In a memorandum order issued yesterday, Judge Sue L. Robinson granted defendants’ motion to amend to add the defense of improper inventorship. Intellectual Ventures I LLC v. Toshiba Corp. et al., Civ. No. 13-453-SLR (D. Del. Sept. 7, 2016). The motion was filed shortly before the close of expert discovery and following the deposition of a third party who, defendants argued, should have been listed as an inventor of U.S. Patent No. 5,938,742. The Court granted the motion even though it was filed “17 years after the ‘742 patent issued, and more than one year after the court-ordered deadline for amended pleadings[,]” and with trial set to begin in January 2017. Id. at 4. Judge Robinson explained, “[b]ecause the court is not prepared at this juncture to evaluate the quality or quantity of evidence defendants cite in their papers, and because the court recognizes the importance of proper inventorship, the motion to amend shall be granted.” Id. at 5. However, Judge Robinson added that due to the “extraordinary delay between issuance of the ‘742 patent and the assertion of improper inventorship, as well as the fact that, in most instances, the remedy for improper inventorship is a certificate of correction, not invalidation[,]” “the court will bifurcate the newly-added defense to allow for additional discovery and a separate motion practice and trial[.]” Id.
In a recent Memorandum Order, Magistrate Judge Christopher J. Burke denied plaintiff’s motion to compel, pursuant Fed. R. Civ. P. 34(a), defendant Konami Digital Entertainment Inc. (“Konami US”) to produce core technical documents regarding certain accused products that are in the possession of Konami US’s foreign affiliate. Princeton Digital Image Corp. v. Konami Digital Entertainment, Inc., et al., C.A. No. 12-1461-LPS-CJB (D. Del. Aug. 31, 2016). Specifically, plaintiff requested that Konami US be ordered to “supplement its core technical document production . . . to include the technical documents describing the features of each accused game title, including the functional requirements, technical specifications, test plans and other relevant technical documents” by producing records in the possession of Konami US’s non-party sister entity, Konami Digital Entertainment, Ltd. (“Konami Japan”). Id. at 1. Konami US and Konami Japan are owned by a common parent company. Id.
In arguing that Konami US “has control over core technical documents in the possession of Konami Japan,” plaintiff asserted that “[Konami US] had acted with [Konami Japan] in effecting the transaction giving rise to suit and is litigating on its behalf[.]” Id. at 2-3. Judge Burke rejected this argument, observing that plaintiff “has pointed to very little evidence with regard to the relationship between Konami US and Konami Japan.” Id. at 4. Judge Burke further explained that plaintiff “has not offered an articulation as to what it would mean for Konami US, in this patent litigation matter, to have ‘acted with’ Konami Japan to ‘effect’ the relevant ‘transaction[s].’” Id. at 6. Plaintiff also failed to offer “any other information about Konami Japan’s connection to the instant litigation.” Id.
Judge Burke similarly found that “the Court has no basis to conclude that Konami US ‘is litigating on [Konami Japan’s] behalf.’” Id. at 7-8. Judge Burke noted, for example, that “[t]here is no record here of . . . Konami Japan employees directing the course of this litigation or making important strategic decisions in the matter for Konami US.” Id. at 8. Judge Burke further explained as follows: “That Konami Japan has, in at least one instance, made evidence (source code) in its possession accessible to Konami US . . . simply in order to . . . ‘protect its employees from time-consuming work in connection with’ this matter . . . cannot be enough to make this showing under Rule 34(a).” Id.
Chief Judge Leonard P. Stark recently considered defendants’ motion to dismiss based on lack of prudential standing of plaintiff when it filed the original complaint in 2012. Intellectual Ventures I LLC v. AT&T Mobility, LLC, et al., C.A. No. 12-193-LPS, 13-1632-LPS, 15-799-LPS, 15-800-LPS (D. Del. Aug. 25, 2016). Judge Stark previously granted a motion to dismiss for lack of standing because the licensor of the patent-in-suit retained certain rights over the patent. Id. at 2. Judge Stark gave plaintiff leave to amend to add the licensor as a plaintiff, but instead, in 2013 plaintiff purchased the patent from the licensor and amended its complaint re-adding the patent. Id. at 3-4. The defendants again moved to dismiss because the court already held plaintiff lacked prudential standing to assert the patent and cannot retroactively cure the standing defect by executing a nunc pro tunc agreement. Judge Stark agreed, finding that after the Federal Circuit’s decision in Alps South, LLC v. Ohio Willow Wood Co., 787 F.3d 1379 (Fed. Cir. 2015) the “post-filing agreement between . . . a patent infringement plaintiff who lacked all substantial rights in the patent on which it was suing at the time it filed suit and . . . the owner of the patent-in-suit, and holder of substantial rights in the patent-in-suit, as of the date of the filing of the suit – cannot retroactively cure the prudential standing defect.” Id. at 10.
