In a recent oral order, Judge Leonard P. Stark made a number of rulings relating to plaintiff’s motion for a preliminary injunction and the hearing on the motion. M/A-Com Technology Solutions Holdings, Inc. v. Laird Technologies, Inc., C.A. No. 14-181-LPS (D. Del. May 28, 2014). The Court denied the defendant’s requests to postpone and to take depositions prior to the hearing, explaining that “the circumstances giving rise to the preliminary injunction motion justify maintaining the case on the present schedule.” The Court also denied the defendant’s motion to strike supplemental declarations and arguments from plaintiff’s reply. “The Court is further persuaded that Plaintiff’s reply brief properly responded to Defendant’s answering brief, that Plaintiff could not anticipate all of the arguments Defendant would make in its answering brief, and Plaintiff is entitled to use evidence obtained during discovery to support its preliminary injunction motion.” The Court did grant defendant’s request to file a sur-reply brief in response.
Judge Richard G. Andrews recently dismissed declaratory judgment FRAND counterclaims in two related actions against ZTE and Nokia for lack of subject matter jurisdiction. Interdigital Communications, Inc., et al. v. ZTE Corp., et al., C.A. No. 13-009-RGA; Interdigital Communications, Inc., et al. v. Nokia Corp., et al., C.A. No. 13-0010-RGA (D. Del. May 28, 2014).
Both defendants had previously participated in licensing negotiations with plaintiff, but the negotiations had broken down or were delayed. The FRAND (fair, reasonable, and non-discretionary terms) declaratory judgment counterclaims in both cases requested a finding that plaintiff did not offer a FRAND rate to the defendants during these negotiations, and also asked the Court to determine a FRAND rate. Nokia’s counterclaims also requested a determination of FRAND license terms. Id. at 3.
Plaintiff moved to dismiss both sets of counterclaims, arguing that their adjudication would be of no practical help or utility, and for that reason, the Court lacked subject matter jurisdiction. Specifically, “if the Court were to determine a FRAND rate for the hundreds of patents brought before it as part of the declaratory judgment action, there would remain disputes about whether particular patents are or are not essential. Furthermore, [plaintiff] argues that neither Nokia nor ZTE have made firm commitments to sign a license based on what the Court determines would be a FRAND rate, but instead have only ‘averred in their counterclaims that their willingness to pay under a license is contingent on findings of validity, essentiality, and infringement of [plaintiff’s] patents.’” Id. at 4-5 (citations omitted). Defendants countered that determination of a FRAND rate would, in fact, be useful, noting that Third Circuit precedent does not require a declaratory judgment to resolve all issues for there to be subject matter jurisdiction. They also argued that the Court’s determination would “alleviat[ e] the uncertainty, insecurity, and controversy between the parties with respect to [plaintiff’s] right to a FRAND royalty.” Id. at 5. ZTE also argued that it was “committed” to accepting a license at a determined FRAND rate, regardless of finding on infringement or validity. Id. at 5-6.
However, the Court was “far from convinced that the trial that would be necessitated by the declaratory judgment would serve any useful purpose.” Id. at 6. First, it was unclear how the Court could enforce its determined FRAND rate; instead, the rate would only “give a data point from which the parties could continue negotiations.” Id. at 6. Second, determining this rate would not necessarily lead to a patent license because there were other license issues to negotiate between the parties, any of which could hold up resolution. Id. at 6. The Court also found that it was “highly dubious” that it could determine a FRAND rate efficiently, “considering that there are 500 or so possibly relevant patents.” Id. Therefore, finding a FRAND rate would have little utility and serve little to no useful purpose.” Id.
As to the additional request for the Court to determine whether plaintiff had offered a FRAND rate, the Court also concluded this exercise had “little to no useful purpose.” Id. at 6-7. Once a FRAND rate was determined, “the Court would need to determine whether such offer was actually made. Similar to the determination of the FRAND rate itself, the only purpose of this would be to alter the current negotiating power between the parties.” Id. at 7. Furthermore, “any impact that this determination would have on the patents-in-suit is encompassed within the multitude of affirmative defenses that both Nokia and ZTE assert.” Id. The asserted defenses that addressed FRAND issues included patent misuse, breach of contract, unclean hands, and the existence of an express or implied license. Id. at 7 n.2.
As a result, the Court granted plaintiff’s motion to dismiss the FRAND counterclaims for lack of subject matter jurisdiction.
In Viiv Healthcare Company, et al. v. Mylan Inc., et al., C.A. No. 12-1065-RGA (D. Del. May 23, 2014), plaintiffs requested leave to submit the testimony of two of its 30(b)(6) witnesses by deposition in lieu of live trial testimony. Both witnesses resided more than 100 miles from the location of trial, although counsel did acknowledge that, should their request be denied, it would be possible to bring the witnesses to testify live. Id. at 2.
