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Chief Judge Gregory M. Sleet recently denied a defendant’s motion to stay litigation pending inter partes review by the PTO. Davol, Inc. v. Atrium Medical Corp., C.A. No. 12-958-GMS (D. Del. June 17, 2013). The Court found that two of the three stay considerations weighed in favor of granting the motion (issue simplification and stage of litigation). Id. at 9-11. The Court denied the motion to stay, though, finding that the risk of undue prejudice to the plaintiff resulting from a stay outweighed the potential benefits inter partes review could have on the litigation in terms of simplifying the case. Id. at 11-12. As the Court explained, “the PTO proceedings are in their earliest stage and could be expected to last for nearly two years[,]” resulting in a delay in litigation that “risks unnecessarily impairing [plaintiff’s] patent rights[.]” Id. at 4-5. The Court was especially concerned about potential prejudice to the plaintiff given that the parties were direct competitors in a “relatively exclusive market”. Id. at 6. The Court rejected the defendant’s argument that any concern about the competitive position of the plaintiff should be reduced as a result of the plaintiff’s willingness to license its patented technology, explaining that “while eventual money damages might be sufficient to compensate [plaintiff] for lost sales, the prospect of lost market share and price erosion injects an added measure of uncertainty into this action.” Id. at 7.

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In St. Jude Medical, Cardiology Division, Inc., et al. v. Volcano Corp., C.A. No. 12-441-RGA (D. Del. May 30, 2013), Judge Richard G. Andrews recently construed the following disputed claim terms of U.S. Patent No. 6,565,514, entitled “method and system for determining physiological variables”:

-“displaying said graph”
-“detecting continuously at least two physiological variables, arterial pressure (Pa) and distal coronary pressure (Pd), derived from the guidewire-mounted pressure sensor”
-“sensor element”

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Today the Federal Circuit held that the Court has jurisdiction to entertain appeals from determinations on patent infringement liability where damages and/or willfulness issues have yet to be decided due to bifurcation. Robert Bosch, LLC v. Pylon Manufacturing Corp., No. 2011-1363, -1364, at 26-27 (Fed. Cir. June 14. 2013). As discussed here, the Federal Circuit decided sua sponte to grant a rehearing en banc on these issues in August 2012.

The Court explained that this case “does not involve the question of whether the district court has the authority to bifurcate the willfulness and infringement issues. As a general matter, it does.” Id. at 22. It “ma[d]e clear that district courts, in their discretion, may bifurcate willfulness and damages issues from liability issues in any given case.” Id. at 26. The Court did observe, with regard to its holding on bifurcation of liability and damages, that “[m]odern patent damages trials, with their attendant discovery, are notoriously complex and expensive. . . . Given the substantial reversal rate of liability determinations on appeal, the whole expense of a damages trial is often wasted. Accordingly, those policy concerns that motivated Congress to grant jurisdiction over cases that are final except for an accounting [of damages] support our holding today.” Id. at 20.

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The U.S. Supreme Court’s much anticipated decision in Association for Molecular Pathology, et al. v. Myriad Genetics, Inc., et al., 569 U.S. ___, issued June 13, 2013. In short, the Supreme Court analyzed whether an isolated DNA sequence is patent eligible in light of the fundamental principle that laws of nature, natural phenomena, and abstract ideas are not patentable. The Supreme Court held that mere isolation of an otherwise naturally occuring genetic sequence of DNA is not patent eligible but that a non-naturally occuring DNA sequence may be subject matter eligible for patenting, so long as the other conditions for patenting are met (e.g., novelty, non-obviousness, written description).

While many divergent views are forming on the impact this decision will have on the biotech industry, its impact on patent litigation in Delaware is broadly predictable. In appropriate circumstances, new patent validity challenges can be anticipated against DNA sequence claims asserted in this District and new litigation may flow from the entry of several new competitors expected to offer genentic tests for various diagnostics, some of which will undoubtedly be the subject of a patent controversy within Delaware’s jurisdiction.

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Judge Robinson recently considered a motion to dismiss defendant’s counterclaims and to strike certain affirmative defenses related to the invalidity of the patent in suit, as well as certain background information. Joao Bock Transaction Systems, LLC v. Jack Henry & Associates, Inc., C.A. No. 12-1138-SLR (D. Del. June 13, 2013). Judge Robinson denied plaintiff’s motion finding that defendant’s counterclaims provided sufficient detail to give rise to a plausible claim for relief. Id. at 4-5. Specifically, defendant’s answer and counteclaim “include[d] numerous details indicating why Jack Henry believe[d] the ‘003 patent [was] invalid,” such as because the patent in suit was a continuation of a patent determined to be invalid, and because prior art existed prior to a year before the patent application. Id. at 5.

