April 2012 Archives

Inventor Not Required to Answer Hypothetical Questions at Deposition Because He Was Not Designated as an Expert

April 30, 2012

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.

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Apple v. Samsung: Court Grants Motion to Compel Deposition Testimony of Samsung High-Level Executives But Limits the Time of the Depositions

April 27, 2012

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."

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Court Denies Motion to Exclude Defendant's Employee Expert Even Though Employee Expert Testified at Deposition That His Report Contained No Opinions and Repeatedly Invoked the Attorney-Client Privilege During Deposition

April 25, 2012

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.

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Barebones Complaint Leaves Nestlé With Bitter Taste

April 24, 2012

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.

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Oracle v. Google: Google Moves to Exclude Portions of the Court-Appointed Expert's Report on Patent Damages

April 23, 2012

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."

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Apple v. Motorola: "The Witness Lists Are Too Long"

April 20, 2012

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.

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Plaintiff Prohibited from Offering Evidence of Defendants' Overall Economic Status and Profitability During Patent Infringement Trial

April 18, 2012

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.

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Damage Award of $5 Million Upheld Where Plaintiff Submitted Expert Testimony of Running Royalty Rate and Jury Was Not Required to Adopt Either of the Parties Royalty Calculations

April 16, 2012

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."

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Thereasense Round Two: Even After "Seismic Shift" in the Law of Inequitable Conduct, District Court Applies Federal Circuit's New Standard and Still Finds Patent Invalid Due to Inequitable Conduct

April 13, 2012

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. ..."

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Patent Holder Loses Request to Extend Date for Filing Preliminary Infringement Contentions Where It Did Not Act Diligently in Seeking Relief from Court

April 11, 2012

ArrivalStar filed a motion seeking to extend the deadline for providing its preliminary infringement contentions arguing that the district court's scheduling order only provided fourteen days for ArrivalStar to prepare and serve its preliminary infringement contentions, that ArrivalStar was misled by Enroute Systems, the opposing party, into believing that the case management deadlines were on hold while the parties explored settlement and denying an extension would severely prejudice ArrivalStar by precluding consideration of its claims on the merits.

In analyzing ArrivalStar's request, the district court noted that case management deadlines could only be modified by a showing of good cause under Fed.R.Civ.P. 16(b)(4). The district court then concluded that none of the arguments raised by ArrivalStar established good cause for the requested extension.

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Eastern District of Texas Limits Plaintiff to 40 Claims Across 10 Patents But Orders Dell to Respond to Interrogatory Seeking Non-Infringement Contentions Prior to Claim Construction

April 9, 2012

Plaintiff, Round Rock Research ("Round Rock"), filed a motion to compel non-infringement contentions from Defendant Dell ("Dell") and Dell moved to limit the number of asserted complaints brought by plaintiff. Round Rock asserted ten patents against 125 products of Dell and Dell contended that Round Rock had asserted approximately 82 claims from the ten patents-at-issue. As a result, Dell asserted that the large number of claims was unmanageable for claim construction, fact discovery, expert reports, depositions and trial.

In considering Round Rock's motion to compel non-infringement contentions, the district court noted that the plaintiff requested a response to its interrogatory seeking Dell's non-infringement contentions. In response, Dell asserted that the interrogatory was prematurely seeking its position on claim construction and that the interrogatory was unduly burdensome and unreasonable given the number of claims asserted by Round Rock.

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Stay Pending Reexamination Granted, Even Though Plaintiff and Defendant Were Competitors, Because Plaintiff Did Not Move for a Preliminary Injunction

April 6, 2012

The defendant filed a motion to stay pending reexamination of the plaintiff's patent. The district court noted that the plaintiff and defendant are both participants in the oxygen concentrator market. Inogen filed the action on November 4, 2011 asserting infringement of two of its patents. On February 8, 2012, Inova filed a request for inter partes reexamination of both of the patents-in-suit. The PTO acknowledged receipt of the reexamination request and the district court noted that the PTO must decide whether to grant the reexamination request within three months.

After discussing the relevant case law on stays pending reexamination, the district court analyzed the stage of the litigation, simplification of issues, undue prejudice or clear tactical disadvantage to the plaintiff, With respect to the stage of the litigation, the district court noted that Imogen implicitly conceded that the case is in an early stage of litigation and that no discovery dates or trial dates would be set until mid-April. Accordingly, the district court found that this factor weighed in favor of a stay.

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Oracle v. Google: Oracle Strikes Back and Succeeds in Striking Part of Google's Expert Report on Damages

April 4, 2012

In response to Oracle's third expert on damages (which was submitted after the district court had struck parts of the first two reports), Google's damage experts were permitted to submit supplemental damage reports. With respect to the patent damages, the district court summarized the supplemental report as follows: "In his supplemental report on patent damages, Dr. Leonard conducts a so-called 'forward citation' analysis to arrive at his own ranking of the 22 patents from Dr. Cockburn's report. This was done to critique Dr. Cockburn's 'upper bound' opinion that three patents in suit were the most valuable of the 22. Now that Dr. Cockburn's 'upper bound' opinion has been stricken and the number of the asserted patents reduced, the only remaining issues is whether Dr. Leonard can opine that the '104 patent ranks in the 'middle or worse'" of the top 22 patents. Specifically, whether Dr. Leonard can opine that the '104 patent ranks 17th among the top 22 patents under the forward-citation analysis (Rpt. At 7)."

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Judge Posner Consolidates Multiple Defendants Sued in Separate Actions and Raises Questions Whether Plaintiffs, if Successful in Establishing Liability, Will Be Entitled to Non-Trivial Damages

April 2, 2012

As a preliminary matter, Judge Posner consolidated the six patent cases that were filed by Brandeis University against various defendants, finding that they involve a number of common issues of law and that judicial efficiency would be maximized by consolidation. "These six cases are hereby consolidated under 1:12-cv-01508, pursuant to Fed. P. 42(a). The parties agree that they involve a number of common issues of law, and I believe that judicial efficiency will be maximized by consolidation. I will consider in due course the defendants' request for separate trials of issues, particularly damages, that vary significantly across the six cases."

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