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.)

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.)

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.)

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.)

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

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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.)

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.)

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.)

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.)

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.)

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.)

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.)

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.)

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.)

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.)

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.)

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.)

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.)

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.)