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Magistrate Judge Schneider of the District of New Jersey recently reminded parties of the appropriate showing that must be made in connection with a motion for leave to amend infringement and invalidity contentions. Bayer CropSciences AG v. Dow AgroSciences LLC, C.A. No. 10-1045 (RMB/JS) (D. Del. June 7, 2012). The Court explained, “the key fact courts should look at to determine whether good cause exists to grant an amendment to a contention is the diligence of the moving party. Diligence has two aspects to it. One is whether the moving party acted diligently to discover that an amendment was appropriate. The second aspect is whether the moving party promptly moved to amend its contentions after it learned an amendment was necessary.” Id. at 3 (citing O2 Micro Intern. Ltd. v. Monolithic Power Systems, Inc., 467 F.3d 1355, 1365-67 (Fed. Cir. 2006)). In denying the motion, the Court explained, “good cause is not established simply because a party desires to respond to an amended contention. Otherwise, there would be a never ending series of amendments.” Id. at 4. In this case, Dow’s motion “did not demonstrate why its latest proposed amendment could not have been asserted earlier or why Bayer’s amendment was not anticipated.” Id.

The Court also rejected Dow’s attempt to amend its contentions through an incorporation by reference of its summary judgment briefs, explaining “[t]he Patent Rules [of the District of New Jersey] incorporated into the Court’s Scheduling Order provides that contentions may only be amended by motion. The mere fact of filing a brief is insufficient to amend a contention.” Id. at 5. Moreover, the Court explained that “Dow has not demonstrated why the contentions in its briefs were not included in its earlier filed contentions.” Id. at 6. Finally, the Court denied Dow’s attempt to add two prior art references “that were both discovered recently,” explaining that Dow’s motion “did not attempt to establish good cause for its failure to previously identify the references.” Id.

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Magistrate Judge Burke recently issued a report and recommendation construing claims relating to a low-viscosity gel composition that operates as a “delivery system” for pharmaceutical ingredients in the treatment of skin disorders. See Medicis Pharmaceutical Corp. v. Actavis Mid Atlantic LLC, C.A. No. 11-409-LPS-CJB (D. Del. June 12, 2012). The “delivery system” was described as follows: “through the use of a ‘lightly cross-linked polyacrylic acid polymer[],’ which has a low viscosity relative to its concentration in aqueous solutions . . . the gel composition offers two principal advantages: (1) more appealing cosmetic characteristics, such as a reduction in a ‘sticky’ feel or residue; and (2) more accurate application through improved flow and pourability.” Id. at 3.

Magistrate Judge Burke recommended the adoption of the parties’ agreed-upon construction of the following claim terms, finding that they were consistent with the intrinsic record:

— “for a period of time sufficient to improve the skin disorder” construed to mean “over a course of treatment of sufficient duration to improve the skin disorder
— “base to adjust pH.” construed to mean “a basic compound that can be used to adjust pH.”
Also recommended were the following constructions of disputed terms:

— “lightly cross-linked polyacrylic acid polymer” construed to mean “a cross-linked polymer of acrylic acid with a viscosity of less than about 15,000 cP, where the polymer is in a 0.5% solution at pH 7.5, as measured by a Brookfield viscometer at 20 rpm”.

— “container” as recited in “a container that accurately administers a portion of the composition” construed to mean “a container that has a sufficiently small orifice tip to dispense quantities of the low-viscosity gel composition in accordance with treatment instructions”
— “container” as recited in “a container from which drops are accurately administered” construed to mean “a container that has a sufficiently small orifice tip to dispense generally spherical quantities of the low-viscosity gel composition in accordance with treatment instructions”
UPDATED: Judge Stark adopted Judge Burke’s Report and Recommendation on July 16, 2012 after neither party filed an objection. Medicis Pharma. Corp. v. Actavis Mid Atlantic LLC, C.A. No. 11-409-LPS-CJB (D. Del. Jul. 16, 2012).

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In St. Jude Medical, et al. v. Volcano Corp., C.A. No. 10-631-RGA (D. Del. June 5, 2012), Judge Andrews recently affirmed and overruled objections to the Magistrate Judge’s decision to exclude certain prior art evidence that was not properly disclosed by plaintiffs until nearly three months after the close of fact discovery. Id. at 2-3. In the opinion, the Court noted that plaintiffs’ invalidity contentions were “useless in terms of giving [d]efendant any information about what theories [plaintiffs] would actually pursue.” Id. at 3. The Court also noted that plaintiffs’ contentions included as invalidating prior art “100 patents, 21 publications, and 92 prior art systems” and that those references that were excluded were “buried amidst” these many other invalidating references. Id. at 3. The Court ultimately held that the Magistrate Judge’s decision to exclude the prior art references was neither “clearly erroneous” nor an “abuse of discretion”; concluding rather, that it was a sanction appropriately “tailored to the nature and extent of the violation.” Id. at 4.

