Judge Richard G. Andrews recently granted motions to dismiss direct, indirect, and willful infringement claims under Rule 12(b)(6) in five related cases. Network Managing Solutions, LLC v. AT&T Inc., et al., C.A. No. 16-295, 16-296, 16-297, 16-298, 16-299 (RGA) (D. Del. Feb. 3, 2017). The Court found insufficient the allegation that the “3rd Generation Partnership Project Standards incorporate the technologies covered by the patents” because it was pled on information and belief. The Court explained, “Plaintiff knows its own patents. The standards are public. Saying on ‘information and belief’ that the standards ‘incorporate the fundamental technologies’ covered by the patents, without more, is insufficient to plausibly allege that the practice the standard necessarily means that a defendant also practices the patent.” The Court found the indirect infringement allegations insufficient for the additional reasons that the complaint failed to identify any third party that actually infringes, and failed to plausibly claim that the Defendants specifically intended to induce infringement. In turn, while recognizing that the plaintiff adequately alleged knowledge of its patent, the Court dismissed the willful infringement claim because it was based on insufficiently pled infringement claims.
Chief Judge Leonard P. Stark recently granted-in-part a defendant’s motion to exclude the testimony of a damages expert. Yodlee, Inc. v. Plaid Technologies Inc., C.A. No. 14-1445-LPS-CJB (D. Del. Jan. 27, 2017). On a number of issues, Judge Stark found that the defendant’s criticism of the expert’s analysis went to the weight to be afforded to it, rather than its admissibility. With respect to apportionment, though, Judge Stark agreed with the defendant that it would be inappropriate to permit the expert to testify in reliance on statements from plaintiff’s employees who were not disclosed under Rule 26 and subject to deposition. The Court therefore granted the motion to exclude apportionment testimony, but without prejudice to the plaintiff serving a supplemental expert report addressing the deficiencies and supplementing its Rule 26 disclosures. Similarly, the Court excluded, without prejudice to supplementing the expert’s report, the expert’s “reasonable royalty analysis as using an impermissible rule-of-thumb profit split.” The Court explained that the expert’s “failure to expressly account for varying pricing structures and the lack of a sufficiently detailed explanation for how he reached the ‘compromises’ [in the expert report] renders [the expert’s] reasonable royalty analysis, as presently articulated, insufficiently reliable.”
In two recent Memorandum Orders, Chief Judge Leonard P. Stark ruled on the parties’ privilege dispute, and denied defendant Future Link Systems, LLC’s (“Future Link”) motion for reconsideration of the Court’s September 28, 2016 Order granting in part plaintiff Intel Corporation’s (“Intel”) motion for summary judgment on its license claim. Intel Corp. v. Future Link Systems, LLC, C.A. No. 14-377-LPS (D. Del. Jan. 27, 2017).
As to the privilege dispute, Judge Stark denied Intel’s request that Future Link produce certain documents withheld as privileged or attorney work product. Judge Stark did, however, grant in part Future Link’s request that Intel produce certain documents withheld as privileged. As to one document that the Court ordered to be produced, Judge Stark noted that “[t]here is no indication that the document was ever actually sent to a lawyer for legal review, and it is unclear what ‘legal review process’ is referred to in the top-level email.” In addition, according to Judge Stark, “the attached slide-show presentation appears to be entirely technical in nature, raising no issues that would clearly require review by an attorney.” As to another document ordered to be produced, Judge Stark explained that “[t]here is nothing in the content of what was redacted that would indicate what legal advice was sought or obtained, if any. Moreover, there is no indication of any communication to an attorney of the redacted portion of the document for the purpose of obtaining legal advice.” (emphasis in original). As to another such document, Judge Stark noted that “[t]he fact that a document was reviewed by an attorney is not enough, by itself, to make the statements which have been redacted privileged.”
Denying Future Link’s motion for reconsideration, Judge Stark explained that the motion “simply repeats arguments that were previously raised [at the March 1, 2016 hearing], and does not add anything that could not have been presented to the Court before the Court’s September 28, 2016 ruling [on summary judgment].” Judge Stark also found that Future Link’s motion for reconsideration on the licensing issue failed on the merits.
The United States District Court for the District of Delaware announced today that, coinciding with the celebration of her birthday, the Honorable Sue L. Robinson has become a Senior United States District Court Judge. Judge Robinson intends to serve the District of Delaware as a Senior Judge until this summer.
