Monday, December 30, 2013

Counsel’s Ownership Stake in Plaintiff’s Subsidiary Did Not Require Disqualification for Damages Trial

The court denied defendant's motion to disqualify plaintiff's counsel for a new trial on damages based on the lawyer-witness ethics rule where plaintiff's counsel had acquired a 10% stake in plaintiff's subsidiary and the subsidiary's network administrator and paralegal performed work at counsel's direction. "[Plaintiff's counsel's] 10% stake in [plaintiff's subsidiary] is out of line with Connecticut rule of professional conduct 1.8(i). . . . However, the court concludes that this interest, along with other aspects of [counsel's] relationship with [plaintiff's subsidiary], while troubling, do not rise to the level of posing a significant risk of trial taint, especially given that the issue of damages is all that remains to be resolved."

WhitServe LLC v. Computer Packages, Inc. et al, 3-06-cv-01935 (CTD December 26, 2013, Order) (Covello, J.)

Friday, December 27, 2013

Discovery Dispute Typifies "Wasteful Dance Of Two Scorpions Armed With Word Processors"

The court granted in part defendant's motion to compel further interrogatory responses and documents. "Frankly, this motion and [plaintiff's] response typify the wasteful dance of two scorpions armed with word processors, a dance that tends to cast attorneys in disrepute and makes American patent litigation the slowest and most expensive in the world. You folks ought [to] talk cooperatively between yourselves."

Multilayer Stretch Cling Film Holdings, Inc. v. Berry Plastics Corporation, 2-12-cv-02108 (TNWD December 5, 2013, Order) (Young, J.)

Thursday, December 26, 2013

Claim Construction of Patents-in-Suit in Prior Litigation Precludes Further Construction Absent Convincing Argument

The court ordered the parties to submit additional briefing addressing whether claim construction of the patents-in-suit in a prior lawsuit precluded further construction of those claims. "[B]oth [patents-in-suit] were the subject of a previous patent infringement suit brought by [defendant] against [plaintiff] in this Court . . . . In [the prior lawsuit], the Court held a Markman hearing and, thereafter, set forth its construction of the disputed claim terms of the [patents-in-suit]. Neither party challenged the Court's construction of those terms when appealing its summary judgment decisions to the Federal Circuit. . . . [T]he parties now argue that many of those terms are 'disputed' in the present action. However, neither party's brief addresses or explains why issue preclusion (collateral estoppel) does not apply . . . . Instead, they apparently presume that the Court's previous constructions of [the patents-in-suit] are simply open to review. . . . [N]either party has explained to the Court why its original construction of the claim terms should be revisited at all. Such revision requires the assertion of a convincing argument against issue preclusion."

Ball Metal Beverage Container Corporation v. Crown Packaging Technology, Inc. et al, 3-12-cv-00033 (OHSD December 20, 2013, Order) (Rice, J.)

Monday, December 23, 2013

Plaintiff Counsel’s Pre-Litigation Meeting With Defendant No Basis for Disqualification

The court denied defendant's motion to disqualify plaintiff's counsel where counsel held a client representation meeting with defendant four years ago. "While [counsel] may have offered some initial impressions of the legal issues discussed, he was not called upon to formulate a legal strategy for [defendant] and is unlikely to have gained detailed knowledge of the pertinent facts and legal principles at issue in the instant litigation. As a result, the Court finds that [counsel's] relationship with [defendant] is attenuated and will not presume that he acquired confidential information material to the instant litigation."

IPVX Patent Holdings, Inc. v. 8x8, Inc., 4-13-cv-01707 (CAND December 19, 2013, Order) (Westmore, M.J.)

Friday, December 20, 2013

Deliberate Copying and Litigation Misconduct Warrant Treble Damages Award

Following a jury finding of willful infringement, the court granted plaintiff's motion for treble damages. "The Court finds that [the Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992)] factors favor the award of treble damages here. . . . As to the first Read factor [deliberate copying] . . . Defendants previously marketed Plaintiffs' patented device, and only began renting the infringing device after their business relationship with Plaintiff went sour. Moreover, Defendants' [accused products] came in the same sizes as Plaintiffs, and Defendants presented no design documents or other credible evidence suggesting that they attempted to design around the [patent-in-suit]. . . . Defendants' conduct during the course of this litigation further supports an award of treble damages. Prior to trial, Defendants were sanctioned multiple times by the magistrate for, inter alia, 'baseless' objections to discovery requests, 'deliberate effort[s]' to 'conceal' the infringing devices, failure to search for and produce relevant documents, false and misleading testimony . . . efforts to obstruct the depositions of third-party witnesses, and improper witness coaching."

