Preliminary Injunction Denied, But Two-Day TRO Granted Precluding Launch of Generic Estrogen Patch

The court denied plaintiff's motion for a preliminary injunction but granted plaintiff's motion for a TRO precluding the launch of defendants' generic transdermal estrogen product. "Plaintiffs' motion is denied to the extent it seeks a PI, and granted to the limited extent that [defendant] is temporarily restrained from launching its Generic Product [for two days]. At that point this limited TRO will automatically expire unless additional relief, such as a stay pending appeal, is granted either by this Court or the Court of Appeals, relief this Court will only consider if [plaintiff] files a notice of appeal and an expedited motion for a stay no later than [tomorrow]."

Noven Pharmaceuticals, Inc. v. Mylan Technologies Inc. et al, 1-17-cv-01777 (DED August 20, 2018, Order) (Stark, USDJ)

Request for Attorney Fees of $1.3 Million Reduced to $100 Thousand Due to Heavily Redacted Billing Records

The court awarded defendant only $100,000 of its claimed $1.3 million in attorney fees under 35 U.S.C. § 285 because defendant failed to present sufficient evidence to support its fee claim. "No explanation is included as to nature of the tasks performed that [defendant] categorizes as exclusive to the defense of [one patent-in-suit], to which [defendant's] recovery is limited. The over 400 pages of invoices provided have been completely redacted of all narrative description of the work performed. . . . The Court is highly skeptical that the descriptive narratives of every single time entry by every single timekeeper in this case constituted an attorney-client privileged communication or work product. . . . The Court declines [defendant's] offer to provide the Court with the 400 plus pages of billing records unredacted in camera so the Court can review the individual entries and determine from the hundreds of pages the reasonableness of the work performed. . . . Measured by the pleadings and motions filed attributable to the [patent-at-issue], the Court, in its discretion, awards [defendant] $100,000.00."

IPS Group, Inc. v. Duncan Solutions, Inc., 3-15-cv-01526 (CASD August 17, 2018, Order) (Bencivengo, USDJ)

Prevailing Party’s Previously-Sanctioned Misconduct Weighs Heavily Against Award of Attorney Fees

Following remand, the court denied plaintiff's motion to reinstate its award of attorney fees under 35 U.S.C. § 285 because of plaintiff's own misconduct in seeking a TRO. "The Federal Circuit concluded not only that '⁠[plaintiff's] misconduct cannot be disregarded on the theory that failure to award fees is equivalent to double-sanctioning [plaintiff],' but also 'that [because] this misconduct has already been sanctioned[, it] should be weighed more heavily, rather than be excluded in the 35 U.S.C. § 285 analysis.' Defendants urge that '⁠[l]itigants who sanctionably lie do not deserve a fee award.' The Court sanctioned [plaintiff] for submitting [a] deceitful declaration in support of the TRO, 'without a colorable basis' and 'in bad faith, i.e., motivated by improper purposes such as harassment and delay.' Weighing this litigation misconduct more heavily, considering the Court's findings that [defendant's] noninfringement argument was not groundless and that its litigation strategy was reasonable, the Court finds that [defendant's] conduct did not warrant fee shifting as an exceptional case under either the Patent or Lanham Acts."

Romag Fasteners, Inc. v. Fossil, Inc., et al, 3-10-cv-01827 (CTD August 16, 2018, Order) (Arterton, USDJ)

Employee’s Home Office Qualifies as Regular and Established Place of Business

The court denied one defendant's motion to dismiss for improper venue because defendant had a regular and established place of business through an employee's home office in the forum. "⁠[One defendant's] New York employee's home office is not merely a 'sporadic' or isolated work environment. . . . [S]ales representatives 'contact[] a prospective customer at a potential customer's office' and 'take initial sales orders.'. . . Although [defendant] does not require sales people to live in their assigned territory, [it] admits that it 'tries to hire people living within their assigned sales territory,' one of which is New York. Indeed, [defendant's] job postings reveal that it seeks out territory managers for specific locations. . . . And . . . sales agents must contact potential customers at their offices and conduct trainings when [defendant's] products arrive. All of these tasks necessitate proximity to customers."

RegenLab USA LLC v. Estar Technologies Ltd. et al, 1-16-cv-08771 (NYSD August 15, 2018, Order) (Carter, Jr., USDJ)

Unauthorized Amendment of Contentions Does Not Require Motion to Strike if the Issue is Clearly and Timely Raised by Letter

The court denied as moot defendant's motion to strike plaintiff's supplemental infringement contentions after plaintiff conceded the contentions should be withdrawn. "Except in response to the Court’s claim construction ruling, a plaintiff may only amend its infringement contentions with leave of Court, which requires a showing of good cause. [Plaintiff] never moved for such leave. . . . Thus, under the rules, [its] supplemental infringement contentions never had any operative effect, and [defendant's] motion was not technically necessary. . . . To be clear, however, accused infringers should not remain silent about 'amended' or 'supplemental' contentions served without a motion for leave and expect to avoid those contentions late in the proceeding. . . . But if the defendant has clearly and timely raised an issue with the plaintiff’s failure to seek leave -- as [defendant] did here by way of its [letter to plaintiff] -- the defendant need not then spend time moving to strike the 'amended' contentions."

Traxcell Technologies, LLC v. AT&T, Inc. et al, 2-17-cv-00718 (TXED August 14, 2018, Order) (Payne, MJ)

Plaintiff’s Controlling Shareholder Joined as Necessary Party for Potential Attorney Fees Liability

Following summary judgment, the court granted defendant's motion to join plaintiff's founder/inventor as a necessary party and pursue attorney fees against him under 35 U.S.C. § 285. "There is no evidence in the record that establishes that [plaintiff] currently has income or liquid assets. In fact, [the founder's] own declaration shows that [plaintiff] lacks sufficient financial resources. . . . Moreover, [defendant] provides evidence that [plaintiff] has not paid its fees and costs to its former counsel for over a year. . . . Given [the founder's] controlling shareholder power and his status as the only person from [plaintiff] who is involved in this litigation, the Court finds that [his] activities may potentially subject him to liability for attorneys’ fees and that he should be joined in this action."

Phigenix, Inc. v. Genentech, Inc., 5-15-cv-01238 (CAND August 13, 2018, Order) (Freeman, USDJ)

Jury Finding of Willful Infringement Does Not Satisfy Section 287 Notice Requirement

Following remand, the court granted defendant's motion for summary judgment to preclude plaintiff from seeking pre-suit damages and rejected plaintiff's argument that the jury's willful infringement finding satisfied plaintiff's obligation to establish actual notice. "⁠[Plaintiff] argues . . . that it meets it burden to show actual notice under Section 287 based on both the Court’s rulings and the jury’s findings of willful infringement. [Plaintiff] further points to evidence introduced at trial that [defendant] knew about the [patents-in-suit] and was aware internally about potential infringement. But the reading of the statute that [plaintiff] urges conflates the patentee-centered inquiry of notice under Section 287(a) with the infringer-centered inquiry of willfulness with regard to liability. . . . The jury’s finding of willfulness does not relieve [plaintiff] of its obligation to mark or notify -- neither of which [plaintiff] did prior to [filing suit]. "

Arctic Cat Inc. v. Bombardier Recreational Products Inc. et al, 0-14-cv-62369 (FLSD August 10, 2018, Order) (Bloom, USDJ)

Counsel’s Removal of Non-Disclosure Footer From Purported Prior Art Document Warrants Award of Monetary and Evidentiary Sanctions

The court imposed monetary sanctions against defense counsel for removing a non-disclosure footer from an exhibit in support of defendant's motion to dismiss on the ground that the accused device was publicly disclosed prior art. "I do not find that [counsel] intentionally doctored the Power Point presentation or intentionally proffered false or misleading evidence to the Court when he filed [defendant's] motion to dismiss. . . . However, I do find that his conduct was reckless . . . both as to the initial filing of the Power Point presentation from which the non-disclosure footer was removed, and as to his failure to undertake a serious investigation as to why the error occurred and to timely bring the matter to the Court’s attention. The gist of [defendant's] motion to dismiss was that the presentation to [an automotive group] was a public disclosure that invalidated Plaintiff’s claim as prior art. The basis of the motion would therefore be open to question in the light of evidence that the presentation was not public, but subject to confidentiality and non-disclosure. . . . [A] reasonable attorney who became aware that he or she had inadvertently filed an exhibit that had deleted this information would be horrified. . . . Instead, after being informed that he filed an exhibit that he should have known had relevant information removed, he dug in."

Webasto Thermo & Comfort North America, Inc. et al v. Bestop, Inc., 2-16-cv-13456 (MIED August 9, 2018, Order) (Whalen, MJ)

Knowledge of Potential Infringement During Prior Settlement Does Not Trigger Equitable Estoppel

Following jury and bench trials, the court found that equitable estoppel did not preclude plaintiff's claims for infringement of its footwear design patents because there was no misleading conduct following the parties' settlement of an earlier case. "⁠[Plaintiff] did not act in a misleading way when it contractually gave [defendant] the right to sell potentially infringing boots in the [prior] Settlement Agreement. . . . [Defendant] argued that [plaintiff] was aware of the [current accused] designs as early as [seven years ago]; even if that were true, [plaintiff] did not act in a misleading manner because [plaintiff] had no obligation to settle claims that exceeded the scope of the [prior] Litigation."

Deckers Outdoor Corporation v. Romeo and Juliette, Inc. et al, 2-15-cv-02812 (CACD August 8, 2018, Order) (Hatter, USDJ)

Instruction That Jury “Should” Consider Objective Indicia Not Erroneous

Following a jury verdict of invalidity, the court denied plaintiff's motion for a new trial because the jury instructions regarding obviousness were proper. "⁠[T]he Court instructed the jury that it 'should' consider objective indicia of nonobviousness in making its obviousness determinations. [Plaintiff] contends that the jury should have been instructed that it 'must' consider objective indicia of non-obviousness because such considerations are mandatory. . . . [Plaintiff's] argument . . . has more traction in the context of statutes and contracts: words written by lawyers, argued over by lawyers, and interpreted by lawyers. Here, however, in the context of jury instructions, 'should' sufficiently conveyed to the members of the jury (none of whom were lawyers) the purportedly mandatory nature of their consideration of objective indicia of nonobviousness. . . . Even if it was error for the Court to use 'should' rather than 'must,' such error was harmless -- it neither misled the jury nor had a probable effect on the verdict."

Bombardier Recreational Products, Inc et al v. Arctic Cat, Inc et al, 0-12-cv-02706 (MND August 7, 2018, Order) (Tunheim, USDJ)

Post-Verdict Sales of Infringing Product Support Award of Enhanced Damages

Following a jury verdict of willful infringement, the court granted in part plaintiff's motion for enhanced damages and increased the damage award by 25% because one-quarter of defendant's sales at issue took place after the verdict. "⁠[E]nhancement is appropriate in light of evidence of culpable conduct presented at trial and [defendant's] deliberate and conscious decision to continue selling [the accused product] after the verdict. . . . [O]n the pre-trial record, the question of infringement was, without doubt, debatable. But the situation changed at trial. [Plaintiff] presented credible evidence of deliberate copying. . . . The evidence also raised doubts about whether [defendant] attempted in good faith to evaluate infringement after being sued. . . . After the verdict, [defendant] continued to sell [the accused product] and did not modify the units in any way. Its course of conduct can only be seen as intentional, and entirely at its own risk."

