Digital Rights Patents Not Invalid Under 35 USC §101

The court denied defendants' renewed motion for judgment as a matter of law that plaintiff's digital content patents were invalid for lack of patentable subject matter because the patents were not directed toward an abstract idea and did not lack an inventive concept. "At a high level, the [asserted] Patents are generally directed toward systems and methods for controlling the use and distribution of digital works in accordance with 'usage rights' through the use of 'trusted' systems. . . .[T]he Patents-in-Suit are not directed toward an abstract idea, at least because they are directed toward patent-eligible methods and systems of managing digital rights using specific and non-generic 'trusted' devices and systems. Further, even arguendo, if the Court found that the patents are simply directed toward the 'abstract idea of enforcing usage rights and restrictions on digital content' as Defendants propose, which it does not, the claim limitations, individually and 'as an ordered combination,' are sufficient to ensure that the Patents-in-Suit amount to 'significantly more' than a patent simply on that abstract idea. . . . At the very least, the Patents-in-Suit disclose particular solutions for the problem of 'enforcing usage rights and restrictions on digital content' that '(1) [do] not foreclose other ways of solving the problem, and (2) recite[] a specific series of steps that result[] in a departure from the routine and conventional' way of managing digital rights."

ContentGuard Holdings, Inc. v. Amazon.com Inc. et al, 2-13-cv-01112 (TXED August 6, 2015, Order) (Gilstrap, J.)

No Stay Pending IPR Covering Fewer Than 25% of Litigated Claims

The court denied defendants' motion to stay pending inter partes review because of the advanced stage of the case and lack of potential simplification of issues. "Part of the quid pro quo of any stay pending inter partes review before the Patent Office is the promise of simplification. . . . Where the IPR will address some, but not all, claims asserted in the district court, relative to the quo the value of the quid shrinks considerably. . . . [A] trial date is set [in 12 months], the court has construed claims not once, not twice, but three times, the parties have exchanged voluminous document productions — in the Wave 1 cases at the very least — and fact discovery is set to close in just over a month. With the trial date just under a year away, these cases have already reached an advanced stage, and this court has put significant work into getting these cases this far. . . . With fewer than 25 percent of the claims at issue subject to inter partes review, the overall effect of any PTAB decision — whether it cancels all or some claims, amends all or some claims, or allows all or some claims to survive — will be minimal relative to the number of claims not under review."

Adaptix, Inc. v. Dell, Inc. et al, 5-14-cv-01259 (CAND August 5, 2015, Order) (Grewal, M.J.)

No Rule 11 Sanctions for Unsuccessful RICO Counterclaim Against NPE Plaintiff

The court denied plaintiff's motion for Rule 11 sanctions after the court dismissed defendant's RICO claims. "Defendant contends that its counterclaim was 'premised on a far broader and more nefarious course of conduct than the mere filing of a single lawsuit.' Defendant alleged that Plaintiff’s business model was based on filing hundreds of frivolous lawsuits and the seeking of calculated nuisance settlements. . . . Defendant points out that other jurisdictions have favorably viewed RICO claims based on facts similar to its RICO claim. Although the Court dismissed the RICO counterclaim in favor of Plaintiff, the Court concludes that the RICO counterclaim was neither frivolous nor brought for any improper purpose. While the Court ultimately disagreed with Defendant’s legal theory, that alone cannot form a basis under Rule 11."

ArrivalStar SA et al v. Demandware, Inc., 9-15-cv-80098 (FLSD August 4, 2015, Order) (Marra, J.)

Which Fees are Recoverable Under 35 USC § 285?

Following a decision to award § 285 attorney fees, district courts often resolve a second wave of disputes concerning the amount and type of fees recoverable. Because district courts exercise broad discretion to fashion a reasonable fee award, these disputes encompass a broad range of factors and arguments including (i) reasonableness of hourly rates, (ii) reasonableness of hours billed, (iii) sufficiency and accuracy of billing records, (iv) reasonableness of law firm staffing, (v) fees for unrelated, unnecessary or non-patent disputes, (vi) fees for disputes in which the award recipient did not prevail, (vii) fees incurred for non-lawyer services, (viii) recovery of contingency fees, and (ix) many other equitable considerations. Since 2008, district courts have addressed these issues in 117 decisions.

