October 2013 Archives

Covenant Not to Sue Does Not Prevent Finding of Exceptional Case and Award of Attorneys' Fees Where Adverse Determinations Were Already Made

October 30, 2013

Plaintiffs Kim Laube & Co. ("Laube") brought this patent infringement action against Defendant Wahl Clipper Corp. ("Wahl") for infringement of U.S. Patent No. 6,473,973 ("the '973 Patent"), which is titled "Disposable Cutting Head for Clippers." After jury and bench trials, Laube filed a motion dismiss all patent related claims and counterclaims because the Federal Circuit rejected Laube's challenge to the reexamination's invalidation of claims 1-5 of the '973 Patent; and (ii) Laube granted Wahl a covenant not to sue. Wahl opposed the Motion.

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Apple v. Samsung: Samsung's Request for Stay of Discovery Orders Denied Where Magistrate Judge Made No Ruling on Privilege Issues and the Scope of the Compelled Information Was Not Overly Broad

October 28, 2013

As a result of Samsung's alleged violation of the protective order, Magistrate Judge Grewal previously ordered Samsung to produce to Apple emails and communications by Samsung employees that would shed light on the scope of the alleged protective order violation and to make available for deposition various witnesses by October 16, 2013. Samsung appealed from the Magistrate Judge's order to the district court.

Samsung's motion raised three arguments: (1) the order would "improperly abrogate privilege and work-product protection," (2) the order may "require Samsung to violate other protective orders," and (3) the order's "scope of compelled information is grossly overbroad." The district court rejected each argument.

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Plaintiff Moves to Continue Trial Date Based on Dispute with Counsel; District Court Denies the Motion and Warns That Failure to Obtain New Counsel Will Result in Dismissal

October 23, 2013

In this patent infringement action that was originally filed against a number of defendants, plaintiff Alexsam, Inc. ("Alexsam") moved for a continuance of the impending trial date set for October 2013. To support the motion, plaintiff notified the district court that it had terminated its relationship with its counsel of record and suggested that it anticipates litigation between itself and its counsel of record. Alexsam requested a delay in the trial setting so that it could secure new counsel.

The district court had previously conducted a consolidated trial on Defendants' invalidity claims in May 2013. The jury found each of the asserted claims valid. As explained by the district court, "Shortly after the invalidity trial, Plaintiff and Best Buy, Inc. settled the remaining issues between them (Doc. No. 270 in 2:13-cv-2). The Court then tried the infringement issues in Alexsam, Inc. v. Barnes & Noble, Inc. (2:13-cv-3) and Alexsam, Inc. v. The Gap, Inc. (2:13-cv-4) in June 2013. The Barnes & Noble trial was conducted June 3-7, 2013, and the Gap trial was conducted June 24-28, 2013. Both juries found no infringement (Doc. No. 219 in 6:13-cv-3 and Doc. No. 243 in 6:13-cv-4)."

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Voluntary Work Held to be Work for Hire in World of Warcraft Suit

October 22, 2013

by Ali Shalchi

In Lewis v. Activision Blizzard, Inc., No. 4:12-cv-01096-CW (N.D. Cal. Oct. 17, 2013), an employee of Blizzard brought suit against the company for copyright infringement, alleging ownership of voiceover work used in the popular World of Warcraft online video game. The key issue on Blizzard's motion for summary judgment of non-infringement was whether an employee's voiceover work was within the scope of employment and thus a work made for hire. In granting summary judgment, the court applied a three-part test for scope of employment pursuant to the Restatement of Agency.

Defendant Lewis was a Blizzard employee in the role of "game master," which involves the resolution of technical and customer services issues associated with the online gameplay. Blizzard developers invited the game masters to audition for voiceover work for various game characters. Lewis participated in the audition and developed a voice and song for the game's aquatic character known as a "baby murloc." According to Lewis, her belief was that the recording was only to be used for promotional videos. However, upon learning that her voice recording was used in the game itself, she sued Blizzard for copyright infringement. Blizzard argued that the recordings were works made for hire under 17 U.S.C. ยง201(b) and that, alternatively, it was a joint author of the recordings and was therefore its use was permitted.

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Unwired Planet v. Google: Court Reverses Decision Limiting Google to Prior Art References

October 21, 2013

Unwired Planet LLC ("Unwired Planet") filed a patent infringement action against Google and it originally identified 124 claims from ten patents as its asserted claims against Google. Unwired subsequently reduced the number of its claims. At the August 20, 2013 case management conference, the parties offered different proposals for further reduction of Unwired's asserted claims as well as reduction of Google's prior art references.

With respect to reducing the prior art references, Google asserted that limitations on its prior art defenses "has the effect of depriving Google of viable defenses to Unwired Planet's claims," but proposed a reduction if the court directed it. Unwired disagreed and proposed its own reductions to Google's prior art references. The district court then ordered 12 references per patent and no more than 40 claims asserted after claim construction and 4 references per patent and no more than 20 references before trial.

Google sought reconsideration of the district court's order and the district court found that it had committed clear error.

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District Court Sua Sponte Orders Claims for Indirect Infringement and Willfulness Dismissed for Failure to Plead Pre-Suit Knowledge of Patent

October 16, 2013

Eclipse IP LLC ("Eclipse") filed several patent infringement actions against a number of defendants, in which it alleged indirect infringement (both inducing and contributory) as well as willfulness. The district court sua sponte issued an order regarding the indirect infringement claims as well as the willfulness allegations.

