Delaware Patent Litigation Report : Delaware Intellectual Property Lawyer & Attorney : Morris James Law Firm : Delaware Patent Litigation Report

This patent infringement case involves technology associated with a system for marketing prepaid tickets for leisure activity.  Defendant asserted numerous non-patent counterclaims, including claims under the Delaware Deceptive Trade Practices Act, tortious interference, attempted monopolization, and false advertising.  Plaintiff moved to sever, dismiss, bifurcate, or transfer the counterclaims, asserting, inter alia, no logical relationship between the counterclaims and the patents in issue.  The motion was denied.  There is some factual relationship between the counterclaims and the patents-in-suit which plaintiff acknowledge in a different litigation.

This patent infringement litigation involves a patent directed to a system for marketing leisure activity services through prepaid tickets.  Following limited product identification discovery as to the accused products, the defendant moved for dismissal for failure to state a claim upon which relief may be granted.  The motion was converted to one for summary judgment because the parties relied on matters outside the pleadings.  The court then issued a report and recommendation granting the motion in-part and denying it in-part.  The court recommended a finding that one of the accused products does not infringe and a denial of the motion as to the other accused product because a genuine issue of material fact existed as to that products functionality.

This case was filed 4/16/10 and the scheduling order permits amending the complaint by January 14, 2011, the date this motion was filed.  The complaint was amended once.  The amendment adds a new defendant which acquired the existing defendant in December 2010.  The court elects to treat the motion as a motion to supplement.  It addresses the challenge to the sufficiency of the pleading under Twombly and Iqbal, finding that the supplemented complaint is sufficiently plead.  It notes that the amended complaint alleges knowledge of the patents-in suit as well as knowledge of the alleged infringement.  Additionally, a merger agreement between the two accused infringers requires the newly added defendant to permit the sale of the accused products.  The court finds the claim of inducement of infringement to be sufficiently plead.

The disputed technology relates to pulse oximetry products which allows for the non-invasive measurement of blood oxygen saturation.  A Markman hearing was held on December 1, 2010.  The court construes 19 disputed terms.

This is an antitrust case between two pharmaceutical manufacturers competing over the sale of fenofibrate in the United States.  Plaintiff seeks an order requiring defendant to produce a witness to testify as to knowledge of wholly-owned subsidiaries located overseas (including knowledge of agreements alleged to be anticompetitive which are the subject of this litigation.  Defendant opposes the motion on the basis that the foreign nationals at issue are not asserted to be within the subpoena power of the court, have not been served with deposition subpoenas, and are not asserted to be officers, directors or managing agents of any party to the action.  The issue presented is the duty of a corporate patent to produce a 30(b)(6) witness to testify regarding the knowledge of a subsidiary.  The court denies plaintiff’s motion insofar as it relates to depositions of current employees of foreign affiliates, but requires defendant to produce a 30(b)(6) witness to testify with knowledge of both defendant and its subsidiary Fournier.

The court recognizes that the application of the Hague Convention or Federal rules may render this motion moot.  Plaintiff seeks evidence relating to the prosecution of certain patents.  Defendant seeks to bar testimony on the topic of the ‘729 patent which is not at issue in this lawsuit.  The Hague Convention provides that a letter of request “shall not be used to obtain evidence which is not intended for use in judicial proceedings, commenced or contemplated.”  The court finds that any inequitable conduct during the ‘729 patent prosecution is not relevant to plaintiff’s claims in this lawsuit.

Defendant seeks to transfer this infringement action to the Northern District of California pursuant to 1404(a) notwithstanding that it is Delaware corporation with its headquarters and principal place of business in Sunnyvale, California.  Plaintiffs are a German corporation and a New York corporation that is headquartered in Dublin, California.  The patents-in-suit are directed at technologies used in medical devices that perform radiotherapy medical treatments.  Defendant cannot complain about being sued in Delaware when it chose to incorporate here.  Therefore, the motion is denied.

The patents-in-suit are related to pulse oximetry systems.  Plaintiff’s complaint alleges infringement and willful infringement and seeks to enjoin defendant from further production, use, or sale of infringing products.  Defendants have asserted counterclaims of infringement and antitrust claims.  After bifurcating and staying the antitrust claims, the court considers defendants’ motion to bifurcate and stay discovery on damages.  This is a large and complex case with multiple patents, claims, and counterclaims where a finding of non-infringement or patent invalidity in the liability phase would obviate the necessity for a damages trial and render any damage exclusive discovery a waste.  However, defendants have not demonstrated that the probability that its defense will prevail at trial is any higher than the probably that plaintiff’s claims will.  Additionally, certain aspects of plaintiff’s liability case and damages overlap such that education of the jury on both is important.  Finally, plaintiff’s proposal to try patent damages before the antitrust jury following an antitrust liability trial, and its trifurcation plan empanelling a third jury to determine antitrust and patent damages simultaneously, retain the same possibility that a jury may inadvertently blur the distinction between legitimate patent enforcement and attempts to establish or further an unlawful monopoly.

