August 2013 Archives

"Order on Confusion": District Court Orders Parties to Submit Jury Instructions "in Plain Language" or Waive Right to Jury Trial

August 28, 2013

In this patent infringement action between i-Tec Well Soultions, LLC ("i-Tec") and Peak Completion Technologies, Inc. ("Peak"), the district court issued an unusual order as the case approached trial. With the case expected to be a jury trial, both sides were ordered to submit tailored jury instructions.

The district court, most likely frustrated by the unintelligible jury instructions that are frequently submitted in patent cases, issued an "Order on Confusion." In the "Order on Confusion," the district court stated that "the parties must give the court tailored jury instructions written in plain language if they want a jury trial in October." Thus, the district court made it clear that it wanted jury instructions that could be understood by a jury of lay people even in a complex patent trial.

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I/P Engine v. Google: Motion for Ongoing Royalty Granted Even Though Plaintiff Could Not Prove Entitlement to Permanent Injunctive Relief

August 26, 2013

I/P Engine, Inc. ("I/P Engine") filed a complaint against AOL, Inc., Google, Inc., IAC Search & Media, Inc., Gannett Company, Inc. and Target Corporation (collectively "Defendants") in which I/P Engine alleged that the Defendants infringed several of its patents. After a jury trial, the jury reached a verdict finding that Google had infringed the asserted claims of two of I/P Engine's patents and the jury awarded I/P Engine damages in the amount of $30,496,155, which did not include interest. The jury also awarded I/P Engine a running royalty rate of 3.5%. After the trial, I/P Engine moved for an ongoing royalty and Google opposed.

The district court began its analysis by noting that "[i]n light of the Supreme Court's decision in eBay, Inc. v, MercExchange, LW, 547 U.S. 388 (2006), it is no longer appropriate for a district court to enter an automatic permanent injunction to prevent future patent infringement." Based on this directive, the district court also discussed that many other courts have found that an ongoing royalty is appropriate if the plaintiff cannot meet the requirements of a permanent injunction. The district court also concluded that "there is adequate support for the Court's authority to impose an ongoing royalty when necessary to effectuate the jury's finding of patent infringement. Further, there is no support in eBay or the subsequent case law that suggests a prevailing party in a patent infringement suit must be able to show that the requirements for a permanent injunction have been met before an ongoing royalty can be awarded to said party."

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Tomita v. Nintendo: Remittitur or New Trial Ordered on $30M Damage Verdict Where Jury Likely Weighed Profitability of Games Rather Than the Profitability of the Accused Device

August 19, 2013

Tomita Technologies USA, LLC ("Tomita") won a jury verdict of $30M against Nintendo in patent infringement action. The jury found that Nintendo's 3DS infringed the patent-in-suit (the '664 patent) and that the '664 patent was not invalid. Nintendo filed several post-trial motions, including a motion for a remittitur of the damages or a new trial.

The district court explained the background of the case as follows: "The '664 patent is a patent relating to stereoscopic (or 3D) imaging technology and includes four major elements: (1) 'a stereoscopic video image pick-up device' (i.e., two cameras), (2) a
'stereoscopic video image display,' (3) a 'cross-point measuring means for measuring [cross-point] information on the cross-point (CP) of optical axes,' and (4) an 'offset presetting means for offsetting and displaying said different video images.' U.S. Patent No. 7,417,664 col. 2, 1.44-65. Tomita claims that Nintendo uses the `664 patent's technology in the 3DS's two outer cameras. Thus, only the 3DS's camera application (which allows the user to take and view 3D photos and videos) and the augmented reality ("AR") game card application (which allows some games to be superimposed over real-world images captured by the 3DS's cameras) are at issue. The 3DS's other applications, including its 3D display, do not rely on the `664 patent."

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Stay Pending Inter Partes Review Granted Even Where Defendant Seeking Stay Had Not Initiated the Review

August 19, 2013

Plaintiff e-Watch, Inc. filed a patent infringement action against several defendants, including Defendant FLIR Systems, Inc. ("FLIR"). FLIR filed a motion to stay pending an inter partes review of the patent-in-suit by the Patent Office.

In deciding to grant the stay, the district court noted that the action was at an early stage and that the inter partes review could simplify the issues in the case. "This action is at a very early stage, and a stay could materially simplify the issues in the case if the United States Patent and Trademark Office ("USPTO") decides to institute an inter partes review with respect to either of the patents at issue."

