No Modification of Injunction Against Direct Competitor to Allow Infringing Sales for Orders Placed Before Trial

​ The court denied defendant's motion to modify a permanent judgment to allow it to fulfill orders of infringing products that were placed long before trial. "[T]he evidence at trial indicated that [the parties] are the only two suppliers of two-wire APS systems. The Court thus finds that modifying the injunction will cause [plaintiff] irreparable harm. . . . [T]he Court cannot help but observe that the Court’s permanent injunction did not arrive suddenly or without warning, thus diminishing the persuasiveness of [defendant's] public-interest argument. [The Court] found that the [accused] device was infringing and granted partial summary judgment nearly three years ago, the jury verdict rejecting [defendant's] invalidity and unenforceability defenses was handed down almost ten months ago, and [plaintiff] moved for a permanent injunction over seven months ago."

Polara Engineering, Inc. v. Campbell Company, 8-13-cv-00007 (CACD April 26, 2017, Order) (McCormick, MJ)

Gaps in Expert’s Market Analysis Warrant Summary Judgment on Plaintiff’s Lost Profits Claim

The court granted defendants' motion for summary judgment that plaintiff was not entitled to lost profits damages because plaintiff failed to provide an adequate market share analysis. "Defendants first argue that [plaintiff] did not undertake a meaningful market analysis that would support a lost profits calculation. The Court agrees. . . . There are multiple layers of guesswork in [plaintiff's expert's] analysis. . . . [The expert] makes no effort to account for other competitors, but claims [plaintiff] would have made all of [defendant's] accused sales for the six identified products. . . . Also, to claim lost profits from the customer defendants, [plaintiff] needed to analyze other competitor products in the overall KVM switch market in the United States (not just the OEM market). An accounting needs to be made for these gaps in 'but for' causation."

ATEN International Co., Ltd. v. Uniclass Technology Co., Ltd. et al, 2-15-cv-04424 (CACD April 24, 2017, Order) (Guilford, USDJ)

Meritless Claim for Declaration of ANDA Infringement by Possible Future Drug Formulation Justifies Award of Attorney Fees under 35 U.S.C. § 285​

The court granted defendants' motion for attorney fees under 35 U.S.C. § 285 because plaintiffs' infringement claim against defendant's operative ANDA and plaintiff's claim for a declaration of infringement by possible future products were baseless. "While Plaintiffs repeatedly argued that it only alleged current patent infringement to trigger Hatch-Waxman review of 'the product that Defendant . . . will likely market if its ANDA receives final FDA approval,' the Court found that [plaintiff's] legal theory was completely unsupported by case law and ignored the existing legal safeguards against Defendants’ potential future infringing conduct. . . . [Plaintiffs] failed to allege that Defendants were engaged in any specific activities to alter their drug formulation to infringe the patents-in-suit and even acknowledged in briefing that the focus of the case was to determine through discovery how [plaintiffs] intended to proceed through the FDA approval process. Ultimately, the absence of credible allegations or evidence that [plaintiffs] would face immediate, irreparable harm absent declaratory relief, caused the Court to conclude the declaratory judgment counts were 'not ripe for adjudication.'"

Par Pharmaceutical, Inc. et al v. Luitpold Pharmaceuticals, Inc. et al, 2-16-cv-02290 (NJD April 24, 2017, Order) (Walls, USDJ)

Proportionality of Electronic Document Request is Best Achieved With Search Terms, Not Designated Custodians​

The court granted defendants' motion to compel the production of emails "from seventeen named inventors of the fourteen asserted patents and licensing executives involved in the parties’ FRAND negotiations" and rejected plaintiff's argument that the requests were not proportional and should be limited to certain document custodians. "As other courts have explained in complex cases such as this, [plaintiff's] proposed limitations on e-discovery or the number of email custodians is not typically warranted. The emails from the inventors and licensing executives appear to at least meet the 'reasonably calculated' standard articulated in Rule 26(b)(1). [Plaintiff's] proportionality argument is not persuasive because [defendant] provides adequate limitations on the discovery by requiring particular search terms."

