Wednesday, December 30, 2009

Shifting Positions on Claim Construction Warrants Award of Attorneys' Fees for Additional Claim Construction Briefing

Where defendant changed its position regarding the construction of a term after two preliminary claim construction statements, the court ordered sua sponte that defendant pay plaintiff's attorneys' fees for briefing responding to the proposed new construction. "How to construe this phrase is a difficult question on which the Court could benefit from further briefing. Because [defendant's] misbehavior has made this additional briefing necessary, [defendant] should pay for it."

Northbook Digital LLC v. Vendio Services, Inc., 0-07-cv-02250 (MND December 28, 2009, Order) (Schiltz, J.)

Tuesday, December 29, 2009

Failure to Allege Time Period of Infringement Warrants Dismissal of Infringement Claim

The magistrate judge recommended granting defendants' motion to dismiss for failure to state a claim. "[Plaintiff] claims that defendants’ [product] infringes the patent-in-suit without alleging any facts as to when the infringement began or whether it has continued to this day. Against this, defendants show that they have not offered [the accused product] since 2002 – more than one year before the earliest filling date of the [patent-in-suit]. . . . Because proof that the [accused] product infringes the [patent-in-suit] would also prove that the product anticipates under 35 U.S.C. § 102(b), this court recommends granting defendants’ motion to dismiss."

Quantum Loyalty Systems Inc. et al. v. TPG Rewards Inc., 1-09-cv-00022 (DED December 23, 2009, Report & Recommendation) (Thynge, M.J.)

Monday, December 28, 2009

Patent Law Trumps Federal Rules of Evidence as to Admissibility of Expert Testimony

The court granted plaintiffs motion for a new trial on the issue of infringement and validity as to certain asserted patent claims because the jury was not instructed properly concerning unsupported expert testimony. The expert testimony in question "failed to identify any art that rendered [the claims at issue] obvious, to point out where any of the claims’ limitations are disclosed in the prior art, or to show how the prior art references in combination would make the claim obvious to a person of skill in the art at the relevant time." While such testimony complied with Rule 705 of the Federal Rules of Evidence, it did not comply with Koito Manufacturing Co., Ltd. v. Turn-Key-Tech, LLC, 381 F.3d 1142, 1149 (Fed Cir. 2004). "[The expert] was a qualified expert who testified that [the claims at issue] were obvious (the ultimate issue). True, he did not provide any basis for his opinion, but he was not then required to under Rule 705. What is more . . . [plaintiff] made no objection whatsoever to his opinion testimony on the ultimate issue of obviousness. One naturally would think (and as a teacher of evidence I certainly thought) this would be enough to bear the burden of going forward and to carry [defendant] to the jury [on the issue of obviousness]. Koito and the cases cited therein, however, make clear that, on the issues of anticipation, obviousness, and doctrine of equivalents, the unsupported opinion even of a qualified expert is simply not 'substantial evidence' adequate to support a jury verdict on those issues. . . . It never occurred to me that patent law trumped the Federal Rules of Evidence on the issue of obviousness. Now, recognizing my error, it is clear that the jury’s verdict cannot stand."

Newriver, Inc., v. Newkirk Products, Inc., 1-06-cv-12146 (MAD December 16, 2009, Order) (Young, J.)

Wednesday, December 23, 2009

Defendant Sanctioned for Fabricating Prior Art

Plaintiff's motion for sanctions against a defendant who fabricated prior art and "committed fraud on the court" was granted in part. The court did not strike defendant's claims and defenses, but instead struck all evidence concerning the fraudulent information. "[Defendant's expert and president of the company] fabricated a fake [product], and falsely identified it both as the 'commercial embodiment' of [another patent], and as 'prior art' to the [patent-in-suit]. Defendant also presented Plaintiff with photographs of the fake [product], and provided Plaintiff with a video and photographs of the testing of the fake [product], in what appears to have been an effort to deceive Plaintiff and this Court into believing that the fake [product] existed before the effective date of the [patent-in-suit]. . . . Moreover, it is not possible to conclude that these statements and representations were made in error because the evidence suggests that Defendant attempted to avoid answering questions about the fabricated evidence and did nothing to correct the obviously false statements."

Furminator, Inc. v. Kim Laube & Co., 4-08-cv-00367 (MOED December 21, 2009, Memorandum & Order) (Webber, J.)

Tuesday, December 22, 2009

Miscalculation of Deadline Due to Intervening Holiday Does Not Excuse Late Filing

Defendants' motion for attorneys' fees under Section 285 was stricken as untimely because defendants filed the motion one day late and failed to establish excusable neglect for their delay. "Defendants argue that their delay was due to a miscalculation given the intervening Thanksgiving holiday and the fact that the Court's Order did not state that the dismissal was 'with prejudice' . . . Defendants' miscalculation does not constitute excusable neglect. Furthermore, to the extent that Defendants were unclear about whether the Court's Order dismissing the case for lack of subject matter jurisdiction constituted a dismissal with prejudice, Defendants could have moved for clarification."

Juniper Networks, Inc. v. Graphon Corp. et al., 1-09-cv-00287 (VAED December 18, 2009, Order) (Lee, J.)

Monday, December 21, 2009

Use of Consulting Expert's Report in Infringement Contentions does not Waive Privilege as to Report

Attaching portions of a report by plaintiff's non-testifying consulting expert to plaintiff's infringement contentions did not waive any privilege applicable to the expert's report. "Contrary to defendants' assertions, plaintiff is not relying on the 'analyses, data, and conclusions' of [its non-testifying expert] as evidence to support its infringement contentions and proposed claim construction. The purpose of preliminary infringement contentions is to provide notice of the accusing party's specific theories of infringement. A contention, no matter how detailed, is not evidence."

Fast Memory Erase LLC v. Spansion Inc et al., 3-08-cv-00977 (TXND December 16, 2009, Memorandum Order) (Kaplan, M.J.)

Friday, December 18, 2009

Judge's Past Experience With Patents and Technology Support Transfer of Venue

In granting defendants' motion to transfer, the court found that "considering the eleven years of experience that the Delaware court, and specifically Chief Judge Sleet, has with the patents and associated technical issues involved in this case, this Court concludes that efficiencies will exist in the management of the case in Delaware."

Telcordia Technologies, Inc. v. Tellabs, Inc., 2-09-cv-02089 (NJD December 16, 2009, Opinion) (Greenaway, J.)

Thursday, December 17, 2009

Ashcroft and Twombly Do Not Require That Complaint Allege "How" Accused Products Infringe

Defendant's motion to dismiss for failure to state a claim was denied. "[Defendant] seeks to have [plaintiff], in its Amended Complaint, specifically describe how its products practice the claimed methods or systems. This is not the proper pleading standard even after [Ashcroft v. Iqbal 129 S.Ct. 1937 (2009)] and [Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955 (2007)]. The Federal Circuit has found that a complaint contains enough detail when it 'alleges ownership of the asserted patent, names each individual defendant, cites the patent that is allegedly infringed, describes the means by which the defendants allegedly infringe, and points to the specific sections of the patent law invoked.'"

WIAV Networks, LLC v. 3Com Corp. et al
., 5-09-cv-00101 (TXED December 15, 2009, Order) (Folsom, J.)

Wednesday, December 16, 2009

Plaintiff's Failure to Perform Pre-Suit Investigation Including "Essential Testing" Supports Award of Attorneys' Fees

Defendants' motion for a finding that the case was exceptional warranting an award of attorneys' fees was granted. "[Plaintiff] failed to make a proper pre-suit investigation. [Plaintiff's] allegation of infringement was based on nothing more than the 'structure' of the [accused products] and their supposed product labels, and on 'information and belief' that certain steps 'were' or 'may have been' performed. This is insufficient to support a claim of infringement, both in light of [plaintiff's] burden of showing the precise manufacturing methods that were used, and in light of [plaintiff's] admission that the existence of the heat treating step essential to nearly every asserted claim could only be established through test results that [plaintiff] never obtained."

International Intellectual Management Corporation v. Lee Yunn Enterprises, Inc. (U.S.A.) et al., 2-08-cv-07587 (CACD December 14, 2009, Order) (Real, J.)

Tuesday, December 15, 2009

3D Computer Graphics Patents Deemed Invalid Under In re Bilski

Patents "directed to improving 3D computer graphics 'through provision of an improved method for performing visibility calculations'" were invalid under In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc), cert. granted, --- U.S. ---, 129 S.Ct. 2735 (2009) because they failed to claim patentable subject matter. "[Plaintiff] concedes that its patent claims are not transformative, but nevertheless argues that they are tied to a particular machine; to wit, a computer. . . . The claim language clearly states that these claims are drawn to mathematical calculations and algorithms for calculating whether certain surfaces are visible or invisible in 3D computer graphics. This is exemplified by the language of the claims, which specify a sequence of calculations that involve 'identifying,' 'comparing,' 'determining,' and 'ignoring' data. Though the calculations may be 'performed on a computer,' they are not tied to any particular computer. For these reasons, the claims of the [patents-in-suit] fail to pass muster under the Bilski machine implementation test for patentability under 35 U.S.C. § 101."

Fuzzysharp Technologies Inc. v. 3DLabs Inc. Ltd.,
4-07-cv-05948 (CAND December 11, 2009, Order) (Armstrong, J.)

Monday, December 14, 2009

Apple Strikes Back

In late October, Nokia sued Apple for alleged infringement of ten patents related to mobile phone technology. Last Friday, Apple filed its answer, defenses, and counterclaim, containing the usual denials and defenses and the claim that "to the extent [Nokia's patents] are construed by the court as essential . . . Nokia is obligated by commitments it made to Standards Setting Organizations . . . to license those patents on Fair, Reasonable, and Non-Discriminatory . . . terms." Apple also filed a counterclaim asserting that Nokia infringes thirteen Apple patents. In an introductory statement, Apple states that Nokia's suit is an "attempt by Nokia to leverage patents previously pledged to industry standards [and] an effort to free ride on the commercial success of Apple's innovative iPhone while avoiding liability for copying the iPhone and infringing Apple's patents."

Nokia Corporation v. Apple Inc., 1-09-cv-00791 (DED December 11, 2009) (Apple Inc.'s Answer, Defenses, and Counterclaims)

Friday, December 11, 2009

Yahoo! to Pay 23% Ongoing Royalty for Future Infringement

In determining an ongoing royalty rate for defendant's post-verdict infringement through a "colorable variation" of the adjudicated product, the court imposed plaintiff's proposed rate of 23% where the jury had based its damages on a rate of 20%. "The Federal Circuit has instructed that post-verdict infringement should typically entail a higher royalty rate than the reasonable royalty found at trial. [T]he Court adopts a methodology that recognizes the effect of a jury verdict on the parties’ bargaining position as they enter into a hypothetical negotiation."

Creative Internet Advertising Corp. v. Yahoo! Inc. et al., 6-07-cv-00354 (TXED December 9, 2009, Memorandum & Opinion) (Love, M.J.)

Thursday, December 10, 2009

In re TS Tech, In re Genentech, and In re Volkswagen Do Not Provide "New Grounds" for Transfer of Venue

Defendant's motion to transfer venue for convenience was denied. In an earlier case, the court denied defendant's motion to transfer venue and in connection with a subsequent dismissal without prejudice the parties agreed that venue would be in the Eastern District of Texas unless there were "new grounds" for transfer. In the instant case, the court rejected defendant's argument that In re Volkswagen of America, Inc., 545 F.3d 304 (5th Cir. 2008), In re TS Tech USA Corp., 551 F.3d 1315 (Fed. Cir. 2008), and In re Genentech, 566 F.3d 1338 (Fed. Cir. 2009) provided "new grounds" for transfer. "Although the new cases clarified the standard for obtaining a venue transfer, these cases continue to apply the same public and private interest factors in evaluating § 1404(a) transfer motions. Indeed, the Federal Circuit has stated that it was applying well settled Fifth Circuit law."

