District Court Strikes Infringement Contentions and Sanctioned Plaintiff for Taking Inconsistent Positions

May 23, 2016

The defendant, Echoworx, brought a motion to strike ZixCorp's infringement contentions. ZixCorp had served its original infringement contentions on Echoworx, contending that the elements of the patent-in-suit are software limitations, and stated that it intended to supplement its infringement contentions after Echoworx produced source code for each of Echoworx's accused instrumentalities.

After Echoworx produced its source code for review, ZixCorp served P.R. 3-1(g) Amendments to Its Infringement Contentions ("amended contentions"). Echoworx then complained to ZixCorp that ZixCorp's amended infringement contentions were deficient under 3-1(c) and ZixCorp had violated the Discovery Order by refusing to provide the identifications of source code for software limitations required by P.R. 3-1(g).

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District Court Strikes Documents That Were Not Produced During Discovery Even Though Documents Were Publically Available

May 18, 2016

In this patent infringement action, Mobile Telecommunications Tech., LLC ("MTel") filed against Blackberry Corp., MTel moved to exclude certain exhibits that were archived press releases published by RCR Wireless and SkyTel webpage screenshots of advertisements. MTel objected that these exhibits are inadmissible because they have not been authenticated by a representative from the Internet Archive service, or "Wayback Machine." MTel also objected that all of the exhibits constitute hearsay and that none of the exhibits were produced during discovery.

BlackBerry conceded that none of the exhibits were previously produced. It contended that the failure to produce the documents was harmless because they were publicly available. The district court disagreed.

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Court Declines to Modify Judgment Based on Collateral Proceedings before the PTAB Finding Claims of Patent-In-Suit Invalid

May 16, 2016

Summary: In the decision referenced below, the court declined to modify a judgment pursuant to Rule 60(b)(6) of the Federal Rules of Civil Procedure even though the PTAB had found several claims of the patent-in-suit invalid.

After a trial and an appeal to the Federal Circuit, which affirmed the royalty damages verdict in favor of the plaintiff, the defendant moved the district court to grant it relief from the judgment under Federal Rule of Civil Procedure 60(b)(6). The defendant argued that it would be unjust for the court to enforce a judgment in which ongoing collateral proceedings before the PTAB may render certain patents invalid and may have impacted the fairness of the trial.

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Failure to Institute Inter Partes Review Is Not Grounds for Common Law Estoppel to Prevent Defendant from Re-Litigating Issues Raised before the Patent Office

May 11, 2016

The defendant filed a petition for Inter Partes Review ("IPR") with the Patent Office. As part of its application, it submitted a 65 page brief along with several hundred page s of accompanying evidence. The plaintiffs submitted a 60 page brief along with its own evidence in response. After the Patent Office declined to institute review of the patent-in-suit, the plaintiffs contended that the denial of the IPR was a final decision by an administrative board and that the defendant was collaterally estopped from bringing those same arguments again before the district court.

After reviewing the law on collateral estoppel, the district court noted that the defendant "did not make it past the preliminary proceedings in their attempted IPR." The district court concluded that this was important for several reasons. "First, it means a 'trial' was never conducted o[n] the merits. Instead, the 'proceedings' were limited to a single petition brief, a response, and any accompanying evidence. Second, there was not a final written decision issued. The Board denied further review, that is, it denied initiating the IPR proceedings. Accordingly, no final written decision was necessary."

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District Court Grants Permanent Injunction after Summary Judgment Ruling in Favor of Patent Holder Where Defendant Was Direct Competitor and Patent Holder Had Lost Sales and Market Share

May 9, 2016

After the district court granted the plaintiff's motion for summary judgment of patent infringement, the district court addressed whether a permanent injunction was appropriate. The patent at issue, U.S. Patent No. 6,065,794 ('794 Patent), which is titled "Security Enclosure for Open Deck Vehicles," relates to storage management devices, or "trunk enclosures," that partition and establish a lockable trunk in the rear of convertible cars.

The district court then proceeded to address the four factor for determining whether an injunction should issue. Addressing irreparable harm, the plaintiff argued that it had suffered and will continue to suffer irreparable harm as a result of the defendant's infringement because the defendant is a direct competitor and the plaintiff has lost sales and market share due to Defendant's infringement. In response, the defendant argued that the plaintiff could not show irreparable harm because it had not demonstrated that customers purchase the infringing devices because of the patented features and therefore, the plaintiff had failed to satisfy the "causal nexus" requirement.

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District Court Refuses to Recognize "Apex" Doctrine for Documents Created by Inventor and Global Leader of Company

May 4, 2016

The defendant filed a motion to compel, seeking a wide array of discovery against Plaintiffs Dyson, Inc. and Dyson Limited (collectively, "Plaintiffs") to produce emails belonging to James Dyson ("Dyson"). Plaintiffs asserted that Dyson is Plaintiffs' "global leader" and one of the named inventors on the patents-in-suit.

