June 2012 Archives

Eastern District of Texas Orders Parties to Address Issues Pertaining to Consolidating "Serially" Filed Patent Infringement Cases on the Same Patent Against Different Defendants

June 28, 2012

The plaintiff filed several patent infringement actions against different defendants in the Eastern District of Texas. Because of the America Invents Act ("AIA"), the plaintiff filed the actions separately. The district court scheduled a combined scheduling conference for the separate cases and prior to the scheduling conference requested that the parties address procedures for consolidation given the administrative burdens placed on the parties and the courts due to the new joinder provisions of the AIA.

As the district court explained, "Congress has recently addressed the issue of joinder in patent cases in section 19 of the Leahy-Smith America Invents Act, which was signed into law in September 2011. . . . In particular, the new joinder provision provides that accused infringers may be joined in one action as defendants, or have their actions consolidate for trial, only if the allegation of infringement arise out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process."

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Court Denies Provision of Protective Order That Would Restrict Transmission of Protected Information Outside of the United States

June 26, 2012

In this patent infringement action, the district court analyzed the parties' disputes regarding whether a protective order should include a provision to restrict the transmission of center sensitive documents outside of the United States. The defendants requested a provision in the protective order that would preclude the transmission of highly confidential information outside of the United States and that would preclude the transmission of confidential information outside of the United States, except for disclosure to principals and employees of a party who agreed to be bound to the protective order and would also agree to submit to the district court's jurisdiction.

Defendants' requested the restriction due to the highly sensitive information:

Defendants argue that the above restrictions should be imposed because of the "extremely sensitive nature of the Protective Material, the heightened risk of an inadvertent or intentional discloser in a foreign jurisdiction beyond this Court's reach and the myriad of jurisdictional and enforcement issues, practical and legal, that would arise in the event of a breach." Specifically, Defendants take issue with Plaintiff's plan to outsource litigation services to overseas vendors. In support of a complete bar on overseas transmission, Defendant point to a situation in an unrelated case before Judge Everingham in the District where a security breach occurred at an overseas third party vendor potentially causing sensitivity information to be leaked despite the existence of a protective order. See id. At 16 (citing Versata Software, Inc. v. SAP America, Inc., et al., Civ. No. 2:07-cv-153, Doc No. 572, slip op. at 13 (E.E. Tex Sept. 9, 2011)).

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Multi-District Panel Centralizes Case at Request of Plaintiff and Moves All Actions to Illinois

June 21, 2012

Plaintiff Forest Laboratories, Inc. ("Forest") moved to centralize their litigation in the District of Delaware. The litigation consisted of two action pending in the District of Delaware and the Northern District of Illinois. The defendants in the Delaware action did not oppose centralization, but one of the defendants suggested selection of the Northern District of Illinois as the transferee district. The defendants in the Northern District of Illinois opposed centralization and, alternatively, suggested selection of the Northern District of Illinois as the transferee forum.

Forest brought the actions in this litigation after various generic drug manufacturer defendants submitted Abbreviated New Drug Application seeking the approval of the Food and Drug Administration to make and sell generic versions of the patented Forest drug Bystolic before the drug's patent expires. Bystolic reportedly contains a beta-adrenergic blocking agent, or "beta blocker," called nebivolol hydrochloride and is indicated for the treatment of hypertension, to lower blood pressure. Alkem and Indchemie oppose centralization by arguing, inter alia, that (1) centralization is unnecessary Alkem and Indchemie oppose centralization by arguing, inter alia, that (1) centralization is unnecessary because only two actions are pending in two districts, and (2) the facts among the different actions will vary, given the difference proposed generic formulations at issue. We respectfully disagree with these arguments. Even though only two actions are pending, the Panel has recognized that "actions involving the validity of complex pharmaceutical patents and the entry of generic versions of the patent holder's drugs are particularly well-suited for transfer under Section 1407." In re Alfuzosin Hydrochloride Patent Litig., 560 F.Supp. 2d 1372, 1372 (J.P.M.L. 2008). Indeed, the Panel has frequently centralized litigation compromised of only two Hatch-Waxman Act cases.

