Delaware IP Law Blog

Magistrate Judge Sherry R. Fallon recently recommended the dismissal of a pro se patent infringement complaint filed against the United States, various United States officials, and Kannalife Sciences, Inc. McDowell v. U.S., et al., C.A. No. 12-1302-SLR-SRF (D. Del. May 10, 2013). The pro se plaintiff was the inventor of U.S. Patent No. 7,597,910, “directed to compositions and methods for treating prostate disorders using a mixture of cannabis, shiitake mushrooms, and maitake mushrooms,” but had assigned the patent to SLGM Medical Research Institute. Id. at 1, 5. The inventor argued that he had standing to bring the complaint because he and SLGM Medical Research were “one and the same,” but Magistrate Judge Fallon rejected that argument, explaining that “only the owner of the patent has standing to sue.” Id. at 5. Magistrate Judge Fallon also recommended that the complaint against the United States and its officials be dismissed for lack of subject matter jurisdiction on the basis that 28 U.S.C. § 1498 requires that patent infringement actions against the United States be filed in the United States Court of Federal Claims. Id. at 6.

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Magistrate Judge Sherry R. Fallon recently recommended that the court grant defendant Staples, Inc.’s 12(b)(6) motion to dismiss claims made against it for indirect and willful infringement of U.S. Patent No. 6,216,139. Execware, LLC v. Staples, Inc., C.A. No. 11-836-LPS-SRF (D. Del. Dec. 10, 2012).

Judge Fallon first addressed plaintiff’s indirect infringement claims, which included claims of induced and contributory infringement, and noted that in order to survive a motion to dismiss, a plaintiff must (1) “adequately plead a claim for direct infringement,” and (2) “plead sufficient facts . . . for the Court to infer that the defendants had knowledge of [the plaintiff’s] patents and that their products infringed on those patents.” Id. at 4-5 (quoting Trading Techs. Int’l, Inc. v. BCG Partners, Inc., 2011 WL 43946581, at *3 (N.D. Ill. Sept. 2, 2011) (emphasis in original)). To adequately plead direct infringement, a plaintiff must provide the level of detail required by Form 18 of the Federal Rules of Civil Procedure. Id. at 4. Judge Fallon found that plaintiff failed to provide such detail. Id. at 7. Despite identifying Staples’ customers as the alleged direct infringers, the amended complaint did not “allege that Staples’ customers actually used the accused software, or that Staples caused its customers to directly infringe the ’139 patent.” Id. at 6-7. As a result, Judge Fallon recommended the dismissal of the plaintiff’s direct infringement claim. Id. at 6-8.

Judge Fallon further recommended that if the court did not adopt her recommendation regarding direct infringement, plaintiff’s indirect infringement claim should be “limited from the date of filing of the complaint.” Id. at 8. In reaching her recommendation, Judge Fallon relied on a line of District of Delaware rulings in concluding “that a plaintiff may plead actual knowledge of the patents-in-suit as of the filing of the initial complaint to state a cause of action limited to the defendant's post-litigation conduct, and a defendant’s decision to continue its conduct despite knowledge gleaned from the complaint is sufficient to establish the intent element required to state a claim for indirect infringement.” Id. at 10 (citing Apeldyn Corp. v. Sony Corp., 852 F. Supp. 2d 568, 573-74 (D. Del. 2012); Walker Digital, LLC v. Facebook, Inc., 852 F. Supp. 2d 559, 565-66 (D. Del. 2012)). Because the plaintiff’s amended complaint alleged that Staples had knowledge of the patent only after the filing of the complaint, Judge Fallon explained that the indirect infringement claims should be limited to activity after the filing date. Id.

Turning to the plaintiff’s wilfull infringement claim, Judge Fallon noted that in order to overcome a motion to dismiss, a plaintiff must plead “facts giving rise to at least a showing of objective recklessness of the infringement risk.” Id. at 11 (quoting St. Clair Intellectual Prop. Consultants, Inc. v. Hewlett-Packard Co., 2012 WL 1134318, at *2-3 (D. Del. Mar. 28, 2012)). Judge Fallon further noted that the “Federal Circuit has held that a patentee cannot recover enhanced damages based solely on the accused infringer’s post-filing conduct when the patentee has not sought a preliminary injunction.” Id. at 12. Because the plaintiff failed to plead that Staples had “pre-suit knowledge of the ‘139 patent,” Judge Fallon recommended that the court dismiss its wilfull infringement claim. Id. at 12-13.

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The formal investiture of Magistrate Judge Sherry R. Fallon will take place at the District Court on Friday, October 12, 2012 at 3:00 p.m. There is no need to RSVP. Light refreshments will be available immediately following the ceremony in the courtroom lobby area.

See you there!

In Monec Holding AG v. Motorola Mobility, Inc., et al., C.A. No. 11-798-LPS-SRF (D. Del.), Magistrate Judge Fallon recently issued a Report and Recommendation recommending that defendants’ motion to dismiss plaintiff’s claims for indirect infringement and willfulness be granted. Id. at 1. In the case, plaintiff filed suit against multiple defendants alleging willful, direct and indirect infringement of a patent relating to an electronic book technology. Id. at 1-2. Specifically, in its first amended complaint, as bases for its claims of indirect infringement and willfulness, plaintiff alleged that: (1) “Defendants instruct their customers, both retailers and end-users, on infringing uses of the Infringing Products”; (2) “Defendants knew or should have known that the Infringing Products were especially made for use in an infringement of [the patent-in-suit]”; and (3) “there is no substantially noninfringing use of the Infringing Products.” Id. at 2. In support of its allegations that defendants had actual knowledge of the patent-in-suit, plaintiff further alleged that because defendants’ competitors had been engaged in litigation with plaintiff involving the same patent at issue in this case, and because that litigation received substantial press coverage, defendants in this case were aware of and would have likely followed and monitored that litigation. Id. at 1-2.

The Court disagreed, concluding that plaintiff had failed to allege sufficient facts from which the Court could infer that defendants had actual knowledge of the patent-in-suit at the time they committed the allegedly infringing activities. Monec Holding at 8-9. The Court found that plaintiff’s assumption that defendants would have known about the patent-in-suit based on the litigation activities of their competitors was not enough. Id. at 8. The Court also found that the plaintiff failed to sufficiently allege willful blindness or that the defendants somehow purposefully avoided knowledge of the patent-in-suit. Id. at 12. In addition, on the issue of intent, the Court found that plaintiff’s “conclusory averments” contained no factual support to establish the requisite intent and that marketing activities of the defendants, absent more, do not demonstrate that defendants knew such activities were infringing or that defendants had the specific intent to encourage another’s infringement. Id. at 13. Likewise, on the issue of willful infringement, the Court found that plaintiff failed to sufficiently allege how or why defendants would have known that the patent-in-suit applied to their allegedly infringing activities or that defendants acted in “deliberate disregard” of plaintiff’s rights. Id. at 16.

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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.

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