Judge Leonard Stark recently denied a motion to stay pending PTO reexamination of the patents-in-suit in a case where discovery is closed, the Court has issued a claim construction order, and a trial is set for May 12, 2014. Intellectual Ventures I LLC v. Xilinx, Inc., C.A. No. 10-1065-LPS, Memo. Or. at 1 (D. Del. Mar. 5, 2014). The defendants in the case first filed a motion to stay in August 2011, which was denied in February 2012. In denying the second motion to stay, Judge Stark explained: “Many of the factors that weighed against a stay in August 2011 continue to weigh against a stay now. The Court and the parties have expended substantial resources in bringing the case to this late stage of the litigation. Although it is true that the reexaminations at the PTO are further along than they were in August 2011, it will likely take another two to three years before a final decision on validity makes its way through the Federal Circuit.” Id. at 3. Furthermore, Judge Stark explained that “the marginal simplification that may result from staying this case does not outweigh the stage of litigation and undue prejudice factors,” particularly because “Plaintiffs have . . . agreed not to amend any of [the asserted] claims in the ongoing reexaminations proceedings. The possibility that these claims will eventually be invalidated as a result of the reexamations is too speculative to be accorded great weight under the circumstances.” Id. at 4.
Judge Richard G. Andrews recently construed eight terms from computer-implemented means-plus-function claims of U.S. Patent No. 5,663,757, titled “Software controlled multi-mode interactive TV systems.” Eon Corp. IP Holdings LLC v. Flo TV Inc., et al., C.A. Nos. 10-812-RGA, 13-910-RGA (D. Del. Mar. 4, 2014). In order to construe a means-plus-function limitation, the court must first determine the claimed function, then “‘identify the corresponding structure in the written description that performs the function.'” Id. at 6 (quoting Applied Med. Res. Corp. v. U.S. Surgical Corp., 448 F.3d 1324, 1332 (Fed. Cir. 2006)). Where the corresponding structure is a computer, however, the patent must do more than simply disclose a general purpose computer as the structure; the patent must disclose an algorithm for performing the claimed function. Id.
The Federal Circuit recognizes a narrow exception to this general rule: “[I]t is ‘not necessary to disclose more structure than the general purpose processor’ when the claimed functions ‘can be achieved by any general purpose computer without special programming.’ Id. at 7 (quoting In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011)). “Examples of functions that can be carried out by a general purpose computer without special programming include: processing, receiving, and storing. By contrast, any function that involves more than merely plugging in a general-purpose computer requires special programming.” Id. (internal citations and quotations omitted).
In light of this law, Judge Andrews construed the following disputed means-plus-function claim terms, finding all of the terms indefinite for failing to disclose a sufficient corresponding structure:
“Means under control of said replaceable software means for indicating acknowledging of shipment of an order from a remote station”
“Means controlled by replaceable software means operable with said operation control
system for reconfiguring the operating modes by adding or changing features and introducing
“Means responsive to said self contained software for establishing a mode of
operation for selection of one of a plurality of authorized television program channels”
“Means establishing a first menu directed to different interactively selectable program
theme subsets available from said authorized television program channels”
“Means for causing selected themes to automatically display a second menu”
“Means controlled by replaceable software means operable with said operation control
system for establishing and controlling a mode of operation that records historical operating data of the local subscriber’s data processing station”
“Means controlled by replaceable software means operable with said operation control
system for establishing and controlling fiscal transactions with a further local station”
“Means for establishing an accounting mode of operation for maintaining and reporting fiscal transactions incurred in the operation ofthe local subscriber’s data processing station”
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• the analysis of the recent standard essential patent (SEP) litigation between Apple and Samsung
Speakers include Judge Sharon Prost of the U.S. Court of Appeals for the Federal Circuit and Lead Judge Michael Tierney of the USPTO Patent Trial and Appeal Board.
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In anticipation of a trial to begin next week between Personalized User Model LLP (PUM) and Google, Judge Stark has issued an order addressing several pending pretrial motions. Judge Stark first granted a motion to exclude Google’s non-infringement expert because he failed to apply one of the Court’ claim constructions, instead making arguments that the Court had rejected during claim construction. By contrast, however, some of the expert’s opinions did not expressly contradict the Court’s constructions but rather went to “fact dispute[s] that will be a proper subject of the infringement trial.” Thus, the motion to exclude was granted in part and denied in part. Personalized User Model, L.L.P. v. Google Inc., C.A. No. 09-525-LPS, Memo. Or. at 2-3 (D. Del. Feb. 27, 2014). Judge Stark then turned to Google’s motion to exclude PUM’s expert, holding: “the Court agrees with Google that Dr. Pazzani shall not provide testimony on legal issues, including his experience at Rutgers with assignment and transfer of patent rights. Dr. Pazzani will be permitted to provide technical evidence, including opinion, from the perspective of one of skill in the art of the patents-in-suit, including whether Dr. Konig’s work ‘related’ to SRI’s work and ‘resulted’ in the patented technology.” Id. at 4.
