Infringement Opinions of Inventor-Expert Excluded as Unhelpful Advocacy

The court granted defendant's motion to exclude the infringement opinions of plaintiff's inventor-expert because they were unreliable. "[M]ost of [the expert's] conclusions are simply implicit arguments about what claim construction should be, and are therefore irrelevant advocacy rather than helpful expert testimony. . . . Nearly all of [his] conclusions reads this way: they argue implicitly that the claim should be construed so that [defendant's] Patient Portal infringes. . . . [His] conclusory, self-serving statements were not helpful to the Court in construing the claims, and they are now mooted by the Court’s determined claim construction. To the extent [the inventor-expert] proffers opinions that are something more than disguised claim construction arguments, those opinions too are now irrelevant or unreliable, as they rely on a claim construction other than the Court’s. . . . Similarly, [his] unsupported assertions — made without explanation or elaboration that would allow a fact finder to follow his reasoning and come to the same conclusion — have no impact on the Court’s resolution of this case on summary judgment."

523 IP LLC v. CureMD.Com, 1-11-cv-09697 (NYSD September 24, 2014, Order) (Failla, J.)

Stay Pending IPR as to Three of Eight Asserted Patents Denied

The court denied plaintiff's motion to stay its own declaratory relief action pending inter partes review because the potential simplification of issues did not favor a stay. "A stay no doubt simplifies the issues where all of the patents-in-suit are subject to IPR. . . . Here, only three of the eight patents-in-suit are subject to IPR. Under these circumstances, courts generally deny a stay of the proceedings. . . . [T]he Court is not inclined to allow five of the eight patents-in-suit to 'languish' while the PTAB reviews only three of the patents-in-suit. Moreover, the Court notes that nothing is preventing [plaintiff] from dismissing its claims as to the three patents subject to the IPR without prejudice."

SCVNGR, Inc. d/b/a LevelUp v. eCharge Licensing, LLC, 1-13-cv-12418 (MAD September 25, 2014, Order) (Casper, J.)

Overbroad Claiming of Automation Rules Renders Claim Unpatentable

The court granted defendants' motion for judgment on the pleadings that plaintiff's "patents for automatically animating the lip synchronization and facial expressions of 3D characters" were invalid for lacking patentable subject matter. "[T]he point of novelty here is the idea of using rules, including timing rules, to automate the process of generating keyframes . . . [W]hat the claim adds to the prior art is the use of rules, rather than artists, to set the morph weights and transitions between phonemes [the smallest unit of speech, corresponding to a single sound]. However, both of these concepts are specified at the highest level of generality. . . [T]he user, not the patent, provides the rules. And while the patent does provide an example of a very partial set of default and secondary rules, it expressly states that 'this is only an example of a set of rules which could be use[d] for illustrative purposes, and many other rules could be specified according to the method of the invention.' Because the claim purports to cover all such rules, in light of the prior art, the claim merely states 'an abstract idea while adding the words 'apply it.’'. . . . This case illustrates the danger that exists when the novel portions of an invention are claimed too broadly."

McRo, Inc. v. Namco Bandai Games America, Inc., 2-12-cv-10322 (CACD September 22, 2014, Order) (Wu, J.)

Assertion of Frivolous Infringement Claims No Basis for Misuse Defense

The court granted plaintiff's motion for summary judgment that its electronics testing patents were not unenforceable for patent misuse. "[Defendant argues] that a counterclaim of patent misuse is . . . cognizable when the patent holder is engaged in 'sham litigation,' lacking any reasonable basis to believe that its patent claims are colorable and simply attempting to interfere with a competitor’s operations. . . . This Court has reviewed the various authorities cited by [defendant] in support of its contention that a patent misuse counterclaim can be premised solely on the assertion that the patent holder is asserting frivolous infringement claims, and finds that none of those authorities persuasive on this point. Indeed, the very notion is paradoxical: there is no need for a defense of patent misuse – which precludes the patent holder from enforcing the patent against the successful defendant until such misuse ceases – in situations where the infringement claims themselves are frivolous. Put differently, where there is no colorable assertion of infringement, no defense to the nonexistent infringement is necessary."

