Judge Stark recently considered Google’s motion to stay pending reexamination of the patents in suit. Google filed its motion after the PTO issued a Final Office Action rejecting all asserted claims U.S. Patent No. 7,685,276, and issued an Action Closing Prosecution finding all asserted claims of U.S. Patent No. 6,981,040 invalid. Personalized User Model, LLP v. Google, Inc., C.A. No. 09-525-LPS (D. Del. Oct. 31, 2012). Judge Stark found that the potential for a stay to simplify issues favored granting a stay, “but only slightly.” “Given that all asserted claims of both patents-in-suit stand rejected . . . there is a signficant likelihood that [the case may ultimately be dismissed], resulting in maximum ‘simplification’ of this litigation by ending it.” Id. at 2. However, Judge Stark noted that final conclusion of the reexaminations, with appeals, could last longer than it would take to bring the case to trial, and there were infringement and validity issues that could not be addresssed by reexamination. Id. More significantly, the stage of the litigation strongly disfavored stay. Judge Stark noted that “the fact that Google waited to seek a stay until after the parties, and the Court, had invested substantial resources in this case is a central consideration in the Court’s evaluation.” Id. at 2-3. Although there was not trial set, claim construction and fact discovery were complete, expert discovery was set to close November 14, 2012 and case dispositive motions were due shortly thereafter. Id. at 3.
Magistrate Judge Mary Pat Thynge has issued a report and recommendation on a Fed. R. Civ. P. 37 motion regarding a violation of the Court’s Protective Order. Defendant Apple brought the motion against Plaintiff MobileMedia Ideas (“MMI”), alleging that MMI’s expert did not directly review source code on a designated computer as provided in the Protective Order. Rather, Apple alleged, a non-testifying consultant printed Apple’s source code and provided it to MMI’s expert. Apple additionally alleged that a second expert also reviewed a printed copy of source code and made copies of the source code other than for purposes “reasonably necessary” to the preparation of an expert report. Judge Thynge found a violation of the Protective Order, took steps to limit future access to the source code, and allowed the parties to brief the issue of awarding fees and costs. MobileMedia Ideas LLC v. Apple Inc., C.A. No. 10-258-SLR/MPT, at 1-2 (D. Del. Oct. 31, 2012).
Considering the parties’ submissions on a fee award, Judge Thynge called “MMI’s interpretation of the Protective Order . . . dizzying” and determined that reasonable expenses should be awarded for MMI’s violation. She explained that MMI’s argument that its violation had been “substantially justified” depended on defining the term “Receiving Party” in the Protective Order in two different and inconsistent ways: “MMI cannot have two interpretations of Receiving Party—one to argue no violation and another to argue why its violation was substantially justified to avoid the imposition of reasonable expenses. MMI’s approach is ‘heads I win, tails you lose,’ and it is not entitled to switch its argument after the court determined a violation of a discovery order occurred to justify why sanctions should not be imposed.” She concluded, “with the differing applications of ‘Receiving Party’ propounded by MMI, substantially justified has not been met under Rule 37, and reasonable expenses are warranted.” Id. at 5. She therefore recommended the awarding of attorneys’ fees and costs for Apple’s counsel and found that most of the fees requested by Apple were reasonable and allowable under Rule 37.
On September 16, 2013, Judge Sue L. Robinson adopted Magistrate Judge Thynge’s report and recommendation, agreeing with Judge Thynge “that plaintiff’s interpretation of the Protective Order is nonsensical.” Judge Robinson explained that “[f]or plaintiff to argue that, while it could not print Source Code, its non-testifying expert could, is not a reasonable (perhaps not even a credible) argument in my experience.”
Judge Kent A. Jordan, sitting by designation, recently determined that communications of defendant with Indian in-house counsel employed by defendant were not subject to attorney-client privilege under the laws of India. Shire Development Inc. v. Cadila Healthcare Limited (d/b/a Zydus Cadila), C.A. No. 10-581-KAJ (D. Del. Oct. 19, 2012). To reach this conclusion, Judge Jordan independently appointed a neutral expert on the laws of India, “[b]ecause the parties presented diametrically opposed expert reports on this difficult questions[.]” Id. at 1. Judge Jordan ultimately adopted this expert’s conclusions that, “under the laws of India, attorney-client privilege does not attach to communications between a legally trained corporate employee and his employer.” Id. at 2.
