Wednesday, October 18, 2017

Post-Verdict Ongoing Infringement Justifies Enhanced Damages Despite Interim PTAB Decision of Unpatentability

Following a jury trial, appeal, and retrial, the court granted in part plaintiff's motion for enhanced damages and enhanced the jury's verdict by 50% because defendant's lack of a good faith belief of noninfringement, lack of closeness of the case, defendant's size, and its litigation conduct favored enhancement. "[Defendant's] decision to continue infringing was unreasonably risky, despite any interim decisions in proceedings before the Patent Office. . . . [T]he post-grant proceedings on [plaintiff's] patents have not resulted in cancellation of the asserted claims, as appeals of those proceedings are still ongoing. Further, though [defendant] claims that the PTAB’s final written decisions 'confirm' [its] belief in the invalidity of the asserted patents, these decisions were issued long after [defendant's] decision to continue infringing despite an adverse jury verdict. . . . [Defendant's] size and financial condition . . . also favors enhancement, as it is undisputed that [defendant] is one of the largest and most financially successful companies in the world. . . . [Defendant] repeatedly sought either to stay the litigation pending post-grant proceedings or to inject evidence of the proceedings into the trial, even after receiving adverse rulings from the Court and even after few, if any, relevant facts had changed since its last request, and despite the fact that invalidity was no longer in the case."

VirnetX Inc. v. Cisco Systems, Inc., et al, 6-10-cv-00417 (TXED September 29, 2017, Order) (Schroeder, USDJ)

Concern That Automatic Stay of FDA Approval Incentivizes Frivolous ANDA Cases Does Not Justify Award of Attorney Fees as Deterrent

Following summary judgment of noninfringement, the court denied defendants' motion for attorney fees under 35 U.S.C. § 285 and rejected defendants' argument that deterrence was necessary to protect other generic drug manufacturers. "[Defendant] contends that an exceptionality finding is warranted to deter future litigants from behaving like [plaintiff], especially in the context of the Hatch-Waxman Act, with its purpose (among others) to foster timely entry of generic drugs to the market. [Defendant] suggests that due to the statutory, automatic 30-month stay of FDA approval of an ANDA that is triggered by the filing of litigation, the Court should be alert to the incentives branded drug companies like [plaintiff] have to file frivolous cases, and should perhaps be more willing to find an ANDA case exceptional within the meaning of § 285. While these concerns may merit substantial weight in some other case, here they do not, as [plaintiff's] litigation position was not frivolous, and as the market here already included generic competitors at the time this suit was filed."

Reckitt Benckiser LLC v. Aurobindo Pharma Limited et al, 1-14-cv-01203 (DED October 16, 2017, Order) (Stark, USDJ)

Tuesday, October 17, 2017

Litigation Counsel's Involvement in Subpoena-Based Survey Renders Results Unreliable

The court granted defendant's motion to exclude the testimony of plaintiff's expert regarding his subpoena-based survey of 170 customers because counsel's involvement in the survey rendered the results unreliable. "Defendants argue that [plaintiff's counsel] essentially urged [survey] respondents to provide quick estimates rather than thoughtful investigations, thus rendering the survey inadmissible. . . . By emphasizing the quickly approaching litigation deadlines, the law firm implicitly encouraged at least [one customer] to produce any figure as a response, which seriously undermines the integrity of the received responses. . . . [T]he law firm’s correspondence with respondents regarding the scope of the question and the need for quick responses indicates the law firm’s ability to influence the survey results, which Plaintiff has admitted is improper. Because of the extensive attorney involvement here, the survey is unreliable and should thus be excluded."

Network-1 Security Solutions, Inc. v. Alcatel-Lucent USA Inc., et al, 6-11-cv-00492 (TXED October 13, 2017, Order) (Mitchell, MJ)

Monday, October 16, 2017

Evidence That Patents Survived 20 Reexamination and IPR Proceedings Excluded Under FRE 403

The court granted defendant's motion in limine to exclude evidence under FRE 403 that the patents-in-suit survived 20 reexaminations and inter partes review proceedings. "Because of the effect of IPR estoppel, the IPRs necessarily covered different prior art than will be used at trial. Whether that prior art was sufficient to invalidate the patents, as a general proposition, is irrelevant to the specific prior art at issue here. For that reason, admitting evidence of the IPRs is likely to mislead the jury into believing that because the patents-in-suit have survived many attacks, they must be valid against the present attacks. . . . Moreover, to the extent that IPR estoppel does not apply, such as for references petitioned but not instituted, there is no reason to show the jury that IPR was not instituted because the Federal Circuit has instructed that it does not matter the reason for the decision not to institute IPR."

