In IOENGINE, LLC v. Interactive Media Corp. d/b/a/ Kanguru Solutions, C.A. No. 14-1571-GMS, Judge Gregory M. Sleet denied Defendant’s motion for summary judgment of invalidity and non-infringement of the independent claims of the patent-in-suit (U.S. Patent No. 8,539,047), based on the contention that the patent was directed to patent-ineligible subject matter. Defendant argued the claims were directed to the abstract idea of “providing communication with computing devices.” The Court disagreed, finding the claims analogous to those held to not be abstract ideas in McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016), as they recited “a specific arrangement of components and a very specific implementation and structure of the executable program code.” Id. at 2 n.2 (citing McRo). The claims were also distinguishable from those in Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) as they defined “a tangible portable device with an unconventional hardware configuration that is able to run specific program code to provide the claimed functionality.” Id. “More important, the court agrees, as [Plaintiff] maintains, that the Independent Claims of the ‘047 patent are directed to a “specific asserted improvement in computer capabilities,” not to an abstract idea “for which computers are invoked merely as a tool,” citing the specification as support. Id. Having concluded the claims were not directed the abstract ideas, the Court did not reach step two of the Alice test.
In a recent Memorandum, Judge Gregory M. Sleet denied defendant Imation Corp.’s (“Imation”) motion to dismiss plaintiff IOENGINE, LLC’s (“IOENGINE”) complaint for lack of standing pursuant to Federal Rules of Civil Procedure 12(c) and 12(b)(1). The inventor of the patent-in-suit, United States Patent No. 8,539,047 (“the ’047 patent”), purported to assign the ’047 patent to IOENGINE LLC on October 7, 2014, but IOENGINE LLC’s Certificate of Formation was not filed with the office of the Secretary of State of Delaware until October 8, 2014. Id. at 2. Imation argued that IOENGINE LLC “did not exist at the time of the proferred assignment and therefore could not have received any rights” in the ’047 patent.” Id. at 5. The court agreed that “IOENGINE did not formally exist and could not, as a de jure entity, have obtained ownership of the ’047 patent on October 7, 2014.” Id. at 7.
The court ultimately recognized, however, that IOENGINE was a de facto LLC at the time of the patent assignment on October 7, 2015, and therefore concluded that IOENGINE has standing to bring suit. Id. at 10. Specifically, the court looked to the Delaware “common law-doctrine of de facto incorporation.” Id. at 8. The court could not find “any principled reason to conclude that a limited liability company would or should be treated differently from a corporation when considering the de facto formation of one or the other.” Id. When considering de facto formation, the court focused on facts demonstrating “a good faith, bona fide attempt to comply with the statutory requirements of formation of a limited liability company.” Id. at 10. For example, on October 7, 2014, the formation documents for IOENGINE were finalized, executed, and notarized, and its Delaware registered agent was designated. Id. at 9. The court therefore found that IOENGINE was a de facto LLC on October 7, 2014, and denied Imation’s motion to dismiss. Id. at 10.
In Boston Scientific Corp., et al. v. Edwards Lifesciences Corp., et al., C.A. No. 16-275-SLR-SRF (D. Del. Dec. 27, 2016), Magistrate Judge Sherry R. Fallon denied Defendants’ request to include in the protective order an objection procedure for disclosure of confidential material to non-U.S. counsel in counterpart litigation. The Court concluded that the following provision would reveal counsel’s work product because it would reveal which documents were “important to Plaintiffs”: “Prior to disclosure of Protected Material to Designated Foreign Counsel, the Party seeking disclosure shall provide written notice to the Producing Party identifying (i) the names of the Designated Foreign Counsel and (ii) the specific Protected Material sought to be disclosed to the Designated Foreign Counsel.” Id. at 2.