Magistrate Judge Mary Pat Thynge recently issued a report recommending the denial of a motion to transfer a case to the Northern District of California based on an evaluation of the considerations outlined by the Third Circuit in Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995). Trueposition, Inc. v. Polaris Wireless, Inc., C.A. No. 12-646-RGA-MPT (D. Del. Oct. 25, 2012). Judge Thynge recognized that the Federal Circuit’s decision in In re Link_A_Media Devices Corp., 662 F.3d 1221 (Fed. Cir. 2011) (previously discussed here) provided guidance for the Court’s consideration of the Jumara factors, but added that “the decision has not altered the fundamental fact that ‘Section 1404(a) is intended to place discretion in the district court to adjudicate motions to transfer . . . .’” Id. at 3 (quoting Intellectual Ventures I LLC v. Altera Corp., 842 F. Supp. 2d 744, 754 (D. Del. 2012) (previously discussed here)).
With regard to the Jumara factors, the defendant emphasized that the plaintiff’s choice of forum should be given little weight because the plaintiff lacked any meaningful connection to Delaware—having no offices or employees in the state. The Court disagreed, explaining, “even if Delaware is not considered [the plaintiff’s] home turf, ‘[n]onetheless [its] incorporation in Delaware represents a rational and legitimate reason to choose to litigate in the state,’ by opting ‘to avail [itself] of the rights, benefits, and obligations that Delaware law affords.’” Id. at 6-7 (footnotes omitted). As a result, the Court explained that the plaintiff’s “choice of Delaware as its preferred forum is entitled to, at minimum, significant deference.” Id. at 7 (quoting Intellectual Ventures, 842 F. Supp. 2d at 754). Although the defendant provided legitimate reasons it preferred to litigate in the Northern District of California—which was the location of its headquarters, product development, almost all employees, all documents, and potential third party witnesses—the Court explained, “Defendant’s choice weighs in favor of transfer, however this factor is not provided the same weight as plaintiff’s preference.” Id.
The Court also explained, with regard to whether the Northern District of California was more convenient for the parties than the District of Delaware, that “[u]nless the defendant is truly regional in character – that is, it operates essentially exclusively in a region that does not include Delaware – transfer is often inappropriate.” Id. at 9 (internal quotation marks omitted). Here, the Court noted that both parties were multi-national corporations with worldwide business activities and interests. Id. at 10. Because neither party convincingly made the case that it would be inconvenienced in either the District of Delaware or the Northern District of California, the Court explained that “incorporation in Delaware tips the balance under this part of the convenience analysis. Given that both parties were incorporated in Delaware, they had both willingly submitted to suit there, which weighs in favor of keeping the litigation in Delaware.” Id. (internal quotation marks omitted).
As for the convenience of potential witnesses, including third party witnesses, the Court noted that only the defendant made a case that its preferred forum was more convenient, as the plaintiff failed to identify any witness who might be unavailable in the Northern District of California. Id. at 12. However, the Court noted that “[t]his factor … warrants limited weight since unavailability and lack of cooperation by non-party witnesses are not presumed.” Id. at 12-13 (citing Ivoclar Vivident AG v. 3M Co., No. 11-1183-GMS-SRF (D. Del. June 22, 2012) (“The practical impact of this factor is limited by the fact that few civil cases proceed to trial, and at trial, few fact witnesses testify live.”)). The Court viewed similarly the location of relevant books and records, explaining that although they were mostly located in the Northern District of California, there was no indication that it would be unduly burdensome to bring them to the District of Delaware, if needed, in light of technological advances. Id. at 14.
