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In Neology, Inc. v. Federal Signal Corporation, et al., C.A. No. 11-672-LPS-MPT (D. Del), Magistrate Judge Thynge recently denied plaintiff’s motion for leave to file a motion for partial summary judgment of infringement based on a preliminary claim construction proposed in connection with plaintiff’s earlier motion for preliminary injunction. Id. at 1. In this case, plaintiff filed suit against defendants alleging infringement of six patents-in-suit. Id. at 1. Plaintiff then filed a motion for preliminary injunction. Judge Thynge subsequently issued a Report and Recommendation denying plaintiff’s motion for preliminary injunction, but agreeing, at least in part, with plaintiff’s proposed preliminary claim construction. Id. at 1. The Report and Recommendation was later adopted by Judge Stark. Id. at 1. And, based on that ruling and the proposed claim construction that was agreed to in part in connection with denial of the preliminary injunction, plaintiff moved for leave to file a motion for partial of infringement regarding two of the six patents-in-suit. Id. at 1-2. Plaintiff argued that “no additional evidence or argument merits reconsideration of construction of those claims [that were agreed to]” and stressed that allowing the partial summary judgment motion would “narrow[] the claims and issues . . . for further discovery and trial.” Id. at 2. The Court disagreed. Citing Federal Circuit authority, the Court noted that “[a]lthough [it] did adopt plaintiff’s proposed construction as to certain terms for the purpose of the preliminary injunction, ‘a conclusion of law such as claim construction is subject to change upon the development of the record after a district court’s decision on a motion for preliminary injunction.’” Id. at 4. The Court further noted that the “standard employed at the preliminary injunction stage is far less stringent than what a plaintiff must prove at trial” and that “as a result of the limited effect of claim construction during the preliminary injunction stage, [it] doubts the alleged time and resource savings benefits advanced by plaintiff.” Id. at 4-5.

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In a recent memorandum opinion, Judge Stark denied an ANDA plaintiff’s motion to strike two of the defendant’s affirmative defenses. The plaintiff filed a complaint for patent infringement in response to the defendant’s filing of an Abbreviated New Drug Application, and the defendant asserted counterclaims. The defendant contended that it had provided the plaintiff with a paragraph IV notification before the suit was filed, and therefore, the plaintiff’s infringement suit constituted patent misuse. The defendant also contended that the plaintiff was barred from recovering costs under 35 U.S.C. § 288 because claims of the patents-in-suit were invalid and the plaintiff did not enter a disclaimer of these invalid claims with the PTO before commencing their suit. The plaintiff moved to strike both affirmative defenses, and Judge Stark denied the motion as to the first defense because there were disputed questions of fact and as to the second defense because there were disputed questions of law. Cadence Pharmaceutical, Inc. v. Paddock Laboratories, Inc., C.A. No. 11-733-LPS, at 1-7 (D. Del. Oct. 1, 2012).

Judge Stark first agreed with the “majority of the District Courts within the Third Circuit that have . . . determined that the heightened pleading requirements of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), do not apply to the pleading of affirmative defenses.” “The Court agrees with these authorities,” he stated, “[t]herefore, Plaintiffs’ contention that Defendants’ affirmative defenses are not pled in a manner that would satisfy Twombly and Iqbal is unavailing.” Id. at 2-3. Further considering the sufficiency of the pleading of counterclaims, Judge Stark rejected the plaintiff’s argument that “an affirmative defense of patent misuse must be pled with particularity to satisfy Federal Rule of Civil Procedure 9(b ).” Judge Stark found that “[i]t is unclear from the pleadings whether the defense sounds in fraud and this Court is unaware of any cases that hold that patent misuse claims inherently sound in fraud.” Id. at 5 n.2.

