In a recent memorandum opinion, Judge Andrews considered the sufficiency of a defendant’s defensive pleadings, and most notably dismissed inequitable conduct counterclaims for failure to sufficiently plead the “who” and “when” of the alleged misconduct. XpertUniverse, Inc. v. Cisco Systems, Inc., C.A. No. 09-157-RGA (D. Del. June 19, 2012). The Court explained, “[i]n order to adequately plead inequitable conduct, the claimant must ‘recite facts from which the court may reasonably infer that a specific individual both knew of invalidating information that was withheld from the PTO and withheld that information with a specific intent to deceive the PTO.’” Id. at 4 (quoting Delano Farms Co. v. Ca. Table Grape Comm’n, 655 F.3d 1337, 1350 (Fed. Cir. 2011)). Cisco’s allegations included repeated references to one individual, Zelkin, whom Cisco labeled “an officer or employee of XU during prosecution”. Id. at 4. Each reference to this officer or employee was further qualified by the inclusion of the language “or one or more of the other individuals listed as an inventor”. Id. at 4-6. The Court explained, “Cisco’s allegations that Zelkin was an XU ‘officer or employee’ and that he ‘knew or should have known’ of the prior sales and prior art fall short of concretely alleging that he actually knew of the invalidating information.” Id. at 6. Further, the Court added, “[t]hese scant allegations are further diluted by the qualifiers that either Zelkin, or ‘one or more’ of the other inventors, knew about the prior sales and art and their materiality – affording the possibility that Zelkin, the only specific individual named, did not know about them at all.” Id. Cisco was given seven days to amend its pleadings to the extent possible to sufficiently allege inequitable conduct. Id. at 14.
In Apeldyn Corp. v. AU Optronics Corp., et al., C.A. No. 08-568-SLR (D. Del. June 13, 2012), the Special Master recently issued a Report and Recommendation recommending that plaintiff’s motion to modify the protective order to permit plaintiff’s corporate representatives to have access to information designated Attorneys’ Eyes Only be denied. Id. at 1. In the motion, plaintiff sought modification of the protective order to permit two of its corporate representatives access to “CONFIDENTIAL – ATTORNEY’S EYES ONLY” information relating to defendants’ motions for summary judgment of non-infringement. Id. at 3. Plaintiff argued that such access was necessary for, among other reasons, its corporate representatives to: (1) “assist fully in the preparation of the briefs in the appeal of summary judgment”; (2) “manage outside litigation counsel”; and (3) “assist with the case as it progresses.” Id. at 3. The Special Master disagreed. In its analysis, the Special Master cited and applied the 3d Cir.’s decision in Pansy v. Borough of Stroudsburg, 23 F.3d 772, 790 (3d Cir. 1994) for determining whether modification of the protective order was warranted. Id. at 4. In applying the Pansy test, the Special Master concluded that permitting disclosure of defendants’ attorneys’ eyes only information to plaintiff’s corporate representatives would not “promote fairness and efficiency” in this case and was “outweighed” by the injury to the defendants that might result from such disclosure. Id. at 8, 12. The Special Master also concluded that plaintiff’s need for the information and plaintiff’s stated reasons for modification of the protective order did not outweigh and were insufficient to overcome the “risk of inadvertent disclosure of Defendants’ Attorneys’ Eyes Only information to third parties which might result in competitive harm to Defendants.” Id. at 16.
With a July trial looming in the ongoing “stent wars” between Johnson and Johnson affiliate Cordis and Boston Scientific, Judge Robinson recently granted summary judgment of non-infringement to Boston Scientific. Cordis Corp. v. Boston Scientific Corp., C.A. No. 10-39-SLR (D. Del. June 19, 2012).
The Court construed the claim terms in question in accordance a previous finding that Boston Scientific did not infringe related patents with similar claim terms, which was affirmed by the Federal Circuit. The Court then granted Boston Scientific’s motion for summary judgment on the grounds that Cordis could not “show that the . . . stent meets the ‘undulating’ or ‘circumferentially extending turn back portion’ limitations of the asserted patents” under a construction consistent with the Federal Circuit’s opinion. Id. at 26.
