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In a recent Memorandum Order, Judge Richard G. Andrews denied four motions by plaintiff to exclude expert testimony, and granted one in part. AVM Technologies, LLC v Intel Corp., C.A. No. 15-33-RGA (D. Del. Apr. 29, 2017).  In support of two of the motions that Judge Andrews denied, plaintiff argued that the expert reports were “untimely and . . . prejudicial.”  Id. at 3, 5.  Judge Andrews disagreed, and noted that “[t]his is not an appropriate issue for a Daubert motion.”  Id. As to one of those motions, Judge Andrews explained that “if Plaintiff suffered the severe prejudice it claims to have suffered, it should have brought this issue to my attention at the time the report was filed. The . . . report addresses a narrow issue, is only six pages long, was served prior to [the expert’s] deposition, and serves as a response to Plaintiff’s expert’s reply report.” Id. at 3. Judge Andrews provided a similar explanation for the other such motion. Id. at 5-6.

As to the motion that Judge Andrews granted in part, Judge Andrews explained that the court would exclude “testimony regarding the Hitachi litigation as it is unnecessary to an assessment as to the parties’ relative bargaining position during the hypothetical negotiation, and, as I have said elsewhere, incredibly prejudicial.” Id. at 4. Judge Andrews also excluded testimony “as to Plaintiff’s litigation funding agreements.” On this point, Judge Andrews observed:

These agreements are not patent licensing agreements and are not otherwise relevant to the hypothetical negotiation between the parties. The best that can be said about litigation funding agreements is that they are informed gambling on the outcome of litigation. They are so far removed from the hypothetical negotiation that they have no relevance. I further note that if they were determined to have some marginal relevance, that I would exclude them under Rule 403 as their probative value is more than substantially outweighed by the danger of unfair prejudice to AVM and of confusing the issues, as their introduction would just invite a sideshow on the economics of patent litigation.

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Judge Robinson recently considered defendants’ request to compel plaintiff to produce documents identified on plaintiff’s privilege log.  Intellectual Ventures I, LLC v. Toshiba Corp., et al., No. 13-453-SLR.  Judge Robinson reviewed the documents in camera and denied the request finding that the documents “all involve communications to lawyers seeking legal advice.  Plaintiff’s business model does not change the character of the communications at issue.”

Intellectual Ventures I, LLC v. Toshiba Corp., No. 13-453-SLR (D. Del. Apr. 28, 2017)

 

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In a recent Memorandum Order, Judge Richard G. Andrews denied plaintiff’s motion to strike expert testimony on the question of utility and motion for partial summary judgment on defendant’s utility defense. AVM Technologies, LLC v. Intel Corp., C.A. No. 15-33-RGA (D. Del. Apr. 27, 2017).

Plaintiff’s objection to the testimony of defendant’s expert in its motion to strike was on the grounds of “reliability.” Plaintiff contended that the expert “did not perform any analytical analysis showing the benefits or costs in any particular circuit,” and that the expert’s conclusion that a design engineer would not practice the invention was “speculat[ion] without support.” Id. at 3. Judge Andrews rejected these arguments, and found that plaintiff failed to show that the expert’s opinions were unreliable. Judge Andrews explained that “there is no reason an expert cannot rely on analysis performed by other experts,” as defendant’s expert had done. Id. at 3. Judge Andrews further explained that the expert’s opinion was “based on decades of experience in the field,” and could hardly be characterized as “speculation without support.” Id. at 3-4.

Denying plaintiff’s motion for partial summary judgment on defendant’s utility defense, Judge Andrews found that defendant raised a genuine issue of material fact as to whether plaintiff’s claimed invention satisfies the requirement of utility under 35 U.S.C. § 101. Id. at 4-6. As Judge Andrews explained, the test for substantial utility is whether “one skilled in the art can use a claimed discovery in a manner which provides some immediate benefit to the public.” Id. at 5. Defendant argued that the invention “does not provide the benefit promised in the patent,” and provided sufficient evidence to establish a genuine issue of material fact. Id. at 6.

