Source: https://www.delawareiplaw.com/page/2/
Timestamp: 2019-04-20 12:24:22+00:00

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Chief Judge Stark recently was faced with a motion for final judgment under Fed. R. Civ. P. 58 following a jury verdict of induced infringement. The parties in the case agreed that the instruction given to the jury on inducement was erroneous in light of a related litigation between the same parties in which the Federal Circuit had ruled that the same instruction was erroneous. The patentee, Power Integrations, however, had not objected to the identical instruction in this case. Judge Stark, nonetheless, concluded that “in the unusual circumstances presented here its induced infringement instruction was plain error” and “it would be a manifest injustice . . . to uphold[ the] jury verdict.” Fairchild Semiconductor Corp., et al. v. Power Integrations, Inc., C.A. No. 12-540-LPS, Memo. Op. at 1-11 (D. Del. Mar. 16, 2018). Moreover, because “the Court [had] already determined that the jury instruction on active inducement was plain error that was prejudicial to Fairchild, resulting in a miscarriage of justice . . . [and] the Court [did] not believe it is highly probable that the error did not contribute to the judgment . . . [the Court therefore] order[ed] a new jury trial on the issues of induced infringement of the ’359 patent and damages.” Id. at 11-13.
Judge Richard G. Andrews recently granted a motion for summary judgment that the asserted claims of a patented “apparatus, method and database for control of audio/video equipment” is invalid under 35 U.S.C. § 101. D&M Holdings Inc. v. Sonos, Inc., C.A. No. 16-141-RGA (D. Del. Feb. 20, 2018). The Court agreed with the defendant that the claim at issue was “at most, directed to the automation process that can be (and has been) performed by humans,” such as when (1) a person chooses a particular DVD to watch by identifying its title, (2) the person determines, based on memory, whether he or she watched the DVD previously and, if so, whether he or she selected playback preferences, and (3) if the person recalls such playback preferences, selecting the same preferences before beginning to watch the DVD or, if no such preferences are recalled, the DVD plays with default preferences. Id. at 8. The Court thus viewed the asserted claim as “directed to the abstract idea of choosing to play back media with or without playback preferences.” Further, it “provides no inventive concept, and at most merely automate[s] the abstract idea through the use of a generic, conventional technology.” Id. at 12.
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In December 2016, a Delaware jury found that Gilead had failed to prove the asserted patent in this case was invalid and awarded damages of $2.54 billion. But Chief Judge Stark has now granted Gilead’s motion for judgment as a matter of law that the asserted claims are not enabled. Although Gilead also moved for JMOL or a new trial with respect to damages, Judge Stark denied that motion and a motion arguing that the asserted patent failed the written description requirement. Instead, Judge Stark found that because “the Structural Limitations [of the asserted claims] are satisfied by such a large number of compounds . . . the amount of experimentation to refine this broad set of compounds to those that also satisfy the Functional Limitations [of the asserted claims], given the limited teachings on this point in the patent and the state of the prior art, is an ‘undue’ amount. Thus, the only conclusion that can be reached based on the trial record is that the asserted claims . . . are invalid for lack of enablement.”Idenix Pharmaceuticals LLC, et al. v. Gilead Sciences, Inc., C.A. No. 14-846-LPS, Op. at 45-46 (D. Del. Feb. 16, 2018).
Judge Andrews recently issued a memorandum order ruling on the Defendants’ motion to exclude testimony of Plaintiffs’ damages expert in MiiCs & Partners, Inc., et al. v. Funai Electric Co., Ltd., et al., C.A. No. 14-804-RGA, Memo. Or. (D. Del. Dec. 7, 2017). The Defendants lodged several challenges to the Plaintiffs’ expert’s opinion. First, Judge Andrews found that, for one patent-in-suit, the expert’s use of a “5% to 10% cost-savings benefit” provided by the Plaintiffs’ technical expert “demonstrates that he properly apportioned damages and profits between the patented and unpatented features.” Id. at 4-5. For a second patent-in-suit, however, Judge Andrews found “no basis for concluding that he apportioned between the patented and unpatented features” because the “only place where [the expert] appears to consider the profit attributable to the inventions, as distinguished from unpatented features, is in his discussion of Georgia-Pacific Factor 13 . . . [which] lacks any meaningful analysis or attempt to quantify the portion of realizable profit that should be attributed to the patented feature of the smallest salable unit.” Id. at 6.