Under these circumstances, the Court denied plaintiffs’ request. First the Court noted that “[a]side from showing that the witnesses reside more than 100 miles from the location of the trial, Plaintiffs have failed to demonstrate why they have been unable to procure the witness’s presence for live testimony at trial. Parties are not required to take active steps to procure witnesses who would otherwise not be within 100 miles of the location of the trial. . . . However, this failure to procure may be taken into account when courts exercise their discretion regarding whether to admit the deposition testimony.” Id. at 2.
Additionally, even if the witnesses were unavailable under FRCP 32(a)(4)(B), the Court expressed concerns about admitted 30(b)(6) deposition testimony’s conflict with the rules of evidence. The Court explained that “[w]here Rule 30(b)(6) testimony is sought to be admitted at trial in lieu of live testimony pursuant to Rule 32(a)(4), it may be in conflict with both Rule 32(a)(I)(B) and Federal Rule of Evidence 602” and a Court must weigh the purposes of Rule 30(b)(6) against “the real dangers of admitted testimony based on hearsay.” Id. at 3 (citations omitted). Here, one witness’s testimony had relied at least in part on another employee’s knowledge, and thus “there is a substantial question about the reliability of his testimony.” Id. at 4. The other witness’s “testimony was also taken pursuant to 30(b)(6), and because there has been no evidence regarding the extent of his personal knowledge, there are similar issues of reliability.” Id. The Court distinguished the present case from cases in which 30(b)(6) deposition testimony was allowed because these were party-witnesses and the “actual scope of either” witness’s personal knowledge had not been established. See id. at 3-4.
Finally, the Court noted that plaintiffs could renew their request at trial when the court “may have more context to evaluate the request.” Id. at 4-5.
In a recent case, plaintiff moved for voluntary dismissal shortly after the defendant filed its answer. Arunachalam v. Fulton Financial Corp., C.A. No. 13-1333-RGA (D. Del. May 28, 2014). Defendants refused to stipulate to dismissal, arguing that because plaintiff surrendered standing after the litigation was initiated, dismissal should be conditioned on payment of the fees defendant incurred in defending against the complaint. Id. at 1. Judge Andrews granted plaintiff’s motion without an award of fees. Judge Andrews noted that it did not approve of plaintiff’s conduct “in not dismissing the lawsuit once she surrendered standing to bring it” (id. at 1 n.1); but fees were not appropriate because dismissal was sought shortly after defendants answered the complaint, and the fees would likely have been incurred even if plaintiff voluntarily dismissed the suit when the patents were transferred in November 2013. Id. at 1-2. Moreover, a new lawsuit with a plaintiff who has standing had been filed and the expenses will not be “redundantly incurred” in the new suit. Id. at 2.
Judge Richard G. Andrews recently considered plaintiffs’ motion to strike and dismiss defendants’ defenses and counterclaims related to inequitable conduct. Alza Corp., et al. v. Par Pharms, Inc., et al., C.A. No. 13-1104-RGA (consolidated) (D. Del. May 27, 2014). Plaintiffs argued that defendants did not sufficiently plead “who” committed the inequitable conduct as required by Exergen Corp. v. Wal-Mart Stores, 575 F.3d 1312 (Fed. Cir. 2009) and its progeny. Instead, defendants’ referenced only “the Applicants,” a term “loosely defined as named inventors or identified inventors or one or more of their agents or attorneys or other persons involved in the prosecution of the applications including the Prosecution Attorneys.” Id. at 2. Judge Andrews agreed that that defendants did not adequately plead “who” even though the pleading did appear to contain adequate facts: “The insufficiency of the present allegations is principally that they allege a mishmash of facts without sorting them out in relation to particular acts of particular individuals.” Id. Judge Andrews granted plaintiffs’ motion, but with leave to allow defendants to amend to correct the insufficiency.
At a recent pretrial conference, Judge Richard G. Andrews denied the parties’ motions in limine. Fresenius Kabi USA, LLC v. Dr. Reddy’s Laboratories, Ltd., et al., C.A. No. 13-925-RGA, C.A. No. 13-1015-RGA (D. Del. May 23, 2014). One of defendants’ motions in limine asked the court to not apply to infringement under the Doctrine of Equivalents the Federal Circuit’s decision in Sunovion Pharm., Inc. v. Teva Pharm. USA, Inc., 731 F.3d1271 (Fed. Cir. 2013). Judge Andrews denied the request:
Defendants point out that Sunovion was a much clearer case of infringement than this one, but that does not warrant disregarding the law of the Federal Circuit. There the Court held that “any so-called certification pledging not to infringe cannot override the conclusion that when a drug manufacturer seeks FDA approval to market a generic compound within the scope of a valid patent, it is an infringement as a matter of law.” Sunovion, 731 F.3d at 1280. The Court did not say “a generic compound which literally infringes” a valid patent. The Doctrine of Equivalents is “within the scope” of a valid patent. Furthermore, Sunovion is not the only case directing that an ANDA specification guide the question of infringement. See, e.g., Abbott Labs. v. TorPharm, Inc., 300 F.3d 1367, 1373 (Fed. Cir. 2002).
