Google Global Cache Server Housed in Local ISP Qualifies as Regular and Established Place of Business

The court denied Google's renewed motion to dismiss for improper venue because it had a regular and established place of business in the district through its Google Global Cache servers housed by third-party ISPs. "⁠[W]hile a virtual space or electronic communications alone are insufficient to denote a 'place' within the meaning of the statute, they may, with more, be indicative of the requirement having been met. . . . Here . . . there is more than 'merely' 'a virtual space or [] electronic communications from one person to another.' The 'place' is specifically localized: a physical server occupying a physical space. Not only does Google exercise exclusive control . . . over the digital aspects of the GGC, Google exercises exclusive control over the physical server and the physical space within which the server is located and maintained. . . . [Defendant's] ownership of the server and its contents is absolute, as is [its] control over the server’s location once it is installed. . . . The statute does not require 'substantial' business or 'large' impact from the business being done at the place of business -- in order to lay proper venue in a judicial district, the statute simply requires that a regular and established place of business be present."

SEVEN Networks, LLC v. Google LLC, 2-17-cv-00442 (TXED July 19, 2018, Order) (Gilstrap, USDJ)

Intercompany Sales From Patentee to Wholly-Owned Subsidiary May Constitute “Sales” for Purposes of Lost Profits

The court denied plaintiff's motion for summary judgment that defendant was not entitled to lost profits damages for infringement of its interferon therapy patent on the ground that only defendant's subsidiary sold treatments in the U.S. "⁠[Defendant] explains that it sells [its products] to [its non-party wholly owned subsidiary] in return for payment of an intercompany purchase price. [The subsidiary] then sells those products to wholesalers and pharmacies. The lost profits that [defendant] is principally seeking in this case are on the intercompany sales from [defendant] to [the subsidiary]. . . . [T]he intrafamily, intercompany sales from [defendant] to [its subsidiary] can constitute 'sales' by [defendant] for lost profits purposes. [Plaintiff] has not appeared to have cited a blanket rule prohibiting the fact finder from considering such transactions in a lost profits analysis. In addition, construing the facts in the light most favorable to [defendant], the Court finds that [defendant] has produced enough evidence that a rational juror could conclude that the profits of [the subsidiary] flow inexorably to [defendant]."

Bayer Healthcare Pharmaceuticals Inc. v. Biogen Idec Inc., 2-10-cv-02734 (NJD July 26, 2018, Order) (Cecchi, MJ)

Significance of ITC Complainant’s Domestic Investment in Patented Products is Not Determined by Reference to Complainant’s Overall Domestic Investments

The ALJ denied respondents' motion for summary determination that complainants could not satisfy the economic prong of the domestic industry requirement because of their de minimis domestic investments. "The core of Respondents’ argument here is that the percentage of [complainant's] domestic investments in the patented products is too small in relation to its overall domestic investments (to say nothing of its worldwide investments) to be significant. Respondents assume that there is a level of relative investment below which it is impossible to 'credibly establish' significant investments. Respondents’ analysis fails to take proper account of the Commission’s guidance that determining satisfaction of the economic prong is a flexible exercise. . . . [I]nvestments made by a large entity may appear less significant when subjected to a strictly mathematical comparison with overall expenditures, but such investments may be deemed substantial nevertheless. . . . Respondents cite no authority for their contention that '⁠[complainants'] investments are simply too small,' and such an assertion contradicts well-established ITC precedent holding that a domestic industry is not determined by reference to absolute numbers."

LED Lighting Devices, LED Power Supplies, and Components Thereof, 337-TA-1081 (ITC July 24, 2018, Order) (Lord, ALJ)

Section 271(e) Safe Harbor Extends to Clinical Trial Participants’ Continued Treatment After Trial

The court granted defendant's motion for summary judgment that it did not infringe plaintiff's chronic pain treatment patents because the post-trial use of the accused systems fell within the safe harbor provision of 35 U.S.C. § 271(e). "The use of the [two] systems in patients that have participated in the Accelerate trial fits within the safe harbor provision of 35 U.S.C. § 271(e), even after the patients have completed their participation in the trial. This use is 'reasonably related to the development and submission of information' to the FDA for device approval. The FDA specifically approved a trial plan that allowed participants to continue to receive treatment after results were collected. And international standards for medical research require trial sponsors allow participants to access studied treatments even after the trial's conclusion."

