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In a recent order, Judge Sue L. Robinson denied defendant’s motion for leave to amend paragraph 19 of its answer, which responded to plaintiff’s infringement allegations regarding U.S. Patent No. 6,647,450. Cradle IP, LLC v. Texas Instruments, Inc., C.A. No. 11-1254-SLR (D. Del. May 23, 2013). In paragraph 19, defendant originally alleged that it had made, used, sold, or offered to sell microprocessor and OMAP devices “utilizing split transaction buses with target device command buffers (insofar as that phrase is given its common meaning and not necessarily the meaning that may be ascribed to it as a result of any claim construction).” Id. at 1-2. On January 23, 2013, more than two months after the deadline to amend the pleadings, defendant filed its motion for leave, seeking to change paragraph 19 such that it would state that defendant “denies that its OMAP devices utilize split transaction buses with target device command buffers.” Id. at 3. Because defendant moved to amend its answer after the deadline to amend the pleadings, Judge Robinson’s analysis was guided by both Rules 15(a)(2) and 16(b)(4) of the Federal Rules of Civil Procedure. See id. at 3-7.

With respect to Rule 15(a)(2), Judge Robinson first addressed whether defendant’s delay was undue. Id. at 4. Defendant argued that its delay would “not place an unwarranted burden on the court or [plaintiff] because it put [plaintiff] on notice of its proposed amendment before any depositions occurred and before the close of fact discovery.” Id. at 4. Judge Robinson found, however, that defendant failed to explain why it “did not seek to amend before the expiration of the deadline to amend pleadings,” and also found that the amendment was not “based on any new evidence that has emerged during discovery.” Id. at 5. Judge Robinson therefore found the delay undue “[g]iven the lack of proper justification.” Id. Judge Robinson further found that the undue delay would be prejudicial to defendant. Id. at 7. The amendment, Judge Robinson explained, “does not merely add particularity to its pleadings; it seeks to remove a qualification in its answer such that the response becomes an outright denial.” Id. at 7. Judge Robinson further explained that plaintiff “relied upon [defendant’s] answer and prepared its case in accordance with those pleadings” and that “[t]o allow [defendant] to change the landscape of the litigation at this late date would be prejudicial to [plaintiff].” Id. Given that defendant’s undue delay would result in prejudice to plaintiff, Judge Robinson found that defendant failed to satisfy Rule 15(a)(2). See id. at 6-7.

Judge Robinson additionally found that defendant failed to meet the “good cause” requirement for amendment pursuant to Fed. R. Civ. P. 16(b)(4). Id. at 7-8. Judge Robinson noted that “the good cause standard under Rule 16(b) hinges on diligence of the movant, and not on prejudice to the non-moving party.” Id. at 7. As Judge Robinson explained, defendant failed to offer “any explanation as to why it could not reasonably meet the scheduling order’s November 1, 2012 deadline for amending the pleadings.” Id. at 8.

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Magistrate Judge Mary Pat Thynge recently issued a report and recommendation deciding four motions to exclude testimony and opinions of the parties’ experts. Masimo Corporation v. Philips Electronics North American Corporation, et al., C.A. No. 09-080-LPS-MPT (D. Del. May 20, 2013). The details of the case can be found here, in the Court’s previous report and recommendation regarding other motions at issue in the case.

The Court recommended exclusion of the following expert testimony:

-Defendants offered three experts to support their claim that one of their products was an acceptable non-infringing alternative. The Court recommended exclusion of any testimony by one of the experts concerning the significance of FDA approval or clearance regarding the performance of defendants’ product. This expert admitted that he was only familiar with the FDA approval process “in vague terms” and had “never been part of a formal application process for a device as of yet.” Id. at 17. But this expert’s “limited[]” reliance on FDA approval standards did not preclude the rest of his testimony because “the foundation for [this expert’s] opinion and testimony does not rest on FDA approval standards for medical devices.” Id.

