Tuesday, January 31, 2017

Top Petitioners, Patentees, and Firms in the PTAB in 2016

For comparison, check out the 2015 numbers here.

Discovery Abuses Warrant Monetary Sanctions Against Defendant and Lead Counsel

Following settlement of the case, the court granted in part plaintiff's motion to find defendants in contempt for failing to comply with court's order compelling further document production and supplemental disclosures and imposed monetary sanctions, jointly and severally, against defendants and their lead counsel. "Whether the non-infringing alternatives information would have decidedly impacted Plaintiffs case is unimportant; the Court's concerns are Defendant's noncompliance and lack of transparency. . . . It is clear that Defendant failed to disclose crucial documents 'at the right time,' or indeed, at all, before the Court demanded an explanation for Defendant's actions. . . . Trial-related sanctions are inappropriate now. However, the Court finds that other sanctions are warranted 'to ensure the proper functioning of judicial process.'. . . It is impossible from the record to determine who among Defendant's employees and lead counsel were at fault for the discovery violations and to what degree. It is not the Court's duty to unravel the details and determine the actors' degrees of responsibility. What occurred is, at bottom, sanctionable conduct for which Defendant and its principal counsel are both responsible. . . . There was apparently a disconnect among Defendant's lead counsel: some counsel were more successful in locating documents than others, and there may have been disagreement regarding which documents were discoverable. There may well have been a similar disconnect between Defendant and its lead counsel. Significant discovery abuses resulted from these miscommunications. . . . The Court hereby imposes sanctions jointly and severally against Defendant . . . and its principal firm . . . in an amount approved by the Court."

Vir2us, Inc. v. Invincea, Inc. et al, 2-15-cv-00162 (VAED January 27, 2017, Order) (Morgan, SJ)

Monday, January 30, 2017

Counsel Not Liable for Attorney Fees Award Under 35 U.S.C. § 285​

Following summary judgment of noninfringement, the court granted defendant's motion for attorney fees under 35 U.S.C. § 285, but denied defendant's motion to hold plaintiffs' counsel jointly and severally liable for those fees. "[Defendant] seeks to hold Plaintiffs’ attorneys jointly and severally liable for attorneys’ fees under § 285; however, [defendant] cites no authority for its request, and both the text of the statute and applicable authority indicate the contrary. Furthermore, Plaintiffs’ attorneys brought this suit two years before the Supreme Court’s decision in [Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014)], which significantly altered the legal landscape concerning fee-shifting under § 285."

Technology Properties Limited, LLC v. Canon, Inc. et al, 4-14-cv-03640 (CAND January 26, 2017, Order) (Wilken, USDJ)

Friday, January 27, 2017

Non-Party Owner of Undercapitalized Plaintiff Held Personally Liable for 35 U.S.C. § 285​ Attorney Fees Award​

Following summary judgment of noninfringement and post-judgment discovery regarding plaintiff's real party in interest, the court granted defendant's motion for attorney fees under 35 U.S.C. § 285 and found that those fees could be imposed on non-parties. "[Plaintiff] is the first level of two shell corporations which were intended to shield the real actor . . . from personal liability. The Court is persuaded that [the sole shareholder of plaintiff's parent company] and those in active concert with him exploited the corporate form to operate largely in secret and to insulate the true party in interest from the risk associated with dubious infringement suits—that risk being fee shifting under Section 285. . . . [T]he Court concludes that the statutory text, current case law, and statutory purpose behind the Patent Act and Section 285 all support assessing direct Section 285 liability against non-parties, so long as (1) the actor is responsible for conduct that makes the case exceptional, (2) the actor is afforded due process, and (3) it is equitable to do so. . . . [I]f we assume that Section 285 permits recovery only against the originally named non-prevailing party, then the law has perversely incentivized third parties to act in ways that stand out from established litigation norms. This would foster the very type of litigation that the statute was meant to deter. . . . The lack of deterrence caused by empty shell plaintiffs negates the incentive to vigorously defend against meritless claims when there are no practical means by which to recover costs. . . . [T]he Court is persuaded that [this case] never would have been filed but for [the sole shareholder's] calculated assumption that he could insulate himself personally from the possible application of Section 285."