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Judge Stark recently issued a final pretrial order with rulings on eight different motions in limine in Tarkus Imaging, Inc. v. Adobe Systems, Inc., C.A. No. 10-63-LPS (D. Del. May 31, 2012).  Judge Stark’s in limine rulings included the following:
1.    A non-expert witness and that witness’s opinions not previously disclosed under Rule 26 are not per se inadmissible, but specific portions of testimony should be addressed by objection pursuant to the Court’s normal procedures.
2.    Defendants may not be barred wholesale from introducing undisclosed expert testimony.  Rather, objections to testimony beyond the scope of expert reports should be addressed pursuant to the Court’s normal procedures, and Defendants may elicit fact testimony from fact witnesses regarding how accused products work.
3.    Parties are not permitted to argue who “won” or “lost” claim construction, but Defendants may defend willfulness allegations by contending that their proposed constructions were reasonable.
4.    Evidence of usage or sale of components that are not the accused functionality is allowed because it is probative of induced infringement and the potential for prejudice does not outweigh the evidence’s probative value.
5.    Parties may not present evidence that other parties did not comply with the discovery rules.  Allowing the parties to relitigate discovery disputes at trial would be unfairly prejudicial, confusing, and a waste of time.

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In Walker Digital LLC, et al. v. Multi-State Lottery Assoc., C.A. No. 10-1113-RGA (D. Del. June 7, 2012), Judge Andrews construed the following terms of U.S. Patent No. 7,740,537 which claims a system and method to allow a lottery player to increase payout received for winning a lottery game:

“multiplier”

“is applied to”

“in which”

“lottery terminal” (no construction necessary)

“lottery server” (no construction necessary)

“redemption value”

“determine a price”

“store an indication of a price”

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In Tarkus Imaging, Inc. v. Adobe Systems, Inc., et al., C.A. No. 10-63-LPS (D. Del. June 5, 2012), Judge Stark granted Adobe Systems, Inc.’s motion for summary judgment of no willful infringement, explaining that because Adobe asserted “reasonable claim construction positions under which Adobe would not infringe . . . and credible non-infringement theories even under the Court’s different constructions[,]” the plaintiff could not show by clear and convincing evidence that Adobe acted despite an objectively high likelihood that it infringed a valid patent. Id. at 3-4 (discussing first prong of the Federal Circuit’s test for establishing willful infringement under In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007)). The Court explained that although it “did not ultimately adopt Adobe’s constructions for [the terms ‘output device’ and ‘pictorial dynamic range’] . . . the fact that Adobe asserted reasonable constructions under which its products would not infringe precludes a finding that the first prong of Seagate is satisfied.” Id. at 4. As a result, “the Court should not put the issue of willfulness – including the second “subjective” prong – before a jury.” Id. at 3 (citing Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 1236 (Fed. Cir. 2011) (satisfying the objective first prong of the willfulness test is “a predicate to the jury’s consideration of the second prong”)). Moreover, the Court explained that Adobe asserted reasonable non-infringement theories even under the Court’s claim construction, also leading to the conclusion that the first prong of the Seagate test could not be satisfied. Id. at 5.

The Court acknowledged that the parties presented genuine disputes of material fact, but explained that those disputed facts related to the subjective second prong of the willfulness test under Seagate, “an inquiry that must not be put before the jury given Tarkus’s failure to satisfy the [objective] first prong.” Id. at 6.

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In a recent ANDA case, following full post-trial briefing and in light of the approaching expiration of the 30-month stay, Judge Stark issued a sua sponte order enjoining the defendant from launching its generic product until the Court issues its opinion in the case. Galderma Labs, L.P. v. Tolmar, Inc., C.A. No. 10-45-LPS (D. Del. June 4, 2012).

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In Fuisz Pharma LLC v. Theranos, Inc., C.A. No. 11-1061-SLR-CJB (D. Del. May 18, 2012), Magistrate Judge Burke recently issued a Report and Recommendation, recommending that defendant’s motion to dismiss, stay, or transfer be granted in part, and that the case be transferred to the Northern District of California pursuant to the first-filed rule. Id. at 1. On October 26, 2011, Theranos, Inc. (“Theranos”), a Delaware corporation with its principal place of business in Palo Alto, California, originally brought suit in the Northern District of California (the “California Action”) against Fuisz Technologies, Ltd. and several members of the Fuisz family for inventorship claims under the Patent Act and state law claims alleging that the Fuisz defendants’ misappropriated Theranos’ confidential information and used that information to improperly obtain U.S. Patent No. 7,824,612 (the “’612 patent”). Id. at 2. On October 27, 2011, the same day that they were served with the original Complaint filed in the California Action, two of the individual Fuisz defendants named in the California Action assigned certain rights to the ‘612 patent to Fuisz Pharma LLC (“Fuisz Pharma”), a Delaware limited liability company with its principal place of business in Bay Harbor Islands, Florida. Id. at 3. Fuisz Pharma then filed the instant suit on November 1, 2011 in D. Del. (the “Delaware Action”) against Theranos for infringement of the ‘612 patent. Id. at 3. In response to being sued here in Delaware, Theranos filed a motion seeking to have the Delaware action dismissed, transferred to the N.D. Cal., or stayed pending resolution of the California Action, on the grounds that the California Action is the “first-filed” action. Id. at 3. Theranos argued that its motion should be granted pursuant to the first-filed rule “because it filed the California Action prior to Fuisz Pharma’s filing of the instant litigation [in Delaware], and because the California Action involves the same parties and subject matter as this action.” Id. at 7. In its opposition, Fuisz Pharma countered that the first-filed rule did not apply “because the California Action does not involve the same issues and/or the same parties as this infringement litigation [in Delaware].” Id. at 8. More specifically, Fuisz Pharma argued that the two cases are “distinctly different” because the Delaware Action is a “straight forward patent infringement action,” while in the California Action there are “other legal claims at issue.” Id. at 8.