Boston Scientific also moved for summary judgment that Cordis’s patent rights were exhausted because Cordis licensed the use of its patents to Abbott Laboratories, and Abbott’s subsequent sales of stents to Boston Scientific for resale were authorized. Resolution of this issue depended on interpretation of the terms “merger” and “consolidation” in the license agreement between Cordis and Abbott, which provided that Cordis could terminate the license if Abbott was involved in a merger or consolidation with a “major competitor.” Abbott subsequently acquired ACS, a division of Guidant. Although ACS was a major competitor under the license agreement, the Court applied the Delaware statutory definition of the terms “merger” and “consolidation” and found that no such merger or consolidation had occurred between Abbott and ACS. Id. at 17. The Court, therefore, also granted Boston Scientific’s motion for summary judgment on the grounds of patent exhaustion, finding that Abbott’s rights to the patents had not been extinguished and Abbott was authorized to sell the stents to Boston Scientific.
Judge Robinson recently denied a motion for a preliminary injunction, finding that the proper construction of a disputed claim term rendered the plaintiff unlikely to prevail on its infringement claim, and finding further that the defendant raised a substantial question concerning validity. Butamax Advanced Biofuels LLC v. Gevo, Inc., C.A. No. 11-54-SLR (D. Del. June 19, 2012). The Court rejected the plaintiff’s argument that the disputed term “acetohydroxy acid isomeroreductase” should be given its plain and ordinary meaning, and instead construed the term consistently with the narrower definition given to it in the definitions section of the patent. Id. at 10. In light of that construction, the Court explained that the plaintiff likely could not prove infringement at trial. Id. at 12. Further, the Court explained that to obtain a preliminary injunction, “the patentee must demonstrate that a defendant’s invalidity defense ‘lacks substantial merit.’” Id. at 17-18 (quoting Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350-51 (Fed. Cir. 2001)). The Court explained, “the fact that the ‘889 patent has been rejected on reexamination, combined with the finding by the court that plaintiff’s likely claim construction is too narrow, demonstrate that defendant’s invalidity defenses do not lack substantial merit.” Id. at 20. The Court issued another opinion in this case two days later addressing various motions.
Judge Robinson recently considered various motions related to counterclaims in Butamax Advanced Biofuels LLC v. Gevo, Inc., C.A. No. 11-54-SLR (D. Del. June 21, 2012). She first denied Butamax’s motion for judgment of non-infringement on the pleadings, declining “to tackle the issues of claim construction and infringement without the benefit of any introductions to the technology or to the accused ‘product’ but for Butamax’s assertions regarding same. If, however, there are a limited number of critical claim limitations, the court would entertain a course of focused discovery in order to encourage an expedited resolution of the counterclaims.” Id. at 2-3.
Judge Robinson also granted Butamax’s motion to sever counterclaims and try them separately, id. at 3, and Butamax’s motion to amend the pleadings to add allegations of inequitable conduct. She rejected Gevo’s argument that the amendments were intended “to delay the adjudication of Gevo’s counterclaims” and found that Butamax had pled inequitable conduct with sufficient particularly and that its allegations were not futile. Because the “proposed amendment satisfies the . . . pleading standard by identifying the ‘who,’ the ‘what,’ the ‘when,’ the ‘where,’ and the ‘how,’” Judge Robinson allowed the amendment. Id. at 4-6.
In a recent memorandum order, Judge Robinson rejected the plaintiff’s efforts to present willfulness evidence in the damages phase of trial. IGT v. Bally Gaming Int’l, Inc., et al., C.A. No. 06-282-SLR (D. Del. June 20, 2012). Inconsistently with Judge Robinson’s typical practice, the plaintiff had requested that it be permitted to try willfulness during the liability phase of the case. The Court permitted the plaintiff to do that, but, thereafter, the plaintiff failed to include any information about its willfulness allegations in its interrogatory responses, and the parties engaged in no discovery regarding willfulness at any time. Id. at 1-2. After the Court’s summary judgment rulings largely disposed of the liability phase of the case, the plaintiff sought to present willfulness evidence in the damages phase. Judge Robinson explained, “Plaintiff, over defendants’ objection, requested permission to pursue the issue of willfulness during the liability phase of the case. Although the court generally separates the resolution of liability from the resolution of willfulness and damages, the court granted plaintiff’s request. Plaintiff never brought up the issue of willfulness again until the April 2009 pretrial order. In seeking a second opportunity to pursue its willfulness claim, plaintiff is requesting a second bite at the apple. The court is not inclined to make two exceptions for plaintiff.” Id. at 3.
