Friday, August 30, 2013

Adverse Claim Construction and Evidentiary Rulings Do Not Justify Immediate Appeal Under Rule 54(b)

Following claim construction and an order in limine precluding testimony by plaintiff's damages expert, the court ordered additional briefing on the parties' stipulated motion for judgment of noninfringement under Rule 54(b). "[T]he stipulated judgment does not constitute a disposal of an 'individual claim' in this action. The stipulated judgment states that in light of the court’s three pretrial orders, '[Plaintiff] acknowledges that . . . it cannot prove infringement on the claims to be tried . . . or to the extent it could prove infringement, it has no available remedies.'. . . [Plaintiff's] equivocation leaves open the possibility that it could still prove infringement. . . . [Plaintiff] cannot appeal the court’s rulings if some other avenue for proving infringement still exists and is reserved; it must stipulate to a judgment that precludes any avenues for proving infringement. Moreover, it is not clear to the court from the record before it why its pretrial orders mandate that [plaintiff] cannot prove infringement. . . . [A] ruling on a motion in limine alone does not create 'an ultimate disposition of an individual claim entered in the course of a multiple claims action.' Appeals on claim construction rulings alone also are disfavored."

Dynetix Design Solutions, Inc. v. Synopsys, Inc., 5-11-cv-05973 (CAND August 28, 2013, Order) (Grewal, M.J.).

Thursday, August 29, 2013

License of Specific Patent Claims to Handset Manufacturers Exhausts All Claims as to Downstream Use of the Handsets

The court granted defendants' motion for summary judgment on their patent exhaustion defense because plaintiff’s license to cellular handset manufacturers, which were limited to specific patent claims and specific fields of use, exhausted the entire licensed patents as to downstream consumers and third party users of the handsets. "[Plaintiff] contends it ‘carefully licensed the materially different content and handset claims to the respective infringers in the respective fields.’ It is apparent that [plaintiff] sought to carefully construct some of its Licensing Agreements in such a way that it could recover multiple royalties on the same patents from a single sale or use. . . . [Plaintiff] argues that the handset manufacturer companies which obtained licenses from [plaintiff] received licenses to practice only the handset claims. Defendants’ activities . . . purportedly infringe [plaintiff's] content claims, which were not licensed to the handset manufacturer companies. . . . However, [plaintiff] cannot avoid patent exhaustion by attempting to shield some of the claims within the patents-in-suit from being covered by Licensing Agreements. . . . Once [plaintiff] licensed its patent portfolio to, for example, Motorola, downstream consumers and third-party users of Motorola devices employing [plaintiff’s] patents cannot be found to be infringing. . . . All of the patents-at-issue require the use of a handset device. . . . If these claims are separate and distinct within a single patent that a patentee seeks royalties on licenses for each individual claim, the patentee must file separate patents and then issue a license on each distinct patent. . . . To permit [plaintiff] to recover multiple times on the same patent by selling licenses to the patents piece by piece (or claim by claim) is contradictory to these policies supporting the doctrine of patent exhaustion.”

Helferich Patent Licensing, LLC. v. New York Times Co., 1-10-cv-04387 (ILND August 14, 2013, Order) (Darrah, J.).

Wednesday, August 28, 2013

Availability of Patent Pilot Program Does Not Factor Into Venue Analysis

The court granted defendant's motion to transfer plaintiff's infringement action from the Northern District of Illinois to the Western District of Washington and rejected plaintiff's argument that the patent pilot program made Illinois a better forum for its case. "The pilot program involves fourteen federal district courts, including the Northern District of Illinois but not the Western District of Washington. However, [plaintiff] misunderstands the underlying purpose and function of the pilot program. . . . '[T]he program does not necessarily enhance the patent expertise of the participating districts vis-à-vis other districts. Instead, it enhances the patent expertise of participating judges within a district vis-à-vis other judges in the same district.'. . . Consequently, this is a neutral factor."

Craik v. The Boeing Company, 1-13-cv-00874 (ILND August 15, 2013, Order) (Darrah, J.).

Tuesday, August 27, 2013

No Expert Testimony as to Hypothetical Negotiation “Extending Over Several Years”

The court granted in part plaintiff's motion to strike defendant's damages expert's report. "The law regarding the date of the so-called 'hypothetical negotiation' is well-understood. There is a date of the negotiation, not some range, and certainly not a range extending over several years. Is this an artificial construct? Yes, but so is the entire hypothetical negotiation, which by its very nature involves some conjecture. This court is not at liberty to dispense with long-standing case law from the Federal Circuit making clear that there is a discrete point in time to consider, and that point in time is the date the jury decides infringement first began. [Defendant's expert] may not confuse the jury as to this law by suggesting anything to the contrary."

