Petitions for Inter Partes Review Citing Same Prior Art May be Decided Differently

The Board denied the petitioner's request for rehearing of an earlier decision partially denying institution of inter partes review and rejected the arguments regarding the institutions of earlier petitions. "[The petitioner] contends that its Petition presented the 'same evidence' that was presented in [proceedings brought forth by two other petitioners] and that because the Board found 'equivalent disclosures' of [a prior art reference] sufficient to anticipate and/or render obvious claims 1-6 and 12 in those cases, we must do the same here. . . . It simply is not true that the records in all three cases present the 'same evidence.' . . . The differences between [the expert's] declaration in the present case and the one submitted in the [related] proceeding are material, and lead to the different results in our institution decisions. . . . The evidence of inorganic particles in [the prior art reference] was considered in our Decision to Institute and, when considered in light of the Petition and [the expert's] declaration in this proceeding, found to be insufficient to establish a reasonable likelihood of unpatentability. . . . The rule [the petitioner] proposes—that every Petition citing the same art must be decided identically, regardless of the arguments set forth in the Petition—ignores the adversarial, adjudicative nature of an inter partes review.."

Petition for Inter Partes Review by Mitsubishi Plastics, Inc., IPR2014-00524 (PTAB November 21, 2014, Order) (Crumbley, APJ)

Medical Device Claims Indefinite Under Nautilus

The court granted defendant's motion for summary judgment that plaintiff's medical device patents were invalid as indefinite. "The question here is whether the absence of identified boundaries in terms of proximity, distance, or location renders the claims indefinite under a new and more rigorous standard imposed by the Supreme Court? The Court finds that it does. . . . There is no question that the relationship terms lack any quantitative parameters or a range of distance between the mount or anchor and a target or disc space. . . . The accurate targeting of the surgical site and positioning the mount, anchor, or fixation member to limit movement provide 'some standard for measuring the scope of the phrase[s],' but something more, short of absolute or mathematical precision, is required. . . . These claims all have some meaning and are not insolubly ambiguous, but they do fall short of the new, more rigorous reasonable certainty standard for indefiniteness. The lack of clarity in these claims leaves the next inventor in the 'zone of uncertainty,' not knowing what is claimed and what is still open."

Abdou v. Alphatec Spine, Inc., 3-12-cv-01804 (CASD November 19, 2014, Order) (Benitez, J.)

Failure to Disclose Federal Circuit Order May Support Inequitable Conduct Defense

The court granted defendants' motion to amend its answer to add a claim for inequitable conduct and rejected plaintiff's argument that the amendment was futile. "Defendants' proposed Amended Answer alleges, on information and belief, that during prosecution of the [patent-in-suit], [plaintiff] and its attorneys withheld [a] Federal Circuit Order with the intent to deceive the PTO. . . . According to the Amended Answer, had the PTO been aware of the Federal Circuit Order which stated that the specification's language requires scan conversion entirely on 'a floating point basis' . . . the PTO would not have permitted the issuance of claims in the [patent]. . . . [I]t is undisputed that the examiner was not given actual notice of the Federal Circuit's subsequent decision. While Plaintiff contends this alleged non-disclosure is not material, as the Federal Circuit Order is merely cumulative of the District Court Order, Defendants have articulated a plausible theory to the contrary. . . . The Amended Answer alleges that the Federal Circuit Order is material because it contained adverse statements not contained in the District Court Order. Had such statements by the Federal Circuit been before the PTO, the PTO may have either rejected the . . . claims for failure to satisfy §112 due to lack of written description, or may have found the [patent] could not claim priority to [an earlier] patent and then, considering the expanded range of prior art, may have rejected those claims.”

Graphics Properties Holdings, Inc. v. Google Inc., 1-12-cv-01394 (DED November 20, 2014, Order) (Stark, J.)

