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In a recent Memorandum Opinion, Judge Richard G. Andrews denied defendants’ (“ZTE”) renewed motion for judgment as a matter of law of non-infringement as to U.S. Patent Nos. 7,190,966 (“the ’966 patent”) and 7,286,847 (“the ’847 patent”). InterDigital Communications, Inc. v ZTE Corp., C.A. No. 13-009-RGA (D. Del. Mar. 18, 2016). Judge Andrews found that the testimony of plaintiffs’ (“InterDigital”) infringement expert provided substantial evidence to support the jury’s findings. Id. at 6-9. Notably, as to one contested limitation, Judge Andrews explained that while ZTE “does not have the burden of proving non-infringement, . . . it seems . . . that ZTE should have challenged [InterDigital’s expert’s] testimony if ZTE believed it lacked support.”

Judge Andrews also denied ZTE’s motion for a new trial as to the ’847 and ’966 patents, rejecting ZTE’s argument that the validity and infringement verdicts were inconsistent. Id. at 9-10. Judge Andrews also found that while InterDigital “probably exceeded the scope” of Judge Andrews’ ruling on the permissible use of certain licensing evidence, those licensing references “were [not] sufficiently prejudicial to warrant a new trial.” Id. at 10. Similarly, Judge Andrews found that InterDigital’s use of “an impeachment ‘scoreboard’ in closing argument” did not warrant a new trial. Id. at 11. As Judge Andrews explained, “[t]he jury was instructed that it was the sole judge of credibility and that arguments made by attorneys were not evidence,” and that the “jury was entitled to determine for itself whether the alleged impeachments showed inconsistent testimony.” Id.

Judge Andrews also noted that the PTAB has invalidated all claims of U.S. Patent No. 8,380,244 (“the ’244 patent”), another patent-in-suit. InterDigital has appealed that determination to the Federal Circuit where it is now pending. Id. at 2. Judge Andrews thus concluded that “[i]n view of the doubt as to [the] validity of this patent, . . . it makes sense to postpone resolution of the JMOL until the Federal Circuit rules.” Id. at 9.

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In a recent Report and Recommendation, Magistrate Judge Sherry R. Fallon recommended that the Court dismiss plaintiff’s (“Evolved Wireless”) willful infringement claims and claims for pre-complaint inducement and contributory infringement pursuant to FRCP 12(b)(6). Evolved Wireless, LLC v. Samsung Electronics Co., Ltd., C.A. No. 15-545-SLR-SRF (D. Del. Mar. 15, 2016). Judge Fallon first addressed defendants’ (“Samsung”) pre-suit knowledge of the five patents-in-suit. Judge Fallon found, among other things, that Evolved Wireless’s allegations in the complaint regarding a May 4, 2015 FRAND licensing letter were insufficient to establish that Samsung had pre-suit knowledge of the patents-in-suit. Judge Fallon explained that the letter included “a list of eighty-five U.S. and foreign patents and applications, [and stated] that ‘the use of one or more patent claims in the portfolio is required to practice or otherwise comply with LTE standards or technical specifications.’” Id. at 6. The letter failed to “identify the patents-in-suit in this action from the list of eighty-five patents and patent applications.” Id. Judge Fallon also noted that “[t]he complaint in the instant case contains no allegations that the patents-in-suit are well-known in the industry.” Id. at 7. Judge Fallon thus concluded that Evolved Wireless failed to plead that Samsung had pre-suit knowledge of the patents-in-suit. Id. at 8.

Judge Fallon next found that Evolved Wireless failed to sufficiently plead the “objective recklessness” prong of the willful infringement standard. Judge Fallon explained that “Samsung’s refusal to enter into a licensing agreement with Evolved Wireless in response to a letter that did not accuse Samsung of infringement, did not identify any allegedly infringing products made by Samsung, and did not specifically identify the patents-in-suit from the appendix of eighty-five patents and patent applications does not demonstrate that Samsung was objectively reckless in continuing to manufacture, market, and sell the LTE devices.” Id. at 10. Judge Fallon thus recommended that the Court dismiss Evolved Wireless’s willful infringement allegations.

Next, Judge Fallon also recommended that the Court dismiss Evolved Wireless’s pre-complaint induced and contributory infringement claims. As noted, Judge Fallon had found that “Evolved Wireless . . . failed to sufficiently plead that Samsung had knowledge of the patents-in-suit and the infringement allegations prior to the filing of this action.” Id. at 12. As to the intent element, Judge Fallon added that “[b]ecause the complaint fails to sufficiently allege that Samsung understood the infringing nature of the asserted conduct prior to commencement of the suit, Evolved Wireless has not adequately pleaded that Samsung specifically intended that its customers would infringe the patents-in-suit.” Id. at 13.

