Infringement Claims Barred by Equitable Estoppel Following Ten-Year Delay in Filing Lawsuit

The court granted defendant's motion for summary judgment that plaintiff's patent infringement claims were barred by equitable estoppel due to its ten-year delay in filing suit and found that defendant was materially prejudiced by plaintiff's silence following its cease-and-desist letter. "In the six years leading up to [plaintiff's] suit, [defendant's] marketing and investment efforts in [the accused product] yielded sales that nearly quadrupled its revenue. Rather than demonstrate that the investment was 'simply a business decision to capitalize on a market opportunity,' as [plaintiff] claims, these facts indicate more strongly that [plaintiff] saw a market opportunity to resuscitate its previously abandoned claims in order to capitalize on [defendant's] stronger revenues. After ten years of failing to follow up on its threat of infringement, [defendant] would be undeniably prejudiced if the Court allowed [plaintiff] to bring forth its claims only after [defendant] made substantial investments in its product."

Akeso Health Sciences, LLC v. Designs for Health, Inc., 2-16-cv-07749 (CACD April 26, 2018, Order) (Otero, USDJ)

Patent Numbers in Surgical Technique Guides Do Not Provide § 287(a) Notice For Surgical Products

The court granted defendants' motion for summary judgment to limit plaintiff's damages for failing to mark its surgical products through its licensee's surgical guides. "Even though [the licensee] did not mark the licensed products or their packaging with [plaintiff's] patent number, [plaintiff] contends that the fact that [the licensee] listed the patent number in the surgical technique guides for these products as early as 2004 satisfies § 287(a)’s marking requirements. These guides are distributed to hospitals and at trade shows and are published on [the licensee's] website. Surgeons view and use the guides during the surgeries in which the device is used. . . . Because [plaintiff] has not established that the surgical technique guides were distributed or shipped with the licensed products, it cannot rely on the fact that these guides contain its patent number to show that it complied with the requirements of § 287(a)."

Acantha LLC v. DePuy Orthopaedics, Inc. et al, 1-15-cv-01257 (WIED April 25, 2018, Order) (Griesbach, USDJ)

Improper Venue Does Not Limit Applicability of First-to-File Rule

The court granted defendants' motion to dismiss plaintiffs' second-filed declaratory relief action under the first-to-file rule even though the defendants' first-filed action was filed in an improper venue. "The plaintiffs . . . contend that the first-to-file rule is inapplicable because the Eastern District of Texas lacked venue, and therefore, lacked subject matter jurisdiction over the case. Improper venue does not strip a court of subject matter jurisdiction since Congress authorizes district courts to evaluate venue and to transfer a case in which venue is improper to a district where the case could have been brought. For this reason, improper venue in the first-filed court does not limit application of the first-to-file rule or alter this Court’s conclusion that the rule applies here."

Sandoz, Inc. et al v. Duke University et al, 1-17-cv-00823 (NCMD April 24, 2018, Order) (Eagles, USDJ)

Defendants' Improper Jury Arguments and Discovery Misconduct Justify Award of Attorney Fees

Following a jury verdict of $21 million, the court granted plaintiffs' motion for attorney fees under 35 U.S.C. § 285 because defendant's litigation conduct was exceptional. "⁠[T]here cannot be serious doubt that [defendant's] litigation strategies unnecessarily complicated the proceedings and needlessly increased costs. . . . At trial, [defendant] repeatedly argued claim construction positions -- that the Court had rejected -- to the jury, despite the Court’s admonitions not to do so. . . . [Defendant's] conduct was so egregious that the Court gave the jury a limiting instruction. . . . [Defendant] also seemed to purposefully ignore the Court’s orders in discovery. . . . Disclosing a completely unreasonable number of obviousness combinations in your contentions, waiting until opposing counsel objects, then supplementing them three weeks after the deadline with a reservation that you may still rely on the originally disclosed number of combinations serves no purpose other than to increase the litigation costs for both sides and the burden on the Court. It should be noted that none of Defendant's conduct in isolation makes this case exceptional. Considering [defendant's] litigation misconduct in sum, however, the Court finds that this case is exceptional and stands out in comparison to the mine-run of cases."

