Source: http://docketreport.blogspot.com/2017/
Timestamp: 2019-04-23 04:34:02+00:00

Document:
The court granted in part plaintiff's motion for additional venue discovery. "In my view, [In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017)] does not address whether a physical place of a corporate affiliate or subsidiary or alter ego or agent can, for venue purposes, be attributed to the named defendant in a case. . . . [Defendant] seems to acknowledge that at least an alter ego or a sham entity . . . would allow the place of business of . . . that sham entity to be attributed to the named defendant for purposes of assessing regular and established place of business for purposes of determining proper venue. . . . [Defendant] emphasizes repeatedly that the record in [its] view already establishes that there is no relationship between any of the other related entities and the ANDA at issue in this case. I have not yet been pointed to where Cray or any other case at least from the Court of Appeals tells me that such a relationship is required in order for venue to be appropriate."
The court denied defendant's motion for summary judgment of invalidity on the ground that plaintiff’s check processing patent encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "⁠[Defendant's] characterization [of the claims] omits the physical processing of checks from the point of sale to a different location, and in a particular sequence. In so doing, [defendant] improperly construes Claim 1 to 'a high level of abstraction.' The character of Claim 1 . . . is directed to a physical process for processing paper checks in which data captured from a paper check at the merchant’s point of purchase is used to credit a merchant’s account, while the same paper check is scanned at a later time and in a different location to create an image of that check. . . . [T]he [patent] purportedly improves upon the prior art through the processing of paper checks, via two-paths, at different times and locations, and the physical movement of paper checks. This claimed advance is not directed to an abstract idea. Additional language found in the [patent] emphasizes that the claimed invention is rooted in an enhanced processing method and a palpable application of that process, in a different time and place."
The court denied defendants' motion to dismiss plaintiff's patent infringement action for improper venue and found that defendants waived their venue defense through litigation conduct. "⁠[I]t was not until a few days after their IPR petitions were denied and more than two months after [TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017)] was decided that Defendants finally sought to dismiss this case for improper venue. [In re Micron Tech., Inc., No. 2017-138 (Fed. Cir. Nov. 15, 2017)] does not invite defendants who have substantially engaged in a case to reassert an abandoned defense once it becomes convenient or advantageous for them. . . . Moreover, before TC Heartland was decided . . . Defendants sought to transfer this case to the Western District of Tennessee under § 1404 rather than § 1406. This is particularly significant because a motion under § 1404 is premised on venue being proper in the transferor court whereas a motion under § 1406 reflects an objection to the current venue as being improper."
The court denied plaintiff's motion for a preliminary injunction because plaintiff's delay of at least a year and a half negated plaintiff's claim of irreparable harm. "Defendant contends that Plaintiff delayed more than four years after the initial patent issued to bring suit. Plaintiff, however, points out that the last patent did not issue until June 28, 2016 and contends that [defendant] did not launch [the accused service] until February 2016. Furthermore, Plaintiff explains that, in 2016, it was preoccupied with other litigation and therefore waited to file the instant suit until late July of 2017. Even assuming Plaintiff’s version of the facts as true, the Court concludes that Plaintiff’s delay, at a minimum, of at least one and a half years, to seek preliminary injunctive relief militates against a finding of irreparable harm. . . . It is the delay from the time the movant becomes aware of the alleged injury to the time injunctive relief is sought that is controlling, not the time between initiating litigation and seeking injunctive relief in the ongoing litigation. . . . Plaintiff’s argument that it was busy with other litigation and therefore could not timely address the alleged infringement is not compelling."
The magistrate judge recommended granting defendant's motion to transfer for improper venue and rejected plaintiff's argument that defendant waived its venue defense. "The Federal Circuit's decision in [In re Micron Technology, Inc., (Fed. Cir. Nov. 15, 2017)] establishes that [defendant] did not waive its venue defense under Rule 12(h)(l) and Rule 12(g)(2) because the Supreme Court's decision in [TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017)] represents an intervening change in the law. . . . Application of the forfeiture test set forth in In re Micron pursuant to Rule 1 and the Supreme Court's decision in [Dietz v. Bouldin, Inc., 136 S. Ct. 1885, 1891 (2016)] does not alter this conclusion. The present record reflects that trial is not scheduled to take place [for 20 months], and the court does not find that [defendant] failed to seasonably assert its venue defense, having previously contested venue in its [prior] motion to transfer under § 1404(a), and having filed the present motion promptly after the Supreme Court's issuance of its decision in TC Heartland. Given the circumstances of the present case schedule and the Federal Circuit's caution that 'the lee-way to find such forfeiture' is not broad, the court concludes that [defendant's] motion cannot properly be denied on grounds relating to its timeliness."
The court denied defendant's renewed motion for judgment on the pleadings on the ground that plaintiff’s patents for generating screen displays for interactive applications encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "The claims of the [patents] are directed to a specific computer functionality improvement -- improving the capabilities of networks hosts and computer networks -- and are patent-eligible under step 1. . . . This method allows the computer to function more quickly by speeding the data storage process and reducing memory requirements, allowing the computer to serve more users. . . . [T]he claims of the [patents] are not directed to local data storage generally, but recite specific features for improving computer functionality by generating screen displays and partitions by breaking the data content of applications or advertisements into objects, storing them locally, and selectively retrieving them when needed. This method reduces the processing demand on the host system, allowing the host to function more efficiently."
The court denied plaintiff's motion for summary judgment that defendant's patent was unenforceable due to inequitable conduct because plaintiff failed to establish an intent to deceive through prosecution counsel's use of an ethical wall. "⁠[Plaintiff] cites to numerous pieces of evidence to support its arguments, including the ethical wall put in place at [defendant's prosecution counsel]. [Plaintiff] implies that ethical wall 'demonstrates an intent to deceive the PTO and supports a finding of inequitable conduct rendering the [patent-in-suit] unenforceable.' However, [defendant] offers an equally plausible inference from the ethical wall, which is that [counsel] was simply trying 'to preclude exchange of information between attorneys representing [a third party represented by defense counsel] and [defendant][.]⁠' Much of the other evidence [plaintiff] relies on is likewise susceptible to more than one reasonable inference, which precludes summary judgment in [plaintiff's] favor."
The court granted defendant's motion to transfer for improper venue and rejected plaintiff's argument that defendant waived its venue defense. "⁠[P]laintiff argues alternatively that defendant waived its venue objection through participation in this case, which both implicitly and explicitly amounted to consent to venue. Normally, plaintiff would have a good argument. However, [In re Cray, Inc., 871 F.3d 1355 (Fed. Cir. 2017)] constitutes an intervening change of law, such that defendant could not have waived its objection to venue. Because In re Cray changed the standard for 'regular and established place of business,' and [defendant] acted promptly in filing the present motion, it was not unreasonable for defendant to object when it did."
