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In a series of related cases brought by Joao Bock Transaction Systems, LLC, Judge Sue L. Robinson granted defendants’ motions to stay pending a final determination by the Federal Circuit in a different case brought by this plaintiff and involving the same patent-in-suit.  E.g. Joao Bock Transaction Systems, LLC v. Capital One Financial Corporation, et al., C.A. No. 14-425-SLR (D. Del. Jan. 12, 2015) (related cases 14-529, 14-530). Because the Federal Circuit will decide whether this patent is invalid under Section 101, a stay would simplify the cases’ issues and streamline the litigations.  Id. at 2.  The Court pointed out that “under the circumstances at bar, the movants are not seeking an undue litigation advantage, but simply seeking the guidance of the Federal Circuit (as is this court) before having to invest in potentially needless litigation.”  Id. at 2-3.

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Chief Judge Stark recently granted Defendant Trend Micro’s motion to transfer a patent infringement suit brought by Selene Communication Technologies to the Northern District of California. Considering the Third Circuit’s Jumara factors, His Honor found “that the factors, in total, weigh sufficiently strongly in favor of transfer.” Selene Commc’n Techs., LLC v. Trend Micro Inc., et al., C.A. No. 14-435-LPS, Memo. Or. at 1 (D. Del. Jan. 16, 2015).

Initially, Judge Stark explained that the plaintiff’s choice of forum and incorporation in Delaware were not dispositive. “[T]he deference to be given to Selene’s choice of forum is reduced because Selene’s principal place of business is in Shaker Heights, Ohio. Additionally, Selene was only created in 2011 and has only owned the patent-in-suit since July 2013.” Id. at 1-2.

On the other hand, the defendants’ choice of forum weighed in favor of transfer because one defendant is a California corporation and the other is a Delaware corporation, but both have significant operations in Cupertino, California. Thus, “Defendants have legitimate and rational reasons for their choice of forum, and therefore, it is entitled to weight, but not the same weight as Plaintiffs’ choice of forum.” Id. at 2. The location where the claim arose also weighed in favor of transfer because “research and development of the allegedly infringing products occurred primarily in the Northern District” of California and “the patent-in-suit was, until July 2013, held by . . . a California company with a principal place of business in Menlo Park, California, meaning that any harm from infringement prior to that date was suffered primarily in the Northern District.” Id. at 2-3. Additionally, the convenience of witnesses weighed in favor of transfer because, although there was no evidence that third party witnesses would refuse to testify without a subpoena, three of the four inventors reside in the Northern District. Id. at 3.

Judge Stark concluded: “The remaining Jumara factors are either neutral or slightly favor transfer. Overall, then, the Court concludes that Trend Micro has met its burden to show that the pertinent factors weigh strongly in favor of transfer.” Id. at 3-4.

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In a recent Memorandum Order, Magistrate Judge Christopher J. Burke denied plaintiff’s motion to lift the stay pending inter partes review (“IPR”) in two related actions. Princeton Digital Image Corp. v. Konami Digital Entertainment Inc., C.A. Nos. 12-1461, 13-335-LPS-CJB (D. Del. Jan. 14, 2015). Defendants had filed two petitions for IPR of the patent-in-suit, U.S. Patent No. 5,513,129 (“the ‘129 patent”), and the PTAB granted each petition in part. Id. at 2-3. As Judge Burke explained, only “three claims from the ‘129 Patent’s 23 claims are not currently under review in [the] two IPR proceedings: claims 14, 19, and 20.” Id. Each of those three claims are dependent claims, depending from two independent claims under review. Plaintiff thus requested that the Court lift the stay “at least with respect to claims 14, 19, and 20.” Id. at 3.

Judge Burke found, however, that “were Plaintiff’s request to lift the stay granted-either as to claims 14, 19 and 20, or as to all claims-that could significantly complicate the issues in these actions and lead to inefficiency.” Id. at 4. Judge Burke further explained that “the ongoing IPR proceedings could simplify issues at play in this case-even as to the few dependent claims (claims 14, 19 and 20) that the PTAB does not currently have under review.” Id. at 5. Lastly, Judge Burke noted that as of the current date, “all but three of the [the ‘129 patent’s] claims are under review,” which was less than the six claims not under review at the time the court initially granted stay. Id. at 6. Judge Burke therefore concluded that “any changed circumstances since the date of the Court’s Order on the stay motions do not favor Plaintiff’s position” regarding simplification of the issues, and “[i]f anything, . . . the rationale for a stay [with respect to simplification] is stronger now as compared to when the Court initially granted the stay.” Id.

