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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.

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Judge Robinson recently denied a patent infringement declaratory judgment defendant’s motion to sever and transfer venue to the District of Kansas. Plaintiff Cox filed a declaratory judgment action in the District of Delaware regarding twelve patents owned by Sprint. Cox filed that action after Sprint had filed infringement suits related to the same twelve patents against Cox and three other defendants in the District of Kansas. In the declaratory judgment suit, Cox also asserted infringement by Sprint of two of its patents, and Sprint answered and asserted counterclaims for infringement of seven additional Sprint patents. Sprint then filed a motion to sever and transfer to the District of Kansas, where Sprint alleged it had previously litigated five of the patents-in-suit and had relevant witnesses and documents. The Judge in Kansas then found that the District of Kansas did not have personal jurisdiction over Cox and that the case should be transferred to Delaware, but the parties did not indicate that this mooted the motion to transfer before the Delaware court. Accordingly, Judge Robinson considered the motion to transfer the Delaware action to Kansas. See Cox Comms. Inc. v. Sprint Comms. Co., C.A. No. 12-487-SLR, Memorandum Order at 1-2 (D. Del. Mar. 27, 2013).

Judge Robinson first found that “exceptional circumstances . . . warrant[ed] departure from the first-to-file rule.” The case, she explained, “is unusual in that the alleged first-filed case, the Kansas litigation, has been transferred to this court. Accordingly, that litigation would be streamlined by having this court also resolve the declaratory judgment claims related to the same patents.” Id. at 4.

Judge Robinson then considered transfer pursuant to § 1404. Relying on her decision in 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 5 (citations omitted). Accordingly, after considering all of the Third Circuit’s Jumara transfer factors and because “the Kansas litigation has been transferred [to Delaware], the court [found] that the Jumara factors do not weigh in favor of transferring the Cox . . . declaratory judgment claims back to Kansas.” Id. at 6-8. Despite the three other Sprint cases remaining in Kansas, Judge Robinson determined that given “the transfer of [the Cox] case and the Kansas court’s lack of personal jurisdiction over Cox Communications, Sprint [had not] carried its burden of persuading the court, by a preponderance of the evidence, that the Jumara factors favor transfer.” Id. at 9.

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In FastVDO LLC v. DXG Tech. USA, Inc., et al., C.A. No. 11-797-RGA (D. Del. Mar. 26, 2013), Judge Richard G. Andrews issued the Court’s claim construction order following a Markman hearing on March 22, 2013.

The following terms of U.S. Patent No. RE 40,081 were “construed definitively”:

“recursively”
“initial stage”
“MxM block coder”
“transform coder”
“invertible linear transform”/”invertible forward linear transform”
“representable as a cascade, using the steps”
”processing the output coefficients in the decoder into a reconstructed image”
“dyadic”
“orthogonal transform”

Judge Andrews provided “tentative” constructions of the following terms:

“butterfly step” I “±1 butterfly step”
“lifting step”

Judge Andrews held in abeyance the constructions of the following terms:

“rational complext coefficients”
“unitary transform”

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Chief Judge Gregory M. Sleet recently granted defendants’ motions to transfer thirty-eight related patent infringement actions to the Eastern District of Michigan. E.g., Beacon Navigation GmbH v. Crysler Group L.L.C., C.A. No. 11-cv-921-GMS (D. Del. Mar. 20, 2013). The actions involve GPS technology. Id. at 8. Plaintiff, a Swiss company, “filed suit against every major automaker that sells automobiles in the United States.” Id. at 3, 23. Of the fifty-six defendants involved, forty-six filed motions to transfer venue to Michigan. Id. at 1 n.3.

In analyzing the Jumara factors, the Court concluded that only plaintiff’s forum preference weighed against transfer. Id. at 25. Because plaintiff was not a Delaware corporation, this factor was not of paramount consideration, but was accorded “some degree of heightened deference.” Id. at 13. The remaining factors were either neutral or favored transfer, although where the claim arose, defendants’ forum preference, the location of books and records, and the relative administrative difficulties in the two fora only slightly favored transfer. Id. at 14, 18-21, 23. The inconvenience of the fourteen defendants incorporated in Delaware was neutral in the Jumara analysis because these defendants had “submitted to suit in this district,” but as to the defendants not incorporated in Delaware, this factor weighed in favor of transfer. Id. at 17-18.

Many of defendants’ arguments for transfer focused on their locations in Michigan; “by and large, the defendants are headquartered, operate facilities, manufacture, and/or sell products in that district.” Id. at 14; see also id. at 10 n.13 (listing defendants’ activities in Michigan). Plaintiff, on the other hand, argued that “defendants’ interest in transferring to the Eastern District of Michigan is purely tactical, obviously based on their belief that they are likely to be favored in the traditional center of the American automotive industry.” Id. at 13 (internal citations and quotation marks omitted). The Court did not accept this argument, at one point noting that “federal courts provide a neutrality that negates [plaintiff’s concerns], particularly in cases such as these, which involve a national controversy.” Id. at 25.