Nevro Corp. v. Boston Scientific Corporation et al, 3-16-cv-06830 (CAND July 24, 2018, Order) (Chhabria, USDJ)

Web-Based Businesses Not Exempt From In re Cray

The court granted defendant's motion to transfer for improper venue and rejected plaintiff's argument that In re Cray’s three-part definition for "regular and established place of business" should not apply to web-based businesses. "Plaintiff asks this Court to recognize the nature of Defendant’s business – facilitating communication over the web, in every state including Nevada – and to limit the application of [In re Cray, 871 F.3d 1355 (Fed. Cir. 2017)] to factual circumstances where physical products are involved. . . . The Court finds, however, that the key inquiry is not whether physical objects are involved, but rather whether the public has access to the defendant corporation through an employee or office located in the district where a suit is brought or if the public directly accesses the services of defendant through a location in the respective forum. . . . [T]he bulk of the defendant’s employees, product development, and overall operations are located in San Francisco, and that it does not own or lease any buildings in this district, it has no Nevada phone numbers or addresses listed for its operations, and it stores no inventory or data in Nevada. These facts demonstrate that Defendant maintains no place of business in Nevada, much less one that is both regular and established."

Voip-Pal.com, Inc. v. Twitter, Inc., 2-16-cv-02338 (NVD July 23, 2018, Order) (Boulware, II, USDJ)

Accusations of Copying to Overlapping Customer Base and PTO Create Substantial Controversy Supporting Declaratory Judgment Claim

The court denied defendant's motion to dismiss plaintiff's declaratory judgment claim for lack of an actual case or controversy. "⁠[Defendant] represented to the [PTO] that [plaintiff] was copying the product for which it sought a patent. . . . On its own, [defendant's] pre-issuance conduct might not be enough to make this a real and immediate controversy, but its alleged statements in the marketplace suffice to make it so. [Defendant] told the two companies’ overlapping customer base that [plaintiff] had copied its product. . . . Acknowledging that this is a close question, the Court takes guidance from the Federal Circuit’s observation that the purpose of the Declaratory Judgment Act is to 'obviate,' among other problems, 'extra-judicial patent enforcement with scare-the-customer-and-run tactics.' [Plaintiff's] allegations suggest something like those tactics was afoot here."

Global Tubing LLC v. Tenaris Coiled Tubes LLC et al, 4-17-cv-03299 (TXSD July 20, 2018, Order) (Ellison, USDJ)

OSC Re Sanctions Issued For Parties’ Unilateral Attempt to Modify Claim Construction Procedure

The court ordered the parties and their counsel to show cause why they should not be sanctioned under Rule 11, Rule 16, 28 U.S.C. § 1927, or the court’s inherent power for their attempts to preserve certain claim construction disputes until after the court's claim construction procedure. "Unlike promises and pie crust, the Rules and Procedures of this Court are not meant to be broken, nor is their breaking to be ignored. . . . [Defendant's] Motion demonstrates a serious disregard for this Court’s Rules, Orders, and its authority to control its own docket. . . . [T]he Parties appear to presumptively require the Court accede to their unilateral decision to brief only a subset of the claim terms and then present other terms at a second claim construction hearing when convenient. . . . The Court will countenance neither the Parties’ unilateral actions which it details herein nor [defendant's] attempt to use the perceived sword of [O2 Micro Int’l, Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1362 (Fed. Cir. 2008)] to essentially hijack this Court’s claim construction process and its prerogative to manage its own cases following such unilateral action. . . . [Defendant's] thinly veiled threats of reversal on appeal are offensive and contrary to case law."

