Special Liaison Appointed to Investigate Expert’s Availability to Testify Following Medical Event

The court deferred ruling on defendants' motion to substitute one of its experts and appointed a special liaison to help determine whether the expert would be able to proceed at trial. "Subsequent to his retention, [the expert] experienced a medical event, which occurred at or near the time of his deposition [last month]. . . . [T]he Court has concluded that an experienced non-physician liaison is appropriate to facilitate further informational development in this matter and that appointment of a non-physician liaison is preferable to appointing a different neurologist. . . . As special liaison in this regard, [the liaison] shall gather and report information from [the doctor who examined defendants' expert], and all other available, material sources, regarding [the expert's] ability to recover and testify [at trial in 3 months], or some other future date."

Intellectual Ventures II LLC v. FedEx Corporation et al, 2-16-cv-00980 (TXED February 26, 2018, Order) (Gilstrap, USDJ)

Venue Not Determined When Cause of Action Accrues

The court granted one defendant's motion to transfer for improper venue because defendant lacked a regular and established place of business in the district through its former office that closed shortly before plaintiff filed suit. "⁠[Plaintiff] argues . . . that the location in Plymouth Meeting is sufficient to defeat [movant's] motion to transfer because [it] had a regular and established place of business in this district when the cause of action accrued, and Plaintiff initiated the relevant action on June 30, 2010, a reasonable time after [movant's] office closed in 2009. . . . Some courts have held that venue is proper under § 1400(b) when a defendant had a regular and established place of business in a district, and the plaintiff initiated the action within a reasonable time after the place of business was closed. However, this rule has not been adopted by the Third Circuit Court of Appeals, and this Court declines the invitation to apply said ruling in this patent case."

Infinity Computer Products, Inc. v. OKI Data Americas, Inc., 2-12-cv-06797 (PAED February 23, 2018, Order) (Alejandro, USDJ)

Slot Machine Patent Claims Invalid Under 35 U.S.C. § 101

The court granted defendant's motion for summary judgment that the asserted claims of plaintiff’s gaming machine patents encompassed unpatentable subject matter and found that the claims lacked an inventive concept. "The Court rejects [plaintiff's] argument that the ordered combination of claims results in an inventive concept by virtue of the unique display or configuration of symbols on the simulated reels. While the claims at issue here may disclose a different configuration of the displayed symbols in a slot machine game, they do not disclose a new game or a new technology directed to the slot game. . . . Selecting an identical symbol for a consecutive run of symbols in one simulated digital reel, at least as disclosed in the asserted claims here, does not represent a new form of selection or derive from a new technology associated with slot games. . . . Changes to game rules of a generic slot machine using conventional technology are not patentable."

Konami Gaming, Inc. v. PTT, LLC d/b/a High 5 Games, 2-14-cv-01483 (NVD February 22, 2018, Order) (Boulware, II, USDJ)

Stipulation to Waive §§ 102 and 103 Defenses Weighs in Favor of Stay Pending IPR

The court granted defendant's motion to stay pending its petition for inter partes review because the potential simplification of issues and lack of undue prejudice favored a stay. "The Court agrees with [plaintiff] that at this point it is unknown whether the PTAB will institute IPRs of the asserted patents. . . . Yet the Court’s concerns are assuaged by [defendant's] proposed stipulation that if the Court grants the stay, [it] will waive any argument regarding prior art under 35 U.S.C. §§ 102 or 103 -- regardless of whether or not the IPR proceedings are instituted. The Court finds this proposition persuasive, particularly given [defendant's] representations regarding the heavy monetary burden that instituting the IPRs and defending a lawsuit in district court at the same time will impose on it as a small company. . . . [W]hile the Court agrees that [the parties] are direct competitors and that [defendant] could harm [plaintiff's] competitive standing, [plaintiff] is far too vague regarding this alleged harm."

