Source: https://www.delawareiplaw.com/category/leonard-p-stark/
Timestamp: 2019-04-20 12:31:42+00:00

Document:
In a Memorandum Order unsealed on February 19, Chief Judge Stark addressed disputes over Plaintiff Onyx’s privilege log. Before making rulings on specific documents reviewed in camera, Judge Stark ruled generally as to the extent of the applicable privilege. Judge Stark first recognized that the Federal Circuit has recognized a privilege between non-attorney patent agents and their clients, but that such a privilege is narrow. Onyx Therapeutics, Inc. v. Cipla Limited, C.A. No. 16-988-LPS, Memo. Or. at 3 (D. Del. Feb. 15, 2019) (citing In re Queen’s U at Kingston, 820 F.3d 1287, 1301-02 (Fed. Cir. 2016)). Although it is clear that privilege attaches only to communications that are “reasonably necessary and incident to the prosecution of patents,” the caselaw on this point is “sparse.” Id. “In the instant case, the circumstances the Court confronts appear to involve scientists who identified potential alternative formulations and – before finalizing a research plan, before undertaking testing or viability studies, before reducing their ultimate invention to practice, and well before they committed to having claims drafted so a patent application could be prosecuted – consulted a patent agent for guidance, evidently for assistance in understanding the patent landscape in order to direct their efforts toward results that were not already the subject of prior art claims. In the Court’s view, based on the record before it, such communications with a patent agent are not ‘reasonably necessary and incident to’ the ultimate patent prosecution. While such communications would almost certainly be within the scope of attorney-client privilege, here they are not protected by the narrower patent-agent privilege.” Id.
Onyx Therapeutics, Inc. v. Cipla Limited, C.A. No. 16-988-LPS, Memo. Or. (D. Del. Feb. 15, 2019).
In September 2017, Chief Judge Stark denied a motion filed by Mylan Pharmaceuticals Inc. (MPI) to dismiss for lack of proper venue in light of TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514, 1519 (2017). That dismissal was without prejudice because Judge Stark found that he could not determine whether venue was proper on the record before him. Accordingly, the Court ordered expedited, venue-related discovery into whether MPI had a “regular and established place of business,” as required by 28 U.S.C. § 1400(b). After expedited discovery, including three hearings of various discovery disputes, MPI renewed its motion to dismiss. On October 18, Judge Stark issued his decision on the renewed motion.
Although discovery was directed to the “regular and established place of business” inquiry under the second prong of § 1400(b), Judge Stark’s decision addressed both prongs of § 1400(b). Under the first prong—“where the defendant resides”—Plaintiff BMS argued that Delaware was the proper venue, despite the parties agreeing that MPI is incorporated in West Virginia. Specifically, BMS argued that the Delaware incorporation of a separate Mylan entity could be imputed to MPI as a corporate affiliate that had disregarded corporate formalities of separateness. Memo. Op. at 3-5.
Judge Stark “agree[d] with BMS that residency may be imputed under the first prong of the venue statute,” id. at 5, but emphasized that the “Court is not holding that one entity necessarily is a resident of two places . . . [i]nstead, the Court is allowing for the possibility that, for the purposes of venue in patent cases, there are circumstances under which it is appropriate to impute the residence of one entity to another entity – where there is an alter ego relationship or piercing of the corporate veil – and in those circumstances the law allows the Court to treat one entity as if it were a resident in a second district.” Id. at 6.
TC Heartland LLC v. Kraft Food Group Brands LLC has created more questions about venue than it answered (although it obviously answered a very important one), and one significant new question is, what constitutes a “regular and established place of business” under 28 U.S.C. § 1400(b). Chief Judge Stark recently attempted to answer that question in his September 11, 2007 decisions in Boston Scientific Corp. v. Cook Group Inc. and Bristol-Myers Squibb Co. v. Mylan Pharmaceuticals Inc. Only days later, the Federal Circuit issued its decision in In re Cray, restricting the meaning of “regular and established place of business.” This post briefly analyzes the state of Judge Stark’s concept of “regular and established place of business” in the wake of In re Cray.
In Boston Scientific Corp., Judge Stark, among other things, described the application of “regular and established place of business” as a “fact-intensive inquiry focused on whether the defendant does its business in this District through a permanent and continuous presence here.” He explained that a formal office or store is not required to meet this test, but a physical presence is needed. He then identified factors that would not, at least alone, rise to the level of a permanent and continuous presence. They are: (1) doing business in Delaware or being registered to do business in Delaware; (2) maintaining a website accessible in Delaware for online sales; (3) shipping goods to unaffiliated individuals or third-party entities in Delaware; (4) making sales in Delaware; (5) employing a sales representative who occasionally works in Delaware; and (6) previously employing a sales representative who lived in Delaware, but had no responsibility of sales in Delaware. See Boston Scientific Corp. v. Cook Group Inc.
