Post-IPR Estoppel Does Not Apply to New Invalidity Theories​

The court granted plaintiff's motion to clarify an earlier order concerning the meaning of "ground for invalidity" for purposes of post-IPR estoppel under 35 U.S.C. § 315(e), but deferred ruling on whether defendant was estopped from asserting a specific theory on invalidity. "[Plaintiff] essentially asks the court to explain what a 'ground for invalidity' is. . . . [T]he defendant is not locked into the precise argument made in its IPR petition. But if the new theory relies on different, uncited portions of the prior art, attacks different claim limitations, or relies on substantially different claim constructions, then the new theory is tantamount to a new invalidity ground, and the court will treat it like a non-petitioned ground subject to estoppel. . . . At this point in the case, I cannot tell who, if anyone, is playing fast and loose with the meaning of [a claim term]. But it hardly seems fair to restrict [defendant] to the claim construction used in the IPR, if [plaintiff] is free to re-tool its infringement case with new claim constructions, as [plaintiff] suggests that it is free to do. I will defer a decision on whether these principles would estop [defendant] from contending that claim 6 is anticipated by Keeler under the alternative interpretation of [the claim term]. The parties are free to argue the § 315(e) estoppel issue at summary judgment."

Douglas Dynamics, LLC v. Meyer Products LLC, 3-14-cv-00886 (WIWD May 15, 2017, Order) (Peterson, USDJ)

Apple Ordered to Produce Discovery Regarding Unreleased Products and Prototypes

​ The ALJ granted complainant's motion to compel respondent to produce documents regarding unreleased products and prototypes expected to be imported before the conclusion of the evidentiary hearing. "The Commission routinely grants discovery with respect to future products. [Respondent] contends that it should be the exception to this rule, as [it] 'takes significant measures in an effort to maintain absolute secrecy over the details of its unreleased products under development.' As the undersigned has previously noted, however, [respondent] is not unique in wanting to preserve the confidentiality of its unannounced products. Additionally, a party is not permitted to unilaterally withhold discovery due to confidentiality concerns. The proper procedure for addressing such concerns is through a motion for a protective order. Notably, [respondent] has not made such a motion here."

Electronic Devices, Including Mobile Phones, Tablet Computers, and Components Thereof, 337-TA-1038 (ITC May 11, 2017, Order) (Bullock, ALJ)

IPR Estoppel Applies to “Subsets” of Prior Art Groups That the Petitioner Raised or Could have Raised During IPR​

The magistrate judge recommended partially granting plaintiff's motion for summary judgment that IPR estoppel barred defendant from asserting certain "subsets" of prior art groups previously asserted as unpatentability grounds in the IPR. "[T]he PTAB instituted IPR . . . under § 103(a) based on the combination of Kenoyer, Briere, and Hurley. [Defendant] should be estopped from asserting Kenoyer and Briere as a basis for obviousness at trial because [defendant] raised or could have raised this combination during IPR proceedings. Similarly, [defendant] should be estopped from asserting Kenoyer alone . . . because Kenoyer is a subset of Kenoyer, Briere, and Hurley. This portion of the recommendation, however, extends only to subsets of invalidity grounds that [defendant] raised or reasonably could have raised during IPR proceedings."

Biscotti Inc. v. Microsoft Corporation, 2-13-cv-01015 (TXED May 11, 2017, Order) (Payne, MJ)

IPR Estoppel Applies to Non-Instituted Grounds Included in a Petition Unless the Decision Not to Institute was Purely Procedural​

The magistrate judge recommended partially granting plaintiff's motion for summary judgment that IPR estoppel barred defendant from asserting certain prior art references and rejected the argument that IPR estoppel applied only to defenses raised after IPR institution. "The Court recommends adopting the narrow view of [Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016), cert. denied, (U.S. Oct. 31, 2016)] and [HP Inc. v. MPHJ Technology Inv., LLC, 817 F.3d 1339 (Fed. Cir. 2016)]. Namely, the Court reads Shaw and HP to exempt an IPR petitioner from § 315(e)'s estoppel provision only if the PTAB precludes the petitioner from raising a ground during the IPR proceeding for purely procedural reasons, such as redundancy. . . . Section 315(e) estops [defendant] from asserting at trial: (1) grounds for which the PTAB instituted IPR and determined those grounds to be insufficient to establish unpatentability after a trial on the merits; (2) grounds included in a petition but determined by the PTAB to not establish a reasonable likelihood of unpatentability (in other words, administrative review on the merits of a ground); and (3) grounds not included in a petition that a 'skilled searcher conducting a diligent search reasonably could have been expected to discover.' . . . [Defendant] is not estopped from asserting grounds included in a petition but which the PTAB found redundant or declined to institute review for another procedural reason."