Financial Sytems Tech. (Intellectual Property) Pty. Ltd. et al. v. Oracle Corp., 2-08-cv-00371 (TXED December 8, 2009, Memorandum Opinion & Order) (Everingham, M.J.).

Wednesday, December 9, 2009

Assignment Executed by Incorrect Entity Nevertheless Conveyed "Substantial Rights" to Patent Sufficient to Vest Plaintiff with Standing

Defendant's motion to dismiss for lack of standing was denied notwithstanding an error in the assignment of the patent rights -- "the correct officer signed the . . . Assignment on behalf of the incorrect entity" -- that was not corrected until after suit was filed. "[T]he correct officer who signed the . . . Assignment, who was at the time an officer of [two companies], signed the assignment on behalf of the wrong entity, thereby creating a clerical error in the . . . Assignment. . . . The Court finds that [plaintiff] did have enforceable rights to the patents-in-suit when it brought this lawsuit. The Court finds that this ownership vested [plaintiff] with constitutional standing to bring this lawsuit."

Southwest Efuel Network, L.L.C. v. Transaction Tracking Technologies, Inc
., 2-07-cv-00311
(TXED December 7, 2009, Memorandum Opinion & Order) (Ward, J.)

Tuesday, December 8, 2009

Determination Of Commercial Offer For On-Sale Bar Does Not Include Course of Dealing or Industry Practice

The court granted Honeywell's motion for summary judgment of invalidity based on the on-sale bar. In doing so, the court rejected Honeywell's argument that its Proposal submitted in response to Boeing's Request for Proposal was not a commercial offer even though it "express[ed] firm and definite commitments regarding, among other things, price and delivery [terms]." "Honeywell contends that this detailed proposal was not an offer, based on the 'longstanding business relationship between Honeywell and Boeing, as well as the industry custom and norm in the context of the proposal phase of a complex, developmental project' . . . In the Court's view, however, the fact that further negotiations might arise, or even be expected, does not preclude the . . . Proposal from being an invalidating offer where, as here, the . . . Proposal contained the essential terms of an offer and Honeywell manifested its intent to make an offer to Boeing."

Honeywell Intl Inc., et al. v. Audiovox Corp., et al.,
1-04-cv-01337 (DED December 4, 2009, Memorandum Opinion) (Farnan, J.)

Monday, December 7, 2009

Apple Overturns Willfulness Verdict in Post-Trial Motions

Defendant's motion for judgment as a matter of law regarding willful infringement related to a $19 million verdict was granted despite the jury's finding that defendant's infringement was willful. "Although [defendant's] invalidity and noninfringement arguments were unsuccessful, these defenses were strong enough to preclude a finding of objective recklessness. . . . [Defendant] presented a good faith argument that the [patent-in-suit] was invalid as anticipated. . . . Although the jury rejected this defense, the issue was, viewed objectively, sufficiently close to preclude a finding of willful infringement."

OPTi, Inc. v. Apple, Inc.,
2-07-cv-00021
(TXED December 3, 2009, Memorandum Opinion & Order) (Everingham, M.J.)

Friday, December 4, 2009

Defendants' Website, Marketing Activities, and Single $29.95 Sale of Accused Service Warrant Exercise of Personal Jurisdiction

"Defendants have sold at least one allegedly infringing product, provided two samples of the allegedly infringing product free of charge, maintain an ongoing license with at least one district member, have contacted members to solicit business, maintain an internet website accessible by district members, and conduct Internet advertising accessible by district members. . . . The cause of action for patent infringement is alleged to arise out of these activities. . . . Any burden on Defendants in having to litigate this case in Texas is not sufficiently compelling to outweigh Plaintiffs' and Texas's interest in adjudicating this case in Texas."

Absolute Software, Inc. et al v. World Computer Security Corporation et al.,
1-09-cv-00142 (TXWD December 2, 2009, Order) (Yeakel, J.)

Thursday, December 3, 2009

Howrey Disqualified From Representing Boston Scientific In New Jersey, But Not Delaware

The court granted plaintiff's motion to disqualify Howrey as defense counsel even though another court denied a parallel motion in a case involving the same parties and counsel. "Judge Robinson held that even though there was a violation of Rule 1.7 of the American Bar Association’s Model Rules of Professional Conduct (“Rule 1.7"), disqualification of Howry as counsel for [defendant] was not appropriate because Howry’s ethical screen was a sufficient measure to deal with the violation in the District of Delaware." Applying New Jersey law, the court held that a violation of the rule required disqualification. "Given the violation of Rule 1.7, this Court finds that disqualification is appropriate here. The Court therefore need not engage in an analysis of whether [plaintiff's] alleged 'obfuscatory' conduct in causing the conflict of interest justifies disqualification."

Wyeth et al. v. Abbott Laboratories et al., 3-08-cv-00230
(NJD December 1, 2009, Letter Order) (Bongiovanni, M.J.)

Wednesday, December 2, 2009

Late Amendment of Contentions: Denied as to New Patent, Granted as to New Prior Art

Plaintiff's motion for leave to serve amended infringement contentions, asserting infringement of an additional patent, was denied because defendant made its source code available a month before plaintiff's supplemental contentions were due and plaintiff waited more than four months after that date to seek leave to amend its infringement contentions. "[Plaintiff] has not shown that its delay in adding [a] Patent was reasonable based on the amount of time it had to inspect [defendant's] source code." However, defendant's motion for leave to supplement its invalidity contentions was granted. "[T]he Court notes that the addition of prior art references post Markman do not have the same implications as the addition of an entirely new patent. Any potential prejudice that [plaintiff] may suffer as a result of [defendant] amending its invalidity contentions would likely arise in connection with the [upcoming] discovery deadline. This potential prejudice can easily be cured with an appropriate continuance of the discovery deadline if needed."

Sybase, Inc. v. Vertica Systems, Inc., 6-08-cv-0024
(TXED November 30, 2009, Memorandum Opinion & Order) (Davis, J.)

Tuesday, December 1, 2009

Divided Infringement: Outsourcing Accused System Warrants a Finding of Noninfringement as to Both System and Method Claims

Defendant's "natural language interactive voice response system" did not infringe the asserted system and method claims of plaintiff's speech recognition patents because defendant outsourced its voice response system to a vendor who "without input from [defendant], [was] responsible for choosing, configuring, and operating the architecture, hardware, and speech recognition software relating to the [voice response system]." "[Plaintiff] reasons that DirecTV put the system into service because (i) DirecTV owns the telephone number required to access the system, (2) the system is designed to serve DirecTV's customers, (3) the system accesses DirecTV's backend accounting system for customer data and movie titles, and (4) DirecTV owns a website. . . . But even if such facts were true, as a matter of law they are unrelated to putting the claimed technology into service. DirecTV does not control any of the hardware or software associated with [the vendor's] accused platform or claimed in [plaintiff's] patents and thus cannot put the claimed invention into service."

Phoenix Solutions, Inc. v. The Directv Group, Inc.,
2-08-cv-00984 (CACD November 23, 2009) (Pfaelzer, J.)

Monday, November 30, 2009

eBay Policy Concerning Sales of Infringing Products Necessitates Injunctive Relief

Plaintiff's motion for a permanent injunction upon the court's entry of default was granted. "[I]n the absence of an injunction, of which [defendant] will certainly receive notice, [defendant] may continue to infringe by selling the [accused products] on eBay without being forced to stop. This is because eBay has recently begun to require proof of an injunction prior to removing infringing items from its website. Without an injunction, [defendant] could continue to market his infringing product online and if sued again, could again refuse to answer the complaint."

Zen Design Group, Limited v. Clint, 2-08-cv-14309
(MIED November 23, 2009, Opinion and Order) (Murphy, J.)

Wednesday, November 25, 2009

Lower Standard of Review by PTO Does Not Warrant Denial of Stay Pending Reexamination

Defendant's motion to stay pending reexamination was granted. "[Plaintiff's] contentions regarding the lower standard of review on reexamination and the possibility that it will create a binding record in that proceeding are inapposite. That the USPTO will invalidate a patent according to a lower standard than in the courts only reflects that after undergoing a thorough review by the USPTO, which has an abundance of technical and legal expertise, patents enjoy a higher presumption of validity in subsequent lawsuits. [Plaintiff] cannot, therefore, be prejudiced by the very procedures that allow it to claim monopoly rights in the first instance."

Card Activation Technologies, Inc. v. Bebe Stores, Inc.,
1-09-cv-00406 (ILND November 20, 2009, Minutes) (Gottschall, J.)

Tuesday, November 24, 2009

Ten Year Delay And Silence Trigger Laches But Not Equitable Estoppel

Defendant was sufficiently prejudiced by plaintiff's ten year delay in filing suit to trigger laches. "If [plaintiff] had claimed that [defendant] infringed the . . . Patent in the 1990s, [defendant] would have stopped producing [the accused products] because it had not invested much money in the products at that time. . . . Although the court found that laches applied, the defendant did not meet the greater standard for equitable estoppel. "While [defendant] manufactured [the accused products] for over ten years, [plaintiff] stood by silently, never threatening to bring suit for infringement of [its] patent or even demanding that [defendant] purchase a license for the patent. . . . Equitable estoppel requires more. It requires that the plaintiff take some misleading action beyond mere silence."

Integrated Cards, L.L.C. v. McKillip Industries, Inc., 1-06-cv-02071
(ILND November 19, 2009, Memorandum Opinion & Order) (Kendall, J.)

Monday, November 23, 2009

Evidence of Pending Reexamination Proceeding Excluded from Trial

Plaintiff's motion in limine concerning evidence of a pending reexamination was granted. "[E]ven if the reexamination proceedings are somehow relevant on the issues of obviousness or willfulness, they are nevertheless unfairly prejudicial. . . . [B]ecause the reexamination proceedings before the USPTO are still incomplete and based solely on the evidence provided by [defendant] in its replacement request for reexamination, there is very little probative value to the grant of reexamination. On the other hand, the prejudicial effect as well as potential for jury confusion is great."

Presidio Components Inc. v. American Technical Ceramics Corp.,
3-08-cv-00335 (CASD November 13, 2009, Order) (Gonzalez, J.)

Friday, November 20, 2009

Success Rates for Permanent Injunction after eBay v. MercExchange

Since January 2008, 93 orders have been issued in patent infringement cases on motions seeking permanent injunctive relief. Of those motions, 63% were granted and another 9% were granted in part. The remaining 28% were denied. The break-down by result is displayed below.

Docket Navigator beta testers can click the following links to see the actual results, including the underlying orders and summaries

Granted: 58
Denied: 22
Denied without prejudice: 3
Partial: 8
Denied as moot: 2

Try the Docket Report today for free. No strings attached. No pushy sales. And we’ll NEVER share your email address. Click the link in the top right of this page to send a request.

In re Seagate's "Objective Recklessness" Test Does Not Render Defendant's Knowledge of Patent Irrelevant to Willfulness

In granting plaintiff's motion for enhanced damages, the court took into account whether defendant knew of plaintiff's patent and formed a good faith believe as to invalidity or noninfringement. "[Defendant] maintains that this factor is irrelevant under [In re Seagate 497 F.3d 1360 (Fed. Cir. 2007)], in which the Court 'abandon[ed] the affirmative duty of due care,' and held that an infringer's state of mind is not relevant to the objective inquiry of willful infringement, but points to no authority for this proposition. Courts post-Seagate have continued to apply this factor in determining whether enhancement is appropriate. . . . [Defendant] had actual knowledge of the [patent-in-suit], and the . . . patent licensed by [defendant] refers to the [plaintiff's] patent. [Defendant] need not have conducted a full-blown investigation; it need only have looked at what was already before it."

