Rule 11 Sanctions of $222,937 Awarded Against Plaintiff and Plaintiff’s Attorneys

The court granted defendant's concurrent motions for attorney fees under 35 U.S.C. § 285 and for sanctions under Rule 11 and awarded $222,937 jointly and severally against plaintiff and plaintiff's attorneys. "The conduct of both [plaintiff] and its lawyers in this litigation was plainly irresponsible and frivolous. . . . [E]ven though [defendant] gave [plaintiff] a [defendant] engineer's declaration, an invitation to inspect the source code at [its] offices, and the bill of materials for an accused device, [plaintiff] and its lawyers did not amend their infringement contentions (or even inspect the source code until much later). Instead, [plaintiff] boldly continued to assert its implausible (and, as the unrebutted evidence at summary judgment showed, impossible) theories of infringement. . . . Moreover, [plaintiff] failed to conduct an adequate investigation into the plausibility of its claims by refusing to do a teardown of the devices -- even after being informed that the devices did not contain or use the sensors as [plaintiff] alleged."

Smart Wearable Technologies Inc. v. Fitbit, Inc., 3-17-cv-05068 (CAND June 27, 2018, Order) (Chhabria, USDJ)

Plaintiff Ordered to Produce Prosecution Counsel’s Non-Privileged Billing Records as Relevant to Inequitable Conduct and Prosecution Laches

The court granted in part defendant's motion to compel the production of billing records from plaintiff's prosecution counsel because some discovery was relevant to defendant's prosecution laches and inequitable conduct defenses. "⁠[N]on-privileged billing records that regard her work on the patents alleged in this claim are relevant to the extent they demonstrate when each particular prosecution matter was opened, how long it took between the initial opening and when the application was first filed, what activities occurred during prosecution of each application, when each activity occurred, and how much time was spent on the activity. . . . The annual amount of compensation [counsel] received from [plaintiff] to work on the patents at issue [the counterclaims], could raise an inference of [her] financial motive to deceive. [Defendant] is entitled to know how much annual compensation [she] received to work on these two patents."

Finjan, Inc. v. ESET, LLC et al, 3-17-cv-00183 (CASD June 25, 2018, Order) (Skomal, MJ)

Delay in Objecting to Venue Not Excused by Existence of Foreign Defendant

The magistrate judge recommended denying defendant's motion to dismiss or transfer for improper venue and rejected defendant's argument that it did not waive its objection to venue because the objection was not available until the court dismissed another defendant. "The holding of [TC Heartland LLC v. Kraft Food Grp. Brands LLC, 137 S. Ct. 1514 (2017)] applied to domestic corporations. At the time that TC Heartland issued, then, regardless of whether the claims against the foreign defendant would ultimately be rejuvenated by the District Court, it should have been clear to [defendant] that venue in this District was not proper as to it. And so there is no reason why the venue defense was not 'available' to [defendant] until [the district judge] affirmed the Court's motion to dismiss R&R in December 2017."

Princeton Digital Image Corporation v. Ubisoft Entertainment SA, 1-13-cv-00335 (DED June 25, 2018, Order) (Burke, MJ)

Advice of Counsel Defense Waiver Applies to Trial-Counsel’s Pre-Suit Communications

The court granted plaintiff's motion to compel trial counsel's pre-suit communications and work product related to defendant's opinion of counsel defense that defendant withheld as privileged. "⁠[Trial counsel's] negotiations on Defendant’s behalf pre-suit sought to avoid the adversarial process and engage in voluntary alternative dispute resolution. The relevant circumstances concerning the disclosure Plaintiff seeks -- [counsel's] pre-suit communications and work -- indicate that [counsel's] function was more analogous to that of advice or opinion counsel than trial counsel. . . . [Counsel] was retained for a period from 2010–2011 and again from 2015–2016. During this time, Defendant was regularly communicating with Plaintiff regarding Plaintiff’s [patent] and accusations of infringement against Defendant. . . . It would be illogical to shield from discovery the very conduct that is dispositive of whether infringement was committed willfully. . . . Depending upon the advice Defendant received from [trial counsel] regarding Defendant’s alleged infringement activities, it may or may not have been reasonable for Defendant to rely on [opinion counsel's] exculpatory opinion."

