January 13, 2013

Judge Robinson finds twelve patents unenforceable in light of unlawful spoliation in Micron Tech., Inc. v. Rambus Inc.

Judge Sue L. Robinson held in a recent post-trial opinion that “Rambus’ spoliation was done in bad faith, that the spoliation prejudiced Micron, and that the appropriate sanction is to declare the patents-in-suit unenforceable against Micron.” Micron Tech., Inc. v. Rambus Inc., C.A. No. 00-792-SLR, at 45-46 (D. Del. Jan. 2, 2013). This case was on remand from the Federal Circuit, which directed Judge Robinson to “reconsider [the] bad faith and prejudice determinations related to Rambus’ spoliation, as well as the appropriate sanction, if any, for Rambus’conduct.” Id. at 21. See here a discussion of the Federal Circuit’s opinion, and here for a discussion of Judge Robinson’s opinion prior to appeal.

Judge Robinson noted that in order to find “bad faith,” the Court must “find that Rambus implemented its document retention policy to disadvantage Micron or other potential defendants.” Id. at 22. Judge Robinson explained that “four categories of facts in this case support a finding of bad faith.” Id. Specifically, these categories were “(1) facts tending to show that Rambus’ document retention policy was adopted as part of a firm litigation plan; (2) facts tending to show that the document retention policy was executed selectively; (3) facts tending to show that Rambus acknowledged the impropriety of the document retention policy; and (4) Rambus’ litigation misconduct.” Id. Judge Robinson delineated the specific facts that fell under each category and concluded that there existed “clear and convincing evidence that Rambus’ spoliation was carried out in bad faith.” Id. at 22-29.

Turning to whether Rambus’ spoliation prejudiced Micron, Judge Robinson noted that “[t]he question of prejudice ‘turns largely’ on whether a spoliating party destroyed evidence in bad faith.” Id. at 29. Because “bad faith [had] been found on Rambus’ part, the burden shift[ed] to Rambus to show lack of prejudice.” Id. at 30. Judge Robinson ultimately held that Rambus did not satisfy its burden, and that “Rambus’ spoliation at least prejudiced Micron’s (1) claims and defenses related to patent misuse and violation of antitrust and unfair competition laws, and (2) defense of inequitable conduct.” Id. Regarding the prejudice to Micron’s inequitable conduct defense, Judge Robinson addressed the prongs of “specific intent” and “materiality” individually. Judge Robinson found that “proving the intent prong of inequitable conduct would undoubtedly be more difficult for Micron given Rambus’ bad faith spoliation,” as “nonpublic documents will be instrumental in showing that the patentee purposely chose not to disclose a known reference to the PTO.” Id. at 36. Similarly, Judge Robinson found that proving the “materiality” prong of inequitable conduct would be more difficult, as Micron was precluded from “possibly obtaining evidence of affirmative acts of egregious conduct, such as perjury, the manufacture of false arguments, or deliberate fraud during prosecution.” Id. at 37. Under Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc), such egregious acts support a finding of materiality. Id. at 37. Furthermore, with regard to both specific intent and materiality, Judge Robinson emphasized that “the fact that no record was made of what documents were destroyed [could] be of no avail to Rambus, the bad faith actor.” Id. at 37 (emphasis added).

Next, Judge Robinson addressed the appropriate sanction to “rectify Rambus’ spoliation.” Id. at 37. Judge Robinson relied on the factors set forth in Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76 (3d Cir. 1994), which include “(1) the degree of fault of the spoliating party; (2) the degree of prejudice to the adverse party; and (3) whether there is a less severe punishment that would avoid substantial unfairness to the adverse party while still serving to deter similar spoliation by others in the future.” Id. at 38. First, Judge Robinson noted that the “degree of fault in Rambus’ spoliation cannot be overstated by the court.” Id. at 39. Judge Robinson explained that even though her finding of “bad faith” spoliation was sufficient to find Rambus at fault, that degree of fault was “compound[ed]” by “Rambus’ purposeful, thorough document destruction, which did not occur just once, but several times in 1999 and 2000.” Id. (emphasis added). Second, Judge Robinson reiterated that “several of Micron’s affirmative defenses [had] been prejudiced by Rambus’ bad faith spoliation.” Id. She reasoned that “[w]hile the precise degree of prejudice cannot be known because Rambus did not keep any record of what was destroyed, Rambus should not easily be able to excuse its misconduct by claiming that the vanished documents were of minimal import.” Id. Moreover, “[t]he wide range and sheer amount of materials destroyed, along with Rambus’ bad faith, [made] it almost certain that the misconduct interfered with the rightful resolution of the case.” Id. at 39-40.

