In a recent memorandum opinion, Judge Leonard P. Stark granted a motion for summary judgment that pre-2004 versions of Microsoft Windows do not infringe various patents asserted by the plaintiff. St. Clair Intellectual Property Consultants, Inc. v. Acer, Inc., et al., Consol. C.A. No. 09-354-LPS (D. Del. Mar. 29, 2013). The plaintiff had neither responded to interrogatories relating to pre-2004 Windows, nor provided the defendants with contentions on how pre-2004 Windows infringe. Id. at 4. Further, the plaintiff provided no competing expert testimony in response to the defendants’ expert, who opined that pre-2004 versions of Windows do not infringe. Id. at 5. Because the plaintiff carried the burden of proving infringement, and it “failed to present any evidence of infringement related to pre-2004 versions of Windows[,]” the Court granted the motion for summary judgment of non-infringement, and found further that pre-2004 versions of Windows could appropriately be considered non-infringing alternatives. Id. at 5-6 (emphasis in original).
Judge Robinson recently issued a discovery order in the ongoing patent infringement dispute between Mobilemedia Ideas and Apple. Plaintiff Mobilemedia Ideas filed a request for “‘discovery necessary to allow the parties to be prepared to try the damages case’ as soon as possible after the court’s decision on the parties’ post-trial motions.” Judge Robinson denied the request, stating “[t]he court is not inclined to change its standard practice of bifurcating damages until the issue of liability has been decided by the Federal Circuit, until such time (if ever) the Federal Circuit requires the court to abandon said practice.” See Mobilemedia Ideas LLC v. Apple Inc., C.A. No. 10-258-SLR, Order at 1 (D. Del. Apr. 2, 2013).
Recently, Judge Leonard P. Stark issued decisions with respect to defendants’ motion to dismiss plaintiff’s claims of willful patent infringement pursuant to Federal Rules of Civil Procedure 12(b)(6) and 41(a)(1). St. Clair Intellectual Property Consultants, Inc. v. Samsung Electronics Co. Ltd. et al., C.A. No. 12-69-LPS (D. Del. Mar. 29, 2013). First, with respect to the briefing on the matter, Judge Stark granted plaintiff’s motion to file a sur-reply in opposition to defendants’ motion to dismiss. (D.I. 21.). Judge Stark noted that a court “may grant leave to file a sur-reply if it responds to new evidence, facts, or arguments.” Id. at 2. Defendants’ reply in support of its motion to dismiss, as Judge Stark explained, contained “newly-cited evidence,” including a complaint filed in the District of Delaware, a previously uncited Eighth Circuit case, and details regarding an entity from a prior, related lawsuit. Id. Granting plaintiff’s motion, Judge Stark explained that plaintiff’s sur-reply “will allow the Court to more fully and fairly evaluate Defendants’ pending motion to dismiss.” Id. at 3. Moreover, “Plaintiff’s sur-reply is relatively short, challenges Defendant’s interpretation and application of [the Eighth Circuit case], and explains Plaintiff’s view of the newly presented evidence.” Id. Judge Stark thus considered the sur-reply in reaching his decision on the merits of defendants’ motion. See id.
Judge Stark ultimately denied defendants’ motion to dismiss. (D.I. 22.). Defendants argued that plaintiff failed to state a claim because its claim was barred by Rule 41(a)(1). See id. at 4. Under Rule 41(a)(1)(B), “[i]f the plaintiff files a second notice of dismissal pursuant to Rule 41(a)(1), the Court must dismiss an action based on or including the same claim with prejudice.” Id. at 3. In December 2011, the current plaintiff filed a complaint against Samsung Electronics USA (“SE USA”) claiming SE USA willfully infringed plaintiff’s six patents as the result of sales and distribution of products containing the Android operating system. Id. at 1. In January 2012, that suit was voluntarily dismissed. The same day it dismissed that suit, plaintiff filed a second complaint against Samsung Electronics America, Inc. (“SEA”) and Samsung Telecommunications America, LLC (“STA”) for willful infringement of the same six patents as the result of the same type of sales and distribution. Id. Later that month, that second suit was voluntarily dismissed. Id. On the same day of the second dismissal, plaintiff filed a third suit—the suit at hand—against Samsung Electronics Co. Ltd. (“SEC”), SEA, and STA. Id. at 1-2. Once again, the plaintiff has sued for willful infringement of the same six patents based on the same type of sales and distribution. Id. at 2.