Blacoh Fluid Controls, Inc. v. Syrinix, Inc., 5-17-cv-04007 (CAND February 21, 2018, Order) (Cousins, MJ)

Aesthetic-Functionality Test Does Not Apply to Design Patents

The court denied plaintiff's motion for summary judgment that defendant's auto body part design patents were invalid and rejected plaintiff's argument that the aesthetic-functionality test should apply to design patents. "For at least three reasons the Court declines to import the aesthetic-functionality doctrine from trademark law to design-patent law. First, no court has done so. This despite that both trademarks and design patents have coexisted for well over a century. . . . Second, trademark law and patent law serve different purposes. . . . [T]rademark law 'seeks to promote competition' . . . patents inhibit competition. Yet the 'policy predicate for the entire [trademark] functionality doctrine stems from the public interest in enhancing competition.' . . . Third, there is greater reason for trademark law to be concerned with functionality (aesthetic or otherwise) than design-patent law. If a trademark could protect function, the mark holder would gain a perpetual monopoly over the product’s function without clearing the hurdles for obtaining any patent—utility or design. In contrast, those seeking a design patent must clear at least some hurdles related to novelty. And the term of monopoly is limited to 15 years. Thus, the inequity of a design patent protecting the aesthetically functional aspect of an article is simply not as great as a trademark doing so."

Automotive Body Parts Association v. Ford Global Technologies, LLC, 2-15-cv-10137 (MIED February 20, 2018, Order) (Michelson, USDJ)

Audio/Visual Playback Patent Invalid Under 35 USC § 101

The court granted defendant's motion for summary judgment because the asserted claims of plaintiffs’ audio/visual playback patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "I agree with Defendant that this claim is, at most, directed to the automation of a process that can be (and has been) performed by humans. . . . Claim 1 includes the additional element of reproducing the recorded signal with either the previously stored or default preferences, but that element is similarly abstract, as it, too, is at most directed to the automation of a process that can be performed by humans. Claim 1 is thus directed to the abstract idea of choosing to play back media with or without playback preferences. It is not directed to an invention that improves this process."

D&M Holdings, Inc., et al. v. Sonos, Inc., 1-16-cv-00141 (DED February 16, 2018, Order) (Andrews, USDJ)

Meritless Invalidity and Unenforceability Claim Justifies Award of Attorney Fees

Following dismissal of plaintiff's invalidity and unenforceability claims for lack of standing and failure to state a claim, the court granted defendants' motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation positions and tactics were unreasonable. "The plaintiff should have known from the inception of this litigation that its claim in Count X [seeking a declaration of patent invalidity and unenforceability] lacked substantive and legal merit, and even if it was unaware of such deficiencies at the time it filed its complaint, there is no question that the meet-and-confer communications from the defendants before the filing of their motion to dismiss directly pointed the plaintiff to such deficiencies. Even with such awareness, the plaintiff committed to seeing the claim through to the end, in defiance of the applicable law. Not only did the plaintiff persist in its frivolous claim, but they aggressively litigated the patent issues. This required the defendants themselves to develop their own expert testimony to address patent issues which should have never been present in this case. There is no doubt that the plaintiff’s steadfast commitment to this unfounded patent claim imposed additional expenses on the opposing parties which should never have been experienced."

Technology for Energy Corporation v. Hardy et al (JRG3), 3-16-cv-00091 (TNED February 15, 2018, Order) (Greer, USDJ)

Audio-Video Doorbell Patent Not Invalid Under 35 U.S.C. § 101

The court denied defendant's motion to dismiss on the ground that plaintiff’s audio-video doorbell patent encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "⁠[T]he Court has rejected arguments that a patent claim is abstract because its only concrete, physical component not relying on a computer’s generalized computing capabilities was well-known or long-practiced. . . . Detecting the presence of a person at a door, sending a video of the person to be viewed, and speaking with the person at the door are all concrete steps requiring more than the abstract thinking capabilities of a person or a computer. Regardless of anticipation or nonobviousness under §§ 102 and 103 -- neither of which is at issue in the present motion, and upon which the Court states no opinion -- Claim 1 is patent-eligible under § 101."

