Hourly Rates of $675-775 Deemed Unreasonable for Discovery Disputes

The court denied in part defendant's motion for discovery sanctions and found counsel's hourly rates of $675-$775 to be unreasonable. "This Court is not aware of any case before it where an attorney has sought that high an hourly rate for an ordinary discovery dispute. Based upon the evidence presented by the Defendant, including the Economic Survey performed by the American Intellectual Property Law Association, a more appropriate rate. . . is $475.00 [and] $325.00 per hour, which appear to be the median rates for partners and associates in the Los Angeles area performing intellectual property litigation."

Etagz, Inc. v. Quiksilver, Inc., 8-10-cv-00300 (CACD September 26, 2012, Order) (Goldman, M.J.).

Alleging “Selective Disclosure” of Prior Art Reference is Sufficient to Plead Intent to Deceive Element of Inequitable Conduct Claim

The court denied plaintiff's motion to dismiss defendants' inequitable conduct counterclaims for failure to plead with particularity. "[A]lthough the Court agrees that the specific theory underlying the intent to deceive element could have been more fleshed out in Defendants’ pleading, the Court finds that Defendants have alleged sufficient facts from which a reasonable juror could infer that [the inventor] acted with the requisite state of mind. . . . Defendants’ brief in opposition to Plaintiff’s motion to dismiss elaborates on the theory underlying the intent to deceive element by stating that [the inventor's] selective disclosure of structures discussed in his own article, while withholding the entirety of the article itself (which included a discussion of the Tanaka Patent) could lead a reasonable juror to infer that [he] acted with the requisite state of mind. Having carefully considered this argument, in conjunction with the factual allegations set forth in Defendants’ pleading, this Court agrees."

Industrial Technology Research Institute v. LG Corporation, et. al., 2-12-cv-00929 (NJD September 25, 2012, Order) (Linares, J.).

Defense Counsel Disqualified Based on Seventeen-Year-Old Prior Representation

The court granted plaintiff's motion to disqualify counsel for one defendant where defense counsel's firm represented plaintiff's predecessor 17 years ago. "Some of the invalidity defenses, if pursued, could involve factual inquiry into [plaintiff's] activities in the relevant time period, and it is conceivable that information about related factual matters could have been shared with [attorneys at the firm being disqualified]. . . . [I]t makes no difference that seventeen years have passed since [defense counsel's firm] represented [plaintiff's predecessor], when the lawsuit will in part concern events that occurred twenty years ago."

EON Corp. IP Holdings LLC v. FLO TV Incorporated, et. al., 1-10-cv-00812 (DED September 24, 2012, Order) (Andrews, J.).

35 U.S.C. §285 Permits Attorneys’ Fee Award for Post-Settlement Conduct “Intertwined” with Patent Issues

The court granted plaintiff's motion for attorneys' fees under 35 U.S.C. § 285 for enforcement of the parties' settlement agreement. "[E]ven assuming [defendant's] breach was inadvertent, [defendant] nonetheless infringed [plaintiff's] patent by continuing to sell the infringing product. Considering [defendant's] unreasonable conduct throughout settlement negotiations and in the post-settlement dispute, along with the clear continued infringement of [plaintiff's] patent in violation of both the permanent injunction and the settlement agreement, the Court finds the post-settlement issues asserted by [plaintiff] are so 'intertwined with patent issues' that the attorneys' fees provision of 35 U.S.C. § 285 applies."

Fitness IQ, LLC v. TV Products USA, Inc., 3-10-cv-02584 (CASD September 14, 2012, Order) (McCurine, M.J.).