Following the PTAB's invalidation of all asserted claims during inter partes review, the court denied plaintiff's motion to stay pending the Supreme Court decision regarding the constitutionality of IPR proceedings in Oil States Energy Servs., LLC v. Greene's Energy Grp., LLC, cert. granted in part, 137 S. Ct. 2239 (2017). "The PTAB ultimately invalidated all asserted claims in this case. Plaintiffs have exhausted appeals related to the PTAB's decision. Accordingly, this case is moot. Continuing the stay will only serve to prejudice Defendant by delaying final resolution of this case. . . . Even if the Supreme Court holds that IPRs are unconstitutional, it may choose not to apply the new rule retroactively. Even if the Supreme Court applies the new rule retroactively, it would seemingly only apply to cases still pending on direct review of the PTAB decision."
The court granted defendant's motion to dismiss nine patents-in-suit added in plaintiff's first amended complaint for lack of subject matter jurisdiction. "[Defendant] has never accused [plaintiff] of infringing the Additional Patents-in-Suit. [Defendant] asserts that the 1,975 page list provided to [plaintiff] . . . is simply an identification of the universe of patents previously declared as potentially essential to a standard. [Defendant] has not stated that the Additional Patents-in-Suit are 'actually essential' to a standard practiced by [plaintiff]. . . . [Plaintiff] has not sufficiently pled that the nine Additional Patents-in-Suit were part of the 'hundreds' of claim charts prepared by [defendant] in the licensing negotiations. . . . [Defendant] may have participated in a similar 'palpable bravura' in suggesting to [plaintiff] to review its entire portfolio. Nonetheless . . . [defendant] has not made specific allegations of infringement as to the Additional Patents-in-Suit, nor has [it] presented claim charts relating to these patents."
The court denied defendant's motion to dismiss on the ground that plaintiff’s predictive keyboard application patent encompassed unpatentable subject matter because defendant failed to establish that the asserted claim was directed toward an abstract idea. "[Defendant] argues that claim 19 is directed to the abstract idea of listing word completion candidates based on partial information, analogizing the claim to the games Hangman and Wheel of Fortune. . . . [C]laim 19 does not automate a mental process previously practiced by humans. The court sees no reasonable scenario in which a mobile device user would type the first letter of a word she wishes to enter, then consult a list of possible completion candidates, then return to entering the text, for she would already know what her intended text was. . . . If less time is required to enter text, then less time is required to operate the device. Plaintiffs argue, therefore, that claim 19 improves the operation of the device. [Defendant] offers no compelling rebuttal. Accordingly, at this early stage of the proceedings, [defendant] has not met its burden to show that claim 19 is directed to an abstract idea."
The court granted defendant's motion to dismiss plaintiff's patent infringement action for improper venue because defendant did not have a regular and established place of business in the forum based on its five work-at-home employees in the district. "While these employees' homes are certainly physical places in this District and are in some sense connected to Defendant's business, none of them are a place 'of the defendant.'. . . Defendant does not own or lease these five employees' homes or contribute to their rent or mortgage payments. Nor does it require them to reside at particular locations or even to reside in this District. Defendant also does not publicly advertise or list the employees' homes as a place where it conducts business. . . . Listing an employee's home address on a workers' compensation policy does not show 'possession or control' by the employer over the employee's home, nor does it hold out the employee's home to the public as the employer's place of business."
The court denied defendant's motion for summary judgment on the ground that plaintiff's patent for controlling a mobile device application’s access to native software and hardware encompassed unpatentable subject matter because the asserted claims did not lack an inventive concept. "[T]he [patent-in-suit] describes a system for controlling an application's access to native software and hardware on a mobile device. . . . [T]he claims recite a technological improvement to a problem arising in mobile platform technology, namely the problem of limited memory and resources on mobile phones. The invention is a particularized solution to that problem. . . . The fact that the PTAB concluded that [defendant] failed to establish that a person of ordinary skill in the art would be motivated to combine computer-based security software with the relevant mobile platform technology -- because of the limited memory and resources of a mobile phone -- suggests that the systems claimed by the [patent] are not merely conventional applications of computer technology."
The court granted plaintiff's motion for a preliminary injunction to prohibit defendant from selling the accused removable wafer carrier products and found that plaintiff established irreparable harm. "Although [plaintiff] may be able to prove with requisite certainty its losses due to lost sales, lost customers, or price erosion in the past or near-term future, the long-term and second-order effects . . . are not likely to be quantifiable with a requisite degree of certainty. . . . [Plaintiff's] loss of customer feedback will hamper its ability to continue innovating its MOCVD designs to remain competitive in the MOCVD market . . . . [Plaintiff's] loss of revenue in the near term, combined with asset impairments and other potential losses of goodwill and market share, will impair [plaintiff's] ability to invest in research and development . . . . Due to the incumbency effects of the MOCVD market, [plaintiff's] lost sales in the near term will hamper its ability to obtain further sales from the same customer going forward, yet those future sales will be extremely difficult to determine with the certainty required to obtain money damages. In addition, the medium- and long-term effects of [plaintiff's] lost market share and other competitive harms will be especially difficult to quantify at trial because the MOCVD reactor market is entering an expansionary period, making historical market data less predictive of future results."
The court granted defendant's motion to exclude the testimony of plaintiff's damages expert regarding a reasonable royalty for failing to apportion damages to the accused features. "The arguments made by [plaintiff], that the patented features are desirable and important or even essential, are not sufficient to prove that those features alone drive the market for the HEOS products. The flaw in [the expert's] reasoning is underscored by the fact . . . that at least half of all HEOS owners own only one HEOS product. That is to say, at least half of all HEOS owners cannot use the synchronization, group volume control, or pairing features described in [plaintiff's] patents, at least not without purchasing another HEOS unit. Therefore, it can be assumed that those features are not the driving factor in those customers’ purchasing decisions. . . . Because [the expert] neither considered the value of the allegedly infringing features in relation to the product as a whole, nor showed that those features alone drive consumer demand, his opinion as to the amount of a reasonable royalty for the HEOS products is methodologically unsound."
