Friday, August 22, 2014

Stay Pending Third Party IPR Requires Estoppel Condition

The court granted defendants' motion to stay pending inter partes review, but conditioned the stay on defendants' agreement to estoppel. "[T]his court has previously explained in similar cases that the benefits of a stay are partially contingent upon the application of the IPR proceeding’s estoppel effect. . . . In cases such as this one, where Defendants are not parties to the pending IPRs, the fact that the patent infringement defendants are not automatically estopped jeopardizes the IPRs’ critical intended effects on any subsequent district court action. Indeed, should any claims survive the pending IPRs in this case, the expected efficiencies would be eviscerated should Defendants go on to bring invalidity arguments in this court that were raised or could have been raised before the PTAB. . . . With that [estoppel] condition in place, the court concludes that the potential for streamlining these proceedings by awaiting the final resolution of IPR proceedings weighs heavily in favor of a stay."

PersonalWeb Technologies LLC v. Google, Inc. et al, 5-13-cv-01317 (CAND August 20, 2014, Order) (Davila, J.)

Thursday, August 21, 2014

Patent Aggregator License Excluded from Evidence, Except to Provide Context for Other Licenses

The court granted in part defendant's motion in limine to exclude evidence of plaintiff's $8.5 million license of a patent-in-suit to a patent aggregator. "Because [the aggregator's] business model is unique, [defendant] argues [the] license is of limited relevance to [defendant's] hypothetical licensing posture and should be excluded. . . . Some of the license agreements [the expert] reviewed involved licensees . . . that already had a license to [a patent-in-suit] through their membership with [the patent aggregator]. These licensees would have contemplated the effect of their existing license and paid a lower rate to settle claims with [plaintiff]. Ignoring the [aggregator's license] would leave the jury with the mistaken impression that the license agreements included [that patent-in-suit]. . . . [Defendant] argues that even though the [aggregator] license is relevant, its $8.5 million figure will skew the jury’s perception of a reasonable royalty, causing unfair prejudice to [defendant]. Accordingly, [plaintiff] may describe the circumstances of the [aggregator] license, but not the actual amount."

Digital Reg of Texas, LLC v. Adobe Systems Incorporated, et al, 4-12-cv-01971 (CAND August 19, 2014, Order) (Wilken, J.)

Wednesday, August 20, 2014

Irreparable Harm to Losing Plaintiff Justifies Injunction Against Defendant Pending Appeal

Following a bench trial in which the court found the asserted patent invalid, the court granted plaintiff's motion to enjoin defendant from marketing or selling its accused drug product pending plaintiff's appeal, on the condition that plaintiff post a $10 million bond and move to expedite its appeal. "[Plaintiff] claims that it will succeed on the merits because this court erred in its application of the law with respect to motivations to combine the prior art and inherency. Although the court stands by its judgment, it recognizes that the case presents a close call. . . . The court is not persuaded [plaintiff] has demonstrated a 'strong' likelihood of success on appeal. . . . [Plaintiff] has, however, made a showing of a substantial case. Because . . . the balance of hardships tips strongly in its favor as well, this showing is sufficient. . . . [Plaintiff] has presented evidence that it would suffer more than just lost revenue. [Plaintiff] has also demonstrated that the lost revenue will likely force its entire branded division . . . to shut down. . . . In addition, there is evidence that were [defendant] to enter the market only to be required to exit again, the price erosion and revenue losses [plaintiff's product] would suffer would be impossible to reverse completely."

Par Pharmaceutical, Inc. et al v. TWi Pharmaceuticals, Inc., 1-11-cv-02466 (MDD August 12, 2014, Order) (Blake, J.)

Tuesday, August 19, 2014

No Summary Judgment Based on Late Disclosed Noninfringement Argument

The court denied defendant's motion for summary judgment of noninfringement of plaintiff's HVAC patent. "[Defendant] argues that it cannot be liable for direct infringement because it only sells individual HVAC units, not HVAC systems, and the [patent-in-suit] requires an HVAC system that is operational. . . . [I]t was not until 11:19 p.m. on the last day of fact discovery . . . that [defendant] added this contention as a defense, by supplementing its interrogatory response on non-infringement. . . . The parties are represented by highly regarded patent lawyers. How can it be that a fundamental contention - defendant does not sell the accused system - was not even identified by either party until the last minutes of fact discovery? Indeed, the record is bereft of all meaningful evidence relating to this issue, with [plaintiff] arguing that it had no notice of the contention and, therefore, no opportunity to pursue related discovery, and [defendant] arguing that it had no responsibility to give any more notice of its defense than it did because it is [plaintiff's] ultimate responsibility to prove direct infringement. . . . [Defendant] equivocated and failed to provide any evidence (like sales figures) that could have alerted [plaintiff] to the issue. [Defendant] did not play by the rules; therefore, it must suffer the consequences. [Defendant's] motion for summary judgment is denied in this regard. The court will address at the pretrial conference whether [defendant] will be precluded from presenting such a defense at trial."