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Parallel Networks Cases Centralized in the Eastern District of Texas Over Parallel Networks Objection

June 21, 2012

Parallel Networks had several lawsuits pending against different defendants in different district courts. The pending litigations consisted of nine actions, pending in the Eastern District of Texas and the District of Delaware. Four defendants sought centralization of the litigation in the Eastern District of Texas. Three of the District of Delaware defendants supported the centralization in its entirety and seven of the Eastern District of Texas defendants did so as well. The patent holder, Parallel Networks, opposed centralization and alternatively suggested selection of the Northern District of Texas as the transferee forum.

As the Panel explained, Parallel opposes centralization primarily because there3 are effectively only two actions involved in this litigation (the Eastern District of Texas actions have been consolidated in a single action) and, given the disparity in the progress of the actions, voluntary cooperative efforts among counsel are preferable to formal centralization. We respectfully disagree. Though the number of actins and districts involved in this litigation is indeed low, the litigation involves over 30 defendants. The Eastern District of Texas actions have progressed somewhat further than the Delaware action, but additional pretrial rulings (including claims construction rulings on the disputed terms) will be necessary to resolve Parallel's claims against the over 20 defendants for whom summary judgment was denied. While we applaud and encourage any cooperative efforts undertaken by parties to this litigation, centralization under Section 1407 allows us to assign these actions to a single judge, who has already gained familiarity with the parties and the patent, who can ensure that pretrial proceedings are conducted in a streamlined manner leading to the just and expeditious resolution of all actions to the overall benefit of all parties and the courts. See In re Brimonidine Patent Litig. 507 F. Supp.2d 1381, 1382 (J.P.M.L. 2007)

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Apple v. Motorola: Apple Wins Motion for Summary Judgment of Non-Infringement

June 14, 2012

Apple moved for summary judgment with respect to Claim 5 of Motorola's U.S. Patent No. 6,175,559 (the '559 patent). Claim 5 of the '559 patent provides for a A method of generating preamble sequences in a CDMA system, the method comprising" steps of forming an outer code, forming an inner code and multiplying the outer code by the inner code to generate a preamble sequence.

A couple of weeks earlier, the district court interpreted the claim language to mean that the third step of multiplying the chips of the inner code by the chips of the outer code only occurs after the inner code and outer code are completed. Apple argued on summary judgment that its devices do not completely form the alleged inner and outer codes before those codes are combined to generate the preamble sequence.

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Apple's Expert in ITC Proceeding Precluded from Offering Certain Testimony Regarding Non-Infringement and Lack of Domestic Industry

June 12, 2012

Complainant, Samsung, filed a motion to strike certain paragraphs of Apple's expert's, Dr. James Davis, report regarding non-infringement and lack of a domestic industry. Samsung asserted that the Davis Report contained arguments that Apple failed to disclose in response to interrogatories and, as a result, Samsung was prejudiced because the untimely arguments prevented Samsung's infringement and domestic industry expert from addressing them. Samsung explained that after late discovery from a non-party, Qualcomm, Apple should have supplemented its contentions and instead waited until the rebuttal report to assert for the first time that Samsung had not shown sufficient evidence to establish the domestic industry requirement.

Apple responded by arguing that Dr. Davis's opinion was not new because Apple's interrogatory responses expressly identified that Samsung failed to put forth evidence that the domestic industry products input the specific information needed for the patent-in-suit. Apple also asserted that Samsung was engaging in discovery gamesmanship in that the Qualcomm deposition occurred after Samsung's initial report was submitted and that the Administrative Law Judge had approve the late deposition.

