Source: https://www.patdek.com/blog/category/court+decisions
Timestamp: 2019-04-20 06:39:13+00:00

Document:
In Enfish v. Microsoft, the Federal Circuit ruled, under section 101 and in accordance with Alice, that "software can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route."
In Positive Technologies, Inc. v. Sony Electronics, Inc. (January 28, 2013), Judge Illston (Northern District of California) granted Defendants Amazon.com, Inc.'s and Barnes & Nobles, Inc.'s motion to amend their invalidity contentions to add "conforming amendments" and "new-art amendments". Both amendments are said to relate to the Court's claim construction order. The Court focuses on the two aspects of good cause for the proposed amendments, including diligence in discovery the new information and the passage of time in seeking to add the new information to the contentions once discovered. Defendants argue that the amendments, particularly the new prior art, relate to an expansive claim construction concerning two types of devices covered in the Court's claim construction order. Although six months elapsed between the claim construction order and when the Defendants located the new prior art, the detail surrounding Defendants' efforts appears to have persuaded the Court the allow the proposed amendments. In this case, the Court ruled that since fact discovery had not yet closed, and in light of Plaintiff failing to articulate whether the prior art was relevant, whether Defendants were engaging in "gamesmanship" for the amendments, and what type of prejudice would result to the Plaintiff, the Court permitted the proposed amendments.
Takeaways - it appears to be increasingly relevant to track the timing contention efforts once the initial contentions have been served. Details on these activities remain important to the Court when considering proposed amendments to invalidity contentions.
must first consider whether [Defendant] Edwards acted diligently in discovering the bases for the amendment and whether Edwards timely moved for leave to amend.
The Court analyzed when the references were first identified by the Defendant, and then how long thereafter that the motion for leave to amend was filed. As for prejudice, the Court noted that Plaintiff Medtronic has taken the position that is own infringement contentions are "preliminary," and thus it would be unfair for Medtronic to reserve its right to amend, while not granting that same benefit to Defendant.
The Court rejected this argument reasoning that the claim construction briefing is not due for several months, the trial is more than a year away, and further requests to supplement will require additional motion practice. (Order at 6-7).
Takeaways - Diligence is the main focus of these types of motions. Again, however, we see the consideration of a "claim construction" impact when evaluating a proposed invalidity contention supplement. This prejudice to the claim construction process seems to be the main argument raised by a plaintiff when facing supplement requests.
In CardSoft, Inc. v. VeriFone Systems, Inc. (May 28, 2012), Judge Payne (Eastern District of Texas) denied Defendant VeriFone's request to supplement its invalidity contentions to add two additional prior art references. In denying the requested supplement, the Court focuses on Patent Local Rule 3-6(b) of the Eastern District of Texas and notes that amendments to contentions require a "showing of good cause." (Order at 1). The four standard factors underlying a good cause analysis included: (1) explanation for party's failure to timely move for leave to amend; (2) importance of the amendment; (3) potential prejudice resulting from amendment; and (4) availability of continuance to cure prejudice. The Court then determined that the defendant was not diligent because it should have investigated prior art processing terminals based on plaintiff's identification of alleged infringing products.
The Court is not satisfied that VeriFone acted diligently to discover the Omni 300 and OTA prior art. These references are related to VeriFone's own products, which it should have uncovered even if CardSoft never accused the Omni 3200 payment terminals of infringement. Furthermore, it took VeriFone nearly eight months to produce the references, and then another four months to disclose its invalidity contentions based upon the references. The Court is not persuaded that this shows diligence on VeriFone's part. Verifone's lack of an adequate explanation to explain its delay weighs strongly against granting leave.
The importance of these references are quite clear, which weighs in favor of granting VeriFone leave to amend. However, their importance only adds to the prejudice suffered by CardSoft because it was deprived of a meaningful opportunity to consider these references during the claim construction process. Because claim construction was nearly over by the time VeriFone disclosed its invalidity contentions based on the Omni 300 and OTA prior art, and claim construction is now complete, a continuance is not available to cure CardSoft's prejudice.
