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Judge Richard G. Andrews recently denied, in large part, a motion to redact the transcript of a pretrial conference.  Delaware Display Group LLC v. LG Elecs. Inc., C.A. No. 13-2109 (D. Del. Dec. 22, 2016).  The Court explained that “[s]imply because the parties have designated the information as ‘restricted – attorneys’ eyes only,’ or with some lesser designation under a protective order is almost irrelevant to the present issue, that is, whether the information should be redacted from a judicial transcript.”  That is because once the information is “disclosed in a judicial proceeding, it is in the public interest to be able to understand the proceedings before a judge, and redaction of the transcript hinders that public interest.”  The Court acknowledged that the interest in preserving confidentiality of commercially sensitive information will at time justify redacting such information from the public record.  In this case, Judge Andrews found no justification to redact references in the transcript to “license agreements, settlement agreements, and indemnification agreements . . . with little specificity other than the identification of the parties to the agreements.”  The Court did, however, find that reference to “two numbers” was appropriate.

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Judge Sue L. Robinson recently issued a summary judgment opinion addressing a host of non-infringement and invalidity arguments. Among the arguments raised was a motion for summary judgment to “prevent [the defendant, Toshiba] from asserting invalidity challenges against the ‘819 patent, because Toshiba was the petitioner in an inter partes review (‘IPR’) in which the Patent Trial and Appeal Board (‘PTAB’) found several claims of the ‘819 patent invalid, including asserted claims 17 and 19.” Intellectual Ventures I LLC, et al. v. Toshiba Corp., et al., C.A. No. 13-453-SLR, Memo. Op. at 25-27 (D. Del. Dec. 19, 2016). Plaintiff, IV, argued that one obviousness combination raised in the IPR was also still at issue in the litigation and that Toshiba was therefore estopped from pursuing it in the litigation. Judge Robinson agreed as to that combination. Id.

For another invalidity theory, however, IV argued that the combination of prior art was “based on publicly available patents and printed publications and could have been raised in the inter partes review of the ‘819 patent.” Judge Robinson found that Toshiba was not estopped form maintaining this theory because “Section 315(e)(2) of Title 35 of the United States Code provides in relevant part that ‘[t]he petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a) . . . may not assert[] in a civil action arising in whole or in part under section 1338 of title 28 . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.’ Although . . . Toshiba certainly couldhave raised these additional obviousness grounds based on public documents at the outset of their IPR petition, the Federal Circuit has construed the above language quite literally[, finding that] . . . because the PTAB rejected a certain invalidity ground proposed by the IPR petitioner, no IPR was instituted on that ground and, therefore, petitioner ‘did not raise – nor could it have reasonably raised – the [rejected] ground during the IPR.’” Id. (emphasis in original) (citing Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293 (Fed. Cir. 2016)) (internal citations omitted). Judge Robinson concluded that “[a]lthough extending the above logic to prior art references that were never presented to the PTAB at all (despite their public nature) confounds the very purpose of this parallel administrative proceeding, the court cannot divine a reasoned way around the Federal Circuit’s interpretation.” Id.

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In a recent Memorandum Opinion, Judge Richard G. Andrews affirmed Magistrate Judge Thynge’s September 27, 2016 oral order denying plaintiff’s motion to impose discovery sanctions for defendant’s “failure to produce IDV data.” AVM Technologies, LLC v. Intel Corporation, C.A. No. 15-33-RGA-MPT (D. Del. Dec. 19, 2016). Specifically, Judge Thynge denied plaintiff’s request that (1) defendant be precluded from “making any arguments that its timing analyses and any simulations that are based on UPF [pre-fabrication] models do not accurately reflect the manufactured products”; and (2) “a negative inference be drawn in Plaintiff’s favor due to Defendant’s failure to produce the IDV data.” Id. at 1.

Plaintiff argued that Judge Thynge’s ruling was incorrect under the Pennypack factors because plaintiff was prejudiced by defendant’s failure to produce the IDV data. Id. at 2. Specifically, plaintiff argued that that the IDV data is the “‘only evidence that definitively addresses’ Defendant’s argument that its pre-fabrication modeling results are not correlated to the manufactured products.” Id. Judge Andrews disagreed, noting that Judge Thynge found that defendant “produced data responsive to Plaintiff’s discovery request and that data provides the information Plaintiff needs.” Id. Accordingly, “there is no prejudice to Plaintiff for Defendant’s failure to produce the IDV data, which does not provide the information Plaintiff needs for verification of the modeling results.” Id. Because plaintiff failed to provide evidence that Judge Thynge’s factual findings were clearly erroneous, Judge Andrews affirmed Judge Thynge’s order. Id.

