PTAB Will Not Consider An Expert Report Prepared for Litigation And Created After the Filing of the Petition

January 27, 2015

In IPR2014-01510, 01511, and 01513, in connection with its preliminary response the Patent Owner Mag Aerospace Industries, LLC, submitted an expert report by its expert in the related litigation. The expert report addressed issues relevant to the IPR proceedings, including the patentability of the claims in light of the prior art asserted in the IPRs. As explained below, the Board held that the expert report constituted "new" evidence and thus violates 37 C.F.R. § 42.107(c) even though it was created for the related litigation and not expressly for the IPR proceedings.

The Petition was filed on September 16, 2014. The expert report, filed as Exhibit 2002, is dated November 4, 2014, and was filed on January 2, 2015, along with the Patent Owner's Preliminary Response. It also is uncontested that the expert report was created for related litigation according to the schedule for that litigation.

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District Court Denies Motion to Exclude Defendants' Experts from Claim Construction But Orders the Defendants to Supplement Their Disclosures or Face Exclusion

January 26, 2015

In this patent infringement action, the plaintiff filed a motion to exclude the defendants' claim construction experts. The plaintiff's motion was based on the argument that the defendants' disclosures did not comply with local rules in that they did not identify the actual opinions of the experts.

The district court agreed with plaintiff's position. "After consideration of the briefing and of Defendants' expert disclosures, the Court agrees with Plaintiff that Defendants' disclosures do not comply with Local Rule 4.2.d.2. insofar as Defendants simply identify the general subjects on which their experts may testify, but do not identify the actual opinions Defendants expect the experts to offer."

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District Court Holds Plaintiff and Plaintiff's Attorneys Jointly and Severally Liable for Attorney's Fees and Costs After Finding that Attorneys Knew of False Affidavits Filed with the Patent Office

January 22, 2015

After trial, HTC Corporation and HTC America, Inc. ("HTC") filed a motion seeking to recover attorney fees and costs from plaintiff's attorneys as well as from plaintiff Intellect Wireless, Inc. ("IW"). IW withdrew its initial opposition and conceded that the case was exceptional within the meaning of the Patent Act. HTC also contended that a finding should also be made that the attorneys for IW are jointly and personally required to satisfy HTC's attorney fees and costs because, among other things, IW's attorneys unreasonably and vexatiously multiplied the proceedings within the meaning of 28 U.S.C. § 1927.

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Court Orders Production of Work Product Documents under Crime-Fraud Exception to Attorney-Client Privilege Where Defendants Had Falsely Identified Source Code

January 20, 2015

In an earlier filed decision, the district court had previously found that Escort and its defense counsel had knowingly misled the plaintiff, Fleming, which warranted a sanction of attorney fees. As explained by the district court, "they falsely claimed that the source code identified as ESC17363 was the current operating source code for Escort's commercially sold products and that it provided a complete defense to Fleming's patent infringement charges."

After awarding attorney's fees, the district court turned to Fleming's motion to compel the production of certain documents. "Fleming seeks discovery of a wide variety of documents and communications in an effort to determine if Escort fabricated ESC17363 and falsely represented that it was created in the normal course of product development."
In response, Escort argued that all of the material sought by Fleming was protected by the work product doctrine and the attorney client privilege.

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Patent Owner: Preponderance of Evidence Standard Can Never Be Met Without Expert Testimony

January 16, 2015

In IPR2013-00357, Patent Owner Overland Storage, Inc. filed a request for rehearing of the final written decision holding that claims 1-11 of U.S. Patent No. 6,328,766 are unpatentable. The basis for the patent owner's reconsideration request was that, among other things, the petitioner failed to meet its burden of proof because it offered no expert testimony. As explained below, the Board rejected this position and held that a lack of expert testimony is not dispositive.

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Court Denies Motion for Extended Deposition Despite over 300 Objections During Deposition Where Defendant Failed to Raise Issue with Objections During the Deposition

January 14, 2015

In this patent infringement action, the Defendants requested that the court order a further Rule 30(b)(6) deposition of one of the deponents, Mr. Pang. In the motion, Defendants argued that Plaintiff's counsel objected more than 300 times during the course of Mr. Pang's deposition, and the objections impeded the fair examination of Mr. Pang.