Zen Design Group, Ltd. v. Scholastic, Inc., 2-16-cv-12936 (MIED June 22, 2018, Order) (Cleland, USDJ)

Unsuccessful Equitable Estoppel Position Does Not Make Case Exceptional

Following summary judgment of equitable estoppel, the court denied defendant's motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation positions were not unreasonable. "While [plaintiff's] reliance on [Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014)] may have been misplaced, its position that the conduct described in this instance does not qualify as misleading was not objectively unreasonable. While several Federal Circuit cases have addressed the issue, there is no clear holding on when silence, without affirmative misrepresentations, can be sufficiently misleading as to provide a basis for equitable estoppel. In reaching its decision, the Court had to analyze several Federal Circuit decisions on the question and analogize the facts at issue to these cases. Reasonable minds could have differed on the outcome."

Akeso Health Sciences, LLC v. Designs for Health, Inc., 2-16-cv-07749 (CACD June 22, 2018, Order) (Otero, USDJ)

Reliance on Past Rulings Weighs Against Reconsideration

The court denied plaintiffs' motion to reconsider an earlier order granting defendant's motion to strike opinions from plaintiffs' invalidity expert that were submitted in support of summary judgment briefing because of the substantial unfair prejudice to defendant. "This unfair prejudice goes beyond merely the time and expense of taking additional discovery regarding [the undisclosed reference] and supplementing [an expert's] rebuttal report. The court’s exclusion of [plaintiffs' expert's] testimony on the undisclosed invalidity theories has shaped the landscape of the case, on which both parties have relied in their preparations for trial. . . . For example, [defendant] argues that it made the strategic decision to dismiss certain infringement claims with prejudice to streamline the case in reliance on the court’s Ruling on Summary Judgment, including as regards to the [previously excluded] invalidity theories. . . . [A]ttorneys make deliberate decisions about trial strategy based on the court’s prior Rulings and the posture of the case at the time. . . . [T]o unwind the court’s prior Ruling at this stage in the case without also unwinding a number of decisions made since then would unfairly prejudice [defendant]."

Chapco, Inc. et al v. Woodway USA, Inc., 3-15-cv-01665 (CTD June 20, 2018, Order) (Hall, USDJ)

Seven Month Delay While Actively Litigating Waives Venue Challenge

The court denied defendants' motion to dismiss or transfer for improper venue because defendants waived their venue challenge through their litigation conduct. "⁠[D]uring the seven months after the [TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017)] decision, [defendants] were actively litigating this case in this District. . . . [M]otions for summary judgment were denied. . . . A Claim Construction Order was issued shortly thereafter. . . . [Defendants] also filed two new motions for summary judgment before filing this Motion. . . . This procedural history reflects the type of 'tactical wait-and-see bypassing of an opportunity to declare a desire for a different forum' expressly identified in [In re Micron Tech., Inc., 875 F.3d 1091 (Fed. Cir. 2017)] as a paradigm for when an objection to venue could be waived notwithstanding the new law as to Rule 12(h). . . . TC Heartland changed the law with respect to the definition of corporate residence for the purposes of patent venue. However, it did not change the underlying prudential framework for the assessment of challenges to venue like the one raised here."

Adrian Rivera v. Remington Designs, LLC d/b/a iCoffee, 2-16-cv-04676 (CACD June 19, 2018, Order) (Kronstadt, USDJ)

Seven Month Delay Alone Does Not Waive Venue Challenge

The court granted defendant's motion to transfer for improper venue and rejected plaintiff's argument that defendant waived its venue challenge. "Plaintiff does not appear to challenge the contention that venue in this Court is improper. Rather, Plaintiff argues that . . . Defendant forfeited its privilege to challenge venue by waiting nearly seven months after the [TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017)] decision to file its motion. . . . [D]espite Defendant’s delay in filing the instant motion, Plaintiff cites no undue prejudice caused by the delay; nor can the Court discern any such prejudice to Plaintiff. Specifically, there has been no additional motion practice, an initial pretrial conference has not yet been scheduled, discovery has not yet commenced, and no trial date has yet been set."