Eyetalk365, LLC v. Zmodo Technology Corporation Limited, 2-17-cv-02714 (NVD February 14, 2018, Order) (Jones, USDJ)

Successful Motion to Intervene Waives Venue Challenge

The court denied intervenors' motions to sever and transfer plaintiff's actions against them for improper venue because intervenors waived venue through their intervention. "By definition, an intervenor is '⁠[s]omeone who voluntarily enters a pending lawsuit because of a personal stake in it.' This choice to intervene (or consent to proceed in a particular jurisdiction and venue) has real and far-reaching consequences. . . . [T]he intervenors cannot now question the propriety or convenience of a venue they chose to enter. The intervenors voluntarily entered this proceeding and now must litigate in this, their chosen venue."

Team Worldwide Corporation v. Wal-Mart Stores, Inc. et al, 2-17-cv-00235 (TXED February 13, 2018, Order) (Gilstrap, USDJ)

Serving Responses to Contention Interrogatories Near Close of Fact Discovery Justifies Monetary Sanctions Against Defendant and Counsel

The court granted plaintiff's motion for monetary sanctions against defendant and its counsel following plaintiff's successful motion to compel further contention interrogatory responses because defendant's behavior was not substantially justified. "⁠[Defendant] now asserts that it was 'substantially justified in relying upon the existing, valid legal authority directly on point' to delay responses to the Contention Interrogatories. The authorities [defendant] cites, however, do not justify a refusal to respond to contention interrogatories until the last few days before the discovery cut-off. . . . [W]hile [defendant] cites cases for the proposition that responses may be delayed until discovery is 'almost complete,' none stand for the unreasonable conclusion that a responding party can wait until the discovery period is over before responding to demands."

Bal Seal Engineering, Inc. v. Nelson Products, Inc. et al, 8-13-cv-01880 (CACD February 12, 2018, Order) (Scott, MJ)

Contractual and Fiduciary Duty of Loyalty May Estop Defendant From Asserting Invalidity Defense

The court denied defendant's motion to dismiss on the ground that plaintiff’s synthetic gem investment product patent encompassed unpatentable subject matter because there were genuine disputes of fact whether an individual defendant was estopped from challenging the patent's validity. "⁠[T]he Court is unpersuaded by defendants' contention that [plaintiff] is legally precluded from asserting an estoppel or contractual bar to [the individual defendant's] invalidity argument arising from his fiduciary and contractual duties to [plaintiff]. Whether those duties actually bar [the individual defendant] (and [the LLC defendant] as his alleged alter ego) in the way asserted by [plaintiff] is another matter, and one the Court cannot adjudicate at this stage of the litigation -- as it may depend on factual disputes that cannot be adjudicated at this point. The upshot is that the Court does not believe that it can appropriately decide defendants' invalidity challenge in the context of their motion to dismiss for failure to state a claim."

Gemshares LLC v. Lipton et al, 1-17-cv-06221 (ILND February 11, 2018, Order) (Kennelly, USDJ)

Common Interest Doctrine Does Not Protect Communications With Litigation Funder Prior to Written Agreement

The court overruled plaintiff's objection to the special master's order granting in part defendants' motion to compel the production of documents plaintiff provided to a third party as part of a litigation financing agreement that plaintiff withheld under the common interest doctrine. "Plaintiff argues that '⁠[l]itigation funders provide funds 'for the sake of securing, advancing, or supplying legal representation,' and thus have a common legal interest with the plaintiffs they fund.'. . . However . . . 'it [does not] appear that there was any written agreement at [the time of the communications] to have a legally 'common interest' in whatever was provided by Plaintiff.' Furthermore, the Special Master explained that the 'documents were provided before any agreement was reached between Plaintiff and [the litigation funder], and before any litigation was filed.' Thus, Plaintiff has not shown that Plaintiff and [the litigation funder] possessed identical legal interests in the patents-in suit or were otherwise 'allied in a common legal cause' at the time of the communications."

