating to notice is in the hands of plaintiffs and it is a matter of public knowledge that plaintiffs own hundreds of patents, [therefore] a general allegation about ‘discussions’ or ‘a presentation’ is insufficient to withstand a motion to dismiss. Moreover, notice of the infringement risk via the letter written only one day before the complaint was filed does not constitute a showing of objective recklessness on the part of the defendants.” Id. at 8.
Judge Andrews recently considered several motions in limine in advance of trial in Interdigital Communications, Inc., et al. v. Nokia Corp., et al., C.A. No. 13-10-RGA (D. Del. Aug. 28, 2014). Of note, the Court explained that evidence relating to inventors’ alleged dishonesty before the PTO would be inadmissible during the jury trial, under Rule 403, except to the extent it arose in cross-examination to challenge inventors’ credibility pursuant to Rule 608(b), or potentially as it related to an obviousness inquiry. In the latter case, the Court ordered that the defendants must disclose how they intended to use such evidence in connection with obviousness before trial. The Court also precluded the defendants from referring to the plaintiff as a “troll, non-practicing entity (NPE), patent assertion entity, or extortionist.” The Court also excluded evidence of a rejected IPR petition, explaining that “[a] PTO non-merits decision not involving Defendants has little or no probative value, and would require a lot of explanation for the jury to be able to understand. … [any] minimal probative value … would be substantially outweighed by the danger of unfair prejudice to the Defendants, and the risk of jury confusion from the complexity added by such testimony.”