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In the declaratory judgment action Tabletop Media, LLC v. AMI Entertainment Network, LLC, C.A. No. 16-1121-RGA-MPT (D. Del. Oct. 10, 2017), Chief Magistrate Judge Mary Pat Thynge recommended that Defendant’s motion to dismiss for lack of subject matter jurisdiction, due to a lack of case or controversy, be denied.  The Court pointed to the following facts in support of its conclusion that an actual case or controversy existed:

Here, [Defendant] AMI asserted its rights under the ‘091 patent and alleged [Plaintiff] Tabletop’s Ziosk had features that were covered by the patent. In addition, AMI requested a response within 10 days. In its response, Tabletop insisted the patent was not relevant to its Ziosk product, but AMI continued to assert the patent’s relevance and requested that its patent lawyer be included in a meeting between the parties. Just as in [Hewlett-Packard v. Acceleron, LLC , 587 F.3d 1358 (Fed. Cir. 2009)], AMI affirmatively contacted Tabletop asserting its patent rights, Tabletop disagreed, and AMI continued to claim that the patent was relevant to Tabletop’s Ziosk. Thus, there is an actual case and controversy because the two parties have opposing legal interests that are redressable by a court decision.

Id. at 11. The Court further noted that a declaratory plaintiff need not cut of licensing discussions before seeking a declaration of its rights, id. at 12; here, the parties had continued discussions after Tabletop filed this suit and AMI had not threatened any litigation but also had not assured it would not sue for infringement.  Finally, the Court observed that exercising its discretion to dismiss the declaratory judgment suit would be inappropriate here, as “[t]his is the type of situation the Declaratory Judgment Act was designed to address. The parties have an adverse legal interest, and, the adverse legal interest is ‘fairly traceable’ to AMI’s conduct.” Id. at 13.

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Magistrate Judge Burke recently issued an interesting memorandum order addressing requests for admission and the parties’ disputed objections to those requests. Judge Burke first addressed several RFAs seeking “admissions regarding features of certain chemical structures from the prior art, namely whether those structures read on certain limitations found in the claims at issue.” Integra Lifesciences Corp., et al. v. Hyperbranch Medical Tech., Inc., C.A. No. 15-819-LPS-CJB, Memo. Or. at 2 (D. Del. Sept. 27, 2017). Plaintiffs objected to these RFAs as improperly directed to legal conclusions, but Judge Burke found that this objection was not justified. Judge Burke explained that although “[t]his Court has explained that RFAs that ‘seek legal conclusions are not allowed,’ . . . [w]hether a prior art reference anticipates the claim limitations of a patentee’s invention is a question of fact . . . [and obviousness] is a question of law, but it is based on underlying factual determinations as to matters including the differences between the claims and the prior art.” Id. at 2-4. Thus, the RFAs at issue “seek admission as to whether certain chemical structures from asserted prior art include particular features found in the relevant claim language. To be sure, such admissions could indeed ultimately be used to help prove up an ultimate legal issue in the case, but that does not change the fact that they themselves are directed to factual questions.” Id. at 4-5. Judge Burke further determined that it was possible for Plaintiffs to provide a substantive response to several of the disputed RFAs because the RFAs were sufficiently clear, and for the RFAs on which the Court could not determine a response was possible, the Defendant has the remedy of seeking reasonable expenses incurred in proving a matter that Plaintiffs refused to admit. Id. at 5-8, 11-12. Similarly, Judge Burke ordered a response to RFAs asking Plaintiffs to admit they were “aware” of off-label uses, overruling Plaintiffs’ objection, advanced only in their letter-briefs, that the word “aware” is ambiguous. Id. at 9-11.

For other RFAs, however, Judge Burke denied the motion to compel a response because he agreed with Plaintiffs’ objection that the RFA sought admission of multiple facts rather than a singular fact than can be admitted or denied. Id. at 8, 12-13. Finally, Judge Burke granted Defendant’s motion to compel responses to RFAs regarding “former customers” of Plaintiffs because the RFAs were not overly vague, incomplete, or directed to multiple facts to be admitted or denied. Id. at 13-16.

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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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Following a jury trial in E.I. Dupont de Nemours and Company v. Unifrax I LLC, C.A. No. 14-1250-RGA, in which Defendant’s product was found to infringe the asserted patent, Judge Richard G. Andrews ruled on: (1) Defendant’s renewed motions for judgment as a matter of law and request for a new trial; and (2) Plaintiff’s Motion for a Permanent Injunction, Supplemental Damages and Interest (D. Del. Sept. 12, 2017).