Krippelz v. Ford Mtr Co., 1-98-cv-02361
(ILND November 18, 2009, Memorandum Opinion & Order) (Zagel, J.)

Thursday, November 19, 2009

Defendants' Delay Sinks Bid to Stay Pending Reexam

The court denied defendant's motion to stay pending reexamination even though a parallel lawsuit involving the same patents was stayed pending reexamination. "[Defendant] unreasonably delayed in seeking a stay, causing undue prejudice to [plaintiff]. . . . [Defendant] waited approximately ten months [after the reexamination requests for two of the six patents-in-suit were granted] to request a stay in this case. During that time, [plaintiff] prepared for and participated in a tutorial and claim construction hearing, noticed or defended 50 depositions, filed or responded to more than twenty briefs relating to [defendant's] failed transfer motion and [defendant's] multiple motions to amend its invalidity contentions, pursued fact discovery, and is now conducting expert discovery. . . . For these reasons, the Court finds a stay at this time would be highly prejudicial to [plaintiff] and would waste the time, effort, and expense expended by [plaintiff] since the reexaminations were filed."

Motorola Inc. v. Vtech Communications, Inc. et al
., 5-07-cv-00171
(TXED November 17, 2009, Order) (Craven, M.J.)

Wednesday, November 18, 2009

Court Strikes Summary Judgment Motions Sua Sponte for Circumventing Page Limits Rule

Sua sponte, the court struck plaintiff's four summary judgment motions. "Local Rule 7-2(b) provides that a motion may not exceed twenty-five pages in length. . . . In an attempt to circumvent the page limits imposed by the Local Rules, [plaintiff] filed four Summary Judgment Motions, which collectively total fifty-nine pages in length. While each motion purports to address different issues, all of the motions pertain to the same patents-in-suit and should therefore have been presented in a single motion."

Aircraft Technical Publishers, Inc. v. Avantext, Inc., 4-07-cv-04154
(CAND November 16, 2009, Order) (Armstrong, J.)

Tuesday, November 17, 2009

Complaint Alleging Sale of Infringing "Goods" Fails to State a Claim of Patent Infringement

Defendants' motion to dismiss for failure to state a claim was granted. "Plaintiff alleges that 'defendants were selling goods that infringe upon Plaintiff’s . . . patent.'. . . [T]hese allegations are all too conclusory to support a claim under [Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 555 (2007)] and [Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (May 18, 2009)]. And while Plaintiff attaches a sales receipt to the Complaint and argues that the receipt 'show[s] the goods that are the subject of an infringing transaction,' the Complaint 'does nothing to establish that the referenced transaction has anything whatsoever to do with patent infringement.'"

Li Ming Tseng v. Marukai Corporation USA et al., 8-09-cv-00968
(CACD November 13, 2009, Order) (Guilford, J.)

Monday, November 16, 2009

Court's Prior Experience With Patents-in-Suit Does Not Override First-to-File Rule

Defendant's motion to dismiss in favor of a first-filed action in Delaware was granted. The location of witnesses favored venue in Delaware and the court's prior experience with the patents did not override the first-to-file rule. "[Plaintiff] points out that the Court has presided over cases involving the patents in suit. . . . Additionally, the Court has a pending case . . . involving all of the four patents in suit. However, the Federal Circuit has held that a court’s prior experience with the patents in suit does not favor it as a forum in the absence of 'ongoing litigation requiring consolidation.' Here, [plaintiff] has made no arguments concerning the consolidation of this case with [the other], which involves different defendants and different accused products."

Multimedia Patent Trust v. Tandberg, Inc., 3-09-cv-01377
(CASD November 11, 2009, Order) (Huff, J.)

Friday, November 13, 2009

Tax Refund Loan Patents Deemed Invalid Under In re Bilski

The magistrate judge recommended granting summary judgment of invalidity as to patents claiming a "computerized system" consisting of a computer and "certain financial relationships between entities" for failing to claim patentable subject matter under In re Bilski, 545 F.3d 943, 950-51 (Fed. Cir. 2008) (en banc), petition for cert. granted, 129 S.Ct. 2735 (2009). "A financial relationship is simply an abstract intellectual concept. Absent the recitation of a computer, the [patent-in-suit] would certainly claim unpatentable subject matter. . . . The computer component is not a particular, special-purpose machine; it is capable of no more than storing and retrieving data memorializing associations. The computer is an insignificant, extra-solution component of the claimed system. . . . If an extra-solution step is insufficient to render an otherwise unpatentable process claim valid, then by analogy an extra-solution component is insufficient to render an otherwise unpatentable 'system' claim valid."

H&R Block Tax Services, Inc. v. Jackson Hewitt Tax Service, Inc.,
6-08-cv-00037 (TXED November 10, 2009, Report and Recommendations) (Love, M.J.)

Thursday, November 12, 2009

Failure to Disclose Pending Reexamination Warrants Monetary Sanctions Against Nondisclosing Party and Counsel

Defendant and its former counsel of record were sanctioned for failing to disclose to the court and opposing counsel the existence of a reexamination proceeding concerning the patents-in-suit. The court awarded plaintiff its "Markman-related" costs and fees that would not have been incurred had the reexamination been disclosed and apportioned such fees and costs between defendant and its former counsel on an 80%/20% basis. Plaintiff sought sanctions in the amount of $800,000, but the court declined to determine the amount of damages until the conclusion of the reexamination proceeding. "Sanctions under Rule 37(c) are allowed to the extent of the damages 'caused by the failure'; here, the failure to supplement. Until the re-examination proceedings are complete, it is unknown how much of the work [plaintiff] has spent, and how much in costs and fees associated therewith have been wasted, and thus how much 'damages' have been incurred as a result." The court did not sanction defendant's current counsel because there was no evidence that current counsel knew of the reexamination proceeding until immediately prior to disclosure of that fact to the court and opposing counsel.

Allflex USA Inc v. Avid Identification Systems Inc., 5-06-cv-01109
(CACD October 30, 2009, Order) (Larson, J.)

Wednesday, November 11, 2009

Permitting Competition in One-Product Market Does Not Create Irreparable Harm Warranting Preliminary Injunction

In denying plaintiff's motion for a preliminary injunction, the court found no irreparable harm. "It is true that we are concerned with a one-product market. . . . If a second product is allowed into the market, the [plaintiff's] system will lose market share. Granted. But it will be reasonable and practical to estimate the extent of damages, given the track record over the last seven years. If plaintiff prevails at trial, then damages will reparable and defendant will be able to respond to an award -- or at least no convincing showing has been made to the contrary."

Conceptus, Inc. v. Hologic, Inc.,
3-09-cv-02280
(CAND November 6, 2009, Order) (Alsup, J.)

Monday, November 9, 2009

Local Interests Favor Transfer of Dispute Between Swedish Plaintiff and Pennsylvania Defendant to Pennsylvania

In recommending a grant of a Pennsylvania defendant's motion to transfer venue from the Western District of North Carolina, Asheville Division, to the Western District of Pennsylvania, the magistrate judge found that the "interest in having localized controversies settled at home" favored transfer. "[T]he court places itself in the shoes of a juror and asks the question that every juror asks, which is 'why was I called away from work or my home to hear this case?' Beyond civic duty, which is present in every district, the answer in this case would be hard for a juror to take: to resolve a dispute between a Pennsylvania and a Swedish Company concerning a product that is not manufactured [in North Carolina] and was purportedly invented by people who live very far away. . . . The overriding localized interest would be in Pennsylvania, where jurors will likely be familiar with places like Latrobe [Pennsylvania] as that town appears to be the locus of defendant’s business activities and the place from which many of the witnesses in this action are likely to live."

Sandvik Intellectual Property AB v. Kennametal Inc., 1-09-cv-00163
(NCWD November 5, 2009, Memorandum and Recommendations) (Howell, M.J.)

Friday, November 6, 2009

Motion for Claim Construction Denied Because the Parties Failed to Show Why Construction was Necessary

The parties' motions for claim construction were denied for failing to comply with the court's pretrial order requiring the parties to "persuade the court that construction of each specified term is necessary to resolve a disputed issue concerning infringement or invalidity." "The reason for the order is not to require parties to parrot its language before the court construes claim terms; it is to avoid devoting judicial resources to the issuance of advisory opinions on the construction of claim terms about which the parties have no concrete dispute. Claims construction is not an academic exercise. As much as the parties may hate to show their hands at this early stage, they must do so if they hope to seek the benefit of claim construction before filing motions for summary judgment."

Semiconductor Energy Lab. Co., Ltd. v. Samsung Elect. Co., Ltd. et al.,
3-09-cv-00001 (November 4, 2009, Order) (Crabb, J.)

Thursday, November 5, 2009

Failure to Include Prior Art in Invalidity Contentions Excused Where Defendant Possessed Diagram of Prior Art Before the Disclosure Deadline ...

But Lacked Knowledge of its Significance

Defendant's motion for leave to amend its invalidity contentions to include additional prior art was granted. "[T]he parties do not dispute that Defendant had knowledge of [the prior art] in its diagramed form before the [deadline to serve a prior art list]. Defendant never concealed that it believed that the hand-drawn diagram of the [prior art] is relevant to its invalidity defense. Nevertheless, having knowledge or possession of a hand-drawn diagram is different than having knowledge of relevant prior art. A hand-drawn diagram without more does not warrant the conclusion that the diagramed item was an invention that 'was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.'"

Regalo International, LLC v. DEX Products, Inc., 08-cv-04206
(MND November 3, 2009, Order) (Boylan, J.)

Wednesday, November 4, 2009

Court Has Subject Matter Jurisdiction to Hear Constitutional Challenge to Gene Patent

The court denied defendant PTO's motion to dismiss for lack of subject matter jurisdiction plaintiffs' complaint alleging that patents claiming genes used in breast cancer testing were invalid as unconstitutional. "While the USPTO notes the existence of a comprehensive scheme to redress violations of the Patent Act, it cites to no comparable statutory scheme providing a remedy for persons who complain about the constitutionality of patents issued by the USPTO and/or the policies and practices of the USPTO. . . . The novel circumstances presented by this action against the USPTO, the absence of any remedy provided in the Patent Act, and the important constitutional rights the Plaintiffs seek to vindicate establish subject matter jurisdiction. . . ."

Association For Molecular Pathology et al. v. USPTO et al.,
1-09-cv-04515 (NYSD November 2, 2009, Opinion) (Sweet, J.)

Tuesday, November 3, 2009

Infringing Sales Following Jury Verdict of Infringement Warrant Enhanced Damages

The court granted plaintiff's motion for enhanced damages for sales of infringing products occurring between the jury's verdict of infringement and entry of a permanent injunction. "The weight of the evidence supporting the jury verdict for [plaintiff] . . . the lack of evidence to support a finding of invalidity, the fact that the jury found against Defendants on this issue, and the deferential standard of review applied to a jury verdict, establish an objectively high likelihood that even after any appeals are concluded, sales of the accused products will constitute infringement of one or more valid claims. . . . The court further finds . . . that the $400.00 per unit reasonable royalty found by the jury should be enhanced to $500.00 per unit for sales of infringing products occurring between trial and the date the injunction is entered."

Cummins-Allison Corp. v. Shinwoo Information & Telecomm. Co., Ltd. et al.,

9-07-cv-00196 (TXED October 30, 2009, Order) (Clark, J.)

