Hatch-Waxman Bars Declaratory Relief Claim Against ANDA Applicant's Prospective Supplier

The court granted defendant's motion to dismiss for lack of subject matter jurisdiction with respect to plaintiff's claim that a drug manufacturer defendant would infringe plaintiff's drug patent if another defendant's ANDA was approved. "[W]hether [movant] actually manufactures the generic [drug product] is speculative because the FDA has not approved the ANDA product; and secondly, the Court may rule in [plaintiff's] favor in this case. Both outcomes are unknown at this time, and it is premature to speculate as to [movant's] future role. . . . While the safe harbor provision protects [movant] from being sued, the Declaratory Judgment Act, if one accepts [plaintiff's] argument, would allow suit. When interpreting two conflicting statutes, the 'more specific statute controls over the more general one'; hence the Hatch-Waxman provision controls."

United Therapeutics Corporation v. Sandoz, Inc., 3-12-cv-01617 (NJD March 31, 2014, Order) (Sheridan, J.)

Patent Valuation Based on Cross-License Settlement Agreement Excluded

The court granted in part plaintiff's motion in limine to exclude the valuation of an agreement "which settled prior patent litigation under the [patent-in-suit] . . . and included non-exclusive, cross-licenses." "[Plaintiff] argues that the potential probative value of the . . . Agreement is dubious, since the agreement includes [plaintiff's] payments for the [cross-licensed] patents, rather than simply reflecting the economic footprint of the [patent-in-suit]. . . . [I]t does not appear that the [agreement] is uniquely relevant and reliable, not because it was arrived at in a litigation setting, but because it was arrived at by an effort to value cross-licenses. . . . The mere fact that it appears to be the only such license available does not justify its admission. . . . [Defendant] is free to make a proffer demonstrating that the [agreement] is in fact uniquely relevant and reliable, and the parties may refer to the fact that the [agreement] creating a cross-license arrangement, including use of the [patented] invention, exists, but the actual value of the license in that agreement is excluded."

Douglas Dynamics, LLC v. Buyers Products Company, 3-09-cv-00261 (WIWD April 4, 2014, Order) (Conley, J.)

Expert Testimony Based On Flawed Lost Profits Apportionment Methodology Excluded

The court granted in part plaintiff's motion to exclude the testimony of defendants' damages expert based on a flawed lost profits apportionment methodology. "[Defendants' expert] relied upon an apportionment factor of 16.7% to identify the portion of Defendants’ profits that should be attributed to Defendants’ unlawful conduct. In arriving at this percentage, [he] relies upon the testimony of [plaintiff’s national sales manager] and the report of . . . an expert who was subsequently withdrawn by Defendants. Despite a lack of experience in this area of marketing, [defendants' expert] essentially combined [their] testimony . . . and settled on five factors of demand for the product at issue. He then added a sixth factor, the effect of the alleged unlawful activity. Most troublesome, he then attributed equal weight to all six factors in creating his apportionment formula. There is no evidence in the record that supports this calculation. Therefore, the Court finds that the calculation of damages based on this apportionment theory is flawed and is not admissible."

Schutz Container Systems, Inc. et al v. Mauser Corp. et al, 1-09-cv-03609 (GAND March 31, 2014, Order) (Story, J.)

Magistrate Judge’s Order Declining Construction of All Disputed Terms Vacated

The court sustained plaintiff's objection to the magistrate judge's claim construction order which did not construe all disputed terms. "[T]he Magistrate Judge did not construe all of the claim terms in dispute. That neither party offered a proposed construction that the Magistrate Judge found acceptable is not a sufficient reason to leave disputed terms without interpretation. Nor did counsel's failure to address these claims at oral argument or in their agreement constitute waiver. . . . Furthermore, the terms presented are technical in nature and the Markman opinion offers no basis to support a finding that they would be readily understood by an average fact finder. . . . That these terms would be understood by a person of ordinary skill in the art does not mean that construction is unnecessary. Instead, the Court should base its constructions on what such a person would understand those terms to mean. . . . [W]ith respect to construction of [the unconstrued terms] . . . the order of the United States Magistrate Judge be, and it is hereby, vacated. The Court will issue its own order with respect to those claims after review of the briefs on file."

United Services Automobile Association v. Mitek Systems, Inc., 5-12-cv-00282 (TXWD April 2, 2014, Order) (Hudspeth, J.)

Evidence of Pending Reexam Excluded, Along With Presumption of Validity

The court granted plaintiff's motion in limine to exclude evidence of nonfinal reexamination proceedings, but precluded plaintiff from arguing a presumption of validity to the jury. "Telling the jury that the patent has been called into question by the patent office may significantly influence the jury’s determination of the issues of infringement and invalidity. . . . To understand the difference between the two proceedings, [plaintiff] would have to offer argument and evidence to the jury on the different evidentiary burden before the patent office as well as the different claim construction used by the examiner and then explain how these differences impacted the reexamination proceeding. Presenting this additional information will waste valuable judicial resources and jury time and would only serve to confuse the jury. . . . However, the court finds that it would be prejudicial to [defendant] to allow argument and instruction on the [patent-in-suit’s] presumption of validity because the 'rationale underlying the presumption of validity is much diminished where the evidence before the factfinder was not before the PTO during the examination process.'"

Server Technology, Inc. v. American Power Conversion Corporation, 3-06-cv-00698 (NVD March 31, 2014, Order) (Hicks, J.)

Infringer’s Market Capitalization “Strongly Counsels Against” Doubling or Tripling $1.1 Billion Award

Following a jury verdict of $1.1 billion, the court granted plaintiff's motion for enhanced damages, but ordered only a 23% penalty. "[T]he Court believes that four of the Read factors support an award of enhanced damages (factors 1, 2, 7 and 9), four of the factors are neutral (3, 5, 6, 8), and one of the factors weighs against an award of enhanced damages (4). . . . [W]ith reference to [the infringer’s size and financial condition] . . . the Court does not believe that [defendant] is sufficiently capitalized to sustain an award of double or treble the current damages award. . . . Such a significant penalty would effectively value the infringement at a rate of nearly fifty percent or one-third of the current market capitalization of the entire company. Based on the historical data of the stock price and the decline of same when the jury’s verdict of $1.169 billion was announced, the Court can logically infer that the stock price and market capitalization would again decrease if such a significant penalty was imposed. . . [Defendant's] financial condition does not support an enhancement and strongly counsels against enhancing damages to the degree requested by [plaintiff]."

Carnegie Mellon University v. Marvell Technology Group, Ltd., et al, 2-09-cv-00290 (PAWD March 31, 2014, Order) (Fischer, J.)

BlackBerry Granted Preliminary Injunction on Physical Smartphone Keyboard

The court granted plaintiff's motion for a preliminary injunction precluding defendant from selling its smartphone keyboard product and found plaintiff established irreparable harm. "[Plaintiff] has convincingly shown that [its] keyboard designs are a key driver of demand and goodwill for [its] phones. [Defendant's] keyboard directly targets the segment of smartphone users that prefer a physical keyboard, the market in which [plaintiff] competes. . . . To the extent that [defendant] succeeds in allowing users to replace their phone for 'typing and correspondence' with [defendant's] keyboard coupled with an iPhone, it likely does so at the expense of [plaintiff]. . . . I reject [defendant's] contention that [plaintiff] is not irreparably harmed because it is already struggling and losing market share. To hold otherwise would prevent struggling companies from obtaining injunctions at the time when they may be the most vulnerable to harm from infringing conduct."

BlackBerry Limited v. Typo Products LLC, 3-14-cv-00023 (CAND March 28, 2014, Order) (Orrick, J.)