Magistrate Judge Joel Schneider, sitting by designation, recently denied defendant Materia, Inc.’s motion to disqualify plaintiff Evonik Degussa DmbH’s expert on inequitable conduct issues. Evonik Degussa DmbH v. Materia, Inc., et al., C.A. No. 09-636-NLH-JS (D. Del. Apr. 2, 2014). Materia argued that disqualification was proper because its co-defense counsel, Nixon Peabody, retained the expert in the past “regarding an ‘ethics matter.'” Id. at 1. Materia argued that it would be substantially prejudiced because the past engagement would “stymie its effective cross-examination,” and that “fundamental fairness” warranted disqualification. Id. at 1-2. Magistrate Judge Schneider disagreed. “[D]isqualification is a drastic measure which should not be imposed except where absolutely necessary.” Id. at 2. Disqualification was inappropriate because Materia did not show that it was “objectively reasonable” for it to conclude that it had a confidential relationship with the expert and there was no evidence that any relevant confidential information was relayed to the expert. Id. at 2-3. Further, “policy and fairness” did not warrant disqualification because “[t]here is nothing unfair if Nixon Peabody is requried to cross-examine an expert it previously retained in an entirely unrelated matter.” Id. at 4. Evonik, on the other hand, would be prejudiced if its expert is disqualified because Evonik has the “right to qualified experts of its choice.” Id.
Judge Sue L. Robinson recently issued a memorandum opinion resolving the parties’ post-trial motions in INVISTA North America S.a.r.l. et al. v. M&G USA Corp. et al., C.A. No. 11-1007-SLR-CJB (D. Del. Mar. 31, 2014). Judge Robinson previously resolved several summary judgment motions (discussed here) and motions to strike or preclude evidence (discussed here and here).
The parties proceeded to trial on infringement of one claim and validity of several claims of the patent-in-suit. At the close of evidence, Judge Robinson granted Plaintiffs’ JMOL motion as to infringement, and the jury returned a verdict that the patent was valid. Id. at 1. Post-trial the parties filed several motions, including Defendants’ JMOL motions on invalidity and non-infringement, Plaintiffs’ motion for an injunction. Id. As a preliminary matter, Plaintiffs objected to Defendants renewed JMOL on non-infringement because the jury did not reach a verdict on the issue. Id. at 9 n.4. The court considered Defendants’ motion, however, because the parties did not provide “and the court [did not find] any clear direction in the case law that defendants are precluded from renewing the motion.” Id. Nevertheless, the court denied Defendants’ motion because it saw no basis to “revisit the evidentiary decisions made during the course of trial.” Id. at 10. “The court did not arrive at these decisions lightly, indeed, the court entertained both argument and briefing on these issues.” Id. Judge Robinson also denied Defendants’ JMOL motion as to invalidity, finding that the jury’s verdict was supported by substantial evidence. Id. at 23, 25, 29, 33.
Judge Robinson also considered and ultimately granted Plaintiffs’ motion for a permanent injunction. Judge Robinson noted that the parties are direct competitors, “offering the only ‘high barrier’ monolayer polyester barrier resins available in the market[.]” Id. at 36. Plaintiffs argued that that legal remedies would be inadequate compensation of the irreparable injuries they have suffered “‘including lost sales and market share, lost market opportunities, loss of research and development activities, a loss of goodwill and reputation in the market, and a forced loss of their patent exclusivity,” as each of these harms would be difficult to accurately quantify.” Id. at 40. The court agreed finding that this factor, as well as the balance of hardships, favored an injunction. Id. at 40-41.
On April 1, 2014, a jury returned a verdict in Silver Peak Systems, Inc. v. Riverbed Technology, Inc., C.A. No. 11-484-RGA-CJB (D. Del.), finding that Riverbed Technology, Inc. (“Riverbed”) infringed certain claims of U.S. Patent Nos. 7,945,736 (the “’736 Patent”) and 7,948,921 (the “’921 Patent”) asserted by Silver Peak Systems, Inc. Specifically, the jury found that Riverbed directly infringed claims 1, 2, 8, 9, 10, and 17 of the ’736 Patent under the doctrine of equivalents, and that Riverbed contributorily infringed those same claims. Further, the jury found that Riverbed induced infringement of claim 1 of the ’921 Patent.
The jury also found that claim 1 of the ’921 patent was not anticipated.
