Friday, September 29, 2017

Claim for Indirect Infringement by Corporate Family Does Not Require Identification of Entity Responsible for Each Act of Infringement

The court denied defendants' motion to dismiss plaintiffs' induced and contributory infringement claims for failing to sufficiently identify which defendant committed acts of infringement. "Defendants argue that, because the FAC alleges [the parent defendant] to be [a subsidiary defendant's] alter ego, it is impossible to determine which of the three Defendants is responsible for any particular act of indirect infringement. Defendants further argue that the FAC attributes more conducts to each Defendant than each actually perform, e.g., the FAC appears to allege that [the parent] makes the cameras even though [it] does not do so. . . . The FAC alleges specific involvements of each Defendant in its respective role in the [defendant] family of companies. In the light most favorable to Plaintiffs, these allegations provide fair notice to Defendants."

Carl Zeiss AG et al v. Nikon Corporation et al, 2-17-cv-03221 (CACD September 27, 2017, Order) (Klausner, USDJ)

Thursday, September 28, 2017

Waiting for Outcome of Rule 12 Motion Waives Objection to Improper Venue

The court denied defendant's motion to dismiss or transfer plaintiff's patent infringement action for improper venue because defendant waived its venue defense by waiting for the outcome of its earlier Rule 12 motion before raising its venue defense. "The rules specifically provide a system in which venue challenges are not available for tactical deployment. A party cannot wait to see how a motion to dismiss on the merits turns out before challenging venue. . . . [Defendant] had several weeks in which to notify the court that it wanted to supplement its pending motions to dismiss. During that time period, [defendant] notified the court of other recent decisions impacting the [35 U.S.C. §101] motion. [Defendant] similarly could have, and should have, notified the court of the [TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017)] decision if it did not want to waive the venue challenge. By waiting to see how the court would come out on its unpatentability motion, [defendant] waived its venue challenge." v. SalesLoft, 2-16-cv-00859 (UTD September 26, 2017, Order) (Kimball, SJ)

Defendant’s Decision to Pursue IPR Bars Pursuit of § 285 Attorney Fees Award

Following inter partes review, the court granted plaintiff's motion to dismiss its patent infringement action and defendant's invalidity and noninfringement counterclaims as moot and rejected defendant's request to allow 90 days of discovery to support its 35 U.S.C. § 285 claim. "Once the [patent] was determined to be unpatentable, the need for a declaratory judgement of invalidity and non-infringement became a moot issue. . . . If the Defendant had desired to conduct discovery to prove the egregious conduct alleged in their response to the Order to Show Cause, they should not have joined in the IPR, nor should they have filed a separate petition for IPR of all claims of the [patent] on the same grounds described in the then-pending IPR. Having chosen to invalidate the [patent] before the USPTO, they cannot now complain that they are denied the ability to avail themselves of this federal forum."

MD Security Solutions LLC v. Protection 1, Inc., 6-15-cv-01968 (FLMD September 26, 2017, Order) (Byron, USDJ)

Wednesday, September 27, 2017

IPR Estoppel Applies to Prior Art, Not Specific Combinations

The magistrate judge recommended granting plaintiff's motion for summary judgment that IPR estoppel barred defendant from asserting obviousness based on two non-petitioned prior art combinations because defendant reasonably could have raised them during inter partes review. "[Defendant argues] that because it did not disclose the two disputed combinations . . . in its invalidity contentions, and did not do so until after the . . . IPR was over, it is not barred from asserting them today. . . . The legislative history of the statute . . . confirms that Congress intended for estoppel to extend to 'prior art,' rather than to just 'combinations.'. . . Although [defendant] did not assert the specific combinations of prior art references that it now seeks to assert at trial, [defendant] knew that the [underlying] references existed, at least eight months before filing its IPR petition. Yet, [defendant] chose not to raise the specific references before the PTAB. . . . [A]llowing [defendant] to raise arguments that it chose not to raise during IPR, would give it the proverbial 'second bite at the apple,' by allowing it to enjoy the pros of IPR without risking the cons of estoppel."

Network-1 Security Solutions, Inc. v. Alcatel-Lucent USA Inc., et al, 6-11-cv-00492 (TXED September 25, 2017, Order) (Mitchell, MJ)

Tuesday, September 26, 2017

No Enhanced Damages for Willful Infringement Leading to HCV Cure

Following a jury verdict of willful infringement, the court denied plaintiff's motion for enhanced damages because plaintiff failed to establish the need for a punitive sanction or deterrence. "While the Court does not, of course, 'bless' the type of underhanded corporate piracy the jury implicitly found [defendant] committed, given that the result of that misconduct is a cure for a potentially-fatal disease afflicting millions of people around the world, and given that the jury's damages award is already the largest damages verdict ever returned in a patent trial (compensating [plaintiff] for what it lost), additional sanction is just not warranted. . . . The Court cannot confidently state that it should wish to deter the conduct the jury implicitly found [defendant] committed. . . . Here, without both parties' contributions, humanity may well have been deprived of a cure for HCV. Under the totality of circumstances, society's interest in deterrence of willful patent infringement does not justify enhancing damages here."

Idenix Pharmaceuticals LLC et al v. Gilead Sciences, Inc., 1-14-cv-00846 (DED September 22, 2017, Order) (Stark, USDJ)

Monday, September 25, 2017

Expert Testimony Concerning Mental Thought Processes of Examiner Excluded

The court granted defendants' motion to exclude the testimony of plaintiff's patent law expert regarding what a patent examiner would have done under different facts because it was unreliable speculation. "Defendants . . . seek to exclude portions of [the expert's] Report that discuss whether an examiner would have considered certain evidence, if presented, what an examiner would have done under an alternative set of facts, all as unreliable speculation. . . . In Barry v. Medtronic, the court excluded similar testimony under Rule 702: . . . '[the expert’s] resume fails to establish his education, training, or experience in the field of retroactive mind reading of the thoughts of patent examiners.' . . . Plaintiff’s argument that such opinions are supported by substantial evidence and reasoned analysis does not change the fact that they are intrinsically impermissible. [The expert] may not opine about the mental thought processes of a PTO examiner."

Network-1 Security Solutions, Inc. v. Alcatel-Lucent USA Inc., et al, 6-11-cv-00492 (TXED September 21, 2017, Order) (Mitchell, MJ)

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)