Friday, September 22, 2017

Data Compression Patent Not Invalid Under 35 U.S.C. § 101 at Pleading Stage

The magistrate judge recommended denying defendant's motion to dismiss on the ground that plaintiff’s data compression patent encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "The [patent] is directed to patent eligible subject matter because it discloses a specific improvement in computer capabilities: a system for an improved data compression technique. . . . [C]laim 1 of the [patent] is not simply encoding and decoding. It improves typical data compression by compressing the data stream through content dependent and independent data recognition, as well as a plethora of encoders to achieve its maximum compression. This results in real-time or pseudo-real-time compression."

Realtime Data LLC d/b/a IXO v. Carbonite, Inc. et al, 6-17-cv-00121 (TXED September 20, 2017, Order) (Love, MJ)

Thursday, September 21, 2017

Corporate Parent's Presence in Judicial District Not Imputed to Subsidiary for Purposes of Determining Venue

The court overruled plaintiff's objections to the magistrate judge's recommendation and granted defendant's motion to dismiss for improper venue because there was insufficient evidence that defendant had a regular and established place of business in the forum. "[T]he Court is not persuaded that [plaintiff] has put forth sufficient evidence that [defendant's parent] and [defendant] acted as a single enterprise such that [the parent's] presence in this District should be imputed to [defendant] for the purpose of determining venue. [Plaintiff's] argument that venue is proper because [defendant] maintains inventory, advertises and markets, and receives substantial benefits in this District is similarly lacking in merit. [Plaintiff] relies only on evidence specific to [the parent] to support its assertions, and none of the evidence presented by [plaintiff] points to activities performed by [defendant]."

Blue Spike, LLC v. Caterpillar Inc. et al, 6-16-cv-01361 (TXED September 19, 2017, Order) (Schroeder, USDJ)

Wednesday, September 20, 2017

Preview-Based File or Folder Sharing Patent Claims Invalid Under 35 U.S.C. § 101

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s preview-based file or folder sharing patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "Preview-based file or folder sharing is simply a computerized version of a manual process of sharing information that has existed for years. . . . Plaintiff nevertheless argues that claim 9 is directed to a specific improvement in computer technology -- not an abstract idea -- because it enables the fast and easy exchange of files between users. . . . Simply because a claimed invention offers benefits within a particular technological environment does not mean that it improves technology itself. Critically, there are no computer or networking technologies, such as algorithms, data structures, or hardware components, which claim 9 specifically improves."

TS Patents LLC v. Yahoo! Inc., 5-17-cv-01721 (CAND September 1, 2017, Order) (Koh, USDJ)

Tuesday, September 19, 2017

Delaware Court Congestion Favors Transfer of Venue

The court granted defendant's motion to transfer venue from the District of Delaware to the Northern District of California and sua sponte raised the issue of court congestion. "While neither party addresses this factor, we do because this District is now reduced to two active district court judges with judges from other busy districts sitting as visiting judges to help address the busy docket until new district court judges are sworn. The Northern District of California has a full bench of talented district court judges experienced in patent litigation. . . . [T]his District is ranked 17th in the United States for weighted filings per judge (based on four judges as of March 31, 2017) while the Northern District of California is ranked 23rd based on fourteen judges as of March 31, 2017. This District is now reduced to two active judges, only increasing the number of cases on each judge's docket here. . . . Given the limited resources, we find it difficult to justly allocate judicial resources in this District to resolve a dispute between California and North Dakota citizens where there is no connection here other than [defendant's] single retail location."

Prowire LLC v. Apple Inc., 1-17-cv-00223 (DED September 15, 2017, Order) (Kearney, USDJ)

Monday, September 18, 2017

Laches Remains Viable Defense to Claim for Permanent Injunctive Relief

The court denied plaintiff's motion for judgment on the pleadings that defendants could not pursue a laches defense against plaintiff's claim for patent injunctive relief. "The Supreme Court recently held [in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, 137 S.Ct. 954, 960 (2017)] that laches does not bar recovery of damages incurred within the statute of limitations in patent cases. In light of that holding, the parties dispute whether the defense of laches may ever bar injunctive relief. . . . [I]n SCA Hygiene, the Supreme Court explicitly declined to address the application of laches to equitable defenses and the portion of the Federal Circuit’s opinion addressing the issue. . . . The [Federal Circuit] concluded that 'laches in combination with the [eBay v. MercExchange, LLC, 547 U.S. 388, 391(2006)] factors may in some circumstances counsel against an injunction.'. . . The Federal Circuit merely articulates that a plaintiff’s delay in bringing suit is relevant to whether equitable relief is warranted. . . . [T]he Supreme Court has not held that laches is never a bar to injunctive relief, but rather that it only bars such relief when the delay is of 'sufficient magnitude.' Therefore, laches is still a viable defense to [plaintiff's] claims."

Spitz Technologies Corporation v. Nobel Biocare USA, LLC et al, 8-17-cv-00660 (CACD September 11, 2017, Order) (Selna, USDJ)

Friday, September 15, 2017

Continued Willful Infringement Justifies 1.5X Multiplier for Ongoing Royalty Award​

The court granted in part plaintiff's motion for an ongoing royalty and enhanced the jury's royalty rate by one and half times for defendants' willful infringement. "[Plaintiff] argues the jury’s verdict did not include damages for Defendants’ willful infringement. Thus, [plaintiff] contends enhancement for Defendants’ continued willful infringement is proper in the ongoing royalty context when using the jury’s non-willfulness rate as a starting point. The Court agrees. . . . [I]t is undisputed that, since the jury verdict, Defendants have continued to infringe the patents-in-suit. . . . [T]he Court does not find that trebling the jury-determined rate to be appropriate. [Plaintiff] has not addressed any circumstances that would relate to the egregiousness of Defendants’ conduct after the jury’s verdict. Nevertheless, after balancing the [Read Corp. v. Portec, Inc., 970 F.2d 816, 827 (Fed. Cir. 1992)] factors, the Court considers Defendants’ continued infringement to be unreasonable, deliberate and willful in nature. As such, the Court enhances the jury-determined rate by 1.5 times."

Imperium IP Holdings (Cayman), Ltd. v. Samsung Electronics Co., Ltd. et al, 4-14-cv-00371 (TXED September 13, 2017, Order) (Mazzant, USDJ)

Thursday, September 14, 2017

Public Interest in Enhancing Safety Favors Permanent Injunction​

Following a jury trial, the court granted plaintiff's motion for a permanent injunction and rejected defendant's argument that the public interest weighed against an injunction of its flame barrier products. "Defendant argues that an injunction would harm the public interest because the public is better off with a multiple-supplier market for products affecting public safety. Defendant provides some evidence that Plaintiff may have had supply issues with its product. . . . Overall, I am not concerned with Plaintiff's ability to supply its product. Even if there were concerns, it could still be appropriate to award an injunction. It is also the case that 'copies of patented inventions have the effect of inhibiting innovation and incentive.' Guarding against such copies could foster the development of more technologies aimed at enhancing public safety."

EI du Pont de Nemours and Company v. Unifrax I LLC, 1-14-cv-01250 (DED September 12, 2017, Order) (Andrews, USDJ)

Wednesday, September 13, 2017

Frequent ANDA Filer May Have Regular and Established Place of Business in Delaware​

The court denied without prejudice defendant's motion to dismiss plaintiffs' ANDA infringement action for improper venue pending discovery on whether defendant had a regular and established place of business in the forum. "[Defendant] is part of [a] family of companies which have a nationwide and global footprint. . . . Within the [company] family, [defendant] appears to serve the role of securing regulatory approval for many of [their] generic products. . . . [I]t appears that a key to [defendant's] success in the generic drug business is its constant involvement in Hatch-Waxman litigation. Historically, the largest number of Hatch-Waxman cases each year are filed in the District of Delaware. . . . [Defendant], as a frequent ANDA filer, appears in front of this Court with regularity for the purpose of getting its generic drugs on the market, and when that litigation concludes in a way that is favorable for [defendant], those generic drugs are distributed to and used by Delaware residents through a distribution network that has been established for that purpose. In the Court's view, this business reality is a pertinent consideration in assessing whether [defendant] has a regular and established place of business in Delaware. . . . While [defendant] has been unable to this point to identify a 'fixed physical presence in the sense of a formal office or store' that [defendant] maintains in Delaware, this is not required. . . . [N]o relationship between a defendant's acts of infringement and its regular and established place of business is necessary to satisfy § 1400(b)."

Bristol-Myers Squibb Company et al v. Mylan Pharmaceuticals, Inc., 1-17-cv-00379 (DED September 11, 2017, Order) (Stark, USDJ)

Tuesday, September 12, 2017

Arguments in IPR Result in Prosecution Disclaimer Estopping Infringement Claim​

The magistrate judge recommended granting defendant's motion for summary judgment that plaintiff's infringement claims were estopped due to plaintiff's prosecution disclaimer in its response to intervenors' petition for inter partes review. "Regardless of whether an examiner or panel agreed with the patentee’s statement, the statement itself may result in disclaimer because it constitutes a representation to the public about the scope of the patent. [Plaintiff's] statements to the Patent Office in its preliminary response were clear and unmistakable. [Plaintiff] repeatedly emphasized that the TR 23.809 standards document does not describe a GGSN that preserves the PDP context after receiving an error indication because the GGSN marks the PDP context as invalid. . . . [Plaintiff's expert's] central thesis is that by complying with the TS 23.060 standard, [defendant's] network infringes. The problem is that the standard, and by extension [defendant's] network, includes a GGSN that marks the PDP context invalid."

Huawei Technologies Co. Ltd v. T-Mobile US, Inc. et al, 2-16-cv-00052 (TXED September 9, 2017, Order) (Payne, MJ)

Monday, September 11, 2017

Patentee's Threat of Litigation After PTO Warning of Likely Invalidity Justifies Award of Attorney Fees Under 35 U.S.C. § 285

​ Following judgment on the pleadings of lack of patentable subject matter, the court granted a declaratory judgment plaintiff's motion for attorney fees under 35 U.S.C. § 285 because defendant threatened litigation after the PTO asserted, during a reexamination appeal, that the patent claims were likely invalid under 35 U.S.C. § 101. "[T]he lone fact that a patent owner asserted patent claims in litigation that ultimately were found to be invalid under § 101 is typically insufficient for finding a case exceptional. But, this case does stand out from the typical case in which claims of a patent were invalidated by a court. That is because [defendant] was specifically warned by the USPTO, in [a Federal Circuit appellate brief in connection with a reexamination appeal], that it looked very unlikely that these claims were directed toward patentable subject matter and very likely that the claims were invalid. The USPTO did not directly address this subject matter eligibility issue in that opinion because doing so would have been outside the authority of the USPTO for that particular proceeding. . . . Instead of addressing this issue, after the USPTO created a serious cloud on the of the claims, [defendant] ignored it and continued to assert its patent against companies like [plaintiff]."