SEVEN Networks, LLC v. Google LLC, 2-17-cv-00442 (TXED July 19, 2018, Order) (Gilstrap, USDJ)

Outside Prosecution Counsel’s Knowledge of Patent Not Imputed to Client

The court granted defendants' motion for summary judgment that they did not willfully infringe plaintiff's winch system patent because plaintiff presented insufficient evidence of knowledge through the knowledge of defendants' outside prosecution counsel. "⁠[T]he only correspondence between [outside counsel] and [defendants] regarding the [patent-in-suit] lends no support to Plaintiff's view that there is 'extensive evidence of knowledge' in the record . . . . At most, the emails are fairly read as providing [defendants] with notice of the [patent's] existence. However, [counsel] clearly advised [defendants] against further action with regard to the [patent]. Perhaps [defendants] should have looked into the matter further, against the advice of counsel, and sought a second opinion. Nevertheless, there being no evidence that further action was taken, willfulness cannot be established. . . . Plaintiff devotes a significant portion of its brief to the argument that whatever knowledge [counsel] had of the [patent-in-suit] should be imputed to [defendant] based on an agency-principal theory. Plaintiff has not brought to the Court's attention a single case holding that knowledge from outside legal counsel is imputable to a client corporation for purposes of willful patent infringement."

Olaf Soot Design, LLC v. Daktronics, Inc., et al, 1-15-cv-05024 (NYSD July 18, 2018, Order) (Sweet, USDJ)

Facilitating Settlement No Basis for Vacating Order Finding Patent Expired and Unenforceable

The court denied the parties' stipulated motion to vacate an earlier order partially granting defendant's motion to dismiss for failure to state a claim even though the parties' settlement was contingent on vacatur. "I find that the public interest would be disserved by vacatur. . . . Here, the [prior] Order specifically held that the [patent-in-suit] was expired and unenforceable. That holding has the potential to 'create collateral estoppel in favor of nonparties whose rights are based on statutory enactments adopted for their protection,' namely, the time bar provisions embodied in 35 U.S.C. § 154(a)(2). Vacating the [prior] Order has the potential to 'prolong[] the life of' an expired patent and permit its continued enforcement against nonparties. I decline to do so."

HoloTouch, Inc. v. Microsoft Corporation, 1-17-cv-08717 (NYSD July 17, 2018, Order) (Hellerstein, USDJ)

Retailer’s Good Faith Purchase of Seasonal Products No Basis to Avoid Preliminary Injunction For Remaining Inventory

The court granted plaintiffs' motion for a preliminary injunction and denied a retailer defendant's request to sell its remaining inventory of the accused product. "⁠Defendants have launched a new product at the beginning of each summer season for the last three years. Defendants have continued selling their product throughout the entire summer season before being enjoined by this Court. Then, each year, following issuance of the injunction, Defendants have released a slightly altered product at the beginning of the next summer season. . . . [T]he Court sees no reason to grant [the retailer's] request [to sell off its remaining inventory]. Defendants summarily repeat their invalidity and non-infringement arguments and argue that [the defendant] purchased its current inventory in 'good faith,' stating that '⁠[t]he fact that the [C]ourt has found that the PVC cap . . . is an elastic fastener is, at a minimum, heavily debatable.' The Court is unaware of -- and Defendants fail to cite to -- any authority that permits an exception to a preliminary injunction on a showing of 'good faith.'"

