Wednesday, July 30, 2014

Passage of Time Does Not Render Substantial Controversy Stale

The court denied defendant's motion to dismiss plaintiff's declaratory relief claims for lack of subject matter jurisdiction. "Plaintiff has not alleged that defendant communicated with plaintiff at all before initiating this lawsuit. Nevertheless, plaintiff demonstrates that defendant has 'engaged in a course of conduct... show[ing] a preparedness and willingness to enforce his patent rights.' Indeed, defendant has: (1) identified the [patent-in-suit]; (2) asserted he is the owner of the [patent]; (3) identified plaintiff’s competing product . . . (4) asserted that plaintiff’s 'design' . . . is 'a copy of the [product covered by the patent]'; and (5) sued others in the past for purportedly infringing on his [patent]. . . . [D]efendant fails to cite any authority establishing that a two (or three year old) assertion, proffered as evidence, necessarily becomes stale. Indeed, the Court finds that the passage of time does not, by default, deprive this Court of declaratory judgment jurisdiction since the relevant circumstances of this case have not changed despite the passage of time. Put simply, defendant’s previous statements continue to validate plaintiff’s reasonable apprehension of being a possible infringer even though defendant is not currently 'poised on the courthouse steps' to sue plaintiff for infringement . . ."

SB Diversified Products, Inc. v. Murchison, 3-12-cv-02328 (CASD July 28, 2014, Order) (Houston, J.)

Tuesday, July 29, 2014

Plaintiff’s Success in Related Litigation Undermines Defendant’s Attorneys’ Fee Request

Following summary judgment, the court denied defendant's motion for attorneys’ fees under 35 U.S.C. § 285. "Defendants argue that [plaintiff] knew or should have known that Court’s First Claim Construction Order was dispositive of all of [plaintiff's] infringement theories. Therefore, Defendants argue that [plaintiff's] decision to continue litigation in the district court rather than enter into a stipulated judgment and seek appeal to the Federal Circuit renders this an 'exceptional' case. Defendants offer somewhat probative circumstantial evidence suggesting that [plaintiff's] motive was only to delay the impact of the Court’s order on its related litigation over this patent in other districts. . . . Patent litigants often disagree about whether a plaintiff has viable infringement contentions after an adverse claim construction, and one side is usually wrong. . . . Moreover, [plaintiff] achieved favorable results in other litigation over the [patent-in-suit] even after the courts in those cases construed the 'transferring . . . if' terms the same way this Court did. While Defendants point out valid distinctions between those cases and this one, this fact makes it difficult for the Court to conclude that it was 'extraordinary' for [plaintiff] to continue to pursue its infringement allegations after claim construction. This presents a very close case."

EON Corp IP Holdings LLC v. Sensus USA Inc., et al, 3-12-cv-01011 (CAND July 25, 2014, Order) (Tigar, J.)

Monday, July 28, 2014

Royalty Based on Price of Physical Product Inappropriate In Light of “Rampant Infringement”

Following a bench trial on damages, the court found defendant's expert's damages model to be unreliable. "[T]he primary problem with [defendant's] damages model is the fact that it bases royalties on chip prices. [Plaintiff] did not invent a wireless chip. Although it is largely undisputed that the inventive aspect of the [patent-in-suit] is carried out in the PHY layer of the wireless chip, the chip itself is not the invention. . . . Compounding this problem is the depression of chip prices in the damages period resulting from rampant infringement which occurred in the wireless industry. Prior to 2008, outside of the [a single entity], no company in the industry sought a license from [plaintiff] to the [patent-in-suit] and [plaintiff] received no royalties whatsoever for that technology. It is simply illogical to attempt to value the contributions of the [patent-in-suit] based on wireless chip prices that were artificially deflated because of pervasive infringement. Basing a royalty solely on chip price is like valuing a copyrighted book based only on the costs of the binding, paper, and ink needed to actually produce the physical product. While such a calculation captures the cost of the physical product, it provides no indication of its actual value."

Commonwealth Scientific and Industrial Research Organisation v. Cisco Systems, Inc., 6-11-cv-00343 (TXED July 23, 2014, Order) (Davis, J.)