The Court, in light of Judge Robinson’s new role, will be modifying case assignment practices effective immediately. Specifically, Judge Robinson will not receive new criminal or civil case assignments. Until the vacancy left by Judge Robinson is filled, some civil cases will be assigned to a “Vacant Judgeship” and referred to one of Magistrate Judges Thynge, Burke, or Fallon, who will have full authority to manage the Vacant Judgeship docket to the extent permitted by law. As needed, cases on Judge Robinson’s docket or the Vacant Judgeship docket will be reassigned to one of the active District Judges.
The Court’s official announcement outlining these changes can be viewed HERE.
In a recent Memorandum Order, Judge Richard G. Andrews denied defendant’s (“Sandoz”) motion to dismiss the case for lack of subject matter jurisdiction. Sanofi v. Lupin Atlantis Holdings, SA, C.A. No. 14-415-RGA (D. Del. Jan. 26, 2017). As Judge Andrews explained, Sandoz made a “Paragraph IV” certification in relation to plaintiff Sanofi’s ’900 patent on February 17, 2016. On October 28, 2016, Sandoz changed the Paragraph IV certification to a “Paragraph III” certification. As Judge Andrews explained, a “Paragraph IV certification creates subject matter jurisdiction,” but a Paragraph III certification does not create subject matter jurisdiction “because it represents that the generic will not market its product before the relevant patents expire.” Id. at 2. According to Judge Andrews, the “precise issue raised here is whether a generic who has filed a Paragraph IV certification divests the district court of jurisdiction by the mere act of converting the Paragraph IV certification to a Paragraph III certification.” Id.
In this instance, Judge Andrews found that such conversion did not divest the court of subject matter jurisdiction. First, Judge Andrews found that “I am not deprived of jurisdiction under 35 U.S.C. § 271(e)(2) and 35 U.S.C. § 1338(a) because it is sufficient that the case was initially certified under Paragraph IV.” Id. at 2-3. Judge Andrews also noted that “[i]t . . . appears that 28 U.S.C. § 2201 may confer jurisdiction.” Id. at 3. Second, Judge Andrews concluded that Sandoz’s mootness argument did not have any merit, finding that in this case there was a “reasonable expectation that the wrong will be repeated.” Id. at 3-5. Indeed, Sandoz conceded that it could “convert its Paragraph III certification back to a Paragraph IV at some future date under certain circumstances.” Id. at 3. Further, Judge Andrews noted that “Sanofi makes an adequately supported argument that Sandoz would reconvert back to Paragraph IV.” Id. at 4. In reaching this conclusion, Judge Andrews distinguished Ferring B.V. Watson Labs, Inc.-Fla., 764 F.3d 1382 (Fed. Cir. 2014) and AstraZeneca AB v. Anchen Pharms Inc., 2014 WL 2611488 (D.N.J. June 11, 2014). Id. at 3-5.
In a recent Memorandum Opinion, Chief Judge Leonard P. Stark denied defendant Costco Wholesale Corporation’s (“Costco”) motion to dismiss the litigation pursuant to Rule 37(b)(2) for discovery misconduct by plaintiff Robert Bosch LLC (“BLLC”). Robert Bosch LLC v. Alberee Products, Inc., C.A. No. 12-574-LPS (D. Del. Jan. 24, 2017). BLLC failed to comply with the court’s order to produce certain documents by a given deadline following a discovery dispute. See id. at 1-2. BLLC stated reason for not producing the documents is that its parent, Robert Bosch GmbH (“BGmbH”), “refused to search for and produce any documents when BLLC requested BGmbH to do so, even when BLLC’s requests were backed by an order of the Court.” Id. at 2. Costco’s motion pursuant to Rule 37(b)(2) followed. Id. at 3-4.