Third, Judge Robinson considered sanctions less severe than holding the patents-in-suit unenforceable and found them “inappropriate for the unique circumstance of this case.” Id. at 40-46. In reaching her conclusion, Judge Robinson noted that “Rambus’ destruction of evidence was of the worst type: intentional, widespread, advantage-seeking, and concealed.” Id. at 44 (emphasis added). Judge Robinson explained that “[a]ttorney fees, monetary sanctions, and adverse jury instructions will not restore Micron to the same position in which it would have been absent Rambus’ unlawful spoliation, and an evidentiary sanction would likely result in the same substantive outcome but in a less efficient manner.” Id. at 45. Judge Robinson further explained that “[a]ny lesser sanction would, in effect, reward Rambus for the gamble it took by spoliating and tempt others to do the same.” Id. at 45. Judge Robinson concluded that the appropriate sanction was “to hold the patents-in-suit unenforceable against Micron,” given the “nature and degree of Rambus’ wrongdoing.” Id. at 45-46.

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December 20, 2012

Judge Robinson Grants Defendants’ Motion for Leave to Amend Answers in ANDA Litigation

Judge Sue Robinson recently granted defendants’ motion for leave to amend their answers to add the affirmative defense of intervening rights in a consolidated ANDA litigation action. See Senju Pharmaceutical Co., et al. v. Lupin Limited, et al., C.A. No. 11-271-SLR (consolidated), Slip Op. (D. Del. Dec. 14, 2012). Plaintiffs’ original complaint alleged infringement of U.S. Patent Nos. 6,333,045 and 5,880,283. Id. at 2. Prior to this motion, “plaintiffs further amended their complaint to allege infringement of [U.S. Patent No. 6,333,045] as reexamined by defendants’ ANDA No. 202-653 and also by defendants’ ANDA No. 202-709.” Id. at 2-3. Defendants subsequently “answered the amended complaints and counterclaimed to each.” Id. at 3. Approximately nine months after plaintiffs answered defendants’ counterclaims, defendants moved for leave to further amend their answers with an affirmative defense of intervening rights. Id.

Judge Robinson noted that leave to amend “shall be freely given when justice so requires.” Id. at 3 (quoting Foman v. Davis, 371 U.S. 178, 182 (1962) (quoting Fed. R. Civ. P. 15(a))). Judge Robinson then explained that under the doctrine of intervening rights, “an infringer who was engaged in allegedly infringing activities (or ‘substantial preparation was made by the infringer’ to do so) before a reexamination certificate issued may continue to infringe said claims, if the court determines that the reexamined claims are broader in scope than the original claims, and to the extent and under such terms as the court deems equitable. . . .” Id. at 4. Thus, “the doctrine of intervening rights is a defense to infringing activity occurring after reexamination.” Id.

Plaintiffs argued that defendants’ amendment would be “futile, apparently because defendants have not conceded that they have engaged in infringing activity.” Id. Judge Robinson disagreed, and noted that “at this stage of the proceedings, defendants need not so concede, but may advance the defense of intervening rights based on plaintiffs’ allegation that ‘[d]efendants have made, and will continue to make, substantial preparation in the United States to manufacture, sell, offer to sell, and/or use within the United States, and/or import into the United States the [d]efendants’ gatifloxacin ophthalmic solution which is the subject of ANDA’ No. 202-653 and No. 202-709.” Id. 4-5. Further, defendants “contend that each ANDA sets forth preparation steps sufficient to allow the proposed affirmative defense.” Id. at 5. Thus, in light of the fact that defendants demonstrated that there is “at least some evidence to support an affirmative defense of intervening rights,” Judge Robinson granted defendants’ motion for leave to amend their answers. Id.