Although plaintiffs agreed to produce Dyson's emails that are relevant to the issue of "inventorship," they refused to produce documents relating to other issues, such as claim construction or infringement. The plaintiffs refused to produce any such emails because the "apex doctrine" requires that the defendants show that they could not obtain such evidence from other sources before obtaining them from high-ranking corporate officials, such as Dyson.

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Experts Ordered to Produce Draft Reports Exchanged with Other Experts

May 2, 2016

In this patent infringement action, the plaintiff, BRP, alleged three counts of patent infringement against Arctic Cat concerning snowmobile frame construction and snowmobile rider positioning. BRP alleged patent infringement by at least 91 Arctic Cat snowmobiles regarding two frame patents and infringement by at least 95 Arctic Cat snowmobiles regarding the seat position patent.

During expert discovery, Arctic Cat moved the district court for an order compelling BRP to produce any documents, notes or emails exchanged between BRP experts Larson and Raasch, particularly focused on draft expert reports exchanged between the two experts.

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District Court Denies Request to Have Invalidity Case Proceed Prior to Infringement Case

April 28, 2016

The parties in this patent infringement action could not agree on the order of proof at trial. Defendants sought to present their invalidity defense first, arguing that if the patent is invalid, they could not be liable for infringement. The plaintiffs opposed the request to re-order the proof at trial and contended that their infringement claim should be presented first.

The district court noted that it had broad discretion to "exercise reasonable control over the mode and order of examining witnesses and presenting evidence." Federal Evidence Rule 611(a); see also Matter of Yagman, 796 F.2d 1165, 1171 (9th Cir. 1996) ("[T]he conduct and order of the trial are matters vested in the discretion of the district judge."); Gen. Signal Corp. v. MCI Telecomm. Corp., 66 F.3d 1500, 1507 (9th Cir. 1995) (reviewing district court's trial management for abuse of discretion).

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District Court Declines to Grant Voluntary Dismissal of Action with Motion for Judgment on the Pleadings Pending Where Patent Was Found Invalid by Another Court

April 26, 2016

After a district court in the Eastern District of Virginia invalidated the patent-in-suit because it did "not pass the two part test laid out by the Supreme Court in Mayo and Alice." Peschke Map Techs. LLC v. Rouse Properties Inc., No. 1:15-cv-1365, --- F. Supp. 3d ----, 2016 WL 1031295, at *7 (E.D. Va. Mar. 8, 2016), the plaintiff moved to dismiss a patent infringement action pending in a different district while a motion for judgment on the pleadings was pending.

The defendant had moved for judgment on the pleadings in its favor, arguing it cannot infringe on an invalid patent and that plaintiff is collaterally estopped from continuing to pursue its infringement claim. As noted by the district court, it is well known that a patentee is estopped from pursuing infringement claims for a patent that has been invalidated by another federal court, even if that action involved a different defendant. See Blonder-Tongue Labs., Inc. v. Univ. of Illinois Found., 402 U.S. 313, 333 (1971).

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District Court Grants Indicative Ruling to Vacate Judgment Based on Settlement of the Parties

April 20, 2016

In this patent infringement action, the parties reported that they had settled their dispute while it was pending before the Federal Circuit. The settlement was contingent upon the district court's granting an indicative motion that it would vacate the underlying judgment.

The district court began its analysis by noting that "Federal Rule of Civil Procedure 60(b) grants district courts the authority to relieve a party from a final judgment when 'applying [the judgment] prospectively is no longer equitable' or for 'any other reason that justifies relief.' Fed. R. Civ. P. 60(b)(5), (6). Rule 60(b) 'vests power in courts adequate to enable them to vacate judgments whenever such action is appropriate to accomplish justice.' Klapprott v. United States, 335 U.S. 601, 614-15 (1949). Whether to grant a Rule 60(b) motion 'lies within the sound discretion of the district court.' Neuberg v. Michael Reese Hosp. Found., 123 F.3d 951, 955 (7th Cir. 1997)."

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District Court Strikes Affirmative Defenses of Laches, Waiver, Estoppel and Acquiescence for Lack of Sufficient Detail

April 18, 2016

After the plaintiff filed a Second Amended Complaint against Fieldpiece Instruments, Inc. ("Defendant") for patent infringement, the Defendant filed its an answer raising a series of affirmative defenses to Plaintiff's claims. The Plaintiff then moved to strike several of the Defendant's affirmative defenses as insufficient or improper under Fed. R. Civ. P. 12(f).

