“Consistently Dilatory and Incomplete Responses” to Discovery Warrant Monetary, but not Terminating, Sanctions

The court granted defendants' motion for monetary sanctions for plaintiff's persistent discovery failures, but denied plaintiff's request for a terminating sanction. "[P]laintiff acted improperly in (1) failing to preserve evidence stored on . . . computers and cell phones, (2) failing to produce promptly and in good faith all responsive documents in the course of discovery, and (3) neglecting to produce as many as 160 additional responsive documents by the court-imposed . . . deadline. . . . [P]laintiff argues not unreasonably that defendants’ prejudice is minimized by the fact that many of the documents produced late appear to be relevant primarily, if not exclusively, to the issue of damages or the value of the patent, rather than infringement, patent validity, or other proper subject of a motion for summary judgment. . . . However, the relative lack of prejudice is counterbalanced by plaintiff’s apparently blasé approach, and its serial failure to timely produce relevant documents. . . . Plaintiff has not engaged in gross discovery violations, but its consistently dilatory and incomplete responses to defendants’ formal discovery requests demonstrate a lack of respect for the process. Plaintiff’s conduct is, therefore, worthy of sanction, although not the drastic sanction of striking part or all of the complaint."

NorthMobileTech LLC v. Simon Property Group, Inc., 3-11-cv-00287 (WIWD July 6, 2012, Order) (Conley, J.).

Preliminary Injunction Barring Defendant’s Entry Into Market Denied, but Irreparable Harm and De Novo Review of Claim Construction Warrant Temporary Injunction Pending Appeal

The court granted plaintiff's emergency motion to maintain the status quo (i.e., preclude defendant from entering the market) pending plaintiff's appeal of the court's denial of its motion for a preliminary injunction. "[T]he court recognizes that both its infringement and invalidity analyses were premised on the construction of certain key claim limitations. . . . Thus, while the court concluded in its memorandum opinion that 'plaintiff does not hold a valid patent, nor would the defendant infringe if it did,' the court readily acknowledges that the Federal Circuit could disagree with the court's construction of these key limitations and, consequently, its ultimate conclusions. . . . Defendant argues that de novo review of claim construction is not a sufficiently extraordinary circumstance to warrant a stay. The court agrees. However, the court notes that a strong showing of irreparable harm combined with the Federal Circuit's de novo review, can be sufficient. . . . [I]f the Federal Circuit reverses and finds the [patent-in-suit] valid and infringed, plaintiff will suffer irreparable harm if defendant is allowed to even seed the automotive fuel blending market, as said market is intended to account for 100% of its future commercial activity."

Butamax (TM) Advanced Biofuels LLC v. Gevo Inc., 1-11-cv-00054 (DED July 6, 2012, Order) (Robinson, J.).

Assertion of Privilege as to Prior Settlements Precludes Use of Settlements to Show Nonobviousness

The ALJ reaffirmed on remand that complainant's electronic camera patent was invalid as obvious even in light of the secondary considerations of nonobviousness. "[Complainant] has not established a nexus between the [patent-in-suit] and [its] licensing program. . . . I also find it quite telling that [complainant] refused to answer [respondent’s] interrogatories about its settlement discussions with the various licensees that signed licenses resulting from litigation -- [complainant] asserted a Settlement Privilege. I agree with [respondent] that [complainant] cannot have it both ways. That is, [it] cannot assert settlement as a shield in one hand to deny information and then attempt to argue that same settlement as a sword to establish a secondary consideration when it refused to explain what actually went on."

Mobile Telephones and Wireless Communication Devices Featuring Digital Cameras, and Components Thereof, 337-TA-703 (ITC June 27, 2012, Order) (Pender, ALJ).

Hypothetical Negotiation May Not Account For “Doubts” About Validity

The court granted in part plaintiff's motion in limine to exclude the opinion of defendant's damages expert that "doubts about the validity of the patent" created downward pressure on the royalty rates. "Under established law, the hypothetical negotiation approach 'assumes that the asserted patent claims are valid and infringed.' None of the Georgia-Pacific factors includes doubts about the validity of the patent. . . . [Defendant] has not cited a case that has held that this factor allows an expert to doubt the presumption that the patent is 'unquestionably valid and enforceable.'"

Metris USA, Inc., et. al. v. Faro Technologies Inc., 1-08-cv-11187 (MAD June 29, 2012, Order) (Saris, J.).

Failure to Disclose Structure of Means-Plus-Function Claim Renders Claim Invalid Even if Structure Would be “Trivial” for Skilled Artisan to Create

The court granted in part defendant's motion for summary judgment that plaintiff's post compile optimizer patent was invalid because the term "means for forming a plurality of data storages areas within said memory area" was indefinite. "[O]ne of skill in the art would understand 'forming a data storage area' to mean allocating memory for data storage. . . . Thus, a software algorithm is required, in addition to the C structure definitions, to form the data storage areas. The specification does not disclose . . . an algorithm for forming data storage areas. [Plaintiff] argues that it is trivial for one of skill in the art to form, or allocate, data storage areas. This argument, however, conflates the enablement requirement under § 112 ¶ 1 with the structural disclosure requirement under § 112 ¶ 6. The fact that one of skill in the art could easily form data storage areas based on the C structure definitions does not absolve [plaintiff] of the requirement to disclose structure when employing means-plus-function claiming."

Taylor v. International Business Machines Corporation, 6-10-cv-00615 (TXED July 2, 2012, Order) (Davis, J.).

Inequitable Conduct Defense Does Not Preclude Voluntary Termination of Investigation

The ALJ granted complainants' motion to terminate the investigation with respect to one patent despite respondents' objections. "The Objecting Respondents oppose the motion, arguing that the possibility of inequitable conduct on the part of the complainant may be a basis for denying a motion for termination. . . . The only support offered by the Objecting Respondents for their requests is [an order in another Investigation]. . . . However, the ALJ determined the facts in that Investigation did not support an immediate termination due to pending motions for summary determination and evidentiary sanctions. Here, the Objecting Respondents have not filed similar motions such that I could find 'extraordinary circumstances' sufficient to warrant denial of [complainants'] motion. . . . Accordingly, I find no extraordinary circumstance that prevents the partial termination of this Investigation."

Kinesiotherapy Devices and Components Thereof, 337-TA-823 (ITC June 28, 2012, Order) (Pender, ALJ).

Failure to Serve Infringement Contentions Warrants Summary Judgment of Noninfringement

The court granted plaintiffs' motion for summary judgment of noninfringement where defendant failed to served infringement contentions. "[Defendant] admits that it has not served infringement contentions with respect to [one of the patents-in-suit], but argues that the only reason it has failed to do so is because [defendant] failed to timely provide it with the source code necessary to formulate those contentions. This statement is made for the first time now, only in opposition to this motion. [Defendant] never previously requested discovery assistance from this Court related to the [patent-at-issue] that it now claims was crucial to meeting its disclosure obligations that passed months ago. . . . [Section 1(f) of the Procedures for Patent Cases -- allowing amendment of contentions 'upon timely showing of good cause'] is not intended for those parties who knowingly disregard a Scheduling Order with the intention of later requesting to amend their infringement contentions to wholesale add contentions related to one patent -- such a request would not be timely or made with good cause (and may, in truth, be an attempt to 'game the system' in order to gain a tactical advantage that prejudices the other side)."

SAP AG, et. al. v. Datatern, Inc., 1-11-cv-02648 (NYSD June 28, 2012, Order) (Forrest, J.).