Friday, June 23, 2017

Eve of Trial Supplement to Damages Expert Report Justifies Monetary Sanctions Award​

The court sanctioned plaintiffs for producing an unsolicited addendum to their damages expert report which required defendants to file a motion to strike. "The Court has now three times granted Defendants’ Daubert Motions on the issue of [the expert's] estimation of indirect sales in the United States to prove damages for indirect infringement. . . . Given that the Court’s orders have been entirely clear and [plaintiff] has provided no justifiable explanation for why [the expert] impermissibly supplemented his report without leave of Court on the eve of trial, thereby forcing [defendants] to file the instant emergency motion, the Court finds that fees for the motion are appropriately awarded to [defendants]."

Eidos Display, LLC et al v. AU Optronics Corporation et al, 6-11-cv-00201 (TXED June 21, 2017, Order) (Love, MJ)

Thursday, June 22, 2017

Failure to Timely Challenge Venue Before TC Heartland Waives Challenge Despite Reservation of Rights​

The court denied defendants' motion to transfer venue based on the recent Supreme Court decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017), because defendants waived their objection to venue. "[N]either [defendant] affirmatively sought dismissal or transfer because of the lack of 'resid[ence]' or the lack of a 'regular and established place of business' under § 1400(b) as interpreted by [Fourco Glass Co. v. Transmirra Prod. Corp., 353 U.S. 222], until . . . less than two months from trial. . . .The Court need not reach Defendants’ argument that a change in law constitutes an exception to waiver under Rule 12(h)(1)(A) because the Supreme Court’s decision in TC Heartland does not qualify. . . . 'TC Heartland does not qualify for the intervening law exception to waiver because it merely affirms the viability of Fourco.' [One defendant] argues that Defendants 'each expressly reserved their rights to challenge venue in the event TC Heartland changed the law,' but a defendant cannot state that it does not dispute venue while reserving the ability to later contest it. To conclude otherwise would undermine the purpose of Rule 12(g) and (h) to promote efficiency and finality."

Elbit Systems Land and C4I Ltd. et al v. Hughes Network Systems LLC et al, 2-15-cv-00037 (TXED June 20, 2017, Order) (Payne, MJ)

Wednesday, June 21, 2017

Representative Infringement Contentions Stricken Without Leave to Amend For Failure to Show Common Characteristics​

The court granted plaintiff's motion to strike defendants' infringement contentions based on representative accused products as insufficient. "[T]he patent owners have not adequately shown that their purportedly representative claims in fact share the same critical characteristics as other accused products. . . . [T]he patent owners will be strictly limited to accusing products that truly fit the theories described in their infringement contentions. The patent owners do not have leave to amend to add explanations about how the charted accused products are representative of other accused products. Nor do they have leave to amend to chart additional 'representative' products."

Comcast Cable Communications, LLC v. OpenTV, Inc. et al, 3-16-cv-06180 (CAND June 19, 2017, Order) (Alsup, USDJ)

Tuesday, June 20, 2017

Nature of NPE Plaintiff’s Business Does Not Waive Privilege as to Patent Valuation Analysis​

The court denied defendant's motion to compel the production of documents and rejected defendant's argument that plaintiff's non-practicing entity status precluded it from asserting privilege over ongoing business valuations of the patents-in-suit. "[Defendant] asserts that [plaintiff] cannot assert privilege over these documents due to the nature of its business: [plaintiff] only acquires and then licenses or litigates patents, so the information relates only to a business purpose. But the nature of [plaintiff's] business should neither preclude it, as a general matter, from asserting attorney-client privilege nor automatically shield all of its patent-related documents."

Polaris Innovations Limited v. Kingston Technology Company, Inc., 8-16-cv-00300 (CACD June 16, 2017, Order) (Oliver, MJ)

Monday, June 19, 2017

Collection of Working Group Papers Qualifies as a Single Prior Art Reference​

The court denied plaintiff's motion to strike portions of defendants' invalidity contentions concerning their assertion that a set of working group papers qualified as a single prior art reference, but ordered defendants to provide more specific invalidity contentions. "Plaintiff contends that this reference contains twenty-three documents that are not a 'prior art instrumentality.' . . . Defendants argue that the close relationship of the documents is demonstrated in that they are all seeking to solve the same technical problem, they are submitted using the same common format and numbering for the 3GPP working group, they were submitted by members of the group for a common purpose, and they were developed within a relatively small time frame. . . . [A]s a general matter, a network, or network solution/procedure, can constitute a single prior art reference and may include associated references that describe that network and/or solution. The fact that a network could constitute a single prior art instrumentality particularly makes sense where the allegations of infringement read onto specific network procedures as they do here. . . . While the Court finds that Defendants will be allowed to use these documents as a single reference, the Court finds that Defendants shall supplement their contentions to specifically identify the who, what, why, when, and where of the solution they seek to sufficiently put Plaintiff on notice."

Iridescent Networks, Inc. v. AT&T Inc. et al, 6-16-cv-01003 (TXED June 15, 2017, Order) (Love, MJ)

Friday, June 16, 2017

Economic Prejudice From 8 Years of Product Sales Supports Equitable Estoppel of Infringement Claim​

The court granted in part defendants' motion for summary judgment and found that plaintiff's claims for one of its boot design patents was barred by equitable estoppel because defendants suffered economic prejudice from plaintiff's misleading conduct. "In their [response] to [plaintiff's cease and desist letter], Defendants offered to completely cease selling the [accused] boot and to pay $1,500 to [plaintiff], which was based on profits from selling 240 [accused] boots. Had [plaintiff] accepted the offer, this would have been the extent of Defendants’ loss (or at least something close to it). Now, six years later, Defendants have sold over 750,000 knit boots, a substantial portion of which form the basis of [plaintiff's] damages claim. . . . [H]ad [plaintiff] accepted Defendants’ offer to cease selling the product [8 years ago], the time and money Defendants subsequently invested in the [accused] boot could have been spent on other products or business ventures."

Deckers Outdoor Corporation v. Romeo and Juliette, Inc. et al, 2-15-cv-02812 (CACD June 13, 2017, Order) (Wright, USDJ)

Thursday, June 15, 2017

Email Monitoring and Tracking Patents Not Invalid Under 35 U.S.C. § 101 at Pleading Stage​

The court denied defendant's motion to dismiss on the ground that plaintiff’s email monitoring and tracking patents encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "[Defendant's] abstract idea challenge is without merit as there is no credible argument that a patent on a system and methods for 'monitoring website activity' claims a longstanding commercial practice. The functionalities claimed in the patents were not imaginable before the Internet. Even after email came into use, the functionality claimed in the patents did not exist until plaintiff’s invention solved the technical problems associated with how email normally worked. . . . [T]he patents-in-suit overcame the problem of finding out whether a user opened an email or clicked on a link within the email. Those are problems confined to the Internet, and the patents provide Internet-based solutions."

InsideSales.com v. SalesLoft, 2-16-cv-00859 (UTD June 13, 2017, Order) (Kimball, SJ)

Wednesday, June 14, 2017

Shipping Products and Communicating with Customers Do Not Establish Regular and Established Place of Business in Forum State Sufficient to Support Venue​

Following the Supreme Court ruling in TC Heartland, the court granted defendants' motions to transfer plaintiff's patent infringement action from the Southern District of Ohio to the Southern District of Texas because plaintiff failed to establish that defendants committed the acts of infringement in the forum or had a regular and established place of business there. "The unsupported allegations of plaintiff's complaint that defendants sold and/or offered for sale accused product to a company in this judicial district are insufficient to establish that defendants committed acts of infringement in this district for purposes of venue under § 1400(b). . . . [P]laintiff has not provided any evidence to establish that defendants employ local representatives or store any product in this district. The fact that defendants may communicate by email or telephone with customers in the Southern District of Ohio or ship product from Texas to customers in this district does not establish that defendants have a permanent and continuous presence here. . . . Likewise, the allegation that defendants 'may have physically visited .. . or otherwise been in this district for business' is not sufficient because even if true, such visits do not establish a permanent and continuous presence."

Stuebing Automatic Machine Company v. Gavronsky d/b/a Matamoros Machine Shop et al, 1-16-cv-00576 (OHSD June 12, 2017, Order) (Litkovitz, MJ)

Tuesday, June 13, 2017

“Non-Infringing Alternative” Means Alternative that is Non-Infringing, Not Alternative That Could be Successfully Sued for Infringement​

The court overruled defendants' objection to the magistrate judge's recommendation to deny defendants' motion for summary judgment that plaintiffs were not entitled to lost profits damages because no infringing alternatives existed in the but-for world. "Defendants insist that the but-for world to which comparisons must be made in order to assess [plaintiffs'] claim for lost profits damages is a world in which non-party manufacturers of generic carvedilol would have existed, and from which direct infringers (i.e., physicians) would have obtained carvedilol. . . . The undisputed evidence is that Defendants' generic carvedilol is interchangeable with the generic carvedilol of the non-party manufacturers; therefore, the generic carvedilol of these non-party manufacturers is an infringing alternative - and not a noninfringing alternative. These non-parties' products, thus, would not exist in the but-for world, which must be constructed to include 'likely outcomes with infringement factored out of the economic picture.'. . . That there is no evidence that the non-party generic manufacturers could be held liable for induced infringement, while Defendants are charged only with induced infringement, does not alter this conclusion. The issue for the lost profits calculation is whether the product is non-infringing, not whether the alternative supplier has been, or could be, successfully sued for infringement."

GlaxoSmithKline LLC et al v. Glenmark Generics Inc., USA, 1-14-cv-00877 (DED June 9, 2017, Order) (Stark, USDJ)

Monday, June 12, 2017

Expert's Reasonable Royalty Analysis Based on Comparable Licenses Not Unreliable for Failing to Apportion

​ The court denied plaintiff's motion to exclude as unreliable the testimony of one of defendant's damages experts regarding his opinion that $6.16 billion was a reasonable royalty as to six patents-in-suit on the ground he failed to apportion between patented and unpatented technologies. "[Defendant] argues that the Federal Circuit has approved the methodology of calculating a reasonable royalty rate based on comparable licensing negotiations without performing a separate apportionment analysis on the smallest saleable unit. In comparing the licenses here, [the expert] showed that . . . the licensed patents had 'extraordinarily similar technology' to the technology of the patents being asserted here. [The expert] also identified indicia of economic comparability between the comparable license agreements and the hypothetical licenses involved here, as well as any effect of alleged differences between them. . . . [His] method is consistent with the Federal Circuit's approved methodology for valuing asserted patents based on comparable licenses. . . . Whether the prior license agreements [he] relied on are sufficiently comparable to support his proposed reasonable royalty is a factual issue best addressed by examination, including cross-examination, at trial."