Iris Connex, LLC v. Dell Inc., 2-15-cv-01915 (TXED January 25, 2017, Order) (Gilstrap, USDJ)

Thursday, January 26, 2017

Plaintiff’s Use of Litigation as Fishing Expedition Justifies Attorney Fees Award Under 35 U.S.C. § 285​

The court granted defendants' motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation positions were baseless and the its litigation tactics were exceptional. "[T]here is substantial reason to believe that [plaintiff] initiated this litigation to embark on a fishing expedition into Defendants' operations and proprietary customer lists for the purpose of developing direct patent infringement claims against their customers. In other words, there is substantial reason to believe that [plaintiff] did not institute this litigation for a proper purpose, but rather as a means to obtain evidence of infringement against Defendants' customers it could not otherwise obtain because it did not have a good-faith belief that Defendants' customers were actually infringing the [patent-in-suit]. Indeed . . . [plaintiff] received repeated assurances from Defendants' customers that infringement of the patent was not occurring."

In Re: Bill of Lading Transmission and Processing System Patent Litigation, 1-09-md-02050 (OHSD January 24, 2017, Order) (Beckwith, USDJ)

Wednesday, January 25, 2017

File Access Patent Not Ineligible Under 35 U.S.C. § 101​

The court denied defendants' motion to dismiss on the ground that plaintiff’s computer file access patent encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "[T]he claimed invention is not merely an abstract idea, but rather the [patent] claims an improved method for accessing files in a data storage system of a computer system. . . . [T]he claimed invention is directed at solving a challenge unresolved by the prior art in which a search in a hierarchical directory structure did not guarantee a result. The claimed invention addressed that concern with the mechanism of allowing the user to search only those terms that are actually contained in the file description, thereby eliminating the possibility that the user may mistype or misspell a search term. . . . The description of the invention and the claims created a technological solution to the problems that had existed with conventional file access methods. Because the Court finds that the patent claims are directed to a specific improvement to computer functionality, the claims are not directed to an ineligible abstract idea."

Speed Track, Inc. v. Amazon.com, Inc. et al, 4-09-cv-04479 (CAND January 23, 2017, Order) (White, USDJ)

Tuesday, January 24, 2017

Patent for Manufacturing Custom Dental Crowns Not Ineligible Under 35 U.S.C. § 101​

The magistrate judge recommended denying defendants' motion to dismiss on the ground that plaintiff’s patent for manufacturing custom dental crowns encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "[T]he [patent-in-suit] describes a physical process for collecting information about a patient’s mouth, preparing a three-dimensional model of the mouth, scanning the model, and on the basis of data collected from this process, manufacturing the custom crown coping. . . . Defendants isolate two steps from the [patent] claims, the combination of which is allegedly the point of novelty, and ignore the remainder of the claims. Contrary to Defendants assertion, the [patent] claims are directed to a method of manufacturing physical crown copings for prosthodontics. . . . It is true as Defendants suggest that the claims, at least on their face, appear to include certain steps that could be construed as computerized steps, and thus steps that could arguably be carried out mentally. But Defendants cite no authority for the proposition that a claim reciting a method of manufacturing becomes abstract simply because it includes modeling or involves the use of computerized data."

Zircore, LLC v. Straumann Manufacturing, Inc. et al, 2-15-cv-01557 (TXED January 20, 2017, Order) (Payne, MJ)

Monday, January 23, 2017

IPR Estoppel Applies to Unpatentability Grounds Denied Institution as Redundant​

The court granted in part plaintiffs' motion to strike portions of defendants' invalidity contentions following inter partes review. "As to plaintiffs’ assertion that defendants are estopped from raising obviousness over the combination of [two prior art references], the Court disagrees. As [Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293 (Fed. Cir. 2016)] dictates, the PTAB did not institute on this ground and, therefore, defendants are not estopped from raising the same invalidity argument in this litigation. [Defendant] is estopped, however, from raising the obviousness combination of [two different prior art references]. Because the PTAB did not institute on this exact ground, instead finding it redundant in light of the instituted grounds of [other references], the question is whether defendants 'raised or reasonably could have raised' obviousness over [two references] during the IPR proceedings. The Court finds that defendants raised, or could have raised, these grounds in the IPR proceedings, as the combination of [the two references at issue] is simply a subset of the instituted grounds."