Judge Stark then turned to the defendant’s contention that it had provided plaintiff with a paragraph IV notification before the suit was filed, explaining how the patents-in-suit were not infringed by the proposed ANDA product and were invalid or unenforceable, and that the plaintiff had therefore engaged in patent misuse by filing a baseless complaint with no reasonable basis for doing so that “impermissibly broadened the physical or temporal scope of the patent grant with anticompetitive effect.” Id. at 3-5. Judge Stark refused to strike this defense, finding that “[a]lthough Defendants have not nearly proven the purported facts on which their patent misuse defense is based (and may never do so), neither does the Court perceive any clear deficiency in the pleading that would justify the relief of striking the affirmative defense and removing it from this case.” Id. at 5.

Judge Stark also refused to strike the defendant’s affirmative defense under § 288. The defendant contended that § 288 barred the plaintiff from recovering costs because the plaintiff did not enter a disclaimer of invalid claims at the PTO prior to commencement of the suit. Judge Stark pointed out that there had been “no finding that any claim of the patents-in-suit is either invalid or unenforceable . . . [and] Plaintiffs cite persuasive authority, in the form of non-precedential decisions from the Federal Circuit and this District, to the effect that§ 288 applies only when patent litigation is commenced after a determination of invalidity.” Id. at 5-6. Although this authority was not precedential, especially in the sense that “there is no such thing as ‘the law of the district,’” id. at 6 n.3, the Federal Circuit has generally agreed with this conclusion, stating that “the argument essentially relied on here by Defendants ‘borders on the ridiculous.’” Id. at 6 (citing Bradford Co. v. Jefferson Smurjit Corp., 2001 WL 35738792, at *7 (Fed. Cir. Oct. 31, 2001)). Nevertheless, because the defendant cited to “arguably inconsistent authority from the Supreme Court and the Third Circuit, among others, construing the predecessor statute to § 288, [a] motion to strike [was] not the appropriate vehicle to resolve this disputed question of law,” and Judge Stark denied the motion. Id. at 6-7.

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Judge Leonard P. Stark recently denied Comcast’s motion to dismiss for lack of jurisidiction. DN Lookup Technologies LLC v. Comcast Corporation, et al., C.A. No. 11-1181-LPS (D. Del. Oct. 1, 2012). In determining whether personal jurisdiction exists, the court first looks to Delaware’s long arm statute, 10 Del. C. § 3104(c), and then determines whether asserting personal jurisdiction would violate due process. Id. at 5-6. Plaintiff argued that the court had specific jurisdiction under Delaware’s long arm because “Comcast provide[d] infringing services in Delaware” and because “Comcast enjoy[ed] substantial revenues from its subsidiaries[.]” Id. at 7. Comcast argued that it” [did] not own, operate, sell, market, offer to sell, or otherwise provide any cable produces or services in Delaware.” Judge Stark found otherwise, however. For example, a press release on the comcast.com website notified the public of Comcast’s launch of WiFi in northern Delaware and additional hotspots in and around Wilmington, Delaware. Id. at 7-8. In addition, “the Comcast Agreement for Residential Services entered in to by Wilmington, Delaware customers directs customers to resolve problems by contact ing Comcast.” Id. at 8. In addition, Judge Stark found that plaintiff made out a prima facie case that defendant Comcast Cable Communications LLC (“CCCL”) was the agent of Comcast when providing accused services in Delaware. Id. at 8. Among other things, Comcast held “itself out to the public as being principally involved in the development, management and operation of cable systems and in the delivery of programming content.” Id. Comcast also “enjoy[ed] substantial revenues from CCCL, its wholly-owned subsidiary[, and] divert[ed] free cash flow from its subsidiaries, including CCCL, to distribute dividends to its own shareholders.” Id. at 8-9. Judge Stark also determined that due process was satisfied for the aforementioned reasons. Id. at 10-11.

