Judge Sue L. Robinson recently ruled on a motion to stay with respect to defendants’ patent misuse and antitrust counterclaims. Intellectual Ventures I LLC v. Toshiba Corporation, et al., Civ. A. No. 13-453-SLR (D. Del. Mar. 20, 2015). Judge Robinson explained that, in most cases, “patent misuse defenses and antitrust counterclaims are related to, and co-extensive with, the scope of the patent litigation in whcih they are asserted.” Id. at 3. In such cases, it makes sense “to stay consideration of such defenses and counterclaims, as they are based in large measure on the efficacy of the patent litigation itself . . . .” Id. The defendants argued that their counterclaims were different than the typical case, because the patent misuse and antitrust counterclaims were not focused simply on the asserted patents, but instead on the plaintiff’s “3,700+” patent portfolio. Id. Judge Robinson agreed to a point, and ordered that the counterclaims were stayed to the extent they involve validity of the plaintiff’s patent portfolio. But to the extent the antitrust counterclaims related to “numerosity and value (i.e., presuming validity) of [the plaintiff’s] patent portfolio and [the plaintiff’s] allegedly improper leveraging of such, I agree that a stay is not warranted, as there are no overlapping issues with [the plaintiff’s] case.” Id. at 4. Judge Robinson ruled that such counterclaims could proceed, but on a bifurcated schedule.
As previously reported, Judge Richard Andrews granted a motion for attorney fees in a patent infringement case under the Court’s inherent powers due to the plaintiff’s initiation of the suit without a good-faith belief that the accused products implemented the patented technology. Following supplemental briefing on the amount of attorney fees to be awarded, Judge Andrews has issued another opinion outlining the amount of fees that are owed. Parallel Iron LLC v. NetApp, Inc., C.A. No. 12-769-RGA, Memo. Op. at 16 (D. Del. Mar. 25, 2015).
Judge Andrews first rejected the plaintiff’s contention that the “lodestar” approach typically used to calculate attorney fees subject to a fee-shifting statute is not appropriate when fees are granted under the Court’s inherent powers. Id. at 6-7. Judge Andrews then rejected the argument that fees should be limited to the work associated with the plaintiff’s unsupported infringement contention because “Plaintiff was . . . sanctioned both for filing the suit and for its litigation tactics throughout. The entire period that Plaintiff accused pNFS instrumentalities is therefore the appropriate period for which to award fees.” Id. at 7-9. Furthermore, Judge Andrews found that defense counsel had not “performed unnecessary, frontloaded work . . . [because] responsible attorneys would not stand around and wait for months once their client has been accused of infringement and then rush to perform all their work once they get more specific information. It is reasonable to begin investigating and preparing a defense once an infringement suit has been brought.” Id. Judge Andrews also rejected arguments that evidence of settlement was used in violation of F.R.E. 408 and that the defendant was not entitled to fees incurred in connection with bringing a fee motion. Id. at 10-12.
Judge Andrews then found that the request for fees for hours worked was reasonable despite the fact that the hours were worked under a fixed fee arrangement. Judge Andrews’ only disagreement with the fees calculated by the defendant’s counsel was the hourly rate used. His Honor explained that under the “forum rule,” the hourly rate used should be that of intellectual property attorneys in Delaware rather than in New York City. Id. at 12-14. Finally, Judge Andrews refused to grant an injunction to prevent the plaintiff from dissipating assets and found that discovery into the plaintiffs finances was premature because judgment had not yet been entered, so allowing discovery would render Rule 69(a)(2), governing discovery from a judgment creditor, superfluous. Id. at 14-16.
Judge Andrews recently granted a Rule 12(b)(6) motion to dismiss for lack of patentable subject matter under 35 U.S.C. § 101 and Alice Corp. Priceplay.com, Inc. v. AOL Advertising, Inc., C.A. No. 14-92-RGA, Memo. Op. at 10 (D. Del. Mar. 18, 2015). Under the first step of the Alice analysis, His Honor found that the patents-in-suit were directed to the abstract idea of “a sales transaction,” a “fundamental economic practice long prevalent in our system of commerce.” Id. at 5-6. “[The plaintiff] argues that the claimed invention cannot be directed to patent-ineligible subject matter when ‘hundreds of e-commerce models have been commercialized and developed’ in recent years. . . . [but t]here are many products and services that are commercially available that are not directed to patent-eligible subject matter. Therefore, the examples provided by [the plaintiff] have little impact on the patentability of the claimed subject matter. . . . Performing a sales transaction over the Internet, or in conjunction with an auction and a competitive activity, does not make the concept any more ‘concrete.’” Id.