The court granted plaintiff's motion for enhanced damages because defendant's copying, lack of a good faith belief in its defenses, litigation conduct, duration of misconduct, motivation for harm weighed in favor of a 1.5 time enhancement of the jury verdict. "It appears from the record that [defendant] examined [plaintiff's] patent and step and tried to design something as close as possible. . . . The Court agrees that [defendant] willfully infringed. . . . [T]he false statement in the original Answer was wrongful behavior because it concerned a key fact: whether [defendant] knew about the patent while designing its step. . . . The fact that counsel remedied [defendant's] bad behavior does not alter the reality that false statements in the Answer are not proper litigation behavior. . . . Wherever courts should draw the line on duration, a party with multiple years of expanded use of an infringing product undoubtedly crosses the line on acceptable duration of infringement."
The court granted in part defendants' motion for expert fees for its four expert witnesses. "In this District, courts look to the preparation time in relation to the deposition time to determine whether the preparation time was reasonable. 'These courts have reasonably concluded that a ratio of 3 to 1 preparation to deposition time is reasonable in complex cases[.]'. . . Plaintiff disputes the expert witness fees, arguing that one witness was not called at trial and that the testimony of the other three witnesses was irrelevant or otherwise questionable. It is not appropriate for [plaintiff] to undermine these expert witnesses in a bill of costs motion. Plaintiff had occasion to do so during pre-trial and trial. As for the witness who ultimately was not called, both sides retained experts in a good-faith preparation for trial."
The court partially granted defendant's motion to sanction plaintiff under FRCP 37 and the court's inherent authority because plaintiff misrepresented that it was the owner of three patents-in-suit but in fact lacked standing to sue. "The Court orders [plaintiff's Rule 30(b)(6) witness] to submit to a deposition in Texarkana under the supervision of [the special master] on topics related to [plaintiff's] knowledge of the [license agreements] only recently produced, despite [plaintiff's] false representation to Interrogatory No. 13 directed to license agreements; [plaintiff's] decision to assert the disputed patents despite its lack of standing; [plaintiff's] lack of knowledge of the lack of standing; and all documents that are the subject of [defendant's] pending Motion for an Order Stripping [Plaintiff] of Claimed Privileges and In Camera Review of Documents. The Court denies [defendant's] request for monetary sanctions at this time. . . . [However], [defendant] may re-raise this aspect of the motion following the limited discovery allowed above."
The court found that venue was improper for plaintiff's patent infringement action and rejected the argument that venue was proper because defendant's agent had a regular and established place of business in the district. However, the court deferred ruling on defendant's motion to dismiss pending plaintiff's response to the court's suggestion to transfer under 28 U.S.C. § 1404(a). "[Plaintiff] does not allege that [defendant] itself has 'a place of business' in this District. Instead, [plaintiff] argues that . . . the place of business for [defendant's] agent . . . is in this District. . . . But, even assuming that [the alleged agent] is [defendant's] agent (as opposed to distributor, supplier, or contractor), the Federal Circuit recently held that '[the place] must be that of the defendant.' Interpreting the statute two-blocks this conclusion. In § 1400(a), Congress permits suits for copyright and trademark infringement to be brought 'in the district in which the defendant or his agent resides or may be found.' In § 1400(b), Congress does not extend the same permission to suits for patent-infringement. If Congress had intended to include the place of a defendant's agent's business, it could certainly have done so. . . . Section 1406(a) is mum about plucking out an offending claim to save another, so I am inclined to dismiss the action. . . . Because [plaintiff] says that dismissal will waste everyone's time, [plaintiff] is directed to advise me . . . whether it consents to transfer under § 1404(a) – or to propose an alternate suggestion consistent with this order."
The magistrate judge recommended granting defendant's motion to dismiss plaintiffs' patent export infringement claims under 35 U.S.C. §§ 271(f)(1)&(2) for failure to state a claim. "Plaintiffs clearly rely on the asserted presence of unnamed 'first and second components of the system [of the accused product]' that are supplied by Defendant along with 'components of the applicator'; Defendant is then alleged to provide instructions on how to combine these components together in an infringing manner overseas. But in the absence of Plaintiffs providing any hint in the Amended Complaint as to what those first and second components are said to be, the Court could not discern whether it is plausible that the accused products at issue are, in fact, supplied from the United States as separate components. . . . Put differently, Plaintiffs' bald reference to additional 'first and second components' is not much different in effect than if Plaintiffs had simply tracked the language of the statute . . . in making their allegations of export infringement. Plaintiffs have to do more than merely track the statutory language-they have to allege facts that go beyond a formulaic recitation of the elements of their cause of action."
The court granted defendant's motion for summary judgment that the asserted claim of plaintiff’s visual perception processing patent encompassed unpatentable subject matter and found that the claim was directed toward an abstract idea. "Claim 29 is directed to an 'improved method' of analyzing parameters related to an event detected by an electronic device by generating a histogram while automatically updating the classification criteria. . . . [Plaintiff] summarily concludes that automatically updating the classification criteria of a histogram while the histogram is being calculated is not an abstract idea. . . . [Plaintiff] does not explain, and the [patent] does not describe, how the 'automatically updating' limitation is an improvement to computer capabilities. The claimed method of generating a histogram, even a histogram where the classification criteria are automatically updated, recites a purely conventional computer implementation of a mathematical formula. The use of 'electronic device' and 'classification memory' are not 'specific, claimed features' that allow for an improvement to computer functionality."
The court granted in part defendants' motion to exclude the testimony of plaintiff's damages expert regarding a per-port royalty because his "Three-Step Risk Assessment Methodology" relied on venue-related statistics. "Defendants also condemn [the expert's] use of the 'various statistics regarding uncertainty' specific to patent litigation in the Eastern District of Texas. . . . Plaintiff contends that [his] use of venue-specific statistics is proper because all of the relevant settlements occurred in this District. Utilization of venue-specific statistics regarding uncertainty to adjust royalty rates is improper because the hypothetical negotiation assumes that the patent is valid and infringed. There should be no discussion of venue or win-loss statistics in a reasonable royalty calculation because venue plays no part in the hypothetical negotiation."
Following remand of a $399 million jury award, the court ordered a new trial on design patent damages because its original jury instructions caused prejudicial error. "[A] properly instructed jury may have found that the relevant article of manufacture for each of the design patents was something less than the entire phone. [Plaintiff's] argument that [defendant's] failure to actually identify a smaller article of manufacture at trial would have precluded the jury from finding any article of manufacture other than the entire phone is not persuasive. Had the Court agreed to give some version of Proposed Jury Instruction 42.1, [defendant] could have identified a smaller article of manufacture in its closing argument."