Johnstech International Corp. v. JF Technology Berhad et al, 3-14-cv-02864 (CAND August 6, 2018, Order) (Donato, USDJ)

Vague Interrogatories a "Gift" to Answering Party

The court granted in part plaintiff's motion to compel further interrogatory responses regarding defendants' offers to sell the accused surgical products. "The dispute lies with Defendants’ response to the portion of the Interrogatory calling for a 'detailed description of the circumstances of [defendants'] offering to each customer.' Defendants assert that this portion of the request is vague, irrelevant and not proportional. . . . Its vagueness was a gift from Plaintiff; Defendants were free to interpret it and provide a response, so long as the response was reasonable. Doing nothing was not acceptable. . . . Defendants need not, in supplementing their response, respond directly to the 8 categories of information Plaintiff believes should be in the response. Defendants may consider the list merely as suggestions that it may use to craft a reasonable response."

NuVasive, Inc. v. Alphatec Holdings, Inc. et al, 3-18-cv-00347 (CASD August 3, 2018, Order) (Dembin, MJ)

Defense Counsel’s Past Representation of Party to Confidential Settlement Agreement Does Not Justify Disqualification

The court denied plaintiff's motion to disqualify defense counsel who represented a third party as a defendant in another case involving the same patent-in-suit that resulted in a confidential settlement agreement. "⁠[B]ecause [counsel] did not represent [plaintiff] in that prior matter, there is no way that he could have had access to relevant privileged information belonging to [plaintiff], which is the third requirement of the test. The only claim is that he is now aware of the information contained in the confidential settlement agreement entered into in that case. There is no claim that [counsel] violated his duty of loyalty to his former client, and no claim that he has 'divulge[d] confidential communications' that he learned from his former client. Nor has there been any claim that he accepted representation of a person whose interests are adverse to those of his former client. . . . [P]laintiff provides no authority for this novel proposition that this set of circumstances demands disqualification of the adversary’s attorney."

Tour Technology Software, Inc. v. RTV, Inc., 1-17-cv-05817 (NYED August 2, 2018, Order) (Pollak, MJ)

Conclusory Disclaimer Stricken From Expert’s Report

The court granted plaintiff's motion to strike portions of the reports of defendant's invalidity experts which included disclaimers. "⁠[Plaintiff] insists that the following language should be stricken from the claim charts included with [the experts'] Invalidity Reports: 'Even if these references do not expressly disclose this claim element, the claim is obvious due to the inherent disclosure of the references and/or the knowledge of one of ordinary skill in the art. . . .' The failure of [defendant's] experts to provide any analysis supporting their conclusions is prejudicial to [plaintiff] because it cannot adequately prepare to cross-examine [them] regarding said conclusions or counter their reasoning with [its] own experts. [Defendant's] argument that the challenged statements are not 'reservations' or 'disclaimers,' but instead, reflect 'the fact that the claim elements are also found elsewhere,' does not address the problem with the experts’ lack of analysis. If [defendant] is correct, then there is no harm in striking the statements."

Karl Storz Endoscopy-America, Inc. v. Stryker Corporation et al, 3-14-cv-00876 (CAND August 1, 2018, Order) (Corley, MJ)

Victory at Trial Does Not Justify Increase in Rate for Ongoing Royalty

Following a jury trial, the court partially granted plaintiff's motion for an ongoing royalty and awarded the same royalty rate imposed by the jury. "⁠[T]he Court refused to grant a preliminary injunction . . . finding that because [plaintiff] did not practice that patent, [it] could not show any irreparable harm. . . . [T]he Court is unwilling to award [plaintiff] a royalty enhancement predicated only upon its victory at trial. This is especially so because the hypothetical negotiation the Court must now envision mirrors the hypothetical negotiation the jury already considered in setting the $4-per-sale royalty rate which [plaintiff] seeks to enhance. . . . [Plaintiff] has not shown that a hypothetical negotiation conducted now should end any differently than the hypothetical negotiation envisioned by the jury in setting the rate originally."

The Chamberlain Group, Inc. v. Techtronic Industries Co., Ltd. et al, 1-16-cv-06097 (ILND July 31, 2018, Order) (Leinenweber, SJ)

"Obscure" Royalty Rate Does Not Render Jury Award Excessive

Following a jury trial, the court denied defendant's motion for new trial and rejected defendant's argument that the jury's damages award was excessive. "Because the Court granted judgment of matter of law against [plaintiff] on the issue of lost profits, [plaintiff] was only entitled to a reasonable royalty. . . . [Defendant] argues that the jury’s damages award 'does not appear to be based on a reasonable royalty since it amounts' to obscure percentages. . . . [Defendant] cites no authority requiring the jury to award a reasonable royalty based on a round number. But even then . . . the Court can arrive at the $2,624,288 damages amount with simple math. . . . A reasonable jury may have resolved this discrepancy [between the parties' experts] by averaging the two sales figures, which results in a sales figure of $16,930,546. The jury’s damages award of $2,624,288 is 15.5% of $16,930,546. Although not required by law, the Court finds that 15.5% is a clean royalty rate that a jury could be reasonably expected to award [plaintiff] for [defendant's] infringement."

Schwendimann v. Arkwright Advanced Coating, Inc., 0-11-cv-00820 (MND July 30, 2018, Order) (Tunheim, USDJ)

Google Global Cache Server Housed in Local ISP Qualifies as Regular and Established Place of Business

The court denied Google's renewed motion to dismiss for improper venue because it had a regular and established place of business in the district through its Google Global Cache servers housed by third-party ISPs. "⁠[W]hile a virtual space or electronic communications alone are insufficient to denote a 'place' within the meaning of the statute, they may, with more, be indicative of the requirement having been met. . . . Here . . . there is more than 'merely' 'a virtual space or [] electronic communications from one person to another.' The 'place' is specifically localized: a physical server occupying a physical space. Not only does Google exercise exclusive control . . . over the digital aspects of the GGC, Google exercises exclusive control over the physical server and the physical space within which the server is located and maintained. . . . [Defendant's] ownership of the server and its contents is absolute, as is [its] control over the server’s location once it is installed. . . . The statute does not require 'substantial' business or 'large' impact from the business being done at the place of business -- in order to lay proper venue in a judicial district, the statute simply requires that a regular and established place of business be present."

SEVEN Networks, LLC v. Google LLC, 2-17-cv-00442 (TXED July 19, 2018, Order) (Gilstrap, USDJ)

Intercompany Sales From Patentee to Wholly-Owned Subsidiary May Constitute “Sales” for Purposes of Lost Profits

The court denied plaintiff's motion for summary judgment that defendant was not entitled to lost profits damages for infringement of its interferon therapy patent on the ground that only defendant's subsidiary sold treatments in the U.S. "⁠[Defendant] explains that it sells [its products] to [its non-party wholly owned subsidiary] in return for payment of an intercompany purchase price. [The subsidiary] then sells those products to wholesalers and pharmacies. The lost profits that [defendant] is principally seeking in this case are on the intercompany sales from [defendant] to [the subsidiary]. . . . [T]he intrafamily, intercompany sales from [defendant] to [its subsidiary] can constitute 'sales' by [defendant] for lost profits purposes. [Plaintiff] has not appeared to have cited a blanket rule prohibiting the fact finder from considering such transactions in a lost profits analysis. In addition, construing the facts in the light most favorable to [defendant], the Court finds that [defendant] has produced enough evidence that a rational juror could conclude that the profits of [the subsidiary] flow inexorably to [defendant]."

Bayer Healthcare Pharmaceuticals Inc. v. Biogen Idec Inc., 2-10-cv-02734 (NJD July 26, 2018, Order) (Cecchi, MJ)

Significance of ITC Complainant’s Domestic Investment in Patented Products is Not Determined by Reference to Complainant’s Overall Domestic Investments

The ALJ denied respondents' motion for summary determination that complainants could not satisfy the economic prong of the domestic industry requirement because of their de minimis domestic investments. "The core of Respondents’ argument here is that the percentage of [complainant's] domestic investments in the patented products is too small in relation to its overall domestic investments (to say nothing of its worldwide investments) to be significant. Respondents assume that there is a level of relative investment below which it is impossible to 'credibly establish' significant investments. Respondents’ analysis fails to take proper account of the Commission’s guidance that determining satisfaction of the economic prong is a flexible exercise. . . . [I]nvestments made by a large entity may appear less significant when subjected to a strictly mathematical comparison with overall expenditures, but such investments may be deemed substantial nevertheless. . . . Respondents cite no authority for their contention that '⁠[complainants'] investments are simply too small,' and such an assertion contradicts well-established ITC precedent holding that a domestic industry is not determined by reference to absolute numbers."

LED Lighting Devices, LED Power Supplies, and Components Thereof, 337-TA-1081 (ITC July 24, 2018, Order) (Lord, ALJ)

Section 271(e) Safe Harbor Extends to Clinical Trial Participants’ Continued Treatment After Trial

The court granted defendant's motion for summary judgment that it did not infringe plaintiff's chronic pain treatment patents because the post-trial use of the accused systems fell within the safe harbor provision of 35 U.S.C. § 271(e). "The use of the [two] systems in patients that have participated in the Accelerate trial fits within the safe harbor provision of 35 U.S.C. § 271(e), even after the patients have completed their participation in the trial. This use is 'reasonably related to the development and submission of information' to the FDA for device approval. The FDA specifically approved a trial plan that allowed participants to continue to receive treatment after results were collected. And international standards for medical research require trial sponsors allow participants to access studied treatments even after the trial's conclusion."

Nevro Corp. v. Boston Scientific Corporation et al, 3-16-cv-06830 (CAND July 24, 2018, Order) (Chhabria, USDJ)

Web-Based Businesses Not Exempt From In re Cray

The court granted defendant's motion to transfer for improper venue and rejected plaintiff's argument that In re Cray’s three-part definition for "regular and established place of business" should not apply to web-based businesses. "Plaintiff asks this Court to recognize the nature of Defendant’s business – facilitating communication over the web, in every state including Nevada – and to limit the application of [In re Cray, 871 F.3d 1355 (Fed. Cir. 2017)] to factual circumstances where physical products are involved. . . . The Court finds, however, that the key inquiry is not whether physical objects are involved, but rather whether the public has access to the defendant corporation through an employee or office located in the district where a suit is brought or if the public directly accesses the services of defendant through a location in the respective forum. . . . [T]he bulk of the defendant’s employees, product development, and overall operations are located in San Francisco, and that it does not own or lease any buildings in this district, it has no Nevada phone numbers or addresses listed for its operations, and it stores no inventory or data in Nevada. These facts demonstrate that Defendant maintains no place of business in Nevada, much less one that is both regular and established."

