Thursday, April 24, 2014

Failure to Establish Comparability of Prior Settlement Agreements Warrants Exclusion of Reasonable Royalty Opinion

The court granted defendant's motion in limine to exclude the opinions of plaintiff's reasonable royalty expert because the expert based his opinion on an arbitrary baseline rate. "[Plaintiff's expert] does not even attempt to compare the [patent-in-suit] to the agreements that he asserts establish a baseline royalty rate for that patent. . . . Nor did [he] account for how the litigation context of his 'baseline' licenses was affected by the litigation from which they arose. . . . [He] simply assumes that the litigation licenses represent 'the lowest royalty rate or the ‘floor’ for compensation for the accused infringer’s authorized use of [plaintiff's] patent rights that [plaintiff] is willing to accept even without the assumption that the patent rights are valid and infringed . . . .' This ignores that a litigation defendant may pay simply to 'avoid[] the risk and expense of litigation.' While settlement licenses may be considered, the patentee has the burden to prove the comparability of the licenses."

Universal Electronics Inc. v. Universal Remote Control Inc., 8-12-cv-00329 (CACD April 21, 2014, Order) (Guilford, J.)

Wednesday, April 23, 2014

Determination of Unpatentability in CBM Review Does Not Warrant Relief From $391 Million Judgment

The court denied defendant's motion for relief from a judgment of more than $391 million based upon the PTAB's non-final decision during CBM review that the asserted claims were unpatentable. "Defendants assert that the PTAB has issued a non-final decision that the asserted claims are invalid. Of course, on the other hand, there is a final judgment in this case finding that the claims are valid. . . . Defendants have taken advantage of a full and fair opportunity to litigate the validity of the patent before this Court, before the jury, and before the Federal Circuit, even pursuing a writ to the United States Supreme Court. To hold that later proceedings before the PTAB can render nugatory that entire process, and the time and effort of all of the judges and jurors who have evaluated the evidence and arguments would do a great disservice to the Seventh Amendment and the entire procedure put in place under Article III of the Constitution. . . . Defendants rely heavily on the amount of the judgment in arguing for a stay. However, the jury’s damage award has been closely reviewed by both this Court and the Federal Circuit and found to be proper. There is also no showing that the amount of the judgment would cause undue harm to the Defendants."

Versata Software, Inc. et al v. SAP America, Inc. et al, 2-07-cv-00153 (TXED April 21, 2014, Order) (Payne, M.J.)

Tuesday, April 22, 2014

PTAB to Consider Whether Terminal Disclaimer Undermines Institution of IPR Based Upon BRI Standard

During a conference call, the Board ordered additional briefing on the patent owner's intent to file a terminal disclaimer of the remaining term of the challenged patent to avoid application of the broadest reasonable interpretation standard. "Patent Owner stated that it intends to file a terminal disclaimer of the remaining term of the [challenged] patent, such that the patent will be expired and the Board should not apply the broadest reasonable interpretation standard to the challenged claims. Patent Owner requested authorization, if the terminal disclaimer is filed, to file a motion to terminate the proceeding on the basis that the Board applied the broadest reasonable interpretation standard in the decision to institute this inter partes review. . . . Petitioner asserted that Patent Owner should have raised the issue in its response when Patent Owner had the opportunity to state how it believes the challenged claims should be interpreted. . . . The present situation appears to be an issue of first impression in inter partes reviews. As such, we are persuaded that briefing from the parties is warranted. . . . In their papers, the parties should state what action(s), if any, they believe the Board should take with respect to the terminal disclaimer and with respect to this proceeding in general."

Petition for Inter Partes Review by Amkor Technology, Inc., IPR2013-00242 (PTAB April 14, 2014, Order) (Arbes, APJ)

Monday, April 21, 2014

Targeting Declaratory Judgment Plaintiff’s Customers Creates Substantial Controversy

The court denied defendants' motion to dismiss plaintiff's declaratory relief action for lack of subject matter jurisdiction. "A real and substantial controversy existed when [plaintiff] filed suit. Defendants had sued a number of [plaintiff's] customers, based in part on their use of the Android platform developed by [plaintiff]. Defendants did not, however, name [plaintiff] as a defendant. This tactic of targeting the customers instead of the manufacturer 'infects the competitive environment of the business community with uncertainty and insecurity.' In response to the uncertainty caused by Defendants’ actions, [plaintiff] filed this declaratory judgment action to 'clear the air of infringement charges.'. . . [A]lthough Defendants later amended one of the [customer] actions to implicate [plaintiff] directly, they accused [plaintiff] of infringing only three of the seven of the patents at issue here. . . . Because the patent owners failed to 'grasp the nettle and sue,' [plaintiff] was justified in bringing the present action."