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Defendant Merck filed a motion to dismiss BMS’s claims under U.S. Patent No. 9,069,999 due to lack of patentable subject matter under Section 101, arguing that the patent claims “the natural operation of the body’s immune system via the PD-1 pathway” and does not contain an inventive concept sufficient to render that natural phenomenon patent-eligible. Merck contended that the patent-in-suit was similar to the patent found to be ineligible in Mayo because it contained only a natural phenomenon and an administering step. Bristol-Myers Squibb Co., et al. v. Merck & Co., Inc., et al., C.A. No. 15-560-GMS, Or. at 2 n.1 (D. Del. Mar. 17, 2016). BMS responded that the challenged claim was a method of treatment claim and that “every method of therapeutic treatment at its basic level relies on the biological activity of the patient’s immune system.” Id.

Judge Sleet first rejected BMS’s contention that the patent-in-suit did not touch upon a natural phenomenon: “The inventors relied on the fact that inhibiting ‘signals of PD-1, PD-L 1 or PD-L2 inhibit cancer proliferation through the mechanism of the recovery and activation of immune function.’ This interaction is a natural phenomenon.” Id. at 3 n.1 But Judge Sleet went on to find that there were factual disputes regarding whether the claims “add enough” to the natural phenomenon that could not be resolved on a motion to dismiss: “Whether the claims amount to an implementation step is a complicated factual determination that the court could better resolve after discovery. Additionally, the’999 patent is entitled to a presumption of validity under 35 U.S.C. § 282. Rarely can a patent infringement suit be dismissed at the pleading stage for lack of patentable subject matter.” Id. Accordingly, Judge Sleet denied the motion to dismiss.

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In EMC Corporation, et al. v. Pure Storage, Inc., C.A. No. 13-1985-RGA (D. Del. Mar. 15, 2016), Judge Richard G. Andrews granted Defendant’s motion for judgment as a matter of law that the accused products did not infringe one claim of the asserted patent under the doctrine of equivalents. Plaintiffs pointed to their expert’s testimony as a sufficient basis for the infringement claim, but the Court found this testimony “conclusory” and “fail[ing] to provide the particularized testimony and linking argument required by the Federal Circuit.” Id. at 1 (quotations omitted). Further, Plaintiffs had not “present[ed] any evidence from which the jury could find equivalence on the basis of insubstantial differences or known interchangeability.” Id. at 1-2.

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Chief Judge Leonard P. Stark recently considered Symantec Corp.’s Motion for Judgment as a Matter of Law on noninfringement, invalidity and damages following a 10-day jury trial in January 2015 resulting in a plaintiff verdict.  Intellectual Ventures I LLC v. Symantec Corp., C.A. No. 10-1067-LPS (D. Del. March 10, 2016). Judge Stark denied the motion in all respects.  Of note, with regard to damages, Judge Stark found that substantial evidence supported the application of the Entire Market Value Rule and the jury’s damages award of $8 million.  Id. at 7.  In particular, Judge Stark noted that plaintiff “presented substantial evidence that virus detection and prevention in the cloud – the infringing component of the accused products – drives the basis for consumer demand for Symantec’s accused products.”  Id. at 7-8. For example, plaintiff’s damages expert testified that the patented component drove demand for the entire multi-component product; plaintiff’s infringement expert testified about the importance of the infringing component, testimony corroborated by Symantec’s documents; and both experts testified that Symantec would not have been able to sell the accused products without the patented technology.  Id. at 8.   Judge Stark noted that the law does not require that the infringing component solely drive demand.  Id.

 

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Registration is now open for the 2016 District of Delaware Bench & Bar Conference May 19-20, 2016 at the Chase Center on the Wilmington, Delaware Riverfront.  To register, click here. 

The program will include nationally recognized practitioners and federal judges speaking on cutting edge issues in Bankruptcy, Criminal, and Intellectual Property law.  Confirmed speakers include judges from the United States Court of Appeals for the Third and Federal Circuits; United States Courts for the Districts of Delaware, New Jersey, Eastern and Western Pennsylvania, Eastern and Northern Texas, and California; United States Bankruptcy Court for the Districts of Delaware and Southern New York; as well as nationally respected practitioners from the public and private sectors.  The program will conclude with a panel of former Solicitors General discussing high stakes litigation in federal court.  An updated agenda will available at defba.org in the coming weeks.

We hope to see you in May!