Acceleration Bay LLC v. Activision Blizzard, Inc., 1-16-cv-00453 (DED February 9, 2018, Order) (Andrews, USDJ)

Breach of Duty to Disclose Patent to Standards Setting Organization Equitably Estops Enforcement

Following a jury verdict of infringement and invalidity, the court granted in part defendant's motion for judgment as a matter of law that plaintiff was equitably estopped from enforcing its anticoagulant patent. "⁠[Plaintiff] had a duty to disclose its patent to [a standards setting organization] and it breached that duty through silence. . . . This Court agrees that there was credible testimony supporting the inference that [defendant] relied on [an SSO provision] for its continued use of the 15-25% procedures. . . . [Defendant] has shown that it would be economically prejudiced if [plaintiff] were permitted to enforce the patent against it. . . . Because [one] procedure does not comply with [the SSO provision], [plaintiff] is only equitably estopped from enforcing its patent against the 15-25% procedures."

Momenta Pharmaceuticals, Inc., et al v. Amphastar Pharmaceuticals, Inc., et al, 1-11-cv-11681 (MAD February 7, 2018, Order) (Gorton, USDJ)

Defendant’s Attendance at Plaintiff’s Board of Directors Meeting Discussing Patented Technology Supports Willfulness Claim

The court denied defendant's motion to dismiss plaintiff's willful patent infringement claims for failing to sufficiently allege egregious behavior. "⁠[A] complaint must contain some allegations which make it plausible that the accused infringer’s behavior was egregious and that allegations of knowledge of the patents-in-suit alone are insufficient. . . . [A]mong other things, the SAC alleges that in 1997 [defendant] publicly acknowledged the value of [plaintiff's] technology. [Defendant] allegedly began investing in [plaintiff] in 2004, sent a representative to [plaintiff's] board of director meetings where [plaintiff's] patents and technology were discussed, and learned about [plaintiff's] technology during a 2006 presentation. . . . According to [plaintiff], despite the knowledge and a high likelihood of infringement, [defendant] allegedly incorporated infringing technology into its products in an egregious manner. These allegations clearly contain factual allegations that are more than a formulaic recitation of the legal standard using the word 'egregious.'"

Finjan, Inc. v. Cisco Systems, Inc., 5-17-cv-00072 (CAND February 6, 2018, Order) (Freeman, USDJ)

Auto Dealership Facilities Do Not Qualify as Regular and Established Place of Business of Vehicle Manufacturer or Distributor

The court granted defendants' alternative motion to transfer plaintiff's patent infringement action for improper venue because defendants did not have a regular and established place of business through their dealerships in the district. "Defendants are two distinct corporate entities. . . . The dealerships are also separate corporate entities. . . . [T]here is no fact supporting that Defendants are the parent corporations of the dealerships owners or operators. . . . [T]here are no facts that Defendants even own any interest in the dealerships. Plaintiff’s theory is predicated on the Defendants’ operating agreement with the . . . dealerships exerting such control that the dealerships are essentially the same entity. This theory ignores the separate corporate forms of Defendants and the dealerships. The Court finds no facts to support collapsing the corporate forms; the dealerships’ physical locations are not places of Defendants."