If the impact on claim construction was not an appropriate factor for invalidity contention supplements, there would be little, if any, prejudice to CardSoft. Maybe the supplement request would have been granted. As we previously suggested here and here, the link between invalidity contentions and claim construction prejudice is tenuous. In this case, the prior art is not part of the intrinsic evidence, and the court noted the importance of the prior art references, yet the supplement request was denied. Although claim construction was concluded, should that fact really impact the inclusion of additional invalidity contentions? The claims mean what they mean. If the claims encompass the prior art then it is what it is.
Takeaways - Diligence is the paramount consideration for supplemental contentions. This ruling indicates that although Defendant VeriFone continued its prior art investigation at a measured pace, the defendant did not move quick enough. Tough case, tough decision. I would prefer not to see the balance of a decision rest on how an invalidity contention supplement impacts claim construction as a reason for denying the supplement. I don't believe the rules were intended to exclude prior art because a plaintiff lacked non-intrinsic prior art during the claim construction process. I continue to look at the evolution of the local rules for linkage between invalidity contentions and claim construction. It would be helpful if someone could point me to any local patent rule comments on this issue. I'm particularly interested in comments detailing why invalidity contentions must precede claim construction. Is it to allow the patent owner to craft proposed constructions in light of prior art (extrinsic evidence)? What principle of claim construction would that be based on? These are somewhat rhetorical questions. Care to comment?
In Nano-Second Technology Co., Ltd. v. Dynaflex Int'l (June 6, 2012), Judge Lew (Central District of California) denied Defendants' request to supplement its invalidity contentions to add an additional prior art reference. In denying the requested supplement, the Court noted that pursuant to Patent Local Rule 3-6 of the Northern District of California, amendments to contentions require a "timely showing of good cause." (Order at 3). The Court determined that defendants were not diligent because they were presumably aware of the prior art reference as of the filing of the complaint. The underlying facts of this motion is where things get interesting.
Regarding the first prong of the good cause inquiry, the Court finds that Defendants cannot meet their burden to establish their diligence in seeking to amend their Preliminary Invalidity Contentions. Defendants have had in their possession a copy of the '311 Patent since the filing of the Complaint on November 30, 2010, and the language of the '311 Patent is clear that FIG. 5 is a depiction of the prior art.
In addition, in addressing the second prong of the good cause inquiry, the Court finds that Plaintiff will be prejudiced by allowing the requested amendment. Though expert reports are now not due until June 29, 2012, Plaintiff has stated that it prepared its claim construction briefing based in part on Defendants' original invalidity contentions. The Court finds that allowing the proposed amendment now in light of Defendants' lack of diligence in seeking [sic] amendment "would undercut one of the purpose [sic] of the patent local rules to provide the parties with certainty as to the opposing party's legal theories." Apple, Inc. v. Samsung Electronics Co. Ltd., 2012 WL 1067548, at *7 (N.D. Cal. Mar. 27, 2012) (citing 02 Micro, 467 F.3d at 1363).
As we suggested previously, the link between invalidity contentions and resulting prejudice in connection with claim construction preparation is fairly tenuous. Although the prior art reference here, the '311 patent, is actually part of the intrinsic record and not extrinsic evidence, is it accurate for plaintiff to suggest that inclusion of prior art admissions for its own patent somehow results in prejudice to its claim construction preparation and strategy? On the first prong of good cause, we take no issue with the Court's determination. On the second prong though, plaintiff has stretched a bit.
Takeaways - Diligence is the driving consideration for supplemental contentions. Organizing invalidity contentions at an early stage in the litigation is key to marshaling all information at the outset of the case, and managing information during the collection and review process. Maybe if the Defendants had a better coordination tool like PatDek (shameless plug), then they would have had more time to consider and appreciate the prior art concessions in the asserted '311 patent.
