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Judge Andrews recently considered defendants’ motions to transfer in cases brought by patent owner Robocast against both Apple and Microsoft. See Robocast, Inc. v. Apple, Inc., C.A. No. 11-235-RGA (D. Del. Feb. 24, 2012). Although the cases are separate, both complaints alleged infringement of the same patent, and Microsoft admitted that its transfer motion “rises or falls with Apple’s.” Robocast was a Delaware corporation, but neither Robocast nor Apple had a principal place of business in Delaware. Robocast was headquartered in New York, and Apple sought transfer to the Northern District of California, where it was headquartered. Considering the Third Circuit’s Jumara factors, Judge Andrews found that those factors supported denying the motions to transfer.

The plaintiff’s forum preference and the convenience of the parties as indicated by relative physical and financial condition each supported the plaintiff’s position that the case should not be transferred. Id. at 3-4. Because infringement occurred “all over the United States, including Delaware . . . the claims arise in every judicial district.” Id. at 5. Furthermore, “Apple is omnipresent in everyday life. It is a large and powerful corporation. Robocast consists of its President and two employees. Its founder was at the oral argument on the present motion. Its financial condition pales in comparison to that of Apple.” Id. Because “[t]here is no reason to doubt that if this litigation turns into a war of attrition, Apple will have the upper hand,” the plaintiff’s choice of forum “significantly disfavors transfer.” Id. Apple also argued that “Robocast’s connection with Delaware is entitled to less weight because it is a ‘non-practicing entit[y],’” a characterization and conclusion which Robocast disputed. Id. at 9. Judge Andrews found, however, that while Robocast “has no physical connection to Delaware, its corporate citizenship is of long standing. There might be cases in which a nonpracticing entity’s connections to Delaware suggest reasons to discount that connection, but this is not one of them.” Id. (citations omitted).

The factors that did favor transfer included defendant’s forum preference, the convenience of the witnesses, the location of books and records, and practical considerations that could make the trial easy, expeditious, or inexpensive. Id. at 3-4. None of these, however, overwhelming supported transfer. The convenience of witnesses was largely speculative, and the location of books and records was “of marginal weight given that it is likely that Apple’s records can be produced at trial wherever trial is held.” Id. at 6-7. In reaching this conclusion, Judge Andrews distinguished In re Link_A_Media Devices Corp., 662 F.3d 1221 (Fed. Cir. 2011), noting that he “[did] not understand the Federal Circuit to have altered the Third Circuit’s focus on the issue being not so much where the witnesses and evidence are, but whether they can be produced in court.” Id. at 7 n.10. He continued, “I have considered In re Link_A_Media Devices Corp. . . . but I do not think it is particularly helpful in assessing the transfer request in this case, as its facts were very different.” Id. at 10.

The other Jumara factors were either inapplicable or did not favor one side or the other. Id. at 4. Judge Andrews therefore concluded: “In the present case there is a greater connection to Delaware, as the plaintiff is a Delaware corporation with its principal place of business close to Delaware but not to California, and, also of considerable significance, the plaintiff would be inconvenienced by transfer. Under Third Circuit law, considerable deference is given to the plaintiffs’ choice of forum. I think that when the plaintiff is a three-person corporation with Delaware as its longstanding corporate home, and the defendant is Apple, there ought to be a compelling reason to overcome plaintiff’s choice of forum.” Id. at 10 (citations omitted).

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Chief Judge Sleet recently issued a claim construction order in Pfizer Inc. v. Mylan Pharm., Inc., C.A. No. 10-528-GMS (D. Del. Feb. 21, 2012). Judge Sleet construed the following terms:
– “Catalytic activity” was given the meaning of the “inventor’s lexicography” in the patent specification.
– “Contacting” was also given the meaning given by the patentee in acting as its own lexicographer.
– “Abnormal condition” was given the meaning agreed to by the parties before the hearing.
In construing these terms, Judge Sleet rejected the defendant’s attempts to add a limitation that the method or effect must be in vitro. When the patentee wanted such an in vitro limitation in the patents-in-suit, it had expressly included one. Furthermore, the definitions in question clearly stated that an in vitro measurement method is merely one example among several possibilities.