AVM Technologies, LLC v. Intel Corporation, C.A. No. 15-33-RGA-MPT (D. Del. Dec. 19, 2016)

 

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Judge Sue L. Robinson recently granted a plaintiff’s motion for leave to file a second amended complaint alleging induced infringement.  Takeda Pharmaceuticals U.S.A., Inc. v. West-Ward Pharmaceutical Corp., et al., C.A. No. 14-1268-SLR (D. Del. Dec. 14, 2016).  The second amended complaint alleged that the defendant induced infringement of the plaintiff’s patents through its sales personnel who encouraged healthcare providers to prescribe the accused product for an off-label infringing use.  Although the second amended complaint provided “no details concerning any of these conversations – no particulars concerning which providers told which [plaintiff] representatives of statements by which [defendant] representatives, or when these conversations supposedly occurred[,]” id. at 3-4 (emphasis in original), the Court found that the second amended complaint plausibly gave rise to a claim for inducement, and fairly put the defendant on notice of the claims against it.  The Court’s ruling was made based on the Third Circuit’s pleading standard that: “[s]o long as a plaintiff has not used ‘boilerplate and conclusory allegations,’ and has accompanied its legal theory with ‘factual allegations that make [its] theoretically viable claim plausible,’ . . . ‘pleading upon information and belief [is] permissible where it can be shown that the requisite factual information is peculiarly within the defendant’s knowledge or control.'”  Id. at 4 (quoting McDermott v. Clondalkin Grp., Inc., 2016 WL 2893844, at *4 (3d Cir. May 18, 2016)).

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In DNA Genotek Inc. v. Spectrum DNA, et al., C.A. No. 15-661-SLR (D. Del. Dec. 14, 2016), Judge Sue L. Robinson granted Defendants’ renewed motion to dismiss due to lack of personal jurisdiction, having ordered jurisdictional discovery when denying the first motion.

Defendants manufactured a saliva collection device for a third-party DNA testing service (“Ancestry”) that had sold some kits to Delaware customers. Various agreements between Defendants and Ancestry provided that Ancestry owned the intellectual property rights of the accused product, Ancestry was obligated to indemnify Defendants for patent infringement, Defendants were required to manufacture their product in accordance with the third party’s specifications, and Defendants paid Ancestry a fixed price per kit that they could resell to third parties, but Defendants had not resold such kits into Delaware.

Under these facts, the Court concluded that there was no personal jurisdiction under Delaware’s long-arm statute under a theory of dual jurisdiction. The Court distinguished other Delaware case law where dual jurisdiction was found, where a “defendant sold a product directly to national resellers who added nothing significant to the product before selling it through well-established sales channels, often with physical locations in Delaware, to consumers or end-users.” Id. at 7. Here, instead, Defendants had “no control over what happens to the accused products once shipped to Ancestry” where Defendants’ device was made “per Ancestry’s specifications, using intellectual property and tooling owned by Ancestry, in a quantity sufficient to meet Ancestry’s estimated product forecast, and then [sold] . . . exclusively to Ancestry. . . . If [Defendants want] to sell the accused products to someone other than Ancestry, it must first purchase the accused products it manufactures for Ancestry from Ancestry.” Id. at 7-8. There were no other facts present that exhibited intent to serve the Delaware market “based on national distribution” as there had been in other Delaware cases finding jurisdiction. See id. at 8 n.7. Furthermore, “[t]he facts supporting intent are even more attenuated if the court takes into account that there is no evidence the accused product has reached Delaware except as a part of Ancestry’s testing service, making [Defendants’] role analogous to that of a component manufacturer. . . . in cases finding dual jurisdiction over a component manufacturer, something more than the mere presence of millions of the accused products in the United States is needed to demonstrate intent.” Id. at 9.