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December 11, 2012

Judge Robinson Denies in Part, Grants in Part Defendants’ Motion for Judgment on the Pleadings Based on Theory of Collateral Estoppel

In a recent memorandum order, Judge Sue L. Robinson granted patent infringement defendants Lupin Limited and Lupin Pharmaceuticals’ Rule 12(c) motion for judgment on the pleadings as to one claim of plaintiffs’ patent, and denied the motion as to other claims. See Senju Pharmaceutical Co., et al. v. Lupin Limited, et al., C.A. No. 11-271-SLR (consolidated), Slip Op. (D. Del. Dec. 7, 2012).

Plaintiffs alleged that defendants’ ANDA infringed two of their patents. Id. at 2. The parties had previously stipulated to the dismissal of all claims and counterclaims related to one patent, and defendants moved for judgment on the pleadings as to certain claims of the remaining patent (“the ’045 patent”). The ’045 patent “is directed to aqueous liquid pharmaceutical compositions comprising gatifloxacin and disodium edtate [(“EDTA”)], as well as various methods utilizing these compositions.” Plaintiffs had previously filed a request for reexamination of various claims of the ’045 patent and amended their complaint to allege infringement—by two of defendants’ ANDA applications—of the ’045 patent as reexamined. Id. at 2-3. The reexamination had resulted in, inter alia, an amended claim 6 and the addition of claims 12-16. See U.S. Patent No. 6,333,045 Ex Parte Reexamination Certificate.

In their motion, defendants alleged that the “narrower reexamined claims 6 and 12-16 of the ’045 patent are invalid for obviousness and that plaintiffs should be collaterally estopped from relitigating these claims based on this court’s findings in Senju Pharmaceutical Co. Ltd. v. Apotex Inc., 717 F. Supp. 2d 404, 419-27 (D. Del. 2010).” Senju Pharma., Slip Op. at 5. In this prior decision (“Apotex”, discussed here), the Court had construed “the EDTA concentration limitation [in “original claim 6”] to be from 0.001 to 0.2 w/v%.” Id. at 5 (citing Apotex at 419 & n.26, 421-23). Plaintiffs countered that the “reexamined claims [had] not been previously litigated and decided, because this court did not consider or determine the validity of a claim limited to 0.01 w/v% [EDTA]” in Apotex. Id. (internal citations and quotation marks omitted).

The Court accepted plaintiffs’ argument as to reexamined claims 6 and 12-16 after summarizing Apotex. Id. at 7. In Apotex it had held that “original claim 6 was obvious in light of the prior art as it ‘would lead one of ordinary skill in the art to reasonably expect that’” EDTA would be combined with gatifloxacin at the concentrations in original claim 6. Id. at 5-6 (quoting Apotex at 423). However, the Court now concluded that “[a]lthough in the ’045 patent the concentration of EDTA is limited to from 0.001 to 0.2 w/v%, this court did not specifically make findings for a claim with a limitation of 0.01 w/v% EDTA [in Apotex ] . . . . Moreover, plaintiffs did not fully litigate a claim with a limitation of 0.01 w/v% EDTA and [defendants have] not shown sufficient evidence that this limitation does not lend patentable significance to reexamined claims 6 and 12-16.” Id. at 7. In support of its conclusion, the Court cited 35 U.S.C. § 282 for the proposition that “a narrower claim is not rendered invalid by the invalidity of a broader claim.” Id. at 7 n.5. Accordingly, the Court denied the motion for judgment on the pleadings as to these reexamined claims.

The Court also rejected plaintiffs’ argument that its 2012 decision in the same Apotex case, discussed here, precluded the application of collateral estoppel, explaining that “[t]his court stated that claim preclusion applied to that case, not that issue preclusion could never apply.” Id. at 5 n.2.

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November 21, 2012

Judge Robinson Excludes Patent Claims from Upcoming Trial Because Claims had Substantively Changed During Reexamination

Judge Sue Robinson has issued a memorandum order on a patent infringement defendant’s motion to exclude several claims of the patent-in-suit from consideration at trial. See MobileMedia Ideas, LLC v. Apple Inc., C.A. No. 10-258-SLR (D. Del. Nov. 15, 2012). During the pendency of the case, the PTO conducted an ex parte reexamination of the patent-in-suit and concluded that three claims were patentable as amended. After the PTO had concluded its reexamination, the defendant requested that Judge Robinson exclude the three amended claims from the upcoming trial, which was only a few weeks away and would proceed on the unamended claims. The plaintiff sought inclusion of the three amended claims in the trial, in place of the three original claims. Judge Robinson ultimately ordered that the claims be excluded. Id. at 6.