-Plaintiff offered an expert (Dr. Quill) to support its claim that defendants’ product was not an acceptable non-infringing alternative. First, Dr. Quill’s testimony was inadmissible as to what would be acceptable to defendants’ customers because he did not speak to any such customers. Id. at 23-24. On the other hand, his background made him qualified to “testify about the type of medical equipment which meets the needs of medical professionals and hospitals.” Id. Second, “Dr. Quill may testify there is lack of peer reviewed studies on [defendants’ product] showing that it is an acceptable alternative, but cannot opine or testify that [the product] is [an] unacceptable alternative due to the lack of such studies.” Id. at 24. This expert had “admitted the absence of evidence demonstrating acceptability of a medical device does not prove the device is unacceptable.” Id.

-Dr. Quill’s supplemental report, filed after the applicable deadline, was inadmissible as untimely. Id. at 25. Plaintiff had not presented evidence that the information in the report could not have been prepared in the initial expert report. “Further, the scheduling order has been modified at the request of the parties several times, and none permit supplemental reports. If either party desired the option of supplemental reports, the matter could have been addressed in the numerous changes to the scheduling order, or requested of the court long before discovery ended.” Id. at 26.

-Defendants’ damages expert (Dr. Keeley) was precluded from relying on a certain license agreement as a basis for the reasonable royalty rate because there was insufficient evidence that this agreement was comparable to a hypothetical negotiated license for patents-in-suit. Id. at 45.

-The Court also limited Dr. Keeley’s testimony to the extent he provided an independent opinion on the acceptability of defendants’ product as a non-infringing alternative because this expert was an economist and not a medical professional. Id. at 40. But Dr. Keeley could rely on the admitted opinions of defendants’ other experts regarding acceptable non-infringing alternatives in order to calculate damages. Id.

-Defendants’ motion to exclude testimony of plaintiff’s damages expert (Wagner) attacked this opinion on nine different grounds. The Court recommended granting the motion with regard to two of them. First, the testimony regarding plaintiff’s profit margin was unreliable. “Wagner’s testimony evidence[d] a lack of familiarity with the underlying data for his conclusions on profit margin. In evaluating [plaintiff’s] profit margin, Wagner delegated work to his staff. As shown in his deposition, Wagner was unfamiliar with the supporting documents and other details for his assumptions.” Id. at 60. Second, Wagner’s opinion that defendants’ product was an unacceptable alternative was excluded to the extent the analysis relied on excluded testimony of Dr. Quill. Id. at 66.

The Court recommended denial of the parties’ motions with respect to the following:

-With the exception of the above re: testimony on FDA approval or clearance, plaintiff’s motion to exclude the testimony of defendants’ experts regarding acceptable non-infringing alternatives should be denied. Id. at 18.

-Dr. Quill’s testimony that plaintiff’s commercial success was due to its advanced technology was admissible. Dr. Quill relied on the “technical expertise” of another expert to support a finding that a nexus existed between plaintiff’s commercial success and the patents-in-suit. Id. at 28. This combination of expert opinions to show a nexus was appropriate, and “demonstrate[d] the required nexus and bases for commercial success.” Id.

-Dr. Keeley’s testimony was admissible to the extent it concluded what a hypothetical consumer of defendants would consider an acceptable alternative. “[Plaintiff] misapplie[d] the analysis in [Grain Processing Corp. v. American Maize-Products Co., 185 F. 3d 1341 (Fed. Cir. 1999) in arguing Dr. Keeley’s analysis was improper]. The focus is not what [defendants] would or would not consider to be an acceptable alternative, but rather, what a [hypothetical] consumer would or would not consider to be an acceptable alternative.” Id. at 42.

-Dr. Keeley’s testimony that limited plaintiff’s incremental profit margins based on regression analysis was admissible. “The court’s role [as gatekeeper] is to determine whether Dr. Keeley’s methodology is scientifically acceptable, not which calculation or opinion is more correct [between his and the expert of plaintiff]. . . . [T]he approach by Dr. Keeley is reasonable and substantially equivalent to [plaintiff’s] expert’s methodology.” Id. at 43.

