March 2015 Archives

District Court Grants Motion to Dismiss for Lack of Standing on the Eve of Trial

March 30, 2015

Plaintiff Labyrinth Optical Technologies LLC ("Labyrinth") filed a patent infringement action against Defendant Alcatel-Lucent USA, Inc. ("Lucent"), alleging that Lucent infringes U.S. Patent No. 8,103,173 (the "'173 Patent"). On the eve of trial, Lucent filed a motion to dismiss the case for lack of standing, arguing that Labyrinth could not show that it holds the rights to the '173 Patent.

The district court review the following facts to analyze the motion: "In November 2011, Teradvance Communications, LLC ("Teradvance") granted to Acacia Research Group LLC ("Acacia") an exclusive licence to certain patents and patent applications listed in an attached exhibit ("Exclusive License"). The list included foreign and domestic patents and pending patent applications, including U.S. Patent Application No. 12/554,241, which later issued as the '173 Patent. In April 2012, Acacia entered into an Assignment and Assumption Agreement ("Assignment") with Labyrinth, one of Acacia's affiliates. By its express terms, the Assignment is governed by Texas law. The Assignment notes that the Exclusive License covered "the Patents listed in the Exhibit attached hereto (the 'Patents')," but the Assignment does not specify whether the Exclusive License covered anything else. The Assignment states that it conveyed rights to the "Patents." But unlike the Exclusive License, which actually has an exhibit identifying the patents subject to the agreement, the Assignment does not."

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District Court Denies Unopposed Request to Seal Exhibits Where Only Justification for Sealing Was That Parties Designated the Documents Confidential under the Protective Order

March 25, 2015

Defendant Ericsson filed an unopposed motion for leave to file its motion to strike certain paragraphs of a supplemental expert report for the plaintiff under seal. Although the request was unopposed, the district court evaluated whether it was appropriate to seal the motion and accompanying exhibits. In the motion, Ericsson argued that the motion to strike refers to, quotes from, and attaches exhibits which are designated, contain, and constitute protected material under the Protective Order.

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Expert Is Not Permitted to Testify to Alternate Hypothetical Negotiation Dates Where No Hypothetical Negotiation Was Conducted for those Alternate Dates

March 23, 2015

After the parties submitted expert reports in this patent infringement action, Ford objected to Eagle Harbor's damage expert's expected testimony and demonstratives. Ford objected to Eagle Harbor's evidence because it involved multiple dates of possible infringement and the damage expert only calculated his royalty rate based on one possible date of first infringement.

As the district court explained, "[i]n his report, Mr. Wagner provides that, for the alleged infringement by Ford's SYNC system, 'the hypothetical negotiation date is on or around 2007 Q2.' . . . Mr. Wagner's trial exhibits, however, disclose three other possible dates for the date of first infringement. . . . These additional dates are based on the issuance of two of the continuation patents--the '739 Patent and the '119 Patent--and the possibility that Eagle Harbor's damages may be limited for failure to mark. The new dates are March 23, 2010, August 17, 2010, and August 23, 2011. Mr. Wagner did not provide a hypothetical negotiation for any of these new dates."

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Patent Misuse and Patent Exhaustion Asserted as Stand Alone Claims Dismissed for Failure to State a Claim

March 18, 2015

Continental Automotive GmbH and Continental Automotive Systems, Inc. (collectively "Continental") filed a multi-claim lawsuit against iBiquity Digital Corporation ("iBiquity"), which asserted causes of action for patent exhaustion (Count I), patent misuse (Count II), declaratory judgment of patent rights (Count III), as well as several state law claims. iBiquity moved to dismiss Counts I, II, and III, arguing that patent exhaustion (Count I) and patent misuse (Count II) do not arise under federal patent law because they are not proper independent claims but, rather, are defenses to an anticipated patent infringement suit. iBiquity also contended that Continental's claim seeking a declaratory judgment of patent rights (Count III) does not arise under federal patent law because it is merely a state law breach of contract claim in disguise, seeking to interpret a license agreement.

The district court began its analysis with the patent exhaustion and patent misuse claims. "iBiquity argues that the claims are merely defenses and not affirmative causes of action and, as such, they do not 'arise under' federal patent law. Def.'s Mem. Supp. Mot. Dismiss 6-8. Continental responds that this argument is irrelevant '[b]ecause subject matter jurisdiction in a declaratory judgment action is based on the claims that could be brought by the declaratory judgment defendant, rather than the declaratory judgment plaintiff.' Pl.'s Resp. Mot. Dismiss 5. Moreover, Continental asserts that patent misuse may be asserted as an affirmative claim. Id."