Pursuant to the [02 Micro] decision, the key fact courts should look at to determine whether good cause exists to grant an amendment to a contention is the diligence of the moving party. Diligence has two aspects to it. One is whether the moving party acted diligently to discover that an amendment was appropriate. The second aspect is whether the moving party promptly moved to amend its contentions after it learned an amendment was necessary. The burden is on Dow to show diligence, rather than on Bayer to establish Down was not diligent. Dow has not satisfied its burden.
(Order at 3). Dow sought three sets of amendments. One amendment concerned supplementing its contentions to include arguments, not prior art, that respond to Plaintiff's amended contentions. This proposal was rejected. The second amendment sought to incorporate by reference past briefing by Dow. This proposal was also rejected. The third set of amendments sought to add two recently discovered prior art references. This third proposal was similarly rejected. The reasoning underlying the third proposal is explored below.
DAS makes no showing whatsoever that it has been diligently searching for prior art; provides no explanation as to how or why the two new pinches of prior art eluded that search; and does not even attempt to explain the circumstances as to how this alleged new prior art came to light.
(Order at 6-7) (citing Bayer Answering Brief at 10-11). The Court essentially agreed with Bayer explaining that, as to the Perkins reference learned of by interviewing the reference's author, "Dow did not explain why it did not conduct its interview earlier" and as to the second Fraley reference, the Court rejected the premise that good cause exists when a reference is intended to rebut arguments by the opposing party. (Order at 7). The Court opined that if supplementing contentions to rebut arguments were permitted, "amended contentions would never cease." (Order at 7).
Takeaways - Good cause and diligence continue to control supplemental contentions. In future posts, I will comment on why invalidity contention supplements should continue to be governed by the good cause requirement, but that the stage of the litigation should be given minimal to no deference, unless expert discovery has commenced.
In view of the parties' efforts to date and the upcoming Markman hearing, Bayer will be prejudiced if it is now compelled to revise its prosecution and defense strategy to respond to Dow's 'shifting sands' defense. This is the scenario the patent rules were designed to prevent.
I respectfully disagree. Supplementing prior art, specifically prior art not of record for the challenged patent, should have no bearing on the Markman hearing, and is unlikely to require a response by the plaintiff that rises to the level of "prejudice." If the supplemented prior art is not compelling, the prior art will essentially be a non-issue. If the prior art is compelling, the prior art rises in importance and should be part of the litigated merits. Expert discovery has yet to begin, and the plaintiff can address the reference in due course with the aid of its expert. Further, because no claim construction order has issued, it would appear to be entirely premature to exclude merit-based evidence. Yes, the local patent rules specify disclosure time frames, but are those time frames justified or merely for expedience?
We've updated our invalidity contention decisions to include recently reported ITC orders.
The Court agrees that Zurn failed to properly disclose its Community Center Worn Valve invalidity contention. Although the Court agrees that Zurn’s two invalidity contentions are not the same, as is discussed further below, they are based on the same theory such that Zurn should be allowed to assert the newly-articulated defense. It is a close call, however, and it is apparent from the facts in the record that Zurn unexplainably failed to produce the underlying documentation regarding the Community Center Worn Valve to Sloan despite certifying numerous times that its document production was complete. Accordingly, the Court orders Zurn to pay Sloan’s reasonable costs and attorney’s fees incurred in conducting discovery related to the newly-articulated Community Center Worn Valve defense as set forth in the Order.
(Order at 7). Despite the late identification of a new invalidity contention, the Court permitted the supplement. Judge St. Eve appears to have balanced other factors in this case because the new invalidity contention was determined to be belatedly disclosed. The Court was mindful to shift the costs of discovery for the new invalidity contention away from the Plaintiff and to the Defendant. Although not explicitly addressed in the opinion, another factor may have a recently issued Reexamination Certificate issued for the asserted patent, reciting amended and added claims.
