Monday, March 19, 2018

Pre-Markman Attorney Fees Awarded Due to Unreasonable Manner of Litigation

The court awarded defendant its attorney fees under 35 U.S.C. § 285 and rejected plaintiff's argument that defendant was not entitled to attorney fees prior to claim construction. "The Federal Circuit stated that '⁠[plaintiff's] suit became baseless after the district court’s Markman order.'. . . However, as the Federal Circuit identified, this was not the extent of [plaintiff's] misconduct. [Plaintiff] also 'litigated the case in an "unreasonable manner."'. . . [T]his Court, in an exercise of its discretion and as guided by the Circuit’s opinion and directive, finds that it is appropriate in this exceptional case to award [defendant] the fees it incurred from the time of filing through dismissal."

Adjustacam LLC v., Inc., et al, 6-10-cv-00329 (TXED March 15, 2018, Order) (Gilstrap, USDJ)

Friday, March 16, 2018

Nonparty's Compilation of Prior Art Protected by Work Product Doctrine

The ALJ denied respondents' motion to certify for judicial enforcement its prior art subpoena to two nonparties whom complainants sued for infringement of the same patents in district court because the documents sought were protected attorney work product. "⁠[Nonparty] represents in its opposition that the prior art at issue 'was developed by [its] counsel because of' the district court litigation. [Respondent] speculates that [nonparty] may have also identified prior art 'outside the contours' of the district court case. [Respondent's] speculation, however, is groundless. . . . Such a compilation of prior art is protected under the work-product doctrine, even if the references themselves are publicly available. . . . [P]rotecting the mental impressions and thought processes of an attorney from disclosure is not the only interest protected by the work-product doctrine. The work-product doctrine also seeks to prevent attorneys from relying 'on wits borrowed from the adversary' instead of relying on their own efforts and professional judgment."

LED Lighting Devices, LED Power Supplies, and Components Thereof, 337-TA-1081 (ITC March 13, 2018, Order) (Lord, ALJ)

Thursday, March 15, 2018

Previously Undisclosed Market Share Apportionment Theory Stricken From Expert Report

The court overruled plaintiff's objections to the magistrate judge's order partially striking the report of plaintiff's damages expert. "⁠[Plaintiff] contends . . . all of the information [the expert] relied upon in forming his market share apportionment opinion was made known to [defendant] during fact discovery. To the extent [defendant] needed additional third-party discovery, [plaintiff] alleges it is [defendant's] fault for not seeking it earlier. The Court disagrees. Even if all the information [the expert] relied upon in forming his opinion was made known to [defendant], the market share apportionment theory itself was never disclosed prior to [his] report. Instead, [plaintiff] maintained only its two-player/product market theory, a theory that (at least in part) contradicts the newly-asserted market apportionment theory. That [defendant's] own discovery may have shown that the market was not a two-party/product market is not the issue."

Integra LifeSciences Corporation et al v. HyperBranch Medical Technology, Inc., 1-15-cv-00819 (DED March 13, 2018, Order) (Stark, USDJ)

Wednesday, March 14, 2018

Post-Trial Amendment of Pleadings Permitted to Assert Alter-Ego Claim Against Bankrupt Defendant’s Individual Owners

Following a $30 million jury verdict and defendant's filing for bankruptcy, the court granted plaintiff's motion to amend its complaint to add defendant's co-owners as defendants along with alter ego and veil-piercing claims. "⁠[Plaintiff] explains that it learned of [defendant's] and the [defendant's owners'] alleged efforts to avoid liability only when it reviewed the bankruptcy filings.⁠ . . . [Defendant] counters that [plaintiff] was 'on clear notice before trial of the substantial risk that [defendant] would be unable to pay the enormous sums [plaintiff] was seeking. Had it wanted to hedge its bets by asserting claims against other entities, it should have sought leave to do so long before now.' But that argument entirely misses the point. Veil-piercing and alter-ego claims are not mere contingency plans for uncollectable defendants. They are specific theories of liability which, absent plausible grounds, would be frivolous to plead. [Plaintiff] argues that the alleged abuse of the corporate form -- the necessary fact that underlies veil-piercing and alter-ego claims -- only came to light later on. The Court certainly will not punish [plaintiff] for failing to assert a claim prior to having the evidence to back it up."