Failure to Dismiss Case After Unfavorable Claim Construction Rendered Case Exceptional Warranting Attorneys’ Fees

Following summary judgment, the magistrate judge recommended granting in part defendant's motion for attorneys' fees under 35 U.S.C. § 285. The magistrate judge determined that the case became exceptional when plaintiff refused to dismiss its action following the Markman hearing. "The undersigned finds that the most compelling argument against [plaintiff] is its failure to oppose [defendant's] motion for summary judgment with any expert declaration. . . . Without an expert of its own, [plaintiff] could not prevail on summary judgment. This supports [defendant's] argument that [plaintiff] prolonged the litigation in bad faith after receiving the claims construction ruling."

Spectros Corp. v. Thermo Fisher Scientific, Inc., 4-09-cv-01996 (CAND September 17, 2012, Order) (Vadas, M.J.).

Timeshare Trading Patent Invalid for Failure to Claim Patentable Subject Matter Under Bilski

The court granted defendant's motion to dismiss plaintiff's infringement action for failure to state a claim where the patent-in-suit for trading timeshare properties over a network did not cover patentable subject matter. "[T]he computer components in independent claim 1 do not play a significant part in permitting the method to be performed. A computer is required only for performing basic, high-level tasks like crediting and debiting accounts, and notifying property management. . . . [These steps] are indistinguishable from the tasks that a human would perform manually, which was how the vacation timeshare industry functioned for nearly 30 years before the [patent-in-suit] was filed. . . . Adding the words 'apply it to a computer' cannot transform an abstract idea into a patentable claim, yet Plaintiff’s bare recitations of a computer and a database attempt to do just that."

Vacation Exchange, LLC v. Wyndham Exchange and Rentals, Inc., et. al., 2-12-cv-04229 (CACD September 18, 2012, Order) (Klausner, J.).

Claim Preclusion Bars Second Lawsuit Asserting Newly Issued Reexamination Claims Against Previously Accused Products

The court granted defendants' motion to dismiss plaintiffs' infringement action based on claim preclusion because newly issued claims from reexamination of the patent-in-suit did not create a new cause of action against the previously sued defendants and previously accused products. "Plaintiffs argue in this regard that they could not have asserted new reexamined claims 12-16 and amended claim 6 of the [patent-in-suit] in the first litigation because the claims were not in existence at the time. While literally true, plaintiffs' argument is flawed because they could have asserted the equivalent of the new and amended claims in the first litigation. In other words, plaintiffs were free to construe the patent more narrowly than they did. . . . The cases that plaintiffs rely on . . . are inapplicable because of the difference between reissue and reexamination."

Senju Pharmaceutical Co. Ltd., et. al. v. Apotex Inc., et. al., 1-11-cv-01171 (DED September 17, 2012, Order) (Robinson, J.).

Preliminary Injunction Prohibiting Sale of Galaxy Tab Survives Despite Jury Verdict of Noninfringement

The court denied without prejudice defendant's motion to dissolve a preliminary injunction precluding the sale of defendant's Galaxy Tab 10.1 tablet computer even though a jury returned a verdict finding no infringement of the patent that was the basis for the preliminary judgment. Defendant's interlocutory appeal of the injunction deprived the court of jurisdiction and the court had not yet issued a final judgment that would automatically dissolve the preliminary injunction. "First, notwithstanding [defendant's] characterization of [an earlier judgment] as 'final' in its opening brief, the parties now agree that because the [earlier judgment] referred simply to the jury verdict and did not resolve all substantive remedies, including [plaintiff's] requests for injunctive relief and enhanced damages, the judgment is not 'final' for purposes of appeal. Accordingly, the [earlier judgment] is not a final judgment as would automatically dissolve the . . . Preliminary Injunction. . . . Second, the parties agree that [defendant's] pending appeal of the. . . Preliminary Injunction deprives the Court of jurisdiction to dissolve the injunction until and unless the Federal Circuit returns jurisdiction to this Court. . . . Because the Court lacks jurisdiction to grant [defendant's] motion, the motion to dissolve must be denied."

Apple Inc. v. Samsung Electronics Co. Ltd., et. al., 5-11-cv-01846 (CAND September 17, 2012, Order) (Koh, J.).