Judge Robinson explained that reexamined claims must be “legally identical to their original counterpart . . . [meaning] ‘without substantive change.’” Id. at 4 (citing Laitram Corp. (Laitram II), 163 F.3d 1342, 1346 (Fed. Cir. 1998)). Essentially, “the scope of the claims [must be] identical.” Id. She pointed out that the amendments to the claims at issue “incorporate limitations from other claims of the [patent-in-suit] . . . [but] the combination of elements in amended claim 1 did not exist in a single claim prior to the issuance of the reexamination certificate” and experts had not had the opportunity to address the combination of elements in one claim. Id. at 4-5. Accordingly, Judge Robinson found that the claim at issue and claims dependent on it had substantively changed during reexamination and that “proceeding with the reexamined claims at this stage may open the door to new infringement theories and opinions at trial that have not been vetted through discovery.” Id. at 5-6. Additionally, the defendant would be “unduly prejudiced . . . [because it had] framed its invalidity defenses for the [patent-in-suit] in light of the original claims.” Id. at 6. Accordingly, Judge Robinson excluded the amended claims from trial.

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October 15, 2012

Judge Robinson denies emergency request seeking disqualification of expert witness.

Judge Sue L. Robinson recently denied a plaintiff’s emergency request seeking to disqualify an opposing expert witness based on the expert’s earlier consultations with the plaintiff, pursuant to a confidentiality agreement, regarding the litigation. Butamax Advanced Biofuels LLC v. Gevo, Inc., Civ. No. 11-54-SLR (D. Del. Oct. 10, 2012). The plaintiff’s emergency request was based on its contention that the plaintiff previously sought to retain the expert, and in the process engaged in substantive discussions regarding how the plaintiff would respond to certain arguments expected to be made by the defendant. Id. at 1-2. The emergency request provided: “Through the confidential relationship, [the expert] at least learned counsel’s [modus operandi] and decision-making process. Yesterday, [the expert] indicated he will consult for [the defendant’s] counsel on the same matters. The Court should exclude [the expert] and preclude [the defendant] from contacting him further.” Civ. No. 11-54-SLR, D.I. 531.

The Court explained that the disqualification of an expert witness is justified where it was “(1) … objectively reasonable for the party seeking disqualification to have concluded that a confidential relationship existed with the expert;[] and (2) … confidential or privileged information actually [was] disclosed to the expert.” Id. at 2 (citing Syngenta Seeds, Inc. v. Monsanto Co., Civ. No. 02-1331, 2004 WL 2223252, at *1 (D. Del. Sept. 24, 2004)). The Court added that “[a]ffirmative answers to both inquiries ordinarily compel disqualification; however, ‘disqualification is likely inappropriate if either inquiry yields a negative response.’” Id. at 3 (quoting Wang Laboratories, Inc. v. Toshiba Corp., 762 F. Supp. 1246, 1248 (E.D. Va. 1991)).

Here, the Court assumed that because the expert signed a confidentiality agreement, the first prong of the inquiry was satisfied. Id. at 5-6. The Court found, though, that the second prong of the inquiry was not satisfied, because no confidential or privileged information was disclosed to the expert by the plaintiff’s attorney. Id. at 6. The record showed that the expert had not been retained by the plaintiff, nor received any fees or confidential documents from the plaintiff. Id. In fact, the plaintiff’s attorneys had refused to provide the expert “with even publicly available documents from the litigation, e.g., the declarations of two other EC Commission members that had been submitted on behalf of [the plaintiff].” Id. at 6 n.5. The Court found that “the nature of the relationship and of the information allegedly disclosed instantly is much too abbreviated to warrant such a drastic sanction [as disqualification].” Id. at 6. The Court added that allowing the expert to testify on behalf of the defendant would not call into question the integrity of the judicial process, especially where, as here, the expert was “one of a limited number of individuals with expertise related to [the subject matter of his testimony].” Id. at 7.