L-3 Communications Corporation, et al v. Jaxon Engineering & Maintenance, Inc., et al, 1-10-cv-02868 (COD September 22, 2014, Order) (Krieger, J.)

Evidence of PTAB Institution Decision Excluded Under FRE 403

The court granted defendant's motion to exclude the PTAB's denial of an IPR petition under Rule 403. "I agree that the . . . IPR denial is a final decision. I do not agree that it is a decision on the merits, any more so than a grant of an IPR is a decision on the merits. It is akin to a ruling on a preliminary injunction, where the merits are assessed with less than a full record and with less than a full adversarial proceeding. . . . [T]he patent examiner is a person of ordinary skill in the art, whereas the IPR decisions are made by lawyers who are not persons of ordinary skill in the art. . . . [T]he PTAB's actions in relation to the [patent-in-suit] are of marginal relevance, and the probative value is greatly outweighed by the expenditure of time that would be required to give the jury the full context necessary to fairly evaluate the evidence."

InterDigital Communications Inc. et al v. Nokia Corporation et al, 1-13-cv-00010 (DED September 19, 2014, Order) (Andrews, J.)

Defendant’s Litigation Misconduct Precludes Laches Defense

Following an evidentiary hearing, the court rejected defendant's laches defense because defendant failed to prove laches, and even if it had, "the Court would conclude that [defendant] should not benefit from laches because its hands are not clean." "As is detailed both in this record and in the proceeding severed out of this case to resolve allegations that [defendant] impermissibly attempted to interfere with [plaintiff's] expert, [defendant] engaged in unprofessional conduct that threatened, but fortunately did not affect, the integrity of this litigation. Sitting in equity, the Court cannot countenance such behavior — let alone allow it to benefit from an equitable remedy."

U.S. Ethernet Innovations, LLC v. Texas Instruments Incorporated et al, 6-11-cv-00491 (TXED September 18, 2014, Order) (Schneider, J.)

PTAB's Institution of IPR Does Not Conclusively Establish Reasonableness of Invalidity Defense

The court denied defendants' motion for summary judgment that they did not willfully infringe plaintiffs' telephone relay systems patents and rejected their argument that the PTAB's grant of inter partes review was conclusive evidence of a reasonable invalidity defense. "I agree with defendants that in light of the heightened threshold showing necessary for the grant of inter partes review, the review proceedings should be entitled to more weight in the reasonableness analysis than was given to the prior re-examination procedure. Nonetheless, I am not persuaded that the grant of review deserves conclusive weight. . . . Notwithstanding the elevated threshold for obtaining review, the preliminary and incomplete nature of a decision to institute inter partes review cautions against affording those decisions conclusive weight. . . . Although nothing in [In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007)] clearly precludes the court from affording controlling weight to a grant of review by the board, I am satisfied that the more prudent course is to make a reasonableness determination after hearing a full presentation of the evidence from both sides at trial."

Ultratec, Inc. et al v. Sorenson Communications, Inc. et al, 3-13-cv-00346 (WIWD August 28, 2014, Order) (Crabb, J.)

District Court’s and BPAI’s Pre-Alice Determinations of §101 Patentability Unpersuasive in CBM Review

In a finding that the challenged patent was directed to unpatentable subject matter, the Board rejected the patent owner's arguments that the patent had been previously reviewed in other venues where it was not found to be unpatentable. "We also are not persuaded by Patent Owner’s argument that the claims have been reviewed previously by the Board of Patent Appeals and Interferences, as well as a district court, and have been found to cover patent-eligible subject matter. The decisions cited by Patent Owner issued prior to the Supreme Court’s holding in [Alice Corp. Pty, Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014)] and thus, lacked the benefit of authoritative guidance regarding the framework for analyzing § 101 eligible subject matter that was provided by the Court in Alice."