The magistrate judge recommended denying one defendant's renewed motion to dismiss or transfer for improper venue because TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017) applied only to cases filed after the effective date of the December 7, 2011 amendment to 28 U.S.C. §1391 and the moving defendant's was filed prior to that date. "Because TC Heartland was commenced in January 2014, only the 2011 amendments to §1391 were directly involved in that case. Nowhere did TC Heartland take issue with [VE Holding Corp. v. Johnson Gas Appliance Corp., 917 F. 2d 1574 (Fed. Cir. 1990)]'s analysis of the 1988 amendments to § 1391. . . . In any event, regardless of what the Supreme Court might have decided about the 1988 amendments' effect on [Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957)] had the question been presented to it, that question was not before the Court in TC Heartland, and was therefore not decided. Accordingly, VE Holding's treatment of the 1988 amendments remains unaffected by TC Heartland, and since [movant] was sued while the 1988 amendments were in effect, there is no reason to revisit [the court's] previous denial of its motion to dismiss."
The court granted plaintiff's motion to amend its patent infringement complaint to add defendant's parent company as a new defendant because the claim was not futile due to a venue challenge. "Futility exists when the amended complaint 'fail[s] to state a claim upon which relief could be granted.' . . . Defendant argues venue is improper thereby making Plaintiff’s amendment futile. . . . [F]utility is not dependent upon venue considerations. As such, the Court finds this is neither the time nor the place to make such arguments. Accordingly, an analysis addressing such assertions at this time is inappropriate."
Following a bench trial, the court found that plaintiff's ophthalmic drug patents were invalid as obvious and found that plaintiff's evidence of commercial success and long-felt need were insufficient secondary considerations of nonobviousness to overcome the court's obviousness determination because of plaintiff's blocking patents. "The problem with [plaintiff's] evidence of both commercial success and long-felt need is that [its] patents have long blocked others from entering the space in the market that is now occupied by [its product]. [Plaintiff] has enjoyed patent protection for the topical administration of cyclosporin to the eye since obtaining rights under [an earlier] patent [24 years ago]. . . . [B]ased principally on the presence of the blocking patents that suppressed any competition in cyclosporin/glyceride emulsion formulations, the Court concludes that the objective consideration evidence does not significantly support a finding of non-obviousness."
Following a jury trial, appeal, and retrial, the court granted in part plaintiff's motion for enhanced damages and enhanced the jury's verdict by 50% because defendant's lack of a good faith belief of noninfringement, lack of closeness of the case, defendant's size, and its litigation conduct favored enhancement. "[Defendant's] decision to continue infringing was unreasonably risky, despite any interim decisions in proceedings before the Patent Office. . . . [T]he post-grant proceedings on [plaintiff's] patents have not resulted in cancellation of the asserted claims, as appeals of those proceedings are still ongoing. Further, though [defendant] claims that the PTAB’s final written decisions 'confirm' [its] belief in the invalidity of the asserted patents, these decisions were issued long after [defendant's] decision to continue infringing despite an adverse jury verdict. . . . [Defendant's] size and financial condition . . . also favors enhancement, as it is undisputed that [defendant] is one of the largest and most financially successful companies in the world. . . . [Defendant] repeatedly sought either to stay the litigation pending post-grant proceedings or to inject evidence of the proceedings into the trial, even after receiving adverse rulings from the Court and even after few, if any, relevant facts had changed since its last request, and despite the fact that invalidity was no longer in the case."
Following summary judgment of noninfringement, the court denied defendants' motion for attorney fees under 35 U.S.C. § 285 and rejected defendants' argument that deterrence was necessary to protect other generic drug manufacturers. "[Defendant] contends that an exceptionality finding is warranted to deter future litigants from behaving like [plaintiff], especially in the context of the Hatch-Waxman Act, with its purpose (among others) to foster timely entry of generic drugs to the market. [Defendant] suggests that due to the statutory, automatic 30-month stay of FDA approval of an ANDA that is triggered by the filing of litigation, the Court should be alert to the incentives branded drug companies like [plaintiff] have to file frivolous cases, and should perhaps be more willing to find an ANDA case exceptional within the meaning of § 285. While these concerns may merit substantial weight in some other case, here they do not, as [plaintiff's] litigation position was not frivolous, and as the market here already included generic competitors at the time this suit was filed."
The court granted defendant's motion to exclude the testimony of plaintiff's expert regarding his subpoena-based survey of 170 customers because counsel's involvement in the survey rendered the results unreliable. "Defendants argue that [plaintiff's counsel] essentially urged [survey] respondents to provide quick estimates rather than thoughtful investigations, thus rendering the survey inadmissible. . . . By emphasizing the quickly approaching litigation deadlines, the law firm implicitly encouraged at least [one customer] to produce any figure as a response, which seriously undermines the integrity of the received responses. . . . [T]he law firm’s correspondence with respondents regarding the scope of the question and the need for quick responses indicates the law firm’s ability to influence the survey results, which Plaintiff has admitted is improper. Because of the extensive attorney involvement here, the survey is unreliable and should thus be excluded."
The court granted defendant's motion in limine to exclude evidence under FRE 403 that the patents-in-suit survived 20 reexaminations and inter partes review proceedings. "Because of the effect of IPR estoppel, the IPRs necessarily covered different prior art than will be used at trial. Whether that prior art was sufficient to invalidate the patents, as a general proposition, is irrelevant to the specific prior art at issue here. For that reason, admitting evidence of the IPRs is likely to mislead the jury into believing that because the patents-in-suit have survived many attacks, they must be valid against the present attacks. . . . Moreover, to the extent that IPR estoppel does not apply, such as for references petitioned but not instituted, there is no reason to show the jury that IPR was not instituted because the Federal Circuit has instructed that it does not matter the reason for the decision not to institute IPR."
Following a dismissal for lack of standing, the court granted defendants' motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation tactics were unreasonable. "[Plaintiff] brought this lawsuit without performing sufficient due diligence as to whether it had standing. It is clear from the pleadings that, from the outset, [plaintiff] was aware of the root of its standing issues. . . . Despite naming [the patent owner] as a co-plaintiff in the Complaint -- in essence, an admission that [the owner] was a necessary party -- [the owner's] signature or any identification of its counsel are conspicuously absent from the Complaint. . . . [Plaintiff's] litigation conduct makes this case exceptional because it insisted on maintaining this lawsuit even when faced with mounting evidence that it lacked standing. . . . [A]lthough the Court is not convinced that it rises to the level of intentional misrepresentation, [plaintiff] at least obfuscated the fact that there were potential problems with its standing."
