Deficient ECF Notice No Basis for Extending Deadline for Notice of Appeal

The court denied defendants' motion to extend time to file their notice of appeal of a $40 million judgment and rejected defendants' argument that the e-mail notice of electronic filings failed to provide sufficient notice of the court's ruling on three post-trial motions. "Defendants argue that the e-mail notice of electronic filings (NEF' s) that defense counsel received . . . only contained language regarding the Court's grant of their motions for leave to file sealed documents, but failed to mention the denial of their substantive post-trial motions. . . . Defendants note that the docket entries for the orders at issue . . . were modified . . . to reflect the denial of the substantive post-trial motions, but no new electronic notices were sent by the Court's electronic case filing (ECF) system to reflect these amended docket entries. . . . The Court finds that Rule 77(d) imposes on attorneys the responsibility to check on the status of their case. The Court notes it is every attorney's responsibility to read the substance of each order issued by the Court, and to read the order in its entirety. . . . Defense counsel admits that the orders were 'downloaded and stored' by litigation assistants in two different firms representing Defendants; yet, it appears that nobody actually read the orders. The Court finds it is not sufficient for attorneys to rely on the electronic and e-mail notifications received from the ECF system, as the docket entries and notifications do not always convey the Court's disposition in its entirety. The substance of the orders carry validity under the law, not the electronic NEFs. . . . [D]efense counsel's failure to check the docket activity or the status of the case for over 52 days does not entitle Defendants to an extension of time to file a notice of appeal under Rule 4(a) of the Federal Rules of Appellate Procedure."

Two-Way Media LLC v. AT&T Inc., et al., 5-09-cv-00476 (TXWD February 6, 2014, Order) (Garcia, J.)

Institution of IPR Does Not Preclude Intent Necessary to Plead Induced Infringement

The court denied defendant's motion to dismiss plaintiff's amended claims for induced infringement for failing to sufficiently plead intent. "[Defendant] . . . suggests, based on the Federal Circuit's recent decision in Commil USA, LLC v. Cisco Sys., Inc., 720 F.3d 1361 (Fed. Cir. 2013), that it cannot possess the requisite intent to induce infringement because it has a good faith basis for believing the patents-in-suit are invalid. This purported good faith basis arose after [plaintiff] filed its First Amended Complaint, when the [PTAB] granted [a former defendant's] petition for inter partes review of six of the patents-in-suit, based on a reasonable likelihood that [the former defendant] would prevail in showing some of the claims at issue are unpatentable. . . . There is no basis to expand Commil into a pleading requirement. More importantly, the public IPR documents to which [defendant] refers do not, taken in the light most favorable to [plaintiff], require a finding that [plaintiff's] pleading of intent is deficient and merits dismissal of the induced infringement claim."

Clouding IP, LLC v. Rackspace Hosting, Inc., 1-12-cv-00675 (DED February 6, 2014, Order) (Stark, J.)

Settlement Does Not Justify Vacating Sanctions Order

The court denied the parties' stipulated motion to vacate an earlier order granting defendants' motion for spoliation sanctions after the parties settled the case. "The court will not agree to hide the discovery abuses of the plaintiff in this case by withdrawing [its order]."

Digital-Vending Services International, Inc. v. The University of Phoenix, Inc., et al., 2-09-cv-00555 (VAED February 5, 2014, Order) (Miller, M.J.)

Civil Action Dismissed Without Prejudice Does Not Trigger § 315(a)(1) IPR Bar

The Board denied the patent owner's motion to reconsider an earlier decision instituting inter partes review and rejected the argument that the petition was untimely under § 315(a)(1). "[The patent owner] contends . . . that the cases cited in the Decision to guide our interpretation of the term 'filed' do not construe that term and are not relevant to § 315(a)(1). We disagree. The cited cases are instructive to show that federal courts, including the Federal Circuit, treat dismissals without prejudice as if the actions were never filed. We interpreted the use of the term 'filed' in § 315(a) against the backdrop of this well-settled law. [The patent owner] has not shown an abuse of discretion in the Decision in this regard. . . . Accordingly, it is ordered that [the patent owner's] Request for Rehearing of the Decision to institute inter partes review is denied."