Carrier Corporation v. Goodman Global Inc. et al, 1-12-cv-00930 (DED August 14, 2014, Order) (Robinson, J.)

Monday, August 18, 2014

Risk That Small Businesses Will be Discouraged from Enforcing Patent Rights Vital to Their Survival Weighs in Favor of Attorneys’ Fee Award

Following a jury verdict of patent infringement liability and reasonable royalty damages of about $65,000 against two defendants, the court granted plaintiff's motion for attorneys’ fees under 28 U.S.C. § 285. "[T]his case raises special concerns regarding compensation and deterrence of patent infringement. Although snap fasteners represent a minute portion of Defendants’ costs and profits, the [patent-in-suit] is Plaintiff’s primary business asset. Thus, there is a risk that plaintiffs similar to [this plaintiff] could be discouraged from bringing claims that may garner only small awards but are nonetheless vital to the survival of their businesses where defendants, as was the case here, aggressively pursue invalidity counterclaims in an attempt to prolong litigation and exponentially increase the cost and risk of pursuing a lawsuit."

Romag Fasteners, Inc. v. Fossil, Inc., et al, 3-10-cv-01827 (CTD August 14, 2014, Order) (Arterton, J.)

Friday, August 15, 2014

Litigation Counsel Not Barred from Participating in IPR as to Overlapping Issues

The court granted in part plaintiff's motion to allow its litigation counsel to participate in inter partes review filed by defendants involving the same claims and defenses, but litigation counsel could not participate in claim amendment or share defendants' confidential information with plaintiff's IPR counsel. "[E]ven if the protective orders did bar [plaintiff's litigation counsel] from participating in the inter partes review proceedings, the court would make an exception. . . . [Litigation counsel's] participation is limited to the issues before this court — questions of obviousness and prior art. Those issues need not implicate competitive decisionmaking or claim amendment. . . . [Plaintiff] would be at a significant disadvantage if [its litigation counsel] is not permitted to assist in the defense of [plaintiff's] patents against the same prior art raised in this litigation. . . . [Counsel] has developed extensive knowledge and expertise regarding those challenges. . . . Forcing [plaintiff's IPR counsel] to prepare from scratch the defense that [litigation counsel] has already prepared would be a waste of time and resources."

Endo Pharmaceuticals, Inc. et al v. Teva Pharmaceuticals USA, Inc. et al, 1-12-cv-08060 (NYSD August 13, 2014, Order) (Griesa, J.)

Thursday, August 14, 2014

Expert’s “Yes and No” Answers to Leading Questions Insufficient to Support Invalidity Verdict

Following a jury trial which found plaintiff's call center system patent invalid, but did not specify a basis, the court granted plaintiff's motion for judgment as a matter of law as to defendant's written description and lack of enablement defense. "[Defendant's invalidity expert's] testimony consists of a series of 'yes' and 'no' answers to counsel’s leading questions, without providing any specific reason for giving such answers. While [the expert] did identify a page from the [patent-in-suit's] specification upon which he purportedly formed his opinion, he never explained how such evidence demonstrated that, to build a partitioned database, one skilled in the art would have to go through 'undue experimentation.' [The expert's] ipse dixit statements that the [patent-in-suit] failed the written description and enablement requirements cannot be sufficient to constitute clear and convincing evidence. Given that [the expert's] testimony is the only basis upon which Defendants attempted to invalidate the [patent-in-suit] under Section 112, the Court finds that no reasonable jury could have concluded that the [patent-in-suit] was invalid for lack of written description or for failing the enablement requirement."

Cassidian Communications, Inc. v. microDATA GIS, Inc. et al, 2-12-cv-00162 (TXED August 8, 2014, Order) (Gilstrap, J.)