Articles Posted in Sherry R. Fallon, Magistrate Judge

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In Fraunhofer-Gesellschaft Zur Förderung der angewandten Forschung e.V. v. Sirius XM Radio Inc., C.A. No. 17-184-JFB-SRF (D. Del. Oct. 13, 2017), Magistrate Judge Sherry R. Fallon issued a Memorandum Order resolving the parties’ disputes regarding the terms of a protective order relating to source code.  The Court first ruled that Defendant’s definition of source code would be adopted, which included both software-based and hardware-based code. Id. at 2.  The Court concluded that evidence submitted, including expert declarations, established that “the term ‘source code’ encompasses both software-based and hardware-based code.” Id. at 3.  Furthermore, the Court concluded that “[d]efining ‘source code’ to include hardware-based code, including VHDL, is also consistent with this court’s case authorities” and cited other decisions from this District in support. Id.

Several of Defendant’s disputed proposals regarding restrictions on source code production were also adopted “to provide clear guidance and avoid the need to revisit such issues in this case,” specifically: prohibiting recording devices in the source code review room (while requiring a separate “private space” for the reviewers’ use of electronic devices); allowing reviewers to take notes on the source code computer but then request printouts of those notes; and limiting source code printing to 500 pages with the ability to request more later (accepting Plaintiff’s contention that “source code review is not critical to the facts of this case”). See id. at 3-4.

With regard to confidentiality designations for source code, the Court accepted Plaintiff’s proposal that “documents with fewer than 50 contiguous lines of source code may be produced under the ‘Highly Confidential -·Attorneys’ Eyes Only’ designation, while documents with more than 50 contiguous lines of source code may be produced in redacted form under the, ‘Highly Confidential – Attorneys’ Eyes Only’ designation, or in unredacted form under the ‘Highly Confidential – Attorneys’ Eyes Only – Source Code’ designation.” Id. at 5.

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In this litigation involving implantable power-injectable port products, Judge Fallon addressed several motions to compel, primarily brought by the Defendant. Judge Fallon first ruled that Plaintiff Bard need not produce “documentation of Bard’s Vortex power injection testing” because Bard had already produced all documents regarding testing of Vortex port products and the documents sought do not exist. Because Judge Fallon found the evidence cited “fails to affirmatively establish that Bard possesses [such] documentation,” “Bard cannot be compelled to produce that which it does not have [but to] the extent that Bard’s representations prove to be inaccurate in the future, the court may take appropriate action at that time.” C.R. Bard, Inc., et al. v. Angiodynamics, Inc., C.A. No. 15-218-SLR-SRF, Memo. Or. at 4-5 (D. Del. July 31, 2017). Based on similar reasoning, Judge Fallon denied in part a request to produce documents related to a merger between Bard and a third party that Bard represented never existed: Her Honor granted the request with respect to the merger agreement and documents exchanged during merger negotiations, but denied it with respect to documents which were subject to the common interest privilege between the parties to the merger. Id. at 11-13.

Judge Fallon next addressed a motion to compel Bard to produce documents and prepare a 30(b)(6) witness regarding an interference proceeding over whether claims in a non-asserted patent could properly claim priority to an earlier application. The defendant argued that this application was relevant both because it was incorporated by reference in the patents-in-suit and because the plaintiff had relied on the application during claim construction. Judge Fallon denied the request to produce documents because Bard had “consistently represented that it produced all non-privileged documents responsive” to that request and because it was “not apparent from the current record that a privilege log [which Bard did not produce] would advance AngioDynamics’ discovery efforts on this subject in a manner proportional to the needs of the case.” Judge Fallon granted, however, the request for a 30(b)(6) witness on this topic. Id. at 5-9.

Judge Fallon also denied a motion to compel Bard to produce nondisclosure agreements related to “pre-launch market survey activities for Bard’s PowerPort products” because Bard had already produced some such NDAs, was continuing to search for similar NDAs, and had not suggested that it planned to withhold the requested NDAs. Id. at 5. And Her Honor granted a motion to compel Bard to produce foreign regulatory filings “including applications and correspondence regarding the structure, function, and operation of Bard’s products to rebut the testimony of certain Bard witnesses who allegedly attempted to disavow the accuracy of Bard’s FDA submissions.” Id. at 9-11.

