Chief Magistrate Judge Mary Pat Thynge recently issued a Report and Recommendation regarding plaintiff’s motion to dismiss defendant’s counterclaims for sham litigation, violation of the Sherman Act, Robinson-Patman Act, and unfair practices under state law. Varentec, Inc. v. Gridco, Inc., No. 16-217-RGA-MPT (D. Del. June 6, 2017). Judge Thynge found that defendant failed to adequately plead these claims, but recommended that plaintiff’s motion be granted without prejudice as Judge Thynge could not determine on the current record whether amendment would be futile. Id. at 7-25.
In a recent Report and Recommendation, Chief Magistrate Judge Mary P. Thynge granted defendants’ renewed motion for attorneys’ fees. Magnetar Technologies, Corp. v. Six Flags Theme Parks, Inc., C.A. No. 07-127-LPS-MPT (D. Del. Mar. 13, 2017). Previously, on July 21, 2015, Judge Thynge issued a Report and Recommendation finding that, in view of the totality of the circumstances, the case was exceptional based on plaintiffs’ objectively unreasonable position on inventorship of U.S. Patent No. 5,277,125 (“the ‘125 patent”) and plaintiffs’ reliance on Mark T. Hanlon’s expert report with respect to infringement of the ‘125 patent. On September 30, 2015, having considered plaintiffs’ objections to that Report and Recommendation and defendants’ subsequent response, Chief Judge Leonard P. Stark returned the issue of attorneys’ fees to Judge Thynge for additional findings. On November 31, 2015, defendants filed the instant renewed motion for attorneys’ fees. See id. at 6.
In granting the renewed motion, Judge Thynge first reaffirmed the court’s conclusion “that plaintiffs’ position on the issue of inventorship was objectively unreasonable and defendants are entitled to fees incurred following the depositions in late July 2011” that demonstrated incorrect inventorship. Id. at 17-18. Judge Thynge also reaffirmed the court’s conclusion that plaintiffs’ reliance on Hanlon’s expert report was objectively unreasonable. Id. at 19.
Judge Thynge further found that attorneys’ fees in this action were “warranted to deter parties from continuing to maintain claims based on objectively unreasonable positions,” and “to compensate the defendants in this case for the expenses in defending claims that should not have been maintained.” Id. at 29. As Judge Thynge explained, “[p]laintiffs’ continued litigation of the ‘125 patent after the Chung and Staehs depositions revealed the inventorship issue with that patent improperly increased defendants’ litigation expenses by forcing them to continue to defend against the infringement claim and pursuing a ruling that the patent was invalid.” Id. at 29-30.
In this case, Plaintiff T-Jat systems alleged in its operative complaint that the three Defendants, Expedia, Inc. (Delaware), Expedia, Inc. (Washington), and Orbitz Worldwide Inc. “operate as a single entity” with a high degree of intermingling. T-Jat Systems 2006 Ltd. v. Expedia, Inc., et al., C.A. No. 16-581-RGA-MPT, Report and Recommendation at 1-3 (D. Del. Mar. 7, 2017). In response to this allegation, the Defendants moved to dismiss, arguing that “the first amended complaint fails to satisfy the pleading requirements of FED. R. CIV. P. 8(a) because it does not set forth facts sufficient for a facially plausible claim from which the court can infer the alleged misconduct . . . [particularly because] T-Jat’s allegations that Expedia-DE and Expedia-WA acted as one entity because of the companies’ parent-subsidiary relationship [is] far fetched, and the first amended complaint fails to show ‘facts that justify piercing the corporate veil.’” Id. at 5.
Magistrate Judge Thynge first rejected Plaintiff’s alter-ego theory, finding that “T-Jat has, at best, alleged sufficient facts to establish . . . a failure to observe corporate formalities and subsidiary companies acting as a façade for the parent companies” but not additional factors that would help prove a true alter-ego relationship. Plaintiff alleged sharing of certain officers and directors, sharing of a headquarters and offices, and a collective identify on marketing and promotional materials. “However, T-Jat does not allege the second element of fraud or injustice of use of the corporate form in either case. Recent case law from this court establishes that factual allegations of ‘nothing more than a close relationship and coordination among defendants,’ including operational control of the parent company over subsidiaries, is insufficient under Rule 12(b)(6). As such, the alter-ego theory against all three defendants is inadequate to meet the minimum pleading requirements.” Id. at 9-12.
