July 2013 Archives

Declaratory Judgment Jurisdiction Found Where Patent License Negotiations Reached an Impasse and NDA Did Not Preclude a Lawsuit

July 31, 2013

Plaintiff Biomet, Inc. ("Biomet") filed a complaint for Declaratory Judgment against Bonutti Skeletal Innovations, LLC ("Bonutti") seeking a declaration that the manufacture, use, or sale of Biomet's products does not infringe on Bonutti's patents. Bonutti filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Fed. R. Civ.P. 12(b)(1), arguing that, at the time the complaint was filed, there was no case or controversy as defined by the Declaratory Judgment Act, 28 U.S.C. § 2201(a).

The district court explained the facts as follows. In June 2012, Acacia Research Group (ARG), Bonutti's parent company, contacted Biomet about a new licensing agreement. Shortly afterwards, Plaintiff and ARG began negotiating the terms of the licensing agreement. The bargaining process included the signing of a Non-Disclosure Agreement ("NDA"). The NDA's purpose was to facilitate the licensing of patents to avoid litigation. There was nothing in the NDA that prevented the parties from filing a lawsuit against each other at any point, for any reason.

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Disclosure of Opinions of Counsel to Customers Waived Privilege as to the Opinions and the Subject Matter of the Opinions

July 29, 2013

Plaintiff The Procter & Gamble Company ("Plaintiff") filed a patent infringement action against Clio USA, Inc. ("Clio"). Plaintiff moved to compel certain opinions of counsel and other documents concerning the subject matter of those opinions. In the litigation, Clio had produced to Plaintiff copies of two abridged opinions, which were marked on their face as containing privileged communications.

Clio intentionally disclosed the abridged opinions to various third parties, including Clio's co-Defendants, the co-Defendants' customers, and Plaintiff. Clio claimed that it disclosed one of the abridged opinions to co-Defendants under a common interest privilege. But Plaintiff identified documents from co-Defendant Team Technologies, Inc. ("Team Tech") showing further dissemination of counsel's opinions to retailers. For example, CVS demanded documentation of a "legal nature" to "show there is no patent infringement," and Clio responded that it would provide such documentation. Meijer requested a similar legal opinion, and a legal opinion letter was furnished to CVS.

Plaintiff asserted that these productions waived the attorney client privilege.

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Adobe Moved to Disqualify Opposing Counsel Where Counsel Had Done Opinion Work and Had Never Sent a Letter Terminating the Relationship Before It Took Matter Adverse to Adobe

July 24, 2013

Plaintiff TQP Development, LLC ("TQP") filed a patent infringement action against Adobe Systems Incorporated ("Adobe"). TQP was represented by the law firm of Russ August & Kabat in the action against Adobe ("RAK"). Based on the fact that RAK had previously represented Adobe in opinion work, Adobe moved to disqualify RAK.

As explained by the district court, "[i]t is undisputed that RAK, the current lead counsel for TQP, represented Adobe in a series of matters between 2006 and 2012 involving the issuance of opinion letters concerning whether Adobe products infringed certain patents. The last of these engagements, herein referred to as the "Manufacturers" matter, commenced in 2010 with an analysis of certain patents owned by Manufacturers and whether they were infringed by Adobe products. According to the Declaration of Nicholas Martini (Dkt. No. 34-4), these opinions were updated and revised several times through December 2011 (requiring about 112 hours of RAK attorney time) as additional patents were obtained by Manufacturers and additional information was received by Adobe. The last services by RAK on this matter were provided by Marc Fenster of RAK during a February 6, 2012 conference call with two of Adobe's inside counsel and a Senior Vice President. Mr. Fenster declares that he asked during this call whether Adobe needed any further work on this matter and he was told they did not. The Adobe declarants do not recall this exchange. Both sides agree that there were no further communications regarding the matter before Mr. Fenster and RAK undertook to represent TQP in this matter several months later."

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Inequitable Conduct Claim Dismissed on Summary Judgment Motion Where Conduct of Patent Prosecutor Was Disputed and Did Not Require a Finding of Intent to Deceive

July 22, 2013

KFx Medical Corp. ("KFx") alleged that Arthrex, Inc. ("Arthrex") infringed three of its patents: United States Patent Number 7,585,311 ("311 Patent"), United States Patent Number 8,100,942 ("942 Patent") and United States Patent Number 8,109,969 ("969 Patent"). All three patents share the same name: "System and Method for Attaching Soft Tissue to Bone." KFx's moved for summary judgment of no inequitable conduct in connection with the '942 Patent and the '969 Patent.