Monday, November 2, 2009

Case Not Exceptional In Light of Prevailing Defendant's $1.9 Million Post-Markman Attorneys' Fees

Following a grant of summary judgment of noninfringement, the court denied defendant's motion for attorneys' fees incurred after the court's claim construction ruling and rejected defendant's arguments that discovery disputes and plaintiff's failure to dismiss following claim construction made the case exceptional. "Annoying as the discovery disputes were, they are not so unusual as to make this an exceptional case. The term 'exceptional' means just that. . . . Moreover, it is suspect that this case was so obviously baseless after the court’s claim construction ruling when one considers the $1.9 million defendant spent in fees and costs after the ruling. It is puzzling how this case could have required such expenses if it was so clear that a simple motion for summary judgment based only on the two relevant constructions would have brought the case to the end."

WNS Holdings, LLC et al v. United Parcel Service, Inc., 3-08-cv-00275
(WIWD October 29, 2009, Order) (Crabb, J.)

Prior Art Teachings May be Combined to Show Obviousness Even if Prior Art Structures Cannot be Physically Combined

In granting defendants' motion for summary judgment of invalidity for obviousness, the court rejected plaintiff's argument that it "would not have been obvious to a person of ordinary skill in the art to combine [prior art references] because of structural differences" between the references. "Contrary to Plaintiffs' assertions . . . it is not necessary to show that each and every element of a prior art reference can be incorporated into an invention in order to make that invention obvious. A reference can be considered for everything it teaches, not only for the invention it claims. . . . It is thus unnecessary for Defendants to establish that the appropriate elements of [one prior art reference] could be incorporated into [another prior art reference] without altering their structures."

Tokai Corp et al. v. Easton Enterprises Inc et al., 5-07-cv-00883
(CACD October 23, 2009, Order)(Phillips, J.)

Thursday, October 29, 2009

Litigation Over Ownership of Patent Bars Later Infringement Claims as to Related Patent

Defendant's motion to dismiss on the basis of claim preclusion was granted where, in an earlier litigation concerning ownership of a related patent and misappropriation of trade secrets, plaintiff was awarded damages and defendant was awarded the related patent. "[A]ll of the facts relevant to [plaintiff's] patent infringement claim were known [11 years ago] when [defendant] initiated the declaratory judgment action that ultimately led to [plaintiff's] recovery on its trade secret misappropriation and fraud claims. Prior to [that earlier] litigation, [plaintiff] obtained an [accused product] with which it could have done an infringement analysis against the [patent-in-suit]. Therefore, [plaintiff] could have brought its patent infringement claim then."

SLR Partners, LLC et al. v. B. Braun Medical Inc., 3-09-cv-01145
(CASD October 26, 2009, Order) (Miller, J.)

Wednesday, October 28, 2009

Counsel Asserting and Later Withdrawing Privilege Objections Ordered to Pay Costs of Additional Deposition

The court ordered plaintiff's counsel to pay defendant for all costs associated with taking another deposition of a witness. "[The witness'] deposition is ninety-seven pages long. [Plaintiff] asserted privilege and/or work product ninety-seven times. Ninety-five of these assertions have now been waived. [Plaintiff's] conduct is unacceptable."

Davis-Lynch Inc v. Weatherford Int'l Inc.,
6-07-cv-00559
(TXED October 26, 2009, Order) (Love, M.J.)

Tuesday, October 27, 2009

Witness Excused for Medical Condition, Barred From Further Testimony

Defendant's motion to have its witness excused from deposition and trial because of a medical condition was granted. "However, because it is not clear from the [letter from the witness' physician] how the diagnosed condition is affecting [the witness'] daily life, sanctions will be imposed against [defendant] in this case if [the witness] provides any testimony (through a declaration, a deposition or at trial) in any other case involving the patents at bar." The court stated it would "consider sanctions ranging in severity from the imposition of an adverse inference to the imposition of the costs of a new trial to the imposition of an adverse judgment."

Genetics Institute LLC v. Novartis Vaccines and Diagnostics Inc., 1-08-cv-00290
(DED October 23, 2009, Order) (Robinson, J.)

Monday, October 26, 2009

EDTX Meet & Confer Rule for Discovery Motions Requires Participation by "Lead Counsel"

Defendants' motion to compel the production of patent prosecution files from plaintiff's outside attorneys was denied without prejudice because lead counsel did not participate in the "personal conference" required by the court's local rule. "Pursuant to Local Rule CV-7(h), prior to seeking court intervention, lead counsel for the movant must have a personal conference with the lead counsel for the non-movant. . . . [I]n the Certificate of Conference, Defendants identified [an attorney] as 'lead counsel for the Defendants,' when [a different attorney] is listed on the Court’s docket as Defendants’ lead attorney. [The third party] accurately points out that this is in violation of the certification components set forth in Rule CV-7(i) that requires all elements of Rule 7(h) to be met, as well as the stipulation that in discovery-related motions, the Certificate of Conference must be signed by lead counsel. The Court sees no reason that the 'lead counsel' signing a Certificate of Conference should not be the same attorney that is designated as lead counsel on the Court’s docket sheet. . . . [B]oth parties are reminded that 'unavailability' is no excuse for lead and local counsel’s failure to participate in discovery."

Konami Digital Entertainment Co, Ltd. et al. v. Harmonix Music Systems, Inc. et al., 6-08-cv-00286
(TXED October 22, 2009, Memorandum & Opinion) (Love, M.J.)

Friday, October 23, 2009

Expert's Failure to "Originate, Author or Understand" His Own Written Opinions Did Not Warrant Exclusion of Testimony

The court denied plaintiff's motion to exclude the reports and testimony of defendant's technical expert on the grounds that the expert "did not originate, author or understand several of his opinions." "[Plaintiff] cites excerpts from [the expert's] deposition to show that 1) he could not recall exactly how many reports he had signed, 2) did not know which opinions that he had expressed in each of his reports, 3) could not identify the differences between the various reports, 4) did not know that a legal section was added to his third invalidity report, 5) did not understand the difference between 'obviousness' and 'anticipation' with respect to invalidity, 6) was generally unfamiliar with the [patent-in-suit], 7) has a personal relationship with the owners of [defendant's] predecessor, 8) took no part in collecting scales allegedly exhibiting prior art or determining which of those scales should be relied upon in his supplemental report and 9) in at least one instance, examined photographs of a scale and not the scale itself. . . . [A]lthough [the expert's] nervousness, confusion and difficulty answering legal questions may provide grounds to impeach his credibility, they are not grounds to strike him as an expert witness. . . . [The expert] . . . averred that he reached all of the opinions stated in his reports and reviewed all of his reports before signing them. In light of this, it would be up to the jury to decide whether and how much to trust [the expert's] admissible opinions."

Sunbeam Products, Inc. v. HoMedics, Inc., 3-08-cv-00376
(WIWD October 15, 2009, Order) (Crocker, M.J.)

Thursday, October 22, 2009

Judge Sleet Imposes "Limit of 10 Disputed Terms Per Patent" Rule

The court struck the parties' join claim construction chart and ordered them to file an amended version. "The parties have submitted for construction 19 terms from [the patent-in-suit]. Although disinclined to do so in the past, the court -- regrettably -- will impose a limit of 10 disputed terms per patent for claim construction in this and all future patent actions."

Grape Technology Group Inc. et al. v. Jingle Networks Inc.,
1-08-cv-00408 (DED October 20, 2009, Order) (Sleet, J.).

Wednesday, October 21, 2009

Reported In today's Docket Report:

14 new patent cases

1 monetary award

2 claim terms construed

1 patent determination

10 rulings in 8 cases

For a free trial, send an email to trial@docketnavigator.com

Submission of False Affidavit to PTO Does Not Support Inequitable Conduct Claim Without Allegations of Facts Sufficient to Infer Intent to Deceive

Plaintiff's motion for leave to amend its complaint to include a claim for inequitable conduct was denied even though the request was made shortly after plaintiff learned that one inventor submitted a false affidavit to the PTO. "[T]here is no allegation that the affiant at bar did not contribute to the invention, or that the application that matured into the [patent-in-suit] contains otherwise false representations. I certainly recognize that candor is the hallmark of the patent system and that false statements, about even ministerial acts, can have significance as to the survival of a patent in the review process. Nevertheless, I decline to allow an inequitable conduct claim to be pursued after the close of discovery when there are insufficient allegations of underlying facts from which I may reasonably infer that the material misrepresentation was made with a specific intent to deceive the PTO."

Robert Bosch LLC v. Pylon Manufacturing Corp., 1-08-cv-00542
(DED October 19, 2009, Memorandum Order) (Robinson, J.)

Tuesday, October 20, 2009

Is previously undisclosed prior art admissible at trial to show the state of the art? It depends on the court.

Plaintiffs' motion in limine to exclude defenses and prior art disclosed 31 days before trial was granted in part. "[Defendant argued] that the evidence disclosed in its §282 Notice is intended to show only the 'state of the art' and not prior art, which would exempt it from disclosure under Local Patent Rules 3.1 and 3.4. . . . I do not find this argument persuasive. It is not up to a party to decide if and/or when it would like to comply with the Local Patent Rules. If [defendant] intended to use publications/documents to establish the state of the prior art, then it was required to disclose them over two years ago."

Emcore Corp. et al. v. Optium Corp.,
2-07-cv-00326
(PAWD October 16, 2009, Order) (Ambrose, J.)


Plaintiff's motion in limine to exclude certain prior art was granted in part. "Although [defendant] is correct that it may use certain items to show the state of the art, the extent to which [it] may use the references depends largely on the disclosures in [its] expert report. Although [defendant's] expert may testify as to what references were considered, simply listing references as having been considered is insufficient to obtain the admissibility of all of those references."

Abstrax, Inc. v. Dell, Inc. et al., 2-07-cv-00221
(TXED October 16, 2009, Order) (Everingham, M.J.)

Monday, October 19, 2009

Court Approves Fee Award Based on Hourly Rate 3 Times Local Average for IP Practitioners Due to National Scope of Patent Litigation and Experience

In granting defendant's motion for attorneys' fees, the court found that defense counsel's hourly rates of $175 to $764.75 were reasonable. "[Defendant's] use of primary counsel . . . even at rates which well exceeded that of local counsel or [the average hourly rate of $245 for intellectual property practitioners in the Southeastern region according to the AIPLA bi-yearly Economic Survey from 2007] was justified. The attorneys were clearly specialists in the field of intellectual property – which is, by its very nature, national and not necessarily regional in scope – and, specifically, infringement suits, the art of litigating such a suit, and the background issues of patent prosecution. Further, [defense counsel] were clearly intimately aware of the [accused] product . . . as well as the history of these two parties. . . . Simply stated, it makes sense to proceed with such counsel, even at a higher rate than one might pay for local counsel, in a suit such as this."

iLOR, LLC v. Google, Inc., 5-07-cv-00109
(KYED October 15, 2009, Memorandum Opinion & Order) (Hood, S.J.)

Interrogatory Response Spanning 1,500 Pages is Inadequate Disclosure of 3-Page Prior Art Reference

The court granted plaintiff's motion to preclude defendants from relying on an anticipatory prior art reference that was not disclosed until the last day of fact discovery and was buried in 1,500 pages of documents. "To the extent Defendants disclosed the [prior art reference] in a supplemental interrogatory response in advance of the discovery deadline, the disclosure was buried within roughly 1,500 pages of documents that were otherwise identified only by Bates numbers. Defendants cannot reasonably expect Plaintiffs to be on notice of a three page reference -- buried within roughly 1,500 pages of numerically identified documents -- that was neither called out by specific Bates number nor by name. Such identification, or lack thereof, does not qualify as adequate notice of Defendants invalidity contentions."

Laboratory Skin Care Inc. et al. v. Limited Brands Inc. et al.,
1-06-cv-00601 (DED October 14, 2009, Memorandum Opinion) (Farnan, J.)

