Thursday, March 29, 2012

Pleading Requirements for Willful Infringement

Willful infringement claims are frequently challenged at the pleading stage (e.g., by motions to dismiss, motions for judgment on the pleadings, motions to strike, etc.). This list provides summaries of orders addressing such challenges.

Knowledge of Issued Patent Not Required to Plead Willful Infringement

The court denied defendants' motion to dismiss plaintiff's willful infringement claim for failure to state a claim. "The Moving Defendants next contend that [plaintiff's] allegations of willfulness must fail because they do not allege knowledge of an issued patent. . . . While it is unlikely that [plaintiff] could proceed to trial on a claim for willful infringement based solely on pre-issuance knowledge, [plaintiff] has adequately pled a claim for willful infringement. In other words, [plaintiff] has successfully pled enough facts regarding willful infringement to raise the right to relief above the speculative level."

TracBeam, LLC v. AT&T Inc., et. al., 6-11-cv-00096 (TXED March 27, 2012, Order) (Davis, J.)

Monday, March 26, 2012

Judge Posner Orders Early Briefing On Whether Plaintiff Would be Entitled to "Nontrivial" Damages

Following a preliminary conference, the court sua sponte expressed its concern about whether plaintiffs would be entitled to "nontrivial damages" if they established liability and ordered the parties to submit briefs on the issue. "Suppose the defendants infringed the asserted patents but that none of the defendants marketed its products as low in bad cholesterol (LDL) or high in HDL, or as having a high ratio of HDL to LDL; and suppose further that the defendants obtained no cost savings by infringing the patents rather than using some non-infringing recipe and that neither [plaintiff] nor its licensee . . . lost any business as a result of the infringement. On those assumptions, would the plaintiffs have any claim for damages, whether compensatory or punitive, or restitution? I would like the parties to address this question in briefs filed simultaneously by close of business on April 2."

Brandeis University et al v. Nestle USA, Inc., 1-12-cv-01513 (ILND March 16, 2012, Order) (Posner, J.)

Trivial and nontrivial damage awards

On March 16, 2012, following a preliminary conference, Judge Posner expressed concern about whether plaintiffs would be entitled to "nontrivial damages" in Brandeis University et al v. Nestle USA, Inc. and ordered an early briefing where the parties were to assume a number of facts that will likely be disputed. Nevertheless, it’s a great question and one that every party should consider seriously at the inception of litigation or before. Since the beginning of 2008, the Northern District of Illinois has issued damage awards in patent cases ranging from a trivial $8,074 to a nontrivial $23 Million. See the list here. (To see damage awards from other courts click the pencil icon next to “District Court: Illinois Northern District” in the “Search Criteria” box at top of the search results page.)

Selling Infringing Products Just a Few Days Every Six Months "Hamstrung" Plaintiff's Ability to Enforce Patent Rights and

Justified Preliminary Injunctive Relief
The court granted plaintiffs' unopposed motion for a preliminary injunction regarding their shoe design patents. "[Defendant's] pattern of entering the United States for purposes of selling Alleged Infringing Shoes for a period of just a few days once every six months has hamstrung Plaintiffs’ ability to effectively enforce their patent and trademark rights. On the other hand, [defendant] has many non-infringing footwear designs it could sell instead of the Alleged Infringing Shoes. In view of the foregoing facts, [defendant] took a calculated risk by returning to the United States to continue selling the Alleged Infringing Shoes and the balance of harms tips in Plaintiffs’ favor."

Nike, Inc., et. al. v. QiLoo International Limited, 2-12-cv-00191 (NVD March 22, 2012, Order) (Navarro, J.)

What types of harm have been deemed irreparable justifying TRO or preliminary injunction?

In addition to showing a likelihood of success on the merits, patent plaintiffs who seek TROs or preliminary injunctions must show irreparable harm. This can be challenging considering the wide range of damages and permanent injunctive relief that can be awarded after a finding of liability. Nevertheless, courts have found irreparable harm in a number of situations such as price erosion, loss of market share and reputational harm. This list provides summaries of court orders finding irreparable harm for purposes of a TRO or preliminary injunction in patent cases.