The parties dispute whether the protective order should bar plaintiff’s trial counsel with exposure to defendants’ confidential information from participation in amendment of plaintiff’s patents on reexamination.  The court recognizes the competing interests but concludes that plaintiff should not be denied the advice of its trial counsel in amending claims on reexamination.  The court notes that claims can not be broadened but only narrowed during reexam.  The Court further notes that the parties have agreed that confidential information disclosed may only be used for the purpose of the litigation.  The risk of inadvertent or competitive use of confidential information in evaluating potential amendments is outweighed by the potential harm in denying plaintiff the full benefit of its trial counsel’s advice.

The court is not convinced that plaintiff will suffer irreparable harm if the injunction does not issue.  The court has not been provided with a clear overview of the relevant market for the technology, and is not convinced these parties are direct competitors in a market using this technology.  The experts agreed that these parties did not compete for sales with respect to this technology.  The court declines to limit the digital identity market as narrowly as plaintiff urges.  Plaintiff’s pre-lawsuit licensing also weighs against injunctive relief.  Any infringement can be adequately compensated for with money damages.  The balance of hardships also does not favor plaintiff, which does not have a product currently using this technology.  It weighs in favor of neither party.  The public would not be disserved, however, should the court enter an injunction.  The court also declines to order an ongoing royalty.

The court rejects plaintiff’s arguments that the cited misstatements to the examiner were, due to the availability of other material, immaterial.  Misrepresentations about information can be material even if that information is provided to the examiner.  Nevertheless, the court finds that defendant has not proved intent to deceive by clear and convincing evidence.  The examples of purported inconsistent testimony, and representations made regarding reduction to practice, are insufficient to prove by clear and convincing evidence the intent to deceive, particularly as compared with the egregious conduct described in the case law defendant relied upon.  As for patent misuse, there is no evidence that plaintiff improperly leveraged its patent into post-expiration benefits. Even if it did, the court need not invalidate the patent but may grant relief with respect to any post-expiration benefits which have yet to occur and may not occur.

The claimed invention is a sweatband for sporting activities that is designed to absorb both perspiration and impact forces.  The Magistrate finds that summary judgment of non-infringement is appropriate in this case because no reasonable jury could find that the defendant’s product, the “Brain-Pad” insert is "curved in configuration" as required by Claim 1 of the patent-in-suit.  Plaintiffs’ reliance on the doctrine of equivalents is barred by prosecution history estoppel.  The application for the patent-in-suit was amended three times in response to the PTO’s comments.  The amendments narrowed the scope of Claim 1 by introducing a new limitation and therefore act as a general disclaimer of the earlier versions of the claim.  Plaintiffs assert that any disclaimer was confined to limitations that were only tangentially related to the claim.  The Magistrate disagrees. Because the Magistrate finds no direct infringement, summary judgment is also appropriate with regard to plaintiffs' claims of willful infringement, contributory infringement, and inducement of infringement.

In this ANDA case, defendant seeks to depose the inventors and persons supplying declarations during the patent prosecutions who reside in either Norway or Sweden.  The parties agree that the Hague Evidence Convention is the appropriate vehicle for this discovery, but Plaintiff objects to the extent they call for privileged information, contain misleading statements, are overbroad, call for legal conclusions, request documents with no foundation of existence, and require deponents to review documents to prepare for the deposition.  The requests need not be rewritten to cure the privilege concern because the individuals may avail themselves of the privilege provided in this country and the foreign country.  Plaintiff sought leave to file a surreply to report on further discussions.  The court is unpersuaded by plaintiff’s arguments of misconduct by the defendant for failure to apprise the court of an outstanding proposal.  The Letters of Request are to be revised to reflect the Magistrate’s management of the discovery issues in the case, and this order is to be provided to the foreign authorities and witnesses.

Plaintiff filed this action against defendants alleging infringement of its pulse oximetry-related patents.  Defendants countered alleging antitrust claims.  Plaintiff’s motion to bifurcate and stay discovery of the antitrust counterclaims was granted.  In light of the stay, defendants’ motion to compel discovery relating to the antitrust counterclaims is denied.  The parties are directed to meet and confer to ferret out what requests might relate to the parties' patent claims and to set a schedule for the simultaneous exchange of contentions.

No scheduling order has yet been entered in this matter, and no depositions have taken place.  Plaintiff’s argument that the motion to amend should be denied because the new patent is unrelated to the patents already in suit and the motion seeks to supplement rather than amend is rejected.  The court treats the motion as a motion to supplement, and grants the motion.  The court is not persuaded the new patent is unrelated to the products already in suit.  It further rejects the argument that the amendment will cause undue delay since discovery is nascent.  The court finds no evidence defendant acted in bad faith in bringing this motion.

The disputed technology involves pulse oximetry.  The complaint was filed in February 2009, amended in May, and defendant answered in June asserting 7 antitrust counterclaims.  On March 11, 2010, the court granted plaintiff’s motion to bifurcate the antitrust claims and stay discovery related to them.  Defendant moved for reconsideration.  The court finds that defendant has not even given lip service to the standards applicable to a motion for reconsideration.  The court rejects the argument that a stay is inappropriate absent extreme circumstances.  Nor is the court persuaded to reconsider its order based on the argument that the court erred in its treatment of plaintiff’s “system claims.”  The court does address defendant’s argument that it needs discovery on the antitrust claims for its patent misuse claim by amending its order to bifurcate the patent misuse claims and stay discovery on those claims along with the antitrust claims.  Defendant moves in the alternative to certify pursuant to 28 U.S.C. section 1292(b) the following question:  Whether, a patent holder, wielding economic monopoly power over a patented article, may rely on a “system claim” to exclude aftermarket competition from commodity components of the claimed system.  The court declines to certify that question unconvinced such certification would advance materially the termination of this litigation.