-The Court rejected the majority of defendants’ arguments for excluding Wagner’s testimony as going to the weight of the evidence or to issues that may be addressed at cross examination. See id. at 46-66.

-Wagner’s testimony on a reasonable royalty rate was admissible because the report applied the Geogia-Pacific factors and Wagner’s “prior application of [these factors had been] affirmed by the Federal Circuit” in another case. Id. at 55.

-Wagner’s opinion on future damages was also admissible. The “commensurably greater” standard of Oiness v. Walgreen, Co., 88 F.3d 1025 (Fed. Cir. 1996), which defendants cited, applies to the burden “the patentee must meet to justify future damages” but “has no bearing on the admissibility of expert testimony, if Rule 702 is satisfied.” Id. at 57-58.

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Judge Sue L. Robinson recently transferred a case between two Delaware corporations to the Northern District of California. Fortinet, Inc. v. FireEye, Inc., Civ. No. 12-1066-SLR (D. Del. May 16, 2013). Both parties were headquartered in Northern California. The plaintiff was significantly larger than the defendant, and had previously been involved at least five times in litigation in the Northern District of California. Id. at 1. The defendant, on the other hand, had no federal litigation history. Id. at 1-2. The Court recognized that the plaintiff’s preferred venue “remains a significant factor” in the Jumara analysis, id. at 4, but found that on balance, the case presented “extenuating circumstances”, including that both parties were headquartered in Northern California, the defendant was smaller and had no federal litigation experience, and the plaintiff was pursuing, in addition to its patent infringement claims, California state law claims for misappropriation of trade secrets and intentional interference with contractual relations and prospective economic advantage. Id. at 7.

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Judge Andrews recently considered a motion to dismiss allegations that PayPal’s “network products and/or services that use Remote Direct Memory Access (RDMA)” infringe plaintiff’s patent by “operating according to the InfiniBand specification.” Infinite Data LLC v. PayPal, Inc., C.A. No. 12-1622-RGA (D. Del. May 17, 2013). Noting that “extremely minimal allegations” can satisfy Form 18, Judge Andrews denied the motion. Id. at 1-2 (citing In re Bill of Lading, 681 F.3d 1323, 1334 (Fed. Cir. 2012):

“Were there only Bill of Lading, I would probably dismiss this Complaint. Nevertheless, as the Complaint sets forth what the patent claims, what sort of computer system is supposed to be practicing the patented method, and refers to the InfiniBand technology (which presumably means something to people in the field) to further give notice to the Defendant of how its products and services are practicing the patented method, I think the Plaintiff has pled enough, albeit barely, to sustain the Complaint.” Id. at 2.

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Chief Judge Gregory Sleet recently denied a defendant’s motion to dismiss false marking counts of a complaint. See Devicor Medical Products, Inc. v. Biopsy Sciences, LLC, C.A. No. 10-1060-GMS, Order at 1 (D. Del. May 17, 2013). Defendant Biopsy Sciences sought to dismiss the false marking claims on grounds that the plaintiff, Devicor Medical Products, did not sufficiently plead the intent required by Rule 9(b). In his order, Judge Sleet acknowledged that Federal Circuit precedent required application of Rule 9(b)’s heightened pleading standard to false marking claims. Judge Sleet continued, however, that Devicor “is not required to prove its case at the pleadings stage. Rather, the court need only ask whether the [complaint] ‘allege[s] sufficient underlying facts from which [the] court may reasonably infer that a party acted with the requisite state of mind.’” Id. Because Devicor “offered specific allegations directed towards its position that Biopsy had knowledge of the alleged mismarking and took affirmative actions to mislead the public,” Judge Sleet found “the necessary ‘objective indication’ from which the court may draw a reasonable inference of intent” and deny the motion to dismiss. Id.