SAP America Inc v. InvestPic LLC, 3-16-cv-02689 (TXND September 7, 2017, Order) (Kinkeade, USDJ)

Friday, September 8, 2017

Enhanced Damages Denied in Halo Remand

​Following remand, the court again denied plaintiff's motion for enhanced damages because defendant was not a "pirate." "Enhanced damages remain an exceptional tool meant to punish patent 'pirates' -- companies that intentionally infringe with no regard for a plaintiff’s rights. The record reveals that [defendant] is no pirate. Its defense strategies were questionable, which is reflected in the jury’s verdict against it. But [defendant] offers ample evidence that: (1) when it learned of [plaintiff's] patent [defendant] investigated whether its products infringed, (2) [defendant] pursued non-frivolous defenses at trial, and (3) [defendant] had a basis to subjectively believe it was not infringing [plaintiff's] patent throughout this litigation and prior."

Halo Electronics, Inc. v. Bel Fuse Inc., et al, 2-07-cv-00331 (NVD September 6, 2017, Order) (Gordon, USDJ)

Thursday, September 7, 2017

Pulmonary Edema Treatment Patents Invalid Under 35 U.S.C. § 101​

Following a bench trial, the court determined that the asserted claims of plaintiffs’ pulmonary edema treatment patents encompassed unpatentable subject matter and found that the claims were directed toward a natural phenomena. "[T]he core of the alleged invention is the increased risk of pulmonary-capillary wedge pressure that develops when administering [inhaled nitric oxide] to term or near-term patients with both hypoxic respiratory failure and left-ventricular dysfunction. That 'invention' is really a patient populations' natural physiological response to 20 ppm of inhaled nitric oxide treatment. While man discovered the adverse physiological response that occurs when some patients receive iNO, such a discovery does not amount to innovation."

INO Therapeutics LLC et al v. Praxair Distribution, Inc. et al, 1-15-cv-00170 (DED September 5, 2017, Order) (Sleet, USDJ)

Wednesday, September 6, 2017

Carpet Tufting Patent Claims Not Invalid Under 35 U.S.C. § 101​

The court granted plaintiff's motion for summary judgment that the asserted claims of its carpet tufting patents were not invalid for claiming unpatentable subject matter because the claims were not directed toward an abstract idea. "[T]he Severed Claims are not directed toward the abstract idea of high-stitch-rate tufting. They do not claim the production of all carpets with relatively high stitch rates. Instead, they claim a specific way of achieving a high stitch rate -- a manner of stitching far more yarns per longitudinal inch than in conventional tufting systems, then pulling yarns not wanted in the face of the pattern out of the backing or so low they cannot be seen. . . . Even if [defendant] correctly asserts that the Claims use conventional tufting machines, it has presented no evidence to suggest that these tufting machines perform purely conventional steps."

Card-Monroe Corp. v. Tuftco Corp., 1-14-cv-00292 (TNED September 1, 2017, Order) (McDonough, USDJ)

Amendment of Patent Claims to Distinguish Prior Art Precludes Provisional Rights Damages​

The court granted defendant's motion for summary judgment that plaintiff was not entitled to damages for infringement before one of its patents issued because plaintiff amended the claim language of the application to distinguish the prior art. "The amended language makes 'effective stitch rate' equivalent to the prescribed stitch rate multiplied by the number of yarns, narrows the claim, and distinguishes the [a prior art] Patent. Accordingly, the invention as claimed in the [patent] Application is not substantially identical to the invention as claimed in the [patent-in-suit], and [plaintiff] does not retain provisional rights arising out of Claim 1."

Card-Monroe Corp. v. Tuftco Corp., 1-14-cv-00292 (TNED September 1, 2017, Order) (McDonough, USDJ)

Tuesday, September 5, 2017

Two Employees and Independent Contractor Do Not Create Regular and Established Place of Business​

The court granted defendant's alternative motion to transfer plaintiff's patent infringement action for improper venue because defendant's two employees and an independent contractor did not create a regular and established place of business in the forum. "[Defendant] acknowledges that a full-time IT employee works remotely from Florida and a second employee titled a 'Guru' supplies knowledge about [defendant's] products at racing events throughout Florida. Also, two non-employee independent contractors, only one of whom resides in this District, have a relationship with [defendant]. Plaintiff implores the Court to find these four individuals are prima facie evidence that venue is proper in this District, citing a case from the Eastern District of Texas, Ratheon Co. v. Cray, Inc., No. 2:15-cv— 1554-JRG, 2017 WL 2813896 (E.D. Tex. June 29, 2017), which set out four factors that a court can consider to determine whether a defendant had a 'regular and established place of business' within the venue. The Court declines to adopt such a standard as it is clear from the Complaint and the evidence submitted by the parties that [defendant] has no regular and established place of business in this District; and particularly in patent infringement cases, the acts of infringement (i.e., development of the [accused product]) occurred at the Defendant’s headquarters in Washington or overseas."

Townsend v. Brooks Sports, Inc., 2-17-cv-00062 (FLMD August 31, 2017, Order) (Chappell, MJ)

Friday, September 1, 2017

Majority Position that TC Heartland Does Not Qualify as Intervening Law "More Persuasive" Than Opposing View​

The court denied defendant's motion to dismiss plaintiff's patent infringement action for improper venue because defendant waived its venue defense by filing a previous Rule 12(b)(6) motion. "In the wake of [TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017)], a number of district courts have grappled with the question of whether the decision is intervening law, rendering an improper venue defense unavailable prior to its publication. The majority have held that TC Heartland does not qualify as intervening law. . . . This Court declines to join the majority view simply because it is the more popular approach. The majority’s analysis, however, is more persuasive. . . . [E]quity does not dictate that this Court allow [defendant's] belated challenge. Thus, because [defendant] filed a motion to dismiss [a year ago], but did not assert an objection to venue, [it] waived any challenge to venue."

President and Fellows of Harvard College v. Micron Technology, Inc., 1-16-cv-11249 (MAD August 30, 2017, Order) (Young, USDJ)

Thursday, August 31, 2017

Network Gaming Patent Claims Not Invalid Under 35 U.S.C. § 101​

The court denied defendant's motion to dismiss on the ground that plaintiff’s network gaming patents encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "Prior communication techniques interconnected all participants using point-to-point connections, and thus, did not 'scale well' as the number of participants grew. The Broadcast Claims are directed to an innovative network structure for the distribution of data as the number of participants in a computer network is scaled. . . . A non-complete, m-regular network is a network where each node is connected to the same number of other nodes, or 'm' number of other nodes, and where each node is not connected to all other nodes. . . . Defendants argue that the Broadcast Claims are analogous to situations such as the schoolyard game of 'telephone'. . . . Defendants' analogies do not present the same communication scaling issues as those that arise in computer networks. Defendants gloss over the claim requirement of a non-complete, m-regular network that is implemented on an application level. The claims require a specific and apparently innovative structure of message-forwarding, which none of Defendants' analogies are known to employ."

Acceleration Bay LLC v. Activision Blizzard, Inc., 1-16-cv-00453 (DED August 29, 2017, Order) (Andrews, USDJ)

Predictive Analytics Patent Claims Invalid Under 35 U.S.C. § 101

​ The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s predictive analytics patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "[Plaintiff's] claims are directed to a mental process and the abstract concept of using mathematical algorithms to perform predictive analytics. The method of the predictive analytics factory is directed towards collecting and analyzing information. The first step, generating learned functions or regressions from data -- the basic mathematical process of, for example, regression modeling, or running data through an algorithm -- is not a patentable concept. . . . While [plaintiff] claims that this shows it would be impossible for a human to perform such a task, just because a computer can make calculations more quickly than a human does not render a method patent eligible. . . . [Plaintiff] fails to identify any previously existing technology that its claims improve upon, or that its claims do more than carry out regression analysis and evaluation."

Purepredictive, Inc. v. H2O.AI, Inc., 3-17-cv-03049 (CAND August 29, 2017, Order) (Orrick, USDJ)

Wednesday, August 30, 2017

Employing Two Full-Time Direct Sales Representatives Creates Regular and Established Place of Business​

The court denied defendant's motion to dismiss or transfer plaintiff's patent infringement action for improper venue because defendant had a regular and established place of business in the forum through the work of its sales representatives. "[Defendant] employs at least two full-time direct sales representatives who are based in this District and who work exclusively for [defendant]. These two representatives work from their personal residences. . . . [Defendant's] direct sales representatives receive the infringing helmets in this District, keep samples in this District, and display and show these samples in this District. They also give sales presentations for [defendant] in this District and provide promotional materials about the infringing products. [Plaintiff] further alleges that [defendant] has sales showrooms in this District for the purpose of displaying samples of the infringing helmets. . . . [Defendant] views its local sales representatives as an intended point of interaction between the public and [defendant] in each region."

Kranos IP Corporation et al v. Riddell, Inc., 2-17-cv-00443 (TXED August 28, 2017, Order) (Gilstrap, USDJ)

Unnecessary Verdict of Zero Damages And Brief Deliberations Do Not Indicate Juror Bias​

Following a jury verdict of noninfringement and invalidity, the court denied plaintiffs' motion for a new trial on the ground that the verdict was arbitrary and anti-patent. "After a four-day trial, the jury deliberated for almost three and a half hours before reaching a unanimous verdict of non-infringement on fourteen claims and invalidity on nine claims from three of [plaintiffs'] patents and three of [defendant's] patents. Despite an instruction in the verdict form to answer the questions on damages for each patent 'only if [the jury] found at least one claim of a patent valid . . . and the same claim of that patent infringed,' the jury indicated 'zero' for all damages. . . . There is no 'minimum deliberation time' required before a jury may reach a verdict. . . . [U]nder [plaintiffs'] logic, any unanimous verdict of non-infringement and invalidity returned under four hours is 'a uniformly anti-patent verdict.'. . . Although the jury should not have answered the damages section of the verdict form, the jury’s finding of non-infringement is clear and disposes of the damages issues."

Metaswitch Networks Ltd. et al v. Genband US LLC et al, 2-14-cv-00744 (TXED August 28, 2017, Order) (Gilstrap, USDJ)

Tuesday, August 29, 2017

Defendant’s Stipulation to Infringement "Under the Present Claim Construction" Does Not Justify Change in Order of Proof at Trial​

The court denied defendants' motion to stipulate to infringement "under the present claim construction" and change the order of proof at trial to begin with defendants' invalidity claims. "[T]he Court anticipates that in light of the parties’ positions [at summary judgment], it will likely be necessary to construe the term 'acrylate/C10-30 alkyl acrylate cross-polymer' at trial, and that the Court expects the parties to provide additional evidence on that issue at trial. Because that issue bears on infringement as well as invalidity, the defendants’ stipulation to infringement under the 'the present claim construction' is no real stipulation at all. . . . [C]ourts have on occasion acquiesced in the request of the accused infringer to present its case first at trial. In several of those instances, however, the courts have allowed the patentee to present background information at the outset before the accused infringer begins its invalidity challenge. That sequence seems fair to the Court in this case, particularly in light of [plaintiff's] having organized the appearance of its background witnesses around the assumption that it would go first at trial."

