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A recent decision by Judge Richard G. Andrews shows that courts need not provide parties with leave to amend pleadings where the proposed amendments are inconsequential. LG Electronics, Inc. v. Asko Appliances, Inc., et al., C.A. No. 08-828-RGA (D. Del. Oct. 17, 2012). The defendants’ motion sought leave to “pare[] down their inequitable conduct claims, clarif[y] their antitrust counterclaims, and add[] a defense of intervening rights.” Id. at 1. The Court denied the motion with respect to the first two proposed amendments (deleting over 100 paragraphs relating to inequitable conduct and “refram[ing]” antitrust issues). Id. The Court explained that “narrowing of the inequitable conduct issues can be achieved by stipulation or other understanding among the parties,” and the proposed antitrust amendments “do not add new theories, factual disputes or issues to the case.” Id. The Court explained, “[j]ustice does not require providing leave to make these inconsequential amendments.” Id. (citing Fed. R. Civ. P. 15(a)(2)).

The Court did not find the proposed addition of an intervening rights defense to be inconsequential, though, and granted leave to make that amendment. Id. at 2. The Court found that the defendants timely sought to add an intervening rights defense after the plaintiff was granted leave to amend its infringement contentions regarding claims that were altered by reexamination. Id. The Court explained, “[w]hile the intervening rights defense will require technical and legal analyses of the extent to which the reexamined claims have changed, Defendants assert their defense is germane to the as-yet-unscheduled damages portion of the case, and not to the pending liability phase.” Id. Based on that limitation, the Court found that the defendants could add an intervening rights defense without unduly burdening or prejudicing the plaintiffs or the Court. Id.

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Magistrate Judge Christopher Burke has issued a report in patent litigation between patent-holding company Pragmatus and internet giant Yahoo!, recommending that Yahoo’s motion to transfer venue to the Northern District of California be denied. See Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-902-LPS-CJB (D. Del. Oct. 15, 2012). Judge Burke wrote a lengthy opinion analyzing the various public and private interest factors of Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) in great depth and explaining how those factors are typically applied in the District of Delaware. Ultimately, Judge Burke found that two factors weighed against transfer, four favored transfer, and six were neutral: “[T]he plaintiff’s choice of forum and practical considerations weigh against transfer. The defendant’s forum preference and whether the claim arose elsewhere weigh in favor of transfer. Two other factors—the convenience of the witnesses and the location of books and records—also weigh in favor of transfer, though only slightly, and not sufficiently to make a material impact on the Court’s decision.”
In reaching this conclusion, Judge Burke clarified several disputes among the parties as to the proper application of transfer precedent in the District of Delaware. He first stated that the Federal Circuit in In re Link_A_Media Devices Corp., 662 F.3d 1221 (Fed. Cir. 2011) “noted that a party’s state of incorporation is not one of the factors listed in Section 1404 or in Jumara, and stated that it would be inappropriate for a court to place ‘heavy reliance’ on this fact, such that it became ‘dispositive’ in the venue transfer analysis.” Nevertheless, he noted, “nothing in Link _A_ Media suggests that a defendant’s place of incorporation is irrelevant to the transfer analysis.” Rather, “in many circumstances, the Federal Circuit has found that the location of a defendant’s incorporation in a forum can be a fact supporting the conclusion that a lawsuit is properly venued in that same forum.” Next Judge Burke considered Yahoo!’s suggestion that when considering the availability of witnesses factor, “it is sufficient for purposes of venue transfer analysis if the witness is not subject to a court’s subpoena power.” He explained that the precedent relied on for this proposition in turn relied on precedent “where the Court intently considered whether there was evidence that the non-party witnesses at issue would actually be unavailable for trial.” He therefore concluded that “to automatically consider a witness unavailable, simply because they reside outside of this District’s subpoena power, would render the inquiry required by this factor unduly wooden.” Rather, a court must consider whether there is evidence that witnesses would actually be unavailable for trial. Finally, in considering the court congestion factor, Judge Burke noted that “for the first time in years, this Court now has a full bench of four U.S. District Judges (and, for the first time ever, three U.S. Magistrate Judges). In light of that . . . [he was] not persuaded by [the] argument that difficulties relating to court congestion favor transfer.”
Based on these and other factors, Judge Burke concluded that while “the issue is a close one . . . Yahoo! has not demonstrated that the balance of convenience of the parties tips strongly in its favor, as is required by Third Circuit precedent.” He refuted Yahoo!’s suggestion that “‘there isn’t a strong showing’ required of defendants in order to obtain a transfer of venue,” stating instead that Third Circuit and District precedent requires “that a defendant bear the ‘heavy burden’ to show that the balance of convenience tips ‘strongly in favor’ of transfer.” Yahoo! did not meet that burden in this case in part because Pragmatus “brought suit . . . in a district that is very near to its place of business and to the location of its employees, a district where it had a legitimate basis to file the litigation (in light of the fact, among other things, that Yahoo! is itself incorporated here), and where the same Court is overseeing myriad other litigation matters involving the patents-in-suit.” Accordingly, Judge Burke recommended denial of the motion to transfer.