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In Cooper Notification, Inc. v. Twitter, Inc., et al., C.A. No. 09-865-LPS (D. Del. Feb. 17, 2012), Judge Stark construed the following terms of U.S. Patent No. 7,409,428 entitled Systems and Methods for Messaging to Multiple Gateways:

“first message”
“gateway message”
“second message”
“communication gateway”
“message group”
“alert originator”
“reformat”
“form an address”

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In a recent Report and Recommendation in Wyeth Holdings Corp., et al. v. Sandoz, Inc., C.A. No. 09-955-LPS-CJB, Judge Burke concluded that plaintiffs’ motion to dismiss defendant’s inequitable conduct counterclaim and to strike defendant’s affirmative defense based on inequitable conduct should be denied. Id. at 1, 30. In this case, plaintiffs initially filed a complaint against defendant for patent infringement arising from defendant’s filing of an ANDA seeking to market a generic version of an injectable antibiotic drug. Id. a 1-2. In the complaint, plaintiffs alleged that defendant’s generic product infringed two of their patents, and sought a permanent injunction to bar defendant from the manufacture, sale, use or importation of that product in the U.S. Id. at 2. Defendant conceded (and actually stipulated to) infringement, but challenged both the validity and enforceability of the patents-in-suit, including counterclaiming that one of the patents-in-suit was “unenforceable based on several acts of inequitable conduct” and asserting “unenforceability based on inequitable conduct” as an affirmative defense. Id. at 2. In part, as bases for its allegations of inequitable conduct, defendant alleged that during prosecution of one of the patents-in-suit, plaintiffs “deceived the Examiner” by, among other things, “misrepresent[ing] the teachings of the prior art” and “omitt[ing] key information regarding experimental error and discrepancies in data.” Id. at 6.

In response to these allegations, plaintiffs filed a motion to dismiss defendant’s counterclaim for inequitable conduct and to strike the accompanying inequitable conduct affirmative defense. Id. at 2. Plaintiffs argued that, in light of the Fed. Cir.’s decision in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir 2011), defendant’s inequitable conduct defense should be dismissed because defendant “did not plead any facts that would allow the Court to conclude that the single most reasonable inference from the applicants’ alleged conduct is that the applicants had the specific intent to deceive the PTO.” Id. at 11 (emphasis in original). Defendant countered that the “single most reasonable inference” language from Therasense did not apply and is not the appropriate standard. Id. at 12. Rather, in assessing the sufficiency of the intent prong of defendant’s inequitable conduct defense, the “whether deceptive intent could be ‘reasonably inferred’ from the facts as pled” standard articulated by the Fed. Cir. in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009) should be applied. Id. at 12 (brackets omitted). The Court agreed, holding that “in order to adequately plead the intent prong of an inequitable conduct defense, the claimant need only allege facts from which the Court could reasonably infer that the patent applicant made a deliberate decision to deceive the PTO.” Id. at 13-14 (emphasis in original).

Reconciling the Fed. Cir.’s language in Therasense and Exergen, the Court held that the single most reasonable inference requirement of Therasense was an “evidentiary standard that must be satisfied at the proof stage, not a pleading standard.” Id. at 14. In its analysis, the Court found that defendant had pled inequitable conduct with sufficient clarity to survive dismissal, satisfying both the “but-for” materiality and the specific intent to deceive prongs of the standard. Regarding the “but-for” materiality prong, the Court found: (1) that defendant had “properly and specifically identified the ‘who, what, where, when and how’ of the alleged material misrepresentations” id. at 17 (citation omitted) and (2) that there was a reasonable inference that one of the patens-in-suit would not have issued “but for the alleged misrepresentations” as pled by defendant. Id. at 19. Likewise, regarding the specific intent to deceive prong, the Court found that defendant had, indeed, “pled sufficient facts, with sufficient particularity, to give a reasonable inference that [plaintiff’s] representatives deliberately acted to deceive the PTO during the prosecution of [one of the patents-in-suit].” Id. at 25.