Judge Leonard P. Stark recently adopted Magistrate Judge Christopher J. Burke’s recommendation from earlier this month, in which Judge Burke recommended denial of a defendant’s motion to transfer to the Northern District of California. MAZ Encryption Technologies LLC v. Hewlett-Packard Company, C.A. No. 13-306-LPS, Report and Recommendation (D. Del. Mar. 6, 2014), adopted, Order (D. Del. Mar. 28, 2014).
Plaintiff was a small Delaware corporation that claimed to have no revenue. Report and Recommendation at 3. It had also brought nine other cases in Delaware; seven involved one or both of same patents-in-suit, and two others involved a related patent. Id. at 2. Defendant was a large Delaware corporation with its principal place of business, and much of its operations, in California. Additionally, the designers of the accused products, while no longer employed with defendant, resided in California. Id. at 4.
As to plaintiff’s forum preference, defendant argued that this factor should be given less or no weight because plaintiff’s “minimal ties to Delaware were manufactured in an apparent attempt to manipulate the venue laws.” Id. at 9 (internal quotation marks omitted). Judge Burke recognized that “the record clearly suggests a connection between Plaintiff’s formation as a Delaware LLC, the assignment of the patents to Plaintiff and the filing of the instant suit in this Court, all of which occurred in relatively short order,” id., and that “[t]here are clearly certain circumstances in which a plaintiff’s connection to a forum and its choice to file suit there evidence an improper motive,” id. at 10. But Judge Burke observed that it may be difficult to differentiate between a formation that is an “appropriate kind of business or litigation decision” and one that is essentially “venue manipulation.” Id. at 11-12. Judge Burke did not have to make this determination here, however, because plaintiff’s forum choice was legitimate for another reason: it brought suit in Delaware to assure personal jurisdiction over defendant, a Delaware corporation. Id. at 12. Therefore, this factor weighed against transfer.
The other factors weighing against transfer were the convenience of the parties and practical considerations. The convenience of the parties only weighed slightly against transfer; while plaintiff’s small size and financial condition, as compared to that of defendant, may have meant that it would suffer greater hardship if forced to litigate in California, Judge Burke gave this minimal weight because there was little detailed information available about plaintiff’s finances, “and the reality [is] that Plaintiff’s members can and have initiated litigation here and in other courts.” Id. at 18. More significantly, the number of pending related cases in Delaware and their level of overlap with the patents-in-suit in this case weighed against transfer. See id. at 23-25.
All other factors weighed in favor of transfer (defendant’s forum preference, where the claim arose, convenience of witnesses, and books and records – although the last two only slightly) or were neutral. Judge Burke explained that “[u]ltimately, with the factors in equipoise, Defendant has not bet its burden to show that the balance of convenience of the parties is strongly in its favor.” Id. at 28. Therefore, Judge Burke recommended that the motion to transfer be denied.
In Depuy Synthes Products, LLC v. Globus Medical, Inc., C.A. No. 11-652-LPS (D. Del. Mar. 25, 2014), Judge Leonard P. Stark decided several post-trial motions, denying the parties’ motions for attorneys’ fees, denying plaintiff’s motion for a permanent injunction and destruction of infringing products, granting in part plaintiff’s motion for an accounting and determination of an ongoing royalty rate, and granting plaintiff’s motion for prejudgment and postjudgemnt interest. Judge Stark’s decision followed a ten-day jury trial where the jury found plaintiff’s asserted patents valid and infringed. Id. at 1.
Denying plaintiff’s motion for attorneys’ fees, Judge Stark concluded that defendant’s conduct was not “exceptional” as to justify the award of fees under 35 U.S.C. § 285. Id. at 8. Judge Stark explained, for example, that many of defendant’s positions that plaintiff argued were “baseless” were the same positions that the Court addressed during the Pretrial Conference. Id. at 7. At the Pretrial Conference, however, the Court found defendant’s positions on “claim construction, noninfringement and invalidity positions . . . to be not unreasonable.” Id. at 6-7. Further, addressing plaintiff’s assertion that defendant made representations at trial “that contradicted the Court’s prior rulings or [defendant’s] earlier representations to the Court,” Judge Stark explained that “much of what [plaintiff] complains about was already dealt with at trial, the Court already provided adequate relief, and these events do not make this case ‘exceptional.’” Id. at 7-8. Judge Stark additionally noted that defendant “properly places its comments within the context of a legally and factually complex trial in which the Court was required to construe claim terms as late as during the trial’s final days.” Id. at 7-8. Turning to defendant’s motion for attorneys’ fees, Judge Stark addressed defendant’s assertion that plaintiff “maintained its willfulness allegation even after . . . it became clear that [the allegation] lacked any merit.” Id. at 8. Despite the fact that the Court had made statements during Pretrial Conference that defendant’s noninfringement positions were “not unreasonable,” and that defendant’s pre-suit and post-suit conduct was not “objectively unreasonable,” Judge Stark nevertheless found that plaintiff did not act in bad faith. Id. at 8-9. Judge Stark explained that “the Court’s determination that [plaintiff] could not prevail on its willful infringement claim does not logically lead to the conclusion that [defendant] . . . should receive attorneys’ fees.” Id. at 9.