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Judge Andrews has issued an interesting order regarding an upcoming Markman hearing in Riverbed Technology Inc. v. Silver Peak Systems Inc., C.A. No. 11-484-RGA (D. Del. Oct. 17, 2012). The parties in the case identified 31 disputed terms for construction, and Judge Andrews “note[d] that the parties have no agreed-upon constructions. The ratio of agreed-upon to disputed terms is considerably outside the norm.” Accordingly, he “anticpate[d] that no more than ten terms will be heard at the hearing,” and placed the burden on the parties to identify those terms most in need of construction.

Judge Andrews’ order requires the parties to submit a joint letter “identifying the number of asserted claims, and explaining the importance of construction of the approximately 31 disputed terms to other issues in the case . . . . Each party should also identify, in order of priority, the terms that are most important to the party to have argued at the hearing.” “Depending on what is in the submission,” Judge Andrews warned, “the Court may select the terms to be heard, may narrow the claims at issue, or both, or may postpone the hearing until the parties narrow the claims and terms.”

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Judge Andrews and Magistrate Judge Thynge have issued orders resolving numerous pre-trial issues in the past few weeks in the patent infringement litigation between St. Jude Medical and Volcano Corp. related to technology for diagnosis of heart disease. In addition to rulings on claim construction and exclusion of prior art, Judge Thynge has also recently considered St. Jude’s request to exclude portions of Volcano’s expert reports due to spoliation of evidence and Judge Andrews has considered Volcano’s motions to exclude evidence and testimony related to secondary considerations of non-obviousness.

Judge Thynge considered a request by St. Jude to exclude “portions of Volcano’s expert reports based on Volcano’s purported ‘unilateral destructive testing and spoliation of a unique piece of evidence.” See St. Jude Med. Cardiology Div., Inc. v. Volcano Corp., C.A. No. 10-631-RGA-MPT (D. Del. October 9, 2012). Volcano’s expert reports relied on this testing, and St. Jude alleged that it had no notice of the pending dissection of the evidence and no opportunity to conduct its own testing on any similar piece of evidence. Judge Thynge concluded that “St. Jude did not understand Volcano’s experts were dissecting the [evidence, but] . . . Volcano did not willfully conceal the dissection prior to serving [the expert] reports.” Nevertheless, “[b]ecause Volcano altered the [evidence], and did so without St. Jude understanding that alteration would occur, the court [found] there [had] been spoliation.”
Despite finding spoliation of evidence, Judge Thynge did not exclude Volcano’s expert reports. She determined that “Volcano’s exclusive possession of the [evidence], and St. Jude’s inability to prevent, or object to . . . dissection thereof, weighs in favor of finding Volcano ‘at fault’ for altering that evidence.” Nevertheless, St. Jude’s expert was able to “form strong opinions about [the evidence] from examination of the many photographs included in the . . . report documenting the dissection.” Therefore, “the court determine[d] Volcano’s actions . . . did not cause prejudice to St. Jude sufficient to strike portions of the [expert] reports addressing that dissection.” Accordingly, Judge Thynge denied St. Jude’s motion to strike.

