Stay Pending IPR Conditioned on Non-Petitioner’s Agreement to “Weaker” Estoppel

The court conditionally granted a non-petitioner defendant's motion to stay pending inter partes review contingent upon defendants' agreement to be subject to "weaker" statutory estoppel due to the defendant's non-involvement with the IPR proceedings. "[B]ecause [defendant] is not one of the IPR petitioners, [it] would not be precluded under 35 U.S.C. § 315(e)(2) from reasserting invalidity contentions rejected by the PTO. . . . If [defendant] and IPR petitioners communicate on strategy, [defendant] should be bound by the full statutory estoppel provision. If, however, [defendant] has no input on the IPR strategy, it should not be precluded from raising arguments that could have been raised in the IPR proceedings. At the hearing, [defendant] represented to the court that it did not assist the IPR petitioners with any prior art search, that it took no part in drafting the IPR petitions, and that it is not in communication with the IPR petitioners concerning the IPR. . . . [R]equiring [defendant] to submit to a weaker estoppel foreclosing it from relitigating claims made and finally determined in the IPR proceedings is necessary to effect the PTO’s interest in protecting the integrity of PTO proceedings and in preventing parties from having a 'second bite at the apple.' The court thus conditions the stay on [defendant's] agreement to be estopped only from asserting any invalidity contention that was actually raised and finally adjudicated in the IPR proceedings."

Evolutionary Intelligence, LLC v. Sprint Nextel Corporation et al, 5-13-cv-04513 (CAND February 28, 2014, Order) (Whyte, J.)

No Stay Pending Interlocutory Appeal of Denied Stay Pending CBM Review

The court denied defendants' motion to stay pending an interlocutory appeal of the court's earlier decision to deny a motion to stay pending CBM review. "Defendants have failed to cite, and this Court is unaware of, any authority holding that attending a Markman hearing in the middle of a co-pending reexamination proceeding constitutes 'irreparable injury.'. . . To the extent any further statements of Plaintiff’s [during CBM review] or amendments to claims may affect the Court’s claim construction, such is fully remediable with supplemental claim constructions. . . . This Court is mindful that the Federal Circuit, in reviewing whether or not this case should be stayed, is tasked with ensuring that AIA § 18(b) is 'consistently applied across cases and across the various district courts.'. . . However, the Federal Circuit’s decision-making does not depend on whether the proceedings below are stayed pending appeal. Defendants have failed to demonstrate how this Court’s denial of a stay pending interlocutory appeal would impede, in any way, the Federal Circuit’s interest in the consistent application of AIA § 18(b) across the nation’s district courts."

VirtualAgility, Inc. v. Salesforce.com, Inc. et al, 2-13-cv-00011 (TXED February 27, 2014, Order) (Gilstrap, J.)

Diligence Required to Amend Invalidity Contentions Assessed from Disclosure of Proposed Constructions

The court denied defendants' motion to amend their invalidity contentions three months after claim construction. "For most of the constructions that differed from [defendant's] proposed constructions, the Court simply adopted the constructions proposed by [plaintiff]. . . . Therefore, [defendant] was aware of the risk that the Court could adopt these constructions . . . yet it waited until more than a year later to seek amendment of its invalidity contentions. . . . [Defendant] notes that a few of the Court’s claim constructions differ from those proposed by both parties. However, [it] does not state that it is these particular constructions that necessitate amending its invalidity contentions. . . . [E]ven assuming it was proper for [defendant] to wait until the Court’s claim construction order was issued before seeking amendment, [it] was not diligent in seeking amendment once that basis for amendment was discovered."

Verinata Health, Inc. et al v. Sequenom, Inc. et al, 3-12-cv-00865 (CAND February 26, 2014, Order) (Illston, J.)

EDTX Authorizes Optional “Track B” Case Management Order for Post-AIA Cases

Chief Judge Davis recently entered General Order 14-3 which provides an optional Case Management Order for patent cases. According to Ed Reines of Weil, Gotshal & Manges, “This case management initiative by general order of Chief Judge Davis creates a dual track system of patent cases in the Eastern District of Texas. It addresses the increase in smaller cases that warrant more expedited treatment and responds to concerns expressed throughout the bar about the challenges facing litigants post-AIA. Practitioners with cases pending in the district will do well to familiarize themselves with this order and to employ it when appropriate. This is a complement to the series of recent case management innovations adopted under the leadership of Chief Judge Davis, including the model orders limiting the number of patent claims and prior art references asserted, as well as ediscovery.”

Click here to view the order.

Defendant’s Legal Expenses “Particularly Helpful” in Determining Reasonableness of Plaintiff’s Fee Request

The magistrate judge recommended granting in part plaintiff's motion for attorneys’ fees under 35 U.S.C. §285 following summary judgment, an appeal, and a jury trial, and approved counsel's hourly billing rates of $335-495. "[Plaintiff's attorneys' fees expert] credibly testified that plaintiff's attorneys had obtained excellent results in this case which the Court does not take exception with. . . . In terms of the reasonableness of plaintiff's fee request, the Court finds it particularly helpful to compare that with [defendant's] own legal expenses in terms of hourly rates, the number of hours that were expended, and the overall amounts that were billed. On all three of those fronts, what [defendant] logged and charged in this case exceeded that which was spent by the plaintiff. . . . And given the different purpose that §285 serves as compared with other grounds upon which attorney's fees can be awarded such as Rules 11 or 37, the Equal Access to Justice Act, or other fee provisions within Title 42, the Court declines to use the hourly rates that were arrived at in resolving the discovery-based disputes that arose earlier in this case."

Innovention Toys, LLC v. MGA Entertainment, Inc., et al, 2-07-cv-06510 (LAED February 24, 2014, Order) (Chasez, M.J.)

Indemnity Agreement May be Offered to Show Willfulness

The court denied defendant's motion in limine to exclude "all testimony, argument and reference to the alleged indemnification of defendant." "Plaintiffs want to use Defendant’s indemnification by its manufacturer as proof of Defendant’s knowledge that an infringement claim was likely, which is relevant to willfulness. The indemnification agreement is not being used to infer liability, which has already been determined by the Court as to [one product] and will be determined based on the technical evidence as to the [other product]. Therefore, evidence of the indemnity is unlikely to cause the inferential leap that FRE 411 guards against. Instead, the evidence directly shows that Defendant had knowledge of the risk that it infringed the [patent]."

I-Flow LLC et al v. Progressive Medical, Inc., 8-12-cv-01064 (CACD February 21, 2014, Order) (Guilford, J.)

Infringement Expert’s “Parroting Claim Language” Not an Acceptable Methodology

The court granted defendants' motion in limine to exclude plaintiff's infringement expert and his report. "[Plaintiff’s infringement expert] did nothing more than try defendants’ products on various (unidentified) ear molds and state that defendants’ products infringed based on conclusory ipse dixit recitations of claim limitations with no explanation or analysis. . . . [He] never conducted any quantitative analysis (i.e., size, measurements, dimensions, or positioning) of the earbuds, headsets, and ear molds he examined. . . . [He] also never even identified which [of the 60] ear molds . . . he tested. . . . What justifies striking him at the end of the day is that his report merely parroting the claim language to find infringement will be unhelpful to the jury. Bald claim-ridden statements — with no analysis — that simply proclaim that defendants’ products infringe cannot help the jury in making their findings."

Plantronics, Inc. v. ALIPH, INC. et al, 3-09-cv-01714 (CAND February 20, 2014, Order) (Alsup, J.)