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Today, Judge Andrews issued a memorandum opinion finding that the Court could not exercise personal jurisdiction over seven of eight defendants. Serverside Group Limited, et al. v. CPI Card Group – Minnesota Inc., et al., C.A. No. 11-559-RGA (D. Del. Feb. 17, 2012). The plaintiffs in the case were an English company and a New York corporation, neither of which had business operations in Delaware. The first group of defendants was comprised of two Iowa corporations with principal places of business in Iowa and no operations in Delaware. The second group was comprised of six defendants, only one of which was a Delaware corporation and none of which had business operations in Delaware. The plaintiffs alleged that the Court should exercise personal jurisdiction over all eight defendants under Delaware’s long-arm statute, based on their allegation that each defendant “made, used, sold, and/or offered for sale infringing technology in Delaware.” The Court was not persuaded by the plaintiffs’ “boilerplate” jurisdictional allegations, and emphasized that despite attaching to their brief the results of a seemingly exhaustive scouring of the Internet for evidence that the defendants had sold or offered to sell infringing products in Delaware, no such evidence appeared to exist. In reaching this determination, the Court noted that “offers to sell” are defined by traditional contract analysis, and the plaintiffs’ suggestion that “advertisements that are in trade magazines that circulate in Delaware . . . [that] invite a call ‘for more information’ are not an offer to sell under a contract analysis.” Id. at 6 n.3. Similarly, “a webinar put on by one of the defendants that will discuss the advantages of [purportedly infringing technology] is not an ‘offer to sell.’” Id. at 6 n.3. Accordingly, the Court found that seven of the eight defendants were not subject to Delaware’s long-arm jurisdiction. Id. at 8. Finally, finding that the plaintiffs’ request for jurisdictional discovery was made without any citation of authority supporting their request, and mostly sought information the Court viewed as irrelevant to the long-arm jurisdiction analysis, Judge Andrews denied the plaintiffs’ request for jurisdictional discovery, explaining that the case would be transferred to the Northern District of Iowa under 28 U.S.C. § 1406(a) (as to the Iowa defendants), and indicating that further factual support would be needed to justify transferring the case against the remaining defendants to the District of Colorado to ensure that venue was one where the case “might have been brought.”

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The jury recently reached a verdict of validity and willful infringement against the defendants in Sunovion Pharmaceuticals Inc. v. Dey Pharma, L.P., C.A. No. 06-113-LPS (D. Del. Feb. 14, 2012). Judge Stark then entered the judgment of $18 million damages, subject to possible enhanced damages, post-judgment damages, and other relief as well as other claims and requests remaining pending before the court.

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In a recent memorandum order, Judge Robinson provided rulings and guidance on several evidentiary issues in advance of trial. Ladatech, Inc. v. Illumina, Inc., et al., C.A. No. 09-627-SLR (D. Del. Feb. 14, 2012). First, the Court rejected the defendants’ proposed jury instruction that would have required the plaintiff to show evidence of a “lack of good faith” by the defendants to prove inducement to infringe. Judge Robinson explained, “Defendants may properly argue that Illumina possessed a good faith belief that its directions to customers would not cause the acts that constitute infringement. . . . [but] Illumina’s lack of good faith is not an element of plaintiff’s prima facie case[.]” Id. at 1-2 (emphasis in original). Next, Judge Robinson ruled that, given the parties’ stipulation that Illumina knew of the patent at issue, any evidence regarding failed licensing attempts between the plaintiff and defendants was not necessary to plaintiff’s proving that Illumina intended to induce infringement, and would be more prejudicial and potentially confusing than probative. Id. at 2-3. Judge Robinson disagreed, however, with the defendants’ argument that evidence of licensing attempts also should be inadmissible under Rule 408, explaining that “[t]here is no indication that the parties’ discussions took place while litigation was pending (such that defendants’ license request(s) could be deemed an offer of settlement).” Id. at 2 n.2 (citing SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1375 n.1 (Fed. Cir. 2007)). Finally, Judge Robinson provided guidance on the parties’ use of the reexamination file wrapper at trial, and cautioned that “it has been the court’s observation that reexamination evidence is, at best, confusing vis-à-vis the complex invalidity standards the jury is asked to apply. . . . Therefore, the parties are required to give notice to each other (and to the court) prior to referencing the reexamination at trial. Id. at 4.