Briese Lichttechnik Verttriebs GmbH v. Langton, et al, 1-09-cv-09790 (NYSD December 18, 2013, Order) (Conti, J.)

Thursday, December 19, 2013

Finding the Litigation History of Judges in Patent Cases with Docket Navigator

With a single click, you can search for judges’ profiles in patent cases across all U.S. district courts: the ITC, the PTAB (IPR and CBM petitions), and the Court of Claims. Your results will include the following, with convenient links to the underlying court (or agency) documents:

• All cases asserting infringement of the patent
• All decisions addressing infringement, validity or enforceability of the patent
• All claim constructions by that judge
• All damages awards and injunctions involving patents by that judge

Watch the following four-minute video tutorial to learn more!

Pre-Institution Settlement of IPR Precludes Joinder of Petition Time-Barred by 35 U.S.C. § 315(b)

The Board denied the petitioner's motion for leave to file a motion for joinder with a proceeding that settled one business day before the petitioner filed its petition in the instant proceeding. "Normally, a petition for inter partes review filed more than one year after the petitioner (or the petitioner’s real party-in interest or privy) is served with a complaint alleging infringement of the patent is barred. . . However, the one-year time bar does not apply to a request for joinder. . . This is an important consideration here, because [the petitioner] was served with a complaint asserting infringement of the [] patent more than one year before filing its petition. . . Thus, absent joinder of this proceeding with [another IPR], it appears that [the petitioner's] petition would be barred. . . The Board agrees with Patent Owner that [the petitioner] should not have delayed in filing its petition until after it learned of the settlement, allowing the one-year period under 35 U.S.C. § 315(b) to lapse. By doing so, [the petitioner] took a risk that the inter partes review proceeding would terminate prior to a decision on institution . . . We do not find persuasive [the petitioner's] arguments of prejudice. [The petitioner] made a litigation choice, and now must face the consequences. Because [it] delayed its filing, and [the other IPR] has been terminated, the joinder statute’s prerequisite of an instituted review cannot be met. [Petitioner's] request for joinder is, therefore, denied."

Petition for Inter Partes Review by Fifth Third Bank, IPR2014-00244 (PTAB December 17, 2013, Order) (Giannetti, APJ)

Wednesday, December 18, 2013

On-Sale Invalidity Granted “For Purposes Of This Lawsuit Only”

The court granted in part defendant's motion for summary judgment that plaintiff's patent was invalid under the on-sale bar, but only for purposes of the instant lawsuit. "[P]laintiff seeks to amend its infringement contentions to remove its infringement allegations against four of the five products accused of infringing [the patent-in-suit]. . . . [S]hortly before the [early neutral evaluation] session, plaintiff was informed that a predecessor to one of the accused products . . . was on sale more than one year before the filing of the [patent-in-suit], thus exposing the [patent-in-suit] to an invalidity challenge based on 35 U.S.C. § 102(b). Defendants argue that plaintiff seeks to amend its contentions solely to avoid a finding of invalidity. . . . Plaintiff does not dispute that the [predecessor products] are identical in all material respects to the accused [forceps], nor does it dispute that the [predecessor forceps] were on sale more than one year before the [patent-in-suit] was filed. . . . [W]ithout the benefit of a claim construction proceeding, a universal finding of invalidity would be premature. . . . [B]ecause the court has not issued a claim construction order, and thus has not compared the [predecessor forceps], on a limitation-by-limitation basis, to the construed claims of the [patent], the court . . . grants defendants’ summary judgment of invalidity for purposes of this lawsuit only."

Perfect Surgical Techniques, Inc. v. Olympus Surgical & Industrial America Inc., 4-12-cv-05967 (CAND December 16, 2013, Order) (Hamilton, J.)

