Potential Application of Entire Market Value Rule Justifies Discovery Concerning Profitability of Dodge Ram Trucks

The court granted plaintiff's motion to compel discovery concerning the profitability of defendant's trucks which contained the accused storage box feature because the discovery was relevant to damages. "Plaintiffs state that they have requested documents relating to gross and net revenues and profit margins for Dodge Ram trucks that are equipped with the RamBox for model year 2009 to the present. Defendant has refused to produce the revenue information that Plaintiffs sought, asserting that the information was not relevant. . . . Defendant argues that, in cases where an invention is part of a larger product, as the storage box here is part of a truck, then the damages should only be calculated by how much profit is made on the smaller invention. That rule is the general rule. . . . 'The entire market value rule is a narrow exception to this general rule.' . . . [I]f Plaintiffs were to succeed in this case, Plaintiffs should not be able to recover more than the reasonable royalty rate without a sufficient showing that the storage box drove sales of the trucks themselves. The Court recognizes the risks of requiring Defendant to disclose profits of the trucks. But the Court is confident, upon a more appropriately timed motion in limine, that it can sort out the proper damages method."

Clare et al v. Chrysler Group LLC, 2-13-cv-11225 (MIED June 4, 2014, Order) (Edmunds, J.)

Expert’s Testimony Given “Substantial Weight” Despite Purported “Bias Against Patent System”

In a final written decision, the Board rejected the patent owner's argument that the Board should give a declarant's testimony "less weight" because the declarant was hostile to the patent system. "[The patent owner] argues that [the petitioner's declarant] has 'hostility towards the patent system' and is a member of the Electronic Frontier Foundation (EFF), which shows a 'level[] of bias that should be more than sufficient to raise concerns about his qualifications to serve as an unbiased technology expert.' We have reviewed [the petitioner's] curriculum vitae and find that he is well qualified to testify regarding the matters addressed in his declaration Indeed, [the patent owner's] declarant . . . testified that [the petitioner's declarant] is a 'top cryptologist' and has a 'great reputation as a cryptologist.' . . . [W]e find [the expert's] testimony persuasive and give it substantial weight. We do not give it less weight based on a purported bias against patents in general."

Petition for Inter Partes Review by Apple Inc., IPR2013-00080 (PTAB June 2, 2014, Order) (Arbes, APJ)

Counsel’s Billing Statements Supporting Motion for Attorneys’ Fees are Not Privileged and Not Subject to Being Sealed

The court denied plaintiff's motion to file under seal an affidavit in support of plaintiff's motion for attorneys' fees. "Plaintiffs contend that 'the fees charged for each attorney as well as information contained in the time entries are confidential and private financial information of Plaintiffs and Plaintiffs’ counsel and is not publicly available information.' . . . Plaintiffs have not cited the Court to any basis for finding that the rates charged by Plaintiffs’ counsel are privileged, especially where the Plaintiffs move the Court to award fees in Plaintiffs’ favor based upon these rates. . . . To the extent the Plaintiffs argue that the descriptions contained in the billing entries are protected by the attorney-client privilege or work-product doctrine, the Court finds that the Plaintiffs have failed to cite any specific entry that contains privileged information, and thus, the Court cannot undertake a meaningful review of whether specific entries are protected."

Radio Systems Corporation et al v. Eco Pet Solutions, Inc., 3-13-cv-00385 (TNED June 4, 2014, Order) (Guyton, M.J.)

Supreme Court’s New Indefiniteness Test Requires Supplemental Post-Hearing Briefing

The ALJ sua sponte extended the target date and ordered the parties to provide supplemental briefing due to a Supreme Court decision on invalidity filed after post-hearing briefing concluded. "[T]he United States Supreme Court issued its decision in Nautilus, Inc. v. Biosig Instruments (June 2, 2014). The Court held that the standard for determining indefiniteness as articulated by the Court of Appeals for the Federal Circuit under 35 U.S.C. § 112 ¶ 2 ('amenable to construction' or 'insolubly ambiguous') is improper and that the standard should be whether 'a patent's claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty.' None of the parties in this Investigation addressed this issue using the standard articulated by the Supreme Court in their presentation of evidence or in their briefs."

Integrated Circuit Devices and Products Containing the Same, 337-TA-873 (ITC June 3, 2014, Order) (Gildea, ALJ)

Prosecution Bar Extended to CBM Proceeding to Avoid Misuse of Defendant’s Confidential Information

The court adopted defendant's proposal for a protective order that included a prosecution bar that extended to CBM review. "If Defendant's petition for CBM review is granted, there is a significant risk that Plaintiff will make a motion to PTAB to amend the claims of its Patent 'to distinguish them from the prior art in a manner that is informed by its knowledge of [Defendant's] highly confidential information and source code gleaned in this litigation.'. . . [T]he potential misuse is obvious where Plaintiff has access to valuable and confidential source code, and could use such information to create a tactical advantage in this case. Plaintiff's possible injuries are minimal in comparison to the risk to Defendant. The injuries are minimized because Defendant's Bar applies only to Plaintiff's counsel that have seen Defendant's confidential material and source code. . . . Defendant's Bar allows Plaintiff's litigation counsel - who have not and agree not to review Defendant's confidential information or source code - to fully participate in the CBM review proceeding, including motions for claim amendments."

buySAFE Inc. v. Google Inc., 3-13-cv-00781 (VAED June 2, 2014, Order) (Hudson, J.)

Litigation Strategy to Extract “Nuisance Settlement” Warrants Award of Attorneys’ Fees

The court granted defendant's motion for attorneys’ fees under 35 U.S.C. § 285 against an NPE plaintiff because plaintiff's suit had been a "prototypical exceptional case." "No reasonable litigant could have expected success on the merits in [plaintiff's] patent infringement lawsuit against [defendant] because the [patent-in-suit] claimed a bilateral matchmaking process requiring multiple parties . . . while [the accused] feature utilizes the preference data of only one party. . . . And the most basic pre-suit investigation would have revealed this fact. . . . [Plaintiff's] motivation in this litigation was to extract a nuisance settlement from [defendant] on the theory that [defendant] would rather pay an unjustified license fee than bear the costs of the threatened expensive litigation. [Plaintiff] never sought to enjoin [defendant] from the allegedly infringing conduct in its prayer for relief. [Plaintiff's] threats of 'full-scale litigation,' 'protracted discovery,' and a settlement demand escalator should [defendant] file responsive papers, were aimed at convincing [defendant] that a pay-off was the lesser injustice."

Lumen View Technology LLC v. Findthebest.com, Inc., 1-13-cv-03599 (NYSD May 30, 2014, Order) (Cote, J.)

Delay in Filing Suit and Lack of Preliminary Injunction Request Favor Stay Pending IPR

The court granted defendant's motion to stay pending inter partes review because the lack of undue prejudice, potential simplification of issues, stage of the case, and reduction of the burden of litigation weighed in favor of a stay. "The fact that [defendant] is seeking a stay at the earliest stage of the litigation diminishes the potential effect of any tactical disadvantage [plaintiff] could face. . . . Additionally, [plaintiff's] own delay, waiting [2 years] to file the Complaint, further indicates that [plaintiff] will not suffer undue prejudice from a stay. . . . If competition for market share was a serious concern, [plaintiff] surely would have filed sooner, rather than spend two years in discussions with [defendant]. Additionally, [plaintiff] has not sought a preliminary injunction in this litigation, which further supports the absence of [plaintiff's] concern regarding a pressing threat to [its] market share."

Ignite USA, LLC v. Pacific Market International, LLC et al, 1-14-cv-00856 (ILND May 29, 2014, Order) (Holderman, J.)