Chief Magistrate Judge Mary Pat Thynge recently issued a report recommending that a motion to dismiss a claim for joint infringement be granted. Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC, et al., C.A. No. 14-1006-RGA-MPT (D. Del. May 13, 2015). Judge Thynge explained that “to survive a motion to dismiss the claim of joint infringement, a plaintiff must plead facts sufficient to allow a reasonable inference that various parties perform all of the claimed steps; and one party exercises the requisite ‘direction or control,’ such that performance of every step is attributable to the controlling party.” Id. at 8. Judge Thynge found that the plaintiff’s allegations were sufficient to support an inference that all steps claimed in the patents-in-suit were carried out by defendants and various third parties. However, “[h]ere, plaintiff sets forth an unsupported proposition that Comcast and NBCU control or direct the third parties, despite conceding the issue of control and direction turns on whether the third parties had discretion to perform the claim limitations.” Id. at 11. In this case, Judge Thynge found that “plaintiff cannot plausibly allege the third parties were contractually obligated to perform all of the steps enumerated in plaintiff’s patents because the terms of the contract between defendants and the third parties are unknown to plaintiff.” Id. “Thus, it is merely possible—rather than plausible—that defendants control and direct the third parties.” Id. at 12.
In Cox Communications Inc, et al. v. Sprint Communications Company L.P., et al., C.A. No. 12-487-SLR (D. Del. May 15, 2015), Judge Sue L. Robinson granted Plaintiffs’ motion for partial summary judgment as to the indefiniteness of the term “processing system” found in four of the patents-in-suit owned by Defendants that share a specification. Defendants offered a proposed construction for this term, citing the opinion of its expert, while Plaintiffs’ expert opined that there was no known, well-understood meaning for this term and that the term was only described functionally. Id. at 6-7. The Court concluded that this term was indefinite, finding that there was no established meaning in the art for this term and that the” claim language and specification do not provide structural limitations for the ‘processing system’ and do not inform those skilled in the art about the scope of the invention with reasonable certainty.” Id. at 10-11.
In Polar Electro Oy v. Suunto Oy et al., C.A. No. 11-1100-GMS (D. Del. May 12, 2015), Judge Gregory M. Sleet granted defendant Suunto Oy’s (“Suunto”) motion to dismiss for lack of personal jurisdiction. Plaintiff Polar Electro Oy (“Polar”) filed this patent infringement lawsuit against defendants Suunto, Amer Sports Winter & Outdoor (“ASWO”), and Firstbeat Technologies Oy. Id. at 1. As Judge Sleet explained, “Polar is a company operating and existing under the laws of Finland, with its principal place of business in Kempele, Finland” and “Suunto is also a Finnish company, with its principal place of business in Vaanta, Finland.” Id. at 2. Further, “Suunto does not sell its accused products directly in the United States,” but rather contracts with “ASWO, a Delaware corporation . . . to distribute Suunto products in the United States.” Id.
Considering Suunto’s motion, Judge Sleet found that the Delaware long-arm statute was met under a theory of “dual jurisdiction” or “stream of commerce” jurisdiction, which “arises from at least partial satisfaction of subsections (1) and (4) of the Delaware long-arm statute.” Id. at 6. Specifically, Judge Sleet first found that Suunto had an “intent to serve the Delaware market.” Judge Sleet explained that “Suunto’s relationship with ASWO clearly demonstrates an intent to serve the United States market at large” and that “[a] non-resident firm’s intent to serve the United States market is sufficient to establish an intent to serve the Delaware market, unless there is evidence that the firm intended to exclude from its marketing and distribution efforts some portion of the country that includes Delaware.” Id. at 7. Judge Sleet further noted that “there is no dispute that Polar alleges patent infringement for Suunto products that are sold in Delaware.” Id. at 8.
Despite finding the Delaware long-arm statute satisfied, Judge Sleet nevertheless concluded that “due process considerations prevent the exercise of jurisdiction over Suunto.” Id. at 10. Judge Sleet noted that “releasing a product into the stream of commerce, without ‘something more,’ cannot furnish a basis to exercise jurisdiction.” Id. at 9. Judge Sleet then explained that “Suunto sells its products through a U.S. distributor,” ASWO, and that “[a]s Polar itself acknowledges, the goal of the distribution agreement is to increase Suunto’s market share in the United States at large, without any particular focus on Delaware (or any state for that matter).” Id. Judge Sleet concluded that “ASWO’s ultimate dealings with retailers in Delaware may have been foreseeable, but the court sees no evidence of intent–there is not ‘something more’ beyond placing the product into the stream of commerce.” Id.