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October 12, 2012

Judge Robinson Dismisses Claims of Willful and Joint Infringement, Allows Claims of Indirect Infringement

Judge Sue Robinson recently ruled on a motion to dismiss claims of indirect infringement, willful infringement, and joint infringement under Twombly and Iqbal, finding that the plaintiff had adequately plead indirect infringement but not willful or joint infringement. Aeritas, LLC v. Alaska Air Group, Inc., C.A. No. 11-967-SLR, at 1-2 (D. Del. Sep. 28, 2012).

Considering the defendant’s motion to dismiss the amended complaint, Judge Robinson first addressed indirect infringement. She noted that the plaintiff had alleged “induce[d] infringement, of one or more claims of the [patents-in-suit], with specific intent that [the defendant’s] software be used by . . . customers to infringe the [patents-in-suit].” The plaintiff also alleged contributory infringement by the defendant “offering its products to its customers, which constitute a material part of the invention and is not a staple article or commodity of commerce suitable for substantial non-infringing use.” Therefore, “having identified the products at issue for purposes of its direct infringement claims, the court conclude[d] that [the plaintiff had] satisfied the pleading requirements of Twombly and Iqbal with respect to the allegations of indirect infringement found in the amended complaint.” Id. at 5. In making this finding, Judge Robinson reiterated her position in Walker Digital, LLC v. Facebook, Inc., 2012 WL 1129370 (D.Del. Apr. 4, 2012) that a plaintiff meets the requirements of Twombly and Iqbal if it “identif[ies] the patent-at issue and the allegedly infringing conduct, as well as the notice afforded by service of the original complaint and the apparent decision to continue the inducement post-service.”

Turning to the question of willful infringement, Judge Robinson noted that the plaintiff’s amended complaint simply “reserve[d] the right to request [a willful infringement] finding at the time of trial” and alleged that “Defendant’s acts of infringement have been willful under 35 U.S.C. § 284 since at least the date it was served with the Complaint.” In the past, Judge Robinson has “allowed general allegations of willful infringement to withstand motions to dismiss and . . . read[] Seagate as not foreclosing the consideration of conduct after the complaint is filed.” Nevertheless, in this case, she found that “mere notice of the charge of infringement gleaned from service of the complaint [does not] pass muster for a willfulness claim under Rule 8 . . . [as] a patentee must not only demonstrate that the accused infringer knew about the patent (as for indirect infringement), but ‘acted despite an objectively high likelihood that its actions constituted infringement.’” Judge Robinson determined that the allegations of willful infringement did not pass muster under Rule 8 because of “the apparent recognition by [the plaintiff] that it had no good faith basis to assert willful infringement . . . [and] the fact that the burden to prove willful infringement includes more than mere knowledge of the patent.” She noted, however, that “should discovery reveal evidence of willful infringement, [the plaintiff] may approach the court for permission to amend its pleadings at that juncture.” Id. at 7-8.

Finally, Judge Robinson found that the plaintiff had failed to sufficiently plead joint infringement. She explained that “the phrase ‘[t]o the extent that Defendant is jointly infringing . . . it is the mastermind of the infringement’ simply sets forth a proposition, not facts.” She therefore refused to “characterize the speculative language used in the amended complaint as ‘enough factual matter’ that, when taken as true, ‘state[s] a claim for relief that is plausible on its face,’” as required by Twombly. Id. at 9.

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September 17, 2012

Judge Robinson Grants Defendants’ Motion to Dismiss Under the Doctrine of Claim Preclusion Where Infringement Allegations Were Previously Asserted Against the Same Defendants and Based on the Same Patent Invalidated in a Prior ANDA Litigation