Petition for Covered Business Method Patent Review by Salesforce.com, Inc., CBM2013-00024 (PTAB September 16, 2014, Order) (Braden, APJ)

Design Patent Maximizing Diamond Refraction Not Invalid for Claiming Functional Design

The court denied plaintiff's motion for summary judgment that defendant's diamond design patent was invalid for depicting a functional design. "Admittedly, [the inventor] sometimes described the design of the [patent] in language that superficially might suggest a functional design. He admitted that his design 'performed the best' and stated that he used a light box to test various arrangements in search of the 'best refraction.' But these statements do not change the fact that the ultimate purpose of the [patented] design is to have a pleasing appearance — a quintessentially ornamental purpose. Simply because an inventor experiments with alternative designs or uses rudimentary tools and tests does not mean the resulting design is functional."

Prestige Jewelry International, Inc. v. Wing Yee Gems & Jewelery Limited, et al, 1-11-cv-02930 (NYSD September 15, 2014, Order) (Preska, J.)

Circumstantial Evidence of Direct Infringement Sufficient to Support Indirect Infringement Claim

The court denied plaintiff's renewed motion for judgment as a matter of law of noninfringement of defendant's network patent where defendant had no direct evidence of customer use of the infringing features in the U.S. "Even though [defendant] offered no direct evidence of customer use inside the United States, its circumstantial evidence is just barely sufficient to convince the Court not to disturb the jury's verdict. . . . [Plaintiff] is a billion dollar company with extensive sales. . . . [Defendant] has offered evidence of [plaintiff's] high sales volume, an instruction manual describing how to activate SDR-A, and several blog entries on [plaintiff's] U.S. support forum from people who used [plaintiff's] devices with SDR-A enabled. Taken together, this circumstantial evidence is sufficient to permit a jury to reasonably conclude 'that, sometime during the relevant period [], more likely than not one person somewhere in the United States had performed the claimed method using the [plaintiff's] products.'"

Riverbed Technology Inc. v. Silver Peak Systems Inc., 1-11-cv-00484 (DED September 12, 2014, Order) (Andrews, J.)

Frivolous Infringement Claim Warrants Rule 11 Sanction

The court granted in part defendants' motion for Rule 11 sanctions after the court found a clear prosecution disclaimer. "I do not lightly use the word 'frivolous.' In my opinion, however, no reasonable attorney or judge could conclude that the argument that there was no disclaimer of claim scope was anything but frivolous. . . . At any later time, with the issue having been disclosed in the Rule 11 motion, any reasonable counsel must have recognized the equivalent of a railroad crossing with the loud sound of a nearby train whistle. . . . The Plaintiffs attorneys' continued insistence to litigate this matter, even after being apprised by the Defendants that the accused products could not possibly infringe, further highlights that the Plaintiff's attorneys simply turned a blind eye to the actual vehicles that they were accusing of infringement. . . . [D]espite Plaintiffs current pro hac vice attorneys arguing that they should have had a clean slate from the time that they noticed the Court of their appearance, before they ever took the case, [four attorneys] had an obligation to review their client's file. Here, this would include the letters sent by the Defendants and the owner's manuals."

Vehicle Operation Technologies LLC v. BMW of North America, LLC, 1-13-cv-00538 (DED September 12, 2014, Order) (Andrews, J.)

IPR Petitioner’s Business Model to Circumvent 35 U.S.C. § 315(b) Time Bar No Basis for Terminating Sanctions

During a conference call, the Board denied the patent owner's request to file a motion for sanctions terminating the proceedings. "Patent Owner argues that [a motion for sanctions pursuant to 37 C.F.R. § 42.12(a)] is warranted because the purpose of the Petitioner’s business model is to circumvent the statutory bar created by 35 U.S.C. § 315(b) and the efficiencies created by estoppel. Furthermore, Patent Owner argues that allowing the Petitioner to proceed with its petition amounts to harassment against the Patent Owner. . . . [W]e determine that Patent Owner has presented an insufficient basis for its request for authorization to file a motion for sanctions because Patent Owner fails to cite any conduct by Petitioner that constitutes misconduct as delineated in 37 C.F.R. § 42.12(a). Accordingly, Patent Owner’s request for authorization to file a motion for sanctions is denied."