Dynetix Design Solutions, Inc. v. Synopsys, Inc., 5-11-cv-05973 (CAND August 22, 2013, Order) (Grewal, M.J.).

Monday, August 26, 2013

Damages Expert Precluded From Testifying as to Royalty Rate Based on “50% of Defendant’s Gross Profit Margin”

The court granted defendant's motion to exclude the testimony of plaintiff's damages expert on a reasonable royalty rate because the expert improperly assumed that the starting point for a hypothetical negotiation would be 50% of defendant's gross profit margin. "While the court does not disagree that this could be 'one' reasonable starting place, the law requires [plaintiff's expert] to tailor the royalty rate to the specific facts of this particular case, including the 'particular technology, industry, or party.' [Plaintiff] admits in its opposition brief that '[its expert's] starting point relies on nothing but the assumptions that the patent is valid and infringed, and that there is no other information. . . . [He] considered no analogous facts of the case here other than the presumed validity of the patent. He failed to cite any evidence to support his conclusion that the 50% starting place would apply to component parts such as [the accused feature] in this particular industry. [Plaintiff's expert's] methodology is indistinguishable from 25% rule rejected in [Uniloc v. USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011)], except that it may be even more arbitrary. . . . [The expert’s] opinions and testimony based on his present damages report cannot be allowed to lead the jury into certain error.”

Dynetix Design Solutions, Inc. v. Synopsys, Inc., 5-11-cv-05973 (CAND August 22, 2013, Order) (Grewal, M.J.).

Friday, August 23, 2013

Damages Expert’s Reliance on “25% Rule” Supports Preclusion of Testimony

The court granted defendant's motion to strike plaintiff's damages expert's reports and rejected plaintiff's argument that its expert relied on the 25% rule of thumb as an alternative method to calculate reasonable royalty damages. "Plaintiff claims that [the expert's] opinions do not rely on the discredited 25 percent rule, contending instead that [the expert's] report shows that the 25 percent rule is 'an alternative method' for determining reasonable royalty damages. However, in the view of the Federal Circuit, the 25 percent rule is not 'an alternative method' at all; it is a 'fundamentally flawed,' forbidden method, which the Court as gatekeeper cannot allow to taint the jury’s consideration of damages. Even where the 25 percent rule is offered merely as a starting point to which the relevant factors for a reasonable royalty calculation found in Georgia-Pacific are then applied to adjust the rate, the taint of the 25 percent rule remains. . . . Plaintiff has not shown [the expert] to possess sufficient 'scientific, technical, or other specialized knowledge [that] will help the trier of fact to understand the evidence or to determine a fact in issue.' Fed. R. Evid. 702(a). Accordingly, the Court strikes [the expert's] reports and precludes him from testifying at trial."

Info-Hold, Inc. v. Muzak Holdings LLC, et. al., 1-11-cv-00283 (OHSD August 20, 2013, Order) (Black, J.).

Thursday, August 22, 2013

NPE Litigation Misconduct Does not Warrant Dismissal . . . Yet

The court denied defendant's motion to dismiss a non-practicing entity's infringement action in light of litigation misconduct but reserved the right to consider such a sanction in the future. "[Plaintiff's founders] were aware that [plaintiff] might not own the [patent-in-suit] back in 2010. [Plaintiff] attempted to conceal evidence of the incomplete transfer through discovery stonewalling and obfuscation. . . . Taken in its entirety, [plaintiff and its founders] engaged in an extensive cover-up. . . . [Plaintiff] manufactured venue in Texas via a sham. [The founders] rented a windowless file-cabinet room with no employees in Texas and held it out as an ongoing business concern to the Texas judge. . . . To create the impression that [plaintiff] is something other than a patent troll, [plaintiff] and its principals have repeatedly made misleading statements to [defendant] and to the Court. . . . The litigation misconduct is most troubling. But does it warrant outright dismissal? This is a close case. At this stage, the Court is unwilling to impose a terminating sanction but may be willing to do so if the abuse continues. Attorney’s fees caused by and traceable to the misconduct are likely to be imposed but that remedy will be held in abeyance to see how well both sides behave from here on out."

Network Protection Sciences, LLC v. Juniper Networks, Inc., et. al., 3-12-cv-01106 (CAND August 20, 2013, Order) (Alsup, J.).

