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This Report and Recommendation by Magistrate Judge Burke addresses a factual scenario that may apply in several cases in the wake of the Supreme Court’s decision in SAS Inst. Inc. v. Iancu, 138 S.Ct. 1348 (2018).

In November 2012, Plaintiff PDI filed infringement actions in the District of Delaware alleging infringement of one patent-in-suit. Defendants in the infringement actions filed three petitions for inter partes review of certain claims of the patent-in-suit. The PTAB instituted review on certain claims of certain IPR petitions with the net result that claims 14, 19, and 20 of the patent-in-suit were never instituted by the PTAB. As to all other claims of the patent-in-suit, however, the PTAB eventually made a finding of invalidity.

After conclusion of the IPR, the district court actions resumed and PDI asserted only claim 14, 19, and 20. The Defendants asserted counterclaims for declaratory judgment of invalidity, and PDI moved to dismiss based on estoppel pursuant to 35 U.S.C. § 315(e)(2). In 2017, PDI moved to dismiss the counterclaim and Judge Burke denied the motion because there was no Final Written Decision as to claims 14, 19, or 20.

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Today the District of Delaware issued a Public Notice and Order regarding its anticipated continued operations during the federal government shutdown.

Per the Public Notice, funds are only available to maintain normal operations of the District Court through next Friday, January 25. As the Court has determined that all its judicial officers and staff are essential personnel, after that day all District of Delaware employees will continue to report to work. The operations of the Clerk’s Office, including the acceptance and processing of new civil and criminal cases, will also remain in effect.

In terms of active cases, “[t]o the extent possible, the Court will be open and operational without disruption, including by conducting jury trials and other criminal and civil proceedings.” Any proceeding regarding the potential deprivation of an individual’s liberty will be deemed the most essential of all judicial functions. The Court will then determine, on a case-by-case basis, action required on its remaining pending civil and criminal matters. It “remains within the discretion of each judge to manage his or her own docket, which may or may not include granting requests for stays or other relief.”

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In September 2017, Chief Judge Stark denied a motion filed by Mylan Pharmaceuticals Inc. (MPI) to dismiss for lack of proper venue in light of TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514, 1519 (2017). That dismissal was without prejudice because Judge Stark found that he could not determine whether venue was proper on the record before him. Accordingly, the Court ordered expedited, venue-related discovery into whether MPI had a “regular and established place of business,” as required by 28 U.S.C. § 1400(b). After expedited discovery, including three hearings of various discovery disputes, MPI renewed its motion to dismiss. On October 18, Judge Stark issued his decision on the renewed motion.

Although discovery was directed to the “regular and established place of business” inquiry under the second prong of § 1400(b), Judge Stark’s decision addressed both prongs of § 1400(b). Under the first prong—“where the defendant resides”—Plaintiff BMS argued that Delaware was the proper venue, despite the parties agreeing that MPI is incorporated in West Virginia. Specifically, BMS argued that the Delaware incorporation of a separate Mylan entity could be imputed to MPI as a corporate affiliate that had disregarded corporate formalities of separateness. Memo. Op. at 3-5.

Judge Stark “agree[d] with BMS that residency may be imputed under the first prong of the venue statute,” id. at 5, but emphasized that the “Court is not holding that one entity necessarily is a resident of two places . . . [i]nstead, the Court is allowing for the possibility that, for the purposes of venue in patent cases, there are circumstances under which it is appropriate to impute the residence of one entity to another entity – where there is an alter ego relationship or piercing of the corporate veil – and in those circumstances the law allows the Court to treat one entity as if it were a resident in a second district.” Id. at 6.

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The United States District Court for the District of Delaware today released the following announcement:

District of Delaware Welcomes Judges Connolly and Noreika

The United States District Court for the District of Delaware is pleased to welcome the Honorable Colm F. Connolly and the Honorable Maryellen Noreika as United States District Court Judges.

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On August 1, 2018, the Senate confirmed Colm F. Connolly and Maryellen Noreika as the District of Delaware’s newest District Judges. Connolly will fill the seat vacated by the retirement of Judge Sue L. Robinson, and Noreika will fill the seat vacated by Senior Judge Gregory M. Sleet. These confirmations return the District of Delaware to a full complement of District Judges.

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Young Conaway Stargatt & Taylor, LLP recently unveiled the formation of its Trade Secret and Employee Mobility practice.   Our practice is comprised of a team of intellectual property, employment, corporate, and business litigation specialists who have a wide range of experience with internal investigations, employee mobility counseling, and prosecuting and defending expedited cases in various courts in and around the Mid-Atlantic region, including the Delaware Court of Chancery, Delaware Superior Court and District Court for the District of Delaware.

The primary areas of the practice will include:

Prevention of Loss of Trade Secrets and Goodwill

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Chief Judge Stark recently was faced with a motion for final judgment under Fed. R. Civ. P. 58 following a jury verdict of induced infringement. The parties in the case agreed that the instruction given to the jury on inducement was erroneous in light of a related litigation between the same parties in which the Federal Circuit had ruled that the same instruction was erroneous. The patentee, Power Integrations, however, had not objected to the identical instruction in this case. Judge Stark, nonetheless, concluded that “in the unusual circumstances presented here its induced infringement instruction was plain error” and “it would be a manifest injustice . . . to uphold[ the] jury verdict.” Fairchild Semiconductor Corp., et al. v. Power Integrations, Inc., C.A. No. 12-540-LPS, Memo. Op. at 1-11 (D. Del. Mar. 16, 2018). Moreover, because “the Court [had] already determined that the jury instruction on active inducement was plain error that was prejudicial to Fairchild, resulting in a miscarriage of justice . . . [and] the Court [did] not believe it is highly probable that the error did not contribute to the judgment . . . [the Court therefore] order[ed] a new jury trial on the issues of induced infringement of the ’359 patent and damages.” Id. at 11-13.

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Judge Richard G. Andrews recently granted a motion for summary judgment that the asserted claims of a patented “apparatus, method and database for control of audio/video equipment” is invalid under 35 U.S.C. § 101.   D&M Holdings Inc. v. Sonos, Inc., C.A. No. 16-141-RGA (D. Del. Feb. 20, 2018).  The Court agreed with the defendant that the claim at issue was “at most, directed to the automation process that can be (and has been) performed by humans,” such as when (1) a person chooses a particular DVD to watch by identifying its title, (2) the person determines, based on memory, whether he or she watched the DVD previously and, if so, whether he or she selected playback preferences, and (3) if the person recalls such playback preferences, selecting the same preferences before beginning to watch the DVD or, if no such preferences are recalled, the DVD plays with default preferences.   Id. at 8.  The Court thus viewed the asserted claim as “directed to the abstract idea of choosing to play back media with or without playback preferences.”  Further, it “provides no inventive concept, and at most merely automate[s] the abstract idea through the use of a generic, conventional technology.”  Id. at 12.

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