Damages Expert’s Linear Valuation of User Activations Excluded

The court granted in part defendant's motion in limine to exclude the opinion of plaintiff's damages expert concerning the value of user activations. "The Court grants the Motion with respect to [the expert's] opinion that user activations beyond the initial activation should be valued at a constant $0.115 rate. Based on the evidence before the Court, [the expert's] report applies too linear a relationship between the first and all subsequent activations. If there is a quantifiable value for the second, third, and other activations, [plaintiff] may present evidence of that value at trial."

Uniloc USA, Inc. et al v. Activision Blizzard, Inc., 6-13-cv-00256 (TXED November 18, 2014, Order) (Davis, J.)

Dilatory Tactics and Gamesmanship Warrant Limiting Number of Disputed Claim Terms to Five

The court sua sponte limited the parties to five terms for claim construction because of their litigation tactics. "Nearly a year into this litigation, the record thus far suggests that both parties have engaged in dilatory tactics — and potentially gamesmanship — inconsistent with the Court’s efforts to reach a 'just, speedy, and inexpensive determination of the action.'. . . [I]n light of the consistent delays and, in the Court’s view, needless disputes that have been emblematic of this litigation thus far, the Court invokes its inherent authority to reduce the number of claim terms that it will construe during claims-construction to five terms. The parties’ failure to move this case forward consistent with the Court imposed schedule seriously impacts the time to consider and resolve disputes related to the construction of terms in the relatively straightforward patents at issue."

Zamperla, Inc. et al v. IE Park srl, 6-13-cv-01807 (FLMD November 18, 2014, Order) (Dalton, J.)

Excluding Dollar Amount of Prior License to Aggregator Does Not Undermine Jury’s Finding of Obviousness

Following a jury trial, the court denied plaintiff's motion for judgment as a matter of law that its patent was not obvious and rejected plaintiff's argument that it should have been permitted to present the dollar amount of its license with a patent aggregator as a secondary consideration of nonobviousness. "[Plaintiff] argues that the Court's decision to exclude the dollar amount of its license agreement with [the aggregator] precluded the jury from considering that agreement as an indicator of non-obviousness. . . . [T]he Court, citing circumstances surrounding the [aggregator] agreement that were vastly different from those of other licensing agreements, found that evidence of the exact dollar amount of the license would 'skew the jury's perception of a reasonable royalty, causing unfair prejudice to [defendant].'. . . [Plaintiff] argues that the very fact that it has executed a multi-million-dollar licensing agreement with [the aggregator] demonstrates that the [patent-in-suit] was not obvious. [Plaintiff] overstates the case. Although the jury was not presented with the precise dollar amount of the [aggregator] agreement, it heard testimony describing the agreement, and specifically stating that it was 'much, much higher' in value than the other license agreements in evidence. . . . Although evidence of a multi-million-dollar licensing agreement may be evidence of non-obviousness, the Federal Circuit has 'often held [that] evidence of secondary considerations does not always overcome a strong prima facie showing of obviousness.'"

Digital Reg of Texas, LLC v. Adobe Systems Incorporated, et al, 4-12-cv-01971 (CAND November 17, 2014, Order) (Wilken, J.)

Provisional Rights Must be Pled as Separate Claim

The court denied plaintiff's motion to compel discovery as to when defendant became aware of plaintiff's patent applications. "The Court’s research indicates that a claim of pre-issuance infringement pursuant to 35 U.S.C. § 154(d) should generally be expressly pled in a complaint as a claim that is separate from a claim of infringement pursuant to 35 U.S.C. § 271. Plaintiff has not offered any legal authority or argument that its conclusory reference in its prayer for relief and allegation regarding only one of the two elements of a claim of pre-issuance infringement is sufficient to have alleged a claim of pre-issuance infringement pursuant to 35 U.S.C. § 154(d). . . . As such, the supplemental answers Plaintiff seeks . . . would involve information that is not relevant to a claim or defense currently in the case and Plaintiff is not entitled to obtain discovery regarding that issue."

Sorna Corporation v. Pacsgear, Inc., 0-13-cv-02794 (MND November 14, 2014, Order) (Brisbois, M.J.)

