Post-Trial Objection to Royalty Base Undermined by Failure to Present Alternate Theory

The court denied defendant's motion for judgment as a matter of law on damages and rejected its argument that plaintiff implicitly invoked the entire market value rule at trial. "[W]hile [defendant] contests the royalty base, it failed to advance a credible alternative. . . . [Defendant] never produced any other testimony or evidence regarding how one should properly calculate the damages for the iOS devices, instead it relied solely on the upgrade price for a dissimilar product. If [defendant] had advanced a different theory showing the iOS device was not the smallest saleable unit, there may have been a different result.”

VirnetX Inc. v. Cisco Systems, Inc., et. al., 6-10-cv-00417 (TXED February 26, 2013, Order) (Davis, J.).

Patent Claim Containing “Intent Element” Not Indefinite

The court denied defendant's motion for summary judgment on its indefiniteness defense as to plaintiff's retroreflective sheeting patent. "The Court construed the claim term 'varied/vary in opposition' as follows: 'to intentionally provide within a given cube corner element a 1‐2 dihedral angle error and a 1‐3 dihedral error that are different in magnitude and/or sign.' The Court also construed 'nominally parallel' as follows: 'no purposeful variation from parallel using a groove‐forming machine with a degree of precision of at least ¼ arc minute.' [Defendant] argues that as these terms have been construed to include an intent or purpose requirement, a person of ordinary skill in the art cannot independently conclude that a particular piece of retroreflective sheeting, article or lamina infringes because such analysis requires a determination of the subjective intent of the person who made such sheeting, article or lamina. . . . The Court finds that there is no binding authority for the position that an apparatus claim may not include an intent element. . . . [Plaintiff] has demonstrated that a person of ordinary skill in the art can determine the scope of those claims that include an intent requirement by reviewing internal design documents or through witness testimony."

3M Company, et. al. v. Avery Dennison Corporation, 0-10-cv-02630 (MND February 25, 2013, Order) (Davis, J.).

Under Akamai, Induced Infringement Does Not Require Intent to Incur Legal Liability

The court denied defendant's motion to dismiss plaintiff's induced infringement claim and rejected defendant's argument that it could not be liable for its pre-Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012), conduct. "[Defendant] pointed out that, before the Federal Circuit issued its decision in Akamai, a defendant . . . who induced another to perform fewer than all of the steps of a method patent could not be held liable for induced infringement. Accordingly, [defendant] argued, it could not have intended to induce infringement before Akamai because it was legally impossible for it to be held liable for inducing a customer to perform only one of the steps of the [patent-in-suit]. . . . [T]he most natural reading of Akamai . . . is that liability for induced infringement requires, not that the defendant knew that its acts would render it legally liable (which would have been impossible pre-Akamai), but rather that the defendant knew and intended that (1) each of the steps that make up the method patent would be performed by someone (either the defendant itself or someone acting at the behest of the defendant) and that (2) these steps would, if performed by a single entity, constitute direct infringement (which is possible both pre- and post-Akamai)."

Transunion Intelligence LLC, et. al. v Search America Inc., et. al., 0-11-cv-01075 (MND February 22, 2013, Order) (Schiltz, J.).

Frivolous Motion to Reconsider Sanctions Award Warrants Additional Sanctions Award

The court sustained defendant's objection to the magistrate judge's recommendation that the Rule 11 sanctions imposed against plaintiff did not extend to plaintiff's motion to reconsider the Rule 11 sanctions award. "I agree with [defendant] that it should not have had to file a second and separate motion for sanctions in connection with the reconsideration motion in order to recover attorneys' fees incurred in connection with opposing the sanctions motion. . . . The motion for reconsideration was itself frivolous. . . . [Plaintiff's] decision to seek reconsideration of the court's decision on the sanctions motion caused this court to waste even more time, and [defendant] to waste even more money, than had already been wasted in supervising and defending against this lawsuit. . . . Accordingly . . . the court awards an additional $12,745.35 in sanctions incurred in connection with the motion for reconsideration."

Source Vagabond Systems, Ltd. v. Hydrapak, Inc., 1-11-cv-05379 (NYSD February 21, 2013, Order) (McMahon, J.).

Production of Source Code Limited to Functionality Identified in Infringement Contentions

The court denied plaintiff's motion to compel thirty defendants to produce their entire source code trees for each accused instrumentality and rejected plaintiff's argument that defendants exaggerated the burden of producing the entire trees. "The e-commerce systems at issue here are complex and involve different types of source code, computer languages, hardware systems, operating systems, third party interfaces, applications and data under third parties’ control. . . . More efficient than producing an entire source code tree, Defendants’ expert advocates to have Defendants’ technical employees – who are intimately familiar with their own source code – 'identify and provide the portions of source code that specifically relate to the aspects or functionality identified by the plaintiff in its infringement contentions.'. . . To the extent that [plaintiff's] PLR 3.1(c) charts identify any particular aspects or elements of a Defendant’s system that relate to source code, the court orders that the Defendant is only required to produce the source code that is 'sufficient to show the operation of' those system aspects identified in [plaintiff's] PLR 3.1(c) charts."

Ameranth, Inc. v. Pizza Hut, Inc., et. al., 3-11-cv-01810 (CASD February 20, 2013, Order) (Stormes, M.J.).

Summary Judgment as to Priority and On Sale Date Requires Admission of Infringement

The court denied defendant's motion for summary judgment as to the priority date of a the asserted patent claims and on sale date of the accused product because defendant was unwilling to admit infringement. "Defendant argues that the priority date is significant, because if the patents in suit are only entitled to the later date, then if Defendant’s accused products infringe, then they also anticipate and render invalid the asserted claims. Defendant does not seek summary judgment of invalidity at this time, and instead merely seeks partial summary judgment of the priority date and the date its accused products were on sale. . . . But Defendant fails to grapple with its own dilemma: that to argue anticipation, it needs to admit infringement. And Defendant is unwilling to do so, preferring instead to reserve the right to argue noninfringement if this motion fails. . . . Unfortunately for Defendant, the law requires it in this circumstance to demonstrate that the claims read on its accused product if it wants to argue that those products anticipate. The Court need only consider a patent’s entitlement to a claimed priority date after a defendant has come forward with invalidating prior art. . . . By Defendant’s failure to demonstrate that the asserted claims read on the accused product, it has failed to shift the burden to Plaintiff to demonstrate entitlement to the claimed priority dates.”

Bird-B-Gone Inc. v. Bird Barrier America Inc., et. al., 8-12-cv-00178 (CACD February 15, 2013, Order) (Guilford, J.).

Copying in ANDA Case Not Compelling Evidence of Nonobviousness

Following a bench trial, the court found that plaintiff's hepatitis drug patent was invalid as obvious even though defendant admitted to copying. "While some cases have declared that copying can be a forceful secondary consideration of nonobviousness in ANDA cases . . . this Court has concluded that in the Hatch-Waxman context, 'a showing of copying . . . is not compelling evidence [of nonobviousness].' Although [plaintiff] suggests that copying should be given more weight here since there were a number of other FDA-approved drugs to treat hepatitis B that [defendant] could have copied, at least one district court . . . has rejected copying as a compelling consideration in an ANDA case, even where the defendant could have chosen to copy another drug in the relevant market. . . . [I]n light of the incentive provided by the Hatch-Waxman Act for a company like [defendant] to copy entecavir, the force of that bare choice is diminished, as compared to what it might suggest in an industry without such a regulatory scheme."

Bristol-Myers Squibb Company v. Teva Pharmaceuticals USA Inc., et. al., 1-10-cv-00805 (DED February 11, 2013, Order) (Burke, M.J.).