Tinnus Enterprises, LLC et al v. Telebrands Corporation et al, 6-17-cv-00170 (TXED July 16, 2018, Order) (Schroeder, USDJ)

Bad Faith Assertion of Invalidity Defense Solely to Extend ITC Preclusion Order Justifies Award of Attorney Fees

The court granted in part plaintiff's requested fees under 35 U.S.C. § 285 because defendant maintained its invalidity defense solely to extend the time of an ITC preclusion order. "⁠[T]he ITC exclusion bar relating to Claims 8 and 19 remains in effect, even though the independent claims upon which these dependent claims rest are invalid. . . . Because the Court finds that [defendant's] actions regarding the issue of obviousness on Claims 8 and 19 were not made in good faith, but as an attempt to extend the time of the ITC preclusion order on these two claims directed against [plaintiff], the Court finds this portion of the case to be sufficiently exceptional to warrant awarding [plaintiff] one half of the attorneys' fees incurred during the week of the trial (to reflect [plaintiff's] attorney time spent on the issue of invalidity of [defendant's] patent), and all fees of [plaintiff's expert], relevant to the issue of invalidity of claims 8 and 19 of [defendant's] patent. Although there could perhaps be justification for awarding [plaintiff's] expenses as far back as the CAFC decision, the Court limits the sanctions to one half of the attorneys' fees for [two witnesses] incurred during the trial itself and all of [its expert's] fees related to the issue of invalidity. . . ."

Eko Brands, LLC v. Adrian Rivera Maynez Enterprises, Inc. et al, 2-15-cv-00522 (WAWD July 13, 2018, Order) (Donohue, MJ)

Courts May Not Exercise Pendant Venue Over Third Parties

The court granted defendant's motion to dismiss for improper venue because plaintiff provided no authority for the court to exercise pendant venue over defendant to further judicial economy in a two-defendant action. "Plaintiff argues that judicial economy considerations favor the Court’s exercise of pendent venue, as granting [defendant's] motion would effectively bifurcate this matter into two separate actions. . . . Plaintiff fails to present any authority, binding or otherwise, suggesting that courts after [TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017)] exercise pendent venue over third parties in patent infringement actions. . . . Plaintiff asserts that declining pendent venue over its claims against [defendant] would waste time and resources by bifurcating this matter into two separate suits on 'opposite sides of the country.' But, at this stage, Plaintiff’s argument is pure conjecture: Plaintiff does not claim, nor does it appear, that it has initiated this separate suit."

Olivia Garden, Inc. v. Stance Beauty Labs, LLC et al, 4-17-cv-05778 (CAND July 12, 2018, Order) (Gilliam, USDJ)

Production of Incorrect Testing Data Discovered During Trial Justifies $1.5 Million Discovery Sanction

The court granted in part plaintiffs' motion for discovery sanctions and sanctioned defendant $1.5 million after defendant disclosed corrected stability dissolution testing data during a bench trial. "With two days of trial remaining, [defendant] revealed that its stability dissolution testing data was incorrect. . . . [Defendant's] decision to withhold the correct data caused a delay in trial, extra expenses for [plaintiff], and a drain in judicial resources. . . . ⁠[Plaintiff] is not entitled to all the fees associated with time spent analyzing [defendant's] ANDA stability and dissolution data. [Plaintiff] is only entitled to the costs it incurred reviewing the incorrect dissolution data. . . . [Plaintiff] is entitled to the costs associated with the deposition of current and former [employees of defendant's manufacturer], as well as time spent researching the relationship between [the manufacturer] and [defendant] and the ownership of [the manufacturer], because these tasks were taken in order to determine who had knowledge of the incorrect dissolution data. But for the misconduct, [plaintiff] would not have engaged in the aforementioned tasks. . . . [Plaintiff] is entitled to all fees and costs associated with [its expert] following the revelation of the misconduct. As a result of the misconduct, [his] expert report had to be amended in light of the corrected data."

