Judge Richard G. Andrews recently ordered a plaintiff to reduce the number of claim terms it was asserting from 52 to 32 by the filing of its opening claim construction brief, finding that there would be little or no prejudice associated with such a reduction. EMC Corp. v. Pure Storage Inc., C.A. No. 13-1985-RGA (D. Del. Sept. 19, 2014). Judge Andrews denied a request for an extension of page limits for claim construction briefing, however, but explained: “I find that having Plaintiff open the briefing with arguments for plain meaning is generally not very helpful. Thus, Plaintiff need only brief in its opening brief those terms for which it proposes a construction. Of course, Plaintiff will need to respond in its reply brief if Defendant proposes constructions for terms that the Plaintiff believes should be given their plain meaning.” Finally, the Court indicated that regardless of the number of claim terms the parties’ briefed, the Court would permit oral argument on no more than 10 terms.
Judge Sue L. Robinson recently granted Defendant Carrier Corp.’s motion to dismiss Plaintiff Goodman Mfg. Co.’s complaint seeking declaratory judgment of inequitable conduct relating to Carrier Corp.’s U.S. Patent Nos. 7,243,004 and 7,775,452. Goodman Mfg. Co. v. Carrier Corp., C.A. No. 13-2014-SLR (D. Del. Sept. 23, 2014). This declaratory judgment action was filed after Carrier sued Goodman for infringing the same patents, and on the same day Goodman sought leave to amend its answers to assert inequitable conduct in Carrier’s patent infringement action. Id. at ¶ 2. The court subsequently denied Goodman’s motion to amend its answers. Id.
Judge Robinson found that Goodman’s declaratory judgment claim of inequitable conduct is a compulsory counterclaim because it “arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.” Id. at ¶¶ 3-5. The Court noted that Goodman made the same arguments in this case that it made to the Court in the Carrier case in support of its motion to amend its answer to add inequitable conduct claims. Id. at ¶ 5. “Goodman may not circumvent the court’s denial of its motion for leave to amend by filing a separate action for the same claims.” Id. Judge Robinson also found that the court did not have subject matter jurisdiction over Goodman’s declaratory judgment counterclaim as to the ‘452 patent because the parties previously stipulated to dismiss their infringement and invalidity claims as to that patent. “Without a corresponding infringement case, under a ‘totality of the circumstances’ review, there are insufficient facts to show the existence of an actual controversy between the parties as to the ‘452 patent.” Id. at ¶ 9.
In L’Oréal S.A. v. MSD Consumer Care, Inc., C.A. No. 12-99-GMS (D. Del. Sept. 19, 2014), Judge Gregory M. Sleet addressed defendant’s motion for leave to amend its answer with affirmative defenses and counterclaims. The motion was filed following the deadline to amend the pleadings, and defendant was therefore required to show “good cause.” Id. at 1 (citing Fed. R. Civ. P. 16(c)(b)(4)).
Judge Sleet granted defendant’s motion for leave to amend to include claims of inequitable conduct. Judge Sleet was “not convinced” that “defendant needlessly delayed or that the plaintiffs will be unduly burdened by the addition of these allegations.” Specifically, the close of fact discovery was on January 31, 2014, and defendant filed its motion of February 6, 2014. Judge Sleet explained that “defendant was diligent in filing its motion for leave to amend to include allegations of inequitable conduct, and that the plaintiffs have failed to argue that any prejudice would result.” Id. at 2. Judge Sleet did, however, deny defendant’s motion for leave to amend to include new counterclaims for invalidity and non-infringement. Judge Sleet explained that “[d]espite having previously included these claims as affirmative defenses, the defendant provides no justification for why these counterclaims were not or could not have been included within the time limits of the original scheduling order.” Id. at 3.
Judge Gregory M. Sleet recently denied defendant’s motion to stay pending reexamination. A.L.M. Holding Co., et al. v. Akzo Nobel Surface Chemistry LLC, C.A. No. 13-1069-GMS (D. Del. Sept. 16, 2014). Judge Sleet considered three factors when deciding the stay motion: (1) undue prejudice or tactical disadvantage to non-moving party, (2) simplification of issues, and (3) stage of case. Id. 2 n.1. Judge Sleet noted that undue prejudice requires more than “the mere possibility of delay.” Id. Judge Sleet determined that defendant appeared to have timely filed the request for ex parte reexamination, but that evidence suggested a stay might prejudice plaintiff’s product sales over the course of “what is likely to be a lengthy delay[.]” Id. This factor weighed against a stay. Regarding simplification of issues, Judge Sleet noted that no matter the outcome, the results of the reexamination will “simplify issues before the court,” which weighed in favor a stay. Id. But, the last factor, stage of the case, tipped the scales against a stay because the case had “proceeded sufficiently far enough,” such that a claim construction hearing was scheduled for September 29, 2014 and trial was scheduled for July 2015. Id.