Tuesday, December 17, 2013

Service Contracts for Infringing Activity May Increase Royalty Rate

The court denied defendant's motion for summary judgment that plaintiff was not entitled to reasonable royalty damages relating to service contracts associated with the accused activities because the service contracts were not a “use made of the invention” as required by 35 U.S.C. § 284. "Plaintiff's expert relied upon the service contract to increase the royalty rate and not to increase the royalty base. . . . [A]s the service contracts are not factored into the royalty base, the Defendants' . . . argument is without merit.

Inventio AG v. Thyssenkrupp Elevator Americas Corporation, et al, 1-08-cv-00874 (DED December 13, 2013, Order) (Andrews, J.)

Monday, December 16, 2013

Finding the Litigation History of Patents with Docket Navigator

Do you ever need to know if a patent has been litigated, and if so, what happened (or is currently happening) in those cases? Now you can! With a single click, search for litigation activity across all U.S. district courts, the ITC, the PTAB (IPR and CBM petitions), and the Court of Claims. Your results will include the following, with convenient links to the underlying court (or agency) documents:
• All cases asserting infringement of the patent
• All decisions addressing infringement, validity or enforceability of the patent
• All claim constructions for the patent
• All damages awards and injunctions involving the patent Watch the following three-minute video tutorial to learn more!

Grant of Ex Parte Reexam Alone Does Not Preclude Willfulness Claim

The court denied defendant's motion for summary judgment of no willful infringement of plaintiff's flush valve patent based on the PTO granting defendant's ex parte reexamination request. "[Defendant] argues that its request was based on a reasonable theory – that [a prior art patent] teaches handles with a larger diameter than the diameter of the plunger, thereby allowing for two different axes of plunger travel. . . . [Defendant] concedes that the USPTO’s grant of a reexamination request is only a 'factor' to consider in determining whether an accused infringer acted in an objectively reckless manner. Given that the asserted [patent] claims survived the reexamination proceedings, this factor does not weigh exclusively in [defendant's] favor and cannot be dispositive as to whether [defendant] acted in an objectively reckless manner."

Sloan Valve Company v. Zurn Industries, Inc., et al, 1-10-cv-00204 (ILND November 20, 2013, Order) (St. Eve, J.)

Friday, December 13, 2013

Future Price Decrease of Infringing Product Warrants Royalty Rate as Percentage of Price, Not Flat Per Unit Rate

The court granted plaintiff's motion for an ongoing royalty, but applied a royalty rate based on the wholesale price instead of a flat per unit royalty. "Whether the ongoing royalty is expressed as a percentage of sales or on a per-unit basis would have no impact on [defendant's] payment to [plaintiff] so long as the price of the [accused video game systems] never changes. The rapid pace of technological advancement - and its effect on prices - counsels the Court that it is highly likely that the price [of the accused video game system] will drop with time. If, as [plaintiff] suggests, the ongoing royalty rate were expressed as a flat dollar amount per unit sold, [plaintiff] would capture an increasingly large proportion of each sale as the price falls, even as the technology's reliance on the infringed patent remains constant. This would result in an unearned windfall for [plaintiff], and, accordingly, the Court prefers an ongoing royalty rate expressed as a percentage of wholesale price."

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

Thursday, December 12, 2013

Expert’s Refusal to Disclose Prior Consulting Engagements Bars Access to Confidential Information

The court denied defendant's motion to allow its expert to review plaintiffs' confidential information under the parties' protective order because defendant's expert would not disclose his consulting history. "[Defendant's expert] has refused to produce the names of the companies with which he has consulted during the past six years claiming that he is bound by confidentiality agreements prohibiting such disclosure. . . . The Protective Order was the product of negotiation between the parties. The provision at issue is not ambiguous. . . . If Defendant wishes to disclose Plaintiffs’ confidential information to [its expert], [his] prior consulting history, as required at paragraph 9(g), must be produced to Plaintiffs."

Cadence Pharmaceuticals, Inc., et al v. Fresenius Kabi USA, LLC, 3-13-cv-00139 (CASD December 10, 2013, Order) (Dembin, M.J.)

