Non-Frivolous Defense Based On “Run-of-the-Mill” Claim Construction Argument Insufficient To Preclude Willfulness

The court denied defendants' motion for summary judgment of no willful infringement of plaintiff's food mold patent and rejected defendants' lack of notice argument. "[Plaintiff] did not give notice of infringement until [2 1/2 years ago], even though the defendants had been advertising and selling the products for a decade or more. Most telling is that [plaintiff] accused Defendants of infringing other patents, but did not mention the [patent-in-suit] until much later. . . . Although the defendants rely on [Kodak Co. V. Agfa-Gevaert N.V., 560 F.Supp.2d 227 (W.D.N.Y. 2008)], that decision was issued after a seven-day trial. Nowhere in that opinion does it suggest that, as a matter of law, a defendant cannot be a willful infringer if the patent holder does not give notice of infringement for a given number of years. . . . Here, there is no indication that (1) [plaintiff] knew of the infringement for a lengthy period of time; and (2) [defendant] knew that [plaintiff] knew."

Formax Inc. v. Alkar-RapidPak-MP Equipment Inc., et al, 1-11-cv-00298 (WIED June 26, 2014, Order) (Griesbach, J.)

Royalty Base Not Limited to Products Deemed to Directly Infringe

The court denied in part defendant's motion to exclude the opinions of plaintiff's damages expert as to a royalty base, and rejected plaintiff's argument that only directly infringing units could be considered. "[Defendant] argues that [the expert] uses an inadmissible unit base of every unit sold. . . . [and] emphasizes that no Apple units directly infringe. . . . [The expert's] 'all infringing unit' base is not methodologically flawed. [Defendant] does not cite to a single case suggesting that the royalty base of a hypothetical negotiation must be limited to units deemed to directly infringe. Such a rule makes especially little sense in cases like this one, where indirect infringement by the defendant is alleged and the bulk of the direct infringement alleged is that of third parties."

Emblaze Ltd. v. Apple Inc., 5-11-cv-01079 (CAND June 25, 2014, Order) (Grewal, M.J.)

Prejudice to NPE Weighs Against Stay Pending CBM Review

The court denied defendant's motion to stay pending CBM review and found that the NPE plaintiff would be unduly prejudiced by a stay. "Although it is true that [plaintiff] does not actively practice the patents and, therefore, does not compete with [defendant], it is also true that the longer [defendant] is allowed to engage in allegedly infringing activity, the lower the value of the patents becomes as licensing assets. Moreover, the patents-in-suit are set to expire in [2 years] and any delay in determining their validity significantly prejudices [plaintiff's] ability to license the patents."

Walker Digital LLC v. Google Inc., 1-11-cv-00318 (DED June 24, 2014, Order) (Stark, J.)

End User’s Option To Choose Noninfringing Configuration Does Not Necessarily Negate Direction And Control

The court denied defendants' motion for summary judgment of noninfringement based on divided infringement and rejected the argument that steps performed by an end user could not be under defendants' control because the end user could have chosen noninfringing options. "[D]efendants point out that the clients 'may choose not to visit the accused websites' and 'the client browsers may be configured to connect to Defendants’ accused websites without using the accused . . . encryption algorithm.' While those points are true, they are immaterial to the question whether the claimed method steps performed by a client computer are performed at the direction or control of the defendants’ servers. . . . [Plaintiff] has offered evidence that if the RC4 algorithm is enabled on the clients’ browsers when the clients visit the defendants’ websites, the defendants’ servers will dictate that RC4 be used. If the clients’ browsers do not offer RC4 as an encryption algorithm, RC4 will not be used. However, that is not to say that that the client’s computer is not directed or controlled by the defendant’s server; it simply establishes that in such an instance no infringement takes place.. . . The defendants’ argument on this point is as flawed as the argument that when a physician performs a patented medical procedure on a patient that requires some action by the patient — e.g., swallowing a pill — there is 'divided infringement' because the patient could have decided not to undergo the medical procedure in the first place."

TQP Development, LLC v. Intuit, Inc., 2-12-cv-00180 (TXED June 20, 2014, Order) (Bryson, C.J.)