Voip-Pal.com, Inc. v. Twitter, Inc., 2-16-cv-02338 (NVD July 23, 2018, Order) (Boulware, II, USDJ)

Accusations of Copying to Overlapping Customer Base and PTO Create Substantial Controversy Supporting Declaratory Judgment Claim

The court denied defendant's motion to dismiss plaintiff's declaratory judgment claim for lack of an actual case or controversy. "⁠[Defendant] represented to the [PTO] that [plaintiff] was copying the product for which it sought a patent. . . . On its own, [defendant's] pre-issuance conduct might not be enough to make this a real and immediate controversy, but its alleged statements in the marketplace suffice to make it so. [Defendant] told the two companies’ overlapping customer base that [plaintiff] had copied its product. . . . Acknowledging that this is a close question, the Court takes guidance from the Federal Circuit’s observation that the purpose of the Declaratory Judgment Act is to 'obviate,' among other problems, 'extra-judicial patent enforcement with scare-the-customer-and-run tactics.' [Plaintiff's] allegations suggest something like those tactics was afoot here."

Global Tubing LLC v. Tenaris Coiled Tubes LLC et al, 4-17-cv-03299 (TXSD July 20, 2018, Order) (Ellison, USDJ)

OSC Re Sanctions Issued For Parties’ Unilateral Attempt to Modify Claim Construction Procedure

The court ordered the parties and their counsel to show cause why they should not be sanctioned under Rule 11, Rule 16, 28 U.S.C. § 1927, or the court’s inherent power for their attempts to preserve certain claim construction disputes until after the court's claim construction procedure. "Unlike promises and pie crust, the Rules and Procedures of this Court are not meant to be broken, nor is their breaking to be ignored. . . . [Defendant's] Motion demonstrates a serious disregard for this Court’s Rules, Orders, and its authority to control its own docket. . . . [T]he Parties appear to presumptively require the Court accede to their unilateral decision to brief only a subset of the claim terms and then present other terms at a second claim construction hearing when convenient. . . . The Court will countenance neither the Parties’ unilateral actions which it details herein nor [defendant's] attempt to use the perceived sword of [O2 Micro Int’l, Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1362 (Fed. Cir. 2008)] to essentially hijack this Court’s claim construction process and its prerogative to manage its own cases following such unilateral action. . . . [Defendant's] thinly veiled threats of reversal on appeal are offensive and contrary to case law."

SEVEN Networks, LLC v. Google LLC, 2-17-cv-00442 (TXED July 19, 2018, Order) (Gilstrap, USDJ)

Outside Prosecution Counsel’s Knowledge of Patent Not Imputed to Client

The court granted defendants' motion for summary judgment that they did not willfully infringe plaintiff's winch system patent because plaintiff presented insufficient evidence of knowledge through the knowledge of defendants' outside prosecution counsel. "⁠[T]he only correspondence between [outside counsel] and [defendants] regarding the [patent-in-suit] lends no support to Plaintiff's view that there is 'extensive evidence of knowledge' in the record . . . . At most, the emails are fairly read as providing [defendants] with notice of the [patent's] existence. However, [counsel] clearly advised [defendants] against further action with regard to the [patent]. Perhaps [defendants] should have looked into the matter further, against the advice of counsel, and sought a second opinion. Nevertheless, there being no evidence that further action was taken, willfulness cannot be established. . . . Plaintiff devotes a significant portion of its brief to the argument that whatever knowledge [counsel] had of the [patent-in-suit] should be imputed to [defendant] based on an agency-principal theory. Plaintiff has not brought to the Court's attention a single case holding that knowledge from outside legal counsel is imputable to a client corporation for purposes of willful patent infringement."

Olaf Soot Design, LLC v. Daktronics, Inc., et al, 1-15-cv-05024 (NYSD July 18, 2018, Order) (Sweet, USDJ)

Facilitating Settlement No Basis for Vacating Order Finding Patent Expired and Unenforceable

The court denied the parties' stipulated motion to vacate an earlier order partially granting defendant's motion to dismiss for failure to state a claim even though the parties' settlement was contingent on vacatur. "I find that the public interest would be disserved by vacatur. . . . Here, the [prior] Order specifically held that the [patent-in-suit] was expired and unenforceable. That holding has the potential to 'create collateral estoppel in favor of nonparties whose rights are based on statutory enactments adopted for their protection,' namely, the time bar provisions embodied in 35 U.S.C. § 154(a)(2). Vacating the [prior] Order has the potential to 'prolong[] the life of' an expired patent and permit its continued enforcement against nonparties. I decline to do so."

HoloTouch, Inc. v. Microsoft Corporation, 1-17-cv-08717 (NYSD July 17, 2018, Order) (Hellerstein, USDJ)

Retailer’s Good Faith Purchase of Seasonal Products No Basis to Avoid Preliminary Injunction For Remaining Inventory

The court granted plaintiffs' motion for a preliminary injunction and denied a retailer defendant's request to sell its remaining inventory of the accused product. "⁠Defendants have launched a new product at the beginning of each summer season for the last three years. Defendants have continued selling their product throughout the entire summer season before being enjoined by this Court. Then, each year, following issuance of the injunction, Defendants have released a slightly altered product at the beginning of the next summer season. . . . [T]he Court sees no reason to grant [the retailer's] request [to sell off its remaining inventory]. Defendants summarily repeat their invalidity and non-infringement arguments and argue that [the defendant] purchased its current inventory in 'good faith,' stating that '⁠[t]he fact that the [C]ourt has found that the PVC cap . . . is an elastic fastener is, at a minimum, heavily debatable.' The Court is unaware of -- and Defendants fail to cite to -- any authority that permits an exception to a preliminary injunction on a showing of 'good faith.'"

Tinnus Enterprises, LLC et al v. Telebrands Corporation et al, 6-17-cv-00170 (TXED July 16, 2018, Order) (Schroeder, USDJ)

Bad Faith Assertion of Invalidity Defense Solely to Extend ITC Preclusion Order Justifies Award of Attorney Fees

The court granted in part plaintiff's requested fees under 35 U.S.C. § 285 because defendant maintained its invalidity defense solely to extend the time of an ITC preclusion order. "⁠[T]he ITC exclusion bar relating to Claims 8 and 19 remains in effect, even though the independent claims upon which these dependent claims rest are invalid. . . . Because the Court finds that [defendant's] actions regarding the issue of obviousness on Claims 8 and 19 were not made in good faith, but as an attempt to extend the time of the ITC preclusion order on these two claims directed against [plaintiff], the Court finds this portion of the case to be sufficiently exceptional to warrant awarding [plaintiff] one half of the attorneys' fees incurred during the week of the trial (to reflect [plaintiff's] attorney time spent on the issue of invalidity of [defendant's] patent), and all fees of [plaintiff's expert], relevant to the issue of invalidity of claims 8 and 19 of [defendant's] patent. Although there could perhaps be justification for awarding [plaintiff's] expenses as far back as the CAFC decision, the Court limits the sanctions to one half of the attorneys' fees for [two witnesses] incurred during the trial itself and all of [its expert's] fees related to the issue of invalidity. . . ."

Eko Brands, LLC v. Adrian Rivera Maynez Enterprises, Inc. et al, 2-15-cv-00522 (WAWD July 13, 2018, Order) (Donohue, MJ)

Courts May Not Exercise Pendant Venue Over Third Parties

The court granted defendant's motion to dismiss for improper venue because plaintiff provided no authority for the court to exercise pendant venue over defendant to further judicial economy in a two-defendant action. "Plaintiff argues that judicial economy considerations favor the Court’s exercise of pendent venue, as granting [defendant's] motion would effectively bifurcate this matter into two separate actions. . . . Plaintiff fails to present any authority, binding or otherwise, suggesting that courts after [TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017)] exercise pendent venue over third parties in patent infringement actions. . . . Plaintiff asserts that declining pendent venue over its claims against [defendant] would waste time and resources by bifurcating this matter into two separate suits on 'opposite sides of the country.' But, at this stage, Plaintiff’s argument is pure conjecture: Plaintiff does not claim, nor does it appear, that it has initiated this separate suit."

Olivia Garden, Inc. v. Stance Beauty Labs, LLC et al, 4-17-cv-05778 (CAND July 12, 2018, Order) (Gilliam, USDJ)

Production of Incorrect Testing Data Discovered During Trial Justifies $1.5 Million Discovery Sanction

The court granted in part plaintiffs' motion for discovery sanctions and sanctioned defendant $1.5 million after defendant disclosed corrected stability dissolution testing data during a bench trial. "With two days of trial remaining, [defendant] revealed that its stability dissolution testing data was incorrect. . . . [Defendant's] decision to withhold the correct data caused a delay in trial, extra expenses for [plaintiff], and a drain in judicial resources. . . . ⁠[Plaintiff] is not entitled to all the fees associated with time spent analyzing [defendant's] ANDA stability and dissolution data. [Plaintiff] is only entitled to the costs it incurred reviewing the incorrect dissolution data. . . . [Plaintiff] is entitled to the costs associated with the deposition of current and former [employees of defendant's manufacturer], as well as time spent researching the relationship between [the manufacturer] and [defendant] and the ownership of [the manufacturer], because these tasks were taken in order to determine who had knowledge of the incorrect dissolution data. But for the misconduct, [plaintiff] would not have engaged in the aforementioned tasks. . . . [Plaintiff] is entitled to all fees and costs associated with [its expert] following the revelation of the misconduct. As a result of the misconduct, [his] expert report had to be amended in light of the corrected data."

Shire LLC et al v. Abhai LLC, 1-15-cv-13909 (MAD July 11, 2018, Order) (Young, USDJ)

Employing Four Researchers at University Lab Does Not Create a Regular and Established Place of Business for Venue

The court granted defendant's motion to dismiss for improper venue because defendant did not have a regular and established place of business by placing four employees at a university lab in the district. "The Court believes that . . . the educational-business collaboration at best may be interpreted as quasi-, and/or very-early-stage, research and development, the results of which are a joint product of the University and Defendant. . . . The Court seriously doubts whether such esoteric and preliminary endeavors may qualify as 'business' of Defendant. . . . Defendant has put forth unrefuted evidence establishing that [the university] owns and controls the facility; Defendant’s employees are designated as visitors; funding provided by Defendant to [the university] covers fellowship-tuition and research support, not the cost of housing the employees; signage identifies the lab as a [university] research center, with funding by Defendant; and the lab is neither publicly advertised nor internally classified as Defendant’s facility."

