PTAB’s Final Written Decision Addressing Some But Not All Challenged Claims No Basis for Lifting Stay

The court denied plaintiff's motion to lift a stipulated stay pending inter partes review because the PTAB had not resolved two uninstituted claims following the Supreme Court's decision in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018). "Although the PTAB denied institution of IPR proceedings with respect to claims 5 and 10, and issued a final written decision on all remaining claims, the Supreme Court recently ruled that the PTAB must issue a final written decision 'with respect to the patentability of any patent claim challenged,' and 'in this context, as in so many others, "any" means "every."' For this reason, the Federal Circuit remanded [defendant's] appeal to the PTAB for issuance of a final decision regarding the patentability of claims 5 and 10. Consequently, the PTAB has yet to resolve the patentability of all challenged claims in the pending IPR proceeding, and the terms of the parties' stipulation have not been satisfied."

DermaFocus LLC v. Ulthera, Inc., 1-15-cv-00654 (DED June 7, 2018, Order) (Fallon, MJ)

Contract Law Expert Report Stricken as Unhelpful

The court granted plaintiff's motion to strike report of defendant's contract expert regarding whether defendant sold anticipating prior art before the critical date because the testimony was unhelpful. "There is little evidence in the expert report that [the expert] has brought any of his expertise to this exercise. . . . The [expert] indicates no particular expertise in review of purchase orders, invoices, product shipping records, or the like. He indicates no particular expertise in interpreting what the fact witnesses who have been deposed have said. He indicates no reliance on anything relevant to the particular industry. In my opinion, any reasonably literate English-speaker could apply the legal principles to the factual record on the relevant sale and offer to sell issues. . . . The only specialized knowledge that [the expert] has is the same thing -- contract law -- which in our system is my responsibility. For the most part, his expert report outlines the closing argument one might expect Defendant's lawyer to make after the jury has heard the underlying testimony and seen the underlying documents."

BASF Corporation v. Johnson Matthey Inc., 1-14-cv-01204 (DED June 6, 2018, Order) (Andrews, USDJ

Judge Shopping Tactic Constitutes Serious Misbehavior Justifying Award of Attorney Fees

Following a dismissal for failure to prosecute after six years of litigation, the court granted defendants' motions for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation tactics were unreasonable. "⁠[P]laintiff filed eight separate actions in this district against parties who turned out to be [the software developer defendant's] customers. None of those cases were marked as related. . . . [A week later] plaintiff filed nine more separate actions in this district, again against parties who turned out to be [the developer's] customers. Again, none of these cases were marked as related. . . . [B]efore any of the defendants had been served -- plaintiff voluntarily dismissed every case that had not been assigned to [one judge] except [for two cases]. Then . . . plaintiff filed five more cases in this district against four more of [the developer's] customers and against [the developer] itself. This time, plaintiff marked these cases as related to each other and related to [a case] which had been assigned to [that judge]. . . . The Court therefore finds that plaintiff deliberately . . . waited to file its case against [the developer] itself until it could mark that case as related to one in front of its preferred judge. That conduct, under the circumstances, is serious misbehavior."

DataTern, Inc. v. Blazent, Inc., et al, 1-11-cv-11970 (MAD June 5, 2018, Order) (Saylor, USDJ)

"Necessary" Distributor’s Place of Business Does Not Establish Venue for Supplier

The court granted defendant's alternative motion to transfer for improper venue because defendant did not have a regular and established place of business in the district through its "necessary" distributor. "⁠[T]here is abundant case law from other district courts holding that a distributor’s place of business cannot establish venue for its supplier. Citing no case law, [plaintiff] responds that this uniform line of cases is distinguishable because 'none of them involve the case where the use of a distributor is necessary to conduct the business of the defendant.' However, business necessity is insufficient to impute [a distributor's] place of business to [defendant]. . . . The purpose of the statutory limits on venue in the patent venue statute was to protect defendants from being sued in forums distant from their place of incorporation or residence. [Plaintiff's] proposed 'necessary distributor' rule would largely defeat that policy; indeed, given that smaller manufacturers are more likely to need to rely on distributors than larger ones, [plaintiff's] rule would have the perverse effect of subjecting smaller corporations more subject to suit in distant forums than larger ones."