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Chief Judge Gregory M. Sleet recently clarified the effect of the term “comprising” in claim construction. See Hollingsworth & Vose Filtration Ltd. v. Delstar Tech., Inc., et al., C.A. No. 10-788-GMS (D. Del. Sept. 25, 2012). This came as part of the Court’s order clarifying its previous claim construction order, in which it construed the following language found in Claim 1 of U.S. Patent No. 6,623,548: “filter material comprising: a blend of polypropylene fibres and dry spun halogen free acrylic fibres” to mean “a mixture of fibres that includes at least polypropylene fibres and dry spun halogen free acrylic fibres. Dry spun halogen free fibres means halogen free acrylic fibres made by a process of dry spinning in which the polymer is formed into fibres by extrusion into a gas such as air and not by extrusion into a liquid coagulation bath.” Id. at 1 n.1; D.I. 50 at 1 (previously discussed here).

The Court clarified its previous construction to address the defendants’ question whether, in Claim 1, “the ‘blend’ is open to the inclusion of other types of unrecited fibres, or whether it is only the ‘filter material’ that can include other types of unrecited fibres.” Id. at 1-2 n.1 (quoting D.I. 53 at 5). The Court clarified that the word “blend,” as used in Claim 1, “is not limited to only polypropylene fibres, dry spun halogen free acrylic fibres, and polyvinyl chloride fibres but, rather, is open to the inclusion of other types of unrecited fibres, including wet spun halogen free acrylic fibres.” Id. at 1. That clarification, however, was not the result of the interplay of the words “comprising” and “blend,” as urged by the plaintiff. The Court explained that “[t]he transition ‘comprising’ generally renders the preceding term (e.g., the ‘filter material’) open-ended, but it has no such effect on subsequently recited claim elements (e.g., the ‘blend’).” Id. at 1-2 n.1 (citing Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337, 1343 (Fed. Cir. 2007) (previously discussed on Patently-O)). However, the Court agreed with the plaintiff that “like ‘comprising’—the term ‘blend’ itself ordinarily conveys the concept of ‘including, but not limited to.’” Id. at 1-2 n.1. Citing the Federal Circuit’s decision in Mars, Inc. v. H. J. Heinz Co., 377 F.3d 1369 (Fed. Cir. 2004) (recognizing that the term “mixture” is open-ended), the Court found that the defendant’s acknowledgement that “[t]he blend is a mixture of fibres[]” required that the claim term “blend” not be limited to a blend of only the subsequently recited fibres. Id. at 1-2 n.1.

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Managing editor and co-author of Delaware IP Law Blog, Pilar G. Kraman, is a featured author in the latest issue of Managing IP’s, Intellectual Property Focus. This special “Americas IP Focus 2012” showcases commentary and analysis from IP lawyers throughout the Western Hemisphere, and is distributed to IP Owners and IP lawyers around the world. The publication will also be distributed to attendees of major IP conferences in October including: the AIPLA annual meeting; the LES US & Can annual meeting; and the AIPPI world congress. You can read Pilar’s article below, “Trends in Delaware post-Twombly,” which discusses recent developments in the District of Delaware regarding the sufficiency of pleadings alleging indirect and direct patent infringement.

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Judge Richard G. Anderson recently disqualified the law firm Latham & Watkins as defense counsel in a patent infringement action filed by the subsidiary of a former Latham client. Eon Corp. IP Holdings LLC v. Flo TV Inc., et al., C.A. No. 10-812-RGA (D. Del. Sept. 24, 2012). Latham represented the plaintiff’s parent company between 1988 and 1995, but did not represent it in patent prosecution matters, or with regard to any licensing efforts involving the patent at issue. Id. at 3, 7. Instead, Latham represented the plaintiff’s parent company in general corporate and regulatory matters. Id. at 3. The Court noted that some of those corporate and regulatory matters related to the same or similar technology at issue in the patent litigation. Id. at 3.