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Magistrate Judge Sherry R. Fallon recently considered plaintiff’s motion to compel defendants to cross-produce their Long Term Evolution (“LTE”) Licenses across the six related cases filed by plaintiff.  Evolved Wireless, LLC v. Apple Inc., et al., No. 15-542-SLR-SRF, et al. (D. Del. July 26, 2017).  The protective order in these cases permitted cross-production of defendants’ confidential information only with the express written consent of the defendants.  Id. at 3.  Plaintiff argued that the licenses were relevant to the related cases because they provide “industry data about the value of the LTE standard generally, as well as the value of individual patents essential to the standard.”  Id. at 5.  Defendants, on the other hand, argued that “broad, third-party portfolio license agreements are not relevant or proportional to the analysis of a FRAND royalty rate because they do not involve the same patents-in-suit, parties, or accused products.”  Id.  Judge Fallon agreed with defendants and denied the motion, finding that “the relevance of the LTE license agreements to the calculation of damages is not sufficiently proportional to the needs of the case, given the highly confidential nature of the LTE license agreements and the harm that could result from the dissemination of the license agreements.”  Id.  Moreover, “the license agreements sought by [plaintiff] do not cover the patents-in-suit or the accused products” and so, “provide little insight as to the value of the specific patents-in-suit in the present case to the LTE standard.”  Id. at 5-6.

Evolved Wireless, LLC v. Apple Inc., No. 15-542-SLR-SRF

 

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In Boston Scientific Corporation, et al. v. Edwards Lifesciences Corporation, C.A. No. 16-275-SLR-SRF (D. Del. Feb. 28, 2017), Magistrate Judge Sherry R. Fallon granted defendant and counterclaim/third-party plaintiff (collectively, “Edwards”)’s motion for leave to amend their answer to add a prior use defense pursuant to 35 U.S.C. § 273.

Evaluating the proposed amendment under Rule 15, the Court concluded that the proposed affirmative defense was “factually sufficient” for this stage of the proceedings, where Plaintiffs had not pointed to any authority requiring a heightened pleading standard for affirmative defenses – rather, affirmative defenses are not held to the same pleading standard as claims or counterclaims. Id. at 3-4.  The Court also held that the new defense would not cause undue delay where the motion was filed prior to the case’s deadline for amendment of pleadings and where the case was in its early stages, with fact discovery closing in spring 2017. Id. at 4.  As to prejudice, although Plaintiffs “claim[] that [they] did not anticipate the addition of Edwards’ prior use defense when [they] negotiated the discovery limits in the scheduling order, [Plaintiffs] acknowledged the possibility of an amended answer by stipulating to the deadline for amended pleadings in the scheduling order at the time of discovery negotiations.” Id. at 5.

However, “[t]o the extent [Plaintiffs] would be prejudiced by the need to obtain additional discovery directed to the prior use defense, a limited grant of additional discovery [was] warranted.” Id. Accordingly, the Court granted Plaintiffs’ request for an increase in their limits on discovery requests and an extension to serve new document requests, but did not provide Plaintiffs with the full requested increase, as “[i]n view of the unused requests available to [Plaintiffs] under the scheduling order . . . the number of additional requests sought by [Plaintiffs] is unnecessary.” Id. at 6.

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In Collabo Innovations, Inc. v. Omnivision Technologies, Inc., C.A. No. 16-197-SLR-SRF (D. Del. Jan. 25, 2017), Magistrate Judge Sherry R. Fallon considered Defendant’s motion to transfer to the Northern District of California as well as its motion to dismiss indirect infringement claims based on an alleged lack of pre-suit knowledge.

The Court denied the motion to transfer. Both parties were Delaware corporations with principal places of business in California, and Plaintiff had no facilities in Delaware. Id. at 1. Because Delaware was not Plaintiff’s “home turf,” the Court awarded Plaintiff’s forum choice “increased weight in the Jumara analysis but less than the ‘substantial’ or ‘paramount’ weight” it would be given had [Plaintiff] filed suit in its home forum.” Id. at 8. Because Defendant manufactured, sold, and used the accused products nationwide, and because it was also “a large Delaware corporation with resources to litigate in this district,” where the claim arose was neutral and the convenience of the parties weighed against transfer. Id. at 9-10. As to the public interest factors, the Court found that practical considerations weighed slightly against transfer where Plaintiff had filed a related action against another party in Delaware but where Defendant argued that “a trial in Delaware will be more expensive and difficult due to travel considerations and expenses, including costs of local counsel.” Id. at 12-13. In sum, Defendant had “not shown that the Jumara factors as a whole weigh strongly in favor transfer. Only [Defendant’s] forum preference weighs in favor of transfer, and that preference does not warrant maximum deference. On the other hand, the remaining factors are neutral or weigh in favor of [Plaintiff].” . . . The court recognizes that it may be more expensive and inconvenient for [Defendant] to litigate in Delaware instead of California. However, under the circumstances, the court ‘decline[s] to elevate the convenience of one party over the other,’ as ‘discovery is a local event and trial is a limited event.’ . . . Delaware imposes no ‘unique or unexpected burden’ on [Defendant], such that transfer is warranted in the interests of justice.” Id. at 14-15 (citations omitted).