Google Inc. v. Rockstar Consortium US LP et al, 4-13-cv-05933 (CAND April 17, 2014, Order) (Wilken, J.)

Friday, April 18, 2014

In Determining Royalty Base, Accused Infringer Need Not Make or Sell the "Smallest Salable Unit"

The court denied plaintiff's motion to exclude the opinions of defendant's damages expert as to the smallest salable patent-practicing unit. "[Plaintiff] asserts that [the expert's testimony] should be excluded because [the expert] uses the baseband processor chips as the royalty base rather than the entire accused iPhones and iPads. . . . [Plaintiff] can point to no case that requires the smallest salable patent-practicing unit to be made or sold by the accused infringer. [Plaintiff] responds that [defendant], and not a third-party chip maker, participates in the hypothetical negotiation. However, in approaching a reasonable royalty negotiation with [plaintiff], [defendant] may well use the price of the baseband processor chips made by a third party as the starting point from which to apportion the patents’ value. . . . Interpreting the smallest salable patent-practicing unit doctrine to require that the accused infringer make or sell the smallest salable patent-practicing unit would, in circumstances where the accused infringer makes a multicomponent end product and the component manufacturer is not joined, render the smallest salable patent-practicing unit doctrine ineffective. A patentee should not be able to opt in or out of the smallest salable patent-practicing unit doctrine based on its decision of whom to sue."

GPNE Corp. v. Apple Inc., 5-12-cv-02885 (CAND April 16, 2014, Order) (Koh, J.)

Thursday, April 17, 2014

Sale of Infringing Heart Valves Preliminarily Enjoined Subject to Carve-Out for “Patients Who Cannot be Helped” by Plaintiff’s Devices

Following a jury verdict of willful infringement, the court granted plaintiffs' motion for a preliminary injunction to preclude defendant from selling its heart valves, subject to certain conditions to address the public interest. "The expert testimony suggests that patients with large annulus sizes must be allowed ongoing access to [defendant's valves]. The testimony also indicates that [defendant's valves] may be to some degree the safer, better option for most patients. . . . Nevertheless, the court cannot downplay the strong public interest favoring enforcement of patent rights. . . . [Defendant] disregarded the law in infringing [plaintiffs'] patent and boldly continued to thumb its nose at the law by continuing its conduct even after being found to be a willful infringer. The court cannot ignore the fact that it would serve as a reward of sorts to [defendant] and an incentive for onlookers to behave as [defendant] has should the court permit [defendant] to freely commence sales of its device. In light of all the relevant considerations, the court finds that the public interest weighs in favor of granting [plaintiffs] a preliminary injunction, subject to an accommodation for [defendant] to sell its devices to those patients who cannot be helped by [plaintiffs'] devices." Edwards Lifesciences AG et al v. Corevalve Inc., et al, 1-08-cv-00091 (DED April 15, 2014, Order) (Sleet, J.)

Wednesday, April 16, 2014

Turbo Coding Patent Not Invalid for Claiming Unpatentable Subject Matter

The court denied defendant's motion for summary judgment that plaintiff's turbo coding telecommunications patent was invalid for claiming unpatentable subject matter. "[Defendant] argues that Claims 1 and 10 do not meet the transformation prong of the MOT test because the 'mere manipulation of data' is insufficient to do so. . . . To characterize the methods disclosed in Claims 1 and 10 as 'calculations' based on well-known formulae misunderstands the fact that the claims in the [patent] are 'inventive application[s] of [ ] principle[s that] may be patented.' The claims explain how to perform a particular method of error correction and decoding -- they do not simply identify an abstract idea and instruct the reader to apply the idea. . . . the purpose of the [patent-in-suit] is to disclose a method for more accurate and efficient data transmission. . . . [The challenged claims] meet the eligibility standard under the patent laws."

France Telecom S.A. v. Marvell Semiconductor, Inc., 3-12-cv-04967 (CAND April 14, 2014, Order) (Orrick, J.)