The agenda for the 2018 District of Delaware Bench and Bar Conference has been released and is available below. Registration for the conference will open in a few weeks. We hope to see you on May 3 and 4!
Today the United States Senate Committee on the Judiciary held a hearing on the nominations of Colm F. Connolly and Maryellen Noreika to be United States District Judges for the District of Delaware, bringing the District of Delaware one step closer to returning to full strength. The nominations will next be voted on by the full Senate.
Colm Connolly is a partner with the law firm of Morgan, Lewis & Bockius LLP, where he manages the Wilmington office as a member of the firm’s litigation and intellectual property practice groups. He joined Morgan Lewis in 2009, after serving eight years as the United States Attorney for the District of Delaware. Before his confirmation as United States Attorney, Mr. Connolly spent more than two years as a partner in the Wilmington law firm Morris, Nichols, Arsht & Tunnell LLP. Prior to joining Morris Nichols, Mr. Connolly served for seven years as an Assistant United States Attorney for the District of Delaware and as a law clerk to Judge Walter K. Stapleton of the U.S. Court of Appeals for the Third Circuit. Mr. Connolly earned his B.A., with honors, from the University of Notre Dame, his M.Sc. from the London School of Economics, and his J.D., with honors, from the Duke University School of Law.
Maryellen Noreika is a partner in the Wilmington law firm of Morris, Nichols, Arsht & Tunnell LLP where she began her career as an associate upon graduation from law school in 1993. During her 24 years at Morris Nichols, Ms. Noreika has served as counsel in more than 500 cases, while specializing in patent law, and representing parties in cases involving biotechnology, chemistry, consumer products, computer science, medical devices, and pharmaceuticals. Ms. Noreika earned her B.S. from Lehigh University, her M.A. in biology from Columbia University, and her J.D., magna cum laude, from the University of Pittsburgh, where she was inducted into the Order of the Coif, and served as a member of the University of Pittsburgh Law Review.
In two opinions issued the same day, Chief Judge Leonard P. Stark considered motions to transfer venue in light of TC Heartland and the Federal Circuit’s recent pronouncement on the venue defense in In re Micron Tech, Inc., 875 F.3d 1091 (Fed. Cir. 2017). Koninklijke KPN N.V. v. Kyocera Corporation, et al., C.A. No. 17-87-LPS-CJB (D. Del. Dec. 18, 2017) & 3G Licensing, SA, Koninklijke KPN N.V. and Orange S.A. v. HTC Corporation, et al., C.A. No. 17-83-LPS-CJB (D. Del. Dec. 18, 2017)
In Koninklijke v. Kyocera, the Court concluded that Defendant’s improper venue defense was not untimely as it was not available to it pre-TC Heartland. Id. at 2. Furthermore, Defendants’ filing of a 12(c) motion did not forfeit its improper venue challenge, where Defendants had responded to the complaint with a motion to dismiss for improper venue and “ha[d] repeatedly reaffirmed that it contents venue . . . and even moved to stay the case pending resolution of the instant motion.” Id. at 2-3. The Court then concluded that venue was improper for the domestic defendant headquartered in California, but not for the foreign, Japanese defendant, and further that the Court could exercise personal jurisdiction over the Japanese defendant under a theory of “dual jurisdiction”/”stream of commerce” Id. at 4-7. Accordingly, the Court concluded that
[A]n immediate transfer of the case as to both Defendants is not the most reasonable and appropriate outcome — particularly given [Plaintiff’s] objection, [its] contingent request that its case against [the domestic defendant] be dismissed, and the fact that ten other, related actions (involving the [patent-in-suit]) are pending before the undersigned Judge. . . . [T]he Court will provide Plaintiff an opportunity to dismiss its claims against [the domestic defendant] . . . and will then permit [the foreign defendant] to renew its motion to transfer venue (and address the totality of circumstances), or seek any other appropriate relief.”