Petition for Inter Partes Review by Iron Dome LLC, IPR2014-00674 (PTAB September 10, 2014, Order) (Ward, APJ)

Motion for Attorneys’ Fees for Unsuccessful Motion for Attorneys’ Fees Denied

The court denied plaintiff's motion for attorneys' fees under Rule 11 and 28 U.S.C. § 1927 against defendants and their counsel for defendants' unsuccessful motion for fees under 35 U.S.C. § 285, 28 U.S.C. § 1927, and the Court’s inherent power. "[Plaintiff's] decision to seek fees, given its own questionable conduct both before this Court and in California, is unfortunate. . . . To continue to litigate a matter which is so clearly dead is frustrating to the judicial process. . . . '[G]iven the high stakes often involved in patent litigation, parties and their counsel often pull out all of the stops in pursuit of an edge.' It’s time for these tactics to stop and for each side to take its ball and go home."

Oplus Technologies, Ltd. v. Sears Holdings Corporation, et al, 1-11-cv-08539 (ILND September 10, 2014, Order) (Dow, J.)

Expert’s Calculation of Lost Profits as Part of Reasonable Royalty Analysis Does Not Result in Double Recovery

Following a jury verdict of $105 million, the court denied defendant's motion for remittitur. "[Defendant] argues that [plaintiff's expert's] royalty calculation resulted in an impermissible double recovery, by allowing the jury to award lost profits and a royalty for the same infringing conduct. . . . [T]he Court disagrees. Although at certain points in [his] testimony it might appear that he merely calculated actual lost profits and then added a royalty to that figure, at other points he clarifies that his calculations represent the parties’ predictions of events in the marketplace that were reasonably foreseeable at the time of the hypothetical negotiation. While [plaintiff's expert] did, as noted, look at actual sales figures from subsequent years, he explained that his opinion as to a reasonable royalty was based on losses the parties reasonably would have anticipated in light of information available to them at the time of the negotiation, as confirmed by subsequent events."

Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., et al, 3-09-cv-05235 (CAND September 9, 2014, Order) (Chesney, J.)

Claim Construction Not Required to Determine § 101 Invalidity

In granting defendant's motion to dismiss plaintiff's infringement claims on the ground that the asserted patent was invalid under 35 U.S.C. § 101, the court rejected plaintiff's argument that the motion was premature. "Plaintiff’s argument that the Court needs to conduct further claim construction proceedings before deciding the motion decidedly fails. [Plaintiff] argues that there is a 'factual dispute whether the preambles of the asserted claims are limiting.' But as [defendant] points out, claim construction is presently not a question of fact. And to the extent extrinsic facts could be relevant, [plaintiff] does not identify them. . . . [B]ased on the substance of the parties arguments and the content of the patents, this Court would find that neither separate claim construction proceedings nor further development of the factual record are required before addressing the § 101 issue."

Eclipse IP LLC v. McKinley Equipment Corporation, 8-14-cv-00742 (CACD September 4, 2014, Order) (Wu, J.)

Long Felt Need Prior to Existence of Prior Art Irrelevant to Obviousness Analysis

The court granted plaintiff's motion for summary judgment that defendant's caption correction patent was invalid as obvious in light of two prior art patents and rejected defendant's evidence of the secondary considerations of nonobviousness of long-felt need and failure of others. "[U]sers of captioning devices would always be searching for a faster device. However, in the context of this case, the question is not simply whether the invention in the [patent-in-suit] may have been faster than other products, but whether the invention . . . is obvious in light of [two prior art patents]. Thus, in determining whether the failure of others to make the invention in the [patent-in-suit] sooner is evidence of nonobviousness, the relevant time frame is not the time in which users of captioning devices wanted a faster product but the time in which others failed to combine the elements of the [prior art patents] as defendants did. . . . [T]he filing date of the [patent-in-suit] is [less than 2 years after a prior art patent was filed]. It seems unlikely that such a short period of time could qualify as probative evidence of nonobviousness."

Ultratec, Inc. et al v. Sorenson Communications, Inc. et al, 3-13-cv-00346 (WIWD August 28, 2014, Order) (Crabb, J.)

Upselling Method and Genotype Screening Patents Invalidated Via 12(b)(6) Motions in Light of Alice Corp.