Defendant demands documents concerning drugs other than cyclobenzaprine, which is the subject of plaintiffs’ NDA, defendant’s ANDA and the patent-in-suit.  Defendant asserts inequitable conduct based on the failure to disclose the prior art patent to the patent examiner during the prosecution of the ‘739 patent.  Plaintiff objects to the requests on relevance grounds.  The parties have been before the Court before on similar issues at which time the Court granted and denied certain requests.  Defendant now claims that it has more narrowly focused its earlier discovery by limiting its document requests to those materials “evidencing the two inventors’ awareness and understanding of” certain purported prior art that was not submitted to the PTO during “a defined period of time.  The Court finds defendant’s new requests to be nothing more than an “end run” around the Court’s prior decision.  Defendant is requesting substantial discovery under Rule 34 on subjective intent related to prior art not yet plead as a basis for inequitable conduct to figure out whether it has any basis for inequitable conduct in relation to that prior art.  It is improper to use discovery in search of a factual predicate required to be pled in the first instance.  However, the failure to disclose the ‘215 patent during the prosecution of the ‘793 patent as inequitable conduct has been alleged.  The Court orders limited discovery to address this issue only.

Plaintiff moves to reargue the denial of its motion to compel production of all documents and testimony related to the validity and infringement.  It had unsuccessfully argued waiver of privilege by voluntarily producing advice of counsel documents.  The plaintiff’s sole contention that the court overlooked or misperceived defendant’s arguments is rejected.

The Court considers competing proposed scheduling orders for resolution of the remaining issues in the case following bifurcation.  The court’s prior order on bifurcation of damages will remain in effect, and plaintiff’s request for a jury trial on damages is presently denied.  A schedule for a bench trial and briefing on defendant’s equitable defenses and plaintiff’s request for injunctive relief will follow.

The parties manufacture competing products in pulse oximetry, a non-invasive procedure for measuring oxygen saturation in arterial blood.  Defendant’s counterclaims include seven antitrust counterclaims, including anticompetitive restrictions on licensing agreements, improper exclusion from competition by means of a proprietary interface, anticompetitive effects of a settlement agreement, and exclusionary pricing and bundling.  The court bifurcates the antitrust claims in the interest of efficiency, noting that tying the claims will likely significantly delay resolution of the validity issues raised.  Furthermore, trial on the patent claims may simplify the antitrust counterclaims. Finally, there is no prejudice to defendant in that it could have brought the claims years ago.

Plaintiff and defendant are both in the business of developing software and own patents pertaining to on-line internet-based transaction infrastructures.  Following a jury verdict for the defense, plaintiff filed a Renewed Motion for Judgment as a Matter of Law or, in the Alternative, for a New Trial on several grounds.  The Court finds that the jury in this case faced conflicting expert testimony and was entitled to resolve the issue of infringement in favor of defendant and denies plaintiff’s renewed motions for JMOL that defendant infringes the patents-in-suit.  With respect to invalidity of the ‘710 patent, the Court finds that plaintiff failed to preserve its right to move for JMOL on the ground that no there is no written description requirement in 35 U.S.C. §112, paragraph 1.  However, the Court agrees with plaintiff that defendant presented insufficient evidence from which a jury could reasonably conclude that defendant met its burden that the ‘710 patent lacked adequate written description.  Therefore plaintiff is entitled to JMOL that the ‘710 patent is not invalid for lack of written description.  The Court finds that defendant’s expert’s testimony is insufficient to support a jury’s finding of anticipation.  Thus plaintiff is entitled to JMOL on this issue. Because defendant presented no evidence that it conceived of that system prior to the ‘710 patent’s effective filing date, plaintiff is entitled to JMOL on this issue as well.
Plaintiff’s requests for a new trial on several aspects of invalidity are moot.  Finally, plaintiff’s request for a new trial on the ground that the jury applied an incorrect claim construction for the term “feedback information” is denied for failure to show that it was prejudiced. 
 

The technology in this case involves a system of transmitting high frequency data signals and lower frequency voice band signals over conventional telephone wiring.  The jury found that each of the asserted claims was invalid as anticipated and obvious and that each of the patents failed to comply with the written description and enablement requirements of §112.  Plaintiff alleged that Defendant used its patented system, without permission, to make DSL products more attractive to consumers.  The three patents-in-suit are directed toward transmitting data signals of different frequencies over conventional telephone wiring.  The Court grants Plaintiff’s motion for judgment as a matter of law on invalidity.  However, the Court finds for the defense on infringement.  Defendant contends that Plaintiff’s motion for JMOL of noninfringement must be denied for at least two reasons: (1) the record allowed the jury to determine that Plaintiff had not carried its burden with respect to infringement; and (2) the jury could have determined that the evidence showed that the telephones (a required element of every asserted claim) are not part of the accused system.  The Court finds that a reasonable jury could have determined that Plaintiff’s expert on infringement was impeached during his testimony and, therefore, lacked credibility.  In addition, Plaintiff did not establish that Defendant infringed the patents-in-suit under 35 U.S.C. § 271(a).  The Court finds that the claims of the patented invention require one or more telephones.  Because Defendant insists that the accused system neither requires nor uses telephones in any way, it does not “use” the patented invention.  The Court agrees that, since at least one “telephone device” is an element of each of the asserted claims, the absence of evidence that Defendant’s system includes that element is substantial evidence upon which the jury could have returned its noninfringement verdict.  Based on the Court’s findings of noninfringment, Plaintiff’s request for a new trial is denied.