Judge Richard G. Andrews recently construed claims related to LCD technology. MiiCs & Partners Am., Inc. v. Toshiba Corp., C.A. No. 14-803-RGA (D. Del. Aug. 31, 2016). Of note, Judge Andrews found that the preamble of three claims “carries patentable weight and is limiting to the claimed ‘liquid crystal display apparatus.’” Id. at 16. The Court explained, after considering the title (“Liquid Crystal Display Apparatus and Method for Lighting Backlight Thereof”), abstract (beginning: “In the liquid crystal display, . . .), and specification (describing the invention and its embodiments as “a liquid crystal display apparatus” fifteen times), “it is inconceivable that a reader would come away with anything but a firm conviction that the inventor invented and intended the claims to encompass a liquid crystal display apparatus, rather than some vague combination of two backlights.” Id. at 17-18.
In In re Rembrandt Technologies, LP Patent Litigation, MDL No. 07-md-1848-GMS (D. Del. Aug. 24, 2016), Judge Gregory M. Sleet considered specific fees and costs requested by all other parties adverse to Rembrandt (“AOPs”), having already determined that the case was exceptional.
The Court found the AOPs’ attorney fee rates to be reasonable, noting that “[w]hile local rates typically apply in determining reasonableness, the court finds that as a complex multi-district litigation, ‘national’ rates are appropriate in this case.” Id. at 1 n.2. But the Court found several categories of requested fees and expenses to be unreasonable, and denied the request for experts’ fees and costs, fees related to one party’s bankruptcy, fees for time spend on secretarial or clerical work, and pre-judgment interest. See id. at 2.
Judge Andrews recently considered several post-trial motions in a case relating to data storage systems including de-duplication of data. The Court largely denied the motions for judgment as a matter of law and new trial, but found one basis on which to grant the Defendant’s motion for a new trial. One anticipatory reference predated the patent-in-suit by several months, but the inventor testified that he had conceived of the invention earlier. Due to a lack of corroborating evidence, however, the Court found that it had been error to allow the jury to determine whether the reference was or was not prior art. EMC Corp., et al. v. Pure Storage, Inc., C.A. No. 13-1985-RGA, Memo. Op. at 12-18 (D. Del. Sept. 1, 2016). The Plaintiff, Judge Andrews explained, “failed to meet its burden of production with respect to an earlier date of conception. [Plaintiff] did not produce independent corroborating evidence of [the inventor’s]. The [allegedly corroborating] whiteboard photographs are not independently corroborative of [the inventor’s] testimony because [the inventor] took the photographs and had control of the camera, the photograph file names, and the metadata . . . [and] uncovered the photographs in 2015. Further, there is no evidence that [the inventor] showed the whiteboard markings or photographs of them to anyone other than his co-inventors around the time the markings were made.” Id. at 16 (internal citations omitted). The evidence provided, therefore, was both not “independent” and could not be reliably dated and were therefore insufficient to corroborate the testimony regarding conception. Id. at 16-17. Accordingly, Judge Andrews found, the jury “should have been instructed that the [reference at issue] is prior art,” and a new trial was warranted. Moreover, Judge Andrews found that the Defendant was entitled to judgment that the reference at issue disclosed certain elements of the claims and that the Plaintiff was not entitled to judgment that any claim element was missing; accordingly, the Court ordered a new trial on anticipation.
Judge Andrews recently issued a decision finding the claims of one of seven patents-in-suit ineligible under Section 101 as claiming an abstract idea. Sound View Innovations, LLC v. Facebook, Inc., C.A. No. 16-116-RGA, Memo. Op. at 1-2 (D. Del. Aug. 30, 2016). The patent-in-suit, U.S. Patent No. 8,095,593 claims a “method for managing electronic information” consisting of several steps. The Defendant contended that the claims were “directed to the abstract idea of managing information and preferences among members of a community,” which could be “performed mentally using pen and paper.” Id. at 7.
Judge Andrews explained that the “patent does not, as [Plaintiff] argues, provide ‘computer-specific solutions’” but rather “seeks to make a non-technological improvement to the non-technological problem of providing a user with information that is better suited to the user.” Id. at 8-9. Instead, the claims were “directed to the concept of offering more meaningful information to an individual based on his own preferences and the preferences of a group of people with whom he is in pre-defined relationships.” Id. at 10. Moreover, “[n]one of the claims offers a meaningful limitation beyond linking the abstract idea to generic or functionally-described computer components.” Id. at 10-14.
Judge Andrews also rejected the Defendant’s contention that he should consider the PTAB’s § 101 rejection during prosecution of a related application that included a claim that was substantially similar to a claim asserted in this case. Because the PTAB’s decision occurred before the Alice decision, however, Judge Andrews explained, “the PTAB decision has no relevance, even as persuasive authority, to the§ 101 motion under consideration.” Id. at 6-7.
