Patent Lawyer Blog

Bear Creek Technologies, Inc. ("Bear Creek") is the patent holder in fourteen patent infringement actions pending in three different district courts. Bear Creek moved for centralization in the District of Delaware or, alternatively, the Eastern District of Virginia. In each of the cases, Bear Creek alleged that various telecommunications companies infringed the Bear Creek patent and the various telecommunications companies raised questions surrounding the validity or enforceability of the patent.

Certain of the defendants did not oppose centralization but suggested that the district should be either Delaware or the Eastern District of Pennsylvania. Other defendants opposed centralization and the Vonage defendants asserted that the America Invents Act ("AIA") limits centralization under 28 U.S.C. § 1407.

The court had previously granted Apple's motion to compel Samsung to produce the source code for Samsung's accused products. Apple moved to compel a second time and sought issue preclusion sanctions for Samsung's failure to produce source code. The court decided to focus on Samsung's failure to produce code for its "design-around" products. The court focused on design-arounds because by "their very nature design-arounds impact key questions of liability, damages, and injunctive relief."

The court noted that its previous order had required Samsung to produce all source code for all accused products by December 31, 2011. Samsung did not produce the source code for the design-around products until March, 12, 2012: "Samsung did not produce source code for its '891 and '163 design-around until March 10 and 12, 2012 - after the close of fact discovery - knowing full well that the court would not grant the parties any exceptions. Samsung offers no explanation why it could not produce code in commercial release months before the deadline, or produce other code in commercial release until months after the deadline. Samsung also offers no explanation why it failed to bring any source code production problems to the court's attention as soon as practicable and instead put the onus on Apple to seek relief."

Pact XPP Technologies ("Pact") filed a patent infringement action against Xilinx, Inc. ("Xilinx") and other defendants. Xilinx filed a motion to exclude Pact's expert's testimony on inducement. Pact claimed that the defendants induced Xilinx customers to infringe the asserted patents and presented expert witness to offer an opinion that Xilinx actively induces infringement, which in part relied on consumer survey evidence.

The court began it analysis by noting that "[a]n expert witness may provide opinion testimony if '(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issues; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.' Fed. R. Evid. 702. A trial court is 'charged with a 'gatekeeping role,' the objective of which is to ensure that the expert testimony admitted into evidence is both reliable and relevant.' Sundance, Inc., v. DeMonte Fabricating Ltd., 550 F.3d 1356, 1360 (Fed. Cir. 2008).

In one of several patent battles that Apple is waging across the country against Google's Android operating system, Motorola moved to exclude the testimony of one of the inventors of the patent-in-suit. As part of determining this motion, the district court, Judge Posner, requested that Apple answer several questions in camera, including why the inventor retained certain counsel and under what circumstances the inventor retained the additional counsel provided by Apple.

Apple sought sanctions against Samsung pursuant to Fed.R.Civ.P. 37(b)(2) in two separate motions pertaining to alleged violations of discovery orders, including an order regarding discovery on damages. The court had initially ordered Samsung to produce two categories of documents: (1) documents from the custodial files of Samsung designers of the Samsung products at issue during the preliminary injunction motion referencing the Apple products alleged by Apple to embody one or more of the ornamental or utility features claimed in the patents; and (2) all survey documents from central or custodial files that reference the Apple products-in-issue. After this order, Apple contended that the Samsung production was still woefully inadequate and the court issued a further order directing Samsung to comply by December 31, 2011 and stating that failure to comply would subject Samsung to sanctions.

The court ultimately agreed that Samsung had failed to comply with the court's orders, even though there was significant burden on Samsung due to the compressed case schedule. "The scale of Samsung's production and the burden placed on it by the compressed case schedule and the numerous claims at issues . . . That burden, however, does not negate Samsung's obligation to comply with no fewer than two court orders specifying the production of documents that reference Apple's products claimed to embody the features and designs at issue. As this court has stated under similar circumstances, '[o]nce the order compelling production issues, the focus of this court's appropriate inquiry necessarily shifts to compliance.' Notwithstanding Samsung's efforts, the court agrees with Apple that Samsung's production as of October 7 and December 31, 2011 failed to comply with the Court's orders."