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Magistrate Judge Christopher J. Burke recently issued a Report and Recommendation recommending denial of defendant Glenmark’s motion for leave to amend its Answer to plead equitable estoppel and laches.  GlaxoSmithKline LLC and Glenmark Pharmaceuticals Inc., USA, No. 14-877-LPS-CJB (D. Del. Dec. 15, 2016).  Glenmark filed its motion about eight months after the deadline to amend pleadings set forth in the Scheduling Order.  Id. at 2.  Judge Burke concluded that Glenmark did not have good cause to amend after this deadline because “Glenmark’s proposed defenses are based on facts that have existed (and have been known to the parties) for quite some time.”  Id.at 4-5.  Judge Burke further noted that:

even if Glenmark’s failure to add these defenses by the February 15, 2016 deadline did not demonstrate a lack of diligence, its failure to do so over the next eight months surely does. In the interval, fact discovery closed, expert discovery began in earnest and the case moved much closer to trial. If new defenses were to be litigated in this matter, at a minimum, Glenmark should have moved to add them well before the filing of the instant motion.

Id. at 5-6.  Glenmark argued that good cause existed because it retained new counsel in September 2016, but Judge Burke disagreed noting that “new counsel’s entry into a case does not serve as a magic wand that enables the party to conjure up a showing of good cause.”  Id. at 6.

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In a recent Opinion, Judge Noel L. Hillman, sitting by designation, affirmed the May 20, 2016 Order of Magistrate Judge Joel Schneider, in which he sanctioned defendant for “belatedly producing one particular email and other documents.” Evonik Degussa GmbH v. Materia, Inc., C.A. No. 08-636-NLH-JS (D. Del. Dec. 14, 2016). Judge Schneider found that defendant “should have, on more than one occasion, reviewed its production for completeness, and did not.” Id. at 3. Accordingly, Judge Schneider awarded plaintiff “attorneys fees it incurred due to the late production and allowed [plaintiff] additional discovery. Id.

Judge Schneider, however, rejected plaintiff’s assertions that defendant or its attorneys “acted in faith.” Id. at 2. Plaintiff contested Judge Schneider’s finding regarding the “serious of [defendant’s failure]” to procedure certain documents, and argued that the sanction Judge Schneider “imposed was too lenient.” Id. Specifically, plaintiff argued that Judge Schneider should have ruled that: (a) “the belatedly produced documents could not be used by [defendant] at trial,” and (b) plaintiff “is entitled to an adverse inference jury instruction.” Id. at 3.

In support of its argument, plaintiff asserted that “Judge Schneider ‘converted” [plaintiff’s] spoliation motion into a discovery motion under Rule 37, and then [asserted] that Rule 37 requires– as opposed to permits– the Court to preclude [defendant] from relying on the belatedly-produced documents at trial.” Id. at 3-4. Judge Hillman disagreed, explaining that Judge Schneider rejected plaintiff’s “spoliation argument because spoliation requires a finding of bad faith, and then very clearly imposed sanctions pursuant to Fed. R. Civ. P. 26, not Fed. R. Civ. P. 37.” Id. at 4. Plaintiff also reasserted the arguments it presented to Judge Schneider that defendant’s conduct “evidences bad faith.” Id. Judge Hillman found that “Judge Schneider addressed this argument, considered all of the record evidence, and concluded that there was insufficient evidence to support [plaintiff’s] ‘conspiracy theory.’” Id. Judge Hillman found that Judge Schneider’s findings were not clearly erroneous in this regard, and affirmed the court’s Order regarding sanctions.

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Magistrate Judge Christopher Burke recently considered a motion to dismiss this patent-infringement action for lack of subject matter jurisdiction, granting-in-part as to one of plaintiff Adidas’ counts, but denying-in-part as to other portions of the complaint. In an earlier action, Unequal Technologies sued Reebok, which is wholly owned by Adidas AG. The earlier suit ended when Unequal provided two different versions of a covenant not to sue that extended only to Reebok products. Adidas then filed the instant action, seeking a declaration that the covenant is binding and applicable to Adidas products as well and that Adidas does not infringe the three patents-in-suit covered by the covenant. Declaratory judgment defendant Unequal responded to the complaint with a motion to dismiss for lack of subject matter jurisdiction. Adidas AG, et al. v. Unequal Techs. Co., et al., C.A. No. 16-52-LPS-CJB, Report and Recommendation at 1-6 (D. Del. Nov. 23, 2016).

