Source: http://docketreport.blogspot.com/2008/
Timestamp: 2019-04-23 04:07:37+00:00

Document:
Defendants' expert, former PTO Commissioner, Gerald Mossinghoff, was disqualified where another member of his firm, Oblon, Spivak, represented plaintiff in an interference proceeding "involv[ing] the same Plaintiff and same Defendant litigating over the same patent." The court rejected defendant's argument that an internal ethical wall separated the two representations. "Regardless of whether an ethical wall exception to strict firm-wide disqualification may be permitted by the California Supreme Court, the facts of this case make it unmistakably clear that no such effective measures exist at the Oblon, Spivak firm so as to prevent Mr. Mossinghoff’s imputed disqualification."
Roger Plumley v. Doug Mockett & Co. et al., 2-04-cv-02868 (CACD December 22, 2008, Minutes).
The court rejected defendant's argument, in support of its motion to transfer venue, that "the state of Washington has a greater local interest in the resolution of that case because [defendant] is a Washington based company and the center of the allegedly infringing activity is in Washington." "This Court has routinely rejected this sort of argument in patent cases. When a company sells allegedly infringing products, or offers allegedly infringing services, nationwide, 'no specific locality has a dominant interest in resolving the issue of [patent infringement].' "
"[Plaintiff's] status as a non-practicing entity has no bearing on whether it will be prejudiced by a stay because every patentee has equal rights under the law to enforce his patent rights."
Plaintiff was permitted to amend its infringement contentions because it had been diligent in analyzing "500 gigabits of [the defendant's] source code and tens of thousands of [the defendant's] confidential documents since serving its original contentions," and the prejudice to defendant would be minimal since plaintiff's amended contentions "reduced its claims from thirty-five to eighteen while withdrawing all infringement theories based on [one patent], five of the seven accused features of [a second patent], and one accused feature of [a third patent]."
Plaintiff showed a substantial controversy as to accused products that had never been made or sold.
The court could exercise subject matter jurisdiction over plaintiff's declaratory judgment claim for products that had never been made or sold. Where plaintiff "invested what was likely a significant amount of time and effort in the development of the [product] and [was] on the verge of manufacturing that product, [plaintiff] was in the position of having to either pursue arguably illegal behavior or abandon that path altogether, which is sufficient to give rise to declaratory judgment jurisdiction."
Where plaintiff voluntarily terminated an interference proceeding after a decision on preliminary motions, and before the priority phase, it failed to exhaust administrative remedies and therefore deprived the district court of subject matter jurisdiction to review of the Board of Patent Appeals and Interferences' decision pursuant to 35 USC § 146. "[I]n view of the lack of Federal Circuit precedent mandating otherwise, the court declines to review the underdeveloped and incomplete record below as a matter of judicial economy, and declines to adopt a position that would freely allow litigants to circumvent Board decisions on priority."
Defendant sanctioned for making "material misrepresentations to the court" and "publishing false information about the court's rulings"
"Defendants clearly exercised bad faith in their dealings with the Court. Defendants deliberately withheld from the Court information related to their activities after receiving the Complaint, and such information was material to the Court's determination. Moreover, this information was withheld even after the Court reprimanded [the defendants' CEO], during the default judgment hearing, for making patently false assertions in his affidavit. . . . [Additionally], Defendants filed a misleading, unnecessary, and damaging press release about the status of the litigation . . . intended to inappropriately influence this litigation."
The court rejected defendants' argument that sanctions should not be imposed on two of three defendants. "Plaintiffs submitted evidence . . . showing that [two defendants] controlled [the third defendant] with regard to certain of the accused websites. Moreover, discovery requests were directed at all defendants, and regardless of whether [two defendants] were involved in the spoliation of the source code, all defendants had an obligation to produce responsive documents, and all defendants – who were represented by the same counsel – had a duty to candidly inform plaintiffs and the Court regarding defendants’ compliance with discovery obligations and discovery orders."
Jury verdict of approximately $34 million was reduced 82% to $6.1 million because the jury adopted plaintiff's expert's calculation of damages which was based upon worldwide sales that were "not actually rooted in [defendant's] infringing activity in the United States."
Motion to stay pending the resolution of a Swedish arbitration proceeding was granted because the arbitration "will aid this Court in resolving the claims [plaintiff] asserts here" including whether a license agreement was terminated. "While it is possible that, because [plaintiff] is not a party to that arbitration, it may not be bound by the arbitrators’ decision," the arbitration "may cast some additional light on the relevant Swedish legal principles, which govern both the Licensing and Sublicensing Agreements" at issue in the case.