The magistrate judge recommended granting defendant's motion to dismiss plaintiffs' infringement claims for failure to state a claim because their genotype screening patent-in-suit contained unpatentable subject matter. "Plaintiffs claims are directed to the discovery of a natural law -- that is, that individuals with a particular genetic variation are better sprinters than those without it. . . . [T]he link between a particular genetic variation and the potential for elite athletic performance embodied in Claim 1 is 'a natural process, an eternal truth that 'exists in principle apart from any human action.'' The correlation is the handiwork of nature-man did not do anything to bring about this relationship. . . . [T]he 'analyzing' step is insufficient to make the claim patent eligible. It merely tells the users of the method to analyze a sample obtained from a person for the presence of genetic variations in the ACTN3 gene, without further specification as to how the sample should be analyzed. The claim clearly does not recite a new, innovative method for such analyzation, which could be one way to effect a different outcome here."

Genetic Technologies Limited v. Laboratory Corporation of America Holdings et al, 1-12-cv-01736 (DED September 3, 2014, Order) (Burke, M.J.)

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The court granted defendant's motion to dismiss plaintiff's infringement claim for failure to state a claim because the upselling method patent-in-suit lacked patentable subject matter. "[I]t is clear that the [patent-in-suit] is drawn to unpatentable subject matter. It claims the fundamental concept of upselling -- a marketing technique as old as the field itself. While the additional limitations of the claim do narrow its scope, they are insufficient to save it from invalidity. . . . Shrewd sales representatives have long made their living off of this basic practice. . . . A human being can generate an upsell recommendation 'during the course of the user initiated communication,' although perhaps not with the efficiency or speed of a computer. The computer performs nothing more than purely conventional steps that are well-understood, routine, and previously known to the industry."

Tuxis Technologies LLC v. Amazon.com Inc., 1-13-cv-01771 (DED September 3, 2014, Order) (Andrews, J.)

Rewards Program and Recruiting Patents Invalid for Claiming Unpatentable Subject Matter

The court granted defendant's motion for summary judgment that plaintiff's anonymous communication patents were invalid for lack of patentable subject matter. "Plaintiff . . . asserts that the methods and systems of the [patent-in-suit] claim more than an abstract idea because the claims contain meaningful limitations . . . [1] receiving party data including an identity from both a first and second party; [2] receiving at least two rules for releasing party data . . . [3] receiving a search request from a second party; [4] processing the second party's search request . . . [5] exchanging first and second party data except the identities of the first and second party . . . and [6] releasing the identities of the first and second parties upon satisfying the first and second party rules for releasing their respective identities . . . [N]one of these limitations [presented by plaintiff's expert] adds anything meaningful to the basic concept of controlled exchange of information about people as historically practiced by matchmakers and headhunters - and as disclosed in the patent specification itself. By contrast, all of these steps could be performed (and have been performed) by human beings interacting with one another prior to the filing of the [patent-in-suit]. . . . To allow the claim to survive would disproportionately risk preempting a building block of human interaction, retarding rather than promoting progress, contrary to the very purpose patents are granted."

Walker Digital LLC v. Google Inc., 1-11-cv-00318 (DED September 3, 2014, Order) (Stark, J.)

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The court granted defendant's motion for judgment on the pleadings that plaintiff's rewards program patents were invalid for lack of patentable subject matter. "Notwithstanding the prolixity of the claims, they recite a very simple invention: a computer-driven method and computer program for converting one vendor’s loyalty award credits into loyalty award credits of another vendor. In principle, the invention is thus the equivalent of a currency exchange as applied to loyalty award credits such as airline frequent flyer miles or hotel loyalty award points. . . . It is certainly true that computers assist with managing a large volume of transactions, doing so at great speed, and communicating the results of those transactions to the parties. However, the basic functions of converting non-negotiable loyalty award credits of one vendor into loyalty award credits of a second vendor according to an agreed-upon conversion rate, and then allowing the consumer to use the converted loyalty award credits to make purchases from the second vendor, are all functions that are readily within the capacity of a human to perform without computer aid. . . . . [A]lthough the field of use is narrow — the conversion of one entity’s loyalty award points into those of another entity — the preemptive effect of [plaintiff's] claims within that field of use is broad. . . . There is no disclosure of the precise method by which the computer performs those functions. Accordingly, the claims would read on virtually any computerized method of performing that function, even if the method used were quite different from any conventional computer-based means."

