Judge Davis Adopts Another Streamlining Tool in Multi-Defendant Patent Litigation: Early Summary Judgment on Damages

As others have observed, Judge Davis and Judge Love of the Eastern District of Texas recently approved early Markman hearings as a streamlining tool in certain multidefendant patent cases. AdjustaCam provides a variation on that theme, allowing early discovery and summary judgment on certain damages issues the resolution of which could "ripen the case for settlement and narrow the accused products." "[Plaintiff] represented that its infringement allegations were relatively simple -- it could determine infringement from visually inspecting the accused products -- and the majority of discovery in the case would focus on damages. . . . Defendants agreed that much of discovery would relate to damages and that a limited, initial damages disclosure would help streamline the case. Defendants also requested the Court consider an early summary judgment motion addressing pre-suit damages and laches. Defendants represented this could ripen the case for settlement and narrow the accused products. . . . While the Patent Rules efficiently govern and manage most cases, the parties in this case have identified and agreed on specific modifications to the Court’s standard schedule that would streamline and potentially lead to an early resolution of the dispute. In this case, the issues of laches and recoverable damages are amenable to an early determination. Therefore, the Court will consider an early summary judgment motion on these issues."

AdjustaCam LLC v. Amazon.com, Inc., et. al., 6-10-cv-00329 (TXED April 27, 2011, Order) (Davis, J.)

$3.8 Billion Reasonable Royalty Opinion Is Not Inadmissible Despite Similarity To $3.8 Billion Lost Profits Opinion Where Hypothetical Negotiations

"Would Have Produced No Mutually Agreed Upon Price Range In Which The Parties Could Have Negotiated"

The court denied defendants' motion to exclude the testimony of plaintiffs' economist as to his $3.8 billion reasonable royalty calculation. "[Plaintiffs' expert] contends that a reasonable royalty in this case is $3.8 billion, the same amount as his estimate of lost profits. Defendants argue that [the expert's] analysis is improper and should be excluded because he has failed to undertake a separate analysis to calculate a reasonable royalty than he used to calculate lost profits. [The expert] testified before this Court that though he reached the same number, his analyses as to lost profits and reasonable royalty were distinct from one another. . . . [Plaintiffs' expert] testified that based on his review of contemporaneous documents and his analysis of the parties’ expectations, the hypothetical negotiation between Plaintiffs as licensors and Defendants as licensees would have produced no mutually agreed upon price range in which the parties could have negotiated. This is consistent with the holdings of several courts that the 'willing licensor/willing licensee' model is 'an inaccurate, and even absurd, characterization when . . . the patentee does not wish to grant a license.'. . . While Defendants will certainly challenge [plaintiffs' expert's] conclusions on cross-examination and to offer their own experts’ contrary testimony on the issue of a reasonable royalty, they have not set forth a persuasive basis in analytical methodology upon which to exclude [his] testimony."

Warner-Lambert Company, et. al. v. Purepac Pharmaceutical, et. al., 2-00-cv-02931 (NJD April 25, 2011, Order) (Hochberg, J.)

Prior to Claim Construction "in a Vacuum," Parties Must Show "the Juice is Worth the Squeeze"

The parties' motions for claim construction were denied. "Far too often, construing claim terms in a vacuum leads to additional disputes about the meaning of the court's construction at summary judgment or to revision when the context of the dispute is revealed. Another problem with unsupported requests for construction is that parties sometimes take a shotgun approach and ask for construction terms in hopes of obtaining a few favorable constructions to use during summary judgment; if the court doesn’t give the constructions the party wanted, then those terms faded from the case. That’s why the parties have to persuade the court that the juice is worth the squeeze."

e2Interactive, Inc., et. al. v. Blackhawk Network, Inc., 3-09-cv-00629 (WIWD April 25, 2011, Order) (Crocker, M.J.)

Voluntary Amendment of Claims During Reexam Waives Right to Appeal or Seek Vacatur of Invalidity Judgment

The court denied plaintiff's motion to vacate an earlier judgment of invalidity even though the claims that the court ruled on had been amended through reexamination following summary judgment. "By voluntarily amending claims 1 and 2 during reexamination, [plaintiff] gave up its right to appeal this Court’s judgment. . . . Defendants’ reexamination request did not compel [plaintiff] to make the strategic decision . . . to amend claims 1 and 2 'to avoid lengthy appeal proceedings.'. . . [Plaintiff], by its own acts, circumvented appellate review of the Court’s judgment. Thus, vacatur is not appropriate."

PartsRiver, Inc. v. Shopzilla, Inc., et. al., 4-09-cv-00811 (CAND April 21, 2011, Order) (Wilken, J.)

Infringement Warrants Permanent Injunction But With 15-Month "Sunset Provision" to Allow Defendant Time To Introduce Noninfringing Product

The court granted plaintiffs' motion for a permanent injunction, but imposed a 15-month "sunset provision" to "allow [defendant] time to introduce a new, noninfringing . . . product prior to any injunction taking effect." "There is little reason to believe that additional [competition from the accused product that defendant] will be phasing out . . . under the auspices of a Court-imposed permanent injunction, will expand to such an extent as to impose substantial, irreparable harm to [plaintiffs]. . . . [However,] [i]f the Court were to immediately and entirely exclude [defendant's accused product] from the market, medical professionals who are currently using [the] device would be required to stop doing so. . . . [Defendants'] reputation would also be harmed to a degree disproportionate to the infringement found by the jury. What would appear to many to be an urgent, 'recall-like' decree from this Court is simply not warranted under the circumstances presented here. . . . Additionally, it must be noted that nearly every aspect of this case has presented what can only fairly be described as close calls. The jury's 'split' verdict, in the Court's view, reflects the close nature of this case."

B. Braun Melsungen AG, et. al. v. Terumo Medical Corporation, et. al., 1-09-cv-00347 (DED April 21, 2011, Order) (Stark, J.)

Compliance With FRCP Form 18 States a Claim of Patent Infringement Regardless of Twombly and Iqbal

The court denied defendants' motion to dismiss for failure to state a claim where plaintiff's complaint was modeled on FRCP Form 18. "[T]he operative question is whether a pleading that closely tracks Form 18 states sufficient facts to survive a motion to dismiss under [Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)], despite its presentation of little more than threadbare recitals of the elements of a cause of action for direct infringement. . . . It is difficult to reconcile the pleading standards set forth in Twombly and [Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009)] with the legally conclusive form of pleading found in Form 18. However, the Court agrees with the post-Twombly holding in [McZeal v. Sprint Nextel Corp., 501 F.3d 1354 (Fed. Cir. 2007)] that a litigant who complies with the provisions of Form 18 has sufficiently stated a claim for direct infringement as contemplated by Rule 12(b)(6). . . .Since the Federal Rules state that compliance with the forms is sufficient, and the Supreme Court's decisions in Twombly and Iqbal could not have amended the Federal Rules, a complaint alleging literal infringement that tracks Form 18 is sufficient to withstand a motion to dismiss under Rule 12(b)(6)."

W.L. Gore & Associates, Inc., et. al. v. Medtronic, Inc., et. al., 2-10-cv-00441 (VAED April 20, 2011, Order) (Davis, J.)

Think It’s Hard to Transfer Venue out of the Eastern District of Texas? Try Transferring out of Delaware.

Ever hear that transferring a patent infringement case out of Judge Ward’s court in the Eastern District of Texas is nearly impossible? Truth is, he’s granted more motions to transfer venue for convenience than any other district court judge in the past three years.

Judges that ruled on 10 or more motions to transfer venue for convenience since January 1, 2008













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