Verinata Health, Inc., et al v. Ariosa Diagnostics, Inc., et al, 3-12-cv-05501 (CAND January 19, 2017, Order) (Illston, USDJ)

Arguments Supporting Motion to Stay Pending IPR Do Not Judicially Estop Invalidity Arguments​

The court denied plaintiffs' motion to strike portions of defendants' invalidity contentions based on judicial estoppel following inter partes review. "Plaintiffs contend that because [the petitioner defendant] argued numerous times before this Court that pending IPR petitions would simplify this litigation through statutory estoppel or invalidation, that [defendant] derived an unfair advantage and should be estopped from raising nearly all of its invalidity arguments. . . . Because [defendant] argued to the Court that the IPR proceedings stood to simplify this litigation through the application of statutory estoppel, plaintiffs seek to prevent [defendant] from now arguing that a narrower estoppel applies post-IPR. The Court finds plaintiffs’ judicial estoppel argument unpersuasive. The Court sees nothing 'clearly inconsistent' about [defendant's] arguments in support of staying this case and its desire to maintain its invalidity defenses moving forward. Even if [defendant] did state that such broad estoppel would apply, the Federal Circuit has only recently begun to clarify the scope of IPR estoppel, such that any inconsistency between [defendant's] previous and current positions is excusable."

Verinata Health, Inc., et al v. Ariosa Diagnostics, Inc., et al, 3-12-cv-05501 (CAND January 19, 2017, Order) (Illston, USDJ)

Friday, January 20, 2017

Peripheral Device Security Patent Not Ineligible Under 35 U.S.C. § 101

​ The court denied defendant's motion to dismiss on the ground that plaintiff’s peripheral device security patent encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "[Defendant] argues that claim 11 is directed to the abstract idea of securing access to secret information, which is a concept that has been practiced throughout modern history by humans. The Court finds that claim 11 is not directed to an abstract idea. . . . [C]laim 11 is tied to a specific structure, which is a peripheral device, and produces a technological improvement. The invention addresses security problems pertaining to peripheral devices. . . . [C]laim 11 describes a physical structure that contains a combination of components, not a method or system that uses a general computer to secure access to secret information."

SPEX Technologies, Inc. v. Apricorn, 2-16-cv-07349 (CACD January 9, 2017, Order) (Selna, USDJ)

Thursday, January 19, 2017

Intervening Change in DNA Patentability Law Negates Assignor Estoppel ​

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s tuberculosis genetic detection patent encompassed unpatentable subject matter and found that assignor estoppel did not bar defendant from challenging validity because there had been an intervening change in law. "There can be no genuine dispute that [Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107 (2013)] significantly changed the legal landscape of DNA patentability. Indeed, [plaintiff] argued in an amicus brief to the Supreme Court during the Myriad proceedings that a ruling that isolated DNA sequences are not patent eligible would 'upset reliance interests' and jeopardize patents on 'DNA-based diagnostic tests.'. . . And while Myriad may not have overruled existing Supreme Court precedent because there was no Supreme Court precedent regarding DNA patentability to overrule, it reversed the Federal Circuit and sharply altered longstanding PTO practice and the jurisprudence of lower courts. This alteration in the law tips the balance of equities against application of assignor estoppel to [defendant], a company in privity with an inventor who assigned his rights at a time when the PTO was routinely granting DNA patents, decades before the Supreme Court significantly limited the scope of such patents."

Roche Molecular Systems, Inc. v. Cepheid, 3-14-cv-03228 (CAND January 17, 2017, Order) (Laporte, MJ)

Evolving State of § 101 Weighs Against Attorney Fee Award Despite Prior Findings of Invalidity in Related Cases​

Following judgment on the pleadings that plaintiff's patents were invalid for lack of patentable subject matter, the court denied defendants' motion for attorney fees under 35 U.S.C. § 285 because plaintiff's claims were not baseless. "[Plaintiff's] litigating position in this lawsuit was no weaker simply because [defendant] did not file its motion at the same time as the defendants in related lawsuits. This Court’s ruling declaring different patents asserted by [plaintiff] in related cases to be invalid under 35 U.S.C. § 101 was not binding authority making it a foregone conclusion that the Court would arrive at a similar decision on [defendants'] motion for judgment on the pleadings, which concerned two different patents. Ultimately, '[g]iven the evolving state of the law, the § 101 analysis . . . is a difficult exercise,' and 'therefore, not an exercise that lends itself to, e.g., shifting fees pursuant to 35 U.S.C. § 285.'"