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In a recent report and recommendation, Magistrate Judge Christopher J. Burke recommended that defendants’ motion for leave to amend their pleading with inequitable conduct claims and defenses be denied. INVISTA North America S.à.r.l. et al. v. M&G USA Corporation et al., C.A. No. 11-1007-SLR-CJB (D. Del. May 3, 2013). Plaintiffs are asserting U.S. Patent Nos. 7,943,216 (the “’216 Patent”); 7,879,930 (the “’930 Patent”); and 7,919,159 (the “’159 Patent”). Id. at 1. On August 6, 2012, the date which marked the deadline to amend the pleadings pursuant to the Scheduling Order, defendants moved for leave to amend their pleading with inequitable conduct claims and defenses with respect to each of plaintiffs’ asserted patents. Id. at 5. Defendants alleged that those responsible for the prosecution of the asserted patents submitted misleading and incomplete test data to the PTO. Id. at 11, 26. Judge Burke’s analysis was governed by Federal Rule of Civil Procedure 15(a). See id. at 5-6. Because plaintiffs opposed defendants’ motion “on the sole basis that [their] proposed amendments would be futile,” Judge Burke was required to assess only futility of amendment. Id. at 6. As Judge Burke explained, “the standard for assessing futility of amendment is the same standard of legal sufficiency that applies under Fed. R. Civ. P. 12(b)(6).” Id. at 7.

With respect to the ’159 and ’216 Patents, Judge Burke found that defendants failed “to sufficiently plead both the ‘who’ of inequitable conduct as well as the scienter requirement.” Id. at 25. Judge Burke explained that “[n]one of [defendants’] allegations tie specific conduct to any specific individual; instead, as to ‘who’ engaged in misconduct before the PTO, every allegation is pled generally, with reference to ‘Invista,’ ‘Applicant,’ ‘they,’ and ‘their.’” Id. at 17. Judge Burke further found that as to knowledge, the “problem with [defendants’] allegations circle[d] back to the Court’s finding with regard to [defendants’] insufficient pleading as to the ‘who’ of inequitable conduct.” Id. at 21. Specifically, Judge Burke explained that “[w]ith no real facts pled that are specific to any individual, there is a clearly insufficient basis to reasonably infer that any particular person . . . did in fact know of the materiality of this data, and intentionally failed to disclose the data or disclosed incomplete data.” Id. at 22. Moreover, with respect to an intent to deceive, Judge Burke noted that defendants failed to satisfy its burden “under Exergen by asserting that ‘Applicant’ or ‘INVISTA’ as a whole had a ‘desire to acquire patent rights in the gas barrier market,’ and then suggest[ing] that this general statement should lead to the inference that” a particular individual “knowingly withheld or misrepresented material data because of a specific intent to deceive the PTO.” Id. at 25.

Judge Burke further found that defendants’ proposed inequitable conduct defense with respect to the ’930 Patent “suffer[ed] from the same fatal flaws” as those related to the ’159 and ’216 Patents. Id. at 28. Specifically, defendants “failed to sufficiently identify the ‘who’ of [the] inequitable conduct,” which in turn “doom[ed] [defendants’] allegations regarding the scienter requirements of inequitable conduct in relation to the ’930.” Id. Judge Burke additionally found that defendants failed to sufficiently plead “but-for” materiality with respect to the ’930 Patent. Id. at 29. As Judge Burke explained, “[m]ere claims that the PTO would not have granted the patent had it known of the omission or misrepresentation are insufficient because they are conclusory legal conclusions under Iqbal.” Id.

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In Edwards Lifesciences LLC, et al. v. Medtronic CoreValve LLC, et al., C.A. No. 12-23-GMS (D. Del. May 13, 2013), Chief Judge Gregory M. Sleet recently issued an Order denying defendants’ letter request to file a motion for summary judgment asserting invalidity for lack of enablement of U.S. Patent No. 8,002,825. The Court explained that issues of material fact remained as to “(1) whether the 18 French limitation is a novel feature of the claimed invention; and (2) if this limitation is novel, whether the ‘825 Patent disclosure is enabling.” Id. at 1 n.1.

