Judge Sleet recently denied motions to dismiss and bifurcate counterclaims of inequitable conduct and antitrust violations. In response to the plaintiffs’ complaint for patent infringement, the defendant in this case filed an answer that included ten counterclaims. The plaintiff then moved to dismiss or bifurcate counts IX and X of the counterclaims, which were for inequitable conduct and Sherman Act violations. Judge Sleet found, however, that the plaintiff was “improperly seek[ing] to disprove [defendant’s] factual assertions. The court does not analyze the factual disputes raised by [plaintiff], but examines the sufficiency and plausibility of [defendant’s] claims.” F’real Foods, LLC, et al. v. Hamilton Beach Brands, Inc., et al., C.A. No. 16-41-GMS, Order at 2 n.1 (D. Del. June 13, 2016). Specifically, the inequitable conduct claims were adequately plead because the included the “specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO” as required by Exergen Corp. v. Wal-Mart Stores, Inc. and the antitrust violation was adequately plead based on the alleged inequitable conduct and baselessness of the litigation. Id.
Chief Judge Leonard P. Stark recently considered the parties’ stipulation requesting the Court vacate its Claim Construction Opinion. Forest Laboratories, Inc., et al. v. Teva Pharmaceuticals USA, Inc., et al., Nos. 14-121-LPS, 14-686-LPS (D. Del. May 25, 2016). The Court held a 4-day bench trial in February 2016 and the 30-month stay of FDA approval for Defendant’s ANDA ended on June 21, 2016. Id. at 1. Judge Stark found that the “public interest in the orderly operation of the federal judicial system” weighed against vacatur, particularly considering that the Court’s Opinion held terms of several of the patents-in-suit indefinite and plaintiffs are asserting the patents in other litigation. Id. at 3-4. Vacating the Opinion would be “at the expense of the interests of other parties in other litigation and the Court itself.” Id. at 4.
In a recent Order, Judge Gregory M. Sleet granted plaintiffs’ motion to dismiss defendants’ counterclaim for invalidity and to strike defendants’ fourth and fifth affirmative defenses with prejudice. Teva Pharmaceuticals USA, Inc. v. Forest Laboratories, Inc., C.A. No. 13-2002-GMS (D. Del. June 16, 2016). Plaintiffs argued that “the court should dismiss the counterclaims and new affirmative defenses for invalidity because defendants . . . failed to obtain leave from the court before significantly amending its answer.” Id. at 2 n.1. Plaintiffs asserted that “allowing these counterclaims and affirmative defenses nearly two years into the litigation and after fact discovery has closed would cause prejudice and substantially delay the adjudication of this case.” Defendants, on the other hand, argued that “because the Plaintiffs chose to expand the scope of litigation by adding Forest Pharma to the case more than six months after the deadline to join parties and amend the pleadings, Plaintiffs cannot complain when Forest Pharma asserts defenses in response to the new allegations against it.” Id.
Judge Sleet found that the parties’ dispute needed to be “analyzed through the lens of Federal Rule of Civil Procedure 15(a)(3).” Id. As Judge Sleet explained, the parties’ “contest[ed] whether an answer in response to an amended pleading requires leave from the court if it addresses issues outside of the scope of the amended complaint.” Id. Judge Sleet rejected defendants’ argument that “when the Plaintiffs added a new party, the Defendants were permitted to amend the complaint as a matter of course under Rule 15(a).” Id. at 3 n.1. Judge Sleet rather found that defendants failed to explain “why adding Forest Pharma—a wholly owned subsidiary of Forest Labs—expanded the scope of its defenses or claims.” Id. As Judge Sleet noted, “the two defendants brought the new claims jointly, and none of the new claims uniquely apply to the new defendant.” In sum, Judge Sleet was “not persuaded that adding Forest Pharma as a new defendant expanded the scope of this case.” Id.
Judge Sleet finally summarized the court’s analysis as follows:
In Toshiba Samsung Storage Technology Korea Corporation v. LG Electronics, Inc., et al., C.A. No. 15-691-LPS (D. Del. June 17, 2016), Magistrate Judge Christopher J. Burke denied Defendants’ renewed motion to stay the case. The renewed motion sought to stay only the remaining portion of the case that had not already been stayed by prior order of the Court, which related to one asserted patent. The PTAB had instituted inter partes review as to some of the asserted claims of this patent. Id. at 2.