Denying Costco’s request to dismiss the case, Judge Stark consider the six factors set forth in Poulis v. State Farm Fire & Casualty Co., 747 F.2d 863 (3d Cir. 1984). First, considering BLLC’s responsibility, the Judge Stark noted that “Costco should have been given access to BGmbH-held documents that were responsive to Costco’s requests, regardless of whether such documents were supportive of BLLC’s positions in this litigation. BLLC had effective control over production of such documents.” Id. at 6. On this point, Judge Stark further explained that “[b]ecause BLLC had control over the disputed documents, BLLC is largely responsible for its failure to produce the required documents and the failure to comply with the Court’s . . . Order. Therefore, this first Paulis factor weighs in favor of dismissal.” Id. at 8. Judge Stark also found that Costco was highly prejudiced by BLLC’s misconduct, given that Costco was “deprived of the opportunity to develop its defenses during fact discovery within the necessary context of full production of responsive documents.” Id. at 8. Such prejudice also weighed in favor of dismissal. Id. at 8-9. The Court also found BLLC’s history of dilatoriness in the litigation and willful disobedience of the court’s discovery order to weigh in favor of dismissal. See id. at 9-10.
Ultimately, however, Judge Stark found in this instance that “[l]esser, alternative sanctions are appropriate and will adequately ameliorate the prejudice Costco has suffered.” Id. at 10-11. Indeed, as Judge Stark noted, “[d]ismissal must be a sanction of last, not first, resort.” Id. at 10. Rather than dismissal, Judge Stark required BLLC to pay “Costco’s reasonable attorney’s fees that were caused by BLLC’s discovery misconduct.” Id. at 11. Further, Judge Stark provided that “Costco will be permitted the opportunity to seek further discovery, should it believe any is necessary, in order to ensure that Costco will have received in production all materials and other discovery which it would have obtained had BLLC lived up to its discovery obligations throughout this case.” Finally, Judge Stark ruled that “in connection with submission of the proposed final pretrial order and the final pretrial conference, the Court will consider, if requested by Costco, granting relief in limine to exclude particular late-produced evidence, should Costco be able to persuade the Court that, in light of the totality of applicable considerations, such evidence should be excluded.” Id. at 11.
In Arcelormittal, et al. v. AK Steel Corporation, C.A. No. 13-685-SLR (D. Del. Jan. 19, 2017), Judge Sue L. Robinson granted Defendant’s motion for summary judgment as to non-infringement based on collateral estoppel. Discovery in the present action was limited to evaluating whether Defendant’s accused products had changed since the verdict in a prior action brought by Plaintiff on another patent, where Defendant prevailed on non-infringement. See id. at 1-2.
Noting that collateral estoppel “may also operate to bar relitigation of common issues in actions involving different bur related patents,” the Court rejected Plaintiff’s arguments regarding how Defendant’s products differed in this case and in the prior action. See id. at 6,7. The case at bar satisfied the required elements for collateral estoppel to apply, as the prior action involved the same parties, products, conduct, and issues. Id. at 10.
In its analysis, the Court also rejected certain of Plaintiff’s arguments regarding alleged concessions made by Defendant during appeal arguments, as the Court had listened to the argument before the Federal Circuit and disagreed that any concession had occurred. Id. at 8 n.8. The Court also rejected Plaintiffs’ arguments that it should receive discovery “as to whether defendant directs or controls the performance of the hot stampers or is in a joint enterprise” such that divided infringement may be implicated, because the claims at bar were not method claims and, furthermore, it appeared that this was discovery Plaintiffs should have taken in the prior action. Id. at 9 & n.9. The Court reached a similar conclusion as to Plaintiff’s arguments that additional discovery was needed as to indirect infringement, as Plaintiffs had already litigated these issues in the prior action. Id. at 9-10.
Judge Gregory M. Sleet, recently granted defendants’ motion for summary judgment of non-infringement based on upon the Court’s construction of the limitation “changing [price] information.” Quest Licensing Corporation v. Bloomberg L.P., No. 14-561-GMS (D. Del. Jan. 19, 2017). Defendants argued that summary judgment was appropriate because “defendants’ accused systems do not receive or supply ‘only data that has changed’ as required by all of the asserted claims of the patent-in-suit.” Id. at 3. Judge Sleet agreed. The Court previously construed the term “changing information” to mean “only [price] data that has changed,” and it was undisputed that the accused systems receive and supply information that “always includes non-changing information such as the stock symbol.” Id. at 5-6. Judge Sleet was not persuaded that the Court should revisit its claim construction ruling. Id. at 6.
In Collabo Innovations, Inc. v. Omnivision Technologies, Inc., C.A. No. 16-197-SLR-SRF (D. Del. Jan. 25, 2017), Magistrate Judge Sherry R. Fallon considered Defendant’s motion to transfer to the Northern District of California as well as its motion to dismiss indirect infringement claims based on an alleged lack of pre-suit knowledge.