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Patent Acquisition Bar Precluding Plaintiff's Counsel from Advising Any Clients on the Acquisition of Patents Granted Where Defendant Was Disclosing "Crown Jewel" Technology

August 14, 2013

In this patent infringement action, Defendant Sirius XM Radio, Inc. ("Sirius") sought a "patent acquisition bar" against plaintiff's counsel from Freitas Tseng & Kaufman, LLP ("Freitas"). In seeking the bar, Sirius asserted that the Freitas attorneys who would gain access to Sirius' confidential technical information should be barred from advising any clients in the "acquisition of patents involving satellite radio signal processing for the purpose of asserting them against" Sirius for two years after the conclusion of the litigation, including any appeals. Freitas objected to the patent acquisition bar.

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Motion for Leave to Amend Infringement Contentions Denied Where Plaintiff Sought to Add Thousands of New Products

August 12, 2013

Plaintiff Keranos, LLC ("Keranos") alleged that Silicon Storage Technology ("Silicon Storage") and other defendants infringed three related patents by manufacturing certain flash memory products. Keranos sought leave to amend its infringement contentions to add additional products that the defendants disclosed during discovery.

As explained by the district court, the Eastern District of Texas' Local Patent Rule 3-1 requires a party claiming infringement to identify each accused product in its infringement contentions. The "identification shall be as specific as possible," including name and model number, if known. PR 3-1(b). Generally, infringement contentions may only be amended or supplemented upon a showing of good cause. PR 3-6(b). The Court considers four factors when reviewing a motion to amend infringement contentions: "(1) the explanation for the party's failure to meet the deadline, (2) the importance of what the Court is excluding, (3) the potential prejudice if the Court allows the thing that would be excluded, and (4) the availability of a continuance to cure such prejudice." Alexsam Inc. v. IDT Corp., No. 2:07-cv-420-CE, 2011 WL 108725, at *1 (E.D. Tex. Jan. 12, 2011). As part of the good cause showing, the party seeking to amend must demonstrate that it was diligent in discovering the additional products and in seeking to amend. Id.; see also West v. Jewelry Innovations, Inc., No. C 07-1812, 2008 WL 4532558, at *2 (Oct. 8, 2008) (finding that a party must be diligent in discovering the basis for amendment).

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Motion to Strike Expert Testimony Granted to Preclude Expert's "Logic Analysis" to Determine the Physical Structure of a Circuit but Expert Permitted to Opine That Logic of Accused Circuit Corresponds to Patent

August 7, 2013

Plaintiff Cobra International, Inc. ("Cobra") filed a patent infringement action against several defendants, including BCNY International ("BCNY") alleging infringement of a patent for the design of lighted footwear. The defendants create children's shoes that have a small electrical module with an integrated circuit mounted on a chip. As explained by the district court, "[t]he chip, which is mounted on a circuit board and covered by a dot of epoxy, is a small rectangular piece of silicon less than one-quarter of an inch across on which the various electrical components are formed through a multi-layer process. The chip is connected to a switch, a battery, and a number of LED lights on the outside of the shoe. When the switch is triggered, the LEDs flash in a pattern for a short period and then stop."

The Defendants moved to exclude two of Cobras expert opinions: (1) the opinion that the schematics relied on by Defendants do not accurately represent the circuit in the accused product; and (2) the opinion that the circuit in the accused product uses the same "logic" as Cobra's patent.

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Plaintiff Allowed to Amend Complaint to Include Willful Infringement Based on Allegation That Defendant Continued to Sell Infringing Products after Learning of Patent Through Service of Original Complaint

August 5, 2013

Englishtown, Inc. ("Englishtown") filed a patent infringement action against Rosetta Stone, Inc. ("Rosetta Stone") for alleged infringement of patents pertaining to language-learning products, software, online services and practice tools. Englishtown sought leave to amend its complaint to include an allegation of willfulness based solely on post-litigation knowledge and conduct. Rosetta Stone opposed the motion on the ground that the amendment would be futile.

As explained by the district court, "[t]o prevail on a claim of willful infringement, the patentee must prove that: (1) the accused infringer 'acted despite an objectively high likelihood that its actions constituted infringement of a valid patent'; and (2) this objectively defined risk was either known or so obvious that the accused infringer should have known about it. K-Tec, Inc. v. Vita-Mix Corp., 696 F.3d 1364, 1378 (Fed. Cir. 2012)."

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