Articles Posted in Leonard P. Stark, Chief Judge

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TC Heartland LLC v. Kraft Food Group Brands LLC has created more questions about venue than it answered (although it obviously answered a very important one), and one significant new question is, what constitutes a “regular and established place of business” under 28 U.S.C. § 1400(b). Chief Judge Stark recently attempted to answer that question in his September 11, 2007 decisions in Boston Scientific Corp. v. Cook Group Inc. and Bristol-Myers Squibb Co. v. Mylan Pharmaceuticals Inc. Only days later, the Federal Circuit issued its decision in In re Cray, restricting the meaning of “regular and established place of business.” This post briefly analyzes the state of Judge Stark’s concept of “regular and established place of business” in the wake of In re Cray.

In Boston Scientific Corp., Judge Stark, among other things, described the application of “regular and established place of business” as a “fact-intensive inquiry focused on whether the defendant does its business in this District through a permanent and continuous presence here.” He explained that a formal office or store is not required to meet this test, but a physical presence is needed. He then identified factors that would not, at least alone, rise to the level of a permanent and continuous presence. They are: (1) doing business in Delaware or being registered to do business in Delaware; (2) maintaining a website accessible in Delaware for online sales; (3) shipping goods to unaffiliated individuals or third-party entities in Delaware; (4) making sales in Delaware; (5) employing a sales representative who occasionally works in Delaware; and (6) previously employing a sales representative who lived in Delaware, but had no responsibility of sales in Delaware.  See Boston Scientific Corp. v. Cook Group Inc.

In his other venue decision of the same date, Bristol-Myers Squibb Co., Judge Stark considered connections between the defendant and Delaware in deciding that he could not conclude without further information that the defendant did not have a regular and established place of business in Delaware. Those factors include: (1) the defendant is part of a family of more than 50 companies, of which more than 40 reside in Delaware; (2) the defendant does business and makes sales in Delaware; (3) the defendant is in the business of provoking patent infringement lawsuits as part of the process of bringing its products to market; (4) the defendant has appeared in more the 100 patent infringement cases in Delaware in the last ten years; (5) the cases are not “run-of-the-mill” litigation and may or may not be of material significance to defendant’s overall business; (6) the defendant has obtained the right to do business in Delaware including for pharmaceutical manufacturing, distribution and sales; (7) the defendant is licensed as a “Pharmacy-Wholesale” and “Distributor/Manufacturer CSR,” allowing it to distribute and manufacture controlled substances within Delaware; and (8) the defendant targets some Delaware physicians.

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Chief Judge Leonard P. Stark recently ruled on summary judgment motions in a series of cases filed by Intellectual Ventures.  Intellectual Ventures I LLC v. T-Mobile USA, Inc., C.A. No. 13-1632-LPS (D. Del. Aug. 23, 2017) (and related cases).  Judge Stark granted a motion by T-Mobile seeking summary judgment that Intellectual Ventures’ patent rights were retroactively exhausted by a license agreement between Ericsson Sweden and Ericsson USA, the entity which sold the accused products to T-Mobile.  Intellectual Ventures argued that its patent claims arose before any such license, but the Court explained that under the license agreement at issue, Ericsson Sweden granted a nunc pro tunc license, retroactive to earlier than the date when the patent claims arose.  As a result, the Court found that the license was “sufficient to exhaust IV’s infringement claims on a retroactive basis.”

The Court also granted T-Mobile’s motion for summary judgment of no infringement of another asserted patent under the doctrine of equivalents because “[e]ach allegedly equivalent limitation . . . was amended during prosecution to overcome . . . prior art.”  Judge Stark explained that the amendments at issue were made “to distinguish the invention over [prior art] that contains the equivalent in question . . . .”  Accordingly, the Court granted summary judgment of no infringement based on prosecution history estoppel.

Finally, the Court denied the defendants’ motion for summary judgment of non-infringement of a third asserted patent, finding general disputes of material fact regarding whether the actions of defendants’ customers were attributable to defendants for purposes of the infringement analysis.

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Chief Judge Leonard P. Stark recently considered the parties’ motions in limine  in advance of the trial between Princeton Digital  Image Corporation and intervenor Adobe Systems Inc.  Princeton Digital Image Corproation v. Office Depot Inc., et al., No. 13-239-LPS (August 9, 2017).  For example, Judge Stark denied Adobe’s MIL to preclude a Princeton witness from testifying “about his belief that images appearing on the websites of Adobe’s customers were dynamically generated ‘on the fly.'”  Id. at 1.  Judge Stark found that the testimony was admissible because Princeton did not seek to admit the testimony to prove that defendants’ websites “actually work in a particular way[,]” but offered the testimony to establish why Princeton “believed it had a viable infringement claim” and therefore did not breach a “covenant-not-to-sue in good faith[.]”  Id.  Judge Stark also denied Princeton’s MIL to exclude exhibits relating to settlement because Adobe offered the exhibits “to support its claim that [Princeton] breached the covenant-not-to sue by bring and maintaining suits against Defendants and did so in bad faith[.]”  Id. 3.