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In two consolidated actions, Magistrate Judge Mary Pat Thynge recently issued a Memorandum Order construing the term “promotional code” in U.S. Patent Nos. 5,717,866, entitled “Method for comparative analysis of consumer response to product promotions,” and 5,924,078, entitled “Consumer-provided promotional code actuatable point-of-sale discounting system.” Codepro Innovations LLC v. Safeway Inc., C.A. No. 12-970-MPT and Codepro Innovations LLC v. The Stop & Shop Supermarket Company LLC, et al., C.A. No. 12-1482-MPT, at 1 (D. Del. May 14, 2013). The parties had requested early claim construction for this term. Id.

Judge Thynge construed this term as “a series of publicly distributed or advertised characters associated with discount information corresponding to a product or products.” Id. at 18.

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Judge Sue Robinson recently considered motions to transfer and dismiss filed by patent infringement defendant Callidus Software. Plaintiff Versata Software is a Delaware corporation with a principal place of business in Texas, and Defendant Callidus is a Delaware corporation with a principal place of business in California. Callidus moved to transfer to the Northern District of California and to dismiss under Rule 12(b)(6), and Judge Robinson denied both motions. See Versata Software, Inc., et al. v. Callidus Software Inc., C.A. No. 12-931-SLR, Memo. Op. at 1-2 (D. Del. May 16, 2013).

Referring to her previous decision in Helicos Biosciences Corp. v. Illumina, Inc., 858 F. Supp. 2d 367 (D. Del. 2012), Judge Robinson noted that both parties preferred venue would be a legitimate venue. But because “‘convenience’ is separately considered in the transfer analysis, the court decline[d] [to] elevate a defendant’s choice of venue over that of a plaintiff based on defendant’s convenience.” Id. at 3-4. Carefully weighing all of the Third Circuit’s Jumara factors, Judge Robinson ultimately concluded that “Versata chose a legitimate forum which all parties have in common—their state of incorporation. As is usual in these cases, the convenience factors do not weigh in favor of transfer, because discovery is a local event and trial is a limited event. Although Delaware is not the locus of any party’s business activities, it is a neutral forum and no more inconvenient for Calllidus than Texas, the locus of Versata’s business activities. Given that both Versata and Callidus have experience litigating in multiple jurisdictions, the court is not persuaded that transfer is warranted in the interests of justice.” Id. at 3-6.

Judge Robinson then turned to Callidus’ motion to dismiss for failure to state a claim. Her Honor first found that with respect to “Versata’s claims of direct infringement . . . Versata’s complaint sufficiently identifies the accused software . . . as required by Fed. R. Civ. P. Form 18.” Id. at 9. Consistent with her practice in previous cases, Judge Robinson also found that Versata had adequately plead indirect infringement. Relying on Walker Digital LLC v. Facebook, Inc., 852 F. Supp. 2d 559 (D. Del. 2012), Judge Robinson held that the complaint’s allegation of knowledge of infringement as of the date of filing provided adequate notice under Global-Tech. Id. Furthermore, the pleading of induced infringement without identification of a specific customer was adequately supported because Callidus “licenses and/or sells the accused products” and Versata also alleged direct infringement. Finally, the pleading of contributory infringement was adequately supported because Versata alleged direct infringement and knowledge of lack of substantial non-infringing uses. Id. at 10. For these reasons, Judge Robinson found that all of the allegations of the complaint “satisfied the requirements of Twombly and Iqbal.” Id. at 7-10.

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In Pfizer Inc. et al. v. Sandoz Inc., C.A. No. 12-654-GMS-MPT (D. Del. May 7, 2013), Chief Judge Gregory M. Sleet recently issued an order construing the following six disputed terms of U.S. Patent No. 8,026,276, which is alleged to cover a pharmaceutical that treats advanced renal cell carcinoma:
– “CCI-779”
– “w/v”
– “w/v of citric acid”
– “parenteral composition”
– “preparing”
– “combining”

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