Judge Sue L. Robinson recently denied defendants’ motion to partially stay this case pending inter partes review of four of the ten patents in suit. Intellectual Ventures I LLC v. Toshiba Corporation, C.A. No. 13-453-SLR-SRF (D. Del. May 15, 2015). Judge Robinson began the Court’s analysis by recognizing how the America Invents Act changed the “playing field” for patent disputes:
I start with the recognition that the instant litigation reflects a business dispute between patent owners and alleged infringers. Traditionally, most business disputes were, and should have been, resolved through a business solution; because businesses are really people, business solutions are not generally reached without the motivating force of a firm trial date. Of course, the traditional playing field for patent disputes has been dramatically altered by such legislation as the AIA and its far-reaching ramifications, including its intrusion into the courtroom and the exercise of judicial discretion, and the generation of a cottage industry for administrative review of patent validity.
Rather than resolving business disputes, we are now reviewing patents through the administrative lens of the PTO, which has had to increase its size by several thousand employees (a 31 % increase in personnel) to take on the tasks assigned by Congress. Consistent with its mandate, the PTAB has accepted 65% of the patent claims challenged through IPR, and has found 38% of those claims invalid. It perhaps is understandable, then, that I approach this exercise with a degree of cynicism. Nevertheless, with this context in mind, I will analyze the facts of record under the appropriate standard of review.
Id. at 3-5.
Turning to the motion to stay, Judge Robinson noted that because Intellectual Ventures’ core business is licensing patents, it would suffer undue prejudice if the case is stayed. Id. at 6. And, Judge Robinson found that Toshiba did not demonstrate “a clear case of hardship or inequity if the motion for stay is denied.” Id. Because Toshiba chose to challenge validity through an IPR proceeding it “cannot complain that it is being prejudiced by the dual track proceedings it initiated.” Id. Judge Robinson also found that a stay would not simplify issues because the technology at issue in the IPR patents overlaps with the patents not subject to IPR, so discovery would proceed regardless of a stay. Id. at 7. For that reason, and because the IPR proceedings would conclude prior to claim construction, the status of the case weighed against stay. “Rather than stay and fragment the litigation process, it makes imminent sense to proceed with the litigation and take whatever guidance and valuable analysis provided by the PTAB into account as is appropriate.” Id. at 7-8.
In Broadsoft, Inc. v. Callwave Communications, L.L.C., C.A. No. 13-0711-RGA (D. Del. Apr. 30, 2015), Callwave requested that Broadsoft’s supplemental invalidity contentions, served four months before the close of fact discovery, be stricken as untimely and as inadequate notice of its invalidity theories. Callwave maintained that the supplemental contentions were “actually late contentions because they present a theory which is based entirely upon facts and information that has exclusively been in the possession of Broadsoft since the beginning of the case.” Id. at 1. Special Master Saville denied the motion to strike, explaining that, as no trial date was set, allowing the supplemental contentions would not disrupt the trial schedule, and there was no evidence of bad faith or willfulness on Broadsoft’s part. Id. at 2. The Special Master also disagreed that allowing them would prejudice Callwave, and also cited “the inequity and somewhat illogical result if the evidence that allegedly shows Broadsoft’s product was on sale more than a year before Callwave’s invention dates was stricken.” Id. at 3.
Magistrate Judge Burke recently denied a motion to transfer to the Northern District of California after a full analysis of the Third Circuit’s Jumara factors.
Regarding the plaintiff’s choice of forum, the defendant argued that although the plaintiff is a Delaware LLC, the plaintiff had “misrepresented the location of its principal place of business” by listing a vacant building in Wilmington, Delaware in an “attempt to manipulate venue.” Judge Burke, however, found that the plaintiff had offered contradictory evidence and that “Defendant has not made a clear record indicating that this assertion was misleading or false. Nor has Defendant demonstrated that Plaintiff actually maintains its place of business in some other federal district.” Micro Design LLC v. Asus Computer Int’l, C.A. No. 14-837-LPS-CJB, Memo. Or. at 5-8 (D. Del. May 1, 2015). Further, Judge Burke explained that he was “not prepared to conclude that Plaintiff’s formation as a Delaware entity just over one month before filing suit, without more, constitutes the kind of manipulation of venue or inappropriate act that could cause this Jumara factor to weigh in favor of transfer. After all, and particularly as to Delaware, business entities choose their situs of incorporation for varied reasons, including the ability to sue and be sued in that venue. . . . Defendant has not demonstrated that Plaintiffs status as a Delaware LLC, even one of recent vintage, is anything other than the product of a legitimate, business-related choice.” Id. at 8-11 (internal quotations omitted).