Defendants argued that the provision was necessary to provide a mechanism by which disclosure of sensitive documents could be objected to, and maintained that “foreign counsel access is unnecessary for coordinating litigation strategy.” Id. at 3. It further argued that the provision was “modeled after a provision in [another case’s] protective order.” Id. However, the Court observed that “the [other order’s] provision upon which [the proposed provision] is modeled relates to the use of documents in foreign actions. Whereas, in the present case, there is no pending request to use the documents in foreign litigation. Plaintiffs previously agreed that the documents would not be used in any foreign litigation. Therefore, the addition of [the provision] is unnecessary.” Id. (emphasis in original).
Chief Judge Stark has granted a motion for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c) on the grounds that certain claims of certain patents asserted by Intellectual Ventures are invalid under 35 U.S.C. § 101.
Judge Stark’s opinion addressed three patents. The first, U.S. Patent No. 6,115,737, discloses “a system that facilitates network based interactions between a customer and a service provider.” Intellectual Ventures I LLC v. AT&T Mobility LLC, et al., C.A. No. 12-193-LPS, Memo. Op. at 11 (D. Del. Dec. 30, 2016). Judge Stark found that the challenged claims of this patent were “directed to the abstract idea of account management” which the patent specification makes clear is “a fundamental economic practice long prevalent in our system of commerce.” Moreover, the added limitations of “accessing a network, entering a request, displaying the request, accepting the request via a CCSN/IG, and remotely processing the request” were insufficient to add an inventive step to this abstract idea, particularly because the specification describes “the CCSN/IG as a standard gateway, running standard software, using well-known protocols.” Id. at 12-16.
The other two patents-in-suit, Nos. 8,078,200 and 7,450,957, were each directed to a “method and system for controlling the use of a short message service . . . [that] enables users to block and screen short message service (“SMS”) messages based on predetermined criteria.” Id. at 20. Judge Stark found this to be an abstract idea because the common specification “acknowledges that ‘[t]he concept of blocking and screening messages is a . . . long-practice concept’ . . . [in which] each step in claim 1 – receiving, screening, and the forwarding or blocking a message based on predetermined criteria – could be analogously performed by a human, instead of by a computer.” Id. at 21. Further, the claims at issue “provide[d] no further inventive concept” because “[l]imiting the claims to ‘one field of use’ – here, SMS technology – is insufficient to confer patent eligibility.” Id. at 22-23.
An additional interesting point in Judge Stark’s analysis concerns the claim construction order, which the Court issued in March 2015. The plaintiff argued that the claim construction order relied on factual matters outside of the pleadings and, therefore, a Rule 12(c) judgment on the pleadings could not be based on the claim construction order. Judge Stark rejected this argument, finding that because claim constructions is a question of law, “the Court may take notice of and rely on its claim construction opinion without converting Defendants’ Motion into a motion for summary judgment.” Id. at 9-10.
Chief Judge Leonard P. Stark recently issued the Court’s claim construction rejecting defendants’ indefiniteness arguments and finding the preamble limiting. Mayne Pharma Int’l Pty Ltd. v. Merck & Co., Inc., No. 15-438-LPS (D. Del. Dec. 27, 2016). The preamble of the asserted claims stated “A pharmaceutical composition, consisting essentially of ….” Judge Stark found the preamble limiting “because it provides antecedent basis for the term ‘the composition,’ which appears in the wherein clauses of claims 9 and 12.” Id. at 14. Judge Stark construed the to mean “any composition suited for pharmaceutical use” in accord with its plain and ordinary meaning. Id. at 14-15. In doing so, Judge Stark rejected defendants’ proposed construction, “a medicinal drug preparation for administration to patients,” because defendants’ proposal improperly narrowed the scope of the claims. Id. Judge Stark also rejected defendants’ indefiniteness arguments regarding the terms “consisting essentially of,” “wherein in vivo the composition provides a mean Cmax of at least 100 ng/ml, after administration in the fasted state,” “‘wherein in vivo the composition provides a mean AUC of at least 800 ng.h/ml, after administration in the fasted state,” and “polymer having acidic functional groups.” Id. at 5-13, 16-17.