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Judge Andrews has issued several orders in this litigation between AVM Technologies and Intel, which is approaching trial. In one order, Judge Andrews addressed whether Intel’s reverse doctrine of equivalents theory should be decided by a jury or the Court. After considering authority submitted by the parties that supported both positions, Judge Andrews determined that the issued should be submitted to the jury and “[i]f necessary, I will also make a determination in the alternative on the assumption that it is a question for the Court.” AVM Techs, LLC v. Intel Corp., C.A. No. 15-33-RGA, Memo. Or. at 1-2 (D. Del. April 29, 2017).

In another order, Judge Andrews determined that Plaintiff AVM Technologies could proceed with evidence at trial on its reasonable royalty theory because although the “disclosures and interrogatory answers may be inadequate . . . I do not think AVM acted willfully or in bad faith . . . [and] I am not persuaded that there is incurable prejudice to Intel by allowing Mr. Tran to testify [because] Intel has deposed Mr. Tran extensively on these subjects and there is nothing that AVM is proposing to present at trial (or that I will allow to be presented) that was not already disclosed. The proposed testimony and evidence are not new to Intel. On the whole, the Pennypack factors weigh in favor of admitting the testimony.” AVM Techs, LLC v. Intel Corp., C.A. No. 15-33-RGA, Memo. Or. at 1-2 (D. Del. April 30, 2017). Judge Andrews also found that AVM should be permitted to call Intel’s expert witness to testify on the issue if Intel did not call the expert. The Court further ruled that “if AVM does not put on an expert computation of damages, AVM cannot make arguments based on non-expert testimony that it could make based on expert testimony.” Id. at 2-4. These rulings stemmed from Judge Andrews’ previous exclusion of certain damages evidence, which left only limited testimony, a situation the Court characterized as: “‘Shoot for the moon, but remember that if you miss, you will be floating off into the inky blackness of space with no hope of survival or rescue.’ AVM shot for the moon, and, in my opinion, missed. The question now is whether it can survive. I think the answer is yes.” Id. at 1.

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Judge Gregory M. Sleet recently transferred a case to the Central District of California, finding that all but two Jumara factors weighed in favor of transfer.  Blackbird Tech LLC v. TuffStuff Fitness, International, Inc., C.A. No. 16-733-GMS (D. Del. Apr. 27, 2017).  Judge Sleet explained that the plaintiff’s forum choice weighed in favor of maintaining the litigation in Delaware, but it did not warrant maximum deference because “Delaware is not its ‘home turf’ or principal place of business.”  The Court found that the convenience of witnesses weighed against transfer, but only slightly.  However, “several factors counsel transfer:  the defendant’s choice of forum, convenience of the parties, location where the claim arose, the location of relevant books and records, and court congestion.”  With respect to court congestion, the Court noted that the time to trial in the Central District of California was roughly five months shorter than that in Delaware, and the overall disposition time in the Central District of California was roughly four months shorter than in Delaware.

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In a recent order, Judge Richard G. Andrews denied a plaintiff’s attempt to introduce new asserted claims that the plaintiff did not include in its earlier preliminary list of asserted claims.  Acceleration Bay LLC v. Activision Blizzard, Inc., C.A. No. 16-453-RGA (D. Del. Apr. 13, 2017).  The Court explained, “‘Preliminary’ refers to time.  It does not mean ‘subject to change at whim.’  As Defendants point out, the goal is to narrow the case into something that could be triable.  When one side or the other seeks to replace newly-identified weaklings with more robust claims, that side is going in the wrong direction.”  However, Judge Andrews explained that such substitution could potentially be permitted following a showing of good cause, which neither addressed during the dispute.  Therefore, the Court explained, “while Plaintiff is not permitted to substitute on this record, I make this ruling without prejudice to Plaintiff seeking, now or at a later time, to demonstrate good cause.”