Wednesday, August 21, 2013

Plaintiff’s Pre-Trial Settlement With 58 Defendants Did Not Justify Attorneys’ Fee Award

The court denied defendants' motion for attorneys' fees under 35 U.S.C. § 285 after plaintiff settled with all 58 defendants before trial. "[Defendants argue [plaintiff] filed this action to obtain nuisance value settlements, as evidenced by its settlements with other parties to this action for amounts far less than the cost of litigation to encourage quick settlements. . . . While the smaller settlements suggest this case was a settlement driven case, [plaintiff] noted that its damage model for many of the defendants was small. . . . While practically speaking a plaintiff may not choose to file a patent infringement lawsuit when the damages are small, there is no minimum damages requirement to bring such a case. Here, there is no other evidence that [plaintiff] was merely exploiting the high cost of defending a patent case to obtain a nuisance value settlement, therefore [plaintiff] did not act in bad faith in bringing this action. . . . The Court notes that it seriously considers when a Defendant alleges a case was merely brought as a nuisance lawsuit, and will not hesitate to award attorney fees if the facts support doing so. However, in this case, the facts did not support such an award."

Adjustacam LLC v., Inc., et. al., 6-10-cv-00329 (TXED August 19, 2013, Order) (Davis, J.).

Tuesday, August 20, 2013

Contempt of Permanent Injunction Warrants Disgorgement of Profits and Coercive Penalty

The court found defendant in contempt of a permanent injunction after determining that defendant's new software product was not more than colorably different than the enjoined product. The court ordered a disgorgement of defendant's incremental (not gross) profits of $17 million through July 1, 2013, plus $24,850 per day thereafter, and provisionally imposed a coercive penalty in the amount of $67,362 per day. "Where, as here, 'awarding a reasonable royalty would simply encourage continued defiance of court orders and promote disrespect for the law, where a defendant's profits from wrongdoing are so much greater than any estimated royalty amount, and where it is difficult if not impossible to calculate the actual loss of the plaintiff attributable to the contempt,' the remedy of disgorgement of profits is appropriate. . . . [T[he Court can quickly dispense with gross profits finding that they are inappropriate measures of disgorgement, because they are not an appropriate measure of the extent to which [defendant] has profited from its contemptuous conduct. . . . [Defendant's] contumacious conduct . . . is . . . quite troubling because it reflects a willingness to be casual about its obligation to obey the injunction. Also, [defendant's] conduct in advising customers about how to run [the accused software] and [defendant's new product] in parallel and in not verifying whether customers had stopped using [the accused product] illustrates the need to use the coercive power of the Court to assure compliance with the injunction henceforth. However, [defendant] must be given an opportunity to purge the contempt before a coercive remedy is enforced. The appropriate coercive remedy is a fine of $62,362 per day for every day that [defendant] remains in contempt. If, however, [defendant] demonstrates by [next month] that it is in compliance with the injunction, no coercive remedy will be imposed."

ePlus, Inc. v. Lawson Software, Inc., 3-09-cv-00620 (VAED August 16, 2013, Order) (Payne, J.).

Monday, August 19, 2013

Reasonable Belief in Noninfringement and Good Faith Design-Around Repel Attorneys’ Fee Claim

Following a bench trial on damages and attorneys' fees, the court denied plaintiff's motion for attorneys' fees under 35 U.S.C. § 285. "[A]lthough Defendants continued to sell and market infringing pool enclosures after this case was filed, they did so because they had a reasonable belief that their enclosures did not infringe the [patent-in-suit]. This belief was based on the denial of [plaintiff's] motion for a preliminary injunction. Furthermore, after the Court ruled that Defendants’ enclosures did infringe, Defendants made a good faith effort to design around the Patent by fixing the end panels of their pool covers in place. Thus, Plaintiff has not shown that Defendants willfully infringed as it has not met its burden to show that Defendants acted despite an objectively high likelihood of infringement."

Aqua Shield v. Interpool Pool Cover Team, 2-09-cv-00013 (UTD August 14, 2013, Order) (Stewart, J.).

