Paragraph IV Certification Not A “Civil Action” Triggering § 315(a) IPR Bar

The court denied plaintiffs' motion to enjoin ANDA defendants from participating in inter partes review and rejected plaintiffs' argument that defendants were barred from seeking IPR because their Paragraph IV certification was a previously filed civil action challenging plaintiffs' patent. "35 U.S.C. § 315(a) does not bar Defendants from seeking inter partes review before the PTAB because Defendants did not file a 'civil action' by filing a Paragraph IV Certification. . . . A Paragraph IV Certification is merely an administrative application to the FDA certifying that the patent in question is invalid or is not infringed by the generic product; it is not part of any judicial proceeding. . . . Nor is the Court persuaded that the statutory framework of the Hatch-Waxman Act would be undermined if this Court allowed inter partes review before the PTAB to proceed in parallel with this case."

Senju Pharmaceutical Co., Ltd. et al v. Metrics, Inc. et al, 1-14-cv-03962 (NJD March 31, 2015, Order) (Simandle, J.)

Association with Standards Setting Organization May Provide Knowledge Sufficient to Support Induced and Willful Infringement Claims

The court denied defendants' motion to dismiss plaintiff's induced and willful infringement claims for failure to sufficiently allege knowledge of the patents-in-suit. "From Plaintiff’s allegations involving 3GPP and ETSI, one can infer that the patents-in-suit are implicated in a standard. Although Plaintiff’s factual allegations are not robust, at this stage of the proceedings it plausible that Defendants that (1) associate with a standards-setting organization and that (2) make or sell products that allegedly infringe standard-implicated patents would be motivated to maintain some level of familiarity with patents declared essential to the standard. Furthermore, it follows from Defendants’ alleged knowledge of the patents that Defendants plausibly knew their customers and end users directly infringe the patented claims when they use the accused devices as expected."

Cellular Communications Equipment LLC v. HTC Corporation et al, 6-13-cv-00507 (TXED March 27, 2015, Order) (Davis, J.)

New Damages Trial on $131 Million Verdict Required by Post-Trial Finding of Indefiniteness as to Three of Four Asserted Claims

The court granted defendant's motion for a new trial as to damages only after the court found that certain claims of plaintiff's cochlea stimulation patents were invalid as indefinite. "[T]he jury awarded [plaintiff] damages in the [amount of ] $131,216,325.00 for [defendant's] infringement of [two claims of two patents]. However, the court, based on the testimony and evidence presented during both the jury and bench trial, found [one claim of the first patent] and [both claims of the second patent] to be invalid on indefiniteness grounds. . . . [T]he damages awarded by the jury were not broken down as to each claim or patent. Therefore . . . the court believes that it must grant the motion for new trial so as to allow a damages trial with respect to [the remaining claim]."

Alfred E. Mann Foundation for Scientific Research v. Cochlear Corporation, et al, 2-07-cv-08108 (CACD March 31, 2015, Order) (Olguin, J.)

Motion to Terminate IPR for Failure to Name Real Party-In-Interest Denied as Untimely

The Board denied the patent owner's motion to terminate proceedings for failure to name real parties-in-interest because the patent owner's arguments were not timely. "[I]f Patent Owner had challenged the RPI identification in its Preliminary Response, and if we had found the RPI identification to be defective, Petitioner, at a minimum, would have had an opportunity to re-file its Petition correcting any problems therewith. Patent Owner, instead, waited until . . . a mere six weeks before the deadline for the Board to issue its Final Written Decision . . . to bring any issue with the RPI identification to the attention of the Board. We agree with Petitioner that to grant Patent Owner’s Motion under these circumstances would create incentives encouraging Patent Owners to reserve arguments relating to RPIs that could be brought early in the proceeding until after all the merits in the underlying review have been briefed and argued. Our rules, however, should be construed to encourage the opposite. . . . [The] Patent Owner asserts that '[a] challenge to the naming of RPIs is a jurisdictional issue that can be raised at any time.' . . . The portion of the Final Rule upon which Patent Owner appears to rely, states that '[a]fter institution, standing issues may still be raised during the trial.' . . . [T]his statement . . . cannot be seen as 'an open invitation to submit late RPI challenges where a [Patent Owner] could have raised the issue at the outset.'"