Denying plaintiff’s motion for a permanent injunction and destruction of infringing products, Judge Stark explained that plaintiff failed to demonstrate that remedies at law were inadequate to compensate it for injuries. Id. at 10. While plaintiff maintained that its patented products operated as “door openers” to other products, the Court already addressed and denied such an argument on plaintiff’s motion for a preliminary injunction following the trial. See id. at 9-10. Judge Stark denied the instant motion despite the fact that plaintiff made “persuasive arguments regarding some of the other permanent injunction factors, particularly regarding the balance of hardships between [plaintiff] and [defendant] and the public interest.” Id. at 10.
With respect to its motion for an accounting and determination of an ongoing royalty rate, plaintiff sought “additional damages to account for infringing sales that were not part of the royalty base that the parties presented to the jury,” and argued that for post-verdict sales, an ongoing royalty rate of 25% should apply. Id. at 11. While Judge Stark noted that there “is a fundamental difference . . . between a reasonable royalty for pre-verdict infringement and damages for post-verdict infringement ,” he found plaintiff’s 25% rate to be too high. See id. at 13-15. Judge Stark rather adopted a rate of 18% for post-verdict sales, which was based “on the Court’s conclusion that [plaintiff] is entitled to some elevated ongoing royalty rate as a result of the post-verdict changes [in] bargaining positions.” Id. at 14 & n.8. Judge Stark also found that defendant “shall be required to provide [plaintiff] with records sufficient to identify infringing sales within 15 days after the close of the calendar quarter in which those sales were made.” Id. at 15. Finally, based on the fact that plaintiff presented “some evidence that the prime rate is appropriate,” Judge found that prejudgment “interest should be calculated using the prime rate, compounded quarterly.” Id. at 17.
Judge Leonard P. Stark recently granted a motion for summary judgment of invalidity for obviousness filed by several generic defendants in an ANDA suit involving methods for treating or preventing osteoporosis through dosing of risedronate. Warner Chilcott Company, LLC v. Teva Pharmaceuticals USA, Inc., et al., C.A. No. 08-627-LPS (D. Del. Mar. 28, 2014). Judge Stark cited two related litigations in the District of New Jersey where similar patented methods and the same prior art were considered, and concluded that “Defendants have presented clear and convincing evidence that the prior art demonstrates that high doses of risedronate are safe and effective.” Id. at 11. The Court also found that the secondary consideration of simultaneous invention supported invalidating the patents as obvious. Id. at 13.
Judge Stark recently denied a plaintiff’s motion to stay pending the resolution of CBM review. Securebuy, LLC v. Cardinal Commerce Corp., C.A. No. 13-1792-LPS (D. Del. Mar. 21, 2014). The Court found that each of the factors (whether a stay would simplify issues; whether discovery is complete and a trial date set; whether a stay would unduly prejudice the non-moving party; and whether a stay would reduce the burden on the Court and parties) weighed against granting a stay. In this case, the petition for CBM review had not yet even been granted, and the Court found that CBM review would not involve all invalidity issues before the Court (or infringement), discovery was under way and trial scheduled to be held within 5 months, and a stay would prejudice the defendant without reducing the burdens on either the Court or the defendant. Accordingly, the Court denied the motion to stay.
Judge Leonard P. Stark recently considered Juniper Network’s motion to dimiss ReefEdge Network’s claims of willful infringement and its amended claim of inducement. ReefEdge Networks, LLC v. Juniper Networks, Inc., C.A. No. 13-412-LPS (D. Del. Mar. 21, 2014). Prior to filing this motion, Juniper moved to dismiss ReefEdge’s original claims of indirect and joint infringement. In response ReefEdge dropped its contributory and joint infringement claims and added a claim for willful infringement. Id. at 1. ReefEdge claimed Juniper knew of the patents-in-suit prior to the filing of the complaint because while Juniper’s Deputy General Counsel was employed at Symantec Corporation, she marketed the patents-in-suit to ReefEdge. Id. at 2. After joining Juniper as Deputy Counsel and VP of Intellectual Property, ReefEdge met with Juniper to discuss licensing the same patents. Id.