Thursday, October 15, 2009

Delay in Asserting Affirmative Defense and "Piratical" Settlement Demand Bar Recovery of Attorneys' Fees by Successful Defendant

In denying defendant's motion for attorneys' fees following plaintiff's voluntary dismissal of its patent claims, the court concluded that defendant's fees and expenses were incurred due to its delay in asserting an affirmative defense and its "almost piratical" demand "that plaintiff 'dismis[s] with prejudice all pending litigation' (including other cases) and pay defendant $1,200,000, an amount that is more than double defendant’s estimate of its fees and non-taxable costs now. . . . To the extent that defendant incurred what it now deems unnecessary costs and fees in this case, the blame lies with defendant’s strategy and tactics." "Athough [35 U.S.C. § 285] indicates that an award of fees is a rare event, this has not stopped prevailing parties in this district from seeking fees as a matter of course. But as a point of logic, if every patent lawsuit is exceptional, then none of them is."

Spacesaver Corp. v. The Marvel Group, Inc. et al., 3-08-cv-00354
(WIWD October 13, 2009, Order) (Crocker, M.J.)

Wednesday, October 14, 2009

Dearth of Qualified Experts Does Not Warrant Disclosure of CAD Files to Competitors' Consultant

Plaintiff's motion to allow disclosure of defendant's highly confidential CAD files to its expert was denied. "The court recognizes that most of the potential experts [plaintiff] contacted were not only reluctant to take a position in opposition to [defendant], but actually hoped to get work from [defendant]. Nevertheless, the extreme sensitivity of the [CAD] files raises heightened concerns of inadvertent disclosure to competitors that may not be protected adequately by the [protective order]. . . . [T]he court finds that the risk of inadvertent disclosure outweighs [plaintiff's] need to show the [CAD] files to [its expert] at this time. [Plaintiff's expert] acknowledges that he currently does consulting work for two [of defendant's] competitors, and he is likely to consult with other competitors in the future. . . ."

Saso Golf, Inc. v. Nike, Inc., 1-08-cv-01110
(ILND October 5, 2009, Memorandum Opinion & Order) (Nolan, J.)

Tuesday, October 13, 2009

Lobbying Efforts Not Privileged With Respect to Specific Patent

Defendant's motion for a protective order quashing the deposition of its attorney who was defendant's policy counsel/legislative strategist was granted in part. "Defendant’s lobbying activities are generally protected by the First Amendment . . . [and] Plaintiff has not shown adequate relevance, to the present case, of Defendant’s efforts to affect the future development of the applicable law. . . . [However] [g]iven that Defendant is publicly engaged in lobbying activities on the issue of patent reform, the court will allow Plaintiff to inquire into whether and to what extent Defendant’s lobbying efforts have specifically addressed the patent in suit."

PA Advisors, LLC v. Google Inc. et al., 2-07-cv-00480
(TXED October 8, 2009, Order) (Folsom, J.)

Friday, October 9, 2009

"Catch-All" Description of "Authors and Inventors of Prior Art" Does Not Satisfy FRCP 26 Obligation

The court granted plaintiff's motion to exclude the testimony of authors/inventors of prior art where defendant's FRCP 26 disclosures failed to identify the witnesses by name and instead identified them by the description "Authors and inventors of prior art references identified and produced in this Action." "[Defendant] argues that [plaintiff] had notice but does not explain why it failed to supplement. Allowing [the witnesses] would prejudice [plaintiff] in that they have not had the opportunity to depose either witness to learn the scope of their testimony. On the other hand, striking [the witnesses] does not strike the prior art reference; [defendant's] invalidity expert can still speak to the [prior art]. . . . Moreover, to rule that a catch-all phrase equals compliance with Rule 26 would shift the burden of identifying relevant witnesses to the other party. This would require parties to search through invalidity contentions, prior art, and prior art cited by prior art for potential witnesses. Such a result flies in the face of the spirit and purpose of the discovery rules."

Abstrax, Inc. v. Dell, Inc. et al., 2-07-cv-00221
(TXED October 7, 2009, Order) (Folsom, J.)

Thursday, October 8, 2009

Plaintiff Not Required to Limit 178 Asserted Claims

Defendant's motion to limit the number of asserted claims was denied. "[Plaintiff] is not required to limit the number of asserted claims against [defendant] from 178 claims to 10 claims at this time. The limitation would prejudice [plaintiff] because the case is currently in its early stage. However, as [plaintiff] states, it will eventually be forced to streamline its Markman presentation and case so that the important issues are considered by the Court."

i2 Technologies, Inc. et al. v. Oracle Corporation et al.,
6-09-cv-00194 (TXED October 6, 2009, Order) (Davis, J.)

Wednesday, October 7, 2009

Device Capable Of Infringing Use Is Not Exempt From Liability Because Such Use Is "Improper, Unknown, And Dangerous"

Accused device could be found to infringe even though the infringing use would be "improper, unknown, and dangerous," provided such use did not require any physical alteration of the accused device. "[Defendant] argues that the [accused device] does not infringe because there is no evidence that (1) it 'intended or anticipated' physicians to use the [accused device in an infringing manner]; (2) physicians actually operate the [accused device] this way; (3) promotional materials or instructions teach or reference [using the accused device in an infringing manner]; or (4) this method serves a functional purpose not already accomplished. . . .The [infringing method] does not require physical alteration of the [accused device]; it is an alternative method of using the device. Therefore, whether physicians or users of the [accused device] actually employ the [infringing method] is irrelevant."

Baran v. Medical Device Technologies, Inc., 1-04-cv-01251
(OHND September 30, 2009, Memorandum & Order) (O'Malley, J.)

Tuesday, October 6, 2009

Anti-Trust and Misuse Defenses Severed and Stayed Pending Resolution of Infringement Issues

The court granted plaintiffs' motion to bifurcate the infringement claims from defendant's antitrust and patent misuse claims, and to stay discovery on the antitrust and misuse claims. "With respect to conserving judicial economy, defendants' antitrust and patent misuse claims may be rendered moot by resolution of the patent infringement issues. . . . Even if plaintiffs do not succeed in proving infringement, the court could still determine that plaintiffs 'realistically expect[ed] success on the merits,' thus obviating the need to adjudicate time consuming and complex antitrust and patent misuse issues. . . . Further militating toward bifurcation of these issues if the dictinct lack of evidentiary overlap between issues of patent validity and infringement and issues of patent misuse and antitrust."

Eurand Inc. et al. v. Mylan Pharmaceuticals Inc. et al., 1-08-cv-00889
(DED October 2, 2009, Memorandum Order) (Robinson, J.)

Monday, October 5, 2009

Judge Ward Overturns Jury Verdict of Willfulness Based In Part on Closeness of Claim Construction

Following a jury verdict of willful infringement, the court granted defendants' motion for judgment as a matter of law of no willful infringement based in part on the closeness of claim construction which was not presented to the jury. "[T]he fact that certain facts were not presented to a jury, such as the close issue of claim construction, does not preclude the court to consider them. . . . In this case, the issue of claim construction was close and [defendants'] proposed interpretation for the claims, although eventually not adopted, was reasonable and based upon the specification and prosecution history of the . . . patent. Thus, the Court takes the close issues of claim construction into consideration in its determination of whether [defendants'] actions were 'objectively reckless.'"

Centocor, Inc. et al v. Abbott Laboratories, 2-07-cv-00139
(TXED October 1, 2009, Order) (Ward, J.)

Friday, October 2, 2009

Successful Defendant Ordered to Pay Attorneys' Fees and Costs Associated With Unsuccessful Invalidity Defense

Although the jury found in favor of defendant, the court awarded plaintiff its attorneys' fees as to defendant's unsuccessful claim of invalidity. "[Defendant's] actions in pursuing the counterclaim of invalidity long after it was shown not to be meritorious amounts to vexatious conduct. Defending against [defendant's] claims of invalidity was a considerable financial burden to [plaintiff] in terms of attorney time, firm resources, and out-of-pocket expense. [Defendant's] adamant denial that there was any misconduct in this case displays the same arrogance that has colored this case almost from its inception."

Kellogg v. Nike et al., 8-07-cv-00070
(NED September 30, 2009, Memorandum & Order) (Bataillon, J.)

Thursday, October 1, 2009

Five New Orders on Transfer of Venue From EDTX -- Two Denied Where All Public and Private Interest Factors Favored Transfer or Were Neutral

Defendant's motion to transfer venue was denied even though all of the private and public interest factors favored transfer or were neutral. "While this case was pending, [defendant] filed a separate action against [plaintiff] in the Eastern District of Virginia. . . . By filing suit in [Virginia], [defendant] has demonstrated that it is not inconvenient to litigate the dispute across the country, away from its party witnesses and its sources of its proof. . . . The court does not fault [defendant] for its decision to sue in [Virginia] – the venue statute gives [defendant] a range of options. But the court views with some caution [defendant's] convenience arguments when the court examines the totality of the circumstances existing between these two parties. Under these facts, and despite the court’s findings on the public and private interest factors, [defendant] has not demonstrated good cause for a transfer."

GraphOn Corp. v. Juniper Networks, Inc., 2-07-cv-00373
(TXED September 29, 2009, Order) (Everingham, M.J.)

Wednesday, September 30, 2009

Two Motions To Transfer Venue From EDTX -- 1 Granted, 1 Denied

Defendants' motion to transfer venue for convenience was denied due to the existence of a related case even though all but one of the other private and public interest factors were neutral or weighed in favor of transfer. "The Federal Circuit has found that, in patent cases, the 'consideration of the interest of justice, which includes judicial economy, may be determinative to a particular transfer motion, even if the convenience of the parties and witnesses might call for a different result.' . . . Plaintiffs have pending in this courthouse a related lawsuit against [another company] asserting the [same patent-in-suit]. The two cases involve the same claim construction issues and transferring the case will only consume unnecessarily additional judicial resources. The court finds that the interests of justice weigh heavily against transfer."

Novartis Vaccines and Diag., Inc. et al. v. Bayer Healthcare, LLC et al., 2-08-cv-00068 (TXED September 28, 2009, Memorandum Opinion & Order) (Ward, J.)

Venue for suit initiated by Maryland plaintiff against defendants from Ohio, Sweden, Switzerland, and Israel was transferred to the Northern District of Ohio. "Considering all of the private and public interest factors, the defendants have met their burden of showing that the Northern District of Ohio is clearly more convenient than the Eastern District of Texas. Therefore, the motion to transfer venue is granted."

Immerson Medical Inc. v. Mentice AB et al., 2-08-cv-00161 (TXED September 29, 2009, Order) (Everingham, M.J.)

Tuesday, September 29, 2009

Question of Whether Patent Assignment Applies to CIP Certified for Interlocutory Appeal

The court certified for interlocutory appeal its denial of defendants' motion to dismiss for lack of subject matter jurisdiction. "Defendants convincingly argue that reasonable grounds exist for a difference of opinion. Although courts have found variously worded assignments to include CIPs, Defendants are correct that there is no binding precedent holding that an assignment with the exact terms cited [all "rights, title and interest" in "the inventions covered thereby and any division, reissues, continuations and extensions thereof"] includes CIPs."

Gerber Scientific Intl. Inc v. Satisloh AG et al.,
3-07-cv-01382 (CTD September 25, 2009, Amended Order) (Dorsey, J.)

Monday, September 28, 2009

Novo Nordisk Ordered to Correct Overly Broad Orange Book Use Code

Defendant was entitled to a mandatory injunction requiring plaintiff to change the Orange Book use code for the patent-in-suit. "[Defendant's] ANDA covers repaglinide. [Plaintiff's] patent which is the subject of this patent action does not cover repaglinide; it covers repaglinide only in combination with metformin. The U-968 use code narrative for the [patent-in-suit] states 'a method for improving glycemic control in adults with type 2 diabetes mellitus.' It is so broad as to incorrectly suggest that the [patent-in-suit] generically covers three (3) different FDA-approved methods of use of repaglinide . . . Because the FDA does not review use code narratives . . . it has required [defendant] as part of its ANDA to 'submit an updated patent certification addressing the [patent-in-suit] and its associated Use Code 968.' . . . [Defendant] has therefore been seriously disadvantaged by the improper U-968 use code narrative. . . . [Plaintiff], by the change in the use code narrative is attempting to extend the life of an expired patent."