Princeton Digital Image Corporation v. Office Depot Inc., No. 13-239-LPS (August 10, 2017)

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Chief Judge Leonard P. Stark recently considered the parties’ summary judgment and Daubert motions in Intel Corporation v. Future Link Systems, LLC, No. 14-377-LPS (July 31, 2017).  Regarding Future Link’s motions, Judge Stark granted summary judgment that RAND licensing requirements did not attach to the asserted claims of the relevant patents, and as to Intel’s equitable estoppel and uneforceability defenses.  Id. at  3-8, 11-12.  Judge Stark also granted Future Link’s Daubert motion, to the extent the experts’ opinions improperly expanded the scope of the claims.  Id. at 23-24

Regarding Intel’s Motions, Judge Stark denied summary judgment as to indefiniteness and non-infringement, finding disputed issues of material fact, but granted-in-part Intel’s motion for summary judgment of no willfulness and no unclean hands.  Regarding willfulness, Judge Stark held that, while “[i]t may be difficult to see how a reasonable factfinder would view the panoply of conduct

alleged by Future Link (if proven) to be ‘egregious … wanton, bad-faith, deliberate, consciously wrongful, flagrant, or – indeed- characteristic of a pirate'”; at this stage the Court could not grant summary judgment of no willful infringement.  Id. at 28-29 (quoting Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1932 (2016)).  Judge Stark found, however, that summary judgment of no unclean hands was appropriate because Future Link had failed to come forward with sufficient evidence to support a finding that Intel acted with unclean hands.  Id. at 29.

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Chief Judge Leonard P. Stark recently issued a memorandum order analyzing waiver of attorney client privilege and work product protection. At issue was the plaintiff patentee’s corporate representative, who had not answered certain questions during a deposition, and certain documents withheld from discovery and interrogatory responses. The defendant argued that the all of this discovery should be made available both because the plaintiff put its “state of mind at the time it filed the underlying infringement suits” at issue and because the plaintiff had “selectively disclosed some attorney-client communications and documents prepared in anticipation of litigation, thereby waiving privilege with respect to communications and documents related to the same subject matter.” Judge Stark found that “this combination – [the plaintiff’s] contention that it brought and litigated the infringement actions in good faith, along with [its] selective use of privileged materials to support that assertion – waives privilege.” Princeton Digital Image Corp. v. Office Depot Inc., C.A. No. 13-239-LPS, Memo. Or. at 1-2 (D. Del. Aug. 1, 2017).

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Chief Judge Leonard P. Stark recently ruled on Daubert motions in Greatbatch Ltd. v. AVX Corp., C.A. No. 13-723-LPS (D. Del. July 20, 2017).  Of note, the Court granted a Daubert motion to preclude an expert from testifying “that ‘no reasonable metallurgist’ would relay on certain data,” explaining that such testimony would “improperly usurp[] the Court’s gatekeeping function of determining reasonable reliance.”

The Court also granted-in-part a motion to preclude a plaintiff expert from testifying as to the defendant-employees’ state of mind and intent, explaining that “[s]uch statements are improper legal conclusions based on unscientific interpretation.”  The same expert also was precluded from offering an opinion that the defendant’s earlier products (as well as its current products) infringe, because the expert “offers no analysis to support this opinion and, to the contrary, acknowledged the difference the [earlier] primer could have.”

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In advance of the pre-trial conference in Greatbatch Ltd. v. AVX Corporation, et al., C.A. No. 13-723-LPS, and in addition to resolving a number of rulings regarding disputes over the pre-trial order and trial logistics, Chief Judge Leonard P. Stark ruled on the parties’ motions in limine.  Greatbatch Ltd. v. AVX Corporation, et al., C.A. No. 13-723-LPS (D. Del. July 20, 2017).  The Court first granted Plaintiff’s motion to preclude Defendants from presenting the testimony of a certain witness by deposition.  This witness had been deposed by Plaintiff, but prior to trial Defendants had terminated the relationship with the witness, he was unavailable, and Defendants never had an opportunity to question the witness as to the circumstances of his termination, “which appears to have been related to conduct that may be probative of issues that are the subject of the forthcoming trial.” Id. at 3-4.  To allow the deposition testimony “would leave [Plaintiff] with no fair opportunity to allow the jury to evaluate [his] credibility.” Id. at 4.

The Court granted Defendants’ motion to preclude “evidence or argument concerning indemnification or damages” because damages and indirect infringement were not at issue in the upcoming trial, and the evidence’s minimal probative value was thus outweighed by the risk of juror confusion and unfair prejudice. Id. at 6.  The Court also granted Defendants’ motion to preclude evidence or argument of “infringement or copying of patents or by product not at issue at the forthcoming trial, concluding that “[s]uch evidence is not relevant [infringement]. There is no need for the jury to learn of the fact that the 2016 trial occurred nor its outcome. Even were there some relevance to the evidence at issue in this motion, it would be substantially outweighed by the risk of unfair prejudice to [Defendants], particularly as it would create the possibility of the August 2017 jury deferring to the conclusion of the January 2016 jury that AVX is an infringer, and of confusing the jury.” Id. at 6-7.  On the other hand, the Court would later consider Plaintiff’s arguments for why the same evidence should be admitted during the willfulness portion of the trial, should that phase be necessary. Id. at 7 n.5.