The Court then recommended that the motion to dismiss be granted in part, as to any possible allegations of pre-filing conduct. Acknowledging that “[t]he case law in this district is divided on the issue of whether pre-suit knowledge is required to sufficiently state a claim for indirect infringement,” Id. at 17, the Court adopted the “more recent line of cases” holding that “the filing of a complaint is sufficient to provide knowledge of the patents-in-suit for purposes of stating a claim for indirect infringement occurring after the filing date.” Id. Here, Plaintiff had limited its cause of action for indirect infringement to conduct following the filing of the complaint. Id. at 18. “In keeping with the most recent decisions of this court,” therefore, the “post-filing date knowledge of the patents-in-suit is sufficient to state a claim for indirect infringement occurring after service of the complaint. In view of the foregoing authority,” the Court recommended that the motion be granted-in-part “to the extent that [Plaintiff’s] amended complaint could be construed to assert causes of action for indirect infringement based on pre-filing conduct.” Id.

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In Boston Scientific Corp., et al. v. Edwards Lifesciences Corp., et al., C.A. No. 16-275-SLR-SRF (D. Del. Dec. 27, 2016), Magistrate Judge Sherry R. Fallon denied Defendants’ request to include in the protective order an objection procedure for disclosure of confidential material to non-U.S. counsel in counterpart litigation. The Court concluded that the following provision would reveal counsel’s work product because it would reveal which documents were “important to Plaintiffs”: “Prior to disclosure of Protected Material to Designated Foreign Counsel, the Party seeking disclosure shall provide written notice to the Producing Party identifying (i) the names of the Designated Foreign Counsel and (ii) the specific Protected Material sought to be disclosed to the Designated Foreign Counsel.” Id. at 2.

Defendants argued that the provision was necessary to provide a mechanism by which disclosure of sensitive documents could be objected to, and maintained that “foreign counsel access is unnecessary for coordinating litigation strategy.” Id. at 3. It further argued that the provision was “modeled after a provision in [another case’s] protective order.” Id. However, the Court observed that “the [other order’s] provision upon which [the proposed provision] is modeled relates to the use of documents in foreign actions. Whereas, in the present case, there is no pending request to use the documents in foreign litigation. Plaintiffs previously agreed that the documents would not be used in any foreign litigation. Therefore, the addition of [the provision] is unnecessary.” Id. (emphasis in original).

Boston Scientific Corp., et al. v. Edwards Lifesciences Corp., et al., C.A. No. 16-275-SLR-SRF (D. Del. Dec. 27, 2016)

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Magistrate Judge Sherry R. Fallon recently considered plaintiff’s motion to compel defendant to supplement its document production and responses to certain interrogatories.  Regarding production of core technical documents, Plaintiff requested certain categories of documents, including:

(1) requirement and in-house technical specifications; (2) design documents; (3) scope of work documents and schedules; (4) vendor specifications; (5) complete functional programming guides; (6) testing documents; (7) deployment documents; (8) maintenance documents; (9) internal user guides; (10) system integration documents; (11) engineer training documents; (12) system architecture documents, and (13) complete architectural design documents.

Novanta Corporation v. Iradion Laser, Inc., No. 15-1033-SLR-SRF (D. Del. Sept. 16, 2016).  Defendant argued that it complied with the requirements of the Scheduling Order and that the categories of documents identified by plaintiff does not exist.  Id. at 4.