Even though ten defendants had not filed motions to transfer, the Court sua sponte transferred all fifty-six actions to Michigan “because these actions present the court with such extraordinary circumstances.” Id. at 2 & n.4. “[T]he court transfers [the actions of the non-moving defendants] because it is left with no alternative but to do so in its effort to avoid an untenable result with respect to the forty-six defendants that have moved to transfer these actions. . . . It is easy to imagine the spectre of any number of inconsistent rulings and outcomes raising their heads [should the actions of the non-moving parties remain in Delaware].” Id. at 2 n.4. Two actions were administratively closed due to bankruptcy proceedings, but the Court also transferred these actions to Michigan for the same reasons. Id.

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Judge Leonard P. Stark recently considered plaintiffs’ emergency motion to stay the date for service of plaintiffs’ responsive expert reports pending resolution of plaintiffs’ motion to strike defendants’ untimely invalidity contentions. Avanir Pharms., Inc. v. Actavis South Atlantic LLC, C.A. No. 11-704-LPS (Consol.) (D. Del. Mar. 19, 2013). Judge Stark granted plaintiffs’ motion finding that plaintiffs “would be unfairly prejudiced by having to prepare and serve responsive expert reports while their motion to strike is pending, as they would not know whether it is necessary to respond to all of the opinions expressed in Defendants’ expert reports.” Id. at 3.

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Judge Sue L. Robinson recently issued a memorandum opinion granting summary judgment of invalidity for lack of written description and no infringement under the doctrine of equivalents of a patented method of producing isobutanol using genetically-engineered yeast microorganisms aimed at reducing greenhouse gas emissions. Butamax™ Advanced Biofuels LLC v. Gevo, Inc., Civ. No. 11-54-SLR (D. Del. Mar. 19, 2013). Before addressing the merits of several competing summary judgment motions, the Court construed the disputed claims as follows:

“acetohydroxy acid isomeroreductase” was construed to mean “an enzyme known by the EC number 1.1.1.86 that catalyzes the conversion of acetolactate to 2,3-dihydroxyisovalerate and is NADPH-dependent”
“a recombinant yeast microorganism expressing an engineered isobutanol biosynthetic pathway” was construed to mean “a recombinant yeast microorganism that is genetically transformed such that it expresses the five enzymes that form the biosynthetic pathway described hereafter for the production of isobutanol, wherein one or more of those enzymes is recombinantly expressed”
“(pathway step a;…(pathway step b);…,” etc. was construed to mean “the pathway of steps a-e are contiguous steps such that the product of step a is the substrate for step b; the product of step b is the substrate for step c; etc.”
“The microorganism produces isobutanol as a single product” was construed to mean “[t]he microorganism produces isobutanol without substantial amounts of other fermentation products”
Id. at 8-23.

The Court considered, in light of these claim constructions, the parties competing motions for summary judgment on the question of infringement. The Court first explained that the plaintiff’s “evidence of infringement is less than compelling, nonetheless, . . . it [is] sufficient to withstand [the defendant’s] motion for summary judgment, as it raises genuine issues of material fact as to how a person of ordinary skill in the art at the time the invention was made would determine NADH-dependency.” Id. at 39. The Court granted, however, the defendant’s motion for summary judgment of no infringement under the doctrine of equivalents, which asserted that the defendant’s “NADH-dependent enzyme is not equivalent to an NADPH-dependent enzyme.” Id. at 39-40. In light of its claim construction, the Court disagreed with the plaintiff’s position that “the use of NADH as an electron donor is insubstantially different from the use of NADPH.” Id. at 40 (quoting D.I. 648 at 33).

The Court then considered several competing motions for summary judgment on the question of validity. The defendant argued that claim 12 (“[t]he recombinant yeast microorganism of claim 1 wherein the said microorganism further comprises inactivated genes thereby reducing yield loss from competing pathways for carbon flow”) and claim 13 (“[t]he recombinant yeast microorganism of claim 12, wherein said inactivated genes reduce pyruvate decarboxylase activity”) were invalid for lack of written description. Id. at 50-51. With regard to claim 12, the Court found that the patent “mentions inactivation of genes only once” and that “[n]one of the cited portions of the specification provide a description to one of skill in the art on how to construct a recombinant yeast microorganism with ‘inactivated genes’ to reduce ‘yield loss from competing pathways.’” Id. at 51, 52. “Although the specification may be interpreted as identifying both the . . . problem and the solution, it does not even begin to describe how to put into practice the solution.” Id. at 52. Similarly, the specification nowhere disclosed “inactivated genes” that “reduce pyruvate decarboxylase activity[,]” and the Court found that claim 13 was also invalid for lack of written description.

