Delaware IP Law Blog

In Intellectual Ventures I LLC, et al. v. Nikon Corporation, et al., C.A. No. 11-1025-SLR (D. Del. Apr. 1, 2013), Judge Sue L. Robinson granted one defendant’s motion to dismiss for lack of personal jurisdiction and granted-in-part the remaining defendants’ motion to dismiss plaintiffs’ indirect infringement claims.

Plaintiffs had sued four entities, all of which “are ‘Nikon Group Companies’ within . . . [defendant] Nikon Corporation.” Id. at 7. One of the defendants, Sendai, was a Japanese corporation that “manufacturers DSLR cameras and sells them to” Nikon Corporation, its parent that is also a Japanese corporation. Id. While the cameras were then sold in the United States, and Nikon Corporation and another co-defendant “maintain websites in English targeting the United States” and Delaware, Sendai itself conducted no business in the United States. Id. at 6, 7.

Plaintiffs argued that the Court had personal jurisdiction over Sendai based on “several theories,” all of which the Court rejected. Id. at 6. First, because Sendai was not a principal in an agency relationship with any co-defendants, but instead its “conduct [was] directed by its parent,” and because its conduct was “limited to activities in Japan,” plaintiffs had “not asserted sufficient contacts to establish personal jurisdiction” under an agency theory. Id. at 8-9. Second, plaintiffs could not assert jurisdiction “under a dual jurisdiction theory for stream-of-commerce activities in which subsection (1) and (4) of Delaware’s long-arm statute are partially satisfied,” which required a showing of “an intent to serve the Delaware market” and “that this intent results in the introduction of the product into the market.” Id. at 9 (internal citations and quotation marks omitted). There was no indication that “Sendai ha[d] the requisite intent” to sell the cameras in Delaware because its manufacturing and sales were directed to its parent in Japan, its website was in Japanese, and “the cameras themselves offer menus in 20 languages and world time zones.” Id. at 10. “The court has not heretofore exerted dual jurisdiction over a foreign subsidiary based on such attenuated facts, and declines to do so in this case.” Id.

As to indirect infringement, the Court found that, “[c]onsistent with the court’s analysis" in Walker Digital LLC v. Facebook, Inc., 852 F. Supp. 2d 559, 565-66 (D. Del. 2012), plaintiffs’ induced infringement claims were facially plausible and provided defendants with adequate notice. Id. at 11. However it dismissed plaintiffs’ joint infringement claims. Plaintiffs alleged that the defendants “act[ed] alone and together to infringe,” with Nikon Corporation acting “as a mastermind over the other defendants and/or its customers.” Id. at 12. But as claims against Sendai had been dismissed, plaintiffs could not support joint infringement by alleging “Nikon Corporation, as a parent company, controls the distribution of the accused products manufactured by Sendai.” Id. Additionally, “[p]laintiffs [had] not alleged any relationship between the remaining defendants that could plausibly lead to a showing that Nikon Corporation exercises control or direction over its co-defendants.” Id.

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Judge Robinson recently issued a discovery order in the ongoing patent infringement dispute between Mobilemedia Ideas and Apple. Plaintiff Mobilemedia Ideas filed a request for “‘discovery necessary to allow the parties to be prepared to try the damages case’ as soon as possible after the court’s decision on the parties’ post-trial motions.” Judge Robinson denied the request, stating “[t]he court is not inclined to change its standard practice of bifurcating damages until the issue of liability has been decided by the Federal Circuit, until such time (if ever) the Federal Circuit requires the court to abandon said practice.” See Mobilemedia Ideas LLC v. Apple Inc., C.A. No. 10-258-SLR, Order at 1 (D. Del. Apr. 2, 2013).

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In a recent memorandum opinion, Judge Sue Robinson denied patent infringement defendants’ motion to transfer venue but granted the defendants’ motion to dismiss claims of indirect infringement. See Stephenson v. Game Show Network, LLC, C.A. No. 12-614-SLR, Memorandum Opinion at 1 (D. Del. Mar. 27, 2013).

Her decision on the motion to transfer was consistent with her practice in previous cases, including one relied on here, Helicos Biosciences Corp. v. Illumina, Inc., 858 F. Supp. 2d 367 (D. Del. 2012). Judge Robinson observed that a defendant’s state of incorporation—here Delaware—has always been a “predictable, legitimate venue for bringing suit” and that a “plaintiff’s choice of venue should not be lightly disturbed.” Id. at 2 (citations omitted). Accordingly, after considering all of the Third Circuit’s Jumara transfer factors, she found that the defendants had not “tipped the scales of justice in favor of transfer.” Id. at 11.

On the motion to dismiss, Judge Robinson found that a mere corporate relationship between two defendants was not sufficient evidence that one defendant intended the other to infringe and knew that such acts would constitute infringement. Such an allegation of contributory and induced infringement, she found, was insufficient under Rule 8 and should be dismissed. Id. at 12-13.