Damages Expert Cannot Exclude Claimed Elements From Royalty Base

The court granted plaintiff's motion to exclude the testimony of defendant's damages expert because of his royalty base analysis. "[The expert] notes that during prosecution, all elements of [plaintiff's] asserted invention except for three image-processing steps were found obvious in view of the prior art. Thus, [the expert] deems the three image-processing steps to be the 'inventive aspect' of the asserted patents. The Wii Remote’s direct pointing device ('DPD') is accused of practicing the three image-processing steps in combination with a Bluetooth microcontroller. However, [since] the Bluetooth microcontroller existed in the prior art [at the time of invention], [the expert] concludes, the proper royalty base is the DPD alone, and does not include the accused Bluetooth microcontroller or any other portion of an accused device. . . . [Defendant] argues the royalty base should only include products accused of infringing the 'inventive' aspects of the asserted patents. Thus, it maintains that [its expert's] report properly excludes revenue associated with components alleged to infringe claimed elements that the patentee did not invent. [Defendant's] position is unsupported. While it is sometimes necessary to apportion the smallest salable patent practicing unit to remove the value of unclaimed elements, [defendant] has not cited any precedent permitting the complete removal of the value of claimed elements. . . . [Defendant's expert's] royalty base must include the value of all claimed elements."

ThinkOptics, Inc. v. Nintendo of America, Inc., et al, 6-11-cv-00455 (TXED June 21, 2014, Order) (Davis, J.)

Judge Robinson Adopts “Limited Prosecution Bar Regarding All Reexaminations, Inter Partes Reviews, And Any Other Post-Grant Review Proceedings”

The court sua sponte imposed a "a limited prosecution bar regarding all reexaminations, inter partes reviews, and any other post-grant review proceedings" to address the "growing proliferation of parallel proceedings between federal trial courts and the Patent and Trademark Office . . . [and] the Federal Circuit['s] [recognition] that 'strategically amending or surrendering claim scope during prosecution' can implicate competitive decision-making . . . thus giving rise to a risk of inadvertent use of confidential information learned in litigation." "[I]n an effort to balance a plaintiff's need for coordination among its counsel with a defendant's appropriate concern over the security of its proprietary information in the context of a protective order . . . the parties shall operate under a limited prosecution bar regarding all reexaminations, inter partes reviews, and any other post-grant review proceedings. . . . Plaintiffs shall designate one or more attorneys on their trial team who will be responsible for consulting with counsel handling any administrative review process, in order to coordinate coherent and consistent positions in various proceedings. . . . [O]nce any such person has viewed defendant's highly confidential source code, the prosecution bar set out in this order shall apply to such persons. . . . This order shall remain in effect until one year after final termination of this litigation."

Versata Software Inc., et. al. v. Callidus Software Inc., 1-12-cv-00931 (DED June 19, 2014, Order) (Robinson, J.)

Selective Joinder of Eastern Retailers to Buttress EDTX Venue Against West Coast Manufacturer Proves Unsuccesful

The court granted a manufacturer defendant's motion to sever and transfer venue from the Eastern District of Texas to the Western District of Washington. The interests of justice factor weighed in favor of transfer because of plaintiff's litigation tactics. "[T]he litigation tactics [plaintiff] has employed in an attempt to maintain venue in this District are now in clearer focus. Those tactics have not supported the interests of justice. Defendants have had to wait nearly two and a half years to have their motion to transfer properly heard. . . . Even though neither [plaintiff] nor [movant] had ties to this District, [plaintiff] filed suit in this Court alleging infringing acts against not only [movant], but also nineteen Retailers . . . located almost entirely in the eastern half of the country. . . . Tellingly, [plaintiff] did not accuse other major retailers like Amazon.com, Costco, Fry’s, or eBay, which are located in Washington and California. [Plaintiff] then used the presence of the accused Retailers to argue that the case should not be transferred. It also added claims against the Retailers regarding non-[movant] products and used the presence of those added claims to argue that the case against [movant] should not be severed. Now, [plaintiff] argues that it should benefit from the judicial experience gained during the nearly two and a half year delay it perpetuated. [Plaintiff's] tactics are not in the interest of justice, but contrary to it."

UltimatePointer, LLC v. Nintendo Co., Ltd., et al, 6-11-cv-00496 (TXED June 17, 2014, Order) (Davis, J.)