West View Research, LLC v. Bayerische Motoren Werke AG et al, 3-14-cv-02670 (CASD January 17, 2017, Order) (Bencivengo, USDJ)

Wednesday, January 18, 2017

Judge Love Orders Mutual Disclosure of Mock Trial or Focus Group and In Camera Inspection of Participants​

The court ordered the parties to disclose the identities of the participants in any mock trial or focus group prior to jury selection. "The parties are notified that if either party intends to conduct mock trials, focus groups, or similar studies in preparation for trial, the party who commissions such a study shall retain, to the extent practicable, the name and address of each participant in the study. Any party who commissions such a study shall advise the other party to the case, as well as the court, in writing, that such a study occurred. . . . Upon receipt of any jury list, the party who commissioned the study shall immediately cross-reference the jury list with the identities of the participants and advise the other party and the court of any prospective juror who participated in any study. Before jury selection, the party who commissioned the study shall provide the names and addresses of all participants in the study to the court in camera."

3rd Eye Surveillance, LLC v. The City of Fort Worth, Texas, 6-14-cv-00725 (TXED January 13, 2017, Order) (Love, MJ)

Tuesday, January 17, 2017

Transferring Venue: How Long Is This Gonna Take?

Filing a motion to transfer venue in a court case can be an important tool for a defendant who wants to move the case to home turf, as it were, or it may turn out to be more beneficial to all parties involved for discovery. But most legal teams are in the dark as to their chances of having such a motion to transfer venue approved by a judge, or how long they might have to wait in order to receive a judgment on such motions.

Data compiled using the patent litigation analysis tools available through Docket Navigator helps to shed some light on this situation. Overall, more motions to transfer venue have been granted than have been denied in recent years. For the eight-year period from 2008 until late-2016, a total of 1,079 motions to transfer venue have been granted in patent infringement suits being litigated in U.S. district courts. By contrast, 974 motions to transfer venue were denied during the same period of time. The following charts will look at district courts with ten or more motions to transfer venue filed during that time period.

Not every U.S. district court takes a friendly view of motions to transfer venue, and one of the places where more motions are denied than granted is the U.S. District Court for the Eastern District of Texas (E.D. Tex.). During the eight years that were surveyed, a total of 377 motions to transfer venue were denied in E.D. Tex. while the court only granted 279 such motions. These figures also point out the massive number of patent infringement cases playing out at E.D. Tex. Second to E.D. Tex. in terms of the number of motions either granted or denied is the U.S. District Court for the District of Delaware (D. Del.), where 107 motions to transfer venue were denied and 88 such motions were granted over an eight year period.

Although E.D. Tex. and D. Del. see the largest number of motions to transfer venue, other district courts take much longer to render a decision on those same motions. On average, it takes 283.7 days for a motion to transfer venue to be denied in the U.S. District Court for the Northern District of New York (N.D.N.Y.). Trailing N.D.N.Y. in this regard is E.D. Tex., which has an average pendency of 219.4 days from the date the motion is filed until it is denied, and D. Del., where the average pendency is 199.5 days. For motions to transfer venue which are granted, D. Del. (184.5 days) and E.D. Tex. (183.2 days) are at the top of the list for the longest average pendencies from the date the motion is filed. However, also in that mix is the U.S. District Court for the District of Colorado (D. Colo.), where the average pendency on a motion to transfer venue is 184.3 days for motions which are granted.

The fastest average pendencies on motions to transfer venue which are denied from the date that the motion was filed were seen in the U.S. District Court for the Central District of California (C.D. Cal.), where it took only an average of 51.7 days to deny such a motion. While C.D. Cal. also sees a quick average pendency period of 62.8 days to grant a motion to transfer venue, the quickest average pendency to granting a motion to transfer venue was 61 days in the U.S. District Court for the Eastern District of Virginia (E.D. Va.).

The data analytics available through Docket Navigator give any patent attorney better tools for forecasting a court’s activity, helping them deliver more value to their clients. Legal teams considering a change of court venue will get a much better idea of their chances to do so with this powerful data engine.

Charts made using Docket Navigator's data.
This guest post was written by Steve Brachmann.