The court is unpersuaded by Defendant’s laches arguments, noting defendant never undertook any investigation of the circumstances associated with plaintiff’s alleged infringing activities.  A reasonable patentee would have suspected Crown’s potentially infringing activities.  Thus court finds that Rexam has failed to raise a genuine issue regarding the fact that it should have known of Crown’s alleged infringing activities.  Further, because defendant delayed more than six years before filing its counterclaim, this court presumes that the delay was both unreasonable and prejudicial.  Rexam did not meet its burden of production and come forward with evidence sufficient to raise a genuine factual issue as to whether economic prejudice exists. Its evidentiary showing is thus insufficient to overcome the presumption of evidentiary prejudice.  The evidence also fails to raise a genuine issue of material fact as to Crown’s alleged particularly egregious willful infringement because (1) “there is no affirmative obligation to obtain opinion of counsel in order to avoid liability for willful infringement”85 and (2) there is no affirmative duty of care on potential infringers to determine whether their conduct is infringing, even if they have notice of another party's patent rights.

The court rejects all of the proposed constructions offered by the parties and construes seven claim terms.

The Magistrate considers plaintiff’s motion to compel production of privileged materials where the privilege was allegedly waived by defendant.  Plaintiff specifically moved to compel production of certain documents which defendant contends are subject to a common interest privilege.  Plaintiff maintains that such documents are discoverable because the opinions of counsel shared between defendant and its supplier were not subject to the common interest doctrine or joint defense strategy.  Plaintiff further argues that defendant waived any privilege with regard to all documents and testimony related to validity and infringement of the patents-in-suit because it voluntarily produced documents which reflect advice of counsel.  As a result, it claims that defendant waived attorney-client privilege to such communications on the same subject matter.  Having reviewed the documents, the Magistrate finds that a joint client relationship existed between defendant and its suppliers, there is no evidence of waiver, and the documents are not relevant to any crime-fraud exception.  Therefore, plaintiff’s motion is denied.  Defendant’s oral motion to compel is also denied although not discussed in the Opinion.  Finally, defendant’s motion for leave to file a reply is granted given the Court’s policy of considering all submissions.

The patent relates to an extended-release formulation of cyclobenzaprine.  Defendant claims inequitable conduct based on the claim that the patentee failed to disclose a patent with the same extended-release technology, making that patent material.  The fact that the inherent teaching of a prior art reference is applicable to an obviousness analysis as in Schering does not necessarily make the information relevant.  Disclosure of factual evidence upon which plaintiffs may rely concerning secondary considerations is not unreasonable. Interrogatory responses are required to be supplemented.

The court found that the representative could not respond on a number of topics listed in the deposition notice and orders costs and fees in the amount of $15,000 notwithstanding the fact that the witness was already scheduled to be redeposed.

Before the Court are three defense motions for summary judgment.  Also, plaintiff seeks to strike certain materials relied upon by defendant as well as permission to file a sur-reply to plaintiff’s motion for summary judgment of invalidity.  The Court finds that plaintiff has not presented clear and convincing evidence that defendants acted despite an objectively high likelihood that its actions constituted infringement of the patents-in-suit. In addition, defendants moved for summary judgment on invalidity or non-infringement which demonstrates a good faith belief in its defense. Summary judgment of no willful infringement is granted.  As for non-infringement the evidence presented creates a question of fact and defendants’ motion is denied.
Defendants next argue invalidity due inadequate description as pursuant to 35 U.S.C. § 1221(a).  Defendants have not shown by clear and convincing evidence that the written description requirement has not been satisfied.  Competing expert opinions create a question of fact precluding summary judgment.  The motion to strike materials and witnesses identified after discovery is moot based on ruling made at the pretrial conference.  Plaintiff also moves to strike two instances of inadmissible hearsay.  First, defendants seek to use witness testimony from a prior, unrelated litigation.  The Court strikes that testimony because there is no substantially similar interest, nor is there a sufficient community of interest.  The second statement involves certain faxes attached to a declaration which were alleged to be incomplete and were authored by the declarant.  The document is not hearsay since it is supported by the author of it through a declaration, and the declarant has confirmed that the document is complete and accurate. Therefore, the motion to strike is denied.  Finally, Defendants contend that two prior art references invalidate one of the patents-in-suit. Competing expert opinions preclude summary judgment.
 