The Court also denied several of the parties’ motions to preclude evidence that it concluded was relevant to infringement, finding that the evidence’s probative value was not outweighed by the potential for prejudice or juror confusion. See id. at 5-7.

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In a series of related actions brought by Enzo Life Sciences, Chief Judge Leonard P. Stark denied all Defendants’ motion for summary judgment of invalidity of the patent-in-suit for lack of written description, but granted certain Defendants’ motion for summary judgment of invalidity of that patent for nonenablement. The patent-in-suit related to nucleic acid hybridization technology involving non-porous solid supports. E.g., Enzo Life Sciences, Inc. v. Gen-Probe Incorporated, C.A. No. 12-104-LPS (D. Del. June 28, 2018).

As to the written description motion, the Court found that genuine disputes of material fact existed that precluded summary judgment. See id. at 8, 10. But as to nonenablement, the Court concluded that the patent was invalid. Defendants argued that the specification lacked “any meaningful disclosure . . . on how to make and use the vast number of phosphate-labeled polynucleotides covered by the asserted claims.” Id. at 11 (alteration in original) (citations and quotation marks omitted). Observing that the claims were “extremely broad,” the Court agreed that the patent was nonenabling, agreeing with Defendants’ comparison to Federal Circuit authority. See id. at 14-17.

E.g., Enzo Life Sciences, Inc. v. Gen-Probe Incorporated, C.A. No. 12-104-LPS (D. Del. June 28, 2017)

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In W.L. Gore & Associates, Inc. v. C.R. Bard, Inc., et al., C.A. No. 11-515-LPS (D. Del. Feb. 8, 2017), Chief Judge Leonard P. Stark issued decisions on various motions in limine prior to the parties’ upcoming pretrial conference.

Regarding Plaintiff’s motion to exclude “evidence and argument relating to discovery disputes,” the Court granted the motion in part, explaining that “[i]t would be improper, irrelevant, unfairly prejudicial, and confusing to the jury for the parties to refer to or re-fight discovery disputes at trial. Any minimal probative value there may be would be substantially outweighed by the countervailing concerns of Federal Rule of Evidence 403.” Id. at 1. However, “where relevant,” the Court would permit the parties to “make reference to the timing with which an expert was provided with particular evidence – and how that evidence did (or did not) impact the expert’s analysis and opinion- but without stating or suggesting to the jury that such production was late, untimely, or in any manner improper.” Id. The Court denied Plaintiff’s motion to preclude arguments purportedly contrary to the Court’s claim construction because it was not persuaded that certain slides to be used in Defendants’ opening statement were contrary to the Court’s claim construction. Id. at 2.

As for Defendants’ motions in limine, the Court first granted their motion to exclude evidence or argument relating to a certain product of Defendants not marketed in the U.S during the term of the patent-in-suit, explaining that “Plaintiff’s allegations as to the ‘apparent infringement’ of the patent-in-suit by these stent grafts are untimely and unsupported by evidence in the record. Permitting Plaintiff to do as it proposes would be unfairly prejudicial to Defendants – who have had no incentive or opportunity in this action to develop non-infringement evidence relating to these products – and confusing to the jury, concerns that substantially outweigh whatever minimal probative value this evidence might have.” Id. But the Court denied Defendants’ motion to exclude Defendants’ license agreements resulting from settlement, as their concerns could be adequately addressed through cross-examination. Id. at 3.

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Chief Judge Stark recently issued an order addressing several motions to strike or supplement contentions and to strike expert reports. Judge Stark first found that the plaintiff’s “final infringement contentions fail to provide Defendants adequate notice of ‘how the accused products allegedly meet [a certain] limitation’” because the contentions addressed only half of the Court’s claim construction of that limitation and appeared to rely, instead, on the plaintiff’s proposed construction, which had been rejected. Intellectual Ventures I LLC v. AT&T Mobility LLC, et al., C.A. No. 13-1668-LPS, Memo. Or. at 3-4 (D. Del. Feb. 14, 2017). Judge Stark found that this “failure to serve infringement contentions that apply the Court’s claim construction was neither substantially justified nor harmless,” which supported striking the contentions. Id. For the same reasons, Judge Stark also struck the plaintiff’s doctrine of equivalents contention for the same patent, which the plaintiff contended was “based on the same evidence” as its deficient literal infringement contention. Id. at 6. Judge Stark denied, however, a motion to strike the plaintiff’s infringement theory for a separate patent, which the defendant claimed was untimely because it was served two weeks before the close of fact discovery. The Court agreed that the “infringement theory, which is contained in its timely served infringement contentions, should not be stricken. While it appears [the plaintiff] had formulated its [theory] prior to August 2016, it was appropriately pursuing discovery with respect to that theory·in the preceding months, and it permissibly relied on the opportunity provided in the scheduling order to finalize infringement contentions after the Court’s claim construction order.” Id. at 9-10.

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