Judge Stark disagreed with ReefEdge that because Juniper’s Deputy Counsel was “responsible for managing all aspects of intellectual property at Juniper,” her knowledge could be imputed to Juniper. Id. at 4. Judge Stark noted that ReefEdge did not allege that the Deputy General Counsel “was aware of Juniper’s allegedly infringing products, which were on the market for years before [she] joined Juniper.” Id. Nor did ReefEdge “‘demonstrate a link between the various allegations of knowledge of the patents-in-suit and the allegations that the risks of infringement were either known or were so obvious that they should have been known.'” Id. (quoting MONEC Holding AG v. Motorola Mobility, Inc., 897 F. Supp. 2d 225, 236 (D. Del. 2012).
Regarding inducement, ReefEdge alleged that Juniper induced infringement by advertising and providing technical support services. Id. at 6. Judge Stark noted that “marketing activities are not sufficient to constitute induced infringement unless the marketing activities are coupled with actual knowledge of the patents-in-suit and awareness that the accused products infringe the patent-in-suit.” Id. Because ReefEdge did not adequately plead pre-suit knowledge of the patents-in-suit and knowledge that those patents were being infringed, ReefEdge failed to state a claim for inducement prior to the filing of the complaint. Id. Judge Stark did, however, find that ReefEdge adequately pled inducedment based on post-filing knowledge because ReefEdge alleged that Juniper’s “marketing activities and instructions to customers to use the accused products in an infringing manner” were ongoing even after Juniper “had actual notice of the alleged infringement by specific accused products as a result of the filing of the original complaint[.]” Id. at 7-8.
Magistrate Judge Sherry R. Fallon recently recommended that a defendant’s motion to transfer to the Northern District of California be denied. Wireless Media Innovations, LLC v. Leapfrog Enterprises, Inc., C.A. No. 13-1545-SLR-SRF, Report and Recommendation (D. Del. Mar. 20, 2014). Plaintiff and defendant were both Delaware corporations. Defendant’s documents, employees and anticipated witnesses were in California. All alleged acts of infringement took place in California, as plaintiff alleged that defendant’s practices at its California distribution center, rather than its nationally-sold products, infringe plaintiff’s system and method patents. D.I. 1 ¶¶ 11-12; Report and Recommendation at 2 n.1
The Court concluded that, on balance, the Jumara factors weighed against transfer, even though several of the individual factors weighed in favor of transfer. Specifically, defendant’s forum choice, where the claims arose, and the convenience of witnesses favored transfer. See id. at 4-5, 6-8. As to the convenience of witnesses, defendant argued that many of its non-party witnesses that would be crucial to its non-infringement positions may be beyond the reach of the Court’s legal process. Id. at 7. Defendant provided declarations from third parties in support of its contentions. Plaintiff argued that these parties could be deposed and that testimony admitted at trial, but the Court noted that “deposition testimony is not a complete substitute for live trial testimony.” Id. at 8. Because defendant’s “assertions cannot be discounted as speculation in light of the declarations proffered,” this factor weighed in favor of transfer. Id.
On the other hand, Plaintiff’s choice of forum weighed against transfer, as did the convenience of the parties because defendant was the larger company, had chosen to incorporate in Delaware, and had previously sued and been sued in Delaware. See id. at 4-6. The remaining factors were neutral or only weighed slightly in favor of transfer. See id. at 9-10. The Court explained that “[i]n similar cases involving factors that weigh both for and against transfer, this court has declined to elevate a defendant’s convenience over the choice of a neutral forum selected by both parties as the situs of their incorporation.” Id. at 10.
In the longstanding patent and contract action between Personalized User Model and Google, a jury returned a verdict last week. The verdict form shows that the jury found no literal infringement by any Google product of any asserted claim and that the jury found both anticipation and obviousness for each asserted claim. In addition, the jury sided with Google on breach of contract claims, finding that the statute of limitations for the claim was tolled, that Google had acquired the right to assert the breach of contract claim, that Google had proven the breach of contract claim, and that the California Labor Code did not exempt the breach of contract.