Cease & Desist Letter Lacking Charge of Infringement did not Create Substantial Controversy Sufficient for Declaratory Relief Claim

The court granted defendants' motion to dismiss plaintiffs' declaratory relief action for lack of an actual case or controversy after defendant's letters asked plaintiff to refrain from encouraging the use of the patent-in-suit's methods and also mentioned the law regarding induced infringement. "None of the letters references [plaintiff's product] and none suggests that [it]. . . infringes the [patent-in-suit]. Rather, the conduct identified by the three letters relates to [plaintiff's] presentations and publications. Thus, to the extent that [plaintiff] is in apprehension of a lawsuit based upon the sale or use of [its product], the Court does not have jurisdiction under the declaratory judgment act."

Unisense Fertilitech A/S, et. al. v. Auxogyn, Inc., et. al., 4-11-cv-05065 (CAND September 14, 2012, Order) (Rogers, J.).

$50 Million Verdict Overturned Because Plaintiff Failed to Prove Infringing Products Were Made or Imported Into the United States

The court granted defendants' renewed motion for judgment as a matter of law of noninfringement under 35 U.S.C. § 271(a) and overturned the jury's $50 million verdict because plaintiff failed to present evidence that all of the accused kits were made or imported into the U.S. "With respect to § 271(a), plaintiff relies entirely on [defendant's employee's] testimony. However, she admitted she did not know where all the kits were made. And. . . she admitted she did not know whether foreign orders came through the United States. Accordingly, even if the jury were to ignore all the evidence that many of the accused products are not made in or imported into the United States, it could not find reasonably from [her] testimony that all of defendants’ sales infringed under § 271(a). . . . In addition, because plaintiff did not seek a new trial on damages in the event the court reached this conclusion, that issue is waived."

Promega Corporation, et. al. v. Life Technologies Corporation, 3-10-cv-00281 (WIWD September 13, 2012, Order) (Crabb, J.).

Should a Challenge to a Patent’s Validity Based on Claiming Unpatentable Subject Matter (i.e., Bilski) be Addressed at the Pleading Stage?

Yes.
The court granted defendant's motion to dismiss plaintiff's infringement claim for failure to state a claim where the court determined plaintiff's automatic pricing patent covered ineligible subject matter despite plaintiff's argument the issue was premature. "Plaintiff argues that it is premature to consider Defendant’s eligibility challenges to the patent because the Court has yet to construe any of the claim elements. . . . However, Plaintiff fails to explain how claims construction would materially impact the [35 U.S.C. § 101] analysis in the instant case. . . . [The Federal Circuit] confirmed that it 'has never set forth a bright line rule requiring district courts to construe claims before determining subject matter eligibility'. . . ."

OIP Technologies, Inc. v. Amazon.com, Inc., 3-12-cv-01233 (CAND September 11, 2012, Order) (Chen, J.).

---

No.
The court denied without prejudice defendant's motion to dismiss plaintiff's infringement action for failure to state a claim due to lack of patentable subject matter. "[Defendant] argues that the patents-in-suit do not claim patent eligible subject matter and are thus, invalid under 35 U.S.C. § 101. . . . The Federal Circuit has held that claim construction is an important first step in any § 101 analysis. The Court agrees that claim construction briefing, along with supporting evidence, may be necessary to determine whether the patents-in-suit contain patent-eligible subject matter. Accordingly, the Court denies Defendant’s Motion to Dismiss without prejudice."

Phoenix Licensing, LLC, et. al. v. Aetna Inc., et. al., 2-11-cv-00285 (TXED September 12, 2012, Order) (Gilstrap, J.).