The issue before the Court, therefore, was whether the first two dismissals mandated dismissal of the third suit. Plaintiff first argued that the “two dismissal rule” was inapplicable because in the first suit SE USA was a “defunct corporation which could not sue or be sued.” Id. at 4. Judge Stark rejected this argument, explaining that “Federal Rule of Civil Procedure 3 states that an action commences upon the filing of the complaint.” Id. at 5. However, as Judge Stark explained, in order for the “two dismissal rule” to apply, the defendants must share some close relationship: they must be “the same, substantially the same, or in privity with each other,” or they must be “sufficiently interrelated so that they share the same legal rights.” Id. at 5-6. Judge Stark found that defendants failed to show by a preponderance of the evidence that such a close relationship existed. Id. at 7. Defendants had presented some evidence, particularly that “SE USA’s incorporator shares the same address as Samsung’s regional headquarters,” and that the incorporator “served as general counsel of SEA.” Id. at 6-7. Judge Stark found, however, that this relationship between SE USA and the subsequent defendants “is only through a single person” and “establishes no more than a tenuous relationship.” Id. at 7. Moreover, defendants failed to demonstrate “SE USA had the same, similar, or any legal interest in the subject matter of the three litigations, i.e., the Android operating system.” Id. at 7. Judge Stark therefore denied defendants’ motion to dismiss. Id. at 8.
In a recent order, Judge Leonard P. Stark denied both (1) defendant’s motion to dismiss plaintiff’s claims of direct and indirect patent infringement for failure to state a claim and (2) plaintiff’s motion to dismiss defendant’s declaratory judgments of non-infringement and invalidity for failure to state a claim. Cronos Technologies LLC v. Vitamin Shoppe, Inc., C.A. No. 12-444-LPS (D. Del. Mar. 29, 2013). Although plaintiff amended its complaint and defendant amended its answer subsequent to the filing of the motions to dismiss, Judge Stark considered the motions to the extent they were not rendered moot. See id. at 2. Denying defendant’s motion for failure to state a claim, Judge Stark found that plaintiff’s direct infringement claim “satisfi[ed] the requirements of Form 18,” and that plaintiff’s complaint provided facts with respect to “knowledge, intent and direct infringement” to sufficiently plead induced infringement. Id. Defendant argued that plaintiff’s asserted method claims should be dismissed because plaintiff did not allege that a single entity performed all of the elements. Judge Stark found, however, that plaintiff’s patent included “both apparatus and method claims,” and that plaintiff was “not required to identify any specific asserted claim in the Amended Complaint.” Id. Turning to plaintiff’s motion to dismiss, Judge Stark first found that defendant “specifically identif[ied] non-infringing products” in its amended complaint and therefore sufficiently pled its non-infringement declaratory judgment. Id. Moreover, Judge Stark found that defendant sufficiently pled its declaratory judgment for invalidity, including “specific references to prior art, statutes, and legal principles” in its amended complaint. Id.
In a recent memorandum opinion, Judge Sue Robinson denied patent infringement defendants’ motion to transfer venue but granted the defendants’ motion to dismiss claims of indirect infringement. See Stephenson v. Game Show Network, LLC, C.A. No. 12-614-SLR, Memorandum Opinion at 1 (D. Del. Mar. 27, 2013).
Her decision on the motion to transfer was consistent with her practice in previous cases, including one relied on here, Helicos Biosciences Corp. v. Illumina, Inc., 858 F. Supp. 2d 367 (D. Del. 2012). Judge Robinson observed that a defendant’s state of incorporation—here Delaware—has always been a “predictable, legitimate venue for bringing suit” and that a “plaintiff’s choice of venue should not be lightly disturbed.” Id. at 2 (citations omitted). Accordingly, after considering all of the Third Circuit’s Jumara transfer factors, she found that the defendants had not “tipped the scales of justice in favor of transfer.” Id. at 11.