Supplemental Damages for Pre-Verdict Infringement Requires Bifurcation

The court denied plaintiff's motion for pre-verdict supplemental damages following a jury verdict based on defendant's failure to produce damages discovery. "During discovery, [defendant] failed to produce any financial records later than 2011. . . . [Plaintiff's] expert purported to reserve the right to seek post-2011 damages after trial, and [plaintiff] argues that it 'reserved the right in its complaint and again in its pretrial statement to seek an accounting of all damages.' [Plaintiff's] attempts to reserve these rights do not empower it to take the question of damages from the jury. Damages are part of a trial by jury. If [plaintiff] wished to bifurcate a portion of its damages for a separate, later trial, it would have had to ask the Court to do so, or reached an agreement to that effect with [defendant]."

TransPerfect Global, Inc., et al v. MotionPoint Corporation, 4-10-cv-02590 (CAND November 13, 2014, Order) (Wilken, J.)

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Does plaintiff’s failure to compel damages discovery as to pre-verdict time periods bar supplemental damages?

Another decision from the Northern District of California takes the opposite view: “While [plaintiff] did not do everything it could have to compel [defendant] to comply with its discovery obligations, it asked for damages information relating to [a pre-verdict time period] and was essentially stonewalled. [Defendant] cites no case holding that a failure to move to compel or some other relief warrants capping [plaintiff's] access to supplemental damages."

To view other decisions addressing supplemental damages, click this link.

Casino Monitoring Patent Not Abstract Under Alice

The court denied defendants' motion for summary judgment that plaintiff's casino monitoring patent was invalid for lack of patentable subject matter and rejected defendants' argument that the prior art showed the abstract concept of a customer loyalty program was practiced before plaintiff's invention. "[A]utomation of manual tasks is not necessarily abstract. U.S. Patent No. 72 (1794) to Eli Whitney for a cotton gin is one familiar example of a solidly tangible automating machine. Of course, one could posit a way of drafting even a claim to a cotton gin in a way that renders it abstract: 'a machine comprising metal and wood configured to remove cotton seeds from cotton fiber.' Read most charitably, Defendants are arguing something like that — that the prior art shows that all of the steps in the claimed method were performed together previously, and the [patent-in-suit] merely says 'do that, on a computer,' neatly fitting the [Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)] mold. But Defendants rely on multiple combinations of references to make that argument, and as couched by Defendants, those combinations seem more like an obviousness argument under 35 U.S.C. § 103 than a patent eligibility analysis under 35 U.S.C. § 101. . . . Defendants have not demonstrated that the claims simply cover generic computer implementation of the way poker rooms were managed before the invention."

Ameranth, Inc. v. Genesis Gaming Solutions, Inc. et al, 8-11-cv-00189 (CACD November 12, 2014, Order) (Guilford, J.)

Withdrawing Infringement Claims During Discovery and After Claim Construction Does Not Justify Attorneys’ Fee Award

The court denied defendant's motion for attorneys’ fees under 35 U.S.C. § 285 after plaintiff dropped three of six asserted patents before a jury trial. "[T]here is no basis to conclude that Plaintiff engaged in a 'kitchen sink' approach without a good faith basis for bringing suit. . . .One of the purposes of discovery . . . is 'to allow the plaintiff to pin down the defendant’s theories of defense, thus confining discovery and trial preparation to information that is pertinent to the theories of the case.' Plaintiff’s withdrawal of [one] patent during the course of discovery . . . was not unreasonable, and does not weigh in favor of an 'exceptional' case finding. Similarly, the Court does not regard Plaintiff’s withdrawal of its claims on [two other] patents after receipt of the Court’s claim construction order as unreasonable. A party is free to alter its litigation strategy after receiving an unfavorable claim construction."

NXP BV v. Research In Motion Ltd., et al, 6-12-cv-00498 (FLMD October 22, 2014, Order) (Kane, J.)