In L-3 Communications Corporation v. Sony Corporation, et al., C.A. No. 10-734-RGA, Judge Richard G. Andrews recently issued rulings on defendants’ motion for judgment as a matter of law (D. Del. Sept. 12, 2014) (“JMOL Memorandum Opinion,” first document below) and both parties’ motions for entry of judgment (D. Del. Sept. 12, 2014) (“Memorandum (Entry of Judgment) and Final Judgement,” second document below). The Court found in defendants’ favor as to both sets of motions.
Following a jury verdict in plaintiff’s favor on defendants’ invalidity counterclaims only, defendants renewed their motion for judgment as a matter of law that the asserted patent claims are invalid as obvious. The Court granted the motion, finding the jury’s verdict legally insufficient. The only issue presented was whether it would have been obvious to add an “in-pixel amplifier” to a certain prior art reference. JMOL Memorandum Opinion at 2. The Court rejected plaintiff’s argument at trial that this reference taught away from adding an amplifier, finding its characterization of the prior art incorrect. See id. at 7-9. The Court also considered and rejected a new argument raised by plaintiff for the first time in its post-trial briefing even though this argument was not properly put before the jury. See id. at 7 n.7 and 9-12. The Court concluded that defendants had met their burden of proving obviousness, and granted their motion for judgment as a matter of law.
Both parties also moved for entry of judgment related to claims that not been tried because, due to the Court’s claim construction, plaintiff conceded that it could not prove infringement. The parties disagreed as to the proper language for the judgment, as defendant was “concerned that if it consents to [plaintiff’s] proposed judgment it will be precluded from raising [a challenge to the Court’s claim construction] on appeal.” Memorandum (Entry of Judgment) at 2. Plaintiff’s language quoted the Court’s constructions, noting that the accused products did not infringe “because they lack a ‘means for draining stored charge from said charge storage means in response to an element resetting signal,’ a ‘means for randomly accessing said image elements,’ a ‘gain control element interposed between said photoresponsive element and said storage element,’ or a ‘charge drain.’” Id. at 2. The Court pointed out that plaintiff’s proposed language had no basis in the record. Id. However, it found no reason not to enter judgment in defendants’ favor, and therefore entered judgment with revised language that did not include the above quotes, but instead stated that “under this Court’s Claim Construction Opinion and Order (D.I. 78), L-3 cannot prove that the Accused Products satisfy all elements of the Conceded Claims.” Final Judgement at 2.
Judge Richard G. Andrews recently ruled on post-trial motions following a five day jury trial between two competitors in the WAN optimization market. Riverbed Technology, Inc. v. Silver Peak Systems, Inc., C.A. No. 11-484-RGA (D. Del. Sept. 12, 2014). After the jury returned a verdict in favor of Silver Peak on its counterclaims for infringement, Riverbed moved for judgment as a matter of law of no indirect infringement. Judge Andrews explained that although there was no “smoking gun” demonstrating that Riverbed possessed the knowledge required for a finding of indirect infringement, the jury’s finding that the company more likely than not had the requisite knowledge was supported by the circumstantial evidence at trial. See id. at 7-8. The Court also found that the circumstantial evidence at trial of customers’ direct use of the infringing functionality was “just barely sufficient to convince the Court not to disturb the jury’s verdict.” Id. at 8-12. Judge Andrews explained that “[w]hen viewed as a whole, Silver Peak offered sufficient circumstantial evidence to permit a jury to reasonably conclude that Riverbed customers used the infringing functionality in the United States. Silver Peak provided the jury with evidence of Riverbed’s high sales volume, numerous Riverbed documents describing the benefits of [the infringing functionality], how to use [it], and instructing customers on how to test [it], as well as blog posts on Riverbed’s U.S. support forum from users who used [it.]” Id. at 12. The Court denied Silver Peak’s motion for a permanent injunction, however, finding that Silver Peak failed to establish a likelihood of irreparable harm. Id. at 18-24.
Judge Sue L. Robinson recently denied a motion to quash a subpoena served on a non-party supplier of WiFi chipsets on the basis that the non-party “has information relevant to the case and the court has denied defendants’ motion to sever and stay the above litigation as it relates to the WiFi patents undergoing inter partes review.” Intellectual Ventures I LLC, et al. v. Canon Inc., et al., C.A. No. 13-473-SLR (D. Del. Sept. 9, 2014). The Court made itself available to address any concerns about the scope of the subpoena in advance of the deposition.
In a recent Memorandum Order, Judge Richard G. Andrews addressed defendant’s motion for attorney fees under 35 U.S.C. § 285 and the Court’s inherent powers. Parallel Iron LLC v. NetApp Inc., C.A. No. 12-769-RGA (D. Del. Sept. 12, 2014). First, Judge Andrews denied defendant’s motion for attorney’s fees under § 285 because defendant failed to demonstrate it was the prevailing party. As Judge Andrews explained, that “there must be a dispute that was settled in favor of the party seeking to be declared the prevailing party that materially alters the legal relationship between the parties.” Id. at 8. Here, however, the Court did not make any findings “regarding any substantive issue in the case,” did not “construe any terms, resolve a contested motion to dismiss, or resolve any motions for summary judgment.” Id. at 7. Judge Andrews explained that unlike cases where there was no reason given for the motion to dismiss, here it was clear that “the Stipulation of Dismissal was required as a result of a third-party licensing agreement,” which “led to downstream licensures for the users, including [defendant].” Id. at 7-8. Judge Andrews thus reaffirmed the principle that “it cannot be the case that a party ‘can benefit from a bona fide license agreement, obtained after the litigation began, and claim to be the prevailing party, without a single substantial court decision that favors that party.’” Id.
