Defendant’s Joint Defense Agreement With IPR Petitioner Does Not Require Estoppel as Condition of Stay

The court granted defendant's motion to stay pending inter partes review and rejected plaintiff's request that defendant be required to agree to estoppel as a condition of any stay. "[Plaintiff] asserted that 'there is less of a likelihood' that a stay will simplify the issues in this case because [defendant] can raise the same arguments from the IPR proceedings in this case. . . . [Defense] counsel acknowledged the existence of a joint defense agreement [with the IPR petitioner], but represented that [defendant] has 'absolutely no involvement…no involvement in any decision, anything about the IPRs.'. . . '[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.'"

Intellectual Ventures II LLC v. US Bancorp et al, 0-13-cv-02071 (MND August 7, 2014, Order) (Mayeron, M.J.)

Claim Requiring Mathematically Impossible Calculation Deemed Indefinite

The court granted plaintiff's motion for summary judgment that one of defendant's Coriolis flowmeter patents was invalid as indefinite following claim construction because the claims required a calculation that was mathematically impossible. "It is undisputed that the normalized pulsation is represented by a single number. . . . It is also undisputed that calculating a dot product requires a sequence of numbers. Accordingly, as [plaintiff] argues, calculating a dot product where one of the inputs is a single number is mathematically impossible. . . . [Defendant] suggests that a skilled artisan would understand the error of the claims and discern the intent of the inventor by ignoring the literal language of the claims. . . . The Court is not permitted to rewrite unambiguous patent claims simply because the process claimed cannot be performed as the patentee intended."

Invensys Systems, Inc. v. Emerson Electric Co. et al, 6-12-cv-00799 (TXED August 6, 2014, Order) (Davis, J.)

Failure to Produce Apportioned Sales Data Precludes Evidence That Patented Feature Did Not Enhance Profitability of Accused Products

The court granted plaintiff's motion in limine to preclude defendant from introducing evidence that the use of the patented invention in the accused products did not enhance the products' profitability because defendant failed to produce sufficient data in court-ordered discovery. "[Plaintiff] seeks a reasonable royalty for [defendant's] violation of [plaintiff's collagen] patent rights through the sale of the Accused Products. Data concerning both entire market value and apportioned value are relevant to the analysis, depending on which measure [plaintiff] uses for its royalty calculation. [Plaintiff] sought documents concerning the volume of sales of the Accused Products, gross sales receipts, and accounting standards used by [defendant]. . . . [Defendant] was ordered to produce records concerning not simply records of collagen sales, but records for sales of products which were collagen blends, or finished products. . . . While [defendant] produced substantial financial documentation, it is aggregated data, and does not provide apportioned data sufficient to allow [plaintiff] to construct a royalty claim on that basis. The Court therefore precludes [defendant] from introducing such documents at trial."

Biocell Technology LLC v. Arthro-7 Inc., et al, 8-12-cv-00516 (CACD August 4, 2014, Order) (Selna, J.)

Related IPRs and Appeal Weigh Against Use of Model Order to Limit Claims and Prior Art

The court denied without prejudice defendant's motion to focus patent claims and prior art because of pending inter partes reviews and an appeal involving four of the six patents-in-suit. "[Defendant] requests that the Court enter the Model Order in this case. [Defendant] argues that, with 118 claims and 6 patents, this is precisely the type of patent suit that the Model Order was designed to streamline. . . . [Plaintiff] explains that the Model Order’s limit on [defendant's] prior art references in this case is illusory because [defendant's] invalidity case is preserved in the other forums. [Plaintiff] contends that, on the other hand, entering the Model Order would increase the burden on [plaintiff] by forcing it to narrow its claims before their validity is decided. In light of the [related] appeal and IPRs that are currently pending, [defendant's motion] is denied without prejudice."

VirnetX Inc. et al v. Apple Inc., 6-12-cv-00855 (TXED August 4, 2014, Order) (Davis, J.)

No Stay Pending IPR Based on Agreement to Partial Estoppel

The court denied defendants' motion to stay pending inter partes review and rejected their proposed estoppel language as potentially simplifying the issues of the case. "Defendants . . . contend that a simplification of issues exists because 'they will not contest the validity of any claim determined by the PTAB to be patentable on any ground for which the inter partes review proceeding was instituted.' The estoppel agreed to by Defendants is a far cry from the true estoppel that would normally arise from an IPR proceeding, and is essentially illusory given that Defendants retain the right to assert invalidity challenges in this proceeding in an otherwise unlimited fashion, including challenging validity with references that the PTAB considered – but rejected – as a basis for instituting inter partes review. . . . The Court finds that the possibility of issue simplification in this case is not sufficiently persuasive to weigh in favor of a stay."

Personal Audio, LLC v. TogiEntertainment, Inc., 2-13-cv-00013 (TXED August 1, 2014, Order) (Payne, M.J.)

Purely Revenue-Driven Licensing Activities Alone Do Not Satisfy Domestic Industry Requirement for ITC Investigation

The ALJ granted respondent's motion for summary determination of no domestic industry and terminated complainant's investigation because complainant was a licensing entity whose patent-related activities were purely revenue-driven. "No nexus is asserted between [complainant's] licenses and development of the patented technology through production-related activities. In these circumstances, without evidence of any effort or investment by [complainant] directed to development of the patented technology ([complainant] relies on no such evidence), its revenue-driven activities do not satisfy the requirements of the [Schaper Manufacturing Co. v. Int'l Trade Comm 'n, 717 F.2d 1368 (Fed. Cir. 1983)] principle or subsection (C) [of 19 U.S.C. § 1337(a)(3)]. [Complainant's] licenses are divorced from any effort to develop patented technology or to bring products to the marketplace. The only purpose of its licenses, as set forth in [complainant's] own Business Plan, is to obtain revenue. . . . [T]he nature of [complainant's] licensing activities is, beyond dispute, 'revenue driven.'. . . [Complainant] cannot demonstrate (and does not even allege) any other domestic industry activities. As a result, [it] cannot establish a domestic industry as a matter of law."

Optical Disc Drives, Components Thereof, and Products Containing the Same, 337-TA-897 (ITC July 30, 2014, Order) (Lord, ALJ)

Lack of Maximum Length Limitation Renders Claims Indefinite Under Nautilus

Following a bench trial, the court found that plaintiff's boat motor patents were invalid as indefinite. "[T]he Court construed the term 'elongated drive housing' to mean 'a drive housing that is greater in measurement in one axis than in the other two axes.' . . . [and construed] the term 'drive shaft' [as] shafts comprised of segments connected by universal joints.' . . . [T]hese constructions . . . combined with the [patents'] lack of maximum length limitation, expands the reach of [the] Patents well-beyond the scope of his invention to include traditional long-tail motors. This ambiguity regarding the scope of the [patents] remains even when the Patents' claims are read in light of their respective specifications. . . . [T]he evidence clearly and convincingly demonstrates that [the claims] each 'fail[s] to inform, with reasonable certainty, those skilled in the art about the scope of [plaintiff's] invention.' Accordingly, these claims are invalid for lack of definiteness under the newly minted test announced by the Supreme Court in [Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124 (2014)]."

Broussard et al v. Go-Devil Manufacturing Co. of LA, Inc. d/b/a Go-Devil Manufacturers of Louisiana, Inc., 3-08-cv-00124 (LAMD July 10, 2014, Order) (Jackson, J.)