March 2013 Archives

Motion for Sanctions Based on Threats of Counsel to Reexamine Patents and to Take Other Action Against Outside Counsel, Although at Best "Silly Posturing and at Worst Unprofessional," Insufficient to Justify Sanctions Because of First Amendment

March 27, 2013

Plaintiff Vasudevan Software, Inc. ("VSi") filed a motion for sanctions against defendant MicroStrategy ("MS"). The sanctions motion was based on statements that VSi characterized as threats against both VSi and its counsel by an outside counsel and a principal of MS, in conjunction with MS's filing of a request for reexamination of four of VSi's patents and another patent held by Zillow, a client of VSi's outside counsel. Rather than deny that the statements were made, MS asserted that even if the statements were made they could not be sanctioned for making them because of the First Amendment.

The district court explained the background facts as follows: "Sean Pak, a partner at Quinn, Emanuel, Urquhart & Sullivan, LLP, counsel for MS, contacted Brooke Taylor, a partner at Susman Godfrey, counsel for VSi. He requested a meeting include the principals of VSi and MS. Pak said MS was planning to be "aggressive" in defending against VSi's claims in this case and would take "initiatives" toward that end, including filing reexamination petitions with the USPTO to reexamine VSi's patents. Pak proposed flying to Seattle (where the Susman Godfrey office in which Taylor works is located) to discuss these "initiatives" with VSi and its counsel. Taylor agreed and Pak, Taylor and Jordan Conners (a Susman Godfrey associate also representing VSi) met in person at Susman Godfrey's Seattle offices on September 10, 2012. Additional VSi counsel Les Payne and Eric Enger of Heim, Payne, & Chorush, LLP, VSi principals Mark and Helen Vasudevan, and MS Executive Vice President and General Counsel Jonathan Klein participated in the meeting over the phone. Klein stated that he would not pay VSi anything to settle VSi's patent infringement claims against MS and, if VSi did not immediately dismiss the case, threatened to make the litigation as painful as possible for VSi, file reexamination petitions with the USPTO for all of VSi's patents in suit, and take action against Susman Godfrey. When Payne specifically asked Klein what he meant by taking action against Susman Godfrey, he refused to answer and suggested that Susman Godfrey would have to wait and see. "

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Canon Establishes Economic Prong of Domestic Industry Requirement on Summary Determination in ITC Proceeding

March 25, 2013

Complainants Canon, Inc., Canon U.S.A., Inc. and Canon Virginia, Inc. ("Canon") filed a motion for summary determination that Canon satisfied the economic prong of the domestic industry requirement for each of the patents in the investigation. Canon asserted that it satisfied "[t]he economic prong of the domestic industry requirement based on all three subsections of § 13379a)(3). Mem. At 1. Namely, Canon argues that its significant investment in plant and equipment, its significant employment of labor and capital, and its substantial investment in the exploitation of the asserted patents, including engineering and quality assurance activities, each independently meet the economic prong of the domestic industry requirement."

As explained by the administrative law judge, "[i]n patent-based proceedings under section 337, a complainant must establish that an industry "relating to the articles protected by the patent...exists or is in the process of being established" in the Untied States. 19 U.S.C. § 1337(a)(2). Under Commission precedent, this domestic industry requirement of Section 337 consists of a "technical prong" and an "economic prong." Certain Variable Speed Wind Turbines and Components Thereof, Inv. No. 337-TA-376, Comm'n Op. at 7 n.13 (Oct. 28, 1997) The "technical prong" of the domestic industry requirement is satisfied when the complainant's activities relate to an article protected by the patent. 19 U.S.C. § 1337(a)(2). The economic prong is satisfied by meeting any one of three criteria with regard to articles protected by each of the patents at issue: (A) significant investment in plant and equipment; (B) significant employment of labor or capital; or (C) substantial investment in its exploitation, including engineering, research and development, or licensing. 19 U.S.C. § 1337(a)(3). Given that these criteria are in the disjunctive, satisfaction of any one of them will be sufficient to meet the domestic industry requirement."