As explained by the district court, Arthrex's claim of inequitable conduct was directed to the conduct of Ryan Melnick, the attorney who prosecuted the patents. Arthrex alleged that Mr. Melnick intentionally diverted the Examiner of the '942 and '969 Patents away from a statement by KFx's President and CEO, Tate Scott ("the Scott Statement"), and instead directed the Examiner to less relevant prior art references. Arthrex contended the Scott Statement explained that the work performed in a 2004 article by Peter J. Millett, M.D., et al., entitled "Mattress Double Anchor Footprint Repair: A Novel, Arthroscopic Rotator Cuff Repair Technique" ("the Millett article") was prior art to all of the patents. Arthrex claimed that Mr. Melnick's diversionary tactic caused the Examiner not to apply the Millett article, and that if the Examiner had applied that article, he would have rejected the claims. Arthrex also asserted that "Mr. Melnick failed to disclose to the Examiner the correct priority date for the '969 patent and, in fact, took steps to mislead the Examiner into believing the '969 patent was entitled to the same priority date as the '942 patent, when he knew it was not."

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No Ongoing Royalty Allowed Where Plaintiff Failed to Request Ongoing Royalties Before Entry of Judgment

July 17, 2013

After the jury returned a verdict of $5 million, the district court denied the parties' post-judgment motions, including plaintiff's motion for attorney's fees, which was the only post-judgment motion filed by plaintiff. The district court then entered judgment on the jury verdict.

The defendants then appealed from the judgment and the Federal Circuit summarily affirmed on all grounds, denied rehearing, and did not remand any issues to the district court. The plaintiff then filed motions seeking prejudgment interest in the amount of $655,636 and royalties for ongoing willful infringement. Defendants asserted that the judgment had been paid in full and therefore the motions should be denied.

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Motion to Quash Deposition Subpoena for Complainant's CFO Denied by Administrative Law Judge Where CFO's Deposition Was Relevant to Domestic Industry Requirement

July 15, 2013

Complainant Neptun filed a motion to quash three notices of deposition served by several respondents, specifically Satco, Maxlite, and Litetronics. Neptun sought to quash the three separate notices of deposition directed to Marzenna Bobel, the CFO of Neptun. Satco opposed the motion, and cross-moved to compel Mrs. Bobel's deposition and the production of certain documents.

As explained by the administrative law judge, Neptun's chief financial officer, Mrs. Bobel supervises the data entry of Neptun's financial transactions into a QuickBooks database. Neptun produced various reports generated from this QuickBooks database in support of its domestic industry allegations in this investigation. Satco asserted that it was entitled to depose Mrs. Bobel because her testimony would be relevant to the domestic industry requirement.

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Patent Case Rulings from the Central District of California: Apr. 1 to Apr. 30, 2013

July 14, 2013

The following 36 decisions were reported in patent cases pending in the Central District of California for the period of April 1 through April 30, 2013.

CACD Decisions.bmpThe 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>.

Patent Case Rulings from the Central District of California: May 1 to May 31, 2013

July 13, 2013

The following twenty decisions were reported in patent cases pending in the Central District of California for the period of May 1 through May 31, 2013.

May 1 to May 31 CACD Rulings.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>.

Jury's Award of Lump Sum Royalty Precludes Plaintiffs Request for Ongoing Royalties After Trial

July 10, 2013

After a jury trial in which plaintiff Summit 6 was awarded $15 million against Samsung, Summit 6 moved for an award of future, ongoing royalties to compensate it for Samsung's continued infringement after the verdict. Summit 6's motion was based on the argument that the jury's verdict only compensated it for Samsung's past infringement up to the point of trial.

On the verdict form, the jury added the words "lump sum" under the $15 million amount. In its motion, Summit 6 argued that the jury instruction did not define "lump sum," nor did the jury instructions explain that a lump sum award would be through the life of the patent, instead of up to the date of trial. Samsung argued in response that the jury understood that "lump sum" covered both past and future infringement, citing to specific testimony during trial defining the term "lump sum."

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PTAB Clarifies Motion to Amend Claims

July 9, 2013

In a pair of recent decisions, the Patent Trial and Appeals Board further clarified the requirements of filing a motion to amend the claims. These recent decisions supplement the Board's recent decisions in IPR2012-00027 (Paper No. 26) and IPR2012-00005 (Paper No. 27) in which the Board provided guidance regarding the filing of motions to amend claims.

On June 26, in Oracle Corporation v. Clouding IP, LLC, IPR2013-00099, the Board (APJs Chang, Kim and Elluru) issued a decision following the patent owner's intention to file a motion to amend the claims. In the telephone conference on the patent owner's motion, the Board noted "that Clouding would have to account for the level of ordinary skill in the art and the basic skill set possessed by one with ordinary skill, and may not limit its consideration to just the references over which this trial was instituted." In other words, in its motion the patent owner must demonstrate that the proposed amended claims address the grounds of rejection in light of the level of ordinary skill of a person skilled in the art as well as over the prior art, including prior art that the Board did not rely upon in granting the petition.