West View Research, LLC v. BMW of North America, LLC et al, 3-16-cv-02590 (CASD February 5, 2018, Order) (Sammartino, USDJ)

Expert's Application of Rubinstein Bargaining Model Renders Reasonable Royalty Opinion Unreliable

The court granted defendant's motion to exclude the testimony of plaintiff's damages expert regarding reasonable royalties for three patents because his application of the Rubinstein bargaining model was unreliable. "⁠[The expert's] method is simply fancy guesswork. . . . Although [his] method is not . . . a rule of thumb or a 50-50 split, [he] does not tether the methodology to the facts of this case. . . . Using [the parties' weighted average cost of capital] as a proxy for patience in the Rubinstein model does not consider the actual stakes in the hypothetical negotiation or even the specific patents negotiated. As a result, [his] model would split the gains in the same way for a fundamental patent at the core of a company's technology and for a piece of technology that the company might consider not at all valuable. . . . It is not that [the expert] chose the wrong [weighted average cost of capital] as an input -- it is that using [weighted average costs of capital] the way he does has no relationship to the patents in this case and cannot reliably show how the parties would negotiate over these patents."

Limelight Networks, Inc. v. XO Communications, LLC et al, 3-15-cv-00720 (VAED February 2, 2018, Order) (Gibney, USDJ)

Denial of Summary Judgment No Basis for Attorney Fees Award Under 35 U.S.C. § 285

The court denied plaintiff's motion for attorney fees under 35 U.S.C. § 285 for defendant's unsuccessful motion for summary judgment under the on-sale bar. "Plaintiff requests attorney fees and costs, asserting that Defendants filed this motion in bad faith. Plaintiff cites 35 U.S.C. § 285, which authorizes a court to award reasonable attorney fees 'to the prevailing party' in 'exceptional cases.'. . . At this point in the litigation, Plaintiff is not a prevailing party. Even if, somehow, the statute could be interpreted as applying to motion practice alone, the denial of Defendants' motion for summary judgment does not alter the legal relationship between the parties."

Morren v. Morren Plastic Molding, Inc. et al, 1-17-cv-00685 (MIWD February 1, 2018, Order) (Maloney, USDJ)

Improper Emergency Motions May Push Case into Exceptional Posture

The court denied plaintiff's emergency motion to strike defendant's previously undisclosed claim construction proposal and warned the parties about improper emergency motions. "The Court reminds the Parties that filing an Emergency Motion before the Court is an extremely disruptive process that represents to the Court that immediate action must be taken in order to prevent material, avoidable harm. . . . The Court analogizes the current situation to [defendant] striking a match to light its cigar while sitting in the balcony of a crowded theater, with [plaintiff] in response jumping to its feet and screaming, 'Fire!' There is no emergency here. . . . Should these Parties ignore the guidance going forward, they may find themselves in a position where the Court feels compelled to issue sanctions and ultimately, they may push this case into a posture of being exceptional."

EnerPol, LLC v. Schlumberger Technology Corporation, 2-17-cv-00394 (TXED January 31, 2018, Order) (Gilstrap, USDJ)

Willful Blindness Alone Does Not Show Egregious Behavior Necessary for Willful Infringement Claim

The court granted defendant's motion for summary judgment that it did not willfully infringe plaintiff's condom patents because plaintiff failed to establish egregious behavior pre- or post-suit. "⁠[A]t oral argument, [plaintiff] agreed that willful blindness at most establishes 'knowledge,' rather than egregious behavior. . . . [I]nsofar as willful blindness does apply in willful infringement cases, it only substitutes for actual knowledge, as opposed to egregious behavior. Because a party's pre-suit knowledge of a patent is not by itself sufficient to show egregious behavior, willful blindness is also not sufficient. . . . [Plaintiff] does not allege that [defendant] had knowledge of, or was willfully blind to, the patents-in-suit at the time [plaintiff] alleges [defendant] failed to comply with [its patent clearance] internal policy. This is the only conduct which could conceivably raise a disputed issue of material fact about [defendant's] willfulness. Therefore, [plaintiff's] allegations of willful infringement rely on actions taken when the prerequisite of knowledge is missing."

Ansell Healthcare Products LLC v. Reckitt Benckiser LLC, 1-15-cv-00915 (DED January 30, 2018, Order) (Andrews, USDJ)