Petition for Inter Partes Review by CLIO USA, Inc., IPR2013-00438 (PTAB February 4, 2014, Order) (Kamholz, APJ)

No Attorneys’ Fee Award Despite Vexatious Litigation Strategy and Misconduct

Following summary judgment of noninfringement and invalidity, the court denied defendant's motion for attorneys’ fees under 35 U.S.C. § 285 even though plaintiff and its counsel engaged in vexatious litigation amounting to misconduct. "From the beginning of this case, [plaintiff] flouted the standards of appropriate conduct and professional behavior. . . . At the scheduling conference, [plaintiff] began implementing its abusive discovery strategy: avoid its own litigation and discovery obligations while forcing its opponent to provide as much information as possible. . . . [Plaintiff] certainly abused and twisted its statements of law to the Court. . . . Although [plaintiff's] behavior has been inappropriate, unprofessional, and vexatious, an award of attorney fees must take the particular misconduct into account. This case has been fraught with delays and avoidance tactics to some degree on both sides. . . . At no point did the parties seek discovery sanctions under Fed. R. Civ. Proc. 37. . . . Given that the litigation followed an expected course of motions practice, and that discovery sanctions were available to [defendant], there is no gross injustice in failing to award of attorney fees in this case."

Oplus Technologies, Ltd. v. Sears Holdings Corporation, et al., 2-12-cv-05707 (CACD February 3, 2014, Order) (Pfaelzer, J.)

Arbitration Does Not Trigger § 315(b) Deadline for Commencing IPR

The Board denied the patent owner's motion to terminate the IPR as not timely filed under 35 U.S.C. § 315(b), and rejected the patent owner's argument that the phrase "complaint alleging infringement" includes all federal proceedings adjudicating patent infringement allegations. "We do not adopt [the patent owner's] interpretation that an allegation of infringement in an arbitration proceeding triggers the one-year time period of section 315(b). Within the context of section 315(b), the phrase 'served with a complaint alleging infringement of the patent' means a complaint in a civil action for patent infringement. What matters is that the complaint pleads a cause of action for patent infringement and is served lawfully on the accused infringer in a civil action. Once that happens, the accused infringer is subject to the time limit set forth in section 315(b) to petition for inter partes review. . . . Given the Supreme Court’s narrow interpretation of the terms 'action' and 'complaint' in [BP America Production Co. v. Burton, 549 U.S. 84 (2006)], we likewise narrowly interpret section 315(b)’s use of the same terms as limited to a judicial action."

Petition for Inter Partes Review by Amkor Technology, Inc., IPR2013-00242 (PTAB January 31, 2014, Order) (DeFranco, APJ)

PTAB Not Bound by District Court Judgment of No Invalidity

In a final written decision, the Board rejected the patent owner's argument that res judicata or collateral estoppel barred the Board from determining that the challenged claims were unpatentable under §101 in light of an earlier district court judgment. "Patent Owner argues that collateral estoppel . . . applies to Petitioner’s challenge under 35 U.S.C. § 101 because the question is purely one of law, rather than fact, to which the clear and convincing standard is not applicable. Thus, Patent Owner argues that in this case, the patent is expired and cannot be amended, the Board adopted the Court’s claim construction, and that for questions of law, district courts and the Board apply the same standard. Patent Owner’s underlying assumption that subject matter eligibility determinations are pure questions of law, not subject to the clear and convincing evidence standard, is not supported by the Federal Circuit. Because the Board applies to the underlying facts an evidentiary standard that is different from the standard applied by the courts, the issue decided by the Board is not identical to the one decided or litigated in the first action and could not have been essential to the final judgment in the first action. Petitioner did not have an opportunity to litigate the issue in the first action. Therefore, we conclude that Petitioner’s challenge under 35 U.S.C. § 101 is not barred by res judicata or collateral estoppel."

Petition for Covered Business Method Patent Review by INTERTHINX, INC. , CBM2012-00007 (PTAB January 30, 2014, Order) (McNamara, APJ)