In Senju Pharmaceutical Co., Ltd., et al. v. Apotex Inc., et al., C.A. No. 11-1171-SLR (D. Del.), Judge Robinson dismissed plaintiffs’ claims of infringement for failure to state a claim where the allegations were asserted against the same defendants and based on the same patent and same ANDA filing that the Court had ruled upon in a prior litigation. Id. at 1. In that prior litigation, plaintiffs filed suit against defendants for infringement of the patent at issue based on defendants’ ANDA filing. Id. at 1. At the conclusion of that case, the Court entered final judgment against plaintiffs, invalidating the asserted claims of the patent at issue as obvious. Id. at 2-3. However, while that prior litigation was still pending, without notifying the Court, plaintiffs initiated and were engaged in reexamination proceedings involving the same patent at issue. Id. at 1. Following the reexamination proceedings, plaintiffs then filed the instant litigation against defendants alleging infringement of those "new" claims of the patent at issue that were “added or amended” during reexam. Id. at 1. In response, defendants moved to dismiss the instant action based on the doctrine of res judicata or claim preclusion. Id. at 6. Specifically, defendants argued that dismissal was proper because “the claims of the current lawsuit are precluded” by the judgment against the plaintiffs in the prior litigation. Id. at 6. The Court agreed. Id. at 6. Citing both Third Circuit and Federal Circuit authority, the Court noted that “[c]laim preclusion bars any new legal claim based on the same cause of action previously asserted” and that “[e]ach patent, not patent claim, gives rise to an independent and distinct legal claim or cause of action.” Id. at 7 (emphasis in original). In its analysis, the Court concluded that in the instant litigation the plaintiffs “are alleging infringement by the same proposed product that was at issue in the first litigation” and that “[plaintiffs] could have asserted the equivalent of the new and amended claims in the first litigation.” Id. at 8-9. The Court held that the “reexamination of the patent-at-issue did not create a new cause of action against the same previous defendant and accused product and reasoned that “[a]llowing this case to go forward would open the door to relitigation of a matter that has already been decided on the merits.” Id. at 11.

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September 17, 2012

Judge Robinson: summary judgment of non-infringement based on patent exhaustion.

Judge Sue Robinson recently granted a defendant summary judgment of non-infringement based on the doctrine of patent exhaustion. Keurig, Inc. v. Sturm Foods, Inc., Civ. No. 10-841-SLR (D. Del. Sept. 13, 2012). The plaintiff in the case, Keurig, is the manufacturer of popular beverage brewers, as well as individual serving cartridges for use in its brewers. Id. at 1. Keurig sued the defendant, Sturm Foods, asserting various patent and non-patent claims, based on the defendant’s manufacture and sale of its “Grove Square” line of individual serving cartridges, the packaging of which indicates that they are “*For use by owners of Keurig coffee makers.” Id. at 3. In one of several competing motions for summary judgment, the defendant argued that the doctrine of patent exhaustion precluded a finding of infringement. The Court agreed, explaining that the “purpose of the patent exhaustion doctrine is to ensure that a patentee surrenders its statutory monopoly after it has received compensation for an article sold that embodies its patent.” Id. at 10. Here, the “article sold” was the patented brewer. The Court distinguished the case from those in which patent exhaustion arises in connection with the sale of an “incomplete” item because, in this case, Keurig “sells a product that completely practices the patent. … There is no need to determine the extent to which the brewers embody the patent when the brewers are sold in a completed form. For this reason, the court agrees with defendant that the two-prong test [under Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008)] is inapplicable; instead, the ‘long standing doctrine’ that an ‘initial authorized sale of a patented item terminates all patent rights to that item’ is applicable. Id. at 9-10 (quoting Quanta, 553 U.S. at 625). With regard to the non-patent claims (including trademark and trade dress infringement, unfair competition, and false advertising), the Court found that genuine issues of material fact exist which precluded entry of summary judgment.

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September 13, 2012

Judge Robinson Resolves Common Legal Interest Privilege Discovery Dispute

Last week we reported on Judge Sue Robinson’s opinion denying a motion to dismiss for lack of sufficient standing in MobileMedia Ideas, LLC v. Apple Inc., C.A. No. 10-258-SLR (D. Del. Aug. 16, 2012) (read about that decision here). The case is now moving forward on the merits, and Magistrate Judge Mary Pat Thynge has issued a memorandum order regarding MobileMedia Ideas’ (“MMI”) assertion of the common interest privilege.

As detailed in the previous post, MMI is a patent holding entity for Sony and Nokia. Apple, the defendant in this suit, served third party subpoenas seeking documents from three Nokia entities that had previously been shared between Nokia, Sony, and MMI. Each Nokia entity objected to the subpoenas based on the attorney-client privilege. Apple conceded that the common legal interest privilege might apply to the documents because Sony and Nokia worked together to develop a litigation strategy for MMI. But Apple contested whether each document shared among the parties was shared specifically for the purpose of furthering a joint legal strategy, as is required for the common interest privilege to apply. See MobileMedia Ideas LLC v. Apple Inc., C.A. No. 10-258-SLR/MPT, at 1-10 (D. Del. Sep. 10, 2012).