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Judge Sue L. Robinson recently denied a defendant’s motion to dismiss a first-filed declaratory judgment action or, in the alternative, to transfer it to the Northern District of New York where a second-filed infringement action was pending. Trustco Bank v. Automated Transactions LLC, Civ. No. 12-613-SLR (D. Del. Mar. 27, 2013). After the parties' licensing negotiations broke down, the plaintiff filed a declaratory judgment action in the District of Delaware, and within about three hours the defendant filed its own affirmative infringement action in the Northern District of New York. Id. at 2. The defendant then moved to dismiss the Delaware action, or in the alternative to transfer it to New York, and the plaintiff moved to enjoin the New York action. Id. at 1.

Judge Robinson explained that “[t]he Federal Circuit prefers ‘to apply in patent cases the general rule whereby the forum of the first-filed case is favored, unless considerations of judicial and litigant economy and the just and effective disposition of disputes, require otherwise.’” Id. at 3 (quoting Genentech, Inc. v. Eli Lilly and Co., 988 F.2d 931, 937 (Fed. Cir. 1993), rev’d on other grounds, Wilton v. Seven Falls Co., 515 U.S. 277 (1995). To that end, the Court explained that the first-to-file rule should only be departed from in situations involving “bad faith, forum shopping, when the second-filed action has developed further than the initial suit, and when the first-filing party instituted suit in one forum in anticipation of the opposing party’s imminent suit in another, less favorable, forum.” Id. at 4.

The defendant first argued that the plaintiff’s bad faith negotiation tactics (alleged delay tactics intended to provide additional time to draft a declaratory judgment complaint) justified departing from the first-to-file rule. The Court rejected that argument, explaining that “[p]reparations for litigation during negotiations are commonplace and the court concludes that there is no evidence of bad faith.” Id. at 7. Further, the Court found that the plaintiff had justifiable reasons for choosing to file its declaratory judgment action in Delaware (including the defendant’s status as a Delaware entity with a history of litigating in Delaware), such that forum shopping was not an issue. Id. Finally, the Court did not view transferring the case to New York as compellingly favorable from a judicial economy standpoint given that the New York action was stayed pending resolution of the motion before the Court, and a related New York action was subject to a motion to transfer to the District of Delaware. Id. at 8.

The Court next considered whether it should exercise its discretion to transfer the action to New York under 28 U.S.C. § 1404(a), upon a consideration of the Jumara factors, and found that transfer was not warranted based on the information provided to the Court. Id. at 8-10. The Court explained that the plaintiff did not satisfy its “burden of overcoming the first-filed rule” or its “burden of persuading the court, by a preponderance of the evidence, that the Jumara factors warrant transfer.” Id. at 11. As a result, the Court denied the defendant’s motion, and granted the plaintiff’s motion to enjoin the New York action. Id.

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Judge Robinson recently denied a patent infringement declaratory judgment defendant’s motion to sever and transfer venue to the District of Kansas. Plaintiff Cox filed a declaratory judgment action in the District of Delaware regarding twelve patents owned by Sprint. Cox filed that action after Sprint had filed infringement suits related to the same twelve patents against Cox and three other defendants in the District of Kansas. In the declaratory judgment suit, Cox also asserted infringement by Sprint of two of its patents, and Sprint answered and asserted counterclaims for infringement of seven additional Sprint patents. Sprint then filed a motion to sever and transfer to the District of Kansas, where Sprint alleged it had previously litigated five of the patents-in-suit and had relevant witnesses and documents. The Judge in Kansas then found that the District of Kansas did not have personal jurisdiction over Cox and that the case should be transferred to Delaware, but the parties did not indicate that this mooted the motion to transfer before the Delaware court. Accordingly, Judge Robinson considered the motion to transfer the Delaware action to Kansas. See Cox Comms. Inc. v. Sprint Comms. Co., C.A. No. 12-487-SLR, Memorandum Order at 1-2 (D. Del. Mar. 27, 2013).

Judge Robinson first found that “exceptional circumstances . . . warrant[ed] departure from the first-to-file rule.” The case, she explained, “is unusual in that the alleged first-filed case, the Kansas litigation, has been transferred to this court. Accordingly, that litigation would be streamlined by having this court also resolve the declaratory judgment claims related to the same patents.” Id. at 4.