Invalidation of Patent on Reexamination Warrants Relief from Judgment of Infringement, Including Injunction and Monetary Award

The magistrate judge recommended granting defendants' renewed motion for relief from judgment where the PTO invalidated the sole claim of the patent-in-suit during reexamination. "Defendants are entitled to the relief they seek under Rule 60(b)(5) and (6), as it would be inequitable and unjust to let stand, let alone enforce, an injunction and an unexecuted money judgment predicated on a patent claim found to be invalid and cancelled. . . . Because the District Court litigation was premised upon the presumed validity of a claim later found to have been void from its inception, the PTO's decision constitutes a material change in operative facts warranting equitable relief."

Flexiteek Americas, Inc., et. al. v. Plasteak, Inc., et. al., 0-08-cv-60996 (FLSD September 10, 2012, Order) (Seltzer, M.J.).

Claim Term “Sufficiently Rigid” was not Insolubly Ambiguous and did not Render Claim Indefinite

Following claim construction the court denied defendants' motion for summary judgment that plaintiff's patty molding patent was indefinite. "[Plaintiff's expert] explains that a person of ordinary skill in the art would understand that the term 'sufficiently rigid' is satisfied if the angular strut can transfer the forces applied to it by the reciprocating forces of the movement of the mold plate without failing. . . . Because the designer will make a determination of the required dimension of the strut based on the 'worst-case scenario,' a person of ordinary skill in the art can make a ready calculation of the bounds of the claim. . . . Therefore, based on the factual determination set out by [plaintiff's expert], I find that the evidence does not support a conclusion that the terms are '‘not amenable to construction’ or ‘insolubly ambiguous’' and invalid for indefiniteness."

Formax Inc. v. Alkar-RapidPak-MP Equipment Inc., et. al., 1-11-cv-00298 (WIED September 10, 2012, Order) (Griesbach, J.).

“Evolving” Laws at Time of Infringement Preclude Finding of Willful Infringement and Award of Enhanced Damages or Attorneys’ Fees

The court denied plaintiff's motion for enhanced damages and attorneys' fees even though the jury had found that defendant willfully infringed plaintiff's seed patent. "[T]here are unique factors present in this and similar 'seed saving' cases which are not fully reflected in the [Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed. Cir. 1992)] factors. The court will endeavor to discuss some of those factors now. First and foremost, the court finds. . . that the legal and historical context in which the infringements in this case arose renders them far less egregious than if the same infringements were to occur today. . . . At the time he committed the infringement in this case, it is not unreasonable that [defendant] would have thought that the still-evolving laws regarding seed saving practices could be interpreted in a manner favorable to him or that [plaintiff] might be pressured to enforce those laws in a less uncompromising manner. . . . The court can also not ignore the extremely heavy personal toll which this litigation has taken on [defendant]. . . . [He] has already paid an enormous financial and personal toll for the mistakes which he has made, and the court finds the argument that he has not already been 'taught a lesson' to be highly suspect."

Monsanto Company v. Scruggs, et. al., 3-00-cv-00161 (MSND September 7, 2012, Order) (Mills, J.).

Defendant Sanctioned for Document Dump has “Chutzpa” to Blame Plaintiff for Reviewing Documents too Slowly

The court awarded plaintiff discovery sanctions and rejected defendant's objection that plaintiff reviewed defendant's document production too slowly. "[Defendant] produced [44,000] pages of documents that this Court previously found constituted a 'document dump.' When [defendant] objected that it could not understand why [plaintiff] thought the documents were non-responsive, [plaintiff] created the 1,300 [page] spreadsheet detailing why it believed the documents were non-responsive. Now, [defendant] is essentially complaining that [plaintiff] took too much time to figure out why [defendant's] production was, in fact, a document dump. [Defendant's] argument can only be characterized as sheer 'chutzpah.'. . . ‘The “classic definition” of chutzpa [is:] “that quality enshrined in a man who, having killed his mother and father, throws himself on the mercy of the court because he is an orphan.”’”

Aviva Sports, Inc. v. Fingerhut Direct Marketing, Inc., et. al., 0-09-cv-01091 (MND September 6, 2012, Order) (Mayeron, M.J.).