Judge Andrews addressed evidence of secondary considerations of non-obviousness. In addition to finding that certain studies could be relevant to secondary considerations and should be admitted, Judge Andrews considered testimony of an expert regarding secondary considerations. See St. Jude Med. Cardiology Div., Inc. v. Volcano Corp., C.A. No. 10-631-RGA-MPT (D. Del. October 12, 2012). He concluded that evidence that “each generation of St. Jude’s products . . . embod[ies] its latest patent” would be insufficient to show the required “nexus” between secondary considerations and the patented invention. Rather, Judge Andrews stated, “there has to be more specific testimony” showing “that any secondary consideration is the result of the patented invention, and not the result of other factors, such as the reputation of the maker, features of the device that were known in the prior art, etc.” Because this proffer was insufficient, Judge Andrews concluded that St. Jude “should not discuss the . . . studies or [the] likely [expert] testimony during its opening. The Court [did] not, however, prohibit[] the Plaintiff from attempting to lay the appropriate foundation during testimony.”

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Judge Richard G. Andrews recently construed over thirty claim terms across nine patents related to St. Jude’s “PressureWire” technology, a platform which calculates fractional flow reserve to measure arterial blood pressure. St. Jude Medical v. Volcano Corp., C.A. No. 10-631-RGA (D. Del. Oct. 12, 2012). The following claim terms of U.S. Patent Nos. 6,112,598; 6,167,763; 5,938,624; 6,196,980; 6,248,083; 5,178,159; 5,797,856; 6,976,965; and 7,134,994 were construed:

“it does not contact any surrounding rigid structures,” with “‘[s]aid sensor element’ as the “antecedent basis for the word ‘it’”
“recess”
“surrounding the sensor”
“pressure sensitive end of the pressure transducer does not contact any structure other than the mount”
“pressure transducer”
“core wire”
“fills the male connector to prevent capillary action”
“interface cable”
“connectable”
“information storing means”
“provided on said interface cable”
“uniquely characteristic of said measuring device (14)”
“EPROM”
“extending along the length thereof”
“insulating sleeve”
“extending along the length of the tubular member”
“cylindrical insulting member”
“flexible elongate member”
“coaxially disposed on at least a portion of the flexible elongate member”
“coil assembly”
“distal extremity”
“said flexible elongate member having a first transition counting from the proximal extremity from a larger diameter to a smaller diameter”
“said flexible elongate member is provided with an additional transition distal of the distal extremity of the flexible elongate tubular member and being disposed within the coil assembly”
“hole . . . such that a portion of the pressure sensitive region is disposed opposite the hole”
“distal extremity of the guidewire”
“mounted within the sensor housing such that the pressure sensitive region projects into the lumen”
“multi-mode graphical user interface with at least two distinct displays for presenting diagnostic parameter values of multiple types”
“multi-mode graphical user interface host”
“kernel mode drivers”
“processed sensor data”
“peripheral interface card”

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Judge Richard G. Andrews recently denied defendants’ motion to stay pending reexamination of one of the two patents-in-suit. Rovi Corp. v. Haier Group Corp., C.A. No. 11-1140-RGA (D. Del. Oct. 16, 2012). Judge Andrews determined that while he “might very well be inclined to grant a stay as to the ‘523 patent (the subject of the reexam), the Court [did] not see any reason to grant a stay as to the other.” Because the case was in its infancy, and because the plaintiffs “ought be able to proceed on the [patent not involved in reexamination proceedings],” Judge Andrews declined to stay the entire case.

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Judge Richard G. Andrews construed the one disputed claim term of plaintiffs’ U.S. Patent No. 7,815,934 covering plaintiffs’ EMBEDA® extended release capsules for oral use. in a one page order, Judge Andrews adopted plaintiffs’ proposed construction, construing the term “sequestering subunit” to mean “Any means for containing an aversive agent and preventing or substantially preventing the release thereof in the gastrointestinal tract when intact, i.e., when not tampered with.”