X2Y Attenuators, LLC v. Intel Corporation, 1-17-cv-00164 (PAWD June 25, 2018, Order) (Bissoon, USDJ)

Defendant Precluded From Informing Jury of Possible Enhancement of Damages Award in Willfulness Retrial

The court granted plaintiff's motion in limine under FRE 403 to preclude defendant from telling the jury that damages could be enhanced or trebled at a willfulness retrial and rejected defendant's argument that its supplier's indemnification agreement should similarly be excluded. "No party may discuss the potential that the Court may enhance the damages awarded by the previous jury if the jury in the second trial makes a finding of willfulness. [Defendant] also argues that [its supplier's] indemnification falls within this same category and must also be excluded. The Court disagrees. Unlike treble damages, which is irrelevant to the question before the jury on willfulness, [the supplier's] indemnification agreement is relevant to [defendant's] alleged willfulness. Moreover, any minimal prejudicial effect is outweighed by its substantial probative value."

Mass Engineered Design, Inc. v. Planar Systems, Inc., 3-16-cv-01510 (ORD July 6, 2018, Order) (Simon, USDJ)

Filing Multiple Lawsuits Asserting Patents Susceptible to Section 101 Challenge Justifies Attorney Fees Award

Following a dismissal for lack of patentable subject matter, the court granted defendants' motions for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation positions were exceptionally meritless. "⁠[Plaintiff] filed its complaint in the face of significant post-Alice precedent. Here, [plaintiff] chose to file more than a dozen lawsuits asserting four ineligible patents and, in so filing, ignored substantial precedent dismissing analogous data manipulation patent claims. . . . Although issued patents are presumed valid, they are not presumed eligible under Section 101. . . . [Plaintiff] cannot hide behind its own refusal to analyze its patents critically. Lawyers routinely evaluate the viability of contracts and strength of claims and thereupon counsel clients to act responsibly. To do otherwise unnecessarily burdens to the courts and inflicts significant costs to the opposing parties."

Cellspin Soft, Inc. v. Fitbit, Inc., 4-17-cv-05928 (CAND July 6, 2018, Order) (Rogers, USDJ)

Identification of Putative Inventor Unnecessary For Improper Inventorship Defense to Survive Summary Judgment

The court denied plaintiff's motion for summary judgment that its wireless communication patent was not invalid for improper inventorship on the grounds that defendant could not identify a purported inventor. "Plaintiff has failed to cite case law that explicitly requires the identification of a putative inventor to establish a genuine issue of material fact with respect to improper inventorship. At best, Plaintiff relies on cases that implicitly require the identification of a putative inventor when considering the merits of an improper inventorship defense. . . . Defendant points to [a third party working group member's] e-mail summary discussing the BSR format selection criteria and [defendant's] expert testimony that the e-mail summary contains the subject matter of the [patent-in-suit]. This calls into question whether [the named inventor] was the sole inventor of the subject matter of the claimed invention."

Cellular Communications Equipment LLC v. HTC Corporation et al, 6-16-cv-00475 (TXED July 5, 2018, Order) (Mitchell, MJ)

Corporate Parent May Not Claim Inexorable-Flow of Profits From Subsidiary Based Solely on Ownership and Control

The district judge overruled defendants' objection to the magistrate judge's order denying defendants' motion to compel the production of documents regarding plaintiff's financial relationship with its subsidiary. "The Court finds it prudent at this stage to make clear its expectations going forward, based on the Court’s recent experience with the inexorable-flow theory of lost-profits damages in patent cases. . . . [Plaintiff] cannot rely merely on its ownership and control of [its subsidiary] (or on [its subsidiary's] tax status) to prove that [the subsidiary's] profits flow inexorably to [plaintiff]. Additionally, any expert opinion that [the subsidiary's] profits flow inexorably to [plaintiff] must be based on more than [its] ownership and control of [the subsidiary]. . . . The Court also expects [plaintiff's] damages expert’s opinions -- including any opinion that [the subsidiary's's] profits flow inexorably to [plaintiff] -- to be based on sufficient facts or data, according to the standard articulated above and without reliance on any unproduced documents."

Polaris Industries Inc. v. Arctic Cat, Inc. et al, 0-15-cv-04129 (MND July 3, 2018, Order) (Tunheim, USDJ)

Infringement Contentions Limited to Specifically Identified Products

The court granted defendant's motion to strike plaintiff's infringement contentions because plaintiff failed to sufficiently identify the accused instrumentalities. "⁠[Plaintiff] merely asserts in a footnote for each claim chart that the dozens of accused products 'operate in substantially the same manner with respect to the accused functionality.' This conclusory assertion is insufficient. '⁠[I]n order to rely on a claim that one accused product represents another for purposes of Rule 3–1(c), a patentee must do more than state as much. A patentee must state how.'. . . [Defendant] argues that '⁠[plaintiff's] broad categorical identifications and improper use of open-ended language ('e.g.') should be stricken, and [its] allegations should be limited to the products specifically identified.' This order agrees."

Uniloc USA, Inc. et al v. Apple Inc., 3-18-cv-00360 (CAND July 2, 2018, Order) (Alsup, USDJ)

Apex Doctrine Does Not Prohibit Deposition of Former Google VP

The court granted in part defendant's former employee's motion for a protective order precluding his deposition under the apex doctrine. "⁠[I]f being super-busy and important immunized you from being deposed, there might not be any depositions in Silicon Valley. . . . At bottom, I am not persuaded that the [former employee's] deposition is proportional to the needs of the case at this moment. . . . [Plaintiff] should first take the depositions of the relevant [defendant] employees with knowledge of Project Loon. If, after having substantially completed [defendant's] depositions, [plaintiff] can show that it still has information gaps that it needs [his] testimony to fill, then it may renew its request to depose [him]. Barring further court order, [plaintiff's] portion of the [former employee's] deposition will be capped at 90 minutes."

Space Data Corporation v. Alphabet Inc and Google LLC, 5-16-cv-03260 (CAND June 29, 2018, Order) (Cousins, MJ)

Failure to Request Indicative Ruling During Pendency of Appeal Waives Objection to Venue

Following a jury trial, a bench trial, appeal, and remand, the court denied defendant's motion to transfer for improper venue because defendant waived its venue defense through litigation conduct. "⁠During the pendency of [defendant's] appeal to the Federal Circuit, the United States Supreme Court issued its decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017) . . . . [T]he court finds it inarguable that [defendant] wanted to wait for the outcome of the Federal Circuit appeal prior to raising its venue objections. . . . [Defendant] could have requested an indicative ruling from the district court under Fed. R. Civ. P. 62.1 during the pendency of the appeal. . . . This case has been through dispositive motion practice, jury trial, bench trial, post-trial motions, appeal and remand. It has been pending for more than eight years. In fact, this case predates every filing in TC Heartland, including the original pleadings that gave rise to the Supreme Court’s ultimate change of law. . . . [T]he age and breadth of this litigation would pose a novel -- and in this court’s view, unreasonable -- toll on judicial economy when compared with maintaining the case here."

Exmark Manufacturing Company Inc. v. Briggs & Stratton Corporation, 8-10-cv-00187 (NED June 28, 2018, Order) (Zwart, MJ)

Rule 11 Sanctions of $222,937 Awarded Against Plaintiff and Plaintiff’s Attorneys

The court granted defendant's concurrent motions for attorney fees under 35 U.S.C. § 285 and for sanctions under Rule 11 and awarded $222,937 jointly and severally against plaintiff and plaintiff's attorneys. "The conduct of both [plaintiff] and its lawyers in this litigation was plainly irresponsible and frivolous. . . . [E]ven though [defendant] gave [plaintiff] a [defendant] engineer's declaration, an invitation to inspect the source code at [its] offices, and the bill of materials for an accused device, [plaintiff] and its lawyers did not amend their infringement contentions (or even inspect the source code until much later). Instead, [plaintiff] boldly continued to assert its implausible (and, as the unrebutted evidence at summary judgment showed, impossible) theories of infringement. . . . Moreover, [plaintiff] failed to conduct an adequate investigation into the plausibility of its claims by refusing to do a teardown of the devices -- even after being informed that the devices did not contain or use the sensors as [plaintiff] alleged."

Smart Wearable Technologies Inc. v. Fitbit, Inc., 3-17-cv-05068 (CAND June 27, 2018, Order) (Chhabria, USDJ)

Plaintiff Ordered to Produce Prosecution Counsel’s Non-Privileged Billing Records as Relevant to Inequitable Conduct and Prosecution Laches

The court granted in part defendant's motion to compel the production of billing records from plaintiff's prosecution counsel because some discovery was relevant to defendant's prosecution laches and inequitable conduct defenses. "⁠[N]on-privileged billing records that regard her work on the patents alleged in this claim are relevant to the extent they demonstrate when each particular prosecution matter was opened, how long it took between the initial opening and when the application was first filed, what activities occurred during prosecution of each application, when each activity occurred, and how much time was spent on the activity. . . . The annual amount of compensation [counsel] received from [plaintiff] to work on the patents at issue [the counterclaims], could raise an inference of [her] financial motive to deceive. [Defendant] is entitled to know how much annual compensation [she] received to work on these two patents."

Finjan, Inc. v. ESET, LLC et al, 3-17-cv-00183 (CASD June 25, 2018, Order) (Skomal, MJ)

Delay in Objecting to Venue Not Excused by Existence of Foreign Defendant

The magistrate judge recommended denying defendant's motion to dismiss or transfer for improper venue and rejected defendant's argument that it did not waive its objection to venue because the objection was not available until the court dismissed another defendant. "The holding of [TC Heartland LLC v. Kraft Food Grp. Brands LLC, 137 S. Ct. 1514 (2017)] applied to domestic corporations. At the time that TC Heartland issued, then, regardless of whether the claims against the foreign defendant would ultimately be rejuvenated by the District Court, it should have been clear to [defendant] that venue in this District was not proper as to it. And so there is no reason why the venue defense was not 'available' to [defendant] until [the district judge] affirmed the Court's motion to dismiss R&R in December 2017."

Princeton Digital Image Corporation v. Ubisoft Entertainment SA, 1-13-cv-00335 (DED June 25, 2018, Order) (Burke, MJ)

Advice of Counsel Defense Waiver Applies to Trial-Counsel’s Pre-Suit Communications

The court granted plaintiff's motion to compel trial counsel's pre-suit communications and work product related to defendant's opinion of counsel defense that defendant withheld as privileged. "⁠[Trial counsel's] negotiations on Defendant’s behalf pre-suit sought to avoid the adversarial process and engage in voluntary alternative dispute resolution. The relevant circumstances concerning the disclosure Plaintiff seeks -- [counsel's] pre-suit communications and work -- indicate that [counsel's] function was more analogous to that of advice or opinion counsel than trial counsel. . . . [Counsel] was retained for a period from 2010–2011 and again from 2015–2016. During this time, Defendant was regularly communicating with Plaintiff regarding Plaintiff’s [patent] and accusations of infringement against Defendant. . . . It would be illogical to shield from discovery the very conduct that is dispositive of whether infringement was committed willfully. . . . Depending upon the advice Defendant received from [trial counsel] regarding Defendant’s alleged infringement activities, it may or may not have been reasonable for Defendant to rely on [opinion counsel's] exculpatory opinion."