Takeaways - There's not much to say about this one. The new contention was similar in theory to a previous contention, but relied on entirely different evidence (previous contention related to laboratory tests showing simulated valve wear while new contention based on valve wear over time at a public facility). The Court does not really address why the new contention was permitted, except that it was a "close call" and that the two contentions "are based on the same theory. (Order at 7). All other factors appear to have favored the Plaintiff in support of its motion to strike the new contention.
it made diligent efforts to locate and identify prior art in advance of the February 6 deadline, provided timely notice of the prior art it identified, and incorporated by reference the prior art identified in the LG's Notice of Prior Art.
"The Notice of Prior Art may be amended or supplemented only upon written motion showing good cause." Ground Rule 7 (Feb. 12, 2012). "Note that good cause will not be found absent a showing that the requesting party has taken active steps and made a good faith effort to meet the deadline for which the extension is sought. Also note that lack of prejudice does not equate to good cause." Ground Rule 1.10.1 (Feb. 12, 2012).
should have been able to identify the Miura reference before the deadline.
Takeaways - Late disclosures at the ITC are not tolerated without sufficient justification. Here, Judge Pender was not convinced that Respondent was diligent in locating the new prior art because the reference appeared in multiple patents related to a different defense theory. What if the Miura reference was cited on only one patent related to the inequitable conduct allegations, different result? Based on the Ground Rules at the ITC for a Notice of Prior Art, some compelling reason must be identified to show why the prior art was not identified by the stated deadline, or expect this type of result to be the norm.
We have now posted links to over 70 district court decisions addressing supplementing invalidity contentions, motions to strike invalidity contentions, motions to amend invalidity contentions under local rules, late disclosure of invalidity contentions, and other nuances involving invalidity contentions (invalidity charts, section 103 contentions, differences between contentions and expert disclosures). The entire list of decisions is now arranged by jurisdiction. For now, each decision identifies the Judge, year of decision, and case name.
A list of decisions arranged by jurisdiction can be found here, or via a link in the right hand side bar. The decisions are also arranged by year at the right hand side bar. Using any of these links, the invalidity contention decisions can be downloaded individually or as groups of decisions.
In Patent Harbor, LLC v. Audiovox Corp., et al. (March 30, 2012), Judge Love (Eastern District of Texas) granted-in-part and denied-in-part Defendants' motion to supplement their invalidity contentions as to three prior art references. Defendants were permitted to supplement their invalidity contentions as to two prior art systems, but were denied their supplement request as to one prior art patent ("Mills patent"). Defendants' requested supplementation to add the Mills patent on two grounds related to a changed claim construction - "good faith" (P.R. 3-6(a)(2)) and for "good cause" (P.R. 3-6(b)).
[Patent Rule 3-6(a)] is intended to allow a party to respond to an unexpected claim construction by the court. This does not mean that after every claim construction order, new infringement [or invalidity] contentions may be filed. That would destroy the effectiveness of the local rules in balancing the discovery rights and responsibilities of the parties.
Nike, 479 F. Supp. 2d at 667. ... Thus, Defendants must show that the Court’s construction was so different from the parties’ proposed constructions that amending their ICs is necessary.
(Order at 5). The Court reasoned that it essentially adopted plaintiff's proposed construction for the term "content video image", except for replacing the word "visual" with "virtual." Because the claim construction for "content video image" was not so different from the plaintiff's proposed construction, the Court determined that the proposed amended invalidity contention was not warranted.
(Order at 3) (relying on Cummins-Allison Corp. v. SBM Co., Ltd. (E.D. Tex. Mar. 19, 2009).
Under the "good cause" standard, the Court was unpersuaded that the "publicly available reference" could not have been located sooner. Because defendants did not sufficiently explain why the Mills patent was not included in the preliminary invalidity contentions, the diligence factor weighed against Defendants proposed amendment. The Court further determined that the other factors of importance and prejudice each weighed against the Defendants as well.