Hastily Filed Declaratory Judgment Claim Did Not Violate Rule 11 in Light of PTAB Institution Decision​

The court denied a patentee-defendant's motion for Rule 11 sanctions because plaintiff's claims for declaratory relief of noninfringement and invalidity were not frivolous in light of the PTAB's decision to institute inter partes review of a related claim. "Although [defendant] criticizes [plaintiff] for not providing an attorney declaration testifying about what inquiry was conducted in the two days between the receipt of [defendant's] notice-of-infringement letter and the filing of [plaintiff's] complaint seeking declaratory relief, that failure is immaterial so long as [plaintiff's] complaint was not legally or factually baseless from an objective perspective. Here, [defendant] claims that . . . [plaintiff's] contention that claim 4 of the [patent-in-suit] was invalid was not factually supported. But that position cannot be sustained given the results of [a related] inter partes review. . . . [T]he PTAB's grant of review on claim 1 implicates the validity of claim 4, because claim 4 is, in effect, part of the process described in claim 1, only in reverse. [Defendant's] argument that 'dependent or multiple dependent claims [i.e., claim 4] shall be presumed valid even though dependent upon an invalid claim [claims 1-3],' does not establish [plaintiff's] challenge to claim 4 is frivolous."

Craigslist, Inc. v. EveryMD.com LLC, 3-16-cv-03421 (CAND January 12, 2017, Order) (Chen, USDJ)

No Stay of TC Heartland Pending Supreme Court Review​

The court denied defendant's motion to stay pending the Supreme Court's resolution of its appeal of the court's transfer order because the interests of justice, prejudice to plaintiff, and age of the case weighed against a stay. "I have decided all pending motions. . . . Even if the result of the Supreme Court's decision is a determination that this case must be transferred to another District, the case will still need to be tried. I have presided over the case since its inception. The directive . . . that I 'administer[]' this case (like all others) with a goal of 'secur[ing] [its] just, speedy, and inexpensive determination,' is far better served by me deciding the ripe motions rather than leaving numerous loose threads for (potentially) a judge in another District to have to untangle. . . . [T]hese parties are competitors. . . . [T]his case is already three years old. . . . It needs to go to trial soon."

Kraft Foods Group Brands LLC v. TC Heartland LLC et al, 1-14-cv-00028 (DED January 12, 2017, Order) (Stark, USDJ)

Friday, January 13, 2017

Step One of Alice Analysis Not Limited to Patent’s Novel Claims​

The court denied defendants' motion to dismiss on the ground that plaintiff’s agrochemical spraying system patents encompassed unpatentable subject matter and rejected defendants' argument that the court must focus its analysis of step one in Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) to the novel claims of the patents-in-suit. "Defendants contend that the Federal Circuit’s admonition to consider the focus of the patents’ claimed advance over the prior art requires the court to narrow its Alice step-one inquiry to the [patents-in-suit’s] novel claims. The court disagrees. To adopt defendants’ method would require the court to import the novelty inquiry found under § 102 into the § 101 analysis. The Supreme Court has rejected this method many times. . . . In step one of the Alice test, the court simply considers the patent’s claims as a whole to determine what their focus is."

Capstan AG Systems, Inc. v. Raven Industries, Inc. et al, 5-16-cv-04132 (KSD January 11, 2017, Order) (Crabtree, USDJ)

Estoppel Does Not Apply to Grounds Not Raised in Petition for Inter Partes Review​

The court denied plaintiffs' motion to reconsider an earlier decision that defendant was not estopped from presenting a prior art combination at trial following inter partes review. "[M]y first look at the estoppel issue was incomplete . . . [E]veryone agrees that estoppel applies to grounds for invalidity upon which the Board instituted review in the IPR proceeding, whether or not the Board addresses those grounds in its final decision ('instituted grounds'). I believe that there likewise can be no dispute that estoppel does not apply to invalidity grounds that were raised by a petitioner in an IPR, but rejected by the Board as instituted grounds (i.e., 'noninstituted grounds'). Which leaves us with the situation at bar, where the invalidity ground at issue was never raised in the IPR, but reasonably could have been raised during the IPR ('litigation ground'). To the best of my knowledge, the Federal Circuit has not addressed this specific fact pattern. . . . [Plaintiffs'] reasoning leads to the conclusion that the PTAB is meant to be the invalidity arbiter of first resort and, therefore, a company that seeks an IPR must bring to the PTAB's attention every ground the company has reason to think might be relevant; otherwise, it will be estopped from pursuing that ground in litigation. That outcome appears to be inconsistent with all of the limitations imposed by the PTAB on IPR proceedings . . . and leaves for trial only those references initially rejected by the PTAB. . . . On the whole, since it is not my place to make policy decisions, I am not inclined to change my original decision, with the hopes that an appeal may clarify the issue for future judges in future cases. Therefore, [defendant] is not estopped from presenting [a prior art] combination at trial."