After considering all of the evidence, Judge Thynge found that the common interest privilege applied to the documents Apple sought: “Apple’s argument that the transfer of the patent prosecution files and [invention disclosure forms (“IDFs”)] to MMI were not to further a joint legal strategy is refuted by the Formation and Operating Agreements which provide the central purpose of MMI was ‘to acquire, develop, administer and manage [i]ntellectual [p]roperty rights’ related to the inventions obtained from the Nokia and Sony entities.” Id. at 12. Also, “since the formation of MMI, Nokia, Sony and their respective wholly owned subsidiaries have provided assistance and cooperation to MMI’s outside attorneys . . . . Such future cooperation, which may involve providing additional materials, does not imply that the original transfer of the patent prosecution files and the IDFs was merely to effectuate transfer of the patents.” Id. at 13. Furthermore, [t]he exchanges by Sony [and] Nokia . . . were made under non-disclosure agreements with the understanding the parties shared a common legal interest. . . . A common legal interest agreement . . . was also executed [and] it acknowledged litigation was contemplated.” Id. at 15-16. Finally, Sony and Nokia “receive a percentage of the recovery from any successful enforcement by MMI of the transferred patents confirming their common interest in MMI prevailing in the present litigation.” Id. at 16.

Judge Thynge therefore concluded that the “language, provisions and tenor of the [various agreements] clearly indicate at the time of their execution, the Nokia and Sony entities anticipated litigation for enforcement of the transferred patents. As evidenced by the various agreements, the purpose of the transfer of the patent prosecution files and the IDFs were part of the joint legal strategy involving the Nokia and Sony entities that began before MMI’s formation and continued thereafter. MMI and the Nokia and Sony entities have operated with the expectation that any shared privilege communications would be confidential and protected from disclosure. The Nokia and Sony entities, as licensees, clearly share a common legal interest in MMI prevailing in this action. That as a result of the Formation Agreement, MMI is now the owner of the patents does not eviscerate or prevent the sharing of a common legal interest with Nokia and Sony.” Id. at 14.

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September 12, 2012

Judge Robinson Dismisses Infringement Claims Based on Patents Invalidated in Prior ANDA Litigation Under Doctrine of Collateral Estoppel, Denies Request to Stay Pending Appeal to Fed. Cir.

In Cephalon, Inc., et al. v. Impax Labs., Inc., C.A. No. 11-1152-SLR (D. Del.), Judge Robinson recently granted defendant-generic drug manufacturer’s motion to dismiss infringement claims based on patents asserted by plaintiffs that had previously been invalidated in prior ANDA litigation. Id. at 1. In this case, plaintiffs filed suit against defendant alleging infringement of four patents-in-suit arising out of defendant’s ANDA for a generic version of a drug used to treat pain in cancer patients. Id. at 1. In response to the complaint, defendant moved to dismiss claims for infringement based on two of the patents-in-suit on the grounds that the two patents had been addressed by the Court in previous ANDA litigation, and the Court found both patents invalid for lack of enablement. Id. at 1-2. Specifically, in the motion to dismiss, defendant argued that under the doctrine of collateral estoppel there was no reason to litigate any issues involving the two invalidated patents because “validity was actually litigated in the [prior ANDA] litigation, culminating with a final judgment of invalidity against plaintiffs.” Id. at 2. The Court agreed. Id. at 4. Citing the U.S. Supreme Court’s decision in Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundations, 402 U.S. 313 (1971), the Federal Circuit’s decision in Abbott Labs. v. Andrx Pharma, Inc., 473 F.3d 1196, 1203 (Fed. Cir. 2007), and the Third Circuit’s decision in Jean Alexander Cosmetics, Inc. v. L’Oreal USA, Inc., 458 F.3d 244, 249 (3d Cir. 2006), the Court held that “collateral estoppel applies to bar the re-litigation of the invalid . . . patents.” Id. at 4. In addition to granting defendant’s motion to dismiss, the Court denied plaintiffs’ request to stay the instant litigation pending the Federal Circuit’s review of the Court’s decision in the prior ANDA litigation on appeal. Id. at 5. In denying that request, the Court noted that briefing in the appeal had only recently been completed, and that if the request were granted, the Court could not resolve the present dispute within the 30-month ANDA stay deadline. Id. at 5.

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