There was no dispute that the two Latham attorneys who had been admitted pro hac vice in the litigation were not at Latham during the firm’s prior representation, and it was acknowledged that they were subject to an ethical wall. Id. at 3. Neverthelss, the Court was concerned because, “[s]ome of the invalidity defenses, if pursued, could involve factual inquiry into” the activities of the plaintiff’s parent company when it was represented by Latham, “and it is conceivable that the information about related factual matters could have been shared with Latham attorneys.” Id. at 7. As a result, the Court found that “the answer to the question, ‘might [the plaintiff] have disclosed to Latham confidences which could be relevant to the present action, and detrimental to [the plaintiff] in this action,’ is surely yes.” Id. at 8.

The Court explained that, “[i]n terms of the conflict [of interest] analysis, it makes no difference that seventeen years have passed since Latham represented [the plaintiff’s parent company], when the lawsuit will in part concern events that occurred twenty years ago.” Id. The Court acknowledged that the conflict of interest could be viewed as having been ameliorated in various ways: by the passage of time, the imposition of an ethical wall, and the fact that the two attorneys involved in the litigation were not involved in the previous representation. Neverthelss, the Court found that “on balance, considering the rather unusual circumstances of the conflict of interest here, I believe the most appropriate exercise of my discretion is to disqualify Latham and Watkins … .” Id. at 10.

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At plaintiff’s request, Judge Leonard P. Stark recently stayed a patent infringement lawsuit pending the court’s resolution of motions for summary judgment in related cases. St. Clair Intellectual Property Consultants, Inc. v. Motorola Mobility LLC, C.A. No. 11-1305-LPS (D. Del. Sept. 20, 2012). Plaintiff argued that a stay was appropriate because “multiple summary judgment motions, including several seeking to invalidate patents asserted here, [were] pending before this Court in related patent infringement cases.” Id. at 2. Defendant complained that a stay would prejudice it because the defendant had already complied with court ordered deadlines, particularly regarding claim construction, and plaintiff would have additional time “to refine its theories or strategies[.]” Id. at 3. Judge Stark did not think this prejudice rose to the level of undue, but noted that plaintiff’s failure to comply with the court’s scheduling order deadlines could be “most appropriately addressed, if necessary, in the context of Defendant’s recently-filed motion for sanctions.” Id.

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In a recent memorandum order, Judge Leonard P. Stark granted Plaintiff British Telecommunications’ (BT’s) motion for leave to file a supplemental complaint for patent infringement against Defendant Google. BT sought to file a supplemental complaint in order to include claims of indirect infringement for events occurring after the filing of its original complaint. More specifically, BT sought to add Google’s newly introduced product, Google Play, and to include indirect infringement claims based on Google’s knowledge of the patents-in-suit since at least the filing of the original complaint. British Telecommunications PLC, v. Google Inc., C.A. No. 11-1249-LPS, at 1 (D. Del. Sep. 20, 2012).

Noting that the Third Circuit “has adopted a liberal approach to granting leave to amend,” Judge Stark was “persuaded that the proper course of action is to grant Plaintiffs motion for leave to amend.” Id. at 1-2. He found “no evidence of undue delay, bad faith, or dilatory motive on the part of Plaintiff,” especially where “Plaintiff filed its motion before discovery began, within the time frame for supplementing or amending pleadings as set forth in the Scheduling Order, and within four months of filing its original complaint.” Id. at 2. Accordingly Judge Stark granted BT’s motion for leave to file a supplemental complaint.

This result is in accord with Judge Stark’s prior decisions regarding the knowledge requirement of indirect infringement, and Judge Stark stated as much: “Defendant’s argument that the motion is futile because Plaintiff fails to state a plausible claim of indirect infringement is unpersuasive. While Defendant notes that decisions in this District are not uniform as to whether knowledge of a patent may be demonstrated by filing of a complaint, the undersigned judge has expressed the view that, for purposes of indirect infringement occurring after the filing date, ‘an accused infringer is on notice of the patent(s)-in-suit once an initial pleading identifies the patents-in-suit.’” Id. at 2 (citing Softview LLC v. Apple Inc., 2012 WL 3061027, at *7 (D. Del. July 26, 2012)).