Judge Burke first found that the second-issued of the two covenants not to sue had superseded the first-issued and was, therefore, the only covenant in effect. In reaching this conclusion, Judge Burke noted that the record “overwhelmingly indicates that the First Covenant was not operative, because even after it was sent to Reebok, the parties were still negotiating over the final form that the covenant would take.” Thus, Judge Burke found, there was no plausible claim that the first covenant was enforceable, and the Court need not even address whether the first covenant’s terms covered Adidas products. This portion of Adidas’ complaint was, therefore, dismissed. Id. at 7-16.

Based on the same prior suit against Reebok and resulting covenant not to sue, Adidas claimed that there was declaratory judgment jurisdiction for its claims of non-infringement. As Judge Burke explained in assessing jurisdiction, “The mere fact that Defendants had ‘filed infringement suits against other parties for other products[,]’ does not, ‘in the absence of any act directed toward [Plaintiffs], meet the minimum standard’ for declaratory judgment jurisdiction. This is so even where, as here, a defendant had previously sued one of a plaintiff’s subsidiaries. Plaintiffs’ Complaint, however, goes beyond simply alleging that Defendants had previously sued Reebok” because the complaint also alleged that Unequal had sought discovery into Adidas products. Id. at 17 (citations omitted). Thus, “it was then reasonable for [Adidas} to think that [Unequal] believed that such products infringed the patents-in-suit. Indeed, in the context of a patent infringement case, that is what the term ‘Accused Products’ suggests. As a result, it seems strange to ask whether, at the time of the instant suit, there was a ‘substantial controversy’ brought on by [Unequal] about whether [Adidas’] products at issue infringed the patents-in-suit. [Unequal] had, after all, already pretty clearly stated that they did.” Id. at 18.

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Chief Judge Leonard P. Stark recently considered plaintiff’s motion to vacate summary judgment of no willful infringement in light of the U.S. Supreme Court’s decision Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016).  Greatbatch Ltd. v. AVX Corporation, No. 13-723-LPS (D. Del. Dec. 13, 2016).  A jury trial was held in January 2016 after which the jury found in plaintiff’s favor and awarded $37.5 million in damages.  Id. at 1-2.  Prior to trial Judge Stark granted defendants’ motion for summary judgment of no willful infringement relying on the objective prong of the Federal Circuit’s test for willful infringement articulated in In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007).  Subsequently, the Supreme Court issued Halo, abrogating the objective prong of SeagateId. at 2.  In denying plaintiff’s motion to vacate, Judge Stark noted that Halo made it “necessary to reconsider the Willfulness Order, [but did not], in this case, require vacating the prior determination that Greatbatch is unable to prove willfulness.”  Id.  In particular, the record showed that while defendant had pre-suit knowledge of the patents-in-suit, defendant made “good faith efforts to avoid infringement of any valid patents.”  Id. at 7 (emphasis in original).  Further, plaintiff did not “point to evidence from which a reasonable jury could find any infringement of these patents by A VX [that] was ‘egregious,’ ‘deliberate,’ atypical, or otherwise characteristic of the type of infringement that could support a finding of willful infringement.”  Id.

Greatbatch Ltd. v. AVX Corporation, No. 13-723 (D. Del. Dec. 13, 2016)

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In a recent order, Judge Richard G. Andrews ruled on various motions in limine. Delaware Display Group LLC v. LG Electronics Inc., C.A. No. 13-2109-RGA (D. Del. Dec. 1, 2016). Notably, plaintiffs sought to prevent defendants from providing “any comparison between the accused products and alleged prior art.” Id. at 2. Judge Andrews granted and denied plaintiffs’ request in part, without prejudice to timely object to specific testimony at trial. Id.

As Judge Andrews explained, the parties agreed that “‘practicing the prior art’ is not a defense to infringement” and therefore defendants “may not make that argument.” Id. at 2-3. Defendants cited three cases to support their position that they may “argue that Plaintiffs’ patents are invalid because they would prohibit [Defendants] from practicing the prior art.” Id. at 3. Judge Andrew found that “[t]o the extent Defendants are saying, the patents are no different than the prior art, of course, they can argue that.” Id. On the other hand, “[t]o the extent they are saying something more, such as, Defendants’ products practice the prior art, they have a problem.” Id. Judge Andrews noted that the Federal Circuit decision defendants cited did not help their position, and both district court decisions “agree that Defendants cannot compare an accused product to the prior art for purposes of establishing invalidity or non-infringement.” Id.

Judge Andrews granted and denied other motions in limine, some in part, and postponed ruling on another.

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