Blue Rhino Global Sourcing, Inc. v. Sky Billiards, Inc. d/b/a Best Choice Products, 1-17-cv-00069 (NCMD June 20, 2018, Order) (Biggs, USDJ)

Common Interest Doctrine Does Not Apply to Unrepresented Parties

The court granted plaintiff's motion to compel the production of an email with a third party manufacturer that defendants clawed back under the common interest privilege because the manufacturer was not represented by counsel. "There is support for the position that all parties must be represented by counsel for the common interest exception to apply. . . . The requirement that each party to a common interest arrangement have an attorney also comports with the intent behind the common interest privilege, to permit attorneys to develop a joint legal strategy. . . . While this Court was not able to locate any Ninth Circuit precedent that explicitly requires both parties be represented by separate counsel, nor was there any precedent that extended the benefits of the common interest exception to the attorney client privilege when the disclosure at issue involved an unrepresented third-party employed by a separate entity."

The Regents of the University of California et al v. Affymetrix, Inc. et al, 3-17-cv-01394 (CASD June 19, 2018, Order) (Stormes, MJ)

District Court Lacks Authority to Stay Execution of $68 Million Judgment Pending a Petition for Certiorari to the Supreme Court

Following the Federal Circuit's affirmance of the jury verdict, the magistrate judge recommended granting plaintiff's motion to enforce liability on defendant's $68 million supersedeas bond and rejected defendant's request to continue the stay pending its certiorari petition to the Supreme Court. "⁠[Rule 62(d)] does not specify when a stay under that provision expires or terminates. The great weight of authority regarding this issue, however, suggests that the Rule 62(d) stay expires when a circuit court issues its mandate. . . . I have found no authority to support [defendant's position] that district courts retain inherent authority to issue a stay of the judgment of a circuit court of appeals pending a petition for certiorari review to the Supreme Court. . . . [B]ecause the Federal Circuit has issued its final judgment and mandate affirming the . . . judgment in [plaintiff's] favor, the district court is obligated to enforce the Federal Circuit's mandate."

PPC Broadband, Inc. v. Corning Optical Communications RF, LLC, 5-11-cv-00761 (NYND June 18, 2018, Order) (Peebles, MJ)

Asserted Claims of Wireless Remote Control Patent Invalid Under 35 U.S.C. § 101

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s wireless remote control patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "The court concludes that because the asserted claims are directed towards the result -- and therefore, abstract idea -- of wirelessly controlling remote devices, they are patent-ineligible. The specification refers to '⁠[a] method for controlling a remote device[] over a wireless connection.' 'underscor[ing] that [the asserted claims are] directed to an abstract concept.' More importantly, the asserted claims provide only for generic processes and components to achieve that result. . . . And although the Patent purports to solve a number of problems with remotely controlling devices, it does not solve those problems through an improvement in any specific technology."

Uniloc USA, Inc. et al v. HTC America, Inc., 2-17-cv-01558 (WAWD June 15, 2018, Order) (Robart, USDJ)

Plaintiff’s Lost Sales of Unpatented Products Supports Imposition of Preliminary Injunction

The magistrate judge recommended granting plaintiff's motion for a preliminary injunction prohibiting sales of the accused fire trucks and found that plaintiff established irreparable harm through lost sales of non-patented products. "The plaintiff, however, has shown by concrete examples, that when it sells its patent-covered quint to a fire department, there is a reasonable likelihood that the fire department will buy other fire apparatus as well. . . . If the defendants sell their allegedly infringing quints to customers, the plaintiffs opportunity to make sales of other apparatus to those customers in all likelihood will be lost. Moreover, there is no apparent way to quantify the value of those lost sales. Therefore, if the defendants can sell infringing quints, the plaintiff will suffer irreparable harm due to lost sales of other apparatus."

