Wednesday, October 22, 2014

Conflicting Claim Constructions by District Court and PTAB No Basis for Interlocutory Appeal

The court denied plaintiff's motion to certify for interlocutory appeal the court's claim construction where the PTAB construed certain claim terms differently. "In this case, there have been different decisions on the same contested issue by two different adjudicative bodies: this Court and the [PTAB], in the parties’ Inter Partes Reexamination, currently on appeal at the United States Court of Appeals for the Federal Circuit. . . . [D]istrict courts interpret claims using the 'ordinary and customary meaning' of the terms . . . whereas in PTO proceedings, claims are construed under the 'broadest reasonable interpretation' standard. Hence, it is not surprising that constructions from IPRs and other PTO proceedings may differ from or, indeed, be diametrically opposed to those of district courts, as is the case here, where, for example, this Court found the preambles limiting, but the PTO did not so find. . . . While there are 'conflicting interpretations from' different adjudicative bodies, the interpretations stem from different standards. Thus, the Court does not believe that the instant conflicting determinations actually present the scenario of 'conflicting opinions,' envisioned under § 1292(b)."

Wonderland Nurserygoods Co., Ltd. v. Thorley Industries, LLC, 2-12-cv-00196 (PAWD October 20, 2014, Order) (Fischer, J.)

Tuesday, October 21, 2014

Plaintiff’s Communications With Internal Counsel Presumptively Not Privileged

The court granted defendant's motion to compel documents withheld as privileged. "[T]he established policies underlying the work product doctrine require that the phrase 'in anticipation of litigation' . . . be limited, with respect to non-opinion material, to material generated solely with respect to [plaintiff's] relationship with a particular potential licensee/defendant beginning at the time that potential licensee/defendant is identified. Other or more general relationship to litigation will render the material presumptively business-related and not protected. . . . [I]nternal communications to and from internal counsel are presumptively business communications not protected by the attorney-client privilege unless they relate solely to [plaintiff's] relationship with a specific potential licensee/defendant at or after the time that potential licensee/defendant is identified."

MLR, LLC v. Dell Inc., 1-14-cv-00135 (VAED October 17, 2014, Order) (Jones, M.J.)

Monday, October 20, 2014

Asserted Claims Reduced From Nearly 800 to 32 Prior to Claim Construction

The court granted defendant's motion to limit the number of asserted claims from nearly 800 to the limits under the Federal Circuit Advisory Committee Model Order (first 32, then 16 claims) before claim construction. "This Court rejects [plaintiff's] contention that the Court should wait to consider a limitation on the number of asserted claims until after the Claim Construction hearing. It would be a waste of time and resources to conduct such a hearing for a multitude of claims that [plaintiff] may later elect not to pursue. Nor is this Court persuaded by [plaintiff's] claim that it will be prejudiced if it is forced to reduce the number of its claims at this point. That is because this Court’s instruction to reduce the number of claims comes with the proviso that [plaintiff] can seek to add new claims if it can make a good cause showing that the new claims are not duplicative."

Telebuyer, LLC v., Inc. et al, 2-13-cv-01677 (WAWD October 16, 2014, Order) (Rothstein, J.)

Friday, October 17, 2014

Overreaching Request for Discovery Sanctions Warrants Reduction of Fee Award

The court denied in part defendant's motion for discovery sanctions and further reduced the award by another one-third for defendant's overreaching. "The Court agrees with Plaintiff that the amount of fees that [defendant] requests in its Memorandum is excessive and that [defendant] broadly misconstrued the Court’s order awarding reasonable expenses and attorneys’ fees. . . . Defendant’s request for $132,629.48 for an 18 page emergency motion for sanctions, a 19 page reply and oral argument at a relatively brief hearing is unreasonably excessive. . . . While [defendant's] conduct does not require a complete denial of its application for fees and costs, it does justify a further reduction of the amount to be awarded to Defendant based on its overreaching with respect to its application. . . . Because [defendant] unreasonably sought to recover much higher fees for legal services unrelated to the motion for sanctions, and which are also not supported by adequate billing records, the Court exercises its discretion to reduce the award of attorneys’ fees and costs to [defendant] by one-third. . . . The Court therefore awards Defendant . . . attorneys’ fees and costs related to its motion for sanctions in the total amount of $10,667.00."