In his other venue decision of the same date, Bristol-Myers Squibb Co., Judge Stark considered connections between the defendant and Delaware in deciding that he could not conclude without further information that the defendant did not have a regular and established place of business in Delaware. Those factors include: (1) the defendant is part of a family of more than 50 companies, of which more than 40 reside in Delaware; (2) the defendant does business and makes sales in Delaware; (3) the defendant is in the business of provoking patent infringement lawsuits as part of the process of bringing its products to market; (4) the defendant has appeared in more the 100 patent infringement cases in Delaware in the last ten years; (5) the cases are not “run-of-the-mill” litigation and may or may not be of material significance to defendant’s overall business; (6) the defendant has obtained the right to do business in Delaware including for pharmaceutical manufacturing, distribution and sales; (7) the defendant is licensed as a “Pharmacy-Wholesale” and “Distributor/Manufacturer CSR,” allowing it to distribute and manufacture controlled substances within Delaware; and (8) the defendant targets some Delaware physicians.
Chief Judge Leonard P. Stark recently considered the parties’ motions in limine in advance of the trial between Princeton Digital Image Corporation and intervenor Adobe Systems Inc. Princeton Digital Image Corproation v. Office Depot Inc., et al., No. 13-239-LPS (August 9, 2017). For example, Judge Stark denied Adobe’s MIL to preclude a Princeton witness from testifying “about his belief that images appearing on the websites of Adobe’s customers were dynamically generated ‘on the fly.'” Id. at 1. Judge Stark found that the testimony was admissible because Princeton did not seek to admit the testimony to prove that defendants’ websites “actually work in a particular way[,]” but offered the testimony to establish why Princeton “believed it had a viable infringement claim” and therefore did not breach a “covenant-not-to-sue in good faith[.]” Id. Judge Stark also denied Princeton’s MIL to exclude exhibits relating to settlement because Adobe offered the exhibits “to support its claim that [Princeton] breached the covenant-not-to sue by bring and maintaining suits against Defendants and did so in bad faith[.]” Id. 3.
alleged by Future Link (if proven) to be ‘egregious … wanton, bad-faith, deliberate, consciously wrongful, flagrant, or – indeed- characteristic of a pirate'”; at this stage the Court could not grant summary judgment of no willful infringement. Id. at 28-29 (quoting Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1932 (2016)). Judge Stark found, however, that summary judgment of no unclean hands was appropriate because Future Link had failed to come forward with sufficient evidence to support a finding that Intel acted with unclean hands. Id. at 29.
Chief Judge Leonard P. Stark recently issued a memorandum order analyzing waiver of attorney client privilege and work product protection. At issue was the plaintiff patentee’s corporate representative, who had not answered certain questions during a deposition, and certain documents withheld from discovery and interrogatory responses. The defendant argued that the all of this discovery should be made available both because the plaintiff put its “state of mind at the time it filed the underlying infringement suits” at issue and because the plaintiff had “selectively disclosed some attorney-client communications and documents prepared in anticipation of litigation, thereby waiving privilege with respect to communications and documents related to the same subject matter.” Judge Stark found that “this combination – [the plaintiff’s] contention that it brought and litigated the infringement actions in good faith, along with [its] selective use of privileged materials to support that assertion – waives privilege.” Princeton Digital Image Corp. v. Office Depot Inc., C.A. No. 13-239-LPS, Memo. Or. at 1-2 (D. Del. Aug. 1, 2017).
In advance of the pre-trial conference in Greatbatch Ltd. v. AVX Corporation, et al., C.A. No. 13-723-LPS, and in addition to resolving a number of rulings regarding disputes over the pre-trial order and trial logistics, Chief Judge Leonard P. Stark ruled on the parties’ motions in limine. Greatbatch Ltd. v. AVX Corporation, et al., C.A. No. 13-723-LPS (D. Del. July 20, 2017). The Court first granted Plaintiff’s motion to preclude Defendants from presenting the testimony of a certain witness by deposition. This witness had been deposed by Plaintiff, but prior to trial Defendants had terminated the relationship with the witness, he was unavailable, and Defendants never had an opportunity to question the witness as to the circumstances of his termination, “which appears to have been related to conduct that may be probative of issues that are the subject of the forthcoming trial.” Id. at 3-4. To allow the deposition testimony “would leave [Plaintiff] with no fair opportunity to allow the jury to evaluate [his] credibility.” Id. at 4.
The Court granted Defendants’ motion to preclude “evidence or argument concerning indemnification or damages” because damages and indirect infringement were not at issue in the upcoming trial, and the evidence’s minimal probative value was thus outweighed by the risk of juror confusion and unfair prejudice. Id. at 6. The Court also granted Defendants’ motion to preclude evidence or argument of “infringement or copying of patents or by product not at issue at the forthcoming trial, concluding that “[s]uch evidence is not relevant [infringement]. There is no need for the jury to learn of the fact that the 2016 trial occurred nor its outcome. Even were there some relevance to the evidence at issue in this motion, it would be substantially outweighed by the risk of unfair prejudice to [Defendants], particularly as it would create the possibility of the August 2017 jury deferring to the conclusion of the January 2016 jury that AVX is an infringer, and of confusing the jury.” Id. at 6-7. On the other hand, the Court would later consider Plaintiff’s arguments for why the same evidence should be admitted during the willfulness portion of the trial, should that phase be necessary. Id. at 7 n.5.
The Court also denied several of the parties’ motions to preclude evidence that it concluded was relevant to infringement, finding that the evidence’s probative value was not outweighed by the potential for prejudice or juror confusion. See id. at 5-7.

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