The Court considers two pretrial issues.  First, patent misuse will be tried to the Court and not to the jury, in part so as not to further burden the jury already saddled with the “Einsteinian analysis and Herculean task” of responding to a 14-page jury verdict form with 20 questions containing over 160 subparts.  Second, post-lawsuit filing PTO claim correction does not apply retroactively to patent infringement causes of action arising prior to the correction by the PTO.  Because plaintiff has only asserted claims based on the corrected patent, and because the patent was corrected by the PTO after the filing of the lawsuit, plaintiff’s request for damages due to any infringement is limited to the PTO date of correction and thereafter.

Defendant moves to strike on the basis that the inventor is not qualified to opine on validity and infringement, that the declaration is a sham to avoid summary judgment, and that the expert does not rely on the Court’s claim construction.  At his deposition, Reed, an inventor of the patents-in-suit and 30(b)(6) designee, testified that he was not qualified to testify as to infringement or validity. In his second declaration Reed offers opinions on those topics.  The Court finds that there is no requirement that the expert expressly reference the Court’s claim construction and notes there is no inconsistency in the testimony offered and the Court’s construction.  With respect to invalidity and infringement, the scope of Reed’s testimony which would be permitted at trial was limited during the pretrial conference.  The Court will not consider the second declaration in its resolution of summary judgment issues.  It does not consider Reed’s second declaration a sham declaration as Defendant urges, but it is troubled by the responses, or lack thereof, during the deposition and will permit defendant to redepose him on the topics included in its motion to strike and in limine motion.  The Court’s requirement of one expert for each subject matter for each party is unaffected in the absence of good cause shown.

Defendants contend that plaintiff waited over six years after filing the patent application before telling the PTO it had claims to “automatically complet[ing] an on-line purchase,” an unreasonable delay serving to keep its invention hidden from the world.  Plaintiff responds that several of five patents in the same family were prosecuted simultaneously.  The Court finds that it must look at the history of the family as a whole.  It noted that Plaintiff’s explanation about the need to be selective in patent applications was reasonable.  The Court rejects the argument that Plaintiff misused its patents by coercing the World Wide Web Consortium into licensing its patent and by obtaining a contract to provide services beyond the life of the patents by asserting they were essential to a standard.  The court was unable to determine as a matter of law that Plaintiff’s agreements with XDI.ORG did not constitute per se patent misuse.  The court also found that evidence offered is insufficient on marking issues raised, and therefore denies Plaintiff’s motion, which asks the Court to hold as a matter of law that its marking was substantially consistent and continuous.  Finally, the Court grants plaintiff’s motion for summary judgment on the § 288 defense, noting that under that statute an invalid claim must be disclaimed before the commencement of suit.  None of the claims in dispute have been invalidated, and the motion is granted as a matter of law.

The disputed technology involves spray-dried mannitol products.  The court finds that in the absence of evidence that the corporate parent and other do-defendants closely operated together the parent’s ties are insufficient to impose personal jurisdiction over it under an agency theory.  There is no evidence that co-defendants ever made, labeled or packaged the accused product in Delaware.  Despite evidence that some accused product was sent to Delaware, moving defendants did not ship or import the accused product into Delaware.  Transportation arrangements were under the control of non-moving defendant SPI.  There has been an insufficient showing that two visits to Delaware to visit plants by a managing director of some of the moving defendants were tied to the disputed claims.  Specific jurisdiction requires an act to have occurred in Delaware and that the claims arose out of that act.  As for general jurisdiction, there is no evidence the moving defendants were involved in any business in Delaware or regularly solicited customers in Delaware, or derived substantial revenue from Delaware.  Jurisdiction will not exist over a foreign entity when its alleged infringing product came into the forum state through the unilateral acts of a third party who had no pre-existing relationship.

The Magistrate considers defendant’s motion to amend its Answer to the Second Amended Complaint seven months after the deadline in the scheduling order.  The schedule was subsequently extended for fact and expert discovery.  Defendant seeks to add an affirmative defense and counterclaim based on inequitable conduct that plaintiff knowingly and intentionally misled the PTO regarding the content of prior art and withheld material information.  Plaintiff opposes the motion and seeks permission to file a sur-reply brief.  Plaintiff’s amendments plead a new theory of inequitable conduct which is based on the additional information that was provided through the depositions of the inventors which took place 6 months after the deadline to amend the pleadings.  Therefore, there is no delay. Moreover, plaintiff is not prejudiced by the proposed amendments since the information which forms the basis of the new theory would have been in its control.  Thus, defendant’s motion to amend is granted.

Defendant fails to establish that plaintiff acted in bad faith when it refused to withdraw its infringement claims until after the claim construction hearing.  Although plaintiff could have conducted more investigation prior to filing, plaintiff’s assessment of infringement was reasonable.  The fact that it never provided proof of its allegations does not mean that it acted in bad faith in bringing those claims when the claims were plausible.  Nor does the timing of dismissal evidence inappropriate conduct.  Defendant asserts that plaintiff has waived its attorney-client and work product privileges and seeks discovery regarding plaintiff’s deliberations on whether to continue litigation.  The Magistrate finds no waiver and no need for the information in light of her ruling.