Intel Corporation v. Future Link Systems LLC, 1-14-cv-00377 (DED June 8, 2017, Order) (Stark, USDJ)

Friday, June 9, 2017

TC Heartland is Not Intervening Law That Excuses Waiver of Venue Challenge​

The court denied defendants' motion to transfer venue due to waiver and rejected defendant's argument that the Supreme Court's recent ruling in TC Heartland qualified as an intervening change in law excusing such waiver. "Based on the Supreme Court's holding in [TC Heartland LLC v. Kraft Foods Grp. Brands LLC, No. 16-341 (U.S. May 22, 2017)], Fourco has continued to be binding law since it was decided in 1957, and thus, it has been available to every defendant since 1957. Accordingly, the Court finds that TC Heartland does not qualify for the intervening law exception to waiver because it merely affirms the viability of [Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957)]. [Defendant's] assumption that Fourco was no longer good law was reasonable but wrong, and it cannot be excused from its waiver by saying there was a change in the law. . . . ' Because the Supreme Court did not change the law, retroactivity is also not at issue, and the Court does not address Defendant's arguments regarding retroactivity."

Cobalt Boats, LLC v. Sea Ray Boats, Inc. et al, 2-15-cv-00021 (VAED June 7, 2017, Order) (Morgan, SJ)

Thursday, June 8, 2017

Improved Bargaining Position for Ongoing Royalty Does Not Support Trebling of Jury’s Implied Per Unit Royalty Rate ​

Following a jury verdict of $234 million, the court granted in part plaintiff's motion for an ongoing royalty and awarded a royalty at the same rate proposed by plaintiff's damages expert at trial. "[Plaintiff] seeks an ongoing royalty of three times the implied jury’s per unit rate but provided little justification for this figure. . . . [Defendant's] proposal that the court simply award the rate awarded by the jury for the past infringing sales is a non-starter. . . . Relying on [its] expert . . . [plaintiff] sought a royalty rate of $2.74 per unit, which the jury discounted, presumably because the jury found [plaintiff's] bargaining position during the hypothetical negotiation was not as strong as it maintained. In light of [plaintiff's] improved bargaining position after the jury’s finding of infringement and validity, the court finds that the $2.74 rate is fair and reasonable."

Wisconsin Alumni Research Foundation v. Apple Inc., 3-14-cv-00062 (WIWD June 6, 2017, Order) (Conley, USDJ)

Wednesday, June 7, 2017

Attorney Fees Award Not Limited to Expenses Caused by Litigation Misconduct Where Plaintiff’s Objectively Weak Positions Permeated the Entire Case​

Following remand, the court awarded defendants over $700,000 in attorney fees under 35 U.S.C. § 285 and rejected plaintiff's argument that fees should be limited to those incurred because of its litigation misconduct. "Plaintiff’s suggestion that any fees awarded in this case must 'only compensate for the extra legal expense caused by the litigation misconduct' is unpersuasive. . . . This Court found that the case was exceptional because Plaintiff’s efforts to manufacture venue, the use of a privileged email, and because of the overall weakness of the merits of Plaintiff’s positions taken at the [PTO]. It was not only Plaintiff’s conduct throughout the litigation, but also the objective weakness of Plaintiff’s proposed constructions before the [PTAB]. . . . Plaintiff’s misconduct permeated throughout the entirety of this matter. From the start of this litigation until the motion for attorney’s fees, Plaintiff’s conduct has stood out from the usual case. Accordingly, Defendants are entitled to their full fee as calculated by the lodestar method."

Large Audience Display Systems, LLC v. Tennman Productions, LLC, et al, 2-11-cv-03398 (CACD June 2, 2017, Order) (Real, USDJ)

IPR Estoppel Applies to Competitors' Product Manuals​

The court granted plaintiff's motion in limine to preclude defendants from asserting invalidity grounds based on competitors' product manuals because the manuals were reasonably available through searching and therefore could have been raised as grounds for unpatentability in defendant's earlier petition for inter partes review. "Defendants assert that manuals for prior art products are not estopped because they were not reasonably available through searching. Plaintiff counters that Defendants' executives knew about the competitor that had the products at issue, and Plaintiff argues that Defendants' position is disingenuous. This issue is a credibility issue because the manuals are undoubtedly printed publications, and Defendants' awareness of the manuals is the only question affecting whether these references are estopped. The Court does not believe that Defendants were unaware of a larger competitor's product lines, and thus, the Court finds that the [product] manuals were reasonably available through searching."

Cobalt Boats, LLC v. Sea Ray Boats, Inc. et al, 2-15-cv-00021 (VAED June 5, 2017, Order) (Morgan, SJ)

Tuesday, June 6, 2017

Parties Ordered to Brief Propriety and Effect of Alleging Resident “Doe” Defendant Following TC Heartland​

The court ordered additional briefing on defendant's motions to dismiss or transfer plaintiff's patent infringement complaint in light of the Supreme Court's recent ruling in TC Heartland and plaintiff's allegations against a resident John Doe defendant. "Plaintiff and [defendant] shall rebrief the issue of transferring this action in the wake of the intervening changes in governing law and Plaintiff's subsequent allegations against Defendant John Doe in the Amended Complaint [including] [w]hether a transfer of this action under 28 U.S.C. § 1404(a) is warranted after the United States Supreme Court's holding in TC Heartland, LLC v. Kraft Foods Group Brands, LLC, No. 16-341 (U.S. May 22, 2017), and after the addition of the John Doe Defendant [;][and] [w]hether Plaintiff had a good faith basis for pleading John Doe's residence in Paragraph 9 of the Amended Complaint."

Symbology Innovations, LLC v. Lego Systems, Inc., 2-17-cv-00086 (VAED June 2, 2017, Order) (Allen, USDJ)

Monday, June 5, 2017

Aggressive Litigation Tactics Creating Needlessly Repetitive, Irrelevant or Frivolous Work Warrants $8 Million Attorney Fees Award

Following a jury verdict of willful infringement, the court granted plaintiff's motion for attorney fees under 35 U.S.C. § 285 because defendant's litigation tactics were exceptional. "There can be no doubt from even a cursory review of the record that [defendant] pursued litigation about as aggressively as the court has seen in its judicial experience. . . . [Defendant] maintained its reliance on nineteen invalidity theories to the eve of trial, and then at trial presented only a single defense of anticipation and a single claim of invalidity under § 112. . . . [Defendant] asserted many more defenses through the summary judgment exercise, causing [plaintiff] to expend its resources on responding to such motions, all of which were denied. . . . [T]he court understands the need for flexibility in terms of allowing attorneys to vigorously pursue the best interests of their clients; as a consequence, the court has rarely awarded fees pursuant to § 285. However, [defendant's] litigation strategies in the case at bar created a substantial amount of work for both [plaintiff] and the court, much of which work was needlessly repetitive or irrelevant or frivolous. Of course, the fact that the jury found that [defendant's] infringement was willful is yet another factor to be considered."

SRI International Inc. v. Cisco Systems Inc., 1-13-cv-01534 (DED June 1, 2017, Order) (Robinson, USDJ)

Defendant’s Litigation Conduct, Market Position, Disdain for Plaintiff, and Weak Defenses Justify Enhanced Damages Award of $23 Million​

Following a jury verdict of willful infringement, the court granted plaintiff's motion for enhanced damages and doubled the jury award of $23.6 million. "[S]ome enhancement is appropriate given [defendant's] litigation conduct, its status as the world's largest networking company, its apparent disdain for [plaintiff] and its business model, and the fact that [defendant] lost on all issues during summary judgment and trial, despite its formidable efforts to the contrary. Even assuming for purposes of the record that [defendant] has undertaken some post-trial remedial actions, the court concludes that a doubling of the damages award is appropriate."

SRI International Inc. v. Cisco Systems Inc., 1-13-cv-01534 (DED June 1, 2017, Order) (Robinson, USDJ)

Friday, June 2, 2017

IPR Estoppel Warrants Exclusion of Patents and Printed Publications Except to Establish Dates of Public Use or Sale of Systems​

The court granted plaintiff's motion in limine to preclude invalidity arguments based on certain patents and printed publications due to IPR estoppel, but denied the motion as to prior art systems. "While [defendant] will be permitted to present its defense of invalidity based on [two prior art] systems, [defendant] will be limited to using any documents that qualify as patents or printed publications solely for the purpose of establishing the date on which the [two prior art] systems were in public use or on sale. [The motion is] denied as to [plaintiff's] argument that [defendant] is estopped from asserting the [two prior art] systems as prior art."

Biscotti Inc. v. Microsoft Corporation, 2-13-cv-01015 (TXED May 30, 2017, Order) (Payne, MJ)

Thursday, June 1, 2017

IPR Institution Decision Addressing Priority Date Entitled To No Deference​

The court denied defendant's motion for summary judgment that a patent-in-suit was not entitled to the filing date of the provisional application on the ground that the application did not disclose certain limitations as determined by the PTAB. "[Defendant] contends that the Court should apply substantial deference to the findings of the [PTAB], which at one point concluded that the provisional application did not disclose the offset band limitations and therefore the priority date of the [patent-in-suit] was its filing date. . . . [N]either party is appealing or directly challenging through some other statutory mechanism a decision by the PTAB. Therefore the cases cited by [defendant] do not require the Court to defer to the PTAB's findings. Further, the PTAB made this finding regarding the [patent] priority date in an order setting out its decision on a request by [defendant] to institute inter partes review. . . . The Federal Circuit has indicated that even the PTAB itself is not bound by findings it makes in decisions to institute inter partes review. . . . [Plaintiff] has now provided the Court with an expert declaration that impacts the determination of the priority date. The Court therefore declines to defer to the PTAB's preliminary determination on this issue."

Riddell, Inc. v. Kranos Corporation d/b/a Schutt Sports, 1-16-cv-04496 (ILND May 30, 2017, Order) (Kennelly, USDJ)

Wednesday, May 31, 2017

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)

Tuesday, May 30, 2017

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)

Friday, May 26, 2017

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)

Thursday, May 25, 2017

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)

Wednesday, May 24, 2017

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)

Tuesday, May 23, 2017

Patents Claiming Method for Parking Violation Enforcement Via Self-Release Booting System Invalid Under 35 U.S.C. § 101​

The court granted plaintiffs' motion to dismiss because the asserted claims of defendant's parking enforcement patents encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "[T]he [asserted patents] generally describe a method of parking violation enforcement via a self-release booting system which enables the person responsible for a vehicle to remove an immobilizing boot without waiting for an enforcement company or municipal employee to arrive on the scene. . . . [T]he [patents] are directed to the abstract idea of expediting the vehicle immobilization process via self-service. . . . [W]hile the . . . patent claims feature other, specific limitations and requirements, such as the use of RFID receivers and the need for a 'remote computer system' or PDA to identify vehicles and communicate their scofflaw status to a centralized host system, none are directed to a technological improvement in how each component works, or in how the use of each component promotes a technological advance. . . . The streamlining of a tedious process may be a welcome improvement, but it is, at its heart, an abstract one: a way of more efficiently 'organizing human activity.'"