Finally, the Court explained that none of the public interest factors weighed in favor of transfer, and one factor especially weighed in favor of keeping the case in the District of Delaware. Citing a Federal Circuit decision, the Court explained that the public policy of the fora weighed in favor of keeping the litigation in the District of Delaware “[g]iven that both parties were incorporated in Delaware, [and] they had both willingly submitted to suit” in Delaware. Id. at 17 (quoting Micron Technology, Inc. v. Rambus, Inc. 645 F.3d 1311, 1332 (Fed. Cir. 2011). On balance, Magistrate Judge Thynge found that transfer was not appropriate in this case, and recommended that the Court deny the defendant’s motion because the “defendant has failed to satisfy its burden of showing that the Jumara factors weigh strongly in favor of transfer.” Id. at 18 (citing Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (Fed. Cir. 1970) (“[U]nless the balance of convenience of the parties is strongly in favor of defendant, the plaintiff’s choice of forum should prevail.”)).
On October 19th, 2012, the jury returned a verdict in St. Jude Medical v. Volcano Corp., C.A. No. 10-631-RGA (D. Del.). The case involved patents related to technology for diagnosis of heart disease. The jury unanimously found that St. Jude failed to prove that Volcano infringed St. Jude’s patents (U.S. Patent Nos. 6,112,598 and 6,248,083). The jury also found that claims 1, 2 and 10 of St. Jude’s patents were invalid as anticipated and obvious (U.S. Patent Nos. 5,938,624 and 6,196,980).
On October 25, 2012, after a second trial on Volcano’s counterclaims, the jury returned a verdict that Volcano had failed to prove that St. Jude literally infringed one of its patents (U.S. Patent No. 5,178,159) and that St. Jude infringed three of its patents under the doctrine of equivalents (U.S. Patent Nos. 5,178,159, 5,797,856, and 6,976,965).
Chief Judge Gregory M. Sleet recently denied defendant’s motion to transfer venue of this patent infringement action to the District of Massachusetts. AIP Acquisition LLC v. iBasis, Inc., C.A. No. 12-616-GMS (D. Del. Oct. 19, 2012). Plaintiff was a Delaware LLC with its principal place of business in Fort Lee, New Jersey, and defendant was a Delaware corporation with its principal place of business in Burlington, Massachusetts. Judge Sleet noted that in this case, plaintiff’s forum choice is afforded substantial deference because Delaware is plaintiff’s home forum (unlike in In re Link_A_Media, 662 F.3d 1221 (Fed. Cir. 2011)). Defendant had argued that plaintiff is based in New Jersey, and so its choice of forum was entitled to less weight, but Judge Sleet was unconvinced because “a corporate entity’s state of incorporation is part of its ‘home turf[.]’” Id. at 4. Judge Sleet also considered the “practical considerations” that related litigation involving plaintiff and the same patents was currently pending before the court and that “[p]ermitting the two cases to proceed in the same court could minimize costs to the judicial system as a whole, by requiring that only one court become familiar with the relevant technology.” Id. at 9. The court denied the motion because, although some private interest factors favored transfer (specifically defendant’s forum preference, where the claims arose, and where the relevant books and records were located), all other factors were either neutral or weighed “decidedly” against transfer. Id. at 10.
A recent decision by Judge Richard G. Andrews shows that courts need not provide parties with leave to amend pleadings where the proposed amendments are inconsequential. LG Electronics, Inc. v. Asko Appliances, Inc., et al., C.A. No. 08-828-RGA (D. Del. Oct. 17, 2012). The defendants’ motion sought leave to “pare down their inequitable conduct claims, clarif[y] their antitrust counterclaims, and add a defense of intervening rights.” Id. at 1. The Court denied the motion with respect to the first two proposed amendments (deleting over 100 paragraphs relating to inequitable conduct and “refram[ing]” antitrust issues). Id. The Court explained that “narrowing of the inequitable conduct issues can be achieved by stipulation or other understanding among the parties,” and the proposed antitrust amendments “do not add new theories, factual disputes or issues to the case.” Id. The Court explained, “[j]ustice does not require providing leave to make these inconsequential amendments.” Id. (citing Fed. R. Civ. P. 15(a)(2)).
