Online Sales Within District Via Amazon.com Justifies Venue

The court denied defendant's motion to dismiss for improper venue. "[T]he Court accepts plaintiff’s unrebutted allegation that defendant made over $6,000 worth of sales of the infringing product through its online store hosted by Amazon.com. On the Amazon.com storefront, customers could purchase the allegedly infringing products and have them shipped to them. Construing these undisputed facts in a light most favorable to plaintiff, defendant made sales of the accused devices and shipped them to this district. The fact that the sales were made through a storefront on Amazon.com, rather than the defendant’s own website, makes little difference. . . . The Court thus finds that in maintaining its Amazon.com storefront, defendant actively directed its sales activities to this district."

Fusionbrands, Inc. v. Suburban Bowery of Suffern, Inc., 1-12-cv-00229 (GAND September 26, 2013, Order) (Carnes, J.)

Submission of Low Resolution Photographs of Prior Art Evidences Intent to Deceive PTO

The court granted summary judgment on defendant's inequitable conduct defense because plaintiff's counsel disclosed a low-resolution image of a prior art product and failed to disclose a high-resolution image or the actual product to the PTO. "[Plaintiff's counsel] had a telephone interview with the PTO examiner, after which he filed the Amended Application which distinguished the Application from the [prior art] Reference on the basis of non-abutment of the cascade hooks of the hangers portrayed in the [prior art] Reference. It is also undisputed that the top and bottom surfaces of the cascade hook members of the [prior art] Hangers do in fact abut when nested, and that [counsel] had [the prior art] Hangers in his possession at the time he spoke to the PTO examiner. . . . Even after the PTO examiner had determined that the [prior art] Reference constituted prior art, and [counsel] had led the examiner to an incorrect conclusion about the [prior art] Hangers and amended the Application to turn on that incorrect conclusion, [counsel] did not disclose either the physical [prior art] Hangers or the high-resolution photographs of the [prior art] Hangers (both far clearer demonstrations of how the hanger worked than the thumbnail images in the [prior art] Reference). He now claims that he did not do so because he did not know that they were prior art. [Counsel] selectively withheld the most relevant information from the PTO examiner, which is indicative of a clear intent to deceive."

Worldwide Home Products, Inc. v. Time, Inc., et. al., 1-11-cv-03633 (NYSD September 30, 2013, Order) (Swain, J.)

“Patent Troll” Accusation Does Not Justify Award of Attorneys’ Fees

Following summary judgment of invalidity, the court denied defendant's motion for $4.9 million in attorneys' fees and rejected defendant's argument that the award was justified because plaintiff was a "patent troll." "[Defendant], suggesting that [plaintiff] is a patent troll is poorly taken, and seriously damages its credibility. . . . As [plaintiff] says in its response,'[t]his recitation is only provided for the purposes of evoking an emotional response,' and to prejudice the Court against [plaintiff]. . . . [Plaintiff] is the assignee of the inventor of the [patent-in-suit]. In three of the four infringement cases brought by [plaintiff] in this district, after long and contentious proceedings, three of the defendants took a license. There is nothing in [plaintiff's] conduct in any of the four cases that was unduly aggressive or opportunistic. [Plaintiff] made out a credible case for infringement which was never adjudicated, and put up a credible case in defending validity."

Chrimar Systems, Inc. v. Foundry Networks, Inc., 2-06-cv-13936 (MIED October 3, 2013, Order) (Cohn, J.)