SP Plus Corporation v. IPT, LLC, 2-16-cv-02474 (LAED May 19, 2017, Order) (Feldman, USDJ)

Monday, May 22, 2017

Sales of Broadcom Semiconductor Chips May Have Occurred Within the U.S. Despite Being "Ordered, Manufactured, Shipped, Billed, and Delivered to Buyers Abroad"​

The magistrate judge recommended denying defendant's motion for summary judgment that sales of its accused semiconductor products did not occur within the United States even though the products were "ordered, manufactured, shipped, billed, and delivered to buyers abroad." "[Defendant] designs and develops semiconductor chips domestically, but outsources the task of fabricating them to foundries in Asia. . . . [S]ummary judgment is proper only if the movant can demonstrate that, after viewing all facts in favor of non-movant, no reasonable juror could find that no substantial activities of a sales transaction occurred inside the United States. . . . A reasonable jury could find that many substantial activities relating to sales transactions occurred within the United States based on at least the fact that: . . . [T]he overwhelming majority of Defendants’ design, development, marketing and sales activities occur in the United States. . . . [Agreements] entered into in the United States govern the terms of purchase orders entered into outside the United States . . . Purchase orders entered into overseas may be processed and maintained by [defendant's[ domestic sales team . . . U.S. sales teams provide support to Defendants’ U.S. customers, and [defendant] categorizes its sales information and activity for internal purposes based on the location of end customers. . . . Defendants track sales commissions for sales of products made overseas as if they were domestic sales. . . . [Defendant uses products manufactured overseas to] determine sales force compensation."

Godo Kaisha IP Bridge 1 v. Broadcom Limited et al, 2-16-cv-00134 (TXED May 18, 2017, Order) (Payne, MJ)

Friday, May 19, 2017

Expert’s Failure to Provide Report Should be Addressed as Discovery Dispute, not Daubert Motion​

The court denied plaintiffs' motion to strike the expert disclosure of a defendant's employee because plaintiffs did not attempt to resolve the issue as a discovery matter. "While [defendant's vice President of Engineering] certainly appears to have direct and personal knowledge of some of the facts in the case, the opinions offered in his Disclosure fall in the realm of expert opinions subject to Rule 26(a)(2)(B). . . . Despite being aware of possible Rule 26 violations [3 months ago], Plaintiffs do not appear to have made any effort to obtain a written report through conference with Defendants or by bringing the matter to [the magistrate judge]. Instead, they waited nearly five weeks to file their Motion and raise these issues for the first time. Had they timely raised the issue when they learned of it at deposition -- and before the close of discovery [2 1/2 months ago] -- they might have been able to obtain an expert report and conduct additional investigation or depositions. Plaintiffs may not delay in challenging a Rule 26 violation and then seek the most extreme of sanctions in a Daubert motion filed after the proper time for challenging discovery violations has expired."

Rossi et al v. Darden et al, 1-16-cv-21199 (FLSD May 17, 2017, Order) (Altonaga, USDJ)

Thursday, May 18, 2017

Patentee May Not Modify Conception Date Disclosed in Infringement Contentions With Supplemental Interrogatory Response​

The court granted defendant's motion to strike plaintiff's supplemental interrogatory response and precluded plaintiff from asserting a conception date at trial earlier than the date disclosed in its preliminary infringement contentions. "[Plaintiff] had to disclose a specific date of conception and produce documentary evidence of that conception date in its Patent Local Rule disclosures. . . . [A]lthough [plaintiff] may have disclosed its proposed conception date in time for [defendant] to conduct discovery, that does not cure any prejudice resulting from [plaintiff's] failure to follow the local rules that 'require patent holders to ‘crystallize their theories of the case early in the litigation’ . . . . This poses a minimal burden for a patent holder, who should already know the conception date of a patented invention prior to commencing litigation.'. . . To the extent that [plaintiff] altered its conception date and evidence based on discovery, it had to amend its Rule 3 disclosures to include those changes. Because [plaintiff] did not do so, it cannot argue an earlier conception date than [its originally disclosed date], with respect to [defendant's] prior art."

Femto Sec Tech, Inc. v. Alcon LenSx, Inc., 8-15-cv-00624 (CACD May 16, 2017, Order) (Selna, USDJ)

Wednesday, May 17, 2017

Post-IPR Estoppel Does Not Apply to New Invalidity Theories​

The court granted plaintiff's motion to clarify an earlier order concerning the meaning of "ground for invalidity" for purposes of post-IPR estoppel under 35 U.S.C. § 315(e), but deferred ruling on whether defendant was estopped from asserting a specific theory on invalidity. "[Plaintiff] essentially asks the court to explain what a 'ground for invalidity' is. . . . [T]he defendant is not locked into the precise argument made in its IPR petition. But if the new theory relies on different, uncited portions of the prior art, attacks different claim limitations, or relies on substantially different claim constructions, then the new theory is tantamount to a new invalidity ground, and the court will treat it like a non-petitioned ground subject to estoppel. . . . At this point in the case, I cannot tell who, if anyone, is playing fast and loose with the meaning of [a claim term]. But it hardly seems fair to restrict [defendant] to the claim construction used in the IPR, if [plaintiff] is free to re-tool its infringement case with new claim constructions, as [plaintiff] suggests that it is free to do. I will defer a decision on whether these principles would estop [defendant] from contending that claim 6 is anticipated by Keeler under the alternative interpretation of [the claim term]. The parties are free to argue the § 315(e) estoppel issue at summary judgment."

Douglas Dynamics, LLC v. Meyer Products LLC, 3-14-cv-00886 (WIWD May 15, 2017, Order) (Peterson, USDJ)

Tuesday, May 16, 2017

Apple Ordered to Produce Discovery Regarding Unreleased Products and Prototypes

​ The ALJ granted complainant's motion to compel respondent to produce documents regarding unreleased products and prototypes expected to be imported before the conclusion of the evidentiary hearing. "The Commission routinely grants discovery with respect to future products. [Respondent] contends that it should be the exception to this rule, as [it] 'takes significant measures in an effort to maintain absolute secrecy over the details of its unreleased products under development.' As the undersigned has previously noted, however, [respondent] is not unique in wanting to preserve the confidentiality of its unannounced products. Additionally, a party is not permitted to unilaterally withhold discovery due to confidentiality concerns. The proper procedure for addressing such concerns is through a motion for a protective order. Notably, [respondent] has not made such a motion here."

Electronic Devices, Including Mobile Phones, Tablet Computers, and Components Thereof, 337-TA-1038 (ITC May 11, 2017, Order) (Bullock, ALJ)

Monday, May 15, 2017

IPR Estoppel Applies to “Subsets” of Prior Art Groups That the Petitioner Raised or Could have Raised During IPR​

The magistrate judge recommended partially granting plaintiff's motion for summary judgment that IPR estoppel barred defendant from asserting certain "subsets" of prior art groups previously asserted as unpatentability grounds in the IPR. "[T]he PTAB instituted IPR . . . under § 103(a) based on the combination of Kenoyer, Briere, and Hurley. [Defendant] should be estopped from asserting Kenoyer and Briere as a basis for obviousness at trial because [defendant] raised or could have raised this combination during IPR proceedings. Similarly, [defendant] should be estopped from asserting Kenoyer alone . . . because Kenoyer is a subset of Kenoyer, Briere, and Hurley. This portion of the recommendation, however, extends only to subsets of invalidity grounds that [defendant] raised or reasonably could have raised during IPR proceedings."

Biscotti Inc. v. Microsoft Corporation, 2-13-cv-01015 (TXED May 11, 2017, Order) (Payne, MJ)

IPR Estoppel Applies to Non-Instituted Grounds Included in a Petition Unless the Decision Not to Institute was Purely Procedural​

The magistrate judge recommended partially granting plaintiff's motion for summary judgment that IPR estoppel barred defendant from asserting certain prior art references and rejected the argument that IPR estoppel applied only to defenses raised after IPR institution. "The Court recommends adopting the narrow view of [Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016), cert. denied, (U.S. Oct. 31, 2016)] and [HP Inc. v. MPHJ Technology Inv., LLC, 817 F.3d 1339 (Fed. Cir. 2016)]. Namely, the Court reads Shaw and HP to exempt an IPR petitioner from § 315(e)'s estoppel provision only if the PTAB precludes the petitioner from raising a ground during the IPR proceeding for purely procedural reasons, such as redundancy. . . . Section 315(e) estops [defendant] from asserting at trial: (1) grounds for which the PTAB instituted IPR and determined those grounds to be insufficient to establish unpatentability after a trial on the merits; (2) grounds included in a petition but determined by the PTAB to not establish a reasonable likelihood of unpatentability (in other words, administrative review on the merits of a ground); and (3) grounds not included in a petition that a 'skilled searcher conducting a diligent search reasonably could have been expected to discover.' . . . [Defendant] is not estopped from asserting grounds included in a petition but which the PTAB found redundant or declined to institute review for another procedural reason."

Biscotti Inc. v. Microsoft Corporation, 2-13-cv-01015 (TXED May 11, 2017, Order) (Payne, MJ)

Friday, May 12, 2017

Plaintiff’s Failure to Dismiss in Light of Unrebutted Evidence of Noninfringement Warrants Rule 11 Sanctions​

The magistrate judge recommended Rule 11 sanctions against plaintiff for costs and fees incurred after defendant filed a motion to dismiss with declarations showing it "does not make, sell, offer to sell, or import any of the accused [products]." "[W]hile it is not clear that [plaintiff] undertook a proper investigation before filing suit against [defendant], [plaintiff's] conduct became objectively unreasonable at the filing of their opposition to [defendant's] Motion to Dismiss. . . . While [plaintiff] admits the question of liability was unclear at the time of filing, this relationship became abundantly clear at the filing of [defendant's] Motion to Dismiss with supporting declarations. . . . Tellingly, [plaintiff] decided shortly after the filing of its response to file suit against [defendant's licensee] [two months ago], but did not dismiss its claims against [defendant]. . . . [Plaintiff] did not reach out or file a stipulation of dismissal upon receipt and review of [defendant's] Motion and only attempted to file such a dismissal after it knew the Court was considering sanctions. . . . [T]his filing by [plaintiff] was simply too late to absolve [it] of its unreasonable conduct in pursuing opposition to [defendant's] Motion. . . . Instead, [plaintiff] continued to pursue its claims at the expense of the Court and the parties. The Court finds that this conduct warrants sanctions under Rule 11."