Huawei Technologies Co. Ltd v. T-Mobile US, Inc. et al, 2-16-cv-00052 (TXED April 21, 2017, Order) (Payne, MJ)

Human Tissue Remodeling Patent Claiming “Application and Synthetization of Natural Law Into a Concrete Process” Not Invalid Under 35 U.S.C. § 101​

The court denied defendant's motion to dismiss on the ground that plaintiff’s human tissue remodeling patent encompassed unpatentable subject matter because the asserted claims were not directed toward a natural law or phenomenon. "Defendants first argue that claim 51 is directed to unpatentable subject matter because it is covers a law of nature: namely, 'the natural phenomenon that heat denatures collagen and causes remodeling – i.e., tightening, or any change in the structure – of the heated tissue.'. . . [H]ere the Court is presented with a method patent comprising concrete steps, premised upon a discovery of natural law rendering the relevant subject matter amenable to certain processes. . . . The [patent-in-suit] stands in stark contrast to those patents which the Federal Circuit has invalidated as directed to a natural law or natural phenomenon. In those cases, the patents typically encompass the pure observation or identification of the natural law at issue. . . . In this case, however . . . [the patent] claims the application and synthetization of a natural law into a concrete process, which builds upon the subject matter’s capability of undergoing the process."

Viveve, Inc. v. ThermiGen, LLC et al, 2-16-cv-01189 (TXED April 20, 2017, Order) (Gilstrap, USDJ)

Top Law Firms by Number of Accusations in 2016

What is a Patent Accusation?

A Patent Accusation is a more granular way to measure the volume of litigation activity than counting the number of cases or litigants. As used in this report, the term means a request for relief in a U.S. district court, the ITC or the PTAB (AIA proceedings), the resolution of which could determine if a patent has been infringed or the patent’s validity or enforceability.

For example, a civil case with one plaintiff asserting one patent against one defendant would involve one patent accusation, whereas a case with one plaintiff asserting 5 patents against 10 defendants would result in 50 infringement accusation. Multiple claims involving the same parties and patents (e.g., a claim of infringement and a declaratory judgment counterclaim of invalidity or unenforceability) are counted as a single accusation. In a PTAB proceeding, each challenge to the patentability of a patent would create one patent accusation.

Sale of Software and Separate Plug-In Capable of Infringing When Combined Does Not Constitute Direct Infringement​

The court granted defendant's motion for summary judgment that it did not directly infringe plaintiff's dynamic web page generation patent. "[Plaintiff] contends that [defendant] infringed the asserted claims by storing (separately and in different locations) [its] Server software and ARR plug-in on its severs and by selling [the] Server software to customers while also making its optional ARR plug-in available for download. That infringement theory is problematic in light of the Supreme Court's decision in Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 526-29 (1972). . . . The Court . . . explained that a patent 'does not cover the manufacture or sale of separate elements capable of being, but never actually, associated to form the invention.' But contrary to the decision in Deepsouth, [plaintiff] argues that [defendant] directly infringed the asserted claims even though, under this theory, [defendant] did not assemble the software components into the accused product."

Parallel Networks Licensing LLC v. Microsoft Corporation, 1-13-cv-02073 (DED April 10, 2017, Order) (Jordan, CJ)

Until Shaw is Limited or Reconsidered, IPR Estoppel Does Not Apply to Non-Instituted Invalidity Grounds Asserted in Petition​

Following inter partes review of the patent-in-suit, the court denied plaintiff's motion to preclude defendant from contesting validity under 35 U.S.C. § 315(e) with respect to invalidity grounds that were asserted in the IPR petition but not instituted. "[Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir.), cert. denied, 137 S. Ct. 374 (2016)] makes the Federal Circuit’s view of whether § 315(e) estoppel applies to non-instituted grounds crystal clear. So until Shaw is limited or reconsidered, this court will not apply § 315(e)(2) estoppel to non-instituted grounds. . . . For the record, this court is not persuaded by Shaw’s interpretation of the term 'during' in § 315(e). Shaw does not adequately consider the history and purpose of the statutory language, and it does not satisfactorily reconcile the narrow interpretation of 'during' with the broader language 'reasonably could have raised.' What are the grounds that the petitioner 'reasonably could have raised' if the petitioner is limited to raising them after review is instituted, when the opportunity to assert new grounds is exceedingly limited? The more reasonable interpretation is that 'during that inter partes review' includes not only the instituted review itself but also the petition process."

