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A jury recently awarded a plaintiff $50 million in damages based on a 6% royalty rate after finding that the defendant induced and contributed to the infringement of U.S. Patent No. 7,011,831 (“Recombinant α-galactosidase A therapy for Fabry disease”), and that the asserted claims were not invalid as anticipated, for failure to meet the written description requirement, or for failure to meet the enablement requirement. Shelbyzyme LLC v. Genzyme Corp., C.A. No. 09-768-GMS (D. Del. July 17, 2012).

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In BAE Sys. Info. and Elec. Sys. Integration Inc. v. Aeroflex Inc., C.A. No. 09-769-LPS (July 23, 2012), Judge Stark denied defendants’ Rule 11 sanctions motion, filed after Judge Stark granted defendants’ summary judgment motion of noninfringement pursuant to 28 U.S.C. § 1498 and summary judgment motion on plaintiff’s remaining state law claims on statute of limitiations grounds. Id. at 1-5. Defendants argued that Rule 11 sanctions were appropriate because plaintiff’ brought a “knowingly frivolous” and “baseless” patent infringement action against defendants. Id. at 5-7. Judge Stark disagreed. Specifically, defendants did not prove that plaintiff’s proposed claim constructions supporting its claims were not reasonable. “While [defendants] proposed an alternative construction . . . that proves only that there was a dispute, not that [plaintiff] was frivolous in its advocacy.” Id. at 9 (emphasis in original).

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Judge Andrews recently issued a memorandum order denying plaintiff’s motion for partial summary judgment of no inequitable conduct. Bristol-Myers Squibb Co. v. Teva Pharmaceuticals USA, Inc., C.A. No. 10-805-RGA (D. Del. July 19, 2012). Defendant’s inequitable conduct defense was premised on the failure of the inventor of the patent-in-suit and two prosecuting attorneys to disclose to the PTO prior art relating to “the compound 2’-CDG.” Id. at 1. Judge Andrews explained the applicable law set forth by the Federal Circuit in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290-91 (Fed. Cir. 2011) (see write up at Patently-O) and noted that it “was intended to cut back on inequitable conduct as a defense.” Id. at 3. At the Summary Judgment stage, Judge Andrews stated that the only issue was “whether at least one of the three accused individuals knew the withheld information was material and made a deliberate decision to withhold it.” Id. Despite plaintiff’s evidence that the inventor and two attorneys did not make an intentional decision to withhold the prior art and did not consider the prior art material, Judge Andrews decided that summary judgment would be inappropriate because “the ‘materiality’ question [was] one on which two experts differ, and [he did] not know which one [he was] going to accept.” Id. at 4. Judge Andrews concluded by noting that “[i]t is often difficult to prove someone’s state of mind about something the person did yesterday. To prove by clear and convincing evidence that a person intended to deceive the PTO twenty years ago in the absence of any direct evidence that he did so, is about as difficult as climbing Mt. Everest. I cannot say, however, as a matter of law that it cannot be done.” Id.

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Judge Andrews recently granted defendant’s motions to exclude two of plaintiff’s experts in Bristol-Myers Squibb Co. v. Teva Pharmaceuticals USA, Inc., C.A. No. 10-805-RGA (D. Del. July 17, 2012). Judge Andrews excluded plaintiff’s patent law expert because the report and testimony would not assist the trier of fact. Id. at 1. Judge Andrews also excluded, as cumulative and redundant, plaintiff’s chemistry expert, “with the understanding that Defendant will not object based on the expert discovery rules to Plaintiff’s other ‘esteemed nucleoside chemist’ covering the same material[.]” Id.

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Judge Andrews has continued to issue orders regarding the sufficiency of pleadings under Twombly and Iqbal in several recent patent infringement cases. We have previously covered several Judge Andrews orders regarding pleading standards, including IPLearn, LLC v. BeeLine Acquisition Corp., HSM Portfolio LLC v. Fujitsu Ltd., Real Time Social Inventions LLC v. CMI Marketing Inc., and IPVenture Inc. v. Lenovo Group Limited, et al. Judge Andrews recently considered similar motions to dismiss or amend direct and indirect infringement claims in three new orders, Pragmatus Telecom, LLC v. Ford Motor Co., C.A. No. 12-92-RGA (D. Del. Jul. 5, 2012); Chalumeau Power Sys. LLC v. Alcatel-Lucent, C.A. No. 11-1175-RGA (D. Del. Jul. 18, 2012); and Howard Foundation Holdings Ltd. v. Int’l Vitamin Corp., C.A. No. 12-35-RGA (D. Del. Jul 11, 2012).