Loyalty Conversion Systems Corporation v. American Airlines, Inc., 2-13-cv-00655 (TXED September 3, 2014, Order) (Bryson, C.J.)

Patentee’s Failure to Notify Examiner of Court’s Adverse Claim Construction May Constitute Inequitable Conduct

The court granted defendant's motion to amend its pleadings to include a claim for inequitable conduct during reexamination. "[Defendant] alleges specific [plaintiff] representatives . . . each failed on several occasions to inform the PTO that the interpretation of the asserted claims of the [patent-in-suit] [plaintiff] urged the PTO to adopt had been rejected by this Court. . . . Regardless of whether a patentee in all cases has an obligation to disclose a District Court's adoption of an unobjected-to recommended claim construction, or whether a patentee has an obligation to explain the impact of a Court's claim construction on arguments the patentee has made to the examiner, under the facts alleged here it is plausible to believe that [plaintiff] intentionally decided not to make these disclosures because [plaintiff] intended to deceive the examiner into believing she was applying the Court's claim construction, when [plaintiff] knew she was not, and when [plaintiff] feared application of the Court's claim construction could lead the examiner to invalidate its claims."

Masimo Corporation v. Philips Electronics North America Corporation, et al, 1-09-cv-00080 (DED September 2, 2014, Order) (Stark, J.)

Counsel’s Misrepresentation of Key Trial Testimony Warrants Terminating Sanctions

The court sua sponte dismissed plaintiff's infringement action with prejudice after post-trial discovery showed that during trial plaintiff's counsel affirmatively misrepresented to the Court the statements of key on-sale bar witnesses regarding important evidence disclosed only during trial. "Defendants have produced testimonial evidence clearly and directly contrary to the representations [plaintiff] made to the Court during trial. That [plaintiff] may have backpedaled from these statements over time, after trial had finished, does not relieve it of its responsibility for its misrepresentations to the Court at what all present recognized was an absolutely critical point in the trial. . . . The testimony reveals that this is not a simple case of innocent mischaracterization. [A witness] said one thing, and counsel told the Court that he said something else. Such willfulness compels a finding of bad faith. If the actual statements made by [two witnesses] at this critical inflection point had been reported to the Court, the Defendants’ trial strategy would have been entirely different. More significantly, the Court would, in all probability, have entered judgment for the Defendants forthwith. . . . Just as with witnesses testifying truthfully under oath, the proper administration of justice depends upon counsel being completely forthright with the Court. . . . [N]ot every lawyer who lies to a court will be caught, so when such deliberate and advantage-seeking untruthful conduct is uncovered, the penalty must be severe enough to act as a deterrent. Awarding attorney’s fees – even if they were to be paid by [plaintiff's] counsel alone – is insufficient. Such serious misrepresentations cannot be excused as simply the cost of doing business. Attorney’s fees also may be appropriate, but such an affront to this Court, to the other parties, and to judicial integrity can only be answered with dismissal."

Tesco Corporation v. Weatherford International, Inc., et al, 4-08-cv-02531 (TXSD August 25, 2014, Order) (Ellison, J.)

Damages Expert May Testify Concerning Running Royalty Cap

The court denied plaintiff's motion in limine to preclude the testimony of defendant's damages expert that a running royalty may be capped. "Georgia-Pacific factor #11 is '[t]he extent to which the infringer used the invention and any evidence probative of the value of that use.' Accordingly, [defendant] is free to argue, based on actual use of the patented method (i.e., the 'book of wisdom'), that a running royalty would not exceed a certain amount. But this is only one of several relevant factors in the reasonable royalty inquiry; [plaintiff] will have the opportunity to attack this opinion at trial and to emphasize other factors."

France Telecom S.A. v. Marvell Semiconductor, Inc., 3-12-cv-04967 (CAND August 28, 2014, Order) (Orrick, J.)