Douglas Dynamics, LLC v. Meyer Products LLC, 3-14-cv-00886 (WIWD April 18, 2017, Order) (Peterson, USDJ)

Discovery Concerning Plaintiff’s Investor Funding, R&D Costs, and IPO Valuation Not Proportional to Needs of Case​

The court denied without prejudice defendant's motion to compel further interrogatory responses regarding investor funding, initial public offerings, and research and development costs because the discovery was not proportional to the needs of the case. "While it is conceivable that the documents sought by each of these production requests could contain information relevant to one or more issues in this case, the record does not presently show that they are likely to do so. At the same time, the production sought by each production request is extensive, the burden on [plaintiff] of making the production significant, and the intrusion into [plaintiff's] operations entailed by the production substantial."

Valencell, Inc. v. Apple Inc., 5-16-cv-00001 (NCED April 17, 2017, Order) (Gates, MJ)

Claim Construction Appropriate at Pleading Stage Where Patent Provides Explicit Definition​

The court denied defendant's motion to dismiss plaintiff's direct patent infringement claim on the ground that plaintiff's claim was based on an implausible interpretation of its patent, but rejected plaintiff's argument that claim construction of its DNA microarray patent was premature. "[T]he Court concludes that it may properly construe a claim term at the pleading stage in certain circumstances. The purpose of a 12(b)(6) motion is, after all, to determine whether a plaintiff states a legally cognizable claim for relief. . . . Defendant’s argument is premised on what is perhaps one of the most appropriate exercises of claim construction at the pleading stage: a claim of lexicography; that is, that the [patent] itself allegedly provides an explicit definition of parameter 'a.'. . . The Court finds that there is merit to both parties’ arguments and thus the Court cannot say at this stage that Defendant’s construction is correct as a matter of law."

The Scripps Research Institute v. Illumina, Inc., 3-16-cv-00661 (CASD April 14, 2017, Order) (Sammartino, USDJ)

Challenge to Printed Publication Status of Prior Art Reference Does Not Justify Late Disclosure of New Reference​

The court granted plaintiff's motion to strike a previously undisclosed prior art publication from defendant's invalidity contentions and rejected defendant's argument that the reference was necessary to address plaintiff's challenge to another reference. "[W]hile it is true that the printed publication argument was raised only in response to [defendant's] motion for summary judgment of anticipation, [defendant] should not have been caught entirely unawares by [plaintiff's] printed publication defense to [defendant's] reliance on the [originally disclosed] reference as anticipating prior art. Given the obscurity of the [original] reference, it is not surprising that [plaintiff] would raise an issue as to whether the [original] publication was sufficiently in the public domain to qualify as prior art. . . . Nothing prevented [defendant] from citing both [the original] and the [new] reference in its original invalidity contentions. . . . [I]t would be highly prejudicial to [plaintiff] for [defendant] to be allowed to use the [new] reference after having raised it for the first time only a few weeks before trial and after the close of discovery."

Erfindergemeinschaft UroPep GbR v. Eli Lilly and Company et al, 2-15-cv-01202 (TXED April 13, 2017, Order) (Bryson, CJ)

Defendant’s Multiplication of Proceedings No Basis for Reducing Attorney Fees Award for Plaintiff’s Exceptionally Weak Claims

​ The court granted in part defendant's requested attorney fees under 35 U.S.C. § 285 and rejected plaintiffs' objection that the fees should be reduced on the ground that defendant unreasonably multiplied the proceedings. "In the Court’s [prior] Order, it found that [defendant] engaged in some activity that prolonged the litigation, including 'unreasonably' refusing to designate representative products. . . . Where a plaintiff’s case is exceptionally weak on the merits, as here, rather than because of litigation misconduct, this rule counsels full fee shifting from the time the case became exceptionally weak on the merits. The entire case from that point on is exceptional and the extra legal effort required to counteract the lawsuit includes the entirety of a vigorous defense. In the context of this case, [defendant] did not exceed that limitation."

Technology Properties Limited, LLC v. Canon, Inc. et al, 4-14-cv-03640 (CAND April 12, 2017, Order) (Wilken, USDJ)

Production of Non-Public, Unaccused Products Not Proportional to the Needs of the Case​

The court denied plaintiff's motion to compel defendant to produce non-public unaccused products for testing because the discovery was disproportional to the needs of the case. "In light of the Court's determination that certain asserted claims are indefinite for reasons related to (among other things) the type of testing [plaintiff] seeks to perform, and for other reasons (including documents already produced to [plaintiff] and that the unaccused products are still in development and their design(s) could change in ways material to the patent claims), the Court finds that the requested production for testing is not proportional to the needs of the case."