Turning to plaintiff’s argument regarding undue prejudice, Judge Burke explained that since the Court’s original order granting stay, “the most significant changed circumstance is the fact that the PTAB has initiated its review” in response to a second IPR petition. Id. at 7. Judge Burke found that “[t]he additional delay likely associated with that proceeding will mean that relevant PTAB proceedings will remain ongoing longer than was expected at the time of the Court’s prior Order,” but also explained that “[t]he mere potential for delay . . . is insufficient to establish undue prejudice.” Id. at 7-8. Judge Burke further noted that the “other relevant subfactors” related to undue prejudice (the timing of the request for review, the timing of the request for a stay, and the relationship of the parties) favored stay. Id. at 8. On balance, Judge Burke found the “undue prejudice” factor to be neutral. Id. at 8.

Considering the factors discussed, Judge Burke concluded that “overall, the calculus still supports a stay.” Id. at 8.

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In Invista North America S.A.R.L., et al. v. M&G USA Corporation, et al., C.A. No. 11-1007-SLR, defendants filed motions to stay the bifurcated damages and willfulness stages of the case, and for relief from judgment under Rule 60(b), following entry of final judgment of infringement for plaintiffs.

In addition to appealing that judgment, defendants had also filed requests for reexamination with the PTO, and the PTO subsequently issued an office action rejecting all claims of the patent-in-suit as invalid.  As a result, even though the Federal Circuit affirmed the district court’s final judgment, defendants moved to stay the damages and willfulness portions of the case, and for relief from judgment under Rule 60(b) in light of the reexamination process.

Judge Robinson denied both motions.  (D. Del. Jan. 14, 2015).  A stay would “impose a clear tactical disadvantage to [plaintiffs], the party with a final judgment in hand obtained at great cost, given the fact that [defendants had] defended itself vigorously.”  Id. at 3.  Instead, once damages had been determined, the Court would “consider whether it is appropriate to maintain the status quo at that point in time, depending on the status of the reexamination proceeding.”  Id. at 4.

As to the 60(b) motion, the Court concluded that the PTO’s non-final office action was “simply a preliminary determination of its legal conclusions, [and] it does not constitute the kind of ‘new evidence’ that courts generally view as sufficient to change the outcome of the trial.”  Id. at 5.  The Court also rejected defendants’ other arguments that plaintiffs “made post-verdict ‘contradictory representations’ to the European Patent Office” warranting relief, and that the recent Federal Circuit decisions regarding indefiniteness should be considered pursuant to Rule 60, “despite the fact that [defendants] never presented the defense of indefiniteness at trial or on appeal.”  Id.  Finally, the Court disagreed that an injunction was no longer equitable I light of the PTO’s rejections; it “decline[d] to nullify a remedy approved by the Federal Circuit on the basis of reexamination proceedings still in their infancy.”  Id. at 6.

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In a recent Order, Judge Gregory M. Sleet ruled that a plaintiff/assignee lacked standing to assert privilege over communications between its assignor and the assignor’s counsel, explaining that the assignment of a patent, on its own, does not result in the assignee “inheriting” the assignor’s attorney-client privilege with respect to the prosecution of the patent.  Green Mountain Glass, LLC v. Saint-Gobain Containers, Inc., C.A. No. 14-392-GMS (D. Del. Jan. 14, 2015).  Rather, Judge Sleet explained, the privilege analysis depends on a close review of the facts to determine whether the assignment resulted in a “transfer of control of the business and the continuation of the business under new management,” as opposed to simply the transfer of an asset.  Id. at 2 n.1 (quoting SimpleAir, Inc. v. Microsoft Corp., 2013 WL 4574594, at *2 (E.D. Tex. Aug. 27, 2013)).  In this case, the Court found that the assignor and assignee entities “were certainly not strangers to one another,” but saw “no relationship that would support a transfer of privilege.”  The Court acknowledged that “a planned stock-for-stock merger” could support a showing that “a continuous relationship existed between” the assignor and the assignee, but noted that in this case “the anticipated merger did not occur.”  Id. at 2 n.1.  As a result, the Court viewed the assignment as a mere transfer of assets, with no transfer of privilege.