The Court denied the motion to transfer. Both parties were Delaware corporations with principal places of business in California, and Plaintiff had no facilities in Delaware. Id. at 1. Because Delaware was not Plaintiff’s “home turf,” the Court awarded Plaintiff’s forum choice “increased weight in the Jumara analysis but less than the ‘substantial’ or ‘paramount’ weight” it would be given had [Plaintiff] filed suit in its home forum.” Id. at 8. Because Defendant manufactured, sold, and used the accused products nationwide, and because it was also “a large Delaware corporation with resources to litigate in this district,” where the claim arose was neutral and the convenience of the parties weighed against transfer. Id. at 9-10. As to the public interest factors, the Court found that practical considerations weighed slightly against transfer where Plaintiff had filed a related action against another party in Delaware but where Defendant argued that “a trial in Delaware will be more expensive and difficult due to travel considerations and expenses, including costs of local counsel.” Id. at 12-13. In sum, Defendant had “not shown that the Jumara factors as a whole weigh strongly in favor transfer. Only [Defendant’s] forum preference weighs in favor of transfer, and that preference does not warrant maximum deference. On the other hand, the remaining factors are neutral or weigh in favor of [Plaintiff].” . . . The court recognizes that it may be more expensive and inconvenient for [Defendant] to litigate in Delaware instead of California. However, under the circumstances, the court ‘decline[s] to elevate the convenience of one party over the other,’ as ‘discovery is a local event and trial is a limited event.’ . . . Delaware imposes no ‘unique or unexpected burden’ on [Defendant], such that transfer is warranted in the interests of justice.” Id. at 14-15 (citations omitted).
The Court then recommended that the motion to dismiss be granted in part, as to any possible allegations of pre-filing conduct. Acknowledging that “[t]he case law in this district is divided on the issue of whether pre-suit knowledge is required to sufficiently state a claim for indirect infringement,” Id. at 17, the Court adopted the “more recent line of cases” holding that “the filing of a complaint is sufficient to provide knowledge of the patents-in-suit for purposes of stating a claim for indirect infringement occurring after the filing date.” Id. Here, Plaintiff had limited its cause of action for indirect infringement to conduct following the filing of the complaint. Id. at 18. “In keeping with the most recent decisions of this court,” therefore, the “post-filing date knowledge of the patents-in-suit is sufficient to state a claim for indirect infringement occurring after service of the complaint. In view of the foregoing authority,” the Court recommended that the motion be granted-in-part “to the extent that [Plaintiff’s] amended complaint could be construed to assert causes of action for indirect infringement based on pre-filing conduct.” Id.
In a series of related actions, Judge Richard G. Andrews denied Defendants’ motion to exclude portions of the opinion of Plaintiff’s damages expert, following oral argument and a Daubert hearing on the matter. Delaware Display Group LLC, et al. v. Lenovo Group Ltd., et al., C.A. No. 13-2108-RGA (D. Del. Jan. 18, 2017). Defendants argued that the expert failed to properly apportion between patented and unpatented features, that he improperly assigned 100% of his incremental profit to the licensor, and that his royalty rate was improper because it was for a portfolio license where only two patents were asserted in the case. Id. at 6.
As to apportionment, the Court was satisfied from the expert’s testimony at the Daubert hearing that his methodology for apportionment was reliable, “extensively analyz[ing] the patented features and [taking] out what he believed were unpatented features,” and Defendants’ expert’s approach to apportionment did not appear to be “substantially different.” Id. The Court reached the same conclusion as to the expert’s incremental profit methodology, finding it “logical,” not applying an improper “rule of thumb,” and apparently consistent with the approach of the expert of one Defendant. Id. Finally, the expert’s portfolio license methodology was sufficiently reliable. “His belief that during the hypothetical negotiation, one could get a license to both patents without there being royalty stacking, is logical. (Tr. 60:23-61:21, 103:6-104:7). His approach is consistent with that of [one of the Defendant’s experts]. There is no impermissible royalty stacking.” Id. at 6-7.
Having concluded that Defendants’ concerns with the expert went to the weight, rather than admissibility, of the testimony, the Court denied the Daubert motion.