In response, the Plaintiff argued that Defendants failed to show good cause to compel a second deposition of Mr. Pang and pointed out that during the deposition, Defendants never raised any issue with Mr. Pang's responses or with Plaintiff's counsel's objections. Plaintiff also argued that its objections were necessary and were stated in a concise, nonargumentative and nonsuggestive manner and noted that Mr. Pang answered every question after Plaintiff's counsel stated his objection on the record.

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District Court Sanctions Defendants for Failing to Agree to Standard Protective Order

January 12, 2015

In this patent infringement action, the plaintiff filed a motion for entry of a standard protective order after the defendant would not agree to sign a stipulated protective order. As explained by the district court, the plaintiffs sued defendants, alleging that they infringed on several patents.

After the lawsuit was filed, plaintiffs' counsel requested that defendants' counsel sign off on a stipulated protective order to protect certain confidential/proprietary materials that the parties were going to exchange in discovery. The district court explained that "[t]his is standard operating procedure in patent cases in federal court and the parties and the Court routinely sign off on them in these cases."

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PTAB Authorizes the Filing of a Motion for Sanctions Against Inventor

January 6, 2015

In IPR2014-00739 involving petitioner Shire Development LLC and patent owner LCS Group, LLC, the petitioner sought authorization to file a motion for sanctions against the inventor based on his communications with petitioner in violation of a prior order from the Board. The Board's prior order stated that "the inventor, Dr. Louis Sanfilippo, is prohibited from contacting Shire, Shire's employees, the expert retained by Shire for this proceeding (Dr. Timothy Brewerton), and counsel for Petitioner, except through counsel for Patent Owner or in the presence of counsel for Patent Owner." Paper 9. According to the Petitioner, "the [inventor's] e-mail, as well as the hyperlink contained within the e-mail, contained misrepresentations, and constituted harassment, as well as veiled threats against Petitioner."

The Petitioner also sought an adverse judgment based on a statement in the e-mail that "Patent Owner has determined that in order to best protect its interests it is foregoing any further involvement in the IPR process so that it can take the appropriate actions, including legal remedies, to resolve such representations made to the Board that have now caused Patent Owner harm, and so that it can pre-empt further harm from the undue burden of such representations."

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Smartflash v. Apple: District Court Excludes Damage Theory Based on Survey Responses That Were Insufficient to Show That the Patented Feature Alone Motivated Survey Respondents to Purchase the Accused Devices

January 5, 2015

Plaintiffs Smartflash LLC and Smartflash Technologies Limited (collectively "Smartflash") filed patent infringement actions against Apple, Inc. ("Apple"), Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Telecommunications America, LLC (collectively "Samsung"), HTC Corporation, HTC America, Inc., and Exedea, Inc. (collectively "HTC") (all collectively "Defendants") alleging infringement of several patents.

Smartflash's expert on damages, Mr. Mills, based portions of his damage calculations on surveys conducted by Dr. William Wecker. As explained by the district court, Smartflash hired Dr. Wecker, a statistician, to conduct four surveys related to consumer purchasing decisions of the accused products: (1) an "App Store" survey; (2) a "Movies and TV Shows" survey; (3) a "Music" survey; and (4) a "Books and Parental Controls" survey. Each of the surveys asked consumers if certain features "motivated" them to purchase accused products.

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District Court Declines to Hear Early Motion for Summary Judgment on Section 101 and Postpones Hearing until Claim Construction

December 31, 2014

In the pending patent infringement action between Netflix and Rovi, Netflix filed a motion for summary judgment, seeking a ruling that Rovi's patents are invalid under 35 U.S.C. § 101. After the motion was filed, the district court "advised Netflix that it was entitled to only one motion for summary judgment in this case, that would be heard after claim construction, and that it needed to seek leave if it intended to go forward with the already-filed motion."

The district court then found that as a matter of procedure Netflix's motion was improperly filed. "Netflix did not seek leave of court, nor did it meet and confer with Rovi, prior to filing its early motion for summary judgment. The court also wholly rejects Netflix's attempt to circumvent the court's rules by re-characterizing its motion as a motion for judgment on the pleadings under Rule 12(c)."

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Plaintiff Loses Motion for Summary Judgment after District Court Concludes that Dispute over Person of Ordinary Skill in the Art Is Not Material

December 29, 2014

The plaintiff, MyMedicalRecords ("MMR"), owns U.S. Patent No. 8,498,883 (the '883 Patent) entitled "Method for Providing a User with a Service for Accessing and Collecting Prescriptions." MMR asserted claims 1-3 of the '883 Patent against Quest Diagnostics, Inc., WebMD Health Corp., WebMD Health Services Group Inc., and Allscripts Healthcare Solutions, Inc. (collectively, "Defendants").