The Court denied Defendant’s motions. As to JMOL, the Court found that there was sufficient evidence to support the jury’s findings on infringement and no invalidity. Notably, the Court rejected Defendant’s attempt to make a new claim construction argument not presented in its Markman briefing, noting that it has “numerous opportunities to raise this specific issue prior to trial,” including during summary judgment, and had waived the argument. Id. at 3-4.  The Court also rejected the request for a new trial for the same reasons that the JMOL motion was denied.  The Court also rejected Defendant’s arguments that certain of Plaintiff’s cross-examination mislead the jury, and disagreed that the jury had been improperly instructed on conception. Id. at 5-6.

In a separate opinion addressing Plaintiff’s motion, the Court granted a permanent injunction. Irreparable harm existed where Plaintiff had shown a causal connection between Defendant’s sales and harm to Plaintiff, and where Plaintiff and Defendant were the only competitors in the relevant market: “Defendant’s predecessor . . . product was dissatisfactory to Boeing. There is evidence that the predecessor product would not have qualified under Boeing’s new specification. Defendant’s . . . product uses Plaintiffs patented flame barrier laminate design to qualify for this specification and compete in this market. Defendant is Plaintiffs only competitor in Boeing’s flame barrier laminate market. Plaintiff projected that its Nomex XF would have sales of $32 million in 2013 to 2015. Defendant’s presence in the market directly reduced Plaintiffs sales.” Id. at 3.  Money damages were inadequate where Plaintiff “would be forced to compete against a rival gaining market share with Plaintiff’s technology” and where Plaintiff never agreed to royalty payments to license its technology, and similarly, the balance of hardships weighed in Plaintiff’s favor where the absence of an injunction would require Plaintiff to compete against its patented invention. Id. at 4.  Finally, the Court ruled an injunction would not harm the public interest.  “Defendant argue[d] that an injunction would harm the public interest because the public is better off with a multiple-supplier market for products affecting public safety,” but the Court was persuaded by Plaintiff’s evidence that no such public safety concern was present and the Court “was not concerned with Plaintiff’s ability to supply its product.”  Further, “copies of patented inventions have the effect of inhibiting innovation and incentive. Guarding against such copies could foster the development of more technologies aimed at enhancing public safety.” Id. at 5 (citations and internal quotation marks omitted).

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Magistrate Judge Christopher J. Burke recently denied a motion to stay pending the resolution of inter partes review of certain claims of one patent-in-suit.  Triplay, Inc. v. WhatsApp Inc., C.A. No. 13-1703-LPS-CJB (D. Del. Sept. 18, 2017).  Judge Burke explained that the IPR, including any appeals, would likely be resolved before any significant events were were likely to occur in the litigation (which did not yet have a case schedule), a factor weighing against a stay.  Second, while the lack of a case schedule usually means that a case is in its early stages – a factor weighing in favor of a stay – in this case the litigation was nearly four years old, and the lack of a case schedule was due to an early claim construction of certain claims for purposes of a pending motion to dismiss under section 101.  Because the case was not, practically speaking, in its early stages, Judge Burke found “no compelling reason to further stall the entirety of this case to allow for the Federal Circuit to review the PTAB’s decisions relating to only some claims of a single patent-in-suit.”

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Judge Richard G. Andrews recently considered plaintiff Acceleration Bay LLC’s various discovery motions. Acceleration Bay LLC v. Activision Blizzard, Inc., et al., No. 16-453-RGA, No. 16-454-RGA, No. 16-455-RGA (Sept. 7, 2017). Regarding defendants’ interrogatory responses, Judge Andrews declined to order defendants to supplement specific interrogatories, in part due to plaintiff’s conclusory or vague theories.  For example, plaintiff sought supplementation of interrogatories seeking non-infringing alternatives, and non-infringement theories.  Id. at 3, 4.  Defendants argued that supplementation was not warranted, in part “due to the vagueness of Plaintiff’s infringement contentions and because Plaintiff has the burden of proving the lack of non-infringement alternatives.”  Id. Judge Andrews agreed.  Id. at 3, 4.  Plaintiff also sought supplementation regarding defendants’ damages theories.  Again, defendants argued that their response was reasonable in light of plaintiff’s “conclusory” damage claim.  Id.  Again, Judge Andrews agreed.  Id. at 4.