Judge Andrews recently issued a memorandum order ruling on the Defendants’ motion to exclude testimony of Plaintiffs’ damages expert in MiiCs & Partners, Inc., et al. v. Funai Electric Co., Ltd., et al., C.A. No. 14-804-RGA, Memo. Or. (D. Del. Dec. 7, 2017). The Defendants lodged several challenges to the Plaintiffs’ expert’s opinion. First, Judge Andrews found that, for one patent-in-suit, the expert’s use of a “5% to 10% cost-savings benefit” provided by the Plaintiffs’ technical expert “demonstrates that he properly apportioned damages and profits between the patented and unpatented features.” Id. at 4-5. For a second patent-in-suit, however, Judge Andrews found “no basis for concluding that he apportioned between the patented and unpatented features” because the “only place where [the expert] appears to consider the profit attributable to the inventions, as distinguished from unpatented features, is in his discussion of Georgia-Pacific Factor 13 . . . [which] lacks any meaningful analysis or attempt to quantify the portion of realizable profit that should be attributed to the patented feature of the smallest salable unit.” Id. at 6.
Moreover, the Defendants argued, and Judge Andrews agreed, that an unaccepted offer to license a portfolio of over 360 patents was not a reliable starting point for the hypothetical negotiation as to one patent-in-suit because it was only an offer, it was not a comparable number of patents, its timing suggested that it was litigation-influenced, and it involved different parties. Id. at 7-8.
Finally, Judge Andrews rejected the use of a “composite royalty rate,” which the Defendants characterized as “appl[ying] a royalty base that includes units accused under any asserted patent to a royalty rate with contributions from every asserted patent.” Id. at 10. This approach, Judge Andrews found, “assigns to each accused product the same per-unit royalty regardless of how many patents that product is accused of infringing.” Id. at 11. Judge Andrews also rejected several other arguments for excluding other portions of the proffered expert testimony.
On August 24, 2017, in Ferring Pharmaceuticals, Inc. v. Teva Pharmaceuticals USA, Inc., Civ. No. 17-435-RGA, Judge Richard G. Andrews ruled that it would be inappropriate to add plaintiff’s Global Head of IP as an in-house designee under the protective order, finding that such person was a competitive decision maker. See previous Order here. On December 11, 2017, however, Judge Andrews changed course, granting plaintiff’s motion for reconsideration and allowing plaintiff’s designee access to Defendant’s ANDA and ANDA-related material. Judge Andrews found that this was a close question, but credited the designee’s declaration and the fact that a “two-year post-litigation bar from relevant prosecution activities (including supervisory responsibility for those activities) ma[de] the risk of inadvertent disclosure acceptably low, while at the same time allowing [the designee] to do his job of ‘overseeing and managing this litigation.'”
In Sonos, Inc. v. D&M Holdings Inc. d/b/a The D+M Group, et al., C.A. No. 14-1330-WCB (D. Del. Dec. 7, 2017) (Apportionment Order), Judge William C. Bryson denied Plaintiff’s motion for leave to submit a second supplemental report from its damages expert because the supplemental report failed to conduct a proper apportionment analysis. The Court had previously excluded the expert’s first report due to a failure to apportion and because it therefore violated the entire market value rule. Apportionment Order at 1. The supplemental report looked to the least expensive accused product for a revised and reduced royalty base, in order to “to “account for additional, non-patented features and componentry associated with higher priced products.” Id. at 2 (quoting report). The Court concluded that the method still calculated the royalty based on the entire market value of the product where the least expensive accused product still contained features not covered by the patents. Id. at 3. The Court observed that “it appears that the [expert] regarded the effective reduction in the accused revenue resulting from that calculation as constituting apportionment because it reflects a reduction in the amount that he previously cited. While an apportionment would certainly produce a reduction, that does not mean that a reduction necessarily constitutes apportionment. Nothing in [the] report reflects an apportionment directed to the role of the patented features in driving demand for the product.” Id. at 3-4.
While the Court would therefore not permit Plaintiff to offer a royalty rate premised on the entire market value rule, the Court did permit Plaintiff to accept Defendants’ proposal for a reasonable royalty at trial. Id. at 4.