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District Court Denies Motion to Stay Pending Ex Parte Reexamination Where Defendant Was Competitor of Plaintiff and Chose Ex Parte Reexamination over Inter Partes Reexamination

March 16, 2015

Plaintiff Ecolab Inc. ("Ecolab") filed a patent infringement action alleging that Gurtler infringed Ecolab's patent for "SANITIZING LAUNDRY SOUR," United States Patent No. 6,262,013 (the "'013 Patent"). Gurtler subsequently filed a Request for Ex Parte Reexamination of the '013 Patent. Gurtler then filed a motion to stay and the United States Patent and Trademark Office ("PTO") granted Gurtler's Request for Ex Parte Reexamination of all claims of the '013 Patent.

In support of its motion to stay and lack of prejudice to Gurtler, Gurtler argued that Ecolab tactically delayed serving its complaint for four months, which demonstrates that "time is not of the essence" to Ecolab. Additionally, Gurtler argued that because the case was in the early stages of discovery, there was no prejudice to Ecolab. Ecolab argued it will be unduly prejudiced because it is one of Gurtler's direct competitors, its ability to litigate its claims will suffer, and because Gurtler delayed in seeking reexamination.

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District Court Denies Motion to Stay Pending Ex parte Reexamination Where Defendant Was Competitor of Plaintiff and Chose Ex Parte Reexamination over Inter Partes Reexamination

March 11, 2015

Plaintiff Ecolab Inc. ("Ecolab") filed a patent infringement action alleging that Gurtler infringed Ecolab's patent for "SANITIZING LAUNDRY SOUR," United States Patent No. 6,262,013 (the "'013 Patent"). Gurtler subsequently filed a Request for Ex Parte Reexamination of the '013 Patent. Gurtler then filed a motion to stay and the United States Patent and Trademark Office ("PTO") granted Gurtler's Request for Ex Parte Reexamination of all claims of the '013 Patent.

In support of its motion to stay and lack of prejudice to Gurtler, Gurtler argued that Ecolab tactically delayed serving its complaint for four months, which demonstrates that "time is not of the essence" to Ecolab. Additionally, Gurtler argued that because the case was in the early stages of discovery, there was no prejudice to Ecolab. Ecolab argued it will be unduly prejudiced because it is one of Gurtler's direct competitors, its ability to litigate its claims will suffer, and because Gurtler delayed in seeking reexamination.

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District Court Agrees to Stay Action Pending Inter Partes Review ("IPR") But Only if Defendants Agreed to Be Bound by Estoppel Provisions Even if They Withdraw from the IPR

March 9, 2015

After the defendants moved to stay a patent infringement action pending an IPR, the district court analyzed the impact of a potential withdrawal of petitioners from the IPR. The district court began its analysis with the understanding that this was a contingency that might not occur. "The contingency of a PTAB decision after IPR petitioner withdrawal would arise only if all IPR petitioners were to withdraw. I have no idea whether this is at all likely. Nor do I have a basis to speculate upon the reasons why a PTAB petitioner may choose to withdraw after the case has progressed to the point at which a written decision would be appropriate."

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District Court Declines to Stay Proceeding Pending Inter Partes Review Where Plaintiff and Defendant Were Direct Competitors

March 4, 2015

Card-Monroe Corp. ("CMC") manufactures tufting machines and equipment. CMC holds several patents that pertain to its machines and equipment. Tuftco Corp. ("Tuftco") is a competitor of CMC, which also engages in the manufacture and sale of tufting machines. CMC filed a patent infringement action against Tuftco, and Tuftco subsequently filed a Petition for Inter Partes Review ("IPR") of the patent-in-suit. Tuftco then filed a Motion to Stay Pending Inter Partes Review of Proceedings.

In their briefs on the motion to stay, the parties disagreed as to whether CMC would be unduly prejudiced by a stay of these proceedings. Tuftco argued that the "only potential basis for a claim of undue prejudice is the delay inherent to any stay of proceedings," but CMC claimed that it would be prejudiced if the district court stayed these proceedings because the parties are direct competitors.

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Even after Jury Trial and Final Judgment in Favor of Patent Owner, Collateral Estoppel of Invalidity from a Subsequent, Other Proceeding Applies

March 2, 2015

The plaintiff, U.S. Ethernet Innovations, LLC ("USEI"), filed a patent infringement action against several defendants in the Eastern District of Texas. The district court then transferred the cases to the Northern District of California. While litigation in the Northern District of California proceeded, USEI filed another patent infringement case against Texas Instruments Incorporated ("TI").

The TI case then proceeded with two jury trials. The first jury returned a verdict finding that the patents-in-suit ("Early Transmit Patents") were not invalid. The second jury found that TI infringed the asserted claims of U.S. Patent No 5,434,872 and awarded USEI $3,000,000.00 in damages. After the district court rejected TI's equitable defense of laches, the district court entered a Final Judgment in the case, but the Final Judgment "specifically noted that the Court was still considering the issues raised in the parties' post-verdict briefing."

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