Elbit Systems Land and C4I Ltd. et al v. Hughes Network Systems LLC et al, 2-15-cv-00037 (TXED April 23, 2018, Order) (Schroeder, USDJ)

Claims of Dietary Supplement Patent Not Directed to Unpatentable Natural Phenomena

The court granted plaintiff's motion for summary judgment that the asserted claims of its dietary supplement patent did not encompass unpatentable subject matter and found that the claims were not directed toward a natural phenomena. "Notwithstanding that the plain claim language refers to producing oxidized CoQ[10] on an industrial scale, Defendants contend that the asserted claims are 'directed to' the natural phenomenon that certain microorganisms have the natural ability to produce at least 70 mole % reduced CoQ[10] under standardized culturing conditions. . . . [T]he claims are 'directed to' a superior method of producing a certain end product -- in this case, efficiently creating oxidized CoQ[10] on an industrial scale -- rather than to the inherent properties of certain biological materials. That the asserted claims rely on the ability of certain microorganisms to produce reduced CoQ[10] at a ratio greater than 70 mole % among the entire coenzymes Q[10] under standard culturing conditions does not indicate the claims are 'directed to' this phenomenon."

Kaneka Corporation v. Zhejiang Medicine Co., Ltd. et al, 2-11-cv-02389 (CACD April 5, 2018, Order) (Otero, USDJ)

Ordinary Observer Test for Design Patent Infringement Requires More than "Quick Glance" to Determine "Same Basic Shape"

The court granted defendants' motion for summary judgment of noninfringement of plaintiffs' vacuum cleaner design patents and rejected plaintiffs' argument that the ordinary observer test may be satisfied with a "quick glance" to determine "the same basic shape." "⁠[Plaintiffs' infringement expert] opined that when an ordinary observer is cognitively processing visual design, the process 'proceeds to a point where recognition takes place,' and '⁠[o]nce this happens, the ordinary observer does not (de facto) continue to view the product at greater levels of detail but simply confirms that the product matches the knowledge they have about a product and then moves on to the next visual or physical task.' According to this approach, 'when any design shape is perceived by the ordinary observer as a member of the [plaintiff's] patented category as determined by overall shape, the act of categorization may constitute baseline infringement. . . . The 'ordinary observer' assumed in [the expert's] analysis does not give the kind of attention to the designs that the Federal Circuit requires under the ordinary observer test. The ordinary observer must consider 'all of the ornamental features illustrated in the figures.' She cannot be assumed to simply take a quick glance at the two vacuums, conclude that they are the same basic shape, and stop looking. The ordinary observer is presumed to use more care in her evaluation."

Dyson, Inc. et al v. SharkNinja Operating LLC et al, 1-14-cv-00779 (ILND March 29, 2018, Order) (Dow, USDJ)

Disgorgement of Profits For Design Patent Infringement Does Not Preclude Award of Pre-Judgment Interest

The court granted plaintiff's motion for pre-judgment interest and rejected defendant's argument that plaintiff was not entitled to any interest because the jury awarded design patent profits under 35 U.S.C. § 289. "Under 35 U.S.C. § 284, a patent owner may recover 'damages adequate to compensate for the infringement . . . together with interest and costs as fixed by the court.' Under 35 U.S.C. § 289, a patent owner may recover an infringer’s 'total profit' made from the infringement. In this case, the jury awarded [plaintiff] $3,018,174 under § 289, the 'total profit' from [defendant's] infringement of the Design Patent. According to [defendant], prejudgment interest is unavailable to [plaintiff] because it can only be recovered under § 284. [Defendant's] position is without legal support and at odds with cases that have applied prejudgment interest to patent infringement awards for total profit under 35 U.S.C. § 289."

Columbia Sportswear North America, Inc. v. Seirus Innovative Accessories, 3-17-cv-01781 (CASD April 17, 2018, Order) (Hernandez, USDJ)