Judge Andrews addressed direct infringement in Pragmatus, reiterating that compliance with Form 18 is sufficient to adequately plead direct infringement under In re Bill of Lading Transmission and Processing System Patent Litigation, 681 F.3d 1323 (Fed. Cir. 2012) (write-up at Patently-O). On this basis, Judge Andrews refused to dismiss claims of direct infringement. Pragmatus at 2.

But on indirect infringement, Judge Andrew granted motions to dismiss in Pragmatus and Chalumeau. In both cases, he found that insufficient facts were alleged to allow an inference that the allegations of indirect infringement were plausible: “The allegations of both forms of indirect infringement suffer from the bare bones nature of the complaint. Some facts would put some flesh on the bones, and might, or might not, make the allegations plausible. Until such facts are pled, however, the complaint fails to state a claim for indirect infringement.” Pragmatus at 2-3. Furthermore, “[b]oth induced infringement and contributory infringement require the defendant to know of the patent, and to know that the defendant’s actions are either inducing or contributing to another’s direct infringement. . . . [T]here are only insufficient factual assertions to support the legal conclusion of actual knowledge, and no factual assertions at all to support the legal conclusion of specific intent.” Chalumeau at 1-2. On this later issue of knowledge of the patent, Judge Andrews again stated that under Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011) (write-up at Patently-O), “[s]ervice of the original complaint gives the defendants actual notice of the patent’s existence. It might also make plausible the claim that the defendant has the knowledge that third parties who are selling its product are directly infringing the [patent-in-suit].” Chalumeau at 2-3; Pragmatus at 2-3.

Finally, Judge Andrews addressed allegations of willful infringement in Chalumeau and Howard. Here too, he found that the complaints at issue had not plausibly alleged that the defendants knew or should have known that their actions constituted infringement of a valid patent. Chalumeau at 3; Howard at 1. Moreover, in Howard, which involved a complaint against a customer of allegedly-infringing technology, Judge Andrews stated: “I do not think . . . that someone telling a manufacturer that it infringes a patent supports as a plausible inference that the manufacturer broadcasts the allegation to its customers.” Howard at 1 n.1.

Although Judge Andrews dismissed claims of indirect and willful infringement in Pragmatus and Chalumeau, he either did so without prejudice to amend “before the close of fact discovery should any of [the plaintiff’s] theories gather more factual support” or indicated that he would “not foreclose” the possibility of amendment after a Rule 16 conference. Pragmatus at 3; Chalumeau at 3. In Howard, despite concluding that the plaintiff had not adequately plead willfulness, he granted the plaintiff’s motion for leave to file a first amended complaint. Howard at 1 n.1.

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Chief Judge Sleet recently issued a claim construction order after holding a Markman hearing in the patent infringement case Hollingsworth & Vose Filtration Ltd. v. Delstar Techs., Inc., C.A. No. 10-788-GMS (D. Del. Jul. 10, 2012). In the order, Judge Sleet construed the following terms:

– “comprising . . . a blend of polypropylene fibres and dry spun halogen free acrylic fibres”
– “substantially smooth surfaces”
– “significantly reduced cracks and fissures in the surfaces of the acrylic fibres than if produced by wet spinning”
In construing the first of these claim terms, Judge Sleet found the defendants’ reliance on Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337 (Fed. Cir. 2007) (write-up at Patently-O) “for the proposition that the term ‘comprising’ does not create an open-ended claim” improper. Id. at 1 n.1. Rather, he noted, the term “comprising” traditionally means “including, but not limited to.” Judge Sleet therefore construed this claim term to mean “a mixture of fibres that includes at least polypropylene fibres and dry spun halogen free acrylic fibres.” Id. at 1 (emphasis added).

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On June 22, 2012, Judge Andrews issued an opinion construing thirteen claim terms in L-3 Communications Corp.’s patents relating to electronic imaging technology. L-3 Communications Corp. v. Sony Corp., et al., C.A. No. 10-734-RGA (D. Del. June 22, 2012). The patents claim inventions that “use imaging arrays to convert invisible light to electrical signals that create a viewable image. The imaging arrays are formed by combinations of image elements, or pixels, which are further composed of various circuit components.” Id. at 2. The following disputed claim terms were considered:

