Source: https://mcsmith.blogs.com/eastern_district_of_texas/eastern-district-of-texas-tyler-division/
Timestamp: 2019-04-24 10:48:28+00:00

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Injunction Junction - What's Your Function?
I can't think very long about injunctive relief without hearing that the Schoolhouse Rock classic "Injunction Junction, What's Your Function?" If you weren't blessed to get to hear these classic the first time around, take a few minutes to listen. It doesn't rise to the heights of the episodes on the Preamble (which we used to sing to Professor Jordan in Policy Development class in graduate school whenever she said the words "The Constitution..." (okay, try to picture Barbara Jordan saying "The Constitution ..." with that voice of hers and a dozen students starting singing "We the Peo-puull, in ooorder to form a more Perrfect Yewn-Yun..." Trust me, it was just the best. Ever.
Or the kingfish "I'm Just a Bill (Sittin' on Capitol Hill)" (hysterically parodied on SNL recently by comparing it to an executive order) but it's still up there, as ear worms go.
The function of pretrial injunctions is, candidly, not much in most patent cases because the standard is so high. In one conference on the issue I heard a judge analogize the likelihood of one being granted to that of the sun rising in the west. But a couple of recent opinions granting injunctions underscore that they still can still play a role in the right cases.
In the Mylan v. Aurobindo Pharma case, Judge Payne granted the plaintiff's motion, finding that it had established the four factors of (1) likelihood of success on the merits, (2) likelihood of irreparable harm; (3) balance of equities tipping in its favor; and (4) injunction is in the public interest. But it took a while to get there - after eight pages of preliminaries, Judge Payne spent 36 pages on likelihood of success, analyzing claim construction, infringement and the asserted defensive issues (invalidity, etc.), then another five pages on the three other factors before concluding that an injunction barring the defendant's sale of isosulfan blue formulations used in mapping the lymphatic system was appropriate. (I knew I was seeing a gap in the shelving next to dandruff shampoos. Now I know why).
Similarly, in Tinnus v. Telebrands, Judge Love referenced an earlier-issued injunction involving a manufacturer of an accused product "Battle Balloons" and considered the effect of extending the injunction to the remaining stock of these play aids held by various retailers (estimated at 200,000 units). The Court concluded that the injunction should be extended to existing stock at the various retailers.
So they do get issued. And these two opinions provide a good summary of caselaw on when.
One of the effects of O2 Micro is that the raising new claim construction issues on the eve of a trial is unfortunately not terribly rare. But few cases present a situation like this one where a party's rebuttal expert reports served on the eve of trial triggered a complaint that they raised eleven (11) new claim construction issues, as well as three other broader ones.
In reading the latest opinion by Judge Love in the Chrimar case , I had this mental image of a pitcher throwing a dozen balls at the same, forcing the umpire to make a dozen calls simultaneously.
In general, the motions were denied where they raised arguments that were inconsistent with the Court's prior constructions, with the Court at some points noting that that "time and time again" it had resolved the dispute and yet the expert was continuing to include arguments that had been previously rejected. It did note several times that the fact that an expert was opining using a claim term that term hadn't been identified for construction wasn't a basis for exclusion per se, and that some issues were simply disputes as to whether certain claim elements were met, not claim construction disputes. According this "cross-examination" business was the way the issue should be handled. There were some instances where an additional claim construction might be necessary, and the court (I'm between the words "reluctantly" and "exasperated" here - will update when I decide which fits better) provided a framework for any such challenges.
Remember that case I posted on yesterday where the two defendants were seeking a severance, and the court denied it, subject to addressing the issue at the pretrial conference? Well, this is a different case in which the same plaintiff sued a number of other defendants, but in separate actions this time, and sought an order consolidating all of these actions for a single trial.
Plaintiff Chrimar argued that consolidation for trial was appropriate because all of its claims are related to the same IEEE standard, all Defendants’ accused products allegedly comply with the standard, some Defendants sell products sold by another Defendant, the accused products are all similar, some Defendants have overlapping subcomponents, the damages period for each Defendant is the same, Defendants share certain experts, and Defendants share overlapping defenses and counterclaims.
"Ultimately, none of the similarities pointed to by Chrimar are sufficient to pass the transaction and occurrence test set forth in § 299(a). While there will be some overlap as to certain defenses and witnesses, the actual questions of infringement and the amount of damages (both the appropriate royalty rate and base) are indisputably different among the Defendants. For these reasons, the Court finds that Chrimar has failed to show that joinder is proper under § 299.