American Axle & Manufacturing, Inc. v. Neapco Holdings LLC et al, 1-15-cv-01168 (DED April 11, 2017, Order) (Stark, USDJ)

Attorney Fees for Resisting Motion to Compel Not Recoverable

The court denied without prejudice a third party's motion to shift cost of discovery to plaintiff after the court granted plaintiff's motion to compel a third party to produce documents regarding five of its drug products. "[T]he Court has not at this time seen any evidence that enforcement of [plaintiff's] subpoena . . . would impose an undue burden or expense on [movant]. . . . The Court does not regard the attorneys’ fees incurred in resisting the motion to compel as recoverable costs of complying with the subpoena. [Movant] was not required to resist the motion to compel, and it has been unsuccessful in so doing. For those reasons, there is no sense in which the attorneys’ fees were necessary expenses incurred in responding to the subpoena. As to any other costs associated with [movant's] compliance efforts, the Court has no other evidence before it regarding the costs of compliance that were imposed on [movant]."

Allergan, Inc. v. Teva Pharmaceuticals USA, Inc. et al, 2-15-cv-01455 (TXED April 10, 2017, Order) (Bryson, CJ)

Demonstrating Device at Tradeshow May Constitute Infringing Use​

The court denied defendants' motion to dismiss plaintiff's direct patent infringement claims for failing to sufficiently allege that they used the accused product or that the infringement was de minimis. "[D]efendants appear to suggest that demonstration of an infringing device at a trade show cannot constitute 'use' for purposes of § 271 as a matter of law. . . . I likewise decline to hold that demonstration of an infringing device at a trade show can never constitute 'use' for purposes of § 271. . . . It can reasonably be inferred that in showing potential customers how the device operated, the defendants used the [accused device] to check the diameter of a part. . . . [T]he defendants' alleged infringement is not limited to their use of the [accused device] at [one trade show]. . . . Further, at this stage, I am unable to accept the defendants' contention that their alleged infringing conduct is unlikely to recur."

Marposs Societa Per Azioni et al v. Jenoptik Automotive North America, LLC et al, 1-16-cv-09041 (ILND April 7, 2017, Order) (Bucklo, USDJ)

Willful Infringement Claim Based Solely on Post-Filing Conduct Fails as a Matter of Law​

The court granted defendants' motion to dismiss plaintiff's willful infringement claim because it was based on post-filing conduct. "Although [Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016)] rejected the [In re Seagate Tech, LLC, 497 F.3d 1360 (Fed. Cir. 2007)] test of what constitutes a reckless state of mind to support an award of § 284 damages as too rigid, it did not discuss whether such damages are limited to the alleged infringer's pre-filing conduct, other than to state that culpability for willful infringement purposes is 'measured against the knowledge of the actor at the time of the challenged conduct.' The Federal Circuit in Seagate stated that 'in ordinary circumstances, willfulness will depend on an infringer's prelitigation conduct.' Other cases, post-Halo, have concluded that Seagate's conclusion with respect to the unavailability of a claim for willful infringement based upon post-filing conduct is still good law. Further, a court in this district has held that a claim for enhanced damages based on willful infringement 'must necessarily be grounded exclusively in the accused infringer's pre-filing conduct. . . when an accused infringer's post-filing conduct is reckless, a patentee can move for a preliminary injunction.' . . . Accordingly, the Court finds that Plaintiffs willful infringement claim, which is based solely on Defendants' post-filing conduct, fails as a matter of law."

Cooper Lighting, LLC v. Cordelia Lighting, Inc. et al, 1-16-cv-02669 (GAND April 6, 2017, Order) (Cohen, USDJ)

Invalidity Opinion Delivered After Product Launch No Defense to Willful Infringement​

Following a jury trial, the court granted plaintiff's motion for entry of judgment and found that defendant's patent infringement was willful because defendant's invalidity defenses were not relied upon at the time the accused products were introduced. "[T]he Court in [Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016)] has eliminated the ability of an accused infringer to posit reasonable invalidity defenses which were not relied upon at the time the accused products were introduced into the market. . . . '[C]ulpability is generally measured against the knowledge of the actor at the time of the challenged conduct.' There is no indication in the record that [defendant's expert] provided [defendant] his opinion on invalidity before the accused products went into production. . . . [T]here is no record evidence that [defendant] had knowledge of the invalidity defense derived from the combination of prior art and SAE standards at the time of the challenged conduct."

