Inadvertent Production of Counsel’s Analysis Acknowledging Weakness of Infringement Claim did not Justify § 1927 Sanctions

The court denied defendants' motion for sanctions under 28 U.S.C. § 1927 after plaintiff inadvertently produced a document regarding the weakness of its claim. "[28 U.S.C. § 1927] allows sanctions when an attorney has pursued a claim that is without plausible legal or factual basis, or has pursued a case that a 'reasonably careful attorney' would have known to be unsound. But we also have no basis upon which to find that plaintiff’s claims are 'entirely without support.'. . . We do acknowledge, however, that there is a claim that can be made when a party seeks not to obtain a judgment but to 'obtain a competitive advantage independent of the outcome of the case by piling litigation costs on a competitor': abuse of process, which is a tort suit. . . . [A]t this point in the litigation this single document acknowledging the weakness of a legal claim does not support a finding that plaintiff brought a frivolous claim ‘in order to obtain an advantage unrelated to obtaining a favorable judgment.’”

Peerless Industries, Inc. v. Crimson AV, LLC, 1-11-cv-01768 (ILND May 14, 2013, Order) (Cox, M.J.).

Prior Litigation and Reexamination of Related Patent Create Substantial Controversy Supporting Declaratory Judgment Claim

The court denied defendant's motion to dismiss plaintiff's declaratory relief action for lack of subject matter jurisdiction. "[Defendant] has already initiated a patent infringement action against [plaintiff] in the Northern District of Ohio based on [plaintiff's] alleged infringement of [a similar] Patent [and] after the Ohio Litigation was stayed as a result of a reexamination of [that] Patent, [defendant] stated publically on at least two occasions that it intends to resume its vigorous prosecution against [plaintiff] when that stay is lifted. . . . [T]he [similar patent] and [the patent-in-suit] share the same specification, pertain to the same subject matter and technology, and are otherwise 'very closely related.'. . . [B]ased on the totality of the circumstances, [plaintiff] has established the existence of an actual case or controversy. . . .”

Medidata Solutions, Inc. v. DATATRAK International, Inc., 2-12-cv-04748 (NJD May 13, 2013, Order) (Martini, J.).

Stay Prior to Institution of Inter Partes Review Denied

The court denied without prejudice defendant's motion to stay pending inter partes review. "[I]t seems clear that a stay of a patent infringement action is not warranted when based on nothing more than the fact that a petition for inter partes review was filed in the USPTO. All in all, a petition can be pending before the USPTO for up to six months before the agency decides to 'initiate' an inter partes review. . . . The patent owner should be able, if it desires, to prosecute its claims, to take discovery, and to set its litigation positions, at least until such a time as the USPTO takes an interest in reviewing the challenged claims. . . . [A] stay of these proceedings would also, quite frankly, disadvantage Defendant because then this Court would be unable to prevent through pretrial case management a 'shifting sands' litigation strategy by the patent owner." Automatic Manufacturing Systems, Inc. v. Primera Technology, Inc., 6-12-cv-01727 (FLMD May 13, 2013, Order) (Dalton, J.).

Federal Circuit’s Per Curiam Affirmance of Noninfringement Finding Does Not Support Award of Attorneys’ Fees

The magistrate judge recommended denying defendant's motion for attorneys' fees under 35 U.S.C. § 285 following plaintiff's unsuccessful appeal of summary judgment of noninfringement. "[Defendant] makes much of the Federal Circuit's per curiam affirmance without opinion six days after the oral argument. Without more, the Court declines to interpret the summary affirmance as a silent statement by the Federal Circuit that [plaintiff's] infringement theory was objectively baseless. . . . This is especially true where, as here, the Federal Circuit held oral argument on the appeal."

Wi-Lan Inc. v. LG Electronics, Inc., et. al., 1-10-cv-00432 (NYSD May 10, 2013, Order) (Peck, M.J.).

“Bone Crushing” Burden of Excessive Infringement Claims Justifies Late Amendment of Invalidity Contentions

The court granted defendant's motion to amend its invalidity contentions to add three new prior art references following claim construction. "Earlier in this action, [plaintiff] imposed upon [defendant] a bone-crushing burden of conducting a prior art search for more than fifty patent claims. This was an unreasonable burden for [plaintiff] to place on its adversary, especially since [it] should have been more selective in choosing claims to assert. . . . [Defendant] has acted reasonably and will be permitted to amend in light of (1) the huge number of claims previously asserted by [plaintiff], (2) the fact that [defendant] seeks to add only three references to a reference list that originally included over fifty, and (3) the fact that [defendant] promptly communicated its intent to update its invalidity contentions to [plaintiff] upon completion of the new prior art search."

Network Protection Sciences, LLC v. Juniper Networks, Inc., et. al., 3-12-cv-01106 (CAND May 9, 2013, Order) (Alsup, J.).

Nonfinal Invalidity Findings by PTO Cannot Provide Basis for Attorneys’ Fee Award

The court denied defendants' motion for attorneys' fees under 35 U.S.C. § 285 following summary judgment of invalidity and found that the PTO's finding of anticipation could not serve as the basis for a Section 285 award. "[A]s to the invalidity findings by the PTO, although the Court found them persuasive in reaching its own independent conclusion as to invalidity, those conclusions were not the final word on validity from the PTO and cannot provide a basis for finding this case exceptional under section 285."

Implicit Networks, Inc. v. F5 Networks, Inc., 3-10-cv-03365 (CAND May 8, 2013, Order) (Illston, J.).

Litigation Counsel With Access to Source Code Permitted Limited Role in Reexamination

The court granted in part defendant's motion for a patent prosecution bar in the protective order. "[P]laintiff has persuaded the court that her litigation counsel may access [confidential source code and documents] and still participate in reexamination proceedings before the [PTO], albeit in a limited way. . . . Especially where, as here, reexamination or review proceedings are really nothing more than an extension of the litigation in the district court, there is even less of a reason to impose a total ban of the kind [defendant] seeks. It would be one thing if the two matters were truly independent of one another. But if the PTO and district court are just two fronts in the same battle, allowing a limited role for a patentee's litigation counsel while prohibiting counsel from crafting or amending claims is reasonable."

John v. Lattice Semiconductor Corp, 5-12-cv-04384 (CAND May 7, 2013, Order) (Grewal, M.J.).