Moreover, the Court finds that the similarities pointed to by Chrimar do warrant any special circumstances to consolidate all the Defendants for a single trial under the Court’s discretionary authority.
A Tyler jury in Magistrate Judge John Love's court returned a verdict in Chrimar v. Alcatel-Lucent Enterprise, USA, Inc. last week. The defendant had stipulated to infringement, so the jury was just presented with invalidity, damages, and a couple of enforceability theories. The jury found that the claims hadn't been shown by clear and convincing evidence to be invalid, set damages at $324,558.34, and parenthetically noted that this was $1.2067 per part. It went on to find that Chrimar had not been shown to have committed fraud on the defendant, nor had it breached a contract with the IEEE. Had it answered "yes" to the last question it would have answered another question asking it where the defendant was a third party to that contract.
A Tyler jury in Judge Rodney Gilstrap's court returned a noninfringement verdict in favor of defendant Friday afternoon in a case involving expandable interveterbral implants (I didn't check to see if Dr. Octavius was the inventor or just another piece of prior art). There were three claims across two patents.
The case has a few interesting pretrial rulings by Magistrate Judge Mitchell which were subsequently adopted by Judge Gilstrap, including a grant of summary judgment as to the plaintiff's doctrine of equivalents claims on one of the patents, with a denial on the other, as well as the grant of a motion to exclude the plaintiff's damages expert's reliance on a prior settlement agreement and after that was excluded, on the jury verdict in the same litigation.
I was also pleased to see something I was just talking about a couple of weeks ago in some brief remarks I prepared for some young lawyers with tips on motions in limine. One of my suggestions was to have a set of disputed motions in limine, with an eye towards Judge Schroeder's rule that there be no more than ten whether you're before Judge Schroeder or not, as well as a set of agreed ones, since it's not a bad thing to have a court order backing up parties' agreements (trust me on this). Judge Mitchell's order resolves the disputed ones, and then includes the agreed topics so everyone has a handy reference as to what's in and what's out.
That's not just for us OCD types - I have been in trials where a lawyer who was brought in late in the game to try a case saw the court's rulings on the disputed motions, but blew right through an agreed one, probably because the only place it was memorialized was in correspondence or perhaps the pretrial conference (which the lawyer wasn't present for) transcript. When questioned by the judge, the lawyer admitted as much, and the judge docked his client's time at trial fifteen minutes. When you only have 11-13 hours a side (I can't remember what we had there, but it was probably 13 and this was halfway through the evidence) and time for each witness is carefully budgeted, that's a painful loss. So including it in an order, as Judge Mitchell did, is a very helpful way to make sure that everyone is one the same page - literally.
Few issues are of more interest to patent practitioners in the Eastern District these days than rulings on motions for attorneys fees under section 285. Of course both prevailing plaintiffs and defendants can seek an award of fees under Section 285 if the statute's standards are met, as recently clarified by the Supreme Court in Octane Fitness. And in cases where either side's positions are so weak as to make a fee award likely if the case runs its course, both might be well-advised to consider the old Cherokee proverb to the effect that when the horse dies, it's time to get off.
But as with most other areas of civil law, since approximately 94% of all cases filed are either settled or dismissed (voluntarily or involuntarily) only the small percentage of cases which result in a resolution on the merits either at trial or on summary judgment, or which resulted in a settlement which did not preclude the filing of a section 285 motion, can potentially generate a Rule 285 motion and decision. Thus the size of the Eastern District's patent docket means that it is one of the few venues in the nation that has a sufficient number of cases to generate a relatively steady stream of rulings under Section 285. This is helpful because when the same judge is ruling a motions under the same law, at least the variables are reduced to the facts of the operative cases, and not the judge's experience with patent litigation or subjective beliefs as to when a particular set of facts does or doesn't rise to the level of "exceptional case" - a decision the Supreme Court has recently held is subject to review only for abuse of discretion. So it's very interesting to see when the same judge that has rejected a request for fees in one case finds that they are appropriate in another.
One of these situations was recently presented in Georgetown Rail Equipment Company v. Holland, L.P. in a case dealing with railroad track inspection technology. This was a competitor case, and a rare instance of a patent case generating injunctive relief during the pendency of the case, as in early 2014, Judge Davis found that all the relevant factors supported entry of a preliminary injunction. The case proceeded to trial in April 2015, and the Tyler jury found infringement, willful infringement, and assessed damages of $1,541,333, which was the exact amount the plaintiff sought. Last month while I was on vacation Judge Schroeder ruled on the postverdict motions, including not just the usual JMOLs, but also motions for a permanent injunction and for fees under Section 285.