Alice Does Not Render All Software Unpatentable

The court denied defendant's motion for summary judgment that plaintiff's error correction patents were invalid for lack of patentable subject matter and found that computer software remained patentable. "A bright-line rule against software patentability conflicts with the principle that 'courts should not read into the patent laws limitations and conditions which the legislature has not expressed.' One could argue that eliminating software patents is desirable public policy, but Congress has spoken on the patentability of software. . . . By excluding computer programs from subsection (a), Congress contemplated that some computer programs were eligible for patent protection. Courts should not read [35 U.S.C. § 101] to exclude software patents when Congress has contemplated their existence. . . . Moreover, the Supreme Court has implicitly endorsed the patentability of software. [Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)] seems to acknowledge that software may be patentable if it improves the functioning of a computer. . . . The Supreme Court could have resolved Alice and provided clarity to patent law by declaring all software patents ineligible. However, the Supreme Court did not do this. This is some evidence of the continuing eligibility of software."

The California Institute of Technology v. Hughes Communications, Inc. et al, 2-13-cv-07245 (CACD November 3, 2014, Order) (Pfaelzer, J.)

“Assembly-Line” Litigation Tactic Supports Attorneys’ Fee Award

Following summary judgment of noninfringement, the court granted in part defendant's motion for attorneys’ fees under 35 U.S.C. § 285 because of its unreasonable litigation conduct. "[Plaintiff] essentially prosecuted this case in assembly-line fashion. It served a boilerplate complaint on dozens of defendants. [Plaintiff] has never attempted to demonstrate that it performed a presuit investigation of the [accused] App. It 'carelessly' served discovery requests that had nothing to do with the [accused] App. [Plaintiff] also relied on claim construction briefings filed against other defendants with dissimilar products than in this case, which did not focus on the most pertinent issues in this case, or respond to [defendant's] proposed constructions. . . . Most importantly, [plaintiff] did not expend the resources necessary to support its positions on infringement. [Plaintiff] repeatedly relied on attorney argument where facts were required. . . . Of the dozens of cases [plaintiff] or its predecessor has filed, only this case has reached a decision on the merits. From the litigation conduct in this case, it appears that [plaintiff] is actually not willing to invest the resources to prove up its infringement case. Deterring similar behavior — filing a patent infringement suit but being unwilling to expend the resources necessary to support the infringement claims — is an appropriate consideration in awarding fees."

IPVX Patent Holdings, Inc. v. Voxernet LLC, 5-13-cv-01708 (CAND November 6, 2014, Order) (Lloyd, M.J.)

Evidence of Prior Acquisition of Business Including Patents Admissible Generally, But Not Allocation of Purchase Price

The court granted in part plaintiff's motion in limine to preclude evidence of prior sales and valuations of the patents-in-suit. "[A]lthough [two] acquisitions represent imperfect evidence, they are relevant to damages and that relevance is not outweighed by the likelihood of juror confusion. Accordingly, the Motions are denied as to the [acquisitions] generally. Also at issue is [a 10-K] allocation of $963,000 to the patents included in its acquisition. The Court finds that this number involves a host of different business considerations and is too far removed from the hypothetical negotiation that the jury will be asked to consider. The likely result of the presentation of this evidence is substantial juror confusion."

Mobile Telecommunications Technologies, LLC v. Sprint Nextel Corporation, 2-12-cv-00832 (TXED November 5, 2014, Order) (Payne, M.J.)

Frivolous Claim Construction Argument Justifies Award of Attorneys’ Fees Even If Nondispositive

Following summary judgment on defendant's patent counterclaims, the court granted plaintiff's motion for attorneys’ fees under 35 U.S.C. § 285. "[T]he 'totality of the circumstances' dictates that [defendant] acted in an 'exceptional' manner throughout this litigation. In one instance, [defendant] even ignored an express warning from the Court not to take certain action — otherwise sanctions would follow — and [defendant] nevertheless proceeded. . . . [Defendant] also deserves to be sanctioned for proposing a construction of [a term] that the Court later held 'render[ed] meaningless the amendments [defendant] added after the [PTO] rejected the original versions of the claim language.'. . . . [Defendant] argues that its proposed construction cannot form the basis for an award of attorneys’ fees. However, a finding of frivolity does not depend on whether the issue ultimately disposed of the case or motion. Rather, frivolity can exist in isolation. Parties cannot litigate a case by presenting multiple alternative arguments, some of which lack merit, then later take shelter under the meritorious ones when facing a motion for attorneys’ fees."