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Fees for “Litigation Database Analysts” Recoverable Under 35 USC § 285

The court denied plaintiffs' motion for attorneys' fees under 35 U.S.C. § 285, but nonetheless addressed the reasonableness of the requested fees, concluding that fees for Litigation Database Analysts were recoverable. "The Court would . . . award attorneys' fees for work done by Litigation Database Analysts. . . . [W]hile technology specialists' duties are not strictly legal in the traditional sense, the Court believes that these technicians provide meaningful value to law firms and, ultimately, clients during litigation. . . . These technology specialists now do some of the specialized work that paralegals used to do. . . . The specialist is improving the quality of work product, and as a sensible approach, the case law should not penalize the practice in the legal community that is becoming more technology-based and efficient. . . . To do otherwise would be to allow the case law to lag behind the introduction of document management products and databases in the twenty-first century. . . . Document management is in great part what law firms do today, and clients expect to pay for that work. It is only fair for courts to follow the legal profession's development of new means of providing high-quality representation and recognize technology specialists' contributions as being legal in nature."

General Protecht Group, Inc., et al v. Leviton Manufacturing Co., Inc., 1-10-cv-01020 (NMD August 3, 2015, Order) (Browning, J.)

IRS Determination That License Agreements Were Not Arms Length Not Relevant to Determination of Reasonable Royalty

The court denied defendant's motion to compel the production of documents regarding the IRS's determination that plaintiff's licensing agreements with its Puerto Rican subsidiary were not arms-length transactions because the documents were not relevant to the remanded damages trial. "Defendant asserts that Plaintiff has relied in the past and will rely again on licensing and royalty agreements with its related companies to inform a reasonable royalty determination in this case. . . . Inasmuch as documentation related to royalty rates between Plaintiff and its related entities may not even be relevant on the issue of determining a reasonable royalty in the very technology at issue in this case, documents regarding royalty rates involving other technologies certainly cannot be relevant. Just to be clear, this Court is not deciding whether or not evidence of the royalty rate paid by Plaintiff’s affiliates to Plaintiff on the technology involved in this case is relevant. This Court is deciding that evidence regarding the royalty rates paid by Plaintiff’s affiliates to Plaintiff on other technologies and evidence regarding the decision by the IRS that the rates paid on those technologies was not the product of arms-length negotiations is not relevant in this case."

Medtronic Sofamor Danek USA, Inc., et al v. Nuvasive, Inc., 3-08-cv-01512 (CASD July 31, 2015, Order) (Dembin, M.J.)

Authorizing Sales of Generic Drug Undermines Plaintiff’s Request for Injunction Pending Appeal

The court denied plaintiffs' motion for an injunction pending their appeal of the court's post-remand order which again found plaintiffs' drug patent invalid. "[Plaintiffs'] likelihood of success remains about the same as before. On one hand, the court has concluded that the [patent] is invalid on an additional, independent basis. On the other — while the court stands by its most recent judgment — it also recognizes that the case involves close calls, and that the Federal Circuit reviews de novo this court’s legal conclusions on obviousness and enablement. . . . But [plaintiff] is now less likely to be irreparably harmed absent an injunction. By opting to begin selling an authorized generic version of [its drug product], [plaintiff] — and not [defendant] — created the very risk of price erosion it fears. . . . Forcing [defendant] to wait even longer than the 11 months it has already waited since receiving FDA approval would increase the likelihood [defendant] would derive no revenue — and not merely delayed revenue — from its generic product. . . . Meanwhile, [plaintiff], by virtue of having launched its own generic, will have had the time to establish itself in the market for generic [product]."

Par Pharmaceutical, Inc. et al v. TWi Pharmaceuticals, Inc., 1-11-cv-02466 (MDD July 30, 2015, Order) (Blake, J.)