Cobra North America, LLC v. Cold Cut Systems Svenska AB, 1-08-cv-00873 (COD December 11, 2008, Order).
Plaintiff was entitled to summary judgment on defendant's inequitable conduct defense based defendant's allegation that the test performed by applicants to show unexpected results to overcome an obviousness rejection did not test the "closest prior art." "Defendants have not alleged facts to suggest that Applicants intentionally chose to test a compound that was not the closest prior art. . . . Moreover, the examiner who was informed of all of the identified compounds in the [prior art] did not determine that the compound selected [for testing] was not the closest prior art compound."
The court refused to consider defendant's argument in support of summary judgment of invalidity based on a combination of a prior art reference with either of two other prior art references because that argument had not been disclosed in defendant's Final Invalidity Contentions. "[Defendant] cites all three references in its Final Invalidity Contentions. However, in [defendant's] chart identifying those elements of the Cragg Stent article that are present in the claims of the [asserted patents], defendant] does not combine the Cragg Stent article with either Schetky or Delaey."
Medtronic Inc. v. W.L. Gore & Assoc., Inc., 3-06-cv-04455 (CAND December 9, 2008, Order).
"Given the undisputed facts in this case, the intrinsic evidence of record, the Court’s construction of the claims of the [patent-in-suit], and the finding of noninfringement as a matter of law, the Court must conclude that any reasonable pre-suit investigation would have revealed that the allegedly infringing devices did not contain any type of miniature infrared camera and therefore could not have literally infringed [plaintiff's] patent. Likewise, in light of the prosecution history and the doctrine of prosecution history estoppel, there is no nonfrivolous argument for the finding of infringement after applying the doctrine of equivalents. . . . The imposition of Rule 11 sanctions is therefore appropriate in this case against both [plaintiff] and its counsel."
Plaintiff entitled to samples of modified product as defendant "intends for it to be sold"
Where defendant modified its product after providing a sample to plaintiff in discovery, plaintiff was entitled to a sample of the modified product. "[Plaintiff's] sample requests are intended to . . . identify the nature and composition of the . . . product as [defendant] intends for it to be sold. . . . this matter will not be decided based on a hypothetical product."
Eli Lilly and Co. v. Teva Pharm. USA, Inc., 1-06-cv-01017 (INSD December 5, 2008, Order).
Defendants were not estopped under 35 U.S.C. § 315(c) from arguing invalidity based on a prior art computer even though the computer "was actually raised as potential prior art during the [inter partes] reexamination proceeding" because "in reexamination proceedings, the PTO considers only 'patents or printed publications' " and a physical computer is neither.
"Despite filing a 'Joint Motion for Entry of Protective Order,' the Protective Order as proposed by the parties . . . contained a disputed provision and was therefore not actually agreed to by the parties. . . . [T]he parties may submit a protective order that conforms with the protective order suggested by the local rules or a protective order agreed upon by competent counsel. If the parties' current counsel cannot agree on a protective order, the Court suggests they retain alternative, competent counsel."
"A rule that any patent holder that licensed its product could never obtain a preliminary injunction is at odds with the purpose of 35 U.S.C. § 103. Patent holders are granted exclusive authority to grant licenses and to refuse licenses; such that a patent holder could license to small non-threatening operations, but refuse to license to a competitor that could run the patent holder out of business. The court could be presented with a situation where a patent holder has licensed to non-threatening competitors but is facing irreparable harm because of a large competitor’s unlicensed infringement."
"Patent Rule 3-1 -- in connection with confusing and conflicting product branding -- is not meant to be used as a tactical tool. To the contrary, the Rule is in place to allow defendants to have reasonable notice of the plaintiff’s infringement claims. Because of the nature of the patent claim, [plaintiff] had reasonable notice that [defendant] was accusing the [product at issue] and the method that it deployed regardless of the branding or the configuration of its components."
"I hold as a matter of law that [defendant] suffered material prejudice because of plaintiff's [four year] delay in bringing suit. . . . As [plaintiff] did not follow through on its initial threat to sue, [defendant] continued investment in [the accused product] line. [Defendant] . . . invested in marketing [the accused products] and obtaining trademark protection. It increased its sales force and devoted a substantial percentage of its promotional resources to the products. . . . This uncontroverted evidence establishes a nexus between plaintiff's delay and [defendant's] expenditures related to [the accused products]."
"Based upon the Court’s observations of [McDermott Will & Emery partner Joel Freed's] excellent capabilities, the Court finds his $703 per hour billing rate reasonable." The court also awarded fees based on Arnold & Porter's voluntarily discounted billing rates of $432-$542/hour for partners, $300-$456/hour for associates, and $128-$204/hour for paralegals.