EMED Technologies Corporation v. Repro-Med Systems, Inc. d/b/a RMS Medical Products, 2-17-cv-00728 (TXED June 4, 2018, Order) (Bryson, CJ)

Infringement by Defaulting Company Controlled by Former Employee Justifies Award of Enhanced Damages

The court granted plaintiff's motion for enhanced damages against a defaulting defendant because defendant's motivation for harm, lack of a good faith defense, lack of remedial action, duration of misconduct, and lack of closeness of the case favored treble damages. "⁠[P]rior to joining [defendant], [defendant's chairman] was employed at [company related to plaintiff], where he gained familiarity with [plaintiff's] intellectual property rights. . . and, prior to initiating this action, [plaintiff] sent [defendant] a letter notifying it of the [patent-in-suit] and [defendant's] infringing actions. Those facts, taken together with the fact that [the parties] are direct competitors, support an inference that [defendant] deliberately infringed the [patent], with the purpose of harming [plaintiff's] business. . . . [T]here is no evidence in the record to support a finding that [defendant] investigated the scope of the [patent] and formed a good-faith belief that it was invalid or that it was not infringed. . . . [T]he record is devoid of any evidence that [defendant] took remedial actions. . . . [Defendant] sold its infringing product [for almost a year]. Finally, because default judgment has already been entered as to [defendant's] liability for infringement, the closeness factor supports enhanced damages."

Sabinsa Corporation v. Olive Lifesciences Pvt. Ltd., 3-16-cv-03321 (NJD June 1, 2018, Order) (Wolfson, USDJ)

Valuation Cap Based on Difference Between Prior Offer to Sell and Prior Offer to License Patent-in-Suit Does Not Render Expert Opinion Unreliable

The court denied plaintiff's motion to strike portions of the rebuttal report of defendants' damages expert because his theory capping the value of a patent-in-suit based on prior licensing negotiations was not unreliable. "Plaintiff complains about [the expert's] conclusion that, because [a technology transfer company] offered to sell the [patent-in-suit] to [a third party] for $100 million in December 2011 and to license the patent for $70 million in March 2012, the $30 million difference means the value of [the patent] to all other potential licensees cannot be more than 30% of the value of the patent. . . . That the Federal Circuit may not have endorsed a damages theory does not make such a theory incorrect or unreliable -- it simply means it’s untested by an appellate court. Also, although Plaintiff may disagree with [the expert's] ultimate conclusion and reasoning, he clearly considered the passage of three years after [the transfer company's] negotiations with [the third party] in his analysis."

Kaist IP US LLC v. Samsung Electronics Co., Ltd. et al, 2-16-cv-01314 (TXED May 31, 2018, Order) (Payne, MJ)

Venue Statutes Do Not Apply to Foreign Defendant

The court denied defendant's motion to dismiss or transfer for improper venue. "While it was previously unclear whether § 1400(b) was controlling for foreign defendants involved in patent infringement suits, the Federal Circuit recently reaffirmed the 'long-established rule that suits against aliens are wholly outside the operation of all the federal venue laws, general and special.' Thus, a foreign defendant may be sued in any judicial district under 28 U.S.C. § 1391(c)(3). . . . Here, it is uncontested that the sole defendant in the case is a Swedish corporation. In light of this recent Federal Circuit case, the Court finds that venue is proper over [defendant] in this District."

Endo Pharmaceuticals Inc. v. Lupin Atlantis Holdings SA, 2-17-cv-00558 (TXED May 30, 2018, Order) (Gilstrap, USDJ)