Blue Spike, LLC v. Caterpillar Inc. et al, 6-16-cv-01361 (TXED May 10, 2017, Order) (Love, MJ)

Thursday, May 11, 2017

Patentee's Infringement Claim Against Customers Creates Substantial Controversy With Manufacturer​

The court denied defendant's motion to dismiss plaintiffs' declaratory relief action and rejected defendant's argument that its lawsuit against plaintiffs' customer was insufficient to create an actual controversy with plaintiffs. "[Defendant's] litigation against [plaintiffs' customer] was an affirmative act by [defendant] to enforce its patent rights against alleged infringement by [plaintiffs'] Tree. . . . Its claim charts referred only to [plaintiffs'] trees and explained how [defendant] believed [plaintiffs'] trees met each and every claim of [defendant's] patents. . . . [Defendant] argues that a lawsuit against a manufacturer’s customer is not sufficient for Article III standing. . . . As [defendant] admits, its claims against [the customer] were based solely on its selling [plaintiffs'] Trees, something [a plaintiff] itself did. Unlike [other cases cited by defendant], [defendant's] infringement claims against [the customer], based on its sales of [plaintiffs'] trees, necessarily demonstrate a case or controversy with [plaintiffs]."

UCP International Co., Ltd. et al v. Balsam Brands Inc. et al, 3-16-cv-07255 (CAND May 9, 2017, Order) (Orrick, USDJ)

Wednesday, May 10, 2017

Recent Jury Verdict Subject to Post-Trial Motions and Appeal Not a Reliable Data Point for Damages Expert Opinion

The court denied plaintiff's motion to supplement its damages expert's report to address a recent $9.1 million jury verdict against a consolidated defendant because that judgment was not yet final and a reliable data point. "[T]o date, the Court has yet to enter final judgment in the [consolidated] case. [Plaintiff] and [the consolidated] are currently participating in post-trial motion practice in accordance with the Court’s Order setting the post-trial briefing schedule. . . . [U]ntil a final judgment exists and motions under Rules 50(b) and 59 have been considered, the jury’s verdict is not fixed and remains subject to multiple avenues of attack. It further goes (almost without saying) that after this lengthy process results in a final judgment entered by this Court, the resulting judgment is then subject to appeal. In short, the verdict in the [consolidated] case is a long way from being an established and reliable data point that could properly be urged by [plaintiff] in its upcoming trial against [these defendants]."

Saint Lawrence Communications, LLC v. ZTE Corporation et al, 2-15-cv-00349 (TXED May 8, 2017, Order) (Gilstrap, USDJ)

Tuesday, May 9, 2017

Defendant May Not Rely on Component of Previously Disclosed Prior Art Reference as a Separate Invalidating Reference

​ The court granted plaintiff's motion to preclude defendant from presenting evidence that a component of a previously disclosed prior art reference invalidated the patent-in-suit because of the undue prejudice to plaintiff. "While [defendant] may argue that [previously disclosed reference] anticipates the patent-in-suit, it does not follow that [defendant] can argue that [the component] alone anticipates or renders obvious the patent-in-suit even though [the component] is a component of [the previously disclosed reference]. [Defendant] should have specifically disclosed in its invalidity contentions its intention to argue that [the component] alone anticipates or renders obvious the patent-in-suit. . . . There is substantial prejudice to Plaintiff from [defendant's] late disclosure because [plaintiff's] expert has not assessed [the component] as potentially invalidating art and [plaintiff] is prevented fact discovery or deposing [defendant's] expert on this issue."

EI du Pont de Nemours and Company v. Unifrax I LLC, 1-14-cv-01250 (DED May 5, 2017, Order) (Andrews, USDJ)

Monday, May 8, 2017

Patent for Efficiently Monitoring and Transmitting Patient Data Not Invalid Under 35 U.S.C. § 101​

The court denied defendant's motion for judgment on the pleadings that plaintiffs’ patent for efficiently monitoring and transmitting patient data encompassed unpatentable subject matter because the asserted claims did not lack an inventive concept. "Claim 9 does not introduce the concept of remote patient monitoring, but it purports to improve upon prior art in the mobile cardiac elemetry field by taking advantage of 'a communications device which selectively establishes a communications link between the remote monitoring unit and the central unit.' In so doing, Claim 9 purports to 'adopt[] a new data transfer architecture with improved selectivity of data transmission but retention of the data accumulation capability to build the patient history and also the emergency capability to assist the patient on an urgent basis when needed.' . . . Claim 9 purports to improve upon the previous technology, which did not allow for selectivity in determining the data set that would be transmitted to the central unit. . . . [T]he patent is 'more than a drafting effort to monopolize the [abstract idea].' Therefore, when read as an ordered combination, the court cannot determine as a matter of law that Claim 9 lacks an inventive concept."

CardioNet, LLC et al v. InfoBionic, Inc., 1-15-cv-11803 (MAD May 4, 2017, Order) (Talwani, USDJ)

Friday, May 5, 2017

3D Camera Exposure Patent Invalid Under 35 U.S.C. § 101​

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s 3D camera exposure patent encompassed unpatentable subject matter. "A patent claim that recites a solution to a problem but not the means of achieving it is not drawn to patent-eligible subject matter. It is drawn to an abstraction. . . . Claim 1 of the [patent] is this kind of claim. The claim's preamble recites the technological context of the invention and its end goal; the first element restates the technological context; and the second element restates the end goal. The method of optimizing exposure on a structured-light 3D camera – the how that's nominally the subject of the claimed invention – is absent. . . . Describing the function of the prior-art cameras situates the claimed invention in the technological environment in which it operates, but it doesn't explain the invention itself. . . . By all appearances . . . the only effect of the word 'using' is to disclose the starting point of a method the claim doesn't explain: 'Using' two images, you get an optimal exposure. 'Using' certain inputs, you get a certain result. This is not enough to make claim 1 concrete. A claim cannot recite inputs and end result, then claim everything in between."

SungKyunKwan University, Research and Business Foundation v. LMI Technologies USA Inc., 3-16-cv-06966 (CAND May 3, 2017, Order) (Chhabria, USDJ)

Thursday, May 4, 2017

No Exclusion of Expert’s Infringement Theory Plausibly Supported by Vague Infringement Contentions

The court denied defendant's motion to strike portions of the report of plaintiff's technical expert that contained previously undisclosed infringement theories. "[Plaintiff] has pointed to words, sentences, and figures in its contentions that support [its expert's] theories. Although in context, [plaintiff's] contentions may have led [defendant] to assume that [plaintiff] was identifying a particular aspect of the [accused] product, [defendant] did not seek assurances that this was actually the case. . . . It was incumbent on [defendant] to seek clarification, through written discovery, the meet and confer process, or motion practice, on any infringement contention that was slightly vague or unclear, particularly as the case progressed. Plaintiff has raised plausible arguments that its contentions support [the expert's] infringement opinions. . . . The fact that [defendant] had a full opportunity to respond to [the expert's] theories, both through expert report and deposition, also weighs against exclusion of his opinions."

Realtime Data LLC d/b/a IXO v. Actian Corporation et al, 6-15-cv-00463 (TXED April 17, 2017, Order) (Love, MJ)

Wednesday, May 3, 2017

Expert Testimony Concerning Litigation Funding Agreement Excluded as Irrelevant to Hypothetical Negotiation

​ The court granted plaintiff's motion to exclude the testimony of defendant's damages expert regarding litigation funding agreements as irrelevant to the hypothetical negotiation analysis. "These agreements are not patent licensing agreements and are not otherwise relevant to the hypothetical negotiation between the parties. The best that can be said about litigation funding agreements is that they are informed gambling on the outcome of litigation. They are so far removed from the hypothetical negotiation that they have no relevance. I further note that if they were determined to have some marginal relevance, that I would exclude them under Rule 403 as their probative value is more than substantially outweighed by the danger of unfair prejudice to [plaintiff] and of confusing the issues, as their introduction would just invite a sideshow on the economics of patent litigation."

AVM Technologies LLC v. Intel Corporation, 1-15-cv-00033 (DED May 1, 2017, Order) (Andrews, USDJ)

Tuesday, May 2, 2017

Domestically Controlled Foreign Breeding Activities Do Not Infringe Plant Patent​

The court granted defendant's motion for summary judgment of noninfringement of plaintiff's strawberry plant patents as to defendant’s breeding activities conducted in Spain. "[Defendant] imports into the United States the seeds developed from the breeding activities in Spain. [Defendant] germinates and grows these seeds alongside [plaintiff]-patented plants . . . 'as a point of comparison,' to evaluate the performance of the seedlings it is developing. . . . [Plaintiff] argues that the 'situs of infringement' is actually domestic because control over the breeding activities was exercised in the United States and [defendant] receives the benefit of its infringing use here. But the control-and-benefit test on which [plaintiff] relies applies to system patents. . . . [Plaintiff] has provided no justification or case law to support the application of [the control-and-benefit test discussed in NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1316-17 (Fed. Cir. 2005)] to the plant patents at issue in this case. The more logical 'situs of infringement' is Spain, the location 'where the offending act is committed.'"

The Regents of the University of California v. California Berry Cultivars, LLC, et al, 3-16-cv-02477 (CAND April 27, 2017, Order) (Chhabria, USDJ)

Monday, May 1, 2017

IPR Request and Post-Institution Fees Not Recoverable as Costs in Related District Court Case​

Following inter partes review that invalidated plaintiff's patent, the court denied defendant's motion to tax $23,000 in IPR request and post-institution fees as costs. "Defendant has raised an issue of first impression in this Court. But courts from two other circuits have considered this issue and declined to tax fees paid for the PTAB review . . . . [Defendant] urges the Court to adopt a broad reading of 'the Clerk' . . . because litigation 'shifts to that venue' and the IPR is a 'substitute for the district court proceeding.' The Court disagrees that the litigation 'shifted' to PTAB; PTAB merely determined the validity of [plaintiff's] patent, and this Court remained the adjudicator of the infringement suit. . . . PPG Indus., Inc. v. Celanese Polymer Specialties Co., 840 F.2d 1565, 1569 (Fed. Cir. 1988) is inapposite because the court was speaking only to the awarding of attorney fees [under] 35 U.S.C. § 285 . . . . That does not solve the problem that no statute authorizes a court to tax filing fees paid to the PTO. [Defendant] argues that it would be absurd if 'attorney fees within a substitute forum may be available, but the costs of transferring to that (more efficient) substitute forum are unreachable.' But the purported absurdity would hold for all the other deniable costs under 28 USC § 1920, and [defendant] has not made a case for why the IPR filing fee should be given special consideration."