Friday, August 16, 2013

Excessive Jury Verdict Requires Plaintiff to Choose Between 50% Remittitur or New Damages Trial

The court granted in part defendant's motion for remittitur or a new damages trial following the jury's verdict of $30.2 million and required plaintiff to choose between a reduced award of $15.1 million or a new trial. "[A]lthough the entire market value rule does not apply on the facts of this case, the concerns that motivate the doctrine nonetheless speak to whether the Jury's damages award was appropriate. Thus, while there is no smaller patent-practicing unit than the [accused game system] as a whole, the [patent-in-suit's] technology was used only in two features . . . and thus was in some sense ancillary to the core functionality of the [accused product] as a gaming system. In addition, the evidence presented at trial showed that consumer reception for the patent-related features was mixed. Based on these factors and the fact that the [accused system] is not itself profitable, the Court finds that it surpasses reasonable belief that [defendant] would, in a hypothetical negotiation, agree to a 'reasonable royalty' payment anywhere near as large as that awarded by the jury."

Tomita Technologies USA, LLC, et. al. v. Nintendo Co., Ltd., et. al., 1-11-cv-04256 (NYSD August 14, 2013, Order) (Rakoff, J.).

Thursday, August 15, 2013

$70 Million Damages Award Trebled Due to “One-sidedness of the Case” and “Flagrancy” of Infringement

The court granted plaintiff's motion for enhanced damages because all nine Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed. Cir. 1992), factors favored trebling the jury's $70 million award and supplemental damages. "[Defendant] is a multi-billion dollar company with reported annual profits in excess of three-quarters-of-a-billion dollars. A $70 million verdict sounds large in the abstract, but in context, it may not be enough, without enhancement, to deter infringing conduct. . . . [T]his was not a close case. Every major decision -- from claim construction through post-verdict motions -- went against [defendant]. . . . [A]t no point during its 12-plus years of infringement did [defendant] take any remedial action to stop infringement or mitigate damages, including during the two-plus years covered by this litigation. In fact, to this very day, [defendant] continues to manufacture and sell the infringing products. . . . Because the Read factors so overwhelmingly favor enhancement, the real question here is not whether enhancement is warranted, but how much enhancement is appropriate. Given the one-sidedness of the case and the flagrancy and scope of [defendant's] infringement, the Court concludes that treble damages are appropriate here. . . . The last question in this case is whether [plaintiff] is also entitled to treble damages on the Court’s award of supplemental damages. The Court answers that question in the affirmative. . . . [T]here is simply no good reason not to treble the award of supplemental damages here when the Court has determined that treble damages are appropriate [pre-verdict] lost profits."

Stryker Corporation, et. al. v. Zimmer Inc., et. al., 1-10-cv-01223 (MIWD August 7, 2013, Order) (Jonker, J.).

Wednesday, August 14, 2013

Local Counsel Fees Not “Unnecessary” in Determining § 285 Award

The court granted in part defendants' motions for attorneys' fees under 35 U.S.C. § 285 and rejected plaintiff's argument that local counsel were unnecessary. "[Plaintiff] opines that '[g]iven the [Electronic Case Filing] system, local counsel is all but an anachronism,' 'nice for meetings and the like, but . . . otherwise unnecessary.' However, [plaintiff] does not offer, and the Court has not found, any case law to suggest that local counsel is unnecessary. On the contrary, it appears from the billing statements that local counsel assisted by advising out-of-state counsel on compliance with the local rules, reviewing court filings, helping prepare for appearances, and appearing in court. These tasks appear to have been reasonable at the time they were undertaken."

BIAX Corporation v. NVIDIA Corporation, et. al., 1-09-cv-01257 (COD August 12, 2013, Order) (Brimmer, J.).

Tuesday, August 13, 2013

Stay Pending Third Party IPR Granted Despite Lack of Estoppel

The magistrate judge recommended granting defendant's motion to stay pending a third party's petition for inter partes review of 3 of the 4 patents-in-suit even though defendant would not be estopped from reasserting invalidity arguments asserted in the IPR proceeding. "Even though: (a) there may be no formal estoppel applying to certain of [defendant's] later-advanced invalidity arguments; (b) one of the patents-in-suit is not the subject of an IPR petition; (c) it is not yet known whether the USPTO will initiate IPR proceedings regarding the three other patents-in-suit . . . if the USPTO invalidates any of the three patents-in-suit at issue or changes the scope and terms of any claim, the matters at issue in this Court will change. It is not necessary for [defendant] to be a party to IPR proceedings for the USPTO’s substantive decisions in reexamination proceedings to have an effect of the patent issues to be litigated in this case."

e-Watch, Inc. v. ACTi Corporation, Inc., 5-12-cv-00695 (TXWD August 9, 2013, Order) (Mathy, M.J.).