As explained by the district court, the asserted claims are method claims directed to providing users with a secure and private way to collect, access, and manage drug prescriptions online. Independent claim 1 recites a "means for scheduling one or more prescription refills concerning a drug prescription" limitation. Claims 2 and 3 depend on claim 1 and therefore incorporate this "means for scheduling" limitation by reference.

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Motion for Rule 11 Sanctions Denied After Plaintiff Granted Defendants Covenant Not to Sue Where Plaintiff Attempted to Make an Assessment of the Likelihood of Infringement

December 24, 2014

Phoenix Modular Elevator, Inc. ("Phoenix") filed a complaint for patent infringement against T.L. Shield & Associates, Inc. ("Shield") and Modular Elevator Manufacturing, Inc. ("MEM"). The patent at issue, United States Patent No. 6,079,520 (the "520 patent"), is entitled "Method of Retro-Fitting Elevators to Existing Buildings." As explained by the district court, the '520 patent describes a method of manufacturing an elevator and installing it onto an existing, multistory building.

During the case, Phoenix learned that a smaller than expected number of potentially infringing elevators were not actually infringing. As a result, Phoenix signed a covenant not to sue and explained that it was no longer economical to litigate the case. Phoenix then filed an unopposed motion to dismiss the complaint for lack of subject matter jurisdiction.

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Court Chastises Both Parties for Contentious and Unprofessional Behavior and Warns That Further "Offending Conduct" Will Lead to a Ban from Further Participation in Discovery

December 22, 2014

After a discovery dispute erupted in this patent infringement action, the court held a telephonic hearing on defendants' motion to compel discovery and for sanctions and plaintiff's cross-motion for a protective order. Although the court denied both motions without prejudice, it "chastised both sides for the contentiousness and unprofessionalism that has marred discovery in this case, particularly the depositions."

The court went further finding that "[b]oth sides are at fault and the attorneys for both sides must change their behavior significantly and immediately." The court also reminded the parties that "[i]n the March 3, 2014 preliminary pretrial conference order, the court ordered that 'the parties and their attorneys must at all times treat everyone involved in this lawsuit with courtesy and consideration... and must reasonably accommodate each other in all matters.'"

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Request to Join Summary Judgment Motion Based on Alice Four Weeks Before Trial Denied as Untimely

December 17, 2014

Four weeks prior to trial, defendant Cerner Corporation ("Cerner") filed a motion to join a summary judgment motion filed by a defendant in a related case involving the same patents. In the summary judgment motion in the related case involving Allscripts, Allscripts argued that the plaintiff's (RLIS) patents claim ineligible subject matter under section 101 of the Patent Act.

The motion in the related case was filed in May 2014 and gained strength after the Supreme Court's decision in Alice Corp. v. CLS Bank Int.'l, 134 S. Ct. 2347 (2014). Yet, Cerner did nothing. As explained by the district court, "[i]n fact, the Court held a lengthy motions hearing on October 1, 2014. Many of the numerous motions argued that day were joined by both Cerner and Allscripts. Rather than asking to join Allscripts' section 101 motion, Cerner made a tactical decision to sit on the sideline while Allscripts argued the Alice issue to the Court."

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Dismissal Based on Petitioner's Prior DJ Action Cannot Be Waived

December 16, 2014

In a covered business method review filed by petitioner GTNX, Inc., the petitioner sought review of four patents owned by patent owner INTTRA, Inc. The PTAB instituted trial on all four patents following the patent owner's preliminary response. Notably, in its preliminary response the patent owner did not raise that the reviews were barred under 35 U.S.C. § 325(a)(1) based on petitioner's prior invalidity challenge of the patents in a declaratory judgment action before a United States District Court. After the parties briefed the issue to the Board, the Board vacated its Decisions on Institution and terminated the CBMs based on the petitioner's prior declaratory judgment action.

In its precedential SecureBuy decision, the Board noted that "§ 18 of the Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284, 329-31 (2011) ("AIA") "provides that covered business method patent review proceedings shall employ all the statutory standards and procedures of a post-grant review (i.e., 35 U.S.C. §§ 321-29), except for those expressly excluded." 35 U.S.C. § 325(a)(1), which is not expressly excluded by § 18 of the AIA, states:

(1) POST-GRANT REVIEW BARRED BY CIVIL ACTION.--A post-grant review may not be instituted under this chapter if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.

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