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On February 2, 2012, Judge Stark issued a Memorandum Opinion construing the following claim term of AstraZeneca’s U.S. Patent No. RE37,314 directed to novel compounds that inhibit the biosynthesis of cholesterol, including the active ingredient in CRESTOR®:

“a cation capable of forming a non-toxic pharmaceutically acceptable salt”
AstraZeneca UK Ltd. v. Watson Laboratories, Inc., C.A. No. 10-915-LPS (D. Del. Feb. 2, 2012). The Court agreed with defendant Watson Laboratories that “the specification provide[d] an express definition that limit[ed] the term … to an alkali metal ion, alkaline earth metal ion, or ammonium ion”

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Following the pretrial conference in Sunovion Pharmaceuticals, Inc. v. Dey Pharma., L.P., et al., C.A. No. 06-113-LPS, Judge Stark recently ruled on a couple of issues relating to expert testimony, including granting in part defendants’ motion for reconsideration of the Court’s prior ruling striking defendants’ expert report in its entirety as untimely. Id. at 1. In their motion for reconsideration, defendants argued that the Court had, in its prior ruling, “ignored the proper burden-shifting framework for proving anticipation” and erred in excluding their expert’s report as untimely, “resulting in manifest injustice.” Id. at 1. In addtion, defendants argued that the entirety of their expert’s report was timely and should not have been stricken by the Court, because, among other things, it appropriately responded to assertions made by plaintiff’s expert in his report. Id. at 2-3. The Court agreed in part, ruling that defendants’ expert report would not be stricken in its entirety, and that their expert would be permitted to testify at trial consistent with a certain, non-stricken portion of his report. Id. at 3. The Court noted that the non-stricken portion of the report from which testimony at trial would be permitted concerned an issue that defendants were not obligated to anticipate would be put in dispute or otherwise were not required to address in their opening report. Id. at 3. The Court made clear, however, that those portions of defendants’ expert report that were not “timely disclosed in the opening round of expert reports” and that “did not require advance knowledge of [plaintiff’s expert’s] report” would remain stricken. Id. at 3. In addition to ruling on defendants’ motion for reconsideration, the Court reaffirmed that “disputes as to whether specific expert testimony is improper as beyond the scope of prior disclosures [would] have to await trial and, likely, post-trial motions.” Id. at 4. The Court cautioned that “where an expert’s trial testimony was not adequately disclosed in an expert’s report, a new trial may be warranted.” Id. at 5 (citation omitted). This practice is consistent with how Judge Stark has generally handled beyond the scope of expert report objections raised at trial in previous cases.

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Dear Colleague,
Managing IP and Delaware IP Law Blog invite you to the US Patent Reform Forum on March 27, 2012 at the Willard InterContinental in Washington D.C.

Free for IP counsel, academics and research institutes

The forum brings together top officials, leading counsel at U.S. corporations and their private practice advisers to discuss the recently enacted Leahy-Smith America Invents Act.

Easy ways to register:
Visit: www.managingip.com/USPatentforum2012
Email: mfabri@euromoneyplc.com
Call: +1 212 901 3828
Topics on the agenda include:
• Roundtable: AIA rulemaking overview
• An Industry Perspective: We lobbied the cause; the act was passed – where did we land?
• Key considerations: The Joinder Provision; ITC proceedings and the new rules on false
marking
• In focus: Post Grant Review and litigation strategies under AIA
• First-to-file system: Implications of a significant change in the law
• AIA and NPEs: Impact or more of the same?

Speakers:
• Judge Paul Michel
• Gary Griswold, former chairman, The Coalition for 21st Century Patent Reform
• Bob Stoll, former commissioner for USPTO
• Robert Armitage, senior VP and general counsel, Eli Lilly
• Phil Johnson, chief intellectual property counsel, Johnson & Johnson
• Sherry Knowles, principle, Knowles Intellectual Property Strategies
• F. Scott Kieff, professor of law, George Washington University
• Dan McCurdy, chairman, PatentFreedom
• Brent Bellows, Knowles Intellectual Property Strategies
For more information about the agenda, please see the brochure here: http://www.managingip.com/pdfs/USPatentForum.pdf

The forum is free for IP counsel. Places are allocated on a first come, first served basis, please register in advance to secure yours.

We look forward to you joining our debate in March.

Kind regards,
James Nurton
Managing editor
www.managingip.com

Pilar Kraman
Managing editor
www.delawareiplaw.com

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