Allergan, Inc. v. Teva Pharmaceuticals USA, Inc. et al, 2-15-cv-01455 (TXED August 25, 2017, Order) (Bryson, CJ)

Monday, August 28, 2017

One Year Delay Seeking to Disqualify Counsel Waives Objection to Conflict​

The court denied plaintiff's motion to disqualify its former counsel as counsel for defendant because plaintiff waived its argument by delaying its motion for a year after it learned of the representation and the delay substantially prejudiced defendant. "[19 months ago], [plaintiff's former counsel] entered notices of appearance on the public docket as [defendant's] counsel. . . . [Plaintiff] had knowledge of both sides of the conflict coin: [counsel's] prior work for [plaintiff] and its current work for [defendant]. And although not necessary to show waiver, [counsel] also put forward evidence that [plaintiff's current counsel] was aware of [defense counsel's] prior relationship with [plaintiff]. . . . [T]he Court is convinced that [plaintiff] knew about the . . . conflict for a year before it decided to file this motion to disqualify. And one year qualifies as an extended delay. . . . In . . . the year during which [plaintiff] knew of the alleged conflict but took no action [its former counsel] billed over 3,400 hours to prepare this matter for trial. Although the Court has not yet set a trial date, this expenditure of time and resources weighs in favor of waiver."

Eolas Technologies Incorporated v. Amazon.com, Inc., 3-17-cv-03022 (CAND August 24, 2017, Order) (Tigar, USDJ)

Friday, August 25, 2017

Multimedia Messaging Patents Invalid Under 35 U.S.C. § 101​

The court granted defendants' motion to dismiss because the asserted claims of plaintiff’s multimedia messaging patents encompassed unpatentable subject matter and found that the asserted claims were directed toward an abstract idea. "Defendants argue that claim 17 covers an abstract idea because it addresses the problem of 'incompatability in communication.' In Defendants' view, such a problem 'has existed ever since human languages diverged' and claim [plaintiff's] solution 'is equally ancient' because it involves 'conversion to and from a common format.' The Court agrees. . . . [Plaintiff] counters that claim 17 is not directed to an abstract idea because it is 'limited to the transmission of multimedia messages in a multi-carrier environment.' But claims that 'limit [an] abstract idea to a particular environment' are 'no less abstract for the step 1 analysis.'"

Intellectual Ventures I LLC v. T-Mobile USA, Inc. et al, 1-13-cv-01632 (DED August 23, 2017, Order) (Stark, USDJ)

Wireless Data Transmission Patents Not Invalid Under 35 U.S.C. § 101​

The court denied defendants' motion to dismiss because the asserted claims of plaintiff’s data transmission patent encompassed unpatentable subject matter and found that the asserted claims were not directed toward an abstract idea. "Broadly speaking, claim 1 is directed to the idea of improving data transmission over wireless networks. . . . The invention described by claim 1 is directed to improving the transmission of data in a wireless communication system, while avoiding transmission problems, such as fading. The specification of the [patent] confirms that this concept is the essence of the claimed invention. The Court further agrees with [plaintiff] that the claims are 'directed to an improvement of an existing technology.'. . . Instead of simply reciting a mathematical relationship, the [patent] employs that relationship to aid in the high-speed transmission of data without compromising bandwidth efficiency."

Intellectual Ventures I LLC v. T-Mobile USA, Inc. et al, 1-13-cv-01632 (DED August 23, 2017, Order) (Stark, USDJ)

Thursday, August 24, 2017

Success and Notoriety of Asserted Patents Does Not Show Defendant's Knowledge of Patents Sufficient to Plead Willfulness Claim​

The court granted defendant's motion to dismiss plaintiffs' willful infringement claims for failing to sufficiently allege knowledge. "Plaintiffs allege that Defendant must have known of Plaintiffs’ patents simply by virtue of operating a business in the same industry. The [operative complaint] states that [plaintiff] is 'among the most prominent innovative vaporizer companies in the United States and throughout the world[,]' and the 'inventions . . . in [plaintiff's] patents have been recognized by those in the industry as major milestones in the field.' Furthermore, Plaintiffs allege that Defendant 'is aware that [plaintiff] has established one of the most successful vaporizer companies in the world' and has 'sought to replicate [plaintiff's] success by infringing on [its] intellectual property.' Defendant asks the Court to make a logical leap. Simply because [a plaintiff] is successful and well-known in the industry and Defendant purchased Plaintiffs’ products for resale prior to the alleged infringement, does not mean that Defendant had knowledge of Plaintiffs’ patents, and it certainly does not necessarily follow that [defendant's] conduct is so egregious as to warrant increased damages."

Atmos Nation, LLC et al v. BnB Enterprise, LLC, 0-16-cv-62083 (FLSD August 21, 2017, Order) (Dimitrouleas, USDJ)

Wednesday, August 23, 2017

Employing Part-Time Field Technicians and Registering to Do Business Create Regular and Established Place of Business​

The court denied defendant's motion to transfer for improper venue because defendant had a regular and established business in the forum through its part-time field technicians who regularly provided service to purchasers of the accused product. "A fixed physical presence in a district is not dispositive, and the guiding question is whether the corporate defendant does it business through a permanent and continuous presence in the district. . . . [T]he defendant is registered to do business in the State of North Carolina . . . . Defendant claims that it has six part-time field technicians, who are paid hourly. According to defendant, these technicians do not solicit orders, enter into contracts, or make sales, but instead service existing accounts. . . . [T]he contacts in the instant case involve technicians who actively work on-site throughout the District. . . . [T]he court here finds that venue is appropriate in this district as defendant employs six field technicians who regularly service customers in this district who have purchased defendant’s allegedly infringing product."

InVue Security Products Inc. v. Mobile Tech, Inc. d/b/a Mobile Technologies Inc. and MTI, 3-15-cv-00610 (NCWD August 21, 2017, Order) (Cogburn, Jr., USDJ)

Tuesday, August 22, 2017

Biometric Identification Patent Invalid Under 35 U.S.C. § 101

​ The court granted defendants' motion to dismiss because the asserted claims of plaintiffs’ biometric identification patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "[H]umans have long compared images of faces they have seen previously (an old-fashioned registration template) to faces they encounter in the world to determine or confirm an individual’s identity. . . . Plaintiffs argue that the [patent] 'focus[es] on a specific means or method that improves the relevant technology of a global biometric authentication system.' But neither the template receiver nor the verifier has any relation to the creation of a template; the plain language of claim 1 states that the system components only receive and compare the templates. . . . Nor does the patent discuss how the templates are compared. And even though part of the system operates remotely, that does not evidence a nonabstract concept."

IQS US Inc. et al v. Calsoft Labs Incorporated et al, 1-16-cv-07774 (ILND August 18, 2017, Order) (Lefkow, USDJ)

Monday, August 21, 2017

Waiver of Objection to Personal Jurisdiction Does Not Establish Residency for Purposes of Venue​

The court granted defendant's motion to dismiss plaintiff's patent infringement action for improper venue and rejected the argument that defendant's failure to object to personal jurisdiction established residency for purposes of venue. "[Plaintiff] agues [defendant] failed to object to personal jurisdiction and accordingly is deemed to 'reside' here for purposes of venue. In support of this argument, [plaintiff] cites several cases in which courts have denied a motion to dismiss for improper venue when the defendant waived its objection to personal jurisdiction. The reasoning in these cases is that 'not challenging personal jurisdiction in a motion to dismiss challenging venue concedes personal jurisdiction, which in turn establishes venue.' This argument fails. A defendant’s waiver of personal jurisdiction can only 'establish' venue if venue is proper everywhere the defendant is subject to personal jurisdiction."

The Procter & Gamble Company v. Ranir, LLC, 1-17-cv-00185 (OHSD August 17, 2017, Order) (Black, USDJ)

Objection to Venue Under § 1391(c) Does Not Preserve Objection to Venue Under § 1400(b)​

The magistrate judge recommended denying defendant's motion to dismiss or transfer for improper venue because defendant waived that defense by limiting its venue challenge in its answer to its personal jurisdiction challenge. "[Defendant] did not generally deny that venue is proper. Instead, [Defendant] specifically denied venue is proper 'for the reasons set forth in the Complaint' -- namely, that [its] acts of infringement subject it to personal jurisdiction in this District. In other words, [defendant's] objection was based solely on the argument this District does not have personal jurisdiction over [defendant] because it does not infringe, and [defendant] admits as much. This Court has already concluded a defendant’s acknowledgement of the applicability of [28 U.S.C. § 1391(c)], without more, results in waiver. . . . [Defendant] conceded the applicability of § 1391(c) while omitting from its Answer an objection to venue because it had no 'regular and established place of business' in this District. That waives any such objection."

MyMail, Ltd. v. Yahoo!, Inc., 2-16-cv-01000 (TXED August 17, 2017, Order) (Payne, MJ)

Friday, August 18, 2017

Wireless Messaging Patent Not Invalid Under 35 U.S.C. § 101​

Following a jury trial, the court denied defendant's renewed motion for judgment as a matter of law on the ground that plaintiff’s messaging patent encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "The Court concludes that the asserted claims in the [patent] are not directed to an abstract idea, but that they instead implement a specific improvement in cellular networking. . . . [At trial, plaintiff's expert] testified that [the manual process of call switching] formerly performed by the switchboard operator 'is now being done by computers.'. . . [The expert's] testimony at trial was merely an analogy to assist the jury in understanding a complex process. It does not disturb the Court’s previous conclusion that the [patent] 'can only be performed on a computer.'. . . [T]he claims of the [patent] 'set out a method for achieving a specific goal -- obtaining information about a wireless terminal with a dynamic network address -- by applying the abstract idea of matching identifiers to retrieve information in the cellular network.' [Recent Federal Circuit decisions] do not affect that ruling."

Comcast Cable Communications, LLC et al. v. Sprint Communications Company LP et al, 2-12-cv-00859 (PAED August 16, 2017, Order) (Dubois, SJ)

Thursday, August 17, 2017

Failure to Provide Examiner With Copy of PTAB Decision Does Not Establish Inequitable Conduct​

The magistrate judge recommended granting plaintiffs' motion for summary judgment that their patents were not unenforceable for inequitable conduct or unclean hands because the failure to submit a copy of a disclosed PGR institution decision was not material. "Defendants’ position practically assumes there is some requirement to submit relevant PTAB decisions to the Examiner during prosecution. But Defendants do not cite any authority for this kind of requirement. Regardless, knowing that the Examiner was indeed aware of the decision, Defendants’ position assumes that Examiner is somehow incapable of finding the PTAB’s PGR Institution Decision on his own (otherwise the patentee’s duty of candor would have been discharged by informing the Examiner). . . . It would be difficult to understand how the USPTO could not obtain the necessary publicly available documents from its own administrative agency when needed."

Tinnus Enterprises, LLC et al v. Telebrands Corporation, 6-16-cv-00033 (TXED August 15, 2017, Order) (Love, MJ)

Wednesday, August 16, 2017

TC Heartland Applies to Unincorporated Associations, Such as LLCs​

The court transferred plaintiff's patent infringement action for improper venue and rejected plaintiff's argument that TC Heartland did not apply to limited liability companies like defendant. "The Supreme Court explicitly limited its analysis in [TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017)]: 'we confine our analysis to the proper venue for corporations' and reserved the applicability of its holding to unincorporated entities. . . . Unincorporated associations, such as limited liability companies, are generally treated like corporations for purposes of venue, whereby the 'residence' is the association’s principle place of business. Now that the Supreme Court has reinforced that 'residence' for corporate defendants in a patent infringement case is limited to the state of incorporation, [plaintiff] is hard-pressed to present a reason why unincorporated associations should be treated differently."