Hockeyline, Inc. v. STATS LLC, 1-13-cv-01446 (NYSD April 27, 2017, Order) (McMahon, USDJ)

Friday, April 28, 2017

No Modification of Injunction Against Direct Competitor to Allow Infringing Sales for Orders Placed Before Trial

​ The court denied defendant's motion to modify a permanent judgment to allow it to fulfill orders of infringing products that were placed long before trial. "[T]he evidence at trial indicated that [the parties] are the only two suppliers of two-wire APS systems. The Court thus finds that modifying the injunction will cause [plaintiff] irreparable harm. . . . [T]he Court cannot help but observe that the Court’s permanent injunction did not arrive suddenly or without warning, thus diminishing the persuasiveness of [defendant's] public-interest argument. [The Court] found that the [accused] device was infringing and granted partial summary judgment nearly three years ago, the jury verdict rejecting [defendant's] invalidity and unenforceability defenses was handed down almost ten months ago, and [plaintiff] moved for a permanent injunction over seven months ago."

Polara Engineering, Inc. v. Campbell Company, 8-13-cv-00007 (CACD April 26, 2017, Order) (McCormick, MJ)

Thursday, April 27, 2017

Gaps in Expert’s Market Analysis Warrant Summary Judgment on Plaintiff’s Lost Profits Claim

The court granted defendants' motion for summary judgment that plaintiff was not entitled to lost profits damages because plaintiff failed to provide an adequate market share analysis. "Defendants first argue that [plaintiff] did not undertake a meaningful market analysis that would support a lost profits calculation. The Court agrees. . . . There are multiple layers of guesswork in [plaintiff's expert's] analysis. . . . [The expert] makes no effort to account for other competitors, but claims [plaintiff] would have made all of [defendant's] accused sales for the six identified products. . . . Also, to claim lost profits from the customer defendants, [plaintiff] needed to analyze other competitor products in the overall KVM switch market in the United States (not just the OEM market). An accounting needs to be made for these gaps in 'but for' causation."

ATEN International Co., Ltd. v. Uniclass Technology Co., Ltd. et al, 2-15-cv-04424 (CACD April 24, 2017, Order) (Guilford, USDJ)

Wednesday, April 26, 2017

Meritless Claim for Declaration of ANDA Infringement by Possible Future Drug Formulation Justifies Award of Attorney Fees under 35 U.S.C. § 285​

The court granted defendants' motion for attorney fees under 35 U.S.C. § 285 because plaintiffs' infringement claim against defendant's operative ANDA and plaintiff's claim for a declaration of infringement by possible future products were baseless. "While Plaintiffs repeatedly argued that it only alleged current patent infringement to trigger Hatch-Waxman review of 'the product that Defendant . . . will likely market if its ANDA receives final FDA approval,' the Court found that [plaintiff's] legal theory was completely unsupported by case law and ignored the existing legal safeguards against Defendants’ potential future infringing conduct. . . . [Plaintiffs] failed to allege that Defendants were engaged in any specific activities to alter their drug formulation to infringe the patents-in-suit and even acknowledged in briefing that the focus of the case was to determine through discovery how [plaintiffs] intended to proceed through the FDA approval process. Ultimately, the absence of credible allegations or evidence that [plaintiffs] would face immediate, irreparable harm absent declaratory relief, caused the Court to conclude the declaratory judgment counts were 'not ripe for adjudication.'"

Par Pharmaceutical, Inc. et al v. Luitpold Pharmaceuticals, Inc. et al, 2-16-cv-02290 (NJD April 24, 2017, Order) (Walls, USDJ)

Tuesday, April 25, 2017

Proportionality of Electronic Document Request is Best Achieved With Search Terms, Not Designated Custodians​

The court granted defendants' motion to compel the production of emails "from seventeen named inventors of the fourteen asserted patents and licensing executives involved in the parties’ FRAND negotiations" and rejected plaintiff's argument that the requests were not proportional and should be limited to certain document custodians. "As other courts have explained in complex cases such as this, [plaintiff's] proposed limitations on e-discovery or the number of email custodians is not typically warranted. The emails from the inventors and licensing executives appear to at least meet the 'reasonably calculated' standard articulated in Rule 26(b)(1). [Plaintiff's] proportionality argument is not persuasive because [defendant] provides adequate limitations on the discovery by requiring particular search terms."

Huawei Technologies Co. Ltd v. T-Mobile US, Inc. et al, 2-16-cv-00052 (TXED April 21, 2017, Order) (Payne, MJ)

Monday, April 24, 2017

Human Tissue Remodeling Patent Claiming “Application and Synthetization of Natural Law Into a Concrete Process” Not Invalid Under 35 U.S.C. § 101​

The court denied defendant's motion to dismiss on the ground that plaintiff’s human tissue remodeling patent encompassed unpatentable subject matter because the asserted claims were not directed toward a natural law or phenomenon. "Defendants first argue that claim 51 is directed to unpatentable subject matter because it is covers a law of nature: namely, 'the natural phenomenon that heat denatures collagen and causes remodeling – i.e., tightening, or any change in the structure – of the heated tissue.'. . . [H]ere the Court is presented with a method patent comprising concrete steps, premised upon a discovery of natural law rendering the relevant subject matter amenable to certain processes. . . . The [patent-in-suit] stands in stark contrast to those patents which the Federal Circuit has invalidated as directed to a natural law or natural phenomenon. In those cases, the patents typically encompass the pure observation or identification of the natural law at issue. . . . In this case, however . . . [the patent] claims the application and synthetization of a natural law into a concrete process, which builds upon the subject matter’s capability of undergoing the process."

Viveve, Inc. v. ThermiGen, LLC et al, 2-16-cv-01189 (TXED April 20, 2017, Order) (Gilstrap, USDJ)

Friday, April 21, 2017

Top Law Firms by Number of Accusations in 2016

What is a Patent Accusation?

A Patent Accusation is a more granular way to measure the volume of litigation activity than counting the number of cases or litigants. As used in this report, the term means a request for relief in a U.S. district court, the ITC or the PTAB (AIA proceedings), the resolution of which could determine if a patent has been infringed or the patent’s validity or enforceability.
For example, a civil case with one plaintiff asserting one patent against one defendant would involve one patent accusation, whereas a case with one plaintiff asserting 5 patents against 10 defendants would result in 50 infringement accusation. Multiple claims involving the same parties and patents (e.g., a claim of infringement and a declaratory judgment counterclaim of invalidity or unenforceability) are counted as a single accusation. In a PTAB proceeding, each challenge to the patentability of a patent would create one patent accusation.


Sale of Software and Separate Plug-In Capable of Infringing When Combined Does Not Constitute Direct Infringement​

The court granted defendant's motion for summary judgment that it did not directly infringe plaintiff's dynamic web page generation patent. "[Plaintiff] contends that [defendant] infringed the asserted claims by storing (separately and in different locations) [its] Server software and ARR plug-in on its severs and by selling [the] Server software to customers while also making its optional ARR plug-in available for download. That infringement theory is problematic in light of the Supreme Court's decision in Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 526-29 (1972). . . . The Court . . . explained that a patent 'does not cover the manufacture or sale of separate elements capable of being, but never actually, associated to form the invention.' But contrary to the decision in Deepsouth, [plaintiff] argues that [defendant] directly infringed the asserted claims even though, under this theory, [defendant] did not assemble the software components into the accused product."

Parallel Networks Licensing LLC v. Microsoft Corporation, 1-13-cv-02073 (DED April 10, 2017, Order) (Jordan, CJ)

Thursday, April 20, 2017

Until Shaw is Limited or Reconsidered, IPR Estoppel Does Not Apply to Non-Instituted Invalidity Grounds Asserted in Petition​

Following inter partes review of the patent-in-suit, the court denied plaintiff's motion to preclude defendant from contesting validity under 35 U.S.C. § 315(e) with respect to invalidity grounds that were asserted in the IPR petition but not instituted. "[Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir.), cert. denied, 137 S. Ct. 374 (2016)] makes the Federal Circuit’s view of whether § 315(e) estoppel applies to non-instituted grounds crystal clear. So until Shaw is limited or reconsidered, this court will not apply § 315(e)(2) estoppel to non-instituted grounds. . . . For the record, this court is not persuaded by Shaw’s interpretation of the term 'during' in § 315(e). Shaw does not adequately consider the history and purpose of the statutory language, and it does not satisfactorily reconcile the narrow interpretation of 'during' with the broader language 'reasonably could have raised.' What are the grounds that the petitioner 'reasonably could have raised' if the petitioner is limited to raising them after review is instituted, when the opportunity to assert new grounds is exceedingly limited? The more reasonable interpretation is that 'during that inter partes review' includes not only the instituted review itself but also the petition process."

Douglas Dynamics, LLC v. Meyer Products LLC, 3-14-cv-00886 (WIWD April 18, 2017, Order) (Peterson, USDJ)

Wednesday, April 19, 2017

Discovery Concerning Plaintiff’s Investor Funding, R&D Costs, and IPO Valuation Not Proportional to Needs of Case​

The court denied without prejudice defendant's motion to compel further interrogatory responses regarding investor funding, initial public offerings, and research and development costs because the discovery was not proportional to the needs of the case. "While it is conceivable that the documents sought by each of these production requests could contain information relevant to one or more issues in this case, the record does not presently show that they are likely to do so. At the same time, the production sought by each production request is extensive, the burden on [plaintiff] of making the production significant, and the intrusion into [plaintiff's] operations entailed by the production substantial."

Valencell, Inc. v. Apple Inc., 5-16-cv-00001 (NCED April 17, 2017, Order) (Gates, MJ)

Tuesday, April 18, 2017

Claim Construction Appropriate at Pleading Stage Where Patent Provides Explicit Definition​

The court denied defendant's motion to dismiss plaintiff's direct patent infringement claim on the ground that plaintiff's claim was based on an implausible interpretation of its patent, but rejected plaintiff's argument that claim construction of its DNA microarray patent was premature. "[T]he Court concludes that it may properly construe a claim term at the pleading stage in certain circumstances. The purpose of a 12(b)(6) motion is, after all, to determine whether a plaintiff states a legally cognizable claim for relief. . . . Defendant’s argument is premised on what is perhaps one of the most appropriate exercises of claim construction at the pleading stage: a claim of lexicography; that is, that the [patent] itself allegedly provides an explicit definition of parameter 'a.'. . . The Court finds that there is merit to both parties’ arguments and thus the Court cannot say at this stage that Defendant’s construction is correct as a matter of law."