The court denied in part defendant's motion in limine to preclude plaintiffs from presenting evidence of more than 1,000 pre-litigation licenses under the MPEG standards because the number of third party licenses was relevant under FRE 401 to issues other than infringement. "[E]vidence of plaintiffs' licenses with third parties, including the number of licenses, is relevant to damages, validity, willfulness, and in responding to claims that plaintiffs are litigious. . . . [E]vidence of plaintiffs' third-party licenses, including the number of such licenses, is relevant to the issue of damages as it relates to the issue of general acquiescence and an established royalty. . . . [I]f plaintiffs can show an established licensing program, a separate comparability analysis for each license entered into pursuant to that program is not necessary and concerns regarding apportioning value to account only for the value of the patents-in-suit will be an issue for the jury. . . . [Defendant's] attacks on the comparability of the 1,000 plus third-party licenses, including that the licenses cover patents other than the patents-in-suit and that [defendant's] circumstances differ from the third-party licensees, go to the weight to be accorded the evidence, not its admissibility."
The court denied plaintiffs' motion to strike the report of defendants' expert for including a previously undisclosed obviousness theory because defendants' contentions sufficiently supported the expert report, but allowed plaintiffs to take the expert's deposition before producing their own expert's report. "[Defendants' invalidity contentions] disclose every item of prior art that renders the asserted claims obvious utilized by [the expert] in his report as well as the combinations of prior art used. They also provide an explanation of how a POSA would have been motivated to start with the exemplary compounds identified in [two sets of prior art references] to arrive at the linagliptin molecule at issue here. While Defendants could have included additional information in their invalidity contentions, the Court finds that said contentions provide a sufficient outline to support the more detailed narrative provided in [the expert's] report. . . . Nevertheless, the Court is sensitive to Plaintiffs’ apprehension that given the general nature of certain of [defendants' expert's] opinions, their expert would be hard-pressed to respond to same. Indeed . . . [the expert] does not identify what would be synthesized, what would be run through [a drug discovery process not disclosed in the invalidity contentions], what the hits would be, what the lead compound would be, how analogs would be created from the lead compound or how the analogs would be modified to reach linagliptin. Plaintiffs are concerned that given the lack of certain details not only would their expert have difficulty responding to same, but [the expert] may at some point in the future attempt to fill in the gaps. The Court finds that these are reasonable concerns. As such, while not usually the case, the Court shall permit Plaintiffs to depose [him] before producing their expert report."
The court granted plaintiff's motion to strike as insufficient defendant's inequitable conduct defense based on plaintiff's failure to correct an examiner's misunderstanding of a prior art reference. "[Defendant] argues that although disclosure of prior art is usually enough to avoid a charge of inequitable conduct, when the patent examiner made clear that he misunderstood the scope of [a reference's] disclosure, the prosecuting attorney had a duty to respond to the examiner's confusion by pointing out that [the reference] inherently disclosed the pulse width limitation. Although this argument is not unreasonable, it goes against the great weight of the case law. . . . [E]ven if there could be a factual scenario where an inventor commits inequitable conduct by failing to clear up a misunderstanding of prior art held by a patent examiner that the patent examiner could have recognized on his own, the specific facts alleged here by [defendant] would not rise to the level of inequitable conduct."
The court denied defendants' motion for a preliminary injunction to preclude the sales of plaintiffs' advanced energy vessel sealing instruments because defendants failed to establish irreparable harm. "Because . . . it is far from 'clear' on the present record that there is any connection between [plaintiffs'] alleged infringement and the harms [defendants] cite – the Court need not consider whether those harms are, in fact, irreparable. [Defendants'] nexus argument rests on two related assumptions: that the [plaintiffs' previous device] failed commercially because it did not provide reliable vessel sealing; and that [the accused device] remedied the supposed sealing problem by incorporating stop members disclosed in the [patent-in-suit]. Neither assumption is borne out by the record. . . . Moreover, the weight of evidence before the Court suggests various factors besides the patented stop members are responsible for the [accused device's] early success. Accordingly, [defendants have] not shown irreparable harm resulting from the alleged infringement."
The court granted plaintiff's motion for judgment on the pleadings because the asserted claims of defendant's telephone system patents encompassed unpatentable subject matter and found that the claims for identifying a caller with a single telephone number were directed toward an abstract idea. "Essentially, the claim is directed to storing data in a database, looking up data from that database in response to the initiation of a phone call, and inserting at least a portion of that data in the already-existing caller ID field. . . . Although the solution employed by the asserted claims may utilize conventional telephony components, the problem of being unable to reach a particular individual is a practical, human unavailability problem, not a technological one."
Following an inter partes review that found all asserted claims of the patents-in-suit unpatentable or invalid, the court denied defendant's motion for attorney fees under 35 U.S.C. § 285 on the ground that plaintiff failed to conduct an adequate pre-filing investigation. "[Plaintiff] fails to state that it investigated its claims in any fashion before filing suit. . . . [Plaintiff] also does not deny that it never attempted to contact [defendant] before filing suit to confirm whether [defendant] was using the accused devices or systems. These factors suggest that [plaintiff] failed in some aspects of its pre-filing investigation. However, even if the Court were to determine that there was not an adequate pre-suit investigation, [defendant] has not cited -- and the Court is not aware of -- any decision awarding attorney fees solely on the basis of a failure to conduct an adequate pre-filing investigation. . . . [T]he failure to conduct some aspects of a pre-suit investigation alone does not warrant an award of attorney fees under Section 285."
The court granted defendants' motion to dismiss because the asserted claims of plaintiff’s application configuration patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "The [patent-in-suit] is directed to obtaining user and administrator sets of configuration preferences for applications and then executing the applications using both sets of obtained preferences. . . . The [challenged] claims . . . involve computers but do nothing to improve their functionality. The claims employ off-the-shelf computer components without modification. The Court has already held that the kind of benefits they provide -- 'increased efficiency' or 'reduced costs' -- are not technological benefits. . . . [T]he claims of the [patent] are overly vague in that they recite 'executing the application program using the obtained user set and the obtained administrator set [of preferences],' without claiming any 'particular way of programming or designing the software' to facilitate execution of the program according to the claim. . . . [T]he claims of the [patent] are directed to the abstract idea of 'providing two-tiered customization' in a client-server environment."
The court denied defendants' motion to dismiss plaintiffs' induced and contributory infringement claims for failing to sufficiently identify which defendant committed acts of infringement. "Defendants argue that, because the FAC alleges [the parent defendant] to be [a subsidiary defendant's] alter ego, it is impossible to determine which of the three Defendants is responsible for any particular act of indirect infringement. Defendants further argue that the FAC attributes more conducts to each Defendant than each actually perform, e.g., the FAC appears to allege that [the parent] makes the cameras even though [it] does not do so. . . . The FAC alleges specific involvements of each Defendant in its respective role in the [defendant] family of companies. In the light most favorable to Plaintiffs, these allegations provide fair notice to Defendants."