Wednesday, December 11, 2013

No Late Amendment of Contentions to Correct “Clerical Error”

The court granted defendant's motion to strike plaintiff's "corrected" contentions which added claim charts for more than 70 of defendant's products. "[Plaintiff] has alleged that its initial omission of the 70 [products] was a mere clerical error, and that it 'quickly corrected this clerical error by re–serving the amended contentions.'. . . [F]or [plaintiff] to now assert that its omission of the 70 [products] at issue here was a mere 'clerical error' is entirely incongruous with its numerous prior representations to this Court. The purpose of the hearing [two months ago] was to resolve the final set of accused products. To now allow [plaintiff] to compel financial information related to products which it dropped in relation to that hearing, or otherwise amend its infringement contentions in contravention of P.R. 3–6(b) at this late juncture would prejudice [defendant]."

U.S. Ethernet Innovations, LLC v. Ricoh Americas Corporation, 6-12-cv-00235 (TXED December 5, 2013, Order) (Love, M.J.)

Tuesday, December 10, 2013

Rule 11 No Substitute for Summary Judgment

The court denied without prejudice defendant's motion for Rule 11 sanctions. "[I]t is apparent that the Court would, in fact, need 'to get mired in a conflict over terms' to decide the present motion, which turns on, inter alia, the proper meaning of terms (i.e. 'auxiliary device' and/or 'device presence signal') as well as the scope of the prior art. . . . Distilled to its essence, Defendants' argument is that Rule 11 sanctions are appropriate because Plaintiffs' infringement claims fail on the merits. Recognizing same, the Court finds the present motion to be a transparent effort to secure summary judgment, in the guise of Rule 11 sanctions. . . . A Rule 11 motion for sanctions is not an appropriate substitute for summary judgment proceedings. . . ."

Marlowe Patent Holdings LLC v. Ford Motor Company, 3-11-cv-07044 (NJD December 5, 2013, Order) (Sheridan, J.)

Monday, December 9, 2013

Plaintiff’s President Ordered to Produce Discovery Regarding Prior Representation of Defendant

The court granted in part defendants' motion to compel plaintiff to produce documents regarding its members' prior representation of defendants. "[T]he Court is troubled by the notion of an attorney defending a client against patent infringement allegations and then turning around and forming an entity that sues his former client for infringing a patent involving technology that the attorney is familiar with from that defense. Further, it is undisputed that [plaintiff's president] represented [defendants] in several other cases, making [defendants'] concerns about the knowledge he obtained and his potential ethical issues less attenuated than its concerns regarding third parties. In light of this concern, at the hearing Plaintiff’s counsel, who also represents [plaintiff's president], agreed that Plaintiff and [its president] would provide discovery into [its president's] representation of [defendants]."

Bluestone Innovations, LLC v. LG Electronics, Inc. et al, 3-13-cv-01770 (CAND December 5, 2013, Order) (Laporte, M.J.)

Friday, December 6, 2013

Failure to Apportion Royalty Base to Infringing Features Warrants Exclusion of Expert Report and Testimony

The court granted defendant's motion to exclude the report and testimony of plaintiff's damages expert for failing to apportion defendant's revenue to the two features causing the alleged infringement. "Of course, the smallest salable infringing unit must be the starting point for the royalty base, but the Federal Circuit has not held 'that no further apportionment is ever necessary once the smallest salable unit is determined.'. . . [A]llowing [plaintiff's] expert to use as the royalty base the entire value of [four other features] -- all of which can be used independently without infringing -- while not using the value of [the two] features that actually cause the alleged infringement -- would be a mistake of the same kind as allowing [plaintiff's] expert to use the entire value of [defendant]. . . . As [plaintiff's] own expert . . . has admitted, without [those two allegedly infringing features], the four features used as the royalty base do not infringe."

Rembrandt Social Media, LP v. Facebook, Inc., et. al., 1-13-cv-00158 (VAED December 3, 2013, Order) (Ellis, J.)

Thursday, December 5, 2013

Royalty Rate of 50% of Defendant’s Profits Awarded for Infringement of Prilosec® Patent

Following a bench trial on damages, the court awarded plaintiffs $76 million for defendants' three-year infringement of plaintiffs' Prilosec patent based on a royalty rate of 50% of defendants' profits. "[Plaintiff] would have had no desire . . . at any time[] to issue a license to [defendant]. . . . Since it is necessary, however, to assume that both parties were willing to enter into a license, [plaintiff] has shown through overwhelming evidence that it was in the driver’s seat in the negotiations and would have required [defendant] to pay a hefty portion of its profits for a license. . . . [Plaintiff] would have tried to calculate whether the expected income stream from [defendant's] license would offset lost sales from Prilosec® and the increase in financial support required to keep [plaintiff's new product's] market share stable or to improve it. . . . . While there are no perfect benchmarks for this licensing fee, a 50% licensing fee fits comfortably within the range of negotiations that occurred in connection with the patents-in-suit. . . . Notably, [a nonparty] offered to buy a license from [plaintiff] for 70% of its profits on 40mg omeprazole, for which it would have been the exclusive generic supplier, and 50% of its profits on the 10 and 20mg doses, for which it would have been the sixth generic supplier."