The Court sided with Theranos, concluding that the “first-filed” rule did apply, the California action was, indeed, the “first-filed” action, and that the Jumara factors favored transfer of the Delaware Action to the N.D. Cal. Id. at 8, 35. The Court noted that: (a) “all of the parties in this action are parties to the California Action”; (b) “both cases involve . . . the ‘612 patent”; (c) the claims in both suits “stem, to a very great degree, from the same subject matter and same nucleus of operative facts,” and that (d) “if both actions were allowed to proceed simultaneously, there would be substantial risk of inconsistent judgments.” Id. at 8-14. The Court further noted that the first-filed rule has been applied in patent cases, even where the cases are not so-called “mirror image” cases, provided that the “same common subject matter exists among the two cases.” Id. at 12 (citations and quotations omitted). As part of its analysis of the Third Circuit’s Jumara factors, the Court also noted that the “existence of the first-filed California Action has a significant impact on the balancing of the public and private interests in the case” and that “the balance of those factors weigh strongly in favor of transfer.” Id. at 34.

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In Tarkus Imaging, Inc. v. Adobe Systems, Inc., et al., C.A. No. 10-063-LPS (D. Del. May 11, 2012), Judge Stark issued a Memorandum Opinion and Order construing the claim terms of U.S. Patent No. 6,628,823 at issue in the case as follows:

– “original image” means “the image data and other data pertaining to the image prior to performing the claimed processing steps”
– “original” means “two-dimensional object (such as a print, negative, or transparency, artwork, or reproduction defined by an image file)”
– “density capabilities” means “assumed or measurable density values that an assumed or actual output device is capable of producing”
– “density” means “the negative logarithm of reflectance, transmittance, or luminance factor”
– “output device” means “a physical or assumed device used to produce or define a reproduction”
– “pictorial dynamic range” means “the range from the value representing the edge of detail in black to the value representing the edge of detail in white”
– “tone reproduction curve” means “the relationship between the tonal values of an original image and the tonal values of an intended reproduction”
– “tone” means “lightness or brightness of an element in a scene or image”
– “color space values” means “the number or combination of numbers used to represent colors”
– “initial color space values of a scene” means “a number of combination of numbers determined by a capture device to represent colors in a scene (e.g., camera raw or scene referred image data)”
– “capture device” means “a device (e.g., a camera, scanner, or computer) capable of acquiring an image of a scene or original”
– “estimating a key of the original image” means “estimating whether an original image, as a whole, is bring or dark”
– “standard output device” means “a representative real or assumed device having defined associated color space values that are commonly used in image files”
– “applying an S-shaped flex adjustment” means “changing the amount of shaped of a curve”
– “applying a shift adjustment” means “changing the bow (e.g., convexity or concavity of a curve)”
– “scene” means “a real-world view”
– “focal plane image” means “an image formed on a sensor of a capture device”
– “Image file” means “a file containing image data and optionally data pertaining to the image”

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In Optimum Power Solutions LLC v. Hewlett-Packard Co., et al., C.A. Nos. 11-853, 854, 855, 856 (D. Del. May 25, 2012), Judge Stark recently considered motions to transfer four related cases filed by plaintiff Optimum to the Northern District of California. Plaintiff had previously filed a case against three of four of the instant defendants, among others, in the Eastern District of Texas. That court concluded that transfer to the Northern District of California was appropriate. Id. at 1. After the transfer, the plaintiff moved the California court to amend its complaint to add more defendants, and the original defendants moved to dismiss. Id. at 3. The court “denied Plaintiff’s motion, granted defendants’ motion, and dismissed without prejudice each defendant other than Apple [, apparently envisioning] that Plaintiff would then re-file individual actions against each defendant in the Northern District, actions which might then be coordinated. Instead, Plaintiff chose to initiate suit against four defendants here (and others elsewhere).” Id. at 3-4. Judge Stark concluded that these circumstances weighed in favor of transfer and granted defendants pending motions. Id. at 4.

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