Intellectual Ventures I LLC et al v. Toshiba Corporation et al, 1-13-cv-00453 (DED January 11, 2017, Order) (Robinson, USDJ)

Thursday, January 12, 2017

Petitioner’s Inability to Cross-Examine Patent Owner’s Expert Justifies Motion to Strike Expert’s Declaration

​ During a conference call, the Board granted the petitioner authorization to file a motion to strike the declaration of the patent owner's expert because the expert was unavailable for deposition prior to the due date of the petitioner's reply. "We advised Patent Owner that, given Petitioner’s inability to cross-examine [patent owner's expert] prior to the due date for Petitioner’s Reply, the likely remedy would be to strike [the expert's] declaration. Patent Owner’s counsel indicated he understood the likelihood of that outcome, and that he had advised his client [the expert] of the likelihood of that outcome prior to the conference call. [Patent owner's counsel] nonetheless indicated that [the expert] was not available for deposition prior to the due date for Petitioner’s Reply, and that he was acting in accordance with [the expert's] instructions in that regard. Additionally, [patent owner's counsel] did not request an extension of time for Petitioner’s Reply to accommodate the rescheduling of [the expert's] deposition, and did not indicate [the expert] would be available for deposition at any time."

Petition for Inter Partes Review by 1964 Ears, LLC, IPR2016-00494 (PTAB January 10, 2017, Order) (Horvath, APJ)

Wednesday, January 11, 2017

Web Browser Security Patents Not Invalid Under 35 U.S.C. § 101 at Summary Judgment Stage

​ The magistrate judge recommended denying defendant's motion for summary judgment on the ground that the asserted claims of plaintiff’s web browser security patents encompassed unpatentable subject matter because defendant did not establish that the claims were directed toward an abstract idea. "[Defendant] identifies four abstract ideas -- each at vastly different levels of generality -- to which claim 30 is supposedly directed. . . . It nevertheless remains to be fully determined whether the claims in fact represent an improvement to existing technology. . . . Whether a claim is unconventional is a highly-factual inquiry. . . . In any event, a jury trial will at least facilitate the Court’s determination of whether claim 30 is drawn to an abstract idea when the Court considers judgment as a matter of law. . . . To be clear, the Court is not postponing the determination of whether claim 30 is abstract until after trial. . . . The Court is applying the requisite threshold test -- but in the context of summary judgment. . . . A reasonable inference is that claim 30 is directed to a particularized method that is, as a factual matter, an improvement to existing computer-related technology. . . . [T]he specification of the [patent] describes existing methods for combating malware and explains how the claimed invention represents an unconventional improvement over these methods. . . . [Defendant's] argument rests on the false presumption that known computer components cannot be arranged unconventionally so as to take the invention away from the abstract."

Cioffi et al v. Google Inc., 2-13-cv-00103 (TXED January 9, 2017, Order) (Payne, MJ)

Tuesday, January 10, 2017

Conflicts Counsel for Third Party Discovery Must be Walled Off From Trial Counsel​

Following an order that plaintiff obtain conflicts counsel to pursue third party discovery from a former client of plaintiff's trial counsel, the court issued a second order addressing how conflicts counsel should function. "I think conflicts counsel in this case should be walled off from [trial counsel's] firm. Conflicts counsel need not be walled off from local counsel. Conflicts counsel may be provided with any and all (unredacted) filings on the docket. . . . On the other hand, conflicts counsel does not get any tutorial from [trial counsel], and does not get any draft [nonparty] discovery. Conflicts counsel, if it needs expert advice beyond that identified above, will need to obtain its own expert(s). . . . The wall will continue at least through the close of discovery, but, it seems to me, it will have to be relaxed at some point before trial, since [trial counsel] will need to be in charge of trying Plaintiffs case. If any [nonparty] witnesses appear at trial, however, any examination (or, more likely, cross-examination) will need to be done by conflicts counsel."

