Expert’s Reliance on Confidential Information From Other Cases Undermines Request for Additional Source Code​

The court denied without prejudice plaintiff's motion to compel the production of additional source code because of a potential protective order violation by its expert. "[Plaintiff] disclosed that the testifying expert was able to identify the purported incompleteness because he had previously been given access to the source code when working in other cases as an expert witness, apparently for parties adverse to [defendant]. In that other litigation, there were presumably protective orders and/or agreements in place limiting use in other cases of information obtained about [defendant's] confidential information, just as the protective order in this case imposes such limitations. The testifying expert’s reliance on confidential information of [defendant's] obtained in other cases therefore presents several questions requiring further elucidation. . . ."

Valencell, Inc. v. Fitbit, Inc., 5-16-cv-00002 (NCED May 29, 2017, Order) (Gates, MJ)

How Many Petitions for Inter Partes Review Have Less Than All Challenged Claims Granted?

With the recent grant of certiori in SAS Institute Inc. v. Lee, 16-969, the Supreme Court will answer the question:

"Does 35 U.S.C. § 318(a), which provides that the Patent Trial and Appeal Board in an inter partes review 'shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner,' require that Board to issue a final written decision as to every claim challenged by the petitioner, or does it allow that Board to issue a final written decision with respect to the patentability of only some of the patent claims challenged by the petitioner, as the Federal Circuit held?"

With Docket Navigator's Motion Success charts, you can create statistics in real-time, 24/7 that show the number of petitions for IPR that had all challenged claims granted, all challenged claims denied, and some claims granted or denied. In the following Motion Sucess chart, the red portions of the chart are petitions that had all challenged claims denied IPR, the green portion had all claims granted, and the gray "partial" portions had some claims granted, and some claims denied IPR:

Success Rates of PTAB Institutions of IPR

As a percentage of total decisions, partial institutions have decreased each year since the AIA was enacted. Denials of all challenged claims (the red portions of the chart) are at an all-time high as a percentage of total institution decisions for each year.

Failure to Account for Economic Differences Between Standards-Essential License and Hypothetical License Warrants Exclusion of Expert Testimony​

The court granted plaintiff's motion to exclude the testimony of defendant's damages expert regarding two prior licenses that the parties entered into under the HDMI standard as unreliable for failing to address the economic differences between the licenses and the hypothetical license-in-suit. "[Plaintiff] highlights the fact that [defendant] concedes that the HDMI standards setting organization 'imposes a patent non-assertion covenant and reserves the right to establish royalty fees.' While the Court declines to determine whether or not the HDMI licenses are subject to RAND obligations, the Court is persuaded that the economic differences between the HDMI licenses and the hypothetical license in suit (due to the fact that the HDMI licenses are standard-essential) are such that [defendant's expert] should have accounted for them. Failure to do so warrants exclusion."

Biscotti Inc. v. Microsoft Corporation, 2-13-cv-01015 (TXED May 25, 2017, Order) (Payne, MJ)

Failure to Disclose § 101 Defense in EDTX Initial Disclosures May Not Constitute Waiver​

The court denied plaintiff's motion to strike portions of the report of defendant's invalidity expert that included a previously undisclosed theory of unpatentability under 35 U.S.C. § 101, but reserved ruling on whether defendant waived that defense until trial. "[U]nlike some other districts’ Patent Rules, this district’s Patent Rules do not require a party to disclose an invalidity ground related to subject matter ineligibility under § 101. And because [the expert's] report does not identify any new factual basis for [defendant's] § 101 theory, no discovery violation has occurred. . . . Having said that, it is not clear why [plaintiff] has moved to 'strike' a portion of an expert report related to § 101 when both sides agree that invalidity under § 101 is not a jury issue. . . . Nor is it clear how [defendant] intends to raise its new § 101 invalidity theory when the time for filing motions for summary judgment has passed. If [defendant] intends to raise the theory for the first time during the JMOL phase of the case, the Court will address any waiver argument at that time."

Biscotti Inc. v. Microsoft Corporation, 2-13-cv-01015 (TXED May 24, 2017, Order) (Payne, MJ)

Multi-Level Encryption Patents Not Invalid Under 35 U.S.C. § 101

​ The court denied defendant's motion for summary judgment on the ground that plaintiff’s encryption patents encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "Plaintiff has adequately pleaded in this case that the patents create a solution to a computer-centric problem which is not addressed by the prior art. Despite Defendant's assertions, the claims are not reducible to putting a sealed envelope (single-level encryption) into a second sealed envelope (multi-level encryption) for extra security. Rather, the claims provide a specific solution to implementing the multiple levels of nested security through the 'object oriented key manager.' They offer a solution to a problem, multiple users in multiple locations accessing information at different security levels from a central repository, which would not exist but for the ubiquity of computer technology."

TecSec, Incorporated v. International Business Machines Corporation, et al, 1-10-cv-00115 (VAED May 23, 2017, Order) (O'Grady, USDJ)

Post-TC Heartland Venue Question Raised Sua Sponte​

Following the recent Supreme Court decision in TC Heartland, the court sua sponte ordered the parties to brief whether venue of plaintiffs' patent infringement action was proper. "In light of the recent United State Supreme Court case, TC Heartland LLC.v Kraft Foods Group Brands LLC (May 22, 2017), the parties are directed to brief whether venue is proper in this district. . . . The hearing set [in two weeks on defendant's motion for summary judgment of invalidity] is vacated and will be reset, if necessary, after resolution of the venue question."

Columbia Insurance Co. et al v. Integrated Stealth Technology Inc., 3-16-cv-03091 (ILCD May 23, 2017, Order) (Myerscough, USDJ)

Expert Testimony That Defendant Evaded and Avoided Taxes Excluded as Prejudicial ​

The court granted defendant's motion to strike the opinions of plaintiff's damages expert that defendant engaged in tax evasion and avoidance as unduly prejudicial under FRE 403. "[Plaintiff's expert] has offered opinions that [defendant] 'has structured its organization and business operations in an effort to attempt to avoid U.S. income taxes and reduce the contribution it makes to the U.S. Treasury.'. . . [Plaintiff] argues that [defendant's] taxation strategy rebuts [its] position that its sales occur outside of the United States. . . . The motivation of [defendant's] business model is not the issue. Plaintiff is free to discuss the way [defendant] conducts its business without getting into the tax consequences of those actions. The Court finds that any slight probative value of discussing [defendant's] taxation strategy at trial would be substantially outweighed by unfair prejudice to [defendant]."

Godo Kaisha IP Bridge 1 v. Broadcom Limited et al, 2-16-cv-00134 (TXED May 19, 2017, Order) (Payne, MJ)