Astrazeneca AB, et al v. Apotex Corporation, et. al., 1-01-cv-09351 (NYSD December 3, 2013, Order) (Cote, J.)

Wednesday, December 4, 2013

Perjury Re Real Party in Interest Warrants Terminating Sanctions

The court granted defendant's motion to strike a declaratory relief plaintiff's pleadings for its repeated failures to provide accurate discovery regarding its participation in reexamination and, thus, whether estoppel applied to its claims. "[Plaintiff's chairman] committed perjury at his deposition. . . . While [plaintiff] has attempted to paint [its chairman's] conduct as the result of ignorance or a breakdown in communication, the evidence of record reflects that [plaintiff] has purposefully thwarted this Court’s discovery Orders. . . . While it is possible that additional discovery and further postponement could alleviate some of the prejudice to [defendant], that is not the standard prescribed by the Third Circuit. [Plaintiff's] assurances that it is now ready, on its own timetable, to comply with its discovery obligations, after blatantly violating numerous discovery orders, is unavailing. [Plaintiff] has willingly made representations that are clearly inaccurate, including counsel’s repeated assurances that [it] did not have any documents relating to the reexamination, and [its chairman's] false deposition testimony regarding the reexamination. . . . [Plaintiff], aware of the significant implications of being found to be a real party in interest to the reexamination of [defendant's] patent, has attempted to thwart its discovery obligations, despite being given numerous opportunities to remedy its deficient responses."

Bortex Industry Company Limited v. Fiber Optic Designs, Inc., 2-12-cv-04228 (PAED December 2, 2013, Order) (Goldberg, J.)

Tuesday, December 3, 2013

Breakdown of R&D Expenses on Patent-Specific Basis Not Required for ITC Domestic Industry

Following an evidentiary hearing, the ALJ found that complainant satisfied the economic prong of the domestic industry requirement as to its image processing patent. "Respondents' requirement that the expenses be allocated down to the amount spent on the actual asserted patent to be unsupported by Commission precedent. Much of the Commission's discussion involving a nexus between the asserted patents and the complainant's activities were directed toward licensing activities. . . . Respondents cite to no requirement or Commission precedent that requires allocation of research and development expenses on a specific article or product be broken down into the amount related to any specific patents. Rather, Commission precedent has held that research and development activities directed toward articles that incorporate the disputed technology is sufficient."

Electronic Imaging Devices, 337-TA-850 (ITC November 4, 2013, Order) (Essex, ALJ)

Monday, December 2, 2013

Settlement Does Not Justify Vacating Interlocutory Claim Construction

The court denied the parties' stipulated motion to vacate the court's claim construction order following their settlement agreement. "[J]udicial decisions are not the property of private litigants, but are 'valuable to the legal community as a whole.' Even if the Claim Construction Order here is not final, other courts may consider it for its persuasive value, particularly when construing the terms of the patents at issue here. Moreover, the Court expended substantial resources in reaching its decisions in the Claim Construction Order. The value of these efforts would be diminished if the order were vacated, increasing the possibility that other courts would be called upon to expend their resources to construe these same terms in the future. . . . Though the parties’ individual settlement expectations may be frustrated by denying the motion, this factor does not weigh heavily in determining whether the request ought to be granted. . . . [P]ermitting parties to vacate interlocutory decisions may discourage earlier settlement and instead incentivize parties to take cases through the entire Markman process, or other non-dispositive rulings, in order to test their positions, knowing they could effectively 'erase' that decision through settlement later. Earlier settlements conserve more of the judiciary’s, and thus the public’s, resources."

Single Touch Interactive, Inc. v. Zoove Corporation, 4-12-cv-00831 (CAND November 26, 2013, Order) (Rogers, J.)