Novo Nordisk A/S et al. v. Caraco Pharm. Lab., Ltd.,
2-05-cv-40188 (MIED September 24, 2009, Decision) (Cohn, J.).

Modification of Claim Construction in Jury Instruction Warrants New Trial

The court granted plaintiff's motion for a new trial where, after the close of plaintiff's case at trial, the court modified its previous claim construction based on evidence presented during trial. "Since this construction came after Plaintiffs had presented their evidence, Plaintiffs were left in the position of having presented expert witness testimony and graphics that were not supported by the Court’s eventual construction. . . . [A]fter a review of the evidence and the trial transcript, the Court finds that the number and significance of the claim terms undefined, defined after key testimony, and that were poorly defined allowed prejudicial error to creep into the trial process such that substantial justice was not done."

Avago Tech. General IP PTE Ltd. et al. v. Elan Microelectronics Corp. et al.,
5-04-cv-05385 (CAND September 23, 2009) (Ware, J.)

Thursday, September 24, 2009

Grouping Accused Products, Alleging Compliance With Industry Standard Prove Fatal to Infringement Claims

In granting defendant's motion for summary judgment of noninfringement, the court rejected plaintiff's "shortcuts" of grouping accused products and asserting that compliance with an industry standard constitutes infringement. "When plaintiffs filed this patent infringement suit alleging that three separate patents had been infringed by more than 260 products they had to know it would not be simple or easy to prove that each of the accused products infringed every element of each claim of each asserted patent. Their efforts to take shortcuts by alleging 'compliance with industry standards' and grouping accused products have failed. Merely asserting that products comply with an industry standard that runs more than 1000 pages is not proof that the products practice specific sections of the standard. Grouping does not work when the only evidence supporting such grouping is merely that 'in general, different versions of a product are part of the same family and have the same basic functionality.' Slight variations in product functionality may be the difference between infringement and non-infringement by that product . . . Saying that products have the same 'basic' functionality is not enough to justify grouping without evidence that the relevant features are identical."

Fujitsu Limited et al v. Netgear, Inc.,
3-07-cv-00710 (WIWD September 18, 2009, Order)
(Crabb, J.)

Wednesday, September 23, 2009

Report & Recommendation: Apple's iPhone Does Not Infringe Caller ID Patent

The magistrate judge recommended granting Apple's motion for summary judgment that the iPhone does not infringe a patent claiming a system for "displaying the incoming telephone number and the name of the party." With respect to function, "[w]hile the iPhone includes a mechanism for displaying the incoming telephone number alone, it lacks a mechanism for displaying the incoming telephone number along [with] the information contained in the name field of the Address Book." Further, "the telephone number that appears on the iPhone’s display device is not the 'incoming' telephone number . . . [but] the custom label that was created before any incoming call occurs." With respect to structure "while the microprocessor of the [patent-in-suit] is programmed to operate in two alternative modes and to always display the incoming telephone number, the algorithm of the iPhone’s display device operates in three alternative modes and only sometimes displays the incoming telephone number. Given these substantial differences, no reasonable jury could find literal infringement."

Figa v. Apple Inc., 1-08-cv-10304
(MAD September 21, 2009, Report & Recommendation)
(Dein, M.J.)

Tuesday, September 22, 2009

Research Funding Agreement Granting "Unrestricted Rights" to "Results of Research" Did Not Convey License to Resulting Patent

Research funding agreements granting Intel "unrestricted rights at no cost to the results of [the funded] research" was vague with respect to the patent rights conferred to Intel, requiring consideration of extrinsic evidence to interpret the agreement. Considering such evidence, the court granted plaintiff's motion for summary judgment on Intel's express license defense, concluding: "All the parties’ dealings both before and after the [research funding agreements] indicate that the parties never intended that the agreements provide defendant an express license in intellectual property developed during the research period funded. No reasonable jury could find otherwise."

Wisconsin Alumni Research Foundation v. Intel Corp.,
3-08-cv-00078 (WIWD September 17, 2009, Order) (Crabb, J.)

Monday, September 21, 2009

Use of Web Browser to Display Accused Thumbnail Images Did Not Implicate Divided Infringement

The court denied defendants' motion for summary judgment of noninfringement on a divided infringement theory. The court rejected defendants' argument that the accused software did not infringe a patent claiming a system and method for providing a preview thumbnail image of a web page because "[defendants] do not supply the web browser required to display the thumbnail visual images, nor do they direct the actions of the users." "The [accused] software's utilization of a (separately installed) web browser does not implicate action by an additional party within the meaning of [BMC resources, Inc. v. Paymentech, L.P., 498 F.3d 1373, 1380-81 (Fed. Cir. 2007] or [Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1329 (Fed. Cir. 2008)]."

Girafa.com Inc. v. Amazon Web Services LLC et al.,
1-07-cv-00787 (DED September 15, 2009, Memorandum Opinion) (Robinson, J.)

Friday, September 18, 2009

Abandonment Does Not Invalidate Patent, But May Render It Unenforceable

The magistrate judge recommended granting plaintiff's motion for summary judgment as to defendant's invalidity defense to the extent it was based on a theory of abandonment, i.e., that plaintiff's predecessor intentionally abandoned the patent-in-suit to avoid paying maintenance fees and later obtained reinstatement from the PTO. Under Aristocrat Technologies Australia Pty Ltd. v. International Game Technology, 543 F.3d 657, 661 (Fed. Cir. 2008), revival of an abandoned patent is not a "condition for patentability" within the meaning of § 282, so such a theory could not render the patent invalid. However, defendant's abandonment theory could support an inequitable conduct defense if "the patentee falsely represented to the PTO that the failure to pay maintenance fees was unintentional and thereby wrongly induced the PTO to revive the [patent-in-suit]"

Abstrax, Inc. v. Dell, Inc. et al., 2-07-cv-00221
(TXED September 15, 2009, Report & Recommendations) (Everingham, M.J.)

Thursday, September 17, 2009

EDTX Addresses Transfer of Venue in Multi-Defendant Case -- Motion Granted as to California Defendants, Denied as to Texas Defendants

The court granted defendants' motion to transfer venue for convenience as to the moving defendants. "[Plaintiff's] website identifies its headquarters and only 'location' as San Francisco. . . . The NDCA is also where a majority of the original defendants’ operations are centered. . . . [Plaintiff] has failed to show a sufficient connection to this district to override the conveniences gained by transferring the case to the NDCA. . . . As to the Texas Defendants, added by [plaintiff] after the Federal Circuit’s TS Tech decision, the Court finds transfer would be extremely inconvenient and unfair. These Defendants were apparently added to the lawsuit for the purpose of maintaining venue in this district. . . . It is clear that these Defendants are not 'so involved in the controversy' as to require the same issues to be litigated in two places."

Balthaser Online, Inc. v. Network Solutions LLC et al.,
2-08-cv-00430 (TXED September 15, 2009, Order) (Folsom, J.)

Wednesday, September 16, 2009

Unitemized Invoice Sinks Claim for $419,000 in Costs

The court reduced the costs awarded to defendant by $419,105 for visual aids. "[B]ecause the invoices are not itemized, there is no record of which visual aids correspond to each invoice. . . . It is not possible for the Court to evaluate how much [defendant] spent on trial exhibits, how much it spent on other visual aids, and whether these amounts were reasonable. . . . The Court does not doubt that litigants may legitimately incur high costs producing necessary visual aids in a patent trial such as this, which required counsel to explain complex medical devices to the jury and the Court. The Court cannot award the requested costs here, however, because [defendant] has failed to provide the Court with sufficient information to evaluate the reasonableness of [defendant's] expenditures."

Boston Scientific Corporation et al. v. Johnson & Johnson et al.,
3-02-cv-00790 (CAND September 14, 2009, Order) (Illston, J.).

Tuesday, September 15, 2009

Obligation to Disclose Best Mode Does Not Include Superior Configuration for Particular Application

Defendant was entitled to summary judgment on plaintiff's best mode defense based on the testimony that, in one particular application of the patented invention, defendant "discovered a particular rail spacing superior to all others." "The prototype [plaintiff] refers to was developed to satisfy the customer’s unique needs. The customer needed to process a substantially larger volume of solids than [defendant] had heretofore encountered. [Defendant] was uncertain if its equipment would work under those conditions. This suggests, not that [defendant] discovered a single, optimal rail spacing, but that the optimal configuration may depend on several factors, including the type of equipment being washed and the quantity and nature of the soil on the equipment. . . . The evidence does not demonstrate that [defendant] knew of a particular best mode for practicing its invention in general."

Petter Investments, Inc. v. Hydro Engineering Inc. et al., 1-07-cv-01033
(MIWD September 8, 2009, Opinion) (Quist, J.)

What's in a Docket Report?

Monday, September 14, 2009

Party Producing Privilege Log Not Required to Translate Entries Written in Foreign Language

Defendants' motion for sanctions and to compel plaintiff to translate the contents of privilege log entries written in Japanese were denied. "Simply put, nothing in the rule’s plain language suggests, and no court has ever intimated, that Rule 26(b)(5) requires a party producing a privilege log to translate entries written in a foreign language. Consequently, [defendants'] motion must be denied."

Fujitsu Network Communications Inc. et al. v. Tellabs, Inc. et al., 1-09-cv-04530
(ILND September 10, 2009, Order) (Bucklo, J. )

Friday, September 11, 2009

Withholding Documents Concerning Plaintiff's Standing Warrants $335,000 Sanction

Following the court's dismissal of plaintiff's claims on the basis of lack of standing, the court awarded defendant $335,000 in fees and costs incurred litigating the standing issue as a sanction for withholding documents relevant to that issue. "Plaintiffs repeatedly withheld documents from Defendant and the Court without sufficient explanation, and all of the withheld documents were relevant to Plaintiffs’ standing in this case. . . . The repetitive nature of Plaintiffs’ conduct, combined with the documents’ direct relevance to the standing issue, warrants a finding of willfulness. Plaintiffs’ conduct also delayed Defendant’s investigation into Plaintiffs’ standing and the overall progress of this case, which warrants a finding of bad faith."

Carl Zeiss Vision International GmbH et al v. Signet Armorlite Inc., 3-07-cv-00894
(CASD September 9, 2009, Order) (Sabraw, J.)

Thursday, September 10, 2009

Controlling Access to Online Service is not Control of End Users Sufficient to Support Joint Infringement

The court granted defendant's motion for summary judgment of noninfringement of its "health-care information software product," because neither defendant's customers (health care providers) nor the end users (patients) performed all steps of the asserted method claim and plaintiff's evidence of the following activities was insufficient to demonstrate the direction and control necessary to establish joint infringement: (i) "use [of] login information to restrict patients’ access," (ii) "requir[ing] that patients agree to certain terms and conditions in order to use the system," (iii) "determin[ing] the user’s level of access," (iv) "requir[ing] that the patient accept 'cookies' in order to use [the accused software]," and (v) limiting information "patients can . . . access [to] information provided by the provider or that the provider wants them to see." Such evidence "shows only that . . . providers control the users’ access" to the accused software, not control of the patients themselves.

McKesson Information Solutions LLC v. Epic Systems Corp.,
1-06-cv-02965 (GAND September 9, 2009, Order) (Camp, J.).