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Chief Judge Stark recently denied a plaintiff’s Rule 60 motion to set aside a jury verdict.  Power Integrations, Inc. v. Fairchild Semiconductor Int’l Inc., et al., C.A. No. 08-309-LPS (D. Del. Jan. 13, 2015).  Judge Stark found the motion was untimely, coming more than 30 months after the verdict and 19 months after the Court’s rulings on post-trial motions.  Further, the Court found that the plaintiff had not identified any new evidence that existed at trial but were not discoverable at that time.  Rather, the Court explained the motion was based on evidence which came into existence after trial through events occurring in a related case and reexamination.

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Chief Judge Leonard P. Stark recently considered a motion dismiss plaintiff’s ANDA infringement action for lack of personal jurisdiction, applying the recent Supreme Court decision Daimler AG v. Bauman, 134 S. Ct. 746 (2014).  Acorda Therapeutics, Inc. v. Mylan Pharms. Inc., C.A. No. 14-935-LPS (D. Del. Jan. 14, 2015).  Judge Stark agreed that Daimler “altered the analysis with respect to general jurisdiction[,]” but unlike the recent decision by Judge Sleet, found that “Mylan Pharma consented to this Court’s exercise of personal jurisdiction when it registered to do business and appointed an agent for service of process in the State of Delaware.”  Id. at 1.  Regarding Mylan Pharma’s co-defendant and corporate parent, Mylan Inc., while it is not registered to do business in Delaware, Plaintiffs allege “a non-frivolous claim that Mylan Inc. used Mylan Pharma as its agent in connection with the ANDA filing giving rise to this litigation.”  Id. at 2.  Therefore, as to Mylan Inc., jurisdictional discovery was warranted.

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Judge Andrews recently denied Plaintiffs’ motion to modify a protective order in order to permit Plaintiffs to use expert reports from the District Court litigation (that had already proceeded to trial) in inter partes review proceedings pending before the Patent Trial and Appeal Board.  Novartis Pharms. Corp. v. Noven Pharms., Inc., C.A. No. 13-527-RGA (D. Del. Jan. 9, 2015).  Plaintiffs argued that good cause existed to modify the protective order so that Plaintiffs could demonstrate inconsistencies in the expert’s opinions.  Judge Andrews disagreed finding that Plaintiffs:

had motivation to demonstrate inconsistencies in the opinions of [the expert] in the trial held before me, and, based on the citations in Plaintiffs letter, did so, or, at least, tried to do so. I do not understand, given the representation that the trial transcript can be used in the IPR, and that [the expert] will soon be deposed and can presumably be further questioned about whether anything he said at trial is inconsistent with his current invalidity analysis (which, I gather, has not changed), why his infringement report is necessary for justice to be had.

Furthermore, Judge Andrews found defendant’s confidentiality concerns to be legitimate and not worth the risk considering Plaintiffs’ “minimal” need for using the expert reports in the IPR.

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In a recent Order, Judge Gregory M. Sleet granted a plaintiff’s motion to dismiss counterclaims seeking a declaratory judgment of non-infringement of two patents related to the brand-name drug Aloxi® which the plaintiff did not assert against the defendant and which were the subject of a covenant not to sue.  Helsinn Healthcare S.A., et al. v. Cipla Ltd., et al., Consol. C.A. No. 13-688-GMS (D. Del. Jan. 6, 2015).  The plaintiff’s motion to dismiss was based on the argument that there did not yet exist a case or controversy warranting adjudication since the defendant’s Paragraph III certification relating to the asserted patent would prevent it from entering the market until at least October 2015 when the asserted patent expires.  The Court agreed with the plaintiff, and reasoned that “[i]n the ANDA-litigation context, there is cognizable injury to a generic drug manufacturer when it is ‘restrain[ed from] the free exploitation of non-infringing goods.’”  Id. at 3 n.1 (quoting Caraco Pharm. Labs., Ltd. v. Forest Labs., Inc., 527 F.3d 1278, 1292 (Fed. Cir. 2008) (alteration in original)).  And “[w]here a generic company accepts the ‘validity, infringement, and enforceability’ of a drug patent, there is no injury giving rise to a case or controversy.”  Id. (quoting Janssen Pharm., N.V. v. Apotex, Inc., 540 F.3d 1353, 1361 (Fed. Cir. 2008)).  Because filing a Paragraph III certification “serves as recognition of the fact, that the patent is valid and enforceable[,]” id. (quoting Janssen, 540 F.3d at 1358), the Court found that the defendant could not claim it was currently being restrained from exploiting non-infringing goods by the two unasserted patents, as opposed to by its filing of the Paragraph III certification and recognition of the asserted patent’s validity and infringement.  Id.  The Court left open the possibility that a case or controversy with respect to these unasserted patents could arise upon the expiration of the asserted patent, since at that point potential infringement of the unasserted patents could be the only thing standing in the way of the defendant bringing its generic to market.