Moreover, the Defendants argued, and Judge Andrews agreed, that an unaccepted offer to license a portfolio of over 360 patents was not a reliable starting point for the hypothetical negotiation as to one patent-in-suit because it was only an offer, it was not a comparable number of patents, its timing suggested that it was litigation-influenced, and it involved different parties. Id. at 7-8.
Finally, Judge Andrews rejected the use of a “composite royalty rate,” which the Defendants characterized as “appl[ying] a royalty base that includes units accused under any asserted patent to a royalty rate with contributions from every asserted patent.” Id. at 10. This approach, Judge Andrews found, “assigns to each accused product the same per-unit royalty regardless of how many patents that product is accused of infringing.” Id. at 11. Judge Andrews also rejected several other arguments for excluding other portions of the proffered expert testimony.
In Sonos, Inc. v. D&M Holdings Inc. d/b/a The D+M Group, et al., C.A. No. 14-1330-WCB (D. Del. Dec. 7, 2017) (Apportionment Order), Judge William C. Bryson denied Plaintiff’s motion for leave to submit a second supplemental report from its damages expert because the supplemental report failed to conduct a proper apportionment analysis. The Court had previously excluded the expert’s first report due to a failure to apportion and because it therefore violated the entire market value rule. Apportionment Order at 1. The supplemental report looked to the least expensive accused product for a revised and reduced royalty base, in order to “to “account for additional, non-patented features and componentry associated with higher priced products.” Id. at 2 (quoting report). The Court concluded that the method still calculated the royalty based on the entire market value of the product where the least expensive accused product still contained features not covered by the patents. Id. at 3. The Court observed that “it appears that the [expert] regarded the effective reduction in the accused revenue resulting from that calculation as constituting apportionment because it reflects a reduction in the amount that he previously cited. While an apportionment would certainly produce a reduction, that does not mean that a reduction necessarily constitutes apportionment. Nothing in [the] report reflects an apportionment directed to the role of the patented features in driving demand for the product.” Id. at 3-4.
While the Court would therefore not permit Plaintiff to offer a royalty rate premised on the entire market value rule, the Court did permit Plaintiff to accept Defendants’ proposal for a reasonable royalty at trial. Id. at 4.
In a separate opinion issued December 8, 2017, Judge Bryson also excluded certain of Plaintiff’s proposed secondary considerations evidence of praise as hearsay (“Exhibits Order”). See Exhibits Order at 4-10. While the Court would permit evidence of industry praise, the Court excluded praise that included factual statements about the products that went beyond assertions of opinion. For example, statements that a product was “mind blowing” were admissible, but following statements that the product was the first of its kind to perform a function was a factual assertion offered for the truth of the matter asserted, and thus excludable hearsay. Id. at 6-7. Furthermore, some exhibits addressed praise of features of the product that were outside the scope of the asserted claims. Id. at 7-8. The Court also took Rule 403 into consideration and concluded that the prejudicial effect of such evidence outweighed its probative value. Id. at 8-9.The Court also ordered such statements redacted from exhibits that contained admissible evidence of praise. Finally, the Court ruled that “out-of-court statements by third-party declarants that [Defendants] or others copied [Plaintiff] are inadmissible hearsay.” Id. at 10.
Judge Andrews recently issued an order denying defendant’s motion to strike 60 pages of briefing on three Daubert motions. B. Braun Melsungen AG v. Becton, Dickinson and Company, No. 16-411-RGA (D. Del. Dec. 5, 2017). Judge Andrews denied the motion because, even though he wished “Plaintiffs had exercised some judgment about which Daubert issues were worth pursuing,” there is no rule preventing Plaintiffs from filing 60 pages of briefing. Judge Andrews added, however, that Defendants can take heart in the fact that “excessive briefing of Daubert issues is usually a sign of weakness, not of strength.” Id. at 1.

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