The Board also noted that "when indicating written description support in the specification, [the patent owner] should make reference to the disclosure in the original applications as filed, rather than to the portions of the issued patent, and provide sufficient explanation in addition to citations to the specification."

Finally, the Board explained that "should an expert declaration be submitted in support of a motion to amend claims, the motion itself should set forth the arguments and explanations with appropriate pinpoint citations to the expert declarations, rather than just incorporating by reference the expert declarations."

In Synopsys, Inc. v. Mentor Graphics Corporation, IPR1012-00042, the Board (APJs Blankenship, Medley and Bisk) issued a decision on the patent owner's motion to amend in which the Board dismissed the motion without prejudice because the patent owner failed to list the proposed amended claims in the body of the motion and instead listed them in an appendix. The Board stated that "by doing so, [the patent owner] circumvented the motion page limit [of 15 pages].

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Motion to Dismiss for Lack of Personal Jurisdiction Granted Where Supplier of Allegedly Infringing Product Sued for Declaratory Relief After Its Customer Was Sued in a Different Jurisdiction

July 8, 2013

Ball Metal Beverage Container Corp. "(Ball Metal") filed a declaratory judgment action against CMI&J LLC ("CML&J") for non-infringement and invalidity. CML&J moved to dismiss the action for lack of personal jurisdiction, contending that it lacked sufficient minimum contacts with Colorado.

The declaratory judgment action centered on U.S. Patent No. 8,245,866 (the "'866 Patent"), which is directed to a type of beverage container. Three friends created the product embodied in the '866 Patent, Daniel Gibson, Joseph Snecinski, and Todd Epstein. The three friends incorporated CML&J to license the beverage container described in the '866 Patent. Gibson and Snecinski reside in Connecticut, and Epstein resides in Massachusetts. CML&J's place of business is in Connecticut.

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Carnegie Mellon v. Marvell: District Court Denies Request for $17 Million in Attorney's Fees Without Prejudice Pending Appeal of Underlying Judgment

July 3, 2013

Carnegie Mellon University ("CMU") filed a motion for attorney fees pursuant to 35 U.S.C. Section 285, seeking attorney fees of approximately $17.2 Million as a prevailing party at the jury trial against Marvell Technology Group ("Marvell") that resulted in a jury verdict of over $1 billion. The jury also found that Marvell's infringement was willful.

Section 285 provides that "the court in exceptional cases may award reasonable attorney fees to the prevailing party." "Although an attorney fee award is not mandatory when willful infringement has been found, precedent establishes that the court should explain its decision not to award attorney fees." Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 37 (Fed. Cir. 2012) cert. denied, 133 S. Ct. 1291 (2013) (citing Spectralytics, Inc. v. Cordis Corp., 649 F.3d 1336, 1349 (Fed. Cir. 2011)). As the district court explained, "[t]he inquiry into attorney fees is related to both willfulness and enhanced damages as explained under § 284, given similar considerations are relevant to both. Id. at 38. 'However, the situations in which § 284 and § 285 may be invoked are not identical' because attorney misconduct or other 'aggravation of the litigation process' may weigh heavily in regards to attorney fees, but not as to the enhancement of damages. Id."

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After a Jury Found Plaintiff's Patents Infringed and Awarded Damages, Defendants Renewed a Motion for Indefiniteness Based on Term "Look and Feel" in Patent

July 1, 2013

DDR Holdings, LLC ("DDR") filed a patent infringement action against multiple defendants alleging infringement of U.S. patent Nos. 6,629,135 ("the '135 patent") and 6,993,572 ("the '572 patent"). The case went to trial on October 8, 2012 against Digital River, Inc. ("Digital River, Inc. ("Digital River"), National Leisure Group, Inc., and World Travel Holdings, Inc. (collectively, "NLG"). After a five day trial, the jury returned a unanimous verdict finding that Digital River infringed several claims of the '572 patent and awarded damages to DDR of $750,000 for the period of the issue date of the patent, January 31, 2006, through the verdict date, October 12, 2012. The jury also found that NLG infringed several claims of the '572 patent and several claims of the '399 patent. The jury awarded damages to DDR of $750,000 for the period of the earliest issue date, January 31, 2006, through the verdict date.

After the trial, Digital River contended that it was entitled to judgment as a matter of law that the asserted claims were invalid as indefinite. Digital River argued that because the patent specification lacked the required objective to allow one of ordinary skill in the art to know when the claimed "look and feel" element has been achieved. To make this argument, Digital River relied on Datamize, LLC v. Plumtree Software, Inc. where the Federal Circuit found the term "aesthetically pleasing" to be indefinite because the patentee "offered no objective definition identifying a standard for determining when a interface screen is aesthetically pleasing." Datamize, 417 F.3d 1342, 1350 (Fed. Cir. 2005).

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