The court denied defendant's motion to dismiss or transfer plaintiff's patent infringement action for improper venue because defendant waived its venue defense by waiting for the outcome of its earlier Rule 12 motion before raising its venue defense. "The rules specifically provide a system in which venue challenges are not available for tactical deployment. A party cannot wait to see how a motion to dismiss on the merits turns out before challenging venue. . . . [Defendant] had several weeks in which to notify the court that it wanted to supplement its pending motions to dismiss. During that time period, [defendant] notified the court of other recent decisions impacting the [35 U.S.C. §101] motion. [Defendant] similarly could have, and should have, notified the court of the [TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017)] decision if it did not want to waive the venue challenge. By waiting to see how the court would come out on its unpatentability motion, [defendant] waived its venue challenge."
Following inter partes review, the court granted plaintiff's motion to dismiss its patent infringement action and defendant's invalidity and noninfringement counterclaims as moot and rejected defendant's request to allow 90 days of discovery to support its 35 U.S.C. § 285 claim. "Once the [patent] was determined to be unpatentable, the need for a declaratory judgement of invalidity and non-infringement became a moot issue. . . . If the Defendant had desired to conduct discovery to prove the egregious conduct alleged in their response to the Order to Show Cause, they should not have joined in the IPR, nor should they have filed a separate petition for IPR of all claims of the [patent] on the same grounds described in the then-pending IPR. Having chosen to invalidate the [patent] before the USPTO, they cannot now complain that they are denied the ability to avail themselves of this federal forum."
The magistrate judge recommended granting plaintiff's motion for summary judgment that IPR estoppel barred defendant from asserting obviousness based on two non-petitioned prior art combinations because defendant reasonably could have raised them during inter partes review. "[Defendant argues] that because it did not disclose the two disputed combinations . . . in its invalidity contentions, and did not do so until after the . . . IPR was over, it is not barred from asserting them today. . . . The legislative history of the statute . . . confirms that Congress intended for estoppel to extend to 'prior art,' rather than to just 'combinations.'. . . Although [defendant] did not assert the specific combinations of prior art references that it now seeks to assert at trial, [defendant] knew that the [underlying] references existed, at least eight months before filing its IPR petition. Yet, [defendant] chose not to raise the specific references before the PTAB. . . . [A]llowing [defendant] to raise arguments that it chose not to raise during IPR, would give it the proverbial 'second bite at the apple,' by allowing it to enjoy the pros of IPR without risking the cons of estoppel."
Following a jury verdict of willful infringement, the court denied plaintiff's motion for enhanced damages because plaintiff failed to establish the need for a punitive sanction or deterrence. "While the Court does not, of course, 'bless' the type of underhanded corporate piracy the jury implicitly found [defendant] committed, given that the result of that misconduct is a cure for a potentially-fatal disease afflicting millions of people around the world, and given that the jury's damages award is already the largest damages verdict ever returned in a patent trial (compensating [plaintiff] for what it lost), additional sanction is just not warranted. . . . The Court cannot confidently state that it should wish to deter the conduct the jury implicitly found [defendant] committed. . . . Here, without both parties' contributions, humanity may well have been deprived of a cure for HCV. Under the totality of circumstances, society's interest in deterrence of willful patent infringement does not justify enhancing damages here."
The court granted defendants' motion to exclude the testimony of plaintiff's patent law expert regarding what a patent examiner would have done under different facts because it was unreliable speculation. "Defendants . . . seek to exclude portions of [the expert's] Report that discuss whether an examiner would have considered certain evidence, if presented, what an examiner would have done under an alternative set of facts, all as unreliable speculation. . . . In Barry v. Medtronic, the court excluded similar testimony under Rule 702: . . . '[the expert’s] resume fails to establish his education, training, or experience in the field of retroactive mind reading of the thoughts of patent examiners.' . . . Plaintiff’s argument that such opinions are supported by substantial evidence and reasoned analysis does not change the fact that they are intrinsically impermissible. [The expert] may not opine about the mental thought processes of a PTO examiner."
The magistrate judge recommended denying defendant's motion to dismiss on the ground that plaintiff’s data compression patent encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "The [patent] is directed to patent eligible subject matter because it discloses a specific improvement in computer capabilities: a system for an improved data compression technique. . . . [C]laim 1 of the [patent] is not simply encoding and decoding. It improves typical data compression by compressing the data stream through content dependent and independent data recognition, as well as a plethora of encoders to achieve its maximum compression. This results in real-time or pseudo-real-time compression."
The court overruled plaintiff's objections to the magistrate judge's recommendation and granted defendant's motion to dismiss for improper venue because there was insufficient evidence that defendant had a regular and established place of business in the forum. "[T]he Court is not persuaded that [plaintiff] has put forth sufficient evidence that [defendant's parent] and [defendant] acted as a single enterprise such that [the parent's] presence in this District should be imputed to [defendant] for the purpose of determining venue. [Plaintiff's] argument that venue is proper because [defendant] maintains inventory, advertises and markets, and receives substantial benefits in this District is similarly lacking in merit. [Plaintiff] relies only on evidence specific to [the parent] to support its assertions, and none of the evidence presented by [plaintiff] points to activities performed by [defendant]."
The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s preview-based file or folder sharing patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "Preview-based file or folder sharing is simply a computerized version of a manual process of sharing information that has existed for years. . . . Plaintiff nevertheless argues that claim 9 is directed to a specific improvement in computer technology -- not an abstract idea -- because it enables the fast and easy exchange of files between users. . . . Simply because a claimed invention offers benefits within a particular technological environment does not mean that it improves technology itself. Critically, there are no computer or networking technologies, such as algorithms, data structures, or hardware components, which claim 9 specifically improves."
The court granted defendant's motion to transfer venue from the District of Delaware to the Northern District of California and sua sponte raised the issue of court congestion. "While neither party addresses this factor, we do because this District is now reduced to two active district court judges with judges from other busy districts sitting as visiting judges to help address the busy docket until new district court judges are sworn. The Northern District of California has a full bench of talented district court judges experienced in patent litigation. . . . [T]his District is ranked 17th in the United States for weighted filings per judge (based on four judges as of March 31, 2017) while the Northern District of California is ranked 23rd based on fourteen judges as of March 31, 2017. This District is now reduced to two active judges, only increasing the number of cases on each judge's docket here. . . . Given the limited resources, we find it difficult to justly allocate judicial resources in this District to resolve a dispute between California and North Dakota citizens where there is no connection here other than [defendant's] single retail location."