The district court analyzed the recent Federal Circuit decision that addressed the knowledge requirements for indirect infringement claims. "As discussed in length in the recent decision in Labyrinth Optical Technologies, LLC v. Fujitsu America, Inc., the Federal Circuit has recently resolved whether a defendant must have this knowledge before litigation begins. 8:13-cv-00030-AG-MLG (C.D. Cal. Aug. 21, 2013), ECF No. 33. In In re Bill of Lading Transmission & Processing System Patent Litigation, the Federal Circuit held that the plaintiff had met the knowledge requirement to bring an indirect infringement claim when it provided notice of the patent via service of the original complaint. 681 F.3d 1323, 1345 (Fed. Cir. 2012); accord Labyrinth, 8:13-cv-00030-AG-MLG, slip op. at 8-9 (analyzing Bill of Lading's treatment of this issue in detail and holding patent-holder sufficiently alleged defendant's knowledge in amended complaint based on service of original complaint); Eon Corp. IP Holdings, LLC v. Sensus USA, Inc., No. C-12-1011 EMC, 2012 WL 4514138, at *1 (N.D. Cal. Oct. 1, 2012) (holding that in Bill of Lading, post-complaint knowledge is sufficient). Thus, to meet this knowledge requirement in pleading indirect infringement, Plaintiff need not necessarily allege Defendants' pre-suit knowledge of the patents. However, what knowledge Plaintiff does allege must still be plausible."

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Apple v. Samsung: Court Orders Investigation into Potential Protective Order Violation by Samsung

October 14, 2013

As Apple and Samsung head toward yet another trial, Apple filed a motion for sanctions, accusing Samsung of violating the protective order in the case. Apple's motion asserted that Samsung's counsel had improperly shared information under the protective order with executives at Samsung.

The court began its analysis with a discussion of the importance of protective orders: "Time and again in competitor patent cases, parties resist producing confidential information to their adversaries' lawyers. They fear, among other things, that the lawyers will insufficiently shield the information from the competitors that they represent. Yet time and again, the court assuages these fears with assurances that a protective order will keep the information out of the competitors' hands. A casual observer might reasonably wonder what magic a protective order works that allows outside counsel access to confidential information to advance the case without countenancing untoward uses by the client. The answer is not a magical one at all: confidential information remains confidential because counsel and clients alike follow court orders. If parties breach this basic rule, the court's assurances become meaningless. There is reason to believe the rule has been breached in the present case."

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Damage Expert Stricken without Leave to Amend after District Court Determines That Expert Over Reached by Using Entire Market Value Rule

October 9, 2013

As this patent infringement action moved closer to trial, the parties filed various motions in limine, including defendant Fortinet Inc.'s motion to strike the report and expert testimony of Network Protection Sciences, LLC's ("NPS") damage expert. In its motion to strike, Fortinet contended that the damage expert's analysis improperly based royalties on the entire market value of the accused products.

To analyze the motion to strike, the district court summed up the entire market value rule as follows: "The entire market value rule -- which has varied somewhat in formulation over time -- has been a highly-criticized and highly-litigated methodology. In recent years, the Federal Circuit has restricted its use, most notably in LaserDynamics v. Quanta Computer, Inc., 694 F.3d 51, 67 (Fed. Cir. 2012). In that action, the Federal Circuit explained it as follows (per Judge Jimmie Reyna):

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Activision TV: District Court Expresses Concern over Nebraska Attorney General's Cease and Desist Order and Grants Preliminary Injunction Precluding Enforcement

October 7, 2013

In the ongoing battle between Activision TV, Inc. ("Activision") and the Attorney General for the State of Nebraska, Activision filed a preliminary injunction motion seeking to bar the Attorney General from enforcing a cease and desist order entered against Activision's counsel. The district court had previously determined that the Attorney General could not preclude Activision's counsel from representing Activision in the current patent infringement action pending in federal court in Nebraska. The district court was now faced with the issue of whether the Attorney General could order counsel for Activision (Farney Daniels) to cease and desist initiation of all new patent infringement enforcement efforts in Nebraska.

In response to the motion, the Attorney General first argued that the district court lacked jurisdiction to determine the issue because the cease and desist order applies to Farney Daniels and not to Activision and, as a result, Farney Daniels lacked standing to raise these issues because it is not a party to the action pending before the district court.

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WiLAN v. Alcatel-Lucent: Parties Agree to Dismiss Dispute and Vacate Claim Construction Order But District Court Declines to Vacate the Claim Construction Order

October 2, 2013

WiLAN USA, Inc. ("Wi-LAN") filed a patent infringement action against Alcatel-Lucent USA Inc. ("Alcatel-Lucent"). After a lengthy claim construction order, the parties filed a joint motion to vacate the claim construction order and dismiss the pending lawsuit. The motion consisted of a single page and contained no points and authorities in support of the motion.

The district court was not impressed by the single page motion, which did not include a memorandum of law as required by the local rules. "The one-page Motion, which seeks in part a vacatur of the 75-page Order [ECF No. 141] of September 9, 2013 ("September 9 Order") on claim construction following a day-long Markman hearing, is unaccompanied by a memorandum of law. See Local Rule 7.1(a)(1)."

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