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Judge Sue L. Robinson recently denied a plaintiff’s emergency request seeking to disqualify an opposing expert witness based on the expert’s earlier consultations with the plaintiff, pursuant to a confidentiality agreement, regarding the litigation. Butamax Advanced Biofuels LLC v. Gevo, Inc., Civ. No. 11-54-SLR (D. Del. Oct. 10, 2012). The plaintiff’s emergency request was based on its contention that the plaintiff previously sought to retain the expert, and in the process engaged in substantive discussions regarding how the plaintiff would respond to certain arguments expected to be made by the defendant. Id. at 1-2. The emergency request provided: “Through the confidential relationship, [the expert] at least learned counsel’s [modus operandi] and decision-making process. Yesterday, [the expert] indicated he will consult for [the defendant’s] counsel on the same matters. The Court should exclude [the expert] and preclude [the defendant] from contacting him further.” Civ. No. 11-54-SLR, D.I. 531.

The Court explained that the disqualification of an expert witness is justified where it was “(1) … objectively reasonable for the party seeking disqualification to have concluded that a confidential relationship existed with the expert;[] and (2) … confidential or privileged information actually [was] disclosed to the expert.” Id. at 2 (citing Syngenta Seeds, Inc. v. Monsanto Co., Civ. No. 02-1331, 2004 WL 2223252, at *1 (D. Del. Sept. 24, 2004)). The Court added that “[a]ffirmative answers to both inquiries ordinarily compel disqualification; however, ‘disqualification is likely inappropriate if either inquiry yields a negative response.’” Id. at 3 (quoting Wang Laboratories, Inc. v. Toshiba Corp., 762 F. Supp. 1246, 1248 (E.D. Va. 1991)).

Here, the Court assumed that because the expert signed a confidentiality agreement, the first prong of the inquiry was satisfied. Id. at 5-6. The Court found, though, that the second prong of the inquiry was not satisfied, because no confidential or privileged information was disclosed to the expert by the plaintiff’s attorney. Id. at 6. The record showed that the expert had not been retained by the plaintiff, nor received any fees or confidential documents from the plaintiff. Id. In fact, the plaintiff’s attorneys had refused to provide the expert “with even publicly available documents from the litigation, e.g., the declarations of two other EC Commission members that had been submitted on behalf of [the plaintiff].” Id. at 6 n.5. The Court found that “the nature of the relationship and of the information allegedly disclosed instantly is much too abbreviated to warrant such a drastic sanction [as disqualification].” Id. at 6. The Court added that allowing the expert to testify on behalf of the defendant would not call into question the integrity of the judicial process, especially where, as here, the expert was “one of a limited number of individuals with expertise related to [the subject matter of his testimony].” Id. at 7.

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Judge Richard G. Andrews partially overruled Magistrate Judge Thynge’s decision to exclude certain prior art evidence due to discovery violations, but in a subsequent order excluded the evidence anyway on other grounds. St. Jude Medical v. Volcano Corp., C.A. No. 10-631-RGA, Mem. Op. (D. Del. Oct. 9, 2012); Order (D. Del. Oct. 12, 2012). Plaintiffs produced the prior art, a video recording of a demonstration in Paris, France to an audience that included U.S. cardiologists, in support of its 102(a) invalidity theory. The video was produced on April 24, 2012 — five months after fact discovery closed in November 2011. Id. at 2. Judge Andrews had previously affirmed Magistrate Judge Thynge’s decision to exclude other prior art evidence due to discovery violations. Id. Judge Andrews found the situation at issue here somewhat different, however. First, Judge Andrews found that even though plaintiffs produced the video as soon as they received it, it was not clearly erroneous for Magistrate Judge Thynge to conclude that that producing it after the discovery deadline passed violated the court’s scheduling order. Id. at 3. In doing so, Judge Andrews rejected plaintiffs’ argument that there was no violation because supplementations under Fed. R. Civ. P. 26(e) were permissible and contemplated under the court’s scheduling order. Id. Judge Andrews was not persuaded because Rule 26(e) “is not an invitation to do further investigation immediately before trial, and then add the fruits of the investigation to the case.” Id.