The Court also found the infringement to be willful, noting in its analysis of the objective prong of the test that the defendant's noninfringement defenses through trial were unreasonable, and that despite seeking an obtaining early claim construction and moving for summary judgment of noninfringement, none of its claim constructions were adopted (the order found them "self-contradictory"), and its motion was denied. It further noted that the defendant's fallback position of divided infringement following claim construction was wrong as a matter of law, noting that it had denied summary judgment on that ground as well as a request to file a third motion on similar grounds. The defendant then proceeded to argue divided infringement to the jury anyway as if this was a method claim, despite the charge to the jury submitting the case as a system claim.
The defendant argued that the fact that the plaintiff did not move for summary judgment precluded a finding of willful infringement but the Court disagreed, noting that the plaintiff did not receive the source code until after the deadline to file letter briefs for summary judgment. In light of this, the Court concluded that the plaintiff had produced clear and convincing evidence of willfulness. The Court agreed that "simply because a defense to infringement proves to be unsuccessful does not make that defense unreasonable. However, as has been demonstrated above, Holland continued to rely on arguments through trial that were substantially weak and rejected time and again."
Analyzing the Read factors, the Court found that that some- the existence of "strong evidence of copying", no good faith belief of noninfringement, and an attempt to needlessly multiply proceedings and prolong the litigation (although no litigation misconduct) supported enhancement, and various other factors either slightly supported enhancement or were neutral. With three factors supporting, three slightly supporting, and three neutral, the Court declined to enhance the $1.5 million award to $4.6 million, but did enhance it by $1 million for a total of $2,544,333.
Judge Schroeder noted that a willfulness finding supports a finding of exceptional case, and also addressed specific "glaring examples" of litigation strategies by the defendant that multiplied the proceedings and needlessly increased costs. As these are something readers may want to write down in ink, I have noted them below, with a facepalm reference because I just couldn't help myself.
"Significant disparities" between a declaration and the witness' testimony at the preliminary injunction hearing.
Producing source code it claimed made clear that the claim of infringement was sanctionable, then later challenging its authenticity.
Continuing to asserted divided infringement of a method claim at trial after the Court ruled it was a system claim.
Moving to strike plaintiff's expert's reliance on articles, website pages & other "irrelevant hearsay" despite FRE 703, then following up with a limine motion and threats of sanctions on the same grounds after the motion to strike was denied.
"It should be noted that none of Holland’s actions, in isolation, was so egregious as to make this case exceptional," Judge Schroeder wrote. "Though unfortunate, there is nothing “exceptional” about a party resisting its discovery obligations, maintaining already rejected objections to exhibits or testimony into trial, filing weak Daubert requests, or even making repeated Rule 11 sanction threats. However, when a party does all of these things, and continues to raise rejected arguments that are found to be objectively unreasonable, the Court can only conclude the party needlessly multiplied the proceedings at the expense of the opposing side and the Court. This Order should not be read to condone a “kitchen sink” approach to a motion for fees—but in the rare case where the court and jury have found willful infringement and the accused infringer engaged in conduct that needlessly drew out resolution of the issues to the extent that is present here, the totality of the circumstances warrants the award of fees."
The plaintiff sought and the Court awarded $1,566,540.35 in fees, which the Court noted was below both the Texas average of $2 million and the national average of $2.1 million. The defendant did not contest the reasonableness of the fees (although the Court noted that it did object to cost amounts as small as $1.76 which the plaintiff "easily substantiated").
The Court concluded with a brief observation after reviewing the defendant's reference to its Rule 68 offer of judgment where it offered to abide by a permanent injunction of its own terms and the plaintiff's explanation of why that offer was rejected.
Having agreed with the jury that Holland willfully infringed, the Court cannot from its current vantage look back over the litigation and determine precisely when Holland should have conceded to Georgetown’s demands or what the exact form of those demands should have been. Hindsight bias clouds a fair and accurate assessment. However, given the history between these two companies, the weakness of Holland’s litigation position, and the fact that the jury found willful infringement, the Court can say with confidence that Georgetown has not compromised its position by viewing the Offer of Judgment as too little, too late.