Judge Richard G. Andrews recently denied, in large part, a motion to redact the transcript of a pretrial conference. Delaware Display Group LLC v. LG Elecs. Inc., C.A. No. 13-2109 (D. Del. Dec. 22, 2016). The Court explained that “[s]imply because the parties have designated the information as ‘restricted – attorneys’ eyes only,’ or with some lesser designation under a protective order is almost irrelevant to the present issue, that is, whether the information should be redacted from a judicial transcript.” That is because once the information is “disclosed in a judicial proceeding, it is in the public interest to be able to understand the proceedings before a judge, and redaction of the transcript hinders that public interest.” The Court acknowledged that the interest in preserving confidentiality of commercially sensitive information will at time justify redacting such information from the public record. In this case, Judge Andrews found no justification to redact references in the transcript to “license agreements, settlement agreements, and indemnification agreements . . . with little specificity other than the identification of the parties to the agreements.” The Court did, however, find that reference to “two numbers” was appropriate.
Judge Sue L. Robinson recently issued a summary judgment opinion addressing a host of non-infringement and invalidity arguments. Among the arguments raised was a motion for summary judgment to “prevent [the defendant, Toshiba] from asserting invalidity challenges against the ‘819 patent, because Toshiba was the petitioner in an inter partes review (‘IPR’) in which the Patent Trial and Appeal Board (‘PTAB’) found several claims of the ‘819 patent invalid, including asserted claims 17 and 19.” Intellectual Ventures I LLC, et al. v. Toshiba Corp., et al., C.A. No. 13-453-SLR, Memo. Op. at 25-27 (D. Del. Dec. 19, 2016). Plaintiff, IV, argued that one obviousness combination raised in the IPR was also still at issue in the litigation and that Toshiba was therefore estopped from pursuing it in the litigation. Judge Robinson agreed as to that combination. Id.
For another invalidity theory, however, IV argued that the combination of prior art was “based on publicly available patents and printed publications and could have been raised in the inter partes review of the ‘819 patent.” Judge Robinson found that Toshiba was not estopped form maintaining this theory because “Section 315(e)(2) of Title 35 of the United States Code provides in relevant part that ‘[t]he petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a) . . . may not assert in a civil action arising in whole or in part under section 1338 of title 28 . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.’ Although . . . Toshiba certainly couldhave raised these additional obviousness grounds based on public documents at the outset of their IPR petition, the Federal Circuit has construed the above language quite literally[, finding that] . . . because the PTAB rejected a certain invalidity ground proposed by the IPR petitioner, no IPR was instituted on that ground and, therefore, petitioner ‘did not raise – nor could it have reasonably raised – the [rejected] ground during the IPR.’” Id. (emphasis in original) (citing Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293 (Fed. Cir. 2016)) (internal citations omitted). Judge Robinson concluded that “[a]lthough extending the above logic to prior art references that were never presented to the PTAB at all (despite their public nature) confounds the very purpose of this parallel administrative proceeding, the court cannot divine a reasoned way around the Federal Circuit’s interpretation.” Id.
In a recent Memorandum Opinion, Judge Richard G. Andrews affirmed Magistrate Judge Thynge’s September 27, 2016 oral order denying plaintiff’s motion to impose discovery sanctions for defendant’s “failure to produce IDV data.” AVM Technologies, LLC v. Intel Corporation, C.A. No. 15-33-RGA-MPT (D. Del. Dec. 19, 2016). Specifically, Judge Thynge denied plaintiff’s request that (1) defendant be precluded from “making any arguments that its timing analyses and any simulations that are based on UPF [pre-fabrication] models do not accurately reflect the manufactured products”; and (2) “a negative inference be drawn in Plaintiff’s favor due to Defendant’s failure to produce the IDV data.” Id. at 1.