The first complaint was filed 8/8/06 and amended 9/9/06.  On 10/23/06 Defendant counterclaimed for declaratory judgment of noninfringement and invalidity.  The deadline for amending pleadings was 8/31/07.  Defendant amended its counterclaims to add a claim for correction of inventorship on 12/11/06.  The parties stipulated to amending deadline for amending pleadings to 10/8/07. A subsequent amended scheduling order pushed that deadline to 12/7/07.  The parties stipulated to Plaintiffs’ filing an amended complaint, which revised the amendment of pleadings deadline to 6/6/08.  Defendant answered on 1/2/08 without adding an inequitable conduct claim.  Plaintiff filed a third amended complaint, which Defendant answered on 6/23/08 adding a claim for unenforceability based on patent misuse and unclean hands.  The schedule was amended again on 11/13/08.  Defendant advised of its intent to assert inequitable conduct claims in a status conference on 10/15/08.  Defendant moved for leave to amend its answer, but before the opposition brief was filed, it announced it would seek to further amend based on deposition testimony from one of the inventors.  The schedule was amended again on 1/15/09.  Plaintiff asserts that the motion to amend was untimely and Defendant has not met the heightened “good cause” standard because it failed to timely pursue discovery.  The Court ruled that Defendant may amend to add well-pled counterclaims for inequitable conduct.  The scheduling order has been modified several times to serve the interests of both parties.  Defendant’s request is timely where it sought to amend shortly after it was able to satisfy Rule 9(b) pleading requirements and plaintiff is not prejudiced.  A new claim labeled “Other Prior Art” was not pled with particularity and therefore the motion to include that paragraph is denied.

Magistrate considers defendant’s motion to enforce a settlement agreement based on email correspondence sent by the plaintiff acknowledging that an agreement in principal had been reached.  Plaintiff previously dismissed all claims against defendant and only defendant’s inequitable conduct and patent infringement claims remain.  Considering the negotiations between the parties, a reasonable interpretation of the correspondence at issue indicates that it constituted an offer which concluded those prior negotiations.  Thus defendant’s motion is granted.

Magistrate construes 18 claims arising from four patents-in-suit, although the parties had reached an agreement on three of those claims.  Plaintiff’s construction is adopted in a little over half of the terms construed with the remainder interpreted in defendant’s favor.

Magistrate considers dispute over what is reasonable amount of attorney fees and expenses following ruling by Court awarding plaintiff its fees and expenses incurred in defending against certain infringement claims brought by defendant as to some of the patents-in-suit.  Defendant argues that the block method of billing used here makes it impossible to determine which fees and expenses are allocated to which claims.  Citing Beckman Instruments Inc. v. LKB Produkter AB, the Magistrate finds that plaintiff is not required to produce an “absolutely specific” accounting of the costs associated with defending the claims and finds the extensive billing statements provided which includes descriptions of the type of work related to defendant’s bad faith, billing rates and hours expended to be satisfactory.  Plaintiff’s request for fees and expenses is granted less the charges related to the overhead costs.

The Court declines to consider defendant’s claims of indefiniteness during claims construction.

The patents-in-suit related to Controlled Flight Into Terrain technology in the aviation industry.  Plaintiff alleges that there is substantial evidence of willful infringement, including actual knowledge of the patent, appreciation of the risk of infringement as evidenced by the fact that a patent opinion was deemed a major issue but never provided, and that no written record exists to corroborate defendant’s non-infringement analysis.  The Court finds that plaintiff has failed to show that defendants conduct was objectively reckless.  Unrefuted testimony shows that before going to market with the accused product, a patent review was performed and discussed with outside counsel.  The argument that a non-infringement opinion was necessary to prevail on summary judgment of non-willfulness is rejected.  Although defendant moved for summary judgment, the burden of proving willfulness by clear and convincing evidence rests with plaintiff.  Plaintiff was required to and failed to meet this standard to avoid summary judgment.

This action involves technology relating to terrain awareness warning systems in the aviation industry.  The Court found after a bench trial that the challenged claims were not invalid or unenforceable and denied defendants’ counterclaims.  The Federal Circuit vacated certain claim constructions and remanded for a new infringement determination.  It further affirmed the Court’s retention of jurisdiction over withdrawn claims and the decision that section 102 does not erect an on-sale and public use bar.  The court finds that plaintiff completely litigated the issue of lost profits against defendant Sandel in prior litigation with related but not the same patents-in-suit.  Issue preclusion prevents plaintiff from relitigating its lost profits analysis in this litigation and the court rejects plaintiff’s contention that issue preclusion must be based on the same patents-in-suit. Defendant’s motion for reconsideration on standing to recover lost profits is denied as a rehash of previously rejected arguments.  Additional arguments against lost profits are determined to be moot as a result of the first ruling.

