May 2015 Archives

Cascades v. Samsung: Court Denies Motion to Compel Deposition of Trial Counsel but Grants Request to Produce Fee Agreement

May 28, 2015

Defendant Samsung Electronics Co. ("Samsung") filed a motion to compel plaintiff Cascades Computer Innovation, LLC ("Cascades") to produce additional documents and to require its trial counsel to appear for a deposition. Samsung moved to compel the deposition of Cascade's trial counsel based on the argument that Cascades's principal, Anthony Brown, had communicated with the trial counsel (Mr. Niro) regarding licensing and settlement negotiations.

The district court agreed that "[b]ased on the record before the Court, it is clear that Mr. Niro discussed with Brown facts and strategy for Brown's use during licensing and settlement negotiations and also suggested appropriate outcomes." But the district court found that this was not surprising as "[ll]awyers representing clients involved in contract or settlement negotiations do that every day. Doing so does not make the lawyer a witness in resulting litigation."

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Farstone v. Apple: With "far too many disputes," Court orders face-to-face meet and confer to resolve motion to compel

May 27, 2015

Apple filed a motion to compel discovery from Farstone Technology, Inc. ("Farstone") by way of a Joint Stipulation as required by the court's local rules. After the court reviewed the joint stipulation, it found that there were significant problems and that too many disputes remained for the court to resolve.

As a result, the court concluded that the meet and confer process had failed that the parties had not complied with Local Rule 37-1. "After reading the Joint Stipulation, the Court cannot but conclude that the meet and confer process has failed. There are far too many disputed issues. Both sides are not being as reasonable and flexible as they should be and as the Local Rules contemplate. Specifically, Local Rule 37-1 requires counsel to 'confer in a good faith effort to eliminate the necessity for hearing the motion or to eliminate as many of the disputes as possible.' (Emphasis added.)"

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No Vacation in Florida: Court Orders Notice of Vacation Designation Stricken

May 20, 2015

In this patent infringement action between Natural Chemistry LP and Orenda Technologies, Inc. ("Orenda"), Orenda's counsel filed a notice of vacation designation, which the district court characterized as a notice of unavailability.

In considering the notice, the district court began by noting that "[t]he rules of this Court do not provide for filing a Notice of Unavailability as a method to avoid abiding by deadlines and schedules established by the Court or to extend the time for responding to motions."

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PTAB Rejects Samsung's Bid to Join Its Own Previously Initiated IPR Proceeding As An Unjustified "Second Bite At The Apple"

May 19, 2015

In IPR2015-00821, Petitioner Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc., sought to join its Petition with a recently initiated IPR proceeding involving the same patent, parties, and counsel. The patent at issue, U.S. Patent No. 8,532,641, is directed to a music enabled communication system. Specifically, Petitioner requested inter partes review of claims 1-3, 5-7, 9, and 10 of the '641 patent using two new references, Ushiroda and Bork, in combination with references Ito, Haartsen, Rydbeck, Nokia, and Galensky, previously relied upon in IPR2014-01181. Pet. 14-46; Motion for Joinder 2-3. The Petitioner conceded that, absent joinder, the institution of inter partes review would be barred under 35 U.S.C. § 315(b) because the petition was filed more than 1 year after the date on which it had been served with a complaint alleging infringement of the '641 patent.

As explained below, the Board exercised its discretion to deny the Petitioner's motion finding that Petitioner had not provided sufficient justification for the delay in asserting the new grounds of invalidity in the current petition. As such, the Petition was merely an attempt for the Petitioner to obtain a "second bite at the apple," which runs contrary to the Board's mandate to provide just, speedy, and an inexpensive resolution of the proceedings under 37 C.F.R. § 42.1(b).

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District Court Orders Submission of Expert Reports on Damages to Determine Proper Usage of Entire Market Value Rule

May 18, 2015

Invista North America S.A. R.L. ("Invistia") filed a patent infringement action against M&G USA Corporation ("M&G"). As the case progressed toward trial, both parties exchanged expert reports on damages, which implicated the entire market value rule.