The Court then found that the patents-in-suit lacked an inventive concept. The plaintiff argued that “the ‘novel combination of a buyer’s participation in both an auction and a ‘competitive’ or ‘intermediary’ activity is distinct from any of the systems for conducting e-commerce,’ and thus makes the subject matter patent-eligible.” Id. at 7. But Judge Andrews explained that “the addition of an auction and a competitive activity to a sales transaction is nothing more than the addition of ‘well-understood, routine, conventional activity.’” Further, “the Internet is not essential to perform the claimed functions. Reliance on an intermediary activity to determine price has been a practice in sale negotiations throughout history, long before the existence of the Internet or computers.” Id. at 7-8.
After the motion was briefed, Judge Andrews ordered the plaintiff to submit proposed claim constructions to determine if construction would impact the motion. During oral argument on the motion, the parties agreed that the proposed construction did not affect any argument regarding the motion. Id. at 1.
Judge Sue L. Robinson recently issued rulings in advance of trial in Intellectual Ventures I, LLC v. Motorola Mobility LLC, C. A. No. 11-908-SLR (D. Del. March 13, 2015). Judge Robinson prohibited IV from introducing evidence of other entities who have licensed the patents in suit (either individually or as party of a portfolio) or were granted covenants not to sue. In the 2014 trial Judge Robinson permitted such evidence as proof of secondary considerations because both parties discussed plaintiffs’ business model (which will not be discussed in this case). Judge Robinson also issued rulings regarding plaintiffs’ doctrine of equivalents defense, but delayed decision on other remaining issues such as the merits of defendant’s divided infringement defense. Judge Robinson’s rulings on summary judgment can be found here and here.
In Gilead Sciences, Inc. et al. v. Abbott Laboratories, Inc. et al., C.A. No. 13-2034-GMS (D. Del. Mar. 13, 2015), Plaintiffs Gilead Sciences, Inc., Gilead Pharmasset LLC, and Gilead Sciences Limited (collectively, “Gilead”) brought this patent infringement suit against defendants Abbott Laboratories, Inc. and AbbVie, Inc. (collectively, “AbbVie”) in late 2013 alleging that “AbbVie falsely and knowingly represented to the U.S. Patent and Trademark Office (‘PTO’) that it invented highly valuable methods of treating the hepatitis C virus (‘HCV’) that were invented by Gilead and its predecessor Pharmasset, Inc. and others.” In March 2014, Gilead filed a Second Amended Complaint, asserting, among other things, three state law claims (Counts 9-11), including (i) violation of Cal. Bus. & Prof § 17200 of the California Unfair Competition Law (“UCL”); (ii) slander of title; and, (iii) breach of contract under Illinois law. AbbVie in turn filed the present motion to strike under California’s Anti-SLAPP statute (relating to Gilead’s Counts 9 and 10) and Motions to Dismiss for Failure to State a Claim (Relating to Gilead’s Counts 9-11). Id. at 1-2.
Judge Sleet explained that California’s anti-SLAPP statue was passed in order “to allow [the] court to promptly expose and dismiss meritless and harassing claims seeking to chill protected expression.” First, pursuant to the statute, “the moving party is required to show that the conduct underlying the plaintiff’s cause of action is an act arising from the defendant’s constitutional rights of free speech or petition, and therefore protected.” Second, “if the defendant is successful at step one, the burden shifts to the plaintiff to show there is a probability it will prevail on its claim.” Id. at 5-6. Judge Sleet noted that there were certain exceptions to the anti-SLAPP statute, and that the exception relevant to the instant matter was that “conduct deemed ‘illegal as a matter of law’ is not protected activity under the Constitution, and therefore, is not protected at step one of the anti-SLAPP analysis.” California courts have interpreted this exception to include “exclusively criminal conduct and not a mere violation of a civil statute or common-law standard of conduct.” Id. at 6-7.
Gilead argued that the anti-SLAPP exception applied because AbbVie’s inventors violated 18 U.S.C. § 1001 “when they submitted sworn declarations falsely affirming that they had invented the … Combination.” Judge Sleet, however, found that “[a]t this stage of the proceedings, a finding that the inventors ‘knowingly and willfully’ submitted false declarations is premature.” Id. at 9-10. Given that the exception did not apply, the Court proceeded with the anti-SLAPP analysis. Judge Sleet found that AbbVie met its burden under the first step of the analysis because statements “made while petitioning government agencies (including the PTO) qualify as protected activity under the anti-SLAPP statute.” Addressing step two of the analysis, Judge Sleet explained that “the anti-SLAPP analysis requires the court to determine whether there is a probability Gilead will succeed on Counts 9 and 10,” and as such, the court turned to the motion to dismiss analyses. Id. at 11. Judge Sleet dismissed Counts 9 and 10 (violation of California’s UCL and Slander of Title/Injurious Falsehood), and accordingly granted AbbVie’s motion to strike related to those claims pursuant to the anti-SLAPP statue. Id. at 12-16. Judge Sleet, however, denied AbbVie’s motion to dismiss Gilead’s Count 11, which alleged breach of contract. Id. at 16-18.