Judge Andrews did, however, grant attorney fees under the Court’s inherent powers to do so. As Judge Andrews explained, plaintiff had accused defendant’s products “by reference to their implementation of the pNFS standard” in its complaint and three sets of Paragraph 4(a) disclosures. Id. at 10. Over thirteen months after filing its complaint, plaintiff essentially withdrew its intention of accusing products implementing the pNFS standard of infringement. Id. at 10-11. The Court ordered plaintiff “to submit all materials that it had gathered or created during its pre-suit investigation related to this issue.” Id. at 11. After conducting an in camera review of a subset of documents specified by plaintiff, the Court determined that plaintiff initiated the “suit without a good-faith belief that the accused instrumentalities implemented pNFS in an infringing manner,” and therefore awarded attorney fees. Id. Judge Andrews further ordered supplemental briefing “to address the amount of fees appropriate in this case.” Id. at 16.
Judge Richard G. Andrews recently addressed defendants’ motion for judgment on the pleadings, which provided several reasons that plaintiffs’ Third Amended Complaint failed to sufficiently plead indirect infringement. HSM Portfolio LLC v. Fujitsu Ltd., C.A. No. 11-770-RGA (D. Del. Sept. 9, 2014).
Defendants argued that plaintiffs cannot establish contributory infringement mainly because the “accused semiconductor chips are not components especially designed for an infringing product because they are accused of direct infringement in and of themselves.” Id. at 2. Judge Andrews agreed, explaining that “[t]he reason that it is necessary to plead that the component has no substantial noninfringing uses is that the component alone does not directly infringe” and therefore plaintiffs’ argument did “not make legal sense.” Id. at 3. Judge Andrews did, however, grant plaintiffs leave to file an amended complaint within ten days to amend their contributory infringement claim. Id. at 3.
Judge Andrews denied the remainder of defendants’ arguments. First, with respect to induced infringement based on domestic sales, defendants essentially argued that “because it might be found liable for direct infringement, based on the same actions of which it is accused of induced infringement, [the Court] should dismiss the claim for induced infringement.” Id. While Judge Andrews agreed that “there would be no additional liability for induced infringement based upon the same acts” of direct infringement, defendants’ “judicial economy” argument was not a sufficient “failure to state claim” argument. Id. Second, with respect to induced infringement based on foreign sales, Judge Andrews found that defendants “conflate[d] the standard for pleadings with that for summary judgment,” finding that plaintiff was only required to “set forth a basis for the court to make a ‘reasonable inference’” that defendants “encouraged the importation of the accused products in the United States by third parties.” Id. at 3-4. Third, Judge Andrews disagreed with defendants’ argument that all the inducement claims fail because plaintiffs failed to plead specific intent. Judge Andrews explained that plaintiffs alleged acts such as “creating advertisements, creating established distribution channels, manufacturing the products in accordance with U.S. law, distributing manuals, and providing technical support,” which “all evidence specific intent.” Id. at 4.
In Chalumeau Power Systems LLC v. Alcatel-Lucent, et al., C.A. No. 11-1175-RGA (D. Del. Sept. 12, 2014), Judge Richard G. Andrews recently determined that defendants were entitled to attorneys’ fees and costs under Section 285. Plaintiff had dismissed its complaint, citing a change in “the economics of the case” as a result of defendants’ new licensing defense; defendants then filed the instant motion. Id. at 1.
Applying the Supreme Court’s standard for Section 285 awards, see Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014), the Court first concluded that plaintiff’s infringement theories and claim construction positions were frivolous. See id. at 2-6. Once the Court requested documentary evidence of plaintiff’s pre-suit investigation, it became clear that plaintiff had not “vetted” every accused patent family before filing suit, as it had previously claimed to have done. Id. at 3. The Court observed that the single, 5-page document produced in camera grouped claim limitations too broadly, “encompassing multiple disputed terms in each group.” Id. at 4. The Court explained that “[a] pre-suit investigation which lumps so many limitations together does not demonstrate an adequate investigation into whether the accused device infringes each and every claim limitation.” Id. The Court then analyzed plaintiff’s claim construction positions, and found them similarly frivolous. See id. at 4-6.
The Court also found that plaintiff’s litigation conduct warranted a finding that the case was exceptional. Plaintiff had opposed defendants’ motion to add a license defense as futile, even though plaintiff now claimed that it was this defense that had caused it to drop the suit. Id. at 6-7. The Court concluded that plaintiff’s litigation strategy was to “extort a settlement fee” as it “st[rung] out the case in the hopes that [defendant] would incur fees while [plaintiff] would not. [Plaintiff] did not even disclose an expert until” days before the close of fact discovery.” Id. at 7.