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Judge Andrews has issued a claim construction opinion in the ANDA dispute between GlaxoSmithKline and Sandoz over GSK’s Veramyst product. The parties disputed construction of only a single term, “at around.” Judge Andrews agreed with Sandoz that the phrase “at around” indicates a well-established margin of error in the context of X-Ray Powder Diffraction, the method indicated by the patents-in-suit for distinguishing various forms of fluticasone furoate. Because the intrinsic and extrinsic evidence supported the view that a separation of .2 degrees is reliably distinguishable, Judge Andrews concluded that Sandoz’s construction requiring a margin of error of only .1 degrees was correct. See Glaxosmithkline Intellectual Prop. Mgmt. Ltd. v. Sandoz, Inc., C.A. No. 11-1284-RGA at 4-7 (D. Del. March 20, 2013).

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Judge Sue Robinson has partially granted and partially denied a patent infringement defendant’s motion to dismiss claims of indirect and willful infringement. Consistent with her previous holding in Walker Digital, Judge Robinson found that plaintiff’s claims of both induced and contributory infringement based on notice of the patents-in-suit as of the filing date were facially plausible. Accordingly, she denied the motion to dismiss with respect to these claims of indirect infringement. With respect to willful infringement, however, Judge Robinson explained that the lack of pre-suit knowledge of the patents-in-suit was fatal to claims of willful infringement. Therefore, consistent with her past decisions, Judge Robinson granted the defendant’s motion to dismiss with respect to claims of willful infringement. See Netgear Inc. v. Ruckus Wireless Inc., C.A. No. 10-999-SLR, Memo Order at 1-3 (D. Del. Mar. 14, 2013).

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Judge Sue L. Robinson recently stayed, in the interest of judicial economy, its decision on the motion to amend judgment filed by defendant, pending the Federal Circuit’s decision in Robert Bosch LLC v. Pylon Manufacturing (see discussion here). Asahi Glass Co., Ltd., v. Guardian Indus. Corp., C.A. No. 09-515-SLR (D. Del. Mar. 11, 2013). “The Federal Circuit is currently considering, en banc, its jurisdiction over appeals from patent infringement liability determinations when a trial on damages has not yet occurred and when willfulness issues remain outstanding.” Id. A stay was appropriate because the Federal Circuit’s decision would have a “direct impact” on the appealability of this case. Id.

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Chief Judge Gregory M. Sleet issued a memorandum order this week granting a plaintiff’s motion for leave to amend its complaint, which the Court previously dismissed without prejudice. Endo Pharmaceuticals Inc. v. Mylan Technologies Inc., et al., C.A. No. 11-220-GMS (D. Del. Mar. 11, 2013). The first claim of the plaintiff’s original complaint alleged that the defendant failed to comply with the notice requirements of the Hatch-Waxman Act, because the plaintiff (which was the recipient of the defendant’s Paragraph IV Notice) was not actually the owner of the patent at issue at the time notice was provided. Id. at 1. The second claim in the original complaint alleged that in the event the Court were to “determine[] now or at a future date that [the defendant] has complied with its obligations under the Hatch-Waxman Act . . . [the defendant] has infringed the ’510 Patent by submitting an ANDA . . . containing a Paragraph IV certification with respect to that patent”. Id. at 2. The Court dismissed the complaint, finding that because the plaintiff acknowledged that it was not the owner of the ’510 patent, it lacked standing to bring its first claim. Id. In turn, the Court was unable to reach the second claim because, “as pled, [it] was conditioned on a determination of” the first claim. Id.

Shortly after the dismissal, the plaintiff moved to amend its complaint to restate its second claim to correct a “technical defect in pleading.” Id. The defendant countered that the “technical defect” was not an “inadvertent error,” but instead was an intentional “strategy to extend the statutory 30 month stay . . . instead of bringing a claim for infringement.” Id. at 4 (quoting D.I. 21 at 1, 3). The defendant argued further that the plaintiff had ample time to amend its complaint in response to the motion to dismiss but chose not to do so until the complaint was dismissed. In the defendant’s view, the plaintiff’s failure to promptly amend its complaint was “the result of undue delay and dilatory conduct.” Id. (quoting D.I. 21 at 3).

The Court disagreed with the defendant. Because the plaintiff had a good faith basis to believe that its original complaint would not be dismissed, and because the plaintiff filed its motion for leave to amend within fourteen days of the complaint’s dismissal, the Court was “unable to discern any dilatory motive and concludes that the delay was not so excessive as to be unreasonable.” Id. at 5-6. The Court also rejected the defendant’s argument that it would be unduly prejudiced if an amended complaint were permitted to be filed, explaining that the defendant “was clearly put on notice of [the plaintiff’s] infringement claim” by the original complaint, “and the amendment does not substantially change the underlying theory of the case.” Id. at 6.

The Court also rejected the defendant’s argument that the plaintiff’s amended infringement claim should not relate back to the date of the original complaint (which was filed within 45 days of the Paragraph IV Notice). The Court explained that although the original infringement claim was defective, there was no dispute that it was “brought” within 45 days of the Paragraph IV Notice, which was all that the statute required to trigger a 30 month stay. Id. at 9. The Court further found that its dismissal of the complaint had not terminated the 30 month stay once it was triggered, because “if Congress had wished the thirty month stay to be extinguished upon a dismissal without prejudice, it would have said as much.” Id. at 10.

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