On the motion to dismiss, Judge Robinson found that a mere corporate relationship between two defendants was not sufficient evidence that one defendant intended the other to infringe and knew that such acts would constitute infringement. Such an allegation of contributory and induced infringement, she found, was insufficient under Rule 8 and should be dismissed. Id. at 12-13.
Judge Richard Andrews recently granted a patent infringement defendant’s motion for summary judgment of no damages and excluded untimely and prejudicial damages testimony proffered by the plaintiff. See AVM Techs., LLC v. Intel Corp., C.A. No. 10-610-RGA, Order at 1-4 (D. Del. Mar. 29, 2013). The proffered testimony in question was the fourth damages theory offered by the plaintiff since the defendant had moved for summary judgment of no damages. It was also filed almost a month after the initially-scheduled trial date. The witness in question had not been disclosed until recently and the defendant did not have the opportunity to seek discovery into the witness’s theory or develop a response. Id. at 2.
While the plaintiff argued that any prejudice could be cured by allowing additional discovery, Judge Andrews found that this offer “ignore[d] that the only reason trial was not held on its scheduled date was that [plaintiff] had no evidence of damages [so] the trial was cancelled pursuant to [a] Joint Proposed Final Judgment Order.” Accordingly, Just Andrews explained, the plaintiff “should not be put in a better position now, having offered yet another damages theory after trial initially was set to begin.” Id. at 2-3. Additionally, the proffered testimony was “unimportant in that it is insufficient to support a provable damages theory.” And although the exclusion of the proffered testimony would leave the plaintiff with no damages evidence, “this factor is at most neutral, particularly because this situation is of [plaintiff’s] own making.” Id. at 3. Accordingly, Judge Andrews excluded the proffered testimony as untimely and prejudicial, and because plaintiff had “no evidence with which to prove damages,” granted summary judgment of no damages for the defendant. Id. at 3-4.
Judge Sue L. Robinson recently denied a defendant’s motion to dismiss a first-filed declaratory judgment action or, in the alternative, to transfer it to the Northern District of New York where a second-filed infringement action was pending. Trustco Bank v. Automated Transactions LLC, Civ. No. 12-613-SLR (D. Del. Mar. 27, 2013). After the parties’ licensing negotiations broke down, the plaintiff filed a declaratory judgment action in the District of Delaware, and within about three hours the defendant filed its own affirmative infringement action in the Northern District of New York. Id. at 2. The defendant then moved to dismiss the Delaware action, or in the alternative to transfer it to New York, and the plaintiff moved to enjoin the New York action. Id. at 1.
Judge Robinson explained that “[t]he Federal Circuit prefers ‘to apply in patent cases the general rule whereby the forum of the first-filed case is favored, unless considerations of judicial and litigant economy and the just and effective disposition of disputes, require otherwise.’” Id. at 3 (quoting Genentech, Inc. v. Eli Lilly and Co., 988 F.2d 931, 937 (Fed. Cir. 1993), rev’d on other grounds, Wilton v. Seven Falls Co., 515 U.S. 277 (1995). To that end, the Court explained that the first-to-file rule should only be departed from in situations involving “bad faith, forum shopping, when the second-filed action has developed further than the initial suit, and when the first-filing party instituted suit in one forum in anticipation of the opposing party’s imminent suit in another, less favorable, forum.” Id. at 4.
The defendant first argued that the plaintiff’s bad faith negotiation tactics (alleged delay tactics intended to provide additional time to draft a declaratory judgment complaint) justified departing from the first-to-file rule. The Court rejected that argument, explaining that “[p]reparations for litigation during negotiations are commonplace and the court concludes that there is no evidence of bad faith.” Id. at 7. Further, the Court found that the plaintiff had justifiable reasons for choosing to file its declaratory judgment action in Delaware (including the defendant’s status as a Delaware entity with a history of litigating in Delaware), such that forum shopping was not an issue. Id. Finally, the Court did not view transferring the case to New York as compellingly favorable from a judicial economy standpoint given that the New York action was stayed pending resolution of the motion before the Court, and a related New York action was subject to a motion to transfer to the District of Delaware. Id. at 8.