Zep Solar Inc. ("Zep") filed a patent infringement action against several defendants. Two of the defendants, Lightway Green new Energy Company, LTD ("Lightway") and Brightway Global LLC ("Brightway") answered and counterclaimed with an allegation of inequitable conduct. Zep moved to strike or dismiss the counterclaim and affirmative defense.

As the district court stated, "[i]n the fourth affirmative defense, Brightway and Lightway allege that '[t]he Complaint and the purported claim for relief therein is barred because the '537 Patent, and each claim thereof, is unenforceable due to inequitable conduct.' (Docket No. 49, Answer and Counterclaims for Relief at 7:26-27.) In their second counterclaim for relief, Lightway and Brightway alleged hat the '537 Patent is 'invalid and/or unenforceable for failing to meet the conditions of patentability including but not limited to hose specified in 36 U.S. C. Sections 1 et seq., including 35 U.S.C. sections 102, 103, 112, 199, 256 and 37 C.F.R. section 1.56.'"

Plaintiff Homeland Houswares, LLC ("Homeland") filed a declaratory judgment action for a declaration of non-infringement and invalidity against Sorensen Research and Development Trust ("Sorensen"). Homeland took the deposition of one of the inventors of the patent-in-suit, Mr. Paul Brown. Mr. Brown is the co-inventor of U.S. Patent No. 6,599,460 (the '460 patent), which Homeland's products allegedly infringe. In addition to being a co-inventor, Mr. Brown also conducted testing in support of the patent infringement allegations.

During the deposition of Mr. Brown, Homeland asked the inventor several hypothetical questions which he was instructed by counsel for Sorensen not to answer. Homeland filed a motion to compel answers to the deposition questions.

Apple noticed the depositions of several high-ranking employees at Samsung and moved to compel their depositions. As the district court explained, "Apple argues that it entitled to these depositions because each SEC witness has unique, firsthand, non-repetitive knowledge of facts and events central to this litigation. The SEC witnesses acted in their authoritative, decision making capacities regarding certain Samsung policies that directed other employees to consider and compare Apple products when designing or re-designing the accused products or features. The STA witnesses are personally knowledgeable of or responsible for development, marketing, and finance decisions relating to the U.S. market for the accused products. Because Samsung has not produced any discovery from these witnesses, all of the evidence it relies upon has been pieced together from other witness sources."

Defendant, Xilinx, Inc. ("Xilinx"), identified and disclosed an employee as an expert pursuant to Fed.R.Civ.P. 26 and submitted several disclosures for the employee expert as well. Plaintiff moved to exclude the employee expert's disclosures on grounds of (a) improper hearsay, (b) undisclosed opinions regarding prior art, (c) unreliable opinions, (d) improper opinions regarding defendant's licensing practices and (e) as an improper attempt to remedy defendant's improper invocation of the attorney-client privilege during the employee expert's deposition. The court denied the motion on each of these grounds.

In a patent case pending before Judge Selna in the Central District of California, Defendant Nestlé USA, Inc. ("Nestlé") moved pursuant to Rule 12(b)(6) to dismiss Plaintiff Network Signatures, Inc.'s ("NSI") infringement claims under Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) and Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). The Court denied Nestlé's motion finding that NSI's complaint alleged enough facts to plausibly state a claim for direct, indirect and willful infringement.

The Court recited the well established legal standard for attacking a complaint under Twombly and Iqbal:

In resolving a Rule 12(b)(6) motion under Twombly, the Court must follow a two-pronged approach. First, the Court must accept all well-pleaded factual allegations as true, but "[t]hread-bare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Most succinctly stated, a pleading must set forth allegations that have "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1940. Courts "'are not bound to accept as true a legal conclusion couched as a factual allegation.'" Id. at 1950 (quoting Twombly, 550 U.S. at 555). "In keeping with these principles[,] a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Iqbal, 129 S.Ct. at 1950.

Second, assuming the veracity of well-pleaded factual allegations, the Court must "determine whether they plausibly give rise to an entitlement to relief." Id. at 1950. This determination is context-specific, requiring the Court to draw on its experience and common sense; there is no plausibility "where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct." Id.