In a recent Memorandum Order, Judge Richard G. Andrews granted defendants’ motion to stay pending the resolution of two inter partes reviews. CallWave Commc’ns, LLC v. AT&T Mobility, LLC, et al., C.A. No. 12-1701-RGA (D. Del. Mar. 18, 2015). Although the plaintiff argued that the second instituted inter partes review was procedurally improper and could be dismissed, the Court found that even in such case the first instituted inter partes review likely would simplify the issues in dispute for trial.
In Tenon & Groove, LLC, et al. v. Plusgrade S.E.C., et al., C.A. No. 12-1118-GMS-SRF, Magistrate Judge Fallon previously recommended granting defendants’ motion for summary judgment that the patents-in-suit were invalid under Section 101 as directed to patent-ineligible abstract ideas. Judge Gregory M. Sleet has overruled plaintiffs’ objections to the Report, and granted the motion. Memorandum at 10 (D. Del. Mar. 11, 2015).
In arguing that the patented invention was “an idea but not an abstract idea,” plaintiffs’ objections “attempt[ed] to seize upon the specific language used by the magistrate judge and [defendants]” to point out that their “contradictory articulations of the proper formulation of the abstract idea suggests [sic] the absence of any such ‘abstract’ idea.” Id. at 5 (emphasis in original). The Court disagreed that a “contradiction” existed, and even if there was one, observed that “the use of slightly different words to describe something abstract is [not] proof that it is not abstract.” Id. (emphasis in original). The Court also rejected plaintiffs’ reliance on DDR Holdings here, 773 F.3d 709 (Fed. Cir. 2014), explaining that in that case, “the defendant’s different characterizations of the idea had no bearing on the Federal Circuit’s ultimate ruling that the claims were patent ineligible.” Id. at 5-6.
The Court then accepted the magistrate’s conclusion that the patents also failed to claim an inventive concept. See id. at 7-9. It again rejected plaintiffs’ reliance on DDR Holdings, explaining that the patented invention here did not solve “a problem unique or inherent to computers” as was the case in DDR Holdings. Id. at 8-9. Finally, while it “may have been unnecessary,” the Court found no error in “[t]he magistrate judge’s decision to analyze the machine-or-transformation test apart from the two-step Alice inquiry . . . . Magistrate Judge Fallon’s conclusion that the patents-in-suit failed the machine-or-transformation test comports with her analysis under the two-step Alice framework.” Id. at 9.
In CryoLife, Inc. v. C.R. Bard, Inc. et al., C.A. No. 14-559-SLR (D. Del. Mar. 10, 2015), Plaintiff CryoLife, Inc. (“CryoLife”) filed a declaratory judgment action against Defendants C.R. Bard, Inc. (“Bard”), Davol, Inc. (“Davol”), and Medafor, Inc. (“Medafor”) (collectively, “Defendants”), seeking a declaration that U.S. Patent No. 6,060,461 (“the ’461 patent”) is invalid and not infringed. Defendants moved to dismiss the declaratory judgment for lack of subject matter jurisdiction and failure to state a claim. As to subject matter jurisdiction, Judge Robinson found that there was no “dispute that Medafor is the assignee of the ’461 patent and that Medafor has not granted a written license to Bard or Davol.” Judge Robinson thus explained that “[e]ven though CryoLife argues that Davol is an implied exclusive licensee, it has offered no evidence that Medafor transferred any of its rights to either Bard or Davol.” CryoLife’s identification of certain facts were insufficient to establish that “Medafor could not sue Cryolife for infringement without joining Bard and/or Davol.” Accordingly, Judge Robinson concluded that the court did not have subject matter jurisdiction over Bard and Davol, and granted Defendants’ motion in that regard.
Judge Robinson then addressed Defendants’ motion to dismiss for failure to state a claim. Judge Robinson found that “CryoLife identifie[d] . . . . specific statutory sections regarding invalidity (§§ 102, 103, and/or 112) and provide[d] examples of invalidating prior art.” Further, “Cryolife also allege[d] a lack of written description.” Id. Judge Robinson also explained that “[w]hile the amended complaint does not identify the relevant statutory sections for indirect infringement or use the terms ‘induced infringement’ or ‘contributory infringement,’ Cryolife has pled that there is no direct or indirect infringement.” Judge Robinson therefore denied Defendants’ motion to dismiss for failure to state a claim.