“Provide” and “Providing”
“Image element”
“Charge storage element”
“Storage means for storing said charge at said image element”
“Gain control element”
“Charge drain”
“Means for draining stored charge from said charge storage means in response to an element resetting signal”
“Logic gate having a pair of inputs”
“An output switch having a control input which is one of said pair of inputs and when closed connecting said output voltage level to an output signal conductor”
“Means for randomly accessing said image elements”
“Means for photovoltaically producing an electrical charge in response to incident light”
“Connecting said stored charge to an output device only in response to an interrogation signal to said image element”
“Wherein said step of providing said output amplifier includes providing a transistor at said image element”

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In Pragmatus Telecom, LLC v. Advanced Store Company, Inc., C.A. No. 12-088-RGA (D. Del. July 10, 2012), Judge Andrews granted defendants’ motion to stay the case pending resolution of a later-filed declaratory judgment action filed by the supplier of the allegedly infringing technology. Judge Andrews determined a stay was warranted in the interest of judicial economy and efficiency, finding that any ruling in the later-filed action would “most likely be dispositive of this case[,]” and that the case was in its early stages with no trial currently scheduled. Id. at 4-5. Judge Andrews also found that plaintiff would not be prejudiced by a stay. “Pragmatus is solely in the business of monetizing patents, and since Customers are not ‘direct competitors,’ injunctive relief is not available. Any purported harm that Pragmatus suffers from a stay can be fully compensated by monetary damages.” Id. at 5. Defendants also argued that the Customer Suit Exception to the First-Filed Rule also favored a stay. Judge Andrews determined, however, that while the reasoning behind the Customer Suit Exception supported granting a stay, the exception itself did not apply. “The First Filed Rule is a forum favoring rule, i.e., one that applies when multiple claims exist in multiple jurisdictions. Here, both [actions] are before this Court, and no ‘forum favoring’ is needed.” Id. at 6.

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Magistrate Judge Schneider of the District of New Jersey, sitting by designation, recently issued a letter opinion denying a party’s motion to compel the production of notes and summaries prepared by its counsel regarding interviews with expert witnesses. Bayer CropScience AG v. Dow AgroSciences LLC, C.A. No. 10-1045 (RBK/JS) (D. Del. July 6, 2012). Although Dow claimed it was seeking only facts through its discovery request, Judge Schneider found that “the facts included in the documents are inextricably intertwined with the core work product of Bayer’s attorneys and they cannot be separated. Bayer’s notes are replete with counsel’s opinions, impressions, strategy, etc., and the Court finds that it is not feasible or practical to separate the core work product from the remainder of the documents.” Id. at 1-2. Judge Schneider added that Bayer would not be required to summarize the facts from its expert interviews in interrogatory answers, citing the Supreme Court’s seminal decision in Hickman v. Taylor, 329 U.S. 495, 512-13 (1947). Id. at 2 n.1.

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Judge Andrews has issued orders on motions to dismiss and sever in IPLearn, LLC v. BeeLine Acquisition Corp., C.A. No. 11-825-RGA (D. Del. July 2, 2012). As in other recent orders, Judge Andrews found that compliance with Form 18 is all that is needed to state a claim of direct infringement, citing In re Bill of Lading Transmission and Processing System Patent Litigation, 2012 WL 2044605 (Fed. Cir. June 7, 2012). He further found that the “plaintiff names specific products, and thus more than meets the requirements of Form 18.” Id. at 2. Judge Andrews also stated that the “allegations [were] insufficient to state a claim for indirect infringement” because there was “no allegation stating that [the defendant’s] customers directly infringe.” Id.

With regard to contributory infringement and induced infringement, Judge Andrews found that the allegations were “wholly devoid of any identifiable factual information.” In considering the requirement of knowledge of the patent, however, Judge Andrews noted: “I think that an allegation that a defendant was served with a complaint alleging patent infringement sufficiently alleges a factual basis that, beginning with the date that the complaint was served, the defendant knew of the patent. It does not provide any basis for knowledge predating such service.” Id. at 3 n.4.

Judge Andrews also granted motions to sever based on the Federal Circuit’s recent decision in In re EMC Corp., 677 F.3d 1351 (Fed. Cir. 2012). As Judge Andrews explained, “The Federal Circuit’s standard is that defendants should not be ‘joined under Rule 20’s transaction-or-occurrence test unless the facts underlying the claim of infringement asserted against each defendant share an aggregate of operative facts.’ Further, ‘joinder is not appropriate where different products or processes are involved.’ And, ‘independently developed products using differently sourced parts are not part of the same transaction, even if they are otherwise coincidentally identical.’” IPLearn, at 2 (citations omitted). Because there were no allegations in the complaint of any connection between the moving defendants or their products and any other defendant, Judge Andrews granted severance.

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