Shire LLC et al v. Abhai LLC, 1-15-cv-13909 (MAD July 11, 2018, Order) (Young, USDJ)

Employing Four Researchers at University Lab Does Not Create a Regular and Established Place of Business for Venue

The court granted defendant's motion to dismiss for improper venue because defendant did not have a regular and established place of business by placing four employees at a university lab in the district. "The Court believes that . . . the educational-business collaboration at best may be interpreted as quasi-, and/or very-early-stage, research and development, the results of which are a joint product of the University and Defendant. . . . The Court seriously doubts whether such esoteric and preliminary endeavors may qualify as 'business' of Defendant. . . . Defendant has put forth unrefuted evidence establishing that [the university] owns and controls the facility; Defendant’s employees are designated as visitors; funding provided by Defendant to [the university] covers fellowship-tuition and research support, not the cost of housing the employees; signage identifies the lab as a [university] research center, with funding by Defendant; and the lab is neither publicly advertised nor internally classified as Defendant’s facility."

X2Y Attenuators, LLC v. Intel Corporation, 1-17-cv-00164 (PAWD June 25, 2018, Order) (Bissoon, USDJ)

Defendant Precluded From Informing Jury of Possible Enhancement of Damages Award in Willfulness Retrial

The court granted plaintiff's motion in limine under FRE 403 to preclude defendant from telling the jury that damages could be enhanced or trebled at a willfulness retrial and rejected defendant's argument that its supplier's indemnification agreement should similarly be excluded. "No party may discuss the potential that the Court may enhance the damages awarded by the previous jury if the jury in the second trial makes a finding of willfulness. [Defendant] also argues that [its supplier's] indemnification falls within this same category and must also be excluded. The Court disagrees. Unlike treble damages, which is irrelevant to the question before the jury on willfulness, [the supplier's] indemnification agreement is relevant to [defendant's] alleged willfulness. Moreover, any minimal prejudicial effect is outweighed by its substantial probative value."

Mass Engineered Design, Inc. v. Planar Systems, Inc., 3-16-cv-01510 (ORD July 6, 2018, Order) (Simon, USDJ)

Filing Multiple Lawsuits Asserting Patents Susceptible to Section 101 Challenge Justifies Attorney Fees Award

Following a dismissal for lack of patentable subject matter, the court granted defendants' motions for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation positions were exceptionally meritless. "⁠[Plaintiff] filed its complaint in the face of significant post-Alice precedent. Here, [plaintiff] chose to file more than a dozen lawsuits asserting four ineligible patents and, in so filing, ignored substantial precedent dismissing analogous data manipulation patent claims. . . . Although issued patents are presumed valid, they are not presumed eligible under Section 101. . . . [Plaintiff] cannot hide behind its own refusal to analyze its patents critically. Lawyers routinely evaluate the viability of contracts and strength of claims and thereupon counsel clients to act responsibly. To do otherwise unnecessarily burdens to the courts and inflicts significant costs to the opposing parties."

Cellspin Soft, Inc. v. Fitbit, Inc., 4-17-cv-05928 (CAND July 6, 2018, Order) (Rogers, USDJ)

Identification of Putative Inventor Unnecessary For Improper Inventorship Defense to Survive Summary Judgment

The court denied plaintiff's motion for summary judgment that its wireless communication patent was not invalid for improper inventorship on the grounds that defendant could not identify a purported inventor. "Plaintiff has failed to cite case law that explicitly requires the identification of a putative inventor to establish a genuine issue of material fact with respect to improper inventorship. At best, Plaintiff relies on cases that implicitly require the identification of a putative inventor when considering the merits of an improper inventorship defense. . . . Defendant points to [a third party working group member's] e-mail summary discussing the BSR format selection criteria and [defendant's] expert testimony that the e-mail summary contains the subject matter of the [patent-in-suit]. This calls into question whether [the named inventor] was the sole inventor of the subject matter of the claimed invention."