Judge Robinson also denied plaintiff’s motion to strike. Regarding defendant’s introductory section, Judge Robinson found that the material, including references to prior litigation, had “evidentiary or legal signifcance,” and should not be stricken. Id. at 5-6. Judge Robinson declined to strike defendant’s affirmative defenses, finding that sufficient supporting facts were present in defendant’s responsive pleading. Id. at 6.

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In a recent memorandum opinion, Judge Sue L. Robinson denied a defendant’s motion to transfer to the Central District of California litigation involving a patented codec used for encoding video onto Blue-ray discs. FastVDO LLC v. Paramount Pictures Corp., Civ. No. 12-1427-SLR (D. Del. June 4, 2013). The plaintiff was a Florida limited liability company with headquarters in Florida, and was significantly smaller (with significantly less litigation experience) than the defendant, a Delaware corporation with its headquarters in California. Id. at 1, 4. The defendant argued that the allegedly infringing coding was performed by authoring houses operating primarily in California, but the Court disagreed, noting that the authoring houses were headquartered in California, but performed coding in facilities located in Indiana, Pennsylvania, and New York. Id. at 1. As a result, and combined with the fact that Blue-ray discs are sold across the country, the Court found that the alleged infringement did not occur principally in California. Id. at 4. The Court gave little weight to the defendant’s argument that the authoring houses’ documents would be outside the Court’s subpoena power, explaining that since “the authoring houses manufacture the Blue-ray discs at the behest of [defendant], it is unlikely they would refuse any reasonable request to produce information from their business partner in electronic format.” Id. at 5. The Court also found that while trial would be less expensive for the defendant in California, it would be more expensive for the plaintiff than litigating in Delaware. As a result, the Court explained that “[a]lthough Delaware is not the locus of any party’s business activities, it is a neutral forum and no more inconvenient for [defendant] than Florida, the locus of [plaintiff’s] business activities.” Id. at 6. All of this, combined with the fact that 24 other Blue-ray cases filed by the plaintiff were pending in Delaware, convinced the Court that transfer was not warranted. Id. at 7-8.

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Chief Judge Sleet has granted a patent infringement defendant’s motion for a stay pending completion of inter partes reexamination of several patents-in-suit. See BodyMedia, Inc. v. Basis Science, Inc., C.A. No. 12-133-GMS, Order at 1-3 (D. Del. June 6, 2013). Judge Sleet first found that a stay would not result in undue prejudice to the plaintiff. The PTO had granted six of the defendant’s seven reexamination requests, thus mooting the plaintiff’s objection that the PTO had not yet acted on the requests. Furthermore, the parties’ competitive relationship did not weigh against granting a stay in light of the fact that the defendant had not yet sold its product and the plaintiff had not sought a preliminary injunction. Finally, Judge Sleet rejected the plaintiff’s allegations of potential prejudice, given that “the potential for litigation delay, by itself, is insufficient to demonstrate that [the plaintiff] will be unacceptably prejudiced” and “the timing of the reexamination and stay requests do not evidence any dilatory motive.” Id. at 3. Judge Sleet also found that the simplification-of-issues-in-question factor favored granting a stay: “[I]f the court were to deny [the defendant’s] request for a stay, it would be adjudicating less than ten percent of [the plaintiff’s] 243 asserted claims. Further, 15 of the 22 claims not covered by the pending reexaminations depend on claims that have been rejected. Thus, while [the plaintiff] is correct that there will be issues for judicial resolution not involved in the inter partes reexamination, the court is convinced that, in view of the foregoing, the reexamination proceedings will simplify the overlapping issues present in the reexamination and that will ultimately be before the court.” Id. Thus, Judge Sleet concluded, “a stay of this action will promote judicial economy and avoiding wasting the parties’ efforts and expense in parallel proceedings.” Id.

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Judge Andrews recently considered defendants’ motion to exclude plaintiffs’ nine experts in advance of a bench trial. VIIV Healthcare UK Ltd. v. Lupin, C.A. No. 11-576-RGA (D. Del. May 30, 2013). In support of their motion, defendants submitted more than “1600 pages of appendices . . . , as well as briefing not only on the merits but on collateral argumetns such as compliance with the local rules and the submission of an expert affidavit.” Id. Judge Andrews denied defendants’ motion and instructed defendants as to the procedure to renew the objections at trial. Id. at n.1. In doing so, Judge Andrews noted:

While I acknowledge the “gate-keeper” function of a federal trial judge, it is inefficient in the extreme to spend hours trying to figure this out in advance of a bench trial in which the likelihood is that the experts are going to testify in any event. In addition, live testimony and cross-examination, in the context of the issues actually in dispute at trial, are much more likely to result in a correct decision from me about whether an expert is giving appropriate reliable scientific testimony, or using bad data and/or inappropriate methods to reach unreliable conclusions.