Wednesday, September 9, 2009

Delay Seeking Certificate of Correction May Support Laches Defense

The magistrate judge recommended denying plaintiff's motion for summary judgment as to defendant's laches defense, finding fact issues with respect to both the reasonableness of delay (both in filing the lawsuit and correcting the asserted patent) and prejudice to defendants. "From approximately October of 2006 until [January 2008], Defendants relied upon the fact that uncorrected Claim 26 of the [patent-in-suit] was ambiguous and indefinite. During this time period, viewing the facts in a light most favorable to Defendants, Defendants detrimentally relied upon this uncorrected Claim 26 by beginning sales in the United States of the accused . . . televisions."

Advanced Technology Incubator, Inc. v. Sharp Corporation et al., 2-07-cv-00468
(TXED September 4, 2009, Report & Recommendations) (Bryant, M.J.)

Tuesday, September 8, 2009

TiVo Awarded $200 Million in Additional Damages and Sanctions for Violation of Permanent Injunction

Following an earlier finding that defendant violated the court's injunction by selling products that were not colorably different from products found to infringe, the court awarded contempt sanctions. The court rejected (i) plaintiff's argument that disgorgement of profits or trebling the jury's royalty rate was an appropriate measure of sanctions, and (ii) defendant's arguments that no sanctions were warranted, that sanctions should be calculated using the royalty rate awarded by the jury, or that a 20% rate increase should apply. "The harm suffered by [plaintiff] . . . is slightly offset by patent policy, which favors and promotes attempts to design around valid patents. . . . [T]he Court finds that a $1 increase—in effect, an 80% increase of the jury award—would yield an effective sanction. A $2.25 rate per month would represent a nearly 40% royalty on the $5.98 per month fee that [defendant] currently charges its customers. Although [defendant's] financial resources are considerable, a 40% royalty is substantial and cannot be easily overlooked. It will be difficult for [defendant] to pass this $1 rate increase onto its consumers without charging more for DVR service than its main competitors." The court awarded plaintiffs approximately $110 million in damages for the additional infringement, $90 million in sanctions, plus an award of attorneys' fees.

TiVo Inc. v. Echostar Communications Corp., et al., 2-04-cv-00001
(TXED September 4, 2009, Order) (Folsom, J.)

Friday, September 4, 2009

For Manufacturing Process Claim, Calculating Reasonable Royalty Based on Price of Assembled Computers Was Not Improper

Defendant's motion to exclude expert testimony concerning damages was denied. Calculating "a reasonable royalty based upon the total sales prices of the computers and other configurable products manufactured by [defendant] by assembly processes allegedly embodying the patented method" did not implicate the entire market value rule. "[The expert's] calculation of a reasonable royalty does not consider a combination of patented and nonpatented methods or apparatuses in order to develop the royalty base—[the expert's] analysis considers solely the products produced by a patented method. . . . If [plaintiff] is able to show that the patented method is used by [defendant] to assemble its computers to the extent described in [plaintiff's] opposition brief, then a connection between the infringement and the claimed royalty base would be established. Moreover, it is noteworthy that the patentee licensed its technology using a similar methodology."

Abstrax, Inc. v. Dell, Inc. et al., 2-07-cv-00221
(TXED September 2, 2009, Order) (Everingham, M.J.)

Thursday, September 3, 2009

Claim Requiring "Codes" is not Entitled to a Scope of Equivalents Covering a Single "Code"

"[T]he term 'codes' is not entitled to a scope of equivalents covering 'code' . . . it would defy logic to make a distinction between 'code' and 'codes' during claim construction, then find 'codes' meant 'code' under the doctrine of equivalents."

Sony Electronics Inc, et al v. Guardian Media Tech, 3-05-cv-01777
(CASD August 31, 2009, Order) (Gonzalez, J.)

Wednesday, September 2, 2009

Inventor's Email to Google Co-Founder and President did not Warrant Deposition Prior to Completion of Other Discovery

Motion for protective order to preclude plaintiff's deposition of Google co-founder and president was granted, as modified. A single email from the inventor of the patent-in-suit to Google's president was not sufficient to warrant a deposition in light of (i) testimony that neither the inventor of the patent-in-suit nor Google's president had any recollection of the events, and (ii) the disruption such a deposition would cause to Google's operations. Plaintiff was permitted to depose a 30(b)(6) witness concerning the email and Google's procedures for handling emails of that sort and the court would resolve any irreconcilable discovery disputes at that time.

PA Advisors, LLC v. Google Inc. et al., 2-07-cv-00480
(TXED August 28, 2009, Order) (Folsom, J.)

Tuesday, September 1, 2009

Two Motions to Transfer Venue From EDTX -- 1 Granted, 1 Denied

Defendant's renewed motion to transfer venue for convenience was granted. "Much like in [In re Genentech, Inc., 566 F.3d 1338 (Fed. Cir. 2009)], there are a substantial number of material witnesses who reside in the transferee venue and none who reside in the Eastern District of Texas."

Abstrax, Inc. v. Sun Microsystems, Inc., 2-07-cv-00333
(TXED August 28, 2009, Memorandum Opinion & Order) (Everingham, M.J.)

First-to-file rule did not apply because the overlap between the instant case and the earlier filed case were not substantial. "Any two cases involving some of the same parties or similar areas of law have the potential for some overlap. The focus of the first-to-file rule is on whether this overlap is substantial.' . . . The Magistrate Judge carefully explained why the overlap between these two cases is insubstantial, and the Court sees no reason to depart from that explanation."

Document Generation Corp. v. Allscripts, LLC et al., 6-08-cv-00479
(TXED August 27, 2009, Memorandum Opinion & Order) (Davis, J.)

Monday, August 31, 2009

Bifurcation Ruling Highlights Divergent Approaches to Patent Case Management

As reported here and in the August 28, 2009 edition of the Docket Report, Judge Sue Robinson of the District of Delaware issued an order bifurcating liability from remedies in a patent case. While the ruling was appropriately based on the facts of that particular case, Judge Robinson seized the opportunity to reflect on her general approach to bifurcation in patent cases:

Bifurcation is appropriate, if not necessary, in all but exceptional patent cases . . . . [I]n my experience, discovery disputes related to document production on damages and the Daubert motion practice related to damages experts are a drain on scarce judicial resources. . . . I have concluded that bifurcation promotes the just and efficient resolution of what damages, if any, should be awarded by: (1) giving the parties -- those with the most expertise in the market -- the first opportunity to translate [the] decision on liability into practical commercial consequences; or (if the parties cannot resolve the matter) (2) giving the damages jury a focused dispute to resolve.

StreamServe AB v. Exstream Software LLC et al., 1-08-cv-00343 (DED August 26, 2009).

That same day, Judge Robinson issued an order in Robert Bosch LLC v. Pylon Manufacturing Corp., 1-08-cv-00542 (DED August 26, 2009) again granting bifurcation of liability and damages, but this time clarifying that she includes willfulness as part of the damages analysis: “[U]ltimately, a finding of willfulness is of no moment unless and until the district court, in its sole discretion, chooses to increase damages by reason of the finding; willfulness is a damages issue, not a liability issue."

Judge Robinson’s approach represents one end of a widely-divergent spectrum. The other extreme is expressed in Judge Kenneth A. Marra’s ruling in Baratta v. Homeland Housewares LLC, 0-05-cv-60187 (FLSD October 27, 2008) where he stated:

The Court finds that this is not an exceptional case that warrants bifurcation of liability and damages. Defendants point out the complexity of a patent case, which requires the Court to hold a Markman hearing, construe the claims of the patent-in-suit, and assess the validity of the patent in view of the prior art. These are the usual hurdles a court faces in most patent infringement actions and do not necessitate bifurcation. “In all cases, including patent cases, bifurcation is the exception, not the rule.”

Nationwide, there does not seem to be a clear trend. In the past 12 months, district courts in the United States have issued substantive rulings on 19 motions to bifurcate liability from damages in patent cases. 11 were granted and 8 were denied.

What is clear, however, is that district judges tend to have a preference based on past experience and they rarely deviate from that preference. This is suggested by the rulings discussed above and reflected even more clearly in court records. Since January 1, 2008, district courts in the United States have issued substantive rulings on 57 contested motions to bifurcate in patent cases -- 39 were granted, 18 were denied (this includes all motions to bifurcate, not just motions addressing liability and damages). During that same time period, 5 judges ruled on multiple motions to bifurcate. Considered on a judge-by-judge basis, the results are amazingly consistent:

As shown above, only Judge Jones deviated from his own track record. However, the circumstances and basis for the motions in each case were significantly different from each other. Compare IGT v. Alliance Gaming Corp., et al., 2-04-cv-01676 (NVD May 29, 2008) (denying motion to bifurcate antitrust claims from patent claims brought on the “eve” of trial) with Japan Cash Machine Co., LTD v. MEI, Inc., 2-05-cv-01433 (NVD November 20, 2008) (granting motion to bifurcate inequitable conduct from infringement). Stated differently, 83% of the decisions on motions to bifurcate have been consistent with a judge’s other bifurcation rulings.

"Promoting Off-Label Use" Does Not Support Unclean Hands Defense, But May be Considered in Determining Injunctive Relief

The court granted plaintiff's motion to strike defendants' affirmative defense of unclean hands based on plaintiff's alleged improper marketing activities promoting off-label uses of its product. "[I]t is clear that Defendants have not . . . alleged that such misconduct gave rise to or affected the patent rights or cause of action now pursued by [plaintiff]. In the absence of such a connection, an unclean hands defense is not viable, as 'courts in this Circuit have generally been clear that the connection between the misconduct and the claim must be close' . . . [However] evidence of such misconduct may be considered as a factor affecting [plaintiff's] ability to obtain a permanent injunction as relief in this proceeding."

Pfizer Inc., et al. v. Zenith Laboratories, et al., 2-01-cv-00193
(NJD August 27, 2009, Opinion) (Hochberg, J.)

Friday, August 28, 2009

Judge Robinson: "Bifurcation is Appropriate, If Not Necessary, in All But Exceptional Patent Cases"

In bifurcating damages and willfulness from infringement and validity, the court explained: "Bifurcation is appropriate, if not necessary, in all but exceptional patent cases. . . . [I]n my experience, discovery disputes related to document production on damages and the Daubert motion practice related to damages experts are a drain on scarce judicial resources. . . . I have concluded that bifurcation promotes the just and efficient resolution of what damages, if any, should be awarded by: (1) giving the parties -- those with the most expertise in the market -- the first opportunity to translate [the] decision on liability into practical commercial consequences; or (if the parties cannot resolve the matter) (2) giving the damages jury a focused dispute to resolve."

StreamServe AB v. Exstream Software LLC et al., 1-08-cv-00343
(DED August 26, 2009, Memorandum & Order) (Robinson, J.)


This ruling, with a free link to the actual signed order, was reported in today's Docket Report. If you are a patent litigation practitioner, you can request a free 2-week trial of the Docket Report by sending an email to trial@docketnavigator.com.
To learn more about the Docket Report, visit https://www.docketnavigator.com/everyday.

Thursday, August 27, 2009

Apple Succeeds in Motion to Transfer Patent Case From the Eastern District of Texas to the Northern District of California

Defendant's motion to transfer venue for convenience was granted. In addressing the "relative ease of access to sources of proof" factor, the court determined that the location of documents in the Northern District of California (defendant's documents) and the Western District of Texas (plaintiff's documents and possibly some of defendant's documents) favored transfer. "Following the approach of [In re Genentech, 566 F.3d 1338, 1345-46 (Fed. Cir. 2009)], the court concludes that this factor weighs in favor of transfer. . . . If the case remains here, all documents will still have to be somehow transferred -- or perhaps simply downloaded to a flash drive and then transported -- from either the Northern District [of California] or the Western District [of Texas] to the Eastern District [of Texas]."