Because the Hatch-Waxman Act does not define the term "submit" as applied to an ANDA, the courts must look at congressional intent. Considering such intent, "a wholly-owned subsidiary of a foreign ANDA applicant, which signs an ANDA as the agent of its parent-applicant, and which intends to benefit directly if the ANDA is approved -- by participating in the manufacture, importation, distribution, and/or sale of the generic drug [constitutes] one who has 'submitted' an ANDA. . . . To hold that a patentee may not rely on the agent's signature on the ANDA, but must instead determine before filing suit [within the 45 day window to do so following receipt of notice] the precise role such signatory had in the preparation of the ANDA, could regularly deprive patentees of the automatic stay Congress provided for, thus imposing a burden on patentees that would be inconsistent with the Hatch-Waxman framework."
AstraZeneca Pharmaceuticals LP v. Teva Pharmaceuticals USA, 1-08-cv-00426 (DED November 24, 2008, Report & Recommendation).
Defendant's statutory disclaimer pursuant to 35 USC § 253, disclaiming all claims of the patent and dedicating to the public its entire right, title, and interest, deprived the court of subject matter jurisdiction over plaintiff's actions under 35 USC §§ 146 and 291, challenging the decision by the PTO that certain claims of plaintiff's application were deemed invalid because they were not entitled to the benefit of plaintiff's EPO filing date. "At this stage, [Plaintiff] merely asks the Court to correct what it perceives to be an erroneous decision on the part of the [PTO], which is not a party to any of the actions before the Court. This, however, would be inappropriate for the Court to do."
"Although under the block billing format, most fees and expenses are not expressly linked to a specific patent, the court, in its discretion, can determine the appropriate award. Case law only requires that 'the penalty imposed must in some way be related to bad faith and misconduct.' It does not require that the legal work performed solely resulted from a party’s misconduct."
Defendant was entitled to summary judgment of noninfringement because at least one step of the claimed method was performed by users of defendant's website and plaintiffs "failed to raise a triable issue of fact that [defendant] 'controls or directs' the users such that it is appropriate to hold [defendant] vicariously liable for the acts of the users." Defendant "allows users access to its websites, but does not cause those users to access any particular information."
"[Plaintiff] argues that [defendant's] engineers are more likely to engage in willful patent infringement because they lack college degrees or are not registered engineers. It is not obvious to the Court that a college degree or a registration certificate makes one more honest. Absent some evidence or authority to the contrary, the lack of a degree or the lack of a registration is not probative of willfulness."
"[Defendant] is incorrect in asserting the proposition that infringement is the sine qua non for violation of an injunction. Where infringement has been proven, the Court has the power to enjoin conduct that would further infringement but that falls short of infringement."
"While KSR [Int’l Co. v. Teleflex, Inc., 127 S.Ct. 1727 (2007)] may have changed the manner in which the Federal Circuit’s teaching, suggestion, motivation test is applied, the Federal Circuit has stated, on numerous occasions, that it did not announce a new rule of law. . . . Consequently, the court does not believe that the materiality analysis is affected."
The court denied the accused infringer's motion for summary judgment of noninfringement on the ground that no one party could perform all steps of the method claim, since certain steps were performed on the accused infringer's server and other steps were performed by third-party users. "[The accused infringer] has not established whether the computer server itself is an independent actor, or is merely functioning as a piece of technology used or controlled by another actor. . . . To determine whether the users perform all the elements of the claim with the assistance of the server, or whether the users perform some of the elements and then direct or control the server in its performance of the remaining elements of the claims at issue, this Court must first determine what the elements are via a claim construction hearing."
"[T]he identity of all of defendants’ U.S. customers and the sales associated with each U.S. customer" was not necessary "to determine convoyed sales or inducement of infringement" or "to arrive at defendants' monitoring revenues. . . . [T]the Court finds no reason to compel detailed customer information to [plaintiff] simply for it to arrive at defendants’ monitoring revenues. As the defendant points out, there are other means of calculating this revenue accurately."
"Although plaintiff's willingness to forgo its patent rights (generally) for compensation may be inconsistent with the notion that money damages are inadequate, it is certainly not a dispositive factor. . . . [Rather], the utmost import in the context of evaluating irreparable harm and the adequacy of money damages is the nature of the competition between plaintiff and defendant in the [relevant] market. . . .This case presents the unique situation in which defendant, by its launch of an infringing product, gained market entry in a critical period."
Claim construction order vacated in connection with settlement retains "nonbinding persuasive value"
A vacated claim construction order "may be used for whatever authority this court or another court may deem appropriate" and has "the same nonbinding persuasive value any non-vacated opinion has in a case where no final judgment is ever entered."