Pierce Manufacturing, Inc. v. E-One, Inc. et al, 8-18-cv-00617 (FLMD June 13, 2018, Order) (Wilson, MJ)

Institution of Claims Based on SAS Mandate May Not Simplify Issues for Trial Such That a Stay of Litigation is Warranted

Following the PTAB’s supplemental institution decision in light of SAS Inst., Inc. v. Iancu, ___ U.S. ___, 138 S. Ct. 1348, 1352–54 (2018) instituting inter partes review of all challenged claims of the patents-in-suit, the court granted defendants’ motion to stay because the potential for simplification of issues, the stage of the litigation, and lack of prejudice to plaintiff weighed in favor of a stay. “The PTAB issued the Supplemental Orders to review [new claims of two patents-in-suit] only because the SAS Institute decision dictates that result—not because [defendants] had demonstrated a reasonable likelihood that those claims were unpatentable on the challenged grounds. To the contrary, PTAB initially found that [defendants’] patentability challenges were lacking. . . . In the absence of a PTAB decision finding a reasonable likelihood that a claim is unpatentable, the question of whether a stay will simplify issues is not so clear. . . . Yet and still, staying [the case for the newly instituted claims] would have the effect of removing them from this case. It is hard to see how this result does not simplify the case. . . . [T]he developments since I last analyzed [the stage of litigation factor] do not alter the conclusion that ‘this case is not so far advanced that a stay would be improper.’ . . . Granting a stay on [the newly instituted claims] would leave [plaintiff] with only four remaining patents. But [plaintiff] does not contend that this amounts to any cognizable prejudice.

Huawei Technologies Co., Ltd. et al v. Samsung Electronics Co., Ltd. et al, 3-16-cv-02787 (CAND June 13, 2018, Order) (Orrick, USDJ)

SAS Prompts Post-Trial Stay of Entry of Judgment on Willful Infringement Verdict

Following a jury trial but prior to the entry of judgment, the court sua sponte stayed plaintiff's patent infringement action pending inter partes review after the PTAB reinstituted review in response to the Supreme Court's decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018). "A jury returned a verdict in [plaintiff's] favor, finding that the asserted claims of the [patent-in-suit] are not invalid and that [defendants] willfully infringed the asserted claims. . . . Following the jury trial but prior to entry of final judgment . . . the Supreme Court held that the PTAB must address every claim a petitioner has challenged. Because the PTAB did not previously address every claim challenged by [defendants] -- specifically, the claims at issue in this litigation -- the PTAB modified its institution decision 'to include review of all challenged claims and all ground presented in the Petition.'. . . The Parties are instructed to notify the Court of the PTAB’s decision within five days of such decision and the Court shall re-open the matter. "

Prisua Engineering Corp. v. Samsung Electronics Co., Ltd. et al, 1-16-cv-21761 (FLSD June 12, 2018, Order) (Moore, USDJ)

Discovery Concerning Potential Litigation Funding is Not Relevant or Proportional

The court denied defendants' motion to compel additional discovery regarding plaintiff's litigation funding because defendants failed to establish relevance or proportionality. "⁠[D]efendants move to compel production of Board minutes that discuss the potential funding, and move to complete the deposition of [plaintiff's board member], who declined to answer questions about the potential funding. . . . [Plaintiff] contests the relevance of the information requested and proffers an important piece of information: it does not have any third-party litigation financing. The Court is not persuaded that the materials sought are relevant to any party’s claim or defense and 'proportional to the needs of the case.' Even if litigation funding were relevant (which is contestable), potential litigation funding is a side issue at best. The Court finds that there is much discovery that would be more important in resolving the merits of this case. And the burden of responding would outweigh its likely benefit to defendants."

Space Data Corporation v. Alphabet, Inc. and Google LLC, 5-16-cv-03260 (CAND June 11, 2018, Order) (Cousins, MJ)

Lack of Specific Dosage Amounts and Frequencies of Administration Does Not Render Claims for Method of Treating Pain Invalid Under 35 U.S.C. § 101

The court denied defendant's motion to reconsider an earlier order granting plaintiff's motion for summary judgment that the asserted claims of its pain treatment patents did not encompass unpatentable subject matter. "The fact that certain of the claims do not recite specific dosage amounts and frequencies of administration is not fatal to the patent eligibility of the 'PK-only' claims under 35 U.S.C. § 101. A claim to a method of treating an illness is typically more than an expression of a natural law; if it were otherwise, pharmaceutical patents would be hard to come by, as most methods of treatment using pharmaceuticals consist simply of the administration of a drug that affects the human body in a manner that is dictated by laws of nature. . . . The claims in all of the claims asserted in this action . . . are 'treatment steps' -- that is, directed at a new and useful method of treating pain in a certain population of patients using a specific set of hydrocodone bitartrate formulations. For that reason, the Court views the claims as not directed to unpatentable subject matter by claiming patent protection for a natural law."