Maxchief Investments Limited v. Plastic Development Group, LLC (TWP2), 3-16-cv-00063 (TNED August 14, 2017, Order) (Phillips, USDJ)

Court-Appointed Expert Required to Determine Scope of IPR Estoppel​

The court ordered the parties to choose an expert to help determine whether defendant reasonably could have raised certain prior art in its petition for inter partes review. "In its [prior] opinion, the Court did not resolve whether [defendant] reasonably could have raised three prior art references in its IPR petition. The Court orders the parties to confer and choose an agreed, independent, court-appointed expert to offer an opinion on whether a skilled searcher conducting a diligent search reasonably would have discovered these references. The parties will split the cost of the expert evenly."

Oil-Dri Corporation of America v. Nestle Purina Petcare Company, 1-15-cv-01067 (ILND August 14, 2017, Order) (St. Eve, USDJ)

Tuesday, August 15, 2017

Offering Products for Sale Online Does Not Create a Regular and Established Place of Business​

The court granted defendants' motion to dismiss plaintiff's patent infringement action for improper venue because defendants did not have a regular and established place of business in the forum. "At the time of this action's filing, [one defendant] was a sole proprietorship operated by [another defendant], a Texas resident, and the three individual Defendants are each residents of Texas. There is no evidence that any of the Defendants reside in Virginia. Additionally, the fact that [the sole proprietorship defendant] has made its product available online through [an online marketplace] is not sufficient to create a regular and established place of business for the purposes of the patent venue statute."

Glasser v. Barboza et al, 1-17-cv-00322 (VAED August 11, 2017, Order) (Hilton, SJ)

Monday, August 14, 2017

Single Retail Store Sufficient to Create Regular and Established Place of Business​

The court denied defendant's motion to dismiss plaintiff's patent infringement action for improper venue because defendant failed to establish that it did not have a regular and established place of business in the forum. "[Defendant] does not dispute [plaintiff's] allegation it has a retail store in Delaware, it argues one retail store is not enough to establish a 'permanent and continuous presence.' We disagree; [defendant's] retail store is a permanent and continuous presence where it sells the alleged infringing technology to consumers on a daily basis. [Defendant] does not meet its burden of showing it does not have 'a regular and established place of business' in this District."

Prowire LLC v. Apple Inc., 1-17-cv-00223 (DED August 9, 2017, Order) (Kearney, USDJ)

Friday, August 11, 2017

Attendance at CES​ and Single Product Sale Do Not Create Regular and Established Place of Business in Nevada​

The court granted defendant's alternative motion to transfer plaintiff's patent infringement action to the District of Delaware because defendant did not have a regular and established place of business in the District of Nevada. "Plaintiff argues that based on Defendant’s attendances at the CES conferences, as well as one alleged infringing product sale to a Nevada resident, the Court has specific personal jurisdiction over [defendant], and therefore venue is proper in the District of Nevada. The Court disagrees that, under the patent venue statute, the alleged conduct is sufficient to make venue in Nevada appropriate. Additionally, [defendant] does not have a 'regular and established place of business' in Nevada. [Defendant's] only offices in the U.S. are in California. [Defendant] does not have any offices, employees, or land in Nevada."

Percept Technologies, Inc. v. Fove, Inc., 2-15-cv-02387 (NVD August 8, 2017, Order) (Boulware, II, USDJ)

Thursday, August 10, 2017

$30 Million Judgment Set Aside Due to Federal Circuit's Invalidation of Patent Under 35 U.S.C. § 101 in Separate Case​

The court granted defendant's motion for relief from a $30 million judgment because the Federal Circuit invalidated the patent in another case under 35 U.S.C. § 101. "The patent claims at issue in the [other] case which were invalidated by the Federal Circuit were and are the same claims at issue here. . . . Given that the Federal Circuit has conclusively adjudged the patent claims, which provide the very basis for [plaintiff's] $30 million judgment, to be invalid; the Court finds no just reason why such a judgment ought to stand when the claims 'are predicated on a nullity' and unenforceable to the rest of the world."

Prism Technologies, LLC v. Sprint Spectrum, LP, 8-12-cv-00123 (NED August 8, 2017, Order) (Strom, USDJ)

Wednesday, August 9, 2017

Personal Residence of CEO Does Not Establish Corporate Defendant’s Regular and Established Place of Business

​ The court granted defendant's motion to dismiss plaintiff's patent infringement action for improper venue because a CEO's residence was insufficient to establish defendant had a regular and established place of business in the forum. "[Defendant] asserts that it does not engage in business operations, own or lease office space, or maintain a public presence in this State, much less this District. . . . The gravamen of [plaintiff's] venue-based arguments appears to be that the mere presence of a high-level employee of a corporate defendant within a particular judicial district is sufficient to satisfy the rigors of Section 1400(b). Case law and common sense dictates that it is not, and [plaintiff] cites to no authority, either binding or persuasive, suggesting otherwise."

Prolacta Bioscience, Inc. v. Ni-Q, LLC et al, 2-17-cv-04071 (CACD August 7, 2017, Order) (Otero, USDJ)

Tuesday, August 8, 2017

Patents for Diagnosing Cardiovascular Disease Invalid Under 35 U.S.C. § 101

After the Federal Circuit found the parent patent to the patents-in-suit invalid, the court granted defendant's motion to dismiss because the asserted claims of plaintiffs’ cardiovascular disease diagnosis patent encompassed unpatentable subject matter and found that the claims were directed toward a law of nature. "According to plaintiffs . . . because the [patents] merely claim a laboratory method of 'detecting' [myeloperoxidase] activity, as opposed to a diagnostic method, they are not directed to patent ineligible subject matter. Plaintiffs' argument is overly superficial. . . . It is not a general laboratory technique for detecting MPO levels. Because the method is directed at detecting the correlation that is the natural law, rather than MPO levels generally, it is clear that the method is directed to the natural law. Accepting plaintiffs' argument to the contrary would permit artful drafters to recast any diagnostic patent as a laboratory method patent, frustrating the purpose of the natural law exception."

The Cleveland Clinic Foundation et al v. True Health Diagnostics LLC, 1-17-cv-00198 (VAED August 4, 2017, Order) (Brinkema, USDJ)

Patent for Diagnosing Neurotransmission Disorder Invalid Under 35 U.S.C. § 101

The court granted defendant's renewed motion to dismiss because the asserted claims of plaintiffs' neurotransmission disorder diagnosis patent encompassed unpatentable subject matter and found that the claims were directed toward a law of nature. "Contrary to Plaintiffs' argument, the [patent] is not a composition patent directed at the creation of the [laboratory-created molecule]. Rather, the patent is directed at a method for the diagnosis of a disease. Although the patented method uses man-made [laboratory-created molecules], the use of a man-made complex does not transform the subject matter of the patent. The focus of the claims of the invention is the interaction of the [laboratory-created molecule] and the bodily fluid, an interaction which is naturally occurring. . . . Counter to Plaintiffs' argument, because the patent focuses on this natural occurrence, it is directed to a patent-ineligible concept."

Athena Diagnostics, Inc. v. Mayo Collaborative Services d/b/a Mayo Medical Laboratories et al, 1-15-cv-40075 (MAD August 4, 2017, Order) (Talwani, USDJ)

Monday, August 7, 2017

Failure to Challenge Venue in First-Filed Motion to Dismiss Does Not Waive Venue If Defendant Supplements the Motion Prior to Decision​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017), the court denied defendant's motion to dismiss plaintiff's patent infringement action for improper venue but rejected plaintiff's argument regarding waiver because defendant's motion to dismiss under Rule 12(b)(6) remained pending. "There is authority supporting both sides of the waiver issue. But the Court need not choose a side, because [defendant's] original motion to dismiss is still pending. . . . [A] party that files a Rule 12(b) motion and fails to raise the issue of improper venue can avoid waiving that issue if the party supplements its motion 'before the . . . court [takes] up the matter.' To the extent that 'prompt' amendment is a requirement to avoid waiver, the Court finds that [defendant's] filing of a motion raising improper venue within a month of the Supreme Court’s decision in TC Heartland is sufficiently prompt as this case has not progressed past the pleading stage."

Lit v. Zazzle, Inc., 1-16-cv-07054 (ILND August 3, 2017, Order) (Durkin, USDJ)

Friday, August 4, 2017

PTAB Dicta Does Not Trigger IPR Estoppel​

The court denied plaintiff's motion to exclude invalidity contentions on the ground that inter partes review estoppel precluded defendant from asserting two individual references after the PTAB instituted review on the combination of those references. "[T]he PTAB explicitly considered in its final written decision whether a subset of the instituted grounds was properly before it, and determined that it was not. . . . Though the PTAB then noted in dicta that '[e]ven if we were to consider [one reference] alone, we find that [reference] does not render the challenged claims obvious,' it is clear the PTAB did not believe any subset of the instituted grounds were properly before it. Given the PTAB’s explicit statements of what was 'properly part of [the IPR]' and what was not, the Court concludes that . . . only the instituted ground (obviousness based on the combination of [the two references]) gives rise to estoppel . . . ."

Oil-Dri Corporation of America v. Nestle Purina Petcare Company, 1-15-cv-01067 (ILND August 2, 2017, Order) (St. Eve, USDJ)

Thursday, August 3, 2017

Seattle's Collective Bargaining Ordinance Immune from Sherman § 1 Challenge by Uber, Lyft, et al

The court granted defendant City of Seattle's motion to dismiss plaintiffs' Sherman § 1 claims because Seattle was protected by state action immunity. The court first found that Seattle's ordinance was clearly articulated as a state policy. "The statute [from which the ordinance derives its authority] specifically states that 'it is the intent of the legislature to permit political subdivisions of the state to regulate for hire transportation services without liability under federal antitrust laws.' . . . The Ordinance, by its terms, is an attempt to exercise the authority granted by [this and similar] state statutes to ensure safe and reliable for-hire and taxicab transportation services within the City of Seattle. . . . The statutes on which the City relies clearly delegate authority for regulating the for-hire transportation industry to local government units and authorize them to use anticompetitive means in furtherance of the goals of safety, reliability, and stability. The state 'affirmatively contemplated' that municipalities would displace competition in the for-hire transportation market, a situation which satisfies the 'clearly articulated and affirmatively expressed' requirement for state immunity."

Chamber of Commerce of the United States of America v. City of Seattle et al, 2-17-cv-00370 (WAWD 2017-08-01, Order) (Robert S. Lasnik)

The above decision was reported in Docket Navigator's new Antitrust Docket Report.  Get yours free today at https://compass.docketnavigator.com/request-access.

Lack of Physical Presence Alone Does Not Establish Lack of Regular and Established Place of Business​

Following the Supreme Court's decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514 (2017), the magistrate judge recommended denying defendant's motion to dismiss plaintiff's patent infringement action for improper venue because defendant did not establish that it did not have a regular and established place of business in the forum. "[Defendant's] underlying affidavit to support this assertion simply states, '[Defendant] does not directly or indirectly own business, sales, or distribution locations or other physical facilities in the Eastern District of Texas.' But lack of physical presence in the District is insufficient to establish improper venue. . . . By solely making statements regarding physical facilities in the District, [defendant] fails to set forth sufficient facts to support its argument that it lacks a regular and established place of business in the District."