The court denied plaintiff's motion for judgment on the pleadings that defendants could not pursue a laches defense against plaintiff's claim for patent injunctive relief. "The Supreme Court recently held [in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, 137 S.Ct. 954, 960 (2017)] that laches does not bar recovery of damages incurred within the statute of limitations in patent cases. In light of that holding, the parties dispute whether the defense of laches may ever bar injunctive relief. . . . [I]n SCA Hygiene, the Supreme Court explicitly declined to address the application of laches to equitable defenses and the portion of the Federal Circuit’s opinion addressing the issue. . . . The [Federal Circuit] concluded that 'laches in combination with the [eBay v. MercExchange, LLC, 547 U.S. 388, 391(2006)] factors may in some circumstances counsel against an injunction.'. . . The Federal Circuit merely articulates that a plaintiff’s delay in bringing suit is relevant to whether equitable relief is warranted. . . . [T]he Supreme Court has not held that laches is never a bar to injunctive relief, but rather that it only bars such relief when the delay is of 'sufficient magnitude.' Therefore, laches is still a viable defense to [plaintiff's] claims."
The court granted in part plaintiff's motion for an ongoing royalty and enhanced the jury's royalty rate by one and half times for defendants' willful infringement. "[Plaintiff] argues the jury’s verdict did not include damages for Defendants’ willful infringement. Thus, [plaintiff] contends enhancement for Defendants’ continued willful infringement is proper in the ongoing royalty context when using the jury’s non-willfulness rate as a starting point. The Court agrees. . . . [I]t is undisputed that, since the jury verdict, Defendants have continued to infringe the patents-in-suit. . . . [T]he Court does not find that trebling the jury-determined rate to be appropriate. [Plaintiff] has not addressed any circumstances that would relate to the egregiousness of Defendants’ conduct after the jury’s verdict. Nevertheless, after balancing the [Read Corp. v. Portec, Inc., 970 F.2d 816, 827 (Fed. Cir. 1992)] factors, the Court considers Defendants’ continued infringement to be unreasonable, deliberate and willful in nature. As such, the Court enhances the jury-determined rate by 1.5 times."
Following a jury trial, the court granted plaintiff's motion for a permanent injunction and rejected defendant's argument that the public interest weighed against an injunction of its flame barrier products. "Defendant argues that an injunction would harm the public interest because the public is better off with a multiple-supplier market for products affecting public safety. Defendant provides some evidence that Plaintiff may have had supply issues with its product. . . . Overall, I am not concerned with Plaintiff's ability to supply its product. Even if there were concerns, it could still be appropriate to award an injunction. It is also the case that 'copies of patented inventions have the effect of inhibiting innovation and incentive.' Guarding against such copies could foster the development of more technologies aimed at enhancing public safety."
The court denied without prejudice defendant's motion to dismiss plaintiffs' ANDA infringement action for improper venue pending discovery on whether defendant had a regular and established place of business in the forum. "[Defendant] is part of [a] family of companies which have a nationwide and global footprint. . . . Within the [company] family, [defendant] appears to serve the role of securing regulatory approval for many of [their] generic products. . . . [I]t appears that a key to [defendant's] success in the generic drug business is its constant involvement in Hatch-Waxman litigation. Historically, the largest number of Hatch-Waxman cases each year are filed in the District of Delaware. . . . [Defendant], as a frequent ANDA filer, appears in front of this Court with regularity for the purpose of getting its generic drugs on the market, and when that litigation concludes in a way that is favorable for [defendant], those generic drugs are distributed to and used by Delaware residents through a distribution network that has been established for that purpose. In the Court's view, this business reality is a pertinent consideration in assessing whether [defendant] has a regular and established place of business in Delaware. . . . While [defendant] has been unable to this point to identify a 'fixed physical presence in the sense of a formal office or store' that [defendant] maintains in Delaware, this is not required. . . . [N]o relationship between a defendant's acts of infringement and its regular and established place of business is necessary to satisfy § 1400(b)."
The magistrate judge recommended granting defendant's motion for summary judgment that plaintiff's infringement claims were estopped due to plaintiff's prosecution disclaimer in its response to intervenors' petition for inter partes review. "Regardless of whether an examiner or panel agreed with the patentee’s statement, the statement itself may result in disclaimer because it constitutes a representation to the public about the scope of the patent. [Plaintiff's] statements to the Patent Office in its preliminary response were clear and unmistakable. [Plaintiff] repeatedly emphasized that the TR 23.809 standards document does not describe a GGSN that preserves the PDP context after receiving an error indication because the GGSN marks the PDP context as invalid. . . . [Plaintiff's expert's] central thesis is that by complying with the TS 23.060 standard, [defendant's] network infringes. The problem is that the standard, and by extension [defendant's] network, includes a GGSN that marks the PDP context invalid."
​ Following judgment on the pleadings of lack of patentable subject matter, the court granted a declaratory judgment plaintiff's motion for attorney fees under 35 U.S.C. § 285 because defendant threatened litigation after the PTO asserted, during a reexamination appeal, that the patent claims were likely invalid under 35 U.S.C. § 101. "[T]he lone fact that a patent owner asserted patent claims in litigation that ultimately were found to be invalid under § 101 is typically insufficient for finding a case exceptional. But, this case does stand out from the typical case in which claims of a patent were invalidated by a court. That is because [defendant] was specifically warned by the USPTO, in [a Federal Circuit appellate brief in connection with a reexamination appeal], that it looked very unlikely that these claims were directed toward patentable subject matter and very likely that the claims were invalid. The USPTO did not directly address this subject matter eligibility issue in that opinion because doing so would have been outside the authority of the USPTO for that particular proceeding. . . . Instead of addressing this issue, after the USPTO created a serious cloud on the of the claims, [defendant] ignored it and continued to assert its patent against companies like [plaintiff]."
​Following remand, the court again denied plaintiff's motion for enhanced damages because defendant was not a "pirate." "Enhanced damages remain an exceptional tool meant to punish patent 'pirates' -- companies that intentionally infringe with no regard for a plaintiff’s rights. The record reveals that [defendant] is no pirate. Its defense strategies were questionable, which is reflected in the jury’s verdict against it. But [defendant] offers ample evidence that: (1) when it learned of [plaintiff's] patent [defendant] investigated whether its products infringed, (2) [defendant] pursued non-frivolous defenses at trial, and (3) [defendant] had a basis to subjectively believe it was not infringing [plaintiff's] patent throughout this litigation and prior."