Judge Robinson then considered transfer pursuant to § 1404. Relying on her decision in Helicos Biosciences Corp. v. Illumina, Inc., 858 F. Supp. 2d 367 (D. Del. 2012), Judge Robinson observed that a defendant’s state of incorporation—here Delaware—has always been a “predictable, legitimate venue for bringing suit” and that a “plaintiff’s choice of venue should not be lightly disturbed.” Id. at 5 (citations omitted). Accordingly, after considering all of the Third Circuit’s Jumara transfer factors and because “the Kansas litigation has been transferred [to Delaware], the court [found] that the Jumara factors do not weigh in favor of transferring the Cox . . . declaratory judgment claims back to Kansas.” Id. at 6-8. Despite the three other Sprint cases remaining in Kansas, Judge Robinson determined that given “the transfer of [the Cox] case and the Kansas court’s lack of personal jurisdiction over Cox Communications, Sprint [had not] carried its burden of persuading the court, by a preponderance of the evidence, that the Jumara factors favor transfer.” Id. at 9.

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Judge Sue L. Robinson recently issued a memorandum opinion granting summary judgment of invalidity for lack of written description and no infringement under the doctrine of equivalents of a patented method of producing isobutanol using genetically-engineered yeast microorganisms aimed at reducing greenhouse gas emissions. Butamax™ Advanced Biofuels LLC v. Gevo, Inc., Civ. No. 11-54-SLR (D. Del. Mar. 19, 2013). Before addressing the merits of several competing summary judgment motions, the Court construed the disputed claims as follows:

“acetohydroxy acid isomeroreductase” was construed to mean “an enzyme known by the EC number 1.1.1.86 that catalyzes the conversion of acetolactate to 2,3-dihydroxyisovalerate and is NADPH-dependent”

“a recombinant yeast microorganism expressing an engineered isobutanol biosynthetic pathway” was construed to mean “a recombinant yeast microorganism that is genetically transformed such that it expresses the five enzymes that form the biosynthetic pathway described hereafter for the production of isobutanol, wherein one or more of those enzymes is recombinantly expressed”

“(pathway step a;…(pathway step b);…,” etc. was construed to mean “the pathway of steps a-e are contiguous steps such that the product of step a is the substrate for step b; the product of step b is the substrate for step c; etc.”

“The microorganism produces isobutanol as a single product” was construed to mean “[t]he microorganism produces isobutanol without substantial amounts of other fermentation products”

Id. at 8-23.

The Court considered, in light of these claim constructions, the parties competing motions for summary judgment on the question of infringement. The Court first explained that the plaintiff’s “evidence of infringement is less than compelling, nonetheless, . . . it [is] sufficient to withstand [the defendant’s] motion for summary judgment, as it raises genuine issues of material fact as to how a person of ordinary skill in the art at the time the invention was made would determine NADH-dependency.” Id. at 39. The Court granted, however, the defendant’s motion for summary judgment of no infringement under the doctrine of equivalents, which asserted that the defendant’s “NADH-dependent enzyme is not equivalent to an NADPH-dependent enzyme.” Id. at 39-40. In light of its claim construction, the Court disagreed with the plaintiff’s position that “the use of NADH as an electron donor is insubstantially different from the use of NADPH.” Id. at 40 (quoting D.I. 648 at 33).

The Court then considered several competing motions for summary judgment on the question of validity. The defendant argued that claim 12 (“[t]he recombinant yeast microorganism of claim 1 wherein the said microorganism further comprises inactivated genes thereby reducing yield loss from competing pathways for carbon flow”) and claim 13 (“[t]he recombinant yeast microorganism of claim 12, wherein said inactivated genes reduce pyruvate decarboxylase activity”) were invalid for lack of written description. Id. at 50-51. With regard to claim 12, the Court found that the patent “mentions inactivation of genes only once” and that “[n]one of the cited portions of the specification provide a description to one of skill in the art on how to construct a recombinant yeast microorganism with ‘inactivated genes’ to reduce ‘yield loss from competing pathways.’” Id. at 51, 52. “Although the specification may be interpreted as identifying both the . . . problem and the solution, it does not even begin to describe how to put into practice the solution.” Id. at 52. Similarly, the specification nowhere disclosed “inactivated genes” that “reduce pyruvate decarboxylase activity[,]” and the Court found that claim 13 was also invalid for lack of written description.

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Judge Sue Robinson has partially granted and partially denied a patent infringement defendant’s motion to dismiss claims of indirect and willful infringement. Consistent with her previous holding in Walker Digital, Judge Robinson found that plaintiff’s claims of both induced and contributory infringement based on notice of the patents-in-suit as of the filing date were facially plausible. Accordingly, she denied the motion to dismiss with respect to these claims of indirect infringement. With respect to willful infringement, however, Judge Robinson explained that the lack of pre-suit knowledge of the patents-in-suit was fatal to claims of willful infringement. Therefore, consistent with her past decisions, Judge Robinson granted the defendant’s motion to dismiss with respect to claims of willful infringement. See Netgear Inc. v. Ruckus Wireless Inc., C.A. No. 10-999-SLR, Memo Order at 1-3 (D. Del. Mar. 14, 2013).