Milwaukee Electric Tool Corporation et al v. Snap-On Incorporated, 2-14-cv-01296 (WIED October 12, 2017, Order) (Stadtmueller, USDJ)

Friday, October 13, 2017

Plaintiff's Failure to Conduct Due Diligence as to Standing Justifies Award of Attorney Fees Under § 285

Following a dismissal for lack of standing, the court granted defendants' motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation tactics were unreasonable. "[Plaintiff] brought this lawsuit without performing sufficient due diligence as to whether it had standing. It is clear from the pleadings that, from the outset, [plaintiff] was aware of the root of its standing issues. . . . Despite naming [the patent owner] as a co-plaintiff in the Complaint -- in essence, an admission that [the owner] was a necessary party -- [the owner's] signature or any identification of its counsel are conspicuously absent from the Complaint. . . . [Plaintiff's] litigation conduct makes this case exceptional because it insisted on maintaining this lawsuit even when faced with mounting evidence that it lacked standing. . . . [A]lthough the Court is not convinced that it rises to the level of intentional misrepresentation, [plaintiff] at least obfuscated the fact that there were potential problems with its standing."

Max Sound Corporation et al v. Google Inc. et al, 5-14-cv-04412 (CAND October 11, 2017, Order) (Davila, USDJ)

Thursday, October 12, 2017

Colloquial Reference to Facility Location Does not Establish "Physical Presence by Estoppel"

The court granted defendant's alternative motion to transfer for improper venue and rejected plaintiff's request to transfer its action from the Middle District of Tennessee to the Western District of Tennessee because defendant did not have a physical presence in that forum. "Plaintiff does not allege any physical presence by the Defendant in the Western District, and concedes that Defendant’s 'Memphis' facility is located in Mississippi. . . . Plaintiff also alleges that Defendant has previously stated that they maintain a 'Memphis' facility and that Defendant cannot now deny those representations. The correspondence that Plaintiff relies on, however, uses 'Memphis' as a colloquial reference to the facility’s location, rather than a representation that the facility is located in Memphis. Accordingly, Plaintiff’s 'physical presence by estoppel' argument fails to compensate for the factual shortcomings reflected in the record."

JPW Industries, Inc. v. Olympia Tools International Inc., 3-16-cv-03153 (TNMD October 10, 2017, Order) (McCalla, USDJ)

Wednesday, October 11, 2017

Evidence of More Than 1,000 Pre-Litigation Licenses May Show Established Licensing Program, Obviating Need for Individualized Comparability Analysis and Apportionment

The court denied in part defendant's motion in limine to preclude plaintiffs from presenting evidence of more than 1,000 pre-litigation licenses under the MPEG standards because the number of third party licenses was relevant under FRE 401 to issues other than infringement. "[E]vidence of plaintiffs' licenses with third parties, including the number of licenses, is relevant to damages, validity, willfulness, and in responding to claims that plaintiffs are litigious. . . . [E]vidence of plaintiffs' third-party licenses, including the number of such licenses, is relevant to the issue of damages as it relates to the issue of general acquiescence and an established royalty. . . . [I]f plaintiffs can show an established licensing program, a separate comparability analysis for each license entered into pursuant to that program is not necessary and concerns regarding apportioning value to account only for the value of the patents-in-suit will be an issue for the jury. . . . [Defendant's] attacks on the comparability of the 1,000 plus third-party licenses, including that the licenses cover patents other than the patents-in-suit and that [defendant's] circumstances differ from the third-party licensees, go to the weight to be accorded the evidence, not its admissibility."

Audio MPEG, Inc. et al v. Dell, Inc., et al, 2-15-cv-00073 (VAED October 6, 2017, Order) (Krask, MJ)