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Apple v. Samsung: The Next Round Begins in District Court with the Court Ordering the Case Streamlined Limiting Each Side to Twenty-Five Asserted Claims and Accused Products and Stating "the Court Will Not Permit the Parties to Involve over Fifty Experts

March 20, 2013

In the next round of litigation in the ongoing war between Apple and Samsung over Smartphones, the district court ordered the parties to file a joint status report to address whether the new action should be stayed pending the appeal in the prior litigation. As explained by the district court, "[o]n march 7, 2013, the parties in this action filed a joint status report regarding whether they believed that a stay of this litigation was appropriate pending resolution of the appeal of the parties' separate litigation in Civil Action No. 11-cv-01846") See ECF No. 393."

The district court then declined to stay the case pending the appeal based on the parties' joint status report. "The District Court has broad discretion to stay proceedings as an incident to its power to control its own docket." Clinton v. Jones, 520 U.S. 681, 706 (1997). In light of the parties' joint status report, the Court will not stay the case. Accordingly, Defendants Samsung Electronics Co., Ltd., Samsung electronics America, Inc, and Samsung Telecommunications America, LLC shall not file a motion seeking this administrative relief. If circumstances change, the Court will notify the parties."

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The PTAB Clarifies Scope of Permissible Discovery in Inter Partes Review Proceedings: Part 1 of 2

March 19, 2013

In this two-part blog, the standards for seeking discovery are discussed in the context of a recent order in Garmin International, Inc. et al. v. Cuozzo Speed Technologies LLC, IPR2012-00001. In Garmin, the Patent Trial and Appeals Board ("PTAB") (A.P.J.s Lee, Tierney and Cocks) issued an order regarding the patent owner's (Cuozzo) request for additional discovery. In its order, the Board clarified what constitutes routine discovery and what constitutes additional discovery, including its explanation of the showing that must be made under the "interests of justice" standard for obtaining additional discovery.

Regarding routine discovery, the Board noted that the Board's authorization is not required for a party to conduct routine discovery. The Board explained that "[u]nder 37 C.F.R. § 41.51(b)(1)(i), '[u]nless previously served or otherwise by agreement of the parties, any exhibit cited in a paper or in testimony must be served with the citing paper or testimony.' Under 37 C.F.R. § 41.51(b)(1)(iii), '[u]nless previously served, a party must serve relevant information that is inconsistent with a position advanced by the party during the proceeding concurrent with the filing of the documents or things that contains the inconsistency' [privileged information excepted]." Applying these standards, the Board ruled that Garmin was not required to produce the file histories for the prior art patents cited in its petition because it did not rely on those file histories and there was nothing in Cuozzo's motion that suggested Garmin failed to comply with the routine discovery requirement under 37 C.F.R. § 41.51(b)(1)(iii). However, the Board did require that the parties confirm that they had complied with the routine discovery obligations of 37 C.F.R. § 41.51(b)(1)(iii).

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Carnegie Mellon v. Marvell: After a $1 Billion Damage Award, Marvell Loses Motion to Compel Documents for Its Laches Defense Because It Waited Too Long to File and the Court Would Not Entertain Such "Wild Goose Chases" at This Late Juncture

March 18, 2013

Carnegie Mellon University ("CMU") filed a patent infringement action against Marvell asserting that Marvell had infringed two of its patents. Two months after the jury returned a verdict in excess of $1 Billion, Marvell filed a motion to compel certain documents based on entries on CMU's privilege log that it wanted to use in its laches defense. CMU objected that there was no good cause for the untimely discovery of privileged materials.