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Judge Sue L. Robinson recently stayed, in the interest of judicial economy, its decision on the motion to amend judgment filed by defendant, pending the Federal Circuit's decision in Robert Bosch LLC v. Pylon Manufacturing (see discussion here). Asahi Glass Co., Ltd., v. Guardian Indus. Corp., C.A. No. 09-515-SLR (D. Del. Mar. 11, 2013). "The Federal Circuit is currently considering, en banc, its jurisdiction over appeals from patent infringement liability determinations when a trial on damages has not yet occurred and when willfulness issues remain outstanding." Id. A stay was appropriate because the Federal Circuit's decision would have a "direct impact" on the appealability of this case. Id.

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Judge Sue Robinson has ordered a patent infringement defendant to reimburse plaintiff’s attorney fees of $23,658 in connection with plaintiff having to respond to defendant’s post-trial briefing on inequitable conduct. See Asahi Glass Co. v. Guardian Indus. Corp., C.A. No. 09-515-SLR, Memorandum Order at 1 (D. Del. Mar. 11, 2013). Judge Robinson previously found that defendant’s theories of inequitable conduct “were either devoid of merit or procedurally barred” and ordered defendant to pay plaintiffs’ reasonable costs in preparing and filing their responsive brief on inequitable conduct. The parties were, however, unable to agree on the amount of plaintiffs’ fees for which defendant was responsible. Id. at 1-2.

Judge Robinson found that a “detailed and reliable reconstruction of time spent” was acceptable to support the request for 20 hours of partner attorney time on the responsive brief. She also found that because only 30.2 hours of associate time were evidenced by client invoices and there was no similar reconstruction of time, only 30.2 hours were allowable as costs, not the 40 requested by plaintiffs. Id. at 4-7. Finally, Judge Robinson found that both the amount of time spent on the brief and the hourly rates charged were reasonable in light of the length of the briefing in question, the importance and high stakes of the issue being briefed, and the prevailing market rates for intellectual property attorneys. Id. at 7-8. Because the defendant demonstrated no sufficient justification for reducing the award, Judge Robinson granted the requested partner, associate, and paralegal fees.

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In a recent memorandum opinion, Judge Sue Robinson denied a patent infringement defendant’s motion to transfer venue to the Northern District of Texas. Plaintiff Cradle IP was incorporated in Delaware and headquartered in California, while Defendant Texas Instruments was incorporated in Delaware and headquartered in Texas. See Cradle IP, LLC v. Texas Instruments, Inc., C.A. No. 11-1254-SLR, Memo. Op. at 1-2 (D. Del. Feb. 13, 2013).

Referring to her opinion on a similar motion in Helicos Biosciences Corp. v. Illumina, Inc., 858 F. Supp. 2d 367 (D. Del. 2012) (discussed here), Judge Robinson began with “the premise that a defendant’s state of incorporation has always been ‘a predictable, legitimate venue for bringing suit’ and that ‘a plaintiff, as the injured party, generally ha[s] been ‘accorded [the] privilege of bringing an action where he chooses.’’” Cradle IP, LLC v. Texas Instruments, Inc., Memo. Op. at 2. At the same time, Judge Robinson recognized that “the Federal Circuit expects an analysis of all the Jumara factors in connections with any transfer decision,” and proceeded to address each factor in turn. Id. at 3.

Judge Robinson found that the only factor favoring transfer was the “practical considerations that could make the trial easy, expeditious, or inexpensive,” because “trial in the Northern District of Texas would be easier and less expensive for [Texas Instruments, but it] is not evident that trial in Delaware would be easier and less expensive for Cradle IP.” Id. at 8. Every other factor either weighed against transfer or was neutral (the remaining factors were: choice of forum, where the claims arise, the parties’ relative size, convenience of the witnesses, location of books and records, relative administrative difficulty, local interest in deciding local controversies, enforceability of a judgment, public policies of the fora, and the familiarity of the judge with state law). Ultimately, she found, Texas Instruments did not meet its burden of showing that Cradle IP’s choice of forum should be disturbed. Id. at 5-9.

Perhaps most significantly, Judge Robinson declined Texas Instruments’ invitation to “‘accord[] little weight [to the plaintiff’s choice of venue] because [Cradle IP’s] recent incorporation in Delaware is an article of litigation’ and . . . ‘simply a litigation vehicle for [Cradle IP’s parent corporation], designed to give it an anchor, however tenuous, to this District.’” Id. at 4. Judge Robinson explained: “many businesses and academic institutions enforce their patent rights through private companies (like Cradle IP); such a business strategy is not nefarious. The court declines to treat such non-practicing entities as anything less than holders of constitutionally protected property rights, those rights having been legitimized by the Patent & Trademark Office.” Id.

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