Realtime Data LLC d/b/a IXO v. Exinda Inc., 6-17-cv-00124 (TXED August 1, 2017, Order) (Love, MJ)

Wednesday, August 2, 2017

Significant Disparity in Valuation of Complex Case Justifies "Bellwether" Trial on Subset of Asserted Patent Claims​

The court scheduled a "bellwether" trial on ten claims from three of defendant's patents due to the complexity of the case and the discrepancy in the parties' valuation of suit. "More than a dozen patents are asserted in this highly complex, highly contentious litigation. . . . [Defendant] contends that it is entitled to approximately $10 billion in reasonable royalties, while [plaintiff] counters that (assuming it is found to infringe valid patents, which it denies) it is liable only for around $10 million, a disparity of about 1000 times. . . . A three-patent liability and damages trial will have the virtue of giving the parties a near-term opportunity to obtain certainty -- in this Court, and then on appeal -- as to the value of a substantial subset of their disputes. . . . Whether this case will ever be amenable to settlement is an open question, but the Court believes that obtaining clarity on the value of one-third (even a non-representative one-third, if that is what it is) of the case is at least as likely to promote settlement as would an advisory damages verdict on the entirety of the case."

Intel Corporation v. Future Link Systems LLC, 1-14-cv-00377 (DED July 31, 2017, Order) (Stark, USDJ)

Tuesday, August 1, 2017

Failure to Challenge Venue Before TC Heartland Does Not Waive Venue Objection​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017), the court granted defendants' motions to transfer for improper venue and rejected plaintiffs' arguments that defendants waived their defense. "Federal Circuit precedent clearly foreclosed the venue defense. It would be inequitable to expect Movants to have objected to venue, especially where the Supreme Court had already denied certiorari on the exact question in [VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990)] itself. . . . Both reconsideration of certiorari and reconsideration of merits rulings are, strictly speaking, possibilities, so arguments directed to those results are, strictly speaking, available. But in fairness, neither possibility is great enough upon which to base a finding of waiver where circuit precedent forecloses an argument, particularly in cases such as this one where the relevant circuit is the only one with jurisdiction over the issue, such that even the possibility of a future circuit split does not exist."

CG Technology Development, LLC et al v. FanDuel, Inc., 2-16-cv-00801 (NVD July 27, 2017, Order) (Jones, USDJ)

Monday, July 31, 2017

Patents for Audio and Video Telecommunications Over a Hybrid Secured Network Not Invalid Under 35 U.S.C. § 101​

The court denied defendants' motion to dismiss on the ground that plaintiff’s patents for audio and video telecommunications over a hybrid secured network encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "[Plaintiff's] claims involve an unconventional technological solution (mixing media over hybrid networks) to a technological problem (transporting audio and video data together over low bit-rate networks). The solution includes the use of generic components. . . . However, the claims' limitations necessarily work together to operate in an unconventional manner to provide an inventive system and process to improve the collaboration of audio and video telecommunications. Therefore, the court concludes that [plaintiff's] claims direct a 'combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.'"

Meetrix IP, LLC v. Citrix Systems, Inc., et al, 1-16-cv-01033 (TXWD July 27, 2017, Order) (Yeakel, USDJ)

Friday, July 28, 2017

Prejudice Irrelevant to Waiver of Venue Analysis Under TC Heartland​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017), the court denied defendant's motion for judgment on the pleadings that venue was improper and rejected defendant's argument that there was no waiver because plaintiff was not prejudiced. "[Defendant] contends that 'waiver typically requires a showing of prejudice to the other party' and that '[plaintiff] will not be prejudiced by a change in venue given the substantial amount of work that remains' to be done in this case. . . . Courts have found prejudice to be a relevant consideration in determining whether waiver by implication has occurred, but [defendant] cites no apposite caselaw holding that prejudice is relevant to waiver under the express terms of Rule 12. The Court therefore declines to consider whether [plaintiff] would suffer prejudice from a transfer of venue in this case."

Mantissa Coporation v. Ondot Systems, Inc. et al, 4-15-cv-01133 (TXSD July 26, 2017, Order) (Palermo, MJ)

Defendant’s Counterclaim Asserting Venue in Forum Court Does Not Waive Objection to Venue​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514 (2017), the court granted defendant's motion to dismiss plaintiff's patent infringement action for improper venue and found that defendant did not waive its venue defense through its counterclaim. "[Plaintiff's] argument that [defendant] waived its improper venue defense by virtue of its Counterclaim is unpersuasive. [Defendant's] Counterclaim states, '[b]ased solely on [plaintiff's] filing of this action, venue is proper, though not necessarily convenient, in this District pursuant to at least 28 U.S.C. §§ 1391 and 1400.'. . . As long as [defendant] otherwise preserved its improper venue defense, its counterclaims -- directed at [plaintiff's] conduct and connections with the forum -- do not create a waiver."

Blue Spike, LLC v. Contixo Inc. et al, 6-16-cv-01220 (TXED July 26, 2017, Order) (Love, MJ)

Thursday, July 27, 2017

Plaintiffs Have No Obligation to Plead Specific Facts Supporting Venue​

The magistrate judge recommended denying defendant's motion to dismiss plaintiff's patent infringement action for improper venue and rejected defendant's argument that plaintiff's venue allegations were insufficient. "With the burden of establishing improper venue on the defendant, the plaintiff is under no obligation to plead specific facts supporting venue in the complaint. . . . [Defendant's] principal argument -- that [plaintiff's] venue allegations should be more detailed, 'to give Apple a fair and true opportunity to respond to these allegations' -- is therefore without merit. . . . [D]etailed factual venue allegations (as opposed to citation of the venue statute relied upon) are not required, and [defendant] has not submitted a single affidavit or item of evidence establishing that venue is improper."

Soverain IP, LLC v. Apple Inc., 2-17-cv-00207 (TXED July 25, 2017, Order) (Payne, MJ)

Wednesday, July 26, 2017

Defendant Did Not Waive Venue Objection by Failing to Contest Venue Prior to TC Heartland​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017), the court granted defendant's motion to amend its answer to contest venue and rejected plaintiff's argument that TC Heartland was not an intervening change of law that excused defendant's waiver of its objection to venue. "[Plaintiff] argues, and several district courts have found, that the defense of improper venue has always been available because other patent defendants would have 'ultimately succeeded in convincing the Supreme Court to reaffirm [Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957)], just as the petitioner in TC Heartland did.' But this would have taken some convincing, and until TC Heartland, no defendant succeeded in doing so in the 27 years following [VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (1990)]. To suggest that the defense of improper venue has always been available, and that TC Heartland did not effect a change in the law 'because it merely affirms the viability of Fourco[,]' ignores the significant impact of VE Holding and the patent bar’s reliance on the case for nearly three decades."

OptoLum Incorporated v. Cree, Inc., 2-16-cv-03828 (AZD July 24, 2017, Order) (Rayes, USDJ)

Tuesday, July 25, 2017

Defendant’s Repeated Discovery Abuse and Delay Tactics Warrant Terminating Sanctions, Treble Damages, Attorney Fees and Permanent Injunction

​ The court granted plaintiff's motion for terminating sanctions, including treble damages, attorney fees, and an injunction, for defendant's repeated disregard of court orders. "[Defendant] refused to produce documents relevant to the design, manufacture, and sale of the allegedly infringing products. . . . Defendant failed to produce documents reflecting sales of the allegedly infringing products, and produced a single page summary of sales along with heavily redacted invoices that made it impossible for [plaintiff] to identify customers. . . . [Defendant's] corporate representative failed to appear at the scheduled deposition. . . . In addition to the flagrant discovery abuse and contemptuous behavior exhibited by [defendant], the Plaintiff details in their Motion for Sanctions the numerous attempts by [defendant] to derail this litigation by repeatedly attempting to stay the proceedings, and by filing a last minute emergency motion for a protective order. . . . The undersigned agrees with [the magistrate judge's] assessment of the Defendant’s intentional obstructionist behavior. . . . The Court finds that Defendant . . . engaged in the above-described misconduct with the subjective intent to abuse the judicial process. . . . The Court finds the imposition of these sanctions to be necessary to adequately punish [defendant] for its wanton and repetitive disregard of this Court’s orders and as a consequence of its willful abuse of the discovery process. The imposition of lesser sanctions would underrepresent the seriousness of the offensive conduct."

TASER International, Inc. v. PhaZZer Electronics, Inc. et al, 6-16-cv-00366 (FLMD July 21, 2017, Order) (Byron, USDJ)

Monday, July 24, 2017

Defendant Precluded From Offering Deposition of Terminated Expert

​ The court granted plaintiff's motion in limine to preclude defendants from presenting the testimony by deposition of an expert whom they fired because it was unduly prejudicial. "'[D]epriving [plaintiff] of a key opportunity to challenge [the expert's] credibility' would be unfairly prejudicial . . . including [the expert's] role as an employee and then consultant to [defendants], his numerous instances testifying . . . and representations made as to the termination of his relationship with [defendants]. . . . Regardless of whether [defendants] may fairly be viewed as having 'procured' [his] absence, the Court agrees with [plaintiff] that 'it would be unfair to permit [defendants] to secure [the expert's] self-serving testimony . . . and thereafter fire him so that [defendants] can play his deposition to the jury and avoid the specter of his live testimony.' While [plaintiff] took extensive deposition testimony from [the expert] (evidently running to four days), [plaintiff] has had no opportunity to question him regarding his termination, and [defendants'] position would leave [plaintiff] with no fair opportunity to allow the jury to evaluate [his] credibility."

Greatbatch Ltd. v. AVX Corporation et al, 1-13-cv-00723 (DED July 20, 2017, Order) (Stark, USDJ)

Friday, July 21, 2017

Denial of Venue Allegations in Answer Preserves Defendant's Venue Challenge​

The court ordered additional briefing on defendant's motion for judgment on the pleadings of improper venue but found that defendant did not waive its venue defense. "Defendant sufficiently contested and preserved its objection to venue in its Answer. Defendant specifically stated in its answer regarding venue: '[Defendant] denies the allegations of paragraph 10 [referring to paragraph in Complaint asserting proper venue] of the Complaint.' The Magistrate Judge also noted a venue dispute in the Initial Case Management Order. . . . Whether certain acts or omissions operate as a waiver of venue accorded by the general venue statutes also waive venue conferred by the special venue statutes may depend upon the policy behind the specific venue provisions, such as the provision fixing the venue of patent-infringement actions. . . . Courts . . . deviate as to what conduct, even when a venue-challenge is initially raised in an answer, amounts to waiver. . . . In the instant case, the Court finds Defendant sufficiently objected to venue in its Answer and that Defendant took no actions thereafter that would constitute waiver."