Zen Design Group, Ltd. v. Scholastic, Inc., 2-16-cv-12936 (MIED June 22, 2018, Order) (Cleland, USDJ)

Unsuccessful Equitable Estoppel Position Does Not Make Case Exceptional

Following summary judgment of equitable estoppel, the court denied defendant's motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation positions were not unreasonable. "While [plaintiff's] reliance on [Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014)] may have been misplaced, its position that the conduct described in this instance does not qualify as misleading was not objectively unreasonable. While several Federal Circuit cases have addressed the issue, there is no clear holding on when silence, without affirmative misrepresentations, can be sufficiently misleading as to provide a basis for equitable estoppel. In reaching its decision, the Court had to analyze several Federal Circuit decisions on the question and analogize the facts at issue to these cases. Reasonable minds could have differed on the outcome."

Akeso Health Sciences, LLC v. Designs for Health, Inc., 2-16-cv-07749 (CACD June 22, 2018, Order) (Otero, USDJ)

Reliance on Past Rulings Weighs Against Reconsideration

The court denied plaintiffs' motion to reconsider an earlier order granting defendant's motion to strike opinions from plaintiffs' invalidity expert that were submitted in support of summary judgment briefing because of the substantial unfair prejudice to defendant. "This unfair prejudice goes beyond merely the time and expense of taking additional discovery regarding [the undisclosed reference] and supplementing [an expert's] rebuttal report. The court’s exclusion of [plaintiffs' expert's] testimony on the undisclosed invalidity theories has shaped the landscape of the case, on which both parties have relied in their preparations for trial. . . . For example, [defendant] argues that it made the strategic decision to dismiss certain infringement claims with prejudice to streamline the case in reliance on the court’s Ruling on Summary Judgment, including as regards to the [previously excluded] invalidity theories. . . . [A]ttorneys make deliberate decisions about trial strategy based on the court’s prior Rulings and the posture of the case at the time. . . . [T]o unwind the court’s prior Ruling at this stage in the case without also unwinding a number of decisions made since then would unfairly prejudice [defendant]."

Chapco, Inc. et al v. Woodway USA, Inc., 3-15-cv-01665 (CTD June 20, 2018, Order) (Hall, USDJ)

Seven Month Delay While Actively Litigating Waives Venue Challenge

The court denied defendants' motion to dismiss or transfer for improper venue because defendants waived their venue challenge through their litigation conduct. "⁠[D]uring the seven months after the [TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017)] decision, [defendants] were actively litigating this case in this District. . . . [M]otions for summary judgment were denied. . . . A Claim Construction Order was issued shortly thereafter. . . . [Defendants] also filed two new motions for summary judgment before filing this Motion. . . . This procedural history reflects the type of 'tactical wait-and-see bypassing of an opportunity to declare a desire for a different forum' expressly identified in [In re Micron Tech., Inc., 875 F.3d 1091 (Fed. Cir. 2017)] as a paradigm for when an objection to venue could be waived notwithstanding the new law as to Rule 12(h). . . . TC Heartland changed the law with respect to the definition of corporate residence for the purposes of patent venue. However, it did not change the underlying prudential framework for the assessment of challenges to venue like the one raised here."

Adrian Rivera v. Remington Designs, LLC d/b/a iCoffee, 2-16-cv-04676 (CACD June 19, 2018, Order) (Kronstadt, USDJ)

Seven Month Delay Alone Does Not Waive Venue Challenge

The court granted defendant's motion to transfer for improper venue and rejected plaintiff's argument that defendant waived its venue challenge. "Plaintiff does not appear to challenge the contention that venue in this Court is improper. Rather, Plaintiff argues that . . . Defendant forfeited its privilege to challenge venue by waiting nearly seven months after the [TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017)] decision to file its motion. . . . [D]espite Defendant’s delay in filing the instant motion, Plaintiff cites no undue prejudice caused by the delay; nor can the Court discern any such prejudice to Plaintiff. Specifically, there has been no additional motion practice, an initial pretrial conference has not yet been scheduled, discovery has not yet commenced, and no trial date has yet been set."

Blue Rhino Global Sourcing, Inc. v. Sky Billiards, Inc. d/b/a Best Choice Products, 1-17-cv-00069 (NCMD June 20, 2018, Order) (Biggs, USDJ)

Common Interest Doctrine Does Not Apply to Unrepresented Parties

The court granted plaintiff's motion to compel the production of an email with a third party manufacturer that defendants clawed back under the common interest privilege because the manufacturer was not represented by counsel. "There is support for the position that all parties must be represented by counsel for the common interest exception to apply. . . . The requirement that each party to a common interest arrangement have an attorney also comports with the intent behind the common interest privilege, to permit attorneys to develop a joint legal strategy. . . . While this Court was not able to locate any Ninth Circuit precedent that explicitly requires both parties be represented by separate counsel, nor was there any precedent that extended the benefits of the common interest exception to the attorney client privilege when the disclosure at issue involved an unrepresented third-party employed by a separate entity."

The Regents of the University of California et al v. Affymetrix, Inc. et al, 3-17-cv-01394 (CASD June 19, 2018, Order) (Stormes, MJ)

District Court Lacks Authority to Stay Execution of $68 Million Judgment Pending a Petition for Certiorari to the Supreme Court

Following the Federal Circuit's affirmance of the jury verdict, the magistrate judge recommended granting plaintiff's motion to enforce liability on defendant's $68 million supersedeas bond and rejected defendant's request to continue the stay pending its certiorari petition to the Supreme Court. "⁠[Rule 62(d)] does not specify when a stay under that provision expires or terminates. The great weight of authority regarding this issue, however, suggests that the Rule 62(d) stay expires when a circuit court issues its mandate. . . . I have found no authority to support [defendant's position] that district courts retain inherent authority to issue a stay of the judgment of a circuit court of appeals pending a petition for certiorari review to the Supreme Court. . . . [B]ecause the Federal Circuit has issued its final judgment and mandate affirming the . . . judgment in [plaintiff's] favor, the district court is obligated to enforce the Federal Circuit's mandate."

PPC Broadband, Inc. v. Corning Optical Communications RF, LLC, 5-11-cv-00761 (NYND June 18, 2018, Order) (Peebles, MJ)

Asserted Claims of Wireless Remote Control Patent Invalid Under 35 U.S.C. § 101

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s wireless remote control patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "The court concludes that because the asserted claims are directed towards the result -- and therefore, abstract idea -- of wirelessly controlling remote devices, they are patent-ineligible. The specification refers to '⁠[a] method for controlling a remote device[] over a wireless connection.' 'underscor[ing] that [the asserted claims are] directed to an abstract concept.' More importantly, the asserted claims provide only for generic processes and components to achieve that result. . . . And although the Patent purports to solve a number of problems with remotely controlling devices, it does not solve those problems through an improvement in any specific technology."

Uniloc USA, Inc. et al v. HTC America, Inc., 2-17-cv-01558 (WAWD June 15, 2018, Order) (Robart, USDJ)

Plaintiff’s Lost Sales of Unpatented Products Supports Imposition of Preliminary Injunction

The magistrate judge recommended granting plaintiff's motion for a preliminary injunction prohibiting sales of the accused fire trucks and found that plaintiff established irreparable harm through lost sales of non-patented products. "The plaintiff, however, has shown by concrete examples, that when it sells its patent-covered quint to a fire department, there is a reasonable likelihood that the fire department will buy other fire apparatus as well. . . . If the defendants sell their allegedly infringing quints to customers, the plaintiffs opportunity to make sales of other apparatus to those customers in all likelihood will be lost. Moreover, there is no apparent way to quantify the value of those lost sales. Therefore, if the defendants can sell infringing quints, the plaintiff will suffer irreparable harm due to lost sales of other apparatus."

Pierce Manufacturing, Inc. v. E-One, Inc. et al, 8-18-cv-00617 (FLMD June 13, 2018, Order) (Wilson, MJ)

Institution of Claims Based on SAS Mandate May Not Simplify Issues for Trial Such That a Stay of Litigation is Warranted

Following the PTAB’s supplemental institution decision in light of SAS Inst., Inc. v. Iancu, ___ U.S. ___, 138 S. Ct. 1348, 1352–54 (2018) instituting inter partes review of all challenged claims of the patents-in-suit, the court granted defendants’ motion to stay because the potential for simplification of issues, the stage of the litigation, and lack of prejudice to plaintiff weighed in favor of a stay. “The PTAB issued the Supplemental Orders to review [new claims of two patents-in-suit] only because the SAS Institute decision dictates that result—not because [defendants] had demonstrated a reasonable likelihood that those claims were unpatentable on the challenged grounds. To the contrary, PTAB initially found that [defendants’] patentability challenges were lacking. . . . In the absence of a PTAB decision finding a reasonable likelihood that a claim is unpatentable, the question of whether a stay will simplify issues is not so clear. . . . Yet and still, staying [the case for the newly instituted claims] would have the effect of removing them from this case. It is hard to see how this result does not simplify the case. . . . [T]he developments since I last analyzed [the stage of litigation factor] do not alter the conclusion that ‘this case is not so far advanced that a stay would be improper.’ . . . Granting a stay on [the newly instituted claims] would leave [plaintiff] with only four remaining patents. But [plaintiff] does not contend that this amounts to any cognizable prejudice.

Huawei Technologies Co., Ltd. et al v. Samsung Electronics Co., Ltd. et al, 3-16-cv-02787 (CAND June 13, 2018, Order) (Orrick, USDJ)

SAS Prompts Post-Trial Stay of Entry of Judgment on Willful Infringement Verdict

Following a jury trial but prior to the entry of judgment, the court sua sponte stayed plaintiff's patent infringement action pending inter partes review after the PTAB reinstituted review in response to the Supreme Court's decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018). "A jury returned a verdict in [plaintiff's] favor, finding that the asserted claims of the [patent-in-suit] are not invalid and that [defendants] willfully infringed the asserted claims. . . . Following the jury trial but prior to entry of final judgment . . . the Supreme Court held that the PTAB must address every claim a petitioner has challenged. Because the PTAB did not previously address every claim challenged by [defendants] -- specifically, the claims at issue in this litigation -- the PTAB modified its institution decision 'to include review of all challenged claims and all ground presented in the Petition.'. . . The Parties are instructed to notify the Court of the PTAB’s decision within five days of such decision and the Court shall re-open the matter. "

Prisua Engineering Corp. v. Samsung Electronics Co., Ltd. et al, 1-16-cv-21761 (FLSD June 12, 2018, Order) (Moore, USDJ)

Discovery Concerning Potential Litigation Funding is Not Relevant or Proportional

The court denied defendants' motion to compel additional discovery regarding plaintiff's litigation funding because defendants failed to establish relevance or proportionality. "⁠[D]efendants move to compel production of Board minutes that discuss the potential funding, and move to complete the deposition of [plaintiff's board member], who declined to answer questions about the potential funding. . . . [Plaintiff] contests the relevance of the information requested and proffers an important piece of information: it does not have any third-party litigation financing. The Court is not persuaded that the materials sought are relevant to any party’s claim or defense and 'proportional to the needs of the case.' Even if litigation funding were relevant (which is contestable), potential litigation funding is a side issue at best. The Court finds that there is much discovery that would be more important in resolving the merits of this case. And the burden of responding would outweigh its likely benefit to defendants."