Judge Stark also considered PUM’s request to preclude Google from trying its claims for conversion before the jury in the upcoming trial. Judge Stark first recognized that Google was correct to assert that it has a Seventh Amendment right to a jury trial for its conversion claim. Nevertheless, Judge Stark did “not believe that Google is entitled to have conversion tried now, to the same jury that is deciding infringement and validity of the patents as well as breach of contract,” and found that such a combined trial ran a risk of confusion and unfair prejudice that would outweigh probative value under F.R.E. 403. “Adding conversion to the forthcoming trial would increase the risk of confusing the jury and unfairly prejudicing PUM, for reasons including that the inclusion of this claim would expressly confront the jury with the reality that if Google prevails, it (Google) will own the patents-in-suit. Under the circumstances, including that damages and willfulness have been bifurcated, this is inappropriate and unnecessary.” Id. at 5-6.
Among other issues considered, Judge Stark granted PUM’s request to preclude any mention of pending reexaminations of the patents-in-suit. “Given the nonfinality of the reexamination proceedings (appeal rights have not been exhausted) and the different standards applicable to reexaminations and litigation, the probative value of the reexamination evidence is substantially outweighed by the risk of unfair prejudice and the risk of confusing the jury.” Id. at 6. Similarly, Judge Stark granted PUM’s request to preclude use of the term “patent troll” but explained that both parties would be permitted to present evidence as to the background and development history of the patent as well as evidence to establish or rebut commercial success of the inventions of the patents-in-suit. Id. at 6-7.
Finally, Judge Stark addressed Google’s motions in limine. His Honor granted Google’s request to preclude evidence of copying or pre-suit knowledge because inducement and willfulness were not part of the upcoming jury trial. Accordingly, “the minimal probative value [of such evidence] is substantially outweighed by the risk of unfair prejudice to Google.” Id. at 8. Judge Stark next denied Google’s request to preclude evidence of Google’s acquisition of another personalization company. “Allowing the jury to learn, through financial information, that Google is a very successful company is not unduly prejudicial to Google. Google may effectively challenge the weight the jury should give this evidence through cross-examination. Similarly, the value Google placed on its acquisition of Kaltix is at least probative of commercial success.” Id. at 8-9.
In Robocast, Inc. v. Microsoft Corporation, C.A. No. 10-1055-RGA (D. Del. Feb. 21, 2014), Judge Richard G. Andrews ruled on defendant’s Omnibus Motion for Summary Judgment as well as plaintiff’s Motion for Summary Judgment of No Unenforceability and No Unclean Hands. The Court granted defendant’s motion in part, and denied plaintiff’s motion. The patent-in-suit, U.S. Patent No. 7,155,451 (the “’451 Patent”) is entitled “Automated browsing system for publishers and users on networks serving internet and remote devices,” and the accused products “can be grouped into two categories: video playlists and changing tiles.” Id. at 3.
Defendant argued that 1) its products do not directly infringe and that plaintiff did not timely disclose a doctrine of equivalents theory; 2) its products do not indirectly infringe; 3) plaintiff cannot assert priority to earlier-filed applications and cannot show prior invention; and 4) defendant has not willfully infringed. Id. at 3. The Court found that genuine issues of material fact remained as to the majority of defendant’s arguments for no direct or indirect infringement, but did grant summary judgment as to no infringement by two accused products in the first category, id. at 8-9, and no infringement of two accused products in the second category, id. at 11. The Court found issues of material fact remained relating to the priority and prior invention issues. See id. at 14-17.
The Court granted defendant’s motion as to willful infringement. As to pre-suit willfulness, plaintiff pointed to “discussions between [the inventor] and employees [of defendant] involving the evaluation of [plaintiff’s] technology” as well as allegations that defendants were aware of the pendency of plaintiff’s patent. Id. at 19-20. These facts did not support a willfulness finding. First, “there [was] no evidence in the record that [defendant] used the specific technology which [plaintiff] demonstrated.” Id. at 20. Citing an SDNY case as persuasive, the Court also observed that “[i]f . . . [defendant] had copied the identical technology, then it might [form] a basis for a finding of willfulness. Here, the accused video playlists are entirely distinct from the web page slideshows which were demonstrated to [defendant]. Just because [defendant] was shown one embodiment does not put them on notice to investigate if distinct technologies might read on the patent which later issued from a demonstration of one particular embodiment.” Second, “[t]here appears to be no controlling case law for the proposition that [defendant] was obligated to have undertaken an affirmative investigation to determine if [the inventor’s] application had matured into a patent.” Id. at 19. Because plaintiff did not move for a preliminary injunction and defendant’s defenses were reasonable, the Court would also not allow a finding of willfulness based on post-suit conduct. Id. at 20-21.