On September 19, 2008 the Court issued its claims construction order and memorandum orders granting plaintiffs’ motion for summary judgment for non-infringement and granting in part and denying in part defendants’ motion for partial dismissal.  As a result of those orders, the only claims awaiting resolution in this matter are plaintiffs’ validity challenges to seven claims of the ‘516 patent and plaintiffs’ challenges to the enforceability of that patent.  This is the Magistrate’s decision on defendants’ motion to dismiss or for judgment pursuant to Fed.R.Civ.P. 54(b).  Defendants contend that as a result of the court’s September 19, 20098 orders, there is no live controversy between the parties with respect to the ‘516 patent.  Therefore defendants maintain that the Court has lost subject matter jurisdiction over plaintiffs’ declaratory judgment complaint and defendants’ reply to defendants’ counterclaims.  Defendants’ argument is that any present controversy between the parties with respect to the ‘516 patent is moot and will remain so unless the claim constructions are modified by the Court of Appeals.  Because the threat of future litigation is still very much at issue as Defendants actively seek review of the Court’s claim construction and non-infringement determinations, the Magistrate is unwilling to agree that the subject matter jurisdiction has been eliminated.  However, the Magistrate determines that considerations of judicial economy and reduction of litigation expenses are better served by permitting defendants to seek review of the Court’s claim construction and non-infringement orders at this time.  Therefore, the Magistrate grants defendants’ motion for judgment pursuant to Rule 54(b) and agrees to stay plaintiffs’ invalidity and unenforceability claims and defenses pending disposition of the appeal.

Plaintiff brings suit alleging infringement by defendant of four U.S. patents.  The same patents are also asserted in two other actions before the Court.  Defendant seeks to amend its answer to the first amended complaint to add the same claims of inequitable conduct previously raised in the companion litigation.  Defendant contends that it should be allowed to amend its answer since plaintiff had been aware of the defenses for nine months.  Defendant explains that it did not initially duplicate the defenses in this litigation since at the time it claims it was unnecessary to do so because if the patents-in-suit were held invalid and unenforceable in the companion litigation, the outcome would apply equally in this one.  Events have transpired in the companion litigation such that a stay has been issued until the Court can resolve a pending motion.  Due to the stay, the cases are no longer on the same trial schedule and it is unknown whether the inequitable conduct claims pled in the companion case will ever be heard.  Thus, defendant seeks to modify the pleadings in the instant matter to allege inequitable conduct.  Defendant’s defenses are directed to issues of non-disclosure and inconsistent representations made during prosecution of the patents-in-suit.  Finding that defendant’s allegations meet the requirement of Rule 9(b), the Court grants defendant’s motion to amend.

With regard to subject matter jurisdiction, defendant contends that an executed covenant not to sue as to certain infringement claims asserted by the defense divests the Court of jurisdiction to consider declaratory judgment on those claims addressed in the covenant.  The Court grants defendant’s motion to dismiss in that the Court lacks subject matter jurisdiction to determine the validity of the claims of the patent-in-suit other than the seven claims currently at issue.  The Court reaches the opposite conclusion as to unenforceability defenses citing to Medimmune, Inc. v. Genetech, Inc.  Ariad moves for summary judgment that two of three theories of inequitable conduct asserted by Amgen are moot based on its subsequent submissions to the PTO, thereby curing and defect.  Plaintiff does not dispute that defendant made the additional submissions but argues that defendant’s efforts do not meet the standards (particularly regarding the voluntary nature of the attempted cure)set forth in Rohm & Haas Co. v. Crystal Chemical Co.  In contrast, defendant argues that the more lenient standards set forth in Young v. Lumenis, Inc. should be applied.  The Court distinguishes between the assertion of directly misleading statements and the failure to disclose information. As to the first category, the Court applies Rohm & Haas and finds that a question of fact exists as to whether defendant’s attempt to cure is adequate.  As to the second category, the Court applies Young and determines that under that analysis plaintiff’s argument of inequitable conduct is moot in light of the subsequent submissions.

Plaintiff filed declaratory judgment action asserting that U.S. Patent No. 6,410,516 is invalid and not infringed.  The patented technology relates to Nuclear Factors Associated with Transcriptional Regulation.  The Court conducted a Markman Hearing on June 19, 2008.  The Order sets forth the Court’s construction of those claims adopting in large part Amgen’s proposed constructions.

Defendants first brought an action in Texas wrongly naming affiliates of Remy.  The named Remy affiliates moved to dismiss in Texas on the same day that this declaratory judgment action was filed in Delaware.  The Court finds that the Texas action is the “first-filed” action as the amended complaint naming the correct Remy affiliate relates back to the filing of the first complaint.  Given the weight this circuit gives to plaintiff’s choice of forum, the court declines to depart from the first-filed rule.
 

A full copy of the opinion is available here.
 

Plaintiff filed this action under 35 U.S.C. §146 seeking review of the judgment entered July 27, 2007 by the Board of Patent Appeals and Interferences by which the Board determined plaintiff to be the junior party and defendant to be the senior party with regard to the ‘381 Interference.  A dispute arose concerning the scope of the Court’s review and whether discovery was appropriate.  The subject matter of the ‘381 Interference was defined by a single count directed to a tumor necrosis factor receptor (“TNFR”) family polypeptide called TRAIL Receptor-2 (“TR-2”).  The Board considered and ruled on various motions including the proper scope of the interference, the filing date of various applications, whether plaintiff’s claims were patentable as well as various evidentiary issues including the admissibility of certain witnesses and evidence.  Following the Board’s decision on the parties’ motions, plaintiff requested reconsideration of the part of the decision holding its involved claims unpatentable under 35 U.S.C. § 102(e).  Plaintiff argued that a decision on that motion should have been deferred rather than decided on the merits.  The Board noted that plaintiff’s request for deferral was untimely and in any event, it had filed an opposition which was considered as part of the Board’s ruling.  On June 1, 2007, plaintiff was put under an order to show cause why this interference should be allowed to continue and judgment should not be entered against it in light of the Board’s prior determinations that plaintiff’s claims were unpatentable.  Plaintiff argued that (1) the Board is statutorily obligated to decide priority of invention and (2) plaintiff will prevail on priority.  The Board issued a judgment against plaintiff.

