Dismissal for Misjoinder Under AIA Does Not Eviscerate First-Filed Status of Case

The court granted defendants' motion to dismiss plaintiff's declaratory relief action under the first-to-file rule where defendant's earlier filed suit was refiled after being dismissed for joining 45 unrelated defendants in violation of the America Invents Act. "[Plaintiff] argues that [defendant's original] lawsuit was 'legally infirm' from the beginning, and that therefore this is the 'first-filed' lawsuit. . . . I do not think the original California lawsuit was 'legally infirm'. . . . The similarly-situated first named defendant in [defendant's original] lawsuit was allowed to proceed; the other defendants were told (essentially) to refile their lawsuits separately and any such lawsuits would be treated as related cases. In these circumstances, I do not think there is any legal reason not to treat [defendant's] extant suit against [defendant] as the 'first-filed' lawsuit. . . ."

Sony Electronics Inc. v. Digitech Image Technologies LLC, et. al., 1-12-cv-00980 (DED December 7, 2012, Order) (Andrews, J.).

Infringing Software Capable of Modification “Over the Course of a Weekend” or “Lunch Hour” Warrants Permanent Injunction

The court granted plaintiffs' post-trial motion for a permanent injunction regarding their prepaid gift card patent because plaintiffs established irreparable harm. "[T]his case involves unique circumstances because the accused product is a computer program and method, which by its nature is easily modified to either include or exclude a particular function. [Defendant] was able to remove the infringing portion of the source code over the course of a weekend, perhaps over the course of a lunch hour. It also is clear from the evidence presented at trial that [defendant] has the flexibility to adapt its product almost immediately to meet customer requirements. . . . Given the ease with which [defendant] can modify its product, and the difficulty [plaintiffs] would encounter attempting to detect and establish renewed infringement, the risk to [plaintiffs] is great.”

e2Interactive, Inc., et. al. v. Blackhawk Network, Inc., 3-09-cv-00629 (WIWD December 6, 2012, Order) (Crocker, M.J.).

General Exclusion Order Under Section 337(d)(2)(A) Requires “Circumvention” Not “Pattern of Circumvention”

The Commission issued a general exclusion order directed to infringing lighting control devices despite the ALJ's finding, and the Commission investigating attorney's agreement, that complainant failed to establish that an exclusion order was necessary to prevent the circumvention of the recommended limited exclusion order. "[T]he facts here establish business conditions that suggest circumvention of an LEO may be likely to occur. [Complainant] has submitted evidence showing significant and increasing demand for the infringing products, widespread U.S. marketing and distribution networks with multiple intermediaries, a large number of non-respondent foreign manufacturers/distributors, and frequent name changes for foreign manufacturers/distributers. . . . [Complainant] has also presented evidence that [a respondent in a prior investigation] circumvented a Commission consent order by selling dimmer switches that infringe the [asserted] patent under its own and under a different name. Contrary to the IA's argument, this record evidence is relevant to the Commission's determination of whether a likelihood of circumvention of an LEO exists. . . . [T]he ALJ misstated section 337(d)(2)(A) which only requires 'circumvention,' not a 'pattern of circumvention,' and which may be satisfied. . . by a single company engaged in infringing activities that indicate circumvention. . . ."

Lighting Control Devices Including Dimmer Switches and Parts Thereof (IV), 337-TA-776 (ITC November 7, 2012, Order) (Trade Commission, J.).

Separating Single Component into Two Components That Perform Same Function is “Generally Obvious”

The court granted plaintiffs' motion for summary judgment that defendant's conical crusher patent was invalid as obvious. "[T]he only question is whether separating the seal and piston into two unattached parts would have been obvious to a person having ordinary skill in the art. To ask that question is almost to answer it: it is generally obvious to separate a single component into two components that together perform the same function as the single component. . . . JCI’s decision to put a 'seal portion' between the hydraulic fluid and the 'piston,' as in claims 9 and 10, did not result in a unobvious modification of the prior art."

Metso Minerals Industries Inc., et. al. v. Astec Industries Inc., et. al., 2-10-cv-00951 (WIED December 4, 2012, Order) (Adelman, J.).

Defendant’s “Rush to File Reexamination Requests” Before AIA Reexamination Procedures Became Effective Did Not Prejudice Plaintiff

The court granted defendant's motion to stay pending ex parte reexamination of six patents-in-suit and rejected plaintiff's argument that it would be at a tactical disadvantage because of "Defendant’s initial delay in seeking reexamination, followed by its rush to file reexamination requests before the new and quicker America Invents Act reexamination procedures became effective. . . . Defendant cannot be faulted for failing to seek reexamination before it was served with Plaintiff’s summons and complaint. . . . [E]ven if Defendant was aware of Plaintiff’s active infringement litigation against other parties, such notice created no duty for Defendant, a third party, to seek reexamination. Once sued, Defendant acted promptly by filing six reexamination requests within two months. . . . [T]hat Defendant submitted its requests just days before new reexamination procedures were to be instituted did not constitute an undue prejudice towards Plaintiff."

Robert Bosch Healthcare Systems, Inc. v. Cardiocom, LLC, 5-12-cv-03864 (CAND December 3, 2012, Order) (Davila, J.).

Spoliation by Third Party Warrants Evidentiary Sanctions, But Not Terminating Sanctions

The court denied plaintiff's motion to strike defendant's pleadings as a sanction for production of an altered hard drive from one of defendant's software contractors, but the court granted plaintiff's motion for evidentiary sanctions. "The appropriate remedy in this case is more challenging to determine than in other cases because the spoliator in this case . . . is a non-party, independent contractor for [defendant], and not within the Court’s jurisdiction. Nonetheless, it is [defendant] who benefits from the lack of any adverse creation dates . . . or other negative metadata on any of the CAD files that [plaintiff's] expert might have found, had files not been deleted. . . . There is no jury instruction, however, that can effectively protect the victim of a willful spoliation from the prejudice created by willful deletion of files with the manual running of a Ccleaner program. . . . The Court will not strike [defendant's] affirmative defenses and counterclaims – which is akin to the extreme sanction of a default or dismissal in this patent dispute – for the conduct of a non-party witness only partially under the control of [defendant]. . . . [The contractor] will not be allowed to testify at trial and evidence that originated with him will be excluded. . . . [Defendant] will not be allowed to rely on [its contractor's] deposition testimony for summary judgment purposes or at trial, and [it] will not be allowed to rely on any documents . . . sent from or to [the contractor] that [defendant] has produced."

Pacific Coast Marine Windshields Limited v. Malibu Boats, LLC, et. al., 6-12-cv-00033 (FLMD November 30, 2012, Order) (Baker, M.J.).

Foreign Sales May be Included in Damages Calculations for Infringement of Method Claims Used in Domestic Sales Cycle

The court denied defendants' emergency motion to strike plaintiff's attempt to include sales of accused chips outside of the U.S. in its damages calculations. "Admittedly, there is no case exactly on point. On the other hand, [plaintiff] has put forth sufficient facts to support its theory, albeit novel. [Plaintiff] intends to prove that the alleged infringing method is used during [defendant's] sales cycle, which is performed here in the United States, where both its engineers and customers are located. [Plaintiff] seeks damages for this sales cycle infringement by claiming a reasonable royalty rate on all of the chips that are produced during this sales cycle and purchased based on the result of said cycle. In this Court’s view, one of the simplest ways to determine the value of an infringing use of a patented method during research is to ascertain how many sales were made based on that infringing use."

Carnegie Mellon University v. Marvell Technology Group, Ltd., et. al., 2-09-cv-00290 (PAWD November 29, 2012, Order) (Fischer, J.).