"A patent attorney has no duty to investigate the circumstances of the patent application when he does not have notice of the likely existence of material information. That is, the attorney must know of specific information, the materiality of which may be ascertained with reasonable inquiry, before he has a duty to inquire. . . . Mere doubt in the attorney’s mind raised by the circumstances does not appear to be sufficient; rather, the counsel must know of specific information that must be disclosed."
"[A] potential infringer should not be able to create subject matter jurisdiction [for a declaratory relief claim] sub rosa (in this case, by initiating telephone conversations to employees of the patentee who were not in decision-making positions and who were not informed of the real purpose behind the conversations)."
"[W]hen [plaintiff's] own expert declined to state that the twenty products contained phase change materials that would infringe the [patent-in-suit], [plaintiff's] claims against those products ceased to be colorable, and it was vexatious for [plaintiff] not to withdraw the infringement claims then as to those products."
"Without minimizing the importance of intellectual property rights, it seems that if we can submit death penalty cases to juries, we should also be able to trust them to determine a royalty rate that will be paid by a corporation if it chooses to make sales of an infringing product."
Defense counsel was ordered to produce interview notes of meetings with plaintiff's former Canadian attorney as a sanction for "the poor judgment exercised by [defendant's] attorneys in eliciting [the information reflected in the notes]." "It was [defense] counsel’s duty not to solicit, either directly or indirectly, privileged information from [plaintiffs' former counsel] . . . " Thus, although the notes were "properly classified as non-discoverable work product," production of the notes was "warranted as a sanction" because of "the conduct of [defendant's] counsel in dealing with [the plaintiff's] former-now-adverse attorney."
"[Defendant] . . . argues . . . that "[plaintiff] should not be allowed to wait silently while $5.3 million in alleged damages accrue where [defendant], upon notice of infringement, quickly and easily changed to a non-infringing [device]. . . . The accrued liability from the infringement is not economic prejudice for purposes of [a] laches defense."
The GSI Group Inc v. Sukup Manufacturing Co., 3-05-cv-03011 (ILCD October 29, 2008, Opinion).
In determining whether a website provides sufficient minimum contacts for exercise of personal jurisdiction in a patent case, courts "must look to traditional sources of contract law" and "whether a website contains offers to sell infringing products is a fact intensive inquiry which must be done on a case by case basis." Where "the parties conceded that no one in the Eastern District of Texas had purchased an alleged infringing product through the defendant's website," the court nevertheless found a prima facie case of minimum contacts because "[defendant] used its website to sell the allegedly infringing products to customers. . . . [and the] website contained detailed product information and pricing information."
Invitrogen Corp. v. Evident Technologies, Inc., 6-08-cv-00163 (TXED October 29, 2008, Report & Recommendation).
"[D]efensive collateral estoppel . . . extends to the unadjudicated claims in a patent to the extent that those unadjudicated claims present issues identical to the claims which were adjudicated and found invalid. Collateral estoppel applies to patent claims that were not previously adjudicated because the 'issues litigated, not the specific claims around which the issues were framed' are determinative. . . . [Further], if the claims are not identical but the difference is minor and not substantive, collateral estoppel will apply because, as with identical claims, the unadjudicated claims raise no new issues relating to invalidity based on obviousness."
CollegeNET, Inc. v. ApplyYourself, Inc., 3-02-cv-00484 (ORD October 28, 2008, Opinion & Order).
"[T]he Court does not find it unreasonable that [partners] and higher level associates would participate to some extent in ongoing discovery disputes and strategy related thereto, particularly since several of these disputes were aired before this Court, and the Court also does not find their billing rates [$630 for an attorney with 15 years experience, $455 for an attorney with 6 years experience, and $280 for an attorney with 1 year of experience] to be excessive in this context."
Matlink Inc. v. Home Depot Inc., 3-07-cv-01994 (CASD October 27, 2008, Order).
Plaintiff's damages expert was precluded from testifying concerning a reasonable royalty where he "use[d] a 25% rule to calculate a base royalty rate . . . adding or subtracting 1% to adjust for each Georgia- Pacific factor," but "stated at deposition that there was 'no particular reason' for choosing 1%." "[A] results-driven methodology with no rhyme or reason, which does not even take into account which Georgia-Pacific factors are most compelling, does not satisfy the strictures of Daubert and Fed. R. Evid. 702."
Smith & Nephew Inc. v. Arthrex, Inc., 3-04-cv-00029 (ORD October 23, 2008, Opinion & Order).

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