The Court did not find the proposed addition of an intervening rights defense to be inconsequential, though, and granted leave to make that amendment. Id. at 2. The Court found that the defendants timely sought to add an intervening rights defense after the plaintiff was granted leave to amend its infringement contentions regarding claims that were altered by reexamination. Id. The Court explained, “[w]hile the intervening rights defense will require technical and legal analyses of the extent to which the reexamined claims have changed, Defendants assert their defense is germane to the as-yet-unscheduled damages portion of the case, and not to the pending liability phase.” Id. Based on that limitation, the Court found that the defendants could add an intervening rights defense without unduly burdening or prejudicing the plaintiffs or the Court. Id.
Magistrate Judge Christopher Burke has issued a report in patent litigation between patent-holding company Pragmatus and internet giant Yahoo!, recommending that Yahoo’s motion to transfer venue to the Northern District of California be denied. See Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-902-LPS-CJB (D. Del. Oct. 15, 2012). Judge Burke wrote a lengthy opinion analyzing the various public and private interest factors of Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) in great depth and explaining how those factors are typically applied in the District of Delaware. Ultimately, Judge Burke found that two factors weighed against transfer, four favored transfer, and six were neutral: “[T]he plaintiff’s choice of forum and practical considerations weigh against transfer. The defendant’s forum preference and whether the claim arose elsewhere weigh in favor of transfer. Two other factors—the convenience of the witnesses and the location of books and records—also weigh in favor of transfer, though only slightly, and not sufficiently to make a material impact on the Court’s decision.”
In reaching this conclusion, Judge Burke clarified several disputes among the parties as to the proper application of transfer precedent in the District of Delaware. He first stated that the Federal Circuit in In re Link_A_Media Devices Corp., 662 F.3d 1221 (Fed. Cir. 2011) “noted that a party’s state of incorporation is not one of the factors listed in Section 1404 or in Jumara, and stated that it would be inappropriate for a court to place ‘heavy reliance’ on this fact, such that it became ‘dispositive’ in the venue transfer analysis.” Nevertheless, he noted, “nothing in Link _A_ Media suggests that a defendant’s place of incorporation is irrelevant to the transfer analysis.” Rather, “in many circumstances, the Federal Circuit has found that the location of a defendant’s incorporation in a forum can be a fact supporting the conclusion that a lawsuit is properly venued in that same forum.” Next Judge Burke considered Yahoo!’s suggestion that when considering the availability of witnesses factor, “it is sufficient for purposes of venue transfer analysis if the witness is not subject to a court’s subpoena power.” He explained that the precedent relied on for this proposition in turn relied on precedent “where the Court intently considered whether there was evidence that the non-party witnesses at issue would actually be unavailable for trial.” He therefore concluded that “to automatically consider a witness unavailable, simply because they reside outside of this District’s subpoena power, would render the inquiry required by this factor unduly wooden.” Rather, a court must consider whether there is evidence that witnesses would actually be unavailable for trial. Finally, in considering the court congestion factor, Judge Burke noted that “for the first time in years, this Court now has a full bench of four U.S. District Judges (and, for the first time ever, three U.S. Magistrate Judges). In light of that . . . [he was] not persuaded by [the] argument that difficulties relating to court congestion favor transfer.”
Based on these and other factors, Judge Burke concluded that while “the issue is a close one . . . Yahoo! has not demonstrated that the balance of convenience of the parties tips strongly in its favor, as is required by Third Circuit precedent.” He refuted Yahoo!’s suggestion that “‘there isn’t a strong showing’ required of defendants in order to obtain a transfer of venue,” stating instead that Third Circuit and District precedent requires “that a defendant bear the ‘heavy burden’ to show that the balance of convenience tips ‘strongly in favor’ of transfer.” Yahoo! did not meet that burden in this case in part because Pragmatus “brought suit . . . in a district that is very near to its place of business and to the location of its employees, a district where it had a legitimate basis to file the litigation (in light of the fact, among other things, that Yahoo! is itself incorporated here), and where the same Court is overseeing myriad other litigation matters involving the patents-in-suit.” Accordingly, Judge Burke recommended denial of the motion to transfer.