Space Data Corporation v. Alphabet, Inc. and Google LLC, 5-16-cv-03260 (CAND June 11, 2018, Order) (Cousins, MJ)

Lack of Specific Dosage Amounts and Frequencies of Administration Does Not Render Claims for Method of Treating Pain Invalid Under 35 U.S.C. § 101

The court denied defendant's motion to reconsider an earlier order granting plaintiff's motion for summary judgment that the asserted claims of its pain treatment patents did not encompass unpatentable subject matter. "The fact that certain of the claims do not recite specific dosage amounts and frequencies of administration is not fatal to the patent eligibility of the 'PK-only' claims under 35 U.S.C. § 101. A claim to a method of treating an illness is typically more than an expression of a natural law; if it were otherwise, pharmaceutical patents would be hard to come by, as most methods of treatment using pharmaceuticals consist simply of the administration of a drug that affects the human body in a manner that is dictated by laws of nature. . . . The claims in all of the claims asserted in this action . . . are 'treatment steps' -- that is, directed at a new and useful method of treating pain in a certain population of patients using a specific set of hydrocodone bitartrate formulations. For that reason, the Court views the claims as not directed to unpatentable subject matter by claiming patent protection for a natural law."

Pernix Ireland Pain Ltd. et al v. Alvogen Malta Operations Ltd., 1-16-cv-00139 (DED June 8, 2018, Order) (Bryson, CJ)

PTAB’s Final Written Decision Addressing Some But Not All Challenged Claims No Basis for Lifting Stay

The court denied plaintiff's motion to lift a stipulated stay pending inter partes review because the PTAB had not resolved two uninstituted claims following the Supreme Court's decision in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018). "Although the PTAB denied institution of IPR proceedings with respect to claims 5 and 10, and issued a final written decision on all remaining claims, the Supreme Court recently ruled that the PTAB must issue a final written decision 'with respect to the patentability of any patent claim challenged,' and 'in this context, as in so many others, "any" means "every."' For this reason, the Federal Circuit remanded [defendant's] appeal to the PTAB for issuance of a final decision regarding the patentability of claims 5 and 10. Consequently, the PTAB has yet to resolve the patentability of all challenged claims in the pending IPR proceeding, and the terms of the parties' stipulation have not been satisfied."

DermaFocus LLC v. Ulthera, Inc., 1-15-cv-00654 (DED June 7, 2018, Order) (Fallon, MJ)

Contract Law Expert Report Stricken as Unhelpful

The court granted plaintiff's motion to strike report of defendant's contract expert regarding whether defendant sold anticipating prior art before the critical date because the testimony was unhelpful. "There is little evidence in the expert report that [the expert] has brought any of his expertise to this exercise. . . . The [expert] indicates no particular expertise in review of purchase orders, invoices, product shipping records, or the like. He indicates no particular expertise in interpreting what the fact witnesses who have been deposed have said. He indicates no reliance on anything relevant to the particular industry. In my opinion, any reasonably literate English-speaker could apply the legal principles to the factual record on the relevant sale and offer to sell issues. . . . The only specialized knowledge that [the expert] has is the same thing -- contract law -- which in our system is my responsibility. For the most part, his expert report outlines the closing argument one might expect Defendant's lawyer to make after the jury has heard the underlying testimony and seen the underlying documents."

BASF Corporation v. Johnson Matthey Inc., 1-14-cv-01204 (DED June 6, 2018, Order) (Andrews, USDJ

Judge Shopping Tactic Constitutes Serious Misbehavior Justifying Award of Attorney Fees

Following a dismissal for failure to prosecute after six years of litigation, the court granted defendants' motions for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation tactics were unreasonable. "⁠[P]laintiff filed eight separate actions in this district against parties who turned out to be [the software developer defendant's] customers. None of those cases were marked as related. . . . [A week later] plaintiff filed nine more separate actions in this district, again against parties who turned out to be [the developer's] customers. Again, none of these cases were marked as related. . . . [B]efore any of the defendants had been served -- plaintiff voluntarily dismissed every case that had not been assigned to [one judge] except [for two cases]. Then . . . plaintiff filed five more cases in this district against four more of [the developer's] customers and against [the developer] itself. This time, plaintiff marked these cases as related to each other and related to [a case] which had been assigned to [that judge]. . . . The Court therefore finds that plaintiff deliberately . . . waited to file its case against [the developer] itself until it could mark that case as related to one in front of its preferred judge. That conduct, under the circumstances, is serious misbehavior."

DataTern, Inc. v. Blazent, Inc., et al, 1-11-cv-11970 (MAD June 5, 2018, Order) (Saylor, USDJ)

"Necessary" Distributor’s Place of Business Does Not Establish Venue for Supplier

The court granted defendant's alternative motion to transfer for improper venue because defendant did not have a regular and established place of business in the district through its "necessary" distributor. "⁠[T]here is abundant case law from other district courts holding that a distributor’s place of business cannot establish venue for its supplier. Citing no case law, [plaintiff] responds that this uniform line of cases is distinguishable because 'none of them involve the case where the use of a distributor is necessary to conduct the business of the defendant.' However, business necessity is insufficient to impute [a distributor's] place of business to [defendant]. . . . The purpose of the statutory limits on venue in the patent venue statute was to protect defendants from being sued in forums distant from their place of incorporation or residence. [Plaintiff's] proposed 'necessary distributor' rule would largely defeat that policy; indeed, given that smaller manufacturers are more likely to need to rely on distributors than larger ones, [plaintiff's] rule would have the perverse effect of subjecting smaller corporations more subject to suit in distant forums than larger ones."

EMED Technologies Corporation v. Repro-Med Systems, Inc. d/b/a RMS Medical Products, 2-17-cv-00728 (TXED June 4, 2018, Order) (Bryson, CJ)

Infringement by Defaulting Company Controlled by Former Employee Justifies Award of Enhanced Damages

The court granted plaintiff's motion for enhanced damages against a defaulting defendant because defendant's motivation for harm, lack of a good faith defense, lack of remedial action, duration of misconduct, and lack of closeness of the case favored treble damages. "⁠[P]rior to joining [defendant], [defendant's chairman] was employed at [company related to plaintiff], where he gained familiarity with [plaintiff's] intellectual property rights. . . and, prior to initiating this action, [plaintiff] sent [defendant] a letter notifying it of the [patent-in-suit] and [defendant's] infringing actions. Those facts, taken together with the fact that [the parties] are direct competitors, support an inference that [defendant] deliberately infringed the [patent], with the purpose of harming [plaintiff's] business. . . . [T]here is no evidence in the record to support a finding that [defendant] investigated the scope of the [patent] and formed a good-faith belief that it was invalid or that it was not infringed. . . . [T]he record is devoid of any evidence that [defendant] took remedial actions. . . . [Defendant] sold its infringing product [for almost a year]. Finally, because default judgment has already been entered as to [defendant's] liability for infringement, the closeness factor supports enhanced damages."

Sabinsa Corporation v. Olive Lifesciences Pvt. Ltd., 3-16-cv-03321 (NJD June 1, 2018, Order) (Wolfson, USDJ)

Valuation Cap Based on Difference Between Prior Offer to Sell and Prior Offer to License Patent-in-Suit Does Not Render Expert Opinion Unreliable

The court denied plaintiff's motion to strike portions of the rebuttal report of defendants' damages expert because his theory capping the value of a patent-in-suit based on prior licensing negotiations was not unreliable. "Plaintiff complains about [the expert's] conclusion that, because [a technology transfer company] offered to sell the [patent-in-suit] to [a third party] for $100 million in December 2011 and to license the patent for $70 million in March 2012, the $30 million difference means the value of [the patent] to all other potential licensees cannot be more than 30% of the value of the patent. . . . That the Federal Circuit may not have endorsed a damages theory does not make such a theory incorrect or unreliable -- it simply means it’s untested by an appellate court. Also, although Plaintiff may disagree with [the expert's] ultimate conclusion and reasoning, he clearly considered the passage of three years after [the transfer company's] negotiations with [the third party] in his analysis."

Kaist IP US LLC v. Samsung Electronics Co., Ltd. et al, 2-16-cv-01314 (TXED May 31, 2018, Order) (Payne, MJ)

Venue Statutes Do Not Apply to Foreign Defendant

The court denied defendant's motion to dismiss or transfer for improper venue. "While it was previously unclear whether § 1400(b) was controlling for foreign defendants involved in patent infringement suits, the Federal Circuit recently reaffirmed the 'long-established rule that suits against aliens are wholly outside the operation of all the federal venue laws, general and special.' Thus, a foreign defendant may be sued in any judicial district under 28 U.S.C. § 1391(c)(3). . . . Here, it is uncontested that the sole defendant in the case is a Swedish corporation. In light of this recent Federal Circuit case, the Court finds that venue is proper over [defendant] in this District."

Endo Pharmaceuticals Inc. v. Lupin Atlantis Holdings SA, 2-17-cv-00558 (TXED May 30, 2018, Order) (Gilstrap, USDJ)

YouTube Video Qualifies as Printed Publication

The court denied plaintiff's motion in limine to exclude a YouTube video as a prior art reference on the ground that it was not sufficiently accessible. "Although the Federal Circuit has not explicitly ruled that YouTube videos qualify, 'the statutory phrase "printed publication" has been interpreted to give effect to ongoing advances in the technologies of data storage, retrieval, and dissemination.'. . . Plaintiff then notes that the [video] reference was uploaded on a channel which 'was not associated with a trade group or website well-known to the relevant community' and which no person would have a reason to search for. . . . A familiar user would know that you don’t need to search for a particular channel to watch the videos uploaded on it. . . . . Surely, the effort involved in composing a basic search query and scrolling down the page a few times does not exceed the 'reasonable diligence' that the law expects of a hypothetical prior art subject."

HVLPO2, LLC v. Oxygen Frog, LLC et al, 4-16-cv-00336 (FLND May 28, 2018, Order) (Walker, USDJ)

Bad Faith Patent Prosecution Supports Award of Attorney Fees Even Without Inequitable Conduct

Following summary judgment of invalidity and an appeal, the court granted defendant's motion for attorney fees under 35 U.S.C. § 285 and found that plaintiff's conduct during prosecution supported a finding that the case was exceptional. "Defendant has not proved that the patents would not have issued but for the withheld data. . . . However, the Court does take note of the withheld data for purposes of the totality-of-the-circumstances inquiry. . . . There is also evidence of intent to deceive the PTO. . . . Even if this did not constitute inequitable conduct, the Court finds that the selective disclosure of data and evasive responses provided to the Examiner are evidence of bad faith leading to a finding that this is an exceptional case. . . . Plaintiff's failure to notify the Examiner that [its expert] was an employee, rather than an independent expert, is an indication that this is an exceptional case, litigated in an unreasonable manner. . . . Presenting the declaration from [its expert] which explicitly contradicted his publications, and the failure to present the [expert's] papers themselves, are evidence of subjective bad faith leading to the conclusion that this is an exceptional case."