Regarding other factors in the transfer analysis, the location of records, where the claims arose, the defendant’s forum preference, and the fact that the Northern District of California was the defendant’s site of incorporation and principal place of business all weighed in favor of transfer. Id. at 11-14, 19-20. Convenience of the parties, convenience of the witnesses, potential local interests, and public policy of the fora were neutral factors. Id. at 14-19, 24-26. Practical considerations that could make trial easy, expeditious, or inexpensive weighed against transfer due to related cases filed in the District of Delaware by the same plaintiff involving the same patents and technology. Id. at 21-24. Accordingly, Judge Burke found that the balance of these factors did not result “strongly in favor” of transfer and denied the motion.
Like the plaintiffs’ choice of forum, Judge Burke found that several other factors were not supported one way or the other by record evidence, and his view on such factors was accordingly limited to what could be inferred from the record before him. E.g. id. at 16-17.
Chief Judge Stark recently resolved a motion for summary judgment of no willfulness and various motions in limine in the lead-up to a trial in the litigation between Fairchild Semiconductor and Power Integrations.
Judge Stark determined that the first Seagate prong, the objectively high likelihood of infringement of a valid patent, was not satisfied and therefore the subjective prong and the ultimate question of willfulness could not go to the jury. Fairchild Semiconductor Corp., et al. v. Power Integrations, Inc., C.A. No. 12-540-LPS, Memo. Op. at 3 (D. Del. Apr. 23, 2015). The objective prong was not satisfied, Judge Stark explained, because Fairchild asserted reasonable non-infringement positions based on the Court’s claim construction and the fact that it had redesigned its products in a manner that Power Integrations had previously admitted would not infringe. Judge Stark found that these were, “at minimum, credible, reasonable non-infringement theories, and consequently the first prong of Seagate cannot be satisfied,” “even if the Court or a jury ultimately rejects Fairchild’s non-infringement theories” and “[r]egardless of whether [summary judgment of non-infringement] is ultimately granted or denied.” Id. at 1, 4. Judge Stark also rejected Power Integrations’ contention that Fairchild acted recklessly, explaining that the “implicit concession (in describing the new products as only ‘essentially,’ but not entirely, unchanged), the accused products are changed from what was found to infringe in the earlier case,” and therefore willfulness could not be proven on this record.
The same day, Judge Stark resolved numerous pre-trial motions in limine in addition to addressing various other pre-trial matters. His Honor granted the plaintiffs’ motion to preclude any reference to pending or completed reexamination proceedings, including both the non-final reexamination of plaintiff’s patent and the completed reexamination that found defendant’s patent valid. Fairchild Semiconductor Corp., et al. v. Power Integrations, Inc., C.A. No. 12-540-LPS, Memo. Or. at 1-2 (D. Del. Apr. 23, 2015). Judge Stark next denied without prejudice a motion to preclude impermissible expert testimony from lay witnesses during examination of inventors because His Honor found this to be “an issue best address in specific circumstances as they arise during trial.” Id. at 2. Judge Stark also precluded testimony from the defendant’s prior expert from the prior litigation between the parties, testimony that may be “an attempt to back door infringement or validity contentions” that the Court had previously stricken, and testimony regarding a prior jury’s finding of direct infringement of a patent of which defendant was accused of inducing infringement. Id. at 3-5.
Finally, Judge Stark granted a motion to preclude testimony that the accused products in this case are the same as those found to infringe in earlier litigation because the risk of unfair prejudice was too high. As explained above, the Court granted summary judgment of no willfulness, and the evidence was therefore not necessary for willfulness. His Honor also explained that the probative value was minimal with respect to inducement because the evidence related to a “different product used at a different time” and was “substantially outweighed by the risk of unfair prejudice arising from the inflammatory nature of PI’ s ‘copying’ evidence.” Finally, the evidence was not relevant to secondary considerations of obviousness because there was no obviousness defense with respect to the patent at issue. Id. at 2-3.
Judge Gregory M. Sleet recently denied Merck’s motion to transfer a case to federal court in New Jersey. Bristol-Myers Squibb Co., et al. v. Merck & Co., Inc., et al., C.A. No. 14-1131-GMS (D. Del. Apr. 29, 2015). Notably, the Court rejected Merck’s argument that the convenience of witnesses favored transferring the case to New Jersey, explaining that Merck’s “laundry list of its own employees . . . ‘are not considered by a court conducting venue transfer analysis because the parties are obligated to procure the presence of their own employees at trial.'” Id. at 2 n.1 (quoting Nilssen v. Everbrite, Inc., 2001 WL 34368396, at *2 (D. Del. Feb. 16, 2001)). The Court discounted the value of time-to-trial statistics on the basis that they are “somewhat speculative due to the inherent unpredictability in patent litigation,” but found that statistics showing that the time to trial in New Jersey would be longer than in Delaware weight slightly against transfer.