FieldTurf USA, Inc. et al v. Astroturf, LLC, 2-10-cv-12492 (MIED March 12, 2018, Order) (Murphy, USDJ)

Tuesday, March 13, 2018

Apple Not Collaterally Estopped From Denying Infringement by Redesigned Version of FaceTime

The court denied plaintiff's motion for summary judgment that the redesigned version of defendant's adjudicated product infringed its network security patents because there were genuine disputes of material fact which precluded a finding of collateral estoppel. "⁠Apple argues that issue preclusion is inapplicable here, as the redesigned product differs in design and operation from the product at issue in the [earlier lawsuit]. . . . Particularly, Apple notes that the accept message from the FaceTime servers to the caller device was changed between the first version of FaceTime and the redesigned FaceTime. Apple suggests this change to FaceTime was so significant that the servers can no longer meet the 'indication' requirement of the claims. . . . [T]he accused devices in this case are not essentially the same as the devices at issue in the [prior] case. [Defendant] has raised a question of material fact as to whether the redesigned version of [the adjudicated product] infringes the claims of the asserted patents. The parties’ arguments stem from a fundamental factual dispute with respect to the design and operation of the redesigned product, which the Court declines to resolve at summary judgment. Whether, after the changes to the accept message, the [accused] servers fall within the scope of the court’s claim construction is a question of fact for the jury to resolve at trial."

VirnetX Inc. et al v. Apple Inc., 6-12-cv-00855 (TXED March 9, 2018, Order) (Schroeder, USDJ)

Monday, March 12, 2018

Office Closed a Few Weeks Before Lawsuit is a Regular and Established Place of Business for Venue

The court overruled defendant's objection to the magistrate judge's recommendation to deny its motion to transfer for improper venue because defendant had a regular and established place of business in the district through its office that closed a few weeks before plaintiff filed suit. "Abiding by the Federal Circuit's admonition that '⁠[i]n deciding whether a defendant has a regular and established place of business in a district, no precise rule has been laid down and each case depends on its own facts,' the undersigned finds that the fact that [plaintiff] filed suit in this District within weeks after [defendant] closed its doors is reasonable. Finding that [defendant's] established and regular business in the District weeks before suit was filed is sufficient for establishing venue pursuant to Section 1400(b) does not offend Section 1400(b)'s purpose 'to eliminate the "abuses engendered" by previous venue provisions allowing such suits to be brought in any district in which the defendant could be served.'"

ParkerVision, Inc. v. Apple Inc. et al, 3-15-cv-01477 (FLMD March 8, 2018, Order) (Davis, USDJ)

Friday, March 9, 2018

Clinical Activities Within § 271(e)(1) Safe Harbor Are Not “Acts of Infringement” For Determining Venue

The magistrate judge recommended granting defendants' motion for summary judgment of improper venue because there were no infringing acts in the district inasmuch as the accused activities fell under the safe harbor provision of 35 U.S.C. § 271(e)(1). "Plaintiff has not alleged any facts showing activities in this District other than those statutorily exempted from infringement by § 271(e)(1). . . . [T]he relevant question here is not whether Defendants engaged in uses outside the District that are not 'solely' or 'reasonably related' to seeking FDA approval, but rather, whether Defendants have engaged in any such uses in this District so that venue is proper. . . . [A]ll acts of infringement in the Eastern District of Texas are solely clinical, and therefore, the § 271(e)(1) safe harbor applies despite purported nonexempt activity in Minnesota."

Snyders Heart Valve LLC v. St. Jude Medical SC, Inc. et al, 4-16-cv-00812 (TXED March 7, 2018, Order) (Priest Johnson, MJ)

Thursday, March 8, 2018

Expert Testimony Based on Modified Claim Construction Precluded

The court granted in part plaintiff's motion in limine to preclude expert testimony premised on a revised construction of the claim term in question. "⁠[T]he court [previously] construed the claim term 'intumescent' to describe 'a substance that swells and chars upon exposure to heat or flame.' . . . [O]ver three years after the claim construction . . . [defendant] seeks to offer evidence from one of ordinary skill in the art that infringement of the claim term 'intumescent' requires proof that the coating 'swells to a sufficient degree to act as a thermal barrier to lessen the effects of heat or flame on the underlying fabric.' . . . [T]he court declines to further define the term 'swell.' . . . [Defendant] should be permitted to present evidence by an expert as to whether he observes any swelling . . . and criticisms of [plaintiff's] expert’s findings. . . . [H]e may not testify as to any opinion that the results reportedly observed by [plaintiff's expert] fail to indicate swelling 'to a sufficient degree to act as a thermal barrier to lessen the effects of heat or flame on the underlying fabric' because he has conducted no testing to support such a statement."

Precision Fabrics Group, Inc. v. Tietex International, Ltd., 7-17-cv-03037 (SCD March 5, 2018, Order) (Schroeder, USDJ)

Wednesday, March 7, 2018

Initiating Ex Parte Reexamination Instead of Inter Partes Review No Basis For Denying Stay

The court granted defendant's motion to stay pending its requests for ex parte reexamination and rejected plaintiff's argument that defendant was engaging in gamesmanship by not seeking inter partes review. "⁠[Plaintiff] argues that [defendant] only made this choice because it wanted to delay this litigation as much as possible, as evidenced by the longer timeline for completion of ex parte reexamination and the fact that reexamination does not have the same estoppel effect as IPR. . . . [I]t was reasonable for [defendant] to choose not to pursue IPR given that the constitutionality of the procedure is currently being considered by the United States Supreme Court. . . . Moreover . . . choosing ex parte reexamination makes economic sense because IPR filing fees alone would cost $50,000 more than reexamination."