As explained by the district court, "Marvell requested that laches be presented to the jury on an advisory basis, and given the parties' argument on same during the pretrial conference, the Court ordered further briefing on the issues in their trial briefs on November 20, 2012. (Docket Nos. 637, 645, at 54-56; 648 at 192, 230-31). On November 28, 2012, the Court held that as Marvell had not proffered specific evidence to demonstrate when CMU first became aware of Marvell's infringement or what evidentiary or economic prejudice Marvell had allegedly sustained due to CMU's alleged delays tot hat point, the issue was not appropriately 'teed up' for a decision by an advisory jury and would be decided by the Court in a subsequent proceeding."

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Patent Case Rulings from the Central District of California: March 1 to March 15, 2013

March 16, 2013

The following eighteen decisions were reported in patent cases pending in the Central District of California for the period of March 1 through March 15, 2013.

CACD Decisions5.JPGThe authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Greg Cordrey at 949.623.7236 or GCordrey@jmbm.com/a>.

PTAB Denies Petition for Inter Partes Review

March 14, 2013

In IPR2012-00041, the Patent Trial and Appeals Board ("PTAB") (A.P.J.s Medley, Blankenship and Bisk) issued an order in Synopsys, Inc. ("Petitioner") v. Mentor Graphics Corporation ("Patent Owner") denying Synopsys' petition. In its petition, Synopsys sought review of U.S. Patent No. 6,947,882 relating to systems for emulating integrated circuit designs. Synopsys argued that claims 1-14, 17-20 were anticipated and/or rendered obvious based on four prior art U.S. patents, one of which was incorporated by reference into one of the other three patents. Notably, the '882 patent is involved in concurrent litigation with a Markman hearing set for July 23, 2013 and a jury trial set for June 16, 2014.

In declining to institute an inter partes review of any of the challenged claims on any of the proposed grounds, the Board agreed with the Petitioner that the claims terms should be given their ordinary meaning, except for a single claim limitation. The exception, however, relates to the claim term "wherein clocking of the second time multiplexed interconnection is independent of clocking of the first time multiplexed interconnection." About this term, the Board stated that the Petitioner implicitly asserts that the independent clock signal limitation encompasses asynchronous clock signals originating from a single clock. As explained below, however, the Board's construction of this term in a manner different that the Petitioner's implied definition turned out to be fatal to Synopsys' petition for inter partes review.

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Apple's Motion to Transfer Action Brought by Core Wireless Denied Where Apple Failed to Identify Specific Witnesses Who Would be Inconvenienced if the Case Were Not Transferred

March 13, 2013

Core Wireless filed an action against Apple that alleged infringement of several patents in the Eastern District of Texas. Apple moved to transfer the case pursuant to 28 U.S.C. §1404(a).

As explained by the court, "Core Wireless is a corporation duly organized and existing under the laws of the Grand Duchy of Luxembourg, with a principal place of business at 16, Avenue paseur L-2310 Luxembourg. . . . Core Wireless maintains a wholly-owned subsidiary, Core Wireless Licensing Ltd. ("Core Wireless USA"), a Texas corporation with a principal place of business at 5700 Granite Parkway, Suite 960, Plano, TX 75024. . . .Core Wireless USA has 6 employees who live in or near Plano, TX, and is Director Jerry Mills lives full time in Dallas, TX. Id. at ¶ 16."

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Claim for Induced Infringement Survives after Akamai Where Inference of Intent to Induce Infringement Was "not only reasonable; it is almost inescapable"

March 11, 2013

Plaintiffs Transunion Intelligence LLC and Trans Union LLC (collectively, "Transunion") filed a patent infringement action against Search America over two patents that are directed to a computer-implemented method and software that is used to access a person's eligibility to receive financial assistance for healthcare services. Transunion asserted both direct infringement and inducing infringement of one of the patents-in-suit.