Cellular Communications Equipment LLC v. HTC Corporation et al, 6-16-cv-00475 (TXED July 5, 2018, Order) (Mitchell, MJ)

Corporate Parent May Not Claim Inexorable-Flow of Profits From Subsidiary Based Solely on Ownership and Control

The district judge overruled defendants' objection to the magistrate judge's order denying defendants' motion to compel the production of documents regarding plaintiff's financial relationship with its subsidiary. "The Court finds it prudent at this stage to make clear its expectations going forward, based on the Court’s recent experience with the inexorable-flow theory of lost-profits damages in patent cases. . . . [Plaintiff] cannot rely merely on its ownership and control of [its subsidiary] (or on [its subsidiary's] tax status) to prove that [the subsidiary's] profits flow inexorably to [plaintiff]. Additionally, any expert opinion that [the subsidiary's] profits flow inexorably to [plaintiff] must be based on more than [its] ownership and control of [the subsidiary]. . . . The Court also expects [plaintiff's] damages expert’s opinions -- including any opinion that [the subsidiary's's] profits flow inexorably to [plaintiff] -- to be based on sufficient facts or data, according to the standard articulated above and without reliance on any unproduced documents."

Polaris Industries Inc. v. Arctic Cat, Inc. et al, 0-15-cv-04129 (MND July 3, 2018, Order) (Tunheim, USDJ)

Infringement Contentions Limited to Specifically Identified Products

The court granted defendant's motion to strike plaintiff's infringement contentions because plaintiff failed to sufficiently identify the accused instrumentalities. "⁠[Plaintiff] merely asserts in a footnote for each claim chart that the dozens of accused products 'operate in substantially the same manner with respect to the accused functionality.' This conclusory assertion is insufficient. '⁠[I]n order to rely on a claim that one accused product represents another for purposes of Rule 3–1(c), a patentee must do more than state as much. A patentee must state how.'. . . [Defendant] argues that '⁠[plaintiff's] broad categorical identifications and improper use of open-ended language ('e.g.') should be stricken, and [its] allegations should be limited to the products specifically identified.' This order agrees."

Uniloc USA, Inc. et al v. Apple Inc., 3-18-cv-00360 (CAND July 2, 2018, Order) (Alsup, USDJ)

Apex Doctrine Does Not Prohibit Deposition of Former Google VP

The court granted in part defendant's former employee's motion for a protective order precluding his deposition under the apex doctrine. "⁠[I]f being super-busy and important immunized you from being deposed, there might not be any depositions in Silicon Valley. . . . At bottom, I am not persuaded that the [former employee's] deposition is proportional to the needs of the case at this moment. . . . [Plaintiff] should first take the depositions of the relevant [defendant] employees with knowledge of Project Loon. If, after having substantially completed [defendant's] depositions, [plaintiff] can show that it still has information gaps that it needs [his] testimony to fill, then it may renew its request to depose [him]. Barring further court order, [plaintiff's] portion of the [former employee's] deposition will be capped at 90 minutes."

Space Data Corporation v. Alphabet Inc and Google LLC, 5-16-cv-03260 (CAND June 29, 2018, Order) (Cousins, MJ)

Failure to Request Indicative Ruling During Pendency of Appeal Waives Objection to Venue

Following a jury trial, a bench trial, appeal, and remand, the court denied defendant's motion to transfer for improper venue because defendant waived its venue defense through litigation conduct. "⁠During the pendency of [defendant's] appeal to the Federal Circuit, the United States Supreme Court issued its decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017) . . . . [T]he court finds it inarguable that [defendant] wanted to wait for the outcome of the Federal Circuit appeal prior to raising its venue objections. . . . [Defendant] could have requested an indicative ruling from the district court under Fed. R. Civ. P. 62.1 during the pendency of the appeal. . . . This case has been through dispositive motion practice, jury trial, bench trial, post-trial motions, appeal and remand. It has been pending for more than eight years. In fact, this case predates every filing in TC Heartland, including the original pleadings that gave rise to the Supreme Court’s ultimate change of law. . . . [T]he age and breadth of this litigation would pose a novel -- and in this court’s view, unreasonable -- toll on judicial economy when compared with maintaining the case here."

Exmark Manufacturing Company Inc. v. Briggs & Stratton Corporation, 8-10-cv-00187 (NED June 28, 2018, Order) (Zwart, MJ)