Carlson Pet Products, Inc. v. North States Industries, Inc., 0-17-cv-02529 (MND March 5, 2018, Order) (Menendez, MJ)

Tuesday, March 6, 2018

CBM Estoppel Does Not Apply to Entire Statutory Provision, But to Discrete Prior Art References or Combinations

The court denied plaintiff's motion in limine to exclude evidence of obviousness because CBM estoppel did not apply to an entire statutory basis. "Plaintiff argues that, because [defendant's] CBM challenge was based on 35 U.S.C. § 103, Defendants are estopped from arguing invalidity under that statutory provision. Plaintiff thus asserts that 'ground' in the estoppel provision encompasses the statutory basis for an invalidity challenge to the patent. . . . The estoppel provision applying to CBM review is a fairly new legal rule, and case law does not clearly define its scope. But the Court can gain guidance from the Federal Circuit’s discussion of the term 'grounds' in the context of post-grant review before the PTAB. In [Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016)], the Federal Circuit described several different 'grounds' for obviousness that constituted varied combinations of prior art. . . . [T]he Court agrees with Defendants that the word 'ground' in the CBM estoppel provision refers to a discrete claim of invalidity based upon a prior art or a combination of prior art."

Solutran, Inc. v. US Bancorp et al, 0-13-cv-02637 (MND March 3, 2018, Order) (Nelson, USDJ)

Monday, March 5, 2018

Asserted Claims of Digital Advertising Distribution Patents Invalid Under 35 U.S.C. § 101

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s digital advertising distribution patents encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "⁠[Plaintiff] argues that its patents constitute a 'paradigm shift, causing ad systems to behave in an unconventional manner' by providing for real-time insertion of advertisements, selected on attributes or other criteria, instead of 'preinserted' ads that result in all consumers viewing the same advertising content. . . . [T]he claims of the three patents are directed to an ineligible abstract idea: specifically, custom advertising based upon consumer qualities or other data. . . . The different patents and claims envision different arrangements of generic computers to implement this concept in different ways. But, at bottom, they do not represent or describe improvements in computing systems, specific new software or hardware or technology, or some other type of computing method that improves the computer's functionality or makes it more efficient, such as an information 'structure designed to improve the way a computer stores and retrieves data in memory.'"

Quantum Stream Inc. v. Charter Communications, Inc. et al, 1-17-cv-01696 (NYSD March 1, 2018, Order) (Engelmayer, USDJ)

Friday, March 2, 2018

Expert’s Secondary Considerations Opinions Struck Due to Inadequate Discovery Response

The court granted defendant's motion to strike portions of the report of plaintiff's infringement expert regarding previously undisclosed secondary considerations of nonobviousness. "⁠[Plaintiff] argues that [defendant's] interrogatory was premature because it asked for expert opinion, but [plaintiff] was at least obligated to provide the factual basis for any secondary considerations, and include this factual basis in the interrogatory response itself. . . . The important point, in the Court’s view, is that [plaintiff] not only failed to disclose the factual basis for any secondary considerations, but failed to even disclose any reliance on secondary considerations at all. The prosecution history includes a discussion of secondary considerations . . . yet even this basis for secondary considerations was not included in [plaintiff's] interrogatory response. . . . Although secondary considerations may be important, the prejudice to [defendant] is significant, particularly because [plaintiff] did not disclose the facts it already had knowledge of upon which it would rely."

Semcon IP Inc. v. Huawei Device USA Inc. et al, 2-16-cv-00437 (TXED February 28, 2018, Order) (Payne, MJ)

Thursday, March 1, 2018

Vibration Attenuation Patent Invalid Under 35 U.S.C. § 101

The court granted defendant's motion for summary judgment of invalidity because the asserted claims of plaintiff’s vibration attenuating patent encompassed unpatentable subject matter and found that the claims were directed to a law of nature. "There is no dispute that adjusting the mass and stiffness of the liner will change the amount of damping of a certain frequency. The claimed methods are applications of Hooke's law with the result of friction damping. . . . [T]he Asserted Claims do not disclose a method of manufacturing a propshaft; instead, considered as a whole, they are directed to the mere application of Hooke's law, and they fail to instruct how to design the tuned liners or manufacture the driveline system to attenuate vibrations."

American Axle & Manufacturing, Inc. v. Neapco Holdings LLC et al, 1-15-cv-01168 (DED February 27, 2018, Order) (Stark, USDJ)