The Scripps Research Institute v. Illumina, Inc., 3-16-cv-00661 (CASD April 14, 2017, Order) (Sammartino, USDJ)

Monday, April 17, 2017

Challenge to Printed Publication Status of Prior Art Reference Does Not Justify Late Disclosure of New Reference​

The court granted plaintiff's motion to strike a previously undisclosed prior art publication from defendant's invalidity contentions and rejected defendant's argument that the reference was necessary to address plaintiff's challenge to another reference. "[W]hile it is true that the printed publication argument was raised only in response to [defendant's] motion for summary judgment of anticipation, [defendant] should not have been caught entirely unawares by [plaintiff's] printed publication defense to [defendant's] reliance on the [originally disclosed] reference as anticipating prior art. Given the obscurity of the [original] reference, it is not surprising that [plaintiff] would raise an issue as to whether the [original] publication was sufficiently in the public domain to qualify as prior art. . . . Nothing prevented [defendant] from citing both [the original] and the [new] reference in its original invalidity contentions. . . . [I]t would be highly prejudicial to [plaintiff] for [defendant] to be allowed to use the [new] reference after having raised it for the first time only a few weeks before trial and after the close of discovery."

Erfindergemeinschaft UroPep GbR v. Eli Lilly and Company et al, 2-15-cv-01202 (TXED April 13, 2017, Order) (Bryson, CJ)

Friday, April 14, 2017

Defendant’s Multiplication of Proceedings No Basis for Reducing Attorney Fees Award for Plaintiff’s Exceptionally Weak Claims

​ The court granted in part defendant's requested attorney fees under 35 U.S.C. § 285 and rejected plaintiffs' objection that the fees should be reduced on the ground that defendant unreasonably multiplied the proceedings. "In the Court’s [prior] Order, it found that [defendant] engaged in some activity that prolonged the litigation, including 'unreasonably' refusing to designate representative products. . . . Where a plaintiff’s case is exceptionally weak on the merits, as here, rather than because of litigation misconduct, this rule counsels full fee shifting from the time the case became exceptionally weak on the merits. The entire case from that point on is exceptional and the extra legal effort required to counteract the lawsuit includes the entirety of a vigorous defense. In the context of this case, [defendant] did not exceed that limitation."

Technology Properties Limited, LLC v. Canon, Inc. et al, 4-14-cv-03640 (CAND April 12, 2017, Order) (Wilken, USDJ)

Thursday, April 13, 2017

Production of Non-Public, Unaccused Products Not Proportional to the Needs of the Case​

The court denied plaintiff's motion to compel defendant to produce non-public unaccused products for testing because the discovery was disproportional to the needs of the case. "In light of the Court's determination that certain asserted claims are indefinite for reasons related to (among other things) the type of testing [plaintiff] seeks to perform, and for other reasons (including documents already produced to [plaintiff] and that the unaccused products are still in development and their design(s) could change in ways material to the patent claims), the Court finds that the requested production for testing is not proportional to the needs of the case."

American Axle & Manufacturing, Inc. v. Neapco Holdings LLC et al, 1-15-cv-01168 (DED April 11, 2017, Order) (Stark, USDJ)

Wednesday, April 12, 2017

Attorney Fees for Resisting Motion to Compel Not Recoverable

The court denied without prejudice a third party's motion to shift cost of discovery to plaintiff after the court granted plaintiff's motion to compel a third party to produce documents regarding five of its drug products. "[T]he Court has not at this time seen any evidence that enforcement of [plaintiff's] subpoena . . . would impose an undue burden or expense on [movant]. . . . The Court does not regard the attorneys’ fees incurred in resisting the motion to compel as recoverable costs of complying with the subpoena. [Movant] was not required to resist the motion to compel, and it has been unsuccessful in so doing. For those reasons, there is no sense in which the attorneys’ fees were necessary expenses incurred in responding to the subpoena. As to any other costs associated with [movant's] compliance efforts, the Court has no other evidence before it regarding the costs of compliance that were imposed on [movant]."

Allergan, Inc. v. Teva Pharmaceuticals USA, Inc. et al, 2-15-cv-01455 (TXED April 10, 2017, Order) (Bryson, CJ)

Tuesday, April 11, 2017

Demonstrating Device at Tradeshow May Constitute Infringing Use​

The court denied defendants' motion to dismiss plaintiff's direct patent infringement claims for failing to sufficiently allege that they used the accused product or that the infringement was de minimis. "[D]efendants appear to suggest that demonstration of an infringing device at a trade show cannot constitute 'use' for purposes of § 271 as a matter of law. . . . I likewise decline to hold that demonstration of an infringing device at a trade show can never constitute 'use' for purposes of § 271. . . . It can reasonably be inferred that in showing potential customers how the device operated, the defendants used the [accused device] to check the diameter of a part. . . . [T]he defendants' alleged infringement is not limited to their use of the [accused device] at [one trade show]. . . . Further, at this stage, I am unable to accept the defendants' contention that their alleged infringing conduct is unlikely to recur."

Marposs Societa Per Azioni et al v. Jenoptik Automotive North America, LLC et al, 1-16-cv-09041 (ILND April 7, 2017, Order) (Bucklo, USDJ)

Monday, April 10, 2017

Willful Infringement Claim Based Solely on Post-Filing Conduct Fails as a Matter of Law​

The court granted defendants' motion to dismiss plaintiff's willful infringement claim because it was based on post-filing conduct. "Although [Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016)] rejected the [In re Seagate Tech, LLC, 497 F.3d 1360 (Fed. Cir. 2007)] test of what constitutes a reckless state of mind to support an award of § 284 damages as too rigid, it did not discuss whether such damages are limited to the alleged infringer's pre-filing conduct, other than to state that culpability for willful infringement purposes is 'measured against the knowledge of the actor at the time of the challenged conduct.' The Federal Circuit in Seagate stated that 'in ordinary circumstances, willfulness will depend on an infringer's prelitigation conduct.' Other cases, post-Halo, have concluded that Seagate's conclusion with respect to the unavailability of a claim for willful infringement based upon post-filing conduct is still good law. Further, a court in this district has held that a claim for enhanced damages based on willful infringement 'must necessarily be grounded exclusively in the accused infringer's pre-filing conduct. . . when an accused infringer's post-filing conduct is reckless, a patentee can move for a preliminary injunction.' . . . Accordingly, the Court finds that Plaintiffs willful infringement claim, which is based solely on Defendants' post-filing conduct, fails as a matter of law."

Cooper Lighting, LLC v. Cordelia Lighting, Inc. et al, 1-16-cv-02669 (GAND April 6, 2017, Order) (Cohen, USDJ)

Friday, April 7, 2017

Invalidity Opinion Delivered After Product Launch No Defense to Willful Infringement​

Following a jury trial, the court granted plaintiff's motion for entry of judgment and found that defendant's patent infringement was willful because defendant's invalidity defenses were not relied upon at the time the accused products were introduced. "[T]he Court in [Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016)] has eliminated the ability of an accused infringer to posit reasonable invalidity defenses which were not relied upon at the time the accused products were introduced into the market. . . . '[C]ulpability is generally measured against the knowledge of the actor at the time of the challenged conduct.' There is no indication in the record that [defendant's expert] provided [defendant] his opinion on invalidity before the accused products went into production. . . . [T]here is no record evidence that [defendant] had knowledge of the invalidity defense derived from the combination of prior art and SAE standards at the time of the challenged conduct."

Omega Patents, LLC v. Calamp Corp., 6-13-cv-01950 (FLMD April 5, 2017, Order) (Byron, USDJ)

Thursday, April 6, 2017

Vehicle Camera System Patent Not Invalid Under 35 U.S.C. § 101 at Pleading Stage​

The special master recommended denying defendant's motion for judgment on the pleadings on the ground that plaintiff’s vehicle camera system patent encompassed unpatentable subject matter because defendant failed to establish that the asserted claims were directed toward an abstract idea. "[T]he claims specify a particular imaging array sensor configuration and a particular approach of using data acquired from the sensor. That approach includes a step that the patent argues to depart from a conventional data processing approach by the inclusion of a reduced image data set. Also, because the imaging array sensor is taught and claimed to be useful in a misaligned condition, applying reasonable inferences in favor of Plaintiff, it can be said that the sensor as well is used in an unconventional manner, instead of the more conventional aligned technique. In this manner, the patent purports to provide an improved and unconventional approach to addressing misalignment of the image array sensor and the resulting data."

Magna Electronics, Inc. v. Valeo, Inc. et al, 2-13-cv-11376 (MIED March 31, 2017, Order) (Dobrusin, Special Master)

Wednesday, April 5, 2017

$1 Billion Valuation of Inventor’s Non-Asserted Patents Excluded as Prejudicial​

The court granted in part defendants' motion in limine to exclude the value of non-asserted patents from plaintiff's inventor under Rule 403. "Defendants move to exclude Plaintiff from discussing the technology or value of non-asserted patents that list [the same inventor] as the named inventor and that Plaintiff purports were valued at over $1 billion. . . . Plaintiff may provide a limited discussion of these non-asserted patents and their general subject matter at trial when discussing [the inventor's] background. Nevertheless, the Court agrees with Defendants that a discussion of the value of these non-asserted patents would likely lead to unfair prejudice and jury confusion substantially outweighing the limited probative value of such evidence."

Carucel Investments, L.P. v. Novatel Wireless, Inc. et al, 3-16-cv-00118 (CASD April 3, 2017, Order) (Huff, USDJ)

Tuesday, April 4, 2017

Patent Assignment Agreement Providing Outcome-Based Compensation to Fact Witness Does Not Justify Award of Attorney Fees ​

Following claim construction and a stipulated judgment of noninfringement, the court denied defendants' motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation tactics were not exceptional. "Defendants rely on the compensation arrangement in the Agreement with [a third party], coupled with Plaintiff’s initial disclosures identifying certain principals from [the third party] as fact witnesses, to argue that Plaintiff has agreed to pay fact witnesses to testify and the payment is contingent on the outcome of the case. However, the Agreement involves assignment of the Patent, not an agreement to pay fact witnesses to testify, and the witnesses identified included the inventor. . . . [T]he Agreement provides for [the third party] to be compensated based on the outcome of a patent infringement lawsuit and requires cooperation from [the third party]. The Agreement’s compensation arrangement is not so out of the ordinary to make this case exceptional."

Rembrandt Gaming Technologies, LP v. Boyd Gaming Corporation, et al, 2-12-cv-00775 (NVD March 31, 2017, Order) (Du, USDJ)

Monday, April 3, 2017

Technical Expert Unqualified to Offer Opinion on Apportionment Value​

The court granted in part defendant's motion to exclude the testimony of plaintiff's technical expert regarding apportionment as unqualified. "An apportionment analysis is performed as part of a damages calculation. As such, there is an inherently economic quality to an apportionment analysis. . . . [Plaintiff's expert], with his Ph.D. in computer science and academic and industry experience in hardware and software design and development, is qualified to review the technical information in this case and opine regarding the importance of the various features of the accused products from a technical perspective. However, due to [his] limited experience with economic apportionment, he is not qualified to provide an ultimate opinion with respect to a damages value attributable to the patented invention. . . . [His] opinions . . . may be an input into the damages expert’s opinion about the proper apportionment value, but may not be the final apportionment value itself."