An important issue to many practitioners whose clients have confidential or trade secret information is the ability to protect that information from public disclosure. Several weeks ago Congress enhanced the protections available for trade secrets by passing the Defendant Trade Secrets Act. But when confidential information, including trade secrets, becomes an issue in court proceedings, the parties and the court have to balance the owners' interest in protecting that confidential information against the public's interest in open trials - an example being Judge Craven's recent opinion in favor of an intervenor that I posted on a couple of weeks ago.
Requests to seal or otherwise protect certain information of a confidential and/or proprietary nature from public disclosure during a hearing or trial should be made before the public disclosure of the information.
Any such request must demonstrate: a) that the information sought to be protected is of such a sensitive nature that its disclosure creates a risk of harm that outweighs the strong presumption in favor of public access to judicial proceedings; and b) that the parties have met and conferred in good faith concerning the manner in which the sensitive information will be presented at the hearing or at trial, with the goal of minimizing the need to seal the record and the courtroom.
Except for requests to redact information referenced in Fed. R. Civ. P. 5.2(a), requests to seal or protect information after its public disclosure at a hearing or trial must, in addition to the preceding requirements, show good cause why the motion was not made in advance of the disclosure.
The order applies to all pending cases as well as cases which may be assigned to the judges in the future.
Accompanying the order is a useful commentary that sets forth the basis for the Court's reference to a "strong presumption in favor of public access to judicial proceedings," including citations to the U.S. Supreme Court, and the Fifth and Federal Circuits. "The U.S. Supreme Court has emphasized the societal importance of open trials," the Court notes, "writing that they 'assure the public that procedural rights are respected, and that justice is afforded equally' and cautioning that closed trials 'breed suspicion of prejudice and arbitrariness, which in turn spawns disrespect for law.' See Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 595 (1980)."
The commentary recites the history of redaction rules locally, focusing on the 2008 enactment of CV-5.2, and the resulting influx of post-hearing requests to redact or "seal" confidential information other than the personal identifiers set out in Fed. R. Civ. P. 5.2. It then states that the new rule "is based upon and codifies the existing case law which balances the interests of parties seeking to protect confidential information against the strong presumption in favor of a common law right of public access to court proceedings noted above," and that it does so by providing guidance as to when such requests should be made, and what standards apply to such requests.
1. When Should the Request Be Made?
The standing order makes clear that requests to seal or otherwise protect information from public disclosure during a hearing or trial should be made before the public disclosure of the information. This avoids the current problem it identifies of parties "mistakenly assuming that redaction and sealing requests can be made after the fact, as is the case for requests to redact information referenced in Fed. R. Civ. P. 5.2(a)." This timing also gives parties the maximum opportunity to work out sealing and redaction issues by agreement, using alternative means of presentation (redactions of numbers or dollar amounts or party names, or restrictions on use of information on slides are some common methods).
Requests to seal or protect information after its public disclosure at a hearing or trial are not prohibited under the order, but must, in addition to the normal requirements, show "good cause" why the motion was not made in advance of the disclosure. "Failing a clear showing of good cause," the commentary states, "such requests should be denied."
2. What Are the Standards for Sealing/Redaction?
The standards for sealing and redaction are well-established, as noted above, and the above standing order makes no substantive change to them, but instead simply brings them to the parties' attention. Again, the latter requirement gives the parties and the Court the ability to utilize alternative methods of presentation to avoid unnecessary sealing of the courtroom, and redactions to the transcript, as well as opportunities to minimize the inherent courtroom disruptions that the sealing process includes.
I mentioned the other day that my "unscientific guess" was that on average, locally one 101 dismissal generates about half a dozen dismissed cases. Well, it's a little more than that, at least in some cases. Yesterday Judge Schroeder affirmed a report and recommendation recommending dismissal on 101 grounds by Magistrate Judge Love. The report was objected to by the plaintiff and supported by the remaining eight (8) defendants, out of the original 54 or so that the plaintiff had sued.
Judge Schroeder rejected the argument that Judge Love should have converted the motion to a summary judgment motion and considered a proffered expert declaration, noting a subsequent Federal Circuit case that held that "[t]he mere existence in the record of dueling expert testimony does not necessarily raise a genuine issue of material fact." Judge Schroeder also affirmed Judge Love's finding that the patent was directed to an abstract idea, and that it didn't contain an inventive concept that transformed the nature of the claims into patent-eligible subject matter.

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