Plaintiff argued that Judge Thynge’s ruling was incorrect under the Pennypack factors because plaintiff was prejudiced by defendant’s failure to produce the IDV data. Id. at 2. Specifically, plaintiff argued that that the IDV data is the “‘only evidence that definitively addresses’ Defendant’s argument that its pre-fabrication modeling results are not correlated to the manufactured products.” Id. Judge Andrews disagreed, noting that Judge Thynge found that defendant “produced data responsive to Plaintiff’s discovery request and that data provides the information Plaintiff needs.” Id. Accordingly, “there is no prejudice to Plaintiff for Defendant’s failure to produce the IDV data, which does not provide the information Plaintiff needs for verification of the modeling results.” Id. Because plaintiff failed to provide evidence that Judge Thynge’s factual findings were clearly erroneous, Judge Andrews affirmed Judge Thynge’s order. Id.
Judge Sue L. Robinson recently granted a plaintiff’s motion for leave to file a second amended complaint alleging induced infringement. Takeda Pharmaceuticals U.S.A., Inc. v. West-Ward Pharmaceutical Corp., et al., C.A. No. 14-1268-SLR (D. Del. Dec. 14, 2016). The second amended complaint alleged that the defendant induced infringement of the plaintiff’s patents through its sales personnel who encouraged healthcare providers to prescribe the accused product for an off-label infringing use. Although the second amended complaint provided “no details concerning any of these conversations – no particulars concerning which providers told which [plaintiff] representatives of statements by which [defendant] representatives, or when these conversations supposedly occurred[,]” id. at 3-4 (emphasis in original), the Court found that the second amended complaint plausibly gave rise to a claim for inducement, and fairly put the defendant on notice of the claims against it. The Court’s ruling was made based on the Third Circuit’s pleading standard that: “[s]o long as a plaintiff has not used ‘boilerplate and conclusory allegations,’ and has accompanied its legal theory with ‘factual allegations that make [its] theoretically viable claim plausible,’ . . . ‘pleading upon information and belief [is] permissible where it can be shown that the requisite factual information is peculiarly within the defendant’s knowledge or control.'” Id. at 4 (quoting McDermott v. Clondalkin Grp., Inc., 2016 WL 2893844, at *4 (3d Cir. May 18, 2016)).
In DNA Genotek Inc. v. Spectrum DNA, et al., C.A. No. 15-661-SLR (D. Del. Dec. 14, 2016), Judge Sue L. Robinson granted Defendants’ renewed motion to dismiss due to lack of personal jurisdiction, having ordered jurisdictional discovery when denying the first motion.
Defendants manufactured a saliva collection device for a third-party DNA testing service (“Ancestry”) that had sold some kits to Delaware customers. Various agreements between Defendants and Ancestry provided that Ancestry owned the intellectual property rights of the accused product, Ancestry was obligated to indemnify Defendants for patent infringement, Defendants were required to manufacture their product in accordance with the third party’s specifications, and Defendants paid Ancestry a fixed price per kit that they could resell to third parties, but Defendants had not resold such kits into Delaware.
Under these facts, the Court concluded that there was no personal jurisdiction under Delaware’s long-arm statute under a theory of dual jurisdiction. The Court distinguished other Delaware case law where dual jurisdiction was found, where a “defendant sold a product directly to national resellers who added nothing significant to the product before selling it through well-established sales channels, often with physical locations in Delaware, to consumers or end-users.” Id. at 7. Here, instead, Defendants had “no control over what happens to the accused products once shipped to Ancestry” where Defendants’ device was made “per Ancestry’s specifications, using intellectual property and tooling owned by Ancestry, in a quantity sufficient to meet Ancestry’s estimated product forecast, and then [sold] . . . exclusively to Ancestry. . . . If [Defendants want] to sell the accused products to someone other than Ancestry, it must first purchase the accused products it manufactures for Ancestry from Ancestry.” Id. at 7-8. There were no other facts present that exhibited intent to serve the Delaware market “based on national distribution” as there had been in other Delaware cases finding jurisdiction. See id. at 8 n.7. Furthermore, “[t]he facts supporting intent are even more attenuated if the court takes into account that there is no evidence the accused product has reached Delaware except as a part of Ancestry’s testing service, making [Defendants’] role analogous to that of a component manufacturer. . . . in cases finding dual jurisdiction over a component manufacturer, something more than the mere presence of millions of the accused products in the United States is needed to demonstrate intent.” Id. at 9.