JPW Industries, Inc. v. Olympia Tools International Inc., 3-16-cv-03153 (TNMD July 19, 2017, Order) (McCalla, USDJ)

Thursday, July 20, 2017

Presence of Third Party Distributor and Regular Product Sales in Forum State are Irrelevant to Determining Regular and Established Place of Business​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017), the court granted defendant's motion to transfer plaintiff's patent infringement action from the District of South Carolina to the District of Utah for improper venue because defendant did not have a regular and established place of business in South Carolina. "Where [defendant] was founded [Charleston, South Carolina], the identity of its South Carolina customers, and the volume of its sales to South Carolina customers are not relevant to the § 1400(b) venue analysis. The presence of a third-party distributing [defendant's] products also is irrelevant. . . . [Defendant] has a single, recently hired employee who does not make sales or interact with customers in South Carolina and who maintains no inventory in South Carolina. . . . Indeed, that [defendant] is not even licensed to do business in South Carolina is practically dispositive in determining that [defendant] does not conduct business in South Carolina through a 'permanent and continuous presence.'"

Hand Held Products Inc. d/b/a Honeywell Scanning & Mobility et al v. The Code Corporation, 2-17-cv-00167 (SCD July 18, 2017, Order) (Gergel, USDJ)

Failure to Challenge Venue In First Response to Complaint Did Not Waive Defendant’s Venue Objection​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017), the court granted defendant's motion to transfer plaintiff's patent infringement action from the District of South Carolina to the District of Utah for improper venue and found the defendant did not waive venue by failing to contest the issue in its first response to plaintiff's complaint. "Waiver . . . is an equitable doctrine. . . . Even if in a literal sense it may be said that the law on patent venue has not changed since 1957, it is reasonable that litigants believe TC Heartland is a change in the law. . . . If the present matter were at eve of trial . . . this Court would hold the venue challenge waived. But litigation in this matter has just begun. [Plaintiff] will not be prejudiced by litigating this matter for the first time in a proper venue. It would be inequitable to deny [defendant] the opportunity to seek proper venue, where no prejudice results to Plaintiff, simply because [defendant] missed the venue-challenge deadline by 34 days because it reasonably relied on what nearly every litigant thought was binding precedent governing patent litigation venue for the past 27 years."

Hand Held Products Inc. d/b/a Honeywell Scanning & Mobility et al v. The Code Corporation, 2-17-cv-00167 (SCD July 18, 2017, Order) (Gergel, USDJ)

Wednesday, July 19, 2017

Server Bandwidth Allocation Patent Not Invalid Under 35 U.S.C. § 101​

The magistrate judge recommended denying defendant's motion to dismiss on the ground that plaintiff’s bandwith allocation patent encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "Defendants argue the Asserted Claims cover the abstract idea of slowing a delivery by delaying a portion of the delivery, based, in part, on past deliveries. . . . The Asserted Claims are directed to transmitting related data, such as parts of file, at different effective rates, with the second effective rate always being slower than the first. Considered in that light, the claims’ 'character as a whole' is directed to the manner by which data is transmitted between two computer systems -- which is not a law of nature, a natural phenomena, or an abstract idea. And even if the underlying concept is well-known in unrelated fields, Alice's Step 1 requires the Court to focus on the claimed advance over the prior art; Defendants have not produced evidence on that point."

Preferential Networks IP, LLC v. AT&T Mobility, LLC d/b/a AT&T Mobility et al, 2-16-cv-01374 (TXED July 15, 2017, Order) (Payne, MJ)

Tuesday, July 18, 2017

Previously Waived Venue Objection Cannot be Revived Via Request to Amend Pleading​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514 (2017), the court denied defendant's motion to amend its answer to add a venue challenge. "In its original Answer to [plaintiff's] Complaint, [defendant] had stated that it 'does not dispute that venue is proper in this judicial district.'. . . [Defendant] thus waived its venue defense. [Defendant's] Motion for Leave, in effect, is an attempt to circumvent this waiver. However, the Advisory Committee Notes are clear that the defenses listed in Rule 12(b)(2)-(5) 'are of such character that they should not be delayed and brought up for the first time by means of an application to the court to amend the responsive pleading.'. . . Allowing [defendant] to amend its Answer to assert improper venue -- after [defendant] specifically stated that venue was proper in its original answer and failed to amend as a matter of course -- would also be unduly prejudicial to [plaintiff], as it would fundamentally alter the nature of the case."

Realtime Data LLC d/b/a IXO v. Barracuda Networks, Inc., 6-17-cv-00120 (TXED July 14, 2017, Order) (Love, MJ)

Monday, July 17, 2017

Computer Modeling and Electrical System Simulation Patents Invalid Under 35 U.S.C. § 101​

The court granted defendant's motion for summary judgment on invalidity because the asserted claims of plaintiff’s computer modeling and electrical system simulation patents encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "Despite their length and number, the asserted claims focus on gathering information, e.g., real-time and predicted data values, and analyzing and updating a model with that information, e.g., comparing the gathered data and evaluating the prediction deviations to update the model. . . . Further, the claims recite the idea as a function or result, rather than a particular way of performing that function or achieving that result. . . . The purported solution offered by the claims to the problem of outdated information is to update the model so that it fits more accurately within the real-world data. There is nothing in the claim to suggest that, once the models have been updated, the computer system will be any more efficient."

Power Analytics Corporation v. Operation Technology, Inc. et al, 8-16-cv-01955 (CACD July 13, 2017, Order) (Kronstadt, USDJ)

Friday, July 14, 2017

Preparation of Consolidated Financial Statements Does Not Demonstrate That Profits of Subsidiary Inexorably Flow to Parent Patentee​

The court granted defendant's motion for summary judgment that plaintiff was not entitled to damages based on its subsidiary's lost profits and rejected plaintiff's inexorable flow argument. "The Federal Circuit has not adopted the 'inexorable flow' theory. . . . The Federal Circuit has 'long recognized that the lost profits must come from the lost sales of a product or service the patentee itself was selling.' Here, [plaintiff's] claim for lost profits includes the lost profits of its wholly owned subsidiary. . . . That [plaintiff] consolidates its financial statements does not demonstrate an inexorable flow of profits from [the subsidiary] to [plaintiff], even if the inexorable flow theory provides a permissible basis to award lost profits."

Select Comfort Corporation v. Tempur Sealy International, Inc., 0-14-cv-00245 (MND July 12, 2017, Order) (Ericksen, USDJ)

Thursday, July 13, 2017

Rule 12 Motion to Dismiss Under 35 U.S.C. § 101 Waives Venue Challenge Despite Purported Reservation of Right to Challenge Venue in Defendant’s Answer​

The magistrate judge recommended denying defendant's motion to dismiss plaintiff's patent infringement action for improper venue and rejected defendant's argument that it preserved its venue challenge in its answer. "[Defendant] argues that it properly preserved its venue defense in its Answer because it denied that venue was proper and further stated: 'to the extent the U.S. Supreme Court decides that 28 U.S.C. § 1400(b) is the exclusive statute for determining venue in patent cases . . ., [defendant] reserves the right to amend its answer and/or seek to dismiss this case based on improper venue.'. . . While exceptions to Rule 12(g)(2)’s timing requirement exist for challenges related to failure to state a claim or lack of subject matter jurisdiction, there are no exceptions to Rule 12(g)(2) for venue. [Defendant] thus waived its improper venue defense by filing its Motion to Dismiss for Failure to State a Claim. . . . [Defendant] could have easily filed its 35 U.S.C. § 101 Motion as a Rule 12(c) Motion for Judgment on the Pleadings after the Supreme Court decision issued and any potential improper venue challenge was resolved. Instead, [defendant] proceeded to argue the merits of the case in bringing its first Motion to Dismiss under Rule 12(b)(6)."

Realtime Data LLC d/b/a IXO v. Carbonite, Inc. et al, 6-17-cv-00121 (TXED July 11, 2017, Order) (Love, MJ)

Wednesday, July 12, 2017

Attorney Fees Award in Exceptional Case Not Limited to Specific Instances of Misconduct​

The court awarded defendant over $1.8 million in attorney fees under 35 U.S.C. § 285 and rejected plaintiff's argument that defendant was not entitled to recover fees for the entire case. "[Plaintiff] ignores this Court’s extensive analysis and review of [plaintiffs] 'wholly inadequate' pre-suit investigation. . . . Indeed, [plaintiff] concedes that its assertion of the contributory infringement claim in its amended complaint was indefensible in light of its admission that [defendant's] accused products had substantial non-infringing issues. [Plaintiff's] attempt to reduce [defendant's] fee claim to one that is anchored to individual abuses of minor portions is inimical to the Court’s consideration of the totality of the circumstances. . . . When an exceptional case finding is supported by the 'totality of the circumstances,' it would be illogical to constrain a fee award to specific instances of misconduct."

In Re: Bill of Lading Transmission and Processing System Patent Litigation, 1-09-md-02050 (OHSD July 10, 2017, Order) (Beckwith, USDJ)

Tuesday, July 11, 2017

Failure to Challenge Venue in Initial Motion to Dismiss Waives Venue Challenge to Amended Complaint​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, No. 16-341, 137 S.Ct. 1514 (May 22, 2017), the magistrate judge recommended denying defendant's motion to dismiss plaintiff's patent infringement action for improper venue and found that plaintiff's filing of amended complaint did not excuse defendant's waiver. "[N]o facts regarding venue changed from when [plaintiff] filed its Original Complaint to its Amended Complaint. Further, [defendant] had already proceeded to argue the merits of the case in bringing its first Motion to Dismiss under Rule 12(b)(6). As the Fifth Circuit has noted, '[i]f a defendant proceeds first on the merits, as by a motion to dismiss for failure to state a claim . . . and thereafter attempts to challenge jurisdiction over his person or improper venue, the challenge should fail.'”

Diem LLC v. BigCommerce, Inc., 6-17-cv-00186 (TXED July 6, 2017, Order) (Love, MJ)

Failure to Allege Direction or Control or Joint Enterprise in Complaint Precludes Evidence of Joint Infringement at Trial​

The court granted defendant's motion in limine to preclude plaintiff from presenting evidence of joint infringement because plaintiff did not plead that theory in its complaint. "[Defendant] points out that [plaintiff's] complaint does not reference a claim for joint infringement. . . . [Plaintiff] responds that joint infringement is a theory of direct infringement that [defendant] has been aware of since [plaintiff's] infringement conditions, which asserted that [defendant], and its customers, directly infringed the asserted patents. . . . [Plaintiff's] allegations in its complaint do not state a plausible claim for relief under a theory of direct joint infringement. [Plaintiff] has alleged no facts demonstrating that either (1) [defendant] exercises direction or control over its customers’ performance or (2) that [defendant] and its customers form a joint enterprise. . . . Thus, [plaintiff] it should be excluded from offering argument, testimony, or evidence regarding such a claim of infringement."