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In a recent Report and Recommendation, Magistrate Judge Sherry R. Fallon recommended denying foreign defendants TCL Communication Technology Holdings Limited (“TCL Holdings”) and TCT Mobile Limited’s (“TCT Hong Kong”) motion to dismiss for lack of personal jurisdiction. Godo Kaisha IP Bridge 1 v. TCL Communication Technology  Holdings Limited, C.A. No. 15-634-SLR-SRF (D. Del. Aug. 17, 2016). Judge Fallon found that personal jurisdiction was proper under various sections of the Delaware long-arm statute. First, Judge Fallon found that jurisdiction was proper under subsection (c)(1) because “TCT Hong Kong and TCL Holdings made direct sales of Accused Products to Delaware customers through their respective websites,” and therefore transacted business in Delaware. Id. at 9-10. Judge Fallon also found that section (c)(3) was satisfied because TCT Hong Kong and TCL Holdings caused tortious injury in Delaware, as they caused to be sold through a website or an Amazon storefront accused products to Delaware customers. See id. at 10. Finally, Judge Fallon found that jurisdiction was proper under a “dual jurisdiction” or “stream of commerce” theory, which combines subsections (c)(1) and (c)(4). Under this theory, Judge Fallon concluded that TCL Holdings and TCT Hong Kong “intended to serve the United States market without excluding Delaware, thereby satisfying the first prong of the dual jurisdiction analysis.” Id. at 13. Judge Fallon noted that “[t]he record in the present case establishes TCT Hong Kong’s intent to serve the Delaware market by manufacturing and selling phones, which it actively markets in the United States and distributes through national retailers like Best Buy.” Id. at 12.

Judge Fallon also found that exercising jurisdiction over the TCL Holdings and TCT Hong Kong comported with due process. Judge Fallon explained that evidence showed “TCL Holdings and TCT Hong Kong purposefully availed themselves of the privilege of conducting business in Delaware by introducing their products in the United States market with the knowledge that some of those products would end up in Delaware and they should anticipate being sued in Delaware.” Id. at 16.

Godo Kaisha IP Bridge 1 v. TCL Communication Technology Holdings Limited, C.A. No. 15-634-SLR-SRF (D. Del. Aug. 17, 2016).

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In a recent Report and Recommendation, Magistrate Judge Sherry R. Fallon recommended that the court deny defendant Baker Hughes, Incorporated’s (“Baker”) motion to transfer venue to the Southern District of Texas pursuant to 28 U.S.C. § 1404(a). Smith International, Inc. v. Baker Hughes Incorporated, C.A. No. 16-56-SLR-SRF (D. Del. Aug. 10, 2016). Judge Fallon concluded that “Baker has not shown that the Jumara factors as a whole weigh strongly in favor transfer.” Id. at 12. Judge Fallon explained that “[o]nly Baker’s forum preference weighs in favor of transfer, and that preference does not warrant maximum deference. On the other hand, the remaining factors are neutral or weigh in favor of [plaintiff] Smith.” Id. Further, “in the present action, [plaintiff] Smith chose a legitimate forum because Delaware is the state of incorporation of both parties.” Id. While Judge Fallon “recognize[d] that it may be more expensive and inconvenient for Baker to litigate in Delaware instead of Texas,” the court declined “to elevate the convenience of one party over the other,’ as ‘discovery is a local event and trial is a limited event.’” Id. at 13. Judge Fallon found that “Delaware imposes no ‘unique or unexpected burden’ on Baker, such that transfer is warranted in the interests of justice.” Id.

Smith Int’l, Inc. v. Baker Hughes Inc., No. 16-56-SLR-SRF (D. Del. Aug. 10, 2016).

UPDATE: Judge Robinson recently overruled objections to Judge Fallon’s Report & Recommendation and affirmed the denial of Baker’s motion to transfer.

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In a recent Report and Recommendation, Magistrate Judge Sherry R. Fallon recommend that the court deny defendant’s motion to transfer to the District of Minnesota pursuant to 28 U.S.C. § 1404(a). Husqvarna AB et al. v. The Toro Company, C.A. No. 15-856-SLR-SRF (D. Del. Aug. 11, 2016). Judge Fallon found that “[o]nly [defendant’s] forum preference for its ‘home district’ and the limitations of some [of defendant’s] witnesses to appear in person for trial weigh in favor of transfer.” Id. at 16. Judge Fallon explained that “[i]n the present action, [plaintiffs] chose a legitimate forum, [defendant’s] state of incorporation.” Id. While Judge Fallon recognized “that it may be more expensive and inconvenient for [defendant] to litigate in Delaware than in Minnesota,” Judge Fallon declined “to elevate the convenience of one party over the other,’ as ‘discovery is a local event and trial is a limited event.’” Id. Judge Fallon concluded that “Delaware imposes no ‘unique or unexpected burden’ on [defendant], such that transfer is warranted in the interests of justice.” Id. According to Judge Fallon, defendant failed to show that the Jumara factors a whole weigh in favor of transfer, and therefore recommended that the court deny defendant’s motion.

Husqvarna AB et al. v. The Toro Company, C.A. No. 15-856-SLR-SRF (D. Del. Aug. 11, 2016).

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