Realtime Data LLC d/b/a IXO v. Oracle America, Inc., 6-16-cv-00088 (TXED March 30, 2017, Order) (Love, MJ)

Friday, March 31, 2017

Defendant's and Counsel's Lack of Cooperation Justify Service on Foreign Entity by Alternate Means​

The court granted plaintiff's motion to serve its declaratory relief complaint by alternate means on a Japanese defendant following defendant and its counsel's lack of cooperation. "[Defendant's] contention that it is 'simply' standing on its 'right' to service under the Hague Convention is ill-taken. . . . [Counsel's email exchange] shows that [defense] counsel declined to accept service in an apparent fit of pique, and the record of events after that indicates that [defendant] has been unduly difficult to serve in a manner reflecting the uncooperative spirit manifested in [defendant's lead attorney's] words. . . . In our circuit, Rule 4(f)(3) allows for service 'by other means' so long as it is directed by the court and is not prohibited by international agreement. There is no hierarchy of procedures, as [defendant] suggests, that requires [plaintiff] to attempt service through the Hague Convention or other means before seeking an order under Rule 4(f)(3). . . . [Defendant] has been uncooperative at every turn in responding to [plaintiff's] attempts to serve the complaint. It has not shown that service under Rule 4(f)(3) would violate an international agreement, and the Hague Convention is certainly no bar. Consequently, [plaintiff's] motion for an order of service under Rule 4(f)(3) is granted. . . . In situations like this, service on a foreign corporation’s counsel in the United States is an effective and reasonable method, and is not prohibited by the Hague Convention."

Xilinx, Inc. v. Godo Kaisha IP Bridge 1, 3-17-cv-00509 (CAND March 29, 2017, Order) (Donato, USDJ)

Thursday, March 30, 2017

Narrowing Asserted Patent Claims Precludes Validity Determination as to Unasserted Claims​

The court granted in part plaintiff's motion to reconsider an earlier order granting defendant's motion for judgment on the pleadings that plaintiff's remote monitoring patents encompassed unpatentable subject matter and agreed with plaintiff that it lacked jurisdiction over the unasserted claims. "[N]arrowing patent litigation to asserted claims pursuant to local patent rules can appropriately limit the court’s reach over other unasserted claims in the patent, even if those claims were at issue when the plaintiff filed its original complaint. . . . [Defendant also] urges that disclosures under this court’s local patent rules are insufficient to limit the scope of an invalidity counterclaim. . . . The parties’ patent contentions do not control the reach of the court’s jurisdiction, but they do influence the determination of whether there is, before the court, a substantial controversy. . . . [Defendant] effectively argues that because the case was before the court on a Rule 12(c) motion, the court must limit its analysis to the pleadings and must therefore exercise jurisdiction over the entire counterclaim. But the court is not constrained by jurisdictional assertions; in fact, the court will always independently examine whether it has jurisdiction over a particular declaratory judgment counterclaim. . . . The court in this case concludes it is not appropriate to ignore the impact of the parties’ contentions, even though they occurred after the pleadings."

Joao Control & Monitoring Systems, LLC v. Telular Corporation, 1-14-cv-09852 (ILND March 28, 2017, Order) (Pallmeyer, USDJ)

Wednesday, March 29, 2017

Mobile Navigation System Patent Not Invalid Under 35 U.S.C. § 101​

The court denied defendant's motion for judgment on the pleadings on the ground that plaintiff’s mobile navigation system patent encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "Defendants argue that under step one, claim 15 is directed to an abstract idea because the claim is specifically directed to the idea of providing directions in a natural language. . . . Defendants argue that claim 15 is directed to an abstract idea because the claim is directed to a process that could be performed by a human with a pencil and paper. But a human with a pencil and paper cannot format route data into a natural language description that is generated on a server and then transferred to a local database. . . . [C]laim 15 is not directed to some abstract result or effect. Rather, claim 15 provides a specific technological means for remedying the specific problems with real-time mobile navigation systems that the [patent] sought to address: formatting the route data using a non-proprietary, natural language description."

InfoGation Corp. v. ZTE Corporation et al, 3-16-cv-01901 (CASD March 27, 2017, Order) (Huff, USDJ)

Tuesday, March 28, 2017

Plaintiff’s Inability to Obtain Manufacturing Process Information from Chinese Manufacturer Justifies Presumption of Infringement Under 35 U.S.C. § 295​

The court denied plaintiff's motion for summary judgment of infringement of a fungicide patent, but found that the burden to establish noninfringement should be shifted to defendant under 35 U.S.C. § 295. "[Plaintiff] contends that it made reasonable efforts to discover [defendant's Chinese manufacturer's] process for producing azoxystrobin technical, but that it has been thwarted by [defendant's] lack of full cooperation and its inability to get information from [the manufacturer]. . . . [Defendant] asserted that it had no written communications with [the manufacturer], because they corresponded only in person, via telephone, or via a chat program that did not save correspondence. . . . At his deposition . . . [the manufacturer's representative] affirmed that [the manufacturer] has production records with the ratios and quantities of materials used in the manufacturing process . . . but that no one associated with [defendant] informed him that [plaintiff] was asking for those documents, apart from sharing [a] July 28 letter about a month before his deposition. He did not produce any of these documents at his deposition, despite being aware that [plaintiff] had asked for them. . . . While [plaintiff] did not seek discovery directly from [the manufacturer] . . . it 'is extremely difficult, if not impossible . . . to compel the Manufacturer [in China] to produce any documents' . . . . Moreover, given [the manufacturer's] location in China, requesting voluntary facility inspections or observing the process firsthand are unlikely possibilities for discovering information."

Syngenta Crop Protection, LLC v. Willowood, LLC et al, 1-15-cv-00274 (NCMD March 24, 2017, Order) (Eagles, USDJ)

Monday, March 27, 2017

Interactive Toy Patents Invalid Under 35 U.S.C. § 101​

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s interactive toy patents encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "Here, the Patents-In-Suit involve toys that communicate or interact amongst one another, with humans, or with computers. The toys generate, receive, and analyze sounds. They transmit, receive, and respond to a signal. They generate acoustic signals, receive the acoustic signals, analyze the signal, and then perform a responsive function. At core, the patents attempt to state methods for toys to communicate by sending, receiving, and responding to signals. The claims do not state a means by which to communicate, but rather are directed at the abstract process of communication itself. . . . Plaintiff attempts to characterize the patents as 'tangible toys or devices' and therefore not abstract. . . . The mere inclusion of tangible elements in an otherwise abstract idea does not render the subject matter any less abstract."

Dialware Communications, LLC v. Hasbro, Inc., 2-16-cv-09012 (CACD March 22, 2017, Order) (Real, USDJ)

Friday, March 24, 2017

SCA Hygiene Products Bars Laches Defense During 6-Year Limitations Period​

Having previously observed that "the doctrine of laches likely bar[s] the plaintiff’s claims," the court denied defendant's motion for summary judgment on its laches defense in light of the Supreme Court's decision in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, No. 15-927 (U.S. Mar. 21, 2017). "That decision has now been rendered, the Court holding that '[l]aches cannot be interposed as a defense against damages where the infringement occurred within the period prescribed by [35 U.S.C.] § 286. Accordingly, it appearing proper, it is ordered [that] [defendant's] Motion for Summary Judgment Based on Laches is denied."

Artrip v. Ball Corporation et al, 1-14-cv-00014 (VAWD March 22, 2017, Order) (Jones, USDJ)

Thursday, March 23, 2017

Voting System Patent Invalid Under 35 U.S.C. § 101​

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s voting system patent lacked an inventive concept. "According to the complaint, the auto-verification voting system is made of generic computer components performing generic computer functions, including: inputting voting information, printing out a paper ballot, having the voter personally verify the vote, and inputting the verified vote into a 'tabulating' computer. There is nothing inventive or transformative about the functions claimed in the patent, as they encompass computer functions which are 'well-understood, routine, conventional activit[ies] previously known to the industry,' and thus, there is no transformative feature between the abstract ideas of voting and verification and the input of the given steps into a computer system."

Voter Verified, Inc. v. Election Systems & Software, LLC f/k/a Election Systems & Software, Inc., 1-16-cv-00267 (FLND March 21, 2017, Order) (Walker, USDJ)

Wednesday, March 22, 2017

eBay Listing Is Not eBay’s Offer to Sell​

The court granted defendant's motion for summary judgment that it did not directly infringe plaintiff's bee trap patent because defendant's online marketplace listing was not defendant's offer to sell within the meaning of 35 U.S.C. § 271(a). "[Defendant's] website contained descriptions of the allegedly infringing products and a price at which the items could be obtained. As [plaintiff] observes, [defendant] tells users that bidding on a product creates a contract that obligates the bidder to purchase the product. . . . [Defendant] explicitly identifies a 'seller,' rather than a 'supplier,' on each listing, and no evidence is in the record that users pay [defendant] rather than the seller. . . . [T]he context of an exchange on [defendant's online marketplace website] demonstrates that no reasonable consumer could conclude that by bidding on [a] listing, he was accepting an offer from [defendant] itself. [Defendant's] terms of service explicitly advise users that [defendant] is not making an offer through a listing, and . . . [defendant] lacks title and possession of the items listed."

Blazer d/b/a Carpenter Bee Solutions v. eBay Inc., 1-15-cv-01059 (ALND March 20, 2017, Order) (Bowdre, USDJ)

Tuesday, March 21, 2017

Expert’s Consideration of Pre-Issuance Value of Patented Invention Does Not Render Damages Opinion Unreliable​

The court denied defendant's motion in limine to exclude the testimony of plaintiff's damages expert for considering the pre-issuance value of the patented invention. "[T]here is no merit to [defendant's] argument that '[the expert's] opinion regarding the alleged value [of] the [patent’s] invention before it even issued is improper and should be excluded.' The economic data from the period before the issuance of the [patent] provided a sound basis from which to determine the value of the invention that was ultimately patented. . . . A patent does not have to be in existence in order to calculate the value that the invention would have, particularly if others are already practicing the invention in the market when the patent issues. . . . [Defendant] is correct that those earlier sales were not infringing sales, and therefore may not be included as contributing to the assessment of damages. But [the expert] committed no such error. . . . [He] began with the number in dispute and then accounted for several other variables, including deducting noninfringing profits, before ultimately deriving his estimated reasonable royalty rate. The initial number was an essential part of [his] model for calculating damages and is therefore a legitimate and relevant part of his damages analysis."