Friday, March 23, 2012

Method For Implementing an Instruction in Java Not Invalid Under Bilski for Claiming Unpatentable Subject Matter

The court denied defendant's motion for summary judgment that plaintiff's patent claiming a method for implementing an instruction in Java was invalid for claiming unpatentable abstract ideas. "[Defendant] argues that the [patent-in-suit] 'cover[s] the abstract steps of obtaining a piece of data, using said data to determine a next step to be taken, and then potentially modifying said piece of data.'. . . The claims here are clearly more specific than [defendant's] generalized description: the claims specify that the data obtained must include data from a resolution data field, that the next step to be taken is a resolving step, and that the modification is to indicate that a reference is resolved. . . . [T]he [asserted] Patent distinguishes the invention from prior art that required rewriting the bytecode; instead, the claims recite modifying the data in the data structure or constant pool entry, including the data in the resolution data field. The claims also recite specific implementation details, such as using data from the resolution data field as an index to a jump table. Thus, it appears that the claims are directed to a specific application and implementation of general principles, rather than broadly pre-empting the use of an abstract idea. . . . Here, the claims of the [asserted] Patent do more than recite an abstract idea and say 'apply it.' Rather, they recite specific steps that confine the claims to a specific, useful application."

Nazomi Communications Inc v. Samsung Telecommunications Inc et al, 5-10-cv-05545 (CAND March 21, 2012, Order) (Whyte, J.)

How have district courts addressed challenges to patentability since Bilski?

Since the Supreme Court decided In re Bilski on June 28, 2010, district courts in the U.S. have applied the decision in more than two dozen different cases. This list provides summaries of the district court orders addressing Bilski issues.

Thursday, March 22, 2012

Stay Pending Reexam Granted Even Though Parties Were Direct Competitors

In granting defendant's motion to stay pending inter partes reexamination, the court (i) found that the stage of litigation and simplification of issues factors favored granting the stay and (ii) rejected plaintiff's argument that a stay would cause prejudice because the parties were direct competitors. "[Plaintiff] asserts that it will suffer undue prejudice as a result of a stay because [defendant] is its direct competitor in the emerging oxygen concentrator market, and a lengthy stay of three to six years would allow [defendant] to gain market share at the expense of [plaintiff's] permanent loss of market share. . . . [T]here are several factors here that undermine [plaintiff's] assertion of undue prejudice. First, [plaintiff] waited a month after filing its Complaint before serving the Complaint on [defendant], and has yet to request a preliminary injunction, suggesting that monetary damages will adequately compensate [plaintiff] should [defendant] be found liable for patent infringement. Additionally, [defendant] has provided evidence that the [relevant] includes at least ten participants, diluting the direct effect of [defendant's] sales on [plaintiff's] market share. Furthermore, given the recent change to the inter partes reexamination standard, it is unclear whether the inter partes reexamination process will take as long as current statistics suggest."

Inogen Inc. v. Inova Labs Inc., 8-11-cv-01692 (CACD March 20, 2012, Order) (Staton Tucker, J.)

Success Rates for Motions to Stay Pending Reexamination

Since early 2008, district courts in the U.S. have ruled on 942 motions to stay pending reexamination. Of those, 538 (57%) were granted and 276 (29%), were denied. During that time, the Northern District of California ruled on 97 motions with a grant rate slightly higher than the national average: 60 (62%) granted and 27 (28%) denied. By contrast, the Eastern District of Texas ruled on 99 such motions, but granted only 39 (39%) while denying 52 (53%). (Note: The number of grants and denials do not include other results such as partial grants or denials, deferred rulings, etc.) This list provides a complete list of orders on motions to stay pending reexam. You may filter by court, judge, date, result, or other criteria using the search filters along the left-hand margin.

Wednesday, March 21, 2012

Permanent Injunction Granted With Sunset Provision Requiring Trebled Royalty of 9% on Future Sales

The court granted plaintiff's motion for a permanent injunction precluding infringement of its Ethernet chip patents, but required plaintiff to add a sunset provision temporarily allowing infringing sales with a trebled royalty of 9%. "[A] royalty of 3% of the selling price of the [accused] product. . . represents a reasonable royalty for an arm’s-length transaction. This is the rate implicitly found by the jury in awarding damages for violation of the [patent-in-suit]. . . . However, that is not the appropriate royalty where the Court in essence affords a license for what now is willful infringement. The Court orders a trebled royalty of 9% on all sales made during the Sunset Period."

Broadcom Corporation v. Emulex Corporation, 8-09-cv-01058 (CACD March 16, 2012, Order) (Selna, J.)