As to plaintiff’s motion for no inequitable conduct and no unclean hands, defendant had alleged that the ‘451 patent was unenforceable, based on either theory, because the inventor submitted a false declaration attempting to swear behind a certain reference. Id. at 22. The application for which the declaration was submitted was abandoned, but the same reference was disclosed and overcome during prosecution of the ‘451 patent, without any reference to the allegedly false declaration. Id. Defendant claimed that the abandoned parent application rendered its child (the application that issued as the ‘451 patent) unenforceable under the “doctrine of infectious unenforceability.” Id.
The Court interpreted Federal Circuit case law related to inequitable conduct for divisional applications to hold that, in the context of continuation applications,
inequitable conduct infects the invention itself, and all claims which form a part of that invention. . . . Continuation applications . . . relate to the same invention. If a patentee who has engaged in inequitable conduct included the invention in one application, all the claims would be unenforceable. If the same patentee split the claims into two applications, why should the result be any different? To hold otherwise would fly in the face of the rule that inequitable conduct renders all claims unenforceable, not just the particular claims to which the inequitable conduct is directly connected.
Id. at 24 (internal citations and quotation marks omitted). Therefore, because it “appeared at a minimum some claims in the ‘451 patent indeed could have been included in the [abandoned] application,” and thus could be unenforceable, the Court denied summary judgment on this issue. Id. at 25. The Court also denied summary judgment on no unclean hands, noting that “[t]he fact that the documents might have been forged before the start of litigation is irrelevant. It is the reliance on forged documents that would be misconduct” forming a basis for unclean hands. Id.
In Nexans Inc. et al. v. Belden Inc. et al., C.A. No. 12-1491-SLR-SRF (D. Del. Feb. 19, 2014), Magistrate Judge Sherry R. Fallon issued a report recommending the denial of plaintiffs’ motion to stay pending the PTO’s inter partes review (“IPR”) determination regarding the validity of United States Patent Nos. 6,074,503; 7,135,641; 7,977,575; and 7,663,061. Id. at 1. In the instant action (“the Delaware action”), plaintiffs have requested a declaratory judgment of invalidity and noninfringement of the patents under IPR, and are asserting an additional patent. Id. at 2. Shortly after the Delaware action was originally filed, the defendants initiated an additional, parallel action in the Southern District of Indiana for patent infringement against plaintiffs. Id. at 3. Each of plaintiffs IPR petitions were granted and are anticipated to be completed by May 2014. Id. at 3, 1 n.1.
Judge Fallon explained that “Plaintiffs did not wait for the litigation to move forward or for expenses to accrue before petitioning for IPR,” which weighed slightly in favor of stay. Id. at 5. Further, “[n]o substantive litigation took place while the parties awaited the court’s decision on the motions to dismiss,” and “fact discovery remains open and the trial is scheduled for December 2015.” Id.
Judge Fallon, however, was persuaded by defendants’ argument that plaintiffs may be “attempting to gain an improper tactical advantage by filing first to secure a Delaware forum, opposing litigation in Indiana and then seeking a stay of the litigation altogether in favor of IPRs.” Id. at 5. Further, Judge Fallon found the status of the IPR proceedings to disfavor stay, given the “substantial amount of time before the close of discovery and the short window of time before the PTO issues its decision in the IPRs.” Id. at 6. Judge Fallon similarly explained that while the IPR could simplify the issues for trial, “[r]eceiving a determination from the PTO early in the discovery phase of the pending case weighs against a stay. The parties will have nearly a year remaining to tailor further proceedings based on the outcome of the IPRs, without disruption to the present scheduling order.” Id. at 7. Judge Fallon additionally noted that the IPR proceedings are scheduled to conclude by May 2014, and the fact discovery deadline is not until December 2015, which weighed against stay. Id. at 8. On balance, Judge Fallon concluded that stay was not warranted and denied plaintiffs’ motion.
Judge Andrews recently issued his construction of dispute claim terms in the patent infringement action filed by plaintiff Openwave Systems, Inc., which is now known as Unwired Planet. Openwave Systems, Inc. v. Apple Inc., et al., C.A. No. 11-765-RGA, Memo. Op. at 1 (D. Del. Feb. 19, 2014). At issue were three claim terms appearing across three patents that were construed as a group: “mobile device,” “wireless mobile telephone,” and “two way communication device.” The only dispute in construing these terms was whether the patentee had disclaimed mobile devices containing “computer modules” as the defendant contended. In a previous ITC investigation, the ALJ had agreed with the defendants that there was such a disclaimer. Judge Andrews explained that this decision, while not binding, was persuasive, and His Honor construed the terms in the same manner as the ALJ. Id. at 2-3. In adopting this construction, Judge Andrews noted that it did not read out a preferred embodiment of the invention, id. at 4, and that it relied only on a disavowal of claim scope that was clear and unambiguous, id. at 4-6.