This case involves several consolidated Hatch-Waxman cases filed by AstraZeneca against various defendants. Several of the defendants filed petitions for inter partes review and moved to join them with the petition previously filed by one defendant in June 2015 and instituted in May 2016. The PTAB’s decision on that first IPR must be issued by May 2017, but a trial in the consolidated litigation is scheduled to begin before Judge Sleet in September 2016. Given the institution decision by the PTAB, the defendants who filed the second wave of IPR petitions moved to stay the District Court litigation. AstraZeneca AB v. Aurobindo Pharma Ltd., et al., C.A. No. 14-664-GMS, Order at 1-2 (D. Del. Aug. 23, 2016).
Judge Sleet denied the motion to stay, finding that all of the factors considered in the stay analysis “weigh strongly against the imposition of a stay.” Id. at 2 n.3. Perhaps most importantly, Judge Sleet explained that “a stay would unduly prejudice AstraZeneca [because this] two-year-old case is within one month of trial [and the] parties have expended considerable resources and effort in preparing for this trial.” Id. Judge Sleet continued: “At this late date, the IPR Defendants are asking the court to delay trial for almost a year. The IPR Defendants have not presented any explanation for the lengthy delay in submitting their IPR petitions . . . [and] the 30-month stay of FDA approval will expire for most defendants’ ANDAs before [the IPR decision, requiring AstraZeneca] . . . to request preliminary injunctions to prevent the defendants from launching their products before the validity of the RE’l86 patent is resolved.” Id.
In a recent Memorandum Order, Chief Judge Leonard P. Stark granted in part defendant’s motion to exclude the testimony of plaintiff’s damages expert. MAZ Encryption Technologies LLC v. Blackberry Corporation, C.A. No. 13-304-LPS (D. Del. Aug. 25, 2016). As Judge Stark explained, to calculate “his baseline estimate for damages,” the expert relied on a “previous license agreement involving the patent-in-suit.” Id. at 2. The previous license agreement, however, “was made in the context of settling a litigation dispute, and thus did not reflect the royalty the parties would have reached ‘just before infringement began.’” Id. at 2-3. As Judge Stark explained, “the amount of the previous settlement would need to be increased to arrive at the royalties that would have been agreed to in a hypothetical negotiation.” Id. at 3. The expert attempted to do so by “estimating the discount factor the parties used when negotiating the previous license agreement.” Id. The expert used the equation “Expected Damages= Settlement Value/Likelihood of Liability,” and arrived at his estimate of expected damages “by estimating the likelihood of liability at 40%.” Id. Judge Stark found that the expert’s “likelihood of liability” factor was unreliable:
[The expert’s] estimate for the likelihood of liability was not based on any facts relating to the merits of Plaintiff’s case. The estimate did not consider the nature of the patent-in-suit, the accused products, or either party’s litigation strategy. Instead, the estimate was based on a study that found that “patent holders tend to prevail approximately 40% of the time” in the District of Delaware. The Court agrees with [defendant] that [the expert’s] estimate approach is not reliable as it is not sufficiently tied to the particular facts of this case.
Id. at 3-4.
In a recent post-trial opinion in this ANDA litigation, Judge Gregory M. Sleet found, inter alia, that (1) all asserted claims of the patents-in-suit are valid; (2) defendant’s proposed products induce infringement of the asserted claims of U.S. Patent No. 8,586,610 (the “’610 Patent”); and (3) defendant’s proposed products do not contributorily infringe the asserted claims the ’610 Patent. Vanda Pharmaceuticals Inc. v. Roxane Laboratories, Inc., C.A. Nos. 13-1973, 14-757-GMS (D. Del. Aug. 25, 2016).
Notably, Judge Sleet found certain claims of the ’610 Patent not invalid for failure to claim patentable subject matter pursuant to § 101. Id. at 16-20. Defendant argued that the ’610 Patent embodies laws of nature that it applies in a way that is routine and conventional. Id. at 17. Specifically, defendant contended that the ’610 Patent was directed to two laws of nature: “(1) that mutations in the CYP2D6 genes can alter enzymatic activity, and (2) that a patient’s CYP2D6 enzymatic activity affects their metabolism of iloperidone.” Id. Although Judge Sleet acknowledged that the ’610 Patent depends on laws of nature, he ultimately concluded that defendant failed to prove “by clear and convincing evidence that the precise test and the discovered results were routine or conventional.” Id. at 18-20. As Judge Sleet observed:
The court finds that while it may have been conventional to investigate for side-effects, Roxane has not proven by clear and convincing evidence that the precise test and the discovered results were routine or conventional. The court finds it persuasive that the dosage step in the ’610 Patent does not apply to all patients, but only a specific patient population based upon their genetic composition. The dosage step requires applying genetic tests in a highly specified way. Moreover, the process of using this genetic test to inform the dosage adjustment recited in the claims was not routine or conventional and amounted to more than a mere instruction to apply a natural relationship. This combination of elements is sufficient to ensure that the claims amount to significantly more than just a natural law.