Conditions on Permanent Injunctions

Since eBay v. MercExchange was decided nearly six years ago, district courts have been weighing “principles of equity” to determine whether a permanent injunction is an appropriate remedy for patent infringement. As today’s lead story (above) illustrates, courts also apply equitable principles to determine the type of injunction that should issue, i.e., whether the injunction should include certain conditions or restrictions. This list provides a summary of orders granting permanent injunctive relief, but with conditions and restrictions required by equity.

Tuesday, March 13, 2012

Two More Courts Sever Co-Defendants Accused of Infringing the Same Patents

The court granted defendants' motion to sever plaintiff's infringement action for misjoinder and sua sponte severed the non-moving defendants. "[Plaintiff] accuses the defendants of infringing the asserted patents in the same way, but not as part of the same transaction or series of transactions. The Court agrees that there may be common questions of law and fact because the defendants are alleged to have infringed the same patents; however, those common questions are insufficient to meet the first requirement of Rule 20 that the defendants have engaged in the same transaction or occurrence or series of transactions or occurrences."

GPNE Corp. v., Inc. et al, 1-11-cv-00426 (HID March 9, 2012, Order) (Puglisi, M.J.)

The court granted defendants' motions to sever for misjoinder. "Plaintiff has failed to allege how any one Defendants' alleged acts of infringement are in any way related to any other Defendants' alleged acts of infringement. Plaintiff accuses over seventy-six products and product families that run the gamut from cardiac defibrillators, weigh scales, ultrasound systems, and equine monitoring systems."

Body Science LLC v. Boston Scientific Corporation et al, 1-11-cv-03619 (ILND March 6, 2012, Order) (Castillo, J.)

What types of activities permit joinder of multiple co-defendants in a single patent case?

In recent months (perhaps due to the enactment of the Leahy-Smith America Invents Act) many courts have been taking a close look at the joinder of multiple co-defendants in a single patent case. In particular, many courts have been exploring the different types of activities that might qualify as a common transaction or occurrence sufficient to support joinder. This list provides summaries of recent court orders addressing various challenges to joinder of multiple defendants in patent suits.

Friday, March 9, 2012

What kind of relationships trigger the Common Interest Doctrine?

The Common Interest Doctrine is frequently invoked in patent cases to protect the exchange of otherwise privileged materials among those with a common legal interest, e.g., joint defense groups. However, it is sometimes used to resist legitimate discovery. Docket Navigator can help you determine what types of relationships trigger the Common Interest Doctrine and what types do not. See a list of court orders addressing challenges to the assertion of the Common Interest Doctrine in patent cases.

Defendants' Exchange Of Privileged Litigation Materials During Acquisition Negotiations Did Not Waive Privilege Under Common Interest Doctrine

Following an in camera review, the court denied plaintiff's motion to compel the production of documents listed on defendants' privilege log and withheld from production under a claim of attorney-client privilege. Although the court's in camera review confirmed that the documents were privileged, plaintiff argued unsuccessfully that each defendant's disclosure to a co-defendant waived the privilege because such disclosure was for business and not legal purposes. "The disputed documents at issue were either authored by [one defendant's] outside counsel for [that defendant], or [a second defendant's] outside counsel for [the second defendant]. The documents were subsequently turned over to each respective party by the other during [the second defendant's] negotiations to acquire all of [the first defendant's] products and related intellectual property. . . . Defendants’ proffered intentions for the mutual exchange of the privileged documents between [defendants] establish that these parties had a common legal interest in avoiding or reducing litigation by sharing the legal documents described herein. There may indeed have been an overlap of commercial and legal interests given the purpose of the disclosure, namely wholesale purchase of [one defendant] by [another defendant]. But this overlap does not negate the effect of the legal interest in establishing a community of interest. . . . The Court finds that this mutual interest in valid and enforceable patents fits within the confines of the common legal interests doctrine."

Morvil Technology, LLC v. Ablation Frontiers, Inc., et. al., 3-10-cv-02088 (CASD March 8, 2012, Order) (Skomal, M.J.)

Thursday, March 8, 2012

What types of litigation misconduct result in attorneys’ fees award?

