Damages Opinion Based on Composite Royalty Rate Excluded as Unreliable

The court granted in part defendants' motion to exclude the testimony of plaintiffs' damages expert because his royalty base was based on a composite rate. "Defendants explain that to reach his damages calculation, [the expert] applies a royalty base that includes units accused under any asserted patent to a royalty rate with contributions from every asserted patent. . . . I do not believe that use of a composite rate is consistent with Federal Circuit case law. . . . [The expert's] royalty rate assigns to each accused product the same per-unit royalty regardless of how many patents that product is accused of infringing. Thus, his analysis results in a damages calculation that overcompensates Plaintiffs and does not appropriately reflect the inventions' footprints in the marketplace."

MiiCs & Partners, America, Inc. et al v. Funai Electric Co., Ltd. et al, 1-14-cv-00804 (DED December 7, 2017, Order) (Andrews, USDJ)

Nineteen Work-at-Home Employees Does Not Establish Regular and Established Place of Business For Venue

The court granted defendant's motion to dismiss for improper venue because defendant did not have a regular and established place of business through its work-at-home employees who resided in the district. "Although [defendant] has nineteen employees who are permitted to work from their individual residences in the Eastern District of Texas, the Court finds that none of these residences are 'places of the defendant'. . . . [Defendant] does not lease, or own any portion of these employees’ homes in the Eastern District of Texas. [Defendant's] employees do not regularly maintain physical inventory in this District, are 'free to live where [they] cho[o]se as far as [the defendant] [is] concerned,' and do not receive reimbursements and support conditioned on their location within this District. . . . [Defendant] emphasizes that '⁠[t]he territory to which [its] sales teams are assigned often bears little relation to the team members' place of residence.'"

Uniloc USA, Inc. et al v. Nutanix, Inc., 2-17-cv-00174 (TXED December 6, 2017, Order) (Gilstrap, USDJ)

Asserted Claims of Email Transmission Patent Invalid Under 35 U.S.C. § 101

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s email transmission patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "The Court finds that [the patent] is directed to the general concept of using an intermediary to exchange messages, and is therefore directed to an abstract idea. The idea of using an intermediary to exchange messages is not a foreign concept. . . . While [plaintiff] argues that the purpose of 'claim 1 is to benefit the interface service computer system that is providing the communications,' the [patent] does not recite any specific method through which an interface server’s website is able to retain visitors to its site, or that the purpose of the [patent] is to result in this benefit. . . . The patent provides no meaningful limitations on the functions of these components; instead, they form an existing technological environment in which the abstract idea of using an intermediary to exchange messages or information may be accomplished."

EveryMD.com LLC v. Amazon.com, Inc., 2-17-cv-05573 (CACD December 5, 2017, Order) (Birotte, Jr., USDJ)

Software-Based Algorithm Claims of Garage Door Opener Patent Invalid Under 35 U.S.C. § 101

Following an evidentiary hearing, the ALJ determined that one of complainant's garage door opener patents encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "The language of the claim is itself dispositive, but the [asserted] patent’s focus on calculation is strong circumstantial evidence that claim 15 is directed to a software-based routine, or algorithm -- an ineligible concept under 35 U.S.C. § 101. . . . [T]he only structures implicated by these claims are a movable barrier and motor, but even then, they are not actually part of the claimed methods. Rather, they are recited to explain the identity of data values like 'characteristic force value' and 'motor operation compensation value'. . . . Setting aside whether or not Respondents omitted discussion of key limitations, I find the [asserted] patent claims can be performed in the human mind because of their precise wording."

Access Control Systems and Components Thereof, 337-TA-1016 (ITC November 21, 2017, Order) (Pender, ALJ)

Venue For Hatch-Waxman Claim is District of ANDA Filing, Not Where Filer Intends to Market the Accused Product

The court granted defendant's motion to dismiss plaintiffs' ANDA infringement action for improper venue because defendant did not file its ANDA in the district. "⁠[T]he plain language of the patent venue statute provides that venue is proper 'where the defendant has committed acts of infringement.' In the Hatch-Waxman Act context, because the generic drug is not yet being marketed, the only act of infringement that actually has occurred is the filing of the ANDA. . . . The commencement of a lawsuit effectuates the purpose of the Hatch-Waxman Act; it is not necessary to recognize additional speculative acts of infringement to give the statute effect. . . . This Court declines to find that an act of infringement occurs wherever an ANDA filer intends to market the accused product."

Galderma Laboratories, LP et al v. Actavis Laboratories UT, Inc. et al, 3-17-cv-01076 (TXND November 17, 2017, Order) (Lynn, USDJ)

Continuing Litigation of Non-Viable Case to Avoid § 285 Motion Favors Award of Attorney Fees

Following plaintiff's voluntary dismissal, the court granted defendant's motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation positions and tactics were exceptional. "⁠[Plaintiff's] behavior is consistent with the filing of patent infringement actions to force settlements with no intention of testing the merits of the claims. Its lawsuit against [defendant] was one of 20 lawsuits filed the same day concerning the [same] Patent. Most of the cases promptly settled for between $3000 to $15,000. . . . [B]efore a ruling on [defendant's] § 101 motion, [plaintiff] offered to walk away provided that [defendant] would forego its right to seek fees. . . . [Defendant] countered it would agree to a dismissal, but would not waive its right to seek fees under § 285. [Plaintiff] refused that offer, which suggests exposure to an 'exceptionality' finding was on its mind. . . . This shows the driving factor in its decision not to dismiss the case was its exposure to attorney’s fees, not the underlying merits of its position. . . . Simply put, refusing [defendant's] offer made no sense if [plaintiff] believed it had a meritorious case and that a § 285 motion would have been frivolous."

Opal Run LLC v. C&A Marketing, Inc., 2-16-cv-00024 (TXED November 30, 2017, Order) (Payne, MJ)

Counsel's Repeated Violations of Local Rules, Rules of Professional Conduct, and FRCP 11 Require Removal From Case

The court granted plaintiff's emergency motion to sanction defendant and removed defense counsel from the case. "⁠[Counsel] has repeatedly violated the standards of attorney conduct as adopted by this Court’s Local Rules and the Texas Disciplinary Rules of Professional Conduct and has violated Federal Rule of Civil Procedure 11. Despite multiple warnings from the Court to perform in a responsive and diligent manner, [counsel] has continued to ignore communications from [plaintiff] for unproduced and overdue discovery, emails and phone calls from the Mediator to schedule mediation in accordance with the Docket Control Order, and orders from this Court to appear at mediation and to appear in-person for a show cause hearing. In addition, [counsel's] conduct has not only wasted the Court’s, Plaintiff’s, and the Mediator’s time and resources, but has significantly harmed his client’s defense. . . . The Court finds that the interests of the Parties, as well as the administration of justice, require that [counsel] be removed from this case."

Virtual Fleet Management, LLC v. Land Air Sea Systems, Inc., 2-16-cv-01108 (TXED November 29, 2017, Order) (Gilstrap, USDJ)