Monday, August 12, 2013

Stay Pending Third Party’s IPR Conditioned on Defendant’s Consent to Estoppel

The court granted defendant's motion to stay pending inter partes review during the very early stage of the case on the condition that defendant was estopped from re-raising any invalidity arguments the petitioner could have raised during IPR. "[Plaintiff] argues that defendant is not entitled to a stay based upon inter partes review because defendant did not file the petitions for inter partes review and is therefore not subject to the estoppel effect of a decision of the USPTO. . . . Since the court's stay is conditioned upon [defendant] being so estopped, the court concludes that a stay will not unduly prejudice plaintiff or present a clear tactical disadvantage to plaintiff."

e-Watch, Inc. v. FLIR Systems, Inc., 4-13-cv-00638 (TXSD August 8, 2013, Order) (Lake, J.).

Friday, August 9, 2013

Outside Attorney’s Breach of Loyalty to Defendant Does Not Warrant Disqualification of Plaintiff’s Counsel

The court denied defendant's motion to disqualify plaintiff's counsel. "[Defendant] moves to disqualify [plaintiff's counsel] . . . in this matter because [counsel] is alleged to be tainted as a result of the conduct of . . . an attorney who was a partner in one of [defendant's] regular outside law firms and the husband of one of [plaintiff's] co-founders and directors. . . . Over a period of nearly six years, by assisting [plaintiff] and his wife in finding and retaining a law firm that would sue [defendant] for patent infringement, and by assisting in efforts to find a firm that would buy the patent to sue [defendant] itself, [the attorney] acted contrary to [defendant's] interests. . . . But there is no evidence that [he] ever received material confidential information about [defendant] during his time at [defense counsel's firm], let alone passed it on to [plaintiff's counsel's firm], except for the [email from defendant regarding the potential conflict]. Further, [his] role in this litigation has been minimal at best. [Plaintiff's counsel's firm] was not aware of his potential ethical issues until [defendant] raised them. . . . Disqualification would prejudice [plaintiff] and is not appropriate under the circumstances."

Flatworld Interactives LLC v. Apple Inc., 3-12-cv-01956 (CAND August 7, 2013, Order) (Orrick, J.).

Thursday, August 8, 2013

Patent Acquisition Bar Imposed on Counsel Accessing Defendant’s Confidential Technical Information

The court granted defendant's motion for a two-year patent acquisition bar against plaintiff's counsel who obtain defendant's confidential technical information. "Defendant . . . argues that [plaintiff's attorneys] who gain access to [defendant's] confidential technical information should be barred from advising any clients in the ‘acquisition of patents involving satellite radio signal processing for the purpose of asserting them against’ [defendant] for two years after the conclusion of the litigation, including any appeals . . . In modern litigation, the disclosure of confidential, 'crown jewel' technology to opposing counsel is a burden to which parties must submit. It is not, however, without consequences. . . . The patent acquisition bar requested by [defendant] adds an additional layer of protection by prohibiting not just disclosure and use, but also advising. It thus prevents attorneys from — inadvertently or otherwise — relying on the confidential information when they advise other parties anticipating litigation against [defendant]. . . . [S]uch a quid pro quo is reasonable. . . . The two-year patent acquisition bar allows time for the limitations of human memory to run their course or for the information to become largely stale."

Catch a Wave Technologies, Inc. v. Sirius XM Radio Inc., 3-12-cv-05791 (CAND August 6, 2013, Order) (Alsup, J.).

Wednesday, August 7, 2013

Earlier Recovery for Infringement from Supplier Does Not Preclude Willfulness Claim Against Customers

The court granted in part a group of customer defendants' motion to dismiss plaintiff's infringement claims because a jury in an earlier action had awarded plaintiff damages for their supplier's infringement of 2 of 3 patents-in-suit. "[T]he jury in the earlier case awarded [plaintiff] $750,000, finding that the four [accused] devices were infringing. To the degree that Counts One and Two seek recovery from the Customer Defendants for reselling the same four [accused] devices, the claims seek a double recovery that cannot be allowed. This analysis does not apply, however, to [plaintiff's] claim in Counts One and Two that the Customer Defendants committed willful infringement. While the earlier jury found that [the supplier's] infringement was not willful, that finding does not apply to the Customer Defendants because willful infringement depends on the conduct and knowledge of the party against whom the claim is made – it is not a derivative liability. . . . Moreover, an award for willful infringement is an 'enhanced' damage award that does not duplicate, or overlap with, the award for basic infringement. Thus, an award for willful infringement against the Customer Defendants in this case for their own conduct does not give [plaintiff] a double recovery when added to the damages awarded in the earlier trial against [the supplier] for its own conduct."