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In Raindance Technologies, Inc. v. 10X Genomics, Inc., C.A. No. 15-152-RGA (D. Del. Mar. 4, 2016), Judge Richard G. Andrews dismissed Plaintiffs’ amended complaint for patent infringement under the heightened pleading standard of Iqbal/Twombly–as opposed to the standard under Rule 84–despite the fact that the amended complaint was filed before December 1, 2015. Judge Andrews granted Plaintiffs leave to replead, explaining that while “Plaintiffs have not plausibly alleged any infringement, . . . Plaintiffs might very well be able to do so, particularly if they have analyzed [Defendant’s] products and not just its website.” Id. at 5. Explaining his application of Iqbal/Twombly, Judge Andrews noted the following:

Effective December 1, 2015, Federal Rule of Civil Procedure 84 and the Appendix of Forms were “abrogated.” Under existing standards, that is, Iqbal and Twombly, it is clear to me that Plaintiffs have not plausibly alleged indirect infringement on Counts I and III (and, I expect, on Counts IV through VII, although in the interest of conserving resources, I am not going to decide that now). Further, I believe that I have discretion whether or not to apply the post-December 1, 2015 direct infringement pleading standard to the amended complaint, and I believe that it would be in the interest of justice to do so. I also note, to foreclose future unnecessary argument, that for indirect infringement, Defendant’s knowledge of the patents is established at least as of the filing of the lawsuit.

Id. at 4-5. More specifically, in dismissing Count I, Judge Andrews noted that “[t]here is nothing in the complaint (at least so far as I can see) that hints at the role of pressure in Defendant’s products,” as required by the claim language. Id. at 3. (emphasis added). As to Count III, Judge Andrews explained that “[i]t is not obvious to me that what Plaintiffs describe is an ‘autocatalytic reaction,’” as stated in the claim language. Id. at 4 (emphasis added). Judge Andrews explained that “[t]he requirements of the next to last element might be met, but involves quite a bit of supposition.” Id.

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These related patent infringement cases have resulted in several opinions by Judge Andrews, including a summary judgment opinion and a Daubert opinion in a related case against Telit. In this opinion, Judge Andrews considered a few issues not already addressed by his Telit opinion.

Considering a challenge to Defendant’s damages expert, Judge Andrews found that the expert had not shown a “basis in fact to associate the royalty rates used in [certain] prior licenses to the particular hypothetical negotiation at issue in [this] case” as required by Uniloc. The expert’s purported basis for comparability of the licenses was his discussions with the Defendant’s technical expert, yet Judge Andrews found that both experts “make almost zero reference to the specific technology involved in either the [asserted] patent or the [purportedly comparable] licenses, aside from the hazy reasoning that they all relate to product features rather than core technology.” Such “loose, vague allegations of technological comparability, without any explanation, are insufficient, and . . . invite the Court to blindly accept the unsubstantiated conclusions of [] experts . . . [which] are nothing more than ipse dixit.” M2M Solutions LLC v. Enfora, Inc., et al., C.A. No. 12-32-RGA, Memo. Op. at 14-19 (D. Del. Mar. 9, 2016).

Judge Andrews provided a further reason for excluding the expert’s testimony: the “analysis virtually ignores the fact that these two licenses resulted from litigation settlements, providing a drastically different backdrop than the hypothetical negotiation involving two willing licensors, as would be the case here.” Characterizing Federal Circuit precedent on the point as “hostile toward using litigation settlement agreements in proving a reasonable royalty, except in limited circumstances,” Judge Andrews pointed out that the “settlement licenses here were not for the patent-in-suit and are only connected to the claimed invention by vague conclusions from Defendants’ experts.” Because the expert “ignore[d] the settlement context altogether and focuse[d] on the fact that the licenses were between Enfora and a non-practicing entity, [u]nder [the expert’s] rationale, any license between Enfora and a non-practicing entity would be economically comparable to a hypothetical negotiation between Enfora and a different non-practicing entity, regardless of the specific technology or whether the licenses resulted from litigation settlements. These unsubstantiated conclusions about economic comparability, lacking in analysis, again provide nothing more than ipse dixit.” Id. at 19-20. Moreover, Judge Andrews rejected the argument that the incomparable licenses could be used only as a “sanity check” rather than as the heart of a damages analysis. Id. at 20. Accordingly, the Court excluded any use of the incomparable licenses.