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Judge Richard G. Andrews recently considered the motions in limine included in the pretrial order filed in advance of trial.  AVM Technologies LLC v. Intel Corporation, No. 15-33-RGA (D. Del. Apr. 19, 2017).  Judge Andrews granted AVM’s motion in limine to exclude references to decisions or orders from plaintiff’s prior lawsuits and reserved decision on whether to preclude the use of testimony of AVM’s expert from prior litigation, who are not experts in this case.  Judge Andrews determined that the probative value of any prior litigation evidence would be substantially outweighed by unfair prejudice.  Id. at 1-2.  Regarding the expert testimony, Judge Andrews determined that the testimony might be permissible, “with the proviso that the experts cannot be identified as being AVM’s experts in prior litigation.”  Id. at 2.  Ultimately, Judge Andrews reserved decision until he could review the proposed testimony and discuss the issue at the upcoming pretrial conference.  Id.

Judge Andrews also granted Intel’s motion in limine to exclude evidence that the circuit patented in Intel’s patent copies the asserted patent.  Id. at 4.  Judge Andrews noted that although AVM argued “that the ‘941 patent and related testimony show that Intel ‘knowingly employed delay and simultaneous activation’ in the accused circuits[,]” AVM did not actually allege that the circuit in question is accused of infringement or that its experts have opinions regarding the circuit.  Id.

UPDATE:  Judge Andrews reviewed the proposed testimony regarding the expert testimony from prior litigation.  Judge Andrews excluded the testimony finding that it was cumulative and unfair.    Technologies LLC v. Intel Corporation, No. 15-33-RGA (D. Del. Apr. 28, 2017).  “A deposition of this sort, that is, of an expert expected to testify at a trial six months later, is one-sided.  It is mostly a cross-examination, with no direct, and with little incentive for redirect.”  Id.at 2.  Moreover, Judge Andrews determined that “there is substantial risk that the jury will understand the testimony as indicating inconsistency in AVM’s positions.  I think it is clear that an independent expert . . . is not an agent of AVM.  Thus, his testimony cannot be offered to prove AVM’s inconsistency.  Clearly, though, that is the main reason intel wants to offer the evidence.”  Id.  (internal citations omitted).

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In AVM Technologies, LLC v. Intel Corporation, C.A. No. 15-33-RGA (D. Del. Apr. 17, 2017), Judge Richard G. Andrews granted Plaintiff’s motion for summary judgment as to issue preclusion and denied Defendant’s motion for summary judgment as to no damages based on issue preclusion. A prior litigation between the same parties and before Judge Andrews included a grant of Defendant’s motion for summary judgment of no damages, based on Plaintiff’s inability to prove damages as to the particular accused products in the prior case.

Defendant’s issue preclusion argument for this case was “based on its contention that Plaintiff ‘previously sought a lump-sum payment that would compensate it for all alleged infringement of the ‘547 patent by Intel, both past and future.’ According to Defendant, this case presents the same issue because Plaintiff is again seeking a reasonable royalty payment for infringement of the ‘547 patent. If Plaintiff had successfully won on damages in [the first case], Defendant contends, Plaintiff would not be able to seek damages for infringement of the same patent in the instant case.” Id. at 2.  But the Court framed the “issue” in question for collateral estoppel purposes more narrowly than Defendant: “It was whether Plaintiff had sufficient evidence of damages to avoid summary judgment on its suit against two particular accused products. Had the case gone to the jury, and had the jury awarded a lump sum, [the Court] would now have to decide whether the jury’s damages verdict covered non-accused products. But the jury did not have a chance to pass on that, and neither did [the Court].” Id. at 2-3.

Accordingly, the Court concluded that the damages issues between both cases were not identical, and declined to apply issue preclusion against Plaintiff. Id.

