December 2013 Archives

Communication That Was Business Communication Could Not Be Protected by Attorney-Client Privilege But Could be Protected by Spousal Privilege

December 30, 2013

Flatworld Interactives ("Flatworld") filed a patent infringement action against Apple Inc. ("Apple"). During the litigation, Apple sought the production of several documents that Flatworld claimed were protected by the attorney-client privilege and the spousal privilege.

In particular, Flatworld asserted the attorney-client privilege and the spousal privilege for certain documents. In analyzing the issue, the district court noted that "[c]ommunications that would have been made for a business purpose are not protected by the attorney-client privilege." See McCaugherty v. Sifferman, 132 F.R.D. 234, 238 (N.D. Cal. 1990) ("No privilege can attach to any communication as to which a business purpose would have served as a sufficient cause, i.e., any communication that would have been made because of a business purpose, even if there had been no perceived additional interest in securing legal advice. Fisher et al. v. United States et al., 425 U.S. 391, 403, 96 S.Ct. 1569, 1577, 48 L.Ed.2d 39 (1975)."). The district court then concluded that one of the email chains at issue constituted a business communication and therefore, was not protected by the attorney-client privilege.

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Motion to Stay Pending Inter Partes Review Denied Where Inter Partes Petition Did Not Challenge Two of the Asserted Independent Claims of the Patent-in-Suit

December 25, 2013

Otto Bock HealthCare LP ("Otto Bock") filed a patent infringement against Defendants Össur hf and Össur Americas, Inc. (together, "Össur"). Otto Bock alleged that a number of Össur's infringed four claims of United States Patent No. 6,726,726 (the " '726 Patent"). Otto Bock moved for a preliminary injunction, seeking to enjoin Össur from infringing the '726 Patent, and the Court denied Otto Bock's, holding that Otto Bock was unlikely to prove that the accused combination of products satisfied the '726 Patent's "means for sealing" and "means for maintaining a vacuum" limitations.

After the preliminary injunction was denied, Össur petitioned the U.S. Patent and Trademark Office (the "Patent Office") to institute an inter partes review of 19 claims of the '726 Patent. Össur's petition asserted that certain claims of the '726 Patent are invalid because they would have been obvious to a person of ordinary skill in the art. Össur's petition did not seek review of two of the four independent claims at issue in the case. Össur's moved to stay the district court case pending the inter partes review. At time of the motion to stay, the Patent Office had not yet decided whether to institute an inter partes review.

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Kimberly-Clark v. First Quality: District Court Excludes Expert Testimony on Obviousness for Failure to Include the Opinion on Obviousness in the Expert Report

December 23, 2013

Kimberly-Clark Worldwide, Inc. ("Kimberly-Clark) filed a patent infringement action against First Quality Baby Products, LLC ("First Quality") over a variety of patents relating to disposable absorbent products, such as diapers and incontinence products, including U.S. Patent No. 5,147,343 (the "Kellenberger Patent"), which relates to an absorbent composite or core for use in disposable absorbent products. As explained by the district court, "[t]he absorbent core consists of a matrix of fibers with superabsorbant polymer ("SAP") dispersed between the pores of the matrix. An SAP is a chemical compound capable of absorbing ten or more times its own weight in fluid-a useful property for products designed to absorb and retain fluids."

As one of its defenses, First Quality argued that the Kellenberger Patent was invalid for obviousness. Defendants had previously moved for summary judgment on the of obviousness and had argued in support of that motion that the only feature distinguishing the Kellenberger Patent from the prior art was its use of a new SAP in the absorbent core to replace an older, less effective SAP. "In short, Defendants argued that Plaintiff simply took a new SAP (invented by a third party) and included it in a preexisting diaper design, and that it was obvious to do so. By memorandum issued July 8, 2013, the court denied Defendants' motion after finding genuine disputes of material fact as to whether it would have been obvious to substitute the new SAP."

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Royalty Awarded After Remittitur More Appropriately Based on Percentage Than Dollar Figure Per Unit Sold to Avoid Windfall to Plaintiff

December 18, 2013

In February 2013, Tomita Technologies USA, LLC ("Tomita") went to trial before a jury against Nintendo Co., Ltd. ("Nintendo"). In March 2013, the jury returned a verdict in favor of Tomita in the amount of $30.2 million, finding that the Nintendo 3DS infringed one of Tomita's patents. The jury also found that the Tomita patent was not invalid. The district court also ruled that Tomita had not proven that Nintendo willfully infringed the Tomita patent by clear and convincing evidence.

After judgment was entered in favor of Tomita, Nintendo moved to set aside the judgment or, in the alternative, for a remittitur. The district court then awarded a remittitur to Nintendo for half of the damages awarded by the jury, which Tomita accepted.

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District Court Excludes Royalty Calculation of Defense Expert Where Expert Used an Incorrect Date for the Hypothetical Negotiation

December 16, 2013

As Cassidian Communications, Inc.'s ("Cassidian") patent infringement case against Microdata GIS, Inc. ("Microdata") moved toward trial, Cassidian moved to exclude the testimony of defendants' expert. The motion to exclude was based on the argument that the expert report was fatally flawed in that it calculated a reasonable royalty based on an incorrect hypothetical negotiation date.

The district court found that Mr. Gallagher's expert report is fatally flawed, in that it calculates reasonable royalty based on an incorrect hypothetical negotiation date in November 2010 - almost two years after the date infringement began in December 2008. See LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 75 (Fed. Cir. 2012) ("[T]he correct determination of the hypothetical negotiation date is essential for properly assessing damages." "In general, the date of the hypothetical negotiation is the date that the infringement began.").