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Sanctions for Alleged Spoliation Against Samsung Denied in Ongoing Battle with Apple by Administrative Law Judge at the ITC

June 8, 2012

In the running battle between Apple and Samsung that is playing out in courts and agencies around the world, Apple filed a motion seeking sanctions against Samsung for the alleged spoliation of evidence. Apple alleged that Samsung should be sanctioned for spoliation because Samsung deliberately failed to take institutional steps to retain or back up emails sent or received using its computer email system. Apple also alleged that Samsung had no systematic or company-wide oversight procedures in place to ensure that its employees make appropriate decisions as to which emails are relevant and responsive or to ensure that relevant and responsive emails are in fact saved to employee hard drives.

Samsung denied Apple's allegations and asserted that it began preserving documents when Apple filed its complaint and that Apple had not shown that Samsung or any of its employees destroyed relevant data after that date. Samsung also stated that even if Apple could establish that evidence was destroyed after the complaint was filed, Apple could not show that Samsung acted in bad faith or with any intent to impair Apple in its case. Samsung also noted that the majority of the accused products were released after the complaint was filed and therefore "[a]ny emails relating to Apple's claims against these products (design, copying, etc.) would have to predate their release, meaning that any documents not kept would have been deleted pursuant to Samsung's standard email retention policy. Hence, there is no basis for Apple's claim that evidence of design and development, copying, or design around has been destroyed."

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"Stop the Shenanigans" -- Court Orders Parties' Attorneys to Behave Themselves at Depositions

June 6, 2012

The district court began its opinion with a simple direction to the parties: "Stop the shenanigans at depositions. Period." The district court went on to explain that "[t]his Court has no patience for behavior like that exhibited at the deposition . . . It is unnecessary and unacceptable."

Showing that videotape evidence may be the best evidence of what occurs at a deposition, the district court also wanted to know if there was a videotape in existence: "Is there a videotape of the Batten deposition? If so, please provide it to the Court immediately on a CD-ROM/DVD."

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Defense Expert Report on Non-Infringement Stricken Even Though Plaintiff Waited Until Just Before Trial to Move to Strike and Had Possession of Report for Nearly a Year

June 4, 2012

In this patent infringement action, plaintiff Hoyt Fleming ("Fleming") moved to strike certain paragraphs of the report of Escort's expert on its defense of non-infringement. One of Escort's defenses to the charge of infringement was that Escort's devices lock out false signals by using a process different from that described in Fleming's patents. Escort asserted that false signals are locked out of Fleming's invention when the device reaches a predetermined distance from the predetermined position of a false signal, but with Escort's devices, the distance from a lockout varies.

Accordingly, as the district court explained, "Escort's expert, Dr. Grindon, concluded, among other things, that 'the asserted claims of the '038 patent are not infringed' by Escort's devices. Id. at pp. 1-8. In his claim-by-claim analysis set forth in that Supplemental Report -- at paragraphs 21 through 42 -- he concludes that Escort's products do not infringe claims 1, 3, 5, 6, 7, 8, 23, 25, 26, and 27 of the '038 patent because those claims describe a device that locks out an alert if the device is a predetermined distance from a predetermined false signal, while with the Escort products, 'the distance from a lockout varies.' Id."

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Research in Motion: Purported Inventor's Late-Filed Lawsuit Dooms Claim of Co-Inventorship Because Laches Based on Economic Prejudice Bars the Claims

June 1, 2012

In this dispute over the inventorship of a patent that is integral to BlackBerry products, the district court held a bench trial on the applicability of laches. The issue at the bench trial turned on whether RIM suffered economic prejudice as a result of plaintiff's delay in bringing the lawsuit.

The complaint to correct the inventorship of the patent-in-suit was filed on August 1, 2011. After a summary judgment motion disposed of the state law claims, the district court found that RIM had established a presumption of laches on the correction-of-inventorship claim but the plaintiff had rebutted the presumption by showing a lack of evidentiary or economic prejudice that resulted from the unreasonable delay in bringing the lawsuit. The district court then ordered a bench trial to resolve the disputed issues of fact as laches is an equitable defense that is heard by the court and not a jury. After the bench trial, the district court made various findings of fact.

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