TQ Delta, LLC v. Pace Americas, LLC et al, 1-13-cv-01835 (DED January 6, 2017, Order) (Andrews, USDJ)

Monday, January 9, 2017

Opinion Counsel’s Involvement in Litigation Justifies Discovery of Communications with Trial Counsel​

The court granted plaintiff's motion to compel discovery regarding communications between defendants' opinion and trial counsel because of opinion counsel's involvement in the present suit. "[B]y involving opinion counsel in the substantive defense of this lawsuit, [defendant] engaged in the type of conduct that justifies allowing discovery into any communications either involving or relaying information from opinion counsel to [defendant], its trial counsel, or its in-house counsel. . . . [Opinion counsel's] active, on-going involvement in this litigation blurs the lines between the roles of objective advisor and partisan advocate. Prohibiting [plaintiff] from discovering the content of [opinion counsel's] communications with trial counsel has the potential to allow [defendant] to obtain the benefits of an advice of counsel defense while also allowing it to shield communications which may demonstrate substantial flaws in [opinion counsel's] prior opinion. If present, those flaws may call into question [defendant's] reasonable reliance upon its opinion counsel’s advice."

Krausz Industries Ltd. v. Smith-Blair, Inc., et al, 5-12-cv-00570 (NCED December 13, 2016, Order) (Numbers, MJ)

Eight Video Signal Transfer Patents Invalid Under 35 U.S.C. § 101 Despite Earlier PTAB Findings of Nonobviousness​

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s video signal transfer patents encompassed unpatentable subject matter and rejected plaintiff's argument that the claims did not lack an inventive concept because the PTAB found they were not obvious during inter partes review. "Plaintiff cites multiple opinions from the PTAB stating that the specifications of the intermediary device were not taught by the prior art and were therefore not obvious under 35 U.S.C. §§ 102 or 103. . . . Although there is some caselaw to suggest that obviousness, novelty, and eligibility inquiries overlap, the most recent and persuasive opinions conduct the eligibility inquiry in isolation. . . . That is not to say that the §§ 102 and 103 analyses are completely irrelevant to the eligibility question. Indeed, the same component or claim that distinguishes the invention from the prior art may also provide the 'innovative concept' that directs the claims to patent-eligible subject matter. . . . [T]he USPTO's inter partes decisions do not provide an answer to the question at hand. What those opinions do, however, is highlight the aspects of the [patent] family that might constitute an 'innovative concept' under step two of [Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S.Ct. 2347 (2014)]."

Virginia Innovation Sciences, Inc. v. Amazon.com, Inc., 1-16-cv-00861 (VAED January 5, 2017, Order) (O'Grady, USDJ)

Friday, January 6, 2017

Tunneling Client Access Point Patent Not Invalid Under 35 U.S.C. § 101​

The court denied defendants' motion for summary judgment of invalidity because defendant failed to show that plaintiff’s tunneling client access point patent was directed toward an abstract idea. "[Defendant] argues claim 1 of the [patent] is invalid under 35 U.S.C. § 101 because it is generally directed to the abstract idea of providing communication with computing devices. . . . The court disagrees with [defendant's] over-simplified characterization of the claims. . . . [T]he Independent Claims of the [patent] recite a specific arrangement of components and a very specific implementation and structure of the executable program code. Furthermore, the court disagrees with [defendant's] assertion that the [patent] has no 'particular concrete or tangible form'. . . . [T]he Independent Claims here define a tangible portable device with an unconventional hardware configuration that is able to run specific program code to provide the claimed functionality. More important, the court agrees, as [plaintiff] maintains, that the Independent Claims of the [patent] are directed to a 'specific asserted improvement in computer capabilities,' not to an abstract idea 'for which computers are invoked merely as a tool.'. . . As the specification delineates, the claims are directed to addressing a specific technological problem in then-existing computing environments: portable devices were 'bulky, provide[d] uncomfortably small user interfaces, and require[d] too much power to maintain their data.'"

