Divided Infringement: Outsourcing Accused System Warrants a Finding of Noninfringement as to Both System and Method Claims

Defendant's "natural language interactive voice response system" did not infringe the asserted system and method claims of plaintiff's speech recognition patents because defendant outsourced its voice response system to a vendor who "without input from [defendant], [was] responsible for choosing, configuring, and operating the architecture, hardware, and speech recognition software relating to the [voice response system]." "[Plaintiff] reasons that DirecTV put the system into service because (i) DirecTV owns the telephone number required to access the system, (2) the system is designed to serve DirecTV's customers, (3) the system accesses DirecTV's backend accounting system for customer data and movie titles, and (4) DirecTV owns a website. . . . But even if such facts were true, as a matter of law they are unrelated to putting the claimed technology into service. DirecTV does not control any of the hardware or software associated with [the vendor's] accused platform or claimed in [plaintiff's] patents and thus cannot put the claimed invention into service."

Phoenix Solutions, Inc. v. The Directv Group, Inc.,
2-08-cv-00984 (CACD November 23, 2009) (Pfaelzer, J.)

eBay Policy Concerning Sales of Infringing Products Necessitates Injunctive Relief

Plaintiff's motion for a permanent injunction upon the court's entry of default was granted. "[I]n the absence of an injunction, of which [defendant] will certainly receive notice, [defendant] may continue to infringe by selling the [accused products] on eBay without being forced to stop. This is because eBay has recently begun to require proof of an injunction prior to removing infringing items from its website. Without an injunction, [defendant] could continue to market his infringing product online and if sued again, could again refuse to answer the complaint."

Zen Design Group, Limited v. Clint, 2-08-cv-14309
(MIED November 23, 2009, Opinion and Order) (Murphy, J.)

Lower Standard of Review by PTO Does Not Warrant Denial of Stay Pending Reexamination

Defendant's motion to stay pending reexamination was granted. "[Plaintiff's] contentions regarding the lower standard of review on reexamination and the possibility that it will create a binding record in that proceeding are inapposite. That the USPTO will invalidate a patent according to a lower standard than in the courts only reflects that after undergoing a thorough review by the USPTO, which has an abundance of technical and legal expertise, patents enjoy a higher presumption of validity in subsequent lawsuits. [Plaintiff] cannot, therefore, be prejudiced by the very procedures that allow it to claim monopoly rights in the first instance."

Card Activation Technologies, Inc. v. Bebe Stores, Inc.,
1-09-cv-00406 (ILND November 20, 2009, Minutes) (Gottschall, J.)

Ten Year Delay And Silence Trigger Laches But Not Equitable Estoppel

Defendant was sufficiently prejudiced by plaintiff's ten year delay in filing suit to trigger laches. "If [plaintiff] had claimed that [defendant] infringed the . . . Patent in the 1990s, [defendant] would have stopped producing [the accused products] because it had not invested much money in the products at that time. . . . Although the court found that laches applied, the defendant did not meet the greater standard for equitable estoppel. "While [defendant] manufactured [the accused products] for over ten years, [plaintiff] stood by silently, never threatening to bring suit for infringement of [its] patent or even demanding that [defendant] purchase a license for the patent. . . . Equitable estoppel requires more. It requires that the plaintiff take some misleading action beyond mere silence."

Integrated Cards, L.L.C. v. McKillip Industries, Inc., 1-06-cv-02071
(ILND November 19, 2009, Memorandum Opinion & Order) (Kendall, J.)

Evidence of Pending Reexamination Proceeding Excluded from Trial

Plaintiff's motion in limine concerning evidence of a pending reexamination was granted. "[E]ven if the reexamination proceedings are somehow relevant on the issues of obviousness or willfulness, they are nevertheless unfairly prejudicial. . . . [B]ecause the reexamination proceedings before the USPTO are still incomplete and based solely on the evidence provided by [defendant] in its replacement request for reexamination, there is very little probative value to the grant of reexamination. On the other hand, the prejudicial effect as well as potential for jury confusion is great."

Presidio Components Inc. v. American Technical Ceramics Corp.,
3-08-cv-00335 (CASD November 13, 2009, Order) (Gonzalez, J.)

Success Rates for Permanent Injunction after eBay v. MercExchange

Since January 2008, 93 orders have been issued in patent infringement cases on motions seeking permanent injunctive relief. Of those motions, 63% were granted and another 9% were granted in part. The remaining 28% were denied. The break-down by result is displayed below.

Docket Navigator beta testers can click the following links to see the actual results, including the underlying orders and summaries

Granted: 58
Denied: 22
Denied without prejudice: 3
Partial: 8
Denied as moot: 2

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In re Seagate's "Objective Recklessness" Test Does Not Render Defendant's Knowledge of Patent Irrelevant to Willfulness

In granting plaintiff's motion for enhanced damages, the court took into account whether defendant knew of plaintiff's patent and formed a good faith believe as to invalidity or noninfringement. "[Defendant] maintains that this factor is irrelevant under [In re Seagate 497 F.3d 1360 (Fed. Cir. 2007)], in which the Court 'abandon[ed] the affirmative duty of due care,' and held that an infringer's state of mind is not relevant to the objective inquiry of willful infringement, but points to no authority for this proposition. Courts post-Seagate have continued to apply this factor in determining whether enhancement is appropriate. . . . [Defendant] had actual knowledge of the [patent-in-suit], and the . . . patent licensed by [defendant] refers to the [plaintiff's] patent. [Defendant] need not have conducted a full-blown investigation; it need only have looked at what was already before it."

Krippelz v. Ford Mtr Co., 1-98-cv-02361
(ILND November 18, 2009, Memorandum Opinion & Order) (Zagel, J.)