In a separate opinion issued December 8, 2017, Judge Bryson also excluded certain of Plaintiff’s proposed secondary considerations evidence of praise as hearsay (“Exhibits Order”). See Exhibits Order at 4-10. While the Court would permit evidence of industry praise, the Court excluded praise that included factual statements about the products that went beyond assertions of opinion. For example, statements that a product was “mind blowing” were admissible, but following statements that the product was the first of its kind to perform a function was a factual assertion offered for the truth of the matter asserted, and thus excludable hearsay. Id. at 6-7. Furthermore, some exhibits addressed praise of features of the product that were outside the scope of the asserted claims. Id. at 7-8. The Court also took Rule 403 into consideration and concluded that the prejudicial effect of such evidence outweighed its probative value. Id. at 8-9.The Court also ordered such statements redacted from exhibits that contained admissible evidence of praise. Finally, the Court ruled that “out-of-court statements by third-party declarants that [Defendants] or others copied [Plaintiff] are inadmissible hearsay.” Id. at 10.
Judge Andrews recently issued an order denying defendant’s motion to strike 60 pages of briefing on three Daubert motions. B. Braun Melsungen AG v. Becton, Dickinson and Company, No. 16-411-RGA (D. Del. Dec. 5, 2017). Judge Andrews denied the motion because, even though he wished “Plaintiffs had exercised some judgment about which Daubert issues were worth pursuing,” there is no rule preventing Plaintiffs from filing 60 pages of briefing. Judge Andrews added, however, that Defendants can take heart in the fact that “excessive briefing of Daubert issues is usually a sign of weakness, not of strength.” Id. at 1.
In a recent memorandum order, Judge Richard G. Andrews granted a motion for summary judgment after requesting at oral argument supplemental briefing on the proper construction of one claim limitation. MiiCs & Partners, Inc. v. Funai Electric Co., Ltd., C.A. No. 14-804-RGA (D. Del. Dec. 1, 2017). Judge Andrews explained that the parties’ briefing made clear that “the issue here boils down to one of claim construction,” and the Court therefore requested supplemental briefing on whether the limitation “said liquid crystal layer being divided into a plurality of regions having different orientation of liquid crystal for one of said pixel electrodes” was drawn to capability/function (which would be required for a finding of infringement), or if instead it was structural. The Court found that “the disputed limitation is not properly understood as drawn to capability[,]” and summary judgment of non-infringement was therefore warranted.
Chief Magistrate Judge Thynge recently issued a report and recommendation finding that a defendant’s Rule 12(b)(6) motion to dismiss should be granted. Judge Thynge first found that she need not take judicial notice of certain exhibits supplied by the defendant. The exhibits, copies of 3G cellular specifications, were relied on by the Plaintiff’s complaint, which alleges infringement based on the defendant’s practice of the 3G standard. Thus, the specifications were integral to the complaint and the plaintiff had actual notice of them. Therefore, judicial notice was not required. Network Managing Solutions, LLC v. AT&T Mobility, LLC, C.A. No. 16-295-RGA-MPT, Report and Recommendation at 10-11 (D. Del. Nov. 9, 2017).
Turning to the sufficiency of the pleading, Judge Thynge found that the plaintiff “alleges sufficient facts to state a plausible claim because, by showing what the standards require, the standards may be compared with the patents to determine whether defendant, in following these standards, infringes.” Id. at 12. The 3G standards on which the plaintiff’s complaint relied, however, were out of date, ranging from 2009 to 2010 and post-dated by many newer releases of each standard. Accordingly, Judge Thynge found that because “there have been substantive changes to the specifications,” the plaintiff “should be granted leave to amend the complaint to indicate the specific standards defendant allegedly practices that result in infringement.” Id. at 12-13.
Judge Richard G. Andrews recently denied without prejudice a motion to dismiss for lack of patentable subject matter under 35 U.S.C. § 101. Pacific Biosciences of California, Inc. v. Oxford Nanopore Technologies, Inc., No. 17-275-RGA (D. Del. Nov. 9, 2017). Judge Andrews decided that, while it may be appropriate in some circumstances to decide such a motion at the pleading stage, “Plaintiff briefed the motion as though it were a summary judgment motion . . . and at argument both sides referred to an understanding of the technology and the state of the art at the time of the invention.” Id. at 2. Therefore, “[u]nder the circumstances of this case, and considering the technology of the patent being asserted, [the Court did] not think patent-ineligibility [wa]s something that [the Court could] fairly decide on a motion to dismiss.” Id.