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In Senju Pharmaceutical Co., Ltd., et al. v. Apotex Inc., et al., C.A. No. 11-1171-SLR (D. Del.), Judge Robinson dismissed plaintiffs’ claims of infringement for failure to state a claim where the allegations were asserted against the same defendants and based on the same patent and same ANDA filing that the Court had ruled upon in a prior litigation. Id. at 1. In that prior litigation, plaintiffs filed suit against defendants for infringement of the patent at issue based on defendants’ ANDA filing. Id. at 1. At the conclusion of that case, the Court entered final judgment against plaintiffs, invalidating the asserted claims of the patent at issue as obvious. Id. at 2-3. However, while that prior litigation was still pending, without notifying the Court, plaintiffs initiated and were engaged in reexamination proceedings involving the same patent at issue. Id. at 1. Following the reexamination proceedings, plaintiffs then filed the instant litigation against defendants alleging infringement of those “new” claims of the patent at issue that were “added or amended” during reexam. Id. at 1. In response, defendants moved to dismiss the instant action based on the doctrine of res judicata or claim preclusion. Id. at 6. Specifically, defendants argued that dismissal was proper because “the claims of the current lawsuit are precluded” by the judgment against the plaintiffs in the prior litigation. Id. at 6. The Court agreed. Id. at 6. Citing both Third Circuit and Federal Circuit authority, the Court noted that “[c]laim preclusion bars any new legal claim based on the same cause of action previously asserted” and that “[e]ach patent, not patent claim, gives rise to an independent and distinct legal claim or cause of action.” Id. at 7 (emphasis in original). In its analysis, the Court concluded that in the instant litigation the plaintiffs “are alleging infringement by the same proposed product that was at issue in the first litigation” and that “[plaintiffs] could have asserted the equivalent of the new and amended claims in the first litigation.” Id. at 8-9. The Court held that the “reexamination of the patent-at-issue did not create a new cause of action against the same previous defendant and accused product and reasoned that “[a]llowing this case to go forward would open the door to relitigation of a matter that has already been decided on the merits.” Id. at 11.

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Judge Sue Robinson recently granted a defendant summary judgment of non-infringement based on the doctrine of patent exhaustion. Keurig, Inc. v. Sturm Foods, Inc., Civ. No. 10-841-SLR (D. Del. Sept. 13, 2012). The plaintiff in the case, Keurig, is the manufacturer of popular beverage brewers, as well as individual serving cartridges for use in its brewers. Id. at 1. Keurig sued the defendant, Sturm Foods, asserting various patent and non-patent claims, based on the defendant’s manufacture and sale of its “Grove Square” line of individual serving cartridges, the packaging of which indicates that they are “*For use by owners of Keurig coffee makers.” Id. at 3. In one of several competing motions for summary judgment, the defendant argued that the doctrine of patent exhaustion precluded a finding of infringement. The Court agreed, explaining that the “purpose of the patent exhaustion doctrine is to ensure that a patentee surrenders its statutory monopoly after it has received compensation for an article sold that embodies its patent.” Id. at 10. Here, the “article sold” was the patented brewer. The Court distinguished the case from those in which patent exhaustion arises in connection with the sale of an “incomplete” item because, in this case, Keurig “sells a product that completely practices the patent. … There is no need to determine the extent to which the brewers embody the patent when the brewers are sold in a completed form. For this reason, the court agrees with defendant that the two-prong test [under Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008)] is inapplicable; instead, the ‘long standing doctrine’ that an ‘initial authorized sale of a patented item terminates all patent rights to that item’ is applicable. Id. at 9-10 (quoting Quanta, 553 U.S. at 625). With regard to the non-patent claims (including trademark and trade dress infringement, unfair competition, and false advertising), the Court found that genuine issues of material fact exist which precluded entry of summary judgment.

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