The Plaintiff argued that Defendant's fourth affirmative defense, which includes "laches, waiver, estoppel, and acquiescence," is "improper, confusing and fails to give Plaintiff fair notice. As explained by the district court, in support of these four discrete defenses, Defendant's Answer only provided a single, conclusory sentence: "[Plaintiff] is barred in whole or in part from asserting the [patent-in-suit] against Fieldpiece under the equitable doctrines of laches, waiver, estoppel, and/or acquiescence."

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Covenant Not to Sue Insufficient to Warrant Dismissal of Counterclaims Where Covenant Contained Reservation of Rights

April 13, 2016

The plaintiff filed a motion to dismiss the defendants' patent invalidity counterclaims for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. Rule 12(b)(1) because the plaintiff withdrew its patent infringement claims and filed a covenant not to sue regarding those claims. In the motion to dismiss, the plaintiff asserted that the patent invalidity claims are therefore rendered moot by the covenant not to sue.

The district court then noted that in Dow Jones & Co., Inc. v. Ablaise, 606 F.3d 1338 (Fed. Cir. 2010), the court found that the offer of a covenant not to sue for patent infringement for any acts of infringement of a patent (past or future) was sufficient to divest the court of subject matter jurisdiction over a suit for declaratory judgment of invalidity. This was because the covenant "extinguished any current or future case or controversy between the parties." Id. at 1348. The Ablaise court noted that whether a covenant not to sue divests the court of jurisdiction depends on what is covered by the covenant. 606 F.3d at 1346-47. In Ablaise, the plaintiff "on behalf of itself and any successors-in-interest to the '530 patent", released and unconditionally covenanted not to sue Down Jones or any of its subsidiaries or divisions for infringement of the '530 patent "as of the date of this agreement based on Dow Jones' manufacture, importation, use, sale and/or offer of currently existing products or use of methods." Id. at 1345. When Dow Jones asserted that the covenant did not extend to Dow Jones' past products or existing licenses, Ablaise clarified that the covenant extended to past products and use. Id. The Court held that this "extinguishe[d] the controversy" between the parties, and divested the court of its Article III jurisdiction." Id. at 1349.

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District Court Orders Production of Settlement Agreements But Denies Request for Deposition That Would Go Beyond Four Corners of the Agreements

April 11, 2016

Plaintiffs filed a declaratory judgment action seeking a declaration that U.S. Patent No. 7,923,221 (the "Cabilly III patent"), owned by Defendants, is invalid and therefore Plaintiffs do not owe royalties with respect to Praluent. During the case, Plaintiffs requested production of five executed settlement agreements that resolved prior litigations involving the Cabilly II and III patents and also requested a deposition regarding the agreements and the negotiations that led up to the agreements. Defendants represented that it would not use the agreements in the litigation.

The district court began its analysis by noting that "[o]ne potential methodology for valuing a patent is based on comparable licenses. 'Such a model begins with rates from comparable licenses and then 'account[s] for differences in the technologies and economic circumstances of the contracting parties.' . . . The Federal Circuit has rejected the argument that licenses in settlement agreements are categorically irrelevant to a reasonably royalty. 'While the fact that a settlement or settlement offer comes in the midst of litigation may affect the relevance of the settlement or offer, there is no per se rule barring reference to settlements simply because they arise from litigation.' Astrazeneca AB v. Apotex Corp., 782 F.3d 1324, 1336 (Fed. Cir. 2015)."

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District Court Asks Google and Oracle to Consent to Ban on Internet Research of Jury Panel

April 6, 2016

Following up on the district court's previous ruling barring the use of jury questionnaires, the district court addressed the issue of whether any Internet research of the potential jurors should be permitted. After analyzing the reasons to issue an outright ban on such research, the district court explained that it would instead request that the parties agree not to conduct Internet research on the potential jurors.

The district court explained that "[t]rial judges have such respect for juries -- reverential respect would not be too strong to say -- that it must pain them to contemplate that, in addition to the sacrifice jurors make for our country, they must suffer trial lawyers and jury consultants scouring over their Facebook and other profiles to dissect their politics, religion, relationships, preferences, friends, photographs, and other personal information."

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District Court Declines to "Reverse" Bifurcate Trial to Try Damages before Patent Infringement and Calls Motion "Baseless"

April 4, 2016

California Home Spas, Inc. ("CHS") filed a motion to bifurcate the trial between damages and infringement and asserted that the damage trial should proceed first. As noted below, the district court denied the request finding that bifurcation is unusual and that defendant had not justified the unusual procedure in this case.

CHS contended that the damages in this case will be limited and urged the district court to bifurcate the case to first determine the amount of damages in order to facilitate any settlement discussions between the parties. The plaintiff argued that CHS's damages estimates are inaccurate and that bifurcating the case would only serve to delay the ultimate outcome of the case. The Plaintiff also asserted that CHS's motion was part of CHS's ongoing "vexatious and deceitful conduct."

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