Judge Thynge refused to dismiss, however, Plaintiff’s agency theory, explaining that “[o]ne can reasonably infer Expedia-DE’s control over Expedia-WA and Expedia’s control over Orbitz from the alleged facts. Further, the court can reasonably deduce Expedia-DE directed Expedia-WA’s actions, and likewise Expedia directed Orbitz’s activities relating to the underlying cause of action, the allegedly infringing mobile and website applications, based on the close connection between the respective companies. Although this corporate closeness may not be sufficient to succeed on agency theory at later stages in litigation, it is sufficient to survive a motion to dismiss, if the parties are properly and individually identified.” Id. at 12-13.
Finally, Judge Thynge agreed with Defendants that the complaint improperly conflated separate entities into a generic “Defendants” rather than pleading sufficient facts against each individual Defendant: “Although T-Jat’s assertions of Orbitz’s individual infringement may be facially plausible, the allegations as to Expedia-DE and Expedia-WA do not clarify that each defendant committed at least one infringing act. Therefore, the first amended complaint fails to provide Defendants with adequate notice of the direct infringement allegations against them and fails to meet the minimum pleadings standard.” Id. at 14-15.
In a recent report and recommendation, Magistrate Judge Mary Pat Thynge recommended that several affirmative defenses be stricken. Sonos, Inc. v. D&M Holdings Inc., C.A. No. 14-1330-RGA-MPT (D. Del. Aug. 10, 2016). Of note, Judge Thynge explained that the defendants’ § 288 defense should be stricken because there was no allegation that any asserted patent “has been found invalid before the commencement of the present action.” Judge Thynge also recommended that the defendant’s equitable estoppel and unclean hands affirmative defenses be stricken for failure to allege facts supporting those defenses with the particularity required by Rule 9(b). Next, the Court recommended the striking of the defendant’s patent misuse defense, which was supported by arguments in the defendant’s answering brief, but not in allegations in the affirmative defense, itself. Judge Thynge explained, “D&M is required to assert a basis showing an anticompetitive effect in its pleadings; delegating this in its answering brief is not sufficient.” Finally, Judge Thynge explained that the defendant’s prosecution laches defense “is limited to a one sentence conclusory statement, containing no information to support the elements of unreasonable and inexcusable delay,” warranting that it, too, be stricken. The Court noted, however, that it would allow D&M leave to amend the pleadings to address these deficiencies.
In a recent Memorandum Order, Chief Magistrate Judge Mary Pat Thynge considered Plaintiff SunPower Corporation’s (“SunPower”) motion, pursuant to Local Rule 7.1.5, seeking (i) clarification of the court’s April 1, 2016 Memorandum and Order with respect to infringement by defendant PanelClaw, Inc. under the doctrine or equivalents; and (2) reconsideration of the court’s construction of the term “disposed as a layer.” SunPower Corporation v. PanelClaw, Inc., C.A. No. 12-1633-MPT (D. Del. Jul. 26, 2016). Judge Thynge first clarified that the court’s “April 1, 2016 Memorandum and Order granting summary judgment of non-infringement was limited to literal infringement and did not grant summary judgment of non-infringement under the doctrine of equivalents.” Id. at 3. Judge Thynge then denied SunPower’s request for reconsideration, noting that its “argument fails to demonstrate an error of apprehension, or the need to correct manifest errors of law or fact, requiring the court to reconsider its construction of the ‘disposed as a layer’ term.” Id. at 5. Judge Thynge explained: “As the court noted in its April 1, 2016 Memorandum, the construction adopted by the PTAB, and subsequently this court, is the construction SunPower proposed during the IPR.” Id. According to Judge Thynge, “[t]he court considered SunPower’s arguments to the PTAB, the reasoning of the PTAB, construction of the term by another district court, and its own review of the figures and specification of the ‘788 patent to reach its construction.” Id.