Following the filing of CryoLife’s declaratory judgment action, Medafor filed a counterclaim for infringement and moved for a preliminary injunction. Finding Medafor to have carried its burden, Judge Robinson granted Medafor’s motion for a preliminary injunction. The patent at issue—the ’461 patent—is titled “Topically Applied Clotting Material.” In 2006, Medafor received FDA approval for ARISTA®, an “innovative hemostatic power that is used to control bleeding when conventional methods are ineffective.” On the other hand, CryoLife was “seeking FDA approval to market PerClot for surgical indications (‘PerClot Surgical’) and received FDA approval of its lnvestigational Drug Exemption application on March 27, 2014.”
Addressing the claim limitations at issue, Judge Robinson concluded that “Medafor’s constructions are consistent with the specification” and that “CryoLife has offered no non-infringement arguments using Medafor’s constructions.” Judge Robinson therefore concluded Medafor showed “a likelihood of success on infringement.” Judge Robinson was unpersuaded by CryoLife’s invalidity arguments, explaining that “CryoLife argues, without expert testimony or declarations, that certain prior art anticipates or, in combination, renders the asserted claims obvious. CryoLife supports its anticipation and obviousness arguments with reference to a table
of invalidity contentions and the barest of attorney argument.” Judge Robinson also found that Medafor carried its burden demonstrating the remaining prerequisites for a preliminary injunction, explaining that “[t]here is sufficient record evidence that Cryolife’s PerClot product is in direct competition with Medafor’s Arista product and that these products are targeted to the same customers and hospitals.” According to Judge Robinson, Medafor made “persuasive arguments for the loss of its customer base and damage to its goodwill.”
Judge Andrews recently granted a request by patent infringement defendants to allow additional claim construction briefs and argument regarding certain terms of a patent-in-suit after a jury trial finding the patent valid and infringed. Interdigital Commc’ns, Inc., et al .v. ZTE Corp., et al., C.A. Nos. 13-09-RGA, 13-10-RGA, Memo. Op. at 3-4 (D. Del. Mar. 6, 2015). Among the terms argued was a term that Judge Andrews had previously construed, adopting the construction proposed by the defendants. Post-trial, however, the defendants argued that construction was confusing and “opened the door for Plaintiffs’ expert . . . to make claim construction arguments to the jury at the . . . trial.” Id. at 9. The plaintiffs argued that their expert’s construction was the correct construction and that the defendants should not be permitted to relitigate claim construction when the defendants’ construction was adopted originally. Id. at 9-10.
At the trial, the defendants objected to the expert’s testimony, and the Court sustained the objection and struck the testimony. Judge Andrews also noted, in his claim construction opinion, that such testimony by the expert is improper and could be sanctionable. Id. at 9-10. Post-trial, however, Judge Andrews adopted the plaintiffs’ construction, noting that “Defendants’ argument that this interpretation is objectionable because the Court struck Dr. Cooklev’s testimony at the ZTE trial misunderstands the Court’s ruling. The testimony was improper because Dr. Cooklev was arguing a question of law to the jury. It was not that the substance of the argument was necessarily objectionable, it was that the argument was being made at all.” Id. at 11-12.
In Williamson v. Google Inc., C.A. No. 14-216-GMS (D. Del. Mar. 2, 2015), Judge Gregory M. Sleet granted Google’s motion to transfer to the Northern District of California. Judge Sleet noted that “Williamson is not at home in Delaware, and therefore his choice is ‘entitled to less deference.’” Id. at 2. On the other hand, as Judge Sleet noted, Google “has legitimate reasons for seeking to litigate” in the Northern District of California, as its principal place of business is in Mountain View, California. According to Judge Sleet, Google’s choice was therefore entitled to “some—but not overriding—deference.” Id. at 2-3. Further, considering Google’s logistics and the fact that Williamson would be required to travel in any case, Judge Sleet found the Northern District of California to be “more convenient” to the parties. Id. at 3. Considering “where the claims arose,” Judge Sleet explained that “Google designed and developed the accused AdSense product in Mountain View; Google continues to develop and market AdSense from that location. Therefore the infringement claims have ‘deeper roots’ in the Northern District of California than in the District of Delaware.” Addressing non-party witnesses, Judge Sleet noted that Google argued “its invalidity contentions may rely on testimony from founders or inventors at . . . companies . . . who would not be subject to Delaware’s subpoena power.” Id. at 5. On balance, Judge Sleet found that the Jumara factors as a whole weighed in favor of transfer.