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Judge Andrews recently granted a motion to dismiss for lack of patentable subject matter directed to a patent that included the following representative claim:

1. A method of determining a recovery state in a data stream, comprising:
receiving a compressed data stream;
detecting a compression block boundary in the compressed data stream;
detecting an archive block boundary in the compressed data stream;
detecting a file boundary in the compressed data stream; and
in response to the detection of the compression block boundary, the archive block boundary, and the file boundary, saving a recovery state for the compressed data stream;
wherein the recovery state includes a position of the compression block boundary, and a position of the file boundary.

Judge Andrews found this patent was “directed to the abstract idea of receiving, detecting, and storing information” because “as the Federal Circuit has held numerous times, collecting information is ‘within the realm of abstract ideas’” and “[t]his is precisely the kind of claim that the Federal Circuit has found to be an abstract idea.” D&M Holdings Inc., et al. v. Sonos, Inc., C.A. No. 16-141-RGA, Memo. Op. at 6-9 (D. Del. Apr. 18, 2017). Judge Andrews also found a lack of specificity or inventive concept in the claims, leading to his decision to grant the Section 101 motion.

On another patent-in-suit, however, Judge Andrews found that the patent was not ineligible and “agree[d] with Plaintiffs that Defendant has oversimplified and ignored specific limitations in this claim. This claim is more specific than claim 1 of the ’435 patent and calls for more than simply receiving, manipulating, and storing data.” Id. at 12-14.

On a third patent-in-suit, Judge Andrews “decline[d] to opine on” patentability because “construction of at least some of the disputed terms could impact the § 101 analysis, particularly as there is a dispute over whether the structure in several of the means-plus-function terms, which are found in claims that were not briefed or argued, is a specific device or merely a general purpose computer.” Id. at 14-16.

Finally, a fourth patent-in-suit was directed to an abstract idea without an inventive concept, in part because Judge Andrews “agree[d] with Defendant that this claim is directed to the automation of a process that can be (and has been) performed by humans.” Id. at 16-19. The representative claim at issue for this patent read:

18. A method for controlling a receiver having a plurality of receiver connections, the method comprising:
querying a user to select a receiver connection of the plurality of receiver connections to correspond with each encoding format of a plurality of encoding formats;
retrieving media unit data that identifies an encoding format of a playable piece of media selected to be played by the receiver, wherein the identified encoding format is one of the plurality of encoding formats;
retrieving receiver-connection data that identifies the receiver connection corresponding with the identified encoding format; and
sending to the receiver a control signal instructing the receiver to use the identified receiver connection for receiving a media signal of the selected media.

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In a detailed Report and Recommendation issued in International Business Machines Corporation v. The Priceline Group Inc., et al., C.A. No. 15-137-LPS-CJB (D. Del. Apr. 10, 2017), Magistrate Judge Christopher J. Burke recommended that Plaintiff’s motion to dismiss Defendants’ inequitable conduct counterclaim and to strike their corresponding affirmative defense be granted-in-part.

Defendants’ inequitable conduct allegations fell into three separate “theories”: “allegations relating to the failure to disclose (1) certain prior art references against [two asserted patents] . . . (2) commercialization efforts . . . [and] (3) co-pending patent applications and office actions related to those applications.” Id. at 12.  Plaintiff challenged the sufficiency of Defendants’ allegations of materiality and intent, and also that the inequitable conduct allegations regarding certain patents could “infect” others.

As a threshold matter, Defendants contended that because “‘Rule 12(b)(6) doesn’t permit piecemeal dismissals of parts of claims[,]’ . . . if any one theory of inequitable conducts passes muster under Rule 9(b), then all of Defendants’ theories set out in the counterclaim should survive, even if some are clearly insufficiently pleaded.” Id. at 13.  The Court disagreed, citing, inter alia, case law from this District where portions of inequitable conduct claims were dismissed, and further observing that Defendants’ single-count approach to their pleading was confusing and may frustrate the particularity requirements of Rule 9(b). See id. at 13-16.

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