Chief Magistrate Judge Mary Pat Thynge recently considered defendants motion to dismiss Nexeon Limited’s amended complaint alleging direct and indirect infringement of the patents-in-suit. Nexeon Limited v. EaglePicher Technologies, LLC, et al., No. 15-955-RGA-MPT (D. Del. Jul. 26, 2016). Defendants previously moved to dismiss Nexeon’s original complaint prompting Nexeon to file a first amended complaint. Id. at 1. Defendants again moved to dismiss arguing that the amended complaint still fails to adequately state of claim for direct and indirect infringement. Regarding direct infringement, Judge Thynge noted that the complaint was filed prior to the amendment to the Federal Rules and the court “has discretion whether to apply the post-December 1, 2015 direct infringement pleading standard to the amended complaint.” Id. at 9. Judge Thynge decided that, in this case, Form 18 should be used to analyze the sufficiency of Nexeon’s amended complaint; and concluded that the requirements of Form 18 were met. Id. at 9-11. Regarding indirect infringement, Judge Thynge determined that Nexeon adequately pled inducement finding facts in the complaint alleging “specific intent for its customers to infringe and knowledge that the acts constituted infringement.” Id. at 12-14. Judge Thynge determined, however, that defendants’ motion should be granted with respect to Nexeon’s allegations of contributory infringement because Nexeon failed to plead that there are no substantial non-infringing uses. Id. at 14-15.
Magistrate Judge Thynge has issued a Report and Recommendation addressing whether there is an actual case or controversy within the meaning of the Declaratory Judgment Act over a suit in which the plaintiff seeks judgment of a defendant’s willful infringement based on the defendant’s filing of a New Drug Application with the FDA. Both the plaintiff and the defendant in this case filed NDAs with the FDA and neither party’s NDA has been approved. The parties in the case are also parties to an interference in the PTO in which the defendant is the senior party. Clarus Therapeutics, Inc. v. Lipocine Inc., C.A. No. 15-1004-RGA-MPT, Report and Recommendation at 1-5 (D. Del. June 23, 2016).
Given these facts, Judge Thynge found “significant, concrete steps to conduct infringing activity” as well as ripeness for judicial resolution: “Defendant not only has a working product, but also has an NDA before the FDA for review. Additionally, plaintiff notes defendant’s market research, hiring of new sales and marketing personnel, saving for manufacture of commercial quantities of its product, manufacture of launch supplies, and anticipation of the manufacturing agreements. Defendant contends the prerequisite FDA approval for commercialization and entry into the market is uncertain and, if approval is eventually given, commercial launch will not be immediate. While this may be accurate, defendant’s conduct is still indicative of meaningful preparation for the making, launch, and use of [its drug product] that satisfies the immediacy requirement for declaratory judgment jurisdiction.” Id. at 8-11.
Moreover, “the PTAB’s decision in the upcoming Interference will not determine the issue of infringement central to plaintiff’s complaint. Due to the lack of further factual development needed and the PTAB’s inability to hear plaintiff’s infringement claim in the forthcoming Interference, the issue is fit for judicial decision.” Id. at 11. Judge Thynge therefore recommended that the defendant’s motion to dismiss be denied.
Judge Mary Pat Thynge recently recommended the Court grant Illumina’s motion to amend its Answer and Counterclaims to assert inequitable conduct. Cornell University v. Illumina, Inc., No. 10-433-LPS-MPT (D. Del. May 27, 2016). In its motion, Illumina alleged “the applicants and prosecuting attorney of the  patents violated their duty of candor to the PTO by filing a false or misleading 37 C.F.R. § 1.131 declaration” during prosecution regarding the applicants reduction to practice of the claimed methods. Id. at 2. According to Illumina, absent the false or misleading statement, the patents would not have issued. Id. at 2-3.
Judge Thynge found that there was good cause to amend and no undue delay, despite the fact that the deadline to amend pleadings had passed, based on the fact that the underlying facts supporting the amendment were obtained and confirmed during discovery, in particular through deposition testimony. Id. at 10-13. The basis for Cornell’s opposition was futility because the proposed amended pleading did not adequately plead inequitable conduct. Id. at 13. Judge Thynge disagreed, finding that the inequitable conduct allegations were pled with particularity, “identify[ing] the specific who, what, when, where and how of the material misrepresentation or omission committed before the PT0.” Id. at 14 (citing Exergen v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1328 (Fed. Cir. 2009). The “who” identified by Illumina were the specific applicants and prosecution counsel. Id. at 14. “What” information was purportedly misrepresented to the PTO was the date of the applicants’ reduction to practice. Id. at 14-15. The “when” identified was the date of the declaration in question as well as “the actions the PTO took before and after the filing of that declaration.” Id. at 15. Illumina identified the declaration as “where” the misrepresentation occurred, and detailed “how” the declaration and purported misrepresentation resulted in the PTO’s issuance of the patents. Id. at 15-16.