In Triplay, Inc., et al. v. Whatsapp Inc., C.A. No. 13-1703-LPS (D. Del. Apr. 28, 2015), Magistrate Judge Christopher J. Burke considered recommended that Defendant’s motion to dismiss due to lack of patentable subject matter be granted as to one claim of the patent-in-suit, and denied without prejudice as to the remaining claims. The patent-in-suit is U.S. Patent No. 8,332,475 and entitled “Messaging System and Method,” and is directed to “a field of electronic messaging and, in particular, to cross-platform messaging.” Id. at 2.
As a threshold issue, while Defendant sought to invalidate all claims of the patent-in-suit, the Court declined to address claims that had not been the focus of argument and that had not been “clearly asserted” against Defendant. Id. at 12. The Court rejected Defendant’s position that it need not separately evaluate the invalidity of every claim “as long as the Court analyzes one claim that is ‘sufficiently similar’ to others,” observing that Defendant had not shown the key claims (namely, claims 1 and 12) to be “representative” and that “Defendant bears the burden to demonstrate that its asserted Section 101 defense is well taken as to each claim.” Id. at 13.
The Court concluded that claims 1 and 12 were directed to an abstract idea. Similar to the claims in Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed Cir. 2014), “the majority of the limitations of the claims at issue . . . describe only an abstract idea . . . lacking any concrete or tangible application, and their articulation accounts for much of the claim’s language and limitations overall.” Id. at 20 (internal quotation marks omitted). The Court found the case distinguishable from DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), explaining that “the clear majority of the claim language that is at issue here is not ‘necessarily rooted in computer technology[,]’ nor in the technology of electronic communications devices. Instead, the majority of that claim language speaks to an abstract idea (converting and forwarding messages, so that the messages are sent in a format and layout in which they can be received by a recipient) that has long been used to resolve problems in the area of communications (electronic and otherwise), and that can potentially be applied in just about any communications context, depending on the means of communication.” Id. at 25.
As to the method claim (12), the Court then concluded that this claim was invalid as lacking an inventive concept. See id. at 28-36. However, the Court found that the system claim (1), although it “largely mirrors the structure of claim 12,” required claim construction on its additional “access block” and “media block” elements, which the Court determined could add significant limitations to render the claims patent eligible, before determining patent eligibility under Section 101. See id. at 38-40.
Accordingly, the Court recommended that the motion be granted as to claim 12 and denied without prejudice as to the remaining claims of the patent-in-suit.
Update: On August 10, 2015, Chief Judge Leonard P. Stark adopted Magistrate Judge Burke’s Report and Recommendation over the parties’ objections, with the exception of the recommendation to deny the Motion to Dismiss without prejudice to renew as to all claims other than claim 12. The Court granted the motion as to claim 12, and the motion “remain[ed] pending” as to all remaining claims. Memorandum Order at 2. Defendant had objected to Judge Burke’s findings that claim 1 had to be construed before determining patent ineligibility and that “the other claims of the ‘475 patent could not be assessed given the parties’ lack of attention to them.” Memorandum Order at 1. To that end, the Court overruled these objections, and further instructed the parties to submit letter briefs to address any claim construction issues to address before Defendant renewed its motion as to claim 1, and also requested letter briefing on “whether any of the dependent claims of the ‘475 patent include limitations that would make it inappropriate to analyze claims 1 and 12 as representative claims for purposes of deciding Defendant’s Motion to Dismiss.” Id. A copy of Chief Judge Stark’s Order is below.
Judge Robinson recently denied a motion to dismiss filed by a declaratory judgment defendant and patent owner. The plaintiff, Corning Inc., filed a declaratory judgment suit in Delaware seeking judgment that it does not infringe the defendant’s, DSM, patents and that those patents are invalid. DSM responded with a motion to dismiss, arguing that Corning’s claims arise from the parties’ supply agreement, which contained an Illinois forum selection clause. Corning responded to the motion by arguing that its patent claims do not relate to the supply agreement and are therefore not governed by that clause. DMS then filed a suit asserting both breach of contract and patent infringement claims in the Northern District of Illinois. Corning Inc. v. DSM Desotech, Inc., et al., C.A. No. 14-1081-SLR, Memo. Or. at 1-2 (D. Del. Apr. 16, 2015).
Judge Robinson denied the motion to dismiss, finding “no dispute that the breach of contract claims belong in Illinois . . . [or] that Corning filed its declaratory judgment action in Delaware first and that, as such, DSM’s patent infringement claims are compulsory counterclaims in the Delaware case.” Id. at 2. Thus, there were “no overlapping substantive issues between the breach of contract claim and the patent infringement and invalidity claims . . . [and the] mere possibility of . . . a factual overlap . . . supports neither a motion to dismiss nor a motion to transfer.” Id. at 3.