As to simplification of issues, while the Court acknowledged that there was overlap of issues in this litigation and in the IPR proceeding, it found that this factor did not favor a stay. There were more asserted claims that were not before the PTAB than were, and the IPR stood “to address a fairly circumscribed number of legal issues,” i.e. obviousness in light of only certain admitted prior art, as to the claims involved. Furthermore, “because [the unstayed patent] does appear to be fundamentally different than [the already stayed] patents in some ways, a non-trivial amount of discovery will likely be unique to that patent.” Id. at 6. On the other hand, the early stage of the case favored a stay. See id. at 6-7.
The Court concluded that “[t]he ‘undue prejudice’ considerations are mixed,” id. at 11, where the timing of the motion did not indicate “unduly prejudicial or unfair tactics are afoot,” id. at 8-9 (emphases in original), the long delay in Plaintiff’s ability to adjudicate its claims while the IPR proceedings completed, id. at 9-10, and where the parties were competitors “in a very crowded field” such that money damages could adequately compensate for infringement, id. at 10. The Court concluded that the most important subfactor was the harm the Plaintiff would face from a delay. Id. at 11. “Taking this into account, but noting that the other subfactors weigh in favor of a stay, overall the ‘undue prejudice’ factor [was] neutral.” Id.
Judge Richard G. Andrews recently granted plaintiff’s motion to dismiss defendant’s counterclaim seeking “Declaratory Judgment of lnvalidity and/or Unenforceability for Failure to Comply With the Rules Governing U.S. Stage National Entry of a PCT Application.” Nox Medical EHF v. Natus Neurology Inc., No. 15-709-RGA (D. Del. Jun. 20, 2016). In short, after filing the patent application at issue, the PTO notifed the applicant that the inventor oath or declaration was missing. Id. at 1. The applicant subsequently supplied the requested oath and declaration. Id. at 1-2. Years later, plaintiff filed a statement to correct inventorship, adding an additional inventor, and the PTO issued a Certificate of Correction. Id. at 2. Judge Andrews found that defendant’s counterclaim failed as a matter of law because the defects to the patent at issue were fixed by the Certificate of Correction issued pursuant to § 256, which provides that omitting inventors shall not invalidate a patent if the error can be corrected. Id. at 2-4.
Judge Richard G. Andrews recently reviewed the documentation provided by Jaguar in support of its request for fees. Vehicle Interface Technologies, LLC v. Jaguar Land Rover North America, LLC, Nos. 12-1285-RGA, 14-339-RGA (D. Del. June 15, 2016). Judge Andrews previously granted Jaguar’s motion for fees pursuant to 35 U.S.C. § 285. Jaguar sought $2,883,048 in fees and costs, calculated from June 2013 which was when Jaguar served its invalidity contentions. Judge Andrews found that fees should have been calculated beginning in October 2013, which was when VIT had to respond to interrogatories “by identifying claim limitations that it maintained were not present in the asserted prior art references.” Id. at 3-4. By that date, “VIT certainly had a reasonable opportunity to consider Defendants’ initial invalidity contentions and was on notice that [certain] prior art rendered VIT’s case objectively baseless.” Id. at 4. Judge Andrews also found that it was appropriate for Jaguar to seek fees for VIT’s appeal. Id. at 4-5. Regarding the “quantum” of reasonable fees, Judge Andrews found that the appropriate rates for Jaguar’s counsel should have been the “prevailing market rates of Delaware intellectual property attorneys.” Id. at 5-6. Judge Andrews also found the number of attorney hours requested were reasonable, but that Jaguar was not entitled to receive fees paid to its expert witnesses. Id. at 6-9.
Judge Richard G. Andrews recently reconsidered a ruling made at trial that the designated deposition testimony of a settled-out defendant’s expert was inadmissible hearsay. Sanofi v. Glenmark Generics Inc. USA, C.A. No. 14-264-RGA (D. Del. June 17, 2016). The Court explained that there was nothing unusual about the settlement that would suggest that it was aimed at procuring the expert’s absence from trial, and that the testimony therefore should have been admitted at least under the Rule 32 analysis. The Court expressed doubt, though, about the admissibility of the testimony under Rule 403, in part because anything helpful in the testimony would likely be “cumulative to whatever [the plaintiff’s own] experts testified to at trial.” However, because the Court’s ruling not to admit the testimony at trial resulted in an undeveloped record for purposes of the Rule 403 analysis, Judge Andrews decided that “the better course at this point is to tentatively admit the testimony. . . . The post-trial briefing will reveal whether it has any significant probative value. If it does not, I will strike it from the record. If it does, I will consider it.”