Biscotti Inc. v. Microsoft Corporation, 2-13-cv-01015 (TXED May 11, 2017, Order) (Payne, MJ)

Plaintiff’s Failure to Dismiss in Light of Unrebutted Evidence of Noninfringement Warrants Rule 11 Sanctions​

The magistrate judge recommended Rule 11 sanctions against plaintiff for costs and fees incurred after defendant filed a motion to dismiss with declarations showing it "does not make, sell, offer to sell, or import any of the accused [products]." "[W]hile it is not clear that [plaintiff] undertook a proper investigation before filing suit against [defendant], [plaintiff's] conduct became objectively unreasonable at the filing of their opposition to [defendant's] Motion to Dismiss. . . . While [plaintiff] admits the question of liability was unclear at the time of filing, this relationship became abundantly clear at the filing of [defendant's] Motion to Dismiss with supporting declarations. . . . Tellingly, [plaintiff] decided shortly after the filing of its response to file suit against [defendant's licensee] [two months ago], but did not dismiss its claims against [defendant]. . . . [Plaintiff] did not reach out or file a stipulation of dismissal upon receipt and review of [defendant's] Motion and only attempted to file such a dismissal after it knew the Court was considering sanctions. . . . [T]his filing by [plaintiff] was simply too late to absolve [it] of its unreasonable conduct in pursuing opposition to [defendant's] Motion. . . . Instead, [plaintiff] continued to pursue its claims at the expense of the Court and the parties. The Court finds that this conduct warrants sanctions under Rule 11."

Blue Spike, LLC v. Caterpillar Inc. et al, 6-16-cv-01361 (TXED May 10, 2017, Order) (Love, MJ)

Patentee's Infringement Claim Against Customers Creates Substantial Controversy With Manufacturer​

The court denied defendant's motion to dismiss plaintiffs' declaratory relief action and rejected defendant's argument that its lawsuit against plaintiffs' customer was insufficient to create an actual controversy with plaintiffs. "[Defendant's] litigation against [plaintiffs' customer] was an affirmative act by [defendant] to enforce its patent rights against alleged infringement by [plaintiffs'] Tree. . . . Its claim charts referred only to [plaintiffs'] trees and explained how [defendant] believed [plaintiffs'] trees met each and every claim of [defendant's] patents. . . . [Defendant] argues that a lawsuit against a manufacturer’s customer is not sufficient for Article III standing. . . . As [defendant] admits, its claims against [the customer] were based solely on its selling [plaintiffs'] Trees, something [a plaintiff] itself did. Unlike [other cases cited by defendant], [defendant's] infringement claims against [the customer], based on its sales of [plaintiffs'] trees, necessarily demonstrate a case or controversy with [plaintiffs]."

UCP International Co., Ltd. et al v. Balsam Brands Inc. et al, 3-16-cv-07255 (CAND May 9, 2017, Order) (Orrick, USDJ)

Recent Jury Verdict Subject to Post-Trial Motions and Appeal Not a Reliable Data Point for Damages Expert Opinion

The court denied plaintiff's motion to supplement its damages expert's report to address a recent $9.1 million jury verdict against a consolidated defendant because that judgment was not yet final and a reliable data point. "[T]o date, the Court has yet to enter final judgment in the [consolidated] case. [Plaintiff] and [the consolidated] are currently participating in post-trial motion practice in accordance with the Court’s Order setting the post-trial briefing schedule. . . . [U]ntil a final judgment exists and motions under Rules 50(b) and 59 have been considered, the jury’s verdict is not fixed and remains subject to multiple avenues of attack. It further goes (almost without saying) that after this lengthy process results in a final judgment entered by this Court, the resulting judgment is then subject to appeal. In short, the verdict in the [consolidated] case is a long way from being an established and reliable data point that could properly be urged by [plaintiff] in its upcoming trial against [these defendants]."

Saint Lawrence Communications, LLC v. ZTE Corporation et al, 2-15-cv-00349 (TXED May 8, 2017, Order) (Gilstrap, USDJ)