November 2015 Archives

Calling the "Hotline": Witness Ordered to Answer "Who" and "When" Deposition Questions Regarding Litigation Hold Memorandum

November 30, 2015

On November 17, 2015, during a deposition of a fact witness, counsel for the plaintiff, Ericsson Inc. ("Ericsson"), attempted to question the witness regarding a litigation hold memorandum (the "memo"). Counsel for the plaintiff stated that she inquired as to the existence of such a memo, the date received, if any, and the recipients of the memo, if any.

Plaintiff's counsel explained to the court that the witness was directed by counsel not to answer the questions on the basis of attorney-client privilege. The court was further advised that the information was relevant because there are allegations of potential spoliation in this case.

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District Court Declines Request to Vacate Claim Construction Order after Parties Enter into Consent Judgment

November 25, 2015

Canvs filed a patent infringement action in 2014 asserting that Nivisys induced and contributed to the infringement of its patent through the sale of TACS and TACS-M products. After a lengthy stay, the district court held a Markman hearing and before the district court took any action related to the Markman hearing, Nivisys filed a Motion for Summary Judgment. After that, the district court entered its Claim Construction Order.

After the claim construction order, the partied asked the district court to enter judgment in favor of Nivisys on all claims asserted in the action and to vacate its Claim Construction Order "[t]o avoid collateral estoppel against Canvs."

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District Court Lifts Stay Pending Inter Partes Review ("IPR") after the USPTO Declined to Institute Review on Two of the Three Patents-In-Suit

November 23, 2015

The district court had previously stayed all proceedings in the pending an IPR. The district court issued the stay because the USPTO proceedings had the potential to resolve the validity of most of the claims in the patents-in-suit.

After the stay, the USPTO declined to institute the IPR with respect to two of the patents and agreed to review only a limited number of claims related to the third patent. Plaintiff Cequent Performance Products, Inc. ("Cequent") moved to lift the stay because the USPTO entirely refused to institute inter partes review proceedings on two of the patents (the '780 and '352 Patents) and refused to institute an inter partes review proceeding on nine claims related to the third patent.

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District Court Grants Motion to Dismiss for Lack of Standing Where Co-Owners of Patent Were Not Joined in Original Complaint But Permits Potential Amendment to Add Co-Owners

November 18, 2015

Cobra International, Inc. ("Cobra") filed a patent infringement action against Defendants for infringement of U.S. Patent No. 5,821,858 ("the '858 patent"). Cobra alleged that the '858 patent was issued to Allan J. Stone, who became "the owner" of the patent, and that Stone assigned the patent to Cobra.

The district court had previously granted Defendants' Renewed Motion for Summary Judgment of Patent Invalidity for Lack of Inventorship on the ground that Stone was not the sole inventor of the '858 patent, but the district court also held that Cobra "must be allowed to correct inventorship pursuant to 35 U.S.C. § 256 in order to avoid a finding of patent invalidity." Defendants subsequently moved to dismiss the on the ground that Cobra does not have complete ownership of the '858 patent and failed to join its co-owners as plaintiffs.

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District Court Denies TRO and Preliminary Injunction Where Speculation on Future Harm Did Not Show Likely Irreparable Harm

November 16, 2015

Plaintiff SATA GmbH & Co. KG ("Plaintiff") sought an ex parte Motion for Temporary Restraining Order and a Motion for Preliminary Injunction. Plaintiff alleged that Defendants Zhejiang Refine Wufu Air Tools Co., Ltd. ("Wufu") and Prona Tools, Inc. ("Prona") (collectively, "Defendants") committed trademark counterfeiting, trademark infringement, and design patent infringement through Defendants' use of Plaintiff's trademarks and design patents on Defendants' products.

The district court explained that "[i]n order to succeed on its motion, '[a] plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.' Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). Injunctive relief is 'an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.' Id. at 22."

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District Court Administratively Terminates Motion to Dismiss Because of Pending Inter Partes Reviews ("IPRs")

November 11, 2015

In this patent infringement action, Watson Laboratories, Inc.'s ("Watson") moved to dismiss several counts of the complaint filed by Jazz Pharmaceuticals, Inc. and Jazz Pharmaceuticals Ireland Limited (collectively, "Jazz"). Watson moved to dismiss these counts under Federal Rule of Civil Procedure 12(b)(6) on the grounds that the "Risk Mitigation Patents" claim ineligible subject matter under 35 U.S.C. § 101.

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Aylus v. Apple: Apple Moves to Strike Supplemental Expert Report Served After Expert Deposition and at the End of the Expert Discovery Period

November 9, 2015

After Aylus timely served the report of its technical expert, Daniel Schonfeld, and Apple deposed the expert, Aylus served a "First Supplemental Expert Report of Dan Schonfeld" at the end of the expert discovery period. Apple then filed a motion to exclude the Supplemental Report on the grounds that (1) it was untimely because it contained new opinions regarding joint infringement that could have, and should have, been raised in Dr. Schonfeld's opening report, (2) that Aylus had no justifiable excuse for the delayed disclosure, and (3) that Apple was prejudiced by the Supplemental Report.

The district court rejected Apple's first argument because Apple conceded that the Federal Circuit's en banc opinion in Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020 (Fed. Cir. 2015), which Aylus claimed provided the basis for the Supplemental Report, "modified one aspect of" the control or direction standard for joint infringement. "On a claim for direct infringement of a method patent, the court will hold an entity responsible for others' performance of method steps under two circumstances: (1) where that entity directs or controls others' performance, and (2) where the actors form a joint enterprise." Id. at 1022. The Federal Circuit held that in cases turning on the first ground, "liability under § 271(a) can also be found when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance." Id. at 1023. In such cases, "the third party's actions are attributed to the alleged infringer such that the alleged infringer becomes the single actor chargeable with direct infringement." Id.

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District Court Strikes Portion of Damage Expert Report Where the Expert Relied Upon Surveys But Did Not Explain How They Related to Specific Facts of Case

November 4, 2015

The defendants moved to exclude the expert report of Mr. Ratliff, asserting that he made critical errors in his expert report on damages. The defendants specifically alleged that Mr. Ratliff committed basic math and reasoning errors in adjusting the royalty rate in an exclusive license from 1% to 4% for the non-exclusive hypothetical license.

The defendants first asserted that Mr. Ratliff made three math errors in adjusting a license agreement to derive the reasonable royalty rate for the hypothetical license. After reviewing the expert report, the district court found the approach sufficiently reliable to be admissible under the Federal Rules of Evidence and Daubert. "Why Cree and BU lowered the original 2% running royalty to 1% in the amended agreement, and whether additional payments from Cree and the sublicensees make the licensing scheme the economic equivalent of a 3% running royalty, are factual questions that go to the weight of his testimony."

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Limestone v. Apple: Apple Successfully Moves to Dismiss Willful Infringement Claims

November 2, 2015

Limestone filed a patent infringement action against Apple, alleging direct and willful infringement of four patents. For each of the four claims of patent infringement against Apple, Limestone alleged, "[u]pon information and belief, Apple will continue its infringement notwithstanding its actual knowledge of the [four patents] and while lacking an objectively reasonable good faith basis to believe that its activities do not infringe any valid claim of the [four patents]." As such, Apple's future "acts of infringement will constitute continuing willful infringement of the [four patents]."

Apple filed a motion to dismiss Limestone's four willful infringement claims. Apple asserted that Limestone did not allege pre-litigation knowledge of the patents at issue nor did it move for a preliminary injunction. Apple argued that the willful infringement claims were deficient for these reasons.

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