Id. at. 1-2.

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Magistrate Judge Christopher Burke has denied patent infringement defendant Yahoo!’s motion to stay in a case referred to Judge Burke for resolution of all pretrial matters. See Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-908-LPS-CJB, Memorandum Order at 1 (D. Del. May 30, 2013). Plaintiff Pragmatus sued Yahoo! for patent infringement in the District of Delaware in 2011. During 2012, Yahoo! filed a motion to transfer venue to the Northern District of California, and the Court denied the motion. In early 2013, however, Pragmatus filed a separate lawsuit involving two new patents against Yahoo! in the Northern District of California. Yahoo! promptly filed a renewed motion to transfer venue along with a motion to stay the Delaware proceedings pending resolution of its renewed motion to transfer. Id. at 1-2. Judge Burke considered only the motion to stay, leaving resolution of the renewed motion to transfer for another day.

Considering first the status of the litigation, Judge Burke found that the “case is by no means in its early stages.” Not only was the fact discovery deadline approaching, but the Court had “expended significant resources on the matter,” resolving a motion to transfer, a motion to dismiss, and numerous discovery disputes. “Our Court,” Judge Burke explained, “has found that in such circumstances, it is more difficult for a stay to be characterized as promoting the efficient use of judicial resources.” Accordingly, “the stage of this litigation—with some important case events still ahead, but with many having already been completed—weighs slightly against a stay.” Id. at 4-5.

Judge Burke next considered whether a stay would simplify issues in the case. Yahoo! argued that a stay or transfer would simplify issues and promote judicial efficiency by preventing duplication of effort between the Delaware and California courts. As Pragmatus argued and Judge Burke agreed, however, this argument for simplification was purely speculative in that “a stay would only prevent duplicative litigation if this Court were to (1) later grant the renewed Motion to Transfer; and then (2) this action and the California Action were consolidated for discovery and trial in the Northern District of California; and (3) that consolidation occurred in such a manner as to reduce or eliminate the prospect for the type of duplicative discovery that Yahoo! is concerned about among the two actions.” Judge Burke continued, “if one or more of those eventualities do not later occur . . . the proposed stay will likely result in complication, not simplification—it will have frozen the progress of this case as discovery nears its end, without much or any resulting efficiency benefit to this Court or the Northern District of California. . . . A stay at this precise point in the litigation, even pending decision on the renewed Motion to Transfer, would complicate the orderly proceeding of the completion of the discovery period, which is otherwise currently in full swing as this very motion awaits resolution.” Therefore, “[i]n light of the speculative nature of the prospect for simplification . . . the Court [found] that this factor weighed against a stay.” Id. at 5-7.

Finally, Judge Burke considered the possibility of prejudice to either party and found that, although there was some possibility of prejudice, it did not meaningfully favor either granting or denying a stay. Thus, all three factors relevant to the stay analysis either weighed against granting a stay, or were neutral, and Judge Burke denied the motion to stay. Id. at 7-10.

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Judge Richard G. Andrews recently issued a claim construction Order relating to three cases that had been consolidated for Markman purposes. Power Management Solutions, LLC v. Intel Corporation, et al., C.A. No. 11-743-RGA; Power Management Solutions LLC v. Advanced Micro Devices, Inc., C.A. No. 12-426-RGA-CJB; Power Management Solutions, LLC v. NVIDIA Corporation, C.A. No. 12-427-RGA (D. Del. May 30, 2013). The patent-in-suit is U.S. Patent No. 5,504,909, entitled “Power management apparatus collocated on the same integrated circuit as the functional unit that it manages.”
Judge Andrews construed the following disputed terms for all three cases:

-“internal” and “external”
-“internal functional circuit”
-“external functional circuit”
-“externally generated”
-“second externally generated electrical signal”
-“internal functional circuit function”
-“allowing submicrosecond recovery of internal functional circuit function upon the assertion of the second externally generated electrical signal”
Judge Andrews also construed the following terms specifically for Power Management Solutions, LLC v. Advanced Micro Devices, Inc., C.A. No. 12-426-RGA-CJB:

-“first electrical signals”
-“electrical power is controllably passed from an external power supply through the power gating means to the internal functional circuit”
-“one or more first electrical signals are controllably passed between an external functional circuit and the internal functional circuit via the switching means”

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