Petition for Inter Partes Review by Sony Computer Entertainment America LLC, IPR2013-00634 (PTAB April 2, 2015, Order) (Meyer, APJ)

Damages Expert’s Testimony Excluded for Failure to Apportion the Value of Hardware Components Necessary to Practice Patented Invention

The court granted defendants' motion in limine to exclude the testimony of plaintiff's damages expert regarding apportionment. "[Plaintiff's expert] determined what hardware components of the accused products were necessary to practice the patent, identifying this as the [smallest salable patent-practicing unit]. Then, he determined the cost of those necessary components as compared to the total cost of the accused product to determine what percentage of the total cost of the accused product was attributable to the SSPPU. [He] applied that percentage to the average sales price of the accused product to create an apportioned royalty base. . . . Although [the expert] did apportion out those hardware components not required to practice the patented feature, he did not properly apportion any value to the necessary hardware components. . . . [Plaintiff] could not plausibly argue that the processor does not have any other function besides practicing the patented feature, but that is exactly what [the expert's] apportionment signifies. His failure to identify the value of those necessary hardware components renders his opinion flawed. . . . Moreover, [the expert's] value determination based on comparing the costs of the necessary hardware components to practice the patented technology and the total cost of the accused product also fails to properly consider the value of the patented feature."

Intelligent Verification Systems, LLC v. Microsoft Corporation, et al, 2-12-cv-00525 (VAED March 31, 2015, Order) (Leonard, M.J.)

Niro Firm Sanctioned in Second Case for Filing Infringement Claims After Learning of False Declarations During Prosecution

The court granted defendant's motion to sanction plaintiff's counsel under 28 U.S.C. § 1927 and the court's inherent authority for pursuing an infringement action after the founder sent counsel an email stating that the actual functionality of his prototype did not match the information in his declarations to the PTO. "[Plaintiff's founder's] admissions, that his device 'did not actually receive caller id automatically from the telephone network,' and that the device 'did not operate,' are in direct conflict with [his] Rule 131 declaration. . . . Filing the complaint in the face of such troubling facts is not a path that a reasonably careful attorney would have followed. . . . [Counsel's] focus on whether [plaintiff's founder] himself believed there was an actual reduction to practice misses the point. The issue in this case is not what level of legal knowledge [plaintiff's founder] possessed about the intricacies of patent law; rather, the issue is whether [plaintiff's] attorneys knew that [his] Rule 131 Declaration contained false statements about having a 'working prototype,' and whether [counsel] filed and continued this case, despite knowing the patent had been procured through fraud on the PTO. . . . [W]hatever [the founder's] confusion was about the legal requirements for actual reduction to practice, it did not absolve [plaintiff's] attorneys, trained in patent law, to see that the Rule 131 Declarations were deceitful and would completely undermine [plaintiff's] ability to litigate patent infringement claims. . . . [Counsel] not only repeatedly misrepresented the functionality of [the founder's] prototypes, but have continued to make misleading statements about what [counsel] actually knew and when they knew it."

Intellect Wireless, Inc. v. Sharp Corporation et al, 1-10-cv-06763 (ILND March 31, 2015, Order) (Pallmeyer, J.)

Plaintiff’s Assertion of Patent Known to be Owned by Another Justifies Award of Attorney Fees

Following a jury trial, the court granted defendants' motions for attorney fees under 35 U.S.C. § 285 where plaintiff conspired to defraud two entities of ownership of the patents defendants were accused of infringing. "[Plaintiff] contends that this is not an exceptional case because the jury made no findings regarding the existence of a conspiracy or an intent to deceive the [PTO] or [the rightful owner]. . . . [Plaintiff] knew, when it brought this action, that it was not the legal owner of the patent. . . . Despite this knowledge, it asserted that it was the rightful owner of the patent and brought this infringement action. This conduct undoubtedly constitutes bad faith. . . . Bringing this action was nothing more than a perpetuation of the conspiracy. . . . Litigants must be discouraged from bringing an infringement action based upon a patent they know or should have known they do not rightfully own, especially where they defrauded the PTO and the rightful owner of the patent."

Alzheimer's Institute of America, Inc. v. Avid Radiopharmaceuticals, et al, 2-10-cv-06908 (PAED March 30, 2015, Order) (Savage, J.)