Evicam International, Inc. v. Enforcement Video, LLC, 4-16-cv-00105 (TXED July 7, 2017, Order) (Mazzant, USDJ)

Monday, July 10, 2017

Walmart's Exceptional Litigation Conduct and Willful Trademark Infringement Warrant Award of $1.5M in Attorney Fees

In a trademark case, the court awarded plaintiff $1,554,028.45 for attorney fees against a retail superstore defendant because defendant's litigation conduct and willful infringement made the case exceptional. "First, there has been an unusual discrepancy in the positions taken by the parties in this matter. As previously noted at summary judgment, [defendant] decided to use the [asserted] mark despite being twice warned by its own attorneys not to do so and despite being aware of [plaintiff's] trademark registration. This fact alone marks this case as unusual and exhibits the discrepancy between the parties' positions in this matter. Despite this holding at summary judgment, [defendant] continued to dispute the willfulness of its infringement in all following stages of litigation. [Defendant] also continually advanced remarkable contentions throughout this litigation, such as the argument that the [asserted] mark was worth 'zero' despite the Court's prior holding that that [defendant's] competing use of the [asserted] mark created a likelihood of confusion and that the mark was commercially strong. This case also presents a particular need for compensation and deterrence."

Variety Stores, Inc. v. Wal-Mart Stores, Inc., 5-14-cv-00217 (NCED 2017-07-06, Order) (Terrence W. Boyle)

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Plaintiff's Pattern of Filing Serial Litigation and Voluntarily Dismissing Cases Involving § 101 Challenge Justifies Award of Attorney Fees​

Following a dismissal and covenant not to sue while defendant's 35 U.S.C. § 101 motion was pending, the court granted defendant's motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation tactics were unreasonable. "Although the Court agrees that filing a large number of cases does not necessarily mean Plaintiff litigated in an unreasonable manner, it nevertheless finds troubling that Plaintiff has repeatedly dismissed its own lawsuits to evade a ruling on the merits and yet persists in filing new lawsuits advancing the same claims. Specifically, Plaintiff has filed similar lawsuits (more than 90 for [two patents-in-suit] and more than 400 for [another patent]) against countless defendants. Patent litigation is expensive, so it is unsurprising that the vast majority of accused infringers choose to settle early rather than expend the resources required to show a court that the Patents-in-Suit fail under § 101. When the few challenges do occur, however, they are promptly met with voluntary dismissals with prejudice, as in this case. . . . [T]he Court finds a clear pattern of serial filings with the goal of obtaining quick settlements at a price lower than the cost of litigation and the intent to litigate even when Plaintiff should have realized it had a weak litigation position."

Shipping and Transit, LLC v. Hall Enterprises, Inc., 2-16-cv-06535 (CACD July 5, 2017, Order) (Guilford, USDJ)

Friday, July 7, 2017

Defendants' Ongoing Participation in Litigation Process Waives Venue Objection​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017), the magistrate judge recommended denying defendants' motion to dismiss plaintiffs' patent infringement action for improper venue because defendants waived the issue through their litigation conduct. "[N]ot only was Defendants’ venue challenge belatedly made, during the time at which [defendant] repeatedly admitted venue was proper, the Court had conducted lengthy proceedings on Plaintiffs’ motion for a preliminary injunction and granted the preliminary injunction. Throughout those injunction proceedings, [defendant] never once challenged venue. Since that time, the Court has conducted numerous additional proceedings, including claim construction proceedings, contempt proceedings, several discovery related motions, and pretrial motions. [Defendant] consented to all of these proceedings without objecting to venue. Accordingly, even if [defendant's] defense had not been waived under Rule 12, which it has, [its] continuous and consistent conduct in this action constitutes waiver."

Tinnus Enterprises, LLC et al v. Telebrands Corporation et al, 6-15-cv-00551 (TXED July 5, 2017, Order) (Love, MJ)

Defendants' Motion for Judgment on the Pleadings Under 35 U.S.C. § 101 Waives Venue Objection

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017), the court denied defendants' motion to dismiss plaintiff's patent infringement action for improper venue because defendants waived their initial venue challenge through their litigation activity, particularly by seeking to invalidate the patent-in-suit under 35 U.S.C. § 101. "Defendants denied that venue was proper in this District in their answer. . . . Nevertheless, 'merely filing an initial venue objection does not preclude subsequent waiver of the objection.'. . . Defendants have litigated the consolidated action in this Court for approximately a year, including by serving invalidity contentions, filing two motions to stay, filing a motion for judgment on the pleadings, and participating in claim construction. . . . The Court finds particularly important the fact that Defendants filed a motion for judgment on the pleadings seeking to invalidate the [patent] under 35 U.S.C. § 101. . . . [F]iling a motion for judgment on the pleadings on the issue of invalidity prior to filing a motion to dismiss for improper venue 'constitutes a tacit admission on the part of the movant that the court has personal jurisdiction, that venue is properly laid there, and that the court should dispose of the case on its merits.'"

InfoGation Corp. v. HTC Corporation et al, 3-16-cv-01902 (CASD July 5, 2017, Order) (Huff, USDJ)

Thursday, July 6, 2017

Multimedia Network System Patent Invalid Under 35 U.S.C. § 101​

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s multimedia network system patent encompassed unpatentable subject matter and found that the claims lacked an inventive concept. "Considered individually, each step in the [patent] is well-understood, routine, and conventional. For instance, it is nothing new for servers and clients to send requests to each other. Similarly, it is not inventive to require authentications to access content. Nor is it any more inventive to incorporate asymmetric/public-key encryption into an authentication system. . . . The only possible 'non-conventional and non-generic arrangement' in the [patent] is the combination of asymmetric encryption with content licenses. But combining those two concepts is not new. Indeed, the [patent] references two earlier patents that both consider combining asymmetric encryption with licenses to enforce usage restrictions."

Digital Media Technologies, Inc. v. Amazon.com, Inc., 4-16-cv-00244 (FLND July 3, 2017, Order) (Walker, USDJ)

Wednesday, July 5, 2017

Broad Venue Discovery Authorized to Determine Existence of Regular and Established Place of Business

​ Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Group Brands, LLC, (2017), the court partially granted plaintiff's motion to compel venue-related discovery as relevant and proportional to the needs of the case. "Defendant must disclose its total product sales in Oregon, with one exception. . . . [I]nformation on its direct internet sales is unlikely to lead to relevant evidence on whether Defendant has a 'regular and established place of business' in Oregon. . . . Defendant must disclose the activities of third-party vendors of Defendant's products, and Defendant's relationships with these vendors, because such information could lead to relevant evidence. . . . [I]nformation on the activities of Defendant's agents, whether the agent is based in Oregon or not, [and] information on professional services in Oregon retained by Defendant could lead to relevant evidence and is proportional to the needs of the case. . . . Defendant must disclose any substantial amount of personal property it owns, leases, or manages in Oregon, including marketing materials, demonstration equipment, and product literature. . . . Defendant's leases of trade show booths or conference spaces could lead to relevant evidence and should be produced. . . . [Phone number and address] listings created by third parties independently of Defendant are not discoverable, but Defendant must disclose any other listings that it directed."

Nike, Inc. v. Skechers USA, Inc., 3-16-cv-00007 (ORD June 30, 2017, Order) (Papak, MJ)

Monday, July 3, 2017

Employing Exclusive Sales Representative Within District Sufficient to Establish Regular and Established Place of Business

Following the Supreme Court's decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017), the court denied defendant's motion to transfer for improper venue and found that defendant had a regular and established place of business in the forum through its employment of a sales representative in the forum. "At the time this case was filed, [defendant's sales representative in the forum] worked exclusively for [defendant] as a sales executive in this District. [The sales representative] had been working full-time for [defendant] from within the Eastern District of Texas for over seven years. [Defendant] paid [him] a salary and maintained [his] compensation plan online through its human resources department, which outlined his territory and assignments. . . . [Defendant] provided [its sales representative] with 'administrative support' from [defendant's] Minnesota office such that [he] could continue working from his office in the Eastern District of Texas. Under this arrangement, [he] contacted and sold products to customers using an 'office' telephone number with an Eastern District of Texas area code. . . . Technology has revolutionized the way businesses operate and the way consumers interact with those businesses. . . . This important shift has been recognized by many courts."

Raytheon Company v. Cray, Inc., 2-15-cv-01554 (TXED June 29, 2017, Order) (Gilstrap, USDJ)

Judge Gilstrap Recognizes Four-Factor Test for Determining Regular and Established Place of Business Under 28 U.S.C. § 1400(b)

In determining whether defendant maintained a regular and established place of business in the forum for purposes of 28 U.S.C. § 1400(b), the court recognized a four-factor approach consisting of physical presence, defendant's representations, benefits received, and targeted interactions. "Since the Supreme Court’s decision in [TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017)], this Court has received a number of motions to dismiss or transfer based on improper venue. It is evident from these motions, and their subsequent briefing, that there is uncertainty among the litigants regarding the scope of the phrase 'regular and established place of business.' . . . [T]his Court now attempts to provide guideposts to point the venue analysis in a single coherent direction. . . . First, the Court considers the extent to which a defendant has a physical presence in the district, including but not limited to property, inventory, infrastructure, or people. At the most basic level, a retail store, warehouse, or other facility in the district weighs strongly in favor of finding a regular and established place of business. However . . . the lack of a physical building in the district is not dispositive. . . . Other forms of physical presence may also help support a finding of a regular and established place of business, such as inventory or property in the district[,] [and] the presence of equipment or infrastructure that is owned (or leased) by a defendant and used to provide services to customers. . . . Additionally, courts have considered the presence of employees in the district when determining whether a defendant has a regular and established place of business. . . . Second, the Court looks at the extent to which a defendant represents, internally or externally, that it has a presence in the district. . . . Third, the Court considers the extent to which a defendant derives benefits from its presence in the district, including but not limited to sales revenue. . . . Finally, the Court looks at the extent to which a defendant interacts in a targeted way with existing or potential customers, consumers, users, or entities within a district, including but not limited to through localized customer support, ongoing contractual relationships, or targeted marketing efforts."

Raytheon Company v. Cray, Inc., 2-15-cv-01554 (TXED June 29, 2017, Order) (Gilstrap, USDJ)

Friday, June 30, 2017

Unpatentability Under 35 U.S.C. § 101 Cannot be Determined Solely From Provisional Application​

The court denied defendants' motion for summary judgment on the ground that plaintiff’s oxygen system patent encompassed unpatentable subject matter because defendants relied on a provisional application to establish that the asserted claims were directed toward an abstract idea. "Much of Defendants’ Motion for Partial Summary Judgment is based upon the incorrect premise that this Court should only look to the provisional patent application to determine abstractness. As a fatal flaw, Defendants point to no legal basis for such a premise, and this Court has not independently identified any such basis. . . . [I]t would seem that Defendants concede that the patent was in fact not issued for an abstract idea but rather for 'a very specific system.'"