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Chief Judge Leonard P. Stark’s recent claim construction opinion in E.g., Kraft Foods Brands LLC v. TC Heartland, LLC d/b/a/ Heartland Food Products Group, et al., C.A. No. 14-028-LPS (D. Del. Mar. 7, 2016) includes consideration of the an indefiniteness dispute which the Court ultimately concluded could not be resolved on the present record. The dispute centered on the meaning of “otherwise identical” in the term “to provide the concentrate with at least about 5 times more acid than an otherwise identical non-buffered concentrate having the same pH.” Defendant argued the term was indefinite, while Plaintiff argued the term should be given its plain and ordinary meaning. See id. at 9-11. The Court concluded that Defendant had not met “the heavy burden it has taken on in seeking to invalidate the claims” as indefinite, but it was also not clear which alternative constructions presented by the parties were correct. Id. at 13. Accordingly, the Court required additional input from the parties to resolve the issue, and indicated that it may be helpful to hear “hear directly from experts as to how a POSA would” understand the terms at issue. Id. at 13. The Court indicated it would direct the parties to propose what additional proceedings that would allow for resolution. Id. at 14.

In the same opinion, the Court also concluded that a preamble was limiting, as the prosecution history demonstrated that the patentee “had relied on the features recited in the preamble to overcome an obviousness rejection.” Id. at 22.

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In a series of related actions brought by the Plaintiffs, Judge Richard G. Andrews considered Defendants’ motion to compel compliance with subpoenas issued to a third party and former owner of the patents, and Plaintiffs’ motion to amend the complaint to add willfulness allegations. E.g., Delaware Display Group LLC, et al. v. Lenovo Group Ltd., et al., C.A. No. 13-2108-RGA (D. Del. Feb. 23, 2016).

As to the motion to compel, Defendants sought “discovery of teardown reports [i.e., “technical analysis on products supplied by” one party to another” created by [the former owner of the patents] after a March 25, 2013 consulting agreement, unredacted royalty reports . . . and email communications [between Plaintiffs and other third parties regarding the teardown work ].’”  Id. at 3-4. Plaintiffs and the non-party opposed the motion, but the Court had previously concluded that all the documents were in the possession of Plaintiffs, and thus the only issue was whether Plaintiffs were obligated to produce the documents. Id. at 4.

The Court granted the motion to compel in part, after running through a number of questions as to the potentially privileged or protected nature of the documents. As to the “teardown reports,” prepared by the former owner pursuant to an agreement with another non-party, they were neither attorney work product nor protected as non-testifying expert discovery, as the reports were prepared by and for non-parties. See id. at 6-9. They were also not protected by a common interest privilege, as the Court found no common interest between the parties to the agreement, noting that “Plaintiffs argue that [those parties] share the same interest in obtaining strong and enforceable patents,” but “Plaintiffs’ logic would find that any seller with rights to royalty payments is engaged in a common legal cause with its buyer. Id. at 11-12 (citations and quotations omitted). Accordingly, the Court granted the motion to compel as to the teardown reports. Similarly, the email communications regarding the teardown work were also not privileged. Id. at 15-16. However, the Court did not order production of the teardown emails, as Defendants had failed to comply with a prior discovery order. Therefore the motion to compel was denied to the extent it sought to compel production of the teardown emails “without complying with the procedures outlined” in that discovery order. Id. at 16.

As to the unredacted royalty reports, the Court rejected Plaintiffs’ argument that these documents contained information about their non-testifying experts. Further, Plaintiffs tried to argue the documents’ disclosure of “attorney’s fees paid in conjunction with licensing and litigating the patents-in-suit against other companies,” while not privileged, was irrelevant and highly sensitive. Id. at 13-14. While the Court was “skeptical” as to the relevance of these documents and recognized their sensitivity, it ordered production, noting that the case’s protective order only allowed withholding of production based on a privilege or immunity and that “in the absence of such an assertion of protection . . . a party may not redact information it unilaterally deems sensitive, embarrassing, or irrelevant. If Plaintiffs feel the Protective Order was inadequate, they could have moved to modify it.” Id. at 14-15.

Finally, as to Plaintiffs’ motion for leave to amend, the Court denied it as unduly delayed, where it was filed on the last day of fact discovery and two years after filing the Complaint. The Court rejected Plaintiffs’ argument that the motion was timely because the parties had previously agreed to a deadline for filing motions to amend to plead willfulness, explaining that while timeliness under a scheduling order is “certainly relevant,” it is not dispositive, citing Third Circuit law on the definition of undue delay as placing an unwarranted burden on the court or when plaintiff has had previous opportunities to amend. Here, “Plaintiffs have already amended the complaint once in [several of the related] actions. Plaintiffs provide no explanation for why they did not seek leave earlier or why the allegations of willfulness were not included in earlier amendments. Plaintiffs’ only ‘reason[] for not amending sooner’ appears to be that the scheduling order’s deadline had not yet elapsed. Given that this motion was filed on the last possible day, which was also the date that fact discovery was scheduled to close, and the delay in filing appears to have been an intentional effort to wait until the last moment, that does not suffice,” and the motion was denied. Id. at 20.

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