Howmedica Osteonics Corp. v. Zimmer, Inc. et al, 2-05-cv-00897 (NJD May 23, 2018, Order) (Walls, USDJ)

Storage Units Do Not Qualify as Regular and Established Place of Business

The court granted defendant's motion to dismiss plaintiffs' patent infringement action for improper venue because defendant did not have a regular and established place of business in the district through its storage units. "⁠[T]he storage units identified by Plaintiffs are likely 'physical places in the district' prong, insofar as they are 'building[s] or []part[s] of a building set apart for any purpose.' Plaintiffs also demonstrated that Defendant pays for these storage units, leading to a conclusion that the storage units are 'of the defendant'. . . . The question is whether the storage units are 'location[s] at which one carries on a business.' They are not. While Defendant’s customer service reps may 'typically' retrieve materials from the storage units to visit customers within this District, no 'employee or agent of [Defendant actually] conduct[s] business at' the storage units, whatsoever."

CDX Diagnostics, Inc. et al v. United States Endoscopy Group, Inc. et al, 7-13-cv-05669 (NYSD May 24, 2018, Order) (Roman, USDJ)

Defense Counsel’s Twenty-Year Representation of Plaintiff, Spanning Seven Months of the Instant Case, Does Not Justify Disqualification

The court denied plaintiff's motion to disqualify defense counsel who had previously represented plaintiff for 20 years on intellectual property matters and concurrently represented plaintiff in patent prosecution matters during seven months of the instant case because counsel's misconduct did not taint the underlying trial. "⁠[Counsel] has violated the Connecticut Rules of Professional Conduct. . . . However, not every violation of the Rules of Professional Conduct warrants disqualification. . . . [Plaintiff] has not . . . made any effort to identify any way in which it has been prejudiced or negatively affected by [counsel's] actions, let alone in a way significant enough to taint the integrity of the trial. . . . [T]here is no evidence that [counsel] obtained any confidential information from [plaintiff] in the course of its representation regarding the patent prosecutions. . . . [T]he subject matter of the current litigation is a different patent than those [counsel] prosecuted on behalf of [plaintiff], which representation originated from a joint venture with [defendant]. . . . Any substantive activity in [plaintiff's] patent prosecutions was completed with the issuance of the patents, the last of which occurred . . . over a year before [plaintiff] filed this case. . . . The parties agree that the extent of [counsel's] representation of [plaintiff] during the period of concurrent representation was limited to [plaintiff's] payment of an invoice and [counsel's] payment of a maintenance fee on the patent on [plaintiff's] behalf."

Rio Brands, LLC v. GCI Outdoor, Inc., 3-17-cv-00786 (CTD May 22, 2018, Order) (Hall, USDJ)

Expert’s Reliance on Unaccepted License Proposal Does Not Render Opinion Unreliable

The court denied defendant's motion to exclude the testimony of plaintiff's damages expert regarding a reasonable royalty rate because his reliance on an unaccepted proposal was sufficiently reliable. "⁠[The expert] discussed several additional distinguishing characteristics between the contemplated cross-license and the hypothetical license, including that the cross-license was never executed, the negotiation was for a worldwide license, design-around costs, and the possible collaboration between the parties. . . . [Defendant] argues that [his] opinions regarding this contemplated royalty offer should be excluded, because offers -- particularly if never conveyed -- have little value. . . . [A]t the time of this offer, [plaintiff's predecessor] and [a third party] were discussing a cooperation agreement, a situation quite distinct from anticipation of litigation. [Defendant's] criticisms can be adequately addressed through cross-examination and the presentation of competing evidence."

Plastic Omnium Advanced Innovation and Research v. Donghee America, Inc. et al, 1-16-cv-00187 (DED May 22, 2018, Order) (Stark, USDJ)

Response to Interrogatory Seeking Conception and Reduction to Practice Dates May Not Identify Voluminous Documents

The court granted defendant's motion to compel further interrogatory responses regarding conception and reduction to practice. "⁠[Defendant] concedes that [plaintiff] has narrowed the dates (indeed, [plaintiff] has said it will use the filing date for [one patent-in-suit]) but the issue of [plaintiff] citing 'hundreds of documents' with no explanation of their relevance. . . . [Plaintiff] shall prepare a document entitled 'Date of Conception' as to the [other patent-in-suit]. The document shall list the documentary support for its date range and attach the relevant documentation -- limited to 10 documents -- which shall be highlighted. [Plaintiff] shall do the same for 'Reduction to Practice.' These documents will serve as a base line for conception and reduction to practice. Should [plaintiff] choose to amend the dates at some later date, it will have to be based on newly discovered evidence."

Magna Electronics, Inc. v. Valeo, Inc. et al, 2-13-cv-11376 (MIED May 18, 2018, Order) (Cohn, USDJ)

Ratification of Subsidiary’s In-District Facility Qualifies as Regular and Established Place of Business

The court denied a defendant's motion to dismiss plaintiffs' patent infringement action for improper venue because defendant had a regular and established place of business in the district by ratifying its subsidiary's manufacturing and research facility as its own place of business. "⁠[Defendant's] own corporate announcement and reports from San Antonio media reflect that [defendant] announced its move to San Antonio . . . more than 8 years ago. The court concludes that an 8-year presence reflects a regular and established place of business. . . . [W]hatever the lease arrangements are, the court concludes that [defendant] has ratified the San Antonio facility as its place of business. Also, [defendant] represents that it has a place of business in the district, as it lists the San Antonio facility as a place of business on its website, in the telephone and other web-based directories, and has placed its name on a large sign on the exterior of building."

Board of Regents, The University of Texas System et al v. Medtronic, Inc. et al, 1-17-cv-00942 (TXWD May 17, 2018, Order) (Yeakel, USDJ)

Technical Expert’s Indefiniteness Opinions Excluded as Irrelevant for Relying on Claim’s Intended Result

The court granted plaintiff's motion to exclude the testimony of defendants' technical expert regarding defendants' enablement and written description theories as irrelevant. "Defendants conclude the claim limitation doesn’t satisfy the written-description or enablement requirements because the reduction can be achieved in more ways than just reducing the thickness of the insulator. But the proper focus is on structure rather than the intended result. [The claim at issue] is directed to a device, and the specification describes an embodiment of that device . . . . While the limitation recites the result of selecting that range, that result is not a structural limitation of the claim. Because his opinion is based on an incorrect interpretation of the limitation, the Court will grant the motion and exclude as irrelevant [the expert's] opinion that the specification does not provide guidance as to how the parasitic capacitance is reduced."

Kaist IP US LLC v. Samsung Electronics Co., Ltd. et al, 2-16-cv-01314 (TXED May 17, 2018, Order) (Payne, MJ)

Disingenuous Licensing Discussions Sufficient to Support Willful Infringement Claim

The court denied defendant's motion to dismiss plaintiff's willful infringement claims for failing to sufficiently allege egregious conduct through defendant's licensing negotiations. "When considering [plaintiff's] allegations and other facts pled in the Complaint that show that [defendant] knew in detail about how it infringed each Asserted Patent as a whole, a reasonable inference can be drawn that [defendant's] licensing discussions were disingenuous. . . . As such, the Court finds that the Complaint contains sufficient facts from which a plausible conclusion could be reached that [defendant's] conduct went beyond those 'in a typical infringement case' and thus was egregious. . . . [T]o the extent that [defendant] is arguing that the allegations pertaining to the settlement discussions cannot lend any support to [plaintiff's] willful infringement claim at the pleading stage, the Court rejects that argument. Whether [plaintiff] has evidence to prove its claims is a matter for another day."

Finjan, Inc. v. SonicWall, Inc., 5-17-cv-04467 (CAND May 16, 2018, Order) (Freeman, USDJ)

Pain Treatment Patents Do Not Claim Unpatentable Law of Nature

The court granted plaintiff's motion for summary judgment because the asserted claims of its pain treatment patents did not encompass unpatentable subject matter and found that the claims were not directed toward a law of nature. "⁠[Two claims] each recites a 'method of treating pain in a patient having mild or moderate hepatic impairment,' and teaches using a specific extended release formulation of hydrocodone bitartrate that has a particular release profile. Although the inventions recited in those claims were based upon a natural law -- the physiological response to hydrocodone in individuals with or without mild or moderate hepatic impairment -- the claims do more than merely report those physiological responses. Rather . . . the claims asserted in this case describe a specific dosing regimen to treat a specific condition based on the patient’s medical status."

Pernix Ireland Pain Ltd. et al v. Alvogen Malta Operations Ltd., 1-16-cv-00139 (DED May 15, 2018, Order) (Bryson, CJ)

Genotyping Patent Invalid Under 35 U.S.C. § 101

Following a jury trial, the court granted plaintiff's motion for judgment as a matter of law because the asserted claims of plaintiff’s labrador retriever genotyping patent encompassed unpatentable subject matter and found that the claims were directed toward a natural phenomenon. "⁠[T]he patent utilizes a number of scientific terms which at first review appear difficult to understand and make the patent appear impressive on its face. However, when the language is explained, the patent simply states that the search for the mutation involves the laboratory examination of Labrador Retriever DNA, which resulted in the discovery of the mutation, which in combination with similar mutations of Labrador Retrievers who mates with a carrier results in offspring having a higher probability of inheriting the mutation. The mutation itself and the fact that it is inherited through male and female dog carriers mating are both natural phenomena."

Genetic Veterinary Sciences, Inc. d/b/a Paw Prints Genetics v. LABOklin GmbH & Co. KG et al, 2-17-cv-00108 (VAED May 14, 2018, Order) (Morgan, SJ)

Software Qualifies as "Article of Manufacture" for Disgorgement of Profits Under 35 U.S.C. § 289

Following a jury trial, the court denied defendant's renewed motion for judgment as a matter of law that plaintiff was not entitled to disgorgement damages under 35 U.S.C. § 289 for infringement of its design patents because plaintiff's software qualified as an article of manufacture. "⁠[Defendant] argues that [plaintiff's patents] claim a 'display screen' as their article of manufacture and, because [defendant] only presented evidence of profits from a software product and not a physical 'display screen,' it cannot recover disgorgement damages. . . . [Defendant] has already admitted that its products . . . infringe the [patents]. Thus, [defendant] has already admitted that there exists an 'article of manufacture' to which the patented designs . . . have been applied. Moreover . . . [s]oftware is 'a thing made by hand or machine,' and thus can be an 'article of manufacture.'"