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Magistrate Judge Burke recently issued a report and recommendation, recommending that a Defendant’s motion to dismiss be granted in part in the basis of lack of subject matter jurisdiction and failure to adequately plead a declaratory judgment claim of indirect non-infringement. The Defendant, patentee Zond, had originally filed a patent infringement action against two TSMC entities in the District of Massachusetts. That case was administratively closed due to pending inter partes review proceedings. Zond later sent an infringement notice letter to TSMC, at which point TSMC commenced this declaratory judgment action against Zond in the District of Delaware. Zond filed a motion to dismiss for lack of subject matter jurisdiction, for failure to state a claim, and pursuant to the Declaratory Judgment Act. TSMC Tech., Inc., et al. v. Zond, LLC, C.A. No. 14-721-LPS-CJB, Report and Recommendation at 1-4 (D. Del. Jan. 8, 2015).

Judge Burke first accepted Zond’s facial challenge to subject matter jurisdiction as to one of the plaintiffs, finding that there was no declaratory judgment jurisdiction as to that particular plaintiff, which was hardly addressed in the complaint. Id. at 6-10. The plaintiff brought its complaint on behalf of three TSMC entities, including one entity (“TTI”) that was not a party to the Massachusetts action and that Zond did not name in its infringmenet notice letter. As Judge Burke explained, “The Complaint contains very few allegations related to TTI. In fact, the only allegation that specifically mentions TTI comes in the paragraph in which Plaintiffs list TTI’s state of incorporation and the location of its place of business. It is also notable that when the Complaint begins to discuss the existence of a legal controversy between certain TSMC entities and Zond, TTI’s name is conspicuously absent from those paragraphs.” Id. at 7. Indeed, Judge Burke found that the “lack of any allegation that Zond has engaged in pre-Complaint communications with TTI, while not dispositive in and of itself, provides strong indication that there is no subject matter jurisdiction here.” Id. at 8.

Next, Judge Burke granted in part the motion to dismiss declaratory judgment claims of non-infringement on 12(b)(6) grounds. As to direct non-infringement, Judge Burke found that it “is clear from the Complaint that Plaintiffs have identified ‘the same accused products and processes that Zond is accusing in the [First TSMC Massachusetts Action,]’ and it is also clear as to the general categories of products and processes that were at issue there. For these reasons, the instant allegations are sufficient to satisfy Form 18’s low bar.” Id. at 10-13. As to indirect non-infringement, which requires a pleading that meets the requirements of Twombly and Iqbal, however, Judge Burke found that the Plaintiffs had not provided factual allegations that would show a lack of any type of indirect infringement. Id. at 13-16. As the Court described the complaint, “Plaintiffs’ allegations of indirect non-infringement are extremely sparse, to the point of almost being non-existent. . . . Indeed, the counts are so sparse that they do not even recite the wording of the elements of contributory or induced infringement (let alone facts that assertedly demonstrate that these elements have been placed at issue or otherwise cannot be satisfied here).” Id. at 14. “In the end, Plaintiffs are seeking a declaration of indirect non-infringement without identifying ‘allegations by the patentee or other record evidence that establish at least a reasonable potential that such a claim could be brought.’” Id. at 15.

Finally, Zond argued that the Court should decline to exercise jurisdiction because the case had been filed contrary to the purposes of the Declaratory Judgment Act. Judge Burke, however, did not recommend dismissal of the case on this basis for the same reasons explained in his previous report and recommendation on a motion to enjoin and motion to transfer. Id. at 16.

Accordingly, Judge Burke recommended dismissal, without prejudice and with leave to amend, of all claims made by TTI for lack of subject matter jurisdiction and dismissal of all indirect non-infringement claims, but recommended denial of the motion in all other respects. Id. at 17.

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