Affinity Labs of Texas, LLC v. Apple, Inc., 9-09-cv-00047
(TXED August 25, 2009, Order) (Clark, J.)

This ruling, with a free link to the actual signed order, was reported in today's Docket Report. If you are a patent litigation practitioner, you can request a free 2-week trial of the Docket Report by sending an email to trial@docketnavigator.com.
To learn more about the Docket Report, visit https://www.docketnavigator.com/everyday.

Wednesday, August 26, 2009

Failure to Disclose Prior Art Previously Cited in a Parent Application is not Inequitable Conduct

Defendant's motion to dismiss plaintiff's counterclaim of inequitable conduct for failure to state a claim was granted. "When examining a continuation application, the patent examiner will consider the information that was considered by the PTO in the parent application. . . . [A]ny prior art references and/or rejections that are part of the file history of the parent application are considered when examining the continuation application. The applicant is under no duty to resubmit such information in the continuing application. Therefore, it is not inequitable conduct for an applicant not to resubmit information that is already before the PTO in the parent application."

E-Bay, Inc. v. IDT Corp et al.,
4-08-cv-04015
(ARWD August 24, 2009, Order) (Barnes, J.)

Tuesday, August 25, 2009

Licensee Lacked Standing to Sue Where Patent Owner Retained Rights to "Non-Commercial, Educational Use" of the Patent

In granting defendant's motion to dismiss plaintiff's patent infringement claim for lack of standing the court rejected plaintiffs' argument that the rights retained by the patent owner were "insubstantial." "Plaintiffs acknowledge that the [patent owner] retains rights to the non-commercial, educational use of the patents. . . . [T]hese retained rights of use actually demonstrate an absence of complete exclusivity, which in this Court’s view is key to the issue of whether there was a conveyance of all substantial rights."

Resonant Sensors Inc. v. SRU Biosystems Inc., 3-08-cv-01978
(TXND August 14, 2009, Memorandum Opinion & Order) (Lynn, J.)

Monday, August 24, 2009

Evidence That Defendant Encouraged Infringing Use is Insufficient to Show Direct Infringement by Customers

Following a jury trial, defendant's motion for judgment as a matter of law of no induced infringement was granted in part even though defendant taught customers the accused infringing use in "training courses" and "video presentations." "[The separate accused products] may have been presented 'as a single homogenous system' to [defendant's customer], but this is not a substitute for evidence of what any [of defendant's] customer(s) actually did. Because it was not disputed that a . . . customer does not necessarily have to install and run [a particular] feature, plaintiff was required to identify at least one specific infringement by customers. . . . Having failed to do so, the jury's verdict with respect to the system claims must be reversed."

SRI International v. Internet Security, et al., 1-04-cv-01199
(DED August 20, 2009, Memorandum Opinion) (Robinson, J.)

Friday, August 21, 2009

Thesis Advisor for Inventor's Research was not a Co-Inventor

The court granted defendant's motion for summary judgment on plaintiff's inventorship claim, rejecting plaintiff's argument that the named inventor's thesis advisor was a co-inventor. "The Court concludes that the record evidence cannot support a reasonable finding that there was more than one inventor of the [patent-in-suit]. [Plaintiff] rests its contention that [the alleged co-inventor] was a co-inventor of the [patent-in-suit] on two central foundations: (1) that [the alleged co-inventor's] Feb. 1, 1999 email communicated two ideas that were subsequently incorporated into the claimed invention; and (2) that the extensive email correspondence between the [alleged co-inventor] and [the named inventor] reveals an extensive collaboration that supports co-inventorship. The undersigned finds that neither contention finds sufficient basis in the record to support a finding of co-inventorship, nor creates a genuine issue of material fact such that summary judgment in favor of Defendant should be precluded."

Juniper Networks Inc. v. Bahattab, 1-07-cv-01771
(DCD August 14, 2009, Report & Recommendation) (Kay, M.J.)

Thursday, August 20, 2009

Merck Wins Battle With Teva Over Singulair® Patent

Following a bench trial concerning Merck's Singulair® patent, the court rejected Teva Pharmaceutical's validity and unenforceability defenses and concluded that Teva's ANDA applications infringed the patent-in-suit. "[T]he Court . . . concludes that Teva has failed to prove either that: (1) [Merck] acquired the ‘473 patent through inequitable conduct or (2) the ‘473 patent was obvious under 35 U.S.C. § 103 . . . As such, the Court concludes that the ‘473 patent is valid and enforceable and that Teva’s ANDA[s] . . . infringe claims 18-22 of the ‘473 patent."

Merck Sharp & Dohme Pharm. SRL v. Teva Pharm. USA, Inc. et al., 3-07-cv-01596
(NJD August 19, 2009, Findings of Fact & Conclusions of Law) (Brown, J.)

Wednesday, August 19, 2009

Plaintiff's Late Disclosure of Infringement Contentions Bars Claims Against Xbox 360 Wireless Controllers

Plaintiffs were precluded from asserting infringement against wireless controllers for Microsoft's Xbox 360 game system because plaintiffs failed to identify the controllers in their interrogatory responses. "Plaintiffs contend that they properly supplemented their interrogatory answer [after the close of discovery] because they notified Microsoft in their supplemental answer to interrogatory No. 1 that their answers were preliminary, as discovery was ongoing and expert discovery had not yet occurred. This 'boilerplate' response does not eviscerate the Court’s discovery deadlines and create an open season for discovery."

Hochstein et al v. Microsoft Corporation et al., 2-04-cv-73071
(MIED August 17, 2009, Opinion & Order) (Borman, J.)

Tuesday, August 18, 2009

Court Denies Dorsey & Whitney's Motion to Withdraw, Finding No Conflict From Concurrent Representation of Plaintiff and Non-Party Manufacturers

No Conflict Found From Concurrent Representation of Plaintiff and Non-Party Manufacturers of Accused Devices

Motion by Dorsey & Whitney LLP to withdraw as counsel for plaintiff was denied and the court found no conflict warranting such withdrawal under the Washington Rules of Professional Conduct. "Dorsey represents a patent holder claiming that a cellular telephone service provider is infringing one or more of its patents. Dorsey also provides unrelated legal services to a manufacturer of cellular telephones that has an exclusive service arrangement with the provider being sued in this matter. . . . The Court is not persuaded that Dorsey has a concurrent conflict of interest. . . . Even if Dorsey might have good cause for withdrawal, the Court may and does order Dorsey to continue representing plaintiff. . . . This case will be considerably delayed if Dorsey is permitted to withdraw and new counsel is required to make up the ground already covered. Moreover, given the potential impact of this litigation on a large number of cellular telephone manufacturers, plaintiff would likely face significant challenges in retaining substitute attorneys who are free from conflict and experienced in patent litigation. The Court therefore concludes that the administration of justice would be best served by Dorsey remaining plaintiff’s counsel of record."

Airbiquity Inc. v. AT&T Inc. et al.,
2-08-cv-00094
(WAWD August 14, 2009, Order) (Zilly, J.)

Monday, August 17, 2009

Single Box of Block Diagram Did Not Describe an Algorithm Sufficient to Support Means-Plus-Function Claim Limitation

Claim containing the term "means for individually cueing said callers of said select subset to prompt digital signals" was invalid as a means-plus-function limitation lacking structure beyond a general purpose computer. "[Plaintiff] argues that the recited function is shown by step 72 of Figure 2 [of the specification]. . . . Specifically, [plaintiff's expert] says that in box 72 the caller is cued and the answer of the caller is registered. However, a simple box with the term 'register answer' is not an algorithm. [Plaintiff's expert] also cites to two other passages in the patent. These passages do not describe any algorithm for 'individually cueing said callers of said select subset to prompt digital signals.' Rather they simply indicate that the interface processor poses questions to the callers. Based on the foregoing, this Court finds that claim 5 of the [asserted] patent is invalid as indefinite."

Ronald A Katz Technology Licensing L P v. Time Warner Cable Inc., 2-07-cv-02134
(CACD August 13, 2009, Order) (Klausner, J.)

Friday, August 14, 2009

Narrowing Amendment Specifying DNA From Specific Viral Strains Precluded Application of Doctrine of Equivalents to Encompass Other DNA

Narrowing Amendment Specifying DNA From Specific Viral Strains Precluded Application of Doctrine of Equivalents to Encompass DNA Other Than Those Specific Viral Strains

Defendant's claim of infringement under the doctrine of equivalents was barred by prosecution history estoppel. On the question of whether the subject matter surrendered by the narrowing amendment encompassed the alleged equivalent, the court explained: "[T]he territory between vectors comprising isolated DNA molecules comprising sequences selected from ORFs 1-13 of any organism and vectors comprising isolated DNA molecules comprising sequences selected from ORFs 1-13 of the five viral strains identified in the [patent-in-suit] includes [plaintiff's] PCV WT2/1 isolate. . . . [Plaintiff's] vaccine is not a vector that comprises a sequence selected from ORFs 1-13 of the five viral strains identified in the [patent-in-suit]. Therefore, the Court determines that [defendant] surrendered the territory encompassing [plaintiff's] isolate and that the presumption of prosecution history estoppel applies."

Intervet, Inc. v. Merial Ltd. et al., 1-06-cv-00658
(DCD August 12, 2009, Memorandum Opinion)(Kennedy, J.)

Thursday, August 13, 2009

Jury Argument Equating Non-Practicing Patent Owner to "Banker Seeking a Bailout" Supports Award of Enhanced Damages

In granting plaintiff's motion for enhanced damages, the court noted that "also favoring enhancement is [defense] counsel’s litigation conduct, specifically during trial. Throughout the course of trial [defendant's] trial counsel persisted in arguing that it was somehow improper for a non-practicing patent owner to sue for money damages. He further persisted in improperly trying to equate [plaintiff's] infringement case with the current national banking crisis implying that [plaintiff] was a banker seeking a 'bailout.' These improper arguments were made in spite of the Court’s warnings."

i4i Limited Partnership v. Microsoft Corp., 6-07-cv-00113
(TXED August 11, 2009, Memorandum Opinion & Order) (Davis, J.)

Wednesday, August 12, 2009

"Logical Inconsistency" of Claim Limitations Invalidates Digital Messaging Patent Claim

"Logical inconsistency" of an asserted claim resulted in a ruling of invalidity for lack of enablement and utility. "The primary trouble occurs within steps (1) and (2) . . . [T]he only way step (2) can ever be performed is if a 'data information message' is a subset of an 'unmodified message.' However, the preamble of claim 3 itself differentiates 'data information messages' from 'unmodified messages' and 'control messages' . . . Finally, if step 2 somehow is performed, it explicitly requires the performance of step (8), which in turn requires that 'if the message is a control message parsing and processing the control message.' Again, step (8) cannot be performed if a receiver is configured only to receive 'data information messages.' There is a clear logical inconsistency within the claims."

Michael S. Sutton Ltd. v. Nokia Corp. et al., 6-07-cv-00203
(TXED August 10, 2009, Memorandum Opinion & Order) (Davis, J.)

Tuesday, August 11, 2009

Speedier Resolution by Rocket Docket Does Not Warrant Retention of Venue

In granting defendant's motion to transfer, the court rejected plaintiff's argument that the district's "rocket docket" warranted retention of venue. "[A]lthough it may be true that Plaintiff will experience a speedier resolution of its action in this district, the Court cannot ignore the fact that the interest of justice remains on the side of transfer. . . . [I]f the Court were to give such a consideration commanding weight, all cases filed in this district would be effectively immune from transfer."

VIZIO, Inc. v. Funai Electric Company, Ltd., et al., 2-09-cv-00236
(VAED August 7, 2009, Order) (Doumar, J.)