In United Video Properties, Inc. et al., v. Amazon.com, Inc., et al., C.A. No. 11-0003-RGA (D. Del. June 22, 2012), Judge Andrews recently construed the following claim terms of the patents-in-suit directed to use of electronic television guides and setting future recordings of television programs or purchasing programming via personal computer (U.S. Patent Nos. 5,988,078; 6,275,268; 6,769,128; 7,493,643; and 7,603,690):
“displaying” and “displaying … with electronic television program guide”
“electronic television program guide”
“time and date stamping an order placed by the user with the electronic television program guide”
“multimedia informational system”
“video display generator”
“program schedule information”
“viewer television equipment”
“program display guide”
“video-on-demand program listing”
“interactive program guide”
“determine whether the selected program is part of a package”
Judge Andrews construed the following means-plus-function terms, construing the claimed function and identifying the corresponding struction disclosed in the specification:
“means for indicating that a video clip preview is available for a video-on-demand program that is associated with a video-on-demand program listing wherein the indication is provided with
the video-on-demand program listing”
“means for displaying the video clip preview on the viewer television equipment”
“means for displaying an ordering display screen after the video clip preview of the video-on-demand program is displayed, wherein the ordering display screen provides the viewer with
the opportunity to select an ordering option to order the video-on-demand program”
Judge Andrews recently denied defendants’ motions to dismiss plaintiff’s amended complaint in Select Retrieval LLC v. Amerimark Direct LLC, et al., C.A. No. 11-812-RGA (D. Del. June 18, 2012), because the complaint’s “minimal allegations” stating a claim for direct infringement satisifed Rule 18. Id. at 1. Judge Andrews also found plaintiff’s willfulness allegations sufficient because the complaint alleged that shortly before the complaint was filed “the defendant was notified by letter of the existance of its patent, that the defendant infringed the patent, and that the plaintiff was offering a license agreement.” Id. at 2.
In Ivoclar Vivadent AG v. 3M Company, C.A. No. 11-1183-GMS-SRF (D. Del. June 22, 2012), defendant filed a motion to transfer the case to the District of Minnesota where defendant first-filed a declaratory judgment action against plaintiff for non-infringement and invalidity of the same patent. Id. at 1-4. Plaintiff, a Liechtenstein company, opposed defendant’s motion arguing that an exception to the first-filed rule applied “because [defendant] preemptively filed its declaratory judgment action in Minnesota with the intent to dictate venue prior to the formal termination of the [Confidential Disclosure Agreement that contained a covenant not to sue].” Id. at 10-11. Judge Fallon disagreed and ultimately recommended transfer rather than dismissal. Judge Fallon analyzed the Jumara factors and found that all but one factor weighed in favor of transfer or was neutral. Id. at 14-27.
Magistrate Judge Thynge recently issued a report and recommendation in Neology, Inc. v. Federal Signal Corp., C.A. No. 11-672-LPS/MPT (D. Del. June 18, 2012), recommending that the Court deny Neology’s motion for a preliminary injunction against infringing the patents-in-suit. The patents-in-suit cover RFID (radio frequency identification) tags, readers, and systems for us in the U.S. highway tolling industry. In considering whether the plaintiffs had a reasonable likelihood of prevailing on the merits at trial, Judge Thynge construed several terms and considered infringement and invalidity arguments. Although Neology demonstrated a likelihood of success on the merits for some of the patents-in-suit, Judge Thynge denied a preliminary injunction with respect to all of the patents in suit because she found no irreparable harm.
In concluding that there was no irreparable harm, Judge Thynge first found that Neology had delayed substantially in seeking a preliminary injunction, as it was first aware of a defendant’s alleged infringement in fall of 2009 and its first loss of sales to the defendant in spring of 2011, but did not file suit until July 2011 and did not seek an injunction until December 2011. Such delay weighed against granting an injunction. Id. at 40. She next rejected Neology’s arguments that the defendants had denied or would deny Neology entry into the relevant product market and that the defendants’ alleged infringement had caused Neology financial harm. She did find, however, the Neology’s apparent financial strength and attractiveness to investors may have been somewhat illusory and did not undercut its assertion of irreparable harm. Id. at 53.
Judge Thynge also rejected Neology’s argument that it would suffer irreparable reputational harm because defendants’ inferior products could jeopardize the market’s transition to the RFID technology in question. She determined both that the defendants’ products were not necessarily inferior, as they had been compared favorably by independent parties, and that the defendants’ products had not caused any reputational harm to Neology’s products. Id. at 62. Finally, Judge Thynge rejected Neology’s price erosion argument based on defendants’ putting downward pressure on the price of the technology in question. She did not find persuasive evidence that defendants were pricing their products improperly and did not agree with Neology’s assertion that its own pricing was relevant to the appropriateness of defendants’ pricing. Furthermore, Judge Thynge found that even if price erosion had occurred, damages could properly compensate Neology for this harm. Id. at 69.