As the battle over Android heads into trial, the district court appointed an expert on damages because the damages presented were complex and widely divergent. After the court-appointed expert submitted its report, Google moved to exclude portions of the expert report on patent damages.

After reviewing the standards for expert reports and the district court's gate keeping role, the district court addressed Google's motion to exclude the court-appointed expert's opinion that the value of the intellectual property in suit would have been the value of the entire Java mobile IP portfolio. As explained by the district court, the court-appointed expert calculated the reasonable royalty by beginning "with the 2006 negotiations between the parties. He then considers the relationship between the value of the IP in suit (two patents and API copyrights) and Sun's entire Java mobile edition intellectual property portfolio in 2006, which would have included licenses to many patents and copyrights in addition to the IP in suit (Kearl Rpt. ¶¶ 97-105). Before conducting an apportionment analysis, Dr. Kearl opines that, as a matter of economics, there are good reasons to not apportion and explains why the value of the IP in suit is equal to the value for the entire portfolio."

And so began a recent order from Judge Posner in the ongoing dispute between Apple and Motorola over various patents directed to features of smart phones. Apple and Motorola have each asserted patent claims against the other and, as the case approaches trial, Judge Posner has issued an order regarding the phases and sequence of the trial.

In this patent infringement action pending in the Eastern District of Texas between SimpleAir and a number of defendants, including Apple, the defendants filed a motion in limine to preclude SimpleAir from referencing the revenue or profits associated with Defendants' products or Defendants' overall economic status, profitability, or relative financial strength. In ruling on the motion in limine, the district court granted the motion in part and denied the motion in part.

The defendants apparently filed the motion in limine to prevent the plaintiff from trying to influence the jury on liability and damages by merely referencing defendants' financial strength and profitability. The district court granted the motion in part, ordering that SimpleAir would be prohibited from discussing the total revenue or profits of defendants' products. The district court did permit, however, SimpleAir to discuss the incremental change in revenue, but only to the limited scope the expert addressed it in his expert report.

Plaintiff, Imaginal Systems, LLC ("Imaginal") filed a patent infringement action against Leggett & Platt, Inc. ("Leggett") and Simmons Bedding Company ("Simmons") over three patents, which pertain to automatic stapling machines and a method of manufacturing box spring mattresses. The district court ruled on summary judgment that Imaginal's patents were valid and that the defendants directly infringed the patents. The district court subsequently held a bench trial on issues of willfulness and equitable defenses. After the district court concluded that the infringement was not willful and rejected the equitable defenses, the district court conducted a jury trial on the issue of damages and the jury returned a $5 million verdict in plaintiff's favor.

As the district court explained, "[a]t trial, Plaintiff asked for a damages award based on a running royalty. According to Plaintiffs expert, a reasonable royalty in this case was $15,933,037 as of the end of 2011. Defendants, on the other hand, argued that a running royalty for an automatic stapling machine is not prevalent in the bedding industry and asked the jury to limit the damages award to $296,621. The jury returned a verdict of $5,000,000 in Plaintiff's favor."

On remand to the district court after the Federal Circuit's en banc decision in Therasense v. Becton, Dickinson and Co., the district court reviewed the procedural posture of the case and the landmark Therasense decision. The district court noted that "Therasense worked a seismic shift in the law of inequitable conduct," and particularly that "materiality would henceforth use a but-for definition, meaning that submission of the withheld item would have led to a rejection." The district court also analyzed the decision including the closeness of the vote on the new standard, stating that "[d]espite the closeness of the decision and the importance of the question to our patent system and national economy, no petition for certiorari was filed in the Supreme Court."

Before applying the facts to the new standard articulated by the Federal Circuit, the district court noted the Federal Circuit's instructions on remand (1) that the "district court should determine whether there is clear an convincing evidence demonstrating that Sanghera or Pope knew of the EPO brief, knew of their materiality, and made the conscious decision not to disclose them in order to deceive the PTO" and (2) the "district court should determine whether the PTO would have granted the patent but for Abbott's failure to disclose the EPO briefs. ..."