Defendants included some documents regarding these systems in their initial [invalidity contentions] ICs, thus providing Patent Harbor notice of the prior art systems.
(Order at 8). Further, the Court was not persuaded with plaintiff's attempt to show prejudice based on the proposed supplements as to these prior art systems.
Takeaways - this decision seems to follow the normal pattern. Unless there is a strong justification for not locating a prior art patent earlier, Courts seem reluctant to permit such a supplement, absent other nuances. The delay period in locating the prior art and requesting supplementation is often the overriding consideration in assessing diligence.
For the prior art systems, supplementing the contentions to include additional information about these prior art systems seemed to turn on the fact that these weren't newly identified systems, but merely additional documentation about systems identified in the preliminary contentions. This factored into the lack of prejudice to the plaintiff, and diligence was established because the additional information was uncovered during discovery.
it should be required to limit its claims only after the Final Invalidity Contentions are served. In the alternative, Gen-Probe suggests the Court require it to limit its claims to sixty at this time, and further require it to limit the number to thirty after [Defendant] BD's Final Invalidity Contentions are served. If the Court accepts this suggestion, Gen-Probe also seeks an order requiring BD to limit its Final Invalidity Contentions to no more than one anticipatory reference and one obviousness combination consisting of three or fewer references per asserted claim.
Order at 3. The Court ultimately ordered Gen-Probe to limit its asserted claims to no more than 30 claims, and further ordered BD to serve Final Invalidity Contentions against the reduced set of 30 claims. The Court also provided a mechanism for Gen-Probe to assert additional claims beyond the set of 30 claims, and left open the issue for Gen-Probe to seek limitations on the number of references that could be asserted against the reduced claim set. This last issue - limiting the number of prior art references - seems to be gaining traction.
Patent owners faced with limiting asserted claims are now trying to turn the tables on defendants by seeking to link a reduction in the number of asserted claims with a corresponding limit on the number of applied prior art references. We've now seen this strategy in at least two other cases. In an earlier post, we noted that Judge Folsom limited the number of Defendants' prior art references (limit of 18) that could be maintained against the Plaintiff's reduced set of claims. We also saw a tiered prior art reduction procedure established in Oracle v. Google.
If this trend continues, certain factors should be considered before establishing an arbitrary limit on prior art references.
First let's consider whether any efficiency is gained by limiting the number of asserted claims. Then let's consider whether the same concepts hold true when limiting the number of prior art references. When limiting asserted claims, an efficiency is gained in that the number of claim construction issues/terms/disputes is likely to be lower with a smaller set of claims. A further benefit is that less analysis is required by lawyers and experts for at least infringement, non-infringement, invalidity and validity grounds because of the claim number reduction.
What are the benefits to limiting the number of prior art references? When compared with limiting asserted claims, generally speaking, a limit on the number of prior art references has little impact on reducing claim construction issues. Further, the number of prior art references does not have an impact on infringement/non-infringement issues. The best that can be said for limiting the number of prior art references is that invalidity/validity expert reports might be reduced in scope with less references. More importantly for patent owners, though, limits on references would mean less prior art would need to be considered when assessing the relative strength of remaining claims claims or when reducing the set of claims.
to no more than one anticipatory reference and one obviousness combination consisting of three or fewer references per asserted claim.
At the very least, any proposed reductions should consider: (1) the complexity of the claims (number of limitations and length of the claim); (2) what constitutes a reference for counting purposes (do multiple documents about the same prior art product count as multiple references); (3) the breadth of the claims (do the claims read broadly and implicate different technologies across multiple industries rendering more relevant prior art available); and (4) different limits for dependent and independent claims.
More issues to consider: should limits be linked to the number of asserted claims? should the limits be in the aggregate or on a claim-by-claim basis? how to assess the complexity of a claim when imposing limits? should the reduced number of references be linked as a percentage of the initial number of references applied against the asserted claims?
More as this issue evolves.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.