Judge Richard G. Andrews recently granted a motion by Samsung Display Company (“SDC”) to intervene in two cases where SDC-manufactured components formed the basis of a number of the plaintiff’s claims against the defendants (claims that, if successful, would require indemnification by SDC). MiiCs & Partners America, Inc. v. Toshiba Corp., C.A. No. 14-803-RGA and v. Funai Electric Co., Ltd., 14-804-RGA (D. Del. June 15, 2016). In considering the two elements of Rule 24 that were disputed, the Court found that SDC’s and the defendants’ interests diverged enough that SDC’s interests might not be adequately represented at trial absent intervention, in part because “SDC ‘is uniquely situated to understand and defend its own product.’” Id. at 3 (quoting Honeywell Int’l Inc. v. Audiovox Commc’ns Corp., 2005 WL 2465898, at *4 (D. Del. May 18, 2005)). With respect to the timeliness of SDC’s motion, the plaintiff complained that nearly two years had passed before SDC sought to intervene, warranting a denial of the motion under Rule 24. The Court rejected that argument, explaining that “for nearly eighteen of the twenty-one months after Plaintiffs filed their initial complaints, these cases progressed slowly or not at all. Most importantly, almost no ‘proceedings of substance on the merits have occurred’ in these cases.” Id. at 5 (quoting Mountain Top Condo. Ass’n v. Dave Stabbert Master Builder, Inc., 72 F.3d 361, 369 (3d Cir. 1995)).
In a recent Memorandum Order, Magistrate Judge Christopher J. Burke denied defendants Elekta Holdings U.S., Inc. (“Elekta Holdings”) and defendant Elekta Inc.’s motion to transfer venue to the United States District Court for the Northern District of Georgia. Varian Medical Systems, Inc. v. Elekta AB, et al., C.A. No. 15-871-LPS-CJB (D. Del. June 8, 2016). Plaintiff Varian Medical Systems, Inc. (“Plaintiff”) designs and manufactures medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton surgery and brachytherapy, and is the owner of U.S. Patent No. 6,888,919, which it asserts in this litigation. Plaintiff is a Delaware corporation with its principal place of business Palo Alto, California. Defendant Elekta Holdings is a Delaware corporation with its principal place of business in Atlanta, Georgia. Elekta Inc. is a wholly-owned subsidiary of Elekta Holdings, is a Georgia corporation, and has its principal place of business in Atlanta. Id. at 1-2.
Judge Burke found in this case that a weighing of the Jumara factors “does not produce a result that is ‘strongly in favor of’ transfer.” Id. at 22. Judge Burke explained that “nearly every factor is neutral—a result that simply underscores the reality that this case is one between truly national (and international) entities that have previously litigated against each other all over the globe.” Id. Judge Burke continued: “There is nothing surprising or particularly inconvenient about the fact that this new skirmish will go forward in Delaware: (1) the site of Plaintiff’s corporate home; (2) the site of the corporate home of one of the two U.S.-based Defendants; (3) a location that sits centrally located vis-a-vis the places of business of the various parties; and (4) a location close to some number of possible witnesses.” Id.
In Reckitt Benckiser Pharmaceuticals Inc., et al. v. Watson Laboratories, Inc., et al., C.A. No. 13-1674-RGA; v. Par Pharmaceutical, Inc., et al., C.A. No. 14-422-RGA (D. Del. June 3, 2016), Judge Richard G. Andrews issued a decision following a bench trial, in which the Court held that one patent-in-suit, while the Defendants’ ANDA products would infringe some of its asserted claims, was invalid. The Court further held the other two patents-in-suit were not invalid, that the Defendants’ ANDA products would infringe the asserted claims of only one of those patents. The patents in this case relate to drugs used for maintenance treatment of opioid dependence.
As to the invalidated patent, the Court held that the term “local pH” in certain claims was indefinite, where “there is no evidence as to a standard type of solvent, volume of solvent, or time at which pH is to be measured.” Id. at 15. The Court also held that the other asserted claims were obvious, but it rejected Defendants’ anticipation arguments. See id. at 16-26. The Court also rejected Defendants’ indefiniteness and obviousness arguments as to two other patents-in-suit, and, as noted above, found that the asserted claims of one of those patents to be infringed.