However, Judge Andrews determined that he could not assess whether Magistrate Judge Thynge’s decision to exclude was an abuse of discretion based on the current record. Because of the importance of the evidence (if it was admitted it “might very well provide the clear and convincing evidence to invalidate the patent”), Judge Andrews set up a teleconference on October 11, prior to the commencement of the impending trial, to further discuss the issue with counsel. The next day, Judge Andrews issued an order finding that there was no “likely discovery [defendant] could have done had it had the video earlier.” Oct. 12 Order at 1-2. But, there was no evidence that a person of ordinary skill in the art was in the audience of the demonstration in the video. Id. at 2. Plaintiffs offered the evidence to support its theory that the patented invention was known by others in the United States. Id. The video, however, did not “indicate” knowledge or use in the United States. Id. “The theory that American cardiologists have knowledge . . . based on watching a device the patented features of which are not within their area of expertise, cannot be proved by clear and convincing evidence based on the proffer of evidence.” Id. Thus, Judge Andrews excluded the video, and any related testimony about the demonstration, “as not presenting sufficient evidence to raise a triable jury question[.]” Id. at 3.

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Judge Stark has denied a motion to hold a defendant in contempt of the Court’s permanent injunction in the long-standing patent battle between ARRIS Group and SeaChange International. See nCube Corp. v. SeaChange Int’l Inc., C.A. No. 01-011-LPS (D. Del. Oct. 12, 2012). A jury had previously found in favor of ARRIS in its infringement case against SeaChange, and the Court entered a permanent injunction in 2006. In 2009, ARRIS filed its motion, alleging that SeaChange’s design-around did not place its interactive television (ITV) product outside the scope of the patent-in-suit or the Court’s permanent injunction. Judge Stark held that the dispute was amenable to a contempt proceeding under the Federal Circuit’s recent decision in TiVo Inc. v. Echostar Corp., 646 F.3d 869 (Fed. Cir. 2011), and held such a hearing to allow the parties to present evidence on the contempt issue.

Under TiVo, a “party seeking to enforce the injunction must prove both that (1) the newly accused product is not more than colorably different from the product found to infringe and (2) that the newly accused product actually infringes.” Tivo, 646 F.3d at 882. ARRIS contended that SeaChange had made only a minor, insignificant change in its design-around. SeaChange countered that ARRIS improperly relied on a previously-unaccused element and that a finding of contempt can only be based on features that were alleged as infringing at trial. Judge Stark came down on the side of SeaChange, explaining that “[u]nder TiVo, the Court must assess whether colorable differences exist between the [accused] functionality . . . of the infringing ITV system and the redesigned . . . functionality that is now implemented . . . [in] the modified ITV system. Having undertaken this analysis, the Court finds that ARRIS has failed to prove, by clear and convincing evidence, that there is no colorable difference between the [accused] functionality in the infringing ITV system and the [accused] functionality in the modified ITV system.” Therefore, Judge Stark concluded, ARRIS had failed to demonstrate the first TiVo prong, and the contempt motion should be denied.

Despite finding that ARRIS had not shown a lack of colorable differences between the original, infringing product and SeaChange’s new, modified product—and therefore that a contempt finding was inappropriate—Judge Stark proceeded to consider whether the modified product infringed the patent-in-suit under the second TiVo prong. He concluded: “Having considered both parties’ arguments and evidence on the issue of infringement, the Court finds that ARRIS has failed to provide clear and convincing evidence that SeaChange’s modified ITV system actually infringes [the asserted claim]. To the contrary, SeaChange—although it does not bear the burden of proof—has come forward with significant evidence of non-infringement.” Accordingly, while he did not find non-infringement, Judge Stark determined that SeaChange had prevailed under the high standard of TiVo and denied ARRIS’s motion for contempt.

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