IOENGINE LLC v. Interactive Media Corp., 1-14-cv-01571 (DED January 4, 2017, Order) (Sleet, USDJ)

Thursday, January 5, 2017

Royalty for Ongoing Willful Infringement Awarded at Double the Rate Determined by Jury​

Following a jury verdict and failed mediation, the court granted plaintiff's motion for an ongoing royalty that was twice the rate determined by the jury. "[Defendant] counters that the rate determined by the jury is appropriate and that, in any event, an ongoing willful infringer should still be able to derive a profit from post-judgment infringing sales. The Court does not find [defendant's] first argument to be well-taken, principally because of the change in the parties’ relative bargaining positions following the jury verdict. . . . In this case, [plaintiff's] bargaining position is significantly different, precisely because the jury determined validity and infringement. . . . A consideration of the applicable [Read v. Portec, 970 F.2d 816 (Fed. Cir. 1992)] factors also supports [plaintiff's] requested rate . . . especially with respect to factors 2 (good-faith belief of invalidity and non-infringement) and 4 (litigation behavior). Following the jury verdict and a determination that [defendant's] infringement was willful, [defendant] cannot have a good-faith belief of the invalidity of the patent-in-suit."

Arctic Cat Inc. v. Bombardier Recreational Products Inc. et al, 0-14-cv-62369 (FLSD January 3, 2017, Order) (Bloom, USDJ)

Post-Alice Enforcement of Computer-Assisted Patent Does Not Warrant Attorney Fees Award Under 35 U.S.C. § 285

​ Following a dismissal for lack of patentable subject matter, the court denied defendant's motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation positions were not baseless. "Although some courts have considered the pursuit of a computer-assisted patent after [Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014)] to be 'objectively baseless,' the Court finds that this suit was not frivolous. [Plaintiff] presented five potential 'innovative concepts' that might save the validity of the patents even if they were otherwise abstract under Alice. Although none of these concepts persuaded the Court that [plaintiff's] claimed inventions were patentable, the Court agrees with [plaintiff] that Alice did not require the plaintiff to give up any hope of enforcing patents previously granted by the Patent Office pursuant to its standard procedures."

O2 Media, LLC v. Narrative Science Inc., 1-15-cv-05129 (ILND January 3, 2017, Order) (Tharp, Jr., USDJ)

Wednesday, January 4, 2017

Electromagnetic Identification Patents Invalid Under 35 U.S.C. § 101​

The court granted defendant's motion for judgment on the pleadings because the asserted claims of plaintiff’s electromagnetic user identification patents encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "[Plaintiff] asserts that these claimed systems/methods are an advancement to a computer-specific technology problem, specifically an improvement in the operation or functionality of the computer system to prevent electronic fraud, such as 'spoofing' or 'man-in-the-middle attacks' in wireless interface systems. . . . The asserted claims are directed at authenticating a user of the system and providing information to that user that is downloaded to the user’s personal electronic device. . . . The claim language is result-oriented and functional. . . . There is nothing in the specification to support this representation that the inventions provide new and improved systems, protocols or methods of securing wireless transactions from interception by unauthorized users. Rather the claims recite known RFID tag and reader systems used to provide authentication of system users for access to information."

West View Research, LLC v. Bayerische Motoren Werke AG et al, 3-14-cv-02670 (CASD December 30, 2016, Order) (Bencivengo, USDJ)

Tuesday, January 3, 2017

Defendant's Failure to Assert Counterclaims Undermines Request for Rule 11 Sanctions​

Following plaintiff's voluntary dismissal of its patent infringement action, the court denied defendant's motion for sanctions under Rule 11 on the ground that plaintiff's claims were baseless. "[Defendant's] underlying contentions -- that it did not infringe [plaintiff's] patent and the patent is invalid in any case -- are legal conclusions that must be proven on the merits. If [defendant] wanted a finding that [plaintiff's] case lacked merit, then it should have asserted a counterclaim for declaratory relief to keep the case alive. Instead, [defendant] now wants to use a sanctions motion as a vehicle to essentially litigate a voluntarily-dismissed civil action on the merits to establish that [defendant] would have won had the case gone the distance. Given our thin record, this could only be done after discovery on the merits and enormous satellite litigation. Life is too short for that kind of exercise."

Sentegra, LLC v. Asus Computer International, 3-16-cv-03136 (CAND December 29, 2016, Order) (Alsup, USDJ)