Pernix Ireland Pain Ltd. et al v. Alvogen Malta Operations Ltd., 1-16-cv-00139 (DED June 8, 2018, Order) (Bryson, CJ)

PTAB’s Final Written Decision Addressing Some But Not All Challenged Claims No Basis for Lifting Stay

The court denied plaintiff's motion to lift a stipulated stay pending inter partes review because the PTAB had not resolved two uninstituted claims following the Supreme Court's decision in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018). "Although the PTAB denied institution of IPR proceedings with respect to claims 5 and 10, and issued a final written decision on all remaining claims, the Supreme Court recently ruled that the PTAB must issue a final written decision 'with respect to the patentability of any patent claim challenged,' and 'in this context, as in so many others, "any" means "every."' For this reason, the Federal Circuit remanded [defendant's] appeal to the PTAB for issuance of a final decision regarding the patentability of claims 5 and 10. Consequently, the PTAB has yet to resolve the patentability of all challenged claims in the pending IPR proceeding, and the terms of the parties' stipulation have not been satisfied."

DermaFocus LLC v. Ulthera, Inc., 1-15-cv-00654 (DED June 7, 2018, Order) (Fallon, MJ)

Contract Law Expert Report Stricken as Unhelpful

The court granted plaintiff's motion to strike report of defendant's contract expert regarding whether defendant sold anticipating prior art before the critical date because the testimony was unhelpful. "There is little evidence in the expert report that [the expert] has brought any of his expertise to this exercise. . . . The [expert] indicates no particular expertise in review of purchase orders, invoices, product shipping records, or the like. He indicates no particular expertise in interpreting what the fact witnesses who have been deposed have said. He indicates no reliance on anything relevant to the particular industry. In my opinion, any reasonably literate English-speaker could apply the legal principles to the factual record on the relevant sale and offer to sell issues. . . . The only specialized knowledge that [the expert] has is the same thing -- contract law -- which in our system is my responsibility. For the most part, his expert report outlines the closing argument one might expect Defendant's lawyer to make after the jury has heard the underlying testimony and seen the underlying documents."

BASF Corporation v. Johnson Matthey Inc., 1-14-cv-01204 (DED June 6, 2018, Order) (Andrews, USDJ

Judge Shopping Tactic Constitutes Serious Misbehavior Justifying Award of Attorney Fees

Following a dismissal for failure to prosecute after six years of litigation, the court granted defendants' motions for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation tactics were unreasonable. "⁠[P]laintiff filed eight separate actions in this district against parties who turned out to be [the software developer defendant's] customers. None of those cases were marked as related. . . . [A week later] plaintiff filed nine more separate actions in this district, again against parties who turned out to be [the developer's] customers. Again, none of these cases were marked as related. . . . [B]efore any of the defendants had been served -- plaintiff voluntarily dismissed every case that had not been assigned to [one judge] except [for two cases]. Then . . . plaintiff filed five more cases in this district against four more of [the developer's] customers and against [the developer] itself. This time, plaintiff marked these cases as related to each other and related to [a case] which had been assigned to [that judge]. . . . The Court therefore finds that plaintiff deliberately . . . waited to file its case against [the developer] itself until it could mark that case as related to one in front of its preferred judge. That conduct, under the circumstances, is serious misbehavior."