JS Products, Inc. v. Kabo Tool Company, 2-11-cv-01856 (NVD October 15, 2014, Order) (Foley, Jr., M.J.)

Thursday, October 16, 2014

More Speculative Damages Expert Testimony Permitted In Light of Limited Underlying Evidence

The court denied both parties' motions to exclude testimony from their damages experts. "[T]he Court acknowledges that [plaintiff's damages expert's] testimony contains a greater degree of speculation than might ordinarily be required to pass muster under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and Rule 702, Fed. R. Ev. This, however, is a function of the limited nature of the underlying evidence available in this case to construct the hypothetical bargain required by patent law. Under these circumstances, the flexibility inherent in Daubert permits the Court to accept testimony that is more speculative than would ordinarily be desirable. Nonetheless, this ruling is made without prejudice to defendants' renewing their motion to strike [the expert's] testimony if, after he has testified before the jury and been subject to full cross-examination, it turns out that his opinions are even more speculative in nature than they appeared at the Daubert hearing."

ADREA, LLC v. Barnes & Noble, Inc. et al, 1-13-cv-04137 (NYSD October 14, 2014, Order) (Rakoff, J.)

Wednesday, October 15, 2014

Plaintiff’s NPE Status No Basis for Staying Injunction Beyond Sunset Period

The court denied defendant's motion to stay an injunction past the sunset period because defendant did not establish a likelihood of success on appeal, irreparable injury, an injury to a third party, or harm to the public interest. "[Defendant] questions the significance of [plaintiff's] harm when it does not practice the [patent-in-suit] and in fact purchased the patent only after this litigation was launched. . . . [Defendant's] arguments take no account of the fundamental nature of the right at issue: the right to exclude. . . No matter [plaintiff's] lack of practice of the patent or when [plaintiff] acquired it, [defendant's] ongoing infringement denies . . . [plaintiff's] right to exclude competitors from practicing the [patent-in-suit's] claims. While perhaps less well-remembered than its criticism of the Federal Circuit, [eBay Inc. v. MercExchange, L.L.C., 547 U.S. 338, 392 (2006)]'s criticism of the district court’s seeming reliance on such distinctions was just as pronounced. . . . Put another way, whether for Thomas Edison and his light bulb patents or [plaintiff] and its off-the-shelf purchase, the exclusive rights under 35 U.S.C. § 271 are the same; that period of exclusivity never comes back."

Accessories Marketing, Inc. v. Tek Corporation, 5-11-cv-00774 (CAND October 13, 2014, Order) (Grewal, M.J.)

Tuesday, October 14, 2014

Expert’s Use of “Excess Profits” to Calculate Reasonable Royalty Requires Additional Briefing to Establish Reliability

The court ordered defendants to provide additional briefing or it would exclude the testimony of their damages expert regarding a reasonable royalty because of his unconventional analytical/income approach analysis. "[The expert] appears to base his calculation on a hypothetical negotiation between the parties wherein the defendants are willing to spend only their 'excess profit.' . . . [The expert's] profit calculations differ substantially from those of the experts discussed in the case law. In those cases, the experts compared the infringer’s profits without infringement to the infringer’s profits with infringement. . . . [Defendants' expert] considers only a subset of infringement profits because he considers only defendants’ 'excess profits' over and above their 'base' profits from infringement, while other experts conducting this analysis have considered the total profits resulting from infringement. This method is problematic, but that is not even where [defendants' expert] lands. Rather, his proposed royalty rate is much lower than the rates he found comparing best and base case profits. . . . [W]ithout further information and explanation from defendants as to why [their expert's] profitability method is reliable, I will not permit him to testify because he will have nothing helpful to offer the jury."

Ultratec, Inc. et al v. Sorenson Communications, Inc. et al, 3-13-cv-00346 (WIWD October 9, 2014, Order) (Crabb, J.)