The Court finds that the issue of priority was raised adequately below and is proper before the Court.  The Court rules that the parties may conduct discovery on the priority issue.  Noting the Federal Circuit’s silence on whether a district court may properly restrict the admission of testimony on an issue raised before the Board, the Court finds that the parties should be permitted to take discovery concerning the remaining issues which were raised before the Board.

A full copy of the opinion is available here.

 

The Court previously found two patents-in-suit to be invalid and the third not infringed.  In March, 2005, a rebuttal expert report by Dr. Rudd was served which pointed out defects in the expert report by plaintiff’s expert Dr. Alexander.  Plaintiff provided no explanation for those errors or reason why they were overlooked.  The Court finds that in the light of overwhelming evidence of anticipation, plaintiff failed to reassess its case, conduct which was manifestly unreasonable by March 2005. The Court does not award fees associated with defending certain claims where there was no clear and convincing evidence of bad faith litigation.

A full copy of the opinion is available here.


 

This infringement suit involves patents relating to on-line Internet based transaction infrastructures (or Concordance’s i-name vs. Amazon’s “1-Click®”).  Concordance moves for reconsideration of the Court’s November 20, 2007 memorandum order denying its motion to dismiss Amazon’s fourth counterclaim which seeks a declaratory judgment of infringement against Concordance. Also, Concordance seeks leave to file a reply memorandum including sanctions against Amazon for failing to support its allegations of infringement.  The Court denies Concordance’s motions having found that a controversy remains based on Concordance’s failure to show cessation of all potentially infringing accused services.

A copy of the full opinion is available here.

Crown’s patents-in-suit (‘875 and ‘826) involve the geometric dimensions of beverage cans which results in less metal usage.  Rexam argues that certain patents-in-suit are invalid as anticipated, obvious, indefinite and for failure to comply with the written description.  Rexam also contends that their product does not infringe literally or under the doctrine of equivalents.  After reviewing the records the Court determines that the ‘875 patent is invalid for failure to comply with the written description.  As for ‘826, Crown concedes that Rexam does not literally infringe.  However, it argues that even under the court’s construction, Rexam infringes under the doctrine of equivalents.  The Court disagrees and grants Rexam’s motion as to the ‘826 patent.


A full copy of the opinion is available here.

Summary judgment with respect to one patent was granted in favor of Plaintiff in a July 24, 2007 decision.  This decision moots Defendant’s motion as to that patent.  Defendant asserts that Plaintiff has infringed certain method claims with respect to a second patent relating to a manufacturing process for beverage cans.  Plaintiff contended that Defendant failed to prove each element if the claims in dispute, it had no obligation to come forward with evidence of material facts in dispute.  The Court finds Defendant has presented evidence of each element in the form of  drawings, samples, and witness testimony, and that Plaintiff has raised no issue of material fact.  Therefore, Defendant is entitled to summary judgment that Plaintiff has infringed such claims.

A copy of the full opinion is available here.

The disputed technology involves on-line internet-based transaction infrastructures, in particular i-name technology and software which links users and their respective personal address book information.  Defendant asserts that an actual controversy exists because the two patents-in-suit concern the same subject matter – i-name technology. I t further claims that plaintiff’s creation and marketing of a standard covering the accused i-name technology constitutes infringement, and selling i-name services through i-brokers is evidence of indirect infringement.  The Court finds that although plaintiff removed disputed references from its website, proof of cessation of other accused was not provided.  The motion to dismiss is denied.


A copy of the full opinion is available here.

The technology involved in this action relates to vertically aligned LCD modules.  One patent-in-suit had been found to be invalid for failure to disclose the best mode.  Other claims were found to be anticipated, mooting the infringement contentions the court find genuine issues of material fact as to whether the accused modules infringe each and every element of the disputed claims, including whether those modules have uniaxial media in light of the court’s claim construction.  Disputes facts remain as to the appropriate method of categorizing the accused modules.  A party must specify which modules are representative of a particular series or group, why they are representative and how their particular properties or components directly infringe each and every element of a claim.  With respect to infringement under the doctrine of equivalents, plaintiff merely alleges that every claim limitation is met.  No element analysis is done.  The court rejected the conclusory statement and granted defendant’s motion for summary judgment of noninfringement under the doctrine of equivalents.  With respect to the claim of inducement of infringement, the court has already found a factual issue relating to direct infringement precluding summary judgment.  In addition, plaintiff failed to establish the requisite intent.

A copy of the full opinion is available here.

The patents-in-suit are directed to the design and manufacture of LCDs and related products.  A claim construction opinion issued October 3, 2007.  The Court finds that there is no explanation as to how the prior art relied upon by defendant discloses the element “a nematic liquid crystal molecular layer of positive optical anisotropy.”  In addition, questions of fact concerning “uniaxial medium” preclude summary judgment.  The motion is therefore denied.

A copy of the full opinion is available here.