DataTern, Inc. v. Blazent, Inc., et al, 1-11-cv-11970 (MAD June 5, 2018, Order) (Saylor, USDJ)

"Necessary" Distributor’s Place of Business Does Not Establish Venue for Supplier

The court granted defendant's alternative motion to transfer for improper venue because defendant did not have a regular and established place of business in the district through its "necessary" distributor. "⁠[T]here is abundant case law from other district courts holding that a distributor’s place of business cannot establish venue for its supplier. Citing no case law, [plaintiff] responds that this uniform line of cases is distinguishable because 'none of them involve the case where the use of a distributor is necessary to conduct the business of the defendant.' However, business necessity is insufficient to impute [a distributor's] place of business to [defendant]. . . . The purpose of the statutory limits on venue in the patent venue statute was to protect defendants from being sued in forums distant from their place of incorporation or residence. [Plaintiff's] proposed 'necessary distributor' rule would largely defeat that policy; indeed, given that smaller manufacturers are more likely to need to rely on distributors than larger ones, [plaintiff's] rule would have the perverse effect of subjecting smaller corporations more subject to suit in distant forums than larger ones."

EMED Technologies Corporation v. Repro-Med Systems, Inc. d/b/a RMS Medical Products, 2-17-cv-00728 (TXED June 4, 2018, Order) (Bryson, CJ)

Infringement by Defaulting Company Controlled by Former Employee Justifies Award of Enhanced Damages

The court granted plaintiff's motion for enhanced damages against a defaulting defendant because defendant's motivation for harm, lack of a good faith defense, lack of remedial action, duration of misconduct, and lack of closeness of the case favored treble damages. "⁠[P]rior to joining [defendant], [defendant's chairman] was employed at [company related to plaintiff], where he gained familiarity with [plaintiff's] intellectual property rights. . . and, prior to initiating this action, [plaintiff] sent [defendant] a letter notifying it of the [patent-in-suit] and [defendant's] infringing actions. Those facts, taken together with the fact that [the parties] are direct competitors, support an inference that [defendant] deliberately infringed the [patent], with the purpose of harming [plaintiff's] business. . . . [T]here is no evidence in the record to support a finding that [defendant] investigated the scope of the [patent] and formed a good-faith belief that it was invalid or that it was not infringed. . . . [T]he record is devoid of any evidence that [defendant] took remedial actions. . . . [Defendant] sold its infringing product [for almost a year]. Finally, because default judgment has already been entered as to [defendant's] liability for infringement, the closeness factor supports enhanced damages."

Sabinsa Corporation v. Olive Lifesciences Pvt. Ltd., 3-16-cv-03321 (NJD June 1, 2018, Order) (Wolfson, USDJ)

Valuation Cap Based on Difference Between Prior Offer to Sell and Prior Offer to License Patent-in-Suit Does Not Render Expert Opinion Unreliable

The court denied plaintiff's motion to strike portions of the rebuttal report of defendants' damages expert because his theory capping the value of a patent-in-suit based on prior licensing negotiations was not unreliable. "Plaintiff complains about [the expert's] conclusion that, because [a technology transfer company] offered to sell the [patent-in-suit] to [a third party] for $100 million in December 2011 and to license the patent for $70 million in March 2012, the $30 million difference means the value of [the patent] to all other potential licensees cannot be more than 30% of the value of the patent. . . . That the Federal Circuit may not have endorsed a damages theory does not make such a theory incorrect or unreliable -- it simply means it’s untested by an appellate court. Also, although Plaintiff may disagree with [the expert's] ultimate conclusion and reasoning, he clearly considered the passage of three years after [the transfer company's] negotiations with [the third party] in his analysis."

Kaist IP US LLC v. Samsung Electronics Co., Ltd. et al, 2-16-cv-01314 (TXED May 31, 2018, Order) (Payne, MJ)

Venue Statutes Do Not Apply to Foreign Defendant

The court denied defendant's motion to dismiss or transfer for improper venue. "While it was previously unclear whether § 1400(b) was controlling for foreign defendants involved in patent infringement suits, the Federal Circuit recently reaffirmed the 'long-established rule that suits against aliens are wholly outside the operation of all the federal venue laws, general and special.' Thus, a foreign defendant may be sued in any judicial district under 28 U.S.C. § 1391(c)(3). . . . Here, it is uncontested that the sole defendant in the case is a Swedish corporation. In light of this recent Federal Circuit case, the Court finds that venue is proper over [defendant] in this District."

Endo Pharmaceuticals Inc. v. Lupin Atlantis Holdings SA, 2-17-cv-00558 (TXED May 30, 2018, Order) (Gilstrap, USDJ)