Fleming v. Escort, Inc., et. al., 1-12-cv-00066 (IDD August 5, 2013, Order) (Winmill, J.).

Tuesday, August 6, 2013

Hourly Rates of $510-$1,095 Excessive for Discovery Dispute Sanction

The magistrate judge recommended granting plaintiff's motion for sanctions, in part, but determined counsel's claimed hourly rates of $530-$1,095 were not reasonable. "Defendant argues that based on the AIPLA Report of the 2011 Economic Survey, [three attorneys] are entitled to no more than a reasonable hourly rate of $333.00, and [a fourth attorney] is entitled to no more than a reasonable hourly rate of $230. . . . [O]n the surface, it appears that Defendant’s requested rates of $333.00 and $230.00 are reasonable. Nevertheless, considering the skill, time and labor involved; the amount in question and the results achieved; the difficulty of the case; and the nature of the professional relationship with the client, the Court finds that an upward adjustment of 25% of these requested values is appropriate. Therefore, the Court recommends that [the three attorneys] be afforded a reasonable hourly rate of $416.25 and that [the fourth] be afforded a reasonable hourly rate of $287.50."

Finisar Corporation v. Cheetah Omni, LLC, 2-11-cv-15625 (MIED August 2, 2013, Order) (Majzoub, M.J.).

Monday, August 5, 2013

Prior 3% License Did Not Render Jury’s 6% Rate Excessive

The court denied defendant's motion for a new trial on damages and rejected defendant's argument that the jury's finding of a 6% reasonable royalty was excessive in light of plaintiff's license to a third party with a rate of 3%. "The jury was instructed that it was part of its responsibility to make a determination as to what royalty would have resulted from a hypothetical negotiation between the parties. . . . [T]he jury properly could have considered several license agreements in addition to the [3%] agreement, and credited certain expert testimony focusing on certain license agreements over others, depending on their characteristics and contexts. . . . [T]he jury was entitled to credit [plaintiffs' expert's] opinion about the rising values of the patented technology, and to consider the [3%] license agreement as only one among several relevant agreements in arriving at its six percent royalty rate."

Enzo Biochem, Inc., et. al. v. Applera Corp., et. al., 3-04-cv-00929 (CTD August 1, 2013, Order) (Arterton, J.).

Friday, August 2, 2013

IV Patent Valuation Process Subject to Privilege

The court granted plaintiffs' motion for a protective order barring discovery of its patent valuation process because the information was privileged. "[Defendant] opposes Plaintiffs' use of privilege to prevent testimony about Plaintiffs' pre- and post-acquisition evaluation process including the process for identifying patents and patent portfolios, determining the value of such portfolios, compiling patent history reports, and evaluating those reports. . . . When [plaintiffs' patent acquisition consultant] declined to answer questions related to the valuation process -- for example, whether patents within a portfolio are rated by the valuation group -- it was because this analysis constituted legal communications protected by privilege. Indeed, patent valuation, while in this instance tied to business decisions of patent acquisition, may be intertwined with legal analysis, including considerations of claim scope, validity, and licensing power."

Intellectual Ventures I LLC et al v. Altera Corporation et al, 1-10-cv-01065 (DED July 25, 2013, Order) (Stark, J.).

Thursday, August 1, 2013

RAND Obligation Extends to Claims Containing Non-Essential Elements

Following a bench trial regarding the impact of RAND obligations on plaintiff's potential damages for infringement of its wireless network patents, the court found that fifteen categories of claims were all standard-essential. "[Plaintiff] contends that having elements requiring the use of a processor, a hand-held terminal, and a keyboard, respectively, makes each of these claims non-standard-essential because the 802.11 standard does not require those elements. . . . Defendants contend that the RAND requirement would be reduced to nothing if a patentee who has agreed to a RAND obligation could get around it merely by adding an additional element like 'utilizing a processor' to an otherwise standard-essential claim. That concern is particularly great where the additional element is technology as basic as 'a processor' or 'a keyboard.'. . . A patentee should not be able to sue the large number of users of these basic elements who are otherwise implementing standard-essential independent claims without being subject to the RAND obligation applicable to the standard-essential independent claims. . . . A claim element directed at any type of conventional device to perform the necessary computing functions is therefore still standard-essential."

Innovatio IP Ventures, LLC, Patent Litigation, 1-11-cv-09308 (ILND July 26, 2013, Order) (Holderman, J.).