Friday, July 25, 2014

Meet and Confer Requirement Removed to Prevent Alleged Gaming of Claim Construction Procedure

The court denied defendant's motion to preclude plaintiff from asserting any proposed claim constructions or in the alternative to comply with the court's rules regarding the exchange of proposed terms. "[Plaintiff] has apparently taken the position that no terms need construction. That is [plaintiff's] right. However, to ensure no 'gaming' of the process, the Court does not require the parties to meet and confer on claim construction. They may rely on previously identified (per this Court's rules) intrinsic and extrinsic evidence submitted (if any) in support of their positions. However, [plaintiff] (for instance) may not now offer an alternative construction for claims it stated needed no construction. Similarly, [plaintiff] is limited to the intrinsic and extrinsic evidence it has already proffered (if any) in support of its position. . . . The Court is troubled by assertions that there is a 'gaming' of the system. Let's be clear: [plaintiff] is plaintiff and bears the burden of going first - and showing its cards - more frequently than the defendants. That comes with the territory as plaintiff. The Court assumes good faith and that each party being told now to stick with its stated positions will be neither surprised nor prejudiced by so doing."

Regeneron Pharmaceuticals, Inc. v. Merus BV, 1-14-cv-01650 (NYSD July 22, 2014, Order) (Forrest, J.)

Thursday, July 24, 2014

Cease and Desist Letter May Create Substantial Controversy Without Identifying Specific Accused Products or Services

The court denied in part defendant's motion to dismiss plaintiff's declaratory relief action for lack of subject matter jurisdiction. "[Defendant] contends that this Court lacks jurisdiction because, in its pre-suit communications, it did not name any specific [plaintiff] products or services. . . . [Defendant] repeatedly asserted that features of [plaintiff's] products infringe specific [defendant's] patents, provided a detailed chart comparing these patents with [plaintiff's] features, and implicitly — but clearly — threatened to sue [plaintiff] based on these features. This is sufficient to establish an actual controversy over which there is federal jurisdiction."

MIS Sciences Corporation v. RPost Communications Limited et al, 3-14-cv-00376 (CAND July 22, 2014, Order) (Chhabria, J.)

Wednesday, July 23, 2014

PTAB’s Rejection of Inherency Argument Supports Summary Judgment of No Invalidity

The court granted plaintiff's motion for summary judgment that its tooth whitening patents were not invalid as obvious in light of prior art patents based, in part, on the PTAB's findings during inter partes review. "[U]nder this 'reasonable likelihood' standard, which is significantly lower than the 'clear and convincing' burden in this litigation, the PTAB found that [defendant and its expert's] inherency arguments were insufficient. . . . The PTAB rejected [defendant's] inherency arguments, under a lower standard of proof, not once, but twice. . . . [Defendant] directed its requests for rehearing almost exclusively to the PTAB’s rejection of the . . . inherency arguments [regarding the limitations at issue]. In both instances, the PTAB rejected [defendant's] requests, confirming its ruling that [defendant] had failed to show a reasonable likelihood that it could prove, by a preponderance of the evidence, that [three prior art patents] inherently disclose the [limitations at issue]."

The Procter & Gamble Company v. Team Technologies, Inc. et al, 1-12-cv-00552 (OHSD July 3, 2014, Order) (Black, J.)

Tuesday, July 22, 2014

No Stay Pending IPR in Light of Previous Unsuccessful IPR

The court denied defendant's motion to stay pending inter partes review because of the undue prejudice to plaintiff. "Third parties have already unsuccessfully challenged these patents in a previous IPR proceeding. Now, five months after that denial, other parties have filed a successive IPR petition with similar claims. . . . Any delay of this kind is inherently prejudicial to Plaintiff’s right to pursue its claims. . . . [B]ecause the PTAB has already denied challenges to the patents in the first IPR proceeding, it would seem even less likely that the current petition would succeed. . . . If the PTAB should issue a decision which changes any of these assumptions or the status of the overall disputes, then the Court can certainly review this denial. In the meantime, the Court’s judgment is that the parties should reach agreement on an appropriate litigation plan and proceed with it."

CTP Innovations, LLC v. VG Reed and Sons, Inc., 3-14-cv-00364 (KYWD July 18, 2014, Order) (Heyburn, J.)