Erfindergemeinschaft UroPep GbR v. Eli Lilly and Company et al, 2-15-cv-01202 (TXED March 17, 2017, Order) (Bryson, CJ)

Monday, March 20, 2017

Market Participant's Subjective Beliefs Not Relevant to Lost Profits Claim​

The court granted a third party customer's motion to quash defendants' deposition subpoenas regarding plaintiff's lost profits claim because the discovery was not relevant. "Defendants argue that showing that [their customer] would not have purchased Plaintiff’s [product] even if the [accused product] was not on the market would defeat Plaintiff’s lost-profits claim to the extent that it is based on Defendants’ sales to [their customer] because it would demonstrate that Plaintiff would not have made the sales 'but for' the [accused product]. . . . Defendants contend that there is no need to look to [a] hypothetical marketplace when evidence about a what market participant would have done is available from the market participant itself -- in this case, [defendant's customer]. . . . The parties have not provided, nor has this Court’s independent research discovered any case law directly addressing the relevance of a market participant’s belief that if the infringing product had not been available, the market participant would have purchased no product rather than purchasing the patented product. . . . [T]he focus is not the subjective desires or retroactive beliefs of market participants, but rather the appropriate focus is the objective analysis of whether other acceptable noninfringing substitutes were available. . . . None of the factors for consideration under either the Panduit test or the two-supplier market test includes contemplation of subjective buying decisions by market participants, which is the information Defendants’ subpoena seeks to elicit."

Cutsforth, Inc. v. LEMM Liquidating Company, LLC et al, 0-12-cv-01200 (MND March 15, 2017, Order) (Brisbois, MJ)

Friday, March 17, 2017

Patent Expiring Prior to Issue Date Has No Enforceable Term​

The magistrate judge recommended granting defendants' motion to dismiss plaintiff's patent infringement claims for one patent-in-suit because the patent expired before it issued. "A patent’s term begins on the date of issuance and ends twenty years after the filing date of the earliest filed non-provisional application to which it claims priority. . . . [One patent-in-suit] expired on June 8, 2015 -- more than a month before it issued on July 28, 2015 -- and therefore it had no enforceable term. . . . If the statute were construed as [plaintiff] proposes, i.e., so that an expired-when-issued patent had some indefinite term extension past the ordinary twenty-year mark to be determined by the Court, then the public would have no notice as to when such patent term would end. Clearly, that cannot be the case."

Bartonfalls LLC v. Turner Broadcasting System, Inc., 2-16-cv-01130 (TXED March 15, 2017, Order) (Payne, MJ)

Implausible Infringement Allegations Subject to Dismissal at Pleading Stage​

The magistrate judge recommended granting defendants' motion to dismiss two of plaintiff's patent infringement claims for failure to state a claim. "Defendants argue that the no plausible construction of the claim term 'TV Channel' results in a uniform resource locator (‘URL’) meeting the TV Channel limitation as alleged. The Court agrees. . . . Having reviewed the parties’ arguments, the specification, and the portions of the prosecution history cited in the briefing, [plaintiff] has no plausible basis for alleging that the plain and ordinary meaning of ‘TV Channel’ (or ‘TV Channel’ properly construed) covers URLs, i.e., a unique address for a web page that makes content addressable on the Internet. The Supreme Court has opined that 'determining whether a complaint states a plausible claim is context-specific, requiring the reviewing court to draw on its experience and common sense.'. . . [T]his case falls squarely into the narrow slice of cases where based on the claims, specification, its experience, and common sense, the Court can readily conclude that plaintiff’s infringement allegations are implausible on their face."

Bartonfalls LLC v. Turner Broadcasting System, Inc., 2-16-cv-01130 (TXED March 15, 2017, Order) (Payne, MJ)

Thursday, March 16, 2017

Computer Virus Protection Patent Not Invalid Under 35 U.S.C. § 101​

Following a jury trial, the court denied defendant's motion for partial judgment that plaintiff’s malware monitoring patent encompassed unpatentable subject matter because the asserted claims did not lack an inventive concept. "[T]he claims recite an inventive concept when taken as an ordered combination and considered in context. The [patent] notes that, prior to its invention, malware protection programs were only able to detect and protect against known viruses and were installed on particular user computers. The [patent] details a new kind of virus protection: one that is located on a network computer, rather than the end-user computer, and which is able to detect unknown viruses by identifying suspicious components in unique and novel code. The [patent] therefore includes a 'non-conventional and non-generic arrangement of known, conventional pieces' such that, when taken as an ordered combination, it recites an inventive concept."

Finjan, Inc. v. Sophos, Inc., 3-14-cv-01197 (CAND March 14, 2017, Order) (Orrick, USDJ)

Wednesday, March 15, 2017

Plaintiff Precluded From Referencing "Presumption of Validity" at Trial​

The court granted defendant's motion in limine to preclude plaintiff from referring to the presumption of validity as unduly prejudicial. "[Defendant] contends that the phrase 'presumption of validity' is potentially confusing to the jury and should not be used at trial. . . . What is clear from the case law . . . is that prohibiting the use of that phrase is not error. . . . In the Court’s judgment, the use of the phrase 'presumption of validity' would add little to the jury’s understanding of the burden of proof on the validity issues. Moreover, the phrase might be confusing to the jury, to the extent that the jury is required to consider both that phrase and the Court’s instructions on the burden of proof. At minimum, the use of the term 'presumption' would require a further definitional instruction by the Court, without leading to any greater insight on the jury’s part as to the nature of the burden of proof on the validity issues. Accordingly, the Court will exclude the use of the phrase 'presumption of validity' and instead will address the burden of proof in its instructions to the jury."

Erfindergemeinschaft UroPep GbR v. Eli Lilly and Company et al, 2-15-cv-01202 (TXED March 13, 2017, Order) (Bryson, CJ)

Tuesday, March 14, 2017

Patent for Providing and Using Feedback Based on Data Gathered From Subjects Invalid Under 35 U.S.C. § 101​

The court granted defendant's motion for judgment on the pleadings because the asserted claims of plaintiff’s patent for providing and using feedback based on data gathered from subjects encompassed unpatentable subject matter and found that the claims were directed to an abstract idea. "[T]he Asserted Claims recite the abstract idea of providing and using feedback based on data gathered from subjects. . . . [H]umans have received and assessed information and thereafter provided feedback to one or more people from time immemorial. The aggregation of information and the use of information to provide advice to people is a practice that has long existed. . . . Information gathering from particular sources through the use of sensors, absent uniqueness of a sensor, does not change the nature of the information gathering. . . . [T]he [patent] does not disclose any unique sensor or require any special hardware or programming. . . . [T]he Asserted Claims are directed to the abstract idea of providing and using feedback based upon data gathered from subjects. Controlling precedent establishes that the idea of collecting and analyzing information or data, even when particularly limited, is an abstract idea under Section 101."

Icon Health & Fitness v. Polar Electro Oy, 1-11-cv-00167 (UTD March 10, 2017, Order) (Jenkins, SJ)

Monday, March 13, 2017

Patent for Extracting and Embedding Digital Images Within a Video Not Invalid Under 35 U.S.C. § 101​

The court denied defendant's motion to dismiss on the ground that plaintiff’s patent for extracting and embedding digital images within a video encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "Users of the [accused] product are . . . able to select a portion of . . . captured images along with a portion of [an] original video data stream. The product’s digital processing unit then uses its memory and processing components to 'spatially match[] the second image (from the user input video data stream) to the first image (from the original video stream).' This process substitutes the first image with the second image—i.e., the 'user-selected "Best Face."' . . . [Plaintiff] alleges that the above violates [the patent-in-suit]. . . . [Defendant] seeks to oversimplify the [patent] in arguing that the 'Best Face' invention uses a generic computer function to perform an action that could be performed by a human by cutting-and-pasting. The Court declines to equate the 'Best Face' technology with 'arts and craft classes' or making collages. . . . [T]he [patent] describes more than just a 'generic computer performing a generic function.' To grant [defendant's] Motion to Dismiss on the basis of patent-ineligibility would run contrary to the warnings in [Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)] and [Mayo Collaborative Servs. v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012)] that courts not construe the categories of patent ineligible subject matter too broadly."

Prisua Engineering Corp. v. Samsung Electronics Co., Ltd. et al, 1-16-cv-21761 (FLSD March 9, 2017, Order) (Moore, USDJ)

Friday, March 10, 2017

974 Patent Claims Invalid Under 35 U.S.C. § 101 Based on Analysis of 10 Representative Claims

The court granted defendants' motion to dismiss because the asserted claims of plaintiff’s ten financial product patents encompassed unpatentable subject matter and rejected plaintiff's argument that it was improper to invalidate all 974 claims based on ten representative claims. "[Plaintiff] argues that Defendants’ mere mention of ten claims is not clear and convincing evidence that all of the claims in all of the asserted patents (totaling 974 claims) are directed to ineligible subject matter. . . . On balance, the Court finds Defendants’ use of ten representative claims that summarize claimed features from all asserted claims is permissible and reasonable under the circumstances. . . . Defendants’ selection of representative claims and their diligence in explaining how those representative claims address features covered by all asserted claims [is] not only reasonable, but necessary, considering how the Court would be unduly burdened if it had to entertain 'rigorous analysis of every single claim [out of potentially 974 total claims], and of each limitation individually and as an ordered combination' as [plaintiff] suggests."

Phoenix Licensing, LLC et al v. Consumer Cellular, Inc., 2-16-cv-00152 (TXED March 8, 2017, Order) (Payne, MJ)

Thursday, March 9, 2017

Disclosure of Confidential Information to Competitor’s Product Designer Precluded​

The court granted an intervenor's motion to preclude disclosure of the intervenor's confidential technical information to plaintiff's expert because the expert designed products for intervenor's competitor. "While the Court recognizes and appreciates the difficultly for Plaintiff in obtaining qualified experts, the risk of inadvertent disclosure that arises from [the expert's] ongoing design work for a competitor company outweighs that difficultly. Moreover, the difficulties here are alleviated by the fact that Plaintiff has another technical expert. . . . [Plaintiff's expert] is free to review [a defendant’s] confidential materials as there is no dispute over [his] review of those materials. The only exception of course is those documents produced by [the defendant] that contain [intervenor's] confidential information. In addition, the Court is willing to accommodate the special circumstances in providing testimony from the experts at trial."

Iridescent Networks, Inc. v. AT&T Inc. et al, 6-16-cv-01003 (TXED March 7, 2017, Order) (Love, MJ)