Disclosure of Apple’s Confidential Licensing Information Warrants Additional Discovery into Possible Protective Order Violation

The court ordered additional discovery and briefing on plaintiff's motion for sanctions to address allegations that defense counsel violated a protective order by disclosing plaintiff's confidential licensing information to defendant's employees. "Time and again in competitor patent cases, parties resist producing confidential information to their adversaries’ lawyers. They fear, among other things, that the lawyers will insufficiently shield the information from the competitors that they represent. Yet time and again, the court assuages these fears with assurances that a protective order will keep the information out of the competitors’ hands. A casual observer might reasonably wonder what magic a protective order works that allows outside counsel access to confidential information to advance the case without countenancing untoward uses by the client. The answer is not a magical one at all: confidential information remains confidential because counsel and clients alike follow court orders. If parties breach this basic rule, the court’s assurances become meaningless. There is reason to believe the rule has been breached in the present case. . . . During the massive fact discovery in this case . . . [plaintiff] produced copies of a number of its patent license agreements, including a June 2011 license between [plaintiff] and Nokia. . . . [Defendant's] outside counsel sent [defendant] a draft expert report . . . that should have been fully redacted of that information before it was sent. However, intentionally or inadvertently, it was not. The report as distributed included key terms of [four of plaintiff's] license agreements. . . . The information was then sent, over several different occasions, to over fifty [of defendant's] employees, including high-ranking licensing executives." The court ordered defendant to produce several categories of relevant documents and up to seven witnesses for deposition to determine the facts surrounding the disclosure. Apple Inc. v. Samsung Electronics Co. Ltd., et. al., 5-11-cv-01846 (CAND October 2, 2013, Order) (Grewal, M.J.)

Government Shutdown Prompts Sua Sponte Stay

The court sua sponte stayed four related cases due to a government shutdown. "[I]n light of the recent lapse in appropriation for the Federal Trade Commission, and given the fact that the FTC is an integral party to this litigation, it is ordered that the above-captioned cases are temporarily placed in suspense and stayed. There shall be no litigation activity or settlement discussions with Magistrate Judge Strawbridge until further order of the Court. Once Congress has appropriated funds for the FTC, the Court will remove the case from suspense, and will consider whether any amendment to the Court’s . . . Pretrial Scheduling Order is appropriate."

Apotex, Inc. v. Cephalon, Inc. et. al., 2-06-cv-02768 (PAED October 1, 2013, Order) (Goldberg, J.)

Nebraska AG Enjoined from Enforcing Cease & Desist Order Precluding Counsel’s Enforcement Activities

The court granted plaintiff's motion for a preliminary injunction precluding the Nebraska Attorney General from enforcing a cease and desist order prohibiting plaintiff's counsel from initiating further enforcement activities. "The court is deeply concerned about the ability of the Attorney General to issue cease and desist orders, prior to the conclusion of the investigation, prior to any negative findings, prior to any hearings, and prior to permitting submission of documents and evidence by [plaintiff's counsel's] firm. . . . The inability of [plaintiff's counsel] to submit such letters to businesses in Nebraska clearly infringes on the First Amendment rights of [plaintiff] to be represented by the counsel of their choice. . . . The public has a right to protection from scams and unfair trade practices. However, [plaintiff's] constitutional right to hire counsel of its choosing to pursue investigations and lawsuits against infringers is clearly impeded by the cease and desist order. . . . If, however, at some point during the investigation evidence supports a claim of bad faith, the Attorney General is free to revisit this preliminary injunction with the court."

Activision TV, Inc. v. Pinnacle Bancorp, Inc., 8-13-cv-00215 (NED September 30, 2013, Order) (Bataillon, J.)

“Slightly More Convenient” Does Not Justify Transfer of Venue

The court denied defendant's motion to transfer venue from the Eastern District of Texas to the Northern District of Illinois because most factors were neutral or only slightly favored transfer. "When viewed holistically, this is a very close case. The proposed venue is as convenient as -- if not slightly more convenient than -- the Eastern District of Texas. But slightly more convenient does not rise to the level required under section 1404(a). . . . This case does not present a scenario where [plaintiff] filed a lawsuit in a venue devoid of any real connection to the case. Instead, [plaintiff] filed this lawsuit in its home venue, the Eastern District of Texas. Based on the balance of factors, it would not be 'clearly more convenient' to transfer this case to the Northern District of Illinois."

Blue Calypso, Inc. v. Groupon, Inc., 6-12-cv-00486 (TXED September 27, 2013, Order) (Schneider, J.)