Cornell responded that the proposed pleading failed to plead that the declaration was material and that the persons identified had specific intent to deceive the PTO. Id. at 16. Regarding materiality, Cornell pointed to evidence “inconsistent with defendant’s allegations and reading of the [declaration].” Id. at 18-19. Judge Thynge determined, however, that at the pleading stage “plaintiffs’ evidence is irrelevant and the court can not address the merits of that evidence.” Id. at 19. Judge Thynge concluded, therefore, that Illumina sufficiently alleged that the declaration contained a material false or misleading misrepresentation. Id. Regarding intent to deceive, Cornell argued that “there can be no finding of deceptive intent, nor a reasonable inference of deceptive intent because [the applicants] testified they believed the declaration to be true at the time of filing and that [prosecution counsel] also testified he took steps to ensure that the inventors understood what the declaration, and the specific sentence at issue, meant before they signed the declaration.” Id. at 19-20. Judge Thynge noted that Cornell’s argument again “relies on assertions of fact requiring the court to address the merits of the evidence[.]” Id. at 20. Based on the allegations in the proposed pleading, Judge Thynge determined Illumina adequately pled specific intent. Id. at 20.
Chief Magistrate Judge Mary Pat Thynge recently found that a plaintiff’s motion to compel sought discovery that was disproportional under Rule 26. AVM Technologies, LLC v. Intel Corp., C.A. No. 15-33-RGA/MPT (D. Del. May 3, 2016). Specifically, the plaintiff sought discovery of “products that are not accused and pre-date the accused products because documents created when features were introduced would more likely address their purpose and the problems to be resolved.” Such information, the plaintiff argued, “would refuse Intel’s defense of lack of utility, noninfringing technology and also Intel’s arguments of accidental occurrence.” Intel argued in response that it had produced a substantial number of documents relating to, among others, the immediate predecessor generations of products not accused.” Intel added that the plaintiff’s motion, if granted, would require Intel to search and produce “a range of documents covering over 20 years” relating to “nearly every microprocessor made by Intel.” Judge Thynge focused on the proportionality requirement of Rule 26, and explained that the Court is required to “evaluate the parties’ arguments and reasoning for or against the requested production on the bases of the production sought, the other production to date, the degree of the requested production’s relevance, and the burdens imposed on the party from whom the production is requested.” In post-hearing submissions, the plaintiff accepted Intel’s compromise offer to search a high level database, and to then search across hits from that database using the search terms requested by the plaintiff. As a result, Judge Thynge denied the plaintiff’s motion but ordered Intel to perform the agreed upon searches.
In Sunpower Corporation v. PanelClaw, Inc., C.A. No. 12-1633-MPT (D. Del. Apr. 1, 2016), the parties had stipulated to Defendant’s filing of an early motion for summary judgment on limited issues. Id. at 2. To that end, Defendant moved for summary judgment of non-infringement on one patent and invalidity of another patent under Section 112 and/or Section 101. Chief Magistrate Judge Mary Pat Thynge granted the motion as to non-infringement, but denied the motion as to invalidity.
Defendant based its non-infringement defense on the PTAB’s construction of a certain term during the inter partes review. As this patent was expired, the PTAB did not adopt the broadest reasonable construction, instead applying a standard of review similar to that of district courts. Id. at 9-10. The Court found the PTAB’s construction “well-reasoned and persuasive” and adopted it, see id. at 13-14, and then concluded that Defendant’s accused products did not infringe one of the asserted patents, rejecting Plaintiff’s position that it was too early in the case to determine infringement where Defendant’s evidence of non-infringement was taken from Plaintiff’s own infringement contentions. See id. at 15.
Defendant also argued that the second patent-in-suit was invalid as indefinite, citing “certain statements and conclusion the PTAB made [regarding anticipation] in its  IPR decision, and the testimony of [Plaintiff’s] expert . . . as part of that IPR.” Id. at 17. But the Court agreed that Defendant had not met its burden based on the current record, noting that it was not bound by the PTAB’s discussion and that another district court had successfully construed the portion of the claim that Defendant argued was indefinite. Id. at 19-20. As to Defendant’s enablement, written description and/or inoperability, the Court concluded that its “conclusory” attorney arguments were insufficient. See id. at 24-25.