The Court next considered whether it should exercise its discretion to transfer the action to New York under 28 U.S.C. § 1404(a), upon a consideration of the Jumara factors, and found that transfer was not warranted based on the information provided to the Court. Id. at 8-10. The Court explained that the plaintiff did not satisfy its “burden of overcoming the first-filed rule” or its “burden of persuading the court, by a preponderance of the evidence, that the Jumara factors warrant transfer.” Id. at 11. As a result, the Court denied the defendant’s motion, and granted the plaintiff’s motion to enjoin the New York action. Id.
Judge Leonard P. Stark recently denied a plaintiff’s motion to dismiss counterclaims for direct, indirect, and willful infringement. Fairchild Semiconductor Corp. v. Power Integrations, Inc., C.A. No. 12-540-LPS (D. Del. Mar. 29, 2013). The Court first considered the plaintiff’s argument that an allegation of infringement by “power supply controllers that include a ‘soft start’ feature and circuit covered by one or more claims of the ’366 patent” failed to sufficiently identify the accused products. Id. at 3-4. Judge Stark explained that “this Court has repeatedly declined to dismiss pleadings that accuse general categories of products[,]” because that is all Form 18 requires. Id. at 3-4. With respect to the specific allegation at issue, the Court explained that the defendant “has expressly identified a general category of products, power supply controllers, and further restricted that category to controllers that include certain features and circuits.” Id. at 4.
The Court next considered whether the defendant sufficiently pled “that [the plaintiff] had knowledge of the patents-in-suit prior to [the defendant] filing its counterclaims[.]” Id. at 7. The Court explained that “service of a complaint constitute[s] sufficient notice for an inducement claim based on post-filing conduct.” Id. at 6. Accordingly, the motion was denied to the extent it targeted post-filing conduct by the plaintiff. Id. The Court reached the same result with respect to the plaintiff’s argument that “specific intent to induce infringement” was not adequately pled, explaining that the defendant “satisfied the pleading requirements for induced infringement [of all asserted patents] based on post-filing conduct.” Id. at 8. The Court noted that the allegations were more specific with respect to the ’366 patent, and rejected the plaintiff’s suggestion that those allegations were insufficient because they were pled “on information and belief,” explaining “[v]iewing a complaint in the ‘light most favorable to plaintiff’ may ‘include facts alleged on information and belief.’” Id. at 8 n.9 (quoting Frederick Hart & Co. v. Recordgraph Corp., 169 F.2d 580, 581 (3d Cir. 1948) (internal quotation marks omitted)). Finally, the Court rejected the plaintiff’s suggestion that the inducement counterclaims should be dismissed for failure to identify specifically a direct infringer, explaining “a plaintiff need not identify a specific direct infringer if it pleads facts sufficient to allow an inference that at least one direct infringer exists.” Id. at 6 (quoting In re Bill of Lading, 681 F.3d 1323, 1336 (Fed. Cir. 2012)).
Judge Stark also denied the plaintiff’s alternative request that the defendant be ordered to provide a more definite statement under Rule 12(e), explaining “[t]he Court has determined that [the defendant’s] counterclaims provide sufficient notice of the infringement allegations [and] are not ‘so vague and ambiguous’ that [the plaintiff] cannot frame a responsive pleading.” Id. at 9-10.
Judge Stark recently considered the parties’ post-trial motions following a jury trial in the long-standing dispute between Power Integrations and Fairchild Semiconductor. Power Integrations, Inc. v. Fairchild Semiconductor International Inc., et al., C.A. No. 08-309-LPS (D. Del. Mar. 29, 2013). The case involved infringement allegations by both the plaintiff and the defendants involving a total of six patents related to DC output power supplies or power converters. Regarding Power‘s U.S. Patent No. 6,249,876, the jury found that Fairchild infringed, literally and under the doctrine of equivalents, induced infringement and that the asserted claims were valid. Id. at 2. Regarding U.S. Patent No. 6,107,851, “the jury found in favor of Power and against Fairchild with respect to literal infringement, indirect infringement, and validity of the only asserted claim, claim 18.” Id. Regarding the remaining two patents asserted by Power, U.S. Patent Nos. 7,110,270 and 7,834,605, the jury found that the patent’s claims were valid, but not infringed. Id. Regarding the patents asserted by Fairchild, the jury found that Power infringed U.S. Patent No. 7,259,972 under the doctrine of equivalents, that Power did not infringe U.S. Patent No. 7,352,595, and that both patents were valid. Id. (See the verdict form here).