Microsoft Corporation v. Corel Corporation et al, 5-15-cv-05836 (CAND May 11, 2018, Order) (Davila, USDJ)

$75 Million Jury Verdict Reinstated

The court granted plaintiff's motion to reconsider an earlier order granting defendant a new damages trial and upon reconsideration reinstated the jury's $75 million verdict because the extensive evidence of unaccused products was not reflected in the verdict. "⁠[Defendant's] complaint is that the damages model 'is flawed' and 'contrary to law' inasmuch as a patentee 'can only receive infringement damages on those devices that actually performed the patented method during the relevant infringement period.' Yet [defendant] was not assessed damages on unaccused products because the jury was instructed that lump sum damages are available only for 'products [plaintiff] has accused in this case.'. . . [Plaintiff] simply populated the 'book of wisdom,' with information about projected sales of both accused and unaccused products. . . . Although [defendant] presented the jury with damages estimates that accounted for future sales of unaccused products, the jury’s $75 million assessment is consistent with the court’s instruction to award damages only for accused products. . . . Thus, while the jury’s assessment includes damages for future sales of accused products, which by definition is what a lump sum payment reflects, the award did not necessarily include damages for future sales of unaccused products."

Ericsson Inc. et al v. TCL Communication Technology Holdings Limited et al, 2-15-cv-00011 (TXED May 10, 2018, Order) (Payne, MJ)

Damages Expert Precluded From Relying on a Settlement Agreement He Was Unable to Review Due to Protective Order Restrictions

The court granted in part plaintiff's motion to exclude the testimony of defendant's damages expert regarding prior settlement agreements because the expert was not authorized to review one agreement under the protective order. "Plaintiff contends that because [the expert] cannot review the terms of [a settlement agreement], 'he cannot offer any opinion about whether the terms of the [OpenKey] Settlement Agreement are a reliable indicator of a reasonable royalty.' . . . Defendant’s argument that [its damages expert] can determine the circumstances surrounding [a] Settlement Agreement from [plaintiff's damages expert's] report alone is flawed. Plaintiff notes that [its own] expert report does not disclose the full terms or circumstances of the [agreement], and points out that the report states that [plaintiff's expert] was unable to draw any meaningful conclusions from [the agreement] under the Georgia-Pacific analysis. Thus, it seems implausible that [defendant's expert] knew of the circumstances or even the terms of the [agreement]. Since [defendant's expert] cannot review the terms of the [agreement], [he] may not rely on the [agreement] in offering his opinion."

S3G Technology LLC v. UniKey Technologies, Inc., 6-16-cv-00400 (TXED May 8, 2018, Order) (Mitchell, MJ)

Pre-Alice Finding of Validity Collaterally Estops Defendant From Challenging Validity Under 35 U.S.C. § 101

The court granted plaintiff's motion for summary judgment that defendant's challenge under 35 U.S.C. § 101 was barred by collateral estoppel because a jury found the patent-in-suit valid in the parties' prior action. "While the Federal Circuit has yet to address squarely whether multiple theories of invalidity constitute 'different' issues for collateral estoppel purposes, the majority of courts that have considered the question view patent validity as a single issue. . . . [E]ven if [Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)] had constituted a change in the law, [defendant] does not explain how pre-Alice law would have precluded [it] from bringing a Section 101 defense. . . . There is no evidence that a Section 101 defense was completely unavailable to [defendant] under the framework set out in [Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1282 (2012)], or that such a challenge would have been futile prior to Alice."

XpertUniverse, Inc. v. Cisco Systems, Inc., 3-17-cv-03848 (CAND May 8, 2018, Order) (Seeborg, USDJ)

Plaintiff’s Former Officer and Lead Inventor Disqualified as Consultant for Defendant

The court granted plaintiff's motion to disqualify plaintiff's former officer/lead inventor of the patents-in-suit from consulting with defendant on non-confidential matters. "⁠[Defendant] contends that separate and apart from any confidential information he may have received from [plaintiff and its predecessor], [its consultant] has knowledge regarding the background and subject matter of the patents-in-suit that is not confidential. [Defendant] argues it has retained [him] to consult only about these matters, not confidential information or patent strategy. However, [plaintiff] need not show that [its former officer] has been retained to consult regarding [plaintiff's] confidential information or patent strategy, but need only show that he received confidential information 'that is relevant' to the current patent litigation. . . . Given that [the consultant] is an inventor of the technology at issue in this case, it is impractical to expect him to be able to parse 'the specifics of the knowledge [he] gained while working at [plaintiff's predecessor] and his knowledge generally.'"

Promptu Systems Corporation v. Comcast Corporation et al, 2-16-cv-06516 (PAED May 7, 2018, Order) (Sanchez, USDJ)

Working Closely With Corporate Affiliate Does Not Create a Regular and Established Place of Business Necessary for Venue

The court granted defendants' motion to transfer for improper venue because one subsidiary defendant's contacts with the district were insufficient to establish a regular and established place of business in the district for another subsidiary defendant. "Defendants concede that [one defendant] has a place of business in this district in the form of a retail store. . . . Defendants dispute some of [plaintiff's] allegations, but even if the court assumes that all of them are true, they show only that defendants are both subsidiaries of the same parent company and that they collaborate on matters common to both of them. That’s not sufficient to treat defendants as interchangeable for the purpose of determining whether each has a place of business in this district. . . . Because there is no authority for the view that venue is proper as to one corporation simply because that corporation 'works closely' with another corporation that may be sued in that district, [plaintiff] has failed to meet its burden to show that venue is proper in this district."

Unity Opto Technology Co., Ltd. v. Lowe's Home Centers, LLC et al, 3-18-cv-00027 (WIWD May 4, 2018, Order) (Peterson, USDJ)

Technical Expert Precluded From Offering Testimony at Odds With Plain and Ordinary Meaning of Patent Claim

The court granted in part defendant's motion to strike portions of the report of plaintiff's technical expert for applying improper legal principles. "The asserted claims require that each created reprogrammable communication protocol 'includes a command code set. . . .' The parties dispute the meaning of 'includes.' When asked whether a communication protocol that did not include a command code set would satisfy this claim limitation, [the expert] responded, '⁠[I]t’s a question of whether it’s capable of including a command code set that defines those signals to -- you have to have -- it needs to be capable.' That’s not the question. The plain and ordinary meaning of the phrase requires more than a mere capability that the communication protocols include a command code set: It requires actual inclusion. Accordingly, the Court will preclude [the expert] from advancing any argument that, with respect to this limitation, mere capability of inclusion is sufficient."

Salazar v. HTC Corporation, 2-16-cv-01096 (TXED May 3, 2018, Order) (Payne, MJ)

Ceasing Infringing Activity Eliminates Substantial Controversy Necessary for Declaratory Judgment of Infringement

The court granted defendants' motion to dismiss plaintiff's claim for a declaration of patent infringement for lack of subject matter jurisdiction. "Defendant, through its principal, declares under penalty of perjury that it has ceased the allegedly infringing conduct. . . . Defendant here has ceased the accused activity, employs a different design, and plans to destroy the prototypes. . . . [I]t is not clear that Defendant here stopped the accused activity prior to the commencement of the lawsuit. This is, however, a distinction without a difference. . . . Because Defendant has ceased the allegedly infringing activity, an opinion of declaratory judgment would amount to an advisory opinion based on hypothetical facts. Defendant has made sufficient representations to remove any reasonable apprehension of infringement. Further, Defendant is not currently infringing and no harm appears immediate."

Resh, Inc. v. Skimlite Manufacturing Inc. et al, 5-18-cv-00291 (CACD April 30, 2018, Order) (Bernal, USDJ)

Early Daubert Motion Permitted for Law Professor Expert

The court denied plaintiff's motion to strike defendant's expert report from a law professor, but allowed plaintiff to file an early Daubert motion. "Plaintiff, mindful that such reports have about as much chance of seeing the light of day as the Washington Generals did of beating the Globetrotters, wants to quash it now. Defendant points out that the usual procedure is to dispose of such issues by means of a Daubert motion. Plaintiff wants to resolve the matter through the more expeditious and less expensive discovery dispute procedure. Unfortunately, it really is not a discovery dispute. In order to avoid unnecessary expense, however, I will permit Plaintiff to file a Daubert motion now. . . . If the Generals win, I will then permit Plaintiff to file an expert report from a law professor in reply."

BASF Corporation v. Johnson Matthey Inc., 1-14-cv-01204 (DED May 1, 2018, Order) (Andrews, USDJ)

Production of Entire iOS and watchOS Source Code Not Relevant and Proportional to Infringement of Step Counter Patent

The court denied plaintiff's motion to compel production of the entire source code for two of defendant's operating systems because plaintiff failed to establish that the additional code was relevant and proportional to the needs of the case. "⁠[Plaintiff] asks that [defendant] produce the entire source code for the iPhone/iPad’s and [Apple] Watch’s operating systems (iOS and watchOS, respectively). . . . [Plaintiff's] claims relate solely to the [patent-in-suit], a patent for a step counter. Apple iPhones, iPads, and Watches encompass hundreds or thousands of features wholly unrelated to those claims. . . . [Plaintiff] intimates that the way a code review 'usually' works is that the inspecting party’s code expert may 'look at whatever he thinks relevant.' [Plaintiff] cites no authorities for this proposition. . . . If [plaintiff] believes those particular code files are relevant and that [defendant] should produce them, and if [defendant] disagrees, the parties must meet and confer in good faith to try to resolve the dispute. . . . But [plaintiff] may not circumvent this procedure and demand that [defendant] produce all of its [operating system] source code so that [plaintiff] can 'paw[] through [defendant]’s source code without limitation.'"

Uniloc USA, Inc. et al v. Apple Inc., 4-18-cv-00362 (CAND April 30, 2018, Order) (Beeler, MJ)

Counsel’s Failure to Investigate Plaintiff’s Ownership of Patent-in-Suit Justifies $360,000 Sanctions Award

The court granted defendants' motion for more than $360,000 in sanctions under Rule 11 and 28 U.S.C. § 1927 against plaintiff's counsel because plaintiff's standing allegations and pre-suit investigation were unreasonable. "⁠[Counsel] disregarded any reasonable inquiry into the ownership or assignment of the [patent-in-suit], and asserted this claim for infringement without any objectively reasonable basis for the allegation that [plaintiff] was the owner of the right to enforce the [patent] by assignment. . . . [Counsel's] alleged reliance on its client does not absolve it of any of the violations of Rule 11. . . . [Counsel] improperly withheld the purported assignment documents, drafted in March 2016, until March 23, 2017. . . . [Plaintiff's] alleged oral, exclusive license, even if it had existed since prior to the original Complaint, would not have cured the standing defect or altered that [plaintiff's] claim for infringement of the [patent] was subject to dismissal. . . . [Counsel's] pattern of conduct demonstrates bad faith or a disregard of attorney obligations in filing and pursuing claims, which is akin to bad faith."

Sub Zero Franchising, Inc. v. Frank Nye Consulting LLC, d/b/a The Arctic Scoop et al, 2-15-cv-00821 (UTD April 27, 2018, Order) (Jenkins, SJ)

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

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

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

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

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

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

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

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

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

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

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

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