Awards of attorneys’ fees under 35 U.S.C. § 285 involve a number of preliminary determinations (prevailing party, willfulness, adequacy of pre-filing investigation, litigation misconduct, etc.) and a review of the reasonableness of counsel’s fee (i.e., billing rates, staffing decisions, and total hours charged). Docket Navigator can help you break down the process step by step and factor by factor. See a list of court orders awarding attorneys’ fees where litigation misconduct was a contributing factor. To view a different set of orders (e.g., orders denying attorneys’ fees or orders focusing on a different factor), you can edit the search criteria at the top of the page.

"This Is Not Horseshoes" -- Plaintiff's Infringement Claim Was Objectively Baseless And Warranted Award Of Attorneys' Fees Despite

Evidence That Defendant Practiced A Majority Of The Steps Of The Claimed Method
The court granted defendant's motion for attorneys' fees under 35 U.S.C. § 285 following summary judgment of noninfringement where plaintiff maintained an objectively baseless lawsuit against defendant. "[Plaintiff] rejected reasonable assurances from [defendant], in the form of two affidavits from [defendant's] CFO . . . as well as in its responses to requests for admissions, averring that [defendant] had not used in-cab scanning and did not intend to implement in-cab scanning. Instead of objectively viewing the record and voluntarily dismissing its infringement claim, [plaintiff] unreasonably and vexatiously sought additional reassurances from [defendant] and persisted in prosecuting a claim that lacked a realistic chance of success. . . . The Court also notes that throughout the litigation, [plaintiff] has placed great emphasis on the fact that [defendant] practiced some, or even a majority, of the steps of the claimed method, as if that were sufficient, without more, to sue [defendant] for infringement. This is not horseshoes, however, and suing [defendant] because it practiced most of the steps of the claimed method is not good enough."

In re: Bill of Lading Transmission and Processing System Patent Litigation, 1-09-md-02050 (OHSD March 6, 2012, Order) (Beckwith, J.)

Friday, March 2, 2012

Hatch-Waxman Precludes Misuse and Unclean Hands Counterclaims Based on Alleged Improper Orange Book Listing

The court granted plaintiff's motion to dismiss defendant's patent misuse and unclean hands counterclaims based on alleged improper Orange Book listing because the Hatch-Waxman Act precluded such claims. "The 2003 Amendment to the Hatch-Waxman Act 'provides a limited counterclaim to a generic manufacturer' in a Paragraph IV infringement action. The Act authorizes the generic manufacturer to assert a counterclaim 'on the ground that the patent does not claim either (aa) the drug for which the application was approved; or (bb) an approved method of using the drug.' . . . By describing the 2003 Amendment as providing 'a limited counterclaim' in [Novo Nordisk v. Caraco Pharm., Labs, Ltd., 601 F.3d 1359, 1364 (Fed. Cir. 2010)], the Federal Circuit strongly suggested that this provision created the only private right of action for an alleged infringer seeking to delist a patent from the Orange Book. . . . Although district courts are split on this issue, the cases denying counterclaims based on improper Orange Book listings comport with the Federal Circuit‘s interpretation of the 2003 Amendments. . . . Moreover, Defendant‘s [c]ounterclaims for patent misuse and unclean hands depend entirely on finding that Plaintiff improperly listed the [patent-in-suit] in the Orange Book [as alleged in defendant's first counterclaim], making these claims redundant."

Braintree Laboratories Inc. v. Amrutham, Inc., 2-11-cv-01854 (PAED February 27, 2012, Order) (Diamond, J.)

Thursday, March 1, 2012

iPhone's Commercial Success Does Not Indicate Non-Obviousness Where Plaintiff Failed to Establish Nexus Between Patented Feature and Such Success

The court granted in part defendant's motion for summary judgment that plaintiff's handset device patent was obvious and rejected plaintiff's argument that the commercial success of the accused phone was relevant to secondary considerations of nonobviousness. "[A]lthough Plaintiff has introduced evidence that iPhone purchasers put significant value on the iPhone’s ability to switch between a cellular network and a Wi-Fi network, Plaintiff has failed to establish that this feature infringes its patent, or that the iPhone’s success is linked to its transmission of e-mail to a LAN at a lower power than that used to transmit to a WAN. Accordingly, Plaintiff has failed to demonstrate infringement and a nexus between its invention and the iPhone’s success. Therefore, Plaintiff cannot rely on the commercial success of the iPhone as a secondary indication of non-obviousness."

NetAirus Technologies, LLC v. Apple Inc., 2-10-cv-03257 (CACD February 27, 2012, Order) (Kronstadt, J.)