Omega Patents, LLC v. Calamp Corp., 6-13-cv-01950 (FLMD April 5, 2017, Order) (Byron, USDJ)

Vehicle Camera System Patent Not Invalid Under 35 U.S.C. § 101 at Pleading Stage​

The special master recommended denying defendant's motion for judgment on the pleadings on the ground that plaintiff’s vehicle camera system patent encompassed unpatentable subject matter because defendant failed to establish that the asserted claims were directed toward an abstract idea. "[T]he claims specify a particular imaging array sensor configuration and a particular approach of using data acquired from the sensor. That approach includes a step that the patent argues to depart from a conventional data processing approach by the inclusion of a reduced image data set. Also, because the imaging array sensor is taught and claimed to be useful in a misaligned condition, applying reasonable inferences in favor of Plaintiff, it can be said that the sensor as well is used in an unconventional manner, instead of the more conventional aligned technique. In this manner, the patent purports to provide an improved and unconventional approach to addressing misalignment of the image array sensor and the resulting data."

Magna Electronics, Inc. v. Valeo, Inc. et al, 2-13-cv-11376 (MIED March 31, 2017, Order) (Dobrusin, Special Master)

$1 Billion Valuation of Inventor’s Non-Asserted Patents Excluded as Prejudicial​

The court granted in part defendants' motion in limine to exclude the value of non-asserted patents from plaintiff's inventor under Rule 403. "Defendants move to exclude Plaintiff from discussing the technology or value of non-asserted patents that list [the same inventor] as the named inventor and that Plaintiff purports were valued at over $1 billion. . . . Plaintiff may provide a limited discussion of these non-asserted patents and their general subject matter at trial when discussing [the inventor's] background. Nevertheless, the Court agrees with Defendants that a discussion of the value of these non-asserted patents would likely lead to unfair prejudice and jury confusion substantially outweighing the limited probative value of such evidence."

Carucel Investments, L.P. v. Novatel Wireless, Inc. et al, 3-16-cv-00118 (CASD April 3, 2017, Order) (Huff, USDJ)

Patent Assignment Agreement Providing Outcome-Based Compensation to Fact Witness Does Not Justify Award of Attorney Fees ​

Following claim construction and a stipulated judgment of noninfringement, the court denied defendants' motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation tactics were not exceptional. "Defendants rely on the compensation arrangement in the Agreement with [a third party], coupled with Plaintiff’s initial disclosures identifying certain principals from [the third party] as fact witnesses, to argue that Plaintiff has agreed to pay fact witnesses to testify and the payment is contingent on the outcome of the case. However, the Agreement involves assignment of the Patent, not an agreement to pay fact witnesses to testify, and the witnesses identified included the inventor. . . . [T]he Agreement provides for [the third party] to be compensated based on the outcome of a patent infringement lawsuit and requires cooperation from [the third party]. The Agreement’s compensation arrangement is not so out of the ordinary to make this case exceptional."

Rembrandt Gaming Technologies, LP v. Boyd Gaming Corporation, et al, 2-12-cv-00775 (NVD March 31, 2017, Order) (Du, USDJ)

Technical Expert Unqualified to Offer Opinion on Apportionment Value​

The court granted in part defendant's motion to exclude the testimony of plaintiff's technical expert regarding apportionment as unqualified. "An apportionment analysis is performed as part of a damages calculation. As such, there is an inherently economic quality to an apportionment analysis. . . . [Plaintiff's expert], with his Ph.D. in computer science and academic and industry experience in hardware and software design and development, is qualified to review the technical information in this case and opine regarding the importance of the various features of the accused products from a technical perspective. However, due to [his] limited experience with economic apportionment, he is not qualified to provide an ultimate opinion with respect to a damages value attributable to the patented invention. . . . [His] opinions . . . may be an input into the damages expert’s opinion about the proper apportionment value, but may not be the final apportionment value itself."

Realtime Data LLC d/b/a IXO v. Oracle America, Inc., 6-16-cv-00088 (TXED March 30, 2017, Order) (Love, MJ)