Judge Andrews has issued an interesting order regarding an upcoming Markman hearing in Riverbed Technology Inc. v. Silver Peak Systems Inc., C.A. No. 11-484-RGA (D. Del. Oct. 17, 2012). The parties in the case identified 31 disputed terms for construction, and Judge Andrews “note[d] that the parties have no agreed-upon constructions. The ratio of agreed-upon to disputed terms is considerably outside the norm.” Accordingly, he “anticpate[d] that no more than ten terms will be heard at the hearing,” and placed the burden on the parties to identify those terms most in need of construction.
Judge Andrews’ order requires the parties to submit a joint letter “identifying the number of asserted claims, and explaining the importance of construction of the approximately 31 disputed terms to other issues in the case . . . . Each party should also identify, in order of priority, the terms that are most important to the party to have argued at the hearing.” “Depending on what is in the submission,” Judge Andrews warned, “the Court may select the terms to be heard, may narrow the claims at issue, or both, or may postpone the hearing until the parties narrow the claims and terms.”
Judge Andrews and Magistrate Judge Thynge have issued orders resolving numerous pre-trial issues in the past few weeks in the patent infringement litigation between St. Jude Medical and Volcano Corp. related to technology for diagnosis of heart disease. In addition to rulings on claim construction and exclusion of prior art, Judge Thynge has also recently considered St. Jude’s request to exclude portions of Volcano’s expert reports due to spoliation of evidence and Judge Andrews has considered Volcano’s motions to exclude evidence and testimony related to secondary considerations of non-obviousness.
Judge Thynge considered a request by St. Jude to exclude “portions of Volcano’s expert reports based on Volcano’s purported ‘unilateral destructive testing and spoliation of a unique piece of evidence.” See St. Jude Med. Cardiology Div., Inc. v. Volcano Corp., C.A. No. 10-631-RGA-MPT (D. Del. October 9, 2012). Volcano’s expert reports relied on this testing, and St. Jude alleged that it had no notice of the pending dissection of the evidence and no opportunity to conduct its own testing on any similar piece of evidence. Judge Thynge concluded that “St. Jude did not understand Volcano’s experts were dissecting the [evidence, but] . . . Volcano did not willfully conceal the dissection prior to serving [the expert] reports.” Nevertheless, “[b]ecause Volcano altered the [evidence], and did so without St. Jude understanding that alteration would occur, the court [found] there [had] been spoliation.”
Despite finding spoliation of evidence, Judge Thynge did not exclude Volcano’s expert reports. She determined that “Volcano’s exclusive possession of the [evidence], and St. Jude’s inability to prevent, or object to . . . dissection thereof, weighs in favor of finding Volcano ‘at fault’ for altering that evidence.” Nevertheless, St. Jude’s expert was able to “form strong opinions about [the evidence] from examination of the many photographs included in the . . . report documenting the dissection.” Therefore, “the court determine[d] Volcano’s actions . . . did not cause prejudice to St. Jude sufficient to strike portions of the [expert] reports addressing that dissection.” Accordingly, Judge Thynge denied St. Jude’s motion to strike.
Judge Andrews addressed evidence of secondary considerations of non-obviousness. In addition to finding that certain studies could be relevant to secondary considerations and should be admitted, Judge Andrews considered testimony of an expert regarding secondary considerations. See St. Jude Med. Cardiology Div., Inc. v. Volcano Corp., C.A. No. 10-631-RGA-MPT (D. Del. October 12, 2012). He concluded that evidence that “each generation of St. Jude’s products . . . embod[ies] its latest patent” would be insufficient to show the required “nexus” between secondary considerations and the patented invention. Rather, Judge Andrews stated, “there has to be more specific testimony” showing “that any secondary consideration is the result of the patented invention, and not the result of other factors, such as the reputation of the maker, features of the device that were known in the prior art, etc.” Because this proffer was insufficient, Judge Andrews concluded that St. Jude “should not discuss the . . . studies or [the] likely [expert] testimony during its opening. The Court [did] not, however, prohibit the Plaintiff from attempting to lay the appropriate foundation during testimony.”