Search America moved to dismiss the inducing infringement claim, asserting that Transunion had failed to plead that Search America had the specific intent to infringe the patent-in-suit. The district court disagreed. "As discussed at he hearing on Search America's motion, however, the Court believes that Transunion has pleaded a plausible claim of induced infringement against Search America. In its complaint, Transunion pleads that Search America knew of the '937 patent, and Transunion pleads specific facts in support of that allegation - namely, that Search America studied the '937 patent to distinguish it from Search America's own patent application. Fourth Am. Compl. para. 11. Transunion also alleges that Search America performed all but one of the steps of the '937 patent and that either Search America or a customer working with Search America performed the remaining step - namely, the inputting of patient data. Fourth Am. Compl. Ex. B at 2. Transunion further alleges that Search America's customers performed the 'inputting' step by populating an on-line form created, controlled, and provided by Search America. Id."

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Raising Affirmative Defense of Invalidity In An Answer Does Not Deprive A Party of Standing to Seek Inter Partes Review

March 7, 2013

In IPR2012-00022, the Patent Trial and Appeals Board ("PTAB") (A.P.J.s Tierney, Green and Robertson) issued an order in Ariosa Diagnostics ("Petitioner") v. Isis Innovation Limited ("Patent Owner") regarding Ariosa's standing. Section 315 specifies that "[a]n inter partes review may not be instituted if, before the date on which the petition for such review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent." Notably, however, Section 315 exempts the filing of a counterclaim challenging the validity of a claim of a patent from the definition of a "civil action." 35 U.S.C. § 315 (a)(3). The issue presented here is whether raising the defense of invalidity in an affirmative defense falls with the definition of a "civil action" under Section 315.

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Supreme Court's Decision in Guam v. Minton Has Immediate Impact and Leads to Vacating of Trial so that Court Could Determine If It Had Jurisdiction over Case

March 6, 2013

In Gunn v. Minton, 2013 WL 610193 (Feb. 20, 2013), a unanimous United States Supreme Court determined that state courts can address legal malpractice disputes even though the underlying action may turn on issues involving patents. As expected, this ruling, which significantly narrowed federal court jurisdiction, is likely to impact many cases pending in district courts around the country.

As an example, in a case pending against Boston Scientific in district court, Boston Scientific immediately challenged the district court's jurisdiction after the Gunn decision. "Just seven days before the jury trial schedule in this case, the United States Supreme Court handed down Gunn v. Minton, 2013 WL 610193 (Feb. 20, 2013). In a letter dated February 21, 2013, Boston Scientific brought this case to the Court's attention, suggesting that under Gunn, the Court lacks jurisdiction over this case. By response dated February 22, 2013, Mirowski contended that jurisdiction existed and urged the Court to hold fast to the trial date."

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Plaintiff's Initiation of ITC Investigation Leads to Stay of District Court Case, including Stay of Patent not Involved in ITC Investigation

March 4, 2013

Avago Technologies ("Avago") filed a patent infringement action against IPtronics, Inc. ("IPtronics") asserting infringement of two U.S. Patents, patent nos. 5,359,447 (the '447 patent) and the 6,947,456 (the '456 patent) in the United States District Court for the Northern District of California. After a second amended complaint was filed, Avago filed a complaint at the International Trade Commission ("ITC") alleging infringement of the '456 patent, but did not allege infringement of the '447 patent. The ITC instituted an investigation naming IPtronics as a respondent.

As noted by the district court, "[w]hen parallel actions are proceeding before a district court and the International Trade Commission, 28 U.S.C. § 1659 requires the district court to stay 'Any claim that involves the same issues involved in the proceeding before the Commission' until the 'Determination of the Commission becomes final" upon request by 'a party to a civil action that is also a respondent in the proceedings before the [ITC].'"

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Patent Case Rulings from the Central District of California: Feb. 16 to Feb. 28, 2013

March 1, 2013

The following nine decisions were reported in patent cases pending in the Central District of California for the period of February 16 through February 28, 2013.

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The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Greg Cordrey at 949.623.7236 or GCordrey@jmbm.com/a>.