In a recent report and recommendation, Magistrate Judge Christopher J. Burke recommended that a motion to dismiss the plaintiffs’ allegations of induced infringement be granted. Versata Software, Inc., et al. v. Could9 Analytics, Inc., C.A. No. 12-925-LPS (D. Del. Feb. 18, 2014). Judge Stark had previously dismissed, without prejudice, the plaintiffs’ allegations of indirect infringement in an amended complaint, finding that “[a]ll that is alleged with respect to specific intent to induce the end user is really just legal conclusion and conclusory factual assertions, essentially tracking the statute.” Id. at 2. The plaintiffs then amended their claims in the Second Amended Complaint, and the defendant again moved to dismiss, at which point Judge Stark referred the motion to Magistrate Judge Burke.
The defendant argued that the Second Amended Complaint’s induced infringement allegations still failed to “allege facts plausibly showing that the defendant had knowledge that the alleged direct infringer’s acts constituted infringement.” Id. at 4. More specifically, the defendant argued that the plaintiff failed to allege how end users using the accused products were infringing. Id. Judge Burke explained that “while a plaintiff need not provide a detailed, step-by-step description of the alleged infringement in the complaint, this Court has required some identification of how it is that use of the accused product infringes the patent, in order to plausibly assert that the indirect infringer knew that the downstream use of its products constitutes patent infringement.” Id. at 6 (emphasis in original).
The induced infringement allegations at issue were that the defendant “actively induces . . . the infringement of the [patents-in-suit] by customers that use [the defendant’s] Infringing Products,” and that the defendant “sells the infringing products with the intent that its customers use those products in an infringing manner.” Id. at 8. Judge Burke found the allegations deficient, explaining that “[t]hese allegations do not do the job of plausibly asserting Defendant’s knowledge that the end users’ acts constituted infringement of the patents-in-suit, as Plaintiffs have simply identified the accused products and generically alleged that their use somehow infringes the asserted patents.” Id. However, Judge Burke recommended that the allegations be dismissed, without prejudice, to permit the plaintiff to file a third amended complaint. Id. at 8-9.
The Federal Circuit has issued its highly-anticipated decision in Lighting Ballast Control LLC v. Philips Electronics North America Corp., 2012-1014 (Fed. Cir. Feb. 21, 2014). The en banc decision of Chief Judge Rader and Judges Newman, Lourie, Dyk, Prost, Moore, O’Malley, Reyna, Wallach, and Taranto holds that the de novo standard of review should continue to apply to claim construction issues. As the Court summarized:
“[W]e apply the principles of stare decisis, and confirm the Cybor standard of de novo review of claim construction, whereby the scope of the patent grant is reviewed as a matter of law. After fifteen years of experience with Cybor, we conclude that the court should retain plenary review of claim construction, thereby providing national uniformity, consistency, and finality to the meaning and scope of patent claims. The totality of experience has confirmed that Cybor is an effective implementation of Markman II, and that the criteria for departure from stare decisis are not met.”
Judge Sue L. Robinson recently considered plaintiff’s motion to stay pending reexamination. Gevo, Inc. v. Butamax Advanced Biofuels LLC, et al., C.A. No. 12-301-SLR (D. Del. Feb. 18, 2014). The parties were competitors in the development of “isobutanol technology.” Id. at 2. While the litigation was pending Butamax initiated a reexamination of the patent in suit. After conducting discovery, plaintiff provided defendant Butamax with a covenant not to sue “for the use of ‘Accused Technology,’ defined as certain modified recombinant microorganisms.” Id. at 3. Butamax refused to dismiss its counterclaims, however, and the Court denied a motion to dismiss the claims, based in part “on the cloud cast over Butamax’s research and development efforts from an unclear covenant not to sue.” Id. Judge Robinson determined that in light of the pending reexamination, in which the PTO initially rejected all claims of the patent-in-suit, and the fact that fact discovery and claim construction was complete, a stay would be appropriate:
The parties are preparing for trial in about six months, however, rejection of the patent by the PTO would moot Butamax’s counterclaims of invalidity (the only remaining claims to be litigated). Having considered the arguments put forth by both parties, and considering the time and expense of litigation, the court grants Gevo’s motion to stay the case only until the PTO issues the Right to Appeal Notice. At that time, the parties will have 60 days to resurrect the litigation if they so desire.