Following a bench trial, the court determined that the asserted claims of plaintiffs’ pulmonary edema treatment patents encompassed unpatentable subject matter and found that the claims were directed toward a natural phenomena. "[T]he core of the alleged invention is the increased risk of pulmonary-capillary wedge pressure that develops when administering [inhaled nitric oxide] to term or near-term patients with both hypoxic respiratory failure and left-ventricular dysfunction. That 'invention' is really a patient populations' natural physiological response to 20 ppm of inhaled nitric oxide treatment. While man discovered the adverse physiological response that occurs when some patients receive iNO, such a discovery does not amount to innovation."
The court granted plaintiff's motion for summary judgment that the asserted claims of its carpet tufting patents were not invalid for claiming unpatentable subject matter because the claims were not directed toward an abstract idea. "[T]he Severed Claims are not directed toward the abstract idea of high-stitch-rate tufting. They do not claim the production of all carpets with relatively high stitch rates. Instead, they claim a specific way of achieving a high stitch rate -- a manner of stitching far more yarns per longitudinal inch than in conventional tufting systems, then pulling yarns not wanted in the face of the pattern out of the backing or so low they cannot be seen. . . . Even if [defendant] correctly asserts that the Claims use conventional tufting machines, it has presented no evidence to suggest that these tufting machines perform purely conventional steps."
The court granted defendant's motion for summary judgment that plaintiff was not entitled to damages for infringement before one of its patents issued because plaintiff amended the claim language of the application to distinguish the prior art. "The amended language makes 'effective stitch rate' equivalent to the prescribed stitch rate multiplied by the number of yarns, narrows the claim, and distinguishes the [a prior art] Patent. Accordingly, the invention as claimed in the [patent] Application is not substantially identical to the invention as claimed in the [patent-in-suit], and [plaintiff] does not retain provisional rights arising out of Claim 1."
The court granted defendant's alternative motion to transfer plaintiff's patent infringement action for improper venue because defendant's two employees and an independent contractor did not create a regular and established place of business in the forum. "[Defendant] acknowledges that a full-time IT employee works remotely from Florida and a second employee titled a 'Guru' supplies knowledge about [defendant's] products at racing events throughout Florida. Also, two non-employee independent contractors, only one of whom resides in this District, have a relationship with [defendant]. Plaintiff implores the Court to find these four individuals are prima facie evidence that venue is proper in this District, citing a case from the Eastern District of Texas, Ratheon Co. v. Cray, Inc., No. 2:15-cv— 1554-JRG, 2017 WL 2813896 (E.D. Tex. June 29, 2017), which set out four factors that a court can consider to determine whether a defendant had a 'regular and established place of business' within the venue. The Court declines to adopt such a standard as it is clear from the Complaint and the evidence submitted by the parties that [defendant] has no regular and established place of business in this District; and particularly in patent infringement cases, the acts of infringement (i.e., development of the [accused product]) occurred at the Defendant’s headquarters in Washington or overseas."
The court denied defendant's motion to dismiss plaintiff's patent infringement action for improper venue because defendant waived its venue defense by filing a previous Rule 12(b)(6) motion. "In the wake of [TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017)], a number of district courts have grappled with the question of whether the decision is intervening law, rendering an improper venue defense unavailable prior to its publication. The majority have held that TC Heartland does not qualify as intervening law. . . . This Court declines to join the majority view simply because it is the more popular approach. The majority’s analysis, however, is more persuasive. . . . [E]quity does not dictate that this Court allow [defendant's] belated challenge. Thus, because [defendant] filed a motion to dismiss [a year ago], but did not assert an objection to venue, [it] waived any challenge to venue."
The court denied defendant's motion to dismiss on the ground that plaintiff’s network gaming patents encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea. "Prior communication techniques interconnected all participants using point-to-point connections, and thus, did not 'scale well' as the number of participants grew. The Broadcast Claims are directed to an innovative network structure for the distribution of data as the number of participants in a computer network is scaled. . . . A non-complete, m-regular network is a network where each node is connected to the same number of other nodes, or 'm' number of other nodes, and where each node is not connected to all other nodes. . . . Defendants argue that the Broadcast Claims are analogous to situations such as the schoolyard game of 'telephone'. . . . Defendants' analogies do not present the same communication scaling issues as those that arise in computer networks. Defendants gloss over the claim requirement of a non-complete, m-regular network that is implemented on an application level. The claims require a specific and apparently innovative structure of message-forwarding, which none of Defendants' analogies are known to employ."
​ The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s predictive analytics patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "[Plaintiff's] claims are directed to a mental process and the abstract concept of using mathematical algorithms to perform predictive analytics. The method of the predictive analytics factory is directed towards collecting and analyzing information. The first step, generating learned functions or regressions from data -- the basic mathematical process of, for example, regression modeling, or running data through an algorithm -- is not a patentable concept. . . . While [plaintiff] claims that this shows it would be impossible for a human to perform such a task, just because a computer can make calculations more quickly than a human does not render a method patent eligible. . . . [Plaintiff] fails to identify any previously existing technology that its claims improve upon, or that its claims do more than carry out regression analysis and evaluation."
The court denied defendant's motion to dismiss or transfer plaintiff's patent infringement action for improper venue because defendant had a regular and established place of business in the forum through the work of its sales representatives. "[Defendant] employs at least two full-time direct sales representatives who are based in this District and who work exclusively for [defendant]. These two representatives work from their personal residences. . . . [Defendant's] direct sales representatives receive the infringing helmets in this District, keep samples in this District, and display and show these samples in this District. They also give sales presentations for [defendant] in this District and provide promotional materials about the infringing products. [Plaintiff] further alleges that [defendant] has sales showrooms in this District for the purpose of displaying samples of the infringing helmets. . . . [Defendant] views its local sales representatives as an intended point of interaction between the public and [defendant] in each region."
Following a jury verdict of noninfringement and invalidity, the court denied plaintiffs' motion for a new trial on the ground that the verdict was arbitrary and anti-patent. "After a four-day trial, the jury deliberated for almost three and a half hours before reaching a unanimous verdict of non-infringement on fourteen claims and invalidity on nine claims from three of [plaintiffs'] patents and three of [defendant's] patents. Despite an instruction in the verdict form to answer the questions on damages for each patent 'only if [the jury] found at least one claim of a patent valid . . . and the same claim of that patent infringed,' the jury indicated 'zero' for all damages. . . . There is no 'minimum deliberation time' required before a jury may reach a verdict. . . . [U]nder [plaintiffs'] logic, any unanimous verdict of non-infringement and invalidity returned under four hours is 'a uniformly anti-patent verdict.'. . . Although the jury should not have answered the damages section of the verdict form, the jury’s finding of non-infringement is clear and disposes of the damages issues."

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