Acceleration Bay LLC v. Activision Blizzard, Inc., No. 16-453-RGA (Sept. 7, 2017)

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In a series of related actions brought by Acceleration Bay LLC, Judge Richard G. Andrews denied Defendants’ motion to dismiss due to allegedly patent-ineligible subject matter of three asserted patents. Acceleration Bay LLC v. Activision Blizzard, Inc., C.A. No. 16-453-RGA (D. Del. Aug. 29, 2017).  The claims at issue related to a “broadcast channel for a subset of [] computers of an underlying network.” Id. at 2.  The Court concluded that the claims were not directed to an abstract idea, rather “an innovative network structure for the distribution of data as the number of participants in a computer network is scaled.” Id. at 6.  The Court rejected Defendants’ analogy to the claims as “the schoolyard game of ‘telephone,’” as analogy did not “present the same communication scaling issues as those that arise in computer networks.” Id. at 7. The Court instead analogized the claims at issue to those in the Enfish case as requiring “a specific type of communication structure designed to improve the way computers communicate as participants scale.” Id.

Acceleration Bay LLC v. Activision Blizzard, Inc., C.A. No. 16-453-RGA (D. Del. Aug. 29, 2017)

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Judge Gregory M. Sleet recently denied a motion for a Rule 54(b) judgment following an unopposed motion to dismiss accompanied by a covenant not to sue.  Nespresso USA, Inc. v. Ethical Coffee Co. SA, C.A. No. 16-194 (GMS) (D. Del. Sept. 5, 2017).  Judge Sleet explained that, under Curtis-Wright Corp. v. General Electric Co., 446 U.S. 1, 7 (1980), the Court’s granting of the unopposed motion was not an adjudication of the merits of the dispute — “[t]here was no determination by the court as to the validity of the claims at issue or whether they were infringed.”  As a result, Judge Sleet explained that “this does not constitute a final judgment under Fed. R. Civ. P. 54(b) because the claims were dismissed prior to an adjudication on the merits.”

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Judge Richard G. Andrews recently granted summary judgment of non-infringement and invalidity relating to a patent claiming a system for locating and identifying portable devices using ultrasonic base stations.  Centrak, Inc. v. Sonitor Technologies, Inc., C.A. No. 14-183-RGA (D. Del. Aug. 30, 2017).  The plaintiff’s infringement theory was based on the defendant’s “making and using” a system covered by U.S. Patent No. 8,604,909, in this case by “installing” the system at customer hospitals.  Judge Andrews found, however, that while the defendant was involved in the installation in various ways (e.g., evaluating the appropriate system to install based on the customer hospital’s layout, providing the customer hospital with network infrastructure requirements, and working with the hospital customer, post-installation, to troubleshoot the system), there was no evidence in the record that “Defendant makes the system.  The testimony cited indicates that Defendant does not itself install the system.  Furthermore, Plaintiff has not provided any evidence of contracts entered into between Defendant and third party installers that would indicate that the installation is done at Defendant’s direction or behest.”  The plaintiff next argued that even if the defendant does not actually install the system, “the customer’s actions in making the claimed invention are attributable to” the defendant.  Id. at 10.  Judge Andrews rejected this argument, explaining that the Federal Circuit’s Centillion decision “is still good law and applies to the system claims in this case.  Plaintiff must prove that Defendant makes or uses the entire system, including all claimed elements, in order to prove infringement.  Id. at 11.  While the troubleshooting allegations could give rise to a “use” infringement claim, Judge Andrews found that the vague record evidence relating to the troubleshooting did not demonstrate that the entire system was “used” during testing.

Judge Andrews also found that all asserted claims of the ‘909 patent were invalid for failure to satisfy the written description requirement.  The specification disclosed radio frequency and infrared base stations, but only “contemplated” ultrasonic base stations.  Judge Andrews explained that “[m]ere contemplation . . . is not sufficient to meet the written description requirement. . . . [I]t seems clear to me that electromagnetic radiation and sound waves are not simply two species of the same genus; rather these are two completely different types of phenomena.”  Id. at 15.  The Court agreed with the defendant that the practical difference between using ultrasonic base stations instead of infrared base stations is substantial, and therefore the patent failed to provide written description support for the use of the former.  Id. at 15-16.

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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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