TNS Media Research, LLC, et al v. TRA Global, Inc., 1-11-cv-04039 (NYSD November 4, 2014, Order) (Scheindlin, J.)

Failure to Comply with Discovery Order Warrants Terminating Sanctions

The court found defendants in contempt of the court's discovery order and entered default against them on plaintiff's infringement claims and determined that lesser sanctions would be ineffective. "Defendants’ submissions to this Court do not evidence that they believe that they are in compliance, but rather that they, not this Court, know what should be required to be produced and how it should be provided to opposing counsel. This flagrant refusal to comply with an Order that [defense counsel] concedes was 'crystal clear,' is disrespectful to this Court and fellow Judges of the United States District Court for the Western District of Pennsylvania. . . . [Defendants] have consciously and willfully chosen to defy the Court’s Orders in order to delay this litigation, attempt to obtain some tactical advantage, or for some other unknown reason. Defendants’ production of initial disclosures, including source code, is a requirement of this Court’s Orders, not a bargaining chip to be used against Plaintiff. . . . [M]onetary or other similar sanctions would not prompt Defendants to produce the required information or adequately account for or correct the prejudice caused to Plaintiff. . . . [M]ore serious sanctions must be considered because lesser sanctions would be ineffective and Defendants’ conduct can no longer be countenanced."

Drone Technologies, Inc. v. Parrot SA et al, 2-14-cv-00111 (PAWD November 3, 2014, Order) (Schwab, J.)

$1.9 Million Spoliation Sanction Awarded Against Respondent and Counsel

The ALJ granted in part complainants' motion for spoliation sanctions and imposed monetary sanctions of nearly $2 million against respondent and counsel for complainants' forensic investigation into the spoilated evidence. "[Respondent] is a Turkish chemical company with no significant operations in the United States. . . . Accordingly, imposing monetary sanctions against [respondent] alone would likely give [complainants] ineffective relief. . . . Second, counsel for [respondent] was present in Turkey to oversee the inspection of [a] company-issued laptop when the spoliation occurred. Third . . . the explanations in [respondent's letter] for the destruction of evidence on the . . . laptop and the behavior that occurred thereafter to try and cover up the spoliation are not the slightest bit credible on its face. Any diligent effort by counsel to check the veracity of the explanations in that letter before it was filed would have revealed them as false.. . . . Fourth, there is no affirmative evidence of record that a litigation hold memo, or equivalent, was issued or disseminated in this investigation. Nor is there evidence that an active undertaking was made to preserve evidence in this investigation."

Opaque Polymers, 337-TA-883 (ITC October 29, 2014, Order) (Pender, ALJ)

No Disclosure of Defendant’s Confidential Information to Plaintiff’s Patent Assertion and Licensing Contractor

The court granted defendant's motion to prohibit plaintiff's proposed expert from accessing confidential information under the parties' protective order because there was a high risk of inadvertent disclosure where the expert worked for plaintiff's patent assertion and licensing contractor. "The ongoing nature of [the expert's] position with Plaintiff supports Defendants’ contention that [the expert] is not independent. Moreover, although [he] is apparently not a day-to-day employee, his position with Plaintiff is significant because he manages Plaintiff’s entire patent portfolio, rather than the patent-in-suit alone. . . . [The expert's] advice and assistance in licensing and asserting Plaintiff’s patents indicate [he] is closely involved with Plaintiff’s competitive business decisions. . . . There is thus a risk that [he] would be placed in a position to choose between denying Plaintiff advice regarding his patents and abiding by the Protective Order."

Ushijima v. Samsung Electronics Co., Ltd. et al, 1-12-cv-00318 (TXWD October 30, 2014, Order) (Lane, M.J.)