First-to-File Rule Trumps Forum Selection Clause

The court granted defendant's motion to transfer venue of plaintiff's infringement action under the first-to-file rule and rejected plaintiff's argument that a forum selection clause in the parties' license agreement precluded such transfer. "[Plaintiff] argues that the presence of the clause defeats the ordinary application of the first-filed rule and that '[c]ourts do not apply the 'first to file' concept where the first-filed action is filed in a forum other than the parties' chosen forum.' [Plaintiff] has failed, however, to provide any controlling authority for this proposition. Indeed, this court has previously observed that forum selection clauses are not enforced when they violate a strong public policy of the forum and that such public policy concerns are actually implicated in the first-filed context. . . . If both the present case and the Texas action go forward, the potential for 'conflicting results, confusion, expense, and waste of judicial resources' would undermine judicial efficiency. Given these public policy concerns, the court will not enforce the Delaware forum selection clause of the License Agreement, and it will not preclude the application of the first-filed doctrine."

Mitek Systems, Inc. v. United Services Automobile Association, 1-12-cv-00462 (DED August 30, 2012, Order) (Sleet, J.).

NPE’s Choice of Forum Given Little Weight in Venue Challenge

The court granted defendant's motion to transfer plaintiff's infringement action from the Eastern District of Virginia to the Northern District of Illinois and did not afford great weight to the non-practicing entity plaintiff's choice of forum. "[Plaintiff] alleges. . . that in 2003 [it] made the Eastern District of Virginia its principal place of business. . . . [Defendant] has provided the Court with a copy of complaints filed [in other actions] in which [plaintiff] alleges its principal place of business is in Chicago, Illinois. . . . [W]hen confronted with this documentation, [plaintiff] conceded to the Court that it was not actually until 'sometime after 2006' that [its] principal place of business was changed from Illinois to Virginia, although counsel could not tell the Court exactly when that transition occurred. . . . [B]ecause this district lacks significant contacts with the claim, Plaintiff's choice of forum will not be given great weight."

CIVIX-DDI, LLC v. Loopnet, Inc., 2-12-cv-00002 (VAED August 30, 2012, Order) (Davis, J.).

Alleging Infringement by “At Least” Certain Products was “Deliberately Vague” and Failed to State a Claim of Infringement

The court granted defendants' motion to dismiss plaintiff's direct infringement claims for failure to state a claim. "[I]t is far from obvious from the Complaint that [two products] are the sole products at issue, given [plaintiff's] continued use of the ‘at least' qualifier before every mention of one of the two specific products. It is also unclear from the Complaint that [plaintiff] gave the Defendants any notice of infringement; to the contrary, the Complaint asserts that infringement has been occurring since 'at least as of the date of filing' of this Complaint. Such deliberately vague language provides absolutely no context for the Defendants and cannot constitute notice to the Defendants of the conduct they are alleged to have committed."

Radiation Stabilization Solutions LLC v. Varian Medical Systems, Inc., et. al., 1-11-cv-07701 (ILND August 28, 2012, Order) (Kendall, J.).

District Court Grant of Ongoing Royalty Precludes Finding of Section 337 Violation by ITC

The ALJ granted respondents' motion for summary determination of no violation of Section 337 because respondents were authorized to import and sell the accused products pursuant to a district court order involving the same parties where complainant had been granted an ongoing royalty against respondents. "[T]he ALJ finds the statutory basis, legal theory, and characteristics of the ongoing royalty as well as the specific facts of this case compel the conclusion that the ongoing royalty is a license that allows [respondents] to continue to import the accused products. . . . [A]n ongoing royalty should be viewed as a license for the adjudged infringer to use the patented inventions such that there is no longer any violation of the patentee's patent rights."

Video Displays and Products Using and Containing Same, 337-TA-828 (ITC August 27, 2012, Order) (Essex, ALJ).