The parties filed various motions for judgment as a matter of law as to invalidity and non-infringement, as well as motions for a new trial. The Court denied all but one post-trial motion. In that motion, Power moved for judgment as a matter of law that Fairchild directly infringed and induced infringement of its ‘605 patent, or for a new trial. Id. at 13. Judge Stark granted Power’s JMOL motion as to direct infringement because “Fairchild admitted that it did ‘not present evidence of a defense with regard to direct infringement.’ In the absence of such evidence, no reasonable jury could have returned a verdict on this issue in Fairchild’s favor.” Id. (internal citation omitted). Judge Stark denied, however, Power’s motion regarding the inducement verdict, which Power argued was “the result of Fairchild’s improper trial tactics[,]” because the Court’s “curative instruction was sufficient to eliminate unfair prejudice.” Id. at 14.
Judge Leonard Stark recently granted a patent infringement defendant’s motion for sanctions for violations of the Court’s scheduling order. Due to the specific facts of the case, however, Judge Stark denied the requested relief of dismissal of the case. Instead, he ordered the plaintiff to pay defendant’s costs in bringing the motion for sanctions and struck the plaintiff’s request for prejudgment interest. See St. Clair Intellectual Prop. Consultants, Inc. v. Motorola Mobility LLC, C.A. No. 11-1305-LPS, Memorandum Opinion at 1 (D. Del. Mar. 29, 2013).
The parties’ dispute stemmed from a motion to stay filed by plaintiff St. Clair during the claim construction process. After filing its motion to stay but before the Court granted that motion, St. Clair failed to provide infringement contentions and failed to file an opening claim construction brief on the dates required for each by the Court’s scheduling order. Defendant Motorola continued to comply with scheduling order deadlines while the motion to stay was pending and brought a motion for sanctions for St. Clair’s omissions, seeking an order dismissing the case or prohibiting St. Clair from supporting its claims of infringement. Id. at 1-2.
Judge Stark considered the factors set forth by the Third Circuit in Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863, 868 (3d Cir. 1984) for determining whether dismissal of a case is an appropriate sanction. Ultimately, he found that the balance of these factors—the extent of the party’s personal responsibility, prejudice to the adversary caused by failure to meet the scheduling order, history of dilatoriness, willfulness or bad faith, effectiveness of sanctions other than dismissal, and meritoriousness of the claim or defense—favored the imposition of sanctions. Id. at 3-8. “By relying on its motion to stay as a purported basis not to participate in litigation St. Clair chose to initiate—and in which it remained subject to a Scheduling Order—St. Clair essentially engaged in improper self-help, acting as if it had already obtained the relief it had at that point merely requested of the Court.” Id. at 6. Nevertheless, Judge Stark found that “less extreme sanctions” than dismissal were warranted, concluding “that imposing fees and costs incurred in bringing this motion for sanctions and striking St. Clair’s requests for prejudgment interest are appropriate sanctions . . . [because] [n]o party may unilaterally rewrite the Court’s Scheduling Order.” Id. at 3-8. Judge Stark also found that “Plaintiff’s citation to Local Rule 16.4 is unavailing [because] [t]hat rule requires the filing of a request for extension of deadlines prior to the expiration of the deadline.” Id. at 6 n.3.
In the process, Judge Stark noted that there was no “valid excuse for not talking and trying to resolve disputes” between the parties related to the joint claim chart, the motion to stay, and the motion for sanctions. “While [the motion for sanctions] is arguably dispositive because the relief sought includes dismissal, it would have been far preferable [for the parties] to have met and conferred. . . . The Court is unconvinced that the parties could not have worked out their conflicts over how the other side was proceeding if only they had made more of an effort to communicate.” Id. at 5-6, 6 n.2.