Supreme Court’s New Indefiniteness Standard Does Not Require Reconsideration Of Claim Construction

The court denied plaintiffs' motion for supplemental claim construction following Nautilus, Inc. v. BioSig Instruments, Inc., 572 U.S. ___, No. 13-369, slip op. (June 2, 2014) addressing indefiniteness. "Plaintiffs are correct that the Supreme Court recently announced a new standard for indefiniteness under 35 U.S.C. § 112. Although Plaintiffs raise concerns regarding the indefinite nature of 'central area' in their motion for supplemental construction, that argument was not presented in their opening claim construction memorandum and Plaintiffs have failed to provide a sufficient justification for this untimely argument. . . . The Federal Circuit has since affirmed the Court’s construction of one of the terms identified in Plaintiffs’ motion and the Court is not inclined to revisit any of its constructions at this time."

Radio Systems Corporation et al v. Lalor et al, 2-10-cv-00828 (WAWD June 17, 2014, Order) (Lasnik, J.)

Settlement Does Not Justify Vacating Rule 11 Sanctions Order

The court denied the parties' motion to vacate the court's earlier Rule 11 sanctions order following settlement. "The Court appreciates the parties’ willingness to enter into settlement negotiations, as well as the fact that these negotiations have been successful. However, the parties make an unusual request as part of the settlement, namely, to vacate a properly issued order without any indication that the underlying factual or legal bases for the order were incorrect. The parties do not explain why this request is necessary or appropriate. . . . Plaintiff filed this case in a public forum. The motion for sanctions was fully briefed through unrestricted filings. Had the parties wished to resolve the dispute at issue in a private forum, such as through binding arbitration proceeding, they were at liberty to do so."

Predator International, Inc. v. Gamo Outdoor USA, Inc., 1-09-cv-00970 (COD June 16, 2014, Order) (Brimmer, J.)

Authorized Foreign Sale Exhausts Patent Rights Where License Includes Right to Import

The court granted in part plaintiff's motion for summary judgment that defendant's infringement claims for three of its data storage patents were barred by patent exhaustion even though the sales from defendant's predecessor's licensees to plaintiff occurred overseas. "[W]hile the mere purchase of an item overseas that embodies a U.S. patent may not give the purchaser a right to import it into the United States, here [the licensee] had such a right under the parties’ negotiated license agreement. [Defendant] does not suggest that if [the licensee] itself had shipped the products to this country prior to resale, there still would have been a viable infringement claim against [the licensee] or any of its customers. . . . [The licensee] already gave consideration for the right to import devices embodying the patented inventions. That title to the chips passed before the shipping to this country took place is too thin a reed on which to permit the patentee an 'end run' around the principle that it may only recover once."

Sandisk Corporation v. Round Rock Research LLC, 3-11-cv-05243 (CAND June 13, 2014, Order) (Seeborg, J.)

Failure to Raise Indefiniteness Defense in Invalidity Contentions Bars Indefiniteness Argument in Claim Construction

The court denied defendant's motion for claim construction as unnecessary where defendant's sole dispute was indefiniteness and the court previously denied defendant's motion to amend its contentions to include a claim of indefiniteness. "[T]he issue before the Court is whether a party that does not assert indefiniteness in its invalidity contentions . . . nonetheless can argue during claim construction that certain claim terms are indefinite and, therefore, the patents-at-issue are invalid. . . . If a court were to allow a litigant to first assert this defense in the context of a motion for summary judgment following the completion of fact and expert discovery, the court would effectively render the 'use it or lose it' provision of Rule 12 meaningless."

Auxilium Pharmaceuticals, Inc. et al v. Watson Laboratories, Inc. (NV) et al, 2-12-cv-03084 (NJD June 12, 2014, Order) (Linares, J.)