HVLPO2, LLC v. Oxygen Frog, LLC et al, 4-16-cv-00336 (FLND June 27, 2017, Order) (Walker, USDJ)

Thursday, June 29, 2017

TC Heartland Does Not Qualify as Intervening Change of Law Excusing Waiver of § 1400(b) Venue Challenge​

Following the recent Supreme Court decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017), the court denied defendant's motion to dismiss or transfer plaintiff's patent infringement action for improper venue two months before trial because TC Heartland was not an intervening change in law. "[Defendant's] argument . . . appears to be that following the decision in [VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990)] in 1990 up until the Supreme Court decided TC Heartland in May of 2017, the highest authority available had deemed [Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957)] overridden by congressional action, and accordingly the Supreme Court’s reaffirming of Fourco constituted a change of law. . . . [E]xcept where congressional abrogation of a Supreme Court decision is express, 'only [the Supreme] Court may overrule one of its precedents' -- whether through its own opinion or recognition of congressional override -- and until that occurs, Fourco is and still was the law. . . . The intervening twenty-seven years may have created reliance on VE Holding by litigants, including [defendant], but that 'does not change the harsh reality' that a party could have 'ultimately succeeded in convincing the Supreme Court to reaffirm Fourco, just as the petitioner in TC Heartland did.'”

iLife Technologies, Inc. v. Nintendo of America, Inc., 3-13-cv-04987 (TXND June 27, 2017, Order) (Lynn, USDJ)

Wednesday, June 28, 2017

Failure to Challenge Venue Prior to TC Heartland Does Not Waive Venue Objection​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341 (May 22, 2017), the court granted defendants' motion to modify their pending motion to dismiss under Rule 12(b)(6) to add a ground of improper venue and found there was no waiver by failing to raise the issue in their original motion. "[Plaintiff] contends an argument for an improper venue was available to Defendants, and has been since 1957 when the Supreme Court announced [Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957)]. A defendant waives the defense of improper venue if it was available but the defendant omitted it from its responsive pleading or from a motion made before its responsive pleading. . . . TC Heartland abrogated approximately 27 years of patent law precedent. . . . For the first time in 27 years, a defendant may argue credibly that venue is improper in a judicial district where it is subject to a court’s personal jurisdiction but where it is not incorporated and has no regular and established place of business. Defendants could not have reasonably anticipated this sea change, and so did not waive the defense of improper venue by omitting it from their initial pleading and motions."

Westech Aerosol Corporation v. 3M Company et al, 3-17-cv-05067 (WAWD June 21, 2017, Order) (Leighton, USDJ)

Tuesday, June 27, 2017

New Trademark, Copyright and Antitrust Docket Reports Now Available (Free Through 2017)!

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Defendant’s Authorization to Conduct Business in Texas, Listing Texas Distributors on Website, and Selling Products in Texas Insufficient to Establish Texas Venue​

Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514 (2017), the court granted defendants' motion to dismiss plaintiff's patent infringement action for improper venue because plaintiff failed to present sufficient evidence that defendants had a regular and established place of business in the forum. "'The fact that [defendants] are authorized to do business in Texas is not controlling and will not establish the [§ 1400(b)] requirement.' Nor does defendants' website allowing viewers to access a list of San Antonio/Austin distributors provide venue under the patent infringement statute. Finally, the fact that defendants sell their activity trackers to distributors in Texas Western will not establish venue. . . . Therefore, the kind and degree of defendants’ contacts do not support a finding that defendants have a permanent and continuous presence which shows a regular and established place of business in the Western District of Texas."

LoganTree v. Garmin International, Inc. et al, 5-17-cv-00098 (TXWD June 22, 2017, Order) (Biery, USDJ)

Monday, June 26, 2017

Assignment Requiring Plaintiff to Pay Transferor 100% of Gross Proceeds From Litigation Does Not Deprive Plaintiff of Standing

The court denied defendant's motion to dismiss plaintiff's patent infringement action for lack of standing because plaintiff obtained substantial rights to the patents-in-suit through its assignment from the prior owner even though it had to surrender 100% of litigation and licensing proceeds to the prior owner. "[Plaintiff's] Agreement is nearly identical to the [prior owner's] Agreement. The only difference is that the transferee must pay 100% of the gross proceeds from litigation and licensing to the transferor, rather than 50% in the [prior owner's] Agreement. Again, this is compensation for the transfer that does not reserve any control for the assignor over the Asserted Patents or their use. . . . Defendant argues that Plaintiff has no economic interest because he must surrender the gross proceeds from the litigation to [the prior owner]. However, this does not diminish Plaintiff’s rights to the Asserted Patents for the purpose of standing. Any infringement of Plaintiff’s exclusive right to make and sell the patented products would still cause Plaintiff to suffer a justiciable injury, regardless of whether he retains any damages awarded for that injury."

Agarwal v. Buchanan d/b/a Jeff Buchanan Tree Services d/b/a Buchanan Industries d/b/a Wood Chipper Safety Shield, 2-17-cv-02182 (CACD June 22, 2017, Order) (O'Connell, USDJ)

Friday, June 23, 2017

Eve of Trial Supplement to Damages Expert Report Justifies Monetary Sanctions Award​

The court sanctioned plaintiffs for producing an unsolicited addendum to their damages expert report which required defendants to file a motion to strike. "The Court has now three times granted Defendants’ Daubert Motions on the issue of [the expert's] estimation of indirect sales in the United States to prove damages for indirect infringement. . . . Given that the Court’s orders have been entirely clear and [plaintiff] has provided no justifiable explanation for why [the expert] impermissibly supplemented his report without leave of Court on the eve of trial, thereby forcing [defendants] to file the instant emergency motion, the Court finds that fees for the motion are appropriately awarded to [defendants]."

Eidos Display, LLC et al v. AU Optronics Corporation et al, 6-11-cv-00201 (TXED June 21, 2017, Order) (Love, MJ)

Thursday, June 22, 2017

Failure to Timely Challenge Venue Before TC Heartland Waives Challenge Despite Reservation of Rights​

The court denied defendants' motion to transfer venue based on the recent Supreme Court decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017), because defendants waived their objection to venue. "[N]either [defendant] affirmatively sought dismissal or transfer because of the lack of 'resid[ence]' or the lack of a 'regular and established place of business' under § 1400(b) as interpreted by [Fourco Glass Co. v. Transmirra Prod. Corp., 353 U.S. 222], until . . . less than two months from trial. . . .The Court need not reach Defendants’ argument that a change in law constitutes an exception to waiver under Rule 12(h)(1)(A) because the Supreme Court’s decision in TC Heartland does not qualify. . . . 'TC Heartland does not qualify for the intervening law exception to waiver because it merely affirms the viability of Fourco.' [One defendant] argues that Defendants 'each expressly reserved their rights to challenge venue in the event TC Heartland changed the law,' but a defendant cannot state that it does not dispute venue while reserving the ability to later contest it. To conclude otherwise would undermine the purpose of Rule 12(g) and (h) to promote efficiency and finality."

Elbit Systems Land and C4I Ltd. et al v. Hughes Network Systems LLC et al, 2-15-cv-00037 (TXED June 20, 2017, Order) (Payne, MJ)

Wednesday, June 21, 2017

Representative Infringement Contentions Stricken Without Leave to Amend For Failure to Show Common Characteristics​

The court granted plaintiff's motion to strike defendants' infringement contentions based on representative accused products as insufficient. "[T]he patent owners have not adequately shown that their purportedly representative claims in fact share the same critical characteristics as other accused products. . . . [T]he patent owners will be strictly limited to accusing products that truly fit the theories described in their infringement contentions. The patent owners do not have leave to amend to add explanations about how the charted accused products are representative of other accused products. Nor do they have leave to amend to chart additional 'representative' products."

Comcast Cable Communications, LLC v. OpenTV, Inc. et al, 3-16-cv-06180 (CAND June 19, 2017, Order) (Alsup, USDJ)

Tuesday, June 20, 2017

Nature of NPE Plaintiff’s Business Does Not Waive Privilege as to Patent Valuation Analysis​

The court denied defendant's motion to compel the production of documents and rejected defendant's argument that plaintiff's non-practicing entity status precluded it from asserting privilege over ongoing business valuations of the patents-in-suit. "[Defendant] asserts that [plaintiff] cannot assert privilege over these documents due to the nature of its business: [plaintiff] only acquires and then licenses or litigates patents, so the information relates only to a business purpose. But the nature of [plaintiff's] business should neither preclude it, as a general matter, from asserting attorney-client privilege nor automatically shield all of its patent-related documents."

Polaris Innovations Limited v. Kingston Technology Company, Inc., 8-16-cv-00300 (CACD June 16, 2017, Order) (Oliver, MJ)

Monday, June 19, 2017

Collection of Working Group Papers Qualifies as a Single Prior Art Reference​

The court denied plaintiff's motion to strike portions of defendants' invalidity contentions concerning their assertion that a set of working group papers qualified as a single prior art reference, but ordered defendants to provide more specific invalidity contentions. "Plaintiff contends that this reference contains twenty-three documents that are not a 'prior art instrumentality.' . . . Defendants argue that the close relationship of the documents is demonstrated in that they are all seeking to solve the same technical problem, they are submitted using the same common format and numbering for the 3GPP working group, they were submitted by members of the group for a common purpose, and they were developed within a relatively small time frame. . . . [A]s a general matter, a network, or network solution/procedure, can constitute a single prior art reference and may include associated references that describe that network and/or solution. The fact that a network could constitute a single prior art instrumentality particularly makes sense where the allegations of infringement read onto specific network procedures as they do here. . . . While the Court finds that Defendants will be allowed to use these documents as a single reference, the Court finds that Defendants shall supplement their contentions to specifically identify the who, what, why, when, and where of the solution they seek to sufficiently put Plaintiff on notice."

Iridescent Networks, Inc. v. AT&T Inc. et al, 6-16-cv-01003 (TXED June 15, 2017, Order) (Love, MJ)

Friday, June 16, 2017

Economic Prejudice From 8 Years of Product Sales Supports Equitable Estoppel of Infringement Claim​

The court granted in part defendants' motion for summary judgment and found that plaintiff's claims for one of its boot design patents was barred by equitable estoppel because defendants suffered economic prejudice from plaintiff's misleading conduct. "In their [response] to [plaintiff's cease and desist letter], Defendants offered to completely cease selling the [accused] boot and to pay $1,500 to [plaintiff], which was based on profits from selling 240 [accused] boots. Had [plaintiff] accepted the offer, this would have been the extent of Defendants’ loss (or at least something close to it). Now, six years later, Defendants have sold over 750,000 knit boots, a substantial portion of which form the basis of [plaintiff's] damages claim. . . . [H]ad [plaintiff] accepted Defendants’ offer to cease selling the product [8 years ago], the time and money Defendants subsequently invested in the [accused] boot could have been spent on other products or business ventures."

Deckers Outdoor Corporation v. Romeo and Juliette, Inc. et al, 2-15-cv-02812 (CACD June 13, 2017, Order) (Wright, USDJ)

Thursday, June 15, 2017

Email Monitoring and Tracking Patents Not Invalid Under 35 U.S.C. § 101 at Pleading Stage​

The court denied defendant's motion to dismiss on the ground that plaintiff’s email monitoring and tracking patents encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "[Defendant's] abstract idea challenge is without merit as there is no credible argument that a patent on a system and methods for 'monitoring website activity' claims a longstanding commercial practice. The functionalities claimed in the patents were not imaginable before the Internet. Even after email came into use, the functionality claimed in the patents did not exist until plaintiff’s invention solved the technical problems associated with how email normally worked. . . . [T]he patents-in-suit overcame the problem of finding out whether a user opened an email or clicked on a link within the email. Those are problems confined to the Internet, and the patents provide Internet-based solutions."

InsideSales.com v. SalesLoft, 2-16-cv-00859 (UTD June 13, 2017, Order) (Kimball, SJ)