As explained by the Federal Circuit, the entire market value rule is derived from Supreme Court precedent requiring that the patentee 'must in every case give evidence tending to separate or apportion the defendant's profits and the patentee's damages between the patented feature and unpatented features, and such evidence must be reliable and tangible, and not conjectural or speculative.' Astrazeneca AB v. Apotex Corp., --- F.3d. ---, 2015 WL 1529181 at *11 (Fed. Cir. April 7, 2015).

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The PTAB Allows Discovery "Of Persons Who Provided Direction To, Or Had The Authority To Provide Direction To, Petitioner Or Its Counsel In Relation To This Proceeding"

May 15, 2015

In IPR2014-01201, Patent Owner ThermoLife International, LLC sought discovery regarding whether Purus Labs, Inc., a company related to the Petitioner John's Lone Star Distribution, Inc., should have been identified as a real party-in-interest. Specifically, the Patent Owner sought documents:

(1) "showing the corporate and management structure of Purus Labs, including any Lone Star personnel who participate in the management or corporate decision-making of Purus Labs,"

(2) "identifying the persons who provided direction to, or had the authority to provide direction to, Lone Star's counsel in this IPR, including the persons who reviewed, or were given the opportunity to review, the papers filed in this IPR," and

(3) "showing communications by or to directors, officers, or executives of Purus Labs and Lone Star regarding this IPR, including any Purus Labs Board minutes regarding such communications."

As explained below, the Board ultimately granted limited documentary discovery of Petitioner on this issue, but denied for the time being any depositions.

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Motion for Judgment on the Pleadings Based on Section 101 Denied Where Defendant Failed to Include Challenge in Invalidity Contentions

May 13, 2015

In this patent infringement action between Plaintiffs Good Technology Corporation and Good Technology Software, Inc. ("Good) and Defendant MobileIron, Inc. ("MobileIron"). Two months before the trial, MobileIron moved to dismiss the case based invalidity under 35 U.S.C. § 101.

The court, referencing the Supreme Court's decision in Alice, found the claims in the patents may indeed be abstract. "In Alice Corp. Pty. Ltd. v. CLS Bank Int'l, the Supreme Court held that 35 U.S.C. § 101 bars any patent claim directed to an abstract idea unless the claim includes "additional features" that transform the idea into a patent eligible invention. At first glance, Alice would seem to pose serious problems for each of the claims of two patents Plaintiffs Good Technology Corporation and Good Technology Software, Inc. assert against Defendant MobileIron, Inc. United States Patent No. 7.907,386 appears directed to little more than the notion of enforcing rules. United States Patent No. 7,702,322 appears no less abstract in claiming a way of ensuring the compatibility of two items used together. In the absence of a transformation of these ideas, Good would appear to be the owner of two patents worth little more than the paper they are printed on."

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District Court Denies Motion to Compel and for Sanctions Where CFO Could Not Be Compelled to Testify on Broad Deposition Topics Including Royalties, Affirmative Defenses, Infringement Contentions and Invalidity Contentions

May 11, 2015

Plaintiff Stoneeagle Services, Inc. ("Stoneeagle") filed a motion seeking sanctions against Defendant Premier Healthcare Exchange, Inc. ("PHX") for failing to provide a prepared corporate representative to testify pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure. In response to the motion, PHX did not dispute that its corporate representative was unable to respond to all of the questions posed to him during the deposition, but instead asserted that the notice of deposition contained forty-five deposition topics covering broad topics and, therefore, lacked specificity.

The district court first analyzed the requirement of Rule 30(b)(6), noting that the corporation's obligation under Rule 30(b)(6) "does not mean that the witness can never answer that the corporation lacks knowledge of a certain fact." New World Network Ltd. v. M/V Norwegian Sea, 2007 WL 1068124 (S.D. Fla. 2007) ("if a witness is not prepared to answer a slew of questions that are glaringly irrelevant to the claims or defenses in a case, a requesting party who seeks to compel or sanction a deponent for not knowing such answers will not be successful before the Court, and indeed may himself be sanctioned under Rule 37 if the Court finds that the questions were so improper and the party's position substantial unjustified").