Stay Pending Third Party IPR Conditioned on Defendant’s Agreement to Estoppel

The court granted defendant's motion to stay pending inter partes review, but conditioned the stay on defendant agreement to be bound by estoppel. "Typically, the benefit of a stay pending IPR is contingent in part upon the IPR proceeding’s estoppel effect, i.e., the prohibition that the petitioner is precluded from relitigating the same issues that were raised or reasonably could have been raised during the IPR proceeding. . . . [B]ecause [defendant] is not a party to the relevant IPR proceeding, [defendant] is not necessarily bound by this statutory provision. Considering the position of the parties, the strategic options available to patent infringement defendants, and the relief [defendant] requests through this motion, as well as to fully appreciate the benefits of a more streamlined litigation, the court will condition a stay on [defendant's] agreement to be bound as if it itself had filed the relevant IPR petition."

Evolutionary Intelligence, LLC v. Millennial Media, Inc., 5-13-cv-04206 (CAND June 11, 2014, Order) (Davila, J.)

Does the lack of estoppel from third-party IPRs weigh against staying parallel litigation?

No

The court granted defendants' motion to stay pending inter partes review and rejected plaintiff's proposal to condition the stay on defendants' agreement to be estopped from raising the same arguments as the IPR petitioners. "[A]lthough Plaintiff suggests it would be unfair for Defendants to obtain the benefit of IPR proceedings without being bound by the arguments raised therein, it would be more unfair to condition a stay on Defendants’ being bound by arguments raised in a proceeding over which they have no control. Defendants decided not to pursue IPR of the patents-in-suit on their own; they therefore run the risk that an unfavorable IPR decision — which they could have, but chose not to influence — will become part of the patent’s file. They also ran the risk that IPR would not be sought in the first place. Now that multiple non-parties have sought IPR of the patents-in-suit, and that the PTAB likely will apply its expertise to some or all of the arguments at issue in this case, it would defy common sense for this litigation to proceed alongside the IPR proceedings simply because Defendants are not statutorily prohibited from raising the same or similar arguments as the IPR petitioners."

Intellectual Ventures II LLC v. Huntington Bancshares Incorporated et al, 2-13-cv-00785 (OHSD June 10, 2014, Order) (Frost, J.)

---

Yes

The court denied without prejudice defendant's unopposed motion to stay pending inter partes review. "Third parties . . . have filed a petition for inter partes review of the [patents-in-suit]. . . . [T]he PTAB proceeding is at an even earlier stage than this litigation – it will take the PTAB up to three months from now to determine whether or not to institute the inter partes review at all. Whether a stay will simplify the issues in question and trial of the case is wholly unpredictable, if not completely speculative, at this time. . . . Even assuming the PTAB does institute the inter partes review, that [defendant] is not a party to the PTAB proceeding casts doubt on the extent, if any, a stay will simplify the issues in this case by way of the estoppel effect of the administrative proceeding."

MPHJ Technology Investments, LLC et al v. Research Now, Inc., 2-13-cv-00962 (TXED June 10, 2014, Order) (Gilstrap, J.)

Risk of Reciprocal Scorched Earth Discovery Justifies Deposition Limits

The court granted in part defendant's motion for protective order regarding the deposition of party witnesses but imposed limits on the number (8 per side) and duration (7 hours) of non-expert party depositions. "If the Court permitted all of the discovery contemplated, the costs could be enormous and might effectively prevent one or both parties from pursuing the merits. . . . [T]he Court cannot precisely say how much the non-expert discovery might cost. But if both sides engaged in reciprocal scorched-earth discovery, the Court envisions fact deposition expenses alone in the many hundreds of thousands of dollars for each side. Add written and document discovery, discovery from third parties, and expert discovery, and the discovery expenses could easily mushroom into the millions of dollars. The parties, individually and together, have not convinced the Court that the likely benefit of this discovery outweighs the expense."

Enplas Display Device Corporation et al v. Seoul Semiconductor Co., Ltd., 3-13-cv-05038 (CAND June 9, 2014, Order) (Cousins, M.J.)