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Rembrandt v. Facebook: District Court Excludes Damage Expert Where Expert Failed to Apportion Damages to Patented Features in Accused Product

December 11, 2013

Rembrandt Social Media, LP ("Rembrandt") filed a patent infringement action against Facebook alleging that Facebook infringed two of its patents, U.S. Patent No. 6,415,316 ("the '316 patent) and U.S. Patent No. 6,289,362 ("the '362 patent").In 2009, Facebook introduced two new features to its website called BigPipe and Audience Symbol. Rembrandt's expert admitted that the alleged infringement of the patents-in-suit is because of to the introduction of these two features in 2009. Rembrandt's expert also admitted that Facebook does not infringe without BigPipe and Audience Symbol features.

As explained by the district court, "BigPipe, introduced in Fall 2009, is a web page acceleration and optimization computer program developed by Facebook to increase the speed at which certain web pages are delivered from Facebook's servers to the user's web browser. BigPipe takes a web page and divides it into portions known as "pagelets" using a certain piece of computer code12 to specify each pagelet." In addition, "Audience Symbol, introduced in June 2009, is a small icon displayed next to stories on various webpages on Facebook's website. The symbol signifies the third-party users, or "audience," allowed to view a particular story. Rembrandt alleges that display of Audience Symbol violates both the '316 and '362 patents."

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District Court Declines to Vacate Claim Construction Order After Settlement Agreement

December 9, 2013

After Single Touch Interactive, Inc. ("Single Touch") and Zoove Corporation ("Zoove") reached a settlement in their patent infringement action, both parties filed a stipulated motion to vacate the district court's previous claim construction order. The parties' settlement agreement provided that they would jointly request that the district court vacate the claim construction order.

In analyzing the parties' joint request, the district court began by focusing on the United State Supreme Court's decision in U.S. Bancorp Mortgage Co. v. Bonner Mall P'ship, 513 U.S. 18 (1994) where "the Supreme Court held that appellate court vacatur of district court judgments in the context of settlement agreements should be granted only in 'exceptional circumstances,' which 'do not include the mere fact that the settlement agreement provides for vacatur.' The Supreme Court emphasized the public interests at stake in considering a request to vacate an order or judgment of the court, stating that '[j]udicial precedents are presumptively correct and valuable to the legal community as a whole... not merely the property of private litigants[,] and should stand unless a court concludes that the public interest would be served by a vacatur.' Id. at 26 (quoting Izumi Seimitsu Kogyo Kabushiki Kaisha v. U.S. Philips Corp., 510 U.S. 27, 40 (1993) (Stevens, J., dissenting)).

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Apple v. Samsung: District Court Denies Samsung's Emergency Renewed Motion for Stay Pending Reexamination of Apple's Patent

December 4, 2013

In the continuing battle between Apple and Samsung, Samsung recently filed an emergency motion to stay pending reexamination of an Apple patent. To analyze whether the stay was appropriate, the district court provided an overview of the litigation beginning with the filing of Apple's complaint against Samsung in April 2011 and noting that in December 2011, the district court declined to enter a preliminary injunction prohibiting Samsung from selling Samsung products which Apple claimed infringed Apple's design patents.

As explained by the district court, the case went to trial in August 2012, where a jury found that twenty-six Samsung smartphones and tablets infringed one or more of six Apple patents. The jury also found that six Samsung smartphones diluted Apple's registered iPhone trade dress and unregistered iPhone 3G trade dress. After the trial, the district court ruled on the parties' post-trial motions and issued nine separate orders, including a ruling on Apple's motion to permanently enjoin Samsung from importing or selling any of its twenty-six infringing smartphones and tablets. The district court denied Apple's request for the permanent injunction. The Federal Circuit affirmed the denial of injunctive relief with respect to Apple's design patents, but vacated the district court's denial of injunctive relief with respect to Apple's utility patents and remanded for reconsideration.

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Long Delay in Moving to Transfer Results in Denial of Motion

December 2, 2013

The Defendant QxQ Inc. ("QxQ"), which is a California company, moved to transfer a patent infringement case from the Eastern District of Wisconsin to the Northern District of California. QxQ asserted that the connections between the Eastern District of Wisconsin and the case were so limited that litigating the action in Wisconsin would be less convenient than litigating in the Northern District of California. Plaintiff Circuit Check Inc. ("Circuit Check"), which is a Minnesota company, opposed the motion, in part, because QxQ delayed filing the motion to transfer.

QxQ moved to transfer based on 28 U.S.C. § 1404(a), which, as explained by the district court, authorizes changes of venue "for the convenience of parties and witnesses, in the interest of justice." As noted by the district court, "[w]ith respect to the convenience evaluation, courts generally consider the availability of and access to witnesses, and each party's access to and distance from resources in each forum. Other related factors include the location of material events and the relative ease of access to sources of proof." Research Automation, Inc. v. Schrader-Bridgeport Intern., Inc., 626 F.3d 973, 978 (7th Cir. 2010) (citations omitted). In assessing the interest of justice, "courts look to factors including docket congestion and likely speed to trial in the transferor and potential transferee forums, each court's relative familiarity with the relevant law, the respective desirability of resolving controversies in each locale, and the relationship of each community to the controversy." Id. (citations omitted).

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