Id. at 1-2.
In a recent order, Chief Judge Gregory M. Sleet denied defendants’ motion to dismiss plaintiff’s claims for induced, contributory, and willful infringement for failure to state a claim. Lifescreen Sciences LLC v. C.R. Bard, Inc., C.A. No. 13-129-GMS (D. Del. May 22, 2014). Specifically, Judge Sleet found that plaintiff’s complaint sufficiently pleads induced and contributory infringement, alleging that defendants provide “its Meridian® Vena Cava filter – which is not a staple of commerce that is suitable for substantial non-infringing use – along with promotional and instructional materials to its customers and end-users.” Judge Sleet further explained that plaintiff alleges that defendants’ end-users themselves directly infringe by, inter alia, “using the infringing medical devices.” Further, while Judge Sleet noted that defendants had knowledge of the patents-in-suit at least upon service of the Complaint, plaintiff also alleges that defendants had knowledge prior to the filing on the complaint based on “citation to [the] patents-in-suit as prior art during the prosecution of its own patents in the same field of technology.” Judge Sleet thus concluded that the complaint sufficiently pleads willful infringement, given defendants continued infringing activity despite knowledge and notice of the patents-in-suit. Id. at 2 & n.1
Chief Judge Gregory M. Sleet recently denied motions to transfer to various districts in a series of related actions against Endologix, W.L. Gore, Medtronic, Cook Incorporated, and C.R. Bard. E.g., Lifeport Sciences LLC v. Endologix, Inc, C.A. No. 12-1791-GMS (D. Del. May 22, 2014). “[T]he District of Delaware is uniquely positioned to resolve the related patent infringement actions.” Id. at 3. At least the case against W.L. Gore, a Delaware corporation with a Delaware principal place of business, would have to stay in Delaware , and plaintiff had asserted the most patents against this defendant; there was significant overlap between the patents asserted in this action and the patents asserted in actions involving defendants moving to transfer. Id. at 3 n.2. As a result, transferring some of these cases would “require identical patents to be litigated in two separate courts, which would increase the burden on the judiciary and relevant third-party witnesses. In addition, all the time and cost efficiencies of litigating related actions together, such as coordinating discovery and depositions will be lost, and replaced with the risk of inconsistent claim constructions, duplicative discovery, and duplicative costs.” Id. As a result, the Court denied the motions to transfer in the Endologix, Medtronic, and Cook actions.
The 2014 FBA Annual Luncheon will be held on Wednesday, June 11, 2014, in the Gold Ballroom at the Hotel DuPont. Registration will begin at 11:30, and lunch will begin at noon.
This year’s annual luncheon will honor the tenures of outgoing Chief Judges of the District Court and Bankruptcy Court, Hon. Gregory M. Sleet and Hon. Kevin Gross; as well as the transition to incoming Chief Judges, Leonard P. Stark and Brendan L. Shannon.
The cost of the event is $60 per person for FBA members (or $450 for a reserved table of 8); $50 per person for public-sector FBA members (or $360 for a reserved table of 8); and $75 per person for non-FBA members.
RSVP by June 4, 2014, to Amy Vari, at firstname.lastname@example.org (302-298-0706). You may send checks made payable to the Federal Bar Association to Amy at:
Shaw Keller LLP,
300 Delaware Avenue
Wilmington, DE 19801
We hope to see you there!
Judge Richard G. Andrews recently denied a defendant’s motion for leave to amend its answer to assert invalidity counterclaims. M2M Solutions LLC v. Sierra Wireless America, Inc., et al., C.A. No. 12-30-RGA (D. Del. May 15, 2014). Judge Andrews acknowledged that leave to amend under Rule 15 should be granted “when justice so requires,” but explained that in this case the defendant also had to comply with the scheduling order entered under Rule 16. Here, the defendant did not move to amend until more than 12 months after the scheduling order’s deadline for amended pleadings. The Court found that the defendant “failed to show that the Court’s Scheduling Order could not ‘reasonably be met despite  diligence’ on [defendant’s] behalf.” Id. at 2. The motion was therefore denied pursuant to Rule 16.
The Court explained that the defendant asserted mirror image invalidity affirmative defenses in a timely manner, and found no reason why the defendant could not have alleged its invalidity counterclaims at that time. Id. As a result, Rule 16 aside, Judge Andrews explained that denial would also be appropriate under Rule 15, because the defendant unduly delayed filing a motion for leave to amend. Id. at 3.