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BBQ Patent Must Face The Heat: Petition Is Not Barred When Filed Within 1 Year of the Filing of a Waiver of Service in the District Court

May 7, 2015

On October 13, 2014, The Brinkman Corporation filed a petition for Inter Partes Review of U.S. Patent 8,381,712 directed to a barbecue grill that allows simultaneous gas grilling and charcoal-fueled grilling. A&J Manufacturing, the owner of the '712 patent, challenged Petitioner's standing to file the IPR based on the fact that the Petition was filed more than one year after the Petitioner received a copy of the complaint filed in a district court alleging infringement of the '712 patent or, alternatively, that the Petition was filed more than one year after the service of an ITC Complaint alleging infringement of the '712 patent. The Board rejected the Petitioner's arguments and held that the relevant start of the one year time bar under 35 U.S.C. § 315(b) is the date when the waiver of service of the complaint executed by the Petitioner was filed with the district court. Based on this date, the Petition was filed within the allotted time.

Pursuant to 35 U.S.C. § 315(b), "[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent."

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Another One Bites the Dust: Action Dismissed for Lack of Standing Where Plaintiff Could Not Prove Ownership of the Patent-In-Suit

May 6, 2015

America's Collectibles Network ("ACN") filed a patent infringement action in which it claimed to own U.S. Patent No. 8,370,211 (the "211 Patent"). It brought this action against the Genuine Gemstone Company ("Genuine Gemstone"). Genuine Gemstone filed a motion to dismiss contending that it is the rightful owner of the 211 Patent and that ACN lacks standing to assert infringement.

The district court explained the background facts as follows: "On June 18, 2010, The Colourful Company Group acquired Gems TV (UK) Ltd--the then owner of the 211 Patent--through a share purchase agreement. After the transaction was completed, Gems TV (UK)'s former director, Anthony Hillyer, signed a document purportedly assigning Gems TV (UK)'s interest in the patent to a US affiliate that was not part [of] the sale. ACN traces its chain of title back to that assignment. If the assignment was valid, as ACN contends, then ACN is the rightful owner of the 211 Patent, and this suit may proceed. On the other hand, if the assignment was invalid as the defendant claims, then ACN is not the rightful owner of the 211 Patent, and it lacks standing to assert its infringement claim."

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Patent Owner Must Produce Documents That Are Inconsistent with Its Positions

May 5, 2015

In IPR2014-00727, Petitioner C&D Zodiac, Inc. seeks review of U.S. Patent No. 8,590,838 owned by B/E Aerospace, Inc. The '838 patent relates to a "spacewall" lavatory. In connection with the IPR proceeding, the Petitioner sought, as "Routine Discovery," documents that it contends are inconsistent with positions the Patent Owner has advanced in the IPR. The Board granted the discovery over the Patent Owner's opposition.

Pursuant to 37 C.F.R. § 42.51(b)(1)(iii), "[u]nless previously served, a party must serve relevant information that is inconsistent with a position advanced by the party during the proceeding concurrent with the filing of the documents or things that contains the inconsistency."

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Fairchild v. Power Integrations: Because of Right to Appeal, District Court Precludes Reference to Pending Reexamination Proceedings Even Though PTO Had Rejected All Claims

May 4, 2015

Fairchild Semiconductor Corp. and Fairchild (Taiwan) Corp.'s
(collectively, "Fairchild") moved in limine to preclude any reference to any pending reexamination proceeding or any completed reexamination proceeding of any asserted patent. Defendant Power Integrations, Inc. ("PI") asserted that the fact the PTO finally rejected all asserted claims of the patent "is central to the 'specific intent' element (or the lack thereof) of Fairchild's inducement claim" and also negated Fairchild's proof of intent with respect to willful infringement.

The district court disagreed with PI. Noting that the Federal Circuit "has often warned of the limited value of actions by the PTO when used for" the purpose of "negating the requisite intent for inducement," the district court stated that the "[t]he pending reexamination of Fairchild's asserted patent is not final, as Fairchild has appellate rights. Pursuant to Federal Rule of Evidence 403, the limited probative value of evidence of the reexamination' is substantially outweighed by the risk of unfair prejudice to Fairchild, especially the risk of confusion and the need to educate jurors on administrative proceedings governed by different standards and on the potential for reversal of the PTO on appeal."

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